UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 11-K
(Mark One):
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x ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
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For
the fiscal year ended December 31, 2009
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OR
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o TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
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For
the transition period from
to
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Commission file number
1-14130
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A.
Full title of the plan and the address of the plan, if different from that of
the issuer named below:
MSC Industrial Direct
401(k) Plan
B.
Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
MSC
Industrial Direct Co., Inc.
75
Maxess Road, Melville, New York 11747
MSC
INDUSTRIAL DIRECT 401(K) PLAN
INDEX TO
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER
31, 2009 AND 2008 AND YEAR ENDED DECEMBER 31, 2009
Report
of Independent Registered Public Accounting Firm
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3 |
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Financial
Statements
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Statements
of Net Assets Available for Benefits as of December 31, 2009 and
2008
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4 |
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Statement
of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2009
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5 |
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Notes
to Financial Statements
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6-
17 |
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Supplemental
Schedule
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Form 5500,
Schedule H Line 4i — Schedule of Assets Held At End of
Year
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18 |
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Signatures
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19 |
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Exhibit Index
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20 |
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Exhibit 23.1
- Consent of Independent Registered Public Accounting Firm
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REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Plan Administrator and Trustee of the
MSC
Industrial Direct 401(k) Plan
We have
audited the accompanying statements of net assets available for benefits of the
MSC Industrial Direct 401(k) Plan (the “Plan”) as of December 31, 2009
and 2008, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2009. These financial statements
are the responsibility of the Plan’s management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan’s internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan’s
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan at
December 31, 2009 and 2008, and the changes in its net assets available for
benefits for the year ended December 31, 2009, in conformity with US
generally accepted accounting principles.
Our
audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held at end of year as of December 31, 2009, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor’s
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan’s management. This supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
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/s/
Ernst & Young LLP
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Jericho,
New York
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June 25,
2010
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
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December 31,
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2009
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2008
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Assets
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Cash
and cash equivalents
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$ |
65,239 |
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$ |
813 |
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Investments,
at fair value
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Mutual
funds
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88,121,446 |
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60,438,719 |
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Common
and collective trust funds
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25,077,681 |
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20,735,480 |
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MSC
Industrial Direct Co., Inc. common stock
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4,016,010 |
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3,339,921 |
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Participant
loans
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5,359,926 |
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4,549,110 |
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Tradelink
investments
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734,770 |
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476,574 |
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Total
investments, at fair value
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123,309,833 |
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89,539,804 |
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Receivables:
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Employer
contributions, net of forfeitures
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— |
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2,097 |
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Participant
contributions
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— |
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7,253 |
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Total
receivables
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— |
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9,350 |
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Net
assets available for benefits at fair value
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123,375,072 |
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89,549,967 |
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Adjustment
from fair value to contract value for fully benefit-responsive investment
contracts
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(556,931
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146,484 |
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Net
assets available for benefits
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$ |
122,818,141 |
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$ |
89,696,451 |
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See
accompanying notes to the financial statements.
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR
ENDED DECEMBER 31, 2009
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Year Ended
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December 31,
2009
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Additions to net assets attributed to:
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Contributions:
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Participants
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$ |
9,660,191 |
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Employer,
net of forfeitures
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967,494 |
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Rollovers
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956,406 |
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11,584,091 |
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Investment
income:
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Net
appreciation in fair value of investments
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23,107,934 |
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Dividend,
interest and loan income
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2,538,272 |
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Total
additions
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37,230,297 |
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Deductions
from net assets attributed to:
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Benefits
paid to participants
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4,079,187 |
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Withdrawals,
administration fees and other
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29,420 |
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Total
deductions
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4,108,607 |
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Net
increase in net assets
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33,121,690 |
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Net
assets available for benefits:
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Beginning
of year
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89,696,451 |
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End
of year
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$ |
122,818,141 |
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See
accompanying notes to the financial statements.
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009
1. DESCRIPTION OF
PLAN
The
following description of the MSC Industrial Direct 401(k) Plan, as amended
(the “Plan”) provides only general information. Participants should refer to the
plan document for a more complete description of the Plan’s
provisions.
General
The Plan
is a defined contribution plan, covering all Employees (as defined in the Plan)
of participating employers (other than Employees who are non-resident aliens
with no earned income from a participating employer which constitutes income
from services within the United States and Employees covered by a collective
bargaining agreement) who meet certain age and service requirements of the Plan.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”). MSC Industrial Direct Co., Inc. (the
“Company”) is responsible for the administration of the Plan. T. Rowe Price
Trust Company is the Plan Trustee and T. Rowe Price Retirement Plan
Services, Inc. is the recordkeeper for the Plan.
Eligibility
An
Employee is eligible for participation in the Plan on the first day of the month
following one full calendar month of service, or anytime thereafter, and must be
at least eighteen years of age. Both full-time and part-time
employees are eligible to join the Plan.
