GLOBAL INDUSTRIAL Co
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 27, 2026
GIC$46.40-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-26.
0000945114-25-000012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-27.
0001628280-26-012945
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 84 current paragraphs.
48 unchanged; 27 reworded; 8 added; 11 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
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 settlement of potential obligations. The accounts acquired are included in the accompanying consolidated financial statements from the date of acquisition. This acquisition broadens the Company's value-added offerings in certain key equipment categories.
Current report
2025 was a year of solid execution and significant progress for Global Industrial, with revenue growing 4.8% to $1.38 billion. We delivered strong margin performance, generated healthy cash flows and we continue to make progress on our strategic initiatives, which we believe will enable us to drive profitable top-line growth and scale the business in 2026 and beyond. This includes transforming our business model to become a more customer-centric organization along with reframing our go-to-market strategy to more effectively address our customer's needs.
Current report
•Consolidated gross margin increased to 35.5 % compared to 34.3% last year.
Current report
The Company's net sales increased 4.8% to $1.38 billion compared to $1.32 billion in 2024, benefiting from price capture, strong sales from our largest strategic accounts and volume improvement in the second half of the year, partially offset by a reduction in our smaller and transactional customer sales. U.S. sales increased 4.7% in 2025 compared to 2024 and Canada sales increased 7.0%, 9.2% in local currency in 2025 compared to 2024.
Current report
Gross margin was 35.5% compared to 34.3% in the prior year, a 120 basis point improvement. The year over year improvement resulted strategic pricing management including the timing benefit from pre-tariff inventory flowing through cost of sales and overall freight management, including both inbound and outbound logistics as well as quality initiatives that reduced freight claims and customer returns. In the prior year, the Company's margin reflected modest price actions taken throughout the year to offset both the increased costs of inbound ocean transportation, as well as, higher parcel fulfillment costs.
Current report
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES (“SG&A”)
Current report
SG&A costs as a percentage of sales increased approximately 30 basis points in 2025 compared to 2024. Cost increases included total salary and related costs of approximately $20.4 million, of which approximately $9.7 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 $4.6 million compared to prior year. Additional cost increases for net advertising spend of approximately $0.5 million was incurred offset by continued strong general and discretionary cost control. Prior year reflected a benefit associated with the reversal of executive stock compensation offset by approximately $0.7 million of recruitment costs associated with our CEO search.
Current report
The Company's operating margin improved by 100 basis points in 2025 compared to 2024, driven by the sales increase, increased gross margin, continued strong general and discretionary cost control offset by increased variable compensation expense related to performance.
Removed paragraphs (11)
Previous report
As we enter 2025, we believe we have the right plan in place to build upon the progress of the last year. Initiatives across the business are designed to elevate and highlight Global Industrial’s position as an indispensable business partner, and the value we bring every day to our customers. Investments in key performance areas are designed to strengthen our competitive position, drive operational efficiencies, and help us capture market share.
Previous report
•Consolidated gross margin increased to 34.3 % compared to 34.2% last year. Excluding Indoff, gross margin was 36.0% compared to 35.5% in the year ago period.
Previous report
The Company's net sales increased 3.3% to $1.32 billion compared to $1.27 billion in 2023, benefiting from last year's Indoff acquisition on May 19, 2023 and strong top line growth in the first half of 2024. As we continued through the year, results softened as we experienced continued weakness in our core small and medium business customer base. Excluding sales contributed by Indoff, full year and average daily sales decreased 0.6% and 0.5%, respectively, compared to prior year. U.S. sales, including Indoff, increased 3.5% compared to the full year of 2023 and Canada sales declined 1.0%. Canada sales increased 0.4% in local currency in 2024.
Previous report
Gross margin was 34.3% compared to 34.2% in the prior year, a 10 basis point improvement. Excluding Indoff, gross margin was 36.0%, a 50 basis points improvement compared to prior year. The year over year improvement was primarily the result of modest price actions taken throughout the year to offset both the increased costs of inbound ocean transportation, as well as, higher parcel fulfillment costs. In the prior year, the Company's margin reflected a nearly 40 basis point benefit in the fourth quarter of 2023 and 10 point basis benefit in fiscal year 2023, respectively, from a one-time settlement with a former less-than-truckload ("LTL") freight partner.
