Global Industrial at Sidoti Conference: Strategic Growth and Challenges

On Thursday, 20 March 2025, Global Industrial Co. (NYSE: GIC) participated in the Sidoti Small-Cap Virtual Conference, offering insights into its strategic direction and financial performance. The company, a key player in industrial distribution, highlighted its focus on customer-centric strategies and growth opportunities, while also addressing challenges such as margin pressures and market competition.

Key Takeaways

• Global Industrial aims to enhance its position as a solutions provider, emphasizing customer experience and e-commerce capabilities.
• The company reported $1.3 billion in sales last year, with private label products contributing significantly to revenue.
• Operating margins have been impacted by the acquisition of Endoff, but stabilization is anticipated.
• Efforts to diversify the supply chain and improve pricing intelligence are ongoing.
• A commitment to returning capital to shareholders is demonstrated through increased dividends and strong free cash flow.

Financial Results

• Revenue: Global Industrial achieved approximately $1.3 billion in sales in the past year.
• Private Label: Over 40% of revenue comes from private label offerings, with a 16% CAGR over five years.
• Margins: Gross margins remain stable in the mid-thirties, but operating margins have faced erosion due to acquisitions.
• Dividends: The quarterly dividend increased to 26 cents per share, with a payout ratio of about 60% of net income.
• Capital Returns: Over $650 million returned to shareholders in the past decade, showcasing a strong commitment to shareholder value.

Operational Updates

• Distribution Network: Seven distribution centers in the U.S. and Canada enable rapid delivery to 90% of customers.
• Customer Base: The company serves 400,000 active customers, primarily SMBs, with no single customer exceeding 2% of sales.
• Product Categories: Focus on big and bulky items, with continuous expansion into new products.
• E-commerce: A strong emphasis on globalindustrial.com and digital sales channels.
• CRM Implementation: A new CRM system is being deployed to enhance customer relationship management and marketing efforts.

Future Outlook

• Growth Strategy: Focus on expanding customer offerings and enhancing the customer experience.
• Market Trends: Embracing e-commerce and AI to improve productivity and customer service.
• Competitive Advantage: Positioned to outperform smaller competitors through robust e-commerce and exclusive brands.
• Capital Allocation: Prioritizing investment in growth areas like e-commerce and CRM platforms, while exploring M&A opportunities.

Q&A Highlights

• Market Share Growth: Targeting growth through supplier consolidation and GPO programs.
• Operating Margins: Anticipating stabilization and growth in operating margins.
• Competitive Threats: Staying competitive with a focus on pricing intelligence and supply chain diversification.
• Tariff Impact: Better equipped to manage tariffs with diversified supply chains.

In conclusion, Global Industrial Co. remains focused on strategic growth and addressing challenges to enhance shareholder value. For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Sidoti Small-Cap Virtual Conference:

Anthony, Investor Relations: Tex Clark, the company’s CFO as well as Mike Smerjosi from Investor Relations. The format for today will be a management presentation for the first twenty or so minutes, and then we will open up for Q and A. For those in the audience who have questions, please type your question into the Q and A box at the bottom of your Zoom screen. And at the end of management’s prepared remarks, I will go ahead with those questions. And then, so, you know, really with no further delay, Tex, the floor is yours.

Tex Clark, CFO, Global Industrial: Yeah. Thank you, Anthony. Again, my name is Tex Clark, CFO here at Global Industrial. It’s a pleasure to be here at the Synodity Conference in in, spring two thousand twenty five. Again, we wanna start with our cautionary statement, forward looking statements.

We’ve all seen these before, so we’ll just quickly move past that. So let me just start telling you about a little bit about who we are. Again, Global Industrial Company is a value added industrial distribution, player in the, headquartered in Port Washington, New York. It’s about 20 miles outside of New York City. Last year, we generated approximately $1,300,000,000 in sales, and our primary go to market brand is also Global Industrial.

We operate on a national distribution model with seven distribution centers across The United States and Canada, and And that allows us to reach the majority of our customers, about 90% of our customers, for our in stock products within two days. We do also partner with a number of vendors to drop ship product directly to our customer set. When we think about what we sell, we are we consider ourselves the experts in big and bulky. We’re gonna be selling capital, light capital, durable goods, storage and shelving, furniture, parts and trucks, etcetera. These categories, again, are gonna be the nonconveyable, nonconforming.

