Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q3 2023 Earnings Presentation
22 slides from Msc Industrial Direct's earnings presentation, Jun 29, 2023
Slide 1: Fiscal Third Quarter 2023 Earnings
FISCAL THIRD QUARTER 2023 EARNINGS JUNE 29, 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 present or historical fact, that address activities, events or develop
Slide 3: Fiscal Third Quarter 2023 Highlights
FISCAL THIRD QUARTER 2023 HIGHLIGHTS 11.7% average daily sales growth, roughly 11 percentage points above 1 the Industrial Production Index Reduced GAAP and adjusted operating expenses* as a percentage of sales by 2 60bps and 80bps, respectively GAAP and adjusted operating margin* both down 150bps d
Slide 4: Growth versus Industrial Production Index
INDUSTRIAL PRODUCTION INDEX (IP) MSC Total Organic Growth 3‐Month Average Expansion above IP index driven by growth initiatives, price, and end 20.0% market exposure 15.0% 10.0% Change (Year‐Over‐Year) 5.0% MSC Total Organic Sales 0.0% Growth 3-Month Average ‐5.0% ‐10.0% ‐15.0% ‐20.0% 2013 2014 2015
Slide 5: Fiscal Third Quarter 2023 Reported Results
FISCAL THIRD QUARTER 2023 REPORTED RESULTS Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $1,054.5 $428.9 $136.8 $1.78 $1.69 $958.6 $411.1 $135.4 42.9% 14.3% 40.7% 12.8% Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 20
Slide 6: Fiscal Third Quarter 2023 Adjusted Results
FISCAL THIRD 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) $428.9 $140.3 $138.6 $1.82 $1.74 $1,054.5 $411.1 $958.6 42.9% 40.7% 14.6% 13.1% Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q
Slide 7: Fiscal Third Quarter 2023 Balance Sheet and Liquidity Position
FISCAL THIRD QUARTER 2023 BALANCE SHEET AND LIQUIDITY POSITION Free Cash Flow* Net Debt (millions) (millions) $761.1 • Free cash flow* improved 98% YoY to $127M during the quarter primarily driven by $127.1 $405.9 execution across growth initiatives accretive to cash flow $64.1 and working capital b
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 Q3 FY23: $4M Targeted FY2023 Key Areas Q2 FY23: $4M Savings of $15M+ Q1 FY23: $6M $80 Sales and service Supply chain General and FY2022: $25M Administrative $60 • Targeting $15M+ in g
Slide 10: Updated Fiscal 2023 Outlook and Assumptions
UPDATED FISCAL 2023 OUTLOOK AND ASSUMPTIONS ADS Growth (YoY) • Fiscal year-to-date ADS up approximately 12% with tougher Additional Guidance comps in Q4 Prior Current • Double digit growth within National Accounts, Vending, and In-Plant fiscal year-to-date • Gross margins down 5-9% 10%-11% 100-120 b
Slide 11: Summary
SUMMARY Growing net sales roughly 11 percentage points above the Industrial 1 Production Index Growth initiatives delivering share gains and customer 2 productivity improvements Productivity initiatives on track to exceed target of $100M of gross savings 3 from fiscal 2019 through fiscal 2023 Reorie
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, Share Reclassification Proposal Costs and Restructuring and Other Costs In calculating non-GAAP financial measures, we exclude acquisition-related costs, share reclassification proposal costs, restructuring and
Slide 16: Reconciliations
RECONCILIATIONS investor.mscdirect.com 16
Slide 17: Reconciliations
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Slide 18: Reconciliations
RECONCILIATIONS investor.mscdirect.com 18
Slide 19: Reconciliations
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Slide 20: Reconciliations
RECONCILIATIONS investor.mscdirect.com 20
Slide 21: Reconciliations
RECONCILIATIONS investor.mscdirect.com 21
Slide 22: Thank You
THANK YOU MSC
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