Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | LAWSON PRODUCTS INC/NEW/DE/ | ||
Entity Central Index Key | 703,604 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 116,844,000 | ||
Entity Common Stock, Shares Outstanding | 8,962,450 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 11,883 | $ 4,416 |
Restricted cash | 800 | 800 |
Accounts receivable, less allowance for doubtful accounts of $549 and $476, respectively | 37,682 | 38,575 |
Inventories | 52,887 | 50,928 |
Miscellaneous receivables and prepaid expenses | 3,653 | 3,728 |
Total current assets | 106,905 | 98,447 |
Property, plant and equipment, less accumulated depreciation and amortization | 23,548 | 27,333 |
Deferred income taxes | 20,592 | 21,692 |
Goodwill | 20,079 | 19,614 |
Cash value of life insurance | 12,599 | 11,964 |
Intangible Assets, net | 13,112 | 11,813 |
Other assets | 307 | 248 |
Total assets | 197,142 | 191,111 |
Current liabilities: | ||
Revolving line of credit | 10,823 | 14,543 |
Accounts payable | 15,207 | 12,394 |
Accrued expenses and other liabilities | 40,179 | 33,040 |
Total current liabilities | 66,209 | 59,977 |
Security bonus plan | 12,413 | 12,981 |
Financing lease obligation | 5,213 | 6,420 |
Deferred compensation | 5,304 | 5,476 |
Deferred rent liability | 1,963 | 3,512 |
Deferred Tax Liabilities, Net, Noncurrent | 2,761 | 3,559 |
Other liabilities | 4,106 | 5,696 |
Total liabilities | 97,969 | 97,621 |
Stockholders' equity: | ||
Authorized - 500,000 shares, Issued and outstanding - None | 0 | 0 |
Authorized - 35,000,000 shares Issued – 9,005,716 and 8,921,302 shares, respectively Outstanding – 8,955,930 and 8,888,028 shares, respectively | 9,006 | 8,921 |
Capital in excess of par value | 15,623 | 13,005 |
Retained earnings | 77,338 | 71,453 |
Treasury stock – 49,786 and 33,274 shares held, respectively | (1,234) | (711) |
Accumulated other comprehensive income | (1,560) | 822 |
Total stockholders’ equity | 99,173 | 93,490 |
Total liabilities and stockholders’ equity | $ 197,142 | $ 191,111 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 549 | $ 476 |
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 | 9,005,716 | 8,921,302 |
Common stock, shares outstanding | 8,955,930 | 8,888,028 |
Treasury Stock, Shares | 49,786 | 33,274 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Sales Revenue, Goods, Net | $ 310,204 | $ 305,907 |
Sales Revenue, Services, Net | 39,433 | 0 |
Net sales | 349,637 | 305,907 |
Cost of goods sold | 145,493 | 122,889 |
Cost of Services | 14,604 | 0 |
Gross profit | 189,540 | 183,018 |
Operating expenses: | ||
Selling Expense | 87,642 | 98,025 |
General and Administrative Expense | 92,688 | 80,479 |
Selling, general and administrative expenses | 180,330 | 178,504 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | 0 | (5,422) |
Operating expenses | 180,330 | 173,082 |
Operating income | 9,210 | 9,936 |
Interest expense | (1,009) | (622) |
Other income (expenses), net | (1,338) | 780 |
Income before income taxes | (6,863) | (10,094) |
Income tax (benefit) expense | 649 | (19,594) |
Net income | $ 6,214 | $ 29,688 |
Earnings Per Share, Basic | $ 0.70 | $ 3.35 |
Diluted income per share of common stock | $ 0.67 | $ 3.25 |
Basic weighted average shares outstanding | 8,909 | 8,864 |
Effect of dilutive securities outstanding | 364 | 267 |
Diluted weighted average shares outstanding | 9,273 | 9,131 |
Comprehensive income (loss) | ||
Net income | $ 6,214 | $ 29,688 |
Other comprehensive loss, net of tax: | ||
Adjustment for foreign currency translation | (2,382) | 861 |
Comprehensive income | $ 3,832 | $ 30,549 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock, $1 par value | Capital in Excess of Par Value | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Common Stock, Shares, Outstanding | 8,833,000 | |||||
Deferred Tax Expense from Stock Options Exercised | $ 200,000 | |||||
Balance at beginning of year at Dec. 31, 2016 | 61,133,000 | $ 8,865,000 | $ 11,055,000 | $ 41,943,000 | $ (691,000) | $ (39,000) |
Net income (loss) | 29,688,000 | |||||
Adjustment for foreign currency translation | 861,000 | |||||
Stock based compensation | $ 2,006,000 | 2,006,000 | ||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 56,000 | |||||
Shares issued | 56,000 | (56,000) | ||||
Treasury Stock, Shares, Acquired | (968) | |||||
Share repurchase | $ (20,000) | (20,000) | ||||
Balance at end of year at Dec. 31, 2017 | $ 93,490,000 | 8,921,000 | 13,005,000 | 71,453,000 | (711,000) | 822,000 |
Common Stock, Shares, Outstanding | 8,888,028 | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (178,000) | |||||
Net income (loss) | 6,214,000 | |||||
Adjustment for foreign currency translation | (2,382,000) | |||||
Stock based compensation | $ 2,703,000 | 2,703,000 | ||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 84,000 | |||||
Shares issued | 85,000 | (85,000) | ||||
Treasury Stock, Shares, Acquired | (16,512) | |||||
Share repurchase | $ (523,000) | (523,000) | ||||
Balance at end of year at Dec. 31, 2018 | $ 99,173,000 | $ 9,006,000 | $ 15,623,000 | 77,338,000 | $ (1,234,000) | $ (1,560,000) |
Common Stock, Shares, Outstanding | 8,955,930 | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (329,000) | $ (329,000) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, par value | $ 1 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | ||
Net Income | $ 6,214,000 | $ 29,688,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | (6,855,000) | (6,770,000) |
Stock based compensation | (7,508,000) | (3,106,000) |
Loss (gain) on disposal of property and equipment | 0 | (5,422,000) |
Increase (Decrease) in Deferred Income Taxes | 545,000 | (21,229,000) |
Environmental Remediation Expense | 500,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (193,000) | (5,275,000) |
Inventories | (2,915,000) | (1,713,000) |
Prepaid expenses and other assets | (1,501,000) | (1,226,000) |
Accounts payable and other liabilities | (2,851,000) | (1,980,000) |
Other | 935,000 | 525,000 |
Net cash provided by operating activities | 20,299,000 | 7,204,000 |
Investing activities: | ||
Purchases of property, plant and equipment | (2,524,000) | (1,256,000) |
Payments to Acquire Businesses, Gross | (5,307,000) | (32,286,000) |
Proceeds from sale of property | 0 | 6,177,000 |
Net cash used in investing activities | (7,831,000) | (27,365,000) |
Financing activities: | ||
Net borrowings on revolving line of credit | (3,720,000) | 13,595,000 |
Finance Lease, Principal Payments | (185,000) | (134,000) |
Proceeds from Stock Options Exercised | 14,000 | 20,000 |
Payments for Repurchase of Common Stock | (523,000) | (20,000) |
Payments of Merger Related Costs, Financing Activities | (76,000) | (80,000) |
Net cash (used in) provided by financing activities | (4,490,000) | 13,381,000 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash: | ||
Effect of Exchange Rate on Cash and Cash Equivalents | (511,000) | 775,000 |
Increase (decrease) in cash and cash equivalents | 7,467,000 | (6,005,000) |
Cash and cash equivalents at end of year | 11,883,000 | 4,416,000 |
Restricted Cash and Cash Equivalents, Current | 800,000 | 800,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 12,683,000 | $ 5,216,000 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Lawson Products, Inc. (“Lawson” or the “Company”) is a North American distributor of products and services to the industrial, commercial, institutional and government maintenance, repair and operations (“MRO”) marketplace. The Company has two operating segments. The Lawson operating segment distributes 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. In October 2017 the Company acquired The Bolt Supply House, Ltd. ("Bolt"), an MRO distributor located in western Canada. The Bolt operating segment distributes MRO products primarily through its 14 branches located in Western Canada. In October 2018, the Company acquired Screw Products, Inc., a regional distributor of bulk industrial products to manufacturers and job shops. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts and transactions of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Such reclassifications have no effect on net income as previously reported. Revenue Recognition — The Company recognizes two revenue streams: revenues from the sale of product and revenues from the performance of VMI services. The Company offers VMI services only in conjunction with product sales. The Company does not bill product sales and services separately. The total revenue billed is allocated between revenue from product sales and revenue from services for reporting purposes based upon the estimated market value of such services. A portion of selling expenses is allocated to cost of sales for reporting purposes based upon the estimated time spent on such services. Product revenue includes product sales and billings for freight and handling charges. Sales and associated cost of goods sold are generally recognized when products are shipped and title passes to customers. We accrue for returns based on historical evidence of return rates. Service revenue and associated cost of sales are recognized when services are performed. A portion of service revenue and cost of service is deferred, as not all services are performed in the same period as billed. Cash Equivalents — The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount of the Company’s cash equivalents at December 31, 2018 approximates fair value. Allowance for Doubtful Accounts — The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings, substantial down-grading of credit ratings), a specific reserve for bad debts is recorded against amounts due to reduce the receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes reserves for bad debts based on the Company’s historical experience of bad debt write-offs as a percent of accounts receivable outstanding. If circumstances change (e.g., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligations), the estimates of the recoverability of amounts due the Company could be revised by a material amount. Inventories — Inventories principally consist of finished goods stated at the lower of cost or net realizable value using the first-in-first-out method. To reduce the cost basis of inventory to a lower of cost or net realizable value, a reserve is recorded for slow-moving and obsolete inventory based on historical experience and monitoring of current inventory activity. Estimates are used to determine the necessity of recording these reserves based on periodic detailed analysis using both qualitative and quantitative factors. As part of this analysis, the Company considers several factors including the inventories length of time on hand, historical sales, product shelf life, product life cycle, product category and product obsolescence. Property, Plant and Equipment — Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation expense is computed primarily by the straight-line method for its buildings, machinery and equipment, furniture and fixtures and vehicles. The Company estimates useful lives of 20 to 40 years for buildings and improvements and 3 to 10 years for machinery and equipment, furniture and fixtures and vehicles. Amortization of financing and capital leases is included in depreciation expense. Depreciation expense was $4.8 million and $4.7 million for 2018 and 2017 respectively. Capitalized software is amortized over estimated useful lives of 3 to 5 years using the straight-line method. Amortization expense of capitalized software was $1.1 million and $1.6 million for 2018 and 2017 respectively. Cash Value of Life Insurance — The Company has invested funds in life insurance policies on certain current and former employees. The cash surrender value of the policies is invested in various investment instruments and is recorded as an asset on our consolidated balance sheet. The Company records these funds at contractual value. The change in the cash surrender value of the life insurance policies, which is recorded as a component of General and administrative expenses, is the change in the policies' contractual values. Deferred Compensation — The Company’s Executive Deferral Plan (“Deferral Plan”) allows certain executives to defer payment of a portion of their earned compensation. The deferred compensation is recorded in an Account Balance, which is a bookkeeping entry made by the Company to measure the amount due to the participant. The Account Balance is equal to the participant’s deferred compensation, adjusted for increases and/or decreases in the amount that the participant has designated to one or more bookkeeping portfolios that track the performance of certain mutual funds. Lawson adjusts the deferred compensation liability to equal the contractual value of the participants’ Account Balances. These adjustments are the changes in contractual value of the individual plans and are recorded as a component of General and administrative expenses. Stock-Based Compensation — Compensation based on the share value of the Company’s common stock is valued at its fair value at the grant date and the expense is recognized over the vesting period. Fair value is re-measured each reporting period for liability-classified awards that may be redeemable in cash. We account for forfeitures of stock-based compensation in the period which they occur. Goodwill — The Company had $20.1 million and $19.6 million of goodwill in 2018 and 2017 , respectively. Goodwill represents the cost of business acquisitions in excess of the fair value of identifiable net tangible and intangible assets acquired. Goodwill is allocated to the appropriate reporting unit, which are the same as the operating segments as reviewed by the Company’s chief operating decision maker responsible for reviewing operating performance and allocating resources. The Company reviews goodwill for potential impairment annually on December 1 st , or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. The first step in the multi-step process to determine if goodwill has been impaired and to what degree is to review the relevant qualitative factors that could cause the fair value of the reporting unit to decrease below the carrying value of the reporting unit. After reviewing the qualitative factors relevant to the reporting units, including conditions surrounding the industry we operate in compared to when the acquisitions were completed, the financial performance of the reporting units compared to our projected results, and macroeconomic conditions as a whole, we have determined that it is more likely than not that the fair value of the reporting units exceed their carrying value, therefore goodwill has not been impaired and no further steps need to be taken. Intangible Assets — The Company's intangible assets consists of trade names, and customer relationships. Intangible assets are amortized over weighted average 15 and 11 year estimated useful lives for trade names and customer relationships, respectively. Impairment of Long-Lived Assets — The Company reviews its long-lived assets, including property, plant and equipment and definite life intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable. Recoverability is measured by a comparison of the assets' carrying amount to their expected future undiscounted net cash flows. If such assets are considered to be impaired, the impairment to be recognized is measured based on the amount by which the carrying amount of the asset exceeds its fair value. In 2018 the Company determined that a triggering event had occurred when it determined that it would most likely exercise its put option on a building of a previously discontinued operation in Decatur, Alabama. Accordingly, the Company recorded an impairment charge of $0.2 million in 2018 based upon the anticipated proceeds less its carrying value. No additional triggering events or impairments occurred in 2018. Income Taxes — Deferred tax assets or liabilities reflect temporary differences between amounts of assets and liabilities for financial and tax reporting. Such amounts are adjusted, as appropriate, to reflect changes in enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not (i.e. greater than 50% likely) that some or all of the deferred tax assets will not be realized. The determination of the amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income, (3) the impact of tax planning strategies and (4) the ability to carry back deferred tax assets to offset prior taxable income. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding our volume, pricing and costs. Additionally, valuation allowances related to deferred tax assets can be impacted by changes to tax laws. Significant judgment is required in determining income tax provisions as well as deferred tax asset and liability balances, including the estimation of valuation allowances and the evaluation of tax positions. In 2012, due to historical cumulative losses, we had determined it was more likely than not that we would not be able to utilize our deferred tax assets to offset future taxable income. Therefore, substantially all of our deferred tax assets were subject to a tax valuation allowance. In 2017 we had continued to generate pre-tax profits and had utilized some of our net operating loss carryforwards over the previous two years and were in a three year cumulative income position in the U.S. Based on available evidence, including the utilization of $13.0 million of net operating loss carryforwards in 2017, we reached a point of increased confidence in our ability to sustain profit levels and we believed it was more likely than not that we would be able to utilize a substantial amount of our deferred tax assets to offset future taxable income. Therefore, a large portion of our U.S. valuation allowances were released in 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 would subject the Company to foreign withholding taxes and may subject the Company to U.S. federal and state taxes. The Company recognizes the benefit of tax positions when a benefit is more likely than not (i.e., greater than 50% likely) to be sustained on its technical merits. Recognized tax benefits are measured at the largest amount that is more likely than not to be sustained, based on cumulative probability, in final settlement of the position. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. Leases — Leases are categorized as either operating or capital leases at inception. Operating lease costs are recognized on a straight-line basis over the term of the lease. An asset and a corresponding liability for the capital lease obligation are established for the cost of capital leases. The capital lease obligation is amortized over the shorter of the estimated useful life of the asset or the lease term. The Company purchased $0.2 million and $0.3 million of assets financed by capital leases in 2018 and 2017 respectively, in non-cash transactions that were not reflected in the Consolidated Statements of Cash Flows. For build-to-suit financing leases, the Company establishes an asset and liability for the estimated construction costs incurred to the extent that it is involved in the construction of structural improvements or takes construction risk prior to the commencement of the lease. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If a lease does not meet the criteria to qualify for a sale-leaseback transaction, the established asset and liability remain on the Company's consolidated balance sheet. This asset is depreciated over the life of the lease and the liability is reduced by the non-interest portion of the lease payments for costs allocated to the building and on a straight line basis for costs allocated to land. Sub-leases — If the Company is relieved of its primary obligation under the original lease then the original lease is considered to be terminated, otherwise if the Company retains primary obligation under the original lease then the Company continues to account for the original lease and also accounts for the new sub-lease as lessor. At the time the sub-lease is executed, the Company records a gain or loss equal to the difference between the total cash payments to be made for gross rent under the original lease agreement over the life of the sub-lease plus executory costs and total gross rent proceeds expected to be received over the life of the sub-lease. Earnings per Share — Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution from the exercise or conversion of outstanding stock options, market stock units and restricted stock awards into common stock. For the years ended December 31, 2018 and 2017 stock options to purchase 46,067 and 80,000 , respectively of the Company's common stock were excluded from the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common stock. Foreign Currency — The accounts of foreign subsidiaries are measured using the local currency as the functional currency. All balance sheet amounts are translated into U.S. dollars using the exchange rates in effect at the applicable period end. Components of income or loss are translated using the average exchange rate for each reporting period. Gains and losses resulting from changes in the exchange rates from translation of the subsidiary accounts in local currency to U.S. dollars are reported as a component of Accumulated other comprehensive income or loss in the consolidated balance sheets. Gains and losses resulting from the effect of exchange rate changes on transactions denominated in currencies other than the functional currency are included as a component of net income or loss upon settlement of the transaction. Gains and losses resulting from intercompany transactions are included as a component of net income or loss each reporting period unless the transactions are of a long-term-investment nature and settlement is not planned or anticipated in the foreseeable future, in which case the gains and losses are recorded as a component of accumulated other comprehensive income or loss in the consolidated balance sheets. Treasury Stock —The Company repurchased 16,512 and 968 shares of its common stock in 2018 and 2017 , respectively, from employees upon the vesting of restricted stock to offset the income taxes owed by those employees. The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity. The value of the treasury stock repurchased was $523 thousand and $20 thousand in 2018 and 2017 , respectively. Acquisitions — The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions for the purchase price allocation process to value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Use of Estimates — Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported for service revenue, service cost, allowance for doubtful accounts, inventory reserves, goodwill and intangible assets valuation, and income taxes in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. 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. Deferred tax assets related to stock-based compensation were fully reserved and, therefore, there was no net effect on the Company's beginning balance sheet for 2017 and a $0.2 million benefit to the Company's results of operations. 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. Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which is intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses by providing a more robust framework to use in determining when a set of assets and activities is a business. This ASU became effective commencing with our quarter ending March 31, 2018 and did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. This standard eliminates a step from the goodwill impairment test and instead requires an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. We adopted this guidance on January 1, 2017. The adoption of this guidance had no material impact on our financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 (including interim periods within those periods) using a retrospective transition method to each period presented. The Company adopted ASU 2016-18 on January 1, 2018 and it had no material impact on the consolidated financial statements. In November, 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This update simplifies the presentation of deferred income taxes by requiring all entities that present a classified balance sheet to classify all deferred tax assets and liabilities as a noncurrent amount. The objective of this ASU is to reduce the cost and complexity of recording deferred taxes without affecting the usefulness of financial statement information. The pronouncement is effective for public entities in fiscal years beginning after December 15, 2016, including interim periods within those fiscal years and the guidance may be applied on either a prospective or retrospective basis. The Company adopted ASU 2015-07 on a prospective basis in 2017. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. The guidance is to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company adopted ASU 2015-11 on January 1, 2017 and it had no material impact on its financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses, which revises the requirements for how an entity should measure credit losses on financial instruments. The pronouncement is effective for public entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and the new guidance will be applied on a prospective basis. The Company does not believe the adoption of the new standard will have a material impact on its financial statements. 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. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective method. Under this method, a cumulative effect adjustment was 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 were not adjusted to reflect application of the new guidance. Upon the adoption of ASU 2014-09, the Company identified its performance obligations as product sales and performance of VMI services. The Company recognizes revenue generated from the sale of its products when control of the product transfers from the Company to the customer. The Company recognizes revenue generated by the performance of VMI services when these services are performed. Although the Company does not offer VMI services separately from the sale of its products and does not bill VMI services separately, the Company allocates the total revenue between these performance obligations in its financial statements. A portion of total revenue is allocated to service revenue based on the estimated time Lawson MRO sales reps spend providing services to customers utilizing an estimated market rate for the VMI services provided. The Company also breaks out the costs associated with VMI services as a component of total costs of goods sold in its financial statements. The cost of sales associated with VMI services is calculated based upon estimated time spent on these services applied against direct selling expenses. Some VMI services are performed after control of the product has transferred to the customer, which can result in the deferral of a small amount of service revenue and associated cost of sales and selling expenses to the subsequent period. The Company recognized a small amount of deferred revenue and deferred expenses upon transition to ASU 2014-09, with the net effect recognized as an adjustment to beginning retained earnings. The deferred revenue and deferred expenses are remeasured on a quarterly basis with the net effect recognized as a change to the operating results. See Note 3 - Revenue Recognition. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. Subsequently, the FASB has issued additional ASUs which further clarify this guidance. Under the new guidance, at the lease commencement date, a lessee recognizes a right-of-use (“ROU”) asset representing its right to use the underlying asset and a lease liability which is initially measured at the estimated present value of the future lease payments. These amounts represent the estimated economic benefit the Company will receive over the term of the lease. For results of operations purposes, leases are classified as either operating or finance leases. For operating leases, lease expense is recognized on a straight line basis. For finance leases, the lease liability and interest on the lease liability is recognized using the Company's borrowing rate. The amortization of the ROU asset is recognized over the useful life of the asset. The Company will adopt ASU 2016-02 on January 1, 2019 using the modified retrospective method. The Company anticipates that it will elect a package of practical expedients, which includes the decision to not reassess certain direct costs for existing leases at the date of implementation. These direct costs include certain items such as commissions, legal and documentation preparation fees and payments to incentivize existing tenants to terminate its lease. These direct costs will be capitalized for new leases entered into after January 1, 2019. The Company anticipates that, as a practical expedient, it will not separate lease components from non-lease components for certain types of leases. The effect on the Company’s results of operations in subsequent periods is not expected to be significant. The impact of ASU 2016-02 will be non-cash in nature and will not affect the Company’s cash flows. Also, additional quantitative and qualitative presentations and disclosures related to the Company’s leases will be provided upon adoption of the standard. Upon transition to ASU 2016-02, the Company will derecognize and reassess the financing lease for the building associated with the McCook distribution facility. The land associated with the McCook distribution facility, which was previously classified as an operating lease, will be classified as a financing lease. We do not expect the adoption to affect the borrowing agreements of the Company. See Note 4 - Leases . |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [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 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 years 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 the estimated time spent on such activities applied to the expenses directly related to sales representatives that provide 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 December 31, 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 Consolidated Statements of Operations and Comprehensive Income: Year Ended December 31, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect (Unaudited) Product revenue $ 310,204 $ 39,383 $ 349,587 Service revenue 39,433 (39,433 ) — Total revenue 349,637 (50 ) 349,587 Product cost of goods sold 145,493 — 145,493 Service costs 14,604 (14,604 ) — Total cost of goods sold 160,097 (14,604 ) 145,493 Gross profit 189,540 14,554 204,094 Gross profit percentage 54.2 % 58.4 % Selling expenses 87,642 14,498 102,140 General and administrative expenses 92,688 — 92,688 Operating expenses 180,330 14,498 194,828 Operating income as reported was $9.21 million whereas pro forma unaudited operating income as if previous accounting guidance was in effect would have been $9.27 million . Disaggregated revenue by geographic area follows: Unaudited Year Ending December 31, (Dollars in thousands) 2018 2017 United States $ 279,917 $ 266,994 Canada 69,720 38,913 Consolidated total $ 349,637 $ 305,907 Disaggregated revenue by product type follows: Unaudited Year Ending December 31, 2018 2017 Fastening Systems 24 % 21 % Cutting Tools and Abrasives 15 % 14 % Fluid Power 14 % 15 % Specialty Chemicals 12 % 14 % Electrical 11 % 11 % Aftermarket Automotive Supplies 8 % 9 % Safety 5 % 4 % Welding and Metal Repair 2 % 2 % Other 9 % 10 % Consolidated Total 100 % 100 % |
Leases (Notes)
Leases (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Note 4 - Leases In February 2016, the FASB established Topic ASC 842, Leases, by issuing Accounting Standards Update 2016-02. Lawson intends to adopt ASC 842 as of January 1, 2019. The Company leases property used for distribution centers, office space, and Bolt branch locations throughout the U.S. and Canada, along with various equipment located in distribution centers and corporate headquarters. The Company is also a lessor of its Decatur, Alabama property previously used in conjunction with a discontinued operation, and is a sublessor of a portion of its corporate headquarters. We do not expect a significant change in our leasing activities between now and the adoption of ASC 842. The Company expects that the adoption of ASC 842 will have a minimal impact on the operating results of the Company. Upon adoption, the Company will recognize a ROU asset and lease liability for operating leases of approximately $6.8 million and $8.8 million , respectively, as well as reduce a deferred rent liability by approximately $2.0 million . The remaining previously recognized finance lease asset associated with the McCook lease of $4.5 million and the remaining previously recognized finance lease liability of $6.4 million will be derecognized. This will create an increase to beginning retained earnings of approximately $1.9 million . Upon reassessment of the built-to-suit McCook financing lease, a ROU asset and lease liability of approximately $5.3 million will be recorded. Our conclusions are preliminary and subject to change as we finalize our analysis. We will expand our consolidated financial statements disclosure upon adoption of the new standard. The Company will adopt this standard on January 1, 2019 and prior periods will not be recast in transition. |
