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FISCAL FOURTH QUARTER 2026 EARNINGSOCTOBER 22, 2026
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2investor.mscdirect.com CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSStatements in this presentation may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of present or historical fact, that address activities, events or developments that MSC expects, believes or anticipates will or may occur in the future, including statements about results of operations and financial condition, expected future results, expected benefits from our investment and strategic plans and other initiatives, and expected future growth and profitability, are forward-looking statements. The words “will,” “may,” “believes,” “anticipates,” “thinks,” “expects,” “estimates,” “plans,” “intends” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. In addition, statements which refer to expectations, projections or other characterizations of future events or circumstances, statements involving a discussion of strategy, plans or intentions, statements about management’s assumptions, projections or predictions of future events or market outlook and any other statement other than a statement of present or historical fact are forward-looking statements. The inclusion of any statement in this presentation does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material. In addition, new risks may emerge from time to time and it is not possible for management to predict such risks or to assess the impact of such risks on our business or financial results. Accordingly, future results may differ materially from historical results or from those discussed or implied by these forward-looking statements. Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements. These risks and uncertainties include, but are not limited to, the following: general economic conditions in the markets in which we operate; changing customer and product mixes; volatility in commodity, energy and labor prices, and the impact of prolonged periods of low, high or rapid inflation; competition, including the adoption by competitors of aggressive pricing strategies or sales methods; industry consolidation and other changes in the industrial distribution sector; the applicability of laws and regulations relating to our status as a supplier to the U.S. government and public sector; the credit risk of our customers; our ability to accurately forecast customer demands; interruptions in our ability to make deliveries to customers; supply chain disruptions; our ability to attract and retain sales and customer service personnel; the risk of loss of key suppliers or contractors or key brands; changes to trade policies or trade relationships, including tariff policies; risks associated with opening or expanding our customer fulfillment centers; our ability to estimate the cost of healthcare claims incurred under our self-insurance plan; interruption of operations at our headquarters or customer fulfillment centers; products liability due to the nature of the products that we sell; impairments of goodwill and other indefinite-lived intangible assets; the impact of climate change; operating and financial restrictions imposed by the terms of our material debt instruments; our ability to access additional liquidity; the significant influence that our principal shareholders will continue to have over our decisions; our ability to execute on our E-commerce strategies and maintain our digital platforms; costs associated with maintaining our information technology (“IT”) systems and complying with data privacy laws; disruptions or breaches of our IT systems or violations of data privacy laws, including such disruptions or breaches in connection with our E-commerce channels; risks related to online payment methods and other online transactions; the retention of key management personnel; litigation risk due to the nature of our business; failure to comply with environmental, health, and safety laws and regulations; and our ability to comply with, and the costs associated with, social and environmental responsibility policies. 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 our Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively, and in the other reports and documents that we file with the United States Securities and Exchange Commission. We expressly disclaim any obligation to update any of these forward-looking statements, except to the extent required by applicable law.
