EX-99.1 2 pressreleaseq2442023.htm EX-99.1 Document
Exhibit 99.1
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NEWS

MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS

FISCAL 2023 Q2 HIGHLIGHTS

•Net sales of $961.6 million increased 11.5% YoY, 11 percentage points above the Industrial Production (IP) Index
•Operating income of $114.3 million, or $117.2 million adjusted to exclude acquisition-related costs, share reclassification proposal costs and restructuring and other costs1
•Operating margin of 11.9%, or 12.2% excluding the adjustments described above1
•Diluted EPS of $1.41 vs. $1.25 in the prior fiscal year quarter
•Adjusted diluted EPS of $1.45 vs. $1.29 in the prior fiscal year quarter1
•Repurchased over 150,000 shares during the quarter at an average purchase price per share of $81.76

MELVILLE, NY and DAVIDSON, NC, APRIL 4, 2023 - 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 second quarter ended March 4, 2023.

Financial Highlights2
FY23 Q2FY22 Q2ChangeFY23 YTDFY22 YTDChange
Net Sales$961.6 $862.5 11.5 %$1,919.4 $1,711.1 12.2 %
Income from Operations $114.3 $97.2 17.6 %$230.3 $187.9 22.6 %
Operating Margin 11.9 %11.3 %12.0 %11.0 %
Net Income Attributable to MSC$79.1 $69.9 13.2 %$160.5 $136.0 18.0 %
Diluted EPS$1.41 
(3)
$1.25 
(4)
12.8 %$2.86 
(3)
$2.43 
(4)
17.7 %
 
Adjusted Financial Highlights 2
FY23 Q2FY22 Q2ChangeFY23 YTDFY22 YTDChange
Net Sales$961.6 $862.5 11.5 %$1,919.4 $1,711.1 12.2 %
Adjusted Income from Operations 1
$117.2 $100.3 16.8 %$235.4 $196.3 19.9 %
Adjusted Operating Margin 1
12.2 %11.6 %12.3 %11.5 %
Adjusted Net Income Attributable to MSC 1
$81.3 $72.3 12.5 %$164.3 $142.2 15.5 %
Adjusted Diluted EPS 1
$1.45 
(3)
$1.29 
(4)
12.4 %$2.93 
(3)
$2.54 
(4)
15.4 %

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 56.0 million and 56.1 million diluted shares outstanding for FY23 Q2 and FY23 YTD, respectively.
4 Based on 56.0 million and 55.9 million diluted shares outstanding for FY22 Q2 and FY22 YTD, respectively.

Erik Gershwind, President and Chief Executive Officer, said, “We delivered a strong second quarter as successful execution across our initiatives continues to produce results. We delivered average daily sales growth approximately 11 percentage points higher than the IP Index and double-digit average daily sales growth for the fourth consecutive quarter. Looking ahead, we expect our outperformance against the IP Index to continue as we execute across our five growth drivers and take share by leveraging technical expertise to create operational benefits across our customer base.”

Kristen Actis-Grande, Executive Vice President and Chief Financial Officer, added, "Our performance this quarter was bolstered by the changes we are making to leverage company specific growth. Productivity was strong once again, which led to operating margin expansion as benefits from our Mission Critical initiatives continue to mitigate ongoing headwinds. Looking to the future, we have reoriented our category management focus to improve product and supplier assortment and streamline our cost position. We expect to begin seeing early benefits in late fiscal 2023 with most of the benefits materializing in fiscal 2024.

Gershwind concluded, “As we move into the back half of our fiscal 2023, there is growing momentum inside MSC which has us all excited about our future. The marketplace in which we operate has attractive dynamics and a significant total addressable market to support continued expansion. Our primary growth drivers and strong balance sheet highlight our competitive advantages to remain flexible in any operating environment with a long-term focus.”

MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
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Mission Critical Update

We continued to make progress on each of our Mission Critical growth initiatives during the fiscal 2023 second 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 teens year over year in FY23 Q2
Expand Solutions (Vending, In-Plant and Vendor Managed Inventory)
a.Vending signings strong; vending machine net sales grew mid-teens and represent 15% of total Company net sales
b.In-Plant signings strong; In-Plant net sales grew nearly 20% and represent over 12% of total Company net sales
c.Total Solutions net sales represent over 56% of total Company net sales
Grow E-Commerce
a.E-Commerce net sales grew low teens year over year in FY23 Q2 and reached 62% of total Company net sales
Diversify Customers and End Markets
a.Public Sector, driven by both federal and state government contract wins, grew 20% year over year in FY23 Q2


Balance Sheet, Liquidity and Capital Allocation
a.Floating/fixed rate debt ratio now at 45/55
b.Top two priorities remain investing in the business and returning cash to shareholders through ordinary dividends
c.Next two priorities are tuck-in acquisitions and share buybacks
d.Share buybacks on hold pending share reclassification proposal

Fiscal 2023 Full Year Financial Outlook
Adjusted Operating Margin1
12.7%-13.3%
ADS Growth (YoY)5.0%-9.0%
Gross Margins40-70 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+
•Current net sales growth tracking to middle to high end of range
•Recently acquired companies expected to dilute gross margins by 40 to 50 bps and operating margins by ~30 bps
•Overall, gross margins expected to be higher in back half of fiscal year
•Adjusted operating expense as a percentage of net sales expected to improve in the back half of the year
•Adjusted operating margin tracking to middle of range

(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 second 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 May 4, 2023. The Company’s reporting date for fiscal 2023 third quarter results is scheduled for June 29, 2023.


MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
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Contact Information
Investors:Media:
John G. ChironnaPaul Mason
Vice President, Investor Relations and TreasurerDirector, Corporate Communications
(704) 987-5231(336) 817-2131


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 2.2 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 approximately 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 the future impact of COVID-19 on our business operations, 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, any 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 potential impact of the COVID-19 pandemic on our sales, operations and supply chain; 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 interest rate uncertainty due to the London InterBank Offered Rate (LIBOR) reform; 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; and the significant control that our principal shareholders exercise over us, which may result in our taking actions or failing to take actions which our other shareholders do not prefer. 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 SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
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MSC INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
March 4,
2023		September 3,
2022
ASSETS(unaudited)
Current Assets:
     Cash and cash equivalents $49,615 $43,537 
     Accounts receivable, net of allowance for credit losses 412,687 687,608 
     Inventories747,470 715,625 
     Prepaid expenses and other current assets 104,996 96,853 
          Total current assets1,314,768 1,543,623 
Property, plant and equipment, net298,664 286,666 
Goodwill718,179 710,130 
Identifiable intangibles, net117,865 114,328 
Operating lease assets64,299 64,780 
Other assets10,680 9,887 
          Total assets$2,524,455 $2,729,414 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of debt including obligations under finance leases$275,758 $325,680 
Current portion of operating lease liabilities19,174 18,560 
Accounts payable 207,553 217,378 
Accrued expenses and other current liabilities 142,796 164,326 
Total current liabilities 645,281 725,944 
Long-term debt including obligations under finance leases273,941 468,912 
Noncurrent operating lease liabilities46,583 47,616 
Deferred income taxes and tax uncertainties 124,659 124,659 
Total liabilities $1,090,464 $1,367,131 
Commitments and Contingencies
Shareholders’ Equity:
     Preferred Stock— — 
     Class A Common Stock49 48 
     Class B Common Stock9 9 
     Additional paid-in capital824,268 798,408 
     Retained earnings725,826 681,292 
     Accumulated other comprehensive loss(20,437)(23,121)
     Class A treasury stock, at cost(108,781)(106,202)
          Total MSC shareholders’ equity 1,420,934 1,350,434 
     Noncontrolling interest$13,057 $11,849 
          Total shareholders’ equity1,433,991 1,362,283 
          Total liabilities and shareholders’ equity$2,524,455 $2,729,414 



MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
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MSC INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)

Thirteen Weeks EndedTwenty-Six Weeks Ended
March 4,
2023		February 26,
2022		March 4,
2023		February 26,
2022
Net sales$961,632 $862,522 $1,919,377 $1,711,069 
Cost of goods sold564,937 496,247 1,124,883 992,198 
  Gross profit396,695 366,275 794,494 718,871 
Operating expenses280,630 265,973 560,325 522,554 
Restructuring and other costs1,783 3,134 3,877 8,417 
  Income from operations114,282 97,168 230,292 187,900 
Other income (expense):
  Interest expense(5,956)(3,617)(12,875)(7,345)
  Interest income151 21 251 40 
  Other (expense) income, net(2,299)91 (3,639)(322)
  Total other expense(8,104)(3,505)(16,263)(7,627)
     Income before provision for income taxes106,178 93,663 214,029 180,273 
Provision for income taxes26,863 23,509 53,502 43,862 
     Net income79,315 70,154 160,527 136,411 
Less: Net income attributable to noncontrolling interest175 223 73 413 
    Net income attributable to MSC Industrial$79,140 $69,931 $160,454 $135,998 
Per share data attributable to MSC Industrial:
Net income per common share:
  Basic$1.42 $1.25 $2.87 $2.44 
  Diluted$1.41 $1.25 $2.86 $2.43 
Weighted average shares used in computing
    net income per common share:
  Basic55,88055,79955,88555,664
   Diluted56,00155,97156,07455,945





















MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
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MSC INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)

Thirteen Weeks EndedTwenty-Six Weeks Ended
March 4,
2023		February 26,
2022		March 4,
2023		February 26,
2022
Net income, as reported$79,315 $70,154 $160,527 $136,411 
Other comprehensive income, net of tax:
     Foreign currency translation adjustments2,549 3,768 3,819 (1,224)
Comprehensive income 81,864 73,922 164,346 135,187 
Comprehensive income attributable to noncontrolling interest:
     Net income(175)(223)(73)(413)
     Foreign currency translation adjustments(800)(824)(1,135)87 
Comprehensive income attributable to MSC Industrial$80,889 $72,875 $163,138 $134,861 

















































MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
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MSC INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twenty-Six Weeks Ended
March 4,
2023		February 26,
2022
Cash Flows from Operating Activities:
Net income $160,527 $136,411 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 37,223 34,985 
Non-cash operating lease cost9,883 8,012 
Stock-based compensation 9,969 10,189 
Loss on disposal of property, plant and equipment249 230 
Provision for credit losses 5,490 4,245 
Deferred income taxes— (341)
Changes in operating assets and liabilities:
Accounts receivable 273,835 (64,293)
Inventories (27,787)(34,024)
Prepaid expenses and other current assets (6,926)(8,358)
Operating lease liabilities(9,820)(8,136)
Other assets (552)(1,492)
Accounts payable and accrued liabilities(35,651)(20,007)
Total adjustments 255,913 (78,990)
Net cash provided by operating activities 416,440 57,421 
Cash Flows from Investing Activities:
Expenditures for property, plant and equipment (40,571)(31,179)
Cash used in business acquisitions, net of cash acquired(20,533)— 
Net cash used in investing activities (61,104)(31,179)
Cash Flows from Financing Activities:
Repurchases of Class A Common Stock(31,007)(4,813)
Payments of regular cash dividends (88,313)(83,586)
Proceeds from sale of Class A Common Stock in connection with associate stock purchase plan 2,332 2,259 
Proceeds from exercise of Class A Common Stock options 12,775 12,053 
Borrowings under credit facilities208,000 184,000 
Payments under credit facilities(403,000)(134,500)
Borrowings under financing obligations1,061 1,058 
Payments under Shelf Facility Agreements and Private Placement Debt(50,000)— 
Other, net(1,171)(1,387)
Net cash used in financing activities (349,323)(24,916)
Effect of foreign exchange rate changes on cash and cash equivalents 65 (108)
Net increase in cash and cash equivalents 6,078 1,218 
Cash and cash equivalents—beginning of period 43,537 40,536 
Cash and cash equivalents—end of period $49,615 $41,754 
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $58,641 $63,909 
Cash paid for interest $10,327 $7,068 



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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 incremental 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, 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.