It’s not a high velocity parcel environment. It’s more of an LTL or truckload environment, something that really differentiates us in the product set that we focus upon, versus some of our our competitive set out there. Again, one of the things that differentiates Global is our strong private label offering. A little bit over 40% of our total revenue is generated from the exclusive brands that we manufacture. And we’ll talk quite a bit more about that as we move forward.

We’re an e commerce first business focusing on globalindustrial.com as well as other eCentral areas. And we have 600 customer facing associates that then will support our sales model. That includes both, like, getting started in the ecommerce side, but also focused on subject matter experts and other, sales teams across the country. One of the areas that we have continued to focus on over the past decade is returning capital to shareholders. In that time, we’ve delivered over $650,000,000 of capital returns to our shareholders, and we we began a recurring dividend in 2016, that that most recently increased to 26¢ per quarter.

That was updated just a couple weeks ago when we reported year end results. Now let me just we’ll start by talking about about how do we get to where we are and what is our north star? Who are we trying to be? When we think about what what’s gonna help us succeed in 2025 and beyond, it’s gonna be guided by our customer centric status strategy. By really focusing on the customer, we’re gonna be able to deliver a unique and personalized experience.

We wanna make sure that that we make that customer engagement the heart of what we’re doing. By by focusing on the customer, we’re able to grow share of wallet and expand categories, the categories that we sell to the customers. When we know when customers buy more different product sets from us or different categories, they they are they drive a stickier customer relationship. We become more than than just a product supplier. We become a solutions provider.

That’s gonna allow us to grow grow operating, grow grow top line, then ultimately average, operating, income over time. Again, focusing on on the frictionless experience is is one of the key areas in in this focus. We know that our customers have choices. We know that that a customer really wants to make sure that that’s a seamless, process from the time that they’re, searching for your their product to placing the order to receiving the product to to ultimately paying their invoice. We have to have a very, very, very, very streamlined and and simple process for our customers because they have choices.

They don’t want roadblocks in the way. They don’t want there to be points that that derail those processes. That just needs to be part of the everyday business. And as a supply chain partner, that’s what we’re really working to continue drive. And by by focusing on these different key areas, we’re gonna be aligning our people to to enable growth in the company.

We think about who we’re selling to. We do have that very broad and first customer base. When we think about manufacturing, retail, wholesale trade, construction, when we think about these type of customers, the one thing that’s in common is they’re operating distribution type environments, warehousing, distribution, expansion, product expansion, etcetera. When we think about those customers, what our product sets can be the key and core products that we offer, lend themselves very well to these off the carpet, in the warehouse environments. But we also have been expanding into hospitality, healthcare, and other areas.

And while they may not be operating, distribution environments, they all what’s common across them is they all have significant facilities, maintenance and facilities, budgets, as well as large campus structures that have broad outdoor space, again, that align very well with what we’re selling. Again, with our broad customer base right now, again, it’s gonna be more concentrated towards small, medium business today, with with some recent very high success in in moving up towards the larger, and more complex customers. But, again, the better part of 400,000 customers are active and and buy from us, and no single customer represents more than 2% of sales. So again, it’s a fragmented customer base similar to the fragmented customer the market that we operate within. Generally, kind of thinking about overall total addressable market, we look at that about $50,000,000,000 of total addressable market across the product sets that we sold.

When we think about who who who are we competing with, this is the better part of, again, 4,000, roughly 4,000 distributors in North America that that service this industry, starting with the going from from the the longest sale of the biggest public companies on on the left of this equation, all the way to smaller plumber, plumbing shops, and and other small distributors or or manufacturers on the far end of the spectrum. Again, generally, out of those 4,000 distributors or 4,000 participants in the market, we we will be ranking, approximately the twentieth largest in the space. So there’s a lot of gray area, white area to the right of us to grow share. That will help us support growth as we continue to help our customers consolidate their buy behaviors. Again, we’ve talked a little bit about what we’re selling, but these top 10 categories, sort of shelving, material handling, etcetera, are core to what we do.

