# EDGAR Filing Document

**Accession Number:** 0001003078
**File Stem:** 0001003078-23-000006
**Filing Date:** 2023-1
**Character Count:** 39857
**Document Hash:** 39a7201fd3d752080a49214d7ccbd61f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001003078-23-000006.hdr.sgml**: 20230105

**ACCESSION NUMBER**: 0001003078-23-000006

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230105

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230105

**DATE AS OF CHANGE**: 20230105

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MSC INDUSTRIAL DIRECT CO INC
- **CENTRAL INDEX KEY:** 0001003078
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-INDUSTRIAL MACHINERY & EQUIPMENT [5084]
- **IRS NUMBER:** 113289165
- **STATE OF INCORPORATION:** NY
- **FISCAL YEAR END:** 0902

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-14130
- **FILM NUMBER:** 23509690

**BUSINESS ADDRESS:**
- **STREET 1:** 515 BROADHOLLOW ROAD
- **CITY:** MELVILLE
- **STATE:** NY
- **ZIP:** 11747
- **BUSINESS PHONE:** 516-812-2000

**MAIL ADDRESS:**
- **STREET 1:** 515 BROADHOLLOW ROAD
- **CITY:** MELVILLE
- **STATE:** NY
- **ZIP:** 11747

?xml version="1.0" encoding="utf-8"? msm-20230105x8k

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

_________________________________________________

**FORM 8-K**

_________________________________________________

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of**

 **the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **January 5, 2023**

_________________________________________________

**MSC INDUSTRIAL DIRECT CO., INC.**

(Exact name of registrant as specified in its charter)

_________________________________________________

---

| | | |
|:---|:---|:---|
| **New York** | **1-14130** | **11-3289165** |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |

---

---

| | |
|:---|:---|
| **515 Broadhollow Road, Suite 1000, Melville, New York** | **11747** |
| (Address of principal executive offices) | (Zip Code) |
| Registrant's telephone number, including area code: **(516) 812-2000** | Registrant's telephone number, including area code: **(516) 812-2000** |
| **Not Applicable** |  |
| (Former name or former address, if changed since last report) | (Former name or former address, if changed since last report) |
| _________________________________________________<br>|  |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| **Class A Common Stock, par value $0.001 per share** | **MSM** | **New York Stock Exchange** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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| | |
|:---|:---|
| **Item 2.02.** | **Results of Operations and Financial Condition** |

---

On January 5, 2023, MSC Industrial Direct Co., Inc. issued a press release announcing financial results for its fiscal 2023 first quarter ended December 3, 2022. A copy of the press release is furnished with this report as Exhibit 99.1.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

---

| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits** |

---

---

| | |
|:---|:---|
| (d) Exhibits: |  |
| [<u>99.1</u>](msm-20230105xex99_1.htm) | [<u>Press Release, dated January 5, 2023, issued by MSC Industrial Direct Co., Inc.</u>](msm-20230105xex99_1.htm) |
| 104  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

‎

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **MSC INDUSTRIAL DIRECT CO., INC.** | **MSC INDUSTRIAL DIRECT CO., INC.** |
| Date: January 5, 2023 | By: | /s/ KRISTEN ACTIS-GRANDE  |
|  | Name: | Kristen Actis-Grande |
|  | Title: | Executive Vice President and Chief Financial Officer  |

---

## Exhibit 99.1

**Exhibit 99.1**

---

| | |
|:---|:---|
| ![Picture 1](msm-20230105xex99_1g001.jpg) | **NEWS** |

---

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**FISCAL 2023 Q1 HIGHLIGHTS**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net sales of $957.7 million, an increase of 12.9% YoY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Average daily sales ("ADS") growth of roughly 9 percentage points above the Industrial Production (IP) I ndex

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Operating income of $116.0 million, or $118.3 million adjusted to exclude acquisition-related costs and restructuring and other costs <sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Operating margin of 12.1%, or 12.3% excluding the adjustments described above <sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Diluted EPS of $1.45 vs. $1.18 in the prior fiscal year quarter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Adjusted diluted EPS of $1.48 vs. $1.25 in the prior fiscal year quarter <sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Repurchased over 200,000 shares during the quarter at an average purchase price per share of $79.60

**MELVILLE, NY and DAVIDSON, NC, JANUARY 5, 2023 - MSC INDUSTRIAL SUPPLY CO. (NYSE: MSM)**, "MSC," "MSC Industrial" or the "Company," a leading North American distributor of a broad range of metalworking and maintenance, repair and operations (MRO) products and services, today reported financial results for its fiscal 2023 first quarter ended December 3, 2022.

