gic-20220630

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 June 30, 2022


☐			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 July 29, 2022 was 37,927,597.

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	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	22

Part II	Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 6.	Exhibits	24
	Signatures	25

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Available Information

We maintain an internet website at https://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 on the SEC’s website (www.sec.gov). Unless otherwise specified, 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, among others, 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

•Conflict Minerals Disclosure

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

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Global Industrial Company

Condensed Consolidated Balance Sheets

(In millions)


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	23.5	$	15.4
Accounts receivable, net	135.1		106.8
Inventories	205.7		172.8
Prepaid expenses and other current assets	7.8		6.4

Total current assets	372.1		301.4

Property, plant and equipment, net	16.8		16.5
Operating lease right-of-use assets	97.8		68.8
Deferred income taxes	10.5		10.3
Goodwill, intangibles and other assets	8.2		8.0


Total assets	$	505.4	$	405.0

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	128.7	$	114.4

Accrued expenses and other current liabilities	48.8		50.5
Short-term debt	30.0		4.5
Operating lease liabilities	11.9		10.5
Total current liabilities	219.4		179.9

Operating lease liabilities	95.9		68.5
Other liabilities	2.4		3.0
Total liabilities	317.7		251.4

Commitments and contingencies

Shareholders’ equity:
Preferred stock	0.0		0.0
Common stock	0.4		0.4
Additional paid-in capital	198.3		195.8
Treasury stock	(19.6)		(20.4)
Retained earnings (deficit)	5.6		(25.5)
Accumulated other comprehensive income	3.0		3.3
Total shareholders’ equity	187.7		153.6
Total liabilities and shareholders’ equity	$	505.4	$	405.0

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net sales	$	318.5	$	272.6	$	607.1	$	523.7
Cost of sales	205.5		174.6		386.3		348.4
Gross profit	113.0		98.0		220.8		175.3
Selling, distribution & administrative expenses	82.5		73.3		160.8		144.0

Operating income from continuing operations	30.5		24.7		60.0		31.3
Interest and other expense, net	0.3		0.1		0.7		0.2

Income from continuing operations before income taxes	30.2		24.6		59.3		31.1
Provision for income taxes	7.6		3.5		14.9		4.5
Net income from continuing operations	22.6		21.1		44.4		26.6
Net income from discontinued operations, net of tax	0.2		0.9		0.4		10.6
Net income	$	22.8	$	22.0	$	44.8	$	37.2

Net income per common share from continuing operations:
Basic	$	0.59	$	0.56	$	1.16	$	0.70
Diluted	$	0.59	$	0.55	$	1.16	$	0.70
Net income per common share from discontinued operations:
Basic	$	0.01	$	0.02	$	0.01	$	0.28
Diluted	$	0.01	$	0.02	$	0.01	$	0.28
Net income per common share:
Basic	$	0.60	$	0.58	$	1.17	$	0.98
Diluted	$	0.60	$	0.57	$	1.17	$	0.98

Weighted average common and common equivalent shares:
Basic	38.0		37.7		37.9		37.7
Diluted	38.1		37.9		38.0		37.9

Dividends declared	$	0.18	$	0.16	$	0.36	$	0.32

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	22.8	$	22.0	$	44.8	$	37.2
Other comprehensive income:
Foreign currency translation	(0.4)		0.1		(0.3)		0.2
Total comprehensive income	$	22.4	$	22.1	$	44.5	$	37.4

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net income from continuing operations	$	44.4	$	26.6
Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization	1.8		1.9

Provision for credit losses	1.0		1.2
Stock-based compensation	2.4		1.4
Benefit from deferred taxes	(0.3)		(2.7)

Changes in operating assets and liabilities:
Accounts receivable	(29.5)		(10.0)
Inventories	(33.0)		1.1
Prepaid expenses and other assets	(0.3)		(1.4)
Income taxes payable	(6.1)		(3.3)
Accounts payable	14.5		6.6
Accrued expenses, other current liabilities and other liabilities	3.0		(0.9)
Net cash (used in) provided by operating activities from continuing operations	(2.1)		20.5
Net cash provided by operating activities from discontinued operations	0.0		11.8
Net cash (used in) provided by operating activities	(2.1)		32.3

Cash flows from investing activities:
Purchases of property, plant and equipment	(2.1)		(2.1)



Net cash used in investing activities	(2.1)		(2.1)

Cash flows from financing activities:
Proceeds from short-term borrowings	95.4		19.6
Repayment of short-term borrowings	(69.9)		(19.6)
Dividends paid	(13.9)		(12.5)
Proceeds from issuance of common stock	0.7		2.5
Payment of payroll taxes on stock-based compensation through shares withheld	(0.4)		(2.0)
Proceeds from the issuance of common stock from employee stock purchase plan	0.6		0.5