Contributions and
Vesting
Participants
may elect to contribute between 1% and 40% of their annual compensation, as
defined in the Plan. The maximum annual contribution a participant could make
into the Plan, as established by the Internal Revenue Code of 1986, as amended
(the “Code”), was $16,500 ($22,000 for participants eligible to make catch-up
contributions) during 2009. Participants may also contribute amounts
representing distributions from other qualifying plans. Participants are
immediately vested in their pre-tax and rollover contributions.
The
Employer (as defined in the Plan) may make a discretionary matching contribution
to eligible participants. The Employer determined to make, for 2009
(through March 29, 2009) and 2008, a discretionary matching contribution of 50%
of the first 6% of a participant’s pre-tax contribution. The Employer
may also make a discretionary profit sharing contribution to eligible
participants to be allocated in the same ratio as each eligible participant’s
compensation bears to the total of such compensation of all eligible
participants. No discretionary profit sharing contributions were made in 2009 or
2008. In general, participants must have completed 1,000 hours of
service during a calendar year and be employed on the last day of the Plan year
to be eligible to share in the allocation of any profit sharing employer
contributions. Participants vest in Employer contributions as
follows:
Completed Years of Service
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Vested Percentage
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Less
than 2
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0
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2
but less than 3
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20
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3
but less than 4
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40
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4
but less than 5
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60
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5
but less than 6
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80
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6
or more
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100
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In
addition, 100% vesting occurs upon termination of the Plan.
In 2009,
the Employer’s discretionary matching contributions were $975,958. This includes
the application of forfeitures accumulated in 2009 and previous Plan years of
$8,464. Effective March 29, 2009, the Company suspended the Employer matching
contribution. Employer matching contributions made prior to March 29, 2009 will
continue to vest according to the above schedule. Effective May 23, 2010, the
Company reinstated the Employer discretionary matching contribution to eligible
participants.
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
Participant
Accounts
Individual
accounts are maintained for each participant in the Plan. Each participant’s
account is credited with the participant’s contributions and allocations of
(a) the Company’s contributions and (b) earnings and losses from
applicable investment performance, and, if not paid by the Employer,
administrative expenses.
Forfeited
Accounts
Forfeited
balances of terminated participants’ non-vested employer contributions are used
to pay administrative expenses of the Plan or to reduce future employer
discretionary matching contributions and future employer discretionary profit
sharing contributions. Forfeitures accumulated during 2009 and previous Plan
years were $52,742, with a forfeiture balance of $57,589 as of December 31,
2009.
Participant
Loans
The Plan
has a loan provision, which allows participants to borrow from the Plan. The
minimum loan is $1,000, and the maximum loan is generally 50% of a participant’s
total vested account balance, not to exceed $50,000. The interest rate is
established by the prime rate plus one percent. Interest rates on outstanding
loans as of December 31, 2009 ranged from 4.25% to
10.50%. Interest paid by a participant on an outstanding loan is paid
directly into the participant’s account. Principal and interest is paid ratably
through payroll deductions. The repayment period cannot exceed five years unless
the loan is used to acquire a participant’s principal residence, in which case
the repayment period cannot exceed ten years. A participant can have a maximum
of two loans outstanding from the Plan at any given time.
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
In-Service
Withdrawals
The Plan
permits a participant to withdraw participant pre-tax, vested discretionary
matching and vested discretionary profit sharing contributions to the extent
necessary to satisfy the participant’s hardship (as defined in the Plan). In
addition, the Plan permits participants who have attained age 59-1/2 to make
in-service withdrawals from the Plan.
Payment of
Benefits
On
termination of service due to death, disability, retirement or for any other
reason, if the participant’s vested balance exceeds $5,000, a participant
(beneficiary upon death) may elect to receive a lump-sum distribution equal to
the value of the participant’s vested interest in his or her account or
installments over a fixed period, a direct rollover into an Individual
Retirement Account or another Qualified Plan, or may elect to defer
distribution. If a participant’s vested account balance is less than or equal to
$5,000, the participant’s vested account balance will be paid in a lump-sum
distribution. If the amount of such mandatory distribution is more than $1,000
and the participant does not elect to have such distribution directly rolled
over into an IRA or other eligible retirement plan or paid directly to him or
her, such amount will be directly rolled over into an IRA established by the
Plan administrator in the participant’s name.
Plan
Expenses
Expenses
for recordkeeping, investment and other costs are generally paid by the Plan.
Accounting fees are generally paid by the Company.
Amendment and
Restatement
On
December 23, 2009, the Plan was amended and restated, generally effective
January 1, 2009, utilizing a prototype document sponsored by
AccuDraft, Inc. As part of such restatement, the Plan was
amended to, among other things, incorporate into the Plan document
previously-adopted amendments required by the Economic Growth Tax Relief
Reconciliation Act of 2001 and subsequent legislative and regulatory
changes.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of
Accounting
The
accounting records and financial statements of the Plan are prepared on the
accrual basis in accordance with accounting principles generally accepted in the
United States and are based upon data provided by the record keeper and/or
custodian, adjusted for accruals for contributions receivable and excess
contribution payments due to participants based on the results of ERISA limit
testing.
