-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JBfS3qOcxLmi7MzHiMadq5AXoPuezdJ/m6hb+YxzteHwubucWwAzLJepfNEg6fbh Re3hsaa98Oanb3YcAXZx5A== 0000950152-04-003412.txt : 20040430 0000950152-04-003412.hdr.sgml : 20040430 20040430130542 ACCESSION NUMBER: 0000950152-04-003412 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040430 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAMSON & SESSIONS CO CENTRAL INDEX KEY: 0000057497 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 340349210 STATE OF INCORPORATION: OH FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00313 FILM NUMBER: 04768652 BUSINESS ADDRESS: STREET 1: 25701 SCIENCE PARK DR CITY: CLEVELAND STATE: OH ZIP: 44122-7313 BUSINESS PHONE: 2164643400 MAIL ADDRESS: STREET 1: 25701 SCIENCE PARK DR CITY: CLEVELAND STATE: OH ZIP: 44122 8-K 1 l07241ae8vk.txt THE LAMSON & SESSIONS CO. 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 30, 2004 The Lamson & Sessions Co. ------------------------- (Exact Name of Registrant as Specified in its Charter) Ohio 1-313 34-0349210 -------------------------------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.)
25701 Science Park Drive, Cleveland, Ohio 44122-7313 --------------------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (216) 464-3400 -------------- Not Applicable -------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. Number Description ------ ----------- 99.1 Press Release, dated April 30, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 30, 2004, The Lamson & Sessions Co. issued a press release announcing its earnings for the first quarter of 2004. A copy of such press release is included as Exhibit 99.1 hereto. This Form 8-K and the attached Exhibit are provided under Item 12 of Form 8-K and are furnished to, but not filed with, the SEC. 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. THE LAMSON & SESSIONS CO. Dated: April 30, 2004 By: /s/ James J. Abel ----------------------- James J. Abel Executive Vice President, Secretary, Treasurer and Chief Financial Officer EXHIBIT INDEX ------------- Number Description ------ ----------- 99.1 Press Release, dated April 30, 2004. EX-99.1 2 l07241aexv99w1.txt EX-99.1 PRESS RELEASE DATED APRIL 30, 2004 EXHIBIT 99.1 FOR IMMEDIATE RELEASE LAMSON & SESSIONS REPORTS STRONG FIRST QUARTER 2004 RESULTS - - NET SALES RISE 6.1 PERCENT TO $84.3 MILLION - - DILUTED EARNINGS PER SHARE IMPROVE TO 12 CENTS FOR THE FIRST QUARTER VERSUS 2 CENTS IN FIRST QUARTER OF 2003 - - SALES IMPROVE IN ELECTRICAL, TELECOM AND HOME PRODUCTS MARKETS CLEVELAND, Ohio, April 30, 2004 - Lamson & Sessions (NYSE:LMS) today announced first quarter net income of $1.7 million, or 12 cents per diluted share, compared with $226,000, or 2 cents per diluted share, in the first quarter of 2003. Net sales in the first quarter of 2004 rose to $84.3 million, or a 6.1 percent increase over the $79.4 million reported in the first quarter of 2003. Due to differences in the Company's fiscal calendar, the first quarter of 2004 had only 13 weeks, whereas the first quarter of 2003 represented a 14-week period. Net income from continuing operations (after tax) was $1.3 million, or 9 cents per diluted share. Included in this result is a gain of $924,000 on the sale of the Company's manufacturing plant in Pasadena, Texas. In addition, the Company's 2004 first quarter net income includes income from discontinued operations of $401,000 (net of tax), or 3 cents per diluted share, representing the recovery of a note receivable, which was fully reserved in 2003 and relates to a discontinued operation. "We are encouraged by the significant increase in sales order activity in March, which exceeded the average of the previous two months by 34 percent," said John B. Schulze, Chairman, President and Chief Executive Officer. "This improved market strength sets us on a good course for the rest of the year." While the Company's gross margin improved by 4 percent, to 17.3 percent of net sales, further improvements in product mix and passing through raw material cost increases to customers must occur in order to return all of the Company's business segments to profitability. The cost of the Company's primary raw material, polyvinyl chloride (PVC) resin, rose 8 percent in the first quarter and is expected to continue to increase steadily throughout the second quarter. Business Segments Carlon experienced more than 12 percent growth in net sales as demand improved for electrical and telecom products. Increased business activity has resulted in stronger unit demand, greater overhead absorption in the operating facilities and improved operating income. Raw material cost increases continue to strain margin levels, and the realization of announced selling price increases will become better known as the second quarter progresses. Lamson Home Products' net sales rose more than 13 percent as this