8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 29, 2005

MSC Industrial Direct Co., Inc.

(Exact name of registrant as specified in its charter)

New York	1-14130	11-3289165
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
75 Maxess Road, Melville, New York		11747
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code    (516) 812-2000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On June 30, 2005, the Registrant issued a press release announcing financial results for the third fiscal quarter ended May 28, 2005.  The entire text of the press release is attached as Exhibit 99.1 and is incorporated by reference herein.

ITEM 8.01.  OTHER EVENTS

On June 30, 2005, the Registrant also announced the declaration of a special cash dividend on the Class A common stock of the Registrant and that the Registrant’s Board of Directors had authorized the Registrant to repurchase up to an additional 5,000,000 publicly traded shares of Class A common stock under the Registrant’s stock repurchase program.  The entire text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

The Registrant has made available on its website, www.mscdirect.com, certain historical financial and statistical information.  The entire text of such information is attached as Exhibit 99.2 and is incorporated by reference herein.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

Exhibits: 99.1 MSC Industrial Direct Co., Inc. Press Release, dated June 30, 2005.

Exhibits: 99.2 Certain historical financial and statistical information of the Registrant available on its website, www.mscdirect.com.

2

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MSC Industrial Direct Co., Inc.
Date: June 30, 2005	By:	/s/ Shelley M. Boxer
	Name: Shelley M. Boxer
	Title: Vice President, Finance

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EX-99.1

Exhibit 99.1

Contact:

Shelley Boxer, V.P. Finance

MSC Industrial Direct Co., Inc.

(516) 812-1216

Investor Relations: Eric Boyriven/Jim Olecki

Press: Scot Hoffman

Financial Dynamics

(212) 850-5600

FOR IMMEDIATE RELEASE

MSC INDUSTRIAL DIRECT CO., INC. REPORTS

FISCAL 2005 THIRD QUARTER RESULTS

- - Earnings per diluted share increase 29.4%, operating margin reaches 17.0% of sales - -

- - Company repurchases 2.99 million shares - -

- - Board of Directors approves special dividend of $1.50 per share and

new share repurchase program - -

Melville, NY, June 30, 2005 - MSC INDUSTRIAL DIRECT CO., INC. (NYSE: MSM), “MSC,” one of the premier distributors of MRO supplies to industrial customers throughout the United States, today reported financial results for its fiscal 2005 third quarter ended May 28, 2005.

For the third quarter of fiscal 2005, net sales were $288.5 million, an increase of 13.0% over net sales of $255.3 million in the third quarter of fiscal 2004.  Net income increased 28.5% to $30.7 million in the third quarter of fiscal 2005, compared to net income of $23.9 million in the year-ago period.  Earnings per diluted share for the fiscal 2005 third quarter were $0.44, compared to $0.34 in the third quarter of fiscal 2004, an increase of 29.4%.

For the first nine months of fiscal 2005, the Company’s net sales rose 16.2% to $823.2 million, compared to net sales of $708.6 million a year ago.  Net income in the fiscal 2005 nine-month period was $84.1 million, or $1.19 per diluted share, compared to $58.9 million, or $0.85 per diluted share, in the year ago period.  This represents an increase to net income and net income per diluted share of 42.8% and 40.0%, respectively.

Mitchell Jacobson, Chairman and Chief Executive Officer stated “Market conditions remained solid for MSC during the fiscal third quarter, as we continued to see good order flows from our customer base.  Growth during the quarter was balanced throughout our geographic regions, and was seen in both the manufacturing and non-manufacturing sectors of our business.  We were able to capitalize on this growth, generating strong financial results with revenues increasing 13% and operating margins expanding to 17% for the fiscal third quarter.  We are very pleased with these results, which speak to our continued outstanding operational execution.”

Additionally, the Company also announced today that its Board of Directors has approved the payment of a special, one-time dividend of $1.50 per share.  The special dividend will be payable on August 15, 2005

- MORE -

to shareholders of record on August 8, 2005.  The total cost of the dividend will be approximately $100 million.  As of May 28, 2005, the Company had total cash, cash equivalents and available-for-sale securities of approximately $183 million.

The Company’s Board of Directors has also authorized the repurchase of up to an additional 5 million shares of the Company’s Class A Common Stock.  This new program replaces the Company’s prior share repurchase program, which had been completed through the Company’s current purchases. Purchases under the new share repurchase program will be made in the open market or through privately-negotiated transactions, subject to market conditions and trading restrictions.  The Company has repurchased an additional 2.99 million shares of Class A Common Stock for a total consideration of approximately $90 million since April 5, 2005 under the prior program.  The Company repurchased a total of 5 million shares of Class A Common Stock under the prior program.

