MSC Industrial Q2 net sales down 15%
Topics: MSC INDUSTRIAL
Net sales of $774.0 million, a 1.5% decrease from the prior year quarter.
Operating income of $28.0 million, or $80.5 million excluding $30.1 million in inventory write-downs, $21.6 million in restructuring costs, and $0.8 million in other charges.
Kristen Actis-Grande, Executive Vice President and Chief Financial Officer: "Average daily sales were $12.7 million for the quarter and our gross margin was 38.1%, a decline of 400 basis points versus the prior year due primarily to a roughly $30 million PPE write-down recorded during the quarter.
"Excluding this write-down, our adjusted gross margin was 42.0 percent, roughly flat sequentially and versus the prior year.
"Operating expenses as a percentage of sales was 31.7%, a 30 basis point improvement from the prior year period.
"During the quarter, our Mission Critical program delivered $9 million of gross cost out bringing our cumulative savings for fiscal 2021 to $17 million against our goal of $25 million by the end of this year. We also invested roughly $5 million in our fiscal second quarter growth programs.
"We are ahead of plan on savings, and our investment program is also progressing very well. In fact, the results are such that we anticipate making some additional growth investments to capture more of the opportunities that we are seeing. On balance, this means that our net savings target for Mission Critical remains roughly the same or slightly larger for the full year.
"Our goal remains $90 million to $100 million of gross cost savings through fiscal 2023 versus fiscal 2019, and we are currently tracking to the high end of that range. Our adjusted operating margin, excluding the write-down of PPE inventory and restructuring and other related costs, was up 30 basis points from the prior year due to our Mission Critical progress." ■