Wayside Technology Group, Inc. Reports 2010 Third Quarter Results and Declares Quarterly Dividend

Revenue: $53.0 Million, up 50% Year-Over-Year; Income From Operations $2.0 Million, up 105% Year-Over-Year; $.16 Quarterly Dividend Declared, a 7% Increase

SHREWSBURY, NJ -- (MARKET WIRE) -- 10/28/10 -- Wayside Technology Group, Inc. (NASDAQ: WSTG) today reported financial results for the third quarter ended September 30, 2010. The results will be discussed in a conference call to be held on Friday, October 29, 2010 at 10:00 AM Eastern time. The dial-in telephone number is (866) 835 8907 and the pass code is "WSTG."

This conference call will be available via live webcast -- in listen-mode only -- at www.earnings.com. A replay will also be available on the company's website at www.waysidetechnology.com.

Cash and marketable securities amount to $14.2 million, representing 55% of equity as of September 30, 2010.

Net sales for the third quarter of 2010 increased 50% or $17.7 million to $53.0 million compared to $35.3 million for the same period in 2009. Total sales for the third quarter of 2010 for our Lifeboat segment were $38.4 million compared to $23.8 million in the third quarter of 2009, representing a 61% increase. Total sales for the third quarter of 2010 for our Programmer's Paradise segment were $14.6 million compared to $11.5 million in the third quarter of 2009, representing a 27% increase.

"The third quarter of 2010 was a record quarter for us," said Simon F. Nynens, Chairman and Chief Executive Officer. "Our continued high growth rate shows that our customers are exceedingly satisfied with our service model, as we continue to expand our offerings to our valued customers."

Sales for both segments showed strong growth. The increase in net sales for the three and nine months ended September 30, 2010 compared to the same periods in 2009, was mainly a result of our continued focus on the expanding virtual infrastructure-centric business, the addition of several key product lines, and the strengthening of our account penetration.

Gross Profit for the quarter ended September 30, 2010 was $5.1 million compared to $3.7 million for the third quarter of 2009, a 39% increase. Total gross profit for our Lifeboat segment was $3.4 million compared to $2.3 million in the third quarter of 2009, representing a 47% increase. This increase in gross profit was due to aggressive sales volume growth within our Lifeboat segment. Total gross profit for our Programmer's Paradise segment was $1.7 million compared to $1.4 million in the third quarter of 2009, representing a 25% increase. This increase was primarily due to the increased sales volume.

Total gross profit, as a percentage of net sales, for the third quarter of 2010 was 9.7%, compared to 10.5% in the third quarter of 2009.

The increase in gross profit dollars and the decrease in gross profit margin as a percentage of net sales was primarily caused by the aggressive sales growth within our Lifeboat segment, competitive pricing pressure in both segments, and also in part by our having won several large bids based on aggressive pricing, which we plan to continue to do.

Total selling, general, and administrative ("SG&A") expenses for the third quarter of 2010 were $3.2 million, compared to $2.7 million in the third quarter of 2009. This increase is mainly due to an increase in employee related expenses (salaries, commissions, bonus accruals and benefits) of $0.4 million.

On October 26, 2010, the Board of Directors declared a quarterly dividend of $.16 per share of its common stock payable November 19, 2010 to shareholders of record on November 9, 2010. This represents a 7% increase in dividend, from $.15 per share to $.16 per share.

About Wayside Technology Group, Inc.

Wayside Technology Group, Inc. (NASDAQ: WSTG) was founded in 1982 and is a unified and integrated technology company providing products and solutions for corporate resellers, VARs, and developers, as well as business, government and educational entities. The company offers technology products from software publishers and manufacturers such as Acronis, CA, DataCore, Dell, Flexera Software (publishers of InstallShield), GFI, Hewlett Packard, Infragistics, Intel Software, Microsoft, Mindjet, Quest Software, SolarWinds, StorageCraft Technology, TechSmith, Veeam, Vizioncore, and VMware.

Additional information can be found by visiting www.waysidetechnology.com.

The statements in this release concerning the Company's future prospects are forward-looking statements that involve certain risks and uncertainties. Such risks and uncertainties could cause actual results to differ materially from those indicated by such forward-looking statements, and include, without limitation, the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, product mix, market conditions, contribution of key vendor relationships and support programs, as well as factors that affect the software industry in general and other factors. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in our filings with the Securities and Exchange Commission. Except as otherwise required by law, the Company undertakes no obligation to update or revise these forward-looking statements.

                             - Tables Follow -



              WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
            (In thousands, except share and per share amounts)

                                                September 30,  December 31,
                                                    2010          2009
                                                ------------  ------------
                                                (unaudited)
                     ASSETS
Current assets
  Cash and cash equivalents                     $      7,705  $      8,560
  Marketable securities                                6,524         7,571
  Accounts receivable, net                            36,385        27,040
  Inventory - finished goods                           1,186           967
  Prepaid expenses and other current assets            1,156           998
  Deferred income taxes                                  564           677
                                                ------------  ------------
Total current assets                                  53,520        45,813

Equipment and leasehold improvements, net                596           432
Accounts receivable long-term                          4,737         6,901
Other assets                                              38            38
Deferred income taxes                                    241           483
                                                ------------  ------------
Total assets                                    $     59,132  $     53,667
                                                ============  ============

     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable and accrued expenses               33,241        29,230
  Current portion- capital lease obligation               82             -
                                                ------------  ------------
Total current liabilities                             33,323        29,230

Long Term portion- capital lease obligation              159             -
Other liabilities                                          -            78
                                                ------------  ------------
Total liabilities                                     33,482        29,308
                                                ------------  ------------
Commitments and contingencies

Stockholders' equity
  Common stock, $.01 par value; 10,000,000 shares
   authorized, 5,284,500 shares issued, and
   4,780,598 and 4,688,844 shares outstanding,
   respectively                                           53            53
  Additional paid-in capital                          25,145        24,826
  Treasury stock, at cost, 503,902 and 595,656
   shares, respectively                               (3,458)       (3,555)
  Retained earnings                                    3,534         2,727
  Accumulated other comprehensive income                 376           308
                                                ------------  ------------
Total stockholders' equity                            25,650        24,359
                                                ------------  ------------
Total liabilities and stockholders' equity      $     59,132  $     53,667
                                                ============  ============





              WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                  (In thousands, except per share data)

                                     Nine months ended   Three months ended
                                       September 30,       September 30,
                                      2010      2009      2010      2009
                                    --------- --------  --------- ---------
                                        (Unaudited)        (Unaudited)
                                    ------------------  -------------------
Revenues
  Lifeboat segment                  $ 103,338 $ 69,131  $  38,411 $  23,844
  Programmer's Paradise segment        38,456   34,961     14,583    11,466
                                    --------- --------  --------- ---------
  Total Revenue                       141,794  104,092     52,994    35,310

Cost of sales
  Lifeboat segment                     93,910   62,268     34,980    21,511
  Programmer's Paradise segment        34,097   30,582     12,880    10,105
                                    --------- --------  --------- ---------
  Total Cost of sales                 128,007   92,850     47,860    31,616
                                    --------- --------  --------- ---------

Gross Profit                           13,787   11,242      5,134     3,694

Operating expenses
  Selling costs                         4,856    3,999      1,656     1,289
  Stock based compensation                892      657        296       236
  Other general and administrative
   expenses                             3,623    3,647      1,229     1,216
                                    --------- --------  --------- ---------
Total Selling, general and
 administrative expenses                9,371    8,303      3,181     2,741
                                    --------- --------  --------- ---------

Income from operations                  4,416    2,939      1,953       953

Interest income, net                      316      403        104       128
Realized foreign exchange gain
 (loss)                                     3       (1)         -         -
                                    --------- --------  --------- ---------
Income before income tax provision      4,735    3,341      2,057     1,081
Provision for income taxes              1,800    1,374        800       483

                                    --------- --------  --------- ---------
Net income                          $   2,935 $  1,967  $   1,257 $     598
                                    ========= ========  ========= =========

Net income per common share - Basic $    0.67 $   0.45  $    0.29 $    0.14
                                    ========= ========  ========= =========
Net income per common share -
 Diluted                            $    0.66 $   0.44  $    0.28 $    0.13
                                    ========= ========  ========= =========

Weighted average common shares
 outstanding - Basic                    4,380    4,400      4,389     4,415
                                    ========= ========  ========= =========
Weighted average common shares
 outstanding - Diluted                  4,475    4,427      4,502     4,444
                                    ========= ========  ========= =========