Q1 2024 Global Industrial Co Earnings Call
Good afternoon, ladies and gentlemen, and welcome to global Industries first quarter 2024 earnings call our.
Operator: Good afternoon, ladies and gentlemen, and welcome to Global Industries' first quarter 2024 earnings call. At this time, I would like to turn the call over to Mike Smargiassi of Plunket Group.
At this time I would like to turn the call over to Mike Smart Jonathan Yeah, Okay, great. Please.
Mike Smargiassi: Please go ahead.
Speaker Change: Thank you and welcome to the global Industrial first quarter 2024 earnings call.
Mike Smargiassi: Thank you, and welcome to the Global Industrial first quarter 2024 earnings call. Leading today's call will be Barry Litwin, Chief Executive Officer, and Tex Clark, Senior Vice President and Chief Financial Officer.
Speaker Change: Leading today's call will be Barry Litwin, Chief Executive Officer, and Tex Clark Senior Vice President and Chief Financial Officer.
Mike Smargiassi: Formal remarks will be followed by a question and answer session. During the call, we will reference both GAP and organic metrics. Organic reflects the performance of the global industrial business exclusive of the May 2023 Indof acquisition. Today's discussion may include certain forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described in the forward-looking statements, captions, and risk factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q.
Speaker Change: Our remarks will be followed by a question and answer session.
Speaker Change: During the call, we will reference both GAAP and organic metrics.
Speaker Change: Organic reflects the performance of the global industrial business exclusive of the May 2023 and off acquisition.
Speaker Change: Today's discussion may include certain forward looking statements.
Speaker Change: It should be understood that actual results could differ materially from those projected due to a number of factors.
Speaker Change: Putting those described under the forward looking statements caption and under.
Speaker Change: Our risk factors in the company's annual report on Form 10-K, and quarterly reports on Form 10-Q.
Speaker Change: The press release is available on the company's website and has been filed with the SEC on a form 8-K.
Mike Smargiassi: The press release is available on the company's website and has been filed with the SEC on a Form 8K. This call is the property of Global Industrial Company. I will now turn the call over to Barry.
This call is the property of Copel Industrial company I will now turn the call over to Barry.
Barry Litwin: Thanks, Mike Good afternoon, everyone and thank you for joining us first quarter revenue improved to more than $323 million and on an organic basis, we posted our third consecutive quarter of growth with revenue up four 2%.
Barry Litwin: Thanks, Mike. Good afternoon, everyone, and thank you for joining us.
Barry Litwin: First quarter revenue improved to more than $323 million. And on an organic basis, we posted our third consecutive quarter of growth, with revenue up 4.2%. These results reflect the continuation of the cautious customer purchasing behavior we have seen for the past several quarters. [inaudible] Our performance was consistent through the period, and e-commerce was once again our leading channel. And we are seeing strong growth in our enterprise business as it benefits from new account generation and healthy retention; order and volume trends were solid and partially offset by continued price headwinds. We remain pleased with gross margin performance, which was 34.3% in the quarter. On an organic basis, gross margin of 35.8% was essentially flat on both a prior year and sequential quarter basis.
Barry Litwin: These results reflect the continuation of the cautious customer purchasing behavior, we have seen for the past several quarters.
Barry Litwin: Overall.
Barry Litwin: Our performance was consistent through the period.
Barry Litwin: E Commerce was once again, our leading channel and we're seeing strong growth in our enterprise business as it benefits from new account generation and healthy retention rates.
Barry Litwin: Order in volume trends were solid and partially offset by continued price headwinds.
Barry Litwin: We remain pleased with gross margin performance, which was 34, 3% in the quarter on an organic basis gross margin of 35, 8% was essentially flat on both the prior year and sequential quarter basis.
Barry Litwin: As I outlined in our last conference call, in 2024, we are focused on championing the customer experience across every facet of the business. This includes enhancing the quality and value we provide and elevating our position as a solutions provider and problem solver for our customers. Across the organization, we are executing against multiple initiatives to help us continuously improve and deliver an exceptional end-to-end shopping experience. One of the key performance indicators we utilize to measure the impact of these efforts is our customer satisfaction score.
