Wayside Technology Group, Inc. (NASDAQ: WSTG) (“Wayside” or the
“Company”), a value-added global IT channel company providing
innovative sales and distribution solutions for emerging technology
vendors, is reporting results for the fourth quarter and full year
ended December 31, 2021.
Fourth Quarter 2021 Highlights vs. Same Year-Ago
Quarter
- Adjusted gross billings (a non-GAAP
financial measure defined below) increased 16% to $262.1
million.
- Net sales increased 6% to $75.5 million.
- Gross profit increased 20% to $12.6
million.
- Net income increased 36% to $3.4
million or $0.78 per diluted share.
- Adjusted EBITDA (a non-GAAP
financial measure defined below) increased 17% to $5.1
million.
Full Year 2021 Highlights vs. 2020:
- Adjusted gross billings increased
28% to $935.0 million.
- Net sales increased 12% to $282.6
million.
- Gross profit increased 38% to $45.7
million.
- Net income grew 2x to $9.2 million
or $2.09 per diluted share.
- Adjusted EBITDA increased 36% to
$15.5 million.
Management Commentary
“2021 was a record year for Wayside, highlighted by strong
results across all of our key financial metrics,” said CEO Dale
Foster. “This was driven by the execution of our core strategy –
generating organic growth with existing vendors, adding new
emerging vendors to our line card, and delivering on our
acquisition objectives, including the integration of CDF Group
Limited (“CDF”). Q4 2021 marked the one-year anniversary of our CDF
acquisition, which has been an excellent addition to our
organization. CDF realized 17% gross profit growth in 2021, in
addition to solid organic growth from Wayside, and we expect
additional synergies across our platforms in 2022 that will further
improve our operating leverage.
“2022 is already off to a strong year as we are ramping several
new vendor additions to our line card, including IRONSCALES,
Sonatype and Vultr. Further, in January we became an approved
vendor for the National Cooperative Purchasing Alliance (NCPA).
This partnership allows us to leverage NCPA’s cooperative
purchasing contracts and nationwide agency network to deliver
best-in-class security and IT solutions across multiple sectors,
including government, healthcare and education.
“Looking ahead to the rest of 2022, we expect to generate
another record year of results and will remain steadfast in
executing our core growth initiatives. We have a strong foundation
in place to support the emerging vendors in our network and
pipeline across the globe, and we look forward to continuing to
deliver value to our customers, partners and shareholders
alike.”
Dividend
Subsequent to the quarter end, on March 1, 2022, Wayside’s board
of directors declared a quarterly dividend of $0.17 per share of
its common stock payable on March 18, 2022 to shareholders of
record on March 14, 2022.
Fourth Quarter 2021 Financial Results
Adjusted gross billings in the fourth quarter of 2021 increased
16% to $262.1 million compared to $226.4 million for the same
period in 2020. This reflects both strong organic growth from new
and existing vendors as well as the benefit from the acquisition of
CDF, which occurred in November 2020. In addition, Net sales in the
fourth quarter of 2021 increased 6% to $75.5 million compared to
$71.4 million for the same period in 2020.
Gross profit in the fourth quarter of 2021 increased 20% to
$12.6 million compared to $10.5 million for the same period in
2020. The increase in gross profit was driven by new and existing
vendors, certain customers that did not fully utilize discounts for
early pay, as well as contribution from CDF.
Total selling, general, and administrative (“SG&A”) expenses
in the fourth quarter of 2021 were $8.2 million compared to $7.7
million for the same period in 2020. SG&A as a percentage of
adjusted gross billings was 3.1% for the fourth quarter of 2021
compared to 3.4% for same period in 2020.
Net income in the fourth quarter of 2021 increased 36% to $3.4
million or $0.78 per diluted share, compared to $2.5 million or
$0.58 per diluted share for the same period in 2020.
Adjusted EBITDA in the fourth quarter of 2021 increased 17% to
$5.1 million compared to $4.4 million for the same period in 2020.
The increase was driven by organic growth and the acquisition of
CDF.
Effective margin, which is defined as adjusted EBITDA as a
percentage of gross profit, was 40.7% in the fourth quarter of 2021
compared to 41.4% for the same period in 2020.
Cash and cash equivalents were $29.3 million on December 31,
2021, compared to $29.3 million on December 31, 2020, while working
capital increased by $8.6 million during this period. The Company
remained debt free on December 31, 2021, with no borrowings
outstanding under either its $20 million or £8 million credit
facilities.
Fourth quarter and full year financial results in 2020 partially
include operations from the acquisition of CDF on November 6,
2020.
