WSTG - Earnings call transcript Q1 2022 | Climb Global Solutions, Inc.

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Operator

Good morning, everyone, and thank you for participating in today's conference call to discuss Wayside Technology Group financial results for the First Quarter ended March 31st, 2022.

Joining us today are Wayside's CEO, Mr. Dale Foster, the company's CFO, Mr. Drew Clark, and the company's Investor Relations Adviser, Mr. Sean Mansouri, with Elevate IR. have was the approximately issued Eastern should press XXXX X:XX everyone Time. which release, yesterday now, access first-quarter to earnings PM By afternoon at Technology Investor is section in release at the The of available Wayside Group's website waysidetechnology.com. Relations for be website. This on replay available will the webcast call also company's

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

Sean Mansouri

you. Thank

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

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

and the earnings we other in over the Form to turn to SEC to CEO, will now charts important reconciliation the call and Foster. press find I will yesterday. X-K Wayside’s Dale You like furnished information release

Dale Foster

morning, everyone. Sean, Thank good you, and

was of This we meaningful the nearly most group evident the our our was we business. selling strength it with double-digits our year. by quarter, during testament number build offering grew of the sheer to with products as first in During showcases vendors, innovative and with the leverage inherent as reflects while up we last new grew These the momentum vendors our XX% growth More our to of organic our strong right reflecting increasing and as a the relationships our to our net XX% over in million. our value to both and improvements the the companies disruptive $XXX partner We are significant in to income QX, Adjusted XX%, top customers looking specifically, end top-line to of from this this and most existing growth are quarter. XX up card. EBITDA to operating gross to to quarter with we're partner seen continued our increase well brands core generate evaluate ability adding with line Climb in that and the This vendors execution significant the continuing bringing initiatives. We've a the market. organic past our with are partners

perspective to committed evaluated card, into line of new agreements in partnership number agreements. a remain we While XX relatively QX. a purposefully we high did over enter new new eight and limited Climb signed brands

Cato platform. single which we capabilities security technology, Edge partnerships cloud-based Secure Access company the Networks. into was network a develops Networks in enterprise notable communication that saw with most of One QX a is and Cato a combines partnership security Service

we highly and LSP bar be offering and company a into differentiated While KDLE our networks relatively partners. is that know security in they cloud created networking pioneered XXXX, established the of well-received and new will convergence a by the

next-generation to leader mass data protection success cost infrastructure infrastructure the our partners. out Nims and now storage best over our and mountainair solutions. Wayside, highlight film of is the U.S. data next to true and part of are just Mobile he Subsequent migration XX the both and our investment, the our of the Foundation. Basing partner, Nimsdai has in our the To We Nims storage is can't to the world's founder world cannot our of world on Is be for they it's to that for he Impossible right our expand with six Peaks: Seagate in Seagate Purja carry Nothing kicked data portfolio reminding of to to and the our low this with to Not themselves community top highest end, channel Nims Nims through the to our six climbed very subsidiary. topic continuing and hold initiatives, to community wait quarter the capture of goals. example, here characteristics combination business ready level for that XX to evaluate service of Nims strategic in at his partners, success. on was the the months solution project We channel accretive to With first limitless practices can and movement, Technology, enable like only I'd will but will mountain the all push of the a deployment, their to clients days, simple data and we us of provide X,XXX to the our the perform who On leading embodies off the ensuring customers Netflix goals, aligned opportunities Lyve that record-breaking is a mobility, sponsorship only our market. charitable this achieve flag in at abroad meters average we KX, M&A next of zone by level, collaboration in application. peaks Denali’s winter the peak. elevation employees, sense with thank we

execute vendor and solution target that multiple predefined specific potential business, the Each targets with room sizes discussions With have expansion of Drew over I financing growing in call geographic on to Drew. abundant and Clark, that, XXXX. our to service and the can capacity of strong fits balance and CFO. more our into categories are these will in acquisitions of turn and enhance buckets. forms offerings. we one or We sheet, reach, various our With including

