FISCAL 2023 Q3 HIGHLIGHTS
- Net sales of $1,054.5 million
increased 10.0% YoY (11.7% on an average daily sales basis),
approximately 11 percentage points above the Industrial Production
(IP) index
- Operating income of $135.4
million, or $138.6 million
adjusted to exclude share reclassification proposal costs and
restructuring and other costs1
- Operating margin of 12.8%, or 13.1% excluding the adjustments
described above1
- Diluted EPS of $1.69 vs.
$1.78 in the prior fiscal year
quarter
- Adjusted diluted EPS of $1.74 vs.
$1.82 in the prior fiscal year
quarter1
MELVILLE, N.Y. and DAVIDSON, N.C., June 29,
2023 /PRNewswire/ -- MSC INDUSTRIAL SUPPLY
CO. (NYSE: MSM), "MSC," "MSC Industrial" or the "Company," a
leading North American distributor of a broad range of metalworking
and maintenance, repair and operations (MRO) products and services,
today reported financial results for its fiscal 2023 third quarter
ended June 3, 2023.
Financial
Highlights2
|
|
FY23
Q3
|
|
FY22
Q3
|
|
Change
|
|
FY23
YTD
|
|
FY22
YTD
|
|
Change
|
Net Sales
|
|
$ 1,054.5
|
|
$
958.6
|
|
10.0 %
|
|
$ 2,973.8
|
|
$ 2,669.6
|
|
11.4 %
|
Income from
Operations
|
|
$
135.4
|
|
$
136.8
|
|
(1.1) %
|
|
$
365.7
|
|
$
324.7
|
|
12.6 %
|
Operating
Margin
|
|
12.8 %
|
|
14.3 %
|
|
|
|
12.3 %
|
|
12.2 %
|
|
|
Net Income Attributable
to MSC
|
|
$ 95.2
|
|
$ 99.7
|
|
(4.5) %
|
|
$
255.6
|
|
$
235.7
|
|
8.5 %
|
Diluted EPS
|
|
$ 1.69
|
(3)
|
$ 1.78
|
(4)
|
(5.1) %
|
|
$ 4.56
|
(3)
|
$ 4.21
|
(4)
|
8.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial
Highlights 2
|
|
FY23
Q3
|
|
FY22
Q3
|
|
Change
|
|
FY23
YTD
|
|
FY22
YTD
|
|
Change
|
Net Sales
|
|
$ 1,054.5
|
|
$
958.6
|
|
10.0 %
|
|
$ 2,973.8
|
|
$ 2,669.6
|
|
11.4 %
|
Adjusted Income from
Operations 1
|
|
$
138.6
|
|
$
140.3
|
|
(1.2) %
|
|
$
374.0
|
|
$
336.6
|
|
11.1 %
|
Adjusted Operating
Margin 1
|
|
13.1 %
|
|
14.6 %
|
|
|
|
12.6 %
|
|
12.6 %
|
|
|
Adjusted Net Income
Attributable to MSC 1
|
|
$ 97.5
|
|
$
102.2
|
|
(4.6) %
|
|
$
261.9
|
|
$
244.5
|
|
7.1 %
|
Adjusted Diluted EPS
1
|
|
$ 1.74
|
(3)
|
$ 1.82
|
(4)
|
(4.4) %
|
|
$ 4.67
|
(3)
|
$ 4.36
|
(4)
|
7.1 %
|
|
1 Represents
a non-GAAP financial measure. An explanation and a reconciliation
of each non-GAAP financial measure to the most directly comparable
GAAP financial measure are presented in the schedules accompanying
this press release.
|
2 In
millions except percentages and per share data or as otherwise
noted.
|
3 Based on
56.2 million and 56.1 million diluted shares outstanding for FY23
Q3 and FY23 YTD, respectively.
|
4 Based on
56.1 million and 56.0 million diluted shares outstanding for FY22
Q3 and FY22 YTD, respectively.
|
|
Erik Gershwind, President and
Chief Executive Officer, said, "Successful execution of our Mission
Critical growth initiatives in the third quarter resulted in
the fifth consecutive quarter of double-digit sales growth aided by
robust Public Sector performance. We delivered average daily sales
growth of nearly 12 percent and outperformed the IP index by double
digits for the second consecutive quarter. Looking ahead and
despite macro uncertainty, we expect to continue outperforming the
IP index as we leverage MSC specific momentum and strengthen our
market position through strategic investments."
