ý | Quarterly Report under Section 13 OR 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report under Section 13 OR 15(d) of the Securities Exchange Act of 1934 |
Delaware | 36-2229304 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
8770 W. Bryn Mawr Avenue, Suite 900, Chicago, Illinois | 60631 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ý |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page # | ||
• | failure to retain a talented workforce including productive sales representatives; |
• | the inability of management to successfully implement strategic initiatives; |
• | failure to manage change within the organization; |
• | the ability to generate sufficient cash to fund our operating requirements; |
• | the ability to meet the covenant requirements of our line of credit; |
• | disruptions of the Company’s information and communication systems; |
• | the effect of general economic and market conditions; |
• | inventory obsolescence; |
• | work stoppages and other disruptions at transportation centers or shipping ports; |
• | changing customer demand and product mixes; |
• | increases in energy and commodity prices; |
• | violations of environmental protection regulations; |
• | a negative outcome related to tax matters; and |
• | all other factors discussed in the Company’s “Risk Factors” set forth in its Annual Report on Form 10-K for the year ended December 31, 2012. |
June 30, 2013 | December 31, 2012 | ||||||
ASSETS | (Unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 280 | $ | 1,640 | |||
Restricted cash | 401 | — | |||||
Accounts receivable, less allowance for doubtful accounts | 33,574 | 29,451 | |||||
Inventories, net | 47,021 | 44,681 | |||||
Miscellaneous receivables and prepaid expenses | 5,491 | 5,308 | |||||
Deferred income taxes | 17 | 17 | |||||
Discontinued operations | 10,236 | 9,232 | |||||
Total current assets | 97,020 | 90,329 | |||||
Property, plant and equipment, net | 64,245 | 66,981 | |||||
Cash value of life insurance | 8,631 | 14,943 | |||||
Deferred income taxes | 55 | 55 | |||||
Other assets | 446 | 449 | |||||
Discontinued operations | 347 | 174 | |||||
Total assets | $ | 170,744 | $ | 172,931 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Revolving line of credit | $ | 23,266 | $ | 16,127 | |||
Accounts payable | 13,206 | 11,421 | |||||
Accrued expenses and other liabilities | 25,613 | 31,330 | |||||
Discontinued operations | 1,225 | 950 | |||||
Total current liabilities | 63,310 | 59,828 | |||||
Security bonus plan | 16,867 | 18,837 | |||||
Deferred compensation | 5,632 | 5,741 | |||||
Financing lease obligation | 10,608 | 10,786 | |||||
Deferred rent liability | 4,758 | 4,621 | |||||
Other liabilities | 1,542 | 2,258 | |||||
Discontinued operations | 88 | 127 | |||||
Total liabilities | 102,805 | 102,198 | |||||
Stockholders’ equity: | |||||||
Preferred stock, $1 par value: | |||||||
Authorized - 500,000 shares, Issued and outstanding — None | — | — | |||||
Common stock, $1 par value: | |||||||
Authorized - 35,000,000 shares; Issued - 8,660,279 and 8,614,837 shares, respectively; Outstanding - 8,650,919 and 8,605,901 shares, respectively | 8,660 | 8,615 | |||||
Capital in excess of par value | 7,417 | 6,951 | |||||
Retained earnings | 49,938 | 52,764 | |||||
Treasury stock – 9,360 and 8,936 shares, respectively | (159 | ) | (155 | ) | |||
Accumulated other comprehensive income | 2,083 | 2,558 | |||||
Total stockholders’ equity | 67,939 | 70,733 | |||||
Total liabilities and stockholders’ equity | $ | 170,744 | $ | 172,931 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales | $ | 68,317 | $ | 69,830 | $ | 135,530 | $ | 141,194 | |||||||
Cost of goods sold | 27,683 | 34,104 | 55,082 | 65,171 | |||||||||||
Gross profit | 40,634 | 35,726 | 80,448 | 76,023 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative expenses | 40,833 | 45,041 | 84,177 | 88,619 | |||||||||||
Severance expense | 2 | 6,585 | 2 | 6,770 | |||||||||||
Gain on sale of assets | — | (2,122 | ) | — | (2,122 | ) | |||||||||
Goodwill impairment | — | 28,306 | — | 28,306 | |||||||||||
40,835 | 77,810 | 84,179 | 121,573 | ||||||||||||
Operating loss | (201 | ) | (42,084 | ) | (3,731 | ) | (45,550 | ) | |||||||
Interest expense | (221 | ) | (142 | ) | (434 | ) | (224 | ) | |||||||
Other expenses, net | (70 | ) | (89 | ) | (131 | ) | (96 | ) | |||||||
Loss from continuing operations before income taxes | (492 | ) | (42,315 | ) | (4,296 | ) | (45,870 | ) | |||||||
Income tax (benefit) expense | (501 | ) | 19,223 | (701 | ) | 17,842 | |||||||||
Income (loss) from continuing operations | 9 | (61,538 | ) | (3,595 | ) | (63,712 | ) | ||||||||
Discontinued operations, net of income taxes | 388 | 381 | 769 | 757 | |||||||||||
Net income (loss) | $ | 397 | $ | (61,157 | ) | $ | (2,826 | ) | $ | (62,955 | ) | ||||
Basic and diluted income (loss) per share of common stock: | |||||||||||||||
Continuing operations | $ | — | $ | (7.17 | ) | $ | (0.42 | ) | $ | (7.42 | ) | ||||
Discontinued operations | 0.05 | 0.05 | 0.09 | 0.08 | |||||||||||
Net income (loss) per share | $ | 0.05 | $ | (7.12 | ) | $ | (0.33 | ) | $ | (7.34 | ) | ||||
Basic and diluted weighted average shares outstanding | 8,629 | 8,587 | 8,618 | 8,581 | |||||||||||
Cash dividends declared per share of common stock | $ | — | $ | 0.12 | $ | — | $ | 0.24 | |||||||
Comprehensive income (loss) | |||||||||||||||
Net income (loss) | $ | 397 | $ | (61,157 | ) | $ | (2,826 | ) | $ | (62,955 | ) | ||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Adjustment for foreign currency translation | (303 | ) | (238 | ) | (475 | ) | 189 | ||||||||
Net comprehensive income (loss) | $ | 94 | $ | (61,395 | ) | $ | (3,301 | ) | $ | (62,766 | ) |
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net loss | $ | (2,826 | ) | $ | (62,955 | ) | |
Less income from discontinued operations | (769 | ) | (757 | ) | |||
Loss from continuing operations | (3,595 | ) | (63,712 | ) | |||
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | |||||||
Depreciation and amortization | 4,305 | 3,281 | |||||
Stock based compensation | 1,672 | (817 | ) | ||||
Restricted cash | (401 | ) | — | ||||
Deferred income taxes | — | 17,537 | |||||
Goodwill impairment | — | 28,306 | |||||
Gain on sale of assets | — | (2,122 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (4,423 | ) | 5,855 | ||||
Inventories | (2,608 | ) | 1,017 | ||||
Prepaid expenses and other assets | 5,975 | 3,859 | |||||
Accounts payable and other liabilities | (7,689 | ) | (2,260 | ) | |||
Other | 96 | 1,277 | |||||
Net cash used in operating activities of continuing operations | (6,668 | ) | (7,779 | ) | |||
Investing activities: | |||||||
Additions to property, plant and equipment | (1,657 | ) | (15,545 | ) | |||
Proceeds from sale of assets | — | 8,791 | |||||
Net proceeds related to sale of businesses | — | 500 | |||||
Net cash used in investing activities of continuing operations | (1,657 | ) | (6,254 | ) | |||
Financing activities: | |||||||
Net proceeds from revolving line of credit | 7,139 | 14,800 | |||||
Dividends paid | — | (2,054 | ) | ||||
Net cash provided by financing activities of continuing operations | 7,139 | 12,746 | |||||
Discontinued operations: | |||||||
Operating cash flows | 130 | 436 | |||||
Investing cash flows | (304 | ) | (28 | ) | |||
Net cash provided by discontinued operations | (174 | ) | 408 | ||||
Decrease in cash and cash equivalents | (1,360 | ) | (879 | ) | |||
Cash and cash equivalents at beginning of period | 1,640 | 2,116 | |||||
Cash and cash equivalents at end of period | $ | 280 | $ | 1,237 |
(Dollars in thousands) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales of ASMP | $ | 4,767 | $ | 4,518 | $ | 9,549 | $ | 9,116 | ||||||||
Pre-tax income (loss) from discontinued operations | ||||||||||||||||
ASMP | $ | 723 | $ | 647 | $ | 1,390 | $ | 1,280 | ||||||||
Other discontinued operations | (4 | ) | (17 | ) | (33 | ) | (30 | ) | ||||||||
Total pre-tax income | 719 | 630 | 1,357 | 1,250 | ||||||||||||
Income tax expense | (331 | ) | (249 | ) | (588 | ) | (493 | ) | ||||||||
Income from discontinued operations | $ | 388 | $ | 381 | $ | 769 | $ | 757 | ||||||||
Basic and diluted income per share | ||||||||||||||||
ASMP | $ | 0.05 | $ | 0.05 | $ | 0.09 | $ | 0.08 | ||||||||
Other discontinued operations | — | — | — | — | ||||||||||||
Total | $ | 0.05 | $ | 0.05 | $ | 0.09 | $ | 0.08 |
(Dollars in thousands) | |||||||
June 30, 2013 | December 31, 2012 | ||||||
Inventories, gross | 52,419 | 52,337 | |||||
Reserve for obsolete and excess inventory | (5,398 | ) | (7,656 | ) | |||
Inventories, net | $ | 47,021 | $ | 44,681 |
a) | 80% of the face amount of the Company’s eligible accounts receivable, generally less than 60 days past due, and |
b) | the lesser of 50% of the lower of cost or market value of the Company’s eligible inventory, which is generally inventory expected to be sold within 18 months, or $20.0 million. |
Quarter Ended | Minimum EBITDA (as Defined in the Credit Facility) | |||
June 30, 2013 | $ | 2,000,000 | ||
September 30, 2013 | 3,500,000 | |||
December 31, 2013 | 3,000,000 | |||
March 31, 2014 | 3,500,000 | |||
June 30, 2014 | 3,500,000 |
a) | Minimum Debt Service Coverage Ratio of 1.20:1.00 measured quarterly beginning June 30, 2014 and building cumulatively to a rolling four quarters. |
b) | Minimum Tangible Net Worth of not less than 90% of the value of shareholders’ equity less intangible assets established as of June 30, 2014, tested quarterly. |
c) | Minimum cash, accounts receivable and inventory to debt ratio of 2.0 to 1.0. |
(Dollars in thousands) | |||||||
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Balance at beginning of period | $ | 4,417 | $ | 1,282 | |||
Charged to earnings | 2 | 6,770 | |||||
Payments | (1,680 | ) | (1,672 | ) | |||
Balance at end of period | $ | 2,739 | $ | 6,380 |
(Dollars in thousands) | |||||||
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
Accrued expenses and other liabilities | $ | 2,387 | $ | 3,467 | |||
Other liabilities | 352 | 950 | |||||
Total accrued severance | $ | 2,739 | $ | 4,417 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Beginning balance | $ | — | $ | 28,306 | $ | — | $ | 28,148 | |||||||
Impairment loss | — | (28,306 | ) | — | (28,306 | ) | |||||||||
Translation adjustment | — | — | — | 158 | |||||||||||
Ending balance | $ | — | $ | — | $ | — | $ | — |
2013 | 2012 | ||||||||||||
($ in thousands) | Amount | % of Net Sales | Amount | % of Net Sales | |||||||||
Net sales | $ | 68,317 | 100.0 | % | $ | 69,830 | 100.0 | % | |||||
Cost of goods sold | 27,683 | 40.5 | % | 34,104 | 48.8 | % | |||||||
Gross profit | 40,634 | 59.5 | % | 35,726 | 51.2 | % | |||||||
Operating expenses: | |||||||||||||
Selling, general and administrative expenses: | |||||||||||||
Selling expenses | 20,617 | 30.2 | % | 21,763 | 31.2 | % | |||||||
General and administrative expense | 20,216 | 29.6 | % | 23,278 | 33.3 | % | |||||||
Total SG&A | 40,833 | 59.8 | % | 45,041 | 64.5 | % | |||||||
Severance expense | 2 | — | % | 6,585 | 9.4 | % | |||||||
Gain on sale of assets | — | — | % | (2,122 | ) | (3.0 | )% | ||||||
Goodwill impairment | — | — | % | 28,306 | 40.6 | % | |||||||
Total operating expenses | 40,835 | 59.8 | % | 77,810 | 111.5 | % | |||||||
Operating loss | (201 | ) | (0.3 | )% | (42,084 | ) | (60.3 | )% | |||||
Other expenses, net | (291 | ) | (0.4 | )% | (231 | ) | (0.3 | )% | |||||
Loss from continuing operations before income taxes | (492 | ) | (0.7 | )% | (42,315 | ) | (60.6 | )% | |||||
Income tax (benefit) expense | (501 | ) | (0.7 | )% | 19,223 | 27.5 | % | ||||||
Income (loss) from continuing operations | $ | 9 | — | % | $ | (61,538 | ) | (88.1 | )% |
2013 | 2012 | ||||||||||||
($ in thousands) | Amount | % of Net Sales | Amount | % of Net Sales | |||||||||
Net sales | $ | 135,530 | 100.0 | % | $ | 141,194 | 100.0 | % | |||||
Cost of goods sold | 55,082 | 40.6 | % | 65,171 | 46.2 | % | |||||||
Gross profit | 80,448 | 59.4 | % | 76,023 | 53.8 | % | |||||||
Operating expenses: | |||||||||||||
Selling, general and administrative expenses: | |||||||||||||
Selling expenses | 42,225 | 31.2 | % | 41,872 | 29.7 | % | |||||||
General and administrative expense | 41,952 | 31.0 | % | 46,747 | 33.1 | % | |||||||
Total SG&A | 84,177 | 62.2 | % | 88,619 | 62.8 | % | |||||||
Severance expense | 2 | — | % | 6,770 | 4.8 | % | |||||||
Gain on sale of assets | — | — | % | (2,122 | ) | (1.5 | )% | ||||||
Goodwill impairment | — | — | % | 28,306 | 20.0 | % | |||||||
Total operating expenses | 84,179 | 62.2 | % | 121,573 | 86.1 | % | |||||||
Operating loss | (3,731 | ) | (2.8 | )% | (45,550 | ) | (32.3 | )% | |||||
Other expenses, net | (565 | ) | (0.4 | )% | (320 | ) | (0.2 | )% | |||||
Loss from continuing operations before income taxes | (4,296 | ) | (3.2 | )% | (45,870 | ) | (32.5 | )% | |||||
Income tax (benefit) expense | (701 | ) | (0.5 | )% | 17,842 | 12.6 | % | ||||||
