ADDvantage Technologies Group, Inc. (NASDAQ:AEY),
today announced its financial results for the three and nine month
periods ended June 30, 2017. The nine month period includes the
financial results for the Company’s asset acquisition of Triton
Miami, Inc. (“Triton Datacom”) from October 14, 2016 to June 30,
2017.
“We reported a 29% increase in consolidated
sales for the second quarter of 2017, which is mostly attributable
to the Telco segment resulting from our acquisition of Triton
Datacom’s assets last year. We continue to be pleased with this
acquisition, as it further diversified our business and positively
contributed to our consolidated financial results over the last few
quarters. However, we continue to be disappointed with the
consolidated operating results of the Company as a result of the
poor sales performance at Nave Communications, which is part of the
Telco segment,” commented David Humphrey, President and CEO of
ADDvantage Technologies.
“Due primarily to our two acquisitions that
created our Telco segment, we added a VP of Sales executive role in
our Company to lead our overall sales organization. Since
joining the Company in May, our new VP of Sales, Don Kinison, has
been focused on the development and implementation of an improved
sales strategy and organization for Nave Communications. His goal
is to increase the sales volume and therefore improve profitability
of the overall Telco segment. We are pleased with the initial
progress thus far and look forward to seeing the impact on future
sales and bottom-line results,” continued Mr. Humphrey.
“We are also reviewing our various operations
and operating costs within the Company to optimize our
performance. We still remain confident in the long-term
direction of the Company. While we have encountered certain market
headwinds and internal challenges that slowed our progress,
specifically in our Telco segment, we believe that we have a sound
overall business strategy and look forward to seeing the results of
the improved sales strategy over the next several quarters,”
concluded Mr. Humphrey.
Results for the three months ended June
30, 2017
Consolidated sales increased 29% to $13.0
million for the three months ended June 30, 2017 compared with
$10.1 million for the three months ended June 30, 2016. The
increase in sales was in both the Telco segment and Cable segment
of $2.9 million and $0.1 million, respectively. The increase
in Cable TV sales was due to an increase in new equipment sales and
repairs sales of $0.2 million and $0.3 million, respectively,
partially offset by a decrease in refurbished equipment sales of
$0.4 million. The increase in Telco used equipment sales was
primarily due to Triton Datacom, which offset the continued lower
sales from the remaining portion of this segment. The Company
is continuing to address the lower sales in the Telco segment by
expanding its sales force, targeting a broader end-user customer
base, expanding the capacity of the recycling program and testing
the used equipment inventory prior to sale to end-user
customers.
Consolidated operating, selling, general and
administrative expenses increased $0.7 million, or 23%, to $3.8
million for the three months ended June 30, 2017 from $3.1 million
for the same period last year. This increase in expenses was
due to the Telco segment of $0.8 million, while the Cable TV
segment decreased by $0.1 million. The increase for the Telco
segment was due primarily to operating expenses of $0.8 million
from Triton Datacom and Triton Datacom earn-out expenses of $0.1
million.
Net loss for the three months ended June 30,
2017, was $67,000, or $0.01 per diluted share, compared with a net
income of $316,000, or $0.03 per diluted share, for the same period
of 2016.
Consolidated EBITDA for the three months ended
June 30, 2017 was $0.4 million compared with $0.7 million for the
same period ended June 30, 2016.
Results for the nine months ended June
30, 2017
Consolidated sales increased 26% before the
impact of intercompany sales to $36.4 million for the nine months
ended June 30, 2017 from $28.9 million for the nine months ended
June 30, 2016. The increase in sales was in both the Cable TV
and Telco segment of $0.6 million and $6.8 million,
respectively. Sales for the Telco segment increased $6.8
million to $18.9 million for the nine months ended June 30, 2017
from $12.1 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. The increase in
sales for the Cable TV segment was due to an increase in new
equipment sales and repair sales of $0.5 million and $0.9 million,
respectively, partially offset by a decrease in refurbished
equipment revenue of $0.8 million.
Consolidated operating, selling, general and
administrative expenses increased 23% to $11.0 million for the nine
months ended June 30, 2017 from $9.0 million for the same period
last year. This increase in expenses was due to the Telco
segment of $2.2 million, partially offset by a decrease in the
Cable TV segment of $0.2 million.
Net income for the nine month period ended June
30, 2017 was $161,000, or $0.02 per diluted share, compared with
$486,000, or $0.05 per diluted share, for the same period of
2016.
Consolidated EBITDA for the nine months ended
June 30, 2017 remained flat at $1.8 million compared with the same
period ended June 30, 2016.
