Okay, good afternoon, or good morning if you're out on the West Coast. Thank you very much for joining us at the Sidoti September 2025 Investor Conference. My name is Anthony Lebiedzinski, and I'm the Equity Research Analyst at Sidoti, who covers Global Industrial Company, ticker symbol GIC. We are very pleased to have with us today Anesa Chaibi, the CEO, and Tex Clark, the CFO. The format for today will be a management presentation for the first 20 or so minutes, followed by Q&A. We will have a total of 30 minutes. For those of you in the audience who would like to ask a question, please type your question into the Q&A box at the bottom of your Zoom screen, and I will read the questions out loud. So, with no further delay, Anesa, the floor is yours.
Great, great. Good morning, or good afternoon, depending on where you are. Thanks, Anthony. Appreciate that. So, as Anthony shared, I'm Anesa Chaibi. I'm the CEO of Global Industrial. I joined in mid-February, so just a couple of months into my tenure, but I'm excited to be the leader of this organization. And with me today, as he mentioned, Tex Clark is my CFO, and Mike Smargiassi is our Investor Relations Leader, so he's also on this call with us. As you see on this page, right, forward-looking statements, cautionary statement. I'm not going to read it to you as you're all very familiar with it. We'll go ahead and jump to the next slide, and I'll give you an overview of the company. Global Industrial is one of the leading players of industrial distribution in the industrial distribution space. In 2024, we delivered $1.32 billion of revenue.
We have seven distribution centers in the U.S. and Canada, five in the U.S. specifically, and two in Canada. We take to market a lot of the product lines you see in the center of that slide. In many cases, we are the experts in the big and bulky sector. We have roughly 40% of our revenue is exclusive brands, and the balance would be national brands as well and other complementary products that we take to market. We have roughly just under 2,000 employees across the U.S. and Canada and globally, and we have ranked in the top 20 of the industrial distribution rankings across the board. The company is located about 20 miles outside of Manhattan in Port Washington, New York, and we have a rich history of innovation and bringing various products, as you see on this slide, to market.
The rich history that we have, we've been in existence for well over 75 plus years. You know, the other thing that I'll call out is that we have paid a regular quarterly dividend since 2016, and most recently, we increased to $0.26, or up $0.01 in February of 2025 this year. If we go ahead and turn to the next slide, Tex, this just gives you the overview of how I'll walk through the presentation. If we go ahead and move forward, how do we get to where we are today and what's our primary focus? On this slide, what you see is success in 2025 and beyond is guided by our customer-centric strategy. It really enables us and allows us to deliver a unique and personalized experience for our customers.
The premise of it is to improve our customer engagement, to grow a greater share of wallet, and to focus on category expansion to capture that greater share of wallet. What it translates for us is to be able to generate operating leverage from our current operations and investments over time, just really building off that strength and that core capability. You know, overall, for us, the entire company is focused on serving customers' needs and to enable it to be a frictionless end-to-end experience, and that's something that we're constantly striving and focused on continuously improving. It really, you know, at this juncture, what I'm championing in a meaningful way is to have a more customer-centric culture and just creating a level of customer intimacy to take the company to the next level, and what that really will allow us to do is to build a greater competitive advantage.
We do this by a lot of digital enablement across the company, whether it's how we interact with our customers or just how we do our business day-to-day. And what this really positions us well to do is to align our team to enable growth. So, if we go ahead and turn to the next slide, Tex, you know, the powerful portion of this for us is that we serve a very broad and diverse customer base, and you see that on this slide. It's a highly fragmented market, whether it's manufacturing or retail or wholesale or public administration or hospitality, education, what have you. What's really powerful with Global Industrial is that no one customer is greater than 2% of our sales.
So, the ability and the potential to gain a greater share of wallet and to further penetrate the customers that we already are engaged with and be able to take that to the next level. And we have hundreds of thousands of customers across the board that we could very much start to realign and create some intentionality around, and that is something that we will be prioritizing as we go into next year. And go ahead to the next slide. This gives you a sampling or a little bit more detail on our product lines. You see the top 10 categories there on the left-hand side of the slide. And we are always constantly innovating, and what you see on the right-hand side are some more recent introductions or launches, if you will, whether it's pack and ship, whether it's scrubbers, whether it's welding, etc.
