NEW YORK, July 31, 2015 /PRNewswire/ --
ACI Association has initiated research coverage on Lawson Products Inc. (NASDAQ: LAWS). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.
Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=LAWS
Highlights from our LAWS Report include:
- Decrease in Exchange Rate and Weaker Demand Impacts Sales - On July 23, 2015, Lawson Products Inc. reported net sales of $70.7 million for Q2 2015 against $72.1 million in Q2 2014. The Company has attributed this decrease to weaker Canadian dollar, weak demand from customers associated with the oil and gas industry and a general slow-down in the MRO marketplace. The Company also highlighted that demand from direct oil and gas customers declined $1.4 million from a year ago quarter; however, the same has leveled-out from the first quarter.
- Improved profitability margins - Gross profit came at $43.81 million during the quarter, almost unchanged from $43.80 million in Q2 2014. Consequently, gross margins during the quarter rose to 61.9% from 60.8% in the corresponding quarter prior year and from 61.3% in the first quarter 2015. The Company attributes this improvement largely to its continuous efforts to improved distribution efficiencies and lower purchasing costs. The Company's GAAP operating income soared to $3.2 million from $1.2 million reported in the same quarter prior year while adjusted non-GAAP operating income came in at $4.3 million compared to $2.1 million a year ago. Net income was $2.9 million, or $0.33 per diluted share as compared to $0.8 million, or $0.09 per diluted share, for the same quarter prior year.
- Cost Optimization: The Company informed that selling expenses declined to $21.9 million during the quarter from $23.0 million reported in Q2 2014 and the same as a percent of sales decreased to 31.0% from 31.8% in the corresponding period. The Company attributes this improvement in cost to reduced performance based compensation, lower commissions on lower net sales and continued cost control efforts, offset partially by higher fixed compensation of newly hired sales representatives. General and administrative expenses also decreased to $18.6 million from $19.5 million in the prior year quarter mainly due to lower performance based compensation and severance expense, and continued cost control measures.
- Management View - Michael DeCata, President and CEO stated that the Company has realized solid growth within many of strategic customer relationships while at the same time achieved continued operating metric improvements. He added, "Our gross margins, which expanded to 61.9% during the quarter, combined with our effective cost control efforts and increased productivity, yielded a significant improvement in our operating income. These improvements further demonstrate that previous changes to our infrastructure are delivering benefits. Our continued improvement in operating results re-confirms that customers value our business model. We ended the quarter with 920 sales representatives."
To find out how this influences our rating on Lawson Products Inc., read the full report in its entirely here: http://www.aciassociation.com/?c=LAWS
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