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 2011 SECOND QUARTER RESULTS AND DECLARES QUARTERLY DIVIDEND

 

·                  Revenue: $60.7 million, up 25% year-over-year

 

·                  Income from operations $2.0 million, up 29% year-over-year

 

·                  $.16 quarterly dividend declared

 

SHREWSBURY, NJ, July 28, 2011 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the second quarter ended June 30, 2011. The results will be discussed in a conference call to be held on Friday, July 29, 2011 at 10:00 AM Eastern time. The dial-in telephone number is (866) 861-4873 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 amounted to $13.1 million, representing 48% of equity as of June 30, 2011.

 

Net sales for the second quarter of 2011 increased 25% to $60.7 million compared to $48.4 million for the same period in 2010. Total sales for the second quarter of 2011 for our TechXtend segment (formerly Programmer’s Paradise segment) were $11.7 million compared to $12.6 million in the second quarter of 2010, representing a 7% decrease. Total sales for the second quarter of 2011 for our Lifeboat segment were $49.0 million compared to $35.8 million in the second quarter of 2010, representing an increase of $13.1 million or 37%.

 

“We performed well in the second quarter of 2011,” said Simon F. Nynens, Chairman and Chief Executive Officer. “We continue to invest in the growth of our company and we are pleased to report a continued high growth rate.”

 

Sales from our Lifeboat segment showed strong growth. The 37% increase in net sales in the second quarter of 2011 compared to 2010 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. The decrease in sales in the TechXtend division was primarily due to fewer large sales transactions in the current quarter.

 

Gross Profit for the quarter ended June 30, 2011 was $5.6 million compared to $4.7 million for the second quarter of 2010, representing a 20% increase. Total gross profit for our TechXtend segment was $1.3 million compared to $1.3 million in the second quarter of 2010, representing a 2% decrease. Total gross profit for our Lifeboat segment was $4.3 million compared to $3.4 million in the second quarter of 2010, representing a 28% increase. This increase in gross profit was due to aggressive sales volume growth within our Lifeboat segment. Vendor rebates and discounts for the quarter ended June 30, 2011 amounted

 


 

to $0.8 million compared to $0.7 million for the second quarter of 2010. Vendor rebates are dependent on reaching certain targets set by our vendors.

 

Total gross profit, as a percentage of net sales, for the second quarter of 2011 was 9.2%, compared to 9.7% in the second quarter of 2010.

 

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 second quarter of 2011 were $3.6 million compared to $3.2 million for the second quarter of 2010, which was mainly the result of a increase in employee and employee-related expenses (salaries, commissions, bonus accruals and benefits)  of $0.3 million in 2011 compared to 2010. As a percentage of net sales, SG&A expenses for the second quarter of 2011 were 6.0% compared to 6.5% for the second quarter of 2010.

 

On July 26, 2011, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable August 19, 2011 to shareholders of record on August 9, 2011.

 

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, Astaro, CA Technologies, Corel, DataCore, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Microsoft, Mindjet, Oracle, Quest Software, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Veeam, 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)

 

 

 

June 30,
2011

 

December 31,
2010

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

11,667

 

$

10,955

 

Marketable securities

 

1,394

 

4,528

 

Accounts receivable, net

 

38,443

 

42,486

 

Inventory - finished goods

 

1,345

 

1,164

 

Prepaid expenses and other current assets

 

1,378

 

1,250

 

Deferred income taxes

 

452

 

516

 

Total current assets

 

54,679

 

60,899

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

514

 

545

 

Accounts receivable long-term

 

6,370

 

6,866

 

Other assets

 

38

 

37

 

Deferred income taxes

 

336

 

336

 

 

 

 

 

 

 

Total assets

 

$

61,937

 

$

68,683

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

34,643

 

$

41,791

 

Current portion- capital lease obligation

 

82

 

75

 

Total current liabilities

 

34,725

 

41,866

 

 

 

 

 

 

 

Long term portion- capital lease obligation

 

97

 

138

 

Total liabilities

 

34,822

 

42,004

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,722,893 and 4,770,241 shares outstanding, respectively

 

53

 

53

 

Additional paid-in capital

 

26,198

 

25,473

 

Treasury stock, at cost, 561,607 and 514,259 shares, respectively

 

(4,519

)

(3,570

)

Retained earnings

 

4,835

 

4,267

 

Accumulated other comprehensive income

 

548

 

456

 

Total stockholders’ equity

 

27,115

 

26,679

 

Total liabilities and stockholders’ equity

 

$

61,937

 

$

68,683

 

 


 

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,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(Unaudited)

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$

88,502

 

$

64,927

 

$

48,951

 

$

35,810

 

TechXtend segment (formerly Programmer’s Paradise segment)

 

23,708

 

23,873

 

11,710

 

12,632

 

Total Revenue

 

112,210

 

88,800

 

60,661

 

48,442

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

80,790

 

58,930

 

44,653

 

32,458

 

TechXtend segment (formerly Programmer’s Paradise segment)

 

20,994

 

21,217

 

10,407

 

11,299

 

Total Cost of sales

 

101,784

 

80,147

 

55,060

 

43,757

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

10,426

 

8,653

 

5,601

 

4,685

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling costs

 

3,728

 

3,200

 

1,892

 

1,651

 

Stock based compensation

 

589

 

596

 

300

 

296

 

Other general and administrative expenses

 

2,853

 

2,394

 

1,448

 

1,213

 

Total Selling, general and administrative expenses

 

7,170

 

6,190

 

3,640

 

3,160

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

3,256

 

2,463

 

1,961

 

1,525

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

172

 

212

 

86

 

104

 

Realized foreign exchange gain

 

1

 

3

 

1

 

2

 

Income before income tax provision

 

3,429

 

2,678

 

2,048

 

1,631

 

Provision for income taxes

 

1,358

 

1,000

 

820

 

576

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,071

 

$

1,678

 

$

1,228

 

$

1,055

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.47

 

$

0.38

 

$

0.28

 

$

0.24

 

Net income per common share - Diluted

 

$

0.45

 

$

0.38

 

$

0.26

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

4,414

 

4,376

 

4,414

 

4,380

 

Weighted average common shares outstanding - Diluted

 

4,647

 

4,461

 

4,645

 

4,493