Accounts Receivable

6 Months Ended

Mar. 02, 2024

Accounts receivables at March 2, 2024 and September 2, 2023 consisted of the following:


	March 2, 2024		September 2, 2023
Accounts receivable	$	448,959	$	458,168
Less: allowance for credit losses	20,260		22,747
Accounts receivable, net	$	428,699	$	435,421

In the second quarter of fiscal year 2023, the Company entered into a Receivables Purchase Agreement (the “RPA”), by and among MSC A/R Holding Co., LLC, a wholly owned subsidiary of the Company (the “Receivables Subsidiary”), as seller, the Company, as master servicer, certain purchasers from time to time party thereto (collectively, the “Purchasers”), and Wells Fargo Bank, National Association, as administrative agent. Under the RPA, the Receivables Subsidiary may sell receivables to the Purchasers in amounts up to $300,000. During the second quarter of fiscal year 2023, the amount sold to the Purchasers was $300,000 which was derecognized from the Condensed Consolidated Balance Sheet as of that date. The RPA matures on December 19, 2025 and is subject to customary termination events related to transactions of this type.

The Company continues to be involved with the receivables sold to the Purchasers by providing collection services. As cash is collected on sold receivables, the Receivables Subsidiary continuously sells new qualifying receivables to the Purchasers so that the total principal amount outstanding of receivables sold is approximately $300,000. The total principal amount outstanding of receivables sold was approximately $300,000 as of March 2, 2024 and September 2, 2023. The amount of receivables pledged as collateral as of March 2, 2024 and September 2, 2023 was $348,848 and $352,385, respectively.

The following table summarizes the activity and amounts outstanding under the RPA for the thirteen- and twenty-six-week periods ended March 2, 2024 and March 4, 2023:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	March 2, 2024		March 4, 2023		March 2, 2024		March 4, 2023
Receivables sold under the RPA	$	316,877	$	543,124	$	629,857	$	543,124
Cash collected on sold receivables under the RPA	$	316,877	$	243,121	$	629,857	$	243,121

The receivables sold incurred fees due to the Purchasers of $4,616 and $9,227 during the thirteen- and twenty-six-week periods ended March 2, 2024, respectively, and $3,323 during both the thirteen- and twenty-six-week periods ended March 4, 2023, which were recorded within Other expense, net in the unaudited Condensed Consolidated Statements of Income. The financial covenants under the RPA are substantially the same as those under the Credit Facilities, the Private Placement Debt and the Shelf Facility Agreements (each, as defined below). See Note 8, “Debt” for more information about these financial covenants.