Wayside Technology Group, Inc. Reports 2014 Third Quarter Results, Declares Quarterly Dividend and Names F. Duffield Meyercord as Lead Director

SHREWSBURY, NJ -- (Marketwired) -- 10/30/14 -- Wayside Technology Group, Inc. (NASDAQ: WSTG)


                                   Q3 2014:
Revenue:                           $90.5 million
Income from operations:            $1.9 million
Net income:                        $1.4 million
Diluted earnings per share:        $0.29 per share

Dividend declared - $0.17 per share

Wayside Technology Group, Inc. (NASDAQ: WSTG) today announced financial results for the third quarter ended September 30, 2014. The results will be discussed in a conference call to be held on Friday, October 31, 2014 at 10:00 a.m. EDT. The dial-in telephone number is (866) 847-7864 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 for Q3 2014. Overall, revenue increased 28% to a record $90.5 million and income from operations increased 6% over the same period last year," said Simon F. Nynens, Chairman and Chief Executive Officer.

Cash and long term receivables amounted to $26.4 million, representing 68% of equity as of September 30, 2014. Working capital amounted to $27.3 million, representing 70% of equity as of September 30, 2014.

Net sales for the third quarter ended September 30, 2014 increased 28% or $20.0 million to $90.5 million compared to $70.5 million for the same period in 2013. Total sales for the third quarter of 2014 for our Lifeboat Distribution segment were $77.4 million compared to $56.9 million in the third quarter of 2014, representing an increase of $20.5 million or 36%. Total sales for the third quarter of 2014 for our TechXtend segment were $13.1 million compared to $13.6 million in the third quarter of 2013, representing a decrease of $0.5 million or 4%.

The 36% increase in net sales for the Lifeboat Distribution segment was mainly a result of the strengthening of our account penetration, our continued focus on the expanding virtual infrastructure-centric business, product mix and the addition of several key product lines. The 4% decrease in net sales in the TechXtend segment was primarily due to a decrease in extended payment terms sales transactions as compared to the same period in 2013.

Gross Profit for the third quarter ended September 30, 2014 was $6.2 million, a 17% increase as compared to $5.3 million for the third quarter of 2013. Gross profit for our Lifeboat segment in the third quarter of 2014 was $4.7 million compared to $3.8 million for the third quarter of 2013, representing a 23% increase. Gross profit for our TechXtend segment was essentially flat at $1.4 million in the third quarter of 2014 and 2013.

Gross profit margin (gross profit as a percentage of net sales) for the third quarter ended September 30, 2014 was 6.8% compared to 7.5% for the third quarter of 2013. Gross profit margin for the nine months ended September 30, 2014 was 7.2% compared to 7.9% in the same period in 2013. Gross profit margin for our Lifeboat segment for the third quarter of 2014 was 6.1% compared to 6.8% for the third quarter of 2013. The decrease in gross profit margin for the Lifeboat Distribution segment was primarily caused by competitive pricing pressures and product mix. Gross profit margin for our TechXtend segment for the third quarter of 2014 was 10.9% compared to 10.4% for the third quarter of 2013, due primarily to a decline in extended payment terms sales transactions in the third quarter of 2014 as compared to the same period in 2013.

Total selling, general, and administrative ("SG&A") expenses for the third quarter of 2014 were $4.3 million compared to $3.5 million for the third quarter of 2013. This increase is primarily the result of an increase in employee and employee related expenses (salaries, commissions, bonus accruals, benefits and severance expenses of $0.3 million) and occupancy expenses in 2014 compared to 2013.

For the three months ended September 30, 2014, the Company recorded a provision for income taxes of $0.6 million or 31.6% of income, compared to $0.6 million or 30.5% of income for the same period in
2013.

Net income and diluted earnings per share for the third quarter of 2014 were $1.4 million and $0.29, respectively, compared to $1.3 million and $0.29, respectively, for the third quarter of 2013.

On October 29, 2014, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock payable November 17, 2014 to shareholders of record on November 10, 2014.

In light of the continued growth of the business and the important strategic determinations undertaken by the Board of Directors, on October 29, 2014, the Board, recognizing that the Company's Chairman, President and Chief Executive Officer roles are unified and filled by Simon Nynens, decided to name a lead director from among its independent directors and to clearly define the lead director's role and responsibilities. The Board named F. Duffield Meyercord as its lead director. The Board believes that this action is consistent with best corporate practices, enhancing both transparency of Board actions and Board independence.

