-----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, N2mLXpilkSvBi/XohmeWxeUJ2meuTiedXlIYy+ewa6PE9/tRCc2zxSd1uaU0T6LE 2RfRi2BfQlsm6i3neE4YVw== 0000950152-05-003707.txt : 20050429 0000950152-05-003707.hdr.sgml : 20050429 20050429122950 ACCESSION NUMBER: 0000950152-05-003707 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050429 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050429 DATE AS OF CHANGE: 20050429 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: 05783838 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 l13525ae8vk.txt LAMSON & SESSIONS FORM 8-K 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 29, 2005 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 -------------- - -------------------------------------------------------------------------------- (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)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 29, 2005, The Lamson & Sessions Co. issued a press release announcing its earnings for the first quarter 2005. A copy of such press release is included as Exhibit 99.1 hereto and incorporated herein by reference. This Form 8-K and the attached Exhibit are furnished to, but not filed with, the Securities and Exchange Commission. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits: Number Exhibit 99.1 Press release, dated April 29, 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. THE LAMSON & SESSIONS CO. By: /s/ James J. Abel ---------------------------------------- Name: James J. Abel Title: Executive Vice President, Secretary, Treasurer and Chief Financial Officer Dated: April 29, 2005 INDEX TO EXHIBITS
NUMBER EXHIBIT ------ ------- 99.1 Press release, dated April 29, 2005
EX-99.1 2 l13525aexv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE LAMSON & SESSIONS REPORTS STRONG FIRST QUARTER 2005 RESULTS o NET SALES RISE 19 PERCENT TO A RECORD $98.8 MILLION o DILUTED EARNINGS PER SHARE ROSE TO 15 CENTS FOR THE FIRST QUARTER OF 2005 VERSUS 12 CENTS IN FIRST QUARTER OF 2004 o COMPANY EXPECTS NET SALES TO GROW 10-12 PERCENT IN 2005 o NET INCOME AND DILUTED EARNINGS PER SHARE EXPECTED TO INCREASE 75-100 PERCENT FOR FULL YEAR CLEVELAND, Ohio, April 29, 2005 - Lamson & Sessions (NYSE:LMS) today announced record net sales of $98.8 million for the first quarter of 2005, an increase of 19.0 percent over the $83.0 million reported in the first quarter of 2004. Net sales improved by more than 10 percent in each of the Company's three business segments as sales order rates strengthened in its key markets of residential, commercial, industrial, utility and telecom infrastructure construction. Net income for the first quarter of 2005 rose to $2.2 million, or 15 cents per diluted share, compared with $1.7 million, or 12 cents per diluted share, in the first quarter of 2004. The prior-year first quarter includes income from discontinued operations of $401,000 (net of tax), or 3 cents per diluted share. Net income from continuing operations in the prior-year first quarter was $1.3 million, or 9 cents per diluted share, which amount includes pretax income of $924,000 ($554,000 net of tax, or 4 cents per diluted share) from the gain on the sale of a manufacturing facility, and a $300,000 ($180,000 net of tax, or 1 cent per diluted share) recovery from the Adelphia bankruptcy. "We are pleased to see improving demand activity across several of our markets, particularly in telecom infrastructure and non-residential construction," said John B. Schulze, Chairman, President and Chief Executive Officer. "These improving market conditions have allowed us to recover part of the significant increases which we continue to experience in our raw material costs." The Company's gross margin improved to 17.2 percent in the first quarter of 2005, from 16.0 percent in the first quarter of 2004. This improvement was primarily due to a more favorable product mix, higher sales prices and productivity improvements in the Company's operating facilities. Operating expenses increased 12.2 percent to $11.4 million in the first quarter, compared with $10.1 million in the prior-year first quarter, reflecting higher selling and marketing costs to support the significantly higher net sales level. As a percent of sales, operating expense for the first quarter of 2005 decreased to 11.5 percent from the 12.2 percent level reported in the first quarter of 2004. Business Segments All three of the Company's business segments experienced net sales growth in excess of 10 percent and were profitable in the first quarter of 2005. Carlon reported net sales growth greater than 23 percent primarily due to a 35 percent growth rate in telecom product sales supporting the industry's fiber-to-the-premise projects, and some strengthening in non-residential construction activity. This improved demand has allowed Carlon to recover some of the