GIC - Earnings call transcript Q1 2024 | Global Industrial Company

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Operator

Good afternoon, ladies and gentlemen, and welcome to Global Industrial First Quarter 2024 Earnings Call. At this time, I would like to turn the call over to Mike Smargiassi of Plunkett Group. Please go ahead.

Mike Smargiassi

Thank you, and welcome to the Global Industrial First Quarter 2024 Earnings Call. Leading today's call will be Barry Litwin, Chief Executive Officer; and Tex Clark, Senior Vice President and Chief Financial Officer.

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

Indo Factors reference and of the to release under factors, certain with Form website to now forward-looking will company's organic the May Global Global Risk call, actual on on Organic forward-looking due GAAP could under X-K. XX-K will and call on been the report we XXXX the the be of turn company's those and reports Form performance a including the During statements. of metrics. Form Industrial It may understood projected XX-Q. This both caption reflects of statements differ business, Company. filed described in materially on and exclusive Barry. over has a the is call I Today's those should annual SEC property number quarterly acquisition. discussion Industrial is that include the results press The available the from the

Barry Litwin

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

an essentially with XX.X% of behavior gross solid improved on benefits partially posted for gross business Overall, pleased to basis, we again was And enterprise and cautious past it our an results of million. from was and account on leading more prior price were X.X%. growth sequential performance in as flat rates. year the $XXX margin was quarter. in growth our basis. purchasing seen consistent the several which continued revenue performance, once than our basis, These reflect headwinds. We quarter both continuation offset healthy and revenue strong period. Order the was On and XX.X% quarter generation customer new seeing organic volume E-commerce up margin trends by remain and retention third organic with we consecutive are our the have quarter of quarters. the we the First through channel,

position XXXX, quality enhancing in championing conference across on provide of includes we As customer experience value I facet last we every the continuously the on solver and Across a are This end-to-end experience. our deliver us outlined call, are our the initiatives to focused help business. improve the as elevating provider our and exceptional executing and for against organization, to shopping an customer. solutions multiple we problem

One utilize measure customer of impact our these is satisfaction key the scores. performance indicators to we the efforts of

service, order the enables and total direct and we each associates customer-centric do the scores Our process impacts are Satisfaction XX% lifetime are of of pillars the evaluates fulfillment fill against from of to quality customer. Overall, high capture are than us run rates. key market and Customer the us that reflection our value we a gains strategy. have across with execution Voice recognition as our seeing Customer everything this and our the product customers been week, the and to post-sale The pleased retention well, our retention of rates efforts percentage, company share. ultimately we customer overall same-day everything greater shipping by the customer support tells drives of that our experience. evidenced working

sales differentiate to and We a market customers. brands value industrial exclusive global national to through our continue position one-to-one assortment branded leading exceptional an of the a experience, and managed significant that in products delivers approach

will market that and capture and sales, our competitive customer efficiencies, investments continued in strengthen making marketing, and accelerate help operating us are engagement drive merchandising We customer service share. position

new long-term highly to sales opportunities have Industrial we market as current believe industrial as we environment its growth numerous strengthening we Global would performance. The an fragmented, growth acquire to is With and partner drive in turn Tex. and flow business as distribution in our expand sheet customers. stakeholders. like, on I drive While invest the evaluate not long-term we turn, well from execute indispensable are exceptional remains channels, position ability positioned strategy, strong to improving for current is call balance now drivers we the as will robust and operations, our over its an for enablement demand and across our relationships cash strategic its we and our while value build opportunities

Thomas Clark

you, Thank Barry.

in quarter X.X% year. year-over-year. Revenue X.X% was local XX.X% was and order from volume over improvement, benefited up was revenue continued while last competitive. revenue Canada headwinds. environment remains growth First million, revenue The rates pricing $XXX.X revenue of million, pricing up impacted U.S. up QX up Organic Organic was $XXX.X X.X% were by currency.

negative optimistic we will pricing impact improve trends to However, that the are near term.

