BROKEN ARROW, Okla., May 10, 2016 (GLOBE NEWSWIRE) -- ADDvantage Technologies Group, Inc. (NASDAQ:AEY), today announced its financial results for the three and six month periods ended March 31, 2016.

“The sales activity in the second fiscal quarter of 2016 rebounded from the fiscal first quarter of 2016, as we reported $10.6 million in revenue for the second quarter, a 28% increase sequentially, though revenue was down 7% compared to the second quarter of fiscal 2015. The sequential improvement was largely driven by a positive change in market dynamics as we witnessed greater demand across both the Telco and Cable TV segments compared with the first fiscal quarter of 2016,” commented David Humphrey, President and CEO of ADDvantage Technologies.  “The results for the quarter were in line with our expectations that market forces would begin to stabilize this quarter, enabling our customers to gain greater visibility into their budgetary constraints and thereby allowing them to make purchase decisions.”

“Our ability to rapidly regain customers as market conditions improved reflects the proactivity of our sales team and its strong industry relationships. This ability to withstand market fluctuations, combined with our recently announced strategic joint venture with YKTG, positions us to grow the business in the second half of the year. Furthermore, our balance sheet remains strong, and we continue to seek out acquisition opportunities in the broader telecommunications sector with a view to expanding market share over the long term,” concluded Mr. Humphrey.

Consolidated sales for the three months ended March 31, 2016 decreased $0.8 million, or 7%, to $10.6 million compared with $11.4 million for the same period ended March 31, 2015.  The decrease in consolidated sales is attributable to a decrease in sales of $1.2 million from the Telco segment, and was partially offset by an increase in sales of $0.2 million for the Cable TV segment sales.

Consolidated operating, selling, general and administrative expenses decreased $0.5 million, or 14%, to $3.3 million for the three months ended March 31, 2016 from $3.8 million for the same period last year.  This decrease was primarily due to a $0.7 million decrease in Telco segment expenses, and was partially offset by an increase of $0.2 million in Cable TV segment expenses.  The decrease in the Telco segment included a $0.4 million decrease in expenses for the annual earn-out payments related to the acquisition of Nave Communications.

Net income for the three months ended March 31, 2016, was $146 thousand, or $0.01 per diluted share, compared with $234 thousand, or $0.02 per diluted share, for the same period of 2015. 

Consolidated EBITDA for the three months ended March 31, 2016 was $0.6 million compared with $0.7 million for the same period ended March 31, 2015.

Consolidated sales for the six months ended March 31, 2016 decreased $3.4 million, or 15%, to $18.8 million compared with $22.2 million for the same period ended March 31, 2015.  Sales for the Cable TV segment decreased by $1.6 million to $11.0 million for the six months ended March 31, 2016 from $12.6 million for the same period last year, while sales for the Telco segment decreased $2.0 million to $7.9 million for the six months ended March 31, 2016 from $9.9 million for the same period last year.

Consolidated operating, selling, general and administrative expenses decreased $1.0 million to $5.9 million for the six months ended March 31, 2016 from $6.9 million for the same period last year. This decrease was primarily due to a $1.1 million decrease in Telco segment expenses and was partially offset by an increase of $0.1 million in expenses in the Cable TV segment.  The decrease in the Telco segment included a $0.7 million decrease in expenses for the annual earn-out payments related to the acquisition of Nave Communications.

Net income for the six month period ended March 31, 2016 was $170 thousand, or $0.02 per diluted share, compared with $650 thousand, or $0.06 per diluted share, for the same period of 2015.

Consolidated EBITDA for the six months ended March 31, 2016 was $1.0 million compared with $1.8 million for the same period ended March 31, 2015.

Cash and cash equivalents were $5.0 million as of March 31, 2016, compared with $6.1 million as of September 30, 2015.  As of March 31, 2016, the Company had inventory of $21.8 million compared with $23.6 million as of September 30, 2015.

Earnings Conference Call

The Company will host a conference call today, Tuesday, May 10th, at 12:00 p.m. Eastern Time featuring remarks by 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 888-438-5535 (domestic) or 719-325-2472 (international). All dial-in participants must use the following code to access the call: 4740927. Please call at least five minutes before the scheduled start time.

About ADDvantage Technologies Group, Inc.
ADDvantage Technologies Group, Inc. (NASDAQ:AEY) supplies the cable television (Cable TV) and telecommunications industries with a comprehensive line of new and used system-critical network equipment and hardware from a broad range of leading manufacturers. The equipment and hardware ADDvantage distributes is used to acquire, distribute, and protect the communications signals carried on fiber optic, coaxial cable and wireless distribution systems, including television programming, high-speed data (Internet) and telephony. In addition, ADDvantage operates a national network of technical repair centers focused primarily on Cable TV equipment and recycles surplus and obsolete Cable TV and telecommunications equipment.

ADDvantage operates through its subsidiaries, Tulsat, Tulsat-Atlanta, Tulsat-Arizona, Tulsat-Nebraska, Tulsat-Tennessee, Tulsat-Texas, NCS Industries, ComTech Services and Nave 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.

