Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
May 30, 2020 | Jun. 15, 2020 | |
Class of Stock [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-14130 | |
Entity Registrant Name | MSC INDUSTRIAL DIRECT CO., INC. | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 11-3289165 | |
Entity Address, Address Line One | 75 Maxess Road | |
Entity Address, City or Town | Melville | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11747 | |
City Area Code | 516 | |
Local Phone Number | 812-2000 | |
Title of 12(b) Security | Class A Common Stock, par value $.001 | |
Trading Symbol | MSM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001003078 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --08-29 | |
Amendment Flag | false | |
Class A Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 45,525,464 | |
Class B Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,054,856 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | May 30, 2020 | Aug. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 353,393 | $ 32,286 |
Accounts receivable, net of allowance for doubtful accounts of $19,959 and $17,088, respectively | 544,446 | 541,091 |
Inventories | 575,093 | 559,136 |
Prepaid expenses and other current assets | 83,022 | 67,099 |
Total current assets | 1,555,954 | 1,199,612 |
Property, plant and equipment, net | 307,150 | 310,854 |
Goodwill | 676,262 | 677,266 |
Identifiable intangibles, net | 107,197 | 116,668 |
Operating lease assets | 58,321 | |
Other assets | 4,826 | 6,837 |
Total assets | 2,709,710 | 2,311,237 |
Current Liabilities: | ||
Current portion of debt including obligations under finance leases | 310,482 | 175,453 |
Current portion of operating lease liabilities | 21,888 | |
Accounts payable | 126,938 | 160,110 |
Accrued expenses and other current liabilities | 132,703 | 111,353 |
Total current liabilities | 592,011 | 446,916 |
Long-term debt including obligations under finance leases | 667,234 | 266,431 |
Noncurrent operating lease liabilities | 36,163 | |
Deferred income taxes and tax uncertainties | 114,010 | 114,011 |
Total liabilities | 1,409,418 | 827,358 |
Commitments and Contingencies | ||
MSC Industrial Shareholders’ Equity: | ||
Preferred stock; $0.001 par value; 5,000,000 shares authorized; none issued and outstanding | ||
Additional paid-in capital | 685,982 | 659,226 |
Retained earnings | 739,035 | 946,651 |
Accumulated other comprehensive loss | (25,582) | (22,776) |
Class A treasury stock, at cost, 1,238,443 and 1,248,944 shares, respectively | (104,589) | (104,607) |
Total MSC Industrial shareholders’ equity | 1,294,903 | 1,478,550 |
Noncontrolling interest | 5,389 | 5,329 |
Total shareholders' equity | 1,300,292 | 1,483,879 |
Total liabilities and shareholders' equity | 2,709,710 | 2,311,237 |
Class A Common Stock [Member] | ||
MSC Industrial Shareholders’ Equity: | ||
Common stock | 47 | 46 |
Class B Common Stock [Member] | ||
MSC Industrial Shareholders’ Equity: | ||
Common stock | $ 10 | $ 10 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
May 30, 2020 | Aug. 31, 2019 | |
Accounts receivable, allowance for doubtful accounts | $ 19,959 | $ 17,088 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A treasury stock, at cost, shares | 1,238,443 | 1,248,944 |
Class A Common Stock [Member] | ||
Common stock, votes per share | one | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 46,763,907 | 46,277,284 |
Class B Common Stock [Member] | ||
Common stock, votes per share | ten | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 10,054,856 | 10,193,348 |
Common stock, shares outstanding | 10,054,856 | 10,193,348 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | |
Condensed Consolidated Statements Of Income [Abstract] | ||||
Net sales | $ 834,972 | $ 866,546 | $ 2,444,667 | $ 2,521,147 |
Cost of goods sold | 481,010 | 497,891 | 1,412,457 | 1,442,693 |
Gross profit | 353,962 | 368,655 | 1,032,210 | 1,078,454 |
Operating expenses | 244,110 | 258,154 | 754,390 | 768,972 |
Income from operations | 109,852 | 110,501 | 277,820 | 309,482 |
Other income (expense): | ||||
Interest expense | (5,451) | (4,565) | (12,117) | (13,160) |
Interest income | 173 | 178 | 251 | 504 |
Other (expense) income, net | (560) | (95) | (509) | (330) |
Total other expense | (5,838) | (4,482) | (12,375) | (12,986) |
Income before provision for income taxes | 104,014 | 106,019 | 265,445 | 296,496 |
Provision for income taxes | 25,900 | 26,505 | 66,323 | 74,320 |
Net income | 78,114 | 79,514 | 199,122 | 222,176 |
Less: Net income (loss) attributable to noncontrolling interest | 411 | (87) | 501 | (81) |
Net income attributable to MSC Industrial | $ 77,703 | $ 79,601 | $ 198,621 | $ 222,257 |
Net income per common share: | ||||
Basic | $ 1.40 | $ 1.44 | $ 3.58 | $ 4.02 |
Diluted | $ 1.40 | $ 1.44 | $ 3.57 | $ 4 |
Weighted average shares used in computing net income per common share: | ||||
Basic | 55,563 | 55,158 | 55,435 | 55,266 |
Diluted | 55,599 | 55,387 | 55,581 | 55,556 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | ||
Condensed Consolidated Statements Of Comprehensive Income [Abstract] | |||||
Net income, as reported | $ 78,114 | $ 79,514 | $ 199,122 | $ 222,176 | |
Other comprehensive income, net of tax: | |||||
Foreign currency translation adjustments | (4,065) | (2,576) | (3,247) | (3,242) | |
Comprehensive income | [1] | 74,049 | 76,938 | 195,875 | 218,934 |
Comprehensive income attributable to noncontrolling interest: | |||||
Less: Net income | (411) | 87 | (501) | 81 | |
Foreign currency translation adjustments | 536 | 83 | 441 | 146 | |
Comprehensive income attributable to MSC Industrial | $ 74,174 | $ 77,108 | $ 195,815 | $ 219,161 | |
[1] | There were no material taxes associated with other comprehensive income during the thirteen and thirty-nine-week periods ending May 30, 2020 and June 1, 2019, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | |
Condensed Consolidated Statements Of Comprehensive Income [Abstract] | ||||
Other comprehensive income, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Shareholders' Equity - USD ($) $ in Thousands | Class A Common Stock [Member]Common Stock [Member] | Class A Common Stock [Member]Retained Earnings [Member] | Class A Common Stock [Member]Treasury Stock [Member] | Class A Common Stock [Member] | Class B Common Stock [Member]Common Stock [Member] | Class B Common Stock [Member]Retained Earnings [Member] | Class B Common Stock [Member] | Additional Paid-In-Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total Shareholders' Equity Attributable to MSC Industrial [Member] | Noncontrolling Interest [Member] | Total |
Balance, Value at Sep. 01, 2018 | $ 55 | $ 10 | $ 657,749 | $ 1,325,822 | $ (19,634) | $ (576,748) | ||||||||
Issuance of Noncontrolling Interest in MSC Mexico | $ 4,637 | |||||||||||||
Capital Contributions | 1,022 | |||||||||||||
Foreign Currency Translation Adjustment | (3,096) | (146) | $ (3,242) | |||||||||||
Net Income | 222,257 | (81) | 222,257 | |||||||||||
Associate Incentive Plans | 29,812 | 1,769 | ||||||||||||
Repurchase and retirement of common stock, Value | (1) | $ (48,439) | (11,887) | |||||||||||
Repurchases of common stock, Value | $ (24,137) | |||||||||||||
Cash dividends on common stock | (85,042) | $ (19,266) | ||||||||||||
Dividend equivalents declared, net of cancellations | (781) | |||||||||||||
Balance, Value at Jun. 01, 2019 | 54 | 10 | 675,674 | 1,394,551 | (22,730) | (599,116) | $ 1,448,443 | 5,432 | 1,453,875 | |||||
Dividends declared per common share | $ 1.89 | $ 1.89 | ||||||||||||
Balance, Value at Mar. 02, 2019 | 54 | 10 | 670,047 | 1,349,972 | (20,237) | (599,603) | 5,602 | |||||||
Foreign Currency Translation Adjustment | (2,493) | (83) | (2,576) | |||||||||||
Net Income | 79,601 | (87) | 79,601 | |||||||||||
Associate Incentive Plans | 5,627 | 526 | ||||||||||||
Repurchase and retirement of common stock, Value | ||||||||||||||
Repurchases of common stock, Value | (39) | |||||||||||||
Cash dividends on common stock | (28,335) | (6,422) | ||||||||||||
Dividend equivalents declared, net of cancellations | (265) | |||||||||||||
Balance, Value at Jun. 01, 2019 | 54 | 10 | 675,674 | 1,394,551 | (22,730) | (599,116) | 1,448,443 | 5,432 | 1,453,875 | |||||
Dividends declared per common share | 0.63 | 0.63 | ||||||||||||
Balance, Value at Aug. 31, 2019 | 46 | 10 | 659,226 | 946,651 | (22,776) | (104,607) | 5,329 | 1,483,879 | ||||||
Foreign Currency Translation Adjustment | (2,806) | (441) | (3,247) | |||||||||||
Net Income | 198,621 | 501 | 198,621 | |||||||||||
Associate Incentive Plans | 1 | 26,756 | 3,254 | |||||||||||
Repurchase and retirement of common stock, Value | ||||||||||||||
Repurchases of common stock, Value | (3,236) | |||||||||||||
Cash dividends on common stock | (329,052) | (73,433) | ||||||||||||
Dividend equivalents declared, net of cancellations | (3,752) | |||||||||||||
Balance, Value at May. 30, 2020 | 47 | 10 | 685,982 | 739,035 | (25,582) | (104,589) | 1,294,903 | 5,389 | 1,300,292 | |||||
Dividends declared per common share | 7.25 | 7.25 | ||||||||||||
Balance, Value at Feb. 29, 2020 | 47 | 10 | 681,657 | 703,396 | (22,053) | (105,758) | 5,514 | |||||||
Foreign Currency Translation Adjustment | (3,529) | (536) | (4,065) | |||||||||||
Net Income | 77,703 | 411 | 77,703 | |||||||||||
Associate Incentive Plans | 4,325 | 1,197 | ||||||||||||
Repurchase and retirement of common stock, Value | ||||||||||||||
Repurchases of common stock, Value | $ (28) | |||||||||||||
Cash dividends on common stock | $ (34,129) | $ (7,541) | ||||||||||||
Dividend equivalents declared, net of cancellations | (394) | |||||||||||||
Balance, Value at May. 30, 2020 | $ 47 | $ 10 | $ 685,982 | $ 739,035 | $ (25,582) | $ (104,589) | $ 1,294,903 | $ 5,389 | $ 1,300,292 | |||||
Dividends declared per common share | $ 0.75 | $ 0.75 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 30, 2020 | Jun. 01, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 199,122 | $ 222,176 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 51,354 | 48,539 |
Non-cash operating lease cost | 16,852 | |
Stock-based compensation | 12,463 | 12,167 |
Loss on disposal of property, plant, and equipment | 278 | 325 |
