Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 15, 2018 | |
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 | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,919,644 | 8,919,644 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 7,663 | $ 4,416 |
Restricted cash | 800 | 800 |
Accounts receivable, less allowance for doubtful accounts of $445 and $476, respectively | 43,561 | 38,575 |
Allowance for Doubtful Accounts | 445 | 476 |
Inventories, net | 51,154 | 50,928 |
Miscellaneous receivables and prepaid expenses | 5,077 | 3,728 |
Total current assets | 108,255 | 98,447 |
Property, plant and equipment, net | 24,535 | 27,333 |
Deferred income taxes | 20,457 | 21,248 |
Goodwill | 19,114 | 19,614 |
Cash value of life insurance | 13,360 | 11,964 |
Intangible assets, net | 10,901 | 11,813 |
Other assets | 339 | 248 |
Total assets | 196,961 | 190,667 |
Current liabilities: | ||
Revolving line of credit | 9,918 | 14,543 |
Accounts payable | 16,332 | 12,394 |
Accrued expenses and other liabilities | 38,583 | 33,040 |
Total current liabilities | 64,833 | 59,977 |
Noncurrent liabilities: | ||
Security bonus plan | 12,876 | 12,981 |
Financing lease obligation | 5,524 | 6,420 |
Deferred compensation | 6,107 | 5,476 |
Deferred rent liability | 2,081 | 3,512 |
Deferred tax liability | 3,073 | 3,115 |
Other liabilities | 4,445 | 5,696 |
Total liabilities | 98,939 | 97,177 |
Stockholders' equity: | ||
Authorized - 500,000 shares, Issued and outstanding — None | 0 | 0 |
Authorized - 35,000,000 shares Issued - 8,952,918 and 8,921,302 shares, respectively Outstanding - 8,919,644 and 8,888,028 shares, respectively | 8,953 | 8,921 |
Capital in excess of par value | 14,989 | 13,005 |
Retained earnings | 74,738 | 71,453 |
Treasury stock – 33,274 shares | (711) | (711) |
Accumulated other comprehensive income | 53 | 822 |
Total stockholders’ equity | 98,022 | 93,490 |
Total liabilities and stockholders’ equity | $ 196,961 | $ 190,667 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 8,921,302 | 8,921,302 |
Common stock, shares outstanding | 8,919,644 | 8,888,028 |
Treasury Stock, Shares | 33,274 | 33,274 |
Consolidated Statements of oper
Consolidated Statements of operations and Comprehensive Income (loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Product revenue | $ 78,377 | $ 75,651 | $ 233,744 | $ 225,274 |
Service revenue | 10,153 | 0 | 29,627 | |
Total revenue | 88,530 | 75,651 | 263,371 | 225,274 |
Product cost of goods sold | 36,979 | 29,646 | 109,667 | 89,249 |
Service costs | 3,443 | 0 | 10,247 | 0 |
Gross profit | 48,108 | 46,005 | 143,457 | 136,025 |
Operating expenses: | ||||
Selling expenses | 22,175 | 24,354 | 66,119 | 72,964 |
General and administrative expenses | 28,199 | 20,561 | 72,213 | 58,790 |
Total SG&A | 50,374 | 44,915 | 138,332 | 131,754 |
Gain on sale of property | 0 | 0 | 0 | (5,422) |
Operating expenses | 50,374 | 44,915 | 138,332 | 126,332 |
Operating income (loss) | (2,266) | 1,090 | 5,125 | 9,693 |
Interest expense | (251) | (133) | (755) | (393) |
Other (expense) income, net | 170 | 843 | (320) | 953 |
Income (loss) before income taxes | (2,347) | 1,800 | 4,050 | 10,253 |
Income tax (benefit) expense | $ (1,531) | $ 479 | $ 436 | $ 802 |
Basic income (loss) per share of common stock | $ (0.09) | $ 0.15 | $ 0.41 | $ 1.07 |
Diluted income (loss) per share of common stock | $ (0.09) | $ 0.14 | $ 0.39 | $ 1.04 |
Weighted average shares outstanding: | ||||
Basic weighted average shares outstanding | 8,919 | 8,880 | 8,904 | 8,856 |
Effect of dilutive securities outstanding | 0 | 253 | 346 | 256 |
Diluted weighted average shares outstanding | 8,919 | 9,133 | 9,250 | 9,112 |
Comprehensive income (loss): | ||||
Net (loss) income | $ (816) | $ 1,321 | $ 3,614 | $ 9,451 |
Adjustment for foreign currency translation | 692 | 139 | (769) | 941 |
Net comprehensive income (loss) | $ (124) | $ 1,460 | $ 2,845 | $ 10,392 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net income | $ 3,614 | $ 9,451 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,120 | 4,940 |
Stock-based compensation | 8,694 | 2,722 |
Deferred income taxes | 830 | 0 |
Gain on sale of property | 0 | (5,422) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,624) | (7,046) |
Inventories | (566) | (373) |
Prepaid expenses and other assets | (3,651) | (1,562) |
Accounts payable and other liabilities | 1,315 | 738 |
Other | 442 | 307 |
Net cash provided by operating activities | 10,174 | 3,755 |
Investing activities: | ||
Purchases of property, plant and equipment | (1,626) | (1,228) |
Business acquisition | (157) | 0 |
Proceeds from sale of property | 0 | 6,177 |
Net cash provided by (used in) investing activities | (1,783) | 4,949 |
Financing activities: | ||
Net proceeds from revolving lines of credit | (4,625) | (841) |
Proceeds from stock option exercises | 14 | 0 |
Payments for Repurchase of Common Stock | 0 | (20) |
Net cash used in financing activities | (4,611) | (861) |
Effect of exchange rate changes on cash and cash equivalents | (533) | 779 |
Increase in cash, cash equivalents and restricted cash | 3,247 | 8,622 |
Cash, cash equivalents and restricted cash at beginning of period | 5,216 | 11,221 |
Cash, cash equivalents and restricted cash at end of period | $ 8,463 | $ 19,843 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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, 2017 . 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 nine month periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . The Company has two operating segments. The first segment, the Lawson operating segment, distributes maintenance, repair and operations ("MRO") products to customers primarily through a network of sales representatives offering vendor managed inventory ("VMI") service to customers throughout the United States and Canada. The second segment, The Bolt Supply House Ltd. ("Bolt Supply") operating segment, distributes MRO products primarily through its branches located in Western Canada. Bolt Supply had 13 branches in operation at the end of the third quarter 2018. |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Revenue Recognition | Revenue Recognition Adoption of ASC 606 On January 1, 2018 the Company adopted Accounting Standards Codification 606-Revenue From Contracts With Customers (“ASC 606”). As part of the Company's adoption of ASC 606, it concluded that it has two separate performance obligations, and