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NEWS
RELEASE
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●
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Record quarterly and annual revenue of $32.3 million and $123.6 million, respectively
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●
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Service segment fiscal 2015 operating income increased 55.2% on 7.5% revenue growth
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●
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Fourth quarter net income grew 12.0% to $1.9 million
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·
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Service segment revenue grew 7.5% to a record $14.5 million, which reflects a combination of organic and acquisition-related growth.
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·
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Service segment gross profit improved $0.6 million, or 13.5%, to $4.8 million. Fourth quarter gross margin for the segment improved 180 basis points to 33.2%.
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·
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Segment operating expenses declined 4.4% to $2.6 million compared with the fourth quarter of fiscal 2014, primarily due to lower performance-based compensation expense. As a percentage of Service segment revenue, operating expenses declined 220 basis points to 18.0%.
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·
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Fourth quarter Service segment operating income increased 45.9%, or $0.7 million, to $2.2 million, while segment operating margin expanded 400 basis points to 15.2%. The Service segment produced 68.7% operating leverage in the quarter. Note that operating leverage is defined as the year-over-year change in Service segment operating income divided by the year-over-year change in Service segment revenue.
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·
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Service segment contribution margin grew 22.4% to $3.2 million, from $2.6 million in the prior fiscal year period. Service segment Adjusted EBITDA increased 39.9%, or $0.8 million, to $2.8 million. As a percentage of Service segment revenue, Adjusted EBITDA was 19.5%, a 450 basis point expansion. See Note 1 on page 4 for descriptions of these non-GAAP financial measures and pages 9 and 10 for the Adjusted EBITDA Reconciliation table and the contribution margin calculation in the Additional Information – Business Segment Data table.
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·
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Distribution sales increased $0.9 million, or 5.5%, to $17.9 million, due to strong growth from alternative energy customers.
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Distribution segment gross profit was $3.7 million, down $0.7 million from the fourth quarter of fiscal 2014. Gross margin was 20.7%, a 520 basis point reduction. Lower year-over-year vendor rebates accounted for 220 basis points of the decline. Vendor rebates tend to fluctuate as target levels are typically established by some vendors using growth rates based on prior-year results. Competitive pricing strategies, utilized to maintain and grow market share, and changes in product mix also negatively impacted segment gross margin.
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·
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Cost discipline and reduced expenses related to performance-based compensation helped to partially offset the year-over-year decline in Distribution segment gross profit, resulting in segment operating income of $0.9 million, a decrease of $0.5 million from the fourth quarter of fiscal 2014.
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·
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Contribution margin for the Distribution segment was $1.9 million compared with $2.7 million in the prior fiscal year period. Distribution segment Adjusted EBITDA was $1.1 million, down $0.5 million. See Note 1 on page 4 for descriptions of these non-GAAP financial measures and pages 9 and 10 for the Adjusted EBITDA Reconciliation table and contribution margin calculation in the Additional Information – Business Segment Data table.
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·
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Revenue increased 7.5% to $51.8 million, driven by organic and acquisition-related growth.
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·
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Segment gross profit increased $1.3 million, or 10.0%, from fiscal 2014. Segment gross margin improved 60 basis points to 27.2%.
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·
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Segment operating income increased by 55.2%, or $1.3 million, when compared with fiscal 2014.
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·
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Service segment Adjusted EBITDA was $6.1 million, or 11.9% of segment revenue, an increase of 33.1% over fiscal 2014.
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·
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Sales increased 2.1%, or $1.5 million, to $71.8 million in fiscal 2015.
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·
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Segment gross margin decreased 320 basis points to 20.9% in fiscal 2015, primarily due to $1.8 million less in vendor rebates and increased price discounting.
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·
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Segment operating income decreased 28.9%, or $1.3 million, as operating expense reductions were more than offset by the impact of reduced vendor rebates.
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·
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Distribution segment Adjusted EBITDA was $4.1 million in fiscal 2015.