It really, we also look very intentionally at what our customers are buying or where there's opportunity for us to create a level of progression. So, we go from good, better, best, and to be able to position one of our proprietary brands in one of those respective slots, really to look at how do we further grow the company really honing in on what kind of products our customers really want to find some value in. Okay, so if you go to the next slide, I've touched upon private label brands a couple of times. We make them and Made to Exceed is our trademark. As I mentioned previously or earlier, over 40% of our sales is tied to private label. We can command a 15%-20% premium on our margins versus national brands in multiple cases.
And we've seen some significant top-line growth over the last five years, and we affectionately call it the extra chip in the cookie from a differentiation, whether it's form, fit, function, or what other enhancements that we add to these product lines. It's a really strong point of differentiation, and that healthy margin profile enables us to then reinvest and kind of continue to innovate, figuring out what our customers really value and where their needs are, and really trying to line up to be able to enable that. Okay, so some new products to highlight are on this page. It's a representative sample of just some things we've most recently brought to market, whether it's water-cooled portable air conditioners, plastic guardrails, you know, mobile robot stretch wrap machine, etc., and different types of designing for pallets, pallet racking for warehousing in particular.
I mean, that really is a strong capability of ours. We have well over 20 plus engineers on staff that help us really look at that innovation and taking customer feedback and translating it into better enhanced products that we take to market. Okay, you know, our proprietary brand has contributed to our success and the way the business has evolved and grown over the years. Our financials are represented on this slide, and what you see is we've benefited from a 6.3% CAGR from 2021 through the end of 2024. What you see on the right-hand side of the revenue graph is that, or bar chart, is that that was our tracking as of the first half of 2025. The operating margin on the right just gives you a representative sample.
We had our best year from an operating margin perspective back in 2022, and, you know, having worked our way through just the pandemic and so forth, and then we did an acquisition in 2023 that is Indoff, and that has a different margin profile, thus why there's a difference in the operating margin. And what you're starting to see is we're starting to build that back up now, focused predominantly on maximizing margin profile and also finding ways to grow the business overall. So, if you turn the slide, Tex, this now, go ahead, flip forward. You know, a number of important trends are in this industry overall. The acceleration of e-commerce for B2B. What we're seeing is our customers really want to have punch-out sites and have direct connections with us from an e-procurement perspective, and that's something that we're really leaning into and doing more of.
It really plays to our e-commerce and web presence that we already have well established in the marketplace. The B2B, you know, the B2B customer is now expecting a consumer type of experience and responsiveness, and that's something that we're lining up to do from a digital investment perspective within the company, along with multi-channel marketing platforms and capabilities as we go forward. You know, it's a rapidly changing marketplace, and what it comes down to is our ability to react quickly via pricing analytics and watching what is happening in, you know, on the competitive landscape for us. Then how do we pivot, how do we adjust, and how do we ensure that we're able to serve our customers? We believe we're well positioned to deliver value through the exclusive brand offerings and everything else that we're doing to build out our assortment and our capability.
So, you know, what sets Global Industrial apart, we believe, is represented on this chart or this slide, the Harvey Balls. Over time, we believe we're uniquely positioned to win versus smaller competitors and our larger peers. As I said, we have only a small share of wallet with many customers, so how do we reinforce and build off of that? You know, our exclusive brand offerings is a key differentiator and has contributed to our success thus far, and it's figuring out how do we leverage that along with our e-commerce capabilities and the exceptional end-to-end customer experience. You know, our customer satisfaction scores remain quite high. We have deep product knowledge, deep technical knowledge, and we have the ability to help solve our customers' problems, including project management capabilities as well.
So, really becoming an extension of their teams and a trusted partner for them will be something that also builds off of our differentiation in the marketplace. Okay, so how are we going to deliver growth? Go ahead and flip forward. You know, what we have is a repeatable and scalable customer acquisition growth and retention model. And what you see, if you start in the upper left, you know, we have a customer-focused, very customer-centric culture. We've overlaid digital and e-commerce e-procurement capabilities that we're taking to market. We also have relationships, and we've secured GPO agreements as well. So now it's how do we go and start to really dive into those and to be able to gain a greater share of wallet with those customers as well and capture the share.
We're doing multiple customer campaigns throughout the year to really build loyalty, to reinforce our branding, and to help people better understand who Global Industrial is. And I've touched on this a couple of times through this presentation. The goal is to gain a greater share of wallet category expansion. And those are the building blocks of how we're going to look to kind of future growth for our company. And what that obviously will deliver then is along these lines, kind of the go-to-market channels that currently exist and some things we'll do future forward. I've already mentioned and touched upon the e-commerce platform. That's something we're continuously improving and continuously building and refining to have a better customer experience. On the right-hand side, you see the one-to-one.