“One of the defining characteristics of MSC’s financial performance has always been strong cash flow generation,” said Chuck Boehlke, Chief Financial Officer.  “During the first nine months of fiscal 2005, MSC has generated free cash flow (See Note 1) of $80 million, and we expect to end fiscal 2005 with an invested cash balance of approximately $60 to $70 million, net of all dividend payments.  Over the past few years, we have made the investments in infrastructure and systems necessary to support much of our growth going forward.  Today, the consistent strength of our cash flows allows us to take actions that benefit our shareholders, while also providing ample liquidity with which to fund our future growth strategy.”

Mr. Jacobson concluded, “As we enter the fiscal fourth quarter, MSC will continue to execute on our strategy, take market share and grow.  Rising costs, particularly energy-related costs, remain a concern for our customers.  In this environment, we believe our ability to simplify our customers’ sourcing needs and reduce their operating costs makes MSC’s value proposition even more compelling.  Given current market conditions, we expect revenues for the fiscal 2005 fourth quarter of between $274 million and $279 million, and diluted earnings per share of between $0.39 and $0.41.”

The management of MSC will host a conference call today at 11:00 a.m. Eastern Time to review the third quarter of fiscal 2005 results and to comment on current operations.  The call may be accessed via the Internet at: http://www.mscdirect.com.

Note 1 - Free cash flow is defined as net cash provided by operating activities less expenditures for property, plant and equipment.  Net cash flow provided by operating activities during the first nine months of fiscal 2005 was $88 million.  Expenditures for property, plant and equipment were $8 million, for the first nine months of fiscal 2005.  Management considers free cash flow to be an important indicator of the Company’s financial strength and the ability to generate liquidity because it reflects cash generated from operations that can be used for strategic initiatives, dividends, and repurchases of the Company’s stock

MSC Industrial Direct (NYSE: MSM) is one of the premier distributors of MRO supplies to industrial customers throughout the United States.  MSC distributes more than 500,000 industrial products from more than 2,500 suppliers to approximately 340,000 customers.  In-stock availability is approximately 99% and standard ground delivery is next day to 80% of the industrial United States.  MSC reaches its customers through a combination of more than 28 million direct-mail catalogs, approximately 90 branch sales offices, more than 475 sales people, the Internet and associations with some of the world’s most prominent B2B e-commerce portals.

CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  Statements in this Press Release may constitute “forward-looking statements” within the meaning of

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Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended.  Any statements contained herein which are not statements of historical facts and that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future shall be deemed to be forward-looking statements.  Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated.  Future events, actual results and performance, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Company undertakes no obligation to release publicly any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.  The inclusion of any statement in this release does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material.  Factors that could cause actual results to differ materially from those in forward-looking statements include, without limitation, changing customer and product mixes, changing market conditions, industry consolidations, competition, general economic conditions in the markets in which the Company operates, rising commodity and energy prices, risk of cancellation or rescheduling of orders, work stoppages at transportation centers or shipping ports, the risk of war, terrorism and similar hostilities, dependence on the Company’s information systems and on key personnel, and various other risk factors listed from time to time in the Company’s SEC reports.

(Tables Follow)

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MSC INDUSTRIAL DIRECT CO., INC.

Condensed Consolidated Balance Sheet

(In thousands)

	May 28, 2005			August 28, 2004
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	36,379		$	39,517
Available-for-sale securities	7,268			6,000
Accounts receivable, net of allowance for doubtful accounts	127,482			114,077
Inventories	238,159			225,427
Prepaid expenses and other current assets	16,785			16,368
Deferred income taxes	10,123			10,000
Total current assets	436,196			411,389
Available-for-sale securities	139,787			137,797
Property, Plant and Equipment, net	102,038			103,284
Goodwill	63,202			63,202
Other assets	6,989			13,715
Total Assets	$	748,212		$	729,387
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	40,249		$	36,233
Accrued liabilities	59,883			48,638
Current portion of long-term notes payable	150			142
Total current liabilities	100,282			85,013
Long-term notes payable	868			997
Deferred income tax liabilities	27,989			25,171
Total liabilities	129,139			111,181
Shareholders’ Equity:
Preferred Stock
Class A common stock	54			52
Class B common stock	21			21
Additional paid-in capital	340,910			314,710
Retained earnings	455,700			393,341
Accumulated other comprehensive loss	(98		)	(12		)
Class A treasury stock, at cost	(171,714		)	(88,580		)
Deferred stock compensation	(5,800		)	(1,326		)
Total shareholders’ equity	619,073			618,206
Total Liabilities and Shareholders’ Equity	$	748,212		$	729,387

