SHREWSBURY, NJ — (Marketwire) — 10/27/11 — Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2011. The results will be discussed in a conference call to be held on Friday, October 28, 2011 at 10:00 AM Eastern time. The dial-in telephone number is (866) 861-4873 and the pass code is “WSTG.”
This conference call will be available via live webcast — in listen-mode only — at . A replay will also be available on the company-s website at .
Cash and marketable securities amounted to $13.3 million, representing 48% of equity as of September 30, 2011.
Net sales for the third quarter of 2011 increased 20% to $63.7 million compared to $53.0 million for the same period in 2010. Total sales for the third quarter of 2011 for our TechXtend segment (formerly Programmer-s Paradise segment) were $14.6 million compared to $14.6 million in the third quarter of 2010. Total sales for the third quarter of 2011 for our Lifeboat segment were $49.1 million compared to $38.4 million in the third quarter of 2010, representing a 28% increase.
“We are very pleased to report good results during these challenging economic times,” said Simon F. Nynens, Chairman and Chief Executive Officer. “To report growth compared to the third quarter of 2010 that showed revenue growth of 50% versus the third quarter of 2009 shows the quality and passion of our team.”
Sales from our Lifeboat segment showed strong growth. The 28% increase in net sales in the third quarter of 2011 compared to 2010 was mainly a result of our continued focus on the expanding virtual infrastructure-centric business, the addition of several key product lines, and the strengthening of our account penetration.
Gross Profit for the quarter ended September 30, 2011 was $5.8 million compared to $5.1 million for the third quarter of 2010, representing a 12% increase. Total gross profit for our TechXtend segment was $1.7 million compared to $1.7 million in the third quarter of 2010. Total gross profit for our Lifeboat segment was $4.1 million compared to $3.4 million in the third quarter of 2010, representing a 20% increase. This increase in gross profit was due to aggressive sales volume growth within our Lifeboat segment. Vendor rebates and discounts for the quarter ended September 30, 2011 amounted to $0.7 million compared to $0.6 million for the third quarter of 2010. Vendor rebates are dependent on reaching certain targets set by our vendors.
Total gross profit, as a percentage of net sales, for the third quarter of 2011 was 9.0%, compared to 9.7% in the third quarter of 2010.
The increase in gross profit dollars and the decrease in gross profit margin as a percentage of net sales was primarily caused by the aggressive sales growth within our Lifeboat segment, competitive pricing pressure in both segments, and also in part by our having won several large bids based on aggressive pricing, which we plan to continue.
Total selling, general, and administrative (“SG&A”) expenses for the third quarter of 2011 were $3.5 million compared to $3.2 million for the third quarter of 2010, which was mainly the result of a increase in employee and employee-related expenses (salaries, commissions, bonus accruals and benefits) of $0.2 million in 2011 compared to 2010. As a percentage of net sales, SG&A expenses for the third quarter of 2011 were 5.4% compared to 6.0% for the third quarter of 2010.
On October 25, 2011, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable November 17, 2011 to shareholders of record on November 7, 2011.
Wayside Technology Group, Inc. (NASDAQ: WSTG) was founded in 1982 and is a unified and integrated technology company providing products and solutions for corporate resellers, VARs, and developers as well as business, government and educational entities. The company offers technology products from software publishers and manufacturers such as Acronis, Astaro, CA Technologies, DataCore, Doyenz, Flexera Software, GFI, Hewlett Packard, Intel Software, Lenovo, Microsoft, Mindjet, Oracle, Quest Software, SolarWinds, StorageCraft Technology, TechSmith, Veeam, and VMware.
Additional information can be found by visiting .
The statements in this release concerning the Company-s future prospects are forward-looking statements that involve certain risks and uncertainties. Such risks and uncertainties could cause actual results to differ materially from those indicated by such forward-looking statements, and include, without limitation, the continued acceptance of the Company-s distribution channel by vendors and customers, the timely availability and acceptance of new products, product mix, market conditions, contribution of key vendor relationships and support programs, as well as factors that affect the software industry in general and other factors. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in our filings with the Securities and Exchange Commission. Except as otherwise required by law, the Company undertakes no obligation to update or revise these forward-looking statements.
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