Last10K.com

Addvantage Technologies Group Inc (AEY) SEC Filing 8-K Material Event for the period ending Thursday, August 11, 2022

Addvantage Technologies Group Inc

CIK: 874292 Ticker: AEY

image_0a.jpg

ADDvantage Technologies Reports 63% Revenue Increase to a Record of $27.8 million, Net Income of $875,000 for the Third Quarter of Fiscal 2022

Company Reaches GAAP Profitability, Generates $5.0 Million in Cash from Operations,
as Both Wireless and Telco Segments Generate Profitable Growth

Carrollton, Texas, August 11, 2022 – ADDvantage Technologies Group, Inc. (NASDAQ: AEY) (“ADDvantage Technologies” or the “Company”) today reported record financial results for the three and nine months ended June 30, 2022, the third fiscal quarter of 2022.

“Both our Wireless and Telco Segments delivered double-digit growth driving record revenues of $27.8 million and overall profitability for the Company of $875,000 of net income,” commented Joe Hart, Chief Executive Officer. “The recent progress in both segments is encouraging, and we see continued cost optimization opportunities, particularly in our Wireless segment, driving further margin expansion as 5G demand continues to accelerate. ”

“The multi-year 5G build-out opportunity, combined with being strategically positioned as a trusted partner for our carrier customers, is leading to demand for both sides of our business,” continued Joe Hart. “For Wireless, as we grow to meet this demand, we will stay focused in our execution and bidding. By increasing our scale and maintaining our cost optimization initiative we expect to improve our wireless margins. Simultaneously, our Telco segment continues to expand our offerings to both wireless and optical network carriers to support both wireless and broadband connectivity for optical and IP transport.”

Financial Results for the Three Months ended June 30, 2022

Fiscal third quarter sales were a record $27.8 million, an increase of $10.8 million, or 63% compared to $17.0 million last year. The increase was primarily due to an increase of $3.1 million, or 75% in Wireless revenue related to 5G tower work, and an increase of $7.7 million, or 60% in Telco revenue due to increased demand for refurbished telecommunications equipment sold by the Telco segment.

Gross profit was $8.1 million, or 29% gross margin, compared to gross profit of $4.3 million, or 25% gross margin, for the same period last year. Operating expenses increased $36,000, or 1%, to $2.5 million, with the small operating expense increase against a 63% revenue increase reflecting the previously announced cost-reduction initiatives. Consolidated selling, general and administrative ("SG&A") expenses include overhead, which consist of personnel, insurance, professional services, communication, and other cost categories, increased $0.5 million, or 16%, to $4.1 million for the three months ended June 30, 2022 from $3.6 million for the same period last year. The increase in SG&A relates primarily to increased selling and commissions expenses to support higher revenues.

Net income for the quarter was $875,000, or $0.07 per basic and diluted share, compared to a net loss of $2.1 million, or $0.17 per diluted share, for the third fiscal quarter last year.

Financial Results for the Nine Months ended June 30, 2022

Year-to-date sales were a record $70.2 million, an increase of 66% compared to $42.4 million last year. Wireless segment revenue increased 61% to $22.1 million and Telco segment revenue increased 68% to $48.1 million.

Gross profit was $18.5 million, or 26% gross margin, compared to gross profit of $11.1 million, or 26% gross margin, for the same period last year. Operating expenses increased $1.1 million to $7.8 million from $6.7 million the same period last year. Year-to-date net loss narrowed by $4.6 million to $2.5 million, or $0.20 per diluted share, compared with a net loss of $7.1 million, or $0.58 per diluted share last year.

Balance sheet

Cash and cash equivalents were $4.2 million as of June 30, 2022, compared with $2.6 million at September 30, 2021. As of June 30, 2022, the Company had net inventories of $7.6 million.

1


Outstanding debt as of June 30, 2022 was $2.0 million, exclusively related to vehicle financing leases.

Earnings Conference Call

The Company will host a conference call on Thursday, August 11, 2022 at 5 p.m. Eastern.

Date: Thursday, August 11, 2022
Time: 5 p.m. Eastern
Toll-free Dial-in Number: 1-800-289-0720
International Dial-in Number: 1-323-701-0160
Conference ID: 2999226

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.

A replay of the conference call will be available through August 25, 2022.

Toll-free Replay Number: 1-844-512-2921
International Replay Number: 1-412-317-6671
Replay Passcode: 2999226

An online archive of the webcast will be available on the Company's website for 30 days following the call.

About ADDvantage Technologies Group, Inc.

ADDvantage Technologies Group, Inc. (Nasdaq: AEY) is a communications infrastructure services and equipment provider operating a diversified group of companies through its Wireless Infrastructure Services and Telecommunications segments. Through its Wireless segment, Fulton Technologies provides turn-key wireless infrastructure services including the installation, modification and upgrading of equipment on communication towers and small cell sites for wireless carriers, national integrators, tower owners and major equipment manufacturers. Through its Telecommunications segment, Nave Communications and Triton Datacom sell equipment and hardware used to acquire, distribute, and protect the communications signals carried on fiber optic, coaxial cable and wireless distribution systems. The Telecommunications segment also offers repair services focused on telecommunication equipment and recycling surplus and related obsolete telecommunications equipment.

ADDvantage operates through its subsidiaries, Fulton Technologies, Nave Communications, and Triton Datacom. For more information, please visit the corporate web site at www.addvantagetechnologies.com.

Cautions Regarding Forward-Looking Statements

The information in this announcement may include forward-looking statements. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements. These statements are subject to risks and uncertainties, which could cause actual results and developments to differ materially from these statements. A complete discussion of these risks and uncertainties is contained in the Company’s reports and documents filed from time to time with the Securities and Exchange Commission.

