Exhibit 99.1

 

 

Wayside Technology Group, Inc. Reports 2014 Second Quarter Results

and Declares Quarterly Dividend

 

	Q2 2014:
Revenue:	$84.4 million
Income from operations:	$2.2 million
Net income:	$1.5 million
Diluted earnings per share:	$0.31 per share

 

Dividend declared - $0.17 per share

 

SHREWSBURY, NJ, July 24, 2014 – Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the second quarter ended June 30, 2014.  The results will be discussed in a conference call to be held on Friday, July 25, 2014 at 10:00 a.m. EST.  The dial-in telephone number is (866) 846-7864 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 for Q2 2014. Overall, revenue increased 14% and gross profit increased 3% over the same period last year,” said Simon F. Nynens, Chairman and Chief Executive Officer.

 

Cash and long term receivables amounted to $25.1 million, representing 66% of equity as of June 30, 2014. Working capital amounted to $27.2 million, representing 71% of equity as of June 30, 2014.

 

Net sales for the second quarter ended June 30, 2014 increased 14% or $10.3 million to $84.4 million compared to $74.1 million for the same period in 2013. Total sales for the second quarter of 2014 for our Lifeboat Distribution segment were $70.0 million compared to $61.2 million in the second quarter of 2013, representing an increase of $8.8 million or 14%. Total sales for the second quarter of 2014 for our TechXtend segment were $14.4 million compared to $12.9 million in the second quarter of 2013, representing an increase of $1.5 million or 12%.

 

The 14% increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration, our continued focus on the expanding virtual infrastructure-centric business and the addition of several key product lines. The 12% increase in net sales in the TechXtend segment was primarily due an increase in extended payment terms sales transactions as compared to the second quarter ended June 30, 2013.

 

Gross Profit for the second quarter ended June 30, 2014 was $6.1 million, a 3% increase as compared to $6.0 million for the second quarter of 2013. Gross profit for our Lifeboat segment in the second quarter of 2014 was $4.6 million compared to $4.5 million for the second quarter of 2013, representing a 2% increase. Gross profit for our TechXtend segment of $1.5 million in the second quarter of 2014 was essentially flat as compared to the second quarter of 2013.

 

Gross profit margin (gross profit as a percentage of net sales) for the second quarter ended June 30, 2014 was 7.3% compared to 8.1% for the second quarter of 2013. Gross profit margin for the six months ended June 30, 2014 was 7.5% compared to 8.1% in the same period in 2013. Gross profit margin for our Lifeboat segment for the second quarter of 2014 was 6.6% compared to 7.4% for the second quarter of 2013. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by competitive pricing pressure. Gross profit margin for our TechXtend segment for the second quarter of 2014 was 10.6% compared to 11.3% for the second quarter of 2013.  The decrease in gross profit margin for the TechXtend segment was primarily caused by the increase in larger extended payment term sales transactions which typically carry lower margins.

 

 

 

The Company monitors gross profits and gross profit margins carefully.  Price competition in our market persisted in 2014. We anticipate that margins, as well as discounts and rebates, will continue to be under pressure in the near future.

 

Total selling, general, and administrative (“SG&A”) expenses for the second quarter of 2014 were $4.0 million compared to $3.8 million for the second quarter of 2013.

 

For the three months ended June 30, 2014, the Company recorded a provision for income taxes of $839,000 or 36.1% of income, compared to $773,000 or 33.4% of income for the same period in 2013.

 

Net income and diluted earnings per share for the second quarter of 2014 were $1.5 million and $0.31, respectively, compared to $1.5 million and $0.34, respectively, for the second quarter of 2013.

 

On July 22, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable August 15, 2014 to shareholders of record on August 6, 2014.

 

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, Datawatch, Dell/Dell Software, Flexera Software, Hewlett Packard, Infragistics, Intel Software, JetBrains, Lenovo, Microsoft, Mindjet, Samsung, SAP/Sybase, SmartBear, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Unitrends, Veeam Software 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 —

 

 

 

Investor Relations Contact:

Kevin Scull, Vice President Accounting

Wayside Technology Group, Inc.

(732) 389-0932

kevin.scull@waysidetechnology.com

 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share amounts)
		June 30,			December 31,
		2014			2013
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	14,716		$	19,609
Accounts receivable, net		57,585			60,796
Inventory, net		1,221			1,315
Prepaid expenses and other current assets		974			2,117
Deferred income taxes		236			218
Total current assets		74,732			84,055
Equipment and leasehold improvements, net		328			324
Accounts receivable long-term		10,411			10,006
Other assets		162			159
Deferred income taxes		216			216
Total assets		$	85,849		$	94,760
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	47,493		$	60,039
Total current liabilities		47,493			60,039
Commitments and contingencies
Stockholders’ equity
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,873,507 and 4,653,293 shares outstanding , respectively		53			53
Additional paid-in capital		30,488			28,791
Treasury stock, at cost, 410,993 and 631,207 shares, respectively		(5,965		)	(7,017		)
Retained earnings		13,645			12,695
Accumulated other comprehensive income		135			199
Total stockholders’ equity		38,356			34,721
Total liabilities and stockholders’ equity		$	85,849		$	94,760

 

 

 

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,
		2014			2013			2014			2013
		(Unaudited)						(Unaudited)
Revenues
Lifeboat segment		$	129,237		$	115,078		$	69,979		$	61,209
TechXtend segment		26,892			24,997			14,420			12,886
Total Revenue		156,129			140,075			84,399			74,095
Cost of sales
Lifeboat segment		120,509			106,794			65,367			56,698
TechXtend segment		23,943			22,003			12,893			11,432
Total Cost of sales		144,452			128,797			78,260			68,130
Gross Profit		11,677			11,278			6,139			5,965
Operating expenses
Selling costs		4,074			4,004			2,049			2,010
Stock based compensation		575			551			252			280
Other general and administrative expenses		3,353			3,176			1,656			1,524
Total Selling, general and administrative expenses		8,002			7,731			3,957			3,814
Income from operations		3,675			3,547			2,182			2,151
Interest income, net		255			276			132			146
Foreign currency transaction (loss) gain		(4		)	21			8			16
Income before income tax provision		3,926			3,844			2,322			2,313
Provision for income taxes		1,384			1,284			839			773
Net income		$	2,542		$	2,560		$	1,483		$	1,540
Net income per common share - Basic		$	0.55		$	0.57		$	0.32		$	0.35
Net income per common share - Diluted		$	0.54		$	0.56		$	0.31		$	0.34
Weighted average common shares outstanding - Basic		4,601			4,464			4,664			4,451
Weighted average common shares outstanding - Diluted		4,665			4,578			4,719			4,557