Global Industrial Company (GIC) FY Conference June 04, 2025 02:20 PM ET Speaker0 Thank you, Ryan. Good afternoon, everyone. As Ryan shared, I'm Anissa Chivey. I'm the CEO of Global. I joined in mid February, so I am, relatively new. But by way of background, just to give you some context, I spent sixteen years at GE. I'm also ex Home Depot, and I ran the b to b side of the HD Supply portion that was called Facilities Maintenance. I did that for just under eleven years. I also ran a custom highly engineered ...

Investors interested in Industrial Services stocks are likely familiar with Global Industrial (GIC) and SiteOne Landscape (SITE) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to ...

Revenue and Sales Performance - The Company generated revenue of $321.0 million, a decline of 0.7% from $323.4 million in the same period last year[60]. - U.S. sales declined 0.3% for the quarter compared to the same period in 2024, while Canada sales declined 8.8% (2.5% in local currency)[64]. Profitability and Margins - Consolidated gross margin increased to 34.9%, up from 34.3% year-over-year, benefiting from proactive price management[60]. - Operating margin for Q1 2025 increased by 30 basis points compared to Q1 2024, attributed to improved gross margin and cost control measures[70]. - Net income per diluted share from continuing operations increased 2.9% to $0.35 compared to $0.34 last year[60]. - Gross margin for Q1 2025 was 34.9%, a 60 basis point improvement from 34.3% in Q1 2024, driven by price capture and freight management[67]. Expenses and Cost Management - Selling, distribution and administrative expenses (SD&A) were $93.9 million, representing 29.3% of net sales, up from 28.9% last year[61]. - Selling, distribution, and administrative expenses (SD&A) as a percentage of sales increased by approximately 40 basis points year-over-year, with total salary and related costs rising by $2.7 million[69]. - The Company continues to maintain strong cost controls within discretionary spending[54]. - The Company is focused on integrating Indoff's operations and optimizing its cost structure amid ongoing IT control remediation[54]. Cash Flow and Liquidity - Net cash provided by operating activities from continuing operations was $3.3 million in Q1 2025, down from $6.3 million in Q1 2024, primarily due to changes in working capital[77]. - Cash and cash equivalents decreased by $5.6 million from $44.6 million as of December 31, 2024, to $39.0 million as of March 31, 2025[74]. - The company had over $156 million of liquidity (cash and undrawn line of credit) in the U.S. as of March 31, 2025[85]. - The company maintains a $125.0 million secured revolving credit facility, with total availability of approximately $122.2 million as of March 31, 2025[80]. Future Outlook - The Company anticipates increased volatility in margin rates due to market inflation and tariff-related cost increases[54]. - The company anticipates capital expenditures in the range of $2.0 to $3.0 million for 2025, with no contractual commitments at this time[83]. - Regular quarterly dividends in Q1 2025 totaled approximately $10.1 million, reflecting a dividend of $0.26 per common share[79].

