Q1 2022 Wayside Technology Group Inc Earnings Call
Speaker 1: Good morning everyone and thank you for participating in today's conference call to discuss Wayside technology group's financial results for the first quarter and in March thirty-first 2020 -two.
Operator: Good morning, everyone, and thank you for participating in today's conference call to discuss Wayside Technology Group`s financial results for the first quarter ended March 31st, 2022. Joining us today: our Wayside CEO , Mr. Dale Richard Foster, the company`s CFO, Mr. Drew Clark, and the company's Investor Relations Advisor, 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 management remarks, we will open the call for questions. I would now like to turn the call over to Mr. Mansouri for introductory comments.
Speaker 2: Joining us today: our Wayside CEO , MR Dale foster, the company CFO , MR Drew Clarke, and the company's Investor Relations Advisor, MR Sean manurri, with elevate irby now, everyone should have access to the first quarter 2022 earnings press release, which was issued yesterday afternoon at approximately 405 PM Eastern.
Speaker 2: Time the releasees available in the Investor Relations section of wasside technology groups we website at wasside technology Dot com. This call will also be available for webcast replay on the company's website. Following management remarks, we will open the call for questions.
Speaker 2: I would now like to turn the call over to MR renensorri for introductory comments.
Speaker 3: 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 one thousand nine hundred and ninety-five.
Speaker 2: I would now like to turn the call over to MR renensri for introductory commentsthank 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.
Operator: 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.
Speaker 4: 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.
Speaker 4: 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.
Sean Mansouri: 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.
Speaker 5: 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.
Sean Mansouri: 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.
Speaker 6: Our presentation also includes certain non-GAAP financial measures, including adjusted gross billings and adjusted EBITDA, as supplemental measures and performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules.
Sean Mansouri: 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.
Speaker 5: You will find reconciliation charts and other important information in the earnings press release and Form 8-K we furnished to the SEC yesterday.
Sean Mansouri: You will find reconciliation charts and other important information in the earnings press release and Form 8-K we furnished to the SEC yesterday.
Speaker 5: I would now like to turn the call over to Wayside CEO dealefouster.
Speaker 7: Thank you ching, and good morning and everyone.
Sean Mansouri: I would now like to turn the call over to Wayside`s CEO, Dale Richard Foster.
Speaker 8: 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 cent 79% and our adjusted EBITDA was up over 60%, reflecting the inherent operating leverage in our business.
Dale Richard Foster: Thank you Sean, and good morning, everyone.
Dale Richard Foster: 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.
Speaker 8: These significant improvements are a testament to the execution of our core initiatives.
Speaker 8: More specifically, we are continuing to generate organic growth with our existing vendors and customers, while adding new and disruptive vendors to our line card.
Dale Richard Foster: These significant improvements are a testament to the execution of our core initiatives. More specifically, we are continuing to generate organic growth with our existing vendors and customers, while adding new and disruptive vendors to our line card.
Speaker 8: This organic growth is most evident in our top 20 vendors, as we grew gross billings with this group by nearly 20% during the quarter to 100 and sevent-one million. This reflects the strength of our relationships with our most meaningful partners. In showcases both the value we are offering as well as the ability to evaluate and partner with the right companies that are bring innovative products to the market.
Dale Richard Foster: This organic growth is most evident in our top 20 vendors, as we grew gross billings 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 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.
Speaker 8: We have seen a significant increase in the share number brands looking at partner with timeli this past quarter. While we remain committed to a purposely limited line card, we did enter into a relatively high number of new partnership agreements. In Q1, line evaluated over 50 new prospective brands and signed eight new agreementsone of the most notable partnerships we signed in Q1 was a partnership with cato networks.
Dale Richard Foster: We have seen a significant increase in the share number of brands looking at partner with Climb this past quarter. While we remain committed to a purposely limited line card, we did enter into a relatively high number of new partnership agreements in Q1. Climb evaluated over 50 new prospective brands and signed eight new agreements. One of the most notable partnerships we signed in Q1 was a partnership with CATO networks.
Speaker 8: cato networks is a network security company that develop secure access service-edge technology, which combines enterprise communication and security capabilities into a single cloud-based platform.
Dale Richard Foster: CATO networks is a network security company that develops secure access service-edge technology, which combines enterprise communication and security capabilities into a single cloud-based platform.
Speaker 8: While cato networks was relatively new company established in 2015, they pionered the convergence of networking and security into the cloud and have created a highly differentiated offering that we know will be well received by our bar and MSP partners.
Dale Richard Foster: While CATO networks is a relatively new company, established in 2015, they pioneered the convergence of networking and security into the cloud, and have created a highly differentiated offering that we know will be well received by our BAR and MSP partners.
Speaker 8: On the topic of the right partner, I'd like to highlight our sponsorship of the world record breaking Mountaineer NIMs persia to our clims subsidiary. Not only has NIMs climbed all 14 of the world's death zone peaks over 8000 meters in just six month is six days. He was part of the first winter cent of the Savage mountain K two his film 14 peaks, nothing is impossible is now out on Netflix and he is the founder of the charitable NIMs Dye foundation. Nims and bodies the characteristics that we hold true here at Wayside: that our employees, our partners and our customers cannot only achieve their goals, but they can push themselves to the next level of success. We thank NIMs for leading by example, reminding us to perform at our very highest level, ensuring the success and elevation of our partners. We CAn't wait for NIMs to carry our flight to the top of the Ali peak.
Dale Richard Foster: On the topic of the right partner, I'd like to highlight our sponsorship of the world record breaking mountaineer, Nims Purja, to our Climb subsidiary. Not only has Nims climbed all 14 of the world's death zone peaks over 8000 meters in just six month and six days, he was part of the first winter ascent of the Savage Mountain K2. His film "14 Peaks: Nothing is impossible" is now out on Netflix and he is the founder of the charitable Nimsday foundation. Nims embodies the characteristics that we hold true here at Wayside that our employees, our partners and our customers cannot only achieve their goals, but they can push themselves to the next level of success. We thank Nims for leading by example, reminding us to perform at our very highest level, ensuring the success and elevation of our partners. We can't wait for Nims to carry our flag to the top of Denali`s peak. Subsequent to the quarter end, we kicked off a collaboration project with Seagate technology, who is a world leader in mass data storage infrastructure solutions, to expand it`s data protection and storage portfolio to the channel community through Seagate`s live mobile application.
