MSC reports fiscal 2015 third quarter results
MSC Industrial Supply Co. (NYSE: MSM) reported in June results for its fiscal third quarter ended May 30, 2015.
Net sales for the fiscal third quarter 2015 were $745.5 million compared to net sales of $720.5 million in the same quarter a year ago, an increase of 3.5% on an average daily sales basis. Adjusted operating income for the fiscal third quarter 2015 was $104.5 million, or 14.0% of net sales, compared to $107.3 million, or 14.9% of net sales, in the same quarter a year ago. GAAP operating income for the fiscal third quarter 2015 was $104.2 million, or 14.0% of net sales, compared to $104.9 million, or 14.6% of net sales, in the same quarter a year ago.
Excluding the after-tax effects of non-recurring costs, adjusted net income for the fiscal third quarter 2015 was $63.5 million, or $1.03 per diluted share, compared to $66.2 million, or $1.06 per diluted share, in the same quarter a year ago. GAAP net income for the fiscal third quarter 2015 was $63.3 million, or $1.03 per diluted share, compared to $64.7 million, or $1.03 per diluted share, in the same quarter a year ago.
Comments from executives
Erik Gershwind, president and chief executive officer, said, “Our organic growth for the third quarter was in-line with our guidance and reflected the continued impact of the soft pricing environment and the lingering effects of the rapid change in oil prices, softening export demand, and foreign exchange headwinds, all of which continue to drag on broader manufacturing activity. We did, however, see growth well above the market driven by continued traction from our share gain programs as customers increasingly leverage our supply chain solutions.”
Jeff Kaczka, executive vice president and chief financial officer, said, “Despite the challenging demand environment, we achieved earnings per share well above our guidance range. A key driver was the prompt actions that we took to manage our operating expenses. We achieved operating expenses as a percent of sales at the same level as the year ago quarter, even though sales growth was only low single-digits and we increased our investment spending. The second driver was another quarter of gross margin stabilization, which reflected our successful countermeasure efforts, offset by the gross margin headwinds from large account growth and the soft pricing environment.”
Mr. Gershwind concluded, “Between the large and fragmented MRO marketplace where large customers are consolidating their spend, the positive impact that lower energy prices will have on U.S. manufacturing, and our actions to strategically grow our business in value-added, high-retention market segments, I have great confidence that we are well positioned.”
MSC expects net sales for fiscal fourth quarter 2015 to be between $735 million and $747 million. At the midpoint, average daily sales growth is expected to be 2.0%.
MSC Industrial Supply Co. (NYSE: MSM) provides more than one million products, inventory management and other supply chain solutions, and deep expertise from more than 70 years of working with customers across industries. MSC employs more than 6,500 associates.