ADDvantage Technologies Announces Financial Results for the Fiscal First Quarter of 2013

Tue Feb 12, 2013 8:00am EST

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

  BROKEN ARROW, OK, Feb 12 (Marketwire) -- 
ADDvantage Technologies Group, Inc. (NASDAQ: AEY) today announced its
results for the three month period ended December 31, 2012.

    Revenue for the three months ended December 31, 2012 increased 7% to $9.6
million compared to $9.0 million for the same period last year. New
equipment sales were $5.6 million for the three months ended December 31,
2012 as compared to $5.3 million for the three months ended December 31,
2011. Net refurbished equipment sales were $3.0 million for the three
months ended December 31, 2012 as compared to $2.6 million for the same
period last year. Service revenue decreased to $1.0 million for the three
month period ended December 31, 2012 compared to $1.1 million for the
same period last year. 

    Net income increased 100% to $0.8 million, or $0.08 per diluted share,
for the three month period ended December 31, 2012, compared to $0.4
million, or $0.04 per diluted share, for the same period last year. 

    Cash and cash equivalents were $7.3 million as of December 31, 2012
compared to $5.2 million as of September 30, 2012.

    David Humphrey, President and CEO, commented, "We achieved revenue growth
of 7% in the first quarter of fiscal 2013 primarily as a result of the
recent extreme weather conditions in the Mid-Atlantic and Northeastern
regions of the U.S. We were able to satisfy the customers' urgent
equipment needs with our inventory on hand for which the original
equipment manufacturer was unable to deliver in a timely manner. Although
we do not anticipate this particular situation to provide much additional
revenue, these types of situations will continue to provide us with
opportunities to take advantage of our inventory position. Gross margins
for the first quarter of fiscal 2013 increased to 33% from 30% from the
prior year period, which is primarily attributable to higher margin sales
of certain equipment purchased at significant discounts. As a result, we
increased our profitability for the quarter and strengthened our cash
position to $7.3 million as of December 31, 2012. This bottom line
performance also reflects a $0.2 million decrease in interest expense
compared to the same period last year, following the payoff of a term
loan and the termination of the associated interest rate swap agreement
last year."

    "Our Company is purchasing small volumes of our common stock in the open
market, over 170,000 shares since December 2012, as we believe our stock
is a good value. The stock purchases notwithstanding, we remain focused
on our previously announced growth strategy, which is to expand upon
existing agreements with our suppliers, entering into new agreements with
new suppliers, expanding our geographical footprint and identifying
accretive acquisitions within our industry," concluded Mr. Humphrey.

    Earnings Conference Call
 As previously announced, the Company will host
a conference call on Tuesday, February 12, 2013, 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)
389-5988 (domestic) or (719) 325-2469 (international). All dial-in
participants must use the following code to access the call: 5034666.
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 26, 2013 at (877) 870-5176
(domestic) or (858) 384-5517 (international). Participants must use the
following code to access the replay of the call: 5034666. 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.

                     ADDVANTAGE TECHNOLOGIES GROUP, INC.
         CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                 (UNAUDITED)

                                                        Three Months Ended
                                                           December 31,
                                                         2012        2011
                                                     ----------- -----------
Sales:
  Net new sales income                               $ 5,598,898 $ 5,307,461
  Net refurbished sales income                         3,013,217   2,588,717
  Net service income                                   1,004,083   1,108,217
                                                     ----------- -----------
Total net sales                                        9,616,198   9,004,395
Cost of sales                                          6,470,370   6,265,374
                                                     ----------- -----------
Gross profit                                           3,145,828   2,739,021
Operating, selling, general and administrative
 expenses                                              1,853,530   1,846,615
                                                     ----------- -----------
Income from operations                                 1,292,298     892,406
Interest expense                                           6,881     158,626
                                                     ----------- -----------
Income before provision for income taxes               1,285,417     733,780
Provision for income taxes                               488,000     287,000
                                                     ----------- -----------
Net income attributable to common shareholders           797,417     446,780

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

Comprehensive income                                 $   797,417 $   501,149
                                                     =========== ===========

Earnings per share:
  Basic                                              $      0.08 $      0.04
  Diluted                                            $      0.08 $      0.04
Shares used in per share calculation:
  Basic                                               10,185,026  10,207,390
  Diluted                                             10,185,398  10,209,036

                     ADDVANTAGE TECHNOLOGIES GROUP, INC.
                         CONSOLIDATED BALANCE SHEETS
                                                 December 31, September 30, 
                                                     2012          2012
                                                  (unaudited)   (audited)
                                                 ------------ ------------- 
Assets
Current assets:
  Cash and cash equivalents                      $  7,346,004 $   5,191,514 
  Accounts receivable, net of allowance of
   $300,000                                         3,170,332     3,050,796 
  Income tax refund receivable                              -       409,386 
  Inventories, net of allowance for excess and
   obsolete
  inventory of $1,160,000 and $1,000,000,
   respectively                                    21,632,454    22,666,385 
  Prepaid expenses                                     83,055       129,357 
  Deferred income taxes                               959,000       920,000 
                                                 ------------ ------------- 
Total current assets                               33,190,845    32,367,438 

Property and equipment, at cost:
  Land and buildings                                8,794,272     8,794,272 
  Machinery and equipment                           2,946,449     2,953,949 
  Leasehold improvements                                9,633         9,633 
                                                 ------------ ------------- 
Total property and equipment, at cost              11,750,354    11,757,854 
Less accumulated depreciation and amortization     (3,737,550)   (3,666,327)
                                                 ------------ ------------- 
Net property and equipment                          8,012,804     8,091,527 

Other assets:
  Goodwill                                          1,560,183     1,560,183 
  Other assets                                         11,428        13,778 
                                                 ------------ ------------- 
Total other assets                                  1,571,611     1,573,961 
                                                 ------------ ------------- 

Total assets                                     $ 42,775,260 $  42,032,926 
                                                 ============ ============= 

Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                               $  1,699,041 $   1,437,492 
  Accrued expenses                                    681,446     1,030,174 
  Income tax payable                                  107,918             - 
  Notes payable - current portion                     184,008       184,008 
                                                 ------------ ------------- 
Total current liabilities                           2,672,413     2,651,674 

Notes payable, less current portion                 1,456,610     1,502,612 
Deferred income taxes                                  77,000        62,000 

Shareholders' equity:
  Common stock, $.01 par value; 30,000,000 shares
   authorized; 10,465,323 shares issued;
   10,154,926 and 10,189,120 shares outstanding,
   respectively                                       104,653       104,653 
  Paid in capital                                  (5,724,610)   (5,748,503)
  Retained earnings                                44,778,007    43,980,590 
                                                 ------------ ------------- 
  Total shareholders' equity before treasury
   stock                                           39,158,050    38,336,740 

  Less: Treasury stock, 310,397 and 276,203
   shares, at cost, respectively                     (588,813)     (520,100)
                                                 ------------ ------------- 
Total shareholders' equity                         38,569,237    37,816,640 
                                                 ------------ ------------- 

Total liabilities and shareholders' equity       $ 42,775,260 $  42,032,926 
                                                 ============ ============= 


    


For further information
Company Contact:
Scott Francis 
(918) 25l-9121

KCSA Strategic Communications
Garth Russell
(212) 896-1250
grussell@kcsa.com 

Diane Imas
(212) 896-1242
dimas@kcsa.com

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