Barry Litwin: As I outlined on our last conference call in 2024, we're focused on championing the customer experience across every facet of the business.
Barry Litwin: This includes enhancing the quality and value we provide to elevating our position as a solutions provider and problem solver for our customers across the organization. We are executing against multiple initiatives to help us continuously improve and deliver an exceptional end to end shopping experience.
Barry Litwin: One of the key performance indicators, we utilize to measure the impact of these efforts is our customer satisfaction scores our voice of the customer process to evaluate everything from product fulfillment and quality to overall experience satish.
Barry Litwin: Our voice of the customer process evaluates everything from product fulfillment and quality to overall experience. Satisfaction scores run greater than 90% each week, and this tells us that customer service, same-day shipping percentage, order fill rates, and post-sale support are working well, as evident by our high customer retention rates. Customer retention drives the total lifetime value of our customers and ultimately enables us to capture market share. The gains we are seeing are a direct reflection of the efforts of our associates and recognition across the company that everything we do impacts the customer.
Satisfaction scores run greater than 90% each week and this tells us that the customer service same day shipping percentage order fill rates and post sales support are working well as evidenced by our high customer retention rates cut.
Barry Litwin: Customer retention drive the total lifetime value of our customers and ultimately enables us to capture market share. The gains. We are seeing are a direct reflection of the efforts of our associates and recognition across the company that everything we do impacts the customer.
Barry Litwin: Overall, we have been pleased with our execution against the key pillars of our customer-centric strategy. We continue to differentiate our position in the market through an exceptional experience, a leading assortment of national brands and global industrial exclusive branded products, and a one-to-one managed sales approach that delivers significant value to customers. We are making continued investments in sales, marketing, merchandising, and customer service that will help us drive operating efficiencies, accelerate customer engagement, and strengthen our competitive position and capture market share.
Barry Litwin: Overall, we've been pleased with our execution against the key pillars of our customer centric strategy. We continued to differentiate our position in the market through an exceptional experience a leading assortment of national brands and global industrial exclusive branded products and a one to one managed sales approach that deliver significant value to customers.
Barry Litwin: We are making continued investments in sales marketing merchandising and customer service that will help us drive operating efficiencies to accelerate customer engagement and strengthen our competitive position and capture market share.
Barry Litwin: While the current demand environment is not as robust as we would like, we believe Global Industrial is improving its position as an indispensable business partner and, in turn, strengthening its ability to drive its long-term performance. The industrial distribution market remains highly fragmented, and we have numerous opportunities for growth as we drive sales enablement across our channels, expand current relationships, and acquire new customers. With an exceptional balance sheet and strong cash flow from operations, we are well positioned to execute on our strategy, invest in our growth driver, and evaluate strategic opportunities while we build long-term value for our stakeholders. I will now turn the call over to you.
Barry Litwin: The current demand environment is not as robust as we would like we believe global industrial is improving its position as an indispensable business partner and in turn strengthening its ability to drive its long term performance.
Barry Litwin: The industrial distribution market remains highly fragmented and we have numerous opportunities for growth as we drive sales enablement across our channels expand current relationships and acquire new customers.
Barry Litwin: With an exceptional balance sheet and strong cash flow from operations, we are well positioned to execute on our strategy invest in our growth drivers and evaluate strategic opportunities, while we build long term value for our stakeholders.
Barry Litwin: I will now turn the call over to tax.
Tax: Thank you Barry first quarter revenue was $323 $4 million up 18, 1% over Q1 of last year organic revenue was $285 $3 million up four 2% year over year organic U S revenue was up four 3% and Canada revenue was up one 8% in local currency.
Thomas Eugene Clark: Thank you, Barry. First quarter revenue was $323.4 million, up 18.1% over Q1 of last year. Organic revenue was $285.3 million, up 4.2% year-over-year. Organic U.S. revenue was up 4.3%, and Canadian revenue was up 1.8% in local currency. Revenue benefited from volume improvement, while order growth rates were impacted by continued pricing headwinds. The pricing environment remains competitive. However, we are optimistic that the negative impact of pricing trends will improve in the near term.
Tax: Revenue benefited from volume improvement, while order growth rates were impacted by continued pricing headwinds.
