GIC - Earnings call 4 2023 | Global Industrial Company

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Operator

Good afternoon, ladies and gentlemen, and welcome to Global Industrial's Fourth Quarter 2023 Earnings Call. [Operator Instructions]

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, and welcome to the Global Industrial Fourth Quarter 2023 Earnings Call. be Vice Chief Officer. President will Tex Officer; call Senior Clark, and today's Barry Executive Litwin, and Leading Chief Financial

remarks by followed will session. Formal a question-and-answer be

Organic will business Industrial of the acquisition. and During the Indoff exclusive reference XXXX call, performance of we organic the metrics. reflects May the Global both

property Form under differ annual report on caption forward-looking and of projected company's has SEC call those Form due on that of a XX-Q. website number include Today's the should factors understood Form company's press from discussion on certain been in may available statements that Global materially XX-K is be including the Industrial a quarterly with those the This on the reports risk described factors, Company. release filed It and statements. actual and forward-looking results could The the X-K. the is to

Barry I over turn to call will the Litwin. now

Barry Litwin

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

to strategy. reflects the the to In while performance acquisition revenue execute from XXXX, year. organic the against of benefited a we Revenue record soft billion we RA continue Endos, as $X.XX reached start

economic entered deflationary with and customer pricing. We purchasing XXXX behavior cautious outlook, uncertain an

the eased X%. second through demand move we delivered Pricing half pressures the As improved. and results, environment growing year, revenue solid we organic

top In year-over-year. XX.X% of growth fact, revenue for produced million, our an increase line was QX best the $XXX year. Total

X.X%. revenue our basis, organic gains in improved as an we continued On These growth volume consecutive posted second and of reflect our channel. e-commerce strength improvement quarter

a quarter XX.X%, point sequential basis. Gross on XXX uptick basis margin a was

fully funding our in modest acquisition. after year the even the Indoff ended We a position, increase with $XX million cash

to in recurring of generation announced today, we the annual the a dividend XX% share, cash the increase Given a consecutive eighth business, increase. strong the quarterly $X.XX flow

of customer strategy to entire our proud marketing our Looking executed distribution, key the of from service. really sales merchandising how team and customer-centric pillars against XXXX, web, I'm back at and

our and both user long-term grew web our investments competitive support the excellence resources which Indoff, the drive and platform channels the company, e-commerce with of advanced we and strengthened addition offering experience go-to-market expanded our sales to position. existing and enterprise in to customers. new while making the Across operational performance helped We enhancements made

committed investments our performance. that the to remain We making drive future will

look we progress As buying of year, we further initiatives upon the ensure number to have of every last build journey. experience of a care the and part to we their customers of take at enhance our customer-focused

a to elevate to delivering First, help for Industrial's to ability bring our solve comprehensive solutions-based decisions informed we'll knowledge and Internally, and to succeed. to approach we offering. for and content, support continue our more Global make look product customers, customers problems them solutioneers be

training capabilities the product project offering. and expand for subject leveraging our and to enhancing are Indoff's matter We installation management experts service

process, customer to customers And solutions drive will and we needs efforts alignment voice and are for. our of the these feedback with looking

monitor extra brands renewed prioritize we'll our Second, new Industrial's quality and processes. evaluate, to through on the deliver a team we a Global value through we in From chip the provide. exclusive improve the cookie focus

the product We the will delivery from step sourcing of every emphasize quality of experience buying to the customer. to way

customers. also have of complementary our we selection core will ensure product products for right to We the consumables fine-tune and our assortment

these we bring With initiatives, improving market. the and to we our value are highlighting quality of the offering

Industrial. even it Third, it with do is our easier aim Global to business to make

end-to-end frictionless about heard exceptional have us a an that You shopping providing delivers talk transaction. experience

a service all and ongoing to new category drive We improve deliver program, ability training and have designed to shop experience. agent customer a several efforts merchandising X-star

marketing the efficiencies improve customer team performance and to and profit analytics. includes drive relationships. optimize investment intelligence the and making enhanced sales, are in we there pricing deepen technology tools This digital grow, further to investments to Finally, have and we and marketing is in retain sales,

enter year. as day place in Industrial's business of value we across to we to bring upon build partner business are I our the we every the an last As indispensable the progress Global plan and believe Initiatives position highlight and right the designed have XXXX, to elevate customers.

areas to The operational position, environment invest start we performance we cash strong key evaluate opportunities growth drivers, balance have and well strengthen sheet, of seen long-term on in are modest from our With stakeholders. year. growth to for value remain exceptional build one organic strategic remains the operations Investment competitive and strategy, us an help execute designed in positioned capture and our and efficiencies share. to drive market caution our flow our

turn to now over the Tex. I'll call

Thomas Clark

Barry. you, Thank

Canada XX.X% quarter Organic local Fourth largest up currency. in million, was Organic up year. our the the revenue up growth and quarter headwinds consistent of volume X.X% rate last year. digits. U.S. of QX $XXX.X was year-over-year, X% revenue revenue over in single organic with in was $XXX.X Growth X% was up throughout the and million, up low was price revenue

demand broader and representing our XX% volume. were digital represented sales the sales year channel again Private and and than robust XX% XXXX. order in approximately E-commerce annual remains brand total leading ended more total of once of

ago the million, for the contribution up Indoff down period, of primarily and lower gross XX.X% from profit XX.X%, was was relatively last basis from XXX profile. Gross points margin quarter mix due margin the $XXX.X Gross year. its year to

