Exhibit 99.1

 

GRAPHIC

 

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