MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2024 THIRD QUARTER RESULTS
MSC Industrial Supply Co. reported fiscal 2024 third quarter results, highlighting a 7.1% YoY decline in net sales to $979.4 million. The decline included a 300 basis point headwind from non-repeating Public Sector orders in the previous year. Operating income fell to $106.8 million, with an adjusted figure of $111.5 million. Operating margin was reported at 10.9%, or 11.4% adjusted. Diluted EPS decreased to $1.27, while adjusted EPS was $1.33, both showing significant YoY drops. CEO Erik Gershwind noted unexpected gross margin pressure and sluggish recovery in average daily sales as factors contributing to the below-expectations performance. The full-year outlook has been revised, anticipating a 4.3%-4.7% decline in ADS growth and an adjusted operating margin of 10.5%-10.7%.
- Continued strong cash flow generation.
- Net sales decreased 7.1% YoY to $979.4 million.
- Operating income fell 21.1% YoY to $106.8 million.
- Net income attributable to MSC dropped 24.7% YoY to $71.7 million.
- Diluted EPS declined 24.9% YoY to $1.27.
- Adjusted diluted EPS fell 23.6% YoY to $1.33.
- Average daily sales decreased 7.1% in fiscal Q3.
- Revised full-year outlook predicts a 4.3%-4.7% decline in ADS growth.
Insights
From a financial perspective, MSC Industrial Supply Co.'s Q3 results show a decline in net sales by
For retail investors, the key takeaway here is the decline in both revenue and profitability metrics. The short-term outlook is challenging, as indicated by the revised guidance, which now projects a decrease in average daily sales (ADS) and a lower adjusted operating margin. However, the company's strong cash flow generation could be seen as a mitigating factor, highlighting its ability to generate cash even in tougher times.
Looking at the long-term, MSC has already taken corrective actions focusing on improving gross margin and enhancing web capabilities. If these initiatives prove effective, they could support a recovery. The investor should also note MSC's strategic pillars aimed at reenergizing core customers and optimizing costs, which are important for long-term growth. The diluted EPS reduction to
The industrial supply sector has faced broad-based challenges and MSC's performance mirrors some of these industry-wide issues. The public sector order reduction is noteworthy as it was a one-time event; this won't impact future comparisons, potentially setting up for easier YoY comparisons in subsequent quarters. Additionally, the decline in the manufacturing verticals where MSC is heavily exposed is a reflection of broader economic trends, including potential slowdowns in industrial activity.
Investors should consider the competitive landscape and how MSC is positioning itself. The company's initiatives to enhance web capabilities are a response to increasing digitalization in the supply chain. If successful, this could attract a broader customer base and improve efficiency. However, the impact of these initiatives on the revenue and margins will need to be closely monitored. The focus on optimizing cost to serve could also help MSC navigate through this challenging period more effectively.
While the near-term outlook has been adjusted downward, the efforts to reenergize the core customer base and improve operational efficiencies are positive steps. These actions could provide upside potential if executed well, but caution is warranted given the macroeconomic uncertainties.