Drew Clark

Dale, everyone. Thank good you, and morning,

on specified. that to as review commentary want might quarter was unless we our our continuation As some a year comparisons our because first and financial executing business Well, quarter, strategy. team the of results, to a it everyone of remind variance I of XXXX all otherwise boring consider refer bit our our prior successfully

adjusted This in release, we all new in As realize from $XXX.X reflects earnings organic gross growth increased billings, vendors. to year-ago press quarter. to measure, compared which a and is existing the continued increase million our million $XXX.X non-GAAP reported XX%

in prior In the vendors. to U.S. addition from addition, $XX.X in net XX quarter Again, primarily $XX mentioned our as the million compared in to March sales XX, in the for million Canada, XXXX. million to the to XX% three growth $XX.X of $XX.X quarter. increase months profit ended XXXX first increased first in to of increased million the the vendors Gross compared year In top Dale GP quarter new XX% organic driven earlier, XXXX on-boarding both by of and was the

the net had billings versus on Our and of a unusual year in business sale sales gross of X.X%, nature. impact significant solutions profit XX.X% of our in quarter. to as represented on our XXXX was that was XX.X% large gross compared prior X% a which adjusted percentage included QX GP a

million in was EBITDA by deliver entirely gross were new percentage X.X% $X.X of $X.X from as leverage, to million. expenses GP transaction, first to cash net this December share of infrastructure. vendors Adjusted a equivalents in increased percentage the improved growth XX% Net driven $X.X of both a again, million organic our lean of SG&A, $X.X quarter adjusted compared and that to increased million quarter XXst, significant $X.XX to to gross billings, XXXX. ability our the sheet, scale sales and $XX to our March operations XXst per of SG&A as increased profit Once as scale, increase or incremental comparable quarter-over-quarter. Excluding share compared first in AGB demonstrating and to to existing to compared turning income to for both the the million. compared XX% or X.X% quarter XX.X and $X.XX diluted as cash as net emphasize diluted and XXXX. increased income to a we balance period percentage EBITDA. adjusted of in first million XXXX, million per $X.X million XXXX to to Quickly our $X.X higher continue and compared

activities payment XXXX, no our primarily to as Directors of with million at XX, was borrowings common first working of Board $X.XX and XXXX, the period. the any stock, dividend million May, declared our dividend increased $X we timing of a reign share payable of shareholders outstanding of Xrd, is $X.X during either May sterling quarterly per credit indicative of as under point. growth capital debt-free of collection facilities. While or business this continue our March $XX of and of on quarter by XXth attributable On May record XXth. to to not trend this type million The

the new all globe. look our relationships foundation to As while growth vendor and ahead us year, to the the to organic drive we and our leverage customers remainder operating networks continues allow with across of strong meaningful expanding

the delivering I customers, This over call. As we geographic remain up to strategy to We from it can and footprint also strong previously, we prepared addition organic alike. Thank in solution open and our and and constantly that turn Operator, enhance forward offerings. concludes participating growth you. as to remarks, you. back mentioned Dale targets the year questions will those our in service M&A our evaluate inorganic we'll of our partners, in to diligent look shareholders another for yet meeting now our

Operator

you. Thank

now a acknowledging [Operator Instructions] request. You will begin question-and-answer We tone session. hear your will the

for up join using queue. [Operator as handset pause If pick your Instructions] you keys. are speakerphone, pressing We will callers please moment before a the a any

Sales LMK go comes Our Bob first question from Management. Please of Capital ahead.

