UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
Washington, D.C. 20549
|
FORM 10-K
|
x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended September 30, 2012
|
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number
1-10799
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ADDVANTAGE TECHNOLOGIES GROUP, INC
.
|
(Exact name of registrant as specified in its charter)
|
Oklahoma
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73-1351610
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(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
1221 E. Houston, Broken Arrow, Oklahoma
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74012
|
(Address of principal executive offices)
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(Zip code)
|
Registrant’s telephone number: (918) 251-9121
|
Securities registered under Section 12(b) of the Act:
|
Title of each class
|
Name of exchange on which registered
|
Common Stock, $.01 par value
|
NASDAQ Global Market
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
Yes
o
No
x
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
|
Yes
o
No
x
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes
x
No
o
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post s
uch files).
|
Yes
x
No
o
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
|
x
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
Yes
o
No
x
|
The aggregate market value of the outstanding shares of common stock, par value $.01 per share, held by non-affiliates
computed by reference to the closing price of the registrant’s common stock as of March 31, 2012 was $12,816,612.
|
|
The number of shares of the registrant’s outstanding common stock, $.01 par value per share, was 10,189,120 as of
November 30, 2012.
|
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Documents Incorporated by Reference
|
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The identified sections of definitive Proxy Statement to be filed as Schedule 14A pursuant to Regulation 14A in connection with the Registrant’s 2013 annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K.
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Page
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PART I
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Item 1.
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Business.
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Item 2.
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Properties.
|
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Item 3.
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Legal Proceedings.
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PART II
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||
Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
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Item 6.
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Selected Financial Data.
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results
of Operations.
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Item 8.
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Financial Statements and Supplementary Data.
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
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Item 9A.
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Controls and Procedures.
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Item 9B.
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Other Information.
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PART III
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||
Item 10.
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Directors, Executive Officers and Corporate Governance.
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Item 11.
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Executive Compensation.
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence.
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Item 14.
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Principal Accounting Fees and Services.
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PART IV
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||
Item 15.
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Exhibits, Financial Statement Schedules.
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SIGNATURES
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2012
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2011
|
2010
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||||||||||
United States
|
$ | 29,520,146 | $ | 33,599,080 | $ | 40,523,492 | ||||||
Canada, Central America, Mexico, South America and Other
|
5,696,257 | 4,480,450 | 6,782,638 | |||||||||
$ | 35,216,403 | $ | 38,079,530 | $ | 47,306,130 |
·
|
Broken Arrow, Oklahoma – Tulsat owns a facility consisting of an office, warehouse and service center of approximately 100,000 square feet on ten acres, with an investment of $3.3 million, financed by a loan of $2.8 million, due in monthly payments through 2021 at an interest rate of LIBOR plus 1.4%. In 2007, Tulsat constructed a 62,500 square foot warehouse facility on the rear of its existing property in Broken Arrow, OK, with an investment of $1.6 million, financed with cash flow from operations.
|
·
|
Deshler, Nebraska – Tulsat-Nebraska owns a facility consisting of land and an office, warehouse and service center of approximately 8,000 square feet.
|
·
|
Warminster, Pennsylvania – NCS owns its facility consisting of an office, warehouse and service center of approximately 12,000 square feet, with an investment of $0.6 million. NCS also leases property of approximately 2,000 square feet, with monthly rental payments of $1,364 through December 31, 2012. NCS also rents on a month-to-month basis another property of approximately 2,000 square feet, with monthly rental payments of $1,325.
|
·
|
Sedalia, Missouri – ComTech Services owns land and an office, warehouse and service center of approximately 24,300 square feet. In 2007, ComTech Services also constructed an 18,000 square foot warehouse facility on the back of its existing property in Sedalia, MO with an investment of $0.4 million.
|
·
|
New Boston, Texas – Tulsat-Texas owns land and an office, warehouse and service center of approximately 13,000 square feet.