Non-GAAP Financial Measures
EBITDA is a supplemental, non-GAAP financial measure.  EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization.  Management believes providing EBITDA in this release is useful to investors’ understanding and assessment of the Company’s ongoing continuing operations and prospects for the future and it is a used by the financial community to evaluate the market value of companies considered to be in similar businesses.  Since EBITDA is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net earnings as an indicator of operating performance.  EBITDA, as calculated in the table below, may not be comparable to similarly titled measures employed by other companies.  In additions, EBITDA is not necessarily a measure of our ability to fund our cash needs.

(Tables follow)

 
 
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
 
  Three Months Ended March 31,  Six Months Ended March 31, 
    2016     2015     2016     2015  
Sales$10,587,187 $11,366,539 $18,836,855 $22,203,697 
Cost of sales   7,002,575    7,123,027   12,486,863  14,128,382 
Gross profit 3,584,612  4,243,512  6,349,992  8,075,315 
Operating, selling, general and administrative expenses 3,256,403  3,803,155  5,925,028  6,878,614 
Income from operations 328,209  440,357  424,964  1,196,701 
Other income (expense):    
Other income 109,554  –  109,554  – 
Interest income 2,172  –  2,172  – 
Loss from equity method investment (140,998) –  (140,998) – 
Interest expense   (62,307)   (79,102)   (130,068)   (164,523)
Total other income (expense), net   (91,579)   (79,102)   (159,340)   (164,523)
             
Income before provision for income taxes 236,630  361,255  265,624  1,032,178 
Provision for income taxes   91,000    127,000    96,000    382,000 
             
Net income$  145,630 $  234,255 $  169,624 $  650,178 
             
Earnings per share:    
Basic$0.01 $0.02 $0.02 $0.06 
Diluted$0.01 $0.02 $0.02 $0.06 
Shares used in per share calculation:    
Basic 10,092,319  10,051,844  10,080,729  10,046,525 
Diluted 10,092,319  10,051,844  10,080,729  10,046,525 


  Three Months Ended March 31, 2016  Three Months Ended March 31, 2015 
  Cable TV  Telco  Total  Cable TV  Telco  Total 
                   
Income (loss) from operations$336,279 $(8,070)$328,209 $347,839 $92,518 $440,357 
Depreciation 80,802  27,367  108,169  70,149  29,930  100,079 
Amortization −    206,451    206,451  −    206,451    206,451 
EBITDA$  417,081 $  225,748 $  642,829 $  417,988 $  328,899 $  746,887 


  Six Months Ended March 31, 2016  Six Months Ended March 31, 2015 
  Cable TV  Telco  Total  Cable TV  Telco  Total 
                   
Income (loss) from operations$453,119 $(28,155)$424,964 $966,650 $230,051 $1,196,701 
Depreciation 153,266  50,083  203,349  141,713  57,174  198,887 
Amortization −    412,902    412,902  −    412,903    412,903 
EBITDA$  606,385 $  434,830 $1,041,215 $1,108,363 $  700,128 $1,808,491 


 
 
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
 
  March
31,
2016		  September
30, 
2015 		 
Assets      
Current assets:      
Cash and cash equivalents$4,969,254 $6,110,986 
Accounts receivable, net of allowance for doubtful accounts of $250,000 5,650,300  4,286,377 
Income tax receivable 175,096  – 
Inventories, net of allowance for excess and obsolete  
inventory of $3,056,628 and $2,756,628, respectively 21,757,901  23,600,996 
Prepaid expenses 354,962  153,454 
Deferred income taxes   1,740,000    1,776,000 
Total current assets 34,647,513  35,927,813 
   
Property and equipment, at cost 11,066,923  10,785,799 
Less: Accumulated depreciation (4,774,500) (4,584,796)
Net property and equipment 6,292,423  6,201,003 
   
Investment in and loans to equity method investee 280,562  – 
Intangibles, net of accumulated amortization 5,386,571  5,799,473 
Goodwill 3,910,089  3,910,089 
Other assets   135,988    134,678 
       
Total assets$50,653,146 $51,973,056 
       
Liabilities and Shareholders’ Equity  
Current liabilities:  
Accounts payable$2,055,719 $1,784,482 
Accrued expenses 979,778  1,358,681 
Income tax payable –  122,492 
Notes payable – current portion 888,845  873,752 
Other current liabilities   941,534    982,094 
Total current liabilities 4,865,876  5,121,501 
   
Notes payable, less current portion 3,917,289  4,366,130 
Deferred income taxes 296,000  286,000 
Other liabilities   114,679    1,064,717 
Total liabilities 9,193,844  10,838,348 
   
Shareholders’ equity:  
Common stock, $.01 par value; 30,000,000 shares authorized; 10,634,893 and 10,564,221 shares issued, respectively; 10,134,235 and 10,063,563 shares outstanding, respectively 106,349  105,642 
Paid in capital (4,958,006) (5,112,269)
Retained earnings 47,310,973  47,141,349 
Total shareholders’ equity before treasury stock 42,459,316  42,134,722 
   
Less: Treasury stock, 500,658 shares, at cost (1,000,014) (1,000,014)
Total shareholders’ equity 41,459,302  41,134,708 
       
Total liabilities and shareholders’ equity$50,653,146 $51,973,056 
For further information	
Company Contact:
Scott Francis	
(918) 251-9121	

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