Msc Industrial Direct Co Inc 10-Q for FY2026 Q1
Msc Industrial Direct Co Inc (MSM)
10-Q
2026-01-07
For: 2025-11-29
View Original
Added on
April 08, 2026
About this 10-Q
Msc Industrial Direct Co Inc filed this 10-Q on January 7, 2026, covering the quarter ended November 29, 2025 (FY2026 Q1).
Headline figures
Quarter ended November 29, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $965.68M
- up 4.0% from $928.48M a year earlier
- Net income
- $51.8M
- up 11.1% from net income of $46.62M a year earlier
- Diluted EPS
- $0.93
- up 12.0% from $0.83 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-Q
______________________________
| (Mark One) | |||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____ to _____
Commission File Number: 1-14130
__________________
(Exact name of registrant as specified in its charter)
__________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) | ||||
(516 ) 812-2000
(Registrant’s telephone number, including area code)
__________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of December 19, 2025, 55,803,307 shares of Class A Common Stock of the registrant were outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Discussions containing such forward‑looking statements may be found in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 3, “Quantitative and Qualitative Disclosures About Market Risk” of Part I and Item 1, “Legal Proceedings” and Item 1A, “Risk Factors” of Part II of this Report, as well as within this Report generally. The words “will,” “may,” “believes,” “anticipates,” “thinks,” “expects,” “estimates,” “plans,” “intends” and similar expressions are intended to identify forward‑looking statements. In addition, statements which refer to expectations, projections or other characterizations of future events or circumstances, statements involving a discussion of strategy, plans or intentions, statements about management’s assumptions, projections or predictions of future events or market outlook and any other statement other than a statement of present or historical fact are forward‑looking statements. MSC Industrial Direct Co., Inc. (together with its wholly owned subsidiaries and entities in which it maintains a controlling financial interest, “MSC,” “MSC Industrial,” the “Company,” “we,” “us” or “our”) expressly disclaims any obligation to publicly disclose any revisions to these forward‑looking statements to reflect events or circumstances occurring subsequent to filing this Report with the United States Securities and Exchange Commission (the “SEC”), except to the extent required by applicable law. These forward‑looking statements are subject to risks and uncertainties, including, without limitation, those discussed in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 3, “Quantitative and Qualitative Disclosures About Market Risk” of Part I and Item 1, “Legal Proceedings” and Item 1A, “Risk Factors” of Part II of this Report, as well as in Item 1A, “Risk Factors” of Part I and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of Part II of our Annual Report on Form 10-K for the fiscal year ended August 30, 2025. In addition, new risks may emerge from time to time and it is not possible for management to predict such risks or to assess the impact of such risks on our business or financial results. Accordingly, future results may differ materially from historical results or from those discussed or implied by these forward‑looking statements. Given these risks and uncertainties, the reader should not place undue reliance on these forward‑looking statements. These risks and uncertainties include, but are not limited to, the following:
•general economic conditions in the markets in which we operate;
•changing customer and product mixes;
•volatility in commodity, energy and labor prices and the impact of prolonged periods of low, high or rapid inflation;
•competition, including the adoption by competitors of aggressive pricing strategies or sales methods;
•industry consolidation and other changes in the industrial distribution sector;
•the applicability of laws and regulations relating to our status as a supplier to the U.S. government and public sector and the impact of any lapse in funding for the federal government;
•the credit risk of our customers;
•our ability to accurately forecast customer demand;
•interruptions in our ability to make deliveries to customers;
•supply chain disruptions;
•our ability to attract and retain sales and customer service personnel;
•the risk of loss of key suppliers or contractors or key brands;
•changes to trade policies or trade relationships, including tariff policies;
•risks associated with opening or expanding our customer fulfillment centers (“CFCs”);
•our ability to estimate the cost of healthcare claims incurred under our self-insurance plan;
•interruption of operations at our headquarters or CFCs;
•products liability due to the nature of the products that we sell;
•impairments of goodwill and other indefinite-lived intangible assets;
•the impact of climate change;
•operating and financial restrictions imposed by the terms of our material debt instruments;
•our ability to access additional liquidity;
•the significant influence that our principal shareholders will continue to have over our decisions;
•our ability to execute on our E-commerce strategies and to maintain our digital platforms;
•costs associated with maintaining our information technology (“IT”) systems and complying with data privacy laws;
•disruptions or breaches of our IT systems or violations of data privacy laws, including such disruptions or breaches in connection with our E-commerce channels;
•risks related to online payment methods and other online transactions;
•the retention of key management personnel;
•litigation risk due to the nature of our business;
•failure to comply with environmental, health, and safety laws and regulations; and
•our ability to comply with, and the costs associated with, social and environmental responsibility policies.
MSC INDUSTRIAL DIRECT CO., INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED NOVEMBER 29, 2025
TABLE OF CONTENTS
| Page | ||||||||
i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
MSC INDUSTRIAL DIRECT CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
| November 29, 2025 | August 30, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Identifiable intangibles, net | |||||||||||
| Operating lease assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Current portion of debt including obligations under finance leases | $ | $ | |||||||||
| Current portion of operating lease liabilities | |||||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt including obligations under finance leases | |||||||||||
| Noncurrent operating lease liabilities | |||||||||||
| Deferred income taxes and tax uncertainties | |||||||||||
| Total liabilities | |||||||||||
| Commitments and Contingencies | |||||||||||
| Shareholders’ Equity: | |||||||||||
| MSC Industrial Shareholders’ Equity: | |||||||||||
Preferred Stock; $ | |||||||||||
Class A Common Stock; $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
Class A treasury stock, at cost, | ( | ( | |||||||||
| Total MSC Industrial shareholders’ equity | |||||||||||
| Noncontrolling interest | |||||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
1
MSC INDUSTRIAL DIRECT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Net sales | $ | $ | |||||||||
| Cost of goods sold | |||||||||||
| Gross profit | |||||||||||
| Operating expenses | |||||||||||
| Restructuring and other costs | |||||||||||
| Income from operations | |||||||||||
| Other income (expense): | |||||||||||
| Interest expense | ( | ( | |||||||||
| Interest income | |||||||||||
| Other expense, net | ( | ( | |||||||||
| Total other expense | ( | ( | |||||||||
| Income before provision for income taxes | |||||||||||
| Provision for income taxes | |||||||||||
| Net income | |||||||||||
| Less: Net loss attributable to noncontrolling interest | ( | ( | |||||||||
| Net income attributable to MSC Industrial | $ | $ | |||||||||
| Per share data attributable to MSC Industrial: | |||||||||||
| Net income per common share: | |||||||||||
| Basic | $ | $ | |||||||||
| Diluted | $ | $ | |||||||||
| Weighted-average shares used in computing net income per common share: | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
2
MSC INDUSTRIAL DIRECT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Net income, as reported | $ | $ | |||||||||
| Other comprehensive income, net of tax: | |||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||
Comprehensive income(1) | |||||||||||
| Comprehensive income attributable to noncontrolling interest: | |||||||||||
| Net loss | |||||||||||
| Foreign currency translation adjustments | ( | ||||||||||
| Comprehensive income attributable to MSC Industrial | $ | $ | |||||||||
(1)There were no material taxes associated with other comprehensive income during the thirteen-week periods ended November 29, 2025 and November 30, 2024.
See accompanying Notes to Condensed Consolidated Financial Statements.
3
MSC INDUSTRIAL DIRECT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)
(Unaudited)
| Thirteen Weeks Ended | ||||||||
| November 29, 2025 | November 30, 2024 | |||||||
| Class A Common Stock | ||||||||
| Beginning Balance | $ | $ | ||||||
| Ending Balance | ||||||||
| Additional Paid-in Capital | ||||||||
| Beginning Balance | ||||||||
| Associate Incentive Plans | ||||||||
| Repurchase and retirement of Class A Common Stock, including excise tax | ( | ( | ||||||
| Purchase of Noncontrolling Interest | ( | |||||||
| Ending Balance | ||||||||
| Retained Earnings | ||||||||
| Beginning Balance | ||||||||
| Net Income | ||||||||
| Repurchase and retirement of Class A Common Stock, including excise tax | ( | ( | ||||||
| Regular cash dividends declared on Class A Common Stock | ( | ( | ||||||
| Dividend equivalents declared, net of cancellations | ( | ( | ||||||
| Ending Balance | ||||||||
| Accumulated Other Comprehensive Loss | ||||||||
| Beginning Balance | ( | ( | ||||||
| Foreign Currency Translation Adjustment | ( | ( | ||||||
| Ending Balance | ( | ( | ||||||
| Treasury Stock | ||||||||
| Beginning Balance | ( | ( | ||||||
| Associate Incentive Plans | ||||||||
| Repurchase of Class A Common Stock, including excise tax | ( | ( | ||||||
| Ending Balance | ( | ( | ||||||
| Total Shareholders’ Equity Attributable to MSC Industrial | ||||||||
| Noncontrolling Interest | ||||||||
| Beginning Balance | ||||||||
| Foreign Currency Translation Adjustment | ( | |||||||
| Net loss | ( | ( | ||||||
| Purchase of Noncontrolling Interest | ( | |||||||
| Ending Balance | ||||||||
| Total Shareholders’ Equity | $ | $ | ||||||
| Dividends declared per Class A Common Share | $ | $ | ||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
4
MSC INDUSTRIAL DIRECT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of cloud computing arrangements | |||||||||||
| Non-cash operating lease cost | |||||||||||
| Stock-based compensation | |||||||||||
| Loss on disposal of property, plant and equipment | |||||||||||
| Gain on sale of property | ( | ||||||||||
| Non-cash changes in fair value of estimated contingent consideration | |||||||||||
| Provision for credit losses | |||||||||||
| Expenditures for cloud computing arrangements | ( | ( | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventories | ( | ||||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other assets | ( | ||||||||||
| Accounts payable and accrued liabilities | ( | ||||||||||
| Total adjustments | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Expenditures for property, plant and equipment | ( | ( | |||||||||
| Cash used in acquisitions, net of cash acquired | ( | ( | |||||||||
| Net proceeds from sale of property | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash Flows from Financing Activities: | |||||||||||
| Repurchases of Class A Common Stock | ( | ( | |||||||||
| Payments of regular cash dividends | ( | ( | |||||||||
| Proceeds from sale of Class A Common Stock in connection with Associate Stock Purchase Plan | |||||||||||
| Proceeds from exercise of Class A Common Stock options | |||||||||||
| Borrowings under credit facilities | |||||||||||
| Payments under credit facilities | ( | ( | |||||||||
| Purchase of noncontrolling interest | ( | ||||||||||
| Other, net | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | ( | ( | |||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents—beginning of period | |||||||||||
| Cash and cash equivalents—end of period | $ | $ | |||||||||
| Supplemental Disclosure of Cash Flow Information: | |||||||||||
| Cash paid for income taxes | $ | $ | |||||||||
| Cash paid for interest | $ | $ | |||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
5
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
Note 1. Basis of Presentation
The unaudited Condensed Consolidated Financial Statements have been prepared by the management of MSC Industrial Direct Co., Inc. (together with its wholly owned subsidiaries and entities in which it maintains a controlling financial interest, “MSC Industrial” or the “Company”) and in the opinion of management include all normal recurring adjustments necessary to present fairly the Company’s financial position as of November 29, 2025 and August 30, 2025, results of operations for the thirteen weeks ended November 29, 2025 and November 30, 2024, and cash flows for the thirteen weeks ended November 29, 2025 and November 30, 2024. The financial information as of August 30, 2025 was derived from the Company’s audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 30, 2025.
