Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Lawson Products — Investor Presentation (May 2017)
17 slides from Distribution Solutions's investor presentation, May 2017
Slide 1: Investor Presentation May 2017
Investor Presentation May 2017 © 2015 Lawson Products, Inc. • Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 2: Safe Harbor Statement
Lawson Products, Inc. "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,” “should,”
Slide 3: Lawson Products: At a Glance
Lawson Products: At a Glance • Leading service based provider of consumables in MRO market • Serves industrial, commercial, institutional and government markets in all 50 states, Canada, Mexico, Puerto Rico and the Caribbean • Headquartered in Chicago, IL – Strategically located distribution centers
Slide 4: Competitive Advantages and Differentiators
Competitive Advantages and Differentiators “Not the Typical MRO Distributor” What differentiates Lawson: • Service intensive “high touch” value proposition • Vendor managed inventory or “keep fill” • Deep product knowledge • Broad geographic sales and service coverage throughout the US and Canada •
Slide 5: Our Commitment to our 70,000 Customers
Our Commitment to our 70,000 Customers High touch service and technical expertise drives customer relationships Before After One Company, Zero Headaches Inventory Management Options Access to Industry Knowledge & Expertise • Comprehensive line of products • Lawson Managed Inventory • Product recomme
Slide 6: Customer and Product Profile
Customer and Product Profile Customer Mix Product Mix Aftermarket Automotive Supplies 10% Electrical 12% Safety Kent Automotive Strategic 4% 19% 12% Cutting Tools and Welding and Abrasives Metal Repair Government 14% 2% 10% Other 8% Other (1) Specialty 3% Chemicals 14% Fastening Regional Accounts Sy
Slide 7: Lawson Growth Strategy
Lawson Growth Strategy Sales Growth Driven By Add New Drive Sales Acquisitions Sales Rep Reps Productivity Foundational Support ERP Network Sales Lean Six Website Optimization Transformation Sigma © 2015 Lawson Products, Inc. • Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 8: 2017 Focus: Actions Across the Value Chain Driving Growth
2017 Focus: Actions Across the Value Chain Driving Growth Add New Sales Reps and Drive Rep Productivity Customer Product Sales Process / Sourcing / Service / Order Management / DC Operations Sales Reps Purchasing Entry Pricing • Increase sales rep • Reduction of • Leverage vendor • Reduce cycle time
Slide 9: Longer Sales Rep Tenure Drives Rep Productivity
Longer Sales Rep Tenure Drives Rep Productivity 400 $450,000 350 $400,000 Average Annual Sales in Thousands $350,000 300 Number of Sales Reps $300,000 250 $250,000 200 $200,000 150 $150,000 100 $100,000 50 $50,000 0 $0 < 12 Mos. 1 - 2 Yrs. 3 - 5 Yrs. 5 - 10 Yrs. > 10 Yrs. Tenure with Lawson (as of 3
Slide 10: Financial Highlights for First Quarter 2017
Financial Highlights for First Quarter 2017 • Sales increased 7.0% YOY • Strong gross margins – Consistently over 60% • Adjusted EBITDA margin improving 3.8% in Q1 2017 v. 3.4% in Q1 2016 and 3.1% in Q4 2016 Continued investment in new sales reps Cost control measures in place • Continued expa
Slide 11: Lawson Products: Poised for Growth
Lawson Products: Poised for Growth • Foundational Investments Completed • Operational Excellence • Leverage Current Infrastructure • Continued Sales Force Expansion • Large Fragmented Market © 2015 Lawson Products, Inc. • Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 12: For More Information
For More Information Contact: Ronald J. Knutson EVP, CFO Investor Relations (773) 304-5665 ron.knutson@lawsonproducts.com And see our Website at http://www.lawsonproducts.com/company-info/investor-relations.jsp © 2015 Lawson Products, Inc. • Confidential Material, Reproduction, In Whole or in Part,
Slide 13: Appendices
Appendices © 2015 Lawson Products, Inc. • Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 14: Significant Activities
Significant Activities Appendix P-1 August 2011 Implemented SAP October 2011 Commenced construction of new McCook, Ill distribution center May 2012 Relocated corporate headquarters June 2012 Restructured senior team. Announced $20M cost savings plan Transitioned packaging facility to McCook, Il
Slide 15: Regulation G – GAAP Reconciliation
Regulation G – GAAP Reconciliation Appendix P-2 Non GAAP Reconciliation of Adjusted EBITDA to Sales Percentage The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company's management believes that certain non-GAAP financial
Slide 16: Quarterly Results
Quarterly Results Appendix P-3 (Dollars in thousands) Three Months Ended Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, 2017 2016 2016 2016 2016 Number of business days 64 60 64 64 64 Average daily net sales $ 1,166 $ 1,122 $ 1,097 $ 1,084 $ 1,089 Sequential quarter increase (decrease) 3.9% 2.3 % 1.2
Slide 17: Consolidated Balance Sheet
Consolidated Balance Sheet Appendix P-4 March 31, December 31, 2017 2016 ASSETS Current assets: Cash and cash equivalents $ 7,973 $ 10,421 Restricted cash 800 800 Accounts receivable, less allowance for doubtful accounts 34,016 30,200 Inventories, net 43,231 42,561 Property held for sale 707 — Misce