WSTG - Earnings call transcript Q3 2019 | Climb Global Solutions, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Wayside Technology Group conference call. [Operator Instructions].

As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference, Melanie Caponigro. Ms. begin. please Caponigro,

Melanie Caponigro

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

Before over customary the earnings Distribution, comments turning call the call. I'll of the about dispense Lifeboat President with for the webcast cautionary and to language this Dale Foster,

Wednesday, is available waysidetechnology.com. We Time, answers, at questions webcast Investor website the at the call, the be a.m. for The including rebroadcast and XXXX. earnings available quarter at company's X, released X:XX live and at earnings Today's all approximately being third Eastern November release is will Relations www.waysidetechnology.com/site/content/webcast.

to that Litigation risks results that could statements remind under I'd statements Act made to like forward-looking and and uncertainties differ Securities Private Those you to Reform in call this subject actual conference the considered cause of comments are materially. webcast XXXX. certain are

Additional our in to SEC. no is not and information Form with and Technology does XX-Q obligation Group, these concerning the uncertainties statements. filed sees any forward-looking Inc. update Wayside XX-K contained risks to update and intend

GAAP SEC Our non-GAAP reconciled net share. in financial non-GAAP adjusted billings, earnings gross non-GAAP directly and with income non-GAAP certain also most comparable the measures accordance have All includes to rules. measures, been including presentation measures per

earnings You'll the SEC. X-K release find in reconciliation we charts the Form and furnished to

I like the to call turn over Now would to Dale.

Dale Foster

plan of operating our Finance; primary the plan and us Thank Bass, this joining call for be you, on today XXXX Melanie, or execute would over X introduce today's with Mike The making VP me: operating progress CFO I for today joining and that discuss VP has on and that continued of to results. quarter, is components. In we I morning call Vendor our set the fairly today motion to everyone QX ago. X and be the a we're quarter in our in results. - Charles good to like and appreciate would year discuss Marketing will - the we the third Alliances, in Vesey, along simple everyone. speakers to

field-based and model. we in First, new responsible team and territory launching vendors. growing recruit invested we for that a team then invested emerging And is and in second, sales a coverage

to are We our double-digit second show on as this plan continue progress growth quarter reporting of profit. gross we consecutive in

million Our QX million, $XXX an adjusted gross the basis of period from to XX% increase on non-GAAP of XXXX. increased billings a same over $XXX.X

increased to prior Our XX% $XXX,XXX QX. gross year's also margin dollars from or

a million, up third more continue emerging could improvement, the gross just we to had - year-to-date and and to Our show good a with finishing team the sales $XX.X you results up good about talk profit XX% vendors? Charles, quarter.

Charles Bass

Dale. Yes. Thank you,

our our So field sales-led now of incremental on a has And we cross-selling focus to XX strategy. and personnel becoming in months strategy execution shift into organization. adding entire toward a our driving customers. been are base vendor of on focused incremental We've the with our partners

investments. We've significant related made two

sales we've built seven sales field territories. assigned team geographically First, our into

These teams sales driving In we're Lifeboat consistent dedicated we've integrated we've been strategic that specifically existing accounts. implemented to have goals resources on also to effectively sales addition cross-selling inside focused teams, customer fully and sales aligned the into behavior. ensure field these teams,

evaluate sales view in and strategy. outside We've Second, over cross-sell point-in-time as for resellers work to been these plan new establishment are recruit investments concert to vendors. and recruitment that designed teams, to but drive we've or comprehensive a brands Both recruit actions, emerging in technology contractual partner our We've results. to used vendor into And a vendor plan. sales investments on this sales a field rather entered not recruit to that's prospective vendors XXX fit our emerging implemented agreements our with over XX methodology using we we've to based those of vendor go-to-market efforts ongoing base. best an with commitments recruiting

the I financial would turn now to CFO, to to our results. discuss call like over Michael our third quarter Vesey,

Michael Vesey

and I'll then XX% results Overall, for quarter discuss to TechXTend for review sheet to X% non-GAAP third the cost were $XX.X on to and for million, million, revenue quarter increased liquidity. adjusted Distribution financial balance our rates increased items Charles. recorded million of growth sales the Overall net $XXX.X basis to were Lifeboat of GAAP. to sales in a our change XX% gross net sales for while between quarter quarter the million last quarter $XX.X the difference gross billings compared the the net non-GAAP in under Thanks, prior billings third to the $XX.X a X% from million in $XXX.X basis million. sales mix due up year. adjusted The down for $X.X on year. is of

last million the product Gross compared by of all increasing growth profit Distribution to Lifeboat increased million the gross the of year. for our some period the in to for quarter both lines to increased growth profit driven $X.X for accounted $X.X same lines. year. and last at gross sales XX% compared XX% quarter incremental existing The for million profit, $X.X to Lifeboat million $X.X was third from in new

from relatively our TechXtend prior unchanged year. business Gross from profit the remained

incremental to quarters, leverage for us the and existing business and TechXtend contribution As discussed generate an infrastructure cash previous opportunity profit in our provides flow.