Fiscal Year
The Company operates on a 52/53-week fiscal year ending on the Saturday closest to August 31st of each year. References to “fiscal year 2026” refer to the period from August 31, 2025 to August 29, 2026, which is a 52-week fiscal year. References to “fiscal year 2025” refer to the period from September 1, 2024 to August 30, 2025, which is a 52-week fiscal year. The fiscal quarters ended November 29, 2025 and November 30, 2024 refer to the thirteen weeks ended as of those dates.
Principles of Consolidation
The unaudited Condensed Consolidated Financial Statements include the accounts of MSC Industrial Direct Co., Inc., its wholly owned subsidiaries and entities in which it maintains a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation.
Accounting Standards Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. The ASU primarily enhances and expands both the income tax rate reconciliation disclosure and the income taxes paid disclosure. The ASU is effective for annual periods beginning after December 15, 2024 (MSC’s fiscal year 2026) on a prospective basis. The Company is currently evaluating the standard to determine the impact of adoption on its disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires public entities to include more detailed disclosures about specific categories of expenses such as inventory purchases, employee compensation, depreciation, amortization and selling costs within the notes to the financial statements. The ASU is effective for fiscal year periods beginning after December 15, 2026 (MSC’s fiscal year 2028) and interim periods within fiscal years beginning after December 15, 2027 (MSC’s first quarter of fiscal year 2029), with early adoption permitted. The adoption of this guidance is not expected to affect the Company’s Consolidated Financial Statements and the Company is currently evaluating the standard to determine the impact of adoption on its disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Targeted Improvements to Accounting for Internal-Use Software. The ASU primarily amends guidance for
6
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
accounting and disclosure of internal-use software, including clarifying the requirements for capitalizing costs and removal of references to the stage-based approach for capitalizing costs. The ASU is effective for annual periods beginning after December 15, 2027 (MSC’s fiscal year 2029) on a prospective, retrospective or modified prospective approach. The Company is currently evaluating the standard to determine the impact of adoption on its Consolidated Financial Statements and disclosures.
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to have a material impact on the Consolidated Financial Statements.
Note 2. Revenue
Revenue Recognition
Net sales include product revenue and shipping and handling charges, net of estimated sales returns and any related sales incentives. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. All revenue is recognized when the Company satisfies its performance obligations under the contract, which is determined to occur when the customer obtains control of the products, and invoicing occurs at approximately the same point in time. The Company’s product sales have standard payment terms that do not exceed one year . The Company considers shipping and handling as activities to fulfill its performance obligations. Substantially all of the Company’s contracts have a single performance obligation, to deliver products, and are short-term in nature. The Company estimates product returns based on historical return rates. Total accrued sales returns were $6,923 and $7,089 as of November 29, 2025 and August 30, 2025, respectively, and are reported as Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets. Sales taxes and value-added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.
Consideration Payable to Customers
The Company offers customers sales incentives, which primarily consist of volume rebates, and upfront sign-on payments. These volume rebates and sign-on payments are not in exchange for a distinct good or service and result in a reduction of net sales from the goods transferred to the customer at the later of when the related revenue is recognized or when the Company promises to pay the consideration. The Company estimates its volume rebate accruals and records its sign-on payments based on various factors, including contract terms, historical experience, and performance levels. Total accrued sales incentives, primarily related to volume rebates, were $27,999 and $22,948 as of November 29, 2025 and August 30, 2025, respectively, and are included in Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets. Sign-on payments, not yet recognized as a reduction of net sales, are recorded in Prepaid expenses and other current assets in the unaudited Condensed Consolidated Balance Sheets and were $6,218 and $6,723 as of November 29, 2025 and August 30, 2025, respectively.
Contract Assets and Liabilities
The Company records a contract asset when it has a right to payment from a customer that is conditioned on events other than the passage of time. The Company records a contract liability when customers prepay but the Company has not yet satisfied its performance obligations. The Company did not
Disaggregation of Revenue
The Company serves a large number of customers of various types and in diverse industries, which are subject to different economic and industry factors. The Company’s presentation of net sales by customer end-market, customer type and geography most reasonably depicts how the nature, amount, timing and uncertainty of Company revenue and cash flows are affected by economic and industry factors. The Company does not disclose net sales information by product category as it is impracticable to do so as a result of its numerous product offerings and the way its business is managed.
7
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
The following table presents the Company’s percentage of revenue by customer end-market for the thirteen-week period ended November 29, 2025 and November 30, 2024:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Manufacturing Heavy | % | % | |||||||||
| Manufacturing Light | % | % | |||||||||
| Public Sector | % | % | |||||||||
| Retail/Wholesale | % | % | |||||||||
| Commercial Services | % | % | |||||||||
Other (1) | % | % | |||||||||
| Total | % | % | |||||||||
(1)The Other category primarily makes up specific industry classifications that do not individually exceed 3% of net sales.
The Company groups customers into three categories by type of customer: national account, public sector and core and other. National account customers include Fortune 1000 companies, large privately held companies, and international companies doing business in North America. Public sector customers are governments and their instrumentalities such as federal agencies, state governments, and public sector healthcare providers. Federal government customers include the United States General Services Administration, the United States Department of Defense, the United States Marine Corps, the United States Coast Guard, the United States Postal Service, the United States Department of Energy, large and small military bases, Veterans Affairs hospitals, and correctional facilities. The Company has individual state and local contracts, as well as contracts through partnerships with several state co-operatives. Core and other customers are those customers that are not national account customers or public sector customers.
The following table presents the Company’s percentage of revenue by customer type for the thirteen-week period ended November 29, 2025 and November 30, 2024:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| National Account Customers | % | % | |||||||||
| Public Sector Customers | % | % | |||||||||
| Core and Other Customers | % | % | |||||||||
| Total | % | % | |||||||||
The Company’s revenue originating from the following geographic areas was as follows for the thirteen-week period ended November 29, 2025 and November 30, 2024:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| United States | % | % | |||||||||
| Mexico | % | % | |||||||||
| Canada | % | % | |||||||||
| North America | % | % | |||||||||
| Other foreign countries | % | % | |||||||||
| Total | % | % | |||||||||
8
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
Note 3. Net Income per Share
Basic net income per share is computed by dividing net income by the weighted-average number of shares of the Company’s Class A Common Stock (“Class A Common Stock”) outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of Class A Common Stock outstanding during the period, including potentially dilutive shares of Class A Common Stock equivalents outstanding during the period. The dilutive effect of potential shares of Class A Common Stock is determined using the treasury stock method. The following table sets forth the computation of basic and diluted net income per common share under the treasury stock method for the thirteen-week period ended November 29, 2025 and November 30, 2024:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Numerator: | |||||||||||
| Net income attributable to MSC Industrial, as reported | $ | $ | |||||||||
| Denominator: | |||||||||||
| Weighted-average shares outstanding for basic net income per share | |||||||||||
| Effect of dilutive securities | |||||||||||
| Weighted-average shares outstanding for diluted net income per share | |||||||||||
| Net income per share: | |||||||||||
| Basic | $ | $ | |||||||||
| Diluted | $ | $ | |||||||||
| Potentially dilutive securities | |||||||||||
Potentially dilutive securities attributable to outstanding share-based awards are excluded from the calculation of diluted net income per share when the combined exercise price and average unamortized fair value are greater than the average market price of Class A Common Stock, and, therefore, their inclusion would be anti-dilutive.
Note 4. Stock-Based Compensation
The Company accounts for all stock-based payments in accordance with Accounting Standards Codification Topic 718, “Compensation—Stock Compensation,” as amended. Stock-based compensation expense included in Operating expenses for the thirteen-week period ended November 29, 2025 and November 30, 2024 was as follows:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
Stock-based compensation expense (1) | $ | $ | |||||||||
| Deferred income tax benefit | ( | ( | |||||||||
| Stock-based compensation expense, net | $ | $ | |||||||||
(1)Includes equity award acceleration costs associated with associate severance and separation, which are included in Restructuring and other costs in the unaudited Condensed Consolidated Statements of Income for the thirteen-week period ended November 29, 2025. See Note 10, “Restructuring and Other Costs” for additional information.
Restricted Stock Units and Performance Share Units
The Company grants restricted stock units (“RSUs”) and performance share units (“PSUs”) as part of its long-term stock-based compensation program. RSUs vest over four-years or five-years , depending on the position of the associate, and PSUs cliff vest after a three-year performance period based on the achievement of specific performance
9
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
goals as set forth in the applicable award agreement. Based on the extent to which the performance goals are achieved, vested shares may range from 0 % to 200 % of the target award amount. If the performance conditions are not met or are not expected to be met, recognized compensation expense associated with the grant will be reversed.
The following table summarizes the Company’s non-vested RSU and PSU award activity under the MSC Industrial Direct Co., Inc. 2015 Omnibus Incentive Plan (the “2015 Omnibus Incentive Plan”) and the 2023 Omnibus Incentive Plan (the “2023 Omnibus Incentive Plan”) (based on target award amounts for PSUs) for the thirteen-week period ended November 29, 2025:
| Restricted Stock Units | Performance Share Units | ||||||||||||||||||||||
| Shares | Weighted-Average Grant Date Fair Value per Share | Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||||||||||||
Non-vested at August 30, 2025 | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Vested | ( | ||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||
Non-vested at November 29, 2025 (1) | $ | $ | |||||||||||||||||||||
The fair value of each RSU and PSU granted is the closing stock price on the New York Stock Exchange of Class A Common Stock on the date of grant. RSUs are expensed over the vesting period of each respective grant and PSUs are expensed over the three-year performance period of each respective grant. Forfeitures of share-based awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimated forfeitures. The Company uses historical data to estimate pre-vesting RSU and PSU forfeitures and records stock-based compensation expense only for RSU and PSU awards that are expected to vest. Upon vesting, and, in the case of the PSUs, subject to the achievement of specific performance goals, a portion of the RSU and PSU awards may be withheld to satisfy the statutory income tax withholding obligation, and the remaining RSUs and PSUs will be settled in shares of Class A Common Stock. These awards accrue dividend equivalents on the underlying RSUs and PSUs (in the form of additional stock units) based on dividends declared on Class A Common Stock, and these dividend equivalents are paid to the award recipient in the form of unrestricted shares of Class A Common Stock on the vesting dates of the underlying RSUs and PSUs, subject, in the case of the dividend equivalents on the underlying PSUs, to the same performance vesting requirements. The unrecognized stock-based compensation costs related to the RSUs and PSUs at November 29, 2025 were $37,185 and $7,472 , respectively, which are expected to be recognized over a weighted-average period of 3.2 and 2.2 years, respectively.
Stock Options
Subsequent to the stock option grant in fiscal year 2019, the Company discontinued its grants of stock options. During the first quarter of fiscal year 2026, all remaining outstanding stock option awards were forfeited and there were no stock option awards outstanding as of November 29, 2025.
Note 5. Fair Value
Fair value accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The below fair value hierarchy prioritizes the inputs used to measure fair value into three levels, with Level 1 being of the highest priority. The three levels of inputs used to measure fair value are as follows:
Level 1— Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2— Include other inputs that are directly or indirectly observable in the marketplace.
Level 3— Unobservable inputs which are supported by little or no market activity.