FISCAL 2024 Q3 HIGHLIGHTS
- Net sales of
$979.4 million 7.1% YoY and includes a roughly 300 basis point headwind from non-repeating Public Sector orders in the prior year - Operating income of
$106.8 million $111.5 million - Operating margin of
10.9% , or11.4% excluding the adjustments described above1 - Diluted EPS of
$1.27 $1.69 - Adjusted diluted EPS of
$1.33 $1.74
Financial Highlights 2 | FY24 Q3 | FY23 Q3 | Change | FY24 YTD | FY23 YTD | Change | ||||||
Net Sales | $ 979.4 | (7.1) % | (3.5) % | |||||||||
Income from Operations | $ 106.8 | $ 135.4 | (21.1) % | $ 299.5 | $ 365.7 | (18.1) % | ||||||
Operating Margin | 10.9 % | 12.8 % | 10.4 % | 12.3 % | ||||||||
Net Income Attributable to MSC | $ 71.7 | $ 95.2 | (24.7) % | $ 202.9 | $ 255.6 | (20.6) % | ||||||
Diluted EPS | $ 1.27 | 3 | $ 1.69 | 4 | (24.9) % | $ 3.59 | 3 | $ 4.56 | 4 | (21.3) % | ||
Adjusted Financial Highlights 2 | FY24 Q3 | FY23 Q3 | Change | FY24 YTD | FY23 YTD | Change | ||||||
Net Sales | $ 979.4 | (7.1) % | (3.5) % | |||||||||
Adjusted Income from Operations 1 | $ 111.5 | $ 138.6 | (19.6) % | $ 313.0 | $ 374.0 | (16.3) % | ||||||
Adjusted Operating Margin 1 | 11.4 % | 13.1 % | 10.9 % | 12.6 % | ||||||||
Adjusted Net Income Attributable to MSC 1 | $ 75.2 | $ 97.5 | (22.9) % | $ 213.2 | $ 261.9 | (18.6) % | ||||||
Adjusted Diluted EPS 1 | $ 1.33 | 3 | $ 1.74 | 4 | (23.6) % | $ 3.77 | 3 | $ 4.67 | 4 | (19.3) % |
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 56.4 million and 56.5 million weighted-average diluted shares outstanding for FY24 Q3 and FY24 YTD, respectively. |
4 Based on 56.2 million and 56.1 million weighted-average diluted shares outstanding for FY23 Q3 and FY23 YTD, respectively. |
Erik Gershwind, President and Chief Executive Officer, said, "As announced on June 13th, we began the second half of our fiscal year with unexpected gross margin pressure and a slower than expected recovery in average daily sales, particularly within our Core customer base. As a result, our third quarter performance was below expectations and led to a revised full year outlook. We responded with swift corrective actions to improve gross margin trending and accelerate progress on the rollout of our web enhancements."
Kristen Actis-Grande, Executive Vice President and Chief Financial Officer, added, "Average daily sales declined
Gershwind concluded, "Looking forward, as our corrective actions take hold, we will remain steadfast in our approach to unlocking the value creation potential of MSC. We are doing this by leaning into the core pillars of our Mission Critical initiatives — Maintaining Momentum, Reenergizing the Core Customer, and Optimizing Cost to Serve. While results to date in fiscal 2024 are not up to our standards, we are confident we have the talent and strategy in place to achieve our long-term goals and create meaningful value for all stakeholders."
Fiscal 2024 Full Year Financial Outlook | ||
Current | Prior | |
ADS Growth (YoY) | (4.7)% - (4.3)% | |
Adjusted Operating Margin1 | ||
Depreciation and Amortization Expense | ||
Interest and Other Expense | ||
Operating Cash Flow Conversion2 | > | > |
Tax Rate | ||
(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 accompanying this press 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 2024 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 (
An online archive of the broadcast will be available until July 16, 2024. The Company's reporting date for its fiscal 2024 fourth quarter and full year results is scheduled for October 24, 2024.
