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|
|
|
|
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ý
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Quarterly Report under Section 13 OR 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report under Section 13 OR 15(d) of the Securities Exchange Act of 1934
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Delaware
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36-2229304
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
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|
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8770 W. Bryn Mawr Avenue, Suite 900, Chicago, Illinois
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60631
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
|
¨
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Accelerated filer
|
ý
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Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
|
ý
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Emerging growth company
|
¨
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•
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the effect of general economic and market conditions;
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•
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the ability to generate sufficient cash to fund our operating requirements;
|
•
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the ability to meet the covenant requirements of our lines of credit;
|
•
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the market price of our common stock may decline;
|
•
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inventory obsolescence;
|
•
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work stoppages and other disruptions at transportation centers or shipping ports;
|
•
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changing customer demand and product mixes;
|
•
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increases in energy and commodity prices;
|
•
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decreases in demand from oil and gas customers due to lower oil prices;
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•
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disruptions of our information and communication systems;
|
•
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cyber attacks or other information security breaches;
|
•
|
failure to recruit, integrate and retain a talented workforce including productive sales representatives;
|
•
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the inability to successfully make or integrate acquisitions into the organization;
|
•
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foreign currency fluctuations
|
•
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failure to manage change within the organization;
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•
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highly competitive market;
|
•
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changes that affect governmental and other tax-supported entities;
|
•
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violations of environmental protection or other governmental regulations;
|
•
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negative changes related to tax matters; and
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•
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all other factors discussed in the Company’s “Risk Factors” set forth in its Annual Report on Form 10-K for the year ended December 31, 2018.
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|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,603
|
|
|
$
|
11,883
|
|
Restricted cash
|
800
|
|
|
800
|
|
||
Accounts receivable, less allowance for doubtful accounts of $538 and $549, respectively
|
43,973
|
|
|
37,682
|
|
||
Inventories, net
|
53,818
|
|
|
52,887
|
|
||
Miscellaneous receivables and prepaid expenses
|
5,393
|
|
|
3,653
|
|
||
Total current assets
|
107,587
|
|
|
106,905
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
17,923
|
|
|
23,548
|
|
||
Deferred income taxes
|
19,174
|
|
|
20,592
|
|
||
Goodwill
|
20,451
|
|
|
20,079
|
|
||
Cash value of life insurance
