Lawson Products Continues Strong Sales and Earnings Growth in Third Quarter

Mike Hockett/Industrial Distribution

MRO product distributor Lawson Products released its third quarter 2021 financial results on October 28, showing continued significant year-over-year sales improvement, while organic sales also saw solid growth.

Chicago-based Lawson reported total third-quarter sales of $105.6 million, up 16.9% year-over-year and just behind the company’s second-quarter record of $106.5 million. Average daily net sales also increased by 16.9%.

Much of the growth was fueled by Lawson’s acquisition of Partsmaster in 2020, although organic sales were still up 8.4% excluding this addition, thanks to improved trading conditions and price developments within the Lawson MRO and The Bolt Supply House businesses. Sequentially, Lawson MRO and Bolt Supply businesses increased while Partsmaster sales declined primarily due to weak federal government business.

The company’s third quarter gross profit of $56.0 million improved from $47.2 million a year earlier and topped the second quarter’s $54.6 million. Gross margin of 53.1% in the third quarter exceeded 52.3% in the prior year and 51.3% in the second quarter.

Lawson said its organic MRO segment gross margin in the third quarter was 58.7%, essentially flat year-over-year and up from 57.2% in the second quarter, mainly due to price, product supply and trade union measures taken to offset inflationary pressures.

The company’s third-quarter operating profit of $4.6 million topped the previous year’s $3.4 million and second-quarter $3.4 million, while total net profit of $3.7 million more than doubled the $1.7 million of the previous year and topped the $2.9 million of the second quarter.

“With the Partsmaster integration 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, President and CEO of Lawson. . “During the quarter, we faced similar global supply chain issues, labor shortages and inflation that impacted many businesses. We are aggressively managing this environment and have taken steps to improve product sourcing, pricing and labor allocation to protect our margins.

Lawson ended the third quarter with 1,064 active sales reps, down 22 from the end of the second quarter and 56 year-over-year.

Lawson was No. 32 on Industrial distributionThe list of the 50 greats of 2020.