•Incremental Operating Margin

The Company defines Incremental Operating Margin as the change in year-over-year Income from Operations as a percentage of the change in year-over-year Net Sales and Adjusted Incremental Operating Margin as Incremental Operating Margin adjusted to exclude acquisition-related costs, share reclassification proposal costs and restructuring and other costs by excluding such items from Income from Operations. The Company’s management believes that Incremental Operating Margin is useful because it shows the direction that operating profit margins are moving as a result of changes in net sales between periods, and that, by excluding the aforementioned items, Adjusted Incremental Operating Margin helps to more clearly show, on a comparable basis between periods, trends in the Company’s underlying business and results of operations. The Company believes 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






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MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Thirteen Weeks Ended March 4, 2023
(In thousands, except percentages and per share data)
GAAP Financial MeasureItems Affecting ComparabilityNon-GAAP Financial Measure
Total MSC IndustrialRestructuring and Other Costs Acquisition-related CostsShare Reclassification Proposal Costs Adjusted Total MSC Industrial
Net Sales $961,632 $— $— $— $961,632 
Cost of Goods Sold564,937 — — — 564,937 
Gross Profit396,695 — — — 396,695 
Gross Margin41.3 %— — — 41.3 %
Operating Expenses280,630 — 244 876 279,510 
Operating Exp as % of Sales29.2 %— %— %-0.1 %29.1 %
Restructuring and Other Costs 1,783 1,783 — — — 
Income from Operations114,282 (1,783)(244)(876)117,185 
Operating Margin11.9 %0.2 %— %0.1 %12.2 %
Total Other Expense(8,104)— — — (8,104)
Income before provision for income taxes106,178 (1,783)(244)(876)109,081 
Provision for income taxes26,863 (450)(62)(222)27,597 
Net income79,315 (1,333)(182)(654)81,484 
Net income attributable to noncontrolling interest175 — — — 175 
Net income attributable to MSC Industrial$79,140 $(1,333)$(182)$(654)$81,309 
Net income per common share:
     Diluted$1.41 $(0.02)$— $(0.01)$1.45 

*Individual amounts may not agree to the total due to rounding.

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MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Twenty-Six Weeks Ended March 4, 2023
(In thousands, except percentages and per share data)
GAAP Financial MeasureItems Affecting ComparabilityNon-GAAP Financial Measure
Total MSC IndustrialRestructuring and Other Costs Acquisition-related CostsShare Reclassification Proposal CostsAdjusted Total MSC Industrial
Net Sales $1,919,377 $— $— $— $1,919,377 
Cost of Goods Sold1,124,883 — — — 1,124,883 
Gross Profit794,494 — — — 794,494 
Gross Margin41.4 %— — — 41.4 %
Operating Expenses560,325 — 398 876 559,051 
Operating Exp as % of Sales29.2 %— %— %— %29.1 %
Restructuring and Other Costs 3,877 3,877 — — — 
Income from Operations230,292 (3,877)(398)(876)235,443 
Operating Margin12.0 %0.2 %— %— %12.3 %
Total Other Expense(16,263)— — — (16,263)
Income before provision for income taxes214,029 (3,877)(398)(876)219,180 
Provision for income taxes53,502 (973)(100)(220)54,795 
Net income160,527 (2,904)(298)(656)164,385 
Net income attributable to noncontrolling interest73 — — — 73 
Net income attributable to MSC Industrial$160,454 $(2,904)$(298)$(656)$164,312 
Net income per common share:
     Diluted$2.86 $(0.05)$(0.01)$(0.01)$2.93 

*Individual amounts may not agree to the total due to rounding.