We have well over 200 plus inside sales representatives that have very intimate relationships and are in constant contact with our customers on an ongoing basis. Outside sales, we acquired through Indoff. What you'll start to see as we look future forward again is we're looking at expanding that on the Global Industrial side in addition to Indoff, where it makes sense to be able to serve our customers and to become more customer intimate that I had alluded to earlier in the presentation. And as I have touched upon as well, group purchasing organizations, we have secured a number of those contracts and agreements, what have you. And now it's about going out and actually calling on those customers and helping them become more aware of who we are and capturing that share of wallet and gaining that growth and adding to the trajectory of the business.
So, if you go ahead and turn to the next slide, please. For the financials, you know, this business is capital light and strong free cash flow business, incredible cash flow generation. Overall, a debt-free balance sheet, literally a debt-free balance sheet. So, solid cash management and efficiency across the board, and that has just been consistent and inherent to this company for quite some time. So, if we go ahead and flip forward again, you know, our cash allocation priorities are as follows. It's reinvesting back into the business, which we constantly do, investing in that e-business, e-commerce platform, the customer experience distribution, and making sure we've got the right talent to help us win in the marketplace. We will opportunistically and strategically look at M&A, especially as we start to pilot some new product categories and trying to expand the greater total addressable market that we'll pursue.
I think there might be some opportunities future forward to lean into M&A. And then, as I mentioned earlier in the presentation, returning capital to shareholders. So, and that dovetails into our next slide. You know, you see the quarterly dividends per share on the left-hand side. That's been well over 13%+ CAGR, and the quarterly dividend has been paid since 2016. It's increased $0.01 each year, and it went up to $0.26 earlier in 2025. We also have a share repurchase program in place. Okay, so to wrap up, we flip forward, Tex, please. You know, this is where we're heading longer term, solid revenue growth, leveraging our model, and we believe there's still a tremendous runway for us to grow and continuously improve the profitability of the company.
We're building off the established base and strength of our core capabilities and exclusive brands and complementing it with additional products and assortments, and, you know, we will continue to further leverage our cost structure that's already established, specifically sales, distribution, and marketing in particular, so, if you go to the last slide, you know, that's what I've prepared for today. Hopefully, that gives you a better kind of glimpse into an understanding of Global Industrial. I really would like to thank you for your interest in Global, and Tex and I would be happy to take any questions that you might have at this time. Thank you very much.
Thank you very much, Anesa, for the terrific overview of Global Industrial.
As a quick reminder for those in the audience, if you do have a question, you can type it into the Q&A box, and we'll get to as many as we can, time permitting. We already have a few questions here in the queue. First, Anesa, you spoke about creating more of a customer-centric culture within the company. Maybe, I guess it's a two-part question. First, you know, what steps have you taken so far? And then, you know, what are the biggest obstacles to becoming more of a customer-centric company?
Yeah, no, that's a great question. Thank you, Anthony, and whoever asked it online.
You know, we already have a very strong culture that's focused on the customer, but I believe there's an opportunity to further empower them to try to, you know, solve problems real time, do it quickly, do it efficiently, and to feel confident enough to do the right thing, if you will, in the moment, and to take care of whatever, and, you know, whatever might come up. And I think, you know, the talent and the culture is capable of absolutely doing that, but it's change, right? So, I would say the answer to the second part is just it's starting to drive a bit of change.
And so, we've got to work through just the change management and to help them build that confidence and that trust that they can do the right thing to serve the customer and to enable them to go on to the next thing, right? So, I think that's how I would answer it. Tex, you've been here much longer than I. If there's anything you'd like to add, please feel free to do so.
Yeah, I think it's just a reminder that part of that journey is making sure you're consistent and you're able to deliver each and every time. It's not episodic. It's not; you can do it right 98% of the time, but you do it wrong 2% of the time. That's the challenge.
How do you embed that in the continuum, embed that in the culture to ensure that every customer interaction, every customer touchpoint, we're thinking about the customer first and making sure our actions are delivering that for our customers.
Right. So, as we think about your different end markets, you know, can you just speak to which, you know, which of those you think you have the greatest opportunities kind of going forward to drive growth? I know you've made a bigger push into national or strategic accounts. So, if you could just maybe talk about your customer base, kind of, you know, maybe just give us some more details, you know, the different components of your customer base and where do you see the best opportunities and conversely, maybe challenges, you know, given all the macro and tariff noise that's out there.
