Exhibit 99.1

 

 

Wayside Technology Group, Inc. Reports 2015 Second Quarter Results
and Declares Quarterly Dividend

 

		Q2 2015:
Revenue:		$92.0 million
Income from operations:		$2.0 million
Diluted earnings per share:		$0.29 per share

 

Dividend declared - $0.17 per share

 

SHREWSBURY, NJ, July 30, 2015 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the second quarter ended June 30, 2015. The results will be discussed in a conference call to be held on Friday, July 31, 2015 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.

 

Cash and long term receivables amounted to $24.4 million, representing 63% of equity as of June 30, 2015. Working capital amounted to $32.4 million, representing 84% of equity as of June 30, 2015.

 

“I am pleased to report solid financial results for Q2 2015. Overall, revenue increased 9% and Gross Profit increased 5% over the same period last year, due to continued strong performance from our Lifeboat Distribution team,” said Simon F. Nynens, Chairman and Chief Executive Officer. “I am also pleased to announce that we have recently opened a Lifeboat Distribution sales office in Mesa, Arizona to enhance customer service for our Mid-west and West Coast customers.”

 

Net sales for the second quarter ended June 30, 2015 increased 9% or $7.6 million to $92.0 million compared to $84.4 million for the same period in 2014. Total sales for the second quarter of 2015 for our Lifeboat Distribution segment were $81.3 million compared to $70.0 million in the second quarter of 2014, representing an increase of $11.3 million or 16%. Total sales for the second quarter of 2015 for our TechXtend segment were $10.7 million compared to $14.4 million in the second quarter of 2014, representing a decrease of $3.7 million or 26%.

 

The 16% increase in net sales for the Lifeboat Distribution segment was mainly a result of the addition of several key product lines and our ongoing strategy of strengthening of our account penetration. The 26% decrease in net sales in the TechXtend segment was primarily due to a decrease in both extended payment terms sales transactions and large transactions as compared to the second quarter ended June 30, 2015.

 

Gross Profit for the second quarter ended June 30, 2015 was $6.4 million, a 5% increase as compared to $6.1 million for the second quarter of 2014. Gross profit for our Lifeboat Distribution segment in the second quarter of 2015 was $5.1 million compared to $4.6 million for the second quarter of 2014, representing an 11% increase. The increase in gross profit for the Lifeboat Distribution segment was primarily due to higher sales volume. Gross profit for our TechXtend segment in the second quarter of 2015 was $1.3 million compared to $1.5 million for the second quarter of 2014, representing a 14% decrease. This decrease for the TechXtend segment was primarily due to the decreased sales volume in the current year.

 

Gross profit margin (gross profit as a percentage of net sales) for the second quarter ended June 30, 2015 was 7.0% compared to 7.3% for the second quarter of 2014. Gross profit margin for our Lifeboat Distribution segment for the second quarter of 2015 was 6.3% compared to 6.6% for the second quarter of

 

 

2014. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by a change in our product mix with an increase in sales of lower margin products. Gross profit margin for our TechXtend segment for the second quarter of 2015 was 12.3% compared to 10.6% for the second quarter of 2014.  The increase in gross profit margin for the TechXtend segment was primarily caused by the decrease in larger extended payment term sales transactions which typically carry lower margins.

 

Total selling, general, and administrative (“SG&A”) expenses for the second quarter of 2015 were $4.4 million compared to $4.0 million for the second quarter of 2014, representing an increase of $0.5 million or 12%. This increase is primarily the result of an increase in sales related employee and employee related expenses. A large part of this increase is due to us hiring and creating a field sales team and a professional services team. We expect these investments to support and accelerate future sales and gross margin growth. As a percentage of net sales, SG&A expenses for the second quarter of 2015 were 4.8% compared to 4.7% for the second quarter of 2014.

 

For the three months ended June 30, 2015, the Company recorded a provision for income taxes of $710,000 million or 34.3% of income, compared to $839,000 or 36.1% of income for the same period in 2014.

 

Net income and diluted earnings per share for the second quarter of 2015 were $1.4 million and $0.29, respectively, compared to $1.5 million and $0.31, respectively, for the second quarter of 2014.

 

On July 29, 2015, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable August 17, 2015 to shareholders of record on August 10, 2015.

 

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, ExaGrid Systems, Flexera Software, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, Samsung, SmartBear Software, SolarWinds, Sophos, StorageCraft Technology, TechSmith, 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 and Chief Accounting Officer

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, 2015			December 31, 2014
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	18,878		$	23,124
Accounts receivable, net		56,006			60,782
Inventory, net		2,360			1,491
Prepaid expenses and other current assets		1,247			933
Deferred income taxes		203			245
Total current assets		78,694			86,575
Equipment and leasehold improvements, net		396			412
Accounts receivable long-term		5,531			7,660
Other assets		104			152
Deferred income taxes		182			182
Total assets		$	84,907		$	94,981
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	46,309		$	55,414
Total current liabilities		46,309			55,414
Commitments and contingencies
Stockholders’ equity
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,806,311 and 4,890,756 shares outstanding in 2015 and 2014, respectively		53			53
Additional paid-in capital		31,744			31,013
Treasury stock, at cost, 478,189 and 393,744 shares, respectively		(8,431		)	(6,166		)
Retained earnings		16,252			15,225
Accumulated other comprehensive loss		(1,020		)	(558		)
Total stockholders’ equity		38,598			39,567
Total liabilities and stockholders’ equity		$	84,907		$	94,981

 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

 

		Six months ended						Three months ended
		June 30,						June 30,
		2015			2014			2015			2014
		(Unaudited)						(Unaudited)
Revenues
Lifeboat segment		$	164,206		$	129,237		$	81,260		$	69,979
TechXtend segment		20,456			26,892			10,710			14,420
Total Revenue		184,662			156,129			91,970			84,399
Cost of sales
Lifeboat segment		153,862			120,509			76,150			65,367
TechXtend segment		18,018			23,943			9,395			12,893
Total Cost of sales		171,880			144,452			85,545			78,260
Gross Profit		12,782			11,677			6,425			6,139
Operating expenses
Selling costs		4,913			4,074			2,542			2,049
Share- based compensation		534			575			267			252
Other general and administrative expenses		3,469			3,353			1,640			1,656
Total Selling, general and administrative expenses		8,916			8,002			4,449			3,957
Income from operations		3,866			3,675			1,976			2,182
Interest income, net		197			255			99			132
Foreign currency transaction (loss) gain		(5		)	(4		)	(4		)	8
Income before provision for income taxes		4,058			3,926			2,071			2,322
Provision for income taxes		1,394			1,384			710			839
Net income		$	2,664		$	2,542		$	1,361		$	1,483
Income per common share - Basic		$	0.57		$	0.55		$	0.29		$	0.32
Income per common share - Diluted		$	0.57		$	0.54		$	0.29		$	0.31
Weighted average common shares outstanding - Basic		4,665			4,601			4,640			4,664
Weighted average common shares outstanding - Diluted		4,689			4,665			4,663			4,719