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): October 30, 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 October 30, 2014, Wayside Technology Group, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2014. 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 October 30, 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: October 30, 2014 |
By: |
/s/ Simon F. Nynens |
|
Name: |
Simon F. Nynens |
|
Title: |
Chairman of The Board, President and Chief Executive Officer |
Exhibit 99.1
Wayside Technology Group, Inc. Reports 2014 Third Quarter Results, Declares Quarterly Dividend and Names F. Duffield Meyercord as Lead Director
|
|
Q3 2014: |
|
Revenue: |
|
$90.5 million |
|
Income from operations: |
|
$1.9 million |
|
Net income: |
|
$1.4 million |
|
Diluted earnings per share: |
|
$0.29 per share |
|
Dividend declared - $0.17 per share
SHREWSBURY, NJ, October 30, 2014 Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the third quarter ended September 30, 2014. The results will be discussed in a conference call to be held on Friday, October 31, 2014 at 10:00 a.m. EDT. The dial-in telephone number is (866) 847-7864 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 pleased to report solid financial results for Q3 2014. Overall, revenue increased 28% to a record $90.5 million and income from operations increased 6% over the same period last year, said Simon F. Nynens, Chairman and Chief Executive Officer.
Cash and long term receivables amounted to $26.4 million, representing 68% of equity as of September 30, 2014. Working capital amounted to $27.3 million, representing 70% of equity as of September 30, 2014.
Net sales for the third quarter ended September 30, 2014 increased 28% or $20.0 million to $90.5 million compared to $70.5 million for the same period in 2013. Total sales for the third quarter of 2014 for our Lifeboat Distribution segment were $77.4 million compared to $56.9 million in the third quarter of 2014, representing an increase of $20.5 million or 36%. Total sales for the third quarter of 2014 for our TechXtend segment were $13.1 million compared to $13.6 million in the third quarter of 2013, representing a decrease of $0.5 million or 4%.
The 36% increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration, our continued focus on the expanding virtual infrastructure-centric business, product mix and the addition of several key product lines. The 4% decrease in net sales in the TechXtend segment was primarily due to a decrease in extended payment terms sales transactions as compared to the same period in 2013.
Gross Profit for the third quarter ended September 30, 2014 was $6.2 million, a 17% increase as compared to $5.3 million for the third quarter of 2013. Gross profit for our Lifeboat segment in the third quarter of 2014 was $4.7 million compared to $3.8 million for the third quarter of 2013, representing a 23% increase. Gross profit for our TechXtend segment was essentially flat at $1.4 million in the third quarter of 2014 and 2013.
Gross profit margin (gross profit as a percentage of net sales) for the third quarter ended September 30, 2014 was 6.8% compared to 7.5% for the third quarter of 2013. Gross profit margin for the nine
months ended September 30, 2014 was 7.2% compared to 7.9% in the same period in 2013. Gross profit margin for our Lifeboat segment for the third quarter of 2014 was 6.1% compared to 6.8% for the third quarter of 2013. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by competitive pricing pressures and product mix. Gross profit margin for our TechXtend segment for the third quarter of 2014 was 10.9% compared to 10.4% for the third quarter of 2013, due primarily to a decline in extended payment terms sales transactions in the third quarter of 2014 as compared to the same period in 2013.
Total selling, general, and administrative (SG&A) expenses for the third quarter of 2014 were $4.3 million compared to $3.5 million for the third quarter of 2013. This increase is primarily the result of an increase in employee and employee related expenses (salaries, commissions, bonus accruals, benefits and severance expenses of $0.3 million) and occupancy expenses in 2014 compared to 2013.
For the three months ended September 30, 2014, the Company recorded a provision for income taxes of $0.6 million or 31.6% of income, compared to $0.6 million or 30.5% of income for the same period in 2013.
Net income and diluted earnings per share for the third quarter of 2014 were $1.4 million and $0.29, respectively, compared to $1.3 million and $0.29, respectively, for the third quarter of 2013.
On October 29, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable November 17, 2014 to shareholders of record on November 10, 2014.
In light of the continued growth of the business and the important strategic determinations undertaken by the Board of Directors, on October 29, 2014, the Board, recognizing that the Companys Chairman, President and Chief Executive Officer roles are unified and filled by Simon Nynens, decided to name a lead director from among its independent directors and to clearly define the lead directors role and responsibilities. The Board named F. Duffield Meyercord as its lead director. The Board believes that this action is consistent with best corporate practices, enhancing both transparency of Board actions and Board independence.
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, Dell/Dell Software, Flexera Software, Hewlett Packard, Infragistics, Intel Software, JetBrains, 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:
Kevin Scull, Vice President Accounting
Wayside Technology Group, Inc.
