Financial Data and Key Metrics Changes - Gross profit in Q3 2023 increased by 6% to $14.3 million compared to $13.5 million in Q3 2022, driven by organic growth from new vendors [9] - Net income rose by 6% to $2.4 million or $0.52 per diluted share, compared to $2.2 million or $0.50 per diluted share in the prior year [10] - Adjusted gross billings (AGB) increased by 7% to $281.9 million from $264.3 million year-over-year [23] - Net sales increased approximately 3% to $78.5 million compared to $76.3 million in the previous year [23] - Adjusted EBITDA increased by 2% to $5.1 million, with an effective margin of 34.5% compared to 36.6% in the year-ago period [25] Business Line Data and Key Metrics Changes - The company signed agreements with three new vendors out of 29 evaluated in Q3, including a partnership with GigaIO for data center solutions [5] - The acquisition of DataSolutions is expected to be immediately accretive to earnings and adjusted EBITDA, with over 90% of their fiscal 2023 revenue coming from existing partners [6] Market Data and Key Metrics Changes - Customer sentiment for the upcoming year remains positive despite broader economic challenges [7] - The company noted some softness in the hardware sector, particularly among larger competitors, but remains optimistic about its positioning [7] Company Strategy and Development Direction - The company aims to maintain a focused vendor line card by selecting innovative technology companies and is committed to a diligent M&A strategy to bolster its offerings [5][22] - The rebranding of its technical services division to Climb Global Services signifies a commitment to unify operations and expand service offerings [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding Q4 results from the previous year, despite potential economic headwinds [41] - The company is optimistic about the integration of DataSolutions and its potential to enhance market share in Europe [19][22] Other Important Information - Cash and cash equivalents increased to $49.8 million as of September 30, 2023, compared to $20.2 million at the end of 2022 [11] - The Board of Directors declared a quarterly dividend of $0.17 per share, payable on November 17, 2023 [11] Q&A Session Summary Question: What type of revenue contribution is expected from DataSolutions in Q4 and 2024? - Management indicated that DataSolutions will be accretive at the top line and EBITDA, but specific numbers were not disclosed [14][37] Question: Can you provide details on the acquisition pricing and multiples? - The acquisition was priced at around 5 times EBITDA, with an earn-out range of 85% to 115% of the EBITDA number [33][34] Question: How is the organic growth trending, and what are the dynamics behind the 7% growth in adjusted gross billings? - The company reported mid-single-digit growth in adjusted gross billings despite headwinds in the hardware sector, maintaining confidence in future performance [70] Question: What is the tax situation regarding the DataSolutions acquisition? - The company is exploring tax advantages related to the Irish domicile of DataSolutions, with a corporate tax rate of 12.5% [72]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR (732) 389-8950 Registrant's Telephone Number Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b ...

Financial Data and Key Metrics Changes - Adjusted gross billings (AGB) increased by 14% to $274.7 million compared to $241.8 million in the prior year quarter [74] - Net sales rose by 20% to $81.7 million from $67.9 million, reflecting organic growth from new and existing vendors [74] - Gross profit as a percentage of adjusted gross billings was 5% compared to 5.2%, and as a percentage of net sales was 16.8% compared to 18.4% in the prior year quarter [5] - Net income decreased to $1.4 million or $0.31 per diluted share from $2.8 million or $0.63 per diluted share in the comparable period [41] - Adjusted EBITDA increased by 4% to $4.7 million compared to $4.5 million, with an effective margin of 34.1% compared to 35.8% in the year-ago period [76] Business Line Data and Key Metrics Changes - SG&A expenses increased to $11.6 million from $7.9 million, with SG&A as a percentage of adjusted gross billings rising to 4.2% from 3.3% [40] - The partnership with Radius has a different economic profile, recognizing total AGB generated while paying Radius 70% of their gross profit through SG&A [6] - The company continues to focus on adding new innovative vendors to its line card, which contributed to double-digit growth in AGB and operating EPS [8][72] Market Data and Key Metrics Changes - The company noted a slowdown in the data center side but continues to see strength in security technology segments [54][79] - There is a shift in the vendor mix, with new emerging vendors starting to chip away at the top 20 [11] - The company is targeting growth in the European market, identifying numerous acquisition opportunities [66] Company Strategy and Development Direction - The company is committed to organic and inorganic growth, focusing on strategic partnerships and enhancing its service offerings [38][49] - The management emphasized the importance of a focused line card to partner with strategic technology vendors [2] - The company plans to continue evaluating M&A opportunities to enhance its geographic footprint and service solutions [53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low double-digit growth in adjusted gross billings over the next several years [69] - The company is aware of the cyclicality and lumpiness associated with the Spinnakar acquisition, indicating some strong quarters ahead [88] - Management noted that while they do not provide detailed guidance, they are focused on long-term growth and the emerging vendor market [92] Other Important Information - The company announced a quarterly dividend of $0.017 per share, payable on August 18, 2023 [77] - The new $50 million revolving credit facility with JPMC provides additional capital and flexibility for growth [52] Q&A Session Summary Question: Are there any changes in the demand backdrop from last quarter? - Management noted no significant changes in demand, although some competitors have seen a slowdown in hardware sales [54] Question: Did the growth of the top 20 vendors grow in line with the business? - Management confirmed that the growth was consistent, with some exceptions as new vendors emerge [80] Question: Have valuations continued to improve on the acquisition side? - Management indicated that valuations have softened slightly but not drastically, maintaining a robust pipeline for acquisitions [12][82]

