Lawson Products Announces Second Quarter 2018 Results

20.5% Sales Increase Drives Strong Performance

CHICAGO, July 26, 2018 - Lawson Products, Inc. (NASDAQ: LAWS) (Lawson or the "Company"), a distributor of products and services to the MRO marketplace, today announced results for the second quarter ended June 30, 2018.
 

Highlights

Total sales of $90.4 million, up 20.5%. Average daily sales ("ADS") increased to $1.412 million during the second quarter of 2018 compared to $1.172 million in the second quarter of 2017 and increased 5.3% sequentially over the first quarter

Organic Lawson segment ADS, excluding The Bolt Supply House ("Bolt Supply"), increased 7.5% compared to the prior year quarter driven by the sixth consecutive quarterly increase in sales rep productivity which increased 9.1% for the quarter

Bolt Supply, which was acquired in October of 2017, added $9.8 million of sales and $0.9 million of adjusted EBITDA in the second quarter 2018 (see reconciliation in Table 2), in line with the Company's expectations

Operating income was $5.6 million compared to $7.9 million in the second quarter of 2017 which included a $5.4 million non-recurring gain on the sale of a facility. Non-GAAP adjusted EBITDA was $7.7 million compared to $4.5 million a year ago, up 71%. The Lawson segment adjusted EBITDA was $6.8 million, up 50% over the year ago quarter (see reconciliation in Table 2)

Borrowings, net of cash, ended at $10.1 million representing a decline of $3.5 million during the quarter


"Demand for our value-added MRO services remained robust in the second quarter as evidenced by the increase in our average daily sales. The 20.5% sales increase was largely driven by improved Lawson sales rep productivity as well as the inclusion of Bolt Supply. The 43% growth in our adjusted EBITDA percentage, which is over twice the sales gain, demonstrates the strengthening of our business and our ability to leverage our existing infrastructure," said Michael DeCata, president and chief executive officer. "Additionally, we increased our Lawson segment gross profit to 60.4% prior to the selling expense reclassification while driving adjusted EBITDA as a percent of sales to 8.6% from 6.0% a year ago."


Second Quarter Results

Net sales increased 20.5% to $90.4 million for the second quarter of 2018 compared to $75.0 million in 2017. Both quarters had 64 selling days. Average daily sales grew to $1.412 million compared to $1.172 million in the previous year quarter. Sales were positively impacted by $9.8 million from the inclusion of the Bolt Supply acquisition completed in the beginning of the fourth quarter of 2017 and a 9.1% improvement in Lawson's sales per rep per day productivity compared to the second quarter 2017.
 


The following information was filed by Lawson Products Incde (LAWS) on Thursday, July 26, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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