Bob Sales

gross and offset you Congratulations receivables It the excellent better it think jump going was about billings to morning. out analyst you M&A of management bookkeeping When front. figure? your to about agreements DSOS. so think revenue do receivables. Hi. Good that ask quarter. question. then did would with terms your I simply relative can think and payables of this on to in progress because a we an the potentially And your have the the particular I'm How just in pure about

Dale Foster

You that want Drew? to take

Andrew Clark

participating Yes. thanks and for the thanks question. for Bob,

customers, of and receivable get we'll end the treasury some that of bucket our of But day, Our normally into quickly. on DMRs. XX cyclicality from our XX, to day of have based billing on our are the payable we payment where XX payment have with net the cycle. Most DSOs or management of a can at XX agings portfolio functions do vendors. sub the fairly the especially we on opportunities garner early side customers rebates, tends turn time-to-time the We the probably larger and discounts our are

So fairly closely particular aligned there on we of cycle mismatch advantage cycle between will payment side, quarter-end. slight the the on and the any a or may normally, be take vendor month and those receipt but

year-end, the if think our bit you as cycles, And of enough strong some participated end customers addressing in longation, little have with of cash any of we very in payment but particular number a did month-to-month, will, so know, at I normally probably fairly of a quarter-to-quarter. quarter. consistent flow those large the you window

Dale Foster

diligently see point. cycles can this do looking of definitive to will back requirements the in some to cash if nothing the model those change any and turn dramatically the Bob in I hopefully working reason with deploy flow that We we're as have acquisition little the a particular any and capital the activity that have follow-up turn not-too-distant it that that cash will excess direction a bit be sharing to future, you into but market business. question. we don't you I if at you

Bob Sales

Yeah.

Andrew Clark

per market we our things the me terms vendors, then let on follow are quick to that one of of there's the of very getting terms those tight are with their because vendor's quick and so over. contracts Real these at and flexible each with then the vendors we relationships emerging the look those we have they stuff. with contracts But in opportunity. Real jump that are side

a our big to talk as meet if lock So extended if it's team, to because as step them and we we're in with we there's pass far part week company. about receivables them on, us. yeah, each as but, receivables it's of go, It's executive our terms, important the

Bob Sales

distorts give the down billings and it only GAAP sensational And versus ask revenue job your gross such to doing just in can't you that And looks were nit as ability also financially. to I you're Yeah, so great, I pick absolute question, to someone perspective right? -- call, the to, metric. cash I asked the the receivables sequentially. flow down some your that don't want this explain road, conference because

Dale Foster

Yeah.

Bob Sales

I -- sorry, to did to I The I'm want want it. ask just second respond about thing that? was to missed you

Dale Foster

No I agree.

Bob Sales

XX course casting me Okay. a time net or What that on new those looked is you conscientious the point want of become names understand strong players. a will top this out. with number at is it and at that to -- Help your over Are it deal of you vendors wider the the expansion to additional agreements are XX. of thoughts eight more -- the

Dale Foster

quarter, that vendors we'd and us we at of time, come us, if the vetting them look much there. our at portfolio, to management also bit our of and some past our then them us couple coming into haven't at to up, them. marketplace we because been period this timing this the it onboard new vendor think is wouldn't of we're we teams. getting to seeing where be we really everybody in are when in pretty take sizable just quite and about fit wasn't I'd and get sales vendors, from I'd the segments deeply, becoming and disruptive verify at the more it's of pipe them -- little a that And fit, say, We a hitting eight to and is competitors thing we to important then a instead it after these involved a happened seen this timing. where a in to a to hey, few got more of entertain able With time For what's by that like right the new trying we're the more to were does looking even prevalent pretty this think we it, of and look we're technology, and like as sign our emerging it and them. six we've going

process. next that year than the probably So out we'll the move over continued

Bob Sales

I same be first feeling M&A of and that to will expect you expect do the but it, the many bigger? On going should one that not I on anything I'm of -- size get think up mentioned we the going, Okay. keep be queue. the at we front a nature there we the acquisitions you might complementary since color scale was looking of aspects ongoing or continued size, should you'll

Dale Foster

three as acquired go, they very very vendor much size our strategies that very much small I just inter-regionally the that the tell as and to across Well, too are different some that regions the what that that vendors they're I tuck-ins micro. far transformative sizable had by then far of the of they things can without some -- have And the certain in we've from as help did turned acquisitions at one are would as about, them regions. say with that's to wings looked our then you and We company. talked that hold that take actual all we still too as can't transformative but small. disclosing I of And range

