Revenue

9 Months Ended

May 29, 2021

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 obligations. Substantially all of the Company’s contracts have a single performance obligation, to deliver products, and are short-term in nature. The Company estimates product returns based on historical return rates. Total accrued sales returns were $5,452 and $5,315 as of May 29, 2021 and August 29, 2020, respectively, and are reported as Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets. Sales taxes and value-added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.

Consideration Payable to Customers

The Company offers customers sales incentives, which primarily consist of volume rebates, and upfront sign-on payments. These volume rebates and sign-on payments are not in exchange for a distinct good or service and result in a reduction of net sales from the goods transferred to the customer at the later of when the related revenue is recognized or when the Company promises to pay the consideration. The Company estimates its volume rebate accruals and records its sign-on payments based on various factors, including contract terms, historical experience, and performance levels. Total accrued sales incentives, primarily related to volume rebates, were $18,506 and $19,679 as of May 29, 2021 and August 29, 2020, respectively, and are included in Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets. Sign-on payments, not yet recognized as a reduction of revenue, are recorded in Prepaid expenses and other current assets in the unaudited Condensed Consolidated Balance Sheets and were $3,042 and $3,762 as of May 29, 2021 and August 29, 2020, respectively.

Contract Assets and Liabilities

The Company records a contract asset when it has a right to payment from a customer that is conditioned on events other than the passage of time. The Company records a contract liability when customers prepay but the Company has not yet satisfied its performance obligations. The Company did not have material unsatisfied performance obligations or contract assets or liabilities as of May 29, 2021 and August 29, 2020.

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 present the Company’s percentage of net sales by customer end-market for the thirteen- and thirty-nine-week periods ended May 29, 2021 and May 30, 2020:

	Thirteen Weeks Ended		Thirteen Weeks Ended
	May 29, 2021		May 30, 2020
Manufacturing Heavy	48	%	40	%
Manufacturing Light	21	%	19	%
Government	9	%	15	%
Retail/Wholesale	7	%	7	%
Commercial Services	4	%	5	%
Other (1)	11	%	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 29, 2021		May 30, 2020
Manufacturing Heavy	47	%	45	%
Manufacturing Light	20	%	22	%
Government	10	%	10	%
Retail/Wholesale	7	%	6	%
Commercial Services	4	%	5	%
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 29, 2021 and May 30, 2020:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	May 29, 2021				May 30, 2020
United States	$	813,049	94	%	$	795,865	96	%
Mexico		26,051	3	%		19,305	2	%
UK		14,688	2	%		10,019	1	%
Canada		12,506	1	%		9,783	1	%
Total net sales	$	866,294	100	%	$	834,972	100	%

	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
	May 29, 2021				May 30, 2020
United States	$	2,268,153	94	%	$	2,336,528	96	%
Mexico		68,219	3	%		39,723	2	%
UK		40,575	2	%		37,375	1	%
Canada		35,246	1	%		31,041	1	%
Total net sales	$	2,412,193	100	%	$	2,444,667	100	%