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| | | | |
|:---|:---|:---|:---|
| **Financial Highlights**<sup>2</sup> | **FY23 Q1** | **FY22 Q1** | **Change** |
| Net Sales | $957.7 | $848.5 | 12.9% |
| Income from Operations  | $116.0 | $90.7 | 27.9% |
| Operating Margin  | *12.1%* | *10.7%* |  |
| Net Income Attributable to MSC | $81.3 | $66.1 | 23.1% |
| Diluted EPS | $1.45 <sup>3</sup> | $1.18 <sup>3</sup> | 22.9% |

---

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| | | | |
|:---|:---|:---|:---|
| **Adjusted Financial Highlights**<sup>1,</sup><sup>2</sup> | **FY23 Q1** | **FY22 Q1** | **Change** |
| Net Sales | $957.7 | $848.5 | 12.9% |
| Income from Operations | $118.3 | $96.0 | 23.2% |
| Operating Margin  | *12.3%* | *11.3%* |  |
| Net Income Attributable to MSC | $83.0 | $70.0 | 18.6% |
| Diluted EPS | $1.48 <sup>3</sup> | $1.25 <sup>3</sup> | 18.4% |

---

<sup>1</sup> Represents a non-GAAP financial measure. An explanation and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure are presented in schedules accompanying this press release.

<sup>2</sup> In millions except percentages and per share data or as otherwise noted.

<sup>3</sup> Based on 56.1 million and 55.9 million diluted shares outstanding for FY23 Q1 and FY22 Q1, respectively.

------

Erik Gershwind, President and Chief Executive Officer, said, "We began the fiscal year on strong footing as average daily sales grew 12.9%, or about 9 percentage points above the Industrial Production Index. Top-line performance was driven by the ongoing execution of our five growth drivers – solidify metalworking, leverage our portfolio strength, expand solutions, grow e-commerce, and diversify customers and end-markets. We continue to be a partner of choice for our customers, who have recognized our ability to improve their productivity and be a resource against global supply chain and labor constraints. This value proposition supports our ability to drive price realization, which contributed to our fiscal first quarter results."

------

Kristen Actis-Grande, Executive Vice President and Chief Financial Officer, added, "We successfully capitalized on growth by delivering 140 basis points of operating margin expansion, or 100 basis points on an adjusted basis, and significant earnings per share improvement compared to the prior year period. We continue to make progress on our Mission Critical journey, which is leading to productivity gains and allowing us to reaffirm our fiscal 2023 adjusted operating margin guidance range."

Gershwind concluded, "I am encouraged by our first quarter performance, which continued our stretch of strong quarterly execution. I am also encouraged by the growth trajectory for the Company in the midst of a complex operating environment. Looking ahead, we believe we are well positioned regardless of the macro environment, as our balance sheet strength and five growth drivers remain competitive advantages that allow us to deliver on our Mission Critical targets."

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**Page 2**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**Mission Critical Update** 

*We continued to make progress on each of our Mission Critical growth initiatives during the fiscal 2023 first quarter.*

<u>Solidify Metalworking</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Over 150 metalworking and specialty sales experts driving customer productivity

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Most recent savings example highlights over $4 million in expected annual savings for a Fortune 500 customer

<u>Leverage Portfolio Strength</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· CCSG sales continued growing mid-teens

<u>Expand Solutions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Vending signings strong; vending machine sales up mid-teens and now represent 15% of total Company sales

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· In-Plant signings strong; In-Plant sales up over 20% and now 12% of total Company sales

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Total solutions sales at 56% of total Company sales

<u>Grow E-Commerce</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· E-Commerce sales growing mid-teens in FY23 Q1 and reached 61.9% of total Company sales

