ADDvantage Technologies (AEYGQ) 10-Q 10 May 16 2016 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Mar. 31, 2016	Apr. 30, 2016
Entity Registrant Name	ADDVANTAGE TECHNOLOGIES GROUP INC
Entity Central Index Key	874,292
Trading Symbol	aey
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		10,134,235
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Condensed Balance

Consolidated Condensed Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Equity Method Investments [Member]
Property and equipment, at cost:
Investment in and loans to equity method investee	$ 280,562
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
Land and buildings	7,218,678	7,218,678
Machinery and equipment	3,696,288	3,415,164
Leasehold improvements	151,957	151,957
Total 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	300,000
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
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

Consolidated Condensed Balance3

Consolidated Condensed Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Accounts receivable, allowance for doubtful accounts	$ 250,000	$ 250,000
Allowance for excess and obsolete inventory	$ 3,056,628	$ 2,756,628
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	30,000,000	30,000,000
Common stock, shares issued (in shares)	10,634,893	10,564,221
Common stock, shares outstanding (in shares)	10,134,235	10,063,563
Treasury stock, shares (in shares)	500,658	500,658

Consolidated Condensed Statemen

Consolidated Condensed Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 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 (in dollars per share)	$ 0.01	$ 0.02	$ 0.02	$ 0.06
Diluted (in dollars per share)	$ 0.01	$ 0.02	$ 0.02	$ 0.06
Shares used in per share calculation:
Basic (in shares)	10,092,319	10,051,844	10,080,729	10,046,525
Diluted (in shares)	10,092,319	10,051,844	10,080,729	10,046,525

Consolidated Condensed Stateme5

Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Activities
Net income	$ 169,624	$ 650,178
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	203,349	198,887
Amortization	412,902	412,903
Provision for excess and obsolete inventories	300,000	300,000
Deferred income tax provision (benefit)	46,000	(133,000)
Share based compensation expense	94,275	$ 125,306
Loss from equity method investment	140,998
Changes in assets and liabilities:
Accounts receivable	(1,255,966)	$ (7,431)
Income tax receivable\payable	(297,588)	220,104
Inventories, net	1,559,195	(2,303,817)
Prepaid expenses	(140,813)	$ (60,571)
Other assets	(1,310)
Accounts payable	213,280	$ 1,602,015
Accrued expenses	(369,501)	31,351
Net cash provided by operating activities	1,074,445	$ 1,035,925
Investing Activities
Acquisition of net operating assets	(178,000)
Guaranteed payments for acquisition of business	(1,000,000)	$ (1,000,000)
Investment in and loans to equity method investment	(421,560)
Additions to machinery and equipment	(182,869)	$ (77,523)
Net cash used in investing activities	(1,782,429)	(1,077,523)
Financing Activities
Payments on notes payable	(433,748)	(420,272)
Net cash used in financing activities	(433,748)	(420,272)
Net decrease in cash and cash equivalents	(1,141,732)	(461,870)
Cash and cash equivalents at beginning of period	6,110,986	5,286,097
Cash and cash equivalents at end of period	4,969,254	4,824,227
Supplemental cash flow information:
Cash paid for interest	110,073	105,564
Cash paid for income taxes	$ 319,200	$ 264,000

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation and Accounting Policies	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Significant Accounting Policies [Text Block]	Note 1 - Basis of Presentation and Accounting Policies Basis of presentation The consolidated condensed financial statements include the accounts of ADDvantage Technologies Group, Inc. and its subsidiaries, all of which are wholly owned (collectively, the “Company”). Intercompany balances and transactions have been eliminated in consolidation. The Company’s reportable segments are Cable Television (“Cable TV”) and Telecommunications (“Telco”). The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, the information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the consolidated condensed financial statements not misleading. It is suggested that these consolidated condensed financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606)”. This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”). In addition, in August 2015, the FASB issued ASU No. 2015-14: “Revenue from Contracts with Customers (Topic 606). This update was issued to defer the effective date of ASU No. 2014-09 by one year. Therefore, the effective date of ASU No. 2014-09 is for annual reporting periods beginning after December 15, 2017. Management is evaluating the impact that ASU No. 2014-09 will have on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16: “Business Combinations (Topic 805)”. This guidance was issued to amend existing guidance related to measurement period adjustments associated with a business combination. The new standard requires the Company to recognize measurement period adjustments in the reporting period in which the adjustments are determined, including any cumulative charge to earnings in the current period. The amendment removes the requirement to adjust prior period financial statements for these measurement period adjustments. The guidance is effective for annual periods beginning after December 15, 2015 and early adoption is permitted. Management is evaluating the impact that ASU No. 2015-16 will have on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17: “Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes.” This guidance was issued to simplify the presentation of deferred income taxes. The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The effective date of ASU No. 2015-17 is for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Management is evaluating the impact that ASU No. 2015-17 will have on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02: “Leases (Topic 842)” which is intended to improve financial reporting about leasing transactions. The ASU will require organizations (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Organizations that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual periods beginning after December 15, 2018 and early adoption is permitted. Management is evaluating the impact that ASU No. 2016-02 will have on the Company’s consolidated financial statements.

