SOURCE: ADDvantage Technologies Group, Inc.

August 07, 2012 08:00 ET

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

Total Revenue of $8.5 Million and Net Income of $0.05 per Diluted Share

BROKEN ARROW, OK--(Marketwire - Aug 7, 2012) - ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced its results for the three and nine month periods ended June 30, 2012.

Revenue for the three months ended June 30, 2012 slightly decreased to $8.5 million compared to $8.7 million for the same period last year. Sales of new equipment were $4.6 million for the three months ended June 30, 2012 as compared to $5.6 million for the three months ended June 30, 2011. New equipment sales continued to be negatively impacted by several factors including the continued economic downturn in the cable television industry as multiple system operator ("MSO") customers continue to conserve cash and limit capital expenditures. Net refurbished equipment sales were $2.7 million for the three months ended June 30, 2012 as compared to $1.9 million for the same period last year. This increase was driven primarily by our acquisition of Adams Global Communications in May 2011. Service revenue was unchanged at $1.2 million for the three month period ended June 30, 2012 compared to June 30, 2011.

Net income was $0.5 million, or $0.05 per diluted share for the three month periods ended June 30, 2012 and 2011. Net income for the third 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 nine months ended June 30, 2012, revenue was relatively unchanged at $26.7 million compared to $26.8 million for the same period last year. Net income for the nine month period was $0.8 million, or $0.08 per diluted share, as compared to $1.8 million, or $0.18 per diluted share, for the first nine months of fiscal 2011. Net income for the nine months ended June 30, 2012 included a charge to interest expense of $0.8 million for the termination of the interest rate swap agreement.

"Our results for the fiscal third quarter of 2012 continued to reflect a general weakness in equipment sales due to the economic downturn in the cable television industry. This was partially offset by revenues generated from our acquisition of Adams Global Communications in May 2011, which allowed us to report a 40% increase in our refurbished equipment sales and relatively flat total revenue for the quarter compared to the same period last year. Also, our payoff of one of our term loans and the associated interest rate swap agreement in March 2012 led to a significant reduction in interest expense for the fiscal third quarter of 2012. As a result, we reported net income of $0.5 million, which was flat compared to the same period of fiscal 2011," stated David Humphrey, President and CEO of ADDvantage Technologies.

"The company continues to evaluate growth opportunities, both organically and through acquisitions. We believe that our current business is well positioned financially to support these activities, which would help stimulate both short-term and long-term growth," concluded Mr. Humphrey.

Earnings Conference Call
As previously announced the Company will host a conference call on Tuesday, August 7, 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 (877)-852-6543 (domestic) or (719)-325-4744 (international). All dial-in participants must use the following code to access the call: 4990038. 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 August 21, 2012 at (877) 870-5176 (domestic) or (858) 384-5517 (international). Participants must use the following code to access the replay of the call: 4990038. 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 June 30,     Nine Months Ended June 30,
    2012   2011     2012   2011
Sales:                          
  Net new sales income   $ 4,643,661   $ 5,568,777     $ 15,616,934   $ 18,510,943
  Net refurbished sales income     2,691,269     1,923,665       7,646,819     4,624,947
  Net service income     1,163,843     1,202,763       3,470,371     3,685,466
Total net sales     8,498,773     8,695,205       26,734,124     26,821,356
Cost of sales     5,910,937     6,127,808       18,879,948     18,689,684
Gross profit     2,587,836     2,567,397       7,854,176     8,131,672
Operating, selling, general and administrative expenses    
1,828,238
   
1,642,403
     
5,387,715
   
4,686,050
Income from operations     759,598     924,994       2,466,461     3,445,622
Interest expense     7,300     170,417       1,106,662     530,704
Income before provision for income taxes     752,298     754,577       1,359,799     2,914,918
Provision for income taxes     293,000     287,000       530,000     1,108,000
Net income     459,298     467,577       829,799     1,806,918
                           
Other comprehensive income:                          
  Unrealized gain (loss) on interest rate swap, net of taxes    
-
   
(29,838
)    
587,258
   
200,953
                           
Comprehensive income   $ 459,298   $ 437,739     $ 1,417,057   $ 2,007,871
                           
Earnings per share:                          
  Basic   $ 0.05   $ 0.05     $ 0.08   $ 0.18
  Diluted   $ 0.05   $ 0.05     $ 0.08   $ 0.18
Weighted average shares used in per share calculation:                          
  Basic     10,189,120     10,195,135       10,198,691     10,164,487
  Diluted     10,189,683     10,197,372       10,199,756     10,168,613
   
   
ADDVANTAGE TECHNOLGIES GROUP, INC.  
CONSOLIDATED BALANCE SHEETS  
   
    June 30,
2012
(unaudited)
    September 30,
2011
(audited)
 
Assets                
Current assets:                
  Cash and cash equivalents   $ 3,167,601     $ 10,943,654  
  Accounts receivable, net of allowance of $300,000     3,153,566       4,244,049  
  Income tax refund receivable     86,711       349,745  
  Inventories, net of allowance for excess and obsolete inventory of $1,908,000 and $1,556,000, respectively     23,852,155       25,777,747  
  Prepaid expenses     124,483       177,486  
  Deferred income taxes     1,122,000       1,059,000  
Total current assets     31,506,516       42,551,681  
                 
Property and equipment, at cost:                
  Land and buildings     8,794,272       8,683,679  
  Machinery and equipment     2,958,699       2,856,615  
  Leasehold improvements     205,797       205,797  
Total property and equipment, at cost     11,958,768       11,746,091  
Less accumulated depreciation and amortization     (3,658,749 )     (3,392,329 )
Net property and equipment     8,300,019       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   $ 41,380,496     $ 52,887,871  
                 
Liabilities and Shareholders' Equity                
Current liabilities:                
  Accounts payable   $ 1,364,524     $ 2,675,907  
  Accrued expenses     865,880       1,240,224  
  Notes payable - current portion     184,008       1,814,008  
Total current liabilities     2,414,412       5,730,139  
                 
Notes payable, less current portion     1,548,614       10,244,120  
Deferred income taxes     53,000       -  
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; and 10,189,120 and 10,207,390 shares outstanding, respectively    
104,653
     
104,314
 
  Paid in capital     (5,779,980 )     (5,884,521 )
  Retained earnings     43,559,897       42,730,098  
  Accumulated other comprehensive loss:                
    Unrealized loss on interest rate swap, net of tax     -       (587,258 )
  Total shareholders' equity before treasury stock     37,884,570       36,362,633  
                   
  Less: Treasury stock, 276,203 and 223,964 shares, respectively, at cost     (520,100 )     (406,279 )
Total shareholders' equity     37,364,470       35,956,354  
                 
Total liabilities and shareholders' equity   $ 41,380,496     $ 52,887,871  

Contact Information

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

    KCSA Strategic Communications
    Garth Russell / Jason Maymudes
    (212) 896-1250 / (212) 896-1211
    grussell@kcsa.com / jmaymudes@kcsa.com

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