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
|
For the fiscal year ended September 30, 2015
|
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
1221 E. Houston, Broken Arrow, Oklahoma
|
74012
|
(Address of principal executive offices)
|
(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, 2015 was $12,198,302.
|
|
The number of shares of the registrant’s outstanding common stock, $.01 par value per share, was 10,063,563 as of
November 30, 2015.
|
|
Documents Incorporated by Reference
|
|
The identified sections of definitive Proxy Statement to be filed as Schedule 14A pursuant to Regulation 14A in connection with the Registrant’s 2016 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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2015
|
2014
|
2013
|
||||||||||
United States
|
||||||||||||
Cable TV
|
$ | 23,975,197 | $ | 25,738,706 | $ | 27,541,137 | ||||||
Telco (a)
|
16,031,293 | 6,533,458 | − | |||||||||
Canada, Central America, Asia, Europe, Mexico, South America and Other
|
||||||||||||
Cable TV
|
1,418,488 | 1,465,514 | 1,136,214 | |||||||||
Telco (a)
|
2,308,642 | 2,151,014 | − | |||||||||
$ | 43,733,620 | $ | 35,888,692 | $ | 28,677,351 |
·
|
we sell both new and refurbished Cable TV equipment as well as repair what we sell, while most of our competition does not offer all of these services;
|
·
|
we stock both new and refurbished inventory;
|
·
|
we stock a wide breadth of inventory, which many of our competitors do not due to working capital constraints;
|
·
|
we can reconfigure new and refurbished equipment to meet the different needs of our customers;
|
·
|
we can meet our customers’ timing needs for product due to our inventory on hand; and
|
·
|
we have experienced sales support staff that have the technical know-how to assist our customers regarding solutions for various products and configurations.
|
·
|
we stock a broad range of used inventory, which allows us to meet our customers’ timing needs;
|
·
|
we have experienced sales support staff that have strong relationships with our customers and technical knowledge of the products we offer;
|
·
|
we have the following quality certifications: TL9000 (telecommunications quality certification), ISO 14001 (environmental management certification), OHSAS18000 (occupational safety
and
health management certification), and R2 (EPA responsible recycling practices for electronics); and
|
·
|
we provide multiple services for our customers including deinstallation and decommission of products, storage and management of spares inventory and recycling.
|
·
|
Broken Arrow, Oklahoma – We own a facility in a suburb of Tulsa consisting of our headquarters, additional offices, 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, we also constructed a 62,500
square foot warehouse facility on the rear of our existing property in Broken Arrow, OK, with an investment of $1.6 million, financed with cash flows from operations.
|
·
|
Deshler, Nebraska – We own a facility near Lincoln consisting of land and an office, warehouse and service center of approximately 8,000 square feet.
|
·
|
Warminster, Pennsylvania – We own a facility in a suburb of Philadelphia consisting of an office, warehouse and service center of approximately 12,000 square feet, with an investment of $0.6
million. We also lease property of approximately 2,000 square feet, with monthly rental payments of $1,425 through December 31, 2015. We also rent on a month-to-month basis another
property
of approximately 2,000 square feet, with monthly rental payments of $1,325.
|
·
|
Sedalia, Missouri – We own a facility near Kansas City consisting of land and an office, warehouse and service center of approximately 24,300 square feet. In 2007, we also constructed an
18,000 square foot warehouse facility on the back of our existing property in Sedalia, MO, with an investment of $0.4 million.
|
·
|
New Boston, Texas – We own a facility near Texarkana consisting of land and an office, warehouse and service center of approximately 13,000 square feet.
|
·
|
Suwanee, Georgia – We rent on a month-to-month basis a facility in a suburb of Atlanta consisting of an office and service center of approximately 5,000 square feet, with monthly rental
payments of $3,060.
|
·
|
Phoenix, Arizona – We lease a facility in Phoenix, Arizona consisting of an office, service center and warehouse of approximately 6,300 square feet, with monthly rental payments of $3,565,
$3,690, and $3,815 plus common area operating expenses of approximately $1,500 through May 31, 2016, 2017 and 2018, respectively.
