Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 14, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LAWSON PRODUCTS INC/NEW/DE/ | |
Entity Central Index Key | 703,604 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,874,365 | 8,874,365 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 11,123 | $ 10,421 |
Restricted cash | 800 | 800 |
Accounts receivable, less allowance for doubtful accounts | 35,017 | 30,200 |
Allowance for Doubtful Accounts Receivable | 466 | 454 |
Inventories, net | 42,373 | 42,561 |
Miscellaneous receivables and prepaid expenses | 3,492 | 3,788 |
Total current assets | 92,805 | 87,770 |
Property, plant and equipment, net | 27,547 | 30,907 |
Cash value of life insurance | 10,443 | 10,051 |
Goodwill | 5,681 | 5,520 |
Deferred income taxes | 20 | 20 |
Other assets | 934 | 1,039 |
Total assets | 137,430 | 135,307 |
Current liabilities: | ||
Revolving line of credit | 0 | 841 |
Accounts payable | 7,206 | 11,307 |
Accrued expenses and other liabilities | 26,050 | 27,289 |
Total current liabilities | 33,256 | 39,437 |
Noncurrent liabilities and deferred credits: | ||
Security bonus plan | 13,427 | 14,216 |
Financing lease obligation | 6,998 | 7,543 |
Deferred compensation | 5,026 | 4,830 |
Deferred rent liability | 3,637 | 3,676 |
Other liabilities | 4,388 | 4,472 |
Total liabilities | 66,732 | 74,174 |
Stockholders' equity: | ||
Authorized - 500,000 shares, Issued and outstanding — None | 0 | 0 |
Authorized - 35,000,000 shares Issued - 8,907,639 and 8,864,929 shares, respectively Outstanding - 8,874,365 and 8,832,623 shares, respectively | 8,908 | 8,865 |
Capital in excess of par value | 11,843 | 11,055 |
Retained earnings | 49,895 | 41,943 |
Treasury stock – 33,274 and 32,306 shares, respectively | (711) | (691) |
Accumulated other comprehensive income (loss) | 763 | (39) |
Total stockholders’ equity | 70,698 | 61,133 |
Total liabilities and stockholders’ equity | $ 137,430 | $ 135,307 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 8,907,639 | 8,864,929 |
Common stock, shares outstanding | 8,874,365 | 8,832,623 |
Treasury Stock, Shares | 33,274 | 32,306 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 75,006 | $ 69,348 | $ 149,623 | $ 139,059 |
Cost of goods sold | 29,865 | 26,822 | 59,603 | 54,074 |
Gross profit | 45,141 | 42,526 | 90,020 | 84,985 |
Operating expenses: | ||||
Selling expenses | 23,806 | 23,204 | 48,610 | 45,957 |
General and administrative expenses | 18,866 | 19,293 | 38,229 | 37,830 |
Selling, General and Administrative Expense | 42,672 | 42,497 | 86,839 | 83,787 |
Gain on sale of property | (5,422) | 0 | (5,422) | 0 |
Operating expenses | 37,250 | 42,497 | 81,417 | 83,787 |
Operating income | 7,891 | 29 | 8,603 | 1,198 |
Interest expense | (166) | (153) | (260) | (319) |
Other (income) expense, net | (115) | 250 | 110 | 373 |
Income before income taxes | 7,610 | 126 | 8,453 | 1,252 |
Income tax (benefit) expense | $ 337 | $ (46) | $ 323 | $ 63 |
Income per share of common stock: | ||||
Basic income per share of common stock | $ 0.82 | $ 0.02 | $ 0.92 | $ 0.14 |
Diluted income per share of common stock | $ 0.80 | $ 0.02 | $ 0.89 | $ 0.13 |
Weighted average shares outstanding: | ||||
Basic weighted average shares outstanding | 8,853 | 8,771 | 8,843 | 8,750 |
Effect of dilutive securities outstanding | 245 | 142 | 252 | 150 |
Diluted weighted average shares outstanding | 9,098 | 8,913 | 9,095 | 8,900 |
Comprehensive income: | ||||
Net income | $ 7,273 | $ 172 | $ 8,130 | $ 1,189 |
Adjustment for foreign currency translation | 729 | 78 | 802 | 1,035 |
Net comprehensive income | $ 8,002 | $ 250 | $ 8,932 | $ 2,224 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities: | ||
Net income | $ 8,130 | $ 1,189 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 3,349 | 4,413 |
Stock-based compensation | 385 | (702) |
Gain on Sale of Property | (5,422) | 0 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (4,886) | (3,562) |
Inventories | 346 | 1,961 |
Prepaid expenses and other assets | (113) | 846 |
Accounts payable and other liabilities | (6,500) | (2,155) |
Other | 232 | 222 |
Net cash used in operating activities | (4,479) | 2,212 |
Investing activities: | ||
Purchases of property, plant and equipment | (500) | (1,585) |
Proceeds from Sale of Property, Plant, and Equipment | 6,177 | 0 |
Business acquisitions | 0 | (2,576) |
Net cash provided by (used in) investing activities | 5,677 | (4,161) |
Financing activities: | ||
Net (payments on) borrowings from revolving line of credit | (841) | (750) |
Repurchase treasury shares | (20) | (18) |
