Financial Performance - Consolidated sales increased 16.8% to $318.5 million for Q2 2022 compared to $272.6 million last year[58] - Consolidated gross margin declined to 35.5% for Q2 2022 compared to 36.0% last year[66] - Consolidated operating income from continuing operations increased 23.5% to $30.5 million for Q2 2022 compared to $24.7 million last year[66] - Net income per diluted share from continuing operations increased 7.3% to $0.59 for Q2 2022 compared to $0.55 last year[66] - Consolidated sales increased 15.9% to $607.1 million for the six months ended June 30, 2022 compared to $523.7 million last year[66] - Consolidated gross margin increased to 36.4% for the six months ended June 30, 2022 compared to 33.5% last year[66] - Consolidated operating income from continuing operations increased 91.7% to $60.0 million for the six months ended June 30, 2022 compared to $31.3 million last year[66] - Net income per diluted share from continuing operations increased 65.7% to $1.16 for the six months ended June 30, 2022 compared to $0.70 last year[66] - Consolidated net sales increased by 16.8% to $318.5 million for the three months ended June 30, 2022, and by 15.9% to $607.1 million for the six months ended June 30, 2022, compared to the same periods in 2021[73] - Consolidated gross profit rose by 15.3% to $113.0 million for the second quarter and by 26.0% to $220.8 million for the first half of 2022[73] - Operating income from continuing operations increased by 23.5% to $30.5 million for the three months and by 91.7% to $60.0 million for the six months ended June 30, 2022[73] - Net income from continuing operations was $22.6 million for the second quarter, a 7.1% increase, and $44.4 million for the first half, a 66.2% increase compared to 2021[73] - Average daily sales increased by 16.9% during the second quarter and by 15.9% for the six months ended June 30, 2022[73] Cost and Expenses - Selling, distribution, and administrative (SD&A) costs as a percentage of net sales decreased by 100 basis points for both the three and six months ended June 30, 2022, compared to the same periods in 2021[77] - The effective income tax rate for the three months ended June 30, 2022, was 25.2%, an increase of 11.0 percentage points compared to the same period in 2021[73] Cash Flow and Liquidity - Cash and cash equivalents increased by $8.1 million to $23.5 million as of June 30, 2022, compared to $15.4 million at the end of 2021[84] - Working capital increased by $31.2 million, primarily due to increased inventory balances and accounts receivable[86] - Net cash used in operating activities from continuing operations was $2.1 million in 2022, a decrease from $20.5 million provided in 2021, primarily due to a $51.4 million cash usage in working capital compared to $7.9 million in 2021[87] - Cash generated from net income adjusted by other non-cash items provided $49.3 million in 2022, up from $28.4 million in 2021, attributed to higher net income for the six months ended June 30, 2022[87] - Net cash used in investing activities totaled $2.1 million in 2022, consistent with 2021, primarily for warehouse machinery and equipment related to the new Canadian distribution center[88] - Net cash provided by financing activities was $12.5 million in 2022, mainly from short-term borrowings of $25.5 million, with dividends paid totaling approximately $13.9 million[89][90] - The company maintains a $75.0 million secured revolving credit facility, with total outstanding borrowings of $30.0 million and total excess availability of $41.3 million as of June 30, 2022[91] - As of June 30, 2022, the company had over $59 million in liquidity (cash and undrawn line of credit) in the U.S.[96] Capital Expenditures and Obligations - Anticipated capital expenditures for 2022 are in the range of $7.0 to $9.0 million, with no contractual commitments at this time[94] - The company is obligated for approximately $107.8 million under non-cancelable operating leases, with remaining cash expenditures anticipated at $7.8 million for 2022[97] Strategic Initiatives - The company continues to pursue acquisitions and strategic transactions to expand or complement its business[51] - The company is experiencing strong customer demand across all product categories, particularly in managed sales channels[58] Risk Management - The company had no outstanding foreign currency options or forward exchange contracts as of June 30, 2022, to limit currency fluctuations[100] - A hypothetical one percentage point change in average interest rates is not expected to materially affect the company's financial position or cash flows[101]

