| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | Cautionary Note Regarding Forward-Looking Statements Statements in this presentation may constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of 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 ope ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________ FORM 10-Q __________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 26, 2022 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 1-14130 ______________________ ...

Financial Data and Key Metrics Changes - The company's second quarter sales reached $863 million, reflecting an 11.4% growth compared to the prior year, with an average daily sales growth rate of 7.9% [27][10] - Gross margins improved to 42.5%, up 90 basis points sequentially and 440 basis points year-over-year [29][30] - Adjusted operating expenses were $266 million, representing 30.8% of sales, down from 31.6% in the prior year [31] - Earnings per share increased to $1.25 from $0.32 in the same period last year, with adjusted earnings per share rising 25% to $1.29 [34] Business Line Data and Key Metrics Changes - Non-safety and non-janitorial product lines grew over 10% on an average daily sales basis, while safety and janitorial products saw a decline of roughly 3% [27] - The implant program now represents approximately 9% of total company sales, tracking ahead of the plan to reach 10% by the end of fiscal 2023 [12] - E-commerce sales accounted for 60.7% of total company sales, up 150 basis points from the prior year [13] Market Data and Key Metrics Changes - Government sales declined roughly 11% due to challenging comparisons in janitorial and safety products, but this was an improvement from a nearly 30% decline in Q1 [28] - The company reported strong demand across most customer segments, with the exception of automotive, indicating robust order backlogs [22][60] Company Strategy and Development Direction - The company aims to restore return on invested capital into the high teens by the end of fiscal 2023 through growth, gross margin initiatives, and cost reductions of at least $100 million [18] - The five growth levers identified include metalworking, solutions, selling the portfolio, digital investments, and customer diversification, particularly in the public sector [12] - The company is leveraging its broad inventory and logistics capabilities to capture market share from local and regional distributors [25] Management's Comments on Operating Environment and Future Outlook - Management noted strong underlying demand, tight supply chain constraints, and rapid inflation as key factors affecting the business environment [22] - The outlook remains robust, with expectations for double-digit growth for fiscal 2022 [12][51] - Management expressed confidence in achieving a low double-digit sales growth scenario for the year, supported by pricing realization and strong performance [41] Other Important Information - The company is experiencing slight negative cash flow conversion due to increased working capital needs, with expectations for improvement in the second half of fiscal 2022 [37] - Total debt at the end of the fiscal second quarter was $835 million, reflecting a $72 million increase from the previous quarter [38] Q&A Session Summary Question: Update on adjusted operating framework for the year - Management indicated that actual performance and a strong outlook contributed to the confidence in a low double-digit growth scenario [50][51] Question: Comments on pricing strategies and cultural shifts - Management highlighted efforts to build agility in the sales organization around pricing discussions, which is expected to yield long-term benefits [54][56] Question: Impact of supply chain issues on organic growth - Management confirmed that supply chain constraints are currently limiting growth, but there is pent-up demand that remains unfulfilled [60] Question: Growth within vending and addressable market size - Vending has grown about 100 basis points as a percentage of revenue, with the total addressable market for services including vending estimated to be around half of the business [62][63] Question: Update on capital allocation and working capital - Management is focused on organic reinvestment and is exploring potential bolt-on acquisitions while maintaining a strong balance sheet [75] Question: Operating leverage and future margin expectations - Management expressed confidence that operating margins could exceed 12% on mid-single-digit growth in the future, supported by Mission Critical savings [104] Question: Freight expenses and inflation impact - Freight expenses represent about 4% of sales, with management managing inflationary pressures effectively, though some risks remain for the second half of the year [110][112]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________ FORM 10-Q __________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 27, 2021 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 1-14130 ______________________ ...

Financial Performance - Net sales increased to $848.5 million in Q1 2022 from $771.9 million in Q1 2021[6,8], representing a 9.9% increase[6,8] - Gross profit increased to $352.6 million in Q1 2022 from $323.3 million in Q1 2021[6,8], with gross margin declining slightly from 41.9% to 41.6%[6,8] - Operating profit increased to $90.7 million in Q1 2022 from $53.9 million in Q1 2021[6], with operating margin increasing from 7.0% to 10.7%[6] - Adjusted operating profit increased to $96.0 million in Q1 2022 from $84.9 million in Q1 2021[8], with adjusted operating margin increasing from 11.0% to 11.3%[8] - Earnings per diluted share increased to $1.18 in Q1 2022 from $0.69 in Q1 2021[6] - Adjusted earnings per diluted share increased to $1.25 in Q1 2022 from $1.11 in Q1 2021[8] Balance Sheet and Liquidity - Free cash flow decreased to $42.5 million in Q1 2022 from $95.3 million in Q1 2021[15] - Net debt increased to $699.9 million in Q1 2022 from $437.0 million in Q1 2021[16] Strategic Initiatives - The company is targeting at least $100 million in total program savings by the end of fiscal year 2023 versus fiscal year 2019[19] - The company achieved $10 million in savings in Q1 2022 related to Mission Critical initiatives[19]

MSC Industrial Direct Co., Inc. (NYSE:MSM) Q1 2022 Earnings Conference Call December 22, 2021 8:30 AM ET Company Participants John Chironna - Vice President, Investor Relations and Treasurer Erik Gershwind - President and Chief Executive Officer Kristen Actis-Grande - Executive Vice President and Chief Financial Officer Conference Call Participants Tommy Moll - Stephens David Manthey - Baird Ryan Merkel - William Blair Chris Dankert - Loop Capital Michael McGinn - Wells Fargo Steve Barger - KeyBanc Capital ...

