MSC Industrial Direct Q1 Profit Down; But Results Top Estimates - Quick Facts

(RTTNews) - MSC industrial direct co., Inc. (MSM) reported that GAAP net income for the first quarter of fiscal 2014 was $59.0 million, or $0.93 per share, down from $63.2 million, or $1.00 per share, 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 share, compared to $64.0 million, or $1.01 per share, a year ago. The BDNA operations contributed approximately $0.05 to the fiscal first quarter earnings per share. Analysts polled by Thomson Reuters expected the company to report earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the first quarter of fiscal 2014 were $678.5 million, an increase of 17.5% over net sales of $577.5 million in the first quarter of fiscal 2013. Fourteen analysts estimated revenues of $668.96 million for the quarter.

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

Jeff Kaczka, Executive Vice President and Chief Financial Officer, said, " From an adjusted operating margin standpoint, we expect that our fiscal second quarter will be the low point for fiscal 2014. We remain on track to achieve an annual adjusted operating margin consistent with our fiscal 2014 operating framework assuming a continuing low to moderate sales growth environment."

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 earnings per share for the fiscal second quarter 2014 to be between $0.83 and $0.87. Analysts project second-quarter earnings of $0.92 per share.

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 earnings per share in the fiscal second quarter 2014.

Looking beyond the second fiscal quarter, adjusted operating expenses are expected to continue to build in support of the Company's growth and infrastructure initiatives. However, with the exception of volume-related variable costs, which are a function of sales levels, the Company's base adjusted operating expenses are expected to grow more moderately through the second half of the fiscal year.

The company said it remains on track to achieve fiscal year 2014 adjusted operating margin consistent with its fiscal 2014 operating framework assuming a continuing low to moderate sales growth environment.