Exhibit 99.1
Lawson Products, Inc.
Pro Forma Condensed Consolidated Financial Information
(Unaudited)
On February 14, 2014, Lawson Products Inc. (“Lawson” or “the Company”) completed the previously announced sale of substantially all of the assets of Automatic Machine Products Company, Inc. (“ASMP”), its wholly owned subsidiary, to Nelson Stud Welding, Inc., an indirect subsidiary of Doncasters Group Limited.
The unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2013, set forth below has been presented after giving effect to the hypothetical sale of ASMP (the “Sale”) as if it had occurred on September 30, 2013. The unaudited Pro Forma Condensed Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010 set forth below have been presented after giving effect to the Sale as if it had occurred on January 1, 2010, and does not assume any interest income on cash proceeds.
The unaudited Pro Forma Condensed Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010 have been derived primarily from the audited Consolidated Financial Statements of the Company included in its fiscal 2012 Annual Report on Form 10-K. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2013, has been derived primarily from the unaudited Condensed Consolidated Financial Statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013. The unaudited pro forma financial statement information is based upon available information and assumptions that the Company believes are reasonable under the circumstance and were prepared to illustrate the estimated effects of the Sale.
The unaudited pro forma financial statement information has been provided for informational purposes and should not be considered indicative of the financial condition or results of operations that would have been achieved had the Sale occurred as of the periods presented. In addition, the unaudited pro forma financial statement information does not purport to indicate balance sheet data or results of operations as of any future date or for any future period. The unaudited pro forma financial statement information, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its fiscal 2012 Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, that the Company filed with the Securities and Exchange Commission in 2013.
Exhibit 99.1
Lawson Products, Inc.
Pro Forma Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
|
| | | | | | | | | | | | |
| | | September 30, 2013 |
| | | As Reported (1) | | ASMP Pro Forma Adjustments | | Pro Forma |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 418 |
| | $ | — |
| | $ | 418 |
|
| Restricted cash | | 800 |
| | — |
| | 800 |
|
| Accounts receivable, less allowance for doubtful accounts | | 32,265 |
| | — |
| | 32,265 |
|
| Inventories, net | | 44,509 |
| | — |
| | 44,509 |
|
| Miscellaneous receivables and prepaid expenses | | 4,418 |
| | — |
| | 4,418 |
|
| Deferred income taxes | | 17 |
| | — |
| | 17 |
|
| Discontinued operations | | 9,938 |
| | (9,906 | ) | (2) | 32 |
|
| Total current assets | | 92,365 |
| | (9,906 | ) | | 82,459 |
|
| | | | | | | |
| Property, plant and equipment, net | | 62,157 |
| | — |
| | 62,157 |
|
| Cash value of life insurance | | 8,609 |
| | — |
| | 8,609 |
|
| Deferred income taxes | | 55 |
| | — |
| | 55 |
|
| Other assets | | 497 |
| | — |
| | 497 |
|
| Discontinued operations | | 395 |
| | (395 | ) | (2) | — |
|
| | | | | | | |
| Total assets | | $ | 164,078 |
| | $ | (10,301 | ) | | $ | 153,777 |
|
| | | | | | | |
| Liabilities and stockholders' equity | | | | | | |
| Current liabilities: | | | | | | |
| Revolving line of credit | | $ | 18,315 |
| | $ | (11,500 | ) | (3) | $ | 6,815 |
|
| Accounts payable | | 14,181 |
| | — |
| | 14,181 |
|
| Accrued expenses and other liabilities | | 23,990 |
| | — |
| | 23,990 |
|
| Discontinued operations | | 485 |
| | (379 | ) | (4) | 106 |
|
| Total current liabilities | | 56,971 |
| | (11,879 | ) | | 45,092 |
|
| | | | | | | |
| Security bonus plan | | 16,435 |
| | — |
| | 16,435 |
|
| Financing lease obligation | | 10,416 |
| | — |
| | 10,416 |
|
| Deferred compensation | | 5,481 |
| | — |
| | 5,481 |
|
| Deferred rent obligation | | 4,367 |
| | — |
| | 4,367 |
|
| Other liabilities | | 1,398 |
| | — |
| | 1,398 |
|
| Discontinued operations | | — |
| | — |
| | — |
|
| | | 95,068 |
| | (11,879 | ) | | 83,189 |
|
| | | | | | | |
| Total stockholders' equity | | 69,010 |
| | 1,578 |
| (5) | 70,588 |
|
| | | | | | | |
| Total liabilities and stockholders' equity | | $ | 164,078 |
| | $ | (10,301 | ) | | $ | 153,777 |
|
See accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.
Exhibit 99.1
Lawson Products, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Dollars in thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | |
| | | Year Ended December 31, 2012 |
| | | As Reported (6) | | ASMP Pro Forma Adjustments | | Pro Forma |
| | | | | | | |
| Net sales | | $ | 290,487 |
| | $ | (16,925 | ) | | $ | 273,562 |
|
| Cost of goods sold | | 129,305 |
| | (13,161 | ) | | 116,144 |
|
| Gross margin | | 161,182 |
| | (3,764 | ) | | 157,418 |
|
| | | | | | | |
| Operating expenses: | | | | | | |
| Selling, general and administrative expenses | | 171,725 |
| | (1,646 | ) | | 170,079 |
|
| Severance expenses | | 8,021 |
| | — |
| | 8,021 |
|
| Gain on sale of assets | | (3,721 | ) | | — |
| | (3,721 | ) |
| Goodwill impairment | | 28,306 |
| | — |
| | 28,306 |
|
| Operating expenses | | 204,331 |
| | (1,646 | ) | | 202,685 |
|
| | | | | | | |
| Operating loss | | (43,149 | ) | | (2,118 | ) | | (45,267 | ) |
| | | | | | | |
| Other expense, net | | (831 | ) | | — |
| | (831 | ) |
| | | | | | | |
| Loss from continuing operations before income taxes | | (43,980 | ) | | (2,118 | ) | | (46,098 | ) |
| | | | | | | |
| Income tax expense | | (18,737 | ) | | 802 |
| | (17,935 | ) |
| | | | | | | |
| Loss from continuing operations | | $ | (62,717 | ) | | $ | (1,316 | ) | | $ | (64,033 | ) |
| | | | | | | |
| Basic and diluted loss from continuing operations per share of common stock | | $ | (7.30 | ) | | $ | (0.16 | ) | | $ | (7.46 | ) |
| | | | | | | |
| Basic and diluted weighted average shares outstanding | | 8,589 |
| | | | 8,589 |
|
See accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.
