Company Information [Filing Information](index=1&type=section&id=Filing%20Information) Global Industrial Company submitted its Form 10-Q for Q2 2025, registered in Delaware, with GIC stock listed on NYSE, and 38,374,314 shares outstanding as of July 25, 2025 - Global Industrial Company submitted its **Form 10-Q** quarterly report for the period ended June 30, 2025[2](index=2&type=chunk) - The company's stock ticker **GIC** is listed on the New York Stock Exchange[3](index=3&type=chunk) - The company is identified as an **accelerated filer**[4](index=4&type=chunk) Shares Outstanding | Metric | Quantity (shares) | | :--- | :--- | | Shares outstanding as of July 25, 2025 | 38,374,314 | [Table of Contents](index=3&type=section&id=Table%20of%20Contents) The report's table of contents outlines financial information (Part I) and other information (Part II), including financial statements, MD&A, market risk, internal controls, legal proceedings, risk factors, and exhibits - The report is divided into two main parts: Part I for financial information and Part II for other information[5](index=5&type=chunk) - The financial information section includes financial statements, management's discussion and analysis, quantitative and qualitative disclosures about market risk, and controls and procedures[5](index=5&type=chunk) - The other information section includes legal proceedings, risk factors, other information, and exhibits[5](index=5&type=chunk) [Available Information & Corporate Governance](index=4&type=section&id=Available%20Information%20%26%20Corporate%20Governance) The company provides SEC reports on its investor website and has adopted various corporate governance documents to ensure transparency and compliance - The company provides annual reports (Form 10-K), quarterly reports (Form 10-Q), and current reports (Form 8-K) and all amendments free of charge through its investor website (https://investors.globalindustrial.com)[6](index=6&type=chunk) - The company's Board of Directors has adopted and made publicly available several corporate governance documents, including a Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/Corporate Governance Committee Charter, Corporate Governance Guidelines and Principles, and Conflict Minerals Disclosure[7](index=7&type=chunk)[8](index=8&type=chunk) Part I Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Global Industrial Company's unaudited condensed consolidated financial statements, including balance sheets, income statements, comprehensive income, cash flows, and shareholders' equity, along with related notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and equity Balance Sheet Key Data (as of June 30, 2025 vs December 31, 2024) | Metric (million USD) | June 30, 2025 | December 31, 2024 | Change (million USD) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 55.1 | 44.6 | 10.5 | 23.54% | | Accounts Receivable, Net | 156.8 | 126.5 | 30.3 | 23.95% | | Inventory | 171.2 | 167.1 | 4.1 | 2.45% | | Total Current Assets | 394.0 | 352.6 | 41.4 | 11.74% | | Total Assets | 586.5 | 520.7 | 65.8 | 12.64% | | Accounts Payable | 115.0 | 106.5 | 8.5 | 7.98% | | Accrued Expenses and Other Current Liabilities | 57.4 | 47.8 | 9.6 | 20.08% | | Total Current Liabilities | 187.3 | 168.4 | 18.9 | 11.22% | | Total Liabilities | 281.3 | 239.6 | 41.7 | 17.40% | | Total Shareholders' Equity | 305.2 | 281.1 | 24.1 | 8.57% | - As of June 30, 2025, the company's total assets were **$586.5 million**, a **12.64% increase** from December 31, 2024[9](index=9&type=chunk) - Cash and cash equivalents increased by **$10.5 million** to **$55.1 million**, and net accounts receivable increased by **$30.3 million** to **$156.8 million**[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, costs, and net income for the reported periods, reflecting operational performance Income Statement Key Data (as of June 30, 2025) | Metric (million USD) | 2025 Q2 | 2024 Q2 | Y-o-Y Change Rate | 2025 H1 | 2024 H1 | Y-o-Y Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | 358.9 | 347.8 | 3.2% | 679.9 | 671.2 | 1.3% | | Cost of Sales | 225.9 | 225.3 | 0.3% | 434.8 | 437.8 | -0.7% | | Gross Profit | 133.0 | 122.5 | 8.6% | 245.1 | 233.4 | 5.0% | | Selling, Distribution and Administrative Expenses | 99.5 | 96.1 | 3.5% | 193.4 | 189.6 | 2.0% | | Operating Income from Continuing Operations | 33.5 | 26.4 | 26.9% | 51.7 | 43.8 | 18.0% | | Net Income from Continuing Operations | 25.1 | 20.2 | 24.3% | 38.6 | 33.3 | 15.9% | | Net Income | 25.1 | 20.3 | 23.6% | 38.7 | 33.5 | 15.5% | | Diluted Net Income per Share from Continuing Operations | 0.65 | 0.52 | 25.0% | 0.99 | 0.86 | 15.1% | | Diluted Net Income per Share | 0.65 | 0.52 | 25.0% | 0.99 | 0.87 | 13.8% | | Dividends (USD per share) | 0.26 | 0.25 | 4.0% | 0.52 | 0.50 | 4.0% | - Q2 2025 net sales increased **3.2%** year-over-year to **$358.9 million**, and year-to-date sales increased **1.3%** to **$679.9 million**[10](index=10&type=chunk) - Operating income from continuing operations grew **26.9%** to **$33.5 million** in Q2 2025, and **18.0%** to **$51.7 million** year-to-date[10](index=10&type=chunk) - Diluted net income per share increased **25.0%** from **$0.52** to **$0.65** in Q2 2025[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents net income and other comprehensive income items, showing the total change in equity from non-owner sources Comprehensive Income Statement Key Data (as of June 30, 2025) | Metric (million USD) | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | Net Income | 25.1 | 20.3 | 38.7 | 33.5 | | Foreign Currency Translation Adjustment | 0.5 | (0.2) | 0.7 | (0.4) | | Total Comprehensive Income | 25.6 | 20.1 | 39.4 | 33.1 | - Total comprehensive income for Q2 2025 was **$25.6 million**, an increase from **$20.1 million** in the prior year quarter[12](index=12&type=chunk) - The foreign currency translation adjustment was a positive **$0.5 million** in Q2 2025, compared to a negative **$0.2 million** in the prior year quarter, indicating a positive impact from exchange rate movements on comprehensive income[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the reported periods Cash Flow Statement Key Data (as of June 30, 2025) | Metric (million USD) | 2025 H1 | 2024 H1 | | :--- | :--- | | Net Cash from Operating Activities for Continuing Operations | 35.1 | 25.0 | | Net Cash from Investing Activities | (5.6) | (2.2) | | Net Cash from Financing Activities | (18.9) | (18.5) | | Net Increase in Cash | 10.5 | 4.4 | | Cash and Cash Equivalents at End of Period | 55.1 | 38.8 | - Net cash from operating activities for continuing operations in H1 2025 was **$35.1 million**, a significant increase from **$25.0 million** in H1 2024, primarily due to increased net income and adjustments for non-cash items[14](index=14&type=chunk) - Net cash used in investing activities was **$5.6 million**, primarily due to **$4.0 million** for an acquisition[14](index=14&type=chunk) - Net cash used in financing activities was **$18.9 million**, primarily for **$20.1 million** in dividend payments[14](index=14&type=chunk) [Condensed Consolidated Statement of Shareholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Shareholders%27%20Equity) Outlines changes in the company's equity accounts, including common stock, retained earnings, and accumulated other comprehensive income Changes in Shareholders' Equity (as of June 30, 2025) | Metric (million USD) | January 1, 2025 | March 31, 2025 | June 30, 2025 | | :--- | :--- | :--- | :--- | | Common Stock | 0.4 | 0.4 | 0.4 | | Additional Paid-in Capital | 207.5 | 209.0 | 210.6 | | Treasury Stock | (16.8) | (15.2) | (15.0) | | Retained Earnings | 88.6 | 92.1 | 107.1 | | Accumulated Other Comprehensive Income | 1.4 | 1.6 | 2.1 | | Total Shareholders' Equity | 281.1 | 287.9 | 305.2 | - Total shareholders' equity increased to **$305.2 million** as of June 30, 2025, up from **$281.1 million** at the beginning of the year[15](index=15&type=chunk) - Retained earnings increased from **$88.6 million** at the beginning of the year to **$107.1 million**, primarily driven by net income contributions[15](index=15&type=chunk) - The treasury stock balance decreased from **($16.8 million)** at the beginning of the year to **($15.0 million)**, reflecting stock transaction activities[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Basis of Presentation](index=11&type=section&id=1.