|
·
|
Jessup, Maryland – We lease a facility in a suburb of Baltimore consisting of an office, warehouse, and service center of approximately 88,000 square feet, with monthly rental payments of
$41,000 increasing each year by 2.5% through November 30, 2023.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
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
|
535,000
|
$2.88
|
539,883
|
Equity compensation plans not approved by security holders
|
0
|
0
|
0
|
Total
|
535,000
|
$2.88
|
539,883
|
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
Sales
|
$ | 43,734 | $ | 35,889 | $ | 28,677 | $ | 29,677 | $ | 36,145 | ||||||||||
Income from operations
|
$ | 2,576 | $ | 1,097 | $ | 2,896 | $ | 2,619 | $ | 4,754 | ||||||||||
Income from continuing operations
|
$ | 1,498 | $ | 659 | $ | 1,772 | $ | 939 | $ | 2,431 | ||||||||||
Continuing operations earnings per
share
|
||||||||||||||||||||
Basic
|
$ | 0.15 | $ | 0.07 | $ | 0.18 | $ | 0.09 | $ | 0.24 | ||||||||||
Diluted
|
$ | 0.15 | $ | 0.07 | $ | 0.18 | $ | 0.09 | $ | 0.24 | ||||||||||
Total assets
|
$ | 51,973 | $ | 53,406 | $ | 43,116 | $ | 42,033 | $ | 52,888 | ||||||||||
Long-term obligations inclusive
of current maturities
|
$ | 5,240 | $ | 6,086 | $ | 1,503 | $ | 1,687 | $ | 12,058 |
Year Ended September 30, 2015
|
Year Ended September 30, 2014
|
|||||||||||||||||||||||
Cable TV
|
Telco
|
Total
|
Cable TV
|
Telco
|
Total
|
|||||||||||||||||||
Operating income (loss)
|
$ | 2,210,414 | $ | 365,796 | $ | 2,576,210 | $ | 1,492,100 | $ | (395,001 | ) | $ | 1,097,099 | |||||||||||
Depreciation
|
296,876 | 111,827 | 408,703 | 293,353 | 66,926 | 360,279 | ||||||||||||||||||
Amortization
|
− | 825,805 | 825,805 | − | 481,722 | 481,722 | ||||||||||||||||||
EBITDA
(a)
|
$ | 2,507,290 | $ | 1,303,428 | $ | 3,810,718 | $ | 1,785,453 | $ | 153,647 | $ | 1,939,100 |
(a)
|
The Telco segment for the year ended September 30, 2014 includes acquisition-related costs of $0.6 million related to the acquisition of Nave Communications.
|
Year Ended September 30, 2014
|
Year Ended September 30, 2013
|
|||||||||||||||||||||||
Cable TV
|
Telco
|
Total
|
Cable TV
|
Telco
|
Total
|
|||||||||||||||||||
Operating income (loss)
|
$ | 1,492,100 | $ | (395,001 | ) | $ | 1,097,099 | $ | 2,896,254 | $ | − | $ | 2,896,254 | |||||||||||
Depreciation
|
293,353 | 66,926 | 360,279 | 276,356 | − | 276,356 | ||||||||||||||||||
Amortization
|
− | 481,722 | 481,722 | − | − | − | ||||||||||||||||||
EBITDA
(a)
|
$ | 1,785,453 | $ | 153,647 | $ | 1,939,100 | $ | 3,172,610 | $ | − | $ | 3,172,610 |
(a)
|
The Telco segment for the year ended September 30, 2014 includes acquisition-related costs of $0.6 million related to the acquisition of Nave Communications.
|
Index to Financial Statements
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets, September 30, 2015 and 2014
|
|
Consolidated Statements of Operations, Years ended
|
|
September 30, 2015, 2014 and 2013
|
|
Consolidated Statements of Changes in Shareholders’ Equity, Years ended
|
|
September 30, 2015, 2014 and 2013
|
|
Consolidated Statements of Cash Flows, Years ended
|
|
September 30, 2015, 2014 and 2013
|
|
Notes to Consolidated Financial Statements
|
September 30,
|
||||||||
2015
|
2014
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 6,110,986 | $ | 5,286,097 | ||||
Accounts receivable, net of allowance for doubtful accounts of
$250,000 and $200,000, respectively
|
4,286,377 | 6,393,580 | ||||||
Income tax receivable
|
− | 220,104 | ||||||
Inventories, net of allowance for excess and obsolete
|
||||||||
inventory of $2,756,628 and $2,156,628, respectively
|
23,600,996 | 22,780,523 | ||||||
Prepaid expenses
|
153,454 | 174,873 | ||||||
Deferred income taxes
|
1,776,000 | 1,416,000 | ||||||
Total current assets
|
35,927,813 | 36,271,177 | ||||||
Property and equipment, at cost:
|
||||||||
Land and buildings
|
7,218,678 | 7,208,679 | ||||||
Machinery and equipment
|
3,415,164 | 3,244,153 | ||||||
Leasehold improvements
|
151,957 | 206,393 | ||||||
Total property and equipment, at cost
|
10,785,799 | 10,659,225 | ||||||
Less: Accumulated depreciation
|
(4,584,796 | ) | (4,191,516 | ) | ||||
Net property and equipment
|
6,201,003 | 6,467,709 | ||||||
Intangibles, net of accumulated amortization
|
5,799,473 | 6,625,278 | ||||||
Goodwill
|