Tax: The pricing environment remains competitive however, we are optimistic that the negative impact of pricing trends will improve near term.
Thomas Eugene Clark: We have seen the first quarter's modest organic revenue growth continue into April. Gross profit for the quarter was $110.9 million, up 12.7% from last year. Gross margin was 34.3%, down 160 basis points from the year-ago period due to the contribution mix of Indof and its relatively lower gross margin profile. Ind-Off Gross Margin was 23%, which represents an improvement over their historical performance. The Organic Gross Margin Rate was 35.8%, off 10 basis points from both the year-ago and sequential period.
Tax: We've seen the first quarter's modest organic revenue growth continue into April.
Tax: Gross profit for the quarter was $110 $9 million up 12, 7% from last year gross margin was 34, 3% down 160 basis points from the year ago period due to the contribution mix of enough and it's a relatively lower gross margin profile.
Tax: <unk> gross margin was 23%, which represents an improvement to the historical performance organic gross margin rate was 35, 8% off 10 basis points from both a year ago and sequential period.
Tax: Management of our margin profile remains a key area of focus performance will continue to reflect the impact of proactive promotion and freight actions as part of our competitive pricing initiative.
Thomas Eugene Clark: Management of our margin profile remains a key area of focus, and performance will continue to reflect the impact of proactive promotion and freight actions as part of our competitive pricing initiative. As a reminder, we are nearing the first anniversary of our INDOF acquisition in May of this year. Composite margin impacts related to the business combination will be more muted in the second quarter as compared to last year, given this timing. In addition, ocean freight costs, while off recent highs, remain elevated.
Tax: As a reminder, we are nearing the first anniversary of our <unk> acquisition in May of this year composite margin impacts related to the business combination will be more muted in the second quarter as compared to last year given this timing.
Tax: In addition, ocean freight costs, while off recent highs remain elevated higher cost inventory starting to flow into our cost of sales and this is something we are proactively managing.
Thomas Eugene Clark: Higher-cost inventory is starting to flow into our cost of sales, and this is something we are proactively managing. Selling, distribution, and administrative spending for the quarter was $93.5 million, or 28.9% of net sales, an improvement of 50 basis points from last year. SD&A primarily reflects the benefit of INDOF's lower cost structure.
Tax: Selling distribution and administrative spending for the quarter was $93 $5 million or 28, 9% of net sales an improvement of 50 basis points from last year.
Thomas Eugene Clark: This was partially offset by approximately $0.9 million of audit and remediation costs related to certain IT general controls incurred in the period. Given planned investment in key sales and marketing growth initiatives, as well as SOX implementation costs associated with the INDOF acquisition and ongoing IT control remediation, we currently expect SD&A to be elevated in 2024 when compared to the year-ago period. Operating income from continuing operations was $17.4 million in the first quarter, and its operating margin was 5.4 percent.
Tax: S. DNA, primarily reflects the benefit of endorse that lower cost structure.
Tax: This was partially offset by approximately zero point $9 million of audit and remediation costs related to certain I T general controls incurred in the period.
Tax: Given planned investment in key sales and marketing growth initiatives as well as Sox implementation costs associated with the <unk> acquisition and ongoing I T control remediation. We currently expect SG&A to be elevated in 2024, when compared to the year ago period.
Tax: Operating income from continuing operations was $17 $4 million in the first quarter and operating margin was five 4% organic operating margin was five 6%.
Thomas Eugene Clark: Organic operating margin was 5.6 percent. Operating cash flow from continuing operations was $6.3 million in the quarter as we built inventory in advance of the spring and summer seasons. The second and third quarters are historically the largest sales periods for our private brand products.
Tax: Operating cash flow from continuing operations was $6 $3 million in the quarter as we built inventory in advance of the spring and summer season.
Tax: Second and third quarters are historically, the largest sales periods for our private brand products.
Thomas Eugene Clark: Total depreciation and amortization expense in the quarter was $1.9 million, including approximately $0.7 million associated with the amortization of intangible assets with the INDOF acquisition, while capital expenditures were $1.3 million. We expect 2024 capital expenditures in the range of $3 to $5 million, which primarily includes maintenance-related investments of equipment within our distribution network. Let me now turn to our balance sheet. We have a strong and liquid balance sheet with a current ratio of 1.9 to 1.
