Financial Performance - Q1 2024 net sales increased 9% year-over-year to $92.4 million, up from $85.0 million in Q1 2023[3][23] - Adjusted gross billings rose 16% to $355.3 million compared to $306.7 million in the same period last year[3][23] - Gross profit for Q1 2024 was $17.0 million, a 12% increase from $15.2 million in Q1 2023[6] - Net income decreased to $2.7 million or $0.60 per diluted share, down from $3.3 million or $0.74 per diluted share in Q1 2023[3][7] - Adjusted EBITDA for Q1 2024 was $5.5 million, slightly down from $5.7 million in the prior year[3][25] - Net sales for the three months ended March 31, 2024, increased to $92,422 million, up from $85,040 million for the same period in 2023, representing a growth of approximately 5.1%[38] - Gross profit for the same period rose to $17,020 million, compared to $15,209 million in the prior year, reflecting an increase of about 11.9%[38] - Net income decreased to $2,731 million for the three months ended March 31, 2024, down from $3,324 million in 2023, a decline of approximately 17.8%[40] - Adjusted EBITDA for the three months ended March 31, 2024, was $5,538 million, slightly down from $5,681 million in the same period last year, a decrease of about 2.5%[40] Expenses and Costs - SG&A expenses increased to $12.5 million, with DataSolutions contributing $1.1 million to the rise[24] - Total selling, general, and administrative expenses increased to $13,517 million, compared to $10,976 million in the prior year, marking a rise of approximately 23.2%[38] - Interest expense for the three months ended March 31, 2024, was $101 million, significantly higher than $28 million in the same period of 2023[40] - Provision for income taxes was $890 million for the three months ended March 31, 2024, down from $1,065 million in the previous year, a decrease of about 16.4%[40] Cash and Dividends - Cash and cash equivalents as of March 31, 2024, were $43.6 million, up from $36.3 million at the end of 2023[8] - A quarterly dividend of $0.17 per share was declared, payable on May 17, 2024[22] - Dividends paid per common share remained unchanged at $0.17 for both periods[38] Future Outlook - The company plans to remain active in M&A to enhance offerings and expand presence in North America and overseas[21] - The company expects to return to growth with key vendors in the second half of the year[4] Adjusted Metrics - Adjusted gross billings (Non-GAAP) for the three months ended March 31, 2024, reached $355,269 million, up from $306,712 million in 2023, an increase of approximately 15.8%[39] - Weighted average common shares outstanding remained stable at 4,438 million for both basic and diluted shares[38]

EATONTOWN, N.J., April 25, 2024 (GLOBE NEWSWIRE) -- Climb Channel Solutions, an international specialty technology distributor and wholly owned subsidiary of Climb Global Solutions, Inc. (NASDAQ:CLMB), announced the launch of a new partnership with Automox, a leading cloud-native IT automation endpoint management solution, now available to their North American partners. With the addition of Automox, Climb partners can provide customers the capabilities to save time, eliminate risk, and automate the patching ...

EATONTOWN, N.J., April 18, 2024 (GLOBE NEWSWIRE) -- Climb Global Solutions, Inc. (NASDAQ:CLMB) ("Climb" or the "Company"), a value-added global IT channel company providing unique sales and distribution solutions for innovative technology vendors, will host a conference call on Thursday, May 2, 2024 at 8:30 a.m. Eastern time to discuss its financial results for the first quarter ended March 31, 2024. The Company's results will be reported in a press release prior to the call. Climb's management will host th ...

Investors looking for stocks in the Technology Services sector might want to consider either Futu Holdings Limited Sponsored ADR (FUTU) or Climb Global Solutions (CLMB) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings es ...

