Wayside Technology Group Reports First Quarter 2022 Results
Wayside Technology Group, Inc. (NASDAQ: WSTG) reported strong Q1 2022 results, with net sales rising 14% to $71.3 million and net income climbing 79% to $2.7 million ($0.61 per share). Adjusted EBITDA increased 61% to $4.2 million, reflecting effective margin growth driven by organic growth and new vendor onboarding. SG&A expenses decreased as a percentage of net sales, contributing to improved financial performance. Cash reserves grew to $37.0 million, and the company remains debt-free.
- Net sales increased 14% to $71.3 million.
- Net income surged 79% to $2.7 million or $0.61 per share.
- Adjusted EBITDA rose 61% to $4.2 million.
- SG&A expenses decreased as a percentage of net sales to 12.1%.
- Cash and cash equivalents increased to $37.0 million.
- None.
Continued Operating Leverage Drives
EATONTOWN, N.J., May 05, 2022 (GLOBE NEWSWIRE) -- Wayside Technology Group, Inc. (NASDAQ: WSTG) (“Wayside” or the “Company”), a value-added global IT channel company providing innovative sales and distribution solutions for emerging technology vendors, is reporting results for the first quarter ended March 31, 2022.
First Quarter 2022 Highlights vs. Same Year-Ago Quarter
- Net sales increased
14% to$71.3 million . - Adjusted gross billings (a non-GAAP financial measure defined below) increased
13% to$238.7 million . - Gross profit increased
11% to$12.0 million . - Net income increased
79% to$2.7 million or$0.61 per diluted share. - Adjusted EBITDA (a non-GAAP financial measure defined below) increased
61% to$4.2 million .
Management Commentary
“Our momentum from the end of last year has carried into the first quarter, as reflected by another period of record results and meaningful operating leverage,” said CEO Dale Foster. “Net sales and gross profit were up low double-digits, however net income and adjusted EBITDA increased more than
“These results were driven by continued execution of our core initiatives – generating organic growth with existing vendors and customers while adding new emerging vendors to our line card. In Q1, we grew billings with our top 20 vendors by nearly
“As we look to the remainder of the year, we have a solid foundation in place to continue driving organic growth and improve our operating leverage. We also remain active in our M&A strategy as we are evaluating multiple targets that can enhance our geographic footprint, service and solution offerings, and we look forward to delivering on both our organic and inorganic growth objectives in 2022.”
Dividend
Subsequent to the quarter end, on May 3, 2022, Wayside’s board of directors declared a quarterly dividend of
First Quarter 2022 Financial Results
Net sales in the first quarter of 2022 increased
Gross profit in the first quarter of 2022 increased
Total selling, general, and administrative (“SG&A”) expenses in the first quarter of 2022 were
Net income in the first quarter of 2022 increased
Adjusted EBITDA in the first quarter of 2022 increased
Net income as a percentage of gross profit for the first quarter of 2022 was
Cash and cash equivalents increased to
Conference Call
The Company will conduct a conference call tomorrow, May 6, 2022, at 8:30 a.m. Eastern time to discuss its results for the first quarter ended March 31, 2022.
Wayside management will host the conference call, followed by a question-and-answer period.
Date: Friday, May 6, 2022
Time: 8:30 a.m. Eastern time
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10019052
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Elevate IR at (720) 330-2829.
The conference call will be broadcast live and available for replay here and on the investor relations section of the Company’s website at www.waysidetechnology.com.
About Wayside Technology Group
Wayside Technology Group, Inc. (NASDAQ: WSTG) is a value-added IT distribution and solutions company specializing in emerging and disruptive technologies. Wayside operates across the US, Canada and Europe through multiple business units, including Climb Channel Solutions, Grey Matter and CloudKnowHow. The Company provides IT distribution and solutions for emerging companies in the Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries.
Additional information can be found by visiting www.waysidetechnology.com.