|
·
|
Suwannee, Georgia – Tulsat-Atlanta rents on a month-to-month basis an office and service center of approximately 5,000 square feet, with monthly rental payments of $3,360.
|
·
|
Lenexa, Kansas – ADDvantage Technologies Group purchased, in July 2011, land, an office and a warehouse of approximately 26,400 square feet to be used by AGC, with an investment of $1.5 million.
|
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
(c)
|
Equity compensation plans approved by security holders
|
370,000
|
$2.83
|
306,956
|
Equity compensation plans not approved by security holders
|
0
|
0
|
0
|
Total
|
370,000
|
$2.83
|
306,956
|
Fiscal Year Ended September 30, | ||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
Net sales and service income
|
$ | 35,216 | $ | 38,080 | $ | 47,306 | $ | 42,244 | $ | 56,449 | ||||||||||
Income from operations
|
$ | 3,130 | $ | 4,925 | $ | 7,554 | $ | 5,768 | $ | 8,452 | ||||||||||
Net income applicable to
common shareholders
|
$ | 1,250 | $ | 2,536 | $ | 4,186 | $ | 3,019 | $ | 4,534 | ||||||||||
Earnings per share
|
||||||||||||||||||||
Basic
|
$ | 0.12 | $ | 0.25 | $ | 0.41 | $ | 0.30 | $ | 0.44 | ||||||||||
Diluted
|
$ | 0.12 | $ | 0.25 | $ | 0.41 | $ | 0.30 | $ | 0.44 | ||||||||||
Total assets
|
$ | 42,033 | $ | 52,888 | $ | 52,260 | $ | 49,433 | $ | 51,800 | ||||||||||
Long-term obligations inclusive
|
||||||||||||||||||||
of current maturities
|
$ | 1,687 | $ | 12,058 | $ | 13,872 | $ | 15,857 | $ | 20,510 |
Index to Financial Statements
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets, September 30, 2012 and 2011
|
|
Consolidated Statements of Income and Comprehensive Income, Years
|
|
ended September 30, 2012, 2011 and 2010
|
|
Consolidated Statements of Changes in Shareholders’ Equity, Years ended
|
|
September 30, 2012, 2011 and 2010
|
|
Consolidated Statements of Cash Flows, Years ended
|
|
September 30, 2012, 2011 and 2010
|
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Notes to Consolidated Financial Statements
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September 30,
|
||||||||
2012
|
2011
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 5,191,514 | $ | 10,943,654 | ||||
Accounts receivable, net of allowance of $300,000
|
3,050,796 | 4,244,049 | ||||||
Income tax refund receivable
|
409,386 | 349,745 | ||||||
Inventories, net of allowance for excess and obsolete
|
||||||||
inventory of $1,000,000 and $1,556,000, respectively
|
22,666,385 | 25,777,747 | ||||||
Prepaid expenses
|
129,357 | 177,486 | ||||||
Deferred income taxes
|
920,000 | 1,059,000 | ||||||
Total current assets
|
32,367,438 | 42,551,681 | ||||||
Property and equipment, at cost:
|
||||||||
Land and buildings
|
8,794,272 | 8,683,679 | ||||||
Machinery and equipment
|
2,953,949 | 2,856,615 | ||||||
Leasehold improvements
|
9,633 | 205,797 | ||||||
Total property and equipment, at cost
|
11,757,854 | 11,746,091 | ||||||
Less accumulated depreciation and amortization
|
(3,666,327 | ) | (3,392,329 | ) | ||||
Net property and equipment
|
8,091,527 | 8,353,762 | ||||||
Other assets:
|
||||||||
Deferred income taxes
|
– | 403,000 | ||||||