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3investor.mscdirect.com FISCAL FOURTH QUARTER 2026 HIGHLIGHTSAverage daily sales (“ADS”) up 8.6% and above the high-end of our outlook driven by stronger than anticipated volumes * Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations** The Company defines Incremental Operating Margin as the change in year-over-year Income from Operations as a percentage of the change in year-over-year Net Sales and Adjusted Incremental Operating Margin as Incremental Operating Margin adjusted to exclude asset impairments and related charges, share reclassification litigation costs, restructuring and other costs, and loss on sale of property (prior year), by excluding such items from Income from Operations. The Company’s management believes thatIncremental Operating Margin is useful because it shows the direction that operating profit margins are moving as a result of changes in net sales between periods, and that, by excluding the aforementioned items, Adjusted Incremental Operating Margin helpsto more clearly show, on a comparable basis between periods, trends in the Company’s underlying business and results of operations. The Company believes that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures. Gross margin of 40.6% in line with our expectations and historical sequential averagesReported EPS of $0.85 down 16% YoY while adjusted* EPS of $1.45 improved 33% YoYReported operating margin down190 bps from asset impairment charge but improved 170 bps YoY to 10.9% on an adjusted basis, above the range of our outlook driven by favorability in both sales and operating expensesAchieved adjusted* incremental operating margin** of 27% in fiscal 4Q’26, inline with our expectation of stronger performance in second half of the fiscal year12345Returned approximately $208M to shareholders in the form of dividends and share repurchases during the fiscal year with close to $50M returned in 4Q 6
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4investor.mscdirect.com INTRODUCING MSC’S NEW CHIEF FINANCIAL OFFICER Rob KuhnsEVP & CFOJoined MSC as Executive Vice President and CFO in September8 years spent with TopBuild, where he served as CFO for 4 yearsExtensive distribution and industrial sector experienceProven track record of driving profitable growth and creating value for shareholders through disciplined capital allocation and accretive M&A
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5investor.mscdirect.com FISCAL 4Q RESULTS AND MILESTONES ACHIEVED THROUGHOUT THE FISCAL YEAR DEMONSTRATE EXECUTION IS IMPROVING * Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations. ** The Company defines Incremental Operating Margin as the change in year-over-year Income from Operations as a percentage of the change in year-over-year Net Sales and Adjusted Incremental Operating Margin as Incremental Operating Margin adjusted to exclude asset impairments and related charges, share reclassification litigation costs, restructuring and other costs, and loss on sale of property (prior year), by excluding such items from Income from Operations. The Company’s management believes that Incremental Operating Margin is useful because it shows the direction that operating profit margins are moving as a result of changes in net sales between periods, and that, by excluding the aforementioned items, Adjusted Incremental Operating Margin helps to more clearly show, on a comparable basis between periods, trends in the Company’s underlying business and results of operations. The Company believes that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures.FY26 ACHIEVEMENTSFISCAL 4Q’26 HIGHLIGHTS 8.6%YOY AVERAGE DAILY SALES170bpsYOY ADJUSTED OPERATING MARGIN*~27%ADJUSTED* INCREMENTAL OPERATING MARGIN**~33%YOY ADJUSTED EARNINGS PER SHARE*SUPPLIER RELATIONSHIPSHosted MSC’s first in-person supplier conference in 9 years with over 1,000 associates and 400 suppliers in attendance Achieved ~$100M of the $500M annualized sales pipeline identified at the event STRATEGIC PARTNERSHIPSStrengthened strategic partnerships Began to leverage Autodesk Fusion’s connected supply chain capabilities to enhance metalworking experts and services capabilities PRICE/COSTMANAGEMENT Managed gross margin to support volumes while successfully navigating price/cost dynamics and historic tungsten inflationAchieved neutral price/cost and expanded gross margin by 10 bps YoY in FY’26SALESFORCE OPTIMIZATIONCompleted final structural changes of our salesforce optimization work Enhanced onboarding and embedded sales management processes resulting in YoY volume growth during the 2nd half of the fiscal year with ~170 fewer sellers
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6investor.mscdirect.com BUILDING MOMENTUM FROM EFFORTS TO DRIVE EFFICIENCIES AND CAPTURE SHARE EXPECTED TO CONTINUE901001101201301Q'252Q'253Q'254Q'251Q'262Q'263Q'264Q'26Indexed to 100SALES PER REP PER DAYSales per rep per day trends in 4Q’26 have improved by more than 20% vs. 1Q’25 levelsAchievedYoY improvement in the mid-teens in 4Q’26 Number of customer touches in FY’26 nearly doubled despite fewer reps YoY90951001051101151Q'252Q'253Q'254Q'251Q'262Q'263Q'264Q'26Indexed to 100TTM SALES PER HEAD COUNTExited FY’26 with TTM sales per headcount up low-double digits YoYReported and Adjusted operating expenses* as a % of sales down 90 bps and 100 bps, respectively YoY in FY’264Q’26 ADS growth of ~9% achieved with ~250 fewer heads YoY5 consecutive quarters of Core Customer ADS growth outperforming total companyAchieved double-digit ADS growth for the 1st time since 1Q’23 Supported by web ADS growth outperforming total company and operational enhancements in the fieldCORE CUSTOMER ADS-5.3%-6.8%-0.8%4.1%6.4%5.5%8.1%10.4%-10%-5%0%5%10%15%1Q'252Q'253Q'254Q'251Q'262Q'263Q'264Q'26Core Customer ADS YoY % ChangeTotal Company ADS YoY % Change* Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations. Individual amounts may not agree to the total due to rounding.
