|
|
Q3
2017: |
|
|
|
Revenue: |
|
$106.6 million |
Income from
operations: |
|
$1.8 million |
Net income: |
|
$1.3 million |
Diluted earnings per
share: |
|
$0.30 per share |
Dividend declared - $0.17 per share
Wayside Technology Group, Inc. (NASDAQ:WSTG) today announced
financial results for the third quarter ended September 30,
2017.
The results will be discussed in a
conference call to be held on Friday, October 27, 2017 at 10:00
a.m. EDT. The dial-in telephone number is (844) 683-0552 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/site/content/webcasts.
“Despite intense market competition, we
delivered satisfactory results. Net sales increased 7% and earnings
per share increased slightly to $0.30 per share for the quarter,”
said Simon F. Nynens, Chairman and Chief Executive Officer.
“On a year-to-date basis, our earnings per share are up $0.04 or
5%.
“I would also like to share that William Botti
has announced his intention to retire from his position as
Executive Vice President effective December 31, 2017. Bill will
continue in his current role as he transitions his responsibilities
to other team members. We would like to thank Bill for his
contributions during his tenure as a member of our team.”
Operating Results:
Net sales for the quarter ended September 30,
2017 increased 7% to $106.6 million compared to $99.6 million for
the same period in 2016 as growth in our Lifeboat Distribution
segment was offset by a decline in TechXtend net sales. Lifeboat
Distribution segment net sales for the quarter ended September 30,
2017 increased 10% to $100.2 million, compared to $91.1 million for
the same period in 2016. TechXtend segment net sales for the
quarter ended September 30, 2017 decreased 24% to $6.5 million,
compared to $8.5 million for the same period in 2016, due to a
decline in extended payment term transactions which typically vary
significantly from quarter to quarter based on the timing of IT
spending decisions by our larger customers.
Gross profit for the quarter ended September 30,
2017 decreased 2% to $6.2 million compared to $6.4 million for the
same period in 2016. Lifeboat Distribution segment gross profit for
the quarter ended September 30, 2017 and 2016 was consistent with
the prior year at $5.4 million. TechXtend segment gross profit for
the third quarter of 2017 decreased 11% to $0.8 million, compared
to $0.9 million in 2016.
Gross profit margin (gross profit as a
percentage of net sales) for the quarter ended September 30, 2017
decreased by 0.5 percentage points to 5.9%, compared to 6.4% for
the same period in 2016. Lifeboat Distribution segment gross profit
margin for the quarter ended September 30, 2017 decreased by 0.6
percentage points to 5.4%, compared to 6.0% for the same period
last year. TechXtend segment gross profit margin for the quarter
ended September 30, 2017 increased 1.8 percentage points to 12.8%,
compared to 11.0% for the same period in 2016.
Total selling, general, and administrative
(“SG&A”) expenses for the quarter ended September 30, 2017
increased 2% or $0.1 million over the same quarter last year to
$4.5 million. The increase in general and administrative expenses
is primarily due to increased employee related expenses. SG&A
expenses as a percentage of net sales were 4.2% in 2017 compared to
4.4% in 2016 due to the increase in net sales.
Net income for the quarter ended September 30,
2017 was $1.3 million. Diluted earnings per share for the quarter
ended September 30, 2017 increased 2% to $0.30, compared to $0.29,
for the same period in 2016, as restated to be presented on a
comparable basis with the current year (see explanatory note 1 in
the attached tables). The increase in earnings per share was due to
a lower number of weighted average diluted shares outstanding
resulting from repurchases of our common stock.
On October 24, 2017, the Board of Directors
declared a quarterly dividend of $0.17 per share of its common
stock payable November 17, 2017 to shareholders of record on
November 10, 2017.
For the quarter ended September 30, 2017, the
Company recorded a provision for income taxes of $0.7 million.