Speaker 7: Subsequent to the quarter end, we kicked off a collaboration project with cate technology, who is a world leader in mass data storage infrastructure solutions, to expand its data protection and storage portfolio to the channel community through C live mobile application.
Speaker 8: With simple deployment, next to limitless data capture and low-cost infrastructure investment, this combination will provide the channel community with a service-ready solution to enable the next-generation of data movement, mobility and migration practices to the market.
Speaker 8: Testing on our MA initiatives. We are continuing to evaluate opportunities in both the? U's and abroad that will be accretive to our business and align with our strategic goals. We earn in the discussions with multiple targets that can enhance specific categories of our business, including our geographic reach, vendor expansion and service and solution offerings. Each potential target Ks into one or more of these predefined buckets. With our strong and growing balance sheet, we have abundant room and financing capacity to execute on various forms and sizes of acquisitions in 2022. with that I will turn the call over to Drew Clark, our CFO Drew.
Speaker 9: Thank you Dale, and good morning everyone. As we review our financial results, I want to remind everyone that all of our comparisons and variance commentary refer to the prior year quarter, unless otherwise specified.
Speaker 10: Well some might consider our first quarter of 2022 as a bit bororing, because it was a continuation of our team successfully executing on our business strategy, as reorted in our earnings press release.
Drew Clark: Thank you, Dale, and good morning, everyone. As we review our financial results, I would remind everyone that all of our comparison and variance commentary refer to the prior year quarter, unless otherwise specified.
Drew Clark: Well, some might consider our first quarter of 2022 as a bit boring, because it was a continuation of our team successfully executing on our business strategy.
Speaker 11: Adjusted gross billings, which we all realize as a non-GAAP measure, increased 13% to 238.7 million, compared to 210.9 million in a year ago quarter.
Drew Clark: As reported in our earnings press release, adjusted gross billings, which we all realize is a non-GAAP measure, increased 13% to 238.7 million, compared to 210.9 million in a year ago quarter.
Speaker 3: Adjusted gross billings, which we all realize as a non-GAAP measure, increased 13% to 238.7 million, compared to 210.9 million in a year ago quarter.
Speaker 11: This increase reflects continued organic growth from new and existing vendors. In addition, net sales in the first quarter of 2022 increased 13% to 71.3 million, compared to 62.8 million in the prior year quarter.
Drew Clark: This increase reflects continued organic growth from new and existing vendors. In addition, net sales in the first quarter of 2022 increased 13% to 71.3 million, compared to 62.8 million in the prior year quarter.
Speaker 10: Gross profit in the first quarter of 2022 increased 11% - the 12 million compared to 10.8 million for the three months ended March. thirty-first 2021. again, as Dale mentioned earlier, the increasase in GP was driven primarily by organic growth from our top 20 vendors in both the U's and Canada, in addition to the onboarding of new vendors.
Drew Clark: Gross profit in the first quarter of 2022 increased 11% to 12 million, compared to 10.8 million for the three months ended March 31st, 2021.
Drew Clark: Again, as Dale mentioned earlier, the increase in GP was driven primarily by organic growth from our top 20 vendors in both the US and Canada, in addition to the onboarding of new vendors.
Speaker 12: Our gross profit as a percentage of justed gross billings was fivethree percent versus 5%, which represented 17% of that sales compared to 17% in the prior year quarter.
Drew Clark: Our gross profit as a percentage of adjusted gross billings was 5% versus 5.1%, which represented 17% of debt sales compared to 17.3% in the prior year quarter.
Speaker 10: Q1 of 2021 included a large sale in our solutions business that had a significant impact on our GP and was unusual in nature. Excluding that transaction, GP as a percentage of both aggb and net sales increased quarter-over-quarter.
Drew Clark: Q1 of 2021 included a large sale in our solutions business that had a significant impact on our GP and was unusual in nature. Excluding that transaction, GP as a percentage of both AGB and net sales increased quarter-over-quarter.
Speaker 10: Sgna expenses in the first quarter were eight point six million compared to eight point eight million.
Speaker 10: sdna as a percentage of adjusted gross billings, improved to 4% compared to 4%, as we continue to emphasize lean operations and scale our infrastructure.
Drew Clark: SG&A expenses in the first quarter were 8.6 million compared to 8.8 million.
Drew Clark: SG&A, as a percentage of adjusted gross billings, improved to 3.6% compared to 4.2%, as we continue to emphasize lean operations and scale our infrastructure.
Speaker 10: Net income in the first quarter of 2022 increased 79% to two point seven million, or 61 cents per diluted share, compared to one point five million, or 35 cents per diluted share, for the comparable period in 2021.
Drew Clark: Net income in the first quarter of 2022 increased 79% to 2.7 million, or 61 cents per diluted share, compared to 1.5 million, or 35 cents per diluted share, for the comparable period in 2021.
Speaker 4: Adjusted EBITDA in the first quarter increased 61% to four point two million, compared to two point six million. Once again, this significant increase was entirely driven by organic growth from both new and existing vendors, demonstrating our ability to leverage, scale and deliver a higher percentage of our incremental gross profit to net income and adjusted EBITDA.
Drew Clark: Adjusted EBITDA in the first quarter increased 61% to 4.2 million, compared to 2.6 million. Once again, this significant increase was entirely driven by organic growth from both new and existing vendors, demonstrating our ability to leverage, scale and deliver a higher percentage of our incremental gross profit to net income and adjusted EBITDA.
Speaker 13: Quickly Turning to our balance sheet, cash and cash equivalents increased to 37 million as of March thirty-first twent thousand and 22, compared to 29.3 million as of December . thirty-first twentthousand and 21, while working capital increased by two point two million during this first quarter period. The growth was primarily tributable to the timing of our collection and payment activities and not indicative of any type of business trend at this point.
Drew Clark: Quickly turning to our balance sheet, cash and cash equivalents increased to 37 million as of March 31st, 2022, compared to 29.3 million as of December 31st, 2021, while working capital increased by 2.2 million during this first quarter period. The growth was primarily attributable to the timing of our collection and payment activities and not indicative of any type of business trend at this point.
Speaker 11: We continue to rate debt free as of March thirty-first twent thousand and 22, with no borrowings outstanding under either our $2 million or eight million ster on credit facilities.
