Good morning, ladies and gentlemen, welcome to Wayside Technology Group conference call. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session. Please note that all callers are limited to one question each. If anyone should require assistance during the conference, please press the star then zero key on your touchtone telephone. As a reminder, ladies and gentlemen, this conference is being recorded. I would now like to introduce your host for today's conference, Melanie Caponigro. Ms. Caponigro, you may begin your conference at this time.
Thank you, good morning. Welcome to Wayside Technology's fourth quarter 2016 earnings call. Before turning the call over to Simon Nynens, the company's Chairman and CEO, I'll dispense with the customary cautionary language and comment about the webcast for this earnings call. We released earnings for the fourth quarter at approximately 5:00 P.M. Eastern Time, Thursday, February 2nd, 2017. The earnings release is available at the company's investor relations website at waysidetechnology.com. Today's call, including all questions and answers, is being webcast live and a rebroadcast will be available at www.waysidetechnology.com/site/content/webcasts. This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, February 3rd, 2017. A detailed discussion of risks and uncertainties are discussed in our Forms 10-Q and also in greater detail in our Form 10-K. Wayside Technology Group, Inc.
sees no obligation to update and does not intend to update any forward-looking statements. I would like to turn the call over to Simon Nynens.
Thank you, Melanie, good morning to everyone. We had a great fourth quarter. Our net income for the fourth quarter increased 22% to $2 million, compared to $1.6 million during the same period last year, diluted earnings per share increased 29% to $0.45 and were up 5% for the year. Our Lifeboat division represented 88% of our revenue and 84% of segment income in the fourth quarter. Our international sales were 12% of our overall revenue, down from 15% for Q4 of 2015. I want to start by congratulating Kevin Askew as our Vice President and General Manager for TechXtend. Kevin was promoted in January, he has been with us since 2010 and has been our Senior Director of Sales and Marketing for TechXtend since 2014. I would like to hand it over to Bill Bottai, our Executive Vice President.
Thank you, Simon. As stated earlier by Simon, we had a solid quarter when compared with a good Q4 in 2015. In 2016, we grew revenue in all geographies and business units and did the same in gross profit dollars in most of them. Net sales for the quarter ended December 31st, 2016, increased 20% to $120 million, compared to $99.8 million for the same period in 2015. Lifeboat distribution segment net sales for the quarter ended December 31st, 2016, increased 15% to $102.4 million compared to $89.4 million for the same period in 2015. TechXtend segment net sales for the quarter ended December 31st, 2016, increased 70% to $17.6 million, compared to $10.4 million for the same period in 2015. The increase in TechXtend sales is primarily driven by large extended payment term sales.
Net sales for the year ended December 31st, 2016, increased 9% to $418.1 million compared to $382.1 million for the same period in 2015. Lifeboat segment net sales for the year ended December 31st, 2016, increased 9% to $369.5 million, compared to $339.7 million for the same period in 2015. TechXtend segment net sales during this year ended December 31st, 2016, increased 15% to $48.6 million, compared to $42.4 million for the same period in 2015. Gross profit for the quarter ended December 31st, 2016, increased 16% to $8 million compared to $6.9 million for the same period in 2015. Lifeboat distribution gross profit for the quarter ended December 31st, 2016, increased 9% to $6.2 million, compared to $5.7 million for the same period in 2015. TechXtend gross profit for the fourth quarter 2016 increased 48% to $1.8 million, compared to $1.2 million for 2015.
Gross profit for the year ended December 31st, 2016, increased 3% to $27.3 million, compared to $26.6 million for the same period in 2015. Lifeboat distribution segment gross profit for the year ended December 31st, 2016, increased 4% to $22.3 million, compared to $21.5 million for the same period in 2015. TechXtend gross profit remained constant at approximately $5 million for the years ended December 31st, 2016 and 2015. Gross profit margin, gross profit as a percentage of net sales, for the year ended December 31st decreased by 0.5 percentage points to 6.5%, compared to 7% for the year ended December 31st, 2015. Lifeboat distribution segment gross profit margin for the year ended December 31st, 2016, decreased by 0.3 percentage points to 6%, compared to 6.3% for the year ended December 31st, 2015.
The TechXtend gross profit margin for the year ended December 31st, 2016 decreased 1.7 percentage points to 10.2%, compared to 11.9% for the year ended December 31st, 2015. Net income for the quarter ended December 31st, 2016 increased 22% to $2 million, compared to $1.6 million during the same period last year. Net income for the year ended December 31st, 2016 increased 1% to $5.9 million, compared to $5.8 million during the prior year. We continue to face margin pressure from the very large distribution companies we compete with in the market. We have managed to overcome most of that with increases in most of our vendors and customers. Some segments had increases while others decreased due to these pressures.
