Addvantage Technologies Group Inc (AEY) SEC Filing 10-Q Quarterly report for the period ending Saturday, June 30, 2018

ADDvantage Technologies Group, Inc.

1221 E. Houston

Broken Arrow, Oklahoma 74012

ADDvantage Technologies Announces Financial Results

for the Fiscal Third Quarter of 2018

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BROKEN ARROW, Oklahoma, August 14, 2018 – ADDvantage Technologies Group, Inc. (NASDAQ: AEY)

, today announced its financial results for the three and nine month periods ended June 30, 2018.

Joe Hart, interim President and CEO of ADDvantage Technologies, commented, “We are pleased with our top-line results for the fiscal third quarter. Nave Communications’ new sales strategy continued to drive sales growth for the second consecutive quarter, contributing to our improved Telco segment results. Triton Datacom’s performance was in line with our internal expectations once again, and we believe there is room to grow its customer base and further diversify its product lines to help drive additional solid revenue generation at Triton going forward.

“The Cable TV segment reported an overall decline in sales as compared to last year due primarily to the loss of a large repair customer earlier in 2018.  We performed a goodwill impairment assessment on the Cable TV segment due to the lower operating results reported this quarter, lower projected results and management discussions surrounding various strategic alternatives for this segment given the lower operating performance.  As a result of this assessment, we recognized a non-cash impairment charge of $1.2 million for the three months ended June 30, 2018,” continued Mr. Hart.

“During the quarter, we reported approximately $900,000 of non-recurring or non-cash expenses which increased our operating loss, despite the solid top-line results. These items include inventory reserve expenses of $500,000 in the Cable TV segment, market valuation adjustment for inventory of $200,000 in the Telco segment, and a severance package related to the resignation of our former chief executive officer,” continued Mr. Hart.

“It is a key corporate objective for ADDvantage Technologies to leverage its current operational and financial platform to grow its position in the telecommunications market, and I am excited to join the Company and lead this growth strategy. To kick start our strategic plan, we are undertaking a comprehensive review of our business units to identify opportunities to grow and diversify our revenue, streamline our operating costs and to make possible recommendations for divestitures of assets to help finance and drive our growth strategy.  Although it has only been a few weeks since I was appointed CEO, I am encouraged by the opportunities in the telecommunications market, and I look forward to advancing our strategy to build an efficient and sustainable business throughout the remainder of fiscal 2018 and beyond,” concluded Mr. Hart.

Results for the three months ended June 30, 2018

Consolidated sales decreased 3% to $12.6 million for the three months ended June 30, 2018 compared with $13.0 million for the three months ended June 30, 2017.  The decrease in sales was in the Cable TV segment of $1.1 million, partially offset by an increase in sales in the Telco segment of $0.7 million. The decrease in Cable TV sales was due to a decrease in repair service revenue and in refurbished equipment sales of $0.8 million and $0.4 million, respectively, partially offset by an increase in new equipment revenue of $0.1 million. The increase in sales for the Telco segment was due to an increase in equipment sales and recycling revenue of $0.5 million and $0.2 million, respectively.