Wayside Technology Group, Inc. Reports Third Quarter 2013 Results and Declares Quarterly Dividend

Marketwired

SHREWSBURY, NJ--(Marketwired - Oct 24, 2013) - Wayside Technology Group, Inc. (NASDAQ: WSTG)

Revenue: $70.5 million
Income from operations: $1.8 million
Net income: $1.3 million
Diluted earnings per share: $0.29 per share
Dividend declared: $0.17 per share

Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2013. The results will be discussed in a conference call to be held on October 25, 2013 at 10:00 a.m. EDT. 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. Our Lifeboat Distribution segment continued to deliver year over year growth, while our TechXtend division was down as compared to an exceptionally strong quarter last year," said Simon F. Nynens, Chairman and Chief Executive Officer. "On a year to date basis, our results have essentially matched last year's strong performance. As a result, the Board of Directors has agreed to increase the dividend declared from $0.16 per share to $0.17 per share. The Company has now paid dividends consecutively for over the last 40 quarters." 

Cash and cash equivalents amounted to $14.7 million, representing 45% of equity as of September 30, 2013. Working capital amounted to $24.4 million, representing 74% of equity as of September 30, 2013.

Net sales for the third quarter of 2013 decreased 7% or $5.1 million to $70.5 million compared to $75.5 million for the same period in 2012. Net sales for the third quarter of 2013 for our Lifeboat segment were $56.9 million compared to $56.0 million in the third quarter of 2012, representing an increase of $0.9 million or 2%. Net sales for the third quarter of 2013 for our TechXtend segment were $13.6 million compared to $19.5 million in the third quarter of 2012, representing a decrease of $5.9 million or 30%.

The increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration. The decrease in net sales in the TechXtend segment was primarily due to a decrease in large single sales transactions and a decrease in extended payment terms sales transactions as compared to exceptionally strong levels of large single sales transactions and extended payment terms sales transactions in the third quarter ended September 30, 2012.

Gross Profit for the third quarter ended September 30, 2013 was $5.3 million compared to $5.7 million for the third quarter of 2012. Total gross profit for our Lifeboat segment was $3.8 million compared to $3.7 million in the third quarter of 2012, representing a 4% increase. The increase in gross profit for the Lifeboat segment was due to higher sales volume in the current year. Total gross profit for our TechXtend segment was $1.4 million compared to $2.0 million in the third quarter of 2012, representing a 29% decrease. The decrease in gross profit in the TechXtend segment was the result of the decreased sales volume, including a decrease in large single sales transactions and a decrease in extended payment terms sales transactions. Vendor rebates and discounts for the quarter ended September 30, 2013 amounted to $0.3 million or 0.4% of net sales compared to $0.4 million or 0.5% of net sales for the third quarter of 2012.

Gross profit margin (gross profit as a percentage of net sales) for the third quarter of 2013 and 2012 was 7.5% for each period.

Total selling, general, and administrative ("SG&A") expenses for the third quarter of 2013 were $3.5 million compared to $3.6 million for the third quarter of 2012, representing a decrease of $0.1 million or 4%. This decrease is primarily the result of a decrease in commissions and bonus for our TechXtend segment (which are based on gross profit and segment income). As a percentage of net sales, SG&A expenses for the third quarter of 2013 were 4.9% compared to 4.8% for the third quarter of 2012.

Net income and diluted earnings per share for the third quarter of 2013 were $1.3 million and $0.29, respectively, compared to $1.4 million and $0.29 in the prior year.

On October 23, 2013, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock, payable November 15, 2013 to shareholders of record on November 5, 2013. This represents a $0.01 per share increase in the dividend, as compared to Q2-2013 and prior.

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, DataCore, Datawatch, Dell/Dell Software, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, SAP/Sybase, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Veeam Software, Vision Solutions 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, 2013     December 31, 2012  
    (unaudited)        
             
ASSETS            
             
Current assets            
  Cash and cash equivalents   $ 14,743     $ 9,835  
  Marketable securities     -       4,411  
  Accounts receivable, net     49,855       61,388  
  Inventory - finished goods     1,210       1,717  
  Prepaid expenses and other current assets     1,591       1,281  
  Deferred income taxes     280       280  
Total current assets     67,679       78,912  
                 
Equipment and leasehold improvements, net     303       375  
Accounts receivable long-term     8,069       11,851  
Other assets     159       71  
Deferred income taxes     201       236  
                 
    $ 76,411     $ 91,445  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current liabilities                
  Accounts payable and accrued expenses   $ 43,311     $ 59,265  
  Current portion- capital lease obligation     -       55  
Total current liabilities     43,311       59,320  
                 
                 
Commitments and contingencies                
                 
Stockholders' equity                
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares                
  issued, and 4,674,097 and 4,740,873 shares outstanding, respectively     53       53  
  Additional paid-in capital     28,456       27,712  
  Treasury stock, at cost, 610,403 and 543,627 shares, respectively     (6,743 )     (5,373 )
  Retained earnings     10,973       9,316  
  Accumulated other comprehensive income     361       417  
Total stockholders' equity     33,100       32,125  
    $ 76,411     $ 91,445  
                 
                 
 
 
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts In thousands, except per share data)
                   
    Nine months ended   Three months ended
    September 30,   September 30,
    2013   2012   2013     2012
Revenues                  
  Lifeboat segment   $ 171,949   $ 158,838   $ 56,871     $ 55,989
  TechXtend segment     38,588     52,772     13,591       19,545
  Total Revenue     210,537     211,610     70,462       75,534
                           
Cost of sales                          
  Lifeboat segment     159,820     147,502     53,025       52,282
  TechXtend segment     34,174     47,253     12,172       17,554
  Total Cost of sales     193,994     194,755     65,197       69,836
                           
Gross Profit                          
  Lifeboat segment     12,129     11,336     3,846       3,707
  TechXtend segment     4,414     5,519     1,419       1,991
  Total Gross Profit     16,543     16,855     5,265       5,698
                           
Operating expenses                          
  Selling costs     5,835     5,857     1,830       1,937
  Stock based compensation     830     743     278       281
  Other general and administrative expenses     4,546     4,548     1,372       1,393
Total Selling, general and administrative expenses     11,211     11,148     3,480       3,611
                           
Income from operations     5,332     5,707     1,785       2,087
                           
Interest income, net     416     394     140       140
Foreign currency transaction gain (loss)     10     13     (11 )     12
Income before income tax provision     5,758     6,114     1,914       2,239
Provision for income taxes     1,868     2,428     584       887
                           
Net income   $ 3,890   $ 3,686   $ 1,330     $ 1,352
                           
Net income per common share - Basic   $ 0.87   $ 0.83   $ 0.30     $ 0.30
Net income per common share - Diluted   $ 0.85   $ 0.80   $ 0.29     $ 0.29
                           
Weighted average common shares outstanding - Basic     4,457     4,467     4,442       4,502
Weighted average common shares outstanding - Diluted     4,568     4,635     4,551       4,643
                           
Dividends paid per common share   $ 0.48   $ 0.48   $ 0.16     $ 0.16
                           
                           
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