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Fourth Quarter Ended
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Years Ended
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|||||||||||||||
March 28,
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March 29,
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March 28,
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March 29,
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|||||||||||||
2015
|
2014
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2015
|
2014
|
|||||||||||||
(Unaudited) |
(Unaudited)
|
(Unaudited)
|
||||||||||||||
Service Revenue
|
$ | 14,465 | $ | 13,457 | $ | 51,801 | $ | 48,184 | ||||||||
Distribution Sales
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17,877 | 16,946 | 71,823 | 70,324 | ||||||||||||
Total Revenue
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32,342 | 30,403 | 123,624 | 118,508 | ||||||||||||
Cost of Service Revenue
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9,661 | 9,226 | 37,698 | 35,359 | ||||||||||||
Cost of Distribution Sales
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14,183 | 12,560 | 56,839 | 53,359 | ||||||||||||
Total Cost of Revenue
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23,844 | 21,786 | 94,537 | 88,718 | ||||||||||||
Gross Profit
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8,498 | 8,617 | 29,087 | 29,790 | ||||||||||||
Selling, Marketing and Warehouse Expenses
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3,407 | 3,365 | 13,913 | 14,039 | ||||||||||||
Administrative Expenses
|
1,975 | 2,322 | 8,406 | 9,046 | ||||||||||||
Total Operating Expenses
|
5,382 | 5,687 | 22,319 | 23,085 | ||||||||||||
Operating Income
|
3,116 | 2,930 | 6,768 | 6,705 | ||||||||||||
Interest and Other Expense, net
|
79 | 102 | 345 | 259 | ||||||||||||
Income Before Income Taxes
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3,037 | 2,828 | 6,423 | 6,446 | ||||||||||||
Provision for Income Taxes
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1,128 | 1,124 | 2,397 | 2,462 | ||||||||||||
Net Income
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$ | 1,909 | $ | 1,704 | $ | 4,026 | $ | 3,984 | ||||||||
Basic Earnings Per Share
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$ | 0.28 | $ | 0.25 | $ | 0.59 | $ | 0.56 | ||||||||
Average Shares Outstanding
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6,831 | 6,702 | 6,798 | 7,080 | ||||||||||||
Diluted Earnings Per Share
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$ | 0.27 | $ | 0.24 | $ | 0.57 | $ | 0.54 | ||||||||
Average Shares Outstanding
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7,083 | 6,980 | 7,059 | 7,357 |
March 28,
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March 29,
|
|||||||
2015
|
2014
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current Assets:
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||||||||
Cash
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$ | 65 | $ | 23 | ||||
Accounts Receivable, less allowance for doubtful accounts of $111
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||||||||
and $82 as of March 28, 2015 and March 29, 2014, respectively
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16,899 | 15,663 | ||||||
Other Receivables
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1,171 | 1,088 | ||||||
Inventory, net
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6,750 | 6,181 | ||||||
Prepaid Expenses and Other Current Assets
|
1,209 | 1,180 | ||||||
Deferred Tax Asset
|
1,048 | 1,396 | ||||||
Total Current Assets
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27,142 | 25,531 | ||||||
Property and Equipment, net
|
9,397 | 7,089 | ||||||
Goodwill
|
20,923 | 17,384 | ||||||