Conference Call
The Company will conduct a conference call tomorrow, March 3,
2022, at 8:30 a.m. Eastern time to discuss its results for the
fourth quarter and full year ended December 31, 2021.
Wayside management will host the conference call, followed by a
question-and-answer period.
Date: Thursday, March 3, 2022Time: 8:30 a.m. Eastern
timeToll-free dial-in number: (844) 946-0286International dial-in
number: (602) 585-9685Conference ID: 2662587
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Elevate IR at (720) 330-2829.
The conference call will be broadcast live and available for
replay here and on the investor relations section of the
Company’s website at www.waysidetechnology.com.
About Wayside Technology Group
Wayside Technology Group, Inc. (NASDAQ: WSTG) is a value-added
IT distribution and solutions company specializing in emerging and
disruptive technologies. Wayside operates across the US, Canada and
Europe through multiple business units, including Climb Channel
Solutions, Grey Matter, TechXtend and CloudKnowHow. The Company
provides IT distribution and solutions for emerging companies in
the Security, Data Management, Cloud, Connectivity, Storage &
HCI, Virtualization, and Software & ALM industries.
Additional information can be found by
visiting www.waysidetechnology.com.
Non-GAAP Financial Measures
Wayside Technology uses non-GAAP financial measures, including
adjusted gross billings and adjusted EBITDA, as supplemental
measures of the performance of the Company’s business. Use of these
financial measures has limitations, and you should not consider
them in isolation or use them as substitutes for analysis of
Wayside’s financial results under generally accepted accounting
principles in the United States of America (“U.S. GAAP”). The
attached tables provide a reconciliation of each non-GAAP financial
measure to the most nearly comparable measure under U.S. GAAP.
Forward-Looking Statements
The statements in this release concerning the Company’s future
prospects are forward-looking statements that involve certain risks
and uncertainties. In this press release, forward-looking
statements can be identified by words such as “believes,”
“expects,” “intends,” “anticipates,” “plans,” “estimates,”
“projects,” “forecasts,” “should,” “could,” “would,” “will,”
“confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in
process,” “under construction,” “in development,” “opportunity,”
“target,” “outlook,” “maintain,” “continue,” “goal,” “aim,”
“commit,” or similar expressions, or when we discuss our
priorities, strategy, goals, vision, mission, opportunities,
projections, intentions or expectations. Factors, among others,
that could cause actual results and events to differ materially
from those described in any forward-looking statements include,
without limitation, the continued acceptance of the Company’s
distribution channel by vendors and customers, the timely
availability and acceptance of new products, product mix, market
conditions, contribution of key vendor relationships and support
programs, as well as factors that affect the software industry in
general and other factors. Currently, one of the most significant
factors, however, is the potential adverse effect of the current
pandemic of the novel coronavirus, or COVID-19, on the Company, the
global economy, and financial markets. The extent to which COVID-19
impacts the Company will depend on future developments, which are
highly uncertain and cannot be predicted with confidence, including
the scope, severity and duration of the pandemic, the actions taken
to contain the pandemic or mitigate its impact, and the direct and
indirect economic effects of the pandemic and containment measures,
including the impact on the Company’s reseller partners and the end
customer markets they serve, among others. The forward-looking
statements contained herein are also subject generally to other
risks and uncertainties that are described from time to time in the
Company’s filings with the Securities and Exchange Commission.
