Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q3 2024 Earnings Presentation
23 slides from Msc Industrial Direct's earnings presentation, Jul 2, 2024
Slide 1: Fiscal Third Quarter 2024 Earnings
FISCAL THIRD QUARTER 2024 EARNINGS JULY 2, 2024
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 2024 Highlights
FISCAL THIRD QUARTER 2024 HIGHLIGHTS Average daily sales down 7.1% YoY (compared to the Industrial Production Index down 0.2%) driven by an 1 approximately 300 bps headwind from non-recurring public sector orders and ongoing softness in heavy manufacturing verticals 2 Gross margin of 40.9% was up 20
Slide 4: Taking Action to Return Growth Well Above Industrial Production
TAKING ACTION TO RETURN GROWTH WELL ABOVE INDUSTRIAL PRODUCTION MSC Total Organic Sales Growth 3-Month Average 20% MSC Total Growth (3 Mo Avg) IP Growth (3 Mo Avg) 15% 10% 5% 0% -5% -10% Quarterly readings of Machinery & Equipment and Fabricated Metals components in the IP index have -15% declined Y
Slide 5: Corrective Actions Are Currently Underway and Making Progress
CORRECTIVE ACTIONS ARE CURRENTLY UNDERWAY AND MAKING PROGRESS Web Pricing Realignment Website Enhancements Took action in mid to late May to correct issues that arose during Continuing to make progress on the launch of web enhancements the full rollout of our web price realignment initiative that wi
Slide 6: Acquisitions to Enhance Position in Regions and Products
ACQUISITIONS TO ENHANCE POSITION IN REGIONS AND PRODUCTS SUPPORTED BY BALANCE SHEET STRENGTH Premier Tool Grinding, Inc. ApTex, Inc. Strategic M&A Criteria Under-Served Adjacent Technology & High-Growth Under-Served Adjacent Technology & High-Growth Regions Products Innovation End Markets Regions Pr
Slide 7: Fiscal Third Quarter 2024 Reported and Adjusted Results
FISCAL THIRD QUARTER 2024 REPORTED AND ADJUSTED RESULTS Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) Reported Adjusted* Reported Adjusted* $1,054.5 $979.4 $428.9 $135.4 $138.6 $1.69 $1.74 $400.4 $106.8 $111.5 $1.2
Slide 8: Fiscal Third Quarter 2024 Balance Sheet and Cash Flow
FISCAL THIRD QUARTER 2024 BALANCE SHEET AND CASH FLOW Free Cash Flow* Quarterly (millions) Year to Date $127.1 $114.0 $503.0 • Strong operating cash flow during the quarter primarily driven by working capital improvement resulting in operating cash flow conversion of 201%** $230.1 • Free cash flow*
Slide 9: Clear Capital Allocation Priorities
CLEAR CAPITAL ALLOCATION PRIORITIES Long-Term Priorities Significant capital allocation optionality after deprioritizing Dividends and Share Repurchases Strategic special dividends Deprioritizing Optionality Potential uses include organic growth investments, strategic Special Dividend M&A, debt payd
Slide 10: Maintaining Fiscal 2024 Full Year Outlook
MAINTAINING FISCAL 2024 FULL YEAR OUTLOOK ADS Growth (YoY) Fiscal Fourth Quarter Assumptions Additional Guidance • YoY headwind of approximately 300 bps in the quarter related to non-recurring public sector orders in prior year Prior Updated • Depreciation and amortization • Expect ADS to be approxi
Slide 11: Summary
SUMMARY Average daily sales down 7.1% YoY (compared to the Industrial Production Index down 0.2%) driven by an 1 approximately 300 bps headwind from non-recurring public sector orders and ongoing softness in heavy manufacturing verticals 2 Gross margin of 40.9% was up 20 bps YoY, though down 60 bps
Slide 12: Appendix
APPENDIX MSC
Slide 13: The Next Chapter of Mission Critical: Extensive Digital Roadmap
THE NEXT CHAPTER OF MISSION CRITICAL IS EXPECTED TO GENERATE FAVORABLE RESULTS ACROSS THE BUSINESS OVER THE CYCLE Maintaining Momentum Performance Metrics Over the Cycle Extensive Digital Roadmap • Win in Metalworking • Drive Innovative Solutions • Expand Share of Wallet Across • Further Penetrate A
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 operating profit, free cas
Slide 15: Reconciliations
RECONCILIATIONS Non-GAAP Financial Measures Results Excluding Restructuring and Other Costs, Acquisition-Related Costs, and Share Reclassification Costs In calculating non-GAAP financial measures, we exclude restructuring and other costs, acquisition-related costs, share reclassification costs, and
Slide 16: Reconciliations
RECONCILIATIONS investor.mscdirect.com 16
Slide 17: Reconciliations
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Slide 18: Reconciliations
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Slide 19: Reconciliations
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Slide 20: Reconciliations
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Slide 21: Reconciliations
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Slide 22: Reconciliations
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Slide 23: Thank You
THANK YOU MSC
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