Previous report
SELLING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES (“SD&A”)
Previous report
SD&A costs as a percentage of sales increased approximately 160 basis points in 2024 compared to 2023. This increase reflects the impact of the planned investment in key sales and marketing growth initiatives, which generated negative leverage due to the soft customer demand environment, increased audit and consulting costs related to the remediation of certain IT general controls, increased healthcare costs, as well as, the full year's inclusion of Indoff costs. Cost increases include planned net marketing spend of approximately $10.5 million, which includes significant cost per click ("CPC") inflation, and a full year of inclusion of Indoff expenses of approximately $11.7 million compared to prior year. These increased Indoff cost inclusions related primarily to compensation and related costs of approximately $8.1 million, of which $5.1 million was for sales commissions and $1.1 million was for intangible asset amortization. Additional cost increases included total compensation and related costs of approximately $5.8 million and increased audit and consulting costs related to the remediation of certain IT general controls of approximately $2.0 million. The $5.8 million of increased compensation and related costs are attributed to approximately $3.2 million of increased salaries, approximately $0.5 million of increased variable compensation and approximately $1.6 million of increased healthcare costs offset by approximately $1.1 million in cost savings related to lower workers compensation claims in 2024. The Company also incurred approximately $0.7 million of recruitment costs associated with our CEO search.
Previous report
The Company's operating margin declined 150 basis points in 2024 compared to 2023, driven by the soft customer demand experienced in the second half of the year, proactive promotion and freight actions and planned investments in key growth initiatives.
Previous report
Business Combinations
Previous report
We follow ASC 805, Business Combinations, for our acquisition accounting. ASC 805 provides a framework for entities to use in evaluating whether an integrated set of assets and activities should be accounted for as an acquisition of a business or a group of assets. If the transaction is an acquisition of a business then the fair value of the transaction is used to establish a new accounting basis of the acquired entity. The acquirer recognizes and measures the assets acquired and liabilities assumed at their full fair values as of the date control is obtained.
Previous report
On May 19, 2023 the Company acquired 100% of the outstanding equity interests of Indoff, a business-to-business direct marketer of material handling products, commercial interiors and business products with operations in North America, for approximately $72.6 million in cash. The transaction was accounted for using the acquisition method of accounting and the fair value of the transaction was used to establish a new accounting basis of Indoff. The Company recognized and measured the assets acquired and liabilities assumed at their full fair values as of the date of the acquisition.
Previous report
The purchase price of Indoff was allocated between the net tangible assets acquired and the identified intangible assets, customer lists and trademarks, with the residual of the purchase price recorded as goodwill. Estimates were used in determining the fair value of the customer lists and trademarks. The significant assumptions used to estimate the fair value of the acquired intangible assets include projected revenue growth rates, customer retention rates, weighted average cost of capital rate, pretax earnings and resulting discounted cash flows. These assumptions are forward-looking and could be impacted by future business activity and market conditions. If in the future our estimates are determined to be materially different than our actual experience and these differences result in us failing to achieve projected results, we could have a material impairment of our intangible assets and/or goodwill.
Reworded paragraphs (27)
Previous wording
Global Industrial Company, through its subsidiaries, is a value-added industrial distributor of hundreds of thousands of industrial and MRO products in North America going to market through a system of branded e-commerce websites and relationship marketers.
Current wording
Global Industrial Company, through its subsidiaries, is a value-added distributor and source for industrial equipment and supplies in North America going to market through a system of branded e-commerce websites and relationship marketers.
Previous wording
The Company acquired 100% of the outstanding equity interests of Indoff, a business-to-business direct marketer of material handling products, commercial interiors and business products with operations in North America, on May 19, 2023 for approximately $72.6 million in cash. This acquisition expands the Company's presence in the MRO market in North America. The Indoff accounts are included in the accompanying consolidated financial statements from the date of acquisition. See Note 4, Acquisition, of Notes to Consolidated Financial Statements for additional financial information regarding the acquisition.
Current wording
The Company acquired 100% of the outstanding equity interests of Indoff, a business-to-business direct marketer of material handling products, commercial interiors and business products with operations in North America, on May 19, 2023 for approximately $72.6 million in cash. The Indoff accounts are included in the accompanying consolidated financial statements from the date of acquisition. This acquisition expands the Company's presence in the maintenance, repair and operations ("MRO") market in North America.
Previous wording
The Company sells a wide array of industrial and MRO products, which are marketed in North America. These industrial and MRO products are manufactured by other companies. Some products are manufactured for us and sold as a white label product, and some are manufactured to our own design and marketed as private brand products under the trademarks: Global™, GlobalIndustrial.com™, Nexel™, Paramount™, Interion™ and Absocold™.
