Global Industrial Reports Fourth Quarter and Full Year 2023 Financial Results
- Strong sales growth of 22.9% in Q4 and 9.3% for the full year 2023.
- Operating income increased by 20.9% in Q4 but decreased by 8.3% for the full year.
- Gross margin declined in both Q4 and full year 2023.
- CEO Barry Litwin emphasized record revenue, acquisitions, and growth initiatives for 2024.
- Company declared a 25% dividend increase and aims to drive future performance through investments and strategic opportunities.
- Consolidated gross margin declined in both Q4 and full year 2023.
- Operating income decreased by 8.3% for the full year.
- Excluding Indoff, sales declined for the full year 2023.
- Net income per diluted share from continuing operations decreased by 9.8% for the full year.
Insights
The reported 22.9% increase in fourth quarter sales to $320.1 million for Global Industrial Company indicates a significant uptick in revenue, which can be attributed to the strategic acquisition of Indoff. However, the organic sales growth of 5.1% suggests a more modest performance when factoring out the impact of the acquisition. The decline in gross margin from 36.0% to 33.8% year-over-year and the reduction in operating income from $105.2 million to $96.5 million signal potential cost pressures or pricing challenges that could affect profitability. Investors may view the 25% dividend increase as a positive signal of the company's confidence in its cash flow generation and long-term financial health.
Global Industrial Company's emphasis on their ACE strategy and investment in e-commerce and Exclusive Brands™ products reflects a focus on differentiation and enhancing customer experience. The reported strength in e-commerce channels aligns with broader market trends towards digitalization. The modest organic growth at the start of the year and cautious market environment suggest that the company is experiencing the same macroeconomic uncertainties that are prevalent across industries. This context is essential for stakeholders to align their expectations with the company's performance trajectory in a competitive landscape.
The company's financial results, including the operating cash flow of approximately $8.2 million in the quarter, reflect broader economic conditions such as inflation and exchange rate fluctuations. The decreased operating margin, from 9.0% to 7.6%, may indicate rising costs or decreased efficiency within the company's operations. The increase in working capital to $155.6 million and the liquidity available under the credit facility provide a cushion against market volatility and suggest a stable financial position that could support future investments and strategic opportunities.
- Fourth Quarter Sales of
$320.1 Million , Up22.9% ; Operating Income of$21.4 Million and Operating Margin of6.7% - Full Year Sales of
$1.27 Billion , Up9.3% ; Operating Income of$96.5 Million and Operating Margin of7.6% - Board Increases Dividend
25% ; Declares$0.25 Dividend
PORT WASHINGTON, NY / ACCESSWIRE / February 29, 2024 / Global Industrial Company (NYSE:GIC) today announced financial results for the fourth quarter ended December 31, 2023.
Highlights | Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales | $ | 320.1 | $ | 260.5 | $ | 1,274.3 | $ | 1,166.1 | ||||||||
Gross profit | $ | 108.2 | $ | 93.8 | $ | 435.8 | $ | 421.2 | ||||||||
Gross margin | 33.8 | % | 36.0 | % | 34.2 | % | 36.1 | % | ||||||||
Operating income from continuing operations | $ | 21.4 | $ | 17.7 | $ | 96.5 | $ | 105.2 | ||||||||
Operating margin | 6.7 | % | 6.8 | % | 7.6 | % | 9.0 | % | ||||||||
Net income from continuing operations | $ | 15.2 | $ | 13.4 | $ | 70.7 | $ | 78.1 | ||||||||
Net income per diluted share from continuing operations | $ | 0.40 | $ | 0.35 | $ | 1.84 | $ | 2.04 | ||||||||
Net income from discontinued operations | $ | 0.1 | $ | 0.4 | $ | 0.0 | $ | 0.7 | ||||||||
Net income per diluted share from discontinued operations | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.02 | ||||||||
*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 fourth quarter ended on December 30, 2023 and December 31, 2022, respectively. The fourth quarters of both 2023 and 2022 included 13 weeks and the full year of both 2023 and 2022 included 52 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 62 selling days in the U.S. and Canada in the fourth quarter of 2023 and 2022. There were 253 selling days in the U.S. in 2023 compared to 254 selling days in 2022 and 250 selling days in Canada in 2023 compared to 251 selling days in 2022. | ||||||||||||||||
Fourth Quarter 2023 Financial Summary:
- Consolidated sales increased
22.9% to$320.1 million in U.S. dollars compared to$260.5 million last year. Excluding Indoff, acquired on May 19, 2023, sales increased5.1% as compared to the year ago period and5.2% on an average daily sales basis . - Consolidated gross margin declined to
33.8% compared to36.0% last year. Excluding Indoff, gross margin was35.9% , a 10 basis point reduction to prior year. - Consolidated operating income from continuing operations increased
20.9% to$21.4 million compared to$17.7 million last year. Excluding Indoff, operating income was$19.3 million , an increase of9.0% . - Net income per diluted share from continuing operations increased
14.3% to$0.40 compared to$0.35 last year.