Goodwill
|
1,560,183 | 1,560,183 | ||||||
Other assets
|
13,778 | 19,245 | ||||||
Total other assets
|
1,573,961 | 1,982,428 | ||||||
Total assets
|
$ | 42,032,926 | $ | 52,887,871 |
September 30,
|
||||||||
2012
|
2011
|
|||||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,437,492 | $ | 2,675,907 | ||||
Accrued expenses
|
1,030,174 | 1,240,224 | ||||||
Notes payable – current portion
|
184,008 | 1,814,008 | ||||||
Total current liabilities
|
2,651,674 | 5,730,139 | ||||||
Notes payable, less current portion
|
1,502,612 | 10,244,120 | ||||||
Deferred income taxes
|
62,000 | – | ||||||
Other liabilities
|
– | 957,258 | ||||||
Shareholders’ equity:
|
||||||||
Common stock, $.01 par value; 30,000,000 shares authorized;
10,465,323 and 10,431,354 shares issued, respectively;
10,189,120 and 10,207,390 shares outstanding, respectively
|
104,653 | 104,314 | ||||||
Paid in capital
|
(5,748,503 | ) | (5,884,521 | ) | ||||
Retained earnings
|
43,980,590 | 42,730,098 | ||||||
Accumulated other comprehensive loss:
|
||||||||
Unrealized loss on interest rate swap, net of tax
|
– | (587,258 | ) | |||||
Total shareholders’ equity before treasury stock
|
38,336,740 | 36,362,633 | ||||||
Less: Treasury stock, 276,203 and 223,964 shares, respectively,
at cost
|
(520,100 | ) | (406,279 | ) | ||||
Total shareholders’ equity
|
37,816,640 | 35,956,354 | ||||||
Total liabilities and shareholders’ equity
|
$ | 42,032,926 | $ | 52,887,871 |
Years ended September 30,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Sales:
|
||||||||||||
Net new sales income
|
$ | 20,743,264 | $ | 25,467,734 | $ | 32,108,559 | ||||||
Net refurbished sales income
|
9,814,763 | 7,430,603 | 9,444,802 | |||||||||
Net service income
|
4,658,376 | 5,181,193 | 5,752,769 | |||||||||
Total net sales
|
35,216,403 | 38,079,530 | 47,306,130 | |||||||||
Cost of sales
|
24,854,960 | 26,528,682 | 32,850,524 | |||||||||
Gross profit
|
10,361,443 | 11,550,848 | 14,455,606 | |||||||||
Operating, selling, general and administrative expenses
|
7,231,097 | 6,625,907 | 6,901,946 | |||||||||
Income from operations
|
3,130,346 | 4,924,941 | 7,553,660 | |||||||||
Interest expense
|
1,113,854 | 696,634 | 801,211 | |||||||||
Income before income taxes
|
2,016,492 | 4,228,307 | 6,752,449 | |||||||||
Provision for income taxes
|
766,000 | 1,692,000 | 2,566,000 | |||||||||
Net income attributable to common shareholders
|
1,250,492 | 2,536,307 | 4,186,449 | |||||||||
Other comprehensive loss:
|
||||||||||||
Unrealized gain (loss) on interest rate swap, net of $370,000, $106,000 and $(72,000) tax provision (benefit), respectively
|
587,258 | 189,425 | (130,998 | ) | ||||||||
Comprehensive income
|
$ | 1,837,750 | $ | 2,725,732 | $ | 4,055,451 | ||||||
Earnings per share:
|
||||||||||||
Basic
|
$ | 0.12 | $ | 0.25 | $ | 0.41 | ||||||
Diluted
|
$ | 0.12 | $ | 0.25 | $ | 0.41 | ||||||
Shares used in per share calculation:
|
||||||||||||
Basic
|
10,196,241 | 10,175,213 | 10,132,658 | |||||||||
Diluted
|
10,197,496 | 10,178,763 | 10,136,610 |
Accumulated
|
||||||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Common Stock
