Lawson Products Inc. has a market cap of $141.3 million; its shares were traded at around $18.42 with a P/E ratio of 20 and P/S ratio of 0.4. The dividend yield of Lawson Products Inc. stocks is 2%.LAWS is in the portfolios of Arnold Van Den Berg of Century Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:MRO net sales increased 5.3% in the third quarter of 2010, to $85.7 million from $81.4 million in the prior year period, primarily reflecting continued growth with our strategic, governmental and automotive customers. OEM net sales increased $0.9 million, or 33.7%, in the third quarter of 2010, to $3.6 million from $2.7 million in the prior year period driven by strength in our aerospace customer base and new customer growth.
SG&A expenses decreased in the third quarter of 2010 to $49.5 million, including the $1.6 million of expenses incurred due to ERP implementation, from $49.9 million in 2009. As a percent of net sales, SG&A decreased 3.9 percentage points to 55.5% in the third quarter of 2010 compared to 59.4% in the third quarter of 2009, primarily due to operating efficiencies and our cost savings initiatives. SG&A expenses in the third quarter of 2010 include legal fees of $0.5 million advanced to a related party (see Note 11 Related Party Transaction) and a benefit of $0.3 million pertaining to the Companys long-term incentive program.
Net sales for the first nine months of 2010 increased 2.2% to $260.1 million, from $254.5 million in the first nine months of 2009. MRO net sales increased $5.3 million or 2.2% in the first nine months of 2010, to $250.0 million from $244.7 million in the prior year period. The growth in MRO sales was primarily driven by our strategic, governmental and automotive customers. OEM net sales increased $0.4 million in the first nine months of 2010, to $10.1 million from $9.7 million in the prior year period.
We reported net income of $7.4 million or $0.87 per diluted share in the first nine months of 2010. Pre-tax 2010 income was driven by higher gross profit from increased sales, a $1.7 million gain related to the sale of the Dallas distribution center, a $4.1 million legal settlement and significant operating cost savings. These items were offset by ERP implementation costs of $2.3 million, severance costs of $3.2 million and the loss from discontinued operations.
Cash on hand was $23.2 million on September 30, 2010 compared to $8.8 million on December 31, 2009. Net cash provided by continuing operations was $1.0 million for the first nine months of 2010 compared to $14.6 million in the first nine months of 2009. Increased net income in the first nine months of 2010 was somewhat offset by an increase in working capital and the final settlement payment related to prior year litigation. Accounts receivable increased $7.5 million as the increased sales had not yet been fully realized in cash on September 30, 2010. Additionally, $1.0 million was invested to increase inventory levels to support higher sales. Cash provided by operations in the first nine months of 2009 primarily reflected a decrease in accounts receivable and lower inventory levels.
We received $16.0 million from the sale of ACS in the third quarter of 2010. Additionally, cash flows from investing activities in the first nine months of 2010 and 2009 benefited from the receipt of $2.0 million and $2.2 million, respectively from the sale of our Dallas, Texas and Charlotte, North Carolina distribution centers. Capital expenditures, including $4.1 million related to the implementation of a new ERP system, were $5.2 million for the first nine months of 2010. We anticipate that the total cost of the ERP implementation, including both capital and expense, will be approximately $20 million and will continue through 2011.
Read the The complete Report