Financial Data and Key Metrics Changes - The company reported record revenue of $288 million for Q1 2022, an increase of nearly 15% compared to the prior year [6][16] - Gross margin reached a record 37.4%, improving by 660 basis points year-over-year [16][17] - Operating income was over $29 million, with an operating margin of 10.2%, marking the third consecutive quarter of double-digit operating margins [6][20] Business Line Data and Key Metrics Changes - U.S. revenue increased over 14%, while Canadian revenue improved nearly 22% in local currency [16] - The company is focusing on enhancing service and customer experience through investments in sales, marketing, and digital technology [8][9] Market Data and Key Metrics Changes - The company has seen strong sales trends throughout the quarter, with open orders increasing modestly due to customer demand [16] - Inventory levels increased by approximately 50% year-over-year, attributed to both price increases and the need for higher safety stock levels due to longer lead times [28][30] Company Strategy and Development Direction - The company is committed to digital leadership, with plans to launch a new digital e-commerce platform to enhance customer engagement [9] - The ACE strategy is being implemented to strengthen customer-focused culture and drive top-line growth [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the robust demand in the market and the company's positioning for long-term growth [14][27] - The company is closely monitoring supply chain challenges, particularly related to the impact of lockdowns in China, but has not seen material impacts so far [41] Other Important Information - The company announced a quarterly dividend of $0.18 per share and anticipates continuing regular dividends in the future [22] - A new state-of-the-art distribution center in the Greater Toronto area is set to begin operations in the fall to support growth in Canada [11][12] Q&A Session Summary Question: Was any of the first quarter sales growth a catch-up from constrained periods last year? - Management indicated that current sales demand is driven by overall business demand and expansion of the sales organization, with open orders remaining stable [25][26] Question: Is robust demand continuing into April and early May? - Management noted that they continue to see robust demand in the market, expressing confidence in future performance [27] Question: Can you break down the inventory balance increase? - The increase in inventory is attributed to higher prices and the need for safety stock due to longer lead times, with a focus on ensuring product availability for customers [28][30] Question: What drove the gross margin performance in the quarter? - The gross margin improvement was primarily driven by normalized freight margins, increased sales of higher-margin private brands, and effective pricing strategies [32][34] Question: Will SG&A expenses continue to leverage in the second quarter and beyond? - Management expects to continue leveraging SG&A expenses while investing in growth opportunities, particularly in the Canadian market [36][37] Question: How has the company been impacted by lockdowns in China? - Management reported no material impact from the lockdowns but is closely monitoring the situation [41] Question: Is the company considering acquisitions? - Management is open to strategic acquisitions that can drive category growth while focusing on organic growth strategies [42][43]

Financial Data and Key Metrics Changes - Revenue for Q4 2021 was $262 million, a decline of 4.3% compared to Q4 2020, primarily due to five fewer selling days in the current quarter [16] - Full-year revenue grew to $1.06 billion, with average daily sales improving by 5% and a two-year compounded annual growth rate of 6% [4] - Gross profit for Q4 was $97 million, up 4.2% from the previous year, with a record gross margin of 37%, an improvement of 300 basis points year-over-year [19][20] - Operating income for Q4 was $26.1 million, a 23.7% improvement from the prior year, with an operating margin of 10% [23] Business Line Data and Key Metrics Changes - Managed sales channels drove growth, with e-commerce orders comprising 56% of total transactions in 2021, an increase of 800 basis points since 2019 [18] - Private brand offerings increased to over 45% of total sales for the full year, reflecting strong growth in core product lines [17] Market Data and Key Metrics Changes - U.S. average daily sales increased by 3.8%, while Canadian average daily sales declined by 3.3% in local currency, impacted by strong PPE sales in the previous year [16] - The two-year growth improved from 8% in Q1 to 18% in Q4, indicating a positive trend in market performance [17] Company Strategy and Development Direction - The company is focused on expanding market share through investments in sales, marketing, private brand, digital transformation, and distribution [10][15] - Plans to enhance public sector sales and develop strategic account management for larger accounts were outlined [10][11] - A new website platform is being developed to improve customer experience across digital channels [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about normalizing supply chain challenges in 2022, while acknowledging ongoing inflationary pressures [6][14] - The company aims to continue innovating and strengthening its competitive position despite external challenges [14][15] Other Important Information - A special dividend of $1 per share was paid in December, and the quarterly recurring dividend was increased for the sixth consecutive year, now at $0.18 per share [7][27] - The company maintains a strong balance sheet with a current ratio of 1.7 to 1, over $15 million in cash, and approximately $4.5 million in debt [26] Q&A Session Summary Question: Impact of elevated open orders on top line - Management noted that open orders have doubled since the beginning of 2021 but have flattened in recent months, indicating potential for improved sales as supply chain conditions normalize [30][31] Question: Demand perspective in Q1 - Management reported a healthy demand environment, particularly for core products, with expectations for continued strength in the market [32][33] Question: Inventory increase and competitive advantage - The increase in inventory value was attributed to inflation and extended lead times, which provide a competitive advantage through better stock availability [34][36] Question: Total addressable market in public sector - The public sector is described as a massive and fragmented market, with the company making investments to scale faster in this area [38] Question: Future gross and operating margins - Management expects to maintain and potentially improve gross margins through private label strategies and pricing intelligence [39][42] Question: Private label penetration goals - There is no specific top-end goal for private label penetration, but management aims to increase it incrementally across various categories [44] Question: Evaluation of acquisitions - The company continues to monitor the market for strategic acquisition opportunities, although no acquisitions have been made recently [46][47]