|
13,175
|
|
|
12,599
|
|
||
Intangible assets, net
|
13,016
|
|
|
13,112
|
|
||
Lease assets
|
12,262
|
|
|
—
|
|
||
Other assets
|
296
|
|
|
307
|
|
||
Total assets
|
$
|
203,884
|
|
|
$
|
197,142
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Revolving lines of credit
|
$
|
13,131
|
|
|
$
|
10,823
|
|
Accounts payable
|
14,848
|
|
|
15,207
|
|
||
Lease obligation
|
4,090
|
|
|
—
|
|
||
Accrued expenses and other liabilities
|
29,044
|
|
|
40,179
|
|
||
Total current liabilities
|
61,113
|
|
|
66,209
|
|
||
|
|
|
|
||||
Security bonus plan
|
12,320
|
|
|
12,413
|
|
||
Lease obligation
|
11,238
|
|
|
5,213
|
|
||
Deferred compensation
|
5,940
|
|
|
5,304
|
|
||
Deferred tax liability
|
2,833
|
|
|
2,761
|
|
||
Other liabilities
|
3,843
|
|
|
6,069
|
|
||
Total liabilities
|
97,287
|
|
|
97,969
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $1 par value:
|
|
|
|
||||
Authorized - 500,000 shares, Issued and outstanding — None
|
—
|
|
|
—
|
|
||
Common stock, $1 par value:
|
|
|
|
||||
Authorized - 35,000,000 shares
Issued - 9,012,236 and 9,005,716 shares, respectively Outstanding - 8,962,450 and 8,955,930 shares, respectively |
9,012
|
|
|
9,006
|
|
||
Capital in excess of par value
|
16,283
|
|
|
15,623
|
|
||
Retained earnings
|
83,421
|
|
|
77,338
|
|
||
Treasury stock – 49,786 shares
|
(1,234
|
)
|
|
(1,234
|
)
|
||
Accumulated other comprehensive loss
|
(885
|
)
|
|
(1,560
|
)
|
||
Total stockholders’ equity
|
106,597
|
|
|
99,173
|
|
||
Total liabilities and stockholders’ equity
|
$
|
203,884
|
|
|
$
|
197,142
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Product revenue
|
$
|
81,915
|
|
|
$
|
74,970
|
|
Service revenue
|
9,428
|
|
|
9,489
|
|
||
Total revenue
|
91,343
|
|
|
84,459
|
|
||
|
|
|
|
||||
Product cost of goods sold
|
38,007
|
|
|
34,832
|
|
||
Service costs
|
4,413
|
|
|
3,409
|
|
||
Gross profit
|
48,923
|
|
|
46,218
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Selling expenses
|
21,742
|
|
|
21,940
|
|
||
General and administrative expenses
|
21,637
|
|
|
22,441
|
|
||
Operating expenses
|
43,379
|
|
|
44,381
|
|
||
|
|
|
|
||||
Operating income
|
5,544
|
|
|
1,837
|
|
||
|
|
|
|
||||
Interest expense
|
(197
|
)
|
|
(240
|
)
|
||
Other expense, net
|
472
|
|
|
287
|
|
||
|
|
|
|
||||
Income before income taxes
|
5,819
|
|
|
1,884
|
|
||
Income tax expense
|
1,673
|
|
|
648
|
|
||
|
|
|
|
||||
Net income
|
$
|
4,146
|
|
|
$
|
1,236
|
|
|
|
|
|
||||
Basic income per share of common stock
|
$
|
0.46
|
|
|
$
|
0.14
|
|
|
|
|
|
||||
Diluted income per share of common stock
|
$
|
0.44
|
|
|
$
|
0.13
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
||||
Basic weighted average shares outstanding
|
8,962
|
|
|
8,888
|
|
||
Effect of dilutive securities outstanding
|
355
|
|
|
297
|
|
||
Diluted weighted average shares outstanding
|
9,317
|
|
|
9,185
|
|
||
|
|
|
|
||||
Comprehensive income (loss):
|
|
|
|
||||
Net income
|
$
|
4,146
|
|
|
$
|
1,236
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||
Adjustment for foreign currency translation
|
675
|
|
|
(1,483
|
)
|
||
Net comprehensive income (loss)
|
$
|
4,821
|
|
|
$
|
(247
|
)
|
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
|||||||||||||||
|
Outstanding Shares
|
|
$1 Par Value
|
|
|
Retained Earnings
|
|
Treasury Stock
|
|
|
||||||||||||||||
Balance at January 1, 2019
|
8,955,930
|
|
|
$
|
9,006
|
|
|
$
|
15,623
|
|
|
$
|
77,338
|
|
|
$
|
(1,234
|
)
|
|
$
|
(1,560
|
)
|
|
$
|
99,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Change in accounting principle
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,937
|
|
|
—
|
|
|
—
|
|
|
1,937
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,146
|
|
|
—
|
|
|
—
|
|
|
4,146
|
|
||||||
Adjustment for foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
675
|
|
|
675
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
666
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
666
|
|
||||||
Shares issued
|
6,520
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at March 31, 2019
|
8,962,450
|
|
|
$
|
9,012
|
|
|
$
|
16,283
|
|
|
$
|
83,421
|
|
|
$
|
(1,234
|
)
|
|
$
|
(885
|
)
|
|
$
|
106,597
|
|
(1)
|
The Company adopted the ASC No.842, Leases (ASC 842) on January 1, 2019 using the modified retrospective approach. See Note 2 - Leases for further details.