accordingly, two separate revenue streams: products and services. As a result, the Company is now reporting two separate revenue streams and two separate costs of revenues. The adoption of ASC 606 had a minimal impact on total reported revenues, costs and net income for the first nine months of 2018. However, the adoption required prospective reclassification of certain selling expenses associated with the separately identified vendor managed inventory services performance obligation costs historically classified as selling expenses to cost of sales. As ASC 606 was adopted on a modified retrospective method, prior quarters are not restated. Effective January 1, 2018, the Company recorded a cumulative effect adjustment in opening retained earnings in the amount of $0.3 million based on applying the guidance to the customer contracts that were not completed on that date. ASC 606 defines a five step process to recognize revenues at the time and in an amount that reflects the consideration expected to be received for the performance obligations that have been provided. ASC 606 defines contracts as written, oral and through customary business practice. Under this definition, the Company considers contracts to be created at the time an order to purchase product is agreed upon regardless of whether or not there is a written contract. Performance Obligations Lawson has two operating segments; the Lawson segment and the Bolt Supply segment. Customer contracts have the following performance obligations: The Lawson segment has two distinct performance obligations offered to its customers: a product performance obligation and a service performance obligation. Although the Company has identified that it offers its customers both a product and a service obligation, the customer only receives one invoice per transaction with no price breakout between these obligations. The Company does not price its offerings based on any breakout between these obligations. Lawson generates revenue primarily from the sale of MRO products to its customers. Revenue related to product sales is recognized at the time that control of the product has been transferred to the customer; either at the time the product is shipped or the time the product has been received by the customer. The Company does not commit to long-term contracts to sell customers a certain minimum quantity of products. The Lawson segment offers a VMI service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided a short period of time after control of the purchased product has been transferred to the customer. Since some components of VMI service have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided. The Bolt Supply segment does not provide VMI services for its customers or provide services in addition to product sales to customers. Revenue is recognized at the time that control of the product has been transferred to the customer which is either upon delivery or shipment depending on the terms of the contract. Accounting Policy Elections The Company has elected to treat shipping and handling costs after the control of the product has been transferred to the customer as a fulfillment cost. Sales taxes that are imposed on our sales and collected from customers are excluded from revenues. The Company expenses sales commissions when incurred as the amortization period is one year or less. Significant Judgments The Company employs certain significant judgments to estimate the dollar amount of revenue, and related expenses, allocated to the sale of product and service. These judgments include, among others, the percentage of customers that take advantage of the VMI services offered, the amount of revenue to be allocated to the VMI service based on the value of the service to its customers, and the amount of time after control of the product passes to the customer that the VMI service obligation is completed. It is assumed that any customer who averages placing orders at a frequency of longer than 30 days does not take advantage of the available VMI services offered. The estimate of the cost of sales is based on expenses directly related to sales representatives that provide direct VMI services to the customer. Financial Impact of ASC 606 Adoption As a result of applying ASC 606 the Company recorded a liability of $0.7 million for deferred revenue on January 1, 2018 . Expenses related to these revenues of $0.4 million were also deferred resulting in a net reduction to opening retained earnings of $0.3 million as of January 1, 2018 . At September 30, 2018, the Company had a deferred revenue liability of $0.7 million and a deferred expense of $0.3 million for related expenses associated with the deferred service performance obligations, respectively. The deferral of revenue and expenses does not affect the amount, timing and any uncertainty of cash flows generated from operations. The following table presents the impact of ASC 606 on Condensed Consolidated Statements of Operations (Unaudited): Three Months Ended September 30, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect Product revenue $ 78,377 $ 10,207 $ 88,584 Service revenue 10,153 (10,153 ) — Total revenue $ 88,530 $ 54 $ 88,584 Product cost of goods sold $ 36,979 $ — $ 36,979 Service costs 3,443 (3,443 ) — Total cost of goods sold $ 40,422 $ (3,443 ) $ 36,979 Gross profit 48,108 3,497 51,605 Gross profit percentage 54.3 % 58.3 % Selling expenses 22,175 3,468 25,643 General and administrative expenses 28,199 — 28,199 Operating expenses 50,374 3,468 53,842 Operating loss as reported was $2.27 million whereas pro forma operating loss as if previous accounting guidance was in effect would have been $2.24 million . Nine Months Ended September 30, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect Product revenue $ 233,744 $ 29,609 $ 263,353 Service revenue 29,627 (29,627 ) — Total revenue $ 263,371 $ (18 ) $ 263,353 Product cost of goods sold $ 109,667 $ — $ 109,667 Service costs 10,247 (10,247 ) — Total cost of goods sold $ 119,914 $ (10,247 ) $ 109,667 Gross profit 143,457 10,229 153,686 Gross profit percentage 54.5 % 58.4 % Selling expenses 66,119 10,092 76,211 General and administrative expenses 72,213 — 72,213 Operating expenses 138,332 10,092 148,424 Operating income as reported was $5.13 million whereas pro forma operating income as if previous accounting guidance was in effect would have been $5.26 million . Disaggregated revenue by geographic area follows: Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 United States $ 70,652 $ 67,575 $ 210,596 $ 202,176 Canada 17,878 8,076 52,775 23,098 Consolidated total $ 88,530 $ 75,651 $ 263,371 $ 225,274 Disaggregated revenue by product type follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Fastening Systems 24.6 % 20.4 % 24.5 % 20.6 % Fluid Power 14.6 % 16.3 % 14.7 % 15.7 % Specialty Chemicals 12.6 % 14.5 % 12.3 % 14.3 % Cutting Tools and Abrasives 13.7 % 14.2 % 13.5 % 14.3 % Electrical 10.6 % 11.7 % 10.9 % 11.9 % Aftermarket Automotive Supplies 7.6 % 8.4 % 8.0 % 8.8 % Safety 4.6 % 4.2 % 4.6 % 4.2 % Welding and Metal Repair 1.7 % 2.2 % 1.9 % 2.2 % Other 10.0 % 8.1 % 9.6 % 8.0 % Consolidated Total 100.0 % 100.0 % 100.0 % 100.0 % |