Investment
contracts held by a defined-contribution plan or by a fund within a
defined-contribution plan are required to be reported at fair value. However,
contract value, which is equal to contributions plus earnings less withdrawals
and expenses, is the relevant measurement attribute for that portion of the net
assets available for benefits of a defined-contribution plan attributable to
fully benefit-responsive investment contracts because contract value is the
amount participants would receive if they were to initiate permitted
transactions under the terms of the Plan.
The Plan
invests in investment contracts through its participation in the T.Rowe Price
Stable Value Common Trust Fund (the “Fund”), a common collective trust fund. The
Statements of Net Assets Available for Benefits present the fair value of the
investment in the Fund as well as the adjustment of the investment in the Fund
from fair value to contract value. The fair value of the Plan’s interest in the
Fund is based on information reported by the issuer of the common collective
trust at year end. The Statement of Changes in Net Assets Available for Benefits
is prepared on a contract value basis.
Information
pertaining to the Fund for the year ending December 31, 2009 is as
follows:
Average Yield
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Crediting Interest Rate
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Investments at Fair Value
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Investments at Contract Value
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Adjustment to Contract Value
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4.26%
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4.62% |
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$18,546,020 |
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$17,989,089 |
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$(556,931) |
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Information
pertaining to the Fund for the year ending December 31, 2008 is as
follows:
Average Yield
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Crediting Interest Rate
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Investments at Fair Value
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Investments at Contract Value
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Adjustment to Contract Value
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4.23%
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4.82% |
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$15,626,484 |
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$15,772,968 |
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$146,484 |
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
New Accounting
Pronouncements
In
January 2010, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Codification (“ASC”) Update No. 2010-06, Fair Value Measurements and
Disclosures (Topic 820) – Improving Disclosures about Fair Value
Measurements. This guidance requires: (i) separate
disclosure of significant transfers between Level 1 and Level 2 and reasons for
the transfers; (ii) disclosure, on a gross basis, of purchases, sales,
issuances, and net settlements within Level 3; (iii) disclosures by class of
assets and liabilities; and (iv) a description of the valuation techniques and
inputs used to measure fair value for both recurring and non-recurring fair
value measurements. This guidance is effective for reporting periods
beginning after December 15, 2009, except for the Level 3 disclosure
requirements, which will be effective for fiscal years beginning after December
15, 2010 and interim periods within those fiscal years with early adoption
permitted. The Plan early adopted the Level 3 disclosure requirements
for its year ended December 31, 2009. Refer to Note 3 to the
Financial Statements.
In
September 2009, the FASB issued ASC Update No. 2009-12, Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent). ASC Update No.
2009-12 is effective for periods ending after December 15, 2009. This
new standard requires the Plan to disclose information about fair value
measurements of investments in certain entities that calculate net asset value
per share or its equivalent. See Note 3 for the Plan’s required
disclosures. The Plan’s adoption of this standard did not have a
material impact on the Plan’s financial statements.
In June
2009, the FASB issued guidance under ASC Topic 105, Generally Accepted Accounting
Principles, which was formerly referred to as FASB Statement of Financial
Accounting Standards No. 168, FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles – A
Replacement of FASB Statement No. 162. This guidance establishes
the FASB Accounting Standards Codification (the “Codification”) as the source of
authoritative U.S. generally accepted accounting principles (“GAAP”) for
non-governmental entities. The Codification supersedes all existing
non-Securities and Exchange Commission (“SEC”) accounting and reporting
standards. Rules and interpretive releases of the SEC under authority of
federal security laws remain authoritative GAAP for SEC registrants. This
guidance and the Codification are effective for financial statements issued for
interim and annual periods ending after September 15, 2009. As the
Codification did not change existing GAAP, the adoption did not have an impact
on the Plan’s financial statements.
In
May 2009, the FASB issued a statement which establishes general standards
of accounting for and disclosure of events that occur after the balance sheet
date but before financial statements are issued. In February 2010,
the FASB issued ASC Update No. 2010-09, Subsequent Events, which
amends the previous guidance on subsequent events and no longer requires SEC
filers to disclose the date through which subsequent events have been evaluated.
The subsequent event provisions are effective for interim and annual reporting
periods ending after June 15, 2009. The amendments are effective February
2010. The adoption of this statement did not have an impact on the Plan’s
financial statements.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
Risks and
Uncertainties
The Plan
investment options include various investment securities. Market
values of investments may decline for a number of reasons, including changes in
prevailing market and interest rates, increases in defaults, and credit rating
downgrades. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in the
values of investment balances will occur in the near term and that such changes
could materially affect participants’ account balances and the amounts reported
in the Statements of Net Assets Available for Benefits.
