MSC Industrial Direct Co., Inc. Reports Results For Its Fiscal 2012 Fourth Quarter And Full Year

  MSC Industrial Direct Co., Inc. Reports Results For Its Fiscal 2012 Fourth
                            Quarter And Full Year

- Net Sales of $635.3 Million in Fiscal 2012 Fourth Quarter -

- Adjusted Diluted Earnings per Share Increase 19.4% to $1.11, GAAP Diluted
Earnings per Share Increase 17.2% to $1.09 in Fiscal 2012 Fourth Quarter -

PR Newswire

MELVILLE, N.Y., Oct. 31, 2012

MELVILLE, N.Y., Oct. 31, 2012 /PRNewswire/ --MSC INDUSTRIAL DIRECT CO., INC.
(NYSE: MSM), "MSC" or the "Company," 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 year and fourth quarter ended
September 1, 2012. Both periods included an additional week of operational
results as compared to the prior periods.

Net sales for the fourth quarter of fiscal 2012 were $635.3 million, an
increase of 19.1% over net sales of $533.2 million in the fourth quarter of
fiscal 2011. Average daily sales for the period grew 10.4%.

Excluding non-recurring costs of $1.2 million associated with the previously
announced co-location of the Company's headquarters in Davidson, North
Carolina, adjusted operating income for the fiscal 2012 fourth quarter was
$109.2 million, or 17.2% of net sales, compared to $93.9 million, or 17.6% of
net sales in the same quarter a year ago. GAAP operating income for the fiscal
2012 fourth quarter was $108.0 million.

Excluding the after tax effects of these non-recurring costs, adjusted net
income for the fourth quarter of fiscal 2012 rose 17.2% to $69.7 million, or
$1.11 per diluted share (based on 62.5 million diluted shares outstanding),
compared to $59.5 million, or $0.93 per diluted share, a year ago (based on
63.5 million diluted shares outstanding). GAAP net income for the fourth
quarter of fiscal 2012 was $68.9 million, or $1.09 per diluted share.

For the 2012 fiscal year, net sales increased 16.5% to $2.36 billion from
$2.02 billion in fiscal year 2011. Average daily sales for the year grew
14.3%.

Excluding the non-recurring costs, adjusted operating income for fiscal 2012
was $413.4 million, or 17.5% of net sales compared to $349.8 million, or 17.3%
of net sales, in fiscal 2011. GAAP operating income for fiscal 2012 was $412.2
million. Excluding the after tax effects of the non-recurring costs, adjusted
net income for the 2012 fiscal year rose 18.7% to $259.8 million, or $4.10 per
diluted share (based on 62.8 million diluted shares outstanding), compared to
$218.8 million, or $3.43, a year ago (based on 63.3 million diluted shares
outstanding). GAAP net income for fiscal 2012 was $259.0 million, or $4.09 per
diluted share.

An explanation and reconciliation of the non-GAAP financial measures contained
in this press release to the most directly comparable GAAP financial measures
are included in the attached tables.

Erik Gershwind, President and Chief Operating Officer, stated, "Despite an
increasingly difficult demand environment, we delivered solid results in the
fourth quarter and for the year. I was encouraged by our gross margin
performance, cost containment focus and our team's strong execution of the
growth initiatives that will position us for the future."

David Sandler, Chief Executive Officer added, "In assuming my new role as
Executive Vice Chairman, I have never been more excited about the future of
our company. I have absolute confidence that Erik and his team will take MSC
to new heights of success and levels never before seen in our history."

Mr. Gershwind concluded, "While visibility remains limited in an uncertain
near-term environment, we are cautiously optimistic about an improved
environment in 2013, as clarity replaces uncertainty. We remain confident in
our march towards the revenue goal of $4 billion by 2016 and in our ability to
take disproportionate market share in any economic environment."