Restricted Cash Restricted Cash
Restricted Cash Restricted Cash | 9 Months Ended |
Sep. 30, 2018 | |
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. The adoption of ASU 2016-18 does not materially affect the accounting for restricted cash of the Company. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories, net Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Inventories, gross $ 56,602 $ 56,492 Reserve for obsolete and excess inventory (5,448 ) (5,564 ) Inventories, net $ 51,154 $ 50,928 |
Acquisitions Acquisition
Acquisitions Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisition In October 2017, the Company acquired Bolt Supply, based in Calgary, Canada, for a purchase price of approximately $32.3 million , The purchase price was funded with cash on hand and utilization of Lawson Products’ existing credit facility. Bolt Supply is a leading Canadian distributor of high quality fasteners, power tools and industrial MRO supplies, with 13 branch locations throughout Alberta, Saskatchewan, and Manitoba, Canada at the end of the third quarter 2018. The purchase price of the acquisition was allocated to the fair market value of Bolt Supply's assets and liabilities on the acquisition date. The fair market value appraisals of the majority of the assets and liabilities were determined by third party valuation firms including intangible assets of $7.2 million for trade names and $4.2 million for customer relationships, respectively. The trade names and customer relationships intangible assets have estimated useful lives of 15 and 12 years, respectively. The $14.0 million allocated to goodwill reflects the purchase price less the fair market value of the identifiable net assets. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on estimates and assumptions. Further operating details related to the operations of Bolt Supply subsequent to the acquisition are included in Note 14 - Segment information . The following table contains unaudited pro forma revenue and net income (loss) for Lawson Products assuming the Bolt Supply acquisition closed on January 1, 2016. (Dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue Actual $ 88,530 $ 75,651 $ 263,371 $ 225,274 Pro forma 88,530 85,156 263,371 250,781 Net income (loss) Actual $ (816 ) $ 1,321 $ 3,614 $ 9,451 Pro forma (816 ) 1,534 3,614 10,175 The pro forma disclosures in the table above include adjustments for, amortization of intangible assets and acquisition costs to reflect results as if the acquisition of Bolt Supply had closed on January 1, 2016 rather than on the actual acquisition date. 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 Goodwill
Goodwill Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure [Text Block] | Goodwill Goodwill activity for the first nine months of 2018 and 2017 is included in the table below: (Dollars in thousands) Nine Months Ended September 30, 2018 2017 Beginning balance $ 19,614 $ 5,520 Adjustment to original acquisition allocation (17 ) (73 ) Impact of foreign exchange (483 ) 342 Ending balance $ 19,114 $ 5,789 |
Intangible assets (Notes)
Intangible assets (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Intangible Assets [Abstract] | |
Intangible Assets Disclosure [Text Block] | Intangible assets The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 7,994 $ (1,341 ) $ 6,653 $ 8,182 $ (957 ) $ 7,225 Customer relationships 4,785 (537 ) 4,248 4,911 (323 ) 4,588 $ 12,779 $ (1,878 ) $ 10,901 $ 13,093 $ (1,280 ) $ 11,813 Amortization expense of $0.7 million and $0.2 million related to intangible assets was recorded in General and administrative expenses for the nine months ended September 30, 2018 and 2017, respectively. |
Loan Agreement
Loan Agreement | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Loan Agreement | Lawson 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 September 30, 2018 , the Company had $8.4 million of borrowings under its revolving line of credit facility and additional borrowing availability of $27.0 million . The Company paid interest of $0.8 million and $0.4 million for the nine months ended September 30, 2018 and 2017 , respectively. The weighted average interest rate was 3.82% for the nine months ended September 30, 2018 and 3.91% for the nine months ended September 30, 2017 . 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 September 30, 2018 , 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 3.60 : 1.00 Commitment Letter Bolt Supply has a Commitment Letter with BMO Bank of Montreal ("BMO") dated March 30, 2017 which allows Bolt Supply to access up to $5.5 million Canadian dollars in the form of either an overdraft facility or as commercial letters of credit. The Commitment Letter is cancellable at any time at BMOs sole discretion and is secured by substantially all of Bolt Supply’s assets. It carries an interest rate of the bank's prime rate plus 0.25% . At September 30, 2018 , Bolt Supply had $2.0 million Canadian dollars of outstanding borrowings and remaining borrowing availability of $3.5 million Canadian dollars. The Commitment Letter is subject to a working capital ratio of 1.35 :1, a maximum ratio of debt to tangible net worth of 2.5 :1 of the Bolt Supply assets and Debt Service Coverage Ratio 1.25 :1 as defined in the Commitment Letter. At September 30, 2018 , Bolt Supply was in compliance with all covenants which are subject to periodic review, at least annually, with the next review due by August 31, 2019. |
Reserve for Severance
Reserve for Severance | 9 Months Ended |
Sep. 30, 2018 | |
Severance Reserve [Abstract] | |