PART I — FINANCIAL INFORMATION [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a standard disclaimer on forward-looking statements, noting actual results may differ due to market, competition, and acquisition risks - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially[274](index=274&type=chunk) - Key risks include continued acceptance of distribution channels, timely availability of new products, market conditions, competitive pricing, successful integration of acquisitions, and vendor relationships[274](index=274&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statements[275](index=275&type=chunk) [Item 1. FINANCIAL STATEMENTS (unaudited)](index=6&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS%20%28unaudited%29) This section presents unaudited condensed consolidated financial statements, offering a snapshot of the company's financial position and performance [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets detail the company's financial position, showing changes in assets, liabilities, and equity between periods | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :----- | :--------------------------- | :------------------------------- | | Total Assets | $233,698 | $231,856 | | Total Current Assets | $184,775 | $184,638 | | Total Liabilities | $166,716 | $171,282 | | Total Stockholders' Equity | $66,982 | $60,574 | [Condensed Consolidated Statements of Earnings](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Statements of earnings detail financial performance for the reported periods, showing trends in sales, gross profit, and net income | Metric (in thousands) | Six months June 30, 2023 | Six months June 30, 2022 | Three months June 30, 2023 | Three months June 30, 2022 | | :-------------------- | :----------------------- | :----------------------- | :------------------------- | :------------------------- | | Net sales | $166,771 | $139,182 | $81,732 | $67,863 | | Cost of sales | $137,870 | $114,716 | $68,039 | $55,377 | | Gross profit | $28,901 | $24,466 | $13,693 | $12,486 | | Selling, general, and administrative expenses | $21,837 | $16,183 | $11,576 | $7,934 | | Income from operations | $5,747 | $7,481 | $1,513 | $4,107 | | Net income | $4,705 | $5,503 | $1,381 | $2,791 | | Income per common share-Basic | $1.05 | $1.24 | $0.31 | $0.63 | | Income per common share-Diluted | $1.05 | $1.24 | $0.31 | $0.63 | | Dividends paid per common share | $0.34 | $0.34 | $0.17 | $0.17 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This statement presents comprehensive income (loss), including net income and other items like foreign currency translation adjustments | Metric (in thousands) | Six months June 30, 2023 | Six months June 30, 2022 | Three months June 30, 2023 | Three months June 30, 2022 | | :-------------------- | :----------------------- | :----------------------- | :------------------------- | :------------------------- | | Net income | $4,705 | $5,503 | $1,381 | $2,791 | | Foreign currency translation adjustments | $1,617 | $(2,335) | $1,004 | $(1,709) | | Comprehensive income | $6,322 | $3,168 | $2,385 | $1,082 | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Statements of stockholders' equity detail changes in equity components, including net income, dividends, and share-based compensation | Metric (in thousands) | Balance at Jan 1, 2023 | Net Income | Translation Adjustment | Dividends Paid | Share-based Compensation Expense | Restricted Stock Grants (net of forfeitures) | Treasury Shares Repurchased | Balance at June 30, 2023 | | :-------------------- | :--------------------- | :--------- | :--------------------- | :------------- | :------------------------------- | :------------------------------------------- | :-------------------------- | :----------------------- | | Common Stock Amount | $53 | — | — | — | — | — | — | $53 | | Additional Paid-In Capital | $32,715 | — | — | — | $2,238 | $(1,258) | — | $33,476 | | Treasury Amount | $(13,230) | — | — | — | — | $1,258 | $(981) | $(12,402) | | Retained Earnings | $43,904 | $4,705 | — | $(1,503) | — | — | — | $47,106 | | Accumulated Other Comprehensive (Loss) Income | $(2,868) | — | $1,617 | — | — | — | — | $(1,251) | | Total | $60,574 | $4,705 | $1,617 | $(1,503) | $2,238 | — | $(981) | $66,982 | | Metric (in thousands) | Balance at Jan 1, 2022 | Net Income | Translation Adjustment | Dividends Paid | Share-based Compensation Expense | Restricted Stock Grants (net of forfeitures) | Treasury Shares Repurchased | Balance at June 30, 2022 | | :-------------------- | :--------------------- | :--------- | :--------------------- | :------------- | :------------------------------- | :------------------------------------------- | :-------------------------- | :----------------------- | | Common Stock Amount | $53 | — | — | — | — | — | — | $53 | | Additional Paid-In Capital | $32,087 | — | — | — | $714 | $(810) | — | $31,991 | | Treasury Amount | $(13,870) | — | — | — | — | $810 | $(393) | $(13,453) | | Retained Earnings | $34,396 | $5,503 | — | $(1,492) | — | — | — | $38,407 | | Accumulated Other Comprehensive (Loss) Income | $(250) | — | $(2,335) | — | — | — | — | $(2,585) | | Total | $52,416 | $5,503 | $(2,335) | $(1,492) | $714 | — | $(393) | $54,413 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Statements of cash flows summarize cash from operating, investing, and financing activities, showing net change in cash equivalents | Cash Flow Activity (in thousands) | Six months June 30, 2023 | Six months June 30, 2022 | | :-------------------------------- | :----------------------- | :----------------------- | | Net cash and cash equivalents provided by operating activities | $29,620 | $1,269 | | Net cash and cash equivalents used in investing activities | $(3,025) | $(652) | | Net cash and cash equivalents (used in) provided by financing activities | $(3,538) | $179 | | Effect of foreign exchange rate on cash and cash equivalents | $567 | $(753) | | Net increase in cash and cash equivalents | $23,624 | $43 | | Cash and cash equivalents at end of period | $43,869 | $29,315 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies, estimates, and financial statement items for transparency [1. Basis of Presentation](index=13&type=section&id=1.%20Basis%20of%20Presentation) Financial statements adhere to U.S. GAAP for interim reporting, using estimates and judgments, with intercompany transactions eliminated - Financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules[53](index=53&type=chunk) - Preparation requires estimates and judgments, which are evaluated on an ongoing basis[265](index=265&type=chunk) - All intercompany transactions and balances have been eliminated in the consolidated financial statements[311](index=311&type=chunk) [2. Recently Issued Accounting Standards](index=13&type=section&id=2.%20Recently%20Issued%20Accounting%20Standards) The Company adopted ASU 2016-13 (CECL standard) effective January 1, 2023, with no material impact on financial statements - The Company adopted ASU 2016-13 (CECL standard) effective January 1, 2023[283](index=283&type=chunk)[146](index=146&type=chunk) - The adoption of the new credit loss standard did not have an impact on the Company's financial statements[283](index=283&type=chunk)[146](index=146&type=chunk) [3. Foreign Currency Translation](index=13&type=section&id=3.