Financial Data and Key Metrics Changes - In Q1 2025, the company generated revenue of $321 million, a decline of less than 1% compared to the previous year, with U.S. revenue down 0.3% and Canadian revenue down 2.5% in local currency [4][12] - Gross margin increased by 60 basis points year-over-year to 34.9%, and operating income improved by 4.6% [5][16] - Operating income from continuing operations was $18.2 million, with an operating margin of 5.7% [18] Business Line Data and Key Metrics Changes - The performance of the company's largest strategic accounts improved, contributing positively to revenue growth as the quarter progressed [4][7] - The Indof business continued to see growth in new order generation, indicating strong performance in project-based segments [24] Market Data and Key Metrics Changes - The company faced challenges due to tariffs enacted in April, which disrupted the supply chain and impacted price and demand dynamics [8][10] - Despite these challenges, the company maintained a strong inventory position, which provided flexibility in price cost management [14][31] Company Strategy and Development Direction - The company aims to broaden its customer base by expanding existing account relationships and accelerating growth initiatives [7] - There is a focus on enhancing performance through account-based marketing and improving the alignment of marketing and sales [7] - The company is actively diversifying its supply chain to mitigate risks associated with tariffs, particularly those affecting imports from China [15][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage through the current environment, emphasizing a customer-centric approach and strong balance sheet [10][19] - The future demand environment remains uncertain due to macroeconomic factors and tariffs, but management is focused on executing effectively [25][63] Other Important Information - The company declared a quarterly dividend of $0.26 per share, reflecting its strong financial position [20] - Capital expenditures for 2025 are expected to be in the range of $2 million to $3 million, primarily for maintenance-related investments [18] Q&A Session Summary Question: Impact of Indof on the quarter - Management noted that Indof saw broader growth across larger customer segments, with no significant pull forward demand observed [24] Question: SD and A expenses sustainability - Management indicated that SD and A expenses were controlled, with a focus on maintaining cost efficiency while allowing for revenue growth [26][27] Question: Future pricing and gross margins amid tariffs - Management acknowledged the fluid situation regarding tariffs and indicated that they are monitoring it closely while managing inventory effectively [28][30] Question: Sourcing shift from China - Management confirmed that the sourcing from China has decreased from previous levels, with ongoing efforts to diversify supply chains [39][40] Question: Growth in strategic accounts - The growth in strategic accounts was attributed to both bringing on new accounts and strong performance from existing ones [47] Question: Potential for acquisitions - Management stated that M&A remains a lever for growth, with the company actively looking for strategic opportunities [65]

Core Viewpoint - Global Industrial (GIC) reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, and showing a slight increase from $0.34 per share a year ago, representing a 75% earnings surprise [1] Financial Performance - The company posted revenues of $321 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.56%, although this is a decrease from year-ago revenues of $323.4 million [2] - Over the last four quarters, Global Industrial has only surpassed consensus EPS estimates once [2] Stock Performance - Global Industrial shares have declined approximately 11.1% since the beginning of the year, compared to a decline of 6% for the S&P 500 [3] - The current Zacks Rank for the stock is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $339.66 million, and for the current fiscal year, it is $1.48 on revenues of $1.33 billion [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Industrial Services industry, to which Global Industrial belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Global Industrial Company (GIC) Q1 2025 Earnings Call April 29, 2025 05:00 PM ET Company Participants Mike Smargiassi - Founding PartnerAnesa Chaibi - CEOTex Clark - Senior Vice President and Chief Financial OfficerMichael Francis - Equity Research Associate Conference Call Participants Anthony Lebiedzinski - Senior Equity Research AnalystMatt Kaelberer - Research Analyst Operator Industrial Company First Quarter twenty twenty five Earnings Call. All participants will be in a listen only mode. After today's ...

