Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5972
    -0.0003 (-0.05%)
     
  • NZD/EUR

    0.5537
    +0.0004 (+0.07%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,311.91
    +143.84 (+0.36%)
     
  • NZD/JPY

    90.3410
    -0.0520 (-0.06%)
     

ADDvantage Technologies Revenue Increases 31% to $25.9 Million, Record Net Income of $1.5 Million for the Third Quarter of Fiscal 2022

ADDvantage Technologies Group, Inc.
ADDvantage Technologies Group, Inc.

Record Quarterly EPS of $0.11 vs. $0.05, $5.2 Million in Cash Flow from Operations and $4.9 Million in Cash at September 30

CARROLLTON, Texas, Nov. 14, 2022 (GLOBE NEWSWIRE) -- ADDvantage Technologies Group, Inc. (NASDAQ: AEY) (“ADDvantage Technologies” or the “Company”) today reported record financial results for the three and nine months ended September 30, 2022, the third quarter of 2022. The Company has changed its fiscal year end from September 30 to December 31, and this report reflects that adjustment with fiscal year-to-date periods of January 1 to September 30.

“Continued double-digit revenue growth, strong demand for our solutions on both sides of our business, and the benefit of cost reduction and margin enhancement initiatives drove record net income for ADDvantage Technologies,” commented Joe Hart, Chief Executive Officer. “Our overall growth continues to be led by our Telco segment, which increased more than $5.3 million in the quarter on strong demand for optical, wireless and enterprise products to offset supply chain challenges for new equipment and fuel the distributed workforce trends. This business generated nearly $2.0 million in contribution margin in the quarter.”

ADVERTISEMENT

“Our Wireless segment continues to grow, and we are moving toward profitability for this segment as we drive operational efficiencies and reach an inflection point in terms of revenue,” continued Mr. Hart. “The fourth quarter is typically impacted by weather-related and holiday seasonality, but we are continuing to expand our presence with wireless carriers in key geographies, and we expect 2023 will reflect strong demand and strategic investments in our operations. As a result, we anticipate further wireless expansion and positive contribution margin, bolstering our profitable consolidated results.”

Financial Results for the Three Months ended September 30, 2022

Third quarter sales were $25.9 million, an increase of $6.2 million, or 31% compared to $19.7 million last year. The increase was primarily due to an increase of $0.9 million, or 13% in Wireless revenue related to 5G tower work, and an increase of $5.3 million, or 42% in Telco revenue due to increased demand for optical and wireless equipment sold by the Telco segment.

Gross profit was $8.5 million, or 33% gross margin, compared to gross profit of $5.0 million, or 25% gross margin, for the same period last year. Operating expenses decreased $0.3 million, or 12%, to $2.3 million reflecting the previously announced cost-reduction initiatives. Consolidated selling, general and administrative (“SG&A”) expenses include overhead, which consist of personnel, insurance, professional services, communication, and other cost categories, increased $0.1 million or 2%, to $4.5 million for the three months ended September 30, 2022 from $4.4 million for the same period last year. The increase in SG&A relates primarily to increased selling and commissions expenses to support higher revenues.

Net income for the quarter was a record $1.5 million, or $0.11 per basic and diluted share, compared to net income of $0.6 million (which includes a $3.0 million gain on extinguishment of debt related to the forgiveness of a PPP loan), or $0.05 per diluted share, for the third quarter last year.

Financial Results for the Nine Months ended September 30, 2022 (the period from January 1 to September 30)

For the period from January 1, 2022 to September 30, 2022, sales were $77.5 million, an increase of 57% compared to $49.4 million for the same period last year. Wireless segment revenue increased 48% to $22.9 million and Telco segment revenue increased 61% to $54.6 million.

Gross profit was $22.4 million, or 29% gross margin, compared to gross profit of $12.5 million, or 25% gross margin, for the same period last year. Operating expenses increased $0.3 million to $7.6 million from $7.3 million the same period last year. Year-to-date net income was $1.0 million, or $0.07 per basic and diluted share, compared to a net loss of $4.5 million (which includes a $3.0 million gain on extinguishment of debt related to the forgiveness of a PPP loan), or $(0.36) per diluted share last year.

Balance sheet

Cash and cash equivalents were $4.9 million as of September 30, 2022, compared with $1.8 million at December 31, 2021. As of September 30, 2022, the Company had net inventories of $8.7 million.

