SOURCE: Wayside Technology Group

Wayside Technology Group

October 29, 2015 17:00 ET

Wayside Technology Group, Inc. Reports 2015 Third Quarter Results and Declares Quarterly Dividend

SHREWSBURY, NJ--(Marketwired - Oct 29, 2015) - Wayside Technology Group, Inc. (NASDAQ: WSTG)

   
  Q3 2015:
Revenue: $97.7 million
Income from operations: $2.3 million
Diluted earnings per share: $0.33 per share
   
Dividend declared - $0.17 per share
 

Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the third quarter ended September 30, 2015. The results will be discussed in a conference call to be held on Friday, October 30, 2015 at 10:00 a.m. EDT. The dial-in telephone number is (866) 847-7864 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.

Cash and long term receivables amounted to $25.8 million, representing 68% of equity as of September 30, 2015. Working capital amounted to $31.3 million, representing 82% of equity as of September 30, 2015.

"I am pleased to report solid financial results for Q3 2015. Overall, revenue increased 8%, gross profit increased 11% and income from operations increased 20% over the same period last year," said Simon F. Nynens, Chairman and Chief Executive Officer. 

Net sales for the third quarter ended September 30, 2015 increased 8% or $7.1 million to $97.7 million compared to $90.5 million for the same period in 2014. Total sales for the third quarter of 2015 for our Lifeboat Distribution segment were $86.1 million compared to $77.4 million in the third quarter of 2014, representing an increase of $8.7 million or 11%. Total sales for the third quarter of 2015 for our TechXtend segment were $11.6 million compared to $13.1 million in the third quarter of 2014, representing a decrease of $1.5 million or 12%.

The 11% increase in net sales for the Lifeboat Distribution segment was mainly a result of the addition of several key product lines and our ongoing strategy of strengthening of our account penetration. The 12% decrease in net sales in the TechXtend segment was primarily due to a decrease in extended payment terms sales transactions and other large sales transactions as compared to the same period in 2014.

Gross profit for the third quarter ended September 30, 2015 was $6.9 million, an 11% increase as compared to $6.2 million for the third quarter of 2014. Gross profit for our Lifeboat Distribution segment in the third quarter of 2015 was $5.5 million compared to $4.7 million for the third quarter of 2014, representing a 16% increase. Gross profit for our TechXtend segment in the third quarter of 2015 was $1.4 million representing a 3% decrease from the prior year.

Gross profit margin (gross profit as a percentage of net sales) for the third quarter ended September 30, 2015 was 7.0% compared to 6.8% for the third quarter of 2014. Gross profit margin for the nine months ended September 30, 2015 was 7.0% compared to 7.2% in the same period in 2014. Gross profit margin for our Lifeboat Distribution segment for the third quarter of 2015 was 6.4% compared to 6.1% for the third quarter of 2014. The increase in gross profit margin for the Lifeboat Distribution segment was primarily caused by product mix and increased marketing funds. Gross profit for our TechXtend segment for the third quarter of 2015 was 12.0% compared to 10.9% for the third quarter of 2014. The increase in gross profit margin for the TechXtend segment was primarily caused by the decrease in larger extended payment term sales transactions and other large sale transactions which typically carry lower margins.

Total selling, general, and administrative ("SG&A") expenses for the third quarter of 2015 were $4.6 million compared to $4.3 million for the third quarter of 2014, representing an increase of $0.3 million or 8%. This increase is primarily the result of an increase in sales related employee and employee related expenses. A large part of this increase is due to us hiring and creating a field sales team and a professional services team. As a percentage of net sales, SG&A expenses for the third quarter of 2015 and 2014 were 4.7%.

For the three months ended September 30, 2015, the Company recorded a provision for income taxes of $0.8 million or 34.1% of income, compared to $0.6 or 31.6% of income for the same period in 2014.

Net income and diluted earnings per share for the third quarter of 2015 were $1.6 million and $0.33, respectively, compared to $1.4 million and $0.29, respectively, for the third quarter of 2014. 

On October 27, 2015, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable November 17, 2015 to shareholders of record on November 10, 2015.

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 Bluebeam Software, CA Technologies, Dell/Dell Software, ExaGrid Systems, Flexera Software, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, Samsung, SmartBear Software, SolarWinds, Sophos, StorageCraft Technology, Super Micro Computer, Inc., TechSmith, 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)  
             
    September 30, 2015     December 31, 2014  
    (unaudited)        
                 
ASSETS  
                 
Current assets                
  Cash and cash equivalents   $ 19,607     $ 23,124  
  Accounts receivable, net     56,916       60,782  
  Inventory, net     2,012       1,491  
  Prepaid expenses and other current assets     1,094       933  
  Deferred income taxes     179       245  
Total current assets     79,808       86,575  
                 
Equipment and leasehold improvements, net     390       412  
Accounts receivable long-term     6,139       7,660  
Other assets     94       152  
Deferred income taxes     182       182  
                 
Total assets   $ 86,613     $ 94,981  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY  
                 
Current liabilities                
  Accounts payable and accrued expenses   $ 48,537     $ 55,414  
Total current liabilities     48,537       55,414  
                 
                 
Commitments and contingencies                
                 
Stockholders' equity                
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,740,380 and 4,890,756 shares outstanding in 2015 and 2014, respectively    
53
     
53
 
  Additional paid-in capital     32,048       31,013  
  Treasury stock, at cost, 544,120 and 393,744 shares, respectively     (9,574 )     (6,166 )
  Retained earnings     16,997       15,225  
  Accumulated other comprehensive loss     (1,448 )     (558 )
Total stockholders' equity     38,076       39,567  
Total liabilities and stockholders' equity   $ 86,613     $ 94,981  
                 
   
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS  
(Amounts in thousands, except per share data)  
                         
    Nine months ended     Three months ended  
    September 30,     September 30,  
    2015     2014     2015     2014  
    (Unaudited)     (Unaudited)  
Revenues                                
  Lifeboat segment   $ 250,287     $ 206,655     $ 86,082     $ 77,416  
  TechXtend segment     32,027       39,980       11,571       13,089  
  Total Revenue     282,314       246,635       97,653       90,505  
                                 
Cost of sales                                
  Lifeboat segment     234,450       193,180       80,589       72,670  
  TechXtend segment     28,202       35,602       10,184       11,659  
  Total Cost of sales     262,652       228,782       90,773       84,329  
                                 
Gross Profit     19,662       17,853       6,880       6,176  
                                 
Operating expenses                                
  Selling costs     7,484       6,453       2,572       2,379  
  Share- based compensation     797       853       263       278  
  Other general and administrative expenses     5,252       4,987       1,783       1,634  
Total Selling, general and administrative expenses     13,533       12,293       4,618       4,291  
                                 
Income from operations     6,129       5,560       2,262       1,885  
                                 
Interest income, net     297       375       100       121  
Foreign currency transaction (loss) gain     (9 )     (8 )     (4 )     (4 )
Income before provision for income taxes     6,417       5,927       2,358       2,002  
Provision for income taxes     2,199       2,016       805       632  
                                 
Net income   $ 4,218     $ 3,911     $ 1,553     $ 1,370  
                                 
Income per common share - Basic   $ 0.91     $ 0.84     $ 0.34     $ 0.29  
Income per common share - Diluted   $ 0.90     $ 0.83     $ 0.33     $ 0.29  
                                 
Weighted average common shares outstanding - Basic     4,652       4,639       4,624       4,716  
Weighted average common shares outstanding - Diluted     4,673       4,685       4,643       4,736