Climb Global Solutions Inc

Previous wording

Dividend Policy and Share Repurchase Program. Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases. Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $0.3 million, respectively, during the three months ended June 30, 2024. Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $1.0 million, respectively, during the three months ended June 30, 2023. The payment of future dividends and share repurchases is at the discretion of our Board of Directors and dependent on results of operations, projected capital requirements, applicable legal, tax and regulatory restrictions, and other factors the Board of Directors may find relevant.

Current wording

Dividend Policy and Share Repurchase Program. Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases. Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $0.3 million, respectively, during the three months ended September 30, 2024. Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $0.2 million, respectively, during the three months ended September 30, 2023. The payment of future dividends and share repurchases is at the discretion of our Board of Directors and dependent on results of operations, projected capital requirements, applicable legal, tax and regulatory restrictions, and other factors the Board of Directors may find relevant.

Previous wording

Net sales increased 13%, or $10.4 million, to $92.1 million for the three months ended June 30, 2024 compared to $81.7 million for the same period in the prior year. Gross profit increased 36%, or $4.9 million, to $18.6 million for the three months ended June 30, 2024, compared to $13.7 million for the same period in the prior year. Selling, general and administrative (“SG&A”) expenses increased 12%, or $1.4 million, to $13.0 million for the three months ended June 30, 2024 compared to $11.6 million for the same period in the prior year. Depreciation and amortization expense increased 43%, or $0.3 million, to $0.9 million for the three months ended June 30, 2024 compared to $0.6 million for the same period in the prior year. Net income increased 148%, or $2.0 million, to $3.4 million for the three months ended June 30, 2024 compared to $1.4 million for the same period in the prior year. Diluted income per share increased 142%, or $0.44, to $0.75 for the three months ended June 30, 2024 compared to $0.31 for the same period in the prior year.

Current wording

Net sales increased 52%, or $40.8 million, to $119.3 million for the three months ended September 30, 2024 compared to $78.5 million for the same period in the prior year. Gross profit increased 70%, or $10.0 million, to $24.3 million for the three months ended September 30, 2024, compared to $14.3 million for the same period in the prior year. Selling, general and administrative (“SG&A”) expenses increased 38%, or $3.8 million, to $13.9 million for the three months ended September 30, 2024 compared to $10.1 million for the same period in the prior year. Depreciation and amortization expense increased 94%, or $0.6 million, to $1.2 million for the three months ended September 30, 2024 compared to $0.6 million for the same period in the prior year. Net income increased 130%, or $3.1 million, to $5.5 million for the three months ended September 30, 2024 compared to $2.4 million for the same period in the prior year. Diluted income per share increased 129%, or $0.67 to $1.19 for the three months ended September 30, 2024 compared to $0.52 for the same period in the prior year.

Previous wording

The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. In cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates. These contracts generally have terms of no more than two months. The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings. The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions. There were no contracts outstanding as of June 30, 2024.

Current wording

The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. In cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates. These contracts generally have terms of no more than two months. The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings. The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions. The Company recognized an unrealized loss of approximately $0.1 million on contracts outstanding as of September 30, 2024.

Previous wording

We consider gross profit growth and effective margin to be key metrics in evaluating our business. During the three months ended June 30, 2024, gross profit increased 36%, or $4.9 million, to $18.6 million compared to $13.7 million for the same period in the prior year while effec tive margin increased to 37.3% compared to 34.2% for the same period in the prior year. During the six months ended June 30, 2024, gross profit increased 23%, or $6.7 million, to $35.6 million compared to $28.9 million for the same period in the prior year while effective margin decreased to 35.0% compared to 35.8% for the same period in the prior year.

Current wording

We consider gross profit growth and effective margin to be key metrics in evaluating our business. During the three months ended September 30, 2024, gross profit increased 70%, or $10.0 million, to $24.3 million compared to $14.3 million for the same period in the prior year while effec tive margin increased to 40.9% compared to 35.5% for the same period in the prior year. During the nine months ended September 30, 2024, gross profit increased 39%, or $16.6 million, to $59.8 million compared to $43.2 million for the same period in the prior year while effective margin increased to 37.4% compared to 35.7% for the same period in the prior year.

