CHICAGO, Jul 24, 2014 (BUSINESS WIRE) -- Lawson Products, Inc. has announced results for the second quarter ended June 30, 2014.
Highlights:
Net sales increased for the fourth consecutive quarter, up 5.5% to $72.1 million in the second quarter of 2014. Average daily sales increased 2.6% over the first quarter of 2014 in addition to the 1.9% from the first quarter over the fourth quarter of 2013.
Operating income was $1.2 million in the second quarter of 2014 compared to an operating loss of $0.2 million a year ago and an operating loss of $4.7 million in the first quarter of 2014. Excluding non-recurring items, adjusted operating income improved $2.2 million over the year ago quarter and $2.0 million over the first quarter of 2014.
Outstanding debt at the end of the second quarter was $2.4 million, a decrease of $9.2 million from the first quarter of 2014 and a decline of $20.8 million from the second quarter of 2013.
The second quarter finished with 878 sales representatives, a net increase of 42 during the quarter and in line with the planned 15%-20% increase for the year.
"Our second quarter results demonstrate how the initiatives we’ve undertaken over the past few years are positively impacting our performance,” said Michael DeCata, president and chief executive officer. “The combination of our upward sales trend and benefits from investments in our operations and sales organization are beginning to deliver the desired results. With the addition of 42 direct sales reps in the second quarter, we remain on pace to grow our sales team by 15% to 20% percent this year.
“During the quarter, we also completed the sale and partial-leaseback of our Reno, Nevada, distribution center. By consolidating our operations at that location we were able to reduce our debt and strengthen our balance sheet.”
Second Quarter Results:
Net sales for the second quarter of 2014 were $72.1 million versus $68.3 million for the second quarter of 2013. Both 2014 and 2013 had 64 selling days. Average daily sales increased 5.5% to $1.126 million in the second quarter of 2014 from $1.067 million a year earlier, and also increased 2.6% over the $1.098 million reported in the first quarter of 2014. The sales increase was driven by improved productivity of existing sales reps and sales produced by reps hired in the past year.
We anticipate a temporary decline in average sales per sales representative per day, as newly added sales representatives build up customer relationships and sales volume in their territories. This was reflected in the decline of sales per sales representative per day to $1,319 in the second quarter of 2014 compared to $1,397 in the second quarter of 2013 and $1,341 for the first quarter of 2014.
Gross profit for the period as a percentage of sales improved to 60.8%, compared to 59.5% in the second quarter of 2013, primarily due to lower outbound freight expense and improved distribution center efficiencies.
“Going forward we will continue to focus on our key objectives: improving volume from existing sales reps, while continuing to add new sales reps; maintaining high customer service levels; remaining disciplined as we reinvest in the business; and effectively managing our expenses,” stated Mr. DeCata.
