• Climb Global Solutions Reports Fourth Quarter and Full Year 2023 Results

    来源: Nasdaq GlobeNewswire / 28 2月 2024 15:05:01   America/Chicago

    Q4 2023 Net Sales, Net Income, Adjusted EBITDA and EPS Increase to Record Levels

    FY 2023 Net Sales Increased 16% to a Record $352.0 Million with Net Income of $12.3 Million or $2.72 per Share; FY Adjusted EBITDA up 16% to $24.6 Million

    EATONTOWN, N.J., Feb. 28, 2024 (GLOBE NEWSWIRE) -- Climb Global Solutions, Inc. (NASDAQ:CLMB) (“Climb”, the “Company”, “we”, or “our”), a value-added global IT channel company providing unique sales and distribution solutions for innovative technology vendors, is reporting results for the fourth quarter and full year ended December 31, 2023.

    Fourth Quarter 2023 Summary vs. Same Year-Ago Quarter

    • Net sales increased 20% to $106.8 million.
    • Adjusted gross billings (a non-GAAP financial measure defined below) increased 24% to $397.0 million.
    • Net income increased 10% to $5.2 million or $1.15 per diluted share.
    • Adjusted EBITDA (a non-GAAP financial measure defined below) increased 24% to $9.2 million.

    FY 2023 Summary vs. FY 2022

    • Net sales increased 16% to $352.0 million.
    • Adjusted gross billings increased 18% to $1.3 billion.
    • Net income was $12.3 million or $2.72 per diluted share, compared to $12.5 million or $2.81 per diluted share. Excluding a one-time CEO stock grant, net income increased 13% to $14.1 million or $3.13 per diluted share.
    • Adjusted EBITDA increased 16% to $24.6 million.

    Management Commentary

    “Our Q4 performance capped off an exceptional year for Climb as we generated quarterly records across all key financial metrics, while delivering on our acquisition objectives,” said CEO Dale Foster. “These results were driven by the execution of our core initiatives and the integration of DataSolutions, which was acquired in October 2023 and was immediately accretive to earnings. We also continued to generate organic growth in both the U.S. and Europe as we deepened relationships with current customers while adding new, cutting-edge technologies to our line card.

    “Looking ahead, our strategy remains unchanged: leverage our global infrastructure to drive organic growth while executing our M&A initiatives. We will continue to evaluate opportunities to expand our geographic footprint, as well as our service and solutions offerings. Between our robust balance sheet, a growing pipeline of prospective vendors and a demonstrated track record of accretive M&A, we are well positioned to continue driving shareholder value.”

    Dividend

    Subsequent to quarter end, on February 27, 2024, Climb’s Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable on March 15, 2024, to shareholders of record on March 11, 2024.

    Fourth Quarter 2023 Financial Results

    Net sales in the fourth quarter of 2023 increased 20% to $106.8 million compared to $88.9 million for the same period in 2022. This reflects organic growth from new and existing vendors, as well as contribution from the Company’s acquisition of DataSolutions Holdings Limited (“DataSolutions”) in October 2023. In addition, adjusted gross billings in the fourth quarter of 2023 increased 24% to $397.0 million compared to $319.8 million in the year-ago period.

    Gross profit in the fourth quarter of 2023 increased 31% to $21.1 million compared to $16.1 million for the same period in 2022. The increase was driven by organic growth from new vendors and the Company’s top 20 vendors in both North America and Europe, as well as contribution from DataSolutions.

    Selling, general, and administrative (“SG&A”) expenses in the fourth quarter of 2023 were $12.4 million compared to $9.1 million in the year-ago period. SG&A as a percentage of adjusted gross billings was 3.1% for the fourth quarter of 2023 compared to 2.9% in the year-ago period.

    Net income in the fourth quarter of 2023 increased 10% to $5.2 million or $1.15 per diluted share, compared to $4.8 million or $1.06 per diluted share for the same period in 2022. The Company’s earnings per diluted share in the fourth quarter of 2023 was negatively impacted by $0.09 in FX and $0.06 in acquisition fees associated with DataSolutions.

    Adjusted EBITDA in the fourth quarter of 2023 increased 24% to $9.2 million compared to $7.4 million for the same period in 2022. The increase was driven by the aforementioned organic growth, as well as contribution from DataSolutions. Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit, was 43.7% compared to 45.9% for the same period in 2022.

    On December 31, 2023, cash and cash equivalents were $36.3 million compared to $20.2 million on December 31, 2022, while working capital decreased by $4.5 million during this period. The increase in cash was primarily attributed to the timing of receivable collections and payables, partially offset by the cash paid for the acquisition of DataSolutions (net of cash acquired) of $12.7 million. Climb had $1.3 million of outstanding debt on December 31, 2023, with no borrowings outstanding under its $50 million revolving credit facility.

    For more information on the non-GAAP financial measures discussed in this press release, please see the section titled, “Non-GAAP Financial Measures,” and the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.