3,910,089 | 3,910,089 | ||||||
Other assets
|
134,678 | 131,428 | ||||||
Total assets
|
$ | 51,973,056 | $ | 53,405,681 | ||||
September 30,
|
||||||||
2015
|
2014
|
|||||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,784,482 | $ | 2,880,761 | ||||
Accrued expenses
|
1,358,681 | 1,809,878 | ||||||
Income tax payable
|
122,492 | − | ||||||
Notes payable – current portion
|
873,752 | 845,845 | ||||||
Other current liabilities
|
982,094 | 983,269 | ||||||
Total current liabilities
|
5,121,501 | 6,519,753 | ||||||
Notes payable, less current portion
|
4,366,130 | 5,240,066 | ||||||
Deferred income taxes
|
286,000 | 267,000 | ||||||
Other liabilities
|
1,064,717 | 1,942,889 | ||||||
Total liabilities
|
10,838,348 | 13,969,708 | ||||||
Shareholders’ equity:
|
||||||||
Common stock, $.01 par value; 30,000,000 shares authorized;
10,564,221 and 10,541,864 shares issued, respectively;
10,063,563 and 10,041,206 shares outstanding, respectively
|
105,642 | 105,419 | ||||||
Paid in capital
|
(5,112,269 | ) | (5,312,881 | ) | ||||
Retained earnings
|
47,141,349 | 45,643,449 | ||||||
Total shareholders’ equity before treasury stock
|
42,134,722 | 40,435,987 | ||||||
Less: Treasury stock, 500,658 shares, at cost
|
(1,000,014 | ) | (1,000,014 | ) | ||||
Total shareholders’ equity
|
41,134,708 | 39,435,973 | ||||||
Total liabilities and shareholders’ equity
|
$ | 51,973,056 | $ | 53,405,681 |
Years ended September 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Sales
|
$ | 43,733,620 | $ | 35,888,692 | $ | 28,677,351 | ||||||
Cost of sales
|
28,434,731 | 24,283,236 | 19,968,034 | |||||||||
Gross profit
|
15,298,889 | 11,605,456 | 8,709,317 | |||||||||
Operating, selling, general and administrative expenses
|
12,722,679 | 10,508,357 | 5,813,063 | |||||||||
Income from operations
|
2,576,210 | 1,097,099 | 2,896,254 | |||||||||
Interest expense
|
305,310 | 217,910 | 25,980 | |||||||||
Income before income taxes
|
2,270,900 | 879,189 | 2,870,274 | |||||||||
Provision for income taxes
|
773,000 | 220,000 | 1,098,351 | |||||||||
Income from continuing operations
|
1,497,900 | 659,189 | 1,771,923 | |||||||||
Discontinued operations:
|
||||||||||||
Loss from discontinued operations, net of tax
|
− | (36,211 | ) | (102,207 | ) | |||||||
Loss on sale of discontinued operations, net of tax
|
− | (629,835 | ) | − | ||||||||
Discontinued operations, net of tax
|
− | (666,046 | ) | (102,207 | ) | |||||||
Net income (loss)
|
$ | 1,497,900 | $ | (6,857 | ) | $ | 1,669,716 | |||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
||||||||||||
Continuing operations
|
$ | 0.15 | $ | 0.07 | $ | 0.18 | ||||||
Discontinued operations
|
− | (0.07 | ) | (0.01 | ) | |||||||
Net income (loss)
|
$ | 0.15 | $ | (0.00 | ) | $ | 0.17 | |||||
Diluted
|
||||||||||||
Continuing operations
|
$ | 0.15 | $ | 0.07 | $ | 0.18 | ||||||
Discontinued operations
|
− | (0.07 | ) | (0.01 | ) | |||||||
Net income (loss)
|
$ | 0.15 | $ | (0.00 | ) | $ | 0.17 | |||||
Shares used in per share calculation:
|
||||||||||||
Basic
|
10,055,052 | 10,021,431 | 10,052,359 | |||||||||
Diluted
|
10,055,052 | 10,049,440 | 10,052,359 |
Common Stock
|
Paid-in
|
Retained
|
Treasury
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Total
|
|||||||||||||||||||
Balance, September 30, 2012
|
10,465,323 | $ | 104,653 | $ | (5,748,503 | ) | $ | 43,980,590 | $ | (520,100 | ) | $ | 37,816,640 | |||||||||||
Net income
|
– | – | – | 1,669,716 | – | 1,669,716 | ||||||||||||||||||
Restricted stock issuance
|
31,815 | 318 | 69,682 | – | – | 70,000 | ||||||||||||||||||
Stock options exercised
|
2,000 | 20 | 3,280 | – | – | 3,300 | ||||||||||||||||||
Share based compensation expense
|
– | – | 97,041 | – | – | 97,041 | ||||||||||||||||||
Purchase of common stock
|
– | – | – | – | (479,914 | ) | (479,914 | ) | ||||||||||||||||
Balance, September 30, 2013
|
10,499,138 | $ | 104,991 | $ | (5,578,500 | ) | $ | 45,650,306 | $ | (1,000,014 | ) | $ | 39,176,783 | |||||||||||
Net loss
|
– | – | – | (6,857 | ) | – | (6,857 | ) | ||||||||||||||||
Restricted stock issuance
|
42,726 | 428 | 135,572 | – | – | 136,000 | ||||||||||||||||||
Share based compensation expense
|
– | – | 130,047 | – | – | 130,047 | ||||||||||||||||||
Balance, September 30, 2014
|
10,541,864 | $ | 105,419 | $ | (5,312,881 | ) | $ | 45,643,449 | $ | (1,000,014 | ) | $ | 39,435,973 | |||||||||||
