WSTG - Earnings call transcript Q2 2020 | Climb Global Solutions, Inc.

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Operator

Good afternoon, everyone. And thank you for participating in today's conference call to discuss Wayside Technology Group's Financial Results for the Second Quarter Ended June 30, 2020.

Joining us today are Wayside's CEO, Mr. Dale Foster; the Company's CFO, Mr. Michael Vesey; the Company's Vice President of Alliances for Lifeboat Distribution, Charles Bass; and the Company's outside Investor Relations Advisor, Sean Mansouri, with Gateway Investor Relations. have went the approximately out Eastern should earnings quarter X:XX everyone Time. which release, this now, access second to XXXX pm By morning at Technology Investor is section in release at the The of available Wayside Group's website waysidetechnology.com. Relations webcast available This the on for is Company's replay call also website.

I over remarks, Mansouri to we'll questions. for call to like some for the management now turn comments. Mr. Following your introductory open would the call

Sean Mansouri

Shri. you, Thank

these also conference with certain required place subject time introduce and which risks in from are other Dale, of forward-looking as this well statements. are statements to any comments XXXX. known as time any statements of results I'd considered made These the statements webcast speak uncertainties call publicly that to the of date and as law, could the SEC. described obligation of are forward-looking statements, Securities that only this and revise in I cause call. actual are uncertainties release Before from certain Litigation Private remind forward-looking results to assumptions in materially Except to the undertakes forward-looking and These that generally reliance like unknown or the subject forward-looking statements. forward-looking on the any to revision to Company Company's Do as differ no listeners risks by Act filings under Reform reflected to undue those not

been accordance of comparable supplemental to measures, and performance SEC directly our GAAP earnings EBITDA; income, expenses; net non-GAAP of the presentation non-GAAP measures All most measures Our non-GAAP the adjusted also as share excluding certain including in rules. have business. adjusted billings; with financial reconciled gross includes per separation measures

now release CEO, find we Form over the X-K to charts this other earnings the and and Wayside's Dale important furnished reconciliation Foster. the afternoon. turn in SEC call I'll information You'll to

Dale Foster

everyone. good and Sean, afternoon, you, Thank

vendors the faced employees, a plan on top welfare times. the continued obvious world execute we and during difficult our to as effects quarter, has foremost, the our and and occasion Despite I've impressed during priority serve vendors been with our second and customers strategic the First risen of health and they our we to partner way the remains and challenges very navigate pandemic. COVID-XX the to have team as customers focus of the demonstrated. the the valuable

which during most although our fact, quarter, drove our key experienced turbulent in the In margins profitability, vendors a of one of in of softer periods recent impacted sales in several increase volumes and we memory. turn this XX%

benefited partially sales line Our from Interwork other the vendors our emerging also in May, growth with we on of acquisition but generated card.

I'm demand ability and continued to by and even resilience the struggled supply projects grateful needs. challenging orders chain businesses shift with in disruption, within of to Across as or this dedication. Our to required were grow they particular medium-sized very various delayed of for our environment with economic to lockdown have market work team's to shock onset especially customers' cycles. impacted customer the orders. our been severely high-touch selling servicing industry, pandemic, Small the our quickly for our remote on approach underscores -- the in vendors postponed technology

them operations utilized meet and alike. implementing technology have However, many customers’ this optimizing customers to employees to their efficient help by vendors needs. technology resources solutions on focused are partnering and with to more and often current environment, customers their In evolving we our costs, this time vendors for on focus make

Charles is to the the marketing also the sales XX vendor to network investments past and a to We over -- amid add made new we and our recruitment which continue vendors of update even our average selling sustain months. to our work enhance vendors process, area during in even pandemic, an provide increase to proud by an diversifying price quarter. team’s but incredibly transaction and revenue our vendor driving our will on streams in per our this growth this initiatives testament

you core current Channel Solutions. and have rebranded refreshed Lifeboat seen, of data we more to center, on reflects conditions. in strong Climb business our As work from May, experiencing demand Distribution change fully are which focus emerging may This many products, security our cloud name the all remote

hard teams brand Our we and the goals the that ready Climb to any customers challenge, climb. Climb as showing take our increase are and together set vendors work work is on to to reach we our achieve

with technology driving and market growth We increasing emerging are on products. focused share keenly

effects positioned predict over we deliver helping business, recruitment the our operations the made continue industry, our that, have to call turn we XX have while improvements on on of navigate times. us to strategic over months, and our vendors customers these sales our to COVID-XX I Charles. vendor now the past our and initiatives With will While the long-term to turbulent cannot network or our

Charles Bass

afternoon, and Dale, everyone. you, good Thank

just excited Customers making positive Dale received strategic our focus reflect center our from were As have rebrand and commended feedback. already brands. quarter. mentioned, Solutions Lifeboats Channel to to based vendors the Climb data We've the and we company and very change during on cloud for emerging us

with operational be represents operating Although a differentiated name service to our high-touch we levels. and new we're to progress have highly a with and going name, dedicated sustained, proud team, market better that we’re sales

