Climb Global Solutions Inc (CLMB) 2009 Q4 法說會逐字稿

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 and instructions will follow at that time.

(Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded.

I would now like to introduce your host for today's conference, Natalie Turner.

Ms.

Turner, you may begin your conference at this time.

Thank you and good morning.

Welcome to Wayside Technology's fourth-quarter 2009 earnings call.

Before turning the call over to Simon Nynens, the Company's Chairman and CEO, I will dispense with the customary cautionary language and comments about the webcast for this earnings call.

We released earnings for the fourth quarter at approximately 5 p.m.

Eastern time, Thursday, February 4, 2010.

The earnings release is available at the Company's investor relations website at WaysideTechnology.com.

Today's call, including all questions and answers, is being webcast live and can be accessed via the website earnings.com.

A rebroadcast of this call will be available at WaysideTechnology.com.

This conference call and the associated webcast contain time sensitive information that is accurate only as of today, February 5, 2010.

A detailed discussion of risks and uncertainties are discussed in our Forms 10-Q and also in greater detail in our Forms 10-K.

Wayside Technology Group, Inc.

assumes no obligation to update and does not intend to update any forward-looking statements.

Now I will turn the call over to Simon.

Thank you, Natalie, and good morning to everybody.

I would like to start this call by thanking all of the people in this room, as well as all of my co-workers here, for delivering solid results for 2009.

We truly set ourselves apart by our talent and passion for winning.

It is because of our team here at Wayside Technology Group that we win.

It's that simple.

We have a great back office team that enables our great sales teams to go out and sell true value, and the results show that passion that all of us have here for winning.

So to all the team here at Wayside Technology Group, thank you for a job well done.

Kevin will discuss the results in detail, but let me make a few comments.

2009 was a challenging year in which we continued to face economic uncertainty.

Yet after the initial universal fear all companies faced at the start of 2009 we decided to stay the course.

We remained focused on adding new publishers, providing our customers with excellent service, and providing our employees with a great and rewarding working environment.

This strategy worked.

We strengthened our position in the software distribution market and continued to sign on new vendors, and as we start 2010 we offer a much more diverse line of software products.

More and more customers, as well as software publishers, realized the value that we delivered to them.

2009 was a year of hard work, transitioning, and solid results.

A word about the performance of our subsidiaries in Q4.

Regarding Programmer's and TechXtend, Q4 of 2009 lacked the opportunity to close many large software deals.

These were a large factor in the increase in Q4 of '08 versus '07.

In Q4 '08 revenue for the Programmer's Paradise segment increased 38% or $4.7 million versus Q4 of '07 mainly due to large deals including finance deals.

Having that said, we are dedicated, knowledgeable, and flexible, and I would also like to stress that the decline in revenue in the Programmer's Paradise business was partly offset by strong growth of our TechXtend business.

We continue to invest in TechXtend selling combined hardware, software, and consultancy services.

Now regarding Lifeboat Distribution.

Lifeboat performed very well.

Many software publishers today are looking for distribution alternatives for their products.

Mainstream distributors see software as an add-on sale to their hardware lines and continue to treat software lines as such.

These distributors typically lead with an ultra-low pricing strategy for software and aim to make their money by charging software publishers all kinds of fees.

We offer software publishers a value alternative.

We know the products we sell and we design our distribution services such that we make our money when we sell the publisher's products, not by charging them a set of extravagant fees.

As a result, the interests of Lifeboat and our software publisher partners are perfectly aligned.

We firmly believe that this is the time to invest in our future growth by reaching out to and recruiting new software publishers and entering new markets.

We just announced that we opened a European sales office in the Netherlands as of February 1, 2010.

Many of our European customers would like to have euro price lists and buy from a distributor inside the European Union.

Software publishers in the US wanted us to be able to deliver the great service for them on a localized basis in Europe as well.

That is now a reality.

Although we cannot influence the larger economic forces that are at work, we do look forward towards 2010 with great confidence in our team.

Kevin Scull will now report on the financial numbers.

Kevin?

Thank you, Simon, and good morning, everyone.

I will discuss our fourth-quarter financial results on a company-wide basis as well as per segment.

Net sales were $42.3 million compared to $40 million last year, representing a 6% increase.

Sales for our Programmer's Paradise segment were $13.4 million compared to $17.3 million last year, representing a 23% decrease.

This decrease was primarily due to fewer large orders during the quarter.

Sales for our Lifeboat segment were $28.9 million compared to $22.7 million last year, representing a 27% increase.

The increase in net sales for our Lifeboat segment was primarily due to new publishers added as well as an increased account penetration with our existing line.

Gross profit was $4.4 million compared to $4.5 million last year.

Gross profit as a percentage of sales was 10.3% compared to 11.2% last year.

The decrease in gross profit margin as a percentage of net sales was primarily caused by the competitive pricing pressure experienced by our Programmer's segment during the quarter.

Gross profit dollars for our Programmer's segment was $1.3 million compared to $2 million last year.

Gross profit for our Lifeboat segment was $3.1 million compared to $2.5 million last year.

Gross profit margin as a percentage of sales for our Programmer's Paradise segment was 9.5% compared to 11.8% last year.

Gross profit margin as a percentage of sales for our Lifeboat segment was 10.6% compared to 10.9% last year.

Total selling, general, and administrative expenses were $3 million compared to $3.1 million last year.

As a percentage of sales SG&A expenses were 7.1% compared to 7.9% last year.

The decrease in SG&A is mainly due to continued cost control.

Direct selling costs for the fourth quarter of 2009 and 2008 remain unchanged at $1.5 million.

Our net income amounted to $900,000 compared to $902,000 last year.

As a percentage of sales our net income was 2.1% compared to 2.2% last year.

On a fully diluted basis earnings per share remained unchanged from the prior year at $0.20 per share.

Now moving on to the balance sheet compared to our year-end balance sheet the following accounts had significant fluctuation.

Cash and marketable securities decreased by $2.6 million to $16.1 million.

Some of the large uses of cash during the year were corporate tax payments of $2 million, dividend payments of $2.8 million, and stock buybacks of $700,000.

Accounts receivable increased by $9.1 million from last year due to increased sales volume in the quarter and in particular December.

Accounts payable increased by $5.8 million on increased sales volumes during the quarter.

Our book value per share is $5.21.

Equity now stands at $24.4 million and cash and marketable securities make up 66% of our equity.

This concludes my remarks.

Simon, back to you.

Thank you.

Operator, we can now start with the Q&A session.

(Operator Instructions) Sir, I am showing no questions in the queue.

That is new for us.

If you are sure there are no questions then I would like to thank everybody for their interest in our company.

Kevin Scull and myself are also available for any questions that anybody might have.

Phone numbers are listed on our website.

Appreciate everybody's interest in our company and we look forward to speaking to you in next quarter.

Thank you.

Ladies and gentlemen, thank you for your participation in today's conference.

This concludes the program.

You may all disconnect.

Everyone have a great day.