Posted April 8, 2020

MSC 2Q sales decline 4.5 percent

MSC Industrial Supply reported that its second-quarter sales of $786.1 million declined 4.5 percent from $823 million in the same period last year.

Net income of $55.5 million, or $1 per diluted share, compared to $68.4 million, or $1.24 in last year's second quarter.

Erik Gershwind, president and chief executive officer, said the company has launched a company-wide business continuity effort to navigate through the COVID crisis.

"We have instituted enhanced safety procedures, including use of additional protective equipment, frequent cleanings of our facilities, and stay at home policies for associates who can work from home. Given we are providing essential services to many organizations on the front lines, we do not plan to shut down our customer fulfillment centers. We will, of course, follow the guidance of health officials, and we are in close contact with them across our operating footprint,” he said.

Greg Clark, vice president and interim chief financial officer, said the second quarter results reflected solid execution in a relatively soft environment. "As March progressed and we began to see the impact of COVID-19, our focus quickly shifted to ensuring business continuity. We reduced spending across the company and took actions to further improve our liquidity position, including drawing down $300 million from our revolving credit facility."

He said MSC is closely monitoring inventory levels, but intends to use inventory as a competitive differentiator. 

Gershwind added that revenues were up compared to the prior year over the first three weeks in the quarter, but then sales dropped off significantly over the last two weeks as customer shutdowns spread rapidly across the nation. As the month progressed, large orders and sales of safety and janitorial products surged, particularly to government customers, while sales of other product lines dropped significantly.