Acquisitions (Notes)
Acquisitions (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisitions 2018 The Company completed the acquisition of Screw Products, Inc. in October 2018 for approximately $5.2 million . The purchase price was funded with cash on hand and utilization of the Company's existing credit facility. Screw Products, Inc. is a distributor of bulk industrial products to large manufacturers and job shops. The Company allocated $2.6 million of the purchase price to an intangible asset for customer relationships and $0.5 million for intangible asset for trade names. These amounts were determined by a third party valuation firm with estimated useful lives of 10 and 15 years, respectively. The excess of the purchase price over the fair values of the identifiable assets and liabilities was recorded as goodwill and represents the expected future benefit to the Company from the acquisition of Screw Products. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances. Such changes could result in material variances between the Company's future financial results and the amounts presented in the unaudited pro forma information, including variances in the estimated purchase price, fair values recorded and expenses associated with these items. The Company's Lawson operating segment includes revenues of approximately $0.6 million from Screw Products in 2018. 2017 In October, 2017, the Company acquired The Bolt Supply House Ltd., 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 is a leading Canadian distributor of high quality fasteners, power tools and industrial MRO supplies, with 14 branch locations throughout Alberta, Saskatchewan, Manitoba and British Columbia, Canada. The acquisition was made to add to the Company's revenue and earnings and expand distribution coverage in Western Canada. The purchase price of the acquisition was allocated to the fair market value of Bolt'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 customers relationships and their estimated useful lives of 15 and 12 years, respectively. The $14.2 million allocated to goodwill reflects the purchase price less the fair market value of the identifiable net assets. The appropriate fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on various estimates and assumptions. Further operating details related to the operations of Bolt subsequent to the acquisition are included in Note 18 - Segment Information. A summary of the purchase price allocation of the acquisitions is as follows: (Dollars in thousands) December 31, 2018 2017 Cash paid and liabilities assumed Cash paid $ 5,150 $ 32,286 Deferred tax liability — 3,065 Other liabilities 158 2,434 Contingent consideration 65 — $ 5,373 $ 37,785 Fair value of assets acquired Goodwill $ 1,929 $ 14,176 Trade names 470 7,241 Inventory 123 6,315 Customer relationships 2,580 4,186 Accounts receivable 271 3,323 Property, plant and equipment — 1,796 Other assets — 748 $ 5,373 $ 37,785 Additional acquisition expenses of $0.2 million and $0.7 million , were recorded as a component of General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income for 2018 and 2017, respectively. The following table contains unaudited pro forma net sales and net income for Lawson Products assuming the Screw Products acquisition closed on January 1, 2017 and the Bolt acquisition closed on January 1, 2016. (Dollars in thousands) Year Ended December 31, 2018 2017 Net Sales Actual $ 349,637 $ 305,907 Pro forma (unaudited) $ 351,916 $ 334,554 Net income Actual $ 6,214 $ 29,688 Pro forma (unaudited) $ 6,674 $ 31,111 The pro forma disclosures in the table above include adjustments for, amortization of intangible assets, interest expense, tax expenses and the impact of pro forma adjustments and acquisition costs to reflect results that are more representative of the combined results of the transactions as if the Screw Products acquisition closed on January 1, 2017 and the Bolt acquisition closed on January 1, 2016. This pro forma information utilizes certain estimates, is presented for illustrative purposes only and may not be indicative of the results of operation that would have actually occurred. 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 events that may occur after the acquisition, such as anticipated cost savings from operating synergies. |
Restricted Cash Restricted Cash
Restricted Cash Restricted Cash | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Cash [Abstract] | |
Restricted Assets 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 | 12 Months Ended |
Dec. 31, 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) December 31, 2018 2017 Inventories, gross $ 58,215 $ 56,492 Reserve for obsolete and excess inventory (5,328 ) (5,564 ) Inventories, net $ 52,887 $ 50,928 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Components of property, plant and equipment were as follows: (Dollars in thousands) December 31, 2018 2017 Land $ 2,565 $ 2,752 Buildings and improvements 16,858 16,973 Machinery and equipment 23,955 23,277 Capitalized software 21,738 21,947 McCook facility 12,961 12,961 Furniture and fixtures 5,884 5,634 Capital leases 684 806 Vehicles 190 214 Construction in progress 391 375 85,226 84,939 Accumulated depreciation and amortization (61,678 ) (57,606 ) $ 23,548 $ 27,333 In 2017, the Company received net cash proceeds of $6.2 million and recognized a gain of $5.4 million from the sale of its Fairfield, New Jersey distribution center. In 2018, the Company determined that it would most likely exercise its put option on a building of a previously discontinued operation in Decatur, Alabama upon the completion of the environmental remediation as described in Note 15 - Commitments and Contingencies. Accordingly, the Company recognized an impairment charge of $0.2 million in general and administrative expense. The accounting for the lease associated with the property is not expected to change upon the adoption of ASU 2016-02. |
Goodwill (Notes)
Goodwill (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
Goodwill Disclosure [Text Block] | Goodwill Goodwill activity related to acquisitions is included in the table below: (Dollars in thousands) December 31, 2018 2017 Beginning balance $ 19,614 $ 5,520 Acquisition 2,086 14,176 Impact of foreign exchange (1,452 ) (9 ) Adjustment to prior year allocation (1) (169 ) (73 ) Ending balance $ 20,079 $ 19,614 (1) The reduction of $0.2 million in 2018 resulted from an adjustment to the goodwill created by the Bolt acquisition. The reduction of $0.1 million in 2017 resulted from a non-cash adjustment to the estimated purchase price allocation to inventory originally recorded in 2016. Goodwill was tested for impairment in the fourth quarter of 2018 and no adjustment was deemed necessary. |
Intangible assets (Notes)
Intangible assets (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
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) (Dollars in thousands) December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 8,090 $ (1,447 ) $ 6,643 $ 8,182 $ (957 ) $ 7,225 Customer relationships 7,114 (645 ) 6,469 4,911 (323 ) 4,588 $ 15,204 $ (2,092 ) $ 13,112 $ 13,093 $ (1,280 ) $ 11,813 The Company reviews goodwill and intangibles for potential impairment annually on December 1st or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. Amortization expense of $0.9 million and $0.4 million related to intangible assets was recorded in General and administrative expenses for 2018 and 2017 , respectively. The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2019 $ 1,352 2020 1,492 2021 1,600 2022 1,406 2023 1,292 Thereafter 5,970 $ 13,112 The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 8,090 $ (1,447 ) $ 6,643 $ 8,182 $ (957 ) $ 7,225 Customer relationships 7,114 (645 ) 6,469 4,911 (323 ) 4,588 $ 15,204 $ (2,092 ) $ 13,112 $ 13,093 $ (1,280 ) $ 11,813 |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income (loss) from operations before income taxes consisted of the following: (Dollars in thousands) Year Ended December 31, 2018 2017 United States $ 6,839 $ 10,159 Canada 24 (65 ) $ 6,863 $ 10,094 Provision (benefit) for income taxes from operations for the years ended December 31, consisted of the following: (Dollars in thousands) Year Ended December 31, 2018 2017 Current income tax expense (benefit): U.S. federal $ — $ 296 U.S. state 165 129 Canada 257 1,209 Total $ 422 $ 1,634 Deferred income tax expense (benefit): U.S. federal $ 721 $ (17,971 ) U.S. state (464 ) (3,257 ) Canada (30 ) — Total $ 227 $ (21,228 ) Total income tax expense (benefit): U.S. federal $ 721 $ (17,675 ) U.S. state (299 ) (3,128 ) Canada 227 1,209 Total $ 649 $ (19,594 ) The reconciliation between the effective income tax rate and the statutory federal rate for operations was as follows: Year Ended December 31, 2018 2017 Statutory Federal rate 21.0 % 35.0 % Increase (decrease) resulting from: Change in valuation allowance - reversal — (210.5 ) Change in valuation allowance - federal tax rate change — (126.4 ) Change in valuation allowance - current period activity 3.7 (65.7 ) Federal tax rate change — 126.4 Foreign income inclusion (13.9 ) 29.2 Change in uncertain tax positions (1.4 ) 7.7 State and local taxes, net 4.7 4.7 Stock compensation (4.5 ) (1.9 ) Meals & entertainment 2.4 1.4 Alternative Minimum Tax 1.4 3.6 Provision to return differences (9.3 ) (0.7 ) Foreign Currency Loss 2.5 — Other items, net 2.9 3.1 Provision for income taxes 9.5 % (194.1 )% The Company paid income taxes of $1.3 million and $0.3 million in the years ended December 31, 2018 and 2017 , respectively. At December 31, 2018 , the Company had $20.2 million of U.S. federal net operating loss carryforwards which are subject to expiration beginning in 2030 and $20.5 million of various state net operating loss carryforwards which expire at varying dates through 2034 . Primarily due to the cumulative losses that were incurred over several years, management determined in 2012 that it was more likely than not that the company would not be able to utilize its deferred tax assets to offset future taxable income. Valuation allowances ("VA’s") were recorded against virtually all the gross deferred tax assets at that time. At each reporting date since 2012, Lawson management has considered 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. If the company was able to demonstrate that it can consistently generate income 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. In 2017 we had continued to generate pre-tax profits and had utilized some of our net operating loss carryforwards over the previous two years and were in a three year cumulative income position in the U.S. Based on available evidence, including the utilization of $13.0 million of net operating loss carryforwards in 2017, we reached a point of increased confidence in our ability to sustain profit levels and we believed it was more likely than not that we would be able to utilize a substantial amount of our deferred tax assets to offset future taxable income. Therefore, a large portion of our U.S. valuation allowances were released in 2017. Certain valuation allowances mostly pertaining to the deferred tax assets related to our foreign operations will remain. The Company will continue to monitor all positive and negative evidence related to the remaining valuation of deferred tax assets on a quarterly basis. The Tax Cuts and Jobs Act was enacted into law on December 22, 2017. Among its provisions, the law reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018, requiring the Company to re-measure its net U.S. deferred tax assets to reflect the reduction in the tax rate. The impact of the change resulted in a reduction to deferred tax assets of $12.6 million offset by the same decrease in the valuation allowance. The income tax benefit recorded in 2017 of $19.6 million was primarily the result of the valuation allowance reversal of $21.2 million recorded at December 31, 2017. The Tax Cuts and Jobs Act also requires that a U.S. shareholder of a specified foreign corporation ("SFC") to include in gross income, at the end of the SFC’s last tax year beginning before January 1, 2018, the US shareholder’s pro-rata share of certain of the SFC’s undistributed and previously untaxed post-1986 foreign earnings and profits ("E&P"). The U.S. shareholder’s income inclusion is taxed at an effective U.S. federal income tax rate of either 15.5% or 8%. The 15.5% rate applies to the extent that the SFC’s hold cash and certain other assets, and the 8% rate applies to the extent the income inclusion exceeds the foreign cash position. During the fourth quarter of 2017, the Company utilized $8.4 million of net operating losses to offset its E&P. 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. The Company did not accrue any federal income tax on this amount as the company was able to utilize federal net operating losses to offset the income. The Company recently finalized the foreign earnings and profit calculation in conjunction with the finalization of the 2017 federal income tax return when all required necessary information was more readily available. A lower final foreign earnings and profits inclusion of $3.9 million resulted in a tax benefit which has a beneficial impact on the effective tax rate for the year ending December 31, 2018. As a result of acquisitions completed in 2018, 2017, 2016 and 2015, the Company recorded $20.1 million of tax deductible goodwill that may result in a tax benefit in future periods. Deferred income tax assets and liabilities contain the following temporary differences: (Dollars in thousands) December 31, 2018 2017 Deferred tax assets: Net operating loss carryforward $ 9,878 $ 12,120 Compensation and benefits 9,598 7,828 Inventory reserve 1,769 1,689 Capital loss carryforward 1,317 1,326 Accounts receivable reserve 142 130 Other 457 1,155 Total deferred tax assets 23,161 24,248 Deferred tax liabilities: Intangible assets 2,478 3,115 Property, plant and equipment (20 ) 41 Other 303 403 Total deferred liabilities 2,761 3,559 Net deferred tax assets before valuation allowance 20,400 20,689 Valuation allowance (2,569 ) (2,556 ) Net deferred tax assets $ 17,831 $ 18,133 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (Dollars in thousands) December 31, 2018 2017 Balance at beginning of year $ 4,255 $ 3,249 Additions for tax positions of current year 43 865 Additions for tax positions of prior years 85 141 Reductions for tax positions of prior year (771 ) — Balance at end of year $ 3,612 $ 4,255 The recognition of the unrecognized tax benefits would have a favorable effect on the effective tax rate. Due to the uncertainty of both timing and resolution of income tax examinations, the Company is unable to determine whether any amounts included in the December 31, 2018 balance of unrecognized tax benefits represent tax positions that could significantly change during the next twelve months. The unrecognized tax benefits are recorded as a component of Other liabilities in the Consolidated Balance Sheets. Interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. 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 December 31, 2018 , the Company was 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. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: (Dollars in thousands) December 31, 2018 2017 Accrued compensation $ 10,740 $ 9,044 Accrued stock-based compensation (stock performance rights) 13,458 8,712 Accrued and withheld taxes, other than income taxes 1,674 1,136 Environmental remediation accrual 1,376 968 Financing lease obligation 1,207 1,123 Accrued profit sharing 899 894 Deferred revenue 693 — Accrued health benefits 614 657 Accrued severance 304 483 Other 9,214 10,023 $ 40,179 $ 33,040 |
