SOURCE: Wayside Technology Group

Wayside Technology Group

July 24, 2014 17:00 ET

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

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

   
  Q2 2014:
Revenue: $84.4 million
Income from operations: $2.2 million
Net income: $1.5 million
Diluted earnings per share: $0.31 per share
   
Dividend declared - $0.17 per share 

Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the second quarter ended June 30, 2014. The results will be discussed in a conference call to be held on Friday, July 25, 2014 at 10:00 a.m. EDT. The dial-in telephone number is (866) 846-7864 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 Q2 2014. Overall, revenue increased 14% and gross profit increased 3% over the same period last year," said Simon F. Nynens, Chairman and Chief Executive Officer.

Cash and long term receivables amounted to $25.1 million, representing 66% of equity as of June 30, 2014. Working capital amounted to $27.2 million, representing 71% of equity as of June 30, 2014.

Net sales for the second quarter ended June 30, 2014 increased 14% or $10.3 million to $84.4 million compared to $74.1 million for the same period in 2013. Total sales for the second quarter of 2014 for our Lifeboat Distribution segment were $70.0 million compared to $61.2 million in the second quarter of 2013, representing an increase of $8.8 million or 14%. Total sales for the second quarter of 2014 for our TechXtend segment were $14.4 million compared to $12.9 million in the second quarter of 2013, representing an increase of $1.5 million or 12%.

The 14% 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 12% increase in net sales in the TechXtend segment was primarily due an increase in extended payment terms sales transactions as compared to the second quarter ended June 30, 2013.

Gross Profit for the second quarter ended June 30, 2014 was $6.1 million, a 3% increase as compared to $6.0 million for the second quarter of 2013. Gross profit for our Lifeboat segment in the second quarter of 2014 was $4.6 million compared to $4.5 million for the second quarter of 2013, representing a 2% increase. Gross profit for our TechXtend segment of $1.5 million in the second quarter of 2014 was essentially flat as compared to the second quarter of 2013. 

Gross profit margin (gross profit as a percentage of net sales) for the second quarter ended June 30, 2014 was 7.3% compared to 8.1% for the second quarter of 2013. Gross profit margin for the six months ended June 30, 2014 was 7.5% compared to 8.1% in the same period in 2013. Gross profit margin for our Lifeboat segment for the second quarter of 2014 was 6.6% compared to 7.4% for the second quarter of 2013. The 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 second quarter of 2014 was 10.6% compared to 11.3% for the second quarter of 2013. The decrease in gross profit margin for the TechXtend segment was primarily caused by the increase in larger extended payment term sales transactions which typically carry lower margins.

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 second quarter of 2014 were $4.0 million compared to $3.8 million for the second quarter of 2013. 

For the three months ended June 30, 2014, the Company recorded a provision for income taxes of $839,000 or 36.1% of income, compared to $773,000 or 33.4% of income for the same period in 2013.

Net income and diluted earnings per share for the second quarter of 2014 were $1.5 million and $0.31, respectively, compared to $1.5 million and $0.34, respectively, for the second quarter of 2013. 

On July 22, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable August 15, 2014 to shareholders of record on August 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)  
             
    June 30, 2014     December 31, 2013  
    (unaudited)        
             
ASSETS  
                 
Current assets                
  Cash and cash equivalents   $ 14,716     $ 19,609  
  Accounts receivable, net     57,585       60,796  
  Inventory, net     1,221       1,315  
  Prepaid expenses and other current assets     974       2,117  
  Deferred income taxes     236       218  
Total current assets     74,732       84,055  
                 
Equipment and leasehold improvements, net     328       324  
Accounts receivable long-term     10,411       10,006  
Other assets     162       159  
Deferred income taxes     216       216  
                 
Total assets   $ 85,849     $ 94,760  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY  
                 
Current liabilities                
  Accounts payable and accrued expenses   $ 47,493     $ 60,039  
Total current liabilities     47,493       60,039  
                 
                 
Commitments and contingencies                
                 
Stockholders' equity                
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,873,507 and 4,653,293 shares outstanding, respectively                
  53       53  
  Additional paid-in capital     30,488       28,791  
  Treasury stock, at cost, 410,993 and 631,207 shares, respectively     (5,965 )     (7,017 )
  Retained earnings     13,645       12,695  
  Accumulated other comprehensive income     135       199  
Total stockholders' equity     38,356       34,721  
Total liabilities and stockholders' equity   $ 85,849     $ 94,760  
                 
         
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
( Amounts in thousands, except per share data)
 
    Six months ended   Three months ended
    June 30,   June 30,
    2014     2013   2014   2013
    (Unaudited )   (Unaudited )
Revenues                          
  Lifeboat segment   $ 129,238     $ 115,078   $ 69,979   $ 61,209
  TechXtend segment     26,891       24,997     14,420     12,886
  Total Revenue     156,129       140,075     84,399     74,095
                           
Cost of sales                          
  Lifeboat segment     120,509       106,794     65,367     56,698
  TechXtend segment     23,943       22,003     12,893     11,432
  Total Cost of sales     144,452       128,797     78,260     68,130
                           
Gross Profit     11,677       11,278     6,139     5,965
                           
Operating expenses                          
  Selling costs     4,074       4,004     2,049     2,010
  Share-based compensation     575       551     252     280
  Other general and administrative expenses     3,353       3,176     1,656     1,524
Total Selling, general and administrative expenses     8,002       7,731     3,957     3,814
                           
Income from operations     3,675       3,547     2,182     2,151
                           
Interest, net     255       276     132     146
Foreign currency transaction (loss) gain     (4 )     21     8     16
Income before provision for income taxes     3,926       3,844     2,322     2,313
Provision for income taxes     1,384       1,284     839     773
                           
Net income   $ 2,542     $ 2,560   $ 1,483   $ 1,540
                           
Income per common share - Basic   $ 0.55     $ 0.57   $ 0.32   $ 0.35
Income per common share - Diluted   $ 0.54     $ 0.56   $ 0.31   $ 0.34
                           
Weighted average common shares outstanding - Basic     4,601       4,464     4,664     4,451
Weighted average common shares outstanding - Diluted     4,665       4,578     4,719     4,557