Intangible Assets, net
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3,554 | 2,651 | ||||||
Other Assets
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1,133 | 1,219 | ||||||
Total Assets
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$ | 62,149 | $ | 53,874 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
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||||||||
Current Liabilities:
|
||||||||
Accounts Payable
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$ | 7,695 | $ | 7,132 | ||||
Accrued Compensation and Other Liabilities
|
4,195 | 5,690 | ||||||
Income Taxes Payable
|
43 | 1,035 | ||||||
Total Current Liabilities
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11,933 | 13,857 | ||||||
Long-Term Debt
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12,168 | 7,593 | ||||||
Deferred Tax Liability
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1,684 | 607 | ||||||
Other Liabilities
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2,046 | 1,734 | ||||||
Total Liabilities
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27,831 | 23,791 | ||||||
Shareholders' Equity:
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||||||||
Common Stock, par value $0.50 per share, 30,000,000 shares authorized;
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6,835,828 and 6,716,350 shares issued and outstanding
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||||||||
as of March 28, 2015 and March 29, 2014, respectively
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3,418 | 3,358 | ||||||
Capital in Excess of Par Value
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12,289 | 11,387 | ||||||
Accumulated Other Comprehensive (Loss) Income
|
(143 | ) | 567 | |||||
Retained Earnings
|
18,754 | 14,771 | ||||||
Total Shareholders' Equity
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34,318 | 30,083 | ||||||
Total Liabilities and Shareholders' Equity
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$ | 62,149 | $ | 53,874 |
For the Years Ended
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||||||||
March 28,
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March 29,
|
|||||||
2015
|
2014
|
|||||||
(Unaudited)
|
||||||||
Cash Flows from Operating Activities:
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||||||||
Net Income
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$ | 4,026 | $ | 3,984 | ||||
Adjustments to Reconcile Net Income to Net Cash
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||||||||
Provided by Operating Activities:
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||||||||
Loss (Gain) on Disposal of Property and Equipment
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3 | (34 | ) | |||||
Deferred Income Taxes
|
779 | (310 | ) | |||||
Depreciation and Amortization
|
3,090 | 2,945 | ||||||
Provision for Accounts Receivable and Inventory Reserves
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128 | 1 | ||||||
Stock-Based Compensation Expense
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507 | 527 | ||||||
Changes in Assets and Liabilities:
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||||||||
Accounts Receivable and Other Receivables
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(1,218 | ) | (424 | ) | ||||
Inventory
|
(593 | ) | 681 | |||||
Prepaid Expenses and Other Assets
|
(343 | ) | (623 | ) | ||||
Accounts Payable
|
464 | (1,751 | ) | |||||
Accrued Compensation and Other Liabilities
|
(1,502 | ) | 2,047 | |||||
Income Taxes Payable
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(902 | ) | 569 | |||||
Net Cash Provided by Operating Activities
|
4,439 | 7,612 | ||||||
Cash Flows from Investing Activities:
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||||||||