The
Plan’s exposure to a concentration of credit risk is limited by the
diversification of investments across the participant-directed fund
elections. Additionally, the investments with each
participant-directed fund election are further diversified into varied financial
instruments, with the exception of investments in the Company’s common stock and
potentially the individual investments in the tradelink accounts under the
Plan. Investment decisions are made, and the resulting risks are
borne, exclusively by the Plan participant who made such decisions.
As of
December 31, 2009 and 2008, 3% and 4%, respectively, of the Plan’s net assets
available for benefits at fair value were invested in the Class A Common Stock
of MSC Industrial Direct Co., Inc. (quoted market prices of $47.00 and $36.83
per share, respectively). As of June 18, 2010, the market price of
the MSC Industrial Direct Co., Inc. Class A Common Stock was $52.76 per
share.
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PLAN
NUMBER: 003
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EIN:
13-5526506
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MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
Investments
Purchases
and sales of securities are recorded on a trade-date basis. Dividends are
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis.
Benefit
Payments
Benefits
are recorded when paid.
Reclassifications
Certain
prior period amounts have been reclassified to conform with current year
presentation.
3. FAIR VALUE
MEASUREMENTS
For the
year ended December 31, 2009, the Plan adopted the provisions of FASB ASC Topic
820, Fair Value Measurements
and Disclosures (“ASC 820”) for its financial assets and liabilities
carried at fair value on a recurring basis in its financial
statements. ASC 820 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (an exit
price). ASC 820 also establishes a fair value hierarchy that requires
assets and liabilities measured at fair value to be categorized into one of
three levels based on the inputs used in the valuation. The three
levels are defined as follows:
Level 1 – Inputs to the
valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the Plan has the ability to
access.
Level 2 – Inputs to the
valuation methodology include:
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Quoted
prices for similar assets or liabilities in active
markets;
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·
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Quoted
prices for identical or similar assets or liabilities in inactive
markets;
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·
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Inputs
other than quoted prices that are observable for the asset or
liability;
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·
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Inputs
that are derived principally from or corroborated by observable market
data by correlation or other means.
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If the
asset or liability has a specified (contractual) term, the Level 2 input must be
observable for substantially the full term of the asset or
liability.
Level 3 – Inputs to the
valuation methodology are unobservable and significant to the fair value
measurement.
The
asset’s or liability’s fair value measurement level within the fair value
hierarchy is based on the lowest level of any input that is significant to the
fair value measurement. Valuation techniques used need to maximize the use of
observable inputs and minimize the use of unobservable inputs. Following is a
description of the valuation methodologies used for assets measured at fair
value.
Common stocks, corporate bonds and
U.S. government securities: Valued at the closing price reported on the
active market on which the individual securities are traded and are classified
as Level 1 investments.
Mutual funds: Valued at the
net asset value (“NAV”) of shares
held by the plan at year end and are classified as Level 1
investments. There are no restrictions as to the redemption of these
investments nor does the Plan have any contractual obligations to further invest
in any of the individual mutual funds.
Common Collective Trusts: The
Equity Index Trust is composed of substantially all of the stocks in the S&P
500 Index and valued at the NAV of shares held by the plan at year end and is
classified as a Level 1 investment.
The
Stable Value Common Trust Fund is composed of fully benefit-responsive
investment contracts and is classified as a Level 2 investment. The
investments in this Trust are generally not available in an exchange and active
market and generally must be held to maturity.
There are
no imposed redemption restrictions nor does the Plan have any contractual
obligations to further invest in any of the individual trusts.
Participant loans: Valued at
their outstanding balances, which approximate fair value and are classified as
Level 3 investments. The Company has determined that cost
approximates fair value as:
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·
|
The
weighted average interest rate of the loans outstanding is not
significantly different than the interest rate for loans issued at the end
of the 2009 Plan year;
|
|
·
|
There
have been very low loan default rates on the participant loans based on
historical trends in the Plan; and
|
|
·
|
If
there is a default, the Plan’s investments in the participant loan will be
classified as a distribution to the participant thereby limiting any
further obligation by the Plan for the participant’s
account.
|
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
The
methods described above may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values.
Furthermore, while the Plan believes its valuation methods are appropriate and
consistent with other market participants, the use of different methodologies or
assumptions to determine the fair value of certain financial instruments could
result in a different fair value measurement at the reporting date.