%20Foreign%20Currency%20Translation) Foreign subsidiary assets/liabilities are translated at period-end rates, revenues/expenses at average rates, with transaction gains/losses recorded - Assets and liabilities of foreign subsidiaries are translated using end-of-period exchange rates[312](index=312&type=chunk) - Revenues and expenses are translated at average exchange rates for the period[312](index=312&type=chunk) | Metric (in millions) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales from foreign operations | $16.5 | $14.2 | $41.1 | $29.9 | [4. Comprehensive Income](index=15&type=section&id=4.%20Comprehensive%20Income) Cumulative translation adjustments are classified in accumulated other comprehensive loss within stockholders' equity per FASB ASC 220 - Cumulative translation adjustments are classified within accumulated other comprehensive loss[28](index=28&type=chunk) - This classification is in accordance with FASB ASC Topic 220, 'Comprehensive Income'[28](index=28&type=chunk) [5. Revenue Recognition](index=15&type=section&id=5.%20Revenue%20Recognition) Revenue is recognized upon transfer of control for products/services, with principal/agent evaluation and allocation for bundled arrangements - Revenue is recognized as control of third-party products and software is transferred to customers, typically at shipment or fulfillment[285](index=285&type=chunk) - For third-party maintenance, cloud services, and certain security software, the Company acts as an agent, recognizing revenue in the amount of the net fee[56](index=56&type=chunk)[317](index=317&type=chunk) - For bundled arrangements, total consideration is allocated based on standalone selling prices (SSP) of each distinct performance obligation[30](index=30&type=chunk) - Customer rebates and other discounts are recorded as a reduction of revenue at the time of sale[315](index=315&type=chunk) [6. Acquisition](index=17&type=section&id=6.%20Acquisition) The Company acquired Spinnakar Limited on August 18, 2022, for approximately **£9.8 million**, with final purchase price allocation - The Company acquired Spinnakar Limited on August 18, 2022[318](index=318&type=chunk) - The aggregate purchase price was approximately **£9.8 million** (equivalent to **$11.8 million USD**), including a potential earn-out[318](index=318&type=chunk) - The purchase price allocation is final, and **$1.9 million** fair value for potential earn-out consideration is included in accounts payable and accrued expenses and non-current liabilities[318](index=318&type=chunk)[31](index=31&type=chunk) [7. Goodwill and Other Intangible Assets](index=17&type=section&id=7.%20Goodwill%20and%20Other%20Intangible%20Assets) This section details goodwill and intangible asset carrying amounts and amortization, noting increased expense due to the Spinnakar acquisition | Intangible Asset (in thousands) | Gross Carrying Amount (June 30, 2023) | Accumulated Amortization (June 30, 2023) | Net Carrying Amount (June 30, 2023) | | :------------------------------ | :------------------------------------ | :--------------------------------------- | :---------------------------------- | | Customer and vendor relationships | $22,228 | $3,205 | $19,023 | | Trade name | $486 | $86 | $400 | | Total | $22,714 | $3,291 | $19,423 | | Estimated Future Amortization Expense (in thousands) | | :----------------------------------- | | 2023 (excluding six months ended June 30, 2023) | $969 | | 2024 | $1,938 | | 2025 | $1,938 | | 2026 | $1,938 | | 2027 | $1,938 | | Thereafter | $10,702 | | Total | $19,423 | - Amortization expense for other intangibles, net, increased to **$1.0 million** for the six months ended June 30, 2023, from **$0.4 million** in the prior year, and to **$0.5 million** for the three months ended June 30, 2023, from **$0.2 million** in the prior year[62](index=62&type=chunk) [8. Right-of-use Asset and Lease Liability](index=19&type=section&id=8.%20Right-of-use%20Asset%20and%20Lease%20Liability) The Company recognizes ROU assets and lease liabilities for operating leases of facilities, with expense recognized straight-line - The Company has operating leases for office and warehouse facilities with terms ranging from 2 to 11 years[63](index=63&type=chunk) - Operating lease ROU assets and liabilities are recognized at lease commencement based on the present value of lease payments[321](index=321&type=chunk) | Lease Liability Maturities (in thousands) | | :---------------------------------------- | | 2023 (excluding six months ended June 30, 2023) | $315 | | 2024 | $543 | | 2025 | $550 | | 2026 | $548 | | 2027 | $116 | | Total | $2,072 | | Less: imputed interest | $(514) | | Total lease liabilities | $1,558 | | Lease liabilities, current portion | $471 | | Lease liabilities, net of current portion | $1,087 | [9. Fair Value](index=21&type=section&id=9.%20Fair%20Value) Carrying amounts of short-term financial instruments approximate fair value; long-term receivables are discounted to present value - Carrying amounts of cash, short-term accounts receivable, and accounts payable approximate fair value[36](index=36&type=chunk) - Long-term accounts receivable are discounted to their present value at prevailing market rates at the time of sale[36](index=36&type=chunk) [10. Balance Sheet Detail](index=22&type=section&id=10.%20Balance%20Sheet%20Detail) This section details equipment, leasehold improvements, long-term receivables, and accounts payable, showing carrying amounts | Equipment and Leasehold Improvements (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------------------- | :------------ | :---------------- | | Equipment | $2,181 | $2,720 | | Capitalized software | $5,064 | $2,997 | | Leasehold improvements | $2,375 | $1,848 | | Total | $9,620 | $7,565 | | Less: accumulated depreciation and amortization | $(3,358) | $(4,050) | | Net | $6,262 | $3,515 | | Accounts Receivable Long-Term, Net (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :---------------- | | Total amount due from customer | $2,145 | $5,213 | | Less: unamortized discount | $(32) | $(188) | | Less: current portion included in accounts receivable | $(854) | $(1,911) | | Net | $1,259 | $3,114 | | Accounts Payable and Accrued Expenses (in thousands) | June 30, 2023 | December 31, 2022 | | :----------------------------------- | :------------ | :---------------- | | Trade accounts payable | $146,516 | $151,180 | | Accrued expenses | $10,955 | $9,470 | | Total | $157,471 | $160,650 | [11. Credit Facility](index=22&type=section&id=11.