Drew Clark: We continue to rate debt-free as of March 31st, 2022, with no borrowings outstanding under either our $2 million or 8 million Sterling credit facilities.
Speaker 4: On the third, twentthousand and 22, our Board of Directors declared a quarterly dividend of 17 cents per share of common stock. The dividend is payable on May twentieth to shareholders of record as of may sixteenth and.
Drew Clark: On May 3rd, 2022, our Board of Directors declared a quarterly dividend of 17 cents per share of common stock. The dividend is payable on May 20th to shareholders of record as of May 16th.
Speaker 11: As we look ahead to the remainder of the year. Our strong foundation continues to allow us to drive organic growth and meaningful operating leverage, all while expanding our relationships with new vendor networks and customers across the glohomebe.
Drew Clark: As we look ahead to the remainder of the year, our strong foundation continues to allow us to drive organic growth and meaningful operating leverage, all while expanding our relationships with new vendor networks and customers across the globe.
Speaker 10: As Dale mentioned previously, we also remain diligent in our MMA strategy, as we constantly evaluate targets that can enhance our geographic footprint, in addition to our service and solution offerings.
Drew Clark: As Dale mentioned previously, we also remain diligent in our M&A strategy, as we constantly evaluate targets that can enhance our geographic footprint, in addition to our service and solution offerings.
Speaker 10: We look forward to delivering yet another year of strong organic and inorganic growth to our customers, partners and shareholders alike.
Drew Clark: We look forward to delivering yet another year of strong organic and inorganic growth to our customers, partners and shareholders alike.
Speaker 4: This now concludes our prepared remarks and we'll open it up for questions from those participating in the call operator. I will turn the meeting back over to you, Thank you.
Drew Clark: This now concludes our prepared remarks and we'll open it up for questions from those participating in the call. Operator, I will turn the meeting back over to you. Thank you.
Speaker 14: Thank you.
Speaker 2: We will now begin the question-and-answer section.
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Operator: Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request.
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Operator: If you are using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue.
Speaker 2: We will pause for a moment as cols join the queue.
Speaker 15: Our first question comes from Bob sales of LMK capital management. Please go ahead.
Operator: Our first question comes from Bob Sales of LMK Capital Management. Please, go ahead.
Speaker 15: Got Hi. Good morning. Congratulations on. The quarter was.
Speaker 16: Excellent and the progress with.
Bob Sales: Hi. Good morning, Congratulations on the quarter, it was excellent. And the progress with agreements in the M&A front. I did have a bookkeeping question. When you think about your receivables, and I'm going to ask this simply because it would jump out potentially to an analyst in terms of just pure DSOs. How do you think about your receivables relative to gross billings, revenue and then the offset payables, so we can think better about your management of that particular figure?
Speaker 16: Agreements in the MA front. I did have a bookkeeping question when you think about your receivables, and I'm going to ask us simply because it it would jump out potentially to an Analyst in terms of just pure DSOs.
Bob Sales: in the M&A front. I didn't have a bookkeeping question. When you think about your receivables- and I'm going to ask us simply because it would jump out potentially to an analyst in terms of just pure DSOs.
Speaker 17: How do you think about your receivables relative togross billings revenue and then the offset payles?
Speaker 7: How do you think about your receivables relative to gross billings revenue and then the offset payables, So we can think better about your management of that particular figure?
Speaker 16: So we can think better about your management of that particular figure.
Speaker 15: J venture yes Bob Thank thanks for participating and thanks for the question. Our receivable portfolio tends to turn fairly quickly. Most of our customers are on a net 30 billing and payment cycle. We do have agings that we will get into the 45 and 60 day bucket from time to time based on the cyclicality of some of the treasury management functions of of our customers. Especially the larger dmmars but.
Drew Clark: Yeah, Bob. Thanks for participating and thanks for the question. Our receivable portfolio tends to turn fairly quickly. Most of our customers are on a net 30 billing and payment cycle. We do have agings that we will get into the 45 and 60 day bucket from time to time, based on the cyclicality of some of the treasury management functions of our customers, especially the larger DMRs.
Speaker 18: Give at the end of the day our DSOs are probably sub 45 on the payable side. We we normally have opportunities where we can garner rebates or early payment discounts but our vendors. So we will take advantage of those and there may be a site mismatch between receipt cycle and the payment cycle on the vendor side but normally fairly closely aligned on any particular month or quarter end. I think the number of our large customers probably participated in a little bit of window daddressing at the end of the year end. So we did have another elongation if you will some of those payment cycles but normally fairly consistent month to month quarter quarter and.
Drew Clark: At the end of the day, our DSOs are probably sub 45 on the payable side. We normally have opportunities where we can garner rebates or early payment discounts with our vendors. So we will take advantage of those and there may be a slight mismatch between receipt cycle and the payment cycle on the vendor side but normally, fairly closely aligned on any particular month or quarter end. I think the number of our large customers probably participated in a little bit of window dressing at the end of the year end. So, we did have another elongation, if you will, of some of those payment cycles but normally, fairly consistent month-to-month, quarter-to-quarter.
Speaker 7: The cash flow is, as you know, very strong in any particular quarter.
Speaker 7: Don't don't see any reason that those cycles will change dramatically in any particular direction. Is, if you sort of try and model a little bit of the cash flow, working capital requirements, the business. We do have that excess cash and we are diligently looking to deploy that into some acquisition activity that hopefully we can be sharing with with the market in the not too distant future. But nothing decended at this point So I'll turn it back to you about follow- question. It been.
Drew Clark: The cash flow is, as you know, very strong in any particular quarter. Don't see any reason the cycles will change dramatically in any particular direction, if you sort of try model a little bit of the cash flow, working capital requirements of the business, we do have that excess cash and we are diligently looking to deploy that into some acquisition activity that hopefully we can be sharing with the market in the not too distant future. But nothing definitive at this point. So I'll turn it back to you about any follow up question.
Speaker 18: Quick on the vendor side, I think we look at the contracts that we have with each one of the vendors and we saw those. But because of our relationships are so tight with these emerging vendors and getting to market that they are very flexible with their terms. There's contracts and then there's the terms per opportunity, So we're in lockstep with them as far as our receivables go and if there's extended terms, if we pass them on. But yet it's important to us. It's each week as our executive team we meet, it's talk about receivables because it's a big part of the company.