Tax: Total depreciation and amortization expense in the quarter was $1 $9 million, including approximately zero point $7 million associated with the amortization of intangible assets with the <unk> acquisition, while capital expenditures were $1 $3 million, we expect 2020 for capital expenditures in the range of $3 million to $5 million, which primarily includes maintenance related.
Tax: <unk> of equipment within our distribution network.
Speaker Change: Let me now turn to our balance sheet, we have a strong and liquid balance sheet with a current ratio of one nine to one as of March 31, we had $29 $9 million in cash no debt and approximately $127 million of excess availability under the credit facility.
Thomas Eugene Clark: As of March 31st, we had $29.9 million in cash, no debt, and approximately $120.7 million of excess availability under the credit facility. We maintain significant flexibility to fully execute on our strategic plan and to continue to fund our quarterly dividends. As a result, our Board of Directors declared a quarterly dividend of $0.25 per share of common stock. This concludes our prepared remarks today. Operator, please open the call to questions.
Speaker Change: We maintained significant flexibility to fully execute on our strategic plan and to continue to fund our quarterly dividend.
Tax: As a result, our board of directors declared a quarterly dividend of 25 cents per share of common stock.
Speaker Change: This concludes our prepared remarks today operator, please open the call for questions.
Speaker Change: We will now begin the question answer session to ask a question you May Press Star then one on your Touchtone phone.
Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press the star, then 2. At this time, we will pause to momentarily assemble our roster. The first question comes from Laura Revali, with William Blair.
Speaker Change: If you are using a speakerphone please pick up the whole in fact quite passing refuge.
Speaker Change: Any time so.
Speaker Change: I'm going to talk to withdraw your question. Please.
Speaker Change: All right.
Speaker Change: At this time on Pats comment entirely a form of live off here.
Speaker Change: The first question comes from line of Bally with William Blair.
Bally: Good afternoon, everyone learned volley from William Blair.
Operator: Good afternoon, everyone. Lauren Raleigh from Williams Warehouse on behalf of Ryan Merkel. Hey, Laura, how are you? Doing well, thank you. I just wanted to ask about the cadence of sales in the first quarter, specifically how each month performed and how results may be different from expectations. I know your peers talked about how March was impacted by the timing of Good Friday. Any color is really helpful. Thank you.
Barry Litwin: Hi, Laura how are you.
Bally: Doing well thanks, Yeah, I just wanted to ask about the cadence of sales in the first quarter, specifically of how each month requirement and how results may be different from expectations. I know that your peer has talked about how march was impacted by the timing of good Friday any color is really helpful. Thank you.
Speaker Change: Yeah, I would say that from a from a timing perspective, we did see a fair amount of consistency through the period overall for us and I think we as we see for Q1 certainly.
Barry Litwin: Yeah, I would say that, you know, from a timing perspective, we did see, you know, a fair amount of consistency through the period, you know, overall for us. And I think, as we saw for Q1, as we exited Q1, and certainly into the early part of the year, modest organic revenue growth has continued. So I don't think we saw, I did read something about, you know, weather challenges and holidays. I don't think that had as big an effect on us as maybe some others have.
Speaker Change: In Q1, and certainly into the early part of the year, you know modest organic revenue growth.
Bally: Is continued.
Bally: I don't think we saw I did read something about whether.
Bally: Weather challenges holiday I don't think that had as big an effect on us as maybe some others have.
Barry Litwin: Yeah, Lauren, just to add to that, as Barry said, very consistent growth throughout the quarters of January, February, and March, and while the Good Friday holiday did fall at the end of Q1 rather than the beginning of Q2 this year, we didn't seem to see a material impact from that holiday shift. I appreciate it. Thank you.
Speaker Change: Yeah, Laura just add to that I mean, as Barry said, we're very consistent growth throughout the quarter January February margin and while the good Friday holiday did following the end of Q1, rather than getting a Q2. This year, we didn't seem to see a material impact from that that holiday shift.
Operator: I appreciate it. Thank you so much.