Purchases of Property and Equipment
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(3,500 | ) | (1,961 | ) | ||||
Proceeds from Sale of Property and Equipment
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51 | 249 | ||||||
Business Acquisitions, net of cash acquired
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(7,279 | ) | - | |||||
Net Cash Used in Investing Activities
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(10,728 | ) | (1,712 | ) | ||||
Cash Flows from Financing Activities:
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||||||||
Proceeds from Revolving Line of Credit, net
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4,575 | (424 | ) | |||||
Issuance of Common Stock
|
466 | 317 | ||||||
Repurchase of Common Stock
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(71 | ) | (6,482 | ) | ||||
Excess Tax Benefits Related to Stock-Based Compensation
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17 | 1 | ||||||
Net Cash Provided by (Used in) Financing Activities
|
4,987 | (6,588 | ) | |||||
Effect of Exchange Rate Changes on Cash
|
1,344 | 305 | ||||||
Net Increase (Decrease) in Cash
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42 | (383 | ) | |||||
Cash at Beginning of Period
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23 | 406 | ||||||
Cash at End of Period
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$ | 65 | $ | 23 |
FY2015 | ||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 |
YTD
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Net Income
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$ | 445 | $ | 859 | $ | 813 | $ | 1,909 | $ | 4,026 | ||||||||||
+ Interest Expense
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31 | 47 | 77 | 79 | 234 | |||||||||||||||
+ Other Expense / (Income)
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14 | 91 | 6 | 0 | 111 | |||||||||||||||
+ Tax Provision
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269 | 519 | 481 | 1,128 | 2,397 | |||||||||||||||
Operating Income
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$ | 759 | $ | 1,516 | $ | 1,377 | $ | 3,116 | $ | 6,768 | ||||||||||
+ Depreciation & Amortization
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624 | 747 | 897 | 822 | 3,090 | |||||||||||||||
+ Other (Expense) / Income
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(14 | ) | (91 | ) | (6 | ) | 0 | (111 | ) | |||||||||||
+ Noncash Stock Compensation
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155 | 234 | 85 | 33 | 507 | |||||||||||||||
Adjusted EBITDA
|
$ | 1,524 | $ | 2,406 | $ | 2,353 | $ | 3,971 | $ | 10,254 | ||||||||||
Segment Breakdown
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Service Operating Income
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$ | 267 | $ | 665 | $ | 562 | $ | 2,199 | $ | 3,693 | ||||||||||
+ Depreciation & Amortization
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488 | 577 | 676 | 621 | 2,362 | |||||||||||||||
+ Other (Expense) / Income
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(15 | ) | (85 | ) | (33 | ) | (5 | ) | (138 | ) | ||||||||||
+ Noncash Stock Compensation
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72 | 103 | 39 | 10 | 224 | |||||||||||||||
Service Adjusted EBITDA
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$ | 812 | $ | 1,260 | $ | 1,244 | $ | 2,825 | $ | 6,141 | ||||||||||
Distribution Operating Income
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$ | 492 | $ | 851 | $ | 815 | $ | 917 | $ | 3,075 | ||||||||||
+ Depreciation & Amortization
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136 | 170 | 221 | 201 | 728 | |||||||||||||||
+ Other (Expense) / Income
|
1 | (6 | ) | 27 | 5 | 27 | ||||||||||||||
+ Noncash Stock Compensation