Loan Agreement
Loan Agreement | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Revolving Line of Credit | Loan Agreements Lawson Loan Agreement In 2012, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with CIBC Bank USA, formerly known as The PrivateBank and Trust Company. 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 were revised in December 2013 and in September 2016. 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. Credit available under the Loan Agreement 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 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, as defined in the amended Loan Agreement. The Loan Agreement is secured by a first priority perfected security interest in substantially all existing assets of the Company. Dividends are restricted so as not to exceed $7.0 million annually. At December 31, 2018 , the Company had $9.0 million outstanding balance under its revolving line of credit facility and additional borrowing availability of $27.7 million . The carrying amount of the Company’s debt at December 31, 2018 approximates its fair value. The Company paid interest of $1.0 million and $0.6 million in 2018 and 2017 respectively. The weighted average interest rate was 3.9% in 2018 . The Company had $1.5 million of outstanding letters of credit as of December 31, 2018 . In addition to other customary representations, warranties and covenants, and if the excess capacity is below $10.0 million , the Company is required to meet a minimum trailing twelve month EBITDA to fixed charges ratio, as defined in the amended Loan Agreement. On December 31, 2018 , the Company's borrowing capacity exceeded $10.0 million , therefore, the Company was not subject to these financial covenants. For informational purposes, the results of the financial covenant is provided below: Quarterly Financial Covenants Requirement Actual EBITDA to fixed charges ratio 1.10 : 1.00 3.46 : 1.00 The Company was in compliance with all covenants as of December 31, 2018. Commitment Letter Bolt has a Commitment Letter with BMO Bank of Montreal ("BMO") dated March 30, 2017 which allows Bolt 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’s assets. It carries an interest rate of the bank's prime rate plus 0.25%. At December 31, 2018, Bolt had $2.4 million Canadian dollars of outstanding borrowings and remaining borrowing availability of $3.1 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 assets and Debt Service Coverage Ratio 1.25:1 as defined in the Commitment Letter. At December 31, 2018, Bolt 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 | 12 Months Ended |
Dec. 31, 2017 | |
Severance Reserve [Abstract] | |
Reserve for Severance | Reserve for Severance Severance costs are primarily related to management realignment and reorganization. The table below reflects the activity in the Company’s reserve for severance and related payments. (Dollars in thousands) Year Ended December 31, 2018 2017 Beginning balance $ 483 $ 1,710 Charged to earnings 848 738 Cash paid (972 ) (1,965 ) Ending balance $ 359 $ 483 The majority of remaining severance liabilities outstanding as of December 31, 2018 will be paid by the end of 2019, and are included in accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments Total rental expense for the years ended December 31, 2018 and 2017 amounted to $3.3 million and $2.6 million , respectively. Of the $10.8 million future minimum operating lease commitments outstanding at December 31, 2018 , $4.0 million relates to a lease for the Company's headquarters which expires in March 2023. The lease commitment is partially offset by a portion of the headquarters that has been sub-leased through June 2019 and includes total future minimum lease proceeds of less than $0.1 million . The Company has a financing lease for the McCook Facility which expires in June 2022 and includes future minimum lease payments, related to the building, of $5.1 million . The Company’s future minimum lease commitments, principally for facilities and equipment, as of December 31, 2018 , were as follows: (Dollars in thousands) Year ended December 31, Operating Leases Financing Lease Capital Leases 2019 $ 2,574 $ 1,395 $ 201 2020 2,369 1,444 155 2021 2,349 1,493 91 2022 2,008 760 11 2023 1,130 — — Thereafter 374 — — Total $ 10,804 $ 5,092 $ 458 At December 31, 2018 , the cost and accumulated depreciation of the asset related to the financing lease were $13.0 million and $8.5 million , respectively, and the cost and accumulated amortization of the assets related to capital leases were $0.7 million and $0.3 million , respectively. The Company will adopt ASU 2016-02 on January 1, 2019. See Note 4 - Leases for a further description. 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 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 cancellation 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 2018. The $0.5 million early termination fee is included in current liabilities in the condensed consolidated balance sheet. The termination of the Lease reduced 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 . The accounting for the lease termination will not be impacted by the adoption of ASU 2016-09. Litigation, regulatory and tax matters The Company is involved in legal actions that arise in the ordinary course of business. It is the opinion of management that the resolution of any currently pending litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. Environmental matter 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. In 2017 the Company received estimates from its environmental consulting firm for two remediation solutions based on a chemical injection process. The first solution would consist of chemical injections throughout the entire site to directly eliminate the hazardous substances in the soil and groundwater. The second solution would consist of chemical injections around the perimeter of the site to prevent the migration of the hazardous chemicals off-site. Neither solution would require additional excavation or repairs to be made to the property. Additionally, the estimated required monitoring period would be substantially reduced. The estimated expenditures over an 18 month period under the two injection scenarios ranged from $0.9 million to $2.0 million . In 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 three consecutive measurement periods 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 2018 to bring the total liability to $1.4 million which represents the Company's best estimate of the most likely outcome. The plan was approved by ADEM in the fourth quarter of 2018 and work commenced in the first quarter of 2019. The Company believes the environmental remediation liability of $1.4 million classified as Accrued expenses and other liabilities on the accompanying Consolidated Balance Sheet will be sufficient to cover the cost of the plan. The Company does not expect to capitalize any amounts related to the remediation plan. |
Retirement and Security Bonus P
Retirement and Security Bonus Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Retirement and Security Bonus Plans | Retirement and Security Bonus Plans The Company provides a 401(k) defined contribution plan to allow employees a pre-tax investment vehicle to save for retirement. The Company made contributions to the 401(k) plan of $3.0 million and $3.1 million for the years ended December 31, 2018 and 2017 , respectively. The Company provides a Deferred Profit Savings Plan ("DPSP") for certain Canadian employees and a Registered Retirement Savings Plan ("RRSP") for other Canadian employees. Both are deferred defined contribution retirement investment plans. The Company contributed $0.3 million and $0.3 million in 2018 and 2017, respectively. The Company provides a profit sharing plan for certain sales, office and warehouse employees. The amounts of the Company’s annual contributions are determined annually by the Board of Directors. Expenses incurred for the profit sharing plan were $0.7 million and $0.7 million for the years ended December 31, 2018 and 2017 , respectively. The Company has a security bonus plan which was previously created for the benefit of its independent sales representatives, under the terms of which participants are credited with a percentage of their annual net commissions. The aggregate amounts credited to participants’ accounts vest 25% after five years, and an additional 5% vests each year thereafter upon qualification for the plan. On January 1, 2013, the Company converted all of its U.S. independent sales representatives to employees. The security bonus for those converted employees continue to vest, but their accounts are no longer credited with a percentage of net commissions. For financial reporting purposes, amounts are charged to operations over the vesting period. Expenses incurred for the security bonus plan were $0.6 million and $0.5 million for the years ended December 31, 2018 and 2017 , respectively. The security bonus plan is partially funded by a $5.6 million investment in the cash surrender value in life insurance of certain employees. Of the $12.8 million total liability, $0.4 million is classified as a current liability and the remaining $12.4 million is classified as long-term. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Plans | Stock-Based Compensation Plans Plan Administration The Company's Amended and Restated 2009 Equity Compensation Plan (“Equity Plan”) provides for the grant of nonqualified and incentive stock options, stock awards and stock units to officers and employees of the Company. The Equity Plan also provides for the grant of option rights and restricted stock to non-employee directors. As of December 31, 2018 , the Company had approximately 96,000 shares of common stock still available under the Equity Plan. Non-employee directors are limited to grants of no more than 20,000 shares of common stock in any calendar year and other than non-employee directors are limited to grants of no more than 125,000 shares of common stock in any calendar year. The Equity Plan is administered by the Compensation Committee of the Board of Directors, or its designee, which as administrator of the plan, has the authority to select plan participants, grant awards, and determine the terms and conditions of the awards. The Company also has a Stock Performance Rights Plan (“SPR Plan”) that provides for the issuance of Stock Performance Rights (“SPRs”) that allow non-employee directors, officers and key employees to receive cash awards, subject to certain restrictions, equal to the appreciation of the Company's common stock. The SPR Plan is administered by the Compensation Committee of the Board of Directors. Stock Performance Rights SPRs entitle the recipient to receive a cash payment equal to the excess of the market value of the Company's common stock over the SPR exercise price when the SPRs are surrendered. Expense, equal to the fair market value of the SPR at the date of grant and remeasured each reporting period, is recorded ratably over the vesting period. Compensation expense or benefit is included in General and administrative expense. A majority of the outstanding SPRs have a seven to ten year life and vest over one to three years beginning on the first anniversary of the date of the grant. On December 31, 2018 , the SPRs outstanding were re-measured at fair value using the Black-Scholes valuation model. This model requires the input of subjective assumptions that may have a significant impact on the fair value estimate. The weighted-average estimated value of SPRs outstanding as of December 31, 2018 was $14.96 per SPR using the following assumptions: Expected volatility 36.7% to 42.7% Risk-free rate of return 2.5% to 2.6% Expected term (in years) 0.1 to 4.5 Expected annual dividend $0 The expected volatility was based on the historic volatility of the Company's stock price commensurate with the expected life of the SPR. The risk-free rate of return reflects the interest rate offered for zero coupon treasury bonds over the expected life of the SPR. The expected life represents the period of time that options granted are expected to be outstanding and was calculated using the simplified method allowed by the SEC. The estimated annual dividend was based on the recent dividend payout trend. Compensation expense of $4.8 million and $1.2 million was recorded for the years ended December 31, 2018 and 2017 , respectively. Cash in the amount of $0.1 million and $0.3 million and was paid out for SPR exercises in 2018 and 2017 , respectively. A liability of $13.5 million reflecting the estimated fair value of future pay-outs has been included as a component of Accrued expenses and other liabilities on the consolidated balance sheets. Activity related to the Company’s SPRs during the year ended December 31, 2018 was as follows: Number of SPRs Weighted Average Exercise Price Outstanding on December 31, 2017 961,554 $ 19.76 Granted 44,737 24.70 Exercised (13,270 ) 22.16 Cancelled (34,500 ) 25.52 Outstanding on December 31, 2018 958,521 19.75 Exercisable on December 31, 2018 848,503 $ 19.11 The SPRs outstanding had an intrinsic value of $11.5 million as of December 31, 2018 . Unrecognized compensation cost related to non-vested SPRs was $0.8 million at December 31, 2018 , which will be recognized over a weighted average period of 1.6 years. During the year ended December 31, 2018 , 193,835 SPRs with a fair value of $2.0 million vested. At December 31, 2018 , the weighted average remaining contractual term was 3.6 years for all outstanding SPRs and 3.3 years for all exercisable SPRs. Restricted Stock Awards Restricted stock awards ("RSAs") generally vest over a one to three year period beginning on the first anniversary of the date of the grant. Upon vesting, the vested restricted stock awards are exchanged for an equal number of the Company’s common stock. The participants have no voting or dividend rights with the restricted stock awards. The restricted stock awards are valued at the closing price of the common stock on the date of grant and the expense is recorded ratably over the vesting period. Compensation expense of $1.4 million and $0.9 million related to the RSAs was recorded in General and administrative expenses for 2018 and 2017 , respectively. Activity related to the Company’s RSAs during the year ended December 31, 2018 was as follows: Restricted Stock Awards Outstanding on December 31, 2017 104,920 Granted 82,722 Canceled (31,776 ) Exchanged for shares (36,610 ) Outstanding on December 31, 2018 119,256 As of December 31, 2018 , there was $1.5 million of total unrecognized compensation cost related to RSAs that will be recognized over a weighted average period of 1.3 years . The awards granted in 2018 had a weighted average grant date fair value of $24.33 per share. Market Stock Units Market Stock Units ("MSUs") are exchangeable for between 0% to 150% of the Company's common shares at the end of the vesting period based on the trailing 60 day average closing price of the Company's common stock. The value of the MSUs was determined using a geometric brownian motion model that, based on certain variables, generates a large number of random trials simulating the price of the common stock over the measurement period. Expense of $1.2 million and $0.9 million related to MSUs was recorded in the years ended December 31, 2018 and 2017 , respectively. Activity related to the Company’s MSUs during the year ended December 31, 2018 was as follows: Number of Market Stock Units Maximum Shares Potentially Issuable Outstanding on December 31, 2017 221,936 332,904 Granted 32,194 48,292 Exchanged for stock (1) (60,995 ) (46,799 ) Maximum vs. earned (2) — (54,855 ) Outstanding on December 31, 2018 193,135 279,542 (1) The 60,995 MSUs were exchanged for 46,799 of Lawson's common stock. (2) Difference between 150% of common stock that was potentially realizable for MSUs when originally granted and the actual amount of common stock that was earned on the vesting date. Stock Options Each stock option can be exchanged for one share of the Company’s common stock at the stated exercise price. Activity related to stock options during the year ended December 31, 2018 was as follows: Number of Stock Options Weighted average exercise price Outstanding on December 31, 2017 84,476 26.98 Exercised (1,005 ) 14.04 Outstanding on December 31, 2018 83,471 27.14 Expense related to stock options was $0.1 million and $0.2 million in 2018 and 2017 , respectively. Unrecognized compensation at December 31, 2018 was $0.2 million . Upon vesting, stock options are recognized as a component of equity. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Information With the acquisition of Bolt in 2017, the Company now 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' location and produce sales orders for product that is then shipped to the customer and also provides VMI services. The Bolt segment primarily sells product to customers when the customers visit one of Bolt's 14 branch locations and the product is delivered to the customers at the point of sale. The Bolt segment total assets includes the value of the acquired intangibles and the related amortization within its operating income. Financial information for the Company's reportable segments follows: (Dollars in thousands) Year Ended December 31, 2018 2017 Net sales Lawson $ 313,095 $ 297,953 Bolt 36,542 7,954 Consolidated total $ 349,637 $ 305,907 Gross profit Lawson $ 175,517 $ 179,578 Bolt 14,023 3,440 Consolidated total $ 189,540 $ 183,018 Operating Income Lawson $ 7,500 $ 4,164 Bolt 1,710 350 Gain on sale of property — 5,422 Consolidated total 9,210 9,936 Interest expense (1,009 ) (622 ) Other income (expense), net (1,338 ) 780 Income before income taxes $ 6,863 $ 10,094 Capital expenditures Lawson $ 1,907 $ 1,251 Bolt 617 5 Consolidated total $ 2,524 $ 1,256 Depreciation and amortization Lawson $ 6,008 $ 6,280 Bolt 847 490 Consolidated total $ 6,855 $ 6,770 Total assets Lawson $ 169,216 $ 161,520 Bolt 36,067 38,423 Intercompany note receivable (8,141 ) (8,832 ) Consolidated total $ 197,142 $ 191,111 Financial information related to the Company’s continuing operations by geographic area follows: (Dollars in Thousands) Year Ended December 31, 2018 2017 Net sales (1) United States $ 279,917 $ 266,994 Canada 69,720 38,913 Consolidated total $ 349,637 $ 305,907 Long-lived assets (2) United States $ 25,539 $ 24,686 Canada 31,507 34,322 Consolidated total $ 57,046 $ 59,008 (1) Net sales are attributed to countries based on the location of customers. (2) Long-lived assets primarily consist of property, plant and equipment, goodwill, intangibles and other assets. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts Schedule II Valuation and Qualifying Accounts (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Schedule II -Valuation and Qualifying Accounts The roll forward of valuation accounts were as follows: (Dollars in thousands) Description Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period Allowance for doubtful accounts: Year ended December 31, 2018 $ 476 $ 695 $ (622 ) $ 549 Year ended December 31, 2017 $ 454 $ 499 $ (477 ) $ 476 Valuation allowance for deferred tax assets: Year ended December 31, 2018 $ 2,556 $ 13 $ — $ 2,569 Year ended December 31, 2017 $ 35,416 $ (32,860 ) $ — $ 2,556 (1) Uncollected receivables written off, net of recoveries and translation adjustments. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of consolidation | The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts and transactions of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Cash equivalents | The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount of the Company’s cash equivalents at December 31, 2018 approximates fair value. |
Allowance for doubtful accounts | The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings, substantial down-grading of credit ratings), a specific reserve for bad debts is recorded against amounts due to reduce the receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes reserves for bad debts based on the Company’s historical experience of bad debt write-offs as a percent of accounts receivable outstanding. If circumstances change (e.g., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligations), the estimates of the recoverability of amounts due the Company could be revised by a material amount. |
Inventories | Inventories principally consist of finished goods stated at the lower of cost or net realizable value using the first-in-first-out method. To reduce the cost basis of inventory to a lower of cost or net realizable value, a reserve is recorded for slow-moving and obsolete inventory based on historical experience and monitoring of current inventory activity. Estimates are used to determine the necessity of recording these reserves based on periodic detailed analysis using both qualitative and quantitative factors. As part of this analysis, the Company considers several factors including the inventories length of time on hand, historical sales, product shelf life, product life cycle, product category and product obsolescence. |
Property, plant and equipment | Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation expense is computed primarily by the straight-line method for its buildings, machinery and equipment, furniture and fixtures and vehicles. The Company estimates useful lives of 20 to 40 years for buildings and improvements and 3 to 10 years for machinery and equipment, furniture and fixtures and vehicles. Amortization of financing and capital leases is included in depreciation expense. Depreciation expense was $4.8 million and $4.7 million for 2018 and 2017 respectively. Capitalized software is amortized over estimated useful lives of 3 to 5 years using the straight-line method. Amortization expense of capitalized software was $1.1 million and $1.6 million for 2018 and 2017 respectively. |
Cash value of life insurance | The Company has invested funds in life insurance policies on certain current and former employees. The cash surrender value of the policies is invested in various investment instruments and is recorded as an asset on our consolidated balance sheet. The Company records these funds at contractual value. The change in the cash surrender value of the life insurance policies, which is recorded as a component of General and administrative expenses, is the change in the policies' contractual values. |
Deferred compensation | The Company’s Executive Deferral Plan (“Deferral Plan”) allows certain executives to defer payment of a portion of their earned compensation. The deferred compensation is recorded in an Account Balance, which is a bookkeeping entry made by the Company to measure the amount due to the participant. The Account Balance is equal to the participant’s deferred compensation, adjusted for increases and/or decreases in the amount that the participant has designated to one or more bookkeeping portfolios that track the performance of certain mutual funds. Lawson adjusts the deferred compensation liability to equal the contractual value of the participants’ Account Balances. These adjustments are the changes in contractual value of the individual plans and are recorded as a component of General and administrative expenses. |
Stock-based compensation | Compensation based on the share value of the Company’s common stock is valued at its fair value at the grant date and the expense is recognized over the vesting period. Fair value is re-measured each reporting period for liability-classified awards that may be redeemable in cash. |
Goodwill | Goodwill — The Company had $20.1 million and $19.6 million of goodwill in 2018 and 2017 , respectively. Goodwill represents the cost of business acquisitions in excess of the fair value of identifiable net tangible and intangible assets acquired. Goodwill is allocated to the appropriate reporting unit, which are the same as the operating segments as reviewed by the Company’s chief operating decision maker responsible for reviewing operating performance and allocating resources. The Company reviews goodwill for potential impairment annually on December 1 st , or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. The first step in the multi-step process to determine if goodwill has been impaired and to what degree is to review the relevant qualitative factors that could cause the fair value of the reporting unit to decrease below the carrying value of the reporting unit. After reviewing the qualitative factors relevant to the reporting units, including conditions surrounding the industry we operate in compared to when the acquisitions were completed, the financial performance of the reporting units compared to our projected results, and macroeconomic conditions as a whole, we have determined that it is more likely than not that the fair value of the reporting units exceed their carrying value, therefore goodwill has not been impaired and no further steps need to be taken. Intangible Assets — The Company's intangible assets consists of trade names, and customer relationships. Intangible assets are amortized over weighted average 15 and 11 year estimated useful lives for trade names and customer relationships, respectively. |
Impairment of long-lived assets | The Company reviews its long-lived assets, including property, plant and equipment and definite life intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable. Recoverability is measured by a comparison of the assets' carrying amount to their expected future undiscounted net cash flows. If such assets are considered to be impaired, the impairment to be recognized is measured based on the amount by which the carrying amount of the asset exceeds its fair value. In 2018 the Company determined that a triggering event had occurred when it determined that it would most likely exercise its put option on a building of a previously discontinued operation in Decatur, Alabama. Accordingly, the Company recorded an impairment charge of $0.2 million in 2018 based upon the anticipated proceeds less its carrying value. No additional triggering events or impairments occurred in 2018. |
Income taxes | Deferred tax assets or liabilities reflect temporary differences between amounts of assets and liabilities for financial and tax reporting. Such amounts are adjusted, as appropriate, to reflect changes in enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not (i.e. greater than 50% likely) that some or all of the deferred tax assets will not be realized. The determination of the amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income, (3) the impact of tax planning strategies and (4) the ability to carry back deferred tax assets to offset prior taxable income. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding our volume, pricing and costs. Additionally, valuation allowances related to deferred tax assets can be impacted by changes to tax laws. Significant judgment is required in determining income tax provisions as well as deferred tax asset and liability balances, including the estimation of valuation allowances and the evaluation of tax positions. In 2012, due to historical cumulative losses, we had determined it was more likely than not that we would not be able to utilize our deferred tax assets to offset future taxable income. Therefore, substantially all of our deferred tax assets were subject to a tax valuation allowance. In 2017 we had continued to generate pre-tax profits and had utilized some of our net operating loss carryforwards over the previous two years and were in a three year cumulative income position in the U.S. Based on available evidence, including the utilization of $13.0 million of net operating loss carryforwards in 2017, we reached a point of increased confidence in our ability to sustain profit levels and we believed it was more likely than not that we would be able to utilize a substantial amount of our deferred tax assets to offset future taxable income. Therefore, a large portion of our U.S. valuation allowances were released in 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 would subject the Company to foreign withholding taxes and may subject the Company to U.S. federal and state taxes. The Company recognizes the benefit of tax positions when a benefit is more likely than not (i.e., greater than 50% likely) to be sustained on its technical merits. Recognized tax benefits are measured at the largest amount that is more likely than not to be sustained, based on cumulative probability, in final settlement of the position. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. |
Leases | Leases are categorized as either operating or capital leases at inception. Operating lease costs are recognized on a straight-line basis over the term of the lease. An asset and a corresponding liability for the capital lease obligation are established for the cost of capital leases. The capital lease obligation is amortized over the shorter of the estimated useful life of the asset or the lease term. The Company purchased $0.2 million and $0.3 million of assets financed by capital leases in 2018 and 2017 respectively, in non-cash transactions that were not reflected in the Consolidated Statements of Cash Flows. For build-to-suit financing leases, the Company establishes an asset and liability for the estimated construction costs incurred to the extent that it is involved in the construction of structural improvements or takes construction risk prior to the commencement of the lease. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If a lease does not meet the criteria to qualify for a sale-leaseback transaction, the established asset and liability remain on the Company's consolidated balance sheet. This asset is depreciated over the life of the lease and the liability is reduced by the non-interest portion of the lease payments for costs allocated to the building and on a straight line basis for costs allocated to land. |
Sub-leases [Policy Text Block] | Sub-leases — If the Company is relieved of its primary obligation under the original lease then the original lease is considered to be terminated, otherwise if the Company retains primary obligation under the original lease then the Company continues to account for the original lease and also accounts for the new sub-lease as lessor. At the time the sub-lease is executed, the Company records a gain or loss equal to the difference between the total cash payments to be made for gross rent under the original lease agreement over the life of the sub-lease plus executory costs and total gross rent proceeds expected to be received over the life of the sub-lease. |
Earnings per share | Earnings per Share — Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution from the exercise or conversion of outstanding stock options, market stock units and restricted stock awards into common stock. |
Foreign Currency | The accounts of foreign subsidiaries are measured using the local currency as the functional currency. All balance sheet amounts are translated into U.S. dollars using the exchange rates in effect at the applicable period end. Components of income or loss are translated using the average exchange rate for each reporting period. Gains and losses resulting from changes in the exchange rates from translation of the subsidiary accounts in local currency to U.S. dollars are reported as a component of Accumulated other comprehensive income or loss in the consolidated balance sheets. Gains and losses resulting from the effect of exchange rate changes on transactions denominated in currencies other than the functional currency are included as a component of net income or loss upon settlement of the transaction. Gains and losses resulting from intercompany transactions are included as a component of net income or loss each reporting period unless the transactions are of a long-term-investment nature and settlement is not planned or anticipated in the foreseeable future, in which case the gains and losses are recorded as a component of accumulated other comprehensive income or loss in the consolidated balance sheets. |
Treasury stock | The Company repurchased 16,512 and 968 shares of its common stock in 2018 and 2017 , respectively, from employees upon the vesting of restricted stock to offset the income taxes owed by those employees. The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity. The value of the treasury stock repurchased was $523 thousand and $20 thousand in 2018 and 2017 , respectively. |
