GLOBAL INDUSTRIAL Co

Previous wording

In April 2025, the Company completed the acquisition of an equipment service provider for approximately $4.3 million in cash. At closing, $0.3 million was held in escrow for the settlement of potential obligations. This acquisition broadens the Company's value-added offerings in certain key equipment categories.

Current wording

As previously reported in our second quarter 2025 Form 10-Q, in April 2025, the Company completed the acquisition of an equipment service provider for approximately $4.3 million in cash. At closing, $0.3 million was held in escrow for the settlement of potential obligations. This acquisition broadens the Company's value-added offerings in certain key equipment categories.

Previous wording

The Company generated revenue of $358.9 million, an increase of 3.2% over the year ago period. Results were led by sales to our largest strategic accounts. Gross margin increased 190 basis points over the second quarter of 2024 to 37.1%, benefiting from proactive price management and overall freight cost management. We also benefited in the period from timing benefit associated with the flow through of cost of sales from products purchased prior to the imposition of new tariffs in 2025. Management of our margin profile remains a key area of focus. As we move through the current cycle, we have started to see the timing benefit of pre-tariff inventory decline and anticipate the need to further increase price to mitigate the additional tariff costs that we are incurring. While our goal is to manage to price and cost neutrality, there may be increased volatility in our margin rates given the timing dynamics of on-hand inventory, market inflation associated with tariff related cost increases and efforts to continue to diversify our supply chain. In regards to recently enacted tariffs, our focus is on what we control – working closely with manufacturing and vendor partners, ensuring product availability, and providing customers with as much visibility as we can in a fluid environment. Selling, distribution and administrative expenses ("SD&A") primarily reflects the fixed cost nature of the business, including variable compensation expense, increased stock-based compensation expense and planned marketing investment. We expect SD&A expenses to be impacted by costs of integrating Indoff's operations into our overall internal controls over financial reporting and ongoing information technology ("IT") control remediation. We continue to maintain strong cost controls within discretionary spending, and will continue to evaluate additional steps to optimize our cost structure.

Current wording

The Company generated revenue of $353.6 million, an increase of 3.3% over the year ago period. Results were led by sales to our largest strategic accounts. Gross margin increased 160 basis points over the third quarter of 2024 to 35.6%, benefiting from proactive price management and overall freight cost management. We also benefited in the period from timing associated with the flow through of cost of sales from products purchased prior to the imposition of new tariffs in 2025. Management of our margin profile remains a key area of focus. As we moved through the quarter, we saw the timing benefit of pre-tariff inventory decline and we took pricing actions to mitigate the additional tariff costs that we are incurring. While our goal is to manage to price and cost neutrality, there may be increased volatility in our margin rates given the timing dynamics of on-hand inventory, market inflation associated with tariff related cost increases and efforts to continue to diversify our supply chain. Selling, distribution and administrative expenses ("SD&A") primarily reflects the fixed cost nature of the business, including variable compensation expense, increased stock-based compensation expense and planned marketing investment. We expect SD&A expenses to be impacted by costs of integrating Indoff's operations into our overall internal controls over financial reporting and ongoing information technology ("IT") control remediation. We continue to maintain strong cost controls within discretionary spending, and will continue to evaluate additional steps to optimize our cost structure.

Previous wording

There were no material changes in the Company’s significant accounting policies during the second quarter ended June 30, 2025.

Current wording

There were no material changes in the Company’s significant accounting policies during the third quarter ended September 30, 2025.

Previous wording

•Consolidated operating income from continuing operations increased 18.0% to $51.7 million compared to $43.8 million last year.

Current wording

•Consolidated operating income from continuing operations increased 18.5% to $26.3 million compared to $22.2 million last year.

Previous wording

•Net income per diluted share from continuing operations increased 25.0% to $0.65 compared to $0.52 last year.

Current wording

•Net income per diluted share from continuing operations increased 9.1% to $0.48 compared to $0.44 last year.

Previous wording

•Consolidated operating income from continuing operations increased 26.9% to $33.5 million, a quarterly record, compared to $26.4 million last year.

Current wording

•Consolidated operating income from continuing operations increased 18.2% to $78.0 million compared to $66.0 million last year.

Previous wording

•Net income per diluted share from continuing operations increased 15.1% to $0.99 compared to $0.86 last year.

Current wording

•Net income per diluted share from continuing operations increased 13.8% to $1.48 compared to $1.30 last year.

