Lawson Products Reports Net Surge

DES PLAINES, Ill., Oct. 19 /PRNewswire/ -- Lawson Products, Inc. (Nasdaq: LAWS), Thursday reported net income for the third quarter increased 8.8 percent to $6,378,000. Net income for the nine months ended September 30, 2000 rose 20.1 percent to $19,539,000. Diluted net income per share increased 14 percent to $.65 for the third quarter. For the nine months ended September 30, 2000, diluted net income per share was $1.97, an increase of 27.1 percent. Diluted net income per share was positively impacted by a common stock repurchase program.

The improvement in net income is attributable to sales gains and continual monitoring of costs by the Company's management. Increases in net income have been achieved for seven consecutive quarters.

For the third quarter, net sales increased 3.5 percent to $85,424,000. Net sales for the nine-month period ended September 30, 2000 were $256,045,000, an improvement of 9 percent. New customers, greater penetration of the current customer base, and the contribution from our newest subsidiary, ACS/SIMCO, acquired July 1, 1999 were factors in the sales increases.

Lawson Products is an international seller and distributor of systems, services and products to the industrial, commercial and institutional maintenance, repair and replacement market. The company also manufactures, sells and distributes production and specialized component parts to the original equipment marketplace including the automotive, appliance, aerospace, construction and transportation industries. The company's major product lines include fasteners, parts, chemical specialties, hardware, welding supplies and accessories, pneumatics, hydraulic and other flexible hose fittings, tools, safety items and electrical and shop supplies.

This press release contains historical information and forward-looking statements and opinions. Statements looking forward in time are included in this press release pursuant to the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The factors that could cause actual results to differ materially from those described in the forward-looking statements include increased competition, seasonality, or an economic downturn.

                    LAWSON PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED SUMMARY OF OPERATIONS
                                 (UNAUDITED)

                                       Three Months Ended September 30,

                                    2000           1999            % Change

    Net Sales                   $85,424,122     $82,515,401          3.5%
    Income
     Before Taxes (a)            10,735,659       9,942,055          8.0%

    Provision
     for Income Taxes             4,358,000       4,081,000            --

    Net Income (a) (b)           $6,377,659      $5,861,055          8.8%

    Net Income per share
     of Common Stock:
       Basic                          $0.66           $0.57         15.8%
       Diluted                        $0.65           $0.57         14.0%

    Weighted Average
     Shares Outstanding:
       Basic                      9,718,296      10,353,822            --
       Diluted                    9,736,908      10,360,392            --


                                       Nine Months Ended September 30,

                                   2000            1999            % Change

    Net Sales                  $256,045,371    $234,910,344          9.0%

    Income
     Before Taxes (a)            33,024,193      27,649,610         19.4%

    Provision
     for Income Taxes            13,485,000      11,386,000            --

    Net Income (a) (b)          $19,539,193     $16,263,610         20.1%

    Net Income per share
      of Common Stock:
        Basic                         $1.97           $1.55         27.1%
        Diluted                       $1.97           $1.55         27.1%

    Weighted Average Shares
      Outstanding:
        Basic                     9,905,572      10,500,122            --
        Diluted                   9,917,479      10,501,551            --

    (a) The Company uses estimated gross profit rates to determine inventories
        and cost of goods sold during interim periods.

    (b) In the second quarter of 2000, the Company recorded a special charge
        of $145,000, net of income tax benefit of $95,000, for
        severance benefits, while in the second quarter of 1999, the Company
        recorded a special charge of $1,237,000, net of income tax
        benefit of $816,000, for severance and early retirement benefits in
        connection with previously announced management changes.
        Additionally, in the second quarter of 1999, a gain of $554,000, net
        of income taxes of $369,000, was recorded on the sale of
        marketable securities.  Excluding the effects of these items, net
        income for the nine month period ended September 30, 2000 was
        approximately $19,684,000 ($1.98 per diluted share), an increase of
        16.2%.

SOURCE Lawson Products, Inc.
CONTACT: Joseph L. Pawlick, Chief Financial Officer of Lawson Products, Inc., 847-827-9666,