Like the updates to Lifeboat and TechXtend last quarter, we released a new Wayside Technology logo, brand, website, and refreshed our brand image with very positive feedback from customers and suppliers. With operations for Lifeboat being turned over to Brian Gilbertson mid-2016, and the recent promotion of Kevin Askew to run operations for TechXtend, this affords me the opportunity to focus my efforts on working with them on our strategy and to spend more time with customers and vendors. We continue to be excited about our future as we manage our expenses and build our product portfolio to help achieve our growth targets. Thank you. Simon, back to you.
Thank you, Bill. Mike Facey will now report on the financial numbers. Mike?
Thanks, Simon. I'll now review our operating expenses and some balance sheet highlights. Total SG&A expenses for the fourth quarter of 2016 increased $600,000 to $5.1 million, compared to $4.5 million in the same quarter last year. Total SG&A expenses for the full year 2016 increased $600,000 or 9.4% to $18.7 million, compared to $18.1 million in 2015. The increase in SG&A expenses is mainly attributable to increased stock-based compensation and employee-related expenses to support our growth, costs related to our new office relocation in October 2016, and increased public company compliance costs. SG&A expenses as a percentage of net sales actually decreased to 4.5% in 2016 compared to 4.8% in the prior year.
As Bill noted, our net income for the fourth quarter of 2016 increased 22% to $2 million, compared to $1.6 million in the fourth quarter last year, resulting in a slight increase for net income for the year end to December 31st, 2016 to $5.9 million from $5.8 million in the prior year. Earnings per share on a fully-diluted basis was $0.45 in the fourth quarter 2016, a 29% increase over the $0.35 from the same quarter last year. Full year diluted EPS for the full year 2016 increased 5% to $1.31 from $1.25 in the prior year. The EPS amounts reflect the impact of a lower number of outstanding shares due to our stock buyback program, in addition to the net income growth that Bill noted previously. Moving to our balance sheet.
Cash and cash equivalents was $13.5 million at December 31, 2016, compared to $23.8 million at December 31, 2015. Our cash balance reflects the impact of a higher investment in working capital at December 31, 2016, when compared to the prior year. With accounts receivable increasing by $24.4 million to $83.3 million and long-term accounts receivable increasing $3.7 million to $11.1 million at the end of 2016. The increased receivables were mainly driven by increased extended payment term sales, an increase in payment terms for one of our large reseller accounts, and the higher level of sales overall during the fourth quarter of 2016 when compared to the prior year. We collected about $9.5 million on two large extended payment sales we made in 2016, in the first couple of months of 2017.
During the year, we paid $3.2 million in dividends and utilized $5.4 million of our cash balance to purchase approximately $309,000 of our common stock. As of December 31, 2016, we have no outstanding debt or balances under our credit facility. Working capital was $24 million at the end of the year, compared to $30.6 million at the end of the prior year. Our stockholders' equity now stands at $37.6 million compared to $38.7 million in the prior year. At our February 2, 2017 board meeting, the board of directors declared a $0.17 per share dividend for its common stock, payable on February 27 to shareholders of record on February 16, 2017. The company has now paid dividends consecutively for over 56 quarters. In conclusion, the company continues to have solid operating results, strong balance sheet, and is adequately capitalized to support our continued growth plans. Simon?
Thank you, Mike. 2016 was truly a transformational year. New offices, new websites, new logos, new structure for our sales teams, and a new way of working together. Now it is executing, focusing on our jobs, having fun, and attracting even more vendors and customers. We are well settled in our new headquarters. As Bill mentioned, we released a great new website for Wayside Technology Group. We have great interest from new vendors in our offerings, and we continue to invest in expanding our offerings, including services. We also received two awards this quarter, the SmartCEO New Jersey Top Corporate Culture Award in November, and a Future 50 Award in January of this year based on revenue and employee growth in the last couple of years. We pride ourselves on providing the best possible place to work, generating great financial results, outperforming our competition.
In conclusion, it was a busy quarter and a busy year. I want to thank all of our team members for their hard work and dedication to the success of our company. Operator, we can now start the Q&A session.
Thank you. Ladies and gentlemen, at this time, if you have a question, please press the star, then one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. If you are using a speakerphone, please pick up the handset before asking a question. One moment, please, for the first question. Our first question comes from Jeff Gagan. Your line is open.
Thank you. Good morning, gentlemen. Hats off to you. Great quarter. This is really the recognition of a lot of hard work that you've described in the past, it's good to see that it's coming to fruition here.
Thank you, Jeff. Appreciate it.
Yeah. Glad to be able to make that comment to you. You have talked a little bit about extended payment terms. I think this has come up in the past. Would you be able to elaborate a little bit on what those terms are like and why they are attractive to your customer?
