Msc Industrial Direct Company, Inc. · NYSE:MSM
Msc Industrial Direct — Q1 2024 Earnings Presentation
23 slides from Msc Industrial Direct's earnings presentation, Jan 9, 2024
Slide 1: Fiscal First Quarter 2024 Earnings
FISCAL FIRST QUARTER 2024 EARNINGS JANUARY 9, 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 First Quarter 2024 Highlights
FISCAL FIRST QUARTER 2024 HIGHLIGHTS Average daily sales down 0.4% compared to the Industrial Production Index of 1 down 0.5% Operating expenses as a percentage of sales up 130 bps YoY and 115 bps on an 2 adjusted* basis due to higher depreciation, investment, and merit related costs 3 Operating mar
Slide 4: Consistently Growing Above Industrial Production Index Over the Cycle
CONSISTENTLY GROWING ABOVE INDUSTRIAL PRODUCTION INDEX (IP) OVER THE CYCLE MSC Total Organic Sales Growth Expansion above IP index driven 3-Month Average by growth initiatives, price, and 20% end market exposure MSC Total Growth (3 Mo Avg) IP Growth (3 Mo Avg) 15% 10% 5% 0% -5% -10% -15% -20% 2013 2
Slide 5: Fiscal Year 2023 ESG Report Highlights
FISCAL YEAR 2023 ESG REPORT HIGHLIGHTS Striving For a BETTER World and BETTER Tomorrow >20K lbs 1.5K tons 80% Environment Carbide recycled since 2021 through Of corrugate packaging recycled at New recycling target across all major regrind services MSC CFC’s in FY’23 distribution centers Awards & Rec
Slide 6: Disciplined Focus on Maintaining Mission Critical Momentum
DISCIPLINED FOCUS ON MAINTAINING MISSION CRITICAL MOMENTUM ENABLING CONTINUED SHARE CAPTURE VENDING IN-PLANT PUBLIC SECTOR Installed Units Program Count Average Daily Sales Up 10%+ YoY Up 35%+ YoY Up 9%+ YoY investor.mscdirect.com 6
Slide 7: Progressing on Strategic Actions to Strengthen Market Position
PROGRESSING ON STRATEGIC ACTIONS THAT WILL FURTHER STRENGTHEN MARKET POSITION AND ABILITY TO CAPTURE SHARE Web Pricing Realignment Website Enhancement Pilot program with ~30% of SKUs converted to new web pricing On track to introduce a wide range of methodology producing favorable results and target
Slide 8: Fiscal First Quarter 2024 Reported and Adjusted Results
FISCAL FIRST 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* $397.8 $393.1 $1.48 $957.7 $954.0 $116.0 $118.3 $1.45 $101.6 $103.7 $1.25
Slide 9: Fiscal First Quarter 2024 Balance Sheet and Cash Flow
FISCAL FIRST QUARTER 2024 BALANCE SHEET AND CASH FLOW Free Cash Flow* (millions) $62.7 $50.5 • Strong operating cash flow during the quarter primarily driven by working capital improvement resulting in operating cash flow conversion of 117%** • Combined with lower capital expenditures YoY which excl
Slide 10: 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 11: Completed Repurchase of Share Reclassification Dilution
COMPLETED REPURCHASE OF SHARE RECLASSIFICATION DILUTION • 2.4M* shares remain on current share repurchase authorization • Reclassification agreement resulted in dilution of ~1.9M shares and repurchased all dilutive shares ahead of expectations following: • ~650K shares repurchased in 4Q’23 • ~1.4M s
Slide 12: Maintaining Fiscal 2024 Outlook and Assumptions
MAINTAINING FISCAL 2024 OUTLOOK AND ASSUMPTIONS ADS Growth (YoY) • ~160 bps headwind from non-repeating Public Sector small capital purchase sales Additional Guidance • Assumes more normalized pricing benefits YoY 0% - 5% • Assumes industrial activity improves in early • Depreciation and amortizatio
Slide 13: Summary
SUMMARY Average daily sales down 0.4% compared to the Industrial Production Index of 1 down 0.5% Operating expenses as a percentage of sales up 130 bps YoY and 115 bps on an 2 adjusted* basis due to higher depreciation, investment, and merit related costs 3 Operating margin down 150 bps on a reporte
Slide 14: Appendix
APPENDIX MSC
Slide 15: The Next Chapter of Mission Critical Expected to Generate Favorable Results
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 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 Acquisition-Related Costs (prior year), Share Reclassification Costs, and Restructuring and Other Costs In calculating non-GAAP financial measures, we exclude acquisition-related costs (prior year), share reclassification costs, restructu
Slide 18: Reconciliations
RECONCILIATIONS investor.mscdirect.com 18
Slide 19: Reconciliations
RECONCILIATIONS investor.mscdirect.com 19
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
MSC Industrial Direct Company — Q1 2024 Earnings Presentation on 6ix