SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from __________ to __________
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: Sid Tool Savings 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
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
SID TOOL COMPANY, INC.
Date: June 27, 2000
/s/ Barbara Schwartz
--------------------
Barbara Schwartz
Plan Administrator
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
TOGETHER WITH AUDITORS' REPORT
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1999 AND 1998
Page(s)
-------
Report of Independent Public Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31, 2
1999 and 1998
Statement of Changes in Net Assets Available for Benefits for the 3
Year Ended December 31, 1999
Notes to Financial Statements 4-9
Supplemental Schedules:
Form 5500-Item 27a - Schedule of Assets Held for Investment 10
Purposes as of December 31, 1999
Form 5500-Item 27d - Schedule of Reportable Transactions for the 11
Year Ended December 31, 1999
All other schedules are omitted as they are not applicable or are not required
based on the disclosure requirements of the Employee Retirement Income Security
Act of 1974 and applicable regulations issued by the Department of Labor.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator and Trustee of the
Sid Tool Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Sid Tool Savings Plan (the "Plan") as of December 31, 1999 and 1998, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 1999. These financial statements and the schedules
referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as 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 as of
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are 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. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
115 Broad Hollow Road
Melville, New York
June 27, 2000
1
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
------------ ------------
Investments with custodian, at fair value $ 34,464,345 $ 20,992,916
------------ ------------
Receivables:
Employer contribution, net of forfeitures 19,856 13,781
Participant contribution 149,691 107,479
Participant loans 1,621,726 1,463,284
Accrued income 9,287 3,495
------------ ------------
Total receivables 1,800,560 1,588,039
------------ ------------
Net assets available for benefits $ 36,264,905 $ 22,580,955
============ ============
The accompanying notes are an integral part of these statements.
2
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 3,756,622
Dividend/interest income 1,534,456
----------------
5,291,078
----------------
Contributions:
Participant 5,019,652
Employer, net of forfeitures 541,485
Other 717,581
----------------
6,278,718
----------------
Total additions 11,569,796
----------------
Deductions from net assets attributed to:
Benefits paid to participants 2,558,514
Withdrawals/in-kind terminations/fees 122,846
Other, net 140,269
----------------
Total deductions 2,821,629
----------------
Transfers:
Plan rollovers 4,907,436
Loan transactions, net 28,347
----------------
Total transfers 4,935,783
----------------
Net increase 13,683,950
Net assets available for benefits:
Beginning of year 22,580,955
----------------
End of year $ 36,264,905
================
The accompanying notes are an integral part of this statement.
3
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF PLAN
The following description of the Sid Tool Savings Plan (the "Plan") provides
only general information. Participants should refer to the Plan agreement for a
more complete description of the Plan's provisions.
General
Effective January 1, 1989, Sid Tool Co., Inc. (the "Company") adopted the Sid
Tool Co., Inc. Employee 401(k) Savings Plan (the "401(k) Plan") for the benefit
of its employees ("associates"). Effective September 1993, the 401(k) Plan and
the Sid Tool Co., Inc. Profit Sharing Plan merged into the Plan. The Plan is a
continuation of the 401(k) Plan. Upon completion of the merger, all assets of
both plans were contributed to the Plan. The Plan is a defined contribution
plan. It is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
The Plan is administered by Merrill Lynch (the "Trustee"). The Trustee exercises
responsibility over the administration and investment of Plan assets. In
addition, the custodian and recordkeeping responsibilities for the Plan are
performed by Merrill Lynch (the "Custodian" and "Recordkeeper").
Eligibility
An associate is eligible for participation in the Plan on the first day of the
month after completing one full calendar month of service.
Contributions and Vesting
Participants may elect to contribute between 1% and 15% of their earnings into
the Plan. Participants are immediately vested in their contributions plus actual
earnings thereon. The maximum annual contribution a participant could make into
the Plan was $10,000 during 1999 and 1998.