    Conference Call

    The Company will conduct a conference call tomorrow, February 29, 2024, at 8:30 a.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023.

    Climb management will host the conference call, followed by a question-and-answer period.

    Date: Thursday, February 29, 2024
    Time: 8:30 a.m. Eastern time
    Toll-free dial-in number: (877) 407-9716
    International dial-in number: (201) 493-6779
    Conference ID: 13744515
    Webcast: Climb’s Q4 & FY 2023 Conference Call

    If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.

    The conference call will also be available for replay on the investor relations section of the Company’s website at www.climbglobalsolutions.com.

    About Climb Global Solutions

    Climb Global Solutions, Inc. (NASDAQ:CLMB) is a value-added global IT distribution and solutions company specializing in emerging and innovative technologies. Climb operates across the US, Canada and Europe through multiple business units, including Climb Channel Solutions, Grey Matter and Climb Global Services. The Company provides IT distribution and solutions for companies in the Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries.

    Additional information can be found by visiting www.climbglobalsolutions.com.

    Non-GAAP Financial Measures

    Climb Global Solutions uses non-GAAP financial measures, including adjusted gross billings, adjusted net income and adjusted EBITDA, as supplemental measures of the performance of the Company’s business. Use of these financial measures has limitations, and you should not consider them in isolation or use them as substitutes for analysis of Climb’s financial results under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The attached tables provide definitions of these measures and a reconciliation of each non-GAAP financial measure to the most nearly comparable measure under U.S. GAAP.

    Forward-Looking Statements

    The statements in this release, other than statements of historical fact, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These forward-looking statements are subject to certain risks and uncertainties. In this press release, many of the forward-looking statements may be identified by words such as ”look forward,” “believes,” “expects,” “intends,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “under construction,” “in development,” “opportunity,” “target,” “outlook,” “maintain,” “continue,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations. Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include, without limitation, our ability to recognize the anticipated benefits of the acquisition of DataSolutions, the continued acceptance of the Company’s distribution channel by vendors and customers, the timely availability and acceptance of new products, product mix, market conditions, competitive pricing pressures, the successful integration of acquisitions, contribution of key vendor relationships and support programs, inflation, as well as factors that affect the software industry in general. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described in the section entitled “Risk Factors” contained in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and from time to time in the Company’s filings with the Securities and Exchange Commission.

    Company Contact

    Drew Clark
    Chief Financial Officer
    (732) 389-0932
    Drew@ClimbGS.com

    Investor Relations Contact

    Sean Mansouri, CFA
    Elevate IR
    (720) 330-2829
    CLMB@elevate-ir.com

         
    CLIMB GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (Amounts in thousands, except share and per share amounts)
         
      December 31, 2023 December 31, 2022
         
    ASSETS
         
    Current assets    
    Cash and cash equivalents $36,295  $20,245 
    Accounts receivable, net of allowance for doubtful accounts of $709 and $842, respectively  222,269   154,596 
    Inventory, net  3,741   4,766 
    Vendor prepayments and advances     890 
    Prepaid expenses and other current assets  6,755   4,141 
    Total current assets  269,060   184,638 
         
    Equipment and leasehold improvements, net  8,850   3,515 
    Goodwill  27,182   18,963 
    Other intangibles, net  26,930   19,693 
    Right-of-use assets, net  878   1,235 
    Accounts receivable long-term, net  797   3,114 
    Other assets  1,077   350 
    Deferred income tax assets  324   348 
         
    Total assets $335,098  $231,856 
         
    LIABILITIES AND STOCKHOLDERS' EQUITY
         
    Current liabilities    
    Accounts payable and accrued expenses $249,648  $160,650 
    Lease liability, current portion  450   521 
    Term loan, current portion  540   520 
    Total current liabilities  250,638   161,691 
         
    Lease liability, net of current portion  879   1,296 
    Deferred income tax liabilities  5,554   4,137 
    Term loan, net of current portion  752   1,292 
    Non-current liabilities  2,505   2,866 
         
    Total liabilities  260,328   171,282 
         
         
    Stockholders' equity    
    Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares    
    issued, and 4,573,448 and 4,478,432 shares outstanding , respectively  53   53 
    Additional paid-in capital  34,647   32,715 
    Treasury stock, at cost, 711,052 and 806,068 shares, respectively  (12,623)  (13,230)
    Retained earnings  53,215   43,904 
    Accumulated other comprehensive loss  (522)  (2,868)
    Total stockholders' equity  74,770   60,574 
    Total liabilities and stockholders' equity $335,098  $231,856 


    CLIMB GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
    (Unaudited)
    (Amounts in thousands, except per share data)
             
      Year ended Three months ended
      December 31, December 31,
       2023   2022   2023   2022 
             