gross profile will initiative. improvement performance. Organic rate XX key of impact proactive the of gross area the XX%, ago quarter's basis of for freight reflect historical Gross continue due margin million, XXX points organic year. the growth $XXX.X a seen the last from up Management period. the quarter to remains focus. margin have as April. margin off first our continue profit mix Indoff year was part competitive down an represents of from XX.X%, basis of XX.X%, profile. their margin period XX.X% was margin contribution which Indoff to into revenue sequential points our lower to its was from modest promotion gross ago year pricing both and actions relatively the was and We Gross and Performance

related nearing of the reminder, business combination more May are be year. to in first as muted second impacts the margin a will this anniversary As compared this of given our Indoff to in last the year, quarter Composite we acquisition timing.

was the controls offset structure. is higher cost sales, we are of the recent is our $X.X incurred from year. administrative something this partially lower benefit general IT improvement was all freight quarter an and period. sales, of In reflects remediation net of approximately of XX and of points related Indoff's proactively costs and highs to addition, in distribution last certain managing. Selling, cost audit $XX.X for SG&A This by spending into the primarily elevated, ocean million inventory basis costs, flow remain or XX.X% starting to cost million while

Indoff first margin continuing continuing in Given marketing and $X.X in was acquisition inventory operations advance year planned as the initiatives to Organic margin the when growth Operating sales was remediation, investment income X.X%. operations from IT currently and with season. of XXXX elevated compared key was in control was quarter $XX.X ago operating the SOX in SD&A associated ongoing from well and be in as operating expect period. Operating the the implementation flow and to quarter, as million summer we built X.X%. we The cash spring million costs

capital historically quarter were including was periods in amortization Total Indoff intangible of million approximately associated amortization the $X.X expense quarters sales expenditures with and assets The are for $X.X brand products. million. third acquisition, million, second the largest and the our $X.X depreciation the with while private

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

now balance sheet. me our turn to Let

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

As of plan fund approximately had cash, maintain to excess and $XXX.X facility. significant we of under and XX, March our dividend. credit on flexibility $XX.X the We no to to million million availability our strategic in continue quarterly execute debt fully

$X.XX prepared for Directors As a per Board call of concludes the please remarks declared Operator, result, our of quarterly share stock. This of questions. dividend a common open our today.

Operator

question with from Lauren first Instructions] [Operator the Ravalli William Blair. comes

Lauren Ravalli

is and from ask from quarter, helpful. first to peers sales results performs of I really about of in specifically Friday. Any is impacted good the color Ravalli the each cadence the Lauren how may I by talked know Blair William wanted month be for how your about expectations. Ryan how just Merkel. timing differ March

Barry Litwin

through would the year, the I timing And Yes. continued. we say a has exited growth from the I overall of period for us. into as see we that part we think of for organic did as amount early certainly a modest and consistency see perspective, QX fair revenue QX,

had holiday. So did saw had. think I as we effect as about don't us others challenges on weather don't maybe -- big some something an think I read that I

Thomas Clark

Yes. holiday of of Laura, as QX did February, we the growth material January, to mean, while end that. didn't just the that shift. year, impact seem in add quarter, And to the consistent Friday see from QX said, good rather fall this March. throughout a holiday than beginning Barry very I

Operator

Company. Anthony next Sidoti Your question with & comes Lebiedzinski from

Anthony Lebiedzinski

of cautious behavior. had So was you guys customer sales talked better we expected. X.X% what Yet than growth organic your about

guess could get could. us I you sort give or markets that vertical customer more maybe are on your than if of you to you you weakness just that, -- any more groups maybe Just which pronounced details So more color wanted seeing as of to are others?

Barry Litwin

Anthony, that's a good question. Yes,

-- I customer economic think persistent have while. the from see the And that's that. to think for to cautious SMB going that small- the certainly I with a it market, stems recently we some definitely standpoint come out I were think, numbers I the market, market, customer from midsized be of think of little

customers some customer. But larger retail of when consistent. into things ones warehousing, little transportation, markets, I fairly relating QX. But were see those a across CapEx have into was to little The more withstand about a purchases, was seem the on be Smaller impact like to period It that any of segments. changes we're size where manufacturing think challenged. of kind you end-use through are that. better. in the industry of customers further of and us. what Our to first and a impacts ahead national some the enterprise of We'll big kind the was We'll QX, lot the kind we of as implications, of in it probably fixed kind get more found fairly it consistent has the certainly, able type asset period bit

Anthony Lebiedzinski

That's quarter? far the helpful color. continued into those trends And have second so

