Mike Smargiassi - IR Larry Reinhold - President and CEO

Thank you and welcome to the Systemax second quarter 2016 earnings call. Today's call has been prerecorded and will include formal remarks from Larry Reinhold, President and Chief Executive Officer. We will not be hosting a live Q&A session at the end of today's call. If you should have any questions on second quarter results, please contact Brainerd Communicators or Systemax. Contact details can be found in the press release issued today and at www.systemax.com. 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 under the forward-looking statements caption in the company's annual report on Form 10-K, and quarterly reports on Form 10-Q. I would like to highlight that non-GAAP metrics are included in today's press release. The company believes that by presenting the entire North American technology products group as a discontinued operation, and excluding certain recurring and non-recurring adjustments from comparable GAAP measures, investors have an additional meaningful measurement of the company's performance. As a result, this call will include a discussion of certain non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's press release. The press release is available on the company's website and will be filed with the SEC in a Form 8-K. This call is the property of and is copyrighted by Systemax Inc. I will now turn the call over to Mr. Larry Reinhold.

Thanks, Mike, and good afternoon. Thank you for joining us today. In the quarter, we continued to streamline our business, optimize our operations, and we took additional steps to improve our long-term profitability. Industrial extended its revenue growth streak to 26 consecutive quarters despite a soft North American MRO market, improved efficiencies in its distribution network, and implemented a cost reduction initiative, which will lower its annual cost structure by about $4 million per year. Its quarterly results include approximately $2.9 million in one-time costs associated with the cost reduction initiative and an inventory adjustment caused by an IT system issue. We have identified the root cause of the error and have implemented controls to prevent its recurrence. Industrial continues to make investments in its sales capabilities as we increased our customer facing representatives, which included hiring a number of experienced sales professionals. We also continued to make progress on the optimization of our distribution network. We went live with our new warehouse management system in our New Jersey facility. We increased efficiencies in our larger Las Vegas warehouse, and we expanded our ability to handle small parcel shipments in several facilities. This year, we've launched a series of customer and vendor shows in a number of locations. These shows have been very well received by customers and provide a global branded event that highlights our vendor relationships, the breadth of our product offering, and the value we bring, particularly in more advanced and technical product lines as well as our own private label brands. We recently completed our third show in Port Washington, New York, and will hold shows in Pleasant Prairie, Wisconsin this week, and in Las Vegas during October. Finally, we recently kicked off a long-term strategic planning project for industrial. With the acquisition of PEG and…