Provision for doubtful accounts | 8,008 | 9,013 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (13,788) | (30,180) |
Inventories | (17,049) | (33,672) |
Prepaid expenses and other current assets | (17,082) | (10,841) |
Operating lease liabilities | (16,634) | |
Other assets | 2,008 | (609) |
Accounts payable and accrued liabilities | (10,591) | (29,718) |
Total adjustments | 15,819 | (34,976) |
Net cash provided by operating activities | 214,941 | 187,200 |
Cash Flows from Investing Activities: | ||
Expenditures for property, plant and equipment | (35,920) | (35,956) |
Proceeds from sale of available for sale securities | 27,025 | |
Cash used in business acquisitions, net of cash acquired | (2,286) | (11,625) |
Net cash used in investing activities | (38,206) | (20,556) |
Cash Flows from Financing Activities: | ||
Repurchases of common stock | (3,236) | (84,464) |
Payments of regular cash dividends | (124,851) | (104,308) |
Payment of special cash dividends | (277,634) | |
Proceeds from sale of Class A common stock in connection with associate stock purchase plan | 3,287 | 3,472 |
Proceeds from exercise of Class A common stock options | 13,530 | 15,527 |
Proceeds from long-term debt | 100,000 | |
Borrowings under the revolving credit facilities | 1,012,200 | 358,000 |
Payments under the revolving credit facilities | (578,000) | (336,000) |
Payments on finance lease and financing obligations | (1,629) | (28,007) |
Other, net | 1,162 | 1,821 |
Net cash provided by (used in) financing activities | 144,829 | (173,959) |
Effect of foreign exchange rate changes on cash and cash equivalents | (457) | (131) |
Net increase (decrease) in cash and cash equivalents | 321,107 | (7,446) |
Cash and cash equivalents—beginning of period | 32,286 | 46,217 |
Cash and cash equivalents—end of period | 353,393 | 38,771 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for income taxes | 39,672 | 69,413 |
Cash paid for interest | $ 8,501 | $ 10,791 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
May 30, 2020 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | Note 1. Basis of Presentation The accompanying 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, the “Company”) and in the opinion of management include all normal recurring material adjustments necessary to present fairly the Company’s financial position as of May 30, 2020 and August 31, 2019 , the results of operations for the thirteen and thirty-nine weeks ended May 30, 2020 and June 1, 2019 , and cash flows for the thirty-nine weeks ended May 30, 2020 and June 1, 2019 . The August 31, 2019 financial information was derived from the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. The Company, however, believes that the disclosures contained in this report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934 for a Quarterly Report on Form 10-Q and are adequate to make the information presented not misleading. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended August 31, 2019. The Company’s fiscal year ends on the Saturday closest to August 31 of each year. Unless the context requires otherwise, references to years contained herein pertain to the Company’s fiscal year. The Company’s 2020 fiscal year will be a 52-week accounting period that will end on August 29, 2020 and its 2019 fiscal year was a 52-week accounting period that ended on August 31, 2019. Principles of Consolidation The 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. Impact of COVID-19 The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time. See Item 2., Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A), specifically the “Recent Developments and Highlights” and “Liquidity and Capital Resources” sections, for further discussion. Recently Adopted Accounting Pronouncements Effective September 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) standard Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) as subsequently amended (collectively, “ASU 2016-02”). This is a comprehensive new standard that amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet and disclosing key information about leasing arrangements. The Company utilized the optional transition method set forth in ASU 2018-11 that allows entities to initially apply the new lease accounting standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Therefore, the adoption did not require restatement of prior periods. In addition, the Company elected the transition package of practical expedients permitted within the standard, which allowed it to carry forward the historical lease classification for arrangements that commenced prior to the effective date. As a result of the adoption of ASU 2016-02 on September 1, 2019, the Company recorded both operating lease assets of $ 61,212 and operating lease liabilities of $ 60,730 . The adoption of ASU 2016-02 had an immaterial impact on the Company’s Condensed Consolidated Statement of Income and Condensed Consolidated Statement of Cash Flows. The adoption of this standard also resulted in a change in the naming convention for leases classified historically as capital leases. These leases are now referred to as finance leases. See Note 7 “Leases” for additional qualitative and quantitative information about the Company's leases. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for financial statement periods beginning after December 15, 2019. The new standard is effective for the Company for its fiscal year 2021. The Company is currently evaluating the standard to determine the impact, if any, of adoption to its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. 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 be significant to the Company’s financial position, results of operations or cash flows. |
Revenue
Revenue | 9 Months Ended |
May 30, 2020 | |
Revenue [Abstract] | |
Revenue | 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, and invoicing occurs at approximately the same point in time. The Company recognizes revenue once the customer obtains control of the products. 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 obligation. 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 $ 5,457 and $ 5,432 as of May 30, 2020 and August 31, 2019, respectively, and are reported as Accrued expenses and other current liabilities in the 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 a Customer The Company offers customers sales incentives, which primarily consist of volume rebates, and upfront sign-on payments. These volume rebates and 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 $ 18,338 and $ 14,770 as of May 30, 2020 and August 31, 2019, respectively, and are included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. Sign-on payments, not yet recognized as a reduction of revenue, are recorded in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets and were $ 3,889 and $ 2,788 as of May 30, 2020 and August 31, 2019, 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 obligation. The Company did no t have material unsatisfied performance obligations, contract assets or liabilities as of May 30, 2020 and August 31, 2019. Disaggregation of Revenue The Company operates in one operating and reportable segment as a distributor of metalworking and maintenance, repair and operations (“MRO”) products and services. The Company serves a large number of customers in diverse industries, which are subject to different economic and industry factors. The Company's presentation of net sales by customer end-market 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. The following tables presents the Company's percentage of net sales by customer end-market for the thirteen and thirty-nine week periods ended May 30, 2020 and June 1, 2019: Thirteen Weeks Ended Thirteen Weeks Ended May 30, 2020 June 1, 2019 Manufacturing Heavy 40 % 47 % Manufacturing Light 19 % 22 % Government 15 % 7 % Retail/Wholesale 7 % 6 % Commercial Services 5 % 4 % Other (1) 14 % 14 % Total net sales 100 % 100 % __________________________ (1) The other category primarily includes individual customer and small business net sales not assigned to a specific industry classification. Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended May 30, 2020 June 1, 2019 Manufacturing Heavy 45 % 48 % Manufacturing Light 22 % 22 % Government 10 % 8 % Retail/Wholesale 6 % 6 % Commercial Services 5 % 4 % Other (1) 12 % 12 % Total net sales 100 % 100 % __________________________ (1) The other category primarily includes individual customer and small business net sales not assigned to a specific industry classification. The Company’s net sales originating from the following geographic areas were as follows for the thirteen and thirty-nine week periods ended May 30, 2020 and June 1, 2019: Thirteen Weeks Ended Thirteen Weeks Ended May 30, 2020 June 1, 2019 United States $ 795,865 96 % $ 831,533 96 % UK 10,019 1 % 14,399 2 % Canada 9,783 1 % 10,747 1 % Mexico 19,305 2 % 9,867 1 % Total net sales $ 834,972 100 % $ 866,546 100 % Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended May 30, 2020 June 1, 2019 United States $ 2,336,528 96 % $ 2,434,603 97 % UK 37,375 1 % 43,373 2 % Canada 31,041 1 % 30,363 1 % Mexico 39,723 2 % 12,808 <1 % Total net sales $ 2,444,667 100 % $ 2,521,147 100 % |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
May 30, 2020 | |
Net Income Per Share [Abstract] | |