Current wording
The Company specializes in providing maintenance, repair and operations solutions to businesses ranging from small to enterprise, and to the public sector. The Company is committed to its customer-centric strategy and uses industry expertise, products from its own Global Industrial Exclusive Brands TM , and nationally known brands to provide customers with a breadth of offerings to meet their needs. These industrial and MRO products are manufactured by other companies. Some products are manufactured for us and sold as a white label product, and some are manufactured to our own design and marketed as private brand products under the trademarks: Global™, GlobalIndustrial.com™, Nexel™, Paramount™, Interion™ and Absocold™.
Previous wording
The North American industrial products market is highly fragmented and we compete against companies in multiple distribution channels. Industrial products distribution is working capital intensive, requiring us to incur significant costs associated with the warehousing of many products, including the costs of maintaining inventory, leasing warehouse space, inventory management systems and employing personnel to perform the associated tasks. We supplement our on-hand product availability by maintaining relationships with major distributors and manufacturers, utilizing a combination of stock and drop-shipment fulfillment.
Current wording
The market for the sale of industrial products in North America is highly fragmented and is characterized by multiple distribution channels. Industrial products distribution is working capital intensive, requiring us to incur significant costs associated with the warehousing of many products, including the costs of maintaining inventory, leasing warehouse space, inventory management systems and employing personnel to perform the associated tasks. We supplement our on-hand product availability by maintaining relationships with major distributors and manufacturers, utilizing a combination of stock and drop-shipment fulfillment.
Previous wording
•Consolidated sales increased 3.3% to $1.32 billion in U.S. dollars compared to $1.27 billion last year. Excluding Indoff, sales declined 0.6% as compared to the year ago period and 0.5% on an average daily sales basis*.
Current wording
•Consolidated sales increased 4.8% to $1.38 billion in U.S. dollars compared to $1.32 billion last year and average daily sales increased 3.2% compared to prior year.
Previous wording
•Consolidated operating income from continuing operations decreased 16.6% to $80.5 million compared to $96.5 million last year. Excluding Indoff, operating income was $73.9 million, a decrease of 18.6%.
Current wording
•Consolidated operating income from continuing operations increased 21.2% to $97.6 million compared to $80.5 million last year.
Previous wording
•Net income per diluted share from continuing operations decreased 14.7% to $1.57 compared to $1.84 last year.
Current wording
•Net income per diluted share from continuing operations increased 17.8% to $1.85 compared to $1.57 last year.
Previous wording
*Average daily sales is calculated based upon the number of selling days in each period, with Canadian sales converted to U.S. dollars using the current year's average exchange rate. There were 253 selling days in the U.S. in 2024 and 2023 and 250 selling days in Canada in 2024 and 2023.
Current wording
*Average daily sales is calculated based upon the number of selling days in each period, with Canadian sales converted to U.S. dollars using the current year's average exchange rate. There were 257 selling days in the U.S. in 2025 compared to 253 selling days in 2024 and in Canada, there were 254 selling days in 2025 compared to 250 selling days in 2024.
Previous wording
There were 253 selling days in the U.S. in 2024 and 2023 and 250 selling days in Canada in 2024 and 2023.
Current wording
There were 257 selling days in the U.S. in 2025 compared to 253 in 2024 and 254 selling days in Canada in 2025 compared to 250 selling days in 2024.
Previous wording
Gross margin is dependent on variables such as product mix including sourcing and category, competition, pricing strategy, vendor volume rebates, freight pricing decisions including the use of free or other promotional freight plans, freight cost inflation including both domestic outbound freight as well as international inbound ocean freight, inventory valuation and obsolescence and other variables, any or all of which may result in fluctuations in gross margin.
Current wording
Gross margin is dependent on variables such as product mix including sourcing and category, trade policy inclusive of the imposition of tariffs, competition, pricing strategy, vendor volume rebates, freight pricing decisions including the use of free or other promotional freight plans, freight cost inflation including both domestic outbound freight as well as international inbound ocean freight, inventory valuation and obsolescence and other variables, any or all of which may result in fluctuations in gross margin.
Previous wording
Management of our margin profile remains a key focus for the Company. Performance will continue to reflect the impact of proactive promotion and freight actions as part of our competitive pricing initiatives, and ocean freight costs, which remain volatile and elevated. Consolidated gross margin will continue to also be impacted by Indoff's lower gross margin profile. The Company may also experience margin variability in future periods due to the current economic environment, inflationary pressures and historical seasonality.
