Lawson Products, Inc. (NASDAQ: LAWS) on July 30 announced results for the second quarter ended June 30, 2020. The Chicago-based MRO distributor reported sales of $72.1 million, a 24.9% year-over-year decrease.
Other highlights reported by the company include:
- As the quarter developed, sequentially, May Average Daily Sales (ADS) increased nearly 23% over April while June ADS increased another 6% over May. Average daily sales were $1.127 million in the second quarter of 2020 compared to $1.502 million during the same quarter 2019.
- Reported gross margin was 53.1% for the quarter, the same as a year ago. This was achieved despite a shift in sales mix toward lower margin product categories.
- Net cash generated from operations in the quarter of $14.7 million was achieved through effective working capital management with a keen focus on preserving our cash position. Lawson ended the quarter in a positive cash position of $8.3 million, net of debt, along with having $97.3 million of availability under its committed credit facility.
- Reported net income was $0.6 million for the quarter, or $0.07 per diluted share compared to $0.14 in the second quarter of 2019. On an adjusted basis excluding stock-based compensation and severance expense, diluted earnings per share were $0.37.
“During the quarter, we successfully undertook a series of actions that continued a high level of service to our customers, protected operating margins and maintained our strong financial position. Our adjusted EBITDA margin of 8.7% was a direct result of our actions,” said Michael DeCata, president and chief executive officer. “Looking ahead, we are focused on improving sales to further leverage our streamlined cost structure and expand operating margins. The current disruptive conditions have challenged us to be more productive in many areas of the organization that will have continuing long-term benefits.
“Although there is uncertainty about the pandemic and general economy, we believe the actions we’ve taken, their near-term results and long-term implications best serve our shareholders and employees by positioning Lawson to achieve solid growth into the future. In addition, we will be opportunistic in utilizing our strong balance sheet and cash position to make accretive acquisitions.”