%20Credit%20Facility) The Company secured a new **$50.0 million** revolving credit facility and has a **$2.1 million** term loan, with no outstanding amounts on the former - On May 18, 2023, the Company entered into a new revolving credit agreement for up to **$50.0 million** with JPMorgan Chase Bank, N.A[38](index=38&type=chunk)[185](index=185&type=chunk) - The new credit facility matures on May 18, 2028, and no amounts were outstanding as of June 30, 2023[39](index=39&type=chunk)[185](index=185&type=chunk) - The Company has a **$2.1 million** term loan with First American Commercial Bancorp, Inc., with **$1.6 million** outstanding as of June 30, 2023[71](index=71&type=chunk)[269](index=269&type=chunk) [12. Earnings Per Share](index=24&type=section&id=12.%20Earnings%20Per%20Share) Basic and diluted EPS are computed using the two-class method, treating non-vested restricted stock as participating securities - Basic and diluted earnings per share are computed using the two-class method[100](index=100&type=chunk) - Non-vested restricted stock awards with non-forfeitable dividend rights are considered participating securities[100](index=100&type=chunk) | Metric | Six months June 30, 2023 | Six months June 30, 2022 | Three months June 30, 2023 | Three months June 30, 2022 | | :----- | :----------------------- | :----------------------- | :------------------------- | :------------------------- | | Basic net income per share | $1.05 | $1.24 | $0.31 | $0.63 | | Diluted net income per share | $1.05 | $1.24 | $0.31 | $0.63 | [13. Major Customers and Vendors](index=25&type=section&id=13.%20Major%20Customers%20and%20Vendors) The Company has significant customer and vendor concentrations, impacting net sales and total purchases - Two major customers accounted for **22%** and **14%** of net sales for the three months ended June 30, 2023 (**21%** and **20%** in 2022)[101](index=101&type=chunk)[169](index=169&type=chunk) - Two major customers accounted for **21%** and **14%** of net sales for the six months ended June 30, 2023 (**23%** and **18%** in 2022)[101](index=101&type=chunk)[178](index=178&type=chunk) - One major vendor accounted for **12%** of total purchases for the three months ended June 30, 2023 (**16%** in 2022)[43](index=43&type=chunk)[169](index=169&type=chunk) - Two major vendors accounted for **19%** and **12%** of total purchases for the six months ended June 30, 2023 (one major vendor at **19%** in 2022)[43](index=43&type=chunk)[178](index=178&type=chunk) [14. Income Taxes](index=25&type=section&id=14.%20Income%20Taxes) The Company analyzes tax filing positions, recognizing interest/penalties and accruing liabilities based on experience and tax law - The Company recognizes interest related to unrecognized tax benefits as interest expense and penalties as operating expenses[73](index=73&type=chunk) - Accruals for tax liabilities are based on an assessment of factors including historical experience and interpretations of tax law[73](index=73&type=chunk) [15. Stockholders' Equity and Stock Based Compensation](index=25&type=section&id=15.%20Stockholders%27%20Equity%20and%20Stock%20Based%20Compensation) This section details equity incentive plans, restricted stock awards, and share-based compensation expense, with unrecognized costs amortized over 1.9 years - The 2021 Omnibus Incentive Plan authorizes various equity-based awards, with **257,805 shares** available for future grants as of June 30, 2023[102](index=102&type=chunk)[304](index=304&type=chunk) - The 2012 Stock-Based Compensation Plan has been replaced by the 2021 Plan, with **zero shares** available as of June 30, 2023[103](index=103&type=chunk) | Restricted Stock Awards (Shares) | Nonvested at Jan 1, 2023 | Granted in 2023 | Vested in 2023 | Forfeited in 2023 | Nonvested at June 30, 2023 | | :------------------------------- | :----------------------- | :-------------- | :------------- | :---------------- | :------------------------- | | Shares | 121,059 | 115,789 | (71,478) | — | 165,370 | | Weighted Average Grant Date Fair Value | $24.83 | $45.81 | $37.98 | — | $33.83 | - Total unrecognized compensation costs related to nonvested share-based compensation arrangements are approximately **$5.1 million**, expected to be recognized over a weighted-average period of **1.9 years**[104](index=104&type=chunk) [16. Segment Information](index=27&type=section&id=16.%20Segment%20Information) The Company operates 'Distribution' and 'Solutions' segments, assessing performance by revenue, cost, and direct costs, with assets identified - The Company has two reportable operating segments: 'Distribution' and 'Solutions'[77](index=77&type=chunk) - The 'Distribution' segment sells products and services to corporate resellers, VARs, consultants, and systems integrators[2](index=2&type=chunk)[77](index=77&type=chunk) - The 'Solutions' segment acts as a cloud solutions provider and value-added reseller, selling software/hardware and providing technical services directly to end-user customers[2](index=2&type=chunk)[77](index=77&type=chunk) | Metric (in thousands) | Six months June 30, 2023 | Six months June 30, 2022 | Three months June 30, 2023 | Three months June 30, 2022 | | :-------------------- | :----------------------- | :----------------------- | :------------------------- | :------------------------- | | **Net Sales:** | | | | | | Distribution | $154,678 | $128,775 | $76,128 | $62,992 | | Solutions | $12,093 | $10,407 | $5,604 | $4,871 | | **Gross Profit:** | | | | | | Distribution | $23,801 | $19,852 | $11,074 | $10,259 | | Solutions | $5,100 | $4,614 | $2,619 | $2,227 | | **Segment Income Before Taxes:** | | | | | | Distribution | $13,825 | $12,601 | $6,064 | $6,672 | | Solutions | $2,482 | $2,466 | $1,302 | $1,217 | | Selected Assets by Segment (in thousands) | As of June 30, 2023 | As of December 31, 2022 | | :------------------------ | :------------------ | :---------------------- | | Distribution | $152,199 | $180,602 | | Solutions | $21,374 | $21,420 | | Segment Select Assets | $173,573 | $202,022 | | Corporate Assets | $60,125 | $29,834 | | Total Assets | $233,698 | $231,856 | | Identifiable Assets by Geographic Areas (in thousands) | June 30, 2023 | December 31, 2022 | | :------------------------------------- | :------------ | :---------------- | | USA | $137,315 | $137,877 | | Canada | $25,789 | $27,597 | | Europe and United Kingdom | $70,594 | $66,382 | | Total | $233,698 | $231,856 | [17. Related Party Transactions](index=33&type=section&id=17.