Current wording
Management of our margin profile remains a key area of focus for the Company. Performance will continue to reflect the impact of strategic promotion and freight actions as part of our competitive pricing initiatives, tariff related actions and ocean freight costs. The Company continues to anticipate that there may be increased margin variability in future periods given the timing dynamics of on-hand inventory, inflationary pressures associated with tariff related cost increases and our efforts to continue to diversify our supply chain as well as historical seasonality.
Previous wording
Selling, distribution and administrative expenses totaled $371.5 million and $339.3 million for the years ended December 31, 2024 and 2023, respectively.
Current wording
Selling, general and administrative expenses totaled $392.6 million and $371.5 million for the years ended December 31, 2025 and 2024, respectively.
Previous wording
Interest and other expense, net from continuing operations was $0.2 million for 2024 and $1.1 million for 2023. In 2023, these expenses reflect the outstanding loan balance, utilized to partially fund the Indoff acquisition in May 2023, which were repaid in the third quarter of 2023. The Company also recorded foreign exchange losses of approximately $0.5 million in 2024 and $0.2 million in 2023.
Current wording
Interest and other expense, net from continuing operations was $0.1 million for 2025 and $0.2 million for 2024. The Company also recorded foreign exchange income of approximately $0.1 million in 2025 and foreign exchange losses of approximately $0.5 million in 2024.
Previous wording
The Company recorded net tax expense in continuing operations for 2023 of $24.5 million, or 25.7%. Tax expense from continuing operations was primarily the result of pretax income in the U.S. and India operations, including tax expense for certain U.S. states. Non-deductible expenses, including executive compensation, was approximately $2.5 million. The increase in the tax rate in 2023 as compared to 2022 is attributed to higher foreign taxable net income inclusion in the U.S. and additional state tax expense resulting from the acquisition of Indoff.
Current wording
The Company recorded net tax expense in continuing operations for 2025 of $25.6 million, or 26.2% related to its operations in the U.S, Canada and India, including tax expense for certain U.S. states. The increased tax expense in 2025 compared to 2024 is attributable to the higher taxable income in 2025 and a higher effective tax rate due to an increase in non-deductible executive compensation.
Previous wording
Our primary liquidity needs are to support working capital requirements in our business, funding recently declared and any future dividends, funding capital expenditures and inventory purchases, continuing investment in upgrading and expanding our technological capabilities specifically related to additional functionality and enhanced navigation of our new web platform, continuing investment in sales, marketing, merchandising, customer service and upgrading our distribution footprint and funding acquisitions. We currently believe that current cash on hand, cash flow from operations and our availability under our credit facility will be sufficient to fund our working capital and other cash requirements for at least the next twelve months. We believe our current capital structure and cash resources are adequate for our internal growth initiatives. To the extent our growth initiatives expand, including major acquisitions, we would seek to raise additional capital. We believe that, if needed, we can access public or private funding alternatives to raise additional capital.
Current wording
Our primary liquidity needs are to support working capital requirements in our business, funding recently declared and any future dividends, funding capital expenditures and inventory purchases, continuing investment in upgrading and expanding our technological capabilities specifically related to additional functionality and enhanced navigation of our new web platform, continuing investment in sales, marketing, merchandising, customer service and upgrading our distribution footprint and funding acquisitions. We rely upon operating cash flow and our credit facility to meet these needs. We currently believe that current cash on hand and cash flow from operations will be sufficient to fund our working capital and other cash requirements for at least the next twelve months. We believe our current capital structure and cash resources are adequate for our internal growth initiatives. To the extent our growth initiatives expand, including major acquisitions, we would seek to raise additional capital. We believe that, if needed, we can access public or private funding alternatives to raise additional capital.
Previous wording
Our working capital increased $28.6 million primarily related to higher cash and inventory balances, lower accounts payable, accrued expenses and other current liabilities balances offset by lower accounts receivable balances. Accounts receivable days outstanding were 37.7 in 2024 compared to 37.3 in 2023. Inventory turns were 5.2 in 2024 compared to 5.3 in 2023 and accounts payable days outstanding were 48.4 in 2024 compared to 50.0 in 2023. 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 $33.8 million primarily related to higher cash, accounts receivable and inventory balances, partially offset by higher accounts payable, accrued expenses and other current liabilities balances. Accounts receivable days outstanding were 38.9 in 2025 compared to 37.7 in 2024. Inventory turns were 5.1 in 2025 compared to 5.2 in 2024 and accounts payable days outstanding were 46.3 in 2025 compared to 48.4 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 $50.7 million attributable to cash generated from net income adjusted by other non-cash items which provided $72.7 million in 2024 compared to $85.3 million provided in 2023. This decrease is primarily the result of lower income in 2024 offset by increased depreciation and amortization expenses. In addition, changes in our working capital accounts used $22.3 million in 2024 compared to $26.7 million provided in 2023, primarily the result of changes in inventory and accounts payable balances. Net cash provided by operating activities from discontinued operations was $0.3 million in 2024 and 0.0 million in 2023.
Current wording
Net cash provided by operating activities from continuing operations was $77.7 million attributable to cash generated from net income adjusted by other non-cash items which provided $88.6 million in 2025 compared to $72.7 million provided in 2024 primarily due to higher net income in 2025 and higher stock-based compensation expense. Changes in our working capital accounts used $10.9 million in 2025 compared to $22.3 million used in 2024, primarily the result of changes in inventory, accounts payable, accrued expenses, other current liabilities and other liabilities and accounts receivable balances. Net cash provided by operating activities from discontinued operations was $0.1 million in 2025 and $0.3 million in 2024.
Previous wording
Net cash used in investing activities totaled $3.8 million and $76.2 million for 2024 and 2023 respectively In 2024, investing activities was used for warehouse machinery and equipment for distribution facilities, leasehold improvements and computer equipment upgrades. In 2023, $72.6 million was used for the purchase of Indoff, offset by $0.3 million of cash acquired, with the balance of $3.9 million used for warehouse machinery and equipment for our U.S. warehouses and new Canadian distribution center, leasehold improvements, computer equipment upgrades and molds.
Current wording
Net cash used in investing activities totaled $7.1 million and $3.8 million for 2025 and 2024, respectively. In 2025, $4.0 million was used for the acquisition of an equipment service provider and $3.1 million was used for warehouse machinery and equipment in our distribution facilities, and computer equipment upgrades and tooling. In 2024, investing activities was also used for warehouse machinery and equipment in our distribution facilities, leasehold improvements and computer equipment upgrades.
Previous wording
Net cash used in financing activities was $36.7 million in 2024 and $29.7 million in 2023. In 2024, net cash used in financing activities primarily related to the regular quarterly dividend of $0.25 per common share which totaled $38.4 million. Offsetting these payments were proceeds of $1.8 million from the issuance of common stock from stock option exercises, offset by payments for payroll taxes through shares withheld, which totaled approximately $1.6 million and proceeds of $1.5 million from the issuance of common stock from our employee stock purchase plan. In 2023, net cash used in financing activities primarily related to the regular quarterly dividend of $0.20 per common share which totaled $30.6 million and net repayments of short-term borrowings of $0.6 million. Offsetting these payments, were net proceeds of $0.1 million from the issuance of common stock from stock option exercises, net of payments for payroll taxes through shares withheld of approximately $0.5 million and proceeds of $1.4 million from the issuance of common stock from our employee stock purchase plan
Current wording
Net cash used in financing activities was $47.5 million in 2025 and $36.7 million in 2024. In 2025, net cash used in financing activities primarily related to the regular quarterly dividend of $0.26 per common share which totaled $40.3 million. Offsetting these payments were proceeds of $2.7 million from the issuance of common stock from stock option exercises, offset by payments for payroll taxes through shares withheld, which totaled approximately $2.3 million and proceeds of $1.5 million from the issuance of common stock from our employee stock purchase plan. In addition, $9.1 million was used for the purchase of treasury stock. In 2024, net cash used in financing activities primarily related to the regular quarterly dividend of $0.25 per common share which totaled $38.4 million. Offsetting these payments, were proceeds of $1.8 million from the issuance of common stock from stock option exercises, offset by payments for payroll taxes through shares withheld of approximately $1.6 million and proceeds of $1.5 million from the issuance of common stock from our employee stock purchase plan.
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 December 31, 2024, eligible collateral under the credit agreement was $125.0 million, total availability was $122.2 million, total outstanding letters of credit was $1.7 million, total excess availability was $120.5 million and there were no outstanding borrowings. The Company was in compliance with all of the covenants of the credit agreement in place as of December 31, 2024.
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 December 31, 2025, eligible collateral under the credit agreement was $125.0 million, total availability was $122.1 million, total outstanding letters of credit was $1.6 million, total excess availability was $120.5 million and there were no outstanding borrowings. The Company was in compliance with all of the covenants of the credit agreement in place as of December 31, 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 to be 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 2026 we anticipate capital expenditures to be in the range of $3.0 to $4.0 million, though at this time we are not contractually committed to incur these expenditures.