Net cash (used in) provided by financing activities | (861) | (768) |
Effect of exchange rate changes on cash and cash equivalents | 365 | 818 |
Increase (decrease) in cash and cash equivalents | 702 | (1,899) |
Cash and cash equivalents at beginning of period | 10,421 | 10,765 |
Cash and cash equivalents at end of period | $ 11,123 | $ 8,866 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of Lawson Products, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . In the opinion of the Company, all normal recurring adjustments have been made that are necessary to present fairly the results of operations for the interim periods. Operating results for the three and six month periods ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . The Company operates in one reportable segment as a Maintenance, Repair and Operations ("MRO") distributor of products and services to the industrial, commercial, institutional, and governmental maintenance, repair and operations marketplace. For the three and six months ended June 30, 2017 and 2016 , stock options to purchase 40,000 of the Company's common stock were excluded from the computation of diluted earnings per share because they were anti-dilutive. ASU 2016-09, Improvements to Employee Share-Based Payment Accounting Effective January 1, 2017, the Company adopted Accounting Standards Update 2016-09, “Compensation-Stock Compensation (Topic 718)” (“ASU 2016-09”). Prior to January 1, 2017, the Company recognized excess tax benefits or deficiencies of stock-based compensation expense, to the extent that there were sufficient recognized excess tax benefits previously recognized, as a component of additional paid-in capital. ASU 2016-09 requires the Company to account for excess tax benefits and tax deficiencies as discrete items in the reporting period in which they occur. The adoption was applied on a modified retrospective basis. All deferred tax assets related to stock-based compensation are fully reserved and, therefore, there is no net effect on the Company's balance sheet for the first half of 2017. As a result of including the income tax effects from excess tax benefits in income tax expense, the effects of the excess tax benefits are no longer included in the calculation of diluted shares outstanding, resulting in an increase in the number of diluted shares outstanding. The Company adopted this change in the method of calculating diluted shares outstanding on a prospective basis. ASU 2016-09 also permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock-based compensation to either estimate the total number of awards for which the requisite service period will not be rendered, as currently required, or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative effect adjustment to reduce retained earnings by $178 thousand , as of January 1, 2017. Additionally, ASU 2016-09 addressed the presentation of employee taxes paid on the statement of cash flows. The Company is now required to present the cost of shares withheld from the employee to satisfy the employees’ income tax liability as a financing activity on the statement of cash flows rather than as an operating cash flow. The Company adopted this change retrospectively. The Company withheld shares with a value of $20 thousand and $18 thousand to satisfy employee taxes in the first six months of 2017 and 2016, respectively. ASU No. 2014-09, Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The new standard is effective for the Company's interim and annual periods beginning with the first quarter of 2018. The standard is to be applied using one of two retrospective application methods, with early application not permitted. The Company is continuing to evaluate the effect of the standard on its financial statements and is developing a methodology to calculate the impact of the pronouncement on the consolidated financial statements. The Company expects to adopt ASU 2014-09 January 1, 2018 using the modified retrospective method. Under this method, a cumulative effect adjustment is recorded based on applying the guidance to the customer contracts that were not completed at the date of initial application. As a result, prior periods are not adjusted to reflect application of the new guidance. Except for the changes described above, there have been no other material changes in the Company's significant accounting policies during the six months ended June 30, 2017 as compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2016 . |
Restricted Cash Restricted Cash
Restricted Cash Restricted Cash | 6 Months Ended |
Jun. 30, 2017 | |
Restricted Cash [Abstract] | |
