SOURCE: ADDvantage Technologies Group, Inc.

December 11, 2012 08:00 ET

ADDvantage Technologies Announces Financial Results for the Fiscal Fourth Quarter of 2012

Total Revenue of $35.2 Million and Net Income of $0.12 per Diluted Share for Fiscal Year 2012; Total Revenue of $8.5 Million and Net Income of $0.04 per Diluted Share for the Fourth Quarter of Fiscal Year 2012

BROKEN ARROW, OK--(Marketwire - Dec 11, 2012) - ADDvantage Technologies Group, Inc. (NASDAQ: AEY) today announced its results for the three month period and year ended September 30, 2012.

Revenue for the three months ended September 30, 2012 decreased 25% to $8.5 million compared to $11.3 million for the same period last year. New equipment sales were $5.1 million for the three months ended September 30, 2012 as compared to $7.0 million for the three months ended September 30, 2011. Net refurbished equipment sales were $2.2 million for the three months ended September 30, 2012 as compared to $2.8 million for the same period last year. Sales of new and refurbished equipment continued to be negatively impacted by several factors including the continued decrease in plant expansions and bandwidth upgrades in the cable television industry. Service revenue decreased to $1.2 million for the three month period ended September 30, 2012 compared to $1.5 million for the same period last year.

Net income was $0.4 million, or $0.04 per diluted share, for the three month period ended September 30, 2012, compared to $0.7 million, or $0.07 per diluted share, for the same period of 2011. Net income for the fourth quarter of fiscal 2012 benefited from a $0.2 million reduction in interest expense compared to the same period last year, which was a result of the Company paying off one of its term loans in March 2012 and the termination of the associated interest rate swap agreement.

For the twelve months ended September 30, 2012, revenue decreased to $35.2 million from $38.1 million for the same period last year. The decrease in equipment sales was primarily due to the continued decrease in plant expansions and bandwidth upgrades in the cable television industry, partially offset by revenue from Adams Global Communications, which was acquired in May 2011. 

Net income attributable to common stockholders for the twelve month period was $1.3 million, or $0.12 per diluted share, as compared to $2.5 million, or $0.25 per diluted share, for the twelve months of fiscal 2011. Net income for fiscal 2012 included a charge to interest expense of $0.8 million for the termination of the interest rate swap agreement, partially offset by reduced interest expense of $0.4 million subsequent to paying off one of its term loans and terminating the associated interest rate swap agreement.

David Humphrey, President and CEO, commented, "Our results continue to reflect a general weakness in equipment sales in the cable television industry. However, we still maintained our gross margins at approximately 30% and generated $1.3 million of net income in fiscal year 2012. We also improved our overall balance sheet position in fiscal year 2012 by paying off one of our term loans and terminating the associated interest rate swap agreement.

"This year, the Company began to make changes to the management team and our business to better position our Company for growth both organically and through acquisitions. There are more management changes that will be made in the coming months in order to properly align our corporate structure with our growth strategy. 

"We continue to generate positive cash flow from our existing business and have a strong balance sheet in order to implement this growth strategy. This has been partially supported by acquisitions that have added sales through new suppliers to our core resale business or expanded our existing customer base within our current business, such as Adams Global Communications in May 2011. Looking ahead, we are currently seeking new acquisition opportunities that will enable us to expand the scope of our business within the cable industry," concluded Mr. Humphrey.

Earnings Conference Call
As previously announced, the Company will host a conference call on Tuesday, December 11, 2012, at 12:00 p.m. Eastern Time featuring remarks by Ken Chymiak, Chairman of the Board, David Humphrey, President and Chief Executive Officer, Dave Chymiak, Chief Technology Officer, and Scott Francis, Chief Financial Officer. The conference call will be available via webcast and can be accessed through the Investor Relations section of ADDvantage's website, www.addvantagetechnologies.com. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the Internet broadcast. The dial-in number for the conference call is (888)-503-8169 (domestic) or (719)-325-2455 (international). All dial-in participants must use the following code to access the call: 1343147. Please call at least five minutes before the scheduled start time.

For interested individuals unable to join the conference call, a replay of the call will be available through December 25, 2012 at (877) 870-5176 (domestic) or (858) 384-5517 (international). Participants must use the following code to access the replay of the call: 1343147. The online archive of the webcast will be available on the Company's website for 30 days following the call.

About ADDvantage Technologies Group, Inc.
ADDvantage Technologies Group, Inc. supplies the cable television (CATV) industry with a comprehensive line of new and used system-critical network equipment and hardware from leading manufacturers, including Cisco, Motorola, ARRIS and Fujitsu Frontech North America, as well as operating a national network of technical repair centers. The equipment and hardware ADDvantage distributes is used to acquire, distribute, and protect the broad range of communications signals carried on fiber optic, coaxial cable and wireless distribution systems, including television programming, high-speed data (Internet) and telephony.

ADDvantage operates through its subsidiaries, Tulsat, Tulsat-Atlanta, Tulsat-Nebraska, Tulsat-Texas, NCS Industries, ComTech Services and Adams Global Communications. For more information, please visit the corporate web site at www.addvantagetechnologies.com.

