ADDvantage Technologies Group, Inc. (Nasdaq:AEY),
today announced its financial results for the three and six month
periods ended March 31, 2015.
Consolidated sales for the three months ended March 31, 2015
increased 37% to $11.4 million compared with $8.3 million for the
same period ended March 31, 2014. The increase in consolidated
sales is primarily attributable to sales from the Telco segment as
a result of acquiring Nave Communications on February 28, 2014.
Sales for the Cable TV segment decreased by $1.4 million to $5.8
million for the three months ended March 31, 2015 from $7.2 million
for the same period last year, while sales for the Telco segment
increased $4.7 million to $5.8 million for the three months ended
March 31, 2015 from $1.1 million for the same period last year.
Consolidated operating, selling, general and administrative
expenses increased $1.1 million, or 43%, to $3.8 million for the
three months ended March 31, 2015 from $2.7 million for the same
period last year. This increase was primarily due to $1.3 million
in Telco segment expenses, and was partially offset by a decrease
of $0.2 million in expenses in the Cable TV segment. Expenses for
the Telco segment included $0.5 million for the three months ended
March 31, 2015 and zero for the same period last year for the
annual earn-out payments related to the acquisition of Nave
Communications.
Income from continuing operations for the three months ended
March 31, 2015 was $0.2 million, or $0.02 per diluted share,
compared with a loss from continuing operations of $0.3 million, or
$0.03 per diluted share, for the same period of 2014. Discontinued
operations for the three months ended March 31, 2014 included the
operations of Adams Global Communications prior to the sale on
January 31, 2014.
Consolidated EBITDA for the three months ended March 31, 2015
was $0.7 million compared with a loss of $0.3 million for the same
period ended March 31, 2014.
Consolidated sales for the six months ended March 31, 2015
increased 54% to $22.2 million compared with $14.4 million for the
same period ended March 31, 2014. Sales for the Cable TV segment
decreased by $0.8 million to $12.6 million for the six months ended
March 31, 2015 from $13.4 million for the same period last year,
while sales for the Telco segment increased $8.8 million to $9.9
million for the six months ended March 31, 2015 from $1.1 million
for the same period last year.
Consolidated operating, selling, general and administrative
expenses increased $2.6 million to $6.9 million for the six months
ended March 31, 2015 from $4.3 million for the same period last
year. This increase was primarily due to $4.0 million in Telco
segment expenses, and was partially offset by a decrease of $0.3
million in expenses in the cable segment. Expenses for the Telco
segment included $0.7 million for the six months ended March 31,
2015 and zero for the same period last year for the annual earn-out
payments related to the acquisition of Nave Communications.
Income from continuing operations for the six month period ended
March 31, 2015 was $0.7 million, or $0.07 per diluted share,
compared with a loss from continuing operations of $0.1 million, or
$0.01 per diluted share, for the same period of 2014.
Consolidated EBITDA for the six months ended March 31, 2015 was
$1.8 million compared with $0.0 million for the same period ended
March 31, 2014.
Cash and cash equivalents were $4.8 million as of March 31,
2015, compared with $5.3 million as of September 30, 2014. As of
March 31, 2015, the Company had inventory of $24.8 million compared
with $22.8 million as of September 30, 2014.
"Our ongoing growth strategy for our company is to utilize the
solid cash flow position of our Cable segment to acquire companies
within the broader telecommunication industry in order to diversify
our company outside of the cable television industry," commented
David Humphrey, President and CEO of ADDvantage Technologies. "We
completed our first acquisition utilizing this strategy a little
over a year ago with the acquisition of Nave Communications.
Nave Communications continues to see produce good results in
line with our expectations as our sales team expanded our customer
relationships in the telecommunications market this quarter. We are
encouraged by the positive direction that Nave is taking, which we
see as indicative of a longer term trend, and are planning to
expand our sales team in the coming months. Our low cost, high
quality offering of used telecommunication networking equipment,
and the efficient and flexible service we provide our clients,
positions us well to continue to grow throughout 2015."
"Our Cable TV segment still remains profitable and continues to
generate positive cash flows despite the decline in
revenue. We have significant headwinds to overcome in this
market before returning the Cable TV segment to revenue
growth. Although we are disappointed with the sales results
from this segment for the quarter, we still see opportunity in the
Cable TV market and continue to work diligently to maximize all
sales opportunities."
"Now that we have substantially completed our integration of
Nave into our company, we are once again seeking acquisition
opportunities within the broader telecommunications industry that
have the potential to add value and growth to our existing
portfolio. With that in mind, subsequent to the quarter end,
we engaged an investment banker to assist us in this process,"
concluded Mr. Humphrey.
Earnings Conference Call
The Company will host a conference call today, Tuesday, May
12th, 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 888-329-8893
(domestic) or 719-325-2435 (international). All dial-in
participants must use the following code to access the call:
2876657. Please call at least five minutes before the scheduled
start time.
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 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 OPERATIONS |
| (UNAUDITED) |
| |
| |
| |
Three Months Ended March
31, |
Six Months Ended March 31, |
| |
2015 |
2014 |
2015 |
2014 |
| Sales |
$ 11,366,539 |
$ 8,313,815 |
$ 22,203,697 |
$ 14,433,549 |
| Cost of sales |
7,123,027 |
6,082,648 |
14,128,382 |
10,339,154 |
| Gross profit |
4,243,512 |
2,231,167 |
8,075,315 |
4,094,395 |
| Operating, selling, general and
administrative expenses |
3,803,155 |
2,659,420 |
6,878,614 |
4,289,296 |
| Operating income (loss) |
440,357 |
(428,253) |
1,196,701 |
(194,901) |
| Interest expense |
79,102 |
25,011 |
164,523 |
30,994 |
| Income (loss) before provision for income
taxes |
361,255 |
(453,264) |
1,032,178 |
(225,895) |
| Provision (benefit) for income taxes |
127,000 |
(176,000) |
382,000 |
(88,000) |
| Income (loss) from continuing operations |
234,255 |
(277,264) |
650,178 |
(137,895) |
| |
|
|
|
|
| Discontinued operations, net of tax |
− |
(616,886) |
− |
(590,518) |
| |
|
|
|
|
| Net income (loss) |
$ 234,255 |
$ (894,150) |
$ 650,178 |
$ (728,413) |
| |
|
|
|
|
| Earnings (loss) per share: |
|
|
|
|
| Basic |
|
|
|
|
| Continuing operations |
$ 0.02 |
$ (0.03) |
$ 0.06 |
$ (0.01) |
| Discontinued operations |
− |
(0.06) |
− |
(0.06) |
| Net income (loss) |
$ 0.02 |
$ (0.09) |
$ 0.06 |
$ (0.07) |
| Diluted |
|
|
|
|
| Continuing operations |
$ 0.02 |
$ (0.03) |
$ 0.06 |
$ (0.01) |
| Discontinued operations |
− |
(0.06) |
− |
(0.06) |
| Net income (loss) |
$ 0.02 |
$ (0.09) |
$ 0.06 |
$ (0.07) |
| Shares used in per share calculation: |
|
|
|
|
| Basic |
10,051,844 |
10,004,830 |
10,046,525 |
10,001,655 |
| Diluted |
10,051,844 |
10,004,830 |
10,046,525 |
10,001,655 |
| |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended March
31, 2015 |
Three Months Ended March
31, 2014 |
| |
Cable TV |
Telco |
Total |
Cable TV |
Telco |
Total |
| |
|
|
|
|
|
|
| Operating income (loss) |
$ 347,839 |
$ 92,518 |
$ 440,357 |
$ 264,365 |
$ (692,618) |
$ (428,253) |
| Depreciation |
70,149 |
29,930 |
100,079 |
76,444 |
14,757 |
91,201 |
| Amortization |
− |
206,451 |
206,451 |
− |
76,656 |
76,656 |
| EBITDA (a) |
$ 417,988 |
$ 328,899 |
$ 746,887 |
$ 340,809 |
$ (601,205) |
$ (260,396) |
| |
| (a) The Telco segment
includes earn-out expenses of $0.5 million and zero for the three
months ended March 31, 2015 and 2014, respectively, related to the
acquisition of Nave Communications. In addition, the Telco
segment includes acquisition-related costs of $0.6 million for the
three months ended March 31, 2014 related to the acquisition of
Nave Communications. |
| |
| |
| |
Six Months Ended
March 31, 2015 |
Six Months Ended
March 31, 2014 |
| |
Cable TV |
Telco |
Total |
Cable TV |
Telco |
Total |
| |
|
|
|
|
|
|
| Operating income (loss) |
$ 966,650 |
$ 230,051 |
$ 1,196,701 |
$ 497,717 |
$ (692,618) |
$ (194,901) |
| Depreciation |
141,713 |
57,174 |
198,887 |
145,420 |
14,757 |
160,177 |
| Amortization |
− |
412,903 |
412,903 |
− |
76,656 |
76,656 |
| EBITDA (a) |
$ 1,108,363 |
$ 700,128 |
$ 1,808,491 |
$ 643,137 |
$ (601,205) |
$ 41,932 |
| |
| (a) The Telco segment
includes earn-out expenses of $0.7 million and zero for the six
months ended March 31, 2015 and 2014, respectively, related to the
acquisition of Nave Communications. In addition, the Telco
segment includes acquisition-related costs of $0.6 million for the
six months ended March 31, 2014 related to the acquisition of Nave
Communications. |
| ADDVANTAGE TECHNOLOGIES GROUP,
INC. |
| CONSOLIDATED CONDENSED BALANCE
SHEETS |
| (UNAUDITED) |
| |
| |
March 31,
2015 |
September 30,
2014 |
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ 4,824,227 |
$ 5,286,097 |
| Accounts receivable, net of allowance for
doubtful accounts of $200,000 |
6,401,011 |
6,393,580 |
| Income tax refund receivable |
− |
220,104 |
| Inventories, net of allowance for excess
and obsolete inventory of $2,456,628 and $2,156,628,
respectively |
24,784,340 |
22,780,523 |
| Prepaid expenses |
255,972 |
174,873 |
| Deferred income taxes |
1,457,000 |
1,416,000 |
| Total current assets |
37,722,550 |
36,271,177 |
| |
|
|
| Property and equipment, at cost: |
|
|
| Land and buildings |
7,222,279 |
7,208,679 |
| Machinery and equipment |
3,373,232 |
3,244,153 |
| Leasehold improvements |
141,237 |
206,393 |
| Total property and equipment, at cost |
10,736,748 |
10,659,225 |
| Less accumulated depreciation |
(4,390,403) |
(4,191,516) |
| Net property and equipment |
6,346,345 |
6,467,709 |
| |
|
|
| Intangibles, net of accumulated
amortization |
6,212,375 |
6,625,278 |
| Goodwill |
3,910,089 |
3,910,089 |
| Other assets |
131,428 |
131,428 |
| |
|
|
| Total assets |
$ 54,322,787 |
$ 53,405,681 |
| |
|
|
| Liabilities and Shareholders'
Equity |
|
|
| Current liabilities: |
|
|
| Accounts payable |
$ 4,482,776 |
$ 2,880,761 |
| Accrued expenses |
1,742,347 |
1,809,878 |
| Accrued income taxes |
44,190 |
− |
| Notes payable – current portion |
859,757 |
845,845 |
| Other current liabilities |
960,607 |
983,269 |
| Total current liabilities |
8,089,677 |
6,519,753 |
| |
|
|
| Notes payable, less current portion |
4,805,882 |
5,240,066 |
| Deferred income taxes |
175,000 |
267,000 |
| Other liabilities |
1,020,243 |
1,942,889 |
| |
|
|
| Shareholders' equity: |
|
|
| Common stock, $.01 par value; 30,000,000
shares authorized; 10,573,779 and 10,541,864 shares
issued, respectively; and 10,073,121 and 10,041,206 shares
outstanding, respectively |
105,738 |
105,419 |
| Paid in capital |
(5,167,366) |
(5,312,881) |
| Retained earnings |
46,293,627 |
45,643,449 |
| Total shareholders' equity before
treasury stock |
41,231,999 |
40,435,987 |
| |
|
|
| Less: Treasury stock, 500,658 shares, at
cost |
(1,000,014) |
(1,000,014) |
| Total shareholders' equity |
40,231,985 |
39,435,973 |
| |
|
|
| Total liabilities and shareholders'
equity |
$ 54,322,787 |
$ 53,405,681 |
CONTACT: Company Contact:
Scott Francis (918) 251-9121
KCSA Strategic Communications
Garth Russell
(212) 896-1250
grussell@kcsa.com
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