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
||||||||||||||||||||||
Balance, September 30, 2009
|
10,340,784 | $ | 103,408 | $ | (6,151,530 | ) | $ | 36,007,342 | $ | (645,685 | ) | $ | (406,279 | ) | $ | 28,907,256 | ||||||||||||
Net income
|
– | – | – | 4,186,449 | – | – | 4,186,449 | |||||||||||||||||||||
Stock issuance
|
27,150 | 271 | 59,729 | – | – | – | 60,000 | |||||||||||||||||||||
Net unrealized loss on interest swap
|
– | – | – | – | (130,998 | ) | – | (130,998 | ) | |||||||||||||||||||
Share based compensation expense
|
– | – | 20,815 | – | – | – | 20,815 | |||||||||||||||||||||
Balance, September 30, 2010
|
10,367,934 | $ | 103,679 | $ | (6,070,986 | ) | $ | 40,193,791 | $ | (776,683 | ) | $ | (406,279 | ) | $ | 33,043,522 | ||||||||||||
Net income
|
– | – | – | 2,536,307 | – | – | 2,536,307 | |||||||||||||||||||||
Stock issuance
|
58,920 | 590 | 169,410 | – | – | – | 170,000 | |||||||||||||||||||||
Stock options exercised
|
4,500 | 45 | 6,706 | – | – | – | 6,751 | |||||||||||||||||||||
Net unrealized gain on interest swap
|
– | – | – | – | 189,425 | – | 189,425 | |||||||||||||||||||||
Share based compensation expense
|
– | – | 10,349 | – | – | – | 10,349 | |||||||||||||||||||||
Balance, September 30, 2011
|
10,431,354 | $ | 104,314 | $ | (5,884,521 | ) | $ | 42,730,098 | $ | (587,258 | ) | $ | (406,279 | ) | $ | 35,956,354 | ||||||||||||
Net income
|
– | – | – | 1,250,492 | – | – | 1,250,492 | |||||||||||||||||||||
Stock issuance
|
31,969 | 320 | 69,680 | – | – | – | 70,000 | |||||||||||||||||||||
Stock options exercised
|
2,000 | 20 | 1,600 | – | – | – | 1,620 | |||||||||||||||||||||
Net unrealized gain on interest swap
|
– | – | – | – | 587,258 | – | 587,258 | |||||||||||||||||||||
Share based compensation expense
|
– | – | 64,738 | – | – | – | 64,738 | |||||||||||||||||||||
Purchase of common stock
|
– | – | – | – | – | (113,821 | ) | (113,821 | ) | |||||||||||||||||||
Balance, September 30, 2012
|
10,465,323 | $ | 104,653 | $ | (5,748,503 | ) | $ | 43,980,590 | $ | – | $ | (520,100 | ) | $ | 37,816,640 |
Years ended September 30,
|
||||||||||||
2012
|
2011
|
2010 |
|
|||||||||
Operating Activities
|
||||||||||||
Net income
|
$ | 1,250,492 | $ | 2,536,307 | $ | 4,186,449 | ||||||
Adjustments to reconcile net income to net cash
|
||||||||||||
provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
356,091 | 370,965 | 398,778 | |||||||||
Provision for losses on accounts receivable
|
– | – | 26,162 | |||||||||
Provision for excess and obsolete inventories
|
580,587 | 407,303 | 805,684 | |||||||||
(Gain) loss on disposal of property and equipment
|
114,071 | (1,350 | ) | 7,704 | ||||||||
Deferred income tax provision (benefit)
|
234,000 | 533,000 | (3,000 | ) | ||||||||
Share based compensation expense
|
201,404 | 109,516 | 84,984 | |||||||||
Cash provided (used) by changes in operating assets
and liabilities:
|
||||||||||||
Accounts receivable
|
1,193,253 | 892,459 | (732,759 | ) | ||||||||
Income tax refund receivable
|
(59,641 | ) | (146,340 | ) | (114,994 | ) | ||||||
Inventories
|
2,530,775 | 1,896,005 | 4,950,218 | |||||||||
Prepaid expenses
|
(18,538 | ) | (52,451 | ) | 14,856 | |||||||
Other assets
|
5,467 | 74,825 | 693 | |||||||||
Accounts payable
|
(1,238,415 | ) | (403,790 | ) | 228,355 | |||||||
Accrued expenses
|
(210,050 | ) | (199,782 | ) | 244,592 | |||||||
Net cash provided by operating activities
|
4,939,496 | 6,016,667 | 10,097,722 | |||||||||
Investing Activities
|
||||||||||||
Acquisition of net operating assets, net of cash acquired
|
– | (549,785 | ) | – | ||||||||
Additions to machinery and equipment
|
(97,333 | ) | (23,132 | ) | (77,078 | ) | ||||||
Additions of land and buildings
|
(110,594 | ) | (1,475,000 | ) | (19,743 | ) | ||||||
Disposals of machinery and equipment
|
– | 43,011 | 22,750 | |||||||||
Net cash used in investing activities
|
(207,927 | ) | (2,004,906 | ) | (74,071 | ) | ||||||
Financing Activities
|
||||||||||||
Payments on notes payable
|
(10,371,508 | ) | (1,814,008 | ) | (1,984,504 | ) | ||||||
Purchase of treasury stock
|
(113,821 | ) | – | – | ||||||||
Proceeds from stock options exercised
|
1,620 | 6,750 | – | |||||||||
Net cash used in financing activities
|
(10,483,709 | ) | (1,807,258 | ) | (1,984,504 | ) | ||||||
Net increase (decrease) in cash and cash equivalents
|
(5,752,140 | ) | 2,204,503 | 8,039,147 | ||||||||
Cash and cash equivalents at beginning of year
|
$ | 10,943,654 | 8,739,151 | 700,004 | ||||||||
Cash and cash equivalents at end of year
|
$ | 5,191,514 | $ | 10,943,654 | $ | 8,739,151 | ||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid for interest
|
$ | 1,164,522 | $ | 704,878 | $ | 814,332 | ||||||
Cash paid for income taxes
|
$ | 622,210 | $ | 1,344,399 | $ | 2,767,180 |
Current assets, excluding inventory
|
$ | 313,458 | ||
Inventory
|
670,333 | |||
Property and equipment
|
44,000 | |||
Current liabilities
|
(427,791 | ) | ||
Total
|
600,000 | |||
Cash acquired
|
(50,215 | ) | ||
Acquisition price, net of cash acquired
|
$ | 549,785 |
2012
|
2011
|
|||||||
New
|
$ | 17,283,788 | $ | 19,970,510 | ||||
Refurbished
|
6,382,597 | 7,363,237 | ||||||
Allowance for excess and obsolete inventory
|
(1,000,000 | ) | (1,556,000 | ) | ||||
$ | 22,666,385 | $ | 25,777,747 |
2012
|
2011
|
2010
|
||||||||||
Current
|
$ | 532,000 | $ | 1,159,000 | $ | 2,569,000 | ||||||
Deferred
|
234,000 | 533,000 | (3,000 | ) | ||||||||
$ | 766,000 | $ | 1,692,000 | $ | 2,566,000 |
2012
|
2011
|
2010
|
||||||||||
Statutory tax rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
State income taxes, net of U.S. federal tax benefit
|
3.5 | % | 4.6 | % | 4.0 | % | ||||||
Charges without tax benefit
|
1.4 | % | 0.7 | % | 0.5 | % | ||||||
Tax credits and other exclusions
|
(0.9 | %) | 0.7 | % | (0.5 | %) | ||||||
Company’s effective tax rate
|
38.0 | % | 40.0 | % | 38.0 | % |
2012
|
2011
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$ | 500,000 | $ | 624,000 | ||||
Accounts receivable
|
115,000 | 116,000 | ||||||
Inventory
|
639,000 | 755,000 | ||||||
Interest rate swap
|
– | 370,000 | ||||||
Other, net
|
196,000 | 192,000 | ||||||
1,450,000 | 2,057,000 | |||||||
Deferred tax liabilities:
|
||||||||
Financial basis in excess of tax basis of certain assets
|
592,000 | 595,000 | ||||||
Net deferred tax asset
|
$ | 858,000 | $ | 1,462,000 |
2012
|
2011
|
|||||||
Deferred tax asset – current
|
$ | 920,000 | $ | 1,059,000 | ||||
Deferred tax asset (liability) – noncurrent
|
(62,000 | ) | 403,000 | |||||
$ | 858,000 | $ | 1,462,000 |
2012
|
2011
|
|||||||
Employee costs
|
$ | 823,978 | $ | 905,536 | ||||
Taxes other than income tax
|
176,296 | 219,662 | ||||||
Interest
|
1,153 | 51,821 | ||||||
Other, net
|
28,747 | 63,205 | ||||||
$ | 1,030,174 | $ | 1,240,224 |
2013
|
$ | 184,008 | ||
2014
|
184,008 | |||
2015
|
184,008 | |||
2016
|
184,008 | |||
2017
|
184,008 | |||
Thereafter
|
766,580 | |||
Total
|
$ | 1,686,620 |
Options
|
Weighted Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding at September 30, 2011
|
122,000 | $ | 3.57 | |||||||||
Granted
|
250,000 | $ | 2.45 | |||||||||
Exercised
|
(2,000 | ) | $ | 0.81 | $ | 2,640 | ||||||
Expired
|
– | $ | – | |||||||||
Forfeited
|
– | $ | – | |||||||||
Outstanding at September 30, 2012
|
370,000 | $ | 2.83 | $ | 1,100 | |||||||
Exercisable at September 30, 2012
|
120,000 | $ | 3.62 | $ | 1,100 |
Exercisable
|
Remaining
|
||
Stock Options
|
Stock Options
|
Contractual
|
|
Exercise Price
|
Outstanding
|
Outstanding
|
Life
|
$2.450
|
250,000
|
–
|
9.5 years
|
$3.001
|
70,000
|
70,000
|
5.9 years
|
$3.450
|
15,000
|
15,000
|
4.4 years
|
$5.780
|
15,000
|
15,000
|
3.4 years
|
$4.620
|
15,000
|
15,000
|
2.4 years
|
$4.400
|
3,000
|
3,000
|
1.4 years
|
$1.650
|
2,000
|
2,000
|
0.4 years
|
370,000
|
120,000
|
2012
|
||||
Estimated fair value of options at grant date
|
$ | 267,925 | ||
Black-Scholes model assumptions:
|
||||
Average expected life (years)
|
6 | |||
Average expected volatility factor
|
41 | % | ||
Average risk-free interest rate
|
2.99 | % | ||
Average expected dividends yield
|
– |
2012
|
2011
|
2010
|
||||||||||
Fiscal year 2008 grant
|
$ | 3,562 | $ | 10,349 | $ | 20,815 | ||||||
Fiscal year 2012 grant
|
61,176 | – | – | |||||||||
Total compensation expense
|
$ | 64,738 | $ | 10,349 | $ | 20,815 |
2012
|
2011
|
2010
|
||||||||||
Fiscal year 2009 grant
|
$ | – | $ | – | $ | 29,169 | ||||||
Fiscal year 2010 grant
|
– | 25,000 | 35,000 | |||||||||
Fiscal year 2011 grant
|
95,833 | 74,167 | – | |||||||||
Fiscal year 2012 grant
|
40,833 | – | – | |||||||||
$ | 136,666 | $ | 99,167 | $ | 64,169 |
2012
|
2011
|
2010
|
||||||||||
Net income attributable to common
shareholders
|
$ | 1,250,492 | $ | 2,536,307 | $ | 4,186,449 | ||||||
Basic weighted average shares
|
10,196,241 | 10,175,213 | 10,132,658 | |||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options
|
1,255 | 3,550 | 3,952 | |||||||||
Diluted weighted average shares
|
10,197,496 | 10,178,763 | 10,136,610 | |||||||||
Earnings per common share:
|
||||||||||||
Basic
|
$ | 0.12 | $ | 0.25 | $ | 0.41 | ||||||
Diluted
|
$ | 0.12 | $ | 0.25 | $ | 0.41 |
2012
|
2011
|
2010
|
||||||||||
Stock options excluded
|
368,000 | 118,000 | 118,000 | |||||||||
Weighted average exercise price of
|
||||||||||||
stock options
|
$ | 2.84 | $ | 3.65 | $ | 3.60 | ||||||
Average market price of common stock
|
