UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 2014
WAYSIDE TECHNOLOGY GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
000-26408 |
|
13-3136104 |
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
1157 Shrewsbury Avenue, Shrewsbury, New Jersey |
|
07702 |
(Address of principal executive offices) |
|
(Zip Code) |
732-389-8950
(Registrants telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On February 6, 2014, Wayside Technology Group, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2013. A copy of this press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2. of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated February 6, 2014.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
WAYSIDE TECHNOLOGY GROUP, INC. | ||||
|
|
|
|
| ||
Date: February 6, 2014 |
|
By: |
/s/ Thomas J. Flaherty | |||
|
|
Name: |
Thomas J. Flaherty | |||
|
|
Title: |
Chief Financial Officer | |||
Exhibit 99.1
Wayside Technology Group, Inc. Reports 2013 Fourth Quarter & Full Year Results
and Declares Quarterly Dividend
|
|
Q4 2013: |
|
Year 2013: |
Revenue: |
|
$89.9 million |
|
$300.4 million |
Income from operations: |
|
$3.5 million |
|
$8.9 million |
Net income: |
|
$2.5 million |
|
$6.4 million |
Diluted earnings per share: |
|
$0.55 per share |
|
$1.41 per share |
Dividend declared - $0.17 per share
SHREWSBURY, NJ, February 6, 2014 Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the fourth quarter and year ended December 31, 2013. The results will be discussed in a conference call to be held on Friday, February 7, 2014 at 10:00 a.m. EST. The dial-in telephone number is (866) 793-1341 and the pass code is WSTG. This conference call will be webcast by NASDAQ OMX and can be accessed at Wayside Technologys Web site at www.waysidetechnology.com/earnings-call.
I am very pleased to report a strong finish to 2013 with the fourth quarter being our best quarter of the year, said Simon F. Nynens, Chairman and Chief Executive Officer. Q4 2013 income from operations increased by 25%, as compared to Q4 of 2012. We achieved record net income of $6.4 million for 2013.
Cash, marketable securities and long term receivables amounted to $29.6 million, representing 85% of equity as of December 31, 2013 and $6.25 per share as per December 31, 2013. Working capital amounted to $24.0 million, representing 69% of equity as of December 31, 2013.
Net sales for the fourth quarter ended December 31, 2013 increased 5% to $89.9 million compared to $85.5 million for the same period in 2012. Net sales for the fourth quarter of 2013 for our Lifeboat Distribution segment were $65.7 million compared to $58.5 million in the fourth quarter of 2012, representing an increase of 12%. Net sales for the fourth quarter of 2013 for our TechXtend segment were $24.2 million compared to $26.9 million in the fourth quarter of 2012, representing a decrease of 10%.
Net sales for the year ended December 31, 2013 increased 1% to $300.4 million compared to $297.1 million in 2012. Net sales for our Lifeboat Distribution segment in 2013 were $237.7 million compared to $217.3 million in 2012, representing a 9% increase. Total sales for the TechXtend segment in 2013 amounted to $62.8 million, compared to $79.7 million in 2012, representing a decrease of 21%.
The increases in net sales for the three month and full year ended December 31, 2013, compared to the same periods in 2012, in our Lifeboat Distribution segment were mainly a result of the strengthening of our account penetration, our continued focus on the expanding virtual infrastructure-centric business and the addition of several key product lines, and resulted primarily from sales generated out of the USA sales office. The decrease in net sales in our TechXtend segment was primarily due to a decrease in large single sales transactions and a decrease in extended payment terms sales transactions in the first three quarters of 2013 as compared to exceptionally strong levels of large single sales transactions and extended payment terms sales transactions in 2012.
Gross profit for the fourth quarter of 2013 was $7.8 million compared to $7.0 million for the fourth quarter of 2012 representing an increase of 11%. Gross profit for our Lifeboat Distribution segment for the fourth quarter of 2013 was $5.3 million compared to $4.5 million in the fourth quarter of 2012, representing a 19% increase. Gross profit for our TechXtend segment for the fourth quarter of 2013 was $2.5 million compared to $2.6 million in the fourth quarter of 2012, representing a 2% decrease. Vendor rebates and discounts for the quarter ended December 31, 2013 amounted to $0.7 million compared to $0.4 million for the fourth quarter of 2012.
