MSC INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2009 THIRD QUARTER RESULTS

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“We are very pleased with our financial performance in the fiscal third quarter,” said Chuck Boehlke, Executive Vice President and Chief Financial Officer. “By carefully controlling our costs, we were able to achieve margins that were above our expectations, despite the soft sales environment. Our balance sheet and cash management continues to be outstanding. By successfully managing our working capital, we were able to convert over 300% of our net income into operating cash flow, exceeding third quarter 2008 levels and resulting in free cash flow (see Note 1) of $86.0 million. Based on our strong balance sheet and liquidity position, we remain confident in our ability to strategically invest in our future and take advantage of growth opportunities as they arise.”

Mr. Sandler concluded, “While our performance in the fiscal third quarter was better than anticipated, visibility remains limited as we continue to operate in one of the most severe economic downturns our industry has ever experienced. Feedback from our customers indicates that market conditions have remained weak without any expected near-term improvement. As a result, we are anticipating summer shutdowns that will be more prevalent and longer in duration than last year. Although these factors will likely impact sales in the coming months, we continue to believe that a larger proportion of customer business is being shifted to MSC, as our unmatched customer service, product offering, and value-added solutions make us a partner our customers can trust to support their supply chain needs. Despite these challenging times, our business continues to perform well and we believe that the steps we are taking will position us for robust growth in revenues and earnings when our markets improve.”

For the fiscal 2009 fourth quarter, the Company currently expects net sales of between $336.0 million and $348.0 million, and expects diluted earnings per share to be between $0.33 and $0.37. Expectations are based on MSC’s financial performance in the first several weeks of the fourth quarter of fiscal 2009. The Company cautioned that its guidance should be viewed in the context of the unprecedented market conditions and the resulting variability in actual results versus expectations.

The management of MSC will host a conference call today, at 11:00 a.m. Eastern Time, to review the Company’s results for the fiscal 2009 third quarter, and to comment on current operations. The call may be accessed via the Internet in the Investor Relations section (under “About MSC”) of MSC’s website located at: www.mscdirect.com. A replay of the conference call will be available on the Company’s website through July 16, 2009.

Note 1 – Free cash flow is defined as net cash provided by operating activities less expenditures for property, plant and equipment as shown on the Company’s condensed consolidated statements of cash flows. Net cash provided by operating activities during the fiscal 2009 third quarter was $91.3 million. Expenditures for property, plant and equipment during the fiscal 2009 third quarter were $5.3 million. 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, debt repayment and repurchases of the Company’s stock. Free cash flow is not a measure determined in accordance with U.S. generally accepted accounting principles (“GAAP”), and may not be defined and calculated by other companies in the same manner. Free cash flow should not be considered a substitute for “Operating income,” “Net income,” “Net cash flows provided by operating activities” or any other measure determined in accordance with GAAP.

MSC INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2009 THIRD QUARTER RESULTS

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About MSC Industrial Direct Co., Inc.

MSC Industrial Direct Co., Inc. is one of the premier distributors of Metalworking and Maintenance, Repair and Operations (“MRO”) supplies to industrial customers throughout the United States. MSC distributes approximately 590,000 industrial products from approximately 3,000 suppliers to approximately 350,000 customers. In-stock availability is approximately 99%, with next day standard delivery to the contiguous United States on qualifying orders up until 8:00 p.m. Eastern Time. MSC reaches its customers through a combination of approximately 27 million direct-mail catalogs and CD-ROMs, 96 branch sales offices, 927 sales people, the Internet and associations with some of the world's most prominent B2B e-commerce portals. For more information, visit the Company's website at http://www.mscdirect.com.

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 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, including statements about future expected net sales and diluted earnings per share, 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 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, current economic, political and social conditions, changing customer and product mixes, financial restrictions on outstanding borrowings, industry consolidation, competition, general economic conditions in the markets in which the Company operates, volatility in commodity and energy prices, credit risk of our customers, risk of cancellation or rescheduling of orders, work stoppages or other business interruptions (including those due to extreme weather conditions) 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 the outcome of potential government or regulatory proceedings or future litigation relating to pending or future claims, inquiries or audits. Additional information concerning these and other risks is described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company's reports on Forms 10-K, 10-Q and 8-K that the Company files with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release are based on current expectations and the Company assumes no obligation to update these forward-looking statements.

(Tables Follow)

MSC INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2009 THIRD QUARTER RESULTS

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MSC INDUSTRIAL DIRECT CO., INC.

