Categories Earnings Call Transcripts, Industrials

WW Grainger Inc. (GWW) Q2 2020 Earnings Call Transcript

GWW Earnings Call - Final Transcript

WW Grainger Inc  (NYSE: GWW) Q2 2020 earnings call dated July 23, 2020

Corporate Participants:

Irene Holman — Vice President, Investor Relations

D. G. Macpherson — Chairman of the Board

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Analysts:

David John Manthey — Robert W. Baird & Co. — Analyst

Ryan James Merkel — William Blair & Company L.L.C. — Analyst

John George Inch — Gordon Haskett — Analyst

Christopher M. Dankert — Longbow Research LLC — Analyst

Christopher D. Glynn — Oppenheimer & Co. Inc. — Analyst

Adam William Uhlman — Cleveland Research Company — Analyst

Nigel Edward Coe — Wolfe Research — Analyst

Deane Michael Dray — RBC Capital Markets — Analyst

Hamzah Mazari — Jefferies LLC — Analyst

Michael Lawrence McGinn — Wells Fargo Securities — Analyst

Patrick Michael Baumann — JPMorgan Chase & Co — Analyst

Presentation:

Operator

Greetings, and welcome to the W.W. Grainger Second Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Irene Holman, Vice President, Investor Relations. Thank you. You may begin.

Irene Holman — Vice President, Investor Relations

Good morning. Welcome to Grainger’s Second Quarter 2020 Earnings Call. With me today are D.G. Macpherson, Chairman and CEO; and Tom Okray, SVP and CFO. As a reminder, some of our comments today may include forward-looking statements. Actual results may differ materially as a result of various risks and uncertainties, including those detailed in our SEC filings. Reconciliations of any non-GAAP financial measures and their corresponding GAAP measures are found in the tables at the end of this slide presentation and in our Q2 press release, both of which are available on our IR website. This morning’s call will focus on adjusted results for the second quarter of 2020, which exclude restructuring and other items that are outlined in our earnings press release. Now I’ll turn it over to D.G.

D. G. Macpherson — Chairman of the Board

Thanks, Irene. Good morning, and thank you for joining us today. To say that this quarter was different and challenging would be an understatement. I am very proud of how our leadership and team members have stepped up to the challenge. Whether dealing with the pandemic or with social injustice issues, our team has been fantastic throughout this uncertain time. Let me start off by providing you with an update on our pandemic response and a brief overview of the quarter before turning it over to Tom to dive into the details. So starting with an update on the pandemic, the Grainger team continues to work tirelessly to keep the world working during this challenging time. As I outlined on our first quarter call, Grainger is an essential business, and our customers count on us to keep their businesses up and running. Our pandemic response is wrapped in three broad priorities: First, serve our customers well through this challenging time; second, support the needs and safety of our team members; and third, ensure we remain in a strong financial position. I’ll provide a quick update on each point. First, our businesses remained open every day to serve our customers. I visited one of our DCs last week, and we have implemented several measures to protect the safety of team members and to ensure the continuity of our operations. We also recently reopened our branch showrooms to add to the curbside pickup service we have been operating throughout the pandemic.

Our KeepStock team members continue to serve the vast majority of our customers. The exception would be some disruptive businesses where we’ve had to flip to alternate solutions. Throughout, our team is focused on customer and team member safety, including new protocols, temperature checks, space covering mandates and social distancing guidelines. This has certainly made operating more difficult, but we believe we have done very well with these changes. On the customer front, business reopenings and related activity continue to vary greatly based on industry and geography. Sales to health care, government and other essential businesses remained strong throughout the quarter. Sales to nonessential and disruptive businesses bottomed in April, and they’ve rebounded in May and again in June, although they still remain depressed compared to pre-COVID levels. I’ll talk about the pattern of revenue in a minute. Our supply chain has operated well throughout the pandemic although we have seen some lumpiness as we work to match supply with tremendous demand for some pandemic-related items. For most product categories, things have improved. But for some categories, global shortages will make supply a challenge throughout the balance of the year. Our team is working tirelessly to ensure supply for customers as the pandemic ebbs and flows. As we mentioned before, supporting the needs of our team members is a critical importance, especially during this period of uncertainty. Our team members are essential to serving our customers, and team member health and safety remains a priority. We have been fortunate to have absorbed the pandemic without major layoffs and currently have less than 3% of our workforce still on furlough. We have more team members who will return to work in the next few weeks. Having an experienced cohesive team will help us accelerate growth through the recovery. In addition, we remain vigilant around safety. Our team members give us great marks for making safety a priority as they support our customers.

Finally, we have maintained a tight focus on our financial position throughout this period. On our Q1 call, I discussed our priority to preserve cash, including deferring action on certain capital projects, pausing our share repurchase program and drawing on our revolving credit facility. We continue to focus on cash preservation and have reduced nonessential SG&A spend by over $75 million sequentially in the quarter. That more than exceeds our $40 million to $55 million target set on the previous call. These actions helped us to finish the quarter with approximately $1.9 billion in available liquidity. Since the business performed well in the quarter, we have begun to evaluate repaying part of the revolver and are assessing a potential dividend increase. Depending on the shape of the pandemic, we will see some sequential cost increases related to things like advertising, some travel and the reinstitution of merit increases. But we remain committed to managing expenses very closely given the uncertain path ahead. To be clear, we are managing costs well, but also investing for the future success of the business. We continue focusing balancing the long-term health of the company alongside our short-term operational needs. Turning to our quarterly results. The business remained resilient despite this unprecedented period. Our daily sales finished down 1.8% on a constant currency basis in the quarter, underpinned by heightened sales of pandemic-related items that nearly offset a mid-teen decline of non-pandemic-related sales. With the MRO market down 14% to 15% in the quarter, we gained a lot of share fueled by pandemic-related sales, selling to new customers and improving non-pandemic sales as the quarter progressed. Gross margins were pressured primarily due to pandemic impacts, which Tom will detail in a bit. A meaningful portion of this margin pressure is temporary in nature, what we don’t know is how long the pandemic will last.

