Q1 2024 Climb Global Solutions Inc Earnings Call
Speaker Change: [music].
Good morning, everyone and thank you for participating in today's conference call to discuss climate Global solutions financial results for the first quarter ended March 31st 2024.
Speaker Change: Joining us today, our claims CEO, Mr. Dale Foster the company's CFO, Mr. Richard Clark and the company's Investor Relations adviser, Mr. Shawn Mansouri with elevate I R.
Speaker Change: By now everyone should have access to the first quarter 'twenty 'twenty four earnings press release, which was issued yesterday afternoon at approximately 405 P. M. Eastern time. The release is available on the Investor Relations section of claim Copel solutions website at Www Dot climbed global solutions dotcom.
Speaker Change: Call will also be available for webcast replay on the company's website.
Speaker Change: Following management remarks, we will open the call for your questions.
Sean Mansouri: I'd now like to turn the call over to Mr. Mansouri for introductory comments.
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.
Mansouri: 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.
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.
Mansouri: Do not place undue reliance on any forward looking statements, which are being made only as of the date of this call.
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.
Mansouri: Our presentation also includes certain non-GAAP financial measures, including adjusted gross billings adjusted EBITDA, adjusted net income and EPS and effective margin.
Mansouri: Supplemental measures of performance of our business.
Mansouri: All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules.
Mansouri: You'll find reconciliation charts and other important information in the earnings press release and form 8-K, we furnished to the SEC yesterday.
Mansouri: With that I'll turn the call over to climb CEO Dale Foster.
Dale Richard Foster: Thanks, Sean and good morning, everyone. We continue to make progress in growing climb and strengthening our customer and vendor relationships in the first quarter as it produced double digit organic growth in North America, and we benefited from our recent acquisition of data solutions in Europe.
Dale Richard Foster: Although we generated solid topline growth, we experienced softer volumes.
Dale Richard Foster: A key few vendors primarily related to our timing with what's happening with.
Dale Richard Foster: As many of you are aware our acquisition of <unk> solutions broad deep network of relationships decline as well as a robust recurring revenue base with more than 90% of its fiscal 2023 revenue coming from existing reseller partners.
Dale Richard Foster: We've already begun to take advantage of cross selling opportunities between corn and corn EMEA teams. For example, we signed global agreements with Gilenya solar wind and Sue said do they pursue although these synergies are still in the early stages, we expect to uncover additional cross selling opportunities as well as drive further operating efficiencies as we continue to it.
Dale Richard Foster: Data solutions into our global operations during.
Dale Richard Foster: During the quarter, we deepen current partnerships with both finding new marquee vendors to our line card, we evaluated 32 vendors and find agreements with only four of them demonstrating our commitment to participating and partnering with the most innovative cutting edge technologies in the market. For example in Q1, we expanded our partnership with James They are lean.
Dale Richard Foster: Provider of Apple device management, and security software that enables businesses to efficiently manage and secure their apple devices.
Dale Richard Foster: Seamless integration enhanced productivity and streamline workflows.
Dale Richard Foster: Initially we partnered with Janssen to launch their products in Canada that based off the strong initial results, we reevaluated the scope to expand distribution in the United States, demonstrating our ability to successfully launch products and offer additional geographic exposure through our network of resellers.
Dale Richard Foster: As we've often said in the past, we strive to build longstanding meaningful relationships with our partners. As a result, we are seeing increased exposure from targeted media coverage and industry interviews with our global teams. In addition to receiving several notable recognition from key vendor partners in the first quarter climbed was awarded distributor or partner.
Dale Richard Foster: The year by numerous vendors, including Gilenya wasabi trend micro larger game Tonight to name a few these awards are an affirmation of our strategic direction and speak to our approach to a limited line cards. So that we can focus and going deeper with our vendor partners and truly add value to their sales efforts. We are excited to build upon the strong growth we have.
Dale Richard Foster: The teams together.
Dale Richard Foster: Looking to the remainder of 2024, we have a solid foundation to place in place to continue driving organic growth with existing vendors, while signing new market, leading technologies to our line card, we expect to uncover additional synergies and cross selling opportunities. The only further integrate data solutions onto our operating platforms, our ERP implementation.
Dale Richard Foster: She is also on track to go live. This summer this will enable us to drive further operating efficiencies through our global operations, we will continue to leverage our strong liquidity position to explore new acquisitions.
Dale Richard Foster: Hence our offerings and extend our presence in both domestic and international markets. We believe the combination of these initiatives will lead to another so yet another year of record growth and profitability.
Speaker Change: That I will turn the call over to our CFO drew Clark He will take you through the financial results. Thank you drew.
Andrew E. Clark: Quick reminder, as we review the financial results for our first quarter all comparisons in the variance commentary refers to the prior year quarter unless otherwise specified.
Andrew E. Clark: Before we jump into the results, let me reiterate dale's comments about our positive outlook for the balance of 2024 and beyond despite below expectation operating results for the first quarter.
Andrew E. Clark: As reported in our earnings press release, adjusted gross billings or H E B, which is a non-GAAP measure increased to 16%.
Andrew E. Clark: Which is $355 3 million for the quarter compared to $306 7 million in the year ago quarter net.
Andrew E. Clark: Net sales in the first quarter of 2024 increased 9% to $92 4 million compared to $85 million, which primarily reflects organic growth from new and existing vendors as well as the contribution for our acquisition of data solutions in October of last year.
Andrew E. Clark: Again as we've previously stated we focus on H E. B is the true metric of our topline growth as the calculation of net sales is influenced by product mix and the respective adjustment to convert a GB to net sales for financial reporting purposes under GAAP.
Andrew E. Clark: In the first quarter, we had an increase in the sale of security maintenance and cloud products, which are recorded net of related cost of sales and therefore leads to a larger adjustment from ABB to net sales gain.
Andrew E. Clark: Data solutions also has a higher adjustment of HEB to that sales and their net sales were 33, 31% for the quarter compared to our consolidated to 26%.
Andrew E. Clark: Gross profit in the first quarter increased 12% to $17 million compared to $15 2 million again, the increase was primarily driven by organic growth from new and existing vendors in both North America, and Europe as well as contributions from data solutions.
Andrew E. Clark: Gross profit as a percentage of adjusted gross billings was four 8% compared to 5.0% driven by a decline in our solutions business G P and related margin percentage and early pay in North America.
Andrew E. Clark: SG&A expenses in the first quarter were $12 5 million compared to $10 2 million for the same period in 2023.
Andrew E. Clark: SG&A was in line with our internal budget and sequentially from the fourth quarter SG&A as a percentage of adjusted gross billings was three 5% compared to three 3% in the year ago period the.
Andrew E. Clark: The increase was primarily driven by expenses from data solutions, which we expect to reduce as we further integrate their business into our financial operating systems and their sales rebound in the second half of the year net.
Andrew E. Clark: Net income in the first quarter of 2024 was $2 7 million or 60 cents per diluted share compared to $3 3 million or 74 cents per diluted share for the comparable period in 2023.
Andrew E. Clark: As mentioned in our earnings press release.
Andrew E. Clark: Earnings per diluted share in the first quarter of 2024 was negatively impacted by one cent in FX and four cents of acquisition fees, a portion of which related to carryover of the data solutions transaction as well as prospective opportunities.
Andrew E. Clark: <unk> EBITDA in the first quarter was $5 5 million compared to $5 7 million.
Andrew E. Clark: The decrease was primarily driven by increased SG&A expenses related to data solutions and lower gross profit generated in the quarter relative to expectations that we expect to return in the back half of the year adjusted.
Andrew E. Clark: Adjusted EBITDA as a percentage of gross profit were affected margin was 32, 5% compared to 37, 4% in the year ago period.
Andrew E. Clark: Clearly unacceptable achievement you were confident you returned to target levels in future quarters.
Andrew E. Clark: Turning to our balance sheet cash and cash equivalents were $43 6 million as of March 31, 2024, compared to $36 3 million at December 31 2023.
Andrew E. Clark: While working capital remained flat during this period the.
Andrew E. Clark: The increase in cash was primarily attributed to the timing of receivable collections and vendor payments as of March 31, 2024, we had $1 $2 million outstanding debt with no borrowings outstanding outstanding under our $50 million revolving credit facility.
Andrew E. Clark: On April 29th consistent with prior quarters, our board of directors declared a quarterly dividend of <unk> 17 per share of our common stock to shareholders of record as of May 13th 2024, and payable on the 17th of May 2024.
Andrew E. Clark: To Echo Dale's earlier comments, our strong balance sheet provides us with great flexibility to evaluate M&A opportunities, both domestically and abroad to enhance our service and solution offerings across existing and future geographies. We will continue to maintain a limited and very focused line card to ensure we are partnering with most innovative enters.
Andrew E. Clark: In the market, while also taking advantage of some scale opportunities our ERP implemented implementation coupled with further integration data solutions and our U K operations will enable us to drive operating efficiencies throughout our global footprint.
Andrew E. Clark: These initiatives will enable us to grow adjusted EBITDA at a rate that exceeds our increase in adjusted gross billings, but we will keep on cloud.
Speaker Change: This concludes our prepared remarks, we'll now open it up for questions from those participating on the call operator back to you.
Speaker Change: Yeah.
Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Speaker Change: Okay.
Speaker Change: Thank you. Our first question comes from Vincent Colicchio from Barrington Research. Please proceed.
Vincent Alexander Colicchio: Yeah, they'll so to be clear it was the the light volume was cute with certain key vendors was that a timing issue or is it a lengthening of the sales cycles.
Vincent Alexander Colicchio: Yeah, a couple of things Vincent that is.
Vincent Alexander Colicchio: If you look at the quarter, we have vendors that finish up their their fiscal years in different sections. You know we have some of the bigger ones that actually ended the March sometimes they they leak over and it's funny, we have two or three of them that are going through different ERP implementations as well so they get kind of stuck up in that but we had some vendor stuff that pulled into Q4, some they're pushing.
Vincent Alexander Colicchio: Into Q2, so if we look at it and then we had a large you know deal with our <unk> acquisition, a year ago that Didnt reoccur in Q1. So if you look at the puts and takes on it it was just back and forth, but nothing underlying and we were talking about as a team.
Vincent Alexander Colicchio:
Vincent Alexander Colicchio: Our top 20 vendors 16 of them grew in Q1 of our top 20 customers 17 of them grew in Q1. So the underlying piece is still very strong its just the timing of quite a few of them.
Vincent Alexander Colicchio: So.
Vincent Alexander Colicchio: The the way you saw the volume softness do you expect for the year to be on a budget with those clients.
Vincent Alexander Colicchio: We do as drew mentioned in his comments I mean, we we we think we're in a strong back half of the year some.
Vincent Alexander Colicchio: Some of it's already coming in into our Q2 stuff that we didn't see in Q1, and we don't you know.
Vincent Alexander Colicchio: Just to be you know opening and we don't push too.
Vincent Alexander Colicchio: Bring things into a certain <unk> to make a exact number our vendors do when we do it we do Oh, no favors for them as far as when they need to do as far as timing goes. So the numbers are what they are and you know some of them drift into the next to some of them you know get pulled forward on that side.
Vincent Alexander Colicchio: Okay, and then the outside of the the aforementioned vendors, where there was volume.
Vincent Alexander Colicchio: Within your top 20 or are you growing in line with the rest of the business better what does that look like.
Speaker Change: Yeah, we are I mean of course, it's the newer the vendor and depending on their lifecycle, you know theyre growing at a faster rate. That's when we talk about you know hey, we want to really try to get double digit growth because growth because that's where the emerging vendors or is the vendor. It becomes more mature you know there isn't growth slows down it is just almost every industry.
Speaker Change: We have some larger vendors that you know they're in the single digit growth and we make it up make up for it with the emerging ones so that combination.
Speaker Change: What we talked about as a management team to focus and get a you know to that over 10% a rate, but if you looked at the numbers you know our topline grew our overall revenues and it just depends on the vendor mix and then the margin profile per vendor. So there's a lot of little little moving parts, but that's you know that's how we do.
Speaker Change: On a quarter by quarter.
Speaker Change: Areas of Oh.
Speaker Change: Segment strengths, our technology and data center.
Speaker Change: Those continue to be the key drivers.
Speaker Change: Yeah, our two our two main ones are pillars, you know our security in the data center space. So we mentioned in a previous call that you know we won the contract with CDW for the vast business.
Speaker Change: That's the first time, we've had a real big vendor moved to the U S and started with spinnaker and the U K our climb UK teams. So we'll see that pick up in the second half of the year. We're just getting going we're just getting our first orders with that but that's in the data center space and then we'll build just like we do in security when you have somebody like sofas and they are monitoring space So solar wind.
Speaker Change: We'll build a condo cottage industry of vendors around them to support them in their cross sellable.
Speaker Change: Okay I'll go back in the queue. Thank you.
Speaker Change: Thanks Vince.
Speaker Change: Our next question comes from Howard root from climb Global solutions. Please proceed.
Howard Root: Not from client global solutions individual investor, but thanks for taking my question.
Howard Root: I have two small ones and they had a more general one for Dale first.
Howard Root: The adjusted gross Billings I think went up 48 million Q1 versus Q1, a year ago, 16% can you give us a breakdown of how much of that is organic versus how much of that is some data solutions or any other acquisitions.
Speaker Change: Yeah, I'll, let drew don't get I mean, he is you get the exact numbers, but it's I think it's well sorted out there. It's probably split 50 50, it was close to that.
Speaker Change: Yes.
Speaker Change: Correct out a little a little more data solutions to generate it.
Speaker Change: Approximately 29 million in the quarter for US again as Dale mentioned in his response to Vince that was lower than our expectation ahead of the prior year quarter.
Speaker Change: About really what 2023, but one of their large vendors add some significant pull through in Q4, which obviously gave us a very strong fourth quarter results and exceeded our expectations, but unfortunately that detracted from Q1, but data solutions is performing on par. So we're excited about that.
Speaker Change: And their you know their contribution was very meaningful in Q4 and not as impactful in Q1.
Speaker Change: Okay. So and then why do you say second half rebound rather than a Q2 rebound and I assume that applies to that data solutions keep Andrew mainly.
Speaker Change: Yeah data solutions.
Speaker Change: Their quarter is second.
Speaker Change: Second quarters their weakest quarter, historically, and then as you know if you look at our historical trends Q2 tends to be one of our lower quarters as well in terms of both topline as well as of course profit.
Speaker Change: So Q2 will be solid, but we'll see a bigger rebound with some of those vendors, especially in our solutions portfolio and then the spinnaker vendors that we acquired in Q3 and Q4.
Speaker Change: You have other thoughts.
Speaker Change: No yeah, we're not on track with it.
Speaker Change: And Stephen just to add to that Howard. We are you know we integrated the sales teams early January.
Speaker Change: For the for data solutions and some of their you know managers are running now or climb a U K teams. So that team is pretty integrated that's step one the next part of the integration as upcoming it'll be in and in line with our ERP. That's going out you know rollout in July August timeframe, and we believe by the end of this year.
Speaker Change: We will have every company you know we have a lot of them on our systems right now, but everything we've acquired in the last two years will all be under one.
Speaker Change: And drew is running the project, but the focus is by the end of Q3. So that we have a true Q4 on one ERP for reporting and you can imagine you know just from three different disparate systems, you know trying to pull those altogether and it's not like we're special every company goes through it but we want to get through in Q3.
Speaker Change: Yeah, well good luck with that one we all know how hard that is to pull off but has to be done.
Speaker Change: Second question kind of I've always modeled it kind of keeping it simple like 5% gross profit 5% of adjusted gross billings than SG&A below 3%. So net income is about 2% and.
Speaker Change: This quarter I think.
Speaker Change: Somewhat because of the acquisition and cost there you're at four 8% on gross profit there are three 5% range SG&A. So net income is down at 0.8% are those realistic targets for the business. The 532 or how do you look at that or am I off on my assessment of where the number should be.
Speaker Change: Yeah I think your first modeling is more accurate you know like we said we had a little softer than in Q1 and some of the margin profile of some of our bigger vendors, but I don't we don't see that we don't see the trend and we know what it is these vendors get bigger.
Speaker Change: It's it's the larger the vendor there's two parts of it happened. They expect there's less work can be done in the channel. So they they tried to reduce the margin profile not only for us, but also our most of our reseller partners, but on the other flip side of that you know as a distributor reseller partner as they grow and it gets wider other business were more.
Speaker Change: Fishing and actually transacting that somebody's things the dollars on that so it kind of goes for one for one but that that's a pretty good way to look at it and if you look over the last couple of years, we have enough emerging vendors coming in that have a higher margin profile on that to make up for these larger ones.
