View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR
15(d) of The Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2005
LAWSON PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-10546 36-2229304
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1666 East Touhy Avenue, Des Plaines, Illinois 60018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 827-9666
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.
On April 27, 2005, Lawson Products, Inc. issued a press release
announcing its operating results for the quarter ended March 31, 2005. A copy of
the press release is attached as Exhibit 99.1 to this Form 8-K.
ITEM 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 Press release issued by Lawson Products, Inc. on April 27, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LAWSON PRODUCTS, INC.
Date: May 3, 2005 /s/ Thomas J. Neri
-----------------------------------
Name: Thomas J. Neri
Title: Executive Vice President,
Finance, Planning and Corporate
Development; Chief Financial
Officer; and Treasurer
LAWSON PRODUCTS, INC. ANNOUNCES RESULTS FOR FIRST QUARTER, 2005
Wednesday April 27, 8:10 am ET
DES PLAINES, Ill., April 27 /PRNewswire-FirstCall/ -- Lawson Products, Inc.
(Nasdaq: LAWS - News) reported first quarter 2005 net sales increased 6.4% to
$107.1 million, up $6.4 million from $100.7 million in the first quarter of
2004. Net income for the first quarter 2005 was $5.0 million or $.54 per diluted
share, representing a 21.7% decline compared to 2004 first quarter net income of
$6.5 million or $.69 per diluted share. First quarter 2005 net income per share
was 25.6% and $1.0 million higher than the $.43 per diluted share earned in the
fourth quarter of 2004.
First quarter 2005 earnings were impacted by higher product costs that were
temporarily absorbed by the Company resulting in lower gross profit margins,
higher operating costs related to compensation costs for performance- based
management incentive programs and the addition of marketing and technology
personnel, and a higher effective tax rate.
In the first quarter, sales in the Maintenance, Repair and Operations (MRO)
segment grew by 6.3%, and in the Original Equipment Manufacturing (OEM) segment
sales grew by 6.9% over the comparable period in the prior year. Sales growth
was driven by the addition of new customers and improved penetration of existing
customers.
Consolidated gross profit margins were 61.2% in the first quarter 2005,
comparable to the 61.5% reported for the fourth quarter of 2004 and lower than
the 65.0% reported for the first quarter of 2004. "We have felt the impact of
raw material shortages and cost increases that started during mid-2004 and are
continuing. Our first priority is to continue to assure ready availability of
our complete lines to our customers," stated Robert J. Washlow, Chairman of the
Board and CEO. Washlow continued, "The Company's management intends to maintain
and enhance net profit margins through the implementation of various purchasing,
cost management, marketing and technology initiatives."
Operating expenses increased by 3.9% to $57.5 million compared to $55.3 million
in the first quarter of 2004, driven by higher compensation costs in the
marketing and technology areas where Lawson is implementing various long- term
programs, intended to enhance profitable growth. Compensation expenses in the
first quarter 2005 also reflect costs associated with the Long-Term Capital
Accumulation Plan and performance-based incentive plans for management
implemented in 2004. Due to the timing of the adoption of those plans, no
expenses were recorded for those plans in the first quarter of 2004.
First quarter operating results were negatively affected by a higher tax rate
than the prior year first quarter. The effective tax rate of 42.3% for the
quarter was 4.3 percentage points higher than the 38.0% rate in the same quarter
in 2004. This increase is primarily due to foreign operating losses in 2005, for
which no tax benefit was realized, resulting from reduced sales volume from a
large customer.
During the quarter, Lawson announced an 11% increase in its quarterly dividend
and continued repurchasing its outstanding shares. Approximately $5.7 million
was expended on the repurchase of 117,972 shares. At the end of the first
quarter, 419,191 shares remained under the current share repurchase
authorization.
Lawson Products is an international seller and distributor of systems, services
and products to the industrial, commercial, governmental and institutional
maintenance, repair and replacement marketplaces. The Company also manufactures,
sells and distributes production and specialized component parts and services to
the original equipment marketplace, including the automotive, appliance,
aerospace, construction and transportation industries.
This press release, including Mr. Washlow's statements, contains certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. The terms
"may," "should," "could," "anticipate," "believe," "continues," "estimate,"
"expect," "intend," "objective," "plan," "potential," "protect," and similar
expressions are intended to identify forward-looking statements. These
statements are based on management's current expectations, intentions, or
beliefs and are subject to a number of factors, assumptions, and uncertainties
that could cause actual results to differ materially from those described in the
forward-looking statements. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult
to predict. Factors that could cause or contribute to such differences include,
but are not limited to, those related to general economic conditions and market
conditions in the original equipment manufacturers and maintenance, repair and
replacement distribution industries in North America and to a lesser extent, the
United Kingdom, the Company's ability to obtain new customers and manage growth,
material or labor cost increases, competition in the Company's businesses, risks
of the Company's inventory becoming obsolete, operating margin risk due to
competitive pricing and operating efficiencies, seasonality, effectiveness of
our sales and marketing programs, and the length and frequency of economic
downturns in the Company's markets and other risks identified in the Company's
Annual Report on Form 10-K for the year ended December 31, 2004. The Company
undertakes no obligation to update any such factor or to publicly announce the
results of any revisions to any forward-looking statements contained herein
whether as a result of new information, future events or otherwise.
LAWSON PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
2005 2004
Net Sales $107,081,833 $100,657,758
Gross Profit 65,564,024 65,397,222
Operating Expenses 57,481,726 55,335,437
Operating Income 8,082,298 10,061,785
Income Before Taxes 8,585,873 10,527,262
Provision for Income Taxes 3,630,000 4,001,000
Net Income $4,955,873 $6,526,262
Net Income per share of Common Stock:
Basic $0.54 $0.69
Diluted $0.54 $0.69
Weighted Average Shares Outstanding:
Basic 9,208,285 9,486,789
Diluted 9,232,124 9,515,152
Condensed Consolidated Balance Sheets
Lawson Products, Inc. and Subsidiaries
March 31, December 31,
2005 2004
(UNAUDITED)
Current Assets:
Cash and Cash Equivalents $22,956,787 $28,871,594
Receivables, Net 51,913,994 52,129,231
Inventories, Net 69,036,350 65,686,622
Other Current Assets 10,403,073 11,289,142
Total Current Assets 154,310,204 157,976,589
Property, Plant and Equipment, Net 41,211,059 42,452,261
Other Assets, Net 60,769,539 60,120,733
Total Assets $256,290,802 $260,549,583
Current Liabilities $40,423,222 $42,947,151
Other Noncurrent Liabilities 38,101,542 37,270,975
Stockholders' Equity 177,766,038 180,331,457
Total Liabilities and Equity $256,290,802 $260,549,583
Source: Lawson Products, Inc.