%20Related%20Party%20Transactions) The Company made sales to a related party customer, with net sales of approximately **$0.5 million** and **$1.0 million** for the periods - Net sales to a related party customer were approximately **$0.5 million** for the three months ended June 30, 2023 (vs. **$0.7 million** in 2022)[9](index=9&type=chunk) - Net sales to this customer totaled approximately **$1.0 million** for the six months ended June 30, 2023 (vs. **$1.0 million** in 2022)[9](index=9&type=chunk) - Amounts due from this customer were approximately **$0.5 million** as of June 30, 2023 (vs. **$0.1 million** as of December 31, 2022)[9](index=9&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, covering business segments, influencing factors, critical accounting policies, and performance analysis [Overview](index=34&type=section&id=Overview) The Company is an IT distribution and solutions provider, serving resellers and end-users through its 'Distribution' and 'Solutions' segments - The Company is a value-added IT distribution and solutions company[2](index=2&type=chunk) - Operates through 'Distribution' (selling to resellers) and 'Solutions' (cloud solutions provider and VAR to end-users) segments[2](index=2&type=chunk) - Offers extensive products from leading software vendors and tools for virtualization/cloud computing, security, networking, storage, and infrastructure management[2](index=2&type=chunk) [Factors Influencing Our Financial Results](index=34&type=section&id=Factors%20Influencing%20Our%20Financial%20Results) Financial results are influenced by competitive pressures, declining margins, product mix, and IT spending, with inflation impact limited by declining IT prices - Majority of net sales are derived from third-party software licenses, maintenance, and service agreements[88](index=88&type=chunk) - Gross product margins have historically declined due to competition and shifts in product mix[117](index=117&type=chunk) - Inflation has not historically been adverse, as IT product prices generally decline, but competitive pressure may limit passing on price increases[3](index=3&type=chunk) - Sales and operating results fluctuate due to software industry conditions, demand shifts, pricing, and product offerings[118](index=118&type=chunk)[237](index=237&type=chunk) [Financial Overview](index=36&type=section&id=Financial%20Overview) For Q2 2023, net sales increased **20%** to **$81.7 million**, but net income decreased **52%** to **$1.4 million** due to higher SG&A | Metric (in millions) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Change (%) | | :------------------- | :------------------------------- | :------------------------------- | :--------- | | Net sales | $81.7 | $67.9 | +20% | | Gross profit | $13.7 | $12.5 | +10% | | Selling, general and administrative ("SG&A") expenses | $11.6 | $7.9 | +46% | | Amortization and depreciation expense | $0.6 | $0.4 | +50% | | Net income | $1.4 | $2.8 | -52% | | Diluted income per share | $0.31 | $0.63 | -52% | [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies and estimates requiring significant judgment, including revenue, allowances, goodwill, and income taxes - The preparation of financial statements requires estimates and judgments affecting reported amounts of assets, liabilities, revenues, and expenses[93](index=93&type=chunk) - Estimates are based on historical experience and reasonable assumptions, with ongoing evaluation for product returns, bad debts, inventories, intangible assets, income taxes, stock-based compensation, and contingencies[122](index=122&type=chunk)[137](index=137&type=chunk) [Revenue](index=37&type=section&id=Revenue) Judgment is used to determine performance obligations and allocate sales prices for bundled products and third-party maintenance - Significant judgment is used to determine if ongoing maintenance obligations by third-party vendors are distinct from software licenses[138](index=138&type=chunk)[95](index=95&type=chunk) - Sales proceeds are allocated among performance obligations using observable data like standalone selling prices or market pricing for similar products and services[95](index=95&type=chunk) [Allowances for Accounts Receivable](index=38&type=section&id=Allowances%20for%20Accounts%20Receivable) Allowances for doubtful accounts and sales returns are estimated based on historical experience, aging, and creditworthiness - Allowances for doubtful accounts are estimated considering historical experience, aging of receivables, and customer creditworthiness[124](index=124&type=chunk) - An estimate for sales returns is recorded as a liability at the time of sale based on historical experience[124](index=124&type=chunk) [Inventory Allowances](index=38&type=section&id=Inventory%20Allowances) Inventory is written down for obsolescence based on future demand and market conditions; further write-offs may be needed - Inventory is written down for estimated obsolescence or unmarketable inventory[125](index=125&type=chunk) - Estimates are based on assumptions about future demand and market conditions[125](index=125&type=chunk) [Accounts Receivable – Long Term](index=38&type=section&id=Accounts%20Receivable%20%E2%80%93%20Long%20Term) Long-term accounts receivable are discounted to present value at market rates, with interest income accreted subsequently - Long-term accounts receivable are discounted to their present value at prevailing market rates at the time of sale[140](index=140&type=chunk) - Interest income is accreted on unpaid accounts receivable in future periods[37](index=37&type=chunk) [Goodwill](index=38&type=section&id=Goodwill) Goodwill is tested for impairment annually or as needed, using qualitative and, if necessary, quantitative assessments of fair value - Goodwill is tested for impairment annually, and between annual tests if circumstances change[126](index=126&type=chunk) - A qualitative assessment determines if it's more likely than not that fair value is less than carrying amount[98](index=98&type=chunk) - A quantitative test compares the fair value of a reporting unit with its carrying amount; an impairment loss is recognized if carrying amount exceeds fair value[99](index=99&type=chunk) [Intangible Assets](index=40&type=section&id=Intangible%20Assets) Intangible assets are amortized straight-line over their useful lives and reviewed for impairment if carrying amount is unrecoverable - Intangible assets with determinable lives are amortized on a straight-line basis over their estimated useful lives[239](index=239&type=chunk) - Assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable[239](index=239&type=chunk) [Income Taxes](index=40&type=section&id=Income%20Taxes) Valuation allowances for deferred tax assets are assessed based on future taxable income and planning; unrealizable assets are charged to income - Future taxable income and tax planning strategies are considered when assessing the need for a valuation allowance on deferred tax assets[129](index=129&type=chunk) - If deferred tax assets are deemed unrealizable, an adjustment would be charged to income[129](index=129&type=chunk) [Share-Based Payments](index=40&type=section&id=Share-Based%20Payments) Stock-based compensation is measured at grant date fair value and expensed straight-line over the service period; forfeitures are recorded as they occur - Stock-based compensation cost is measured at grant date fair value[5](index=5&type=chunk) - Expense is recognized on a straight-line basis over the requisite service period[5](index=5&type=chunk) - The impact of forfeitures is recorded when they occur[5](index=5&type=chunk) [Foreign Exchange](index=40&type=section&id=Foreign%20Exchange) Foreign