Dale Richard Foster: Real quick. On the vendor side, I think we look at the contracts that we have with each one of the vendors and we file those, because our relationships are so tight with these emerging vendors and getting to market that they are very flexible with their terms. There's contracts and then there's the terms per opportunity, so we're in lockstep with them as far as our receivables go and if there's extended terms, if we pass them on. But yet, it's important to us. It's each week as our executive team we meet to talk about receivables because it`s a big part of the company.
Speaker 19: Yes and I only ask the question. I mean, your receivables were down sequentially great and also gross billings versus GAAP revenues sort of distored the absolute metric. And i- I ask it just to you're doing such a sensational job financially. I don't want to give you the ability to.
Bob Sales: Yeah, and, I only asked the question. I mean, your receivables were down sequentially, great. And also, you know, gross billings versus gap revenues sort of distorts the absolute metric. And I ask it to just... You're doing such a sensational job financially. I want to give you the ability to, in this conference call, to sort of explain some perspective so someone can pick that down the road, because your cash flow looks great, right? The second thing I wanted to ask about was: What are your thoughts on the eight new agreements and looked at 50? Is it more of a conscientious expansion of the number of names that you want to deal with at this point, or is it sort of casting a wider net to understand, over the course of time, those vendors that will become additional strong top 20 players?
Speaker 16: In this conference call this sort of.
Speaker 16: Explains some perspectives. So if someone CAn't nit pick that down the road because your cash flow looks great, right?
Speaker 7: In this conference call to sort of explain some perspective So someone CAn't nit pick that down the road because your cash flow looks great rightthe second thing I wanted to ask about was: I'm sorry, did you want to respond to that? I just just.
Speaker 15: yesthe second thing I wanted to ask about was: I'm sorry, did you want to respond to that justance?
Speaker 20: No yeah, I thought I agree with younthat.
Speaker 15: Okay help me out. What are your thoughts on the eight new agreements? And looked at 50, are you? Is it more of the?
Speaker 4: reeay, how me out. What are your thoughts on the the eight new agreements and looked at 50, are you, is it more of the?
Speaker 21: You know.
Speaker 16: A conscientious expansion of the number of names that you want to be with at this point, or is it sort of casting a wider net to understand, over the course of time, those vendors that will become additional strong top 20 players?
Speaker 7: A conscientious expansion of the number of names that you want to deal with at this point, or is it sort of casting a wider net to understand, over the course of time, those vendors that will become additional strong top 20 players?
Speaker 18: Yes it's for this past court. It's really a bit about timing. You know, some of the new vors hitting us that that may od of time and that we've looking, been pretty deeply and we take our time betting them. We just happened to be a timing thing where we were looking and seeing quite if few them come at us, wevegota a couple more in the pipe that are Ed. We wouldn't if you've been entertain them as we're trying to onboard these eight is it wasn't, you know, important to know the management and also the sales teams. We get pretty much everybody involved. When we look at the new vendors say Hey, this fit, is this right in our portfolio, where the fidges who our six segments of you know technology and then we sign from there. You know,'d like to think- and we haven't been able to verify- I'd like to think that just becausewe're coming more prevalent to the marketplace and a little disruptive to our competitors, that we're getting seen by more vendors and emerging what's coming at us instead of both going after them. So a little bet that out over the next you know year and probably a continuue process.
Dale Richard Foster: For this past quarter it's really a bit about timing. You know, some of the new vendors hitting us that they missed the period of time and we look at them pretty deeply. We take our time vetting them. Just happened to be a timing thing where we were looking and seeing quite a few that came at us. We've got a couple more in the pipe that are signed, and we wouldn't, even if we entertain them as we're trying to onboard these eight, if it wasn't, you know, important to know the management and also the sales teams. We get pretty much everybody involved when we look at the new vendors say "Is this a fit, is this right in our portfolio, where are the [inaudible] or six segments of technology?" and then we sign from there. I`d like to think, and we haven't been able to verify, that just because we're becoming more prevalent in the marketplace and a little disruptive to our competitors, that we're getting seen by more vendors and emerging what's coming at us, instead of us going after them. So a little bet that out over the next you know year and probably a continue process.
Speaker 18: Okay and I'm going to keep going I got a feeling there might be not many colors since I was just first one with you but.
Bob Sales: Okay. I'm going to keep going, if there may be not many callers, since I was the first one with you. But, on M&A front, should we expect sort of the continued nature of the size and, you sort of mentioned the complementary aspects of it, but should we expect, sort of, the same size of ongoing acquisitions or do you think that you'll be looking at anything that will scale up bigger?
Speaker 22: On'm M a front.
Speaker 16: Should we expect sort of the continued?
Speaker 16: Nature of the size and you sort of mention the complementary aspects of it. But should we should expect sort of the same.
Speaker 23: Same size of ongoing acquisitions or the.
Speaker 24: Think that you'll be looking at anything that will scale up bigger.
Speaker 7: Same size of ongoing acquisitions or the. Think that you'll be looking at anything that will scale up bigger.
Speaker 18: Well I can tell you without disclosing too much that we've looked at very sizable transformative to the company. We still have some of the wings that'are very small and then.
Speaker 11: Think that you'll be looking at anything that will scale up bigger.
Dale Richard Foster: Well I can tell you, without disclosing too much, that we've looked at very sizable transformative to the company. We still have some of the wings. They're very small.
Speaker 7: I can' CAn't take too much, But as far as the size range from very small tuck-in to transformative in certain regions, as as they talked about, what are, three strategies are as far as acquisitions go and then some that are just by the actual vendors that they hold. That would help.
Dale Richard Foster: I can't say too much, but as far as the size range from very small tuck-in to transformative in certain regions, as we talked about what our three strategies are as far as acquisitions go. And then, some that are just by the actual vendors that they hold, that would help take that vendor across all of our different regions, and that's one of the things that we know we did was Interwork when we acquired them, and they had trend micro, where we haven't done a great job at getting them into the UK, or in the UK and then the US is as much as we would like. So see that throughout the rest of this year, you'll start seeing, just through the press release, that some of those vendors creep into other regions. We feel like we're successful in one region. Why can't we be in the other? So, it`s a frustration that we have the will focus on the remainder of this year as well.