10
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and outstanding indebtedness. Cash and cash equivalents include investments in a money market fund which are reported at fair value. The fair value of money market funds is determined using quoted prices for identical investments in active markets, which are considered to be Level 1 inputs within the fair value hierarchy. The Company uses a market approach to determine the fair value of its debt instruments, utilizing quoted prices in active markets, interest rates and other relevant information generated by market transactions involving similar instruments. Therefore, the inputs used to measure the fair value of the Company’s debt instruments are classified as Level 2 within the fair value hierarchy. The reported carrying amounts of the Company’s financial instruments approximated their fair values as of November 29, 2025 and November 30, 2024.
During the thirteen-week period ended November 29, 2025 and November 30, 2024, the Company had no
Note 6. Accounts Receivable
Accounts receivables at November 29, 2025 and August 30, 2025 consisted of the following:
| November 29, 2025 | August 30, 2025 | ||||||||||
| Accounts receivable | $ | $ | |||||||||
| Less: allowance for credit losses | |||||||||||
| Accounts receivable, net | $ | $ | |||||||||
In the second quarter of fiscal year 2023, the Company entered into a Receivables Purchase Agreement (the “RPA”), by and among MSC A/R Holding Co., LLC, a wholly owned subsidiary of the Company (the “Receivables Subsidiary”), as seller, the Company, as master servicer, certain purchasers from time to time party thereto (collectively, the “Purchasers”), and Wells Fargo Bank, National Association, as administrative agent. Under the RPA, the Receivables Subsidiary may sell certain eligible receivables to the Purchasers. The RPA, which was scheduled to mature on December 19, 2025, was amended in December 2025. The amendment provided for, among other things, an extension of the scheduled termination date to December 8, 2028, the addition of a joining purchaser and an increase to the maximum aggregate commitment by $50,000 to a total of $350,000 . The RPA continues to include customary representations and warranties for facilities of this type.
The Company continues to provide collection services for the receivables sold to the Purchasers. As cash is collected on sold receivables, the Receivables Subsidiary continuously sells new qualifying receivables to the Purchasers so that the total principal amount outstanding of receivables sold is approximately $300,000 . During the thirteen-week period ended November 29, 2025, receivables sold and collected under the RPA was $306,452 . The total principal amount outstanding of receivables sold was approximately $300,000 368,297 and $359,465 , respectively.
The receivables sold incurred fees due to the Purchasers of $3,644 and $4,202 during the thirteen-week periods ended November 29, 2025 and November 30, 2024, respectively, which were recorded within Other expense, net in the unaudited Condensed Consolidated Statements of Income. The financial covenants under the RPA are substantially the same as those under the Credit Facilities (as defined below). See Note 8, “Debt” for more information about these financial covenants.
Note 7. Acquisitions
During the first fiscal quarter of 2026, the Company acquired the remaining interest of Wm. F. Hurst Co., LLC for $8,195 , increasing the Company's ownership from 80 % to 100 %. As of the acquisition date, the balance of the noncontrolling interest was $6,048 . The difference between acquisition price and the balance of the noncontrolling interest was recognized as an adjustment to additional paid-in capital of $2,147 .
11
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
Note 8. Debt
Debt at November 29, 2025 and August 30, 2025 consisted of the following:
| November 29, 2025 | August 30, 2025 | |||||||||||||
| Amended Revolving Credit Facility | $ | $ | ||||||||||||
| Uncommitted Credit Facilities | ||||||||||||||
| Long-Term Note Payable | ||||||||||||||
| Private Placement Debt: | ||||||||||||||
| Financing arrangements | ||||||||||||||
| Obligations under finance leases | ||||||||||||||
| Less: unamortized debt issuance costs | ( | ( | ||||||||||||
| Total debt, including obligations under finance leases | $ | $ | ||||||||||||
| Less: current portion | ( | (1) | ( | (2) | ||||||||||
| Total long-term debt, including obligations under finance leases | $ | $ | ||||||||||||
(1)Consists of $217,000 from the Uncommitted Credit Facilities (as defined below), $100,000 from the 2.90 % Senior Notes, Series B, due July 28, 2026, $14 from financing arrangements, $207 from obligations under finance leases and net of unamortized debt issuance costs of $349 expected to be amortized in the next 12 months.
(2)Consists of $217,000 from the Uncommitted Credit Facilities (as defined below), $100,000 from the 2.90 % Senior Notes, Series B, due July 28, 2026, $17 from financing arrangements, $200 349 expected to be amortized in the next 12 months.
In April 2017, the Company entered into a $600,000 revolving credit facility, which was subsequently amended (as amended, the “Amended Revolving Credit Facility”). The Amended Revolving Credit Facility, which matures on July 16, 2030, provides for a five-year unsecured revolving loan facility on a committed basis. The interest rate for borrowings under the Amended Revolving Credit Facility is based on either the Adjusted Term SOFR Rate (as defined in the Amended Revolving Credit Facility) or a base rate, plus a spread based on the Company’s consolidated net leverage ratio at the end of each fiscal reporting quarter. The Company currently elects to have loans under the Amended Revolving Credit Facility bear interest based on the Adjusted Term SOFR Rate with one-month interest periods.
The Amended Revolving Credit Facility permits up to $50,000 to be used to fund letters of credit. The Amended Revolving Credit Facility also permits the Company to initiate one or more incremental term loan facilities and/or to increase the revolving loan commitments in an aggregate amount not to exceed $300,000 . Subject to certain limitations, each such incremental term loan facility or revolving loan commitment increase will be on terms as agreed to by the Company, the administrative agent and the lenders providing such financing. Outstanding letters of credit were $6,304
Uncommitted Credit Facilities
During fiscal year 2025, the Company either extended or amended all three of its uncommitted credit facilities. These facilities (collectively, the “Uncommitted Credit Facilities” and, together with the Amended Revolving Credit Facility, the “Credit Facilities”) total $230,000 in aggregate maximum uncommitted availability, under which $217,000
12
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
in the past, been willing to roll over the principal amount outstanding under the Uncommitted Credit Facilities at the end of each interest period but are not obligated to do so. Each Uncommitted Credit Facility matures within one year of entering into such Uncommitted Credit Facility and contains certain limited covenants which are substantially the same as the limited covenants contained in the Amended Revolving Credit Facility. All of the Uncommitted Credit Facilities are unsecured and rank equally in right of payment with the Company’s other unsecured indebtedness.
During the thirteen-week period ended November 29, 2025, the Company borrowed an aggregate $156,000 and repaid an aggregate $111,000 under the Credit Facilities. As of November 29, 2025 and August 30, 2025, the weighted-average interest rates on borrowings under the Credit Facilities were 4.89 % and 5.19 %, respectively.
Private Placement Debt
In July 2016, the Company completed the issuance and sale of $100,000 aggregate principal amount of 2.90 % Senior Notes, Series B, due July 28, 2026; in March 2020, the Company completed the issuance and sale of $50,000 aggregate principal amount of 2.60 % Senior Notes, due March 5, 2027; and, in April 2024, the Company completed the issuance and sale of $50,000 aggregate principal amount of 5.73 % Senior Notes, due April 18, 2027 (collectively, the “Private Placement Debt”). Interest is payable semiannually at the fixed stated interest rates. All of the Private Placement Debt is unsecured.
Covenants
Note 9. Shareholders’ Equity
Common Stock Repurchases and Treasury Stock
In June 2021, the Board of Directors of the Company (the “Board”) terminated the existing share repurchase plan and authorized a new share repurchase plan (the “Share Repurchase Plan”) to purchase up to 5,000 shares of Class A Common Stock. There is no expiration date for the Share Repurchase Plan. As of November 29, 2025, the maximum number of shares of Class A Common Stock that were available for repurchase under the Share Repurchase Plan was 1,313 shares. The Share Repurchase Plan allows the Company to repurchase shares at any time and in any increments it deems appropriate in accordance with Rule 10b-18 under the Exchange Act.
During the thirteen-week period ended November 29, 2025, the Company repurchased 151 shares of Class A Common stock for $12,959 . From this total, 51 shares were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen-week period ended November 29, 2025 and the remainder were immediately retired. During the thirteen-week period ended November 30, 2024, the Company repurchased 219 shares of Class A Common Stock for $18,072 . From this total, 70 shares were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen-week period ended November 30, 2024 and the remainder were immediately retired.
As of November 29, 2025 and August 30, 2025, the Company also recorded accruals for excise tax on share repurchases of $71
The Company reissued 12 and 14 shares of treasury stock during the thirteen-week periods ended November 29, 2025 and November 30, 2024, respectively, to fund the MSC Industrial Direct Co., Inc. Amended and Restated Associate Stock Purchase Plan.
13
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
Dividends on Common Stock
The Company paid aggregate regular cash dividends of $0.87 per share totaling $48,626 for the thirteen-week period ended November 29, 2025. For the thirteen-week period ended November 30, 2024, the Company paid aggregate regular cash dividends of $0.85 per share totaling $47,537 .
On December 18, 2025, the Board declared a regular cash dividend of $0.87 per share, payable on January 28, 2026, to shareholders of record at the close of business on January 14, 2026. The dividend is expected to result in aggregate payments of $48,549 based on the number of shares outstanding on December 19, 2025.
Note 10. Restructuring and Other Costs
Optimization of Company Operations, Profitability Improvement and Growth Acceleration
The Company continues to identify opportunities for improvements in its workforce realignment, strategy and staffing, and its focus on performance management, to ensure it has the right skill sets and number of associates to execute its long-term vision. As such, from time to time the Company extends voluntary and involuntary severance and separation benefits to certain associates in order to facilitate its workforce realignment. During the thirteen weeks ended November 29, 2025, the Company reduced its headcount by eliminating various positions as part of its sales optimization efforts as the Company implements its refreshed go to market strategy. The Company expects this restructuring event to continue into its second fiscal quarter with additional severance and separation costs of approximately $1,500 .
As part of the Company’s strategic realignment efforts to optimize its supply chain and distribution network and enhance operational efficiency, the Company engaged consultants beginning in fiscal year 2024 and ending in fiscal year 2025. As such, the Company incurred consulting-related costs in order to facilitate its network optimization and workforce realignment that qualify as exit and disposal costs under accounting principles generally accepted in the United States of America.
In addition, from time to time, the Company incurs certain expenses that are an integral component of, and directly contribute to, its restructuring activities, which do not qualify as exit and disposal costs under accounting principles generally accepted in the United States of America. These expenses include professional and consulting-related costs directly associated with the optimization of the Company’s operations and profitability improvement, which are also included in Restructuring and other costs in the unaudited Condensed Consolidated Statements of Income.
The following table summarizes Restructuring and other costs for the thirteen-week periods ended November 29, 2025 and November 30, 2024:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Consulting-related costs | $ | $ | |||||||||
| Associate severance and separation costs | |||||||||||
| Equity award acceleration costs associated with severance | |||||||||||
| Total Restructuring and other costs | $ | $ | |||||||||
Liabilities associated with Restructuring and other costs are included in Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheet as of November 29, 2025. The following table
14
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
summarizes activity related to liabilities associated with Restructuring and other costs for the thirteen-week period ended November 29, 2025:
| Consulting-related costs | Associate severance and separation costs | Total | |||||||||||||||||||||
| Balance at August 30, 2025 | $ | $ | $ | ||||||||||||||||||||
| Additions | |||||||||||||||||||||||
| Payments and other adjustments | ( | ( | ( | ||||||||||||||||||||
| Balance at November 29, 2025 | $ | $ | $ | ||||||||||||||||||||
Note 11. Income Taxes
During the thirteen-week period ended November 29, 2025, there were no material changes in unrecognized tax benefits.