Contact Information | |
Investors: | Media: |
Ryan Mills, CFA | Zivanai Mutize |
Head of Investor Relations | Head of Corporate Communications |
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 2.4 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 or rapid inflation, and fluctuations in interest rates; competition, including the adoption by competitors of aggressive pricing strategies or 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; our ability to realize the expected cost savings and benefits from our restructuring activities and structural cost reductions; the retention of key management personnel; the credit risk of our customers; 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 disruptions, 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; our ability to attract, train and retain qualified sales and customer service personnel and metalworking and specialty sales specialists; the risk of loss of key suppliers or contractors or key brands or supply chain disruptions; 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 and regulations applicable to our business; the outcome of government or regulatory proceedings; goodwill and other indefinite-lived intangible assets recorded as a result of our acquisitions could become impaired; our common stock price may be volatile due to factors outside of our control; the significant influence that our principal shareholders will continue to have over our decisions; and our ability to realize the desired benefits from the share reclassification. 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) | |||
June 1, | September 2, | ||
ASSETS | (Unaudited) | ||
Current Assets: | |||
Cash and cash equivalents | $ 25,928 | $ 50,052 | |
Accounts receivable, net of allowance for credit losses | 419,810 | 435,421 | |
Inventories | 665,638 | 726,521 | |
Prepaid expenses and other current assets | 101,472 | 105,519 | |
Total current assets | 1,212,848 | 1,317,513 | |
Property, plant and equipment, net | 344,787 | 319,660 | |
Goodwill | 721,932 | 718,174 | |
Identifiable intangibles, net | 102,854 | 110,641 | |
Operating lease assets | 60,878 | 65,909 | |
Other assets | 24,495 | 12,237 | |
Total assets | $ 2,467,794 | $ 2,544,134 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current Liabilities: | |||
Current portion of debt including obligations under finance leases | $ 206,335 | $ 229,935 | |
Current portion of operating lease liabilities | 22,235 | 21,168 | |
Accounts payable | 205,644 | 226,299 | |
Accrued expenses and other current liabilities | 149,298 | 172,034 | |
Total current liabilities | 583,512 | 649,436 | |
Long-term debt including obligations under finance leases | 299,812 | 224,391 | |
Noncurrent operating lease liabilities | 39,532 | 45,924 | |
Deferred income taxes and tax uncertainties | 130,729 | 131,801 | |
Total liabilities | 1,053,585 | 1,051,552 | |
Commitments and Contingencies | |||
Shareholders' Equity: | |||
Preferred Stock | — | — | |
Class A Common Stock | 57 | 48 | |
Class B Common Stock | — | 9 | |
Additional paid-in capital | 1,063,738 | 849,502 | |
Retained earnings | 470,085 | 755,007 | |
Accumulated other comprehensive loss | (17,553) | (17,725) | |
Class A treasury stock, at cost | (114,711) | (107,677) | |
Total MSC Industrial shareholders' equity | 1,401,616 | 1,479,164 | |
Noncontrolling interest | 12,593 | 13,418 | |
Total shareholders' equity | 1,414,209 | 1,492,582 | |
Total liabilities and shareholders' equity | $ 2,467,794 | $ 2,544,134 | |
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 1, | June 3, | June 1, | June 3, | ||||
Net sales | $ 979,350 | $ 1,054,464 | $ 2,868,667 | $ 2,973,841 | |||
Cost of goods sold | 578,903 | 625,527 | 1,686,492 | 1,750,410 | |||
Gross profit | 400,447 | 428,937 | 1,182,175 | 1,223,431 | |||
Operating expenses | 288,991 | 291,706 | 870,859 | 852,031 | |||
Restructuring and other costs | 4,690 | 1,845 | 11,787 | 5,722 | |||
Income from operations | 106,766 | 135,386 | 299,529 | 365,678 | |||
Other income (expense): | |||||||
Interest expense | (6,884) | (5,038) | (19,155) | (17,913) | |||
Interest income | 134 | 513 | 302 | 764 | |||
Other expense, net | (4,680) | (4,456) | (14,067) | (8,095) | |||
Total other expense | (11,430) | (8,981) | (32,920) | (25,244) | |||
Income before provision for income taxes | 95,336 | 126,405 | 266,609 | 340,434 | |||
Provision for income taxes | 24,024 | 31,266 | 64,604 | 84,768 | |||
