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Exhibit 99.1 |
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Company Contact: |
PROGRAMMER'S PARADISE, INC. REPORTS SECOND QUARTER RESULTS;
SALES INCREASE 38%, INCOME FROM OPERATIONS INCREASES 360%
SHREWSBURY, NJ, July 27, 2006 - Programmer's Paradise, Inc. (NASDAQ: PROG)
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Sales: $41.4 million, up 38% year-over-year |
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Gross profit: $4.1 million, up 20% year-over-year |
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Income from operations: $1.1 million, up 360% year-over-year |
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Net income: $0.8 million, up 322% year-over-year |
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Diluted earnings per share: $0.17, up 325% year-over-year |
The results will be discussed in a conference call to be held on Friday, July 28, 2006 at 10:00 AM Eastern time. The dial-in telephone number is (866) 818-1395 and the pass code is PROG.
"The second quarter of 2006 was a spectacular quarter for us. Revenue grew at a strong pace. Our Lifeboat division continued to take market share. The sales growth combined with our focus on cost control resulted in an increase of 360% in income from operations over the same period in 2005," said Simon F. Nynens, President and Chief Executive Officer.
Net sales for the quarter ended June 30, 2006 were $41.4 million compared with $30.1 million in the second quarter of 2005, a 38% increase. Total sales for our Programmer's Paradise division were $12.5 million compared with $11.9 million in the second quarter of 2005, representing a 5% increase. Total sales for our Lifeboat division were $29.0 million compared with $18.2 million in the second quarter of 2005, representing a 60% increase. This growth reflects our continued focus on the expanding virtual infrastructure-centric business, as well as the strengthening of our account penetration.
Gross profit for the quarter ended June 30, 2006 was $4.1 million compared with $3.4 million in the second quarter of 2005, a 20% increase. Total gross profit for our Programmer's Paradise division was $1.7 million compared with $1.6 million in the second quarter of 2005, representing a 2% increase. Total gross profit for our Lifeboat division was $2.4 million compared with $1.8 million in the second quarter of 2005, representing a 37% increase.
Gross profit margin, as a percentage of net sales, for the quarter ended June 30, 2006 was 9.8% compared with 11.2% in the second quarter of 2005. Gross profit margin for our Programmer's Paradise division was 13.3% compared with 13.6% in the second quarter of 2005. Gross profit margin for our Lifeboat division was 8.3% compared with 9.7% in the second quarter of 2005. These margins primarily reflect the competitive nature of our business and a shift in our product mix.
Total selling, general, and administrative ("SG&A") expenses for the second quarter of 2006 were $2.9 million compared with $3.1 million in the second quarter of 2005 or a decrease of $0.2 million or 6%. This decrease is mainly due to a one-time charge of $0.3 million for an uncollectible receivable in the second quarter of 2005, partly offset by a $0.1 million charge related to the subleasing of our Hauppauge, New York office to another company in the second quarter of 2006. As a percentage of net sales, SG&A expenses for the second quarter of 2006 were 7.1% compared with 10.4% in the second quarter of 2005.
Second quarter income from operations in 2006 was $1.1 million compared with $0.2 million in the second quarter of 2005, representing a 360% increase. Second quarter net income in 2006 was $0.8 million compared with $0.2 million in the second quarter of 2005. Diluted earnings per share were $.17 versus $.04 in the second quarter of 2005.
Programmer's Paradise, Inc. (NASDAQ: PROG) was founded in 1982 and is an award-winning marketer and distributor of technical software and hardware. When it comes to software, Programmer's Paradise has it all. Our experienced account executives are key in our strategy. We offer our customers customized extranets, consultancy services, and flexible financing, as well as same day shipping. Additional information can be found by visiting www.programmersparadise.com.
Contact Programmer's Paradise, Inc. via Kevin Scull, Vice President and Chief Accounting Officer of Programmer's Paradise, Inc. at (732) 389-8950 or kevin.scull@programmers.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 include the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, and contribution of key vendor relationships and support programs. 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.
- Tables Follow -
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PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) |
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June 30, |
December 31, |
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(Unaudited) |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
$11,122 |
$7,369 |
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Marketable securities |
8,987 |
7,884 |
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Accounts receivable, net |
19,129 |
21,185 |
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Inventory - finished goods |
948 |
1,956 |
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Prepaid expenses and other current assets |
669 |
688 |
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Deferred income taxes, current |
1,414 |
1,783 |
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Total current assets |
42,269 |
40,865 |
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Equipment and leasehold improvements, net |
538 |
434 |
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Other assets |
721 |
453 |
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Deferred income taxes, net of current |
2,676 |
2,516 |
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Total assets |
$46,204 |
$44,268 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable and accrued expenses |
$26,015 |
$25,751 |
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Dividend payable |
1,130 |
519 |
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Total current liabilities |
27,145 |
26,270 |
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| Other liabilities | 115 | - | |
| Total liabilities | 27,260 | 26,270 | |
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Commitments and contingencies |
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Stockholders' equity |
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Common stock, $.01 par value; authorized, |
53 |
53 |
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Additional paid-in capital |
29,889 |
30,948 |
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Treasury stock, at cost, 1,097,919 shares and |
(3,060) |
(3,620) |
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Accumulated deficit |
(8,198) |
(9,570) |
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Accumulated other comprehensive income |
260 |
187 |
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Total stockholders' equity |
18,944 |
17,998 |
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Total liabilities and stockholders' equity |
$46,204 |
$44,268 |
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PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)
| Six months ended | Three months ended | |||||||
| June 30, | June 30, | |||||||
| 2006 | 2005 | 2006 | 2005 | |||||
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Net sales |
$76,800 |
$60,221 |
$41,438 |
$30,052 |
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Cost of sales |
68,897 |
53,422 |
37,379 |
26,682 |
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Gross profit |
7,903 |
6,799 |
4,059 |
3,370 |
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Selling, general and administrative expenses |
5,891 |
6,108 |
2,924 |
3,123 |
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Income from operations |
2,012 |
691 |
1,135 |
247 |
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Interest income, net |
279 |
140 |
166 |
73 |
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Realized foreign exchange gain (loss) |
2 |
(25) |
1 |
(14) |
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Income before income tax provision |
2,293 |
806 |
1,302 |
306 |
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Provision for income taxes |
921 |
321 |
521 |
121 |
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Net income |
$1,372 |
$485 |
$781 |
$185 |
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Net income per common share - Basic |
$0.33 |
$0.12 |
$0.19 |
$0.05 |
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Net income per common share - Diluted |
$0.31 |
$0.11 |
$0.17 |
$0.04 |
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Weighted average common shares outstanding-Basic |
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Weighted average common shares outstanding-Diluted |
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Reconciliation to comprehensive income: |
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Net income |
$1,372 |
$485 |
$781 |
$185 |
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Other comprehensive income(loss), net of tax: |
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Unrealized gain on marketable securities |
15 |
6 |
8 |
6 |
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Foreign currency translation adjustments |
58 |
(33) |
47 |
(23) |
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Total comprehensive income |
$1,445 |
$458 |
$836 |
$168 |
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