ADDvantage Technologies Group, Inc.
1221 E. Houston
Broken Arrow, Oklahoma 74012
| For further information | KCSA Strategic Communications |
| Company Contact: | Garth Russell / Diane Imas |
| Scott Francis (9l8) 25l-9121 | (212) 896-1250 / (212) 896-1242 |
| grussell@kcsa.com / dimas@kcsa.com |
ADDvantage Technologies Announces Financial Results for the
Fiscal Fourth Quarter of 2013
- - -
BROKEN ARROW, Oklahoma, December 10, 2013 – ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced its results for the three month period and year ended September 30, 2013.
Total revenue for the three months ended September 30, 2013 decreased 1% to $8.4 million compared with $8.5 million for the same period last year. New equipment sales were $5.5 million for the three months ended September 30, 2013 as compared with $5.2 million for the three months ended September 30, 2012. Sales of new equipment for the quarter increased primarily as a result of our expanded product offerings. Net refurbished equipment sales were $1.8 million for the three months ended September 30, 2013 as compared with $2.2 million for the same period last year. Sales of refurbished equipment continued to be negatively impacted by several factors including the continued decrease in plant expansions and bandwidth upgrades in the cable television industry. Service revenue was relatively flat at $1.1 million for the three month period ended September 30, 2012 and the same period last year.
Net income for the three month period ended September 30, 2013 was $0.3 million, or $0.03 per diluted share, compared with $0.4 million, or $0.04 per diluted share, for the same period of 2012. Net income for the fourth quarter of fiscal 2013 slightly decreased primarily as a result of a decrease in gross profit due primarily to decreased revenue and an increase in the provision for excess and obsolete inventory, partially offset by a decline in operating expenses.
For the twelve months ended September 30, 2013, total revenues decreased 5% to $33.4 million compared with $35.2 million for 2012. The decrease in total revenues was primarily due to the continued decrease in plant expansions and bandwidth upgrades in the cable television industry, partially offset by increased equipment sales as a result of Hurricane Sandy.
Net income for the twelve month period ended September 30, 2013 was $1.7 million, or $0.17 per diluted share, as compared with $1.3 million, or $0.12 per diluted share, for the twelve months of fiscal 2012. Net income for fiscal 2013 was positively impacted by a decrease in interest expense of $1.1 million resulting from the early payoff of one of its term loans in March 2012 and the termination of the associated interest rate swap agreement.
David Humphrey, President and CEO, commented, “For the fiscal year ended 2013, we generated $1.7 million in net income and continue to maintain a strong balance sheet and positive cash flows even though our total revenue declined due to the ongoing challenges within the CATV equipment industry. We are still working on executing our growth strategy to further develop our existing business as we work on expanding our product offerings among existing and new vendors as well as increasing our sales force in order to help us better penetrate the CATV equipment market. This includes hiring three industry veterans from Motorola.”
“In addition to implementing a plan to drive organic growth, we are evaluating acquisition opportunities that expand the scope of our business within the broader telecommunications industry. We believe our
healthy cash position and credit line allows us a great amount of latitude in this effort,” concluded Mr. Humphrey.
Earnings Conference Call
As previously announced, the Company will host a conference call on Tuesday, December 10, 2013, at 12:00 p.m. Eastern Time featuring remarks by Ken Chymiak, Chairman of the Board, 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) 437-9445 (domestic) or (719) 325-2484 (international). All dial-in participants must use the following code to access the call: 3621961. 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 December 24, 2013 at (877) 870-5176 (domestic) or (858) 384-5517 (international). Participants must use the following code to access the replay of the call: 3621961. The 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) industry with a comprehensive line of new and used system-critical network equipment and hardware from leading manufacturers in the industry, including Cisco and ARRIS (acquired Motorola Home), as well as operating a national network of technical repair centers. The equipment and hardware ADDvantage distributes is used to acquire, distribute, and protect the broad range of communications signals carried on fiber optic, coaxial cable and wireless distribution systems, including television programming, high-speed data (Internet) and telephony.
ADDvantage operates through its subsidiaries, Tulsat, Tulsat-Atlanta, Tulsat-Nebraska, Tulsat-Texas, NCS Industries, ComTech Services and Adams Global 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.
