Global Industrial Company Reports First Quarter 2024 Financial Results
Global Industrial Company (NYSE: GIC) reported first-quarter 2024 financial results with sales of $323.4 million, an 18.1% increase from the previous year. Operating income was $17.4 million, with a 5.4% operating margin. The company declared a $0.25 dividend. Gross profit was $110.9 million, with a gross margin of 34.3%. Net income from continuing operations was $13.1 million, with a diluted earnings per share of $0.34.
18.1% increase in sales compared to the previous year.
Strong performance in e-commerce and enterprise business.
Declared a $0.25 dividend to common stock shareholders.
Consolidated gross margin declined to 34.3% from 35.9% last year.
Operating income from continuing operations decreased 2.2% to $17.4 million.
Net income per diluted share from continuing operations decreased 2.9% to $0.34.
Insights
Global Industrial Company's first quarter financial performance showcases a significant increase in net sales by 18.1% year-over-year, reaching $323.4 million. This growth, however, is nuanced by the fact that it includes contributions from the recently acquired Indoff. When dissected organically, sales growth was 4.2%, a more modest but still positive indicator. This suggests that while the acquisition has provided a substantial boost, the underlying business still demonstrates resilience in a possibly challenging market environment.
An area of potential concern for investors is the decline in gross margin to 34.3% from 35.9% a year ago. This compression might be indicative of rising costs or pricing pressures, which investors should monitor as it could affect profitability if it continues. Nonetheless, the management's ability to maintain nearly flat gross margins organically hints at effective cost management strategies, which might be reassuring for stakeholders.
Investors should note that the operating income has seen a slight decrease of 2.2%. While this is not substantial, it serves as an early warning signal that should be watched in subsequent quarters for signs of an ongoing trend. The company’s acknowledgment of cautious customer purchasing behavior could forecast a tempered outlook for future sales growth.
The declaration of a dividend of $0.25 per share is a positive signal of cash flow confidence from the company's board, underpinning a commitment to shareholder returns. Coupled with the reported operating cash flow of $6.3 million, it appears the company is in a solid financial position with respect to liquidity and capital management.
Examining Global Industrial Company's performance from a market trends perspective, e-commerce continues to be the leading channel. This reflects broader market shifts where digital channels are increasingly becoming the norm for B2B transactions. Investors should view this positively, as it suggests the company is aligning with market trends and catering to the evolving preferences of customers.
The focus on enterprise business and the reported growth in this segment is noteworthy as it could be a strategic moat in a competitive landscape. New account generation and customer retention rates are critical barometers of a company's market position and future revenue stability. Strong performance in these areas could indicate that Global Industrial's investments in sales, marketing and customer service are yielding a competitive advantage.
Despite noted price headwinds, the company's reported volume trends are solid. Investors might appreciate that the company is managing to grow volumes in what could be a price-sensitive environment, suggesting product offerings are robust enough to withstand some market pressures. This can also be seen as a testament to the company's brand strength and market relevance.
From an investment standpoint, the financial health of Global Industrial Company appears stable, with total working capital of $160.8 million and cash and cash equivalents of $29.9 million. This is complemented by excess availability under its credit facility of approximately $120.7 million, which provides ample financial flexibility for future investments or to weather downturns. Given these factors, the company is well-positioned from a balance sheet perspective.
Investors should recognize the company's operating cash flow generated in the quarter, which is indicative of its ability to convert earnings into actual cash—a critical aspect of business sustainability. Moreover, the cash dividend announcement reinforces the company's commitment to returning value to shareholders and might be an attractive aspect for income-focused investors.
Sales of
Operating Income of
Board Declares
PORT WASHINGTON, NY / ACCESSWIRE / April 30, 2024 / Global Industrial Company (NYSE:GIC) today announced financial results for the first quarter ended March 31, 2024.