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7investor.mscdirect.com -20%-15%-10%-5%0%5%10%15%20% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 MSC Total Growth (3 Mo Avg)IP Growth (3 Mo Avg)MSC Total Organic Sales Growth3-Month Average - IP IndexPERFORMANCE IMPROVING AGAINST IP AS VOLUMES BEGIN TO INFLECT POSITIVELY • Data as of September 18, 2026; • Source: Federal Reserve 4Q’26Industry Group3.2%Fabricated Metals5.2%Machinery & Equipment8.2%Aerospace1.6%Motor Vehicle & Parts0.8%Primary MetalsIP Index Performance YoY of MSC’s Top 5 Industries
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8investor.mscdirect.com FISCAL FOURTH QUARTER 2026 REPORTED AND ADJUSTED RESULTS * Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations. Individual amounts may not agree to the total due to rounding.•ADS increase of 8.6% primarily driven by price of approximately 690 bps and 160 bps of volume improvement•Core and Other Customers ADS up 10%, National Accounts ADS up 9%, and Public Sector ADS down 1%•Sales to customers with an In-Plant program up 19%•Sales through vending machines up 20%Net Sales(millions)•Gross margin up 20 bps YoY •In line with expectations and historical sequential averagesGross Profit(millions and % of sales)•Reported operating profit in Q4’26includes $41.8 million of asset impairments and related charges, $1.4 million of restructuring and other costs, and $1.8 million of share reclassification litigation costs•Reported operating profit in Q4’25 includes $4.6 million in restructuring and other costs and $1.5 million of share reclassification litigation costs•Adjusted operating margin* improvement driven by higher sales and gross margin combined with operating expense savings related to our headcount actions over the last twelve months Operating Profit(millions and % of sales)•Q4’26 reported EPS includes $0.56 of asset impairments and related charges, $0.02 of restructuring and other costs, and $0.02 of share reclassification litigation costs•Q4’25 reported EPS includes $0.06 of restructuring and other costs and $0.02 of share reclassification litigation costs•Minimal impact to adjusted EPS* from interest and other expensesEarnings(per diluted share)42.9%40.7%41.9%40.5%$978.2 $1,079.2 Q4 2025Q4 2026$395.0 $438.6 Q4 2025Q4 202640.4%40.6%$84.3 $72.8 Q4 2025 Q4 20268.6%6.7%$90.3 $117.8 Q4 2025 Q4 20269.2%10.9%Reported Adjusted*$1.01$0.85 Q4 2025 Q4 2026$1.09$1.45Q4 2025 Q4 2026Reported Adjusted*
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9investor.mscdirect.com FISCAL FOURTH QUARTER 2026 BALANCE SHEET AND CASH FLOW •Operating cash flow conversion** of ~169% in the fiscal 4Q’26 despite a step up in accounts receivable from higher sales and slightly higher inventories•Free cash flow conversion* of 133% in fiscal 4Q’26 and 102% for the fiscal year* Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations** The Company defines Operating Cash Flow Conversion as Net cash provided by operating activities as a percentage of Net Income. The Company’s management uses Operating Cash Flow Conversion to evaluate the Company’s operating performance, in particular how efficiently the Company turns its sales and profits into cash, and to assess the efficiency of the Company’s use of working capital. The Company believes Operating Cash Flow Conversion is useful to investors for the foregoing reasons and as a measure of the rate at which the Company converts its net income reported in accordance with GAAP to cash inflows, which helps investors assess whether the Company is generating sufficient cash flow to provide an adequate returnNet Debt and Financial Leverage (millions, except ratio)•Net debt down approximately $18 million as a result of lower debt levels and higher cash on hand•Maintaining a healthy balance sheet with net debt to EBITDA of approximately 1.0x*•Target net debt to EBITDA ratio between 1.0x and 2.0x*$429.5$411.9Q4 2025 Q4 20261.1x1.0xQ4 2025 Q4 2026Net Debt Net Debt to EBITDA*Free Cash Flow* (millions)$58.5$63.8Q4 2025 Q4 2026$240.9$225.2FY 2025 FY 2026QuarterlyFiscal Year
