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

Tue Dec 11, 2012 8:00am EST

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

  BROKEN ARROW, OK, Dec 11 (Marketwire) -- 
ADDvantage Technologies Group, Inc. (NASDAQ: AEY) today announced its
results for the three month period and year ended September 30, 2012.

    Revenue for the three months ended September 30, 2012 decreased 25% to
$8.5 million compared to $11.3 million for the same period last year. New
equipment sales were $5.1 million for the three months ended September
30, 2012 as compared to $7.0 million for the three months ended September
30, 2011. Net refurbished equipment sales were $2.2 million for the three
months ended September 30, 2012 as compared to $2.8 million for the same
period last year. Sales of new and refurbished equipment continued to be
negatively impacted by several factors including the continued decrease
in plant expansions and bandwidth upgrades in the cable television
industry. Service revenue decreased to $1.2 million for the three month
period ended September 30, 2012 compared to $1.5 million for the same
period last year. 

    Net income was $0.4 million, or $0.04 per diluted share, for the three
month period ended September 30, 2012, compared to $0.7 million, or $0.07
per diluted share, for the same period of 2011. Net income for the fourth
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 twelve months ended September 30, 2012, revenue decreased to
$35.2 million from $38.1 million for the same period last year. The
decrease in equipment sales was primarily due to the continued decrease
in plant expansions and bandwidth upgrades in the cable television
industry, partially offset by revenue from Adams Global Communications,
which was acquired in May 2011. 

    Net income attributable to common stockholders for the twelve month
period was $1.3 million, or $0.12 per diluted share, as compared to $2.5
million, or $0.25 per diluted share, for the twelve months of fiscal
2011. Net income for fiscal 2012 included a charge to interest expense of
$0.8 million for the termination of the interest rate swap agreement,
partially offset by reduced interest expense of $0.4 million subsequent
to paying off one of its term loans and terminating the associated
interest rate swap agreement. 

    David Humphrey, President and CEO, commented, "Our results continue to
reflect a general weakness in equipment sales in the cable television
industry. However, we still maintained our gross margins at approximately
30% and generated $1.3 million of net income in fiscal year 2012. We also
improved our overall balance sheet position in fiscal year 2012 by paying
off one of our term loans and terminating the associated interest rate
swap agreement.

    "This year, the Company began to make changes to the management team and
our business to better position our Company for growth both organically
and through acquisitions. There are more management changes that will be
made in the coming months in order to properly align our corporate
structure with our growth strategy. 

    "We continue to generate positive cash flow from our existing business
and have a strong balance sheet in order to implement this growth
strategy. This has been partially supported by acquisitions that have
added sales through new suppliers to our core resale business or expanded
our existing customer base within our current business, such as Adams
Global Communications in May 2011. Looking ahead, we are currently
seeking new acquisition opportunities that will enable us to expand the
scope of our business within the cable industry," concluded Mr. Humphrey.

    Earnings Conference Call
 As previously announced, the Company will host
a conference call on Tuesday, December 11, 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
(888)-503-8169 (domestic) or (719)-325-2455 (international). All dial-in
participants must use the following code to access the call: 1343147.
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 25, 2012 at (877) 870-5176
(domestic) or (858) 384-5517 (international). Participants must use the
following code to access the replay of the call: 1343147. 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             Year Ended
                              September 30,              September 30,
                            2012         2011          2012         2011
                        ------------ ------------  ------------ ------------
Sales:
  Net new sales income  $  5,126,330 $  6,956,791  $ 20,743,264 $ 25,467,734
  Net refurbished sales
   income                  2,167,944    2,805,656     9,814,763    7,430,603
  Net service income       1,188,005    1,495,727     4,658,376    5,181,193
                        ------------ ------------  ------------ ------------
Total net sales            8,482,279   11,258,174    35,216,403   38,079,530
Cost of sales              5,975,012    7,838,998    24,854,960   26,528,682
                        ------------ ------------  ------------ ------------
Gross profit               2,507,267    3,419,176    10,361,443   11,550,848
Operating, selling,
 general and
 administrative
 expenses                  1,843,382    1,939,857     7,231,097    6,625,907
                        ------------ ------------  ------------ ------------
Income from operations       663,885    1,479,319     3,130,346    4,924,941
Interest expense               7,192      165,930     1,113,854      696,634
                        ------------ ------------  ------------ ------------
Income before income
 taxes                       656,693    1,313,389     2,016,492    4,228,307
Provision for income
 taxes                       236,000      584,000       766,000    1,692,000
                        ------------ ------------  ------------ ------------
Net income                   420,693      729,389     1,250,492    2,536,307