And these make up the vast majority of our revenue. What’s unique, what was common across these lines is that we have a long history in these categories, very good subject matter expertise at the merchandising and category management level, strong knowledge amongst our sales team, and then a robust product offering. That robust product offering is, managed including both key national brand providers, the biggest brands out there, as well as, a very robust and and broad exclusive brands product effort. We’ve been developing, the exclusive brands, for for a long time, and that that’s been one area that by giving the customers a great choice when they’re coming to play, be it the national brand or a or a functional alternative or something with higher quality, of our brands, we we always try to focus on, making sure that the customers have that right choice. We continuously expand into new products and new verticals, and that’s again a core core focus area of us.

And then again, as we think about our supply chain, it’s what products can we can we help drive into our exclusive brands? What type of products? What are our customers asking for that will allow us to shift products and allow us to grow into new categories. When we think about, again, just talking about this, digging in deeper to our exclusive brands, we go to market with a tagline made to exceed. What that really means is that this is a product set that we are making sure that we’re investing in and driving very high quality industrial solutions.

We’re not trying to where that could include improving the weight capacity or the storage capacity of a shelving unit to improve your ball bearings and instead of drawers to a thicker gauge steel to prevent denting on a product line or other other enhancements that our customers are looking at. Right now, we’re actually a significant number of our team members are presenting at the PROMAT conference in Chicago this week, and really presenting four new products for the, for different awards there of new products that we’re bringing to market, that will really help our customers and help help the market, serve their business and perform better than they do today. We did begin, sourcing these private brand sales and and contract manufacturing relationships over forty years ago. So we we have a long track record of working with suppliers, understanding how to how to move product around, how how to develop product, and it’s been an area that has been our fastest growing sourcing channel for quite some time. Better part of 16% CAGR, revenue CAGR in the last five years in our in our private brands.

And again, when we think about what what these private brand goods do, deliver a very high quality product to our customers, typically lower total cost of ownership to our customers at a very attractive price point, and at the same time generating what could be a 15 to 20 percentage point, premium, in gross margin rate as compared to the national brand competitive product. So we can earn more as a company, at the same time, deliver a better price point and a great value to our customers. It’s an area that we’ll continue to focus on. And again, like we said, when we develop a product, it’s not just about hitting a price point. It’s about developing that extra chip in the cookie mentality.

How can we enhance a product, and and make that product for a better, use for our customers? And that’s that’s where we’ve continued to focus as a company. Thinking about just a couple of new products examples, portable power stations, getting into vehicles, for warehouse management, stock chasers, stock pickers, bringing higher quality, digital wood laminate lockers. That’s for different products set of lockers. So we had a long track record of lockers, bringing in new lockers to the, space, new type of teardrop pallet racking.

But, again, these are just a sampling of at any given point in time, we’ll typically have have worth about hundred new products, new product introductions in the works that that our teams are working on developing, at any given point in time. So that’s an ongoing strategy of the company, and we believe that there’s still a long track record or or or a long, long, long opportunity to expand and grow the balance of share within our private brand offerings. Let’s see about some of the financial profile of the business. We do have a strong history of organic growth. When we look at the CAGR right here, 2020 to 2024, the CAGR is approximately 6.3%, but that does include an acquisition that we completed in in May of twenty twenty three.

And we do see, unfortunately, on the right side of the equation, we do see that there has been some margin erosion on on the operating income side the last three years. I think that’s that’s predicated on two primary issues. Throughout the pandemic and supply chain disruption time period of 2020 through 2022, we were actually generating record gross margins for our company, peaking in 2022 at 9%. We have seen that dilute over the last two years, and that’s primarily associated with two factors. One being that the growth on the top line has been a little bit slower, in the most recent periods organically, and by acquiring Endoff, While we’re very happy with the cash flow and the absolute operating income dollars they’re generating, it was a business that could have a lower margin profile, both on the gross and operating side.

Its margin profile was approximately 20% as compared to Global Industrial’s mid 30% gross margin profile. And then on the operating margin side, again, they’re going to be a sub 5% operating margin business. And again, that’s primarily because they were a almost exclusively drop ship supplier as well as project larger project base that typically had a lower margin profile. We believe we can move that up over time by mixing our private brand and other product sets into the end of business, as well as launching some e commerce capabilities to allow end of to get more day to day business and not just the somewhat, slightly lower margin profile of the large projects that they service for their customers. Overall as a company, our gross margin has been quite stable in the mid thirties.

