Exhibit 99.1

 

GRAPHIC

Company Contact:

Tom Flaherty

Chief Financial Officer

Wayside Technology Group, Inc.

(732) 389-0932

 

tom.flaherty@waysidetechnology.com

 

WAYSIDE TECHNOLOGY GROUP, INC. REPORTS THIRD QUARTER 2012 RESULTS

AND DECLARES QUARTERLY DIVIDEND

 

·                  Revenue: $75.5 million

 

·                  Income from operations $2.1 million

 

·                  $.16 quarterly dividend declared

 

SHREWSBURY, NJ, October 25, 2012 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2012.  The results will be discussed in a conference call to be held on Friday, October 26, 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 $15.3 million, representing 49% of equity as of September 30, 2012. Working capital amounted to $20.5 million, representing 66% of equity as of September 30, 2012.

 

Net sales for the third quarter ended September 30, 2012 increased 19% or $11.8 million to $75.5 million compared to $63.7 million for the same period in 2011.  Net sales for the third quarter of 2012 for our Lifeboat Distribution segment were $56.0 million compared to $49.1 million in the third quarter of 2011, representing an increase of $6.9 million or 14%.  Net sales for the third quarter of 2012 for our TechXtend segment were $19.5 million compared to $14.6 million in the third quarter of 2011, representing an increase of $4.9 million or 34%.

 

“The third quarter of 2012 has been our best quarter YTD in terms of revenues, gross profit, income from operations and net income.  Our TechXtend division performed especially well in Q3 with our Lifeboat Distribution segment delivering solid results,” said Simon F. Nynens, Chairman and Chief Executive Officer. “We continued to increase our market share and grow our service offerings.”

 

The 19% increase in net sales in the third quarter of 2012 compared to 2011 was mainly a result of strengthening of our account penetration, our continued focus on the expanding virtual infrastructure-centric business, our solution focus selling and the addition of several key product lines.

 

Gross Profit for the third quarter ended September 30, 2012 was $5.7 million, a 1% decrease as compared to $5.8 million for the third quarter of 2011.  Gross profit for our Lifeboat Distribution segment for the third quarter of 2012 was $3.7 million compared to $4.1 million in the third quarter of 2011, representing a 10% decrease.  The decrease in gross profit for the Lifeboat Distribution segment was due to lower vendor rebate attainment and competitive pricing pressure within this segment.  Gross profit for our TechXtend segment was $2.0 million compared to $1.7 million in the third quarter of 2011, representing a 21% increase.  The increase in gross profit in the TechXtend segment was the result of the increased sales volume, at a lower gross margin as compared to 2011 and lower vendor

 



 

rebates.  Vendor rebates and discounts for the quarter ended September 30, 2012 amounted to $0.5 million compared to $0.7 million for the third 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.

 

Gross profit margin (gross profit as a percentage of net sales) for the third quarter ended September 30, 2012 was 7.5% compared to 9.0% for the third 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 and decrease in rebates 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 third quarter of 2012 were $3.6 million compared to $3.5 million for the third quarter of 2011, which was mainly the result of an increase in sales commissions for our TechXtend division, and the addition of employees in sales, finance and operations to support business growth.  As a percentage of net sales, SG&A expenses for third quarter of 2012 were 4.8% compared to 5.4% for the third quarter of 2011.

 

On October 23, 2012, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable November 16, 2012 to shareholders of record on November 6, 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, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, Quest Software, SolarWinds, Sophos, 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)

 

 

 

September 30,
2012

 

December 31,
2011

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

10,745

 

$

9,202

 

Marketable securities

 

4,585

 

5,375

 

Accounts receivable, net

 

49,051

 

47,066

 

Inventory - finished goods

 

1,509

 

1,240

 

Prepaid expenses and other current assets

 

1,115

 

1,997

 

Deferred income taxes

 

352

 

329

 

Total current assets

 

67,357

 

65,209

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

333

 

458

 

Accounts receivable long-term

 

10,183

 

8,889

 

Other assets

 

72

 

54

 

Deferred income taxes

 

201

 

251

 

 

 

 

 

 

 

Total assets

 

$

78,146

 

$

74,861

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

46,782

 

$

45,796

 

Current portion- capital lease obligation

 

76

 

76

 

Total current liabilities

 

46,858

 

45,872

 

 

 

 

 

 

 

Long term portion- capital lease obligation

 

 

55

 

Total liabilities

 

46,858

 

45,927

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,761,794 and 4,679,878 shares outstanding, respectively

 

53

 

53

 

Additional paid-in capital

 

27,431

 

26,725

 

Treasury stock, at cost, 522,706 and 604,622 shares, respectively

 

(4,994

)

(4,991

)

Retained earnings

 

8,265

 

6,818

 

Accumulated other comprehensive income

 

533

 

329

 

Total stockholders’ equity

 

31,288

 

28,934

 

Total liabilities and stockholders’ equity

 

$

78,146

 

$

74,861

 

 



 

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,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Lifeboat Distribution segment

 

$

158,838

 

$

137,621

 

$

55,989

 

$

49,118

 

TechXtend segment

 

52,772

 

38,330

 

19,545

 

14,623

 

Total Revenue

 

211,610

 

175,951

 

75,534

 

63,741

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Lifeboat Distribution segment

 

147,502

 

125,804

 

52,282

 

45,013

 

TechXtend segment

 

47,253

 

33,964

 

17,554

 

12,971

 

Total Cost of sales

 

194,755

 

159,768

 

69,836

 

57,984

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

16,855

 

16,183

 

5,698

 

5,757

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling costs

 

5,857

 

5,595

 

1,937

 

1,867

 

Stock based compensation

 

743

 

824

 

281

 

235

 

Other general and administrative expenses

 

4,548

 

4,216

 

1,393

 

1,363

 

Total Selling, general and administrative expenses

 

11,148

 

10,635

 

3,611

 

3,465

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

5,707

 

5,548

 

2,087

 

2,292

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

394

 

264

 

140

 

92

 

Realized foreign exchange gain

 

13

 

1

 

12

 

 

Income before income tax provision

 

6,114

 

5,813

 

2,239

 

2,384

 

Provision for income taxes

 

2,428

 

2,248

 

887

 

890

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,686

 

$

3,565

 

$

1,352

 

$

1,494

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.83

 

$

0.81

 

$

0.30

 

$

0.34

 

Net income per common share - Diluted

 

$

0.80

 

$

0.77

 

$

0.29

 

$

0.33

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

4,467

 

4,411

 

4,502

 

4,406

 

Weighted average common shares outstanding - Diluted

 

4,635

 

4,618

 

4,643

 

4,575