SHREWSBURY, NJ--(Marketwire - April 24, 2008) - Wayside Technology Group, Inc. (
NASDAQ:
WSTG) today reported financial results for the first quarter ended March
31, 2008. The results will be discussed in a conference call to be held on
Friday, April 25, 2008 at 10:00 AM Eastern time. The dial-in telephone
number is (866) 814-8483 and the pass code is "WSTG."
This conference call will be available via live webcast -- in listen-mode
only -- at
www.earnings.com. A replay will be available on our website at
www.waysidetechnology.com.
Total net sales for the first quarter of 2008 decreased 14% or $6.4 million
to $40.5 million compared to $46.9 million for the same period in 2007.
These results are entirely attributable to a continuation of the reduction
of sales for our largest vendor because of intense competition
and extremely low margins. Sales for the first quarter of 2008 for our
Lifeboat segment were $29.3 million compared to $36.1 million in the first
quarter of 2007, representing a 19% decrease. Sales for the first quarter
of 2008 for our Programmer's Paradise segment were $11.2 million compared
to $10.8 million in the first quarter of 2007, representing a 3% increase.
Gross profit margin, as a percentage of net sales, for the quarter ending
March 31, 2008 was 9.3% compared to 9.5% in the first quarter of 2007.
"In accordance with our strategic plan, and as stated before, we are
transitioning to become a more diverse software provider. We are pleased to
report that our strategy to add new publishers as well as expand our
current relationships with software publishers is working well. Excluding
our largest distribution line, sales increased by $2.9 million or 11%
compared to the first quarter of 2007. Since January 1, 2008, we signed
distribution contracts with 11 software publishers," said Simon F. Nynens,
chairman and chief executive officer. "We continued to face reduced sales
for our largest vendor due to intense competition and extremely low
margins. As expected, Q1 2008 was comparatively a tough quarter. Sales for
our Lifeboat segment grew 56% or $13 million in the first quarter of 2007
which set up a very tough quarter-over-quarter growth comparison. Although
we cannot forecast 2008 second quarter results, based on April's month to
date results, we are cautiously optimistic about the second quarter of
2008."
On April 23, 2008, the Board of Directors declared a quarterly dividend of
$.15 per share of its common stock payable May 20, 2008 to shareholders of
record on May 7, 2008.
Total gross profit for the quarter ended March 31, 2008 was $3.8 million
compared to $4.5 million in the first quarter of 2007.
Gross profit for our Programmer's Paradise segment for the quarter ended
March 31, 2008 was $1.4 million compared to $1.6 million in the first
quarter of 2007. Gross margin as a percentage was 12.2% versus 14.2% in Q1
2007. Gross margin as a percentage was impacted by several large deals in
Q1 2008. These large deals typically carry lower gross margins.
Gross profit for our Lifeboat segment for the quarter ended March 31, 2008
was $2.4 million compared to $2.9 million in the first quarter of 2007.
Gross margin as a percentage remained at 8.1% in Q1 2008 versus Q1 2007.
These results reflect the continued pricing pressure on our main line as
well as the impact of our recently introduced "point saving" program. We
reserved $0.1 million for these expenses in this first quarter of 2008.
Actual usage of our point saving program is below our initial estimates; as
a result, we expect these costs, as a percentage of sales, to be lower on a
go forward basis.
Total selling, general, and administrative ("SG&A") expenses for the first
quarter of 2008 were $2.9 million compared to $3.0 million in the first
quarter of 2007.
Net income for the first quarter of 2008 amounted to $629,000 or 1.6% of
net sales as compared to $990,000 or 2.1% for the same period in 2007.
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 such as Microsoft, CA, IBM,
VMware, Borland, Quest Software, Compuware, Infragistics, ComponentOne,
Acresso, and Adobe.
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 include the continued
acceptance of the Company's distribution channel by vendors and customers,
the timely availability and acceptance of new products, and contribution of
key vendor relationships and support programs. 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.
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
March 31, December
2008 31, 2007
--------- --------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 14,360 $ 14,241
Marketable securities 7,680 9,641
Accounts receivable, net 21,848 24,824
Inventory - finished goods 836 1,116
Prepaid expenses and other current assets 1,260 927
Deferred income taxes 812 830
----------- -----------
Total current assets 46,796 51,579
Equipment and leasehold improvements, net 789 619
Other assets 3,448 3,469
Deferred income taxes 1,012 1,086
----------- -----------
Total assets $ 52,045 $ 56,753
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses 27,769 32,100
----------- -----------
Total current liabilities 27,769 32,100
Other liabilities 132 161
----------- -----------
Total liabilities 27,901 32,261
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value; 10,000,000
shares authorized, 5,284,500 shares issued,
and 4,739,235 and 4,708,498 shares
outstanding, respectively 53 53
Additional paid-in capital 28,133 28,860
Treasury stock, at cost, 545,265 shares and
576,002 shares, respectively (2,438) (2,283)
Accumulated deficit (1,970) (2,599)
Accumulated other comprehensive income 366 461
----------- -----------
Total stockholders' equity 24,144 24,492
----------- -----------
Total liabilities and stockholders' equity $ 52,045 $ 56,753
=========== ===========
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE
INCOME
(Unaudited)
(In thousands, except per share data)
Three months ended
March 31,
2008 2007
----------- -----------
Net Sales $ 40,506 $ 46,922
Cost of sales 36,761 42,467
----------- -----------
Gross profit 3,745 4,455
Selling, general and administrative expenses 2,942 3,043
----------- -----------
Income from operations 803 1,412
Interest income, net 234 240
Realized foreign exchange gain (loss) 3 (1)
----------- -----------
Income before income tax provision 1,040 1,651
Provision for income taxes 411 661
----------- -----------
Net income $ 629 $ 990
=========== ===========
Net income per common share - Basic $ 0.14 $ 0.23
=========== ===========
Net income per common share - Diluted $ 0.14 $ 0.21
=========== ===========
Weighted average common shares outstanding -
Basic 4,441 4,353
=========== ===========
Weighted average common shares outstanding -
Diluted 4,533 4,669
=========== ===========
Reconciliation to comprehensive income:
Net income $ 629 $ 990
Other comprehensive income (loss), net of tax:
Unrealized gain on marketable securities (8) -
Foreign currency translation adjustments (87) 19
----------- -----------
Total comprehensive income $ 534 $ 1,009
=========== ===========
Contact Information: Company Contact:
Kevin Scull
Wayside Technology Group, Inc.
Vice President and Chief Accounting Officer
(732) 389-0932