Wayside Technology Group, Inc. Reports 2008 Second Quarter Results and Declares Quarterly Dividend

Sales: $48.1 Million, up 9% Year-Over-Year; Change in VMware Agreement Announced; Promotion of Shawn Giordano to Vice President of Sales for Programmer's Paradise and TechXtend; Expansion of Stock Buyback Program by 500,000 Shares


SHREWSBURY, NJ--(Marketwire - July 31, 2008) - Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the second quarter ended June 30, 2008. The results will be discussed in a conference call to be held on Friday, August 1, 2008 at 10:00 AM Eastern time. The dial-in telephone number is (866) 814-8476 and the pass code is "WSTG."

This conference call will be available via live webcast -- in listen-mode only -- at www.earnings.com. A replay will be available on our website at www.waysidetechnology.com.

Total net sales for the second quarter of 2008 increased 9% or $4.1 million to $48.1 million compared to $44.0 million for the same period in 2007. Sales for the second quarter of 2008 for our Lifeboat segment were $35.0 million compared to $33.7 million in the second quarter of 2007, representing a 4% increase. Sales for the second quarter of 2008 for our Programmer's Paradise segment were $13.1 million compared to $10.4 million in the second quarter of 2007, representing a 26% increase. Gross profit margin, as a percentage of net sales, for the quarter ending June 30, 2008 was 8.9% compared to 9.8% in the second quarter of 2007.

"The second quarter of 2008 was a great quarter for us. We are pleased to report that our strategy to add new publishers as well as expand our current relationships with software publishers is working well. Our Programmer's Paradise segment continued to attract more and more customers with our service-centric approach," said Simon F. Nynens, Chairman and Chief Executive Officer. "Our Lifeboat segment also performed very well. Excluding VMware, Lifeboat's sales increased by $4.0 million or 21% compared to the second quarter of 2007. We signed new distribution contracts with 14 software publishers in the second quarter of 2008."

The company also announced a change in its agreement with VMware. As a result, Lifeboat Distribution will cease distributing VMware-labeled products as of October 1, 2008, while VMware will expand its relationship with Programmer's Paradise and TechXtend. Commenting on the change, Simon F. Nynens said, "As VMware's partner ecosystem has evolved, both companies believe that focusing on Programmer's Paradise and TechXtend is mutually beneficial. This should result in additional product and service opportunities for these subsidiaries."

Nynens continued, "Lifeboat will continue to focus on software that is complementary to VMware as well as other virtualization platforms. Distribution sales for complementary virtualization software have shown significant growth. We will continue to focus on adding value for our distribution partners. We are a value added distributor and we will remain a value added distributor."

While VMware-labeled distribution sales amounted to $11.7 million, or 24% of our overall Q2 2008 revenue, product gross margin amounted to $320,000, or 7% of our overall Q2 2008 gross margin. VMware-labeled distribution sales amounted to $14.3 million, or 33% of our overall Q2 2007 revenue; product gross margin amounted to $696,000, or 16% of our overall Q2 2007 gross margin.

Total gross profit for the quarter ended June 30, 2008 was $4.3 million compared to $4.3 million in the second quarter of 2007.

Gross profit for our Programmer's Paradise segment for the quarter ended June 30, 2008 was $1.5 million compared to $1.3 million in the second quarter of 2007. Gross margin, as a percentage of net sales, was 11.2% versus 12.9% in Q2 2007. Gross margin as a percentage was impacted by several large orders in Q2 2008. These large orders typically carry lower gross margins.

Gross profit for our Lifeboat segment for the quarter ended June 30, 2008 was $2.8 million compared to $3.0 million in the second quarter of 2007. Gross margin, as a percentage of net sales, was 8.1% versus 8.9% in Q2 2007. These results reflect the continued pricing pressure in distribution.

Total selling, general, and administrative ("SG&A") expenses for the second quarter of 2008 were $3.1 million compared to $3.0 million in the second quarter of 2007.

Net income for the second quarter of 2008 amounted to $823,000 or 1.7% of net sales as compared to $959,000 or 2.2% for the same period in 2007.

The company today also announced the appointment of Shawn J. Giordano as Vice President of Sales for Programmer's Paradise and TechXtend. Shawn Giordano joined Wayside Technology Group in November 2007 as Senior Director of Sales for Programmer's Paradise and TechXtend. From 2000 to 2007, Mr. Giordano worked for CA, Inc. where he held several sales and management positions. His most recent position was Director of Channel Sales. "Shawn is an energetic and focused sales leader," said Nynens. "We're excited to have him on our team and we look forward to his contribution to the continued success of our organization."

The company today also announced that the Board of Directors approved the increase of its common stock repurchase program by 500,000 shares. Including these 500,000 shares, the total amount of shares available for repurchase now amounts to 627,646 shares. The company expects to purchase shares from time to time in the market or otherwise subject to market conditions.

