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 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ¨ | ☒ | |||||||||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | |||||||||
Emerging growth company |
Page # | ||||||||
March 31, | December 31, | ||||||||||
2021 | 2020 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, less allowance for doubtful accounts of $ | |||||||||||
Inventories, net | |||||||||||
Miscellaneous receivables and prepaid expenses | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Deferred income taxes | |||||||||||
Intangible assets, net | |||||||||||
Cash value of life insurance | |||||||||||
Right of use assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accrued acquisition liability | $ | $ | |||||||||
Accounts payable | |||||||||||
Lease obligation | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total current liabilities | |||||||||||
Security bonus plan | |||||||||||
Deferred compensation | |||||||||||
Lease obligation | |||||||||||
Deferred tax liability | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Authorized - | |||||||||||
Common stock, $ | |||||||||||
Authorized - Issued - Outstanding - | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Treasury stock – | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Total revenue | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Selling expenses | |||||||||||
General and administrative expenses | |||||||||||
Operating expenses | |||||||||||
Operating income | |||||||||||
Interest expense | ( | ( | |||||||||
Other income (expense), net | ( | ||||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Basic income per share of common stock | $ | $ | |||||||||
Diluted income per share of common stock | $ | $ | |||||||||
Weighted average shares outstanding: | |||||||||||
Basic weighted average shares outstanding | |||||||||||
Effect of dilutive securities outstanding | |||||||||||
Diluted weighted average shares outstanding | |||||||||||
Comprehensive income: | |||||||||||
Net income | $ | $ | |||||||||
Other comprehensive income (expense), net of tax | |||||||||||
Adjustment for foreign currency translation | ( | ||||||||||
Net comprehensive income | $ | $ |
Common Stock | Capital in Excess of Par Value | Accumulated Other Comprehensive Income | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||
Outstanding Shares | $1 Par Value | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Adjustment for foreign currency translation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Shares issued | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares repurchased held in treasury | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | $ |
Common Stock | Capital in Excess of Par Value | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||
Outstanding Shares | $1 Par Value | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Shares repurchased held in treasury | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Adjustment for foreign currency translation | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | ( | ||||||||||
Deferred income taxes | ( | ||||||||||
Changes in operating assets and liabilities, net of acquisition | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ||||||||||
Miscellaneous receivables, prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable and other liabilities | ( | ( | |||||||||
Other | |||||||||||
Net cash used in operating activities | $ | ( | $ | ( | |||||||
Investing activities: | |||||||||||
Purchases of property, plant and equipment | $ | ( | $ | ( | |||||||
Cash receipt related to acquisition | |||||||||||
Net cash used in investing activities | $ | ( | $ | ( | |||||||
Financing activities: | |||||||||||
Net proceeds from revolving line of credit | $ | $ | |||||||||
Repurchase treasury shares | ( | ( | |||||||||
Payment of financing lease principal | ( | ( | |||||||||
Net cash provided by (used in) financing activities | $ | ( | $ | ||||||||
Effect of exchange rate changes on cash and cash equivalents | $ | $ | ( | ||||||||
Decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Supplemental disclosure of cash flow information | |||||||||||
Net cash paid for income taxes | $ | $ | |||||||||
Net cash paid for interest | $ | $ |
Cash paid and payable and liabilities assumed | ||||||||
Cash paid and payable | $ | |||||||
Accounts payable and accrued expenses | ||||||||
Deferred compensation | ||||||||
Lease obligation | ||||||||
$ | ||||||||
Fair value of assets acquired | ||||||||
Goodwill | $ | |||||||
Inventories | ||||||||
Accounts receivable | ||||||||
Customer relationships | ||||||||
Trade names | ||||||||
Property, plant and equipment | ||||||||
Right of use asset | ||||||||
Other assets | ||||||||
$ |
Three Months Ended March 31, | |||||||||||
(Dollars in thousands) | 2021 | 2020 | |||||||||
United States | $ | $ | |||||||||
Canada | |||||||||||
Consolidated total | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Fastening Systems | % | % | |||||||||
Cutting Tools and Abrasives | % | % | |||||||||
Fluid Power | % | % | |||||||||
Electrical | % | % | |||||||||
Specialty Chemicals | % | % | |||||||||
Aftermarket Automotive Supplies | % | % | |||||||||
Safety | % | % | |||||||||
Welding and Metal Repair | % | % | |||||||||
Other | % | % | |||||||||
Consolidated Total |
(Dollars in thousands) | |||||||||||
March 31, 2021 | December 31, 2020 | ||||||||||
Inventories, gross | $ | $ | |||||||||
Reserve for obsolete and excess inventory | ( | ( | |||||||||
Inventories, net | $ | $ |
(Dollars in Thousands) | ||||||||||||||||||||
Goodwill By Reportable Segment | ||||||||||||||||||||
Lawson | Bolt | Total | ||||||||||||||||||
Beginning balance December 31, 2020 | $ | $ | $ | |||||||||||||||||
Impact of foreign exchange | ||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ |
(Dollars in Thousands) | ||||||||||||||||||||
Goodwill By Reportable Segment | ||||||||||||||||||||
Lawson | Bolt | Total | ||||||||||||||||||
Beginning balance December 31, 2019 | $ | $ | $ | |||||||||||||||||
Impact of foreign exchange | ( | ( | ( | |||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ |
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||||||||||
Trade names | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Customer relationships | ( | ( | |||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( | $ |
Three Months Ended March 31, | ||||||||||||||||||||
Lease Type | Classification | 2021 | 2020 | |||||||||||||||||
Operating Lease Expense | Operating expenses | $ | $ | |||||||||||||||||
Financing Lease Amortization | Operating expenses | $ | ||||||||||||||||||