|
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
|||||||||||||||
|
Outstanding Shares
|
|
$1 Par Value
|
|
|
Retained Earnings
|
|
Treasury Stock
|
|
|
||||||||||||||||
Balance at January 1, 2018
|
8,888,028
|
|
|
$
|
8,921
|
|
|
$
|
13,005
|
|
|
$
|
71,453
|
|
|
$
|
(711
|
)
|
|
$
|
822
|
|
|
$
|
93,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Change in accounting principle
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(329
|
)
|
|
—
|
|
|
—
|
|
|
(329
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,236
|
|
|
—
|
|
|
—
|
|
|
1,236
|
|
||||||
Adjustment for foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,483
|
)
|
|
(1,483
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
651
|
|
||||||
Shares issued
|
307
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at March 31, 2018
|
8,888,335
|
|
|
$
|
8,922
|
|
|
$
|
13,655
|
|
|
$
|
72,360
|
|
|
$
|
(711
|
)
|
|
$
|
(661
|
)
|
|
$
|
93,565
|
|
(2)
|
The Company adopted the ASC 606, Revenue from Contracts with Customers (ASC 606) on January 1, 2018 using the modified retrospective approach.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
4,146
|
|
|
$
|
1,236
|
|
|
|
|
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,478
|
|
|
1,686
|
|
||
Stock-based compensation
|
408
|
|
|
970
|
|
||
Deferred income taxes
|
1,427
|
|
|
454
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(6,273
|
)
|
|
(831
|
)
|
||
Inventories
|
(643
|
)
|
|
19
|
|
||
Prepaid expenses and other assets
|
(2,314
|
)
|
|
(1,864
|
)
|
||
Accounts payable and other liabilities
|
(8,863
|
)
|
|
(4,277
|
)
|
||
Other
|
133
|
|
|
116
|
|
||
Net cash used in operating activities
|
$
|
(10,501
|
)
|
|
$
|
(2,491
|
)
|
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
$
|
(248
|
)
|
|
$
|
(652
|
)
|
Business acquisition
|
—
|
|
|
(157
|
)
|
||
Net cash used in investing activities
|
$
|
(248
|
)
|
|
$
|
(809
|
)
|
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Net proceeds from revolving lines of credit
|
$
|
2,308
|
|
|
$
|
3,356
|
|
Payment of financing lease principal
|
(52
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
$
|
2,256
|
|
|
$
|
3,356
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
$
|
213
|
|
|
$
|
(115
|
)
|
|
|
|
|
||||
Decrease in cash, cash equivalents and restricted cash
|
(8,280
|
)
|
|
(59
|
)
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
12,683
|
|
|
5,216
|
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
4,403
|
|
|
$
|
5,157
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,603
|
|
|
$
|
4,357
|
|
Restricted cash
|
800
|
|
|
800
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
4,403
|
|
|
$
|
5,157
|
|
Lease Type
|
|
Classification
|
|
Amount
|
||
|
|
|
|
|
||
Consolidated Operating Lease Expense
(1)
|
|
Operating expenses
|
|
$
|
1,024
|
|
|
|
|
|
|
||
Consolidated Financing Lease Amortization
|
|
Operating expenses
|
|
48
|
|
|
Consolidated Financing Lease Interest
|
|
Interest expense
|
|
6
|
|
|
Consolidated Financing Lease Expense
|
|
|
|
54
|
|
|
|
|
|
|
|
||
Sublease Income
(2)
|
|
Operating expenses
|
|
(80
|
)
|
|
Net Lease Cost
|
|
|
|
$
|
998
|
|
Lease Type
|
|
Amount
|
||
|
|
|
||
Total ROU operating lease assets
(1)
|
|
$
|
11,742
|
|
Total ROU financing lease assets
(2)
|
|
520
|
|
|
Total lease assets
|
|
$
|
12,262
|
|
|
|
|
||
Total current operating lease obligation
|
|
$
|
3,890
|
|
Total current financing lease obligation
|
|
200
|
|
|