$ | 2.22 | $ | 2.73 | $ | 2.49 |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Fiscal year ended 2012
|
||||||||||||||||
Net sales and service income
|
$ | 9,004,395 | $ | 9,230,956 | $ | 8,498,773 | $ | 8,482,279 | ||||||||
Gross profit
|
$ | 2,739,021 | $ | 2,527,319 | $ | 2,587,836 | $ | 2,507,267 | ||||||||
Net income (loss)
|
$ | 446,780 | $ | (76,279 | ) | $ | 459,298 | $ | 420,693 | |||||||
Basic earnings (loss) per common
share
|
$ | 0.04 | $ | (0.01 | ) | $ | 0.05 | $ | 0.04 | |||||||
Diluted earnings (loss) per common share
|
$ | 0.04 | $ | (0.01 | ) | $ | 0.05 | $ | 0.04 | |||||||
Fiscal year ended 2011
|
||||||||||||||||
Net sales and service income
|
$ | 9,229,446 | $ | 8,896,705 | $ | 8,695,205 | $ | 11,258,174 | ||||||||
Gross profit
|
$ | 2,879,565 | $ | 2,684,710 | $ | 2,567,397 | $ | 3,419,176 | ||||||||
Net income
|
$ | 740,635 | $ | 598,706 | $ | 467,577 | $ | 729,389 | ||||||||
Basic earnings per common share
|
$ | 0.07 | $ | 0.06 | $ | 0.05 | $ | 0.07 | ||||||||
Diluted earnings per common share
|
$ | 0.07 | $ | 0.06 | $ | 0.05 | $ | 0.07 | ||||||||
Fiscal year ended 2010
|
||||||||||||||||
Net sales and service income
|
$ | 10,219,221 | $ | 12,055,521 | $ | 13,297,449 | $ | 11,733,939 | ||||||||
Gross profit
|
$ | 3,330,340 | $ | 3,619,796 | $ | 4,207,974 | $ | 3,297,496 | ||||||||
Net income
|
$ | 859,639 | $ | 1,081,845 | $ | 1,396,234 | $ | 848,731 | ||||||||
Basic earnings per common share
|
$ | 0.08 | $ | 0.11 | $ | 0.14 | $ | 0.08 | ||||||||
Diluted earnings per common share
|
$ | 0.08 | $ | 0.11 | $ | 0.14 | $ | 0.08 |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
|
2.
|
The following financial statement Schedule II – Valuation and Qualifying Accounts for the years ended September 30, 2012, 2011 and 2010 is filed as part of this report. All other financial statement schedules have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the financial statements or notes thereto contained in Part II, Item 8 of this current report.
|
Balance at
|
Charged to
|
Balance at
|
||||||||||||||||||
Beginning
|
Costs and
|
End
|
||||||||||||||||||
of Year
|
Expenses
|
Write offs
|
Recoveries
|
of Year
|
||||||||||||||||
Year Ended September 30, 2012
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 300,000 | – | (2,404 | ) | 2,404 | $ | 300,000 | ||||||||||||
Allowance for Excess and Obsolete Inventory
|
$ | 1,556,000 | 580,587 | (1,136,587 | ) | – | $ | 1,000,000 | ||||||||||||
Year Ended September 30, 2011
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 300,000 | 3,453 | (3,453 | ) | – | $ | 300,000 | ||||||||||||
Allowance for Excess and Obsolete Inventory
|
$ | 2,545,000 | 415,808 | (1,404,808 | ) | – | $ | 1,556,000 | ||||||||||||
Year Ended September 30, 2010
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 300,000 | 26,162 | (26,162 | ) | – | $ | 300,000 | ||||||||||||
Allowance for Excess and Obsolete Inventory
|
$ | 2,196,000 | 804,565 | (455,565 | ) | – | $ | 2,545,000 |
|
3.1
|
Certificate of Incorporation of the Company and amendments thereto incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission by the Company on January 10, 2003.
