ADDvantage Technologies Group, Inc. (NASDAQ:AEY),
today announced its financial results for the three and six month
periods ended March 31, 2017. The six month period includes the
financial results for the Company’s asset acquisition of Triton
Miami, Inc. (“Triton Datacom”) from October 14, 2016 to March 31,
2017.
“Total sales increased 7% to $11.3 million in
the second quarter of fiscal 2017, which includes sales from our
new subsidiary Triton Datacom, which is comprised of the Telco
assets we acquired in October 2016. Sales for the Cable TV segment
were down in the second quarter of fiscal 2017 due to lower demand
for new and refurbished equipment. However, this segment
remains profitable, and we believe that customer demand for this
segment will resume for the rest of fiscal 2017,” commented David
Humphrey, President and CEO of ADDvantage Technologies.
“Our Telco segment continued to benefit from the
contribution of Triton Datacom’s sales, which more than offset the
continued lower sales from the remaining portion of this segment,
Nave Communications. We continue to implement enhancements to
the sales and marketing for Nave Communications in order to drive
growth. Part of this effort includes the recent appointment
of Don Kinison as VP of Sales for the Company. Don has
tremendous telecommunications sales experience, and we believe he
will play a significant role in helping Nave Communications improve
their operating results as well as assisting in our Company’s
overall growth strategy,” continued Mr. Humphrey.
“We are excited by the possibilities that lie
ahead for our Company as we continue to build our business and
identify new market opportunities. While the challenges we have
faced in the market over the past few years still exist, we are
addressing these situations and believe we will be able to deliver
on our overall growth strategy,” concluded Mr. Humphrey.
Results for the three months ended March
31, 2017
Consolidated sales increased 7% to $11.3 million
for the three months ended March 31, 2017 compared with $10.6
million for the three months ended March 31, 2016. The
increase in sales was in the Telco segment of $1.8 million, offset
by a decrease in sales in the Cable TV segment of $1.0 million. The
decrease in Cable TV sales was due to a decrease in new equipment
sales and refurbished sales of $1.1 million and $0.2 million,
respectively, partially offset by an increase in repair sales of
$0.3 million. The increase in sales for the Telco segment was
primarily due to the acquisition of Triton Datacom in October 2016,
which offset the continued lower sales from the remaining portion
of this segment.
Consolidated operating, selling, general and
administrative expenses increased 13%, to $3.7 million for the
three months ended March 31, 2017 from $3.3 million for the same
period last year. This increase in expenses was due to the
Telco segment of $0.5 million, while the Cable TV segment decreased
by $0.1 million. The increase for the Telco segment is primarily
due to operating expenses of $0.6 million from Triton Datacom and
Triton Miami acquisition-related costs of $0.2 million. In
addition, for the three months ended March 31, 2016, the Company
recorded an expense of $0.2 million for the March 2016 earn-out
accrual related to the acquisition of Nave Communications
Company.
Net income for the three months ended March 31,
2017, was $11,000, or $0.00 per diluted share, compared with a net
income of $146,000, or $0.01 per diluted share, for the same period
of 2016.
Consolidated EBITDA for the three months ended
March 31, 2017 was $0.5 million compared with $0.6 million for the
same period ended March 31, 2016.
Results for the six months ended March
31, 2017
Consolidated sales for the six months ended
March 31, 2017 increased 24% to $23.4 million compared with $18.8
million for the same period ended March 31, 2016. The
increase in sales was in both the Cable TV and Telco segments of
$0.6 million and $4.0 million, respectively. Sales for the
Telco segment increased to $11.9 million for the six months ended
March 31, 2017 from $7.9 million for the same period last
year. The increase in Telco equipment sales was primarily due
to Triton Datacom on October 14, 2016, which offset the continued
lower sales from the remaining portion of this segment.
Consolidated operating, selling, general and
administrative expenses increased 23%, to $7.3 million for the six
months ended March 31, 2017 from $5.9 million for the same period
last year. This increase in expenses was due to the Telco
segment of $1.4 million, while the Cable TV segment was relatively
flat.