Previous wording

On October 6, 2023, we completed the acquisition of Data Solutions for an aggregate purchase price of approximately €15.0 million (equivalent to $15.9 million USD), subject to certain working capital and other adjustments, paid at closing plus a potential post-closing earn-out. The operating results of Data Solutions are included in our operating results from the date of acquisition.

Current wording

On July 31, 2024, we completed the acquisition of DSS for an aggregate purchase price of approximately $20.3 million (subject to certain adjustments) plus a potential post-closing earnout payment. On October 6, 2023, we completed the acquisition of Data Solutions for an aggregate purchase price of approximately €15.0 million (equivalent to $15.9 million USD), subject to certain working capital and other adjustments, paid at closing plus a potential post-closing earn-out. The operating results of DSS and Data Solutions are included in our operating results from the dates of acquisition.

Previous wording

Operating results of Data Solutions are included in our Distribution segment.

Current wording

The operating results of DSS and Data Solutions are included in our Distribution segment.

Previous wording

Net sales for the three months ended June 30, 2024 incr eased 13%, or $10.4 million, to $92.1 million compared to $81.7 million for the same period in the prior year. Adjusted gross billings for the three months ended June 30, 2024 increased 31%, or $85.1 million, to $359.8 million compared to $274.7 million for the same period in the prior year. Net sales and adjusted gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of Data Solutions. Adjusted gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods. During the three months ended June 30, 2024, adjusted gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales, while during the three months ended June 30, 2023, adjusted gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis.

Current wording

Net sales for the three months ended September 30, 2024 increased 52%, or $40.8 million, to $119.3 million compared to $78.5 million for the same period in the prior year. Adjusted gross billings for the three months ended September 30, 2024 increased 65%, or $183.3 million, to $465.2 million compared to $281.9 million for the same period in the prior year. Net sales and adjusted gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisitions of DSS and Data Solutions. Adjusted gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods. During the three months ended September 30, 2024, adjusted gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales, while during the three months ended September 30, 2023, adjusted gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis.

Previous wording

During the three months ended June 30, 2024, the Company had twomajor customers that accounted for 18%, respectively, of our total net sales. During the three months ended June 30, 2023, the Company had two major customers that accounted for 22% and 14%, respectively, of our total net sales. The Company hadone major vendor that accounted for 10%of total purchases during the three months ended June 30, 2024 and 12% of total purchases during the three months ended June 30, 2023.

Current wording

During the three months ended September 30, 2024, the Company had twomajor customers that accounted for 16% and 13%, resp ectively, of our total net sales. During the three months ended September 30, 2023, the Company had two major customers that accounted for 21% and 17%, respectively, of our total net sales. The Company hadone major vendor that accounted for 8% of total purchases during the three months ended September 30, 2024 and 15% of total purchases during the three months ended September 30, 2023.

Previous wording

Distribution segment gross profit for the six months ended June 30, 2024 increased 26%, or $6.1 million, to $29.9 million compared to $23.8 million for the same period in the prior year. The increase in Distribution segment gross profit was due to the aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisition of Data Solutions, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of adjusted gross billings.

Current wording

Distribution segment gross profit for the three months ended September 30, 2024 increased 85%, or $9.9 million, to $21.6 million compared to $11.7 million for the same period in the prior year. The increase in Distribution segment gross profit was due to the aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisitions of DSS and Data Solutions, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of adjusted gross billings.

Previous wording

Solutions segment gross profit for the three months ended June 30, 2024 increased 10%, or $0.3 million, to $2.9 million compared to $2.6 million for the same period in the prior year. This increase was driven by the aforementioned increase in adjusted gross billings compared to the same period in the prior year.

Current wording

Solutions segment gross profit for the three months ended September 30, 2024 increased 4%, or $0.1 million, to $2.7 million compared to $2.6 million for the same period in the prior year. This increase was driven by the aforementioned increase in adjusted gross billings compared to the same period in the prior year.

