1-10799
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73-1351610
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(Commission file Number)
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(IRS Employer Identification No.)
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1221 E. Houston, Broken Arrow Oklahoma
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74012
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(Address of Principal Executive Offices)
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(Zip Code)
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□
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Written Communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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□
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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□
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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□
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Pre-commencement communications pursuant to Rule 13e-4© under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit 99.1
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Press Release dated December 28, 2018 issued by the Company.
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||
SIGNATURES
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ADDVANTAGE TECHNOLOGIES GROUP, INC.
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||
Date: December 28, 2018
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||
By: /s/ Scott Francis
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||
Scott Francis
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||
Vice-President & Chief Financial Officer
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||
Exhibit Number
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Description
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99.1
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Press Release dated December 28, 2018 issued by the Company.
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For further information
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KCSA Strategic Communications
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Company Contact:
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Elizabeth Barker
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Scott Francis (918) 251-9121
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(212) 896-1203
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ebarker@kcsa.com
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·
|
A restructuring charge of $0.9 million in the Telco segment, in connection with moving Nave’s inventory warehousing and fulfillment
operations to Palco Telecom.
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·
|
A goodwill impairment charge of $1.2 million, which represented the carrying value of goodwill for the Cable TV segment.
|
·
|
An increase in our reserve for excess and obsolete inventory of $1.8 million for the Cable TV segment as compared to $0.6 million
in the prior year.
|
Three Months Ended
September 30,
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Twelve Months Ended
September 30,
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|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Sales
|
$
|
10,905,795
|
$
|
12,333,174
|
$
|
47,413,987
|
$
|
48,713,746
|
||||||||
Cost of sales
|
9,491,972
|
9,066,590
|
36,191,011
|
33,903,153
|
||||||||||||
Gross profit
|
1,413,823
|
3,266,584
|
11,222,976
|
14,810,593
|
||||||||||||
Operating, selling, general and administrative expenses
|
3,607,729
|
3,633,711
|
14,325,268
|
14,664,987
|
||||||||||||
Restructuring charge
|
941,059
|
–
|
941,059
|
–
|
||||||||||||
Goodwill impairment charge
|
‒
|
–
|
1,150,059
|
–
|
||||||||||||
Income (loss) from operations
|
(3,134,965
|
)
|
(367,127
|
)
|
(5,193,410
|
)
|
145,606
|
|||||||||
Other expense:
|
||||||||||||||||
Loss from equity method investee
|
–
|
–
|
(258,558
|
)
|
–
|
|||||||||||
Interest expense
|
(44,733
|
)
|
(109,958
|
)
|
(231,888
|
)
|
(389,722
|
)
|
||||||||
Total other expense, net
|
(44,733
|
)
|
(109,958
|
)
|
(490,446
|
)
|
(389,722
|
)
|
||||||||
Loss before income taxes
|
(3,179,698
|
)
|
(477,085
|
)
|
(5,683,856
|
)
|
(244,116
|
)
|
||||||||
Provision (benefit) for income taxes
|
1,667,000
|
(218,000
|
)
|
1,636,000
|
(146,000
|
)
|
||||||||||
Net loss
|
$
|
(4,846,698
|
)
|
$
|
(259,085
|
)
|
$
|
(7,319,856
|
)
|
$
|
(98,116
|
)
|
||||
Loss per share:
|
||||||||||||||||
Basic
|
$
|
(0.47
|
)
|
$
|
(0.03
|
)
|
$
|
(0.71
|
)
|
$
|
(0.01
|
)
|
||||
Diluted
|
$
|
(0.47
|
)
|
$
|
(0.03
|
)
|
$
|
(0.71
|
)
|
$
|
(0.01
|
)
|
||||
Shares used in per share calculation:
|
||||||||||||||||
Basic
|
10,306,145
|
10,225,995
|
10,272,749
|
10,201,825
|
||||||||||||
Diluted
|
10,306,145
|
10,225,995
|
10,272,749
|
10,201,825
|
Three Months Ended September 30, 2018
|
Three Months Ended September 30, 2017
|
|||||||||||||||||||||||
Cable TV
|
Telco
|
Total
|
Cable TV
|
Telco
|
Total
|
|||||||||||||||||||
Income (loss) from
operations
|
$
|
(1,322,317
|
)
|
$
|
(1,812,648
|
)
|
$
|
(3,134,965
|
)
|
248,471
|
(615,598
|
)
|
(367,127
|
)
|
||||||||||
Restructuring charge
|
‒
|
941,059
|
941,059
|
‒
|
‒
|
‒
|
||||||||||||||||||
Depreciation
|
55,014
|
34,078
|
89,092
|
78,318
|
39,843
|
118,161
|
||||||||||||||||||
Amortization
|
−
|
313,311
|
313,311
|
−
|
313,311
|
313,311
|
||||||||||||||||||
Adjusted EBITDA (a)
|
$
|
(1,267,303
|
)
|
$
|
(524,200
|
)
|
$
|
(1,791,503
|
)
|
$
|
326,789
|
$
|
(262,444
|
)
|
$
|
64,345
|
(a) |
The Telco segment includes earn-out expenses of $0.1 million for the three months ended September 30, 2017 related to the acquisition of Triton Miami, Inc.