The Company’s effective tax rate was 24.3 % for the thirteen-week period ended November 29, 2025, as compared to 24.6 % for the thirteen-week period ended November 30, 2024. The effective tax rate is higher than the federal statutory tax rate primarily due to state taxes.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was passed in the United States. This act introduces significant changes to United States federal tax law, including making certain provisions of the Tax Cuts and Jobs Act of 2017 permanent and introducing new measures impacting corporate taxation. The OBBBA contains a number of tax provisions including, but not limited to, immediate expensing of domestic research and experimental expenditures and bonus depreciation modifications. These tax provisions apply to our fiscal year 2025 and future periods. The Company is in the process of analyzing its tax elections under the OBBBA however we do not expect these elections to have a material impact on the fiscal year 2026 effective tax rate.
Note 12. Legal Proceedings
In the ordinary course of business, there are various claims, lawsuits and pending actions against the Company incidental to the operation of its business. Although the outcome of these matters, both individually and in aggregate, is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
13. Segment Reporting
The Company operates in one
15
MSC INDUSTRIAL DIRECT CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and shares in thousands, except per share data)
(Unaudited)
our Chief Executive Officer and President & Chief Operating Officer. Effective January 1, 2026, the Company's CODM is our President & Chief Executive Officer. The CODM regularly reviews consolidated operating margin and net income to assess Company performance, drive growth, and allocate resources to strategic priorities. The CODM reviews total assets at the consolidated level to make significant capital expenditure decisions for the Company.
The following table presents selected financial information regarding the Company's single reportable segment for the thirteen-week periods ended November 29, 2025 and November 30, 2024:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Net sales | $ | $ | |||||||||
| Cost of goods sold | |||||||||||
| Payroll and payroll-related costs | |||||||||||
| Freight expense | |||||||||||
| Depreciation and amortization | |||||||||||
| Restructuring and other costs | |||||||||||
Other segment items (1) | |||||||||||
| Income from operations | |||||||||||
| Operating Margin | |||||||||||
| Other Income (Expense) | |||||||||||
| Interest expense | ( | ( | |||||||||
| Interest income | |||||||||||
Other expense, net (2) | ( | ( | |||||||||
| Income before provision for income taxes | |||||||||||
| Provision for income taxes | |||||||||||
| Net income | $ | $ | |||||||||
(2) Other expense, net is primarily composed of fees related to the Company's securitization agreement.
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following is intended to update the information contained in MSC Industrial Direct Co., Inc.’s (together with its wholly owned subsidiaries and entities in which it maintains a controlling financial interest, “MSC,” “MSC Industrial,” the “Company,” “we,” “us” or “our”) Annual Report on Form 10-K for the fiscal year ended August 30, 2025 and presumes that readers have access to, and will have read, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Part II of such Annual Report on Form 10-K.
Our Business
MSC is a leading North American distributor of a broad range of metalworking and maintenance, repair and operations (“MRO”) products and services. We help our customers drive greater productivity, profitability and growth with inventory management and other supply chain solutions and deep expertise from more than 80 years of working with customers across industries. We offer approximately 2.5 million active, saleable stock-keeping units through our E-commerce channels, including our website, www.mscdirect.com (the “MSC website”); our inventory management solutions; our catalogs; our brochures; and our customer care centers, customer fulfillment centers (“CFCs”), regional inventory centers and warehouses. We service our customers from five CFCs, nine regional inventory centers, 37 warehouses, and five manufacturing locations. We continue to implement our strategies to gain market share, generate new customers, increase sales to existing customers and diversify our customer base.
Our business model focuses on providing overall procurement cost reduction and just-in-time delivery to meet our customer’s needs. Many of our products are carried in stock, and orders for these in-stock products are typically fulfilled the day on which the order is received. We focus on offering inventory, process and procurement solutions that reduce supply chain costs and improve plant floor productivity for our customers. We aim to achieve ongoing cost reductions throughout our business by implementing cost-saving strategies and leveraging our existing infrastructure. Additionally, we provide our customers with further procurement cost-saving solutions through technologies such as our Vendor Managed Inventory (“VMI”), Customer Managed Inventory (“CMI”) and vending programs — helping reduce downtime and ensure critical products are available when and where they are needed. Our vending machines in service totaled 30,177 as of November 29, 2025, compared to 27,747 as of November 30, 2024, and our In-Plant programs totaled 418 locations as of November 29, 2025, compared to 369 as of November 30, 2024. Our sales force, which focuses on a more complex and high-touch role, drives value for our customers by enabling them to achieve higher levels of growth, profitability and productivity. Our field sales and service associate headcount was 2,631 as of November 29, 2025, compared to 2,723 as of November 30, 2024.
Highlights
Highlights during the thirteen weeks ended November 29, 2025 include:
•We generated $29.4 million of cash from operations, compared to $101.9 million for the same period in the prior fiscal year.
•We had net borrowings of $45.0 million on our credit facilities and private placement debt, compared to net borrowings of $11.8 million for the same period in the prior fiscal year.
•We paid out an aggregate $48.6 million in regular cash dividends, compared to an aggregate $47.5 million in regular cash dividends for the same period in the prior fiscal year.
•We repurchased $13.0 million of MSC’s Class A Common Stock, par value $0.001 per share (“Class A Common Stock”), excluding excise taxes, compared to $18.1 million for the same period in the prior fiscal year.
•We incurred $4.9 million in Restructuring and other costs, compared to $2.3 million for the same period in the prior fiscal year, consisting primarily of current year severance and separation costs associated with the Company’s sales optimization efforts as well as consulting-related costs in the current and prior fiscal year.
Our Strategy
The first phase of our Company-wide initiative, referred to as “Mission Critical,” focused on market share capture and improved profitability. We successfully executed on the first phase of Mission Critical initiatives at the end of fiscal year 2023, which included solidifying our market-leading metalworking business, with an emphasis on selling our product portfolio, expanding our solutions, improving our digital and E-commerce capabilities and diversifying our customers and end-markets. The next phase of our Mission Critical journey, which began in fiscal year 2024, is anchored in three pillars: (i) maintaining the momentum of the first phase of the Mission Critical program and our existing growth drivers, (ii) increasing our focus on both core customers and OEM fasteners, and (iii) driving productivity improvements and reducing operating expenses as a percentage of net sales. To accomplish the next phase of our Mission Critical journey, we intend to
17
leverage investments in advanced analytics to improve supply chain performance and upgrade our digital core to unlock productivity within our order-to-cash and procure-to-pay processes. In fiscal year 2024, we completed our web price realignment initiative. In fiscal year 2025, we launched our enhanced marketing efforts, rolled out several E-commerce enhancements and began our sales optimization initiative, which included investment in an enhanced, data-driven territory model to optimize field seller portfolios. The Company continued its sales optimization efforts in the first quarter of fiscal year 2026.
Our primary objective is to grow sales profitably while offering our customers highly technical and high-touch solutions to solve their most complex challenges on the plant floor. We have experienced success to date as measured by the growth rates of our high-touch programs, such as vending and in-plant programs, and the rate of new customer implementations. Our strategy is to position ourselves as a mission-critical partner to our customers. We intend to selectively pursue strategic acquisitions that expand or complement our business in new and existing markets or further enhance the value and offerings we provide.
Business Environment
The United States economy has experienced various macroeconomic pressures in recent years including pricing pressure from tariffs and inflation, sustained high interest rates and general economic and political uncertainty. The impact from tariffs was most significant in the latter half of the Company's fiscal year 2025 and has continued into the first quarter of fiscal year 2026. Furthermore, as a supplier to the United States federal government, the federal government shutdown, which lasted from October 1, 2025 through November 12, 2025, negatively impacted sales to our public sector end-market during the first quarter of fiscal year 2026. These pressures have impacted, and may continue to impact in the future, the Company’s business, financial condition and results of operations.
We utilize various indices when evaluating the level of our business activity, including the Industrial Production (“IP”) Index. Through statistical analysis, we have found that trends in our customers’ activity have correlated to changes in the IP Index. The IP Index measures short-term changes in industrial production. Growth in the IP Index compared to the prior quarter indicates growth in the manufacturing, mining and utilities industries. Approximately 67% of our revenues came from sales in the manufacturing sector during the thirteen-week period ended November 29, 2025. After giving effect to the annual technical revisions to calculations of the IP Index which occurred in November 2025, the IP Index over the three months ended November 2025 and the average for the three- and 12-month periods ended November 2025 were as follows:
| Period | IP Index | |||||||
| September | 101.7 | |||||||
| October | 101.6 | |||||||
| November | 101.8 | |||||||
| Fiscal Year 2026 Q1 Average | 101.7 | |||||||
| 12-Month Average | 101.2 | |||||||
The average IP Index for the three months ended November 2025 was 101.7, flat compared to the prior quarter average of 101.7 and an increase from an average of 99.5 during the comparative quarter in the prior year.
During the first quarter of fiscal year 2026, the Company experienced a more stable demand environment compared to much of fiscal year 2025. The heavy manufacturing industry, which represented 58% of our revenues during the thirteen-week period ended November 29, 2025, showed signs of expansion. Several IP subindexes, in particular Aerospace, improved, while others, such as Automotive, signaled contraction. Non-manufacturing demand, in particular the Company’s public sector end-market, was hampered by the federal government shutdown which resulted in lower sales volumes in October and November. We will monitor the current economic conditions for the impact on our customers and markets and assess both risks and opportunities that may affect our business and operations.
18
Thirteen-Week Period Ended November 29, 2025 Compared to the Thirteen-Week Period Ended November 30, 2024
The table below summarizes the Company’s results of operations both in dollars (in thousands) and as a percentage of net sales for the periods indicated:
| Thirteen Weeks Ended | |||||||||||||||||||||||||||||||||||
| November 29, 2025 | November 30, 2024 | Change | |||||||||||||||||||||||||||||||||
| $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||
| Net sales | $ | 965,684 | 100.0 | % | $ | 928,484 | 100.0 | % | $ | 37,200 | 4.0 | % | |||||||||||||||||||||||
| Cost of goods sold | 573,007 | 59.3 | % | 550,297 | 59.3 | % | 22,710 | 4.1 | % | ||||||||||||||||||||||||||
| Gross profit | 392,677 | 40.7 | % | 378,187 | 40.7 | % | 14,490 | 3.8 | % | ||||||||||||||||||||||||||
| Operating expenses | 311,568 | 32.3 | % | 303,563 | 32.7 | % | 8,005 | 2.6 | % | ||||||||||||||||||||||||||
| Restructuring and other costs | 4,870 | 0.5 | % | 2,344 | 0.3 | % | 2,526 | 107.8 | % | ||||||||||||||||||||||||||
| Income from operations | 76,239 | 7.9 | % | 72,280 | 7.8 | % | 3,959 | 5.5 | % | ||||||||||||||||||||||||||
| Total other expense | (8,725) | (0.9) | % | (11,678) | (1.3) | % | 2,953 | (25.3) | % | ||||||||||||||||||||||||||
| Income before provision for income taxes | 67,514 | 7.0 | % | 60,602 | 6.5 | % | 6,912 | 11.4 | % | ||||||||||||||||||||||||||
| Provision for income taxes | 16,406 | 1.7 | % | 14,908 | 1.6 | % | 1,498 | 10.0 | % | ||||||||||||||||||||||||||
| Net income | 51,108 | 5.3 | % | 45,694 | 4.9 | % | 5,414 | 11.8 | % | ||||||||||||||||||||||||||
| Less: Net loss attributable to noncontrolling interest | (696) | (0.1) | % | (929) | (0.1) | % | 233 | (25.1) | % | ||||||||||||||||||||||||||
| Net income attributable to MSC Industrial | $ | 51,804 | 5.4 | % | $ | 46,623 | 5.0 | % | $ | 5,181 | 11.1 | % | |||||||||||||||||||||||
Net Sales
Net sales increased 4.0%, or $37.2 million, to $965.7 million for the thirteen-week period ended November 29, 2025, as compared to $928.5 million for the same period in the prior fiscal year. The $37.2 million increase in net sales was comprised of a positive impact from pricing of $39.0 million and favorable foreign exchange impact of $1.0 million, partially offset by $2.8 million of lower sales volume, which was primarily driven by the federal government shutdown. The positive pricing impact was inclusive of changes in customer and product mix, discounting, favorable tariff-related pricing actions and other items. Of the $37.2 million increase in net sales during the thirteen-week period ended November 29, 2025, sales to our core and other customers increased $31.9 million, sales to our national account customers increased $9.8 million and sales to our public sector customers decreased $4.5 million.
