Financial Performance - Net sales increased by 9%, or $7.4 million, to $92.4 million for the three months ended March 31, 2024, compared to $85.0 million for the same period in the prior year[101] - Gross profit increased by 12%, or $1.8 million, to $17.0 million for the three months ended March 31, 2024, compared to $15.2 million for the same period in the prior year[90] - Net income decreased by 18%, or $0.5 million, to $2.8 million for the three months ended March 31, 2024, compared to $3.3 million for the same period in the prior year[101] - Diluted income per share decreased by 19%, or $0.14, to $0.60 for the three months ended March 31, 2024, compared to $0.74 for the same period in the prior year[101] - Net income for the quarter ended March 31, 2024, was $2,731 thousand, compared to $3,324 thousand for the same period in 2023, indicating a decrease of about 17.8%[146] - Basic and diluted income per common share for the three months ended March 31, 2024, was $0.60, down from $0.74 in the same period of 2023[168] Expenses and Costs - Selling, general and administrative expenses increased by 22%, or $2.3 million, to $12.5 million for the three months ended March 31, 2024, compared to $10.2 million for the same period in the prior year[101] - Depreciation and amortization expense increased by 22%, or $0.2 million, to $0.9 million for the three months ended March 31, 2024, compared to $0.7 million for the same period in the prior year[101] - The Company incurred acquisition-related costs of $123 thousand in the three months ended March 31, 2024, compared to $22 thousand in the same period of 2023[168] - The Company recognized total amortization expense for other intangibles of $0.7 million for the three months ended March 31, 2024, compared to $0.5 million for the same period in 2023[182] Profitability Metrics - Gross profit margin decreased to 32.5% compared to 37.4% for the same period in the prior year[90] - Effective margin decreased to 3.8% for the three months ended March 31, 2024, compared to 5.0% for the same period in the prior year[88] - Distribution segment gross profit increased by 12%, or $1.5 million, to $14.2 million for the three months ended March 31, 2024, compared to $12.7 million in the prior year[297] Assets and Liabilities - Total current assets decreased from $269,060 thousand as of December 31, 2023, to $232,643 thousand as of March 31, 2024, representing a decline of approximately 13.5%[142] - The company's total liabilities decreased from $260,328 thousand as of December 31, 2023, to $221,873 thousand as of March 31, 2024, a reduction of approximately 14.7%[142] - The company’s total assets decreased from $335,098 thousand as of December 31, 2023, to $298,322 thousand as of March 31, 2024, a decline of about 11%[142] - As of March 31, 2024, total lease liabilities amounted to $1.266 billion, with a current portion of $495 million[184] - The Company had $1.2 million outstanding under a term loan as of March 31, 2024, which bears interest at a rate of 3.73% per annum[304] Cash Flow and Dividends - Cash and cash equivalents increased from $36,295 thousand as of December 31, 2023, to $43,572 thousand as of March 31, 2024, reflecting an increase of about 20.5%[142] - Cash and cash equivalents at the end of the period were $43,572 thousand, a decrease from $61,741 thousand at the end of the same period in 2023[173] - Operating cash flow for the three months ended March 31, 2024, was $14,047 thousand, compared to $43,610 thousand for the same period in 2023, indicating a significant decrease[173] - Total dividends paid were $0.7 million during the three months ended March 31, 2024, compared to $0.7 million for the same period in the prior year[100] - The company paid dividends of $0.17 per common share, totaling $756 thousand for the quarter ended March 31, 2024[146] Foreign Operations and Market Conditions - The company reported net sales from foreign operations of $28.2 million for the three months ended March 31, 2024, compared to $24.6 million for the same period in 2023, representing an increase of about 14.6%[152] - The company anticipates continued market challenges and pricing pressures, which may affect future sales and gross profit margins[165] - The company reported a foreign currency transaction loss of $85 thousand for the three months ended March 31, 2024, compared to a gain of $44 thousand in the same period of 2023[168] Customer and Acquisition Information - The Company had two major customers accounting for 20% and 15% of total net sales during the three months ended March 31, 2024[296] - The acquisition of Data Solutions was completed for an aggregate purchase price of approximately €15.0 million (equivalent to $15.9 million USD)[118] - The purchase consideration for the acquisition included approximately $2.3 million in fair value for potential earn-out consideration, with an undiscounted payment range of zero to approximately $3.9 million[181] - The fair value earn-out measurement for the acquisition was primarily based on Level 3 inputs, reflecting assumptions market participants would use to value these liabilities[181] Vendor and Rebates - Vendor rebates and discounts for the three months ended March 31, 2024, were $1.9 million, compared to $1.7 million for the same period in the prior year[298]
Climb Solutions(CLMB) - 2024 Q1 - Quarterly Report