PART I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Climb Global Solutions operates in IT distribution (92% of net sales) and solutions, expanding vendor base, cloud offerings, and acquisitions - The company operates through two main segments: Distribution (**92% of 2023 net sales**) and Solutions (**8% of 2023 net sales**)[127](index=127&type=chunk)[160](index=160&type=chunk) - The Distribution segment operates on a low gross margin but profitable model by leveraging efficient, scalable systems like drop-shipping and EDI, requiring low capital investment[159](index=159&type=chunk) - Strategic growth is driven by recruiting new software vendors, expanding cloud offerings, and making strategic acquisitions. The company completed the acquisition of Data Solutions in **2023** to expand its footprint in the UK and Ireland[138](index=138&type=chunk)[139](index=139&type=chunk)[162](index=162&type=chunk) - The company competes with large distributors like Arrow Electronics, TD Synnex, and Ingram Micro by offering more flexibility and specialized support for emerging technology vendors[150](index=150&type=chunk) - As of December 31, **2023**, the company had **365 employees**, with **181** in the Americas and **184** in EMEA[198](index=198&type=chunk)[180](index=180&type=chunk) [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, financial, operational, and legal risks, including customer/vendor dependency, intense competition, and cybersecurity threats - The company is highly dependent on a limited number of customers and vendors. In **2023**, the two largest customers accounted for **35% of net sales**, and the top five accounted for **51%**. The top five vendors represented approximately **40% of purchases**[233](index=233&type=chunk)[232](index=232&type=chunk) - The IT industry is intensely competitive, with pressure on pricing from larger competitors and the risk of vendors selling directly to end-users, which could erode market share and margins[208](index=208&type=chunk)[231](index=231&type=chunk) - Acquisitions are a key part of the growth strategy but involve risks such as integration challenges, unanticipated costs, and potential loss of key employees from acquired companies[235](index=235&type=chunk)[212](index=212&type=chunk)[237](index=237&type=chunk) - International operations, which accounted for **26% of net sales in 2023**, expose the company to risks including foreign currency fluctuations, compliance with international laws, and political instability[214](index=214&type=chunk)[11](index=11&type=chunk) - Cybersecurity threats pose a significant risk. A failure to maintain the security of confidential information could lead to business disruption, financial penalties, and reputational damage[191](index=191&type=chunk)[218](index=218&type=chunk) - Financial risks include credit risk associated with offering payment terms to customers, interest rate risk on variable-rate debt, and the potential for goodwill impairment charges if future valuations decline[188](index=188&type=chunk)[217](index=217&type=chunk)[250](index=250&type=chunk) [Item 1C. Cybersecurity](index=32&type=section&id=Item%201C.%20Cybersecurity) The company implements a comprehensive cyber risk management program, overseen by the Board, focusing on prevention, detection, and mitigation - The company employs a layered cybersecurity strategy based on prevention, detection, and mitigation, with policies aligned to NIST, PCI-DSS, and CIS standards[255](index=255&type=chunk) - Oversight is provided by the Board's Risk and Security Committee, with the Chief Information Officer responsible for program implementation and reporting[278](index=278&type=chunk) - All employees are required to complete annual cybersecurity training, and the company conducts periodic penetration tests and simulations to ensure program robustness[278](index=278&type=chunk) - To date, cybersecurity risks have not materially affected the company's business, financial position, or results of operations[279](index=279&type=chunk) [Item 2. Properties](index=32&type=section&id=Item%202.%20Properties) The company's properties include a leased 20,000 sq ft HQ in Eatontown, NJ, other leased offices, and an owned 5,800 sq ft facility in Dublin, Ireland - The corporate headquarters is a leased **20,000 sq. ft.** space in Eatontown, NJ, under a lease expiring in **April 2027**[256](index=256&type=chunk) - The company owns a **5,800 sq. ft.** office and warehouse in Dublin, Ireland, which was acquired with Data Solutions[258](index=258&type=chunk) - Additional leased properties include warehouse space in Eatontown, NJ, and offices in the UK, Colorado, and Maryland[281](index=281&type=chunk) [Item 3. Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, only routine matters incidental to business - The company is not currently a party to any material legal proceedings[509](index=509&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq (CLMB), declared **$0.68** dividends in **2023/2022**, and has an active share repurchase program - The company's common stock is traded on The Nasdaq Global Market under the symbol '**CLMB**'[283](index=283&type=chunk) - Dividends of **$0.68 per share** were declared in both **2023** and **2022**[260](index=260&type=chunk) - As of December 31, **2023**, the company is authorized to repurchase an additional **545,786 shares** under its existing plan. No shares were repurchased during the fourth quarter of **2023**[371](index=371&type=chunk)[286](index=286&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net sales grew **16%** to **$352.0M** in **2023** due to organic growth and acquisitions, while net income slightly decreased despite strong operating cash flow Financial Performance Summary (2023 vs. 2022) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $352.0M | $304.3M | +16% | | Gross Profit | $64.2M | $54.1M | +19% | | SG&A Expenses | $44.3M | $34.1M | +30% | | Net Income | $12.3M | $12.5M | -2% | | Diluted EPS | $2.72 | $2.81 | -3% | Non-GAAP Financial Measures (2023 vs. 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Adjusted Gross Billings | $1,260.4M | $1,064.7M | | Adjusted EBITDA | $24.6M | $21.1M | | Effective Margin % | 38.3% | 39.1% | - Net sales growth was driven by organic growth in the Distribution segment and the impact of the Data Solutions acquisition. Adjusted gross billings in the Distribution segment increased by **18%** to **$1.18 billion**[340](index=340&type=chunk) - The increase in SG&A expenses was primarily due to higher payroll costs associated with higher gross profit and the impact of the Data Solutions acquisition[385](index=385&type=chunk) - Cash and cash equivalents increased by **$16.1 million** to **$36.3 million** at year-end, primarily due to **$42.1 million** in net cash provided by operating activities[389](index=389&type=chunk)[370](index=370&type=chunk) - In May **2023**, the company entered into a new **$50.0 million** revolving credit facility with JPMorgan Chase Bank, N.A., replacing its previous facility. No amounts were outstanding as of December 31, **2023**[393](index=393&type=chunk) [Item 9A. Controls and Procedures](index=55&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and independent auditors concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, **2023**[376](index=376&type=chunk) - Internal control over financial reporting was deemed effective as of December 31, **2023**, based on the COSO **2013** framework[421](index=421&type=chunk) - The assessment of internal controls excluded the operations of Data Solutions, acquired on October 6, **2023**, which constituted **17% of total assets** and **4% of consolidated net sales**[378](index=378&type=chunk)[457](index=457&type=chunk) - The independent registered public accounting firm, BDO USA, P.C., audited and provided an unqualified opinion on the effectiveness of the company's internal control over financial reporting[403](index=403&type=chunk)[437](index=437&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=59&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the Consolidated Financial Statements, Schedule II, and various exhibits, including acquisition agreements, credit agreements, and executive compensation plans - This item includes the Consolidated Financial Statements and Schedule II—Valuation and Qualifying Accounts[408](index=408&type=chunk) - Filed exhibits include the Share Purchase Agreement for the Data Solutions acquisition (dated Oct 6, **2023**) and the Spinnakar acquisition (dated Aug 18, **2022**)[427](index=427&type=chunk) - The Credit Agreement with JPMorgan Chase Bank, N.A., dated May 18, **2023**, is included as an exhibit[427](index=427&type=chunk) - Management and compensatory plans, such as the **2021** Omnibus Incentive Plan and the Executive Severance and Change in Control Plan, are also filed as exhibits[430](index=430&type=chunk) Financial Statements and Supplementary Data [Note 2. Summary of Significant Accounting Policies](index=76&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The company's significant accounting policies cover EPS calculation, cash equivalents, revenue recognition, goodwill impairment, income taxes, and stock-based compensation - Revenue is recognized when control of products and services transfers to customers. For transactions where the company acts as an agent (e.g., certain third-party maintenance and cloud services), revenue is recognized on a net basis[102](index=102&type=chunk)[103](index=103&type=chunk) - Goodwill is tested for impairment annually as of October 1, or more frequently if impairment indicators arise, using either a qualitative or quantitative assessment at the reporting unit level[14](index=14&type=chunk)[24](index=24&type=chunk) - Earnings per share (EPS) is calculated using the two-class method, which allocates earnings to common stock and participating securities (like non-vested restricted stock with dividend rights)[1](index=1&type=chunk) Earnings Per Share Calculation (2023 vs. 2022) | (in thousands, except per share data) | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $12,323 | $12,497 | | Less: Income allocated to participating securities | $323 | $317 | | **Net Income Attributable to Common Shareholders** | **$12,000** | **$12,180** | | Weighted Average Common Shares (Basic & Diluted) | 4,401 | 4,331 | | **Basic & Diluted Net Income Per Share** | **$2.72** | **$2.81** | - The company may use foreign exchange forward contracts to hedge currency exposures but does not apply hedge accounting; changes in fair value are recorded in earnings[22](index=22&type=chunk) [Note 3. Acquisition](index=89&type=section&id=Note%203.