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MSC INDUSTRIAL DIRECT CO., INC.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	May 28, 2005		May 29, 2004		May 28, 2005		May 29, 2004
Net sales	$	288,465	$	255,297	$	823,158	$	708,595
Cost of goods sold	155,460		140,417		446,490		389,176
Gross profit	133,005		114,880		376,668		319,419
Operating expenses	84,047		76,993		241,914		224,639
Income from operations	48,958		37,887		134,754		94,780
Other Income:
Interest income, net	1,291		684		3,029		1,444
Other income, net	59		91		76		319
Total other income	1,350		775		3,105		1,763
Income before provision for income taxes	50,308		38,662		137,859		96,543
Provision for income taxes	19,620		14,789		53,765		37,652
Net income	$	30,688	$	23,873	$	84,094	$	58,891
Per Share Information:
Net income per common share:
Basic	$	0.45	$	0.35	$	1.23	$	0.88
Diluted	$	0.44	$	0.34	$	1.19	$	0.85
Weighted average shares used in computing net income per common share
Basic	68,341		67,474		68,573		66,801
Diluted	70,112		70,082		70,603		69,337
Cash dividends declared per common share	$	0.12	$	0.08	$	0.32	$	0.21

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MSC INDUSTRIAL DIRECT CO., INC.

Consolidated Statements of Cash Flows

(In thousands)

	Thirty-Nine Weeks Ended
	May 28, 2005			May 29, 2004
Cash Flows from Operating Activities:
Net income	$	84,094		$	58,891
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	9,117			9,457
Loss on disposal of property, plant and equipment	189			—
Amortization of deferred stock compensation	538			86
Provision for doubtful accounts	1,673			1,748
Deferred income taxes	2,695			(2,009		)
Stock option income tax benefit	6,759			4,148
Amortization of bond premium	381			148
Changes in operating assets and liabilities:
Accounts receivable	(15,078		)	(20,959		)
Inventories	(12,732		)	(18,974		)
Prepaid expenses and other current assets	(417		)	(3,077		)
Other assets	6,726			6,761
Accounts payable and accrued liabilities	4,314			9,125
Total adjustments	4,165			(13,546		)
Net cash provided by operating activities	88,259			45,345
Cash Flows from Investing Activities:
Proceeds from sales of investments in available-for-sale securities	79,555			31,664
Purchases of investments in available-for-sale securities	(83,280		)	(151,524		)
Expenditures for property, plant and equipment	(8,060		)	(6,772		)
Net cash used in investing activities	(11,785		)	(126,632		)
Cash Flows from Financing Activities:
Payment of cash dividend	(22,076		)	(14,069		)
Purchase of treasury stock	(73,187		)	(6,754		)
Proceeds from sale of Class A common stock in connection with associate stock purchase plan	1,341			1,015
Proceeds from exercise of Class A common stock options	14,431			24,755
Repayments of notes payable	(121		)	(129		)
Net cash (used in) provided by financing activities	(79,612		)	4,818
Net decrease in cash and cash equivalents	(3,138		)	(76,469		)
Cash and cash equivalents – beginning of period	39,517			114,294
Cash and cash equivalents – end of period	$	36,379		$	37,825
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes	$	39,980		$	31,900

#   #   #

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EX-99.2

Exhibit 99.2

MSC Industrial Direct Co., Inc.

Operational Statistics - updated quarterly on earnings release date

The following represents historical unaudited financial and statistical information regarding MSC’s operations.  MSC does not undertake any obligation to update any of the information presented below to reflect future events or circumstances.  This information should not be relied on as necessarily indicative of future trends or results.

Quarterly Sales
(in millions)

	FY 05		FY 04		FY 03
Q1	$	263.3	$	222.8	$	210.7
Q2	271.4		230.5		209.6
Q3	288.5		255.3		215.6
Q4			246.7		208.8

Sales Growth by
Month

May ‘05	Apr ‘05		Mar ‘05		Feb ‘05		Jan ‘05		Dec ‘04		Nov ‘04		Oct ‘04		Sep ‘04		Aug ‘04		Jul ‘04*		Jun ‘04
12.2%	16.6	%	10.8	%	14.7	%	14.3	%	24.5	%	18.0	%	19.6	%	17.2	%	21.9	%	20.3	%	18.4	%

*Adjusted for extra day in FY’03

Sales Growth by
Regions

	Fiscal 2005							Fiscal 2004
	Q1		Q2		Q3		Q4	Q1		Q2		Q3 *		Q4**
Midwest	17.5	%	18.4	%	14.6	%		8.9	%	11.5	%	18.8	%	20.4	%
Northeast	17.2	%	15.8	%	11.7	%		3.0	%	11.2	%	14.9	%	19.1	%
Southeast	21.5	%	20.3	%	14.0	%		9.8	%	12.7	%	21.2	%	22.7	%
West	19.0	%	18.6	%	15.3	%		7.7	%	10.6	%	18.1	%	22.9	%