Lifeboat And of our have provides our best growth. marketing for believe there. accordingly, efforts business focused sustained we However, most we the and sales opportunity

last change a profit net change a due under basis the to products Gross percentage Under mix percentage mainly the profit third gross particularly margin. net basis, recorded ASC on reflecting gross effective of our gross margin XXX. The to single-digit net XXX, of an ASC gross that a was net or are the sales related high and margin composite as in reported XX.X% a XX.X% items that of profit on to of recorded cost of margin in compared a quarter the of increased percentage in as sales sales recorded XXX% margin is are items a year.

During are in a effective net approximately recorded profit which by X.X% sales This last of profit gross and shift of XXX% quarter on or gross hardware percentage of increasing mix year. a to gross gross points. other of lower offset an the had third quarter products, basis. as on compared X% XXX margin, net were net revenues and increase software on from product same a partially maintenance XXXX, our the the basis in by products recorded security effect This was margins basis

remained adjusted prior non-GAAP basis, a margin billings On constant gross period the as a percentage about of X.X%. with gross profit at

by to for same expenses to $X.X to The due SG&A quarter in commission increase XXXX. salary $X.X increased primarily million the compared increased the for sales. expenses million $XXX,XXX to support Lifeboat increased Total at and quarter the is

a prior expenses in SG&A of net year. as X.X% XXXX sales the for the quarter percentage were to XX.X% compared in

for Income ended XXXX. million period to of was - for the before $X the XX, income provision September same compared XXXX, the for taxes in quarter $X.X million

enacted quarter income period increase was statutes. company During for $XXX,XXX in nexus the recorded provision taxes for the XXXX, current the state taxes prior income a impacted in The for of income for compared company's same have by economic taxes the year. provision the an states third of which period for provision to $XXX,XXX

to result, in Diluted for ended period for XXXX, the income in million the to XX, $X.X quarter net the compared million was income September the XXXX. for same a quarter September per share ended $X.XX $X.XX XXXX, As period same compared for XX, was $X.X XXXX.

on to the balance Moving sheet.

customers sales cash, end million an million December year-end balance year. with the $XX.X and volume of at last capital the borrowings in our payables capital, We stood investment liquidity XXXX, the of compared cash increased and with cash Total XXXX, terms. to equivalents of reflects one of have manage $XX.X a under reflecting of $XX.X at million to in last we at to including equity of credit the position when facility. Stockholders' compared was decrease to the continue no cash due lower end $XX at strong million to million $XX.X seasonally period and $XX.X extended compared compared working payment increased balance The million order sheet end year. end to our and million at when outstanding $XX.X our to working

return business We year-to-date invested We net in on net calculate on return compared continue capital run of to basis non-GAAP a expenses, income, last capital on equity, a for XX% of cash. with invested approximately our providing taxes, stockholders' XX% XXXX to less by the year. capital-efficient same by separation excluding period

XXXX. form our payable to Directors to earnings continue a the X, in November November a quarterly record shareholders November Board per on significant shareholders common share XXXX, of XXXX, We of dividend. of $X.XX of dividend its of the declared On portion XX, a return stock XX, of to

and X% gross recruitment XXXX, by over continue demonstrate results Distribution made to and business was quarterly with our pretax growth $XXX,XXX the dropping more results strategy sales quarter beginning investments since Lifeboat at investing marketing a in of and the the the our prior scale third than over and in of in our notably, core vendor the summary, show the year in sales in or increasing revenues year. we XX% increasing payback gross last profits So of to The investments and growth of field And also vendor leverage this profit the business. those income XX% driven incremental through in recruitment line. our with

shareholders while returning the over our of strengthen of in net a to continue to form also sheet half We dividend. income balance our

it now I'll Dale? Dale. to back turn

Dale Foster

customer important our in sales-first partners customer vendor a Mike. and company service Thanks, see, the side. we've And we're and made customer always vendor bar relationships, focus to into side this enhancing you transitioning year approach both the progress and our with the as on can a on some

along vendor a continue on great to that in value our we to become have more efficient, partners. and Wayside, areas with to build the will customers team can targeting at this here and increase company we the success, We

executing support Board like and shareholders to to their progress our and continue as I'd closing, encouragement plan. In we for strategic make recognize ongoing of business our long-term Directors

this up the analyst investor questions. open the I'd like our to have community operator for At time, call the and to

Operator

[Operator Instructions].

comes question first Peters. Our from Josh

Unidentified Analyst

in numbers I Certainly, year-over-year can a the figure why out the strong. the so progress that only in the the Really wondering Honestly, quite between if maybe the second trying results think of. head difference making about scratching to and on just thing you appreciate bit look you're that's could is stock I'm my quarter and business. negatively comment the here, third little I'm reacting the quarter.