Excess contributions occur when elective contributions on behalf of highly
compensated employees exceed those permitted under the special nondiscrimination
rule under IRS code 401(k). A plan is not disqualified provided that the excess
contributions are distributed to the highly compensated employees. There were no
excess contributions during 1999 and 1998.
The Company may make a discretionary matching contribution based on the
participants contributions, limited to 4% of compensation. The Company may also
make a discretionary contribution to participants to be allocated in the same
ratio as each participant's compensation bears to the total of such compensation
of all eligible participants. Participants must have completed 1,000 hours of
service and be employed on the last day of the Plan year to be eligible to share
in the allocation of non-matching employer contributions. Participants vest in
Company contributions as follows:
Completed Years of Service Vested Percentage
-------------------------- -----------------
less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
In 1999, the Company's discretionary matching contributions were $630,778,
including the payment of the December 31, 1998 contribution receivable and the
application of forfeitures of approximately $95,368. There were no discretionary
non-matching contributions in 1999.
4
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Forfeitures
Forfeitures of non-vested employer contributions will be used to reduce future
employer discretionary matching contributions. Forfeitures accumulated during
1999 were $205,992, with a forfeiture balance totaling $364,409 as of December
31, 1999.
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 50% of a participants' total
vested account balance, not to exceed $50,000. The interest rate is established
at the prime rate as of the beginning of each month at which the loan is made.
Interest rates on outstanding loans as of December 31, 1999 ranged from 7.5% to
9.5%. 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. A participant can
only have two loans outstanding from the Plan at any given time.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan for 1999 and 1998 are prepared in
accordance with Generally Accepted Accounting Principles ("GAAP") and are based
upon data provided by the Recordkeeper and/or Custodian, adjusted for accruals
for contributions receivable and excess contribution payments due to
participants based on the results of ERISA limit testing.
In September 1999, the American Institute of Certified Public Accountants issued
Statement of Position (`SOP") 99-3 "Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters." SOP 99-3
establishes standards for the reporting and disclosure of participant-directed
investment programs, which are no longer required to disclose amounts relating
to those individual programs as a separate fund in the financial statements, or
in the related disclosures. This SOP is effective for financial statements for
plan years ending after December 15, 1999, with earlier application encouraged.
The Plan has adopted the provisions of SOP 99-3 in 1999 with the
reclassification of comparative amounts in the financial statements for earlier
periods.
Investments
The Plan's investments are stated at fair value. Quoted market prices are used
to value investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year-end.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
Payment of Benefits
On termination of service due to death, disability or retirement, a participant
may elect to receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account, or annual installments over
a ten-year period. For termination of service for other reasons, a participant
may receive the value of the vested interest in his or her account as a lump-sum
distribution.
Plan Expenses
Expenses for recordkeeping, investment and other costs are paid by the Plan.
Accounting fees are paid by the Company.
5
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. INVESTMENTS
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
December 31,
-----------------------------
1999 1998
----------- -----------
ML Equity Index Trust Class A $ 6,199,416 $ 4,308,145
ML Retirement Preservation Trust 4,462,315 3,266,792
Federated Bond Fund Class A 2,136,072 1,993,539
Seligman Communications 2,036,767 110,704
Oppenheimer Global Fund 3,450,471 1,773,221
ML Growth Fund Class A 5,664,121 4,399,888
MFS Mass. Investors Trust Class A 2,020,736 743,021
ML Capital Fund Class A 2,378,515 2,121,306
4. INVESTMENT OPTIONS
Participants may allocate their contributions into the Plan among the following
24 options in 1999 (including a number of Merrill Lynch ("ML") options):
1) MSC Industrial Direct Inc. Class A Common Stock - The Plan Trustee will be
permitted to acquire, with amounts directed by Participants to be invested
in the MSC Industrial Direct Co., Inc. Stock Fund, shares of Class A
Common Stock ("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. The Plan Trustee may acquire shares of
Common Stock in a single purchase or over time, as they determine in their
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
Trustee determines that the circumstances causing the suspension have
ceased to exist. During the suspension period, the Plan Trustee will hold
all of the contributions directed to be invested in the fund in the
Merrill Lynch Retirement Preservation Trust.