During the nine months ended September 30, 2022, the Company paid off its line of credit. Outstanding debt as of September 30, 2022 was $1.7 million, consisting of vehicle financing leases.

Earnings Conference Call

The Company will host a conference call on Monday, November 14, 2022 at 5 p.m. Eastern.

Date:

Monday, November 14, 2022

Time:

5 p.m. Eastern

Toll-free Dial-in Number:

1-800-239-9838

International Dial-in Number:

1-323-794-2551

Conference ID:

5532960

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.

A replay of the conference call will be available through November 28, 2022.

Toll-free Replay Number:

1-844-512-2921

International Replay Number:

1-412-317-6671

Replay Passcode:

5532960

An 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. (Nasdaq: AEY) is a communications infrastructure services and equipment provider operating a diversified group of companies through its Wireless Infrastructure Services and Telecommunications segments. Through its Wireless segment, Fulton Technologies provides turn-key wireless infrastructure services including the installation, modification and upgrading of equipment on communication towers and small cell sites for wireless carriers, national integrators, tower owners and major equipment manufacturers. Through its Telecommunications segment, Nave Communications and Triton Datacom sell equipment and hardware used to acquire, distribute, and protect the communications signals carried on fiber optic, coaxial cable and wireless distribution systems. The Telecommunications segment also offers repair services focused on telecommunication equipment and recycling surplus and related obsolete telecommunications equipment.

ADDvantage operates through its subsidiaries, Fulton Technologies, Nave Communications, and Triton Datacom. For more information, please visit the corporate web site at www.addvantagetechnologies.com.

Cautions Regarding Forward-Looking Statements

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.

For further information:
Hayden IR
Brett Maas
(646) 536-7331
aey@haydenir.com


ADDvantage Technologies Group, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)

 

September 30,
2022

 

December 31,
2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

4,923

 

 

$

1,837

 

Restricted cash

 

1,785

 

 

 

581

 

Accounts receivable, net of allowances of $250, respectively

 

2,403

 

 

 

6,469

 

Unbilled revenue

 

2,578

 

 

 

2,219

 

Inventories, net of allowances of $3,831 and $3,567, respectively

 

8,665

 

 

 

5,653

 

Prepaid expenses and other assets

 

1,648

 

 

 

1,371

 

Total current assets

 

22,002

 

 

 

18,130

 

 

 

 

 

Property and equipment, at cost:

 

 

 

Machinery and equipment

 

5,131

 

 

 

5,354

 

Leasehold improvements

 

899

 

 

 

821

 

Total property and equipment, at cost

 

6,030

 

 

 

6,175

 

Less: Accumulated depreciation

 

(2,828

)

 

 

(2,558

)

Net property and equipment

 

3,202

 

 

 

3,617

 

Right-of-use lease assets

 

1,776

 

 

 

2,466

 

Intangibles, net of accumulated amortization

 

788

 

 

 

1,027

 

Goodwill

 

58

 

 

 

58

 

Other assets

 

124

 

 

 

128

 

Total assets

$

27,950

 

 

$

25,426

 


Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

9,025

 

$

6,812

Accrued expenses

 

1,771

 

 

1,184

Deferred revenue

 

287

 

 

207

Bank line of credit

 

 

 

2,050

Right-of-use lease obligations, current

 

1,235

 

 

1,177

Finance lease obligations, current

 

573

 

 

652

Other current liabilities

 

567

 

 

706

Total current liabilities

 

13,458

 

 

12,788

Right-of-use lease obligations, long-term

 

905

 

 

1,839

Finance lease obligations, long-term

 

1,117

 

 

1,484

Total liabilities

 

15,480

 

 

16,111

Shareholders’ equity:

 

 

 

Common stock, $0.01 par value; 30,000,000 shares authorized; 14,043,642 and 13,041,127 shares issued and outstanding, respectively

 

140

 

 

130

Paid in capital

 

2,516

 

 

335

Retained earnings

 

9,814

 

 

8,850

Total shareholders’ equity

 

12,470

 

 

9,315

Total liabilities and shareholders’ equity

$

27,950

 

$

25,426

 

 

 

 

 

 


ADDvantage Technologies Group, Inc.
Consolidated Statement of Operations
(in thousands, except share and per share amounts)
(Unaudited)

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Sales

$

25,926

 

 

$

19,727

 

 

