Exhibit 99.1

 

Picture 1

 

Wayside Technology Group, Inc. Reports 2016 Second Quarter Results

and Declares Quarterly Dividend

 

 

 

 

 

 

Q2 2016:

Revenue:

 

$105.3 million

Income from operations:

 

$2.2 million

Net income:

 

$1.5 million

Diluted earnings per share:

 

$0.34 per share

 

Dividend declared - $0.17 per share

 

SHREWSBURY, NJ, July 28, 2016 – Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the second quarter ended June 30, 2016.  The results will be discussed in a conference call to be held on Friday, July 29, 2016 at 10:00 a.m. EDT.  The dial-in telephone number is (866)814-8482 and the pass code is “WSTG.”  This conference call will be webcast by NASDAQ OMX and can be accessed at Wayside Technology’s website at www.waysidetechnology.com/earnings-call.

“I am pleased to report solid financial results for Q2 2016 with both of our segments performing well. Overall, revenue increased 14% to a record $105.3 million and income from operations increased 14% over the same period last year,” said Simon F. Nynens, Chairman and Chief Executive Officer.

 

Net sales for the second quarter ended June 30, 2016 increased 14% or $13.3 million to a record $105.3 million compared to $92.0 million for the same period in 2015. Total sales for the second quarter of 2016 for our Lifeboat Distribution segment were $89.7 million compared to $81.3 million in the second quarter of 2015, representing an increase of $8.4 million or 10%. Total sales for the second quarter of 2016 for our TechXtend segment were $15.6 million compared to $10.7 million in the second quarter of 2015, representing an increase of $4.9 million or 46%.

 

The 10% 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. This was offset in part by lower sales to one of our key accounts. The 46% increase in net sales in the TechXtend segment was primarily due to an increase of $5.6 million in extended payment terms sales transactions as compared to the second quarter ended June 30, 2015.

 

Cash and long term receivables amounted to $30.5 million, representing 79% of equity as of June 30, 2016. Working capital amounted to $31.9 million, representing 83% of equity as of June 30, 2016.

 

Gross Profit for the second quarter ended June 30, 2016 was $7.0 million, a 9% increase compared to $6.4 million for the second quarter of 2015. Gross profit for our Lifeboat segment in the second quarter of 2016 was approximately $5.5 million compared to approximately $5.1 million for the second quarter of 2015, representing a 9% increase.  Gross profit for our TechXtend segment in the second quarter of 2016 was $1.5 million compared to $1.3 million for the second quarter of 2015, representing a 10% increase.

 

Gross profit margin (gross profit as a percentage of net sales) for the second quarter ended June 30, 2016 was 6.7% compared to 7.0% for the second quarter of 2015.  Gross profit margin for our Lifeboat Distribution segment for the second quarter of 2016 was 6.2% compared to 6.3% for the second quarter of 2015. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by a program change by one of our main vendors, causing gross margins to decline by 1.8% for that line. Gross profit margin for our TechXtend segment for the second quarter of 2016 was 9.3% compared to 12.3% for the second quarter of 2015. The decrease in gross profit margin for the

 

TechXtend segment was primarily caused by the increase in extended payment sales transaction which carry lower margins.

 

Total selling, general, and administrative (“SG&A”) expenses for the second quarter of 2016 were $4.8 million compared to $4.4 million for the second quarter of 2015, representing an increase of $0.4 million or 7%.  This increase is primarily the result of an increase in stock compensation and amounts accrued for bonus expense in 2016 compared to 2015. As a percentage of net sales, SG&A expenses for the second quarter of 2016 were 4.5% compared to 4.8% for the second quarter of 2015.

 

For the three months ended June 30, 2016, the Company recorded a provision for income taxes of $775,000 or 33.7% of income, compared to $710,000 or 34.3% of income for the same period in 2015.

 

Net income and diluted earnings per share for the second quarter of 2016 were $1.5 million and $0.34, respectively, compared to $1.4 million and $0.29, respectively, for the second quarter of 2015. 

