SOURCE: Wayside Technology Group

Wayside Technology Group

July 26, 2012 17:00 ET

Wayside Technology Group, Inc. Reports 2012 Second Quarter Results and Declares Quarterly Dividend

Revenue: $69.2 Million, Up 14% Year-Over-Year; Income From Operations $2.0 Million, Up 4% Year-Over-Year; $.16 Quarterly Dividend Declared

SHREWSBURY, NJ--(Marketwire - Jul 26, 2012) - Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the second quarter ended June 30, 2012. The results will be discussed in a conference call to be held on Friday, July 27, 2012 at 10:00 AM Eastern time. The dial-in telephone number is (866) 961-5936 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 $12.8 million, representing 42% of equity as of June 30, 2012. Working capital amounted to $20.3 million, representing 66% of equity as of June 30, 2012.

Net sales for the second quarter of 2012 increased 14% to $69.2 million compared to $60.7 million for the same period in 2011. Total sales for the second quarter of 2012 for our TechXtend segment were $15.6 million compared to $11.7 million in the second quarter of 2011, representing a 33% increase. Total sales for the second quarter of 2012 for our Lifeboat segment were $53.5 million compared to $49 million in the second quarter of 2011, representing a 9% increase.

"We delivered solid results in the second quarter of 2012. Our TechXtend division performed especially well," said Simon F. Nynens, Chairman and Chief Executive Officer. "We continued to increase our market share and grow our service offerings."

The 14% increase in net sales in the second quarter of 2012 compared to 2011 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 ended June 30, 2012 was $5.6 million compared to $5.6 million for the second quarter of 2011. Total gross profit for our TechXtend segment was $1.7 million compared to $1.3 million in the second quarter of 2011, representing a 34% increase. The increase in gross profit in the TechXtend segment was mainly a result of the increased sales volume. Total gross profit for our Lifeboat segment was $3.8 million compared to $4.3 million in the second quarter of 2011, representing an 11% decrease. The decrease in gross profit for the Lifeboat segment was mainly due to increased competitive pricing pressure within this segment and lower vendor rebate attainments. Vendor rebates and discounts for the quarter ended June 30, 2012 amounted to $0.4 million compared to $0.8 million for the second quarter of 2011. Vendor rebates are dependent on reaching certain targets set by our vendors. Vendors have been periodically substantially increasing their target revenues for rebate eligibility. Therefore, despite our increasing revenue, vendor rebates have declined.

Total gross profit, as a percentage of net sales, for the second quarter of 2012 was 8.1%, compared to 9.2% in the second quarter of 2011.

The attainment of gross profit dollars and the decrease in gross profit margins as a percentage of net sales were primarily caused by the increased competitive pricing pressure in both segments and by winning several large bids based on aggressive pricing, which we plan to continue.

Total selling, general, and administrative ("SG&A") expenses for the second quarter of 2012 were $3.5 million compared to $3.6 million for the second quarter of 2011, which was mainly the result of lower stock compensation and bad debt expense compared to 2011. As a percentage of net sales, SG&A expenses for the second quarter of 2012 were 5.1% compared to 6.0% for the second quarter of 2011.

On July 24, 2012, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable August 17, 2012 to shareholders of record on August 7, 2012.

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, Datawatch, Dell, Doyenz, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, Oracle, Quest Software, SolarWinds, Sophos/Astaro, StorageCraft Technology, TechSmith, Veeam, Vision Solutions, 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.

   
   
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands, except share and per share amounts)  
           
  June 30, 2012     December 31, 2011  
  (unaudited)        
           
ASSETS  
           
Current assets              
  Cash and cash equivalents $ 7,237     $ 9,202  
  Marketable securities   5,572       5,375  
  Accounts receivable, net   50,369       47,066  
  Inventory - finished goods   1,307       1,240  
  Prepaid expenses and other current assets   1,256       1,997  
  Deferred income taxes   347       329  
Total current assets   66,088       65,209  
               
Equipment and leasehold improvements, net   370       458  
Accounts receivable long-term   9,551       8,889  
Other assets   74       54  
Deferred income taxes   250       251  
               
Total assets $ 76,333     $ 74,861  
               
LIABILITIES AND STOCKHOLDERS' EQUITY  
               
Current liabilities              
  Accounts payable and accrued expenses $ 45,750     $ 45,796  
  Current portion- capital lease obligation   83       76  
Total current liabilities   45,833       45,872  
               
Long term portion- capital lease obligation   14       55  
Total liabilities   45,847       45,927  
               
Commitments and contingencies              
               
Stockholders' equity              
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,711,867 and 4,679,878 shares outstanding, respectively  
53
     
53
 
  Additional paid-in capital   27,453       26,725  
  Treasury stock, at cost, 572,633 and 604,622 shares, respectively   (5,012 )     (4,991 )
  Retained earnings   7,665       6,818  
  Accumulated other comprehensive income   327       329  
Total stockholders' equity   30,486       28,934  
Total liabilities and stockholders' equity $ 76,333     $ 74,861  
               
               

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
                 
    Six months ended   Three months ended
    June 30,   June 30,
    2012   2011   2012   2011
    (Unaudited )   (Unaudited )
Revenues                        
  Lifeboat segment   $ 102,850   $ 88,502   $ 53,548   $ 48,951
  TechXtend segment (formerly Programmer's Paradise segment)     33,226     23,708     15,621     11,710
  Total Revenue     136,076     112,210     69,169     60,661
                         
Cost of sales                        
  Lifeboat segment     95,221     80,790     49,704     44,653
  TechXtend segment (formerly Programmer's Paradise segment)     29,698     20,994     13,875     10,407
  Total Cost of sales     124,919     101,784     63,579     55,060
                         
Gross Profit     11,157     10,426     5,590     5,601
                         
Operating expenses                        
  Selling costs     3,919     3,728     1,947     1,892
  Stock based compensation     463     589     231     300
  Other general and administrative expenses     3,156     2,853     1,373     1,448
Total Selling, general and administrative expenses     7,538     7,170     3,551     3,640
                         
Income from operations     3,619     3,256     2,039     1,961
                         
Interest income, net     254     172     130     86
Realized foreign exchange gain     1     1     -     1
Income before income tax provision     3,874     3,429     2,169     2,048
Provision for income taxes     1,541     1,358     865     820
                         
Net income   $ 2,333   $ 2,071   $ 1,304   $ 1,228
                         
Net income per common share - Basic   $ 0.52   $ 0.47   $ 0.29   $ 0.28
Net income per common share - Diluted   $ 0.50   $ 0.45   $ 0.28   $ 0.26
                         
Weighted average common shares outstanding - Basic     4,449     4,414     4,471     4,414
Weighted average common shares outstanding - Diluted     4,632     4,647     4,656     4,645