Net income | 71,312 | 95,139 | 202,005 | 255,666 | |||
Less: Net (loss) income attributable to noncontrolling interest | (393) | (41) | (897) | 32 | |||
Net income attributable to MSC Industrial | $ 71,705 | $ 95,180 | $ 202,902 | $ 255,634 | |||
Per share data attributable to MSC Industrial: | |||||||
Net income per common share: | |||||||
Basic | $ 1.28 | $ 1.70 | $ 3.60 | $ 4.57 | |||
Diluted | $ 1.27 | $ 1.69 | $ 3.59 | $ 4.56 | |||
Weighted-average shares used in computing net income per common share: | |||||||
Basic | 56,214 | 55,963 | 56,323 | 55,911 | |||
Diluted | 56,351 | 56,156 | 56,514 | 56,121 | |||
MSC INDUSTRIAL DIRECT CO., INC. Condensed Consolidated Statements of Comprehensive Income (In thousands) (Unaudited) | |||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||
June 1, | June 3, | June 1, | June 3, | ||||
Net income, as reported | $ 71,312 | $ 95,139 | $ 202,005 | $ 255,666 | |||
Other comprehensive income, net of tax: | |||||||
Foreign currency translation adjustments | (217) | 2,474 | 244 | 6,293 | |||
Comprehensive income | 71,095 | 97,613 | 202,249 | 261,959 | |||
Comprehensive income attributable to noncontrolling interest: | |||||||
Net loss (income) | 393 | 41 | 897 | (32) | |||
Foreign currency translation adjustments | 4 | (270) | (72) | (1,405) | |||
Comprehensive income attributable to MSC Industrial | $ 71,492 | $ 97,384 | $ 203,074 | $ 260,522 | |||
MSC INDUSTRIAL DIRECT CO., INC. Condensed Consolidated Statements of Cash Flows (In thousands)(Unaudited) | |||
Thirty-Nine Weeks Ended | |||
June 1, | June 3, | ||
Cash Flows from Operating Activities: | |||
Net income | $ 202,005 | $ 255,666 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 60,288 | 56,122 | |
Amortization of cloud computing arrangements | 1,437 | 784 | |
Non-cash operating lease cost | 16,679 | 14,831 | |
Stock-based compensation | 13,347 | 14,624 | |
Loss on disposal of property, plant and equipment | 363 | 481 | |
Non-cash changes in fair value of estimated contingent consideration | 661 | — | |
Provision for credit losses | 5,180 | 6,826 | |
Expenditures for cloud computing arrangements | (17,161) | (1,146) | |
Deferred income taxes and tax uncertainties | (1,072) | (915) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 12,586 | 247,557 | |
Inventories | 64,251 | (6,255) | |
Prepaid expenses and other current assets | 4,488 | 5,917 | |
Operating lease liabilities | (16,974) | (14,845) | |
Other assets | 3,272 | (211) | |
Accounts payable and accrued liabilities | (45,917) | (12,359) | |
Total adjustments | 101,428 | 311,411 | |
Net cash provided by operating activities | 303,433 | 567,077 | |
Cash Flows from Investing Activities: | |||
Expenditures for property, plant and equipment | (73,354) | (64,113) | |
Cash used in acquisitions, net of cash acquired | (9,859) | (20,182) | |
Net cash used in investing activities | (83,213) | (84,295) | |
Cash Flows from Financing Activities: | |||
Repurchases of Class A Common Stock | (167,166) | (31,072) | |
Payments of regular cash dividends | (140,695) | (132,484) | |
Proceeds from sale of Class A Common Stock in connection with Associate Stock Purchase Plan | 3,465 | 3,449 | |
Proceeds from exercise of Class A Common Stock options | 8,833 | 22,635 | |
Borrowings under credit facilities | 359,000 | 208,000 | |
Payments under credit facilities | (309,000) | (488,000) | |
Borrowings under financing obligations | 3,850 | 1,061 | |
Payments under Shelf Facility Agreements and Private Placement Debt | (50,000) | (50,000) | |
Proceeds from other long-term debt | 50,000 | — | |
Other, net | (2,762) | (1,676) | |
Net cash used in financing activities | (244,475) | (468,087) | |
Effect of foreign exchange rate changes on cash and cash equivalents | 131 | 196 | |
Net (decrease) increase in cash and cash equivalents | (24,124) | 14,891 | |
Cash and cash equivalents—beginning of period | 50,052 | 43,537 | |
Cash and cash equivalents—end of period | $ 25,928 | $ 58,428 | |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for income taxes | $ 66,071 | $ 85,525 | |
Cash paid for interest | $ 18,235 | $ 16,970 | |
Non-GAAP Financial Measures
To supplement MSC's unaudited selected financial data presented consistent with accounting principles generally accepted in
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 measure and should only be used to evaluate MSC's results of operations in conjunction with the corresponding GAAP financial measure.