The
following tables set forth by level, within the fair value hierarchy, the Plan’s
assets at fair value as of December 31, 2009 and 2008:
|
|
Assets at Fair Value as of December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual
Funds
|
|
$ |
88,121,446 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
88,121,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common/Collective
Trusts
|
|
|
6,531,661 |
|
|
|
18,546,020 |
|
|
|
- |
|
|
|
25,077,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stocks
|
|
|
4,016,010 |
|
|
|
- |
|
|
|
- |
|
|
|
4,016,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tradelink
Investments
|
|
|
734,770 |
|
|
|
- |
|
|
|
- |
|
|
|
734,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
65,239 |
|
|
|
- |
|
|
|
- |
|
|
|
65,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant
Loans
|
|
|
- |
|
|
|
- |
|
|
|
5,359,926 |
|
|
|
5,359,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
at fair value
|
|
$ |
99,469,126 |
|
|
$ |
18,546,020 |
|
|
$ |
5,359,926 |
|
|
$ |
123,375,072 |
|
|
|
Assets at Fair Value as of December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual
Funds
|
|
$ |
60,438,719 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
60,438,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common/Collective
Trusts
|
|
|
5,108,996 |
|
|
|
15,626,484 |
|
|
|
- |
|
|
|
20,735,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stocks
|
|
|
3,339,921 |
|
|
|
- |
|
|
|
- |
|
|
|
3,339,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tradelink
Investments
|
|
|
476,574 |
|
|
|
- |
|
|
|
- |
|
|
|
476,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
813 |
|
|
|
- |
|
|
|
- |
|
|
|
813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant
Loans
|
|
|
- |
|
|
|
- |
|
|
|
4,549,110 |
|
|
|
4,549,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
at fair value
|
|
$ |
69,365,023 |
|
|
$ |
15,626,484 |
|
|
$ |
4,549,110 |
|
|
$ |
89,540,617 |
|
The
following table presents a reconciliation of Level 3 assets measured at fair
value for the period January 1, 2009 to December 31, 2009 and for the period
January 1, 2008 to December 31, 2008:
|
|
|
|
|
|
|
Beginning
balance as of January 1
|
|
$ |
4,549,110 |
|
|
$ |
4,082,705 |
|
Loan
repayments
|
|
|
(2,288,343 |
) |
|
|
(2,129,917 |
) |
Loan
withdrawals
|
|
|
3,238,160 |
|
|
|
2,809,215 |
|
Deemed
distributions
|
|
|
(139,001 |
) |
|
|
(212,893 |
) |
Ending
balance as of December 31
|
|
$ |
5,359,926 |
|
|
$ |
4,549,110 |
|
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
4. INVESTMENTS
The fair
value of individual investments that represent 5% or more of the Plan’s net
assets at December 31, 2009 and 2008 are as follows:
|
|
December 31,
2009
|
|
|
December 31,
2008
|
|
|
|
|
|
|
|
|
T.
Rowe Price Equity Income Fund
|
|
$ |
* |
|
|
$ |
4,536,632 |
|
T.
Rowe Price Equity Index Trust
|
|
|
6,531,661 |
|
|
|
5,108,996 |
|
T.
Rowe Price Global Stock Fund
|
|
|
7,494,038 |
|
|
|
5,138,572 |
|
T.
Rowe Price Growth Stock Fund
|
|
|
11,210,229 |
|
|
|
7,522,461 |
|
T.
Rowe Price Personal Strategy Balanced Fund
|
|
|
7,416,135 |
|
|
|
4,967,881 |
|
T.
Rowe Price Personal Strategy Growth Fund
|
|
|
11,420,081 |
|
|
|
7,829,165 |
|
T.
Rowe Price Stable Value Common Trust Fund
|
|
|
18,546,020 |
|
|
|
15,626,484 |
|
PIMCO
Total Return Fund
|
|
|
9,647,833 |
|
|
|
7,221,677 |
|
* Does
not represent 5% or more of the Plan net assets at December 31,
2009.
During
the Plan year ended December 31, 2009, net appreciation in fair value of
investments was as follows:
|
|
December 31,
2009
|
|
|
|
|
|
Common
Trusts
|
|
$ |
1,370,379 |
|
MSC
Industrial Direct Co., Inc. Class A Common Stock
|
|
|
854,350 |
|
Mutual
Funds
|
|
|
19,906,815 |
|
Other
|
|
|
976,390 |
|
|
|
|
|
|
Total
|
|
$ |
23,107,934 |
|
5. INVESTMENT
OPTIONS
Participants
may allocate their contributions into the Plan among the following 20
options:
|
1)
|
MSC Industrial Direct
Co., Inc. Class A Common Stock—
The Plan Trustee is permitted to acquire, with amounts directed by
participants to be invested in shares of Class A Common Stock of MSC
Industrial Direct Co., Inc. (“Common Stock”) directly from the
Company.
|
The Plan
Trustee may acquire (sell) shares of Common Stock by purchasing (selling) such
shares on the principal national securities exchange on which shares of Common
Stock are traded on that date, and the cost of such shares will be the weighted
average purchase price (weighted average sale price) paid by the Plan Trustee
during a day. The price includes commissions incurred in the purchase or sale.
Alternatively, the Plan Trustee may acquire shares of Common Stock directly from
the Company. If acquired directly from the Company, the cost of the shares of
Common Stock will be the average of the high and low of the Common Stock as
traded on the principal national securities exchange on which such shares are
traded on the date issued by the Company. All of the shares of Common
Stock purchased (sold) by the Plan Trustee in the Plan year were traded through
the principal national securities exchange.
