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Edited Transcript of WSTG.OQ earnings conference call or presentation 7-May-20 9:00pm GMT

·25 min read

Q1 2020 Wayside Technology Group Inc Earnings Call SHREWSBURY Jun 16, 2020 (Thomson StreetEvents) -- Edited Transcript of Wayside Technology Group Inc earnings conference call or presentation Thursday, May 7, 2020 at 9:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Charles Edward Bass Wayside Technology Group, Inc. - VP of Vendor Development at Lifeboat Distribution * Dale Richard Foster Wayside Technology Group, Inc. - CEO & Director * Michael Vesey Wayside Technology Group, Inc. - CFO, VP & Principal Accounting Officer ================================================================================ Conference Call Participants ================================================================================ * Edward Moon Woo Ascendiant Capital Markets LLC, Research Division - Director of Research and Senior Research Analyst of Internet & Digital Media * Joshua J. Peters Zenith Sterling Advisers Llc - CIO & Principal ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, 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 31, 2020. Joining us today are Wayside's CEO, Mr. Dale Foster; the company's CFO, Mr. Michael Vesey; and the company's Vice President of Alliances for Lifeboat Distribution, Charles Bass. By now, everyone should have access to the first quarter 2020 earnings release which went out this afternoon at approximately 04:05 p.m. Eastern Time. The release is available in the Investor Relations section of Wayside Technology Group's website at waysidetechnology.com. This call is also available for webcast replay on the company's website. Following management remarks, we'll open the call for your questions. Before I introduce Mr. Foster, I'd like to remind listeners that certain comments made in 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 generally to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Currently, the company is subject to risks and uncertainties related to the potential adverse effect of the current pandemic of the novel coronavirus or COVID-19 on the company, the global economy and financial markets. The extent to which COVID-19 impacts the company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. Do not to place undue reliance on any forward-looking statements, which speak 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. This presentation also includes certain non-GAAP financial measures, including adjusted gross billings; adjusted EBITDA; net income, including separation expenses; and non-GAAP earnings per share 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 release and Form 8-K furnished to the SEC this afternoon. I would now like to turn the call over to Wayside's CEO, Dale Foster. -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [2] -------------------------------------------------------------------------------- Thank you, Phyllis, and good afternoon, everyone. Before we get into the operational updates, I want to acknowledge the challenges that many people in our communities are facing as a result of the COVID-19. I'm especially proud of our team and their dedication to serving our customers during this unprecedented time. Despite the challenging environment, we continue to execute well as the strong momentum we generated throughout last year is carrying into 2020. We drove double-digit growth in gross profit and nearly 40% adjusted EBITDA growth in Q1 to $3.1 million. The sales and marketing investments that we made last year, have allowed us to address customer demand amid the current state of home mandates, where companies are using many of our technology partner products that will allow them to remote access to their security -- or for the security of their systems and the corporate data centers. Our ability to keep expanding our vendor network and deepen customer relationships even in these current market conditions tells us that we have built a successful and resilient foundation as a sales-driven organization. We spent the second half of March gearing our resources to support the health and safety of our employees. All of our corporate teams are now working remotely. Though our business has not been negatively impacted by COVID-19 to date, we are continuing to diligently manage our costs and operating structure to mitigate any potential impacts down the road. With these priorities in place, we are proud to be operating at full capacity and strength as we continue our momentum into the second quarter. One of our most significant business updates that I can share with you is the, subsequent to Q1, our acquisition of Interwork Technologies, which we announced on April 22 of this year and officially closed on the 30th of April. Interwork is a Toronto-based value-added specialty distributor focused on cybersecurity, information management and network solutions in both Canada and the U.S. Lifeboat and Interwork have very similar cultures built on servicing clients with a differentiated, high-touch approach, and we will identify multiple near-term costs and revenue synergies between the 2 organizations in the short term. Charles will discuss some of the benefits that Interwork brings to our vendor network and alliance strategy shortly. For now, I'll