ADDvantage Technologies Group, Inc.
1221 E. Houston
Broken Arrow, Oklahoma 74012

For further information
KCSA Strategic Communications
Company Contact:
Garth Russell
Scott Francis        (9l8) 25l-9121
(212) 896-1250
grussell@kcsa.com

ADDvantage Technologies Announces Financial Results
for the Fiscal Fourth Quarter of 2014
- - -

BROKEN ARROW, Oklahoma, December 9, 2014 – ADDvantage Technologies Group, Inc. (NASDAQ: AEY)
, today announced its financial results for the three month period and year ended September 30, 2014.

Net sales for the three months ended September 30, 2014 increased 59% to $12.1 million compared with $7.6 million for the same period ended September 30, 2013.  The increase in net sales is primarily attributable to sales from the Telco segment as a result of the Nave Communications acquisition.  Net sales for the Cable TV segment decreased slightly to $7.3 million for the three months ended September 30, 2014 from $7.6 million for the same period last year.  The decrease in Cable TV sales was due primarily to new equipment sales of $0.6 million, partially offset by an increase in refurbished equipment sales of $0.4 million.  Net sales for the Telco segment were $4.8 million for the three months ended September 30, 2014 and zero for the same period last year as a result of the acquisition of Nave Communications.  Net sales for the Telco segment consisted of $4.1 million of refurbished equipment sales and $0.7 million of recycling revenue.

Operating, selling, general and administrative expenses increased $1.8 million, or 126%, to $3.3 million for the three months ended September 30, 2014 from $1.5 million for the same period last year.  This increase was primarily due to $1.8 million in Telco segment expenses as a result of the Nave Communications acquisition.

Net income from continuing operations for the three months ended September 30, 2014 was $0.6 million, or $0.06 per diluted share, compared with a net income from continuing operations of $0.5 million, or $0.05 per diluted share, for the same period of 2013. Discontinued operations for the three months ended September 30, 2013 included the operations of Adams Global Communications prior to the sale on January 31, 2014.

EBITDA for the three months ended September 30, 2014 was $1.2 million compared with $1.0 million for the same period in 2013.

Total net sales for the year ended September 30, 2014 increased 25% to $35.9 million compared with $28.7 million for the year ended September 30, 2013.  The increase in net sales is attributable to $8.7 million in net sales from the Telco segment as a result of the Nave Communications acquisition, partially offset by a $1.5 million decrease in net sales from the Cable TV segment.

Net sales for the Cable TV segment decreased to $27.2 million for the year ended September 30, 2014 from $28.7 million for the same period last year due primarily to a decrease in new equipment and refurbished equipment sales of $0.7 million and $0.6 million, respectively.  The decrease in equipment sales was due primarily to the continued decrease in plant expansions and bandwidth upgrades in the cable television industry and the absence of equipment sales as a result of Hurricane Sandy in fiscal year 2013, partially offset by supplying a major MSO equipment for certain projects.

Operating, selling, general and administrative expenses increased $4.7 million, or 81%, to $10.5 million for the year ended September 30, 2014 from $5.8 million for the same period last year.  This increase was primarily due to a $0.5 million increase in Cable TV segment expenses, and $4.2 million in Telco segment expenses as a result of the Nave Communications acquisition. The Telco expenses included $0.6 million of direct costs in connection with the acquisition of Nave Communications.

Net income from continuing operations for the year ended September 30, 2014 was $0.7 million, or $0.07 per diluted share, compared with a net income from continuing operations of $1.8 million, or $0.18 per diluted share, for the same period of 2013. The decrease is primarily the result of decreased operating income of $1.4 million from the Cable TV segment and acquisition-related expenses of $0.6 million in the Telco segment associated with the acquisition of Nave Communications.

Discontinued operations included the operations of Adams Global Communications prior to the sale on January 31, 2014. The loss on sale of discontinued operations, net of tax, of $0.6 million consisted of a pretax loss of $0.9 million from the sale of the net assets of Adams Global Communications for $2 million in cash and a pretax loss of $0.1 million from the sale of the Adams Global Communications facility for $1.5 million.

EBITDA for the fiscal year ended September 30, 2014 was $1.9 million compared with $3.2 million for the same period in 2013.

Cash and cash equivalents were $5.3 million as of September 30, 2014, compared with $8.5 million as of September 30, 2013.  As of September 30, 2014, we had inventory of $22.8 million compared with $18.0 million as of September 30, 2013.  The increase in inventory was due primarily to the acquisition of Nave Communications and new inventory purchases with certain manufacturer incentives.

“During the quarter, Nave Communications demonstrated improved results, both in top-line revenue and EBITDA, bringing it more in line with our expectations since it was acquired earlier in the year.  We are excited about this new segment of our business and look forward to the opportunities that it will continue to bring as we execute our diversified growth strategy,” commented David Humphrey, President and CEO of ADDvantage Technologies.

“Despite slightly lower revenue in our Cable TV segment this quarter compared to last year, this segment of our business still remains profitable. We believe that our efforts to realign the sales organization will allow this segment to remain profitable and demonstrate improved operating results.

“Looking ahead, we continue to seek accretive acquisitions that diversify our business and scale-up our operations.  We believe this will allow us to drive greater profitability and build shareholder value,” concluded Mr. Humphrey.

Earnings Conference Call
As previously announced, the Company will host a conference call on Tuesday, December 9, 2014, at 12:00 p.m. Eastern Time featuring remarks by David Humphrey, President and Chief Executive Officer, Dave Chymiak, Chief Technology Officer, and Scott Francis, Chief Financial Officer.  The conference call will be available via webcast and can be accessed through the Investor Relations section of ADDvantage's website, www.addvantagetechnologies.com.  Please allow extra time prior to the call to visit the site and download any necessary software to listen to the Internet broadcast. The dial-in number for the conference call is 888-503-8175 (domestic) or 719-457-1512 (international). All dial-in participants must use the following code to access the call: 7373393. Please call at least five minutes before the scheduled start time.

For interested individuals unable to join the conference call, a replay of the call will be available through December 23, 2014 at 877-870-5176 (domestic) or 858-384-5517 (international). Participants must use the following code to access the replay of the call: 7373393. An online archive of the webcast will be available on the Company's website for 30 days following the call.
 
 

The following information was filed by Addvantage Technologies Group Inc (AEY) on Tuesday, December 9, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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