%20Basis%20of%20Presentation) Describes the company's business, operating segments, recent acquisition, and fiscal year structure - The company is a value-added distributor of industrial equipment and supplies in North America, marketing through branded e-commerce websites and relationship marketers[19](index=19&type=chunk) - The company operates and is managed internally as a single reportable business segment[19](index=19&type=chunk) - In April 2025, the company acquired an equipment service provider for approximately **$4.3 million** in cash, aiming to broaden its value-added services in certain key equipment categories[20](index=20&type=chunk) - The company operates on a 52-53 week fiscal year, typically ending on the Saturday closest to December 31; both Q2 2025 and 2024 were 13 weeks, and the first six months were 26 weeks[23](index=23&type=chunk) [2. Acquisition](index=12&type=section&id=2.%20Acquisition) Details the April 2025 acquisition of an equipment service provider, including its purpose and initial purchase price allocation - In April 2025, the company acquired an equipment service provider for approximately **$4.3 million** in cash, with **$0.3 million** held in escrow for potential obligations[28](index=28&type=chunk) - This acquisition aims to broaden the company's value-added services in certain key equipment categories[28](index=28&type=chunk) - The preliminary purchase price allocation showed total net identifiable assets acquired of **$3.3 million**, including **$0.7 million** in customer lists and **$1.0 million** in goodwill[29](index=29&type=chunk) - The acquisition's revenue and net income contributions were not material for the three and six months ended June 30, 2025[30](index=30&type=chunk) [3. Goodwill and Intangibles](index=13&type=section&id=3.%20Goodwill%20and%20Intangibles) Presents the company's goodwill and intangible assets, including their carrying values and amortization Goodwill and Intangible Assets (million USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Goodwill | 40.6 | 39.6 | | Finite-Lived Intangible Assets | 24.6 | 25.4 | | Indefinite-Lived Intangible Assets | 0.7 | 0.7 | | Total | 65.9 | 65.7 | Net Carrying Value of Finite-Lived Intangible Assets (as of June 30, 2025) | Asset Class | Amortization Period (years) | Gross Carrying Amount (million USD) | Accumulated Amortization (million USD) | Net Carrying Value (million USD) | Weighted-Average Useful Life (years) | | :--- | :--- | :--- | :--- | :--- | :--- | | Customer Lists | 10 | 26.8 | 7.1 | 19.7 | 7.9 | | Trademarks | 10 | 6.2 | 1.3 | 4.9 | 7.9 | | Total | | 33.0 | 8.4 | 24.6 | 7.9 | - Goodwill was **$40.6 million** as of June 30, 2025, an increase from **$39.6 million** as of December 31, 2024[32](index=32&type=chunk) - In H1 2025, the company recorded **$1.5 million** in intangible asset amortization expense, primarily related to the May 2023 acquisition of Indoff[32](index=32&type=chunk) [4. Revenue](index=14&type=section&id=4.%20Revenue) Discloses revenue by geographic region and provides information on contract liabilities Revenue from Continuing Operations by Geographic Region (million USD) | Region | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | United States | 340.7 | 330.7 | 646.2 | 637.1 | | Canada | 18.2 | 17.1 | 33.7 | 34.1 | | Consolidated Total | 358.9 | 347.8 | 679.9 | 671.2 | - The company discloses revenue by geographic region (United States and Canada), believing this best reflects the impact of economic and industry factors on revenue and cash flows[33](index=33&type=chunk) - Contract liabilities were approximately **$3.3 million** as of June 30, 2025, a decrease from **$4.1 million** as of December 31, 2024[33](index=33&type=chunk) [5. Credit Losses](index=15&type=section&id=5.%20Credit%20Losses) Explains the company's methodology for estimating credit losses on trade receivables and presents changes in the allowance for credit losses - The company maintains an allowance for credit losses on its portfolio of trade accounts receivable from commercial customers and public sector organizations, estimated based on customer financial condition, historical loss experience, current market economic conditions, and future economic forecasts[34](index=34&type=chunk) Changes in Allowance for Trade Accounts Receivable Credit Losses (million USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning Balance | 2.8 | 2.9 | | Current Period Provision | 0.6 | 2.1 | | Write-offs - Trade Accounts Receivable | (0.7) | (2.2) | | Ending Balance | 2.7 | 2.8 | - In H1 2025, the allowance for credit losses had an ending balance of **$2.7 million**, with **$0.6 million** in current period provisions and **$0.7 million** in write-offs[36](index=36&type=chunk) [6. Leases](index=16&type=section&id=6.%20Leases) Details the company's operating and finance leases, including lease costs, sublease income, and future lease liability maturities - The company has operating and finance leases for office and warehouse facilities, headquarters, call centers, machinery, and certain computer and communication equipment, with lease terms extending through 2034[37](index=37&type=chunk) - In Q2 2025, the company recorded **$28.2 million** in operating right-of-use assets and related lease liabilities, primarily associated with the renewal of an existing warehouse location[37](index=37&type=chunk) Lease Costs and Sublease Income (million USD) | Metric | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | Operating Lease Cost from Continuing Operations | 5.0 | 4.4 | 9.3 | 8.7 | | Sublease Income from Continuing Operations | 0.4 | 0.6 | 0.9 | 1.2 | Lease Liability Maturities (million USD) | Year Ending December 31 | Operating Leases | | :--- | :--- | | 2025 (Adjusted) | 9.1 | | 2026 | 21.6 | | 2027 | 17.7 | | 2028 | 17.5 | | 2029 | 17.8 | | 2030 | 15.8 | | Thereafter | 30.1 | | Total Lease Payments | 129.6 | | Less: Interest | (22.6) | | Total Present Value of Lease Liabilities | 107.0 | [7. Net Income (Loss) per Common Share](index=17&type=section&id=7.%20Net%20Income%20%28Loss%29%20per%20Common%20Share) Explains the calculation of basic and diluted net income per common share, considering potential dilutive securities - Basic and diluted net income per common share are calculated using the two-class method based on the weighted-average number of common shares outstanding, as the company has unvested restricted stock that participates in dividends[40](index=40&type=chunk) Net Income per Common Share Calculation (million USD, except per share amounts) | Metric | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | Net Income from Continuing Operations | 25.1 | 20.2 | 38.6 | 33.3 | | Basic Net Income per Share (Continuing Operations) (USD) | 0.65 | 0.52 | 1.00 | 0.87 | | Diluted Net Income per Share (Continuing Operations) (USD) | 0.65 | 0.52 | 0.99 | 0.86 | | Basic Net Income per Share (USD) | 0.65 | 0.52 | 1.00 | 0.88 | | Diluted Net Income per Share (USD) | 0.65 | 0.52 | 0.99 | 0.87 | | Basic Weighted-Average Common Shares and Common Share Equivalents (millions) | 38.4 | 38.2 | 38.4 | 38.2 | | Diluted Weighted-Average Common Shares and Common Share Equivalents (millions) | 38.4 | 38.4 | 38.4 | 38.4 | - Potentially dilutive securities, such as stock options, restricted stock units, and performance stock units, are dilutive only when the average market price exceeds the exercise price, otherwise they are excluded[41](index=41&type=chunk) [8. Credit Facilities](index=19&type=section&id=8.