ADDvantage Technologies Group, Inc. (Nasdaq:AEY),
today announced its financial results for the three month period
ended December 31, 2014.
Sales for the three months ended December 31, 2014 increased 77%
to $10.8 million compared with $6.1 million for the same period
ended December 31, 2013. The increase in sales is primarily
attributable to sales from the Telco segment as a result of the
Nave Communications acquisition on February 28, 2014. Sales for the
Cable TV segment increased to $6.8 million for the three months
ended December 31, 2014 from $6.1 million for the same period last
year. The increase in Cable TV sales was due primarily to an
increase in general demand from MSOs for new equipment. Sales for
the Telco segment were $4.0 million for the three months ended
December 31, 2014 and zero for the same period last year as a
result of the acquisition of Nave Communications. Sales for the
Telco segment consisted of $3.7 million of refurbished equipment
sales and $0.3 million of recycling revenue.
Operating, selling, general and administrative expenses
increased $1.5 million, or 89%, to $3.1 million for the three
months ended December 31, 2014 from $1.6 million for the same
period last year. This increase was primarily due to $1.7 million
in Telco segment expenses as a result of the Nave Communications
acquisition, and was partially offset by a decrease of $0.2 million
in expenses in the cable segment.
Net income from continuing operations for the three months ended
December 31, 2014 was $0.4 million, or $0.04 per diluted share,
compared with a net income from continuing operations of $0.1
million, or $0.01 per diluted share, for the same period of 2013.
Discontinued operations for the three months ended December 31,
2013 included the operations of Adams Global Communications prior
to the sale on January 31, 2014.
EBITDA for the three months ended December 31, 2014 was $1.1
million compared with $0.3 million for the same period ended
December 31, 2013.
Cash and cash equivalents were $6.5 million as of December 31,
2014, compared with $5.3 million as of September 30, 2014. As of
December 31, 2014, we had inventory of $23.1 million compared with
$22.8 million as of September 30, 2014. The increase in inventory
was due primarily to used inventory purchases by Nave
Communications.
"This was a solid quarter across both of our operating segments.
Our strategy to reinvest in the business by expanding the Cable TV
salesforce and investments in inventory for both the Cable TV and
Telco segments have contributed to these results," commented David
Humphrey, President and CEO of ADDvantage Technologies. "The Cable
TV segment continues to benefit from our expanded range of product
offerings to reach a wider selection of customers. This includes
reaching customers in new geographic areas where we believe
opportunities exist and can be addressed with a minimal commitment
of our resources."
"The Company is well positioned to meet demand in the Telco
market, with Nave Communications now operating in line with
expectations for two consecutive quarters. We are pleased with the
results that we are seeing from Nave's experienced sales teams and
expect it to continue to meet our expectations."
"As we look ahead, the ever-increasing demand for Internet
services provides an opportunity for ADDvantage to steadily
increase sales organically. Therefore, we will continue to further
strengthen our salesforce in order to maintain and build strong
customer relationships. We will also continue to look for possible
acquisitions that could further diversify our commercial offering
and enable us to gain market share in the telecommunications
industry," concluded Mr. Humphrey.
Earnings Conference Call
As previously announced, the Company will host a conference call
on Tuesday, February 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 888-504-7963 (domestic)
or 719-325-2354 (international). All dial-in participants must use
the following code to access the call: 6829178. Please call at
least five minutes before the scheduled start time.
For interested individuals unable to join the conference call, a
replay of the call will be available through February 24, 2015 at
877-870-5176 (domestic) or 858-384-5517 (international).
Participants must use the following code to access the replay of
the call: 6829178. 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. supplies the cable
television (CATV) 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 CATV equipment and
recycles surplus and obsolete CATV and telecommunications
equipment.