Net income for the six month period ended March
31, 2017 was $228,000, or $0.02 per diluted share, compared with
$170,000, or $0.02 per diluted share, for the same period of
2016.
Consolidated EBITDA for the six months ended
March 31, 2017 was $1.4 million compared with $1.0 million for the
same period ended March 31, 2016.
Cash and cash equivalents were $3.9 million as
of March 31, 2017, compared with $4.5 million as of September 30,
2016. The Company generated $1.9 million of cash from
operations for the six months ended March 31, 2017. As of
March 31, 2017, the Company had inventory of $22.1 million compared
with $21.5 million as of September 30, 2016.
Earnings Conference Call
The Company will host a conference call today,
May 15th, at 12:00 p.m. Eastern Time featuring remarks by David
Humphrey, President and Chief Executive Officer, Dave Chymiak,
Chief Technology Officer, and Scott Francis, Chief Financial
Officer.
The conference call will be available via
webcast and can be accessed through the Investor Relations section
of ADDvantage's website, www.addvantagetechnologies.com. Please
allow extra time prior to the call to visit the site and download
any necessary software to listen to the Internet broadcast. The
dial-in number for the conference call is 800-580-5706 (domestic)
or 913-312-9323 (international). All dial-in participants must use
the following code to access the call: 3101886. Please call at
least five minutes before the scheduled start time.
For interested individuals unable to join the
conference call, a replay of the call will be available through May
29, 2017 at 844-512-2921 (domestic) or 412-317-6671
(international). Participants must use the following code to access
the replay of the call: 3101886. An online archive of the
webcast will be available on the Company's website for 30 days
following the call.
About ADDvantage Technologies Group,
Inc.
ADDvantage Technologies Group, Inc. (NASDAQ:AEY)
supplies the cable television (Cable TV) and telecommunications
industries with a comprehensive line of new and used
system-critical network equipment and hardware from a broad range
of leading manufacturers. The equipment and hardware ADDvantage
distributes is used to acquire, distribute, and protect the
communications signals carried on fiber optic, coaxial cable and
wireless distribution systems, including television programming,
high-speed data (Internet) and telephony. In addition, ADDvantage
operates a national network of technical repair centers focused
primarily on Cable TV equipment and recycles surplus and obsolete
Cable TV and telecommunications equipment.
ADDvantage operates through its subsidiaries,
Tulsat, Tulsat-Atlanta, Tulsat-Arizona, Tulsat-Nebraska,
Tulsat-Tennessee, Tulsat-Texas, NCS Industries, ComTech Services,
Nave Communications and Triton Datacom. For more information,
please visit the corporate web site at
www.addvantagetechnologies.com.
The information in this announcement may include
forward-looking statements. All statements, other than
statements of historical facts, which address activities, events or
developments that the Company expects or anticipates will or may
occur in the future, are forward-looking statements. These
statements are subject to risks and uncertainties, which could
cause actual results and developments to differ materially from
these statements. A complete discussion of these risks and
uncertainties is contained in the Company’s reports and documents
filed from time to time with the Securities and Exchange
Commission.
Non-GAAP Financial
MeasuresEBITDA is a supplemental, non-GAAP financial
measure. EBITDA is defined as earnings before interest
expense, income taxes, depreciation and amortization.
In addition, EBITDA as presented excludes other income,
interest income and income from equity method investment.
Management believes providing EBITDA in this release is useful to
investors’ understanding and assessment of the Company’s ongoing
continuing operations and prospects for the future and it is a used
by the financial community to evaluate the market value of
companies considered to be in similar businesses. Since
EBITDA is not a measure of performance calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, net earnings as an indicator of operating
performance. EBITDA, as calculated in the table below, may
not be comparable to similarly titled measures employed by other
companies. In addition, EBITDA is not necessarily a measure
of our ability to fund our cash needs.