%20Credit%20Facilities) Describes the company's secured revolving credit facility, its covenants, and available capacity - The company has a **$125 million** secured revolving credit facility with a five-year term, maturing on October 19, 2026, for borrowing in the United States[42](index=42&type=chunk) - The credit agreement contains operating, financial, and other covenants, including levels of capital expenditures, availability tests for dividend payments and stock repurchases, and a fixed charge coverage test for acquisitions[42](index=42&type=chunk) - As of June 30, 2025, qualified collateral under the credit agreement was **$125 million**, with total availability of approximately **$122.1 million**, outstanding letters of credit totaling **$1.7 million**, and excess availability of **$120.4 million**[42](index=42&type=chunk) - The company was in compliance with all covenants under the credit agreement as of June 30, 2025[42](index=42&type=chunk) [9. Fair Value Measurements](index=19&type=section&id=9.%20Fair%20Value%20Measurements) Defines fair value, outlines the fair value hierarchy, and discusses the valuation of financial and non-financial assets - Fair value accounting defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date[43](index=43&type=chunk) - The fair value hierarchy categorizes inputs into three levels: Level 1 for unadjusted quoted prices in active markets for identical assets or liabilities, Level 2 for observable inputs other than Level 1 quoted prices, and Level 3 for unobservable inputs[43](index=43&type=chunk)[44](index=44&type=chunk) - The carrying values of cash, accounts receivable, and accounts payable are considered representative of their fair values due to their short-term nature, with cash classified as Level 1 in the fair value hierarchy[45](index=45&type=chunk) - Goodwill and indefinite-lived intangible assets are measured for fair value in the company's annual impairment tests, while long-lived assets are assessed for impairment by evaluating estimated undiscounted cash flows[46](index=46&type=chunk)[47](index=47&type=chunk) [10. Segment Reporting](index=20&type=section&id=10.%20Segment%20Reporting) Reports the company's performance as a single operating segment and provides a reconciliation of operating income to net income - The company reports the results of its continuing operations as a single reportable segment, with the Chief Operating Decision Maker (CEO) assessing segment performance based on operating income[48](index=48&type=chunk) Segment Operating Income and Net Income Reconciliation (million USD) | Metric | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 358.9 | 347.8 | 679.9 | 671.2 | | Cost of Sales | 225.9 | 225.3 | 434.8 | 437.8 | | Net Advertising Expense | 24.2 | 25.8 | 44.0 | 47.7 | | Depreciation and Amortization | 1.9 | 1.9 | 3.8 | 3.8 | | Other Costs | 73.4 | 68.4 | 145.6 | 138.1 | | Operating Income | 33.5 | 26.4 | 51.7 | 43.8 | | Net Income | 25.1 | 20.2 | 38.6 | 33.3 | - Long-lived assets outside the U.S. were **$3.2 million** as of June 30, 2025, compared to **$3.1 million** as of December 31, 2024[48](index=48&type=chunk) [11. Legal Proceedings](index=21&type=section&id=11.%20Legal%20Proceedings) Describes the various legal actions the company is involved in and its approach to assessing and accruing for potential liabilities - The company and its subsidiaries are involved in various lawsuits, claims, investigations, and proceedings from time to time, including commercial, employment, tax, customs and trade, customer, vendor, personal injury, creditor rights, and health and safety law matters[50](index=50&type=chunk) - The company regularly evaluates all litigation and potential litigation to determine the likelihood of an unfavorable outcome and records its best estimate of a loss when the likelihood is high and can be reasonably estimated[51](index=51&type=chunk) - As of June 30, 2025, the company has accrued for certain litigation, claims, investigations, and proceedings and believes any reasonably possible losses beyond the amounts accrued are not material to the financial statements[51](index=51&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operating performance, covering forward-looking statements, business overview, operating conditions, outlook, key accounting policies, and financial results [Forward-Looking Statements and Risk Factors](index=22&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) Discusses the nature of forward-looking statements in the report and outlines various risks and uncertainties that could impact the company's performance - This report contains forward-looking statements based on management's estimates, assumptions, and projections, which are not guarantees of future performance[53](index=53&type=chunk) - Forward-looking statements are subject to risks and uncertainties that could materially affect the company's business, operating results, or financial condition[54](index=54&type=chunk) - Risk factors include macroeconomic conditions, global political and economic market conditions, supply chain disruptions, increased tariffs and freight costs, extreme weather, labor market competition, acquisition integration risks, industry consolidation, e-commerce risks, information system security, internal control deficiencies, and legal proceedings[55](index=55&type=chunk)[58](index=58&type=chunk) [Overview](index=23&type=section&id=Overview) Provides a high-level description of Global Industrial Company as a value-added distributor of industrial equipment and supplies in North America - Global Industrial Company, through its subsidiaries, is a value-added distributor of industrial equipment and supplies in North America, accessing the market through branded e-commerce websites and relationship marketers[57](index=57&type=chunk) [Continuing Operations](index=24&type=section&id=Continuing%20Operations) Focuses on the company's MRO solutions for diverse customers and its product offerings, including recent acquisition to expand services - The company focuses on providing maintenance, repair, and operations (MRO) solutions to a diverse customer base, from small businesses to large enterprises and the public sector[59](index=59&type=chunk) - The company offers a broad range of products through its private brands (e.g., Global Industrial Exclusive Brands, Nexel, Paramount, Interion, Absocold) and well-known brands[59](index=59&type=chunk) - In April 2025, the company acquired an equipment service provider to expand its value-added services in certain key equipment categories[59](index=59&type=chunk) [Operating Conditions](index=24&type=section&id=Operating%20Conditions) Describes the highly fragmented and capital-intensive nature of the North American industrial products market and key components of operating expenses - The North American industrial products market is highly fragmented, with diverse distribution channels, and is capital-intensive, requiring significant warehousing costs[61](index=61&type=chunk) - The company supplements its product offerings