Company Contact:
 

Kevin Scull
 

Wayside Technology Group, Inc.
 

Vice President and Chief Accounting Officer
 

(732)-389-8950
 

kevin.scull@waysidetechnology.com
   
 

WAYSIDE TECHNOLOGY GROUP, INC. REPORTS 2007 SECOND QUARTER RESULTS;
SALES INCREASE 6%, NET INCOME INCREASES 23%,
INCREASES QUARTERLY DIVIDEND,
ENGAGES INVESTMENT BANKER

SHREWSBURY, NJ, July 26, 2007 - - Wayside Technology Group, Inc. (NASDAQ: WSTG)

Second Quarter 2007 results

- - Sales: $44.0 million, up 6% year-over-year
- - Gross profit: $4.3 million, up 7% year-over-year
- - Income from operations: $1.3 million, up 18% year-over-year
- - Net income: $1.0 million, up 23% year-over-year

The results will be discussed in a conference call to be held on Friday, July 27, 2007 at 10:00 AM Eastern time. The dial-in telephone number is (866) 835-8825 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 be available on our website at www.waysidetechnology.com.

"We successfully continued to execute our strategic business plan in the second quarter. Our net income showed continued excellent growth," said Simon F. Nynens, chairman and chief executive officer. "In accordance with our business plan, we consciously decided not to pursue ultra-low margin revenues. We have, and will continue to focus on growing our business in a profitable way."

On July 25, 2007, the Board of Directors declared a quarterly dividend of $.15 per share of its common stock payable August 20, 2007 to shareholders of record on August 6, 2007. This represents a 7% increase in dividend, from $.14 per share to $.15 per share.

Wayside Technology Group, Inc. furthermore announced today that it has engaged an investment banker to assist in identifying and exploring potential acquisition opportunities.

Net sales for the second quarter of 2007 increased 6% or $2.6 million to $44.0 million compared to $41.4 million for the same period in 2006. Total sales for the second quarter of 2007 for our Lifeboat segment were $33.7 million compared to $29.0 million in the second quarter of 2006, representing a 16% increase. Total sales for the second quarter of 2007 for our Programmer's Paradise segment were $10.4 million compared to $12.5 million in the second quarter of 2006, representing a 17% decrease.

Gross Profit for the quarter ending June 30, 2007 was $4.3 million compared to $4.1 million in the second quarter of 2006, a 7% increase. Total gross profit for our Lifeboat segment was $3.0 million compared to $2.3 million in the second quarter of 2006, representing a 29% increase. Total gross profit for our

 

Programmer's Paradise segment was $1.3 million compared to $1.7 million in the second quarter of 2006, representing a 23% decrease.

Gross profit margin, as a percentage of net sales, for the quarter ending June 30, 2007 was 9.8% unchanged compared to the second quarter of 2006. Gross profit margin for our Programmer's Paradise segment was 12.9% compared to 13.9% in the second quarter of 2006. Gross profit margin for our Lifeboat segment was 8.9% compared to 8.0% in the second quarter of 2006.

Total selling, general, and administrative ("SG&A") expenses for the second quarter of 2007 were $3.0 million, up slightly compared to $2.9 million in the second quarter of 2006, despite $0.2 million of compensation expenses in the second quarter of 2007 related to the implementation of FAS 123(R) for stock based compensation. As a percentage of net sales, SG&A expenses for the second quarter of 2007 were 6.8% compared to 7.1 % in the second quarter of 2006.

Net income for the second quarter of 2007 increased 23% or $0.2 million to $1 million compared to $0.8 million for the same period in 2006.

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 generated sales of $182 million in 2006, and was ranked No. 8 on BusinessWeek's list of hot growth companies in June 2006. The company offers technology products from software publishers and manufacturers such as Microsoft, CA, IBM, VMware, Borland, Quest Software, Compuware, Infragistics, ComponentOne, Macrovision, and Adobe.

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 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 -

 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

 

June 30,
 2006

  

December 31, 2006         
 

(Unaudited)  

    

ASSETS

Current assets

      

   Cash and cash equivalents

$       11,029

  

$         13,832

   Marketable securities

9,414

  

7,032

   Accounts receivable, net

21,497

28,045

   Inventory - finished goods

1,636

  

1,265

   Prepaid expenses and other current assets

638

  

607

   Deferred income taxes

                 1,103

  

                       1,632

Total current assets

45,317

  

52,413
       

Equipment and leasehold improvements, net

641

  

488

Other assets

2,408

  

2,927

Deferred income taxes

                 1,214

  

                      1,453
       

Total assets

      $        49,580

  

            $       57,281
 
 
  
 
       

LIABILITIES AND STOCKHOLDERS' EQUITY
       

Current liabilities

      

   Accounts payable and accrued expenses

$         25,482

  

$         35,304

   Dividend payable

                 - 

  

                          638

Total current liabilities

25,482

  

                     35,942
       

Other liabilities

                     28

  

                            41

Total liabilities

25,510

  

35,983
       

Commitments and contingencies

      
       

Stockholders' equity

      

   Common stock, $.01 par value; authorized,
       10,000,000 shares; issued 5,284,500 shares


53

  


53

   Additional paid-in capital

29,686

  

29,252

   Treasury stock, at cost, 584,751 shares and
        687,879 shares, respectively


(1,678)

  


(1,905)

   Accumulated deficit

(4,353)

  

(6,302)

   Accumulated other comprehensive income

                   362

  

                          200

Total stockholders' equity

               24,070

  

                     21,298

Total liabilities and stockholders' equity

      $       49,580

  

            $       57,281
 
 
  
 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)

 

Six months ended
June 30,

  

Three months ended
 June 30,
 

2007

  

2006

  

2007

  

2006
               

Net sales

$  90,962

  

$     76,800

  

$ 44,040

  

$    41,438
               

Cost of sales

        82,170

  

              68,897

  

        39,703

  

          37,379
               

Gross profit

8,792

  

7,903

  

4,337

  

4,059
               

Selling, general and administrative expenses

            6,036

  

                5,891

  

          2,993

  

             2,924
               

Income from operations

2,756

  

2,012

  

1,344

  

1,135
               

Interest income, net

491

  

279

  

251

  

166
               

Realized foreign exchange gain

                   -

  

                  2

  

                 1

  

                  1
               

Income before income tax provision

3,247

  

2,293

  

1,596

  

1,302
               

Provision for income taxes

             1,298

  

                    921

  

              637

  

                521
               

Net income

     $      1,949

  

        $       1,372

  

      $      959

  

     $         781
 
 
  
 
  
 
  
 

Net income per common share - Basic

     $        0.44

  

        $         0.33

  

      $     0.22

  

     $        0.19
 
 
  
 
  
 
  
 

Net income per common share - Diluted

     $     0.42

 

        $       0.31

  

      $    0.20

  

     $       0.17
 
 
  
 
  
 
  
 

Weighted average common shares outstanding-Basic

           4,380

 

              4,137

  

          4,407

  

            4,172
 
 
  
 
  
 
  
 

Weighted average common shares outstanding-Diluted

          4,687 

 

               4,474

  

          4,706

  

            4,494
 
 
  
 
  
 
  
 

Reconciliation to comprehensive income:

              
               

Net income

$    1,949 

 

$      1,372

  

$     959

  

$         781

  Other comprehensive income, net of tax:

              

      Unrealized gain on marketable securities

-  

 

15

  

-

  

8

      Foreign currency translation adjustments

                162 

  

                     58

  

                143

  

                  47

  Total comprehensive income

     $      2,111

  

        $       1,445

  

      $      1,102

  

     $         836