Global Industrial Company

Good afternoon, ladies and gentlemen, and welcome to Global Industrial's Third Quarter 2023 Earnings Call. At this time, I would like to turn the call over to Mike Smorjasi of the Plunkett Group. Please go ahead.

Thank you, and welcome to the Global Industrial Third Quarter 2023 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. During the call, we will reference both GAAP and organic metrics. Organic reflects the performance of the global industrial business of the May 2023 INDOS acquisition. In addition, the third quarter of 2023 had one less selling day in Canada versus the year-ago period. 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 under 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 by the SEC on a Form 8-K. This calls 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 total revenue was approximately $355 million, an increase of 18.8%, which included the addition of end-off for the full period. On an organic basis, we returned to growth as revenue improved 3.2%. This represented a nice rebound from the second quarter as we benefited from volume improvement, which more than offset continued price headwinds. Gross margin was 32.8% and was primarily impacted by the inclusion of Endoff's lower margin profile. During the quarter, we further normalized our inventory position, generated strong cash flow from operations, and fully paid off the outstanding balance on our credit facility. Topline performance was once again led by our e-commerce channel, as recent investments and proactive actions to drive digital transformation and enhance the online shopping experience are delivering returns. We continue to leverage digital marketing to deliver healthy customer acquisition and retention rates. Our web and marketing teams have been doing an outstanding job executing on our strategy, and we've been very pleased with the recent e-commerce performance. Our direct one-to-one sales channel remains a key focus to deepen customer relationships, build larger accounts, and expand into new end markets. While we did see some nice gains in select national and public sector accounts and overall order volume improved, we continue to see muted large order volume. This reflects the cautious customer behavior we have observed throughout the year. The customer remains at the center of everything we do. We are committed to making further investments in areas such as sales, marketing, price analytics and intelligence, and private brand that will continue to differentiate us in the market and drive our long-term performance. These efforts are designed to strengthen our competitive position and help us focus on the customer experience and the solutions they need to succeed. Q3 marked our first full quarter with Indoff, and we believe it has been a strong addition to global industrial. The business is performing in line with our expectations, and we've been pleased with initial efforts to capitalize on cross-selling and private brand opportunities. We remain excited by the new customers and markets it brings, as well as capabilities in project management and engineering solutions that broaden our offering and strengthen our value propositions. Finally, in October, we hosted two events that really highlight our core values and who we are as a company. The first was our annual national trade show on October 19th in Memphis, Tennessee, which was a tremendous success. We had exceptional customer turnout and supplier support. The show provided an invaluable opportunity for the team and me to meet with our customers and vendor partners in person. These discussions allowed us to strengthen relationships, gather critical feedback, and kick off 2024 planning. It reaffirmed how our ACE strategy is resonating throughout the business and the positive impact it's having. The second event was the corporate day of service we held last week in partnership with Helen Keller National Center, which is located near our corporate headquarters in Port Washington, New York. We worked side by side with the staff and residents at Helen Keller, assembling and installing an assortment of our outdoor furniture and products to enhance their campus, as well as introducing our first Braille water bottle filling station. This was a rewarding experience and exceptional opportunity to give back to the local community and build a lasting relationship with a world-class organization. Planning and executing these events took a tremendous amount of work and effort, and I'm really proud of the team and our partners who supported us. In closing, we believe we have the right strategy in place to drive long-term performance and value for our stakeholders. We're executing against the core pillars of our ACE strategy, committed to delivering an exceptional experience to customers and focused on operational excellence in every part of our business. The investments we are making in growth and productivity initiatives are designed to strengthen our competitive position. And while the environment remains one of caution, our proactive management approach and ability to adjust to market conditions places us in a position to continue to win in the market. In addition, with our strong balance sheet, we have the resources to execute on our organic and strategic investments. growth opportunities. I will now turn the call over to Tex.