The Plan
Trustee may acquire shares of Common Stock in a single purchase or over time, as
it determines in its sole discretion.
If
circumstances so require, the Plan Trustee may suspend the purchase and sale of
shares of Common Stock. Such suspension will last until the Plan Trustee
determines that the circumstances causing the suspension have ceased to
exist.
The value
of the Common Stock held by the Plan is subject to fluctuation in the market
price of the shares of Common Stock. There is no guarantee of investment
performance. Likewise, there is no guarantee that the Company will pay dividends
in the future.
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
|
2)
|
T. Rowe
Price
Personal Strategy Growth Fund— Seeks
capital appreciation; income is a secondary concern. The fund
typically invests approximately 80% of assets in stocks and 20% in bonds
and money market securities.
|
|
3)
|
T. Rowe Price
Personal
Strategy Balanced Fund— Seeks
capital appreciation and income. The fund typically invests approximately
60% of assets in stocks, 30% in bonds, and 10% in money market
securities.
|
|
4)
|
T. Rowe Price
Personal
Strategy Income Fund— Seeks
income; capital growth is a secondary concern. The fund typically invests
approximately 40% of assets in stocks, 40% in bonds, and 20% in money
market securities.
|
|
5)
|
PIMCO Total Return
Fund— Seeks total return consistent with preservation of capital.
The fund normally invests at least 65% of assets in a diversified
portfolio of fixed income instruments of varying maturities, which may be
represented by forwards or derivatives such as options, futures contracts,
or swap agreements. The fund may invest up to 10% of assets in high-yield
securities. The fund may invest all assets in derivative instruments, such
as options, futures contracts or swap agreements, or in mortgage-or
asset-backed securities. The portfolio duration generally averages from
3.5 years to 6 years.
|
|
6)
|
T. Rowe Price
Balanced
Fund— Seeks capital growth, current income, and preservation of
capital. The fund normally invests approximately 60% of assets in U.S. and
foreign common stocks and 40% of assets in fixed-income securities. It
normally invests at least 25% of assets in senior fixed-income securities.
The fund may also invest in other securities, including futures, options
and swaps.
|
|
7)
|
T. Rowe Price
Equity
Income Fund— Seeks dividend income and long-term capital
appreciation. The fund invests at least 80% of assets in common stocks,
with 65% of assets in the common stocks of well-established companies
paying above-average dividends. It invests most assets in U.S.
common stocks, and may also purchase other securities including foreign
stocks, futures, and options.
|
|
8)
|
T. Rowe Price
Equity
Index Trust— Seeks long-term capital appreciation by investing
primarily in common stocks. Specifically, the trust seeks to
replicate the total return performance of the U.S. equity market as
represented by the Standard & Poor’s 500 Stock Index. The
trust aims to invest in substantially all 500 stocks comprising the
S&P 500 in proportion to their respective weighting in the index to
the extent practical.
|
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
|
9)
|
T. Rowe Price
Growth
Stock Fund— Seeks long-term growth of capital and income is
secondary. The fund normally invests at least 80% of assets in common
stock of a diversified group of growth companies. It mostly
seeks investments in companies that have the ability to pay increasing
dividends through strong cash flow. The fund generally looks
for companies with an above-average rate of earnings growth and a
lucrative niche in the economy. While it invests most assets in
U.S. common stocks, the fund may also purchase other securities including
foreign stocks, futures, and
options.
|
|
10)
|
T. Rowe Price
Global
Stock Fund— Seeks long-term capital growth. The fund diversifies
broadly by investing in a variety of industries in developed and, to a
lesser extent, emerging-markets. The fund invests in at least five
countries, one of which is the United States. The fund
purchases stocks without regard to a company’s market capitalization, but
generally invests in large and, to a lesser extent, medium-sized
companies. It invests at least 80% of net assets in U.S. and
foreign stocks and the percentage varies over
time.
|
|
11)
|
T. Rowe Price
International Stock
Fund— Seeks long-term growth of capital. The fund normally invests
at least 80% of assets in stocks of established non-U.S.
issuers. It may invest in companies of any size, but the focus
is on large and, to a lesser extent, medium-sized
companies. The fund may invest in both developing and developed
countries.
|
|
12)
|
T. Rowe Price
Media and
Telecommunications Fund— Seeks long-term growth of capital. The
fund normally invests at least 80% of assets in the common stocks of media
and telecommunications companies, including those in the entertainment,
broadcasting, and advanced communication industries. Generally, the fund
invests in companies in the large to mid-capitalization
range.
|
|
13)
|
Keeley Small Cap Value
Fund — Seeks
capital appreciation. The fund normally invests at least 80% of net assets
plus the amount of any borrowings for investment purposes in common stocks
and other equity type securities, including preferred stock, convertible
debt securities, and warrants, of companies with small market
capitalization.
|
|
14)
|
T. Rowe Price
Stable
Value Common Trust Fund— Seeks to provide maximum current income
while maintaining stability of principal. The trust will invest primarily
in Guaranteed Investment Contracts (“GICs”), Bank Investment Contracts
(“BICs”), Synthetic Investment Contracts (“SICs”), and Separate Account
Contracts (“SACs”) that meet quality and credit standards. The trust seeks
to reduce risk by diversifying its investments by issuer, quality, and
duration.
|
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
|
15)
|
Janus Growth and
Income Fund— Seeks long-term growth of capital and current income.
