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Systemax(GIC) - 2025 Q2 - Quarterly Results
SystemaxSystemax(US:GIC)2025-07-29 20:56

Executive Summary This section provides an overview of Global Industrial Company's strong Q2 2025 performance, CEO commentary, and company profile Q2 2025 Performance Highlights 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 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 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 accounts5 - Company plans to adopt a more intentional approach to go-to-market strategy to accelerate performance and expand its addressable market5 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 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 solutions7 - 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 brands7 Detailed Financial Results 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 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 year8 - Consolidated gross margin increased to a quarterly record of 37.1% from 35.2% last year8 - Consolidated operating income from continuing operations increased 26.9% to a quarterly record of $33.5 million compared to $26.4 million last year8 - Net income per diluted share from continuing operations increased 25.0% to $0.65 compared to $0.52 last year8 Year-to-Date Q2 2025 Financial Highlights 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 year8 - Consolidated gross margin increased to 36.0% compared to 34.8% last year8 - Consolidated operating income from continuing operations increased 18.0% to $51.7 million compared to $43.8 million last year8 - Net income per diluted share from continuing operations increased 15.1% to $0.99 compared to $0.86 last year8 Condensed Consolidated Financial Statements This section provides the company's financial statements, including statements of operations, balance sheets, and cash flows Statements of Operations 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 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 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 This section provides details on the upcoming earnings call, forward-looking statements disclaimer, and investor contact information Earnings Conference Call 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. ET6 - 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 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 projections9 - Statements are subject to risks and uncertainties detailed in SEC filings, and investors should not place undue reliance on them9 - The company undertakes no obligation to publicly release revisions to these statements unless required by applicable law9 Investor and Media Contacts 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 Group10 - Contact details include phone: 212-739-6729 and emails: mike@theplunkettgroup.com / collin@theplunkettgroup.com10