Exhibit 99.1

Picture 1

Wayside Technology Group, Inc. Reports 2019 Third Quarter Results

and Declares Quarterly Dividend

 

 

 

 

 

 

Q3 2019:

Q3 2018:

Net sales:

$52.4 million

$47.9 million

Income before provision for income taxes:

$2.0 million

$1.7 million

Net income:

$1.4 million

$1.3 million

Diluted earnings per share:

$0.32 per share

$0.29 per share

Dividend declared per share:

$0.17 per share

$0.17 per share

 

 

 

EATONTOWN, NJ, November 6, 2019

 – 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 measures

 

As 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.com

 

The 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 

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

    

2019

    

2018

    

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,157

 

$

14,883

 

Accounts receivable, net of allowances of $720 and $785, respectively

 

 

86,436

 

 

81,351

 

Inventory, net

 

 

2,356

 

 

1,473

 

Vendor prepayments

 

 

187

 

 

3,172

 

Prepaid expenses and other current assets

 

 

2,224

 

 

1,988

 

Total current assets

 

 

101,360

 

 

102,867

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

1,308

 

 

1,588

 

Right-of-use assets, net

 

 

1,881

 

 

 —

 

Accounts receivable-long-term, net

 

 

2,040

 

 

3,156

 

Other assets

 

 

138

 

 

215

 

Deferred income taxes

 

 

98

 

 

145

 

 

 

$

106,825

 

$

107,971

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

60,361

 

$

66,653

 

Lease liability, current portion

 

 

397

 

 

 —

 

Total current liabilities

 

 

60,758

 

 

66,653

 

 

 

 

 

 

 

 

 

Lease liability, net of current portion

 

 

2,250

 

 

 —

 

Deferred rent and tenant allowances

 

 

 —

 

 

745

 

Total liabilities

 

 

63,008

 

 

67,398

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock, $.01 par value; 10,000,000 shares authorized; 5,284,500 shares issued: 4,507,215 and 4,496,494 shares outstanding, respectively

 

 

53

 

 

53

 

Additional paid-in capital

 

 

32,735

 

 

32,392

 

Treasury stock, at cost, 777,285 and 788,006 shares, respectively

 

 

(13,235)

 

 

(13,447)

 

Retained earnings

 

 

25,458

 

 

22,994

 

Accumulated other comprehensive loss

 

 

(1,194)

 

 

(1,419)

 

Total stockholders’ equity

 

 

43,817

 

 

40,573

 

 

 

$

106,825

 

$

107,971

 

WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

( Amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

Three months ended

 

 

September 30,

 

September 30,

 

 

2019

    

2018

    

2019

    

2018

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

$

136,189

 

$

119,308

 

$

48,815

 

$

44,145

TechXtend segment

 

 

11,708

 

 

13,081

 

 

3,548

 

 

3,778

Total net sales

 

 

147,897

 

 

132,389

 

 

52,363

 

 

47,923

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

 

116,481

 

 

102,209

 

 

42,429

 

 

38,506

TechXtend segment

 

 

9,308

 

 

10,484

 

 

2,879

 

 

3,114

Total Cost of sales

 

 

125,789

 

 

112,693

 

 

45,308

 

 

41,620

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

Lifeboat segment

 

 

19,708

 

 

17,099

 

 

6,386

 

 

5,639

TechXtend segment

 

 

2,400

 

 

2,597

 

 

669

 

 

664

Total gross profit

 

 

22,108

 

 

19,696

 

 

7,055

 

 

6,303

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling costs

 

 

8,644

 

 

7,774

 

 

2,797

 

 

2,657

Share-based compensation

 

 

620

 

 

957

 

 

287

 

 

231

Separation expenses (1)

 

 

100

 

 

2,446

 

 

 -

 

 

 -

Other general and administrative expenses

 

 

6,811

 

 

6,517

 

 

2,003

 

 

2,015

Total selling, general and administrative expenses

 

 

16,175

 

 

17,694

 

 

5,087

 

 

4,903

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

5,933

 

 

2,002

 

 

1,968

 

 

1,400

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net

 

 

416

 

 

744

 

 

118

 

 

296

Foreign currency transaction gain (loss)

 

 

39

 

 

40

 

 

(52)

 

 

42

Income before provision for income taxes

 

 

6,388

 

 

2,786

 

 

2,034

 

 

1,738

Provision for income taxes

 

 

1,624

 

 

987

 

 

589

 

 

420

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,764

 

$

1,799

 

$

1,445

 

$

1,318

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share - Basic

 

$

1.06

 

$

0.40

 

$

0.32

 

$

0.29

Income per common share - Diluted 

 

$

1.06

 

$

0.40

 

$

0.32

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

 

4,415

 

 

4,344

 

 

4,428

 

 

4,386

Weighted average common shares outstanding - Diluted

 

 

4,415

 

 

4,344

 

 

4,428

 

 

4,386

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid per common share

 

$

0.51

 

$

0.51

 

$

0.17

 

 

0.17

 

(1) Includes $1,661 of stock compensation during the nine months ended September 30, 2018.