Global Industrial Company (NYSE:GIC) Q3 2021 Earnings Conference Call November 2, 2021 5:00 PM ET Company Participants Mike Smargiassi – Investor Relations Barry Litwin – Chief Executive Officer Tex Clark – Senior Vice President and Chief Financial Officer Conference Call Participants Ryan Merkel – William Blair Operator Good afternoon, everyone and welcome to Global Industrial’s Third Quarter 2021 Earnings Conference Call. [Operator Instructions] We also note today’s event is being recorded. At this time, ...

Financial Data and Key Metrics Changes - First quarter revenue increased by 10.5% to $251 million, with average daily sales growing almost 9% [6][17] - Gross profit for the quarter was $77.3 million, an increase of approximately 1% from last year, while gross margin decreased by 290 basis points to 30.8% [20][21] - Operating income from continuing operations was $6.6 million, with an operating margin decline of 250 basis points from the previous year [27] - The company maintained a strong liquid balance sheet with a current ratio of 1.5:1 and approximately $36.9 million in cash [28][29] Business Line Data and Key Metrics Changes - Growth was driven by core product lines such as storage and shelving, material handling, HVAC, and outdoor equipment [19][43] - Consumable products related to the pandemic, including PPE and sanitizing supplies, accounted for 5.6% of sales, down from 7.5% in the same period last year [19][44] - Private label offerings increased as a percentage of total sales, contributing positively to gross margins [21] Market Data and Key Metrics Changes - U.S. average daily sales growth was 6.8%, while Canadian average daily sales growth was 38.6% in local currency [17] - E-commerce accounted for more than 56% of total transaction count, up almost 500 basis points from the prior year [18][10] Company Strategy and Development Direction - The company is focused on executing its ACE strategy and making strategic investments to enhance customer experience and drive growth [9][14] - There is an ongoing digital transformation to capitalize on the shift in B2B e-commerce adoption [10] - The company is expanding its line of global industrial branded products, which serves as a significant differentiator in the marketplace [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment due to signs of an improving economy, despite disappointment in Q1 profitability results [7][6] - The company anticipates that many drivers of gross margin erosion are temporary and will ease as the year progresses [7][38] - Management expects sequential improvement in gross margins in the second quarter, driven by optimization of logistics and easing freight pressures [24][38] Other Important Information - The company declared a quarterly dividend of $0.16 per share and anticipates continuing regular quarterly dividends in the future [29] - Capital expenditures for the first quarter were $0.9 million, with expectations of total 2021 capital expenditures in the range of $5 million to $7 million [28] Q&A Session Summary Question: Impact of lower gross margin drivers - Management noted that freight margin was a significant negative impact, with costs related to the new logistics provider and elevated LTL costs affecting performance [33][34] Question: Gross margins if one-time items are added back - Management identified a 110 basis point impact from the inventory adjustment, indicating that gross margins would have been higher without this write-down [35] Question: Revenue growth from core non-pandemic merchandise - Management confirmed that core product growth was strong, particularly in storage and shelving, material handling, HVAC, and outdoor supplies, with a decline in PPE sales [42][44] Question: Transition costs to the new logistics provider - Management acknowledged that transitional costs would continue into the second quarter but at a muted level compared to the first quarter [46][47] Question: Current inventory position regarding pandemic-related products - Management stated that the write-down was based on net realizable value and that they took appropriate reserves for inventory [49][50] Question: Tax rate expectations for the rest of the year - Management indicated that the tax rate came in lower than expected due to stock option expense benefits and Canadian business performance, with a long-term model of 25% to 26% [56][57]