Speaker 20: Take that vendor across all of our different regions and that's one of the things that we did was innertically acquiire them, and they had trend micro. We haven't done a great job at getting them into the U K where the U K in the U's, as much as we would like. So see that throughout the rest of this year. You'll start seeing, just through the press release, as some of those vendors creeped into other regions. We feel like we're successful in one reasonion: why CAn't we be in the other's a frustration that we have to will focus on the remainder of the yearre as well.
Dale Richard Foster: take that vendor across all of our different regions, and that's one of the things that we know we did was Interwork when we acquired them, and they had trend micro, where we haven't done a great job at getting them into the UK, or in the UK and then the US is as much as we would like. So see that throughout the rest of this year, you'll start seeing, just through the press release, that some of those vendors creep into other regions. We feel like we're successful in one region. Why can't we be in the other? So, it`s a frustration that we have the will focus on the remainder of this year as well.
Speaker 24: Okay in aylast question: what are you seeing with the?
Speaker 24: Some of the challenges in Europe that we're hearing about, some of the supply chain issues and, I guess at this point, just the nervousness of the financial markets. Are you seeing? Are you seeing?
Speaker 25: Any signs? Know that that buyers are getting a little bit?
Speaker 16: Slower in making decisions or more cautious in spending.
Bob Sales: Okay, and the last question. What are you seeing with some of the challenges in Europe that we're hearing about, some of the supply chain issues and, I guess, at this point, just the nervousness of the financial markets? Are you seeing any signs So that that buyers are getting a little bit slower in making decisions or more cautious in spending? So the two things those on a call yesterday with the super micro- you know a super micro, a hardware supplier, they like a TI to for anybody that wants to buy servers that are engaged P B M or Lenovo, and you know that's the issue the hardarepiece were 80% of are. As far as our portfolio, the only thing that slows down with us would be if there's a big implementation going on that has hardware that goes with it. You know oursoftare they make you know todelay the buying cycle until they get everything ready to go and ship. Other than that, you know we are in the two hoter spaces. Right, we are in security, which everybody needs and everybody claim that they have asecurity product. I don't care for yourdata torage. You still say the geo security to watch the MA. Sure you not acking a brandomsomeware. So that's the hotspo T and then the other data center. When I think data center.
Bob Sales: Okay, and the last question. What are you seeing with some of the challenges in Europe that we're hearing about, some of the supply chain issues and, I guess, at this point, just the nervousness of the financial markets? Are you seeing any signs So that that buyers are getting a little bit slower in making decisions or more cautious in spending?
Bob Sales: and the last question. What are you seeing with some of the challenges in Europe that we're hearing about, some of the supply chain issues and, I guess, at this point, just the nervousness of the financial markets? Are you seeing any signs So that that buyers are getting a little bit slower in making decisions or more cautious in spending? So the two things those on a call yesterday with the super micro- you know a super micro, a hardware supplier, they like a TI to for anybody that wants to buy servers that are engaged P B M or Lenovo, and you know that's the issue the hardarepiece were 80% of are. As far as our portfolio, the only thing that slows down with us would be if there's a big implementation going on that has hardware that goes with it. You know oursoftare they make you know todelay the buying cycle until they get everything ready to go and ship. Other than that, you know we are in the two hoter spaces. Right, we are in security, which everybody needs and everybody claim that they have asecurity product. I don't care for yourdata torage. You still say the geo security to watch the MA. Sure you not acking a brandomsomeware. So that's the hotspo T and then the other data center. When I think data center.
Bob Sales: and the last question. What are you seeing with some of the challenges in Europe that we're hearing about, some of the supply chain issues and, I guess, at this point, just the nervousness of the financial markets? Are you seeing any signs So that that buyers are getting a little bit slower in making decisions or more cautious in spending?
Speaker 26: So two thing: those in a call yesterday with the super micro, you know a super markers the hardware supplier. They're like a Tier to for anybody that wants to buy servers that are engaged Hi B, M or Lenovo, and you know that's the issue. The hardare piece were 80% software. As far as our portfolio, the only thing that slows down with a would be that there's a big implementation going on that has hardware. It goes with it. You know oursoftarethey make know delay the buying cycle until they get everything ready to go and ship. Other than that, you know we are in the two hoter spaces. Right, we are in security, which everybody needs, and everybody claim the have asecurity product. I don't care for yourdata torage, still say the geo security to watch the MA, sure not acking a andsomeware. So that's the hotspot. And then then the data center. When I think data center people are migrating right, whether the migrated to the cloud using a hybrid cloud set up or they're trying to, you know do reress back off the cloud because of you know some of the workloads didn't work well, all enough in the cloud. So we're re the two good spaces. We haven't seen that know. Concern with the interest rates in the market filling down in some spaces we're going to watch are recevables and IL we give credit to even more closely where it used to this cyclical nature. You know the last, you know 20, some years of our careers.
Dale Richard Foster: So there`s two things, that were on a call yesterday with the Supermicro, Supermicro is a hardware supplier, they`re like a tier 2 for anybody that wants to buy servers that are HP, IVM or Lenovo, and you know that's the issue with the hardware piece. We`re 80% software, as far as our portfolio. The only thing that slows down with us would be if there's a big implementation going on that has hardware that goes with it. You know, our software, they might delay the buying cycle until they get everything ready to go and ship. Other than that, we are in the two hotter spaces, right, we are in security, which everybody needs and everybody claims that they have a security product. I don't care if you have data storage, you still say that you want security to watch to make sure you`re not backing a ransomware. So that's the hotspot. And then, the other one is data center. When I think data center , people are migrating right, whether they`re migrating to the cloud, they`re using a hybrid cloud set up, or they`re trying to, you know, to regress back off the cloud because of, you know, some of the workload didn`t work. We're well enough in the cloud. So, we`re in the two good spaces. We haven't seen that concern with the interest rates in the market selling down in some spaces. We're going to watch our receivables and who we give credit to even more closely. We`re used to this cyclical nature over the last, you know, 20 some years of our careers.
Bob Sales: Okay, thanks. Congratulations. our. Next question comes from Howard broute, a private Investor. Please go ahead.
Bob Sales: Okay, thanks. And, congratulations. I`ll now pass the turn.
Operator: Our next question comes from Howard Wroot, a private investor. Please, go ahead.
Speaker 27: Got it okay, thanks. Congratulation is not passed the time.
Speaker 18: ty.
Speaker 28: Our next question comes from Howard rooute, a private Investor. Please go ahead.