Kristen Actis-Grande, Executive
Vice President and Chief Financial Officer, added, "Another quarter
of above market sales growth provides clear evidence that MSC
continues to take market share. This drove meaningful cash
generation during the quarter, despite the impact on gross margin
from a significant Public Sector contract win and overall customer
mix. As a result of our ongoing execution, we are raising fiscal
2023 sales guidance and remain confident in future profitable
growth."
Gershwind concluded, "As we approach the finish line of our
three-year Mission Critical journey, we have made significant
progress on diversifying our end markets, taking market share,
improving profitability, and enhancing corporate governance with
the recent agreement to eliminate our dual class share structure.
Combined with future benefits from our Mission Critical journey and
topline momentum, we believe that we are well positioned to deliver
value to all stakeholders in fiscal 2024 and beyond."
Mission Critical Update
We continued to make progress on each of our Mission Critical
growth initiatives during the fiscal 2023 third quarter.
Solidify Metalworking
a. Over 150 metalworking and specialty sales
experts driving customer productivity
b. Technical expertise fueled new customer wins
in high growth end markets like Aerospace and Medical
Leverage Portfolio Strength
a. Class C consumable product category net
sales grew low double digits year over year
Expand Solutions (Vending, In-Plant and Vendor Managed
Inventory)
a. Vending signings strong; vending machine net
sales grew 10% year over year and represent 15% of total Company
net sales
b. In-Plant signings strong; In-Plant net sales
grew 13% year over year and represent 13% of total Company net
sales
c. Total Solutions net sales represent 55% of
total Company net sales
Grow E-Commerce
a. E-Commerce net sales grew 8% year over year
and represent 60.1% of total Company net sales
b. Announced exclusive E-Commerce agreement
with MachiningCloud
Diversify Customers and End Markets
a. 80% net sales growth year over year driven
primarily by a significant Public Sector win
Balance Sheet, Liquidity and Capital Allocation
a. Floating/fixed rate debt ratio now at
35/65
b. Top two priorities remain investing in the
business and returning cash to shareholders through ordinary
dividends
c. Next two priorities are share buybacks
and tuck-in acquisitions
Updated Fiscal 2023
Full Year Financial Outlook
|
Adjusted Operating
Margin1
|
~12.7%
|
ADS Growth
(YoY)
|
10%-11%
|
Gross
Margins
|
100-120 bps YoY
contraction
|
Depreciation and
Amortization Expense
|
$77M-$82M
|
Interest and Other
Expense
|
$33M-$38M
|
Operating Cash Flow
Conversion2
|
>100%
|
Additional Mission
Critical Savings
|
$15M+
|
- Revised outlook assumes additional mix headwinds related to
Public Sector growth
- Expect to achieve double-digit ADS growth for the fiscal
year
- 5 fewer selling days year over year in fiscal Q4
- Mission Critical goals of >$100M in gross savings and adjusted operating
expenses of 28.6% of sales on track
(1) Guidance provided
is a non-GAAP figure presented on an adjusted basis. For further
details see the Non-GAAP financial measures information presented
in the schedules of this release.
|
(2) The Company defines
Operating Cash Flow Conversion as Net cash provided by operating
activities as a percentage of Net income. The Company's management
uses Operating Cash Flow Conversion to evaluate the Company's
operating performance, in particular how efficiently the Company
turns its sales and profits into cash, and to assess the efficiency
of the Company's use of working capital. The Company believes
Operating Cash Flow Conversion is useful to investors for the
foregoing reasons and as a measure of the rate at which the Company
converts its net income reported in accordance with GAAP to cash
inflows, which helps investors assess whether the Company is
generating sufficient cash flow to provide an adequate
return.
|
|
Conference Call Information
MSC will host a conference
call today at 8:30 a.m. EDT to review
the Company's fiscal 2023 third quarter results. The call,
accompanying slides, and other operational statistics may be
accessed at: https://investor.mscdirect.com. The conference call
may also be accessed at 1-877-443-5575 (U.S.), 1-855-669-9657
(Canada) or 1-412-902-6618
(international).
An online archive of the broadcast will be available until
July 13, 2023. The Company's
reporting date for fiscal 2023 fourth quarter and full year results
is scheduled for October 25,
2023.
