Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q1 2021 Earnings Presentation
24 slides from Msc Industrial Direct's earnings presentation, Jan 6, 2021
Slide 1: Fiscal First Quarter 2021 Earnings Presentation
Fiscal First Quarter 2021 Earnings Presentation JANUARY 6, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 anticipat
Slide 3: Fiscal First Quarter 2021 Overview
Fiscal First Quarter 2021 Overview Progress on Mission Critical* driving improving sales trend and productivity gains in continued uncertain macro environment Solid underlying gross margins in the quarter due to price and purchase cost performance despite headwinds from some large PPE sales Operatin
Slide 4: Fiscal First Quarter 2021 Reported Results
Fiscal First Quarter 2021 Reported Results Net Sales Operating Profit Earnings (millions) (millions and % of sales) (per diluted share) $823.6 $100.00 $90.3 12.00% $1.40 $771.9 $90.00 $1.18 11.00% $1.20 $80.00 11.0% 10.00% $1.00 $70.00 $53.9 $0.69 $60.00 9.00% $0.80 $50.00 7.0% 8.00% $0.60 $40.00 $3
Slide 5: Fiscal First Quarter 2021 Adjusted Results
Fiscal First Quarter 2021 Adjusted Results* Net Sales Adjusted Operating Profit Adjusted Earnings (millions) (millions and % of sales) (per diluted share) $823.6 $100.00 12.00% $1.40 $771.9 $92.9 $1.21 $1.10 $95.00 $1.20 11.3% $84.6 $90.00 11.50% $1.00 $85.00 $80.00 11.0% $0.80 $75.00 11.00% $0.60 $
Slide 6: Industrial Production Index (IP)
Industrial Production Index (IP) Surge in Surge Safety in Janitorial and Safety and Janitorial Product Sales Product Sales 6
Slide 7: Fiscal First Quarter Balance Sheet and Liquidity Position
Fiscal First Quarter Balance Sheet and Liquidity Position Free Cash Flow* Net Debt (millions) (millions) • Improved free cash flow generation on accounts payable management and the deferral of payroll taxes under the CARES Act • Maintained balanced capital allocation philosophy and a conservative ba
Slide 8: Mission Critical: Strong Progress on Cost Savings
Mission Critical: Strong Progress on Cost Savings Total gross savings: KEY AREAS $90M – $100M versus fiscal 2019 $100 $80 Sales and service Supply chain General & Administrative $60 • Solid progress on stated goal of ~$25M in gross cost savings in FY21 with $8M achieved in Q1 • Reaffirming total gro
Slide 9: 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% At least 400 bps of share capture 2%-3% market growth 2020 2023 -5.1% * See appendix for non-GAAP reconciliations. 9
Slide 10: Summary
Summary Focused on executing in an uncertain environment and remain committed to serving our customers Encouraged by momentum as evidenced by improving numbers and execution of the projects behind them Implementation of Mission Critical initiatives will drive above market growth and improve profits
Slide 11: Mission Critical Overview and Fiscal 2021 Framework
Mission Critical Overview and Fiscal 2021 Framework 11
Slide 12: 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 13: Mission Critical: Reaccelerate Market Share
Mission Critical: Reaccelerate Market Share 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 Strength E
Slide 14: 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 15: 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 asset impairment charge. 15
Slide 16: 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 $15 million to $20 million of restructuring and other related costs and $26.7 million asset impairmen
Slide 17: Appendix
Appendix MSC
Slide 18: Reconciliations
Reconciliations Non-GAAP Financial Measures • Free Cash Flow (“FCF”) Our measure of “FCF” meets the definition of a non-GAAP financial measure. FCF is used in addition to and in conjunction with results presented in accordance with Generally Accepted Accounting Principles (“GAAP”) and FCF should not
Slide 19: Reconciliations
Reconciliations • Return on Invested Capital (“ROIC”) ROIC is calculated using a non-GAAP financial measure. We calculate ROIC by dividing non-GAAP net operating profit after tax (“NOPAT”) by average invested capital, a GAAP measure. NOPAT is defined as tax effected income from operations. Average i
Slide 20: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Information Thirteen Weeks Ended November 28, 2020 and November 30, 2019 (dollars in thousands) GAAP Measure Items Affecting Comparability Non-GAAP Measure Net cash provided by operating activities Expendi
Slide 21: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Information Thirteen Weeks Ended November 28, 2020 (dollars in thousands, except per share data) GAAP Measure Items Affecting Comparability Non-GAAP Measure MSC Excluding Impairment Loss and Total MSC Rest
Slide 22: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Information Thirteen Weeks Ended November 30, 2019 (dollars in thousands, except per share data) GAAP Measure Items Affecting Comparability Non-GAAP Measure MSC Excluding Restructuring and Other Related To
Slide 23: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Information As of August 29, 2020 (dollars in thousands) Fiscal Year Ended August 29, 2020 (a) Net income attributable to MSC Industrial (twelve-month trailing) $ 251,117 NOPAT Income from Operations (twel
Slide 24: Thank You
THANK YOU JOHN CHIRONNA VICE PRESIDENT, INVESTOR RELATIONS AND TREASURER 704-987-5231 chironnj@mscdirect.com
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