These relate to multi-year licenses. If you buy a license that is valid for three years, but your IT budget for a given year is set to a certain amount, what we are able to do is sell you the software for the full amount, and you can pay us in three equal terms. The software, it's an irrevocable purchase order. You cannot return the software, but you can spread the payments according to a plan that is more viable for you in terms to cope with IT expenses within your budget. It compares a lot to software as a service in terms of spreading out those payments equally over the time that you're using the software. We are using our excess cash in order to facilitate those payments, make it really easy for vendors and customers to work with us to facilitate those transactions.
Fabulous. Previously, you had announced the retention of outside advisors to consider strategic alternatives, presumably for the use of cash. Would it be fair for us to construe that this was the outcome of that conversation with your advisors, or will there be more to come?
No. What this really was, this is us operating and executing as a company. Our quarter, this was not impacted at all by our outside consultants looking for acquisitions. The determination internally was made, we have a lot of excess cash. We started using that years ago to pay a dividend. We also started to buy back stock on a conservative level, and we've increased that level of stock buybacks in the last couple of years because we think our stock is undervalued. In addition, we've used that cash internally to grow. As you saw, sales have gone up, but expenses have also gone up. Considering where we are in our life cycle, we really deem it important to continue to invest in the growth of our company compared to our competition and compared to the possible market that we address. We haven't even gotten started yet.
We really need to continue to invest in our own team. Yet that left another sum of money in terms of the excess cash, and we said, "Let's look at acquisitions to see if that makes sense." We hired a consultant to go out and see what kind of possible acquisitions are made. Having that said, looking at our multiples, and if you take the excess cash out of the balance sheet for which we don't seem to get a lot of recognition, we have about a PE multiple of about seven and a half, and a dividend yield of What is it, Mike? What is that dividend?
3.7 somewhere%. Yeah.
Yeah, close to 4%. It's hard to find an acquisition that is accretive. Having that said, as we've shown in the fourth quarter, the internal opportunities are there to grow. If for us, it's a determination, where do you invest, where we can reap the largest benefits? That's a constant moving play field.
It seems like you're doing a good job of that. Following up on your comment, if you think the company's stock is undervalued, and I know you can't say what you think the fair value is other than your comment that it's undervalued. Can you share with us how do you think about the valuation of the business in terms of what are the important metrics or drivers that lead you to the conclusion that your shares are undervalued?
Well, sure, if you want to.
Yeah. I think, a couple of things we look at is, we benchmark ourselves against competitors. Simon mentioned that our company trades at probably between 6 and 7 times EBITDA and maybe 10 times earnings and our competitors trade at higher multiples to that. They may be getting some premium for size. Nevertheless, we're growing. We think that, in the future, as we continue to execute on our plan, we'll be hopefully valued at similar multiples to some of the larger competitors.
We hope so, too. My final question, I know I'm overstaying my welcome here, but I think it's really worth mentioning. With Brian Gilbertson, Kevin Askew, and even Mike Vesce being in new roles, obviously that frees up Bill and Simon to do new and creative things to drive value. Can you talk a little bit about the conclusion of the transformation and the impact of that, and how you expect your business to evolve going forward?
Yeah, Jeff, this is Bill. Great question. I think that one of the primary factors is, as we've stated in prior quarterly calls is, the addition of new vendor product lines is the life's blood of distribution. We're looking at a blend of emerging technologies and some larger, more well-known logos that I'm working on to add to the Lifeboat and TechXtend portfolio. Those things could potentially be very significant in our next few years if we're able to close some of those. Additionally, I have a lot of great relationships at significant customers around the country that I haven't had the time to continue to foster those relationships on a regular basis. Generally, they all help benefit and drive additional business.
Now that I'm not immersed in the day-to-day as I have been in the last couple of years since the prior VP and GMs left in 2014, I have the opportunity to go focus on the vendor customer community, Simon and I are very optimistic about that. Should there be anything that we come across that's worth investment in, we'll take a look at those as we do. It's kind of an open book.
Yep. It's exciting times. It really is pivotable. For us, it was moving from the old building, moving from old websites, moving from the step that got us to where we were, realizing we have to take the next step in our company's evolution. We've executed very well. Vito Legrottaglie and his IT team have made tremendous steps forward. We're very proud of the steps that they've taken to continuously enhance, and that's how we win. It's not a nuclear submarine. It's executing on a day-to-day basis, and that our teams are able to do that with the right technology. Now we have the right structure in place for the next phase of our company. To be honest with you, very exciting times for us.
Well, again, congratulations on a terrific quarter. We look forward to seeing more in the future. Thank you.
Thank you. Have a good weekend.
Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star then one on your telephone keypad. I'm showing no additional audio questions at this time, sir.
Thank you. We appreciate everyone's interest in our company, and we look forward to reporting our first quarter results at the end of April 2017. Thank you so much.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect at this time. Thank you for your participation.