On April 4, MSC Industrial Direct (NYSE:MSM) released Q2 2007 earnings for the period ending Apr. 24.
- Sales for the quarter increased 32.3%. Seventy percent of the growth was from the acquisition last March of J&L Industrial Supply.
- Management reiterated its confidence in reaching $20 million in margin improvement from cost cutting related to the integration.
- However, management also noted there was a bit of slowdown in certain niches of its customer segments (notice that shares of Applied Industrial Technologies (NYSE:AIT) and Fastenal (Nasdaq FAST) are languishing). However, they believe even in a downturn they will continue to capture market share.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|
|
Sales |
$404,618 |
$305,927 |
32.3% |
|
Net Profit |
$40,507 |
$33,329 |
21.5% |
|
EPS |
$0.61 |
$0.49 |
24.5% |
|
Diluted Shares |
66,781 |
68,327 |
(2.3%) |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2007 |
Q2 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
46.36% |
47.54% |
(1.18) |
|
Operating Margin |
17.19% |
17.68% |
(0.49) |
|
Net Margin |
10.01% |
10.89% |
(0.88) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$5,054 |
$7,718 |
(34.5%) |
|
Accounts Rec. |
$197,894 |
$146,158 |
35.4% |
|
Inventory |
$309,754 |
$241,705 |
28.2% |
|
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$67,768 |
$44,943 |
50.8% |
|
Long-Term Debt |
$177,531 |
$905 |
NM* |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$73,717 |
$47,879 |
54.0% |
|
Capital Expenditures |
$14,729 |
$8,033 |
83.4% |
|
Free Cash Flow |
$58,988 |
$39,846 |
48.0% |
Free cash flow is a Fool's best friend.
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Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.