Previous wording
In the past we have engaged in opportunistic acquisitions, choosing to pay the purchase price in cash, and may do so in the future as favorable situations arise. However, a deep and prolonged period of reduced business spending could adversely impact our cash resources and force us to either forego future acquisition opportunities or to pay the purchase price using stock, debt or a combination of consideration which could have an adverse effect on our earnings. We believe that our cash balances and future cash flows from operations and availability under our credit facility will be sufficient to fund our working capital and other cash requirements for at least the next twelve months.
Current wording
In the past we have engaged in opportunistic acquisitions, choosing to pay the purchase price in cash, and may do so in the future as favorable situations arise. However, a deep and prolonged period of reduced business spending could adversely impact our cash resources and force us to either forego future acquisition opportunities or to pay the purchase price using stock, debt or a combination of consideration which could have an adverse effect on our earnings. We believe that our cash balances and future cash flows from operations will be sufficient to fund our working capital and other cash requirements for at least the next twelve months.
Previous wording
We maintain our cash and cash equivalents in money market funds or their equivalent that have maturities of less than three months and in non-interest bearing accounts that partially offset banking fees. As of December 31, 2024, 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 December 31, 2024 cash balances held in foreign subsidiaries totaled approximately $4.6 million. These balances are held in local country banks and are held primarily to support local working capital needs. The Company had in excess of $160 million of liquidity (cash and an undrawn line of credit) in the U.S. as of December 31, 2024.
Current wording
We maintain our cash and cash equivalents in money market funds or their equivalent that have maturities of less than three months and in non-interest bearing accounts that partially offset banking fees. As of December 31, 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 December 31, 2025 cash balances held in foreign subsidiaries totaled approximately $4.8 million. These balances are held in local country banks and are held primarily to support local working capital needs. The Company had in excess of $183 million of liquidity (cash and an undrawn line of credit) in the U.S. as of December 31, 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 expire at various dates through 2034. As of December 31, 2024 we were obligated for approximately $83.1 million under these non-cancelable operating leases. In 2025 we anticipate cash expenditures of approximately $18.4 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 expire at various dates through 2034. As of December 31, 2025 we were obligated for approximately $123.7 million under these non-cancelable operating leases. In 2026 we anticipate cash expenditures of approximately $21.4 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. As of December 31, 2024 we were obligated for approximately $34.0 million under these commitments. In 2025 we anticipate cash expenditures of approximately $10.5 million related to these commitments. In addition to the previously mentioned commitments, we had $1.7 million of standby letters of credit outstanding as of December 31, 2024.
Current wording
Our purchase and other obligations consist primarily of purchase commitments for certain employment, consulting and service agreements. As of December 31, 2025 we were obligated for approximately $30.8 million under these commitments. In 2026 we anticipate cash expenditures of approximately $7.7 million related to these commitments. In addition to the previously mentioned commitments, we had $1.6 million of standby letters of credit outstanding as of December 31, 2025.
Previous wording
The Company will record a contract liability in cases where customers pay in advance of the Company satisfying its performance obligation which typically occurs within a year of receipt. The Company had approximately $4.1 million of contract liabilities as of December 31, 2024 and $3.3 million as of December 31, 2023.
Current wording
The Company will record a contract liability in cases where customers pay in advance of the Company satisfying its performance obligation which typically occurs within a year of receipt. The Company had approximately $3.0 million of contract liabilities as of December 31, 2025 and $4.1 million as of December 31, 2024, and was recorded as deferred revenue in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets..
Previous wording
The Company offers customers rights to return product within a certain time, usually 30 days. The Company estimates its sales returns liability quarterly based upon its historical returns rates as a percentage of historical sales for the trailing twelve-month period. The total accrued sales returns liability was approximately $1.9 million at December 31, 2024 and $2.1 million at December 31, 2023, and was recorded as a refund liability in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets.
Current wording
The Company offers customers rights to return product within a certain time, usually 30 days. The Company estimates its sales returns liability quarterly based upon its historical returns rates as a percentage of historical sales for the trailing twelve-month period. The total accrued sales returns liability was approximately $1.7 million at December 31, 2025 and $1.9 million at December 31, 2024, and was recorded as a refund liability in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
See Note 4, Acquisition, of Notes to Consolidated Financial Statements for additional financial information regarding these acquisitions.