The information in this announcement may include forward-looking statements. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements. These statements are subject to risks and uncertainties, which could cause actual results and developments to differ materially from these statements. A complete discussion of these risks and uncertainties is contained in the Company's reports and documents filed from time to time with the Securities and Exchange Commission.

(Tables follow)

 
ADDVANTAGE TECHNOLGIES GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
    Three Months Ended
September 30,
    Year Ended
September 30,
    2012   2011     2012   2011
Sales:                          
  Net new sales income   $ 5,126,330   $ 6,956,791     $ 20,743,264   $ 25,467,734
  Net refurbished sales income     2,167,944     2,805,656       9,814,763     7,430,603
  Net service income     1,188,005     1,495,727       4,658,376     5,181,193
Total net sales     8,482,279     11,258,174       35,216,403     38,079,530
Cost of sales     5,975,012     7,838,998       24,854,960     26,528,682
Gross profit     2,507,267     3,419,176       10,361,443     11,550,848
Operating, selling, general and administrative expenses    
1,843,382
   
1,939,857
     
7,231,097
   
6,625,907
Income from operations     663,885     1,479,319       3,130,346     4,924,941
Interest expense     7,192     165,930       1,113,854     696,634
Income before income taxes     656,693     1,313,389       2,016,492     4,228,307
Provision for income taxes     236,000     584,000       766,000     1,692,000
Net income     420,693     729,389       1,250,492     2,536,307
                           
Other comprehensive income:                          
  Unrealized gain (loss) on interest rate swap, net of taxes    
-
   
(11,528
)    
587,258
   
189,425
                           
Comprehensive income   $ 420,693   $ 717,861     $ 1,837,750   $ 2,725,732
                           
Earnings per share:                          
  Basic   $ 0.04   $ 0.07     $ 0.12   $ 0.25
  Diluted   $ 0.04   $ 0.07     $ 0.12   $ 0.25
Shares used in per share calculation:                          
  Basic     10,189,120     10,207,390       10,196,241     10,175,213
  Diluted     10,189,563     10,209,323       10,197,496     10,178,763
                           
   
ADDVANTAGE TECHNOLGIES GROUP, INC.  
CONSOLIDATED BALANCE SHEETS  
   
    September 30,  
    2012     2011  
Assets                
Current assets:                
  Cash and cash equivalents   $ 5,191,514     $ 10,943,654  
  Accounts receivable, net of allowance of $300,000     3,050,796       4,244,049  
  Income tax refund receivable     409,386       349,745  
  Inventories, net of allowance for excess and obsolete inventory of $1,000,000 and $1,556,000, respectively    
22,666,385
     
25,777,747
 
  Prepaid expenses     129,357       177,486  
  Deferred income taxes     920,000       1,059,000  
Total current assets     32,367,438       42,551,681  
                 
Property and equipment, at cost:                
  Land and buildings     8,794,272       8,683,679  
  Machinery and equipment     2,953,949       2,856,615  
  Leasehold improvements     9,633       205,797  
Total property and equipment, at cost     11,757,854       11,746,091  
Less accumulated depreciation and amortization     (3,666,327 )     (3,392,329 )
Net property and equipment     8,091,527       8,353,762  
                 
Other assets:                
  Deferred income taxes     -       403,000  
  Goodwill     1,560,183       1,560,183  
  Other assets     13,778       19,245  
Total other assets     1,573,961       1,982,428  
                 
Total assets   $ 42,032,926     $ 52,887,871  
                 
                 
Liabilities and Shareholders' Equity                
Current liabilities:                
  Accounts payable   $ 1,437,492     $ 2,675,907  
  Accrued expenses     1,030,174       1,240,224  
  Notes payable - current portion     184,008       1,814,008  
Total current liabilities     2,651,674       5,730,139  
                 
Notes payable, less current portion     1,502,612       10,244,120  
Deferred income taxes     62,000       -  
Other liabilities     -       957,258  
                 
Shareholders' equity:                
  Common stock, $.01 par value; 30,000,000 shares authorized; 10,465,323 and 10,431,354 shares issued, respectively; 10,189,120 and 10,207,390 shares outstanding, respectively    

104,653
     

104,314
 
  Paid in capital     (5,748,503 )     (5,884,521 )
  Retained earnings     43,980,590       42,730,098  
  Accumulated other comprehensive loss:                
    Unrealized loss on interest rate swap, net of tax     -       (587,258 )
  Total shareholders' equity before treasury stock     38,336,740       36,362,633  
                   
  Less: Treasury stock, 276,203 and 223,964 shares, respectively, at cost    
(520,100
)    
(406,279
)
Total shareholders' equity     37,816,640       35,956,354  
                 
Total liabilities and shareholders' equity   $ 42,032,926     $ 52,887,871  

Contact Information

  • ADDvantage Technologies Group, Inc.
    1221 E. Houston
    Broken Arrow, Oklahoma 74012

    For further information
    Company Contact:
    Scott Francis
    (918) 251-9121

    KCSA Strategic Communications
    Garth Russell / Diane Imas
    (212) 896-1250 / (212) 896-1242
    grussell@kcsa.com / dimas@kcsa.com