Net income
|
– | – | – | 1,497,900 | – | 1,497,900 | ||||||||||||||||||
Restricted stock issuance
|
22,357 | 223 | 58,944 | – | – | 59,167 | ||||||||||||||||||
Share based compensation expense
|
– | – | 141,668 | – | – | 141,668 | ||||||||||||||||||
Balance, September 30, 2015
|
10,564,221 | $ | 105,642 | $ | (5,112,269 | ) | $ | 47,141,349 | $ | (1,000,014 | ) | $ | 41,134,708 |
Years ended September 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Operating Activities
|
||||||||||||
Net income (loss)
|
$ | 1,497,900 | $ | (6,857 | ) | $ | 1,669,716 | |||||
Net loss from discontinued operations
|
− | (666,046 | ) | (102,207 | ) | |||||||
Net income from continuing operations
|
1,497,900 | 659,189 | 1,771,923 | |||||||||
Adjustments to reconcile net income (loss) to net cash
|
||||||||||||
provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
408,703 | 360,279 | 276,356 | |||||||||
Amortization
|
825,805 | 481,722 | − | |||||||||
Allowance for doubtful accounts
|
50,000 | − | − | |||||||||
Provision for excess and obsolete inventories
|
600,000 | 601,351 | 600,000 | |||||||||
(Gain) loss on disposal of property and equipment
|
30,652 | − | (5,950 | ) | ||||||||
Deferred income tax benefit
|
(341,000 | ) | (276,000 | ) | (15,000 | ) | ||||||
Share based compensation expense
|
239,613 | 212,436 | 167,041 | |||||||||
Cash provided (used) by changes in operating assets
and liabilities:
|
||||||||||||
Accounts receivable
|
2,057,203 | (2,351,459 | ) | 195,733 | ||||||||
Income tax receivable\payable
|
342,596 | 38,686 | 137,547 | |||||||||
Inventories
|
(1,420,473 | ) | (2,188,205 | ) | 1,066,800 | |||||||
Prepaid expenses
|
(17,359 | ) | (14,753 | ) | 2,045 | |||||||
Other assets
|
(3,250 | ) | − | 2,350 | ||||||||
Accounts payable
|
(1,096,279 | ) | (78,670 | ) | 8,844 | |||||||
Accrued expenses
|
(330,544 | ) | 838,479 | (84,847 | ) | |||||||
Net cash provided by (used in) operating activities −
continuing operations
|
2,843,567 | (1,716,945 | ) | 4,122,842 | ||||||||
Net cash provided by (used in) operating activities −
discontinued operations
|
− | 280,462 | (16,365 | ) | ||||||||
Net cash provided by (used in) operating activities
|
2,843,567 | (1,436,483 | ) | 4,106,477 | ||||||||
Investing Activities
|
||||||||||||
Acquisition of net operating assets, net of cash acquired
|
− | (9,630,647 | ) | – | ||||||||
Guaranteed payments for acquisition of business
|
(1,000,000 | ) | − | − | ||||||||
Purchases of land and buildings
|
(56,074 | ) | − | − | ||||||||
Purchases of property and equipment
|
(116,575 | ) | (43,977 | ) | (211,223 | ) | ||||||
Proceeds from disposal of property and equipment
|
− | − | 12,350 | |||||||||
Net cash used in investing activities – continuing operations
|
(1,172,649 | ) | (9,674,624 | ) | (198,873 | ) | ||||||
Net cash provided by investing activities −
discontinued operations
|
− | 3,413,001 | − | |||||||||
Net cash used in investing activities
|
(1,172,649 | ) | (6,261,623 | ) | (198,873 | ) | ||||||
Financing Activities
|
||||||||||||
Proceeds on notes payable
|
− | 5,000,000 | − | |||||||||
Payments on notes payable
|
(846,029 | ) | (492,522 | ) | (184,008 | ) | ||||||
Purchase of treasury stock
|
− | − | (479,914 | ) | ||||||||
Proceeds from stock options exercised
|
− | − | 3,300 | |||||||||
Net cash provided by (used in) financing activities
|
(846,029 | ) | 4,507,478 | (660,622 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
824,889 | (3,190,628 | ) | 3,246,982 | ||||||||
Cash and cash equivalents at beginning of year
|
5,286,097 | 8,476,725 | 5,229,743 | |||||||||
Cash and cash equivalents at end of year
|
$ | 6,110,986 | $ | 5,286,097 | $ | 8,476,725 | ||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid for interest
|
$ | 245,051 | $ | 126,659 | $ | 26,137 | ||||||
Cash paid for income taxes
|
$ | 944,000 | $ | 62,000 | $ | 971,000 | ||||||
Supplemental noncash investing activities:
|
||||||||||||
Deferred guaranteed payments for acquisition of business
|
$ | − | $ | (2,744,338 | ) | $ | − |
·
|
Level 1 – Quoted prices for identical assets in active markets or liabilities that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
·
|
Level 2 – Inputs are other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.