Previous wording

Customer rebates and discounts for the three months ended June 30, 2024 were $3.2 million compared to $2.5 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Current wording

Customer rebates and discounts for the three months ended September 30, 2024 were $3.9 million compared to $2.8 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Previous wording

Vendor rebates and discounts for the three months ended June 30, 2024 were$1.6 million compared to $2.1 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Current wording

Vendor rebates and discounts for the three months ended September 30, 2024 were$0.8 million compared to $2.3 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Previous wording

SG&A expenses for the three months ended June 30, 2024 increased 12%, or $1.4 million, to $13.0 million compared to $11.6 million for the same period in the prior year primarily due to the impact of the acquisition of Data Solutions. SG&A expenses were 3.6% of adjusted gross billings for the three months ended June 30, 2024, compared to 4.2% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of adjusted gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Current wording

SG&A expenses for the three months ended September 30, 2024 increased 38%, or $3.8 million, to $13.9 million compared to $10.1 million for the same period in the prior year primarily due to the impact of the acquisition of DSS. SG&A expenses were 3.0% of adjusted gross billings for the three months ended September 30, 2024, compared to 3.6% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of adjusted gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Previous wording

Depreciation and amortization expense for the three months ended June 30, 2024, increased 43%, or $0.3 million, to $0.9 million compared to $0.6 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the Data Solutions acquisition.

Current wording

Depreciation and amortization expense for the three months ended September 30, 2024, increased 94%, or $0.6 million, to $1.2 million compared to $0.6 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS and Data Solutions acquisitions.

Previous wording

Acquisition related costs for the three months ended June 30, 2024 were $0.5 million, which were costs incurred in conjunction with the acquisition of Douglas Stewart Software & Services, LLC discussed below, compared to less than $0.1 million for the same period in the prior year.

Current wording

Acquisition related costsfor the three months ended September 30, 2024 were $0.6 million, which were primarily costs incurred in conjunction with the acquisition of DSS, compared to $0.2 million for the same period in the prior year, which were costs incurred in conjunction with the acquisition of Data Solutions.

Previous wording

For the three months ended June 30, 2024 and 2023, the Company recorded a provision for income taxesof $1.0 million and $0.5 million, respectively. The effective tax rate for the three months ended June 30, 2024 and 2023 was 22.8% and 24.9%, respectively. The change in effective tax rate for the three months ended June 30, 2024 compared to the same period in the prior year is a result of limitations on the deductibility of certain executive compensation amounts during the current period.

Current wording

For the three months ended September 30, 2024 and 2023, the Company recorded a provision for income taxesof $1.7 million and $1.1 million, respectively. The effective tax rate for the three months ended September 30, 2024 and 2023 was 23.3% and 31.6%, respectively. The change in effective tax rate for the three months ended September 30, 2024 compared to the same period in the prior yearwas impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as the prior year period included limitations on the deductibility of certain executive compensation amounts.

Previous wording

Net sales for the six months ended June 30, 2024 increased 11%, or $17.7 million, to $184.5 million compared to $166.8 million for the same period in the prior year. Adjusted gross billings for the six months ended June 30, 2024 increased 23%, or $133.7 million, to $715.1 million compared to $581.4 million for the same period in the prior year. Net sales and adjusted gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of Data Solutions. Adjusted gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods and an unfavorable impact of foreign exchange rates. During thesix months ended June 30, 2024, adjusted gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales, while during thesix months ended June 30, 2023, adjusted gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis.

Current wording

Net sales for the nine months ended September 30, 2024 increased 24%, or $58.6 million, to $303.8 million compared to $245.2 million for the same period in the prior year. Adjusted gross billings for the nine months ended September 30, 2024 increased 37%, or $317.0 million, to $1,180.3 million compared to $863.3 million for the same period in the prior year. Net sales and adjusted gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisitions of DSS and Data Solutions. Adjusted gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods and an unfavorable impact of foreign exchange rates. During thenine months ended September 30, 2024, adjusted gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales, while during thenine months ended September 30, 2023, adjusted gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis.

Previous wording

Distri bution segment net sales for thesix months ended June 30, 2024 increased 13%, or $20.0 million, to $174.7 million compared to $154.7 million for the same period in the prior year. Adjusted gross billings for the Distribution segment for thesix months ended June 30, 2024 increased 24%, or $131.1 million, to $674.7 million compared to $543.6 million for the same period in the prior year. Net sales increased at a lesser rate than adjusted gross billings dueto the aforementioned differences in the product mix between the two periods.

