SHREWSBURY, NJ--(Marketwire - July 31, 2008) - Wayside Technology Group, Inc. (
NASDAQ:
WSTG) today reported financial results for the second quarter ended June
30, 2008. The results will be discussed in a conference call to be held on
Friday, August 1, 2008 at 10:00 AM Eastern time. The dial-in telephone
number is (866) 814-8476 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 second quarter of 2008 increased 9% or $4.1 million
to $48.1 million compared to $44.0 million for the same period in 2007.
Sales for the second quarter of 2008 for our Lifeboat segment were $35.0
million compared to $33.7 million in the second quarter of 2007,
representing a 4% increase. Sales for the second quarter of 2008 for our
Programmer's Paradise segment were $13.1 million compared to $10.4 million
in the second quarter of 2007, representing a 26% increase. Gross profit
margin, as a percentage of net sales, for the quarter ending June 30, 2008
was 8.9% compared to 9.8% in the second quarter of 2007.
"The second quarter of 2008 was a great quarter for us. 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. Our
Programmer's Paradise segment continued to attract more and more customers
with our service-centric approach," said Simon F. Nynens, Chairman and
Chief Executive Officer. "Our Lifeboat segment also performed very well.
Excluding VMware, Lifeboat's sales increased by $4.0 million or 21%
compared to the second quarter of 2007. We signed new distribution
contracts with 14 software publishers in the second quarter of 2008."
The company also announced a change in its agreement with VMware. As a
result, Lifeboat Distribution will cease distributing VMware-labeled
products as of October 1, 2008, while VMware will expand its relationship
with Programmer's Paradise and TechXtend. Commenting on the change, Simon
F. Nynens said, "As VMware's partner ecosystem has evolved, both companies
believe that focusing on Programmer's Paradise and TechXtend is mutually
beneficial. This should result in additional product and service
opportunities for these subsidiaries."
Nynens continued, "Lifeboat will continue to focus on software that is
complementary to VMware as well as other virtualization platforms.
Distribution sales for complementary virtualization software have shown
significant growth. We will continue to focus on adding value for our
distribution partners. We are a value added distributor and we will remain
a value added distributor."
While VMware-labeled distribution sales amounted to $11.7 million, or 24%
of our overall Q2 2008 revenue, product gross margin amounted to $320,000,
or 7% of our overall Q2 2008 gross margin. VMware-labeled distribution
sales amounted to $14.3 million, or 33% of our overall Q2 2007 revenue;
product gross margin amounted to $696,000, or 16% of our overall Q2 2007
gross margin.
Total gross profit for the quarter ended June 30, 2008 was $4.3 million
compared to $4.3 million in the second quarter of 2007.
Gross profit for our Programmer's Paradise segment for the quarter ended
June 30, 2008 was $1.5 million compared to $1.3 million in the second
quarter of 2007. Gross margin, as a percentage of net sales, was 11.2%
versus 12.9% in Q2 2007. Gross margin as a percentage was impacted by
several large orders in Q2 2008. These large orders typically carry lower
gross margins.
Gross profit for our Lifeboat segment for the quarter ended June 30, 2008
was $2.8 million compared to $3.0 million in the second quarter of 2007.
Gross margin, as a percentage of net sales, was 8.1% versus 8.9% in Q2
2007. These results reflect the continued pricing pressure in distribution.
Total selling, general, and administrative ("SG&A") expenses for the second
quarter of 2008 were $3.1 million compared to $3.0 million in the second
quarter of 2007.
Net income for the second quarter of 2008 amounted to $823,000 or 1.7% of
net sales as compared to $959,000 or 2.2% for the same period in 2007.
The company today also announced the appointment of Shawn J. Giordano as
Vice President of Sales for Programmer's Paradise and TechXtend. Shawn
Giordano joined Wayside Technology Group in November 2007 as Senior
Director of Sales for Programmer's Paradise and TechXtend. From 2000 to
2007, Mr. Giordano worked for CA, Inc. where he held several sales and
management positions. His most recent position was Director of Channel
Sales. "Shawn is an energetic and focused sales leader," said Nynens.