Previous wording

Three and Six Months Ended June 30, 2025 compared to the Three and Six Months Ended June 30, 2024

Current wording

Three and Nine Months Ended September 30, 2025 compared to the Three and Nine Months Ended September 30, 2024

Previous wording

The Company's net sales increased 3.2% to $358.9 million during the quarter ended June 30, 2025 compared to $347.8 million last year. For the six months ended June 30, 2025, net sales increased 1.3% to $679.9 million compared to $671.2 million last year. Net sales reflect the continued impact of strong sales among our largest strategic accounts in the quarter, partially offset by a reduction in our smallest and transactional customer sales. U.S. sales increased 3.0% for the quarter compared to the same period in 2024 and Canada sales increased 6.4%, 7.4% in local currency. For the six months ended June 30, 2025, U.S. sales increased 1.4% compared to the same period in 2024 and Canada sales decreased 1.2%, yet increased 2.5% in local currency.

Current wording

The Company's net sales increased 3.3% to $353.6 million during the quarter ended September 30, 2025 compared to $342.4 million last year. For the nine months ended September 30, 2025, net sales increased 2.0% to $1.03 billion compared to $1.01 billion last year. Net sales reflect the continued impact of strong sales among our largest strategic accounts in the quarter, partially offset by a reduction in our smallest and transactional customer sales. U.S. sales increased 2.9% for the quarter compared to the same period in 2024 and Canada sales increased 10.8%, 12.3% in local currency. For the nine months ended September 30, 2025, U.S. sales increased 1.9% compared to the same period in 2024 and Canada sales increased 2.8%, 5.7% in local currency.

Previous wording

There were 64 selling days in the U.S. in each of the second quarters of 2025 and 2024, respectively, and there were 128 selling days in the U.S. for the six months ended June 30, 2025 and 2024, respectively. In Canada, there were 63 selling days in the second quarter of 2025 compared to 64 selling days in the second quarter of 2024. There were 126 selling days in Canada for the six months ended June 30, 2025 and 2024, respectively.

Current wording

There were 63 selling days in the U.S. in each of the third quarters of 2025 and 2024, respectively, and there were 191 selling days in the U.S. for the nine months ended September 30, 2025 and 2024, respectively. In Canada, there were 62 selling days in each of the third quarters of 2025 and 2024, respectively, and there were 188 selling days in Canada for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Gross margin increased by 190 basis points to 37.1% in the second quarter of 2025 compared to 35.2% in the prior year and increased 120 basis points to 36.0% for the six months ended June 30, 2025 compared to 34.8% in the prior year. Gross profit benefited from price capture and temporary favorability of inventory valuation flowing through cost of sales. In addition, overall freight management, including both outbound and inbound logistics contributed to the increased margin, as well as, quality initiatives that reduced freight claims and customer returns.

Current wording

Gross margin increased by 160 basis points to 35.6% in the third quarter of 2025 compared to 34.0% in the prior year and increased 140 basis points to 35.9% for the nine months ended September 30, 2025 compared to 34.5% in the prior year. Gross profit benefited from price capture, partially offset by diminishing favorability of pre-tariff inventory valuation flowing through cost of sales. In addition, overall freight management, including both outbound and inbound logistics contributed to the increased margin, as well as, quality initiatives that reduced freight claims and customer returns.

Previous wording

For the three month period ended June 30, 2025, SD&A was 27.7%, nearly flat when compared to prior year of 27.6%. Strong general and discretionary cost control management and planned modest net advertising spend contributed to the result. Cost increases in the quarter included total salary and related costs of approximately $4.4 million, of which approximately $2.1 million related to variable compensation with both selling commissions and bonus pool increasing compared to prior year and increased stock-based compensation expenses of approximately $2.4 million compared to prior year. Prior year stock-based compensation reflected a benefit of approximately $1.0 million associated with accounting for executive transitions.

Current wording

For the three month period ended September 30, 2025, SD&A as a percent of sales was 28.2%, up 70 basis points when compared to prior year of 27.5%. Strong general and discretionary cost control management and planned modest net advertising spend contributed to the result, offset by increased variable compensation expense related to performance. Cost increases in the quarter included total salary and related costs of approximately $5.0 million, of which approximately $3.5 million related to variable compensation with both selling commissions and bonus pool increasing compared to prior year and increased stock-based compensation expenses of approximately $1.6 million compared to prior year.

