Climb Global Solutions, Inc. · NASDAQ:CLMB
Climb Global Solutions — Wayside Technology Group — Investor Presentation (June 2020)
23 slides from Climb Global Solutions's investor presentation, Jun 29, 2020
Slide 1: Wayside Technology Investor Presentation June 2020
Wayside Technology Investor Presentation June 2020 Nasdaq:WSTG
Slide 2: Disclaimers
Disclaimers This presentation is for informational purposes only and is not an offer to sell securities or a solicitation of an offer to buy any securities and may not be relied upon in connection with the purchase or sale of any security. Sales and offers to sell Wayside Technology Group, Inc. secu
Slide 3: Connecting the World with Emerging Technology
3 © 2020 Climb Channel Solutions Connecting the World with Emerging Technology
Slide 4: Who We Are
WHO WE ARE Wayside is an IT distributor focused on emerging technologies through its Climb Channel Solutions business We specialize in cloud based and data center technology software, distributing products to 4,000+ partners across the US New management team with decades of IT distribution experienc
Slide 5: The IT Channel: Multiple Routes to Market for IT Products
THE IT CHANNEL Multiple Routes to Market for IT Products IT Products (Vendors/OEMs) Customers End Users End Users IT Solution Providers, VARs, MSPs IT Products (Vendors/OEMs) End Users IT Solution Providers, VARs, MSPs Distributors IT Products (Vendors/OEMs)
Slide 6: The Problem
THE PROBLEM EMERGING OEM VENDORS VARS AND END USERS Don’t have the resources to effectively manage sales & logistics “How can we get our products to market faster?” “No one knows who we are.” So many options for technology products New entrants come to market every day “What technology makes the mos
Slide 7: A Critical Link in the IT Supply Chain
A Critical Link in the IT Supply Chain THE SOLUTION ONE STOP SHOPPING FOR OUR CUSTOMERS CREATING AN EFFICIENT ROUTE TO MARKET FOR OUR VENDORS VARS MSPS RETAILERS END USERS Healthcare Government SMB Data Center Enterprise
Slide 8: What We Sell and Distribute
WHAT WE SELL AND DISTRIBUTE 500+ VENDOR RELATIONSHIPS SOFTWARE AND APPLICATION LIFECYCLE SECURITY CONNECTIVITY STORAGE AND HCI VIRTUALIZATION AND CLOUD DATA MANAGEMENT
Slide 9: Who We Sell To
WHO WE SELL TO DIRECT MARKET RESELLERS (DMRs) SYSTEM INTEGRATORS, SOLUTION PROVIDERS THOUSANDS OF SMALLER VARS, MSP & CLOUD INTEGRATORS OVER 4,000 TRANSACTING CUSTOMERS
Slide 10: Why We Win
WHY WE WIN We find disruptive technology vendors and partner with them early – enables strong organic growth for years ahead. We are highly focused on our core vendors and can actively pitch their products, in comparison to large distributors that focus on volume of products that sell themselves. 10
Slide 11: Financial Review
Financial Review
Slide 12: Our Return to Double-Digit Growth
OUR RETURN TO DOUBLE-DIGIT GROWTH 2019/2020: Our Investments Are Paying Off New management team joins in 2018 Commits to reinvesting for growth Implements new vendor recruit plan Expands sales and marketing efforts 1) See appendix for reconciliation of this non-GAAP measure. $27.3M $27.1M $26.9M $30
Slide 13: Highly Scalable Operating Model
HIGHLY SCALABLE OPERATING MODEL Investments from 2018 have begun to materialize 45% 2019 Operating leverage drives MEANINGFUL IMPROVEMENTS TO BOTTOM LINE. Every incremental dollar of gross profit now generates ~40-50 CENTS IN Adjusted EBITDA 2017 2018 0% 0% 1) See appendix for reconciliation of this
Slide 14: Asset Light and High ROIC
ASSET LIGHT AND HIGH ROIC ~1% of Gross Profit (2010 - 2019) is equal to Annual Capex LOW CAPITAL REQUIREMENTS ~22% Avg 2015 - 2019 HIGH RETURN ON INVESTED CAPITAL OPTION 1
Slide 15: Wayside's Capital Allocation Top Priorities
Wayside’s Capital Allocation Top Priorities PRUDENT STEWARDS OF CAPITAL CapEx Disciplined CapEx spend Reinvestment in core verticals M&A Interwork Technologies acquisition closed Q2 2020. Continue to seek accretive transactions to expand our portfolio of offerings that meet our stringent ROIC requir
Slide 16: Key Takeaways
KEY TAKEAWAYS 16 © 2020 Climb Channel Solutions Emerging technology distributor filling a critical void in the value chain New management team with proven track record of execution in ~2 years Delivering sustainable double-digit growth on our top and bottom line (GP & AEBITDA) Foundation in place to
Slide 17: Key Stats
KEY STATS1 Stock Price $23.85 $9.52/$25.50 52 WEEK LOW/HIGH 23,939 AVG. DAILY VOL. (3 MO.) 4.2M SHARES OUTSTANDING 77% PUBLIC FLOAT, EST. 54% INSTITUTIONAL HOLDINGS TRADING DATA @ (6/24/20) Enterprise Value $89.1M VALUATION MEASURES @ (6/24/20) Adjusted EBITDA $11.4M FINANCIAL HIGHLIGHTS2 (TTM @ 3/3
Slide 18: Contact
18 CONTACT © 2020 Climb Channel Solutions Investor Relations: Sean Mansouri, CFA or Cody Slach Gateway Investor Relations 1-949-574-3860 WSTG@gatewayir.com Company: Michael Vesey Chief Financial Officer 1-732-389-0932 michael.vesey@waysidetechnology.com
Slide 19: Appendix
Appendix
Slide 20: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS Dale Foster Chief Executive Officer & Director Over 20 years of technology distribution industry experience Former president of Promark Technology, led emerging vendor division after Ingram Micro acquisition in 2012 Michael Vesey Chief Financial Officer More than
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Net Income $ 5,901 $ 5,062 $ 3,538 $ 6,787 $ 6,160 Taxes 3,032 3,491 1,579 2,261 2,053 Depreciation and Amortization 296 477 482 488 449 Interest Expense - 67 37 58 67 EBITDA $ 9,229 $ 9,097 $ 5,636 $ 9,594 $ 8,729 Stock Comp 1,673 1,512 1,108 759 761 Legal and financi
Slide 22: Return on Invested Capital Reconciliation
Return on Invested CapitaL Reconciliation Stockholders' equity 38,659 37,611 38,712 40,573 45,256 Less: cash (23,823) (13,524) (5,530) (14,883) (14,984) Invested Capital 14,836 24,087 33,182 25,690 30,272 Average Invested Capital 19,462 28,635 29,436 27,981 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 We
Slide 23: Marginal Profitability Reconciliation
Marginal Profitability Reconciliation Adjusted EBITDA $ 10,609 $ 9,190 $ 10,573 Gross Profit $ 27,076 $26,920 $ 29,967 Change in Adjusted EBITDA (293) (1,419) 1,383 Change in Gross Profit (255) (156) 3,047 Marginal Profitability 45% YE 2017 YE 2018 YE 2019 We define marginal profitability as the cha
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