SOURCE: ADDvantage Technologies Group, Inc.

February 08, 2011 08:00 ET

ADDvantage Technologies Announces Results for Fiscal 2011 First Quarter

First Quarter 2011 Total Revenue of $9.2 Million and Net Income of $0.07 per Diluted Share

BROKEN ARROW, OK--(Marketwire - February 8, 2011) - ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced its results for the three month period ended December 31, 2010.

Revenue for the three month period ended December 31, 2010 was $9.2 million compared to $10.2 million in the same period a year ago. Sales of new equipment were $6.5 million for the three months ended December 30, 2010 as compared to $6.6 million for the three months ended December 31, 2009. Net refurbished equipment sales were $1.4 million for the three months ended December 31, 2010 as compared to $2.3 million for the same period last year. The decrease in refurbished equipment sales was primarily due to a decrease in sales of digital converter boxes of $0.6 million. Service revenue was $1.3 million for the three months ended December 31, 2010 as compared to $1.4 million for the same period last year. This decline was primarily attributable to the closure of the Tulsat-West facility in the fiscal first quarter of 2011.

Net income attributable to common shareholders in the first quarter of fiscal 2011 was $0.7 million, or $0.07 per diluted share, as compared to $0.9 million, or $0.8 per diluted share, in the same period last year.

Ken Chymiak, President and CEO, commented, "We continue to report strong gross margins and positive net income, and further strengthened our balance sheet with an increase in cash and cash equivalents. Our sales remained relatively the same compared to last year except for the sale of refurbished digital converter boxes. The decrease in sales for the digital converter boxes was due to lower demand for this product. The overall market demand for cable television equipment continues to be flat as a result of the difficult economic environment, traditional United States cable companies are still under budgetary pressures as new housing starts and consumer spending is still down."

"Also, as previously announced on December 27, 2010, our subsidiary, Tulsat, entered into a new system integrator/reseller agreement with Cisco, which will enable it to sell both IT and Service Provider Video Technology Group ("SPVTG") related products in the United States. This agreement replaces Tulsat's prior distributor agreement with Cisco, which expired December 20, 2010. Under the terms of the new agreement, Tulsat will purchase the majority of its new Cisco product inventory through a primary stocking distributor as opposed to purchasing directly from Cisco as it did under the prior agreement. This is expected to result in slightly higher product costs, but it will lower the Company's inventory, storage, shipping and handling costs," concluded Mr. Chymiak.

Earnings Conference Call

As previously announced, the Company's earnings conference call is scheduled for 12:00 p.m. Eastern Time on Tuesday, February 8, 2011. The conference call will be available via webcast and can be accessed through the Investor Relations section of ADDvantage's website, www.addvantagetech.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) 852-6579 or (719) 325-4933 for international participants. All dial-in participants must use the following code to access the call: 1034872. 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 February 22, 2011 at (877) 870-5176 (domestic) or (858) 384-5517 (international). Participants must use the following code to access the replay of the call: 1034872. 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 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 Broadband Remarketing International. For more information, please visit the corporate web site at www.addvantagetech.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 TECHNOLOGIES GROUP, INC.
    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                         (UNAUDITED)

                                                      Three Months Ended
                                                         December 31,
                                                       2010        2009
                                                    ----------- -----------
Sales:
  Net new sales income                              $ 6,525,013 $ 6,569,913
  Net refurbished sales income                        1,401,501   2,268,803
  Net service income                                  1,302,932   1,380,505
                                                    ----------- -----------
Total net sales                                       9,229,446  10,219,221
Cost of sales                                         6,349,881   6,888,881
                                                    ----------- -----------
Gross profit                                          2,879,565   3,330,340
Operating, selling, general and administrative
 expenses                                             1,498,506   1,730,767
                                                    ----------- -----------
Income from operations                                1,381,059   1,599,573
Interest expense                                        185,424     211,934
                                                    ----------- -----------
Income before provision for income taxes              1,195,635   1,387,639
Provision for income taxes                              455,000     528,000
                                                    ----------- -----------
Net income attributable to common shareholders          740,635     859,639

Other comprehensive income:
  Unrealized gain on interest rate swap, net of
   taxes                                                147,169      91,980
                                                    ----------- -----------

Comprehensive income                                $   887,804 $   951,619
                                                    =========== ===========

Earnings per share:
  Basic                                             $      0.07 $      0.08
  Diluted                                           $      0.07 $      0.08
Shares used in per share calculation:
  Basic                                              10,143,970  10,116,820
  Diluted                                            10,154,523  10,120,085




              ADDVANTAGE TECHNOLOGIES GROUP, INC.
                  CONSOLIDATED BALANCE SHEETS

                                              December 31,   September 30,
                                                  2010           2010
                                               (unaudited)     (audited)
                                              -------------  -------------
Assets
Current assets:
  Cash and cash equivalents                   $  10,398,858  $   8,739,151
  Accounts receivable, net of allowance of
   $300,000                                       2,758,523      4,905,733
  Income tax refund receivable                            -        203,405
  Inventories, net of allowance for excess
   and obsolete inventory of $2,643,000
   and $2,545,000, respectively                  28,588,730     27,410,722
  Prepaid expenses                                   54,334         92,567
  Deferred income taxes                           1,440,000      1,423,000
                                              -------------  -------------
Total current assets                             43,240,445     42,774,578

Property and equipment, at cost:
  Land and buildings                              7,208,679      7,208,679
  Machinery and equipment                         3,123,851      3,203,701
  Leasehold improvements                            205,797        205,797
                                              -------------  -------------
                                                 10,538,327     10,618,177
Less accumulated depreciation and
 amortization                                    (3,436,425)    (3,393,921)
                                              -------------  -------------
Net property and equipment                        7,101,902      7,224,256

Other assets:
  Deferred income taxes                             578,000        678,000
  Goodwill                                        1,560,183      1,560,183
  Other assets                                       11,236         23,236
                                              -------------  -------------
Total other assets                                2,149,419      2,261,419
                                              -------------  -------------

Total assets                                  $  52,491,766  $  52,260,253
                                              =============  =============

Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                            $   3,289,984  $   2,751,498
  Accrued expenses                                  833,593      1,340,414
  Notes payable - current portion                 1,814,008      1,814,008
                                              -------------  -------------
Total current liabilities                         5,937,585      5,905,920

Notes payable                                    11,604,626     12,058,128
Other liabilities                                 1,015,514      1,252,683

Shareholders' equity:
  Common stock, $.01 par value; 30,000,000
   shares authorized; 10,367,934 shares
   issued and 10,143,970 shares outstanding         103,679        103,679
  Paid in capital                                (6,068,271)    (6,070,986)
  Retained earnings                              40,934,426     40,193,791
  Accumulated other comprehensive income
   (loss):
    Unrealized loss on interest rate swap,
     net of tax                                    (629,514)      (776,683)
                                              -------------  -------------
                                                 34,340,320     33,449,801

  Less: Treasury stock, 223,964 shares, at
   cost                                            (406,279)      (406,279)
                                              -------------  -------------
Total shareholders' equity                       33,934,041     33,043,522
                                              -------------  -------------

Total liabilities and shareholders' equity    $  52,491,766  $  52,260,253
                                              =============  =============

Contact Information

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

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

    KCSA Strategic Communications
    Garth Russell
    (212) 896-1250
    grussell@kcsa.com