Loss from continuing operations | $ | (3,595 | ) | (2.7 | )% | $ | (63,712 | ) | (45.1 | )% |
Quarter Ended | Minimum EBITDA (as Defined in the Credit Facility) | |||
June 30, 2013 | $ | 2,000,000 | ||
September 30, 2013 | 3,500,000 | |||
December 31, 2013 | 3,000,000 | |||
March 31, 2014 | 3,500,000 | |||
June 30, 2014 | 3,500,000 |
Exhibit # | |
31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
LAWSON PRODUCTS, INC. | |||
(Registrant) | |||
Dated: | July 25, 2013 | /s/ Michael G. DeCata | |
Michael G. DeCata | |||
President and Chief Executive Officer | |||
(principal executive officer) | |||
Dated: | July 25, 2013 | /s/ Ronald J. Knutson | |
Ronald J. Knutson | |||
Executive Vice President and Chief Financial Officer | |||
(principal financial and accounting officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Lawson Products, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal nine months (the registrant’s fourth fiscal nine months in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Lawson Products, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal nine months (the registrant’s fourth fiscal nine months in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Non-Cash Items Non-Cash Items
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Non-Cash Items [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | Non-Cash Items During the six months ended June 30, 2012, the Company recorded an $8.0 million increase in Property, plant and equipment, along with a corresponding increase in liabilities, related to the Financing lease obligation associated with the McCook, Illinois distribution center. These non-cash increases have been excluded from the Condensed Consolidated Statements of Cash Flows. |
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Statement [Abstract] | ||||
Net sales | $ 68,317 | $ 69,830 | $ 135,530 | $ 141,194 |
Cost of goods sold | (27,683) | (34,104) | (55,082) | (65,171) |
Gross profit | 40,634 | 35,726 | 80,448 | 76,023 |
Operating expenses: | ||||
Selling, general and administrative expenses | 40,833 | 45,041 | 84,177 | 88,619 |
Severance expenses | 2 | 6,585 | 2 | 6,770 |
Gain (Loss) on Disposition of Property | 0 | (2,122) | 0 | (2,122) |
Goodwill, Impairment Loss | 0 | 28,306 | 0 | 28,306 |
Operating expenses | 40,835 | 77,810 | 84,179 | 121,573 |
Operating income (loss) | (201) | (42,084) | (3,731) | (45,550) |
Interest expense | (221) | (142) | (434) | (224) |
Other income (expense), net | (70) | (89) | (131) | (96) |
Income (loss) from continuing operations before income taxes | (492) | (42,315) | (4,296) | (45,870) |
Income tax (benefit) expense | (501) | 19,223 | (701) | 17,842 |
Income (loss) from continuing operations | 9 | (61,538) | (3,595) | (63,712) |
Discontinued operations, net of income taxes | (388) | (381) | (769) | (757) |
Net income (loss) | 397 | (61,157) | (2,826) | (62,955) |
Diluted income (loss) per share of common stock: | ||||
Continuing operations | $ 0.00 | $ (7.17) | $ (0.42) | $ (7.42) |
Discontinued operations | $ 0.05 | $ 0.05 | $ 0.09 | $ 0.08 |
Net income (loss) per share | $ 0.05 | $ (7.12) | $ (0.33) | $ (7.34) |
Diluted weighted average shares outstanding | 8,629 | 8,587 | 8,618 | 8,581 |
Cash dividends declared per share of common stock | $ 0 | $ 0.12 | $ 0 | $ 0.24 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (303) | (238) | (475) | 189 |
Net Comprehensive loss | $ 94 | $ (61,395) | $ (3,301) | $ (62,766) |
Credit Facility
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | Credit Facility In 2012, the Company entered into a $40.0 million credit facility (“Credit Facility”) which expires in August 2017. The Credit Facility consists of a $40.0 million revolving credit facility, which includes a $10.0 million sub-facility for Letters of Credit. Until the later of June 30, 2014 or when the Company achieves certain financial covenants, credit available under the Credit Facility is based upon:
The applicable interest rates on borrowings under the Credit Facility are either the Prime rate or the LIBOR rate plus 2.75% for the first year and LIBOR plus 2.50% for the second year of the agreement which begins on August 8, 2013. Following the second year, the interest rate will be based on the Company’s debt to EBITDA ratio and range from LIBOR plus 1.25% to 1.85% or, if the Company elects, Prime minus 1.00% to 0.40%. The Credit Facility is secured by a first priority perfected security interest in substantially all the assets of the Company. Dividends are restricted under the Credit Facility to amounts not to exceed $1.1 million per quarter subject to a formula based on EBITDA achieved in the previous quarter compared to amounts specified in the Credit Facility. In addition to other customary representations, warranties and covenants, the Credit Facility requires the Company to comply with certain financial covenants. A minimum Consolidated EBITDA level, as defined in the Credit Facility, must be achieved on a quarterly basis as detailed in the following table:
For the period ended June 30, 2013, EBITDA, as defined in the Credit Facility, was $2.8 million, which was in compliance with the minimum EBITDA covenant in effect at June 30, 2013. The Company anticipates that the minimum required EBITDA for future quarters will be reduced to reflect the anticipated closing on the sale of ASMP. Upon meeting certain financial covenants, but not prior to June 30, 2014, the availability under the Credit Facility will be based upon the following covenants with a maximum borrowing level of $40.0 million:
At June 30, 2013, the Company had an outstanding balance of $23.3 million under the revolving line of credit of its Credit Facility and additional borrowing availability of $15.0 million. The Company paid interest of $0.4 million and $0.2 million for the six months ended June 30, 2013 and 2012, respectively. The weighted average interest rate was 3.0% through the six months ended June 30, 2013 and the outstanding balance approximates fair value. |
Discontunued Operations (Tables)
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Jun. 30, 2013
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Discontinued Operations Table [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The following table details the components of income from discontinued operations:
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Credit Facility EBITDA (Details) (USD $)
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3 Months Ended |
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Jun. 30, 2013
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June 30, 2013 [Member]
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Schedule of minimum EBITDA level achievable on quarterly basis | |
Minimum EBITDA | $ 2,000,000 |
September 30, 2013 [Member]
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Schedule of minimum EBITDA level achievable on quarterly basis | |
Minimum EBITDA | 3,500,000 |
December 31, 2013 [Member]
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Schedule of minimum EBITDA level achievable on quarterly basis | |
Minimum EBITDA | 3,000,000 |
March 31, 2014 [Member]
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Schedule of minimum EBITDA level achievable on quarterly basis | |
Minimum EBITDA | 3,500,000 |
June 30, 2014 [Member]
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Schedule of minimum EBITDA level achievable on quarterly basis | |
Minimum EBITDA | $ 3,500,000 |
Inventories (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Components of inventories | ||
Inventory, Gross | $ 52,419 | $ 52,337 |
Inventory Valuation Reserves | 5,398 | 7,656 |
Inventories, net | $ 47,021 | $ 44,681 |
Gain on sale of assets (Details) (USD $)
In Thousands, unless otherwise specified |
0 Months Ended | 3 Months Ended | 6 Months Ended | ||
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Jun. 14, 2013
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Jun. 30, 2013
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Jun. 30, 2012
Property
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Jun. 30, 2013
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Jun. 30, 2012
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Gain on sale of assets [Abstract] | |||||
Gain (Loss) on Disposition of Property | $ 0 | $ 2,122 | $ 0 | $ 2,122 | |
Proceeds from Sale of Property, Plant, and Equipment | $ 12,500 | $ 8,791 | $ 0 | $ 8,791 | |
Properties Sold | 3 |
Stock Based Compensation (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
6 Months Ended | ||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