Year Ended 2023 Financial Summary:
- Consolidated sales increased
9.3% to$1.27 billion in U.S. dollars compared to$1.17 billion last year. Excluding Indoff, sales declined0.7% as compared to the year ago period and0.3% on an average daily sales basis. - Consolidated gross margin declined to
34.2% compared to36.1% last year. Excluding Indoff, gross margin was35.5% . - Consolidated operating income from continuing operations decreased
8.3% to$96.5 million compared to$105.2 million last year. Excluding Indoff, operating income was$90.8 million , a decrease of13.7% . - Net income per diluted share from continuing operations decreased
9.8% to$1.84 compared to$2.04 last year.
Barry Litwin, Chief Executive Officer, said "In 2023 we continued to execute against our ACE strategy. Revenue reached a record
"In 2024, we are committed to making the investments that will drive our future performance. Initiatives across the business are designed to elevate Global Industrial's position as an indispensable business partner, enhance the buying experience, expand our Global Industrial Exclusive Brands™ products, and highlight the value we bring every day to our customers. These efforts will position us to strengthen our competitive position, drive operational efficiencies, and capture share. While the market environment remains one of caution, we have seen modest organic growth to start the year. We remain well positioned to execute on our strategy, invest in our growth drivers, evaluate strategic opportunities, and build long-term value for our stakeholders."
At December 31, 2023, 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 fourth quarter 2023 results today, February 29, 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 Brands™ 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
The Plunkett Group
212-739-6729
mike@theplunkettgroup.com
GLOBAL INDUSTRIAL COMPANY
Condensed Consolidated Statements of Operations - Unaudited
(In millions, except per share amounts)
Quarter Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales | $ | 320.1 | $ | 260.5 | $ | 1,274.3 | $ | 1,166.1 | ||||||||
Cost of sales | 211.9 | 166.7 | 838.5 | 744.9 | ||||||||||||
Gross profit | 108.2 | 93.8 | 435.8 | 421.2 | ||||||||||||
Gross margin | 33.8 | % | 36.0 | % | 34.2 | % | 36.1 | % | ||||||||
Selling, distribution and administrative expenses | 86.8 | 76.1 | 339.3 | 316.0 | ||||||||||||
Operating income from continuing operations | 21.4 | 17.7 | 96.5 | 105.2 | ||||||||||||
Operating margin | 6.7 | % | 6.8 | % | 7.6 | % | 9.0 | % | ||||||||
Interest and other expense, net | 0.1 | 0.1 | 1.3 | 1.4 | ||||||||||||
Income from continuing operations before income taxes | 21.3 | 17.6 | 95.2 | 103.8 | ||||||||||||
Provision for income taxes | 6.1 | 4.2 | 24.5 | 25.7 | ||||||||||||
Net income from continuing operations | 15.2 | 13.4 | 70.7 | 78.1 | ||||||||||||
Net income from discontinued operations | 0.1 | 0.4 | 0.0 | 0.7 | ||||||||||||
Net income | $ | 15.3 | $ | 13.8 | $ | 70.7 | $ | 78.8 | ||||||||
Net income per common share from continuing operations: | ||||||||||||||||
Basic | $ | 0.40 | $ | 0.35 | $ | 1.85 | $ | 2.05 | ||||||||
Diluted | $ | 0.40 | $ | 0.35 | $ | 1.84 | $ | 2.04 | ||||||||
Net income per common share from discontinued operations: | ||||||||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.02 | ||||||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.02 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.40 | $ | 0.36 | $ | 1.85 | $ | 2.07 | ||||||||
Diluted | $ | 0.40 | $ | 0.36 | $ | 1.84 | $ | 2.06 | ||||||||
Weighted average common and common equivalent shares: | ||||||||||||||||
Basic | 38.2 | 38.0 | 38.1 | 38.0 | ||||||||||||
Diluted | 38.3 | 38.1 | 38.2 | 38.1 | ||||||||||||
GLOBAL INDUSTRIAL COMPANY
Condensed Consolidated Balance Sheets - Unaudited
(In millions)
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 34.4 | $ | 28.5 | ||||
Accounts receivable, net | 130.7 | 108.0 | ||||||
Inventories | 150.8 | 179.4 | ||||||
Prepaid expenses and other current assets | 13.9 | 9.8 | ||||||
Total current assets | 329.8 | 325.7 | ||||||
Property, plant and equipment, net | 20.0 | 21.0 | ||||||
Operating lease right-of-use assets | 84.4 | 90.3 | ||||||
Goodwill and intangibles | 69.3 | 6.6 | ||||||
Other assets | 9.9 | 11.6 | ||||||
Total assets | $ | 513.4 | $ | 455.2 | ||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 160.1 | $ | 140.1 | ||||
Short term debt | 0.0 | 0.6 | ||||||
Operating lease liabilities | 14.1 | 12.4 | ||||||
Total current liabilities | 174.2 | 153.1 | ||||||
Operating lease liabilities | 81.4 | 89.1 | ||||||
Other liabilities | 2.6 | 2.6 | ||||||
Shareholders' equity | 255.2 | 210.4 | ||||||
Total liabilities and shareholders' equity | $ | 513.4 | $ | 455.2 | ||||
GLOBAL INDUSTRIAL COMPANY
Condensed Consolidated Statements of Cash Flows - Unaudited
(In millions)
Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income from continuing operations | $ | 70.7 | $ | 78.1 | ||||
Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 6.4 | 3.9 | ||||||
Stock-based compensation | 3.0 | 4.5 | ||||||
Provision for deferred taxes | 2.0 | 0.0 | ||||||
Change in working capital | 26.7 | (38.2 | ) | |||||
Other, net | 3.2 | 1.5 | ||||||
Net cash provided by operating activities from continuing operations | 112.0 | 49.8 | ||||||
Net cash provided by operating activities from discontinued operations | 0.0 | 0.4 | ||||||
Net cash provided by operating activities | 112.0 | 50.2 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property, plant and equipment | (3.9 | ) | (7.4 | ) | ||||
Proceeds from disposals of property, plant and equipment | 0.0 | 0.3 | ||||||
Purchase of Indoff LLC, net of cash acquired | (72.3 | ) | 0.0 | |||||
Net cash used in investing activities from continuing operations | (76.2 | ) | (7.1 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net (repayments) borrowings under credit facility | (0.6 | ) | (3.9 | ) | ||||
Dividends paid | (30.6 | ) | (27.6 | ) | ||||
Stock-based compensation share issuances, net | 1.5 | 1.8 | ||||||
Net cash used in financing activities from continuing operations | (29.7 | ) | (29.7 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (0.2 | ) | (0.3 | ) | ||||
NET INCREASE IN CASH | 5.9 | 13.1 | ||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR | 28.5 | 15.4 | ||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 34.4 | $ | 28.5 | ||||
SOURCE: Global Industrial Company
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