(Tables follow)
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| | | Three Months Ended September 30, | | | Year Ended September 30, | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| Sales: | | | | | | | | | | | | |
Net new sales income | | $ | 5,520,533 | | | $ | 5,215,880 | | | $ | 20,347,041 | | | $ | 21,093,370 | |
Net refurbished sales income | | | 1,760,910 | | | | 2,167,944 | | | | 9,031,954 | | | | 9,814,763 | |
Net service income | | | 1,079,711 | | | | 1,099,255 | | | | 3,978,597 | | | | 4,308,270 | |
| Total net sales | | | 8,361,154 | | | | 8,482,279 | | | | 33,357,592 | | | | 35,216,403 | |
| Cost of sales | | | 6,108,321 | | | | 5,975,012 | | | | 23,784,272 | | | | 24,854,960 | |
| Gross profit | | | 2,252,833 | | | | 2,507,267 | | | | 9,573,320 | | | | 10,361,443 | |
| Operating, selling, general and administrative expenses | | | 1,684,799 | | | | 1,843,382 | | | | 6,841,273 | | | | 7,231,097 | |
| Income from operations | | | 568,034 | | | | 663,885 | | | | 2,732,047 | | | | 3,130,346 | |
| Interest expense | | | 6,213 | | | | 7,192 | | | | 25,980 | | | | 1,113,854 | |
| Income before provision for income taxes | | | 561,821 | | | | 656,693 | | | | 2,706,067 | | | | 2,016,492 | |
| Provision for income taxes | | | 221,351 | | | | 236,000 | | | | 1,036,351 | | | | 766,000 | |
| Net income | | | 340,470 | | | | 420,693 | | | | 1,669,716 | | | | 1,250,492 | |
| | | | | | | | | | | | | | | | | |
| Other comprehensive income: | | | | | | | | | | | | | | | | |
Unrealized gain on interest rate swap, net of taxes | | | – | | | | – | | | | – | | | | 587,258 | |
| | | | | | | | | | | | | | | | | |
| Comprehensive income | | $ | 340,470 | | | $ | 420,693 | | | $ | 1,669,716 | | | $ | 1,837,750 | |
| | | | | | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.03 | | | $ | 0.04 | | | $ | 0.17 | | | $ | 0.12 | |
Diluted | | $ | 0.03 | | | $ | 0.04 | | | $ | 0.17 | | | $ | 0.12 | |
Weighted average shares used in per share calculation: | | | | | | | | | | | | | | | | |
Basic | | | 9,998,480 | | | | 10,189,120 | | | | 10,052,359 | | | | 10,196,241 | |
Diluted | | | 9,998,480 | | | | 10,189,563 | | | | 10,052,359 | | | | 10,197,496 | |
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED BALANCE SHEETS
| | | September 30, | |
| | | 2013 | | | 2012 | |
| Assets | | | | | | |
| Current assets: | | | | | | |
Cash and cash equivalents | | $ | 8,366,657 | | | $ | 5,191,514 | |
Accounts receivable, net of allowance of $300,000 | | | 3,020,853 | | | | 3,050,796 | |
Income tax refund receivable | | | 272,380 | | | | 409,386 | |
Inventories, net of allowance for excess and obsolete | | | | | | | | |
inventory of $1,750,000 and $1,000,000, respectively | | | 20,730,453 | | | | 22,666,385 | |
Prepaid expenses | | | 122,283 | | | | 129,357 | |
Deferred income taxes | | | 1,066,000 | | | | 920,000 | |
| Total current assets | | | 33,578,626 | | | | 32,367,438 | |
| | | | | | | | | |
| Property and equipment, at cost: | | | | | | | | |
Land and buildings | | | 8,794,272 | | | | 8,794,272 | |
Machinery and equipment | | | 3,125,422 | | | | 2,953,949 | |
Leasehold improvements | | | 9,633 | | | | 9,633 | |
| Total property and equipment, at cost | | | 11,929,327 | | | | 11,757,854 | |
| Less accumulated depreciation and amortization | | | (3,963,444 | ) | | | (3,666,327 | ) |
| Net property and equipment | | | 7,965,883 | | | | 8,091,527 | |
| | | | | | | | | |
| Other assets: | | | | | | | | |
Goodwill | | | 1,560,183 | | | | 1,560,183 | |
Other assets | | | 11,428 | | | | 13,778 | |
| Total other assets | | | 1,571,611 | | | | 1,573,961 | |
| | | | | | | | | |
| Total assets | | $ | 43,116,120 | | | $ | 42,032,926 | |
| | | | | | | | | |
| | | | | | | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
Accounts payable | | $ | 1,308,869 | | | $ | 1,437,492 | |
Accrued expenses | | | 934,856 | | | | 1,030,174 | |
Notes payable – current portion | | | 184,008 | | | | 184,008 | |
| Total current liabilities | | | 2,427,733 | | | | 2,651,674 | |
| | | | | | | | | |
| Notes payable, less current portion | | | 1,318,604 | | | | 1,502,612 | |
| Deferred income taxes | | | 193,000 | | | | 62,000 | |
| | | | | | | | | |
| Shareholders’ equity: | | | | | | | | |
Common stock, $.01 par value; 30,000,000 shares authorized; 10,499,138 and 10,465,323 shares issued, respectively; 9,998,480 and 10,189,120 shares outstanding, respectively | | | 104,991 | | | | 104,653 | |
Paid in capital | | | (5,578,500 | ) | | | (5,748,503 | ) |
Retained earnings | | | 45,650,306 | | | | 43,980,590 | |
Total shareholders’ equity before treasury stock | | | 40,176,797 | | | | 38,336,740 | |
| | | | | | | | | |
Less: Treasury stock, 500,658 and 276,203 shares, respectively, at cost | | | (1,000,014 | ) | | | (520,100 | ) |
| Total shareholders’ equity | | | 39,176,783 | | | | 37,816,640 | |
| | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 43,116,120 | | | $ | 42,032,926 | |