through a combination of inventory and direct shipments[61](index=61&type=chunk) - Major components of the company's operating expenses include employee-related costs (salaries, commissions, bonuses, benefits, equity compensation) and marketing expenses[62](index=62&type=chunk) [Business Outlook](index=24&type=section&id=Business%20Outlook) Presents the company's expectations for future performance, including revenue growth, gross margin fluctuations, and SD&A expenses - The company's Q2 revenue was **$358.9 million**, up **3.2%** year-over-year, primarily driven by strong sales to its largest strategic customers[64](index=64&type=chunk) - Gross margin reached a quarterly high of **37.1%**, benefiting from positive price management, overall freight cost management, and the timing of cost flow-through for products purchased before new tariffs were implemented[64](index=64&type=chunk) - The company anticipates potential gross margin volatility as pre-tariff inventory depletes, possibly requiring further price increases to offset additional tariff costs[64](index=64&type=chunk) - Selling, distribution, and administrative expenses (SD&A) are expected to be impacted by Indoff business integration costs and IT control remediation, but the company will maintain strict cost controls[64](index=64&type=chunk) [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Identifies key accounting policies requiring significant management judgment, such as revenue recognition, inventory valuation, and intangible asset valuation - Critical accounting policies include revenue recognition, inventory valuation, and the valuation of intangible assets acquired through business combinations, all requiring significant management judgment[65](index=65&type=chunk) - These judgments are based on historical experience, industry trends, customer information, future economic forecasts, and external information[65](index=65&type=chunk) - There were no significant changes to the company's critical accounting policies during the second quarter ended June 30, 2025[66](index=66&type=chunk) [Highlights from Q2 2025 and Year to Date Q2 2025](index=26&type=section&id=Highlights%20from%20Q2%202025%20and%20Year%20to%20Date%20Q2%202025) Summarizes key financial achievements and performance metrics for the second quarter and first half of 2025 Q2 2025 Financial Highlights | Metric | 2025 Q2 | 2024 Q2 | Change Rate | | :--- | :--- | :--- | :--- | | Consolidated Sales | $358.9 million | $347.8 million | +3.2% | | Consolidated Gross Margin | 37.1% | 35.2% | +1.9% | | Operating Income from Continuing Operations | $33.5 million | $26.4 million | +26.9% | | Diluted Net Income per Share from Continuing Operations | $0.65 | $0.52 | +25.0% | H1 2025 Financial Highlights | Metric | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Consolidated Sales | $679.9 million | $671.2 million | +1.3% | | Consolidated Gross Margin | 36.0% | 34.8% | +1.2% | | Operating Income from Continuing Operations | $51.7 million | $43.8 million | +18.0% | | Diluted Net Income per Share from Continuing Operations | $0.99 | $0.86 | +15.1% | - Consolidated gross margin reached a quarterly high of **37.1%** in Q2 2025[72](index=72&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Provides a detailed analysis of the company's financial performance across various income statement line items [NET SALES](index=28&type=section&id=NET%20SALES) Analyzes the drivers of net sales growth, including contributions from strategic customers and geographic performance Net Sales (million USD) | Period | 2025 | 2024 | Change Rate | | :--- | :--- | :--- | :--- | | 2025 Q2 | 358.9 | 347.8 | 3.2% | | 2025 H1 | 679.9 | 671.2 | 1.3% | - Net sales growth was primarily driven by strong sales to the largest strategic customers, partially offset by reduced sales to smaller and transactional customers[77](index=77&type=chunk) - U.S. sales increased by **3.0%** in Q2, while Canadian sales grew by **6.4%** (or **7.4%** in local currency)[77](index=77&type=chunk) [GROSS MARGIN](index=28&type=section&id=GROSS%20MARGIN) Explains the factors contributing to changes in gross margin, such as pricing, inventory valuation, and freight management Gross Margin | Period | 2025 | 2024 | Change (basis points) | | :--- | :--- | :--- | :--- | | 2025 Q2 | 37.1% | 35.2% | +190 | | 2025 H1 | 36.0% | 34.8% | +120 | - The increase in gross margin was attributed to price capture, a temporary favorable impact from inventory valuation flowing through cost of sales, and overall freight management (including outbound and inbound logistics) and quality improvements reducing freight claims and customer returns[80](index=80&type=chunk) - The company anticipates future gross margin volatility due to inventory timing, inflationary pressures from increased tariff-related costs, and supply chain diversification efforts[81](index=81&type=chunk) [SELLING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES ("SD&A")](index=28&type=section&id=SELLING%2C%20DISTRIBUTION%20AND%20ADMINISTRATIVE%20EXPENSES%20%28%22SD%26A%22%29) Discusses the trends and components of SD&A expenses, including personnel costs and advertising SD&A as a Percentage of Net Sales | Period | 2025 | 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | 2025 Q2 | 27.7% | 27.6% | +0.1 | | 2025 H1 | 28.4% | 28.2% | +0.2 | - SD&A expenses as a percentage of net sales were largely flat year-over-year in Q2 2025, primarily due to strong general and discretionary cost controls and planned modest net advertising spending[82](index=82&type=chunk) - Cost increases included approximately **$4.4 million** in total payroll and related costs (with **$2.1 million** in variable compensation) and approximately **$2.4 million** in equity compensation expense[82](index=82&type=chunk) - In H1 2025, SD&A expenses increased primarily due to approximately **$7.0 million** in payroll and related costs (with **$3.0 million** in variable compensation) and approximately **$3.3 million** in equity compensation expense, partially offset by approximately **$1.8 million** in net advertising savings[83](index=83&type=chunk) [OPERATING MARGIN](index=28&type=section&id=OPERATING%20MARGIN) Examines the changes in operating margin, attributing them to improvements in gross margin and cost controls Operating Margin from Continuing Operations | Period | 2025 | 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | 2025 Q2 | 9.3% | 7.6% | +1.7 | | 2025 H1 | 7.6% | 6.5% | +1.1 | - Operating margin increased by **170 basis points** in Q2 2025 and **110 basis points** in H1 2025, primarily due to improved gross margin, continued strong general and discretionary cost controls, and lower marketing and selling expenses[84](index=84&type=chunk) [INTEREST AND OTHER (INCOME) EXPENSE, NET](index=29&type=section&id=INTEREST%20AND%20OTHER%20%28INCOME%29%20EXPENSE%2C%20NET) Explains the fluctuations in net interest and other income/expense, primarily due to foreign currency exchange rates Interest and Other (Income) Expense, Net (million USD) | Period | 2025 | 2024 | | :--- | :--- | :--- | | 2025 Q2 | (0.3) (Income) | 0.1 (Expense) | | 2025 H1 | (0.2) (Income) | 0.3 (Expense) | - Fluctuations in net interest and other (income) expense are primarily influenced by foreign currency exchange rate movements[85](index=85&type=chunk) [INCOME TAXES](index=29&type=section&id=INCOME%20TAXES) Details the income tax expense and effective tax rates, noting their relation to operations in various jurisdictions Income Tax Expense (million USD) | Period | 2025 | 2024 | | :--- | :--- | :--- | | 2025 Q2 | 8.7 | 6.1 | | 2025 H1 | 13.3 | 10.2 | Effective Income Tax Rate | Period | 2025 | 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | 2025 Q2 | 25.7% | 23.2% | +2.5 | | 2025 H1 | 25.6% | 23.4% | +2.2 | - Income tax expense is primarily related to operations in the **U.S., Canada, and India**, and certain U.S. state taxes[86](index=86&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=29&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) Assesses the company's financial health, cash flows, and ability to meet its short-term and long-term obligations Selected Liquidity Data (million USD) | Metric | June 30, 2025 | December 31, 2024 | Change (million USD) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 55.1 | 44.6 | 10.5 | | Accounts Receivable, Net | 156.8 | 126.5 | 30.3 | | Inventory | 171.2 | 167.1 | 4.1 | | Accounts Payable | 115.0 | 106.5 | 8.5 | | Working Capital | 206.7 | 184.2 | 22.5 | - The company's primary liquidity needs include supporting working capital, dividend payments, capital expenditures, inventory purchases, technology upgrades, sales and marketing investments, and acquisitions[88](index=88&type=chunk) - The company expects its existing cash, cash flows from operations, and credit facility to be sufficient to meet its working capital and other cash needs for at least the next twelve months[88](index=88&type=chunk) - Working capital increased by **$22.5 million**, primarily due to higher accounts receivable balances from increased sales, increased cash balances, and increased inventory balances, partially offset by increased accounts payable and accrued expenses[89](index=89&type=chunk) [Operating Activities](index=30&type=section&id=Operating%20Activities) Analyzes cash flows generated from the company's primary business operations, including changes in working capital Cash Flow from Operating Activities (million USD) | Period | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net Cash from Operating Activities for Continuing Operations | 35.1 | 25.0 | | Net Cash from Operating Activities for Discontinued Operations | 0.0 | 0.2 | - In H1 2025, net cash from operating activities for continuing operations was **$35.1 million**, an increase from **$25.0 million** in H1 2024, primarily due to increased net income and adjustments for non-cash items[90](index=90&type=chunk) - Changes in working capital accounts used **$11.3 million** in cash in 2025, primarily impacted by changes in accounts receivable, inventory, accounts payable, and prepaid expenses balances[90](index=90&type=chunk) [Investing Activities](index=30&type=section&id=Investing%20Activities) Details cash flows related to the acquisition and disposal of long-term assets, including business acquisitions Cash Flow from Investing Activities (million USD) | Period | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net Cash from Investing Activities | (5.6) | (2.2) | - Net cash used in investing activities in 2025 was **$5.6 million**, including **$4.0 million** for the acquisition of an equipment service provider and **$1.6 million** for warehouse machinery and equipment, computer equipment upgrades, and mold purchases[91](index=91&type=chunk) - Net cash used in investing activities in 2024 was **$2.2 million**, primarily for warehouse machinery and equipment, leasehold improvements, and computer equipment upgrades[91](index=91&type=chunk) [Financing Activities](index=30&type=section&id=Financing%20Activities) Explains cash flows from debt, equity, and dividend payments, reflecting how the company funds its operations Cash Flow from Financing Activities (million USD) | Period | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net Cash from Financing Activities | (18.9) | (18.5) | | Dividends Paid | (20.1) | (19.2) | | Proceeds from Issuance of Common Stock | 1.2 | 1.4 | | Proceeds from Issuance of Common Stock under Employee Stock Purchase Plan | 0.8 | 0.8 | - Net cash used in financing activities in 2025 was **$18.9 million**, primarily for quarterly dividend payments of **$0.26 per share**, totaling approximately **$20.1 million**[92](index=92&type=chunk) - The company maintains a **$125 million** secured revolving credit facility, with approximately **$122.1 million** available as of June 30, 2025, and is in compliance with all credit agreement covenants[93](index=93&type=chunk) [Material Cash Requirements](index=31&type=section&id=Material%20Cash%20Requirements) Outlines the company's significant future cash obligations, such as lease payments and other contractual commitments - As of June 30, 2025, the company has approximately **$129.6 million** in obligations under non-cancelable operating and finance leases, with terms extending through **2034**[99](index=99&type=chunk) - For the remainder of 2025, the company expects cash expenditures for operating leases to be approximately **$9.1 million**[99](index=99&type=chunk) - The company also has purchase and other obligations, primarily consisting of commitments under certain employment, consulting, and service agreements, and **$1.7 million** in outstanding letters of credit[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks primarily involve changes in interest rates and foreign currency exchange rates, with limited use of derivative financial instruments and no significant exposure to interest rate risk due to the absence of outstanding floating-rate debt - The company's market risks include changes in **U.S. and international interest rates** and **currency exchange rates** (primarily Canadian dollar to U.S. dollar)[101](index=101&type=chunk) - The company has **limited involvement** with derivative financial instruments, not for trading purposes, and had **no outstanding options or forward foreign exchange contracts** as of June 30, 2025[102](index=102&type=chunk) - The company's exposure to interest rate risk is primarily related to its floating-rate debt, but as of June 30, 2025, the company had **no outstanding floating-rate credit facility debt**, so changes in interest rates are not expected to materially affect its financial condition, results of operations, or cash flows[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management assessed disclosure controls and internal controls as ineffective due to material weaknesses in IT general controls, though financial statements are fairly presented, and remediation efforts are ongoing [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses in IT general controls, despite fair presentation of financial statements - As of June 30, 2025, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were **ineffective**[104](index=104&type=chunk) - This conclusion is due to material weaknesses in the design and operating effectiveness of information technology general controls (ITGCs), first identified on December 31, 2023, and extended to the control environment assessment of Indoff LLC[104](index=104&type=chunk) - Despite the material weaknesses, management believes the consolidated financial statements in this quarterly report and the 2024 annual report are **fairly presented in all material respects** regarding the company's financial position, results of operations, and cash flows[105](index=105&type=chunk) [Inherent Limitations of Internal Controls over Financial Reporting](index=32&type=section&id=Inherent%20Limitations%20of%20Internal%20Controls%20over%20Financial%20Reporting) Acknowledges that internal controls provide reasonable, not absolute, assurance against misstatements or fraud due to inherent limitations - The company's internal controls over financial reporting are designed to provide **reasonable assurance** regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles[106](index=106&type=chunk) - Management