MSC INDUSTRIAL DIRECT CO INCMSM

MSC INDUSTRIAL DIRECT CO INC Segments Disclosure

10-KFiled Oct 23, 20252 min read
SEGMENT REPORTING
The Company operates in one operating and reportable segment which aligns with the Company’s go to market strategy as a leading North American distributor of a broad range of industrial products and services. The Company serves a large number of customers in diverse industries through the sale of products and services in categories such as metalworking, MRO, Class C Consumables and OEM. Substantially all of the Company's revenues and long-lived assets are from or in the United States. In accordance with FASB ASU 2023-07, operating segments are sections of the business with separate financial information that is regularly reviewed by the chief operating decision maker ("CODM") in assessing
company performance and allocation of resources. The Company's CODM duties are shared by our Chief Executive Officer and President & Chief Operating Officer. The CODM regularly reviews consolidated operating margin and net income to assess Company performance, drive growth, and allocate resources to strategic priorities. The CODM reviews total assets at the consolidated level to make significant capital expenditure decisions for the Company.
The following table presents selected financial information regarding the Company's single reportable segment for fiscal years 2025, 2024, and 2023:

For the Fiscal Years Ended
August 30, 2025August 31, 2024September 2,
2023
Net sales$3,769,521$3,820,951$4,009,282
  Cost of goods sold2,233,3862,248,1682,366,317
  Payroll and payroll-related costs697,672655,311646,193
  Freight expense150,501148,523156,844
  Depreciation and amortization88,38880,52274,731
  Restructuring and other costs10,99914,5267,937
  Other segment items (1)
287,012283,514273,527
Income from operations301,563390,387483,733
Operating Margin8.0%10.2%12.1%
Other Income (Expense)
  Interest expense(24,063)(25,770)(22,543)
  Interest income1,1304121,034
  Other expense, net (2)
(15,052)(22,280)(6,068)
Income before provision for income taxes263,578342,749456,156
Provision for income taxes65,74286,792113,049
Net income$197,836$255,957$343,107
(1) Other Segment Items consists primarily of professional fees, software and hardware costs, auto expenses, advertising expenses, stock-based compensation and other selling, general, and administrative expenses
(2) Other expense, net is primarily composed of fees related to the Company's securitization agreement.

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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