$

77,474

 

 

$

49,411

 

Cost of sales

 

17,383

 

 

 

14,679

 

 

 

55,026

 

 

 

36,913

 

Gross profit

 

8,543

 

 

 

5,048

 

 

 

22,448

 

 

 

12,498

 

Operating expenses

 

2,303

 

 

 

2,607

 

 

 

7,600

 

 

 

7,282

 

Selling, general and administrative expenses

 

4,464

 

 

 

4,357

 

 

 

12,459

 

 

 

11,675

 

Depreciation and amortization expense

 

295

 

 

 

329

 

 

 

925

 

 

 

947

 

Gain on disposal of assets

 

311

 

 

 

10

 

 

 

309

 

 

 

23

 

Income (loss) from operations

 

1,792

 

 

 

(2,235

)

 

 

1,773

 

 

 

(7,383

)

Other income (expense):

 

 

 

 

 

 

 

Gain on extinguishment of debt

 

 

 

 

2,955

 

 

 

 

 

 

2,955

 

Interest income

 

 

 

 

20

 

 

 

 

 

 

87

 

Other expense, net

 

(273

)

 

 

(49

)

 

 

(675

)

 

 

(91

)

Interest expense

 

(36

)

 

 

(82

)

 

 

(134

)

 

 

(170

)

Other income (expense), net

 

(309

)

 

 

2,844

 

 

 

(809

)

 

 

2,781

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

1,483

 

 

 

609

 

 

 

964

 

 

 

(4,602

)

Benefit for income taxes

 

 

 

 

(30

)

 

 

 

 

 

(53

)

 

 

 

 

 

 

 

 

Net income (loss)

$

1,483

 

 

$

639

 

 

$

964

 

 

$

(4,549

)

 

 

 

 

 

 

 

 

Income (loss) per share:

 

 

 

 

 

 

 

Basic and diluted

$

0.11

 

 

$

0.05

 

 

$

0.07

 

 

$

(0.36

)

Shares used in per share calculation:

 

 

 

 

 

 

 

Basic and diluted

 

13,638,162

 

 

 

12,543,727

 

 

 

13,302,410

 

 

 

12,485,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Non-GAAP Financial Measure

Adjusted EBITDA is a supplemental, non-GAAP financial measure. EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA as presented also excludes impairment charges for operating lease right-of-use assets and intangible assets including goodwill, stock compensation expense, other income, other expense, interest income and income from equity method investment. Adjusted EBITDA is presented below because this metric is used by the financial community as a method of measuring our financial performance and of evaluating the market value of companies considered to be in similar businesses. Since Adjusted 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. Adjusted EBITDA, as calculated below, may not be comparable to similarly titled measures employed by other companies. In addition, Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs.

The following table provides a reconciliation by segment of loss from operations to Adjusted EBITDA for the three and nine month periods ended September 30, 2022 and 2021, in thousands:

 

Three Months Ended September 30, 2022

 

Three Months Ended September 30, 2021

 

Wireless

 

Telco

 

Total

 

Wireless

 

Telco

 

Total

Income (loss) from operations

$

(202

)

 

$

1,994

 

$

1,792

 

$

(2,105

)

 

$

(130

)

 

$

(2,235

)

Depreciation and amortization expense

 

173

 

 

 

121

 

 

294

 

 

202

 

 

 

127

 

 

 

329

 

Stock compensation expense

 

78

 

 

 

72

 

 

150

 

 

132

 

 

 

36

 

 

 

168

 

Adjusted EBITDA

$

49

 

 

$

2,187

 

$

2,236

 

$

(1,771

)

 

$

33

 

 

$

(1,738

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

Nine Months Ended September 30, 2021

 

Wireless

 

Telco

 

Total

 

Wireless

 

Telco

 

Total

Income (loss) from operations

$

(3,859

)

 

$

5,632

 

$

1,773

 

$

(5,759

)

 

$

(1,624

)

 

$

(7,383

)

Depreciation and amortization expense

 

561

 

 

 

364

 

 

925

 

 

563

 

 

 

384

 

 

 

947

 

Stock compensation expense

 

234

 

 

 

266

 

 

500

 

 

375

 

 

 

318

 

 

 

693

 

Adjusted EBITDA

$

(3,064

)

 

$

6,262

 

$

3,198

 

$

(4,821

)

 

$

(922

)

 

$

(5,743

)