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The table below shows, among other things, the change in our average daily sales (“ADS”) by total Company, by customer end-market and by customer type for the thirteen-week periods ended November 29, 2025 and November 30, 2024, each as compared to the same period in the prior fiscal year:
ADS Percentage Change
(Unaudited)
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| Net Sales (in thousands) | $ | 965,684 | $ | 928,484 | |||||||
| Sales Days | 62 | 62 | |||||||||
ADS (1) (in millions) | $ | 15.6 | $ | 15.0 | |||||||
Total Company ADS Percent Change (2) | 4.0 | % | (2.7) | % | |||||||
| Customer End-Market: | |||||||||||
Manufacturing Customers ADS Percent Change (2) | 5.4 | % | (4.9) | % | |||||||
| Manufacturing Customers Percent of Total Net Sales | 67 | % | 66 | % | |||||||
Non-Manufacturing Customers ADS Percent Change (2) | 1.3 | % | 2.0 | % | |||||||
| Non-Manufacturing Customers Percent of Total Net Sales | 33 | % | 34 | % | |||||||
| Customer Type: | |||||||||||
National Account Customers ADS Percent Change (2) | 2.9 | % | (1.6) | % | |||||||
| National Account Customers Percent of Total Net Sales | 37 | % | 37 | % | |||||||
Public Sector Customers ADS Percent Change (2) | (5.2) | % | 9.8 | % | |||||||
| Public Sector Customers Percent of Total Net Sales | 9 | % | 9 | % | |||||||
Core and Other Customers ADS Percent Change (2) | 6.4 | % | (5.3) | % | |||||||
| Core and Other Customers Percent of Total Net Sales | 54 | % | 54 | % | |||||||
(1)ADS is calculated using the number of business days in the United States for the periods indicated. The Company believes ADS is a key performance indicator because it shows the effectiveness of the Company’s selling performance on a consistent basis between periods.
(2)Percent reflects the change from the 2025 fiscal period to the 2026 fiscal period and the change from the 2024 fiscal period to the 2025 fiscal period, respectively.
We believe that our ability to transact business with our customers directly through the MSC website as well as through various other electronic portals gives us a competitive advantage over smaller suppliers. Sales made through our E-commerce platforms, including sales made through Electronic Data Interchange (“EDI”) systems, VMI systems, Extensible Markup Language ordering-based systems, vending, hosted systems and other electronic portals, represented 64.2% of consolidated net sales for the thirteen-week period ended November 29, 2025, as compared to 63.7% of consolidated net sales for the same period in the prior fiscal year.
Gross Profit
Gross profit of $392.7 million for the thirteen-week period ended November 29, 2025 increased $14.5 million, or 3.8%, compared to the same period in the prior fiscal year. Gross profit margin was 40.7% for the thirteen-week period ended November 29, 2025, which was flat to the same period in the prior fiscal year. The increase in gross profit was
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primarily a result of an increase in net sales, as described above, while gross profit margin remained comparable to the prior year period.
Operating Expenses
Operating expenses increased 2.6%, or $8.0 million, to $311.6 million for the thirteen-week period ended November 29, 2025, as compared to $303.6 million for the same period in the prior fiscal year. Operating expenses were 32.3% of net sales for the thirteen-week period ended November 29, 2025, as compared to 32.7% for the same period in the prior fiscal year. The increase in Operating expenses was primarily a result of advertising expense and higher depreciation and amortization expense. The decrease in operating expenses as a percentage of net sales was primarily due to growth in net sales outpacing the increase in Operating expenses.
Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, were $174.5 million, or 56.0% of total Operating expenses, for the thirteen-week period ended November 29, 2025, as compared to $173.7 million, or 57.2% of total Operating expenses, for the same period in the prior fiscal year.
Freight expense was $36.4 million for the thirteen-week period ended November 29, 2025, as compared to $37.5 million for the same period in the prior fiscal year. The primary driver of the decrease was favorable third-party shipping rates achieved through our network optimization initiatives.
Depreciation and amortization was $24.6 million for the thirteen-week period ended November 29, 2025, as compared to $21.2 million for the same period in the prior fiscal year. The primary drivers of the increase in depreciation and amortization were increased capital expenditures related to E-commerce and digital initiatives.
Advertising expense was $14.2 million for the thirteen-week period ended November 29, 2025, as compared to $10.9 million for the same period in the prior fiscal year. The primary driver of the increase was higher search engine marketing spend as part of the Company's enhanced marketing efforts which began in fiscal year 2025.
Restructuring and Other Costs
We incurred $4.9 million in Restructuring and other costs for the thirteen-week period ended November 29, 2025, as compared to $2.3 million for the same period in the prior fiscal year. The increase was primarily related to higher severance and separation benefits related to headcount reduction actions during the period. See Note 10, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.
Income from Operations
Income from operations increased 5.5%, or $4.0 million, to $76.2 million for the thirteen-week period ended November 29, 2025, as compared to $72.3 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales increased to 7.9% for the thirteen-week period ended November 29, 2025, as compared to 7.8% for the same period in the prior fiscal year. The increase in income from operations as a percentage of net sales was primarily attributable to, as described above, a decrease in Operating expenses as a percentage of net sales during the thirteen-week period ended November 29, 2025.
Total Other Expense
Total other expense decreased 25.3%, or $3.0 million, to $8.7 million for the thirteen-week period ended November 29, 2025, as compared to $11.7 million for the same period in the prior fiscal year. The decrease was primarily due to the impact of prior year realized and unrealized losses on foreign exchange as well as lower interest costs on our Credit Facilities and lower fees incurred associated with the Receivables Purchase Agreement.
Provision for Income Taxes
The Company’s effective tax rate for the thirteen-week period ended November 29, 2025 was 24.3%, as compared to 24.6% for the same period in the prior fiscal year.
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Net Income
The factors which affected net income for the thirteen-week period ended November 29, 2025, as compared to the same period in the prior fiscal year, have been discussed above.
Liquidity and Capital Resources
| November 29, 2025 | August 30, 2025 | $ Change | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Total debt | $ | 530,967 | $ | 485,699 | $ | 45,268 | |||||||||||
| Less: Cash and cash equivalents | 40,254 | 56,228 | (15,974) | ||||||||||||||
| Net debt | $ | 490,713 | $ | 429,471 | $ | 61,242 | |||||||||||
| Total shareholders’ equity | $ | 1,382,827 | $ | 1,396,502 | $ | (13,675) | |||||||||||
As of November 29, 2025, we had $40.3 million in cash and cash equivalents, substantially all with well-known financial institutions. Historically, our primary financing needs have been to fund our working capital requirements necessitated by our sales growth and the costs of acquisitions, new products, new facilities, facility expansions, investments in vending solutions, technology investments, and productivity investments. Cash generated from operations, together with borrowings under our credit facilities and net proceeds from the private placement notes, have been used to fund these needs, to repurchase shares of Class A Common Stock from time to time, and to pay dividends to our shareholders.
As of November 29, 2025, total borrowings outstanding, representing amounts due under our credit facilities and notes, as well as all finance leases and financing arrangements, were $531.0 million, net of unamortized debt issuance costs of $1.5 million, as compared to total borrowings outstanding of $485.7 million, net of unamortized debt issuance costs of $1.5 million, as of the end of fiscal year 2025. The increase in total borrowings outstanding was driven by higher net borrowings under our credit facilities. See Note 8, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
We believe, based on our current business plan, that our existing cash, financial resources and cash flow from operations will be sufficient to fund anticipated capital expenditures and operating cash requirements for at least the next 12 months. We will continue to evaluate our financial position in light of future developments and to take appropriate action as it is warranted.
The table below summarizes certain information regarding the Company’s cash flows for the periods indicated:
| Thirteen Weeks Ended | |||||||||||
| November 29, 2025 | November 30, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Net cash provided by operating activities | $ | 29,411 | $ | 101,868 | |||||||
| Net cash used in investing activities | (21,189) | (20,408) | |||||||||
| Net cash used in financing activities | (23,936) | (53,359) | |||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | (260) | (423) | |||||||||
| Net (decrease) increase in cash and cash equivalents | $ | (15,974) | $ | 27,678 | |||||||
Cash Flows from Operating Activities
Net cash provided by operating activities was $29.4 million for the thirteen weeks ended November 29, 2025, compared to $101.9 million for the thirteen weeks ended November 30, 2024. The decrease was primarily due to the following:
•an increase in prepaid expenses and other current assets in the current fiscal year due primarily to an increase in vendor rebate receivables and IT-related prepayments;
•an increase in the balances of accounts receivable and inventories in the current fiscal year relative to the prior year. The higher balance of inventories is due to inventory management countermeasures in response to tariffs and the higher accounts receivable balance is due to higher sales levels;
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•a decrease in accounts payable and accrued liabilities as compared to the prior year period due primarily to the change in accrued payroll and payroll related costs due in turn to the larger fiscal year 2025 annual incentive compensation payment paid in fiscal year 2026 than prior years; partially offset by
•an increase in net income
The table below summarizes certain information regarding the Company’s operations as of the periods indicated:
| November 29, 2025 | August 30, 2025 | November 30, 2024 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
Working Capital (1) | $ | 533,221 | $ | 497,208 | $ | 580,104 | |||||||||||
Current Ratio (2) | 1.7 | 1.7 | 1.9 | ||||||||||||||
Days’ Sales Outstanding (3) | 41.5 | 37.8 | 40.5 | ||||||||||||||
Inventory Turnover (4) | 3.5 | 3.4 | 3.3 | ||||||||||||||
(1)Working Capital is calculated as current assets less current liabilities.
(2)Current Ratio is calculated as total current assets divided by total current liabilities.
(3)Days’ Sales Outstanding is calculated as accounts receivable divided by net sales, using trailing two months sales data.
(4)Inventory Turnover is calculated as total cost of goods sold divided by inventory, using a 13-month trailing average inventory.
Working capital and current ratio decreased as of November 29, 2025 compared to November 30, 2024 primarily due to higher Current portion of debt including obligations under finance leases partially offset by higher Inventories and Accounts receivable balances. Working capital increased as of November 29, 2025 compared to August 30, 2025 primarily due to higher Inventories and higher Prepaid expenses and other current assets, partially offset by a lower balance in Cash and cash equivalents.
