SOURCE: Wayside Technology Group

Wayside Technology Group

April 28, 2011 17:00 ET

Wayside Technology Group, Inc. Reports 2011 First Quarter Results and Declares Quarterly Dividend

1st Quarter Revenue: $51.5 Million, up 28% Year-Over-Year; Income From Operations $1.3 Million, up 38% Year-Over-Year; $.16 Quarterly Dividend Declared

SHREWSBURY, NJ--(Marketwire - Apr 28, 2011) - Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the first quarter ended March 31, 2011. The results will be discussed in a conference call to be held on Friday, April 29, 2011 at 10:00 AM Eastern time. The dial-in telephone number is (866) 804-3546 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 also be available on the company's website at www.waysidetechnology.com.

Cash and marketable securities amounted to $15.4 million, representing 58% of equity as of March 31, 2011.

Net sales for the first quarter of 2011 increased 28% or $11.1 million to $51.5 million compared to $40.4 million for the same period in 2010. Total sales for the first quarter of 2011 for our Lifeboat segment were $39.5 million compared to $29.1 million in the first quarter of 2010, representing an increase of $10.4 million or 36%. Total sales for the first quarter of 2011 for our Programmer's Paradise segment were $12.0 million compared to $11.2 million in the first quarter of 2010, representing a 7% increase.

"The first quarter of 2011 was a great quarter for us," said Simon F. Nynens, Chairman and Chief Executive Officer. "Our continued high growth rate shows that software publishers and our customers are exceedingly satisfied with our service model, as we continue to expand our offerings. We announced on April 6, 2011 that Mike Faith joined our board of directors. We all look forward to learning from Mike's insights and experience in service excellence and marketing."

Sales from our Lifeboat segment showed strong growth. The 36% increase in net sales in the first quarter of 2011 compared to 2010 was mainly a result of our continued focus on the expanding virtual infrastructure-centric business, the addition of several key product lines, and the strengthening of our account penetration.

Gross Profit for the quarter ending March 31, 2011 was $4.8 million compared to $4.0 million in the first quarter of 2010, a 22% increase. Total gross profit for our Lifeboat segment was $3.4 million compared to $2.7 million in the first quarter of 2010, representing a 29% increase. This increase in gross profit was due to aggressive sales volume growth within our Lifeboat segment. Total gross profit for our Programmer's Paradise segment was $1.4 million compared to $1.3 million in the first quarter of 2010, representing a 7% increase. This increase was primarily due to the higher sales volume. Vendor rebates and discounts for the quarter ended March 31, 2011 amounted to $0.5 million compared to $0.3 million for the first quarter of 2010, mainly a result of our aggressive sales growth.

Total gross profit, as a percentage of net sales, for the first quarter of 2011 was 9.4%, compared to 9.8% in the first quarter of 2010.

The increase in gross profit dollars and the decrease in gross profit margin as a percentage of net sales was primarily caused by the aggressive sales growth within our Lifeboat segment, competitive pricing pressure in both segments, and also in part by our having won several large bids based on aggressive pricing, which we plan to continue to do.

Total selling, general, and administrative ("SG&A") expenses for the first quarter of 2011 were $3.5 million compared to $3.0 million in the first quarter of 2010, which was mainly the result of an increase in employee related expenses (salaries, commissions, bonus and benefits) of $0.4 million and an increase in sales and marketing expenses of $0.1 million. As a percentage of net sales, SG&A expenses for the first quarter of 2011 were 6.9% compared to 7.5% in the first quarter of 2010.

On April 26, 2011, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable May 19, 2011 to shareholders of record on May 9, 2011.

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 Acronis, CA Technologies, DataCore, Flexera Software (publishers of InstallShield), GFI, Hewlett Packard, Infragistics, Intel Software, Microsoft, Mindjet, Quest Software, SolarWinds, StorageCraft Technology, TechSmith, Veeam, and VMware.

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 could cause actual results to differ materially from those indicated by such forward-looking statements, and include, without limitation, the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, product mix, market conditions, contribution of key vendor relationships and support programs, as well as factors that affect the software industry in general and other factors. 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. Except as otherwise required by law, the Company undertakes no obligation to update or revise these forward-looking statements.

-Tables Follow-



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


                                                  March 31,   December 31,
                                                    2011          2010
                                                ------------  ------------
                                                (unaudited)
                  ASSETS
Current assets
 Cash and cash equivalents                      $     13,089  $     10,955
 Marketable securities                                 2,278         4,528
 Accounts receivable, net                             34,699        42,486
 Inventory - finished goods                            1,294         1,164
 Prepaid expenses and other current assets             1,290         1,250
 Deferred income taxes                                   494           516
                                                ------------  ------------
Total current assets                                  53,144        60,899

Equipment and leasehold improvements, net                586           545
Accounts receivable long-term                          6,513         6,866
Other assets                                              36            37
Deferred income taxes                                    336           336
                                                ------------  ------------
Total assets                                    $     60,615  $     68,683
                                                ============  ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
 Accounts payable and accrued expenses          $     33,729  $     41,791
 Current portion- capital lease obligation                75            75
                                                ------------  ------------
Total current liabilities                             33,804        41,866

Long term portion- capital lease obligation              117           138
                                                ------------  ------------
Total liabilities                                     33,921        42,004
                                                ------------  ------------

Commitments and contingencies

Stockholders' equity
 Common stock, $.01 par value; 10,000,000
  shares authorized, 5,284,500 shares
  issued, and 4,754,952 and 4,770,241 shares
  outstanding, respectively                               53            53
 Additional paid-in capital                           25,771        25,473
 Treasury stock, at cost, 529,548 and 514,259
  shares, respectively                                (4,067)       (3,570)
 Retained earnings                                     4,357         4,267
 Accumulated other comprehensive income                  580           456
                                                ------------  ------------
Total stockholders' equity                            26,694        26,679
                                                ------------  ------------
Total liabilities and stockholders' equity      $     60,615  $     68,683
                                                ============  ============




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


                                                    Three months ended
                                                        March 31,
                                                    2011          2010
                                                ------------- -------------
                                                        (Unaudited)
                                                ---------------------------
Revenues
  Lifeboat segment                                     39,551        29,117
  Programmer's Paradise segment                        11,998        11,241
                                                ------------- -------------
  Total Revenue                                 $      51,549 $      40,358

Cost of sales
  Lifeboat segment                                     36,137        26,472
  Programmer's Paradise segment                        10,587         9,918
                                                ------------- -------------
  Total Cost of sales                                  46,724        36,390
                                                ------------- -------------

Gross Profit                                            4,825         3,968

Operating expenses
  Selling costs                                         1,837         1,491
  Stock based compensation                                289           301
  Other general and administrative expenses             1,404         1,238
                                                ------------- -------------
Total Selling, general and administrative
 expenses                                               3,530         3,030
                                                ------------- -------------

Income from operations                                  1,295           938

Interest income, net                                       86           108
Realized foreign exchange gain                              -             1
                                                ------------- -------------
Income before income tax provision                      1,381         1,047
Provision for income taxes                                538           424
                                                ------------- -------------

Net income                                      $         843 $         623
                                                ============= =============

Net income per common share - Basic             $        0.19 $        0.14
                                                ============= =============
Net income per common share - Diluted           $        0.18 $        0.14
                                                ============= =============

Weighted average common shares outstanding -
 Basic                                                  4,414         4,371
                                                ============= =============
Weighted average common shares outstanding -
 Diluted                                                4,651         4,425
                                                ============= =============