Barry Litwin

is I it think similar. of the shape Yes,

Thomas Clark

highlighted, we far. the about period And second Yes, in Anthony, results similar quarter. this weeks we're consistent as in, so as results X go we similar into

Anthony Lebiedzinski

color e-commerce you. terms percent then account the highlighted generation is you your your that of maybe transactions in that Is total? roughly then in release? give you actually sales new Got can channel, out? on your press of more And what And

Barry Litwin

Yes, sure.

been the for generally which ways e-commerce, north that which really us. includes in So think includes call broad full in many are us. our customers for it and e-transactions business, when terms procurement, We at channel EDI, all has from of e-commerce usually don't XX% our solid sense, of that you e-channels, a BXB buy separately, you includes the about channel look but the out of

last conversion of the in customer the over overall improvements people rates some experience. having that's couple made have relative we've site. to years and know, the think positive navigation effect changes some And experience a through that you I the moving As overall

some So that you within discussed, enterprise opportunities going us helped larger as forward. We did has mention, accounts. certainly

out us separately. last growing been that's that global couple accounts in You something terms been for been over guys our know a, a to of that has channel We fairly of It's that, larger that's the don't new industrial. years. call

channel However, has a been years, performance, over the to we very be and with -- we've couple it's the us. think going that next significant been of pleased it's for

with So the are we've that managers and our been that of account some work strategic happy area. that really having market in

Anthony Lebiedzinski

Got you. I couple if could. a of other questions, And

Indoff's that? And drove So improve I think better than do you to margins? other you Tex was opportunities Indoff's What that further gross mentioned any historical. margin see

Thomas Clark

really Anthony. couple happened our higher continuing of little We're bit the deals be to quarter, absolutely, mid-XXs we that margins were Yes, and in had was margins. them they XX% quarter, came closed in push large margin to they continued pre-acquisition. introduced about which ownership should after favorable drive drove a by the action I this had help very capabilities positive a benefited to after reported. brand balance acquired that In that than that to mean, their Historically, time. which large both the single previously those margin action order initiatives that business, to in seeing rate and up, over was are first to improve of long efforts while run. quarter e-commerce continue and margin higher of sales we those -- the initiatives a to And private again,

Anthony Lebiedzinski

Got it.

expense X% in mean different I And terms sequentially SG&A from year initiatives. up up was quarter. I the some you're Okay. fourth last in doing it of and then growth, investments know versus XX%

how here, as should rate from So expect here? the as as far before expenses far we forward as going run

Thomas Clark

Sure.

a you Anthony. that, give color little me Let on

So that at XX% XX%, when about year-over-year to we -- up remember you over business got nearly revenue. that, think XX% obviously, acquired of a the made number we

focus to that were take highlighted investing think we sequential by be the that additional we in -- rate this having QX area So that line obviously growth those to be can at just investing marketing that the about going where last of the prudent changes, half an to we're period, share call, it's we up able sure we're other top compared initiatives incremental sales somewhat about one to even we elements only some year. as highlighted right the in on in year about related contributed going drive in that had if challenged in make in line contributed on. bottom alone $XXX,XXX portfolio and to continue now. And there's did in charge business year-over-year that The to past growth. key a quasi we think of is that and growth we a to of that's thing When quarters which today's have onetime market that's we to is SG&A

Anthony Lebiedzinski

you. Got

Okay. That's very helpful.

last Okay. for And question me. then

you any So after now deal, year additional looking that Indoff the you're almost are acquisitions? X for other

Barry Litwin

Yes, good question.

a our as that. organic component mean, our pretty we consistent as in business focus consider forward. been going I of absolutely as I think acquisition So strategy, on much we've we

we there. into add categories that Those to come happened those think there's our us. so we new we're acquisition We've brand. that add go looking at far types up with on are what's sell bring lot really more new point, the our deals, channels new all certainly, we for been So private model, business advantage keeping out take when across until of we opportunities definitely with eyes a important of opportunities can us this value would constantly And to and Indoff that. are to can customers, our front. pleased to But

Anthony Lebiedzinski

best you of Sounds very good. Well, and thank much, luck.

Operator

today's today. presentation. session and attending Thank for for conference question-and-answer the you Our

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Global Industrial (GIC) 30 Apr 242024 Q1 Earnings call transcript