Climb Global Solutions Inc (CLMB) 2015 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.

Please note that all callers are limited to one question each.

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

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

Ms. Caponigro, you may begin your conference at this time.

Thank you and good morning.

Welcome to Wayside Technology's fourth-quarter 2015 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 comment about the webcast for this earnings call.

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

Eastern time Thursday, February 4, 2016.

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 a rebroadcast will be available at www.waysidetechnology.com/earnings-call.

This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, February 5, 2016.

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

Wayside Technology Group, Inc.

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

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

Thank you, Melanie, and good morning to everybody.

Working hard, great team, exciting times.

Whereas our much larger peers reported either anemic growth or declining sales, our revenue, again, increased 6% to $100 million in Q4.

2015 was another strong year for Wayside, as sales increased 12% to a record $382 million, and gross profit came in at a record $26.6 million -- a great achievement.

In 2015, we invested heavily in additional sales staff for our Lifeboat Division.

We continued to execute our strategy of increased market penetration and adding new product lines to our portfolio.

We bought back a total of approximately 274,000 shares in 2015, and we still have approximately 458,000 shares of common stock available for future repurchases.

We will continue to buy back shares according to our 10b-5 stock repurchase plan.

Cash and long-term receivables amounted to more than one-third of our market cap of $31.2 million compared to $30.8 million at the end of December last year.

Cash and long-term receivables represented 81% of equity and amounted to $6.64 per share as of the end of December 2015.

Working capital amounted to $31 million or 79% of our equity.

Passion and execution -- we have signed on a lot of software publishers and we are excited about the prospect of more software publishers joining us.

We continued to invest in our team in Q4, and we expect to continue to do so, all in order to manage the expected growth of our Company.

Our pipeline of new vendors, I said, is strong, and we look forward to 2016.

Now I would like to hand it over to Bill Botti, our Executive Vice President.

Bill?

Thank you, Simon.

As noted in our release, we had a strong year overall and a solid Q4.

Net sales for the fourth quarter, ended December 31, 2015, increased 6% to $99.8 million compared to $94.1 million for the same period in 2014.

Net sales for the fourth quarter of our Lifeboat Distribution segment were $89.4 million compared to $83.8 million in the fourth quarter of 2014, representing an increase of 7%.

Net sales for the fourth quarter of 2015 for our TechXtend segment were $10.4 million compared to $10.3 million in the fourth quarter of 2014.

Net sales for the year ended December 31, 2015 increased 12% to $382 million compared to $340 million in 2014.

Net sales for our Lifeboat Distribution segment in 2015 were a record $339.7 million compared to $290.4 million in 2014, representing a 17% increase.

Total sales for TechXtend segment in 2015 amounted to $42.4 million compared to $50.3 million in 2014, representing a decrease of 16%.

Gross profit for our Lifeboat Distribution segment for the fourth quarter of 2015 and 2014 was $5.7 million, when gross profit for our TechXtend segment for the fourth quarter of 2015 is $1.2 million compared to $1.2 million in the fourth quarter of 2014, representing a small decrease.

Gross profit for our Lifeboat Distribution segment in 2015 was $21.5 million compared to $19.2 million in 2014, representing a 12% increase.

The increase in gross profit for the Lifeboat segment was due to increased sales volume.

Gross profit for our TechXtend segment in 2015 was $5 million compared to $5.6 million in 2014, representing a 10% decrease.

The decrease in gross profit for TechXtend segment was a result of decreased sales volume, offset in part by higher gross margins in 2015 as compared to 2014.

2016 was a record year with increases in revenue and gross profits.

We invested heavily in expansion of a new office in Phoenix, expanding our sales and engineering teams, and building a robust new vendor process to accelerate the onboarding of new vendors, which you can see in the several added recently, including Sykotic, Intelligent ID, and TetherView, and there are more to be added soon as well.

These investments caused our increase in SG&A, offset the increased gross profits, and laid the foundation for the execution of our growth strategy in 2016.

There are several additional vendor announcements coming over the next few weeks as we prepare to bring them to market in 2016, and as we continue to build out our solutions strategy.

We continue to manage our expenses and build our product portfolio to help achieve our growth targets.

Thank you.

Simon, back to you.

Thank you, Bill.

Kevin Scull will now report on the financial numbers.

Kevin?

Thank you, Simon, and good morning, everyone.

Since Bill already discussed sales and gross margin by segment, I will start with SG&A.

Total SG&A expenses for the fourth quarter of 2015 were $4.5 million compared to $4.2 million in the prior year.

Total SG&A expenses for 2015 were $18.1 million compared to $16.5 million last year, representing an increase of $1.6 million or 9.4%.

This increase is primarily the result of an increase in employee and employee-related expenses to support our growth in our Lifeboat Distribution segment.

SG&A expenses as a percentage of sales were 4.7% in 2015 compared to 4.8% in 2014.

Our net income for the fourth quarter of 2015 was $1.6 million compared to $1.8 million in the prior year.

Earnings-per-share on a fully diluted basis were $0.35 per-share compared to $0.39 in the prior year.

Now moving on to the balance sheet.

Compared to our balance sheet at December 31, 2014, the following key accounts had fluctuation.

Cash was a healthy $23.8 million at year-end compared to $23.1 million at the prior year-end.

This increase was primarily composed of $7.3 million of cash provided from operations net of non-cash charges and a decrease in accounts receivable, offset in part by dividend payments of $3.2 million and $4.6 million of purchases and treasury stocks during the year.

Accounts receivable, current and long-term, decreased by 3% on lower levels of receivables related to extended-term transactions due to the decline in these transactions over the last two years.

As of year-end, we have no outstanding balances under the credit line -- credit facility.

Working capital at year-end was $31 million.

During the quarter, we purchased approximately 33,000 shares of our common stock under our 10b5-1 plan.

We still have Board authorization to repurchase up to approximately 458,000 shares.

Our stockholder equity now stands at $38.7 million.

At our February 2, 2016 Board meeting, the Board of Directors declared a $0.17 per-share dividend for its common stock, payable on February 26 to shareholders of record on February 16, 2016.

The Company has now paid dividends consecutively for the last 52 quarters.

In conclusion, the Company continues to have solid operating results, a strong balance sheet, and is adequately capitalized to support our continued growth plans.

I want to personally thank all of our team members worldwide.

Simon, I turn it back to you.

Thank you, Kevin.

Before starting the Q&A session, I would just like to state again that we remain focused on providing our customers with excellent customer service, providing our employees with a great and rewarding working environment.

With a B/E multiple of about 14 times, a current yield of about 3.8%, and over $31 million, more than a third of our market cap, in cash and long-term receivables, we are confident in the performance of our stock price.

Thank you, operator.

We can now start the Q&A session.

(Operator Instructions) I am showing no questions at this time.

We thank you for your interest in our Company, and we look forward to reporting our progress in the end of April this year.

Thank you.

This concludes today's conference call.

You may disconnect at this time, and thank you for your participation.