Good afternoon, ladies and gentlemen, and welcome to Systemax Incorporated's Second Quarter 2019 Earnings Call. At this time, I would like to turn the call over to Mike Smargiassi of The Plunkett Group. Please go ahead.

Thank you, and welcome to the Systemax second quarter 2019 earnings call. Today's call will include formal remarks from Barry Litwin, Chief Executive Officer; and Tex Clark, Vice President and Chief Financial 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 the results, please contact The Plunkett Group or Systemax. Contact details can be found in the press release issued today and at 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 and under Risk Factors in the company's Annual Report on Form 10-K and quarterly reports on Form 10-Q. I would like to highlight the non-GAAP metrics that are included in today's press release. The company believes that by excluding certain recurring and nonrecurring adjustments from comparable GAAP measures, investors have an additional meaningful measurement of the company's performance. This call will include a discussion of certain non-GAAP financial measures, which we will identify as such. The company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's discussion and 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. Barry Litwin.

Thanks Mike. Good afternoon everyone and thank you for joining us today. We delivered another solid financial performance with second-quarter revenue of approximately 249 million and average daily constant currency sales growth of 7.8%, all of which was organic growth. We maintained gross margin rates consistent with both last year and the first quarter as we actively managed through the current market and tariff environment. Operating margin increased 10 basis points and operating income was up 9.3% as we delivered improved leverage while making investments in our strategy to drive growth. On a non-GAAP basis adjusted operating income grew 17.1% to 21.9 million, a margin of 8.8%. We had excellent cash generation and ended the quarter with approximately 91 million in cash. Across the organization our management and associate team have embraced the strategy and strategic pillars we announced at the start of the year. As a reminder, these pillars are: Delivering a differentiated customer experience. Offering innovative branded and private label products. Providing rich MRO knowledge and technical expertise. Driving operational excellence. Propelling financial, talent and technology innovation. And finally pursuing potential acquisitions to drive synergies and expand capacities, customer and product growth. At the heart of our growth pillars is a focus on the customer experience. The way we operate the business is undergoing a fundamental change and we are already seeing the initial benefits. These include improved service levels in our distribution network with sequential year-over-year gains in same-day shipping rates and a reduction in customer service calls, as we provide a greater end-to-end transaction transparency. As we continue to execute our strategy, we recently launched a formal voice of customer communication process to engage our customers more closely and actively listen to their needs. In select product growth verticals, we are significantly enhancing the value we…

Thank you, Barry. I will now address our performance in more detail and would like to note that we had one fewer selling day in Canada for the second quarter 2019 versus the year ago period due to the later Easter holiday this year. In the second quarter revenue increased 7.5% on a GAAP basis and 7.8% on an average daily sales constant currency basis over Q2 of last year. Revenue was approximately $249 million with growth in the U.S. of 7% while Canada delivered its 10th consecutive quarter of strong double-digit revenue gains with growth of more than 16% local currency on an average daily sales basis. Revenue performance was broad-based across product categories with growth continuing to be led by newer product lines where we are investing in subject matter expertise, sales training and in expanding offering. We did see a slower ramp in HVAC. Historically, one of our top second-quarter categories due to the cooler weather patterns which several of our peers have also noted. HVAC sales returned to normalized levels in late June and continued to perform well. We also had growth across sales channels specifically managed sales, where we continue to invest in sales productivity and training initiatives. Gross profit for the quarter increased to $86 million up from $80 million last year. Gross margin was 34.6%, unchanged from the prior year, reflecting proactive management of our inventory, purchasing and pricing to address the first round of 10% tariffs enacted in September of 2018, which have fully worked through our inventory. We are managing the latest round of tariff increases which were enacted in June 2019, with a similar approach to how we have operated the business over the last year. We are monitoring sale prices in the market, continue to work with our suppliers,…

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. End of Q&A: