UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For quarterly period ended June 30, 2022 or ☐ Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file Number: 0-10546 DISTRIBUTION SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 36-2229304 (State or other jurisdiction ...

Lawson Products, Inc. (LAWS) Q1 2022 Results Conference Call April 28, 2022 9:00 AM ET Company Participants Steven Hooser - IR Bryan King - Chairman Ron Knutson - EVP and CFO Operator Good morning, everyone. Welcome to the Lawson Products First Quarter 2022 Earnings Call. As a reminder, this conference call is being recorded. Now I will turn the call over to Steven Hooser, Investor Relations, to provide introductions and read the safe harbor statement. Please go ahead. Steven Hooser Good morning, and welcom ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common stock, $1.00 par value LAWS NASDAQ Global Select Market FORM 10-Q (Mark One) ☒ Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For quarterly period ended March 31, 2022 or ☐ Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For ...

Financial Data and Key Metrics Changes - Lawson Products reported consolidated sales of $102.1 million for Q4 2021, an increase of $4 million compared to the previous year, despite having one less selling day [21] - Average daily sales grew by 5.7% year-over-year for Q4 and 19.7% for the full year 2021 compared to 2020 [6][21] - Adjusted EBITDA margin for Q4 was 8.3%, and for the full year, it was 8.6% [6][38] - Consolidated gross margin percentage was 52.9% for Q4, slightly down from 53.1% in the previous year [22][26] Business Line Data and Key Metrics Changes - MRO sales rep productivity improved by 8.6% year-over-year [22] - Historical loss in MRO business saw average daily sales increase by 9.6% over Q4 2020, while Bolt Supply increased nearly 27% [26] - Partsmaster sales were impacted by a slowdown in military procurement, but military activity is expected to rebound in early 2022 [11] Market Data and Key Metrics Changes - Strategic accounts growth was down 2.4% sequentially for Q4 but up 9.7% compared to Q4 2020 [13] - Non-oil and gas customers represent 93% of the total strategic account customer base, with significant growth in industrial customers [13] - Government civilian segment sales were down due to lower PPE sales compared to 2020, but growth is anticipated from new contracts [16] Company Strategy and Development Direction - The company is focusing on organic growth initiatives, including investments in people and processes, particularly in the SLED markets [8] - The integration of Partsmaster is complete, and both Partsmaster and Bolt Supply have performed well, reinforcing confidence in future acquisitions [12] - The company is adapting to supply chain challenges and inflation by implementing price increases and managing costs effectively [9][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory in 2022, citing improvements in customer backorders and operational efficiency [18][63] - The company is confident in its ability to manage through supply chain disruptions and inflation, with a focus on maintaining customer relationships [24][66] - Early signs of customer demand in 2022 are positive, with mid-to-high single-digit increases in average daily sales compared to the previous year [71] Other Important Information - The company plans to invest $10 million to $12 million in capital expenditures in 2022, focusing on expanding distribution capabilities [34] - The company ended Q4 with $91.3 million in liquidity, positioning it well for future investments and acquisitions [36] Q&A Session Summary Question: Insights on labor shortages impacting organic growth - Management noted an increase in new customer inquiries due to labor shortages, with revenue retention slightly improving to just under 91% [44][46] Question: Size of investments in growth initiatives - Investments in growth initiatives for Q4 were approximately $300,000 to $400,000, with expectations for continued investment in early 2022 [53][56] Question: Outlook for standalone business growth - Management refrained from providing formal guidance but indicated positive trends in early 2022 sales [76][79] Question: Inventory build outlook - Management is comfortable with current inventory levels and does not anticipate significant increases in 2022 [81][83] Question: Activity in oil and gas accounts - Management acknowledged some volatility in oil and gas accounts but emphasized strong relationships with loyal customers [90][92] Question: Gross margin outlook for 2022 - Management expects stable gross margins, with ongoing cost increases being offset by price increases [94][96]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-10546 (Exact Name of Registrant as Specified in Charter) LAWSON PRODUCTS, INC. Delaware 36-2229304 (State or other jurisdiction of (I. ...

Lawson Products, Inc. (LAWS) Q3 2021 Earnings Conference Call October 28, 2021 9:00 AM ET Company Participants Michael DeCata - President and Chief Executive Officer Ron Knutson - Chief Financial Officer Conference Call Participants Kevin Steinke - Barrington Research Associates Operator Good morning, ladies and gentlemen, and welcome to the Lawson Products Third Quarter 2021 Earnings Call. This call will be hosted by Michael DeCata, Lawson Products' President and Chief Executive Officer; and Ron Knutson, L ...

