VIENNA, Va., March 13, 2008 (PRIME NEWSWIRE) -- Ariel Way, Inc., (OTCBB:AWYI) Chairman, President and CEO Arne Dunhem issued the following Letter to Shareholders:
Dear Ariel Way Shareholders:
Since my last letter on December 4, 2007 there have been many exciting developments, and I would like to provide an update.
Background
Ariel Way, Inc. has been focusing on developing innovative and secure technologies, acquiring and growing profitable advanced technology companies and global communications service providers. Since December 2007, we have been actively expanding our focus from being a "telecommunications company" to becoming a multiservice multimedia company. With the acquisition of strategic companies, we are working on the build-out of a nationwide Digital Signage Network that is a new platform for companies to promote and advertise products and services while providing valuable information to targeted audiences as they shop, work and play in malls, stores and other strategic locations.
During 2005 - 2007, we provided in both the U.S. and Europe solutions over large satellite networks for corporate encrypted Business Television (BTV) services. Among others, we provided services for one of the biggest banking groups in the United Kingdom with over 1,500 bank branch offices throughout the UK.
On February 21, 2008, we completed our acquisition of Syrei Holding UK, Ltd. a UK and Sweden based telecom-consulting firm comprised of senior specialists and experts in the evolving global telecommunications market (www.syrei.com).
We announced a Letter of Intent to acquire Lime Truck, Inc., a Dallas, TX based Out-of-Home advertising company specialized in nationwide advertising, marketing and public relations campaigns based on mobile advertising trucks (www.limetruck.com). We also announced that we had signed a Letter of Intent to acquire Mason Media Networks, LLC, (www.masonmedianetworks.com) which is a Washington, D.C. digital signage company that specializes in providing complete digital signage solutions. In addition, we are still actively pursuing our acquisition of a minority position in FaceTime Strategy, LLC (www.facetimestrategy.com).
Plans Going Forward
I am very pleased with our acquisition of Syrei. It is a company with an energetic and active management team based out of Stockholm, Sweden, with its CEO Thomas Strangert. He has a great team of highly skilled technical experts and they have for more than ten years successfully been providing and will continue to provide services worldwide to major corporations and telecom operators. They will also add global expertise to our strategy of building a state-of-the-art highly secure Digital Signage Network. Their primary focus will be on markets in Europe and Asia.
Our subsidiary Syrei's customers include well-known corporations and telecom operators like Ericsson, Nokia, 3GIS, ABB, Orange, SonyEricsson, Swedbank, Tele2, TeliaSonera, TIM etc. The revenue for Syrei for 2008 is conservatively forecasted to be over $7 million with an EBITDA of about 10%. However, with new opportunities, our target would be to increase with over 50%.
We are in the midst of the activities for the acquisitions of Lime Truck and Mason Media Networks. Lime Truck is an exciting and burgeoning Out-of-Home advertising company in a market that is poised to rapidly expand nationwide in the coming years. It would be very strategic for us of having direct access to Lime Truck's mobile advertising operation. They have an outstanding nationwide client base together with their sister company Lime Media, LLC that includes McDonalds, IKEA, GM, Ford, Bass Pro Shops, South West Airlines, T-Mobile, KFC, to mention a few.
Mason Media Networks develops, builds and manages private communications networks for Out-of-Home advertising, corporate communications, promotion and entertainment. They provide digital signage networks and networks broadcasted via new media from the Internet to your pocket and will have some very exiting customer opportunities.
With the completion of these acquisitions, we will be squarely in the highly profitable multimedia and digital signage business, which is our strategic business focus going forward. We will also have added a highly skilled team of people to our Company and management, both in the U.S. and in Europe. We believe we will ultimately be able to offer an advertising client a complete offering of Out-of-Home advertising campaigns, over our own nationwide in-store and shopping mall digital signage network combined with mobile outdoor advertising nationwide. Strategically, the typical advertising clients happen to be the same type of clients as Lime Truck currently has.
According to PEW Research, the market size for our target business, the Digital Interactive Advertising and Marketing industry, is expected to grow from $21 billion in annual revenue in 2007 to over $45 billion in 2008. Our share of this market is very small, but potentially rapidly growing. If our current plan works together with one more acquisition being worked on, were are forecasting that the full year of operation could reach over $21 million in revenue at about $2 million in EBITDA. The EBITDA could be much higher; however, we intend to re-invest the operational profit into our build-out of our own nationwide digital signage network. In addition, but subject to our success in executing our overall plan, we will attempt to acquire two other companies that could bring our total annual highly profitable revenue level to over $100 million by year end 2008.
Ultimately, the intent is to re-build the shareholder value. Long-term, we also have to qualify for an application to be listed with a major market like NASDAQ National Market and to graduate from the Bulletin Board as soon as possible. Currently, we are subject to the SEC's "penny stock rules" because we are on the Bulletin Board and our stock price is less than $5.00 per share. That means that stockbrokers cannot legally "solicit" their clients to buy Ariel Way stock. Also, many institutions are limited to buying only listed stocks -- a key reason for us to become fully listed.
As we have disclosed in our annual and quarterly SEC filings, we have over the last several months been in serious negotiations with one of our early investors, Yorkville Advisors Global Investments, LP (f/k/a Cornell Capital Partners, LLP). No final agreement has yet been reached, but we hope that such can be reached very soon. Also, as we have previously indicated, we need to increase our authorized number of shares in order to support the acquisitions and some additional financing activities.
Considering our consolidated revenue and earnings level, including Syrei, and considering typical valuation metrics, I believe our stock price is significantly undervalued. However, as we continue to build our Company, I am sure the pricing will adjust to a more appropriate level.
In closing, I again would like to personally thank each and every Shareholder for their support and I look forward to be part of building Ariel Way into a large, profitable company.
Respectfully, Arne Dunhem Chairman, President and CEO Ariel Way, Inc.
More information about Ariel Way can be found on the web at http://www.arielway.com.
Forward-Looking Statements: Certain of the statements contained herein may be, within the meaning of the federal securities laws, "forward-looking statements," which are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. See the Company's Form 10-KSB for the fiscal year ended September 30, 2007 for a discussion of such risks, uncertainties and other factors. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. These forward-looking statements are based on management's expectations as of the date hereof, and the Company does not undertake any responsibility to update any of these statements in the future.