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

Tue Aug 7, 2012 8:00am EDT

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

  BROKEN ARROW, OK, Aug 07 (Marketwire) -- 
ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced its
results for the three and nine month periods ended June 30, 2012.

    Revenue for the three months ended June 30, 2012 slightly decreased to
$8.5 million compared to $8.7 million for the same period last year.
Sales of new equipment were $4.6 million for the three months ended June
30, 2012 as compared to $5.6 million for the three months ended June 30,
2011. New equipment sales continued to be 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. Net refurbished equipment
sales were $2.7 million for the three months ended June 30, 2012 as
compared to $1.9 million for the same period last year. This increase was
driven primarily by our acquisition of Adams Global Communications in May
2011. Service revenue was unchanged at $1.2 million for the three month
period ended June 30, 2012 compared to June 30, 2011. 

    Net income was $0.5 million, or $0.05 per diluted share for the three
month periods ended June 30, 2012 and 2011. Net income for the third
quarter of fiscal 2012 benefited from a $0.2 million reduction in
interest expense compared to the same period last year, which was a
result of the Company paying off one of its term loans in March 2012 and
the termination of the associated interest rate swap agreement. 

    For the nine months ended June 30, 2012, revenue was relatively unchanged
at $26.7 million compared to $26.8 million for the same period last year.
Net income for the nine month period was $0.8 million, or $0.08 per
diluted share, as compared to $1.8 million, or $0.18 per diluted share,
for the first nine months of fiscal 2011. Net income for the nine months
ended June 30, 2012 included a charge to interest expense of $0.8 million
for the termination of the interest rate swap agreement.

    "Our results for the fiscal third quarter of 2012 continued to reflect a
general weakness in equipment sales due to the economic downturn in the
cable television industry. This was partially offset by revenues
generated from our acquisition of Adams Global Communications in May
2011, which allowed us to report a 40% increase in our refurbished
equipment sales and relatively flat total revenue for the quarter
compared to the same period last year. Also, our payoff of one of our
term loans and the associated interest rate swap agreement in March 2012
led to a significant reduction in interest expense for the fiscal third
quarter of 2012. As a result, we reported net income of $0.5 million,
which was flat compared to the same period of fiscal 2011," stated David
Humphrey, President and CEO of ADDvantage Technologies. 

    "The company continues to evaluate growth opportunities, both organically
and through acquisitions. We believe that our current business is well
positioned financially to support these activities, which would help
stimulate both short-term and long-term growth," concluded Mr. Humphrey. 

    Earnings Conference Call
 As previously announced the Company will host a
conference call on Tuesday, August 7, 2012, 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
(877)-852-6543 (domestic) or (719)-325-4744 (international). All dial-in
participants must use the following code to access the call: 4990038.
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 August 21, 2012 at (877) 870-5176
(domestic) or (858) 384-5517 (international). Participants must use the
following code to access the replay of the call: 4990038. 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, ARRIS 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 TECHNOLGIES GROUP, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (UNAUDITED)

                    Three Months Ended June 30,   Nine Months Ended June 30,
                         2012          2011           2012          2011
                    ------------- -------------  ------------- -------------
Sales:
  Net new sales
   income           $   4,643,661 $   5,568,777  $  15,616,934 $  18,510,943
  Net refurbished
   sales income         2,691,269     1,923,665      7,646,819     4,624,947
  Net service
   income               1,163,843     1,202,763      3,470,371     3,685,466
                    ------------- -------------  ------------- -------------
Total net sales         8,498,773     8,695,205     26,734,124    26,821,356
Cost of sales           5,910,937     6,127,808     18,879,948    18,689,684
                    ------------- -------------  ------------- -------------
Gross profit            2,587,836     2,567,397      7,854,176     8,131,672
Operating, selling,
 general and
 administrative
 expenses               1,828,238     1,642,403      5,387,715     4,686,050
                    ------------- -------------  ------------- -------------
Income from
 operations               759,598       924,994      2,466,461     3,445,622
Interest expense            7,300       170,417      1,106,662       530,704
                    ------------- -------------  ------------- -------------
Income before
 provision for
 income taxes             752,298       754,577      1,359,799     2,914,918
Provision for
 income taxes             293,000       287,000        530,000     1,108,000
                    ------------- -------------  ------------- -------------
Net income                459,298       467,577        829,799     1,806,918

