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Wayside Technology Group, Inc. Reports 2019 Third Quarter Results and Declares Quarterly Dividend

Written by Customer Service on . Posted in Dividend Reports And Estimates.

EATONTOWN, N.J., Nov. 06, 2019 (GLOBE NEWSWIRE) — Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the third quarter ended September 30, 2019.  The results will be discussed in a conference call to be held on Wednesday, November 6, 2019 at 10:00 a.m. EST.  The dial-in telephone number is (844) 683-0552 and the pass code is “WSTG.”  This conference call will be webcast by West and can be accessed at Wayside Technology’s website at www.waysidetechnology.com/site/content/webcasts.“We are pleased to report our second consecutive quarter of double digit growth in gross profit,” said Michael Vesey, Vice President and Chief Financial Officer. “This growth continues to be driven by our core strategy of investing in sustainable growth opportunities in our Lifeboat distribution business. The results demonstrate the scalability of the investments we began in 2018, with more than 40% of our gross profit growth in 2019 dropping through to our pretax income line.”Operating Results Highlights:Net sales for the quarter ended September 30, 2019 increased 9% to $52.4 million compared to $47.9 million for the same period in 2018. Lifeboat Distribution segment net sales for the quarter ended September 30, 2019 increased 11% to $48.8 million compared to $44.1 million for the same period in 2018. TechXtend segment net sales for the quarter ended September 30, 2019 decreased 6% to $3.6 million compared to $3.8 million for the same period in 2018.Adjusted gross billings (non-GAAP) for the quarter ended September 30, 2019 increased 11% to $149.1 million compared to $134.0 million for the same period last year (see attached table for a discussion of adjusted gross billings).Gross profit for the quarter ended September 30, 2019 increased 12% to $7.1 million compared to $6.3 million for the same period in 2018. Lifeboat Distribution segment gross profit for the quarter ended September 30, 2019 increased 13% to $6.4 million compared to $5.6 million for the same period in 2018. TechXtend segment gross profit for the quarter ended September 30, 2019 remained consistent with the same period in 2018 at $0.7 million.Gross profit margin (gross profit as a percentage of net sales) for the quarter ended September 30, 2019 increased to 13.5% compared to 13.2% for the same period in 2018. Lifeboat Distribution segment gross profit margin for the quarter ended September 30, 2019 increased to 13.1% compared to 12.8% for the same period in 2018. TechXtend segment gross profit margin for the quarter ended September 30, 2019 increased to 18.9% compared to 17.6% for the same period in 2018. The overall increase in gross profit margin was primarily caused by an increase in the percentage mix of our products which are recorded net of the related cost of sales, or an effective 100% gross margin.Total selling, general, and administrative (“SG&A”) expenses for the quarter ended September 30, 2019 increased to $5.1 million compared to $4.9 million for the same period in 2018, primarily due to increased salary and commission expense to support the increased sales on existing and new product lines. SG&A expenses were 9.7% of net sales for the quarter ended September 30, 2019 compared to 10.2% for the same period in 2018.The Company reported income before provision for income taxes of $2.0 million for the quarter ended September 30, 2019 compared to $1.7 million for the same period in 2018.The Company recorded a provision for income taxes for the quarter ended September 30, 2019 of $0.6 million compared to $0.4 million for the same period in 2018. The Company’s current period provision for income taxes was impacted by an increase in the provision for state income taxes for states which have enacted economic nexus statutes.The Company reported net income of $1.4 million for the quarter ended September 30, 2019 compared to $1.3 million for the same period in 2018.Diluted earnings per share for the quarter ended September 30, 2019 was $0.32 compared to diluted earnings per share of $0.29 for the same period in 2018.On November 5, 2019, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable November 22, 2019 to shareholders of record on November 18, 2019.Non-GAAP measuresAs is further discussed in the attached tables, we use non-GAAP measures including adjusted gross billings as supplemental measures of the performance of our business.  Our use of these measures has limitations and you should not consider them in isolation or use them as substitutes for analysis of our financial results under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The attached tables provide a reconciliation of each non-GAAP measure to the most nearly comparable measure under U.S. GAAP.About Wayside Technology Group, Inc.Wayside Technology Group, Inc. (NASDAQ: WSTG) is an IT channel company providing innovative sales and distribution solutions to technology vendors, resellers and system integrators since 1982. Wayside operates Lifeboat Distribution, a value-added distributor for virtualization/cloud computing, security, application and network infrastructure, business continuity/disaster recovery, database infrastructure and management, application lifecycle management, science/engineering, and other technically sophisticated products. The company helps vendors recruit and build multinational solution provider networks, power their networks, and drive incremental sales revenues that complement existing sales channels. Lifeboat Distribution services thousands of solution providers, VARs, systems integrators, corporate resellers, and consultants worldwide, helping them power a rich opportunity stream and build profitable product and service businesses. The Company also offers specialty solutions to end user customers through its TechXtend business.Additional information can be found by visiting www.waysidetechnology.comThe 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
 
 

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