WSTG - Earnings call transcript Q3 2017 | Climb Global Solutions, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Wayside Technology Group Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that all callers are limited to one question each. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded. to host like Melanie today's now Caponigro. would introduce for your conference, I Ms. begin. you Caponigro, may

Melanie Caponigro

and you Quarter Call. Third Welcome XXXX Thank morning. Earnings good to Wayside Technology's

turning a at of also any call. cautionary language and Forms greater and the comments about Simon I and that Before for call dispense earnings will detailed and over October this for XX-K. and live webcast and time-sensitive earnings will customary statements. and Chairman no released CEO, Nynens, discussed the Forms accurate uncertainties our with Inc. is the rebroadcast call update our the We update obligation A Company's be to Technology waysidetechnology.com. release risks today, www.waysidetechnology.com/site/content/webcast. This Investor information to at in to of Thursday, questions is October forward-looking The at earnings contain Time, webcast Relations all available are X:XX Company’s XX, XX, conference the Wayside Eastern as is call, intend PM approximately only XXXX. at in associated and detail third Group, being quarter does available including webcast not sees Today’s website in XXXX. discussion answers, the XX-Q

call over Now I like Simon to turn Nynens. would to the

Simon Nynens

On increased good share Despite X%. year-to-date $X.XX for we basis delivered to share QX. up or Thank per morning satisfactory a to $X.XX you, per share intense are $X.XX Melanie, for results and our X% Net and everyone. market quarter. the earnings per competition, earnings sales per share increased

the in gross represented XX% division segment and third income LIBOR of quarter. our margin Our XX% of

behalf effective of Bill amount like XX, would of from XXXX. to will announced of receivables intention current team. of Botti to on during Wayside position our to Vice his prepayments XX% continue Bill tenure contributions member share and team other Our for his to I $XX.X as I’d the President and like the thank he his Group year Executive long-term also thank as million in his his December great members, transitions till end his retire who and role equity. a cash, Bill our to responsibilities or as Technology

Now over I’d Bill? like hand to Bill. it to

Bill Botti

ended segment XX, compared compared ended to million September to compared payment customers. quarter-to-quarter based increased Net $XXX period $X.X ended September due quarter for period $X.X Lifeboat X% increased to typically same in extended as decreased sales, sales XXXX, a September million term quarter to million the for quarter ended compared to for profit quarter for September larger Gross ended percentage last by upon million $X.X of ended same to XX, same the the for X.X% which XXXX. to in IT-spending our XX.X% million prior to XX, vary the to XXXX for XX, $X.X $X.X by the the XX% for XXXX, of profit compared the period million. million significantly transactions, profit $XXX $X.X XXXX. X.X to XXXX, XXXX, for you, XXXX, XX, which gross the with September same $X.X million XXXX, XXXX. quarter a XXXX TechXtend net is year. segment timing for the profit Distribution quarter TechXtend gross X.X% profit X.X XXXX. period X% decreased points $XX to XXXX margin for segment ended to at the to decline points same the for decisions XX% period decreased from percentage for Gross compared margin the points X% compared in $XXX the for in same XXXX. profit Lifeboat net gross September period quarter compared Simon. ended net to by XX, percentage quarter X.X% XX% quarter X.X the segment same period Distribution the was XX, in million million segment for September year segment for TechXtend sales and September for to XXXX, third the gross in to XX, Thank to million decreased the increased in margin, Lifeboat consistent profit XXXX Distribution percentage sales in XX% XXXX. decreased the gross

in margin within margin We market. distribution the very companies our we Lifeboat points gross from This the in pressure face reflected business. the large X.X continue compete is the profit to in

and excited we growth future be to to portfolio product continue about build as help our targets. expenses We our our manage our achieve

for leadership my we've have announced this growth. working that of As Directors, high end Brian Lifeboat in in Kevin their our I enjoyed you. very I've to Back been the early, Simon continued and confident the for Simon. Board team running year. Simon, retirement their Thank of teams. I'm Lifeboat for of Leadership with planned at operations year, this you, expectations on in very TechXtend the have I TechXtend put and Both Wayside for stated and staff the the effect have and place Gilbertson of sales businesses in for Askew. most our much

