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. As a reminder, ladies and gentlemen, this conference is being recorded. I would now like to introduce our host host of today's call, Ms.
Melanie Capanegro. You may begin your conference at this time.
Welcome to Wakeside Technologies Third Quarter 20 15 Earnings Call. Before turning the call over to Simon Ninan, the company's Chairman and CEO, 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 PM Eastern Time, Thursday, October 29, 2015. The earnings release is available at the company's investor relations website at wayside technology.com. Today's call, including all questions and answers, is being webcast live and a rebroadcast will be available at www.wacitechnology.comearningscall.
This conference call and the associated webcast contain time sensitive information that is accurate only as of today October 30, 2015. A detailed discussion of risks and uncertainties are discussed in our Form 10Q 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 Ninen.
Thank you, Melanie, and good morning to everybody. Good results, passion, and execution. We are different and we are different exceedingly well. Good results. Whereas our much larger peers reported either anemic growth or declining sales.
Our revenue increased 8% to $98,000,000. Gross profit increased 11% to 6 $900,000 and income from operations increased 20 percent to $2,300,000. Our net income per share on a fully diluted basis increased 14 percent from $0.29 a share to $0.33 a share. And these are GAAP numbers Cash and long term receivables amounted to $25,700,000, representing 68 percent of equity as of the end of the quarter. Working capital amounted to $31,300,000 or 82 percent of equity as of the end of the quarter.
We started paying dividends in 2003 more than 12 years ago. We started at $0.10 per quarter, and we have steadily increased our dividend. It now stands at $0.17 per quarter. This dividend is subject to board approval on a quarterly basis. The last increase was in the third quarter of 2013, from $0.16 to $0.17 per share.
In the last 5 years, we've paid out more than $15,000,000. We also bought back 235,000 shares this year for a total of 3,900,000. Passion and execution, we are excited about the prospect of more software publishers joining us. We continue to invest in our team in the third quarter, and we can expect to continue to do so, all in order to manage the expected growth of our company. Our new sales office in Arizona is working well.
And in addition, on September 14, we announced the appointment of Jackie Nyborg as Vice President of Marketing. Ms. Nymore will report to our Executive Vice President, Bill Bottai. She joins us with 20 years Most recently, she served as Director of Global Channel Marketing for Perfecto Mobile, a mobile application software and testing company, Prior to Perfecto Mobile, she was a Dell Quest software, Sophos And Aspen Technologies. We forward to our contributions in aligning our marketing programs with business goals and building tools that our salespeople, as well as our customers need.
We are also in the final stages of finding a new home for our headquarters. It will not have an impact a large impact on our financial results and we don't have a definitive contract yet. So far, we have, in principle, agreed on the price for a bill at the previous Army Fort Monmouth, a few miles away from here. 1,400,000 for a 53,700 square foot building, which equates only $26 per square foot. There are some hurdles we still have to take, yet we are excited about the prospect of moving our headquarter to this new location a few miles away from our current headquarters.
To be able to own our own headquarters at this price is exciting for employees and shareholders. This move is currently planned to take place early Q4 of next year. As stated before, we do not expect an increase in costs related to this move as compared to our current building
Thank you, Simon. As noted in our year over year. Our light boat business grew 11 percent in Q3 to $86,100,000 compared to $77,400,000 in Q3 of 2014. Our Tech Extense segment retracted 12 percent to $11,600,000 when compared to the same period last year, which was $13,100,000 due to a continued decrease Lightboats segment, excuse me, in the 3rd quarter was up 16% to $5,500,000 versus $4,700,000 for the same period last year, due to an increase in sales volume and deeper account penetration into its strategic accounts. Year and declined only 3 percent to $1,400,000 due to the sales volume but with higher margins.
Gross profit margin for and marketing events. Tech extend profit margin for Q3 2015 was 12% compared to 10.9 due to levels with room for expansion as needed in 2016. The addition of Brian Gilverson in Q2 is providing a return as we made a lot of progress in manning our product portfolio during Q3 and have already announced a major new vendor relationship with Supermicro. This agreement is with their integrated solutions group and provides us access to both traditional server and storage products for the first time at Live Boat. It also provides us with integrated solutions for VMware Evo Rail, VMware V Sand and Nexenta store products among others.
Also announced this week was a new integrated product from Lifeboat, where where we are using a custom super micro configuration and integrating in our backup vendors like Veeam into the box adding insulation services and providing our resellers and integrated appliance, which we call Seabus, standing for converged backup solution. There are several additional vendor announcements coming over the next few weeks as we prepare to bring them to market in 2016. We continue to manage our expenses and build our product portfolio to help achieve our growth targets.
