Thank you, Ryan. Good afternoon, everyone. As Ryan shared, I'm Anesa Chaibi. I'm the CEO of Global Industrial. I joined in mid-February, so I am relatively new. By way of background, just to give you some context, I spent 16 years at GE . I'm also ex-Home Depot, and I ran the B2B side of the HD Supply portion that was called Facilities Maintenance. I did that for just under 11 years. I also ran a custom highly engineered OEM designer design fastener company that was a divestiture and carve-out by Anixter back in the late 2019 to 2020 or so. I have also been in and out of private equity. I most recently joined from Coalesce Capital and joined the firm, and I'm excited to be here today. As Ryan also mentioned, Tex Clark, my CFO, is here, and Mike Smargiassi is our IR lead.
This page, you know, is a cautionary statement about forward-looking statements. Not going to read it to you, but just wanted to draw your attention to it. We'll go ahead and jump in. You know, who is Global Industrial and what do we do? Ryan already highlighted some aspects of it, but we have a rich history of, we've been in existence for over 76 years now. We're located in Port Washington, New York, so right outside of Manhattan by roughly 20 mi or so. In 2024, we were $1.3 billion in top line, and we have seven distribution centers, five in the United States and two in Canada as well. We are experts in the big and bulky segment, which is a differentiated aspect of our business. We primarily go to market and deliver through less than truckload shipments and third-party carriers. We are very e-commerce-centric.
Over 60% of our transactions are online and have been for quite some time. Forty plus percent of our revenue are tied to exclusive brands. Typically, in the annual surveys that are done in the industrial distribution space, we usually rank within the top 15-20 or so, depending on any given year. Let's go ahead and start going further into how we're differentiated. We have a customer-centric strategy. The employee base is very much customer-centric, looking to go above and beyond for our customer base on an ongoing basis. We have tailored value propositions depending on the sectors or the industry verticals that we actually go to market with. As Ryan touched upon as well, we are very much steeped in the industrial equipment and supplies portion in the MRO, total addressable market.
We're always striving for operational excellence, whether it's within our DCs, whether it's within our back office functionality, and so forth. We also strive to have a frictionless customer experience. We have net promoter scores in place where we constantly are iterating and reviewing feedback that we're getting real time. Very important to us just because we don't necessarily own that last mile in our current construct. As I've already alluded to, e-business is a key enabler for us and is a digital platform that we take to market in the way that we transact with our customers. We have a number of touch points with our customers where we don't necessarily interact human to human, at least in the form and state of our current state organization and the business. All right.
We actually are in a, as you're aware, if you track industrial distribution, a large total addressable market. I would say we have been very much niche-focused in the big and bulky segments, but we're going to build off of that. What we already have in existence is a broad customer base that cuts across a variety of industry sectors and segments, whether it ranges from manufacturing to retail to wholesale to transportation. We also have accounts and specific customers that are tied to healthcare, hospitality, private and public sector, and so forth. That is actually a great foundation and platform to build off of to grow the business and extend. A thing to know about us is we have well over 400,000 plus customers. What is unique unto us is we don't have a lot of customer concentration.
It is less than 2% of any one customer. There is an opportunity there as we look future forward, to gain greater share of wallet and to further penetrate what we do. This gives you a sense of the types of product lines that we have and the top categories. On the left-hand side, you see a variety of different categories. Here, this is where we have new product introductions. We also look to face off to the industry verticals and segments that I just mentioned previously. Some new product line extensions you see on the right part of this slide include our nascent entry into healthcare, into hospitality, and having the right assortment and SKUs in those specific areas. Then vehicles for moving products and things within warehouses as an example.
This broad assortment is something that we have strong capability within, our private label brand purview as well. This gives you a sense of how private label brands very much play into the strength that we bring to market. In addition to the national brands that we take to market, we also have our, our exclusive brands. It represents roughly 40% of the revenue that we actually sell into the marketplace. It commands a price premium of over 15%-20% over the national brands that we distribute and carry. We have benefited by having roughly a 16 plus percent CAGR over the last five years as we have further penetrated and expanded those product lines and those categories into the marketplace. You know, we like to say, it is an extra chip in the cookie, if you will.
What we do is we very much focus on value-added features and functionality into a lot of these product lines. That is critical for our success as we go forward. Some of the new products that we've introduced, I'll just cover a few of these so that you have a look and feel or flavor for them. It ranges from portable power stations that are used by our customers to bolted teardrop pallet racking. An example here is Amazon. Amazon actually buys their racks that they use in their warehouses from us. That just gives you a sense of the customer base and the application of the product. On the bottom right, you see the digital wood laminate lockers.
In that, it's the hospitality segment, but think country clubs, things like that, that want lockers that look a bit more sophisticated. We have that capability to take that to market and to private label brand it as well. We have a team of over 20 engineers in the U.S., and then we have those that are abroad that are helping us find the right sources of supply and the right quality, the form, fit, and function that we demand in the quality of our products that we actually take to market. Okay. This gives you a sense of how proprietary brands have contributed to our growth, but also a summary and snapshot of some of the financials here. What you'll see is we've grown consistently over the last five years, a 6.3% CAGR on top line. On the right-hand side, you see our operating margin.
In 2022, you'll notice that was a high point for Global Industrial. There's a variety of different reasons for that. We had a lot of inventory that we were well positioned for, and we were able to capture that growth. We actually had an acquisition in 2023 that had a different profile. Although it added top line, roughly just under $200 million of revenue, it was lower margin, lower operating profits. What we'll do looking forward is to integrate that into the business and, more importantly, focus on margin expansion in the categories that they take to market as well. A thing to know about our business as Global is that our gross margins are in the mid-30%, and they've consistently been that way for quite some time. Okay. How is it that we're uniquely positioned in the marketplace?
This slide gives you a sense of kind of the evolving trends that play to our strengths. You know, e-commerce adoption, I've already touched upon a few times. It's a significant portion of how we go to market. It's an omni-channel that we take across all the verticals and the segments that we serve. We're well entrenched and have that functionality and capability, and we're continuously improving, just the speed, the efficiency, the layout of our website, and so forth. You know, Amazon set a new benchmark of customers, regardless of whether you're a consumer or B2B, where you expect to receive it, you know, next day, same day, whatever it might be.
Really positioning ourselves with a lot of digital tools on our website and our customer interactions to really understand what types of marketing pushes and programs that we deploy against that to try to gain greater share of mind, greater share of wallet, et cetera. AI and data analytics, we already have some of that already embedded real time as we capture kind of the trends and the way we see the company evolving. More importantly, further refining the offerings and/or the price points dynamically, especially with the market conditions and the macroeconomic shifting that has been occurring over the last few months in particular. We have been able to react real time with real data.
Pricing transparency and so forth, you know, we have, because of our exclusive brands and the higher margins that we benefit from, have enabled us to kind of manage our way through that without really having to compromise anything on the profitability profile from that standpoint. What really sets Global Industrial apart shows up on this next slide. What you can see is this is how we compare to small regional players, local players, and the large national players as well in the space. You know, it really lends itself to we're differentiated with the big and bulky. Not many other distributors tend to have those in stock while we do. Our exclusive brand and the design, form, fit, and functionality, the extra chip that we bring to market, along with the robust e-commerce functionality that we have that we've had for quite some time.
That's not new to us. It's been in existence for the history of the business for quite some time. The digital marketing funnel, I mean, it really is just very dynamically reacting real time to what's happening online and with our customers. Lastly, project management expertise. We acquired that with the Indoff acquisition in 2023, but we also had customers that reached out to us that asked us to help them project manage when they're putting in the big and bulky items, whether it's racking, whether it's the lockers that I alluded to just a few slides ago. It's really kind of building off that base, whether it's installation services. There are just some wrap-around services that we could deploy and take to market in addition to the product lines that we bring. How are we delivering growth?
You know, this is how we approach it. We have a very much a customer-centric culture within the organization, top to bottom. We deploy digital online, but then what we also have in the more recent years, we actually have captured GPO contracts that enable us to actually access certain customers that we did not have direct access to previously. There are opportunities there to further penetrate that. From that, those give us the license to hunt, if you will, to start to scale and grow the business. We do a lot of marketing and campaigns to drive customer retention, customer loyalty, to ultimately deliver growth in the share of wallet and category product expansion. There are a lot of things that our customers are asking us for, certain forms, certain features, functionality of a product line.