Note 2 - Acquisition

Note 2 - Acquisition	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Mergers, Acquisitions and Dispositions Disclosures [Text Block]	Note 2 – Acquisition On December 31, 2015, the Company acquired the net operating assets of Advantage Solutions, LLC in Kingsport, Tennessee. This new location for the Cable TV segment will provide cable television equipment repair services in the region as well as expand the Company’s Cable TV equipment sales opportunities. The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair values at the acquisition date. The following table summarizes the preliminary purchase price allocation: Assets acquired: Accounts receivable $ 107,957 Refurbished inventory 16,100 Fixed assets - equipment 111,900 Liabilities assumed: Current liabilities (57,957 ) Net assets acquired $ 178,000

Note 3 - Inventories

Note 3 - Inventories	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	Note 3 – Inventories Inventories at March 31, 2016 and September 30, 2015 are as follows: March 31, 2016 September 30, 2015 New: Cable TV $ 14,888,129 $ 16,255,487 Refurbished: Cable TV 3,762,017 3,676,132 Telco 6,164,383 6,426,005 Allowance for excess and obsolete inventory (3,056,628 ) (2,756,628 ) $ 21,757,901 $ 23,600,996 New inventory includes products purchased from the manufacturers plus “surplus-new”, which are unused products purchased from other distributors or multiple system operators. Refurbished inventory includes factory refurbished, Company refurbished and used products. Generally, the Company does not refurbish its used inventory until there is a sale of that product or to keep a certain quantity on hand. The Company regularly reviews the Cable TV segment inventory quantities on hand, and an adjustment to cost is recognized when the loss of usefulness of an item or other factors, such as obsolete and excess inventories, indicate that cost will not be recovered when an item is sold. The Company recorded charges in the Cable TV segment to allow for obsolete inventory, which increased the cost of sales during the six months ended March 31, 2016, and 2015, by $0.3 million. For the Telco segment, any obsolete and excess telecommunications inventory is processed through its recycling program when it is identified.

Note 4 - Investments In and Loa

Note 4 - Investments In and Loans To Equity Method Investee	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Equity Method Investments, Policy [Policy Text Block]	Note 4 – Inve stment in and loans to equity method investee On March 10, 2016, the Company announced that it entered into a joint venture, YKTG Solutions, LLC (“YKTG Solutions), which will support decommission work on cell tower sites across 13 states in the northeast on behalf of a major U.S. wireless provider. YKTG Solutions is owned 51% by YKTG, LLC and 49% by the Company, and YTKG Solutions is certified as a minority-based enterprise. The joint venture is governed by an operating agreement for the purpose of completing the decommission project, but the operating agreement can be expanded to include other projects upon agreement by both owners. The Company will account for its investment in YKTG Solutions using the equity-method of accounting. For its role in the decommission project, the Company will earn a management fee from YKTG Solutions based on billings. The Company is financing the decommission project pursuant to the terms of a loan agreement between the Company and YKTG Solutions by providing a revolving line of credit. The line of credit is for $4.0 million and is secured by all of the assets of YKTG Solutions, YKTG, LLC and the personal guarantees by the owners of YKTG, LLC. The line of credit accrues interest at a fixed interest rate of 12% and is paid monthly. At March 31, 2016, the amount outstanding under this line of credit was $0.4 million. The management fee encompasses any interest earned on outstanding advances under the line of credit. During the three months ended March 31, 2016, the Company recognized management fees of $0.1 million as other income and interest of $2 thousand as interest income in the Consolidated Condensed Statements of Income related to the Company’s participation in the decommission project and financing provided. The Company’s carrying value in YKTG Solutions is reflected in Investment in and loans to equity method investee in the Consolidated Condensed Balance Sheets. During the six months ended March 31, 2016, the Company advanced YKTG Solutions $0.4 million and recorded a loss from the equity method of investment of $0.1 million, which resulted in the $0.3 million carrying value at March 31, 2016. At March 31, 2016, the Company's total estimate of maximum exposure to loss as a result of its relationships YKTG Solutions was approximately $4.0 million, which represents the Company’s equity investment and available and outstanding line of credit with this entity. To help mitigate the risks associated with funding of the decommission project, the Company has obtained credit insurance for qualifying YKTG Solutions accounts receivable outstanding arising from the decommission project. In addition, the Company anticipates that during the third fiscal quarter of 2016 YKTG Solutions will enter into a $3.0 million surety payment bond whereby the Company and YKTG, LLC will be guarantors under the surety payment bond.