<u>Diversify Customers and End Markets</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Public sector, driven by both federal and state government contract wins, grew 22% in FY23 Q1

**Balance Sheet, Liquidity and Capital Allocation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Floating/fixed rate debt ratio remained at 55/45

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Top two priorities remain reinvesting in the business and returning cash to shareholders through ordinary dividends

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Next two priorities are tuck-in acquisitions and share buybacks

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Deprioritizing special dividends given higher return prospects

**Fiscal 2023 Full Year Financial Outlook and Key Assumptions**

The Company is reaffirming its fiscal 2023 full year adjusted operating margin and ADS outlook that was communicated last quarter and providing key assumptions for the year.

---

| | |
|:---|:---|
| &nbsp;&nbsp; And Othe |  |
| &nbsp;&nbsp; **Fiscal 2023 Full Year Financial Outlook** | &nbsp;&nbsp; **As of Jan. 5, 2023** |
| &nbsp;&nbsp; Adjusted Operating Margin | &nbsp;&nbsp; 12.7%-13.3% |
| &nbsp;&nbsp; ADS Growth (YoY) | &nbsp;&nbsp; 5.0%-9.0% |
| &nbsp;&nbsp; Gross Margins | &nbsp;&nbsp; 40-70 bps YoY contraction |
| &nbsp;&nbsp; Depreciation and Amortization Expense | &nbsp;&nbsp; $77M-$82M |
| &nbsp;&nbsp; Interest and Other Expense | &nbsp;&nbsp; $33M-$38M |
| &nbsp;&nbsp; Operating Cash Flow Conversion | &nbsp;&nbsp; >100% |
| &nbsp;&nbsp; Additional Mission Critical Savings | &nbsp;&nbsp; $15M+ |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Fiscal 2023 includes 6 fewer selling days than fiscal 2022

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Acquisitions expected to dilute gross margins by 30 to 40 bps and operating margins by ~20 bps

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Low end of ADS range assumes contracting industrial economy; high end assumes a flat industrial economy

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Adjusted operating expense as a percentage of sales expected to improve in the back half of the year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Adjusted operating margin benefitted 20 bps from extra week in fiscal 2022

**Conference Call Information**

MSC will host a conference call today at 8:30 a.m. EDT to review the Company's fiscal 2023 first quarter results. The call, accompanying slides, and other operational statistics may be accessed at: https://investor.mscdirect.com. The conference call may also be accessed at 1-877-443-5575 (U.S.), 1-855-669-9657 (Canada) or 1-412-902-6618 (international).

An online archive of the broadcast will be available until January 12, 2023. The Company's reporting date for fiscal 2023 second quarter results is scheduled for April 4, 2023.

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**Page 3**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**Contact Information**

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| | |
|:---|:---|
| Investors: | Media: |
| John G. Chironna | Paul Mason |
| Vice President, Investor Relations and Treasurer | Director, Corporate Communications |
| (704) 987-5231 | (336) 817-2131 |

---

**About MSC Industrial Supply Co.** 

MSC Industrial Supply Co. (NYSE:MSM) is a leading North American distributor of a broad range of metalworking and maintenance, repair and operations (MRO) products and services. We help our customers drive greater productivity, profitability and growth with approximately 2.2 million products, inventory management and other supply chain solutions, and deep expertise from more than 80 years of working with customers across industries. Our experienced team of approximately 7,000 associates works with our customers to help drive results for their businesses - from keeping operations running efficiently today to continuously rethinking, retooling and optimizing for a more productive tomorrow. For more information on MSC Industrial, please visit mscdirect.com.