Financial Performance - Net sales for Q4 2021 increased by 98% to $8310 million compared to $7477 million in Q4 2020[6] - Gross profit for Q4 2021 was $3490 million or 420% of sales compared to $3111 million or 416% of sales in Q4 2020[6] - Adjusted operating profit for Q4 2021 was $969 million or 117% of sales compared to $841 million or 112% of sales in Q4 2020[8] - Earnings per diluted share for Q4 2021 were $118 compared to $094 in Q4 2020[6] - Adjusted earnings per diluted share for Q4 2021 were $126 compared to $109 in Q4 2020[8] - Net sales for fiscal year 2021 increased by 16% to $32432 million compared to $31924 million in fiscal year 2020[10] Strategic Initiatives - The company achieved $40 million in Mission Critical savings in fiscal year 2021 and increased expected total program savings to at least $100 million by fiscal year 2023[4] - The company is targeting at least $100 million in total program savings by the end of fiscal year 2023 versus fiscal year 2019[23] - The company reaffirms fiscal year 2022 incremental margin target of 20 percent[4] Balance Sheet and Liquidity - Free cash flow was $690 million in Q4 2021 compared to $1707 million in Q4 2020[17] - Net debt was $7455 million in Q4 2021 compared to $4941 million in Q4 2020[18]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ FORM 10-K __________________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 28, 2021 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to______ Commission File Number: 1-14130 __________________________________ MSC INDUSTRI ...

Financial Data and Key Metrics Changes - Sales for Q4 were $831 million, an increase of 11.1% year-over-year, with average daily sales (ADS) growth of 12.9% [33] - Gross margin for Q4 was 42%, down 30 basis points from Q3 but up 40 basis points from the previous year [34] - Adjusted operating margin was 11.7%, compared to 11.2% in the prior year [36] - GAAP earnings per share were $1.18, up from $0.94 in the same period last year, while adjusted earnings per share were $1.26, a 15.6% increase [37] - Free cash flow was $69 million in Q4, down from $171 million in the prior year [38] Business Line Data and Key Metrics Changes - Non-safety and non-janitorial product lines grew by 20%, while safety and janitorial products declined by approximately 14% [27] - Government sales declined nearly 30% due to difficult comparisons in janitorial and safety products [28] - The implant program accounted for just over 7% of company sales, up from 5% a year ago [19] Market Data and Key Metrics Changes - The demand environment remained strong, with most manufacturing end markets robust, although some softness was noted in automotive [25] - The Industrial Production (IP) index continues to show growth, indicating a positive market outlook [25] Company Strategy and Development Direction - The company is focused on its "Mission Critical" program, aiming to capture market share and restore return on invested capital (ROIC) to the high teens by fiscal 2023 [14] - The goal is to achieve at least 400 basis points of growth above the IP index by the end of fiscal 2023, with a target of 300 basis points for fiscal 2022 [23] - The company plans to deliver an additional $25 million in cost savings in fiscal 2022, building on the $40 million achieved in fiscal 2021 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for fiscal 2022, despite challenges from supply chain disruptions and inflation [23] - The company is well-positioned to navigate current challenges due to its broad product assortment and strong supplier relationships [26] - Management noted that while service levels are not yet back to pre-COVID levels, they are above most of the industry, aiding in market share capture [21] Other Important Information - The company achieved $40 million in cost savings in fiscal 2021, exceeding its original target of $25 million [18] - Inventory levels increased significantly to support customer needs amid ongoing supply chain disruptions [39] - Total debt at the end of Q4 was $786 million, reflecting a $27 million increase from the previous quarter [41] Q&A Session Summary Question: What is the outlook on price cost and inflationary cycles? - Management indicated that they are in the early stages of the inflationary cycle, with expectations for a positive price cost spread to maintain flat gross margins [61][63] Question: How will Mission Critical execution impact savings versus investments? - Management noted that savings will be narrower in the first half of the year but expected to widen in the second half [65][66] Question: What is the forecast for price inflation and pent-up demand? - Management expects continued price increases and believes pent-up demand will extend the growth runway into 2022 and possibly 2023 [80][81] Question: How does the company view free cash flow conversion? - Management acknowledged there is room to optimize free cash flow and plans to focus on balance sheet initiatives in fiscal 2022 [103] Question: What is the company's exposure to the production cycle versus MRO products? - Approximately half of revenues are from metalworking products, which are heavily leveraged to the production environment, while the rest includes MRO products [108][109]

| --- | --- | |-------|-------| | | | | | | | | | Cautionary Note Regarding Forward-Looking Statements Statements in this presentation may constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of 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 ...