Despite great SG&A performance, we have taken action to keep team members and customers safe that have added some short term costs. Obviously, we’re incurring expense to ensure we create safe work spaces and interact, but also doing things like expediting shipping and allocating product to lower-margin health care and government customers. To state the obvious, we have been focused on helping customers and communities as much as possible, which sometimes means we have added cost. We’ve produced $230 million of operating cash flow and $189 million of free cash flow. That’s a solid result in this environment. Balancing the short-term with progress in strategic initiatives has been key. We continue to make progress on our key priorities. We are on plan to remerchandise an incremental $1.6 billion of our assortment this year. To support further acceleration of these activities, we plan to launch our new product information management system over the next month. We have made great strides in analytics and marketing capabilities, including upgrading internal talent to own more of the marketing activities. Our new customer information tools have enabled us to better match marketing and sales activities with new customers. We launched a new visual search application that is based on machine learning. We are getting great reviews on this solution. We are seeing continued traction with our KeepStock and other embedded customer solutions. We know that customers who have at least one embedded solution, including KeepStock and EDI Pro account for roughly 60% of our revenue. So this is an important customer segment. Here, we have upgraded our systems and processes to accelerate new installations and improve service on existing solutions. With our endless assortment model, MonotaRO continued to invest in technology and capacity to fuel their growth, while we have started to see the benefits of last year’s investments at Zoro in the U.S. And lastly, we further refined our international high-touch footprint with the completed divestiture of Fabory, and we announced an agreement to divest Grainger China.

This helps us simplify our footprint and focus our efforts on our core markets. Looking at Slide 6, I thought it would be important this quarter to show the underlying trends with pandemic and non-pandemic products based on our current categorization of SKUs. Over the last several weeks, I’ve been participating in virtual market visits with customers that were originally scheduled to be in person. I have talked with dozens of customers in several different industries to get a sense for how things are progressing. It’s important to note that even for customers with strong revenue performance, there has been a disruption in normal activities. For example, our hospital system has been heroic in dealing with the pandemic and saving lives, and their pandemic product demand has been enormous. But many of their normal facilities maintenance projects have been put on hold through this time to focus on COVID, which means that even hospitals had lower non-pandemic sales through the last four months. There’s a backlog of work that will need to be done in the future. But for now, customers in all industries are focusing on keeping people safe and recovery. In the U.S., we started to see increased pandemic sales in February, and they really picked up in March, where we quickly moved in-stock inventory. This trend continued with pandemic-related sales up around 70% in the second quarter. And while the environment remains fluid, this has continued at an accelerated rate into July. The heightened demand came from a multitude of customers across numerous industries with most of the pandemic products going to health care, government and essential businesses. Through most of March, non-pandemic sales were pretty stable. With the stay-at-home orders, we saw non-pandemic sales fall off significantly in late March, but they have gotten better each month since modeled out in April. We’ve seen further improvement in July.

The good news is that we have seen a steady improvement in non-pandemic revenue across all customer types. It’s still below pre-pandemic levels, but it has improved. While we don’t know how this will progress, we do feel good about our ability to help customers weather the storm regardless of how the pandemic evolves. So with that, I will turn it over to Tom to take us through the quarter’s results in detail. Tom?

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Thanks, D.G. Starting with our total company results. As noted on Slide 8, daily sales were down 1.8% on a constant-currency basis. This decline was primarily driven by volume decreases, reflecting lower sales of non-pandemic products as well as significant headwinds from unfavorable product mix due to heightened sales of pandemic-related products. It should be noted that our endless assortment business grew approximately 16% in the quarter, showing tremendous resiliency despite the challenging market conditions. Combined, the U.S. segment and endless assortment business representing the majority of our revenue grew daily sales about 1% in the quarter and roughly 4% year-to-date. Gross margin for the total company was down 290 basis points versus the prior-year quarter. This decline continues to be driven mostly by pandemic-related impacts, particularly noticeable in our U.S. segment, as well as continued business unit mix impact as we experienced faster growth in our lower-margin endless assortment business. We gained 100 basis points of SG&A leverage with a total year-over-year cost decrease of $43 million. This leverage stemmed from prudent cost reductions across all business units, partially offset by increased pandemic-related costs to keep our people and facilities safe. Sequentially, total SG&A spend decreased over $75 million, exceeding our previously communicated goal of $40 million to $55 million, a great result as we were able to deliver better-than-expected savings in many areas of the business. We generated operating cash flow of $232 million, which we used to invest in the business, return capital to shareholders and maintain a robust financial position.

During the quarter, we paid dividends of $86 million to shareholders, had total capital expenditures of $43 million and significantly invested in inventory to ensure we can satisfy our customers’ needs going forward. Operating cash flow was 114% of net adjusted earnings and return on invested capital was over 28% year-to-date. As expected, our liquidity has remained strong, and we are evaluating increasing our dividend and beginning to repay our revolver draw. I would note, our calculated decremental margins are a bit skewed given the modest level of sales decline. While the decremental margin calculation is useful, it has limitations with relatively small sales declines. For example, if our sales would have declined 10% in the quarter with the same gross margin and SG&A spending, our business results would, in fact, be worse, but our decremental margins would have improved from down 111% to down 50%. Overall, U.S. segment daily sales decreased 2.4% in the quarter as compared to a decline of an estimated 14% to 15% for the broader MRO market. The decline was primarily driven by volume decreases, including unfavorable product mix from heightened levels of pandemic-related sales as well as decreased volume of non-pandemic products. In the U.S. segment, we estimate that pandemic-related product sales were up over 70% in the quarter, peaking in May but elevated throughout the quarter. Non-pandemic products were down in the mid-teens but saw sequential improvements from April lows. Gross margin was 310 basis points unfavorable to the prior year. The variance was driven primarily by three factors: pandemic-related headwinds, tariff fuel cost inflation and the impact of our rescheduled national sales meeting. First, while difficult to pinpoint, we estimate that pandemic-related headwinds accounted for approximately 60% of the gross margin decline in the quarter.

