MSC Industrial Direct Management Discusses Q4 2012 Results - Earnings Call Transcript
October 31, 2012 4:10 PM ET
MSC Industrial Direct (MSM)
Q4 2012 Earnings Call
October 31, 2012 11:00 am ET
David K. Sandler - Vice Chairman and Chief Executive Officer
Erik David Gershwind - President, Chief Operating Officer and Director
Jeffrey Kaczka - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Matt Duncan - Stephens Inc., Research Division
Sam Darkatsh - Raymond James & Associates, Inc., Research Division
Hamzah Mazari - Crédit Suisse AG, Research Division
Ryan Merkel - William Blair & Company L.L.C., Research Division
John Anthony Baliotti - Janney Montgomery Scott LLC, Research Division
David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division
John G. Inch - Deutsche Bank AG, Research Division
Robert Barry - UBS Investment Bank, Research Division
R. Scott Graham - Jefferies & Company, Inc., Research Division
Holden Lewis - BB&T Capital Markets, Research Division
Good morning, and welcome to the MSC Industrial Direct Fourth Quarter 2012 Conference Call. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Alex Tramont of FTI Consulting. Please go ahead.
Thank you, and good morning, everyone. Welcome to the MSC Industrial Direct Fiscal 2012 Fourth Quarter and Full Year Conference Call. An online archive of this broadcast will be available 1 hour after the conclusion of the call and available for 1 month on the home page of the company's website at www.mscdirect.com.
During today's presentation, management will refer to financial and management data included under the section Operational Statistics, which you can find on the Investor Relations section of the company's website.
Let me now take a minute to reference the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. This call contains forward-looking statements within the meaning of the U.S. securities laws, including guidance about expected future results, expectations regarding the company's ability to gain market share and expected benefits from the company's investments and strategic plans. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these statements. Information about these risks is noted in the earnings press release under Risk Factors in the MD&A sections of the company's latest annual report on Form 10-K filed with the SEC, as well as in the company's other SEC filings. These forward-looking statements are based on the company's current expectations, and the company assumes no obligation to update these statements. Investors are cautioned not to place under reliance on these forward-looking statements.
In addition, during the course of this call, management of the company will refer to certain adjusted financial results, which are non-GAAP measures. Please refer to the tables attached to the press release and the GAAP versus non-GAAP reconciliation in the Investor Relations section of the company's website, which contain a reconciliation of the adjusted financial measures for the most directly comparable GAAP measures.
I would now like to introduce MSC Industrial Chief Executive Officer, David Sander. David, please go ahead.
David K. Sandler
Thank you, Alex. Good morning, everyone, and thank you for joining us today. With me on the call are Erik Gershwind, President and Chief Operating Officer and soon to be CEO; Jeff Kaczka, our Executive Vice President and Chief Financial Officer. Also with me is John Chironna, our new Vice President of IR and Treasurer, the most recent addition to our executive team.
As you know, our Vice President of Finance and Accounting, Shelley Boxer, recently retired after an extraordinarily successful 40-year business career. We were so fortunate to have had Shelley almost half of that time in his role devoted to MSC, with him being such an integral part of driving our company's access. Many of you know him going all the way back to our IPO as he was instrumental in taking our company public and has helped shape the MSC story ever since. We would like to thank Shelley for his service and immeasurable contributions to MSC.
We would also like to introduce John Chironna and welcome him to our company. We all recognize that while John will have big shoes to fill, his many years of experience in IR and finance and his exceptional background and track record of success have prepared him well to take MSC to the next level in our growth story. Please join us in welcoming John as you have the opportunity to meet him in the months to come.
In light of our recently announced transition, I will make some opening comments and turn it over to Erik to lead the call. Jeff will then provide details on our financial performance.
I came into this industry almost 4 decades ago and have seen extraordinary change during that time. What customers may have once regarded as a nice-to-have is now considered a business imperative and requisite to their survival. There is a shift occurring away from the traditional distributor relationships that previously cemented the bond to a customer's increasing focus on consolidating spend and reducing supply base, better managing inventory and reducing the cost of the metalworking products and MRO supplies required to run their shop or facility.
Driven by this increase in customer demands, there could be no doubt that the phase of the consolidation in our fragmented industry is accelerating and will continue to gain further momentum. The scales have clearly tipped in favor of those distributors with national scale, extensive information technology and e-Commerce capabilities, sophisticated inventory management offerings and a platform that can flawlessly deliver virtually any product a customer needs in a matter of a day while providing the technical expertise to help make their businesses more productive and profitable.
The announcement of Erik as CEO is the culmination of a carefully planned leadership transition in our company. Much the same as when Mitchell Jacobson succeeded his dad, our founder, Sid Jacobson, and when I succeeded Mitchell, it's part of a seamless process at MSC, which makes us a company that is built to last. In working with Erik for more than 16 years, I've had a unique bird's eye view of his growth and development as a leader, how he thinks and approaches business decisions. And I've witnessed firsthand his incredible vision for the future, strategic acumen and depth of understanding of our business and perhaps, most importantly, what it takes to win for all stakeholders. I can say to all of you with complete certainty that Erik is the right leader for this next phase of accelerating consolidation in our industry. I have absolute confidence that he and his team will take MSC to new heights of success and levels never before seen in our history. I'd like to congratulate Erik on his appointment to Chief Executive Officer, and I look forward to working with him to complete a seamless transition.
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