MRO products distributor Lawson Products reported its 2021 third quarter financial results on Oct. 28, showing continued significant improvement in year-over-year sales, while organic sales also had solid growth.
Chicago-based Lawson reported Q3 total sales of $105.6 million, up 16.9 percent year-over-year and narrowly trailing Q2's company record $106.5 million. Average daily net sales likewise grew 16.9 percent.
Much of the growth was powered by Lawson's 2020 acquisition of Partsmaster, though organic sales were still up 8.4 percent when not including that addition — driven by improved business conditions and price actions within the Lawson MRO and The Bolt Supply House businesses. Sequentially, Lawson MRO and Bolt Supply business grew while Partsmaster sales declined primarily due to weakness in federal government business.
The company's Q3 gross profit of $56.0 million improved from $47.2 million of a year earlier and topped Q2's $54.6 million. Q3's gross margin of 53.1 percent topped the 52.3 percent of a year earlier and the 51.3 percent in Q2.
Lawson said its Q3 organic MRO segment gross margin was 58.7 percent, essentially flat year-over-year and up from 57.2 percent in Q2, primarily driven by the pricing, product sourcing and labor actions taken to offset inflationary pressures.
The company's Q3 operating profit of $4.6 million topped the $3.4 million of a year ago and Q2's $3.4 million, while total Q3 net profit of $3.7 million more than doubled the $1.7 million of a year earlier and topped Q2's $2.9 million.
"With the integration of Partsmaster largely behind us, we are now well-positioned to begin realizing the benefits of our integrated sales organization including cross-selling products and a larger sales force with greater market coverage," said Michael DeCata, Lawson president and CEO. "During the quarter, we faced similar global supply chain issues, labor shortages and inflation that impacted many businesses. We are aggressively managing through this environment and have taken actions to improve product sourcing, pricing and labor allocation to protect our margins."
Lawson ended Q3 with 1,064 active sales reps, down 22 from the end of Q2 and down 56 year-over-year.
Lawson was No. 32 on Industrial Distribution’s 2020 Big 50 List.