Date of Report (Date of earliest event reported): |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) | ||||||||||||||||
(Registrant's telephone number, including area code) |
Not Applicable | ||
(Former name or former address, if changed since last report) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
LAWSON PRODUCTS, INC. | |||||||||||
(Registrant) | |||||||||||
Date: | July 29, 2021 | By: /s/ Ronald J. Knutson | |||||||||
Name: Ronald J. Knutson | |||||||||||
Title: Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit Number | Description | |||||||
Summary Financial Highlights | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||||
($ in millions, except earnings per share data) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||
Net Sales | $106.5 | $72.1 | 47.7% | $210.1 | $163.2 | 28.8% | ||||||||||||||||||||||||||||||||
Average Daily Net Sales | $1.665 | $1.127 | 47.7% | $1.654 | $1.275 | 29.7% | ||||||||||||||||||||||||||||||||
Number of Business Days | 64 | 64 | 127 | 128 | ||||||||||||||||||||||||||||||||||
Reported Operating Income | $3.4 | $0.6 | 494.4% | $8.2 | $19.2 | (57.3)% | ||||||||||||||||||||||||||||||||
Adjusted Operating Income (1) | $6.8 | $4.8 | 43.0% | $14.1 | $12.7 | 11.0% | ||||||||||||||||||||||||||||||||
Adjusted EBITDA (1) | $8.8 | $6.3 | 40.5% | $18.0 | $15.7 | 14.6% | ||||||||||||||||||||||||||||||||
Adjusted EBITDA Margin (1) | 8.3% | 8.7% | (42 bps) | 8.6% | 9.6% | (108 bps) | ||||||||||||||||||||||||||||||||
Reported Diluted Earnings Per Share | $0.31 | $0.07 | $0.24 | $0.70 | $1.41 | $(0.71) | ||||||||||||||||||||||||||||||||
Adjusted Diluted Earnings Per Share (2) | $0.60 | $0.37 | $0.23 | $1.17 | $0.93 | $0.24 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net sales | 106,540 | 72,146 | 210,096 | 163,181 | |||||||||||||||||||
Cost of goods sold | 51,920 | 33,833 | 100,916 | 75,947 | |||||||||||||||||||
Gross profit | 54,620 | 38,313 | 109,180 | 87,234 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling expenses | 24,235 | 16,306 | 48,037 | 36,290 | |||||||||||||||||||
General and administrative expenses | 27,003 | 21,438 | 52,951 | 31,737 | |||||||||||||||||||
Operating expenses | 51,238 | 37,744 | 100,988 | 68,027 | |||||||||||||||||||
Operating income | 3,382 | 569 | 8,192 | 19,207 | |||||||||||||||||||
Interest expense | (268) | (72) | (591) | (187) | |||||||||||||||||||
Other income (expense), net | 639 | 511 | 1,011 | (600) | |||||||||||||||||||
Income before income taxes | 3,753 | 1,008 | 8,612 | 18,420 | |||||||||||||||||||
Income tax expense | 818 | 389 | 2,081 | 5,268 | |||||||||||||||||||
Net income | $ | 2,935 | $ | 619 | $ | 6,531 | $ | 13,152 | |||||||||||||||
Basic income per share of common stock | $ | 0.32 | $ | 0.07 | $ | 0.72 | $ | 1.46 | |||||||||||||||
Diluted income per share of common stock | $ | 0.31 | $ | 0.07 | $ | 0.70 | $ | 1.41 |
June 30, | December 31, | ||||||||||
2021 | 2020 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 5,855 | $ | 28,393 | |||||||
Restricted cash | 1,003 | 998 | |||||||||
Accounts receivable, less allowance for doubtful accounts of $680 and $654, respectively | 46,228 | 44,515 | |||||||||
Inventories, net | 63,029 | 61,867 | |||||||||
Miscellaneous receivables and prepaid expenses | 7,545 | 7,289 | |||||||||
Total current assets | 123,660 | 143,062 | |||||||||
Property, plant and equipment, net | 17,439 | 15,800 | |||||||||
Deferred income taxes | 19,456 | 18,482 | |||||||||
Goodwill | 35,674 | 35,176 | |||||||||
Cash value of life insurance | 16,895 | 16,185 | |||||||||
Intangible assets, net | 17,592 | 18,503 | |||||||||
Right of use assets | 13,483 | 8,764 | |||||||||
Other assets | 329 | 332 | |||||||||