MSU [Member]
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Dec. 31, 2015
Minimum [Member]
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Dec. 31, 2015
Maximum [Member]
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Line of Credit Facility [Line Items] | |||||
Share-based Compensation | $ 1,672 | $ (817) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 145,872 | 62,779 | |||
Share Based Compensation Non Option Equity Instruments Granted Weighted Average Exercise Price | $ 12.18 | ||||
Equity Share Payout Range | 0 | 94,169 |
Restricted Cash (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Restricted Cash [Abstract] | |
Restricted Cash and Cash Equivalents, Current | $ 401 |
Basis of Presentation and Summary of Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of Lawson Products, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. In the opinion of the Company, all normal recurring adjustments have been made that are necessary to present fairly the results of operations for the interim periods. Operating results for the three and six month periods ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Following the discontinuance of the Company's Original Equipment Manucfaturers ("OEM") segment (See Note 2 - Discontinued Operations), the Company operates in one remaining reportable segment; the Maintenance, Repair and Operations ("MRO") segment as a distributor of products and services to the industrial, commercial, institutional, and governmental maintenance, repair and operations marketplace. The condensed consolidated financial statements have been reclassified for all prior periods presented to reflect current discontinued operations treatment. Such reclassifications have no effect on net income as previously reported. The effect of restricted share awards and future stock option exercises equivalent to approximately 72,000 and 27,000 shares for the three months ended June 30, 2013 and 2012, respectively, and approximately 57,000 and 34,000 shares for the six months ended June 30, 2013 and 2012, respectively, would have been anti-dilutive and therefore, were excluded from the computation of diluted earnings per share. There have been no material changes in the Company's significant accounting policies during the six months ended June 30, 2013 as compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2012. The Company has determined that there were no subsequent events to recognize or disclose in these financial statements. |
Restricted Cash (Notes)
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6 Months Ended |
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Jun. 30, 2013
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Restricted Cash [Abstract] | |
Cash and Cash Equivalents Disclosure [Text Block] | Note 3 — Restricted Cash The Company has agreed to maintain $0.4 million in a money market account as collateral for an outside party that is providing certain commercial card processing services for the Company. The Company is restricted from withdrawing this balance without the prior consent of the outside party during the term of the agreement. |
Reserve for Severance
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Severance Reserve [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve for Severance | Severance Reserve Changes in the Company’s reserve for severance as of June 30, 2013 and 2012 were as follows:
Accrued severance charges are included in the following line items of the Condensed Consolidated Balance Sheets:
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Inventories
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories, net Inventories, consisting primarily of purchased goods which are offered for resale, were as follows:
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Income Tax Income tax (Details) (USD $)
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0 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
May 02, 2013
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Income Tax [Abstract] | |||||
Income Tax Expense (Benefit) | $ 501,000 | $ (19,223,000) | $ 701,000 | $ (17,842,000) | |
Income (Loss) from Continuing Operations before Income Taxes, Foreign | $ 3,400,000 |
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