ADDvantage Technologies Announces Results for the Fiscal Fourth Quarter of 2015

Dec 15, 2015, 08:30 ET from ADDvantage Technologies Group, Inc.

BROKEN ARROW, Okla., Dec. 15, 2015 /PRNewswire/ -- ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced its financial results for the fourth quarter and fiscal year ended September 30, 2015.

"We recorded positive results for fiscal year 2015, with revenue and EBITDA gains of 22% and 97%, respectively," said David Humphrey, President and CEO of ADDvantage Technologies. "This success was driven primarily by our expansion into the telecommunications equipment sector as the Company benefited from a full fiscal year of Nave Communications sales."

"We recently observed a general weakness in our industry, which negatively impacted our fourth quarter sales. Despite these lower sales in the fourth quarter, we remained profitable across both the Cable TV and Telco segments. The general industry weakness has carried over into our fiscal first quarter of 2016, and we will most likely experience a continuing decline in revenue for both the Cable TV and Telco segments," continued Mr. Humphrey.

"As we have demonstrated previously, our lean business structure has the capacity to expand and contract quickly in line with future sales opportunities. This flexibility, combined with the Company's successful transition into the telecommunications equipment distribution market, is expected to allow us to overcome these challenges in market demand and remain profitable in 2016.  We believe that both segments of our business provide a solid foundation to be profitable and generate positive cash flows as we continue to invest in our existing segments and to identify and execute strategic acquisitions in the broader telecommunication industry," concluded Mr. Humphrey.

Results for the three months ended September 30, 2015

Consolidated sales decreased 21% to $9.6 million for the three months ended September 30, 2015 compared with $12.1 million for the same period ended September 30, 2014. The decrease in sales resulted from a $1.3 million and $1.2 million decrease in sales in the Cable TV segment and Telco segment, respectively, compared to the same period last year.                 

Consolidated operating, selling, general and administrative expenses decreased $0.7 million, or 20%, to $2.6 million for the three months ended September 30, 2015 from $3.3 million for the same period last year.  This decrease was due to $0.6 million in Telco segment expenses, and $0.1 million in Cable TV segment expenses.

Income from continuing operations for the three months ended September 30, 2015 was $0.2 million, or $0.02 per diluted share, compared with a gain from continuing operations of $0.6 million, or $0.06 per diluted share, for the same period of 2014.                                      

Consolidated EBITDA for the three months ended September 30, 2015 was $0.8 million compared with $1.2 million for the same period ended September 30, 2014.

Results for the year ended September 30, 2015

Consolidated sales increased 22% to $43.7 million for the fiscal year ended September 30, 2015 compared with $35.9 million for the same period ended September 30, 2014. The increase in sales was due to an increase in the Telco segment of $9.6million primarily resulting from the acquisition of Nave Communications in February 2014, and was partially offset by a $1.8 million decrease in sales in the Cable TV segment.

Consolidated operating, selling, general and administrative expenses increased $2.2 million, or 21%, to $12.7 million for the year ended September 30, 2015 from $10.5 million for the same period last year.  This increase was primarily due to $2.7 million in Telco segment expenses as a result of the Nave Communications acquisition, and offset by a $0.5 million decrease in expenses for the Cable TV segment.

Income from continuing operations for the year ended September 30, 2015 was $1.5 million, or $0.15 per diluted share, compared with $0.7 million, or $0.07 per diluted share, for the same period of 2014. 

Consolidated EBITDA for the year ended September 30, 2015 was $3.8 million compared with $1.9 million for the same period ended September 30, 2014.

Cash and cash equivalents were $6.1 million as of September 30, 2015, compared with $5.3 million as of September 30, 2014.  As of September 30, 2015, the Company had inventory of $23.6 million compared with $22.8 million as of September 30, 2014.

Earnings Conference Call

The Company will host a conference call today, Tuesday, December 15th, 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 888-364-3109 (domestic) or 719-457-2645 (international). All dial-in participants must use the following code to access the call: 304131. 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 29, 2015 at 877-870-5176 (domestic) or 858-384-5517 (international). Participants must use the following code to access the replay of the call: 304131.  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 (Cable TV) 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 Cable TV equipment and recycles surplus and obsolete Cable TV and telecommunications equipment.