Acquisitions | Acquisitions — The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions for the purchase price allocation process to value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. |
Use of estimates | Use of Estimates — Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported for service revenue, service cost, allowance for doubtful accounts, inventory reserves, goodwill and intangible assets valuation, and income taxes in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which is intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses by providing a more robust framework to use in determining when a set of assets and activities is a business. This ASU became effective commencing with our quarter ending March 31, 2018 and did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. This standard eliminates a step from the goodwill impairment test and instead requires an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. We adopted this guidance on January 1, 2017. The adoption of this guidance had no material impact on our financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 (including interim periods within those periods) using a retrospective transition method to each period presented. The Company adopted ASU 2016-18 on January 1, 2018 and it had no material impact on the consolidated financial statements. In November, 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This update simplifies the presentation of deferred income taxes by requiring all entities that present a classified balance sheet to classify all deferred tax assets and liabilities as a noncurrent amount. The objective of this ASU is to reduce the cost and complexity of recording deferred taxes without affecting the usefulness of financial statement information. The pronouncement is effective for public entities in fiscal years beginning after December 15, 2016, including interim periods within those fiscal years and the guidance may be applied on either a prospective or retrospective basis. The Company adopted ASU 2015-07 on a prospective basis in 2017. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. The guidance is to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company adopted ASU 2015-11 on January 1, 2017 and it had no material impact on its financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses, which revises the requirements for how an entity should measure credit losses on financial instruments. The pronouncement is effective for public entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and the new guidance will be applied on a prospective basis. The Company does not believe the adoption of the new standard will have a material impact on its financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table presents the impact of ASC 606 on Consolidated Statements of Operations and Comprehensive Income: Year Ended December 31, 2018 (Dollars in thousands) As Reported Service Revenues and Costs Adjustments Pro-Forma as if Previous Accounting Guidance Was in Effect (Unaudited) Product revenue $ 310,204 $ 39,383 $ 349,587 Service revenue 39,433 (39,433 ) — Total revenue 349,637 (50 ) 349,587 Product cost of goods sold 145,493 — 145,493 Service costs 14,604 (14,604 ) — Total cost of goods sold 160,097 (14,604 ) 145,493 Gross profit 189,540 14,554 204,094 Gross profit percentage 54.2 % 58.4 % Selling expenses 87,642 14,498 102,140 General and administrative expenses 92,688 — 92,688 Operating expenses 180,330 14,498 194,828 Operating income as reported was $9.21 million whereas pro forma unaudited operating income as if previous accounting guidance was in effect would have been $9.27 million . |
Disaggregation of Revenue | Disaggregated revenue by geographic area follows: Unaudited Year Ending December 31, (Dollars in thousands) 2018 2017 United States $ 279,917 $ 266,994 Canada 69,720 38,913 Consolidated total $ 349,637 $ 305,907 Disaggregated revenue by product type follows: Unaudited Year Ending December 31, 2018 2017 Fastening Systems 24 % 21 % Cutting Tools and Abrasives 15 % 14 % Fluid Power 14 % 15 % Specialty Chemicals 12 % 14 % Electrical 11 % 11 % Aftermarket Automotive Supplies 8 % 9 % Safety 5 % 4 % Welding and Metal Repair 2 % 2 % Other 9 % 10 % Consolidated Total 100 % 100 % |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | A summary of the purchase price allocation of the acquisitions is as follows: (Dollars in thousands) December 31, 2018 2017 Cash paid and liabilities assumed Cash paid $ 5,150 $ 32,286 Deferred tax liability — 3,065 Other liabilities 158 2,434 Contingent consideration 65 — $ 5,373 $ 37,785 Fair value of assets acquired Goodwill $ 1,929 $ 14,176 Trade names 470 7,241 Inventory 123 6,315 Customer relationships 2,580 4,186 Accounts receivable 271 3,323 Property, plant and equipment — 1,796 Other assets — 748 $ 5,373 $ 37,785 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments [Table Text Block] | The following table contains unaudited pro forma net sales and net income for Lawson Products assuming the Screw Products acquisition closed on January 1, 2017 and the Bolt acquisition closed on January 1, 2016. (Dollars in thousands) Year Ended December 31, 2018 2017 Net Sales Actual $ 349,637 $ 305,907 Pro forma (unaudited) $ 351,916 $ 334,554 Net income Actual $ 6,214 $ 29,688 Pro forma (unaudited) $ 6,674 $ 31,111 The pro forma disclosures in the table above include adjustments for, amortization of intangible assets, interest expense, tax expenses and the impact of pro forma adjustments and acquisition costs to reflect results that are more representative of the combined results of the transactions as if the Screw Products acquisition closed on January 1, 2017 and the Bolt acquisition closed on January 1, 2016. This pro forma information utilizes certain estimates, is presented for illustrative purposes only and may not be indicative of the results of operation that would have actually occurred. 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 events that may occur after the acquisition, such as anticipated cost savings from operating synergies. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Components of inventories | (Dollars in thousands) December 31, 2018 2017 Inventories, gross $ 58,215 $ 56,492 Reserve for obsolete and excess inventory (5,328 ) (5,564 ) Inventories, net $ 52,887 $ 50,928 |
Property, Plant and Equipment P
Property, Plant and Equipment Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Components of property, plant and equipment | Components of property, plant and equipment were as follows: (Dollars in thousands) December 31, 2018 2017 Land $ 2,565 $ 2,752 Buildings and improvements 16,858 16,973 Machinery and equipment 23,955 23,277 Capitalized software 21,738 21,947 McCook facility 12,961 12,961 Furniture and fixtures 5,884 5,634 Capital leases 684 806 Vehicles 190 214 Construction in progress 391 375 85,226 84,939 Accumulated depreciation and amortization (61,678 ) (57,606 ) $ 23,548 $ 27,333 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
Schedule of Goodwill [Table Text Block] | Goodwill activity related to acquisitions is included in the table below: (Dollars in thousands) December 31, 2018 2017 Beginning balance $ 19,614 $ 5,520 Acquisition 2,086 14,176 Impact of foreign exchange (1,452 ) (9 ) Adjustment to prior year allocation (1) (169 ) (73 ) Ending balance $ 20,079 $ 19,614 (1) The reduction of $0.2 million in 2018 resulted from an adjustment to the goodwill created by the Bolt acquisition. The reduction of $0.1 million in 2017 resulted from a non-cash adjustment to the estimated purchase price allocation to inventory originally recorded in 2016. Goodwill was tested for impairment in the fourth quarter of 2018 and no adjustment was deemed necessary. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2019 $ 1,352 2020 1,492 2021 1,600 2022 1,406 2023 1,292 Thereafter 5,970 $ 13,112 |
Intangible Assets Disclosure [Text Block] | Intangible assets The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 8,090 $ (1,447 ) $ 6,643 $ 8,182 $ (957 ) $ 7,225 Customer relationships 7,114 (645 ) 6,469 4,911 (323 ) 4,588 $ 15,204 $ (2,092 ) $ 13,112 $ 13,093 $ (1,280 ) $ 11,813 The Company reviews goodwill and intangibles for potential impairment annually on December 1st or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. Amortization expense of $0.9 million and $0.4 million related to intangible assets was recorded in General and administrative expenses for 2018 and 2017 , respectively. The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2019 $ 1,352 2020 1,492 2021 1,600 2022 1,406 2023 1,292 Thereafter 5,970 $ 13,112 The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 8,090 $ (1,447 ) $ 6,643 $ 8,182 $ (957 ) $ 7,225 Customer relationships 7,114 (645 ) 6,469 4,911 (323 ) 4,588 $ 15,204 $ (2,092 ) $ 13,112 $ 13,093 $ (1,280 ) $ 11,813 |
Intangible assets Schedule of i
Intangible assets Schedule of intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Assets Disclosure [Text Block] | Intangible assets The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 8,090 $ (1,447 ) $ 6,643 $ 8,182 $ (957 ) $ 7,225 Customer relationships 7,114 (645 ) 6,469 4,911 (323 ) 4,588 $ 15,204 $ (2,092 ) $ 13,112 $ 13,093 $ (1,280 ) $ 11,813 The Company reviews goodwill and intangibles for potential impairment annually on December 1st or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. Amortization expense of $0.9 million and $0.4 million related to intangible assets was recorded in General and administrative expenses for 2018 and 2017 , respectively. The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2019 $ 1,352 2020 1,492 2021 1,600 2022 1,406 2023 1,292 Thereafter 5,970 $ 13,112 The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 8,090 $ (1,447 ) $ 6,643 $ 8,182 $ (957 ) $ 7,225 Customer relationships 7,114 (645 ) 6,469 4,911 (323 ) 4,588 $ 15,204 $ (2,092 ) $ 13,112 $ 13,093 $ (1,280 ) $ 11,813 |
Intangible assets Future amorti
Intangible assets Future amortization expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Future intangible asset amortization expense [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2019 $ 1,352 2020 1,492 2021 1,600 2022 1,406 2023 1,292 Thereafter 5,970 $ 13,112 |
Income Taxes Income Tax (Tables
Income Taxes Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income (loss) from continuing operations before income taxes | Income (loss) from operations before income taxes consisted of the following: (Dollars in thousands) Year Ended December 31, 2018 2017 United States $ 6,839 $ 10,159 Canada 24 (65 ) $ 6,863 $ 10,094 |
Components of provision (benefit) for income taxes | Provision (benefit) for income taxes from operations for the years ended December 31, consisted of the following: (Dollars in thousands) Year Ended December 31, 2018 2017 Current income tax expense (benefit): U.S. federal $ — $ 296 U.S. state 165 129 Canada 257 1,209 Total $ 422 $ 1,634 Deferred income tax expense (benefit): U.S. federal $ 721 $ (17,971 ) U.S. state (464 ) (3,257 ) Canada (30 ) — Total $ 227 $ (21,228 ) Total income tax expense (benefit): U.S. federal $ 721 $ (17,675 ) U.S. state (299 ) (3,128 ) Canada 227 1,209 Total $ 649 $ (19,594 ) |
Reconciliation between effective income tax rate and statutory federal rate | The reconciliation between the effective income tax rate and the statutory federal rate for operations was as follows: Year Ended December 31, 2018 2017 Statutory Federal rate 21.0 % 35.0 % Increase (decrease) resulting from: Change in valuation allowance - reversal — (210.5 ) Change in valuation allowance - federal tax rate change — (126.4 ) Change in valuation allowance - current period activity 3.7 (65.7 ) Federal tax rate change — 126.4 Foreign income inclusion (13.9 ) 29.2 Change in uncertain tax positions (1.4 ) 7.7 State and local taxes, net 4.7 4.7 Stock compensation (4.5 ) (1.9 ) Meals & entertainment 2.4 1.4 Alternative Minimum Tax 1.4 3.6 Provision to return differences (9.3 ) (0.7 ) Foreign Currency Loss 2.5 — Other items, net 2.9 3.1 Provision for income taxes 9.5 % (194.1 )% |
Deferred tax assets and liabilities | Deferred income tax assets and liabilities contain the following temporary differences: (Dollars in thousands) December 31, 2018 2017 Deferred tax assets: Net operating loss carryforward $ 9,878 $ 12,120 Compensation and benefits 9,598 7,828 Inventory reserve 1,769 1,689 Capital loss carryforward 1,317 1,326 Accounts receivable reserve 142 130 Other 457 1,155 Total deferred tax assets 23,161 24,248 Deferred tax liabilities: Intangible assets 2,478 3,115 Property, plant and equipment (20 ) 41 Other 303 403 Total deferred liabilities 2,761 3,559 Net deferred tax assets before valuation allowance 20,400 20,689 Valuation allowance (2,569 ) (2,556 ) Net deferred tax assets $ 17,831 $ 18,133 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (Dollars in thousands) December 31, 2018 2017 Balance at beginning of year $ 4,255 $ 3,249 Additions for tax positions of current year 43 865 Additions for tax positions of prior years 85 141 Reductions for tax positions of prior year (771 ) — Balance at end of year $ 3,612 $ 4,255 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other liabilities | Accrued expenses and other liabilities consisted of the following: (Dollars in thousands) December 31, 2018 2017 Accrued compensation $ 10,740 $ 9,044 Accrued stock-based compensation (stock performance rights) 13,458 8,712 Accrued and withheld taxes, other than income taxes 1,674 1,136 Environmental remediation accrual 1,376 968 Financing lease obligation 1,207 1,123 Accrued profit sharing 899 894 Deferred revenue 693 — Accrued health benefits 614 657 Accrued severance 304 483 Other 9,214 10,023 $ 40,179 $ 33,040 |
Revolving Line of Credit (Table
Revolving Line of Credit (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt covenants [Table Text Block] | Quarterly Financial Covenants Requirement Actual EBITDA to fixed charges ratio 1.10 : 1.00 3.46 : 1.00 |
Reserve for Severance (Tables)
Reserve for Severance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Severance Reserve [Abstract] | |
Changes in the reserve for severance | The table below reflects the activity in the Company’s reserve for severance and related payments. (Dollars in thousands) Year Ended December 31, 2018 2017 Beginning balance $ 483 $ 1,710 Charged to earnings 848 738 Cash paid (972 ) (1,965 ) Ending balance $ 359 $ 483 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | The Company’s future minimum lease commitments, principally for facilities and equipment, as of December 31, 2018 , were as follows: (Dollars in thousands) Year ended December 31, Operating Leases Financing Lease Capital Leases 2019 $ 2,574 $ 1,395 $ 201 2020 2,369 1,444 155 2021 2,349 1,493 91 2022 2,008 760 11 2023 1,130 — — Thereafter 374 — — Total $ 10,804 $ 5,092 $ 458 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Valuation assumptions | The weighted-average estimated value of SPRs outstanding as of December 31, 2018 was $14.96 per SPR using the following assumptions: Expected volatility 36.7% to 42.7% Risk-free rate of return 2.5% to 2.6% Expected term (in years) 0.1 to 4.5 Expected annual dividend $0 |
Activity related to SPRs | Activity related to the Company’s SPRs during the year ended December 31, 2018 was as follows: Number of SPRs Weighted Average Exercise Price Outstanding on December 31, 2017 961,554 $ 19.76 Granted 44,737 24.70 Exercised (13,270 ) 22.16 Cancelled (34,500 ) 25.52 Outstanding on December 31, 2018 958,521 19.75 Exercisable on December 31, 2018 848,503 $ 19.11 |
Activity related to RSAs | Activity related to the Company’s RSAs during the year ended December 31, 2018 was as follows: Restricted Stock Awards Outstanding on December 31, 2017 104,920 Granted 82,722 Canceled (31,776 ) Exchanged for shares (36,610 ) Outstanding on December 31, 2018 119,256 |