say that we greatly look forward to getting integrated with Interwork to our Lifeboat Distribution platform to further expand our distribution network. Before I provide more detail on the state of our business and Wayside's post Q1 trajectory, I'd like to pass the call over to Charles to discuss recent technology vendor and marketing highlights. From there, Mike will walk us through the financials, and we will -- and I will come back in for closing remarks. With that, Charles? -------------------------------------------------------------------------------- Charles Edward Bass, Wayside Technology Group, Inc. - VP of Vendor Development at Lifeboat Distribution [3] -------------------------------------------------------------------------------- Thanks, Dale. On the topic of the Interwork acquisition, Interwork brings more than 20 new vendor partners and a vast network of value-added resellers, or VARs. Interwork's current network of VARs presents a great opportunity for us to expand our presence particularly in Canada. The company's deep relationships in Canada and reputation for highly responsive service levels provide us with a lot of leverage as we execute on our own vendor alliance strategy, which focuses on identifying, evaluating and onboarding high potential emerging tech partners. Given our limited overlap in customers and technology partners, we expect to actively cross-sell products and services across both organizations. In fact, Acronis, one of Lifeboat's and Interwork's only 3 overlapping vendor partners strongly endorsed the acquisition. They see significant value in the combination and its capacity to grow Acronis' distribution network along with our ability to accelerate their go-to-market for new products. We welcome this enthusiastic feedback from Acronis, and we remain committed to delivering value to all of our vendors as we integrate Interwork into the Lifeboat platform. I'd also like to mention that we see 2 important future benefits that fit well with our emerging technology strategy. So first, Interwork's business is focused on security and data protection, which is Lifeboat's largest product category. They've developed a critical mass of talent and experience here that we will leverage across Lifeboat brands. And second, we've got a very -- had very positive interactions with Trend Micro, one of interworks larger vendor partners. Lifeboat will fast-track the onboarding of these top vendor brands, and commit significant resources to replicating Interwork's success with them. We remain committed to our core strategy of adding new emerging vendors to our line card, while building even deeper relationships with focused resources on our current partners. In our view, the Interwork acquisition is a significant bolster to our strategy rather than an interruption. With that, I'd like to turn the call over to Michael to provide more details on our financial results. Mike? -------------------------------------------------------------------------------- Michael Vesey, Wayside Technology Group, Inc. - CFO, VP & Principal Accounting Officer [4] -------------------------------------------------------------------------------- Thanks, Charles, and good afternoon, everyone. Jumping right into our results. Net sales in the first quarter increased 40% to $62.6 million compared to $44.9 million for the same period in 2019. Just over half of this growth was attributable to increased adjusted gross billings volume, while the rest was a result of a change in mix in products we record on a gross sales basis. Lifeboat Distribution segment net sales in the first quarter increased 43% to $57.3 million compared to $40.1 million, and TechXtend segment net sales increased 11% to $5.3 million compared to $4.8 million. Adjusted gross billings, a non-GAAP measure, increased 22% in the first quarter to $173.1 million compared to $141.9 million for the same period last year. As we have stated in the past, the most appropriate metric to gauge our growth is gross profit, given unique revenue accounting treatments in our industry. With that said, gross profit in the first quarter increased 13% to $8.2 million compared to $7.2 million for the same period in 2019. The increase was driven by our primary business segment, Lifeboat Distribution, which benefited from our continued work to deepen customer relationships and expand our vendor network to drive growth. Total SG&A expenses in the first quarter remained consistent at $5.5 million, with the same year ago quarter. As a percentage of revenue, SG&A decreased 350 basis points to 8.8% compared to 12.3% in Q1 2019, demonstrating the scalability of our business as we continue to leverage our investments in field sales and vendor recruitment, which enables our growth without a proportionate increase in SG&A. Net income in the first quarter of 2020 was $800,000 or $0.18 per diluted share compared to $1.5 million or $0.32 per diluted share in the same period in 2019. The decrease was driven by costs related to our settlement with N&W Group, which Dale will highlight shortly as well as costs related to the Interwork acquisition. Adjusted net income in Q1, which excludes these costs -- these onetime costs, was $2.1 million or $0.48 per share. Adjusted EBITDA in the first quarter increased 38% to $3.1 million compared to $2.3 million for the same period in 2019. The increase in adjusted EBITDA was driven by organic growth with our existing partners and new vendor additions, coupled with prudent cost management and operating efficiencies. Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit, increased 700 basis points to 38.2% compared to 31.2% in the prior year period, which continues to reflect the strong operating leverage we created for our business. Cash and cash equivalents were $11.6 million at March 31, 2020, compared to $15 million at December 31, 2019, and we remain debt-free with $20 million of availability under our credit facility. The decrease in cash from the end of 2019 is attributable to the timing of receivables. As our customers mitigate the impacts of the pandemic on their business, several of them have communicated with us about flexibility in payment timing and terms regarding receivables. We view our resellers as our partners, and we are, therefore, committed to helping them adjust to these difficult market conditions. Maintaining these open lines of communication and flexibility only strengthens our customer relationships and makes our business that much more resilient in this unprecedented time. We continue to return a significant portion of our earnings to shareholders in the form of a dividend. On May 5, 2020, the Board of Directors declared a quarterly dividend of $0.17 per share of common stock payable May 22, 2020, to shareholders of record on May 18, 2020. Now on to details from our transaction that closed at the end of this month. We view the acquisition of Interwork Technologies as a great opportunity to accelerate growth in both gross profit and adjusted EBITDA. We've acquired Interwork for an aggregate purchase price of CAD 5 million payable at closing plus a potential post-closing CAD 1.1 million earn-out. In U.S. dollars, this equates to USD 3.6 million of closing, plus USD 800,000 on the earn-out. We expect the acquisition to add approximately USD 1 million in annualized adjusted EBITDA after realizing synergies that will be phased in during the second and third quarter. More importantly, we've put our capital to use effectively, picking up a strategic asset that fits within our operating strategy and provides opportunities for future growth. This concludes my prepared remarks. I'll turn the call back over to Dale. -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [5] -------------------------------------------------------------------------------- Thank you, Mike. Before I get into the plans for the road ahead, I'd like to first provide details on the recent actions that we took with the North & Webster group. As mentioned before, on April 16, we've reached a settlement with N&W regarding their proxy solicitation to nominate director candidates for election at our 2020 annual stockholders meeting. This solicitation followed an unsolicited proposal we received from N&W to acquire Wayside in December of last year, which we determined did not serve the best interest of our shareholders as we further communicated on our Q4 conference call. In the proxy solicitation settlement last month, N&W agreed to withdraw the notice of their intent to nominate director candidates and cease any further solicitation activity, and we agreed to dismiss our lawsuit against N&W. Most notably, the settlement will -- also allowed us to repurchase 5.8% of our common shares outstanding from their group at a price of $13.19 per share. Looking to Q2 and beyond, we continue to expect that we will carry our strong momentum throughout the year and drive sustainable, profitable growth through our Lifeboat Distribution business. Even in these challenging times, from a product perspective, we will continue to deepen our presence in our core verticals, while delivering growth in newer verticals like cloud and connectivity. Across our business, we are maintaining our focus on generating double-digit organic growth in gross profit, and we expect to flow through a significant portion of that growth to adjusted EBITDA. Integrating Interwork into Lifeboat Distribution's platform in the coming quarters will allow us to make us even stronger and continuing our progress towards this goal and further advance the momentum as a sales-driven organization. In addition, we are in the process of evaluating a comprehensive rebrand for the company to better reflect the strength of the 2 companies and our shared DNA, with emerging technology brands and disruptors. We plan to have more details on this initiative soon. That aside, we will continue to operate diligently in this environment and remain cautious about the long-term impacts that the pandemic may have on our broader economy. With the latest information available to us today, we believe we are well positioned to continue executing in this environment, and we are committed to supporting all of our partners in the months and quarters ahead. With that, I'll open up to the operator for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And our first question will come from Ed Woo with Ascendiant Capital. -------------------------------------------------------------------------------- Edward Moon Woo, Ascendiant Capital Markets LLC, Research Division - Director of Research and Senior Research Analyst of Internet & Digital Media [2] -------------------------------------------------------------------------------- Congratulations on the quarter. I was wondering if you could just give us a little bit of more color on how the quarterly trends played out. Do you see any changes in March versus January and February? -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Ed, this is Dale. We look at the quarter, of course, we're going month by month, but we are always taking the dollar or taking the sales into the quarter side. But we saw it end up strong, and I think a lot of that has to do with what we had built up during the quarter, and people actually transacting in a lot of the products that we sell. A lot of it was surrounding virtual desktops, everybody going remote. We don't get into the hardware game of selling laptops and things like that. But everything that's security related all the way back to the data center, and everybody was bringing those products on board. So even though we're in the middle of the channel, it was end-user demand at that time that finished the quarter strong. -------------------------------------------------------------------------------- Edward Moon Woo, Ascendiant Capital Markets LLC, Research Division - Director of Research and Senior Research Analyst of Internet & Digital Media [4] -------------------------------------------------------------------------------- Great. And then, obviously, congratulations on the recent acquisition. How do you feel in terms of potential M&As? Do you believe that you need some time to integrate your current acquisition or do you feel that you guys have the capacity, if you guys find the right opportunity, to do something soon? -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [5] -------------------------------------------------------------------------------- Yes. It's the first one the company has done in 25 years as a company -- and we have people in the company that come from different areas over the last 4 or 5 years. So we believe we can continue to look why we're integrating Interwork. They're a great fit for us, just a great team. And if it wasn't for the personalities and the culture that they have it's similar to us and some of our backgrounds are very similar in the technology space as well, it's going to make it a lot easier for us. And the teams have already -- you try to stop them until things actually get done -- finalized, but our teams have already been talking and starting that process. So yes, we'll continue to look, and if we find a good fit, of course, we will do that as well. But we'll get this integrated pretty quickly just because of our mix of cultures that are close. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- Our next question comes from the line of Peter Lux, private investor. -------------------------------------------------------------------------------- Unidentified Participant, [7] -------------------------------------------------------------------------------- Good quarter. So a couple of questions. Is there anything in the suite of products that you sell that will be -- given the background we're working in, that is particularly -- potentially, given the COVID thing that it would enhance people's use of these products based on the current environment and specific products that people might concentrate more on because of the environment we're working in? -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [8] -------------------------------------------------------------------------------- Charles, do you want to start with that or I can and you can add? -------------------------------------------------------------------------------- Charles Edward Bass, Wayside Technology Group, Inc. - VP of Vendor Development at Lifeboat Distribution [9] -------------------------------------------------------------------------------- Yes, sure. So I would say that when you look at the overall products that we carry and where we see the -- candidly, the most current success and the most, what, future-looking success, Peter, is in the security side. We do have some companies that benefited in maybe a fairly small way from a rush to be home capable. But where we see probably the most future success from the COVID impact to the economy is going to be in the security space, where it's fairly universal that end users and our partners are finding that there's a rush to kind of protect remote assets and the like. So we think that there is a couple of brands that we actually talked about in the last earnings call like Security Scorecard that we think will have excellent future upside because of the environment we feel that we're in today. -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [10] -------------------------------------------------------------------------------- I do agree with Charles on the security side. And then just to add to that, there's a real important that started about 6 or 7 years ago with the sole virtual desktop, it's referred to as VDI, and it allows people to run remotely these virtual desktops. So we have about 4 vendors, just name a couple like Tintri and DataCore in the hyperconverged space, but that's what they do. They have a focus, and you can see that they're putting energy into their products to get them out to the market. So we'll take advantage of that as well and so will the customers because everybody's got to start