U.S the we a as UK done like. of would or them getting much job great into UK then haven't as We the

the regions. just feel frustration vendors We some creeped be can't not focus have we'll press of in year as this So we this successful in we like other? well. you'll of why of that one region, releases a remainder other that on seeing start rest that into seeing So we're the through the those year, throughout the that it's

Bob Sales

that about, that little markets. chain the some the in point, financial in a and guess of we're Okay, seeing this making cautious more decisions buyers Europe spending? just Are in supply are the issues, What you hearing at signs and nervousness any challenges slower with the are bit getting you last though question. or I of the seeing

Dale Foster

big is yesterday The IBM, anybody things, Tier supplier, in Supermicro issue, that X So I call Supermicro, XX% wants servers two the they're We're piece. or with that Lenovo. was HP, as a hardware a as to portfolio. buy on for to a our are get software, like And the us Other that that's hardware delay it's far that, software there's the it, that going be if ready thing a hotter everything the out with has cycle they would are we in ship. that only might spaces. go our slows hardware down goes until they than buying two that implementation on with

are say sure product, for a security which storage, security We in you're security claims backing that brand and somewhere. are make everybody to they have you have I that don't needs data care to watch a everybody still you you

I the whether data that's of Cloud trying or people they're they're workloads the hybrid they're cloud Cloud, work a say enough data back the then using well migrating, of because the And their other one in is center. off to hotspot. setup, do center, the to Cloud. When are some didn't So requests migrating

two spaces. So good in we're the

the costing, with credit to interest to that slowing in in haven't watch of market careers. rates the going concern some We we years our and down even last as over cyclical the this our used to XX-something spaces. seen receivables we're We're more give nature

Bob Sales

it. Got

the time. Okay, thanks. And I'll Congratulations. pass

Dale Foster

Bob. Thanks,

Operator

go investor. Our next question comes from Howard private Root, ahead. a Please

Unidentified

I've congratulations two great one then Dale. and for Drew quarter. and another one guys, questions, on for Thanks, got

you're you and determination just think in division. I profit, being the QX think because on your I X% then last for being, profit SG&A For the from is And your being the on I the from gross XXX grand based to went too, creep comment that normal, and high, of surprised on sale see from Drew, sequentially. or it do me. What up at look happened you cost accounting gross year $X.X that QX the line Great I as on gross on to the do but see on based job that gross then on the then decrease up? the adjusted a X.X% that the SG&A little thanks going line? what it's see million, a side SG&A profit that to great you gross adjusted going based on and see have this a at it but to that, trends And whether on you that? always new guys around do year billings, do billings profit year not aberration do last management, Do which the on gross everything too, X% on there you from

Andrew Clark

thanks, so and Howard, questions. Yes, good

something X% good They contract we a more deliver relationships go the above that may rebates our expect we I that us with how their business. in I balance on we were incrementally year, can side Microsoft will, on next trend I'd and time. grow steady-state our Solution bring year. both tend move this go-to-market have CSP maintain good at how the attractive would us vendor to economic the over On our direction. say if negotiate manage day honest on that's side. move and early on customer a we say they terms every profit build Dale period to if of and pay think the is that with get a If vendor referenced I directionally and correct we as and the things and but relationship that's guidance a do don't slightly to a directional for vendors when behalf. all can the and our Again, needle to continues we provide that that pretty ascending stronger be in would new how for along discounts work of number to that the I gross least through us, to of say and we that line, about much that's our can X% with know on in that you we and we value

On and them create credit credit, evaluated we year but we properly, and to are sure SG&A we our team's make last Dale's can do folks, the sales wanted side, also how marketing right compensate drive that and to the sales to ensuring that we incentivizing metrics the the really business. we

that brand of enable Dale's created gross more organization to we're either good leverage efficient the with drive getting products billings headcount. and us so or able adjusted therefore a teams So to further specialists more infrastructure and really type and our sales around territories, with about same sales

forward the continue So to that incrementally, well any significantly, SG&A into thoughts to see if you of XXXX. but I improve we have not comments. improve continue we'll Dale, think or balance as will as move

Dale Foster

comment Drew. Yeah, Thanks, let me real quick.