Financial Performance - Total sales increased by 16.9% to $105.6 million in Q3 2021 compared to $90.3 million in Q3 2020, driven by improved business conditions and Partsmaster sales [117]. - Revenue for the nine months ended September 30, 2021, increased by 24.5% to $315.7 million from $253.5 million in the same period in 2020 [127]. - Partsmaster contributed $44.6 million in sales in the first nine months of 2021, compared to $5.4 million in the same period in 2020 [127]. - Operating income for Q3 2021 was $4.6 million, compared to $2.0 million in Q3 2020, reflecting improved operational performance [110]. - Net income for the nine months ended September 30, 2021, was $10.2 million, down from $14.9 million in the same period in 2020 [126]. Cost and Expenses - Adjusted non-GAAP operating income was $7.3 million in Q3 2021, down from $7.7 million in Q3 2020, primarily due to increased supplier costs [110]. - Selling expenses increased to $72.9 million for the first nine months of 2021, up from $55.4 million in the same period a year ago, representing a 31.6% increase [130]. - General and administrative expenses rose to $79.5 million in the first nine months of 2021 from $57.8 million in the prior year, a 37.5% increase [131]. Profitability Metrics - Gross profit margin improved to 53.1% in Q3 2021 from 52.3% in Q3 2020 [115]. - Gross profit increased by $8.8 million to $56.0 million in Q3 2021, compared to $47.2 million in Q3 2020, primarily due to increased sales [118]. - Consolidated gross profit as a percentage of sales was 53.1% in Q3 2021, up from 52.3% in Q3 2020 [118]. Cash Flow and Liquidity - Available cash and cash equivalents decreased to $7.5 million on September 30, 2021, from $28.4 million on December 31, 2020, primarily due to the payment of the acquisition liability related to Partsmaster [136]. - The company believes cash from operations and available funds under the Credit Agreement are sufficient for operating requirements and strategic initiatives [143]. Acquisition Impact - The acquisition of Partsmaster for $35.3 million contributed $13.6 million in revenue and an operating loss of $0.8 million in Q3 2021 [97]. - The company deferred $3.5 million in employer-side social security payments under the CARES Act, with $1.7 million expected to be paid in 2021 [101]. Operational Metrics - Average monthly PMI was 60.2 in Q3 2021, indicating expansion compared to 55.2 in Q3 2020 [106]. - Average sales per representative per day increased by 8.2% to $1.352 in Q3 2021 compared to $1.249 in Q3 2020 [107]. - Bolt Supply sales improved by 13.5% compared to the prior year quarter, contributing to overall sales growth [117]. Financial Position and Compliance - As of September 30, 2021, the company had $10.9 million in outstanding borrowings and $87.4 million of borrowing availability under its Revolving Credit Facility [140]. - The company can borrow up to 3.25 times its EBITDA and maintains a minimum fixed charge ratio of 1.15, remaining compliant with all financial covenants as of September 30, 2021 [141]. - Non-compliance with financial covenants in future quarters could lead to higher financing costs and restrictions on borrowing, adversely affecting the company's financial condition [142]. Challenges - Supply chain disruptions and inflation continue to pose challenges, impacting inventory acquisition and customer order fulfillment [108]. - Capital expenditures were $5.7 million for the nine months ended September 30, 2021, compared to $1.3 million in the same period in 2020 [137]. - The company has a stock repurchase program authorized for up to $7.5 million, but did not repurchase any shares in the first nine months of 2021 [139].

Financial Data and Key Metrics Changes - The company achieved consolidated sales of $106.5 million, reflecting a 47.7% increase compared to Q2 2020 and a 2.9% increase from Q1 2021 [7][20] - Adjusted EBITDA for the quarter was $8.8 million, representing 8.3% of sales [20][25] - The company ended the quarter with a net cash position of $0.9 million after making the final $33 million payment for the Partsmaster acquisition [20][27] Business Line Data and Key Metrics Changes - Partsmaster generated sales of $15.3 million in the quarter, although sales were slightly down from Q1 due to timing on military sales [7][11] - The Bolt Supply business achieved an 11.5% EBITDA for the quarter, with sales growing over 30% year-over-year and 12% over Q1 2021 [11] - Strategic accounts grew by 6.5% compared to Q1 and 50% compared to Q2 2020, while the Kent business grew by 4.7% versus Q1 and 53% year-over-year [12] Market Data and Key Metrics Changes - Sales in the government civilian segment were flat between Q1 and Q2 but up 6.6% compared to Q2 2020, with the SLED segment performing particularly well [13] - The company is focusing on underserved markets and has made progress in developing additional channels to market [14] Company Strategy and Development Direction - The company’s three-part growth strategy remains unchanged, focusing on sales rep productivity and the integration of Partsmaster [15] - Investments are being made in distribution capabilities and expanding the Calgary location to support future growth [11][26] - The company is optimistic about future growth driven by labor challenges faced by customers, which may lead to increased outsourcing of inventory management [39] Management's Comments on Operating Environment and Future Outlook - The management acknowledged challenges from supply chain disruptions and labor shortages but expressed confidence in the company's ability to navigate these issues [6][16] - There is optimism regarding the future, with management highlighting the importance of operational excellence and customer relationships [17][39] Other Important Information - The integration of Partsmaster is progressing as planned, with all sales reps now utilizing Lawson's technology systems [28] - The company is actively managing supply chain challenges and has implemented price increases to offset inflationary pressures [9][31] Q&A Session Summary Question: About the price increases and their impact on margins - Management confirmed that price increases implemented late in Q2 are expected to benefit margins in Q3 and beyond, as customers recognize the necessity of these increases [31] Question: Clarification on the reduced cost structure - The CFO explained that the cost structure has improved due to actions taken in 2020, and the company is managing costs effectively while growing sales [32][33] Question: Monthly trend in average daily sales - Average daily sales showed a sequential increase from March to April, remained flat in May, and slightly decreased in June, with July sales expected to be similar to June [35] Question: Variations among suppliers - Management noted that some suppliers are performing better than others, particularly in the chemical supply sector, and the company is adapting by shifting to functional equivalent products when necessary [36] Question: Long-term growth outlook amid labor challenges - Management indicated that labor challenges faced by customers are creating opportunities for the company to provide more value through outsourcing inventory management [39] Question: Gross margin expectations - Management reiterated that they expect gross margins to return to the 59%-61% range over time, despite current headwinds from supply chain disruptions [41] Question: M&A strategy moving forward - The company remains committed to pursuing larger acquisitions and is confident in its ability to integrate them successfully, without being hindered by the potential Luther King transaction [52][53]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the period [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, income statements, equity changes, and cash flows, with explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets decreased to $244.5 million from $256.3 million at year-end 2020, primarily due to a significant reduction in cash and cash equivalents used for an acquisition payment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $123,660 | $143,062 | | Cash and cash equivalents | $5,855 | $28,393 | | **Total Assets** | **$244,528** | **$256,304** | | **Total Current Liabilities** | $66,228 | $97,995 | | Accrued acquisition liability | $0 | $32,673 | | **Total Liabilities** | **$113,630** | **$133,882** | | **Total Stockholders' Equity** | **$130,898** | **$122,422** | [Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the second quarter of 2021, revenue increased significantly to $106.5 million from $72.1 million in Q2 2020, driving net income up to $2.9 million from $0.6 million Q2 Performance Comparison (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Revenue | $106,540 | $72,146 | | Gross Profit | $54,620 | $38,313 | | Operating Income | $3,382 | $569 | | Net Income | $2,935 | $619 | | Diluted EPS | $0.31 | $0.07 | Six-Month Performance Comparison (in thousands, except per share data) | Metric | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | | Revenue | $210,096 | $163,181 | | Gross Profit | $109,180 | $87,234 | | Operating Income | $8,192 | $19,207 | | Net Income | $6,531 | $13,152 | | Diluted EPS | $0.70 | $1.41 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased from $122.4 million at the end of 2020 to $130.9 million at June 30, 2021, primarily driven by net income and foreign currency translation adjustments - Total stockholders' equity grew by **$8.5 million** in the first six months of 2021, reaching **$130.9 million**[24](index=24&type=chunk) - Key drivers for the increase in equity were net income of **$6.5 million** (sum of $3.6M in Q1 and $2.9M in Q2) and stock-based compensation of **$1.0 million** (sum of $422k in Q1 and $551k in Q2)[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash provided by operating activities was $9.3 million, while net cash used in investing activities was $36.9 million, resulting in a net decrease in cash of $22.5 million Six-Month Cash Flow Summary (in thousands) | Activity | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,292 | $7,837 | | Net cash used in investing activities | ($36,874) | ($720) | | Net cash provided by (used in) financing activities | $4,852 | ($2,435) | | **Decrease in cash** | **($22,533)** | **$4,517** | - A business acquisition payment of **$33.0 million** was the primary use of cash in investing activities[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides critical context to financial statements, detailing the Partsmaster acquisition, segment performance, revenue disaggregation, and COVID-19 related impacts - The company acquired Partsmaster on August 31, 2020, for **$35.3 million**, with the final **$33.0 million** payment made in May 2021, and Partsmaster contributed **$15.3 million** in revenue and **$0.5 million** in operating income in Q2 2021[35](index=35&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) Revenue by Geography (Six Months Ended June 30, in thousands) | Region | 2021 | 2020 | | :--- | :--- | :--- | | United States | $171,234 | $130,679 | | Canada | $38,862 | $32,502 | | **Consolidated Total** | **$210,096** | **$163,181** | - The company has two operating segments: Lawson (VMI service model) and Bolt Supply (branch-based sales), generating **$188.2 million** and **$21.9 million** in revenue respectively for the first six months of 2021[90](index=90&type=chunk)[91](index=91&type=chunk) - Under the CARES Act, the company deferred **$3.5 million** in employer social security payments, with half due in 2021 and the remainder in 2022[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting the Partsmaster acquisition's impact, sales drivers, and liquidity, with detailed comparisons of operating results - The Partsmaster acquisition contributed **$15.3 million** in revenue for Q2 2021 and **$31.0 million** for the first six months of 2021[99](index=99&type=chunk) - The business climate improved significantly in H1 2021 as pandemic-related restrictions were relaxed compared to 2020, leading to increased business activity and improved operating results[104](index=104&type=chunk) - Average sales rep headcount increased to **1,081** in Q2 2021 from 957 in Q2 2020, with sales per rep per day increasing **33.0%** to **$1,361**[109](index=109&type=chunk) Adjusted Non-GAAP Operating Income Reconciliation (in thousands) | Description | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | GAAP Operating Income | $3,382 | $569 | $8,192 | $19,207 | | Adjustments | $3,457 | $4,212 | $5,858 | ($6,484) | | **Adjusted non-GAAP Operating Income** | **$6,839** | **$4,781** | **$14,050** | **$12,723** | [Results of Operations: Q2 2021 vs. Q2 2020](index=22&type=section&id=Three%20months%20ended%20June%2030%2C%202021%20compared%20to%20quarter%20ended%20June%2030%2C%202020) Total revenue for Q2 2021 increased by 47.7% to $106.5 million, driven by improved business conditions and a $15.3 million contribution from the Partsmaster acquisition Q2 Revenue by Segment (in thousands) | Segment | Q2 2021 | Q2 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Lawson | $94,861 | $63,214 | $31,647 | 50.1% | | Bolt Supply | $11,679 | $8,932 | $2,747 | 30.8% | | **Consolidated** | **$106,540** | **$72,146** | **$34,394** | **47.7%** | - Consolidated gross profit margin decreased to **51.3%** in Q2 2021 from 53.1% in Q2 2020, primarily due to increased freight costs, supply chain disruptions, and inventory reserves for Partsmaster integration[117](index=117&type=chunk)[118](index=118&type=chunk) - General and administrative expenses increased by **$5.6 million**, driven by Partsmaster operating expenses (**$3.3 million**) and costs to evaluate the LKCM proposal (**$1.4 million**), partially offset by a **$1.6 million** decrease in stock-based compensation[120](index=120&type=chunk) [Results of Operations: 6M 2021 vs. 6M 2020](index=25&type=section&id=Six%20months%20ended%20June%2030%2C%202021%20compared%20to%20June%2030%2C%202020) For the first six months of 2021, revenue increased 28.8% to $210.1 million, including a $31.0 million contribution from Partsmaster, though operating income fell due to stock-based compensation adjustments Six-Month Revenue by Segment (in thousands) | Segment | 6M 2021 | 6M 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Lawson | $188,191 | $144,705 | $43,486 | 30.1% | | Bolt Supply | $21,905 | $18,476 | $3,429 | 18.6% | | **Consolidated** | **$210,096** | **$163,181** | **$46,915** | **28.8%** | - General and administrative expenses increased by **$21.2 million** (**66.8%**), driven by a **$10.1 million** increase in stock-based compensation expense, **$7.2 million** from the Partsmaster acquisition, and **$1.4 million** in costs related to the LKCM proposal evaluation[131](index=131&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position decreased to $5.9 million due to the Partsmaster acquisition payment, but it maintains sufficient liquidity with $91.9 million available under its revolving credit facility - Cash and cash equivalents decreased by **$22.5 million**, primarily due to the **$33.0 million** payment for the Partsmaster acquisition[135](index=135&type=chunk) - As