Lawson Products earnings up on lower sales
Lawson Products reported that its net sales declined 1.9% to $70.7 million in the second quarter of 2015, compared to $72.1 million in the second quarter a year ago.
Net income improved to $2.9 million, or 33 cents per diluted share, compared to $0.8 million, or 9 cents, a year ago.
The company attributed the decline in sales to a decrease in the Canadian exchange rate, weak demand from customers associated with the oil and gas industry and a general slow-down in the MRO marketplace. Demand during the quarter from direct oil and gas customers declined $1.4 million from a year ago quarte. Excluding this decline and the Canadian exchange rate impact of $0.9 million, net sales increased 1.4% from the prior year quarter.
Gross profit for the period improved to 61.9%, compared to 60.8% in the second quarter of 2014 and 61.3% in the first quarter. This increase was due primarily to efforts to improve distribution efficiencies and lower purchasing costs.Selling expenses decreased to $21.9 million in the quarter from $23.0 million in the prior year quarter, primarily driven by reduced performance based compensation, lower commissions on lower net sales and continued cost control efforts.
"We delivered improved operating results,” said Michael DeCata, president and chief executive officer. “Sales continued to be impacted by the weaker Canadian dollar and reduced demand in the energy sector which has contributed to a broader based slow-down across the MRO marketplace. Those factors aside, we realized solid growth within many of our strategic customer relationships while at the same time achieved continued operating metric improvements."
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