Yeah, now another great question.
Thank you for that. You know, I touched upon it on one of the slides, but I would just say these are various verticals where we have some meaningful customer concentration. I mean, obviously, we have a long tail of customers, but industrial and manufacturing are, you know, very strong for us, and it's really reinforcing that. We do quite well in public, the public administration segments, whether it's state, local, educational, etc., and the opportunities along those lines. Construction is more, it varies depending on what's happening macroeconomically, right? And so that, along with hospitality, healthcare, and a variety of other industry sectors, we're looking at and refining kind of where our customers really map to.
And that's part of the work that we're looking for for 2026 to figure out the right go-to-market along with, you know, what investments do we need to make for feet on the street to be able to get at it. What we're seeing, you know, on the tariff side is, look, everyone has that exposure to some extent, if not, you know, everyone. And we have been mitigating the risk, managing the controllables, and doing everything we can. At this point, you know, I don't know that we're in a new steady state of normal yet. I think there's still some ambiguity and uncertainty tied to it.
What we're doing is we're managing it through doing the best to mitigate the risk, ensuring that we have supply, ensuring that we're rethinking where we're sourcing certain products to be able to be competitive and, more importantly, overlaying the right pricing. And so, all of that is happening real-time dynamically. And I've added some talent to the organization for pricing and a couple of other areas where we're really starting to use data to guide the decisions that we make to help us prioritize how we line up to go do what I've alluded to.
So, thinking about pricing, I know you've been using more pricing analytics. Just wondering also, is AI playing a role in that? I mean, how are you looking at implementing AI within the organization? Wanted to get your thoughts on that.
Yeah, I mean, I would say, you know, we do use AI.
We've always had an element of data analytics inherently in the business. We are contemplating how do we better deploy it for our selling resources on real-time information for our customer experience group if they need to help a customer troubleshoot something or help explain a technical aspect of what have you. Just being able to have that knowledge real-time available and, I guess, seamlessly available to them to access. So, those are things that we have project-wise in flight at this point, and we're just deploying it where it makes sense. I think there's a balancing act here of let's not have AI overtake like the customer touchpoints directly, right? And figuring out how do we strike that right tone and right balance. But Tex, is there anything you'd like to highlight maybe in some of the functional areas if appropriate as well?
Yeah, Anthony, I think more some of our initial push into some of the kind of more AI areas would be in some of those more operational, as Anesa said, operational areas. So, order processing, invoice processing, some of those high velocity, high volume transactions that were being done with a person are being able to be automated in some of those senses. Also, there's lots of tools coming to market every day in terms of how chatbots and other areas can help you interact with your customer, help you be more proactive in some of those pricing decisions. But again, I still think obviously there's not a replacement today still for really hard work, data analytics, and teams that are really understanding their customers, understanding their competitors, and really paying attention to the market. So again, it's a combination.
It will be an evolving part of our business going forward.
So as we think about the merchandising mix, I think one of the things that you've talked about previously was doing more consumable type of products like shrink wrap is one example you used. Maybe kind of, you know, speak to that if you could as far as where you are in that journey and, you know, as we look forward, do you guys have a goal in mind in terms of how much of your business do you want to drive from consumables?
Yeah, no, thank you for the question. I don't have a specific number that I'm going to share or target or what have you. I just know I firmly believe that opportunity is there.
As we have engaged and asked our customer base, you know, if we were to provide this or offered it to you, you know, would you buy it from us? They absolutely said, yes, we didn't know that you could provide it, right? It's starting to reframe and drive that awareness and that branding and that positioning. We're piloting a number of different categories right now, Anthony, focused on, you know, various types of things. As you've mentioned, shrink wrap a few times, right? We sell the shrink wrap machine. We haven't necessarily emphasized that we also sell the shrink wrap. Now we will. We sell tape dispensers. Guess what? We also sell the tape. We need to start to position that. Those sound so simple, but nevertheless, that's a different kind of motion for us.
And so we're really going to start to drive that. And right now, my merchandising, marketing, and sales teams are all aligned, really actually piloting and testing and partnering with key strategic vendors, vendor partners to help us take some of those to market. And we're actually testing certain markets, certain accounts, certain customers, certain industry verticals or segments, and learning from that so that we're well positioned to take that knowledge into 2026 and beyond.