Note 5 - Intangible Assets

Note 5 - Intangible Assets	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Intangible Assets Disclosure [Text Block]	Note 5 – Intangible Assets Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 3 years to 10 years. The intangible assets with their associated accumulated amortization amounts at March 31, 2016 and September 30, 2015 are as follows: March 31, 2016 Gross Accumulated Amortization Net Intangible assets: Customer relationships – 10 years $ 4,257,000 $ (886,871 ) $ 3,370,129 Technology – 7 years 1,303,000 (387,797 ) 915,203 Trade name – 10 years 1,293,000 (269,374 ) 1,023,626 Non-compete agreements – 3 years 254,000 (176,387 ) 77,613 Total intangible assets $ 7,107,000 $ (1,720,429 ) $ 5,386,571 September 30, 2015 Gross Accumulated Amortization Net Intangible assets: Customer relationships – 10 years $ 4,257,000 $ (674,023 ) $ 3,582,977 Technology – 7 years 1,303,000 (294,725 ) 1,008,275 Trade name – 10 years 1,293,000 (204,724 ) 1,088,276 Non-compete agreements – 3 years 254,000 (134,055 ) 119,945 Total intangible assets $ 7,107,000 $ (1,307,527 ) $ 5,799,473

Note 6 - Notes Payable and Line

Note 6 - Notes Payable and Line of Credit	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 6 – Notes Payable and Line of Credit Notes Payable The Company has an Amended and Restated Revolving Credit and Term Loan Agreement (“Credit and Term Loan Agreement”) with its primary financial lender. At March 31, 2016, the Company has two term loans outstanding under the Credit and Term Loan Agreement. The first outstanding term loan has an outstanding balance of $1.1 million at March 31, 2016 and is due on November 30, 2021, with monthly principal payments of $15,334 plus accrued interest. The interest rate is the prevailing 30-day LIBOR rate plus 1.4% (1.84% at March 31, 2016) and is reset monthly. This term loan is collateralized by inventory, accounts receivable, equipment and fixtures and general intangibles. The second outstanding term loan has an outstanding balance of $3.7 million at March 31, 2016 and is due March 4, 2019, with monthly principal and interest payments of $68,505, with the balance due at maturity. It is a five year term loan with a seven year amortization payment schedule with a fixed interest rate of 4.07%. This term loan is collateralized by inventory, accounts receivable, equipment and fixtures and general intangibles. Line of Credit The Company has a $7.0 million Revolving Line of Credit (“Line of Credit”) under the Credit and Term Loan Agreement. At March 31, 2016, the Company had no balance outstanding under the Line of Credit. The Line of Credit requires quarterly interest payments based on the prevailing 30-day LIBOR rate plus 2.75% (2.91% at March 31, 2016), and the interest rate is reset monthly. Any future borrowings under the Line of Credit are due on March 31, 2017. Future borrowings under the Line of Credit are limited to the lesser of $7.0 million or the net balance of 80% of qualified accounts receivable plus 50% of qualified inventory. Under these limitations, the Company’s total available Line of Credit borrowing base was $7.0 million at March 31, 2016. Among other financial covenants, the Line of Credit agreement provides that the Company maintain a fixed charge ratio of coverage (EBITDA to total fixed charges) of not less than 1.25 to 1.0, determined quarterly. The Line of Credit is collateralized by inventory, accounts receivable, equipment and fixtures and general intangibles. Fair Value of Debt FASB ASC 820, Fair Value Measurements and Disclosures, ● Level 1 – Quoted prices for identical assets in active markets or liabilities that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. ● Level 2 – Inputs are other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. ● Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value. The Company has determined the carrying value of its variable-rate term loan approximates its fair value since the interest rate fluctuates periodically based on a floating interest rate. The Company has determined the fair value of its fixed-rate term loan utilizing the Level 2 hierarchy as the fair value can be estimated from broker quotes corroborated by other market data. These broker quotes are based on observable market interest rates at which loans with similar terms and maturities could currently be executed. The Company then estimated the fair value of the fixed-rate term loan using cash flows discounted at the current market interest rate obtained. The fair value of the Company’s fixed rate loan was $3.7 million as of March 31, 2016.

