SOURCE: Wayside Technology Group

Wayside Technology Group

July 28, 2016 17:10 ET

Wayside Technology Group, Inc. Reports 2016 Second Quarter Results and Declares Quarterly Dividend

SHREWSBURY, NJ--(Marketwired - Jul 28, 2016) - Wayside Technology Group, Inc. (NASDAQ: WSTG)

   
  Q2 2016:
Revenue: $105.3 million
Income from operations: $2.2 million
Net income: $1.5 million
Diluted earnings per share: $0.34 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, 2016. The results will be discussed in a conference call to be held on Friday, July 29, 2016 at 10:00 a.m. EDT. The dial-in telephone number is (866) 814-8482 and the pass code is "WSTG." This conference call will be webcast by NASDAQ OMX and can be accessed at Wayside Technology's website at www.waysidetechnology.com/earnings-call.

"I am pleased to report solid financial results for Q2 2016 with both of our segments performing well. Overall, revenue increased 14% to a record $105.3 million and income from operations increased 14% over the same period last year," said Simon F. Nynens, Chairman and Chief Executive Officer.

Net sales for the second quarter ended June 30, 2016 increased 14% or $13.3 million to a record $105.3 million compared to $92.0 million for the same period in 2015. Total sales for the second quarter of 2016 for our Lifeboat Distribution segment were $89.7 million compared to $81.3 million in the second quarter of 2015, representing an increase of $8.4 million or 10%. Total sales for the second quarter of 2016 for our TechXtend segment were $15.6 million compared to $10.7 million in the second quarter of 2015, representing an increase of $4.9 million or 46%.

The 10% 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. This was offset in part by lower sales to one of our key accounts. The 46% increase in net sales in the TechXtend segment was primarily due to an increase of $5.6 million in extended payment terms sales transactions as compared to the second quarter ended June 30, 2015.

Cash and long term receivables amounted to $30.5 million, representing 79% of equity as of June 30, 2016. Working capital amounted to $31.9 million, representing 83% of equity as of June 30, 2016.

Gross Profit for the second quarter ended June 30, 2016 was $7.0 million, a 9% increase compared to $6.4 million for the second quarter of 2015. Gross profit for our Lifeboat segment in the second quarter of 2016 was approximately $5.5 million compared to approximately $5.1 million for the second quarter of 2015, representing a 9% increase. Gross profit for our TechXtend segment in the second quarter of 2016 was $1.5 million compared to $1.3 million for the second quarter of 2015, representing a 10% increase.

Gross profit margin (gross profit as a percentage of net sales) for the second quarter ended June 30, 2016 was 6.7% compared to 7.0% for the second quarter of 2015. Gross profit margin for our Lifeboat Distribution segment for the second quarter of 2016 was 6.2% compared to 6.3% for the second quarter of 2015. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by a program change by one of our main vendors, causing gross margins to decline by 1.8% for that line. Gross profit margin for our TechXtend segment for the second quarter of 2016 was 9.3% compared to 12.3% for the second quarter of 2015. The decrease in gross profit margin for the TechXtend segment was primarily caused by the increase in extended payment sales transaction which carry lower margins.

Total selling, general, and administrative ("SG&A") expenses for the second quarter of 2016 were $4.8 million compared to $4.4 million for the second quarter of 2015, representing an increase of $0.4 million or 7%. This increase is primarily the result of an increase in stock compensation and amounts accrued for bonus expense in 2016 compared to 2015. As a percentage of net sales, SG&A expenses for the second quarter of 2016 were 4.5% compared to 4.8% for the second quarter of 2015.

For the three months ended June 30, 2016, the Company recorded a provision for income taxes of $775,000 or 33.7% of income, compared to $710,000 or 34.3% of income for the same period in 2015.

Net income and diluted earnings per share for the second quarter of 2016 were $1.5 million and $0.34, respectively, compared to $1.4 million and $0.29, respectively, for the second quarter of 2015. 

On July 27, 2016, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable August 18, 2016 to shareholders of record on August 8, 2016.

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, Micro Focus, 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)  
             
    June 30,
2016
    December 31,
2015
 
    (unaudited)        
             
ASSETS  
                 
Current assets                
  Cash and cash equivalents   $ 24,576     $ 23,823  
  Accounts receivable, net     61,763       58,965  
  Inventory, net     2,133       1,954  
  Prepaid expenses and other current assets     1,270       989  
  Deferred income taxes     243       260  
Total current assets     89,985       85,991  
                 
Equipment and leasehold improvements, net     466       362  
Accounts receivable long-term     5,908       7,386  
Other assets     132       82  
Deferred income taxes     244       261  
                 
Total assets   $ 96,735     $ 94,082  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY  
   
Current liabilities                
  Accounts payable and accrued expenses   $ 58,114     $ 55,423  
Total current liabilities     58,114       55,423  
                 
                 
Commitments and contingencies                
                 
Stockholders' equity                
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,748,553 and 4,700,812 shares outstanding, respectively     53       53  
  Additional paid-in capital     32,320       32,540  
  Treasury stock, at cost, 535,947 and 583,688 shares, respectively     (11,118 )     (10,296 )
  Retained earnings     18,747       17,813  
  Accumulated other comprehensive loss     (1,381 )     (1,451 )
Total stockholders' equity     38,621       38,659  
Total liabilities and stockholders' equity   $ 96,735     $ 94,082  
                 
   
   
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,  
    2016     2015     2016     2015  
    (Unaudited)     (Unaudited)  
Revenues                                
  Lifeboat segment   $ 175,999     $ 164,206     $ 89,659     $ 81,260  
  TechXtend segment     22,581       20,456       15,598       10,710  
  Total Revenue     198,580       184,662       105,257       91,970  
                                 
Cost of sales                                
  Lifeboat segment     165,300       153,862       84,112       76,150  
  TechXtend segment     20,328       18,018       14,145       9,395  
  Total Cost of sales     185,628       171,880       98,257       85,545  
                                 
Gross Profit     12,952       12,782       7,000       6,425  
                                 
Operating expenses                                
  Selling costs     4,658       4,913       2,336       2,542  
  Share- based compensation     839       534       440       267  
  Other general and administrative expenses     3,719       3,469       1,980       1,640  
Total Selling, general and administrative expenses     9,216       8,916       4,756       4,449  
                                 
Income from operations     3,736       3,866       2,244       1,976  
                                 
Interest income, net     125       197       61       99  
Foreign currency transaction (loss) gain     (3 )     (5 )     (3 )     (4 )
Income before provision for income taxes     3,858       4,058       2,302       2,071  
Provision for income taxes     1,303       1,394       775       710  
                                 
Net income   $ 2,555     $ 2,664     $ 1,527     $ 1,361  
                                 
Income per common share - Basic   $ 0.56     $ 0.57     $ 0.34     $ 0.29  
Income per common share - Diluted   $ 0.56     $ 0.57     $ 0.34     $ 0.29  
                                 
Weighted average common shares outstanding - Basic     4,545       4,665       4,524       4,640  
Weighted average common shares outstanding - Diluted     4,557       4,689       4,535       4,663