Wayside Technology Group, Inc. Reports Third Quarter 2013 Results and Declares Quarterly Dividend

SHREWSBURY, NJ -- (Marketwired) -- 10/24/13 -- Wayside Technology Group, Inc. (NASDAQ: WSTG)

Revenue:                      $70.5 million
Income from operations:       $1.8 million
Net income:                   $1.3 million
Diluted earnings per share:   $0.29 per share
Dividend declared:            $0.17 per share

Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2013. The results will be discussed in a conference call to be held on October 25, 2013 at 10:00 a.m. EDT. The dial-in telephone number is (866) 793-1341 and the pass code is "WSTG." This conference call will be webcast by NASDAQ OMX and can be accessed at Wayside Technology's Web site at www.waysidetechnology.com/earnings-call.

"I am pleased to report solid financial results. Our Lifeboat Distribution segment continued to deliver year over year growth, while our TechXtend division was down as compared to an exceptionally strong quarter last year," said Simon F. Nynens, Chairman and Chief Executive Officer. "On a year to date basis, our results have essentially matched last year's strong performance. As a result, the Board of Directors has agreed to increase the dividend declared from $0.16 per share to $0.17 per share. The Company has now paid dividends consecutively for over the last 40 quarters."

Cash and cash equivalents amounted to $14.7 million, representing 45% of equity as of September 30, 2013. Working capital amounted to $24.4 million, representing 74% of equity as of September 30, 2013.

Net sales for the third quarter of 2013 decreased 7% or $5.1 million to $70.5 million compared to $75.5 million for the same period in 2012. Net sales for the third quarter of 2013 for our Lifeboat segment were $56.9 million compared to $56.0 million in the third quarter of 2012, representing an increase of $0.9 million or 2%. Net sales for the third quarter of 2013 for our TechXtend segment were $13.6 million compared to $19.5 million in the third quarter of 2012, representing a decrease of $5.9 million or 30%.

The increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration. The decrease in net sales in the TechXtend segment was primarily due to a decrease in large single sales transactions and a decrease in extended payment terms sales transactions as compared to exceptionally strong levels of large single sales transactions and extended payment terms sales transactions in the third quarter ended September 30, 2012.

Gross Profit for the third quarter ended September 30, 2013 was $5.3 million compared to $5.7 million for the third quarter of 2012. Total gross profit for our Lifeboat segment was $3.8 million compared to $3.7 million in the third quarter of 2012, representing a 4% increase. The increase in gross profit for the Lifeboat segment was due to higher sales volume in the current year. Total gross profit for our TechXtend segment was $1.4 million compared to $2.0 million in the third quarter of 2012, representing a 29% decrease. The decrease in gross profit in the TechXtend segment was the result of the decreased sales volume, including a decrease in large single sales transactions and a decrease in extended payment terms sales transactions. Vendor rebates and discounts for the quarter ended September 30, 2013 amounted to $0.3 million or 0.4% of net sales compared to $0.4 million or 0.5% of net sales for the third quarter of 2012.

Gross profit margin (gross profit as a percentage of net sales) for the third quarter of 2013 and 2012 was 7.5% for each period.

Total selling, general, and administrative ("SG&A") expenses for the third quarter of 2013 were $3.5 million compared to $3.6 million for the third quarter of 2012, representing a decrease of $0.1 million or 4%. This decrease is primarily the result of a decrease in commissions and bonus for our TechXtend segment (which are based on gross profit and segment income). As a percentage of net sales, SG&A expenses for the third quarter of 2013 were 4.9% compared to 4.8% for the third quarter of 2012.

Net income and diluted earnings per share for the third quarter of 2013 were $1.3 million and $0.29, respectively, compared to $1.4 million and $0.29 in the prior year.

On October 23, 2013, the Board of Directors declared a quarterly dividend of $0.17 per share of its common stock, payable November 15, 2013 to shareholders of record on November 5, 2013. This represents a $0.01 per share increase in the dividend, as compared to Q2-2013 and prior.

About Wayside Technology Group, Inc.

Wayside Technology Group, Inc. (NASDAQ: WSTG) was founded in 1982 and is a unified and integrated technology company providing products and solutions for corporate resellers, VARs, and developers as well as business, government and educational entities. The company offers technology products from software publishers and manufacturers including Acronis, Bluebeam Software, CA Technologies, DataCore, Datawatch, Dell/Dell Software, Flexera Software, GFI, Hewlett Packard, Infragistics, Intel Software, Lenovo, Microsoft, Mindjet, SAP/Sybase, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Veeam Software, Vision Solutions and VMware.

