Lawson Products, Inc. (NASDAQ:LAWS) (“Lawson” or the "Company")
, a distributor of products and services to the MRO marketplace, today announced results for the third quarter ended September 30, 2012. As previously announced, on October 1, 2012, Michael G. DeCata became the Company’s new president and chief executive officer.
Third Quarter Results
- Operating income of $0.1 million prior to severance – an improvement of $2.8 million over the prior year
- Earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $0.6 million. Excluding severance, adjusted EBITDA of $2.0 million – an improvement of $3.6 million over the prior year
- Ongoing implementation of the Company’s previously announced $20.0 million of annualized savings resulting from restructuring initiatives
- Sales per representative per day productivity improvement of 17.9% from a year ago
Net sales for the third quarter of 2012 were $72.0 million versus $75.4 million for the third quarter of 2011. The decrease was mainly driven by an increase in the number of vacant sales territories from a year ago, one less selling day in the third quarter of 2012 compared to 2011, and lower freight revenues. Average daily sales declined 1.6% to $1.143 million in the third quarter of 2012 from $1.162 million in the second quarter of 2012 and from $1.178 million a year ago. Although the number of vacant sales territories is up from a year ago, they remained fairly constant during the third quarter. Sales force productivity improved by 17.9% from a year ago and 2.6% from the second quarter.
Gross profit for the third quarter of 2012 was $43.4 million versus $42.5 million a year ago with the gross margin percentage increasing to 60.2% for the third quarter of 2012 from 56.5% for the year-ago quarter. This increase in gross margin was primarily due to an improved focus on controlling net customer pricing and other product-related costs, as well as managing the liquidation of discontinued products better than anticipated. This was partially offset by an increase in sales to national account customers, which carry a lower margin percentage.