Net cash provided by (used in) financing activities	12.5		(11.5)

Effects of exchange rates on cash	(0.2)		0.0

Net increase in cash	8.1		18.7
Cash, cash equivalents and restricted cash – beginning of period	15.4		24.0
Cash, cash equivalents and restricted cash – end of period	$	23.5	$	42.7

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Supplemental disclosures:
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	23.5	$	41.6
Restricted cash (1)	0.0		1.1
Cash, cash equivalents and restricted cash	$	23.5	$	42.7

(1)The Company had restricted cash collateralizing letters of credit outstanding of $0 and $1.1 million, at June 30, 2022 and 2021, respectively, which is recorded in Goodwill, intangibles and 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	$	34.6	$	2.6

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)

(In millions, except share data in thousands)


	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, 2022	37,854	$	0.4	$	195.8	$	(20.4)	$	(25.5)	$	3.3	$	153.6
Stock-based compensation expense				1.0								1.0
Issuance of restricted stock	22			(0.4)		0.4						0.0
Stock withheld for employee taxes	(11)					(0.4)						(0.4)
Proceeds from issuance of common stock	29			0.1		0.6						0.7
Issuance of shares under employee stock purchase plan	23			0.6								0.6
Dividends								(6.8)				(6.8)


Change in cumulative translation adjustment										0.1		0.1
Net income								22.0				22.0
Balances, March 31, 2022	37,917	$	0.4	$	197.1	$	(19.8)	$	(10.3)	$	3.4	$	170.8
Stock-based compensation expense				1.4								$	1.4
Issuance of restricted stock	10			(0.2)		0.2						0.0

Proceeds from issuance of common stock	1			0.0		0.0						0.0

Dividends								(6.9)				(6.9)

Change in cumulative translation adjustment										(0.4)		(0.4)
Net income								22.8				22.8
Balances, June 30, 2022	37,928	$	0.4	$	198.3	$	(19.6)	$	5.6	$	3.0	$	187.7

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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, 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

See Notes to Condensed Consolidated Financial Statements.

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Global Industrial Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.Basis of Presentation

The accompanying condensed consolidated financial statements of Global Industrial Company, collectively with its subsidiaries (the "Company") are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America are not required in these interim financial statements and have been condensed or omitted. All significant intercompany accounts and transactions have been eliminated in consolidation.

Global Industrial Company, through its operating subsidiaries, is a value-added industrial distributor of more than a million industrial and maintenance, repair and operation ("MRO") products in North America going to market through a system of branded e-commerce websites and relationship marketers. Global Industrial Company operates and is internally managed in one reportable business segment. The Company sells a wide array of industrial and MRO products, markets the Company has served since 1949. Because of the large number of products and product categories the Company offers, providing information on the amount of revenue derived from transactions with external customers for each product or groupings of product is impractical.

The Company’s discontinued operations consist of its former North American Technology Group business, which was sold in December 2015 and has been winding down its operations since then. For the three and six month periods ended June 30, 2022, net income from discontinued operations totaled $0.2 million and $0.4 million, respectively (see Note 4, Discontinued Operations). For the three and six month periods ended June 30, 2021, net income from discontinued operations totaled $0.9 million and $10.6 million, respectively.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2022 and the results of operations for the three and six month periods ended June 30, 2022 and 2021, statements of comprehensive income for the three and six month periods ended June 30, 2022 and 2021, cash flows for the six month periods ended June 30, 2022 and 2021 and changes in shareholders’ equity for the three and six month periods ended June 30, 2022 and 2021. The December 31, 2021 Condensed Consolidated Balance Sheet has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2021 and for the year then ended included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results for the six month period ended June 30, 2022 are not necessarily indicative of the results for the entire year.

Global Industrial Company manages its business and reports using a 52-53 week fiscal year that ends at midnight on the Saturday closest to December 31. For clarity of presentation herein, fiscal years and quarters are referred to as if they ended on the traditional calendar month. The actual fiscal second quarters ended on July 2, 2022 and July 3, 2021, respectively. The second quarters of both 2022 and 2021 included 13 weeks and the first six months of both 2022 and 2021 included 26 weeks.

Recent Accounting Pronouncements

Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure.

There were no accounting pronouncements issued in the quarter or with future effective dates that are either applicable or are expected to have a material impact on the Company's Condensed Consolidated Financial Statements.

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2.Revenue

Disaggregation of Revenues

The Company believes its presentation of revenue by geography most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and industry factors, including fluctuations in exchange rates between the U.S. and Canada. The following table presents the Company's revenue from continuing operations by geography for the three and six months ended June 30, 2022 and 2021, respectively (in millions):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net sales:
United States	$	299.8	$	253.6	$	567.0	$