Previous wording

For the six months ended June 30, 2025, SD&A was 28.4% compared to prior year of 28.2%. Cost increases included total salary and related costs of approximately $7.0 million, of which approximately $3.0 million related to variable compensation with both selling commissions and bonus pool increasing compared to prior year and increased stock-based compensation expenses of approximately $3.3 million compared to prior year. Prior year stock-based compensation reflected a benefit of approximately $1.0 million associated with accounting for executive transitions. These costs were partially offset by savings in net advertising spend of approximately $1.8 million.

Current wording

For the nine months ended September 30, 2025, SD&A was 28.4% compared to prior year of 28.0%. Cost increases included total salary and related costs of approximately $12.2 million, of which approximately $6.4 million related to variable compensation with both selling commissions and bonus pool increasing compared to prior year and increased stock-based compensation expenses of approximately $4.9 million compared to prior year. These costs were partially offset by savings in net advertising spend of approximately $1.3 million and savings of approximately $2.6 million related to contract and consulting services.

Previous wording

Operating margin for the three and six months periods ended June 30, 2025 increased 170 basis points and 110 basis points, respectively, compared to the same period in 2024 due to increased gross margin, continued strong general and discretionary cost control and lower spending on marketing and selling expenses.

Current wording

Operating margin for the three and nine months periods ended September 30, 2025 increased 90 basis points and 100 basis points, respectively, compared to the same period in 2024 due to increased gross margin, continued strong general and discretionary cost control offset by increased variable compensation expense related to performance.

Previous wording

Interest and other (income) expense, net from continuing operations was $0.3 million income and $0.1 million expense for the three month periods ended June 30, 2025 and 2024, respectively, and $0.2 million income and $0.3 million expense for the six months ended June 30, 2025 and 2024, respectively. The fluctuations in the exchange rates contributed to the changes in the quarter and year to date.

Current wording

Interest and other expense, net from continuing operations was $0.2 million and $0.0 million expense for the three month periods ended September 30, 2025 and 2024, respectively, and $0.0 million and $0.3 million for the nine months ended September 30, 2025 and 2024, respectively. The fluctuations in the exchange rates contributed to the changes in the quarter and year to date.

Previous wording

For the three month period ended June 30, 2025 and 2024, the Company reported income taxes in continuing operations of approximately $8.7 million and $6.1 million, respectively, related to its U.S., Canada and India operations including tax expense for certain U.S. states. For the six month period ended June 30, 2025 and 2024, the Company reported income tax expense in continuing operations of $13.3 million and $10.2 million, respectively, related to its U.S., Canada and India operations including tax expense for certain U.S. states.

Current wording

For the three month period ended September 30, 2025 and 2024, the Company reported income taxes in continuing operations of approximately $7.3 million and $5.4 million, respectively, related to its U.S., Canada and India operations including tax expense for certain U.S. states. For the nine month period ended September 30, 2025 and 2024, the Company reported income tax expense in continuing operations of $20.6 million and $15.6 million, respectively, related to its U.S., Canada and India operations including tax expense for certain U.S. states. The Company's increased tax expense in 2025 compared to 2024 is attributable to the higher taxable income in 2025 and a higher tax rate due to an increase in non-deductible executive compensation.

Previous wording

Our working capital increased $22.5 million primarily related to increased accounts receivable balances resulting from increased sales, higher cash balances and increased inventory balances. These increases were partially offset by increased accounts payable balances and accrued expenses and other current liabilities balances. Accounts receivable days outstanding were 39.0 in 2025 compared to 36.9 in 2024, inventory turns were 5.0 in 2025 compared to 5.5 in 2024 and accounts payable days outstanding were 47.7 in 2025 compared to 48.8 in 2024. We expect that future accounts receivable, inventory and accounts payable balances will fluctuate with net sales and the product mix of our net sales.

Current wording

Our working capital increased $35.3 million primarily related to increased accounts receivable balances resulting from increased sales, higher cash balances and increased inventory balances. These increases were partially offset by increased accounts payable balances and accrued expenses and other current liabilities balances. Accounts receivable days outstanding were 39.3 in 2025 compared to 37.5 in 2024, inventory turns were 5.0 in 2025 compared to 5.4 in 2024 and accounts payable days outstanding were 47.5 in 2025 compared to 48.2 in 2024. We expect that future accounts receivable, inventory and accounts payable balances will fluctuate with net sales and the product mix of our net sales.