(732) 389-0932
kevin.scull@waysidetechnology.com
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
|
|
September 30, |
|
December 31, |
| ||
|
|
(unaudited) |
|
|
| ||
ASSETS |
| ||||||
|
|
|
|
|
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
15,606 |
|
$ |
19,609 |
|
Accounts receivable, net |
|
60,721 |
|
60,796 |
| ||
Inventory, net |
|
1,414 |
|
1,315 |
| ||
Prepaid expenses and other current assets |
|
845 |
|
2,117 |
| ||
Deferred income taxes |
|
270 |
|
218 |
| ||
Total current assets |
|
78,856 |
|
84,055 |
| ||
|
|
|
|
|
| ||
Equipment and leasehold improvements, net |
|
355 |
|
324 |
| ||
Accounts receivable long-term |
|
10,834 |
|
10,006 |
| ||
Other assets |
|
163 |
|
159 |
| ||
Deferred income taxes |
|
216 |
|
216 |
| ||
|
|
|
|
|
| ||
Total assets |
|
$ |
90,424 |
|
$ |
94,760 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS EQUITY |
| ||||||
|
|
|
|
|
| ||
Current liabilities |
|
|
|
|
| ||
Accounts payable and accrued expenses |
|
$ |
51,621 |
|
$ |
60,039 |
|
Total current liabilities |
|
51,621 |
|
60,039 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders equity |
|
|
|
|
| ||
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares issued, and 4,881,523 and 4,653,293 shares outstanding , respectively |
|
53 |
|
53 |
| ||
Additional paid-in capital |
|
30,716 |
|
28,791 |
| ||
Treasury stock, at cost, 402,977 and 631,207 shares, respectively |
|
(6,007 |
) |
(7,017 |
) | ||
Retained earnings |
|
14,199 |
|
12,695 |
| ||
Accumulated other comprehensive (loss) income |
|
(158 |
) |
199 |
| ||
Total stockholders equity |
|
38,803 |
|
34,721 |
| ||
Total liabilities and stockholders equity |
|
$ |
90,424 |
|
$ |
94,760 |
|
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)
|
|
Nine months ended |
|
Three months ended |
| ||||||||
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Revenues |
|
|
|
|
|
|
|
|
| ||||
Lifeboat segment |
|
$ |
206,655 |
|
$ |
171,949 |
|
$ |
77,416 |
|
$ |
56,871 |
|
TechXtend segment |
|
39,980 |
|
38,588 |
|
13,089 |
|
13,591 |
| ||||
Total Revenue |
|
246,635 |
|
210,537 |
|
90,505 |
|
70,462 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of sales |
|
|
|
|
|
|
|
|
| ||||
Lifeboat segment |
|
193,180 |
|
159,820 |
|
72,670 |
|
53,025 |
| ||||
TechXtend segment |
|
35,602 |
|
34,174 |
|
11,659 |
|
12,172 |
| ||||
Total Cost of sales |
|
228,782 |
|
193,994 |
|
84,329 |
|
65,197 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross Profit |
|
|
|
|
|
|
|
|
| ||||
Lifeboat segment |
|
13,475 |
|
12,129 |
|
4,746 |
|
3,846 |
| ||||
TechXtend segment |
|
4,378 |
|
4,414 |
|
1,430 |
|
1,419 |
| ||||
Total Gross Profit |
|
17,853 |
|
16,543 |
|
6,176 |
|
5,265 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses |
|
|
|
|
|
|
|
|
| ||||
Selling costs |
|
6,453 |
|
5,835 |
|
2,379 |
|
1,830 |
| ||||
Stock based compensation |
|
853 |
|
830 |
|
278 |
|
278 |
| ||||
Other general and administrative expenses |
|
4,987 |
|
4,546 |
|
1,634 |
|
1,372 |
| ||||
Total Selling, general and administrative expenses |
|
12,293 |
|
11,211 |
|
4,291 |
|
3,480 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from operations |
|
5,560 |
|
5,332 |
|
1,885 |
|
1,785 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest, net |
|
375 |
|
416 |
|
121 |
|
140 |
| ||||
Foreign currency transaction gain (loss) |
|
(8 |
) |
10 |
|
(4 |
) |
(11 |
) | ||||
Income before income tax provision |
|
5,927 |
|
5,758 |
|
2,002 |
|
1,914 |
| ||||
Provision for income taxes |
|
2,016 |
|
1,868 |
|
632 |
|
584 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
3,911 |
|
$ |
3,890 |
|
$ |
1,370 |
|
$ |
1,330 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income per common share - Basic |
|
$ |
0.84 |
|
$ |
0.87 |
|
$ |
0.29 |
|
$ |
0.30 |
|
Net income per common share - Diluted |
|
$ |
0.83 |
|
$ |
0.85 |
|
$ |
0.29 |
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding - Basic |
|
4,639 |
|
4,457 |
|
4,716 |
|
4,442 |
| ||||
Weighted average common shares outstanding - Diluted |
|
4,685 |
|
4,568 |
|
4,736 |
|
4,551 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Dividends paid per common share |
|
$ |
0.51 |
|
$ |
0.48 |
|
$ |
0.17 |
|
$ |
0.16 |
|