Financing Lease Interest | Interest expense | |||||||||||||||||||
Financing Lease Expense | ||||||||||||||||||||
Net Lease Cost | $ | $ |
Lease Type | March 31, 2021 | December 31, 2020 | ||||||||||||
Total Right Of Use ("ROU") operating lease assets (1) | $ | $ | ||||||||||||
Total ROU financing lease assets (2) | ||||||||||||||
Total lease assets | $ | $ | ||||||||||||
Total current operating lease obligation | $ | $ | ||||||||||||
Total current financing lease obligation | ||||||||||||||
Total current lease obligations | $ | $ | ||||||||||||
Total long term operating lease obligation | $ | $ | ||||||||||||
Total long term financing lease obligation | ||||||||||||||
Total long term lease obligation | $ | $ |
Maturity Date of Lease Liabilities | Operating Leases | Financing Leases | Total | |||||||||||||||||
Year one | $ | $ | $ | |||||||||||||||||
Year two | ||||||||||||||||||||
Year three | ||||||||||||||||||||
Year four | ||||||||||||||||||||
Year five | ||||||||||||||||||||
Subsequent years | ||||||||||||||||||||
Total lease payments | ||||||||||||||||||||
Less: Interest | ||||||||||||||||||||
Present value of lease liabilities | $ | $ | $ |
Lease Type | Weighted Average Term in Years | Weighted Average Interest Rate | ||||||||||||
Operating Leases | ||||||||||||||
Financing Leases |
Cash Flow Source | Classification | Amount | ||||||||||||
Operating cash flows from operating leases | Operating activities | $ | ||||||||||||
Operating cash flows from financing leases | Operating activities | |||||||||||||
Financing cash flows from financing leases | Financing activities |
(Dollars in thousands) | |||||||||||
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Balance at beginning of period | $ | $ | |||||||||
Charged to earnings | |||||||||||
Payments | ( | ( | |||||||||
Balance at end of period | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Revenue | |||||||||||
Lawson | $ | $ | |||||||||
Bolt Supply | |||||||||||
Consolidated total | $ | $ | |||||||||
Gross profit | |||||||||||
Lawson | $ | $ | |||||||||
Bolt Supply | |||||||||||
Consolidated total | $ | $ | |||||||||
Operating income | |||||||||||
Lawson | $ | $ | |||||||||
Bolt Supply | |||||||||||
Consolidated total | |||||||||||
Interest expense | ( | ( | |||||||||
Other income (expense), net | ( | ||||||||||
Income before income taxes | $ | $ |
Reconciliation of GAAP Operating Income to Adjusted Non-GAAP Operating Income (Unaudited) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(Dollars in Thousands) | 2021 | 2020 | ||||||||||||
Operating income as reported by GAAP | $ | 4,810 | $ | 18,638 | ||||||||||
Stock based compensation (1) | 1,000 | (10,700) | ||||||||||||
Inventory reserves (2) | 825 | — | ||||||||||||
Severance expense and employee acquisition costs | 576 | 7 | ||||||||||||
Adjusted non-GAAP operating income | $ | 7,211 | $ | 7,945 |
2021 | 2020 | ||||||||||||||||||||||
(Dollars in thousands) | Amount | % of Net Sales | Amount | % of Net Sales | |||||||||||||||||||
Revenue | $ | 103,556 | 100.0 | % | $ | 91,035 | 100.0 | % | |||||||||||||||
Cost of goods sold | 48,996 | 47.3 | % | 42,114 | 46.3 | % | |||||||||||||||||
Gross profit | 54,560 | 52.7 | % | 48,921 | 53.7 | % | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling expenses | 23,802 | 23.0 | % | 19,984 | 22.0 | % | |||||||||||||||||
General and administrative expenses | 25,948 | 25.0 | % | 10,299 | 11.3 | % | |||||||||||||||||
Total operating expenses | 49,750 | 48.0 | % | 30,283 | 33.3 | % | |||||||||||||||||
Operating income | 4,810 | 4.6 | % | 18,638 | 20.5 | % | |||||||||||||||||
Interest expense | (323) | (0.3) | % | (115) | (0.1) | % | |||||||||||||||||
Other income (expenses), net | 372 | 0.4 | % | (1,111) | (1.3) | % | |||||||||||||||||
Income before income taxes | 4,859 | 4.7 | % | 17,412 | 19.1 | % | |||||||||||||||||
Income tax expense | 1,263 | 1.2 | % | 4,879 | 5.3 | % | |||||||||||||||||
Net income | $ | 3,596 | 3.5 | % | $ | 12,533 | 13.8 | % |
Three Months Ended March 31, | Increase | ||||||||||||||||||||||
(Dollars in thousands) | 2021 | 2020 | Amount | % | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Lawson | $ | 93,330 | $ | 81,491 | $ | 11,839 | 14.5% | ||||||||||||||||
Bolt Supply | 10,226 | 9,544 | 682 | 7.1% | |||||||||||||||||||
Consolidated | $ | 103,556 | $ | 91,035 | $ | 12,521 | 13.8% | ||||||||||||||||
Gross profit | |||||||||||||||||||||||
Lawson | $ | 50,408 | $ | 45,120 | $ | 5,288 | 11.7% | ||||||||||||||||
Bolt Supply | 4,152 | 3,801 | 351 | 9.2% | |||||||||||||||||||
Consolidated | $ | 54,560 | $ | 48,921 | $ | 5,639 | 11.5% | ||||||||||||||||
Gross profit margin | |||||||||||||||||||||||
Lawson | 54.0 | % | 55.4 | % | |||||||||||||||||||
Bolt Supply | 40.6 | % | 39.8 | % | |||||||||||||||||||
Consolidated | 52.7 | % | 53.7 | % |
Three Months Ended March 31, | Increase | ||||||||||||||||||||||
(Dollars in thousands) | 2021 | 2020 | Amount | % | |||||||||||||||||||
Selling expenses | |||||||||||||||||||||||
Lawson | $ | 22,891 | $ | 19,187 | $ | 3,704 | 19.3% | ||||||||||||||||
Bolt Supply | 911 | 797 | 114 | 14.3% | |||||||||||||||||||
Consolidated | $ | 23,802 | $ | 19,984 | $ | 3,818 | 19.1% | ||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Lawson | $ | 23,261 | $ | 7,839 | $ | 15,422 | 196.7% | ||||||||||||||||
Bolt Supply | 2,687 | 2,460 | 227 | 9.2% | |||||||||||||||||||
Consolidated | $ | 25,948 | $ | 10,299 | $ | 15,649 | 151.9% |
(a) | (b) | (c) | (d) | |||||||||||||||||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||||||||
January 1 to January 31, 2021 | — | $ | — | — | $ | 4,512,000 | ||||||||||||||||||||
February 1 to February 28, 2021 | 268 | 49.59 | — | 4,512,000 | ||||||||||||||||||||||
March 1 to March 31, 2021 | — | — | — | 4,512,000 | ||||||||||||||||||||||
Total | 268 | — |
Exhibit # | |||||
101 | The following financial statements from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statement of Income and Comprehensive Income, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. | ||||
104 | The cover page from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL | ||||
101.INS | XBRL Instance Document | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
LAWSON PRODUCTS, INC. | |||||||||||
(Registrant) | |||||||||||
Dated: | April 29, 2021 | /s/ Michael G. DeCata | |||||||||
Michael G. DeCata President and Chief Executive Officer (principal executive officer) | |||||||||||
Dated: | April 29, 2021 | /s/ Ronald J. Knutson | |||||||||
Ronald J. Knutson Executive Vice President, Chief Financial Officer, Treasurer and Controller (principal financial and accounting officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 773 | $ 654 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, par value in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 9,293,401 | 9,287,625 |
Common stock, shares outstanding (in shares) | 9,066,547 | 9,061,039 |
Treasury stock (in shares) | 226,854 | 226,586 |
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting PoliciesThe 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, 2020. 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 month period ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The Company has two operating segments. The Lawson operating segment, distributes maintenance, repair and operations ("MRO") products to customers primarily through a network of sales representatives offering vendor managed inventory ("VMI") service to customers throughout the United States and Canada. The Bolt Supply House Ltd. ("Bolt Supply") operating segment, distributes MRO products primarily through its branches located in Western Canada. Bolt Supply had 14 branches in operation at the end of the first quarter 2021. See the 2020 Annual Report Form 10K for further details of the significant accounting policies of the Company. |
Acquisition |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition On August 31, 2020, the Company acquired Partsmaster from NCH Corporation. Partsmaster is a leading maintenance, MRO solutions provider that serves approximately 16,000 customers with approximately 200 sales representatives. The acquisition was made primarily to expand the Company's sales coverage, expand product lines, add experienced sales representatives, and leverage the Company's infrastructure. The purchase price was $35.3 million in cash plus the assumption of certain liabilities. The Company paid $2.3 million of the purchase price in cash at closing and will pay the remaining $33.0 million in May 2021. The payment obligation has been discounted to present value and is recognized as an accrued acquisition liability of $32.7 million and $32.9 million as of December 31, 2020 and March 31, 2021, respectively, in the Company's condensed consolidated balance sheet. Interest expense of $0.2 million was recorded in the three months ended March 31, 2021. Payment has been guaranteed under the Purchase Agreement, and includes the issuance of a $33.0 million irrevocable standby letter of credit. The Company will satisfy the payment obligation with cash on hand with any remaining portion using its existing credit facility. The purchase price of the acquisition was allocated to the fair value of Partsmaster’s assets and liabilities on the acquisition date. The fair market value appraisals of the majority of the assets and liabilities was determined by a third party valuation firm using management estimates and assumptions including intangible assets of $5.0 million for customer relationships and $2.8 million for trade names, and their estimated useful lives of 10 and 5 years, respectively. The $15.8 million allocated to goodwill reflects the purchase price less the fair market value of the identifiable net assets. The goodwill is attributable to the workforce of the acquired business and the synergies expected to arise after Lawson's acquisition of Partsmaster. The entire amount of goodwill is expected to be deductible for tax purposes. The appropriate fair values of the assets acquired and liabilities assumed are based on preliminary estimates and assumptions. The Company continues to review preliminary estimates of various assets and liabilities including, but not limited to, pre-acquisition employee compensation liabilities and potential adjustments of certain accounts receivable balances as defined under the purchase agreement. These preliminary estimates and assumptions could change during the purchase price measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed. The Company recorded the fair value of accounts receivable after consideration of an estimate of cash flows not expected to be collected which was $0.4 million. Partsmaster contributed $15.7 million of revenue and $0.7 million of operating income in the first quarter of 2021. A summary of the initial purchase price allocation of the acquisition is as follows (Dollars in thousands):
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Revenue Recognition |
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Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition As part of the Company's revenue recognition analysis, it concluded that it has two separate performance obligations, and accordingly, two separate revenue streams: products and services. Under the definition of a contract as defined by ASC 606, the Company considers contracts to be created at the time an order to purchase product is agreed upon regardless of whether or not there is a written contract. Performance Obligations The Company has two operating segments; the Lawson segment and the Bolt Supply segment. The Lawson segment has two distinct performance obligations offered to its customers: a product performance obligation and a service performance obligation. While the Company offers both a product and a service obligation, customers receive one invoice per transaction with no price breakout between these obligations. The Company does not separately price performance obligations. Lawson generates revenue primarily from the sale of MRO products to its customers. Revenues related to product sales is recognized at the time that control of the product has been transferred to the customer, either at the time the product is shipped or the time the product has been received by the customer. The Company does not commit to long-term contracts to sell customers a certain minimum quantity of products. The Lawson segment, including the recent Partsmaster acquisition, offers a vendor managed inventory ("VMI") service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided a short period of time after control of the purchased product has been transferred to the customer. Since some components of VMI service have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided. The Bolt Supply segment provides product sales and does not provide VMI services or other services. Revenue is recognized at the time that control of the product has been transferred to the customer which is either upon delivery or shipment depending on the terms with the customer. In previous financial statements, the Company presented the disaggregated components of total revenue: product revenue and service revenue, along with the cost of sales associated with each of these revenue streams as the service revenues exceeded 10% of consolidated revenue. Since the Company qualifies as a smaller reporting company, the Company has elected to discontinue disclosure of the disaggregated components of revenue and cost of sales in its condensed consolidated statements of income and comprehensive income and in the related notes to the condensed consolidated financial statements. For the three months ended March 31, 2020, service revenue of $9.7 million was reported as service revenue which has now been combined and reported within total revenue. Disaggregated revenue by geographic area follows:
