Global Industrial Company (NYSE:GIC) Q3 2022 Results Conference Call November 1, 2022 5:00 PM ET

Company Participants

Mike Smargiassi - The Plunkett Group

Barry Litwin - CEO and Director

Tex Clark - Senior Vice President and Chief Financial Officer

Conference Call Participants

Anthony Lebiedzinski - Sidoti & Company

Paul Dircks - William Blair

Operator

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 Smargiassi of The Plunkett Group. Please go ahead.

Mike Smargiassi

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 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 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.

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 health care are large markets with tremendous potential, the ones in which we have historically garnered 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.