*Adjusted for extra day in FY’04

**Adjusted for extra day in FY’03

Sales Growth by
Customer Type

	Fiscal 2005							Fiscal 2004
	Q1		Q2		Q3		Q4	Q1		Q2		Q3 *		Q4**
Manufacturing	18.2	%	16.4	%	12.1	%		2.6	%	9.1	%	17.1	%	21.4	%
Non-Manufacturing	17.4	%	19.4	%	15.2	%		15.4	%	12.4	%	14.8	%	16.2	%

*Adjusted for extra day in FY’04

**Adjusted for extra day in FY’03

Sales by Customer
Type

	Fiscal 2005							Fiscal 2004
	Q1		Q2		Q3		Q4	Q1		Q2		Q3 *		Q4**
Manufacturing	72	%	72	%	73	%		72	%	73	%	73	%	73	%
Non-Manufacturing	28	%	28	%	27	%		28	%	27	%	27	%	27	%

*Adjusted for extra day in FY’04

**Adjusted for extra day in FY’03

Gross Margin
Percentage

	FY 05		FY 04		FY 03
Q1	45.1	%	45.0	%	44.9	%
Q2	46.0	%	45.2	%	45.3	%
Q3	46.1	%	45.0	%	44.9	%
Q4			45.0	%	44.7	%

Operating Income
(in millions)

	FY 05		FY 04		FY 03
Q1	$	41.9	$	26.9	$	20.4
Q2	43.9		30.0		20.0
Q3	49.0		37.9		20.9
Q4			35.9		21.6

Operating Income
Percentage *

	FY 05		FY 04		FY 03
Q1	15.9	%	12.1	%	9.7	%
Q2	16.2	%	13.0	%	9.5	%
Q3	17.0	%	14.8	%	9.7	%
Q4			14.6	%	10.3	%

*Expressed as a % of sales

MSCDirect.com Sales (in millions)							MSCDirect.com Annual Run Rate *
	FY 05		FY 04		FY 03				FY 05		FY 04		FY 03
Q1	$	38.9	$	27.6	$	20.3		Q1	$	158.7	$	112.6	$	82.8
Q2	45.2		30.6		21.4			Q2	181.5		122.9		85.9
Q3	50.3		35.5		23.7			Q3	195.8		138.2		93.7
Q4			36.0		24.7			Q4			144.6		97.6

* Equals the average daily sales for the quarter multiplied by 253 (the number of business days in the fiscal year)

Active Customer
Count (in 000’s) *

	FY 05	FY 04	FY 03
Q1	343	345	334
Q2	341	346	338
Q3	343	346	340
Q4		344	343

*An active customer is one who has made a purchase in the last 12 months

Average
Transaction Size

	FY 05		FY 04		FY 03
Q1	$	252	$	229	$	223
Q2	251		233		223
Q3	253		236		221
Q4			244		225

Number of Field
Sales Associates

	FY 05	FY 04	FY 03
Q1	475	412	453
Q2	485	434	450
Q3	498	457	440
Q4		453	428

Direct Mail Pieces
(in millions)

	FY 05	FY 04	FY 03
Q1	7.7	7.7	9.0
Q2	7.1	7.1	8.7
Q3	7.2	7.0	8.6
Q4 (Est.)	6.6	6.5	7.2
Total	28.6	28.3	33.5

Distribution Center
Fill Rate

	FY 05		FY 04		FY 03
Q1	99	%	99	%	99	%
Q2	99	%	99	%	99	%
Q3	99	%	99	%	99	%
Q4			99	%	99	%

Distribution Center
Error Rate Per
1,000 Pkgs

	FY 05		FY 04		FY 03
Q1	<1.0	*	<1.0	*	1.38
Q2	1.18		<1.0	*	1.85
Q3	<1.0	*	<1.0	*	1.66
Q4			1.00		1.33

*  Less than 1.0

Call Center
Abandonment
Rate

	FY 05		FY 04		FY 03
Q1	<1	%*	<1	%*	<1	%*
Q2	<1	%*	<1	%*	<1	%*
Q3	<1	%*	<1	%*	<1	%*
Q4			<1	%*	<1	%*

*  Less than 1%

Average Calls
Taken By Call
Center Associates
Per Day

	FY 05	FY 04	FY 03
Q1	61	61	61
Q2	61	60	61
Q3	60	63	62
Q4		62	60