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

SHREWSBURY, NJ--(Marketwired - Jul 25, 2013) - Wayside Technology Group, Inc. ( NASDAQ : WSTG )

   
Revenue: $74.1 million
Income from operations: $2.2 million
Net income: $1.5 million
Diluted earnings per share: $0.34 per share
Dividend declared: $0.16 per share
   

Wayside Technology Group, Inc. ( NASDAQ : WSTG ) today reported financial results for the second quarter ended June 30, 2013. The results will be discussed in a conference call to be held on July 26, 2013 at 10:00 AM Eastern time. 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. Overall, revenue increased 7% and net income increased 18% over the same period last year. In addition, our Q2 year-over-year growth on all key metrics -- including revenue, gross margin, income from operations and net income -- showed improvement compared to Q1's year-over-year growth," said Simon F. Nynens, Chairman and Chief Executive Officer.

Cash and cash equivalents amounted to $12.0 million, representing 37% of equity as of June 30, 2013. Working capital amounted to $22.7 million, representing 70% of equity as of June 30, 2013.

Net sales for the second quarter of 2013 increased 7% or $4.9 million to $74.1 million, compared to $69.2 million for the same period in 2012. Net sales for the second quarter of 2013 for our Lifeboat segment were $61.2 million, compared to $53.5 million in the second quarter of 2012, representing an increase of $7.7 million or 14%. Net sales for our TechXtend segment for the second quarter of 2013 were $12.9 million, compared to $15.6 million in the second quarter of 2012, representing a decrease of $2.7 million or 18%.

The 14% increase in net sales for the Lifeboat Distribution segment was mainly a result of our increased account penetration, our continued focus on the expanding virtual infrastructure-centric business and the addition of several key product lines. The 18% decrease in net sales in the TechXtend segment was primarily due to a decrease in extended payment terms sales transactions as compared to exceptionally strong levels of extended payment terms sales in the second quarter ended June 30, 2012.

Gross Profit for the second quarter ended June 30, 2013 increased 7% or $0.4 million to $6.0 million, compared to $5.6 million for the second quarter of 2012. Total gross profit for our Lifeboat segment was $4.5 million, compared to $3.8 million in the second quarter of 2012, representing a 17% 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 $1.5 million, compared to $1.7 million in the second quarter of 2012, representing a 17% decrease. The decrease in gross profit in the TechXtend segment was the result of the decreased sales volume, including a decrease in extended payment terms sales transactions. Gross profit margin (gross profit as a percentage of net sales) for the second quarter of 2013 and 2012 was 8.1% for each period.

Total selling, general, and administrative ("SG&A") expenses for the second quarter of 2013 were $3.8 million, compared to $3.6 million for the second quarter of 2012, representing an increase of $0.2 million or 7%. This increase is primarily the result of an increase in commissions and bonus for our Lifeboat segment (which are based on gross profit) and an increase in salary expense (from increased headcount in sales, finance and operations to support business growth) in 2013 compared to 2012, offset in part by a decrease in commissions and bonus for our TechXtend segment (which are based on gross profit). As a percentage of net sales, SG&A expenses for second quarter of 2013 and 2012 remained consistent at 5.1% for each period.

Net income and diluted earnings per share for the second quarter of 2013 were $1.5 million and $0.34, respectively, compared to $1.3 million and $0.28 in the prior year.

On July 24, 2013, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock, payable August 16, 2013 to shareholders of record on August 6, 2013.

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)  
             
    June 30, 2013     December 31, 2012  
    (unaudited)        
             
ASSETS            
             
Current assets            
  Cash and cash equivalents   $ 12,021     $ 9,835  
  Marketable securities     -       4,411  
  Accounts receivable, net     53,454       61,388  
  Inventory - finished goods     1,747       1,717  
  Prepaid expenses and other current assets     1,518       1,281  
  Deferred income taxes     286       280  
Total current assets     69,026       78,912  
                 
Equipment and leasehold improvements, net     372       375  
Accounts receivable long-term     8,835       11,851  
Other assets     153       71  
Deferred income taxes     215       236  
                 
    $ 78,601     $ 91,445  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current liabilities                
  Accounts payable and accrued expenses   $ 46,309     $ 59,265  
  Current portion- capital lease obligation     14       55  
Total current liabilities     46,323       59,320  
                 
                 
Commitments and contingencies                
                 
Stockholders' equity                
  Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,696,553 and 4,740,873 shares outstanding, respectively     53       53  
  Additional paid-in capital     28,040       27,712  
  Treasury stock, at cost, 587,947 and 543,627 shares, respectively     (6,304 )     (5,373 )
  Retained earnings     10,383       9,316  
  Accumulated other comprehensive income     106       417  
Total stockholders' equity     32,278       32,125  
    $ 78,601     $ 91,445  
                 
                 
 
 
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
                 
    Six months ended   Three months ended
    June 30,   June 30,
    2013   2012   2013   2012
    (Unaudited )   (Unaudited )
Revenues                
  Lifeboat segment   $ 115,078   $ 102,850   $ 61,209   $ 53,548
  TechXtend segment (formerly Programmer's Paradise segment)     24,997     33,226     12,886     15,621
  Total Revenue     140,075     136,076     74,095     69,169
                         
Cost of sales                        
  Lifeboat segment     106,794     95,221     56,698     49,704
  TechXtend segment (formerly Programmer's Paradise segment)     22,003     29,698     11,432     13,875
  Total Cost of sales     128,797     124,919     68,130     63,579
                         
Gross Profit     11,278     11,157     5,965     5,590
                         
Operating expenses                        
  Selling costs     4,004     3,919     2,010     1,947
  Stock based compensation     551     463     280     231
  Other general and administrative expenses     3,176     3,156     1,524     1,373
Total Selling, general and administrative expenses     7,731     7,538     3,814     3,551
                         
Income from operations     3,547     3,619     2,151     2,039
                         
Interest income, net     276     254     146     130
Foreign currency transaction gain     21     1     16     -
Income before income tax provision     3,844     3,874     2,313     2,169
Provision for income taxes     1,284     1,541     773     865
                         
Net income   $ 2,560   $ 2,333   $ 1,540   $ 1,304
                         
Net income per common share - Basic   $ 0.57   $ 0.52   $ 0.35   $ 0.29
Net income per common share - Diluted   $ 0.56   $ 0.50   $ 0.34   $ 0.28
                         
Weighted average common shares outstanding - Basic     4,464     4,449     4,451     4,471
Weighted average common shares outstanding - Diluted     4,578     4,632     4,557     4,656