WSTG - Earnings call transcript Q4 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 will be 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 conference. you your Caponigro, may

Melanie Caponigro

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

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

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

Simon Nynens

voice, and to Melanie, good Thank you, have everyone. I Excuse morning a my do cold.

the as First, XXX, January, ASC of adopt Method. adopting of with we Revenue related Adoption so-called through Xst work The the from patience appreciate will effective company the Customers to everyone's the we XXXX new revenue. Retrospective accounting Contracts using rules

details. Now, Mike the into go Vesey will

it profit the gross dollars impact the margin as our or net on of change net start sales has will increase saying cash will no same, in to gross the is income, that significantly and me amount gross profit, stay from do percentage. revenue by will it Let flows. What change gross reporting

adjusted for for the taxes million quarter. In to addition, significantly million to of benefit recorded laws. IT new done. our The U.S. XX% approximately XXXX hard thank to our expected This this XX%. entire is and increased teams want finance, overall account in as diligently tax to with expected all provision get have some accounting, to fourth to and our tax tax taxes X.X tax rate income law an they X.X new work extremely We've rate I we year. the

Second, I manages want XX XXXX. on Geygan XX, the our firm he and Jeff effective Jeff CEO and February institutional expert a experience firm is investing statement has services an to financial XXXX. to The of research is President finance welcome Investment Value in industry, of basis. Board founded Jeff assets Global United across an individual in yesterday, for investment advisory and Sates, clients Corp., in global while over and years analysis. of the Directors

provides investor insights value stakeholders. for forward to We perspective our to as we strive of in Jeff our the an are looking company the from build long-term

year. QX Moving a gross our this impacted run over in QX XXXX, another stated on strong yet comparison X% before, attainment. on a well was our increase gross profit increased strong manage we Lifeboat year slightly. very to business; and we performed with divisions profit as still by really

opportunities opportunity For did we same XXXX. of $XXX,XXX, same not several by deals the increased amount XXXX. the TechXtend, gross to by quarter had year. in in this Yet fourth QX, have after declined We we the profit QX large the XXXX in close unfortunately,

compared income additional is income, that in down our quarter reserve the to main net our the $XXX,XXX Regarding net fourth year. last the is taxes of reason for

primarily public and an due and support expenses increase drivers and lower a to compliance our The administrative decline employee-related term a other the higher those and general growth TechXtend Expenses, as in payment to extended other business were due to in company. sales,

any increased fact million without $X.X We our despite back equity that million continue XXXX, stock dividends, paid in to X.X we $X during the debt, have by in bought buybacks strong sheet million. a balance and very

reach and Looking in only joined Bass expanding increase and the teams. future, January at to us our talent, are our reach business, future the strategic look we believe our continued community. the we and forward into appropriate, growth. expanding necessary and have a improve the We Foster and Lifeboat but investments field to our XXXX. we management decision services fuel enhance reach team our not Charles these Considering vendor Distribution channel expanded made to early and into to substantial recruit expand that Dale our position sales

will adding to talent by partnerships. our in future We hiring and new invest continue new vendor

XX% valuation the not the believe for We've especially rate tax company, XXXX we and will XX% a been overall beyond. believe current value. yield over our consistently dividend properly as reflect to stock XX% that and at we to that market, of from considering compared our is does and X% and our undervalued we are current our as to a estimates profitable Looking peers that go over price

authorization the have shares. additional an back We to XXX,XXX buy

more us. the on that We Employee, right track. the are and vendor joining are excited of software we prospect publishers confirms customer about feedback

We culture corporate and great XXXX. and look forward customers vendors customer We are our Our employees, know and care service to our outstanding. our this. a

hand Chief the financials. it like Financial Now Mike over our to to Officer to Vesey, report I would

Michael Vesey

for were the $XXX net results financial share discuss sales earnings for million quarter Lifeboat last quarter per our quarter for million. sheet for for the then XX% sales Overall net the review the to year. balance liquidity. $XXX compared the to to Distribution I'll and X% fourth up quarter in the and $XXX quarter, same our million Simon. increased Thanks, of year

quarter the XX% were for sales net to TechXtend $XX down While million.

extended from TechXtend market payment in allocation was primarily driven capital which to decrease term on lower internal the by mentioned, sales and Simon opportunity decisions. based As fluctuate sales, tend period-to-period

to quarter, million a As previously causing for in same of X% gross Distribution sales. Lifeboat the the $X $X.X in profit year, period payment quarter million extended this high for million in from to profit for had last $X.X slightly the to million sales XXXX. decrease year comparison a of those increased level Gross decrease QX discussed, we compared difficult year. the reflecting last $X.X

