Shareholders' Equity

6 Months Ended

Mar. 04, 2023

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Stock Repurchases and Treasury Stock

On June 29, 2021, the Board of Directors of the Company (the “Board”) terminated the MSC Stock Repurchase Plan, which was established during fiscal year 1999, and authorized a new share repurchase program (the “Share Repurchase Program”) to purchase up to 5,000 shares of Class A Common Stock. There is no expiration date for the Share Repurchase Program. As of March 4, 2023, the maximum number of shares of Class A Common Stock that may yet be repurchased under the Share Repurchase Program was 4,369 shares. The Share Repurchase Program allows the Company to repurchase shares at any time and in any increments it deems appropriate in accordance with Rule 10b-18 under the Exchange Act.

During the thirteen- and twenty-six-week periods ended March 4, 2023, the Company repurchased 152 shares and 385 shares, respectively, of Class A Common Stock for $12,468 and $31,007, respectively. From these totals, 150 shares and 331 shares, respectively, were immediately retired and 2 shares and 54 shares, respectively, were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen- and twenty-six-week periods ended March 4, 2023. During the thirteen- and twenty-six-week periods ended February 26, 2022, the Company repurchased 4 shares and 57 shares, respectively, of Class A Common Stock for $254 and $4,813, respectively. All of these shares were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen- and twenty-six-week periods ended February 26, 2022.

The Company reissued 17 shares and 31 shares of treasury stock during the thirteen- and twenty-six-week periods ended March 4, 2023, respectively, and reissued 16 shares and 30 shares of treasury stock during the thirteen- and twenty-six-week periods ended February 26, 2022, respectively, to fund the MSC Industrial Direct Co., Inc. Amended and Restated Associate Stock Purchase Plan.

Dividends on Common Stock

The Company paid aggregate regular cash dividends of $1.58 per share totaling $88,313 for the twenty-six weeks ended March 4, 2023. For the twenty-six weeks ended February 26, 2022, the Company paid aggregate regular cash dividends of $1.50 per share totaling $83,586.

On March 22, 2023, the Board declared a regular cash dividend of $0.79 per share, payable on April 25, 2023, to shareholders of record at the close of business on April 11, 2023. The dividend is expected to result in aggregate payments of $44,170, based on the number of shares outstanding at March 15, 2023.

Reclassification Proposal

On January 31, 2023, the Board received a proposal (the “Proposal”) from the Company’s controlling shareholders, the Jacobson/Gershwind family, to exchange each of their shares of Class B Common Stock for 1.35 shares of Class A Common Stock, reclassify the Class B Common Stock and the Class A Common Stock into a single class of common stock and eliminate the current dual-class share structure. The Board has formed a Special Committee composed entirely of independent directors to evaluate the Proposal, which will be advised by independent financial and legal advisors. Under the terms of the Proposal, any definitive agreement would first require approval by the Special Committee

and the Board, as well as the holders of a majority of the shares of Class A Common Stock that do not also hold shares of Class B Common Stock. At present there is no guarantee that a definitive agreement between the Company and the Jacobson/Gershwind family will be reached or what the terms of any such definitive agreement would be. In addition, even if an agreement is approved by the Special Committee and the Board, a transaction still may not be completed if such transaction is not approved by the holders of a majority of the shares of Class A Common Stock that do not also hold shares of Class B Common Stock. If an agreement is reached, and ultimately approved by the Special Committee and the Board, as well as the holders of a majority of the shares of Class A Common Stock that do not also hold shares of Class B Common Stock, it could have a material effect on our business, financial condition and results of operation as well as the governance of the Company.