Outlook
Based on current market conditions and taking into account the impact from the
recent hurricane, for the fiscal 2013 first quarter the Company expects net
sales to be between $576 million and $588 million. Excluding non-recurring
costs related to the co-location of the Company's headquarters in Davidson,
North Carolina, the Company expects adjusted diluted earnings per share for
the first quarter of fiscal 2013 to be between $0.98 and $1.02. GAAP diluted
earnings per share are expected to be lower than the guidance by approximately
$0.02 per diluted share for the first quarter of fiscal 2013, resulting from
these non-recurring costs. The Company continues to expect approximately
$7-10 million in non-recurring relocation costs, depending upon the number of
associates who choose to relocate, to be incurred primarily in fiscal years
2013 and 2014. The midpoint of this guidance also reflects projected average
daily sales growth of 6.7%, 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 year and fourth
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
until Friday, November 30, 2012.

Alternatively, the conference call can be accessed by dialing 1-800-860-2442
(U.S.) or 1-412-858-4600 (international). A replay will be available within
one hour of the conclusion of the call and will remain available until Friday,
November 30, 2012. The replay is accessible by dialing 1-877-344-7529 (U.S.)
or 1-412-317-0088 (international) and entering passcode 10019359.

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, 106
branch sales offices, 1,095 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.

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
historical fact, that address activities, events or developments that we
expect, believe or anticipate will or may occur in the future, including
statements about expected future results are 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. 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:
problems with successfully integrating acquired operations, unanticipated
delays or costs associated with opening or expanding our customer fulfillment
centers or customer service centers, current economic, political and social
conditions, changing customer and product mixes, financial restrictions on
outstanding borrowings, industry consolidation, the loss of key suppliers or
supply chain disruptions, competition, general economic conditions in the
markets in which we operate, 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 our 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 reports on Forms 10-K
and 10-Q that we file with the U.S. Securities and Exchange Commission. We
assume no obligation to update any of these forward-looking statements.

(Tables Follow)



MSC INDUSTRIAL DIRECT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)
                                      September 1,        August 27,

                                      2012                2011
ASSETS
Current Assets:
Cash and cash equivalents             $    168,453    $    95,959
Accounts receivable, net of allowance 297,215             266,545
for doubtful accounts
 Inventories                   393,412             344,854
  Prepaid expenses and other    29,313              22,545
current assets
  Deferred income taxes         31,718              28,531
Total current assets                  920,111             758,434
Property, plant and equipment, net    174,597             148,813
Goodwill                              289,124             277,431
Identifiable intangibles, net         51,212              48,308
Other assets                          9,832               11,437
Total assets                          $   1,444,876     $   1,244,423
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of capital lease   $      1,007  $         --
and financing obligations
Accounts payable                      96,640              95,538
Accrued liabilities                   72,868              76,664
Total current liabilities             170,515             172,202
Capital lease obligations, net of     2,189
current maturities
Deferred income taxes and tax         85,061              79,109
uncertainties
Total liabilities                     257,765             251,311
Commitments and Contingencies
Shareholders' Equity:
Preferred Stock                       --                  --
Class A common stock                  53                  51
Class B common stock                  16                  16
Additional paid-in capital            483,682             439,035
Retained earnings                     970,965             775,149
Accumulated other comprehensive loss  (2,443)             (2,085)
Class A treasury stock, at cost       (265,162)           (219,054)
Total shareholders' equity            1,187,111           993,112
Total liabilities and shareholders'   $   1,444,876     $   1,244,423
equity



MSC INDUSTRIAL DIRECT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(In thousands, except net income per share data)
                       (Unaudited)
                       Quarters Ended              Fiscal Years Ended
                       September 1,   August 27,   September 1,  August 27,

