Research Desk Line-up: Fastenal Post Earnings Coverage

LONDON, UK / ACCESSWIRE / July 14, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on MSC Industrial Direct Co., Inc. (NYSE: MSM), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=MSM, following the Company's announcement of its third quarter fiscal 2017 earnings results on July 11, 2017. The distributor of Metalworking and Maintenance, Repair and Operations ("MRO") products and services met earnings estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Industrial Equipment Wholesale Industry. Pro-TD has currently selected Fastenal Company (NASDAQ: FAST) for due-diligence and potential coverage as the Company announced on July 12, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Fastenal when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on MSM; also brushing on FAST. With the links below you can directly download the report of your stock of interest-free of charge at:

http://protraderdaily.com/optin/?symbol=MSM

http://protraderdaily.com/optin/?symbol=FAST

Earnings Reviewed

For its fiscal 2017 third quarter ended June 03, 2017, MSC Industrial reported net sales of $743.9 million, reflecting an increase of 2.3% compared to $727.5 million in Q3 FY16. The Company's revenue numbers missed analysts' estimates of $745.2 million.

MSC Industrial Q3 FY17 gross margin totaled 44.3%, down 70 basis points compared to the year-ago same period, and 30 basis points below the midpoint of its guidance. The Company's operating income was $101.8 million for the reported quarter, down 3.8% on a y-o-y basis, while operating margin fell 80 basis points to 13.7%.

MSC Industrial reported net income of $62.8 million, or $1.09 per share, for Q3 FY17 compared with earnings $64.8 million, or $1.05 per share in Q3 FY16. The Company's earnings numbers matched Wall Street's expectations of $1.09.

Sales Insights

During Q3 FY17, MSC Industrial's average daily sales (ADS) totaled $11.6 million, reflecting an increase of 3.8% on a y-o-y basis and slightly above the 3.5% midpoint of the Company's guidance range.

MSC Industrial's e-commerce segment's sales were 60.5% of its total sales in Q3 FY17, up from 58.6% in Q3 FY16. The Company's sales to Vending customers contributed roughly 300 basis points to growth in the reported quarter.

MSC Industrial added approximately 5,000 net SKUs in Q3 FY17, while its total active salable SKU count was over 1.5 million. The Company ended the reported quarter at 2,309 field sales and service associates versus 2,352 in the previous quarter, in-line with its expectations.

Cash Matters

MSC Industrial's DSO was 54 days in Q3 FY17, up 2 days sequentially, attributed to a temporary increase in receivables arising from the implementation of the Company's core financial system in April. MSC Industrial noted that it has observed a rise in collections and is expecting DSO to improve over the next 2 to 3 months.

For Q3 FY17, MSC Industrial's fee cash flow, or cash flow from operations minus capital expenditures, was $50 million compared to $95 million for Q3 FY16, with the increase primarily attributed to higher working capital. The Company's operating cash flow conversion ratio was approximately 99% in the reported quarter.

MSC Industrial's capital expenditures totaled $0.4 million in Q3 FY17 and approximately $38 million on a year-to-date basis. The Company is expecting fiscal 2017 capital expenditures to be around $55 million to $60 million.

As of the end of Q3 FY17, MSC Industrial had roughly $515 million in debt, mainly comprised of a $314 million revolving credit facility balance and $175 million of private placement debt. The Company had $28 million in cash and cash equivalents, and its bank leverage ratio was 1.1x.

On July 07, 2017, MSC Industrial announced that its Board of Directors has declared a cash dividend of $0.45 per share. The $0.45 dividend is payable on August 01, 2017, to shareholders of record at the close of business on July 18, 2017.

Outlook

For Q4 FY17, MSC Industrial is forecasting net sales to be in the range of $732 million and $746 million. At the midpoint, the Company's average daily sales are expected to increase roughly 7% on a y-o-y basis. MSC Industrial expects diluted earnings per share for the upcoming quarter to be between $0.97 and $1.01.

Stock Performance

At the closing bell, on Thursday, July 13, 2017, MSC Industrial Direct's stock declined 3.46%, ending the trading session at $72.19. A total volume of 2.75 million shares was traded at the end of the day, which was higher than the 3-month average volume of 664.65 thousand shares. Shares of the Company have a PE ratio of 18.24 and have a dividend yield of 2.49%. The stock currently has a market cap of $4.11 billion.

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