gic-20220930

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, 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 October 28, 2022 was 37,957,390.

TABLE OF CONTENTS


Available Information

Part I	Financial Information
Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

Part II	Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 6.	Exhibits	35
	Signatures	36

Table of Contents

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)


	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	20.0	$	15.4
Accounts receivable, net	127.3		106.8
Inventories	189.4		172.8
Prepaid expenses and other current assets	9.6		6.4

Total current assets	346.3		301.4

Property, plant and equipment, net	18.5		16.5
Operating lease right-of-use assets	90.6		68.8
Deferred income taxes	10.6		10.3
Goodwill, intangibles and other assets	8.4		8.0


Total assets	$	474.4	$	405.0

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	113.2	$	114.4

Accrued expenses and other current liabilities	45.1		50.5
Short-term debt	10.0		4.5
Operating lease liabilities	11.8		10.5
Total current liabilities	180.1		179.9

Operating lease liabilities	89.7		68.5
Other liabilities	2.6		3.0
Total liabilities	272.4		251.4

Commitments and contingencies

Shareholders’ equity:
Preferred stock	0.0		0.0
Common stock	0.4		0.4
Additional paid-in capital	200.1		195.8
Treasury stock	(19.6)		(20.4)
Retained earnings (deficit)	18.9		(25.5)
Accumulated other comprehensive income	2.2		3.3
Total shareholders’ equity	202.0		153.6
Total liabilities and shareholders’ equity	$	474.4	$	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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales	$	298.5	$	277.4	$	905.6	$	801.1
Cost of sales	191.9		175.4		578.2		523.8
Gross profit	106.6		102.0		327.4		277.3
Selling, distribution & administrative expenses	79.1		71.4		239.9		215.4

Operating income from continuing operations	27.5		30.6		87.5		61.9
Interest and other expense, net	0.6		0.2		1.3		0.4

Income from continuing operations before income taxes	26.9		30.4		86.2		61.5
Provision for income taxes	6.6		7.2		21.5		11.7
Net income from continuing operations	20.3		23.2		64.7		49.8
Net (loss) income from discontinued operations, net of tax	(0.1)		(0.1)		0.3		10.5
Net income	$	20.2	$	23.1	$	65.0	$	60.3

Net income per common share from continuing operations:
Basic	$	0.53	$	0.61	$	1.70	$	1.31
Diluted	$	0.53	$	0.61	$	1.69	$	1.31
Net (loss) income per common share from discontinued operations:
Basic	$	0.00	$	0.00	$	0.01	$	0.28
Diluted	$	0.00	$	0.00	$	0.01	$	0.28
Net income per common share:
Basic	$	0.53	$	0.61	$	1.71	$	1.59
Diluted	$	0.53	$	0.61	$	1.70	$	1.59

Weighted average common and common equivalent shares:
Basic	38.0		37.8		38.0		37.7
Diluted	38.1		38.0		38.1		37.9

Dividends declared	$	0.18	$	0.16	$	0.54	$	0.48

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,
	2022		2021		2022		2021
Net income	$	20.2	$	23.1	$	65.0	$	60.3
Other comprehensive income:
Foreign currency translation	(0.8)		(0.2)		(1.1)		0.0
Total comprehensive income	$	19.4	$	22.9	$	63.9	$	60.3

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,
	2022		2021
Cash flows from operating activities:
Net income from continuing operations	$	64.7	$	49.8
Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization	2.8		2.8

Provision for credit losses	1.8		1.8
Stock-based compensation	3.4		2.0
Benefit from deferred taxes	(0.6)		(2.4)

Changes in operating assets and liabilities:
Accounts receivable	(23.1)		(19.1)
Inventories	(17.1)		(9.1)
Prepaid expenses and other assets	(2.1)		(0.2)
Income taxes payable	(6.5)		2.3
Accounts payable	(0.6)		11.3
Accrued expenses, other current liabilities and other liabilities	0.8		0.1
Net cash provided by operating activities from continuing operations	23.5		39.3
Net cash (used in) provided by operating activities from discontinued operations	(0.1)		11.6
Net cash provided by operating activities	23.4		50.9

Cash flows from investing activities:
Purchases of property, plant and equipment	(4.9)		(3.4)



Net cash used in investing activities	(4.9)		(3.4)

Cash flows from financing activities:
Proceeds from short-term borrowings	114.5		19.6
Repayment of short-term borrowings	(109.0)		(19.6)
Dividends paid	(20.8)		(18.6)
Proceeds from issuance of common stock	0.7		3.8
Payment of payroll taxes on stock-based compensation through shares withheld	(0.4)		(2.5)
Proceeds from the issuance of common stock from employee stock purchase plan	1.4		1.1


Net cash used in financing activities	(13.6)		(16.2)

Effects of exchange rates on cash	(0.3)		(0.1)

Net increase in cash	4.6		31.2
Cash, cash equivalents and restricted cash – beginning of period	15.4		24.0
Cash, cash equivalents and restricted cash – end of period	$	20.0	$	55.2

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Supplemental disclosures:
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	20.0	$	54.1
Restricted cash (1)	0.0		1.1
Cash, cash equivalents and restricted cash	$	20.0	$	55.2

(1)The Company had restricted cash collateralizing letters of credit outstanding of $0 and $1.1 million, at September 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	$	32.9	$	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
Stock-based compensation expense				1.0								1.0



Issuance of shares under employee stock purchase plan	30			0.8								0.8
Dividends								(6.9)				(6.9)

Change in cumulative translation adjustment										(0.8)		(0.8)
Net income								20.2				20.2
Balances, September 30, 2022	37,958	$	0.4	$	200.1	$	(19.6)	$	18.9	$	2.2	$	202.0

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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	$

SEC Form 10-Q filed by Global Industrial Company