About MSC Industrial Supply Co.
MSC Industrial Supply
Co. (NYSE: MSM) is a leading North American distributor of a broad
range of metalworking and maintenance, repair and operations (MRO)
products and services. We help our customers drive greater
productivity, profitability and growth with approximately 2.3
million products, inventory management and other supply chain
solutions, and deep expertise from more than 80 years of working
with customers across industries. Our experienced team of more than
7,000 associates works with our customers to help drive results for
their businesses - from keeping operations running efficiently
today to continuously rethinking, retooling and optimizing for a
more productive tomorrow. For more information on MSC Industrial,
please visit mscdirect.com.
Cautionary Note Regarding Forward-Looking Statements:
Statements in this press release may constitute "forward-looking
statements" under the Private Securities Litigation Reform Act of
1995. All statements, other than statements of present or
historical fact, that address activities, events or developments
that we expect, believe or anticipate will or may occur in the
future, including statements about results of operations and
financial condition, expected future results, expected benefits
from our investment and strategic plans and other initiatives, and
expected future growth, profitability and return on invested
capital, are forward-looking statements. The words "will," "may,"
"believes," "anticipates," "thinks," "expects," "estimates,"
"plans," "intends," and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those anticipated by these forward-looking
statements. In addition, statements which refer to expectations,
projections or other characterizations of future events or
circumstances, statements involving a discussion of strategy, plans
or intentions, statements about management's assumptions,
projections or predictions of future events or market outlook and
any other statement other than a statement of present or historical
fact are forward-looking statements. The inclusion of any statement
in this press release does not constitute an admission by MSC or
any other person that the events or circumstances described in such
statement are material. In addition, new risks may emerge from time
to time and it is not possible for management to predict such risks
or to assess the impact of such risks on our business or financial
results. Accordingly, future results may differ materially from
historical results or from those discussed or implied by these
forward-looking statements. Given these risks and uncertainties,
the reader should not place undue reliance on these forward-looking
statements. These risks and uncertainties include, but are not
limited to, the following: general economic conditions in the
markets in which we operate; changing customer and product mixes;
volatility in commodity and energy prices, the impact of prolonged
periods of low, high and rapid inflation, and fluctuations in
interest rates; competition, including the adoption by competitors
of aggressive pricing strategies and sales methods; industry
consolidation and other changes in the industrial distribution
sector; our ability to realize the expected benefits from our
investment and strategic plans, including our transition from being
a spot-buy supplier to a mission-critical partner to our customers;
our ability to realize the expected cost savings and benefits from
our restructuring activities and structural cost reductions; the
retention of key personnel; the credit risk of our customers,
higher inflation and fluctuations in interest rates; the risk of
customer cancellation or rescheduling of orders; difficulties in
calibrating customer demand for our products, which could cause an
inability to sell excess products ordered from manufacturers
resulting in inventory write-downs or could conversely cause
inventory shortages of such products; work stoppages, labor
shortages or other business interruptions (including those due to
extreme weather conditions) at transportation centers, shipping
ports, our headquarters or our customer fulfillment centers;
disruptions or breaches of our information technology systems, or
violations of data privacy laws; the retention of qualified sales
and customer service personnel and metalworking specialists; the
risk of loss of key suppliers or contractors or key brands or
supply chain disruptions, including due to import restrictions or
global geopolitical conditions; changes to governmental trade or
sanctions policies, including the impact from significant import
restrictions or tariffs or moratoriums on economic activity with
certain countries or regions; risks related to opening or expanding
our customer fulfillment centers; our ability to estimate the cost
of healthcare claims incurred under our self-insurance plan;
litigation risk due to the nature of our business; risks associated
with the integration of acquired businesses or other strategic
transactions; financial restrictions on outstanding borrowings; our
ability to maintain our credit facilities or incur additional
borrowings on terms we deem attractive; the failure to comply with
applicable environmental, health and safety laws and regulations,
and other laws applicable to our business; the outcome of
government or regulatory proceedings or future litigation; goodwill
and intangible assets recorded resulting from our acquisitions
could be impaired; our common stock price may be volatile due to
factors outside of our control; prior to the completion of the
proposed share reclassification, the significant control that our
principal shareholders currently exercise over us, which may result
in our taking actions or failing to take actions which our other
shareholders do not prefer; and any delays with respect to, or the
failure to complete, the proposed share reclassification, including
the failure to receive the requisite shareholder approvals; the
outcome of any legal proceedings that may be instituted against us
or others relating to the proposed share reclassification; our
ability to realize the expected benefits from the proposed share
reclassification; and the effect of the announcement or the
consummation of the proposed share reclassification on the market
price of our common stock. Additional information concerning these
and other risks is described under "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual and Quarterly Reports on Forms 10-K and
10-Q, respectively, and in the other reports and documents that we
file with the United States Securities and Exchange Commission. We
expressly disclaim any obligation to update any of these
forward-looking statements, except to the extent required by
applicable law.
