Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q1 2023 Earnings Presentation
20 slides from Msc Industrial Direct's earnings presentation, Jan 5, 2023
Slide 1: Fiscal First Quarter 2023 Earnings
FISCAL FIRST QUARTER 2023 EARNINGS JANUARY 5, 2023
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 First Quarter 2023 Highlights
FISCAL FIRST QUARTER 2023 HIGHLIGHTS 12.9% average daily sales growth, roughly 9 percentage points above 1 the Industrial Production Index 2 Reduced operating expenses as a percentage of sales by 100 bps Strong year over year operating margin improvement; GAAP and 3 adjusted up approximately 140 bps
Slide 4: MSC Growth vs Industrial Production Index
INDUSTRIAL PRODUCTION INDEX (IP) MSC Total Organic Growth 3‐Month Average Above market growth driven by growth 20.0% initiatives, price, and end market exposure 15.0% 10.0% Change (Year‐Over‐Year) MSC Total 5.0% Organic Growth 0.0% 3-Month Average ‐5.0% ‐10.0% ‐15.0% ‐20.0% 2012 2013 2014 2015 2016
Slide 5: Fiscal First Quarter 2023 Reported Results
FISCAL FIRST QUARTER 2023 REPORTED RESULTS Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $397.8 $1.45 $116.0 $957.7 $352.6 $1.18 $848.5 $90.7 41.6% 12.1% 41.5% 10.7% Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023
Slide 6: Fiscal First Quarter 2023 Adjusted Results
FISCAL FIRST QUARTER 2023 ADJUSTED RESULTS* Adj. Operating Net Sales Gross Profit Adj. Earnings Profit (millions) (millions and % of sales) (per diluted share) (millions and % of sales) $397.8 $1.48 $118.3 $957.7 $352.6 $1.25 $848.5 $96.0 41.6% 41.5% 12.3% 11.3% Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 20
Slide 7: Fiscal First Quarter 2023 Balance Sheet and Liquidity Position
FISCAL FIRST QUARTER 2023 BALANCE SHEET AND LIQUIDITY POSITION Free Cash Flow* Net Debt (millions) (millions) $753.8 $699.9 • Free cash flow increase for the quarter reflects increased net $50.5 $42.5 income Q1 2023 vs. Q1 2022 • Net debt increased $54 million to support working capital growth, shar
Slide 8: Clear Capital Allocation Priorities
CLEAR CAPITAL ALLOCATION PRIORITIES Future Priorities Growth Spend 6% Growth 12% • Drive profitability with growth investments 36% • Pursue margin accretive deals through strategic M&A Share Repurchases and Dividends ~$1.32B 8% M&A CapEx • $1B in dividends since fiscal 2020 CAPITAL DEPLOYED (FY 2020
Slide 9: Mission Critical: Strong Progress on Cost Savings
MISSION CRITICAL: STRONG PROGRESS ON COST SAVINGS Total Gross Savings Target: >$100M by end of FY23 versus FY19 $100 Targeted FY2023 Savings of $15M+ Key Areas Q1 FY23: $6M $80 Sales and service Supply chain General and FY2022: $25M Administrative $60 • Minimum $15M in gross savings in FY23 • Target
Slide 10: Fiscal 2023 Outlook and Assumptions
FISCAL 2023 OUTLOOK AND ASSUMPTIONS Additional Guidance Fiscal 2023 Assumptions • Gross margins down • FY23 includes 6 less selling days vs. FY22 40 to 70 bps YoY • Acquisitions expected to dilute gross margins by 30 to 40 bps 12.7–13.3% • Depreciation and and operating margins by roughly 20 bps Adj
Slide 11: Summary
SUMMARY 1 Growing roughly 9 percentage points above the Industrial Production Index Growth initiatives delivering share gains and customer 2 productivity improvements 3 Productivity initiatives on track to achieve at least $100M of gross savings 4 ROIC goal of high teens achieved ahead of schedule R
Slide 12: Appendix
APPENDIX MSC
Slide 13: Overview of Mission Critical
OVERVIEW OF MISSION CRITICAL Reaccelerate Market Share Capture Grow Profits Faster Than Sales KEY PRIORITIES KEY AREAS Solidify Leverage Expand Grow Diversify Sales and Supply Chain General and Metalworking Portfolio Solutions E-commerce Customers and Services Administrative Strength End Markets GOA
Slide 14: Reconciliations
RECONCILIATIONS Non-GAAP Financial Measures To supplement MSC’s unaudited selected financial data presented consistent with accounting principles generally accepted in the United States (“GAAP”), the Company discloses certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP ope
Slide 15: Reconciliations
RECONCILIATIONS Non-GAAP Financial Measures Results Excluding Acquisition-Related Costs and Restructuring and Other Costs In calculating non-GAAP financial measures, we exclude acquisition-related costs, restructuring and other costs and tax effects. Management makes these adjustments to facilitate
Slide 16: Reconciliations
RECONCILIATIONS MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Thirteen Weeks Ended December 3, 2022 and November 27, 2021 (dollars in thousands) GAAP Measure Items Affecting Comparability Non-GAAP Measure Net cash provided by operating activities Expenditu
Slide 17: Reconciliations
RECONCILIATIONS MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Twelve Months Ended December 3, 2022 (In thousands, except percentages) Twelve Months Ended December 3, 2022 (a) Net income attributable to MSC Industrial (twelve-month trailing) $ 355,033 NOPAT
Slide 18: Reconciliations
RECONCILIATIONS MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Thirteen Weeks Ended December 3, 2022 (In thousands, except percentages and per share data) GAAP Financial Non-GAAP Measure Items Affecting Comparability Financial Measure Restructuring and Acqu
Slide 19: Reconciliations
RECONCILIATIONS MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Thirteen Weeks Ended November 27, 2021 (In thousands, except percentages and per share data) Items Affecting Non-GAAP Financial GAAP Financial Measure Comparability Measure Adjusted Total MSC To
Slide 20: Thank You
THANK YOU MSC
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