Net Income Per Share | Note 3: Net Income per Share The Company’s non-vested restricted share awards (RSAs) contain non-forfeitable rights to dividends and meet the criteria of a participating security as defined by ASC Topic 260, “Earnings Per Share”. Under the two-class method, net income per share is computed by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, net income is allocated to both common shares and participating securities based on their respective weighted average shares outstanding for the period. Effective in fiscal 2016, the Company discontinued its granting of RSAs and as of May 30, 2020 does not have any non-vested RSAs outstanding. The following table sets forth the computation of basic and diluted net income per common share under the two-class method for the thirteen and thirty-nine weeks ended May 30, 2020 and June 1, 2019, respectively: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, June 1, May 30, June 1, 2020 2019 2020 2019 Net income attributable to MSC Industrial as reported $ 77,703 $ 79,601 $ 198,621 $ 222,257 Less: Distributed net income available to participating securities — ( 10 ) ( 10 ) ( 34 ) Less: Undistributed net income available to participating securities — ( 19 ) — ( 66 ) Numerator for basic net income per share: Undistributed and distributed net income available to common shareholders $ 77,703 $ 79,572 $ 198,611 $ 222,157 Add: Undistributed net income allocated to participating securities — 19 — 66 Less: Undistributed net income reallocated to participating securities — ( 19 ) — ( 66 ) Numerator for diluted net income per share: Undistributed and distributed net income available to common shareholders $ 77,703 $ 79,572 $ 198,611 $ 222,157 Denominator: Weighted average shares outstanding for basic net income per share 55,563 55,158 55,435 55,266 Effect of dilutive securities 36 229 146 290 Weighted average shares outstanding for diluted net income per share 55,599 55,387 55,581 55,556 Net income per share Two-class method: Basic $ 1.40 $ 1.44 $ 3.58 $ 4.02 Diluted $ 1.40 $ 1.44 $ 3.57 $ 4.00 Potentially dilutive securities 1,933 1,093 1,417 939 Potentially dilutive securities attributable to outstanding stock options, restricted stock units, and performance share units are excluded from the calculation of diluted earnings per share where the combined exercise price and average unamortized fair value are greater than the average market price of MSC common stock, and therefore their inclusion would be anti-dilutive. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
May 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 4. Stock-Based Compensation The Company accounts for all share-based payments in accordance with ASC Topic 718, “Compensation—Stock Compensation,” as subsequently amended. Stock - based compensation expense included in operating expenses for the thirteen and thirty-nine -week periods ended May 30, 2020 and June 1, 2019 was as follows: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, June 1, May 30, June 1, 2020 2019 2020 2019 (Dollars in thousands) Stock options $ 1,089 $ 1,215 $ 2,818 $ 3,541 Restricted share awards 1 346 185 1,216 Restricted stock units 2,970 2,452 8,885 7,181 Performance share units 171 — 385 - Associate Stock Purchase Plan 54 76 190 229 Total 4,285 4,089 12,463 12,167 Deferred income tax benefit ( 1,068 ) ( 1,026 ) ( 3,116 ) ( 3,054 ) Stock-based compensation expense, net $ 3,217 $ 3,063 $ 9,347 $ 9,113 Stock Options The Company discontinued its grants of stock options in fiscal 2020. For the thirteen and thirty-nine-week periods ended June 1, 2019, the fair value of each option grant was estimated on the date of grant using the Black - Scholes option pricing model with the following assumptions: Thirteen and Thirty-Nine Weeks Ended June 1, 2019 Expected life (in years) 4.0 Risk-free interest rate 2.98 % Expected volatility 23.13 % Expected dividend yield 2.70 % Weighted-average grant-date fair value $ 14.05 A summary of the Company’s stock option activity for the thirty-nine-week period ended May 30, 2020 is as follows: Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding on August 31, 2019 1,894 $ 74.73 Granted — — Exercised ( 212 ) 63.81 Canceled/Forfeited ( 114 ) 80.26 Outstanding on May 30, 2020 1,568 $ 75.80 3.7 $ 2,646 Exercisable on May 30, 2020 1,042 $ 73.81 3.2 $ 2,646 The unrecognized share - based compensation cost related to stock option expense at May 30, 2020 was $ 4,627 and will be recognized over a weighted average period of 1.7 years. The total intrinsic value of options exercised, which represents the difference between the exercise price and market value of common stock measured at each individual exercise date, during the thirty-nine -week periods ended May 30, 2020 and June 1, 2019 was $ 2,574 and $ 1,882 , respectively. Performance Share Units Beginning in fiscal 2020, the Company grants performance share units (“PSU”) as part of its long-term stock-based compensation program. PSUs cliff vest after a three year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. The following table summarizes all transactions related to PSUs under the Company’s 2015 Omnibus Incentive Plan (based on target award amounts) for the thirty-nine weeks ended May 30, 2020: Shares Weighted-Average Grant-Date Fair Value Non-vested PSUs at August 31, 2019 — $ — Granted 31 76.32 Vested — — Canceled/Forfeited ( 3 ) 76.32 Non-vested PSUs at May 30, 2020 (1) 28 $ 76.32 (1) Excludes 3 shares of accrued incremental dividend equivalent rights on outstanding PSUs granted under the Company's 2015 Omnibus Incentive Plan. The fair value of each PSU is the closing stock price on the NYSE of the Company’s Class A common stock on the date of grant. Upon vesting, subject to achievement of performance goals, a portion of the PSU award may be withheld to satisfy the statutory income tax withholding obligation. The remaining PSUs will be settled in shares of the Company’s Class A common stock when vested. These awards accrue dividend equivalents on the underlying PSUs (in the form of additional stock units) based on dividends declared on the Company’s Class A common stock and these dividend equivalents are paid out in unrestricted common stock on the vesting dates of the underlying PSUs, subject to the same performance vesting requirements. The unrecognized share-based compensation cost related to the PSUs at May 30, 2020 was $ 1,731 and is expected to be recognized over a period of 2.4 years. Restricted Share Awards A summary of the non - vested restricted share award (“RSA”) activity under the Company’s 2005 Omnibus Incentive Plan and 2015 Omnibus Incentive Plan for the thirty-nine -week period ended May 30, 2020 is as follows: Shares Weighted-Average Grant-Date Fair Value Non-vested RSAs at August 31, 2019 21 $ 82.00 Granted — — Vested ( 19 ) 82.86 Canceled/Forfeited ( 2 ) 70.40 Non-vested RSAs at May 30, 2020 — $ — The fair value of each RSA is the closing stock price on the NYSE of the Company’s Class A common stock on the date of grant. Upon vesting, a portion of the RSA award may be withheld to satisfy the statutory income tax withholding obligation. The remaining RSAs vested in March 2020. There are no non-vested RSAs or remaining unrecognized share-based compensation costs at May 30, 2020. Restricted Stock Units A summary of the Company’s non-vested Restricted Stock Unit (“RSU”) award activity under the Company’s 2015 Omnibus Incentive Plan for the thirty-nine-week period ended May 30, 2020 is as follows: Shares Weighted-Average Grant-Date Fair Value Non-vested RSUs at August 31, 2019 416 $ 76.93 Granted 237 75.97 Vested ( 128 ) 74.82 Canceled/Forfeited ( 37 ) 77.24 Non-vested RSUs at May 30, 2020 (1) 488 $ 77.00 (1) Excludes approximately 66 shares of accrued incremental dividend equivalent rights on outstanding RSUs granted under the Company's 2015 Omnibus Incentive Plan. The fair value of each RSU is the closing stock price on the NYSE of the Company’s Class A common stock on the date of grant. Upon vesting, a portion of the RSU award may be withheld to satisfy the statutory income tax withholding obligation. The remaining RSUs will be settled in shares of the Company’s Class A common stock when vested. These awards accrue dividend equivalents on the underlying RSUs (in the form of additional stock units) based on dividends declared on the Company’s Class A common stock and these dividend equivalents are paid out in unrestricted common stock on the vesting dates of the underlying RSUs. The unrecognized share-based compensation cost related to the RSUs at May 30, 2020 was $ 29,685 and is expected to be recognized over a weighted average period of 2.9 years. |
Fair Value
Fair Value | 9 Months Ended |
May 30, 2020 | |
Fair Value [Abstract] | |
Fair Value | 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 following 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. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, and outstanding indebtedness. 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 May 30, 2020 and August 31, 2019. During the thirteen and thirty-nine week periods ended May 30, 2020 and June 1, 2019, the Company had no material remeasurements of non-financial assets or liabilities at fair value on a non-recurring basis subsequent to their initial recognition. |
Debt
Debt | 9 Months Ended |
May 30, 2020 | |
Debt [Abstract] | |
Debt | Note 6. Debt Debt at May 30, 2020 and August 31, 2019 consisted of the following: May 30, August 31, 2020 2019 (Dollars in thousands) Revolving credit facility $ 588,000 $ - Uncommitted credit facilities 1,200 155,000 Private Placement Debt: 2.65 % Senior notes, series A, due July 28, 2023 75,000 75,000 2.90 % Senior notes, series B, due July 28, 2026 100,000 100,000 3.79 % Senior notes, due June 11, 2025 20,000 20,000 2.60 % Senior notes, due March 5, 2027 50,000 - 3.04 % Senior notes due January 12, 2023 (2) 50,000 50,000 3.22 % Series 2018A notes, due June 11, 2020 (2) 20,000 20,000 3.42 % Series 2018B notes, due June 11, 2021 (2) 20,000 20,000 2.40 % Series 2019A notes, due March 5, 2024 (2) 50,000 - Financing arrangements 437 82 Less: unamortized debt issuance costs ( 954 ) ( 1,169 ) Total debt, excluding obligations under finance leases $ 973,683 $ 438,913 Less: current portion (1) ( 309,229 ) ( 174,688 ) Total long-term debt, excluding obligations under finance leases $ 664,454 $ 264,225 __________________________ (1) Net of unamortized debt issuance costs expected to be amortized in the next twelve months. (2) Represents private placement debt issued under Shelf Facility Agreements, discussed in further detail below. Revolving Credit Facility and Uncommitted Credit Facilities The Company has a $ 600,000 committed credit facility (the “Committed Facility”). The Committed Facility, which matures on April 14, 2022 , provides for a five year unsecured revolving loan facility. The interest rate is based