Gotcha. Okay, thank you for that. And then you had a slide earlier talking about the operating margins. We did have a question come in here about the operating margins. Can you get back to those type of levels? Obviously, you had the Indoff acquisition, which was margin dilutive at the time, but you've been working to get back the operating margins higher.
So how do we think about, you know, your goals for operating margins the next few years?
Anesa, I'll take that first.
Yeah, absolutely. Go ahead, Tex.
So Anthony, I think about, yeah, if you can look back at 2022 when that was at its peak, we were coming off of a, it was a very interesting year at that time. That was a time period right after the peak of the COVID pandemic while the supply chain disruption and still the ports of call, both kind of at origin and destination, were still highly disrupted. Availability was king in the marketplace at that time. And again, it wasn't as much about price discounting for your customers. It was really about, do you have the product?
Having given our really clean balance sheet and our ability to invest in working capital or invest working capital in inventory, we took that opportunity at the time and were able to really drive great volume at the same time of not having as much discounting, which drove higher operating margins. As you mentioned, we had an acquisition while it was accretive on an EPS basis. It did dilute our margin profile. And so that's an area that we saw that really mix in both in 2023 and 2024 based on kind of a mid-year acquisition and kind of a full year impact in 2024. And then starting to improve this year as we've been able to have some price benefit in the business. But ultimately, getting to higher operating margins, we want to make sure we focus on profitable growth as a company.
We're looking at that, obviously moving top line, but make sure we're moving top line with the right target customer. And at the same time, as volume grows, we do have a heavy fixed cost nature of the business. So we're going to be continuing to look at everything from marketing and sales mix to overall distribution footprint analysis to really look at how to grow the business and get it always with the mind of growing it profitably. So expansion of operating margin is right up there with our expansion of our top line as key focus areas for our company.
Yeah, I think Tex said it right. It's profitable growth that we'll pursue. And that is going to, that will enable and unleash the potential to really focus on improving, obviously, the profitability profile of the company.
Gotcha. That makes a lot of sense.
So we also had a question come in here about just organic growth as far as how much of that is coming from, you know, existing customer wallet share and how much higher can you drive that? I know we spoke about the complementary products, but is there anything else that we could be levers to drive, you know, more from your existing customer base?
Yeah, and again, I'll jump right in on that one again. So there's a lot of opportunity. When we think about our share of wallet and any customer concentration, it's quite low. So we know that obviously as we sell one, two, three categories into a customer, they may not, some of them because they're more episodic or capital-type purchases, they may not purchase that again the next cycle.
But then we have plenty of items that we got to continue to educate our customers on the broad assortment and continue expanding that assortment to really listen to our customers, understand what they're looking for, and really earning that right to win that share of wallet from our customers. So it's an area we do believe we have a lot of significant opportunity to expand share with our customers. And I think you've heard us talk a little bit on the last few earnings calls about our strategic accounts or our largest national accounts have been the fastest growing segment in the business. These are all names that everyone's heard in the marketplace, all Fortune 500 type names. And our share of wallet is growing. It's significant dollars for us as a customer, but again, still very small portions of the overall customer spend.
So we know we look at those, we've targeted different ways to manage those accounts through our account management structure, supporting them with inside-outside type reps, and then we've also been able to see those customers grow through more intentionality about how we service those customers, so we've had some early pilot wins in how we've changed our go-to-market to some of our customers over the past year, and again, we see a lot of upside opportunity within our existing customer base, but again, we're not trying to get away from customer acquisition and new business, but again, the biggest opportunity continues to be, again, how do we sell to our existing customers more and different products than we sell today?
Yes, we're underpenetrated across the board, so that in and of itself is potential and real opportunity, let alone everything else that we start to overlay strategically, Anthony.
Understood.
And the last question, given the timing constraints here. So can you just quickly touch on your main criteria for M&A?
I would say something that is very complementary, a natural adjacency to what we do, or something that will help us start to differentiate or enter a market or a portion of our footprint that is differentiated that enables us to better serve the customer in that respective kind of radius of being able to deliver to them. So it's a mix of all those things. And I think it'll just be, does it fit the profitability profile of the company as well, right? Not unlike what we just spoke about a moment ago.
Absolutely. Well, thank you very much. That's all the time we had. Thank you again, Anesa and Tex, for sharing the Global Industrial Company story as well as everyone listening as well.
So hope everyone has a productive day at the conference and take care. Thank you.
Great. Thank you.
Take care. Bye.
Thanks.
Thanks.