Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 0-10546 | ||
Entity Registrant Name | LAWSON PRODUCTS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-2229304 | ||
Entity Address, Address Line One | 8770 W. Bryn Mawr Avenue | ||
Entity Address, Address Line Two | Suite 900 | ||
Entity Address, City or Town | Chicago | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60631 | ||
City Area Code | 773 | ||
Local Phone Number | 304-5050 | ||
Title of 12(b) Security | Common Stock, $1.00 par value | ||
Trading Symbol | LAWS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 141,259,000 | ||
Entity Common Stock, Shares Outstanding | 9,061,039 | ||
Documents Incorporated by Reference | The following documents are incorporated into this Form 10-K by reference: Part III incorporates information by reference to the registrant’s definitive proxy statement, to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year. | ||
Entity Central Index Key | 0000703604 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 28,393 | $ 5,495 |
Restricted cash | 998 | 802 |
Accounts receivable, less allowance for doubtful accounts of $654 and $593, respectively | 44,515 | 38,843 |
Inventories, net | 61,867 | 55,905 |
Miscellaneous receivables and prepaid expenses | 7,289 | 5,377 |
Total current assets | 143,062 | 106,422 |
Property, plant and equipment, less accumulated depreciation and amortization | 15,800 | 16,546 |
Deferred income taxes | 18,482 | 21,711 |
Goodwill | 35,176 | 20,923 |
Cash value of life insurance | 16,185 | 14,969 |
Intangible assets, net | 18,503 | 12,335 |
Right of use assets | 8,764 | 11,246 |
Other assets | 332 | 277 |
Total assets | 256,304 | 204,429 |
Current liabilities: | ||
Accrued acquisition liability | 32,673 | 0 |
Accounts payable | 22,262 | 13,789 |
Lease obligation | 4,568 | 3,830 |
Accrued expenses and other liabilities | 38,492 | 39,311 |
Total current liabilities | 97,995 | 56,930 |
Revolving line of credit | 0 | 2,271 |
Security bonus plan | 11,262 | 11,840 |
Lease obligation | 5,738 | 9,504 |
Deferred compensation | 10,461 | 6,370 |
Deferred tax liability | 2,841 | 6,188 |
Other liabilities | 5,585 | 3,325 |
Total liabilities | 133,882 | 96,428 |
Commitments and contingencies – Note 16 | ||
Stockholders’ equity: | ||
Preferred stock, $1 par value: Authorized - 500,000 shares, issued and outstanding - None | 0 | 0 |
Common stock, $1 par value: Authorized - 35,000,000 shares Issued – 9,287,625 and 9,190,171 shares, respectively Outstanding – 9,061,039 and 9,043,771 shares, respectively | 9,288 | 9,190 |
Capital in excess of par value | 19,841 | 18,077 |
Retained earnings | 101,609 | 86,496 |
Treasury stock – 226,586 and 146,400 shares held, respectively | (9,015) | (5,761) |
Accumulated other comprehensive income (loss) | 699 | (1) |
Total stockholders’ equity | 122,422 | 108,001 |
Total liabilities and stockholders’ equity | $ 256,304 | $ 204,429 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, less allowance for doubtful accounts | $ 654 | $ 593 |
Preferred stock, par value in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 9,287,625 | 9,190,171 |
Common stock, shares outstanding (in shares) | 9,061,039 | 9,043,771 |
Treasury stock (in shares) | 226,586 | 146,400 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 351,591 | $ 370,785 |
Cost of goods sold | 165,053 | 173,431 |
Gross profit | 186,538 | 197,354 |
Operating expenses: | ||
Selling expenses | 76,775 | 85,342 |
General and administrative expenses | 89,213 | 102,946 |
Operating expenses | 165,988 | 188,288 |
Operating income | 20,550 | 9,066 |
Interest expense | (654) | (603) |
Other income, net | 889 | 1,211 |
Income before income taxes | (20,785) | (9,674) |
Income tax expense | 5,672 | 2,453 |
Net income | $ 15,113 | $ 7,221 |
Basic income per share of common stock (in USD per share) | $ 1.68 | $ 0.81 |
Diluted income per share of common stock (in USD per share) | $ 1.62 | $ 0.77 |
Weighted average shares outstanding: | ||
Basic weighted average shares outstanding (in shares) | 9,020 | 8,968 |
Effect of dilutive securities outstanding (in shares) | 311 | 408 |
Diluted weighted average shares outstanding (in shares) | 9,331 | 9,376 |
Comprehensive income | ||
Net income | $ 15,113 | $ 7,221 |
Other comprehensive income, net of tax: | ||
Adjustment for foreign currency translation | 700 | 1,559 |
Comprehensive income | $ 15,813 | $ 8,780 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | [1] | Common Stock | Capital in Excess of Par Value | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | [1] | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Common stock, par value (in USD per share) | $ 1 | |||||||||
Balance at beginning of year (in shares) at Dec. 31, 2018 | 8,955,930 | |||||||||
Balance at beginning of year at Dec. 31, 2018 | $ 99,173 | $ 1,937 | $ 9,006 | $ 15,623 | $ 77,338 | $ 1,937 | $ (1,234) | $ (1,560) | ||
Net income | 7,221 | 7,221 | ||||||||
Adjustment for foreign currency translation | 1,559 | 1,559 | ||||||||
Stock-based compensation | 2,638 | 2,638 | ||||||||
Shares issued (in shares) | 184,455 | |||||||||
Shares issued | $ 0 | $ 184 | (184) | |||||||
Shares repurchased held in treasury (in shares) | (32,362) | (96,614) | ||||||||
Shares repurchased held in treasury | $ (4,527) | (4,527) | ||||||||
Balance at end of year (in shares) at Dec. 31, 2019 | 9,190,171 | 9,043,771 | ||||||||
Balance at end of year at Dec. 31, 2019 | $ 108,001 | $ 9,190 | 18,077 | 86,496 | (5,761) | (1) | ||||
Common stock, par value (in USD per share) | $ 1 | |||||||||
Net income | $ 15,113 | 15,113 | ||||||||
Adjustment for foreign currency translation | 700 | 700 | ||||||||
Stock-based compensation | 1,847 | 1,847 | ||||||||
Shares issued (in shares) | 97,454 | |||||||||
Shares issued | $ 15 | $ 98 | (83) | |||||||
Shares repurchased held in treasury (in shares) | (47,504) | (80,186) | ||||||||
Shares repurchased held in treasury | $ (3,254) | (3,254) | ||||||||
Balance at end of year (in shares) at Dec. 31, 2020 | 9,287,625 | 9,061,039 | ||||||||
Balance at end of year at Dec. 31, 2020 | $ 122,422 | $ 9,288 | $ 19,841 | $ 101,609 | $ (9,015) | $ 699 | ||||
Common stock, par value (in USD per share) | $ 1 | |||||||||
[1] | The Company adopted the ASC No.842, Leases (ASC 842) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | ||
Net income | $ 15,113 | $ 7,221 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | (6,701) | (5,893) |
Stock-based compensation | (1,479) | (4,054) |
Deferred income taxes | (167) | 2,169 |
Goodwill impairment | 1,918 | 0 |
Changes in operating assets and liabilities, net of effect of acquired businesses: | ||
Accounts receivable | 1,762 | (1,380) |
Inventories | 2,100 | (2,308) |
Miscellaneous receivables, prepaid expenses and other assets | (2,899) | (3,890) |
Accounts payable and other liabilities | (5,788) | 3,230 |
Other | 733 | 667 |
Net cash provided by operating activities | 32,528 | 9,196 |
Investing activities | ||
Purchases of property, plant and equipment | (1,687) | (2,028) |
Business acquisition, net of acquired cash | (2,300) | 0 |
Net cash used in investing activities | (3,987) | (2,028) |
Financing activities | ||
Net payments on revolving lines of credit | (2,271) | (8,552) |
Shares repurchased held in treasury | (3,254) | (4,527) |
Payment of financing fees | 0 | (573) |
Payment of financing lease principal | (257) | (271) |
Proceeds from stock option exercises | 15 | 33 |
Net cash used in financing activities | (5,767) | (13,890) |
Effect of exchange rate changes on cash and cash equivalents | 320 | 336 |
Increase (decrease) in cash and cash equivalents and restricted cash | 23,094 | (6,386) |
Cash, cash equivalents and restricted cash at beginning of year | 6,297 | 12,683 |
Cash, cash equivalents and restricted cash at end of year | 29,391 | 6,297 |
Total cash, cash equivalents and restricted cash | 29,391 | 12,683 |
Supplemental disclosure of cash flow information | ||
Net noncash financing liability related to acquisition | (32,673) | 0 |
Net cash paid for income taxes | 5,377 | 947 |
Net cash paid for interest | $ 398 | $ 590 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
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 reportable segments. The Lawson reportable segment distributes MRO products to customers primarily through a network of sales representatives offering vendor managed inventory ("VMI") servic e to customers throughout the United States and Canada. The Bolt reportable segment distributes MRO products primarily through its 14 bran ches located in Western Canada. On August 31, 2020, the Company acquired Partsmaster, a distributor of MRO products. Partsmaster is included in the Lawson reportable segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