**Cautionary Note Regarding Forward-Looking Statements:** 

Statements in this press release may constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of present or historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including statements about the future impact of COVID-19 on our business operations, results of operations and financial condition, expected future results, expected benefits from our investment and strategic plans and other initiatives, and expected future growth, profitability and return on invested capital, are forward-looking statements. The words "will," "may," "believes," "anticipates," "thinks," "expects," "estimates," "plans," "intends," and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. In addition, any statements which refer to expectations, projections or other characterizations of future events or circumstances, statements involving a discussion of strategy, plans or intentions, statements about management's assumptions, projections or predictions of future events or market outlook and any other statement other than a statement of present or historical fact are forward-looking statements. The inclusion of any statement in this press release does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material. In addition, new risks may emerge from time to time and it is not possible for management to predict such risks or to assess the impact of such risks on our business or financial results. Accordingly, future results may differ materially from historical results or from those discussed or implied by these forward-looking statements. Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements. These risks and uncertainties include, but are not limited to, the following: general economic conditions in the markets in which we operate; changing customer and product mixes; volatility in commodity and energy prices, the impact of prolonged periods of low, high and rapid inflation, and fluctuations in interest rates; competition, including the adoption by competitors of aggressive pricing strategies and sales methods; industry consolidation and other changes in the industrial distribution sector; our ability to realize the expected benefits from our investment and strategic plans, including our transition from being a spot-buy supplier to a mission-critical partner to our customers; our ability to realize the expected cost savings and benefits from our restructuring activities and structural cost reductions; the potential impact of the COVID-19 pandemic on our sales, operations and supply chain; the retention of key personnel; the credit risk of our customers, higher inflation and fluctuations in interest rates; the risk of customer cancellation or rescheduling of orders; difficulties in calibrating customer demand for our products, such as personal protective equipment or "PPE" products, which could cause an inability to sell excess products ordered from manufacturers resulting in inventory write-downs or could conversely cause inventory shortages of such products; work stoppages, labor shortages or other business interruptions (including those due to extreme weather conditions) at transportation centers, shipping ports, our headquarters or our customer fulfillment centers; disruptions or breaches of our information technology systems, or violations of data privacy laws; the retention of qualified sales and customer service personnel and metalworking specialists; the risk of loss of key suppliers or contractors or key brands or supply chain disruptions, including due to import restrictions or global geopolitical conditions; changes to governmental trade or sanctions policies, including the impact from significant import restrictions or tariffs or moratoriums on economic activity with certain countries or regions; risks related to opening or expanding our customer fulfillment centers; our ability to estimate the cost of healthcare claims incurred under our self-insurance plan; litigation risk due to the nature of our business; risks associated with the integration of acquired businesses or other strategic transactions; financial restrictions on outstanding borrowings; our ability to maintain our credit facilities or incur additional borrowings on terms we deem attractive; the interest rate uncertainty due to the London InterBank Offered Rate (LIBOR) reform; the failure to comply with applicable environmental, health and safety laws and regulations, and other laws applicable to our business; the outcome of government or regulatory proceedings or future litigation; goodwill and intangible assets recorded resulting from our acquisitions could be impaired; our common stock price may be volatile due to factors outside of our control; and the significant control that our principal shareholders exercise over us, which may result in our taking actions or failing to take actions which our other shareholders do not prefer. 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 our Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively, and in the other reports and documents that we file with the United States Securities and Exchange Commission. We expressly disclaim any obligation to update any of these forward-looking statements, except to the extent required by applicable law.

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**Page 4**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**MSC INDUSTRIAL DIRECT CO., INC.**