on either the London Interbank Offered Rate (“LIBOR”) or a base rate, plus in either case a spread based on the Company’s leverage ratio at the end of each fiscal reporting quarter. Based on the interest period the Company selects, interest may be payable every one, two, or three months. Interest is reset at the end of each interest period. The Company currently elects to have loans under the Committed Facility bear interest based on LIBOR with one-month interest periods. In March 2020, the Company borrowed an additional $ 300,000 on the Committed Facility to increase its cash position as a precautionary measure and to preserve financial flexibility in consideration of the disruption and uncertainty surrounding the ongoing COVID-19 pandemic. This amount is reported as Long-term debt including obligations under financing leases and the remaining outstanding balance of $ 288,000 is reported as Current portion of debt including obligations under financing leases within the condensed consolidated balance sheets at May 30, 2020. During the first quarter of fiscal 2019, the Company entered into six unsecured credit facilities that are uncommitted (the “Uncommitted Facilities”), totaling $ 440,000 of maximum uncommitted availability. During the first quarter of fiscal 2020, the Company extended, and in some cases amended, five of the Uncommitted Facilities (the “Amended Uncommitted Facilities”), totaling $ 410,000 of maximum uncommitted availability. Borrowings under the Amended Uncommitted Facilities are generally due at the end of the applicable agreed interest period, but, in any event, no later than the one-year anniversary of the entrance into the applicable Amended Uncommitted Facility. The Amended Uncommitted Facilities contain limited covenants. As of May 30, 2020, the Company did no t have an outstanding balance on the Amended Uncommitted Facilities. During the second quarter of fiscal 2020, the Company entered into an additional uncommitted credit facility (“New Uncommitted Credit Facility”), totaling $ 5,000 of maximum uncommitted availability. As of May 30, 2020, the Company had an outstanding balance of $ 1,200 on the New Uncommitted Credit Facility. An event of default under the Company’s Committed Facility is an event of default under the Amended Uncommitted Facilities and the New Uncommitted Credit Facility. The interest rate on the Amended Uncommitted Facilities and the New Uncommitted Credit Facility is based on LIBOR or the bank’s cost of funds or as otherwise agreed upon by the applicable bank and the Company. The $ 1,200 outstanding balance at the end of the fiscal third quarter of 2020 under the Amended Uncommitted Facilities and the New Uncommitted Credit Facility is classified as short-term in the Company’s Condensed Consolidated Balance Sheet. During the thirty-nine-week period ended May 30, 2020, the Company borrowed $ 1,012,200 and repaid $ 578,000 under all of its credit facilities. As of May 30, 2020 and August 31, 2019, the weighted average interest rates on borrowings under all of its credit facilities were 1.36 % and 3.01 %, respectively. Shelf Facility Agreements In January 2018, the Company entered into Note Purchase and Private Shelf Agreements with Metropolitan Life Insurance Company (“Met Life Note Purchase Agreement”) and PGIM, Inc. (“Prudential Note Purchase Agreement”), and together referred to as the “Shelf Facility Agreements”. The Met Life Note Purchase Agreement provides for an uncommitted facility for the issuance and sale of up to an aggregate total of $ 250,000 of senior notes, at either fixed or floating rates. The Prudential Note Purchase Agreement provides for an uncommitted facility for the issuance and sale of up to an aggregate total of $ 250,000 of senior notes, at a fixed rate. As of May 30, 2020, the uncommitted availability under the Met Life Note Purchase Agreement and the Prudential Note Purchase Agreement is $ 160,000 and $ 200,000 , respectively. Each of the credit facilities, Private Placement Debt, and Shelf Facility Agreements impose several restrictive covenants including the requirement that the Company maintain a maximum consolidated leverage ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation, amortization and stock-based compensation) of no more than 3.00 to 1.00 (or, at the election of the Company after it consummates a material acquisition, a four-quarter temporary increase to 3.50 to 1.00), and a minimum consolidated interest coverage ratio of EBITDA to total interest expense of at least 3.00 to 1.00, during the terms of the credit facilities, Private Placement Debt, and Shelf Facility Agreements. At May 30, 2020, the Company was in compliance with the operating and financial covenants of the credit facilities, Private Placement Debt, and Shelf Facility Agreements. Financing Arrangements From time to time, the Company enters into financing arrangements with vendors to purchase certain information technology equipment or software. The equipment or software acquired from these vendors is paid for over a specified period of time based on the terms agreed upon. During the thirty-nine-week period ended May 30, 2020, the Company entered into financing arrangements related to certain IT equipment and software totaling $ 1,164 . The gross amount of property and equipment acquired under the financing arrangements and its accumulated amortization at May 30, 2020 was $ 1,328 and $ 809 , respectively. |
Leases
Leases | 9 Months Ended |
May 30, 2020 | |
Leases [Abstract] | |
Leases | Note 7. Leases The Company's lease portfolio includes certain real estate (branch offices and customer fulfillment centers), automobiles, and other equipment. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Operating leases are recorded on the balance sheet with operating lease assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. For real estate leases, the Company has elected the practical expedient which allows lease components and non-lease components, such as common area maintenance, to be grouped as a single lease component. The Company has also elected the practical expedient which allows leases with an initial term of twelve months or less to be excluded from the balance sheet. The Company does not guarantee any residual value in its lease agreements, there are no material restrictions or covenants imposed by lease arrangements, and there are no lease transactions with related parties. Real estate leases typically include one or more options to extend the lease. The Company regularly evaluates the renewal options, and when it is reasonably certain of exercise, the Company includes the renewal period in its lease term. The automobile leases contain variable lease payments based on inception and subsequent interest rate fluctuations. For the thirteen and thirty-nine-week periods ended May 30, 2020, the variable lease cost was a benefit due to low current interest rates. When readily determinable, the Company uses the interest rate implicit in its leases to discount lease payments. When the implicit rate is not readily determinable, as is the case with substantially all of the real estate leases, the Company utilizes the incremental borrowing rate. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The rate for each lease was determined using primarily the Company’s credit spread, the lease term, and currency. The components of lease cost for the thirteen and thirty-nine weeks ended May 30, 2020 were as follows: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2020 May 30, 2020 (Dollars in thousands) Operating lease cost $ 6,592 $ 18,952 Variable lease cost (benefit) ( 368 ) ( 459 ) Short-term lease cost 197 681 Finance lease cost: Amortization of leased assets 333 906 Interest on leased liabilities 29 84 Total Lease Cost $ 6,783 $ 20,164 Supplemental balance sheet information relating to operating and finance leases is as follows: May 30, August 31, Classification 2020 2019 Assets (Dollars in thousands) Operating lease assets Operating lease assets $ 58,321 $ - Finance lease assets (1) Property, plant, and equipment, net 3,947 2,958 Total leased assets $ 62,268 $ 2,958 Liabilities Current Operating Current portion of operating lease liabilities $ 21,888 $ - Finance Current portion of debt including obligations under finance leases 1,253 765 Noncurrent Operating Noncurrent operating lease liabilities 36,163 - Finance Long-term debt including obligations under finance leases 2,780 2,206 Total lease liabilities $ 62,084 $ 2,971 (1) Finance lease assets are net of accumulated amortization of $ 1,126 and $ 1,398 as of May 30, 2020 and August 31, 2019. May 30, 2020 Weighted average remaining lease term (years) Operating Leases 3.9 Finance Leases 3.2 Weighted average discount rate Operating Leases 3.4 % Finance Leases 2.7 % The following sets forth supplemental cash flow information related to operating and finance leases: Thirty-Nine Weeks Ended May 30, 2020 (Dollars in thousands) Operating Cash Outflows from Operating Leases $ 18,539 Operating Cash Outflows from Finance Leases 84 Financing Cash Outflows from Finance Leases 903 Leased assets obtained in exchange for new lease liabilities: Operating Leases $ 13,854 Finance Leases 1,973 As of May 30, 2020, future lease payments were as follows: Fiscal Year (Dollars in thousands) Operating Leases Finance Leases Total 2020 (excluding six months) $ 6,311 $ 343 $ 6,654 2021 22,220 1,375 23,595 2022 13,889 1,344 15,233 2023 7,247 1,018 8,265 2024 5,182 152 5,334 Thereafter 7,593 3 7,596 Total Lease Payments 62,442 4,235 66,677 Less: Imputed Interest 4,391 202 4,593 Present Value of Lease Liabilities (1) $ 58,051 $ 4,033 $ 62,084 (1) Includes the current portion of $ 21,888 for operating leases and $ 1,253 for finance leases As of May 30, 2020, the Company's future lease obligations which have not yet commenced are immaterial. Prior Period Disclosures As a result of the adoption of ASC 842, Leases, on September 1, 2019, the Company is required to present future minimum lease payments for operating and finance lease obligations having initial or remaining non-cancelable lease terms in excess of one year. These future minimum lease payments were previously disclosed in the Company’s 2019 Annual Report on Form 10-K and accounted for under previous lease guidance. Commitments as of August 31, 2019 were as follows: August 31, 2019 Fiscal Year Operating Leases Capitalized Lease Obligations 2020 $ 22,463 $ 792 2021 18,022 812 2022 9,923 781 2023 5,184 604 2024 4,083 106 Thereafter 6,023 - Total minimum lease payments $ 65,698 $ 3,095 Less: interest 124 Present value of minimum lease payments $ 2,971 Less: current maturities 765 Present value of minimum lease payments less current maturities $ 2,206 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
