MSC Industrial (NYSE: MSM) reported Q4 EPS of $1.09, $0.13 better than the analyst estimate of $0.96. Revenue for the quarter came in at $747.7 million versus the consensus estimate of $750.72 million.

FISCAL Q4 2020 HIGHLIGHTS

• Net sales of $747.7 million, a decrease of 11.3% YoY (12.7% decrease on an ADS basis)
• Operating income of $72.9 million, or $84.1 million excluding restructuring and related costs of $11.2 million*
• Operating margin of 9.8%, or 11.2% excluding restructuring and other related costs*
• Diluted EPS of $0.94 vs. $1.20 in the prior year quarter
• Adjusted diluted EPS of $1.09 vs. $1.30 in the prior year quarter*

Erik Gershwind, president and chief executive officer, said, "Our fiscal fourth quarter reflects continued solid execution in a weak industrial demand environment. Most manufacturing end markets remain soft given COVID-19 uncertainty. We did, however, see sequential improvement in sales of non-safety and non-janitorial products. Sales of safety and janitorial products also continued growing year-over-year at roughly 20% percent each month on average and for the quarter. Overall gross margin for the quarter declined 40 basis points, reflecting PPE mix headwinds and underlying gross margin stability due to strong realization from our annual price increase, and continued benefits from our supplier programs."

Kristen Actis-Grande, executive vice president and chief financial officer, added, "Average daily sales were $11.7 million for the quarter as industrial demand remained weak. While our reported operating margin was down 90 basis points versus the prior year, excluding restructuring and other related costs, adjusted operating margin was down only 30 basis points. We implemented swift cost containment measures due to COVID-19 and took structural cost actions in the quarter. After significant debt repayment, our balance sheet and liquidity position remain very healthy."

Gershwind concluded, "We have been repositioning MSC from a spot buy supplier to a mission critical partner on the plant floor of our industrial customers over the last few years. Over the next three years, we will be taking measurable action to reaccelerate market share capture and improve profitability in a program named Mission Critical. The 2023 targets for this program are above market growth of at least 400 basis points and ROIC in the high-teens."

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