Speaker Change: Appreciate it thank you so much.
Speaker Change: Yeah.
Speaker Change: Your next question comes from Anthony leave again, it's a good idea on kind of thing.
Operator: Your next question comes from Anthony Lebiedzinski with Sidotium Company.
Operator: Good afternoon, and thank you for taking the questions. So you guys talked about cautious customer behavior, and yet your organic sales growth of 4.2% was better than we had expected. So I guess, are you, maybe you could just give us more details as to, you know, which of your... maybe vertical markets or, or you know, any sort of customer groups that you are seeing more pronounced weakness than others. I just wanted to get more color on that, if you could.
Anthony: Good afternoon, and thank you for taking the questions. So you guys talked about cautious customer behavior, yet your organic sales growth of four 2% was better than what we had expected so I guess.
Anthony: Maybe you could just give us more details as to which of your <unk>.
Anthony: Maybe vertical markets or or or.
Anthony: I mean, you sort of customer groups that you are seeing more pronounced weakness than others. Just wanted to get more color on that if you could.
Speaker Change: Yeah, I think that's a good good question.
Barry Litwin: Yeah, I think that's a good, good question. You know, I think from the standpoint of the cautious customer market, you know, we definitely see that, you know, and I think it stems from the SMB market, you know, the small to midsize customer market, I think certainly with some of the economic numbers that have come out recently. I think that's going to be, you know, persistent for a little while.
Speaker Change: I think from the standpoint of.
Speaker Change: Cautious customer market, we definitely see that you know and I think it stems from the SMB market. The small to mid sized customer market I think certainly with some of the economic numbers that have come out recently, where I think that's gonna be.
Speaker Change: Gonna be persistent for a little while.
Barry Litwin: Our end-use markets, when you think about some of the big ones we're in, you know, manufacturing and retail and transportation, warehousing, it was fairly consistent, you know, across those segments. You know, we'll kind of see what kind of changes are ahead as we kind of get a little further into Q2. But certainly, you know, any type of industry that has an impact on fixed asset purchases, CapEx implications, things like that, you know, will probably have some of the first impacts on us.
Speaker Change: Our end use markets and when you think about some of the big ones were in manufacturing and retail and transportation.
Speaker Change: Patient warehousing.
Speaker Change: You know it was it was fairly consistent across those segments, we'll kind of see what kind of changes are ahead.
Speaker Change: As we kind of get a little further into Q2.
Speaker Change: But certainly you know any type of industry that has impact into fixed asset purchases.
Speaker Change: Capex implications things like that.
Speaker Change: We'll probably have some of the first impacts on us but through the period in Q1. It was fairly consistent it was more relating to the size of the customer smaller customers, where I found were a little bit more challenged.
Barry Litwin: But through the period in Q1, it was fairly consistent. It was more relating to the size of the customer. You know, smaller customers were, I found, were a little bit more challenged. The larger kind of enterprise national customers seemed to be able to withstand the period a lot better.
Speaker Change: The larger kind of enterprise national customers seem to be able to withstand the period a lot better.
Speaker Change: That's helpful color and one of.
Barry Litwin: That's a helpful color, and those trends continued so far into the second.
Speaker Change: Those trends continued so far into the second quarter.
Speaker Change: Yeah, I think the shape of it's similar.
Barry Litwin: Yeah, I think the shape of it's similar. Yeah, Anthony, similar results as we got in. We're about four weeks into the second quarter, and, as we highlighted, similar consistent results so far.
Speaker Change: So similar results as we got into we're about four weeks into the second quarter and as we highlighted similar consistent results into the this period so far.
Barry Litwin: Gotcha. And then, in terms of your e-commerce sales channel, roughly what percent of your transactions are out? Is that actually total? And then can you give maybe more color on the new account generation that you highlighted in your press release?
Speaker Change: Mhm Gotcha, and then in terms of your ecommerce sales channel roughly what percent of your transactions is out.
Speaker Change: Is that actually the.
Speaker Change: Total and then can you give maybe more color on the new account generation that you highlighted in your press release.
