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For the first nine months of fiscal 2006, MSC's sales rose 13.2% to $931.7 million, compared with net sales of $823.2 million a year ago. Net income in the fiscal 2006 nine-month period was $102.3 million compared to $84.1 million in the year-ago period, an increase of 21.6% in net income.
"We are pleased to report another strong quarter for MSC," said President and CEO David Sandler. "Revenue growth of 14.3% exceeded our expectations and was seen across all our geographic regions, as well as in both the manufacturing and non-manufacturing sectors. Demand for our products remains strong and our customers are reporting solid order flow. Additionally, we were able to further expand our operating margins to 17.9%, while continuing to enhance our sales force and successfully continue the expansion of our West Coast operations."
"The fiscal 2006 third quarter was another excellent one financially for MSC," said Chuck Boehlke, executive vice president and CFO. "The consistent strength of our cash flows and our diligent cost management continue to provide MSC with a strong foundation from which to invest in our future growth, and our acquisition of J & L Industrial supply is a prime example of this."
As previously announced, the company completed the acquisition of J & L America, Inc. DBA as J & L Industrial Supply (J & L), a subsidiary of Kennametal Inc., on June 8, 2006, for $349.5 million. MSC financed a portion of the purchase price for J & L from the proceeds of a new $280 million credit facility, which was closed simultaneously with the acquisition. The acquisition is not expected to have a material impact on MSC's fiscal 2006 results, and is expected to be neutral to the company's earnings per share through most of fiscal 2007, becoming accretive towards the end of fiscal 2007.
Mr. Sandler concluded, "While energy and raw material costs continue to remain a concern among customers, pricing seems to have stabilized."
MSC Industrial Direct distributes more than 500,000 industrial products from 2,100 suppliers to 345,000 customers. MSC reaches its customers through a combination of more than 28 million direct-mail catalogs, approximately 90 branch sales offices, 565 sales people, the Internet and associations with B2B e-commerce portals.
For more details on MSC's third-quarter earnings, click here.