Reserve for Severance | Severance Reserve Changes in the Company’s reserve for severance as of September 30, 2018 and 2017 were as follows: (Dollars in thousands) Nine Months Ended September 30, 2018 2017 Balance at beginning of period $ 483 $ 1,710 Charged to earnings 723 595 Payments (787 ) (1,625 ) Balance at end of period $ 419 $ 680 |
Stock-Based Compensation (Notes
Stock-Based Compensation (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Based Compensation [Abstract] | |
Stock Performance Rights | Stock-Based Compensation The Company recorded stock-based compensation expense of $8.7 million and $2.7 million for the first nine months of 2018 and 2017, 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 activity during the nine months ended September 30, 2018 follows: Stock Performance Rights ("SPRs") The Company issued 44,737 SPRs to key employees with an exercise price of $24.70 per share that cliff vest on December 31, 2020 and have a termination date of December 31, 2025. Restricted Stock Awards ("RSAs") The Company issued 26,080 RSAs to members of the Company's Board of Directors with a vesting date of May 15, 2019 and issued 20,059 RSAs to key employees that cliff vest on December 31, 2020. 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 32,194 MSUs to key employees that cliff vest on December 31, 2020. 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 48,291 , will be determined based upon the trailing sixty-day weighted average closing price of the Company's common stock on December 31, 2020. For the three months ended September 30, 2018, the effect of restricted stock awards, market stock units and future stock option exercises equivalent of approximately 403,000 shares was excluded from the computation of diluted earnings per share because they would have been anti-dilutive. For the nine months ended September 30, 2018 , stock options to purchase approximately 46,000 shares of the Company's common stock were excluded from the computation of diluted earnings per share because they were anti-dilutive. For the three and nine months ended September 30, 2017 , stock options to purchase approximately 80,000 and 67,000 shares, respectively, of the Company's common stock were excluded from the computation of diluted earnings per share because they were anti-dilutive. |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded income tax expenses of $0.4 million , a 10.8% effective tax rate for the nine months ended September 30, 2018 . The effective tax rate is lower than the U.S. statutory rate due mainly to discrete items such as the finalization of our calculation for previously untaxed foreign earnings and profits. The Securities and Exchange Commission ("SEC") recently issued SAB 118 (Income Tax Accounting Implications of the Tax Cuts and Jobs Act) which allows registrants to record provisional amounts during a measurement period. The SAB allows a company to recognize provisional amounts when it does not have the necessary information prepared in reasonable detail to calculate the effect of the change in tax law. Per the SAB, a company should report provisional amounts when the accounting is not complete, but for which a reasonable estimate can be determined. Lawson included in its 2017 taxable income calculation a provisional amount of approximately $8.4 million representing previously untaxed foreign earnings and profits as of December 31, 2017. The Company did not accrue any federal income tax on this amount as the Company is able to utilize federal net operating losses to offset the income. The Company recently finalized the foreign earnings and profits calculation in conjunction with the finalization of 2017 federal income tax return when all required necessary information was more readily available. A lower final foreign earnings and profits inclusion resulted in a tax benefit which had a beneficial impact on the effective tax rate for the nine months ended September 30, 2018. Excluding the discrete items, the Company's effective tax rate was 33.5% for the nine months ended September 30, 2018. An income tax expense of $0.8 million was recorded for the nine months ended September 30, 2017 as substantially all deferred tax assets were still subject to a tax valuation allowance at that time. 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 September 30, 2018 , the Company is subject to U.S. Federal income tax examinations for the years 2015 through 2017 and income tax examinations from various other jurisdictions for the years 2011 through 2017. Earnings from the Company’s foreign subsidiaries are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise may subject the Company to foreign withholding taxes and U.S. federal and state taxes. |
Contingent Liability Contingent
Contingent Liability Contingent Liability (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Contingent Liability [Abstract] | |
Environmental Contingency | 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 and the site was enrolled in the Alabama Department of Environmental Management (“ADEM") voluntary cleanup program. As of December 31, 2017, the Company had received estimates from its environmental consulting firm for two remediation solutions based on a chemical injection process. The first solution consisted of chemical injections throughout the entire site to directly eliminate the hazardous substances in the soil and groundwater. The second solution consisted of chemical injections around the perimeter of the site to prevent the migration of the hazardous chemicals off-site. Neither solution required additional excavation or repairs to be made to the property. The estimated expenditures over an 18 month period under the two injection scenarios ranged from $0.9 million to $2.0 million . The Company had determined that it would initially proceed with the method of injecting chemicals around the perimeter of the site to prevent the migration of the hazardous chemicals off-site. As of December 31, 2017, approximately $1.0 million remained accrued for this remediation. In June 2018, the Company received updated environmental remediation estimates from its environmental consulting firm based on information analyzed from further data collection and consultation with ADEM on their anticipated requirements. The updated remediation plan expands the chemical injection process over a larger area than previously estimated, including under the building on the property. The updated plan also requires four consecutive quarters of monitoring the affected area after the injection process is completed. Based upon feedback received from ADEM, the Company accrued an additional $0.5 million of expense in the second quarter of 2018 to bring the total liability to $1.4 million which represents the most likely outcome. This plan is expected to be approved by ADEM with remediation efforts commencing in the first quarter of 2019. The Company believes the environmental remediation liability of $1.4 million currently accrued will be sufficient to cover the cost of the plan. The Company does not expect to capitalize any amounts related to the remediation plan. |
