Fiscal Q4 2018 Highlights
- Net sales of $838.0 million, an increase of 11.2% YoY (9.5% increase on an ADS basis)
- Operating income of $107.8 million, an increase of 7.8% YoY
- Operating margin of 12.9% (13.8% excluding acquisitions*)
- Diluted EPS of $1.29, versus EPS of $1.07 in the prior year quarter
Fiscal 2018 Highlights
- Net sales of $3.2 billion, an increase of 10.9 percent YoY (10.5 percent increase on an ADS basis)
- Operating income of $420.6 million, an increase of 11.0 percent YoY
- Operating margin of 13.1 percent (13.7 percent excluding acquisitions*)
- Diluted EPS of $5.80, versus $4.05 in the prior year
- Completed acquisition of AIS, a value-added production fastener distributor, on April 30, 2018
MSC INDUSTRIAL SUPPLY Co., a distributor of Metalworking and Maintenance, Repair and Operations products and services to industrial customers throughout North America, reported financial results for its fiscal 2018 fourth quarter and full year ended Sept. 1, 2018. Both periods included one additional day of operations as compared to the prior periods.
Erik Gershwind, president and chief executive officer, said, "The manufacturing environment maintained its positive momentum in the fiscal fourth quarter, while pricing remained relatively stable. Our sales performance continued to be impacted by our sales force effectiveness initiatives, but we are beginning to see positive results from our actions and expect stronger growth levels over the next couple of quarters. Growth in the quarter was slightly above our expectations, with Core customers seeing notable improvement, well ahead of company average, and our two acquisitions, DECO and AIS, continuing to perform well. Overall, there is a building excitement and confidence in our plan."
Rustom Jilla, executive vice president and chief financial officer, added, "Excluding the acquisitions, our base business operating margins for the quarter and year were up 30 and 50 basis points, respectively, as we achieved both gross margin stability and operating expense leverage. Our fourth quarter reported operating margin of 12.9 percent was down 40 basis points versus last year, entirely due to the acquisitions. Cash generation remained strong with full year Free Cash Flow* up $94 million, or up 47 percent over last year. This allowed us to increase ordinary dividends by 23 percent, acquire AIS for $88 million, buy back 2 percent of our outstanding shares, and reduce our leverage ratio slightly to 1.0 times."
Gershwind concluded, "In recent years, we have repositioned MSC from a spot buy supplier to a mission critical partner on manufacturing plant floors across North America. By focusing on products and services that are technical and high touch, we have cemented our leadership in metalworking and gained solid traction in the Class C VMI space. We also established a new platform in OEM Fasteners. Most recently, we redesigned our sales force to deliver upon the new, more complex and high-touch role that we are playing in enabling our customers to achieve higher levels of growth, productivity, and profitability. As we begin fiscal 2019, we are well positioned to capitalize on the opportunities ahead of us."