Good afternoon, ladies and gentlemen, and welcome to Systemax Incorporated Third 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 third 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 non-recurring adjustments for 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 the 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. I would now like to turn the call over to Barry Litwin.

Thanks, Mike. Good afternoon everyone, and thank you for joining us today. In the third quarter, we continued to execute our customer-centric strategy and strategic growth pillars. Specifically, we made investments in our distribution and digital platforms that will allow us to deliver a differentiated customer experience, while driving long-term customer value and financial results. Our third quarter revenue of 3.5% on an average daily constant currency sales basis reflects the soft market environment and a cautious, but committed global customer. Gross margin was stable for the third quarter compared with the first and second quarter of 2019, both of which were impacted by tariff cost increases. The consistent performance in the first nine months of the year is a direct result of the proactive actions our team is taking to mitigate the tariff impact and manage current market dynamics. Operating results primarily reflect the impact of planned investments specifically in our distribution network. Approximately $1.7 million of costs were incurred as we started up our new distribution center in Dallas. Excluding these costs, the overall business generated improved profitability over last year. The Dallas facility went live in early September, and we have rebalanced our distribution workforce to optimize costs and will drive additional efficiency as Dallas ramps capacity. The expansion of our distribution network is a key component of our strategy and was critical to providing customers with shorter lead times and more competitive shipping rates, while supporting growth and long-term operating leverage. As part of our ongoing strategy, we have executed a number of initiatives that will position us to deepen customer relationships and drive operational excellence. On August 8, we held the Global Experience National Trade Show in Nashville, Tennessee. It was an exceptional event with more than 1,000 customers and 150 vendor partners in attendance.…

Thank you, Barry. I will now address our performance in more detail. And we note that we had the same number of selling days in the third quarter of 2019 as we did in the year ago period. In the third quarter, revenue increased 3.4% on a GAAP basis and increased 3.5% on an average daily sales constant currency basis over Q3 of last year. Revenue was approximately $244 million with growth in the US of 3.4%, while Canada grew 5.3% in local currency on an average daily sales basis. I would note that in the year ago quarter, we recorded our strongest organic revenue growth in five years and benefited from a large project-based customer order, which impacted our third quarter 2019 growth rate by approximately 50 basis points. We continued to see strength in categories where we are investing in subject matter expertise and strong customer retention, while on an overall basis, we saw some weakness in average order values as customers appear to be taking a cautious approach in their buying behavior. Gross profit for the quarter increased to $84.4 million, up from $82.2 million last year. Gross margin was 34.6%, down 30 basis points from the prior year, but in line with the first and second quarters of 2019. The stable gross margin performance sequentially reflects proactive management of our inventory, purchasing and pricing to address tariff increases. We delivered modest product margin improvement in the quarter and remained focused on maintaining our gross margin profile. Selling, distribution and administrative spending for the quarter was $66.7 million or 27.3% of net sales. SG&A leverage contracted in the quarter, primarily as a result of costs associated with our new distribution center in Dallas, which more than offset improved efficiencies in other parts of the business. Within GAAP…

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