ADDvantage Technologies Group, Inc. (NASDAQ:AEY),
today announced its financial results for the three month period
ended December 31, 2015.
“We continued to experience a general weakness
related to equipment sales in the Cable TV and Telco segments,
which negatively impacted our revenues during the fiscal first
quarter of 2016. Despite the lower sales in the quarter, we
continued to manage all of our expenses in order to maintain a
positive net income for the quarter,” said David Humphrey,
President and CEO of ADDvantage Technologies. “We are encouraged by
recent signs of improvement in the Telco industry and remain
optimistic that sales opportunities will materialize in the near
term. Furthermore, we are working diligently to explore all
opportunities to expand in the Cable TV segment, both in products
and services offered to our customers. In addition, we recently
acquired a business based in Tennessee that provides cable
television equipment repairs as well as sales of equipment. This
new location will allow us to further support our Cable Television
customers in the Ohio Valley and Central Atlantic regions of the
U.S.”
“While we are not pleased with this quarter’s
results, we are confident that our dedicated sales team and strong
balance sheet position enables us to adapt to changing market
dynamics, so we can benefit from opportunities in the market. We
also continue to work with an investment bank to identify strategic
acquisition targets that could further establish our presence in
the broader telecommunications industry,” concluded Mr.
Humphrey.
Consolidated sales decreased 24% to $8.2 million
for the three months ended December 31, 2015, compared with $10.8
million for the same period ended December 31, 2014. The decrease
in sales resulted from a $1.8 million and $0.7 million decrease in
sales in the Cable TV segment and Telco segment, respectively,
compared to the prior year.
Consolidated operating, selling, general and
administrative expenses decreased $0.4 million, or 13%, to $2.7
million for the three months ended December 31, 2015, from $3.1
million for the same period last year. This decrease was due
to $0.5 million in Telco segment expenses, partially offset by an
increase of $0.1 million in Cable TV segment expenses.
Net income for the three months ended December
31, 2015, was $24 thousand, or $0.00 per diluted share, compared
with $0.4 million, or $0.04 per diluted share, for the same period
of 2014.
Consolidated EBITDA for the three months ended
December 31, 2015, was $0.4 million compared with $1.1 million for
the same period ended December 31, 2014.
Cash and cash equivalents were $6.7 million as
of December 31, 2015, compared with $6.1 million as of September
30, 2015. As of December 31, 2015, inventory was $23.0 million,
compared with $23.6 million as of September 30, 2015.
Earnings Conference Call
The Company will host a conference call today, February 9th, 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 719-325-2329
(international). All dial-in participants must use the following
code to access the call: 5749081. 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 23, 2016, at
877-870-5176 (domestic) or 858-384-5517 (international).
Participants must use the following code to access the replay of
the call: 5749081. 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. (NASDAQ:AEY)
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-Arizona, Tulsat-Atlanta, 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
metric used by the financial community as a method of measuring our
financial performance and of evaluating 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, |
| |
|
_ 2015_ |
|
|
_ 2014 _ |
|
| Sales |
$ |
8,249,668 |
|
$ |
10,837,158 |
|
| Cost of sales |
|
5,484,288 |
|
|
7,005,355 |
|
| Gross profit |
|
2,765,380 |
|
|
3,831,803 |
|
| Operating, selling,
general and administrative expenses |