Condensed Consolidated Balance Sheets

(In thousands)

	May 30, 2009			August 30, 2008
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	208,192		$	42,843
Accounts receivable, net of allowance for doubtful accounts		159,920			216,407
Inventories		261,083			320,434
Prepaid expenses and other current assets		15,867			19,185
Deferred income taxes		25,329			23,807
Total current assets		670,391			622,676

Property, plant and equipment, net		131,981			128,931
Goodwill		271,765			272,143
Identifiable intangibles, net		57,495			62,885
Other assets		8,107			16,091
Total assets	$	1,139,739		$	1,102,726

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Revolving credit notes	$	95,000		$	91,000
Current maturities of long-term notes payable		51,416			43,726
Accounts payable		46,485			54,511
Accrued liabilities		50,697			61,364
Total current liabilities		243,598			250,601
Long-term notes payable		59,908			98,473
Deferred income tax liabilities		48,191			42,040
Total liabilities		351,697			391,114
Commitments and Contingencies
Shareholders’ Equity:
Preferred Stock		—			—
Class A common stock		60			59
Class B common stock		18			18
Additional paid-in capital		447,474			431,330
Retained earnings		820,120			758,347
Accumulated other comprehensive loss		(2,216	)		(676	)
Class A treasury stock, at cost		(477,414	)		(477,466	)
Total shareholders’ equity		788,042			711,612
Total liabilities and shareholders’ equity	$	1,139,739		$	1,102,726

MSC INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2009 THIRD QUARTER RESULTS

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MSC INDUSTRIAL DIRECT CO., INC.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	May 30, 2009			May 31, 2008			May 30, 2009			May 31, 2008
Net sales	$	350,489		$	457,238		$	1,135,421		$	1,331,278

Cost of goods sold		189,470			246,793			606,529			715,205

Gross profit		161,019			210,445			528,892			616,073

Operating expenses		115,778			125,632			365,981			374,675

Income from operations		45,241			84,813			162,911			241,398

Other (Expense) Income:

Interest expense		(544	)		(1,850	)		(3,212	)		(6,773	)

Interest income		164			125			710			500

Other income (expense), net		65			(32	)		44			44

Total other expense		(315	)		(1,757	)		(2,458	)		(6,229	)

Income before provision for income taxes		44,926			83,056			160,453			235,169

Provision for income taxes		17,171			31,671			61,325			89,458

Net income	$	27,755		$	51,385		$	99,128		$	145,711

Per Share Information:
Net income per common share:

Basic	$	0.45		$	0.82		$	1.61		$	2.27

Diluted	$	0.44		$	0.81		$	1.59		$	2.23

Weighted average shares used in computing net income per common share:
Basic		61,838			62,820			61,710			64,306

Diluted		62,553			63,709			62,506			65,201

Cash dividend declared per common share	$	0.20		$	0.18		$	0.60		$	0.54

MSC INDUSTRIAL DIRECT CO., INC. REPORTS FISCAL 2009 THIRD QUARTER RESULTS

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MSC INDUSTRIAL DIRECT CO., INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Thirty-Nine Weeks Ended
	May 30, 2009			May 31, 2008
Cash Flows from Operating Activities:
Net income	$	99,128		$	145,711
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		20,075			20,445
Stock-based compensation		7,800			7,822
Loss on disposal of property, plant and equipment		—			3
Provision for doubtful accounts		3,574			2,360
Deferred income taxes		4,630			2,546
Excess tax benefits from stock-based compensation		(1,575	)		(2,109	)

Changes in operating assets and liabilities:
Accounts receivable		51,869			(12,797	)
Inventories		58,389			(8,331	)
Prepaid expenses and other current assets		3,232			2,171
Other assets		7,734			5,940
Accounts payable and accrued liabilities		(15,735	)		(19,336	)

Total adjustments		139,993			(1,286	)

Net cash provided by operating activities		239,121			144,425

Cash Flows from Investing Activities:
Expenditures for property, plant and equipment		(18,048	)		(11,209	)
Proceeds from sale of property, plant and equipment		448			—

Net cash used in investing activities		(17,600	)		(11,209	)

Cash Flows from Financing Activities:
Purchases of treasury stock		(1,200	)		(120,444	)
Payment of cash dividends		(37,355	)		(35,019	)
Excess tax benefits from stock-based compensation		1,575			2,109
Proceeds from sale of Class A common stock in connection with associate stock purchase plan		2,096			2,075
Proceeds from exercise of Class A common stock options		5,761			4,579
Net proceeds under revolving loans from credit facility		4,000			35,000
Repayments of notes payable under the credit facility and other notes		(30,875	)		(23,182	)

Net cash used in financing activities		(55,998	)		(134,882	)

Effect of foreign exchange rate changes on cash and cash equivalents		(174	)		(27	)

Net increase (decrease) in cash and cash equivalents		165,349			(1,693	)

Cash and cash equivalents – beginning of period		42,843			7,797

Cash and cash equivalents – end of period	$	208,192		$	6,104

Supplemental Disclosure of Cash Flow Information:

Cash paid for income taxes	$	43,652		$	82,416

Cash paid for interest	$	3,685		$	6,982

# # #

New York	1-14130	11-3289165
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

75 Maxess Road, Melville, New York	11747
(Address of principal executive offices)	(Zip Code)

	MSC INDUSTRIAL DIRECT CO., INC.

Date: July 2, 2009	By:	/s/ Shelley M. Boxer
	Name: Shelley M. Boxer Title: Vice President, Finance

Exhibit No.		Description

99.1		Press Release, dated July 2, 2009, issued by MSC Industrial Direct Co., Inc.