Simon Nynens

financial on will Vesey Mike? the now Mike you. Thank numbers. report

Michael Vesey

modest expenses a sales reflecting and the rate decreased as to increase growth for due of last $X.X percentage expenses the fees. the operating to from mainly relation some sales Simon. X% expenses SG&A X.X% Total support balance our was last increased The period growth. of net highlights. to to compared SG&A million. expenses in year, same personnel-related expenses for X.X% Thanks, in approximately quarter increase to period year review the and I'll professional sheet a our same to

outstanding. income in million noted, compared diluted shares of last Simon per due from net earnings slightly a lower slightly share and was $X.X quarter down while third Bill $X.X the prior third As for year year, million the to to number increased at quarter the

this earnings or restricted our prior should net shares a unvested these our have under share. which we granted participating common right before securities, common compensation During two-class and as income plan that stocks and determined securities participating per our method, method, distributed quarter, Under using stock per the the is non-forfeitable to undistributed treats between be vesting. earnings securities because shares the calculating calculating we allocated to share dividends

the While The noted not to be two the comparing merely will restricted the more earnings methods. XX-Q. this than net the method, is adjustments that we equivalents reported and restated comparable do stock. two-class that same as information in our table the should earnings the $X.XX outstanding fully detail the was by consider method and also per and prior a we be our so quarter year share prior restate under to And per year-to-date no per is of material, of in amounts diluted there A is that the release other count since share there the earnings participating to the no third under in a diluted recalculation calculation. X.X% the release, basic historical provide itself. diluted of restating calculation common It stock other amounts are previously or It's of in on share basis. same included impact impact did we'll this earnings income part note and the was you $X.XX share earnings change Basic shares decrease is about XXXX or by X.X%.

last income period diluted quarter income repurchases shares decreased lower relatively and X% quarter months. was from the increased on outstanding same $X.XX the $X.X same we resulting X% the the diluted in share comparable average net diluted So $X.XX basis, repurchases. compared million. flat outstanding up restated share earnings year. Weighted On for a the reflecting X%, XX net about from year, our average per per about share to to the last shares at year-over-year made over year-to-date basis, And share our weighted is past a reflecting

at and Cash the sheet. end the equivalents of balance $XX.X cash for to the year million our the to on end at was compared million of quarter XXXX. $X.X Moving

note with end some our quarter that quarter. at of our revolving to million capital we outstanding the this You facility utilized will needs, the $X credit fund of working also

cash be of our for higher-than-average was impact primarily collected The payment increased of of approximately outflow by of $X themselves sales in driven periods, the prepayment stock as is the and in was while out returned XXXX. products level The capital new-vendor of through proceeds part of to result cash investors related the in investment to extended in of will paid a made -- increased future common $X.X the million that million working capital a vendor resulting net over dividends year-to-date. of sales repurchase XXXX. agreement, quarter were use and Our QX QX an sales working and XXXX, a first in the

common shares and utilized dividends, purchase During paid our stock. the balance XX,XXX $XXX,XXX we in our to approximately cash $XXX,XXX quarter, about of of

million of end the equity year, million cash, XX, $XX.X stood at of million stockholders' including $XX.X $XX.X last at $XX at working last compared September the was and capital, As XXXX, to of end year. total compared million to

receivables at to Additionally, our end one year $XX.X XX, million record to growth On XXXX. on $X.XX of November available utilize term and in we cash the continue plan extended We due after $XX.X had liquidity XXXX. about million compared of to business. on in dividend of to XX, shareholders the share, our November October declared invest per of XXXX, a of XX Board payable the Directors to

Simon. it turn to Now I'll back over

Simon Nynens

their for our work thank the I want session. dedication hard of Mike. success Operator, for our members Q&A and team can company. all you, Thank we the now start to of

Operator

Instructions] of from comes our first Schaefer. question [Operator Sam And line the

now line Your open. is

Unidentified Analyst

you today Thank questions for guys. Hi. taking for

Bill Botti

You’re welcome.

Unidentified Analyst

the to appreciate years. past like congratulate Bill, [Indiscernible]… given help I us I'd on you've your the for Thank retirement. the that you you over really few

Bill Botti

much. very you Thank

Unidentified Analyst

quarters, has to growth includes for being and the moving -- employees is put been in declining his to leaving, going continue the except that can role the internally, With margin. -- it where the the With flattened about consistently, line to seems forward? Lifeboat that Bill top to how past on we growing see Lifeboat pretty are four how said, be have

Bill Botti

Gilbertson we Well, just and in of Manager Brian role VP in timing, General the June XXXX. of way by put of

operations we are has go growth necessarily Brian but to forward. and continuing re-architecting, tuning, driving we're top not he took over prepare continued these organization go And the driving but to we and been the right? the are seeing as as cycles, forward, through sales been we margin so grow that the ourselves pressure for force tuning line, that has as So for

mentor Askew, of along has vendor and much been Kevin year, this and customer my relationships. the to role During help with him

decision-making day-to-day So in the place. already has been

ties. because a in So when Virtualization has if P&L like transition, segment, and consider had be a the we've and at very managing smooth background, was running Brian's you've did very internally an -- to the business ECS customer $XXX a vendor release, he strong checked we what it I Arrow million

that stated, I as we're in feel, hands. I very So good

Unidentified Analyst

additional answers forward? and historic really That possible bit, is what close hopefully Okay. there to to the They're as X%, need a the even moving hiccup that it do to internally And get to evolves. does little is that no the color and dropped have company to seems back margins?