ADDvantage operates through its subsidiaries, Tulsat,
Tulsat-Atlanta, Tulsat-Nebraska, 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 Measures
EBITDA 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 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 December
31, |
| |
2014 |
2013 |
| Sales |
$ 10,837,158 |
$ 6,119,733 |
| Cost of sales |
7,005,355 |
4,256,506 |
| Gross profit |
3,831,803 |
1,863,227 |
| Operating, selling, general and
administrative expenses |
3,075,459 |
1,629,875 |
| Income from operations |
756,344 |
233,352 |
| Interest expense |
85,421 |
5,983 |
| Income before provision for income taxes |
670,923 |
227,369 |
| Provision for income taxes |
255,000 |
88,000 |
| Income from continuing operations |
415,923 |
139,369 |
| |
|
|
| Discontinued operations, net of tax |
− |
26,368 |
| |
|
|
| Net income |
$ 415,923 |
$ 165,737 |
| |
|
|
| Earnings per share: |
|
|
| Basic |
|
|
| Continuing operations |
$ 0.04 |
$ 0.01 |
| Discontinued operations |
− |
− |
| Net income |
$ 0.04 |
$ 0.02 |
| Diluted |
|
|
| Continuing operations |
$ 0.04 |
$ 0.01 |
| Discontinued operations |
− |
− |
| Net income |
$ 0.04 |
$ 0.02 |
| Shares used in per share calculation: |
|
|
| Basic |
10,041,206 |
9,998,480 |
| Diluted |
10,044,619 |
10,009,689 |
| |
|
|
| |
Three Months Ended
December 31, 2014 |
Three Months Ended
December 31, 2013 |
| |
Cable TV |
Telco |
Total |
Cable TV |
Telco |
Total |
| |
|
|
|
|
|
|
| Operating income |
$ 618,811 |
$ 137,533 |
$ 756,344 |
$ 233,352 |
$ − |
$ 233,352 |
| Depreciation |
71,564 |
27,244 |
98,808 |
68,976 |
− |
68,976 |
| Amortization |
− |
206,452 |
206,452 |
− |
− |
− |
| EBITDA |
$ 690,375 |
$ 371,229 |
$ 1,061,604 |
$ 302,328 |
$ − |
$ 302,328 |
| |
| ADDVANTAGE TECHNOLOGIES GROUP,
INC. |
| CONSOLIDATED CONDENSED BALANCE
SHEETS |
| (UNAUDITED) |
| |
|
|
| |
December 31, 2014 |
September 30, 2014 |
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ 6,529,181 |
$ 5,286,097 |
| Accounts receivable, net of
allowance for doubtful accounts of $200,000 |
5,079,630 |
6,393,580 |
| Income tax refund
receivable |
− |
220,104 |
| Inventories, net of allowance
for excess and obsolete inventory of $2,306,628 and $2,156,628,
respectively |
23,119,992 |
22,780,523 |
| Prepaid expenses |
127,464 |
174,873 |
| Deferred income taxes |
1,390,000 |
1,416,000 |
| Total current assets |
36,246,267 |
36,271,177 |
| |
|
|
| Property and equipment, at cost |
10,722,826 |
10,659,225 |
| Less accumulated depreciation |
(4,290,324) |
(4,191,516) |
| Net property and equipment |
6,432,502 |
6,467,709 |
| |
|
|
| Intangibles, net of accumulated
amortization |
6,418,826 |
6,625,278 |
| Goodwill |
3,910,089 |
3,910,089 |
| Other assets |
131,428 |
131,428 |
| |
|
|
| Total assets |
$ 53,139,112 |
$ 53,405,681 |
| |
|
|
| Liabilities and Shareholders'
Equity |
|
|
| Current liabilities: |
|
|
| Accounts payable |
$ 2,543,924 |
$ 2,880,761 |
| Accrued expenses |
1,576,162 |
1,809,878 |
| Accrued income taxes |
104,663 |
− |
| Notes payable – current
portion |
852,643 |
845,845 |
| Other current liabilities |
993,308 |
983,269 |
| Total current liabilities |
6,070,700 |
6,519,753 |
| |
|
|
| Notes payable, less current portion |
5,024,230 |
5,240,066 |
| Deferred income taxes |
178,000 |
267,000 |
| Other liabilities |
1,978,869 |
1,942,889 |
| |
|
|
| Shareholders' equity: |
|
|
| Common stock, $.01 par value;
30,000,000 shares authorized; 10,541,864 shares issued;
and 10,041,206 shares outstanding |
105,419 |
105,419 |
| Paid in capital |
(5,277,464) |
(5,312,881) |
| Retained earnings |
46,059,372 |
45,643,449 |
| Total shareholders' equity
before treasury stock |
40,887,327 |
40,435,987 |
| |
|
|
| Less: Treasury stock, 500,658
shares, at cost |
(1,000,014) |
(1,000,014) |
| Total shareholders' equity |
39,887,313 |
39,435,973 |
| |
|
|
| Total liabilities and shareholders'
equity |
$ 53,139,112 |
$ 53,405,681 |
CONTACT: 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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