Speaker 18: Thanks guys, Congratulations on another great quarter. I've got two questions, one for Drew and then once for Dale. For Drew, you know I do everything based on adjusted gross billings, which I think you guys do to, because the determination whether it's a sale or not it just an accounting division. Then based on that you know I look at the gross profit and a and the gross profit you know thinks for the comment on what happened there you know from last year being a little aberration as a high. But Q4 to q,1 I think went from around four point eight percent to 5% sequentially. Do you see that kind of being? You know that 5% gross profprofit based on adjusted gross Ross billings is being kind of your new normal, is it? Is it going to creep up from that? And then on the's D N a side to you know it, the decrease of two under grand from last year to this year surprised me. You know great job on that on. You always have a great on on cost management. But do you see that? You know eight point six million. You see that going up. But what do you see in trends in the's a linened and on the gross profit line?
Howards Wroot: Thanks guys, and congratulations on another great quarter. I've got two questions, one for Drew and then one for Dale. For Drew, you know I do everything based on adjusted gross billings, which I think you guys do too, because the determination, whether it's a sale or not just an accounting division, and then, based on that, I look at the gross profit, and then the SG&A and the gross profit, thanks for the comment on what happened there. You know, from last year being a little aberration as a high, but Q4 to Q1, I think went from around 4.8% to 5% sequentially. Do you see that kind of being, that 5% gross profit based on adjusted gross billings is being kind of your new normal? Is it going to creep up from that? And then on SG&A side, the decrease of 2 under grand from last year to this year surprised me. Great job on that. You always have a great on cost management.
Multiple speakers: [Howard Wroot] But do you see that 8.6 million, you see that going up? What do you see in trends, on the SG&A line and on the gross profit line? [Drew Clark] Thanks Howard, and good questions. On the gross profit line, you know, if I were to provide sort of directional guidance, if you will, I would say that that's a steady state for us and we can move the needle slightly, as Dale referenced, when we bring on new vendors, they tend to build over a period of time. They may have a more attractive economic value to us in terms of the contract that we negotiate and how we deliver and go to market on their behalf. So I would say, that 5% is a pretty good number. Our solution business, as that continues to grow with our Microsoft CSP relationship that we can incrementally move that, you know, in the correct, ascending direction. I don't know how much stronger we can get above 5%, to be honest.
Speaker 7: yesso thanks Howard and good questions on the on the gross profit line you know if I were to provide sort of directional guidance. If you will I would say that that a steady state for us and we can move the needle slightly as Dale reference. When we bring on new vendors. They tend to you know build over a period of time. They may have a more attracttive economic value to us in terms of the the contract that we negotiate and how we deliver and go to market on their behalf. So I would say you know that 5% is is a pretty good number. Our solution business is that continues to grow with our Microsoft C's P relationship that we can incrementally move that you know in the correct sending direction. Andi don't know how much stronger we can get above 5% to be Hon in the next year. But that's something we think about every day and work on with our Fender relationshipps and you know how do we manage early pay discounts and rebates and all the things that go along with both on our customer side and our vendor side. So again kind of directionly I'd say that's a good trend for us and we expect to kind of maintain that at least to the balance of this year on the's G N a side you knowto dales credit in the sales andmarke teams credit. Last year we really evaluated how do we compensate our sales folks and we wanted to make sure that we are incentivizing them properly but also ensuring that we can create on the rate metrics to drive the business. So dales created know a really good infrastructure and organization with our sales teams that enable us to further leverage around E ither brand sales specialists and products or territories. So we're getting more efficient and therefore you know able to drive more adjust gross billings with about the same type of headcount. So I think we'll continue to see's G a prove incrementally the not not significantly that that will continue to improve as well as we move forward into the balance of 2020 two.
Drew Clark: In the next year. But that's something we think about every day and work on with our vendor relationships and how do we manage early pay discounts and rebates and all the things that go along with it, both on our customer side and our vendor side. So again, kind of directional, I'd say that's a good trend for us. We expect to kind of maintain that at least to the balance of this year. On the SG&A side, to Dale`s credit, the sales marketing teams credit, last year we really evaluated how do we compensate our sales folks and we wanted to make sure that we are incentivizing them properly, but also ensuring that we can create the right metrics to drive the business. So, Dale`s created a really good infrastructure and organization with our sales teams that enable us to further leverage around either brand sales specialists and products or territories. So, we're getting more efficient and therefore, able to drive more adjusted gross billings.
Speaker 29: Yeah if you have any, get off to comment. Let me come to real quick things. Thank you knowhowon that margin, we talked about a lot more gin business as far as us doing margin expansion where we can do that. So when we look to expand margmargins, we have to give more value, right with that value, as you certain paid a certain amount of gmargin just to do take back and ship. And then what do you do on top of that? You knowwhat do you bring it to the marketplace. So you know how we've talked about before. You know doing solutions, much more service and technical things. The issue is, you know it's, it's important to us's internally. You knowhow can we scal that totherest of the business and that's the job that we need to do. You know howas we sign vendors, can we do more for them to garner higher MAR margin? So 'swhat we look at constantly. We do have some some things in the work, that work that will announce over the next six month.
Drew Clark: As we sign vendors, can we do more for them to garner higher margin? So, that's what we look at constantly. We do have some things in the work and will sort of announce them over the next six months easily.
Speaker 18: Okay and gre when you say improved as CA. I mean you're not going to drive that C NA down and an absolute number it assusoon that's going to tick up. It is on a percentage number. It's not going to increase its high J're just gross going the that what you're saying but correct yes correct yes on the quo growross basis but a directional basis as a percentage of AG G B yes.
Multiple speakers: [Howard Wroot] Okay, and Drew, when you say improve SG&A, I mean, you're not going to drive SG&A down at an absolute number, right? As soon it's going to tick up, it is on a percentage number, it's not going to increase as high as just your gross is going to. Is that what you're saying? [Drew Clark] Correct, yes. Not on a gross basis, but a directional basis as a percentage of AGB, yes.