MSU Rollforward | Market Stock Units ("MSUs") are exchangeable for between 0% to 150% of the Company's common shares at the end of the vesting period based on the trailing 60 day average closing price of the Company's common stock. The value of the MSUs was determined using a geometric brownian motion model that, based on certain variables, generates a large number of random trials simulating the price of the common stock over the measurement period. Expense of $1.2 million and $0.9 million related to MSUs was recorded in the years ended December 31, 2018 and 2017 , respectively. Activity related to the Company’s MSUs during the year ended December 31, 2018 was as follows: Number of Market Stock Units Maximum Shares Potentially Issuable Outstanding on December 31, 2017 221,936 332,904 Granted 32,194 48,292 Exchanged for stock (1) (60,995 ) (46,799 ) Maximum vs. earned (2) — (54,855 ) Outstanding on December 31, 2018 193,135 279,542 |
Stock Option Activity Table | Stock Options Each stock option can be exchanged for one share of the Company’s common stock at the stated exercise price. Activity related to stock options during the year ended December 31, 2018 was as follows: Number of Stock Options Weighted average exercise price Outstanding on December 31, 2017 84,476 26.98 Exercised (1,005 ) 14.04 Outstanding on December 31, 2018 83,471 27.14 Expense related to stock options was $0.1 million and $0.2 million in 2018 and 2017 , respectively. Unrecognized compensation at December 31, 2018 was $0.2 million . Upon vesting, stock options are recognized as a component of equity. |
Segment Information Geographic
Segment Information Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Geographic Information [Abstract] | |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | Financial information related to the Company’s continuing operations by geographic area follows: (Dollars in Thousands) Year Ended December 31, 2018 2017 Net sales (1) United States $ 279,917 $ 266,994 Canada 69,720 38,913 Consolidated total $ 349,637 $ 305,907 Long-lived assets (2) United States $ 25,539 $ 24,686 Canada 31,507 34,322 Consolidated total $ 57,046 $ 59,008 (1) Net sales are attributed to countries based on the location of customers. (2) Long-lived assets primarily consist of property, plant and equipment, goodwill, intangibles and other assets. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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) Year Ended December 31, 2018 2017 Net sales Lawson $ 313,095 $ 297,953 Bolt 36,542 7,954 Consolidated total $ 349,637 $ 305,907 Gross profit Lawson $ 175,517 $ 179,578 Bolt 14,023 3,440 Consolidated total $ 189,540 $ 183,018 Operating Income Lawson $ 7,500 $ 4,164 Bolt 1,710 350 Gain on sale of property — 5,422 Consolidated total 9,210 9,936 Interest expense (1,009 ) (622 ) Other income (expense), net (1,338 ) 780 Income before income taxes $ 6,863 $ 10,094 Capital expenditures Lawson $ 1,907 $ 1,251 Bolt 617 5 Consolidated total $ 2,524 $ 1,256 Depreciation and amortization Lawson $ 6,008 $ 6,280 Bolt 847 490 Consolidated total $ 6,855 $ 6,770 Total assets Lawson $ 169,216 $ 161,520 Bolt 36,067 38,423 Intercompany note receivable (8,141 ) (8,832 ) Consolidated total $ 197,142 $ 191,111 |
Financial information by geographic area, continuing operations | Financial information related to the Company’s continuing operations by geographic area follows: (Dollars in Thousands) Year Ended December 31, 2018 2017 Net sales (1) United States $ 279,917 $ 266,994 Canada 69,720 38,913 Consolidated total $ 349,637 $ 305,907 Long-lived assets (2) United States $ 25,539 $ 24,686 Canada 31,507 34,322 Consolidated total $ 57,046 $ 59,008 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Depreciation | $ 4,800,000 | $ 4,700,000 | ||
Amortization expense of capitalized software | $ 1,100,000 | $ 1,600,000 | ||
Treasury stock, shares acquired | 16,512 | 968 | ||
Property, Plant and Equipment [Line Items] | ||||
Impairment of Long-Lived Assets Held-for-use | $ 200,000 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | 329,000 | $ 178,000 | $ (1,900,000) | |
non-cash purchase of assets | 200,000 | 300,000 | ||
Payments for Repurchase of Common Stock | (523,000) | (20,000) | ||
Goodwill | 20,079,000 | 19,614,000 | $ 5,520,000 | |
Treasury Stock, Value, Acquired, Cost Method | $ (523,000) | (20,000) | ||
Buildings and improvements | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 20 years | |||
Buildings and improvements | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 40 years | |||
Machinery and equipment, furniture and fixtures, and vehicles | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 3 years | |||
Machinery and equipment, furniture and fixtures, and vehicles | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 10 years | |||
Capitalized software | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 3 years | |||
Capitalized software | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 5 years | |||
Treasury Stock | ||||
Property, Plant and Equipment [Line Items] | ||||
Treasury Stock, Value, Acquired, Cost Method | $ (523,000) | $ (20,000) | ||
Stock Compensation Plan [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 46,067 | 80,000 | ||
Trade Names [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years | |||
Customer Relationships [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 11 years |
Revenue Recognition Narrative (
Revenue Recognition Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (329,000) | $ (178,000) | $ 1,900,000 | |
Deferred revenue | 700,000 | $ 700,000 | ||
Deferred expenses | 300,000 | 400,000 | ||
Decrease in retained earnings | 77,338,000 | 71,453,000 | ||
Operating income | 9,210,000 | $ 9,936,000 | ||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (329,000) | |||
Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Decrease in retained earnings | $ 300,000 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income | $ 9,270,000 |
Revenue Recognition Impact of A
Revenue Recognition Impact of ASC 606 on Consolidated Statements of Operations and Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Sales Revenue, Goods, Net | $ 310,204 | $ 305,907 |
Sales Revenue, Services, Net | 39,433 | 0 |
Net sales | 349,637 | 305,907 |
Cost of Goods Sold | 145,493 | 122,889 |
Cost of Services | 14,604 | 0 |
Cost of Goods and Services Sold | 160,097 | |
Gross Profit | $ 189,540 | 183,018 |
Gross Profit, Percentage | 54.20% | |
Selling Expense | $ 87,642 | 98,025 |
General and Administrative Expense | 92,688 | 80,479 |
Operating Expenses | 180,330 | $ 173,082 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Sales Revenue, Goods, Net | 349,587 | |
Sales Revenue, Services, Net | 0 | |
Net sales | 349,587 | |
Cost of Goods Sold | 145,493 | |
Cost of Services | 0 | |
Cost of Goods and Services Sold | 145,493 | |
Gross Profit | $ 204,094 | |
Gross Profit, Percentage | 58.40% | |
Selling Expense | $ 102,140 | |
General and Administrative Expense | 92,688 | |
Operating Expenses | 194,828 | |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Sales Revenue, Goods, Net | 39,383 | |
Sales Revenue, Services, Net | (39,433) | |
Net sales | (50) | |
Cost of Goods Sold | 0 | |
Cost of Services | (14,604) | |
Cost of Goods and Services Sold | (14,604) | |
Gross Profit | 14,554 | |
Selling Expense | 14,498 | |
General and Administrative Expense | 0 | |
Operating Expenses | $ 14,498 |
Revenue Recognition Disaggregat
Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 349,637 | $ 305,907 |
Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Fastening Systems | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 24.00% | 21.00% |
Cutting Tools and Abrasives | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 15.00% | 14.00% |
Fluid Power | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 14.00% | 15.00% |
Specialty Chemicals | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 12.00% | 14.00% |
Electrical | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 11.00% | 11.00% |
Aftermarket Automotive Supplies | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 8.00% | 9.00% |
Safety | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 5.00% | 4.00% |
Welding and Metal Repair | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 2.00% | 2.00% |
Other | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 9.00% | 10.00% |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 279,917 | $ 266,994 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 69,720 | $ 38,913 |
Leases (Details)
Leases (Details) - USD ($) | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Adtion of ASC 842 [Abstract] | |||
Finance Lease, Right-of-Use Asset | $ 6,800,000 | ||
Finance Lease, Liability | 8,800,000 | ||
Decrease in Deferred Lease Liability | 2,000,000 | ||
Derecognition of McCook Financing Lease Liability | 6,400,000 | ||
Derecognition of McCook Financing Lease Asset | 4,500,000 | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | 1,900,000 | $ (329,000) | $ (178,000) |
Initial Recognition of Financing Lease Asset and Liability | $ 5,300,000 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Gross | $ 5,307 | $ 32,286 |
Revenue, Net | 349,637 | 305,907 |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 65 | 0 |
Goodwill, Acquired During Period | 2,086 | |
Screw Products [Member] | ||
Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Gross | 5,150 | |
Finite-Lived Customer Relationships, Gross | 2,580 | |
Finite-Lived Trade Names, Gross | 470 | |
Revenue, Net | 600 | |
Goodwill, Acquired During Period | $ 1,929 | |
Bolt [Member] [Member] | ||
Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Gross | 32,286 | |
Finite-Lived Customer Relationships, Gross | 4,186 | |
Finite-Lived Trade Names, Gross | 7,241 | |
Goodwill, Acquired During Period | $ 14,176 | |
Trade Names [Member] | Screw Products [Member] | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Trade Names [Member] | Bolt [Member] [Member] | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Customer Relationships [Member] | Screw Products [Member] | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Customer Relationships [Member] | Bolt [Member] [Member] | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 12 years |
Acquisitions Purchase Price All
Acquisitions Purchase Price Allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pro Forma [Abstract] | ||
Payments to Acquire Businesses, Gross | $ 5,307 | $ 32,286 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | 0 | 3,065 |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 65 | 0 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 158 | 2,434 |
Business Combination, Consideration Transferred | 5,373 | 37,785 |
Goodwill, Acquired During Period | 2,086 | |
Business Combination, Acquired Receivable, Fair Value | 271 | 3,323 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 0 | 1,796 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 123 | 6,315 |
Business Combination, Consideration Transferred, Other | $ 0 | $ 748 |
Acquisitions Pro Forma Results
Acquisitions Pro Forma Results (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pro Forma [Abstract] | ||
Net Sales | $ 349,637 | $ 305,907 |
Business Acquisition, Pro Forma Revenue | 351,916 | 334,554 |
NetIncomeLoss | 6,214 | 29,688 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 6,674 | $ 31,111 |
Restricted Cash Restricted Ca_2
Restricted Cash Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Restricted Cash [Abstract] | ||
Restricted Cash and Cash Equivalents, Current | $ 800 | $ 800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Components of inventories | ||
Total | $ 58,215 | $ 56,492 |
Reserve for obsolete and excess inventory | (5,328) | (5,564) |
Inventories, net | $ 52,887 | $ 50,928 |
Property, Plant and Equipment_2
Property, Plant and Equipment Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | $ 0 | $ 5,422 |
Property, plant and equipment, gross | 85,226 | 84,939 |
Accumulated depreciation and amortization, | (61,678) | (57,606) |
Property, plant and equipment, less accumulated depreciation and amortization | 23,548 | 27,333 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,565 | 2,752 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 16,858 | 16,973 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 23,955 | 23,277 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 21,738 | 21,947 |
McCook facility | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 12,961 | 12,961 |
Accumulated depreciation and amortization, | (8,500) | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,884 | 5,634 |
Capital leases | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 684 | 806 |
Accumulated depreciation and amortization, | (300) | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 190 | 214 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 391 | $ 375 |
Property, Plant and Equipment F
Property, Plant and Equipment Fairfielf Disposal (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fairfield Disposal [Abstract] | ||
Proceeds from Sale of Property, Plant, and Equipment | $ 0 | $ 6,177 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | $ 0 | $ 5,422 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Abstract] | |||
Goodwill | $ 20,079 | $ 19,614 | $ 5,520 |
Goodwill, Acquired During Period | 2,086 | ||
Goodwill, Translation and Purchase Accounting Adjustments | (1,452) | (9) | |
Goodwill, Purchase Accounting Adjustments | $ (169) | $ (73) |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets [Abstract] | ||
Amortization of Intangible Assets | $ 900 | $ 400 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 1,352 |
Intangible assets Schedule of_2
Intangible assets Schedule of intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 15,204 | $ 13,093 |
Finite-Lived Intangible Assets, Accumulated Amortization | (2,092) | (1,280) |
Finite-Lived Intangible Assets, Net | 13,112 | 11,813 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 8,090 | 8,182 |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,447) | (957) |
Finite-Lived Intangible Assets, Net | 6,643 | 7,225 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 7,114 | 4,911 |
Finite-Lived Intangible Assets, Accumulated Amortization | (645) | (323) |
Finite-Lived Intangible Assets, Net | $ 6,469 | $ 4,588 |
Intangible assets Future intang
Intangible assets Future intangible amortization schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Future intangible amortization schedule [Abstract] | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 1,352 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 1,492 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1,600 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,406 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,292 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 5,970 | |
Finite-Lived Intangible Assets, Net | $ 13,112 | $ 11,813 |
Income Taxes Components of inco
Income Taxes Components of income tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income (loss) from continuing operations before income taxes | ||
United States | $ 6,839 | $ 10,159 |
Canada | 24 | (65) |
Income (loss) from continuing operations before income taxes | 6,863 | 10,094 |
Current income tax expense (benefit): | ||
U.S. Federal | 0 | 296 |
U.S. state | 165 | 129 |
Canada | 257 | 1,209 |
Total | 422 | 1,634 |
Deferred income tax expense (benefit): | ||
Deferred Federal Income Tax Expense (Benefit) | 721 | (17,971) |
Deferred State and Local Income Tax Expense (Benefit) | (464) | (3,257) |
Deferred Foreign Income Tax Expense (Benefit) | (30) | 0 |
Deferred Income Tax Expense (Benefit) | 227 | (21,228) |
Total income tax expense (benefit): | ||
Federal Income Tax Expense (Benefit), Continuing Operations | 721 | (17,675) |
State and Local Income Tax Expense (Benefit), Continuing Operations | (299) | (3,128) |
Foreign Income Tax Expense (Benefit), Continuing Operations | 227 | 1,209 |
Income Tax Expense (Benefit) | $ 649 | $ (19,594) |
Income Taxes Reconciliation of
Income Taxes Reconciliation of effective tax rate (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||
Statutory Federal rate | 21.00% | 35.00% |
Change in deferred tax asset valuation allowance reversal | 0.00% | (210.50%) |
Change in deferred tax asset valuation allowance - federal tax rate change | 0.00% | (126.40%) |
Increase (decrease) resulting from: | ||
State and local taxes, net | 4.70% | 4.70% |
Change in valuation allowance | 3.70% | (65.70%) |
Change in federal tax rate | 0.00% | 126.40% |
