UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 29, 2004
Commission File No.: 1-14130
MSC INDUSTRIAL DIRECT CO., INC.
(Exact name of registrant as specified in its charter)
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New York |
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11-3289165 |
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
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75 Maxess Road Melville, NY |
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11747 |
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(Address of principal executive offices) |
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(Zip Code) |
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(516) 812-2000 |
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(Registrant’s telephone number, including area code) |
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Website: www.mscdirect.com |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
As of July 6, 2004, 42,087,455 shares of Class A common stock and 25,445,026 shares of Class B common stock of the registrant were outstanding.
SAFE HARBOR STATEMENT
This Quarterly Report on Form 10-Q (the “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Discussions containing such forward-looking statements may be found in Items 2 and 3 hereof, as well as within this Report generally. In addition, when used in this Report, the words “believes,” “anticipates,” “expects,” “estimates,” “plans,” “intends,” and similar expressions are intended to identify forward-looking statements. All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected results, as discussed below under the heading “Risk Factors”. Factors that may cause these differences include, but are not limited to:
• changing customer and product mixes, market conditions and industry consolidation;
• competition;
• general economic conditions in the markets in which the Company operates;
• risk of cancellation or rescheduling of orders;
• work stoppages at transportation centers or shipping ports;
• the risk of war, terrorism and similar hostilities;
• dependence on our information systems;
• dependence on key personnel; and
• the other matters discussed in the Business Description contained in the Company’s Annual Report on Form 10-K for the fiscal year ended August 30, 2003.
Consequently, such forward-looking statements should be regarded solely as the Company’s current plans, estimates and beliefs. The Company does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.
Available Information
We file annual, quarterly and current reports, information statements and other information with the Securities and Exchange Commission (the “SEC”). The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov.
Internet Address
The Company’s Internet address is www.mscdirect.com. We make available on or through our investor relations page on our web site, free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and beneficial ownership reports on Forms 3, 4, and 5 and amendments to those reports as soon as reasonably practicable after this material is electronically filed or furnished to the SEC. We also make available, on our web site, the charters of the committees of our Board of Directors pursuant to SEC requirements and New York Stock Exchange listing standards.
MSC INDUSTRIAL DIRECT CO., INC.
INDEX
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Item 1. Consolidated Financial Statements (Unaudited)
MSC INDUSTRIAL DIRECT CO., INC.
(In thousands, except share data)
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May 29, |
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August 30, |
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(Unaudited) |
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(Audited) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
37,825 |
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$ |
114,294 |
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Available-for-sale securities |
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2,926 |
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— |
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Accounts receivable, net of allowance for doubtful accounts of $2,783 and $2,617, respectively |
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112,809 |
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93,598 |
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Inventories |
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220,576 |
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201,602 |
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Prepaid expenses and other current assets |
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15,116 |
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12,039 |
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Deferred income taxes |
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11,132 |
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11,051 |
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Total current assets |
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400,384 |
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432,584 |
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Available-for-sale securities |
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116,709 |
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— |
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Property, Plant and Equipment, net |
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104,250 |
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106,935 |
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Goodwill |
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63,202 |
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63,202 |
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Other assets |
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9,488 |
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16,249 |
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Total assets |
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$ |
694,033 |
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$ |
618,970 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
38,820 |
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$ |
30,069 |
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Accrued liabilities |
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48,780 |
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48,406 |
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Current portion of long-term notes payable |
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149 |
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169 |
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Total current liabilities |
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87,749 |
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78,644 |
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Long-term notes payable |
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1,023 |
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1,132 |
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Deferred income tax liability |
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26,911 |
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28,839 |
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Total liabilities |
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115,683 |
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108,615 |
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Shareholders’ Equity: |
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Preferred stock; $0.001 par value; 5,000,000 shares authorized; none issued and outstanding |
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— |
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— |
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Class A common stock (one vote per share); $0.001 par value; 100,000,000 shares authorized; 47,440,268 and 38,825,572 shares issued, and 42,057,626 and 33,642,511 shares outstanding, respectively |
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48 |
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39 |
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Class B common stock (ten votes per share); $0.001 par value; 50,000,000 shares authorized; 25,445,026 and 32,137,294 shares issued and outstanding, respectively |
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25 |
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32 |
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Additional paid-in capital |
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292,227 |
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261,849 |
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Retained earnings |
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376,413 |
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331,568 |
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Accumulated other comprehensive loss |
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(77 |
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— |
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Class A treasury stock, at cost, 5,382,642 and 5,183,061 shares, respectively |
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(88,895 |
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(83,133 |
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Deferred stock compensation |
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(1,391 |
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— |
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Total shareholders’ equity |
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578,350 |
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510,355 |
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Total Liabilities and Shareholders’ Equity |
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$ |
694,033 |
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$ |
618,970 |
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See accompanying notes.
1
MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Income
(In thousands, except per share data) (Unaudited)
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Thirteen Weeks Ended |
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Thirty-Nine Weeks Ended |
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May 29, |
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May 31, |
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May 29, |
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May 31, |
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Net sales |
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$ |
255,297 |
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$ |
215,571 |
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$ |
708,595 |
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$ |
635,896 |
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Cost of goods sold |
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140,417 |
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118,709 |
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389,176 |
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349,555 |
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Gross profit |
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114,880 |
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96,862 |
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319,419 |
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286,341 |
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Operating expenses |
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76,993 |
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75,915 |
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224,639 |
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225,006 |
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Income from operations |
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37,887 |
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20,947 |
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94,780 |
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61,335 |
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Other income: |
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Interest income, net |
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684 |
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328 |
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1,444 |
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773 |
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Other income, net |
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91 |
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67 |
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319 |
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114 |
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Total other income |
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775 |
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395 |
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1,763 |
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887 |
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