Cash and Cash Equivalents Disclosure [Text Block] | Restricted Cash The Company has agreed to maintain $0.8 million in a money market account as collateral for an outside party that is providing certain commercial card processing services for the Company. The Company is restricted from withdrawing this balance without the prior consent of the outside party during the term of the agreement. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories, net Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) June 30, 2017 December 31, 2016 Inventories, gross $ 47,843 $ 48,038 Reserve for obsolete and excess inventory (5,470 ) (5,477 ) Inventories, net $ 42,373 $ 42,561 |
Sale of Property Sale of Proper
Sale of Property Sale of Property (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Property held for sale [Abstract] | |
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | In the second quarter of 2017, the Company completed the sale of its distribution center located in Fairfield, New Jersey, primarily to utilize excess capacity within it's supply chain network. The Company received net cash proceeds of $6.2 million and recorded a gain on the transaction of $5.4 million . |
Acquisitions and Goodwill (Note
Acquisitions and Goodwill (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions and Goodwill [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisitions and Goodwill Primarily to expand its sales coverage, obtain experienced sales representatives and improve its presence in Canada, the Company completed three acquisitions in 2016. In March 2016, the Company acquired the assets of Perfect Products Company of Michigan ("Perfect Products"), an auto parts distributor for approximately $1.3 million in cash and $30 thousand in contingent consideration. In May 2016, the Company acquired the assets of F.B. Feeney Hardware ("F. B. Feeney") in Ontario, Canada, for approximately $1.3 million in cash and $0.1 million in contingent consideration. And, in November 2016, the Company acquired the assets of Mattic Industries Limited ("Mattic"), an industrial parts distributor located in western Canada, for approximately $3.5 million in cash and $0.3 million in contingent consideration. The following table contains unaudited pro forma net sales and net income for Lawson Products assuming the Perfect Products, F.B Feeney and Mattic acquisitions closed on January 1, 2015. (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net sales Actual $ 75,006 $ 69,348 $ 149,623 $ 139,059 Pro forma 75,006 70,384 149,623 141,760 Net income Actual $ 7,273 $ 172 $ 8,130 $ 1,189 Pro forma 7,273 421 8,130 1,614 The pro forma disclosures in the table above include adjustments for, amortization of intangible assets and acquisition costs to reflect results that are more representative of the combined results of the transactions as if the Mattic, F.B Feeney and Perfect Product acquisitions closed on January 1, 2015 rather than on the actual acquisition dates. This pro forma information utilizes certain estimates, is presented for illustrative purposes only and is not intended to be indicative of the actual results of operation. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future positive or negative events that may occur after the acquisition, such as anticipated cost savings from operating synergies. Goodwill activity for the first half of 2017 and 2016 is included in the table below: (Dollars in thousands) Six Months Ended June 30, 2017 2016 Beginning balance $ 5,520 $ 319 Acquisition — 2,442 Impact of foreign exchange 161 12 Ending balance $ 5,681 $ 2,773 |
Loan Agreement
Loan Agreement | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Loan Agreement | In 2012, the Company entered into a Loan and Security Agreement (“Loan Agreement”). The Loan Agreement consists of a $40.0 million revolving line of credit facility, which includes a $10.0 million sub-facility for letters of credit. Certain terms of the original Loan Agreement have been revised by subsequent amendments. The Loan Agreement, as amended, expires in August 2020. Due to the lock box arrangement and a subjective acceleration clause contained in the Loan Agreement, any outstanding borrowings under the revolving line of credit are classified as a current liability. Currently, credit available under the Loan Agreement, as amended, is based upon: 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 . The applicable interest rates for borrowings are at the Prime rate or, if the Company elects, the LIBOR rate plus 1.50% to 1.85% based on the Company’s debt to EBITDA ratio. The Loan Agreement is secured by a first