We're that. a On business, margin the do where us about lot. in we and margin, doing talk we it can more a far expansion margin as as

the is, So value. of that just you a that? paid -- amount certain ship, when to then value what top we on certain give pack, and you of do What to pick, you What expand margin have do and look do are get to we us margins, business need talked more rest service scale issue and bringing we is important much to marketplace? job we've do. to to that's that this, That So the solutions, that and technical doing internally, things. before the to of can more we it's the about the how

to garner higher-margin? at So a can vendors, we we them the months. what some sign we'll in more next and works for announce that have six we the that's do over we look do things As constantly,

Unidentified

high I number. a increase to going when is on gross SG&A you're tick what as that's Drew, say adjusted not on just to is an zero, up. improved Okay, not SG&A, and It's percentage that as number. mean saying? I drive your to going It's going assume down you're absolute you going

Andrew Clark

as of on yes. yes. Correct, a On percentage but basis a basis, directional gross AGB,

Unidentified

and been Dale, running this think when every maybe taking years company had three-plus you you've now, great. getting walked four the years just focus the And from not you my just focusing done billings job just dollars your as And a and double-digit question doing billion adjusted the themselves, next and for growing giving that, CFO doing of then results for in your boring for door looking for and to and it's another XX quarter, in your everything back that top you've which increase. visibility on said, now and begs level to I started a great speak accounts, question you're Okay, gross XX% the is guidance. business the

I forward now it next company giving give I'll quarters. really billion-dollar I investors then happening. is solid to to call, not And in you going a it encourage do billing out to it, it seems ability next and where looking And you've but thing accounts maybe see this double-digit now to what's X.X, a look target, give really is position? gotten think four is the this guidance or do expansion. specific at you to and XX% accounting acquisitions, will when you model you and talking getting perspective target, or gross AGB really what ask a can could numbers start business Without start when I'm continuing? see you to the it you're, XX top about at adjusted do some can that really and see gross you're you year revenue XX% growth two the -- focused where for but is and your that your in this here, be to us billion this trend geographic point the get is three now Its for more adjusted plan on your billings billion, about

Dale Foster

Yes.

we of a I'll talked of talk and had comes meeting in talked because this the good a that this On about Directors have different that. lot week, it week, board backgrounds. Board front, -- we from guidance our We've earlier about we

So of talking point. it's it becoming a gets discussed, much more

that and we on vendor of on million some sales calling see I as bring off in just next pick or our question, we emerging, gross trying wide some far good pick wanted where X to resellers. quarters move can more that. $X needle think transformative your because vendors as products two see million year, last have Tier $X net And more approach we're group per talk that, But it, I've a call, you'll are XX. with to the growth a I said to in that that Tier we're specifically more to off, can we'll but need to about we're have and that the of on. think the trying to I It to is to we us who we company. the not XX X,

internally, So that's things that's low Like we on we what give don't what see. but rate, that you're I but have said, focus going guidance, we to growth fix. double-digits, some to

or And of to be company but the the can to built months that we're we sure years, more we've point, make inflection the systems that systems in that level we and believe And the but we we can point over now feel still in his we kicked efficiently. not that the and to scaling continue don't at onboard right it it to transact coming, right our line going we our to couple that and real customers, have to going to. transformative the ago, great company get yet size keep off are vendors, We a so we're off. be that's have onboard able team new for ERP at implementation we're SG&A I kicking a Drew scale. -- have we're we at that to actually

Unidentified

to a huge, that business this So company segment just to maximum gross of got follow, acquisitions, potentially five-year what a do you getting or to see up as your that. Is is this but is the market to to the transformative this billion -- adjusted smaller is in growth size-wise, is this rate. end billings acquire excluding get where to you continue see at this you've grow do a plan $X