segment continues to benefit from market share gains announced in the second half of 2003. Operating income is down 9 percent from the prior-year first quarter due to higher raw material costs and transition costs associated with the market share gains. The PVC Pipe segment experienced a decrease of nearly 7 percent in net sales due to weak market conditions in January and February. Volume and pricing improved consistently late in the quarter, but raw material cost increases for PVC resin outpaced the improvement in selling prices. The Company anticipates some improvement in pricing if demand continues to strengthen in the second quarter. Working capital efficiency showed a positive trend in the first quarter of 2004 as inventory turns and accounts receivable days sales outstanding (DSOs) improved. The inventory turn ratio rose to 6.8 turns in the first quarter of 2004, and compared favorably with 6.3 turns and 4.6 turns in the first quarters of 2003 and 2002, respectively. If present business volume levels continue throughout the year, the Company anticipates that inventory turns will continue to improve in the subsequent quarters of 2004. Accounts receivable DSOs were 45.1 days in the first quarter of 2004, continuing the improvement the Company has achieved in this area during the past two years. The DSOs in the first quarters of 2003 and 2002 were 46.6 days and 49.7 days, respectively. The Company's debt level and ratios were relatively unchanged in the first quarter, compared with the fourth quarter of 2003. Typically, the first quarter is a period of increasing working capital investment at the start of the spring construction season. Outlook Earlier this month, the Company raised its range of projected earnings for the year to 39 to 43 cents per diluted share for 2004, compared with net earnings of 27 cents per diluted share from continuing operations for 2003. This revised earnings range could improve if present sales order trends continue and improved pricing levels are realized. While overall business activity clearly has been on the rise over the past six weeks, the Company has experienced little improvement from the commercial and industrial construction markets. Office vacancy rates remain very high. The Company's expectation is that it will be mid-to-late 2004 before improvement begins in these key markets. 2 of 7 Conference Call: A live Internet broadcast of the Company's conference call regarding its first quarter financial performance can be accessed via the Investor Relations page on the Company's Web site (www.lamson-sessions.com) at 2:00 p.m. Eastern Time on Friday, April 30, 2004. Lamson & Sessions is a leading producer of thermoplastic enclosures, fittings, wiring outlet boxes and conduit for the electrical, telecommunications, consumer, power and wastewater markets. For additional information, please visit our Web site at: www.lamson-sessions.com. This press release contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expected as a result of a variety of factors, such as: (i) the volatility of resin pricing, (ii) the ability of the Company to pass through raw material cost increases to its customers, (iii) maintaining a stable level of housing starts, telecommunications infrastructure spending, consumer confidence and general construction trends, (iv) the continued availability and reasonable terms of bank financing and (v) any adverse change in the recovery trend of the country's general economic condition affecting the markets for the Company's products. Because forward-looking statements are based on a number of beliefs, estimates and assumptions by management that could ultimately prove to be inaccurate, there is no assurance that any forward-looking statement will prove to be accurate. FOR FURTHER INFORMATION, PLEASE CONTACT: James J. Abel Executive Vice President and Chief Financial Officer Lamson & Sessions (216) 766-6557 3 of 7 THE LAMSON & SESSIONS CO. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share data)
FIRST QUARTER ENDED -------------------------------------------------------------------- 2004 2003 ------------------ ------------------- NET SALES $ 84,286 100.0% $ 79,445 100.0% COST OF PRODUCTS SOLD 69,711 82.7% 66,174 83.3% ------------------ ------------------- GROSS PROFIT 14,575 17.3% 13,271 16.7% OPERATING EXPENSES 11,379 13.5% 10,677 13.4% OTHER (INCOME) (924) -1.1% - 0.0% ------------------ ------------------- OPERATING INCOME 4,120 4.9% 2,594 3.3% INTEREST 1,955 2.3% 2,213 2.8% ------------------ ------------------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 2,165 2.6% 381 0.5% INCOME TAX PROVISION 866 1.1% 155 0.2% ------------------ ------------------- INCOME FROM CONTINUING OPERATIONS 1,299 1.5% 226 0.3% INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX OF $256 401 0.5% - 0.0% ------------------ ------------------- NET INCOME $ 1,700 2.0% $ 226 0.3% ================== =================== BASIC EARNINGS PER SHARE: EARNINGS FROM CONTINUING OPERATIONS $ 0.09 $ 0.02 EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX 0.03 - ------------------ ------------------- NET EARNINGS $ 0.12 $ 0.02 ================== =================== AVERAGE SHARES OUTSTANDING 13,787 13,783 ================== =================== DILUTED EARNINGS PER SHARE: EARNINGS FROM CONTINUING OPERATIONS $ 0.09 $ 0.02 EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX 0.03 - ------------------ ------------------- NET EARNINGS $ 0.12 $ 0.02 ================== =================== DILUTED AVERAGE SHARES OUTSTANDING 13,958 13,789 ================== ===================