priority perfected security interest in substantially all existing assets of the Company. Dividends are restricted to amounts not to exceed $7.0 million annually. At June 30, 2017 , the Company had no borrowings under its revolving line of credit facility and additional borrowing availability of $35.5 million . The Company paid interest of $0.3 million for both the six months ended June 30, 2017 and 2016 . The weighted average interest rate was 3.91% for the six months ended June 30, 2017 and 3.50% for the six months ended June 30, 2016. In addition to other customary representations, warranties and covenants, the Company is required to meet a minimum trailing twelve month EBITDA to fixed charges ratio, as defined in the amended Loan Agreement, if the excess borrowing capacity is below $10.0 million . On June 30, 2017 , the Company's borrowing capacity exceeded $10.0 million . Therefore, the Company was not subject to this financial covenant, however, for informational purposes the result of the financial covenant is provided below: Quarterly Financial Covenant Requirement Actual EBITDA to fixed charges ratio 1.10 : 1.00 2.64 : 1.00 |
Reserve for Severance
Reserve for Severance | 6 Months Ended |
Jun. 30, 2017 | |
Severance Reserve [Abstract] | |
Reserve for Severance | Severance Reserve Changes in the Company’s reserve for severance as of June 30, 2017 and 2016 were as follows: (Dollars in thousands) Six Months Ended June 30, 2017 2016 Balance at beginning of period $ 1,710 $ 697 Charged to earnings 456 347 Payments (1,213 ) (677 ) Balance at end of period $ 953 $ 367 The remaining severance liabilities outstanding as of June 30, 2017 will be substantially paid by the end of 2017. |
Stock Based Compensation Stock
Stock Based Compensation Stock Based Compensation (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Stock Based Compensation [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-Based Compensation The Company recorded stock-based compensation expense of $0.4 million and a benefit of $0.7 million for the first six months of 2017 and 2016, respectively. A portion of stock-based compensation is related to the change in the market value of the Company's common stock. A summary of stock-based awards issued during the six months ended June 30, 2017 follows: Stock Performance Rights ("SPRs") The Company issued 35,351 SPRs to key employees with an exercise price of $22.75 per share that cliff vest on December 31, 2019 and have a termination date of December 31, 2024. Restricted Stock Units ("RSUs") The Company issued 21,614 RSUs to key employees with a vesting date of December 31, 2019. Each RSU is exchangeable for one share of the Company's common stock at the end of the vesting period. Restricted Stock Awards ("RSAs") The Company issued 30,304 RSAs to members of the Company's Board of Directors with a vesting date of May 16, 2018 and issued 3,000 RSAs to key employees with a vesting date of December 31, 2019. Each RSA is exchangeable for one share of the Company's common stock at the end of the vesting period. Market Stock Units ("MSUs") The Company issued 39,238 MSUs to key employees that cliff vest on December 31, 2019. MSU's are exchangeable for the Company's common stock at the end of the vesting period. The number of shares of common stock that will be issued upon vesting, ranging from zero to 58,857 , will be determined based upon the trailing sixty-day weighted average closing price of the Company's common stock on December 31, 2019. |
Income Tax
Income Tax | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At each reporting date, Lawson’s management considers new evidence, both positive and negative, that could impact management’s view with regard to the realization of its deferred tax assets and the reversal of the corresponding valuation allowances. Although the Company has generated pre-tax profits over the past two quarters and has begun to utilize a small portion of its net operating loss carryforwards over the past two years, management feels that additional positive evidence is necessary in order to conclude that it is more likely than not that it will be able to realize its deferred tax assets. Therefore, as of June 30, 2017 , substantially all deferred tax assets remain subject to a tax valuation allowance. If the Company continues to demonstrate that it can consistently generate income in future quarters, it may lead to a determination that there is sufficient positive evidence to conclude that it is more likely than not that the company will be able to utilize its deferred tax assets to offset future taxable