WSTG...HUGE Q1 results...Adj EPS = $0.61, NO DEBT...Wayside Technology Group Reports First Quarter 2022 Results
Continued Operating Leverage Drives 79% Increase in Net Income to $2.7 Million or $0.61 per Share; Adjusted EBITDA (non-GAAP) up 61% to $4.2 Million
May 05, 2022 16:05 ET | Source: Wayside Technology Group, Inc.
EATONTOWN, N.J., May 05, 2022 (GLOBE NEWSWIRE) -- Wayside Technology Group, Inc. (NASDAQ: WSTG) (“Wayside” or the “Company”), a value-added global IT channel company providing innovative sales and distribution solutions for emerging technology vendors, is reporting results for the first quarter ended March 31, 2022.
First Quarter 2022 Highlights vs. Same Year-Ago Quarter
Net sales increased 14% to $71.3 million.
Adjusted gross billings (a non-GAAP financial measure defined below) increased 13% to $238.7 million.
Gross profit increased 11% to $12.0 million.
Net income increased 79% to $2.7 million or $0.61 per diluted share.
Adjusted EBITDA (a non-GAAP financial measure defined below) increased 61% to $4.2 million.
Management Commentary
“Our momentum from the end of last year has carried into the first quarter, as reflected by another period of record results and meaningful operating leverage,” said CEO Dale Foster. “Net sales and gross profit were up low double-digits, however net income and adjusted EBITDA increased more than 60%, resulting in one of our strongest quarters of effective margin.
“These results were driven by continued execution of our core initiatives – generating organic growth with existing vendors and customers while adding new emerging vendors to our line card. In Q1, we grew billings with our top 20 vendors by nearly 20% with a 24% increase in the related gross profit, reflecting the strength of relationship with our most meaningful partners.
“As we look to the remainder of the year, we have a solid foundation in place to continue driving organic growth and improve our operating leverage. We also remain active in our M&A strategy as we are evaluating multiple targets that can enhance our geographic footprint, service and solution offerings, and we look forward to delivering on both our organic and inorganic growth objectives in 2022.”
Dividend
Subsequent to the quarter end, on May 3, 2022, Wayside’s board of directors declared a quarterly dividend of $0.17 per share of its common stock payable on May 20, 2022 to shareholders of record on May 16, 2022.
First Quarter 2022 Financial Results
Net sales in the first quarter of 2022 increased 14% to $71.3 million compared to $62.8 million for the same period in 2021. In addition, adjusted gross billings in the first quarter of 2022 increased 13% to $238.7 million compared to $210.9 million for the same period in 2021. This reflects continued organic growth from new and existing vendors.
Gross profit in the first quarter of 2022 increased 11% to $12.0 million compared to $10.8 million for the same period in 2021. The increase in gross profit was driven primarily by organic growth from the top 20 vendors in both the US and Canada, in addition to the onboarding of new vendors.
Total selling, general, and administrative (“SG&A”) expenses in the first quarter of 2022 were $8.6 million compared to $8.8 million for the same period in 2021. SG&A as a percentage of net sales was 12.1% for the first quarter of 2022 compared to 14.0% in the same period in 2021. SG&A as a percentage of adjusted gross billings was 3.6% for the first quarter of 2022 compared to 4.2%.
Net income in the first quarter of 2022 increased 79% to $2.7 million or $0.61 per diluted share, compared to $1.5 million or $0.35 per diluted share for the same period in 2021.
Adjusted EBITDA in the first quarter of 2022 increased 61% to $4.2 million compared to $2.6 million for the same period in 2021. The increase was driven by strong organic growth from new and existing vendors.
Net income as a percentage of gross profit for the first quarter of 2022 was 22.6% compared to 14.0% in the year ago quarter. Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit, increased significantly to 35.5% in the first quarter of 2022 compared to 24.4% for the same period in 2021.
Cash and cash equivalents increased to $37.0 million on March 31, 2022 compared to $29.3 million on December 31, 2021, while working capital increased by $2.2 million during this period. The Company remained debt free on March 31, 2022, with no borrowings outstanding under either its $20 million or £8 million credit facilities.
Conference Call
The Company will conduct a conference call tomorrow, May 6, 2022, at 8:30 a.m. Eastern time to discuss its results for the first quarter ended March 31, 2022.
Wayside management will host the conference call, followed by a question-and-answer period.
Funny what money can do...$$$
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