Days’ sales outstanding as of November 29, 2025 increased compared to both August 30, 2025 and November 30, 2024. The increase in days’ sales outstanding was driven by longer payment term requirements from certain national account customers.
Inventory turnover as of November 29, 2025 increased compared to both August 30, 2025 and November 30, 2024. Inventory turnover continues to improve due to category management efforts and supply chain efficiencies to optimize inventory levels.
Cash Flows from Investing Activities
Net cash used in investing activities for the thirteen weeks ended November 29, 2025 and November 30, 2024 was $21.2 million and $20.4 million, respectively. The use of cash for both the thirteen weeks ended November 29, 2025 and November 30, 2024 was primarily due to expenditures for property, plant and equipment mainly related to vending programs and other infrastructure and technology investments.
Cash Flows from Financing Activities
Net cash used in financing activities was $23.9 million for the thirteen weeks ended November 29, 2025, compared to $53.4 million for the thirteen weeks ended November 30, 2024, primarily due to the following:
•$13.0 million in aggregate repurchases of Class A Common Stock during the thirteen weeks ended November 29, 2025, compared to $18.1 million in aggregate repurchases of Class A Common Stock during the thirteen weeks ended November 30, 2024;
•$48.6 million of regular cash dividends paid during the thirteen weeks ended November 29, 2025, compared to $47.5 million of regular cash dividends paid during the thirteen weeks ended November 30, 2024;
•net borrowings of $45.0 million under our credit facilities and private placement debt during the thirteen weeks ended November 29, 2025, compared to net borrowings of $11.8 million during the thirteen weeks ended November 30, 2024; and
•acquisition of the remaining interest of Wm. F. Hurst Co., LLC for $8.2 million during the thirteen weeks ended November 29, 2025, which increased the Company's ownership from 80% to 100%.
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Capital Expenditures
We continue to invest in E-commerce and vending platforms, CFCs and distribution network, and other infrastructure and technology.
Long-Term Debt
Credit Facilities
In April 2017, the Company entered into a $600.0 million revolving credit facility, which was subsequently amended. Subsequent to the fiscal quarter ended November 29, 2025, the Company made additional net payments through December 19, 2025 of $38.0 million on its revolving credit facility which were funded through the $50.0 million proceeds received in relation to the amendment to our Receivables Purchase Agreement entered into during the second quarter of fiscal year 2026. See Note 6, "Accounts Receivable" in the Notes to Condensed Consolidated Financial Statements for more information about the amendment. The current unused balance of $521.7 million from the revolving credit facility, which is reduced by outstanding letters of credit, is available for working capital purposes if necessary. As of November 29, 2025, the Company also had three uncommitted credit facilities, totaling $230.0 million in aggregate maximum uncommitted availability. As of November 29, 2025, we were in compliance with the operating and financial covenants of our credit facilities. See Note 8, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
Private Placement Debt
In July 2016, we completed the issuance and sale of unsecured senior notes. In June 2018 and March 2020, we entered into additional note purchase agreements. In April 2024, the Company completed the issuance and sale of senior notes. See Note 8, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these transactions.
Leases and Financing Arrangements
As of November 29, 2025, certain of our operations were conducted on leased premises. These leases are for varying periods, the longest extending to fiscal year 2032. In addition, we are obligated under certain equipment and automobile operating and finance leases, which expire on varying dates through fiscal year 2029.
From time to time, we enter into financing arrangements with vendors to purchase certain information technology equipment or software.
Critical Accounting Estimates
On an ongoing basis, we evaluate our critical accounting policies and estimates, including those related to revenue recognition, inventory valuation, allowance for credit losses, warranty reserves, contingencies and litigation, income taxes, and accounting for goodwill and long-lived assets. We make estimates, judgments and assumptions in determining the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying Notes. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The estimates are used to form the basis for making judgments about the carrying values of assets and liabilities and the amount of revenues and expenses reported that are not readily apparent from other sources. Actual results may differ from these estimates.
There have been no material changes outside the ordinary course of business in the Company’s critical accounting policies, as disclosed in its Annual Report on Form 10-K for the fiscal year ended August 30, 2025.
Recently Adopted Accounting Standards
See Note 1, “Basis of Presentation” in the Notes to Condensed Consolidated Financial Statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For information regarding our exposure to certain market risks, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Interest Rate Risks” under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of Part II of our Annual Report on Form 10-K for the fiscal year ended August 30, 2025. Except as described in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this Report, there have been no significant changes in our financial instrument portfolio or interest rate risk since our August 30, 2025 fiscal year-end.
Item 4. Controls and Procedures.
Our senior management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, with the participation of our Chief Executive Officer and our Chief Financial Officer, as well as other key members of our management, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this Report, to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is (i) accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated under the Exchange Act) during the fiscal quarter ended November 29, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of business, there are various claims, lawsuits and pending actions against the Company incidental to the operation of its business. Although the outcome of these matters, both individually and in aggregate, is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
In addition to the matters referred to above, on March 14, 2025, a complaint was filed in the Supreme Court of the State of New York, County of New York by Macomb County Retiree Health Care Fund (“MCRHC”) against the Company and certain officers, directors and shareholders of the Company (the “Macomb Litigation”). In June 2025, the MCRHC filed an amended complaint. The action is purportedly brought by MCRHC individually, and on behalf of others similarly situated, as a class action or in the alternative, as a derivative action on behalf of the Company. The amended complaint also asserts a breach of contract claim against the Company. The amended complaint alleges, among other things, breaches of fiduciary duties for actions related to the Reclassification and seeks disgorgement, unspecified damages, costs and expenses and such other relief as the court may deem proper. On November 14, 2025, the Company’s motion to dismiss the amended complaint was denied. As a result, the Macomb Litigation is continuing while the Company continues to vigorously defend itself. While at this time the ultimate cost to resolve this matter is not reasonably estimable, we have incurred, and may be required in future to incur further, legal fees and other expenses related to the Macomb Litigation.
Item 1A. Risk Factors.
In addition to the other information set forth in this Report, you should carefully consider the risks and the uncertainties discussed in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the fiscal year ended August 30, 2025, which could materially affect our business, financial condition and/or operating results. There have been no material changes in the Company’s risk factors from those disclosed in our Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be not material also may materially and adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table sets forth repurchases by the Company of its outstanding shares of Class A Common Stock, which are listed on the New York Stock Exchange, during the thirteen-week period ended November 29, 2025:
Issuer Purchases of Equity Securities
| Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(3) | ||||||||||||||||||||||
| 8/31/25-9/30/25 | 159 | $ | 91.33 | — | 1,413,423 | |||||||||||||||||||||
| 10/1/25-10/30/25 | 319 | $ | 91.99 | — | 1,413,423 | |||||||||||||||||||||
| 10/31/25-11/29/25 | 150,261 | $ | 85.94 | 100,000 | 1,313,423 | |||||||||||||||||||||
| Total | 150,739 | 100,000 | ||||||||||||||||||||||||
(1)During the thirteen weeks ended November 29, 2025, 50,739 shares of Class A Common Stock were withheld by the Company as payment to satisfy our associates’ tax withholding liability associated with our stock-based compensation program and are included in the total number of shares purchased.
(2)Activity is reported on a trade date basis. Average price paid per share excludes excise tax levied by the Inflation Reduction Act of 2022.
(3)In June 2021, the Board of Directors of the Company terminated the existing share repurchase plan and authorized a new share repurchase plan (the “Share Repurchase Plan”) to purchase up to 5,000,000 shares of Class A Common Stock. There is no expiration date for the Share Repurchase Plan. As of November 29, 2025, the maximum number of shares of Class A Common Stock that may yet be repurchased under the Share Repurchase Plan was 1,313,423 shares.
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Item 5. Other Information.
Insider Trading Arrangements
During the quarter ended November 29, 2025 none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted terminated
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Item 6. Exhibits.
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| 101.INS | Inline XBRL Instance Document.* | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* | |||||||
* | Filed herewith. | |||||||
| ** | Furnished herewith. | |||||||
| † | Indicates a management contract or compensatory plan or arrangement. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MSC INDUSTRIAL DIRECT CO., INC. (Registrant) | ||||||||
Dated: January 7, 2026 | By: | /s/ MARTINA MCISAAC | ||||||
Martina McIsaac President and Chief Executive Officer (Principal Executive Officer) | ||||||||
Dated: January 7, 2026 | By: | /s/ GREG CLARK | ||||||
Greg Clark Vice President and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||||||||
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Exhibit 10.1
MSC EXECUTIVE SEVERANCE PLAN
Amended and Restated
Effective as to terminations on or after December 17, 2025
MSC EXECUTIVE SEVERANCE PLAN
This document sets forth the terms and conditions of the MSC Executive Severance Plan (the “Plan”), which is hereby adopted by MSC Industrial Direct Co., Inc. (“MSC”) for the benefit of the eligible employees of MSC and its subsidiaries to this document. MSC and all such designated subsidiaries hereinafter are referred to, individually and collectively, as the “Company.” This document sets forth the terms of the Plan and is applicable to such eligible employees of the Company who participate in the Plan in accordance with Sections 2 and 3 below.
Section 1.Effective Date and Plan Year. The “Effective Date” of the Plan shall be October 27, 2016. The “Plan Year” shall be the 12-consecutive month period beginning on January 1 and ending on December 31; provided, however, that, the first Plan Year shall be a short Plan Year beginning on the Effective Date and ending on December 31, 2016. This amendment and restatement of the Plan shall be effective for terminations on or after December 17, 2025.
Section 2.Eligibility for Participation. Each person who is customarily employed by the Company as a Vice President, Senior Vice President or Executive Vice President (an “Eligible Associate”) who experiences a “Qualifying Termination” (as defined below) shall be a participant in the Plan, other than any person who is covered by an employment, severance or similar agreement with the Company that provides for payment of severance pay under specified circumstances; provided, however, that for purposes of this Section 2, any agreement, plan or award or similar instrument providing for benefits upon a change in control of the Company shall not be deemed to be such an agreement; provided, further, that there shall be no duplication of comparable benefits under the Plan and any such agreement, plan or award or similar instrument. Notwithstanding the foregoing, any person classified by the Company as an independent consultant, contractor, or temporary worker to the Company will not be eligible for this severance program, even if it is later determined by a court or governmental agency that such person was or is an employee of the Company.
Section 3.Participation. Each Eligible Associate shall become a participant (a “Participant”) in the Plan on the later of the Effective Date, or the date on which he or she has a Qualifying Termination. A Participant’s participation in the Plan shall cease as of the date the Participant is no longer an Eligible Associate and is not entitled to any benefit provided under this Plan.
Section 4.Entitlement to a Severance Benefit.
(a)Subject to the provisions of this Section 4, each Participant who incurs a Qualifying Termination (as hereinafter defined) shall be eligible to receive a “Severance Benefit” under the Plan that is determined in accordance with Section 5 below. For purposes of the Plan, a “Qualifying Termination” means the occurrence of one of the following:
(i)The involuntary termination of the Participant’s employment by the Company as a result of the elimination of such Participants’ job or position with the Company because of reorganization, job elimination, or site closure;
(ii)The termination of the Participant’s employment with the Company upon the Participant’s failure to accept a material change in the geographic location where such Participant is required to primarily perform his or her
2
services for the Company, such that the distance between the previous geographic location and the new geographic location exceeds 50 miles (one way); provided however that the Company must notify the Participant of this termination of employment within 90 days of the Participant’s refusal to accept this change in geographic location; or
(iii)The termination of the Participant’s employment with the Company upon the Participant’s failure to accept a reduction in such Participant’s base salary of 20 percent or more; provided however that the Company must notify the Participant of this termination of employment within 90 days of the Participant’s refusal to accept this reduction in base salary.
