Lawson Products, Inc. Reports Record Sales and Higher Net Income for 2004
DES PLAINES, Ill., Feb 16, 2005 /PRNewswire-FirstCall via COMTEX/ -- Lawson Products, Inc. (Nasdaq: LAWS) reported 2004 net income of $21.4 million, or $2.27 per share (fully diluted), up 33.5% from $1.70 per share in 2003. Net sales for 2004 were a record $419.7 million, an increase of 7.9% over 2003.
Lawson's operating income increased by 35.5% in 2004, as operating expenses increased at a much slower rate than the overall sales growth rate achieved for the year. Effective cost management provided significant operating income leverage on Lawson's sales growth, resulting in improved operating income as a percentage of sales at 7.3% in 2004 compared to 5.8% in 2003.
"The Company's 2004 operating results demonstrate the operating leverage of our businesses, resulting in substantial earnings growth. In addition, Lawson's balance sheet continues its long history of excellence, with no long- term debt and approximately $29.0 million of cash and cash equivalents at December 31, 2004," said Robert J. Washlow, Chairman of the Board and CEO.
Fourth quarter and year-end 2004 pre-tax earnings include the impact of $1.7 million and $2.6 million, respectively, for expenses related to stock appreciation rights. Those expenses reflect the accounting for the impact of the 51.8% increase in Lawson's common stock price from $33.07 at December 31, 2003 to $50.19 at December 31, 2004. Fourth quarter operating income increased 30.1% over last year to $4.2 million, driven by 10.9% quarterly sales growth over the prior year despite the increased expense for stock appreciation rights.
Net sales by business segment compared to the prior year periods are
presented below:
(Millions $) Fourth Quarter Year End December 31, 2004
2004 2003 % Change 2004 2003 % Change
MRO $87.0 $79.2 9.8% $337.9 $321.0 5.3%
OEM 20.2 17.4 16.1% 81.8 68.1 20.1%
Total $107.2 $96.6 10.9% $419.7 $389.1 7.9%
In the fourth quarter, sales in the Maintenance, Repair and Operations (MRO) segment grew by 9.8% and sales in the Original Equipment Manufacture (OEM) segment grew by 16.1%. In addition to enhanced account penetration and the development of new customers throughout 2004, both business segments benefited from an improved business climate.
"We are encouraged by the execution of our sales and marketing strategies, and intend to continue building on the positive momentum experienced as we moved through 2004," stated Washlow.
During 2004, the Company repurchased 249,236 shares of its common stock. As of the date of this release, the Company is authorized to repurchase up to 447,306 additional shares 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. Lawson Products, Inc. - The Single Source of Supply keeping businesses running at the Lowest Overall Cost.
This press release, including Mr. Washlow's comments, may contain 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, effectiveness of our sales and marketing programs, or an economic downturn.
Lawson Products, Inc and Subsidiaries
Condensed Consolidated Summary of Operations
Fourth Quarter Year End December 31
(unaudited) (unaudited)
2004 2003 2004 2003
Net Sales $107,171,700 $96,606,857 $419,652,464 $389,091,462
Gross Profit 65,925,076 60,413,444 263,681,455 247,967,329
Operating Expenses 61,680,661 57,151,469 232,870,229 225,226,545
Operating Income 4,244,415 3,261,975 30,811,226 22,740,784
Income before
Taxes 5,136,660 4,077,678 33,437,921 24,892,104
Provision for
Income Taxes (a) 1,141,000 145,000 12,013,000 8,696,000
Net Income $3,995,660 $3,932,678 $21,424,921 $16,196,104
Net Income per share
of Common Stock
Basic $0.43 $0.41 $2.28 $1.71
Diluted $0.43 $0.41 $2.27 $1.70
Weighted Average
Shares Outstanding
Basic 9,318,487 9,492,586 9,409,855 9,491,726
Diluted 9,343,404 9,519,033 9,429,796 9,510,865
(a) In the fourth quarter of 2004, income tax expense was favorably
impacted approximately $560,000 for tax-exempt income related to
executive life insurance and charitable contributions of inventory.
Income tax expense for the fourth quarter of 2003 included a
$2,157,000 reduction to reflect the partial utilization of a capital
loss carry-back.
Lawson Products, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
December 31, December 31,
2004 2003
Current Assets:
Cash and Cash Equivalents $28,871,594 $23,555,050
Receivables, Net 52,129,231 47,971,828
Inventories, Net 65,686,622 59,816,669
Other Current Assets 11,289,142 13,413,844
Total Current Assets 157,976,589 144,757,391
Property, Plant and Equipment, Net 42,452,261 44,904,865
Other Assets, Net 60,120,733 57,279,356
Total Assets $260,549,583 $246,941,612
Current Liabilities $42,947,151 $36,877,569
Long Term Debt --- 1,572,643
Other Noncurrent Liabilities 37,270,975 35,141,265
Stockholders' Equity 180,331,457 173,350,135
Total Liabilities and Equity $260,549,583 $246,941,612
SOURCE Lawson Products, Inc.
Thomas Neri, Executive Vice President, Finance, Planning & Corporate Development of Lawson Products, Inc., +1-847-827-9666
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