Lawson Products, Inc. (NASDAQ:LAWS) (“Lawson” or the "Company"), a distributor of products and services to the MRO marketplace, announced third quarter results today.
- Net sales of $75.4 million for the quarter
- Operating loss of $3.1 million for the quarter
- Enterprise Resource Planning (“ERP”) system conversion during the third quarter
- As of September 30, 2011 cash-on-hand was $19.3 million with no debt outstanding
- $55.0 million credit facility extended for five years with more favorable terms
“During the third quarter, we achieved a major milestone in the transformation of our business. In August 2011, we successfully went live with a major phase of our ERP system that will provide Lawson with the right platform to realize its goal of generating sustainable, profitable long-term growth,” commented Thomas Neri, president and chief executive officer. “While our third quarter financial performance was temporarily impacted by the conversion to the new ERP system, we are already seeing signs that it will provide us with the important tools to manage the business and enhance our customers’ experience,” concluded Mr. Neri.
Third Quarter 2011 Results
Net sales for the third quarter of 2011 decreased 7.6% to $75.4 million compared to $81.6 million in the prior year quarter. The third quarter was negatively impacted by two fewer selling days during the conversion to the new ERP system. Additionally, the conversion temporarily impacted the Company’s ability to timely replenish its distribution centers resulting in lower fill rates and, in some cases, untimely shipments to its customers. Average daily sales decreased from $1.243 million in July to $1.095 million in August as a result of the Company’s ERP conversion. September average daily sales of $1.206 million reflect the Company’s gradual recovery from its conversion disruption. For the quarter, national accounts were up 6.7%, or $0.4 million, while government accounts decreased by $3.2 million year-over-year primarily due to a reduction in the Company’s military orders. Average daily sales were $1.178 million in the period compared to $1.274 million in the third quarter of last year.
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