Lastly, we just kind of have that cycle go around once again, right, and continuously do that. A lot of high-touch, one-to-one experiences with our customer base. Okay. Go to market strategy is expanding the channels of opportunity. I have touched upon e-commerce. We will do business with our customers via EDI versus PunchOut, whatever, however they want to interact with us. One-to-one, we have 200 plus inside sales associates that actually face off with our customers on an ongoing basis. We also have some outside sales, although I would say we have opportunity to grow that and scale it in a more meaningful way. As I just alluded to, the group purchasing organizations give us access to both private and public sectors to really go after acquiring those customers and doing that on an ongoing basis. All right.
Financial profile or things to know about Global is, we have solid cash management and overall working capital efficiency. What I'll draw your attention to in particular is we have a debt-free balance sheet. All right. How we think about our capital allocation, it's investing in growth. We'll reinvest back into the business, whether it's in our e-commerce capability or functionality, trying to grow and scale the sales organization and, in particular, building out and scaling our operations and so forth as appropriate as we start to scale and grow and further reinvest in that, in those capabilities for the customers. We will look and entertain, strategic M&A, where it makes sense strategically and then, more importantly, synergistically going forward to see where we can expand kind of the product lines and what we do take to market.
As we turn to this page, this gives you a sense of how we think about returning capital to shareholders. We've had a quarterly dividend since 2016, and we've had a compounded annual growth rate of 13.1% from 2018 through 2025. We've actually paid back $650 million of dividends since January of 2018 with a few special dividends and with a current payout ratio of roughly 63%. We also have authorization to repurchase our shares. We've done some repurchases back in 2019, but we still have a lot of capacity and headroom there to be able to do additional ones as appropriate and as warranted. Our financial roadmap overall is to grow the business organically, exceeding the pace of the market. We ultimately will drive and want to drive profitability and our operating income bottom line, and then ultimately to optimize total shareholder return overall.
That's what I have prepared today. As I said, I've been here roughly a little over three months. I'm learning the business. I've been on the road nonstop. It's been a tremendous experience to get to have a better sense for the company. I thank you for your interest in Global Industrial. Now both myself and my colleagues here are happy to take any questions that you might have of us. Thank you for your time.
All right. Great. Maybe I'll kick it off. Anesa, can you just talk about—sounds pretty loud. Okay. Anesa, can you just talk about, you know, since you're new to the organization, what are some things that Global does well and then where do you see the biggest opportunities?
Yeah, no, great question, Ryan.
I mean, what Global Industrial does really well is they've done the hard parts really well, meaning proprietary brands. I've had to, in prior lives, start from scratch and have to build that. The level of investment and the level of focus and prioritization of that, that work has already been done. Now it's really looking at opportunities where we can extend beyond the exclusive brands and the big and bulky where we're primarily focused and expanding beyond that in the MRO segment to be able to scale the business and drive product adjacencies, natural extensions, and really reinforcing that as we go forward because our customers do have that interest. It's really deploying that as a focus for us going forward.
I appreciated the slide where you showed, you know, how you compare versus the big national players like a Fastenal or a Grainger.
I think just I'd love to hear it from you. How, how do you view Global as being different from those guys? How would you compare and contrast? The one thing that comes to mind for me is that you're much more exposed to the S&B customer versus the national accounts, which is where Grainger and Fastenal largely live.
Yeah, you know, that's another great question. You know, I'd say Grainger scale and size is not a good comparison for us just by default of what they do. They tend to be way more in—we're in the industrial. If you think, you know, maintenance, repair, and operations, MRO, we're primarily in the O, and it's—we have the potential to be able to extend beyond that and to really focus on maintenance and repair and having those product lines to be able to take to market.
That is something that is an opportunity. You know, they are great at what they do. And, you know, I'd say that we are good with where we've focused, but I think the opportunity is vast for us to extend beyond where we currently are, Ryan.
Do you have a strategy to go after the national accounts? And if so, what kind of investments do you need to make in order to get that business?