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 Restructuring and Other Costs, Acquisition-Related Costs and Share Reclassification Costs
In calculating non-GAAP financial measures, we exclude restructuring and other costs, acquisition-related costs and share reclassification 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 comparing 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 1, 2024 | |||||
(In thousands, except percentages and per share data) | |||||
GAAP Financial | Items Affecting | Non-GAAP | |||
Total MSC | Restructuring and | Adjusted Total | |||
Net Sales | $ 979,350 | $ — | $ 979,350 | ||
Cost of Goods Sold | 578,903 | — | 578,903 | ||
Gross Profit | 400,447 | — | 400,447 | ||
Gross Margin | 40.9 % | — % | 40.9 % | ||
Operating Expenses | 288,991 | — | 288,991 | ||
Operating Exp as % of Sales | 29.5 % | — % | 29.5 % | ||
Restructuring and Other Costs | 4,690 | 4,690 | — | ||
Income from Operations | 106,766 | (4,690) | 111,456 | ||
Operating Margin | 10.9 % | 0.5 % | 11.4 % | ||
Total Other Expense | (11,430) | — | (11,430) | ||
Income before provision for income taxes | 95,336 | (4,690) | 100,026 | ||
Provision for income taxes | 24,024 | (1,183) | 25,207 | ||
Net income | 71,312 | (3,507) | 74,819 | ||
Net loss attributable to noncontrolling interest | (393) | — | (393) | ||
Net income attributable to MSC Industrial | $ 71,705 | $ (3,507) | $ 75,212 | ||
Net income per common share: | |||||
Diluted | $ 1.27 | $ (0.06) | $ 1.33 | ||
*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 1, 2024 | |||||||||
(In thousands, except percentages and per share data) | |||||||||
GAAP | Items Affecting Comparability | Non-GAAP | |||||||
Total MSC | Restructuring | Acquisition- | Share | Adjusted Total | |||||
Net Sales | $ 2,868,667 | $ — | $ — | $ — | $ 2,868,667 | ||||
Cost of Goods Sold | 1,686,492 | — | — | — | 1,686,492 | ||||
Gross Profit | 1,182,175 | — | — | — | 1,182,175 | ||||
Gross Margin | 41.2 % | — % | — % | — % | 41.2 % | ||||
Operating Expenses | 870,859 | — | 465 | 1,187 | 869,207 | ||||
Operating Exp as % of Sales | 30.4 % | — % | 0.0 % | 0.0 % | 30.3 % | ||||
Restructuring and Other Costs | 11,787 | 11,787 | — | — | — | ||||
Income from Operations | 299,529 | (11,787) | (465) | (1,187) | 312,968 | ||||
Operating Margin | 10.4 % | 0.4 % | 0.0 % | 0.0 % | 10.9 % | ||||
Total Other Expense | (32,920) | — | — | — | (32,920) | ||||
Income before provision for income taxes | 266,609 | (11,787) | (465) | (1,187) | 280,048 | ||||
Provision for income taxes | 64,604 | (2,767) | (113) | (288) | 67,772 | ||||
Net income | 202,005 | (9,020) | (352) | (899) | 212,276 | ||||
Net loss attributable to noncontrolling interest | (897) | — | — | — | (897) | ||||
Net income attributable to MSC Industrial | $ 202,902 | $ (9,020) | $ (352) | $ (899) | $ 213,173 | ||||
Net income per common share: | |||||||||
Diluted | $ 3.59 | $ (0.16) | $ (0.01) | $ (0.02) | $ 3.77 | ||||
*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 June 3, 2023 | |||||||
(In thousands, except percentages and per share data) | |||||||
GAAP | Items Affecting Comparability | Non-GAAP | |||||
Total MSC | Restructuring | Share | Adjusted Total | ||||
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 income 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 | Items Affecting Comparability | Non-GAAP | |||||||
Total MSC | Restructuring | Acquisition- | Share | Adjusted Total | |||||
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 % | — % | 0.0 % | 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 % | 0.0 % | 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. | |||||||||
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SOURCE MSC Industrial Supply Co.
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