Gross profit for the year 2013 was $24.4 million compared to $23.9 million in 2012, a 2% increase. Gross profit for our Lifeboat Distribution segment in 2013 was $17.4 million compared to $15.8 million in 2012, representing a 10% increase. The increase in gross profit for the Lifeboat Distribution segment was due to increased sales volume as gross profit margin remained relatively stable. Gross profit for our TechXtend segment in 2013 was $6.9 million compared to $8.1 million in 2012, representing a 14% decrease. The decrease in gross profit for the TechXtend segment was the result of decreased sales volume, including a decrease in large single sales transactions and extended payment terms sales transactions, offset in part by a higher gross margin in 2013 as compared to 2012. Vendor rebates and discounts for the year ended December 31, 2013 amounted to $1.7 million compared to $1.5 million for 2012, representing a 13% increase. The increase in vendor rebates and discounts as a percentage of net sales was experienced mainly at the TechXtend segment.
Gross profit margin (gross profit as a percentage of net sales) for 2013 was 8.1% compared to 8.0% in 2012. Gross profit margin for our Lifeboat Distribution segment was 7.3% in 2013 and 2012. Gross profit margin for our TechXtend segment in 2013 was 11.0% compared to 10.1% in 2012. This increase was due to increased pricing and vendor rebates in 2013 as compared to 2012.
The increase in gross profit dollars and the increase in gross profit margins were primarily caused by the sales growth within our Lifeboat Distribution segment and increase in pricing and an increase in rebates earned at our TechXtend segment.
The Company monitors gross profits and gross profit margins carefully. Price competition in our market persisted in 2013. Although our total gross profit margins improved slightly in 2013, we anticipate that margins, as well as discounts and rebates, will be under pressure in the near future.
Total selling, general, and administrative (SG&A) expenses for the fourth quarter of 2013 were $4.3 million compared to $4.2 million for the fourth quarter of 2012. Total SG&A expenses for 2013 were $15.5 million compared to $15.4 million in 2012, representing an increase of $0.1 million or 0.8%.
For the fourth quarter and year ended December 31, 2013, the Company recorded a provision for income taxes of $1.2 million and $3.0 million, respectively. The current year effective tax rate was 32.1% compared to 39.6% in 2012, the decrease in the effective tax rate was primarily the result of a change in the state of New Jerseys apportionment rules which lowered our state rate compared with the prior year.
Net income and diluted earnings per share for the fourth quarter of 2013 were $2.5 million and $0.55, respectively, compared to $1.8 million and $0.39, respectively for the fourth quarter of 2012. Net income and diluted earnings per share for 2013 were $6.4 million and $1.41, respectively, compared to $5.5 million and $1.19, respectively in 2012.
On February 5, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable February 28, 2014 to shareholders of record on February 18, 2014.
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 Acronis, Bluebeam Software, CA Technologies, DataCore, Datawatch, Dell/Dell Software, Flexera Software, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, Samsung, SAP/Sybase, SmartBear, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Unitrends, Veeam Software and VMware.
Additional information can be found by visiting www.waysidetechnology.com
The statements in this release concerning the Companys 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 Companys 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:
Tom Flaherty, Chief Financial Officer
Wayside Technology Group, Inc.