thinking this way that they need to have as close to 100% operational efficiency as they can with people sitting in their homes, and they got to do all the stuff back in the data centers. -------------------------------------------------------------------------------- Unidentified Participant, [11] -------------------------------------------------------------------------------- Right. So with that said, have you guys added any new riders or potential vendors in the quarter that you're particularly excited about? -------------------------------------------------------------------------------- Charles Edward Bass, Wayside Technology Group, Inc. - VP of Vendor Development at Lifeboat Distribution [12] -------------------------------------------------------------------------------- Peter, this is Charles again. I'm excited about all the vendors we had in the quarter. I will say that we did -- joking aside, we have tried to be far more selective than we were perhaps a year ago. As we've had success with vendors, we're allocating assets to those vendors that are winning with us. But there's been a couple of brands that we picked up here in even the last 30 days that we think are going to be impactful a year out from now. And a lot of it are companies like Liqid, which is a composable architecture hardware platform. We just inked that contract here within 10 days. And we see a tremendous amount of upside in the differentiation they have in the market. So I would say Liqid is one of the ones that's actually fairly new that we're just beginning the onboarding process on. And candidly, we're -- at least on the Lifeboat side, a lot of excitement on some of the key security brands that we'll be moving over from Interwork. -------------------------------------------------------------------------------- Unidentified Participant, [13] -------------------------------------------------------------------------------- So Mike, I had a question for you. Just would you apply the straight math of reducing capitalization or stock in the market by 5.8%. So you would apply that directly? And so we might see, based on the quarter that you just had, you would then see perhaps a 6% increase in both EBITDA and net gross profit? -------------------------------------------------------------------------------- Michael Vesey, Wayside Technology Group, Inc. - CFO, VP & Principal Accounting Officer [14] -------------------------------------------------------------------------------- Well, yes. So definitely, the share -- the outstanding share count will change by the 5.8%. The transaction happened in April. So when you're looking at Q2 results, there'll be a weighted average impact to that, and when you look at the year-to-date results, it will be the same thing, 4.5 months with the old share count and the remainder of the year with the new share count, but it will be accretive to our EPS, for sure, for the rest of the year. -------------------------------------------------------------------------------- Unidentified Participant, [15] -------------------------------------------------------------------------------- And just one other thing is just sort of a comment. One of the things that we talked about over the last couple of months, particularly with the N&W boys on your back, was trying to be more transparent to -- with your shareholders. Unfortunately, I didn't really see that during the first half of the year -- first quarter of the year, perhaps it was because N&W was breathing on your neck, but is it your intent to be more conversant with the news that comes your way and to communicate that to shareholders more frequently? -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [16] -------------------------------------------------------------------------------- Yes. I think, Peter, I mean, we want to do that and be more transparent. I think that some of the stuff we just couldn't talk about because there was a lot of stuff going behind the scenes that we were not -- they're just fast moving, and we couldn't put out there legally. -------------------------------------------------------------------------------- Operator [17] -------------------------------------------------------------------------------- Your next question comes from the line of Justin Jacobs, private investor. -------------------------------------------------------------------------------- Unidentified Participant, [18] -------------------------------------------------------------------------------- Congratulations on another strong quarter. Just a clarification or just kind of digging in briefly on the timing of receivables that you've commented on in the release and then earlier in the prepared remarks, as you look today, so meaning the beginning of May, have you seen accounts receivable stretching further? And are you seeing any increase in your bad debts? -------------------------------------------------------------------------------- Michael Vesey, Wayside Technology Group, Inc. - CFO, VP & Principal Accounting Officer [19] -------------------------------------------------------------------------------- Yes. Justin, it's Mike. Increasing bad debts, no. And the -- in terms of our receivables, overall, our receivables really haven't degraded in any way. We had a couple of situations where resellers wanted us to work with them on