|
·
|
Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value.
|
2015
|
2014
|
|||||||
New:
|
||||||||
Cable TV
|
$ | 16,255,487 | $ | 16,949,713 | ||||
Refurbished:
|
||||||||
Cable TV
|
3,676,132 | 3,982,140 | ||||||
Telco
|
6,426,005 | 4,005,298 | ||||||
Allowance for excess and obsolete inventory
|
(2,756,628 | ) | (2,156,628 | ) | ||||
$ | 23,600,996 | $ | 22,780,523 |
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||
Intangible assets:
|
||||||||||||
Customer relationships – 10 years
|
$ | 4,257,000 | $ | (674,023 | ) | $ | 3,582,977 | |||||
Technology – 7 years
|
1,303,000 | (294,725 | ) | 1,008,275 | ||||||||
Trade name – 10 years
|
1,293,000 | (204,724 | ) | 1,088,276 | ||||||||
Non-compete agreements – 3 years
|
254,000 | (134,055 | ) | 119,945 | ||||||||
Total intangible assets
|
$ | 7,107,000 | $ | (1,307,527 | ) | $ | 5,799,473 |
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||
Intangible assets:
|
||||||||||||
Customer relationships – 10 years
|
$ | 4,257,000 | $ | (248,325 | ) | $ | 4,008,675 | |||||
Technology – 7 years
|
1,303,000 | (108,583 | ) | 1,194,417 | ||||||||
Trade name – 10 years
|
1,293,000 | (75,425 | ) | 1,217,575 | ||||||||
Non-compete agreements – 3 years
|
254,000 | (49,389 | ) | 204,611 | ||||||||
Total intangible assets
|
$ | 7,107,000 | $ | (481,722 | ) | $ | 6,625,278 |
2016
|
$ | 825,810 | ||
2017
|
776,421 | |||
2018
|
741,143 | |||
2019
|
741,143 | |||
2020
|
741,143 | |||
Thereafter
|
1,973,813 | |||
Total
|
$ | 5,799,473 |
2015
|
2014
|
2013
|
||||||||||
Continuing operations:
|
||||||||||||
Current
|
$ | 1,114,000 | $ | 496,000 | $ | 1,113,351 | ||||||
Deferred
|
(341,000 | ) | (276,000 | ) | (15,000 | ) | ||||||
773,000 | 220,000 | 1,098,351 | ||||||||||
Discontinued operations – current
|
− | (385,000 | ) | (62,000 | ) | |||||||
Total provision (benefit) for income taxes
|
$ | 773,000 | $ | (165,000 | ) | $ | 1,036,351 |
2015
|
2014
|
2013
|
||||||||||
Statutory tax rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
State income taxes, net of U.S. federal tax benefit
|
2.1 | % | 5.7 | % | 4.3 | % | ||||||
Net operating loss
|
(4.0 | %) | (10.2 | %) | (3.1 | %) | ||||||
Return to accrual adjustment
|
(3.0 | %) | 1.0 | % | (2.4 | %) | ||||||
Additional state tax deduction for federal taxes
|
− | (5.6 | %) | − | ||||||||
Charges without tax benefit
|
1.6 | % | 3.9 | % | 1.1 | % | ||||||
Tax credits and other exclusions
|
3.3 | % | (3.8 | %) | 4.4 | % | ||||||
Company’s effective tax rate
|
34.0 | % | 25.0 | % | 38.3 | % |
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$ | 236,000 | $ | 335,000 | ||||
Accounts receivable
|
96,000 | 77,000 | ||||||
Inventory
|
1,319,000 | 1,066,000 | ||||||
Intangibles
|
215,000 | 79,000 | ||||||
Accrued expenses
|
266,000 | 141,000 | ||||||
Stock options
|
212,000 | 163,000 | ||||||
Other
|
28,000 | 16,000 | ||||||
2,372,000 | 1,877,000 | |||||||
Deferred tax liabilities:
|
||||||||
Financial basis in excess of tax basis of certain assets
|
832,000 | 728,000 | ||||||
Other
|
50,000 | − | ||||||
Net deferred tax asset
|
$ | 1,490,000 | $ | 1,149,000 |
2015
|
2014
|
|||||||
Deferred tax asset – current
|
$ | 1,776,000 | $ | 1,416,000 | ||||
Deferred tax liability – noncurrent
|
(286,000 | ) | (267,000 | ) | ||||
$ | 1,490,000 | $ | 1,149,000 |
2015
|
2014
|
|||||||
Employee costs
|
$ | 856,078 | $ | 1,089,754 | ||||
Nave Communications earn-out
|
290,455 | 356,513 | ||||||
Taxes other than income tax
|
116,442 | 191,316 | ||||||
Interest
|
16,085 | 18,563 | ||||||
Other, net
|
79,621 | 153,732 | ||||||
$ | 1,358,681 | $ | 1,809,878 |
2016
|
$ | 873,752 | ||
2017
|
899,870 | |||
2018
|
908,945 | |||
2019
|
2,143,417 | |||
2020
|
184,008 | |||
Thereafter
|
229,890 | |||
Total
|
$ | 5,239,882 |
Options
|
Weighted Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding at September 30, 2014
|
560,000 | $ | 2.96 | |||||||||
Granted
|
− | $ | – | |||||||||
Exercised
|
− | $ | – | $ | 0 | |||||||
Expired
|
(15,000 | ) | $ | 4.62 | ||||||||
Forfeited
|
(10,000 | ) | $ | 4.62 | ||||||||
Outstanding at September 30, 2015
|
535,000 | $ | 2.88 | $ | 0 | |||||||
Exercisable at September 30, 2015
|
301,667 | $ | 2.88 | $ | 0 |
Exercisable
|
Remaining
|
||
Stock Options
|
Stock Options
|
Contractual
|
|
Exercise Price
|
Outstanding
|
Outstanding
|
Life
|
$3.210
|
200,000
|
66,667
|
8.5 years
|
$2.450
|
250,000
|
150,000
|
6.5 years
|
$3.001
|
65,000
|
65,000
|
2.9 years
|
$3.450
|
10,000
|
10,000
|
1.4 years
|
$5.780
|
10,000
|
10,000
|
0.4 years
|
535,000
|
301,667
|
2014
|
2013
|
|||||||
Estimated fair value of options at grant date
|
$ | 244,400 | $ | 29,040 | ||||
Black-Scholes model assumptions:
|
||||||||
Average expected life (years)
|
6 | 6 | ||||||
Average expected volatile factor
|
34 | % | 41 | % | ||||
Average risk-free interest rate
|
2.79 | % | 2.95 | % | ||||
Average expected dividends yield
|
– | – |
2015
|
2014
|
2013
|
||||||||||
Fiscal year 2012 grant
|
$ | 33,044 | $ | 55,369 | $ | 95,560 | ||||||
Fiscal year 2013 grant
|
− | − | 1,481 | |||||||||
Fiscal year 2014 grant
|
108,624 | 74,678 | – | |||||||||
Total compensation expense
|
$ | 141,668 | $ | 130,047 | $ | 97,041 |
2015
|
2014
|
2013
|
||||||||||
Fiscal year 2012 grant
|
$ | − | $ | – | $ | 29,167 | ||||||
Fiscal year 2013 grant
|
− | 29,167 | 40,833 | |||||||||
Fiscal year 2014 grant
|
58,778 | 53,222 | − | |||||||||
Fiscal year 2015 grant
|
39,167 | − | – | |||||||||
$ | 97,945 | $ | 82,389 | $ | 70,000 |
2015
|
2014
|
2013
|
||||||||||
Income from continuing operations
|
$ | 1,497,900 | $ | 659,189 | $ | 1,771,923 | ||||||
Discontinued operations, net of tax
|
− | (666,046 | ) | (102,207 | ) | |||||||
Net income (loss) attributable to common shareholders
|
$ | 1,497,900 | $ | (6,857 | ) | $ | 1,669,716 | |||||
Basic weighted average shares
|
10,055,052 | 10,021,431 | 10,052,359 | |||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options
|
− | 28,009 | – | |||||||||
Diluted weighted average shares
|
10,055,052 | 10,049,440 | 10,052,359 | |||||||||
Earnings (loss) per common share:
|
||||||||||||
Basic
|
||||||||||||
Continuing operations
|
$ | 0.15 | $ | 0.07 | $ | 0.18 | ||||||
Discontinued operations
|
− | (0.07 | ) | (0.01 | ) | |||||||
Net income (loss)
|
$ | 0.15 | $ | (0.00 | ) | $ | 0.17 | |||||
Diluted
|
||||||||||||
Continuing operations
|
$ | 0.15 | $ | 0.07 | $ | 0.18 | ||||||
Discontinued operations
|
− | (0.07 | ) | (0.01 | ) | |||||||
Net income (loss)
|
$ | 0.15 | $ | (0.00 | ) | $ | 0.17 |
2015
|