-- Tables follow –

2


ADDvantage Technologies Group, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)

June 30,
2022
September 30, 2021
Assets
Current assets:
Cash and cash equivalents$4,157 $2,608 
Restricted cash1,782 334 
Accounts receivable, net of allowances of $250, respectively
2,384 7,013 
Unbilled revenue2,786 2,488 
Inventories, net of allowances of $3,714 and $3,476, respectively
7,609 5,922 
Prepaid expenses and other assets1,584 1,431 
Total current assets20,302 19,796 
Property and equipment, at cost:
Machinery and equipment5,512 4,973 
Leasehold improvements899 813 
Total property and equipment, at cost6,411 5,786 
Less: Accumulated depreciation(2,899)(2,293)
Net property and equipment3,512 3,493 
Right-of-use lease assets2,009 2,730 
Intangibles, net of accumulated amortization868 1,107 
Goodwill58 58 
Other assets117 128 
Total assets$26,866 $27,312 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$10,559 $7,044 
Accrued expenses1,509 1,581 
Deferred revenue87 168 
Bank line of credit— 2,050 
Right-of-use lease obligations, current1,215 1,198 
Finance lease obligations, current665 582 
Other current liabilities922 692 
Total current liabilities14,957 13,315 
Right-of-use lease obligations, long-term1,221 2,141 
Finance lease obligations, long-term1,335 1,429 
Total liabilities17,513 16,885 
Shareholders’ equity:
Common stock, $0.01 par value; 30,000,000 shares authorized; 13,168,191 and 12,610,229 shares issued and outstanding, respectively
132 126 
Paid in capital890 (578)
Retained earnings8,331 10,879 
Total shareholders’ equity9,353 10,427 
Total liabilities and shareholders’ equity$26,866 $27,312 


3


ADDvantage Technologies Group, Inc.
Consolidated Statement of Operations
(in thousands, except share and per share amounts)
(Unaudited)

Three Months Ended June 30,Nine Months Ended June 30,
2022202120222021
Sales$27,789 $17,017 $70,238 $42,433 
Cost of sales19,642 12,748 51,702 31,354 
Gross profit8,147 4,269 18,536 11,079 
Operating expenses2,544 2,508 7,796 6,733 
Selling, general and administrative expenses4,145 3,561 11,684 10,532 
Depreciation and amortization expense313 314 975 899 
Loss (gain) on disposal of assets— (13)(23)
Income (loss) from operations1,145 (2,101)(1,921)(7,062)
Other income (expense):
Interest income— 34 — 115 
Other expense, net(233)(34)(473)(61)
Interest expense(37)(46)(154)(156)
Other income (expense), net(270)(46)(627)(102)
Income (loss) before income taxes875 (2,147)(2,548)(7,164)
Benefit for income taxes— (23)— (23)
Net income (loss)$875 $(2,124)$(2,548)$(7,141)
Income (loss) per share:
Basic and diluted$0.07 $(0.17)$(0.20)$(0.58)
Shares used in per share calculation:
Basic and diluted13,191,792 12,495,438 12,980,634 12,352,960 

























4



Non-GAAP Financial Measure
Adjusted EBITDA is a supplemental, non-GAAP financial measure.  EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA as presented also excludes impairment charges for operating lease right-of-use assets and intangible assets including goodwill, stock compensation expense, other income, other expense, interest income and income from equity method investment. Adjusted EBITDA is presented below because this metric is used by the financial community as a method of measuring our financial performance and of evaluating the market value of companies considered to be in similar businesses.  Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net earnings as an indicator of operating performance. Adjusted EBITDA, as calculated below, may not be comparable to similarly titled measures employed by other companies.  In addition, Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs.
The following table provides a reconciliation by segment of loss from operations to Adjusted EBITDA for the three and nine month periods ended June 30, 2022 and 2021, in thousands:

Three Months Ended June 30, 2022Three Months Ended June 30, 2021
WirelessTelcoTotalWirelessTelcoTotal
Income (loss) from operations$(1,461)$2,606 $1,145 $(2,117)$16 $(2,101)
Depreciation and amortization expense192 121 313 185 129 314 
Stock compensation expense44 59 103 136 143 279 
Adjusted EBITDA$(1,225)$2,786 $1,561 $(1,796)$288 $(1,508)
Nine Months Ended June 30, 2022Nine Months Ended June 30, 2021
WirelessTelcoTotalWirelessTelcoTotal
Income (loss) from operations$(5,985)$4,064 $(1,921)$(4,759)$(2,303)$(7,062)
Depreciation and amortization expense608 367 975 513 387 899 
Stock compensation expense289 342 631 383 457 840 
Adjusted EBITDA$(5,088)$4,773 $(315)$(3,863)$(1,459)$(5,323)
5

View differences made from one to another to evaluate Addvantage Technologies Group Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Addvantage Technologies Group Inc.

Continue

Assess how Addvantage Technologies Group Inc's management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

Addvantage Technologies Group Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2022 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

SEC Filing Tools

Financial Statements, Disclosures and Schedules

Inside this 8-K Corporate News

Material Contracts, Statements, Certifications & more

Addvantage Technologies Group Inc provided additional information to their SEC Filing as exhibits

Ticker: AEY
CIK: 874292
Form Type: 8-K Corporate News
Accession Number: 0001628280-22-022465
Submitted to the SEC: Thu Aug 11 2022 4:11:49 PM EST
Accepted by the SEC: Thu Aug 11 2022
Period: Thursday, August 11, 2022
Industry: Wholesale Durable Goods
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Regulated Disclosure

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/aey/0001628280-22-022465.htm