Exhibit 99.1

 

Picture 1

 

Wayside Technology Group, Inc. Reports 2016 Third Quarter Results

and Declares Quarterly Dividend

 

 

 

 

 

 

Q3 2016:

Revenue:

 

$99.6 million

Income from operations:

 

$2.0 million

Net income:

 

$1.4 million

Diluted earnings per share:

 

$0.31 per share

 

Dividend declared - $0.17 per share

 

EATONTOWN, NJ, October 27, 2016 – Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the third quarter ended September 30, 2016.  The results will be discussed in a conference call to be held on Friday, October 28, 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.

 

“We are pleased to report solid quarterly results as compared to a strong Q3 2015.” said Simon F. Nynens, Chairman and Chief Executive Officer. “We see opportunities for growth in the remainder of this year. We bought back a total of approximately 86,000 shares in the third quarter of 2016 and we still have approximately 278,000 shares of Common Stock available for future repurchase.  We will continue to buy back shares according to our 10-b5 Stock Repurchase Plan.”

 

Net sales for the third quarter ended September 30, 2016 increased 2% or $1.9 million to $99.6 million compared to $97.7 million for the same period in 2015. Total sales for the third quarter of 2016 for our Lifeboat Distribution segment were $91.1 million compared to $86.1 million in the third quarter of 2015, representing an increase of $5.0 million or 6%. Total sales for the third quarter of 2016 for our TechXtend segment were $8.5 million compared to $11.6 million in the third quarter of 2015, representing a decrease of $3.1 million or 27%.

 

The 6% increase in net sales for the Lifeboat Distribution segment resulted mainly from the addition of several key product lines and our ongoing strategy of strengthening our account penetration. This was partially offset by lower sales to certain resellers, resulting from changes in product mix upon annual contract renewals. The 27% decrease in net sales in the TechXtend segment was primarily due variability in larger software sales transactions, including extended payment terms sales, when compared to the third quarter of the prior year.

 

Cash and long term receivables amounted to $27.8 million, representing 73% of equity as of September 30, 2016. Working capital amounted to $28.8 million, representing 76% of equity as of September 30, 2016.

 

Gross Profit for the third quarter ended September 30, 2016 was $6.4 million, a 7% decrease compared to $6.9 million for the third quarter of 2015. Gross profit for our Lifeboat segment in the third quarter of 2016 was $5.4 million compared to $5.5 million for the third quarter of 2015, representing a 1% decrease.  Gross profit for our TechXtend segment in the third quarter of 2016 was $0.9 million compared to $1.4 million for the third quarter of 2015, representing a 33% decrease.

 

Gross profit margin (gross profit as a percentage of net sales) for the third quarter ended September 30, 2016 was 6.4% compared to 7.0% for the third quarter of 2015. Gross profit margin for our Lifeboat Distribution segment for the third quarter of 2016 was 6.0% compared to 6.4% for the third quarter of 2015. The decrease in gross profit margin for the Lifeboat Distribution segment was largely the result of a program change by one of our main vendors, which caused

 

gross margins to decline by 1.8% for that line. Gross profit margin for our TechXtend segment for the third quarter of 2016 was 11.0% compared to 12.0% for the third quarter of 2015. The decrease in gross profit margin for the TechXtend segment was primarily caused by variability in gross profit margins on larger sales transactions, when compared to those in the same quarter last year.

 

Total selling, general, and administrative (“SG&A”) expenses for the third quarter of 2016 were $4.4 million compared to $4.6 million for the third quarter of 2015, representing a decrease of $0.3 million or 6%.  This decrease was primarily the result of lower bonus expense, partially offset by increased stock compensation and occupancy costs in 2016, compared to 2015. As a percentage of net sales, SG&A expenses for the third quarter of 2016 were 4.4% compared to 4.7% for the third quarter of 2015.

 

For the three months ended September 30, 2016, the Company recorded a provision for income taxes of $704,000 or 33.8% of income, compared to $805,000 or 34.1% of income for the same period in 2015.

 

Net income and diluted earnings per share for the third quarter of 2016 were $1.4 million and $0.31, respectively, compared to $1.6 million and $0.33, respectively, for the third quarter of 2015. 