currency exposure from international transactions may be hedged with forward contracts, with fair value changes recorded in earnings - Foreign currency exposure relates primarily to international transactions where collected currency differs from purchase currency[144](index=144&type=chunk) - The Company may use foreign exchange contracts (forward purchase agreements) to hedge exposures, with changes in fair value recorded in earnings[144](index=144&type=chunk) - No foreign exchange contracts were outstanding as of June 30, 2023[144](index=144&type=chunk) [Interest, Net](index=40&type=section&id=Interest%2C%20Net) Net interest comprises income from long-term receivable discount amortization, offset by credit facility interest expense - Interest, net, primarily consists of income from the amortization of the discount on accounts receivable long-term[131](index=131&type=chunk) - This income is net of interest expense on the Company's credit facility[131](index=131&type=chunk) [Recently Issued Accounting Pronouncements](index=40&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) The Company adopted ASU 2016-13 (CECL standard) effective January 1, 2023, with no impact on its financial statements - The Company adopted ASU 2016-13 (CECL standard) effective January 1, 2023[146](index=146&type=chunk) - The adoption did not have an impact on the Company's financial statements[146](index=146&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) This section analyzes financial performance, including key operating metrics, non-GAAP reconciliations, and comparative review of sales, profit, and expenses | Metric (as % of Net Sales) | Six months June 30, 2023 | Six months June 30, 2022 | | :------------------------- | :----------------------- | :----------------------- | | Net sales | 100.0% | 100.0% | | Cost of sales | 83.2% | 81.6% | | Gross profit | 16.8% | 18.4% | | Selling, general and administrative expenses | 14.2% | 11.7% | | Amortization and depreciation expense | 0.7% | 0.7% | | Income from operations | 1.9% | 6.1% | | Other income (expense) | 0.4% | (0.7%) | | Income before income taxes | 2.3% | 5.4% | | Income tax provision | 0.6% | 1.3% | | Net income | 1.7% | 4.1% | [Key Operating Metrics / Non-GAAP Financial Measures](index=42&type=section&id=Key%20Operating%20Metrics%20%2F%20Non-GAAP%20Financial%20Measures) Management monitors key financial and non-financial metrics like net sales, adjusted gross billings, gross profit, and adjusted EBITDA for strategic decisions - Key operating metrics include net sales, adjusted gross billings, gross profit, adjusted EBITDA, gross profit as a percentage of adjusted gross billings, and adjusted EBITDA as a percentage of gross profit[147](index=147&type=chunk) - Gross profit increased **10%** to **$13.7 million** for the three months ended June 30, 2023, while effective margin decreased to **34.1%**[148](index=148&type=chunk) - Gross profit increased **18%** to **$28.9 million** for the six months ended June 30, 2023, while effective margin increased to **35.7%**[148](index=148&type=chunk) [Reconciliations of Non-GAAP Financial Measures](index=44&type=section&id=Reconciliations%20of%20Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP financial measures, including adjusted gross billings to net sales and adjusted EBITDA to net income - Adjusted gross billings are defined as net sales adjusted for the cost of sales related to sales where the Company is an agent[14](index=14&type=chunk) - Adjusted EBITDA is defined as net income plus provision for income taxes, depreciation, amortization, share-based compensation, and interest[151](index=151&type=chunk) | Reconciliation of net sales to adjusted gross billings (Non-GAAP) (in thousands) | Six months June 30, 2023 | Six months June 30, 2022 | Three months June 30, 2023 | Three months June 30, 2022 | | :--------------------------------------------------------------- | :----------------------- | :----------------------- | :------------------------- | :------------------------- | | Net sales | $166,771 | $139,182 | $81,732 | $67,863 | | Costs of sales related to sales where the Company is an agent | $414,653 | $341,328 | $192,980 | $173,950 | | Adjusted gross billings | $581,424 | $480,510 | $274,712 | $241,813 | | Net income reconciled to adjusted EBITDA (in thousands) | Six months June 30, 2023 | Six months June 30, 2022 | Three months June 30, 2023 | Three months June 30, 2022 | | :-------------------------------------- | :----------------------- | :----------------------- | :------------------------- | :------------------------- | | Net income | $4,705 | $5,503 | $1,381 | $2,791 | | Provision for income taxes | $1,523 | $1,663 | $458 | $867 | | Amortization and depreciation | $1,317 | $802 | $604 | $445 | | Interest expense | $49 | $40 | $21 | $24 | | EBITDA | $7,594 | $8,008 | $2,464 | $4,127 | | Share-based compensation | $2,735 | $714 | $2,206 | $344 | | Adjusted EBITDA | $10,329 | $8,722 | $4,670 | $4,471 | [Acquisitions](index=44&type=section&id=Acquisitions) The Company acquired Spinnakar Limited on August 18, 2022, for approximately **£9.8 million**, with its operating results included from acquisition - The Company acquired Spinnakar Limited on August 18, 2022[242](index=242&type=chunk) - The aggregate purchase price was approximately **£9.8 million** (equivalent to **$11.8 million USD**)[242](index=242&type=chunk) - Operating results of Spinnakar are included in the Company's results from the acquisition date[242](index=242&type=chunk) [Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022](index=46&type=section&id=Three%20Months%20Ended%20June%2030%2C%202023%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202022) This section compares financial performance for Q2 2023 versus prior year, detailing changes in net sales, gross profit, expenses, and taxes [Net Sales and Adjusted Gross Billings](index=46&type=section&id=Net%20Sales%20and%20Adjusted%20Gross%20Billings) Net sales increased **20%** to **$81.7 million**, and adjusted gross billings increased **14%**, with growth rate differences due to product mix shifts - Net sales increased **20%** to **$81.7 million** for the three months ended June 30, 2023[154](index=154&type=chunk) - Adjusted gross billings increased **14%** to **$274.7 million** for the three months ended June 30, 2023[154](index=154&type=chunk) - Distribution segment net sales increased **21%** to **$76.1 million**, and Solutions segment net sales increased **15%** to **$5.6 million**[155](index=155&type=chunk)[156](index=156&type=chunk) - The difference in growth rates between net sales and adjusted gross billings was due to product mix, with more gross-basis products in 2023 and more net-basis products in 2022[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Gross Profit](index=46&type=section&id=Gross%20Profit) Gross profit increased **10%** to **$13.7 million**, driven by organic growth in Distribution