Wayside Technology Group, Inc. (WSTG) Q1 2022 Earnings Conference Call May 6, 2022 8:30 AM ET

Company Participants

Dale Foster – Chief Executive Officer

Andrew Clark – Chief Financial Officer

Sean Mansouri – Investor Relations Adviser

Conference Call Participants

Bob Sales – LMK Capital Management

Operator

Good morning, everyone, and thank you for participating in today's conference call to discuss Wayside Technology Group financial results for the First Quarter ended March 31st, 2022. Joining us today are Wayside's CEO, Mr. Dale Foster, the company's CFO, Mr. Drew Clark, and the company's Investor Relations Adviser, Mr. Sean Mansouri, with Elevate IR. By now, everyone should have access to the first-quarter 2022 earnings press release, which was issued yesterday afternoon at approximately 4:05 PM Eastern Time. The release is available in the Investor Relations section of Wayside Technology Group's website at waysidetechnology.com. This call will also be available for webcast replay on the company's website. Following the management's remarks, we will open the call for questions. I would now like to turn the call over to Mr. Mansouri for introductory comments.

Sean Mansouri

Thank you. Before I introduce Dale, I'd like to remind listeners that certain comments made on this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time-to-time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statements. Our presentation also includes certain non-GAAP financial measures, including adjusted gross billings and adjusted EBITDA as supplemental measures of performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You will find reconciliation charts and other important information in the earnings press release and Form 8-K we furnished to the SEC yesterday. I will now like to turn the call over to Wayside’s CEO, Dale Foster.

Dale Foster

Thank you, Sean, and good morning, everyone. During the first quarter, we continued to build up our strong momentum from the end of last year. We grew our top-line double-digits in Q1, with our net income increasing to 79% and our Adjusted EBITDA was up over 60%, reflecting the inherent operating leverage in our business. These significant improvements are a testament to the execution of our core initiatives. More specifically, we're continuing to generate organic growth with our existing vendors and customers while adding new and disruptive vendors to our line card. This organic growth was most evident in our top 20 vendors, as we grew gross selling with this group by nearly 20% during the quarter to $171 million. This reflects the strength of our relationships with our most meaningful partners and it showcases both the value we are offering as well as the ability to evaluate and partner with the right companies that are bringing innovative products to the market. We've seen a significant increase in the sheer number of brands looking to partner with Climb this past quarter. While we remain committed to a purposefully limited line card, we did enter into a relatively high number of new partnership agreements in Q1. Climb evaluated over 50 new perspective brands and signed eight new agreements. One of the most notable partnerships we saw in Q1 was a partnership with Cato Networks.