These headwinds are multifaceted and include product mix impacts as well as we continued to sell significantly increased levels of lower-margin safety and cleaning products skewed more toward larger health care and government customers. Additionally, as we work to support our customers during this challenging time, we saw further margin pressure as we sourced high-demand products from non-traditional suppliers. This included increased freight and handling costs to ensure expedient delivery of these much-needed and critical supplies. These dramatic but temporary pandemic-related impacts are not expected to continue once we return to more normal course operation. The remaining gross margin decline was primarily driven by the lapping of year-over-year cost inflation, which was largely driven by tariffs that went into effect in 2019. Finally, our national sales meeting represents a roughly 30-basis-point headwind related to the reformatting and retiming of the meeting. From an SG&A perspective, we gained 60 basis points of leverage with costs decreasing approximately $25 million year-over-year. The decrease was driven primarily by lower travel expenses as well as reductions in marketing, labor-related costs, professional services and general frugality. These decreases more than offset temporary pandemic pay increases for hourly branch and DC team members, and enhanced safety measures in our facilities. Operating margin remained strong at 14.7%, but declined 250 basis points in the quarter on lower gross profit margins that were only slightly offset by the achieved SG&A leverage. Return on invested capital was a very healthy 38%. Looking at the U.S. MRO market, while extremely difficult to predict in this environment, we estimate the U.S. MRO market declined between 14% and 15% in the second quarter. Ranger was able to capture roughly 1,200 basis points of outgrowth in the quarter, a 70% increase compared to the first quarter share increase. It should be noted that despite the pandemic, year-to-date daily sales are up 1.6%, and we have gained over 900 basis points of share.

Also Read:  Coupa Software Incorporated (COUP) Q2 2021 Earnings Call Transcript

Moving on to the other businesses. Daily sales in our other businesses increased 2.7% or 2.5% on a constant-currency basis. The endless assortment business grew at grew combined at 16% year-over-year, driven by strong customer acquisition at MonotaRO and low single-digit growth at Zoro. MonotaRO continues to perform at an impressive rate despite the Japanese recession and amidst the pandemic backdrop. Sales at Zoro accelerated throughout the quarter, with June up near 10% and July growing at an even faster rate. The international high-touch businesses have been severely impacted by pandemic-related shutdowns, with each geography experiencing meaningful year-over-year declines. Gross profit margin declined 140 basis points in the quarter, driven primarily by declining margins at Fabory and MonotaRO. MonotaRO’s result is driven in part by freight increases from the acquisition of new B2C customers. We achieved significant SG&A leverage in the second quarter, resulting in operating margin expansion of 65 basis points. The SG&A favorability stems largely from decreased expenses across our international high-touch businesses, most notably at Cromwell, and expanded leverage in endless assortment. It is notable that despite some gross margin headwinds at MonotaRO, the endless assortment business grew operating margin in the second quarter. It is encouraging to see the 2019 investments in Zoro paying off. Further, despite significant top line challenges in 2020, Cromwell has meaningfully reduced its operating loss year-to-date. On June 30, we completed the sale of the Fabory business, the full operating results of this business are included in our second quarter results. Given the immateriality of the business, we will not be recasting our prior-year financials to reflect this transaction. So we will face revenue headwinds, but we’ll have a modest tailwind to operating margin rate comparisons over the next four quarters. Starting in the third quarter, we will provide organic daily revenue comparisons to strip out the top line impact of the divestiture.

Turning to Slide 12. In Canada, daily sales decreased 21.7% or 19% in constant currency. The decline is comprised of roughly 17.5% in volume and price headwinds, including customer mix of approximately 1.5%. Volumes at the Grainger Canada business continued to be impacted by the economic slowdown and lower oil prices stemming from the pandemic. Gross profit margin at Grainger Canada declined 145 basis points year-over-year, driven by the combination of aggressive pricing actions aimed at reinvigorating our customer base, pandemic-related mix impacts and lower vendor rebates. These impacts were partially offset by lower freight costs. Our cost management actions drove SG&A savings of $12 million year-over-year, resulting in 60 basis points of leverage. Operating margin was unfavorable 85 basis points versus prior year. Before I turn it back to D.G., given the unpredictability of the virus, it remains nearly impossible to predict how customers how our customers will be impacted, but wanted to give you a sense for how July is unfolding and what it might mean for the third quarter. From a sales perspective, trends in early July are showing sales up mid-single digits on an organic total company basis, which strips out sales from our Fabory business. July-to-date trends show continued momentum with non-pandemic sales gaining steam from April lows and with pandemic-related sales remaining at elevated levels. Further, every business unit is showing improved performance in July when compared to June results. The situation clearly remains volatile. And as we saw in Q1, these month-to-date metrics may not be good predictors of our full quarter results. As we move into the second half of 2020, we anticipate gross margins will remain depressed as we expect pandemic-related impacts will continue. While we don’t know how the situation will evolve as the year goes on, given what we know now, we anticipate improvement from the 290 basis point year-over-year headwind we saw in Q2, but to what extent will be largely dependent on the pandemic-related actions of our customers.

With respect to SG&A, as business unit activity ramps up, we expect to see some natural increases in spend related to marketing and travel, and we also reinstituted our annual merit increase, which was pushed from April to July. With this, we anticipate total company SG&A cost to range from $715 million to $730 million in the third quarter. Importantly, we remain focused on long-term growth, and we’ll continue to invest in people, process and technology to ensure we remain the industry leader. With that, I’ll turn it back to D.G. for some final thoughts.

D. G. Macpherson — Chairman of the Board

Thanks, Tom. Before we wrap up the call and go to questions, I want to touch on an important topic. The recent events of hatred and racism stand as reminders of the injustice in our world, and particularly for the African-American community. At Grainger, one of our core principles is to do the right thing. The right thing here seems fundamental: respect each other, embrace our differences and stand out for what is right. Remaining silent is not an option. Collectively, we need to be better. As a company, we know that diversity, inclusion and acceptance of our differences makes us stronger. This is central to our Grainger Edge principles and vital to our commitment to keep the world working. We have been encouraging our team members to have real conversations with each other about their background and identity, including the tough topics of race, gender, age and sexual orientation so that we can better know and understand each other. We know these conversations alone are not sufficient to solving the problem, and we need to collectively take action to ensure that economic opportunities are more plentiful for all. While we have work to do, we are committed to improving our talent and recruiting processes to root out bias, and we’re committed to promoting diverse hiring opportunities. This includes giving clear metrics and visibility, ensuring equitable pay and helping team members address unconscious bias. We’ll also continue to direct an arm of our charitable efforts to promote the educational advancement of those without privilege or access. I want to thank our team and our customers for performing so well through the pandemic. We are pleased with how we performed, and we remain committed to gaining share profitably and delivering strong results moving forward. Now with that, I’ll open it up for questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of David Manthey with Baird. Please proceed with your question.

