GIC - Earnings call transcript Q2 2024 | Global Industrial Company

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Operator

Good day, and welcome to the Global Industrial Company Second Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Michael Smargiassi, Investor Relations. Please go ahead.

Mike Smargiassi

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

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

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

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

I to over will Richard. turn the now call

Richard Leeds

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

moment to the to turning Before transition. a financial on I wanted our CEO take to results, comment

business the have their with with role engaged the Chairman Our week, the on past of during my efforts remained I senior and a Executive nearly nationwide management years I Interim Board. of previously will actively And This position CEO. XX next underway. as additional role take held closely the worked supporting formally I've for in the team search is several CEO is years.

Barry to he On in his behalf career. embarks chapter of next thank and for the his wish Global like would well on I contributions him as Industrial,

their as strategy. my forward have on execute have team. full we both and continue built Board's Over a efforts the to supporting strong They we look past confidence. to I management several the years, our senior

performance. to Turning financial our

top $XXX is environment, quarter revenue the quarter Second delivered reflected We're improved performance both industry fourth forecasts market cycle soft with our X.X% basis, demand the given which consecutive as the well we and pleased current growth, revenue of index. with approximately line X.X%. the as million. On up organic to PMI an in revenue

of purchasing a monthly basis. continuation performance a saw we cautious quarter, with mixed revenue behavior the customer During on

Our quarter, years. an a a disruptions on pleased performance key record market quarter and of retention in sequential basis. several year-over-year trends was past gross XX.X% with both metric remain managing strong through We healthy. have margin remain the margin over Gross improvement track and the this various

bottom in investments and to our to tools reflects enhance key position. functions initiatives, well and managed the in Our experience, as automation line organization planned and our enhancements across This engagement growth experience. marketing efficiency customer and drive specifically sales growth sales customer strengthen competitive sales performance help to includes further as

satisfaction customer rates a experience It's directly and second remain customer in and to true validated to the lifetime report customer scores pleased that a leads Delivering solid our competitive commitment XX% execution elevated above customers. values. highlighting quarter, higher associates the I'm our by advantage. our positive retention of as

It's control. on been months and within first of our remains year, the our focus X challenging the the a environment things

market share capture We drive us will and position, make continue that revenue our investments competitive long-term strengthen to help performance.

our are a have strategy. executing strong leadership against team, We

invest And an operations, balance opportunities. exceptional strategic as believe and we're the environment well evaluate and healthy drive cash continue positioned flow improves, financial performance. sheet we to I to drivers With our from growth in

the turn to now Tex. will call I over

Thomas Clark

Thank you, Richard.

in million, revenue local revenue was $XXX.X year. U.S. last million, down up over currency. X.X% revenue and X.X% X.X% X.X% was up Organic Second quarter year-over-year. Canada QX was $XXX.X revenue of Organic was up

account generation. and led to channels sales on managed in growth strong our we as see it capitalizes Our continue our business performance, enterprise new

neutral price modest growth the overall that second the move can volume year, and are half volume start rates from XXXX. pricing towards were Price by we benefited of since optimistic of the impacted headwinds. has in continue Revenue while to improvement, narrowed

due Gross primarily points year. sale. last ago XX The Margins the to Gross price for proactive label was margin basis. period was year $XXX.X XX.X%, improvement private balance achieved basis the up a from both businesses. points profit of from on X.X% as up and organic million, management quarter quarter XX expanded sequential well expanded as our Indoff year-over-year was in and basis

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

months. to and sales, elevated manage. have of cost our addition, freight something flowing we ocean this In recent continue is inventory Higher accelerated costs cost remain in and into is

quarter basis with points the generated planned accounting spending of customer the which SG&A executive partially benefit increase and for last primarily year. XX.X% for net or Selling, by sales a investment sales, negative and key an distribution initiatives, in to from softer due associated was $XX.X leverage marketing million environment, offset XXX demand administrative growth of transition. reflects

the year, year our general but the we to expect and from growth periods when second elevated of the discretionary We to We in in SG&A support ago disciplined our levels remain of remain QX moderate control as continue half to compared management. our levels quarterly strategy. cost

operations million income Indoff was second operating of was in operating quarter, approximately to $XX.X the Organic million. $X.X amortization the expense operations was $X.X intangible amortization margin continuing related in capital while $XX.X $X.X the quarter including Operating flow million and was million associated expenditures from million, margin the acquisition, assets cash and quarter. with the from were X.X%. depreciation X.X%. in Total Operating was continuing

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

balance sheet. now me our turn Let to

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

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

declared As stock. a of dividend our common a share of $X.XX Board result, of quarterly per Directors

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

Operator

Ryan question William from comes first The Merkel Blair. Instructions] with [Operator

Ryan Merkel

revenue. Let's off with start

Are bit out mentioned are stand or You end weak here. customers, products certain that weak? markets being particularly the end markets as there a

Thomas Clark

Yes.

those as little management and the enterprise I channel some under at some customer well and larger to -- as fragmented base our portfolio had our tends perform softer softer look in our diversification in account that as small customers. period. have the actually customers again, as this medium as us a broad the business customers, actual saw bit when our offer that And We business, at in we to times. very certain set When we of best really e-commerce think, our quarter. of actually managed a smaller small look we customers, well of some a you help product Ryan, very performance that we the in business, know, customers our

very have in We there. different From again, a a season the decisions. year, campaign it's different second types product furniture, seen cooling, outer of for in that the But we've the warmer with board, a strong had a segment been seasonal strong customer we've mixed amount a fair pretty side, actually quarter. earlier performance with HVAC. buying of really, within actually soft With across