Michael Vesey

Yes.

a add And is to But what can. if to Dale, Let quarter. you from then, comment business exactly to our we linear the - me quarter want that. make on not

be to results the could compare people it quarter So last sequentially.

us. to Fourth quarters predominance tends And in quarter first vendors for of quarters. the strong a a businesses our the then generally quarter you at a look their be In there's the middle that. one And yearend, X so yearend the has explained the to it have spending our also, are December four XX, quarter. of just we've at several vendors when two. tend past, year, kind IT a quarter is be larger barbell of our As of slower of their strong the usually because to the

So quarters and chart we always look to sequentially, at our don't we quarter-to-quarter. average up at the that The is out. like way X go it trailing results look of

point the Lifeboat that completed. like it's - through progress in third just to quarter continual see business. you'll that out note has also, that And You'll the it's we been I'd that

of going decision a on So the back Lifeboat. we beginning to made focus XXXX, to

opportunity grow on So basis. capital-efficient a saw market we sustainably to there a

context of is growth call. if they think may the where more through the the numbers skewed good towards have that that seeing fact business, don't long been end opportunities while on not parts listen we not certain that People flattish. be the there's the the other to So

think I that an maybe all So could impact. have

Dale Foster

that. Mike. agree I Yes, with

Unidentified Analyst

Well, I color. No, like please, Okay. was to you'd to I But add. say. appreciate that's going whatever yes, all the

Dale Foster

most well, mean, drift a Dale. drift And June that the customers orders and as Like is into have probably government, I lot it's also, we state's look And not over have, end linear. so see end first Yes, real QX if their we'll state quarter, and you said, Mike have so we local of of This is as vendors there and sell at at quick. said, then QX. get the into the QX, like QX fiscal that said, that's and recognized. that over I we a year, of Mike bump

Operator

question next Lux. from our And comes Peter

Unidentified Analyst

out you community on this than be make to into grass plan look is it outreach weak stock? the has like and Right quarter, stuck. are I've hands some company investors did any seen, during get rather investment of with the to in it perhaps get the What the a strong waiting your or to the hands really viable continuing some numbers. investment Seems to some community. weeds doesn't the your now,

Michael Vesey

and Peter, that can know, through because open primarily quarter to in the XXXX, we continuously you up. mainly story following investment kind through I'll XXXX. Yes, programs, on then, an here, - you successes Dale, that. third one of add been XXXX as have to in the changing direction And of XXXX. you've the we started business And investor second and of conferences some the in show through the started in awareness made

times talk think to an I probably they We're And in meeting first with position And management few continuing the follow the in before the take we're meetings people where and exposure at conferences. X we're know, So people the for story quarters stock. actively point X, dialogues and as is continuously. realistically, a through to like might the introduction. you

down the we that past I sure. expand people, why in developing have performs, going trying XX continue we their expect the progress, and in as they we're of business going answering to with investing are follow, of to this road relationships So to long doing over areas the awareness questions think follow continuing but we continue communication. And to to we're will to investors go opportunity the as creating the been business for months, are. just our the we're have the And as the explain

Unidentified Analyst

other one thing. Just

of of the lead - of the Lifeboat. company the guys permanent guys a are? seems thought entire ongoing of where hinder CEO taken to you lack sort You a Dale President And about what's does the having But have as CEO?

Dale Foster

So lot taking first to you've it roles. If like seen I'll just that and that. also, company, Number doing seen doesn't your in meetings, us we're leadership you at right? the are out two marketplace the much in structured, here the that question, aware I becoming company a take into things. one, hinder way there And the us you've Mike look it's the And as mentioned. Mike conferences. the more more of and

day, to search on. So on we Board need as as at ongoing. CEO And to really then that's the results the the of the work the up end far that's that it's the and

Operator

at there And this closing further with comments. time, questions. Please any no continue are

Dale Foster

And Thank you, think we're I good operator. at everybody. thank time. this you,

Operator

your for Ladies and gentlemen, thank you participation.

wonderful now You have day. disconnect. Everyone, may a

Michael Vesey

Thank you. Bye, bye.

Climb Global Solutions (CLMB) 10 Nov 192019 Q3 Earnings call transcript