ADDvantage Technologies Group, Inc. (NASDAQ: AEY) (“ADDvantage
Technologies” or the “Company”) today reported financial results
for the three and 12 months ended December 31, 2022, the fourth
quarter of 2022. The Company has changed its fiscal year end from
September 30 to December 31 and the current fiscal year runs from
January 1, 2022 through December 31, 2022 (fiscal 2022).
“This was a milestone year for ADDvantage Technologies, as we
grew both our segments and delivered full-year positive net income,
even with a challenging fourth quarter impacted by weather and
economic headwinds,” commented Joe Hart, Chief Executive Officer.
“Our Telco segment drove the majority of our growth, and this
business benefits from customers seeking lower-cost technology such
as our high-quality optical transport and refurbished end-user
solutions. Our Wireless segment grew steadily throughout the year,
delivering 49% year-over-year growth. We continue to gain market
share in our target regions.”
“Recent upheaval in the wireless industry, and struggles of
longstanding players, is creating new and exciting opportunities
for us,” continued Mr. Hart. “Leading carriers are seeking new
partners, partly due to the volume of work and partly due to issues
involving legacy providers. We are well-positioned to secure new,
long-term contracts due to our strong relationships with carriers
and our capabilities.”
Financial Results for the Three Months ended December
31, 2022
Fourth quarter sales were $19.6 million, an increase of $0.9
million, or 5% compared to $18.7 million last year. The increase
was primarily due to an increase of $0.8 million, or 11% in
Wireless revenue due to 5G tower work, and an increase of $0.1
million, or 1%, in Telco revenue.
Gross profit was $5.3 million, or 27% gross margin, compared to
gross profit of $4.6 million, or 25% gross margin, for the same
period last year. Operating expenses decreased $0.3 million, or
10%, to $2.2 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, decreased $0.6 million or
16%, to $3.1 million for the three months ended December 31, 2022
from $3.7 million for the same period last year.
Net loss for the quarter was $0.5 million, or $(0.04) per basic
and diluted share, compared to a net loss of $2.0 million, or
$(0.16) per basic and diluted share, for the fourth quarter last
year. The December quarter is typically slow due to weather which
impacts Wireless work, and holidays which impact Telco sales.
Financial Results for the 12 Months ended December 31,
2022 (the period from January 1 to December 31)
For fiscal 2022, sales were $97.0 million, an increase of 56%
compared to $62.2 million for the fiscal year ended September 30,
2021. Wireless segment revenue increased 49% to $30.8 million and
Telco segment revenue increased 59% to $66.2 million.
Gross profit was $27.8 million, or 29% gross margin, compared to
gross profit of $16.1 million, or 26% gross margin, for the prior
year. Operating expenses increased $0.5 million to $9.8 million.
Full-year net income was $0.5 million, or $0.03 per basic and
diluted share, compared to a net loss of $6.5 million, or $(0.52)
per basic and diluted share last year.
Balance sheet
Cash and cash equivalents were $3.7 million as
of December 31, 2022, compared with $2.4 million at December 31,
2021. As of December 31, 2022, the Company had net inventories of
$9.6 million.
During the year ended December 31, 2022, the
Company paid off its line of credit. Outstanding debt as of
December 31, 2022 was $1.9 million, consisting of vehicle financing
leases.