**<u>Condensed</u> <u>Consolidated Balance Sheets</u>**

*(In thousands, except share data)*

---

| | | |
|:---|:---|:---|
|  | December 3,<br>2022 | September 3,<br>2022 |
|  | *(Unaudited)* |  |
| &nbsp;&nbsp; **ASSETS** |  |  |
| &nbsp;&nbsp; Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents  | $26331 | $43537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable, net of allowance for credit losses of $21,719 and $20,771, respectively  | 685826 | 687608 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories  | 726415 | 715625 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets  | 120001 | 96853 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets  | 1558573 | 1543623 |
| &nbsp;&nbsp; Property, plant and equipment, net  | 297113 | 286666 |
| &nbsp;&nbsp; Goodwill  | 709746 | 710130 |
| &nbsp;&nbsp; Identifiable intangibles, net  | 110702 | 114328 |
| &nbsp;&nbsp; Operating lease assets | 62803 | 64780 |
| &nbsp;&nbsp; Other assets  | 10464 | 9887 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets  | $2749401 | $2729414 |
| &nbsp;&nbsp; **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp; Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current portion of debt including obligations under finance leases | $326240 | $325680 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current portion of operating lease liabilities | 18531 | 18560 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable  | 212793 | 217378 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses and other current liabilities  | 169197 | 164326 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities  | 726761 | 725944 |
| &nbsp;&nbsp; Long-term debt including obligations under finance leases | 453868 | 468912 |
| &nbsp;&nbsp; Noncurrent operating lease liabilities | 45693 | 47616 |
| &nbsp;&nbsp; Deferred income taxes and tax uncertainties  | 124659 | 124659 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities  | 1350981 | 1367131 |
| &nbsp;&nbsp; Commitments and Contingencies |  |  |
| &nbsp;&nbsp; Shareholders' Equity: |  |  |
| &nbsp;&nbsp; MSC Industrial Shareholders' Equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred Stock; $0.001 par value; 5,000,000 shares authorized; none issued and outstanding  | &nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class A Common Stock (one vote per share); $0.001 par value; 100,000,000 shares authorized; 48,584,476 and 48,447,384 shares issued, respectively | 49 | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class B Common Stock (10 votes per share); $0.001 par value; 50,000,000 shares authorized; 8,654,010 and 8,654,010 shares issued and outstanding, respectively | 9 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital  | 814493 | 798408 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings  | 703565 | 681292 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss  | (22186) | (23121) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class A treasury stock, at cost, 1,266,439 and 1,228,472 shares, respectively  | (109592) | (106202) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total MSC Industrial shareholders' equity  | 1386338 | 1350434 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncontrolling interest | 12082 | 11849 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total shareholders' equity | 1398420 | 1362283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity  | $2749401 | $2729414 |

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**Page 5**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**MSC INDUSTRIAL DIRECT CO., INC.**

**<u>Condensed</u> <u>Consolidated Statements of Income</u>**

*(In thousands, except per share data)*

*(Unaudited)*

---

| | | |
|:---|:---|:---|
|  | Thirteen Weeks Ended | Thirteen Weeks Ended |
|  | December 3,<br>2022 | November 27,<br>2021 |
| Net sales | $957745 | $848547 |
| Cost of goods sold | 559946 | 495951 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross profit | 397799 | 352596 |
| Operating expenses | 279695 | 256581 |
| Restructuring and other costs  | 2094 | 5283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income from operations | 116010 | 90732 |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | (6919) | (3728) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income | 100 | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other expense, net | (1340) | (413) |
| Total other expense  | (8159) | (4122) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before provision for income taxes | 107851 | 86610 |
| Provision for income taxes | 26639 | 20353 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | 81212 | 66257 |
| Less: Net (loss) income attributable to noncontrolling interest | (102) | 190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income attributable to MSC Industrial | $81314 | $66067 |
| Per share data attributable to MSC Industrial: |  |  |
| &nbsp;&nbsp; Net income per common share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $1.45 | $1.19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $1.45 | $1.18 |
| Weighted average shares used in computing <br> net income per common share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 55891 | 55530 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 56081 | 55856 |

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**Page 6**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**MSC INDUSTRIAL DIRECT CO., INC.**

**<u>Condensed</u> <u>Consolidated Statements of Comprehensive Income</u>**

*(In thousands)*

*(Unaudited)*

---

| | | |
|:---|:---|:---|
|  | Thirteen Weeks Ended | Thirteen Weeks Ended |
|  | December 3,<br>2022 | November 27,<br>2021 |
| Net income, as reported | $81212 | $66257 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income, net of tax: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | 1270 | (4992) |
| Comprehensive income  | 82482 | 61265 |
| Comprehensive income attributable to noncontrolling interest: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss (income) | 102 | (190) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | (335) | 911 |
| Comprehensive income attributable to MSC Industrial | $82249 | $61986 |

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**Page 7**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**MSC INDUSTRIAL DIRECT CO., INC.**