2014
|
2013
|
||||||||||
Stock options excluded
|
535,000 | 310,000 | 363,000 | |||||||||
Weighted average exercise price of
|
||||||||||||
stock options
|
$ | 2.88 | $ | 3.37 | $ | 2.83 | ||||||
Average market price of common stock
|
$ | 2.38 | $ | 2.76 | $ | 2.24 |
2016
|
$ | 568,126 | ||
2017
|
576,408 | |||
2018
|
568,744 | |||
2019
|
540,868 | |||
2020
|
554,390 | |||
Thereafter
|
1,847,632 | |||
Total
|
$ | 4,656,168 |
Fiscal Years Ended
|
||||||||||||
September 30,
2015
|
September 30,
2014
|
September 30,
2013
|
||||||||||
Sales
|
||||||||||||
Cable TV
|
$ | 25,396,779 | $ | 27,206,743 | $ | 28,677,351 | ||||||
Telco
|
18,835,116 | 8,710,267 | − | |||||||||
Intersegment
|
(498,275 | ) | (28,318 | ) | − | |||||||
Total sales
|
$ | 43,733,620 | $ | 35,888,692 | $ | 28,677,351 | ||||||
Gross profit
|
||||||||||||
Cable TV
|
$ | 8,025,651 | $ | 7,770,723 | $ | 8,709,317 | ||||||
Telco
|
7,273,238 | 3,834,733 | − | |||||||||
Total gross profit
|
$ | 15,298,889 | $ | 11,605,456 | $ | 8,709,317 | ||||||
Operating income (loss)
|
||||||||||||
Cable TV
|
$ | 2,210,414 | $ | 1,492,100 | $ | 2,896,254 | ||||||
Telco
|
365,796 | (395,001 | ) | − | ||||||||
Total operating income (loss)
|
$ | 2,576,210 | $ | 1,097,099 | $ | 2,896,254 | ||||||
Segment assets
|
||||||||||||
Cable TV
|
$ | 26,494,430 | $ | 29,241,335 | $ | 27,582,573 | ||||||
Telco
|
17,094,713 | 17,781,114 | − | |||||||||
Non-allocated (A)
|
8,383,913 | 6,383,232 | 15,533,547 | |||||||||
Total assets
|
$ | 51,973,056 | $ | 53,405,681 | $ | 43,116,120 |
(A)
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Fiscal year ended 2015
|
||||||||||||||||
Sales
|
$ | 10,837,158 | $ | 11,366,539 | $ | 11,902,391 | $ | 9,627,532 | ||||||||
Gross profit
|
$ | 3,831,803 | $ | 4,243,512 | $ | 4,144,607 | $ | 3,078,967 | ||||||||
Income from continuing
operations
|
$ | 415,923 | $ | 234,255 | $ | 637,134 | $ | 210,588 | ||||||||
Basic earnings from
continuing operations per
common share
|
$ | 0.04 | $ | 0.02 | $ | 0.06 | $ | 0.02 | ||||||||
Diluted earnings from
continuing operations per
common share
|
$ | 0.04 | $ | 0.02 | $ | 0.06 | $ | 0.02 | ||||||||
Fiscal year ended 2014
|
||||||||||||||||
Sales
|
$ | 6,119,733 | $ | 8,313,815 | $ | 9,323,158 | $ | 12,131,986 | ||||||||
Gross profit
|
$ | 1,863,227 | $ | 2,231,167 | $ | 3,220,055 | $ | 4,291,007 | ||||||||
Income (loss) from continuing
operations
|
$ | 139,369 | $ | (243,264 | ) | $ | 143,726 | $ | 619,358 | |||||||
Basic earnings (loss) from
continuing operations per
common share
|
$ | 0.01 | $ | (0.02 | ) | $ | 0.01 | $ | 0.06 | |||||||
Diluted earnings (loss) from
continuing operations per
common share
|
$ | 0.01 | $ | (0.02 | ) | $ | 0.01 | $ | 0.06 | |||||||
Fiscal year ended 2013
|
||||||||||||||||
Sales
|
$ | 7,899,497 | $ | 6,764,102 | $ | 6,372,108 | $ | 7,641,644 | ||||||||
Gross profit
|
$ | 2,618,724 | $ | 1,866,352 | $ | 1,851,855 | $ | 2,372,386 | ||||||||
Income from continuing
operations
|
$ | 660,291 | $ | 292,994 | $ | 269,984 | $ | 548,654 | ||||||||
Basic earnings from
continuing operations per
common share
|
$ | 0.07 | $ | 0.03 | $ | 0.03 | $ | 0.05 | ||||||||
Diluted earnings from
continuing operations per
common share
|
$ | 0.07 | $ | 0.03 | $ | 0.03 | $ | 0.05 |
|
2.