Earnings Conference Call
The Company will host a conference call on Tuesday,
March 21, 2023 at 5 p.m. Eastern. |
|
|
Date: |
Tuesday, March 21, 2023 |
Time: |
5 p.m. Eastern |
Toll-free Dial-in Number: |
1-877-407-9039 |
International Dial-in Number: |
1-201-689-8470 |
Conference ID: |
13736536 |
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 April 4, 2023. |
|
|
Toll-free Replay Number: |
1-844-512-2921 |
International Replay Number: |
1-412-317-6671 |
Replay Passcode: |
13736536 |
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 IRBrett Maas(646)
536-7331aey@haydenir.com
-- Tables follow –
ADDvantage Technologies Group,
Inc.Consolidated Balance
Sheets(in thousands, except share
amounts)
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
2,552 |
|
|
$ |
1,837 |
|
Restricted cash |
|
1,101 |
|
|
|
581 |
|
Accounts receivable, net of allowances of $262 and $250,
respectively |
|
1,682 |
|
|
|
6,469 |
|
Unbilled revenue |
|
5,005 |
|
|
|
2,219 |
|
Income tax receivable |
|
102 |
|
|
|
— |
|
Inventories, net of allowance of $3,871 and $3,567,
respectively |
|
9,563 |
|
|
|
5,653 |
|
Prepaid expenses and other current assets |
|
1,399 |
|
|
|
1,371 |
|
Total current assets |
|
21,404 |
|
|
|
18,130 |
|
|
|
|
|
Property and equipment, at
cost: |
|
|
|
Machinery and equipment |
|
5,542 |
|
|
|
5,354 |
|
Leasehold improvements |
|
899 |
|
|
|
821 |
|
Total property and equipment, at
cost |
|
6,441 |
|
|
|
6,175 |
|
Less: Accumulated
depreciation |
|
(3,057 |
) |
|
|
(2,558 |
) |
Net property and equipment |
|
3,384 |
|
|
|
3,617 |
|
Right-of-use lease assets |
|
1,540 |
|
|
|
2,466 |
|
Intangibles, net of accumulated
amortization |
|
709 |
|
|
|
1,027 |
|
Goodwill |
|
58 |
|
|
|
58 |
|
Other assets |
|
123 |
|
|
|
128 |
|
|
|
|
|
Total assets |
$ |
27,218 |
|
|
$ |
25,426 |
|
Liabilities and
Shareholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
9,407 |
|
|
$ |
6,812 |
|
Accrued expenses |
|
1,445 |
|
|
|
1,184 |
|
Deferred revenue |
|
148 |
|
|
|
207 |
|
Bank line of credit |
|
— |
|
|
|
2,050 |
|
Right-of-use lease obligations, current |
|
1,204 |
|
|
|
1,177 |
|
Finance lease obligations, current |
|
636 |
|
|
|
652 |
|
Other current liabilities |
|
442 |
|
|
|
706 |
|
Total current liabilities |
|
13,282 |
|
|
|
12,788 |
|
Right-of-use lease obligations, long-term |
|
635 |
|
|
|
1,839 |
|
Finance lease obligations, long-term |
|
1,254 |
|
|
|
1,484 |
|
Total liabilities |
|
15,171 |
|
|
|
16,111 |
|
Shareholders’ equity: |
|
|
|
Common stock, $.01 par value; 30,000,000 shares authorized;
14,132,033 and 13,041,127 shares issued and outstanding,
respectively |
|
141 |
|
|
|
130 |
|
Paid in capital |
|
2,585 |
|
|
|
335 |
|
Retained earnings |
|
9,321 |
|
|
|
8,850 |
|
Total shareholders’ equity |
$ |
12,047 |
|
|
$ |
9,315 |
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
27,218 |
|
|
$ |
25,426 |
|
ADDvantage Technologies Group,
Inc.Consolidated Statements of
Operations(in thousands, except share and per
share amounts)
|
Three months ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Sales |
$ |
19,554 |
|
|
$ |
18,690 |
|
|
$ |
97,028 |
|
|
$ |
62,160 |
|
Cost of sales |
|
14,213 |
|
|
|
14,059 |