Company Contact
Drew ClarkChief Financial Officer(732)
389-0932drew@waysidetechnology.com
Investor Relations Contact
Sean Mansouri, CFAElevate IR(720)
330-2829WSTG@elevate-ir.com
WAYSIDE TECHNOLOGY GROUP, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(Unaudited) |
(Amounts in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
December 31,2021 |
|
December 31,2020 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash equivalents |
$ |
29,272 |
|
|
$ |
29,348 |
|
|
Accounts receivable, net of
allowance for doubtful accounts of $881 and $892, respectively |
|
122,502 |
|
|
|
93,821 |
|
|
Inventory, net |
|
2,022 |
|
|
|
4,936 |
|
|
Vendor prepayments and
advances |
|
661 |
|
|
|
1,235 |
|
|
Prepaid expenses and other
current assets |
|
4,871 |
|
|
|
3,837 |
|
Total current
assets |
|
159,328 |
|
|
|
133,177 |
|
|
|
|
|
|
Equipment and
leasehold improvements, net |
|
1,932 |
|
|
|
2,308 |
|
Goodwill |
|
17,188 |
|
|
|
16,816 |
|
Other intangibles,
net |
|
9,950 |
|
|
|
10,625 |
|
Right-of-use
assets, net |
|
1,628 |
|
|
|
1,933 |
|
Accounts
receivable long-term, net |
|
78 |
|
|
|
304 |
|
Other assets |
|
459 |
|
|
|
257 |
|
Deferred income
tax assets |
|
189 |
|
|
|
113 |
|
|
|
|
|
|
Total assets |
$ |
190,752 |
|
|
$ |
165,533 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable and accrued
expenses |
$ |
134,271 |
|
|
$ |
116,692 |
|
|
Lease liability, current
portion |
|
475 |
|
|
|
490 |
|
Total current
liabilities |
|
134,746 |
|
|
|
117,182 |
|
|
|
|
|
|
|
Lease liability, net of
current portion |
|
1,810 |
|
|
|
2,167 |
|
|
Deferred income tax
liabilities |
|
1,780 |
|
|
|
1,467 |
|
|
|
|
|
|
Total
liabilities |
|
138,336 |
|
|
|
120,816 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
|
|
Common stock, $.01 par value;
10,000,000 shares authorized, 5,284,500 shares |
|
|
|
|
issued, and 4,424,672 and
4,361,997 shares outstanding , respectively |
|
53 |
|
|
|
53 |
|
|
Additional paid-in
capital |
|
32,087 |
|
|
|
31,962 |
|
|
Treasury stock, at cost,
859,828 and 922,503 shares, respectively |
|
(13,870 |
) |
|
|
(14,747 |
) |
|
Retained earnings |
|
34,396 |
|
|
|
28,191 |
|
|
Accumulated other
comprehensive loss |
|
(250 |
) |
|
|
(742 |
) |
Total
stockholders' equity |
|
52,416 |
|
|
|
44,717 |
|
Total liabilities
and stockholders' equity |
$ |
190,752 |
|
|
$ |
165,533 |
|
|
|
|
|
|
WAYSIDE TECHNOLOGY GROUP, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
(Unaudited) |
(Amounts in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Three months ended |
|
|
December 31, |
|
December 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
282,582 |
|
|
$ |
251,568 |
|
$ |
75,508 |
|
|
$ |
71,445 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
236,866 |
|
|
|
218,528 |
|
|
62,933 |
|
|
|
60,920 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
45,716 |
|
|
|
33,040 |
|
|
12,575 |
|
|
|
10,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
32,136 |
|
|
|
23,929 |
|
|
7,823 |
|
|
|
7,066 |
|
Legal and financial
advisory expenses, net - unsolicited bid and related matters |
|
|
- |
|
|
|
1,586 |
|
|
- |
|
|
|
(165 |
) |
Acquisition related
costs |
|
|
- |
|
|
|
1,518 |
|
|
- |
|
|
|
536 |
|
Amortization &
depreciation expense |
|
|
1,529 |
|
|
|
704 |
|
|
353 |
|
|
|
301 |
|
Total selling,
general and administrative expenses |
|
|
33,665 |
|
|
|
27,737 |
|
|
8,176 |
|
|
|
7,738 |
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
12,051 |
|
|
|
5,303 |
|
|
4,399 |
|
|
|
2,787 |
|
|
|
|
|
|
|
|
|
|
Interest, net |
|
|
359 |
|
|
|
121 |
|
|
(3 |
) |
|
|
15 |
|
Foreign currency
transaction (loss) gain |
|
|
(46 |
) |
|
|
796 |
|
|
61 |
|
|
|
590 |
|
Income before
provision for income taxes |
|
|
12,364 |
|
|
|
6,220 |
|
|
4,457 |
|
|
|
3,392 |
|
Provision for income
taxes |
|
|
3,166 |
|
|
|
1,746 |
|
|
1,011 |
|
|
|
865 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
9,198 |
|
|
$ |
4,474 |
|
$ |
3,446 |
|
|
$ |
2,527 |
|
|
|
|
|
|
|
|
|
|
Income per common
share - Basic |
|
$ |
2.09 |
|
|
$ |
1.01 |
|
$ |
0.78 |
|
|
$ |
0.58 |
|
Income per common
share - Diluted |
|
$ |
2.09 |
|
|
$ |
1.01 |
|
$ |
0.78 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - Basic |
|
|
4,272 |
|
|
|
4,288 |
|
|
4,299 |
|
|
|
4,235 |
|
Weighted average
common shares outstanding - Diluted |
|
|
4,272 |
|
|
|
4,288 |
|
|
4,299 |
|
|
|
4,235 |
|
|
|
|
|
|
|
|
|
|
Dividends paid per
common share |
|
$ |
0.68 |
|
|
$ |
0.68 |
|
$ |
0.17 |
|
|
$ |
0.17 |
|
