Wayside Technology Group, Inc.

Good morning, everyone, and thank you for participating in today's conference call to discuss Wayside Technology Group's financial results for the second quarter ended June 30th, 2021. Joining us today are Wayside CEO, Mr. Dale Foster, the company's CFO, Mr. Drew Clark, and the company's investor relation advisor, Mr. Sean Manjuri with Elevate IR. By now, everyone should have access to the second quarter 2021 earnings press release. which was issued yesterday afternoon at approximately 4.15 p.m. 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'll open the call for your questions. I'd now like to turn the call over to Mr. Manzori for introductory comments.

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. 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. 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. 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. You'll find reconciliation charts and other important information in the earnings press release and Form 8K we furnished to the SEC yesterday. With that, I'll turn the call over to Wayside CEO Dale Foster.

Thank you, Sean, and good morning, everyone. Our strong second quarter results reflect the continued focus and execution of both organic and inorganic growth initiatives. We generated exceptional growth across all key operating and financial metrics during the quarter, along with our two acquisitions from the past year that are driving meaningful improvement in the respective geographies and vendor lines. As we've stated before, we have three core initiatives that drive everything we do. Number one, generate organic growth from existing vendors and customers. Number two, enhance our line card with addition of new emerging vendors. And number three, execute our acquisition strategy by utilizing our balance sheet and free cash flow to acquire companies that will be strategic and accretive to our earnings. Within the existing vendor network, we continue to deepen relationships with a sales and marketing focus on higher growth products. Our partners continue to recognize our unique ability to actively sell and market their products to channel customers. Spending on security and data center and cloud product lines remain all-time highs, and we plan to continue capitalizing on this market momentum by serving as an effective sales channel for our partners. The depth of our relationships is further reflected by the activity within our top customers and partners. For instance, in 2020, we generated 102 million of gross sales with our top 20 vendors. Today, we generate more than 156 million of annualized gross sales with our top 20, a 50% increase. This truly speaks to the quality of our service offerings and the value we provide to our customers and partners. Although we are pleased with our performance to drive growth within our existing network of vendors and customers, we know there is always room for improvement, and we will continue to seek opportunities to deepen these relationships. Signing up new vendors is also key to ensuring that we have the most compelling list of technologies to offer on our line cards. In Q2, we continued to execute on that front, as reflected by several new partnerships, announcements, and marquee companies like StoreOne and D2IQ. To put some numbers behind the improvements we have made, in 2020, we generated $1 million plus in net sales with about 30 different customers. Today, we generate over $1 million of sales with more than 42 customers. This is a reflection of both depth and breadth within our customer network and speaks to the proactive sales culture we have implemented across our various business units at Wayside. On the acquisition front, we continue to actively seek strategic opportunities across multiple geographies while working to drive efficiencies through scale and various operating levers in all divisions of the company. During the quarter, we rebranded CDF's Sigma software distribution business to Climb Channel Solutions, which brings together two highly respected channel brands servicing the emerging technology market. Sigma and Climb share many vendor relationships, which has made for a seamless integration process with a shared focus on driving growth and efficiencies. As you may have seen, earlier this week we launched Climb Expedition, our new cloud marketplace designed for MSPs and hybrid bars to explore and transact with vendors that are moving to a subscription-based model of software delivery. Expedition is a flexible self-service platform that enables our partners to interact more efficiently with clients' slate of technology solutions. Expedition not only benefits our customers, but also benefits our emerging vendors by extending their reach into the MSP community. I look forward to providing future updates on Expedition and how the new marketplace Speaking of the competition, the continued consolidation in our industry provides us with an even greater opportunity to separate Wayside from the pack. In the past year, several of our top players in tech distribution either merged or have been acquired, including Ingram Micro's $7 billion acquisition by Platinum Equity, as well as Cynic's merger with Tech Data, which will create a combined company that will generate $57 billion and perform annual sales. Companies like these don't offer the boots on the ground, high-tech support that we offer through our distribution and solutions. Emerging technology companies need more than simply supply chain logistics, which is the focus of most large distribution companies. For this reason, Wayside is well positioned to win and differentiate itself in this segment of the market. Before I turn the call over, I want to discuss a few key new additions to the Wayside team. First, we are thrilled to deepen our bench on the board with the addition of Jerry Gold as a director. Jerry brings nearly three decades of executive experience to the board and is currently the Senior Vice President and COO of HP Financial Services, the IT Asset Management and Financing Division of Hewlett Packard, where she oversees $13 billion in assets across more than 50 countries worldwide. We also retained a new investor relations firm, Elevate IR, to help improve our communications and awareness within the investment community. Given our improved financial profile and the strong momentum in our business, we felt the time was right to bolster our IR efforts, and we look forward to working with Elevate to engage a broader audience going forward. And finally, in June, we appointed Drew Clark as our new CFO. Drew brings an outstanding track record of driving results for both public and private companies. He most recently served as the COO of Metasol and has served on multiple public company boards, including SafeNet and Howard Bancorp. Most importantly, Drew shares our vision of creating a differentiated platform of distribution and solutions for emerging technology brands, and he has a keen understanding of the critical work and infrastructure required to take Wayside to the next level. So without further ado, I'd like to introduce everyone to Drew Clark as he takes you through our financial results. Drew?