ADDvantage Technologies Announces Financial Results for the Fiscal First Quarter of 2012

Tue Feb 14, 2012 8:00am EST

* Reuters is not responsible for the content in this press release.

  BROKEN ARROW, OK, Feb 14 (MARKET WIRE) -- 
ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced its
results for the three month period ended December 31, 2011.

    Revenue for the three months ended December 31, 2011 was $9.0 million
compared to $9.2 million for the same period last year. Sales of new
equipment were $5.2 million for the three months ended December 31, 2011
as compared to $6.5 million for the three months ended December 31, 2010.
New equipment sales were negatively impacted by several factors including
the continued economic downturn in the cable television industry as
multiple system operator ("MSO") customers continue to conserve cash and
limit capital expenditures and the negative impact of the Cisco reseller
agreement entered in December 2010. Net refurbished equipment sales were
$2.6 million for the three months ended December 31, 2011 as compared to
$1.4 million for the same period last year. The increase in net
refurbished equipment sales was primarily driven by our acquisition of
the net operating assets of Adams Global Communications in May 2011,
which increased our first quarter revenue by $1.1 million. Service
revenue was $1.2 million for the three month period ended December 31,
2011 as compared to $1.3 million for the same period last year. 

    Net income attributable to common shareholders for the three months ended
December 31, 2011 was $0.4 million, or $0.04 per diluted share, as
compared to $0.7 million, or $0.07 per diluted share, for the same period
last year. 

    Ken Chymiak, President and CEO, commented, "Revenue for the three months
ended December 31, 2011 was relatively flat year-over-year, as we
continue to face a weak cable equipment market and an uncertain economy.
However, we maintained our gross margins at approximately 30%, generated
positive cash flow from operations of $1.8 million in the fiscal first
quarter of 2012, and continued to pay down our long-term debt. As a
result, we increased our cash and cash equivalents to $12.3 million as of
December 31, 2011 compared to $10.9 million as of September 30, 2011. We
believe that our relatively strong financial position gives us major
competitive advantages in the current market and allows us to continue to
seek strategic growth opportunities and other ways that we could bring
value to our shareholders. 

    "The core message for our customers, employees and investors as we enter
2012 is that ADDvantage Technologies is making every effort to confront
its current challenges with a focus on strategic adaptation and a
common-sense vision. We continue to consider changes to our business in
order to return to a position of long-term growth," concluded Mr. Chymiak.

    Earnings Conference Call

    As previously announced the Company will host a conference call on
Tuesday, February 14, 2012, at 12:00 p.m. Eastern Time featuring remarks
by David Chymiak, Chairman of the Board, Ken Chymiak, President and Chief
Executive 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)-401-4675 or (719)-325-4877 for international participants. All
dial-in participants must use the following code to access the call:
4195028. 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 28, 2012 at (877) 870-5176
(domestic) or (858) 384-5517 (international). Participants must use the
following code to access the replay of the call: 4195028. 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, including Cisco, Motorola and
Fujitsu Frontech North America, 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
                                                           December 31,
                                                         2011        2010
                                                     ----------- -----------
Sales:
  Net new sales income                               $ 5,194,965 $ 6,525,013
  Net refurbished sales income                         2,588,717   1,401,501
  Net service income                                   1,220,713   1,302,932
                                                     ----------- -----------
Total net sales                                        9,004,395   9,229,446
Cost of sales                                          6,265,374   6,349,881
                                                     ----------- -----------
Gross profit                                           2,739,021   2,879,565
Operating, selling, general and administrative
 expenses                                              1,846,615   1,498,506
                                                     ----------- -----------
Income from operations                                   892,406   1,381,059
Interest expense                                         158,626     185,424
                                                     ----------- -----------
Income before provision for income taxes                 733,780   1,195,635
Provision for income taxes                               287,000     455,000
                                                     ----------- -----------
Net income attributable to common shareholders           446,780     740,635

Other comprehensive income:
  Unrealized gain on interest rate swap, net of
   taxes                                                  54,369     147,169
                                                     ----------- -----------

Comprehensive income                                 $   501,149 $   887,804
                                                     =========== ===========

Earnings per share:
  Basic                                              $      0.04 $      0.07
  Diluted                                            $      0.04 $      0.07
Shares used in per share calculation:
  Basic                                               10,207,390  10,143,970
  Diluted                                             10,209,036  10,154,523

                    ADDVANTAGE TECHNOLOGIES GROUP, INC.
                        CONSOLIDATED BALANCE SHEETS

                                                December 31,  September 30, 
                                                    2011           2011
                                                (unaudited)     (audited)
                                               -------------  ------------- 
Assets
Current assets:
  Cash and cash equivalents                    $  12,238,609  $  10,943,654 
  Accounts receivable, net of allowance of
   $300,000                                        3,116,487      4,244,049 
  Income tax refund receivable                       102,397        349,745 
  Inventories, net of allowance for excess and
   obsolete inventory of $1,658,000 and
   $1,556,000, respectively                       24,074,992     25,777,747 
  Prepaid expenses                                   101,855        177,486 
  Deferred income taxes                            1,092,000      1,059,000 
                                               -------------  ------------- 
Total current assets                              40,726,340     42,551,681 

Property and equipment, at cost                   11,831,097     11,746,091 
Less accumulated depreciation and amortization    (3,480,459)    (3,392,329)
                                               -------------  ------------- 
Net property and equipment                         8,350,638      8,353,762 

Other assets:
  Deferred income taxes                              331,000        403,000 
  Goodwill                                         1,560,183      1,560,183 
  Other assets                                        19,246         19,245 
                                               -------------  ------------- 
Total other assets                                 1,910,429      1,982,428 
                                               -------------  ------------- 

Total assets                                   $  50,987,407  $  52,887,871 
                                               =============  ============= 

Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                             $   1,377,151  $   2,675,907 
  Accrued expenses                                   689,346      1,240,224 
Notes payable - current portion                    1,814,008      1,814,008 
                                               -------------  ------------- 
Total current liabilities                          3,880,505      5,730,139 

Notes payable, less current portion                9,790,618     10,244,120 
Other liabilities                                    857,889        957,258 

Shareholders' equity:
  Common stock, $.01 par value; 30,000,000
   shares authorized; 10,431,354 shares issued
   and 10,207,390 shares outstanding                 104,314        104,314 
  Paid in capital                                 (5,883,630)    (5,884,521)
  Retained earnings                               43,176,879     42,730,098 
  Accumulated other comprehensive loss:
    Unrealized loss on interest rate swap, net
     of tax                                         (532,889)      (587,258)
                                               -------------  ------------- 
  Total shareholders' equity before treasury
   stock                                          36,864,674     36,362,633 

  Less: Treasury stock, 223,964 shares, at
   cost                                             (406,279)      (406,279)
                                               -------------  ------------- 
Total shareholders' equity                        36,458,395     35,956,354 
                                               -------------  ------------- 

Total liabilities and shareholders' equity     $  50,987,407  $  52,887,871 
                                               =============  ============= 


    


For further information
Company Contact:
Ken Chymiak
(918) 251-9121
Scott Francis
(918) 251-9121

KCSA Strategic Communications
Garth Russell / Jason Maymudes 
(212) 896-1250 / (212) 896-1211
grussell@kcsa.com / jmaymudes@kcsa.com 

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