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MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Thirteen and Twenty-Six Weeks Ended February 26, 2022
(In thousands, except percentages and per share data)
GAAP Financial MeasureItems Affecting ComparabilityNon-GAAP Financial Measure
Total MSC IndustrialRestructuring and Other Costs Adjusted Total MSC Industrial
Thirteen Weeks EndedTwenty-Six
Weeks Ended		Thirteen Weeks EndedTwenty-Six
Weeks Ended		Thirteen Weeks EndedTwenty-Six
Weeks Ended
Net Sales $862,522 $1,711,069 $— $— $862,522 $1,711,069 
Cost of Goods Sold496,247 992,198 — — 496,247 992,198 
Gross Profit366,275 718,871 — — 366,275 718,871 
Gross Margin42.5 %42.0 %42.5 %42.0 %
Operating Expenses265,973 522,554 — — 265,973 522,554 
Operating Exp as % of Sales30.8 %30.5 %— — 30.8 %30.5 %
Restructuring and Other Costs 3,134 8,417 3,134 8,417 — — 
Income from Operations97,168 187,900 (3,134)(8,417)100,302 196,317 
Operating Margin11.3 %11.0 %-0.4 %-0.5 %11.6 %11.5 %
Total Other Expense(3,505)(7,627)— — (3,505)(7,627)
Income before provision for income taxes93,663 180,273 (3,134)(8,417)96,797 188,690 
Provision for income taxes23,509 43,862 (787)(2,178)24,296 46,040 
     Net income70,154 136,411 (2,347)(6,239)72,501 142,650 
     Net income attributable to noncontrolling interest223 413 — — 223 413 
     Net income attributable to MSC Industrial$69,931 $135,998 $(2,347)$(6,239)$72,278 $142,237 
Net income per common share:
     Diluted$1.25 $2.43 $(0.04)$(0.11)$1.29 $2.54 

*Individual amounts may not agree to the total due to rounding.







MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
12
            
MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Thirteen Weeks Ended March 4, 2023 and February 26, 2022
(In thousands, except percentages and per share data)
GAAP Financial MeasureItems Affecting ComparabilityNon-GAAP Financial Measure
Total MSC IndustrialRestructuring and Other Costs Acquisition-related CostsShare Reclassification Proposal Costs Adjusted Total MSC Industrial
Net Sales - thirteen weeks ended March 4, 2023$961,632 — — — $961,632 
Net Sales - thirteen weeks ended February 26, 2022862,522 — — — 862,522 
Income from Operations - thirteen weeks ended March 4, 2023114,282 (1,783)(244)(876)117,185 
Income from Operations - thirteen weeks ended February 26, 202297,168 (3,134)— — 100,302 
Incremental Operating Margin - thirteen weeks ended March 4, 202317.3 %(1.4)%0.2 %0.9 %17.0 %








MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 SECOND QUARTER RESULTS
13
            
MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Twenty-Six Weeks Ended March 4, 2023 and February 26, 2022
(In thousands, except percentages and per share data)
GAAP Financial MeasureItems Affecting ComparabilityNon-GAAP Financial Measure
Total MSC IndustrialRestructuring and Other CostsAcquisition-related CostsShare Reclassification Proposal CostsAdjusted Total MSC Industrial
Net Sales - twenty-six weeks ended March 4, 2023$1,919,377 — — — $1,919,377 
Net Sales - twenty-six weeks ended February 26, 20221,711,069 — — — 1,711,069 
Income from Operations - twenty-six weeks ended March 4, 2023230,292 (3,877)(398)(876)235,443 
Income from Operations - twenty-six weeks ended February 26, 2022187,900 (8,417)— — 196,317 
Incremental Operating Margin - twenty-six weeks ended March 4, 202320.4 %(2.2)%0.2 %0.4 %18.8 %