May 30, 2020 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note 8. Shareholders’ Equity Common Stock Repurchases and Treasury Stock During the thirteen and thirty-nine-week periods ended May 30, 2020, the Company repurchased 0.5 and 44 shares of its Class A common stock for $ 28 and $ 3,236 , respectively. All of these shares were repurchased by the Company to satisfy the Company’s associates’ tax withholdings liability associated with its share-based compensation program and are reflected at cost as treasury stock in the accompanying Condensed Consolidated Financial Statements for the thirteen and thirty-nine week periods ended May 30, 2020. During the thirteen and thirty-nine week periods ended June 1, 2019, the Company repurchased 0.5 and 1,054 shares of its Class A common stock for $ 39 and $ 84,464 , respectively. From these totals, 0.5 and 316 shares were not retired and the amounts of $ 39 and $ 24,137 are reflected at cost as treasury stock in the accompanying Condensed Consolidated Financial Statements for the thirteen and thirty-nine weeks ended June 1, 2019, respectively. As part of the Company’s ongoing Stock Repurchase Plan, the total number of shares of Class A common stock authorized for future repurchase by the Board of Directors was 1,157 at May 30, 2020. The Company reissued 20 and 55 shares of treasury stock during the thirteen and thirty-nine week periods ended May 30, 2020, respectively, and reissued 14 and 47 shares of treasury stock during the thirteen and thirty-nine week periods ended June 1, 2019, respectively, to fund the Associate Stock Purchase Plan. Dividends on Common Stock On June 30, 2020, the Board of Directors declared a quarterly cash dividend of $ 0.75 per share payable on July 28, 2020 to shareholders of record at the close of business on July 14, 2020 . The dividend will result in a payout of approximately $ 41,685 , based on the number of shares outstanding at June 15, 2020. |
Restructuring and Other Related
Restructuring and Other Related Costs | 9 Months Ended |
May 30, 2020 | |
Restructuring and Other Related Costs [Abstract] | |
Restructuring and Other Related Costs | Note 9. Restructuring and Other Related Costs Consulting Related Costs Beginning in the second quarter of fiscal 2020, the Company engaged consultants to assist in reviewing the optimization of the Company’s operations. Following the uncertainty created by the COVID-19 pandemic, the optimization plan was largely put on hold during the third quarter of fiscal 2020, except for a few select projects. The Company incurred $ 1,333 and $ 3,465 in consulting fees for the thirteen and thirty-nine weeks ended May 30, 2020, respectively. These costs are included within operating expenses in the Condensed Consolidated Statements of Income. Severance and Separation Benefits Beginning in fiscal 2019 and through the first quarter of fiscal 2020, the Company identified opportunities for improvements in its workforce realignment, strategy, and staffing, and increased its focus on performance management, to ensure it has the right skillsets and number of associates to execute its long-term vision. As such, the Company extended voluntary and involuntary severance and separation benefits to certain associates. The severance and separation cost liability balance was $ 6,044 at August 31, 2019. During the thirty-nine week period ended May 30, 2020, the Company accrued severance and separation benefits charges and other related costs for approximately 125 associates of $ 2,403 , which included $ 87 of stock-based compensation expense from the acceleration of equity award vestings. These costs are included within operating expenses in the Condensed Consolidated Statements of Income. In addition, $ 8,104 of charges were paid out during the thirty-nine week period ended May 30, 2020, resulting in a severance and separation cost liability balance of $ 256 at May 30, 2020. |
Product Warranties
Product Warranties | 9 Months Ended |
May 30, 2020 | |
Product Warranties [Abstract] | |
Product Warranties | Note 10. Product Warranties The Company generally offers a maximum one year warranty, including parts and labor, for some of its machinery products. The specific terms and conditions of those warranties vary depending upon the product sold. The Company may be able to recoup some of these costs through product warranties it holds with its original equipment manufacturers, which typically range from thirty day s to ninety day s. In general, many of the Company’s general merchandise products are covered by third-party original equipment manufacturers’ warranties. The Company’s warranty expense for the thirteen and thirty-nine week periods ended May 30, 2020 and June 1, 2019 was minimal. |
Income Taxes
Income Taxes | 9 Months Ended |
May 30, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note 11. Income Taxes During the thirty-nine week period ended May 30, 2020, there were no material changes in unrecognized tax benefits. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
May 30, 2020 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | Note 12. Legal Proceedings There are various claims, lawsuits, and pending actions against the Company incidental to the operation of its business. Although the outcome of these matters is currently not determinable, management 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
May 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events In June 2020, the Company paid $ 20,000 to satisfy its obligation on the Series 2018A Notes associated with the Met Life Note Purchase Agreement referred to in Note 6, Debt. |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 9 Months Ended |
May 30, 2020 | |
Basis Of Presentation [Abstract] | |
Principles Of Consolidation | Principles of Consolidation The 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. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective September 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) standard Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) as subsequently amended (collectively, “ASU 2016-02”). This is a comprehensive new standard that amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet and disclosing key information about leasing arrangements. The Company utilized the optional transition method set forth in ASU 2018-11 that allows entities to initially apply the new lease accounting standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Therefore, the adoption did not require restatement of prior periods. In addition, the Company elected the transition package of practical expedients permitted within the standard, which allowed it to carry forward the historical lease classification for arrangements that commenced prior to the effective date. As a result of the adoption of ASU 2016-02 on September 1, 2019, the Company recorded both operating lease assets of $ 61,212 and operating lease liabilities of $ 60,730 . The adoption of ASU 2016-02 had an immaterial impact on the Company’s Condensed Consolidated Statement of Income and Condensed Consolidated Statement of Cash Flows. The adoption of this standard also resulted in a change in the naming convention for leases classified historically as capital leases. These leases are now referred to as finance leases. See Note 7 “Leases” for additional qualitative and quantitative information about the Company's leases. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for financial statement periods beginning after December 15, 2019. The new standard is effective for the Company for its fiscal year 2021. The Company is currently evaluating the standard to determine the impact, if any, of adoption to its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. 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 be significant to the Company’s financial position, results of operations or cash flows. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
May 30, 2020 | |
Revenue [Abstract] | |
Schedule Of Disaggregation Of Revenue | The following tables presents the Company's percentage of net sales by customer end-market for the thirteen and thirty-nine week periods ended May 30, 2020 and June 1, 2019: Thirteen Weeks Ended Thirteen Weeks Ended May 30, 2020 June 1, 2019 Manufacturing Heavy 40 % 47 % Manufacturing Light 19 % 22 % Government 15 % 7 % Retail/Wholesale 7 % 6 % Commercial Services 5 % 4 % Other (1) 14 % 14 % Total net sales 100 % 100 % __________________________ (1) The other category primarily includes individual customer and small business net sales not assigned to a specific industry classification. Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended May 30, 2020 June 1, 2019 Manufacturing Heavy 45 % 48 % Manufacturing Light 22 % 22 % Government 10 % 8 % Retail/Wholesale 6 % 6 % Commercial Services 5 % 4 % Other (1) 12 % 12 % Total net sales 100 % 100 % __________________________ (1) The other category primarily includes individual customer and small business net sales not assigned to a specific industry classification. The Company’s net sales originating from the following geographic areas were as follows for the thirteen and thirty-nine week periods ended May 30, 2020 and June 1, 2019: Thirteen Weeks Ended Thirteen Weeks Ended May 30, 2020 June 1, 2019 United States $ 795,865 96 % $ 831,533 96 % UK 10,019 1 % 14,399 2 % Canada 9,783 1 % 10,747 1 % Mexico 19,305 2 % 9,867 1 % Total net sales $ 834,972 100 % $ 866,546 100 % Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended May 30, 2020 June 1, 2019 United States $ 2,336,528 96 % $ 2,434,603 97 % UK 37,375 1 % 43,373 2 % Canada 31,041 1 % 30,363 1 % Mexico 39,723 2 % 12,808 <1 % Total net sales $ 2,444,667 100 % $ 2,521,147 100 % |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