The fund normally invests up to 75% of assets in equity securities with
growth potential, and at least 25% of assets in securities with income
potential. It may invest in foreign equity and debt securities, which may
include investments in emerging
markets.
|
|
16)
|
T. Rowe Price
New
Horizons Fund— Seeks long-term capital growth. The fund will invest
primarily in a diversified group of small, emerging growth companies,
preferably early in the corporate life cycle. It may also invest in
companies that offer the possibility of accelerating earnings growth
because of rejuvenated management, new products, or structural changes in
the economy. While the fund invests most assets in U.S. common stocks, it
may also purchase other securities including foreign stocks, futures, and
options.
|
|
17)
|
T. Rowe Price
Mid-Cap
Value Fund— Seeks long-term capital appreciation. The fund normally
invests at least 80% of assets in companies whose market capitalization
falls within the range of the companies in the S&P MidCap 400 index or
the Russell Midcap Value index. While the fund invests most
assets in U.S. common stocks, it may also purchase other securities
including foreign stocks, futures, and
options.
|
|
18)
|
T. Rowe Price
Value
Fund— Seeks long-term capital appreciation and income is a
secondary consideration. The fund normally invests at least 65% of assets
in common stocks the fund manager regards as undervalued. Holdings
primarily consist of large-cap stocks, but may also include mid-cap and
small-cap companies. It will invest most assets in U.S. common
stocks, but may also purchase other securities, including foreign
stocks, futures, and options, in keeping with fund
objectives.
|
|
19)
|
T. Rowe Price
Mid-Cap
Growth Fund— Seeks long-term capital appreciation. The fund
normally invests at least 80% of assets in a diversified portfolio of
common stocks of mid-cap companies whose earnings T. Rowe Price expects to
grow at a faster rate than the average company. While it
invests most assets in U.S. common stocks, the fund may also purchase
other securities including foreign stocks, futures, and
options.
|
|
20)
|
Tradelink
Investments— An optional brokerage account that offers participants
the ability to diversify investments through the purchase of individual
stocks, bonds, and other securities plus thousands of mutual funds from
many well-known fund families.
|
Effective
November 3, 2008, the T. Rowe Price Small Cap Stock Fund was replaced with the
Keeley Small Cap Value Fund.
6. INCOME TAX
STATUS
The
underlying non-standardized prototype plan has received an opinion letter from
the Internal Revenue Service (IRS) dated March 31, 2008 stating that the form of
the plan is qualified under Section 401(a) of the Internal Revenue Code, and
therefore, the related trust is tax exempt. In accordance with Revenue
Procedures 2007-6 and 2005-16, the Plan Sponsor has determined that it is
eligible to and has chosen to rely on the current IRS prototype plan opinion
letter. The Plan has been submitted to the IRS, on April 30, 2010, for a
determination that the Plan, as adopted, complies in form with the qualification
requirements of Section 401(a) of the Code. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its qualification.
The Plan Sponsor has
indicated that it will take the necessary steps, if any, to bring the Plan's
operations into compliance with the Code.
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
7. RELATED PARTY
TRANSACTIONS
Certain
Plan investments are shares of mutual funds and trusts managed by T.Rowe Price.
T.Rowe Price is the trustee as defined by the Plan and, therefore, these
transactions qualify as permitted party-in-interest
transactions. These investments represent $98,722,192, or 80%
of total net assets available for plan benefits at fair value at December 31,
2009 and $70,479,829, or 79% of total net assets available for plan benefits at
fair value at December 31, 2008.
Plan
investments in shares of common stock issued by the Company were $4,016,010, or
3% of total net assets available for plan benefits at fair value at December 31,
2009 and $3,339,921, or 4% of total net assets available for plan benefits at
fair value at December 31, 2008. The Company is responsible for the
administration of the Plan.
8. PLAN
TERMINATION
The
Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan, subject to the provisions of ERISA. In the event
of the Plan termination, participants will become 100% vested in their
accounts.