%20Acquisition) On October 6, 2023, the company acquired Data Solutions for **€15.0 million** (**$15.9 million** USD), recognizing **$7.1 million** goodwill and **$8.3 million** vendor relationships - On October 6, **2023**, the company acquired Data Solutions for a total purchase consideration of **$18.1 million**, including a **$2.2 million** contingent earn-out liability[565](index=565&type=chunk)[546](index=546&type=chunk) Preliminary Purchase Price Allocation for Data Solutions Acquisition | (in thousands) | Amount | | :--- | :--- | | Cash | $3,190 | | Accounts receivable | $32,503 | | Vendor relationships (intangible) | $8,269 | | Goodwill | $7,143 | | Accounts payable & other liabilities | ($34,793) | | Deferred tax liability | ($1,576) | | **Net assets acquired** | **$18,095** | - The goodwill from the acquisition was allocated to the Distribution segment and is not deductible for tax purposes[568](index=568&type=chunk) - For the year ended December 31, **2023**, the Data Solutions acquisition contributed approximately **$14.3 million** in revenue and **$0.8 million** in net income[519](index=519&type=chunk)[545](index=545&type=chunk) [Note 4. Goodwill and Other Intangible Assets](index=94&type=section&id=Note%204.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to **$27.2 million** in **2023** due to the Data Solutions acquisition, with other intangibles totaling **$26.9 million** and projected **$3.0 million** annual amortization Goodwill by Segment (2022-2023) | (in thousands) | Distribution | Solutions | Consolidated | | :--- | :--- | :--- | :--- | | **Balance Jan 1, 2022** | **$8,141** | **$9,047** | **$17,188** | | Goodwill acquired | $3,244 | $0 | $3,244 | | Translation adjustments | ($703) | ($766) | ($1,469) | | **Balance Dec 31, 2022** | **$10,682** | **$8,281** | **$18,963** | | Goodwill acquired | $7,143 | $0 | $7,143 | | Translation adjustments | $833 | $243 | $1,076 | | **Balance Dec 31, 2023** | **$18,658** | **$8,524** | **$27,182** | Other Intangible Assets, Net (as of Dec 31, 2023) | (in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | | :--- | :--- | :--- | :--- | | Customer and vendor relationships | $30,968 | $4,424 | $26,544 | | Trade name | $489 | $103 | $386 | | **Total** | **$31,457** | **$4,527** | **$26,930** | - Total amortization expense for other intangibles was **$2.2 million** in **2023**, up from **$1.2 million** in **2022**[52](index=52&type=chunk) Estimated Future Amortization Expense | Year | Amount (in thousands) | | :--- | :--- | | 2024 | $3,037 | | 2025 | $3,037 | | 2026 | $3,037 | | 2027 | $3,037 | | 2028 | $3,037 | | Thereafter | $11,745 | | **Total** | **$26,930** | [Note 7. Income Taxes](index=97&type=section&id=Note%207.%20Income%20Taxes) The **2023** income tax provision was **$4.5 million** with an effective tax rate of **26.6%**, up from **24.4%** in **2022**, mainly due to executive compensation deductibility limits Income Tax Provision (2023 vs. 2022) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Current** | | | | Federal | $2,793 | $2,694 | | State | $676 | $622 | | Foreign | $1,372 | $1,254 | | **Deferred** | | | | Federal, State, Foreign | ($383) | ($535) | | **Total Provision** | **$4,458** | **$4,035** | | **Effective Tax Rate** | **26.6%** | **24.4%** | - The difference between the U.S. statutory rate and the effective tax rate is influenced by state income taxes, non-deductible acquisition costs, and stock compensation[58](index=58&type=chunk)[82](index=82&type=chunk) - The company's federal tax returns for **2020-2022** remain open for examination. There was no activity related to unrecognized tax benefits in **2023** or **2022**[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 8. Credit Facilities](index=99&type=section&id=Note%208.%20Credit%20Facilities) In May **2023**, the company established a new **$50.0 million** revolving credit facility with JPMorgan Chase, with no outstanding balance, and has a **$1.3 million** term loan - On May 18, **2023**, the company entered into a new **$50.0 million** revolving credit agreement with JPMorgan Chase Bank, N.A., maturing in **2028**. No amount was outstanding as of December 31, **2023**[599](index=599&type=chunk)[582](index=582&type=chunk) - The company has a term loan with First American Commercial Bancorp, Inc., with an outstanding balance of **$1.3 million** as of December 31, **2023**[61](index=61&type=chunk)[558](index=558&type=chunk) - Through the Data Solutions acquisition, the company acquired an invoice discounting facility with a balance of **$4.3 million** as of December 31, **2023**[584](index=584&type=chunk) [Note 9. Stockholders' Equity and Stock-Based Compensation](index=101&type=section&id=Note%209.