May 30, 2020 | |
Net Income Per Share [Abstract] | |
Basic And Diluted Net Income Per Common Share Under The Two-Class Method | Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, June 1, May 30, June 1, 2020 2019 2020 2019 Net income attributable to MSC Industrial as reported $ 77,703 $ 79,601 $ 198,621 $ 222,257 Less: Distributed net income available to participating securities — ( 10 ) ( 10 ) ( 34 ) Less: Undistributed net income available to participating securities — ( 19 ) — ( 66 ) Numerator for basic net income per share: Undistributed and distributed net income available to common shareholders $ 77,703 $ 79,572 $ 198,611 $ 222,157 Add: Undistributed net income allocated to participating securities — 19 — 66 Less: Undistributed net income reallocated to participating securities — ( 19 ) — ( 66 ) Numerator for diluted net income per share: Undistributed and distributed net income available to common shareholders $ 77,703 $ 79,572 $ 198,611 $ 222,157 Denominator: Weighted average shares outstanding for basic net income per share 55,563 55,158 55,435 55,266 Effect of dilutive securities 36 229 146 290 Weighted average shares outstanding for diluted net income per share 55,599 55,387 55,581 55,556 Net income per share Two-class method: Basic $ 1.40 $ 1.44 $ 3.58 $ 4.02 Diluted $ 1.40 $ 1.44 $ 3.57 $ 4.00 Potentially dilutive securities 1,933 1,093 1,417 939 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
May 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule Of Stock-Based Compensation Expense | Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, June 1, May 30, June 1, 2020 2019 2020 2019 (Dollars in thousands) Stock options $ 1,089 $ 1,215 $ 2,818 $ 3,541 Restricted share awards 1 346 185 1,216 Restricted stock units 2,970 2,452 8,885 7,181 Performance share units 171 — 385 - Associate Stock Purchase Plan 54 76 190 229 Total 4,285 4,089 12,463 12,167 Deferred income tax benefit ( 1,068 ) ( 1,026 ) ( 3,116 ) ( 3,054 ) Stock-based compensation expense, net $ 3,217 $ 3,063 $ 9,347 $ 9,113 |
Schedule Of Option Grant Fair Value Assumptions | Thirteen and Thirty-Nine Weeks Ended June 1, 2019 Expected life (in years) 4.0 Risk-free interest rate 2.98 % Expected volatility 23.13 % Expected dividend yield 2.70 % Weighted-average grant-date fair value $ 14.05 |
Summary Of Stock Option Activity | Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding on August 31, 2019 1,894 $ 74.73 Granted — — Exercised ( 212 ) 63.81 Canceled/Forfeited ( 114 ) 80.26 Outstanding on May 30, 2020 1,568 $ 75.80 3.7 $ 2,646 Exercisable on May 30, 2020 1,042 $ 73.81 3.2 $ 2,646 |
Summary Of Performance Share Unit Activity | Shares Weighted-Average Grant-Date Fair Value Non-vested PSUs at August 31, 2019 — $ — Granted 31 76.32 Vested — — Canceled/Forfeited ( 3 ) 76.32 Non-vested PSUs at May 30, 2020 (1) 28 $ 76.32 (1) Excludes 3 shares of accrued incremental dividend equivalent rights on outstanding PSUs granted under the Company's 2015 Omnibus Incentive Plan. |
Restricted Share Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary Of Non-Vested Restricted Share Award Activity | Shares Weighted-Average Grant-Date Fair Value Non-vested RSAs at August 31, 2019 21 $ 82.00 Granted — — Vested ( 19 ) 82.86 Canceled/Forfeited ( 2 ) 70.40 Non-vested RSAs at May 30, 2020 — $ — |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary Of Non-Vested Restricted Stock Unit Award Activity | Shares Weighted-Average Grant-Date Fair Value Non-vested RSUs at August 31, 2019 416 $ 76.93 Granted 237 75.97 Vested ( 128 ) 74.82 Canceled/Forfeited ( 37 ) 77.24 Non-vested RSUs at May 30, 2020 (1) 488 $ 77.00 (1) Excludes approximately 66 shares of accrued incremental dividend equivalent rights on outstanding RSUs granted under the Company's 2015 Omnibus Incentive Plan. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
May 30, 2020 | |
Debt [Abstract] | |
Schedule Of Debt | May 30, August 31, 2020 2019 (Dollars in thousands) Revolving credit facility $ 588,000 $ - Uncommitted credit facilities 1,200 155,000 Private Placement Debt: 2.65 % Senior notes, series A, due July 28, 2023 75,000 75,000 2.90 % Senior notes, series B, due July 28, 2026 100,000 100,000 3.79 % Senior notes, due June 11, 2025 20,000 20,000 2.60 % Senior notes, due March 5, 2027 50,000 - 3.04 % Senior notes due January 12, 2023 (2) 50,000 50,000 3.22 % Series 2018A notes, due June 11, 2020 (2) 20,000 20,000 3.42 % Series 2018B notes, due June 11, 2021 (2) 20,000 20,000 2.40 % Series 2019A notes, due March 5, 2024 (2) 50,000 - Financing arrangements 437 82 Less: unamortized debt issuance costs ( 954 ) ( 1,169 ) Total debt, excluding obligations under finance leases $ 973,683 $ 438,913 Less: current portion (1) ( 309,229 ) ( 174,688 ) Total long-term debt, excluding obligations under finance leases $ 664,454 $ 264,225 __________________________ (1) Net of unamortized debt issuance costs expected to be amortized in the next twelve months. (2) Represents private placement debt issued under Shelf Facility Agreements, discussed in further detail below. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
May 30, 2020 | |
Leases [Abstract] | |
Components Of Lease Expense | Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2020 May 30, 2020 (Dollars in thousands) Operating lease cost $ 6,592 $ 18,952 Variable lease cost (benefit) ( 368 ) ( 459 ) Short-term lease cost 197 681 Finance lease cost: Amortization of leased assets 333 906 Interest on leased liabilities 29 84 Total Lease Cost $ 6,783 $ 20,164 |
Supplemental Balance Sheet Information | May 30, August 31, Classification 2020 2019 Assets (Dollars in thousands) Operating lease assets Operating lease assets $ 58,321 $ - Finance lease assets (1) Property, plant, and equipment, net 3,947 2,958 Total leased assets $ 62,268 $ 2,958 Liabilities Current Operating Current portion of operating lease liabilities $ 21,888 $ - Finance Current portion of debt including obligations under finance leases 1,253 765 Noncurrent Operating Noncurrent operating lease liabilities 36,163 - Finance Long-term debt including obligations under finance leases 2,780 2,206 Total lease liabilities $ 62,084 $ 2,971 (1) Finance lease assets are net of accumulated amortization of $ 1,126 and $ 1,398 as of May 30, 2020 and August 31, 2019. May 30, 2020 Weighted average remaining lease term (years) Operating Leases 3.9 Finance Leases 3.2 Weighted average discount rate Operating Leases 3.4 % Finance Leases 2.7 % |
Supplemental Cash Flow Information | Thirty-Nine Weeks Ended May 30, 2020 (Dollars in thousands) Operating Cash Outflows from Operating Leases $ 18,539 Operating Cash Outflows from Finance Leases 84 Financing Cash Outflows from Finance Leases 903 Leased assets obtained in exchange for new lease liabilities: Operating Leases $ 13,854 Finance Leases 1,973 |
Schedule Of Future Lease Payments | Fiscal Year (Dollars in thousands) Operating Leases Finance Leases Total 2020 (excluding six months) $ 6,311 $ 343 $ 6,654 2021 22,220 1,375 23,595 2022 13,889 1,344 15,233 2023 7,247 1,018 8,265 2024 5,182 152 5,334 Thereafter 7,593 3 7,596 Total Lease Payments 62,442 4,235 66,677 Less: Imputed Interest 4,391 202 4,593 Present Value of Lease Liabilities (1) $ 58,051 $ 4,033 $ 62,084 (1) Includes the current portion of $ 21,888 for operating leases and $ 1,253 for finance leases |
Schedule Of Future Lease Payments Under Prior Standard | August 31, 2019 Fiscal Year Operating Leases Capitalized Lease Obligations 2020 $ 22,463 $ 792 2021 18,022 812 2022 9,923 781 2023 5,184 604 2024 4,083 106 Thereafter 6,023 - Total minimum lease payments $ 65,698 $ 3,095 Less: interest 124 Present value of minimum lease payments $ 2,971 Less: current maturities 765 Present value of minimum lease payments less current maturities $ 2,206 |
Basis Of Presentation (Details)
Basis Of Presentation (Details) - USD ($) $ in Thousands | May 30, 2020 | Sep. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 58,321 | ||
Operating lease liabilities | [1] | $ 58,051 | |
Restatement Adjustment [Member] | Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 61,212 | ||
Operating lease liabilities | $ 60,730 | ||
[1] | Includes the current portion of $ 21,888 for operating leases and $ 1,253 for finance leases |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) | 9 Months Ended | 12 Months Ended |
May 30, 2020USD ($)segment | Aug. 31, 2019USD ($) | |
Accrued sales returns | $ 5,457,000 | $ 5,432,000 |
Accrued sales incentives | 18,338,000 | 14,770,000 |
Prepaid sales incentives | 3,889,000 | 2,788,000 |
Performance obligation | 0 | 0 |
Contract assets | 0 | 0 |
Contract liabilities | $ 0 | $ 0 |
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Maximum [Member] | ||
Payment term | 1 year |
Revenue (Schedule Of Disaggrega
Revenue (Schedule Of Disaggregation Of Revenue) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 834,972,000 | $ 866,546,000 | $ 2,444,667,000 | $ 2,521,147,000 | |
Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Net Sales [Member] | Geographic Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 834,972,000 | $ 866,546,000 | $ 2,444,667 | $ 2,521,147 | |
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Manufacturing Heavy [Member] | Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 40.00% | 47.00% | 45.00% | 48.00% | |
Manufacturing Light [Member] | Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 19.00% | 22.00% | 22.00% | 22.00% | |
Government [Member] | Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 15.00% | 7.00% | 10.00% | 8.00% | |
Retail/Wholesale [Member] | Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 7.00% | 6.00% | 6.00% | 6.00% | |
Commercial Services [Member] | Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 5.00% | 4.00% | 5.00% | 4.00% | |
Other Customers [Member] | Net Sales [Member] | Customer Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | [1] | 14.00% | 14.00% | 12.00% | 12.00% |