MSC INDUSTRIAL
DIRECT CO., INC.
|
Condensed
Consolidated Balance Sheets
|
(In thousands,
except share data)
|
|
|
June 3,
2023
|
|
September 3,
2022
|
ASSETS
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
58,428
|
|
$
43,537
|
Accounts receivable, net of
allowance for credit losses
|
438,555
|
|
687,608
|
Inventories
|
726,863
|
|
715,625
|
Prepaid expenses and other
current assets
|
92,371
|
|
96,853
|
Total current assets
|
1,316,217
|
|
1,543,623
|
Property, plant and
equipment, net
|
307,123
|
|
286,666
|
Goodwill
|
718,304
|
|
710,130
|
Identifiable
intangibles, net
|
114,262
|
|
114,328
|
Operating lease
assets
|
60,091
|
|
64,780
|
Other assets
|
10,682
|
|
9,887
|
Total assets
|
$
2,526,679
|
|
$
2,729,414
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Current portion of
debt including obligations under finance leases
|
$
290,281
|
|
$
325,680
|
Current portion of
operating lease liabilities
|
18,573
|
|
18,560
|
Accounts
payable
|
209,859
|
|
217,378
|
Accrued expenses and
other current liabilities
|
164,762
|
|
164,326
|
Total current
liabilities
|
683,475
|
|
725,944
|
Long-term debt
including obligations under finance leases
|
174,017
|
|
468,912
|
Noncurrent operating
lease liabilities
|
42,898
|
|
47,616
|
Deferred income taxes
and tax uncertainties
|
123,743
|
|
124,659
|
Total
liabilities
|
$
1,024,133
|
|
$
1,367,131
|
Commitments and
Contingencies
|
|
|
|
Shareholders'
Equity:
|
|
|
|
Preferred Stock
|
—
|
|
—
|
Class A Common
Stock
|
49
|
|
48
|
Class B Common
Stock
|
9
|
|
9
|
Additional paid-in
capital
|
839,106
|
|
798,408
|
Retained earnings
|
776,365
|
|
681,292
|
Accumulated other
comprehensive loss
|
(18,233)
|
|
(23,121)
|
Class A treasury stock, at
cost
|
(108,036)
|
|
(106,202)
|
Total MSC shareholders' equity
|
1,489,260
|
|
1,350,434
|
Noncontrolling
interest
|
13,286
|
|
11,849
|
Total shareholders' equity
|
1,502,546
|
|
1,362,283
|
Total liabilities and shareholders' equity
|
$
2,526,679
|
|
$
2,729,414
|
MSC INDUSTRIAL
DIRECT CO., INC.