Note 7 - Earnings Per Share

Note 7 - Earnings Per Share	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Earnings Per Share [Text Block]	Note 7 – Earnings Per Share Basic earnings per share are based on the sum of the average number of common shares outstanding and issuable, restricted and deferred shares. Diluted earnings per share include any dilutive effect of stock options and restricted stock. In computing the diluted weighted average shares, the average share price for the period is used in determining the number of shares assumed to be reacquired under the treasury stock method from the exercise of options. Basic and diluted earnings per share for the three and six months ended March 31, 2016 and 2015 are: Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 Net income attributable to common shareholders $ 145,630 $ 234,255 $ 169,624 $ 650,178 Basic weighted average shares 10,092,319 10,051,844 10,080,729 10,046,525 Effect of dilutive securities: Stock options − − – − Diluted weighted average shares 10,092,319 10,051,844 10,080,729 10,046,525 Earnings per common share: Basic $ 0.01 $ 0.02 $ 0.02 $ 0.06 Diluted $ 0.01 $ 0.02 $ 0.02 $ 0.06 The table below includes information related to stock options that were outstanding at the end of each respective three and six month periods ended March 31, but have been excluded from the computation of weighted-average stock options for dilutive securities due to the option exercise price exceeding the average market price per share of our common stock for the three and six months ended March 31, or their effect would be anti-dilutive. Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 Stock options excluded 525,000 545,000 525,000 545,000 Weighted average exercise price of stock options $ 2.83 $ 2.91 $ 2.83 $ 2.91 Average market price of common stock $ 1.77 $ 2.37 $ 1.99 $ 2.43

Note 8 - Stock Option Plan

Note 8 - Stock Option Plan	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 8 – Stock Option Plan Plan Information The 2015 Incentive Stock Plan (the “Plan”) provides for awards of stock options and restricted stock to officers, directors, key employees and consultants. Under the Plan, option prices will be set by the Compensation Committee and may not be less than the fair market value of the stock on the grant date. At March 31, 2016, 1,100,415 shares of common stock were reserved for stock award grants under the Plan. Of these reserved shares, 479,211 shares were available for future grants. Stock Options All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements based on their grant date fair value over the requisite service period. Compensation expense for share-based awards is included in the operating, selling, general and administrative expense section of the Company’s consolidated condensed statements of income. Stock options are valued at the date of the award, which does not precede the approval date, and compensation cost is recognized on a straight-line basis over the vesting period. Stock options granted to employees generally become exercisable over a three, four or five-year period from the date of grant and generally expire ten years after the date of grant. Stock options granted to the Board of Directors generally become exercisable on the date of grant and generally expire ten years after the grant. A summary of the status of the Company's stock options at March 31, 2016 and changes during the six months then ended is presented below: Shares Wtd. Avg. Ex. Price Outstanding at September 30, 2015 535,000 $ 2.88 Granted – – Exercised – – Expired (10,000 ) 5.78 Forfeited – – Outstanding at March 31, 2016 525,000 $ 2.83 Exercisable at March 31, 2016 291,667 $ 2.78 No nonqualified stock options were granted for the six months ended March 31, 2016. The Company estimates the fair value of the options granted using the Black-Scholes option valuation model. The Company estimates the expected term of options granted based on the historical grants and exercises of the Company’s options. The Company estimates the volatility of its common stock at the date of the grant based on both the historical volatility as well as the implied volatility on its common stock. The Company bases the risk-free rate that is used in the Black-Scholes option valuation model on the implied yield in effect at the time of the option grant on U.S. Treasury zero-coupon issues with equivalent expected term. The Company has never paid cash dividends on its common stock and does not anticipate paying cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes option valuation model. The Company amortizes the resulting fair value of the options ratably over the vesting period of the awards. The Company uses historical data to estimate the pre-vesting option forfeitures and records share-based expense only for those awards that are expected to vest. Compensation expense related to unvested stock options recorded for the six months ended March 31, 2016 is as follows: Six Months Ended March 31, 2016 Fiscal year 2012 grant $ 8,708 Fiscal year 2014 grant $ 23,761 The Company records compensation expense over the vesting term of the related options. At March 31, 2016, compensation costs related to these unvested stock options not yet recognized in the consolidated condensed statements of income was $51,402. Restricted Stock The Company granted restricted stock in March 2016 to its Board of Directors and a Company officer totaling 62,874 shares, which were valued at market value on the date of grant. The shares are being held by the Company for 12 months and will be delivered to the directors at the end of the 12 month holding period. The fair value of these shares at issuance totaled $105,000, which is being amortized over the 12 month holding period as compensation expense. The Company granted restricted stock in December 2015 and October 2015 to two new Directors totaling 3,333 and 4,465 shares, respectively which were valued at market value on the date of the grants. The holding restriction on these shares expired the first week of March 2016. The fair value of the shares issued December 2015 and October 2015 totaled $7,500 and $10,000, respectively and was amortized over the holding period as compensation expense. The Company granted restricted stock in April of 2014 to certain employees totaling 23,676 shares, which were valued at market value on the date of grant. The shares have a holding restriction, which will expire in equal annual installments of 7,892 shares over three years starting in April 2015. The fair value of these shares upon issuance totaled $76,000 and is being amortized over the respective one, two and three year holding periods as compensation expense. The unamortized portion of the restricted stock is included in prepaid expenses on the Company’s consolidated condensed balance sheets.