And again, maximizing the operating margin profile is a continued focus of the company, and getting back to growth can really, really help drive that number. Now let me turn to our position in the market. Again, there are many trends that are impacting the overall industrial distribution space and I think no more than kind of the e commerce adoption. And e commerce adoption won’t just be, www.globalindustrial.com. This will also include things such as e procurement through EDI, cXML, punch out catalogs, and other ways that customers want to connect to their suppliers to make that buying experience as simple as possible.

Talked about the frictionless experience, creating these EDI connections and e procurement connections helps take friction away from the buying experience. Again, we have a great team, who have that ability and that’s one thing that we’ve seen our mid size and larger customers really, moving towards and shifting towards, and something we’ve been, well positioned to help help serve. Another area, obviously, we know that AI is obviously the the keyboard that we’re all hearing about in our daily lives. Really using AI, using data to help unlock, different productivity, different areas has been a continued focus of the company to make sure that we’re, again, delivering the right product at the great time to the right customer. We have to continue to make sure that that we know that the market is rapidly changing, and it’s an area that we’re continuing to focus on to make sure that we’re well positioned to meet these emerging industry challenges.

Again, over time, yeah, we do believe that we are positioned and our capabilities are well positioned to win, against our smaller competitors and continue to compete against our larger peers. We know many of the smaller competitors may not have the the robust capabilities of, the full suite of ecommerce capabilities, the full suite of product offering theory, including exclusive brands and and by by our our robust supply chain offering and product offering, we believe we can be very well in this business. And it’s an area that we’ll continue to, we believe we are well positioned to to gain share over time. And how are we going to deliver growth? When we think of that, we do have that powerful digital first model.

I started today by talking about an e commerce centric business. And that’s typically as we start with the e commerce relationship, we want to make sure that we have a comprehensive approach to that customer relationship. That would include e commerce as well as other channels that will drive retention, allow us to expand our share of wallet, in absolute dollar spend, but also our category share of wallet, selling additional categories in. And then again, we want to make sure that that’s our endpoint is becoming that true partner, not just a product distributor, but a solutions oriented partner to our customers. Again, we’ve talked a lot about driving that friction out of the experience.

And one area that we’ve invested recently to really focus on that is the implementation of a brand new CRM platform for the company. They were really growing a three sixty degree view, of our customer relationship, every touch point they have with us across our sales engine, our marketing engine, our service engine, and really bringing those all together, will really, again, help us deliver the right experience for our customers. That will allow us to move those customers toward that higher one to one Salesforce, sales team, focused approach where we know we have better retention when we have that one to one selling model. And here’s how we’ve expanded how we go to market. Again, ecommerce first.

We have that one to one sales model. We know that our customers do a lot better with us and and have a higher retention rate, higher satisfaction, and really, really, think our our sales team differentiates us. We bring subject matter expertise, full account management tools, and we have approximately a little over 200 inside sales representatives, supporting our customers. We’ve added a new channel, through through bringing outside sales, Indoff, that was acquired in May 2023, as well as, a different source type of sales team that we have in in house that really supports in the field, walking with our customers on their sites, identifying new opportunities. That’s been an area that’s really allowed us to to to to service different customers a little better, and it’s helped really drive and and launch our GPO effort.

We’ve we’ve launched our GPO effort in 02/2022 that’s for purchasing organization or contract buying. We have relationships with with Omnia, Kinetic, Visiant for the healthcare space, and we’ve continued to to identify new contract vehicles that will allow us to attract a different kind of buyer and service a different kind of market. We’re very pleased with the progress. And this has grown actually. This is our fastest growing channel, since we launched this in 2022.

Good. When we think about we’ve talked a little bit about that one to one sales model, but as we graduate our customers to the managed sales engine, so as we take a customer from a pure play e commerce business, or a prospect, and really move them into our managed sales team, that deepens the relationship. We can really build that loyalty through that one to one, relationship. We shift more customers. We have the ability to shift those customers to exclusive brands, really have someone helping helping to to move beyond the web merchandising of why a customer should buy, the exclusive brand to really making sure that, we’re actually pitching that to the customer, explaining the difference, and allowing that that loyalty to be built.