The value of the MSC Industrial Direct Co., Inc. Stock Fund 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. The fair market value of the
shares of Common Stock will be equal to the closing price of the Common
Stock as reported on the principal national securities exchange on which
such shares are traded on the date of valuation.
6
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
2) ML Equity Index Trust Class A - Seeks to provide investment results that,
before expenses, replicate the total return of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500"). In seeking to replicate the total
return of the S&P 500, management generally will allocate investments
among common stocks in approximately the same weighting as the index.
Typically, most of the assets will be comprised of all, or nearly all, 500
stocks in the index in weightings closely aligned with those of the index.
3) ML Retirement Preservation Trust - Seeks to provide preservation of
capital, liquidity and current income at levels that are typically higher
than those provided by money market funds. The Trust invests primarily in
a broadly diversified portfolio of Guaranteed Investment Contracts and in
obligations of U.S. government and government-agency securities. The Trust
also invests in high-quality money market securities. Participants
purchase units that the Trust seeks to maintain at $1.00 per unit,
although this cannot be assured.
4) MFS Emerging Growth Fund - Seeks long-term growth of capital. The fund
invests primarily in small and medium-sized companies with growth rates
expected to be well above the growth rate of the overall economy and the
rate of inflation. Typically these companies are early in their life
cycles and have the potential to become major enterprises. The fund may
also invest in companies based on special factors such as new management,
new products or changes in consumer demand.
5) Davis Ser Inc. Real Estate Fund A - Seeks growth and income. The fund
normally invests at least 65% of assets in securities of companies that
are principally engaged in the real-estate industry, that own significant
real-estate assets, or that primarily invest in real-estate assets, or
that primarily invest the balance of assets in securities or other types
of companies. The fund may also invest in securities of foreign issuers.
6) ML Latin America Fund Class A - Seeks long-term capital appreciation
through investments in Latin American equity and debt securities. The
fund's objective reflects the belief that investment opportunities may
result in Latin America from an evolving longer-term international trend
encouraging greater market orientation and diminishing governmental
intervention in economic affairs. It is expected that, under normal
conditions, at least 65% of the fund's total assets will be invested in
Latin American securities. The fund may attempt to hedge against market
and currency risk through the use of options, futures, options on futures
and forward currency transactions.
7) Federated Bond Fund Class A - Seeks income consistent with preservation of
capital. The fund normally invests at least 65% of assets in
investment-grade corporate bonds, U.S. government securities, preferred
stock, convertibles and cash. It may invest up to 35% of assets in debt
rated as low as B; it may invest up to 25% in debt securities of foreign
governments.
8) ML S&P 500 Index Fund Class A - Seeks to match the performance of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") as
closely as possible before the deduction of Fund expenses. The Fund
invests in the common stocks represented in the S&P 500 in roughly the
same proportions as their weightings in the S&P 500. The Fund may also
invest in derivative instruments linked to the S&P 500. At times the Fund
may not invest in all of the common stocks in the S&P 500 or, in the same
weightings as the S&P 500. At those times, the Fund chooses instruments so
that the market capitalization, industry weighting and other fundamental
characteristics of the stocks and derivative instruments chosen are
similar to the S&P as a whole. The Fund may also engage in securities
lending.
9) AIM International Equity Fund Class A - Seeks long-term growth of capital
by investing in a diversified portfolio of international equity
securities. The fund will invest at least 70% of its total assets in
marketable equity securities. It may also invest up to 20% of its total
assets in securities that are convertible into equity securities of
foreign companies which are listed on a recognized foreign securities
exchange or traded on a foreign over-the-counter market. The fund's assets
will be invested in the securities of foreign companies located in at
least four countries outside the United States. It will emphasize
investment in foreign companies in the developed countries of Western
Europe and the Pacific Basin and may also invest to a limited extent in
the securities of companies located in developing countries in various
regions of the world.