Lease termination (Notes)
Lease termination (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Lease termination [Abstract] | |
Lease termination | Note 13 — Lease Termination In the first quarter of 2012, the Company signed a 10 year agreement to lease space for a new corporate headquarters in Chicago, Illinois ("Lease"). In the fourth quarter of 2013, due to excess capacity as a result of a corporate restructuring, the Company agreed to sublease a portion (approximately 17,100 square feet) of its corporate headquarters to a third party ("Sublease"). Both the Lease and the Sublease were scheduled to terminate in the first quarter of 2023. In the second quarter of 2018, the Company entered into agreements with the lessor and the sub lessee to terminate both the Lease and Sublease in June 2019. The original loss recorded on the Sublease was reduced by $0.7 million in the second quarter of 2018 to reflect the shortened lease time frame. Additionally, the Company is required to pay a $0.5 million fee before June 2019 as a condition of early termination of the original Lease. As a result of these transactions, a $0.2 million net gain was recognized in the second quarter of 2018. The $0.5 million early termination fee is included in current liabilities in the condensed consolidated balance sheet. The termination of the Lease will reduce the Company’s future operating lease obligation by $1.2 million , offset by a reduction in future payments from the Sublease of $0.4 million . |
Segment Information (Notes)
Segment Information (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segment Information With the acquisition of Bolt Supply in the fourth quarter of 2017, the Company operates in two reportable segments. The businesses were determined to be separate reportable segments because of differences in their financial characteristics and the methods they employ to deliver product to customers. The operating segments are reviewed by the Company’s chief operating decision maker responsible for reviewing operating performance and allocating resources. The Lawson segment primarily relies on its large network of sales representatives to visit the customer at the customers' work location and provide VMI service and produce sales orders for product that is then shipped to the customer. The Bolt Supply segment primarily sells product to customers through its branch locations. Bolt Supply had 13 branches in operation at the end of the third quarter 2018. Financial information for the Company's reportable segments follows: (Dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue Lawson product revenue $ 68,539 $ 75,651 $ 206,108 $ 225,274 Lawson service revenue 10,153 — 29,627 — Total Lawson revenue 78,692 75,651 235,735 225,274 Bolt Supply 9,838 — 27,636 — Consolidated total $ 88,530 $ 75,651 $ 263,371 $ 225,274 Gross profit Lawson product gross profit $ 37,742 $ 46,005 $ 113,291 $ 136,025 Lawson service gross profit 6,710 — 19,380 — Total Lawson gross profit 44,452 46,005 132,671 136,025 Bolt Supply 3,656 — 10,786 — Consolidated total $ 48,108 $ 46,005 $ 143,457 $ 136,025 Operating income (loss) Lawson $ (2,955 ) $ 1,090 $ 3,062 $ 9,693 Bolt Supply 689 — 2,063 — Consolidated total (2,266 ) 1,090 5,125 9,693 Interest expense (251 ) (133 ) (755 ) (393 ) Other income (expense), net 170 843 (320 ) 953 Income (loss) before income taxes $ (2,347 ) $ 1,800 $ 4,050 $ 10,253 |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events On October 1, 2018, the Company completed the purchase of Screw Products, Inc., an industrial parts distributor for approximately $5.2 million which was paid in cash at the time of closing. Screw Products has a location in Dallas, Texas and a location in Dayton, Ohio. |
Revenue Recognition Revenue R_2
Revenue Recognition Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |
Schedule of Disaggregation of Revenue | Nine Months Ended September 30, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect Product revenue $ 233,744 $ 29,609 $ 263,353 Service revenue 29,627 (29,627 ) — Total revenue $ 263,371 $ (18 ) $ 263,353 Product cost of goods sold $ 109,667 $ — $ 109,667 Service costs 10,247 (10,247 ) — Total cost of goods sold $ 119,914 $ (10,247 ) $ 109,667 Gross profit 143,457 10,229 153,686 Gross profit percentage 54.5 % 58.4 % Selling expenses 66,119 10,092 76,211 General and administrative expenses 72,213 — 72,213 Operating expenses 138,332 10,092 148,424 Operating income as reported was $5.13 million whereas pro forma operating income as if previous accounting guidance was in effect would have been $5.26 million . The following table presents the impact of ASC 606 on Condensed Consolidated Statements of Operations (Unaudited): Three Months Ended September 30, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect Product revenue $ 78,377 $ 10,207 $ 88,584 Service revenue 10,153 (10,153 ) — Total revenue $ 88,530 $ 54 $ 88,584 Product cost of goods sold $ 36,979 $ — $ 36,979 Service costs 3,443 (3,443 ) — Total cost of goods sold $ 40,422 $ (3,443 ) $ 36,979 Gross profit 48,108 3,497 51,605 Gross profit percentage 54.3 % 58.3 % Selling expenses 22,175 3,468 25,643 General and administrative expenses 28,199 — 28,199 Operating expenses 50,374 3,468 53,842 Operating loss as reported was $2.27 million whereas pro forma operating loss as if previous accounting guidance was in effect would have been $2.24 million . |
Revenue Recognition Geographica
Revenue Recognition Geographical (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Geographical [Abstract] | |
Revenue from External Customers by Geographic Areas [Table Text Block] | Disaggregated revenue by geographic area follows: Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 United States $ 70,652 $ 67,575 $ 210,596 $ 202,176 Canada 17,878 8,076 52,775 23,098 Consolidated total $ 88,530 $ 75,651 $ 263,371 $ 225,274 |