Total assets | $ | 244,528 | $ | 256,304 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | 23,787 | 22,262 | |||||||||
Accrued acquisition liability | — | 32,673 | |||||||||
Lease obligation | 4,417 | 4,568 | |||||||||
Accrued expenses and other liabilities | 38,024 | 38,492 | |||||||||
Total current liabilities | 66,228 | 97,995 | |||||||||
Revolving line of credit | 5,000 | — | |||||||||
Security bonus plan | 10,958 | 11,262 | |||||||||
Lease obligation | 10,611 | 5,738 | |||||||||
Deferred compensation | 11,493 | 10,461 | |||||||||
Deferred tax liability | 3,560 | 2,841 | |||||||||
Other liabilities | 5,780 | 5,585 | |||||||||
Total liabilities | 113,630 | 133,882 | |||||||||
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 - 9,304,366 and 9,287,625 shares, respectively Outstanding - 9,077,512 and 9,061,039 shares, respectively | 9,304 | 9,288 | |||||||||
Capital in excess of par value | 20,798 | 19,841 | |||||||||
Retained earnings | 108,140 | 101,609 | |||||||||
Treasury stock – 226,854 and 226,586 shares, respectively | (9,028) | (9,015) | |||||||||
Accumulated other comprehensive income (loss) | 1,684 | 699 | |||||||||
Total stockholders’ equity | 130,898 | 122,422 | |||||||||
Total liabilities and stockholders’ equity | $ | 244,528 | $ | 256,304 |
LAWSON PRODUCTS, INC. | ||
SEC REGULATION G GAAP RECONCILIATIONS |
Table 1 - Reconciliation of GAAP Operating Income to Adjusted Non-GAAP Operating Income and Adjusted EBITDA | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||||||||||
Operating income as reported per GAAP | $ | 3,382 | $ | 4,810 | $ | 569 | $ | 8,192 | $ | 19,207 | |||||||||||||||||||
Stock-based compensation (1) | 1,574 | 1,000 | 3,187 | 2,574 | (7,513) | ||||||||||||||||||||||||
Inventory reserves (2) | 500 | 825 | — | 1,325 | — | ||||||||||||||||||||||||
Severance and employee acquisition costs | 29 | 576 | 1,025 | 605 | 1,032 | ||||||||||||||||||||||||
Costs related to potential acquisitions (3) | 1,354 | — | — | 1,354 | — | ||||||||||||||||||||||||
Adjusted non-GAAP operating Income | 6,839 | 7,211 | 4,781 | 14,050 | 12,726 | ||||||||||||||||||||||||
Depreciation and amortization | 2,004 | 1,935 | 1,511 | 3,939 | 3,020 | ||||||||||||||||||||||||
Non-GAAP adjusted EBITDA | $ | 8,843 | $ | 9,146 | $ | 6,292 | $ | 17,989 | $ | 15,746 |
Three Months Ended | |||||||||||||||||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | |||||||||||||||||||||||||||||||||
Amount | Diluted EPS (5) | Amount | Diluted EPS (5) | Amount | Diluted EPS (5) | ||||||||||||||||||||||||||||||
Net income, as reported per GAAP | $ | 2,935 | $ | 0.31 | $ | 3,596 | $ | 0.39 | $ | 619 | $ | 0.07 | |||||||||||||||||||||||
Pretax adjustments: | |||||||||||||||||||||||||||||||||||
Stock-based compensation (1) | 1,574 | 0.17 | 1,000 | 0.11 | 3,187 | 0.34 | |||||||||||||||||||||||||||||
Inventory reserves (2) | 500 | 0.05 | 825 | 0.09 | — | — | |||||||||||||||||||||||||||||
Severance expense and employee acquisition costs | 29 | — | 576 | 0.06 | 1,025 | 0.11 | |||||||||||||||||||||||||||||
Costs related to potential acquisitions (3) | 1,354 | 0.15 | — | — | — | — | |||||||||||||||||||||||||||||
Pretax adjustments | 3,457 | 0.37 | 2,401 | 0.26 | 4,212 | 0.45 | |||||||||||||||||||||||||||||
Tax effect (4) | (754) | (0.08) | (624) | (0.07) | (1,365) | (0.15) | |||||||||||||||||||||||||||||
Total adjustments, net of tax | 2,703 | 0.29 | 1,777 | 0.19 | 2,847 | 0.30 | |||||||||||||||||||||||||||||
Non-GAAP adjusted net income | $ | 5,638 | $ | 0.60 | $ | 5,373 | $ | 0.58 | $ | 3,466 | $ | 0.37 |
Six Months Ended | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | ||||||||||||||||||||||
Amount | Diluted EPS (5) | Amount | Diluted EPS (5) | ||||||||||||||||||||