7
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
10) Alliance Corporate Bond Fund Class A - Seeks income; capital appreciation
is secondary. The fund normally invests at least 65% of assets in
investment-grade debt securities. It may hold corporate bonds,
convertibles, U.S. government obligations and dollar-denominated foreign
debt.
11) Seligman Communication and Information Fund Class A - Seeks capital
appreciation. The fund normally invests at least 80% of assets in common
stocks issued by companies that operate in the communication, information
and related industries. It invests in large, established media
corporations, as well as in smaller companies with rapidly changing
technologies and expansion characteristics. The fund may invest up to 10%
of assets in foreign securities; this restriction does not apply to
depository receipts.
12) Oppenheimer Global Fund - Seeks capital appreciation. The fund invests
primarily in common stocks and convertible securities issued by U.S. and
foreign companies. It ordinarily maintains investments in at least three
countries. The fund may invest in securities of companies in cyclical
industries and special situations.
13) Alliance Quasar Fund Class A - Seeks growth of capital. The fund follows
aggressive investment policies and invests primarily in equity securities.
It may invest in new or established, listed or unlisted, and foreign or
domestic securities. The fund may engage in short sales and other
derivatives transactions.
14) ML Eurofund Class A - Seeks capital appreciation through investment
primarily in equities of corporations domiciled in Europe. The fund
expects that, under normal market conditions, at least 80% of the fund's
net assets will be invested in European corporate securities, primarily in
common stocks, debt and preferred securities convertible into common
stocks. Investments in foreign securities involve special risks, including
foreign currency risk and the possibility of substantial volatility due to
adverse political, economic or other developments.
15) ML Growth Fund Class A - Seeks growth of capital and, secondarily, income
through a diversified portfolio of primarily equity securities, with
principal emphasis on issues believed by fund management to be
undervalued. The fund invests in securities that many investors consider
to be out-of-favor, but which fund management believes may have underlying
value that is not immediately apparent. In selecting securities believed
to be undervalued, the fund emphasizes securities of issuers with a market
capitalization of $500 million or greater, but the fund also has the
flexibility to invest in issues of smaller-capitalization companies with
similar value characteristics. The fund may invest up to 40% of its total
assets in foreign securities.
16) ML Global Allocation Fund Class A - Seeks high total investment return
consistent with prudent risk. The fund has a fully managed investment
policy utilizing U.S. and foreign equity, debt and money market
securities, the combination of which will be varied from time to time,
both with respect to types of securities and markets, in response to
changing market and economic trends. This investment approach provides the
fund with the opportunity to benefit from anticipated shifts in the
relative performance of different types of securities and different
capital markets. The fund may invest up to 35% of its total assets in
non-investment-grade debt securities (high-yield or "junk" bonds.)
17) ML Developing Capital Markets Fund Class A - Seeks long-term capital
appreciation by investing in securities, primarily equities, of issuers in
countries having smaller capital markets. It is currently expected that,
under normal conditions, at least 65% of the fund's net assets will be
invested in equity securities. The fund may employ a variety of
investments and techniques to hedge against market and currency risk,
including options, futures, options on futures and forward currency
transactions.
18) AIM Equity Constellation Fund - Seeks capital appreciation. To work toward
this goal, the fund invests in small-to-medium-sized emerging growth
companies. Fund management will be particularly interested in companies
that are likely to benefit from new or innovative products, services or
processes that should enhance such companies' prospects for future growth
in earnings. The market prices of many of the securities purchased and
held by the fund may fluctuate widely.