                       2012          2011         2012          2011
                       (14 weeks)     (13 weeks)   (53 weeks)    (52 weeks)
Net sales              $   635,271  $          $  2,355,918 $  2,021,792
                                      533,237
Cost of goods sold     348,244        287,866      1,277,715     1,080,867
Gross profit           287,027        245,371      1,078,203     940,925
Operating expenses     179,021        151,488      665,987       591,160
Income from operations 108,006        93,883       412,216       349,765
Other (Expense)
Income:
Interest expense       (62)           (47)         (241)         (258)
Interest income        36             16           196           58
Other expense          (24)           (112)        (29)          (235)
Total other expense    (50)           (143)        (74)          (435)
 Income
before provision for   107,956        93,740       412,142       349,330
income taxes
Provision for income   39,041         34,289       153,111       130,544
taxes
Net income             $    68,915 $        $           $  
                                      59,451      259,031      218,786
Per Share Information:
Net income per common
share:
Basic                  $        $       $       $      
                       1.10             0.93     4.12          3.45
Diluted                $        $       $       $      
                       1.09             0.93     4.09          3.43
Weighted average
shares used in
computing net income

per common share:
Basic                  62,203         63,181       62,434        62,902
Diluted                62,539         63,546       62,803        63,324
Cash dividend declared $        $       $       $      
per common share       0.25             0.22     1.00          1.88



MSC INDUSTRIAL DIRECT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)
                                            For The Fiscal Years Ended
                                            September1, August27, August28,

                                            2012         2011       2010

                                            (53weeks)   (52weeks) (52weeks)
Net income, as reported                     $259,031     $218,786   $150,373
Cumulative foreign currency translation     (358)        575        (592)
adjustment
Comprehensive income                        $258,673     $219,361   $149,781



MSC INDUSTRIAL DIRECT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)
                                          For the Fiscal Years Ended
                                          September 1,     August 27,

                                          2012             2011

                                          (53 weeks)       (52 weeks)
Cash Flows from Operating Activities:
Net income                                $            $     218,786
                                          259,0311
Adjustments to reconcile net income to
net cash

 provided by operating activities:
Depreciation and amortization             34,723           29,159
Stock-based compensation                  15,262           14,768
Loss on disposal of property, plant, and  1,129            116
equipment
Provision for doubtful accounts           3,560            2,733
Deferred income taxes and tax             2,765            15,270
uncertainties
Excess tax benefits from stock-based      (4,888)          (7,356)
compensation
Changes in operating assets and
liabilities, net of amounts associated
with business

 acquired:
Accounts receivable                       (30,213)         (38,304)
Inventories                               (45,306)         (46,895)
Prepaid expenses and other current assets (6,598)          (1,782)
Other assets                              1,268            2,019
Accounts payable and accrued liabilities  3,551            21,448
Total adjustments                         (24,747)         (8,824)
 Net cash provided  234,284          209,962
by operating activities
Cash Flows from Investing Activities:
 Expenditures for property, plant and  (47,691)         (25,479)
equipment
 Cash used in business acquisition,    (33,451)         (28,948)
net of cash received
Net cash used in investing activities     (81,142)         (54,427)
Cash Flows from Financing Activities:
Purchases of treasury stock               (48,098)         (69,279)
Payment of cash dividends                 (63,024)         (119,257)
Payments on capital lease and financing   (1,385)          --
obligations
Excess tax benefits from stock-based      4,888            7,356
compensation
Proceeds from sale of Class A common                      
stock in connection with associate stock
                                          3,387            2,983
 purchase plan
Proceeds from exercise of Class A common  22,422           37,683
stock options
Borrowing under the financing obligation  1,192            --
Credit facility financing costs           --               (938)
Repayments of notes payable under the     --               (39,361)
credit facility and other notes
Net cash used in financing activities     (80,618)         (180,813)
Effect of foreign exchange rate changes   (30)             46
on cash and cash equivalents
Net increase (decrease) in cash and cash  72,494           (25,232)
equivalents
Cash and cash equivalents – beginning of  95,959           121,191
period
Cash and cash equivalents – end of period $    168,453  $     95,959
Supplemental Disclosure of Cash Flow
Information:
Cash paid for income taxes                $    145,651  $    109,001
Cash paid for interest                    $         $        93
                                          55