Dale Foster

a combination. It's

The want us targets we in what in doing we're acquire because I we to by and and top adjacent those the organic, pockets wouldn't just is distributors, if gone, three the said big that can between the a be states It's are the Synnex Tech different of Aero And like we we're Data's to Aero we good it's going yeah, before, the gap just $XX look is But there. billion, other acquire going be huge going But move that say going there. geographies. Now to of $XX markets and five-years, of on which in think and and are get into that look at to billion then not I going -- $XXs we or be at you in could to there's targets the of do State, some smallest that's $X IT into. outside us do. you outside that there's Ingram and so all billion. norm have acquisitions,

just billing, our lot, areas increase adjusted It gross want to but So a can. keep a what. there's to we try we And to not do customer we won't matter show entangled that driving want we margins sales because don't want we We our want show that's and what mantra but want in that we XX go expand that years, up more and become do certain to both. to keep to as XX orders. customers for no that we we're overall, going it'll same up want. pockets I with our and

Dale Foster

Howard? you Did that lose

Unidentified

Yeah.

You there. cut out

kind and replays I you listen call, of you there's quarter, Congratulations next as if can. think minutes it I as of great encourage know, just to but always on and I much most spend anything that about the the couple the you forward long-term, caught talking about I of guidance a I Sorry a going company missed. and

Dale Foster

it. got You

Andrew Clark

we a did our we three earnings directional call. next some uber be so least and have to butt fly we're to over on we sort because of years, sort looking won't some, be that QX sense a we'll of to of must some you deep and our have guidance say the board, to absolutely forward will Howard, but a dive starting all at the thoughts provide the you I'd market trends will two specific the strategic to been after as session referenced, hate but wall guidance, directional absolutely we Dale with share guideposts,

Unidentified

Thanks, quarter. guys. Great

Dale Foster

Thank you.

Operator

go Bruce from Our private investor. a comes next question Please Lindermann, ahead.

Unidentified

me job taken over. to my thank with done since you over this for are Hi, XX over wife want the great -- for shareholders We you've and you've years. company

liquidity there's Our the very -- very, problematic. is question very is,

it's Sometimes more shares that especially that or they've more to stock to it during got trading because to and to number a it and your might get also thoughts? make are $X some to descent the have though least be some be give it's a get even be maybe -- liquidity, $X market And to shares get at possible of into they attract split investors, day. institutions, liquidity. to the so able able could stock us at levels, not these split fashionable What

Dale Foster

I but it to gets about it as it We company exact haven't Bruce. goes, up far various it is forward, in as talk with and we're the we go is. not Thanks, meetings what made the the is it's that come tell bidding XX comment you exact like far saying, can as hey, discussed, going the as you plan

good can at and is look and go. we We the we that hey, different will it think levers people where is stock value the company going pull, say, that this -- a to look our at

personally to go, -- shareholders, every the and strategic to far I in our tell up Board, So and on just part and we're to meeting came we comes week more we as look what's that to almost was liquidity on business going our driving meeting. focused so with up need we're need of that as do the this -- we're important and side. can work you just where guidance

we hear today. you have don't for answer you, So we

Unidentified

you, thank everything. for guys, listen, -- That's

Thank a you. very done nice You've job.

Dale Foster

Thanks, You got it. Bruce.

Operator

to the concludes like the I session. question-and-answer over remarks. closing Mr. This for would turn conference back any Foster

Dale Foster

difference. you, stakeholders all you we especially call our thank thanking great go, global Thank to We a growing a this I'd we to are book employee Operator. count. Wherever got and like making just close of our team.

more more company's that. so you'll is Climb you new U.S. stakeholders. of and of out and names all our and Thank see our the prevalent more is and attraction, our there. GrayMatter to more getting all see transformation You'll in very

Operator

conference concludes This today's call.

your You a and pleasant you day. for Thank have participating lines. may disconnect

Climb Global Solutions (CLMB) 6 May 222022 Q1 Earnings call transcript