David John Manthey — Robert W. Baird & Co. — Analyst

All right, thank you. Good morning, everyone. First off, thanks for slide six. That’s very helpful to give us a picture of what’s going on under the surface here. But my question is, could you give us an update on your efforts in high touch? What initiatives are you driving on most right now to accelerate growth in that core business?

D. G. Macpherson — Chairman of the Board

Sure. Thanks, David. I think they are the same things we’ve talked about in terms of being critical, and they really fall into two groups. One is improving our offer, our product assortment, our product information, our customer information. So we’re rolling out a new product information management system. We are remerchandising a bunch of the assortment to make the experience better for our customers. We continue to invest in digital technology for our website. So that’s kind of the first set of things we’re doing. We’ve also increased our marketing effectiveness and reimproved our digital marketing, which is both which really hits all customers within the Grainger model, the high-touch model, and that has been very effective. And we’ve reinvigorated our KeepStock and on-site solutions for customers. We have a good traction going into the fourth quarter of last year and the beginning of this year. Some of that’s slowed down, but we still have new installs. We still have changed some installs for customers to help serve them during this time. And really we think that almost every large complex customer has either a digital solution that works for them or we help to manage inventory. And so we’re pushing on those basics of on-site service to make sure we do that right. And all that is leading to a strong share gain within the U.S. business.

David John Manthey — Robert W. Baird & Co. — Analyst

Okay. And second, on the Zoro U.S. growth initiatives that you laid out last year, is it correct to think that the costs are behind you now and you’re in the harvesting stage? And obviously, great timing on those. As we look to the future, will those kind of investments be less chunky ahead? Or will you periodically step those spending initiatives up and then followed by a period of harvesting the benefits?

D. G. Macpherson — Chairman of the Board

Yes. We would expect that to be less chunky. And the reason is a lot of the investments we made over the last 15 months or so, mostly in 2019, were really about a fairly significant strategic change to expand the assortment in the millions of products. We passed the 4.4 million products available to customers online Mazuro recently, and we’ve got a great pipeline. That required us to do it very, very differently than we’ve done historically. And so those investments are behind us. And I would expect them to be less chunky. We have for the next three to five years, we will continue to expand margins with that business as we grow, given where we positioned ourselves right now.

David John Manthey — Robert W. Baird & Co. — Analyst

That’s great. DG. Thank you.

D. G. Macpherson — Chairman of the Board

Thanks. Appreciate it.

David John Manthey — Robert W. Baird & Co. — Analyst

Thank you.

Operator

Our next question comes from the line of Ryan Merkel with William Blair. Please proceed with your question.

Ryan James Merkel — William Blair & Company L.L.C. — Analyst

Hey, thanks, good morning everyone. All right. So first off, pandemic growth is holding up fairly well in July, as you cited. I realize this is hard to answer, but what is your outlook for pandemic sales going forward? Is there any visibility there?

D. G. Macpherson — Chairman of the Board

Well, so it’s a great question, Ryan. Yes, there is I mean, well, visibility in the traditional sense, I’m not sure. But certainly, if you look at our customer base, there are customers now who have planned, particularly PPE, into their process like they’ve never done it before. So you talk with customers. One customer told me they used to use 700 per day of a PPE item. Now they’re going to use 40,000 per day, as an example. So given the awareness of the virus, we would expect elevated levels of pandemic product for the foreseeable future. Will it be as much as we’ve had? Probably not, although as we see cases rise, my guess is there will be pretty significant elevated levels of pandemic product moving forward. But I do think this has forced people to change the way they think about personal protection and think about some of these products and keeping team members safe. So we expect to see elevated product levels for at least the next 1.5 years and probably beyond.

Ryan James Merkel — William Blair & Company L.L.C. — Analyst

Okay. That’s helpful. And then second question on non-pandemic sales. So I guess 2-part question. Were the share gains there as strong? It looks like maybe not. Maybe clarify that. And then how did margins perform in non-pandemic sales year-over-year? Any surprises there?

D. G. Macpherson — Chairman of the Board

Yes. First, and I can turn it over to Tom. Margins were not surprising for us there, and they performed, clearly, better than the pandemic sales, because a lot of the pandemic sales are very large orders to large contract customers. So the margins were certainly better with non-pandemic. I would say that it’s challenging. Our market assumption of down 14, 15 in the U.S. would assume that non-pandemic sales were down quite a bit more than that. And so we do believe we gain significant share in non-pandemic product as well. Getting that level of detail, looking at that our model is almost impossible to do. And so I would say, don’t really know. We think we gained share throughout all product categories. Whether we gained more or less share with non-pandemic is really, really hard to do. My guess is it’s less, but still very strong.

Ryan James Merkel — William Blair & Company L.L.C. — Analyst

Okay, perfect. Thanks. Pass it on.

D. G. Macpherson — Chairman of the Board

Thank you.

Operator

Our next question comes from the line of John Inch with Gordon Haskett. Please proceed with your question.

John George Inch — Gordon Haskett — Analyst

Just as a thought. Your concern for social issues is laudable. You guys might want to even think of expanding your presence in the Chicago area, maybe even the south side of Chicago. Just as a thought.

D. G. Macpherson — Chairman of the Board

Yes, yes.

John George Inch — Gordon Haskett — Analyst

No, it’s [Indecipherable]. Like, why not? Consider it. So my question is, D.G., on Canada. Canada’s results have been pretty bad for a while. But in some respect, they’re down 19% or whatever core. They held up the profits pretty well. How did they do that exactly? Like, why was there not more decremental drag? Is that just because it’s been bad for so long that it’s been able to sort of move and adjust the costs? And would you expect that kind of performance going forward in terms of Canada’s cost preservation?

D. G. Macpherson — Chairman of the Board

The answer is, yes, we expect it going forward. I think the thing that’s probably not easy to understand is I spent some time with our customers recently in Canada, and our services improved dramatically there over the last couple of years. And coming off of the SAP installation and some other things, we have real challenging period there with service. And so I think a lot of this is just customers coming to realize that we’re providing strong service, building better relationships, and we’ve taken the cost actions we have. So we feel like that business is poised to do much, much better. Obviously, they’re going to be faced with some market challenges, but we feel like they’re positioned to do better. And we’ve taken a lot of cost out, but we also continue to invest in pockets for growth. And we feel like from a share perspective, we can gain share and gain share profitably given our current position.