Yeah, you know, I'm not at liberty to discuss the strategy just yet, having been just, you know, a few months into it, but, yes, there is opportunity. I mean, as I mentioned, in the slides, we already have access to group purchasing organizations. I would say the opportunity is to invest in outside sales representatives and really go capture those opportunities in a meaningful way.
We primarily serve that either online or with inside sales. Now there's a potential to unleash that investment in outside selling resources in addition to what we already take to market.
Switching gears, you're a large importer from Asia. Maybe just level set, what % of COGS come from Asia? The follow-on question would be, how are you managing the tariffs?
I'll let Tex take that.
Thank you, Ryan. When we think about our business, we highlighted that just over 40% of the revenue is going to be our private brand or exclusive brand. That's going to be a mix of primarily Southeast Asia sourcing.
Now, while we haven't disclosed the individual country of origin, it's an area that it is exposure, but it's something that we've been working on for quite some time to diversify and de-risk from, especially from China-centric partners. It's an area that if we think back to 2019, when the first section 301 tariffs came in, it really did, we had to look at that and start, begin taking the steps to de-risk, moving to different countries, moving to different origin sources, and creating that duplication in the supply chain to say we have opportunities to buy elsewhere. Now, we do focus on quality products. When we think about our private brand, one of the best things we focus on is high quality, high, great total cost of ownership for our customers. So it doesn't, you can't do it overnight.
It's something that we have to really vet our supply chain partners, make sure they're able to deliver on time and the right quality product. Again, thinking about tariffs overall, it's so fluid today. It's an area that every day you look at the news, what happened, you wake up, what changed the day before. I think that's one area that we're really waiting for, for some certainty. It's an area we want to be proactive in everything we do, but right now, because of the fluidity of the situation, we have to be reactive. I think right now there's going to be a number of key levers that we're going to pull. We talked about it a little bit on the first quarter earnings call, but it's going to be a combination of, again, supplier cost negotiation. That's a piece of it.
Pricing, pricing power, and really looking at the portfolio overall, how to maintain margin dollars and margin rate through the pricing understanding. Again, we have good technology, good people really looking at pricing on a daily basis, understanding what the competitive set is doing, and understanding what the customer is willing to support. In the past, we were able to pass through price when we think about the 2019 tariffs, and then ultimately in the 2021, 2022 supply chain disruption with significant ocean freight costs, we were able to pass through at that time as well. Supplier diversification, and of course, resourcing where we can, finding domestic alternatives. There is not a tremendous robust opportunity for domestic alternatives, but it is an area that we will continue to work through.
Again, front of mind right now, it wasn't, we didn't come into the year thinking this was going to be the primary, strategic focus, but again, we have to react and we have to be ready. It's something that Anesa and our leadership team focus on every day at this point. We're, we feel we're as well positioned as we can be, just waiting to continue to see where that normal, that new normal level sets at.
Yeah. We're not in this, we're not in this all by ourselves, right? Everyone is impacted by this. We're just really dynamically mitigating the risk as best we can on an ongoing basis. That's all we can do at this point. In addition to it, it's executing on some changes fundamentally to the business that expand kind of the total addressable market that we're willing to pursue.
I want to ask you about the website, which I believe is a competitive advantage for you. You talked about it in the slides a little bit. Actually, Global has had a long legacy of being kind of first class in terms of website. Just explain for the room what that means. Like, how is your experience online better than the peers?
Tex, you want to take that? I've been here three months. He's been here 16, 17 years.
Again, e-com, we've always been e-commerce first. I mean, if you go back in history, we were a cataloger that really converted into an e-tailer.
When we think about electronic ordering and e-commerce, we think I should be all on e-commerce. We think overall e-orders, that connectivity, that connectivity with our customers through EDI, cXML, PunchOut catalogs, really making sure we're connecting to our customer efficiently as possible with them. When we think about where we stack up against the competitive set, it's such a broad and diverse industry. I mean, again, you go to the tier one players, the Graingers, the Fastenals, they all have great websites, great web experiences as well, of course. What we find in a such a fragmented industrial distribution market is that there's still such a long tail of competitors that still are nascent into e-commerce. To us, it feels like e-commerce, it should be second nature, but again, so many that are still, again, virtual only, one-to-one sales only.
