ADDvantage Technologies Group, Inc. (NASDAQ:AEY),
today announced its financial results for the three and six month
periods ended March 31, 2016.
“The sales activity in the second fiscal quarter
of 2016 rebounded from the fiscal first quarter of 2016, as we
reported $10.6 million in revenue for the second quarter, a 28%
increase sequentially, though revenue was down 7% compared to the
second quarter of fiscal 2015. The sequential improvement was
largely driven by a positive change in market dynamics as we
witnessed greater demand across both the Telco and Cable TV
segments compared with the first fiscal quarter of 2016,” commented
David Humphrey, President and CEO of ADDvantage Technologies.
“The results for the quarter were in line with our
expectations that market forces would begin to stabilize this
quarter, enabling our customers to gain greater visibility into
their budgetary constraints and thereby allowing them to make
purchase decisions.”
“Our ability to rapidly regain customers as market conditions
improved reflects the proactivity of our sales team and its strong
industry relationships. This ability to withstand market
fluctuations, combined with our recently announced strategic joint
venture with YKTG, positions us to grow the business in the second
half of the year. Furthermore, our balance sheet remains strong,
and we continue to seek out acquisition opportunities in the
broader telecommunications sector with a view to expanding market
share over the long term,” concluded Mr. Humphrey.
Consolidated sales for the three months ended
March 31, 2016 decreased $0.8 million, or 7%, to $10.6 million
compared with $11.4 million for the same period ended March 31,
2015. The decrease in consolidated sales is attributable to a
decrease in sales of $1.2 million from the Telco segment, and was
partially offset by an increase in sales of $0.2 million for the
Cable TV segment sales.
Consolidated operating, selling, general and
administrative expenses decreased $0.5 million, or 14%, to $3.3
million for the three months ended March 31, 2016 from $3.8 million
for the same period last year. This decrease was primarily
due to a $0.7 million decrease in Telco segment expenses, and was
partially offset by an increase of $0.2 million in Cable TV segment
expenses. The decrease in the Telco segment included a $0.4
million decrease in expenses for the annual earn-out payments
related to the acquisition of Nave Communications.
Net income for the three months ended March 31,
2016, was $146 thousand, or $0.01 per diluted share, compared with
$234 thousand, or $0.02 per diluted share, for the same period of
2015.
Consolidated EBITDA for the three months ended
March 31, 2016 was $0.6 million compared with $0.7 million for the
same period ended March 31, 2015.
Consolidated sales for the six months ended
March 31, 2016 decreased $3.4 million, or 15%, to $18.8 million
compared with $22.2 million for the same period ended March 31,
2015. Sales for the Cable TV segment decreased by $1.6
million to $11.0 million for the six months ended March 31, 2016
from $12.6 million for the same period last year, while sales for
the Telco segment decreased $2.0 million to $7.9 million for the
six months ended March 31, 2016 from $9.9 million for the same
period last year.
Consolidated operating, selling, general and
administrative expenses decreased $1.0 million to $5.9 million for
the six months ended March 31, 2016 from $6.9 million for the same
period last year. This decrease was primarily due to a $1.1 million
decrease in Telco segment expenses and was partially offset by an
increase of $0.1 million in expenses in the Cable TV segment.
The decrease in the Telco segment included a $0.7 million
decrease in expenses for the annual earn-out payments related to
the acquisition of Nave Communications.
Net income for the six month period ended March
31, 2016 was $170 thousand, or $0.02 per diluted share, compared
with $650 thousand, or $0.06 per diluted share, for the same period
of 2015.
Consolidated EBITDA for the six months ended
March 31, 2016 was $1.0 million compared with $1.8 million for the
same period ended March 31, 2015.
Cash and cash equivalents were $5.0 million as
of March 31, 2016, compared with $6.1 million as of September 30,
2015. As of March 31, 2016, the Company had inventory of
$21.8 million compared with $23.6 million as of September 30,
2015.
Earnings Conference Call
The Company will host a conference call today,
Tuesday, May 10th, at 12:00 p.m. Eastern Time featuring remarks by
David Humphrey, President and Chief Executive Officer, Dave
Chymiak, Chief Technology Officer, and Scott Francis, Chief
Financial Officer. 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.
The dial-in number for the conference call is
888-438-5535 (domestic) or 719-325-2472 (international). All
dial-in participants must use the following code to access the
call: 4740927. Please call at least five minutes before the
scheduled start time.