Revenue Recognition Product Ver
Revenue Recognition Product Vertical (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Product Vertical [Abstract] | |
Schedule of Product Information [Table Text Block] | Disaggregated revenue by product type follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Fastening Systems 24.6 % 20.4 % 24.5 % 20.6 % Fluid Power 14.6 % 16.3 % 14.7 % 15.7 % Specialty Chemicals 12.6 % 14.5 % 12.3 % 14.3 % Cutting Tools and Abrasives 13.7 % 14.2 % 13.5 % 14.3 % Electrical 10.6 % 11.7 % 10.9 % 11.9 % Aftermarket Automotive Supplies 7.6 % 8.4 % 8.0 % 8.8 % Safety 4.6 % 4.2 % 4.6 % 4.2 % Welding and Metal Repair 1.7 % 2.2 % 1.9 % 2.2 % Other 10.0 % 8.1 % 9.6 % 8.0 % Consolidated Total 100.0 % 100.0 % 100.0 % 100.0 % |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of inventories | Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Inventories, gross $ 56,602 $ 56,492 Reserve for obsolete and excess inventory (5,448 ) (5,564 ) Inventories, net $ 51,154 $ 50,928 |
Acquisitions Acquisitions (Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition Pro Forma Information | The following table contains unaudited pro forma revenue and net income (loss) for Lawson Products assuming the Bolt Supply acquisition closed on January 1, 2016. (Dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue Actual $ 88,530 $ 75,651 $ 263,371 $ 225,274 Pro forma 88,530 85,156 263,371 250,781 Net income (loss) Actual $ (816 ) $ 1,321 $ 3,614 $ 9,451 Pro forma (816 ) 1,534 3,614 10,175 The pro forma disclosures in the table above include adjustments for, amortization of intangible assets and acquisition costs to reflect results as if the acquisition of Bolt Supply had closed on January 1, 2016 rather than on the actual acquisition date. 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 (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Goodwill activity for the first nine months of 2018 and 2017 is included in the table below: (Dollars in thousands) Nine Months Ended September 30, 2018 2017 Beginning balance $ 19,614 $ 5,520 Adjustment to original acquisition allocation (17 ) (73 ) Impact of foreign exchange (483 ) 342 Ending balance $ 19,114 $ 5,789 |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Intangible Assets [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 7,994 $ (1,341 ) $ 6,653 $ 8,182 $ (957 ) $ 7,225 Customer relationships 4,785 (537 ) 4,248 4,911 (323 ) 4,588 $ 12,779 $ (1,878 ) $ 10,901 $ 13,093 $ (1,280 ) $ 11,813 |
Loan Agreement (Tables)
Loan Agreement (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 , 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 3.60 : 1.00 Commitment Letter Bolt Supply has a Commitment Letter with BMO Bank of Montreal ("BMO") dated March 30, 2017 which allows Bolt Supply to access up to $5.5 million Canadian dollars in the form of either an overdraft facility or as commercial letters of credit. The Commitment Letter is cancellable at any time at BMOs sole discretion and is secured by substantially all of Bolt Supply’s assets. It carries an interest rate of the bank's prime rate plus 0.25% . At September 30, 2018 , Bolt Supply had $2.0 million Canadian dollars of outstanding borrowings and remaining borrowing availability of $3.5 million Canadian dollars. The Commitment Letter is subject to a working capital ratio of 1.35 :1, a maximum ratio of debt to tangible net worth of 2.5 :1 of the Bolt Supply assets and Debt Service Coverage Ratio 1.25 :1 as defined in the Commitment Letter. At September 30, 2018 , Bolt Supply was in compliance with all covenants which are subject to periodic review, at least annually, with the next review due by August 31, 2019. |
Reserve for Severance (Tables)
Reserve for Severance (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Severance Reserve [Abstract] | |
Changes in the Company's reserve for severance and related payments | Changes in the Company’s reserve for severance as of September 30, 2018 and 2017 were as follows: (Dollars in thousands) Nine Months Ended September 30, 2018 2017 Balance at beginning of period $ 483 $ 1,710 Charged to earnings 723 595 Payments (787 ) (1,625 ) Balance at end of period $ 419 $ 680 |
Segment Information Segment Rep
Segment Information Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Financial information for the Company's reportable segments follows: (Dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue Lawson product revenue $ 68,539 $ 75,651 $ 206,108 $ 225,274 Lawson service revenue 10,153 — 29,627 — Total Lawson revenue 78,692 75,651 235,735 225,274 Bolt Supply 9,838 — 27,636 — Consolidated total $ 88,530 $ 75,651 $ 263,371 $ 225,274 Gross profit Lawson product gross profit $ 37,742 $ 46,005 $ 113,291 $ 136,025 Lawson service gross profit 6,710 — 19,380 — Total Lawson gross profit 44,452 46,005 132,671 136,025 Bolt Supply 3,656 — 10,786 — Consolidated total $ 48,108 $ 46,005 $ 143,457 $ 136,025 Operating income (loss) Lawson $ (2,955 ) $ 1,090 $ 3,062 $ 9,693 Bolt Supply 689 — 2,063 — Consolidated total (2,266 ) 1,090 5,125 9,693 Interest expense (251 ) (133 ) (755 ) (393 ) Other income (expense), net 170 843 (320 ) 953 Income (loss) before income taxes $ (2,347 ) $ 1,800 $ 4,050 $ 10,253 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018shares | Sep. 30, 2017shares | Sep. 30, 2018Segmentshares | Sep. 30, 2017shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of Reportable Segments | Segment | 2 | |||
New Credit Facility Inventory Base Selling Period | 18 months | |||
Stock Compensation Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive Options Outstanding | shares | 403,000 | 80,000 | 46,000 | 67,000 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Decrease to retained earnings | $ (74,738) | $ (74,738) | $ (71,453) | |||
Deferred revenue | 700 | 700 | ||||
Deferred expense | 300 | 300 | $ 400 | |||
Operating expenses | (50,374) | $ (44,915) | (138,332) | $ (126,332) | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Decrease to retained earnings | 300 | |||||
Deferred revenue | $ 700 | |||||