**<u>Condensed</u> <u>Consolidated Statements of</u> <u>Cash Flows</u>**

*(In thousands)*

*(Unaudited)*

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| | | |
|:---|:---|:---|
|  | Thirteen Weeks Ended | Thirteen Weeks Ended |
|  | December 3,<br>2022 | November 27,<br>2021 |
| &nbsp;&nbsp; Cash Flows from Operating Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income  | $81212 | $66257 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization  | 18566 | 17407 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-cash operating lease cost | 4872 | 4223 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation  | 4990 | 5689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on disposal of property, plant and equipment | 229 | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for credit losses  | 2673 | 1837 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable  | 56 | (21805) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories  | (9516) | (755) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets  | (22764) | 4172 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities | (4843) | (4246) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets  | (508) | (27) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | 1057 | (15052) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total adjustments  | (5188) | (8453) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities  | 76024 | 57804 |
| &nbsp;&nbsp; Cash Flows from Investing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expenditures for property, plant and equipment  | (25504) | (15262) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash used in business acquisitions, net of cash acquired | (87) | &nbsp;&nbsp;&nbsp;&nbsp;— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities  | (25591) | (15262) |
| &nbsp;&nbsp; Cash Flows from Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repurchases of common stock | (18539) | (4559) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments of regular cash dividends  | (44207) | &nbsp;&nbsp;&nbsp;&nbsp;— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sale of Class A Common Stock in connection with associate stock purchase plan  | 1056 | 1029 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from exercise of Class A Common Stock options  | 8336 | 7097 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowings under credit facilities | 84000 | 26000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowings under financing obligations | 1061 | 1057 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments under credit facilities | (99000) | (50000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments on finance lease and financing obligations | (657) | (418) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in financing activities  | (67950) | (19794) |
| &nbsp;&nbsp; Effect of foreign exchange rate changes on cash and cash equivalents  | 311 | (409) |
| &nbsp;&nbsp; Net (decrease) increase in cash and cash equivalents  | (17206) | 22339 |
| &nbsp;&nbsp; Cash and cash equivalents—beginning of period  | 43537 | 40536 |
| &nbsp;&nbsp; Cash and cash equivalents—end of period  | $26331 | $62875 |
| Supplemental Disclosure of Cash Flow Information: |  |  |
| Cash paid for income taxes | $2767 | $1606 |
| Cash paid for interest | $5441 | $2272 |
| Supplemental Disclosure of Non-Cash Financing Activities: |  |  |
| Cash dividends declared, but not yet paid  | $&nbsp;&nbsp;&nbsp;&nbsp;— | $41740 |

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**Page 8**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

**<u>Non-GAAP Financial Measures</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·  ***Results Excluding Acquisition-Related Costs and Restructuring and Other Costs*** 

To supplement MSC's unaudited selected financial data presented consistent with accounting principles generally accepted in the United States ("GAAP"), the Company discloses certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP incremental margin, non-GAAP provision for income taxes, non-GAAP net income and non-GAAP diluted earnings per share, that exclude acquisition-related costs, restructuring and other costs, and tax effects.

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These non-GAAP financial measures are not presented in accordance with GAAP or an alternative for GAAP financial measures and may be different from similar non-GAAP financial measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measures and should only be used to evaluate MSC's results of operations in conjunction with the corresponding GAAP financial measures.

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In calculating non-GAAP financial measures, we exclude acquisition-related costs, restructuring and other costs, and tax effects. Management makes these adjustments to facilitate a review of the Company's operating performance on a comparable basis between periods, for comparison with forecasts and strategic plans, for identifying and analyzing trends in the Company's underlying business and for benchmarking performance externally against competitors. We believe that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures.

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**Page 9**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