Total current lease obligations
|
|
$
|
4,090
|
|
|
|
|
||
Total long term operating lease obligation
|
|
$
|
10,917
|
|
Total long term financing lease obligation
|
|
321
|
|
|
Total long term lease obligation
|
|
$
|
11,238
|
|
Maturity Date of Lease Liabilities
|
|
Operating Leases
|
|
Financing Leases
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Year one
|
|
$
|
4,529
|
|
|
$
|
222
|
|
|
$
|
4,751
|
|
Year two
|
|
4,017
|
|
|
190
|
|
|
4,207
|
|
|||
Year three
|
|
4,025
|
|
|
100
|
|
|
4,125
|
|
|||
Year four
|
|
2,542
|
|
|
38
|
|
|
2,580
|
|
|||
Year five
|
|
973
|
|
|
11
|
|
|
984
|
|
|||
Subsequent years
|
|
203
|
|
|
—
|
|
|
203
|
|
|||
Total lease payments
|
|
16,289
|
|
|
561
|
|
|
16,850
|
|
|||
Less: Interest
|
|
1,482
|
|
|
40
|
|
|
1,522
|
|
|||
Present value of lease liabilities
|
|
$
|
14,807
|
|
|
$
|
521
|
|
|
$
|
15,328
|
|
Lease Type
|
|
Weighted Average Term in Years
|
|
Weighted Average Interest Rate
|
|
|
|
|
|
Operating Leases
|
|
3.9
|
|
5.2%
|
Financing Leases
|
|
2.9
|
|
5.5%
|
Cash Flow Source
|
|
Classification
|
|
Amount
|
||
|
|
|
|
|
||
Operating cash flows from operating leases
|
|
Operating activities
|
|
$
|
808
|
|
Operating cash flows from financing leases
|
|
Operating activities
|
|
6
|
|
|
Financing cash flows from financing leases
|
|
Financing activities
|
|
52
|
|
Lease Income Related To Lease Payments
|
|
Amount
|
||
|
|
|
||
Operating Leases
|
|
$
|
42
|
|
Financing Leases
|
|
—
|
|
|
Total lease payments
|
|
$
|
42
|
|
|
Three Months Ended March 31,
|
||||||
(Dollars in thousands)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
United States
|
$
|
74,048
|
|
|
$
|
68,318
|
|
Canada
|
17,295
|
|
|
16,141
|
|
||
Consolidated total
|
$
|
91,343
|
|
|
$
|
84,459
|
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
|
|
|
|
||
Fastening Systems
|
23.5
|
%
|
|
23.8
|
%
|
Fluid Power
|
15.2
|
%
|
|
14.5
|
%
|
Cutting Tools and Abrasives
|
13.3
|
%
|
|
14.9
|
%
|
Specialty Chemicals
|
11.3
|
%
|
|
11.9
|
%
|
Electrical
|
11.5
|
%
|
|
11.2
|
%
|
Aftermarket Automotive Supplies
|
8.4
|
%
|
|
8.5
|
%
|
Safety
|
4.6
|
%
|
|
4.5
|
%
|
Welding and Metal Repair
|
1.7
|
%
|
|
1.8
|
%
|
Other
|
10.5
|
%
|
|
9.0
|
%
|
Consolidated Total
|
100.0
|
%
|
|
100.0
|
%
|
|
(Dollars in thousands)
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Inventories, gross
|
$
|
58,587
|
|
|
$
|
58,215
|
|
Reserve for obsolete and excess inventory
|
(4,769
|
)
|
|
(5,328
|
)
|
||
Inventories, net
|
$
|
53,818
|
|
|
$
|
52,887
|
|
|
(Dollars in thousands)
|
||||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
20,079
|
|
|
$
|
19,614
|
|
Adjustment to original acquisition allocation
|
—
|
|
|
(17
|
)
|
||
Impact of foreign exchange
|
372
|
|
|
(465
|
)
|
||
Ending balance
|
$
|
20,451
|
|
|
$
|
19,132
|
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||||||||
Trade names
|
$
|
8,234
|
|
|
$
|
(1,592
|
)
|
|
$
|
6,642
|
|
|
$
|
8,090
|
|
|
$
|
(1,447
|
)
|
|
$
|
6,643
|
|
Customer relationships
|
7,211
|
|
|
(837
|
)
|
|
6,374
|
|
|
7,114
|
|
|
(645
|
)
|
|
6,469
|
|
||||||
|
$
|
15,445
|
|
|
$
|
(2,429
|
)
|
|
$
|
13,016
|
|
|
$
|
15,204
|
|
|
$
|
(2,092
|
)
|
|
$
|
13,112
|
|
a)
|
85%
of the face amount of the Company’s eligible accounts receivable, generally less than
60
days past due, and
|
b)
|
the lesser of
60%
of the lower of cost or market value of the Company’s eligible inventory, generally inventory expected to be sold within
18 months
, or
$20.0 million
.