%20Stockholders%27%20Equity%20and%20Stock-Based%20Compensation) The company granted **132,526** restricted shares in **2023**, recognizing **$4.1 million** in stock-based compensation expense, with **$4.5 million** unrecognized cost remaining - The company's active equity plan is the **2021** Omnibus Incentive Plan, with **241,068 shares** available for future grants as of December 31, **2023**[601](index=601&type=chunk) - In **2023**, the company granted **132,526 shares** of restricted stock. Total share-based compensation expense was **$4.1 million** for the year[585](index=585&type=chunk)[606](index=606&type=chunk) - As of year-end **2023**, there was **$4.5 million** of total unrecognized compensation cost related to non-vested awards, to be recognized over a weighted-average period of **1.5 years**[89](index=89&type=chunk) - There was no stock option activity in **2023** or **2022**, and no options were outstanding at the end of either year[88](index=88&type=chunk) [Note 13. Industry, Segment and Geographic Financial Information](index=104&type=section&id=Note%2013.%20Industry%2C%20Segment%20and%20Geographic%20Financial%20Information) The company operates in Distribution (**$325.3 million** net sales) and Solutions (**$26.8 million** net sales) segments, with the USA as the primary geographic market and customer concentration Segment Financial Data for Year Ended Dec 31, 2023 | (in thousands) | Distribution | Solutions | Total | | :--- | :--- | :--- | :--- | | Net Sales | $325,262 | $26,751 | $352,013 | | Gross Profit | $53,363 | $10,884 | $64,247 | | Segment Income Before Taxes | $30,896 | $5,646 | $36,542 | Net Sales by Geography for Year Ended Dec 31, 2023 | (in thousands) | Amount | | :--- | :--- | | USA | $259,686 | | Europe and United Kingdom | $67,420 | | Canada | $24,907 | | **Total** | **$352,013** | Identifiable Assets by Geography (as of Dec 31, 2023) | (in thousands) | Amount | | :--- | :--- | | USA | $171,080 | | Europe and United Kingdom | $140,024 | | Canada | $23,994 | | **Total** | **$335,098** | - In **2023**, two customers accounted for **20%** and **15% of consolidated net sales**, respectively. One vendor accounted for **14% of consolidated purchases**[616](index=616&type=chunk) [Note 14. Fair Value Measurements](index=108&type=section&id=Note%2014.%20Fair%20Value%20Measurements) The company measures assets like **$5.1 million** treasury bills (Level 1) and liabilities like a **$4.2 million** contingent earn-out (Level 3) at fair value - Fair value is measured using a three-level hierarchy: Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[78](index=78&type=chunk)[594](index=594&type=chunk)[95](index=95&type=chunk) Assets and Liabilities Measured at Fair Value (as of Dec 31, 2023) | (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets:** | | | | | | Treasury bills | $5,096 | $0 | $0 | $5,096 | | **Liabilities:** | | | | | | Contingent earn-out | $0 | $0 | $4,189 | $4,189 | - The contingent earn-out liability increased from **$1.8 million** at the end of **2022** to **$4.2 million** at the end of **2023**, primarily due to the **$2.2 million** earn-out from the Data Solutions acquisition[97](index=97&type=chunk)

February 28, 2024 Climb Global Solutions Reports Fourth Quarter and Full Year 2023 Results Q4 2023 Net Sales, Net Income, Adjusted EBITDAand 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 ...

Financial Data and Key Metrics Changes - Net sales in Q4 2023 increased by 20% to $106.8 million compared to $88.9 million in Q4 2022, driven by organic growth and contributions from the acquisition of DataSolutions [38][30] - Adjusted gross billings (AGB) rose by 24% to $397 million from $319.8 million year-over-year [43] - Net income for Q4 2023 increased by 10% to $5.2 million or $1.15 per diluted share, compared to $4.8 million or $1.06 per diluted share in Q4 2022 [40] - SG&A expenses in Q4 were $12.4 million, up from $9.1 million in the same period last year, with SG&A as a percentage of AGB at 3.1% compared to 2.9% [39] Business Line Data and Key Metrics Changes - The acquisition of DataSolutions contributed approximately 40% to the gross growth in AGB for the quarter, with the remainder coming from organic growth with existing vendors [57] - Gross profit in Q4 increased by 31% to $21.1 million, with gross profit as a percentage of AGB rising to 5.3% from 5% in the prior period [45] Market Data and Key Metrics Changes - The company reported robust recurring revenue, with over 90% of fiscal 2023 revenue coming from existing reseller partners [26] - The European market remains competitive but has not shown significant softening, with a diverse portfolio helping to mitigate risks [9] Company Strategy and Development Direction - The company aims to leverage its global footprint and drive organic growth while expanding its vendor partnerships [41] - There is a focus on pursuing M&A opportunities both domestically and internationally to broaden geographic reach and enhance solution offerings [41] - The company is integrating DataSolutions into its operations to unlock additional benefits and cross-selling opportunities [26][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the tech environment, noting a robust pipeline of vendors and no significant signs of softening in demand [9] - The company anticipates some cyclicality in its business, particularly with DataSolutions, but expects overall growth compared to the previous year [58] - Management highlighted the potential for doubling the business by 2026 through a combination of organic growth and acquisitions [70] Other Important Information - The company declared a quarterly dividend of $0.17 per share, payable on March 15, 2024 [47] - Cash and cash equivalents increased to $36.3 million as of December 31, 2023, compared to $20.2 million a year earlier [52] Q&A Session Summary Question: How sustainable are the adjusted gross margin levels? - Management indicated that overseas solutions contribute to a stable margin profile, with higher margins in the European market compared to the U.S. [3] Question: What is the breakdown of growth in adjusted gross billings? - Approximately 40% of the growth in AGB was attributed to DataSolutions, with the rest coming from organic growth with existing vendors [57] Question: How does the company view the tech and economic environment now? - Management noted that they have not seen significant softening in demand and have a diverse portfolio to mitigate risks [9] Question: What are the dynamics behind larger orders versus SaaS models? - Management explained that larger orders often involve hardware components and significant investments, particularly in the data center space [64] Question: Can you discuss the potential for future growth and market penetration? - Management expressed confidence in the ability to continue achieving 20% year-over-year growth and highlighted the potential for significant market opportunities [70]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q4 2023 Performance Highlights](index=1&type=section&id=Q4%202023%20Performance%20Highlights) Climb Global Solutions achieved record financial results in Q4 2023 across key metrics, driven by core initiatives and the accretive acquisition of DataSolutions, alongside organic growth in the U.S. and Europe Q4 2023 Key Financial Metrics (YoY Growth) | Metric | Q4 2023 Value | YoY Change | Source | | :------------------- | :------------ | :--------- | :----- | | Net Sales | $106.8 million | +20% | [2, 8] | | Adjusted Gross Billings | $397.0 million | +24% | [2, 8] | | Net Income | $5.2 million | +10% | [2, 8] | | Diluted EPS | $1.15 | +8.5% | [2, 8] | | Adjusted EBITDA | $9.2 million | +24% | [2, 8] | [FY 2023 Performance Highlights](index=1&type=section&id=FY%202023%20Performance%20Highlights) For the full year 2023, Climb Global Solutions reported record net sales and significant growth in adjusted EBITDA, with net income showing a slight decrease but an increase when excluding a one-time CEO stock grant FY 2023 Key Financial Metrics (YoY Growth) | Metric | FY 2023 Value | YoY Change | Source | | :-------------------------------- | :-------------- | :--------- | :----- | | Net Sales | $352.0 million | +16% | [3] | | Adjusted Gross Billings | $1.3 billion | +18% | [3] | | Net Income | $12.3 million | -1.6% | [3] | | Net Income (Excl. CEO Stock Grant) | $14.1 million | +13% | [3] | | Diluted EPS | $2.72 | -3.2% | [3] | | Diluted EPS (Excl. CEO Stock Grant) | $3.13 | +11.4% | [3] | | Adjusted EBITDA | $24.6 million | +16% | [3] | [Management Commentary and Strategy](index=1&type=section&id=Management%20Commentary%20and%20Strategy) Management emphasized a consistent strategy focused on leveraging global infrastructure for organic growth and executing M&A initiatives, with a strong balance sheet supporting future expansion and shareholder value creation - The company's strategy remains **unchanged**: leverage **global infrastructure** for **organic growth** and execute **M&A initiatives**[5](index=5&type=chunk) - Future plans include evaluating opportunities to **expand geographic footprint** and **service/solution offerings**[6](index=6&type=chunk) - Q4 performance was driven by **core initiatives** and the immediately **accretive acquisition of DataSolutions** in October 2023, alongside **organic growth** in the U.S. and Europe[8](index=8&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) [About Climb Global Solutions](index=1&type=section&id=About%20Climb%20Global%20Solutions) Climb Global Solutions is a value-added global IT channel company specializing in innovative technologies, operating across the US, Canada, and Europe, providing distribution and solutions in various IT sectors - Climb Global Solutions is a **value-added global IT channel company** providing **unique sales and distribution solutions** for **innovative technology vendors**[7](index=7&type=chunk) - The company operates across the **US, Canada, and Europe** through business units including **Climb Channel Solutions, Grey Matter, and Climb Global Services**[17](index=17&type=chunk) - Climb provides **IT distribution and solutions** for companies in **Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries**[17](index=17&type=chunk) [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) [Fourth Quarter 2023 Financial Performance](index=3&type=section&id=Fourth%20Quarter%202023%20Financial%20Performance) The fourth quarter of 2023 saw significant financial growth, with increases across net sales, gross profit, net income, and adjusted EBITDA, driven by organic growth and the DataSolutions acquisition, despite some negative impacts from FX and acquisition fees [Net Sales and Adjusted Gross Billings (Q4)](index=3&type=section&id=Net%20Sales%20and%20Adjusted%20Gross%20Billings%20(Q4)) Q4 2023 Net Sales and Adjusted Gross Billings | Metric | Q4 2023 | Q4 2022 | YoY Change | | :---------------------- | :---------- | :---------- | :--------- | | Net Sales | $106.8 million | $88.9 million | +20% | | Adjusted Gross Billings | $397.0 million | $319.8 million | +24% | - The increase in net sales and adjusted