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Lawson Products Inc., Des Plaines, IL, No. 24 on MDM's list of the top 40 industrial distributors, and a distributor of products and services to the MRO marketplace, reported second-quarter sales grew 4.8 percent year-over-year to $84.2 million.
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The sales increase was primarily due to continue growth in the company's national, government and automotive sectors, combined with a moderate increase in other sectors. National and government sectors accounted for 17.8 percent of sales in the quarter, compared with 16.2 percent of sales in the prior-year period.
Gross profit for the period was $48.3 million compared with $48.8 million a year ago. As a percent of net sales, gross profit was 57.4 percent in the second quarter of 2011 compared to 60.7 percent in the second quarter of 2010. The decline reflects the decision to pursue larger customers with slightly lower margins.
The distributor reported income from continuing operations of $1.1 million in the second quarter of 2011.
"We have been able to grow sales as we continue to invest in our business transformation initiatives," said Thomas Neri, president and CEO. (Read: The Transformation of Lawson Products) "With a shift toward strategic and larger customers, we expected some pressure on margins. However, we have been able to leverage our recurring cost structure despite our ongoing transformation process. In the second half of 2011, we will continue to implement initiatives to drive sales and gross profit dollars."
"Additionally, we will continue to make infrastructure investments throughout this year as we position the company for sustainable future growth."
The distributor announced that it plans to go-live with the first phase of its new ERP implementation in the third quarter.
For the six months ended June 30, 2011, sales increased to $166.7 million, a 7.4 percent improvement over the first six months of 2010 driven by increases in the company's national, government and automotive sectors.
Profit for the first six months of 2011 was $3.1 million compared with $4 million in the prior year.
Lawson Products serves the industrial, institutional, commercial and government markets in the U.S., Canada and Puerto Rico.
Watch MDM's 7 Minutes With ... interview with Lawson COO Harry Dochelli: