gic-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER 1-13792

Global Industrial Company

(Exact name of registrant as specified in its charter)


Delaware						11-3262067
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

11 Harbor Park Drive

Port Washington, New York 11050

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (516) 608-7000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($.01 par value)	GIC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐						Accelerated filer ☒
Non-accelerated filer ☐						Smaller reporting company ☐
						Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

The number of shares outstanding of the registrant’s Common Stock as of October 29, 2021 was 37,813,547.

TABLE OF CONTENTS


Available Information

Part I	Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32

Part II	Other Information
Item 1.	Legal Proceedings	33
Item 6.	Exhibits	34

	Signatures	35

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Available Information

We maintain an internet web site at investors.globalindustrial.com. We file reports with the Securities and Exchange Commission (“SEC”) and make available free of charge on or through this website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including all amendments to those reports. These are available as soon as is reasonably practicable after they are filed with the SEC. All reports mentioned above are also available from the SEC’s website (www.sec.gov). The information on our website is not part of this or any other report we file with, or furnish to, the SEC.

Our Board of Directors has adopted the following corporate governance documents with respect to the Company (the “Corporate Governance Documents”):

•Corporate Ethics Policy for officers, directors and employees

•Charter for the Audit Committee of the Board of Directors

•Charter for the Compensation Committee of the Board of Directors

•Charter for the Nominating/Corporate Governance Committee of the Board of Directors

•Corporate Governance Guidelines and Principles

In accordance with the corporate governance rules of the New York Stock Exchange, each of the Corporate Governance Documents is available on our Company web site, investors.globalindustrial.com.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Global Industrial Company

Condensed Consolidated Balance Sheets

(In millions)


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	54.1	$	22.4
Accounts receivable, net	119.5		102.3
Inventories	141.4		132.3
Prepaid expenses and other current assets	7.0		6.8

Total current assets	322.0		263.8

Property, plant and equipment, net	17.4		16.6
Operating lease right-of-use assets	71.4		77.3
Deferred income taxes	9.9		7.6
Goodwill and intangibles	6.9		7.0
Other assets	2.2		2.6

Total assets	$	429.8	$	374.9

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	134.7	$	125.4

Accrued expenses and other current liabilities	55.8		50.7
Operating lease liabilities	10.3		10.3
Total current liabilities	200.8		186.4

Other liabilities	4.7		4.5
Operating lease liabilities	71.0		77.2
Total liabilities	276.5		268.1

Commitments and contingencies

Shareholders’ equity:
Preferred stock	0.0		0.0
Common stock	0.4		0.4
Additional paid-in capital	195.0		193.5
Treasury stock	(21.1)		(24.0)
Retained (deficit) earnings	(24.4)		(66.5)
Accumulated other comprehensive income	3.4		3.4
Total shareholders’ equity	153.3		106.8
Total liabilities and shareholders’ equity	$	429.8	$	374.9

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net sales	$	277.4	$	285.7	$	801.1	$	755.1
Cost of sales	175.4		183.4		523.8		491.3
Gross profit	102.0		102.3		277.3		263.8
Selling, distribution & administrative expenses	71.4		70.9		215.4		200.8

Operating income from continuing operations	30.6		31.4		61.9		63.0
Interest and other (income) expense, net	0.2		(0.1)		0.4		0.1

Income from continuing operations before income taxes	30.4		31.5		61.5		62.9
Provision for income taxes	7.2		7.4		11.7		15.2
Net income from continuing operations	23.2		24.1		49.8		47.7
Net (loss) income from discontinued operations	(0.1)		0.5		10.5		1.5
Net income	$	23.1	$	24.6	$	60.3	$	49.2

Net income per common share from continuing operations:
Basic	$	0.61	$	0.64	$	1.31	$	1.26
Diluted	$	0.61	$	0.64	$	1.31	$	1.26
Net (loss) income per common share from discontinued operations:
Basic	$	0.00	$	0.01	$	0.28	$	0.04
Diluted	$	0.00	$	0.01	$	0.28	$	0.04
Net income per common share:
Basic	$	0.61	$	0.65	$	1.59	$	1.30
Diluted	$	0.61	$	0.65	$	1.59	$	1.30

Weighted average common and common equivalent shares:
Basic	37.8		37.5		37.7		37.6
Diluted	38.0		37.6		37.9		37.7

Dividends declared	$	0.16	$	0.14	$	0.48	$	1.42

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	23.1	$	24.6	$	60.3	$	49.2
Other comprehensive income:
Foreign currency translation	(0.2)		0.3		0.0		0.1
Total comprehensive income	$	22.9	$	24.9	$	60.3	$	49.3

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income from continuing operations	$	49.8	$	47.7
Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization	2.8		3.1