8
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
19) MFS Mass. Investors Trust Class A - Seeks current income and long-term
growth of capital and income. The fund invests primarily in common stocks
and convertibles. It may invest up to 35% of assets in foreign securities;
this limit does not apply to American Depositary Receipts. The fund may
invest a portion of the assets in debt securities and cash equivalents. It
may invest up to 15% of assets in liquid securities.
20) MFS Research Fund - Seeks long-term growth of capital and future income.
The fund primarily invests in common stocks and convertible securities. It
may also invest in fixed-income securities; it may not invest more than
10% of assets in securities rated below investment-grade. The Fund may
invest up to 20% of assets directly in foreign securities; it may also
invest in American Depository Receipts.
21) ML Capital Fund Class A - Seeks the highest total investment return
consistent with prudent risk primarily through a fully managed investment
policy that permits management of the fund to vary investment in equity,
debt and convertible securities based on its evaluation of changes in
economic and market trends. The fund invests in high-quality stocks,
corporate bonds and cash equivalents, and may invest up to 25% of its
assets in foreign securities.
22) ML Corporate Bond High Income Fund Class A - Seeks a high level of current
income consistent with the investment policies of the portfolio and with
prudent investment management. As a secondary objective the fund seeks
capital appreciation, when consistent with its primary objective. The fund
invests substantially all of its assets in fixed-income securities that
are rated in the lower rating categories of the established rating
services or in unrated securities of comparable quality.
23) ML Pacific Fund Class A - The fund seeks long-term capital appreciation by
investing primarily in the equities of companies in the Far Eastern and
Western Pacific countries, including Japan, Australia, Hong Kong and
Singapore. The Pacific Basin is one of the most rapidly growing regions in
the world, and its stock markets have often reflected that growth. The
fund is designed for investors who want to achieve diversification by
investing in economies of Far Eastern and Western Pacific countries. To
hedge the fund's portfolio against market and currency risk, fund
management may employ strategies that include the use of currency options
and futures, options on such futures and forward foreign-currency
transactions. Such strategies involve special risks and there can be no
assurance that they will be successful.
24) Davis New York Venture Fund Class A - Seeks growth of capital. To work
toward this goal, the fund normally invests in common stocks and
convertible securities that management believes to have above-average
appreciation potential. The fund may also invest up to 10% of its assets
in securities of foreign issuers and up to 10% of its assets in restricted
securities.
5. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company, by a
letter dated March 27, 1997, that the Plan and the related trust are designed in
accordance with the applicable sections of the Internal Revenue Code (the
"Code"). The Company believes that the Plan is currently designed and being
operated in compliance with all sections of the Code for the year ended December
31, 1999.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan at any time, subject to the provisions of ERISA.
7. REPORTABLE TRANSACTIONS
Reportable transactions represent either (i) a single transaction or (ii) a
series of transactions involving a specific investment which are individually or
in the aggregate in excess of 5% of the current value of Plan assets at the
beginning of a Plan year. These transactions are listed in the Schedule of
Reportable Transactions.
