Good morning, ladies and gentlemen, and welcome to the Wayside Technology Group conference call. At this time, all participants are in 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 star then zero on your telephone keypad. 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.
Thank you, and good morning. Welcome to Wayside Technology's third 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 third quarter at approximately 5:00 P.M. Eastern Time, Thursday, October 27th, 2016. 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/earnings-call. This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, October 28th, 2016. 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. Now I would like to turn the call over to Simon Nynens.
Thank you, Melanie, and good morning to everyone. Considering the overall environment, we had a solid third quarter, especially compared to a strong third quarter in 2015. Our Lifeboat division represented 90% of our revenue and 87% of segment income in the third quarter. Our international sales were 13% of our overall revenue, up from 11% for the third quarter of 2015. I want to start by welcoming Michael Vesey to our team. Mike started three and a half weeks ago, comes to us with great experience in finance, operations, and management. Mike, welcome again. Now, I'd like to hand it over to Bill Botti, our Executive Vice President.
Thank you, Simon Nynens. As stated earlier by Simon Nynens, we had a solid quarter when compared with a very good Q3 2015. On a consolidated basis, revenue increased 2% or $1.9 million to $99.6 million, compared to $97.7 for the same period in 2015. Income from operations declined slightly to $2 million, compared to $2.2 over the same period last year. Total sales for the third quarter of 2016 for our Lifeboat division were $91.1 million, compared to $86.1 million in the third quarter of 2015, representing an increase of $5 million or 6%. Total sales for the third quarter of 2016 for our TechXtend segment were $8.5 million, compared to $11.6 million in the third quarter of 2015, representing a decrease of $3.1 million or 27%. The 6% increase in net sales for the Lifeboat distribution segment resulted mainly from our ongoing strategy of strengthening our account penetration.
This was partially offset by lower sales to certain resellers, resulting from changes in product mix upon annual contract renewals. The 27% decrease in net sales in the TechXtend segment was primarily due to the variability in large software sales transactions, including extended payment term sales when compared to the third quarter of the prior year. Gross profit for the third quarter ended September 30th, 2016, was $6.4 million, a 7% decrease compared to $6.9 million for the third quarter of 2015. Gross profit for our Lifeboat segment in the third quarter of 2016 was $5.4 million, compared to $5.1 million for the third quarter of 2015, representing a 1% decrease. Gross profit for our TechXtend segment in the third quarter of 2016 was $0.9 million compared to $1.4 million for the third quarter of 2015, representing a 33% decrease.
As a percentage of net sales, SG&A expenses for the third quarter of 2016 were 4.4% compared to 4.7% for the second quarter, I'm sorry, third quarter of 2015. We face continued margin pressure from the very large distribution companies we compete with in the market. We've 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 last quarter, we released a new TechXtend Gogo brand website, and it refreshed our brand image with very positive feedback from our customers and suppliers.
We've also begun to verticalize part of our TechXtend team to focus on the SLED market, which is state, local, and education, and have also recently announced adding David Hespe, the former Commissioner of Education for New Jersey, as a business development consultant to assist us in more rapidly penetrating this exciting vertical market. 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 Nynens, back to you.
Thank you, Bill. Mike Vesey will now report on the financial numbers. Mike?
Thank you, Simon. I'll cover some of our general and administrative expenses. Then I'll cover some balance sheet highlights since Bill already talked about our income statement down to the gross margin level. Total selling and general and administrative expenses for the third quarter of 2016 were $4.4 million, compared to $4.6 million for the third quarter of 2015, representing a $0.3 million or 6% change. This decrease was primarily the result of lower bonus expense, partially offset by increased stock compensation and occupancy costs in 2016 when compared to 2015. As a percent of net sales, SG&A expenses through the third quarter of 2016 were 4.4%, compared to 4.7% for the third quarter of 2015. Our net income for the third quarter of 2016 was $1.4 million, compared to $1.6 million in the prior year.
Earnings per share on a fully diluted basis was $0.31 per share, compared to $0.33 last year. Moving on to the balance sheet. Compared to our balances at December 31st, 2015, the following key accounts had fluctuations. Cash decreased by approximately $2.8 million to $21 million at September 30th, 2016, compared to $23.8 million at December 31st, 2015. The decreases comprised primarily of dividend payments of $2.4 million, $3.6 million of purchases of treasury stock, and $0.8 million of capital expenditures related to our new office. Current accounts receivable increased by 5%, or $3.2 million, mainly due to a large transaction in the second quarter with extended payment terms. Accounts payable and accrued expenses increased by 4%, primarily due to an increase in deferred rent and other items related to the opening of our new corporate office.
As of September 30th, 2016, we had no outstanding balances under the credit facility. Working capital at September 30th, 2016, was $27.8 million. During the quarter, we repurchased approximately 86,000 shares of our common stock under our 10b5-1 stock purchase plan. We still have board authorization to repurchase up to approximately 278,000 additional shares. Our stockholders' equity now stands at $37.8 million. At our October 27th, 2016 board meeting, the board of directors declared a $0.17 per share dividend for its common stock, payable on November 18th to shareholders of record on November 8th, 2016. The company has now paid dividends consecutively for over 55 quarters. In conclusion, the company continues to have solid operating results, a strong balance sheet, and is adequately capitalized to support our continued growth plans.
I want to personally thank all of our team members worldwide. Simon, I turn it back over to you.
Thank you, Mike. During this quarter, as Mike mentioned, we moved into our new headquarters in Eatontown, all without missing a beat. We will have two open houses. Lifeboat will host its open day on November 10. TechXtend will host on November 18th. We received great feedback and continue to receive great feedback from employees, vendors, as well as customers about our new way of working together. We released a redesigned TechXtend website this quarter as well, including personalized landing pages for our TechXtend experts. In conclusion, it was a busy quarter. 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 with the Q&A session.