|
Year Ended September 30, 2018
|
Year Ended September 30, 2017
|
|||||||||||||||||||||||
Cable TV
|
Telco
|
Total
|
Cable TV
|
Telco
|
Total
|
|||||||||||||||||||
Income (loss) from
operations
|
$
|
(2,570,050
|
)
|
$
|
(2,623,360
|
)
|
$
|
(5,193,410
|
)
|
1,834,484
|
(1,688,878
|
)
|
145,606
|
|||||||||||
Restructuring charge
|
‒
|
941,059
|
941,059
|
‒
|
‒
|
‒
|
||||||||||||||||||
Goodwill impairment
charge
|
1,150,059
|
–
|
1,150,059
|
–
|
–
|
–
|
||||||||||||||||||
Depreciation
|
247,790
|
130,406
|
378,196
|
303,571
|
143,263
|
446,834
|
||||||||||||||||||
Amortization
|
−
|
1,253,244
|
1,253,244
|
−
|
1,267,182
|
1,267,182
|
||||||||||||||||||
Adjusted EBITDA (a)
|
$
|
(1,172,201
|
)
|
$
|
(298,651
|
)
|
$
|
(1,470,852
|
)
|
$
|
2,138,055
|
$
|
(278,433
|
)
|
$
|
1,859,622
|
(a) |
The Telco segment includes earn-out expenses of $0.2 million for the year ended September 30, 2017 related to the acquisition of Triton Miami, Inc.
|
September 30,
|
||||||||
2018
|
2017
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
3,129,280
|
$
|
3,972,723
|
||||
Accounts receivable, net of allowance for doubtful accounts of $150,000
|
4,400,868
|
5,567,005
|
||||||
Income tax receivable
|
178,766
|
247,186
|
||||||
Inventories, net of allowance for excess and obsolete
|
||||||||
inventory of $4,965,000 and $2,939,289, respectively
|
18,888,042
|
22,333,820
|
||||||
Prepaid expenses
|
264,757
|
298,152
|
||||||
Assets held for sale
|
3,666,753
|
‒
|
||||||
Total current assets
|
30,528,466
|
32,418,886
|
||||||
Property and equipment, at cost:
|
||||||||
Land and buildings
|
2,208,676
|
7,218,678
|
||||||
Machinery and equipment
|
3,884,859
|
3,995,668
|
||||||
Leasehold improvements
|
200,617
|
202,017
|
||||||
Total property and equipment, at cost
|
6,294,152
|
11,416,363
|
||||||
Less: Accumulated depreciation
|
(4,276,024
|
)
|
(5,395,791
|
)
|
||||
Net property and equipment
|
2,018,128
|
6,020,572
|
||||||
Investment in and loans to equity method investee
|
49,000
|
98,704
|
||||||
Intangibles, net of accumulated amortization
|
6,844,398
|
8,547,487
|
||||||
Goodwill
|
4,820,185
|
5,970,244
|
||||||
Deferred income taxes, net of valuation allowance
|
‒
|
1,653,000
|
||||||
Other assets
|
134,443
|
138,712
|
||||||
Total assets
|
$
|
44,394,620
|
$
|
54,847,605
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
4,657,188
|
$
|
3,392,725
|
||||
Accrued expenses
|
1,150,010
|
1,406,722
|
||||||
Notes payable – current portion
|
2,594,185
|
4,189,605
|
||||||
Other current liabilities
|
664,374
|
664,325
|
||||||
Total current liabilities
|
9,065,757
|
9,653,377
|
||||||
Notes payable, less current portion
|
‒
|
2,094,246
|
||||||
Other liabilities
|
801,612
|
1,401,799
|
||||||
Total liabilities
|
9,867,369
|
13,149,422
|
||||||
Shareholders’ equity:
|
||||||||
Common stock, $.01 par value; 30,000,000 shares authorized;
10,806,803 and 10,726,653 shares issued, respectively;
10,306,145 and 10,225,995 shares outstanding, respectively
|
108,068
|
107,267
|
||||||
Paid in capital
|
(4,598,343
|
)
|
(4,746,466
|
)
|
||||
Retained earnings
|
40,017,540
|
47,337,396
|
||||||
Total shareholders’ equity before treasury stock
|
35,527,265
|
42,698,197
|
||||||
Less: Treasury stock, 500,658 shares, at cost
|
(1,000,014
|
)
|
(1,000,014
|
)
|
||||
Total shareholders’ equity
|
34,527,251
|
41,698,183
|
||||||
Total liabilities and shareholders’ equity
|
$
|
44,394,620
|
$
|
54,847,605
|