of June 30, 2021, the company had **$5.0 million** in outstanding borrowings and **$91.9 million** of availability under its Revolving Credit Facility[139](index=139&type=chunk) - The company was in compliance with all financial covenants as of June 30, 2021[140](index=140&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) This section is inapplicable and has been omitted from the report - Item 3 of Part I is inapplicable and has been omitted from this report[144](index=144&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with ongoing integration of Partsmaster's internal control procedures - The CEO and CFO concluded that disclosure controls and procedures were effective as of the evaluation date[145](index=145&type=chunk) - The company is in the process of integrating the internal control procedures of Partsmaster, which constituted approximately **15%** of total assets as of June 30, 2021[146](index=146&type=chunk) [PART II - OTHER INFORMATION](index=28&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers other required information, including unregistered sales of equity securities and a list of exhibits [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Shares%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[149](index=149&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, credit agreements, and compensation plans - The exhibits include key corporate governance documents, credit agreements, and executive compensation plans[149](index=149&type=chunk)[151](index=151&type=chunk)

Financial Data and Key Metrics Changes - The company achieved consolidated sales growth of 13.8% compared to Q1 2020, and 5.6% compared to Q4 2020, with Partsmaster contributing $15.7 million in sales [5][16] - Adjusted EBITDA for the quarter was $9.1 million, representing 8.8% of sales, with a sequential improvement in organic earnings [16][22] - Gross margin for the quarter was 52.7%, down from 53.7% a year ago, impacted by inventory rationalization and increased freight costs [20][26] Business Line Data and Key Metrics Changes - The Bolt Supply business achieved a 9.1% EBITDA for the quarter, with significant expansions in Calgary and Saskatoon [10] - Strategic accounts saw a 4% sales increase compared to Q4, with strong growth driven by integrated supply partners and new strategic accounts [11][12] - The Kent Automotive business was up 7% sequentially, indicating a recovery in demand as miles driven increase [54] Market Data and Key Metrics Changes - Sales in the government segment increased by 3.7% compared to Q4, driven by state, local, and educational sectors [12] - The company faced supply chain challenges, including labor shortages and raw material increases, which could impact gross margins [13][26] Company Strategy and Development Direction - The company is focused on integrating Partsmaster and expanding into underserved markets, with a three-part growth strategy emphasizing adding sales reps, improving productivity, and growth through acquisitions [14][36] - Investments are being made in distribution center modernization to enhance capacity and efficiency [9][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential monthly sales growth throughout 2021, supported by pent-up demand and operational excellence [45][47] - The integration of Partsmaster is progressing well, with no significant issues reported, and is expected to enhance the product offering [50][51] Other Important Information - The company ended the quarter with $26.3 million in cash and equivalents, and $65 million available under its credit facility, positioning it well for future growth initiatives [16][24] - Capital expenditures for the quarter were approximately $800,000, with expectations of $5 million to $6 million for the year, focusing on infrastructure upgrades [23] Q&A Session Summary Question: What was the sales cadence through the quarter? - Management noted strong sales in January, a dip in February due to weather, followed by recovery in March and April, with overall positive trends [28][29] Question: What cost increases have been seen, and how are pricing actions being handled? - The company has experienced supplier price increases but maintains confidence in passing modest increases to customers due to the critical nature of their service [31][32] Question: What is the outlook for MRO gross margins for the rest of the year? - Management expects to maintain gross margins in the high 50% range, despite a dip in Q1 due to inventory reserves [34] Question: Where are the opportunities for adding sales reps? - The company sees opportunities in both densely populated and geographically remote areas, with a focus on increasing sales rep productivity [39][40] Question: How confident is the company in achieving monthly sequential sales growth? - Management is confident due to various factors, including new product offerings and structural cost savings, which support their growth initiatives [46][48] Question: What is the status of the Partsmaster integration? - The integration is progressing smoothly, with inventory positioning largely completed and no significant issues reported [50][51] Question: How is the Kent Automotive business performing? - The Kent Automotive segment is experiencing a positive trend, driven by increased miles driven and gaining market share [54] Question: What is the outlook for selling expenses? - Selling expenses are expected to stabilize, with some increases due to resumed activities, but overall savings from previous years are anticipated to continue [56][58] Question: Is the company still confident in achieving the 25% to 30% incremental adjusted EBITDA margin goal? - Management reaffirmed confidence in achieving this margin goal through top-line sales growth [60]