Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q2 2021 Earnings Presentation
24 slides from Msc Industrial Direct's earnings presentation, Apr 7, 2021
Slide 1: Fiscal Second Quarter 2021 Earnings Presentation
Fiscal Second Quarter 2021 Earnings Presentation APRIL 7, 2021
Slide 2: Cautionary Note Regarding Forward-Looking Statements
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
Slide 3: Fiscal Second Quarter 2021 Overview
Fiscal Second Quarter 2021 Overview Progress on Mission Critical* and macro environment driving improved sales trend and productivity gains Excluding the PPE-related inventory write-down, solid underlying gross margins due to price and purchase cost performance Despite the decline in sales, operatin
Slide 4: Fiscal Second Quarter 2021 Reported Results
Fiscal Second Quarter 2021 Reported Results Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $786.1 $774.0 $77.7 $331.1 $1.00 $294.8 42.1% 9.9% $28.0 $0.32 38.1% 3.6% Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2
Slide 5: Fiscal Second Quarter 2021 Adjusted Results
Fiscal Second Quarter 2021 Adjusted Results* Net Sales Adj. Gross Profit Adj. Operating Profit Adj. Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $786.1 $79.6 $80.5 $774.0 $1.02 $1.03 $331.1 $324.8 10.1% 10.4% 42.1% 42.0% Q2 2020 Q2 2021 Q2 2020 Q2 2021
Slide 6: MSC Performance vs Industrial Production Index
Industrial Production Index (IP) MSC Performance vs Industrial Production Index 25% Surge in Safety and Janitorial 20% Product Sales 15% Change (Year-Over-Year) 10% 5% 0% -5% -10% -15% -20% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 MSC Organic Sales Growth IP Growth 6
Slide 7: Fiscal Second Quarter 2021 Balance Sheet and Liquidity Position
Fiscal Second Quarter 2021 Balance Sheet and Liquidity Position Free Cash Flow* Net Debt (millions) (millions) • Free cash flow generation reflects increased inventory and seasonal accounts receivable growth • Maintained balanced capital allocation philosophy and enhanced liquidity * Represents a no
Slide 8: Mission Critical: Strong Progress on Cost Savings
Mission Critical: Strong Progress on Cost Savings Total Gross Savings Target: KEY AREAS $90M – $100M by end of FY23 versus FY19 $100 $80 Sales and service Supply chain General & Administrative $60 • Now expect > $25M in gross cost savings in FY21; higher anticipated growth investments expected to ke
Slide 9: Fiscal 2021 Framework – Adjusted
Fiscal 2021 Framework – Adjusted* Revenue Growth (YoY) Adjusted Operating Margin Range (%) Low single digits 11.5% - 11.9% Flat 11.2% - 11.6% Low single digits 11.0% - 11.4% * Excludes approximately $35 million to $40 million of restructuring and other charges, $26.7 million in an asset impairment,
Slide 10: Fiscal Year 2023 Targets
Fiscal Year 2023 Targets Mission Critical Reaccelerate market share capture Objectives Grow profits faster than sales Sales Growth Return on Invested Capital (ROIC)* ~6%-7% High-Teens At least 400 bps 14.1% of share capture 2%-3% market growth FY2020 FY2023 FY2020 FY2023 -5.1% * Represents a non-GAA
Slide 11: Summary
Summary Focused on executing in an improving environment and remain committed to serving our customers Encouraged by momentum as evidenced by improving results and execution of the projects behind them Implementation of Mission Critical initiatives expected to drive above market growth and improve p
Slide 12: Appendix
Appendix MSC
Slide 13: Overview of Mission Critical
Overview of Mission Critical OBJECTIVE: OBJECTIVE: Reaccelerate market Grow profits faster share capture than sales KEY PRIORITIES KEY AREAS Solidify Leverage Expand Grow Diversify Sales & Supply General & Metalworking Portfolio Solutions E-commerce Customers & Services Chain Administrative Strength
Slide 14: Mission Critical: Reaccelerate Market Share Capture
Mission Critical: Reaccelerate Market Share Capture OBJECTIVE: Reaccelerate market INITIATIVES share capture KEY PRIORITIES • Build on talented team of metalworking specialists Solidify Leverage Expand Grow Diversify Metalworking Portfolio Solutions E-commerce Customers & • Leverage exclusive MSC St
Slide 15: Mission Critical: Grow Profits Faster than Sales
Mission Critical: Grow Profits Faster than Sales OBJECTIVE: INITIATIVES Grow profits faster than sales KEY AREAS • Optimize distribution center network • Renegotiated supplier contracts Sales & Supply General & Services Chain Administrative • Redesigned talent acquisition approach • Reduced long-ter
Slide 16: Fiscal 2021 Framework
Fiscal 2021 Framework* Revenue Growth (YoY) Operating Margin Range (%) Low single digits 10.2% - 10.6% Flat 9.9% - 10.3% Low single digits 9.6% - 10.0% * Includes $26.7 million in an asset impairment. 16
Slide 17: Reconciliations
Reconciliations Non-GAAP Financial Measures Free Cash Flow (“FCF”) FCF is a non-GAAP financial measure. FCF is used in addition to and in conjunction with results presented in accordance with accounting principles generally accepted in the United States (“GAAP”), and FCF should not be relied upon t
Slide 18: Reconciliations
Reconciliations Results Excluding Impairment Loss, Restructuring Costs, Inventory Write-downs, and Other Charges To supplement MSC Industrial’s unaudited selected financial data presented consistent with accounting principles generally accepted in the United States (“GAAP”), the Company discloses c
Slide 19: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Financial Information Thirteen and Twenty-Six Weeks Ended February 27, 2021 and February 29, 2020 (dollars in thousands) GAAP Measure Items Affecting Comparability Non-GAAP Measure Net cash provided by ope
Slide 20: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Financial Information Thirteen Weeks Ended February 27, 2021 (dollars in thousands, except percentages and per share data) Non-GAAP Financial GAAP Financial Measure Items Affecting Comparability Measure Le
Slide 21: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Financial Information Twenty-Six Weeks Ended February 27, 2021 (dollars in thousands, except percentages and per share data) Non-GAAP Financial GAAP Financial Measure Items Affecting Comparability Measure
Slide 22: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Financial Information Thirteen and Twenty-Six Weeks Ended February 29, 2020 (dollars in thousands, except percentages and per share data) GAAP Financial Measure Items Affecting Comparability 1 Non-GAAP Fin
Slide 23: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Financial Information As of August 29, 2020 (dollars in thousands, except percentages) Fiscal Year Ended August 29, 2020 (a) Net income attributable to MSC Industrial (twelve-month trailing) $ 251,117 NOPA
Slide 24: Slide 24
MSC Industrial Direct — Q2 2021 Earnings Presentation on 6ix