income. This would lead to the reduction of all or a portion of the valuation allowance resulting in an income tax benefit for the period in which the reduction is recorded. The Company will continue to closely monitor all positive and negative evidence and will re-assess its position on a quarterly basis. Although the Company is in this full tax valuation allowance position, income tax expenses of $0.3 million and $0.1 million were recorded for the six months ended June 30, 2017 and 2016 , respectively, primarily due to reserves for uncertain tax positions, federal alternative minimum taxes and state taxes. During the second quarter of 2017, the company increased its deferred tax assets and related valuation allowance by $6.5 million that may arise from future settlement of uncertain tax positions in Canada. There was no impact to the Company's consolidated statements of income and comprehensive income, balance sheets or statements of cash flows, as the company had valuation allowances equal to the value of the deferred tax assets. The Company and its subsidiaries are subject to U.S. Federal income tax, as well as income tax of multiple state and foreign jurisdictions. As of June 30, 2017 , the Company is subject to U.S. Federal income tax examinations for the years 2013 through 2015 and income tax examinations from various other jurisdictions for the years 2006 through 2015. Earnings from the Company’s foreign subsidiary are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise would subject the Company to both U.S. Federal and state income taxes, as adjusted for foreign tax credits. |
Contingent Liability Contingent
Contingent Liability Contingent Liability (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Contingent Liability [Abstract] | |
Legal Matters and Contingencies [Text Block] | Contingent Liabilities In 2012, the Company identified that a site it owns in Decatur, Alabama, contains hazardous substances in the soil and groundwater as a result of historical operations prior to the Company's ownership. The Company retained an environmental consulting firm to further investigate the contamination including the measurement and monitoring of the site. In August 2013, the site was enrolled in Alabama's voluntary cleanup program. On October 30, 2014, the Company received estimates from its environmental consulting firm for three potential remediation solutions. The estimates included a range of viable remedial approaches. The first solution included limited excavation and removal of the contaminated soil along with monitoring for a period up to 10 years. The second solution included the first solution plus the installation of a groundwater extraction system. The third scenario included the first and second solutions plus treatment injections to reduce the degradation time. The estimated expenditures over a 10 -year period under the three scenarios ranged from $0.3 million to $1.4 million , of which up to $0.3 million may be capitalized. As the Company has determined that a loss was probable and no scenario was more likely than the other at that time, a liability in the amount of $0.3 million was established in 2014. During 2015, after further evidence had been collected and analyzed, the Company concluded that it was probable that future remediation would be required, and accordingly accrued an additional $0.9 million for the estimated costs. This estimate is based on the information developed to date and as the remediation efforts proceed, additional information may impact the final cost. As of June 30, 2017 , agreement with Alabama’s voluntary cleanup program on viable treatment of the property has not yet been reached and the Company continues to evaluate potential remediation alternatives that could impact the ultimate cost of remediation. As of June 30, 2017 , approximately $1.0 million was accrued for remediation in other long-term liabilities on the accompanying consolidated balance sheet. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of inventories | Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) June 30, 2017 December 31, 2016 Inventories, gross $ 47,843 $ 48,038 Reserve for obsolete and excess inventory (5,470 ) (5,477 ) Inventories, net $ 42,373 $ 42,561 |
Acquisitions and Goodwill Busin