Barry Litwin: Yeah, sure. So when you think about, for us, I really look at the full e-channels, which are generally north of 60%, you know, in terms of e-transactions for a business, and that includes e-commerce, that includes EDI, that includes e-procurement, all the ways in which, you know, many of our B2B customers buy from us. You know, we usually don't call out the e-commerce channels separately, but it has been a solid channel for us.
Speaker Change: Yeah sure. So when you think about bras and really look at the full E channels, which are generally north of 60% in terms of E transactions for our business and that includes ecommerce that include DDI Quincy procurement, all the ways in which many of our <unk> customers buy from us.
Speaker Change: We usually don't call out e-commerce channels separately, but it has been a solid channel for us.
Barry Litwin: As you know, we've made some improvements over the last couple of years, and I think that's having a positive effect relative to, you know, overall conversion rates and the overall customer experience that people have when moving through the site. So that has, you know, certainly helped us going forward. You know, we did mention, as you discussed, some opportunities within larger enterprise accounts. You guys know that that's been something that has been fairly new for us over the last couple of years.
Speaker Change: No. We you know we've made some improvements over the last couple of years and changes in the navigation experience and I think that's having.
Speaker Change: Positive fact relative to you know overall conversion rates.
Speaker Change: And the overall customer experience that people have moved into the site so that.
Speaker Change: Certainly helped us going forward.
Speaker Change: Did mention as you as you discussed some opportunities within larger enterprise accounts.
Speaker Change: No that that's been something that has been fairly fairly new for us over the last couple of years. It's a channel that's been growing in terms of our larger accounts to global industrial we.
Barry Litwin: It's a channel that's been growing in terms of larger accounts to global industrial. We don't call that out separately. However, it's a channel that has been – we've been pleased with the performance, and we think over the next couple of years it's going to be very significant for us. So we've been really happy with that market and some of the work that our strategic account managers are doing in that area.
Speaker Change: We don't call that out separately how's.
Speaker Change: However, it's a channel that has been we've been pleased with the performance and we think over the next.
Speaker Change: Couple of years, it's going to be a very significant for us. So we've been we've been really happy with the with that market and some of the work that our strategic account managers are having in that area.
Speaker Change: Mhm Gotcha and a couple of other questions if I could so.
Thomas Eugene Clark: Mm-hmm, gotcha. And a couple of other questions if I could. So, I think, Hex, you mentioned that INDOF's gross margin was better than historical. What drove that, and do you see any other opportunities to further improve INDOF's margins?
Speaker Change: I think the tax you mentioned that the end offs gross margin was better than historical what drove that and do you see any other opportunities to further improve and <unk> margins.
Thomas Eugene Clark: Yeah, absolutely, Anthony. Induf's margins came in at about 23% in the quarter, which was, again, a little bit higher than their mid-21s that they had previously reported, historically, both after our ownership after we acquired them and really pre-acquisition. In the quarter, they closed a couple of large deals that happened to be very favorable margins. We're continuing to push efforts and initiatives to drive a higher balance of private brand sales and introduce e-commerce capabilities to their business, which should continue to help that margin over time. And while this first quarter was benefited by a single large order that drove that margin rate up, we are seeing continued action, and positive action, of those initiatives to improve margin in the long run.
Speaker Change: Yeah, absolutely Anthony in terms of margin is where it came in at about 23% in the quarter, which was again a little bit higher than their mid 'twenty one than they had previously reported historically both after our ownership after we acquired them and really pre pre acquisition I mean, the quota or they they had closed a couple of large deals that happened to be very favorable margins, we're continuing to push efforts and initiatives to drive higher <unk>.
Operator: Got it. Okay.
Speaker Change: <unk> private brand sales and introducing e-commerce capabilities to their business, which should continue to help that that margin over time and while this first quarter, where it was it was a beneficial benefited by a single large order that that drove that margin rate up we are seeing continued.
Speaker Change: Action positive action of those initiatives to improve margin and not in the long run.
Speaker Change: Got it Okay, and then you know in terms of D&A expense growth I mean, it was up 16% versus last year and up 8% sequentially from the fourth quarter I know you're doing some investments in the different initiatives.