|
Condensed
Consolidated Statements of Income
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
June 3,
2023
|
|
May 28,
2022
|
|
June 3,
2023
|
|
May 28,
2022
|
Net sales
|
$ 1,054,464
|
|
$
958,579
|
|
$ 2,973,841
|
|
$ 2,669,648
|
Cost of goods
sold
|
625,527
|
|
547,430
|
|
1,750,410
|
|
1,539,628
|
Gross
profit
|
428,937
|
|
411,149
|
|
1,223,431
|
|
1,130,020
|
Operating
expenses
|
291,706
|
|
271,046
|
|
852,031
|
|
793,600
|
Restructuring and other
costs
|
1,845
|
|
3,267
|
|
5,722
|
|
11,684
|
Income from
operations
|
135,386
|
|
136,836
|
|
365,678
|
|
324,736
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(5,038)
|
|
(4,277)
|
|
(17,913)
|
|
(11,622)
|
Interest
income
|
513
|
|
17
|
|
764
|
|
57
|
Other (expense)
income, net
|
(4,456)
|
|
558
|
|
(8,095)
|
|
236
|
Total other
expense
|
(8,981)
|
|
(3,702)
|
|
(25,244)
|
|
(11,329)
|
Income before provision for
income taxes
|
126,405
|
|
133,134
|
|
340,434
|
|
313,407
|
Provision for income
taxes
|
31,266
|
|
33,417
|
|
84,768
|
|
77,279
|
Net income
|
95,139
|
|
99,717
|
|
255,666
|
|
236,128
|
Less: Net (loss) income
attributable to noncontrolling interest
|
(41)
|
|
60
|
|
32
|
|
473
|
Net
income attributable to MSC Industrial
|
$
95,180
|
|
$
99,657
|
|
$
255,634
|
|
$
235,655
|
Per share data
attributable to MSC Industrial:
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.70
|
|
$
1.78
|
|
$
4.57
|
|
$
4.23
|
Diluted
|
$
1.69
|
|
$
1.78
|
|
$
4.56
|
|
$
4.21
|
Weighted average shares
used in computing
net income
per common share:
|
|
|
|
|
|
|
|
Basic
|
55,963
|
|
55,914
|
|
55,911
|
|
55,748
|
Diluted
|
56,156
|
|
56,106
|
|
56,121
|
|
56,019
|
MSC INDUSTRIAL
DIRECT CO., INC.
|
Condensed
Consolidated Statements of Comprehensive Income
|
(In
thousands)
|
(Unaudited)
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
June 3,
2023
|
|
May 28,
2022
|
|
June 3,
2023
|
|
May 28,
2022
|
Net income, as
reported
|
$
95,139
|
|
$
99,717
|
|
$
255,666
|
|
$
236,128
|
Other comprehensive
income, net of tax:
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments
|
2,474
|
|
542
|
|
6,293
|
|
(682)
|
Comprehensive
income
|
97,613
|
|
100,259
|
|
261,959
|
|
235,446
|
Comprehensive income
attributable to noncontrolling interest:
|
|
|
|
|
|
|
|
Net loss (income)
|
41
|
|
(60)
|
|
(32)
|
|
(473)
|
Foreign currency translation
adjustments
|
(270)
|
|
(453)
|
|
(1,405)
|
|
(366)
|
Comprehensive income
attributable to MSC Industrial
|
$
97,384
|
|
$
99,746
|
|
$
260,522
|
|
$
234,607
|
MSC INDUSTRIAL
DIRECT CO., INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
Thirty-Nine Weeks
Ended
|
|
June 3,
2023
|
|
May 28,
2022
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$
255,666
|
|
$
236,128
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
56,122
|
|
52,426
|
Non-cash operating
lease cost
|
14,831
|
|
12,583
|
Stock-based
compensation
|
14,624
|
|
14,559
|
Loss on disposal of
property, plant and equipment
|
481
|
|
489
|
Provision for credit
losses
|
6,826
|
|
6,255
|
Deferred income
taxes
|
(915)
|
|
(341)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
247,557
|
|
(113,664)
|
Inventories
|
(6,255)
|
|
(55,866)
|
Prepaid expenses and
other current assets
|
5,831
|
|
(2,859)
|
Operating lease
liabilities
|
(14,845)
|
|
(12,674)
|
Other
assets
|
(487)
|
|
(1,405)
|
Accounts payable and
accrued liabilities
|
(12,359)
|
|
(329)
|
Total
adjustments
|
311,411
|
|
(100,826)
|
Net cash provided by
operating activities
|
567,077
|
|
135,302
|
Cash Flows from
Investing Activities:
|
|
|
|
Expenditures for
property, plant and equipment
|
(64,113)
|
|
(44,943)
|
Cash used in business
acquisitions, net of cash acquired
|
(20,182)
|
|
—
|
Net cash used in
investing activities
|
(84,295)
|
|
(44,943)
|
Cash Flows from
Financing Activities:
|
|
|
|
Repurchases of Class A
Common Stock
|
(31,072)
|
|
(4,944)
|
Payments of regular
cash dividends