Previous wording

Net cash provided by operating activities from continuing operations was $35.1 million in 2025 compared to $25.0 million provided in 2024, attributable to cash generated from net income adjusted by other non-cash items which provided $46.4 million in 2025 compared to $39.5 million provided by these items in 2024 primarily due to higher net income in 2025 and by the current quarter's stock-based compensation expense. Changes in our working capital accounts in 2025 used $11.3 million in cash compared to $14.5 million used in 2024, primarily the result of the changes in accounts receivable, inventory, accounts payable, inventory and prepaid expenses and other assets balances. Net cash provided by operating activities from discontinued operations was $0.0 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Net cash provided by operating activities from continuing operations was $57.7 million in 2025 compared to $34.6 million provided in 2024, attributable to cash generated from net income adjusted by other non-cash items which provided $69.8 million in 2025 compared to $58.8 million provided by these items in 2024 primarily due to higher net income in 2025 and higher stock-based compensation expense. Changes in our working capital accounts in 2025 used $12.1 million in cash compared to $24.2 million used in 2024, primarily the result of the changes in accounts receivable, inventory, income taxes, accounts payable, accrued expenses, other current liabilities and other liabilities balances. Net cash provided by operating activities from discontinued operations was $0.1 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net cash used in investing activities in 2025 totaled $5.6 million, with $4.0 million used for the equipment service provider acquisition and $1.6 million used for warehouse machinery and equipment for distribution facilities, computer equipment upgrades and molds. Net cash used in investing activities totaled $2.2 million in 2024 was used for warehouse machinery and equipment for distribution facilities, leasehold improvements, and computer equipment upgrades.

Current wording

Net cash used in investing activities in 2025 totaled $6.3 million, with $4.0 million used for the equipment service provider acquisition and $2.3 million used for warehouse machinery and equipment for distribution facilities, computer equipment upgrades and molds. Net cash used in investing activities totaled $3.1 million in 2024 was used for warehouse machinery and equipment for distribution facilities, leasehold improvements, and computer equipment upgrades.

Previous wording

Net cash used in financing activities totaled $18.9 million in 2025 primarily related to the regular quarterly dividends of $0.26 per common share which totaled approximately $20.1 million. Offsetting these payments were proceeds of $1.2 million from the issuance of common stock from stock option exercises, offset by payments for payroll taxes through shares withheld, which totaled $0.8 million and proceeds of $0.8 million from the issuance of common stock from our employee stock purchase plan. In 2024, net cash used in financing activities totaled $18.5 million primarily related to the regular quarterly dividends of $0.25 per common share which totaled approximately $19.2 million. Offsetting these payments were proceeds of $0.8 million from the issuance of common stock from our employee stock purchase plan and proceeds of $1.4 million from the issuance of common stock from stock option exercises, offset by payments for payroll taxes through shares withheld which totaled $1.5 million.

Current wording

Net cash used in financing activities totaled $28.7 million in 2025 primarily related to the regular quarterly dividends of $0.26 per common share which totaled approximately $30.2 million. Offsetting these payments were proceeds of $1.5 million from the issuance of common stock from our employee stock purchase plan and proceeds of $2.2 million from the issuance of common stock, offset by $2.2 million of payments for payroll taxes through shares withheld. In 2024, net cash used in financing activities totaled $27.1 million primarily related to the regular quarterly dividends of $0.25 per common share which totaled approximately $28.8 million. Proceeds from the issuance of common stock totaled $1.8 million, offset by payments for payroll taxes through shares withheld, which totaled $1.6 million and proceeds from the issuance of common stock from our employee stock purchase plan totaled $1.5 million.

Previous wording

The Company maintains a $125.0 million secured revolving credit facility with one financial institution, which has a five year term, maturing on October 19, 2026 and provides for borrowings in the United States. The credit agreement contains certain operating, financial and other covenants, including limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and the inventory advance rate computed as the lesser of 65% or 85% of the net orderly liquidation value (“NOLV”). Borrowings are secured by substantially all of the Borrower’s assets, as defined, including all accounts, accounts receivable, inventory and certain other assets, subject to limited exceptions, including the exclusion of certain foreign assets from the collateral. The interest rate under the amended and restated facility is computed at applicable market rates based on the Secured Overnight Financing Rate (“SOFR”), the Federal Reserve Bank of New York (“NYFRB”) or the Prime Rate, plus an applicable margin. The applicable margin varies based on borrowing base availability. As of June 30, 2025, eligible collateral under the credit agreement was $125.0 million, total availability was approximately $122.1 million, total outstanding letters of credit was $1.7 million, and total excess availability was $120.4 million. The Company was in compliance with all of the covenants of the credit agreement as of June 30, 2025.

