MSC Industrial Supply reported its 2021 fourth quarter and full-year financial results on Oct. 20 for its fiscal year that ended Aug. 28, and the figures illustrated strong momentum for the metalworking and MRO supplies distributor and the markets it serves.
For its June-August Q4 period, MSC reported total sales of $831 million, up 11.1 percent year-over-year. Average daily sales growth during the quarter of 12.9 percent was about 500 basis points above the Industrial Production Index.
The company's Q4 operating profit of $91 million jumped 25.1 percent as margin improved from 9.8 percent to 11.0 percent, while net profit of $66 million likewise jumped 25.6 percent. By month, MSC's daily sales growth in the quarter was 15.2 percent in June, 11.2 percent in July and 11.8 percent in August. The company's September sales growth was 11.1 percent, a reversal of an 8.5 percent decline a year earlier.
The strong growth came as the company's sales of safety and janitorial products declined 14 percent year-over-year during Q4 while sales for the rest of the business improved 20 percent. Meanwhile, the company's gross profit improved 40 basis points in the quarter.
"In addition to revenue growth, I am encouraged by several aspects of our fiscal fourth quarter performance," said Kristen Actis-Grande, MSC's CFO. "We responded to a robust inflationary environment with pricing actions that enabled us to largely offset the seasonal headwinds in gross margins."
Other notable stats from MSC's Q4:
- By customer type, average daily sales to Manufacturing customers jumped 21.8 percent year-over-year, while sales to non-manufacturing customers fell 3.2 percent
- Within that, year-over-year sales by customer type were as follows:
- Manufacturing Heavy: +49%
- Manufacturing Light: +21%
- Government: +7%
- Retail/Wholesale: +7%
- Commercial Services: +4%
- Other: +12%
- Geographically, sales by region increased 11.4 percent in the Midwest (0.8 percent in Q3); increased 9.7 percent in the Northeast (-4.3); increased 15.4 percent in the Southeast (3.5); increased 8.7 percent in the West (-0.3); and increased 27.0 percent in International & Other (33.1).
- Excluding subsidiaries All Integrated Systems, MSC Mexico and Wm. F. Hurst, (acquired this past June) MSC's Q4 e-commerce sales total $505.5 million, or 60.8 percent of all sales — up from 60.2 percent in Q3.
- MSC ended Q4 with a total associate headcount of 6,571, up 277 from Q3 — with nearly all of that addition coming from the Hurst and MSC Mexico acquisitions.
For for its full fiscal 2021, MSC reported total sales of $3.24 billion, up 1.6 percent from 2020. The company's gross profit margin of 41.1 percent declined 100 basis points, which included a $30.1 million writedown of inventory related to PPE in fiscal Q2. MSC's 2021 operating profit of $302 million on margin of 9.3 percent trailed 2020's $351 million and 11.0 percent, respectively, with 2021's figures hampered by the aforementioned inventory writedown, $31.4 million of restructuring, a $5.9 million impairment loss and $2.6 million of nonrecurring legal & acquisition costs.
MSC's 2021 net profit was $217 million, down 13.6 percent from 2020.
MSC ended its fiscal 2021 with net debt of $745.5 million, up from $494 million at the end of 2020.
The company said its Mission Critical cost savings program netted about $17 million in savings during fiscal 2021