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, Dell/Dell Software, Flexera Software, Hewlett Packard, Infragistics, Intel Software, JetBrains, Lenovo, Microsoft, Mindjet, Samsung, SAP/Sybase, SmartBear, SolarWinds, Sophos, StorageCraft Technology, TechSmith, Telerik, Unitrends, Veeam Software 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 30,   December 31,
                                                    2014           2013
                                               -------------  -------------
                                                (unaudited)

                                   ASSETS

Current assets
  Cash and cash equivalents                    $      15,606  $      19,609
  Accounts receivable, net                            60,721         60,796
  Inventory, net                                       1,414          1,315
  Prepaid expenses and other current assets              845          2,117
  Deferred income taxes                                  270            218
                                               -------------  -------------
Total current assets                                  78,856         84,055

Equipment and leasehold improvements, net                355            324
Accounts receivable long-term                         10,834         10,006
Other assets                                             163            159
Deferred income taxes                                    216            216
                                               -------------  -------------

Total assets                                   $      90,424  $      94,760
                                               =============  =============

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable and accrued expenses        $      51,621  $      60,039
                                               -------------  -------------
Total current liabilities                             51,621         60,039


Commitments and contingencies

Stockholders' equity
  Common stock, $.01 par value; 10,000,000
   shares authorized, 5,284,500 shares
  issued, and 4,881,523 and 4,653,293 shares
   outstanding, respectively                              53             53
  Additional paid-in capital                          30,716         28,791
  Treasury stock, at cost, 402,977 and 631,207
   shares, respectively                               (6,007)        (7,017)
  Retained earnings                                   14,199         12,695
  Accumulated other comprehensive (loss)
   income                                               (158)           199
                                               -------------  -------------
Total stockholders' equity                            38,803         34,721
                                               -------------  -------------
Total liabilities and stockholders' equity     $      90,424  $      94,760
                                               =============  =============



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

                                 Nine months ended     Three months ended
                                   September 30,          September 30,
                                 2014        2013       2014        2013
                              ----------  ---------- ----------  ----------
                                    (Unaudited)            (Unaudited)
                              ---------------------- ----------------------
Revenues
  Lifeboat segment            $  206,655  $  171,949 $   77,416  $   56,871
  TechXtend segment               39,980      38,588     13,089      13,591
                              ----------  ---------- ----------  ----------
  Total Revenue                  246,635     210,537     90,505      70,462

Cost of sales
  Lifeboat segment               193,180     159,820     72,670      53,025
  TechXtend segment               35,602      34,174     11,659      12,172
                              ----------  ---------- ----------  ----------
  Total Cost of sales            228,782     193,994     84,329      65,197
                              ----------  ---------- ----------  ----------

Gross Profit
  Lifeboat segment                13,475      12,129      4,746       3,846
  TechXtend segment                4,378       4,414      1,430       1,419
                              ----------  ---------- ----------  ----------
  Total Gross Profit              17,853      16,543      6,176       5,265
                              ----------  ---------- ----------  ----------

Operating expenses
  Selling costs                    6,453       5,835      2,379       1,830
  Share- based compensation          853         830        278         278
  Other general and
   administrative expenses         4,987       4,546      1,634       1,372
                              ----------  ---------- ----------  ----------
Total Selling, general and
 administrative expenses          12,293      11,211      4,291       3,480
                              ----------  ---------- ----------  ----------

Income from operations             5,560       5,332      1,885       1,785

Interest, net                        375         416        121         140
Foreign currency transaction
 (loss) gain                          (8)         10         (4)        (11)
                              ----------  ---------- ----------  ----------
Income before provision for
 income taxes                      5,927       5,758      2,002       1,914
Provision for income taxes         2,016       1,868        632         584

                              ----------  ---------- ----------  ----------
Net income                    $    3,911  $    3,890 $    1,370  $    1,330
                              ==========  ========== ==========  ==========

Income per common share -
 Basic                        $     0.84  $     0.87 $     0.29  $     0.30
                              ==========  ========== ==========  ==========
Income per common share -
 Diluted                      $     0.83  $     0.85 $     0.29  $     0.29
                              ==========  ========== ==========  ==========

Weighted average common
 shares outstanding - Basic        4,639       4,457      4,716       4,442
                              ==========  ========== ==========  ==========
Weighted average common
 shares outstanding - Diluted      4,685       4,568      4,736       4,551
                              ==========  ========== ==========  ==========

Source: Wayside Technology Group