While decreased profit in to compared in profit XXX net to and gross which or XX% as X.X% by The products, the our X% result points basis, QX price $X hardware $X.X a profit the typically percentage subscription SG&A license for slightly compared of products. in carry gross same On sales mix TechXtend margin lower year percent compared prior perpetual and decreased expenses full related was continued $XXX,XXX expenses year. basis of year. in of shift to Total factors to due segment quarter a maintenance to two quarter decline last compared decreased a has competition the product expenses. million, gross as for to a XXXX XXXX sales a of million SG&A lower to to compared X.X% to net sales personnel in as and XXXX. X.X% when percent a the

quarter under The fourth $X of tax tax and the resulting un-repatriated revaluation of tax transition of to Jobs prior XXXX for foreign Tax deferred expense the for million of million the the includes Cuts the For income provision assets XXXX XXXX. charges year. taxes in $X.X earnings and of compared $XXX,XXX Act from

EPS have statutes approximately includes that current $XXX,XXX implemented by also The $X.XX sales nexus state of states economic year. for taxes the provision approximately related income for impact goods. tax Our digital in to our adjustments

in as and to result Tax the expect tax Jobs from benefit we the lower Act corporate XXXX a of rates of However, Cut XXXX.

compared earnings $X.X effective in XXXX million quarter margin fourth due an decreased range to expect in year. charges prior XX% to gross a of next primarily of TechXtend tax We was income XX% XX% in million the year. the Net to tax and decrease rate our the income to for The in declining business. the $X

over for these higher be pattern. on more be performance segment will available filed More to the XX% time. were less on TechXtend TechXtend to decreased and for information XXXX the shorter and returns in compared a the performance cycle in historical sales, Lifeboat was XXXX for which contrast, a market require we for the lower due a lower year We largely down $X.XX the cash shortly. fourth upfront sales. by the a services line as to with noted, basis. to XX-K collect on characterized business operate In invested are for on in on XXXX. customer growth decreased conversion term extended cash and and this our compared our pay capital. to of businesses these opportunity in cash to products availability in Simon share businesses Diluted a period to XXXX same restated limiting per earnings $X.XX capital per balance earnings As core $X.XX our dependent from XXXX invest XXXX much XX% to quarter and with opportunities $X.XX are full operated share Diluted payment year

to previously we current recalculated As earnings impact each consistent amount the calculation. reported per class as tax our last share noted approximately method Also adjustments income with using of year decreased be the calculations. previously noted, quarter, by EPS the $X.XX the in restated and two

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

capital level of capital and results stock investors year-to-date. of our was working return repurchases increase in investment to an dividends Our primarily and was working in $X cash use The the million increased vendor made prepayment the common to payment extended of by million; and sales in it XXXX. vendor driven average was a impact a QX of of $X and of approximately as higher part made agreement

were previous As of the XXXX. the related first the sales quarters, paid to products QX quarter on noted in for

resulting collected future sales in While be periods proceeds XXXX. a cash will over net in outflow

million million year, shares purchase of dividends common balance stock. in XXX,XXX $X.X we the our $X and to approximately cash During our paid utilized of

common net the As the the Xst, with year. effective services. We capital, at from has to adopted Stockholders' end periods presented, The our is revenue have in adoption adopting million the the dividend of new February maintenance revenue beginning of shareholders of at and million will sales we most XX, third-party January XXXX, compared a impact favorable presented. cash, revenue of for period total a account recognition declared working us most stood subscriptions, QX of present Board significant was including relates XXXX at method. cost will basis. standard for plan of has income XXXX. we $XX.X revenue $XX.X change at $XX.X the the The or adopt of standard on share quarterly X, last basis of the cost in million each million XXXX, from to retrospective March standard a $X.XX for subscriptions account compared Historically, equity XXXX, to on Under Directors XXXX the profit ASC end to just year, to sales. for March on been and stock record per growth of new all XX, for contracts for customers reporting XX, Beginning $XX.X net On December and third-party from a sales service including flows. growth the revenues the net impact of cash software with self-maintenance standard, on a we on products no gross to XXX

profit is The percentage increase the as reduction respectively. XXXX, net $XXX.X for of result to of will gross of $XXX.X and XXXX we and million, sales. and and reduction the expected XXXX of corresponding of However, $XXX.X revenue million million standard adoption cost sales of

have and which the additional be of will our information XX-K our Simon? We cable impact include financial shortly. adoption will summarizing attached filed to in statements