|
The following financial statement Schedule II – Valuation and Qualifying Accounts for the years ended September 30, 2015, 2014 and 2013 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, 2015
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 200,000 | 44,514 | − | 5,486 | $ | 250,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory
|
$ | 2,156,628 | 600,000 | − | − | $ | 2,756,628 | |||||||||||||
Year Ended September 30, 2014
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 300,000 | – | (103,403 | ) | 3,403 | $ | 200,000 | ||||||||||||
Allowance for Excess and Obsolete Inventory
|
$ | 1,600,000 | 601,351 | (208,056 | ) | 163,333 | $ | 2,156,628 | ||||||||||||
Year Ended September 30, 2013
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 300,000 | – | (5,692 | ) | 5,692 | $ | 300,000 | ||||||||||||
Allowance for Excess and Obsolete Inventory
|
$ | 1,000,000 | 600,000 | – | – | $ | 1,600,000 |
|
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 (File No. 033-39902-FW).
|
|
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 (File No. 001-10799).
|
|
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 (File No. 033-39902-FW).
|
|
10.1
|
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 (File No. 001-10799).
|
|
10.2
|
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 (File No. 001-10799).
|
|
10.3
|
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 (File No. 001-10799).
|
|
10.4
|
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 (File No. 001-10799).
|
|
10.5
|
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 (File No. 001-10799).
|
|
10.6
|
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 (File No. 001-10799).
|
|
10.7
|
Change in Control Agreement dated April 2, 2012 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 (File No. 001-10799).
|
|
10.8
|
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 (File No. 001-10799).
|
|
10.9
|
Amendment Two to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2012, incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 11, 2012 (File No. 001-10799).
|
|
10.10
|
Amendment Three to Amended and Restated Revolving Credit and Term Loan Agreement dated November 29, 2013, incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K/A filed with the Securities and Exchange Commission on December 13, 2013 (File No. 001-10799).
|
|
10.11
|
Amendment Four to Amended and Restated Revolving Credit and Term Loan Agreement dated March 3, 2014, incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 14, 2014 (File No. 001-10799).
|
|
10.12
|
Amendment Five to Amended and Restated Revolving Credit and Term Loan Agreement dated November 28, 2014, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 9, 2014 (File No. 001-10799).
|
|
10.13
|
The ADDvantage Technologies Group, Inc. 2015 Incentive Stock Plan, incorporated by reference to the Company's Form DEF 14A filed with the Securities and Exchange Commission on January 23, 2015 (File No. 001-10799).
|
|
10.14
|
Amendment Six to Amended and Restated Revolving Credit and Term Loan Agreement dated November 27, 2015.
|
|
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 (File No. 033-39902-FW).
|
|
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 (File No. 001-10799).
|
|
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 (File No. 033-39902-FW).
|
|
10.1
|
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 (File No. 001-10799).
|
|
10.2
|
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 (File No. 001-10799).
|
|
10.3
|
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 (File No. 001-10799).
|
|
10.4
|
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 (File No. 001-10799).
|
|
10.5
|
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 (File No. 001-10799).
|
|
10.6
|
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 (File No. 001-10799).
|
|
10.7
|
Change in Control Agreement dated April 2, 2012 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 (File No. 001-10799).
|
|
10.8
|
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 (File No. 001-10799).
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10.9
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Amendment Two to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2012, incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 11, 2012 (File No. 001-10799).
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10.10
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Amendment Three to Amended and Restated Revolving Credit and Term Loan Agreement dated November 29, 2013, incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K/A filed with the Securities and Exchange Commission on December 13, 2013 (File No. 001-10799).
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10.11
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Amendment Four to Amended and Restated Revolving Credit and Term Loan Agreement dated March 3, 2014, incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 14, 2014 (File No. 001-10799).
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10.12
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Amendment Five to Amended and Restated Revolving Credit and Term Loan Agreement dated November 28, 2014, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 9, 2014 (File No. 001-10799).
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10.13
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The ADDvantage Technologies Group, Inc. 2015 Incentive Stock Plan, incorporated by reference to the Company's Form DEF 14A filed with the Securities and Exchange Commission on January 23, 2015 (File No. 001-10799).
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10.14
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Amendment Six to Amended and Restated Revolving Credit and Term Loan Agreement dated November 27, 2015.
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21.1
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Listing of the Company's subsidiaries.
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23.1
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Consent of HoganTaylor LLP.
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase.
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Scott A. Francis, Vice President, Chief Financial Officer and Chief Accounting Officer
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Scott A. Francis, Vice President, Chief Financial Officer and Chief Accounting Officer
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1.
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I have reviewed this annual report on Form 10-K of ADDvantage Technologies Group, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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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
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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
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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(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
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|