ADDvantage operates through its subsidiaries, Tulsat, Tulsat-Atlanta, Tulsat-Arizona, 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 STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

September 30,

Twelve Months Ended September 30,

2015

2014

2015

2014

Sales

$     9,627,532

$   12,131,986

$   43,733,620

$   35,888,692

Cost of sales

6,548,565

7,840,979

28,434,731

24,283,236

Gross profit

3,078,967

4,291,007

15,298,889

11,605,456

Operating, selling, general and     administrative expenses

2,641,663

3,320,846

12,722,679

10,508,357

Operating income

437,304

970,161

2,576,210

1,097,099

Interest expense

69,716

86,803

305,310

217,910

Income before income taxes

367,588

883,358

2,270,900

879,189

Provision for income taxes

157,000

264,000

773,000

220,000

Income from continuing operations

210,588

619,358

1,497,900

659,189

Discontinued operations:

Loss from discontinued operations, net   of tax

 

 

 

 

(36,211)

Loss on sale of discontinued   operations, net of tax

 

 

 

 

(629,835)

Discontinued operations, net of tax

(666,046)

Net income (loss)

$        210,588

$        619,358

$     1,497,900

$           (6,857)

Earnings (loss) per share:

    Basic

        Continuing operations

$             0.02

$             0.06

$             0.15

$             0.07

        Discontinued operations

(0.07)

    Net income (loss)

$             0.02

$             0.06

$             0.15

$            (0.00)

    Diluted

        Continuing operations

$             0.02

$             0.06

$             0.15

$             0.07

        Discontinued operations

(0.07)

    Net income (loss)

$             0.02

$             0.06

$             0.15

$            (0.00)

Shares used in per share calculation:

    Basic

10,063,563

10,041,206

10,055,552

10,021,431

    Diluted

10,063,563

10,041,206

10,055,552

10,049,440

 

Three Months Ended September 30, 2015

Three Months Ended September 30, 2014

Cable TV

Telco

Total 

Cable TV

Telco

Total 

Operating income

$        397,392

$         39,912

$      437,304

$        624,338

$       345,823

$      970,161

Depreciation

82,254

26,858

109,112

73,546

27,937

101,483

Amortization

206,451

206,451

158,739

158,739

EBITDA

$        479,646

$       273,221

$      752,867

$        697,884

$       532,499

$   1,230,383

Year Ended September 30, 2015

Year Ended September 30, 2014

Cable TV

Telco

 Total 

Cable TV

Telco

 Total 

Operating income (loss)

$     2,210,414

$        365,796

$2,576,210

$     1,492,100

$      (395,001)

$  1,097,099

Depreciation

296,876

111,827

408,703

293,353

66,926

360,279

Amortization

825,805

825,805

481,722

481,722

EBITDA (a)

$     2,507,290

$    1,303,428

$   3,810,718

$     1,785,453

$       153,647

$  1,939,100

 

(a)  The Telco segment for the twelve months ended September 30, 2014 includes acquisition-related costs of $0.6 million related to the acquisition of Nave Communications.

 

ADDVANTAGE TECHNOLOGIES GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

September 30,

2015

2014

Assets

Current assets:

    Cash and cash equivalents

$    6,110,986

$    5,286,097

    Accounts receivable, net of allowance of $250,000 and

        $200,000, respectively

4,286,377

6,393,580

    Income tax receivable

220,104

    Inventories, net of allowance for excess and obsolete

        inventory of $2,756,628 and $2,156,628, respectively

23,600,996

22,780,523

    Prepaid expenses

153,454

174,873

    Deferred income taxes

1,776,000

1,416,000

Total current assets

35,927,813

36,271,177

Property and equipment, at cost:

    Land and buildings

7,218,678

7,208,679

    Machinery and equipment

3,415,164

3,244,153

    Leasehold improvements

151,957

206,393

Total property and equipment, at cost

10,785,799

10,659,225

Less: Accumulated depreciation

(4,584,796)

(4,191,516)

Net property and equipment

6,201,003

6,467,709

Intangibles, net of accumulated amortization

5,799,473

6,625,278

Goodwill

3,910,089

3,910,089

Other assets

134,678

131,428

Total assets

$51,973,056

$53,405,681

Liabilities and Shareholders' Equity

Current liabilities:

    Accounts payable

$    1,784,482

$    2,880,761

    Accrued expenses

1,358,681

1,809,878

    Income tax payable

122,492

    Notes payable – current portion

873,752

845,845

    Other current liabilities

982,094

983,269

Total current liabilities

5,121,501

6,519,753

    Notes payable, less current portion

4,366,130

5,240,066

    Deferred income taxes

286,000

267,000

    Other liabilities

1,064,717

1,942,889

Total liabilities

10,838,348

13,969,708

Shareholders' equity:

    Common stock, $.01 par value; 30,000,000 shares authorized;  

        10,564,221 and 10,541,864 shares issued, respectively;

        10,063,563 and 10,041,206 shares outstanding, respectively

 

 

105,642

 

 

105,419

    Paid in capital

(5,112,269)

(5,312,881)

    Retained earnings

47,141,349

45,643,449

    Total shareholders' equity before treasury stock

42,134,722

40,435,987

    Less: Treasury stock, 500,658 shares, at cost

(1,000,014)

(1,000,014)

Total shareholders' equity

41,134,708

39,435,973

Total liabilities and shareholders' equity

$  51,973,056

$  53,405,681

 

SOURCE ADDvantage Technologies Group, Inc.



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