and increased billings in Solutions - Gross profit increased **10%** to **$13.7 million** for the three months ended June 30, 2023[249](index=249&type=chunk) - Distribution segment gross profit increased **8%** to **$11.1 million**, driven by organic growth but offset by higher early pay discounts[243](index=243&type=chunk) - Solutions segment gross profit increased **18%** to **$2.6 million**, driven by increased adjusted gross billings[266](index=266&type=chunk) - Customer rebates and discounts increased to **$2.5 million** (from **$1.8 million**), and vendor rebates and discounts increased to **$2.1 million** (from **$1.6 million**)[170](index=170&type=chunk)[157](index=157&type=chunk) [Selling, General and Administrative Expenses](index=48&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) SG&A expenses increased **47%** to **$11.6 million**, primarily due to a **$1.8 million** one-time CEO stock compensation and higher personnel costs - SG&A expenses increased **47%** to **$11.6 million** for the three months ended June 30, 2023[250](index=250&type=chunk) - Included in SG&A was a **$1.8 million** one-time stock compensation expense for the Chief Executive Officer[159](index=159&type=chunk) - The remaining increase was due to higher salaries, commissions, personnel costs, and professional fees, supporting infrastructure investment for future growth[174](index=174&type=chunk) [Amortization and Depreciation Expense](index=48&type=section&id=Amortization%20and%20Depreciation%20Expense) Amortization and depreciation expense increased **50%** to **$0.6 million**, mainly due to intangible assets from the Spinnakar acquisition - Amortization and depreciation expense increased **50%** to **$0.6 million** for the three months ended June 30, 2023[200](index=200&type=chunk) - The increase was primarily due to the amortization of intangible assets acquired in the Spinnakar acquisition[200](index=200&type=chunk) [Income Taxes](index=48&type=section&id=Income%20Taxes) Income tax provision was **$0.5 million** with a **24.9%** effective tax rate, impacted by executive compensation deductibility limitations - Provision for income taxes was **$0.5 million** for the three months ended June 30, 2023 (vs. **$0.9 million** in 2022)[175](index=175&type=chunk) - The effective tax rate was **24.9%** for the three months ended June 30, 2023 (vs. **23.7%** in 2022)[175](index=175&type=chunk) - The change in effective tax rate was a result of limitations on the deductibility of certain executive compensation amounts[175](index=175&type=chunk) [Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022](index=48&type=section&id=Six%20Months%20Ended%20June%2030%2C%202023%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202022) This section compares financial performance for H1 2023 versus prior year, detailing changes in net sales, gross profit, expenses, and taxes [Net Sales and Adjusted Gross Billings](index=48&type=section&id=Net%20Sales%20and%20Adjusted%20Gross%20Billings) Net sales increased **20%** to **$166.8 million**, and adjusted gross billings increased **21%**, with growth differences due to product mix and FX - Net sales increased **20%** to **$166.8 million** for the six months ended June 30, 2023[176](index=176&type=chunk) - Adjusted gross billings increased **21%** to **$581.4 million** for the six months ended June 30, 2023[176](index=176&type=chunk) - Distribution segment net sales increased **20%** to **$154.7 million**, and Solutions segment net sales increased **16%** to **$12.1 million**[267](index=267&type=chunk)[162](index=162&type=chunk) - Adjusted gross billings increased at a greater rate than net sales due to product mix shifts towards net-basis products and an unfavorable foreign exchange impact[176](index=176&type=chunk)[267](index=267&type=chunk) [Gross Profit](index=50&type=section&id=Gross%20Profit) Gross profit increased **18%** to **$28.9 million**, driven by organic growth in Distribution and increased billings in Solutions - Gross profit increased **18%** to **$28.9 million** for the six months ended June 30, 2023[164](index=164&type=chunk) - Distribution segment gross profit increased **20%** to **$23.8 million**, driven by organic growth but offset by higher early pay discounts[204](index=204&type=chunk) - Solutions segment gross profit increased **11%** to **$5.1 million**, driven by increased adjusted gross billings[179](index=179&type=chunk) - Customer rebates and discounts increased to **$6.4 million** (from **$3.7 million**), and vendor rebates and discounts increased to **$3.8 million** (from **$3.7 million**)[165](index=165&type=chunk)[205](index=205&type=chunk) [Selling, General and Administrative Expenses](index=50&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) SG&A expenses increased **35%** to **$21.8 million**, primarily due to a **$1.8 million** one-time CEO stock compensation and higher personnel costs - SG&A expenses increased **35%** to **$21.8 million** for the six months ended June 30, 2023[166](index=166&type=chunk) - Included in SG&A was a **$1.8 million** one-time stock compensation expense for the Chief Executive Officer[206](index=206&type=chunk) - The remaining increase was due to higher salaries, commissions, personnel costs, and professional fees, supporting infrastructure investment for future growth[181](index=181&type=chunk) - SG&A expenses remained consistent at **3.7%** of adjusted gross billings for both periods[166](index=166&type=chunk) [Amortization and Depreciation Expense](index=51&type=section&id=Amortization%20and%20Depreciation%20Expense) Amortization and depreciation expense increased **63%** to **$1.3 million**, mainly due to intangible assets from the Spinnakar acquisition - Amortization and depreciation expense increased **63%** to **$1.3 million** for the six months ended June 30, 2023[207](index=207&type=chunk) - The increase was primarily due to the amortization of intangible assets acquired in the Spinnakar acquisition[207](index=207&type=chunk) [Income Taxes](index=52&type=section&id=Income%20Taxes) Income tax provision was **$1.5 million** with a **24.5%** effective tax rate, impacted by executive compensation deductibility limitations - Provision for income taxes was **$1.5 million** for the six months ended June 30, 2023 (vs. **$1.7 million** in 2022)[182](index=182&type=chunk) - The effective tax rate was **24.5%** for the six months ended June 30, 2023 (vs. **23.2%** in 2022)[182](index=182&type=chunk) - The change in effective tax rate was a result of limitations on the deductibility of certain executive compensation amounts[182](index=182&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents significantly increased to **$43.9 million**, with operating activities providing **$29.6 million** and sufficient liquidity expected - Cash and cash equivalents increased **117%** to **$43.9 million** as of June 30, 2023, from **$20.2 million** at December 