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8-K - 8-K - Wayside Technology Group, Inc.a11-28628_18k.htm

Exhibit 99.1

 

GRAPHIC

Company Contact:

Kevin Scull

Wayside Technology Group, Inc.

Vice President and Chief Accounting Officer

(732) 389-0932

kevin.scull@waysidetechnology.com

 

WAYSIDE TECHNOLOGY GROUP, INC. REPORTS 2011 THIRD QUARTER RESULTS AND DECLARES QUARTERLY DIVIDEND

 

·                  Revenue: $63.7 million, up 20% year-over-year

 

·                  Income from operations $2.3 million, up 17% year-over-year

 

·                  $.16 quarterly dividend declared

 

SHREWSBURY, NJ, October 27, 2011 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2011. The results will be discussed in a conference call to be held on Friday, October 28, 2011 at 10:00 AM Eastern time. The dial-in telephone number is (866) 861-4873 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 $13.3 million, representing 48% of equity as of September 30, 2011.

 

Net sales for the third quarter of 2011 increased 20% to $63.7 million compared to $53.0 million for the same period in 2010. Total sales for the third quarter of 2011 for our TechXtend segment (formerly Programmer’s Paradise segment) were $14.6 million compared to $14.6 million in the third quarter of 2010. Total sales for the third quarter of 2011 for our Lifeboat segment were $49.1 million compared to $38.4 million in the third quarter of 2010, representing a 28% increase.

 

“We are very pleased to report good results during these challenging economic times,” said Simon F. Nynens, Chairman and Chief Executive Officer. “To report growth compared to the third quarter of 2010 that showed revenue growth of 50% versus the third quarter of 2009 shows the quality and passion of our team.”

 

Sales from our Lifeboat segment showed strong growth. The 28% increase in net sales in the third quarter of 2011 compared to 2010 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 September 30, 2011 was $5.8 million compared to $5.1 million for the third quarter of 2010, representing a 12% increase. Total gross profit for our TechXtend segment was $1.7 million compared to $1.7 million in the third quarter of 2010. Total gross profit for our Lifeboat segment was $4.1 million compared to $3.4 million in the third quarter of 2010, representing a 20% increase. This increase in gross profit was due to aggressive sales volume growth within our Lifeboat segment. Vendor rebates and discounts for the quarter ended September 30, 2011 amounted to $0.7

 



 

million compared to $0.6 million for the third quarter of 2010. Vendor rebates are dependent on reaching certain targets set by our vendors.

 

Total gross profit, as a percentage of net sales, for the third quarter of 2011 was 9.0%, compared to 9.7% in the third quarter of 2010.

 

The increase in gross profit dollars and the decrease in gross profit margin as a percentage of net sales was primarily caused by the aggressive sales growth within our Lifeboat segment, competitive pricing pressure in both segments, and also in part by our having won several large bids based on aggressive pricing, which we plan to continue.

 

Total selling, general, and administrative (“SG&A”) expenses for the third quarter of 2011 were $3.5 million compared to $3.2 million for the third quarter of 2010, which was mainly the result of a increase in employee and employee-related expenses (salaries, commissions, bonus accruals and benefits) of $0.2 million in 2011 compared to 2010. As a percentage of net sales, SG&A expenses for the third quarter of 2011 were 5.4% compared to 6.0% for the third quarter of 2010.

 

On October 25, 2011, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable November 17, 2011 to shareholders of record on November 7, 2011.

 

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, Astaro, CA Technologies, DataCore, Doyenz, Flexera Software, GFI, Hewlett Packard, Intel Software, Lenovo, Microsoft, Mindjet, Oracle, Quest Software, SolarWinds, StorageCraft Technology, TechSmith, Veeam, 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

(In thousands, except share and per share amounts)

 

 

 

September 30,
2011

 

December 31,
2010

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

8,857

 

$

10,955

 

Marketable securities

 

4,396

 

4,528

 

Accounts receivable, net

 

38,592

 

42,486

 

Inventory - finished goods

 

1,430

 

1,164

 

Prepaid expenses and other current assets

 

1,512

 

1,250

 

Deferred income taxes

 

323

 

516

 

Total current assets

 

55,110

 

60,899

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

507

 

545

 

Accounts receivable long-term

 

7,763

 

6,866

 

Other assets

 

37

 

37

 

Deferred income taxes

 

189

 

336

 

 

 

 

 

 

 

Total assets

 

$

63,606

 

$

68,683

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

35,940

 

$

41,791

 

Current portion- capital lease obligation

 

83

 

75

 

Total current liabilities

 

36,023

 

41,866

 

 

 

 

 

 

 

Long term portion- capital lease obligation

 

76

 

138

 

Total liabilities

 

36,099

 

42,004

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,688,042 and 4,770,241 shares outstanding, respectively

 

53

 

53

 

Additional paid-in capital

 

26,458

 

25,473

 

Treasury stock, at cost, 596,458 and 514,259 shares, respectively

 

(4,892

)

(3,570

)

Retained earnings

 

5,585

 

4,267

 

Accumulated other comprehensive income

 

303

 

456

 

Total stockholders’ equity

 

27,507

 

26,679

 

Total liabilities and stockholders’ equity

 

$

63,606

 

$

68,683

 

 



 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

 

 

 

 

Nine months ended

 

Three months ended

 

 

 

September 30,

 

September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(Unaudited)

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$

137,621

 

$

103,338

 

$

49,118

 

$

38,411

 

TechXtend segment

 

38,330

 

38,456

 

14,623

 

14,583

 

Total Revenue

 

175,951

 

141,794

 

63,741

 

52,994

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

125,804

 

93,910

 

45,013

 

34,980

 

TechXtend segment

 

33,964

 

34,097

 

12,971

 

12,880

 

Total Cost of sales

 

159,768

 

128,007

 

57,984

 

47,860

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

16,183

 

13,787

 

5,757

 

5,134

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling costs

 

5,595

 

4,857

 

1,867

 

1,656

 

Stock based compensation

 

824

 

892

 

235

 

296

 

Other general and administrative expenses

 

4,216

 

3,622

 

1,363

 

1,229

 

Total Selling, general and administrative expenses

 

10,635

 

9,371

 

3,465

 

3,181

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

5,548

 

4,416

 

2,292

 

1,953

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

264

 

316

 

92

 

104

 

Realized foreign exchange gain (loss)

 

1

 

3

 

 

 

Income before income tax provision

 

5,813

 

4,735

 

2,384

 

2,057

 

Provision for income taxes

 

2,248

 

1,800

 

890

 

800

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,565

 

$

2,935

 

$

1,494

 

$

1,257

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.81

 

$

0.67

 

$

0.34

 

$

0.29

 

Net income per common share - Diluted

 

$

0.77

 

$

0.66

 

$

0.33

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

4,411

 

4,380

 

4,406

 

4,389

 

Weighted average common shares outstanding - Diluted

 

4,618

 

4,475

 

4,575

 

4,502