Shareholders' Equity

6 Months Ended

Mar. 02, 2024

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Stock Repurchases and Treasury Stock

In June 2021, the Board of Directors of the Company (the “Board”) terminated the existing share repurchase plan and authorized a new share repurchase plan (the “Share Repurchase Plan”) to purchase up to 5,000 shares of Class A Common Stock. There is no expiration date for the Share Repurchase Plan. As of March 2, 2024, the maximum number of shares of Class A Common Stock that were available for repurchase under the Share Repurchase Plan was 2,278 shares. The Share Repurchase Plan 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 2, 2024, the Company repurchased 175 shares and 1,542 shares, respectively, of Class A Common Stock for $16,632 and $148,677, respectively. From these totals, 9 shares and 96 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 2, 2024 and the remainder were immediately retired. 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, 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 and the remainder were immediately retired.

The Company reissued 14 shares and 27 shares of treasury stock during the thirteen- and twenty-six-week periods ended March 2, 2024, respectively, and reissued 17 shares and 31 shares of treasury stock during the thirteen- and twenty-six-week periods ended March 4, 2023, 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 $1.66 per share totaling $93,964 for the twenty-six-week period ended March 2, 2024. For the twenty-six-week period ended March 4, 2023, the Company paid aggregate regular cash dividends of $1.58 per share totaling $88,313.

On March 26, 2024, the Board declared a regular cash dividend of $0.83 per share, payable on April 23, 2024, to shareholders of record at the close of business on April 9, 2024. The dividend is expected to result in aggregate payments of $46,730, based on the number of shares outstanding at March 15, 2024.

Reclassification

In the first quarter of fiscal year 2024, the Company completed its previously announced reclassification (the “Reclassification”) of the Common Stock to eliminate the Class B Common Stock, effective at the time that the Company’s Restated Certificate of Incorporation was duly filed with the Secretary of State of the State of New York (the “Effective Time”), as contemplated by that certain Reclassification Agreement, dated as of June 20, 2023 (the “Reclassification Agreement”), with Mitchell Jacobson, Erik Gershwind, other members of the Jacobson / Gershwind family and certain entities affiliated with the Jacobson / Gershwind family (collectively, the “Jacobson / Gershwind Family Shareholders”). Pursuant to the Reclassification, each share of Class B Common Stock issued and outstanding immediately prior to the Effective Time was reclassified, exchanged and converted into 1.225 shares of Class A Common Stock. The issuance of Class A Common Stock in connection with the Reclassification was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s Registration Statement on Form S‐4 (File No. 333-273418).

As contemplated by the Reclassification Agreement, a number of corporate governance changes were implemented, including the following:

•the Jacobson / Gershwind Family Shareholders have the right to designate (i) two individuals (one of whom will be Mr. Erik Gershwind so long as he is the Company’s Chief Executive Officer) for nomination for election to the Board so long as the Jacobson / Gershwind Family Shareholders own 10% or more of the issued and outstanding shares of Class A Common Stock and (ii) one individual for nomination for election to the Board so long as the Jacobson / Gershwind Family Shareholders own less than 10% but more than 5% of the issued and outstanding shares of Class A Common Stock;

•the Jacobson / Gershwind Family Shareholders have each granted an irrevocable proxy authorizing the Company to vote such pro rata portion of shares of Class A Common Stock beneficially owned by the Jacobson / Gershwind Family Shareholders or their permitted transferees in excess of 15% of the issued and outstanding shares of Class A Common Stock in proportion to the votes of other holders (i.e., excluding any Jacobson / Gershwind Family Shareholders and their permitted transferees) entitled to vote and that do in fact vote;

•certain standstill and lock-up provisions for the Jacobson / Gershwind Family Shareholders;

•the transition of the approval standard for certain significant transactions (including mergers, asset sales, share exchanges and dissolution) from a two-thirds supermajority to a majority of the issued and outstanding shares of Class A Common Stock entitled to vote thereon;

•the adoption of a “majority of the votes cast” standard for uncontested director elections; and

•the designation of (i) the New York Supreme Court as the exclusive forum for (a) certain derivative claims, (b) claims asserting breach of fiduciary duties, (c) claims pursuant to the New York Business Corporation Law, the Company’s Restated Certificate of Incorporation or the Company’s Third Amended and Restated By-Laws or (d) claims governed by the internal affairs doctrine and (ii) the U.S. federal district courts as the exclusive forum for claims under the Securities Act.