4 of 7 THE LAMSON & SESSIONS CO. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands)
Quarter Ended Year Ended Quarter Ended APRIL 3, 2004 JANUARY 3, 2004 APRIL 5, 2003 --------------------------- --------------------------- ------------------------- ACCOUNTS RECEIVABLE, NET $ 50,612 $ 38,196 $ 42,458 INVENTORIES, NET 36,397 30,143 37,227 OTHER CURRENT ASSETS 14,347 13,038 14,700 PROPERTY, PLANT AND EQUIPMENT, NET 48,508 51,326 50,408 GOODWILL 21,519 21,519 21,558 PENSION ASSETS 30,140 30,016 30,665 OTHER ASSETS 22,420 24,075 23,946 --------------------------- --------------------------- --------------------------- TOTAL ASSETS $ 223,943 $ 208,313 $ 220,962 =========================== =========================== =========================== ACCOUNTS PAYABLE $ 31,258 $ 16,928 $ 28,142 OTHER CURRENT LIABILITIES 39,093 40,098 35,570 LONG-TERM DEBT 84,104 82,990 91,766 OTHER LONG-TERM LIABILITIES 29,181 29,782 28,927 SHAREHOLDERS' EQUITY 40,307 38,515 36,557 --------------------------- --------------------------- --------------------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 223,943 $ 208,313 $ 220,962 =========================== =========================== ===========================
5 of 7 THE LAMSON & SESSIONS CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
FIRST QUARTER ENDED ------------------------------------------- 2004 2003 ------------------- ------------------- OPERATING ACTIVITIES NET INCOME $ 1,700 $ 226 ADJUSTMENTS TO RECONCILE NET INCOME TO CASH USED IN OPERATING ACTIVITIES: DEPRECIATION 2,328 2,289 AMORTIZATION 400 400 GAIN ON SALE OF FIXED ASSETS (924) - DEFERRED INCOME TAXES 957 109 NET CHANGE IN WORKING CAPITAL ACCOUNTS: ACCOUNTS RECEIVABLE (12,416) (5,772) INVENTORIES (6,254) (4,997) PREPAID EXPENSES AND OTHER (1,553) 250 ACCOUNTS PAYABLE 14,330 6,933 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (660) (7,050) OTHER LONG-TERM ITEMS (303) 510 ------------------- ------------------- CASH USED IN OPERATING ACTIVITIES (2,395) (7,102) INVESTING ACTIVITIES NET ADDITIONS TO PROPERTY, PLANT, AND EQUIPMENT (635) (948) REFUND OF DEPOSITS ON EQUIPMENT OPERATING LEASES 580 - PROCEEDS FROM SALE OF FIXED ASSETS 1,536 - ACQUISITIONS AND RELATED ITEMS (62) (250) ------------------- ------------------- CASH PROVIDED (USED) BY INVESTING ACTIVITIES 1,419 (1,198) FINANCING ACTIVITIES NET BORROWINGS UNDER SECURED CREDIT AGREEMENT 1,064 7,600 PAYMENT ON OTHER LONG-TERM BORROWINGS (186) (198) ------------------- ------------------- CASH PROVIDED BY FINANCING ACTIVITIES 878 7,402 ------------------- ------------------- DECREASE IN CASH AND CASH EQUIVALENTS (98) (898) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 468 1,496 ------------------- ------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 370 $ 598 =================== ===================
6 of 7 THE LAMSON & SESSIONS CO. BUSINESS SEGMENTS (In thousands)
First Quarter Ended -------------------------------------------------- 2004 2003 --------------------- ---------------------- NET SALES CARLON $ 38,163 $ 33,979 LAMSON HOME PRODUCTS 21,045 18,564 PVC PIPE 25,078 26,902 --------------------- ---------------------- $ 84,286 $ 79,445 ===================== ====================== OPERATING INCOME (LOSS) CARLON $ 3,639 $ 2,006 LAMSON HOME PRODUCTS 2,384 2,623 PVC PIPE (1,187) (701) CORPORATE OFFICE (1,640) (1,334) OTHER INCOME 924 - --------------------- ---------------------- $ 4,120 $ 2,594 ===================== ====================== DEPRECIATION AND AMORTIZATION CARLON $ 1,397 $ 1,727 LAMSON HOME PRODUCTS 470 433 PVC PIPE 861 529 --------------------- ---------------------- $ 2,728 $ 2,689 ===================== ======================
TOTAL ASSETS BY BUSINESS SEGMENT AT APRIL 3, 2004 AND JANUARY 3, 2004
APRIL 3, 2004 JANUARY 3, 2004 --------------------- ---------------------- IDENTIFIABLE ASSETS CARLON $ 79,833 $ 79,900 LAMSON HOME PRODUCTS 32,954 30,065 PVC PIPE 46,862 34,232 CORPORATE OFFICE (INCLUDES CASH, DEFERRED TAX, AND PENSION ASSETS) 64,294 64,116 --------------------- ---------------------- $ 223,943 $ 208,313 ===================== ======================
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