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MSC Industrial Direct net sales up %17.5%

Staff writer |
MSC Industrial Direct reported financial results for its fiscal 2014 first quarter ended November 30, 2013. Net sales were $678.5 million, an increase of 17.5% over net sales of $577.5 million in Q1 2013.

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The recently acquired Barnes Distribution North America (BDNA) business contributed approximately $72.4 million to net sales in the fiscal 2014 first quarter.

Excluding non-recurring costs of $5.8 million associated with the BDNA acquisition and the co-location of the company's headquarters, adjusted operating income for the fiscal 2014 first quarter was $102.5 million, or 15.1% of net sales, compared to $103.7 million, or 18.0% of net sales in the same quarter a year ago.

GAAP operating income for the fiscal 2014 first quarter was $96.8 million, or 14.3% of net sales, compared to $102.4 million, or 17.7% of net sales in the same quarter a year ago.

Excluding the after tax effects of non-recurring costs, adjusted net income for the first quarter of fiscal 2014 was $62.6 million, or $0.99 per diluted share (based on 63.1 million diluted shares outstanding), compared to $64.0 million, or $1.01 per diluted share, a year ago (based on 62.7 million diluted shares outstanding). The BDNA operations contributed approximately $0.05 to the fiscal first quarter EPS. GAAP net income for the first quarter of fiscal 2014 was $59.0 million, or $0.93 per diluted share, compared to $63.2 million, or $1.00 per diluted share, a year ago.

The company expects net sales for the fiscal second quarter 2014 to be between $660 million and $672 million. At the midpoint, average daily sales growth, exclusive of BDNA, is expected to be 4.6 percent.

Excluding non-recurring costs related to the co-location of the company's headquarters and non-recurring integration costs associated with BDNA, the company expects adjusted diluted earnings per share for the fiscal second quarter 2014 to be between $0.83 and $0.87.

The company expects the non-recurring costs related to the co-location of the company's headquarters to have a $0.01 impact and the integration costs related to the BDNA acquisition to have approximately a $0.05 impact on its GAAP diluted earnings per share in the fiscal second quarter 2014.

The implied adjusted operating margin for the fiscal second quarter at the midpoint of guidance is approximately 13 percent and represents what is expected to be the low point of the company's adjusted operating margin in fiscal 2014.

The company expects the non-recurring costs related to the co-location of the company's headquarters and the integration costs related to the BDNA acquisition to have approximately a 90 basis point impact on its GAAP operating margin in the fiscal second quarter 2014.


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