Current wording

Distri bution segment net sales for thenine months ended September 30, 2024 increased 26%, or $59.6 million, to $286.5 million compared to $226.9 million for the same period in the prior year. Adjusted gross billings for the Distribution segment for thenine months ended September 30, 2024 increased 38%, or $308.4 million, to $1113.6 million compared to $805.2 million for the same period in the prior year. Net sales increased at a lesser rate than adjusted gross billings dueto the aforementioned differences in the product mix between the two periods.

Previous wording

Solutions segment net sales for the six months ended June 30, 2024, decreased 19%, or $2.3 million, to $9.8 million compared to $12.1 million for the same period in the prior year. Adjusted gross billings for the Solutions segment for the six months ended June 30, 2024 increased 7%, or $2.5 million, to $40.4 million compared to $37.9 million for the same period in the prior year. Net sales decreased while adjusted gross billings increased due to the aforementioned differences in the product mix between the two periods.

Current wording

Solutions segment net sales for thenine months ended September 30, 2024, decreased 6%, or $1.0 million, to 17.3 million compared to $18.3 million for the same period in the prior year. Adjusted gross billings for the Solutions segment for thenine months ended September 30, 2024 increased 15%, or $8.6 million, to $66.7 million compared to $58.1 million for the same period in the prior year. Net sales decreased while adjusted gross billings increased due to the aforementioned differences in the product mix between the two periods.

Previous wording

During the six months ended June 30, 2024, the Company had two major customers that accounted for 19% and 16%, respectively, of our total net sales. During the six months ended June 30, 2023, the Company had two major customers that accounted for 21% and 14%, respectively, of our total net sales. The Company had one major vendor that accounted for 13%, respectively, of total purchases during the six months ended June 30, 2024 and 17% of total purchases during the six months ended June 30, 2023.

Current wording

During the nine months ended September 30, 2024, the Company had two major customers that accounted for 15% and 18%, respectively, of our total net sales. During the nine months ended September 30, 2023, the Company had two major customers that accounted for 21% and 15%, respectively, of our total net sales. The Company had one major vendor that accounted for 11%, respectively, of total purchases during the nine months ended September 30, 2024 and 16% of total purchases during the nine months ended September 30, 2023.

Previous wording

Distribution segment gross profit for the three months ended June 30, 2024 increased 42%, or $4.6 million, to $15.7 million compared to $11.1 million for the same period in the prior year. The increase in Distribution segment gross profit was due tothe aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisition of Data Solutions, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of adjusted gross billings.

Current wording

Distribution segment gross profit for the nine months ended September 30, 2024 increased 45%, or $16.0 million, to $51.5 million compared to $35.5 million for the same period in the prior year. The increase in Distribution segment gross profit was due to the aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisitions of DSS and Data Solutions, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of adjusted gross billings.

Previous wording

Solutions segment gross profit for the six months ended June 30, 2024 increased 11%, or $0.6 million, to $5.7 million compared to $5.1 million for the same period in the prior year. This increase was driven by the aforementioned increase in adjusted gross billings compared to the same period in the prior year.

Current wording

Solutions segment gross profit for the nine months ended September 30, 2024 increased 9%, or $0.7 million, to $8.4 million compared to $7.7 million for the same period in the prior year. This increase was driven by the aforementioned increase in adjusted gross billings compared to the same period in the prior year.

Previous wording

Customer rebates and discounts for the six months ended June 30, 2024 were $6.6 million compared to $6.4 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Current wording

Customer rebates and discounts for the nine months ended September 30, 2024 were$10.4 million compared to $9.2 million for the same period in the prior year. Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Previous wording

Vendor rebates and discounts for the six months ended June 30, 2024 were $3.6 million compared to $3.8 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Current wording

Vendor rebates and discounts for the nine months ended September 30, 2024 were $4.4 million compared to $6.1 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Previous wording

SG&A expenses for the six months ended June 30, 2024 incre ased 17%, or 3.7 million, to $25.5 million compared to $21.8 million for the same period in the prior year, primarily due to the impact of the acquisition of Data Solutions. SG&A expenses were 3.6% of adjusted gross billings for the six months ended June 30, 2024, compared to 3.7% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of adjusted gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Current wording

SG&A expenses for the nine months ended September 30, 2024 increased 23%, or $7.4 million, to $39.4 million compared to $31.9 million for the same period in the prior year, primarily due to the impact of the acquisition of DSS. SG&A expenses were 3.3% of adjusted gross billings for the nine months ended September 30, 2024, compared to 3.7% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of adjusted gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Previous wording

Depreciation and amortization expense for the six months ended June 30, 2024, increased 32%, or $0.4 million, to $1.7 million compared to $1.3 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the Data Solutions acquisition.