About ADDvantage Technologies Group,
Inc. ADDvantage Technologies Group, Inc. (NASDAQ:AEY)
supplies the cable television (Cable TV) and telecommunications
industries with a comprehensive line of new and used
system-critical network equipment and hardware from a broad range
of leading manufacturers. The equipment and hardware ADDvantage
distributes is used to acquire, distribute, and protect the
communications signals carried on fiber optic, coaxial cable and
wireless distribution systems, including television programming,
high-speed data (Internet) and telephony. In addition, ADDvantage
operates a national network of technical repair centers focused
primarily on Cable TV equipment and recycles surplus and obsolete
Cable TV and telecommunications equipment.
ADDvantage operates through its subsidiaries,
Tulsat, Tulsat-Atlanta, Tulsat-Arizona, Tulsat-Nebraska,
Tulsat-Tennessee, Tulsat-Texas, NCS Industries, ComTech Services
and Nave Communications. For more information, please visit the
corporate web site at www.addvantagetechnologies.com.
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.
Non-GAAP Financial
MeasuresEBITDA is a supplemental, non-GAAP financial
measure. EBITDA is defined as earnings before interest
expense, income taxes, depreciation and amortization.
Management believes providing EBITDA in this release is useful to
investors’ understanding and assessment of the Company’s ongoing
continuing operations and prospects for the future and it is a used
by the financial community to evaluate the market value of
companies considered to be in similar businesses. Since
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. EBITDA, as calculated in the table below, may
not be comparable to similarly titled measures employed by other
companies. In additions, EBITDA is not necessarily a measure
of our ability to fund our cash needs.
(Tables follow)
|
|
ADDVANTAGE TECHNOLOGIES GROUP, INC. |
CONSOLIDATED CONDENSED STATEMENTS OF INCOME |
(UNAUDITED) |
|
|
|
Three Months Ended March 31, |
|
|
Six Months Ended March 31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Sales |
$ |
10,587,187 |
|
$ |
11,366,539 |
|
$ |
18,836,855 |
|
$ |
22,203,697 |
|
Cost of sales |
|
7,002,575 |
|
|
7,123,027 |
|
|
12,486,863 |
|
|
14,128,382 |
|
Gross profit |
|
3,584,612 |
|
|
4,243,512 |
|
|
6,349,992 |
|
|
8,075,315 |
|
Operating, selling,
general and administrative expenses |
|
3,256,403 |
|
|
3,803,155 |
|
|
5,925,028 |
|
|
6,878,614 |
|
Income from
operations |
|
328,209 |
|
|
440,357 |
|
|
424,964 |
|
|
1,196,701 |
|
Other income
(expense): |
|
|
|
|
Other income |
|
109,554 |
|
|
– |
|
|
109,554 |
|
|
– |
|
Interest income |
|
2,172 |
|
|
– |
|
|
2,172 |
|
|
– |
|
Loss from equity method
investment |
|
(140,998 |
) |
|
– |
|
|
(140,998 |
) |
|
– |
|
Interest expense |
|
(62,307 |
) |
|
(79,102 |
) |
|
(130,068 |
) |
|
(164,523 |
) |
Total other income
(expense), net |
|
(91,579 |
) |
|
(79,102 |
) |
|
(159,340 |
) |
|
(164,523 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes |
|
236,630 |
|
|
361,255 |
|
|
265,624 |
|
|
1,032,178 |
|
Provision for income
taxes |
|
91,000 |
|
|
127,000 |
|
|
96,000 |
|
|
382,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
145,630 |
|
$ |
234,255 |
|
$ |
169,624 |
|
$ |
650,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
$ |
0.01 |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.06 |
|
Diluted |
$ |
0.01 |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.06 |
|
Shares used in per share
calculation: |
|
|
|
|
Basic |
|
10,092,319 |
|
|
10,051,844 |
|
|
10,080,729 |
|
|
10,046,525 |
|
Diluted |
|
10,092,319 |
|
|
10,051,844 |
|
|
10,080,729 |
|
|
10,046,525 |
|
|
|
Three Months Ended March 31, 2016 |
|
|
Three Months Ended March 31, 2015 |
|
|