Cash and cash equivalents were $3.7 million as
of June 30, 2017, compared with $4.5 million as of September 30,
2016. The Company generated $2.3 million of cash from
operations for the nine months ended June 30, 2017. As of
June 30, 2017, the Company had inventory of $22.7 million compared
with $21.5 million as of September 30, 2016.
Earnings Conference Call
The Company will host a conference call on
Monday, August 14th, 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- 967-7141 (domestic)
or 913-312- 1227 (international). All dial-in participants must use
the following code to access the call: 2191269. 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
August 28, 2017 at 844-512-2921 (domestic) or 412-317-6671
(international). Participants must use the following code to access
the replay of the call: 2191269. 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 OPERATIONS(UNAUDITED) |
|
|
|
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Sales |
$ |
12,989,990 |
|
|
$ |
10,060,242 |
|
|
$ |
36,380,572 |
|
|
$ |
28,897,097 |
|
Cost of sales |
|
9,234,039 |
|
|
|
6,594,091 |
|
|
|
24,836,563 |
|
|
|
19,080,954 |
|
Gross profit |
|
3,755,951 |
|
|
|
3,466,151 |
|
|
|
11,544,009 |
|
|
|
9,816,143 |
|
Operating, selling,
general and administrative expenses |
|
3,757,027 |
|
|
|
3,062,288 |
|
|
|
11,031,276 |
|
|
|
8,987,316 |
|
Income (loss) from
operations |
|
(1,076 |
) |
|
|
403,863 |
|
|
|
512,733 |
|
|
|
828,827 |
|
Other income
(expense): |
|
|
|
|
Other
income |
|
– |
|
|
|
70,517 |
|
|
|
– |
|
|
|
180,071 |
|
Interest
income |
|
– |
|
|
|
28,950 |
|
|
|
– |
|
|
|
31,122 |
|
Loss from
equity method investment |
|
– |
|
|
|
63,977 |
|
|
|
– |
|
|
|
(77,021 |
) |
Interest
expense |
|
(85,787 |
) |
|
|
(54,221 |
) |
|
|
(279,764 |
) |
|
|
(184,289 |
) |
Total other income
(expense), net |
|
(85,787 |
) |
|
|
109,223 |
|
|
|
(279,764 |
) |
|
|
(50,117 |
) |
|
|
|
|
|
Income (loss) before
income taxes |
|
(86,683 |
) |
|
|
513,086 |
|
|
|
232,969 |
|
|
|
778,710 |
|
Provision (benefit) for
income taxes |
|
(20,000 |
) |
|
|
197,000 |
|
|
|
72,000 |
|
|
|
293,000 |
|
|
|
|
|
|
Net income (loss) |
$ |
(66,863 |
) |
|
$ |
316,086 |
|
|
$ |
160,969 |
|
|
$ |
485,710 |
|
|
|
|
|
|
Earnings (loss) per
share: |
|
|
|
|
Basic |
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.02 |
|
|
$ |
0.05 |
|
Diluted |
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.02 |
|
|
$ |
0.05 |
|
Shares used in per
share calculation: |
|
|
|
|
Basic |
|
10,192,244 |
|
|
|
10,134,235 |
|
|
|
10,160,017 |
|
|
|
10,098,564 |
|
Diluted |
|
10,192,244 |
|
|
|
10,135,607 |
|
|
|
10,160,582 |
|
|
|
10,103,054 |
|
|
Three Months Ended June 30, 2017 |
|
Three Months Ended June 30, 2016 |
|
Cable TV |
|
Telco |
|
|
Total |
|
Cable TV |
|
|
Telco |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
from operations |
$ |
414,383 |
|
$ |
(415,459 |
) |
|
$ |
(1,076 |
) |
|
$ |
528,651 |
|
$ |
(124,788 |
) |
|
$ |
403,863 |
Depreciation |
|
77,114 |
|
|
33,673 |
|
|
|
110,787 |
|
|
|
84,152 |
|
|
24,902 |
|
|
|
109,054 |
Amortization |
− |
|
|
313,311 |
|
|
|
313,311 |
|
|
|
− |
|
|
206,451 |
|
|
|
206,451 |
EBITDA
(a) |
$ |
491,497 |
|
$ |
(68,475 |
) |
|
$ |
423,022 |
|
|
$ |
612,803 |
|
$ |
106,565 |
|
|
$ |
719,368 |
(a) The
Telco segment includes earn-out expenses of $0.1 million and zero
for the three months ended June 30, 2017 and 2016, respectively,
related to the acquisition of Triton Miami, Inc. and Nave
Communications.
