Attached files
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| 8-K - MSC INDUSTRIAL DIRECT CO INC | v207440_8k.htm |
EXHIBIT
99.1
Contact:
Shelley
Boxer
V.P.
Finance
MSC
Industrial Direct Co., Inc.
(516)
812-1216
Investors/Media:
Eric
Boyriven/Jeannine Dowling
FD
(212)
850-5600
For Immediate
Release
MSC
INDUSTRIAL DIRECT CO., INC. REPORTS RESULTS
FOR
ITS FISCAL 2011 FIRST QUARTER
-
First Quarter Net Sales Rise 22.9% to $472.8 Million -
-
First Quarter Diluted earnings per share increase 50% to $0.75 -
Melville, NY, January 6, 2011 - MSC
INDUSTRIAL DIRECT CO., INC. (NYSE: MSM), “MSC” or the “Company,” one of
the largest direct marketers and premier distributors of Metalworking and
Maintenance, Repair and Operations (“MRO”) supplies to industrial customers
throughout the United States, today reported financial
results for its first quarter ended November 27, 2010.
For the
fiscal 2011 first quarter, net sales rose 22.9% to $472.8 million, compared with
$384.8 million in the prior year period. Operating income increased
51.2% in the fiscal 2011 first quarter to $77.2 million, or 16.3% of net
sales, compared with $51.0 million, or 13.3% of net sales, in the prior year
period. For the first quarter of fiscal 2011, the Company reported net income of
$47.6 million, an increase of 51.4% over net income of $31.4 million in the
first quarter of fiscal 2010. Diluted earnings per share in the fiscal
2011 first quarter were $0.75 (based on 62.8 million diluted shares
outstanding), compared to $0.50 (based on 62.7 million diluted shares
outstanding) in the same period a year ago, an increase of 50.0%.
David
Sandler, President and Chief Executive Officer said, “Our first quarter results
reflect strong performance in a highly competitive environment. We made solid
progress executing on our strategic investment program designed to capitalize on
the unique opportunity we see to leverage our model and fuel further market
share gains. In addition, we recently completed the acquisition of
Rutland Tool & Supply Co. (“Rutland”) which supports our growth strategy by
further strengthening our presence in metalworking while also building out our
presence in the Western U.S.”
Erik
Gershwind, Executive Vice President and Chief Operating Officer, stated, “We saw
excellent revenue growth in the first quarter against more challenging
comparables, driven by strong market share gains, the resurgence of the U.S.
manufacturing base and strong performance within our core customer
base. These factors more than offset some slowing in demand from
government customers, who are feeling more financial restraints as their budgets
remain under pressure. Overall, we are encouraged by improving
customer sentiment and the macro indicators in the market.”
Mr.
Sandler concluded, “We are pleased with our progress in delivering on our
strategic objectives of disproportionate revenue growth, generating significant
operating leverage and investing for the future. We have never been more
confident in our position to capitalize on the opportunities ahead of
us.”
For the
fiscal 2011 second quarter, the Company expects net sales to be between
$466.0 million and $478.0 million, which includes approximately $6.0 million in
sales from the recently completed acquisition of Rutland, and expects diluted
earnings per share for the second quarter of fiscal 2011 to be between $0.66 and
$0.70, which includes dilution of $0.03 from the Rutland acquisition, primarily
arising from acquisition and integration costs.
|
MSC
INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2011 FIRST QUARTER
RESULTS
|
Page
- 2 -
|
The
management of MSC will host a conference call today, at 11:00 a.m. Eastern Time,
to review the Company’s results for the fiscal 2011 first quarter, and to
comment on current operations. The call may be accessed via the
Internet on the home page of MSC’s website located at: www.mscdirect.com. A
replay of the conference call will be available on the Company’s website through
January 20, 2011.
About
MSC Industrial Direct Co., Inc.
MSC
Industrial Direct Co., Inc. is one of the largest direct marketers and premier
distributors of Metalworking and Maintenance, Repair and Operations (“MRO”)
supplies to industrial customers throughout the United States. MSC employs one
of the industry’s largest sales forces and distributes approximately 600,000
industrial products from approximately 3,000 suppliers to approximately 317,000
customers. In-stock availability is approximately 99%, with next day
standard delivery to the contiguous United States on qualifying orders up until
8:00 p.m. Eastern Time. MSC reaches its customers through a
combination of approximately 22 million direct-mail catalogs, 96 branch sales
offices, 986 sales people, the Internet and associations with some of the
world's most prominent B2B eCommerce portals. For more information, visit the
Company's website at http://www.mscdirect.com.
CAUTIONARY
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements in this Press
Release may constitute “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Any statements contained herein
which are not statements of historical facts and that address activities, events
or developments that the Company expects, believes or anticipates will or may
occur in the future, including statements about the expected benefits of the
acquisition shall be deemed to be forward-looking statements. Forward-looking
statements are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Future events, actual results and performance, financial and
otherwise, could differ materially from those set forth in or contemplated by
the forward-looking statements herein. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. The inclusion of any statement in this release does not constitute an
admission by MSC or any other person that the events or circumstances described
in such statement are material. Factors that could cause actual results to
differ materially from those in forward-looking statements include, without
limitation, problems with successfully integrating acquired operations, current
economic, political and social conditions, changing customer and product mixes,
financial restrictions on outstanding borrowings, industry consolidation,
competition, general economic conditions in the markets in which the Company
operates, volatility in commodity and energy prices, credit risk of our
customers, risk of cancellation or rescheduling of orders, work stoppages or
other business interruptions (including those due to extreme weather conditions)
at transportation centers or shipping ports, the risk of war, terrorism and
similar hostilities, dependence on the Company’s information systems and on key
personnel, and the outcome of potential government or regulatory proceedings or
future litigation relating to pending or future claims, inquiries or
audits. 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 the Company's reports on Forms
10-K, 10-Q and 8-K that the Company files with the U.S. Securities and Exchange
Commission. The forward-looking statements in this press release are
based on current expectations and the Company assumes no obligation to update
these forward-looking statements.
(Tables
Follow)
|
MSC
INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2011 FIRST QUARTER
RESULTS
|
Page
- 3 -
|
MSC
INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated
Balance Sheets
(In
thousands)
|
November
27,
2010
|
August
28,
2010
|
|||||||
|
ASSETS
|
(Unaudited)
|
|||||||
|
Current
Assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 80,545 | $ | 121,191 | ||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
225,488 | 221,013 | ||||||
|
Inventories
|
299,069 | 285,985 | ||||||
|
Prepaid
expenses and other current assets
|
21,450 | 20,498 | ||||||
|
Deferred
income taxes
|
25,854 | 27,849 | ||||||
|
Total
current assets
|
652,406 | 676,536 | ||||||
|
Property,
plant and equipment, net
|
142,878 | 143,609 | ||||||
|
Goodwill
|
271,765 | 271,765 | ||||||
|
Identifiable
intangibles, net
|
46,992 | 48,751 | ||||||
|
Other
assets
|
9,418 | 12,662 | ||||||
|
Total
assets
|
$ | 1,123,459 | $ | 1,153,323 | ||||
|
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Current
maturities of long-term notes payable
|
$ | 18,818 | $ | 39,361 | ||||
|
Accounts
payable
|
79,066 | 81,220 | ||||||
|
Accrued
liabilities
|
67,748 | 69,704 | ||||||
|
Total
current liabilities
|
165,632 | 190,285 | ||||||
|
Deferred
income taxes and tax uncertainties
|
64,796 | 63,158 | ||||||
|
Total
liabilities
|
230,428 | 253,443 | ||||||
|
Commitments
and Contingencies
|
||||||||
|
Shareholders’
Equity:
|
||||||||
|
Class
A common stock
|
50 | 48 | ||||||
|
Class
B common stock
|
17 | 18 | ||||||
|
Additional
paid-in capital
|
402,594 | 378,315 | ||||||
|
Retained
earnings
|
646,076 | 675,968 | ||||||
|
Accumulated
other comprehensive loss
|
(2,547 | ) | (2,660 | ) | ||||
|
Class
A treasury stock, at cost
|
(153,159 | ) | (151,809 | ) | ||||
|
Total
shareholders’ equity
|
893,031 | 899,880 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 1,123,459 | $ | 1,153,323 | ||||
|
MSC
INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2011 FIRST QUARTER
RESULTS
|
Page
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|
MSC
INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated
Statements of Income
(In
thousands, except per share data)
(Unaudited)
|
Thirteen
Weeks Ended
|
||||||||
|
November
27,
2010
|
November
28,
2009
|
|||||||
|
Net
sales
|
$ | 472,827 | $ | 384,817 | ||||
|
Cost
of goods sold
|
255,134 | 209,118 | ||||||
|
Gross
profit
|
217,693 | 175,699 | ||||||
|
Operating
expenses
|
140,543 | 124,677 | ||||||
|
Income
from operations
|
77,150 | 51,022 | ||||||
|
Other
(Expense) Income:
|
||||||||
|
Interest
expense
|
(99 | ) | (387 | ) | ||||
|
Interest
income
|
25 | 60 | ||||||
|
Other
expense, net
|
(31 | ) | (17 | ) | ||||
|
Total
other expense
|
(105 | ) | (344 | ) | ||||
|
Income
before provision for income taxes
|
77,045 | 50,678 | ||||||
|
Provision
for income taxes
|
29,485 | 19,258 | ||||||
|
Net
income
|
$ | 47,560 | $ | 31,420 | ||||
|
Per
Share Information:
|
||||||||
|
Net
income per common share:
|
||||||||
|
Basic
|
$ | 0.75 | $ | 0.50 | ||||
|
Diluted
|
$ | 0.75 | $ | 0.50 | ||||
|
Weighted
average shares used in computing net income per common
share:
|
||||||||
|
Basic
|
62,370 | 62,206 | ||||||
|
Diluted
|
62,795 | 62,727 | ||||||
|
Cash
dividend declared per common share
|
$ | 1.22 | $ | 0.20 | ||||
|
MSC
INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2011 FIRST QUARTER
RESULTS
|
Page
- 5 -
|
MSC
INDUSTRIAL DIRECT CO., INC.
Condensed Consolidated
Statements of Cash Flows
(In
thousands)
(Unaudited)
|
Thirteen
Weeks Ended
|
||||||||
|
November
27,
2010
|
November
28,
2009
|
|||||||
|
Cash
Flows from Operating Activities:
|
||||||||
|
Net
income
|
$ | 47,560 | $ | 31,420 | ||||
|
Adjustments
to reconcile net income to net cash
provided
by operating activities:
|
||||||||
|
Depreciation
and amortization
|
7,073 | 6,577 | ||||||
|
Stock-based
compensation
|
3,613 | 3,098 | ||||||
|
Loss
on disposal of property, plant and equipment
|
1 | -- | ||||||
|
Provision
for doubtful accounts
|
698 | 799 | ||||||
|
Deferred
income taxes and tax uncertainties
|
3,635 | 2,253 | ||||||
|
Excess
tax benefits from stock-based compensation
|
(3,651 | ) | (1,749 | ) | ||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
(5,097 | ) | (13,220 | ) | ||||
|
Inventories
|
(13,012 | ) | 3,393 | |||||
|
Prepaid
expenses and other current assets
|
(947 | ) | 2,471 | |||||
|
Other
assets
|
3,223 | 2,656 | ||||||
|
Accounts
payable and accrued liabilities
|
(1,170 | ) | 9,129 | |||||
|
Total
adjustments
|
(5,634 | ) | 15,407 | |||||
|
Net
cash provided by operating activities
|
41,926 | 46,827 | ||||||
|
Cash
Flows from Investing Activities:
|
||||||||
|
Expenditures
for property, plant and equipment
|
(4,455 | ) | (5,135 | ) | ||||
|
Net
cash used in investing activities
|
(4,455 | ) | (5,135 | ) | ||||
|
Cash
Flows from Financing Activities:
|
||||||||
|
Purchases
of treasury stock
|
(1,865 | ) | (1,064 | ) | ||||
|
Payment
of cash dividends
|
(77,229 | ) | (12,595 | ) | ||||
|
Excess
tax benefits from stock-based compensation
|
3,651 | 1,749 | ||||||
|
Proceeds
from sale of Class A common stock in connection with associate stock
purchase plan
|
694 | 632 | ||||||
|
Proceeds
from exercise of Class A common stock options
|
17,161 | 7,491 | ||||||
|
Repayments
of notes payable under the credit facility and other notes
|
(20,543 | ) | (12,855 | ) | ||||
|
Net
cash used in financing activities
|
(78,131 | ) | (16,642 | ) | ||||
|
Effect
of foreign exchange rate changes on cash and cash
equivalents
|
14 | (2 | ) | |||||
|
Net
(decrease) increase in cash and cash equivalents
|
(40,646 | ) | 25,048 | |||||
|
Cash
and cash equivalents – beginning of period
|
121,191 | 225,572 | ||||||
|
Cash
and cash equivalents – end of period
|
$ | 80,545 | $ | 250,620 | ||||
|
Supplemental
Disclosure of Cash Flow Information:
|
||||||||
|
Cash
paid for income taxes
|
$ | 2,994 | $ | 3,153 | ||||
|
Cash
paid for interest
|
$ | 68 | $ | 344 | ||||
# # #