Simon Nynens

you. Thank

Luxe question can Instructions] [Ph]. Peter Your operator, [Operator Q&A. first line start we now with of comes the from the Sorry,

Unidentified Analyst

Hey, Simon, you? how are

Simon Nynens

Hi, morning. good

Unidentified Analyst

a of think the the of I ripple but the over go, was it's I With making constants community, been I the investment all know have last think so, the plan a that the comment people and time. fair given raise in or year profile what said, come, for and me make performance I to to basically sort your that only curious stock you to around company. is are People the for not

Simon Nynens

and first. need Peter, share need terms invest our So your our We before, in shareholder the I impacted our performance in we largest that company, to growth. as profile as to in And terms our investments. price. performance, raise frustration I our by is raise profile, share said future of In of this to order in

We are we are reaching community. doing that. to out the And

share and small with the somebody market terms unfortunately, In of personally stated of are we shares public float, start many that I've I other - a do of terms impact value, companies is where we a have not in decides if our a - to as so on the certain think share amount a reflects significant at that fair price, selling it could comments. do price, that and

Unidentified Analyst

better company and really concerned? et be don't company a that private of being a all given lot we actually parties cost company, follow-up, filings, perhaps a a it would public a for take Just as public for advantage being cetera, us

Simon Nynens

looking strategic at and explore we're for options to alternatives, create do shareholders. We all value

Operator

of You [Operator [indiscernible]. Instructions] a Jim question the line have from

Unidentified Analyst

is Yes, this hi Simon, Jim.

Simon Nynens

Hi, Jim. Good morning.

Unidentified Analyst

you? Good morning. How are

Simon Nynens

Good. I have cold. a

Unidentified Analyst

you bit little obviously the do in plan So have lower you obviously a great gross great where you're really future also, where how of the been could because works? that new for raise understanding. and balance a opportunities sheet, And you've growing a growth your explain do the your revenues, adoption revenues. are margins dynamic company And people that your you not - and you this about that you, will see

Simon Nynens

as terms, how that like business. bit; [PCs] explain you, on [ph] little that, a a but our for right, don't toes, layman So, my me and auditors look first we let step to at to I want just

margin We are a percentage of gross dependent deal. of on the

look and we a say at what we for an in And at deal. that, that $XXX, overall it's look is So let's us.

is accounting, of is say or are it's XX%, $XX some a report hey, are that's you record company large net the accounting let's you small should XX% it's five, as net you say it or impact. implementing that some of as rules $XXX Now impact, every terms let's as and revenue record if there the say, revenue, with rules, can that revenue? with can In these the new $XXX, X% you public - -

at will that if we a change we at Gross and say, statements, continue in says, our business, receivable Okay, we we Vesey, and a look way accounts in bookings. line us, risk, this, financial our it. correct, and terms For to include Internally the correct this the deal of in - run doesn't what's Mike look I'm I'm

addition, in company see these will It have there But record other into and that upcoming what that change you and all so before, do are bookings we've we We to the path, providing have that our hardware own we've include business. now under rules, to what large restructuring every for to decided, we change right and what statements see the to according software the decided growth And like we happy are in distributors, expanding now vendors all those we doesn't upcoming partnerships, What we look the the stick gross new way very can base, said our that. to we accounting and and through as adopt drive business, are. when forward pleased do to either We to recently we just more or vendors. information announced expect we to customer to more results partnerships. that, channel there, sell I can a that. is out

Unidentified Analyst

that, appreciate were you to I a company Well, grow? a be some you a had initiated where avenue program to to started follow-up is that a for and stores, you operating or effectively continuing is program potential that,

Simon Nynens

do as we yes. Yes, at look well. that Absolutely,

Unidentified Analyst

Okay, thanks.

Simon Nynens

you are right, welcome. All

Operator

time. other no this are There at questions

Simon Nynens

we of and results of first of end quarter much. May forward beginning April the you in year. or interest, for to so everybody Thank their thank the look our this We reporting

Operator

call. Thank conference. you again This joining for concludes today's today's

now may You disconnect.

Climb Global Solutions (CLMB) 28 Feb 182017 Q4 Earnings call transcript