|
Nine Months Ended June 30, 2017 |
|
Nine Months Ended June 30, 2016 |
|
Cable TV |
|
Telco |
|
Total |
|
Cable TV |
|
Telco |
|
Total |
|
|
|
|
|
|
|
Income (loss)
from operations |
$ |
1,586,013 |
|
$ |
(1,073,280 |
) |
|
$ |
512,733 |
|
$ |
981,770 |
|
$ |
(152,943 |
) |
|
$ |
828,827 |
Depreciation |
|
225,253 |
|
|
103,420 |
|
|
|
328,673 |
|
|
237,418 |
|
|
74,985 |
|
|
|
312,403 |
Amortization |
− |
|
|
953,871 |
|
|
|
953,871 |
|
|
− |
|
|
619,353 |
|
|
|
619,353 |
EBITDA
(a) |
$ |
1,811,266 |
|
$ |
(15,989 |
) |
|
$ |
1,795,277 |
|
$ |
1,219,188 |
|
$ |
541,395 |
|
|
$ |
1,760,583 |
(a) The
Telco segment for the nine months ended June 30, 2017 includes
acquisition related costs of $0.2 million. The Telco segment
includes earn-out expenses of $0.2 million and zero for the nine
months ended June 30, 2017 and 2016, respectively, related to the
acquisition of Triton Miami, Inc. and Nave Communications.
|
ADDVANTAGE TECHNOLOGIES GROUP, INC.CONSOLIDATED
CONDENSED BALANCE SHEETS(UNAUDITED) |
|
|
June 30, 2017 |
|
September 30, 2016 |
Assets |
|
|
Current assets: |
|
|
Cash and
cash equivalents |
$ |
3,744,508 |
|
|
$ |
4,508,126 |
|
Accounts
receivable, net of allowance for doubtful accounts
of $250,000 |
|
6,024,786 |
|
|
|
4,278,855 |
|
Income
tax receivable |
|
101,754 |
|
|
|
480,837 |
|
Inventories, net of allowance for excess and obsolete |
|
|
inventory
of $2,984,641 and $2,570,868, respectively |
|
22,660,271 |
|
|
|
21,524,919 |
|
Prepaid
expenses |
|
332,421 |
|
|
|
323,289 |
|
Total current
assets |
|
32,863,740 |
|
|
|
31,116,026 |
|
|
|
|
Property and equipment,
at cost |
|
11,438,582 |
|
|
|
11,203,865 |
|
Less: Accumulated
depreciation |
|
(5,320,592 |
) |
|
|
(4,993,102 |
) |
Net property and
equipment |
|
6,117,990 |
|
|
|
6,210,763 |
|
|
|
|
Investment in and loans
to equity method investee |
|
288,703 |
|
|
|
2,588,624 |
|
Intangibles, net of
accumulated amortization |
|
8,860,798 |
|
|
|
4,973,669 |
|
Goodwill |
|
6,031,511 |
|
|
|
3,910,089 |
|
Deferred income
taxes |
|
1,490,000 |
|
|
|
1,333,000 |
|
Other assets |
|
136,412 |
|
|
|
135,988 |
|
|
|
|
Total assets |
$ |
55,789,154 |
|
|
$ |
50,268,159 |
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
Current
liabilities: |
|
|
Accounts
payable |
$ |
3,350,598 |
|
|
$ |
1,857,953 |
|
Accrued
expenses |
|
1,590,339 |
|
|
|
1,324,652 |
|
Notes
payable – current portion |
|
6,828,961 |
|
|
|
899,603 |
|
Other
current liabilities |
|
660,919 |
|
|
|
963,127 |
|
Total current
liabilities |
|
12,430,817 |
|
|
|
5,045,335 |
|
|
|
|
Notes
payable, less current portion |
|
– |
|
|
|
3,466,358 |
|
Other
liabilities |
|
1,419,894 |
|
|
|
131,410 |
|
Total liabilities |
|
13,850,711 |
|
|
|
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 |
|
(4,764,953 |
) |
|
|
(4,916,791 |
) |
Retained
earnings |
|
47,596,481 |
|
|
|
47,435,512 |
|
Total
shareholders’ equity before treasury stock |
|
42,938,457 |
|
|
|
42,625,070 |
|
|
|
|
Less:
Treasury stock, 500,658 shares, at cost |
|
(1,000,014 |
) |
|
|
(1,000,014 |
) |
Total shareholders’
equity |
|
41,938,443 |
|
|
|
41,625,056 |
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
55,789,154 |
|
|
$ |
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 Aug 2024 to Sep 2024
ADDvantage Technologies (NASDAQ:AEY)
Historical Stock Chart
From Sep 2023 to Sep 2024