Operator: And then, you know, in terms of SD&A expense growth, I mean, it was up 16% versus last year and up 8% sequentially from the fourth quarter. I know you're doing some investments in different initiatives. You know, so as far as, you know, going forward here, what should we expect as far as the run rate for expenses from here? Sure. I'll go.
Speaker Change:
Speaker Change: So as far as going forward here.
Speaker Change: How should we expect as far as the run rate for expenses.
Speaker Change: From from here sure I'll get I'll give let me give you a little color on that Anthony So when we think about the year over year numbers, 16%, you've got to remember that actually we acquired a business.
Thomas Eugene Clark: Sure. Let me give you a little color on that, Anthony.
Thomas Eugene Clark: So when we think about the year-over-year number at 16%, you've got to remember that obviously we acquired a business that made up nearly 10 or over 10% of revenue. So that alone contributed about half of the SG&A growth rate just by having an additional business in the portfolio in Q1 this year as compared to last year. When we think about sequential changes, obviously, we have highlighted in past quarters that we were going to be investing in sales and marketing initiatives that we think are prudent in a market that's somewhat challenged to be able to take share where we can and make sure we're investing in those key growth elements even if it's at the bottom line to drive that top line up right now.
Speaker Change: That made up made up nearly 10 more over 10% of revenue.
Speaker Change: So that that alone contributed about half of the S. SG&A growth rate just by having an additional.
Speaker Change: Business in the portfolio in Q1, this year as compared to last year. When we think about sequential changes. There's obviously, we had highlighted in past quarters that that we were going to be investing in sales and marketing initiatives that we think that's prudent and in a market that is somewhat challenged.
Speaker Change: Yeah.
Speaker Change: Take share, where we can and make sure we're investing in those key growth elements, even if its at the expense at the bottom line to drive that top line up right now and that's one area that we're going to continue to focus on the only other thing we highlighted on the todays call. We did have about 900 km of a quasi one time related charge in the period, which which did contribute to some of that that incremental year over year.
Thomas Eugene Clark: And that's one area that we're going to continue to focus on. The other thing we highlighted on today's call is that we did have about $900K of a quasi one-time related charge in the period, which did contribute to some of that incremental year-over-year growth.
Speaker Change: <unk>.
Speaker Change: Got you Okay. That's very helpful. Okay, and then last question for me.
Operator: Gotcha. Okay, that's very helpful. And then last question for me: so now that you're almost one year after the end-off deal, are you looking for any other additional acquisitions?
Speaker Change: So now that you're almost one year. After the end of deal are you looking for any other additional acquisitions.
Barry Litwin: Yes, good question. So, you know, we've been pretty consistent in that. I mean, I think, you know, as much as we focus on organic strategy, we absolutely consider acquisition as a component of our business going forward. So, we definitely, you know, are looking at new types of opportunities that can bring us into new categories, that can add to our business model, add customers, and new channels to sell our private brand.
Speaker Change: Uh-huh, yes. Good question. So you know we've been pretty consistent in that I mean, I think you know as much as we focus on our organic strategy we absolutely.
Speaker Change: Consider acquisition as a as a component of our business going forward. So we definitely are.
Speaker Change: We're looking at new types of opportunities that can bring us into new categories that can add to our business model and customers new.
Speaker Change: New channel to sell our private brand those are all really important to us.
Barry Litwin: Those are all really important to us. And, you know, when we come across those deals, we would, you know, take advantage of them. We've been pleased so far with what's happened with EndOff up until this point, and we think there's a lot more value to go there. But certainly, we're constantly keeping our eyes out for opportunities on the acquisition front.
Speaker Change: When we when we come across those deals.
Speaker Change: We would take advantage of that.
Speaker Change: We've been pleased so far with what's happened with Endo, you know up until this point and we think there's a lot more value to go there, but certainly we're conflict keeping our eyes out for opportunities on the acquisition front.
Speaker Change: Sounds good well, thank you very much and best of luck.
Operator: Sounds good. Well, thank you very much and best of luck. Thank you. This concludes our question and answer session and conference call for today. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: Alright, Thank you Anthony.
Speaker Change: Yeah.
Speaker Change: Got a question and answer session conference for today. Thank you attending today's presentation you may now disconnect.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Oh.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change:
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Uh huh.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Operator: [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].