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) : March 3, 2004
LAWSON PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-10546 36-2229304
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) 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
(Former name or former address, if changed since last report) Not Applicable
Lawson Products, Inc.
Current Report of Form 8-K
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release issued by Lawson Products, Inc. on March 3, 2004.
Item 12. Results of Operations and Financial Condition.
On March 3, 2004, Lawson Products, Inc. issued a press release
announcing its operating results for the fiscal year ended December 31,
2003 A copy of the press release is attached as Exhibit 99.1 to this
Form 8-K.
The information in this Form 8-K is being furnished and shall not be
deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that Section. The information in
this Form 8-K may only be incorporated by reference in another filing under the
Securities Exchange Act or Securities Act of 1933 if such subsequent filing
specifically references this Form 8-K.
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 thereunto duly authorized.
LAWSON PRODUCTS, INC.
/s/ Joseph L. Pawlick
-------------------------------------
Joseph L. Pawlick
Date: March 3, 2004 Senior Vice President, Accounting
(principal accounting officer)
EXHIBIT INDEX
NUMBER DESCRIPTION
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99.1 Press release issued by Lawson Products, Inc. on March 3, 2004.
Exhibit 99.1
PRESS RELEASE Source: Lawson Products, Inc.
LAWSON REPORTS INCREASES IN SALES AND NET INCOME FOR 2003
Wednesday March 3, 9:01 am ET
\DES PLAINES, Ill., March 3 /PRNewswire-FirstCall/ -- Lawson Products, Inc.
(Nasdaq: LAWS - News) reported net income for 2003 of $16.2 million, an increase
of 30.1 percent from 2002 net income of $12.4 million. Diluted net income per
share for the year was $1.70 compared to $1.30 last year. Income before taxes of
$24.9 million for 2003 represented a 7.3 percent increase from the $23.2 million
amount in 2002.
For the fourth quarter of 2003, net income was $3.9 million compared to $.2
million for the same period last year. Diluted net income per share for the
fourth quarter of 2003 was $.41 versus $.02 for the same quarter of 2002. Income
before taxes for the fourth quarter of 2003 increased by 94.7 percent to $4.1
million from $2.1 million in the same period of 2002. This $2.0 million increase
was the result of a $3.3 million increase in net sales to $96.6 million and
continuing cost containment activities.
Net sales by segment for the fourth quarter and full year of 2002 and 2003
follow:
(Dollars in Millions) 4th Quarter Full Year
2002 2003 % Change 2002 2003 % Change
MRO $78.1 $79.2 1.4 $323.4 $ 321.0 -0.7
OEM 15.2 17.4 14.3 64.1 68.1 6.2
Total $93.3 $96.6 3.5 $387.5 $ 389.1 0.4
The MRO segment in Canada continued to realize sales gains which were offset due
to difficult market conditions in the United States, resulting in small
percentage changes in quarterly and annual MRO sales results. The OEM segment
also experienced sales growth through increased penetration of existing accounts
and new customer development efforts in the international OEM segment which were
somewhat offset by difficult market conditions in the United States.
Robert J. Washlow, Chairman of the Board and CEO, commented, "During a
challenging economic environment in 2003, we achieved increased sales and
substantial improvements in net income and net margin. We are encouraged by
fourth quarter sales across each of our business segments which reflected
improvement over the same period last year."
The Company restructured its business in Bristol, England, by disposing of
certain of its business segments during the fourth quarter of 2003 for
approximately $0.6 million, resulting in a $2.8 million pre-tax loss. At the
same time, the Company established a new subsidiary, ACS Limited, to service the
Company's growing OEM customer base in the UK. The tax benefit of the capital
loss flowing from the UK transaction resulted in a $2.2 million tax savings that
contributed to fourth quarter and full year 2003 net income improvements over
the prior year periods.
Lawson Products is an international seller and distributor of systems, services
and products to the industrial, commercial and institutional maintenance, repair
and replacement marketplace. 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.
This press release, including Mr. Washlow's statements, 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
CONSOLIDATED SUMMARY OF OPERATIONS
Three Months Ended December 31,
2003 2002 % Change
Net Sales $96,606,857 $93,345,702 3.5%
Income
Before Taxes (a)(b) 4,077,678 2,094,711 94.7%
Provision
for Income Taxes 145,000 1,935,000
Net Income (a)(b) 3,932,678 159,711 2362.4%
Net Income per share of Common Stock:
Basic $0.41 $0.02 1950.0%
Diluted $0.41 $0.02 1950.0%
Weighted Average Shares Outstanding:
Basic 9,492,586 9,497,961
Diluted 9,519,033 9,526,304
Twelve Months Ended December 31,
2003 2002 % Change
Net Sales $389,091,462 $387,455,899 0.4%
Income
Before Taxes (a)(b) 24,892,104 23,188,915 7.3%
Provision
for Income Taxes 8,696,000 10,742,000
Net Income (a)(b) 16,196,104 12,446,915 30.1%
Net Income per share of Common Stock:
Basic $1.71 $1.30 31.5%
Diluted $1.70 $1.30 30.8%
Weighted Average Shares Outstanding:
Basic 9,491,726 9,569,947
Diluted 9,510,865 9,595,945
(a) The Company used estimated gross profit rates in 2002 to determine
inventories and cost of goods sold during interim periods. The
difference between actual and estimated gross profit rates used for the
interim periods was adjusted in the fourth quarter. This adjustment
increased pre-tax income by approximately $3,244,000, with an after-tax
effect of $1,955,000.
(b) In the fourth quarter of 2003, the Company recorded a pre-tax charge of
$816,000, having an after-tax effect of $487,000, for the retirement of
management personnel. Full year results include pre-tax charges of
$2,459,000, having an after-tax effect of $1,477,000, for the retirement
of certain management personnel. In 2002, full year and fourth quarter
pre-tax income results were adversely impacted by a pre-tax charge of
$521,000, having an after-tax effect of $421,000, for the retirement of
management personnel.
Source: Lawson Products, Inc.