Other comprehensive
 income:
  Unrealized gain
   (loss) on
   interest rate
   swap, net of
   taxes                        -       (29,838)       587,258       200,953
                    ------------- -------------  ------------- -------------

Comprehensive
 income             $     459,298 $     437,739  $   1,417,057 $   2,007,871
                    ============= =============  ============= =============

Earnings per share:
  Basic             $        0.05 $        0.05  $        0.08 $        0.18
  Diluted           $        0.05 $        0.05  $        0.08 $        0.18
Weighted average
 shares used in per
 share calculation:
  Basic                10,189,120    10,195,135     10,198,691    10,164,487
  Diluted              10,189,683    10,197,372     10,199,756    10,168,613

                     ADDVANTAGE TECHNOLGIES GROUP, INC.
                        CONSOLIDATED BALANCE SHEETS

                                                  June 30,    September 30, 
                                                    2012           2011
                                                (unaudited)     (audited)
                                               -------------  ------------- 
Assets
Current assets:
  Cash and cash equivalents                    $   3,167,601  $  10,943,654 
  Accounts receivable, net of allowance of
   $300,000                                        3,153,566      4,244,049 
  Income tax refund receivable                        86,711        349,745 
  Inventories, net of allowance for excess and
   obsolete inventory of $1,908,000 and
   $1,556,000, respectively                       23,852,155     25,777,747 
  Prepaid expenses                                   124,483        177,486 
  Deferred income taxes                            1,122,000      1,059,000 
                                               -------------  ------------- 
Total current assets                              31,506,516     42,551,681 

Property and equipment, at cost:
  Land and buildings                               8,794,272      8,683,679 
  Machinery and equipment                          2,958,699      2,856,615 
  Leasehold improvements                             205,797        205,797 
                                               -------------  ------------- 
Total property and equipment, at cost             11,958,768     11,746,091 
Less accumulated depreciation and amortization    (3,658,749)    (3,392,329)
                                               -------------  ------------- 
Net property and equipment                         8,300,019      8,353,762 

Other assets:
  Deferred income taxes                                    -        403,000 
  Goodwill                                         1,560,183      1,560,183 
  Other assets                                        13,778         19,245 
                                               -------------  ------------- 
Total other assets                                 1,573,961      1,982,428 
                                               -------------  ------------- 

Total assets                                   $  41,380,496  $  52,887,871 
                                               =============  ============= 

Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                             $   1,364,524  $   2,675,907 
  Accrued expenses                                   865,880      1,240,224 
  Notes payable - current portion                    184,008      1,814,008 
                                               -------------  ------------- 
Total current liabilities                          2,414,412      5,730,139 

Notes payable, less current portion                1,548,614     10,244,120 
Deferred income taxes                                 53,000              - 
Other liabilities                                          -        957,258 

Shareholders' equity:
  Common stock, $.01 par value; 30,000,000
   shares authorized; 10,465,323 and
   10,431,354 shares issued, respectively; and
   10,189,120 and 10,207,390 shares
   outstanding, respectively                         104,653        104,314 
  Paid in capital                                 (5,779,980)    (5,884,521)
  Retained earnings                               43,559,897     42,730,098 
  Accumulated other comprehensive loss:
    Unrealized loss on interest rate swap, net
     of tax                                                -       (587,258)
                                               -------------  ------------- 
  Total shareholders' equity before treasury
   stock                                          37,884,570     36,362,633 

  Less: Treasury stock, 276,203 and 223,964
   shares, respectively, at cost                    (520,100)      (406,279)
                                               -------------  ------------- 
Total shareholders' equity                        37,364,470     35,956,354 
                                               -------------  ------------- 

Total liabilities and shareholders' equity     $  41,380,496  $  52,887,871 
                                               =============  ============= 

    


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

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

ADDvantage Technologies Group, Inc.
1221 E. Houston
Broken Arrow, Oklahoma 74012 

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