Supplemental Revenue Information (unaudited)

 

The table below presents net sales by disaggregated revenue category:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

Three months ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

 

2018

 

 

2019

    

2018

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardware, software and other products

 

$

133,482

 

$

120,073

 

$

47,508

 

$

44,100

Software - security & highly interdependent with support

 

 

5,417

 

 

5,029

 

 

1,798

 

 

1,433

Maintenance, support & other services

 

 

8,998

 

 

7,287

 

 

3,057

 

 

2,390

Net sales

 

$

147,897

 

$

132,389

 

$

52,363

 

$

47,923

 

Reconciliation of GAAP and Non-GAAP Financial Measures (unaudited)

 

The table below presents net sales reconciled to adjusted gross billings (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

Three months ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

2018

 

 

2019

    

2018

Adjusted gross billings (Non-GAAP) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

147,897

 

$

132,389

 

$

52,363

 

$

47,923

Cost of sales related to Software - security and highly interdependent with support and maintenance, support and other services

 

 

285,622

 

 

243,226

 

 

96,695

 

 

86,054

Adjusted gross billings (Non-GAAP)

 

$

433,519

 

$

375,615

 

$

149,058

 

$

133,977

 

(1)

We define adjusted gross billings as net sales in accordance with U.S. GAAP, adjusted for the cost of sales related to Software – security and highly interdependent with support and maintenance, support and other services. We provided a reconciliation of adjusted gross billings to net sales, which is the most directly comparable U.S. GAAP measure. We use adjusted gross billings of product and services as a supplemental measure of our performance to gain insight into the volume of business generated by our business, and to analyze the changes to our accounts receivable and accounts payable. Our use of adjusted gross billings of product and services as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate adjusted gross billings of product and services or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The tables below present net income reconciled to net income excluding separation expenses, net of taxes (Non-GAAP) and diluted earnings per share to diluted earnings per share, excluding separation expenses, net of taxes (Non-GAAP) (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

Three months ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

 

2018

 

 

2019

    

2018

Net income reconciled to net income excluding separation expenses, net of taxes (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

6,388

 

$

2,786

 

$

2,034

 

$

1,738

Provision for income taxes

 

 

1,624

 

 

987

 

 

589

 

 

420

Net income

 

 

4,764

 

 

1,799

 

 

1,445

 

 

1,318

Separation expenses

 

 

100

 

 

2,446

 

 

 -

 

 

 -

Income tax benefits related to separation expenses

 

 

(24)

 

 

(438)

 

 

 -

 

 

 -

Net income excluding separation expenses, net of taxes

 

$

4,840

 

$

3,807

 

$

1,445

 

$

1,318

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

Three months ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

 

2018

 

 

2019

    

2018

Diluted earnings per share reconciled to diluted earnings per share excluding separation expenses, net of taxes  (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

1.06

 

$

0.40

 

$

0.32

 

$

0.29

Separation expenses

 

 

0.01

 

 

0.55

 

 

 -

 

 

 -

Income tax benefit related to separation expenses

 

 

 -

 

 

(0.10)

 

 

 -

 

 

 -

Diluted earnings per share excluding separation expenses, net of taxes

 

$

1.07

 

$

0.85

 

$

0.32

 

$

0.29

 

 

(2)

We define net income excluding separation expenses, net of taxes, as net income, plus separation expense, less the income tax benefit attributable to the separation expenses. We provided a reconciliation of net income excluding separation expenses, net of taxes, to net income, as well as the related amounts per share, which are the most directly comparable U.S. GAAP measure. We use net income excluding separation expense as a supplemental measure of our performance to gain insight into comparison of our businesses profitability when compared to the prior year. Our use of net income excluding separation expenses, net of taxes has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate separation expenses net of taxes, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

 


The following information was filed by Wayside Technology Group, Inc. (WSTG) on Wednesday, November 6, 2019 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Wayside Technology 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 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Wayside Technology Group, Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account