Exhibit 99.1

 

GRAPHIC

 

Company Contact:

Kevin Scull

Wayside Technology Group, Inc.

Vice President and Chief Accounting Officer

(732) 389-0932

kevin.scull@waysidetechnology.com

 

WAYSIDE TECHNOLOGY GROUP, INC. REPORTS 2010 THIRD QUARTER RESULTS

AND DECLARES QUARTERLY DIVIDEND

 

· Revenue: $53.0 million, up 50% year-over-year

 

· Income from operations $2.0 million, up 105% year-over-year

 

· $.16 quarterly dividend declared, a 7% increase

 

SHREWSBURY, NJ, October 28, 2010 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2010. The results will be discussed in a conference call to be held on Friday, October 29, 2010 at 10:00 AM Eastern time. The dial-in telephone number is (866) 835 8907 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 also be available on the company’s website at www.waysidetechnology.com.

 

Cash and marketable securities amount to $14.2 million, representing 55% of equity as of September 30, 2010.

 

Net sales for the third quarter of 2010 increased 50% or $17.7 million to $53.0 million compared to $35.3 million for the same period in 2009. Total sales for the third quarter of 2010 for our Lifeboat segment were $38.4 million compared to $23.8 million in the third quarter of 2009, representing a 61% increase. Total sales for the third quarter of 2010 for our Programmer’s Paradise segment were $14.6 million compared to $11.5 million in the third quarter of 2009, representing a 27% increase.

 

“The third quarter of 2010 was a record quarter for us,” said Simon F. Nynens, Chairman and Chief Executive Officer. “Our continued high growth rate shows that our customers are exceedingly satisfied with our service model, as we continue to expand our offerings to our valued customers.”

 

Sales for both segments showed strong growth. The increase in net sales for the three and nine months ended September 30, 2010 compared to the same periods in 2009, was mainly a result of our continued focus on the expanding virtual infrastructure-centric business, the addition of several key product lines, and the strengthening of our account penetration.

 

Gross Profit for the quarter ended September 30, 2010 was $5.1 million compared to $3.7 million for the third quarter of 2009, a 39% increase. Total gross profit for our Lifeboat segment was $3.4 million compared to $2.3 million in the third quarter of 2009, representing a 47% increase. This increase in gross profit was due to aggressive sales volume growth within our Lifeboat segment. Total gross profit for our Programmer’s Paradise segment was $1.7 million compared to $1.4 million in the third quarter of 2009, representing a 25% increase. This increase was primarily due to the increased sales volume.

 


 

Total gross profit, as a percentage of net sales, for the third quarter of 2010 was 9.7%, compared to 10.5% in the third quarter of 2009.

 

The increase in gross profit dollars and the decrease in gross profit margin as a percentage of net sales was primarily caused by the aggressive sales growth within our Lifeboat segment, competitive pricing pressure in both segments, and also in part by our having won several large bids based on aggressive pricing, which we plan to continue to do.

 

Total selling, general, and administrative (“SG&A”) expenses for the third quarter of 2010 were $3.2 million, compared to $2.7 million in the third quarter of 2009. This increase is mainly due to an increase in employee related expenses (salaries, commissions, bonus accruals and benefits) of $0.4 million.

 

On October 26, 2010, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable November 19, 2010 to shareholders of record on November 9, 2010. This represents a 7% increase in dividend, from $.15 per share to $.16 per share.

 

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 such as Acronis, CA, DataCore, Dell, Flexera Software (publishers of InstallShield), GFI, Hewlett Packard, Infragistics, Intel Software, Microsoft, Mindjet, Quest Software, SolarWinds, StorageCraft Technology, TechSmith, Veeam, Vizioncore, 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

(In thousands, except share and per share amounts)

 

 

 

September
30,
2010

 

December
31, 2009

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

7,705

 

$

8,560

 

Marketable securities

 

6,524

 

7,571

 

Accounts receivable, net

 

36,385

 

27,040

 

Inventory - finished goods

 

1,186

 

967

 

Prepaid expenses and other current assets

 

1,156

 

998

 

Deferred income taxes

 

564

 

677

 

Total current assets

 

53,520

 

45,813

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

596

 

432

 

Accounts receivable long-term

 

4,737

 

6,901

 

Other assets

 

38

 

38

 

Deferred income taxes

 

241

 

483

 

 

 

 

 

 

 

Total assets

 

$

59,132

 

$

53,667

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

33,241

 

29,230

 

Current portion- capital lease obligation

 

82

 

—

 

Total current liabilities

 

33,323

 

29,230

 

 

 

 

 

 

 

Long Term portion -capital lease obligation

 

159

 

—

 

Other liabilities

 

—

 

78

 

Total liabilities

 

33,482

 

29,308

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,780,598 and 4,688,844 shares outstanding, respectively

 

53

 

53

 

Additional paid-in capital

 

25,145

 

24,826

 

Treasury stock, at cost, 503,902 and 595,656 shares, respectively

 

(3,458

)

(3,555

)

Retained earnings

 

3,534

 

2,727

 

Accumulated other comprehensive income

 

376

 

308

 

Total stockholders’ equity

 

25,650

 

24,359

 

Total liabilities and stockholders’ equity

 

$

59,132

 

$

53,667

 

 


 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

 

 

 

Nine months ended

 

Three months ended

 

 

 

September 30,

 

September 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

(Unaudited)

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$

103,338

 

$

69,131

 

$

38,411

 

$

23,844

 

Programmer’s Paradise segment

 

38,456

 

34,961

 

14,583

 

11,466

 

Total Revenue

 

141,794

 

104,092

 

52,994

 

35,310

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

93,910

 

62,268

 

34,980

 

21,511

 

Programmer’s Paradise segment

 

34,097

 

30,582

 

12,880

 

10,105

 

Total Cost of sales

 

128,007

 

92,850

 

47,860

 

31,616

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

13,787

 

11,242

 

5,134

 

3,694

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling costs

 

4,856

 

3,999

 

1,656

 

1,289

 

Stock based compensation

 

892

 

657

 

296

 

236

 

Other general and administrative expenses

 

3,623

 

3,647

 

1,229

 

1,216

 

Total Selling, general and administrative expenses

 

9,371

 

8,303

 

3,181

 

2,741

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

4,416

 

2,939

 

1,953

 

953

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

316

 

403

 

104

 

128

 

Realized foreign exchange gain (loss)

 

3

 

(1

)

—

 

 

 

Income before income tax provision

 

4,735

 

3,341

 

2,057

 

1,081

 

Provision for income taxes

 

1,800

 

1,374

 

800

 

483

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,935

 

$

1,967

 

$

1,257

 

$

598

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.67

 

$

0.45

 

$

0.29

 

$

0.14

 

Net income per common share - Diluted

 

$

0.66

 

$

0.44

 

$

0.28

 

$

0.13

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

4,380

 

4,400

 

4,389

 

4,415

 

Weighted average common shares outstanding - Diluted

 

4,475

 

4,427

 

4,502

 

4,444