Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Lawson Products Inc/New — Investor Presentation (November 2011)
29 slides from Distribution Solutions's investor presentation, Nov 10, 2011
Slide 1: Investor Presentation November 2011
Investor Presentation November 2011 NASDAQ: LAWS www.lawsonproducts.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements "Safe Harbor" Statement under the Securities Litigation Reform Act of 1995:This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. The terms "may," "shoul
Slide 3: Agenda
Agenda Lawson Products at a GlanceLeadership TeamMRO Industry OverviewBuilding an Efficient Platform to Drive Future GrowthFinancial HighlightsKey Take-Aways 3
Slide 4: Lawson Products: At a Glance
Lawson Products: At a Glance 4 Company OverviewFounded in 1952 by Sid Port who had an entrepreneurial visionListed on NASDAQ (Ticker: LAWS) since 1970; majority of stock was family held)Serves industrial, commercial, institutional & government markets in all 50 U.S. states, Canada & Puerto RicoSuppl
Slide 5: Sales Coverage and Distribution Reach Across North America
5 Legend: Sales PenetrationDistribution Center Des Plaines, IL HQ/DCAddison, IL DCVernon Hills, IL DCFairfield, NJ DCReno, NV DCSuwanee, GA DCMississauga, ON (Canada) DC Lawson Products - At a Glance Sales Coverage and Distribution Reach Across North America;
Slide 6: Strong Leadership Team in Place to Drive Growth
Strong Leadership Team in Place to Drive Growth 6 Leadership TeamTom Neri, President & Chief Executive OfficerJoined in March 2003 as CFO, became CEO in 2007Senior positions in publishing, including EVP of the Sun-Times Company and President & Publisher of Pioneer Newspapers, Inc.Harry Dochelli, Chi
Slide 7: Vision, Mission, and Values Guide Lawson's Strategic Plan
Vision, Mission, and Values Guide Lawson's Strategic Plan 7
Slide 8: MRO Industry Overview: Key Trends
MRO Industry Overview: Key Trends 8 We see five key trends in the current MRO marketplace: Increased product commoditizationEasy and seamless customer / distributor interactionsIncreased pricing emphasis and transparencyHeightened demand for same day and next day deliveryMore value placed on distrib
Slide 9: MRO Industry Overview: Marketplace Dimensions
MRO Industry Overview: Marketplace Dimensions MRO customers assess their suppliers based on two critical needs "Easy to do business with"Unplanned Purchases "Improves my operating performance"Planned Purchases Degree to which suppliers make it easy to get the right products quickly, effectively and
Slide 10: Within This Market, Lawson is Uniquely Positioned for Growth
Within This Market, Lawson is Uniquely Positioned for Growth Operate in a fragmented but resilient industryCommitted to evolving Lawson to become our customers' first choice for MRO solutionsHave identified our customers' needsBuilding an efficient platform to meet those needs and drive significant
Slide 11: Lawson Has Clear Competitive Advantages & Opportunities
Lawson Has Clear Competitive Advantages & Opportunities 11 11 Strong financial position allows Lawson to gain market share
Slide 12: Customer Feedback Has Confirmed the Company's Strengths and Opportunities
Customer Feedback Has Confirmed the Company's Strengths and Opportunities 12 Lawson actively seizing these opportunitiesLeveraging our core strengths + pursuing new initiatives focused on serving market with "unplanned" product needs Current Strength 75% prefer ordering through field sales represent
Slide 13: There Are Clear Opportunities for Future Growth
There Are Clear Opportunities for Future Growth 13 Core Business Today Products for "Unplanned" Needs "Planned" Products for Inventory Management Customers with unplanned needs buy products from sales reps, phone, catalogs or the web for next-day delivery Future Opportunities Customers have the need
Slide 14: Three Strategic Initiatives Will Help Us Realize the Business Potential
Three Strategic Initiatives Will Help Us Realize the Business Potential 14 14 ERP Implementation Network Optimization Sales Transformation Through these initiatives, we will deliver an enhanced customer experience, support sales growth and improve operating performance
Slide 15: ERP Transformation: Building an Efficient Platform to Drive Future Growth
ERP Transformation: Building an Efficient Platform to Drive Future Growth ERP Transformation 15 Timing Key Benefits Costs/Savings Significant implementation took place in Q3, 2011. Now running business on SAP.2012 = benefit year Facilitates easier ordering Enables improved customer servicing Consist
Slide 16: Network Optimization: Building an Efficient Platform to Drive Future Growth
Network Optimization: Building an Efficient Platform to Drive Future Growth Network Optimization 16 Timing Key Benefits Costs/Savings Ongoing initiative Reduces overall fixed-cost baseDrives efficiencies in inventory and materials handlingEnsures presence in the best locations for costs and efficien
Slide 17: Network Optimization - Same-Day Shipping & Next-Day Delivery
Network Optimization: Building an Efficient Platform to Drive Future Growth 17 Our research tells us between 10-13% of our current customers' MRO spend comes from "unplanned" and/or on-demand buyingProviding same-day shipping & next-day delivery ensures LAWS can capture a greater share of this marke
Slide 18: Sales Transformation is Comprised of Two Key Strategies
Sales Transformation is Comprised of Two Key Strategies 18 18 Channel Strategy Segment Strategy
Slide 19: Sales Transformation: Channel Strategy: Agent to Employee Transition
Sales Transformation: Building an Efficient Platform to Drive Future Growth Improve Customer ExperienceImprove executionMeet changing customer expectationsGrow Sales Increase sales effectivenessRealize leverage in our modelAchieve sustainable resultsAttract and retain talent for long-term growthRedu
Slide 20: Sales Transformation: Channel Strategy: eCommerce Presence
Sales Transformation: Building an Efficient Platform to Drive Future Growth New eCommerce Website launches in first half, 2012Creates a new sales channelCaptures new types of sales and customersAccommodates customers' unplanned purchasing needsBoosts sales productivity: Provides channel for smaller
Slide 21: Sales Transformation: Segment Strategy
Sales Transformation: Building an Efficient Platform to Drive Future Growth 21 Opportunity to generate significant value by developing specialized segment strategies where Lawson is already strong, including:Strategic AccountsGovernmentAutomotiveSegmentation in areas where Lawson already has strong
Slide 22: Business Transformation Summary
Business Transformation Summary Lawson's business transformation is aligned with the Company's vision, mission and values; key characteristics underscore our plan:Leverages current assets and base business, not acquisitions.Re-positions Company to be more competitive in a changing environment, expan
Slide 23: Financial Highlights
Financial Highlights Growing Average Daily Sales (ADS) with diverse revenue streamsADS of $1,268,000 YTD Sept. 30, 2011 vs. $1,240,000 YTD Sept. 30, 2010 Improving average order size and daily orders per agent2011 impacted by significant investments for future growthQ3 impacted by cut-over to new ER
Slide 24: Financial Highlights - Income Statement
Financial Highlights - Income Statement 24
Slide 25: Financial Highlights - Balance Sheet
Financial Highlights - Balance Sheet 25
Slide 26: Key Take-Aways and Financial Considerations
Key Take-Aways and Financial Considerations 26 Consistent growth in average daily sales with enhanced relationships with existing customersStrong balance sheet, margins & cash resources enable significant investment in growthBuilding the right platform to support future growth with a researched base
Slide 27: Questions?
i Sl ial & Questions? C
Slide 28: Appendix
4 g| a A P. pend: ix C
Slide 29: Appendix: Financial Highlights - Year Income Statement
Appendix: Financial Highlights - 5 Year Income Statement 29
Lawson Products Inc/New — Investor Presentation (November 2011) on 6ix