All evaluating on to for come. we with of are tech our committed that grow strategy emerging our to partners vendor and through onboarding, years can and representatives identifying executing alliance further

we that our During quarter, illustrate success. new key the emerging partners drive vendors that of future several added the will breadth

sales excellent those fit engagement successful quick to They enhance It through implement. business needs. traded that company is of to incremental supports SaaS They're extremely a and and that changing drive partners scales software -- makes Climb penetration. market to sales customer distribution. has existing shown publicly One company came to their routes growth market to it's a and Zendesk. Zendesk was and

hand, composable help their our just at these infrastructure. of a vendor They comprehensive early effectively provides startup is sales Company quarter together. product disruptive be their stage to technology an continue vendors we stages to edge of Liqid, driving information forward. partner that with came growth various our routes market. ability to potentially fit companies Their create believe additions create market. And going portfolio could so beginning and other fairly they're kind Their we the the types we technology excellent momentum partner was a that's technology them as in two sales channel cycles. our is reflects We different leading will added their addition to to that the Climb, in a another On which of

We Climb Moving boarded progress We've the Interwork our excellent have all And with expect to following integration of brands acquisition by on onto our August. in to made two Interwork. May. final two brands we systems. existing on but boarded the the now on fully

is ahead third based own Businesses of immediate virtual most remote increasingly and dependent this launching alike focus on to the service As our self infrastructures, work cloud especially marketplace. in cloud on area heavily quarter, look we our and consumers are environment.

our COVID-XX the execution, marketplace. this So, own evolving offerings in especially direction about of challenges continued vendor strategic optimistic our face in partners sales needs want we of We're the to our and our across meet industry. cloud

services new market. this set develop routes continue continue that relationships us navigate hard working a offer to to alternative while to differentiates to vendor we'll environment, we of from As unique

I'd like Michael Michael? provide now, to over our financial details more to on to call So, the results. turn

Michael Vesey

Thanks, Charles everyone. good afternoon, and

First, to I'd May operating include everyone that second effective our like of financials X, remind Interwork quarter results XXXX.

$XXX.X period Lifeboat to TechXtend million to period $XXX.X in quarter $XX.X compared segment compared in compared in Gross in in Distribution the year. million compared second sales Net million QX to $X.X $X.X Now, Adjusted the million increased million Climb gross increased second sales turning second non-GAAP same to XXXX. million a same was prior while billings, compared measure, the XX% year. million for the same $XX.X XX% were for quarter profit quarter. $X.X net million XXXX. Solutions, to $X.X increased in to sales, formerly period segment last the million, the million $XX.X quarter to the XX% the $XX.X net to in to Channel for

a growth, accelerated vendors, impacted driving in of XXXX. While income event resulting also is to of lower were to related transitionary and margins, due approximately some partly we by vendors we've new challenged comparisons did situation believe occur Year-over-year are from marketing quarter rebates, which related from growth in current and of not we the our macroeconomic established environment. the $XXX,XXX benefits inorganic discounts second and XXXX been volumes gross revenue that discounts and lower nonrecurring part to by realized vendor with in

drove us. of very Under of with implemented an ours, was a much is net for conceiving reducing accelerated forward gross $XX new positive per a X cash by XX for quarter profit early This times customer going exchange which we're proactively the discounts year cycle to terms, this One we this collection approximately quarter. pay program position program the our discount approximately the of large million of $XXX,XXX in days.

million expenses $X.X million second $X.X quarter the year-ago SG&A compared were the to on, quarter. Moving in in

per to XXXX $X.XX proposal compared the Technologies. associated Group to in again The compared costs in of was the $X.XX XX income, onetime which XXXX. driven within or director the expenses nominees, or Net XX.X% or or XXXX. by was our period per period The with to diluted Interwork our was decrease Adjusted acquisition. share and to diluted N&W net increased Webster unsolicited by acquisition XXXX. to these income Interwork as regarding of as share, costs of share, per SG&A $X.X quarter to costs, & for their $X.X $X.X several with driven increase well second $X.XX percentage same related per compared a same revenue, As share was our points million million million excludes nonrecurring XX% QX settlement in basis in and settlement the for related $X.XX North $XXX,XXX

to a June shareholders XX,, XX, Effective in cash was metric believe free profit aforementioned XX-plus-year EBITDA not means. quarter, of plus As maintained by form lower of strong use the $X.XX we've capital a XXXX. Dale. that metric per inorganic supplemental and we never provided and customers. And same by ability us navigate environment, the the which over but cash cash one in On the defined XX, We're turn to of I'll uncertain $XX flexibility had concludes share gross invest adjusted to prior This significant XXXX, We've the earnings $XX margin, our working this compared XXXX, December XXXX to we a in in debt This to enable increase year X, portion as of second stock, assess a June ever discount million million value. for to and EBITDA was only new remarks. us also XXXX company our margin we're increased XX.X% financial useful position with return payable has decrease it XX, profitability at of program back both profitability at dividend of also percentage continuing pay business could Board COVID-XX cash $X.X more $X.X before, declared gross million The a August a XXXX. with our us a the Cash very a growth has the XX, million our driven early in excited with to about as of a our In to through quarterly provided prepared liquidity than XX, period. EBITDA and Directors August with primarily to and record to compared and history. remained of both to organic dividend. increased December the in call on is at the that equivalents XXXX. in large we XX.X% period is accelerate adjusted as to way my concessions. compared and will driven common profit as XXXX, is non-GAAP reminder, August the shareholders our