And, again, including that, increasing that share of wealth and those repeat sales. That’s gonna be the key to continue to grow the business over time. Again, getting back to our financial review of the business, we generally have had a very strong free cash flow generation. When we look at that on the left side, 2023 was a bit of a unique year, very strong cash flow generation. And that was primarily the result of, selling through a substantial amount of inventory.

As we peaked as inventory peaked in 2022, we know at that point, availability was king. We know there were supply chain disruptions, both in the in The United States and as well abroad, at point of origin and point of destination. We knew customers were were as long as we had the product, it was not a price dominated market at that time. It was an availability dominated market. So we we, get having the flexibility on our balance sheet, no debt, strong cash position.

We were able to invest in inventory in 02/2022, really make sure we had the products for our customers, and then we were able to to, again, like any other distributor, we were able to, destock in 2023 as we we move through that product. That really helped generate very strong free cash flow in 2023. Again, like I said, debt free balance sheet, strong cash conversion cycle and an area that we continue to believe that we’re well positioned, to give us the ultimate flexibility to deploy capital. Again, that capital allocation strategy, I mean, again, I always it’s going to be investing for growth. What are the e commerce capabilities, investing in their CRM platforms, focusing on customer acquisition, focusing on product selection and development?

How can we get faster to our customers through, support of our supply chain distribution network? This is gonna be our first, first use of cash always. M and A is another area. While it’s been a smaller part of our, growth story over time, it’s something that we are we’re gonna continue to focus on and, again, keep that, that flexibility in what we’re doing. We want to find acquisitions that fit our strategy.

We don’t want to look at for things that are, we want things that are adjacent in the markets that we operate in, adjacent to the product lines or bringing some new skill sets or new customers. But again, typically areas that we can leverage our exclusive brands, leverage our e commerce platform and e commerce capabilities are two areas that we really think when we’re looking at acquisitions, that will help us bring value to those when we, when we do find the right fit to our business. Again, we did mention that we will continue to, we have returned a lot of capital to shareholders. We’ll continue to, dividend growth over time. We’ve had a number of special dividends in that period.

And again, returning, we do have an authorized buyback in place. That again, while it hasn’t been utilized recently, we do maintain that flexibility. Quarterly dividend per share, again, ten consecutive years of increasing that quarterly dividend. Most recently, just in February of twenty twenty five, we increased that a penny a share per quarter to 26¢. This is an area that we did have a number of special dividends in 2018, ’nineteen and ’twenty.

That was really more based upon the company had divested a number of other non core assets in the IT distribution space and then using those proceeds from those distributions or those divestitures to return that capital through special dividends. But again, we do anticipate continuing a recurring quarterly dividend going forward and increasing that each year. Current payout ratio is about 60% of net income. Again, long term. When we get to solid revenue growth, I mean, we believe if we looked at over a longer period horizon, we’ve been able to outpace the market.

And again, continuing to grow fast in the market is an absolute strategy that we believe is going to be key to being able to continue to drive business. We’re going to do that through expanding share of wallet, and expanding the share of our exclusive brand sales will continue to help drive that profitability and help generate operating income across our fixed cost structure. Again, ultimately, our goal at the end of the day, we want to maximize the total shareholder return. Again, we’ve continued to focus on that as a company. That said, I know we’re right about twenty minutes into the presentation.

Happy to open up for any questions.

Anthony, Investor Relations: Thank you very much, Tex, for the terrific overview of global industrial. And as a quick reminder for those in the audience, if you do have a question, please type it into the q and a box. We already have a few questions here. I’ll try to combine one of my questions with one that came in here. So, how do you guys think about your ability to grow market share over the medium to long term, certainly realizing that it’s still a kind of a choppy environment, somewhat volatile with the tariff noise, you know.

But how do you guys think about that as far as growing the business? And as you do that, you know, how should we think about the operating margins longer term?

Tex Clark, CFO, Global Industrial: Sure. Yeah. I mean, we think about our ability to grow market share will come from we believe that we can actually grow it from both sides of the the equation, both from kind of smaller customer concentration, supplier concentration in in the smaller customers, as well as, ability to take some share on larger side, especially through the GPO programs and the other areas. Growing market share against the smaller competitive set, or the more niche suppliers is when we look to our customers and looking the customers are looking for easier experiences, more concentrated buying they want to, they want to streamline their supply chain. They want to make sure that they’re bringing suppliers together.