Operating expenses | $ (3,468) | $ (10,092) |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Disaggregation of Revenue [Table Text Block] | Nine Months Ended September 30, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect Product revenue $ 233,744 $ 29,609 $ 263,353 Service revenue 29,627 (29,627 ) — Total revenue $ 263,371 $ (18 ) $ 263,353 Product cost of goods sold $ 109,667 $ — $ 109,667 Service costs 10,247 (10,247 ) — Total cost of goods sold $ 119,914 $ (10,247 ) $ 109,667 Gross profit 143,457 10,229 153,686 Gross profit percentage 54.5 % 58.4 % Selling expenses 66,119 10,092 76,211 General and administrative expenses 72,213 — 72,213 Operating expenses 138,332 10,092 148,424 Operating income as reported was $5.13 million whereas pro forma operating income as if previous accounting guidance was in effect would have been $5.26 million . The following table presents the impact of ASC 606 on Condensed Consolidated Statements of Operations (Unaudited): Three Months Ended September 30, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect Product revenue $ 78,377 $ 10,207 $ 88,584 Service revenue 10,153 (10,153 ) — Total revenue $ 88,530 $ 54 $ 88,584 Product cost of goods sold $ 36,979 $ — $ 36,979 Service costs 3,443 (3,443 ) — Total cost of goods sold $ 40,422 $ (3,443 ) $ 36,979 Gross profit 48,108 3,497 51,605 Gross profit percentage 54.3 % 58.3 % Selling expenses 22,175 3,468 25,643 General and administrative expenses 28,199 — 28,199 Operating expenses 50,374 3,468 53,842 Operating loss as reported was $2.27 million whereas pro forma operating loss as if previous accounting guidance was in effect would have been $2.24 million . | |||
Product revenue | $ 78,377 | $ 75,651 | $ 233,744 | $ 225,274 |
Service revenue | 10,153 | 0 | 29,627 | |
Total revenue | 88,530 | 75,651 | 263,371 | 225,274 |
Product cost of goods sold | 36,979 | 29,646 | 109,667 | 89,249 |
Service costs | 3,443 | 0 | 10,247 | 0 |
Cost of goods sold | 40,422 | 119,914 | ||
Gross profit | $ 48,108 | 46,005 | $ 143,457 | 136,025 |
Gross profit percentage | 54.30% | 54.50% | ||
Selling expenses | $ 22,175 | 24,354 | $ 66,119 | 72,964 |
General and administrative expenses | 28,199 | 20,561 | 72,213 | 58,790 |
Gain on sale of property | 50,374 | 44,915 | 138,332 | 126,332 |
Operating income (loss) | (2,266) | 1,090 | 5,125 | 9,693 |
Pro forma operating income | (2,240) | 5,260 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Disaggregation of Revenue [Line Items] | ||||
Product revenue | 88,584 | 263,353 | ||
Service revenue | 0 | 0 | ||
Total revenue | 88,584 | 263,353 | ||
Product cost of goods sold | 36,979 | 109,667 | ||
Service costs | 0 | 0 | ||
Cost of goods sold | 36,979 | 109,667 | ||
Gross profit | $ 51,605 | $ 153,686 | ||
Gross profit percentage | 58.30% | 58.40% | ||
Selling expenses | $ 25,643 | $ 76,211 | ||
General and administrative expenses | 28,199 | 72,213 | ||
Gain on sale of property | 53,842 | 148,424 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Disaggregation of Revenue [Line Items] | ||||
Product revenue | 10,207 | 29,609 | ||
Service revenue | (10,153) | (29,627) | ||
Total revenue | 54 | (18) | ||
Product cost of goods sold | 0 | 0 | ||
Service costs | (3,443) | (10,247) | ||
Cost of goods sold | (3,443) | (10,247) | ||
Gross profit | 3,497 | 10,229 | ||
Selling expenses | 3,468 | 10,092 | ||
General and administrative expenses | 0 | 0 | ||
Gain on sale of property | 3,468 | 10,092 | ||
UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 70,652 | 67,575 | 210,596 | 202,176 |
CANADA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 17,878 | $ 8,076 | $ 52,775 | $ 23,098 |
Revenue Recognition Product V_2
Revenue Recognition Product Vertcal (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Product Revenue [Abstract] | ||||
Fastening Systems | 24.60% | 20.40% | 24.50% | 20.60% |
Fluid Power | 14.60% | 16.30% | 14.70% | 15.70% |
Specialty Chemicals | 12.60% | 14.50% | 12.30% | 14.30% |
Cutting Tools and Abrasives | 13.70% | 14.20% | 13.50% | 14.30% |
Electrical | 10.60% | 11.70% | 10.90% | 11.90% |
Aftermarket Automotive Supplies | 7.60% | 8.40% | 8.00% | 8.80% |
Safety | 4.60% | 4.20% | 4.60% | 4.20% |
Welding and Metal Repair | 1.70% | 2.20% | 1.90% | 2.20% |
Other Products | 10.00% | 8.10% | 9.60% | 8.00% |
Total Products | 100.00% | 100.00% | 100.00% | 100.00% |
Restricted Cash Restricted Ca_2
Restricted Cash Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Restricted Cash [Abstract] | ||
Restricted cash | $ 800 | $ 800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Components of inventories | ||
Inventory, Gross | $ 56,602 | $ 56,492 |
Inventory Valuation Reserves | (5,448) | (5,564) |
Inventories, net | $ 51,154 | $ 50,928 |
Acquisitions Acquisition Detail
Acquisitions Acquisition Detail (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Gross | $ 157 | $ 0 | ||||
Goodwill | $ 19,114 | $ 5,789 | $ 19,614 | $ 5,520 | ||
Bolt [Member] [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Gross | $ 32,300 | $ 5,200 | ||||
Goodwill | 14,000 | |||||
Trade Names [Member] | Bolt [Member] [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 7,200 | |||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||||
Customer Relationships [Member] | Bolt [Member] [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 4,200 | |||||
Finite-Lived Intangible Asset, Useful Life | 12 years |
Acquisitions Pro Forma Informat
Acquisitions Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||||
Total revenue | $ 88,530 | $ 75,651 | $ 263,371 | $ 225,274 |
Net Sales Pro Forma | 88,530 | 85,156 | 263,371 | 250,781 |
Net Income Actual | (816) | 1,321 | 3,614 | 9,451 |
Net income Pro Forma | $ (816) | $ 1,534 | $ 3,614 | $ 10,175 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 19,614 | $ 5,520 |
Adjustment to original acquisition allocation | (17) | (73) |
Impact of foreign exchange | (483) | 342 |
Ending balance | $ 19,114 | $ 5,789 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 700 | $ 200 | |
Finite-Lived Intangible Assets, Gross | 12,779 | $ 13,093 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,878) | (1,280) | |
Finite-Lived Intangible Assets, Net | 10,901 | 11,813 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 7,994 | 8,182 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,341) | (957) | |
Finite-Lived Intangible Assets, Net | 6,653 | 7,225 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 4,785 | 4,911 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (537) | (323) | |
Finite-Lived Intangible Assets, Net | $ 4,248 | $ 4,588 |
Loan Agreement Covenant (Detail
Loan Agreement Covenant (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Loan Agreement [Line Items] | |