terms. And I was a little bit of a hand in glove because there's a give and take in order to help them get a deal. If we're familiar with the reseller and know they have the ability to pay, we'll work with them to get extended terms in different ways. So at the end of the quarter, we had a couple of large deals that in order to reel them in, we had to help the resellers out given the current environment. -------------------------------------------------------------------------------- Unidentified Participant, [20] -------------------------------------------------------------------------------- Got it. Okay so just a -- go ahead, I'm sorry. -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [21] -------------------------------------------------------------------------------- Yes, I'll add real quick. We have insight into the end users. We're a distributor, so we're selling to these resellers. We do have insight because a lot of our products, they're deal reg, they have registrations tied to them, so they actually -- information is available. So we are taking a closer look at what industries they're in and maybe asking more questions, taking a harder look at the reseller and also the end users. So we'll continue to do that because it's very important in a lower-margin gain. -------------------------------------------------------------------------------- Unidentified Participant, [22] -------------------------------------------------------------------------------- Okay. So just to confirm, though, as you look beyond the end of the quarter, you haven't seen, as you look through to today, so little per month, you're not seeing any material change in what you saw versus the end of the quarter? -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [23] -------------------------------------------------------------------------------- No, we are not. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- (Operator Instructions) Our next question comes from the line of Josh Peters with Zenith Sterling Advisers. -------------------------------------------------------------------------------- Joshua J. Peters, Zenith Sterling Advisers Llc - CIO & Principal [25] -------------------------------------------------------------------------------- I really want to add my congratulations as well. I think your execution would be exceptional even in an ordinary environment and what we're dealing with now, it is truly something to see. I do have a question just about cash flow and cash reserves. So we ended the quarter with about $11.5 million of cash. Since then you repurchased those shares that looked like about $3.5 million, about another USD 3.6 million to purchase Interwork. So that brings you down, all else being equal, to about $4.5 million. As the year unfolds, do you see yourself using your revolver or seeking additional supplies of capital in order to finance your growth? -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [26] -------------------------------------------------------------------------------- Just before Mike will give you more detail, but some of that's just about the timing of receivables and payables on that. So that affected some of it, but I don't -- if we have to use our revolver, we rarely tap into it, but it's there if we need that. -------------------------------------------------------------------------------- Michael Vesey, Wayside Technology Group, Inc. - CFO, VP & Principal Accounting Officer [27] -------------------------------------------------------------------------------- Yes, yes. So I think our view is that we could fund the Interwork acquisition and the stock buyback that we did to date out of our existing cash reserves. We have the revolver for availability. We do have an intra-quarter cash cycle that we go through. So -- perhaps we use the revolver from time to time into quarter to manage ebbs and flows in our working capital, particularly if we have a large new deal come through. But we don't think anything that we've done to date would put us in a position where we have permanent debt. So we think we still have liquidity looking forward to review other deals and other uses of our capital prudently. -------------------------------------------------------------------------------- Operator [28] -------------------------------------------------------------------------------- This concludes our question-and-answer session. I would now like to turn the call back over to Mr. Foster for closing remarks. -------------------------------------------------------------------------------- Dale Richard Foster, Wayside Technology Group, Inc. - CEO & Director [29] -------------------------------------------------------------------------------- Great. Thank you, Phyllis. I'd like to thank everybody that attended today's call. I appreciate your support, keeping track of us and continue to watch us as we progress through Q2, and we'll talk to you when we do our next report at the end of Q2 and talk about Q2 results. And everybody, please stay safe. Thanks. -------------------------------------------------------------------------------- Operator [30] -------------------------------------------------------------------------------- Ladies and gentlemen, this does conclude today's conference. You may now disconnect your lines at this time. Thank you for your participation.