gross billings was due to **organic growth** from new and existing vendors, and contribution from the **DataSolutions acquisition**[9](index=9&type=chunk) [Gross Profit (Q4)](index=3&type=section&id=Gross%20Profit%20(Q4)) Q4 2023 Gross Profit | Metric | Q4 2023 | Q4 2022 | YoY Change | | :----------- | :---------- | :---------- | :--------- | | Gross Profit | $21.1 million | $16.1 million | +31% | - The increase in gross profit was driven by **organic growth** from new and top 20 vendors in North America and Europe, as well as **DataSolutions' contribution**[12](index=12&type=chunk) [Selling, General, and Administrative (SG&A) Expenses (Q4)](index=3&type=section&id=Selling,%20General,%20and%20Administrative%20(SG%26A)%20Expenses%20(Q4)) Q4 2023 SG&A Expenses | Metric | Q4 2023 | Q4 2022 | YoY Change | | :-------------------------------- | :---------- | :---------- | :--------- | | SG&A Expenses | $12.4 million | $9.1 million | +36.3% | | SG&A as % of Adjusted Gross Billings | 3.1% | 2.9% | +0.2 pp | [Net Income and EPS (Q4)](index=3&type=section&id=Net%20Income%20and%20EPS%20(Q4)) Q4 2023 Net Income and EPS | Metric | Q4 2023 | Q4 2022 | YoY Change | | :---------------- | :---------- | :---------- | :--------- | | Net Income | $5.2 million | $4.8 million | +10% | | Diluted EPS | $1.15 | $1.06 | +8.5% | - Diluted EPS was negatively impacted by **$0.09** from FX and **$0.06** from DataSolutions acquisition fees[13](index=13&type=chunk) [Adjusted EBITDA (Q4)](index=3&type=section&id=Adjusted%20EBITDA%20(Q4)) Q4 2023 Adjusted EBITDA | Metric | Q4 2023 | Q4 2022 | YoY Change | | :--------------- | :---------- | :---------- | :--------- | | Adjusted EBITDA | $9.2 million | $7.4 million | +24% | | Effective Margin | 43.7% | 45.9% | -2.2 pp | - The increase in Adjusted EBITDA was driven by **organic growth** and **DataSolutions' contribution**[14](index=14&type=chunk) [Full Year 2023 Financial Performance](index=9&type=section&id=Full%20Year%202023%20Financial%20Performance) Full year 2023 results show robust growth in net sales and gross profit, with net income slightly down but significantly higher when adjusted for a one-time CEO stock grant, reflecting strong underlying profitability [Net Sales (FY)](index=9&type=section&id=Net%20Sales%20(FY)) FY 2023 Net Sales | Metric | FY 2023 | FY 2022 | YoY Change | | :--------- | :---------- | :---------- | :--------- | | Net Sales | $352.0 million | $304.3 million | +15.7% | [Gross Profit (FY)](index=9&type=section&id=Gross%20Profit%20(FY)) FY 2023 Gross Profit | Metric | FY 2023 | FY 2022 | YoY Change | | :----------- | :---------- | :---------- | :--------- | | Gross Profit | $64.2 million | $54.1 million | +18.7% | [Net Income and EPS (FY)](index=9&type=section&id=Net%20Income%20and%20EPS%20(FY)) FY 2023 Net Income and EPS | Metric | FY 2023 | FY 2022 | YoY Change | | :---------------- | :---------- | :---------- | :--------- | | Net Income | $12.3 million | $12.5 million | -1.4% | | Diluted EPS | $2.72 | $2.81 | -3.2% | [Adjusted Net Income and EPS (FY)](index=12&type=section&id=Adjusted%20Net%20Income%20and%20EPS%20(FY)) FY 2023 Adjusted Net Income and EPS (Excl. One-Time CEO Stock Grant) | Metric | FY 2023 | FY 2022 | YoY Change | | :-------------------------------- | :---------- | :---------- | :--------- | | Net Income (Excl. CEO Stock Grant) | $14.1 million | $12.5 million | +12.8% | | Diluted EPS (Excl. CEO Stock Grant) | $3.13 | $2.81 | +11.4% | [Adjusted EBITDA (FY)](index=11&type=section&id=Adjusted%20EBITDA%20(FY)) FY 2023 Adjusted EBITDA | Metric | FY 2023 | FY 2022 | YoY Change | | :--------------- | :---------- | :---------- | :--------- | | Adjusted EBITDA | $24.6 million | $21.1 million | +16.5% | [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) Climb Global Solutions significantly increased its cash and cash equivalents by year-end 2023, primarily due to receivable collections and payables timing, while maintaining a low debt profile with no borrowings on its revolving credit facility Balance Sheet Key Figures (as of December 31) | Metric | 2023 | 2022 | Change | | :---------------------- | :---------- | :---------- | :--------- | | Cash and Cash Equivalents | $36.3 million | $20.2 million | +$16.1 million | | Working Capital | N/A | N/A | -$4.5 million | | Outstanding Debt | $1.3 million | N/A | N/A | | Revolving Credit Facility | $0 borrowings | $0 borrowings | No change | - The increase in cash was primarily attributed to the timing of receivable collections and payables, partially offset by **$12.7 million** cash paid for the DataSolutions acquisition (net of cash acquired)[18](index=18&type=chunk) [Dividend Information](index=3&type=section&id=Dividend%20Information) [Quarterly Dividend Declaration](index=3&type=section&id=Quarterly%20Dividend%20Declaration) Climb's Board of Directors declared a quarterly dividend of $0.17 per share, payable in March 2024 - On February 27, 2024, Climb's Board of Directors declared a quarterly dividend of **$0.17 per share** of common stock[11](index=11&type=chunk) - The dividend is payable on **March 15, 2024**, to shareholders of record on **March 11, 2024**[11](index=11&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) [Overview and Definitions](index=5&type=section&id=Overview%20and%20Definitions) Climb Global Solutions