Speaker Change: And you know we I can just tell you. It's non stop we talked about you know evaluating 42.
Speaker Change: Another 10 or 15 that we talked to that we are just oh don't even get off to the next phase because they're just not ready even to have a channel talk yet so if it wasn't for that robust vendors just coming out of the startup phase you know I would say, okay, it's going to slow down a little bit we don't see that at all.
Speaker Change: Okay great.
Speaker Change: Then just more general and I always like to do this kind of pointed up to 30000 seat deal how do you see the sales environment and trajectory in particular, yes.
Speaker Change: Economy and interest rates, there's any of the macro effects going on worldwide affect you and your business in any way and how would you see that going forward. The next year 18 months.
Speaker Change: Yeah.
Speaker Change: I'm not that smart Howard so on the macro side, we look at it and we're looking at has to have some kind of impact on us, but here's what I would.
Speaker Change: The thing is we are so small in our market space with our peers right. If you take a look at the big three distributors are all $40 billion plus they do a lot more hardware than we do we are software software. So we compete with divisions inside.
Speaker Change: Of each of those those big guys. What we're seeing though is the larger they get in some of their vendors you know because if you look at their top 10 vendors are bringing in.
Speaker Change: 90% of the revenues as soon as you get down the line card those vendors are not getting a cure and targeted approach that we provide so we're seeing share shift from you know our competitors to us in a pretty big way if I look at just the <unk>.
Speaker Change: Once we talked about you know that we won awards for if you take a look at those with vendors the share shift that they're pushing to walk because they're just getting a much higher touch white glove service.
Speaker Change: So it's helped to sell their products out to the market. So on the on the positive side. Our teams have really taken advantage of that but we don't see you know the effect you know.
Speaker Change: You know because we're looking at a much smaller target audience. You know, we're not selling to 30000 reseller, who we're selling to 7000.
Speaker Change: Globally, where our competitors are doing that so it's what.
Speaker Change: We just don't see it as much and we think we can you know we have a lot of levers we can pull we have a great balance sheet. So we will just go and say Hey, This is where we're going to target now we can move very quickly and put a sales team like we have on a specific vendor and capture a bunch of their business and then do the same thing. So it's much more of a tactical approach there.
Speaker Change: Okay, great. So the good news is the economy doesn't really affect you. The bad news is it's all around here. So success and failure is on your execution.
Speaker Change: That's the good news is someone else I mean, we can make those choices Sonya we will take all the blame for that as well, but we feel that we have enough feelers out there, where we can actually now a little better than putting your finger in the wind and saying Hey, we're going to go after this market or the vendors are approaching us and saying Hey can you guys help us in this situation because we have had budget cuts.
Speaker Change: And we can actually fund us through the channel.
Speaker Change: <unk> via margin and yeah, we'll double down on that we've built a team with Gilenya and they've just been a great partner for us and you'll see those numbers are continuing to grow with demand.
Speaker Change: Okay, great well congrats on the quarter, 16% revenue growth great overall year over year challenges come out, but you guys are addressing it. Thanks again.
Speaker Change: Thanks, Kevin.
Speaker Change: Our next question comes from.
Speaker Change: That's the Lim from tightened capital. Please proceed.
Lim: Thank you a couple of questions first of all Oh, Let me just circle back to your February 20th press release referencing global technologies.
Lim: Release seemed a little bit different than your typical tipping.
Lim: Typical release would you please talk about that relationship then and.
Lim: What it means or does not mean.
Speaker Change: Yeah. Thanks, Bill Yeah. So global technologies, you know their diverse supply or and we're getting asked more and more from our customer base and some of our vendors that we will have a partnership or a division that does you know for a diverse and secure supply chain. So we we've done this we've known the founders of global technology there actually.
Lim: Also.
Lim: Our vendors so it's early stages, but it's.
Lim: Have big customers that need that.
Lim: We're looking at a government thought of that as well if you're familiar with the eight a program. So my background you know the fed space. So it's a the government contracts are key to that so nothing that I can report, we know that hey, we've got all these big wins, but it's definitely another component of climb that we need to have is a diverse supplier and that's why we built.
Lim: Put that relationship together.
Speaker Change: And so you broke up in part of that answer, but essentially this isn't a joint venture it's not an acquisition.
