Wayside Technology Group, Inc. Reports Second Quarter 2013 Results and Declares Quarterly Dividend
SHREWSBURY, NJ -- (Marketwired) -- 07/25/13 -- 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, December 31,
2013 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
========= ========= ========= =========
Source: Wayside Technology Group
Released July 25, 2013