Financial Performance - Net sales increased by 40%, or $186.9 million, to $652.5 million for the year ended December 31, 2025, compared to $465.6 million for the same period in 2024[148] - Gross profit rose by 16%, or $14.2 million, to $105.3 million for the year ended December 31, 2025, compared to $91.1 million for the same period in 2024[148] - Net income increased by 15%, or $2.7 million, to $21.3 million for the year ended December 31, 2025, compared to $18.6 million for the same period in 2024[148] - Income per diluted share increased by 14%, or $0.58, to $4.64 for the year ended December 31, 2025, compared to $4.06 for the same period in 2024[148] - Adjusted EBITDA for the year ended December 31, 2025 was $42.9 million, compared to $39.6 million for 2024[178] - Effective margin for adjusted EBITDA decreased to 40.7% for the year ended December 31, 2025, down from 43.5% in 2024[179] - Net income for the year ended December 31, 2025 was $21.3 million, representing 3.3% of net sales[176] Expenses - Selling, general and administrative expenses increased by 20%, or $11.1 million, to $67.6 million for the year ended December 31, 2025, compared to $56.5 million for the same period in 2024[148] - Cost of sales as a percentage of net sales increased to 83.9% for the year ended December 31, 2025, compared to 80.4% in 2024[173] - Customer rebates and discounts for the year ended December 31, 2025 were $22.7 million compared to $19.7 million for the same period in the prior year[190] - Vendor rebates and discounts for the year ended December 31, 2025 were $17.4 million compared to $6.1 million for the same period in the prior year[191] Acquisitions - The acquisition of Data Solutions was completed for approximately €15.0 million (equivalent to $15.9 million USD) on October 6, 2023[181] - The acquisition of DSS was completed for an aggregate purchase price of approximately $20.3 million on July 31, 2024[180] - Acquisition-related costs for the year ended December 31, 2025, were $0.8 million, down from $2.3 million in 2024[148] Cash Flow and Liquidity - Cash and cash equivalents increased by $6.8 million to $36.6 million at December 31, 2025 compared to $29.8 million at December 31, 2024[214] - Net cash provided by operating activities for the year ended December 31, 2025 was $16.6 million, driven by higher net income and changes in operating assets and liabilities[215] - The Company anticipates an increase in working capital needs as it invests in business growth, with sufficient cash and unused borrowings to meet requirements for at least the next 12 months[224] Debt and Credit Facilities - The Company entered into a revolving credit agreement with JPMorgan Chase Bank for a facility of up to $50.0 million, with the option to increase by an additional $20.0 million[220] - The Company has a $2.1 million term loan with First American Commercial Bancorp, bearing interest at 3.73% per annum, to be repaid over 48 months[222] - As of December 31, 2025, there were no amounts outstanding under the revolving credit agreement and the term loan had $0.2 million remaining[221][222] Tax and Regulatory - The effective tax rate for the year ended December 31, 2025 was 23.6% of income before taxes, compared to 25.6% for the same period in the prior year[197] Market and Operational Factors - The company has subsidiaries in the United States, Canada, Netherlands, United Kingdom, Ireland, and Germany, enhancing its sales reach[138] - The company’s sales are influenced by external factors such as IT spending levels and customer demand for distributed products[140] - The technology trends driving customer purchasing behaviors include cloud adoption, AI, and hybrid IT solutions[140] Currency and Interest Rate Risk - The Company is exposed to foreign currency fluctuations primarily in the Canadian Dollar, Euro, and British Pound against the U.S. Dollar, which may impact financial results[225][229] - A hypothetical 10% change in currency exchange rates would not have a material impact on the Company's consolidated financial statements[230] - Interest rate risk is managed through a mix of fixed-rate and variable-rate debt, with floating rates on current borrowings[227] - A 100 basis point change in floating rate debt would have no material impact on results as of December 31, 2025[228] - The Company uses foreign exchange forward contracts to hedge currency exposure but does not engage in trading or speculative derivatives[230] Dividend Policy - The company plans to suspend quarterly cash dividends beginning with the first quarter of 2026 to preserve financial flexibility[145]
Climb Solutions(CLMB) - 2025 Q4 - Annual Report