Disaggregated revenue by product type follows:
Activities as lessor Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $0.7 million of revenue in the first three months of 2021. The Company has adopted the practical expedient not to separate non-lease components that would be within the scope of ASC 606 from the associated lease components as the relevant criteria under ASC 842 are met.
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Restricted Cash |
3 Months Ended |
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Mar. 31, 2021 | |
Restricted Cash [Abstract] | |
Restricted Cash | Restricted CashThe Company has agreed to maintain $0.8 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 has also agreed to maintain $0.2 million in a guaranteed investment certificate as collateral for an outside party that is providing certain commercial credit card services for Bolt. The Company is restricted from withdrawing this balance without the prior consent of the outside party during the term of the agreement. |
Inventories, Net |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories, Net Inventories, net, consisting primarily of purchased goods offered for resale, were as follows:
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Goodwill Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill Goodwill activity for the first three months of 2021 is included in the table below:
Goodwill activity for the first three months of 2020 is included in the table below:
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Intangible Assets |
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Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets The gross carrying amount and accumulated amortization by intangible asset class were as follows:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Activities as Lessee The Company leases equipment, distribution centers, office space, and branch locations throughout the US and Canada. Expenses related to leasing activities for the three months ended March 31, 2021 and March 31, 2020 are as follows (Dollars in thousands):
Net assets and liabilities related to leasing activities as of March 31, 2021 and December 31, 2020 are as follows (Dollars in thousands):
(1) Operating lease assets are recorded net of accumulated amortization of $6.8 million and $5.9 million as of March 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.5 million and $0.4 million as of March 31, 2021 and December 31, 2020, respectively Liabilities generated by leasing activities as of March 31, 2021 were as follows (Dollars in thousands):
(1) Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance $0.7 million The weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2021 are as follows:
The cash outflows of the leasing activity for the three months ending March 31, 2021 are as follows (Dollars in thousands):
Activities as lessor Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $0.7 million of revenue in the first three months of 2021. The Company has adopted the practical expedient not to separate non-lease components that would be within the scope of ASC 606 from the associated lease components as the relevant criteria under ASC 842 are met.
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Leases | Leases Activities as Lessee The Company leases equipment, distribution centers, office space, and branch locations throughout the US and Canada. Expenses related to leasing activities for the three months ended March 31, 2021 and March 31, 2020 are as follows (Dollars in thousands):
Net assets and liabilities related to leasing activities as of March 31, 2021 and December 31, 2020 are as follows (Dollars in thousands):
(1) Operating lease assets are recorded net of accumulated amortization of $6.8 million and $5.9 million as of March 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.5 million and $0.4 million as of March 31, 2021 and December 31, 2020, respectively Liabilities generated by leasing activities as of March 31, 2021 were as follows (Dollars in thousands):
(1) Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance $0.7 million The weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2021 are as follows:
The cash outflows of the leasing activity for the three months ending March 31, 2021 are as follows (Dollars in thousands):
Activities as lessor Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $0.7 million of revenue in the first three months of 2021. The Company has adopted the practical expedient not to separate non-lease components that would be within the scope of ASC 606 from the associated lease components as the relevant criteria under ASC 842 are met.
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Leases | Leases Activities as Lessee The Company leases equipment, distribution centers, office space, and branch locations throughout the US and Canada. Expenses related to leasing activities for the three months ended March 31, 2021 and March 31, 2020 are as follows (Dollars in thousands):
Net assets and liabilities related to leasing activities as of March 31, 2021 and December 31, 2020 are as follows (Dollars in thousands):
(1) Operating lease assets are recorded net of accumulated amortization of $6.8 million and $5.9 million as of March 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.5 million and $0.4 million as of March 31, 2021 and December 31, 2020, respectively Liabilities generated by leasing activities as of March 31, 2021 were as follows (Dollars in thousands):
(1) Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance $0.7 million The weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2021 are as follows:
The cash outflows of the leasing activity for the three months ending March 31, 2021 are as follows (Dollars in thousands):
Activities as lessor Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $0.7 million of revenue in the first three months of 2021. The Company has adopted the practical expedient not to separate non-lease components that would be within the scope of ASC 606 from the associated lease components as the relevant criteria under ASC 842 are met.