United States [Member] | Net Sales [Member] | Geographic Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 795,865,000 | $ 831,533,000 | $ 2,336,528 | $ 2,434,603 | |
Concentration risk, percentage | 96.00% | 96.00% | 96.00% | 97.00% | |
UK [Member] | Net Sales [Member] | Geographic Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 10,019,000 | $ 14,399,000 | $ 37,375 | $ 43,373 | |
Concentration risk, percentage | 1.00% | 2.00% | 1.00% | 2.00% | |
Canada [Member] | Net Sales [Member] | Geographic Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 9,783,000 | $ 10,747,000 | $ 31,041 | $ 30,363 | |
Concentration risk, percentage | 1.00% | 1.00% | 1.00% | 1.00% | |
Mexico [Member] | Net Sales [Member] | Geographic Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 19,305,000 | $ 9,867,000 | $ 39,723 | $ 12,808 | |
Concentration risk, percentage | 2.00% | 2.00% | |||
[1] | The other category primarily includes individual customer and small business net sales not assigned to a specific industry classification. |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | |
Net Income Per Share [Abstract] | ||||
Net income attributable to MSC Industrial as reported | $ 77,703 | $ 79,601 | $ 198,621 | $ 222,257 |
Less: Distributed net income available to participating securities | (10) | (10) | (34) | |
Less: Undistributed net income available to participating securities | (19) | (66) | ||
Undistributed and distributed net income available to common shareholders | 77,703 | 79,572 | 198,611 | 222,157 |
Add: Undistributed net income allocated to participating securities | 19 | 66 | ||
Less: Undistributed net income reallocated to participating securities | (19) | (66) | ||
Undistributed and distributed net income available to common shareholders | $ 77,703 | $ 79,572 | $ 198,611 | $ 222,157 |
Weighted average shares outstanding for basic net income per share | 55,563 | 55,158 | 55,435 | 55,266 |
Effect of dilutive securities | 36 | 229 | 146 | 290 |
Weighted average shares outstanding for diluted net income per share | 55,599 | 55,387 | 55,581 | 55,556 |
Basic | $ 1.40 | $ 1.44 | $ 3.58 | $ 4.02 |
Diluted | $ 1.40 | $ 1.44 | $ 3.57 | $ 4 |
Potentially dilutive securities | 1,933 | 1,093 | 1,417 | 939 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) | 9 Months Ended | |
May 30, 2020 | Jun. 01, 2019 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized share-based compensation cost | $ 4,627,000 | |
Unrecognized share-based compensation weighted average period | 1 year 8 months 12 days | |
Total intrinsic value of options exercised | $ 2,574,000 | $ 1,882,000 |
Performance Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized share-based compensation cost | $ 1,731,000 | |
Unrecognized share-based compensation weighted average period | 2 years 4 months 24 days | |
Vesting period | 3 years | |
Performance Share Units [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 0.00% | |
Performance Share Units [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 200.00% | |
Restricted Share Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized share-based compensation cost | $ 0 | |
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized share-based compensation cost | $ 29,685,000 | |
Unrecognized share-based compensation weighted average period | 2 years 10 months 24 days |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule Of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | $ 4,285 | $ 4,089 | $ 12,463 | $ 12,167 |
Deferred income tax benefit | (1,068) | (1,026) | (3,116) | (3,054) |
Stock-based compensation expense, net | 3,217 | 3,063 | 9,347 | 9,113 |
Stock Options [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 1,089 | 1,215 | 2,818 | 3,541 |
Restricted Share Awards [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 1 | 346 | 185 | 1,216 |
Restricted Stock Units [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 2,970 | 2,452 | 8,885 | 7,181 |
Performance Share Units [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 171 | 385 | ||
Associate Stock Purchase Plan [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | $ 54 | $ 76 | $ 190 | $ 229 |
Stock-Based Compensation (Sch_2
Stock-Based Compensation (Schedule Of Option Grant Fair Value Assumptions) (Details) | 9 Months Ended |
Jun. 01, 2019$ / shares | |
Stock-Based Compensation [Abstract] | |
Expected life (in years) | 4 years |
Risk-free interest rate | 2.98% |
Expected volatility | 23.13% |
Expected dividend yield | 2.70% |
Weighted-average grant-date fair value | $ 14.05 |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary Of Stock Option Activity) (Details) - Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
May 30, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning Balance, Options | shares | 1,894 |
Granted, Options | shares | |
Exercised, Options | shares | (212) |
Canceled/Forfeited, Options | shares | (114) |
Outstanding, Ending Balance, Options | shares | 1,568 |
Exercisable, Ending Balance, Options | shares | 1,042 |
Outstanding, Beginning Balance, Weighted-Average Exercise Price per Share | $ / shares | $ 74.73 |
Granted, Weighted-Average Exercise Price per Share | $ / shares | |
Exercised, Weighted-Average Exercise Price per Share | $ / shares | 63.81 |
Canceled/Forfeited, Weighted-Average Exercise Price per Share | $ / shares | 80.26 |
Outstanding, Ending Balance, Weighted-Average Exercise Price per Share | $ / shares | 75.80 |
Exercisable, Ending Balance, Weighted-Average Exercise Price per Share | $ / shares | $ 73.81 |
Outstanding, Ending Balance, Weighted-Average Remaining Contractual Term (in years) | 3 years 8 months 12 days |
Exercisable, Ending Balance, Weighted-Average Remaining Contractual Term (in years) | 3 years 2 months 12 days |
Aggregate Intrinsic Value of options outstanding | $ | $ 2,646 |
Aggregate Intrinsic Value of options exercisable | $ | $ 2,646 |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary Of Non-Vested Share Award Activity) (Details) shares in Thousands | 9 Months Ended | |
May 30, 2020$ / sharesshares | ||
Restricted Share Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested share awards, Beginning balance, Shares | 21 | |
Granted, Shares | ||
Vested, Shares | (19) | |
Canceled/Forfeited, Shares | (2) | |
Non-vested share awards, Ending balance, Shares | ||
Non-vested share awards, Beginning balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 82 | |
Granted, Weighted-Average Grant-Date Fair Value | $ / shares | ||
Vested, Weighted-Average Grant-Date Fair Value | $ / shares | 82.86 | |
Canceled/Forfeited, Weighted-Average Grant-Date Fair Value | $ / shares | 70.40 | |
Non-vested share awards, Ending balance, Weighted-Average Grant-Date Fair Value | $ / shares | ||
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested share awards, Beginning balance, Shares | 416 | |
Granted, Shares | 237 | |
Vested, Shares | (128) | |
Canceled/Forfeited, Shares | (37) | |
Non-vested share awards, Ending balance, Shares | 488 | [1] |
Non-vested share awards, Beginning balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 76.93 | |
Granted, Weighted-Average Grant-Date Fair Value | $ / shares | 75.97 | |
Vested, Weighted-Average Grant-Date Fair Value | $ / shares | 74.82 | |
Canceled/Forfeited, Weighted-Average Grant-Date Fair Value | $ / shares | 77.24 | |
Non-vested share awards, Ending balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 77 | [1] |
Incremental Dividend Rights, Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested share awards, Ending balance, Shares | 66 | |
Performance Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested share awards, Beginning balance, Shares | ||
Granted, Shares | 31 | |
Vested, Shares | ||
Canceled/Forfeited, Shares | (3) | |
Non-vested share awards, Ending balance, Shares | 28 | [2] |
Non-vested share awards, Beginning balance, Weighted-Average Grant-Date Fair Value | $ / shares | ||
Granted, Weighted-Average Grant-Date Fair Value | $ / shares | 76.32 | |
Vested, Weighted-Average Grant-Date Fair Value | $ / shares | ||
Canceled/Forfeited, Weighted-Average Grant-Date Fair Value | $ / shares | 76.32 | |
Non-vested share awards, Ending balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 76.32 | [2] |
Incremental Dividend Rights, Performance Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested share awards, Ending balance, Shares | 3 | |
[1] | Excludes approximately 66 shares of accrued incremental dividend equivalent rights on outstanding RSUs granted under the Company's 2015 Omnibus Incentive Plan. | |
[2] | Excludes 3 shares of accrued incremental dividend equivalent rights on outstanding PSUs granted under the Company's 2015 Omnibus Incentive Plan. |
Fair Value (Details)
Fair Value (Details) - USD ($) | 9 Months Ended | |
May 30, 2020 | Jun. 01, 2019 | |
Fair Value [Abstract] | ||
Fair value remeasurement of non-financial assets on non-recurring basis | $ 0 | $ 0 |
Fair value remeasurement of non-financial liabilities on non-recurring basis | $ 0 | $ 0 |
Debt (Revolving Credit Faciliti
Debt (Revolving Credit Facilities) (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Dec. 01, 2018USD ($)agreement | May 30, 2020USD ($)agreement | Jun. 01, 2019USD ($) | Aug. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||
Weighted average rate under Credit Facility | 1.36% | 3.01% | ||
Borrowings under the revolving credit facilities | $ 1,012,200,000 | $ 358,000,000 | ||
Repayments of debt | 578,000,000 | $ 336,000,000 | ||
Committed Bank Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 600,000,000 | |||
Maturity date | Apr. 14, 2022 | |||
Credit facility, expiration term | 5 years | |||
Outstanding balance | $ 588,000,000 | |||
Credit facility, noncurrent | 300,000,000 | |||
Credit facility, current | $ 288,000,000 | |||
Uncommitted Bank Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of credit facilities | agreement | 6 | 5 | ||
Credit facility, maximum borrowing capacity | $ 440,000,000 | $ 410,000,000 | ||
Outstanding balance | 1,200,000 | $ 155,000,000 | ||
Amended Uncommitted Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | 0 | |||
New Uncommitted Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | 5,000,000 | |||
Outstanding balance | $ 1,200,000 |
Debt (Shelf Facility Agreements
Debt (Shelf Facility Agreements) (Narrative) (Details) | 9 Months Ended |
May 30, 2020USD ($) | |
Line of Credit Facility [Line Items] | |
Maximum consolidated leverage ratio of total indebtedness to EBITDA | 3 |
Maximum consolidated leverage ratio of total indebtedness to EBITDA after material acquisition | 3.50 |
Minimum consolidated interest coverage ratio of EBITDA to total interest expense | 3 |
Met Life Note Purchase Agreement [Member] | |
Line of Credit Facility [Line Items] | |
Credit facility, maximum borrowing capacity | $ 250,000,000 |
Remaining borrowing capacity | 160,000,000 |
Prudential Note Purchase Agreement [Member] | |
Line of Credit Facility [Line Items] | |
Credit facility, maximum borrowing capacity | 250,000,000 |
Remaining borrowing capacity | $ 200,000,000 |
Debt (Financing Arrangements) (
Debt (Financing Arrangements) (Narrative) (Details) $ in Thousands | 9 Months Ended |
May 30, 2020USD ($) | |
Capital Leased Assets [Line Items] | |
Borrowings under financing obligations | $ 1,164 |
IT Equipment And Software [Member] | |
Capital Leased Assets [Line Items] | |
Property, plant and equipment, gross | 1,328 |
Accumulated amortization | $ 809 |
Debt (Schedule Of Debt) (Detail
Debt (Schedule Of Debt) (Details) - USD ($) | 9 Months Ended | ||
May 30, 2020 | Aug. 31, 2019 | ||
Debt Instrument [Line Items] | |||
Financing arrangements | $ 437,000 | $ 82,000 | |
Less: unamortized debt issuance costs | (954,000) | (1,169,000) | |
Total debt, excluding obligations under finance leases | 973,683,000 | 438,913,000 | |
Less: current portion | [1] | (309,229,000) | (174,688,000) |
Total long-term debt, excluding obligations under finance leases | 664,454,000 | 264,225,000 | |
Committed Bank Facility [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 588,000,000 | ||
Maturity date | Apr. 14, 2022 | ||
Uncommitted Bank Facilities [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 1,200,000 | 155,000,000 | |
Senior Notes Series A [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 75,000,000 | 75,000,000 | |
Interest rate | 2.65% | ||
Maturity date | Jul. 28, 2023 | ||
Senior Notes Series B [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 100,000,000 | 100,000,000 | |
Interest rate | 2.90% | ||
Maturity date | Jul. 28, 2026 | ||
Senior Notes Due June 11, 2025 [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 20,000,000 | 20,000,000 | |
Interest rate | 3.79% | ||
Maturity date | Jun. 11, 2025 | ||
Senior notes, due March 5, 2027 [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 50,000,000 | ||
Interest rate | 2.60% | ||
Maturity date | Mar. 5, 2027 | ||
Senior notes due January 12, 2023 [MEmber] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | [2] | $ 50,000,000 | 50,000,000 |
Interest rate | 3.04% | ||
Maturity date | Jan. 12, 2023 | ||
Series 2018A notes, due June 11, 2020 [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | [2] | $ 20,000,000 | 20,000,000 |
Interest rate | 3.22% | ||
Maturity date | Jun. 11, 2020 | ||
Series 2018B notes, due June 11, 2021 [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | [2] | $ 20,000,000 | $ 20,000,000 |
Interest rate | 3.42% | ||
Maturity date | Jun. 11, 2021 | ||
Series 2019A notes, due March 5, 2024 [Member] | Private Placement Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | [2] | $ 50,000,000 | |
Interest rate | 2.40% | ||
Maturity date | Mar. 5, 2024 | ||
[1] | Net of unamortized debt issuance costs expected to be amortized in the next twelve months. (2) Represents private placement debt issued under | ||
[2] | Represents private placement debt issued under Shelf Facility Agreements, discussed in further detail below. |
Leases (Components Of Lease Exp
Leases (Components Of Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
May 30, 2020 | May 30, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 6,592 | $ 18,952 |
Variable lease cost (benefit) | (368) | (459) |
Short-term lease cost | 197 | 681 |
Amortization of leased assets | 333 | 906 |
Interest on leased liabilities | 29 | 84 |
Total Lease Cost | $ 6,783 | $ 20,164 |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands | May 30, 2020 | Aug. 31, 2019 | ||
Leases [Abstract] | ||||
Operating lease assets | $ 58,321 | |||
Finance lease assets | [1] | 3,947 | $ 2,958 | |
Total leased assets | 62,268 | 2,958 | ||
Current operating lease liabilities | 21,888 | |||
Current finance lease liabilities | 1,253 | 765 | ||
Noncurrent operating lease liabilities | 36,163 | |||
Noncurrent finance lease liabilities | 2,780 | 2,206 | ||
Total lease liabilities | $ 62,084 | [2] | 2,971 | |
Weighted average remaining lease term (years), Operating leases | 3 years 10 months 24 days | |||
Weighted average remaining lease term (years), Finance leases | 3 years 2 months 12 days | |||
Weighted average discount rate, Operating leases | 3.40% | |||
Weighted average discount rate, Finance leases | 2.70% | |||
Finance lease right of use assets, Accumulated amortization | $ 1,126 | $ 1,398 | ||
[1] | Finance lease assets are net of accumulated amortization of $ 1,126 and $ 1,398 as of May 30, 2020 and August 31, 2019. | |||
[2] | Includes the current portion of $ 21,888 for operating leases and $ 1,253 for finance leases |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information) (Details) $ in Thousands | 9 Months Ended |
May 30, 2020USD ($) | |
Leases [Abstract] | |
Operating Cash Outflows from Operating Leases | $ 18,539 |
Operating Cash Outflows from Finance Leases | 84 |
Financing Cash Outflows from Finance Leases | 903 |
Leased assets obtained in exchange for new operating lease liabilities | 13,854 |
Leased assets obtained in exchange for new finance lease liabilities | $ 1,973 |
Leases (Schedule Of Future Leas
Leases (Schedule Of Future Lease Payments) (Details) - USD ($) $ in Thousands | May 30, 2020 | Aug. 31, 2019 | ||
Operating Leases | ||||
2020 (excluding six months) | $ 6,311 | |||
2021 | 22,220 | |||
2022 | 13,889 | |||
2023 | 7,247 | |||
2024 | 5,182 | |||
Thereafter | 7,593 | |||
Total Lease Payments | 62,442 | |||
Less: Imputed Interest | 4,391 | |||
Present Value of Lease Liabilities | [1] | 58,051 | ||
Finance Leases | ||||
2020 (excluding six months) | 343 | |||
2021 | 1,375 | |||
2022 | 1,344 | |||
2023 | 1,018 | |||
2024 | 152 | |||
Thereafter | 3 | |||
Total Lease Payments | 4,235 | |||
Less: Imputed Interest | 202 | |||
Present Value of Lease Liabilities | [1] | 4,033 | ||
Total | ||||
2020 (excluding six months) | 6,654 | |||
2021 | 23,595 | |||
2022 | 15,233 | |||
2023 | 8,265 | |||
2024 | 5,334 | |||
Thereafter | 7,596 | |||
Total Lease Payments | 66,677 | |||
Less: Imputed Interest | 4,593 | |||
Total lease liabilities | 62,084 | [1] | $ 2,971 | |
Current portion of operating lease liabilities | 21,888 | |||
Current finance lease liabilities | $ 1,253 | $ 765 | ||
[1] | Includes the current portion of $ 21,888 for operating leases and $ 1,253 for finance leases |
Leases (Schedule Of Future Le_2
Leases (Schedule Of Future Lease Payments Under Prior Standard) (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | $ 22,463 |
2021 | 18,022 |
2022 | 9,923 |
2023 | 5,184 |
2024 | 4,083 |
Thereafter | 6,023 |
Total minimum lease payments | 65,698 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | 792 |
2021 | 812 |
2022 | 781 |
2023 | 604 |
2024 | 106 |
Total minimum lease payments | 3,095 |
Less: interest | 124 |
Present value of minimum lease payments | 2,971 |
Less: current maturities | 765 |
Present value of minimum lease payments less current maturities | $ 2,206 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | May 30, 2020 | Jun. 01, 2019 | May 30, 2020 | Jun. 01, 2019 | |
Components Of Shareholders Equity [Line Items] | |||||
Treasury stock reissued to fund plan, shares | 20,000 | 14,000 | 55,000 | 47,000 | |
Subsequent Event [Member] | |||||
Components Of Shareholders Equity [Line Items] | |||||
Dividends payable per share | $ 0.75 | ||||
Dividend payable date | Jul. 28, 2020 | ||||
Dividends record date | Jul. 14, 2020 | ||||
Dividend payable amount | $ 41,685 | ||||
Class A Common Stock [Member] | |||||
Components Of Shareholders Equity [Line Items] | |||||
Common stock shares repurchased | 500 | 500 | 44,000 | 316,000 | |
Treasury stock repurchased, and treasury stock repurchased and retired, shares | 1,054,000 | ||||
Treasury stock repurchased, and treasury stock repurchased and retired, amount | $ 39 | $ 84,464 | |||
Number of shares authorized for repurchase | 1,157,000 | 1,157,000 | |||
Treasury Stock [Member] | Class A Common Stock [Member] | |||||
Components Of Shareholders Equity [Line Items] | |||||
Purchase of treasury stock | $ 28 | $ 39 | $ 3,236 | $ 24,137 |
Restructuring and Other Relat_2
Restructuring and Other Related Costs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
May 30, 2020USD ($) | May 30, 2020USD ($)employee | Aug. 31, 2019USD ($) | |
Restructuring and Other Related Costs [Abstract] | |||
Consulting fees associated with optimization | $ 1,333 | $ 3,465 | |
Number of associates with accrued severance benefits | employee | 125 | ||
Severance and separation benefit charges | $ 2,403 | ||
Stock compensation expense, accelerated vesting | 87 | ||
Cash payments | 8,104 | ||
Severance and separation benefit balance | $ 256 | $ 256 | $ 6,044 |
Product Warranties (Details)
Product Warranties (Details) | 9 Months Ended |
May 30, 2020 | |
Minimum [Member] | |
Product warranties with original equipment manufacturers | 30 days |
Maximum [Member] | |
Warranty period | 1 year |
Product warranties with original equipment manufacturers | 90 days |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended |
May 30, 2020USD ($) | |
Income Taxes [Abstract] | |
Changes in unrecognized tax benefits |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | 1 Months Ended |
Jun. 30, 2020USD ($) | |
Met Life Note Purchase Agreement [Member] | Series 2018A notes, due June 11, 2020 [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Repayment of debt | $ 20,000 |