|
|
|
69,239 |
|
|
|
46,033 |
|
Gross profit |
|
5,341 |
|
|
|
4,631 |
|
|
|
27,789 |
|
|
|
16,127 |
|
Operating expenses |
|
2,245 |
|
|
|
2,500 |
|
|
|
9,845 |
|
|
|
9,329 |
|
Selling, general and
administrative expense |
|
3,112 |
|
|
|
3,688 |
|
|
|
15,571 |
|
|
|
14,890 |
|
Depreciation and amortization
expense |
|
309 |
|
|
|
345 |
|
|
|
1,234 |
|
|
|
1,228 |
|
Gain on disposal of assets |
|
29 |
|
|
|
— |
|
|
|
338 |
|
|
|
23 |
|
Income (loss) from
operations |
|
(296 |
) |
|
|
(1,902 |
) |
|
|
1,477 |
|
|
|
(9,297 |
) |
Other income (expense): |
|
|
|
|
|
|
Gain on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,955 |
|
Interest income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
135 |
|
Interest expense |
|
(42 |
) |
|
|
(55 |
) |
|
|
(176 |
) |
|
|
(238 |
) |
Other expense |
|
(147 |
) |
|
|
(72 |
) |
|
|
(822 |
) |
|
|
(110 |
) |
Other income (expense), net |
|
(189 |
) |
|
|
(127 |
) |
|
|
(998 |
) |
|
|
2,742 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
|
(485 |
) |
|
|
(2,029 |
) |
|
|
479 |
|
|
|
(6,555 |
) |
Income tax provision
(benefit) |
|
8 |
|
|
|
— |
|
|
|
8 |
|
|
|
(53 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(493 |
) |
|
$ |
(2,029 |
) |
|
$ |
471 |
|
|
$ |
(6,502 |
) |
|
|
|
|
|
|
|
|
|
|
Income (loss) per share: |
|
|
|
|
|
|
Basic and diluted |
$ |
(0.04 |
) |
|
$ |
(0.16 |
) |
|
$ |
0.03 |
|
|
$ |
(0.52 |
) |
Shares used in per share
calculation: |
|
|
|
|
|
|
Basic and diluted |
|
14,023,911 |
|
|
|
12,683,312 |
|
|
|
13,484,271 |
|
|
|
12,401,043 |
|
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 stock compensation expense, gain
on extinguishment of debt, impairment of intangibles and right of
use assets, 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 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.
A reconciliation by segment of loss from operations to Adjusted
EBITDA follows, in thousands:
|
Three Months Ended December 31, 2022 |
|
Three Months Ended December 31, 2021 |
|
Wireless |
|
Telco |
|
Total |
|
Wireless |
|
Telco |
|
Total |
Income (loss) from operations |
$ |
(933 |
) |
|
$ |
637 |
|
|
$ |
(296 |
) |
|
$ |
(2,326 |
) |
|
$ |
424 |
|
|
$ |
(1,902 |
) |
Depreciation and amortization
expense |
|
188 |
|
|
|
121 |
|
|
|
309 |
|
|
|
220 |
|
|
|
125 |
|
|
|
345 |
|
Stock compensation expense |
|
40 |
|
|
|
30 |
|
|
|
70 |
|
|
|
144 |
|
|
|
137 |
|
|
|
281 |
|
Adjusted
EBITDA |
$ |
(705 |
) |
|
$ |
788 |
|
|
$ |
83 |
|
|
$ |
(1,962 |
) |
|
$ |
686 |
|
|
$ |
(1,276 |
) |
|
For the year ended December 31, 2022 |
|
For the year ended September 30, 2021 |
|
Wireless |
|
Telco |
|
Total |
|
Wireless |
|
Telco |
|
Total |
Income (loss) from operations |
$ |
(4,792 |
) |
|
$ |
6,269 |
|
|
$ |
1,477 |
|
|
$ |
(6,864 |
) |
|
$ |
(2,433 |
) |
|
$ |
(9,297 |
) |
Depreciation and amortization
expense |
|
749 |
|
|
|
485 |
|
|
|
1,234 |
|
|
|
715 |
|
|
|
513 |
|
|
|
1,228 |
|
Stock compensation expense |
|
274 |
|
|
|
296 |
|
|
|
570 |
|
|
|
516 |
|
|
|
493 |
|
|
|
1,009 |
|
Adjusted
EBITDA |
$ |
(3,769 |
) |
|
$ |
7,050 |
|
|
$ |
3,281 |
|
|
$ |
(5,633 |
) |
|
$ |
(1,427 |
) |
|
$ |
(7,060 |
) |
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