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  

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