- Third Quarter Net Sales Rise 15.0% to $612 Million
- Third Quarter Net Income Increases 13.1% to $70.2 Million
- Third Quarter Diluted Earnings per Share Increase 13.4% to $1.10 -
Melville, NY, MSC Industrial Direct Co., one of the largest direct marketers and premier distributors of Metalworking and Maintenance, Repair and Operations ("MRO") supplies to industrial customers throughout the United States, today reported financial results for its fiscal 2012 third quarter ended May 26, 2012.
For the fiscal 2012 third quarter, net sales rose 15.0% to $612.0 million, compared with $532.4 million in the prior year period. Operating income in the fiscal 2012 third quarter increased 13.0% to $110.9 million, or 18.1% of net sales, compared with $98.1 million, or 18.4% of net sales, in the prior year period. For the third quarter of fiscal 2012, the Company reported net income of $70.2 million, an increase of 13.1% over net income of $62.1 million in the third quarter of fiscal 2011. Diluted earnings per share in the fiscal 2012 third quarter were $1.10 (based on 63.1 million diluted shares outstanding), compared to $0.97 (based on 63.6 million diluted shares outstanding) in the same period a year ago, an increase of 13.4%.
For the first nine months of fiscal 2012, net sales increased 15.6% to $1.72 billion from $1.49 billion in the first nine months of fiscal 2011. Operating income for the fiscal 2012 nine-month period was $304.2 million, or 17.7% of net sales, compared to $255.9 million, or 17.2% of net sales, in the first nine months of fiscal 2011. For the fiscal 2012 nine-month period, the Company reported net income of $190.1 million, an increase of 19.3% over net income of $159.3 million a year ago. Diluted earnings per share for the fiscal 2012 nine-month period were $3.00 (based on 62.9 million diluted shares outstanding), compared to $2.50 (based on 63.3 million diluted shares outstanding) a year ago, an increase of 20.0%.
David Sandler, Chief Executive Officer, said, "I'm very pleased with our performance this quarter. In an environment that has seen some recent leveling in growth rates, we continued to invest in our future and gained further traction with our strategic initiatives, while delivering solid earnings."
Erik Gershwind, President and Chief Operating Officer, stated, "It's clear to us that the trend of consolidating spend within our industry is speeding up as customers are recognizing the value of differentiated supply chain solutions, such as our vending and e-Commerce platforms, that will reduce their costs, save time, and increase productivity. Customers are increasingly turning to suppliers like MSC who can deliver these solutions, and we remain committed to the developments in technology and value added services that will build upon our leadership position. We are also focused on those initiatives, such as the co-location of our headquarters or our CSC as we call it, that will set the stage for efficient long-term growth. We are fortunate to have the financial resources and flexibility to achieve our goals."
Mr. Sandler concluded, "Looking ahead, we believe that the combination of digital information, e-Commerce, vending and supportive technology is clearly shifting the value equation toward those distributors with the ability to invest in these capabilities. Against this backdrop, we expect our investments will widen the gap with competitors and lock in share gains. While our growth investments may create some near-term headwinds, we expect those headwinds to abate over time and to position us for stronger growth and operating leverage in the long-term. We remain very excited about our future as we execute on our strategic plan."
Based on current market conditions, for the fiscal 2012 fourth quarter the Company expects net sales to be between $630 million and $642 million, and expects diluted earnings per share for the fourth quarter of fiscal 2012 to be between $1.05 and $1.09. Fiscal 2012 is a 53-week year for MSC and the Company's fiscal fourth quarter has an additional week. This guidance primarily reflects the additional week in the fourth quarter, projected average daily sales growth of 10.5%, typical seasonal patterns in sales and margins and investment programs.
The management of MSC will host a conference call today, at 11:00 a.m. Eastern Time, to review the Company's results for the fiscal 2012 third quarter, and to comment on current operations. The call may be accessed via the Internet on the home page of MSC's website located at: www.mscdirect.com . A replay of the conference call will be available on the Company's website through July 30, 2012.
About MSC Industrial Direct Co., Inc. MSC Industrial Direct Co., Inc. is one of the largest direct marketers and premier distributors of Metalworking and Maintenance, Repair and Operations ("MRO") supplies to industrial customers throughout the United States. MSC employs one of the industry's largest sales forces and distributes approximately 600,000 industrial products from approximately 3,000 suppliers to approximately 325,000 customers. In-stock availability is approximately 99%, with next day standard delivery to the contiguous United States on qualifying orders up until 8:00 p.m. Eastern Time. MSC reaches its customers through a combination of approximately 18 million direct-mail catalogs, 107 branch sales offices, 1,101 sales people, the Internet and associations with some of the world's most prominent B2B eCommerce portals. For more information, visit the Company's website at http://www.mscdirect.com .
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements in this Press Release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained herein which are not statements of historical facts and that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including statements about expected future results shall be deemed to be forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events, actual results and performance, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material. Factors that could cause actual results to differ materially from those in forward-looking statements include, without limitation, current economic, political and social conditions, changing customer and product mixes, financial restrictions on outstanding borrowings, industry consolidation, competition, general economic conditions in the markets in which the Company operates, volatility in commodity and energy prices, credit risk of our customers, risk of cancellation or rescheduling of orders, work stoppages or other business interruptions (including those due to extreme weather conditions) at transportation centers or shipping ports, the risk of war, terrorism and similar hostilities, dependence on the Company's information systems and on key personnel, and the outcome of potential government or regulatory proceedings or future litigation relating to pending or future claims, inquiries or audits. Additional information concerning these and other risks is described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's reports on Forms 10-K, 10-Q and 8-K that the Company files with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release are based on current expectations and the Company assumes no obligation to update these forward-looking statements.