Organic the XX.X% line XXX margin up carrier and Organic historical their a a nearly margin points basis was onetime year points from settlement gross XX period XX.X% the in LTL with Indoff performance. and benefited performance quarter. line freight sequentially. was with in with rate ago basis margin in former gross

remains profile promotion margin of initiatives. proactive actions freight our our competitive pricing continue of of and impact will the as a to Performance reflect part focus. of key area Management

to as given compared in reminder, consolidated impact the Indoff's we quarter decline expect margin As last composite margin a our the year. to first profile, gross

something may quarters gross depending quarter. headwind the are result a in seen a the shipping is the we in ocean as disruption. monitoring Red in the duration we future This have and in upon double-digit addition, disruptions costs margin Sea, In of of increases closely freight first be

Selling, approximately from the XXX reflects in Indoff's or sales million benefit as distribution well controls points and as last cost quarter for primarily general business. improved spending organic and year. was within the SG&A basis of cost lower XX.X% administrative net $XX.X the structure of

$XX.X the continuing Operating was and fourth operations million operating quarter X.X%. was income in margin X%. from margin operating was Organic

our With Indoff lower than periods. and of addition the lower its rate, operating margin comparatively may historical operating remain margin composite

Indoff $X.X generated we amortization with $X.X $X.X million. of were continuing flow while expenditures capital quarter, million, the operations expense depreciation including million the the During million. assets associated the Total quarter associated of in cash intangible amortization and approximately $X.X operating from was acquisition, with

equipment and XXXX in our million million million, capital were $X capital expect maintenance-related $X.X expenditures to includes $X expenditures XXXX investments of to we the primarily network. within which range

Let to our turn balance me now sheet.

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

under in had of no million $XXX.X availability As of we and December debt credit cash, XX, million our facility. $XX.X

fully our maintain flexibility quarterly on significant plan dividend. We strategic our continue to to execute fund and to

result, quarterly from of a an quarterly common dividend. of share a Board the increase declared of declared of per dividend $X.XX XX% previously stock As Directors our that reflects

open questions. remarks prepared This concludes Operator, our please the for call today.

Operator

Anthony Instructions] Sidoti [Operator from Company. with first come Lebiedzinski question Our will &

Anthony Lebiedzinski

have I fourth Maybe your January severe could guys the details about comment talked a wondering if well peers some about more in in winter us just quarter-to-date know give your you on couple the as weather cadence quarter. sales. disrupting of So some trends. sales of the first

So that, if would that you be could comment great. on

Barry Litwin

I QX with from basis period that think us a XX pleased for Yes. organic were mean performance. was I we exit on at --

in season, didn't the frank, winter certainly, the and to winter it seasonal tremendous kind of gets for season, to relative have winter that phase. As We early products that amount relates a And disruption short of think, quick was that. see a we by area. burst a be in I helped business had

pretty So those we products. felt we with fared well

good it for a So relatively was us. season

see exit through growth QX modest kind organic we As some certainly of into we QX, through. flowing and go

I So I general, sentiment customers today, the relative Anthony, to we a still I prioritizing think, where cautious are they're market think still in fairly see think in price.

to there. think I be headwind some there's always So going

market. growth a see low growth we perspective, being of MRO industry-wide, fragmented I certainly general. that in also a kind think single-digit it's But from in

market freight. competitive have So to we grow. certainly think it's we opportunity to and a price But relative continue to

now, are prospects our right very reasonable. So

-- the our quarter, pursue through to to we'll result. halfway good continue initiatives only continue and a We get to us to

Anthony Lebiedzinski

Understood.

up. to Okay. follow wanted And just

or your think, third quarter orders? take with that. especially talked call, as on you spreading were more multiple as that far just of the about shipments. So large of I through to kind the on caution, see your get customers, curious of the Just guys orders, less orders some Did you same their large

Barry Litwin

Yes.

very a fairly a performance we large like to remarks, lower But through last think has drives bit typically, reporting order orders. our it's been fairly e-commerce think Anthony, And consistent channel -- I relative even I that large been seen we've the orders said in period. I for us. mean, consistent, We on size. little good

Thomas Clark

been Anthony, right, that's This absolutely Yes, consistent, on that approach. very Barry. has

Anthony Lebiedzinski

and Got you. you guys -- initiatives And you Barry, on. several talked you focused about right. that All are then,

the out of out most of will impact out? of or which of have those those, play kind business take think X X As mean, the you kind you on I outlined, the far as immediate which will ones out longer that one and initiatives of