Exhibit 99.1
Lawson Products, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Dollars in thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | |
| | | Year Ended December 31, 2011 |
| | | As Reported (6) | | ASMP Pro Forma Adjustments | | Pro Forma |
| | | | | | | |
| Net sales | | $ | 314,959 |
| | $ | (14,560 | ) | | $ | 300,399 |
|
| Cost of goods sold | | 135,182 |
| | (11,655 | ) | | 123,527 |
|
| Gross margin | | 179,777 |
| | (2,905 | ) | | 176,872 |
|
| | | | | | | |
| Operating expenses: | | | | | | |
| Selling, general and administrative expenses | | 181,291 |
| | (1,479 | ) | | 179,812 |
|
| Severance expenses | | 1,614 |
| | — |
| | 1,614 |
|
| Loss on sale of assets | | 22 |
| | — |
| | 22 |
|
| Other operating expenses | | 2,346 |
| | (1,146 | ) | | 1,200 |
|
| Operating expenses | | 185,273 |
| | (2,625 | ) | | 182,648 |
|
| | | | | | | |
| Operating loss | | (5,496 | ) | | (280 | ) | | (5,776 | ) |
| | | | | | | |
| Other expense, net | | (580 | ) | | — |
| | (580 | ) |
| | | | | | | |
| Loss from continuing operations before income taxes | | (6,076 | ) | | (280 | ) | | (6,356 | ) |
| | | | | | | |
| Income tax benefit | | 1,687 |
| | 80 |
| | 1,767 |
|
| | | | | | | |
| Loss from continuing operations | | $ | (4,389 | ) | | $ | (200 | ) | | $ | (4,589 | ) |
| | | | | | | |
| Basic and diluted loss from continuing operations per share of common stock | | $ | (0.51 | ) | | $ | (0.03 | ) | | $ | (0.54 | ) |
| | | | | | | |
| Basic and diluted weighted average shares outstanding | | 8,553 |
| | | | 8,533 |
|
See accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.
Exhibit 99.1
Lawson Products, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Dollars in thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | |
| | | Year Ended December 31, 2010 |
| | | As Reported (6) | | ASMP Pro Forma Adjustments | | Pro Forma |
| | | | | | | |
| Net sales | | $ | 316,780 |
| | $ | (13,642 | ) | | $ | 303,138 |
|
| Cost of goods sold | | 121,954 |
| | (11,360 | ) | | 110,594 |
|
| Gross margin | | 194,826 |
| | (2,282 | ) | | 192,544 |
|
| | | | | | | |
| Operating expenses: | | | | | | |
| Selling, general and administrative expenses | | 180,021 |
| | (1,765 | ) | | 178,256 |
|
| Severance expenses | | 3,629 |
| | — |
| | 3,629 |
|
| Gain on sale of assets | | (1,701 | ) | | — |
| | (1,701 | ) |
| Other operating benefits | | (4,050 | ) | | — |
| | (4,050 | ) |
| Operating expenses | | 177,899 |
| | (1,765 | ) | | 176,134 |
|
| | | | | | | |
| Operating income | | 16,927 |
| | (517 | ) | | 16,410 |
|
| | | | | | | |
| Other expense, net | | (231 | ) | | — |
| | (231 | ) |
| | | | | | | |
| Income from continuing operations before income taxes | | 16,696 |
| | (517 | ) | | 16,179 |
|
| | | | | | | |
| Income tax expense | | (7,106 | ) | | 177 |
| | (6,929 | ) |
| | | | | | | |
| Income from continuing operations | | $ | 9,590 |
| | $ | (340 | ) | | $ | 9,250 |
|
| | | | | | | |
| Basic loss from continuing operations per share of common stock | | $ | 1.13 |
| | $ | (0.04 | ) | | $ | 1.09 |
|
| Diluted loss from continuing operations per share of common stock | | $ | 1.12 |
| | $ | (0.04 | ) | | $ | 1.08 |
|
| | | | | | | |
| Weighted average shares outstanding: | | | | | | |
| Basic | | 8,522 |
| | | | 8,522 |
|
| Diluted | | 8,537 |
| | | | 8,537 |
|
See accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements.
Exhibit 99.1
Lawson Products, Inc.
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
| |
| (1) | Represents balances as reported on the unaudited Condensed Consolidated Balance Sheet included in the Company's Form 10-Q for the quarter ended September 30, 2013. |
| |
| (2) | Represents assets that were acquired by the Buyer |
| |
| (3) | Represents $12.5 million of cash proceeds received from purchaser, net of $1.0 million estimated transaction costs and working capital adjustments related to the Sale. |
| |
| (4) | Represents accounts payable that were assumed by the Buyer. |
| |
| (5) | Represents the estimated pre-tax gain on the Sale. |
| |
| (6) | Represents results of operations on the Consolidated Statements of Operations included in the Company's Form 10-K for the years ended December 31, 2012, 2011 and 2010. |
