Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Lawson Products — Investor Presentation (May 2018)
18 slides from Distribution Solutions's investor presentation, May 2018
Slide 1: Investor Presentation First Quarter 2018
Investor Presentation First Quarter 2018 © 2018 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 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 8% Electrical Kent Automotive 11% Safety 17% 5% Bolt Supply Cutting Tools and Strategic 10% Abrasives Welding and Metal 13% 15% Repair Government 2% Other 9% 8% Specialty Chemicals 13% Other (1) 1% Fastening System
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 7 © 2018 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in
Slide 8: 2018 Focus: Actions Across the Value Chain Driving Growth
2018 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 $500,000 $450,000 350 $400,000 300 Average Annual Sales in Thousands $350,000 Number of Sales Reps 250 $300,000 200 $250,000 $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
Slide 10: Historical Financial Performance
Historical Financial Performance Recent sales growth and earnings expansion providing financial flexibility Rep Count MRO Revenues 1,050 $350,000 1,000 950 $300,000 900 $250,000 850 800 $200,000 750 2013 2014 2015 2016 2017 TTM 3/31/18 700 2013 2014 2015 2016 2017 3/31/18 Net Cash/(Debt) Adjusted EB
Slide 11: Financial Highlights for First Quarter 2018
Financial Highlights for First Quarter 2018 • Average daily sales increased 15% YOY • Strong gross margins • Adjusted EBITDA margin improving 6.1% in Q1 2018 v. 3.8% in both Q1 2017 and Q4 2017 Continued investment in new sales reps Cost control measures in place • Continued expansion through
Slide 12: Lawson Products: Poised for Growth
Lawson Products: Poised for Growth • Foundational Investments Completed • Operational Excellence • Leverage Current Infrastructure • Continued Sales Growth • Large Fragmented Market 12 © 2018 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Prohibi
Slide 13: 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 13 © 2018 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction,
Slide 14: Appendices
Appendices 14 © 2018 Lawson Products, Inc. All rights reserved. Confidential Material, Reproduction, In Whole or in Part, Prohibited.
Slide 15: 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 16: 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 17: Quarterly Results
Quarterly Results Appendix P-3 (Dollars in thousands) Three Months Ended Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 2018 2017 2017 2017 2017 Average daily net sales $ 1,341 $ 1,322 $ 1,201 $ 1,172 $ 1,166 Year over year increase 15.0 % 17.8 % 9.5 % 8.1 % 7.1 Sequential quarter increase 1.4 % 10.1 % 2.5
Slide 18: Consolidated Balance Sheet
Consolidated Balance Sheet Appendix P-4 March 31, December 31, 2018 2017 ASSETS Current assets: Cash and cash equivalents $ 4,357 $ 4,416 Restricted cash 800 800 Accounts receivable, less allowance for doubtful accounts of $504 and $476, respectively 39,097 38,575 Inventories, net 50,589 50,928 Misc