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10investor.mscdirect.com CLEAR CAPITAL ALLOCATION PRIORITIESDividends and Share Repurchases24%3%23%50%~$1.5BCAPITAL DEPLOYED(FY 2023 – FY 2026)Growth SpendOrdinary DividendsLong-Term PrioritiesSignificant capital allocation optionality after deprioritizing special dividends; potential uses include organic growth investments, strategic M&A, debt paydown, or further deployment to shareholdersStrategic OptionalityOngoing investment to strengthen operations, digital capabilities, and service offeringsCapexBolt-on acquisitions with a focus on underserved regions, adjacent product categories, technologies, and high-growth end marketsM&ATargeting to offset annual stock-based compensation dilution at a minimumShare RepurchasesTargeting modest annual increases in the ordinary dividendOrdinary DividendDisciplined focus on Return on Invested Capital* and value creation* Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations
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11investor.mscdirect.com FIRST QUARTER EXPECTATIONS REFLECT CONTINUED GROWTH AND MARGIN EXPANSIONUp 9.5% to 10.5% YoYAVERAGE DAILY SALES (ADS)9.5% to 10.1%ADJUSTED OPERATING MARGIN*ASSUMPTIONS•ADS improvement reflect building momentum in growth initiatives combined with benefits from price•Gross margin expected to be slightly below historical 4Q to 1Q averages•Assumes YoY and QoQ continued headwinds to profitability from inflation in freight and employee related expenses, including medical *Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations** October 2026 estimate is based on data through the close of business on Monday, October 19; the fiscal month of October ends on October 31, 2026. 1Q’27 OUTLOOKSept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov15%0%5%1Q’264%2Q’263%3Q’268%ADS YoY TRENDS4Q’269%1Q’27QTD9.5%~11.5%****Current October MTD trend
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12investor.mscdirect.com FY’27 OUTLOOK ON CERTAIN METRICS AND HISTORICAL SEQUENTIAL AVERAGE DAILY SALES PERFORMANCE WITH CONSIDERATIONSAVERAGE DAILY SALES CADENCE FY’27 MODELING ASSUMPTIONS24.5% - 25.5%80% - 90%$90M - $100M$40M - $45M$100M - $105MEffective Tax RateFree Cash Flow Conversion*Capital Expenditures***Interest and Other ExpenseDepreciation and Amortization3Q to4Q2Q to3Q1Q to2QUp ~1%Up ~7%Down ~3%Historical QoQ Average**•Conversations with customers suggest macro conditions can potentially improve as we progress through the fiscal year though visibility remains limited•Momentum from growth initiatives expected to build throughout the fiscal year•Potential for headwinds from materials, freight, and medical expense inflation to continue throughout FY’27•Customer shutdowns in December and early January likely to persist at levels seen in recent years•Expect to outperform the QoQ decline in 2Q’26 of ~7% that had temporary headwinds related to salesforce optimization•Inflationary headwinds likely to continue in 2QConsiderations4Q: 633Q: 652Q: 62Business Days1Q’27 ADS Mid Point$17.1M*Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations**5-year historical ADS average (FY’22-FY’26)*** Includes expenditures associated with cloud computing arrangements
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APPENDIX
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14investor.mscdirect.com FISCAL YEAR 2026 REPORTED AND ADJUSTED RESULTS * Represents a non-GAAP financial measure. See appendix for non-GAAP reconciliations. Individual amounts may not agree to the total due to rounding.•ADS growth of 6.0% primarily driven by price of 620 bps being partially offset by a decline in volumes of 40 bps•Core and Other Customer ADS up 8%, National Accounts ADS up 5%, and Public Sector ADS flatNet Sales(millions)•Gross margin up 10 bps YoY and in line with expectations •Strategically managed gross margin to support volumes while navigating price/cost dynamicsGross Profit(millions and % of sales)•Reported operating profit in FY’26 includes $43.7 million of asset impairments and related charges, $8.7 million of restructuring and other costs, and $6.4 million of share reclassification litigation costs•Reported operating profit in FY’25 includes $11.0 million of restructuring and other costs, $1.2 million in loss on sale of property, and $2.1 million of share reclassification litigation costs•Operating margin flat YoY but up 110 bps on an adjusted* basis and primarily driven by higher sales and savings from productivity initiatives Operating Profit(millions and % of sales)•FY’26 reported EPS includes $0.58 of asset impairments and related charges, $0.12 of restructuring and other costs, and $0.09 of share reclassification litigation costs partially offset by $0.07 from ERC tax benefit•FY’25 reported EPS includes $0.15 of restructuring and other costs, $0.02 in loss on sale of property, and $0.03 of share reclassification litigation costs•Increase largely driven by improving sales and profitability compared to the prior year•Lower interest and other expenses, which includes FX revaluation, represent an adjusted* EPS tailwind of $0.07 excluding the current year ERC tax benefit Earnings(per diluted share)42.9%40.7%41.9%40.5%$3,769.5 $4,009.7 FY 2025FY 2026$1,536.1 $1,639.3 FY 2025FY 202640.8% 40.9%$301.6 $320.6 FY 2025 FY 20268.0%8.0%$315.8 $379.3 FY 2025 FY 20268.4%9.5%Reported Adjusted*$3.57 $3.98FY 2025 FY 2026$3.76$4.69FY 2025 FY 2026Reported Adjusted*
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15investor.mscdirect.com RECONCILIATIONS Non-GAAP Financial MeasuresTo supplement MSC’s unaudited selected financial data presented consistent with accounting principles generally accepted in the United States (“GAAP”), the Company discloses certain non-GAAP financial measures, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP incremental operating margin, non-GAAP provision for income taxes, non-GAAP net income and non-GAAP diluted earnings per share, that exclude asset impairments and related charges, restructuring and other costs, share reclassification litigation costs, employee retention credit (“ERC”) tax benefit, loss on sale of property (prior year), and tax effects, as well as free cash flow conversion, which is a measure calculated using free cash flow, which is a non-GAAP measure. These non-GAAP financial measures are not presented in accordance with GAAP or an alternative for GAAP financial measures and may be different from similar non-GAAP financial measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measure and should only be used to evaluate MSC’s results of operations in conjunction with the corresponding GAAP financial measure.Financial data may include certain forward-looking information that is not presented in accordance with GAAP. The Company believes that a quantitative reconciliation of such forward-looking information to the most directly comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts because a reconciliation of these non-GAAP financial measures would require the Company to predict the timing and likelihood of potential future events such as restructurings, M&A activity, capital expenditures and other infrequent or unusual gains and losses. Neither the timing or likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward-looking information to the most directly comparable GAAP financial measure is not provided.Incremental Operating Margin and Adjusted Incremental Operating MarginThe Company defines Incremental Operating Margin as the change in year-over-year Income from Operations as a percentage of the change in year-over-year Net Sales and Adjusted Incremental Operating Margin as Incremental Operating Margin adjusted to exclude such items listed above from Income from Operations. The Company’s management believes that Incremental Operating Margin is useful because it shows the direction that operating profit margins are moving as a result of changes in net sales between periods, and that, by excluding the aforementioned items, Adjusted Incremental Operating Margin helps to show, on a comparable basis between periods, trends in the Company’s underlying business and results of operations. The Company believes that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures.Free Cash Flow (“FCF”) and Free Cash Flow Conversion (“FCF Conversion”)FCF is a non-GAAP financial measure. FCF is used in addition to and in conjunction with results presented in accordance with GAAP, and FCF should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review our financial statements and publicly-filed reports in their entirety and to not rely on any single financial measure. FCF, which we reconcile to “Net cash provided by operating activities,” is cash flow from operations reduced by “Expenditures for property, plant and equipment”. We believe that FCF, although similar to cash flow from operations, is a useful additional measure since capital expenditures are a necessary component of ongoing operations. Management also views FCF, as a measure of the Company’s ability to reduce debt, add to cash balances, pay dividends, and repurchase stock. FCF has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, FCF does not incorporate payments made on finance lease obligations or required debt service payments. In addition, different companies define FCF differently. Therefore, we believe it is important to view FCF as a complement to our entire consolidated statements of cash flows. FCF Conversion is useful to investors for the foregoing reasons and as a measure of the rate at which the Company converts its net income reported in accordance with GAAP to cash inflows, which helps investors assess whether the Company is generating sufficient cash flow to provide an adequate return. A reconciliation of cash provided by operating activities to FCF, operating cash flow conversion and FCF conversion for the fiscal quarters and years ended August 29, 2026 and August 30, 2025, respectively, is shown below.
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16investor.mscdirect.com RECONCILIATIONS Non-GAAP Financial MeasuresResults Excluding Asset Impairments and Related Charges, Share Reclassification Litigation Costs, ERC Tax Benefit, Restructuring and Other Costs, Loss on Sale of Property (prior year), and tax effectsIn calculating certain non-GAAP financial measures, we exclude asset impairments and related charges, restructuring and other costs, share reclassification litigation costs, ERC tax benefit, loss on sale of property (prior year), and tax effects. Management makes these adjustments to facilitate a review of the Company’s operating performance on a comparable basis between periods, for comparison with forecasts and strategic plans, for identifying and analyzing trends in the Company’s underlying business and for benchmarking performance externally against competitors. We believe that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures.Return on Invested Capital (“ROIC”)ROIC is calculated using a non-GAAP financial measure. We calculate ROIC by dividing non-GAAP net operating profit after tax (“NOPAT”) by average invested capital, a GAAP measure. NOPAT is defined as tax effected income from operations. Average invested capital is defined as net debt plus shareholder’s equity using a trailing 13-month average. We believe that ROIC is useful to investors as a measure of performance and of the effectiveness of the use of capital in our operations. We use ROIC as one measure to monitor and evaluate operating performance. This method of determining non-GAAP ROIC may differ from other companies' methods and therefore may not be comparable to those used by other companies. ROIC should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The financial measure calculated under GAAP which is most directly comparable to ROIC is considered to be the ratio of Net income to Average invested capital. See below for the calculation of ROIC and the reconciliation to the comparable GAAP measure.Net Debt to Earnings before Interest, Taxes, and Depreciation and Amortization (“EBITDA”)Net debt to EBITDA is calculated using a non-GAAP financial measure, EBITDA. The Company defines EBITDA as GAAP net income adjusted for taxes, total other expense and depreciation and amortization for the preceding 12 months. Net debt, a GAAP measure, is calculated as total debt less cash and cash equivalents. The Company presents net debt to EBITDA because it more clearly represents the operating profitability of the company and is a more accurate representation of the Company's financial position and its ability to cover its net debt obligations with results from its core operations. The Company’s management uses net debt to EBITDA to evaluate the timeframe it would take to pay back its debt if net debt and EBITDA are held constant. The Company believes net debt to EBITDA is useful to investors for the foregoing reasons and as a measure of the rate at which the Company can cover its debts, which helps investors assess whether the Company has ability to grow its debt to support future growth initiatives. This method of determining non-GAAP EBITDA may differ from other companies' methods and therefore may not be comparable to those used by other companies. EBITDA should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.
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THANK YOU