Kevin Skol will now report on the financial numbers. Kevin?
Thank you, Simon, and good morning to our investors, analysts and employees. I will discuss were $97,700,000. This is compared to $90,500,000 in the prior year, representing an 8% increase on consolidated basis. Sales for our LIFO segment were $86,100,000 and represent 88% of our total revenue. Life Football sales reflecting an 11% increase compared to the prior year.
The increase in sales in the Lifeboat segment was mainly the result of to several key product lines and our ongoing strategy of strengthening our account penetration. Sales for our were $11,600,000 compared to $13,100,000 in the prior year, representing a 12% decrease. The decrease in net sales in the Tech Extense segment was primarily due to a decrease in extended payment, term sales transactions and lower larger sales transactions as compared to 2014, representing an 11% increase. Our gross profit margin for the quarter was 0.8 $700,000 in the prior year and represents an 11% increase. This increase in gross profit was primarily due to higher sales volume in the current year.
Our Tech extense segment gross profit was $1,400,000 and decreased by 3% compared to the prior year. Total selling, general and administrative expenses were $4,600,000 compared to $4,300,000. This increase is primarily the result of an increase in sales related expenses and employee related expenses, salaries, commissions, bonus accruals and benefits in 2015 compared to 20 A large part of this increase is due to for the quarter was $1,600,000 compared to $1,400,000 in the prior year. Earnings per share on a fully diluted basis was $0.33 per share compared to $0.29. In the prior year.
Now moving on to the balance sheet compared to our year end balance sheet, the following key accounts that fluctuation. Cash was a healthy $19,600,000 at the quarter end compared to $23,100,000 at year end. This decrease is primarily cash use for stock purchases of $3,900,000, dividend payments of $2,400,000, offset in part by cash generated from operations. Accounts receivable current and long term decreased by 8%. This decrease is primarily due to fewer extended payment term transaction in 2015 as compared to 2014 and dollars due to lower sales volume compared to the year end and an increase in early payment discounts taken by the company in the current year.
The company has no debt. We do however have a $10,000,000 revolving credit facility that can be used for working capital purposes and to finance large transactions. As of the quarter end, we had no outstanding balance under the credit facility. Working capital at quarter end 31,300,000 until February 2016 to repurchase shares. We still have board authorization to buy back approximately 491,000 shares.
Our stockholder equity now stands at $38,100,000. At our October 27th Board of Directors meeting, the Board declared a dividend of $0.17 per share for common stock payable November 17th to shareholders of record on November 10. In conclusion, the company continue to have solid operating results, a strong balance sheet and is adequately capitalized to support our continued growth Simon, I'll turn it back to you.
Thank you, Kevin. And before starting the Q and A session, I would just like to state again that we remain focused on adding new publishers providing our customers with excellent customer service and providing our employees with a great and rewarding working environment. With a price earnings multiple of just over 14 times, our current dividend yield of about 3.8%, and over $26,000,000 or almost a 5th of our market cap in cash and long term receivables, we are confident in the performance of our stock price. Thank you, operator.
And our first question comes from Peter Lox. Your line is open, Peter.
Good morning guys. How are you doing?
Good morning, Peter.
Although I'm not around the corner anymore, I still keep an eye on you guys. So, good quarter. So I want to ask you to characterize your company. Would you consider yourself a value company or a growth company?
I say we would we are growing to provide more value. I would not grow for growth sake. I would only grow in the areas that we're growing in such as adding field sales reps, Director of Professional Services, Jackie and I work in marketing, we made those moves in order to provide value to our customers. We are not a volume player. Again, look at our peer competitors, they're all doing 1,000,000,000 of dollars.
That would be foolish trying to compete with them on volume. We are competing on value, and we do so exceedingly well.
And just further question, follow-up on that as a value company, was it kind of time? I mean, you expressed that last time you raised your dividend was 2013. Has it was it on the table that perhaps it was time given the the earnings momentum to increase the dividend at all?
Yes, it's something we discuss on a quarterly basis. Again, with our current investments this year, significant investments in the growth of our company. And the significant stock buyback of $3,900,000 this year. We, we're next to being a value player, as you know, as a long term investor in our company, we are a conservative company. And I think we've done quite well over the last, 12 years, again, we've repaid out over $15,000,000 in 5 years.
We're not a fly by dividend declaring company that a large dividend for 1 quarter to get a spike in PR. We're all long term investors and we're conservative. And we expect to increase the dividend as we grow our company.