|
2,668,625 |
|
|
3,075,459 |
|
| Income from
operations |
|
96,755 |
|
|
756,344 |
|
| Interest expense |
|
__ 67,761 |
|
|
__ 85,421 |
|
| Income before provision
for income taxes |
|
28,994 |
|
|
670,923 |
|
| Provision for income
taxes |
|
___ 5,000 |
|
|
_ 255,000 |
|
| |
|
|
| Net income |
$ |
23,994 |
|
$ |
415,923 |
|
| |
|
|
| Earnings per share: |
|
|
| Basic |
$ |
0.00 |
|
$ |
0.04 |
|
| Diluted |
$ |
0.00 |
|
$ |
0.04 |
|
| Shares used in per share
calculation: |
|
|
| Basic |
|
10,069,139 |
|
|
10,041,206 |
|
| Diluted |
|
10,069,139 |
|
|
10,044,619 |
|
| |
|
|
| |
Three Months Ended December 31, 2015 |
|
Three Months Ended December 31, 2014 |
|
| |
|
Cable TV |
|
|
_ Telco __ |
|
|
_Total__ |
|
|
Cable TV |
|
|
_ Telco _ |
|
|
__Total__ |
|
| Income (loss) from
operations |
$ |
116,841 |
|
$ |
(20,086 |
) |
$ |
96,755 |
|
$ |
618,811 |
|
$ |
137,533 |
|
$ |
756,344 |
|
| Depreciation |
|
72,464 |
|
|
22,716 |
|
|
95,180 |
|
|
71,564 |
|
|
27,244 |
|
|
98,808 |
|
| Amortization |
______ − |
|
206,451 |
|
|
206,451 |
|
_______ − |
|
206,452 |
|
|
206,452 |
|
|
EBITDA |
$ |
189,305 |
|
$ |
209,081 |
|
$ |
398,386 |
|
$ |
690,375 |
|
$ |
371,229 |
|
$ |
1,061,604 |
|
| ADDVANTAGE TECHNOLOGIES GROUP, INC. |
| CONSOLIDATED CONDENSED BALANCE SHEETS |
| |
|
|
December 31, 2015 _(unaudited)_ |
September 30, 2015 _ (audited) _ |
|
Assets |
|
|
| Current assets: |
|
|
| Cash and cash
equivalents |
$ |
6,711,341 |
|
$ |
6,110,986 |
|
| Accounts
receivable, net of allowance for doubtful accounts of
$250,000 |
|
3,968,551 |
|
|
4,286,377 |
|
| Income tax
receivable |
|
13,998 |
|
|
− |
|
| Inventories, net of
allowance for excess and obsolete |
|
|
|
inventory of $2,906,628 and $2,756,628, respectively |
|
22,991,872 |
|
|
23,600,996 |
|
| Prepaid
expenses |
|
115,652 |
|
|
153,454 |
|
| Deferred income
taxes |
|
1,774,000 |
|
|
1,776,000 |
|
| Total current assets |
|
35,575,414 |
|
|
35,927,813 |
|
| |
|
|
| Property and equipment, at
cost |
|
10,922,174 |
|
|
10,785,799 |
|
| Less: Accumulated
depreciation |
|
(4,679,976 |
) |
|
(4,584,796 |
) |
| Net property and
equipment |
|
6,242,198 |
|
|
6,201,003 |
|
| |
|
|
| Intangibles, net of
accumulated amortization |
|
5,593,022 |
|
|
5,799,473 |
|
| Goodwill |
|
3,910,089 |
|
|
3,910,089 |
|
| Other assets |
|
134,678 |
|
|
134,678 |
|
| |
|
|
| Total assets |
$ |
51,455,401 |
|
$ |
51,973,056 |
|
| |
|
|
| Liabilities and
Shareholders’ Equity |
|
|
| Current liabilities: |
|
|
| Accounts
payable |
$ |
1,870,759 |
|
$ |
1,784,482 |
|
| Accrued
expenses |
|
1,003,544 |
|
|
1,358,681 |
|
| Income tax
payable |
|
− |
|
|
122,492 |
|
| Notes payable –
current portion |
|
880,999 |
|
|
873,752 |
|
| Other current
liabilities |
|
992,838 |
|
|
982,094 |
|
| Total current
liabilities |
|
4,748,140 |
|
|
5,121,501 |
|
| |
|
|
| Notes payable, less
current portion |
|
4,142,894 |
|
|
4,366,130 |
|
| Deferred income
taxes |
|
286,000 |
|
|
286,000 |
|
| Other
liabilities |
|
1,085,930 |
|
|
1,064,717 |
|
| Total liabilities |
|
10,262,964 |
|
|
10,838,348 |
|
| |
|
|
| Shareholders’ equity: |
|
|
| Common stock, $.01 par value;
30,000,000 shares authorIzed; |
|
|
|
|
|
|
| 10,572,019 and 10,564,221 shares
issued, respectively; |
|
|
|
|
|
|
| 10,071,361 and 10,063,563 shares
outstanding, respectively |
|
105,720 |
|
|
105,642 |
|
| Paid in
capital |
|
(5,078,612 |
) |
|
(5,112,269 |
) |
| Retained
earnings |
|
47,165,343 |
|
|
47,141,349 |
|
| Total shareholders’
equity before treasury stock |
|
42,192,451 |
|
|
42,134,722 |
|
| |
|
|
| Less: Treasury
stock, 500,658 shares, at cost |
|
(1,000,014 |
) |
|
(1,000,014 |
) |
| Total shareholders’
equity |
|
41,192,437 |
|
|
41,134,708 |
|
| |
|
|
| Total liabilities and
shareholders’ equity |
$ |
51,455,401 |
|
$ |
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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