Global Industrial Company

Good afternoon, ladies and gentlemen, and welcome to Global Industrial's Third Quarter 2022 Earnings Call. At this time, I would like to turn the call over to Mike Smarjasi of the Plunkett Group. Please go ahead.

Thank you, and welcome to the Global Industrial Third Quarter 2022 Earnings Call. Leading today's call will be Barry Litwin, Chief Executive Officer, and Tex Clark, Senior Vice President and Chief Financial Officer. Formal remarks will be followed by a question and answer session. Today's discussion may include certain forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the forward-looking statements caption and that are risk factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q. The press release is available on the company's website and has been filed with the SEC on a Form 8-K. This call is the property of Global Industrial Company. I will now turn the call over to Barry Litwin.

Thanks, Mike. Good afternoon, everyone, and thank you for joining us. Third quarter revenue reached nearly $300 million, growing 7.6% over the third quarter last year. Gross margin remained healthy and increased modestly on a sequential basis to 35.7%, but was down from a record third quarter performance last year, which included the initial benefits of strong price rationalization and lower-cost FIFO inventory sell-through. During the quarter, our one-to-one managed sales channel led our growth, and we generated strong cash flow from operations. We further reduced our inventory position and continue to maintain a very strong balance sheet. While the current outlook remains one of caution, we are investing in growth and productivity initiatives and are proactively managing the business, to rapidly adapt to changing market conditions. Investment in sales, marketing, private brand, digital transformation, pricing analytics, and distribution are strengthening our long-term competitive position and allowing us to better focus on the needs and experience of the customer. One of our key growth initiatives is the expansion of customer relationships, both in terms of new customer acquisition and expanding share of wallet within existing accounts. For example, hospitality, and healthcare are large markets with tremendous potential, but ones in which we have historically guarded low penetration. We are targeting these opportunities by staying true to who we are, meeting with our core offering of furniture and decor, storage and shelving, and carts and trucks, while augmenting these solutions with additional products. We have paired this offering with a very deliberate marketing and sales approach that highlights our understanding of the unique needs of these end markets. Further, the same can be said of our large customer acquisition efforts, where the market is substantial and we're being very focused in our approach as we build out our team and target specific verticals. With both our new end market and large customer efforts remain in their early phases, we are pleased with the initial success and committed to building these efforts over time. Our managed sales team continues to lead our performance and demonstrate the value we provide customers through direct one-to-one relationships. The sales organization is capturing share by driving greater penetration, which in turn builds larger accounts and creates longer lasting relationships. Pricing intelligence and analytics is another critical area of investment that is enhancing our ability to continue navigating the dynamic price cost environment. By incorporating real-time market data, we are positioning to make timely decisions that allow us to maintain price competitiveness and preserve our margin profile. In the quarter, we completed the launch of our new digital e-commerce site. It includes enhanced functionality aimed at driving personalization of sales, marketing, and merchandising offerings, which is an important pillar of our customer-centric strategy. Finally, we recently commenced full operations at our new distribution center in Toronto, Canada. This facility will allow us to establish independent distribution pathways to our Canadian customer base. and consequently significantly increase service levels, improve efficiencies, and provide additional capacity to support long-term growth in the market. In closing, I believe we're a stronger company today than any time in our history. From the diversity of our customers and product offering, to the talent of our associates and management team, to the data analytics and digital capabilities, we continue to differentiate ourselves as leaders in what remains a highly fragmented distribution industry. We are not immune to the macroeconomic environment, but the investments we have and continue to make in our strategy should position us well to capture opportunities for the long-term market share growth and emerge from the current cycle in a stronger position. We are a nimble organization that utilize the flexibility of our strategy and ability to adjust to market conditions to navigate the challenges of the past two years, and we continue to do so today. We are focused on operational excellence and putting the customer at the center of everything we do. We believe we have the right strategy in place to draw on long-term performance and value for our stakeholders. I will now turn the call over to Tex.