(732) 389-0932
tom.flaherty@waysidetechnology.com
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
|
|
December 31, |
|
December 31, |
| ||
|
|
(unaudited) |
|
|
| ||
|
|
|
|
|
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
19,609 |
|
$ |
9,835 |
|
Marketable securities |
|
|
|
4,411 |
| ||
Accounts receivable, net |
|
60,796 |
|
61,388 |
| ||
Inventory, net |
|
1,315 |
|
1,717 |
| ||
Prepaid expenses and other current assets |
|
2,117 |
|
1,281 |
| ||
Deferred income taxes |
|
218 |
|
280 |
| ||
Total current assets |
|
84,055 |
|
78,912 |
| ||
|
|
|
|
|
| ||
Equipment and leasehold improvements, net |
|
324 |
|
375 |
| ||
Accounts receivable long-term |
|
10,006 |
|
11,851 |
| ||
Other assets |
|
159 |
|
71 |
| ||
Deferred income taxes |
|
216 |
|
236 |
| ||
|
|
|
|
|
| ||
Total assets |
|
$ |
94,760 |
|
$ |
91,445 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current liabilities |
|
|
|
|
| ||
Accounts payable and accrued expenses |
|
$ |
60,039 |
|
$ |
59,265 |
|
Current portion- capital lease obligation |
|
|
|
55 |
| ||
Total current liabilities |
|
60,039 |
|
59,320 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders equity |
|
|
|
|
| ||
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,653,293 and 4,740,873 shares outstanding in 2013 and 2012, respectively |
|
53 |
|
53 |
| ||
Additional paid-in capital |
|
28,791 |
|
27,712 |
| ||
Treasury stock, at cost, 631,207 and 543,627 shares, respectively |
|
(7,017 |
) |
(5,373 |
) | ||
Retained earnings |
|
12,695 |
|
9,316 |
| ||
Accumulated other comprehensive income |
|
199 |
|
417 |
| ||
Total stockholders equity |
|
34,721 |
|
32,125 |
| ||
Total liabilities and stockholders equity |
|
$ |
94,760 |
|
$ |
91,445 |
|
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
|
|
Year ended |
|
Three months ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
(Unaudited) |
|
|
|
(Unaudited) |
| ||||||
Revenues |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Lifeboat Distribution segment |
|
$ |
237,632 |
|
$ |
217,342 |
|
$ |
65,683 |
|
$ |
58,504 |
|
TechXtend segment |
|
62,758 |
|
79,715 |
|
24,170 |
|
26,943 |
| ||||
Total Revenue |
|
300,390 |
|
297,057 |
|
89,853 |
|
85,447 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of sales |
|
|
|
|
|
|
|
|
| ||||
Lifeboat Distribution segment |
|
220,184 |
|
201,524 |
|
60,364 |
|
54,022 |
| ||||
TechXtend segment |
|
55,851 |
|
71,641 |
|
21,677 |
|
24,388 |
| ||||
Total Cost of sales |
|
276,035 |
|
273,165 |
|
82,041 |
|
78,410 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross profit |
|
24,355 |
|
23,892 |
|
7,812 |
|
7,037 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses |
|
|
|
|
|
|
|
|
| ||||
Selling costs |
|
7,997 |
|
8,079 |
|
2,162 |
|
2,222 |
| ||||
Stock based compensation |
|
1,127 |
|
1,071 |
|
297 |
|
328 |
| ||||
Other general and administrative expenses |
|
6,381 |
|
6,227 |
|
1,835 |
|
1,679 |
| ||||
Total Selling, general and administrative expenses |
|
15,505 |
|
15,377 |
|
4,294 |
|
4,229 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from operations |
|
8,850 |
|
8,515 |
|
3,518 |
|
2,808 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest income, net |
|
562 |
|
557 |
|
146 |
|
163 |
| ||||
Realized foreign exchange gain |
|
|
|
17 |
|
(10 |
) |
4 |
| ||||
Income before income tax provision |
|
9,412 |
|
9,089 |
|
3,654 |
|
2,975 |
| ||||
Provision for income taxes |
|
3,019 |
|
3,600 |
|
1,151 |
|
1,172 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
6,393 |
|
$ |
5,489 |
|
$ |
2,503 |
|
$ |
1,803 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income per common share - Basic |
|
$ |
1.44 |
|
$ |
1.23 |
|
$ |
0.56 |
|
$ |
0.40 |
|
Net income per common share - Diluted |
|
$ |
1.41 |
|
$ |
1.19 |
|
$ |
0.55 |
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding - Basic |
|
4,454 |
|
4,476 |
|
4,444 |
|
4,502 |
| ||||
Weighted average common shares outstanding - Diluted |
|
4,526 |
|
4,628 |
|
4,521 |
|
4,622 |
|