|
(132,484)
|
|
(125,532)
|
Proceeds from sale of
Class A Common Stock in connection with associate stock purchase
plan
|
3,449
|
|
3,364
|
Proceeds from exercise
of Class A Common Stock options
|
22,635
|
|
21,540
|
Borrowings under
credit facilities
|
208,000
|
|
244,000
|
Payments under credit
facilities
|
(488,000)
|
|
(239,500)
|
Borrowings under
financing obligations
|
1,061
|
|
1,058
|
Payments under Shelf
Facility Agreements and Private Placement Debt
|
(50,000)
|
|
—
|
Other, net
|
(1,676)
|
|
(1,984)
|
Net cash used in
financing activities
|
(468,087)
|
|
(101,998)
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
196
|
|
(50)
|
Net increase (decrease)
in cash and cash equivalents
|
14,891
|
|
(11,689)
|
Cash and cash
equivalents—beginning of period
|
43,537
|
|
40,536
|
Cash and cash
equivalents—end of period
|
$
58,428
|
|
$
28,847
|
|
|
|
|
Supplemental Disclosure
of Cash Flow Information:
|
|
|
|
Cash paid for income
taxes
|
$
85,525
|
|
$
90,696
|
Cash paid for
interest
|
$
16,970
|
|
$
10,009
|
|
Non-GAAP Financial Measures
To supplement MSC's unaudited selected financial data presented
consistent with accounting principles generally accepted in
the United States ("GAAP"), the
Company discloses certain non-GAAP financial measures, including
non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income
from operations, non-GAAP operating margin, non-GAAP provision for
income taxes, non-GAAP net income and non-GAAP diluted earnings per
share, that exclude acquisition-related costs, share
reclassification proposal costs, restructuring and other costs and
tax effects.
These non-GAAP financial measures are not presented in
accordance with GAAP or an alternative for GAAP financial measures
and may be different from similar non-GAAP financial measures used
by other companies. The presentation of this additional information
is not meant to be considered in isolation or as a substitute for
the most directly comparable GAAP financial measures and should
only be used to evaluate MSC's results of operations in conjunction
with the corresponding GAAP financial measures.
This press release also includes certain forward-looking
information that is not presented in accordance with GAAP. The
Company believes that a quantitative reconciliation of such
forward-looking information to the most directly comparable
financial measure calculated and presented in accordance with GAAP
cannot be made available without unreasonable efforts because a
reconciliation of these non-GAAP financial measures would require
the Company to predict the timing and likelihood of potential
future events such as restructurings, M&A activity and other
infrequent or unusual gains and losses. Neither the timing or
likelihood of these events, nor their probable significance, can be
quantified with a reasonable degree of accuracy. Accordingly, a
reconciliation of such forward-looking information to the most
directly comparable GAAP financial measure is not provided.
- Results Excluding Acquisition-Related Costs, Share
Reclassification Proposal Costs and Restructuring and Other
Costs
In calculating non-GAAP financial measures, we exclude
acquisition-related costs, share reclassification proposal costs
and restructuring and other costs, and tax effects. Management
makes these adjustments to facilitate a review of the Company's
operating performance on a comparable basis between periods, for
comparison with forecasts and strategic plans, for identifying and
analyzing trends in the Company's underlying business and for
benchmarking performance externally against competitors. We believe
that investors benefit from seeing results from the perspective of
management in addition to seeing results presented in accordance
with GAAP for the same reasons and purposes for which management
uses such non-GAAP financial measures.
MSC INDUSTRIAL DIRECT
CO., INC.