Provision for credit losses	1.8		1.4
Stock-based compensation	2.0		3.5
Benefit from deferred taxes	(2.4)		(0.5)

Changes in operating assets and liabilities:
Accounts receivable	(19.1)		(27.3)
Inventories	(9.1)		(19.9)
Prepaid expenses and other assets	(0.2)		(3.1)
Income taxes payable	2.3		4.5
Accounts payable	11.3		14.1
Accrued expenses, other current liabilities and other liabilities	0.1		18.0
Net cash provided by operating activities from continuing operations	39.3		41.5
Net cash provided by operating activities from discontinued operations	11.6		0.9
Net cash provided by operating activities	50.9		42.4

Cash flows from investing activities:
Purchases of property, plant and equipment	(3.4)		(1.2)



Net cash used in investing activities	(3.4)		(1.2)

Cash flows from financing activities:
Proceeds from short-term borrowings	19.6		0.0
Repayment of short-term borrowings	(19.6)		0.0
Dividends paid	(18.6)		(53.9)
Proceeds from issuance of common stock	3.8		0.5
Payment of payroll taxes on stock-based compensation through shares withheld	(2.5)		(0.4)
Proceeds from the issuance of common stock from employee stock purchase plan	1.1		0.8

Purchase of treasury shares	0.0		(7.0)
Net cash used in financing activities	(16.2)		(60.0)

Effects of exchange rates on cash	(0.1)		0.0

Net increase (decrease) in cash	31.2		(18.8)
Cash, cash equivalents and restricted cash – beginning of period	24.0		97.2
Cash, cash equivalents and restricted cash – end of period	$	55.2	$	78.4

See Notes to Condensed Consolidated Financial Statements.

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Supplemental disclosures:
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	54.1	$	78.4
Restricted cash (1)	1.1		0.0
Cash, cash equivalents and restricted cash	$	55.2	$	78.4

(1) The Company has restricted cash collateralizing letters of credit outstanding of $1.1 million, $1.6 million and $0 million, as of 9/30/2021, 12/31/2020 and 9/30/2020, respectively, which are recorded in Other assets in the accompanying Condensed Consolidated Balance Sheets.

Supplemental disclosures of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2.6	$	27.6

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)

(In millions)


	Common Stock
	Number of Shares Outstanding	Amount		Additional Paid-in Capital		Treasury Stock		Retained (Deficit) Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
Balances, January 1, 2021	37,552	$	0.4	$	193.5	$	(24.0)	$	(66.5)	$	3.4	$	106.8
Stock-based compensation expense				0.4								0.4
Issuance of restricted stock	65			(1.1)		1.1						0.0
Stock withheld for employee taxes	(47)					(1.9)						(1.9)
Proceeds from issuance of common stock	119			(0.2)		2.5						2.3
Issuance of shares under employee stock purchase plan	29			0.5								0.5
Dividends								(6.0)				(6.0)


Change in cumulative translation adjustment										0.1		0.1
Net income								15.2				15.2
Balances, March 31, 2021	37,718	$	0.4	$	193.1	$	(22.3)	$	(57.3)	$	3.5	$	117.4
Stock-based compensation expense				1.0								$	1.0
Issuance of restricted stock	8			(0.1)		0.1						0.0
Stock withheld for employee taxes	(4)					(0.1)						(0.1)
Proceeds from issuance of common stock	15			(0.2)		0.4						0.2

Dividends								(6.1)				(6.1)

Change in cumulative translation adjustment										0.1		0.1
Net income								$	22.0			22.0
Balances, June 30, 2021	37,737	$	0.4	$	193.8	$	(21.9)	$	(41.4)	$	3.6	$	134.5
Stock-based compensation expense				0.6								0.6
Issuance of restricted stock	3											0.0
Stock withheld for employee taxes	(13)					(0.5)						(0.5)
Proceeds from issuance of common stock	61					1.3						1.3
Issuance of shares under employee stock purchase plan	26			0.6								0.6
Dividends								(6.1)				(6.1)

Change in cumulative translation adjustment										(0.2)		(0.2)
Net income								23.1				23.1
Balances, September 30, 2021	37,814	$	0.4	$	195.0	$	(21.1)	$	(24.4)	$	3.4	$	153.3

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	Common Stock
	Number of Shares Outstanding	Amount		Additional Paid-in Capital		Treasury Stock		Retained (Deficit) Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
Balances, January 1, 2020	37,679	$	0.4	$	189.7	$	(20.4)	$	2.8	$	3.0	$	175.5
Stock-based compensation expense				1.0								1.0
Issuance of restricted stock	36			(0.6)		0.6

SEC Form 10-Q filed by Global Industrial Company