In a remarkable turn of events on Tuesday, the stock of ADDvantage Technologies Group Inc, a prominent communications infrastructure services and equipment provider, experienced a significant uptick, surging by over 43%. This surge follows the company’s recent implementation of a one-for-10 (1:10) reverse stock split on November 16, 2023, designed to ensure compliance with the NASDAQ Capital Market’s minimum bid price requirement.
At the time of this publication, ADDvantage Technologies Group Inc stock (AEY) has witnessed a surge.
ADDvantage Technologies Group Inc
Current Price: $3.71
Change : +1.13
Change (%): (43.80%)
Volume: 76.2K
Source: Tomorrow Events Market Data
The Reverse Stock Split, as mandated by Nasdaq Listing Rule 5550(a)(2), reduced the number of issued and outstanding shares of the company’s common stock from 14,947,078 to 1,494,707 shares, with each share now valued at a higher price. Notably, the reverse split did not alter the total number of authorized shares of Common Stock.
This strategic move aimed to align ADDvantage Technologies Group with the $1.00 minimum bid price required for continued listing on the NASDAQ Capital Market. Investors responded positively to the company’s efforts to strengthen its position in the market, contributing to the notable surge in the stock price.
Before the reverse stock split, on November 14, ADDvantage Technologies Group released its financial results for the three and nine months ending September 30, 2023, providing insights into the third quarter of 2023.
The financial report revealed that third-quarter sales amounted to $10.3 million, reflecting a 60% decrease of $15.6 million compared to the same period last year, primarily attributed to a decline of $11.4 million in Telco revenue and a $4.2 million decrease in Wireless revenue.
Gross profit for the quarter stood at $2.8 million, equating to a 27% gross margin, down from $8.5 million and a 33.0% gross margin in the corresponding period last year. Operating expenses experienced a notable decrease of $0.6 million, or 27%, totaling $1.7 million, a result of the company’s previously announced cost-reduction initiatives.
Consolidated selling, general, and administrative (“SG&A”) expenses, encompassing overhead costs such as personnel, insurance, professional services, communication, and other categories, decreased by $1.4 million or 31%, amounting to $3.1 million for the three months ending September 30, 2023, in comparison to $4.5 million during the same period last year.
However, despite the cost-reduction measures, ADDvantage Technologies Group reported a net loss of $2.7 million, or $0.19 per basic and diluted share, for the third quarter of 2023, contrasting with a net income of $1.5 million, or $0.11 per basic and diluted share, for the same quarter in the previous year.
As of September 30, 2023, the company held cash and cash equivalents totaling $1.6 million, down from $2.6 million at December 31, 2022. Outstanding debt as of September 30, 2023, amounted to $3.6 million.
The company’s management remains optimistic about the strategic initiatives in place and is committed to navigating the dynamic market landscape, leveraging the reverse stock split as a step towards reinforcing its position in the industry. Investors continue to closely monitor ADDvantage Technologies Group as it adapts to market challenges and pursues growth opportunities.