Acquisitions and Goodwill Business Acquisitions, Pro Forma Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill Rollforward [Abstract] | |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table contains unaudited pro forma net sales and net income for Lawson Products assuming the Perfect Products, F.B Feeney and Mattic acquisitions closed on January 1, 2015. (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net sales Actual $ 75,006 $ 69,348 $ 149,623 $ 139,059 Pro forma 75,006 70,384 149,623 141,760 Net income Actual $ 7,273 $ 172 $ 8,130 $ 1,189 Pro forma 7,273 421 8,130 1,614 The pro forma disclosures in the table above include adjustments for, amortization of intangible assets and acquisition costs to reflect results that are more representative of the combined results of the transactions as if the Mattic, F.B Feeney and Perfect Product acquisitions closed on January 1, 2015 rather than on the actual acquisition dates. This pro forma information utilizes certain estimates, is presented for illustrative purposes only and is not intended to be indicative of the actual results of operation. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future positive or negative events that may occur after the acquisition, such as anticipated cost savings from operating synergies. |
Acquisitions and Goodwill Goodw
Acquisitions and Goodwill Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill Rollforward [Abstract] | |
Schedule of Goodwill [Table Text Block] | Goodwill activity for the first half of 2017 and 2016 is included in the table below: (Dollars in thousands) Six Months Ended June 30, 2017 2016 Beginning balance $ 5,520 $ 319 Acquisition — 2,442 Impact of foreign exchange 161 12 Ending balance $ 5,681 $ 2,773 |
Loan Agreement (Tables)
Loan Agreement (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Quarterly Financial Covenants [Table Text Block] | In addition to other customary representations, warranties and covenants, the Company is required to meet a minimum trailing twelve month EBITDA to fixed charges ratio, as defined in the amended Loan Agreement, if the excess borrowing capacity is below $10.0 million . On June 30, 2017 , the Company's borrowing capacity exceeded $10.0 million . Therefore, the Company was not subject to this financial covenant, however, for informational purposes the result of the financial covenant is provided below: Quarterly Financial Covenant Requirement Actual EBITDA to fixed charges ratio 1.10 : 1.00 2.64 : 1.00 |
Reserve for Severance (Tables)
Reserve for Severance (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Severance Reserve [Abstract] | |
Changes in the Company's reserve for severance and related payments | Changes in the Company’s reserve for severance as of June 30, 2017 and 2016 were as follows: (Dollars in thousands) Six Months Ended June 30, 2017 2016 Balance at beginning of period $ 1,710 $ 697 Charged to earnings 456 347 Payments (1,213 ) (677 ) Balance at end of period $ 953 $ 367 |
Basis of Presentation and Sum21
Basis of Presentation and Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Compensation Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive Options Outstanding | 40,000 | 40,000 | 40,000 | 40,000 |
Basis of Presentation and Sum22
Basis of Presentation and Summary of Significant Accounting Policies Cumulative adjustment to retained earnings (Details) | Jan. 01, 2017USD ($) |
Cumulative adjustment to retained earnings [Abstract] | |
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 178,000 |
Restricted Cash Restricted Ca23
Restricted Cash Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Restricted Cash [Abstract] | ||
Restricted cash | $ 800 | $ 800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Components of inventories | ||
Inventory, Gross | $ 47,843 | $ 48,038 |
Inventory Valuation Reserves | (5,470) | (5,477) |
Inventories, net | $ 42,373 | $ 42,561 |
Sale of Property (Details)
Sale of Property (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property held for sale [Abstract] | ||||
Proceeds from Sale of Property, Plant, and Equipment | $ 6,177 | $ 0 | ||
Gain on Sale of Property | $ (5,422) | $ 0 | $ (5,422) | $ 0 |
Acquisitions and Goodwill Acqui
Acquisitions and Goodwill Acquisition Detail (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 0 | $ 2,576 | |
Perfect Products [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 1,300 | ||
Business Combination, Contingent Consideration, Liability | 30 | ||
Feeney [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | 1,300 | ||
Business Combination, Contingent Consideration, Liability | 100 | ||
Mattic [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | 3,500 | ||
Business Combination, Contingent Consideration, Liability | $ 300 |
Acquisitions and Goodwill Pro F
Acquisitions and Goodwill Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Pro Forma Information [Abstract] | ||||
