Financial Performance - Net sales increased by 21%, or $42.8 million, to $251.6 million for the year ended December 31, 2020, compared to $208.8 million for the same period in 2019[146] - Gross profit increased by 10%, or $3.0 million, to $33.0 million for the year ended December 31, 2020, compared to $30.0 million for the same period in 2019[146] - Net income was $4.5 million for the year ended December 31, 2020, compared to $6.8 million for the same period in 2019[146] - Income per diluted share was $1.01 for the year ended December 31, 2020, compared to $1.51 for the same period in 2019[146] - Net income for the year ended December 31, 2020, was $4.474 million, down from $6.787 million in 2019, reflecting a net income margin decrease from 3.3% to 1.8%[172] - Adjusted gross billings for 2020 were $729.239 million, up from $601.023 million in 2019, indicating a significant growth in business volume[174] - Adjusted EBITDA for the year ended December 31, 2020, was $11.422 million, compared to $10.472 million in 2019, showing an increase in profitability[177] - Effective margin for adjusted EBITDA was 34.6% for the year ended December 31, 2020, a decrease of 30 basis points compared to 34.9% for the same period in 2019[1] Expenses and Costs - Selling, general and administrative expenses increased by 15%, or $3.0 million, to $23.9 million for the year ended December 31, 2020, compared to $20.9 million for the same period in 2019[146] - Cost of sales increased to 86.9% of net sales in 2020, compared to 85.6% in 2019, resulting in a gross profit margin decrease from 14.4% to 13.1%[172] - Legal and financial advisory expenses related to unsolicited bids were $1.6 million for the year ended December 31, 2020, compared to no expense for the same period in 2019[146] - Acquisition-related costs were $1.5 million for the year ended December 31, 2020, compared to no expense for the same period in 2019[146] - Customer rebates and discounts for the year ended December 31, 2020 were $6.3 million compared to $3.8 million for the same period in the prior year[191] Assets and Cash Flow - Cash and cash equivalents increased to $29.3 million in 2020 from $15.0 million in 2019[128] - Total assets increased to $165.5 million in 2020 from $126.3 million in 2019[128] - Total stockholders' equity decreased slightly to $44.7 million in 2020 from $45.3 million in 2019[128] - Net cash provided by operating activities for the year ended December 31, 2020 was $38.0 million, consisting of net income adjusted for non-cash items of $6.7 million and changes in operating assets and liabilities of $31.3 million[212] - Net cash used in financing activities was $6.7 million, primarily for treasury stock purchases of $3.7 million and dividend payments of $3.0 million[214] - As of December 31, 2020, the company held 922,503 shares of its Common Stock in treasury at an average cost of $15.99 per share[216] Acquisitions - The company completed the acquisition of Interwork Technologies Inc. for a purchase price of $3.6 million on April 30, 2020[181] - The company completed the acquisition of CDF Group Limited for a purchase price of $17.4 million on November 6, 2020[182] - The company completed the acquisition of Interwork US and Interwork Canada for an aggregate purchase price of $3.6 million USD, and CDF Group Limited for approximately $17.4 million USD[213] - The company recorded acquisition-related costs of $1.518 million in 2020, which were not present in 2019[172] Tax and Regulatory Matters - The provision for income taxes in 2020 was $1.746 million, down from $2.261 million in 2019[177] - The company plans to adopt ASU 2016-13 in the first quarter of fiscal 2023, which may impact the recognition of allowances for accounts receivable[168] - The company tests goodwill for impairment annually, with significant estimates and assumptions involved in the process[158] - The company maintains allowances for doubtful accounts based on historical experience and current creditworthiness of customers, which may require adjustments if customer financial conditions deteriorate[152] Market and Operational Considerations - The company anticipates continued price competition in its market segments[192] - The change in payment terms with a large customer resulted in a cash increase of approximately $30 million, although it reduced net sales and gross profit by approximately $1.1 million for the year[212] - The company has a revolving credit facility of $20 million, with an interest rate based on the LIBOR Rate, which was 2.50% at December 31, 2020[218] - The company anticipates an increase in working capital needs as it invests in business growth, believing current cash and unused borrowings will suffice for the next 12 months[220] - The company is subject to fluctuations in currency exchange rates, primarily in the Canadian Dollar, Euro Dollar, and British Pound-to-U.S. Dollar[221] - As of December 31, 2020, the company had no off-balance sheet arrangements[222] - The company incurred $0.1 million of interest expense related to the Credit Facility for the years ended December 31, 2020 and 2019[219]
Climb Solutions(CLMB) - 2020 Q4 - Annual Report