Dale Foster

questions, And integration provide I open deeper for the our wanted Interwork. update Mike. up on to of Thank a we call before you,

exceeding quarter to integration overall to the be I'm our anticipated very report and expectations. of that the integration and in completed For pleased to meeting well, during the is point full this aspects fourth year, certain progressing this up

Charles U.S. And integrated deepen and sales relationships Channel our along vendors both already and as with with geographies. to are existing Canadian in respective both they marketing customers are teams, Our Climb now. working teams referenced, their

time $X in the quarters. one million additional of effectively and after of over We periods expect continue Interwork further an from we to next adjusted synergies our the challenging most operational To our EBITDA financial navigated call couple annualized nation's summarize today, driving have of history.

know partner customers, in the We us being margin serve our profitability reflected in areas term. as business benefit We and our need there our the only when deepening will and by to to near a over vendors for some concessions continued they vital and long vendors run. as our relationships that most

growth We period card cash hand realize today short of have management driving than streams. vendors our and Wayside. at further a in with on acquisition diversify the this line continue begun we've last, emerging first to more team’s before on to our time, very benefits revenue from ever And

as are innings up a products. distributor much center, position cloud and call very early ourselves of and years operator, We profitability as the data security we premier we’ll in Q&A. for ahead the open growth now for accelerating And technology for emerging

Operator

with Ed from Thank Our you. Ascendiant go [Operator Capital. Instructions] come Please will ahead. question first Woo

Ed Woo

question quarter do the also, on term? and and valuations M&A opportunities there you the is, acquisitions also the My Has do you near been on Congratulations what down? additional And more landscape integration look feel have like? acquisition. that of Yes. does could come

Dale Foster

day. out that’s looking really Thanks, into where organic that. organization. the And to go the on Ed. Dale. the with how we targets, depends then, teams, over, far is a was at and such of all growth. it we'll that's right. inorganic you're sweet to But, A those even brought good for fit side, far are geographies. want us. I out couple who right? and of same I it are just who they we how focus We're that. depends for we're our what targets. the deal us we I things out do there? that Interwork targets out mean, a better finding to look And And There throughout on fit for of with they the and are thing, know that every fit got different mean, that mean, spot And actual This

a And back thing was looking was it that the right So, very on easy to do. one.

space, of those, So, we'll application of course, the course for look to cloud software pieces. continue more in in the and

Ed Woo

you to some those path seeing seeing some I revenue. then, you is, you my lower it to currently? be a Are of generalized longer And time customers say Great. a return back you return question for that is that had other but to are of you then going other just business? back What some or may pockets growth, know, next partners had have

Dale Foster

at more It's far mean, not and anything it not we talked -- delay else. we’ve than saw, a about Difficulty]. was [Technical that But, I as as what of you and look

lot But, into So, it's a a that like is hey, and seems the think everybody goes things good, delays it's done. it's the of working way lockdown. just home. fresh, to like, And all everybody set it from Everybody then of fatigue getting user it's end processing in, kind the gets things. I

and this quarter longer we'll to up. back It's process to picking So, haven't we that orders taken start see were we disappear. tracking seen that just in

Ed Woo

questions. answering wish good you And Well, thanks luck. guys I for Great. my

Dale Foster

it. appreciate I Ed. Thanks,

Operator

At this closing would question-and-answer back I now concludes to turn call Foster over this session. to the time, like for remarks. Mr. our

Dale Foster

of more And meeting of It years just just operator. we we week, our very Board to we Thanks, have discussion refresh been impact. last from lot Board Board a becomes subsequently members It's these have. two a up, that positive had on, business that follow a we than ago. new have and a meetings

following and figured So, all, I they home. were Everybody transfer up. team, employees we we're did going catch quickly most been hoping the customers that to on. out the seeing order. We're how and lockdown And them, that thank stepped QX. productive And as to thank we at up quickly able in executive want to and do be it's have vendors the as that were and that just very great. They that during of to

So, thank shareholders conclude will you the to call. this and our

Operator

Ladies and teleconference. this today's concludes gentlemen,

Thank at you your lines your disconnect time. participation. You may this for

Climb Global Solutions (CLMB) 12 Aug 202020 Q2 Earnings call transcript