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Percent | (13.90%) | 29.20% |
Meals & entertainment | 2.40% | 1.40% |
Alternative minimum tax | 1.40% | 3.60% |
Provision to return differences | (9.30%) | (0.70%) |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 2.50% | 0.00% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Percent | (4.50%) | (1.90%) |
Change in uncertain tax positions | (1.40%) | 7.70% |
Other items, net | 2.90% | 3.10% |
Provision for income taxes | 9.50% | (194.10%) |
Income Taxes Components of defe
Income Taxes Components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 9,878 | $ 12,120 |
Compensation and benefits | 9,598 | 7,828 |
Inventory reserve | 1,769 | 1,689 |
Capital Loss Carryforward | 1,317 | 1,326 |
Accounts receivable reserve | 142 | 130 |
Other | 457 | 1,155 |
Total deferred tax assets | 23,161 | 24,248 |
Deferred Tax Liabilities, Intangible Assets | 2,478 | 3,115 |
Deferred tax liabilities: | ||
Property, plant and equipment | (20) | 41 |
Other | 303 | 403 |
Total deferred liabilities | 2,761 | 3,559 |
Net deferred assets before valuation allowance | 20,400 | 20,689 |
Valuation allowance | (2,569) | (2,556) |
Net deferred assets | $ 17,831 | $ 18,133 |
Income Taxes Other information
Income Taxes Other information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax (Textual) [Abstract] | |||
Income taxes paid | $ 1,300 | $ 300 | |
Operating Loss Carryforwards [Line Items] | |||
Interest Paid | 1,000 | 600 | |
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 20,200 | 13,000 | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 20,500 | ||
Undistributed Earnings of Foreign Subsidiaries | (8,400) | ||
Goodwill | 20,079 | 19,614 | $ 5,520 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | 4,255 | 3,249 | |
Additions for tax positions of current year | 43 | 865 | |
Additions for tax positions of prior years | 85 | 141 | |
Reductions for tax positions of prior years | (771) | 0 | |
Balance at end of year | $ 3,612 | $ 4,255 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued stock based compensation | $ 13,458 | $ 8,712 |
Accrued compensation | 10,740 | 9,044 |
Accrued severance | 304 | 483 |
Accrued and withheld taxes, other than income taxes | 1,674 | 1,136 |
Accrued Environmental Loss Contingencies, Current | 1,376 | 968 |
Financing lease obligation | 1,207 | 1,123 |
Accrued health benefits | 614 | 657 |
Accrued profit sharing | 899 | 894 |
Deferred Revenue | 693 | 0 |
Other | 9,214 | 10,023 |
Accrued Liabilities, Current | $ 40,179 | $ 33,040 |
Loan Agreement Quarterly Financ
Loan Agreement Quarterly Financial Covenants (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Required Minimum Value [Member] | |
Schedule of minimum EBITDA level achievable on quarterly basis | |
MinTangibleNetWorth | $ 45,000 |
Actual Value [Member] | |
Schedule of minimum EBITDA level achievable on quarterly basis | |
MinTangibleNetWorth | $ 48,570 |
Maximum | Required Minimum Value [Member] | |
Line of Credit Facility [Line Items] | |
EBITDA to Fixed Charges | 1.10 |
Maximum | Actual Value [Member] | |
Line of Credit Facility [Line Items] | |
EBITDA to Fixed Charges | 3.33 |
Minimum | Required Minimum Value [Member] | |
Line of Credit Facility [Line Items] | |
EBITDA to Fixed Charges | 1 |
Minimum | Actual Value [Member] | |
Line of Credit Facility [Line Items] | |
EBITDA to Fixed Charges | 1 |
Loan Agreement Narrative (Detai
Loan Agreement Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||
Bank Overdrafts | $ 5,500,000 | |
Secured Debt, Current | $ 10,823,000 | $ 14,543,000 |
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 | $ 20,000,000 | |
Interest Paid | $ 1,000,000 | $ 600,000 |
Weighted average interest rate | 3.90% | |
Letters of Credit Outstanding, Amount | $ 1,500,000 | |
Excess cash capacity | $ 10,000,000 | |
Maximum | ||
Credit Facility (Textual) [Abstract] | ||
Spread on LIBOR | 1.85% | |
Dividends restricted amount | $ 7,000,000 | |
Minimum | ||
Credit Facility (Textual) [Abstract] | ||
Spread on LIBOR | 1.50% | |
Revolving Credit Facility [Member] | ||
Credit Facility (Textual) [Abstract] | ||
Credit facility, borrowing capacity | $ 40,000,000 | |
Letter of Credit [Member] | ||
Credit Facility (Textual) [Abstract] | ||
Credit facility, borrowing capacity | 10,000,000 | |
Lawson [Member] | ||
Line of Credit Facility [Line Items] | ||
Secured Debt, Current | 9,000,000 | |
Credit Facility (Textual) [Abstract] | ||
Credit Facility, remaining borrowing capacity | 27,700,000 | |
Bolt [Member] [Member] | ||
Line of Credit Facility [Line Items] | ||
Secured Debt, Current | 2,387,000 | |
Credit Facility (Textual) [Abstract] | ||
Credit Facility, remaining borrowing capacity | $ 3,100,000 |
Reserve for Severance Activity
Reserve for Severance Activity in reserve (Details) - Employee Severance [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reserve for severance and related payments | ||
Balance at beginning of period | $ 483 | $ 1,710 |
Charged to earnings current year | 848 | 738 |
Cash paid and exchange rate variance | (972) | (1,965) |
Balance at end of the period | $ 359 | $ 483 |
Commitments and Contingencies F
Commitments and Contingencies Future minimum lease payments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Operating leases: | ||
2,017 | $ 2,574 | |
2,018 | 2,369 | |
2,019 | 2,349 | |
2,020 | 2,008 | |
2,021 | 1,130 | |
Thereafter | 374 | |
Liability | 10,804 | $ 1,200 |
Financing lease: | ||
2,017 | 1,395 | |
2,018 | 1,444 | |
2,019 | 1,493 | |
2,020 | 760 | |
2,021 | 0 | |
Thereafter | 0 | |
Total | 5,092 | |
Capital leases: | ||
2,017 | 201 | |
2,018 | 155 | |
2,019 | 91 | |
2,020 | 11 | |
2,021 | 0 | |
Thereafter | 0 | |
Total | $ 458 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)ft² | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | |||
Total rental expense | $ 3,300 | $ 2,600 | |
Total future minimum operating lease payments | $ 1,200 | 10,804 | |
Operating Leases, Future Minimum Payments Receivable, Current | $ 400 | ||
Operating Leases, Future Minimum Payments Receivable | 100 | ||
Total future minimum lease payments of McCook facility | 5,092 | ||
Property, plant and equipment, gross | 85,226 | 84,939 | |
Accumulated depreciation and amortization | 61,678 | 57,606 | |
Environmental Remediation Expense | 500 | ||
Area of Real Estate Property | ft² | 17,100 | ||
Operating Leases, Income Statement, Sublease Revenue | $ 700 | ||
Gain (Loss) on Contract Termination | 500 | ||
Gain (Loss) on Termination of Lease | $ 200 | ||
Environmental Exit Costs, Reasonably Possible Additional Loss | 1,400 | ||
Environmental Exit Costs, Assets Previously Disposed, Liability for Remediation | 1,400 | ||
Headquarters | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Total future minimum operating lease payments | 4,000 | ||
McCook facility | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Property, plant and equipment, gross | 12,961 | 12,961 | |
Accumulated depreciation and amortization | 8,500 | ||
Capital leases | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Property, plant and equipment, gross | $ 684 | 806 | |
Accumulated depreciation and amortization | $ 300 |
Retirement and Security Bonus_2
Retirement and Security Bonus Plans Retirement and Security Bonus Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
401k Employer matching contributions | $ 3 | $ 3.1 |
Defined Contribution Retirement Plan Discretionary Employer Contribution | 0.3 | 0.3 |
Employer contributions, profit sharing retirement plan | 0.7 | 0.7 |
Retirement and Security Bonus Plans | ||
Cash Surrender Value, Fair Value Disclosure | $ 5.6 | |
Security bonus plan | ||
Retirement and Security Bonus Plans | ||
Initial vesting percentage | 25.00% | |
Minimum vesting period | 5 years | |
Annual vesting percentage after initial period | 5.00% | |
Expense recognized | $ 0.6 | $ 0.5 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans Plan Administration (Details) - 2009 Equity Compensation Plan | 12 Months Ended |
Dec. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares available for grant | 96,000 |
share based compensation plan maximum share grants to non-employee directors | 20,000 |
Maximum number of shares per employee | 125,000 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans Stock Performance Rights (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Performance Rights | ||
Accrued Employee Benefits, Current | $ 13,458,000 | $ 8,712,000 |
Valuation assumptions: | ||
Allocated Share-based Compensation Expense | 100,000 | 200,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Share-based Liabilities Paid | $ 100,000 | 300,000 |
Stock Performance Rights | ||
Stock Performance Rights | ||
Weighted average estimated value of SPRs outstanding (per share) | $ 14.96 | |
Valuation assumptions: | ||
Expected volatility, minimum, percent | 36.70% | |
Expected volatility, maximum, percent | 42.70% | |
Risk-free rate of return, minimum | 2.50% | |
Risk-free rate of return, maximum | 2.60% | |
Expected annual dividend | $ 0 | |
Allocated Share-based Compensation Expense | $ 4,800,000 | $ 1,200,000 |
Number of SPRs | ||
Outstanding on December 31, 2017 | 961,554 | |
Granted | 44,737 | |
Exercised | (13,270) | |
Cancelled | (34,500) | |
Outstanding on December 31, 2018 | 958,521 | 961,554 |
Exercisable on December 31, 2018 | 848,503 | |
Weighted Average Exercise Price | ||
Outstanding on December 31, 2017 | $ 19.75 | $ 19.76 |
Granted | 24.70 | |
Exercised | 22.16 | |
Cancelled | 25.52 | |
Outstanding on December 31, 2018 | 19.75 | |
Exercisable on December 31, 2018 | $ 19.11 | |
SPRs outstanding, intrinsic value | $ 11,500,000 | |
Total unrecognized compensation cost | $ 800,000 | |
Unrecognized cost, period for recognition | 1 year 7 months 6 days | |
Exercised | 193,835 | |
Vested in period, fair value | $ 2,000,000 | |
Weighted average remaining contractual term, SPRs outstanding | 3 years 7 months 6 days | |
Weighted average remaining contractual term, SPRs exercisable | 3 years 3 months 18 days | |
Stock Performance Rights | Minimum | ||
Stock Performance Rights | ||
Life of award | 7 years | |
Award vesting period | 1 year | |
Valuation assumptions: | ||
Expected term | 1 year | |
Stock Performance Rights | Maximum | ||
Stock Performance Rights | ||
Life of award | 10 years | |
Award vesting period | 3 years | |
Valuation assumptions: | ||
Expected term | 4 years 6 months |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 0.1 | $ 0.2 |
Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding on December 31, 2017 | 104,920 | |
Granted | 82,722 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (31,776) | |
Exchanged for shares | (36,610) | |
Outstanding on December 31, 2018 | 119,256 | 104,920 |
Total unrecognized compensation cost | $ 1.5 | |
Unrecognized cost, period for recognition | 1 year 3 months 24 days | |
Granted | $ 24.33 | |
2009 Equity Compensation Plan | Restricted stock awards | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
2009 Equity Compensation Plan | Restricted stock awards | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Selling, general and administrative expenses | Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 1.4 | $ 0.9 |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans Market Stock Units (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
MSU Expense | $ 1,200,000 | $ 900,000 |
Number of Market Stock Units | ||
Outstanding on December 31, 2017 | 221,936 | |
Granted | 32,194 | |
Exchanged for stock (1) | (60,995) | |
Outstanding on December 31, 2018 | 193,135 | 221,936 |
Maximum Shares Potentially Issuable | ||
Outstanding on December 31, 2017 | 332,904 | |
Granted | 48,292 | |
Exchanged for stock (1) | (46,799) | |
Outstanding on December 31, 2018 | 279,542 | 332,904 |
Common shares issued in exchanged for MSUs | 46,799 | |
MSU Shares Maximum vs Earned | 0 | |
MSU Potential Common Shares Issuable Change | (54,855) | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Shares From MSU Vest | $ 0 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Shares From MSU Vest | $ 1.50 | |
Trading days | 60 days |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options | 83,471 | 84,476 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (1,005) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 14.04 | |
Allocated Share-based Compensation Expense | $ 0.1 | $ 0.2 |
Weighted Average Exercise Price | ||
Outstanding on December 31, 2014 | $ 26.98 | |
Outstanding on December 31, 2015 | $ 27.14 | $ 26.98 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 0.2 |
Segment Information Segment (De
Segment Information Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 349,637,000 | $ 305,907,000 |
Gross Profit | 189,540,000 | 183,018,000 |
Operating Income (Loss) | 9,210,000 | 9,936,000 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | 0 | 5,422,000 |
Interest Expense | (1,009,000) | (622,000) |
Other Nonoperating Income (Expense) | (1,338,000) | 780,000 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 6,863,000 | 10,094,000 |
Payments to Acquire Property, Plant, and Equipment | 2,524,000 | 1,256,000 |
Depreciation, Depletion and Amortization | 6,855,000 | 6,770,000 |
Assets | 197,142,000 | 191,111,000 |
Notes Receivable, Related Parties | (8,141,000) | (8,832,000) |
Lawson [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 313,095,000 | 297,953,000 |
Gross Profit | 175,517,000 | 179,578,000 |
Operating Income (Loss) | 7,500,000 | 4,164,000 |
Payments to Acquire Property, Plant, and Equipment | 1,907,000 | 1,251,000 |
Depreciation, Depletion and Amortization | 6,008,000 | 6,280,000 |
Assets | 169,216,000 | 161,520,000 |
Bolt [Member] [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 36,542,000 | 7,954,000 |
Gross Profit | 14,023,000 | 3,440,000 |
Operating Income (Loss) | 1,710,000 | 350,000 |
Payments to Acquire Property, Plant, and Equipment | 617,000 | 5,000 |
Depreciation, Depletion and Amortization | 847,000 | 490,000 |
Assets | $ 36,067,000 | $ 38,423,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Interest Expense | $ 1,009,000 | $ 622,000 |
Net sales | 349,637,000 | 305,907,000 |
Gross Profit | 189,540,000 | 183,018,000 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | 0 | 5,422,000 |
Operating Income (Loss) | 9,210,000 | 9,936,000 |
Long-Lived Assets | 57,046,000 | 59,008,000 |
Other Nonoperating Income (Expense) | (1,338,000) | 780,000 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 6,863,000 | 10,094,000 |
Payments to Acquire Property, Plant, and Equipment | 2,524,000 | 1,256,000 |
Depreciation, Depletion and Amortization | 6,855,000 | 6,770,000 |
Assets | 197,142,000 | 191,111,000 |
Notes Receivable, Related Parties | (8,141,000) | (8,832,000) |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 279,917,000 | 266,994,000 |
Long-Lived Assets | 25,539,000 | 24,686,000 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 69,720,000 | 38,913,000 |
Long-Lived Assets | 31,507,000 | 34,322,000 |
Lawson [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 313,095,000 | 297,953,000 |
Gross Profit | 175,517,000 | 179,578,000 |
Operating Income (Loss) | 7,500,000 | 4,164,000 |
Payments to Acquire Property, Plant, and Equipment | 1,907,000 | 1,251,000 |
Depreciation, Depletion and Amortization | 6,008,000 | 6,280,000 |
Assets | 169,216,000 | 161,520,000 |
Bolt [Member] [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 36,542,000 | 7,954,000 |
Gross Profit | 14,023,000 | 3,440,000 |
Operating Income (Loss) | 1,710,000 | 350,000 |
Payments to Acquire Property, Plant, and Equipment | 617,000 | 5,000 |
Depreciation, Depletion and Amortization | 847,000 | 490,000 |
Assets | $ 36,067,000 | $ 38,423,000 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for doubtful accounts: | ||
The roll forward of valuation accounts were as follows: | ||
Balance at beginning of period | $ 476 | $ 454 |
Charged to costs and expenses | 695 | 499 |
Deductions | (622) | (477) |
Balance at end of period | 549 | 476 |
Valuation allowance for deferred tax assets: | ||
The roll forward of valuation accounts were as follows: | ||
Balance at beginning of period | 2,556 | 35,416 |
Charged to costs and expenses | 13 | (32,860) |
Deductions | 0 | 0 |
Balance at end of period | $ 2,569 | $ 2,556 |
Uncategorized Items - laws-2018
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 11,221,000 |