Wayside Technology Group, Inc. Reports 2017 Second Quarter Results and Declares Quarterly Dividend


Q2 2017: 
 
Revenue:$103.0 million
Income from operations:$1.7 million
Net income:$1.3 million
Diluted earnings per share: $0.30 per share
 
Dividend declared - $0.17 per share 

EATONTOWN, N.J., July 27, 2017 (GLOBE NEWSWIRE) -- Wayside Technology Group, Inc. (NASDAQ:WSTG) today announced financial results for the second quarter ended June 30, 2017.  The results will be discussed in a conference call to be held on Friday, July 28, 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.

“We are pleased to report solid financial results. Our Lifeboat Distribution segment continued to deliver year over year sales growth, while our TechXtend division was down as compared to an exceptionally strong quarter last year. We see opportunities for growth in the remainder of this year,” said Simon F. Nynens, Chairman and Chief Executive Officer.  “On a year to date basis, our earnings per share are up $0.04 or 7%.” 

Operating Results:

Net sales for the quarter ended June 30, 2017 decreased 2% to $103.0 million compared to $105.3 million for the same period in 2016 as growth in our Lifeboat Distribution segment was offset by a decline in TechXtend due to quarterly variability in enterprise account sales. Lifeboat Distribution segment net sales for the quarter ended June 30, 2017 increased 7% to $95.7 million, compared to $89.7 million for the same period in 2016. TechXtend segment net sales for the quarter ended June 30, 2017 decreased 53% to $7.3 million, compared to $15.6 million for the same period in 2016. The decrease was primarily due to a large enterprise sale of approximately $7.0 million recorded in the second quarter of 2016 which affects the comparability of results. Sales in our TechXtend segment may vary significantly from quarter to quarter based on the timing of IT spending decisions by our larger customers. Gross profit for the quarter ended June 30, 2017 decreased 6% to $6.6 million compared to $7.0 million for the same period in 2016. Lifeboat Distribution segment gross profit for the quarter ended June 30, 2017 increased 1% to $5.6 million, compared to $5.5 million in the same period in 2016. TechXtend segment gross profit for the second quarter of 2017 decreased 34% to $1.0 million, compared to $1.5 million in 2016.

Gross profit margin (gross profit as a percentage of net sales) for the quarter ended June 30, 2017 decreased by 0.3 percentage points to 6.4%, compared to 6.7% for the same period in 2016. Lifeboat Distribution segment gross profit margin for the quarter ended June 30, 2017 decreased by 0.3 percentage points to 5.9%, compared to 6.2% for the same period last year. TechXtend segment gross profit margin for the quarter ended June 30, 2017 increased 3.8 percentage points to 13.1%, compared to 9.3% for the same period in 2016.

Total selling, general, and administrative (“SG&A”) expenses for the quarter ended June 30, 2017 increased 2% or $0.1 million over the same quarter last year to $4.8 million. The increase in general and administrative expenses is primarily due to increased employee related expenses to support our growth. SG&A expenses as a percentage of net sales were 4.7% in 2017 compared to 4.5% in 2016 as a result of the lower TechXtend sales.

Net income for the quarter ended June 30, 2017 decreased 16% to $1.3 million, compared to $1.5 million during the same period last year. Diluted earnings per share for the quarter ended June 30, 2017 decreased 12% to $0.30, compared to $0.34, for the same period in 2016. 

On July 25, 2017, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable August 18, 2017 to shareholders of record on August 11, 2017.

For the quarter ended June 30, 2017, the Company recorded a provision for income taxes of $0.6 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 Bit Defender, 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) 389-0932
michael.vesey@waysidetechnology.com


WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
    
 June 30,
2017
 December 31,
2016
 (unaudited)  
    
ASSETS
    
Current assets   
Cash and cash equivalents$9,729  $13,524 
Accounts receivable, net of allowances of $2,751 and $2,293, respectively 63,010   83,317 
Inventory, net 2,349   2,324 
Prepaid expenses and other current assets 1,212   948 
Total current assets 76,300   100,113 
    
Equipment and leasehold improvements, net 1,993   1,937 
Accounts receivable long-term 11,969   11,119 
Other assets 214   113 
Deferred income taxes 444   416 
    
Total assets$90,920  $113,698 
    
LIABILITIES AND STOCKHOLDERS' EQUITY
    
Current liabilities   
Accounts payable and accrued expenses$53,543  $76,087 
Total current liabilities 53,543   76,087 
    
    
Commitments and contingencies   
    
Stockholders' equity   
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares     
issued, and 4,513,205 and 4,555,434 shares outstanding, respectively 53   53 
Additional paid-in capital 29,944   30,683 
Treasury stock, at cost, 771,295 and 729,066 shares, respectively (12,963)  (12,029)
Retained earnings 21,568   20,515 
Accumulated other comprehensive loss (1,225)  (1,611)
Total stockholders' equity 37,377   37,611 
Total liabilities and stockholders' equity$90,920  $113,698 




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,
 2017
 2016
 2017
 2016
 (Unaudited ) (Unaudited )
Revenues       
Lifeboat segment$200,157  $175,999  $95,674  $89,659 
TechXtend segment 15,621   22,581   7,308   15,598 
Total Revenue 215,778   198,580   102,982   105,257 
        
Cost of sales       
Lifeboat segment 188,702   165,300   90,062   84,112 
TechXtend segment 13,745   20,328   6,348   14,145 
Total Cost of sales 202,447   185,628   96,410   98,257 
        
Gross Profit 13,331   12,952   6,572   7,000 
        
Operating expenses       
Selling costs 5,165   4,658   2,588   2,336 
Share-based compensation 703   839   356   440 
Other general and administrative expenses 3,942   3,719   1,898   1,980 
Total Selling, general and administrative expenses 9,810   9,216   4,842   4,756 
        
Income from operations 3,521   3,736   1,730   2,244 
        
Interest income, net 321   125   173   61 
Foreign currency transaction (loss) (50)  (3)  (50)  (3)
Income before provision for income taxes 3,792   3,858   1,853   2,302 
Provision for income taxes 1,200   1,303   578   775 
        
Net income$2,592  $2,555  $1,275  $1,527 
        
Income per common share - Basic$0.60  $0.56  $0.30  $0.34 
Income per common share - Diluted$0.60  $0.56  $0.30  $0.34 
        
Weighted average common shares outstanding - Basic 4,314   4,545   4,285   4,524 
Weighted average common shares outstanding - Diluted 4,337   4,557   4,315   4,535