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83 | 131 | 46 | 23 | 283 | |||||||||||||||
Distribution Adjusted EBITDA
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$ | 712 | $ | 1,146 | $ | 1,109 | $ | 1,146 | $ | 4,113 | ||||||||||
FY2014 | ||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 |
YTD
|
||||||||||||||||
Net Income
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$ | 721 | $ | 771 | $ | 788 | $ | 1,704 | $ | 3,984 | ||||||||||
+ Interest Expense
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26 | 25 | 34 | 45 | 130 | |||||||||||||||
+ Other Expense / (Income)
|
(22 | ) | 43 | 51 | 57 | 129 | ||||||||||||||
+ Tax Provision
|
427 | 442 | 469 | 1,124 | 2,462 | |||||||||||||||
Operating Income
|
$ | 1,152 | $ | 1,281 | $ | 1,342 | $ | 2,930 | $ | 6,705 | ||||||||||
+ Depreciation & Amortization
|
729 | 711 | 791 | 714 | 2,945 | |||||||||||||||
+ Other (Expense) / Income
|
22 | (43 | ) | (51 | ) | (57 | ) | (129 | ) | |||||||||||
+ Noncash Stock Compensation
|
113 | 144 | 143 | 127 | 527 | |||||||||||||||
Adjusted EBITDA
|
$ | 2,016 | $ | 2,093 | $ | 2,225 | $ | 3,714 | $ | 10,048 | ||||||||||
Segment Breakdown
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Service Operating Income
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$ | 461 | $ | 260 | $ | 151 | $ | 1,507 | $ | 2,379 | ||||||||||
+ Depreciation & Amortization
|
555 | 521 | 555 | 513 | 2,144 | |||||||||||||||
+ Other (Expense) / Income
|
(14 | ) | (42 | ) | (32 | ) | (53 | ) | (141 | ) | ||||||||||
+ Noncash Stock Compensation
|
52 | 63 | 63 | 52 | 230 | |||||||||||||||
Service Adjusted EBITDA
|
$ | 1,054 | $ | 802 | $ | 737 | $ | 2,019 | $ | 4,612 | ||||||||||
Distribution Operating Income
|
$ | 691 | $ | 1,021 | $ | 1,191 | $ | 1,423 | $ | 4,326 | ||||||||||
+ Depreciation & Amortization
|
174 | 190 | 236 | 201 | 801 | |||||||||||||||
+ Other (Expense) / Income
|
36 | (1 | ) | (19 | ) | (4 | ) | 12 | ||||||||||||
+ Noncash Stock Compensation
|
61 | 81 | 80 | 75 | 297 | |||||||||||||||
Distribution Adjusted EBITDA
|
$ | 962 | $ | 1,291 | $ | 1,488 | $ | 1,695 | $ | 5,436 |
Change
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SERVICE
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FY 2015
Q4
|
FY 2014
Q4
|
$ | % | ||||||||||||
Service Revenue
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$ | 14,465 | $ | 13,457 | $ | 1,008 | 7.5 | % | ||||||||
Cost of Revenue
|
$ | 9,661 | $ | 9,226 | $ | 435 | 4.7 | % | ||||||||
Gross Profit
|
$ | 4,804 | $ | 4,231 | $ | 573 | 13.5 | % | ||||||||
Gross Margin
|
33.2 | % | 31.4 | % | ||||||||||||
Selling, Marketing & Warehouse Expenses
|
$ | 1,652 | $ | 1,656 | $ | (4 | ) | (0.2 | %) | |||||||
Contribution Margin
|
$ | 3,152 | $ | 2,575 | $ | 577 | 22.4 | % | ||||||||
% of Revenue
|
21.8 | % | 19.1 | % | ||||||||||||
Administrative Expenses
|
$ | 953 | $ | 1,068 | $ | (115 | ) | (10.8 | )% | |||||||
Operating Income
|
$ | 2,199 | $ | 1,507 | $ | 692 | 45.9 | % | ||||||||
% of Revenue
|
15.2 | % | 11.2 | % | ||||||||||||
Change
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DISTRIBUTION
|
FY 2015
Q4
|
FY 2014
Q4
|
$ | % | ||||||||||||
Distribution Sales
|
$ | 17,877 | $ | 16,946 | $ | 931 | 5.5 | % | ||||||||
Cost of Sales
|
$ | 14,183 | $ | 12,560 | $ | 1,623 | 12.9 | % | ||||||||
Gross Profit
|
$ | 3,694 | $ | 4,386 | $ | (692 | ) | (15.8 | %) | |||||||
Gross Margin
|
20.7 | % | 25.9 | % | ||||||||||||
Selling, Marketing & Warehouse Expenses
|
$ | 1,755 | $ | 1,709 | $ | 46 | 2.7 | % | ||||||||
Contribution Margin
|
$ | 1,939 | $ | 2,677 | $ | (738 | ) | (27.6 | %) | |||||||
% of Sales
|
10.8 | % | 15.8 | % | ||||||||||||
Administrative Expenses
|
$ | 1,022 | $ | 1,254 | $ | (232 | ) | (18.5 | %) | |||||||
Operating Income
|
$ | 917 | $ | 1,423 | $ | (506 | ) | (35.6 | %) | |||||||