does not expect internal controls to prevent or detect all errors and fraud, as control systems have inherent limitations and can only provide reasonable, not absolute, assurance[107](index=107&type=chunk) [Management's Report on Internal Control Over Financial Reporting](index=32&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management reported ineffective internal controls over financial reporting due to material weaknesses in IT general controls for both Global Industrial and Indoff businesses - Management, including the CEO and CFO, concluded that the company's internal controls over financial reporting were **ineffective** as of June 30, 2025, due to material weaknesses in the design and operating effectiveness of information technology general controls (ITGCs) for both Global Industrial and Indoff businesses[108](index=108&type=chunk) - Consequently, automated and IT-dependent manual business process controls relying on IT systems were also deemed **ineffective**[108](index=108&type=chunk) - Despite these material weaknesses, management still believes the consolidated financial statements are **fairly presented in all material respects** regarding the company's financial position, results of operations, and cash flows[109](index=109&type=chunk) [Inadequate Information Technology General Controls and Business Process Controls](index=33&type=section&id=Inadequate%20Information%20Technology%20General%20Controls%20and%20Business%20Process%20Controls) Highlights previously disclosed material weaknesses in IT general controls affecting automated and IT-dependent manual business process controls - The company previously disclosed in its 2024 and 2023 annual reports material weaknesses in ITGCs in the design and operation of key accounting, reporting, and proprietary information technology systems, including those supporting the company's financial reporting processes[110](index=110&type=chunk) - These deficiencies rendered automated and IT-dependent manual business process controls relying on these systems **ineffective**[110](index=110&type=chunk) [Remediation of the Material Weaknesses in Internal Control Over Financial Reporting](index=33&type=section&id=Remediation%20of%20the%20Material%20Weaknesses%20in%20Internal%20Control%20Over%20Financial%20Reporting) Details the company's ongoing remediation efforts to strengthen IT general controls and the overall internal control environment - The company made **substantial progress** in remediating the design and operating effectiveness of its control environment in 2024, continuing into 2025[111](index=111&type=chunk) - The remediation plan includes engaging expert accounting consulting firms to assess control design, assist with ITGC documentation, remediation, and testing, training relevant personnel, implementing technical solutions to streamline control framework management and enhance user access controls, and adopting principles of limited access and segregation of duties[112](index=112&type=chunk)[116](index=116&type=chunk) - The company will continue to monitor the design and effectiveness of these processes, procedures, and controls and make further changes as needed, but a conclusion of full remediation can only be reached after relevant controls are **fully implemented and operating effectively for a sufficient period**[114](index=114&type=chunk) [Changes in Internal Control Over Financial Reporting](index=33&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) States that no significant changes in internal control over financial reporting occurred during the quarter, apart from ongoing remediation - Aside from the ongoing remediation plan mentioned above, there were no changes in the company's internal control over financial reporting that materially affected or are reasonably likely to materially affect its internal control during the quarter ended June 30, 2025[115](index=115&type=chunk) Part II Other Information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11 of the condensed consolidated financial statements for a detailed description of the company's legal proceedings, assessments, and handling of various claims - For information regarding the company's legal proceedings, please refer to **Note 11** of the condensed consolidated financial statements[117](index=117&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section references the company's 2024 Form 10-K for economic, industry, company, and business-related risk factors, noting no material changes in Q2 2025 - For information regarding economic, industry, company, and business-related risk factors, please refer to **Item 1A, "Risk Factors,"** in the company's 2024 Annual Report on Form 10-K[118](index=118&type=chunk) - There were **no material changes** to the company's risk factors during the second quarter ended June 30, 2025[119](index=119&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section states that no directors or officers adopted or terminated Rule 10b5-1(c) plans or engaged in "non-Rule 10b5-1 trading arrangements" during the quarter ended June 30, 2025 - During the three months ended June 30, 2025, no directors or executive officers of the company adopted or terminated any contract, instruction, or written plan for the purchase or sale of Global Industrial securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)[120](index=120&type=chunk) - No "non-Rule 10b5-1 trading arrangements" were entered into during this period[120](index=120&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley and XBRL-related interactive data files - Exhibits include **CEO and CFO certifications** filed under Sections 302 and 906 of the Sarbanes-Oxley Act[121](index=121&type=chunk) - Also included are the XBRL instance document, taxonomy extension schema document, calculation linkbase document, definition linkbase document, label linkbase document, and presentation linkbase document[121](index=121&type=chunk) - The Cover Page Interactive Data File (Inline XBRL format) is included as **Exhibit 101**[121](index=121&type=chunk) [Signatures](index=36&type=section&id=Signatures) This report was signed by authorized representatives, including the President and CEO and Senior Vice President and CFO, on July 29, 2025, as required by the Securities Exchange Act of 1934 - This report has been signed as required by the **Securities Exchange Act of 1934**[122](index=122&type=chunk) - Signatories include **Anesa Chaibi**, President and Chief Executive Officer, and **Thomas Clark**, Senior Vice President and Chief Financial Officer[124](index=124&type=chunk)[127](index=127&type=chunk) - The signing date is **July 29, 2025**[124](index=124&type=chunk)[127](index=127&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section provides an overview of Global Industrial Company's strong Q2 2025 performance, CEO commentary, and company profile [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Global Industrial Company reported strong second quarter 2025 results, achieving record profitability with sales increasing 3.2% to $358.9 million and operating income rising 27% to $33.5 million, resulting in a 9.3% operating margin. The Board also declared a $0.26 dividend per share - Global Industrial Company achieved **record profitability** in Q2 2025, with sales increasing **3.2%** and operating income up **27%**[1](index=1&type=chunk) Q2 2025 and Q2 2024 Financial Performance (in millions, except percentages and per share) | Metric | Q2 2025 | Q2 2024 | YoY Change | 6M 2025 | 6M 2024 | YoY Change | | :------------------------------------- | :-------- | :-------- | :--------- | :-------- | :-------- | :--------- | | Net