9
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
FORM 5500 -- ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Identity of Issuer Description Cost Current Value
------------------ --------------------------------------------------- -------------- -------------
<S> <C> <C> <C>
Merrill Lynch * MSC Industrial Direct Inc. Class A Common Stock $ 1,972,034 $ 1,581,545
Merrill Lynch * ML Equity Index Trust Class A 4,669,734 6,199,416
Merrill Lynch * ML Retirement Preservation Trust 4,462,315 4,462,315
Merrill Lynch * MFS Emerging Growth Fund Class A 908,086 1,252,272
Merrill Lynch * Davis Ser Inc Real Estate Fund A 2,882 2,444
Merrill Lynch * ML Latin America Fund Class A 40,793 47,725
Merrill Lynch * Federated Bond Fund Class A 2,348,238 2,136,072
Merrill Lynch * Merrill Lynch S&P 500 Index Fund 619,221 696,046
Merrill Lynch * AIM International Equity Fund Class A 229,271 319,822
Merrill Lynch * Alliance Corporate Bond Fund Class A 40,403 38,029
Merrill Lynch * Seligman Communication and Information Fund Class A 1,599,175 2,036,767
Merrill Lynch * Oppenheimer Global Fund 2,515,969 3,450,471
Merrill Lynch * Alliance Quasar Fund Class A 357,037 405,986
Merrill Lynch * ML Eurofund Class A 127,925 114,845
Merrill Lynch * ML Growth Fund Class A 5,364,640 5,664,121
Merrill Lynch * ML Global Allocation Fund Class A 174,725 174,196
Merrill Lynch * ML Developing Capital Markets Fund Class A 18,018 24,360
Merrill Lynch * AIM Equity Constellation Fund 458,144 542,276
Merrill Lynch * MFS Mass. Investors Trust Class A 1,944,510 2,020,736
Merrill Lynch * MFS Research Fund 135,687 154,428
Merrill Lynch * ML Capital Fund Class A 2,566,181 2,378,515
Merrill Lynch * ML Corporate Bond High Income Fund Class A 88,700 84,263
Merrill Lynch * ML Pacific Fund Class A 85,581 114,056
Merrill Lynch * Davis New York Venture Fund Class A 479,880 533,828
Merrill Lynch * Cash Fund/CMA Money Fund N/A 29,811
Participant Loans * A commercial bank's fixed rate mortgage
(7.5% - 9.5% for 1999) N/A 1,621,726
-----------
$36,086,071
===========
</TABLE>
* Parties-in-interest
This schedule should be read in conjunction with the accompanying financial
statements and notes thereto.
10
<PAGE>
SID TOOL SAVINGS PLAN
PLAN NUMBER: 003
PLAN EIN: 13-5526506
FORM 5500 -- ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Current
Value of
Asset on
Identity of Party Involved Purchase Selling Cost Transaction Net Gain
and Description of Assets Units Price Price of Asset Date or (Loss)
------------------------------------------ ---------- ----------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
ML Equity Index Trust Class A Common Stock 23,929 $2,194,091 $ -- $2,194,091 $2,194,091 $ --
ML Retirement Preservation Trust 3,659,661 3,659,663 -- 3,659,663 3,659,663 --
Federated Bond Fund Class A 134,684 1,273,387 -- 1,273,387 1,273,387 --
ML S&P 500 Index Fund Class A 95,166 1,510,965 -- 1,510,965 1,510,965 --
Seligman Comm. & Info. Fund
Class A 52,647 2,061,495 -- 2,061,495 2,061,495 --
Oppenheimer Global Fund 25,316 1,284,208 -- 1,284,208 1,284,208 --
ML Growth Fund Class A 60,192 1,292,784 -- 1,292,784 1,292,784 --
MFS Mass. Investors Trust Class A 87,907 1,811,189 -- 1,811,189 1,811,189 --
ML Capital Fund Class A 33,866 1,160,723 -- 1,160,723 1,160,723 --
ML Equity Index Trust Class A 14,005 -- 1,285,624 1,074,238 1,285,624 211,386
ML Retirement Preservation Trust 2,464,138 -- 2,467,370 2,467,370 2,467,370 --
ML Growth Fund Class A 58,174 -- 1,253,051 1,525,621 1,253,051 (272,570)
</TABLE>
NOTE: For the purpose of this schedule, reportable transactions include either
(i) a single transaction or (ii) a series of transactions involving a
specific investment which are individually or in the aggregate in excess
of 5% of the current value of the Plan assets at the beginning of a Plan
year.
This schedule should be read in conjunction with the accompanying financial
statements and notes thereto.
11
<PAGE>
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K, into the Company's
previously filed Registration Statement Nos. 33-98832, 333-10833, 333-31837,
333-46273, 333-48901 and 333-70293.
Arthur Andersen LLP
Melville, New York
June 27, 2000
