Rutland Tool acquisition adds $6.6 million in sales
MSC Industrial Direct, one of the largest direct marketers and premier distributors of Metalworking and Maintenance, Repair and Operations ("MRO") supplies to industrial customers throughout the United States, today reported that net sales for its second quarter rose 22.2% to $483.4 million, compared with $395.5 million in the prior year period.
Operating income increased 61.6% in the fiscal 2011 second quarter to $80.6 million, or 16.7% of net sales, from $49.9 million, or 12.6% of net sales, in the second quarter of fiscal 2010. For the second quarter of fiscal 2011, the Company reported net income of $49.7 million, an increase of 62.1% over net income of $30.6 million in the second quarter of fiscal 2010.
During the quarter, the Company completed the integration of its previously announced acquisition of Rutland Tool & Supply Co.. The company's results for the quarter included $6.6 million in sales from Rutland. Excluding acquisition and integration costs, Rutland broke even for the period. Pre-tax acquisition and integration costs incurred by the Company during the quarter were $1.65 million, resulting in a dilution of $0.016 per share, which was better than prior expectations.
Net sales for the first half of fiscal 2011 were $956.2 million, compared with net sales of $780.3 million in the first half of fiscal 2010.
David Sandler, President and Chief Executive Officer said, "I'm absolutely delighted with our performance and the strong financial results that our team delivered, driven by excellent execution, stronger demand across our customers than originally anticipated and continued gains in market share. We continue to execute against our strategic plan, delivering the growth in sales, earnings, and operating margin percentage that we were confident would result from our investments and model in a recovering market."
Erik Gershwind, Executive Vice President and Chief Operating Officer, stated, "We achieved strong results in the quarter led by significant growth within our core customer base. Our strong gross margin of 46.8% is primarily a function of improved rebates, excellent realization of the pricing adjustment we made around the holidays, and the growth in our core business. During the quarter, we also successfully completed the Rutland integration ahead of schedule, and that business delivered better results than we originally anticipated."
Mr. Sandler concluded, "Our results demonstrate the inherent leverage and power of our business model. We have seen significant benefits from our strategic growth programs, and we will continue to invest in these initiatives going forward. We are very encouraged by our progress, the performance of our investments, and recent strong economic trends, all of which bode well for the future."
For the fiscal 2011 third quarter, the Company expects net sales to be between $524 million and $536 million and expects diluted earnings per share for the third quarter of fiscal 2011 to be between $0.90 and $0.94.