Just one more question. I'll let you go. If you do go ahead with the 4th Monmouth purchase, is that going to be outright cash or are you going to take a mortgage back?
That is on the consideration. We do have to see how the numbers add up and what the mortgage rates are going to be, etcetera.
And our next question comes from Richard Griffin. Your line is open.
Yes, it's a dividend related question. Are you going to be offering a dividend reinvestment program? We've looked into that. Are it's something on the consideration with our broker. It seems to be, of slight interest only.
We've received anemic interest in that program. So that is something that we've we've recently heard that that was of interest. So Kevin Skol will look into that.
And our next question comes from Jeff Gagan. Your line is open.
Thank you. Good morning. Nice quarter. Simon, I'm a little curious you hired Bill Body and then Brian Gilbertson and now Jackie, Nioborg if I'm thing that right. And clearly Bill and Brian have had noticeable impacts on the business.
What should we expect from Jackie? And do you have other potential recruits in mind, of course, without mentioning names, but just to give us a little color in terms of how the personnel side of your business might change.
Okay. I'll let Bill handle, in terms of the addition of Jackie She reports to Bill. On an overall basis, we've gone through a significant transition in terms of our internal employee pool. We are transitioning the company to, even add more value and to really focus on that value add plane. I think the CEBRA's announcement is a perfect example of that to convert back up solution.
One device plug and play kind of set up for our customer significant margins to them higher margins for us. These are products that are not switch a turn on where we could switch, take market share from our competitors. And the millions flow in next week, but these are higher margin lines, and there's a high demand for that. So We focus on that. Brian has done, has done very well so far.
He's bringing on. He's our Senior Director of Business Development really focused on bringing on new publishers. There's always churn in publishers. Some say goodbye to us. Some margins are getting, starting to become under pressure as more as broad liners take over.
So we have to continue to keep that pipeline, up and healthy, and he has done so. I'm extremely happy with that and so is the board as well as Bill. In terms of Jackie Nyborg, In terms of marketing, we really want to focus on adding value in terms of our website and the interaction with our customers. And I'll let Bill expand on that.
Thanks, Simon. Hello, Jeff. Good morning. And, one of the key elements in driving new publishers and providing a demonstrable ROI to existing publishers, which helps retention and earns greater margins is by having very effective marketing programs, being able to provide them through the marketing efforts, a pipeline and forecast using all the infrastructure tools we already have in place, more campaigns with multiple vendors simultaneously around the solution discussion that we've been talking about now for a few quarters. And so that dynamic change of the marketing direction required a new leader, and that's what we've accomplished.
So we're looking forward to both improving our web presence, our social media presence and providing greater ROI to our publishers through this process.
Thanks. And if I can follow-up on that, with regard to Brian's work in the marketplace, you've announced a few new published and I thought I heard you say you had several announcements to make forthcoming. Can you put a little color on what makes a good publisher, what those the qualities are. And during that, can you also discuss margin potential margin expansion on the lifeboat side of the business as the tech extend business becomes less and less relevant.
So a couple of answers to that question. 1, of course, without giving you forward looking statements around the publishers, we're bringing aboard we have, already signed 4 existing agreements with publishers to bring them to market some during Q4, some during Q1, with an additional probably 4 or 5 agreements we'll get signed between now and the end of the year, for launch into early next year. That those margins, because several of these are leading technology companies, vary from low to medium to high because what we're focusing on are where do they fit in our solution stack? How do we put product A, B, and C together to present solution D to our resellers that provide additional margin in GP on a per transaction basis. That ties back in engineering.
That ties back into field sales. That ties back into marketing. So what Brian has been putting together is, how do these things all go together to fill out voids in that parameter. And so, it's an exciting time as we bring those on. Relevant to Tech Xtend, a lot of the decline on the tech extend has been around the large, a flexible payment option transactions, which tend to be lower margin As you know, Jeff, last year, we talked about realigning tech extend to focus in New Jersey and the Northeast.
Our New Jersey revenues from the team is up 27% over last year in this marketplace. The margins are going up. So it's slow process to change the selling cycles and the selling process of the team. But they're still contributing very significantly to our overall, growth strategies. And we continue to realign and invest in TechXtend with staff.
When you make these kinds of changes, some people don't want to embrace change and have that who moved my cheese kind of mentality and they decide to leave and we then bring on new people who are excited about the opportunity. So We are all very personally excited about how that's evolving, though it is a slow process.
Thank you. I appreciate it. And I'll ask Simon one more question, if I may, and then hop off here. Simon, you have a fair amount of cash I view that as a positive. I think you've done an outstanding job over the years of managing your balance sheet with the notion that tech extend is more of a regional player, would it make sense to try and acquire some bolt on acquisitions that could increased the tech extend footprint in a targeted area?