Minimum Debt Service Coverage Ratio | 1.25 |
Maximum [Member] | Actual Value [Member] | |
Loan Agreement [Line Items] | |
Minimum Debt Service Coverage Ratio | 3.10 |
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) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Loan Agreement [Line Items] | |||
Excess cash capacity | $ 10,000 | ||
Credit Facility (Textual) [Abstract] | |||
Proceeds from (Repayments of) Lines of Credit | $ (4,625) | $ (841) | |
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 | 9,918 | $ 14,543 | |
Line of Credit Facility, Remaining Borrowing Capacity | 27,000 | ||
Interest Paid | $ 800 | $ 400 | |
Weighted average interest rate | 3.82% | 3.91% | |
Bank Overdrafts | $ 5,500 | ||
Working Capital Ratio | 1.35 | ||
Ratio of Indebtedness to Net Capital | 2.5 | ||
Minimum Debt Service Coverage Ratio | 1.25 | ||
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 | ||
Bolt [Member] [Member] | |||
Credit Facility (Textual) [Abstract] | |||
Line of Credit Facility, Remaining Borrowing Capacity | 3,500 | ||
Secured Debt, Current | 2,000 | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | |||
Credit Facility (Textual) [Abstract] | |||
Long-term Debt | $ 8,400 | ||
Prime Rate [Member] | |||
Credit Facility (Textual) [Abstract] | |||
Spread on LIBOR | 0.25% |
Reserve for Severance Activity
Reserve for Severance Activity in reserve (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Reserve for severance and related payments | ||
Balance at beginning of period | $ 483 | $ 1,710 |
Charged to earnings | 723 | 595 |
Cash paid | (787) | (1,625) |
Balance at end of the period | $ 419 | $ 680 |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation Details (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-Based Compensation Details | ||
Employee Benefits and Share-based Compensation | $ 8,694 | $ 2,722 |
Minimum [Member] | ||
Stock-Based Compensation Details | ||
Equity Share Payout Range | 0 | |
Maximum [Member] | ||
Stock-Based Compensation Details | ||
Equity Share Payout Range | 48,291 | |
Share-based Compensation Award, Tranche Two [Member] | ||
Stock-Based Compensation Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 44,737 | |
Share Based Compensation Non Option Equity Instruments Granted Weighted Average Exercise Price | $ 24.70 |
Stock-Based Compensation Restri
Stock-Based Compensation Restricted Stock Awards (Details) | Sep. 30, 2018shares |
Director Grant [Domain] | |
Stock-Based Compensation Details | |
Restricted Stock Awards Outstanding | 26,080 |
Director [Member] | |
Stock-Based Compensation Details | |
Restricted Stock Awards Outstanding | 20,059 |
Stock-Based Compensation Market
Stock-Based Compensation Market Stock Units (Details) | 9 Months Ended |
Sep. 30, 2018shares | |
Maximum [Member] | |
Stock-Based Compensation Details | |
Equity Share Payout Range | 48,291 |
MSU [Member] | |
Stock-Based Compensation Details | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 32,194 |
Stock-Based Compensation Anti D
Stock-Based Compensation Anti Dilutive Options (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Compensation Plan [Member] | ||||
Stock-Based Compensation Details | ||||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 403,000 | 80,000 | 46,000 | 67,000 |
Income Tax Income Tax (Details)
Income Tax Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax [Abstract] | |||||
Increase (Decrease) in Deferred Income Taxes | $ (830) | $ 0 | |||
Income Tax Expense (Benefit) | $ (1,531) | $ 479 | $ 436 | $ 802 | |
Effective income tax rate | 10.80% | ||||
Undistributed Earnings of Foreign Subsidiaries | $ 8,400 | ||||
Effective Income Tax Rate Reconciliation, Percent | 33.50% |
Contingent Liability Continge_2
Contingent Liability Contingent Liability (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||
Environmental Exit Costs, Reasonably Possible Additional Losses, Low Estimate | $ 1.4 | |
Environmental Exit Costs, Liability for Remediation | 1.4 | $ 1 |
Environmental Remediation Expense | 0.5 | |
Minimum [Member] | ||
Loss Contingencies [Line Items] | ||
Environmental Exit Costs, Anticipated Cost | 0.9 | |
Maximum [Member] | ||
Loss Contingencies [Line Items] | ||
Environmental Exit Costs, Anticipated Cost | $ 2 |
Lease termination (Details)
Lease termination (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)ft² | |
Lease termination [Abstract] | |
Operating Leases, Income Statement, Sublease Revenue | $ 1 |
Area of Real Estate Property | ft² | 17,100 |
Gain (Loss) on Contract Termination | $ 1 |
Gain (Loss) on Termination of Lease | 0.2 |
Operating Leases, Future Minimum Payments Due | 1.2 |
Operating Leases, Future Minimum Payments Receivable, Current | $ 0.4 |
Segment Information Segment R_2
Segment Information Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Segment | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||
Sales Revenue, Goods, Net | $ 78,377 | $ 75,651 | $ 233,744 | $ 225,274 | |
Sales Revenue, Services, Net | 10,153 | 0 | $ 29,627 | ||
Number of Reportable Segments | Segment | 2 | ||||
Total revenue | 88,530 | 75,651 | $ 263,371 | 225,274 | |
Gross Profit | 48,108 | 46,005 | 143,457 | 136,025 | |
Operating Income (Loss) | (2,266) | 1,090 | 5,125 | 9,693 | |
Interest Expense | 251 | 133 | 755 | 393 | |
Other Nonoperating Income (Expense) | 170 | 843 | (320) | 953 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | (2,347) | 1,800 | 4,050 | 10,253 | |
Lawson [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales Revenue, Goods, Net | 68,539 | 206,108 | 225,274 | ||
Sales Revenue, Services, Net | 10,153 | 0 | 29,627 | 0 | |
Total revenue | 78,692 | 75,651 | 235,735 | 225,274 | |
Gross Profit, Product | 37,742 | 46,005 | 113,291 | $ 136,025 | |
Gross Profit, Services | 6,710 | 0 | 19,380 | 0 | |
Gross Profit | 44,452 | 46,005 | 132,671 | 136,025 | |
Operating Income (Loss) | (2,955) | 3,062 | 9,693 | ||
Bolt [Member] [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 9,838 | 0 | 27,636 | 0 | |
Gross Profit | 3,656 | 0 | 10,786 | 0 | |
Operating Income (Loss) | $ 689 | $ 0 | $ 2,063 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Oct. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Subsequent Event [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 157 | $ 0 | ||
Bolt [Member] [Member] | ||||
Subsequent Event [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 32,300 | $ 5,200 |