utilizes non-GAAP financial measures such as adjusted gross billings, adjusted net income, and adjusted EBITDA to supplement GAAP results, providing additional insights into performance while acknowledging their inherent limitations - Climb Global Solutions uses **adjusted gross billings**, **adjusted net income**, and **adjusted EBITDA** as supplemental measures of performance[23](index=23&type=chunk) - These non-GAAP measures have **limitations** and should **not be considered in isolation or as substitutes for U.S. GAAP financial results**[23](index=23&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) - **Adjusted gross billings** provide insight into business volume and changes to accounts receivable/payable[33](index=33&type=chunk) - **Adjusted EBITDA** offers insight into business profitability and is a component of financial covenants in the credit facility[36](index=36&type=chunk) [Reconciliation of Adjusted Gross Billings](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Gross%20Billings) This section provides a reconciliation of net sales (GAAP) to adjusted gross billings (non-GAAP) for both the fourth quarter and full year 2023 and 2022 Reconciliation of Net Sales to Adjusted Gross Billings (Amounts in thousands) | Metric | FY 2023 | FY 2022 | Q4 2023 | Q4 2022 | | :------------------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Net sales | $352,013 | $304,348 | $106,783 | $88,905 | | Costs of sales related to sales where 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** | [Reconciliation of Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) This section details the reconciliation of net income (GAAP) to adjusted EBITDA (non-GAAP) for the fourth quarter and full year 2023 and 2022, including adjustments for taxes, depreciation, amortization, share-based compensation, and interest Reconciliation of Net Income to Adjusted EBITDA (Amounts in thousands) | Metric | FY 2023 | FY 2022 | Q4 2023 | Q4 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** | [Reconciliation of Net Income Excluding One-Time CEO Stock Grant](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20Excluding%20One-Time%20CEO%20Stock%20Grant) This section provides a reconciliation of net income (GAAP) to net income excluding a one-time CEO stock grant (non-GAAP) for the full year 2023 and 2022, offering a clearer comparison of underlying profitability Reconciliation of Net Income to Net Income Excluding One-Time CEO Stock Grant (Amounts in thousands) | Metric | FY 2023 | FY 2022 | Q4 2023 | Q4 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 | [Conference Call Details](index=5&type=section&id=Conference%20Call%20Details) [Call Information](index=5&type=section&id=Call%20Information) Climb Global Solutions will host a conference call on February 29, 2024, to discuss its Q4 and full-year 2023 results, with details provided for dial-in and webcast access - A conference call will be held on **Thursday, February 29, 2024**, at **8:30 a.m. Eastern time**[16](index=16&type=chunk)[17](index=17&type=chunk)[19](index=19&type=chunk) - Dial-in numbers: **(877) 407-9716** (toll-free) or **(201) 493-6779** (international), Conference ID: **13744515**[17](index=17&type=chunk) - A **webcast** of the call will be available on Climb's **investor relations website** and for **replay**[17](index=17&type=chunk)[26](index=26&type=chunk) [Legal Disclosures](index=5&type=section&id=Legal%20Disclosures) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to risks and uncertainties, including those related to acquisitions, market conditions, and competition, as detailed in the company's SEC filings - Statements in the release, other than historical facts, are **'forward-looking statements'** under the Securities Act of 1933 and the Securities Exchange Act of 1934[24](index=24&type=chunk) - These statements are subject to certain **risks and uncertainties** that could cause actual results to differ materially[24](index=24&type=chunk)[25](index=25&type=chunk) - Risk factors include the ability to recognize benefits from the **DataSolutions acquisition**, continued acceptance of distribution channels, product availability, market conditions, competitive pricing, and successful integration of acquisitions[25](index=25&type=chunk)

EATONTOWN, N.J., Feb. 15, 2024 (GLOBE NEWSWIRE) -- Climb Global Solutions, Inc. (NASDAQ:CLMB) ("Climb" or the "Company"), a value-added global IT channel company providing unique sales and distribution solutions for innovative technology vendors, will host a conference call on Thursday, February 29, 2024 at 8:30 a.m. Eastern time to discuss its financial results for the fourth quarter and full year ended December 31, 2023. The Company's results will be reported in a press release prior to the call. Climb's ...

EATONTOWN, N.J., Jan. 26, 2024 (GLOBE NEWSWIRE) -- Climb Channel Solutions, an international specialty technology distributor and wholly owned subsidiary of Climb Global Solutions, Inc. (NASDAQ:CLMB) has been named Distributor of the Year in both North America and EMEA by Wasabi Technologies, the hot cloud storage company, in the inaugural Wasabi Partner Network Awards. This new awards program recognizes Wasabi partners that have gone above and beyond in 2023, through outstanding growth, innovative solution ...