|
Cable TV |
|
|
Telco |
|
|
Total |
|
|
Cable TV |
|
|
Telco |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
$ |
336,279 |
|
$ |
(8,070 |
) |
$ |
328,209 |
|
$ |
347,839 |
|
$ |
92,518 |
|
$ |
440,357 |
|
Depreciation |
|
80,802 |
|
|
27,367 |
|
|
108,169 |
|
|
70,149 |
|
|
29,930 |
|
|
100,079 |
|
Amortization |
|
− |
|
|
206,451 |
|
|
206,451 |
|
|
− |
|
|
206,451 |
|
|
206,451 |
|
EBITDA |
$ |
417,081 |
|
$ |
225,748 |
|
$ |
642,829 |
|
$ |
417,988 |
|
$ |
328,899 |
|
$ |
746,887 |
|
|
|
Six Months Ended March 31, 2016 |
|
|
Six Months Ended March 31, 2015 |
|
|
|
Cable TV |
|
|
Telco |
|
|
Total |
|
|
Cable TV |
|
|
Telco |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
$ |
453,119 |
|
$ |
(28,155 |
) |
$ |
424,964 |
|
$ |
966,650 |
|
$ |
230,051 |
|
$ |
1,196,701 |
|
Depreciation |
|
153,266 |
|
|
50,083 |
|
|
203,349 |
|
|
141,713 |
|
|
57,174 |
|
|
198,887 |
|
Amortization |
|
− |
|
|
412,902 |
|
|
412,902 |
|
|
− |
|
|
412,903 |
|
|
412,903 |
|
EBITDA |
$ |
606,385 |
|
$ |
434,830 |
|
$ |
1,041,215 |
|
$ |
1,108,363 |
|
$ |
700,128 |
|
$ |
1,808,491 |
|
|
|
ADDVANTAGE TECHNOLOGIES GROUP, INC. |
CONSOLIDATED CONDENSED BALANCE SHEETS |
(UNAUDITED) |
|
|
|
March 31,2016 |
|
|
September30, 2015 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
4,969,254 |
|
$ |
6,110,986 |
|
Accounts receivable, net of
allowance for doubtful accounts of $250,000 |
|
5,650,300 |
|
|
4,286,377 |
|
Income tax receivable |
|
175,096 |
|
|
– |
|
Inventories, net of allowance for
excess and obsolete |
|
|
inventory of $3,056,628 and
$2,756,628, respectively |
|
21,757,901 |
|
|
23,600,996 |
|
Prepaid expenses |
|
354,962 |
|
|
153,454 |
|
Deferred income taxes |
|
1,740,000 |
|
|
1,776,000 |
|
Total current assets |
|
34,647,513 |
|
|
35,927,813 |
|
|
|
|
Property and equipment, at
cost |
|
11,066,923 |
|
|
10,785,799 |
|
Less: Accumulated
depreciation |
|
(4,774,500 |
) |
|
(4,584,796 |
) |
Net property and
equipment |
|
6,292,423 |
|
|
6,201,003 |
|
|
|
|
Investment in and loans to
equity method investee |
|
280,562 |
|
|
– |
|
Intangibles, net of
accumulated amortization |
|
5,386,571 |
|
|
5,799,473 |
|
Goodwill |
|
3,910,089 |
|
|
3,910,089 |
|
Other assets |
|
135,988 |
|
|
134,678 |
|
|
|
|
|
|
|
|
Total assets |
$ |
50,653,146 |
|
$ |
51,973,056 |
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
$ |
2,055,719 |
|
$ |
1,784,482 |
|
Accrued expenses |
|
979,778 |
|
|
1,358,681 |
|
Income tax payable |
|
– |
|
|
122,492 |
|
Notes payable – current
portion |
|
888,845 |
|
|
873,752 |
|
Other current liabilities |
|
941,534 |
|
|
982,094 |
|
Total current
liabilities |
|
4,865,876 |
|
|
5,121,501 |
|
|
|
|
Notes payable, less current
portion |
|
3,917,289 |
|
|
4,366,130 |
|
Deferred income taxes |
|
296,000 |
|
|
286,000 |
|
Other liabilities |
|
114,679 |
|
|
1,064,717 |
|
Total liabilities |
|
9,193,844 |
|
|
10,838,348 |
|
|
|
|
Shareholders’ equity: |
|
|
Common stock, $.01 par value;
30,000,000 shares authorized; 10,634,893 and 10,564,221 shares
issued, respectively; 10,134,235 and 10,063,563 shares outstanding,
respectively |
|
106,349 |
|
|
105,642 |
|
Paid in capital |
|
(4,958,006 |
) |
|
(5,112,269 |
) |
Retained earnings |
|
47,310,973 |
|
|
47,141,349 |
|
Total shareholders’ equity before
treasury stock |
|
42,459,316 |
|
|
42,134,722 |
|
|
|
|
Less: Treasury stock, 500,658
shares, at cost |
|
(1,000,014 |
) |
|
(1,000,014 |
) |
Total shareholders’
equity |
|
41,459,302 |
|
|
41,134,708 |
|
|
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
50,653,146 |
|
$ |
51,973,056 |
|
For further information
Company Contact:
Scott Francis
(918) 251-9121
KCSA Strategic Communications
Garth Russell
(212) 896-1250
grussell@kcsa.com
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