sales | $358.9 | $347.8 | +3.2% | $679.9 | $671.2 | +1.3% | | Gross profit | $133.0 | $122.5 | +8.6% | $245.1 | $233.4 | +5.0% | | Gross margin | 37.1% | 35.2% | +1.9 pp | 36.0% | 34.8% | +1.2 pp | | Operating income | $33.5 | $26.4 | +26.9% | $51.7 | $43.8 | +18.0% | | Operating margin | 9.3% | 7.6% | +1.7 pp | 7.6% | 6.5% | +1.1 pp | | Net income | $25.1 | $20.2 | +24.3% | $38.6 | $33.3 | +15.9% | | Net income per diluted share | $0.65 | $0.52 | +25.0% | $0.99 | $0.86 | +15.1% | [CEO Commentary & Business Outlook](index=2&type=section&id=CEO%20Commentary%20%26%20Business%20Outlook) CEO Anesa Chaibi highlighted record Q2 profitability, driven by strategic accounts despite market disruption from tariffs. She noted a record gross margin of 37.1% and strong cash flow, emphasizing the company's solid foundation for growth and an intentional market approach to expand its addressable market. The company maintains a strong financial position with significant working capital and credit availability - Record Q2 profitability achieved despite market disruption and tariff environment, with performance driven by strategic accounts[5](index=5&type=chunk) - Company plans to adopt a more intentional approach to go-to-market strategy to accelerate performance and expand its addressable market[5](index=5&type=chunk) Financial Position as of June 30, 2025 (in millions) | Financial Metric | Amount | | :------------------------------------- | :------------------- | | Total Working Capital | $206.7 | | Cash and Cash Equivalents | $55.1 | | Excess Availability under Credit Facility | ~$120.4 | | Operating Cash Flow (Q2, continuing operations) | $31.8 | | Declared Cash Dividend per Share | $0.26 | [Company Overview](index=2&type=section&id=Company%20Overview) Global Industrial Company is a value-added distributor and source for industrial equipment and supplies, leveraging over 75 years of experience. It provides MRO solutions to various businesses and the public sector, focusing on a customer-centric strategy with both exclusive and nationally known brands - Global Industrial Company is a value-added distributor of industrial equipment and supplies, specializing in MRO solutions[7](index=7&type=chunk) - The company serves businesses from small to enterprise and the public sector, utilizing a customer-centric strategy with both Global Industrial Exclusive Brands and nationally known brands[7](index=7&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) This section presents a comprehensive breakdown of Global Industrial Company's financial performance for Q2 and year-to-date 2025 [Second Quarter 2025 Financial Highlights](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) For Q2 2025, Global Industrial Company reported a 3.2% increase in consolidated sales to $358.9 million. Gross margin reached a record 37.1%, and operating income from continuing operations surged 26.9% to a record $33.5 million. Net income per diluted share from continuing operations also saw a significant increase of 25.0% to $0.65 - Consolidated sales increased **3.2%** to **$358.9 million** compared to $347.8 million last year[8](index=8&type=chunk) - Consolidated gross margin increased to a quarterly record of **37.1%** from 35.2% last year[8](index=8&type=chunk) - Consolidated operating income from continuing operations increased **26.9%** to a quarterly record of **$33.5 million** compared to $26.4 million last year[8](index=8&type=chunk) - Net income per diluted share from continuing operations increased **25.0%** to **$0.65** compared to $0.52 last year[8](index=8&type=chunk) [Year-to-Date Q2 2025 Financial Highlights](index=2&type=section&id=Year-to-Date%20Q2%202025%20Financial%20Highlights) For the first six months of 2025, consolidated sales increased 1.3% to $679.9 million. Gross margin improved to 36.0%, and operating income from continuing operations grew 18.0% to $51.7 million. Net income per diluted share from continuing operations increased 15.1% to $0.99 - Consolidated sales increased **1.3%** to **$679.9 million** compared to $671.2 million last year[8](index=8&type=chunk) - Consolidated gross margin increased to **36.0%** compared to 34.8% last year[8](index=8&type=chunk) - Consolidated operating income from continuing operations increased **18.0%** to **$51.7 million** compared to $43.8 million last year[8](index=8&type=chunk) - Net income per diluted share from continuing operations increased **15.1%** to **$0.99** compared to $0.86 last year[8](index=8&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the company's financial statements, including statements of operations, balance sheets, and cash flows [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) The Condensed Consolidated Statements of Operations detail the company's financial performance for the second quarter and six months ended June 30, 2025 and 2024. Key figures include net sales, cost of sales, gross profit, operating income, and net income per share for both continuing and discontinued operations Condensed Consolidated Statements of Operations (in millions, except per share) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------------------------- | :------ | :------ | :------ | :------ | | Net sales | $358.9 | $347.8 | $679.9 | $671.2 | | Cost of sales | $225.9 | $225.3 | $434.8 | $437.8 | | Gross profit | $133.0 | $122.5 | $245.1 | $233.4 | | Gross margin | 37.1% | 35.2% | 36.0% | 34.8% | | Selling, distribution & admin expenses | $99.5 | $96.1 | $193.4 | $189.6 | | Operating income from continuing ops | $33.5 | $26.4 | $51.7 | $43.8 | | Operating margin | 9.3% | 7.6% | 7.6% | 6.5% | | Income from continuing ops before taxes | $33.8 | $26.3 | $51.9 | $43.5 | | Provision for income taxes | $8.7 | $6.1 | $13.3 | $10.2 | | Net income from continuing ops | $25.1 | $20.2 | $38.6 | $33.3 | | Net income from discontinued ops | $0.0 | $0.1 | $0.1 | $0.2 | | Net income | $25.1 | $20.3 | $38.7 | $33.5 | | Diluted EPS from continuing ops | $0.65 | $0.52 | $0.99 | $0.86 | | Diluted EPS from discontinued ops | $0.00 | $0.00 | $0.00 | $0.01 | | Diluted EPS | $0.65 | $0.52 | $0.99 | $0.87 | | Diluted shares outstanding (millions) | 38.4 | 38.4 | 38.4 | 38.4 | [Balance Sheets](index=5&type=section&id=Balance%20Sheets) The Condensed Consolidated Balance Sheets present the company's financial position as of June 30, 2025, compared to December 31, 2024. Total assets increased to $586.5 million, driven by growth in current assets, operating lease right-of-use assets, and goodwill. Shareholders' equity also increased to $305.2 million Condensed Consolidated Balance Sheets (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :-------------- | :---------------- | | **Assets:** | | | | Cash and cash equivalents | $55.1 | $44.6 | | Accounts receivable, net | $156.8 | $126.5 | | Inventories | $171.2 | $167.1 | | Total current assets | $394.0 | $352.6 | | Property, plant and equipment, net | $19.4 | $19.1 | | Operating lease right-of-use assets | $96.2 | $72.7 | | Goodwill and intangibles | $65.9 | $65.7 | | Total assets | $586.5 | $520.7 | | **Liabilities & Equity:** | | | | Accounts payable and accrued expenses | $172.4 | $154.3 | | Total current liabilities | $187.3 | $168.4 | | Operating lease liabilities (non-current) | $92.1 | $69.0 | | Total liabilities | $281.3 | $239.6 | | Shareholders' equity | $305.2 | $281.1 | | Total liabilities and shareholders' equity | $586.5 | $520.7 | [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025, show net cash provided by operating activities from continuing operations of $35.1 million. Investing activities used $5.6 million, primarily