Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Lawson Products — Q3 2021 Earnings Presentation
19 slides from Distribution Solutions's earnings presentation, 2021
Slide 1: Investor Presentation Third Quarter 2021
Investor Presentation Third Quarter 2021 Presenters: Michael DeCata, President & CEO Ronald Knutson, EVP & CFO © 2021 Lawson Products, Inc. All rights reserved. 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 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 • Leverage investments in sales team
Slide 5: Our Commitment to our 90,000+ Customers
Our Commitment to our 90,000+ 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 recomm
Slide 6: Customer and Product Profile
Customer and Product Profile Customer Mix Product Mix Safety Aftermarket 5% Bolt Supply Welding and Automotive 11% Government Metal Repair Electrical Supplies 8% 2% 10% 7% Kent Automotive Specialy 15% Chemicals Other Partsmaster 10% 16% 14% Cutting Tools Strategic Other and Abrasives 13% 2% 14% Fast
Slide 7: Partsmaster Acquisition
Partsmaster Acquisition What adds to • Very good strategic fit • Key statistics Similar high touch, consumable MRO • $63 million annual sales provider • 16,000 customers High quality VMI service to customers • 200 sales reps in US and Canada Diverse, complimentary product • 40,000 SKUs portfol
Slide 8: Financial Highlights for Third Quarter 2021
Financial Highlights for Third Quarter 2021 • Sales increased 16.9% compared to • Key trends Q3 2021 Ended quarter in a net borrowing • Includes $13.6 million from position of $3.4 million Partsmaster acquisition compared to Ended quarter with $87.4 million in $5.4 million in one-month post- ava
Slide 9: Historical Financial Performance
Historical Financial Performance Recent sales growth and earnings expansion providing financial flexibility Consolidated Revenues Adjusted Reg G EBITDA $450,000 $40,000 $400,000 $30,000 $350,000 $20,000 $300,000 $10,000 $250,000 $200,000 $0 2015 2016 2017 2018 2019 2020 TTM 2015 2016 2017 2018 2019
Slide 10: Capital Allocation Priorities
Capital Allocation Priorities Maintain Strong • $3.4 million net borrowing position at the end of Q3; $87.4 million of available Balance Sheet borrowing capacity under our credit agreement • Paid $33.0 million in May 2021 for Partsmaster acquisition • Increased our borrowing capacity to $100.0 milli
Slide 11: Lawson Growth Strategy
Lawson Growth Strategy Sales Growth Driven By New Sales Sales Rep Acquisitions Reps Productivity Foundational Support ERP Network Sales Lean Six Website Optimization Transformation Sigma 11 © 2021 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Pr
Slide 12: 2021 Focus: Actions Across the Value Chain Driving Growth
2021 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 13: Longer Sales Rep Tenure Drives Rep Productivity
Longer Sales Rep Tenure Drives Rep Productivity 350 $500,000 $450,000 300 $400,000 250 $350,000 Number Of Sales Reps Average Annual Sales $300,000 200 $250,000 150 $200,000 100 $150,000 $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 9/30/21)
Slide 14: Lawson Products: Poised for Growth
Lawson Products: Poised for Growth • Leverage Current Infrastructure • Continued Sales Growth • Foundational Investments Completed • Operational Excellence • Large Fragmented Market 14 © 2021 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Prohibi
Slide 15: 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 15 © 2021 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction,
Slide 16: Appendices
Appendices 16 © 2021 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 17: Significant Activities
Significant Activities Appendix P-1 17 © 2021 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 18: Regulation G – GAAP Reconciliation
Appendix P-2 Regulation G – GAAP Reconciliation 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 19: Consolidated Balance Sheet
Appendix P-3 Consolidated Balance Sheet 19 © 2021 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Prohibited.