美国工业分销商Global Industrial Company：4月份实施的全球工业关税不仅对我们的业务造成了干扰， 而且对整个供应链和我们的客户造成了干扰。 ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) For the first quarter of 2025, Global Industrial Company reported net sales of $321.0 million, a slight decrease of 0.7% year-over-year, while improving profitability with gross margin expanding to 34.9% and operating margin increasing to 5.7% Q1 2025 vs Q1 2024 Performance Summary (U.S. dollars in millions, except per share data) | Performance Summary (U.S. dollars in millions, except per share data) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $321.0 | $323.4 | | Gross profit | $112.1 | $110.9 | | Gross margin | 34.9% | 34.3% | | Operating income from continuing operations | $18.2 | $17.4 | | Operating margin | 5.7% | 5.4% | | Net income from continuing operations | $13.5 | $13.1 | | Net income per diluted share from continuing operations | $0.35 | $0.34 | - Consolidated sales decreased by **0.7%** year-over-year[7](index=7&type=chunk) - Consolidated gross margin increased from **34.3% to 34.9%**[7](index=7&type=chunk) - Consolidated operating income from continuing operations increased by **4.6%**[7](index=7&type=chunk) - Net income per diluted share from continuing operations increased by **2.9%**[7](index=7&type=chunk) [Management Commentary and Outlook](index=2&type=section&id=Management%20Commentary%20and%20Outlook) Management attributed the slight revenue decline to the New Year's holiday timing, noting improved performance in March and strong cost controls, while actively mitigating new tariff impacts - Q1 revenue of **$321 million** was down less than **1%** year-over-year, but would have increased by low single digits excluding the New Year's holiday impact[4](index=4&type=chunk) - Performance improved sequentially through the quarter, culminating in revenue growth in March, led by Indoff and the company's largest strategic accounts[4](index=4&type=chunk) - The company is actively working to mitigate the impact of tariffs enacted in April, which have caused disruption to the entire supply chain[4](index=4&type=chunk) [Financial Position and Shareholder Returns](index=2&type=section&id=Financial%20Position%20and%20Shareholder%20Returns) As of March 31, 2025, the company maintained a solid financial position with $192.5 million in working capital and $39.0 million in cash, while declaring a quarterly cash dividend of $0.26 per share Liquidity and Capital Position (as of March 31, 2025, in millions) | Metric | Value (in millions) | | :--- | :--- | | Total working capital | $192.5 | | Cash and cash equivalents | $39.0 | | Excess availability under credit facility | $120.5 | - Operating cash flow provided by continuing operations in the first quarter was **$3.3 million**[4](index=4&type=chunk) - The Board of Directors declared a cash dividend of **$0.26 per share**, payable on May 19, 2025, to shareholders of record on May 12, 2025[4](index=4&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements provide a comprehensive view of the company's financial health and operational results for the first quarter ended March 31, 2025 [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, net sales slightly decreased to $321.0 million, but operating income from continuing operations increased to $18.2 million, resulting in net income of $13.6 million Q1 2025 Statement of Operations (in millions) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $321.0 | $323.4 | | Gross profit | $112.1 | $110.9 | | Operating income from continuing operations | $18.2 | $17.4 | | Net income from continuing operations | $13.5 | $13.1 | | Net income | $13.6 | $13.2 | | Diluted EPS from continuing operations | $0.35 | $0.34 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $536.7 million, driven by higher accounts receivable and inventories, with shareholders' equity also rising to $287.9 million Balance Sheet Summary (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $39.0 | $44.6 | | Inventories | $178.6 | $167.1 | | Total current assets | $372.9 | $352.6 | | Total assets | $536.7 | $520.7 | | Total current liabilities | $180.4 | $168.4 | | Total liabilities | $248.8 | $239.6 | | Shareholders' equity | $287.9 | $281.1 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, operating cash flow from continuing activities was $3.3 million, leading to a net decrease in cash of $5.6 million, with the quarter-end cash balance at $39.0 million Cash Flow Summary (in millions) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3.4 | $6.4 | | Net cash used in investing activities | ($0.2) | ($1.3) | | Net cash used in financing activities | ($8.8) | ($9.6) | | Net decrease in cash | ($5.6) | ($4.5) | | Cash and cash equivalents – End of period | $39.0 | $29.9 |