31, 2022[183](index=183&type=chunk) - Net cash provided by operating activities was **$29.6 million** for the six months ended June 30, 2023[208](index=208&type=chunk) - Net cash used in investing activities was **$3.0 million**, primarily for fixed asset purchases[184](index=184&type=chunk) - Net cash used in financing activities was **$3.5 million**, including dividends, treasury stock purchases, and loan repayments[209](index=209&type=chunk) - The Company anticipates sufficient funds from cash and its **$50.0 million** revolving credit facility to meet working capital and cash requirements for the next 12 months[210](index=210&type=chunk)[185](index=185&type=chunk) [Foreign Exchange](index=52&type=section&id=Foreign%20Exchange) Foreign subsidiaries face currency exchange rate fluctuations, primarily CAD, EUR, and GBP to USD, impacting demand or pricing - Foreign subsidiaries are subject to changes in demand or pricing from fluctuations in currency exchange rates[211](index=211&type=chunk) - Primary exposure is to the Canadian Dollar, Euro Dollar, and British Pound-to-U.S. Dollar exchange rates[211](index=211&type=chunk) [Off-Balance Sheet Arrangements](index=52&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2023, the Company had no off-balance sheet arrangements as defined by SEC regulations - As of June 30, 2023, the Company had no off-balance sheet arrangements[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the Company is exempt from providing quantitative and qualitative disclosures about market risk - Smaller reporting companies are not required to provide information on quantitative and qualitative disclosures about market risk[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=54&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2023 - Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2023[189](index=189&type=chunk)[214](index=214&type=chunk) - The evaluation was conducted under the supervision and participation of the CEO, CFO, and Chief Accounting Officer[189](index=189&type=chunk) - Management concluded that the Company's disclosure controls and procedures were effective[189](index=189&type=chunk) [Changes in Internal Control Over Financial Reporting](index=54&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes occurred in internal control over financial reporting during the three months ended June 30, 2023 - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2023[215](index=215&type=chunk) PART II — OTHER INFORMATION [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on Common Stock repurchases, primarily shares surrendered by employees for tax withholding upon Restricted Stock vesting | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :----- | :------------------------------- | :--------------------------- | | April 1, 2023 - April 30, 2023 | 13,377 | $51.32 | | May 1, 2023 - May 31, 2023 | 6,326 | $46.29 | | June 1, 2023 - June 30, 2023 | — | — | | Total | 19,703 | $49.71 | - **19,703 shares** were surrendered by employees to satisfy individual tax withholding obligations upon vesting of Restricted Stock[217](index=217&type=chunk) - These surrendered shares are not part of the publicly announced Common Stock repurchase program[217](index=217&type=chunk) - The Board of Directors approved increases to the repurchase program in 2014 and 2017, with **545,786 shares** remaining available for repurchase as of June 30, 2023[218](index=218&type=chunk)[192](index=192&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, incentive plans, credit agreements, and certifications - Exhibits include corporate governance documents (Certificate of Incorporation, Bylaws), executive compensation plans, and credit agreements[220](index=220&type=chunk) - Certifications pursuant to Rule 13a-14(a) or Rule 15d-14(a) and 18 U.S.C. Section 1350 are included for the CEO, CFO, and Chief Accounting Officer[220](index=220&type=chunk) - The cover page interactive data file (XBRL) is embedded within the Inline XBRL document[195](index=195&type=chunk) [SIGNATURES](index=59&type=section&id=SIGNATURES) This section contains required signatures from the CEO, CFO, and Chief Accounting Officer, certifying the report filing - The report is signed by Dale Foster (Chief Executive Officer), Andrew Clark (Vice President and Chief Financial Officer), and Matthew Sullivan (Vice President and Chief Accounting Officer)[234](index=234&type=chunk) - The signatures certify the report pursuant to the requirements of the Securities Exchange Act of 1934[233](index=233&type=chunk)

• 17+ consecutive year history INVESTMENT HIGHLIGHTS | --- | --- | --- | --- | --- | |-------------------------------------------------------------|-------|-----------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Connecting People with Technology | | | | Climb Global Solutions, Inc. Investor Presentation May 2023 | | | | | DISCLAIMERS This presentation is for informational purposes only and is not an offer to sell securities or a solicitation of an offer to buy any secu ...

Climb Global Solutions (NASDAQ:CLMB) Q1 2023 Earnings Conference Call May 4, 2023 8:30 AM ET Company Participants Sean Mansouri - IR Advisor, Elevate IR Dale Foster - CEO Andrew Clark - CFO Conference Call Participants Vincent Colicchio - Barrington Research Operator Good morning, everyone, and thank you for participating in today's Conference Call to discuss Climb Global Solutions' Financial Results for the First Quarter Ended March 31, 2023. Joining us today are Climb's CEO, Mr. Dale Foster; the company's ...

Allowance for Accounts Receivable The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including historical experience, aging of the accounts receivable, and specific information obtained by the Company on the financial condition and the current creditworthiness of its customers. If the financi ...

Dividends Purchases of Equity Securities Table of Contents 4 Industrial Way West, Suite 300 Eatontown, NJ 07724 (Address of principal executive offices) (Zip Code) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ⌧ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ◻ No ⌧ | --- | --- | |--------------------------------------------|-------| | | | | Item ...

Climb Global Solutions (NASDAQ:CLMB) Q3 2022 Earnings Conference Call November 3, 2022 8:30 AM ET Company Participants Dale Foster - CEO Drew Clark - CFO Sean Mansouri - IR Advisor, Elevate IR Conference Call Participants Vincent Colicchio - Barrington Research Operator Good morning, everyone, and thank you for participating in today's conference call to discuss Climb Global Solutions Financial Results for the Third Quarter Ended September 30, 2022. Joining us today are Climb's CEO, Mr. Dale Foster; the com ...

Table of Contents Title of each class:Trading Symbol Name of each exchange on which registered: Common stock, $.01 par value per share CLMB The Nasdaq Global Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...