WAYSIDE TECHNOLOGY GROUP, INC. Reports Operating Results (10-K)
Wayside Technology Group Inc. has a market cap of $68.3 million; its shares were traded at around $14.31 with a P/E ratio of 12.6 and P/S ratio of 0.3. The dividend yield of Wayside Technology Group Inc. stocks is 4.5%. Wayside Technology Group Inc. had an annual average earning growth of 21.8% over the past 5 years.Hedge Fund Gurus that owns WSTG: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns WSTG: John Buckingham of Al Frank Asset Management, Inc., John Keeley of Keeley Fund Management.
Highlight of Business Operations: The Company offers a wide variety of products from a broad range of publishers and manufacturers, including CA Technologies Inc., Quest Software, Inc., GFI Software, Intel Corporation, Infragistics, TechSmith Corporation, Flexera Corp., Acronis, Solarwinds, and Veeam Corporation. On a continuous basis, we screen new products for inclusion in our catalogs and web sites based on their features, quality, price, profit margins and warranties, as well as on current sales trends. Since the Company predominantly sells software, sales of hardware and peripherals represented only 4%, 7% and 4%, of our overall revenue in 2010, 2009 and 2008, respectively.
The Company had one customer that accounted for more than 10% of total sales for 2010. For the year ended December 31, 2010, CDW Corporation accounted for 15.8% of consolidated net sales and, as of December 31, 2010, 12.8% of total net accounts receivable. For the year ended December 31, 2009, CDW Corporation and Software House International accounted for 10.5% and 10.7%, respectively, of consolidated net sales. The Company had no major customers that accounted for more than 10% of total sales for 2008. Our top five customers accounted for 44%, 36%, and 31% of consolidated net sales in 2010, 2009 and 2008, respectively. The Company generally ships products within 48 hours of confirming a customers order. This allows for minimum backlog in the business.
Sales in Canada represented 7% of our consolidated revenues in 2010, as compared to 8% in 2009, and 11% in 2008. Sales in Canada increased in absolute dollars in 2010 as compared to 2009, but decreased as a percentage of consolidated revenues due to overall increased sales volume in other regions. For geographic financial information, please refer to Note 10 in the Notes to our Consolidated Financial Statements.
We believe that effective purchasing from a diverse vendor base is a key element of our business strategy. For the year ended December 31, 2010, Quest was the only individual vendor from whom our purchases exceeded 10%. For the year ended December 31, 2010 Quest accounted for 11.2% of our total purchases. For the year ended December 31, 2009, Quest was similarly the only individual vendor from whom our purchases exceeded 10%, representing 10.2% of our total purchases. For the year ended December 31, 2008, VMware and Quest accounted for 23.3% and 13%, respectively, of our total purchases. VMware terminated its distributor agreement with Lifeboat Distribution, Inc. in 2008. As a result, our Lifeboat segment ceased distributing VMware products as of October 1, 2008, the distribution of which had accounted for $29.2 million, or 17% of our 2008 revenue. Although we successfully replaced VMware, the loss of a key vendor or group of vendors could disrupt our product availability and otherwise have an adverse effect on the Company.
In 2010, the Company purchased approximately 90% of its products directly from manufacturers and publishers and the balance from multiple distributors, as compared to 85% in 2009, and 90% in 2008. Most suppliers or distributors will drop ship products directly to the customers, which reduces physical handling by the Company. Inventory management techniques, such as drop shipping allow the Company to offer a greater range of products without increased inventory requirements or associated risk.
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