(b)As a condition of receiving any Severance Benefit under the Plan, each Participant shall be required to execute a separation agreement and general release (the “Severance Agreement”) in favor of the Company in such form and of such content as the Severance Committee, in its sole discretion, may require and such Participant does not revoke the Severance Agreement, to the extent the Severance Agreement permits revocation. The Severance Agreement shall not be executed prior to the date of the Participant’s Qualifying Termination (the “Termination Date”). Notwithstanding any provision in the Plan to the contrary, if such required Severance Agreement is not so executed by the terminated Participant or revoked, the Participant shall not be entitled to any payments or benefits under the Plan.
(c)Participants who are notified of their Qualifying Termination during what the Severance Committee determines is a Company-approved leave of absence of less than six months will be eligible for a Severance Benefit under the Plan. In the event that such Company-approved leave (i) is for six months or longer or, (ii) as of the Termination Date, more than six months has elapsed since the beginning of such Company-approved leave and the Participant did not resume continuous active employment with the Company prior to the end of such six-month period, no Severance Benefit shall be payable to such Participant.
(d)In the event that a Participant dies after receipt of notification of a Qualifying Termination but prior to the Termination Date or prior to the full payment of any Severance Benefit to which the Participant is entitled, (i) any Severance Allowance that would have been paid to such Participant under the Plan shall be paid to his or her Beneficiary or estate, (ii) any Benefits Subsidy payment due under Section 6 below shall be made on behalf of the Participant’s qualified beneficiaries (within the meaning of COBRA), and (iii) any Outplacement Services that are unused as of the date of a Participant’s death shall be immediately forfeited. For purposes of this Plan, “Beneficiary” shall be the same beneficiary as the Participant has elected on the Company’s life insurance plan or, if no such beneficiary is elected on the life insurance plan, the beneficiary election in place for the Company’s defined contribution plan.
(e)Notwithstanding anything in the Plan to the contrary, no Eligible Associate or Participant shall be entitled to receive a Severance Benefit in the event that the Severance Committee determines, in its sole discretion, that (i) at the time of the Participant’s Qualifying Termination, the Company had cause to terminate the Participant’s employment for failure to meet Company-established performance criteria, the Participant’s misconduct, or the Participant’s violation of any applicable Company policy; (ii) the Participant resigned from employment with the Company prior to the date the Participant’s employment is scheduled to terminate, or (iii) prior to the Termination Date, the Participant received an offer of employment from the Company or any affiliate thereof on terms that are comparable in the aggregate to those of the position held by the Participant with the Company prior to the Termination Date. Notwithstanding anything in the Plan to the contrary, payment and provision of any Severance Benefit shall cease and be forfeited, to the extent not previously paid or provided, immediately
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upon the Participant’s acceptance of any offer of employment with the Company or any of its affiliates.
(f)In addition, if a Participant incurs a Qualifying Termination, and the Severance Committee determines, in its sole discretion, that thereafter (i) the Participant breached any provision(s) of the Severance Agreement described in Section 4(b) above, or (ii) the Participant breached any provision(s) of any confidentiality, non-compete, non-solicitation, non-disparagement or other restrictive covenant or similar agreement with the Company, then, to the fullest extent permitted by applicable law, any unpaid or unused Severance Benefit shall be immediately forfeited (including, without limitation, any Benefits Subsidy payment and any outplacement services) and the Participant shall immediately repay to the Company any amount(s) of Severance Allowance previously paid to such Participant on account of such Qualifying Termination.
Section 5.Determination of Severance Benefit. Subject to the provisions of Section 4 above and this Section 5, if a Participant incurs a Qualifying Termination, the Participant shall be entitled to a “Severance Benefit.” A “Severance Benefit” shall consist of a “Severance Allowance” and a “Bonus Allowance” determined in accordance with this Section 5, subject to the Participant’s eligibility (and eligibility of members of the Participant’s family), a Benefits Subsidy payment, determined in accordance with Section 6 below, the Vesting Acceleration Benefit described in Section 7 below and, at the discretion of the Severance Committee, “Outplacement Services” described in Section 8 below.
(a)The amount of a Participant’s Severance Allowance shall be determined as of the Termination Date and shall equal the amount determined in accordance with Section 5(a), plus the amount determined in accordance with Section 5(b). The amount determined in accordance with this Section 5(a) shall be based on the Participant’s level of employment with the Company at the time of the Qualifying Termination, and shall be determined in accordance with the following chart:
Participant’s Level of Employment | Aggregate Amount of Severance Allowance Under Section 5(a) | ||||
| Executive Vice President | 18 months of Base Pay | ||||
| Senior Vice President | 15 months of Base Pay | ||||
| Vice President | 12 months of Base Pay | ||||
For purposes of this Plan, “Level of Employment” means the designated salary grade in the HRIS system of Sid Tool Co., Inc. DBA MSC Industrial Supply, not the associate’s title.
Notwithstanding the foregoing or anything in the Plan to the contrary, the amount of any Severance Allowance payable to any Participant under the Plan shall be reduced, dollar-for-dollar, but not below $0.00, by the amount of any payments made by the Company or any affiliates thereof, to such Participant under the Worker Adjustment and Retraining Notification Act, as amended (the “WARN Act”) or any similar state law. For purposes hereof:
(i)“Base Pay” means such Participant’s monthly base rate of salary on the Termination Date, prorated to the extent necessary to take into account
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any reduced schedule of employment, but excluding all other forms of compensation such as bonuses.
(ii)A Participant’s level of employment with the Company shall be determined by the Severance Committee, in its sole discretion.
(iii)The portion of the Severance Allowance determined in accordance with this Section 5(a) shall be paid in equal pro rata installments, in accordance with the normal payroll practices of the Company in effect on the date of the Qualifying Termination, over the number of months listed in the chart above under the column for the “aggregate amount of severance allowance” (i.e., 18, 15 or 12 months) applicable to the Participant’s position, commencing on the first Company payroll payday (determined in accordance with the payroll schedule of the Company) following the later of (i) the date that the executed Severance Agreement is returned to the Company, or (ii) the expiration of the revocation period of the Severance Agreement (such payroll date, the “Payment Date”), provided that MSC has received from such Participant a fully executed Severance Agreement at least eight (8) days prior to the Payment Date and such Severance Agreement has not been revoked by the Participant prior to the Payment Date.
(b)In addition to the Severance Allowance as calculated above there will be an additional payment amount (the “Bonus Allowance”) for associates who are in roles that are bonus eligible. The amount to be paid shall be calculated at 100% of the individual’s bonus target prorated for the current fiscal year based on the date of the Qualifying Termination so long as the Qualifying Termination date is on or after the first day of MSC’s third fiscal quarter. Any Qualifying Termination that occurs before the first day of MSC’s third fiscal quarter shall not receive a bonus payment. This additional payment (if any) is payable in a lump sum on the Payment Date. The Bonus Allowance and the Severance Allowance are collectively the “Severance Payment.”
(c)All payments of any Severance Benefit shall be net of any required withholding, any employment taxes and other required taxes and deductions with respect to the Severance Benefit.
Section 6.Benefits Subsidy Payment. In the event a Participant who is covered under the Company’s current Healthcare Plans incurs a Qualifying Termination, and such Participant is eligible to continue health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for periods after the date coverage would otherwise terminate on account of such Qualifying Termination, the Company shall pay to the Participant an amount equal to the credit provided by the Company toward the cost of the Participant’s healthcare coverage (determined based on the Participant’s salary band, plan election and coverage tier immediately prior to the Qualifying Termination and including any Wellness credit to which the Participant was entitled immediately prior to the Qualifying Termination) for the period determined in accordance with the following chart (the “Benefits Subsidy”):
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| Participant's Level of Employment | Aggregate Amount of Company Benefits Subsidy | ||||
| Executive Vice President | 18 months of Benefits Subsidy | ||||
| Senior Vice President | 15 months of Benefits Subsidy | ||||
| Vice President | 12 months of Benefits Subsidy | ||||
The Benefits Subsidy will be paid to the Participant in one-lump sum payment on the Payment Date.
Section 7.Vesting Acceleration Benefit. In the event a Participant incurs a Qualifying Termination, subject to the provisions of Section 4 above, as of the Termination Date, any unvested Awards under the MSC Industrial Direct, Co. Inc. 2015 Omnibus Incentive Plan or the MSC Industrial Direct, Co. Inc. 2023 Omnibus Incentive Plan (collectively, the “Omnibus Plans”) held by a Participant on the Termination Date shall be deemed to be vested as follows:
(a)For any unvested Options or Stock Appreciation Rights (including any assumed or substituted options or stock appreciation rights) held by the Participant that have an exercise price that is no greater than the Fair Market Value of a Share of the underlying MSC stock on the Termination Date, each such Award will become vested and exercisable with respect to the number of Options or Stock Appreciation Rights that would have vested on the next scheduled vesting date for such Award in accordance with terms of the applicable Award Agreement and Omnibus Plan.
(b)For Restricted Stock Awards, Restricted Stock Unit Awards, Performance Share Awards and other share-based Awards (including assumed or substituted restricted stock, restricted stock units, performance shares and other share-based awards) held by the Participant, any restrictions applicable to each such Award will lapse with respect to the number of Shares that would have vested on the next scheduled vesting date for such Award and any performance conditions imposed with respect to such Shares shall be deemed to be achieved at target performance levels or as otherwise provided in the applicable Award Agreement.
For purposes of this Section 7, capitalized terms not otherwise defined in the Plan shall have the meanings prescribed under the applicable Omnibus Plan. Except as provided in this Section 7, the terms of the Omnibus Plans and the applicable Award Agreements will continue to apply.
Section 8.Outplacement Services. The Severance Committee may determine, in its sole discretion, to provide outplacement services as part of any Severance Benefit of any Participant (“Outplacement Services”). Any such outplacement services shall be of such nature and such duration as the Severance Committee shall determine, in its discretion, and shall be described in the applicable Participant’s Severance Agreement. A Participant must commence usage of any Outplacement Services provided in a Severance Benefit no later than ninety (90) days after the Participant’s Termination Date. Outplacement Services not commenced by the end of such ninety (90)-day period shall be immediately forfeited.
Section 9.Administration. The Severance Committee of MSC shall be the plan administrator (the “Severance Committee”). The Severance Committee shall be responsible for the overall operation and administration of the Plan. The Severance Committee may appoint or employ such persons as it, he or she may deem necessary to render advice with respect to any responsibility of the Company or the Severance Committee under the Plan. The Severance
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Committee shall have the exclusive discretionary power and authority to interpret the terms of the Plan and to decide all questions concerning the operation and administration of the Plan including, without limitation, the eligibility of any person to participate in the Plan, the determination whether a Qualifying Termination under the Plan has occurred, the right to and amount of any benefit payable under the Plan to any individual and the date on which any individual ceases to be a Plan Participant. The Severance Committee’s decisions hereunder shall be final and binding on all Participants and all other persons interested or claiming any interest under the Plan. The Severance Committee may allocate to any one or more of the Company’s associates any responsibility it may have under the Plan and may designate any other person or persons to carry out any of its responsibilities under the Plan; provided, however, that the Severance Committee shall not allocate or designate any responsibility with respect to a Participant who is an “officer” of the Company, within the meaning of Section 16(a)(1) of the Securities Exchange Act of 1934 (“Section 16”), who is subject to the filing requirements of Section 16.