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 -



              WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
         (Amounts in thousands, except share and per share amounts)

                                                    September     December
                                                     30, 2013     31, 2012
                                                   -----------  -----------
                                                   (unaudited)

ASSETS

Current assets
  Cash and cash equivalents                        $    14,743  $     9,835
  Marketable securities                                      -        4,411
  Accounts receivable, net                              49,855       61,388
  Inventory - finished goods                             1,210        1,717
  Prepaid expenses and other current assets              1,591        1,281
  Deferred income taxes                                    280          280
                                                   -----------  -----------
Total current assets                                    67,679       78,912

Equipment and leasehold improvements, net                  303          375
Accounts receivable long-term                            8,069       11,851
Other assets                                               159           71
Deferred income taxes                                      201          236
                                                   -----------  -----------

                                                   $    76,411  $    91,445
                                                   ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable and accrued expenses            $    43,311  $    59,265
  Current portion- capital lease obligation                  -           55
                                                   -----------  -----------
Total current liabilities                               43,311       59,320


Commitments and contingencies

Stockholders' equity
  Common stock, $.01 par value; 10,000,000 shares
   authorized, 5,284,500 shares
  issued, and 4,674,097 and 4,740,873 shares
   outstanding, respectively                                53           53
  Additional paid-in capital                            28,456       27,712
  Treasury stock, at cost, 610,403 and 543,627
   shares, respectively                                 (6,743)      (5,373)
  Retained earnings                                     10,973        9,316
  Accumulated other comprehensive income                   361          417
                                                   -----------  -----------
Total stockholders' equity                              33,100       32,125
                                                   -----------  -----------
                                                   $    76,411  $    91,445
                                                   ===========  ===========




               WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                 (Unaudited)
                (Amounts In thousands, except per share data)

                                        Nine months ended Three months ended
                                          September 30,      September 30,
                                          2013     2012     2013      2012
                                        -------- -------- --------  --------
Revenues
  Lifeboat segment                      $171,949 $158,838 $ 56,871  $ 55,989
  TechXtend segment                       38,588   52,772   13,591    19,545
                                        -------- -------- --------  --------
  Total Revenue                          210,537  211,610   70,462    75,534

Cost of sales
  Lifeboat segment                       159,820  147,502   53,025    52,282
  TechXtend segment                       34,174   47,253   12,172    17,554
                                        -------- -------- --------  --------
  Total Cost of sales                    193,994  194,755   65,197    69,836
                                        -------- -------- --------  --------

Gross Profit
  Lifeboat segment                        12,129   11,336    3,846     3,707
  TechXtend segment                        4,414    5,519    1,419     1,991
                                        -------- -------- --------  --------
  Total Gross Profit                      16,543   16,855    5,265     5,698
                                        -------- -------- --------  --------

Operating expenses
  Selling costs                            5,835    5,857    1,830     1,937
  Stock based compensation                   830      743      278       281
  Other general and administrative
   expenses                                4,546    4,548    1,372     1,393
                                        -------- -------- --------  --------
Total Selling, general and
 administrative expenses                  11,211   11,148    3,480     3,611
                                        -------- -------- --------  --------

Income from operations                     5,332    5,707    1,785     2,087

Interest income, net                         416      394      140       140
Foreign currency transaction gain
 (loss)                                       10       13      (11)       12
                                        -------- -------- --------  --------
Income before income tax provision         5,758    6,114    1,914     2,239
Provision for income taxes                 1,868    2,428      584       887

                                        -------- -------- --------  --------
Net income                              $  3,890 $  3,686 $  1,330  $  1,352
                                        ======== ======== ========  ========

Net income per common share - Basic     $   0.87 $   0.83 $   0.30  $   0.30
                                        ======== ======== ========  ========
Net income per common share - Diluted   $   0.85 $   0.80 $   0.29  $   0.29
                                        ======== ======== ========  ========

Weighted average common shares
 outstanding - Basic                       4,457    4,467    4,442     4,502
                                        ======== ======== ========  ========
Weighted average common shares
 outstanding - Diluted                     4,568    4,635    4,551     4,643
                                        ======== ======== ========  ========

Dividends paid per common share         $   0.48 $   0.48 $   0.16  $   0.16
                                        ======== ======== ========  ========


Source: Wayside Technology Group