Menu
Posted April 30, 2015

Lawson Products sales up 1 percent

Lawson Products Inc. said its net sales increased 1.0% to $69.9 million in the first quarter of 2015, compared to $69.2 million in the first quarter a year ago.


The company reported a net loss for the quarter of $1.4 million, or 16 cents per diluted share, compared to a net loss of $3.0 million, or 34 cents, for the same period a year ago.

Adjusted operating income improved to $1.0 million in the quarter compared to $0.1 million in 2014. Lawson said it ended the first quarter with no bank debt.

"Our infrastructure investments and cost control efforts, combined with the growth in our sales force has helped us to post improved operating results in a challenging sales environment,” said Michael DeCata, president and chief executive officer. “Sales were affected by weaker demand in the energy sector and the declining exchange rate of the Canadian dollar. Nonetheless, we posted an increase in net sales during the first quarter largely due to our Kent Automotive business. Sequentially, gross margins remained stable at more than 61% and we have continued to increase our share of wallet within our customer base.

“During the first quarter, we held our North American sales meeting to further our training, education and sharing of best practices with our sales force. The last meeting of this magnitude was held in the first quarter of 2013. This is an investment that will benefit future quarters; however, we did realize the anticipated short-term sales impact to the current quarter resulting from pulling our sales force out of the field to attend this event,” DeCata added.

Selling expenses were $24.4 million in the first quarter of 2015 compared to $21.3 million in the prior year quarter. Excluding the $1.9 million cost of the North American sales meeting, selling expenses increased $1.2 million to 32.2% of sales in the quarter compared to 30.7% for the same period a year ago. This increase is predominately due to higher compensation expenses associated with the expansion of the sales force from a year ago and higher health insurance costs. 

"While headwinds within the energy sector and the weak Canadian dollar may continue, we will persist with our current growth strategy. An integral part of that strategy is high level customer service which we believe will generate improved results over time. We ended the first quarter with 917 sales reps and will add new reps in targeted markets and carefully manage the business to achieve continued growth," DeCata said.

SPONSORED ADS