(Tables follow)
|
ADDVANTAGE TECHNOLOGIES GROUP, INC. |
CONSOLIDATED CONDENSED STATEMENTS OF INCOME |
(UNAUDITED) |
|
|
|
|
Three Months Ended March 31, |
Six Months Ended March 31, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Sales |
$ |
11,294,756 |
|
$ |
10,587,187 |
|
$ |
23,390,582 |
|
$ |
18,836,855 |
|
Cost of sales |
|
7,530,327 |
|
|
7,002,575 |
|
|
15,602,524 |
|
|
12,486,863 |
|
Gross profit |
|
3,764,429 |
|
|
3,584,612 |
|
|
7,788,058 |
|
|
6,349,992 |
|
Operating, selling,
general and administrative expenses |
|
3,677,425 |
|
|
3,256,403 |
|
|
7,274,249 |
|
|
5,925,028 |
|
Income from
operations |
|
87,004 |
|
|
328,209 |
|
|
513,809 |
|
|
424,964 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Other
income |
|
– |
|
|
109,554 |
|
|
– |
|
|
109,554 |
|
Interest
income |
|
– |
|
|
2,172 |
|
|
– |
|
|
2,172 |
|
Loss from
equity method investment |
|
– |
|
|
(140,998 |
) |
|
– |
|
|
(140,998 |
) |
Interest
expense |
|
(97,333 |
) |
|
(62,307 |
) |
|
(193,977 |
) |
|
(130,068 |
) |
Total other expense,
net |
|
(97,333 |
) |
|
(91,579 |
) |
|
(193,977 |
) |
|
(159,340 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
(10,329 |
) |
|
236,630 |
|
|
319,832 |
|
|
265,624 |
|
Provision (benefit) for
income taxes |
|
(21,000 |
) |
|
91,000 |
|
|
92,000 |
|
|
96,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
10,671 |
|
$ |
145,630 |
|
$ |
227,832 |
|
$ |
169,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.00 |
|
$ |
0.01 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Diluted |
$ |
0.00 |
|
$ |
0.01 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Shares used in per
share calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
10,153,571 |
|
|
10,092,319 |
|
|
10,143,903 |
|
|
10,080,729 |
|
Diluted |
|
10,156,426 |
|
|
10,092,319 |
|
|
10,145,112 |
|
|
10,080,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017 |
|
Three Months Ended March 31, 2016 |
|
Cable TV |
|
Telco |
|
Total |
|
Cable TV |
|
Telco |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations |
$ |
262,648 |
|
$ |
(175,644 |
) |
$ |
87,004 |
|
$ |
336,279 |
|
$ |
(8,070 |
) |
$ |
328,209 |
Depreciation |
|
74,894 |
|
|
39,205 |
|
|
114,099 |
|
|
80,802 |
|
|
27,367 |
|
|
108,169 |
Amortization |
|
− |
|
|
328,574 |
|
|
328,574 |
|
|
− |
|
|
206,451 |
|
|
206,451 |
EBITDA (a) |
$ |
337,542 |
|
$ |
192,135 |
|
$ |
529,677 |
|
$ |
417,081 |
|
$ |
225,748 |
|
$ |
642,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The Telco segment includes earn-out expenses
of $0.1 million and $0.2 million for the three months ended March
31, 2017 and 2016, respectively, related to the acquisition of
Triton Miami, Inc. and Nave Communications.
|
Six Months Ended March 31, 2017 |
|
Six Months Ended March 31, 2016 |
|
Cable TV |
|
Telco |
|
Total |
|
Cable TV |
|
Telco |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations |
$ |
1,171,631 |
|
$ |
(657,822 |
) |
$ |
513,809 |
|
$ |
453,119 |
|
$ |
(28,155 |
) |
$ |
424,964 |
Depreciation |
|
148,138 |
|
|
69,748 |
|
|
217,886 |
|
|
153,266 |
|
|
50,083 |
|
|
203,349 |
Amortization |
|
− |
|
|
640,560 |
|
|
640,560 |
|
|
− |
|
|
412,902 |
|
|
412,902 |
EBITDA (a) |
$ |
1,319,769 |
|
$ |
52,486 |
|
$ |
1,372,255 |
|
$ |
606,385 |
|
$ |
434,830 |
|
$ |
1,041,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The Telco segment for the six months ended
March 31, 2017 includes acquisition related costs of $0.2
million. The Telco segment includes earn-out expenses of $0.1
million and $0 for the six months ended March 31, 2017 and 2016,
respectively, related to the acquisition of Triton Miami, Inc. and
Nave Communications.