Performance Summary* (U.S. dollars in millions, except per share data) | ||||||||
Highlights | Quarter Ended March 31, | |||||||
| 2024 | 2023 | |||||||
| Net sales | $ | 323.4 | $ | 273.8 | ||||
| Gross profit | $ | 110.9 | $ | 98.4 | ||||
| Gross margin | 34.3 | % | 35.9 | % | ||||
| Operating income from continuing operations | $ | 17.4 | $ | 17.8 | ||||
| Operating margin | 5.4 | % | 6.5 | % | ||||
| Net income from continuing operations | $ | 13.1 | $ | 13.3 | ||||
| Net income per diluted share from continuing operations | $ | 0.34 | $ | 0.35 | ||||
| Net income (loss) from discontinued operations | $ | 0.1 | $ | (0.1 | ) | |||
| Net income (loss) per diluted share from discontinued operations | $ | 0.00 | $ | 0.00 | ||||
| * | Global Industrial Company manages its business and reports using a 52-53 week fiscal year that ends at midnight on the Saturday closest to December 31. For clarity of presentation, fiscal years and quarters are described as if they ended on the last day of the respective calendar month. The actual fiscal quarters ended March 30, 2024 and April 1, 2023, respectively. The first quarters of both 2024 and 2023 included 13 weeks. |
| Average daily sales is calculated based upon the number of selling days in each period, with Canadian sales converted to US dollars using the current year's average exchange rate. There were 64 selling days in the U.S. in each of the first quarters of 2024 and 2023, respectively, and in Canada, there were 62 selling days and 63 selling days in the first quarters of 2024 and 2023, respectively. |
First Quarter 2024 Financial Summary:
- Consolidated sales increased
18.1% to$323.4 million compared to$273.8 million last year. Excluding Indoff, acquired on May 19, 2023, sales increased4.2% and4.3% on an average daily sales basis. - Consolidated gross margin declined to
34.3% compared to35.9% last year. Excluding Indoff, gross margin was35.8% , a 10 basis point reduction to prior year. - Consolidated operating income from continuing operations decreased
2.2% to$17.4 million compared to$17.8 million last year. Excluding Indoff, operating income was$16.1 million , a decrease of9.6% . - Net income per diluted share from continuing operations decreased
2.9% to$0.34 compared to$0.35 last year.
Barry Litwin, Chief Executive Officer, said, "First quarter revenue improved
"We are focused on championing the customer across every facet of the business and delivering an exceptional end-to-end shopping experience. This includes enhancing the quality and value we provide, to elevating our position as a solutions provider and problem solver for our customers. We are making continued investments in sales, marketing, merchandising and customer service that will help us drive operating efficiencies, accelerate customer engagement, strengthen our competitive position and capture market share. We continue to differentiate our position in the market and in turn strengthen our ability to drive long-term performance."
At March 31, 2024, the Company had total working capital of
Earnings Conference Call Details
Global Industrial Company will host a conference call and question and answer session on its first quarter 2024 results today, April 30, 2024 at 5:00 p.m. Eastern Time. A live webcast of the remarks will be available on the Company's website at https://investors.globalindustrial.com in the events section. The webcast will also be archived on the website for approximately 90 days.
About Global Industrial Company
Global Industrial Company (NYSE:GIC), through its operating subsidiaries, is a value-added distributor. For 75 years, Global Industrial has gone the extra mile for its customers, currently offering hundreds of thousands of industrial and MRO products needed to run businesses and facilities. Global Industrial is committed to its customer-centric strategy, and utilizes a team of subject matter experts, products from its Global Industrial Exclusive BrandsTM and national vendor relationships to help customers succeed. Global Industrial, "We Can Supply That®".
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise. Any such statements that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management's estimates, assumptions and projections and are not guarantees of future performance. When used in this release, the words "anticipates," "believes," "estimates," "expects," "intends," and "plans" and variations thereof and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this report are based on the Company's beliefs and expectations as of the date of this report and are subject to risks and uncertainties which may have a significant impact on the Company's business, operating results or financial condition. Investors are cautioned that these forward-looking statements are inherently uncertain and undue reliance should not be placed on them. Important risk factors that may affect our future results of operations and financial condition are detailed from time to time in our Securities and Exchange Commission filings. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events, except as may be required by applicable law.