|
Quarterly Financial Covenant
|
|
Requirement
|
|
Actual
|
EBITDA to fixed charges ratio
|
|
1.10 : 1.00
|
|
4.26 : 1.00
|
|
(Dollars in thousands)
|
||||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
359
|
|
|
$
|
483
|
|
Charged to earnings
|
27
|
|
|
628
|
|
||
Payments
|
(123
|
)
|
|
(308
|
)
|
||
Balance at end of period
|
$
|
263
|
|
|
$
|
803
|
|
|
2019
|
|
2018
|
||||||||||
(Dollars in thousands)
|
Amount
|
|
% of
Net Sales
|
|
Amount
|
|
% of
Net Sales
|
||||||
|
|
|
|
|
|
|
|
||||||
Revenue
|
$
|
91,343
|
|
|
100.0
|
%
|
|
$
|
84,459
|
|
|
100.0
|
%
|
Cost of goods sold
|
42,420
|
|
|
46.4
|
%
|
|
38,241
|
|
|
45.3
|
%
|
||
Gross profit
|
48,923
|
|
|
53.6
|
%
|
|
46,218
|
|
|
54.7
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Selling expenses
|
21,742
|
|
|
23.8
|
%
|
|
21,940
|
|
|
26.0
|
%
|
||
General and administrative expenses
|
21,637
|
|
|
23.7
|
%
|
|
22,441
|
|
|
26.5
|
%
|
||
Total operating expenses
|
43,379
|
|
|
47.5
|
%
|
|
44,381
|
|
|
52.5
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Operating income
|
5,544
|
|
|
6.1
|
%
|
|
1,837
|
|
|
2.2
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Interest expense
|
(197
|
)
|
|
(0.2
|
)%
|
|
(240
|
)
|
|
(0.3
|
)%
|
||
Other income, net
|
472
|
|
|
0.5
|
%
|
|
287
|
|
|
0.3
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Income before income taxes
|
5,819
|
|
|
6.4
|
%
|
|
1,884
|
|
|
2.2
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Income tax expense
|
1,673
|
|
|
1.9
|
%
|
|
648
|
|
|
0.7
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
4,146
|
|
|
4.5
|
%
|
|
$
|
1,236
|
|
|
1.5
|
%
|
|
Three Months Ended March 31,
|
|
Increase (Decrease)
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
Amount
|
|
%
|
||||||
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Lawson
|
$
|
82,467
|
|
|
$
|
76,426
|
|
|
$
|
6,041
|
|
|
7.9%
|
Bolt Supply
|
8,876
|
|
|
8,033
|
|
|
843
|
|
|
10.5%
|
|||
Consolidated
|
$
|
91,343
|
|
|
$
|
84,459
|
|
|
$
|
6,884
|
|
|
8.2%
|
|
|
|
|
|
|
|
|
||||||
Gross profit
|
|
|
|
|
|
|
|
||||||
Lawson
|
$
|
45,619
|
|
|
$
|
42,922
|
|
|
$
|
2,697
|
|
|
6.3%
|
Bolt Supply
|
3,304
|
|
|
3,296
|
|
|
8
|
|
|
0.2%
|
|||
Consolidated
|
$
|
48,923
|
|
|
$
|
46,218
|
|
|
$
|
2,705
|
|
|
5.9%
|
|
|
|
|
|
|
|
|
||||||
Gross profit margin
|
|
|
|
|
|
|
|
||||||
Lawson
|
55.3
|
%
|
|
56.2
|
%
|
|
|
|
|
||||
Bolt Supply
|
37.2
|
%
|
|
41.0
|
%
|
|
|
|
|
||||
Consolidated
|
53.6
|
%
|
|
54.7
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Increase (Decrease)
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
Amount
|
|
%
|
||||||
|
|
|
|
|
|
|
|
||||||
Selling expenses
|
|
|
|
|
|
|
|
||||||
Lawson
|
$
|
20,953
|
|
|
$
|
21,299
|
|
|
$
|
(346
|
)
|
|
(1.6)%
|
Bolt Supply
|
789
|
|
|
641
|
|
|
148
|
|
|
23.1%
|
|||
Consolidated
|
$
|
21,742
|
|
|
$
|
21,940
|
|
|
$
|
(198
|
)
|
|
(0.9)%
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
|
|
|
|
|
|
||||||
Lawson
|
$
|
19,403
|
|
|
$
|
20,266
|
|
|
$
|
(863
|
)
|
|
(4.3)%
|
Bolt Supply
|
2,234
|
|
|
2,175
|
|
|
59
|
|
|
2.7%
|
|||
Consolidated
|
$
|
21,637
|
|
|
$
|
22,441
|
|
|
$
|
(804
|
)
|
|
(3.6)%
|
Quarterly Financial Covenant
|
|
Requirement
|
|
Actual
|
EBITDA to fixed charges ratio
|
|
1.10 : 1.00
|
|
4.26 : 1.00
|
Exhibit #
|
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
LAWSON PRODUCTS, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
Dated:
|
April 18, 2019
|
|
/s/ Michael G. DeCata
|
|
|
|
Michael G. DeCata
President and Chief Executive Officer
(principal executive officer)
|
|
|
|
|
|
|
|
|
Dated:
|
April 18, 2019
|
|
/s/ Ronald J. Knutson
|
|
|
|
Ronald J. Knutson
Executive Vice President, Chief Financial Officer, Treasurer and Controller
(principal financial and accounting officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Lawson Products, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal nine months (the registrant’s fourth fiscal nine months in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Lawson Products, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal nine months (the registrant’s fourth fiscal nine months in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|