Speaker Change: But you're working together and specifically for the federal face space is that is that the essence right now the federal piece will will will come right now it's really in our larger partners as we have a diverse supply chain.
Lim: But yeah. It's it's early on those but you know I'm I'm, saying, we're going to take advantage of the federal side of that as well, but it still can be state and local it's with our customer based on our vendors that are looking for a diverse diversity partner.
Speaker Change: Great. Thank you and then.
Speaker Change: Relative to your line card.
Speaker Change: Yeah, I know and this type of a business you've experienced it before and as have other firms.
Speaker Change: Just end up with a a vendor or a few vendors that take off in the marketplace and it and you end up being a big beneficiary of their success.
Speaker Change: The question is how many vendors on your line card today do you see that you think could explode and in a good way our revenues are just jumping in in the next year or two.
Speaker Change: Yeah, It probably opens up to my management team, we would argue over those five or six.
Speaker Change: And here's what we do just like when we pick a vendor we bet on the jockeys, they're running that vendor with what their go to market is for the channel are the same thing as far as them expanding because we've seen what they've done in the past, but then there's a lot of outside factors. If you look at all the majority of our vendors are not probably cash flow positive right. There at the start of phase or still.
Speaker Change: Picking in and dollars to grow out their channel teams. So it depends on where we'd get them in their life cycle I would say right now if it was you know Dale Foster I'm Gonna put my money on three vendors you know I would pick three of our vendor it would take off on that side and one of my my themselves leaders would pick three other ones probably so we do have a pretty.
Speaker Change: Good robust pipeline, where we think you know hey, we're gonna seem some real expansion. The quickest thing in distribution is like I said earlier, it's like a share shift piece of it and we're seeing that happen and it's just good win you know these bigger you know you know behemoths distributors, you know just moving a little different direction or it gets messy oh the the.
Speaker Change: Advantages come to us where they need something that's much more of a targeted targeted team.
Speaker Change: Great. Thank you I appreciate the help.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Vincent Colicchio from Barrington Research. Please proceed.
Vincent Alexander Colicchio: Yeah, one more for me.
Vincent Alexander Colicchio: The share gains you're seeing with certain software vendors.
Vincent Alexander Colicchio: From distributors.
Vincent Alexander Colicchio: Distributors.
Speaker Change: And then I guess it depends on what you mean by that Vince I mean decent size you know we look at a vendor if they can get to you know a.
Speaker Change: $100 million, that's that would be you know a mid to large vendor for US you know if you look at our you know so close to $800 million saw wins for a $500 million. So some sizeable vendors.
Speaker Change: On that side, but that's what I would consider as some of the larger ones and you know we're seeing more of those but here's what happens in our market typically and that is as these customers or I'm, sorry vendors get larger they look for more efficient ways to get to the market and then the keyword is how do they scale it right.
Speaker Change: How do they scale their business, we are talking to one right now that says hey, we need to scale and we can't do it by adding another 80 sales reps. The channel already exists. So you have you know these thousands of resellers you've got you know a handful of distributors. If we use the channel and leverage the channel. We can scale and we don't have to you know keep dumping the dollars into it. So we're just getting them.
Speaker Change: For one we actually are getting a you know a three X on on the investment we've put into the channels. So that's where we want to be you know that's where the inflection point is for these vendors.
Speaker Change: And we try to get early on with them have a deeper relationship with them. So when they go that way, we're ready to go and some of them. They were just still prospects for us, but we have been signed yet, but we see where they're going and we have worked with fit for you guys. If you look at the gap between where we sit as a you know adjust gross billing distributor of $1 billion and the next one at you know 20 billion.
Speaker Change: And it's a big gap for us to grow in there without really being.
Speaker Change: <unk> seen it isn't that much of a competitor to the larger teams.
Speaker Change: Thank you responding.
Speaker Change: Thanks Vince.
Speaker Change: Yeah.
Speaker Change: This concludes our question and answer session I would like to turn the floor back over to Dale Foster for closing comments.
Dale Richard Foster: Thank you operator.
Dale Richard Foster: Thank you and all the stakeholders that we continue to work with and help us build an exceptional company and really focused on the channel.
Dale Richard Foster: We have a great team and we're going to continue to you know X.
Dale Richard Foster: Execute our strategic plan for the benefit of all our shareholders.
Speaker Change: I appreciate everybody joining us today.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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