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Revolving Credit Facility |
3 Months Ended |
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Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility The Revolving Credit Facility matures on October 11, 2024 and provides $100.0 million of revolving commitments. The facility is primarily for general corporate purposes. The Company had $64.4 million of borrowing availability under its Revolving Credit Facility as of March 31, 2021 and $66.0 million as of December 31, 2020.There were no balances outstanding for the three months ended March 31, 2021 and as of December 31, 2020. Weighted average interest rates for the three months ended March 31, 2020 was 4.04%,. Fees are reported as interest expense and include customary charges relating to letters of credit and an unutilized commitment fee ranging from 0.15% to 0.30%, depending on the Total Net Leverage Ratio as defined in the Credit Agreement. Fees for the three months ended March 31, 2021 and March 31, 2020 were $0.1 million. In connection with the Revolving Credit Facility originated in 2019, deferred financing costs of $0.6 million were incurred. Deferred financing costs are amortized over the life of the debt instrument and reported as interest expense. As of March 31, 2021 and December 31, 2020 deferred financing costs net of accumulated amortization were $0.4 million and are included in Other assets. Borrowings are designed as alternate base rate loans, Canadian prime rate loans, Eurodollar loans, and Canadian dollar offered rate loans. Interest rates vary by the type of borrowing and Total Net Leverage Ratio as defined in the Credit Agreement of the most recent fiscal quarter. Revolving Credit Facility includes customary financial covenants representations and warranties. The Company was in compliance with all financial covenants as of March 31, 2021. In the third quarter of 2020 the Company entered into an amendment to the Credit Agreement which among other items temporarily increased the allowed letter of credits from $15.0 million to $40.0 million until August 31, 2021 and authorized indebtedness not to exceed $36.0 million for the acquisition of Partsmaster.
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Accrued Acquisition Liability |
3 Months Ended |
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Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Accrued Acquisition Liability | Accrued Acquisition LiabilityOn August 31, 2020, Lawson acquired Partsmaster from NCH Corporation. As part of the purchase price the Company agreed to pay $33.0 million in May 2021. The payment obligation has been discounted to present value using an implied interest rate of 1.8% and is recognized as a current liability of $32.7 million and $32.9 million as of December 31, 2020 and March 31, 2021, respectively, in the Company's condensed consolidated balance sheet. Interest expense of $0.2 million was recorded in the three months ended March 31, 2021. The increase in accrued acquisition liability has been recognized as interest expense. Payment has been guaranteed under the Purchase Agreement which includes the issuance of a $33.0 million irrevocable standby letter of credit. The accrued acquisition liability is included as outstanding debt in the quarterly financial covenant calculations. |
Stock Repurchase Program |
3 Months Ended |
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Mar. 31, 2021 | |
Disclosure of Repurchase Agreements [Abstract] | |
Stock Repurchase Program | Stock Repurchase ProgramIn the second quarter of 2019, the Board of Directors authorized a program in which the Company may repurchase up to $7.5 million of the Company's common stock from time to time in open market transactions, privately negotiated transactions or by other methods. The Company had $4.5 million remaining under its repurchase plan as of March 31, 2021. No shares were repurchased in the first quarter of 2021 under the Company stock repurchase plan. |
Severance Reserve |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance Reserve [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance Reserve | Severance Reserve Changes in the Company’s reserve for severance included in Accrued expenses and other liabilities, as of March 31, 2021 and 2020 were as follows:
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Stock-Based Compensation |
3 Months Ended |
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Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company recorded stock-based compensation expense of $1.0 million and benefit of $10.7 million for the first three months of 2021 and 2020, respectively. A portion of stock-based compensation is related to the change in the market value of the Company's common stock. Stock-based compensation liability of $15.0 million as of March 31, 2021 and $14.4 million as of December 31, 2020 is included in Accrued expenses and other liabilities. A summary of stock-based awards issued during the three months ended March 31, 2021 follows: Restricted Stock Units ("RSUs") The Company issued 7,300 RSUs to key employees that cliff vest on December 31, 2023. Additionally the Company issued 26,850 RSUs to various employees that vest ratably through December 31, 2024. Each RSU is exchangeable for one share of the Company's common stock at the end of the vesting period. Market Stock Units ("MSUs") The Company issued 18,373 MSUs to key employees that cliff vest on December 31, 2023. MSUs are exchangeable for the Company's common stock at the end of the vesting period. The number of shares of common stock that will be issued upon vesting, ranging from zero to 27,560 shares, will be determined based upon the trailing sixty-day average closing price of the Company's common stock on December 31, 2023. Performance Awards ("PAs") The Company issued 14,600 PAs to key employees that cliff vest on December 31, 2023. PAs are exchangeable for shares of the Company's common stock ranging from zero to 21,900 shares, or the equivalent amount in cash, based upon the achievement of certain financial performance metrics.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded income tax expense of $1.3 million, a 26.0% effective tax rate for the three months ended March 31, 2021. The effective tax rate is higher than the U.S. statutory rate due primarily to state taxes and other permanent items. Income tax expense of $4.9 million, a 28.0% effective tax rate was recorded for the three months ended March 31, 2020. The effective tax rate is higher than the U.S. statutory rate due primarily to state taxes and the recording of reserves for uncertain tax positions. The Company and its subsidiaries are subject to U.S. Federal income tax, as well as income tax of multiple state and foreign jurisdictions. As of March 31, 2021, the Company is subject to U.S. Federal income tax examinations for the years 2017 through 2019 and income tax examinations from various other jurisdictions for the years 2013 through 2019. Earnings from the Company’s foreign subsidiaries are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise may subject the Company to foreign withholding taxes and U.S. federal and state taxes.
