Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Lawson Products Inc/New — Investor Presentation (August 2011)
26 slides from Distribution Solutions's investor presentation, Aug 16, 2011
Slide 1: Investor Presentation August 2011
Investor Presentation August 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," "shou
Slide 3: Agenda
Agenda MRO Industry Overview Lawson Products at a Glance Leadership Team Investment Considerations Long Term Strategy will Drive Future Growth Financial Highlights Key Take-Aways 3
Slide 4: Large and highly fragmented industry
Large and highly fragmented industry North American industrial distribution market is broadly defined at +$200 billion in 2010 (1) Of these companies in the Industrial Distribution Market, Lawson ranked 28th by sales revenue in 2009 (2) 1 Rexel $16,200 12 Motion Industries $2,900 2 Wolseley $14,400
Slide 5: At a Glance: Lawson Products is Poised to Grow in the Industry
2. At a Glance: Lawson Products is Poised to Grow in the Industry 5 Company Overview Founded in 1952 by Sid Port who had an entrepreneurial vision Listed on NASDAQ (Ticker: LAWS) since 1970; majority of stock was family held) Serves industrial, commercial, institutional & government markets in all 5
Slide 6: Lawson Products - At a Glance
6 Des Plaines, IL HQ Addison, IL DC Vernon Hills, IL DC Fairfield, NJ DC Reno, NV DC Suwanee, GA DC Mississauga, ON (Canada) DC 2. Lawson Products - At a Glance
Slide 7: Lawson Products Has Delivered Sustained Growth
2. Lawson Products Has Delivered Sustained Growth Financial Highlights Growing Average Daily Sales (ADS) with diverse revenue streams ADS of $1,315 in Q2 2011 vs. $1,255 in Q2 2010 Improving Average Order Size and Daily Orders per Agent Reducing costs while investing in future growth Growing EBITDA
Slide 8: Strong Leadership Team Has a Clear Vision to Drive Growth
3. Strong Leadership Team Has a Clear Vision to Drive Growth 8 Leadership Team Tom Neri, President & Chief Executive Officer Joined in March 2003 as CFO Senior positions in publishing, including EVP of the Sun-Times Company and President & Publisher of Pioneer Newspapers, Inc. Harry Dochelli, Chief
Slide 9: Investment Considerations
4. Investment Considerations Operate in a fragmented, but resilient and growing industry The MRO market remained steady during crisis period & is now recovering Committed to evolving LAWS into a leading player by executing a strategy to achieve profitable long-term growth Have identified our core st
Slide 10: We Have Identified Our Core Strengths
4. Investment Considerations: We Have Identified Our Core Strengths 10 10 Strong financial position allows Lawson to invest in growth...
Slide 11: Extensive Customer Research Confirms Strengths and Opportunities
4. Investment Considerations: Extensive Customer Research Confirms Strengths and Opportunities 11 Lawson actively seizing these opportunities Leveraging our core business + pursuing new initiatives focused on serving market with "unplanned" product needs *September 2010 survey of 240 MRO customers C
Slide 12: There are Clear Opportunities for Future Growth
4. Investment Considerations: There are Clear Opportunities for Future Growth 12 Core Business Today Products for "Unplanned" Needs "Planned" Products for Inventory Management Customers with unplanned needs buy products from sales reps, catalogs or the web for next-day delivery Future Opportunities
Slide 13: Three Strategic Initiatives Will Help Us Realize Business Potential
5: Driving Future Growth Three Strategic Initiatives Will Help Us Realize Business Potential 13 13 ERP Implementation Network Optimization Sales Transformation Through these initiatives, we will deliver an enhanced customer experience, support sales growth and improve operating performance
Slide 14: ERP Initiative
5. Driving Future Growth ERP Initiative ERP Transformation 14 Timing Key Benefits Costs/Savings Successful Phase 1 implementation completed: August 2011 Smaller Phase 2 slated for 2012 Expect to realize ongoing benefits beginning in 2012 Facilitates easier ordering Enables improved customer servicin
Slide 15: Network Optimization
5. Driving Future Growth Network Optimization 15 Currently own 5 distribution centers (DCs) in the US and 1 in Canada - consolidated 2 DCs in 2009 Plan to optimize distribution system in order to ensure we: Are present in the best locations from a cost & delivery POV (i.e. capture "unplanned") Manag
Slide 16: Sales Transformation - eCommerce
16 5. Driving Future Growth Sales Transformation 88% of our customers want to order over the web Timing Key Benefits Costs/Savings Launching of a new eCommerce website in early 2012 Creates a new sales channel Supports existing field sales channel Enables LAWS to capture new types of sales & custome
Slide 17: Sales Transformation - Same-Day Shipping & Next-Day Delivery
5. Driving Future Growth Sales Transformation 17 Between 10-13% of sales in MRO industry come from "unplanned" and/or on-demand buying Providing same-day shipping & next-day delivery ensures LAWS can capture a greater share of this market Same-day shipping currently being rolled out in stages (web,
Slide 18: Sales Transformation - Segment Strategy
5. Driving Future Growth Sales Transformation 18 Opportunity to generate significant value by developing specialized segments where LAWS is already strong, including: Government Automotive Strategic Accounts Segmentation in areas where LAWS already has strong penetration will enable the Company to:
Slide 19: Build or Buy Strategy
5. Driving Future Growth 19 In addition to driving organic growth through building an enhanced platform, LAWS will also consider complementary M&A and partnership opportunities The parameters for such investments: Support targeted end-market segment(s) - AND - Provide positive cash flows (i.e. not a
Slide 20: Financial Highlights - Income Statement
6. Financial Highlights - Income Statement 20
Slide 21: Financial Highlights - Balance Sheet
6. Financial Highlights - Balance Sheet 21
Slide 22: Our Vision, Mission, and Values Guide our Strategic Plan
7. Key Takeaways Our Vision, Mission, and Values Guide our Strategic Plan
Slide 23: Key Take-Aways
7. Key Take-Aways 23 Consistent growth in average daily sales with enhanced relationships with existing customers Strong balance sheet, margins & cash resources enable significant investment in growth Building the right platform to support future growth Experienced leadership team with track record
Slide 24: Questions?
oa & Questions? C
Slide 25: Appendix
Appendix
Slide 26: Appendix: Financial Highlights - Year Income Statement
Appendix: Financial Highlights - 5 Year Income Statement 26
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