Current wording

The Company maintains a $125.0 million secured revolving credit facility with one financial institution, which has a five year term, maturing on October 19, 2026 and provides for borrowings in the United States. The credit agreement contains certain operating, financial and other covenants, including limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and the inventory advance rate computed as the lesser of 65% or 85% of the net orderly liquidation value (“NOLV”). Borrowings are secured by substantially all of the Borrower’s assets, as defined, including all accounts, accounts receivable, inventory and certain other assets, subject to limited exceptions, including the exclusion of certain foreign assets from the collateral. The interest rate under the amended and restated facility is computed at applicable market rates based on the Secured Overnight Financing Rate (“SOFR”), the Federal Reserve Bank of New York (“NYFRB”) or the Prime Rate, plus an applicable margin. The applicable margin varies based on borrowing base availability. As of September 30, 2025, eligible collateral under the credit agreement was $125.0 million, total availability was approximately $122.1 million, total outstanding letters of credit was $1.6 million, and total excess availability was $120.5 million. The Company was in compliance with all of the covenants of the credit agreement as of September 30, 2025.

Previous wording

The expenses and capital expenditures described above will require significant levels of liquidity, which we believe can be adequately funded from our currently available cash resources, cash flow from operations and borrowing under our current credit facility. In 2025 we anticipate capital expenditures in the range of $2.0 to $3.0 million, though at this time we are not contractually committed to incur these expenditures.

Current wording

The expenses and capital expenditures described above will require significant levels of liquidity, which we believe can be adequately funded from our currently available cash resources, cash flow from operations and borrowing under our current credit facility. In 2025 we anticipate capital expenditures of approximately $3.0 million, though at this time we are not contractually committed to incur these expenditures.

Previous wording

We maintain our cash and cash equivalents in money market funds or their equivalents that have maturities of less than three months and in non-interest bearing accounts that partially offset banking fees. As of June 30, 2025, we had no investments with maturities of greater than three months. Accordingly, we do not believe that our cash balances have significant exposure to interest rate risk. At June 30, 2025 cash balances held in foreign subsidiaries totaled approximately $5.6 million. These balances are held in local country banks and are held primarily to support local working capital needs. The Company had over $170 million of liquidity (cash and undrawn line of credit) in the U.S. as of June 30, 2025.

Current wording

We maintain our cash and cash equivalents in money market funds or their equivalents that have maturities of less than three months and in non-interest bearing accounts that partially offset banking fees. As of September 30, 2025, we had no investments with maturities of greater than three months. Accordingly, we do not believe that our cash balances have significant exposure to interest rate risk. At September 30, 2025 cash balances held in foreign subsidiaries totaled approximately $4.9 million. These balances are held in local country banks and are held primarily to support local working capital needs. The Company had over $180 million of liquidity (cash and undrawn line of credit) in the U.S. as of September 30, 2025.

Previous wording

We are obligated under non-cancelable operating and finance leases for the rental of our facilities and certain of our equipment which expires at various dates through 2034. As of June 30, 2025 we were obligated for approximately $129.6 million under these non-cancelable leases. In 2025 we anticipate remaining cash expenditures of approximately $9.1 million for these operating leases. We have sublease agreements for unused space, as well as excess space in facilities we are currently occupying in the United States and Canada. In the event the sub lessee is unable to fulfill its obligations, we would be responsible for remaining rents due under the leases.

Current wording

We are obligated under non-cancelable operating and finance leases for the rental of our facilities and certain of our equipment which expires at various dates through 2034. As of September 30, 2025 we were obligated for approximately $139.2 million under these non-cancelable leases. In 2025 we anticipate remaining cash expenditures of approximately $4.2 million for these operating leases. We have sublease agreements for unused space, as well as excess space in facilities we are currently occupying in the United States and Canada. In the event the sub lessee is unable to fulfill its obligations, we would be responsible for remaining rents due under the leases.

Previous wording

Our purchase and other obligations consist primarily of purchase commitments for certain employment, consulting and service agreements. In addition to the previously mentioned commitments, at June 30, 2025, we had $1.7 million of standby letters of credit outstanding.

Current wording

Our purchase and other obligations consist primarily of purchase commitments for certain employment, consulting and service agreements. In addition to the previously mentioned commitments, at September 30, 2025, we had $1.6 million of standby letters of credit outstanding.