Global Industrial reports sales up, margin down in Q3 '23
Global Industrial Company reported its fourth quarter consolidated sales increased 22.9% to $320.1 million compared to $260.5 million last year. Excluding Indoff, acquired on May 19, 2023, sales increased 5.1% as compared to the year ago period and 5.2% on an average daily sales basis.
Meanwhile, consolidated gross margin declined to 33.8% compared to 36.0% last year. Excluding Indoff, gross margin was 35.9%, a 10 basis point reduction to prior year.
Consolidated operating income from continuing operations increased 20.9% to $21.4 million compared to $17.7 million last year. Excluding Indoff, operating income was $19.3 million, an increase of 9.0%.
For year end 2023, consolidated sales increased 9.3% to $1.27 billion compared to $1.17 billion last year. Excluding Indoff, sales declined 0.7% as compared to the year ago period and 0.3% on an average daily sales basis.
Consolidated gross margin declined to 34.2% compared to 36.1% last year. Excluding Indoff, gross margin was 35.5%. Consolidated operating income from continuing operations decreased 8.3% to $96.5 million compared to $105.2 million last year. Excluding Indoff, operating income was $90.8 million, a decrease of 13.7%.
"In 2023 we continued to execute against our ACE strategy," said Chief Executive Officer Barry Litwin. "Revenue reached a record $1.27 billion, as we benefited from the acquisition of Indoff, while organic revenue performance reflects the soft start to the year. As we moved through 2023, the demand environment improved, pricing pressures eased and we delivered solid second half results. In the fourth quarter we posted our best top line growth of the year as organic revenue improved 5.1%. These gains reflect continued volume improvement and strength in our e-commerce channel. We ended the year with a modest increase in our cash position, even after we fully funded the Indoff acquisition. Given the strong cash flow generation of the business, today we announced a 25% increase in the quarterly recurring dividend, the 8th consecutive annual increase.
"In 2024, we are committed to making the investments that will drive our future performance. Initiatives across the business are designed to elevate Global Industrial's position as an indispensable business partner, enhance the buying experience, expand our Global Industrial Exclusive Brands™ products, and highlight the value we bring every day to our customers. These efforts will position us to strengthen our competitive position, drive operational efficiencies, and capture share. While the market environment remains one of caution, we have seen modest organic growth to start the year. We remain well positioned to execute on our strategy, invest in our growth drivers, evaluate strategic opportunities, and build long-term value for our stakeholders."
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