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, Bitdefender,
Bluebeam Software, Dell/Dell Software, erwin, 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) 389-0932michael.vesey@waysidetechnology.com
|
WAYSIDE TECHNOLOGY GROUP, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Amounts in thousands, except share and per
share amounts) |
|
|
September 30,2017 |
|
December 31,2016 |
|
(unaudited) |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
4,065 |
|
|
$ |
13,524 |
|
Accounts receivable, net of allowances of $2,641 and $2,293,
respectively |
|
63,683 |
|
|
|
83,317 |
|
Inventory, net |
|
2,403 |
|
|
|
2,324 |
|
Vendor prepayments |
|
7,471 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
788 |
|
|
|
948 |
|
Total
current assets |
|
78,410 |
|
|
|
100,113 |
|
|
|
|
|
Equipment
and leasehold improvements, net |
|
1,924 |
|
|
|
1,937 |
|
Accounts
receivable long-term |
|
10,243 |
|
|
|
11,119 |
|
Other
assets |
|
204 |
|
|
|
113 |
|
Deferred
income taxes |
|
235 |
|
|
|
416 |
|
|
|
|
|
Total
assets |
$ |
91,016 |
|
|
$ |
113,698 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities |
|
|
|
Accounts payable and accrued expenses |
$ |
50,922 |
|
|
$ |
76,087 |
|
Revolving credit facility |
|
2,000 |
|
|
|
- |
|
Total
current liabilities |
|
52,922 |
|
|
|
76,087 |
|
|
|
|
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
Common stock, $.01 par value; 10,000,000 shares authorized,
5,284,500 shares |
|
|
issued, and 4,681,964 and 4,555,434 shares outstanding,
respectively |
|
53 |
|
|
|
53 |
|
Additional paid-in capital |
|
30,694 |
|
|
|
30,683 |
|
Treasury stock, at cost, 802,536 and 729,066 shares,
respectively |
|
(13,855 |
) |
|
|
(12,029 |
) |
Retained earnings |
|
22,152 |
|
|
|
20,515 |
|
Accumulated other comprehensive loss |
|
(950 |
) |
|
|
(1,611 |
) |
Total
stockholders' equity |
|
38,094 |
|
|
|
37,611 |
|
Total
liabilities and stockholders' equity |
$ |
91,016 |
|
|
$ |
113,698 |
|
|
|
|
|
|
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, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(Unaudited) |
Revenues |
|
|
|
|
|
|
|
Lifeboat
segment |
$ |
300,344 |
|
$ |
267,113 |
|
|
$ |
100,188 |
|
$ |
91,114 |
TechXtend
segment |
|
22,079 |
|
|
31,054 |
|
|
|
6,458 |
|
|
8,472 |
Total
Revenue |
|
322,423 |
|
|
298,167 |
|
|
|
106,646 |
|
|
99,586 |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
|
Lifeboat
segment |
|
283,471 |
|
|
250,974 |
|
|
|
94,771 |
|
|
85,674 |
TechXtend
segment |
|
19,377 |
|
|
27,868 |
|
|
|
5,632 |
|
|
7,540 |
Total
Cost of sales |
|
302,848 |
|
|
278,842 |
|
|
|
100,403 |
|
|
93,214 |
|
|
|
|
|
|
|
|
Gross Profit |
|
19,575 |
|
|
19,325 |
|
|
|
6,243 |
|
|
6,372 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Selling
costs |
|
7,504 |
|
|
6,995 |
|
|
|
2,339 |
|
|
2,336 |
Share-
based compensation |
|
1,026 |
|
|
1,168 |
|
|
|
323 |
|
|
329 |
Other
general and administrative expenses |
|
5,731 |
|
|
5,407 |
|
|
|
1,789 |
|
|
1,686 |
Total
Selling, general and administrative expenses |
|
14,261 |
|
|
13,570 |
|
|
|
4,451 |
|
|
4,351 |
|
|
|
|
|
|
|
|
Income from
operations |
|
5,314 |
|
|
5,755 |
|
|
|
1,792 |
|
|
2,021 |
|
|
|
|
|
|
|
|
Interest, net |
|
466 |
|
|
183 |
|
|
|
145 |
|
|
58 |
Foreign currency
transaction gain (loss) |
|
22 |
|
|
(1 |
) |
|
|
73 |
|
|
3 |
Income before provision
for income taxes |
|
5,802 |
|
|
5,937 |
|
|
|
2,010 |
|
|
2,082 |
Provision for income
taxes |
|
1,867 |
|
|
2,008 |
|
|
|
669 |
|
|
704 |
|
|
|
|
|
|
|
|
Net income |
$ |
3,935 |
|
$ |
3,929 |
|
|
$ |
1,341 |
|
$ |
1,378 |
|
|
|
|
|
|
|
|
Income per common share
- Basic |
$ |
0.87 |
|
$ |
0.83 |
|
|
$ |
0.30 |
|
$ |
0.29 |
Income per common share
- Diluted |
$ |
0.87 |
|
$ |
0.83 |
|
|
$ |
0.30 |
|
$ |
0.29 |
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding – Basic- (1) |
|
4,303 |
|
|
4,537 |
|
|
|
4,283 |
|
|
4,507 |
Weighted average common
shares outstanding – Diluted- (1) |
|
4,303 |
|
|
4,537 |
|
|
|
4,283 |
|
|
4,507 |
NOTE 1: Earnings per share for the three and nine months ended
September 30, 2016 were recalculated and restated using the two
class method, to be presented on a comparable basis with the same
periods in 2017. In 2017 the Company determined it should be
reporting earnings per share using the two class method, which
treats unvested restricted shares granted under our 2012
Stock-Based Compensation Plan that are entitled to receive
non-forfeitable dividends as participating securities. The change
had an immaterial impact on previously reported earnings per share
(and no net income impact), however, the amounts presented in these
tables have been re-stated to correct the error in prior periods
for comparability purposes.
The table below shows basic and diluted EPS as previously
reported and as restated (see NOTE 1):
|
|
2016 |
|
|
Nine monthsended September 30, |
|
Three monthsended September 30, |
As
Previously Reported: |
|
|
|
Income per common share - Basic |
$ |
0.87 |
|
$ |
0.31 |
Income per common share - Diluted |
$ |
0.86 |
|
$ |
0.31 |
|
|
|
|
|
Weighted average common shares outstanding - Basic |
|
4,537 |
|
|
4,507 |
Weighted average common shares outstanding - Diluted |
|
4,548 |
|
|
4,518 |
|
|
|
|
|
As
Restated: |
|
|
|
Income per common share - Basic |
$ |
0.83 |
|
$ |
0.29 |
Income per common share - Diluted |
$ |
0.83 |
|
$ |
0.29 |
|
|
|
|
|
Weighted average common shares outstanding – Basic |
|
4,537 |
|
|
4,507 |
Weighted average common shares outstanding – Diluted |
|
4,537 |
|
|
4,507 |
|
|
|
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