Financial Data and Key Metrics Changes - Revenue for Q4 2020 increased by 23% to $274 million, with full-year revenue exceeding $1 billion, marking an 8% increase year-over-year [7][9] - Operating income for Q4 improved by 46% year-over-year, reaching $21.1 million, with operating margin expanding by 120 basis points to 7.7% [8][27] - Gross profit for Q4 was $93.1 million, a 24.1% increase from the previous year, with gross margin at 34%, up 20 basis points [24] Business Line Data and Key Metrics Changes - Growth was primarily driven by the Global Industrial branded product offering and pandemic-related supplies, with consumable products making up approximately 9% of sales in Q4, up from 2% in the same period last year [8][22] - E-commerce accounted for over 55% of transaction count for the second consecutive quarter, with double-digit growth across all sales channels [20] Market Data and Key Metrics Changes - U.S. average daily sales growth was 14.2%, while Canada saw a significant increase of 43.4% in local currency [19] - New customer acquisition remained strong, with the managed sales team expanding average order value [21] Company Strategy and Development Direction - The company is focused on executing its multi-year ACE strategy, which includes investments in automation, technology, and enhancing the e-commerce shopping experience [12][13] - Continued investment in private label offerings is expected to differentiate the value proposition and enhance margin profiles [14] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for 2021, citing the commencement of COVID vaccinations and signs of improving economic demand [17] - The company anticipates continued above-market growth rates and believes PPE will remain a permanent part of the sales mix [36] Other Important Information - The Board of Directors increased the quarterly dividend by 14% to $0.16 per share, marking the fifth increase in five years [9][30] - The company maintains a strong balance sheet with zero debt and significant liquidity, allowing for strategic flexibility [29] Q&A Session Summary Question: Sales outlook for 2021 and impact of PPE comparisons - Management believes PPE will remain a permanent part of the sales mix and expects continued above-market growth rates [35][36] Question: Plans for price increases amid inflation - Management noted supplier price pressures and indicated that they will manage pricing to remain competitive while leveraging private label offerings [37] Question: Customer acquisition and retention metrics - Management highlighted improvements in retention rates and ongoing investments in digital marketing strategies to enhance customer acquisition [38][39] Question: Breakdown of average daily sales growth between AOV and transaction volume - The growth rate was primarily driven by volume, with a small increase in average order value [46][47] Question: Inventory position and adequacy for 2021 - Management feels confident in their inventory position to support projected revenue for the year, despite challenges in the import market [48][49] Question: Long-term operating margin goals - Management remains committed to a long-term operating margin goal of over 10%, supported by private label expansion and operational excellence initiatives [52]

Financial Data and Key Metrics Changes - Revenue increased by 17% to over $285 million, with operating income improving by 70% year-over-year to more than $31 million [5][16] - Earnings per share (EPS) rose over 77% year-over-year [5] - Free cash flow generated was robust at over $25 million, ending the quarter with $78 million in cash [6][24] Business Line Data and Key Metrics Changes - E-commerce accounted for more than 55% of transaction count, with double-digit growth across all sales channels [17] - Consumable products related to pandemic response made up approximately 11% of sales, compared to about 2% in the same period last year [18] - Gross profit for the quarter was $102.3 million, a 21.2% increase from last year, with gross margin at 35.8%, up 120 basis points [19] Market Data and Key Metrics Changes - U.S. revenue grew by 16.1%, while Canada experienced a 40% growth in local currency [16] - The company noted stable growth in the mid-teens for October following the third quarter [16] Company Strategy and Development Direction - The multi-year strategy introduced in 2019 focuses on enhancing customer experience and operational excellence [7][10] - The "Ready. Set." campaign was launched to empower customers with pandemic management solutions [12] - Continued investments in digital and marketing capabilities are aimed at strengthening the sales organization [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to thrive despite economic disruptions caused by the pandemic [13] - The focus on customer-centric strategies is expected to drive growth and improve sales performance [13][14] Other Important Information - Selling, distribution, and administrative spending was $70.9 million, representing 24.8% of net sales, a reduction of 250 basis points from last year [21] - The company has a strong balance sheet with zero debt and significant liquidity [24][25] Summary of Q&A Session - No live Q&A session was hosted during the call, and participants were directed to contact The Plunkett Group or Systemax for any inquiries [2][26]

Systemax Inc. (SYX) Q2 2020 Results Conference Call July 28, 2020 5:00 PM ET Company Participants Mike Smargiassi - IR, The Plunkett Group Barry Litwin - CEO Tex Clark - SVP and CFO Conference Call Participants Operator Good afternoon, ladies and gentlemen, and welcome to Systemax Inc.’s Second Quarter 2020 Earnings Call. At this time, I would like to turn the call over to Mike Smargiassi of The Plunkett Group. Please go ahead. Mike Smargiassi Thank you, Grant, and welcome to the Systemax second quarter 202 ...

