-----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, TSiUKYucuvcSULEDmvo+al3LVZAamidJ3a8yIynHbFG9AcPMbtxKL4g1DYozG3de ZXTO3gaNZtFE0ZAvXQTVew== 0000914760-05-000127.txt : 20050503 0000914760-05-000127.hdr.sgml : 20050503 20050503100746 ACCESSION NUMBER: 0000914760-05-000127 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050427 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050503 DATE AS OF CHANGE: 20050503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAWSON PRODUCTS INC/NEW/DE/ CENTRAL INDEX KEY: 0000703604 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MACHINERY, EQUIPMENT & SUPPLIES [5080] IRS NUMBER: 362229304 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10546 FILM NUMBER: 05793119 BUSINESS ADDRESS: STREET 1: 1666 E TOUHY AVE CITY: DES PLAINES STATE: IL ZIP: 60018-3640 BUSINESS PHONE: 7088279666 MAIL ADDRESS: STREET 1: 1666 EAST TOUHY AVENUE CITY: DES PLAINES STATE: IL ZIP: 60018-3640 8-K 1 l02101_8k042705.txt APRIL 27, 2005 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 EX-99.1 2 l02121_x99042705.txt APRIL 27, 2005 PRESS RELEASE 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. -----END PRIVACY-ENHANCED MESSAGE-----