|
|
3.2
|
Bylaws of the Company, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on December 31, 2007.
|
|
4.1
|
Certificate of Designation, Preferences, Rights and Limitations of ADDvantage Media Group, Inc. Series A 5% Cumulative Convertible Preferred Stock and Series B 7% Cumulative Preferred Stock as filed with the Oklahoma Secretary of State on September 30, 1999 incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on October 14, 1999.
|
|
10.1
|
The ADDvantage Media Group, Inc. 1998 Incentive Stock Plan, incorporated by reference to Appendix A to the Company's Proxy Statement relating to the Company's 1998 Annual Meeting, filed with the Securities and Exchange Commission on April 28, 1998.
|
|
10.2
|
First Amendment to ADDvantage Media Group, Inc. 1998 Incentive
|
|
Stock Plan, incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on November 20, 2003.
|
|
10.3
|
Senior Management Incentive Compensation Plan, incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on March 9, 2007.
|
|
10.4
|
Employment Contract between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on September 18, 2008.
|
|
10.5
|
Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2010, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 14, 2010.
|
|
10.6
|
Amendment One to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2011, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 15, 2011.
|
|
10.7
|
Employment Agreement dated April 2, 2012 between the Company and David L. Humphrey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.8
|
Form of Non-Qualified Stock Option Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.9
|
Change in Control Agreement dated April 2, 1012 between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.10
|
Form of Restricted Stock Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.11
|
Amendment Two to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2012.
|
|
21.1
|
Listing of the Company’s subsidiaries.
|
|
23.1
|
Consent of HoganTaylor LLP.
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
3.1
|
Certificate of Incorporation of the Company and amendments thereto incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission by the Company on January 10, 2003.
|
|
3.2
|
Bylaws of the Company, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on December 31, 2007.
|
|
4.1
|
Certificate of Designation, Preferences, Rights and Limitations of ADDvantage Media Group, Inc. Series A 5% Cumulative Convertible Preferred Stock and Series B 7% Cumulative Preferred Stock as filed with the Oklahoma Secretary of State on September 30, 1999 incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on October 14, 1999.
|
|
10.1
|
The ADDvantage Media Group, Inc. 1998 Incentive Stock Plan, incorporated by reference to Appendix A to the Company's Proxy Statement relating to the Company's 1998 Annual Meeting, filed with the Securities and Exchange Commission on April 28, 1998.
|
|
10.2
|
First Amendment to ADDvantage Media Group, Inc. 1998 Incentive
|
|
Stock Plan, incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on November 20, 2003.
|
|
10.3
|
Senior Management Incentive Compensation Plan, incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on March 9, 2007.
|
|
10.4
|
Employment Contract between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on September 18, 2008.
|
|
10.5
|
Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2010, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 14, 2010.
|
|
10.6
|
Amendment One to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2011, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 15, 2011.
|
|
10.7
|
Employment Agreement dated April 2, 2012 between the Company and David L. Humphrey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.8
|
Form of Non-Qualified Stock Option Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.9
|
Change in Control Agreement dated April 2, 1012 between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.10
|
Form of Restricted Stock Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012.
|
|
10.11
|
Amendment Two to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2012.
|
|
21.1
|
Listing of the Company’s subsidiaries.
|
|
23.1
|
Consent of HoganTaylor LLP.
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
1.
|
I have reviewed this annual report on Form 10-K of ADDvantage Technologies Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 10-K of ADDvantage Technologies Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|