increases in raw material costs it is experiencing. Despite the increased sales, Carlon's operating income was virtually flat in the first quarter of 2005 compared with the prior-year period, which reflects the challenge of recovering the higher raw material costs. Lamson Home Products' net sales rose by 21.3 percent in the first quarter of 2005, compared with the first quarter of 2004, primarily due to product line expansions at key accounts and higher selling prices, which allowed the business segment to recover a portion of the higher raw material costs it is experiencing. Lamson Home Products' operating income rose to $3.6 million as a result of improved product mix, restrained growth in distribution costs and a partial recovery of higher raw material costs. PVC Pipe net sales grew by 10.1 percent to $27.6 million due to higher selling prices for electrical conduit and a favorable product mix of large diameter sewer pipe. The business segment's operating income rose above the breakeven level for the first time in several quarters. This improvement is due to a 32 percent increase in sales prices, which offset a 30 percent rise in the cost of polyvinyl chloride (PVC) resin over the past year. The improved operating income also reflects some of the overhead cost savings arising from the closure of the Company's Pasadena, Texas facility in 2004. 2 of 8 Liquidity and Working Capital The Company previously announced on April 13, 2005 that it has concluded its evaluation of strategic alternatives, including the possible sale of all or part of the Company. Based on its review, the Board decided that it would be in the best value creation interest of Lamson's shareholders to continue operating the Company as it is. Therefore, the Company will proceed to refinance its secured credit agreement. The Company believes that its improved financial results and current conditions in the commercial bank lending market will provide the opportunity for a new credit agreement with more favorable terms and conditions than the Company's existing credit arrangement. The Company continues to manage its working capital effectively, with accounts receivable days sales outstanding currently at 47 days at the end of the first quarter of 2005, compared with 46 days in the first quarter of 2004. Inventory turns are at 6.6 turns at the end of the first quarter, a modest decline from the 6.8 turns reported in the prior-year first quarter. Inventory investment rose to $44.7 million at the end of the first quarter of 2005, an increase of more than 20 percent over the levels reported in the first and fourth quarters of 2004. The increase is entirely attributable to higher raw material costs, as inventory units are generally unchanged. Outlook The Company is encouraged by the improving activity in key markets that it experienced in the first quarter of 2005. Since the remaining quarters of the year typically are stronger seasonally than the first quarter, the Company expects that this growth trend will continue for the rest of the year. As a result, the Company is anticipating net sales for the second quarter to be between $112 million and $115 million, an increase of approximately 9-12 percent over the second quarter of 2004. The Company anticipates that this net sales strength will result in net income of $4.1-$4.4 million, or 28-30 cents per diluted share, for the second quarter. This earnings range represents a 47-58 percent increase over the 19 cents per diluted share reported for the second quarter of 2004. For the full year 2005, the Company is raising its net sales forecast to $425-$435 million, from its previous forecast of $420-$430 million. The new forecast represents an increase of approximately 10-12 percent over the $387.1 million reported for 2004. If this net sales level is achieved, the Company projects net income of $11.5-$13.0 million, or 80-90 cents per diluted share, for the full year, up from its previous estimate of 70-80 cents. The new estimated earnings range 3 of 8 represents an increase of 75-100 percent over the $6.5 million, or 46 cents per diluted share, reported for 2004. 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 29, 2005. 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 the outcome and effects of the Company's refinancing efforts 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 4 of 8 THE LAMSON & SESSIONS CO. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