"We're excited to have him on our team and we look forward to his
contribution to the continued success of our organization."
The company today also announced that the Board of Directors approved the
increase of its common stock repurchase program by 500,000 shares.
Including these 500,000 shares, the total amount of shares available for
repurchase now amounts to 627,646 shares. The company expects to purchase
shares from time to time in the market or otherwise subject to market
conditions.
On July 30, 2008, the Board of Directors declared a quarterly dividend of
$.15 per share of its common stock payable August 20, 2008 to shareholders
of record on August 7, 2008.
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)
June 30, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 12,764 $ 14,241
Marketable securities 9,767 9,641
Accounts receivable, net of allowances of
$832 and $908, respectively 26,086 24,824
Inventory - finished goods 1,368 1,116
Prepaid expenses and other current assets 988 927
Deferred income taxes 772 830
------------ ------------
Total current assets 51,745 51,579
Equipment and leasehold improvements, net 720 619
Other assets 4,647 3,469
Deferred income taxes 948 1,086
------------ ------------
Total assets $ 58,060 $ 56,753
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses 34,049 32,100
------------ ------------
Total current liabilities 34,049 32,100
Other liabilities 148 161
------------ ------------
Total liabilities 34,197 32,261
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value; 10,000,000
shares authorized, 5,284,500 shares issued;
4,675,651 and 4,708,498 shares outstanding,
respectively 53 53
Additional paid-in capital 27,610 28,860
Treasury stock, at cost, 608,849 and 576,002
shares, respectively (3,029) (2,283)
Accumulated deficit (1,147) (2,599)
Accumulated other comprehensive income 376 461
------------ ------------
Total stockholders' equity 23,863 24,492
------------ ------------
Total liabilities and stockholders' equity $ 58,060 $ 56,753
============ ============
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE
INCOME
(Unaudited)
(In thousands, except per share data)
Six months ended Three months ended
June 30, June 30,
2008 2007 2008 2007
-------- --------- -------- ---------
Net Sales $ 88,602 $ 90,962 $ 48,096 $ 44,040
Cost of sales 80,559 82,170 43,798 39,703
-------- --------- -------- ---------
Gross profit 8,043 8,792 4,298 4,337
Selling, general and administrative
expenses 6,016 6,036 3,074 2,993
-------- --------- -------- ---------
Income from operations 2,027 2,756 1,224 1,344
Interest income, net 376 491 142 251
Realized foreign exchange gain
(loss) 7 - 4 1
-------- --------- -------- ---------
Income before income tax provision 2,410 3,247 1,370 1,596
Provision for income taxes 958 1,298 547 637
-------- --------- -------- ---------
Net income $ 1,452 $ 1,949 $ 823 $ 959
======== ========= ======== =========
Net income per common share - Basic $ 0.33 $ 0.44 $ 0.19 $ 0.22
======== ========= ======== =========
Net income per common share -
Diluted $ 0.32 $ 0.42 $ 0.18 $ 0.20
======== ========= ======== =========
Weighted average common shares
outstanding - Basic 4,429 4,380 4,417 4,407
======== ========= ======== =========
Weighted average common shares
outstanding - Diluted 4,519 4,687 4,505 4,706
======== ========= ======== =========
Reconciliation to comprehensive
income:
Net income $ 1,452 $ 1,949 $ 823 $ 959
Other comprehensive income
(loss), net of tax:
Unrealized gain on marketable
securities (14) - (6) -
Foreign currency translation
adjustments (71) 162 16 143
-------- --------- -------- ---------
Total comprehensive income $ 1,367 $ 2,111 $ 833 $ 1,102
======== ========= ======== =========
Contact Information: Company Contact:
Kevin Scull
Wayside Technology Group, Inc.
Vice President and Chief Accounting Officer
(732) 389-0932