On July 30, 2008, the Board of Directors declared a quarterly dividend of $.15 per share of its common stock payable August 20, 2008 to shareholders of record on August 7, 2008.

About Wayside Technology Group, Inc.

Wayside Technology Group, Inc. (NASDAQ: WSTG) was founded in 1982 and is a unified and integrated technology company providing products and solutions for corporate resellers, VARs, and developers, as well as business, government and educational entities. The company offers technology products from software publishers and manufacturers such as Microsoft, CA, IBM, VMware, Borland, Quest Software, Compuware, Infragistics, ComponentOne, Acresso, and Adobe.

Additional information can be found by visiting www.waysidetechnology.com.

The statements in this release concerning the Company's future prospects are forward-looking statements that involve certain risks and uncertainties. Such risks and uncertainties include the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, and contribution of key vendor relationships and support programs. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in our filings with the Securities and Exchange Commission.

              WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
            (In thousands, except share and per share amounts)



                                                  June 30,    December 31,
                                                    2008          2007
                                                ------------  ------------
                                                (Unaudited)
                    ASSETS

Current assets
  Cash and cash equivalents                     $     12,764  $     14,241
  Marketable securities                                9,767         9,641
  Accounts receivable, net of allowances of
   $832 and $908, respectively                        26,086        24,824
  Inventory - finished goods                           1,368         1,116
  Prepaid expenses and other current assets              988           927
  Deferred income taxes                                  772           830
                                                ------------  ------------
Total current assets                                  51,745        51,579

Equipment and leasehold improvements, net                720           619
Other assets                                           4,647         3,469
Deferred income taxes                                    948         1,086
                                                ------------  ------------

Total assets                                    $     58,060  $     56,753
                                                ============  ============


      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable and accrued expenses               34,049        32,100
                                                ------------  ------------
Total current liabilities                             34,049        32,100

Other liabilities                                        148           161
                                                ------------  ------------
Total liabilities                                     34,197        32,261

Commitments and contingencies

Stockholders' equity
  Common stock, $.01 par value; 10,000,000
   shares authorized, 5,284,500 shares issued;
   4,675,651 and 4,708,498 shares outstanding,
   respectively                                           53            53
  Additional paid-in capital                          27,610        28,860
  Treasury stock, at cost, 608,849 and 576,002
   shares, respectively                               (3,029)       (2,283)
  Accumulated deficit                                 (1,147)       (2,599)
  Accumulated other comprehensive income                 376           461
                                                ------------  ------------
Total stockholders' equity                            23,863        24,492
                                                ------------  ------------
Total liabilities and stockholders' equity      $     58,060  $     56,753
                                                ============  ============




              WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE
                                  INCOME
                                (Unaudited)
                  (In thousands, except per share data)


                                     Six months ended    Three months ended
                                          June 30,            June 30,
                                      2008      2007      2008      2007
                                    --------  --------- --------  ---------

Net Sales                           $ 88,602  $  90,962 $ 48,096  $  44,040

Cost of sales                         80,559     82,170   43,798     39,703
                                    --------  --------- --------  ---------

Gross profit                           8,043      8,792    4,298      4,337

Selling, general and administrative
 expenses                              6,016      6,036    3,074      2,993
                                    --------  --------- --------  ---------

Income from operations                 2,027      2,756    1,224      1,344

Interest income, net                     376        491      142        251

Realized foreign exchange gain
 (loss)                                    7          -        4          1
                                    --------  --------- --------  ---------

Income before income tax provision     2,410      3,247    1,370      1,596

Provision for income taxes               958      1,298      547        637
                                    --------  --------- --------  ---------

Net income                          $  1,452  $   1,949 $    823  $     959
                                    ========  ========= ========  =========

Net income per common share - Basic $   0.33  $    0.44 $   0.19  $    0.22
                                    ========  ========= ========  =========

Net income per common share -
 Diluted                            $   0.32  $    0.42 $   0.18  $    0.20
                                    ========  ========= ========  =========


Weighted average common shares
 outstanding - Basic                   4,429      4,380    4,417      4,407
                                    ========  ========= ========  =========
Weighted average common shares
 outstanding - Diluted                 4,519      4,687    4,505      4,706
                                    ========  ========= ========  =========


Reconciliation to comprehensive
 income:


Net income                          $  1,452  $   1,949 $    823  $     959

  Other comprehensive income
   (loss), net of tax:

    Unrealized gain on marketable
     securities                          (14)         -       (6)         -

    Foreign currency translation
     adjustments                         (71)       162       16        143
                                    --------  --------- --------  ---------

Total comprehensive income          $  1,367  $   2,111 $    833  $   1,102
                                    ========  ========= ========  =========

Contact Information: Company Contact: Kevin Scull Wayside Technology Group, Inc. Vice President and Chief Accounting Officer (732) 389-0932