 

On October 25, 2016, the Board of Directors declared a quarterly dividend of $.17 per share of common stock payable November 18, 2016 to shareholders of record on November 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, Micro Focus, 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:

Michael Vesey, Vice President and Chief Financial Officer

Wayside Technology Group, Inc.

(732) 389-0932

Michael.Vesey.@waysidetechnology.com

 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

    

September 30,

    

December 31,

 

 

 

2016

 

2015

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
20,958

 

$
23,823

 

Accounts receivable, net

 

 
62,160

 

 
58,965

 

Inventory, net

 

 
1,903

 

 
1,954

 

Prepaid expenses and other current assets

 

 
1,197

 

 
989

 

Deferred income taxes

 

 
253

 

 
260

 

Total current assets

 

 
86,471

 

 
85,991

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 
1,793

 

 
362

 

Accounts receivable long-term

 

 
6,797

 

 
7,386

 

Other assets

 

 
125

 

 
82

 

Deferred income taxes

 

 
236

 

 
261

 

 

 

 

 

 

 

 

 

Total assets

 

$
95,422

 

$
94,082

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$
57,643

 

$
55,423

 

Total current liabilities

 

 
57,643

 

 
55,423

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,658,320 and 4,700,812 shares, Respectively

 

 
53

 

 
53

 

Additional paid-in capital

 

 
32,666

 

 
32,540

 

Treasury stock, at cost, 626,180 and 583,688 shares, respectively

 

 
(12,751)

 

 
(10,296)

 

Retained earnings

 

 
19,322

 

 
17,813

 

Accumulated other comprehensive loss

 

 
(1,511)

 

 
(1,451)

 

Total stockholders’ equity

 

 
37,779

 

 
38,659

 

Total liabilities and stockholders’ equity

 

$
95,422

 

$
94,082

 

 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

( Amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

Three months ended

 

 

 

September 30,

 

September 30,

 

 

 

2016

    

2015

    

2016

    

2015

 

 

 

(Unaudited )

 

(Unaudited )

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$
267,113

 

$
250,287

 

$
91,114

 

$
86,082

 

TechXtend segment

 

 
31,054

 

 
32,027

 

 
8,472

 

 
11,571

 

Total Revenue

 

 
298,167

 

 
282,314

 

 
99,586

 

 
97,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

 
250,974

 

 
234,450

 

 
85,674

 

 
80,589

 

TechXtend segment

 

 
27,868

 

 
28,202

 

 
7,540

 

 
10,184

 

Total Cost of sales

 

 
278,842

 

 
262,652

 

 
93,214

 

 
90,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 
19,325

 

 
19,662

 

 
6,372

 

 
6,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling costs

 

 
6,995

 

 
7,484

 

 
2,336

 

 
2,572

 

Share- based compensation

 

 
1,168

 

 
797

 

 
329

 

 
263

 

Other general and administrative expenses

 

 
5,407

 

 
5,252

 

 
1,686

 

 
1,783

 

Total Selling, general and administrative expenses

 

 
13,570

 

 
13,533

 

 
4,351

 

 
4,618

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 
5,755

 

 
6,129

 

 
2,021

 

 
2,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net

 

 
183

 

 
297

 

 
58

 

 
100

 

Foreign currency translation

 

 
(1)

 

 
(9)

 

 
3

 

 
(4)

 

Income before provision for income taxes

 

 
5,937

 

 
6,417

 

 
2,082

 

 
2,358

 

Provision for income taxes

 

 
2,008

 

 
2,199

 

 
704

 

 
805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
3,929

 

$
4,218

 

$
1,378

 

$
1,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share - Basic

 

$
0.87

 

$
0.91

 

$
0.31

 

$
0.34

 

Income per common share - Diluted

 

$
0.86

 

$
0.90

 

$
0.31

 

$
0.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

 
4,537

 

 
4,652

 

 
4,507

 

 
4,624

 

Weighted average common shares outstanding - Diluted

 

 
4,548

 

 
4,673

 

 
4,518

 

 
4,643