The Albany Gazette - MSC Industrial Supply Co. Reports Fiscal 2025 Fourth Quarter and Full Year Results

MELVILLE, NY AND DAVIDSON, NC / ACCESS Newswire / October 23, 2025 / MSC INDUSTRIAL SUPPLY CO. (NYSE:MSM), ("MSC", "MSC Industrial", or the "Company," "we", "us", or "our") 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 2025 fourth quarter and full year ended August 30, 2025.

Erik Gershwind, Chief Executive Officer, said, "Our fourth quarter results are evidence of the progress we are making through our Mission Critical strategy. We entered the year with three focus areas- maintain momentum in our high touch solutions, reenergize our core customer and optimize our cost to serve. As a result of execution in each of these priorities, we returned to daily sales growth in the fiscal fourth quarter for both the Core Customer and the total company. In fact, the Core Customer growth rate outpaced company average. We also returned to growth in earnings per share, with adjusted EPS in the quarter improving over 5% year over year. I am grateful for the hard work and dedication of our team members this year in supporting our goals."

Greg Clark, Interim Chief Financial Officer, added, "We finished the year on a positive note with average daily sales improving 2.7% compared to the prior year and adjusted operating margin of 9.2% both of which exceeded our outlook. Cash generation remained favorable during the quarter resulting in free cash flow conversion of 122% for the fiscal year, ahead of our annual target. We leveraged this strong cash flow performance and our healthy balance sheet to return approximately $229 million to shareholders in the form of dividends and share repurchases."

Martina McIsaac, President and Chief Operating Officer, concluded, "Looking out, I am encouraged by our performance exiting the fiscal year. As momentum builds, I gain increased confidence in our position to deliver profitable growth in fiscal 2026. We will continue advancing our growth initiatives and identifying areas to generate productivity, both of which are creating a strong foundation for future profitable growth. Our goal remains simple - to restore performance consistent with our long-term objectives of growing to 400 basis points or more above the IP Index and expanding adjusted operating margins to the mid-teens."

Full-Year Fiscal 2026 Outlook for Certain Financial Metrics

• Depreciation and amortization expense of ~$95M-$100M

• Interest and other expense of ~$35M

• Capital expenditures of ~$100M-$110M

• Free cash flow conversion¹ of ~90%

• Tax rate of ~24.5%-25.5%

⁽¹⁾ Guidance provided is a non-GAAP figure presented on an adjusted basis. For further details see the Non-GAAP financial measures information presented in the schedules accompanying this press release.

Conference Call Information

MSC will host a conference call today at 8:30 a.m. EDT to review the Company's fiscal 2025 fourth quarter and full year 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 1-888-506-0062 (U.S.) or 1-973-528-0011 (international) and providing the access code 420327.

An online archive of the broadcast will be available until November 6, 2025. The Company's reporting date for the fiscal 2026 first quarter is scheduled for January 7, 2026.

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 2.5 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 more than 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 MSC expects, believes or anticipates will or may occur in the future, including statements about results of operations and financial condition, expected future results, expected benefits from our investment and strategic plans and other initiatives, and expected future growth and profitability, 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, 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, energy and labor prices, and the impact of prolonged periods of low, high or rapid inflation; competition, including the adoption by competitors of aggressive pricing strategies or sales methods; industry consolidation and other changes in the industrial distribution sector; the applicability of laws and regulations relating to our status as a supplier to the U.S. government and public sector; the credit risk of our customers; our ability to accurately forecast customer demands; interruptions in our ability to make deliveries to customers; supply chain disruptions; our ability to attract and retain sales and customer service personnel; the risk of loss of key suppliers or contractors or key brands; changes to trade policies or trade relationships, including tariff policies; risks associated with opening or expanding our customer fulfillment centers; our ability to estimate the cost of healthcare claims incurred under our self-insurance plan; interruption of operations at our headquarters or customer fulfillment centers; products liability due to the nature of the products that we sell; impairments of goodwill and other indefinite-lived intangible assets; the impact of climate change; operating and financial restrictions imposed by the terms of our material debt instruments; our ability to access additional liquidity; the significant influence that our principal shareholders will continue to have over our decisions; our ability to execute on our E-commerce strategies and maintain our digital platforms; costs associated with maintaining our information technology ("IT") systems and complying with data privacy laws; disruptions or breaches of our IT systems or violations of data privacy laws, including such disruptions or breaches in connection with our E-commerce channels; risks related to online payment methods and other online transactions; our ability to remediate a material weakness in our internal control over financial reporting and to maintain effective internal control over financial reporting and our disclosure controls and procedures in the future; the retention of key management personnel; litigation risk due to the nature of our business; failure to comply with environmental, health, and safety laws and regulations; and our ability to comply with, and the costs associated with, social and environmental responsibility policies. 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.

MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Balance Sheets
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MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Income
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MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Comprehensive Income
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MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Cash Flows
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Non-GAAP Financial Measures

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 income from operations, non-GAAP operating margin, non-GAAP provision for income taxes, non-GAAP net income and non-GAAP diluted earnings per share, that exclude restructuring and other costs, loss on sale of property, share reclassification litigation costs, share reclassification costs (prior year) and acquisition-related costs (prior year) and tax effects, as well as free cash flow conversion, which is a measure calculated using free cash flow, which is a non-GAAP measure.

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 measure and should only be used to evaluate MSC's results of operations in conjunction with the corresponding GAAP financial measure.

This press release also includes certain forward-looking information that is not presented in accordance with GAAP. The Company believes that a quantitative reconciliation of such forward-looking information to the most directly comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts because a reconciliation of these non-GAAP financial measures would require the Company to predict the timing and likelihood of potential future events such as restructurings, M&A activity, capital expenditures and other infrequent or unusual gains and losses. Neither the timing or likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward-looking information to the most directly comparable GAAP financial measure is not provided.

• Free Cash Flow ("FCF") and Free Cash Flow Conversion ("FCF Conversion")

FCF is a non-GAAP financial measure. FCF is used in addition to and in conjunction with results presented in accordance with GAAP, and FCF should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review our financial statements and publicly-filed reports in their entirety and to not rely on any single financial measure. FCF, which we reconcile to "Net cash provided by operating activities," is cash flow from operations reduced by "Expenditures for property, plant and equipment". We believe that FCF, although similar to cash flow from operations, is a useful additional measure since capital expenditures are a necessary component of ongoing operations. Management also views FCF, as a measure of the Company's ability to reduce debt, add to cash balances, pay dividends, and repurchase stock. FCF has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, FCF does not incorporate payments made on finance lease obligations or required debt service payments. In addition, different companies define FCF differently. Therefore, we believe it is important to view FCF as a complement to our entire consolidated statements of cash flows. FCF Conversion is useful to investors for the foregoing reasons and as a measure of the rate at which the Company converts its net income reported in accordance with GAAP to cash inflows, which helps investors assess whether the Company is generating sufficient cash flow to provide an adequate return. A reconciliation of cash provided by operating activities to FCF, operating cash flow conversion and FCF conversion for the fiscal quarters and years ended August 30, 2025 and August 31, 2024, respectively, is shown below.

• Results Excluding Restructuring and Other Costs, Loss on Sale of Property, Share Reclassification Litigation Costs, Share Reclassification Costs (prior year) and Acquisition-Related Costs (prior year)

In calculating certain non-GAAP financial measures, we exclude restructuring and other costs, loss on sale of property, share reclassification litigation costs, share reclassification costs (prior year) and acquisition-related costs (prior year) 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.

MSC INDUSTRIAL DIRECT CO., INC.

Reconciliation of GAAP and Non-GAAP Financial Information

Fiscal Quarters and Years Ended August 30, 2025 and August 31, 2024

(dollars in thousands, except percentages)

MSC INDUSTRIAL DIRECT CO., INC.

Reconciliation of GAAP and Non-GAAP Financial Information

Fiscal Quarter Ended August 30, 2025

(In thousands, except percentages and per share data)

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.

Reconciliation of GAAP and Non-GAAP Financial Information

Fiscal Year Ended August 30, 2025

(In thousands, except percentages and per share data)

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.

Reconciliation of GAAP and Non-GAAP Financial Information

Fiscal Quarter Ended August 31, 2024

(In thousands, except percentages and per share data)

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.

Reconciliation of GAAP and Non-GAAP Financial Information

Fiscal Year Ended August 31, 2024

(In thousands, except percentages and per share data)

*Individual amounts may not agree to the total due to rounding.

SOURCE: MSC Industrial Direct Co.

View the original press release on ACCESS Newswire

(F.Allen--TAG)