MSC Industrial Direct (US:MSM)2021-07-07 18:58Financial Performance - Net sales for the thirteen weeks ended May 29, 2021, were $866.3 million, an increase of 3.1% compared to $835.0 million for the same period in 2020[16] - Gross profit for the thirteen weeks ended May 29, 2021, was $366.5 million, representing a gross margin of 42.3%, compared to $354.0 million and a gross margin of 42.4% in the prior year[16] - Net income attributable to MSC Industrial for the thirteen weeks ended May 29, 2021, was $94.4 million, or $1.68 per diluted share, compared to $77.7 million, or $1.40 per diluted share, for the same period in 2020[16] - Comprehensive income for the thirteen weeks ended May 29, 2021, was $99.3 million, compared to $74.0 million for the same period in 2020[19] - For the thirty-nine weeks ended May 29, 2021, net income was $152.06 million, a decrease of 23.7% compared to $199.12 million for the same period in 2020[26] Assets and Liabilities - Total current assets increased to $1.31 billion as of May 29, 2021, from $1.24 billion as of August 29, 2020[14] - Total liabilities rose to $1.27 billion as of May 29, 2021, compared to $1.06 billion as of August 29, 2020[14] - The company’s total assets as of May 29, 2021, were $2.42 billion, up from $2.38 billion as of August 29, 2020[14] - Total shareholders' equity attributable to MSC Industrial was $1.14 billion as of May 29, 2021, down from $1.29 billion a year earlier[23] - Cash and cash equivalents decreased to $27.43 million at the end of the period from $353.39 million at the end of the previous year[26] Operating Expenses - Operating expenses for the thirteen weeks ended May 29, 2021, were $257.3 million, an increase from $242.8 million in the same period of 2020[16] - The company reported an impairment loss of $20.8 million for the thirteen weeks ended May 29, 2021, compared to no impairment loss in the same period of the previous year[16] - The company incurred inventory write-downs of $30.09 million related to PPE during the second quarter of fiscal year 2021[32] - Total restructuring costs for the thirteen weeks ended May 29, 2021, amounted to $1,349, compared to $1,359 for the same period in 2020, while total costs for the thirty-nine weeks ended May 29, 2021, were $26,943, significantly higher than $5,871 in 2020[109] Cash Flow and Dividends - Cash provided by operating activities was $139.36 million, a decrease of 35.0% from $214.94 million in the prior year[26] - The company declared regular cash dividends of $0.75 per Class A and Class B common share, consistent with the previous year[23] - Payments of special cash dividends were $195.35 million, a decrease of 29.6% from $277.63 million in the prior year[26] Stock and Share Repurchase - The company repurchased $50.70 million of common stock during the period, compared to $3.24 million in the previous year[26] - The Company announced a new share repurchase program to purchase up to 5,000 shares, replacing the previous Repurchase Plan[102] - The Company approved a Share Repurchase Program to purchase up to 5,000 shares, replacing the previous plan authorized in 1999[124] Debt and Credit Facilities - As of May 29, 2021, the total debt of MSC Industrial Direct Co., Inc. was $756.241 million, an increase from $615.551 million as of August 29, 2020, representing a 22.8% increase[72] - Borrowings under credit facilities amounted to $505 million, a decrease from $1.01 billion in the prior year[26] - The weighted-average interest rate on borrowings under all credit facilities was 1.18% as of May 29, 2021, down from 1.42% as of August 29, 2020[81] - The Company has a $600 million committed Revolving Credit Facility, which matures on April 14, 2022[74] Market and Strategic Initiatives - The company anticipates continued growth in net sales and profitability, driven by strategic investments and market expansion initiatives[8] - The Company’s net sales by customer end-market for the thirteen weeks ended May 29, 2021, showed that 48% came from Heavy Manufacturing, up from 40% in the same period of 2020[51] - The impact of COVID-19 has led to uncertainties in future operations, with potential shortages in fuel, labor, and certain products affecting the business[32] Tax and Legal Matters - The effective tax rate for the thirty-nine-week period ended May 29, 2021, was 24.6%, a decrease from 25.0% for the same period in 2020, primarily due to higher tax benefits from stock-based compensation[118] - The company continues to pursue legal avenues for recovery of remaining prepayments related to PPE products[111]