Exhibit 99.1

 

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 2013 RESULTS

AND DECLARES QUARTERLY DIVIDEND

 

 

Revenue:		$70.5 million
Income from operations:		$1.8 million
Net income:		$1.3 million
Diluted earnings per share:		$0.29 per share
Dividend declared:		$0.17 per share

 

SHREWSBURY, NJ, October 24, 2013 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2013. The results will be discussed in a conference call to be held on October 25, 2013 at 10:00 a.m. EDT. The dial-in telephone number is (866) 793-1341 and the pass code is “WSTG.”  This conference call will be webcast by NASDAQ OMX and can be accessed at Wayside Technology’s Web site at www.waysidetechnology.com/earnings-call.

 

“I am pleased to report solid financial results. Our Lifeboat Distribution segment continues to deliver year over year growth, while our TechXtend division was down as compared to an exceptionally strong quarter last year.” said Simon F. Nynens, Chairman and Chief Executive Officer.  “On a year to date basis, our results have essentially matched last year’s strong performance.  As a result, the Board of Directors has agreed to increase the dividend declared from $0.16 per share to $0.17 per share.  The Company has now paid dividends consecutively for over the last 40 quarters.”

 

Cash and cash equivalents amounted to $14.7 million, representing 45% of equity as of September 30, 2013. Working capital amounted to $24.4 million, representing 74% of equity as of September 30, 2013.

 

Net sales for the third quarter of 2013 decreased 7% or $5.1 million to $70.5 million compared to $75.5 million for the same period in 2012. Net sales for the third quarter of 2013 for our Lifeboat segment were $56.9 million compared to $56.0 million in the third quarter of 2012, representing an increase of $0.9 million or 2%. Net sales for the third quarter of 2013 for our TechXtend segment were $13.6 million compared to $19.5 million in the third quarter of 2012, representing a decrease of $5.9 million or 30%.

 

The increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration. The decrease in net sales in the TechXtend segment was primarily due to a decrease in large single sales transactions and a decrease in extended payment terms sales transactions as compared to exceptionally strong levels of large single sales transactions and extended payment terms sales transactions in the third quarter ended September 30, 2012.

 

Gross Profit for the third quarter ended September 30, 2013 was $5.3 million compared to $5.7 million for the third quarter of 2012. Total gross profit for our Lifeboat segment was $3.8 million compared to $3.7 million in the third quarter of 2012, representing a 4% increase. The increase in gross profit for the Lifeboat segment was due to higher sales volume in the current year. Total gross profit for our TechXtend segment was $1.4 million compared to $2.0 million in the third quarter of 2012, representing a 29% decrease. The decrease in gross profit in the TechXtend segment was the result of the decreased sales volume, including a decrease in large single sales transactions and a decrease in extended payment terms sales transactions. Vendor rebates and discounts for the quarter ended September 30, 2013 amounted to $0.3 million or 0.4% of net sales compared to $0.4 million or 0.5% of net sales for the third quarter of 2012.

 

 

Gross profit margin (gross profit as a percentage of net sales) for the third quarter of 2013 and 2012 was 7.5% for each period.

 

Total selling, general, and administrative (“SG&A”) expenses for the third quarter of 2013 were $3.5 million compared to $3.6 million for the third quarter of 2012, representing a decrease of $0.1 million or 4%. This decrease is primarily the result of a decrease in commissions and bonus for our TechXtend segment (which are based on gross profit and segment income). As a percentage of net sales, SG&A expenses for the third quarter of 2013 were 4.9% compared to 4.8% for the third quarter of 2012.

 

Net income and diluted earnings per share for the third quarter of 2013 were $1.3 million and $0.29, respectively, compared to $1.4 million and $0.29 in the prior year.

 

On October 23, 2013, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock, payable November 15, 2013 to shareholders of record on November 5, 2013.  This represents a $0.01 per share increase in the dividend, as compared to Q2-2013 and prior.

 

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 including Acronis, Bluebeam Software, CA Technologies, DataCore, Datawatch, Dell/Dell Software, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, SAP/Sybase, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Veeam Software, 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

(Amounts in thousands, except share and per share amounts)

 

		September 30, 2013			December 31, 2012
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	14,743		$	9,835
Marketable securities		—			4,411
Accounts receivable, net		49,855			61,388
Inventory - finished goods		1,210			1,717
Prepaid expenses and other current assets		1,591			1,281
Deferred income taxes		280			280
Total current assets		67,679			78,912
Equipment and leasehold improvements, net		303			375
Accounts receivable long-term		8,069			11,851
Other assets		159			71
Deferred income taxes		201			236
		$	76,411		$	91,445
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	43,311		$	59,265
Current portion- capital lease obligation		—			55
Total current liabilities		43,311			59,320
Commitments and contingencies
Stockholders’ equity
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,674,097 and 4,740,873 shares outstanding, respectively		53			53
Additional paid-in capital		28,456			27,712
Treasury stock, at cost, 610,403 and 543,627 shares, respectively		(6,743		)	(5,373		)
Retained earnings		10,973			9,316
Accumulated other comprehensive income		361			417
Total stockholders’ equity		33,100			32,125
		$	76,411		$	91,445

 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(Amounts In thousands, except per share data)

 

		Nine months ended						Three months ended
		September 30,						September 30,
		2013			2012			2013			2012
Revenues
Lifeboat segment		$	171,949		$	158,838		$	56,871		$	55,989
TechXtend segment		38,588			52,772			13,591			19,545
Total Revenue		210,537			211,610			70,462			75,534
Cost of sales
Lifeboat segment		159,820			147,502			53,025			52,282
TechXtend segment		34,174			47,253			12,172			17,554
Total Cost of sales		193,994			194,755			65,197			69,836
Gross Profit
Lifeboat segment		12,129			11,336			3,846			3,707
TechXtend segment		4,414			5,519			1,419			1,991
Total Gross Profit		16,543			16,855			5,265			5,698
Operating expenses
Selling costs		5,835			5,857			1,830			1,937
Stock based compensation		830			743			278			281
Other general and administrative expenses		4,546			4,548			1,372			1,393
Total Selling, general and administrative expenses		11,211			11,148			3,480			3,611
Income from operations		5,332			5,707			1,785			2,087
Interest, net		416			394			140			140
Foreign currency transaction gain (loss)		10			13			(11		)	12
Income before income tax provision		5,758			6,114			1,914			2,239
Provision for income taxes		1,868			2,428			584			887
Net income		$	3,890		$	3,686		$	1,330		$	1,352
Net income per common share - Basic		$	0.87		$	0.83		$	0.30		$	0.30
Net income per common share - Diluted		$	0.85		$	0.80		$	0.29		$	0.29
Weighted average common shares outstanding - Basic		4,457			4,467			4,442			4,502
Weighted average common shares outstanding - Diluted		4,568			4,635			4,551			4,643
Dividends paid per common share		$	0.48		$	0.48		$	0.16		$	0.16