Also Read:  Dave & Buster's Entertainment Inc. (PLAY) Q2 2020 Earnings Call Transcript

John George Inch — Gordon Haskett — Analyst

Well, I was going to ask you about Canada strategically. It has been I appreciate the investment posture. Like, is there a way to maybe even step that up over time? I guess the question is, so at some point after what’s been like three years or whatever, pretty tough results there, I’m assuming, number one, you’re not able to actually sell the business. Because I think years ago, you guys implemented initiatives to integrate it more with the U.S., so selling it would actually be challenging. You’d have to untangle it. So if you can’t really do that, is the plan to just get it profitable over time to a certain threshold and it sort of sits as a cash cow? Or you really think it can sort of do what some of the some of what you’ve been able to accomplish in the U.S. in terms of share gains, can it do that in Canada, perhaps by shifting away from oil and gas more to other pockets of their economy or whatever?

D. G. Macpherson — Chairman of the Board

Yes, we believe we can do that. And actually, we’re starting to see that. So with government, health care, manufacturing, we’re starting to get some traction there. And as that happens, we believe it can be a growth engine. We’re obviously going to be very, very focused on profitability. But we do think there’s going to be nice growth coming out, particularly the eastern part of Canada, and we’ve already started to see some of that underneath the numbers. And so we feel like and you’re right, it is running we’re running it more like the U.S., and that’s helped our cost position. But the team up there is very focused on profitable growth. I think we’ve got a really strong leadership team up there and the sales organization now, and we’re pretty excited about the path and the ability to grow consistently and grow profitably.

John George Inch — Gordon Haskett — Analyst

So it sounds like 2021 could actually be a significant inflection year, without putting words in your mouth. Is that reasonable as a thought process?

D. G. Macpherson — Chairman of the Board

It’s a reasonable assumption. I think pandemic aside, how it evolves. But yes, we feel like we felt like this year was going to be significant improvement. We started to see that in the first couple of months and then, of course, the world stopped. So we feel like we’re well positioned when things do come back for it to be an inflection.

John George Inch — Gordon Haskett — Analyst

Appreciate it. Thank you.

Operator

Our next question comes from the line of Christopher Glynn with Oppenheimer. Please proceed with your question.

Christopher M. Dankert — Longbow Research LLC — Analyst

Yeah. Thank you. Good morning. Yes. I just wanted to stick with Canada for a second. And I think I saw aggressive pricing there. Wondering what enabled that. Was that kind of catch-up on now that service levels are more enabling? Or is there lack of elasticity?

D. G. Macpherson — Chairman of the Board

No. Most of that is what we saw in the U.S. with pandemic. So large sales of pandemic items to government customers, some health care customers. That is the majority of the aggressive pricing would have been to serve the pandemic.

Christopher D. Glynn — Oppenheimer & Co. Inc. — Analyst

Okay. And on the share gain, I think Tom mentioned 900 basis points. Just curious. Again, another crack at trying to filter that with the pandemic demand. It doesn’t seem like it’d be a sticky type of share gain that you have, the way you normally accrue shares. So wondering about how you’re viewing retention of that.

D. G. Macpherson — Chairman of the Board

Well, the way I’m viewing it personally is, we the world is a little unusual right now, right? So to say that you gained 1,200 basis points a share when you were down 2%, it seems like a strange thing to say. We think it’s accurate analytically, but it’s a little messy, right? Because we it’s hard to tell what’s going on underneath that. We feel like we are gaining share. We feel like we’re doing the right things. And we feel like our normal share gains, we’ll be able to retain. There may be some of that that’s hard to retain, of course, depending on sort of pandemic sales. But certainly, we feel good about it, but we don’t we’re not taking it literally, if that’s your question.

Christopher D. Glynn — Oppenheimer & Co. Inc. — Analyst

Yeah. I appreciate the cost.

D. G. Macpherson — Chairman of the Board

Thank you. Thank you.

Operator

Our next question comes from the line of Adam Uhlman with Cleveland Research. Please proceed with your question.

Adam William Uhlman — Cleveland Research Company — Analyst

Hi guys, good morning. Hey, just to follow-up on that question. In the past, you used to talk about the medium-sized customer recovery from lapsed customers or folks who used to do business with. Could you remind us of what your headroom is of gaining share with those folks?

D. G. Macpherson — Chairman of the Board

Yes. So we saw an interesting dynamic with midsized customers during the quarter that has since reversed. And so let me talk about that for just a second. So with large customers, we ended up prioritizing a lot of pandemic efforts for large customers, hospitals and government customers, in particular, and essential manufacturing businesses and others distribution businesses. As a result of that, we held pandemic product from the website, in some cases, and you’re seeing all the competitors do that. And we did see the midsized customers get hit harder during the initial shelter-in-place orders. What we’ve seen though is they’ve actually come back stronger. And so we’re seeing very strong growth with midsized customers in the last six weeks, which is encouraging. We’ve acquired more new customers than we really ever had during this period because we’ve had product and many others haven’t. And so we think we’ve got a very strong a lot of headroom with midsized customers, we were, at one point, $1.8 billion, and we think we can get back to there and beyond over time. So we think we’ve got a long way to grow to have outgrowth with midsized customers. And the pandemic has been a strange period for everything, but we’re now starting to see that growth come back in again.

Adam William Uhlman — Cleveland Research Company — Analyst

Okay. Got you. And then how should we think about inventories, specifically for the rest of the year? And maybe just some thoughts on working capital for the second half, would be great.

D. G. Macpherson — Chairman of the Board

So I’ll turn it over to Tom here in just a second. I would say we have made significant inventory investments to be able to get continuity of supply for our customers. So more than we obviously typically would, given some of the supply challenges that existed in the world, and that has been a working capital build. We would expect that build to stay throughout the remainder of this year and into next year before it starts to bleed off, but I’ll turn it over to Tom.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Yes. Thanks, D.G. Yes, what was part of our operating cash flow bridge was a significant investment into working capital and, specifically, inventory. When it became clear, coming through the first quarter and into the second quarter, that we were in a cash generation position, then we felt it was right to invest in working capital, use our strong balance sheet so that we would be able to take care of the needs of our customers. So we have done prebuys. We’ve done prepayments. And we think we’re well-suited to take care of the needs going forward to help out those key customers thank you.