9. RECONCILIATION OF FINANCIAL
STATEMENTS TO FORM 5500
The
following is a reconciliation of net assets available for benefits per the
financial statements at December 31, 2009 and 2008 to
Form 5500:
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net
assets available for benefits per the financial statements
|
|
$ |
122,818,141 |
|
|
$ |
89,696,451 |
|
|
|
|
|
|
|
|
|
|
Adjustment
to contract value for fully benefit-responsive investment
contracts
|
|
|
556,931 |
|
|
|
(146,484
|
) |
|
|
|
|
|
|
|
|
|
Net
assets available for benefits per the Form 5500
|
|
$ |
123,375,072 |
|
|
$ |
89,549,967 |
|
The
following is a reconciliation of the net increase in the net assets available
for benefits per the financial statements for the year ended December 31,
2009 to Form 5500:
|
|
December 31,
|
|
|
|
2009
|
|
|
|
|
|
Net
increase in net assets available for benefits
|
|
$ |
33,121,690 |
|
|
|
|
|
|
Add:
Reversal of prior year adjustment from contract value to fair value for
fully benefit-
responsive
investment contracts
|
|
|
146,484 |
|
|
|
|
|
|
Add:
Adjustment from contract value to fair value for fully benefit-responsive
investment contracts
|
|
|
556,931 |
|
|
|
|
|
|
Net
increase in net assets per Form 5500
|
|
$ |
33,825,105 |
|
|
PLAN
NUMBER: 003
|
|
EIN:
13-5526506
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009 (continued)
10. SUBSEQUENT
EVENTS
Effective
with compensation earned as of May 23, 2010, the Company has reinstated its
employer discretionary matching contributions of 50% of the first 6%, for the
pay period ending June 5, 2010, of a participant’s pre-tax contribution to
eligible participants.
MSC
INDUSTRIAL DIRECT 401(K) PLAN
FORM 5500
— SCHEDULE H, LINE 4i: SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS
OF DECEMBER 31, 2009
Identity of Issuer
|
|
Description
|
|
Cost
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
MSC
Industrial Direct Co., Inc. *
|
|
MSC
Industrial Direct Co., Inc. Class A Common Stock
|
|
|
** |
|
|
$ |
4,016,010 |
|
PIMCO
|
|
PIMCO
Total Return Fund
|
|
|
** |
|
|
|
9,647,833 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Balanced Fund
|
|
|
** |
|
|
|
5,656,533 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Equity Income Fund
|
|
|
** |
|
|
|
5,932,800 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Equity Index Trust
|
|
|
** |
|
|
|
6,531,661 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Global Stock Fund
|
|
|
** |
|
|
|
7,494,038 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Growth Stock Fund
|
|
|
** |
|
|
|
11,210,229 |
|
T.
Rowe Price *
|
|
T.
Rowe Price International Stock Fund
|
|
|
** |
|
|
|
3,136,986 |
|
T.
Rowe Price *
|
|
T.
Rowe Price New Horizons Fund
|
|
|
** |
|
|
|
1,190,621 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Media & Telecommunications Fund
|
|
|
** |
|
|
|
5,320,816 |
|
Keeley
|
|
Keeley
Small Cap Value Fund
|
|
|
** |
|
|
|
2,818,374 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Stable Value Common Trust Fund
|
|
|
** |
|
|
|
18,546,020 |
|
Janus
|
|
Janus
Growth and Income Fund
|
|
|
** |
|
|
|
2,010,728 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Mid-Cap Value Fund
|
|
|
** |
|
|
|
4,347,081 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Value Fund
|
|
|
** |
|
|
|
1,649,568 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Mid-Cap Growth Fund
|
|
|
** |
|
|
|
4,515,514 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Personal Strategy Balanced Fund
|
|
|
** |
|
|
|
7,416,135 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Personal Strategy Growth Fund
|
|
|
** |
|
|
|
11,420,081 |
|
T.
Rowe Price *
|
|
T.
Rowe Price Personal Strategy Income Fund
|
|
|
** |
|
|
|
4,354,109 |
|
T.
Rowe Price *
|
|
Cash
|
|
|
** |
|
|
|
65,239 |
|
Brokerage
Accounts
|
|
Tradelink
Investments
|
|
|
** |
|
|
|
734,770 |
|
Total
investments at fair value
|
|
|
|
|
|
|
|
|
118,015,146 |
|
|
|
|
|
|
|
|
|
|
|
|
Participant
Loans
|
|
1,609
Loans to participants with interest rates ranging from 4.25% - 10.50% with
various maturity dates through 2019
|
|
|
** |
|
|
|
5,359,926 |
|
Total
Assets Held For Investment Purposes
|
|
|
|
|
|
|
|
$ |
123,375,072 |
|
* Indicates
party-in-interest to the Plan.
**
Cost information is not required for participant directed investments and
participant loans and therefore, is not included.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
|
MSC
INDUSTRIAL DIRECT 401(K) PLAN
|
|
|
|
Date:
June 25, 2010
|
|
|
|
|
/s/
Eileen McGuire
|
|
|
Eileen
McGuire
Senior
Vice President of Human Resources
|
|
|
and
Plan Administrator
|
Exhibits:
23.1 Consent
of Independent Registered Public Accounting Firm