Note 9 - Segment Reporting

Note 9 - Segment Reporting	6 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	Note 9 – Segment Reporting The Company is reporting its financial performance based on its external reporting segments: Cable Television and Telecommunications. These reportable segments are described below. Cable Television (“Cable TV”) The Company’s Cable TV segment sells new, surplus and re-manufactured cable television equipment throughout North America, Central America, South America and, to a substantially lesser extent, other international regions that utilize the same technology. In addition, this segment also repairs cable television equipment for various cable companies. Telecommunications (“Telco”) The Company’s Telco segment primarily sells certified used telecommunications networking equipment from a broad range of manufacturers to customers primarily in North America. In addition, this segment is a reseller of new telecommunications equipment from certain manufacturers. Also, this segment offers its customers decommissioning services for surplus and obsolete equipment, which it in turn processes through its recycling services. The Company evaluates performance and allocates its resources based on operating income. The accounting policies of its reportable segments are the same as those described in the summary of significant accounting policies. Segment assets consist primarily of cash and cash equivalents, accounts receivable, inventory, property and equipment, goodwill and intangible assets. Three Months Ended Six Months Ended March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015 Sales Cable TV $ 6,018,891 $ 5,792,272 $ 11,023,888 $ 12,625,291 Telco 4,601,172 5,813,777 7,918,903 9,850,071 Intercompany (32,876 ) (239,510 ) (105,936 ) (271,665 ) Total sales $ 10,587,187 $ 11,366,539 $ 18,836,855 $ 22,203,697 Gross profit Cable TV $ 1,906,675 $ 1,787,639 $ 3,485,946 $ 3,822,484 Telco 1,677,937 2,455,873 2,864,046 4,252,831 Total gross profit $ 3,584,612 $ 4,243,512 $ 6,349,992 $ 8,075,315 Income (loss) from operations Cable TV $ 336,279 $ 347,839 $ 453,119 $ 966,650 Telco (8,070 ) 92,518 (28,155 ) 230,051 Total income from operations $ 328,209 $ 440,357 $ 424,964 $ 1,196,701 March 31, 2016 September 30, 2015 Segment assets Cable TV $ 25,412,376 $ 26,494,430 Telco 17,325,144 17,094,713 Non-allocated 7,915,626 8,383,913 Total assets $ 50,653,146 $ 51,973,056

Significant Accounting Policies

Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]	Basis of presentation The consolidated condensed financial statements include the accounts of ADDvantage Technologies Group, Inc. and its subsidiaries, all of which are wholly owned (collectively, the “Company”). Intercompany balances and transactions have been eliminated in consolidation. The Company’s reportable segments are Cable Television (“Cable TV”) and Telecommunications (“Telco”). The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, the information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the consolidated condensed financial statements not misleading. It is suggested that these consolidated condensed financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Standards In September 2015, the FASB issued ASU No. 2015-16: “Business Combinations (Topic 805)”. This guidance was issued to amend existing guidance related to measurement period adjustments associated with a business combination. The new standard requires the Company to recognize measurement period adjustments in the reporting period in which the adjustments are determined, including any cumulative charge to earnings in the current period. The amendment removes the requirement to adjust prior period financial statements for these measurement period adjustments. The guidance is effective for annual periods beginning after December 15, 2015 and early adoption is permitted. Management is evaluating the impact that ASU No. 2015-16 will have on the Company’s consolidated financial statements.

Note 2 - Acquisition (Tables)

Note 2 - Acquisition (Tables)	6 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]	Assets acquired: Accounts receivable $ 107,957 Refurbished inventory 16,100 Fixed assets - equipment 111,900 Liabilities assumed: Current liabilities (57,957 ) Net assets acquired $ 178,000

Note 3 - Inventories (Tables)

Note 3 - Inventories (Tables)	6 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	March 31, 2016 September 30, 2015 New: Cable TV $ 14,888,129 $ 16,255,487 Refurbished: Cable TV 3,762,017 3,676,132 Telco 6,164,383 6,426,005 Allowance for excess and obsolete inventory (3,056,628 ) (2,756,628 ) $ 21,757,901 $ 23,600,996

