EX-99.1 2 a14-5216_1ex99d1.htm EX-99.1

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 Technology’s 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 Jersey’s 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 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:

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,
2013

 

December 31,
2012

 

 

 

(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