Net income, as reported per GAAP | $ | 6,531 | $ | 0.70 | $ | 13,152 | $ | 1.41 | |||||||||||||||
Pretax adjustments: | |||||||||||||||||||||||
Stock-based compensation (1) | 2,574 | 0.28 | (7,513) | (0.81) | |||||||||||||||||||
Inventory reserves (2) | 1,325 | 0.14 | — | — | |||||||||||||||||||
Severance expense and employee acquisition costs | 605 | 0.06 | 1,032 | 0.12 | |||||||||||||||||||
Costs related to potential acquisitions (3) | 1,354 | 0.15 | — | — | |||||||||||||||||||
Pretax adjustments | 5,858 | 0.63 | (6,481) | (0.69) | |||||||||||||||||||
Tax effect (4) | (1,418) | (0.16) | 1,854 | 0.21 | |||||||||||||||||||
Total adjustments, net of tax | 4,440 | 0.47 | (4,627) | (0.48) | |||||||||||||||||||
Non-GAAP adjusted net income | $ | 10,971 | $ | 1.17 | $ | 8,525 | $ | 0.93 |
Table 3 - Historic Lawson Segment (Including Partsmaster) Sales and Sales Rep Productivity | |||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Jun. 30, 2021 | Mar. 31 2021 | Dec. 31 2020 | Sep. 30 2020 | Jun. 30 2020 | |||||||||||||||||||||||||
Number of business days | 64 | 63 | 61 | 64 | 64 | ||||||||||||||||||||||||
Average daily net sales (1) | $ | 1,471 | $ | 1,473 | $ | 1,439 | $ | 1,240 | $ | 979 | |||||||||||||||||||
Year over year increase (decrease) | 50.3 | % | 16.4 | % | 12.5 | % | (4.2) | % | (25.6) | % | |||||||||||||||||||
Sequential quarter increase (decrease) | (0.1) | % | 2.4 | % | 16.0 | % | 26.7 | % | (22.6) | % | |||||||||||||||||||
Average active sales rep. count (1), (2) | 1,081 | 1,083 | 1,099 | 993 | 957 | ||||||||||||||||||||||||
Period-end active sales rep count | 1,086 | 1,079 | 1,090 | 1,120 | 938 | ||||||||||||||||||||||||
Sales per rep. per day | $ | 1.361 | $ | 1.360 | $ | 1.309 | $ | 1.249 | $ | 1.023 | |||||||||||||||||||
Year over year increase (decrease) | 33.0 | % | 7.3 | % | 2.6 | % | (4.6) | % | (23.8) | % | |||||||||||||||||||
Sequential quarter increase (decrease) | 0.1 | % | 3.9 | % | 4.8 | % | 22.1 | % | (19.3) | % |
Table 4 - Consolidated Quarterly Results | |||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Jun. 30 2021 | Mar. 31 2021 | Dec. 31 2020 | Sep. 30 2020 | Jun. 30 2020 | |||||||||||||||||||||||||
Average daily net sales | $ | 1,665 | $ | 1,644 | $ | 1,609 | $ | 1,411 | $ | 1,127 | |||||||||||||||||||
Year over year increase (decrease) | 47.7 | % | 15.6 | % | 10.8 | % | (4.7) | % | (25.0) | % | |||||||||||||||||||
Sequential quarter increase (decrease) | 1.3 | % | 2.2 | % | 14.0 | % | 25.2 | % | (20.7) | % | |||||||||||||||||||
Net Sales | $ | 106,540 | $ | 103,556 | $ | 98,133 | $ | 90,277 | $ | 72,146 | |||||||||||||||||||
Gross profit | 54,620 | 54,560 | 52,079 | 47,225 | 38,313 | ||||||||||||||||||||||||
Gross profit percentage | 51.3 | % | 52.7 | % | 53.1 | % | 52.3 | % | 53.1 | % | |||||||||||||||||||
Selling, general & administrative expenses | $ | 51,238 | $ | 49,750 | $ | 52,737 | $ | 45,224 | $ | 37,744 | |||||||||||||||||||
Operating income (loss) | $ | 3,382 | $ | 4,810 | $ | (658) | $ | 2,001 | $ | 569 |
Cover |
Jul. 29, 2021 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Jul. 29, 2021 |
Entity Registrant Name | LAWSON PRODUCTS, INC. |
Amendment Flag | false |
Entity Central Index Key | 0000703604 |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 0-10546 |
Entity Tax Identification Number | 36-2229304 |
Entity Address, Address Line One | 8770 W. Bryn Mawr Ave., Suite 900, |
Entity Address, City or Town | Chicago, |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60631 |
City Area Code | (773) |
Local Phone Number | 304-5050 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common stock, $1.00 par value |
Trading Symbol | LAWS |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
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