|
Reconciliation of GAAP
and Non-GAAP Financial Information
|
Thirteen Weeks Ended
June 3, 2023
|
(In thousands, except
percentages and per share data)
|
|
|
|
|
|
|
|
|
|
GAAP
Financial
Measure
|
|
Items Affecting
Comparability
|
Non-GAAP
Financial
Measure
|
|
Total MSC
Industrial
|
|
Restructuring
and Other Costs
|
|
Share
Reclassification
Proposal Costs
|
|
Adjusted Total
MSC
Industrial
|
Net Sales
|
$
1,054,464
|
|
$
—
|
|
$
—
|
|
$
1,054,464
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold
|
625,527
|
|
—
|
|
—
|
|
625,527
|
|
|
|
|
|
|
|
|
Gross Profit
|
428,937
|
|
—
|
|
—
|
|
428,937
|
Gross Margin
|
40.7 %
|
|
— %
|
|
— %
|
|
40.7 %
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
291,706
|
|
—
|
|
1,373
|
|
290,333
|
Operating Exp as % of
Sales
|
27.7 %
|
|
— %
|
|
(0.1) %
|
|
27.5 %
|
|
|
|
|
|
|
|
|
Restructuring and Other
Costs
|
1,845
|
|
1,845
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
Income from
Operations
|
135,386
|
|
(1,845)
|
|
(1,373)
|
|
138,604
|
Operating
Margin
|
12.8 %
|
|
0.2 %
|
|
0.1 %
|
|
13.1 %
|
|
|
|
|
|
|
|
|
Total Other
Expense
|
(8,981)
|
|
—
|
|
—
|
|
(8,981)
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
126,405
|
|
(1,845)
|
|
(1,373)
|
|
129,623
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
31,266
|
|
(505)
|
|
(376)
|
|
32,147
|
Net income
|
95,139
|
|
(1,340)
|
|
(997)
|
|
97,476
|
Net loss attributable
to noncontrolling interest
|
(41)
|
|
—
|
|
—
|
|
(41)
|
Net income attributable
to MSC Industrial
|
$
95,180
|
|
$
(1,340)
|
|
$
(997)
|
|
$
97,517
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Diluted
|
$
1.69
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
1.74
|
|
*Individual amounts may
not agree to the total due to rounding.
|
MSC INDUSTRIAL DIRECT
CO., INC.
|
Reconciliation of GAAP
and Non-GAAP Financial Information
|
Thirty-Nine Weeks Ended
June 3, 2023
|
(In thousands, except
percentages and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Financial
Measure
|
|
Items Affecting
Comparability
|
|
Non-GAAP
Financial
Measure
|
|
Total MSC
Industrial
|
|
Restructuring
and Other Costs
|
|
Acquisition-
related Costs
|
|
Share
Reclassification
Proposal Costs
|
|
Adjusted Total
MSC
Industrial
|
Net Sales
|
$
2,973,841
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
2,973,841
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold
|
1,750,410
|
|
—
|
|
—
|
|
—
|
|
1,750,410
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
1,223,431
|
|
—
|
|
—
|
|
—
|
|
1,223,431
|
Gross Margin
|
41.1 %
|
|
— %
|
|
— %
|
|
— %
|
|
41.1 %
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
852,031
|
|
—
|
|
398
|
|
2,249
|
|
849,384
|
Operating Exp as % of
Sales
|
28.7 %
|
|
— %
|
|
— %
|
|
(0.1) %
|
|
28.6 %
|
|
|
|
|
|
|
|
|
|
|
Restructuring and Other
Costs
|
5,722
|
|
5,722
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
365,678
|
|
(5,722)
|
|
(398)
|
|
(2,249)
|
|
374,047
|
Operating
Margin
|
12.3 %
|
|
0.2 %
|
|
— %
|
|
0.1 %
|
|
12.6 %
|
|
|
|
|
|
|
|
|
|
|
Total Other
Expense
|
(25,244)
|
|
—
|
|
—
|
|
—
|
|
(25,244)
|
|
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
340,434
|
|
(5,722)
|
|
(398)
|
|
(2,249)
|
|
348,803
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
84,768
|
|
(1,424)
|
|
(100)
|
|
(560)
|
|
86,852
|
Net income
|
255,666
|
|
(4,298)
|
|
(298)
|
|
(1,689)
|
|
261,951
|
Net income attributable
to noncontrolling interest
|
32
|
|
—
|
|
—
|
|
—
|
|
32
|
Net income attributable
to MSC Industrial
|
$ 255,634
|
|
$
(4,298)
|
|
$
(298)
|
|
$
(1,689)
|
|
$ 261,919
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
4.56
|
|
$
(0.08)
|
|
$
(0.01)
|
|
$
(0.03)
|
|
$
4.67
|
|
*Individual amounts may
not agree to the total due to rounding.
|
MSC INDUSTRIAL DIRECT
CO., INC.