Section 10.Funding. The Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be, and shall be administered and maintained as, an unfunded welfare benefit plan within the meaning of Section 3(1) of ERISA. This Plan is a “top hat” plan that is available to a select group of management. A ‘top hat’ election was filed for this Plan. The Plan shall not be funded through a trust, an insurance contract or otherwise, and all benefit payments under the Plan shall be made from the general assets of the Company. Accordingly, a Participant shall not have any claim against specific assets of Company, and shall be only a general creditor, with respect to any rights the Participant may have under the Plan. All expenses and costs in connection with the operation of the Plan shall be borne by Company.
Section 11.Amendment and Termination. The Plan may be amended or terminated, in whole or in part, at any time by the Severance Committee, subject to approval, as appropriate, by the Company’s Board of Directors. Except as provided below, any such Plan amendment or termination may apply to all, or any designated class or classes of employees (including, without limitation, former employees). Except as provided below, upon termination of the Plan, the Company shall have no further obligations or liabilities hereunder, and all Plan benefits and all Company and Severance Committee obligations under the Plan shall cease. Notwithstanding the above, except with a Participant’s consent, no such amendment or termination shall impair the rights of a Participant with respect to benefits payable hereunder if such Participant ceased to be an Eligible Associate and became entitled to payment of a Severance Benefit under Sections 4, 5, 6, 7 and 8 hereof prior to the date such amendment or termination was adopted.
Section 12.No Employment Contract. This Plan is not a contract of employment, and the terms of employment of an associate with the Company shall not be affected in any way by this Plan except as specifically provided herein. The adoption of this Plan shall not be construed as conferring any legal rights upon any employee for the continuation of an employment relationship with the Company, nor shall it interfere with the right of the Company to discharge the associate.
Section 13.Miscellaneous.
(a)The payment of a severance pay allowance under the Plan shall not be taken into account for any purpose under any other plan or policy of the Company, except as otherwise specifically provided in the Plan or in such other plan or policy.
(b)No benefit payable under this Plan may be assigned, transferred, pledged as a security for indebtedness or otherwise encumbered, or subjected to any legal process for the payment of any claim against a Participant and any attempt to cause the same to be so subjected shall be null and void and without effect.
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(c)Whenever appropriate in the Plan, words used in the singular may be read in the plural; words used in the plural may be read in the singular; and words importing the masculine gender shall be deemed equally to refer to the feminine or be neutral. Any reference to a Section shall refer to a Section of this Plan, unless otherwise indicated.
(d)The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of the Plan, the text shall control.
(e)In the event that the terms of the Plan conflict with the terms of any summary or other description of the Plan, the terms of the Plan shall govern.
(f)This Plan shall be construed in accordance with the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”), and except to the extent preempted by federal law, the Plan shall be construed, administered and enforced in accordance with the laws of the State of New York, without giving effect to the principles thereof relating to the conflict of laws.
Section 14.Successors. The Plan shall bind any successor to all or substantially all of the Company’s assets in the same manner and to the same extent that the Company would be obligated under the Plan if no succession had taken place.
Section 15.Nonalienation of Benefits. Except as otherwise specifically provided herein, neither the rights nor any amounts payable under the Plan shall not be subject to any manner of anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, including any liability which is for alimony of other payments for the support of a spouse or former spouse, or for any other relative of a Participant, prior to actually being received by the person entitled to payment under the terms of the Plan. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish, execute, levy upon or otherwise dispose of any right to amounts payable hereunder, shall be null and void.
Section 16.Facility of Payment. If a Participant is incompetent, the Company may (i) require the appointment of a conservator or guardian, (ii) distribute amounts to his or her spouse, with respect to a Participant who is married, or to such other relative of an unmarried Participant for the benefit of such Participant, or (iii) distribute such amounts directly to or for the benefit of such Participant; provided however, in all cases, that a conservator, guardian, or other person charged with his or her care has not been appointed. Alternatively, the Company may distribute such amounts to an escrow account established by the Company in its sole and absolute discretion until the proper payee is determined.
Section 17.Overpayment. If, due to mistake or any other reason, a person receives Severance Benefits under the Plan in excess of what the Plan provides, that person shall repay the overpayment to the Company in a lump sum within 30 days of the Company providing notice to such person of the amount of overpayment. If such person fails to so repay the overpayment, then without limiting any other remedies available to the Company, the Company may deduct the amount of the overpayment from any other amounts which become payable to that person under the Plan or otherwise.
Section 18.Claims Procedures. In the event that any person (a “Claimant”) makes a claim for benefits under the Plan (a “Claim”), such Claim shall be made by the Claimant’s filing a notice thereof with the Severance Committee within ninety (90) days after such Claimant first has knowledge of such Claim. Each Claimant who has submitted a Claim to the Severance Committee shall be afforded a reasonable opportunity to state such Claimant’s position and to present evidence and other material relevant to the Claim to the Severance Committee for its
8
consideration in rendering its decision with respect thereto. The Severance Committee shall render its decision in writing within sixty (60) days after the Claim is referred to it, and a copy of such written decision shall be furnished to the Claimant. Each Claimant whose Claim has been denied by the Severance Committee shall be provided written notice thereof, which notice shall set forth the following (in a manner calculated to be understood by such Claimant):
1.the specific reason(s) for the denial;
2.specific reference to pertinent provision(s) of the Plan upon which such denial is based;
3.a description of any additional material or information necessary for the Claimant to perfect such Claim and an explanation of why such material or information is necessary; and
4.an explanation of the procedure hereunder for review of such Claim.
Each such Claimant shall be afforded a reasonable opportunity for a full and fair review of the decision of the Severance Committee denying the Claim. Such review shall be by the Severance Committee. Such appeal shall be made within ninety (90) days after the Claimant received the written decision of the Severance Committee and shall be made by the written request of the Claimant or such Claimant’s duly authorized representative to the Severance Committee. In the event of appeal, the Claimant or such Claimant’s duly authorized representative may review pertinent documents and submit issues and comments in writing to the Severance Committee. The Severance Committee may approve, disapprove or modify the decision of the Severance Committee, in whole or in part, or may take such other action with respect to such appeal as it deems appropriate. The decision of the Severance Committee with respect to such appeal shall be made promptly, and in no event later than sixty (60) days after receipt of such appeal, unless special circumstances require an extension of such time within which to render such decision, in which event such decision shall be rendered as soon as possible and in no event later than one hundred twenty (120) days following receipt of such appeal. The decision of the Severance Committee shall be in writing and in a manner calculated to be understood by the Claimant and shall include specific reasons for such decision and set forth specific references to the pertinent provisions of the Plan upon which such decision is based. The Claimant shall be furnished a copy of the written decision of the Severance Committee. Such decision shall be final and conclusive upon all persons interested therein, except to the extent otherwise provided by applicable law. Not in limitation of the foregoing, the Severance Committee shall have the discretion to decide any factual or interpretative issues in its determination of Claims, and the Severance Committee’s exercise of such discretion shall be conclusive and binding as long as it is not arbitrary or capricious. The Company shall be the agent for service of legal process upon this Plan, and its address for such purpose shall be the address of its principal place of business in Melville, New York.
Section 19.Code Section 409A. Notwithstanding anything in the Plan to the contrary, if any amount or benefit that the Company determines would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Plan by reason of a Participant’s termination of employment, then to the extent necessary to comply with Code Section 409A:
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(a)if the payment or distribution is payable in a lump sum to a “specified employee” (within the meaning of Section 409A of the Code), the Participant’s right to receive payment or distribution of such non-exempt deferred compensation will be delayed until the earlier of the Participant’s death or the seventh month following the Participant’s Termination Date; and
(b)if the payment or distribution is payable over time to a “specified employee” (within the meaning of Section 409A of the Code), the amount of such non-exempt deferred compensation that would otherwise be payable during the six (6) month period immediately following the Participant’s Termination Date will be accumulated and the Participant’s right to receive payment or distribution of such accumulated amount will be delayed until the earlier of the Participant’s death or the seventh month following the Participant’s Termination Date and paid on the earlier of such dates, without interest, and the normal payment or distribution schedule for any remaining payments or distributions will commence.
(c)If the period during which the Participant has discretion to execute or revoke the Severance Agreement straddles two calendar years, the Payment Date will be no earlier than January 1st of the second calendar year.
If an amount to be paid under this Plan is payable in two or more installments, each installment shall be treated as a separate payment for purposes of Section 409A. To the extent any expense reimbursement or in-kind benefit to which a Participant is or may be entitled to receive under the Plan constitutes non-exempt “deferred compensation” for purposes of Section 409A of the Code, then (i) such reimbursement shall be paid to the Participant as soon as administratively practicable after the Participant submits a valid claim for reimbursement, but in no event later than the last day of the Participant’s taxable year following the taxable year in which the expense was incurred, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year of the Participant shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of the Participant, and (iii) the Participant’s right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits subject to Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Nothing in this Plan shall operate or be construed to cause the Plan to fail to comply with the requirements of Code Section 409A and, to the extent applicable, it is intended that the Plan comply with the provisions of Code Section 409A and shall be administered in a manner consistent with that intent. Any provision of this Plan that would cause the Plan or any payment made hereunder to fail to satisfy Code Section 409A shall have no force and effect until amended by the Company to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by Code Section 409A) and may be made by the Company without the consent of any Participant.
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IN WITNESS WHEREOF, the Company has caused this Amended and Restated Plan to be executed as of the 17th day of December, 2025.
MSC INDUSTRIAL DIRECT CO., INC.
By: /s/ Julie Rockett
Name: Julie Rockett
Title: Vice President, Chief People Officer
11
EXHIBIT A
DESIGNATED SUBSIDIARIES:
Sid Tool Co., Inc. DBA MSC Industrial Supply
12
EXHIBIT 31.1
CERTIFICATION
I, Martina McIsaac, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of MSC Industrial Direct Co., Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: January 7, 2026
| /s/ MARTINA MCISAAC | |||||
| Martina McIsaac | |||||
| President and Chief Executive Officer (Principal Executive Officer) | |||||
EXHIBIT 31.2
CERTIFICATION
I, Greg Clark, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of MSC Industrial Direct Co., Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: January 7, 2026
| /s/ GREG CLARK | |||||
| Greg Clark | |||||
| Vice President and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES‑OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of MSC Industrial Direct Co., Inc. (the “Company”) for the fiscal quarter ended November 29, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Martina McIsaac, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 7, 2026
| By: | /s/ MARTINA MCISAAC | |||||||
| Name: | Martina McIsaac President and Chief Executive Officer (Principal Executive Officer) | |||||||
A signed original of this written statement required by Section 906 has been provided to MSC Industrial Direct Co., Inc. and will be retained by it and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES‑OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of MSC Industrial Direct Co., Inc. (the “Company”) for the fiscal quarter ended November 29, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Greg Clark, Interim Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 7, 2026
| By: | /s/ GREG CLARK | |||||||
| Name: | Greg Clark Vice President and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||||||
A signed original of this written statement required by Section 906 has been provided to MSC Industrial Direct Co., Inc. and will be retained by it and furnished to the Securities and Exchange Commission or its staff upon request.