Speaker 30: Ok COR. And then my question for Dale. You know, just looking back and it I think you've been there running the any for three plus years, maybe four years now, and you know, from when you started you just had this focus on getving to your top 20 accounts, not taking every business that walked in the door focusing, and you've done a great job doing that. The results speak for themselves. And now you're, you know you're doing a billion dollars in adjusted gross billings and growing double digits, 13% increase. And you, you see F fo that it's just another boring quarter, which kind of you know, begs the question for the next level of your visibility and everything is giving guidance. I think you, you know, when I look at your company ies now at a point where you can start talking more about it, you know the plan to get to two billion, three billion and adjusted gross billings, or what the trend is for the next four quarters and would give us investors and a ability to really model this out and see what's happening and I'd encourage you to do next call you. You know I'm not going to ask all specific numbers here, but maybe you could give you know some perspective now that you've gotten this thing, really focus on your top 20 accounts and geographic expansion, without accounting for acquisitions. Do you see this? You know double digit a G, B growth continuing. You know 15%. Your target is 20%. Your target is this: a billion dollar adjusted gross billing near 1.2. where do you see it? And then when can you start giving guidance, kind of looking for now that the the business really is, it seems to be in a really solid position.
Howards Wroot: Okay, great. And then, my question for Dale: just looking back at it, I think you've been there running the company for three plus years, maybe four years now, and from when you started you just had this focus on getting to your top 20 accounts, not taking every business that walked in the door focusing, and you've got a great job doing that. The results speak for themselves. And now you're doing a billion dollars in adjusted gross billings and growing double digits, 13% increase and, as your CFO said, that it`s just another boring quarter, which kind of begs a question for the next level of your visibility and everything is getting guidance. I think, when I look at your company is now at a point where you can start talking more about the plan to get to two billion, three billion in adjusted gross billings, or what the trend is for the next four quarters and would give us, investors, an ability to really model this out and see what's happening and I'd encourage you to do next call. You know I'm not going to ask all the specific numbers here, but maybe you could give some perspective now that you've got this thing, really focus on your top 20 accounts and geographic expansion.
Multiple speakers: [Howard Wroot] Without accounting for acquisitions, do you see this double digit revenue or AGB growth continuing? Is 15% your target, is 20% your target? Is this a billion dollar adjusted gross billing year or 1.2? Where do you see it and then, when can you start giving guidance kind of looking forward now that the business really is, it seems to be in a really solid position? [Dale Richard Foster] Yes. So, on the guidance for now, I'll talk about that. We've had our Board Directors meeting and earlier this week and we talked about it, because we have a good board that comes from a lot of different backgrounds, so it get discussed, it's becoming much more of a talking point. So, I think you'll see that in the next two quarters we'll talk more specifically about that. But, your question as far as our growth and where we see it, right? We're trying to take off...
Speaker 18: Yeah So on the guidance- for I'll talk about that, we've talked. You know we had our Board Directors meeting and this this week, earlier this week, and we talk about it because we have a good board that comes from a lot of different backgrounds So we get discussed. It's becoming much more of a talking point. So I think you'll see that in the next, you know, two quarters we'll talk more specifically about that. But your question as far as our growth and where we see it right, where we're trying to takeick off- and I think that's been on the last call- we're trying to pick off more of a Tier 2, Tier three vendor approach because we have a good wide who we're calling on. I want to sell more products to that group of resellers and with that, you know, we need to have some vendors that are not just emerging, that can bring four or $5 million and in growth sales per year. But we can, you know, move a needle to 10, to 20. it is the transformer to the company. So that's what we're going to see. I mean, you know I said we don't give guidance, but you know that growth rate, you know low, double digits. I mean that's what we focus on internally. But we we have some things to fix. I mean we have a new eupe implementation. We're kicking off dre and his team kicked it off a couple months ago. That's going to be transformative of the company to continue to make sure that we, you know, we keep our our's G N a at the right bolevel So we can actually scale. And we I don't believe we're the scaling point yet in the company, where that real inflection point. We can feel the coming. But we still have to get our systems in line to be able to onboard vendors, on board customers and transact more efficiently and, right now, great systems that we've buil over the years but not for the size that we are and we're going to.
Dale Richard Foster: And, I think I've said it on the last call, we're trying to pick off more of a Tier 2, Tier 3 vendor approach, because we have a good wide net of who we're calling on. I wanted to sell more products to that group of resellers and with that, you know, we need to have some vendors that are not just emerging, that can bring us $4 or $5 million in gross sales per year. But we can, you know, move the needle from 10 to 20. It is the transformer to the company. So that's what you're going to see. I mean, like I said we don't give guidance. But, you know, that growth rate, low double digits. I mean, that's what we focus on internally. But, we have some things to fix. I mean, we have a new European implementation that we're kicking off. Drew and his team kicked it off a couple of months ago. That`s going to be the transformer of the company, so we continue to make sure that we keep our SG&A at the right level so we can actually scale. And I don't believe we're at the scaling point yet in the company or that real inflection point. We can feel it coming, but we still have to get our systems in line to be able to onboard vendors, onboard customers and transact more efficiently and right now, great systems that we've built over the years but not for the size that we are and we're going to.
Speaker 18: So just to follow what, what do you see, as you know, transformative growth size wise, is this: you know this market'is huge but your segment is kind of the smaller end of that. Is this potentially a $5 billion just a gross billings company and you excluding acquisitions? Do you see that in a P year plan? Or is this? Is this getting up to a maximum where you got to acquire to get the business to continue to grow at this trade?
Multiple speakers: [Howards Wroot] So, just a follow up. What do you see as transformative growth, size wise? You know, this market's huge but your segment is kind of the smaller end of that. Is this potentially a $5 billion just to gross billing company, excluding acquisitions? Do you see that in a five year plan? Or is this getting up to a maximum where you got to acquire to get the business to continue to grow at this rate? [Dale Richard Fosters] It's a combination. We want to acquire just because we think what we're doing is good in the states and we can acquire and move those into different geographies. The targets are all gone, like I said before, in the states. So, we're going outside of there. But yeah, five billion in five years. I mean, I wouldn't say that's outside of the norm that we can do, and there's not just targets that are going to, just by acquisitions, get us there, right? It's going to be organic, it's going to be some other pockets or adjacent markets that we look into. But you know, if you look at the smallest of the big 3 IT distributors, which is Arrow at $30 billion.
