SOURCE: Wayside Technology Group

Wayside Technology Group

April 24, 2014 17:00 ET

Wayside Technology Group, Inc. Reports 2014 First Quarter Results and Declares Quarterly Dividend

SHREWSBURY, NJ--(Marketwired - Apr 24, 2014) -  Wayside Technology Group, Inc. (NASDAQ: WSTG

     
    Q1 2014:
Revenue:   $ 71.7 million
Income from operations:   $ 1.5 million
Net income:   $ 1.1 million
Diluted earnings per share:   $ 0.23 per share
       
Dividend declared - $0.17 per share
       

Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the first quarter ended March 31, 2014. The results will be discussed in a conference call to be held on Friday, April 25, 2014 at 10:00 a.m. EST. The dial-in telephone number is (866) 793-1341 and the pass code is "WSTG." This conference call will be webcast by NASDAQ OMX and can be accessed at Wayside Technology's Web site at www.waysidetechnology.com/earnings-call.

"I am pleased to report solid financial results for Q1 2014. Overall, revenue increased 9% and income from operations increased 7% over the same period last year. Key metrics -- revenue, income from operations and net income -- all showed improvement compared to Q1 2013," said Simon F. Nynens, Chairman and Chief Executive Officer.

"In addition, we are pleased to announce that Bill Botti has joined the Company as Executive Vice President, effective April 21, 2014. Mr. Botti, a recognized industry leader, brings a wealth of sales and channel experience and many valuable relationships that we hope to leverage to help take the growth and development of Wayside to the next level," said Mr. Nynens.

Cash and long term receivables amounted to $21.3 million, representing 59% of equity as of March 31, 2014. Working capital amounted to $25.7 million, representing 71% of equity as of March 31, 2014.

Net sales for the first quarter ended March 31, 2014 increased 9% or $5.8 million to $71.7 million compared to $66.0 million for the same period in 2013. Total sales for the first quarter of 2014 for our Lifeboat Distribution segment were $59.3 million compared to $53.9 million in the first quarter of 2013, representing an increase of $5.4 million or 10%. Total sales for the first quarter of 2014 for our TechXtend segment were $12.5 million compared to $12.1 million in the first quarter of 2013, representing an increase of $0.4 million or 3%.

The 10% increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration, our continued focus on the expanding virtual infrastructure-centric business and the addition of several key product lines. The 3% increase in net sales in the TechXtend segment was primarily due to an increase in extended payment terms sales transactions as compared to the first quarter ended March 31, 2013.

Gross Profit for the first quarter ended March 31, 2014 was $5.5 million, a 4% increase as compared to $5.3 million for the first quarter of 2013. Gross profit for our Lifeboat segment in the first quarter of 2014 was $4.1 million compared to $3.8 million for the first quarter of 2013. Gross profit for our TechXtend segment in the first quarter of 2014 was $1.4 million compared to $1.5 million for the first quarter of 2013, representing an 8% decrease. Although TechXtend's net sales increased, its gross profit decreased primarily due to a decrease in rebates earned in the TechXtend segment in the current quarter compared to the first quarter of 2013.

Gross profit margin (gross profit as a percentage of net sales) for the first quarter ended March 31, 2014 was 7.7% compared to 8.1% for the first quarter of 2013. Gross profit margin for our Lifeboat Distribution segment for the first quarter of 2014 was 6.9% compared to 7.0% for the first quarter of 2013. This slight decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by competitive pricing pressure. Gross profit margin for our TechXtend segment for the first quarter of 2014 was 11.4% compared to 12.7% for the first quarter of 2013. The decrease in gross profit margin for the TechXtend segment was primarily caused by our product mix and a decrease in rebates earned during the current year.

The Company monitors gross profits and gross profit margins carefully. Price competition in our market persisted in 2014. We anticipate that margins, as well as discounts and rebates, will continue to be under pressure in the near future.

Total selling, general, and administrative ("SG&A") expenses for the first quarter of 2014 were $4.0 million compared to $3.9 million for the first quarter of 2013. 

For the three months ended March 31, 2014, the Company recorded a provision for income taxes of $545,000 or 34.0% of income, compared to $511,000 or 33.4% of income for the same period in 2013.

Net income and diluted earnings per share for the first quarter of 2014 were $1.1 million and $0.23, respectively, compared to $1.0 million and $0.22, respectively for the first quarter of 2013. 

On April 23, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable May 16, 2014 to shareholders of record on May 6, 2014.

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 including Acronis, Bluebeam Software, CA Technologies, Datawatch, Dell/Dell Software, Flexera Software, Hewlett Packard, Infragistics, Intel Software, JetBrains, Lenovo, Microsoft, Mindjet, Samsung, SAP/Sybase, SmartBear, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Unitrends, Veeam Software 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  
(Amounts in thousands, except share and per share amounts)  
             
    March 31, 2014     December 31, 2013  
    (unaudited)        
                 
ASSETS  
                 
Current assets                
  Cash and cash equivalents   $ 11,718     $ 19,609  
  Accounts receivable, net     57,116       60,796  
  Inventory, net     1,233       1,315  
  Prepaid expenses and other current assets     1,206       2,117  
  Deferred income taxes     230       218  
Total current assets     71,503       84,055  
                 
Equipment and leasehold improvements, net     334       324  
Accounts receivable long-term     9,555       10,006  
Other assets     160       159  
Deferred income taxes     216       216  
                 
Total assets   $ 81,768     $ 94,760  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY  
                 
Current liabilities                
  Accounts payable and accrued expenses   $ 45,808     $ 60,039  
Total current liabilities     45,808       60,039  
                 
                 
Commitments and contingencies                
                 
Stockholders' equity                
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,766,774 and 4,653,293 shares outstanding, respectively     53       53  
  Additional paid-in capital     29,507       28,791  
  Treasury stock, at cost, 517,726 and 631,207 shares, respectively     (6,484 )     (7,017 )
  Retained earnings     12,967       12,695  
  Accumulated other comprehensive (loss) income     (83 )     199  
Total stockholders' equity     35,960       34,721  
Total liabilities and stockholders' equity   $ 81,768     $ 94,760  
                 
                 
                 
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
( Amounts in thousands, except per share data)
           
    Three months ended
    March 31,
    2014     2013
    (Unaudited)
Revenues              
  Lifeboat segment     59,259       53,869
  TechXtend segment     12,471       12,111
  Total Revenue   $ 71,730     $ 65,980
               
Cost of sales              
  Lifeboat segment     55,143       50,097
  TechXtend segment     11,049       10,570
  Total Cost of sales     66,192       60,667
               
Gross Profit     5,538       5,313
               
Operating expenses              
  Selling costs     2,025       1,994
  Share- based compensation     327       271
  Other general and administrative expenses     1,693       1,652
Total Selling, general and administrative expenses     4,045       3,917
               
Income from operations     1,493       1,396
               
Interest, net     123       130
Foreign currency transaction (loss) gain     (12 )     5
Income before provision for income taxes     1,604       1,531
Provision for income taxes     545       511
               
Net income   $ 1,059     $ 1,020
               
Income per common share - Basic   $ 0.23     $ 0.23
Income per common share - Diluted   $ 0.23     $ 0.22
               
Weighted average common shares outstanding - Basic     4,538       4,477
Weighted average common shares outstanding - Diluted     4,615       4,602