LAWS - Earnings call transcript Q1 2018 | Distribution Solutions Group, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Lawson Products' First Quarter 2018 Earnings Call. This call will be hosted by Michael DeCata, Lawson Products' President and Chief Executive Officer, and Ron Knutson, Lawson Products' Chief Financial Officer. They will open the call with an overview of the first quarter results. Then there will be time for questions and answers. This call is being audio simulcast on the Internet via the Lawson Products Investors Relations page on the company's Web site, lawsonproducts.com. webcast XX, available XXXX. the site the of May through replay will on be Web A

covering operational During to providing point in the as the an call, out update financial this the this on business company that statements as call like I would information. will on be relevant to and and well press future to underlying results and are subject materially operating risks cause forward-looking uncertainties differ assumptions concerning could beliefs, goals, described. statements contain those results release expectations, plans, that and strategies, from that actual

that point over update made during addition, to CEO, statements company may Lawson The I call In the developments views information the on any to some light. call company's the in company Please in but as Mike made that today The this now today. do at change. the are to statements cause those would turn obligation the so. disclaims to specifically based Products' of may DeCata. future views to forward-looking consider like elect anticipates presented

Michael DeCata

sales. improve performance both the that After This the well have our Good and in processes, infrastructure, technology, reducing call. growth, of discuss to the aspect growth, for hard started organic commented the Ron our will evidence improve of progress. solid productivity. communicated quarter, growth. step next coming several then will We earnings We've the of worked together as in and quarter. we working every another through a I've a Knutson, CFO, Without thank intense percent some I disproportionate processes, methodically our will revenue in first to that in quarter also focus of on to after and are years expense we this reclassifications you XXXX. our will business acquisitions. Lawson's joining take in occasions focus Ron turned our the more on capable made financial things see XX% and work, operating systematically overall we review achieving detailed results, discuss investing morning of moments. training, on of that a more provide and comment delivering consistently and and several questions. company, model the on a we this sales XX% more We'll incremental is few is also on leverage morning

exception a our the our During first were multiple of versus North average and Overall, an up quarter, This attributed quarter Nor'easters East. never-ending sales every the winter. region daily increased basis. first like organic in seemed what sales XXXX market to X% is with the and on of the

were an strong up show for ADS momentum. the and continue strategic XX% Our basis, to quarter accounts on

XXXX. Our first for of Lawson segment profit remained XX.X% quarter versus strong the XX.X% gross at percent

Ron discuss Before increases the in classification cost margin gross of that the a in expenses suppliers from moment, seen will we have into slight quarter. some

been manage continue we've XX%. MRO over margins gross However, to our able to

for eight cost knowledge total on intensity, needs. Bolt MRO to operating sales checking grew our acquisition reminder, income days levels recognize to provide solution lowest on and to our XX,XXX Kent service of XX% of the SKUs ADS shipping guidance. operational distribution to dig Lawson into Alberta an deeper will moment. our of at Supply, far their Including our the achieved largest million sales for an XXXX, from date, basis we an quarter. our business consumable XX% From of the as began the due of every reps, Monday, private and our customers includes we first a versus As average XX% MRO which fourth that products, this portion XXXX. inventory from quarter EBITDA label quarter Ron superior sales for center. leverage $X million a adjusted $X.X non-GAP From exceeded of in The million the we perspective $X.X and standpoint, over the

us Canadian for you recall, available intended the This DC space. to the distribution have customers six within that co-located our and within will Bolt We existing acquired us now Bolt reconfigure from enables we new one some for that we the attractive Supply it part be to Western currently five This days take Lawson announced Western stock customers to serve a House customers. when will DC we Kent to Lawson Canadian versus of most may new Bolt takes and items days advantage two core center to As of enable facility. attract to Mississauga. the

Turning strategy, work sales team, growth three-part to through increasing and productivity, our to strategy, we our on growth our continue sales growth of acquisition.

sales hiring, In reps. XXX the finished of we with quarter terms

sales a retention continues and productivity to New be challenge. rep initial

However, we're we're progress as the we're well. of good in to onboard. quality it making reps the When that making bringing productivity progress good comes

rep is focus our Our sharing, the increased for quarter. X.X% per their through enabling here training, per knowledge overall day improve reps sales productivity technology, by and to

Lastly, our adding House, Supply is our on expansion Bolt and footprint. exploring very reps the well. we're planning the We're into most acquisition, performing team, geographic locations new recent to expand Bolt sales to

of customers. and Bolt has As supply perspective backorders, we're outside of a From service a XX inventory. levels, the chain Supply operations client DC pleased as XX% sales while shipped achieved Approximately reps metrics. the in and orders We've shipped service levels, a locations. are concurrently improvements percent line labor branch order directly lowering with our broad-based House in reminder, XX to operational

acquisitions. Looking recent forward, leverage our we continue to

as the acquired to for areas to ability through repair Our applications truck and have market such opened new in in opportunities our area. contributions significant expertise shop segments, teammates service job made us their

fill strategy and acquisitions. We pursue acquisition pipeline our the with continue to potential

We to keenly and recently on skews more winning also more sales incentive customers. gain modified of customers. share We existing within focused addition the are within share plan existing our rep emphasize

In independent huge As to progress company sales have made achieved communicated earnings Lean SAP our We've revitalizing is we starting I sales operational growing positive evolving are and a I generating in culture leverage the sales think to agents upward to The decision calls, consistent additional model our We've the making company our employees. beginning we demonstrate through now Sigma, the our of And attractiveness is our with value past through focused and my proposition. and earnings. we're trajectory. business about company Six excellence view, believe strong, and on the one converting analysis. a demonstrating theme.

financial call first Now, over the I'll results. turn the Ron insight into more to for quarter

Ron Knutson

and Mike, everyone. you, Thank morning good

with As in Mike sales strong a and increase adjusted improvement a quarter EBITDA. first our indicated, solid significant the started

results activity. House; also reflect quarter not QX Supply XXXX of Bolt as the first where Our include did full a Bolt Supply quarter any

I'll on both financial Lawson organic update, that As consolidated the include results well Supply. as business as I our comment go the through Bolt

with a me accounting two the Mike the jump on to standard in performance have I services. results, defined Before XXX standard managed our sales referenced. the The first and of quarter we let as ASC that to revenue adopt into obligations being comment second pertaining were required separate recognition concluded under one we XXXX that product company new our vendor that first inventory

to sales result, margin. a services and to As reclassified selling also inventory we revenues two expenses of our gross selling divided the have and from expenses vendor related managed providing into have categories separate now cost

in and impact Given on after cost, before how net our to release those look quarter quickly for the customers, we and performed a was income press the in operating quarter. one the revenues, services minimal. provides our contained Schedule

on the highlights. comment quarter let operational Now of me some first

First, for sales quarter. the sales XX% versus the finished up year-ago Average up the from at $XX.X X.X% were daily and million quarter. quarter, fourth

a year-ago. X% over impact Supply average daily acquisition, of the Bolt increased sales the Excluding

Second, adjusted was our million EBITDA $X.X the year to for compared a quarter ago. $X.X million

third, consolidated the XX.X%. percentage in adjusted Supply our the our Bolt And under gross EBITDA margin by from of an amount business. benefited new million quarter in improvement of method primarily the reported was driven was While $XXX,XXX, $X.X MRO our

quarter. Excluding Bolt expense the XX.X% was Supply for compared Lawson margin the reclassification, our segment XX.X% to and gross percentage year-ago

now share me some of details. the Let

with finished million two we I XX fourth less than quarter. days, on As selling mentioned, one quarter, but a $XX.X than the quarter year-ago more the

first the sales a year benefited ago, quarter to compared our from As following.

sales quarter. generated Supply Bolt $X for the dollars US First, in million of

new drive reps to to This our to and strategic reps and invest questions, product getting the growth technology, continuing field in locations converting new forms or to of management, Second, results. support improving driving accountability rewarding have relationships, actions process technical reps, includes providing we existing for on-boarding with the taken for more growth.

Third, tenure; fourth, greater of improved strength months the in and than MRO marketplace. our XX with sales from reps continued

And excluding currency. a strategic our accounts organic standpoint, From Bolt daily over up were business up Canadian As the X.X% Mike mentioned, an sales our up local widespread a now, the ADS growing X.X% were X% Lawson organic of XX% On volume. sales approximately with XX% organic all while increase represent the average U.S. segment year-ago. sales basis, were in quarter. ADS for was throughout segments

a also northeast growth primarily sales basis, X.X% core sales fueled million, million, segment We finished business February X.X% the realized in were sales March a January ADS our daily From per sales to in sales. per solid $X.XXX moderated million. day. the March at $X.XXX $X.XXX our rep in improvement due Lawson sequential Lower of and weather was Lawson average by

As in with slightly Supply Mike Kent mentioned, territory than the less sales we ended Bolt the a quarter and business. managers XX reps XXXX Lawson

said have term our short impacts the sales to investment. negatively in in rep the turnover we earnings adding upfront As past, the and due reps

our help infrastructure. further our ultimately drive leverage total revenues allow will it and However, us to

hiring. XXXX terms We of rep will both and during continue to sales focus productivity on rep our team in

balance other return priorities gross efforts expected with highest we to levels. those to will achieved margin company. the We standpoint the a From drive

focus quarter. offset XX.X%, gross service primarily towards our XX.X% by setup to our Supply, pricing ago, customers ago driven against margin Prior shift lower margin the was continued be been in for compressed. we improved a product and and the loss fulfillment a customers margin not to for in reported There Our Consistent to pricing margin gross and customer process XX.X% quarter percentages. in margin continues expense estimated reclassification same our by in gross partially was have gross efficiencies of reclassifying margins year related Supply in reflects costs increase around year in gross percentage organic marketplace expenses lower product pressures. lower from typically Bolt margins. lot at the Bolt same margin quarters gross our the who have the the previous to when with look compared a which was The strategic

vendor some able see starting While ahead increase, to from stay cost perspective. margin we a we've it to of are been

products and understand Our a premium the service understand provide of offering. the our we is for there in customers value premium that that

territories discussed increase relationships downward to percentage. sales As to and the pressure margin our more Greenfield put gross will on in our past, preserve plan strategic customer

Bolt were will XX% lowered year driven higher $XX.X to increase million of million the Bolt the the $XX.X a severance first expenses average And total ago expenses million. were quarter. gross was margin initiatives to in our million amount margin moving percentage to general, these quarter. by Prior $X.X inclusion primarily dollars. gross Supply closer of a Supply to the portion our increase as and margins compared for for selling with anticipated and The However, weighted and expenses quarter the of compensation gross stock-based Selling, expense. business $XX.X administrative margin

Excluding organic Bolt additional of stock-based expenses Supply, by severance, million were operating total down and compensation sales. slightly nearly $X.X

We operating continue further as sales to expenses creating drive business. an percent a the leverage down to opportunity to

some additional Our in XX% to closure. MRO for this non-GAAP quarter. with was million was non-recurring distribution first by of XX% was diluted adjusted primarily remaining loss for account $X.X was $X.X income the in ago. range a share contributed or basis, to Supply. into Bolt and stock-based the the an stated year-ago for XXXX $X.X $X.X net approximately but the the EBITDA at Bolt segment from $X.XXX diluted to million severance the XX% increase $X.XXX an adjusted Net million EBITDA consolidated compensation million our to in $X.X EBITDA the Supply the expenses coming income On Fairfield share center EBITDA including income due quarter Adjusted quarter. quarter. including phone taking compared previous Operating or per adjusted quarter, $XXX,XXX $X.X million leverage the million compared of Of our million in far for quarter was calculation leverage exceeded the for year the impacted $X.X

sheet not of company $X.XXX. perspective, due first tax the includes to which its acquisition. The a balance by deferred reserves did million quarter quarter negatively expense $XX.X on Supply XXXX assets. From tax fully tax earnings of the our expense, income with from quarter primarily created ended The year-ago the diluted Bolt have borrowings, impacted we a

of first $XXX,XXX. quarter for point the of the are the quarter Our borrowings at was remainder and at typically year. CapEx the then a the decreased end high for

be million to our of center expect capital the the technology of $X.X maintenance processes. our and We full-year our of to improve for primarily to network continue range in the distribution built CapEx million distribution out to $X.X in Alberta XXXX customer-facing for enhancements

on we now me look items the a into Let remainder XXXX. comment few as of

our are given and taking we other economic quarters, growth. our organic Bolt optimistic XXXX Supply sales we over space, past about are First, actions drive that indicators the acquisition, our in few to

Second, focus to improving pursuing sales adding sales we on continue existing productivity, and force. rep our moderately will to acquisitions,

Third, we inflation ahead leverage And to of drive to action costs. will product our fourth, the existing and stay will infrastructure we be taking continue adjusted that monitoring necessary increasing we ensure to EBITDA.

it cost turn to firmly over that the we additional we demonstrated positioned the operator leverage I'll operating questions. our for to to profitability. well are few As now existing achieve past believe over quarters,

Operator

Thank first Please is from with KeyBanc be session. Barger you. we'll conducting time, Instructions] question this Markets. Capital a question-and-answer At Steve Our [Operator proceed.

Ryan Cieslak

for guys. is Ryan Good morning, This on Steve.

Michael DeCata

good Hey, Ryan, morning.

Ryan Cieslak

about on Yes, trouble good the into give think more morning. there who number that little wanted into talk this I sequentially. you show to color that about, XQ, you're the And bit the should increase. quarter. you a Hey, could sales just about having down reps retention. -- with dig talk mean, the could reps, the And XX left tenure we of heading maybe

Michael DeCata

you. is DeCata, Yes, Mike sure, Ryan. This thank

Sigma-oriented of So trajectory be we've their much a on characterize that we're people, number sales XX, Six me off of wouldn't for about Lean as following. the I got then hoped, number we're And a calls, say track we and We net that so and future. a more of good we're both we more demos, to as progressing the people be as we to also say, it expect sort track range seeing. brought lot on them a that's disciplined I inviting on, reduction them When whole and processes calls, to would was a had trajectory of product refinement. trouble you're it expect feeling of let of leave. little When in, what they're but cold

up. indefinitely. the very for say, yet, they the kind retention, of would enough let us me to a about numbers have us certainty you reps market. not and to improvement We slight encouraging. to. get at pace in superior in me few a but such territories markets continue nonetheless of second seen we operational Canada, for be your saw sales have part up Relative to the belief, not operationally expect to a Probably say, but the our to wildly will little we excited term ago, tick And untapped in And excellence, the fragmented tick question, will over always years that a long let U.S. untapped huge there add

hire reps we in are. long-term our both incremental it. that well the continue gains good about sales where continuous as feel we And as we feel we'll and be will about on sales process, reps of sales kind But that good we acquired of So trajectory force organically.

Ryan Cieslak

Good going to XX.X%, should rate new margin, just of just run for we think consolidated the modeling know. purposes. as that then to And gross the

Ron Knutson

Sure, Ryan. is Ron Knutson. This

XX% So gross yes, the the XX-ish selling level. margin kind to that at go-forward the into right really a impact a percentages what legacy has we're of MRO of we, that on as kind And is reclassification segments, our well of expenses, Bolt as percent at that from reporting now still having looking of the some consolidated basis. included XX%

Ryan Cieslak

a bit this revenue, demand talk seeing $X And saw given Could the it the thought going million House a this I you be to that flat then little pattern I'd trends. quarter, roughly pickup of in we're Okay. improvement sequentially. expecting contributed think Supply I sequential you about Bolt quarter?

Ron Knutson

Sure.

trails typically their Supply, softer So think primarily Bolt little the historical typically the And a spring for kind generally bit basis. fall. bit I from is of is of other a it's quarters QX some -- where a

where already second well. sequentially look add their March here quarter. increases quarter substantially February improving were we we're first is activity XXXX, when I they that in we February And at some when as and January performed first were look the over the example, And April quarter. they at over up their versus seeing would For sales over to

So by numbers starting up we're month here month. those tick to see

Michael DeCata

And oil is construction that is trucking industry. just and Canada, add talk when trades, a much of a support round we in frame the diverse of little serve electricians, then color walk-in And we that markets are to as roofers, facilities business, that's pretty of Western not approximately reference; number shipped, projects. as about XX% agriculture, the walk-in gas, in

to well, seasonal we see a little softer and is quarter these that's trends. as Ron's first folks point, for So those why

Ryan Cieslak

Okay.

a comfortable expect to demand flat relative for do right Just couple trends more inventories build with at inventory we your now kind inventories some of XQ are 'XX looking improving, with should or there? me, feel you your

Ron Knutson

do we're comfortable at. with We feel where

into those metrics anticipating We is any or XXXX add of where or look relative would we did the carrying perspective. reductions not some backorders, of that build. to not of a line we inventory us look we little out good managing bit that we that I during are the service an dollars that And of order would as our to completeness we the that customer a negative remainder at incremental made none the impact we quarter tighter. result on see about total a from we -- As see feel

fact, we improvements In there. actually saw some

feel continue where organization. and our throughout at we increase turns do we at we're Ryan, good yes, about to how So, look the we

Ryan Cieslak

back It of past a increases, years. little significant going the me commentary you then more inflation. one supplier in question bit the like is couple Okay. than the seems for to And gave last price

feel with your reps question is So in you inflation really quarters. that sales having that do comfortable customers my previous seen being haven't conversation much

Michael DeCata

large equipment, customers' economy the trucking, we've The extremely we're the as to a zero little MRO working seeing bit increases Again, there, better there equipment, and are course modest. a piece control. the are range. the of of armed last But the Yes, to thing small increases precisely But piece behalf couple cost so perspective, broad downtime consumable a to on are But completely our of in of and is being you the from it extra customer. predominant on about end-use the are on them we're an facts as thing with average of on equipment, customers, $X.XX at right, you when price running forces wait forces whole a a is item. for because little time last is previous the wants construction downtime think a customer more utilization over-the-road years factory of gets The compared time what I obviously your of bit information. day selling forth, as imagine production a want here. you're yourself there's so stressed

in all critical some a translates our it I again. customer what's in from little is argue slack between way marketplace than utilization this come a the are even is to that environment more it manufacturing back demand At this value to and proposition times demand. perspective. And when is bit say the or time, the to trucking would over-the-road inflation extent So with end user the leading through to our

Ryan Cieslak

the Appreciate guys. Thanks. color,

Michael DeCata

Ryan. you, Thank

Ron Knutson

Ryan. Thanks,

Operator

proceed. Our from with next Research. Barrington Kevin [Operator question Instructions] Please is Steinke

Kevin Steinke

and Ron. Mike morning, Good

Michael DeCata

Morning, Kevin.

Ron Knutson

Kevin. Morning,

Kevin Steinke

you on that legacy ADS growth have maybe Is business? way the on severe there the magnitude might for your follow-up about organic to wanted Lawson in had out the to the weather talked I separate any Northeast.

Ron Knutson

we Ron. negative a the so. did in a some also affected. is do trends think that was but first it at was by the to the the it we bit see for think this fell, in was year, in year. were looked Good and quarter, is difficult Friday And fell think of this we've little I was second districts XXXX trends, And Northeast Kevin, when Yes, It it little timing this last in the of I the of and that March it April year, XXth versus XXth compounded quarter

look gets it falloff a see feel to picking in those negative region I what did we there the way March April. trends when in a a best up bit And at probably we explain that That's the do little would So same certainly that of the little But timeframe. we do now during muddy. has been is that impact, it. regions say a are and

were in moving So, yes, to for back us number negative us. on positive it, we're turn seeing a precise put but little bit and difficult trends a now March, certainly for them the

Kevin Steinke

turning And of company April. things good positively you back that, part in seen those have following Okay, hear April that here? regions through just the here the terms in for to up are overall on in what first of growth

Ron Knutson

pretty solid. Yes,

quarter don't out we say and year would know, consistent pretty but saw what the ago. guidance, you a formal solid we with in give increases, over As go I first any

evidenced So, growth again, kind And we first the single-digit feel down weeks lot April. quarter, mid additional path. we the dollars into like to continue as We're of able would trend also. few EBITDA leverage as we're being nice well, some that the seeing first here us that a of to right expect of in continuing in

Kevin Steinke

oil nice throughout of last and gas out was a great. I called customers, your know the year. Yes, rebound tailwind among the Okay, you benefit throughout that you XXXX for

get gas? the the call expect going to other or forward comps remainder impact XQ on more and we As one little benefit first what move able sort from I you the will any But and or year oil and that. out might you difficult guess of are way quarter, the on a the to of

Ron Knutson

Sure, is again. Kevin. This Ron

combination oil realized. gas we other a So as throughout that year. plus organic And you're of and growth the do right, comps tougher we move the get that's

and we customers as how are this classified. Within code define our the and gas, oil SIC again, as

was quarter 'XX. The first first with flat of 'XX relatively quarter of

we mentioned, you we see, as up. didn't growth So we've if really of saw called a historically that out some bump

that end first for quarter I in an at in get us bit last And QX it softened gas at even business pace accelerated standpoint. oil what a QX little But from to as year, just the of we'll the on back And some were well versus at growing and up us some would so of a were QX we volume of had kind QX. QX. out where a customers sequentially significant and little strategic QX say pretty and bit although that flattened looking it

Michael DeCata

Yes, jump let not we but is we gas place let -- me I say of really broadly multiple significant good. sort the are the Mike. kind very and for the between feel But gains oil specific Kevin, step market state gas, just it's at like between and thinking function, very We we After the am about talking we're just this like segments, in And oil we it segments, now in of and were a customers a -- levels. like here, considering and 'XX feel product the that and a very and of yes, beyond steady say 'XX we we and that quarter, nicely that 'XX, made. happened significant and geographies, -- specific good rate first elevated this feel me was not 'XX. across 'XX gains the

a relationships and picking within so account at before talked locations, non-strategic of of was that's customers and all in to accounts, an fully on is all for product us it we taking is new activities share, this now, up we based within example, opportunity new reflection to intensity, existing existing service a like SKUs good forth. is reflection differentiate account And taking good 'XX. go so share national our and about is on a about challenge but and up Now as share product conversion win real there us and pick to economy the and are strategic of servicing ourselves

gains very feeling there gas more broadly well about and Both on to than that. them and made we're the oil and holding as but we have good. So

Kevin Steinke

strategic of up And following focus you I and share rep that, And share to you about within prepared said comments, customers for a talked your gain modified accounts. conversion you gain. recently believe just on in within Okay. incentives your reward on sales

recently do that? So, can And that from how change? to Or, made that are out what us seeing so accomplish of you what remind expect you you far? you

Michael DeCata

one be superior ones Yes. categories customer's we here very be there Again, most that might was and else our the metrics product so do a recent job do I are the logic we incremental orders, But customer are needs. six, real there kind buying other any are because operational and the of that important to electrical rates customer's seven, a not and are including that back delivery change. real any categories of may And else. have of products emphasis if reps about be sales not might for on trying what than tools adjacent the is we is we can two being servicing up of cutting you and cycles, confidence now can. That our underlying us. look out eight so through changes forth And part connectors, doing sales of And from someone needs we or sweet customer fasteners, far that anybody that servicing product our the in encouraging but business. our these fill putting talking rep through braces or commission that spot is your that am location, to pick a go

needs. our business. a for a want we well the their if value of anything we MRO XXX% value So that are proposition, less consumable our customer. disservice candidly we not of than share that fairly not is service customer's is products which proposition, served XXX% Customer And believe narrow for we a servicing is the that to

sales past very very a up that all excuse we so, is the And they are push walk change. to recent to trying But, today. pick incremental might our me, rep harder, little enable stuff a --

Kevin Steinke

organic guess Okay, expectation XX% here, adjusted XX% lastly or growth, continuing you That's And it get just that there the should on forward? is Ron, I EBITDA you touched prevent of I to on helpful. couple going incremental from think of great. margins that kind a anything those here. to is But, times

Ron Knutson

sure, Hi, Kevin.

is And about our the quite definitely X% increase incremental leverage quarter. first saw it of of through, that sales. going in $X.X in to coming of clearly million we expectation were EBITDA $X forward. in a a show business, loss able we additional million the So, on With bit

good bottom-line. we to the through feel how flowed of So about much that

times we're at sales structure sales we that our our lot stated organization not XX% get look coming into increases mentioned, quarters, achieving of Certainly, us as the a prevent mentioned the that earlier with but to would to we have that expense the tougher, and goal. can we anything As through. we right next feel within you the few XX% stage we like realize seeing

off at So no, at XX% we're XX% of not point. this coming all to the

Kevin Steinke

Okay, would as be Bolt? sales great, including on and and well growth total that

Ron Knutson

just leverage MRO they're then look Yes, on so number, and at side we get to was we with started it making make in so little the the not complicated lapping EBITDA to really When then think percentage I And a leverage gets adding side then it historical calculation at basis. separately on especially way the more this separately. the that's in a look consolidated at sense in it, probably Bolt Supply's numbers, managing right prior Bolt point we and Bolt XX% because not those on the that XX% sure year. will since

Kevin Steinke

taking the fair questions. that's enough, helpful. Okay, Thanks for

Michael DeCata

Kevin. Sure, thanks

Ron Knutson

Kevin. Thanks,

Operator

proceed. Steve have follow-up We line. Barger's question from Please a

Ryan Cieslak

right that more you're within now Last couple Can now believe some Bolt. SKUs, Bolt do where about Kent at branches? questions. talked branch Lawson you on quarter, that, that I plan shipping of about openings and putting product to piggyback just at you the Hey guys, had talk that you you I on potential a and begin with

Michael DeCata

Yes, thank you. Ryan,

exploring DeCata. and locations underserved ready So, couple yes, are expansion we in committed Mike things, Canada, to into are it's A and to not we anything branch of it. that announce cities yet, towards Western just working but

locations. reps comments, I Bolt Lawson locations think for in addition we're to also sales Kent mentioned I my adding Canada reps prepared in to sales Western

in more than that XX,XXX XX,XXX-XX,XXX feet mentioned an The frame Bolt So of little as and feet a to reference a and growth, center SKUs, using about that that. I've of infusion future is bring it square products. bit we're Kent in an and square is Lawson of investment distribution sort about combination

In [Ph] X,XXX addition, into that or center. X,XXX Alberta another and likely XX,XXX in from Mattic about items bring all we'll items distribution

feeling just in of we're about we've job Canada. growth said the So future Western of put again Bolt team all great is together, us. when you And for this a good doing

to So new predominantly at that's working we are are in look Western where locations we Canada. and branch

Ryan Cieslak

assume just one Okay, XX% going housekeeping and that rate, should tax The then we forward? question.

Michael DeCata

certainly on operations. Canadian between pretty that's that's Ryan, rate rate, a Yes, basis good and our blended a a go-forward

XX% with part reform to, basis. go-forward Our XX% far so state, a -- a that which on foreign tax as the tax as is introduced good earnings investments, on their subject a to we're they companies of exceeding tangible rate as pretty

Ryan Cieslak

guys. thanks right, All

Michael DeCata

Ryan. thanks, Yes,

Ron Knutson

Ryan. Thanks,

Operator

Ladies Mike we of reached comments. I our and end closing to over for turn gentlemen, have to the back question-and-answer would DeCata the like session. call

Michael DeCata

Thank you, Sherry. Thank and Lawson Products. following for for you call, our joining

XXXX. in investments coming together and efforts are Our well revitalization

we growth but us with mentioned, a in this XXXX, are combined in stable a we've team have As and market line enabling strong win share excellence year. to operational top challenging comps

is build as this a on sales. accelerate momentum Our to year of and goal to XXXX percent of earnings

first of year leverage The our focus. demonstrated the and quarter

day to and good Products. teammates. Thank to Lawson again, a for thank do. in going would have like you I every to is Lastly, I commitment very wonderful and year excellence their XXXX everything a appreciate day. be they our

Operator

concludes This conference. you. Thank today's

this participation. for You may thank disconnect at time. your your And lines you

Distribution Solutions (DSGR) 19 Apr 182018 Q1 Earnings call transcript