Speaker 8: Well it's a combination we want to acquire just just because we think what we're doing is good in the states and we can acquire and move those into different geographies. The targets are all gone, like I said before, and in the stateates. So we're going outside of there. But you have five billion in five years. I mean I wouldn't say that outside of the, the norm that we can do, and there's not that many tardies that are going to do just by acquisitions. Get us there right, it's going to be organic, it's going to be, you know, some other pockets or adjacent markets that we look into. But if you look at the smallest of the big three it distributors, which is arrow 3, $3 billion, you know there's a huge gap between us and arrow. And then you have R and tech, D a's, ICs on top of that in the 40 and 50 bion. So there's alot. But we just don't want keep driving to the justic illing. We do want to do both right. We want increase our sales and we want to try to expand our margins and areas that we can. It will' show up overall, but it'll show up in certain pockets, that we become that more entangle with our customers. Because that's what we want. I want to customer for 10 years, not 10 orders. We're going to keep that same mantra as we go, no matter where.
Dale Richard Foster: There's a huge gap between us and Arrow, and then, you have Ingrom and TechData on top of that, in the $40 and $60 billion. So, there is a lot, but we just don't want keep driving to the [inaudible] billing. We do want to do both, right? We want to increase our sales and we want to try to expand our margins and areas that we can. It won't show up overall, but it will show up in certain pockets that we become that more entangled with our customers, because that's what we want. I want a customer for 10 years, not 10 orders, and we're going to keep that same mantra as we go, no matter what.
Speaker 15: I lose outward.
Howards Wroot: Yeah, you cut out there. Sorry about that, but I think I caught most of it and you know, I`ll listen to the replay to see if there's anything I missed, but, you know, congratulations on a great quarter and, I just encourage on your next call, spend a couple minutes talking about the long-term of the company and the guidance, kind of, going forward as much as you can.
Speaker 31: Yeah yeah, I get you. You cut out there. Sorry about that, but I think I gotu most of it and you know all list to the replay as anything I missed. But you know, Congratulations on a great quarter and I just encourage your next call, you know, spend a couple of minutes talking about the long term, you know of the company and the guidance, kind of going forward as much as you can.
Speaker 18: You got how, if Dale reference, we did a deep guide with our Board. It's sort of a strategic session and you must have been been the flying in the lawall because we absolutely will be starting to share some- I hate to say- guidance, but sort of directional trends that we are looking forward to over the next two to three years. So at least you all will have a sense of some guide posts. But we won't be. We were specific. But we absolutely will provide some directional thoughts and guidance to the market after our Q2 earnings call.
Drew Clark: You got it. As Dale referenced, we did a deep dive with our Board, sort of a strategic session, and you must have been the fly in the wall, because we absolutely will be starting to share some, I hate to say guidance, but sort directional trends that we are looking forward to over the next two to three years. So, at least you all will have a sense of some guide post. But, we won't be specific, but we absolutely will provide some directional thoughts and guidance to the market after our Q2 earnings call. [Howards Wroot] Great. Thanks, guys. Great quarter!
Speaker 18: Great thanks guys, great quarter.
Speaker 18: Thank you, goodbye.
Speaker 28: Our next question comes from Bruce linderman, a private Investor. Please go ahead.
Multiple speakers: [Drew Clark] Thank you. [Operator] Our next question comes from Bruce Linderman, a private investor. Please, go ahead. [Bruce Linderman] Hi. Me and my wife are shareholders for over 20 years. We want to thank you for the great job you've done with this company since you've taken over. Our question is, there's very, you know, the liquidity is very problematic. Sometimes it could be $2 or $3 during the trading day, and even though it's not fashionable to split a stock at these levels, maybe it's possible with some sort of stocks, because, at least you get more shares into the market and make it, you know, more... because, to attract investors, especially institutions, they've got to be able to get a decent number of shares and they also have to be able to get liquidity. So, that might give us some liquidity. What are your thoughts?
Speaker 15: Being in my wife for shareholders for over 20 years. I want to thank you to the great job you've done with this company over since you've taken over. Our question is: there's very, very you. The liquidity is very problematic. Sometimes it could be two or $3 during the trading day and even though it's not fasionable, the split of stock at these levels, maybe it's possible that some sort of stocks with because at least get more shares into the market.
Speaker 32: And make it more to attract investors, especially institutions. They've got to be able to get.
Speaker 33: lecent number of shares, and they also have to be able to get liquidity, So that might give us some liquidity. What are your thoughts?
Dale Richard Foster: Yes, thanks, Bruce. We talk about it, you know, in various meetings, as far as the exact [inaudible] goes. We haven't come up with the exact plan that the company going to go forward, but I can tell you that we discuss, it`s not like we're sitting and saying "Hey, you know, it is what it is". We'll look at different levels that we can pull. We think that our stock, the people look at it and say "Hey, this is a good value and where the company is gonna go". So, we need to do more work on that side. I can tell you, just personally, I mean, we're just so focused on driving the business, so, we need to look, and that was part of our strategic meetings this week with the board, so, as where we're going to go, what's important to our shareholders, and guidance came up, and liquidity comes up in almost every meeting. So, we hear you. We just don't have an answer for you today.
Speaker 18: Again thanks for as we talk about it, you know, and the various meetings you know. As far as the fact come with the made, as far as the courard goes, we haven't come up with exact plan that the company is going to go forward, but I can tell you gets discussed. It's not like we're bitting and saying Hey, you know, it is what it is. We we will look at different levers that we can pull. We think that you know our stock, you know the people look at it and say Hey, this is a good value and where the company is going to. So we need to do more work on that side. You know, I can tell you just personally. I mean, we're just we're so focused on driving a bit of. We need to look- and that was part of our strategic meeting, meetings this week with the board- So as where we're going to go, looking forward to our shareholders, you know, and guidance came up in liquidity. He comes up in almost every meeting. So we hear you. We don't have answer for each thing.
Speaker 7: That's, that's listen. Thank you guys, for everything. You've done a very nice job, Thank you.
Speaker 18: You got it, Thanks very.
Speaker 7: This concludes the question-and-answer session. I would like to turn the conference back over to MR foster for any closing remarks.
Speaker 18: Thank you, operator. I'd like to quse D call, thank all of our stakeholders and especially Thank you to our growing global employee. Count just got a great team. Wherever we go, we are making a difference. You'll see more and more of our companies names out there. Climb is very prevalent and our new great matter- transformation in the? U's getting more and more traction, So you'll see that. But thank you all on all of our stakeholders.
Speaker 15: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Operator: [music]
Speaker 15: Yeah.
Speaker 15: There R.