Chicago-based MRO products distributor Lawson Products — No. 38 on ID's Big 50 List — reported its Q2 results on Thursday, led by continued total and organic sales growth, and at a faster rate than Q1.
The company posted total Q2 sales of $75 million, up 8.2 percent year-over-year and up 6.9 percent organically. Those figures outpace Q1's total sales growth of 7.0 percent and organic growth of 5.0 percent.
Total Q2 profit of $7.3 million was a healthy increase from $0.2 million a year earlier and $0.9 million in Q1. Q2 operating profit of $7.9 million compared with break-even profit a year earlier and $0.7 million in Q1. Q2 gross profit of $45.1 million was up from $42.5 million a year earlier. The company's Q2 operating expenses decreased 12.4 percent year-over-year.
"Over the past several quarters, we have seen an uptick in our average daily sales and productivity of our reps," Lawson CEO Michael DeCata said. "There were sales increases across all customer categories including regional, large national, Kent Automotive and government. Growth in our large national accounts was driven primarily by our success in converting additional locations and customer account expansion."
Sales per Lawson rep per day increased 1.4 percent from sequentially, following a 5.7 percent jump from Q4 to Q1.
Lawson's Q2 operating profit benefited from a $5.4 million gain from the sale of its discontinued Fairfield, NJ distribution center.
"Our service intensive value proposition and sales reps’ deep product knowledge distinguishes us among MRO distributors and are helping to drive growth and expand our customer base. It's rewarding to see that our previous investments in our sales force and deliberate actions taken to improve sales rep productivity are having a positive impact on our performance. Our improving results, combined with an expanding industrial economy, makes us optimistic that these trends will continue,” DeCata said.
The company said it had $11.1 million in available cash as of June 30.
“All of our 2016 acquisitions have been integrated and we are beginning to benefit from the increased sales and additional operating leverage," DeCata added. "We remain committed to our plan and will continue to invest in the development of our sales reps as well as pursue additional acquisitions."