Supply Chain and Economic Conditions - The company has experienced disruptions in global supply chains, particularly from China, which could adversely affect operations and sales due to delays in receiving imported products [44]. - Economic conditions in North America directly impact the company's consolidated results, with potential declines in sales linked to decreased customer spending and confidence [43]. - The company relies significantly on products imported from China for private brand lines, exposing it to risks associated with tariffs and trade policies [49]. - Increased shipping costs have been observed due to geopolitical conflicts, such as the Russian invasion of Ukraine, which may continue to affect international business and economic conditions [50]. - The company has faced challenges in maintaining and increasing sales volumes with existing customers, which could impact profitability [46]. - Tariffs imposed on foreign-sourced goods have led to increased procurement costs, with the company attempting to offset these through price increases and cost reductions [54]. - The company is experiencing volatility in freight and shipping costs, which could adversely affect margins if these costs cannot be passed on to customers [66]. Labor and Operational Challenges - The competitive labor market in the U.S. poses challenges for recruiting and retaining employees, potentially increasing operational costs [58]. - The company’s ability to maintain efficient distribution is critical, with disruptions at distribution centers potentially affecting inventory and timely deliveries [53]. - The company is exposed to inventory risks, including the inability to profitably resell excess or obsolete inventory, which could lower gross margins [84]. - The company has faced operational problems in implementing new IT systems, which could impact business operations and financial reporting [71]. - Increased costs from independent freight carriers may not be fully passed on to customers, resulting in lower margins for the company [67]. Financial Performance and Reporting - Consolidated sales increased by 3.3% to $1.32 billion in 2024, compared to $1.27 billion in 2023; excluding Indoff, sales declined by 0.6% [126]. - Consolidated gross margin improved to 34.3% from 34.2% in the previous year; excluding Indoff, gross margin was 36.0%, up from 35.5% [126]. - Consolidated operating income decreased by 16.6% to $80.5 million, with a decline of 18.6% to $73.9 million when excluding Indoff [126]. - Net income per diluted share from continuing operations decreased by 14.7% to $1.57 compared to $1.84 in the previous year [126]. - Selling, distribution, and administrative expenses increased to $371.5 million in 2024 from $339.3 million in 2023, reflecting a 9.5% rise [135]. - The effective income tax rate decreased to 23.9% in 2024 from 25.7% in 2023, influenced by the reversal of previously non-deductible executive stock compensation [139]. - Cash and cash equivalents increased to $44.6 million in 2024 from $34.4 million in 2023, a change of $10.2 million [141]. - Working capital increased by $28.6 million, primarily due to higher cash and inventory balances [144]. - Net cash provided by operating activities from continuing operations was $50.7 million in 2024, down from $85.3 million in 2023, primarily due to lower income and increased depreciation and amortization expenses [145]. Acquisitions and Strategic Initiatives - The acquisition of Indoff in May 2023 resulted in significant intangible assets and goodwill totaling approximately $64.3 million, with consolidated carrying amounts of goodwill and intangible assets at $65.7 million as of December 31, 2024 [88]. - The Company acquired 100% of Indoff for approximately $72.6 million in cash, enhancing its presence in the North American MRO market [116]. - A strategic acquisition was completed in Q4 2024, enhancing the company's product portfolio and expected to add $50 million in annual revenue [219]. - The company is expanding its market presence in Europe, targeting a 30% increase in market share by 2026 [219]. Internal Controls and Compliance - Material weaknesses in internal control over financial reporting have been identified, which could impair the company's ability to produce timely and accurate financial statements [80]. - Ernst & Young LLP issued an adverse report on the effectiveness of the Company's internal control over financial reporting as of December 31, 2024 [183]. - The Company identified material weaknesses in the design and operation of Information Technology General Controls (ITGCs) as of December 31, 2024, affecting both Global Industrial and Indoff businesses [179]. - The Company has made substantial progress in remediating the identified material weaknesses, including hiring additional IT compliance personnel and engaging a third-party accounting advisory firm [186]. - Management's remediation plans are ongoing, and the Company will not conclude that the material weaknesses are fully remediated until controls are fully implemented and tested [189]. Future Outlook and Growth Projections - The company provided an optimistic outlook, projecting a revenue growth of 10-12% for 2025 [219]. - Research and development expenses increased by 18% in 2024, focusing on innovative technologies [219]. - The company plans to implement cost-saving measures aimed at reducing operational expenses by 5% in 2025 [219]. - User data indicated a 20% increase in active customers, reaching a total of 1.2 million by the end of 2024 [219]. Shareholder Returns and Equity - The company declared a regular cash dividend of $0.26 per share to common stock shareholders, payable on March 17, 2025 [110]. - The Company declared dividends of $1.00 per share in 2024, up from $0.80 per share in 2023, representing a 25% increase [228]. - The company paid dividends totaling $38.4 million in 2024, compared to $30.6 million in 2023, indicating an increase of approximately 25.5% [235]. - The total equity increased to $281.1 million by December 31, 2024, up from $255.2 million in 2023, representing a growth of about 10.5% [235].

Financial Performance - Global Industrial reported quarterly earnings of $0.27 per share, missing the Zacks Consensus Estimate of $0.28 per share, and down from $0.40 per share a year ago, representing an earnings surprise of -3.57% [1] - The company posted revenues of $302.3 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.23%, and down from $320.1 million year-over-year [2] - Over the last four quarters, Global Industrial has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - Global Industrial shares have declined approximately 4.1% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The current Zacks Rank for Global Industrial is 5 (Strong Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $320.88 million, and for the current fiscal year, it is $1.66 on revenues of $1.37 billion [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock movements [6] Industry Context - The Industrial Services industry, to which Global Industrial belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]