Operator

Our next question comes from the line of Nigel Coe with Wolfe Research. Please proceed with your question.

Nigel Edward Coe — Wolfe Research — Analyst

Thanks, good morning. Just going back to the pandemic. Actually, no, let me skip that. Let’s go to single channel. I mean, the growth at Zoro was actually pretty impressive. As was I’m not sure, but we get the daily sales monthly from their website. I mean, I think the factors are pretty clear. But is there any way to think about the SKU expansion year-over-year? And how much of that is contributing to the growth versus just demand? And I’m curious, given the nature of the shutdowns and the pandemic, is there any cannibalization happening between single channel endless assortment and your traditional business during this period of time?

D. G. Macpherson — Chairman of the Board

Yes. So great questions. So I think I mentioned, we have a very strong pipeline, millions of products in the pipeline to add to Zoro. If you look over the last three or four years, you look at curves of new product adds and their productivity, remains a big part of the growth of Zoro. And in, let’s call it, normal times, we would expect product adds over the next three to five years to be as much as half of the growth of the business. And so that’s obviously an important growth driver. We have not seen any further cannibalization during this period than we’ve seen at other times between Zoro and Grainger. In fact, Zoro’s growth has been a lot of it’s been very, very focused on very small customers during this time and getting them product they can’t get elsewhere. So we’re pretty excited about the pattern. I will say that both MonotaRO and Zoro have had higher acquisition than normal, and some of that acquisition has been consumers. We don’t remarket to consumers. They do find as some as people have been trying to find pandemic-related or really any product during this time. But the business acquisition has been stronger than normal, too, and that’s really the important number to look at. So that’s strong business acquisition, driven in part by product adds.

Nigel Edward Coe — Wolfe Research — Analyst

Great. And then, obviously, the way you’ve broken out, say, the mix and the price/mix this quarter, I think, is really helpful. The 30 bps of headwind from price and customer mix, would you be prepared to talk about price in isolation? How is pricing tracking right now? And how do you feel customer pricing is in terms of the go-forward? Are customers receptive of inflation right now? Or any change on pricing power?

D. G. Macpherson — Chairman of the Board

Yes. We haven’t really seen any change in pricing power. Our pricing and Tom, I’ll let you answer this. I will say our pricing, in normal years, we see GP trail off as the year goes along. This year is going to be not as much of that as we do see price get better, and we’ve seen it get better through the second quarter. And so we feel like we’re going to get more price going forward. But Tom, do you want to answer?

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Yes, sure. Thanks for the question, Nigel, and I read your note before the call. And I think it’s important to note that we really haven’t done anything new in terms of calculation. We’ve just broken out product mix with volume. Product mix had always been in volume. But just historically, it hadn’t been so relevant. It was fairly static. Obviously, with the pandemic, it’s a much, much bigger story, so that’s why we broke it out. And as it relates to our revenue bridge, it represents over 90% of the variance. The remainder, as you note, is some customer mix and price. And as D.G. said, we’ve seen strengthening over the quarter, and we expect that into the future in terms of price inflation, albeit we’ve seen a little bit of softness as it compares to prior year.

Nigel Edward Coe — Wolfe Research — Analyst

Okay. Thanks, Tom. Thanks.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Thank you.

Operator

Our next question comes from the line of Chris Dankert with Longbow Research.

Christopher M. Dankert — Longbow Research LLC — Analyst

I guess just to carry that a bit further. Tom, in the past, you’ve mentioned that some introductory pricing was certainly an onboarding engine for large customer acquisition. I guess, is that still a part of the strategy? You highlighted some of the other pieces there, but should we still expect prices, from a strategic standpoint, to be a bit lower in that large customer piece of the business going forward?

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Yes. I would say that’s probably paused a little bit with the pandemic, just with the focus with the PPE, but it’s certainly still part of the acquisition strategy. And maybe since you brought up gross margin related, let me try to unpack it even a little bit further than we did in the prepared remarks. As we’re not giving guidance, want to be as helpful as we can to everybody putting their models together. So as we’ve said in the prepared remarks, we’ve got 60%, which is COVID-related. So on 310 bps, that’s roughly 180 bps unfavorable versus prior year. You’ve got NSSM, it’s 30 bps. So there, it’s 210 in total. And the remainder is cost/other and as DG mentioned, historically, going from Q2 to Q3, we would see a meaningful decline in terms of gross margin rate. This year, going as it relates to Q3, we expect that to be mitigated somewhat for the following reasons. NSSM will no longer be a headwind, so we will gain that back. We also see the tariff cadence improving. So tariff-related cost inflation will improve a little bit. And then we see price inflation strengthening as well, and we expect that to continue into Q3. Now the big wildcard, of course, is the pandemic impact as it relates to gross margin. So that is really the wildcard in terms of what the actual gross margin rate will be for Q3. What we do expect, though, as we compare the gross margin rate to the prior year, we don’t expect to be down 310 bps in the U.S. segment and 290 bps overall. We do expect improvement from that. So just wanted to give you that color to help you all with your modeling. Thanks.

Also Read:  Kirkland's Inc. (KIRK) Q2 2020 Earnings Call Transcript

Christopher M. Dankert — Longbow Research LLC — Analyst

No, that’s extremely helpful. And then just to follow-up. I guess, we’ve seen China and Fabory go away here. I guess, just any quick thoughts on Cromwell. How it’s executing? Does it still make sense in the portfolio? Just your high-level thoughts would be great.

D. G. Macpherson — Chairman of the Board

Yes. I guess, I’ll give some thoughts. So Cromwell is it is a business that is very much in our high-touch solutions model. It looks a lot like Grainger. They have executed, I think, while the last year, to put themselves in a position where they can grow and improve profitability dramatically. So the pandemic doesn’t change our thoughts on the business. We’ve talked about sort of making sure we have a fast recovery of that business. We should be able to get very clear signs on the pace of that recovery coming out of this. So I’d say, happy with the team, happy with what they’re doing. Service is really, really good there now and starting to win back some business, and they’re starting to improve profitability, they’ve improved their cost position. I want to give that a chance to run out a little bit more. Obviously, the pandemic may slow that a little bit. But certainly, we still have high expectations for how they can turn it around there.