Current wording

Depreciation and amortization expense for the nine months ended September 30, 2024, increased 54%, or $1.1 million, to $3.0 million compared to $1.9 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition.

Previous wording

Acquisition related costs for the six months ended June 30, 2024 were$0.6 million, which were costs incurred in conjunction with the acquisition of Douglas Stewart Software & Services, LLC discussed below, compared to less than $0.1 million for the same period in the prior year.

Current wording

Acquisition related costs for the nine months ended September 30, 2024 were$1.2 million, which were primarily costs incurred in conjunction with the acquisition of DSS, compared to $0.3 million for the same period in the prior year, which were costs incurred in conjunction with the acquisition of Data Solutions.

Previous wording

For the six months ended June 30, 2024 and 2023, the Company recorded a provision for income taxesof $1.9 million and $1.5 million, respectively. The effective tax rate for the six months ended June 30, 2024 and 2023 was 23.6% and 24.5%, respectively. The change in the effective tax rate for the six months ended June 30, 2024 compared to the same period in the prior year is a result of limitations on the deductibility of certain executive compensation amounts during the current period.

Current wording

For the nine months ended September 30, 2024 and 2023, the Company recorded a provision for income taxes of $3.6 million and $2.6 million, respectively. The effective tax rate for the nine months ended September 30, 2024 and 2023 was 23.5% and 27.0%, respectively. The change in the effective tax rate for the nine months ended September 30, 2024 compared to the same period in the prior year was impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as the prior year period included limitations on the deductibility of certain executive compensation amounts.

Previous wording

Our cash and cash equivalents as of June 30, 2024 increased 33%, or $12.1 million, to $48.4 million compared to $36.3 million as of December 31, 2023.

Current wording

Our cash and cash equivalents as of September 30, 2024 decreased 39%, or $14.2 million, to $22.1 million compared to $36.3 million as of December 31, 2023.

Previous wording

Net cash and cash equivalents provided by operating activities for the six months ended June 30, 2024 was $21.3 million, comprised primarily of changes in operating assets and liabilities of $11.5 million and net income adjusted for non-cash items of $9.8 million.

Current wording

Net cash and cash equivalents provided by operating activities for thenine months ended September 30, 2024 was $17.8 million, comprised primarily of net income adjusted for non-cash items of $18.7 million, partially offset by changes in operating assets and liabilities of $0.9 million.

Previous wording

Net cash and cash equivalents used in investing activities during the six months ended June 30, 2024 consistedof $2.4 million purchases of fixed assets supporting our ongoing ERP project.

Current wording

Net cash and cash equivalents used in investing activities during the nine months ended September 30, 2024 was$24.3 million, comprised of $3.6 million purchases of fixed assets supporting our ongoing ERP project and $20.7 million payment for the DSS acquisition.

Previous wording

Net cash and cash equivalents used in financing activities during the six months ended June 30, 2024 was $6.9 million, comprised of dividend payments on our Common Stock of $1.5 million, purchases of treasury stock of $0.7 million, repayments of borrowings under term loan of $0.3 million and repayments of borrowings under credit facil ities of $4.2 million.

Current wording

Net cash and cash equivalents used in financing activities during the nine months ended September 30, 2024 was $8.1 million, comprised of dividend payments on our Common Stock of $2.3 million, purchases of treasury stock of $1.0 million, repayments of borrowings under term loan of $0.4 million and repayments of borrowings under credit facil ities of $4.2 million.

Previous wording

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. (“First American”) pursuant to a Master Loan and Security Agreement. The proceeds from the Term Loan was used to fund certain capital expenditures. The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026. As of June 30, 2024, the Company had $1.0 million outstanding under the Term Loan.

Current wording

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. (“First American”) pursuant to a Master Loan and Security Agreement. The proceeds from the Term Loan was used to fund certain capital expenditures. The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026. As of September 30, 2024, the Company had $0.9 million outstanding under the Term Loan.