Financial Performance - Consolidated sales decreased 2.1% to $227.3 million for the three-month period ended March 31, 2020, compared to $232.2 million in 2019[70] - Consolidated operating income declined 12.9% to $11.5 million for the three-month period ended March 31, 2020, compared to $13.2 million in 2019[70] - Net income per diluted share from continuing operations decreased 19.2% to $0.21 for the three-month period ended March 31, 2020, compared to 2019[70] - Consolidated gross profit was $76.7 million for the three-month period ended March 31, 2020, down from $80.3 million in 2019, reflecting a 4.5% decline[71] - Consolidated gross margin decreased to 33.7% for the three-month period ended March 31, 2020, compared to 34.6% in 2019[71] - Net margin from continuing operations decreased to 3.7% for the three-month period ended March 31, 2020, compared to 4.3% in 2019[71] - Average daily sales declined by 2.1% from $3.63 million in Q1 2019 to $3.56 million in Q1 2020[78] - Operating income fell by 12.9% to $11.5 million, with an operating margin decrease of 60 basis points to 5.1%[86] - Gross margin declined by 90 basis points due to a shift in product mix towards lower-margin safety and PPE products[82] Costs and Expenses - Consolidated selling, distribution, and administrative (SD&A) costs were $65.2 million for the three-month period ended March 31, 2020, down from $67.1 million in 2019, a decrease of 2.8%[71] - The effective income tax rate increased to 26.5% for the three-month period ended March 31, 2020, compared to 24.2% in 2019[71] Cash Flow and Liquidity - Cash and cash equivalents decreased by $33.1 million to $64.1 million as of March 31, 2020[91] - Net cash provided by operating activities from continuing operations was $13.7 million, down from $23.8 million in Q1 2019[92] - Working capital decreased by $36.6 million, primarily due to reduced cash balances after a $43.3 million dividend payment[93] - The company maintains a $75.0 million secured revolving credit facility, with total availability of $73.0 million as of March 31, 2020[98] - As of March 31, 2020, the company had over $131 million in liquidity, which includes cash and undrawn lines of credit, sufficient to fund its U.S. operations and capital needs[104] - The company believes that its cash balances, future cash flows from operations, and availability under credit facilities will be sufficient to fund its working capital and other cash requirements for the next twelve months[103] Backlog and Supply Chain - The backlog of orders increased substantially due to constrained availability of COVID-19 response items, leading to low double-digit revenue declines during the closing weeks of the quarter[63] - The company anticipates being able to ship a portion of the backlog in the second quarter as visibility into the supply chain and product lead times has improved[63] - The company anticipates shipping a portion of its backlog in Q2 2020 as supply chain visibility improves, with a backlog increase due to COVID-19[78] Legal and Risk Management - The company does not expect that the outcome of ongoing legal proceedings will have a material adverse effect on its financial position or results of operations[116] - The company has established accruals for various lawsuits and claims based on estimates of the most likely outcomes as of March 31, 2020[116] - The company has limited involvement with derivative financial instruments and had no outstanding foreign currency options or forward exchange contracts as of March 31, 2020[107] Capital Expenditures - The company anticipates capital expenditures in the range of $3.0 to $5.0 million for 2020, although it is not contractually committed to these expenditures at this time[102] Interest Rate and Financial Reporting - The company has no outstanding balances under its variable rate credit facility as of March 31, 2020, indicating minimal exposure to interest rate risk[108] - The company has not created any off-balance sheet entities for raising capital or incurring debt, ensuring transparency in its financial reporting[105] - The company maintains its cash and cash equivalents in money market funds or equivalent with maturities of less than three months, minimizing interest rate risk exposure[104] - Cash balances held in foreign subsidiaries totaled approximately $3.8 million as of March 31, 2020, held in local country banks[104]

Systemax Inc. (SYX) Q1 2020 Earnings Conference Call April 28, 2020 5:00 PM ET Company Participants Mike Smargiassi - The Plunkett Group Barry Litwin - CEO Tex Clark - VP and CFO Conference Call Participants Operator Good afternoon, ladies and gentlemen, and welcome to Systemax Inc.'s First Quarter 2020 Earnings Call. At this time, I would like to turn the call over to Mike Smargiassi of The Plunkett Group. Please go ahead. Mike Smargiassi Thank you, Chris and welcome to the Systemax's First Quarter 2020 Ea ...