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

BROKEN ARROW, Okla., Aug. 13, 2013 (GLOBE NEWSWIRE) -- ADDvantage Technologies Group, Inc. (Nasdaq:AEY), today announced its results for the three and nine month periods ended June 30, 2013.

Revenue for the three months ended June 30, 2013 decreased 16% to $7.2 million compared to $8.5 million for the same period last year. New equipment sales were $4.3 million for the three months ended June 30, 2013 as compared to $4.7 million for the three months ended June 30, 2012. Net refurbished equipment sales were $1.9 million for the three months periods ended June 30, 2013 as compared to $2.7 million for same period in 2012. Service revenue decreased to $1.0 million for the three month period ended June 30, 2013 compared to $1.1 million for the same period last year.

Net income decreased to $0.2 million, or $0.02 per basic and diluted share, for the three month period ended June 30, 2013, compared to $0.5 million, or $0.05 per basic and diluted share, for the same period last year.

For the nine months ended June 30, 2013, revenue decreased to $25.0 million from $26.7 million for the same period last year. The decrease in net sales was primarily due to the continued decrease in plant expansions and bandwidth upgrades in the cable television industry, partially offset by increased equipment sales as a result of Hurricane Sandy.

Net income increased $0.5 million to $1.3 million, or $0.13 per basic and diluted share, for the nine month period ended June 30, 2013 as compared to $0.8 million, or $0.08 per basic and diluted share, for the first nine months of fiscal 2012. The nine month period ended June 30, 2012 included a charge to interest expense of $0.8 million associated with the termination of an interest rate swap agreement following the early payoff of one of its term loans in March 2012.

Cash and cash equivalents were $8.2 million as of June 30, 2013 compared to $5.2 million as of September 30, 2012. As of June 30, 2013, we had inventory of $21.4 million compared to $22.7 million as of September 30, 2012.

"While the results for the third quarter are disappointing from a revenue standpoint, we still achieved positive net income and cash flows, which further strengthened our balance sheet," stated David Humphrey, President and CEO. "In addition, we have seen an uptick in customer demand in the current quarter. And we are still focused on executing our growth strategy, which includes growing our existing business as well as executing strategic acquisitions."

"In connection with this strategy, we are in the process of hiring three veteran salespeople formerly with one of our large OEM partners. These new salespeople have relationships with many of the large MSOs and an in-depth understanding of the various MSO infrastructures, which will help us better target our sales efforts going forward. This team is already working with us on a temporary basis and is expected to officially join us at the end of August."

"In addition, we are still working with our investment banker in our efforts to identify and execute a strategic acquisition within the CATV and telecommunication equipment markets."

"The path we have taken for the Company's growth is coming together as we execute upon our strategy. By building out our team and diversifying our business with a strategic acquisition, we believe that our company will be well positioned for long term growth," concluded Mr. Humphrey.

Earnings Conference Call

The Company will host a conference call on Tuesday, August 13, 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, 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 888-572-7025 (domestic) or 719-457-2664 (international). All dial-in participants must use the following code to access the call: 7596918. 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 27, 2013 at 877-870-5176 (domestic) or 858-384-5517 (international). Participants must use the following code to access the replay of the call: 7596918. 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

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)

Three Months Ended June 30, Nine Months Ended June 30,
2013 2012 2013 2012
Net new sales income $ 4,322,139 $ 4,739,752 $ 14,826,508 $ 15,901,691
Net refurbished sales income 1,882,377 2,691,269 7,271,044 7,646,819
Net service income 950,685 1,067,752 2,898,886 3,185,614
Total net sales 7,155,201 8,498,773 24,996,438 26,734,124
Cost of sales 5,126,339 5,910,937 17,675,951 18,879,948
Gross profit 2,028,862 2,587,836 7,320,487 7,854,176
Operating, selling, general and administrative expenses 1,642,965 1,828,238 5,156,474 5,387,715
Income from operations 385,897 759,598 2,164,013 2,466,461
Interest expense 6,377 7,300 19,767 1,106,662
Income before provision for income taxes 379,520 752,298 2,144,246 1,359,799
Provision for income taxes 144,000 293,000 815,000 530,000
Net income 235,520 459,298 1,329,246 829,799
Other comprehensive income:
Unrealized gain on interest rate swap, net of taxes 587,258
Comprehensive income $ 235,520 $ 459,298 $ 1,329,246 $ 1,417,057
Earnings per share:
Basic $ 0.02 $ 0.05 $ 0.13 $ 0.08
Diluted $ 0.02 $ 0.05 $ 0.13 $ 0.08
Weighted average shares used in per share calculation:
Basic 9,998,480 10,189,120 10,070,567 10,198,691
Diluted 9,998,480 10,189,683 10,070,781 10,199,756
June 30,
September 30,
Current assets:
Cash and cash equivalents $ 8,228,838 $ 5,191,514
Accounts receivable, net of allowance of $300,000 2,607,014 3,050,796
Income tax refund receivable 409,386
Inventories, net of allowance for excess and obsolete inventory of $1,540,000 and $1,000,000, respectively 21,428,235 22,666,385
Prepaid expenses 146,058 129,357
Deferred income taxes 1,003,000 920,000
Total current assets 33,413,145 32,367,438
Property and equipment, at cost:
Land and buildings 8,840,822 8,794,272
Machinery and equipment 3,036,772 2,953,949
Leasehold improvements 9,633 9,633
Total property and equipment, at cost 11,887,227 11,757,854
Less accumulated depreciation and amortization (3,899,201) (3,666,327)
Net property and equipment 7,988,026 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 $ 42,972,782 $ 42,032,926
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,620,776 $ 1,437,492
Accrued expenses 850,969 1,030,174
Notes payable – current portion 184,008 184,008
Total current liabilities 2,655,753 2,651,674
Notes payable, less current portion 1,364,606 1,502,612
Deferred income taxes 140,000 62,000
Shareholders' equity:
Common stock, $.01 par value; 30,000,000 shares authorized; 10,499,138 and 10,465,323 shares issued, respectively; and 9,998,480 and 10,189,120 shares outstanding, respectively 104,991 104,653
Paid in capital (5,602,390) (5,748,503)
Retained earnings 45,309,836 43,980,590
Total shareholders' equity before treasury stock 39,812,437 38,336,740
Less: Treasury stock, 500,658 and 276,203 shares, respectively, at cost (1,000,014) (520,100)
Total shareholders' equity 38,812,423 37,816,640
Total liabilities and shareholders' equity $ 42,972,782 $ 42,032,926

CONTACT: Company Contact: Scott Francis (9l8) 25l-9121 KCSA Strategic Communications Garth Russell / Diane Imas (212) 896-1250 / (212) 896-1242 / dimas@kcsa.comSource:ADDvantage Technologies Group, Inc.