FIRST QUARTER ENDED --------------------------------------------------------- 2005 2004 ---------- ---------- NET SALES $ 98,792 100.0% $ 82,995 100.0% COST OF PRODUCTS SOLD 81,815 82.8% 69,677 84.0% ---------- ---------- GROSS PROFIT 16,977 17.2% 13,318 16.0% SELLING AND MARKETING EXPENSES 7,074 7.1% 5,801 7.0% GENERAL AND ADMINISTRATIVE EXPENSES 3,812 3.9% 3,793 4.6% RESEARCH AND DEVELOPMENT 476 0.5% 528 0.6% ---------- ---------- OPERATING EXPENSES 11,362 11.5% 10,122 12.2% OTHER (INCOME), NET -- 0.0% (924) -1.2% ---------- ---------- OPERATING INCOME 5,615 5.7% 4,120 5.0% INTEREST 2,002 2.0% 1,955 2.4% ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 3,613 3.7% 2,165 2.6% INCOME TAX PROVISION 1,409 1.5% 866 1.0% ---------- ---------- INCOME FROM CONTINUING OPERATIONS 2,204 2.2% 1,299 1.6% INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX OF $256 -- 0.0% 401 0.4% ---------- ---------- NET INCOME $ 2,204 2.2% $ 1,700 2.0% ========== ========== BASIC EARNINGS PER SHARE: EARNINGS FROM CONTINUING OPERATIONS $ 0.16 $ 0.09 EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX -- 0.03 ---------- ---------- NET EARNINGS $ 0.16 $ 0.12 ========== ========== AVERAGE SHARES OUTSTANDING 13,999 13,787 ========== ========== DILUTED EARNINGS PER SHARE: EARNINGS FROM CONTINUING OPERATIONS $ 0.15 $ 0.09 EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX -- 0.03 ---------- ---------- NET EARNINGS $ 0.15 $ 0.12 ========== ========== DILUTED AVERAGE SHARES OUTSTANDING 14,548 13,958 ========== ==========
NOTE: CERTAIN AMOUNTS IN THE PRIOR PERIODS HAVE BEEN RECLASSIFIED TO CONFORM WITH CURRENT PERIOD PRESENTATIONS. 5 of 8 THE LAMSON & SESSIONS CO. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS)
QUARTER ENDED YEAR ENDED QUARTER ENDED APRIL 2, 2005 JANUARY 1, 2005 APRIL 3, 2004 ------------- --------------- ------------- ACCOUNTS RECEIVABLE, NET $ 53,020 $ 48,391 $ 50,612 INVENTORIES, NET 44,738 36,860 36,397 OTHER CURRENT ASSETS 13,471 15,494 14,347 PROPERTY, PLANT AND EQUIPMENT, NET 47,835 47,961 48,508 GOODWILL 21,480 21,480 21,519 PENSION ASSETS 30,693 30,513 30,140 OTHER ASSETS 18,270 17,803 22,420 ----------- ----------- ----------- TOTAL ASSETS $ 229,507 $ 218,502 $ 223,943 =========== =========== =========== ACCOUNTS PAYABLE $ 31,598 $ 24,213 $ 31,258 SECURED CREDIT AGREEMENT - CURRENT 80,795 75,000 10,764 OTHER CURRENT LIABILITIES 26,092 31,899 28,329 LONG-TERM DEBT 11,682 11,876 84,104 OTHER LONG-TERM LIABILITIES 30,322 30,138 29,181 SHAREHOLDERS' EQUITY 49,018 45,376 40,307 ----------- ----------- ----------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 229,507 $ 218,502 $ 223,943 =========== =========== ===========
6 of 8 THE LAMSON & SESSIONS CO. CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) (IN THOUSANDS)
FIRST QUARTER ENDED --------------------------- 2005 2004 -------- -------- OPERATING ACTIVITIES NET INCOME $ 2,204 $ 1,700 ADJUSTMENTS TO RECONCILE NET INCOME TO CASH USED IN OPERATING ACTIVITIES: DEPRECIATION 2,270 2,328 AMORTIZATION 403 400 GAIN ON SALE OF FIXED ASSETS -- (924) DEFERRED INCOME TAXES 723 957 NET CHANGE IN WORKING CAPITAL ACCOUNTS: ACCOUNTS RECEIVABLE (4,629) (12,416) INVENTORIES (7,878) (6,254) PREPAID EXPENSES AND OTHER 571 (1,553) ACCOUNTS PAYABLE 7,385 14,330 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (5,546) (660) PENSION PLAN CONTRIBUTIONS (315) (81) OTHER LONG-TERM ITEMS 406 (222) -------- -------- CASH USED IN OPERATING ACTIVITIES (4,406) (2,395) INVESTING ACTIVITIES NET ADDITIONS TO PROPERTY, PLANT, AND EQUIPMENT (2,144) (55) PROCEEDS FROM SALE OF FIXED ASSETS -- 1,536 ACQUISITIONS AND RELATED ITEMS (62) (62) -------- -------- CASH (USED) PROVIDED BY INVESTING ACTIVITIES (2,206) 1,419 FINANCING ACTIVITIES NET BORROWINGS UNDER SECURED CREDIT AGREEMENT 5,795 1,064 PAYMENTS ON OTHER LONG-TERM BORROWINGS (194) (186) EXERCISE OF STOCK OPTIONS 1,071 -- -------- -------- CASH PROVIDED BY FINANCING ACTIVITIES 6,672 878 -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 60 (98) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 683 468 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 743 $ 370 ======== ========
7 of 8 THE LAMSON & SESSIONS CO. BUSINESS SEGMENTS (IN THOUSANDS)
FIRST QUARTER ENDED --------------------------------- 2005 2004 ----------- ----------- NET SALES CARLON $ 47,203 $ 38,163 LAMSON HOME PRODUCTS 23,971 19,754 PVC PIPE 27,618 25,078 ----------- ----------- $ 98,792 $ 82,995 =========== =========== OPERATING INCOME (LOSS) CARLON $ 3,624 $ 3,639 LAMSON HOME PRODUCTS 3,543 2,384 PVC PIPE 13 (1,187) CORPORATE OFFICE (1,565) (1,640) OTHER INCOME -- 924 ----------- ----------- $ 5,615 $ 4,120 =========== =========== DEPRECIATION AND AMORTIZATION CARLON $ 1,269 $ 1,397 LAMSON HOME PRODUCTS 462 470 PVC PIPE 942 861 ----------- ----------- $ 2,673 $ 2,728 =========== ===========
TOTAL ASSETS BY BUSINESS SEGMENT AT APRIL 2, 2005 AND JANUARY 1, 2005
APRIL 2, 2005 JANUARY 1, 2005 ------------- --------------- IDENTIFIABLE ASSETS CARLON $ 81,897 $ 77,473 LAMSON HOME PRODUCTS 35,217 34,190 PVC PIPE 51,177 44,650 CORPORATE OFFICE (INCLUDES CASH, DEFERRED TAX, AND PENSION ASSETS) 61,216 62,189 ----------- ----------- $ 229,507 $ 218,502 =========== ===========
8 of 8 -----END PRIVACY-ENHANCED MESSAGE-----