 

On July 27, 2016, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable August 18, 2016 to shareholders of record on August 8, 2016.

 

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 Bluebeam Software, CA Technologies, Dell/Dell Software, ExaGrid Systems, Flexera Software, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microfocus, Microsoft, Mindjet, Samsung, SmartBear Software, SolarWinds, Sophos, StorageCraft Technology, Super Micro Computer, Inc., 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,

    

December 31,

 

 

 

2016

 

2015

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
24,576

 

$
23,823

 

Accounts receivable, net

 

 
61,763

 

 
58,965

 

Inventory, net

 

 
2,133

 

 
1,954

 

Prepaid expenses and other current assets

 

 
1,270

 

 
989

 

Deferred income taxes

 

 
243

 

 
260

 

Total current assets

 

 
89,985

 

 
85,991

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 
466

 

 
362

 

Accounts receivable long-term

 

 
5,908

 

 
7,386

 

Other assets

 

 
132

 

 
82

 

Deferred income taxes

 

 
244

 

 
261

 

 

 

 

 

 

 

 

 

Total assets

 

$
96,735

 

$
94,082

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$
58,114

 

$
55,423

 

Total current liabilities

 

 
58,114

 

 
55,423

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,748,553 and 4,700,812 shares, Respectively

 

 
53

 

 
53

 

Additional paid-in capital

 

 
32,320

 

 
32,540

 

Treasury stock, at cost, 535,947 and 583,688 shares, respectively

 

 
(11,118)

 

 
(10,296)

 

Retained earnings

 

 
18,747

 

 
17,813

 

Accumulated other comprehensive loss

 

 
(1,381)

 

 
(1,451)

 

Total stockholders’ equity

 

 
38,621

 

 
38,659

 

Total liabilities and stockholders’ equity

 

$
96,735

 

$
94,082

 

 

 

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,

 

 

 

2016

    

2015

    

2016

    

2015

 

 

 

(Unaudited )

 

(Unaudited )

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$
175,999

 

$
164,206

 

$
89,659

 

$
81,260

 

TechXtend segment

 

 
22,581

 

 
20,456

 

 
15,598

 

 
10,710

 

Total Revenue

 

 
198,580

 

 
184,662

 

 
105,257

 

 
91,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

 
165,300

 

 
153,862

 

 
84,112

 

 
76,150

 

TechXtend segment

 

 
20,328

 

 
18,018

 

 
14,145

 

 
9,395

 

Total Cost of sales

 

 
185,628

 

 
171,880

 

 
98,257

 

 
85,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 
12,952

 

 
12,782

 

 
7,000

 

 
6,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling costs

 

 
4,658

 

 
4,913

 

 
2,336

 

 
2,542

 

Share- based compensation

 

 
839

 

 
534

 

 
440

 

 
267

 

Other general and administrative expenses

 

 
3,719

 

 
3,469

 

 
1,980

 

 
1,640

 

Total Selling, general and administrative expenses

 

 
9,216

 

 
8,916

 

 
4,756

 

 
4,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 
3,736

 

 
3,866

 

 
2,244

 

 
1,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net

 

 
125

 

 
197

 

 
61

 

 
99

 

Foreign currency translation

 

 
(3)

 

 
(5)

 

 
(3)

 

 
(4)

 

Income before provision for income taxes

 

 
3,858

 

 
4,058

 

 
2,302

 

 
2,071

 

Provision for income taxes

 

 
1,303

 

 
1,394

 

 
775

 

 
710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
2,555

 

$
2,664

 

$
1,527

 

$
1,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share - Basic

 

$
0.56

 

$
0.57

 

$
0.34

 

$
0.29

 

Income per common share - Diluted

 

$
0.56

 

$
0.57

 

$
0.34

 

$
0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

 
4,545

 

 
4,665

 

 
4,524

 

 
4,640

 

Weighted average common shares outstanding - Diluted

 

 
4,557

 

 
4,689

 

 
4,535

 

 
4,663