Lawson Product sales rise 3.6 percent
Lawson Products reported sales in the fourth quarter of 2016 increased 3.6% to $67.3 million from $65.0 million a year ago.
Net loss for the quarter was $4.6 million, or 53 cents per diluted share, compared to a net loss of $3.7 million, or 42 cents, for the same period a year ago. The net loss in the 2016 quarter was negatively impacted by stock-based compensation and severance expenses totaling $5.5 million or 62 cents per diluted share.
General and administrative expenses were $22.2 million in the fourth quarter of 2016 compared to $19.6 million in the prior year quarter. The increase was primarily due to $2.1 million of higher stock-based compensation, primarily driven by the increase in the company's stock price, and $1.4 million of higher severance expenses primarily related to the announced closure of the Fairfield, New Jersey distribution center.
"Our business improved as 2016 came to a close. Fourth quarter average daily sales increased 5.4% from a year ago and also grew over the immediately preceding quarter. We are seeing evidence in our sales results that we are beginning to grow our way out of the previous downward cycle of the MRO marketplace. It appears the economic headwinds we have faced have begun to subside," said Michael DeCata, president and chief executive officer.
"The steps we have taken to build a stronger foundation for Lawson over the past few years are starting to yield positive results. We expanded our sales rep team to more than 1,000 at year end. Our efforts to continually improve operations at our state-of- the-art McCook facility provided us the opportunity to further streamline our distribution network while maintaining the high service levels that Lawson customers know and trust. In addition, we successfully completed and integrated three small acquisitions during 2016.
Average daily sales were $1.122 million compared with $1.065 million a year earlier. Fourth quarter sales benefited from growth in strategic, Kent Automotive and government accounts as well as $0.8 million contribution from 2016 acquisitions.
"We are optimistic heading into 2017. We intend to expand our sales force, improve sales rep productivity, and actively pursue accretive acquisition opportunities. Lawson’s growth efforts, combined with our continually improving operating efficiency, allows us to enter 2017 well-positioned to take advantage of the improving macro-economic environment,” concluded DeCata.
For the full year, net sales of $276.6 million increased 0.3% from $275.8 million in 2015.
The company posted a net loss of $1.6 million for the year, or a loss of 19 cents, compared to net income of $297,000, or 3 cents, in 2015.