Bill Botti

Yes, to -- purchase. It several get go it to factors the is. requires

New community. That is we vendor that higher margins and critical of the to new into come market component a acquisitions help cornerstone. a that VAR introduced is them technologies as have our

a retaining. talked And things either the expand you that a engaged model are everything doing. bigger we're great a going challenged of dilutive that revenue if with distribution their we're their overly line if we've accelerating to X%, really looking of to are a our big to while even that's lot we It's it's or of will. margins volumes, One actually from, the and/or have small revenue, they add were only else what we X% vendors percentage or

to X%, somebody times how had being at detail, revenue, takes could get on -- four I bring So number. focus if understand higher it's without And at look -- as I look X% vendors large much so revenue are at to margin along the somebody of retain in lower from on vendor for up of gone it products difficult at to customer we same volume our yet of color with I course, we customer some ramp, changing GP the our to get of key vendors changes who you flat. model. stream made but two X% to the X%, to we accelerate on into going we're purchases that over to cautious from their In the years, so very because declining have margins overall we've margin, and and new and and we've X% when

good fighting understand and making progress. swords the here So flat But I we're line concern. out and with it everyday shields,

Unidentified Analyst

me. more then just And question Okay. one lastly, from

half, a and year the past balance the sheet Over changed. has really

You're go to million seeing from $X $XX cash under about just million.

don't the in million moving think past. seen which should we've as In think we forward in I the addition, How the use cash about seen $X analysts? of revolver, we've draw

Simon Nynens

Yes.

What first address look just $X vendor as want also is we cash portion the million. cash I a cash internally we've to we the is So bank, prepaid. weak The that as prepayment in of state cash the that. that at to --

of So prepayment. started that's million, the about $X on a million $X.X that out just got we

utilize -- we at internally, look as part services. to busy has excess third quarter, in And with the in Vesey third-party deals to bank used So that. of addition, exploring And Mike that contracts cash long-term our very this long-term outside we're to our using cash. our these of changing company finance the we've those deals. with been

well the core see the deals these on quarters, to not financing core our use that but have large deals business. as of as impact business I we you that As stress TechXtend by these outside business financing our the Lifeboat to way want and it's grow the cash TechXtend's

accounts In business, the have that we and due large fact the the we finance in the within to profit that that make fact, a core the over year receivable of communicate gone year-to-date correctly, then you are see a receivable, a up. these due payments outside deals. And short-term TechXtend's we that payments It's has are have that that that that and is gross see on year. sure you long-term, business accounts

internally that look cash. we at as of All

of repurchases, of the we -- our the at dividend payments use expect terms portion over year also by go cash, and cash to in down -- we the look share own to winding we are we so the So expect up. next way, and the at you

to $X For large receivables, expected about the million, instance, I are think, think payment million. those payments in QX, for deals long-term I be, $X.X

Michael Vesey

Yes.

Simon Nynens

Correct. Yes?

look looking at the cash and we how to numbers. that sure I want at that's So same make just all are we

three those $XX.X cash add the receivable you long-term, to get portion and If up, prepaid cash accounts itself, you the the million.

Unidentified Analyst

vendor? this a this that the one that And something is forward? companies prepay, to And that kind expect [Indiscernible]? is moving of should vendor one-time is see benefit Or we

Bill Botti

upon and do taken that keep things, pay a one-time this and it's this typically advantage We we've buy Yes, in inventory benefit little the to very, of And rate, typically, that maybe but maintain XX-day any we simply but of we XX prepay don't to We vendor, particular inventory. for very tightly. manage we run degree. again, a process. a stronger, just quarter based

through is several this pull opportunity expect here one-time say next I'd a So and we the to months. in that

Unidentified Analyst

very Okay, the luck great. in Thank future. you much. And good

Bill Botti

Thank you.

Operator

And any are there Please remarks. Instructions]. time, with continue no at further this closing [Operator questions.

Simon Nynens

and the look for we Thank February in interest year-end you. their thank of beginning forward everyone reporting to company. We And results at our XXXX. our

Operator

This concludes today's conference call.

at disconnect your may thank And for You this you time. participation.

Climb Global Solutions (CLMB) 28 Oct 172017 Q3 Earnings call transcript