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| | | | | |
|:---|:---|:---|:---|:---|
| MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. |
| Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information |
| Thirteen Weeks Ended December 3, 2022 | Thirteen Weeks Ended December 3, 2022 | Thirteen Weeks Ended December 3, 2022 | Thirteen Weeks Ended December 3, 2022 | Thirteen Weeks Ended December 3, 2022 |
| (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) |
|  | GAAP Financial Measure | Items Affecting Comparability | Items Affecting Comparability | Non-GAAP Financial Measure |
|  | Total MSC Industrial | Restructuring and Other Costs  | Acquisition-Related Costs  | Adjusted Total MSC Industrial |
| Net Sales  | $957745 | $&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;- | $957745 |
| Cost of Goods Sold | 559946 | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | 559946 |
| Gross Profit | 397799 | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | 397799 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gross Margin | *41.5%* | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | *41.5%* |
| Operating Expenses | 279695 | &nbsp;&nbsp;&nbsp;&nbsp;- | 154 | 279541 |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating Exp as % of Sales | *29.2%* | &nbsp;&nbsp;&nbsp;&nbsp;- | *0.0%* | *29.2%* |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring and Other Costs  | 2094 | 2094 | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- |
| Income from Operations | 116010 | (2094) | (154) | 118258 |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating Margin | *12.1%* | *-0.2%* | *0.0%* | *12.3%* |
| &nbsp;&nbsp;&nbsp;&nbsp; Incremental Margin | *23.1%* | *-* | *-* | *20.4%* |
| Total Other Expense | (8159) | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | (8159) |
| Income before provision for income taxes | 107851 | (2094) | (154) | 110099 |
| Provision for income taxes | 26639 | (517) | (38) | 27194 |
| Net income | 81212 | (1577) | (116) | 82905 |
| Net income attributable to noncontrolling interest | (102) | &nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;- | (102) |
| Net income attributable to MSC Industrial | $81314 | $(1577) | $(116) | $83007 |
| Net income per common share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $1.45 | $(0.03) | $(0.00) | $1.48 |
| \*Individual amounts may not agree to the total due to rounding | \*Individual amounts may not agree to the total due to rounding | \*Individual amounts may not agree to the total due to rounding | \*Individual amounts may not agree to the total due to rounding | \*Individual amounts may not agree to the total due to rounding |

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**Page 10**

**MSC INDUSTRIAL SUPPLY CO. REPORTS FISCAL 2023 FIRST QUARTER RESULTS**

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| | | | |
|:---|:---|:---|:---|
| MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. | MSC INDUSTRIAL DIRECT CO., INC. |
| Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information | Reconciliation of GAAP and Non-GAAP Financial Information |
| Thirteen Weeks Ended November 27, 2021 | Thirteen Weeks Ended November 27, 2021 | Thirteen Weeks Ended November 27, 2021 | Thirteen Weeks Ended November 27, 2021 |
| (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) | (In thousands, except percentages and per share data) |
|  | GAAP Financial Measure | Items Affecting Comparability | Non-GAAP Financial Measure |
|  | Total MSC Industrial | Restructuring Costs | Adjusted Total MSC Industrial |
| Net Sales  | $848547 | $&nbsp;&nbsp;&nbsp;&nbsp;- | $848547 |
| Cost of Goods Sold | 495951 | &nbsp;&nbsp;&nbsp;&nbsp;- | 495951 |
| Gross Profit | 352596 | &nbsp;&nbsp;&nbsp;&nbsp;- | 352596 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gross Margin | *41.6%* | &nbsp;&nbsp;&nbsp;&nbsp;- | *41.6%* |
| Operating Expenses | 256581 | &nbsp;&nbsp;&nbsp;&nbsp;- | 256581 |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating Exp as % of Sales | *30.2%* | *-* | *30.2%* |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring Costs  | 5283 | 5283 | &nbsp;&nbsp;&nbsp;&nbsp;- |
| Income from Operations | 90732 | (5283) | 96015 |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating Margin | *10.7%* | *-0.6%* | *11.3%* |
| Total Other Expense | (4122) | &nbsp;&nbsp;&nbsp;&nbsp;- | (4122) |
| Income before provision for income taxes | 86610 | (5283) | 91893 |
| Provision for income taxes | 20353 | (1334) | 21687 |
| Net income | 66257 | (3949) | 70206 |
| Net income attributable to noncontrolling interest | 190 | &nbsp;&nbsp;&nbsp;&nbsp;- | 190 |
| Net income attributable to MSC Industrial  | $66067 | $(3949) | $70016 |
| Net income per common share: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $1.18 | $(0.07) | $1.25 |
| \*Individual amounts may not agree to the total due to rounding. | \*Individual amounts may not agree to the total due to rounding. | \*Individual amounts may not agree to the total due to rounding. | \*Individual amounts may not agree to the total due to rounding. |

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