|
ADDVANTAGE TECHNOLOGIES GROUP, INC. |
CONSOLIDATED CONDENSED BALANCE SHEETS |
(UNAUDITED) |
|
|
|
|
March 31, 2017 |
|
|
September 30, 2016 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
3,885,330 |
|
|
$ |
4,508,126 |
|
Accounts
receivable, net of allowance for doubtful accounts of
$250,000 |
|
5,320,216 |
|
|
|
4,278,855 |
|
Income
tax receivable |
|
367,112 |
|
|
|
480,837 |
|
Inventories, net of allowance for excess and obsolete |
|
|
inventory
of $2,855,445 and $2,570,868, respectively |
|
22,118,030 |
|
|
|
21,524,919 |
|
Prepaid
expenses |
|
428,309 |
|
|
|
323,289 |
|
Total current
assets |
|
32,118,997 |
|
|
|
31,116,026 |
|
|
|
|
Property and equipment,
at cost |
|
11,402,171 |
|
|
|
11,203,865 |
|
Less: Accumulated
depreciation |
|
(5,210,987 |
) |
|
|
(4,993,102 |
) |
Net property and
equipment |
|
6,191,184 |
|
|
|
6,210,763 |
|
|
|
|
Investment in and loans
to equity method investee |
|
361,237 |
|
|
|
2,588,624 |
|
Intangibles, net of
accumulated amortization |
|
9,174,109 |
|
|
|
4,973,669 |
|
Goodwill |
|
6,031,511 |
|
|
|
3,910,089 |
|
Deferred income
taxes |
|
1,358,000 |
|
|
|
1,333,000 |
|
Other assets |
|
136,412 |
|
|
|
135,988 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
55,371,450 |
|
|
$ |
50,268,159 |
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
$ |
2,816,766 |
|
|
$ |
1,857,953 |
|
Accrued
expenses |
|
1,130,947 |
|
|
|
1,324,652 |
|
Notes
payable – current portion |
|
2,193,701 |
|
|
|
899,603 |
|
Other
current liabilities |
|
656,607 |
|
|
|
963,127 |
|
Total current
liabilities |
|
6,798,021 |
|
|
|
5,045,335 |
|
|
|
|
Notes
payable, less current portion |
|
5,179,127 |
|
|
|
3,466,358 |
|
Other
liabilities |
|
1,406,134 |
|
|
|
131,410 |
|
Total liabilities |
|
13,383,282 |
|
|
|
8,643,103 |
|
|
|
|
Shareholders’
equity: |
|
|
Common
stock, $.01 par value; 30,000,000 shares authorized;
10,692,902 and 10,634,893 shares issued, respectively;
10,192,244 and 10,134,235 shares outstanding, respectively |
|
106,929 |
|
|
|
106,349 |
|
Paid in
capital |
|
(4,782,091 |
) |
|
|
(4,916,791 |
) |
Retained
earnings |
|
47,663,344 |
|
|
|
47,435,512 |
|
Total
shareholders’ equity before treasury stock |
|
42,988,182 |
|
|
|
42,625,070 |
|
|
|
|
Less:
Treasury stock, 500,658 shares, at cost |
|
(1,000,014 |
) |
|
|
(1,000,014 |
) |
Total shareholders’
equity |
|
41,988,168 |
|
|
|
41,625,056 |
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
55,371,450 |
|
|
$ |
50,268,159 |
|
|
|
|
|
|
|
|
|
For further information
Company Contact:
Scott Francis (918) 251-9121
KCSA Strategic Communications
Garth Russell
(212) 896-1250
grussell@kcsa.com
ADDvantage Technologies (NASDAQ:AEY)
Historical Stock Chart
From Mar 2024 to Apr 2024
ADDvantage Technologies (NASDAQ:AEY)
Historical Stock Chart
From Apr 2023 to Apr 2024