Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q2 2023 Earnings Presentation
23 slides from Msc Industrial Direct's earnings presentation, Apr 4, 2023
Slide 1: Fiscal Second Quarter 2023 Earnings
FISCAL SECOND QUARTER 2023 EARNINGS APRIL 4, 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 Second Quarter 2023 Highlights
FISCAL SECOND QUARTER 2023 HIGHLIGHTS 11.5% 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 2 160 bps Strong year over year operating margin improvement; GAAP and 3 adjusted ope
Slide 4: MSC Total Organic Sales Growth vs Industrial Production Index
INDUSTRIAL PRODUCTION INDEX (IP) MSC Total Organic Sales Growth 3‐Month Average Above market expansion driven by growth 20.0% initiatives, price, and end 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
Slide 5: Fiscal Second Quarter 2023 Reported Results
FISCAL SECOND QUARTER 2023 REPORTED RESULTS Net Sales Gross Profit Operating Profit Earnings (millions) (millions and % of sales) (millions and % of sales) (per diluted share) $396.7 $114.3 $1.41 $961.6 $366.3 $97.2 $1.25 $862.5 42.5% 11.9% 41.3% 11.3% Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023
Slide 6: Fiscal Second Quarter 2023 Adjusted Results
FISCAL SECOND 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) $396.7 $1.45 $366.3 $117.2 $1.29 $961.6 $862.5 $100.3 42.5% 41.3% 12.2% 11.6% Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2
Slide 7: Fiscal Second Quarter 2023 Balance Sheet and Liquidity Position
FISCAL SECOND QUARTER 2023 BALANCE SHEET AND LIQUIDITY POSITION Free Cash Flow* Net Debt (millions) (millions) $793.7 • Free cash flow* increase for the quarter reflects proceeds $500.1 from the $300 million accounts $325.3 receivable securitization in Q2 2023 • Net debt decreased $294 ($16.3) milli
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 Q2 FY23: $4M Targeted FY2023 Key Areas Savings of $15M+ Q1 FY23: $6M $80 FY2022: $25M Sales and service Supply chain General and Administrative $60 • Targeting $15M+ in gross savings
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, all in 2nd 40 to 70 bps YoY half 12.7–13.3% • Depreciation and • Current sales growth tracking to middle to high end of Adjusted amortization expense ran
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 achieve at least $100M of gross savings from 3 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 MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Thirteen and Twenty-Six Weeks Ended March 4, 2023 and February 26, 2022 (dollars in thousands) GAAP Measure Items Affecting Comparability Non-GAAP Measure Net cash provided by operating Expendit
Slide 17: Reconciliations
RECONCILIATIONS MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non -GAAP Financial Information Thirteen Weeks Ended March 4, 2023 (In thousands, except percentages and per share data) GAAP Financial Non-GAAP Measure Items Affecting Comparability Financial Share Total MSC Restructuring an
Slide 18: Reconciliations
RECONCILIATIONS investor.mscdirect.com 18
Slide 19: Reconciliations
RECONCILIATIONS MSC INDUSTRIAL DIRECT CO., INC. Reconciliation of GAAP and Non-GAAP Financial Information Thirteen and Twenty-Six Weeks Ended February 26, 2022 (In thousands, except percentages and per share data) GAAP Financial Measure Items Affecting Comparability Non-GAAP Financial Measure Total
Slide 20: Reconciliations
RECONCILIATIONS investor.mscdirect.com 20
Slide 21: Reconciliations
RECONCILIATIONS investor.mscdirect.com 21
Slide 22: Reconciliations
RECONCILIATIONS investor.mscdirect.com 22
Slide 23: Thank You
THANK YOU MSC
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