MSC Industrial Direct (MSM) - 2025 Q2 - Quarterly Report

Financial Performance - Net sales for the thirteen weeks ended March 1, 2025, were $891.7 million, a decrease of 4.7$935.3 million for the same period in 2024[15]. - Gross profit for the thirteen weeks ended March 1, 2025, was $365.2 million, down 6.0$388.6 million in the prior year[15]. - Net income attributable to MSC Industrial for the thirteen weeks ended March 1, 2025, was $39.3 million, a decline of 36.5$61.8 million in the same period last year[15]. - Basic net income per share for the thirteen weeks ended March 1, 2025, was $0.70, compared to$1.10 for the same period in 2024, representing a decrease of 36.4%[15]. - For the twenty-six weeks ended March 1, 2025, net income was $84.841 million, a decrease of 34.9$130.693 million for the same period in 2024[22]. - Comprehensive income attributable to MSC Industrial for the thirteen weeks ended March 1, 2025, was $36.8 million, down from$61.8 million in the prior year[17]. Assets and Liabilities - Total current assets increased slightly to $1,194.4 million as of March 1, 2025, from$1,188.1 million as of August 31, 2024[13]. - Total liabilities rose to $1,097.6 million as of March 1, 2025, compared to$1,061.0 million as of August 31, 2024[13]. - The company’s total assets remained stable at $2,462.2 million as of March 1, 2025, compared to$2,462.3 million as of August 31, 2024[13]. - Total shareholders' equity attributable to MSC Industrial was $1.356 billion as of March 1, 2025, down from$1.390 billion as of March 2, 2024[20]. Cash Flow and Dividends - Cash and cash equivalents at the end of the period increased to $41.276 million from$22.227 million year-over-year[22]. - Regular cash dividends declared on Class A Common Stock were $94.933 million for the twenty-six weeks ended March 1, 2025, slightly up from$93.964 million in 2024[22]. - Total cash dividends paid were $1.70 per share, totaling$94,933 for the twenty-six-week period ended March 1, 2025, compared to $1.66 per share totaling$93,964 for the same period in 2024[79]. Operating Expenses - Operating expenses for the thirteen weeks ended March 1, 2025, were $301.6 million, an increase of 3.4$291.2 million in the prior year[15]. - Depreciation and amortization expenses increased to $44.671 million for the twenty-six weeks ended March 1, 2025, compared to$40.372 million in 2024[22]. - Total restructuring and other costs amounted to $1,406 for the thirteen-week period and$3,750 for the twenty-six-week period ended March 1, 2025, compared to $6,181 and$7,097 for the same periods in 2024, respectively[87]. Stock and Share Repurchase - The company repurchased $30.541 million of Class A Common Stock during the twenty-six weeks ended March 1, 2025, compared to$148.677 million in the same period of 2024[22]. - The Company repurchased 158 shares of Class A Common Stock for $12,469 during the thirteen-week period ended March 1, 2025, and 377 shares for$30,541 during the twenty-six-week period[76]. - The Company had $213,750 outstanding under its Uncommitted Credit Facilities as of March 1, 2025, compared to$209,500 as of August 31, 2024[70]. Market Conditions and Future Outlook - The company anticipates continued challenges in the market, including supply chain disruptions and competition, which may impact future performance[8]. - The company is currently evaluating the impact of new accounting standards on its disclosures, with no expected material impact on financial statements[28]. Customer Base and Revenue Sources - The Company serves a diverse customer base with 59% of revenue from heavy manufacturing for the thirteen weeks ended March 1, 2025[40]. - Revenue from the United States accounted for 95% of total revenue for both the thirteen and twenty-six weeks ended March 1, 2025[43]. - National account customers represented 37% of total revenue for both the thirteen weeks ended March 1, 2025, and March 2, 2024[41]. Tax and Legal Matters - The effective tax rate increased to 24.5% for the twenty-six-week period ended March 1, 2025, up from 23.7% for the same period in 2024, primarily due to a lower tax benefit from stock-based compensation[89]. - A class action complaint was filed against the company on March 14, 2025, alleging breaches of fiduciary duties, but the company believes it has substantial defenses[92].