And that’s one area that we think we continue to give growth share as customers are trying to consolidate, multiple suppliers of becoming that one stop shop, having the broad product offering, both private brand and national brand, that will give them the options and the optionality that they need for their for their, environments. Again, on the larger end, again, being able to pick off opportunities by moving up the value chain on some large customers and making sure we’re there. Again, we have seen, softness in that SMB side of the house for for the better part of a year and a half. That that’s one area that that we know that has been soft. And, again, sometimes we look at the PMI index or other kind of public indexes out there.

We’ve seen that was in contractual territory for quite some time, sub 50. Recently, we’ve seen that that actually expand, which, it says that the potential sentiment is improving. In the short term, obviously, we know that there’s some some disruption and some some cautious behavior as I think we’re all waiting to see really what, where where the different cost inputs are gonna move and where where maybe tariff policy will move from the administration. But that’s one area that I think there’s probably a little bit of cautiousness in the the marketplace right now with customers waiting to see. I think once that that clarity comes out there, we’ll we’ll be share over time.

And, again, Anthony, in terms of the operating margin and, clearly, as we get back to growth, we have good capacity within our distribution network, good capacity within our sales team, and as we’ve invested in a number of productivity tools across our CRM and elsewhere, we believe that we’ll be able to drive operating leverage as we get get back to a sustained growth in the business.

Anthony, Investor Relations: Mhmm. Gotcha. Alright. So so if you’re able to grow revenue, hypothetically, let’s say, you know, low to mid single digits, you think that’s enough to to be able to expand your operating margins?

Tex Clark, CFO, Global Industrial: Yeah. I mean and that’s gonna be that’s an area yeah. As we get there, we believe we will. I mean, we’ll definitely stabilize and then begin growing that. We look at it a few different ways.

I mean, a lot of it is predicated on that gross margin line as well. And we know that some of the cost bids and inputs could impact that. But that’s where our private brand actually helps the helps it’s a really a defensive strategy as well because of that higher margin profile. We’re able to help offset some other pressure on the, on the gross margin line too. So I think gas, activity.

Anthony, Investor Relations: Gotcha. And then in one of your slides, you had yourselves compared to your competitors, how you stack up. So I guess, do you guys see any additional competitive threats out there? Or do you think it will be kind of more of the same? And just kind of more specifically, looking at, let’s say, project management expertise, how do you differentiate yourselves you know, versus the larger national players in the industry?

Tex Clark, CFO, Global Industrial: Yeah. I mean, I think in terms of the competitive side, I mean, that’s one area that it’s it’s it’s ever changing to the extent as we need to bring new products in, you may find a new, that that new product could bring a new competitor into your environment. Again, we have a fairly robust pricing team that really focuses on, what that competitive intelligence when it comes to what our competitors of each product set are are are pricing at, how they’re offering, what their lead times are, really focusing on that side of the equation.

Anthony, Investor Relations: Got you. Got it. All right. So, you know, in terms of, you know, just kind of thinking about the current kind of environment, how you guys think about volume versus pricing trends here, kind of more near term? What are you seeing out there?

Tex Clark, CFO, Global Industrial: Yeah. I mean, I think as we came into the year and we look at different industry surveys, the expectation was that pricing was going to be fairly neutral and growth would be more volume driven. Now I think that maybe calculus has changed a little bit. Again, that was as we think about some of the surveys, we look at MDM as an example. When they think about market growth, they were projecting market growth in the 3% to 4% range.

With of that, less than 1% was going to come from pricing. Again, I haven’t seen the next survey will come out in a couple months’ time, or I believe in April, I should say next month. But but again, we would anticipate as as there’s been more, discussion about about input costs and, again, potentially even the the tariff as mentioned, that that could drive some, additional costs, which may may bring some of the which I would anticipate will bring some price more pricing to the equation. So again, it’s something that we have to monitor and understand what our what the competitive set will endure. But currently, in most recent times, pricing has been fairly neutral.

And that’s an area that that, again, going forward, we we do anticipate there be some price benefit as we move through as as costs increase.

