Addvantage Technologies Group Inc (AEY) SEC Filing 10-Q Quarterly report for the period ending Friday, March 31, 2017

ADDvantage Technologies Group, Inc.

1221 E. Houston

Broken Arrow, Oklahoma 74012

ADDvantage Technologies Announces Financial Results

for the Fiscal Second Quarter of 2017

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BROKEN ARROW, Oklahoma, May 15, 2017 – ADDvantage Technologies Group, Inc. (NASDAQ: AEY)

, today announced its financial results for the three and six month periods ended March 31, 2017. The six month period includes the financial results for the Company’s asset acquisition of Triton Miami, Inc. (“Triton Datacom”) from October 14, 2016 to March 31, 2017.

“Total sales increased 7% to $11.3 million in the second quarter of fiscal 2017, which includes sales from our new subsidiary Triton Datacom, which is comprised of the Telco assets we acquired in October 2016. Sales for the Cable TV segment were down in the second quarter of fiscal 2017 due to lower demand for new and refurbished equipment.  However, this segment remains profitable, and we believe that customer demand for this segment will resume for the rest of fiscal 2017,” commented David Humphrey, President and CEO of ADDvantage Technologies.

“Our Telco segment continued to benefit from the contribution of Triton Datacom’s sales, which more than offset the continued lower sales from the remaining portion of this segment, Nave Communications.  We continue to implement enhancements to the sales and marketing for Nave Communications in order to drive growth.  Part of this effort includes the recent appointment of Don Kinison as VP of Sales for the Company.  Don has tremendous telecommunications sales experience, and we believe he will play a significant role in helping Nave Communications improve their operating results as well as assisting in our Company’s overall growth strategy,” continued Mr. Humphrey.

“We are excited by the possibilities that lie ahead for our Company as we continue to build our business and identify new market opportunities. While the challenges we have faced in the market over the past few years still exist, we are addressing these situations and believe we will be able to deliver on our overall growth strategy,” concluded Mr. Humphrey.

Results for the three months ended March 31, 2017

Consolidated sales increased 7% to $11.3 million for the three months ended March 31, 2017 compared with $10.6 million for the three months ended March 31, 2016.  The increase in sales was in the Telco segment of $1.8 million, offset by a decrease in sales in the Cable TV segment of $1.0 million. The decrease in Cable TV sales was due to a decrease in new equipment sales and refurbished sales of $1.1 million and $0.2 million, respectively, partially offset by an increase in repair sales of $0.3 million. The increase in sales for the Telco segment was primarily due to the acquisition of Triton Datacom in October 2016, which offset the continued lower sales from the remaining portion of this segment.

Consolidated operating, selling, general and administrative expenses increased 13%, to $3.7 million for the three months ended March 31, 2017 from $3.3 million for the same period last year.  This increase in expenses was due to the Telco segment of $0.5 million, while the Cable TV segment decreased by $0.1 million. The increase for the Telco segment is primarily due to operating expenses of $0.6 million from Triton Datacom and Triton Miami acquisition-related costs of $0.2 million.  In addition, for the three