% of Sales
|
5.1 | % | 8.4 | % | ||||||||||||
Change
|
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TOTAL
|
FY 2015
Q4
|
FY 2014
Q4
|
$ | % | ||||||||||||
Total Revenue
|
$ | 32,342 | $ | 30,403 | $ | 1,939 | 6.4 | % | ||||||||
Total Cost of Revenue
|
$ | 23,844 | $ | 21,786 | $ | 2,058 | 9.4 | % | ||||||||
Gross Profit
|
$ | 8,498 | $ | 8,617 | $ | (119 | ) | (1.4 | %) | |||||||
Gross Margin
|
26.3 | % | 28.3 | % | ||||||||||||
Selling, Marketing & Warehouse Expenses
|
$ | 3,407 | $ | 3,365 | $ | 42 | 1.2 | % | ||||||||
Contribution Margin
|
$ | 5,091 | $ | 5,252 | $ | (161 | ) | (3.1 | %) | |||||||
% of Revenue
|
15.7 | % | 17.3 | % | ||||||||||||
Administrative Expenses
|
$ | 1,975 | $ | 2,322 | $ | (347 | ) | (14.9 | %) | |||||||
Operating Income
|
$ | 3,116 | $ | 2,930 | $ | 186 | 6.3 | % | ||||||||
% of Revenue
|
9.6 | % | 9.6 | % |
Change
|
||||||||||||||||
SERVICE
|
FY 2015
YTD
|
FY 2014
YTD
|
$ | % | ||||||||||||
Service Revenue
|
$ | 51,801 | $ | 48,184 | $ | 3,617 | 7.5 | % | ||||||||
Cost of Revenue
|
$ | 37,698 | $ | 35,359 | $ | 2,339 | 6.6 | % | ||||||||
Gross Profit
|
$ | 14,103 | $ | 12,825 | $ | 1,278 | 10.0 | % | ||||||||
Gross Margin
|
27.2 | % | 26.6 | % | ||||||||||||
Selling, Marketing & Warehouse Expenses
|
$ | 6,584 | $ | 6,690 | $ | (106 | ) | (1.6 | %) | |||||||
Contribution Margin
|
$ | 7,519 | $ | 6,135 | $ | 1,384 | 22.6 | % | ||||||||
% of Revenue
|
14.5 | % | 12.7 | % | ||||||||||||
Administrative Expenses
|
$ | 3,826 | $ | 3,756 | $ | 70 | 1.9 | % | ||||||||
Operating Income
|
$ | 3,693 | $ | 2,379 | $ | 1,314 | 55.2 | % | ||||||||
% of Revenue
|
7.1 | % | 4.9 | % | ||||||||||||
Change
|
||||||||||||||||
DISTRIBUTION
|
FY 2015
YTD
|
FY 2014
YTD
|
$ | % | ||||||||||||
Distribution Sales
|
$ | 71,823 | $ | 70,324 | $ | 1,499 | 2.1 | % | ||||||||
Cost of Sales
|
$ | 56,839 | $ | 53,359 | $ | 3,480 | 6.5 | % | ||||||||
Gross Profit
|
$ | 14,984 | $ | 16,965 | $ | (1,981 | ) | (11.7 | %) | |||||||
Gross Margin
|
20.9 | % | 24.1 | % | ||||||||||||
Selling, Marketing & Warehouse Expenses
|
$ | 7,329 | $ | 7,349 | $ | (20 | ) | (0.3 | %) | |||||||
Contribution Margin
|
$ | 7,655 | $ | 9,616 | $ | (1,961 | ) | (20.4 | %) | |||||||
% of Sales
|
10.7 | % | 13.7 | % | ||||||||||||
Administrative Expenses
|
$ | 4,580 | $ | 5,290 | $ | (710 | ) | (13.4 | %) | |||||||
Operating Income
|
$ | 3,075 | $ | 4,326 | $ | (1,251 | ) | (28.9 | %) | |||||||
% of Sales
|
4.3 | % | 6.2 | % | ||||||||||||
Change
|
||||||||||||||||
TOTAL
|
FY 2015
YTD
|
FY 2014
YTD
|
$ | % | ||||||||||||
Total Revenue
|
$ | 123,624 | $ | 118,508 | $ | 5,116 | 4.3 | % | ||||||||
Total Cost of Revenue
|
$ | 94,537 | $ | 88,718 | $ | 5,819 | 6.6 | % | ||||||||
Gross Profit
|
$ | 29,087 | $ | 29,790 | $ | (703 | ) | (2.4 | %) | |||||||
Gross Margin
|
23.5 | % | 25.1 | % | ||||||||||||
Selling, Marketing & Warehouse Expenses
|
$ | 13,913 | $ | 14,039 | $ | (126 | ) | (0.9 | %) | |||||||
Contribution Margin
|
$ | 15,174 | $ | 15,751 | $ | (577 | ) | (3.7 | %) | |||||||
% of Revenue
|
12.3 | % | 13.3 | % | ||||||||||||
Administrative Expenses
|
$ | 8,406 | $ | 9,046 | $ | (640 | ) | (7.1 | %) | |||||||
Operating Income
|
$ | 6,768 | $ | 6,705 | $ | 63 | 0.9 | % | ||||||||
% of Revenue
|
5.5 | % | 5.7 | % |
Change
|
||||||||||||||||
FY 2015 Q4
|
FY 2014 Q4
|
$ | % | |||||||||||||
Distribution Sales
|
$ | 17,877 | $ | 16,946 | $ | 913 | 5.5 | % | ||||||||
Business Days
|
63 | 64 | (1 | ) | ||||||||||||
Sales Per Business Day
|
$ | 284 | $ | 265 | $ | 19 | 7.2 | % | ||||||||
Change
|
||||||||||||||||
FY 2015 YTD
|
FY 2014 YTD
|
$ | % | |||||||||||||
Distribution Sales
|
$ | 71,823 | $ | 70,324 | $ | 1,499 | 2.1 | % | ||||||||
Business Days
|
250 | 251 | (1 | ) | ||||||||||||
Sales Per Business Day
|
$ | 287 | $ | 280 | $ | 7 | 2.5 | % |