Note 5 - Intangible Assets (Tab

Note 5 - Intangible Assets (Tables)	6 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Intangible Assets and Goodwill [Table Text Block]	March 31, 2016 Gross Accumulated Amortization Net Intangible assets: Customer relationships – 10 years $ 4,257,000 $ (886,871 ) $ 3,370,129 Technology – 7 years 1,303,000 (387,797 ) 915,203 Trade name – 10 years 1,293,000 (269,374 ) 1,023,626 Non-compete agreements – 3 years 254,000 (176,387 ) 77,613 Total intangible assets $ 7,107,000 $ (1,720,429 ) $ 5,386,571 September 30, 2015 Gross Accumulated Amortization Net Intangible assets: Customer relationships – 10 years $ 4,257,000 $ (674,023 ) $ 3,582,977 Technology – 7 years 1,303,000 (294,725 ) 1,008,275 Trade name – 10 years 1,293,000 (204,724 ) 1,088,276 Non-compete agreements – 3 years 254,000 (134,055 ) 119,945 Total intangible assets $ 7,107,000 $ (1,307,527 ) $ 5,799,473

Note 7 - Earnings Per Share (Ta

Note 7 - Earnings Per Share (Tables)	6 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 Net income attributable to common shareholders $ 145,630 $ 234,255 $ 169,624 $ 650,178 Basic weighted average shares 10,092,319 10,051,844 10,080,729 10,046,525 Effect of dilutive securities: Stock options − − – − Diluted weighted average shares 10,092,319 10,051,844 10,080,729 10,046,525 Earnings per common share: Basic $ 0.01 $ 0.02 $ 0.02 $ 0.06 Diluted $ 0.01 $ 0.02 $ 0.02 $ 0.06
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]	Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 Stock options excluded 525,000 545,000 525,000 545,000 Weighted average exercise price of stock options $ 2.83 $ 2.91 $ 2.83 $ 2.91 Average market price of common stock $ 1.77 $ 2.37 $ 1.99 $ 2.43

Note 8 - Stock Option Plan (Tab

Note 8 - Stock Option Plan (Tables)	6 Months Ended
	Mar. 31, 2016
Restricted Stock [Member]
Notes Tables
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]	Six Months Ended March 31, 2016 Fiscal year 2012 grant $ 8,708 Fiscal year 2014 grant $ 23,761
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Shares Wtd. Avg. Ex. Price Outstanding at September 30, 2015 535,000 $ 2.88 Granted – – Exercised – – Expired (10,000 ) 5.78 Forfeited – – Outstanding at March 31, 2016 525,000 $ 2.83 Exercisable at March 31, 2016 291,667 $ 2.78

Note 9 - Segment Reporting (Tab

Note 9 - Segment Reporting (Tables)	6 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Three Months Ended Six Months Ended March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015 Sales Cable TV $ 6,018,891 $ 5,792,272 $ 11,023,888 $ 12,625,291 Telco 4,601,172 5,813,777 7,918,903 9,850,071 Intercompany (32,876 ) (239,510 ) (105,936 ) (271,665 ) Total sales $ 10,587,187 $ 11,366,539 $ 18,836,855 $ 22,203,697 Gross profit Cable TV $ 1,906,675 $ 1,787,639 $ 3,485,946 $ 3,822,484 Telco 1,677,937 2,455,873 2,864,046 4,252,831 Total gross profit $ 3,584,612 $ 4,243,512 $ 6,349,992 $ 8,075,315 Income (loss) from operations Cable TV $ 336,279 $ 347,839 $ 453,119 $ 966,650 Telco (8,070 ) 92,518 (28,155 ) 230,051 Total income from operations $ 328,209 $ 440,357 $ 424,964 $ 1,196,701
Reconciliation of Assets from Segment to Consolidated [Table Text Block]	March 31, 2016 September 30, 2015 Segment assets Cable TV $ 25,412,376 $ 26,494,430 Telco 17,325,144 17,094,713 Non-allocated 7,915,626 8,383,913 Total assets $ 50,653,146 $ 51,973,056

Note 2 - Fair Value of Assets A

Note 2 - Fair Value of Assets Acquired and Liabilities Assumed (Details) - Advantage Solutions, LLC [Member]	Dec. 31, 2015USD ($)
Accounts receivable	$ 107,957
Refurbished inventory	16,100
Fixed assets - equipment	111,900
Current liabilities	(57,957)
Net assets acquired	$ 178,000

Note 3 - Inventories (Details T

Note 3 - Inventories (Details Textual) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Inventory Write-down	$ 0.3	$ 0.3

Note 3 - Inventories (Details)

Note 3 - Inventories (Details) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Cable TV	$ 14,888,129	$ 16,255,487
Cable TV	3,762,017	3,676,132
Telco	6,164,383	6,426,005
Allowance for excess and obsolete inventory	(3,056,628)	(2,756,628)
	$ 21,757,901	$ 23,600,996

