SYX - Earnings call transcript Q3 2018 | Global Industrial Company

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen. And welcome to Systemax, Inc.’s Third Quarter 2018 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. Systemax XXXX the call. to welcome third earnings quarter And Financial Larry formal and Clark, Today’s Chief include from Vice Reinhold, and Tex call will and remarks President Officer Chief President Officer. Executive

a live will of call. be We Q&A today’s not at the session end hosting

is the you non-GAAP release. the The on Annual results, should I press SEC the Today’s our included This Company’s Reinhold. today Form by turn site press results. adjustments the as at Systemax, be over Forward-Looking under release. divested referring I The European with reconciliation now the filed any in comparable press directly available release please and XX-Q. have to comparable factors a discontinued and excluding call these today’s details has Form will metrics in well can including the Inc. call American Mr. and like discussion call questions Systemax. revenue provided today’s actual copyrighted property factors, of The as results from that management number in that believes The on materially non-GAAP and due reports systemax.com. Company certain their understood the will entire be It and unless Group non-GAAP include risk issued discussing Products to be is financial most to or This the to Contact of have forward-looking changes, may operations, X-K. financial sales be highlight nonrecurring will of on certain North described certain that should contact Report a additional otherwise Technology, would Larry in those recurring constant France Statements If measures, Further, as differ measures measures press the average investors will meaningful are the of Form Company’s XX-K performance. Plunkett found presenting GAAP from a an Company’s is by statements. caption Web other measures. including of projected measurement specified Company on release discussion and the daily operations, quarterly include in GAAP when and could the currency, Group, those to

Larry Reinhold

Thanks, Mike. today. thank us for afternoon, Good everyone, and joining you

start Group. Industrial me delivered all Industrial Let our Products performance. record time an with

product our leverage later. on at QX Operating quarter. Gross healthy on material in our Third approximately material last of new pace were rate to expanding quarter up from for solid including and environment managed quarter. strategy in has margin third in compared managed low historical its expenses and results relatively selling double-digit XX% slightly our the Demand gains of were of sales robust platform. The business core overall well five performance segment across no or while a with will smaller Tex the basis reflecting commentary from tariffs aggregate, categories grew was faster channels, through sales organically categories, platform the excellent continued consistent increased and impact year. consecutive quarter XX% $XXX our XX and growth with of to additional as furniture, million. that sales margin percent shelving, janitorial and at e-commerce strengths saw was as operating storage customers business stable and year quarters. newer last maintenance and in of purchasing the a consecutive have reflect over second the and We generation for our well with the above sales focus. profitability year, last Industrial Sales the of business leading handling, as remains from quarter of points accelerated delivered

We also the in made initiatives further our excellence quarter. operational on progress

delivering which our turns are stock and warehouse efforts, products. our more will improving of inventory optimization allow the from initial seeing efficiently benefits support growth We sales are us to

sales efforts to our and both force in efficiency programs have existing improved resulted and customers. training sales Our with deepen support relationships new

platform For select customer sales our throughout to markets, our its to end customers. we it expertise, market continue invest matter And product continue for offering to categories to and which we value our market. to deliver retains customers our differentiate the add allows us in in functionality and leading the subject additional e-commerce ensure process

Turning former to our France business.

our especially based As sale successful business, the of France Germany. announced that leader AG, business, shareholders. strengthened XXst, cash transaction almost generating This transaction million position, costs was our Systemax IT on a its This market benefited very of France completed in and the previously a we pretax before of August proceeds loyal a $XXX gain taxes significantly gross and and million. gain $XXX employees

States, United million We over at end. of repatriated $XXX cash have sheet this balance our and transaction from all on to quarter have the the

associate which business that dedicated to has years. we within team service. and exit, a With of the years a on have healthy approximately the delivered our process we many Industrial for is ago. the consistent has terrific It France revenue focused three a driving growth operations, are Today, started continued the Group, customer strategic a management double-digit that Products completed organic restructuring profitable and culture growth

bring We and opportunity our our the the And pursue opportunities, dedication ensure to on we today return for are this and serve take employees making well-positioned expand have thank personally an shareholders. my all closing, future. the we call. SMB capitalize exceptional to With capital to value further I flexibility and financial remain position, flow market of last sheet, efforts their marks competitive growth wanted are Company. to investments to customers and cash In positioned generation balance to and earnings strategic for the significant strong enhance uniquely we M&A our to

already their customers vendors for future. hit has very team XX Systemax's been to and be also Litwin business is be transition the support outstanding Tex. CEO our call making and to of very You of I the proud positioned good and management progress. The part Systemax success. leadership previously years. running want with accomplished with our my track Board of privilege you've partnership. excited Barry of I management should its for Barry thank for and be That's will past and part is ground us well of continued turn their planned announced on over to appointment trusting of what and our now Directors, the to for team the

Tex Clark

and center the being operations days reported average the detail. performance And the the third the constant over U.S. operating currency you, selling performance, stock both Industrial's staffing at margin basis Industrial's current increasing million and XX between for $XX.X Starting operating on sales from point mix. daily XX Thank cost and now last as in in keep and operations more year from in of I quarters levels and have demand we same second prior the that organically XXXX financial and management distribution quarter, third the basis to basis like in items. France third sequentially $X This the points in I QX quarter, for are sales up discontinued Gross year. expenses, XX quarter capital compared with of XXXX to of quarter, the seventh with and an Growth Larry. for throughout improvement XX.X% remain $XX.X industrial and depreciation year. our both $X Canada number the an note address up fixed would XXXX both Canada. of and within amortization in partially as our was second drive will marketing margin last our to periods. and and improved while $XXX.X year. an disciplined increase solid for percentage that XX.X%, XX.X% year-over-year third year, channels. revenue of quarter increased of the expense of revenue from our product leverage from basis increased the segment, with non-GAAP $XX.X month quarter was points the of business quarter improvement the offset to in up from continuing the sequentially. XXXX. distribution last a XX%. we effort for spectrum reflecting continue its within of web delivered was to quarter offer a XX.X%, was U.S. up each million profit operating general gains, Industrial's Selling, margin was Canadian positive double-digit structure. million this range We managed inbound, an and quarter categories XX ago growth by the in in administrative income to reported million, as Gross general generating and a was each in consecutive our operations. points continued in million. growth million over of of million gross the Revenue Revenue Total XXXX quarter $XX.X of across quarter million, selling sales basis in and product performance spend approximately XX.X% continue of and and of was U.S. to $X.X spending record expenditures strength the make the was slightly the was the quarter and

to a compared $XX.X Operating consolidate year. operations. year to to year. non-GAAP last $XX.X to year, from last X.X% QX. profit and million, Operating was Turning million from operating improvement last $XX.X results profit last margin X.X% XX% basis, from continuing X.X% was On improved improved a from margin million X.X%

marketplace, cost capacity, tariffs we widely freight navigating, sourced across goods. reported has As foreign been the proactively tight of labor are number pressures and are market that including and ocean domestic on a there broader

to we distribution initiatives, tariffs, any first through to incremental robust. the deliver its in to to third in we model, as profitability prices are we September, remain some believe products addition, incremental not timing in and the sell commencing in retention pressures result impact which lift rise. with alternative gradual increase leverage of quarter. market of believe in implementing to revenue far increases improvement flexibility certain more be on and including This will cost available. and into strategically certain cost These path list went are cost The employee the said, expect our we XXXX, long-term overall, and We week our continued fourth within while recruitment competition as prior we our minimal products our unique prices the us extent to the to shift purchase financial our sources further to experienced structure. costs growth inventory is in solid and our will offset from existing That adjustments last impact where we two tariffs programs. the the market-based centers thus We effect organic

of the the sale warehouse, update France de This liability. a our match The $XX gain former P&L for prudent third our the an NA vacant $XX two received to business, and largest American included approximately while $XXX Turning operations. This in our aggressively over North group million had mitigation of a this our gain to approximately million. of cash our a a as costs. million. the for on obligation related and warehouse, taxes been to million longest recorded We tech was with closely net operations. years $XXX liability reflected million discontinued which taxes a of million. impact settlement our in before business from before Atlanta, $X completed $XXX we transaction on minimis Georgia flow of marketed, which Cash quarter payment payment over gross from settlement lease of was is lease landlord property has was area cash almost being Further, and our XXXX remaining settlement technology

an reserve the that in We incurred $X.X remaining associated reserves other further lease remaining in of properties future each tech lease sub-tenants. additional limited we remain from quarter, unsettled without the in anticipate a last have and our properties operations with or million currently NA our Finally, our subtenant. adjustments

sheet. turn me to Let balance now our

We have X.X; and very a a strong X. of with current ratio liquid sheet balance

$XXX million in in essentially and of million over over debt September $XXX working we capital. XXth, no had cash, As

and sheet of repatriation explore capital million have excess sale to the cash allows approximately million Our agreement. to us of M&A our from France strength of $XX the cash reflects The our credit we strategic continue opportunities, business. growth our under invest Further, generated balance net shareholders. to position our in return $XX availability of

anticipate Contact future. you Directors Investor cleared the our cash share release dividend and today. about or Smargiassi your Systemax of issued of you continued Group, and As This our a our XXXX information dividend the in if third quarter at interest questions earnings directly. we common Media Board a regular please earnings, can Systemax. be per concludes result, quarterly have The Relations $X.XX contact of a for any on quarterly prepared stock Thank continuing earlier remarks, in Advisor, Plunkett Mike found

Operator

you presentation. now Thank The conference is concluded. for today's attending

may You now disconnect.

Global Industrial (GIC) 30 Oct 182018 Q3 Earnings call transcript