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Contingent Liabilities |
3 Months Ended |
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Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities In 2012, it was determined a Company owned site in Decatur, Alabama, contained hazardous substances in the soil and groundwater as a result of historical operations prior to the Company's ownership. The Company retained an environmental consulting firm to further investigate the contamination, prepare a remediation plan, and enroll the site in the Alabama Department of Environmental Management (“ADEM") voluntary cleanup program. The remediation plan, approved by ADEM in 2018, consists of chemical injections throughout the affected area and subsequent monitoring. The injection process was completed in the first quarter of 2019 and monitoring is ongoing pending certification by ADEM. At March 31, 2021 estimated costs for future monitoring are not significant and have been fully accrued. The Company does not expect to capitalize any amounts related to the remediation plan.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company's operating segments, Lawson and Bolt, also represent its reportable segments because of differences in the businesses' financial characteristics and the methods they employ to deliver product to customers. The results of the Company's operating segments are reviewed by the Company’s chief operating decision maker responsible for reviewing operating performance and allocating resources. The Lawson segment primarily relies on its large network of sales representatives to visit the customer at the customers' location and produce sales orders for product that is then shipped to the customer and also provides VMI services. The Bolt segment primarily sells product to customers when the customers visit one of Bolt's 14 branch locations and the product is delivered to the customers at the point of sale. The Bolt segment total assets include the value of the acquired intangibles and the related amortization within its operating income. Financial information for the Company's reportable segments follows:
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COVID-19 Risks and Uncertainties |
3 Months Ended |
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Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
COVID-19 Risks and Uncertainties | COVID-19 Risks and Uncertainties There is substantial uncertainty as to the effect the COVID-19 pandemic will have on the future results of the Company. Various events related to COVID-19 may impact revenue, product sourcing, sales functions, and customers' ability to pay timely. The government of the State of Illinois defines Lawson Products as an essential business. A change in this status could result in the temporary closure of our business. The COVID-19 pandemic could result in a temporary closure of any or all of our office space, distribution facilities, or Bolt branch locations, as well as disruptions to our supply chain and interactions with customers. The pandemic may have a material adverse impact on future financial results, liquidity, and overall performance of the Company. It is reasonably possible that estimates made in the financial statements may be materially and adversely impacted as a result of these conditions, including delay in payment of receivables, impairment losses related to goodwill and other long-lived assets, and inability to utilize deferred tax assets. On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security ("CARES") Act to provide certain relief as a result of the COVID-19 outbreak. The Company has elected to defer the employer side social security payments in accordance with the CARES Act. The total amount deferred is $3.5 million, with $1.7 million expected to be paid in 2021 and the remainder in 2022. The Company will continue to evaluate how the provisions of the CARES Act will impact its financial position, results of operations and cash flows. The Company will continue to closely monitor the operating environment and will take appropriate actions to protect the safety for its employees, customers and suppliers.
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Revenue Recognition | As part of the Company's revenue recognition analysis, it concluded that it has two separate performance obligations, and accordingly, two separate revenue streams: products and services. Under the definition of a contract as defined by ASC 606, the Company considers contracts to be created at the time an order to purchase product is agreed upon regardless of whether or not there is a written contract. Performance Obligations The Company has two operating segments; the Lawson segment and the Bolt Supply segment. The Lawson segment has two distinct performance obligations offered to its customers: a product performance obligation and a service performance obligation. While the Company offers both a product and a service obligation, customers receive one invoice per transaction with no price breakout between these obligations. The Company does not separately price performance obligations. Lawson generates revenue primarily from the sale of MRO products to its customers. Revenues related to product sales is recognized at the time that control of the product has been transferred to the customer, either at the time the product is shipped or the time the product has been received by the customer. The Company does not commit to long-term contracts to sell customers a certain minimum quantity of products. The Lawson segment, including the recent Partsmaster acquisition, offers a vendor managed inventory ("VMI") service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided a short period of time after control of the purchased product has been transferred to the customer. Since some components of VMI service have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided. The Bolt Supply segment provides product sales and does not provide VMI services or other services. Revenue is recognized at the time that control of the product has been transferred to the customer which is either upon delivery or shipment depending on the terms with the customer. In previous financial statements, the Company presented the disaggregated components of total revenue: product revenue and service revenue, along with the cost of sales associated with each of these revenue streams as the service revenues exceeded 10% of consolidated revenue. Since the Company qualifies as a smaller reporting company, the Company has elected to discontinue disclosure of the disaggregated components of revenue and cost of sales in its condensed consolidated statements of income and comprehensive income and in the related notes to the condensed consolidated financial statements.