Note 4 - Investments In and L25

Note 4 - Investments In and Loans To Equity Method Investee (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2016	Mar. 10, 2016
YKTG Solutions, LLC [Member] | YKTG, LLC [Member]
Equity Method Investment, Ownership Percentage						51.00%
YKTG Solutions, LLC [Member] | Secured Line of Credit Receivable [Member]
Financing Receivable, Recorded Investment, Current						$ 4,000,000
Financing Receivable, Stated Interest Rate						12.00%
Notes, Loans and Financing Receivable, Net, Current	$ 400,000		$ 400,000
YKTG Solutions, LLC [Member] | Other Income [Member]
Management Fees Revenue	100,000
YKTG Solutions, LLC [Member] | Surety Bond [Member] | Scenario, Forecast [Member]
Guarantor Obligations, Maximum Exposure, Undiscounted					$ 3,000,000
YKTG Solutions, LLC [Member]
Number of States in which Entity Operates						13
Equity Method Investment, Ownership Percentage						49.00%
Investment Income, Interest	2,000
Payments for Advance to Affiliate			400,000
Income (Loss) from Equity Method Investments			(100,000)
Equity Investment, Maximum Loss Exposure, Amount	4,000,000		4,000,000
Investment Income, Interest	2,172		2,172
Payments for Advance to Affiliate			421,560
Income (Loss) from Equity Method Investments	(140,998)		(140,998)
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	$ 300,000		$ 300,000

Note 5 - Intangible Assets (Det

Note 5 - Intangible Assets (Details Textual)	6 Months Ended
	Mar. 31, 2016
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	3 years
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years

Note 5 - Intangible Assets (D27

Note 5 - Intangible Assets (Details) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Customer Relationships [Member]
Gross	$ 4,257,000	$ 4,257,000
Accumulated amortization	(886,871)	(674,023)
Net	3,370,129	3,582,977
Technology-Based Intangible Assets [Member]
Gross	1,303,000	1,303,000
Accumulated amortization	(387,797)	(294,725)
Net	915,203	1,008,275
Trade Names [Member]
Gross	1,293,000	1,293,000
Accumulated amortization	(269,374)	(204,724)
Net	1,023,626	1,088,276
Noncompete Agreements [Member]
Gross	254,000	254,000
Accumulated amortization	(176,387)	(134,055)
Net	77,613	119,945
Gross	7,107,000	7,107,000
Accumulated amortization	(1,720,429)	(1,307,527)
Net	$ 5,386,571	$ 5,799,473

Note 5 - Intangible Assets (D28

Note 5 - Intangible Assets (Details) (Parentheticals)	6 Months Ended	12 Months Ended
	Mar. 31, 2016	Sep. 30, 2015
Customer Relationships [Member]
Finite-lived intangible asset, useful life	10 years	10 years
Technology-Based Intangible Assets [Member]
Finite-lived intangible asset, useful life	7 years	7 years
Trade Names [Member]
Finite-lived intangible asset, useful life	10 years	10 years
Noncompete Agreements [Member]
Finite-lived intangible asset, useful life	3 years	3 years

Note 6 - Notes Payable and Li29

Note 6 - Notes Payable and Line of Credit (Details Textual)	6 Months Ended
	Mar. 31, 2016USD ($)
Term Loan 1 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	1.40%
Term Loan 1 [Member]
Loans Payable	$ 1,100,000
Debt Instrument, Periodic Payment, Principal	$ 15,334
Debt Instrument, Interest Rate, Effective Percentage	1.84%
Term Loan 2 [Member]
Loans Payable	$ 3,700,000
Debt Instrument, Periodic Payment, Principal	$ 68,505
Debt Instrument, Term	5 years
Debt Instrument Amortization Term	7 years
Debt Instrument, Interest Rate, Stated Percentage	4.07%
Debt Instrument, Fair Value Disclosure	$ 3,700,000
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit [Member]
Debt Instrument, Basis Spread on Variable Rate	2.75%
Line of Credit [Member]
Debt Instrument, Interest Rate, Effective Percentage	2.91%
Line of Credit Facility, Maximum Borrowing Capacity	$ 7,000,000
Percentage Of Qualified Accounts Receivable Used In Determination Of Maximum Borrowing Capacity Of Line Of Credit	80.00%
Long-term Line of Credit	$ 0
Percentage Of Qualified Inventory Used In Determination Of Maximum Borrowing Capacity Of Line Of Credit	50.00%
Line of Credit Facility, Current Borrowing Capacity	$ 7,000,000
Fixed Charge Coverage Ratio	1.25

Note 7 - Basic and Diluted Earn

Note 7 - Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net income attributable to common shareholders	$ 145,630	$ 234,255	$ 169,624	$ 650,178
Basic (in shares)	10,092,319	10,051,844	10,080,729	10,046,525
Stock options (in shares)	0
Diluted weighted average shares (in shares)	10,092,319	10,051,844	10,080,729	10,046,525
Basic (in dollars per share)	$ 0.01	$ 0.02	$ 0.02	$ 0.06
Diluted (in dollars per share)	$ 0.01	$ 0.02	$ 0.02	$ 0.06

Note 7 - Anti-dilutive Securiti

Note 7 - Anti-dilutive Securities (Details) - $ / shares	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Stock options excluded (in shares)	525,000	545,000	525,000	545,000
Weighted average exercise price of stock options (in dollars per share)	$ 2.83	$ 2.91	$ 2.83	$ 2.91
Average market price of common stock (in dollars per share)	$ 1.77	$ 2.37	$ 1.99	$ 2.43

Note 8 - Stock Option Plan (Det

Note 8 - Stock Option Plan (Details Textual) - USD ($)	Apr. 30, 2014	Mar. 31, 2016	Dec. 31, 2015	Oct. 31, 2015	Mar. 31, 2016
The 2015 Incentive Stock Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance		1,100,415			1,100,415
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		479,211			479,211
Minimum [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years
Minimum [Member] | Certain Employees [Member]
Restricted Stock Holding Period	1 year
Maximum [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					5 years
Maximum [Member] | Certain Employees [Member]
Restricted Stock Holding Period	3 years
Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					4 years
Stock Options Expiration Period					10 years
Board Of Directors [Member]
Stock Options Expiration Period					10 years
Stock Issued During Period, Shares, Restricted Stock Award, Gross			3,333	4,465
Fair Value Of Restricted Shares Upon Issuance			$ 7,500	$ 10,000
Board of Directors and Officer [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross		62,874
Restricted Stock Holding Period		1 year
Fair Value Of Restricted Shares Upon Issuance		$ 105,000			$ 105,000
Certain Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Stock Issued During Period, Shares, Restricted Stock Award, Gross	23,676
Restricted Stock Holding Period	2 years
Fair Value Of Restricted Shares Upon Issuance	$ 76,000
Holding Restriction, Annual Expiration of Restricted Stock	7,892
Nonqualified Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate					0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 51,402			$ 51,402

Note 8 - Summary of the Status

Note 8 - Summary of the Status of the Company's Stock Options (Details)	6 Months Ended
	Mar. 31, 2016$ / sharesshares
Outstanding at September 30, 2015 (in shares) | shares	535,000
Outstanding at September 30, 2015 (in dollars per share) | $ / shares	$ 2.88
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	0
Granted (in dollars per share) | $ / shares	$ 0
Exercised (in shares) | shares	0
Exercised (in dollars per share) | $ / shares	$ 0
Expired (in shares) | shares	(10,000)
Expired (in dollars per share) | $ / shares	$ 5.78
Forfeited (in shares) | shares	0
Forfeited (in dollars per share) | $ / shares	$ 0
Outstanding at March 31, 2016 (in shares) | shares	525,000
Outstanding at March 31, 2016 (in dollars per share) | $ / shares	$ 2.83
Exercisable at March 31, 2016 (in shares) | shares	291,667
Exercisable at March 31, 2016 (in dollars per share) | $ / shares	$ 2.78

Note 8 - Compensation Expense R

Note 8 - Compensation Expense Related to Restricted Stock (Details) - Restricted Stock [Member]	6 Months Ended
	Mar. 31, 2016USD ($)
Fiscal Year 2012 Grant [Member]
Restricted stock compensation expense	$ 8,708
Fiscal Year 2014 Grant [Member]
Restricted stock compensation expense	$ 23,761

Note 9 - Segment Reporting Info

Note 9 - Segment Reporting Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Operating Segments [Member] | Cable TV [Member]
Sales	$ 6,018,891	$ 5,792,272	$ 11,023,888	$ 12,625,291
Gross profit	1,906,675	1,787,639	3,485,946	3,822,484
Operating income (loss)	336,279	347,839	453,119	966,650
Operating Segments [Member] | Telco [Member]
Sales	4,601,172	5,813,777	7,918,903	9,850,071
Gross profit	1,677,937	2,455,873	2,864,046	4,252,831
Operating income (loss)	(8,070)	92,518	(28,155)	230,051
Intersegment Eliminations [Member]
Sales	(32,876)	(239,510)	(105,936)	(271,665)
Sales	10,587,187	11,366,539	18,836,855	22,203,697
Gross profit	3,584,612	4,243,512	6,349,992	8,075,315
Operating income (loss)	$ 328,209	$ 440,357	$ 424,964	$ 1,196,701

Note 9 - Segment Assets (Detail

Note 9 - Segment Assets (Details) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Operating Segments [Member] | Cable TV [Member]
Segment assets	$ 25,412,376	$ 26,494,430
Operating Segments [Member] | Telco [Member]
Segment assets	17,325,144	17,094,713
Segment Reconciling Items [Member]
Segment assets	7,915,626	8,383,913
Segment assets	$ 50,653,146	$ 51,973,056