Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q4 2022 Earnings Presentation
24 slides from Msc Industrial Direct's earnings presentation, Oct 20, 2022
Slide 1: Fiscal Fourth Quarter and Full Year 2022 Earnings Presentation
Fiscal Fourth Quarter and Full Year 2022 Earnings Presentation OCTOBER 20, 2022
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 Fourth Quarter 2022 Highlights
Fiscal Fourth Quarter 2022 Highlights 14.0% average daily sales growth, roughly 10 percentage points above the Industrial Production Index Completed the acquisitions of Engman-Taylor and Tower Fasteners Reduced operating expenses as a percentage of sales by 200 bps Strong year over year operating ma
Slide 4: Fiscal Fourth Quarter 2022 Reported Results
Fiscal Fourth Quarter 2022 Reported Results Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $1.86 $1,022.2 $831.0 $428.2 $1.18 $349.0 $144.0 42.5% 42.0% $91.2 41.9% 38.1% 14.1% 11.0% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q
Slide 5: Fiscal Year 2022 Reported Results
Fiscal Year 2022 Reported Results Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $468.7 $3,691.9 $6.06 $3,243.2 $301.8 $1,558.2 $3.87 $1,333.5 42.5% 12.7% 9.3% 42.2% 38.1% 41.1% FY 2021 FY 2022 FY 2021 FY 2022 FY 20
Slide 6: Fiscal Fourth Quarter 2022 Adjusted Results
Fiscal Fourth Quarter 2022 Adjusted Results* Net Sales Gross Profit Adj. Operating Profit Adj. Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $1.79 $138.6 $1,022.2 $831.0 $428.2 $1.26 $96.9 $349.0 42.5% 13.6% 42.0% 42.0% 41.9% 11.7% Q4 2021 Q4 2022 Q4 202
Slide 7: Fiscal Year 2022 Adjusted Results
Fiscal Year 2022 Adjusted Results* Net Sales Gross Profit Adj. Operating Profit Adj. Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $475.3 $3,691.9 $6.15 $3,243.2 $371.8 $4.81 $1,558.2 $1,363.6 42.5% 12.9% 42.0% 42.2% 11.5% 42.0% FY 2021 FY 2022 FY 2021 F
Slide 8: MSC Total Organic Growth vs Industrial Production Index
Industrial Production Index (IP) MSC Total Organic Growth 3-Month Average 20.0% 15.0% 10.0% Change (Year-Over-Year) 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 MSC Total Growth (3 Mo Avg) IP Growth (3 Mo Avg) 8
Slide 9: Fiscal 2022 Actual Results vs Framework
Fiscal 2022 Framework – Adjusted ADS Growth (YoY) Adjusted Operating Margin Range1 Low-double digits 12.5% - 13.1% High-single digits 12.0% - 12.6% Mid-single digits 11.7% - 12.3% Fiscal 2022 Actual Results ADS Growth (YoY) Adjusted Operating Margin2 10.7% 12.9% 1Excludes approximately $5-$10 millio
Slide 10: Fiscal Fourth Quarter 2022 Balance Sheet and Liquidity Position
Fiscal Fourth Quarter 2022 Balance Sheet and Liquidity Position Free Cash Flow* (millions) Net Debt $94.5 (millions) $69.0 $745.5 $751.1 Q4 2021 Q4 2022 $184.8 $170.7 Q4 2021 Q4 2022 FY 2021 FY 2022 • Free cash flow increase for the quarter reflects increased net income Q4 2022 vs. Q4 2021. • Net de
Slide 11: 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 KEY AREAS $100 Targeted FY2023 Savings of $15M+ $80 FY2022: $25M $60 Sales and service Supply chain General & Administrative • FY22 targets of $25M savings and $15M investments $40 achieve
Slide 12: Fiscal 2023 Outlook and Assumptions
Fiscal 2023 Outlook and Assumptions Additional Items ADS Growth (YoY) 5% – 9% • Gross margins down 40 to 70 bps YoY • Depreciation & amortization expense of $77-$82M • Interest expense of $33-$38M • Operating cashflow conversion > 100% Adjusted Operating Margin1 12.7% to 13.3% • $15M+ of additional
Slide 13: Summary
Summary Sustaining high growth in a strong but dynamic environment Growth initiatives delivering share gains and customer productivity improvements Mission Critical initiatives on track with ROIC improvement ahead of schedule Finished fiscal 2022 in the top tier of the adjusted annual operating marg
Slide 14: Appendix
Appendix MSC
Slide 15: 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 and Supply General and Metalworking Portfolio Solutions E-commerce Customers and Services Chain Administrative St
Slide 16: 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 17: Reconciliations
Reconciliations Non-GAAP Financial Measures Results Excluding Impairment Loss and Loss Recovery (prior year), Inventory Write-downs (prior year), Legal Costs (prior year), Acquisition-related Costs and Restructuring and Other Costs In calculating non-GAAP financial measures, we exclude impairment lo
Slide 18: Reconciliations
Reconciliations MSC INDUSTRIAL SUPPLY CO. AND SUBSIDIARIES Reconciliation of GAAP and Non-GAAP Financial Information Quarters and Years Ended September 3, 2022 and August 28, 2021 (dollars in thousands) GAAP Financial Measure Items Affecting Comparability Non-GAAP Financial Measure Net cash provided
Slide 19: Reconciliations
Reconciliations MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Years Ended September 3, 2022 and August 28, 2021 (dollars in thousands, except percentages) (a) Net income attributable to MSC Industrial NOPAT Income from Operations (twelve-month trailing) Ef
Slide 20: Reconciliations
Reconciliations MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Fourteen Weeks Ended September 3, 2022 Gn thousands, except percentages and per share data) GAAP Financial Non-GAAP Measure Items Affecting Comparability Financial Measure Total MSC ee Gain on S
Slide 21: Reconciliations
Reconciliations Net Sales Cost of Goods Sold Gross Profit Gross Margin Operating Expenses Operating Exp as % of Sales Restructuring and Other Costs Gain on Sale of Property Income from Operations Operating Margin Incremental Margin Total Other Expense Income before provision for income taxes Provisi
Slide 22: Reconciliations
Reconciliations MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Thirteen Weeks Ended August 28, 2021 (in thousands, except percentages and per share data) GAAP Financial Non-GAAP Measure Items Affecting Comparability Financial Measure - Legal and - . Restruc
Slide 23: Reconciliations
Reconciliations Net Sales Cost of Goods Sold Gross Profit Gross Margin Operating Expenses Operating Exp as % of Sales Impairment Loss, net Restructuring and Other Costs Income from Operations Operating Margin Total Other Expense Income before provision for income taxes Provision for income taxes Net
Slide 24: Slide 24
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