Other comprehensive
 income:
  Unrealized gain
   (loss) on interest
   rate swap, net of
   taxes                           -      (11,528)      587,258      189,425
                        ------------ ------------  ------------ ------------

Comprehensive income    $    420,693 $    717,861  $  1,837,750 $  2,725,732
                        ============ ============  ============ ============

Earnings per share:
  Basic                 $       0.04 $       0.07  $       0.12 $       0.25
  Diluted               $       0.04 $       0.07  $       0.12 $       0.25
Shares used in per
 share calculation:
  Basic                   10,189,120   10,207,390    10,196,241   10,175,213
  Diluted                 10,189,563   10,209,323    10,197,496   10,178,763

                     ADDVANTAGE TECHNOLGIES GROUP, INC.
                        CONSOLIDATED BALANCE SHEETS

                                                       September 30,
                                                    2012           2011
                                               -------------  ------------- 
Assets
Current assets:
  Cash and cash equivalents                    $   5,191,514  $  10,943,654 
  Accounts receivable, net of allowance of
   $300,000                                        3,050,796      4,244,049 
  Income tax refund receivable                       409,386        349,745 
  Inventories, net of allowance for excess and
   obsolete inventory of $1,000,000 and
   $1,556,000, respectively                       22,666,385     25,777,747 
  Prepaid expenses                                   129,357        177,486 
  Deferred income taxes                              920,000      1,059,000 
                                               -------------  ------------- 
Total current assets                              32,367,438     42,551,681 

Property and equipment, at cost:
  Land and buildings                               8,794,272      8,683,679 
  Machinery and equipment                          2,953,949      2,856,615 
  Leasehold improvements                               9,633        205,797 
                                               -------------  ------------- 
Total property and equipment, at cost             11,757,854     11,746,091 
Less accumulated depreciation and amortization    (3,666,327)    (3,392,329)
                                               -------------  ------------- 
Net property and equipment                         8,091,527      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                                   $  42,032,926  $  52,887,871 
                                               =============  ============= 

Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                             $   1,437,492  $   2,675,907 
  Accrued expenses                                 1,030,174      1,240,224 
  Notes payable - current portion                    184,008      1,814,008 
                                               -------------  ------------- 
Total current liabilities                          2,651,674      5,730,139 

Notes payable, less current portion                1,502,612     10,244,120 
Deferred income taxes                                 62,000              - 
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;
   10,189,120 and 10,207,390 shares
   outstanding, respectively                         104,653        104,314 
  Paid in capital                                 (5,748,503)    (5,884,521)
  Retained earnings                               43,980,590     42,730,098 
  Accumulated other comprehensive loss:
    Unrealized loss on interest rate swap, net
     of tax                                                -       (587,258)
                                               -------------  ------------- 
  Total shareholders' equity before treasury
   stock                                          38,336,740     36,362,633 

  Less: Treasury stock, 276,203 and 223,964
   shares, respectively, at cost                    (520,100)      (406,279)
                                               -------------  ------------- 
Total shareholders' equity                        37,816,640     35,956,354 
                                               -------------  ------------- 

Total liabilities and shareholders' equity     $  42,032,926  $  52,887,871 
                                               =============  ============= 

    


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

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

KCSA Strategic Communications
Garth Russell / Diane Imas 
(212) 896-1250 / (212) 896-1242
grussell@kcsa.com / dimas@kcsa.com 

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