    Net Sales $352,013  $304,348  $106,783  $88,905 
             
    Cost of sales  287,766   250,254   85,713   72,794 
             
    Gross profit  64,247   54,094   21,070   16,111 
             
             
    Selling, general and administrative expenses  44,330   34,144   12,400   9,120 
    Depreciation & amortization expense  2,798   2,054   864   697 
    Acquisition related costs  629   582   352   137 
    Total selling, general and administrative expenses  47,757   36,780   13,616   9,954 
             
    Income from operations  16,490   17,314   7,454   6,157 
             
    Interest, net  927   159   168   118 
    Foreign currency transaction gain (loss)  (636)  (941)  (536)  (142)
    Income before provision for income taxes  16,781   16,532   7,086   6,133 
    Provision for income taxes  4,458   4,035   1,840   1,372 
             
    Net income $12,323  $12,497  $5,246  $4,761 
             
    Income per common share - Basic $2.72  $2.81  $1.15  $1.06 
    Income per common share - Diluted $2.72  $2.81  $1.15  $1.06 
             
    Weighted average common shares outstanding - Basic 4,401   4,331   4,427   4,355 
    Weighted average common shares outstanding - Diluted  4,401   4,331   4,427   4,355 
             
    Dividends paid per common share $0.68  $0.68  $0.17  $0.17 


    Reconciliation of GAAP and Non-GAAP Financial Measures (unaudited)
    (Amounts in thousands, except per share data)
             
    The table below presents net sales reconciled to Adjusted Gross Billings (Non-GAAP) (1):
             
      Year ended Three months ended
      December 31,December 31, December 31, December 31,
       2023   2022   2023   2022 
    Net sales $352,013  $304,348  $106,783  $88,905 
    Costs of sales related to sales where the Company is an agent  908,369   760,310   290,260   230,939 
    Adjusted gross billings (Non-GAAP) $1,260,382  $1,064,658  $397,043  $319,844 
     
    (1) We define adjusted gross billings as net sales in accordance with US GAAP, adjusted for the cost of sales related to sales where the Company is an agent. We provided a reconciliation of adjusted gross billings to net sales, which is the most directly comparable US GAAP measure. We use adjusted gross billings of product and services as a supplemental measure of our performance to gain insight into the volume of business generated by our business, and to analyze the changes to our accounts receivable and accounts payable. Our use of adjusted gross billings of product and services as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate adjusted gross billings of product and services or similarly titled measures differently, which may reduce their usefulness as comparative measures.


    The table below presents net income reconciled to adjusted EBITDA (Non-GAAP) (2):
             
      Year ended Three months ended
      December 31,December 31, December 31, December 31,
       2023   2022   2023   2022 
             
    Net income $12,323  $12,497  $5,246  $4,761 
    Provision for income taxes  4,458   4,035   1,840   1,372 
    Depreciation and amortization  2,798   2,054   864   697 
    Interest expense  264   71   170   16 
    EBITDA  19,843   18,657   8,120   6,846 
    Share-based compensation  4,148   1,897   726   406 
    Acquisition related costs  629   582   352   137 
    Adjusted EBITDA $24,620  $21,136  $9,198  $7,389 
             
             
      Year ended Three months ended
      December 31,December 31, December 31, December 31,
    Components of interest, net  2023   2022   2023   2022 
             
    Amortization of discount on accounts receivable with extended payment terms $(50) $(109) $(9) $(66)
    Interest income  (1,141)  (121)  (329)  (68)
    Interest expense  264   71   170   16 
    Interest, net $(927) $(159) $(168) $(118)
     
    (2) We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation and interest. We define effective margin as adjusted EBITDA as a percentage of gross profit. We provided a reconciliation of adjusted EBITDA to net income, which is the most directly comparable US GAAP measure. We use adjusted EBITDA as a supplemental measure of our performance to gain insight into our businesses profitability when compared to the prior year and our competitors. Adjusted EBITDA is also a component to our financial covenants in our credit facility. Our use of adjusted EBITDA has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, or similarly titled measures differently, which may reduce their usefulness as comparative measures.


    The table below presents net income reconciled to net income excluding one-time CEO stock grant (Non-GAAP) (3):
             
      Year ended Three months ended
      December 31,December 31, December 31, December 31,
       2023   2022   2023   2022 
             
    Net income $12,323  $12,497  $5,246  $4,761 
    One-time CEO stock grant  1,796   -   -   - 
    Net income excluding one-time CEO stock grant $14,119  $12,497  $5,246  $4,761 
             
    Net income excluding one-time CEO stock grant per common share - diluted $3.13  $2.81  $1.15  $1.06 
     
    (3) We define net income excluding one-time CEO stock grant as net income, plus the stock compensation expense recognized for the one-time CEO stock grant. We provided a reconciliation of net income excluding one-time CEO stock grant to net income, which is the most directly comparable U.S. GAAP measures. We use net income excluding one-time CEO stock grant as a supplemental measure of our performance to gain insight into comparison of our businesses profitability when compared to the prior year. Our use of net income excluding one-time CEO stock grant has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate one-time CEO stock grant, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

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