Distribution Solutions Group, Inc. · NASDAQ:DSGR
Distribution Solutions — Lawson Products Inc/New — William Blair & Company 2010 Emerging Growth Stock Conference
25 slides from Distribution Solutions's conference presentation, Oct 5, 2010
Slide 1: William Blair & Company 2010 Emerging Growth Stock Conference
William Blair & Company 2010 Emerging Growth Stock Conference October 5, 2010 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: Introductions
Introductions Tom Neri, President and CEO Joined Lawson in March 2003 as CFO Held varying senior positions in publishing, including Executive Vice President of the Sun-Times Company and President and Publisher of Pioneer Newspapers, Inc. Harry Dochelli, Chief Operating Officer Joined Lawson in March
Slide 4: Agenda
Agenda Industry Snapshot Lawson Overview Lawson Financial Highlights Business Improvements Growth Strategies 4
Slide 5: Large and highly fragmented industry
Large and highly fragmented industry North American industrial distribution market is broadly defined at +$200 billion for 2009 made up of +37,000 companies (1) Of these companies in the Industrial Distribution Market, Lawson ranked 21st by sales revenue in 2009 (2) Industrial Distribution Market Dy
Slide 6: Lawson At A Glance
Lawson At A Glance Founded in 1952 Nasdaq (LAWS) listed since 1970) Distributor of maintenance, repair and operations (MRO) products and solutions Serve industrial, commercial, institutional and government markets in all 50 U.S. states, Canada and Puerto Rico Supply 200,000+ products Fasteners, cutt
Slide 7: Revenues By Business Unit
Revenues By Business Unit 2009 net sales: $332.5 million Lawson Products (MRO) Rutland Tool & Supply (MRO) Automatic Screw Machine Products Company (OEM) Note: Excludes Assembly Component Systems (ACS) business unit; continuing operations only 7
Slide 8: Key Competitive Advantages
Key Competitive Advantages Key Competitive Advantages 8 Strong financial position allows Lawson to invest in growth...
Slide 9: Financial Highlights
Financial Highlights Resilient business model Positioned to weather slow economy and to capitalize on industry/economic growth 2010 sales and operating results continue positive YOY trend High gross margins Consistently outperform MRO industry peers Strong balance sheet Approx. $20 million cash on h
Slide 10: Demonstrable Sales Recovery Since Q4 '09
Demonstrable Sales Recovery Since Q4 '09 (CHART) Note: Excludes ACS business unit; continuing operations only 10
Slide 11: Strong Gross Margins - Outperforming Industry
Strong Gross Margins - Outperforming Industry Strong Gross Margins - Outperforming Industry * Last twelve months as of 6/30/10 ** Last twelve months as of 5/30/10 Note: Lawson excludes ACS; continuing operations only 11
Slide 12: Notable Progress Reducing Costs
Notable Progress Reducing Costs Implemented strong cost control measures while continuing to invest in key initiatives Approximately 20% fewer FTEs since 12/07 Closed two distribution centers (CHART) Note: Excludes ACS business unit; continuing operations only 12
Slide 13: Lawson Transformation
Lawson Transformation We are building a solid foundation for growth... A new management team is in place Business improvements such as ERP, network optimization and sales transformation are all well underway Have sold non-core business (e.g., ACS) and will continue primary focus on MRO Concentrating
Slide 14: Focusing on Growth Opportunities
Focusing on Growth Opportunities 14 ERP Building a strong foundation to enable growth Sales Transformation Network Optimization Growth
Slide 15: Listening and Responding to Customers
Listening and Responding to Customers 15 Lawson actively seizing these opportunities Leveraging our core business + pursuing new initiatives focused on serving market with "unplanned" product need *September 2010 survey of 240 MRO customers Current Strength 75% prefer ordering through field sales re
Slide 16: Core Business Today / Lawson Today and Tomorrow
Core Business Today Products for Unplanned Needs Lawson Today and Tomorrow "Planned" Products for Inventory Management Customers with unplanned needs buy products from sales agents, catalogs or the web for next day delivery Future Opportunities Customers have need for products and want to outsource
Slide 17: Growth Strategies and Target
Growth Strategies and Target Deploying "Build and Buy" growth strategy to achieve low double-digit growth 17
Slide 18: Focus on Growth: Current State
Focus on Growth: Current State Agent sales manager to employee sales manager conversion: Completed Strategic accounts growth: +7.4% YTD Government accounts growth: +22.0% YTD New safety product introductions with limited capital investment: +29.2% YTD sales growth from 3,500 new SKU's Sales force pr
Slide 19: Focus on Growth: Future Opportunities
Focus on Growth: Future Opportunities Channel development Web/e-commerce, outbound call center New technology tools Customer Managed Inventory, vending machines, remote inventory management, eVMI, technical knowledge library Customer segmentation Segmented service model Additional product introducti
Slide 20: Summary
Summary Lawson has a solid foundation for growth Strong balance sheet, margins and cash flow enable significant investment in growth Research-based, customer-driven growth strategy Experienced leadership team executing successfully Capitalizing on growth opportunities 20
Slide 21: Questions?
i ol i Questions? e
Slide 22: Appendix
iY g Eo ‘ A P. pend: ix C
Slide 23: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets 25
Slide 24: Condensed Consolidated Statements of Operations (Unaudited)
Condensed Consolidated Statements of Operations (Unaudited) 26
Slide 25: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) 27
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