MSC Industrial sales up in weaker market
Melville-based MSC Industrial Direct Co., a distributor of industrial tools and supplies, reported higher quarterly sales Wednesday but said its operating margin would decline next year as the company invests for the future.
The company's shares fell $5.78, or nearly 7 percent, to close at $77.61 on the New York Stock Exchange Wednesday.
MSC said that despite weaker demand for its products its fiscal fourth-quarter sales rose 6.1 percent from a year ago to $673.8 million.
Sales in the quarter ended Aug. 31 exceeded the $669.4- million consensus estimate of analysts surveyed by Bloomberg.
But looking to next year, Erik Gershwind, president and chief executive, said that MSC sees "fiscal 2014 as the low point for the operating margins" as the company implements its infrastructure and growth initiatives.
Net income for the company dropped to $56.4 million in the fourth quarter from $69 million in the quarter the year before.
Net income included $6.4 million of nonrecurring charges related to a recent acquisition and the building of a co-headquarters in North Carolina.
MSC said the company it acquired in April, Cleveland-based Barnes Distribution North America, contributed about $73.6 million to fourth-quarter sales. In September the company inaugurated its new co-headquarters in Davidson, N.C.
For the year, sales rose to $2.46 billion from $2.36 billion the year before. Net income dropped to $238 million from $259 million a year earlier.
"Consistent with our outlook, a soft market environment persisted in the fiscal fourth quarter, particularly in metalworking, where spending remained at depressed levels," Gershwind said. "However, the success of our share-gain programs and customer penetration initiatives such as e-commerce and vending continued despite this weakness."