due to an acquisition, while financing activities used $18.9 million, mainly for dividends. The net effect was a $10.5 million increase in cash, bringing the period-end balance to $55.1 million Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | 6M 2025 | 6M 2024 | | :------------------------------------- | :------ | :------ | | Net income from continuing operations | $38.6 | $33.3 | | Net cash provided by operating activities from continuing operations | $35.1 | $25.0 | | Net cash provided by operating activities | $35.1 | $25.2 | | Purchases of property, plant and equipment | $(1.6) | $(2.2) | | Acquisition | $(4.0) | $0.0 | | Net cash used in investing activities | $(5.6) | $(2.2) | | Dividends paid | $(20.1) | $(19.2) | | Net cash used in financing activities | $(18.9) | $(18.5) | | Net increase in cash | $10.5 | $4.4 | | Cash and cash equivalents – End of period | $55.1 | $38.8 | [Supplemental Information](index=2&type=section&id=Supplemental%20Information) This section provides details on the upcoming earnings call, forward-looking statements disclaimer, and investor contact information [Earnings Conference Call](index=2&type=section&id=Earnings%20Conference%20Call) Global Industrial Company will host a conference call and Q&A session on July 29, 2025, at 5:00 p.m. Eastern Time to discuss its second quarter 2025 results. A live webcast and archived recording will be available on the company's investor relations website - Conference call to discuss Q2 2025 results scheduled for July 29, 2025, at 5:00 p.m. ET[6](index=6&type=chunk) - Live webcast and archived recording available on the Company's investor relations website: https://investors.globalindustrial.com[6](index=6&type=chunk) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section serves as a standard disclaimer for forward-looking statements, indicating that such statements are based on management's estimates and are subject to various risks and uncertainties. Investors are cautioned against undue reliance, and the company disclaims any obligation to update these statements unless legally required - Press release contains forward-looking statements based on management's estimates, assumptions, and projections[9](index=9&type=chunk) - Statements are subject to risks and uncertainties detailed in SEC filings, and investors should not place undue reliance on them[9](index=9&type=chunk) - The company undertakes no obligation to publicly release revisions to these statements unless required by applicable law[9](index=9&type=chunk) [Investor and Media Contacts](index=3&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor and media inquiries is provided, including names, organization, phone number, and email addresses for The Plunkett Group - Investor/Media Contacts: Mike Smargiassi / Collin Dreizen at The Plunkett Group[10](index=10&type=chunk) - Contact details include phone: 212-739-6729 and emails: mike@theplunkettgroup.com / collin@theplunkettgroup.com[10](index=10&type=chunk)

Summary of Global Industrial Company (GIC) FY Conference Call Company Overview - **Company Name**: Global Industrial Company (GIC) - **Location**: Port Washington, New York - **Established**: Over 76 years ago - **Revenue**: $1.3 billion in 2024 - **Distribution Centers**: 7 (5 in the U.S. and 2 in Canada) [4][5] Core Business and Market Position - **Market Focus**: Specializes in the big and bulky segment of industrial distribution, primarily through less-than-truckload shipments and third-party carriers [4][5] - **E-commerce**: Over 60% of transactions are online, with more than 40% of revenue tied to exclusive brands [5][6] - **Customer Base**: Over 400,000 customers with less than 2% concentration from any single customer, indicating a broad market reach [8] Product Lines and Innovations - **Product Categories**: Includes new entries into healthcare and hospitality, with a focus on private label brands that represent approximately 40% of revenue [9][10] - **Growth Rate**: Achieved a compound annual growth rate (CAGR) of over 16% for private label brands over the last five years [11] - **Product Examples**: Portable power stations, bolted teardrop pallet racking, and digital wood laminate lockers [12] Financial Performance - **Revenue Growth**: Consistent growth with a 6.3% CAGR on the top line over the last five years [13] - **Operating Margin**: Gross margins in the mid-thirties, with a notable peak in 2022 due to favorable inventory positioning [14] - **Dividend Policy**: Quarterly dividends since 2016 with a CAGR of 13.1% from 2018 to 2025, totaling $650 million in dividends paid since January 2018 [23] Strategic Initiatives - **Customer-Centric Strategy**: Focus on operational excellence and tailored value propositions across various industry verticals [6][19] - **Digital Transformation**: Emphasis on enhancing e-commerce capabilities and utilizing AI and data analytics for real-time market responsiveness [15][16] - **Market Expansion**: Plans to extend beyond current focus areas and capture national accounts through increased investment in outside sales representatives [32] Supply Chain and Tariff Management - **Sourcing**: Significant portion of cost of goods sold (COGS) sourced from Southeast Asia, with ongoing efforts to diversify supply chains to mitigate tariff impacts [35][36] - **Tariff Strategy**: Proactive measures to negotiate supplier costs and maintain pricing power amidst fluctuating tariffs [38][39] Competitive Landscape - **Comparison with Competitors**: Differentiation from larger players like Grainger and Fastenal through a focus on small to medium-sized business (SMB) customers and a robust e-commerce platform [29][30] - **E-commerce Advantage**: Long-standing expertise in e-commerce, with a commitment to omnichannel approaches that enhance customer connectivity [42][43] Future Outlook - **Growth Opportunities**: Identifying potential for product assortment expansion and operational efficiencies to drive future growth [54] - **Investment Focus**: Plans to reinvest in e-commerce capabilities and explore strategic mergers and acquisitions to enhance product offerings [23][24] This summary encapsulates the key points discussed during the Global Industrial Company FY Conference Call, highlighting the company's market position, financial performance, strategic initiatives, and future outlook.

Core Viewpoint - Global Industrial (GIC) is currently viewed as a better value opportunity compared to SiteOne Landscape (SITE) based on various financial metrics and analyst outlooks [1]. Valuation Metrics - GIC has a forward P/E ratio of 15.19, significantly lower than SITE's forward P/E of 37.36, indicating that GIC may be undervalued [5]. - The PEG ratio for GIC is 0.95, while SITE's PEG ratio is 1.97, suggesting that GIC offers better value relative to its expected earnings growth [5]. - GIC's P/B ratio stands at 3.41, compared to SITE's P/B of 3.49, further supporting GIC's valuation advantage [6]. Analyst Outlook - GIC holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision activity, while SITE has a Zacks Rank of 4 (Sell), reflecting a less favorable analyst outlook [3]. - GIC's Value grade is B, whereas SITE's Value grade is D, highlighting GIC's stronger position in terms of value investing metrics [6].

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 ...

Group 1 - The global industrial tariffs implemented in April have disrupted the business of Global Industrial Company [1] - These tariffs have also caused disturbances throughout the entire supply chain and affected the company's customers [1]

[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 |