So in terms of acquisitions and I'll address both sides of our company. In terms of acquisitions, the reason the main reason that we've realized tax expense is the fact that again, and it comes back to Peter's question in terms of do we have volume or value? And what we have done, we were a volume player as programmers, Veradigm, over the years, that catalog business went away. And we tried to continue to play that volume game with the larger players in that area. That did not work.
So in terms of acquisitions for DECXtend, 1 on 1 would be maybe 2 not necessarily, though, because people will be anxious. A lot of our customers compete with that extent. The smaller VARs compete with techxtend, some of the smaller local VARs compete with techxtend. I am excited about the growth opportunity for tech extend. One thing it really does for us also on the Liveboat side is, A, we have motivated team, a very motivated team, a good structure currently on tech extent that is ready to expand.
And what it does for us, it kind of is these are the early adapters. This is the the new technology, so to say. So if we see that happening on the tech extents side, we know that will translate into a little down the road, into larger volume with a larger place. And those are the guys that we handle on life of distribution. So for us, it's a perfect feeding machine in terms of, like, what is the new technology that is out there a couple of months, quarters or years.
So that's the reason we remain excited about Tech Xtend and it's a great team. If you talk about Lifeboat distribution, yes, we are looking at acquisitions there. And Unfortunately, there are not many small focused distributors left. We've been looking for a couple of years. As a board and as a shareholder, I would be I would be not doing my job if I not continue to look at acquisitions.
One of the areas that we're also looking in terms of is there a small software publisher, a focused software publisher with much higher margins that we could add to our offerings to our customer something that they can, they need and that would bring us higher margins. So that is something that we just reignite it again at the last board meeting and we continue to look forward to. I don't expect something to be able to announce something in 3 months, but that is on our radar, and we're actively expanding our radar to see if there are such opportunities. Having that said, the company This company in 95 went through a period of acquisitions. As many other companies, we noted that a large portion of acquisitions do not work out and do not achieve the expected results.
So we are also in that area moving conservatively forward. And the reason for that is we have done extremely well over the last 10 years over the last 5 years over the last 3 years. And we want to keep that going. And And with a number of our employees, there's only so much that we can focus on. There's so much going on in our market software as a service that we're addressing.
Expanding our professional services, adding on new publishers. And our larger competitors are really turning, as I said before, they're declining. It's anemic growth. They're restructuring, mass layoffs. Whole teams are restructured.
There's so much going on that that affects customer service. So we are looking at their customers in terms of software publishers and go and come to us. We're a steady ship. We're growing. We know what we do.
We add value. And that's what we expect to look forward. And we're working hard every day. And there are some sometimes we have some successes, sometimes we have some some no wins. I don't want to call them losses, but no wins.
And, and that happens. But overall, I think we're really well positioned to take advantage of that market.
I appreciate your thoughtful answer. Just to clarify, has your company owned a publisher in the past?
Way way in the past we have, yes. Was part of Dan Brickland's demo at this was in the early '90s, late '80s, early '90s, I believe, before my time before we
went public. Bill. So, yes, Jeff, just real quick, the CBUS is kind of an integrated solution using 2 of our suppliers. And if there are products that don't compete with existing suppliers, that are software companies that can be a part of an integrated solution that we can take software publisher margins on. That's one avenue.
If it's very small and it's a great technology and again, we don't have a major competitive product in our portfolio And their only struggle is their route to market, then there's a couple of ways for that to occur. One is for them to pay a lot of margin and try to get it the other way is to partner with somebody who is an emerging technology value added distributor to take them there more quickly. And it also improves us. So it's a just a matter of finding the right guys and change that dynamic. And obviously at that point, if we did find somebody, it would have a very positive impact on our margins.
Well, I appreciate that as a shareholder it's been a pleasure to watch you execute on your business plan. I know it hasn't really been reflected that well in the share price, but this will follow my only thought, again, as a shareholder is to encourage you to stick within your circle of competence. And obviously, you do what you do very, very well. And I wouldn't want you to stress margin and potentially disrupt the great business that you have. Thank you for your time today and good luck.
Thank you, Jeff. Really appreciate those words.
At this time, there are no further questions. Please continue with any closing remarks.
I'd like to thank our employees for their artwork this quarter. We look forward to Q4, and I would like to thank our shareholders for their interest in our company. And we look forward to reporting our Q4 and full year results early February of next year. Thank you.
This concludes today's conference. You may disconnect at this time. And thank you your participation.