Net sales Actual | $ 75,006 | $ 69,348 | $ 149,623 | $ 139,059 |
Net Sales Pro Forma | 75,006 | 70,384 | 149,623 | 141,760 |
Net Income Actual | 7,273 | 172 | 8,130 | 1,189 |
Net income Pro Forma | $ 7,273 | $ 421 | $ 8,130 | $ 1,614 |
Acquisitions and Goodwill Goo28
Acquisitions and Goodwill Goodwill Table (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill Table [Abstract] | ||
Goodwill Beginning Balance | $ 5,520 | $ 319 |
Goodwill, Acquired During Period | 0 | 2,442 |
Impact of foreign exchange | 161 | 12 |
Goodwill Ending Balance | $ 5,681 | $ 2,773 |
Loan Agreement Covenant (Detail
Loan Agreement Covenant (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Maximum [Member] | Actual Value [Member] | |
Loan Agreement [Line Items] | |
Minimum Debt Service Coverage Ratio | 2.64 |
Maximum [Member] | Required Minimum Value [Member] | |
Loan Agreement [Line Items] | |
Minimum Debt Service Coverage Ratio | 1.10 |
Minimum [Member] | Actual Value [Member] | |
Loan Agreement [Line Items] | |
Minimum Debt Service Coverage Ratio | 1 |
Minimum [Member] | Required Minimum Value [Member] | |
Loan Agreement [Line Items] | |
Minimum Debt Service Coverage Ratio | 1 |
Loan Agreement (Details)
Loan Agreement (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Loan Agreement [Line Items] | |||
Excess cash capacity | $ 10,000 | ||
Credit Facility (Textual) [Abstract] | |||
Eligible accounts receivables percentage | 85.00% | ||
Eligible accounts receivables past due days | 60 days | ||
Eligible inventory percentage | 60.00% | ||
Eligible inventory expected to be sold period | 18 months | ||
Maximum borrowing amount based on inventory | $ 20,000 | ||
Revolving Line of Credit | 0 | $ 841 | |
Credit Facility, remaining borrowing capacity | 35,500 | ||
Interest Paid | $ 264 | $ 320 | |
Weighted average interest rate | 3.91% | 3.50% | |
Maximum | |||
Credit Facility (Textual) [Abstract] | |||
Spread on LIBOR | 1.85% | ||
Restricted Dividends | $ 7,000 | ||
Minimum | |||
Credit Facility (Textual) [Abstract] | |||
Spread on LIBOR | 1.50% | ||
Revolving Credit Facility [Member] | |||
Credit Facility (Textual) [Abstract] | |||
Credit facility, borrowing capacity | $ 40,000 | ||
Letter of Credit [Member] | |||
Credit Facility (Textual) [Abstract] | |||
Credit facility, borrowing capacity | $ 10,000 |
Reserve for Severance Activity
Reserve for Severance Activity in reserve (Details) - Employee Severance [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Reserve for severance and related payments | ||
Balance at beginning of period | $ 1,710 | $ 697 |
Charged to earnings | 456 | 347 |
Cash paid | (1,213) | (677) |
Balance at end of the period | $ 953 | $ 367 |
Stock Based Compensation Stoc32
Stock Based Compensation Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Based Compensation | ||
Employee Benefits and Share-based Compensation | $ 385 | $ (702) |
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 21,614 | |
Minimum [Member] | ||
Stock Based Compensation | ||
Equity Share Payout Range | 0 | |
Maximum [Member] | ||
Stock Based Compensation | ||
Equity Share Payout Range | 58,857 | |
MSU [Member] | ||
Stock Based Compensation | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 39,238 | |
Share-based Compensation Award, Tranche Two [Member] | ||
Stock Based Compensation | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 35,351 | |
Share Based Compensation Non Option Equity Instruments Granted Weighted Average Exercise Price | $ 22.75 | |
Director Grant [Domain] | ||
Stock Based Compensation | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 30,304 | |
Executive Grant [Domain] | ||
Stock Based Compensation | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 3,000 |
Income Tax Income Tax (Details)
Income Tax Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax [Abstract] | ||||
Increase (Decrease) in Deferred Income Taxes | $ (6,500) | |||
Income Tax Expense (Benefit) | $ 337 | $ (46) | 323 | $ 63 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 6,500 |
Contingent Liability Continge34
Contingent Liability Contingent Liability (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | ||
Environmental Remediation Term | 10 years | |
Environmental Exit Costs, Reasonably Possible Additional Losses, Low Estimate | $ 0.9 | |
Capitalizable Environmental Exit Costs | 0.3 | |
Environmental Exit Costs, Liability for Remediation | 1 | $ 0.3 |
Minimum [Member] | ||
Loss Contingencies [Line Items] | ||
Environmental Exit Costs, Anticipated Cost | 0.3 | |
Maximum [Member] | ||
Loss Contingencies [Line Items] | ||
Environmental Exit Costs, Anticipated Cost | $ 1.4 |