Anthony, Investor Relations: Gotcha. Okay. So in terms of the tariffs, so obviously, you know, we had Trump one point o, and now we have Trump two point o as far as the tariffs. So how are you guys better positioned now versus back in 2018 and 2019, in terms of your product sourcing and just overall thinking about tariffs?

Tex Clark, CFO, Global Industrial: Yeah. And again, I don’t want to just kind of point to the kind of Trump one or Trump two. When we think about, yes, clearly in 2018, ’20 ’19, tariffs came into the equation, more than they had in the past decade. And obviously, that made us look at our supply chain and say, where should we? We were highly concentrated as China country of origin.

So we began at that point, kind of from an enterprise risk or de risk standpoint. We needed to diversify that supply chain. And that’s an area we began focusing on heavily in 2019. At the same time, we really began focusing on on really that pricing intelligence, more than we ever had before because, again, things have been fairly stable for a decade, because we know the cost couldn’t change. What we we don’t want to forget about is from from really in 2020, ’twenty one, ’twenty two, during the last administration, but during the Biden administration, we saw significant ocean transit increases.

With the pandemic, those ocean transit increases actually, were more significant from a cost than tariffs have been. So that’s an area that we have we’ve had a lot of different volatility in the input side of costs over the last, now seven years. Through that time, while it’s taken a significant portion of mindshare, we have been able to generally manage our gross margin well and have seen that. So I think both of those actions, tariffs one point zero and then ocean transit inflation, have really helped us get that much better at, being fast to market when it comes to pricing. And we also do benefit in general because, typically, we are going to be a list price first company.

And with transparent web pricing being the key, we do have flexibility to change our pricing. Obviously, we wanna make sure we’re partnering. I mean, as a supply chain partner to our customers, we have to make sure that we’re we’re delivering a good experience for them as well. So it’s not just about passing price through. But it’s a combination of balancing the, balancing relationships with their suppliers, diversifying where appropriate.

And then ultimately, again, if if there is a need to pass that price through, that’s something that we’ll we’ll make sure we do very, very methodically and, with with a lot of understanding of what the broader market is doing as well.

Anthony, Investor Relations: Gotcha. We’re almost out of time. I’ll squeeze in one last question here. So, can you just share maybe and I know you touched on this a little bit in your prepared remarks, but as far as your the new Salesforce CRM system that you’re implementing, how do you think that will help the company?

Tex Clark, CFO, Global Industrial: Yeah. I think two areas. One, I mean, when we think about just the productivity that’s going to bring to our sales team, when we look at what kind of a sales team, what a typical account manager would do on a day to day basis and understand where we can streamline and simplify through dashboards and other reporting mechanisms. We’re just gonna be we’re giving more time back to our account managers to talk to customers. And at the end of the day, we know being in front of our customers is is the number one thing to driving more sales.

So from a productivity standpoint, we’re we’re very excited. I think the other area is really that that true broad based three sixty degree view of our customers. So again, we implemented this for our sales team. We’re absolutely moving forward with our marketing customer service module, and that’s gonna give us the ability to really tailor be be very tailored, very precise in the marketing that we do to specific customers, really account based marketing, versus more, more focused on on account based marketing, very tailored marketing than than the broader just paid search and other areas that are gonna drive traffic to a website. You’re gonna be, again, that much more tailored, and that gets you higher efficiency in your marketing spend.

So I think both of those right now, we again, we we launched the the first module within our sales team last year, finished that in Q4. And then, again, we’ll be moving forward we’re actively moving forward with the marketing and service cloud this year, and we believe that should be fully implemented as we move towards the summer throughout the summer. But we’ll continue to update the shareholder base as we close out our Q1 remarks.

Anthony, Investor Relations: Alright. Well, sounds great. Well, thank you very much. We’re already over our allotted time. So thanks again to Tex and Mike for sharing the global industrial story, and thank you also everyone tuning in and listening and asking good questions as well.

So we’ll wrap it up here, and have a great and productive day. Thanks.

Tex Clark, CFO, Global Industrial: Thanks, Anthony.

Anthony, Investor Relations: Take care.

Tex Clark, CFO, Global Industrial: Yes. Thank you, Anthony. Thank you all for joining today.

Anthony, Investor Relations: Thank you.

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