MSC Industrial Direct Co., Inc. Q4 report

MSC Industrial Direct Co.,, Inc. "MSC," Melville, NY, reported financial results for its fourth fiscal quarter and full year ended September 1, 2001.


Net sales for the fourth quarter of fiscal 2001 were $207.9 million compared to $209.4 million during the same quarter last year. The fourth quarter of fiscal 2001 had fourteen weeks versus thirteen weeks in fiscal 2000. Income from operations was $17.4 million in the fourth quarter of fiscal 2001 compared to $21.8 million in the fourth quarter of fiscal 2000. Net income for the fourth quarter was $10.2 million, or $0.15 per diluted share, as compared to $12.5 million, or $0.18 per diluted share last year.


Net sales for the current year were $869.2 million compared to $831.3 million for fiscal 2000. Fiscal 2001 had fifty-three weeks versus fifty-two weeks in fiscal 2000. Income from operations for fiscal 2001 was $87.5 million, compared to $93.3 million for the same period last year. Net income for the year was $50.4 million, or $0.72 per diluted share, before a one-time, non-operating, after tax charge in the third quarter of $9.9 million, or $0.14 per diluted share for the Company's minority investment in several online MRO businesses, as compared to $52.9 million, or $0.78 per diluted share, in the same period last year.



Mitchell Jacobson, chairman & CEO, stated, "I am pleased with MSC's performance during a period of economic weakness. We gained market share during the fourth quarter with the addition of 7,000 new customers, bringing our total customer count to 315,000 as of September 1, 2001. Additionally, our national account revenues grew 23% year over year, reflecting our continued success in attracting larger customers. Furthermore, in 2001 we increased gross margin by 160 basis points, generated outstanding free cash flow of $70 million, strengthened our balance sheet by eliminating virtually all of our debt and made further improvements in managing operating costs, receivables and inventory."


Mr. Jacobson added, "Sales volumes were trending positively through late August and early September, but as expected, orders were substantially reduced immediately following September 11th. Although volumes have since improved, we have not yet returned to pre-September 11th levels and the outlook remains uncertain given the current state of the economy. Accordingly, we remain cautious and anticipate first quarter earnings per share in the range of $0.11 to $0.13. Longer-term, we are extremely confident in our prospects, particularly given our expanding market share, increased financial leverage and strong competitive position."


During the 2001 fourth quarter, the Company adopted Emerging Issues Task Force Issue 00-10; "Accounting For Shipping and Handling Fees and Costs." As a result, shipping and handling fees billed to customers are now recorded as revenue. In prior quarters, these fees were recorded as an offset to operating expenses. MSC's own shipping and handling costs have been and continue to be recorded as operating expenses. Financial information for all prior periods has been reclassified for this change and is presented on a comparable basis. These adjustments have no impact on the Company's operating income, net income or earnings per share. For clarification, net sales for the 2001 fourth quarter and fiscal year included freight revenue of $11.2 million and $45.0 million, respectively.


Click below to view condensed balance sheet.