Thank you. Ladies and gentlemen, at this time, if you have a question, please press star then one on your touchtone phone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. If you're using a speakerphone, please pick up the handset before asking your question. One moment, please, for our first question. Our first question comes from Sam Schaeffer. Your line is open.
Hi. Thank you, guys. Good morning. Thanks for taking my question.
Good morning.
There are two announcements this quarter for new hires with Mike and David. With Mike being the new CFO, I'm curious how Kevin's role is going to change moving forward.
Sure. Kevin is actually in the room with us today. Kevin Scull will remain as our Chief Accounting Officer. He was our Chief Accounting Officer. Mike, in addition, in terms of making sure that we enhance the operational reporting about our finances, as well as making sure we fulfill all the roles and continue to fulfill them with our continued growth in terms of our finance department. It's really an addition.
For David, the senior education's consultant, I believe is his title, what does that really imply his role will be?
Bill, you might want to take that?
Sure. Thank you. As we move into this vertical market, David is coming to us as Commissioner of Education for New Jersey on Governor Christie's staff, has intimate relationships and knowledge of the various school districts, particularly in the K through 12 area throughout the state of New Jersey, and knows which ones have the greatest need for technological improvements and can introduce our sales organization to those teams, and was an active participant this week in the New Jersey School Boards Association Workshop and IT Exposition down in Atlantic City, where we had a large booth and touched over 750 of the school district employees. This is a period of time, and the timing for this is wrapped around Q4 and Q1 are when budgets are set and projects are defined for spend, sorry, late Q1 and Q2 in preparation for implementation in Q3.
He's really the person who can introduce us and get past the gatekeepers at the majority of these places.
Yeah. As an example, for instance, we did a couple of physical security projects where we install the cameras, and we install the whole systems to maintain the physical security of government offices. Again, operating as a value-added reseller, those are the kind of projects we want to move into.
Great. I look forward to having both on board and seeing the growth that they help provide. Simon, last quarter you referenced a pilot program. I'm just curious as to how that has been working and if it's still occurring.
When you say pilot program, which one?
I believe it's in-
Go ahead.
I'm sorry. I believe it's in reference to allowing the employees more flexibility in their work schedule.
Oh, sure. Yeah. That's working very well with our new office. We got good local press about our new headquarters. Again, we monitor the productivity very closely of employees and really enabling to work here at whatever office they want, by the way, it's a new flexible work environment, or at home. It really, again, happy people are just more productive, and we feel that definitely in Q3 and Q4. There are waves we have to ride, I want to mention that, and I want to just, again, explain what it is that we're in the overall environment. If you look at our year-to-date results, and you look at our revenue, we were up 5% consolidated. We had a not-so-good first quarter. We had a good second quarter. Most of that, if you relate that's transactional business of TechXtend.
So far in October, our pipeline is looking good for Q4 for those kind of transactions, of the finance, the FPO kinds of transactions. It's still early in the quarter. Those are transactional. If you look at Lifeboat per se, and you look at our larger competitors, if you compare our complete company with competitors such as Ingram Micro, Tech Data, Arrow, Avnet, revenue year-to-date for Ingram Micro year-to-date is down 7%, for Tech Data down 1%, Arrow is up 5%, Avnet is year-to-date down 21%. Operating income from operations, we are, in Lifeboat, up 5% income from operations. That's what significant investment in our future growth. Our revenue up 5% and our income from operations up 5%. If you combine the whole company year-to-date, we're down 6%.
Compare that to our competitors, Ingram Micro, without the impairment of a software implementation last year, they're down 23% in income from operations. Tech Data is down 49%, Arrow's up 5%, and Avnet is down 39% year-to-date. Again, that's why I'm stating, considering the overall environment, our very large competitors are in flux, are in restructuring mode. I can't win the battle every quarter. However, the long-term plan is we're not deviating from the long-term plan. When the dust settles here and when the fights are all over, people are dissatisfied with the fact that complete teams are disappearing at these major publishers. They are not getting, continue to not get the service that they want and need as a software publisher, and we are a viable alternative. In fact, every quarter, we're becoming more and more viable. Our long-term plan hasn't changed.
Our long-term commitment hasn't changed. I don't feel there's a significant change in the market. If there is, we'll inform you right away. That's how we look at our results, and especially compared to a strong Q3 in 2015. When we do pilot programs, we have to be very careful. We run a very profitable company, and we've grown significantly over the last couple of years. If you look at since 2011, where we're up in terms of revenue, year up in 2015, the end of 2015, up 153%. That's without acquisitions, and we are looking actively at acquisitions. Other significant competitors of ours, much larger, have done a lot of acquisitions and are all below us in terms of revenue growth. We're continuing to be excited about the long-term prospects of this company, and we look forward to reporting future quarters.
That's great additional insight. Thank you, Simon. You brought up the looking for acquisitions. Could you provide an update on the engagement of an investment banker?
Yes, we have. We have signed an agreement. We're with martinwolf. Very well known within the tech industry. They're representing us, and I think that's our responsibility as a board and as a fellow shareholder to explore acquisitions. That's where we're in the early phases. They started in September, we have engaged with them for a period of six months. We have to see what's out there currently and to see what's available. That's what we're currently doing.
Great. Well, thank you for the additional insight. Good luck in Q4 and fiscal 2017.
Thank you so much. Have a good weekend.
Thank you. At this time, there are no further questions. Please continue with any closing remarks.
We'd like to thank everybody for their interest in our company, and we look forward to reporting our Q4 results in February of 2017. Thank you.
This concludes today's conference call. You may disconnect at this time, and thank you for your participation.