Non-GAAP Financial Measures

To supplement MSC's unaudited selected financial data presented on a basis
consistent with Generally Accepted Accounting Principles ("GAAP"), the Company
discloses certain non-GAAP financial measures, including adjusted operating
income, adjusted net income and adjusted net income per diluted share. These
supplemental measures exclude non-recurring costs associated with the
co-location of our corporate headquarters in Davidson, North Carolina and the
related tax effects. These non-GAAP measures are not in accordance with or an
alternative for GAAP, and may be different from non-GAAP measures used by
other companies. We believe that these non-GAAP measures have limitations in
that they do not reflect all of the amounts associated with MSC's results of
operations as determined in accordance with GAAP and that these measures
should only be used to evaluate MSC's results of operations in conjunction
with the corresponding GAAP measures. The presentation of this additional
information is not meant to be considered in isolation or as a substitute for
the most directly comparable GAAP measures. We compensate for the limitations
of non-GAAP financial measures by relying upon GAAP results to gain a complete
picture of Company performance.

In calculating non-GAAP financial measures, we exclude these non-recurring
costs to facilitate a review of the comparability of the Company's operating
performance on a period-to-period basis because such costs are not, in our
view, related to the Company's ongoing operational performance. We use
non-GAAP measures to evaluate the operating performance of our business, for
comparison with forecasts and strategic plans, and for benchmarking
performance externally against competitors. In addition, we use non-GAAP
financial measures as performance metrics for management incentive programs.
Since we find these measures to be useful, we believe that investors benefit
from seeing results "through the eyes" of management in addition to seeing
GAAP results. We believe that these non-GAAP measures, when read in
conjunction with the Company's GAAP financials, provide useful information to
investors by offering:

  othe ability to make more meaningful period-to-period comparisons of the
    Company's on-going operating results;
  othe ability to better identify trends in the Company's underlying business
    and perform related trend analyses; and
  oa better understanding of how management plans and measures the Company's
    underlying business.

The following tables reconciles GAAP operating income, GAAP net income and
GAAP net income per diluted share ("EPS") to non-GAAP, adjusted operating
income, adjusted net income, and adjusted net income per diluted share:

                                     Three Months Ended

                                     September 1, 2012
(in thousands)                       $                     Margin
GAAP Operating income                $      108,006 17.0%
Headquarters co-location costs       1,232
Adjusted Operating income            $      109,238 17.2%
                                     Three Months Ended

                                     September 1, 2012
(in thousands, except per share      $                    Diluted
amounts)
                                     (after tax)          EPS**
GAAP net income                      $       68,915 $        1.09
Headquarters co-location costs*      774                  0.01
Adjusted net income                  $       69,689 $        1.11



*  On a pre-tax basis includes charges of $1,232,000 reported within Operating
   Expenses for the three
   months ended September 1, 2012 associated with the Co-Location of the
   Company's headquarters in
   Davidson, North Carolina.
** Individual amounts of earnings per share may not agree to the total due to
   rounding



                                      Fiscal Year Ended

                                      September 1, 2012
(in thousands)                        $                   Margin
GAAP operating income                 $             17.5%
                                      412,216
Headquarters co-location costs        1,232
Adjusted operating income             $             17.5%
                                      413,448
                                      Fiscal Year Ended

                                      September 1, 2012
(in thousands, except per share       $                  Diluted
amounts)
                                      (after tax)        EPS
GAAP net income                       $     259,031  $        4.09
Headquarters co-location costs*       774                0.01
Adjusted net income                   $     259,805  $        4.10



* On a pre-tax basis includes charges of $1,232,000 reported within Operating
  Expenses for the
  fiscal year ended September 1, 2012 associated with the Co-Location of the
  Company's
  headquarters in Davidson, North Carolina.



SOURCE MSC Industrial Direct Co., Inc.

Website: http://www.mscdirect.com
Contact: Investor Contact: John G. Chironna, VP Investor Relations &
Treasurer, MSC Industrial Direct Co. Inc., +1-516-812-1216; Media Contact:
Rachel Rosenblatt, FTI Consulting - Strategic Communications, +1-212-850-5600
 
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