Exhibit 99.1

 

 

Wayside Technology Group, Inc. Reports 2014 Third Quarter Results, Declares Quarterly Dividend and Names F. Duffield Meyercord as Lead Director

 

 

 

Q3 2014:

 

Revenue:

 

$90.5 million

 

Income from operations:

 

$1.9 million

 

Net income:

 

$1.4 million

 

Diluted earnings per share:

 

$0.29 per share

 

 

Dividend declared - $0.17 per share

 

SHREWSBURY, NJ, October 30, 2014 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the third quarter ended September 30, 2014.  The results will be discussed in a conference call to be held on Friday, October 31, 2014 at 10:00 a.m. EDT.  The dial-in telephone number is (866) 847-7864 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 Q3 2014. Overall, revenue increased 28% to a record $90.5 million and income from operations increased 6% over the same period last year,” said Simon F. Nynens, Chairman and Chief Executive Officer.

 

Cash and long term receivables amounted to $26.4 million, representing 68% of equity as of September 30, 2014. Working capital amounted to $27.3 million, representing 70% of equity as of September 30, 2014.

 

Net sales for the third quarter ended September 30, 2014 increased 28% or $20.0 million to $90.5 million compared to $70.5 million for the same period in 2013. Total sales for the third quarter of 2014 for our Lifeboat Distribution segment were $77.4 million compared to $56.9 million in the third quarter of 2014, representing an increase of $20.5 million or 36%. Total sales for the third quarter of 2014 for our TechXtend segment were $13.1 million compared to $13.6 million in the third quarter of 2013, representing a decrease of $0.5 million or 4%.

 

The 36% 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, product mix and the addition of several key product lines. The 4% decrease in net sales in the TechXtend segment was primarily due to a decrease in extended payment terms sales transactions as compared to the same period in 2013.

 

Gross Profit for the third quarter ended September 30, 2014 was $6.2 million, a 17% increase as compared to $5.3 million for the third quarter of 2013. Gross profit for our Lifeboat segment in the third quarter of 2014 was $4.7 million compared to $3.8 million for the third quarter of 2013, representing a 23% increase. Gross profit for our TechXtend segment was essentially flat at $1.4 million in the third quarter of 2014 and 2013.

 

Gross profit margin (gross profit as a percentage of net sales) for the third quarter ended September 30, 2014 was 6.8% compared to 7.5% for the third quarter of 2013. Gross profit margin for the nine

 



 

months ended September 30, 2014 was 7.2% compared to 7.9% in the same period in 2013. Gross profit margin for our Lifeboat segment for the third quarter of 2014 was 6.1% compared to 6.8% for the third quarter of 2013. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by competitive pricing pressures and product mix. Gross profit margin for our TechXtend segment for the third quarter of 2014 was 10.9% compared to 10.4% for the third quarter of 2013, due primarily to a decline in extended payment terms sales transactions in the third quarter of 2014 as compared to the same period in 2013.

 

Total selling, general, and administrative (“SG&A”) expenses for the third quarter of 2014 were $4.3 million compared to $3.5 million for the third quarter of 2013. This increase is primarily the result of an increase in employee and employee related expenses (salaries, commissions, bonus accruals, benefits and severance expenses of $0.3 million) and occupancy expenses in 2014 compared to 2013.

 

For the three months ended September 30, 2014, the Company recorded a provision for income taxes of $0.6 million or 31.6% of income, compared to $0.6 million or 30.5% of income for the same period in 2013.

 

Net income and diluted earnings per share for the third quarter of 2014 were $1.4 million and $0.29, respectively, compared to $1.3 million and $0.29, respectively, for the third quarter of 2013.

 

On October 29, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable November 17, 2014 to shareholders of record on November 10, 2014.

 

In light of the continued growth of the business and the important strategic determinations undertaken by the Board of Directors, on October 29, 2014, the Board, recognizing that the Company’s Chairman, President and Chief Executive Officer roles are unified and filled by Simon Nynens, decided to name a lead director from among its independent directors and to clearly define the lead director’s role and responsibilities.  The Board named F. Duffield Meyercord as its lead director.  The Board believes that this action is consistent with best corporate practices, enhancing both transparency of Board actions and Board independence.

 

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, 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)

 

 

 

September 30,
2014

 

December 31,
2013

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

15,606

 

$

19,609

 

Accounts receivable, net

 

60,721

 

60,796

 

Inventory, net

 

1,414

 

1,315

 

Prepaid expenses and other current assets

 

845

 

2,117

 

Deferred income taxes

 

270

 

218

 

Total current assets

 

78,856

 

84,055

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

355

 

324

 

Accounts receivable long-term

 

10,834

 

10,006

 

Other assets

 

163

 

159

 

Deferred income taxes

 

216

 

216

 

 

 

 

 

 

 

Total assets

 

$

90,424

 

$

94,760

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

51,621

 

$

60,039

 

Total current liabilities

 

51,621

 

60,039

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,881,523 and 4,653,293 shares outstanding , respectively

 

53

 

53

 

Additional paid-in capital

 

30,716

 

28,791

 

Treasury stock, at cost, 402,977 and 631,207 shares, respectively

 

(6,007

)

(7,017

)

Retained earnings

 

14,199

 

12,695

 

Accumulated other comprehensive (loss) income

 

(158

)

199

 

Total stockholders’ equity

 

38,803

 

34,721

 

Total liabilities and stockholders’ equity

 

$

90,424

 

$

94,760

 

 



 

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,

 

 

 

2014

 

2013

 

2014

 

2013

 

Revenues

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$

206,655

 

$

171,949

 

$

77,416

 

$

56,871

 

TechXtend segment

 

39,980

 

38,588

 

13,089

 

13,591

 

Total Revenue

 

246,635

 

210,537

 

90,505

 

70,462

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

193,180

 

159,820

 

72,670

 

53,025

 

TechXtend segment

 

35,602

 

34,174

 

11,659

 

12,172

 

Total Cost of sales

 

228,782

 

193,994

 

84,329

 

65,197

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

13,475

 

12,129

 

4,746

 

3,846

 

TechXtend segment

 

4,378

 

4,414

 

1,430

 

1,419

 

Total Gross Profit

 

17,853

 

16,543

 

6,176

 

5,265

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling costs

 

6,453

 

5,835

 

2,379

 

1,830

 

Stock based compensation

 

853

 

830

 

278

 

278

 

Other general and administrative expenses

 

4,987

 

4,546

 

1,634

 

1,372

 

Total Selling, general and administrative expenses

 

12,293

 

11,211

 

4,291

 

3,480

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

5,560

 

5,332

 

1,885

 

1,785

 

 

 

 

 

 

 

 

 

 

 

Interest, net

 

375

 

416

 

121

 

140

 

Foreign currency transaction gain (loss)

 

(8

)

10

 

(4

)

(11

)

Income before income tax provision

 

5,927

 

5,758

 

2,002

 

1,914

 

Provision for income taxes

 

2,016

 

1,868

 

632

 

584

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,911

 

$

3,890

 

$

1,370

 

$

1,330

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.84

 

$

0.87

 

$

0.29

 

$

0.30

 

Net income per common share - Diluted

 

$

0.83

 

$

0.85

 

$

0.29

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

4,639

 

4,457

 

4,716

 

4,442

 

Weighted average common shares outstanding - Diluted

 

4,685

 

4,568

 

4,736

 

4,551

 

 

 

 

 

 

 

 

 

 

 

Dividends paid per common share

 

$

0.51

 

$

0.48

 

$

0.17

 

$

0.16