|
Reconciliation of GAAP
and Non-GAAP Financial Information
|
Thirteen Weeks Ended
May 28, 2022
|
(In thousands, except
percentages and per share data)
|
|
|
|
|
|
|
|
|
|
GAAP Financial
Measure
|
|
Items Affecting
Comparability
|
|
Non-GAAP
Financial Measure
|
|
Total MSC
Industrial
|
|
Restructuring
and Other
Costs
|
|
Acquisition-
related Costs
|
|
Adjusted
Total MSC
Industrial
|
Net Sales
|
$
958,579
|
|
$
—
|
|
$
—
|
|
$
958,579
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold
|
547,430
|
|
—
|
|
—
|
|
547,430
|
|
|
|
|
|
|
|
|
Gross Profit
|
411,149
|
|
—
|
|
—
|
|
411,149
|
Gross Margin
|
42.9 %
|
|
— %
|
|
— %
|
|
42.9 %
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
271,046
|
|
—
|
|
211
|
|
270,835
|
Operating Exp as % of
Sales
|
28.3 %
|
|
— %
|
|
— %
|
|
28.3 %
|
|
|
|
|
|
|
|
|
Restructuring and Other
Costs
|
3,267
|
|
3,267
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
Income from
Operations
|
136,836
|
|
(3,267)
|
|
(211)
|
|
140,314
|
Operating
Margin
|
14.3 %
|
|
-0.3 %
|
|
0.0 %
|
|
14.6 %
|
|
|
|
|
|
|
|
|
Total Other
Expense
|
(3,702)
|
|
—
|
|
—
|
|
(3,702)
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
133,134
|
|
(3,267)
|
|
(211)
|
|
136,612
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
33,417
|
|
(884)
|
|
(57)
|
|
34,358
|
Net income
|
99,717
|
|
(2,383)
|
|
(154)
|
|
102,254
|
Net income attributable to
noncontrolling interest
|
60
|
|
—
|
|
—
|
|
60
|
Net income attributable to
MSC Industrial
|
$
99,657
|
|
$
(2,383)
|
|
$
(154)
|
|
$
102,194
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Diluted
|
$
1.78
|
|
$
(0.04)
|
|
$
0.00
|
|
$
1.82
|
|
*Individual amounts may
not agree to the total due to rounding.
|
MSC INDUSTRIAL DIRECT
CO., INC.
|
Reconciliation of GAAP
and Non-GAAP Financial Information
|
Thirty-Nine Weeks Ended
May 28, 2022
|
(In thousands, except
percentages and per share data)
|
|
|
|
|
|
|
|
|
|
GAAP Financial
Measure
|
|
Items Affecting
Comparability
|
|
Non-GAAP
Financial Measure
|
|
Total MSC
Industrial
|
|
Restructuring
and Other
Costs
|
|
Acquisition-
related Costs
|
|
Adjusted Total MSC
Industrial
|
Net Sales
|
$
2,669,648
|
|
$
—
|
|
$
—
|
|
$
2,669,648
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold
|
1,539,628
|
|
—
|
|
—
|
|
1,539,628
|
|
|
|
|
|
|
|
|
Gross Profit
|
1,130,020
|
|
—
|
|
—
|
|
1,130,020
|
Gross Margin
|
42.3 %
|
|
— %
|
|
— %
|
|
42.3 %
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
793,600
|
|
—
|
|
211
|
|
793,389
|
Operating Exp as % of
Sales
|
29.7 %
|
|
— %
|
|
— %
|
|
29.7 %
|
|
|
|
|
|
|
|
|
Restructuring and Other
Costs
|
11,684
|
|
11,684
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
Income from
Operations
|
324,736
|
|
(11,684)
|
|
(211)
|
|
336,631
|
Operating
Margin
|
12.2 %
|
|
-0.4 %
|
|
0.0 %
|
|
12.6 %
|
|
|
|
|
|
|
|
|
Total Other
Expense
|
(11,329)
|
|
—
|
|
—
|
|
(11,329)
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
313,407
|
|
(11,684)
|
|
(211)
|
|
325,302
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
77,279
|
|
(3,014)
|
|
(57)
|
|
80,350
|
Net income
|
236,128
|
|
(8,670)
|
|
(154)
|
|
244,952
|
Net income attributable to
noncontrolling interest
|
473
|
|
—
|
|
—
|
|
473
|
Net income attributable to
MSC Industrial
|
$
235,655
|
|
$
(8,670)
|
|
$
(154)
|
|
$
244,479
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Diluted
|
$
4.21
|
|
$
(0.15)
|
|
$
—
|
|
$
4.36
|
|
*Individual amounts may
not agree to the total due to rounding.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/msc-industrial-supply-co-reports-fiscal-2023-third-quarter-results-301866637.html
SOURCE MSC Industrial Supply Co.