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Acquisition (Tables) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | A summary of the initial purchase price allocation of the acquisition is as follows (Dollars in thousands):
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Revenue Recognition (Tables) |
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Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Disaggregated revenue by geographic area follows:
Disaggregated revenue by product type follows:
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Inventories, Net (Tables) |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventories | Inventories, net, consisting primarily of purchased goods offered for resale, were as follows:
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Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill activity for the first three months of 2021 is included in the table below:
Goodwill activity for the first three months of 2020 is included in the table below:
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Intangible Assets (Tables) |
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Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure | The gross carrying amount and accumulated amortization by intangible asset class were as follows:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Lease Cost | Expenses related to leasing activities for the three months ended March 31, 2021 and March 31, 2020 are as follows (Dollars in thousands):
The weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2021 are as follows:
The cash outflows of the leasing activity for the three months ending March 31, 2021 are as follows (Dollars in thousands):
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Operating Lease Assets And Liabilities | Net assets and liabilities related to leasing activities as of March 31, 2021 and December 31, 2020 are as follows (Dollars in thousands):
(1) Operating lease assets are recorded net of accumulated amortization of $6.8 million and $5.9 million as of March 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.5 million and $0.4 million as of March 31, 2021 and December 31, 2020, respectively
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Value of Operating Lease Liabilities Generated by Leasing Activities | Liabilities generated by leasing activities as of March 31, 2021 were as follows (Dollars in thousands):
(1) Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance $0.7 million
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Value of Finance Lease Liabilities Generated by Leasing Activities | Liabilities generated by leasing activities as of March 31, 2021 were as follows (Dollars in thousands):
(1) Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance $0.7 million
|
Severance Reserve (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance Reserve [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Company's Reserve for Severance | Changes in the Company’s reserve for severance included in Accrued expenses and other liabilities, as of March 31, 2021 and 2020 were as follows:
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Segment Reporting (Tables) |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Financial information for the Company's reportable segments follows:
|
Basis of Presentation and Summary of Significant Accounting Policies (Details) |
3 Months Ended |
---|---|
Mar. 31, 2021
segment
branch
| |
Accounting Policies [Abstract] | |
Number of reportable segments | segment | 2 |
Number of branches | branch | 14 |
Acquisition - Initial Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
Aug. 31, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|
Fair value of assets acquired | |||||
Goodwill | $ 35,426 | $ 35,176 | $ 19,555 | $ 20,923 | |
Partsmaster | |||||
Cash paid and payable and liabilities assumed | |||||
Cash paid and payable | $ 34,523 | ||||
Accounts payable and accrued expenses | 4,086 | ||||
Deferred compensation | 2,938 | ||||
Lease obligation | 620 | ||||
Cash paid and payable and liabilities assumed | 42,167 | ||||
Fair value of assets acquired | |||||
Goodwill | 15,816 | ||||
Inventories | 7,797 | ||||
Accounts receivable | 7,706 | ||||
Property, plant and equipment | 2,121 | ||||
Right of use asset | 620 | ||||
Other assets | 371 | ||||
Fair value of assets acquired | 42,167 | ||||
Partsmaster | Customer relationships | |||||
Fair value of assets acquired | |||||
Intangibles | 4,961 | ||||
Partsmaster | Trade names | |||||
Fair value of assets acquired | |||||
Intangibles | $ 2,775 |
Revenue Recognition - Narrative (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021
USD ($)
segment
|
Mar. 31, 2020
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Number of operating segments | segment | 2 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 103,556 | $ 91,035 |
Operating lease revenue | 700 | |
Service Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 9,700 |
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 103,556 | $ 91,035 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 84,985 | 73,584 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 18,571 | $ 17,451 |
Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2020 |
---|---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 1,001 | $ 998 | $ 802 |
Money Market Funds | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | 800 | ||
Guaranteed Investment Certificate | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 200 |
Inventories, Net - Schedule of Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Components of inventories | ||
Inventories, gross | $ 67,252 | $ 67,137 |
Reserve for obsolete and excess inventory | (6,494) | (5,270) |
Inventories, net | $ 60,758 | $ 61,867 |
Inventories, Net - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Inventory [Line Items] | |
Rationalization of inventory | $ 0.2 |
Partsmaster | |
Inventory [Line Items] | |
Rationalization of inventory | $ 0.6 |
Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 35,176 | $ 20,923 |
Impact of foreign exchange | 250 | (1,368) |
Goodwill, ending balance | 35,426 | 19,555 |
Lawson | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 21,352 | 7,369 |
Impact of foreign exchange | 215 | (194) |
Goodwill, ending balance | 21,567 | 7,175 |
Bolt | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 13,824 | 13,554 |
Impact of foreign exchange | 35 | (1,174) |
Goodwill, ending balance | $ 13,859 | $ 12,380 |
Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 23,888 | $ 23,638 | |
Accumulated Amortization | (5,818) | (5,135) | |
Net Carrying Value | 18,070 | 18,503 | |
Amortization of Intangible Assets | 600 | $ 300 | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 11,432 | 11,289 | |
