Melville, NY - MSC Industrial Direct Co., Inc. reported financial results for its fiscal second quarter ended March 1, 2014.
Net sales for the fiscal second quarter 2014 were $661.5 million, an increase of 16.2% over net sales of $569.5 million in the same quarter a year ago. The acquired Barnes Distribution North America ("BDNA") business contributed $69.8 million to net sales in the fiscal second quarter 2014.
Excluding non-recurring costs of $8.0 million associated with the BDNA acquisition, the co-location of the Company's headquarters, and the executive separation costs, adjusted operating income for the fiscal second quarter 2014 was $89.8 million, or 13.6% of net sales, compared to $92.3 million, or 16.2% of net sales in the same quarter a year ago. GAAP operating income for the fiscal second quarter 2014 was $81.7 million, or 12.4% of net sales, compared to $90.6 million, or 15.9% of net sales in the same quarter a year ago.
Excluding the after tax effects of non-recurring costs, adjusted net income for the fiscal second quarter 2014 was $54.5 million, or $0.87 per diluted share (based on 62.1 million diluted shares outstanding), compared to $57.2 million, or $0.90 per diluted share, in the same quarter a year ago (based on 63.0 million diluted shares outstanding). The BDNA operations contributed approximately $0.04 to the fiscal second quarter 2014 EPS. GAAP net income for the fiscal second quarter 2014 was $49.5 million, or $0.79 per diluted share, compared to $56.1 million, or $0.88 per diluted share, in the same quarter a year ago.
Erik Gershwind, President and Chief Executive Officer, stated, "The manufacturing environment continues to show improvement. Despite the impact of weather disruptions, we continued to gain share in our core metalworking market and saw accelerated growth rates in our national account and government programs."
Jeff Kaczka, Executive Vice President and Chief Financial Officer, commented, "We were pleased to deliver the high end of our earnings per share guidance in the second quarter despite the weather disruptions that impacted our sales growth. Additionally, we continued to execute on our infrastructure and growth initiatives according to plan. Looking forward to fiscal third quarter, the midpoint of our guidance range for organic average daily sales growth assumes that April and May continue the underlying organic growth rates seen in March."1
Mr. Gershwind concluded, "We are executing on our share gain and infrastructure initiatives to fuel our next level of growth. We are putting in place a new growth platform in the form of BDNA with Class C products and solutions. And, most importantly, we are focusing relentlessly on helping our customers streamline their MRO supply chain to take costs out. All of that is the formula for an exciting earnings growth story in the years to come."
Outlook
MSC expects net sales for fiscal third quarter 2014 to be between $720 million and $732 million. At the midpoint, average daily sales growth, excluding BDNA, is expected to be 8.0 percent. Excluding non-recurring integration costs associated with BDNA, the Company expects adjusted diluted earnings per share for the fiscal third quarter 2014 to be between $1.03 and $1.07.
MSC expects the non-recurring costs related to the BDNA acquisition to impact GAAP diluted earnings per share by approximately $0.03 in the fiscal third quarter 2014.
The Company remains on track to achieve fiscal year 2014 adjusted operating margin consistent with its fiscal 2014 operating framework assuming a continuing moderate sales growth environment.