They don't bring that full omnichannel approach to their business. I mean, we talked about a few moments ago, we acquired a business about two years ago. One of the things that attracted us is that they didn't have e-commerce. They were a pure one-to-one player. It's an area that is one of our core competencies that we know we can continue to help businesses, especially in that M&A area that don't have strong e-commerce, start building that capability. While it's early on with the Indoff business of what we're doing, we continue to see more opportunity to build that e-commerce capability.
I want to ask a couple of questions about the supply chain. I guess just high level, do you have DCs in all the places that you want them? Is there an opportunity to optimize that? That's the first question.
Yeah. I'd say we do have a national footprint in the U.S., and, you know, it allows us, enables us to serve the customer base that we have. Geographically, we could expand. I think it depends as the business starts to evolve and grow. There might be opportunities where we'll revisit. Do we have the right footprint? Are we in the right locations? Are they of the right size and scale, etc.? And what are we actually stocking? What's our stocking strategy and how we're choosing to take that to market? We also have two distribution centers in Canada as well. Right now, we think we're well positioned there to serve the markets that we do serve. You know, the goal is ultimately to grow the business. As it evolves, we'll evolve as well. We're revisited on an ongoing basis.
We have full support to make those investments at the right time, if it makes sense.
What % of your sales are shipped for next day versus two or three day? Is it a strategy of yours to consider investing in that supply chain to have more next day availability? Because a lot of the market wants that, depending on the product.
Yeah, I'd say, you know, I'll let Tex also speak to it, but I would say that, I mean, right now, the big and bulky that we distribute tends to have a longer lead time, right? It takes a little, a few more days, etc. Our customer base is very familiar with that. That's the expectation. I think we already do quite a bit of dropship that actually does go next day and serves the customer need.
I'd say as we look to extend beyond, the categories and the product lines and the assortment that we have, that the opportunity to have a quicker turnaround and deployment and execution and delivery would exist. Would we make the investment? Possibly. I'd say it's a little premature just where I am right now. In my past lives, yeah, we delivered next day, same day, whatever it might be by certain cutoffs and so forth. The business can execute some of that in given markets, depending on where the customer is physically located, but not something that is front and center as of, as of today.
I'll just add a little bit on to that. Thank you, Anesa. If we think about our distribution network, a little over half of our revenue will come out of our DC profile.
Because we are capital and light durable, or durable and light capital, primarily goods, we're planned purchases. A lot of times when the items that we're selling, customers are planning, they're putting that in. If we tell them it's going to be delivered in three or four days, they're really looking for us to keep that promise. If we plan on delivering something in four days, they want it in four days. They do not wake up and say, I need my picnic table or I need my shelving tomorrow. Something that, that it's okay to be a couple of days in that. We build our distribution network with that in mind, thinking about the five DCs to be able to hit our regions in a reasonable amount of time.
That's one area though, as we continue to evolve, we'll have to continue to think about how to invest differently, in the ability to meet more second day or next day needs. That's a piece also with our dropshippers, again, working with our dropship partners and our vendor suppliers. Again, how do you prioritize our business over other customers that will be ultimately shipping to our end users? That's something that we have our merchandising team and supply chain strategy really working closely with, with each of our vendors that kind of set those SLAs and those expectations that, again, customers expect that if something goes wrong, it's on Global Industrial and we got to make that right. It is an area that absolutely is important.
I think with the durable nature of our goods, again, right now it's a little bit more towards the planned purchase side.
Question. Yes. Given your background of GE and Coke people, what is?
Yeah, the low hanging fruit, that's a great question. I think I've already touched upon it, right? It's building out the product assortment, getting broader. You know, an example is, to bring it to life is we sell shrink wrap machines. We need to sell the shrink wrap. We have, you know, we've deployed lots of various types of infrastructure equipment. What else can we sell? Do we have replacement parts, things like that, that become more of that annuity? For me, it's more in the product assortment, the categories, the product lines, what we do along those lines. I'd also say there's opportunity to improve, like our operational efficiencies and so forth.
You know, really looking at the strategic priorities of the company. I'd say it cuts across the broad swath of the company and there's opportunity and the potential to take the company to the next level. Thank you.
All right. Bye. Thank you very much, everyone.
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