Accumulated Amortization | (3,079) | (2,733) | |
Net Carrying Value | 8,353 | 8,556 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 12,456 | 12,349 | |
Accumulated Amortization | (2,739) | (2,402) | |
Net Carrying Value | $ 9,717 | $ 9,947 |
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Leases [Abstract] | ||
Operating Lease Expense | $ 1,493 | $ 1,187 |
Financing Lease Amortization | 58 | 52 |
Financing Lease Interest | 5 | 7 |
Financing Lease Expense | 63 | 59 |
Net Lease Cost | $ 1,556 | $ 1,246 |
Leases - Value of Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating Leases | ||
Year one | $ 4,829 | |
Year two | 4,250 | |
Year three | 3,178 | |
Year four | 2,418 | |
Year five | 809 | |
Subsequent years | 1,416 | |
Total lease payments | 16,900 | |
Less: Interest | 1,176 | |
Present value of lease liabilities | 15,724 | |
Financing Leases | ||
Year one | 196 | |
Year two | 132 | |
Year three | 64 | |
Year four | 13 | |
Year five | 0 | |
Subsequent years | 0 | |
Less: Interest | 22 | |
Total lease payments | 405 | $ 700 |
Present value of lease liabilities | 383 | |
Total | ||
Year one | 5,025 | |
Year two | 4,382 | |
Year three | 3,242 | |
Year four | 2,431 | |
Year five | 809 | |
Subsequent years | 1,416 | |
Total lease payments | 17,305 | |
Less: Interest | 1,198 | |
Present value of lease liabilities | $ 16,107 |
Leases - Leases Weighted-Average Lease Terms and Interest Rates (Details) |
Mar. 31, 2021 |
---|---|
Leases [Abstract] | |
Operating Leases, Weighted Average Term in Years | 3 years |
Operating Leases, Weighted Average Interest Rate | 3.72% |
Finance Leases, Weighted Average Term in Years | 2 years 4 months 24 days |
Finance Leases, Weighted Average Interest Rate | 5.24% |
Leases - Cash Outflows of the Leasing Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 1,137 | |
Operating cash flows from financing leases | 5 | |
Financing cash flows from financing leases | $ 58 | $ 67 |
Leases - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Leases [Abstract] | |
Operating lease revenue | $ 0.7 |
Revolving Credit Facility (Details) - Line of Credit - USD ($) |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Line of Credit Facility [Line Items] | ||||||
Weighted average interest rate | 4.04% | |||||
Allowable indebtedness for acquisition | $ 36,000,000.0 | |||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, borrowing capacity | $ 100,000,000.0 | |||||
Line of credit facility, remaining borrowing capacity | $ 64,400,000 | 66,000,000.0 | ||||
Commitment fee | 100,000 | $ 100,000 | ||||
Deferred financing costs incurred | $ 600,000 | |||||
Deferred financing costs net of accumulated amortization | $ 400,000 | $ 400,000 | ||||
Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Letter of credit | $ 40,000,000.0 | $ 15,000,000.0 | ||||
Letter of Credit | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.15% | |||||
Letter of Credit | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.30% |
Accrued Acquisition Liability (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2020 |
May 31, 2021 |
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Business Acquisition [Line Items] | |||||
Implied interest rate | 1.80% | ||||
Accrued acquisition liability | $ 32,871 | $ 32,673 | |||
Interest expense | 323 | $ 115 | |||
Partsmaster | |||||
Business Acquisition [Line Items] | |||||
Payments for purchase | $ 2,300 | ||||
Accrued acquisition liability | 32,900 | $ 32,700 | |||
Interest expense | $ 200 | ||||
Forecast | Partsmaster | |||||
Business Acquisition [Line Items] | |||||
Payments for purchase | $ 33,000 |
Stock Repurchase Program (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Jun. 30, 2019 |
---|---|---|
Disclosure of Repurchase Agreements [Abstract] | ||
Stock repurchase program, authorized amount | $ 4.5 | $ 7.5 |
Severance Reserve (Details) - Employee Severance - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Reserve for severance and related payments | ||
Balance at beginning of period | $ 1,251 | $ 909 |
Charged to earnings | 404 | 7 |
Payments | (340) | (365) |
Balance at end of period | $ 1,315 | $ 551 |
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Share-based Payment Arrangement [Abstract] | |||
Stock-based compensation expense (income) | $ 1.0 | $ (10.7) | |
Stock-based compensation liability | $ 15.0 | $ 14.4 |
Stock-Based Compensation - Restricted Stock Units (Details) |
3 Months Ended |
---|---|
Mar. 31, 2021
shares
| |
Stock-Based Compensation Details | |
Amount of Common stock exchanged for each RSU vested (in shares) | 1 |
Executive | |
Stock-Based Compensation Details | |
Stock-based awards issued (in shares) | 26,850 |
Restricted Stock Units (RSUs) | |
Stock-Based Compensation Details | |
Stock-based awards issued (in shares) | 7,300 |
Stock-Based Compensation - Market Stock Units (Details) - MSUs |
3 Months Ended |
---|---|
Mar. 31, 2021
shares
| |
Stock-Based Compensation Details | |
Stock-based awards issued (in shares) | 18,373 |
Minimum | |
Stock-Based Compensation Details | |
Equity share payout range | 0 |
Maximum | |
Stock-Based Compensation Details | |
Equity share payout range | 27,560 |
Equity share payout range, trailing period | 60 days |
Stock-Based Compensation - Performance Awards (Details) - PAs |
3 Months Ended |
---|---|
Mar. 31, 2021
shares
| |
Stock-Based Compensation Details | |
Stock-based awards issued (in shares) | 14,600 |
Minimum | |
Stock-Based Compensation Details | |
Equity share payout range | 0 |
Maximum | |
Stock-Based Compensation Details | |
Equity share payout range | 21,900 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 1,263 | $ 4,879 |
Effective income tax rate | 26.00% | 28.00% |
Segment Reporting (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021
USD ($)
branch
|
Mar. 31, 2020
USD ($)
|
|
Segment Reporting [Abstract] | ||
Number of branches | branch | 14 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 103,556 | $ 91,035 |
Gross profit | 54,560 | 48,921 |
Operating income | 4,810 | 18,638 |
Interest expense | 323 | 115 |
Other income (expense), net | 372 | (1,111) |
Income before income taxes | 4,859 | 17,412 |
Lawson | ||
Segment Reporting Information [Line Items] | ||
Revenue | 93,330 | 81,491 |
Gross profit | 50,408 | 45,120 |
Operating income | 4,256 | 18,094 |
Bolt Supply | ||
Segment Reporting Information [Line Items] | ||
Revenue | 10,226 | 9,544 |
Gross profit | 4,152 | 3,801 |
Operating income | $ 554 | $ 544 |
COVID-19 Risks and Uncertainties (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Mar. 27, 2020 |
|
Unusual Risk or Uncertainty [Line Items] | ||
Deferred employer side social security payments | $ 3.5 | |
Forecast | ||
Unusual Risk or Uncertainty [Line Items] | ||
Payments Of deferred employer payroll tax, CARES Act | $ 1.7 |
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