Ryan Merkel

better? what you uncertain? you much Any I that Okay. about shoots? know any outlook Are seeing half? pretty the to for second the signs Or green don't get visibility. trends have Makes sense. it is And

Thomas Clark

growth moments fair still down, weeks that a quarter, of the some really months ago, think our uncertainty. within organic X.X%, some as some -- even mentioned was months the in mean I amount up, and even we included a there's up, Right but I few now, just some weeks down.

looking market So a we're in to of different We at. the directions. I lot is there's forecast market that in out a moving what right mean, challenging a lot indicators it's now, with it of fluctuations, know key

So decisions be sure right best are can prepared when to focusing things made. we're and positioned control buying those we're our now, for that those customers really on we making

Ryan Merkel

appreciate planned control to SG&A investments second still was outgrew should me. ahead our expense these still that. revenues that bit. in you thinking the you're Last pretty revenue second half, half, investments. costs I'm about elevated? go are Or by with doing curious, you the is assume you I Okay. a just in just model one above we trying some outlook? and Richard, mentioned quite for uncertain given the SG&A

Thomas Clark

Yes, I'll Ryan. drill maybe again,

we're performance, exited company area on the in definitely our we make in do those term still sure executing areas anticipate position as investing that do position down key SG&A in And that think our right to the the are second we long while moderate that SG&A being believe up were way. we absolute We we that year-over-year. helping will want and initiatives. is and nature one key customers from I we helping quarter QX certain that highlighted

plan in do on we to and it the will continue sales initiatives. again, half. again, the marketing investing in plan be more moderated But second So

Operator

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

Anthony Lebiedzinski

trends. monthly the I first, just on follow-up a So guess,

and If months colors, up you you or some weeks guys could give think some down. Tex, I some some mentioned were

as So any more give to progressed? to way the color how quarter

Thomas Clark

we and up Anthony, down. was, was mean some really saw it I weeks We some down. week-to-week. saw weeks up, No, it

that we weeks quite we've if throughout fluctuating currently bit. down a really period, the bit but would seen and were into actually in it's So continued fluctuating down the end, early that it was where in a beginning the really up highlight that, the of I and July,

and as it's can So sure of we've trying best seen that downs, we to an we're as and those ups positioned that area some we're just make be.

Anthony Lebiedzinski

you. Got

the of then gross in terms And Okay. margin.

should the a ago. I bit outlook freight the know nicely those you So I details but little what go about costs that? on as gross versus for balance rise, it margin of maybe more the improvements? drove how year? how mentioned up also And year can was you the to over know a think are sustainable then ocean we just

Thomas Clark

to seasonal good categories Yes. -- no that bit you of a the There gross combination our of goods was will sales our margin we a mix well pricing We focus make quarter, bring I the those bit of improvement as onetime The margin in as really job. initiatives continue and up for always in ultimately mix sales our right? is upon in based and period. a certainly gross of brand the as think did little private the gross higher a know. kind margin we on items business, that mean, that little

that So manage we're changes set we have the we it's an to but addressing confident to gross be as any right. area market continue see the competitive are sure is the that margin, well we and in to time able to we'll paying attention make that when that

ability continue to an margin. area in we that confident it's to So are our maintain

transitory. to increases year-over-year. freight while of have unknown, that's in we increasing have and what The Industrial. the not you some It's accelerating does making ocean more gross that's that But Earlier one highlighted our cost year, focused that into the again, as to bit be pricing in sustained unique and we've But market that actually we've really mix those to in freight big it was sales we we and little area a our cost. to is ocean seen our thought on do margin been market, it's profile sure is that manage. of while right an the something able teams Global

Anthony Lebiedzinski

Got you.

follow-up. just then a And Okay.

sales received to Indoff? label as guys more gain as Indoff, going? the of gross that private opportunity improvement? speak far that as products? exposure as you introduction And did private being the from own your as far you at is that that then that reps that benefit as As as label margin that those as you to How can is And see they far for an to like -- how products, get

Thomas Clark

as the Indoff subsidiary Yes, it's as profile ongoing highlighted, in Industrial both core the our at we Global well an so mean, margin as I saw initiative. gross business. we improvement

our into So Industrial, nice Global profile we to margin that remain see improvements. still the -- their partners. does lower And sales Indoff we of something our does while brand still or Industrial, that from a especially Global did is introduction those of see than sourcing maintain -- was part private

something it's cross-train be on and tools that continuing right and So to partners. with focus with arming able product we're to their to continue them to the we're that sell

to in fit doing this into we'll a accomplish, still history over to very our that long products. we're time. again, But Industrial, that time We've we'll that well continue something able Indoff they confident and but Global is a it's been with have they what push. looking be grow So to shorter

Operator

Thank presentation. and attending will Ladies for this call. session today's gentlemen, well as today's question-and-answer conclude you

You your lines. may disconnect now

Global Industrial (GIC) 30 Jul 242024 Q2 Earnings call transcript