ADDvantage Technologies Group, Inc. (AEY) Posts Solid Q4, Full-year 2010 Results on Rising Demand

QualityStocks would like to highlight ADDvantage Technologies Group (NASDAQ: AEY). The company supplies the cable television (CATV) industry with a comprehensive line of new and used system-critical network equipment and hardware from leading manufacturers, including Cisco, formerly Scientific-Atlanta, Motorola, and Fujitsu Frontech, as well as operating a national network of technical repair centers.

In the company’s news yesterday,

ADDvantage Technologies Group posted its financial results for the three and 12-month periods ended September 30, 2010, reflecting strength in spite of economic difficulties.

“We are pleased with the increased revenues in fiscal year 2010 as compared to last year, especially in light of the difficult economic environment. Our financial strength has improved due to the increased revenues, reductions in inventory and reductions in our operating expenses. The overall market demand for cable television equipment continues to be flat as a result of the difficult economic environment and the traditional United States cable companies are still under pressure as new housing starts and consumer spending are still down. We continue to manage our business more effectively and reduce inventory levels so they are in line with current and expected levels of customer demand,” Ken Chymiak, president and CEO of ADDvantage stated in the press release.

Revenue for the fourth quarter ended September 30, 2010, increased 15 percent to $11.7 million compared to $10.2 million in the same period a year ago.

The company reported a 35-percent increase in sales of new equipment to $8.4 million for the fourth quarter, up from $6.2 million for the three months ended September 30, 2009. Net refurbished equipment sales decreased 26 percent to $1.8 million for the three-month period, up from $2.5 million reported for the same period last year. Service revenue remained substantially unchanged at $1.5 million for the fourth quarter ended September 30, 2010, and 2009.

The company attributes its increased sales to greater demand for head-end equipment, as well as to the expansion into new products and a new master distribution agreement with Fujitsu Frontech. While non-U.S. sales contribute to less than 15 percent of total sales, the company said the demand from its Latin American distributors is significant.

Net income attributable to common stockholders in the fourth quarter increased 19 percent to $0.8 million, or $0.08 per diluted share, as compared to $0.7 million, or $0.07 per diluted share, in the same period of 2009.

For the 12 months ended September 30, 2010, revenue increased 12 percent to $47.3 million, compared to $42.2 million, for the same period last year.

Net income attributable to common stockholders for the 12-month period ended September 30, 2010, increased 39 percent to $4.2 million, or $0.41 per diluted share, as compared to $3.0 million, or $0.30 per diluted share, for the 12 months of fiscal 2009.

“The overall financial health of our business has strengthened in fiscal 2010 compared to the end of fiscal 2009, as we reduced inventory by $5.8 million to $27.4 million, increased cash reserves to $8.7 million from $0.7 million and reduced debt by $2.0 million to $13.9 million. As we look ahead into fiscal 2011 and beyond, I am cautiously optimistic that the strengthening of the overall market conditions will help drive continued growth. However, we will continue to adjust our business model to be in line with market conditions and changes in our vendor relationships. In addition, we are looking to enter into additional vendor and strategic relationships that could help bolster our customer base in certain sales and distribution channels,” Chymiak stated.

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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.