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 2012 SECOND QUARTER RESULTS AND DECLARES QUARTERLY DIVIDEND

 

·                  Revenue: $69.2 million, up 14% year-over-year

 

·                  Income from operations $2.0 million, up 4% year-over-year

 

·                  $.16 quarterly dividend declared

 

SHREWSBURY, NJ, July 26, 2012 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the second quarter ended June 30, 2012. The results will be discussed in a conference call to be held on Friday, July 27, 2012 at 10:00 AM Eastern time. The dial-in telephone number is (866) 961-5936 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 $12.8 million, representing 42% of equity as of June 30, 2012. Working capital amounted to $20.3 million, representing 66% of equity as of June 30, 2012.

 

Net sales for the second quarter of 2012 increased 14% to $69.2 million compared to $60.7 million for the same period in 2011. Total sales for the second quarter of 2012 for our TechXtend segment were $15.6 million compared to $11.7 million in the second quarter of 2011, representing a 33% increase. Total sales for the second quarter of 2012 for our Lifeboat segment were $53.5 million compared to $49 million in the second quarter of 2011, representing a 9% increase.

 

“We delivered solid results in the second quarter of 2012. Our TechXtend division performed especially well,” said Simon F. Nynens, Chairman and Chief Executive Officer. “We continued to increase our market share and grow our service offerings.”

 

The 14% increase in net sales in the second quarter of 2012 compared to 2011 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 June 30, 2012 was $5.6 million compared to $5.6 million for the second quarter of 2011. Total gross profit for our TechXtend segment was $1.7 million compared to $1.3 million in the second quarter of 2011, representing a 34% increase. The increase in gross profit in the TechXtend segment was mainly a result of the increased sales volume. Total gross profit for our Lifeboat segment was $3.8 million compared to $4.3 million in the second quarter of 2011, representing an 11% decrease. The decrease in gross profit for the Lifeboat segment was mainly due to increased competitive pricing pressure within this segment and lower vendor rebate attainments. Vendor rebates and discounts for the quarter ended June 30, 2012 amounted to $0.4 million compared to $0.8 million for the second quarter of 2011. Vendor rebates are dependent on reaching certain targets set by our vendors. Vendors have been periodically substantially increasing their target revenues for rebate eligibility. Therefore, despite our increasing revenue, vendor rebates have declined.

 



 

Total gross profit, as a percentage of net sales, for the second quarter of 2012 was 8.1%, compared to 9.2% in the second quarter of 2011.

 

The attainment of gross profit dollars and the decrease in gross profit margins as a percentage of net sales were primarily caused by the increased competitive pricing pressure in both segments and by winning several large bids based on aggressive pricing, which we plan to continue.

 

Total selling, general, and administrative (“SG&A”) expenses for the second quarter of 2012 were $3.5 million compared to $3.6 million for the second quarter of 2011, which was mainly the result of lower stock compensation and bad debt expense compared to 2011. As a percentage of net sales, SG&A expenses for the second quarter of 2012 were 5.1% compared to 6.0% for the second quarter of 2011.

 

On July 24, 2012, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable August 17, 2012 to shareholders of record on August 7, 2012.

 

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 Technologies, DataCore, Datawatch, Dell, Doyenz, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, Oracle, Quest Software, SolarWinds, Sophos/Astaro, StorageCraft Technology, TechSmith, Veeam, 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

(In thousands, except share  and per share amounts)

 

 

 

June 30,
2012

 

December 31,
2011

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

7,237

 

$

9,202

 

Marketable securities

 

5,572

 

5,375

 

Accounts receivable, net

 

50,369

 

47,066

 

Inventory - finished goods

 

1,307

 

1,240

 

Prepaid expenses and other current assets

 

1,256

 

1,997

 

Deferred income taxes

 

347

 

329

 

Total current assets

 

66,088

 

65,209

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

370

 

458

 

Accounts receivable long-term

 

9,551

 

8,889

 

Other assets

 

74

 

54

 

Deferred income taxes

 

250

 

251

 

 

 

 

 

 

 

Total assets

 

$

76,333

 

$

74,861

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

45,750

 

$

45,796

 

Current portion- capital lease obligation

 

83

 

76

 

Total current liabilities

 

45,833

 

45,872

 

 

 

 

 

 

 

Long term portion- capital lease obligation

 

14

 

55

 

Total liabilities

 

45,847

 

45,927

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,711,867 and 4,679,878 shares outstanding, respectively

 

53

 

53

 

Additional paid-in capital

 

27,453

 

26,725

 

Treasury stock, at cost, 572,633 and 604,622 shares, respectively

 

(5,012

)

(4,991

)

Retained earnings

 

7,665

 

6,818

 

Accumulated other comprehensive income

 

327

 

329

 

Total stockholders’ equity

 

30,486

 

28,934

 

Total liabilities and stockholders’ equity

 

$

76,333

 

$

74,861

 

 



 

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,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$

102,850

 

$

88,502

 

$

53,548

 

$

48,951

 

TechXtend segment (formerly Programmer’s Paradise segment)

 

33,226

 

23,708

 

15,621

 

11,710

 

Total Revenue

 

136,076

 

112,210

 

69,169

 

60,661

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

95,221

 

80,790

 

49,704

 

44,653

 

TechXtend segment (formerly Programmer’s Paradise segment)

 

29,698

 

20,994

 

13,875

 

10,407

 

Total Cost of sales

 

124,919

 

101,784

 

63,579

 

55,060

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

11,157

 

10,426

 

5,590

 

5,601

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling costs

 

3,919

 

3,728

 

1,947

 

1,892

 

Stock based compensation

 

463

 

589

 

231

 

300

 

Other general and administrative expenses

 

3,156

 

2,853

 

1,373

 

1,448

 

Total Selling, general and administrative expenses

 

7,538

 

7,170

 

3,551

 

3,640

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

3,619

 

3,256

 

2,039

 

1,961

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

254

 

172

 

130

 

86

 

Realized foreign exchange gain

 

1

 

1

 

 

1

 

Income before income tax provision

 

3,874

 

3,429

 

2,169

 

2,048

 

Provision for income taxes

 

1,541

 

1,358

 

865

 

820

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,333

 

$

2,071

 

$

1,304

 

$

1,228

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.52

 

$

0.47

 

$

0.29

 

$

0.28

 

Net income per common share - Diluted

 

$

0.50

 

$

0.45

 

$

0.28

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

4,449

 

4,414

 

4,471

 

4,414

 

Weighted average common shares outstanding - Diluted

 

4,632

 

4,647

 

4,656

 

4,645