Christopher M. Dankert — Longbow Research LLC — Analyst

Understood. Thanks so much guys.

D. G. Macpherson — Chairman of the Board

No better luck going forward here. Thank you.

Christopher M. Dankert — Longbow Research LLC — Analyst

Thank you.

D. G. Macpherson — Chairman of the Board

Thank you.

Operator

Our next question comes from the line of Deane Dray with RBC Capital Markets. Please proceed with your question.

Deane Michael Dray — RBC Capital Markets — Analyst

Thank you. Good morning, everyone. I didn’t maybe a couple of questions on capital allocation. When do you think you might be resuming buybacks? And then any other color on a potential dividend increase, either the timing, magnitude? Are you tying it to a payout ratio? This is D.G., as you said, these are not normal times, but how does that how do you how are you looking at the dividend increase?

Thomas B. Okray — Senior Vice President and Chief Financial Officer

We’d expect that dividend increase would be similar to what it has been in prior years, Deane. With respect to timing, we’ve been talking about it. And if something happens, it would probably happen in the third quarter. With respect to repurchasing shares, right now, with the spike and are we going to have a shutdown to with an abundance of caution, we really haven’t resumed the buybacks, even though we are obviously generating robust cash flow. That, we would probably start to think a little bit harder at the end of Q3. And if we were going to do something, it would likely be in Q4, I would think.

Deane Michael Dray — RBC Capital Markets — Analyst

That’s helpful. And considering the divestitures of Fabory and Grainger China, are you contemplating any other portfolio moves over the near term? Any divestitures?

D. G. Macpherson — Chairman of the Board

Not at this point, we are not.

Deane Michael Dray — RBC Capital Markets — Analyst

Good. And then just last one from me. Could you expand on, in the context of having to source some high demand products from I think you described them as nonstandard suppliers. What the challenges are. I think you touched on freight, but did you have to qualify the suppliers? And how do you think this issue, this headwind abates?

D. G. Macpherson — Chairman of the Board

Yes. So it’s been a very unusual time for supply. I think the things that we’ve been really focused on are making sure we can get supply of high-quality products. So we do have to qualify suppliers. We have to decide whether or not the product meets our quality standards and actually does what it says it’s going to do. And then we have to, in some cases, as Tom mentioned, yet you have to pay some upfront money, which typically would not happen, and we’ve done that in a number of cases. So it’s a and as this thing unfolded, it was a little bit like the Wild West in the sense that everybody claimed they had a solution, and oftentimes, those solutions weren’t real. And so we’ve had to work with our team in China and to work with our team in the U.S. to really understand the quality, the availability, the integrity of the supply, and that’s been really important. I think we’ve done a nice job navigating that. But I expect that to weigh now in some categories that may remain. But generally, it’s gotten a little bit easier lately.

Deane Michael Dray — RBC Capital Markets — Analyst

Good to hear. Thank you.

D. G. Macpherson — Chairman of the Board

Thank you.

Deane Michael Dray — RBC Capital Markets — Analyst

Thank you.

Operator

Our next question comes from the line of Hamzah Mazari with Jefferies. Please proceed with your question.

Hamzah Mazari — Jefferies LLC — Analyst

D.G., you touched on the top line growth for Zoro and MonotaRO. I was hoping maybe you could just touch on how to think about profitability of Zoro versus MonotaRO. Are there any structural differences, whereby Zoro shouldn’t look like MonotaRO longer term? Just any thoughts there.

D. G. Macpherson — Chairman of the Board

We have looked at that. And as you know, Masaya Suzuki is running that business at this point, the Zoro business, and he’s been the CEO of and still is the CEO of MonotaRO. The differences, if they exist, are relatively minor. We think that the Zoro business should be able to get to certainly high single-digit operating margins, which is very profitable from return on invested capital. And we’ve got our plans to go ahead and make that happen over the next several years. And so we feel really good about the profitability path of Zoro.

Hamzah Mazari — Jefferies LLC — Analyst

Got it. And just a follow-up question, I’ll turn it over. Tom, you gave some incremental color on gross margin. So it’s more of a clarification question. If pandemic sales continue sort of at the same pace as July, is Q3 gross margin just down sequentially, assuming pandemic sales kind of continue at the pace they are?

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Well, just to reiterate, Hamzah, there’s going to be some tailwinds, for sure, and that’s the NSSM meeting, that’s the cost tariffs and that’s the strengthening pricing. We would also expect, as D.G. said, some of the money we paid to, let’s say, air freight supply, we would expect that to likely go down as well. The bottom line is it’s just so hard to predict something that’s never happened before in terms of the pandemic. So I’ll just reiterate. Historically, Q3 gross margin is less than q2. Would not expect it to be that dramatic of a falloff in as it has been historically. So I’ll leave it at that. But we do expect that it will be significantly, from a bps perspective compared to prior year, not as down as 310 or 290 for the overall company.

Hamzah Mazari — Jefferies LLC — Analyst

Great, thank you so much.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Welcome.

Hamzah Mazari — Jefferies LLC — Analyst

Thank you.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Thank you.

Operator

Our next question comes from the line of Michael McGinn with Wells Fargo. Please proceed with your question.

Michael Lawrence McGinn — Wells Fargo Securities — Analyst

Good morning, everyone. Thanks for sneaking me in here. If I could go to the U.S. segment, just thinking a little outside the box. Can you kind of frame for us what the opening of branches means from a sequential sales uptick if we were thinking of that as like a noncore add back, what that means in terms of sales and maybe margin mix?

D. G. Macpherson — Chairman of the Board

So you’re talking about opening our showrooms where we were only doing curbside for a while?

Michael Lawrence McGinn — Wells Fargo Securities — Analyst

Correct.

D. G. Macpherson — Chairman of the Board

Yes. So I would say that just rough math, walk-in traffic is about 10% of our volume or revenue, at least at this point. And what we see is we see a modest increase when we open the showrooms. It is it should help margins because, typically, the profile of those customers are not generally contract customers, and it’s usually higher-margin sales. So it will be modest for the overall growth profile, but it will help. And we’ve seen that already happen as we’ve opened those up.

