MRO products distributor Lawson Products reported its 2020 fourth quarter and full-year financial results on Thursday, showing that while 2020 was a down year amid the pandemic — like for the vast majority of industrial distributors — the company had a strong rebound in Q4.
Chicago-based Lawson — No. 31 on Industrial Distribution’s Big 50 List — reported full-year sales of $352 million, down 5.2 percent from 2019, with average daily net sales were down 5.5 percent. The company had a 2020 operating profit of $21 million, more than double 2019's $9.1 million, while adjusted operating profit of $27 million was down 4.1 percent. Lawson had a 2020 net profit of $15 million, more than double 2019's $7 million.
In Q4, Lawson's sales of $98 million were up 8.6 from Q3 and up 10.8 percent year-over-year, with average daily net sales up by that same amount year-over-year. Q4 operating loss of $0.7 million was down sequentially from $2 million in Q3 but improved from a $4.5 million loss a year earlier, while adjusted operating profit of $6.9 million was closer to the $7.7 million it had in Q3 and improved from $5.8 million a year earlier.
Lawson said the healthy Q4 sales improvement was helped by a full quarter's contribution from the company's $35 million Partsmaster acquisition it completed in Q3, which also helped profitability. As Lawson's biggest bolt-on acquisition in five years, Partsmaster contributed $17.2 million in Q4 sales.
Q4 gross profit margin improved 20 basis points year-over-year to 43.1 percent.
Lawson said it's 2020 capital expenditures totaled $1.7 million, primarily used for improvements to distribution centers and information technology.
Lawson Products president and CEO Michael DeCata said Thursday that the company has been able to recover organic daily sales by 38 percent over April's levels amid the height of impacts from the COVID-19 pandemic. Sequentially, average daily sales jumped 14.0 percent in Q4 compared to Q3, driven by Partsmaster. Excluding that acquisition, average daily sales improved slightly from Q3, reflecting increases in most product categories, offset by less sales of lower margin PPE products.
“Reflecting on last year’s results, I am encouraged by our performance during the most difficult business environment we have ever encountered," said Michael DeCata, Lawson president and CEO. "We were able to ensure the safety of our team while providing outstanding service to our customers at the standards they have come to expect. By adjusting our cost structure for the effect of the pandemic to protect our profitability and cash flows, we are well-positioned entering 2021."