Non-GAAP Financial Measures
Wayside Technology uses non-GAAP financial measures, including adjusted gross billings 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 Wayside’s financial results under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The attached tables provide 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 concerning the Company’s future prospects are forward-looking statements that involve certain risks and uncertainties. In this press release, forward-looking statements can be identified by words such as “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, 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, contribution of key vendor relationships and support programs, inflation, as well as factors that affect the software industry in general and other factors. Currently, one of the most significant factors, however, is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the Company, the global economy, and financial markets. The extent to which COVID-19 impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, including the impact on the Company’s reseller partners and the end customer markets they serve, among others. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described 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@waysidetechnology.com
Investor Relations Contact
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
WSTG@elevate-ir.com
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(Amounts in thousands, except share and per share amounts) | ||||||||
March 31, 2022 | December 31, 2021 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 37,047 | $ | 29,272 | ||||
Accounts receivable, net of allowance for doubtful accounts of | 114,331 | 122,502 | ||||||
Inventory, net | 1,742 | 2,022 | ||||||
Vendor prepayments and advances | 760 | 661 | ||||||
Prepaid expenses and other current assets | 4,372 | 4,871 | ||||||
Total current assets | 158,252 | 159,328 | ||||||
Equipment and leasehold improvements, net | 1,937 | 1,932 | ||||||
Goodwill | 16,860 | 17,188 | ||||||
Other intangibles, net | 9,597 | 9,950 | ||||||
Right-of-use assets, net | 1,572 | 1,628 | ||||||
Accounts receivable long-term, net | 59 | 78 | ||||||
Other assets | 417 | 459 | ||||||
Deferred income tax assets | 76 | 189 | ||||||
Total assets | $ | 188,770 | $ | 190,752 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 130,805 | $ | 134,271 | ||||
Lease liability, current portion | 498 | 475 | ||||||
Total current liabilities | 131,303 | 134,746 | ||||||
Lease liability, net of current portion | 1,704 | 1,810 | ||||||
Deferred income tax liabilities | 1,826 | 1,780 | ||||||
Non-current liabilities | 28 | — | ||||||
Total liabilities | 134,861 | 138,336 | ||||||
Stockholders’ equity | ||||||||
Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares | ||||||||
issued, and 4,447,053 and 4,424,672 shares outstanding , respectively | 53 | 53 | ||||||
Additional paid-in capital | 31,954 | 32,087 | ||||||
Treasury stock, at cost, 837,447 and 859,828 shares, respectively | (13,584 | ) | (13,870 | ) | ||||
Retained earnings | 36,362 | 34,396 | ||||||
Accumulated other comprehensive loss | (876 | ) | (250 | ) | ||||
Total stockholders’ equity | 53,909 | 52,416 | ||||||
Total liabilities and stockholders’ equity | $ | 188,770 | $ | 190,752 | ||||
WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||
(Unaudited) | |||||||||
(Amounts in thousands, except per share data) | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2022 | 2021 | ||||||||
Net Sales | $ | 71,319 | $ | 62,813 | |||||
Cost of sales | 59,338 | 51,970 | |||||||
Gross profit | 11,981 | 10,843 | |||||||
Selling, general and administrative expenses | 8,249 | 8,412 | |||||||
Amortization & depreciation expense | 357 | 399 | |||||||
Total selling, general and administrative expenses | 8,606 | 8,811 | |||||||
Income from operations | 3,375 | 2,032 | |||||||
Interest, net | (10 | ) | 10 | ||||||
Foreign currency transaction gain (loss) | 143 | (91 | ) | ||||||
Income before provision for income taxes | 3,508 | 1,951 | |||||||
Provision for income taxes | 796 | 431 | |||||||
Net income | $ | 2,712 | $ | 1,520 | |||||
Income per common share - Basic | $ | 0.61 | $ | 0.35 | |||||
Income per common share - Diluted | $ | 0.61 | $ | 0.35 | |||||
Weighted average common shares outstanding - Basic | 4,309 | 4,247 | |||||||
Weighted average common shares outstanding - Diluted | 4,309 | 4,247 | |||||||
Dividends paid per common share | $ | 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): | |||||||
Three months ended | |||||||
Adjusted Gross Billings (Non-GAAP) (1) | March 31, | March 31, | |||||
2022 | 2021 | ||||||
Net sales | $ | 71,319 | $ | 62,813 | |||
Costs of sales related to sales where the Company is an agent | 167,378 | 148,048 | |||||
Adjusted gross billings (Non-GAAP) | $ | 238,697 | $ | 210,861 | |||
(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 (2): | |||||||||
Three months ended | |||||||||
March 31, | March 31, | ||||||||
Net income reconciled to adjusted EBITDA: | 2022 | 2021 | |||||||
Net income | $ | 2,712 | $ | 1,520 | |||||
Provision for income taxes | 796 | 431 | |||||||
Depreciation and amortization | 357 | 399 | |||||||
Interest expense | 15 | 18 | |||||||
EBITDA | 3,880 | 2,368 | |||||||
Share- based compensation | 369 | 279 | |||||||
Adjusted EBITDA | $ | 4,249 | $ | 2,647 | |||||
Three months ended | |||||||||
March 31, | March 31, | ||||||||
Components of interest, net | 2022 | 2021 | |||||||
Amortization of discount on accounts receivable with extended payment terms | $ | (3 | ) | $ | (25 | ) | |||
Interest income | (2 | ) | (3 | ) | |||||
Interest expense | 15 | 18 | |||||||
Interest, net | $ | 10 | $ | (10 | ) | ||||
(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.
FAQ
What were Wayside Technology's Q1 2022 net sales?
How much did net income increase for WSTG in Q1 2022?
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