Barry Litwin

Yes.

question. great So

suspect our experience that's end organization from that to emphasis quality into it I'm our organization, sure the year, from And those about. really being drive we're on out and product putting been make in sure and the the goods, warehouse to I inspecting quality acquisition focus that a huge our company and great impact experience a an damages time and the our retention reship have able with place a excited very that you're we items very that on now really although good, typically ships end-to-end team that to audits bulky rates big always pleased back items based programs and time in long-term as think we customers, comes them, the we making user. source damages this Being to into the with have we're a really to to quality one appropriate across have retention. investing those are an right

that will retention been focused and invest to we've customer into processes that experience. So we company as continue value. and to our to continue improve the believe that get and was in ACE better, on rates long-term created our since drive increase we 'XX, for back And continues that quality

Anthony Lebiedzinski

Got you.

then quick guess, I housekeeping, thing. lastly, Okay. a And just

rate? Anything a anything rate QX. So tax your there as say higher little out? And as 'XX tax to call far in can bit was you

Thomas Clark

Yes.

I one. that take think I'll

under to bit NOLs. of XX% treatment for more and But income think it right related consistent for I be a XXXX. more normalized should I'm year. we next income -- for ultimately, a consistent This expect and sorry, XXXX foreign in tax Canada some little was and some rate would

Operator

Our come William Michael from with next will question Francis Blair.

Unknown Analyst

Francis Mike is Merkel. This on for Ryan

and How with think the of growth the lapping acquisition bit little start a be Indoff there there full to the we overall with think gross like accretion I Is any about that to should acquisition margins. you're the with next year? of involved? you I had business coming year headwinds Indoff going or organically. know that in

Thomas Clark

you Barry, don't mind, that if take Yes, I'll question.

right then over margin, move very we're on a mean, both the their have definitely had on gross but activity little to sharing sales different reps out will model But that gross with long a again, margin time. obviously and sales market, a their So organically stable time, we're I a in it's up there's naturally business slightly able rate. that basis. a regards and lower to consolidated it to bit partners and gross margin working Indoff be margin for profile, with gross the breaking margin now,

the to businesses. fourth business, and think I regards the third mean, quarter this were we organic fully In where quarter about, quarter was can the consolidated

second should If profile. gross half always in margin expect to continue margin that We focused look at our see you the maintaining that in as XXXX. we're gross of

team the mean, that's to world freight always the we some think shipping some going short-lived, appropriate, of You the maintaining the rates and currently in And we that's and to margin capture is through priority we sure key analytics price we'll always that of be out, called ocean now, fairly are really invest Right we but be so to can why we I driving where lanes able make company. said as a up. heavily gross some our pricing headwinds but work disruptions with pricing marketplace. that there's around that. face in in

Unknown Analyst

Okay. to label also ask private about And wanted then little a I bit.

you're where to room there? Is happy you You want to that XX% a we get mentioned now? we with of where of think sales. of there should there more at target that with grow is think when Or

Barry Litwin

that, Couple of Mike. take I'll pieces.

could you long-term is I providing believe we're can not but upside. usually in that it brand private And X do penetration, like one there's tell think I come guidance on I we think ways.

relative I mind, in that Global's brand take refine better, assortment the really today, the to terms we to we we product. and think, a assortment, the brand business really where of creates good, advantage because be best in one, our the best to to fit the private added in capabilities see organic continue offer an private we approach

marketplace, And that those forward. can continue if provide to at best in we value emphasize we'll sales continue the to a going price

what think, to kind The I relative Tex other piece where of covered. there's is upside,

able brand. to really Part think a that drop-ship our typically there model. with be is assortment approach I the which private to penetrate business of Indoff was model,

have product some training we product that we will expansion additional new and upside to efforts our development, the brands. relative on all between and educating so in private create the and think And

we beyond today, that's growth are XX% So a absolutely and upside, forward. where there's ours the we going think strategy certainly of business core

Unknown Analyst

here. then one last And one

You your products shipping channel? Are through coming of a is up. there? little coming Red How about Sea that bit the and much talked shipping your through

Thomas Clark

very bit that actually through coming channel. is little Actually

the However, rates. Africa increase Game we've that's rates just industry people with the of increased and overall in seen areas been across an the disrupted other container around moving overall flow the has overall as

rate So seeing to the has coming our delays overall increases. but market through we're not due actually had product there,

available That's information are I carriers increases the market not passing readily fairly mean, ocean us. to that's the the unique current about in I -- different that think through.

that think Chinese terms out to cost normalizes also transitory in ideally that, will and as settle we New Again, increases begin it's as that of well. the we demand after Year's, hope

area focus that have it's but a we're where -- mitigate something key monitoring, can. it's trying that So to an on we we

Operator

for conference The now concluded. session. question-and-answer has Thank our today's concludes This presentation. you attending

You may now disconnect.

Global Industrial (GIC) 29 Feb 242023 Q4 Earnings call transcript