Reconciliation of GAAP and Non-GAAP Financial Measures
(unaudited) |
(Amounts
in thousands, except per share data) |
|
|
|
The table below presents net sales reconciled to
adjusted gross billings (Non-GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Three months ended |
|
Adjusted Gross Billings (Non-GAAP) (1) |
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Net sales |
|
$ |
282,582 |
|
$ |
251,568 |
|
$ |
75,508 |
|
$ |
71,445 |
|
Costs of sales related to sales where the Company is an
agent |
|
|
652,396 |
|
|
477,671 |
|
|
186,554 |
|
|
154,937 |
|
Adjusted gross billings (Non-GAAP) |
|
$ |
934,978 |
|
$ |
729,239 |
|
$ |
262,062 |
|
$ |
226,382 |
(1) We define adjusted gross billings as net sales in accordance
with US GAAP, adjusted for the cost of sales related to sales where
the Company is an agent. We provided a reconciliation of adjusted
gross billings to net sales, which is the most directly comparable
US GAAP measure. We use adjusted gross billings of product and
services as a supplemental measure of our performance to gain
insight into the volume of business generated by our business, and
to analyze the changes to our accounts receivable and accounts
payable. Our use of adjusted gross billings of product and services
as analytical tools has limitations, and you should not consider
them in isolation or as substitutes for analysis of our financial
results as reported under US GAAP. In addition, other companies,
including companies in our industry, might calculate adjusted gross
billings of product and services or similarly titled measures
differently, which may reduce their usefulness as comparative
measures.
|
The table below
presents net income reconciled to adjusted EBITDA (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Three months ended |
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
Net income
reconciled to adjusted EBITDA: |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
9,198 |
|
|
$ |
4,474 |
|
|
$ |
3,446 |
|
|
$ |
2,527 |
|
|
Provision for income taxes |
|
|
3,166 |
|
|
|
1,746 |
|
|
|
1,011 |
|
|
|
865 |
|
|
Depreciation and
amortization |
|
|
1,529 |
|
|
|
704 |
|
|
|
353 |
|
|
|
301 |
|
|
Interest expense |
|
|
68 |
|
|
|
116 |
|
|
|
17 |
|
|
|
57 |
|
EBITDA |
|
|
13,961 |
|
|
|
7,040 |
|
|
|
4,827 |
|
|
|
3,750 |
|
|
Share- based compensation |
|
|
1,546 |
|
|
|
1,278 |
|
|
|
292 |
|
|
|
241 |
|
|
Legal and financial advisory
expenses, net - unsolicited bid and related matters |
|
|
- |
|
|
|
1,586 |
|
|
|
- |
|
|
|
(165 |
) |
|
Acquisition related costs |
|
|
- |
|
|
|
1,518 |
|
|
|
- |
|
|
|
536 |
|
Adjusted
EBITDA |
|
$ |
15,507 |
|
|
$ |
11,422 |
|
|
$ |
5,119 |
|
|
$ |
4,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Three months ended |
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
Components
of interest, net |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Amortization of discount on
accounts receivable with extended payment terms |
|
$ |
(55 |
) |
|
$ |
(164 |
) |
|
$ |
(6 |
) |
|
$ |
(28 |
) |
|
Interest income |
|
|
(372 |
) |
|
|
(73 |
) |
|
|
(8 |
) |
|
|
(44 |
) |
|
Interest expense |
|
|
68 |
|
|
|
116 |
|
|
|
17 |
|
|
|
57 |
|
Interest, net |
|
$ |
(359 |
) |
|
$ |
(121 |
) |
|
$ |
3 |
|
|
$ |
(15 |
) |
(2) We define adjusted EBITDA, as net income, plus provision for
income taxes, depreciation, amortization, share-based compensation,
interest, legal and financial advisory expenses, net – unsolicited
bid and related matters and acquisition related costs. We define
effective margin as adjusted EBITDA as a percentage of gross
profit. We provided a reconciliation of adjusted EBITDA to net
income, which is the most directly comparable US GAAP measure. We
use adjusted EBITDA as a supplemental measure of our performance to
gain insight into our businesses profitability when compared to the
prior year and our competitors. Adjusted EBITDA is also a component
to our financial covenants in our credit facility. Our use of
adjusted EBITDA has limitations, and you should not consider it in
isolation or as a substitute for analysis of our financial results
as reported under US GAAP. In addition, other companies, including
companies in our industry, might calculate adjusted EBITDA, or
similarly titled measures differently, which may reduce their
usefulness as comparative measures.
Wayside Technology (NASDAQ:WSTG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Wayside Technology (NASDAQ:WSTG)
Historical Stock Chart
From Apr 2023 to Apr 2024