Michael Lawrence McGinn — Wells Fargo Securities — Analyst

Okay. And then second one for me. I think Nigel was mentioning the SKU count additions on Zoro. You have a fellow, I guess, B2C company out there with similar ambitions to rapidly increase SKU count. Can you give us a framework for how many resellers you have added and how much it would take to get to that $10 million, and whether you view that $10 million as a high hurdle, low bar? Any commentary there would be great.

D. G. Macpherson — Chairman of the Board

Yes. given I would say that given the we’re talking about every quarter, adding tens of suppliers. So it’s not thousands of suppliers before, but it’s tens of suppliers. But we have a line of sight into getting to six million or seven million SKUs at this point, and we feel like getting to $10 million is not all that difficult to do given the new processes we have in place. I will say that the MonotaRO business in Japan is about 20 million, roughly 20 million items. So we’ve done this before. We understand the process. And I think the team has done a great job of configuring to be able to step on the accelerator, and we have a very nice pipeline at this point.

Michael Lawrence McGinn — Wells Fargo Securities — Analyst

Thanks.

D. G. Macpherson — Chairman of the Board

Thank you.

Operator

Our final question comes from the line of Patrick Baumann with JPMorgan. Please proceed with your question.

Patrick Michael Baumann — JPMorgan Chase & Co — Analyst

Hey Tom, thanks steam in here Just a quick one on so you talked a lot about gross margin expectations for third quarter. Just if you could provide any framework. Maybe I missed this earlier, but any framework around how to think about SG&A or incremental margins in the third quarter if sales continue to grow in that mid-single-digit range?

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Yes. I mean, related to SG&A, I’ll refer you back to the prepared remarks where we think, on a total company basis, SG&A will be between $715 million and $730 million. And that is a decrease, obviously, from prior year, but an increase from Q2 as the country starts to open up and we’re spending more on travel, we’re spending more on advertising. Those types of things. As it relates to decremental margin, if we were to see a volume decline from 5% to 10%, which is inconsistent with what we’ve seen so far, July to date, we would expect decremental margins to be in the 35% to 45% range, consistent with what we said last quarter. Obviously, if we continue at a mid-single-digit growth, then we would flip from decremental margins to incremental margins. And there, I think, depending on, again, and I have to keep I apologize, I have to keep giving the qualifier of what the pandemic looks like. But depending on how the gross margin behaves, we could be around 20% plus/minus gross margins as long as the pandemic does not take a really harder hit on gross margin.

Patrick Michael Baumann — JPMorgan Chase & Co — Analyst

What go ahead. Go ahead, D.G.

D. G. Macpherson — Chairman of the Board

[Indecipherable] to Tom is we talked about adding travel costs back. That may sound a little odd in today’s world. What we really mean there is we are now able to visit most of our customers. So we’re talking about mileage reimbursement for our sales team, which will increase. It’s not a huge number, but that’s the type of cost add-back we would be having, is being able to engage our customers, again, which we started to do.

Patrick Michael Baumann — JPMorgan Chase & Co — Analyst

Yes. I assume great clarification. I assume that $715 million to $730 million is embedding sales growth since you’re growing 5% to date? Or is the range there because you don’t know. How do I think about that?

D. G. Macpherson — Chairman of the Board

I think our assumptions change frequently now as the world changes. But certainly, right now, we would envision all we really know is through the first three weeks, we’re up about mid-single digits.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

And I’ll just reiterate, it is lower than prior year, which was in the $760 million range.

Patrick Michael Baumann — JPMorgan Chase & Co — Analyst

Yes. And then last one for me. Did you mention the year-over-year benefit from tax in the second quarter to free cash flow? I might have missed that, too. Sorry about that.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Can you repeat the question, please, Patrick?

Patrick Michael Baumann — JPMorgan Chase & Co — Analyst

I thought I read in the slides or somewhere that there was a benefit from timing of tax payments and free cash flow in the second quarter.

Thomas B. Okray — Senior Vice President and Chief Financial Officer

Yes, yes. Thank you. Yes, there was $115 million benefit deferral of federal income taxes. Instead of paying our federal payments in April and June, like we did in the prior year, we pay them in July.

Operator

Thank you. We have reached the end of our question-and-answer session. I’d like to turn the call back over to Mr. Macpherson for any closing remarks.

D. G. Macpherson — Chairman of the Board

Great. I’ll keep this very short. Thanks for joining us today. Certainly, I think we’d all agree that there’s probably more market uncertainty at any time in our careers. But hopefully, you see from our results that we think we’re prepared to perform through whatever comes. We’re excited to see some of the non-pandemic volume come back, and we’re excited by the trends. And we’re going to stay completely focused on our core business models and driving profitable share gain through our high-touch solutions model in North America and our analyst assortment business. So we’re proud of where we are, what we’ve accomplished, and we’re ready for the future. So thanks for joining us today, and I wish you all will stay safe.

Operator

[Operator Closing Remarks]

Disclaimer

This transcript is produced by AlphaStreet, Inc. While we strive to produce the best transcripts, it may contain misspellings and other inaccuracies. This transcript is provided as is without express or implied warranties of any kind. As with all our articles, AlphaStreet, Inc. does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company’s SEC filings. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. Any opinion expressed in the transcript does not necessarily reflect the views of AlphaStreet, Inc.

© COPYRIGHT 2020, AlphaStreet, Inc. All rights reserved. Any reproduction, redistribution or retransmission is expressly prohibited.

Most Popular

COVID-19 drove retailers up the digital path years ahead than anticipated

Earlier we looked into how, during the COVID-19 pandemic, retailers saw changing trends in terms of their assortments and how the acceleration of online shopping led many of them to

Snowflake (SNOW) creates a record as the most successful software IPO ever; stock more than doubles

Data is at the heart of business innovation. Recognizing this trend, companies are seeking ways to transform their businesses by capturing, analyzing, and mobilizing data. The public cloud is becoming

Adobe (ADBE) sees new tailwinds as virtual shift gathers steam

The second half has been highly rewarding for design software maker Adobe Inc. (NASDAQ: ADBE) amid stable demand for digital content solutions. The company has remained unaffected by the virus-related

Top