Investor/Media Contacts:
Mike Smargiassi / Ryan Golden
The Plunkett Group
212-739-6729
mike@theplunkettgroup.com / ryan@theplunkettgroup.com
GLOBAL INDUSTRIAL COMPANY
Condensed Consolidated Statements of Operations - Unaudited
(In millions, except per share amounts)
Quarter Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Net sales | $ | 323.4 | $ | 273.8 | ||||
Cost of sales | 212.5 | 175.4 | ||||||
Gross profit | 110.9 | 98.4 | ||||||
Gross margin | 34.3 | % | 35.9 | % | ||||
Selling, distribution and administrative expenses | 93.5 | 80.6 | ||||||
Operating income from continuing operations | 17.4 | 17.8 | ||||||
Operating margin | 5.4 | % | 6.5 | % | ||||
Interest and other expense, net | 0.2 | 0.2 | ||||||
Income from continuing operations before income taxes | 17.2 | 17.6 | ||||||
Provision for income taxes | 4.1 | 4.3 | ||||||
Net income from continuing operations | 13.1 | 13.3 | ||||||
Net income (loss) from discontinued operations | 0.1 | (0.1 | ) | |||||
Net income | $ | 13.2 | $ | 13.2 | ||||
Net income per common share from continuing operations: | ||||||||
Basic | $ | 0.34 | $ | 0.35 | ||||
Diluted | $ | 0.34 | $ | 0.35 | ||||
Net income (loss) per common share from discontinued operations: | ||||||||
Basic | $ | 0.00 | $ | 0.00 | ||||
Diluted | $ | 0.00 | $ | 0.00 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.34 | $ | 0.35 | ||||
Diluted | $ | 0.34 | $ | 0.35 | ||||
Weighted average common and common equivalent shares: | ||||||||
Basic | 38.2 | 38.1 | ||||||
Diluted | 38.4 | 38.2 | ||||||
GLOBAL INDUSTRIAL COMPANY
Condensed Consolidated Balance Sheets - Unaudited
(In millions)
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 29.9 | $ | 34.4 | ||||
Accounts receivable, net | 133.9 | 130.7 | ||||||
Inventories | 162.8 | 150.8 | ||||||
Prepaid expenses and other current assets | 11.1 | 13.9 | ||||||
Total current assets | 337.7 | 329.8 | ||||||
Property, plant and equipment, net | 20.1 | 20.0 | ||||||
Operating lease right-of-use assets | 81.0 | 84.4 | ||||||
Goodwill and intangibles | 68.5 | 69.3 | ||||||
Other assets | 10.1 | 9.9 | ||||||
Total assets | $ | 517.4 | $ | 513.4 | ||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 162.8 | $ | 160.1 | ||||
Operating lease liabilities | 14.1 | 14.1 | ||||||
Total current liabilities | 176.9 | 174.2 | ||||||
Operating lease liabilities | 77.8 | 81.4 | ||||||
Other liabilities | 2.5 | 2.6 | ||||||
Shareholders' equity | 260.2 | 255.2 | ||||||
Total liabilities and shareholders' equity | $ | 517.4 | $ | 513.4 | ||||
GLOBAL INDUSTRIAL COMPANY
Condensed Consolidated Statements of Cash Flows - Unaudited
(In millions)
Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income from continuing operations | $ | 13.1 | $ | 13.3 | ||||
Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 1.9 | 1.1 | ||||||
Stock-based compensation | 1.0 | 0.6 | ||||||
Provision for deferred taxes | 0.3 | 0.1 | ||||||
Change in working capital | (10.7 | ) | 12.9 | |||||
Other, net | 0.7 | 0.5 | ||||||
Net cash provided by operating activities from continuing operations | 6.3 | 28.5 | ||||||
Net cash provided by (used in) operating activities from discontinued operations | 0.1 | (0.2 | ) | |||||
Net cash provided by operating activities | 6.4 | 28.3 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property, plant and equipment | (1.3 | ) | (0.7 | ) | ||||
Net cash used in investing activities | (1.3 | ) | (0.7 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net repayments of short-term borrowings | 0.0 | (0.6 | ) | |||||
Dividends paid | (9.6 | ) | (7.7 | ) | ||||
Stock-based compensation share issuances, net | 0.0 | 0.4 | ||||||
Net cash used in financing activities | (9.6 | ) | (7.9 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 0.0 | 0.0 | ||||||
NET (DECREASE) INCREASE IN CASH | (4.5 | ) | 19.7 | |||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 34.4 | 28.5 | ||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 29.9 | $ | 48.2 | ||||
SOURCE: Global Industrial Company
View the original press release on accesswire.com
FAQ
<p>What were Global Industrial Company's first-quarter 2024 sales?</p>
Global Industrial Company reported first-quarter 2024 sales of $323.4 million.
<p>What was the operating income for Global Industrial Company in the first quarter of 2024?</p>
The operating income for Global Industrial Company in the first quarter of 2024 was $17.4 million.
<p>What was the net income per diluted share from continuing operations in the first quarter of 2024?</p>
The net income per diluted share from continuing operations in the first quarter of 2024 was $0.34.
<p>When will Global Industrial Company's dividend be payable?</p>
Global Industrial Company's dividend will be payable on May 20, 2024, to common stock shareholders of record on May 13, 2024.
