Acquisitions and Goodwill (Notes)

9 Months Ended

Sep. 30, 2017

Acquisitions and Goodwill [Abstract]

Business Combination Disclosure [Text Block]

Acquisitions and Goodwill

Primarily to expand its sales coverage, obtain experienced sales representatives and improve its presence in Canada, the Company completed three acquisitions in 2016. In March 2016, the Company acquired the assets of Perfect Products Company of Michigan ("Perfect Products"), an auto parts distributor for approximately $1.3 million in cash and $30 thousand in contingent consideration. In May 2016, the Company acquired the assets of F.B. Feeney Hardware ("F. B. Feeney") in Ontario, Canada, for approximately $1.3 million in cash and $0.1 million in contingent consideration. And, in November 2016, the Company acquired the assets of Mattic Industries Limited ("Mattic"), an industrial parts distributor located in western Canada, for approximately $3.5 million in cash and $0.3 million in contingent consideration.

The following table contains unaudited pro forma net sales and net income for Lawson Products assuming the Perfect Products, F.B Feeney and Mattic acquisitions closed on January 1, 2015.

	(Dollars in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net sales
Actual	$	75,651	$	70,199	$	225,274	$	209,258
Pro forma	75,651		70,978		225,274		212,738
Net income
Actual	$	1,321	$	1,825	$	9,451	$	3,014
Pro forma	1,321		2,048		9,451		3,662

The pro forma disclosures in the table above include adjustments for, amortization of intangible assets and acquisition costs to reflect results that are more representative of the combined results of the transactions as if the Mattic, F.B Feeney and Perfect Product acquisitions closed on January 1, 2015 rather than on the actual acquisition dates. This pro forma information utilizes certain estimates, is presented for illustrative purposes only and is not intended to be indicative of the actual results of operation. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future positive or negative events that may occur after the acquisition, such as anticipated cost savings from operating synergies.

Goodwill activity for the first nine months of 2017 and 2016 is included in the table below:

	(Dollars in thousands)
	Nine Months Ended September 30,
	2017			2016
Beginning balance	$	5,520		$	319
Acquisition	(73		)	2,442
Impact of foreign exchange	342			12
Ending balance	$	5,789		$	2,773

The reduction in acquisition activity of $0.1 million in 2017 resulted from a non-cash adjustment to the estimated purchase price allocation to inventory originally recorded in 2016.