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. 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. The Company also operates as a lessor and recognizes lease revenue on a straight-line basis over the life of each lease. The Company has adopted the practical expedient not to separate the non-lease components that would be within the scope of ASC 606 from the associated lease component as the relevant criteria under ASC 842 are met. 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, 2020 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. Inventories — Inventories principally consist of finished goods stated at the lower of cost or net realizable value using the first-in-first-out method for the Lawson segment and weighted average for the Bolt segment as well as Partsmaster. 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 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 $4.4 million and $3.9 million for 2020 and 2019 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 $0.6 million for 2020 and 2019 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. On August 31, 2020, the Company acquired Partsmaster from NCH Corporation, and assumed certain liabilities, including non-qualified deferred compensation plans related to Partsmaster employees. Effective December 31, 2020, Lawson accepted sponsorship of the portions of the non-qualified plans related to Partsmaster employees. The plans were frozen effective January 1, 2021. 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 in which they occur. Goodwill — The Company had $35.2 million and $20.9 million of goodwill in 2020 and 2019, 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 as reviewed by the Company’s segment managers. The Company has four reporting units; Lawson MRO, Bolt, Screw Products, and Partsmaster. The Company reviews goodwill 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. 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. During the first and second quarter of fiscal 2020, the Company identified a triggering event due to adverse changes in the business climate related to COVID-19. As a result, the Company performed interim quantitative impairment tests as of March 31, 2020 and June 30, 2020 on the goodwill in its Bolt reporting unit, which is also the Bolt reportable segment. The Company compared the estimated fair value using the income approach and the market approach of the reporting unit with its estimated book value. Based on the evaluation performed, the Company determined that goodwill was not impaired as the fair value of the reporting unit exceeded its respective carrying amounts. The income approach calculations are dependent on several subjective factors including forecasts of future revenue and earnings and the discount rate. The market approach is based on financial multiples of comparable companies. After reviewing the financial performance of the reporting units compared to our projected results, as well as macroeconomic conditions as a whole including the effect of the COVD-19 pandemic, we determined that it is more likely than not that the fair value of the goodwill generated by the acquisition of Screw Products, which reporting unit is a part of the Lawson reportable segment, had been impaired. As a result, we performed a quantitative impairment test as of December 1, 2020. The Company bases its measurement of the fair value of the reporting unit using the income approach. The income approach calculations are dependent on several subjective factors, including forecasts of future revenue and earnings and the discount rate. Related to the Lawson MRO, Bolt, and Partsmaster reporting units, the Company performed a qualitative assessment as of December 1, 2020 and determined that it was more likely than not the fair value of the reporting units exceeded the carrying value of the reporting units. Intangible Assets — The Company's intangible assets consist of trade names, and customer relationships. Intangible assets are amortized over a weighted aver age of 12 and 11 year estimated useful lives for trade names and customer relationships, respectively. The Company amortizes trade name intangible assets on a straight-line basis and customer relationship intangible assets on a basis consistent with their estimated economic benefit. 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. No impairments occurred in 2019 or 2020. 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. 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 financing leases at commencement. For both classes of leases, a Right Of Use ("ROU") asset and corresponding lease liability are recognized at commencement. Operating leases consist of the company headquarters, distribution centers, and Bolt branches. Financing leases consist of equipment such as forklifts and copiers. The value of the lease assets and liabilities are the present value of the total cash payments for each lease. The Company uses its incremental borrowing rate to discount the total cash payments to present value for each lease. The Company will review each lease to determine if there is a more appropriate discount rate to apply. Upon commencement, rent expense is recognized on a straight line basis for each operating lease. Each financing lease ROU asset is amortized on a straight line basis over the lease period. Prior to acquisition, Partsmaster participated in a leasing program where they actively leased parts washer machines to customers. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. 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, 2020 and December 31, 2019 no options to purchase shares of common stock were excluded from the computation of diluted earnings per share because all of the options were in the money. 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 foreign 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 repurchas ed 47,504 and 32,362 of its common stock in 2020 and 2019, respectively, th rough its previously announced stock repurchase plan. The Company repurc hased 32,682 an d 64,252 shares of its common stock i n 2020 an d 2019, 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 cost of the common stock repurchased and held in treasury wa s $3.3 million and $4.5 million in 2020 and 2019, 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. Recent Accounting Pronouncements 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 smaller reporting companies in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and the new guidance will be applied on a prospective basis. The Company is still evaluating the effect the adoption of the new standard will have on its financial statements. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On August 31, 2020, the Company acquired Partsmaster from NCH Corporation. Partsmaster is a leading maintenance, MRO solutions provider that serves approximately 16,000 customers with approximately 200 sales representatives. The acquisition was made primarily to expand the Company's sales coverage, expand product lines, add experienced sales representatives, and leverage the Company's infrastructure. The purchase price was $35.3 million in cash plus the assumption of certain liabilities. The Company paid $2.3 million of the purchase price in cash at closing and will pay the remaining $33.0 million in May 2021. The payment obligation has been discounted to its present value and was recognized as an accrued acquisition liability of $32.4 million at the time of acquisition. As of December 31, 2020, the discounted present value of the $33.0 million due in May 2021 is $32.7 million and is recorded in the Company's consolidated balance sheet as an accrued acquisition liability. P ayment has been guaranteed under the Purchase Agreement, and includes the issuance of a $33.0 million irrevocable standby letter of credit. The Company will satisfy the payment obligation with cash on hand with any remaining portion using its existing credit facility. The purchase price of the acquisition was allocated to the fair value of Partsmasters' assets and liabilities on the acquisition date. The fair market value appraisals of the majority of the assets and liabilities was determined by a third party valuation firm using management estimates and assumptions including intangible assets of $5.0 million for customer relationships and $2.8 million for trade names, and their estimated useful lives of 10 and 5 years, respectively. The $15.8 million allocated to goodwill reflects the purchase price less the fair market value of the identifiable net assets. The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after Lawson's acquisition of Partsmaster. The entire amount of goodwill is expected to be deductible for tax purposes. The appropriate fair values of the assets acquired and liabilities assumed are based on estimates and assumptions. The Company continues to review preliminary estimates of various assets and liabilities including, but not limited to, pre-acquisition employee compensation liabilities and potential adjustments of certain accounts receivable balances as defined under the purchase agreement. These preliminary estimates and assumptions could change during the purchase price measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed. The Company recorded the fair value of accounts receivable after consideration of an estimate of cash flows not expected to be collected which was $0.4 million. Partsmaster contributed $22.6 million of revenue and $0.8 million of operating income in the four months of 2020 post-acquisition. A summary of the initial purchase price allocation of the acquisition is as follows (Dollars in thousands): Cash paid and payable and liabilities assumed Cash paid and payable $ 34,523 Accounts payable and accrued expenses 4,086 Lease obligation 620 Deferred compensation 2,938 $ 42,167 Fair value of assets acquired Goodwill $ 15,816 Inventories 7,797 Accounts receivable 7,706 Customer relationships 4,961 Trade names 2,775 Property, plant and equipment 2,121 Right of use asset 620 Other assets 371 $ 42,167 The following table contains unaudited pro forma revenue and net income for Lawson Products assuming the Partsmaster acquisition closed on January 1, 2019. (Unaudited) Pro Forma Year Ended December 31, 2020 2019 Revenue 396,679 435,486 Net Income 16,535 7,277 The pro forma disclosures in the table above include adjustments for amortization of intangible assets, implied interest expense and acquisition costs to reflect results as if the acquisition of Partsmaster had closed on January 1, 2019 rather than on the actual acquisition date. This pro forma information utilizes certain estimates, is presented for illustrative purposes only and is not intended to be indicative of the actual results of operation. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future positive or negative events that may occur after the acquisition, such as anticipated cost savings from operating synergies. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition As part of the Company's revenue recognition analysis, it concluded that it has two separate performance obligations, and accordingly, two separate revenue streams: products and services. Under the definition of a contract as defined by ASC 606, 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. 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, including the Partsmaster acquisition, 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. In previous financial statements, the Company presented the disaggregated components of total revenue: product revenue and service revenue, along with the cost of sales associated with each of these revenue streams as the service revenues exceeded 10% of consolidated sales. Since the Company qualifies as a smaller reporting company, the Company has elected to discontinue disclosure of the disaggregated components of revenue and cost of sales in its consolidated statements of income and comprehensive income and in the related notes to the consolidated financial statements. For the twelve months ended December 31, 2019, service revenue of $40.1 million was reported as service revenue which have now been combined as reported within total revenue. Disaggregated revenue by product type follows: Unaudited Year Ended December 31, Product Category 2020 2019 Fastening systems 22% 24% Cutting tools and abrasives 14% 13% Fluid power 13% 15% Specialty chemicals 11% 11% Electrical 10% 11% Aftermarket automotive supplies 7% 8% Safety 6% 5% Welding and metal repair 2% 2% Other 15% 11% 100% 100% Lawson as Lessor Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $0.9 million of revenue in 2020 post-acquisition. The Company has adopted the practical expedient not to separate the non-lease components that would be within the scope of ASC 606 from the associated lease component as the relevant criteria under ASC 842 are met. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Cash [Abstract] | |
Restricted Cash | 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 has also agreed to maintain $0.2 million in a guaranteed investment certificate as collateral for an outside party that is providing certain commercial credit card services for Bolt. The Company is restricted from withdrawing this balance without the prior consent of the outside party during the term of the agreement. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) December 31, 2020 2019 Inventories, gross $ 67,137 $ 60,500 Reserve for obsolete and excess inventory (5,270) (4,595) Inventories, net $ 61,867 $ 55,905 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Land $ 2,650 $ 2,625 Buildings and improvements 15,765 15,356 Machinery and equipment 26,814 24,509 Capitalized software 23,013 22,136 Furniture and fixtures 5,725 5,673 Vehicles 151 155 Construction in progress 752 683 74,870 71,137 Accumulated depreciation and amortization (59,070) (54,591) $ 15,800 $ 16,546 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill activity related to acquisitions is included in the table below: (Dollars in Thousands) Goodwill By Reportable Segment Lawson Bolt Total Beginning balance January 1, 2019 $ 7,174 $ 12,905 $ 20,079 Impact of foreign exchange 205 649 854 Adjustment to prior year allocation (10) — (10) Balance at December 31, 2019 7,369 $ 13,554 20,923 Impact of foreign exchange 85 270 355 Acquisition (1) 15,816 — 15,816 Impairment (2) (1,918) — (1,918) Balance at December 31, 2020 $ 21,352 $ 13,824 $ 35,176 (1) The $15.8 million addition to goodwill in 2020 was due to the preliminary allocation of the purchase price to acquire Partsmaster. (2) The Company performed a quantitative goodwill impairment analysis as of December 1, 2020 for the Screw Products reporting unit. The Company engaged a third party valuation firm to determine the value of the Screw Products reporting unit, and determined that the carrying value of the net assets exceeded the fair value of the reporting unit, and accordingly, recognized an impairment charge of $1.9 million. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible assets | Intangible assets The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 11,289 $ (2,733) $ 8,556 $ 8,422 $ (2,020) $ 6,402 Customer relationships 12,349 (2,402) 9,947 7,337 (1,404) 5,933 $ 23,638 $ (5,135) $ 18,503 $ 15,759 $ (3,424) $ 12,335 Amortization expense of $1.7 million and $1.3 million related to intangible assets was recorded in General and administrative expenses for 2020 and 2019 , respectively. The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2021 $ 2,662 2022 2,457 2023 2,343 2024 2,247 2025 1,983 Thereafter 6,811 $ 18,503 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income from operations before income taxes consisted of the following: (Dollars in thousands) Year Ended December 31, 2020 2019 United States $ 16,226 $ 5,418 Canada 4,559 4,256 $ 20,785 $ 9,674 Provision (benefit) for income taxes from operations for the years ended December 31, consisted of the following: (Dollars in thousands) Year Ended December 31, 2020 2019 Current income tax expense: U.S. federal $ 3,858 $ — U.S. state 710 136 Canada 1,288 291 Total $ 5,856 $ 427 Deferred income tax expense (benefit): U.S. federal $ 236 $ 2,012 U.S. state 52 303 Canada (472) (289) Total $ (184) $ 2,026 Total income tax expense (benefit): U.S. federal $ 4,094 $ 2,012 U.S. state 762 439 Canada 816 2 Total $ 5,672 $ 2,453 The reconciliation between the effective income tax rates and the statutory federal rates for operations are as follows: Year Ended December 31, 2020 2019 Statutory Federal rate 21.0 % 21.0 % Increase (decrease) resulting from: Change in valuation allowance - current period activity (2.2) (4.5) Change in valuation allowance - reversal — (13.6) Capital loss — 13.6 Stock compensation (2.0) (11.5) Compensation deduction limitation 1.5 10.1 State and local taxes, net 3.8 4.5 Foreign income inclusion — 3.1 Meals & entertainment 0.6 1.8 Change in uncertain tax positions 4.6 (1.0) Provision to return differences (0.1) 0.2 Other items, net 0.1 1.7 Provision for income taxes 27.3 % 25.4 % At December 31, 2020, the Company had $7.2 million of U.S. federal net operating loss carryforwards which are subject to expiration beginning in 2030 and $7.7 million of various state net operating loss carryforwards which expire at varying dates through 2034. Certain valuation allowances pertaining to the deferred tax assets related to our Canadian operations remain as of December 31, 2020. Lawson's Canadian operations have recently moved into a three-year cumulative income position. Based on the history of our Canadian operations and their multi-year pre-tax losses through 2018, the Company does not believe there is sufficient positive evidence at this time to consider reversing the $1.2 million valuation allowance. While forecasts may show future positive pre-tax income, future projected income is the least objective of the positive sources of evidence as the projections are inherently subjective and not yet demonstrated. The uncertainty of the continuing pandemic may further affect our Canadian business. Based on this, the Company will maintain its valuation allowances related to Canada as of December 31, 2020. The Company will continue to monitor all positive and negative evidence regarding the Canadian operations and will re-assess our position on a regular basis. As a result of acquisitions completed in recent years, the Company recorded $35.2 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, 2020 2019 Deferred tax assets: Net operating loss carryforward $ 5,431 $ 7,786 Compensation and benefits 10,980 9,947 Inventory reserve 1,772 1,589 Accounts receivable reserve 167 152 Leased assets 1,061 3,326 Other 329 146 Total deferred tax assets 19,740 22,946 Deferred tax liabilities: Intangible assets 1,948 2,360 Lease liabilities 1,366 2,850 Property, plant and equipment (975) 353 Other 503 625 Total deferred liabilities 2,842 6,188 Net deferred tax assets before valuation allowance 16,898 16,758 Valuation allowance (1,257) (1,235) Net deferred tax assets $ 15,641 $ 15,523 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (Dollars in thousands) December 31, 2020 2019 Balance at beginning of year $ 3,242 $ 3,612 Additions for tax positions of current year 15 13 Additions for tax positions of prior years 1,413 121 Reductions for tax positions of prior year — (29) Lapse of statute of limitations (984) (475) Balance at end of year $ 3,686 $ 3,242 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, 2020 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. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Accrued stock-based compensation (stock performance rights) $ 14,437 $ 14,908 Accrued compensation 9,794 9,238 Accrued and withheld taxes, other than income taxes 3,788 4,387 Accrued profit sharing 240 916 Accrued severance 1,103 778 Deferred revenue 822 648 Accrued health benefits 732 578 Other 7,576 7,858 $ 38,492 $ 39,311 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases 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 expenses and income generated by the leasing activity of Lawson as lessee for the years ended December 31, 2020 and December 31, 2019 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type Classification 2020 2019 Consolidated Operating Lease Expense (1) Operating expenses $ 4,999 $ 4,729 Consolidated Financing Lease Amortization Operating expenses 226 206 Consolidated Financing Lease Interest Interest expense 28 30 Consolidated Financing Lease Expense 254 236 Sublease Income (2) Operating expenses — (160) Net Lease Cost $ 5,253 $ 4,805 (1) Includes short term lease expense, which is immaterial (2) Sublease income from sublease of a portion of the Company headquarters. The sublease was terminated in June 2019 and the Company has no other subleases The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type 2020 2019 Total ROU operating lease assets (1) $ 8,246 $ 10,592 Total ROU financing lease assets (2) 518 654 Total lease assets $ 8,764 $ 11,246 Total current operating lease obligation $ 4,360 $ 3,591 Total current financing lease obligation 208 239 Total current lease obligations $ 4,568 $ 3,830 Total long term operating lease obligation $ 5,498 $ 9,133 Total long term financing lease obligation 240 371 Total long term lease obligation $ 5,738 $ 9,504 (1) Operating lease assets are recorded net of accumulated amortization of $5.9 million and $1.2 million as of December 31, 2020 and December 31, 2019, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.4 million and $0.2 million as of December 31, 2020 and December 31, 2019, respectively The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2020 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2021 $ 4,719 $ 219 $ 4,938 2022 3,212 143 3,355 2023 1,471 89 1,560 2024 509 25 534 2025 168 — 168 Thereafter 462 — 462 Total lease payments 10,541 476 11,017 Less: Interest 683 28 711 Present value of lease liabilities $ 9,858 $ 448 $ 10,306 (1) Of the $10.5 million future minimum operating lease commitments outstanding at December 31, 2020, $2.2 million relates to a lease for the Company's headquarters which expires in March 2023 (2) The Company has an operating lease for the McCook Facility which expires in June 2022 and includes future minimum lease payments of $2.6 million The weighted average lease terms and interest rates of the leases held by Lawson as of December 31, 2020 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 2.9 5.2% Financing Leases 2.5 5.3% The cash outflows of the leasing activity of Lawson as lessee for the year ending December 31, 2020 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 4,256 Operating cash flows from financing leases Operating activities 28 Financing cash flows from financing leases Financing activities 257 McCook Lease Adjustment Subsequent to the adoption of ASC 842 in 2019 the Company recorded a non-cash transaction to establish $1.7 million of operating ROU assets, for which $1.7 million of operating lease liabilities were incurred. Also, in 2019 the Company recorded a non-cash transaction to establish $0.4 million of financing ROU assets, for which $0.4 million of financing lease liabilities were incurred. Lawson as Lessor |
Leases | Leases 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 expenses and income generated by the leasing activity of Lawson as lessee for the years ended December 31, 2020 and December 31, 2019 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type Classification 2020 2019 Consolidated Operating Lease Expense (1) Operating expenses $ 4,999 $ 4,729 Consolidated Financing Lease Amortization Operating expenses 226 206 Consolidated Financing Lease Interest Interest expense 28 30 Consolidated Financing Lease Expense 254 236 Sublease Income (2) Operating expenses — (160) Net Lease Cost $ 5,253 $ 4,805 (1) Includes short term lease expense, which is immaterial (2) Sublease income from sublease of a portion of the Company headquarters. The sublease was terminated in June 2019 and the Company has no other subleases The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type 2020 2019 Total ROU operating lease assets (1) $ 8,246 $ 10,592 Total ROU financing lease assets (2) 518 654 Total lease assets $ 8,764 $ 11,246 Total current operating lease obligation $ 4,360 $ 3,591 Total current financing lease obligation 208 239 Total current lease obligations $ 4,568 $ 3,830 Total long term operating lease obligation $ 5,498 $ 9,133 Total long term financing lease obligation 240 371 Total long term lease obligation $ 5,738 $ 9,504 (1) Operating lease assets are recorded net of accumulated amortization of $5.9 million and $1.2 million as of December 31, 2020 and December 31, 2019, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.4 million and $0.2 million as of December 31, 2020 and December 31, 2019, respectively The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2020 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2021 $ 4,719 $ 219 $ 4,938 2022 3,212 143 3,355 2023 1,471 89 1,560 2024 509 25 534 2025 168 — 168 Thereafter 462 — 462 Total lease payments 10,541 476 11,017 Less: Interest 683 28 711 Present value of lease liabilities $ 9,858 $ 448 $ 10,306 (1) Of the $10.5 million future minimum operating lease commitments outstanding at December 31, 2020, $2.2 million relates to a lease for the Company's headquarters which expires in March 2023 (2) The Company has an operating lease for the McCook Facility which expires in June 2022 and includes future minimum lease payments of $2.6 million The weighted average lease terms and interest rates of the leases held by Lawson as of December 31, 2020 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 2.9 5.2% Financing Leases 2.5 5.3% The cash outflows of the leasing activity of Lawson as lessee for the year ending December 31, 2020 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 4,256 Operating cash flows from financing leases Operating activities 28 Financing cash flows from financing leases Financing activities 257 McCook Lease Adjustment Subsequent to the adoption of ASC 842 in 2019 the Company recorded a non-cash transaction to establish $1.7 million of operating ROU assets, for which $1.7 million of operating lease liabilities were incurred. Also, in 2019 the Company recorded a non-cash transaction to establish $0.4 million of financing ROU assets, for which $0.4 million of financing lease liabilities were incurred. Lawson as Lessor Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $0.9 million of revenue in 2020 post-acquisition. The Company has adopted the practical expedient not to separate non-lease components that would be within the scope of ASC 606 from the associated lease components as the relevant criteria under ASC 842 are met. |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement In October, 2019, the Company entered into a Credit Agreement (the "Credit Agreement") with J.P. Morgan Chase Bank, N.A. as administrative agent, and including CIBC Bank USA and Bank of America, N.A. as other lenders. The Credit Agreement matures on October 11, 2024 and provides for $100.0 million of revolving commitments. The Credit Agreement allows borrowing capacity to increase to $150.0 million subject to meeting certain criteria and additional commitments from its lenders. The Credit Agreement consists of borrowings as alternate base rate loans, Canadian prime rate loans, Eurodollar loans, and Canadian dollar offered rate loans as the Company requests. The applicable interest rate spread is determined by the type of borrowing used and the Total Net Leverage Ratio as of the most recent fiscal quarter as defined in the Credit Agreement. The covenants associated with the Credit Agreement restrict the ability of the Company to, among other things: incur additional indebtedness and liens, make certain investments, merge or consolidate, engage in certain transactions such as the disposition of assets and sales-leaseback transactions, and make certain restricted cash payments such as dividends in excess of defined amounts contained within the Credit Agreement. In addition to these items and other customary terms and conditions, the Credit Agreement requires the Company to comply with certain financial covenants as follows: a) The Company is required to maintain an EBITDA to Fixed Charge Coverage Ratio of at least 1.15 to 1.00 for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter; and b) The Company is required to maintain a Total Net Leverage Ratio of no more than 3.25 to 1.00 on the last day of any fiscal quarter. The maximum Total Net Leverage Ratio will be allowed to increase to 3.75 to 1.00 after certain permitted acquisitions. The Credit Agreement also includes events of default for, among others, non-payment of obligations under the Credit Agreement, change of control, cross default to other indebtedness in an aggregate amount in excess of $5.0 million, failure to comply with covenants, and insolvency. At December 31, 2020, the Company had no outstanding balances under its revolving line of credit facility and additional borrowing availability of $66.0 million. The carrying amount of the Company’s debt at December 31, 2020 approximates its fair value. The weighted average interest rate was 2.65% in 2020. The Company had $34.0 million of outstanding letters of credit as of December 31, 2020 primarily related to the acquisition of Partsmaster. In addition to other customary representations, warranties and covenants, the results of the financial covenants are provided below: Quarterly Financial Covenants Requirement Actual EBITDA to fixed charges ratio 1.15 : 1.00 4.77 : 1.00 Total net leverage ratio 3.25 : 1.00 0.60 : 1.00 The Company was in compliance with all financial covenants as of December 31, 2020. |
Accrued Acquisition Liability
Accrued Acquisition Liability | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Accrued Acquisition Liability | Accrued Acquisition LiabilityOn August 31, 2020, Lawson acquired Partsmaster from NCH Corporation. As part of the purchase price the Company agreed to pay $33.0 million in May 2021. The payment obligation has been discounted to its present value using an implied interest rate of 1.8% and is recognized as a current liability of $32.7 million in the Company's consolidated balance sheet. Payment has been guaranteed under the Purchase Agreement which includes the issuance of a $33.0 million irrevocable standby letter of credit. The accrued acquisition liability is included as outstanding debt in the quarterly financial covenants. See Note 13 - Credit Agreement for further details. |
Reserve for Severance
Reserve for Severance | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Beginning balance $ 909 $ 359 Charged to earnings 2,077 1,756 Cash paid (1,735) (1,206) Ending balance $ 1,251 $ 909 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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. |
Retirement and Security Bonus P
Retirement and Security Bonus Plans | 12 Months Ended |
Dec. 31, 2020 | |
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 $2.9 million and $3.2 million for the years ended December 31, 2020 and 2019, 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 $0.2 million and $0.4 million in 2020 and 2019, 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 $0.2 million and $0.8 million for the years ended December 31, 2020 and 2019, 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 bonuses 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 $0.3 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively. The security bonus plan is partially funded by a $6.9 million investment in the cash surrender value in life insurance of certain employees. Of the $11.5 million total liability, $0.3 million is classified as a current liability as of December 31, 2020, and the remaining $11.3 million is classified as long-term. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [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, 2020, the Company had approximately 247,000 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 is included in General and administrative expense. The outstanding SPRs were granted with approximately a seven one On December 31, 2020, 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, 2020 was $26.88 per SPR using the following assumptions: Expected volatility 46.5% to 66.9% Risk-free rate of return 0.1% to 0.2% Expected term (in years) 0.5 to 3.5 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, which approximates our historical experience. The estimated annual dividend was based on the recent dividend payout trend. A compensation benefit of less than $0.1 million was recorded as a reduction to General and administrative expense for the year ended December 31, 2020. Compensation expenses of $14.9 million was recorded in General and administrative expenses for the year ended December 31, 2019. Cash in the amount of $0.5 million and $13.4 million was paid for SPR exercises in 2020 and 2019, respectively. A liability of $14.4 million reflecting the estimated fair value of future pay-outs is 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, 2020 was as follows: Number of SPRs Weighted Average Exercise Price Outstanding on December 31, 2019 599,861 $ 26.56 Exercised (18,861) 16.48 Outstanding on December 31, 2020 581,000 26.88 Exercisable on December 31, 2020 573,086 $ 26.72 The SPRs outstanding had an intrinsic value of $14.6 million as of December 31, 2020. Unrecognized compensation cost related to non-vested SPRs was $0.2 million at December 31, 2020, which will be recognized over a weighted average period of 1.0 years. During the year ended December 31, 2020, 43,397 SPRs with a fair value of $1.3 million vested. At December 31, 2020, the weighted average remaining contractual term was 2.0 years for all outstanding SPRs and 1.8 years for all exercisable SPRs. Restricted Stock Awards Restricted stock awards ("RSAs") generally vest over a one three Compensation expenses of $1.2 million and $1.3 million related to the RSAs were recorded in General and administrative expenses for 2020 and 2019, respectively. Activity related to the Company’s RSAs during the year ended December 31, 2020 was as follows: Restricted Stock Awards Outstanding on December 31, 2019 90,909 Granted 18,371 Exchanged for common shares (63,481) Outstanding on December 31, 2020 45,799 As of December 31, 2020, there was $0.8 million of total unrecognized compensation cost related to RSAs that will be recognized over a weighted average period of 1.0 year. The awards granted in 2020 had a weighted average grant date fair value of $36.68 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. Expenses of $0.7 million and $1.2 million related to MSUs were recorded in General and administrative expenses in the years ended December 31, 2020 and 2019, respectively. Activity related to the Company’s MSUs during the year ended December 31, 2020 was as follows: Number of Market Stock Units Maximum Shares Potentially Issuable Outstanding on December 31, 2019 139,643 199,303 Granted 21,648 32,472 Exchanged for stock (24,035) (36,052) Outstanding on December 31, 2020 137,256 195,723 Stock Options Each stock option can be exchanged for one share of the Company’s common stock at the stated exercise price. Expense related to stock options was $0.1 million in both 2020 and 2019. There was no unrecognized compensation related to stock options as of December 31, 2020 as all compensation plans that included stock options were fully vested. Upon vesting, stock options are recognized as a component of equity. There were 80,000 stock options outstanding on December 31, 2020 with a weighted average exercise price of $27.70. Performance Awards ("PAs") The Company issued 10,852 PAs to key employees that cliff vest on December 31, 2022. PAs are exchangeable for the Company's common stock ranging from zero to 16,278, or the equivalent amount in cash, based upon the achievement of certain financial performance metrics. Expenses of $0.1 million related to the PAs were recorded in General and administrative expenses for the year ended December 31, 2020. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's operating segments, Lawson and Bolt, also represent its reportable segments because of differences in the businesses' financial characteristics and the methods they employ to deliver product to customers. The results of the Company's 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 b ranch locations and the product is delivered to the customers at the point of sale. The Bolt segment total assets include 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, 2020 2019 Net sales Lawson $ 312,803 $ 329,367 Bolt 38,788 41,418 Consolidated total $ 351,591 $ 370,785 Gross profit Lawson $ 171,258 $ 181,567 Bolt 15,280 15,787 Consolidated total $ 186,538 $ 197,354 Operating Income Lawson $ 17,715 $ 6,483 Bolt 2,835 2,583 Consolidated total 20,550 9,066 Interest expense (654) (603) Other income, net 889 1,211 Income before income taxes $ 20,785 $ 9,674 Capital expenditures Lawson $ 1,529 $ 1,522 Bolt 158 506 Consolidated total $ 1,687 $ 2,028 Depreciation and amortization Lawson $ 5,343 $ 4,757 Bolt 1,358 1,136 Consolidated total $ 6,701 $ 5,893 Total assets Lawson $ 221,490 $ 168,803 Bolt 43,533 44,174 Investment in Subsidiary (8,719) (8,548) Consolidated total $ 256,304 $ 204,429 Financial information related to the Company’s continuing operations by geographic area follows: (Dollars in Thousands) Year Ended December 31, 2020 2019 Net sales (1) United States $ 283,261 $ 295,675 Canada 68,330 75,110 Consolidated total $ 351,591 $ 370,785 Long-lived assets (2) United States $ 44,395 $ 25,478 Canada 34,180 35,849 Consolidated total $ 78,575 $ 61,327 (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, right of use assets and other assets. |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of Repurchase Agreements [Abstract] | |
Stock Repurchase Program | Note 20 – Stock Repurchase Program In 2019, the Company's Board of Directors authorized a program in which the Company may repurchase up to $7.5 million of the Company's common stock from time to time in open market transactions, privately negotiated transactions or by other methods. In 2020 and 2019, the Company purchased 47,504 and 32,362 shares of common stock at an average purchase price of $36.93 and $38.13, respectively, under the repurchase program. At December 31, 2020, the Company had approximately $4.5 million available under the repurchase plan. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsDuring the twelve months ended December 31, 2020 the Company purchased approximately $0.9 million of inventory from a company owned by an immediate relative of a Board member at fair market value. The Company paid substantially all of the amount owed in the third and fourth quarters and therefore immaterial remaining liabilities exist as of December 31, 2020. |
COVID-19 Risks and Uncertaintie
COVID-19 Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
COVID-19 Risks and Uncertainties | COVID-19 Risks and Uncertainties There is substantial uncertainty as to the overall effect the COVID-19 pandemic will have on the results of the Company for 2021 and beyond. Various events related to COVID-19 have resulted in lost revenue to our Company, limitations on our ability to source high demand products, limitations on our sales force to perform certain functions due to state or federal stay-at-home orders, slow-down of customer demand for our products and limitations of some customers to pay us on a timely basis. On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security ("CARES") Act to provide certain relief as a result of the COVID-19 outbreak. The Company has elected to defer the employer side social security payments in accordance with the CARES Act. The total amount deferred is $3.5 million, with $1.7 million expected to be paid in 2021 and the remainder in 2022. The Company will continue to evaluate how the provisions of the CARES Act will impact its financial position, results of operations and cash flows. The Company has also utilized the Canadian Emergency Wage Subsidy ("CEWS") Act for both Lawson Canada and Bolt for assistance with hourly employee costs. The CEWS is a program that provides a subsidy of certain eligible wages commencing March 15, 2020 through December 31, 2020 subject to meeting certain criteria. During 2020 the Company recorded $1.4 million in subsidies from the CEWS program which is recognized as a reduction to selling, general and administrative expenses in the consolidated statement of income and comprehensive income. In the first quarter of 2020, the government of the state of Illinois defined essential businesses, allowing Lawson to operate during the pandemic. A change in this status could result in the temporary closure of our business. Additionally the COVID-19 pandemic could result in a temporary closure of any or all of our distribution facilities or the Bolt branch locations, which would negatively impact our operations. Other disruptions to our supply chain such as reduced capacity or temporary shutdowns of freight carriers could also negatively impact Company performance. The pandemic is negatively impacting sales and operations currently and may negatively impact future financial results, liquidity and overall performance of the Company. Additionally, it is reasonably possible that estimates made in the financial statements may be materially and adversely impacted in the future as a result of these conditions, including delay in payment of receivables, impairment losses related to goodwill and other long-lived assets, and inability to utilize deferred tax assets. The Lawson MRO business model relies upon customer interaction as well as a consistent schedule of onsite visits by our sales representatives to customer locations. The Bolt business model relies on foot traffic in its branch locations. The onset of the COVID-19 pandemic, as well as social distancing guidelines and government mandated shelter in place orders, have negatively impacted the ability of our sales reps to visit our customers and for foot traffic to return to our Bolt branch locations, resulting in an overall negative impact on our business. The second quarter 2020 financial performance of the Company was substantially negatively impacted as state and local governments throughout the United States and Canada imposed strict COVID-19 related restrictions, including shutdowns of nonessential businesses and stay-at-home orders, particularly in April. These restrictions were relaxed in May and June, and were further relaxed throughout the third quarter. The economic climate in the third quarter improved as non-essential businesses reopened in both limited capacity and full capacity. The relaxed restrictions resulted in increased customer contact and more consistent customer visits for Lawson MRO sales representatives, as well as increased customer visits to Bolt branch locations. The relaxed restrictions continued in the fourth quarter as well, which allowed for continued sequential improvement in operating and financial performance. Despite the improved economic climate, the Company continues to be negatively impacted by the COVID-19 pandemic and the various federal, state and local restrictions enacted to combat the pandemic. In the fourth quarter of 2020, the U.S. Food and Drug Administration approved certain vaccines that have demonstrated effectiveness in preventing the spread of the COVID-19 virus. However, it is projected that the production, distribution and administration of the vaccine to a sufficient percentage of the population to significantly minimize the future effect of the pandemic will not be reached until mid-2021. The Company has taken several steps to mitigate the potential negative impacts of COVID-19. The actions taken included, but are not limited to, furloughing employees, reducing base salaries for a period of time, canceling travel and award trips, temporarily consolidating its Suwanee distribution center operations into the McCook facility, eliminating non-critical capital expenditures and eliminating various positions throughout the Company. In the third and fourth quarters the Company brought back various previously furloughed employees. The Company reopened the Suwanee distribution center in a reduced capacity in the third quarter as overall business activity increased. The Company will continue to closely monitor the operating environment and will take appropriate actions to protect the safety for its employees, customers and suppliers. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | 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: (1) Year ended December 31, 2020 $ 593 $ 578 $ (517) $ 654 Year ended December 31, 2019 $ 549 $ 623 $ (579) $ 593 Valuation allowance for deferred tax assets: Year ended December 31, 2020 $ 1,235 $ 22 $ — $ 1,257 Year ended December 31, 2019 $ 2,569 $ — $ (1,334) $ 1,235 (1) Deductions reflect uncollected receivables written off, net of recoveries and translation adjustments. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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. 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. 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. The Company also operates as a lessor and recognizes lease revenue on a straight-line basis over the life of each lease. The Company has adopted the practical expedient not to separate the non-lease components that would be within the scope of ASC 606 from the associated lease component as the relevant criteria under ASC 842 are met. |
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, 2020 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. |
Inventories | Inventories principally consist of finished goods stated at the lower of cost or net realizable value using the first-in-first-out method for the Lawson segment and weighted average for the Bolt segment as well as Partsmaster. 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 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 $4.4 million and $3.9 million for 2020 |
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 in which they occur. |
Goodwill and Intangible Assets | Intangible Assets — The Company's intangible assets consist of trade names, and customer relationships. Intangible assets are amortized over a weighted aver age of 12 and 11 |
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. No impairments occurred in 2019 or 2020. |
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.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 financing leases at commencement. For both classes of leases, a Right Of Use ("ROU") asset and corresponding lease liability are recognized at commencement. Operating leases consist of the company headquarters, distribution centers, and Bolt branches. Financing leases consist of equipment such as forklifts and copiers. The value of the lease assets and liabilities are the present value of the total cash payments for each lease. The Company uses its incremental borrowing rate to discount the total cash payments to present value for each lease. The Company will review each lease to determine if there is a more appropriate discount rate to apply. Upon commencement, rent expense is recognized on a straight line basis for each operating lease. Each financing lease ROU asset is amortized on a straight line basis over the lease period. Prior to acquisition, Partsmaster participated in a leasing program where they actively leased parts washer machines to customers. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis. |
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, 2020 and December 31, 2019 no options to purchase shares of common stock were excluded from the computation of diluted earnings per share because all of the options were in the money. |
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 foreign 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 accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity. |
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. |
Recent Accounting Pronouncements | 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 smaller reporting companies in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and the new guidance will be applied on a prospective basis. The Company is still evaluating the effect the adoption of the new standard will have on its financial statements. |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation to Acquisition | A summary of the initial purchase price allocation of the acquisition is as follows (Dollars in thousands): Cash paid and payable and liabilities assumed Cash paid and payable $ 34,523 Accounts payable and accrued expenses 4,086 Lease obligation 620 Deferred compensation 2,938 $ 42,167 Fair value of assets acquired Goodwill $ 15,816 Inventories 7,797 Accounts receivable 7,706 Customer relationships 4,961 Trade names 2,775 Property, plant and equipment 2,121 Right of use asset 620 Other assets 371 $ 42,167 |
Unaudited Pro Forma Revenue and Net Income for Lawson Products Assuming the Partsmaster Acquisition Closed | The following table contains unaudited pro forma revenue and net income for Lawson Products assuming the Partsmaster acquisition closed on January 1, 2019. (Unaudited) Pro Forma Year Ended December 31, 2020 2019 Revenue 396,679 435,486 Net Income 16,535 7,277 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated revenue by product type follows: Unaudited Year Ended December 31, Product Category 2020 2019 Fastening systems 22% 24% Cutting tools and abrasives 14% 13% Fluid power 13% 15% Specialty chemicals 11% 11% Electrical 10% 11% Aftermarket automotive supplies 7% 8% Safety 6% 5% Welding and metal repair 2% 2% Other 15% 11% 100% 100% |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) December 31, 2020 2019 Inventories, gross $ 67,137 $ 60,500 Reserve for obsolete and excess inventory (5,270) (4,595) Inventories, net $ 61,867 $ 55,905 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Land $ 2,650 $ 2,625 Buildings and improvements 15,765 15,356 Machinery and equipment 26,814 24,509 Capitalized software 23,013 22,136 Furniture and fixtures 5,725 5,673 Vehicles 151 155 Construction in progress 752 683 74,870 71,137 Accumulated depreciation and amortization (59,070) (54,591) $ 15,800 $ 16,546 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Activity Related to Acquisitions | Goodwill activity related to acquisitions is included in the table below: (Dollars in Thousands) Goodwill By Reportable Segment Lawson Bolt Total Beginning balance January 1, 2019 $ 7,174 $ 12,905 $ 20,079 Impact of foreign exchange 205 649 854 Adjustment to prior year allocation (10) — (10) Balance at December 31, 2019 7,369 $ 13,554 20,923 Impact of foreign exchange 85 270 355 Acquisition (1) 15,816 — 15,816 Impairment (2) (1,918) — (1,918) Balance at December 31, 2020 $ 21,352 $ 13,824 $ 35,176 (1) The $15.8 million addition to goodwill in 2020 was due to the preliminary allocation of the purchase price to acquire Partsmaster. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Gross Carrying Amount and Accumulated Amortization by Intangible Asset Class | The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) (Dollars in thousands) December 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 11,289 $ (2,733) $ 8,556 $ 8,422 $ (2,020) $ 6,402 Customer relationships 12,349 (2,402) 9,947 7,337 (1,404) 5,933 $ 23,638 $ (5,135) $ 18,503 $ 15,759 $ (3,424) $ 12,335 |
Schedule of Estimated Aggregate Amortization Expense for Next Five Years | The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2021 $ 2,662 2022 2,457 2023 2,343 2024 2,247 2025 1,983 Thereafter 6,811 $ 18,503 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income From Continuing Operations Before Income Taxes | Income from operations before income taxes consisted of the following: (Dollars in thousands) Year Ended December 31, 2020 2019 United States $ 16,226 $ 5,418 Canada 4,559 4,256 $ 20,785 $ 9,674 |
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, 2020 2019 Current income tax expense: U.S. federal $ 3,858 $ — U.S. state 710 136 Canada 1,288 291 Total $ 5,856 $ 427 Deferred income tax expense (benefit): U.S. federal $ 236 $ 2,012 U.S. state 52 303 Canada (472) (289) Total $ (184) $ 2,026 Total income tax expense (benefit): U.S. federal $ 4,094 $ 2,012 U.S. state 762 439 Canada 816 2 Total $ 5,672 $ 2,453 |
Reconciliation Between Effective Income Tax Rate and Statutory Federal Rate | The reconciliation between the effective income tax rates and the statutory federal rates for operations are as follows: Year Ended December 31, 2020 2019 Statutory Federal rate 21.0 % 21.0 % Increase (decrease) resulting from: Change in valuation allowance - current period activity (2.2) (4.5) Change in valuation allowance - reversal — (13.6) Capital loss — 13.6 Stock compensation (2.0) (11.5) Compensation deduction limitation 1.5 10.1 State and local taxes, net 3.8 4.5 Foreign income inclusion — 3.1 Meals & entertainment 0.6 1.8 Change in uncertain tax positions 4.6 (1.0) Provision to return differences (0.1) 0.2 Other items, net 0.1 1.7 Provision for income taxes 27.3 % 25.4 % |
Deferred Tax Assets and Liabilities | Deferred income tax assets and liabilities contain the following temporary differences: (Dollars in thousands) December 31, 2020 2019 Deferred tax assets: Net operating loss carryforward $ 5,431 $ 7,786 Compensation and benefits 10,980 9,947 Inventory reserve 1,772 1,589 Accounts receivable reserve 167 152 Leased assets 1,061 3,326 Other 329 146 Total deferred tax assets 19,740 22,946 Deferred tax liabilities: Intangible assets 1,948 2,360 Lease liabilities 1,366 2,850 Property, plant and equipment (975) 353 Other 503 625 Total deferred liabilities 2,842 6,188 Net deferred tax assets before valuation allowance 16,898 16,758 Valuation allowance (1,257) (1,235) Net deferred tax assets $ 15,641 $ 15,523 |
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, 2020 2019 Balance at beginning of year $ 3,242 $ 3,612 Additions for tax positions of current year 15 13 Additions for tax positions of prior years 1,413 121 Reductions for tax positions of prior year — (29) Lapse of statute of limitations (984) (475) Balance at end of year $ 3,686 $ 3,242 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Accrued stock-based compensation (stock performance rights) $ 14,437 $ 14,908 Accrued compensation 9,794 9,238 Accrued and withheld taxes, other than income taxes 3,788 4,387 Accrued profit sharing 240 916 Accrued severance 1,103 778 Deferred revenue 822 648 Accrued health benefits 732 578 Other 7,576 7,858 $ 38,492 $ 39,311 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease Cost | The expenses and income generated by the leasing activity of Lawson as lessee for the years ended December 31, 2020 and December 31, 2019 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type Classification 2020 2019 Consolidated Operating Lease Expense (1) Operating expenses $ 4,999 $ 4,729 Consolidated Financing Lease Amortization Operating expenses 226 206 Consolidated Financing Lease Interest Interest expense 28 30 Consolidated Financing Lease Expense 254 236 Sublease Income (2) Operating expenses — (160) Net Lease Cost $ 5,253 $ 4,805 (1) Includes short term lease expense, which is immaterial (2) Sublease income from sublease of a portion of the Company headquarters. The sublease was terminated in June 2019 and the Company has no other subleases The weighted average lease terms and interest rates of the leases held by Lawson as of December 31, 2020 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 2.9 5.2% Financing Leases 2.5 5.3% The cash outflows of the leasing activity of Lawson as lessee for the year ending December 31, 2020 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 4,256 Operating cash flows from financing leases Operating activities 28 Financing cash flows from financing leases Financing activities 257 |
Schedule of Assets and Liabilities | The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type 2020 2019 Total ROU operating lease assets (1) $ 8,246 $ 10,592 Total ROU financing lease assets (2) 518 654 Total lease assets $ 8,764 $ 11,246 Total current operating lease obligation $ 4,360 $ 3,591 Total current financing lease obligation 208 239 Total current lease obligations $ 4,568 $ 3,830 Total long term operating lease obligation $ 5,498 $ 9,133 Total long term financing lease obligation 240 371 Total long term lease obligation $ 5,738 $ 9,504 (1) Operating lease assets are recorded net of accumulated amortization of $5.9 million and $1.2 million as of December 31, 2020 and December 31, 2019, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.4 million and $0.2 million as of December 31, 2020 and December 31, 2019, respectively |
Value of Lease Liabilities Generated by Leasing Activities of Lawson | The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2020 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2021 $ 4,719 $ 219 $ 4,938 2022 3,212 143 3,355 2023 1,471 89 1,560 2024 509 25 534 2025 168 — 168 Thereafter 462 — 462 Total lease payments 10,541 476 11,017 Less: Interest 683 28 711 Present value of lease liabilities $ 9,858 $ 448 $ 10,306 (1) Of the $10.5 million future minimum operating lease commitments outstanding at December 31, 2020, $2.2 million relates to a lease for the Company's headquarters which expires in March 2023 (2) The Company has an operating lease for the McCook Facility which expires in June 2022 and includes future minimum lease payments of $2.6 million |
Value of Lease Liabilities Generated by Leasing Activities of Lawson | The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2020 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2021 $ 4,719 $ 219 $ 4,938 2022 3,212 143 3,355 2023 1,471 89 1,560 2024 509 25 534 2025 168 — 168 Thereafter 462 — 462 Total lease payments 10,541 476 11,017 Less: Interest 683 28 711 Present value of lease liabilities $ 9,858 $ 448 $ 10,306 (1) Of the $10.5 million future minimum operating lease commitments outstanding at December 31, 2020, $2.2 million relates to a lease for the Company's headquarters which expires in March 2023 (2) The Company has an operating lease for the McCook Facility which expires in June 2022 and includes future minimum lease payments of $2.6 million |
Credit Agreement (Tables)
Credit Agreement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Covenants | In addition to other customary representations, warranties and covenants, the results of the financial covenants are provided below: Quarterly Financial Covenants Requirement Actual EBITDA to fixed charges ratio 1.15 : 1.00 4.77 : 1.00 Total net leverage ratio 3.25 : 1.00 0.60 : 1.00 |
Reserve for Severance (Tables)
Reserve for Severance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Beginning balance $ 909 $ 359 Charged to earnings 2,077 1,756 Cash paid (1,735) (1,206) Ending balance $ 1,251 $ 909 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Valuation Assumptions | The weighted-average estimated value of SPRs outstanding as of December 31, 2020 was $26.88 per SPR using the following assumptions: Expected volatility 46.5% to 66.9% Risk-free rate of return 0.1% to 0.2% Expected term (in years) 0.5 to 3.5 Expected annual dividend $0 |
Activity Related to SPRs | Activity related to the Company’s SPRs during the year ended December 31, 2020 was as follows: Number of SPRs Weighted Average Exercise Price Outstanding on December 31, 2019 599,861 $ 26.56 Exercised (18,861) 16.48 Outstanding on December 31, 2020 581,000 26.88 Exercisable on December 31, 2020 573,086 $ 26.72 |
Activity Related to RSAs | Activity related to the Company’s RSAs during the year ended December 31, 2020 was as follows: Restricted Stock Awards Outstanding on December 31, 2019 90,909 Granted 18,371 Exchanged for common shares (63,481) Outstanding on December 31, 2020 45,799 |
MSU Rollforward | Activity related to the Company’s MSUs during the year ended December 31, 2020 was as follows: Number of Market Stock Units Maximum Shares Potentially Issuable Outstanding on December 31, 2019 139,643 199,303 Granted 21,648 32,472 Exchanged for stock (24,035) (36,052) Outstanding on December 31, 2020 137,256 195,723 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information for the Company's Reportable Segments | Financial information for the Company's reportable segments follows: (Dollars in thousands) Year Ended December 31, 2020 2019 Net sales Lawson $ 312,803 $ 329,367 Bolt 38,788 41,418 Consolidated total $ 351,591 $ 370,785 Gross profit Lawson $ 171,258 $ 181,567 Bolt 15,280 15,787 Consolidated total $ 186,538 $ 197,354 Operating Income Lawson $ 17,715 $ 6,483 Bolt 2,835 2,583 Consolidated total 20,550 9,066 Interest expense (654) (603) Other income, net 889 1,211 Income before income taxes $ 20,785 $ 9,674 Capital expenditures Lawson $ 1,529 $ 1,522 Bolt 158 506 Consolidated total $ 1,687 $ 2,028 Depreciation and amortization Lawson $ 5,343 $ 4,757 Bolt 1,358 1,136 Consolidated total $ 6,701 $ 5,893 Total assets Lawson $ 221,490 $ 168,803 Bolt 43,533 44,174 Investment in Subsidiary (8,719) (8,548) Consolidated total $ 256,304 $ 204,429 |
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, 2020 2019 Net sales (1) United States $ 283,261 $ 295,675 Canada 68,330 75,110 Consolidated total $ 351,591 $ 370,785 Long-lived assets (2) United States $ 44,395 $ 25,478 Canada 34,180 35,849 Consolidated total $ 78,575 $ 61,327 (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, right of use assets and other assets. |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 4,400,000 | $ 3,900,000 | |
Amortization expense of capitalized software | 600,000 | 600,000 | |
Goodwill | 35,176,000 | 20,923,000 | $ 20,079,000 |
Impairment of long-lived assets | $ 0 | $ 0 | |
Shares paid for tax withholding for share based compensation (in shares) | 32,682 | 64,252 | |
Cost of treasury stock repurchased | $ 3,254,000 | $ 4,527,000 | |
Treasury stock acquired (in shares) | 47,504 | 32,362 | |
Treasury Stock | |||
Property, Plant and Equipment [Line Items] | |||
Cost of treasury stock repurchased | $ 3,254,000 | $ 4,527,000 | |
Trade names | |||
Property, Plant and Equipment [Line Items] | |||
Weighted average amortization period (in years) | 12 years | ||
Customer relationships | |||
Property, Plant and Equipment [Line Items] | |||
Weighted average amortization period (in years) | 11 years | ||
Minimum | Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life (in years) | 20 years | ||
Minimum | Machinery and equipment, furniture and fixtures, and vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life (in years) | 3 years | ||
Minimum | Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life (in years) | 3 years | ||
Maximum | Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life (in years) | 40 years | ||
Maximum | Machinery and equipment, furniture and fixtures, and vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life (in years) | 10 years | ||
Maximum | Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life (in years) | 5 years |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) customer in Thousands, $ in Thousands | Aug. 31, 2020USD ($)customersale_representative | May 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||||
Payments for purchase | $ 2,300 | $ 0 | ||||
Accrued acquisition liability | $ 32,673 | 32,673 | 0 | |||
Goodwill | 35,176 | 35,176 | $ 20,923 | $ 20,079 | ||
Partsmaster | ||||||
Business Acquisition [Line Items] | ||||||
Number of customers | customer | 16 | |||||
Number of sales representatives | sale_representative | 200 | |||||
Purchase price | $ 35,300 | |||||
Payments for purchase | 2,300 | |||||
Accrued acquisition liability | 32,400 | 32,700 | $ 32,700 | |||
Letters of credit | 33,000 | |||||
Goodwill | 15,816 | |||||
Fair value of accounts receivable not expected to be collected | 400 | |||||
Revenue since acquisition | 22,600 | |||||
Operating income since acquisition | $ 800 | |||||
Partsmaster | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangibles | $ 4,961 | |||||
Intangibles weighted average life (in years) | 10 years | |||||
Partsmaster | Trade names | ||||||
Business Acquisition [Line Items] | ||||||
Intangibles | $ 2,775 | |||||
Intangibles weighted average life (in years) | 5 years | |||||
Partsmaster | Forecast | ||||||
Business Acquisition [Line Items] | ||||||
Payments for purchase | $ 33,000 | |||||
Accrued acquisition liability | $ 32,700 |
Acquisition - Purchase Price Al
Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Aug. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value of assets acquired | ||||
Goodwill | $ 35,176 | $ 20,923 | $ 20,079 | |
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Right Of Use Assets | $ 620 | |||
Partsmaster | ||||
Cash paid and payable and liabilities assumed | ||||
Cash paid and payable | 34,523 | |||
Accounts payable and accrued expenses | 4,086 | |||
Lease obligation | 620 | |||
Deferred compensation | 2,938 | |||
Cash paid and payable and liabilities assumed | 42,167 | |||
Fair value of assets acquired | ||||
Goodwill | 15,816 | |||
Inventories | 7,797 | |||
Accounts receivable | 7,706 | |||
Property, plant and equipment | 2,121 | |||
Other assets | 371 | |||
Fair value of assets acquired | 42,167 | |||
Partsmaster | Customer relationships | ||||
Fair value of assets acquired | ||||
Intangibles | 4,961 | |||
Partsmaster | Trade names | ||||
Fair value of assets acquired | ||||
Intangibles | $ 2,775 |
Acquisition - Pro Forma Results
Acquisition - Pro Forma Results (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | ||
Revenue | $ 396,679 | $ 435,486 |
Net Income | $ 16,535 | $ 7,277 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenue | $ 351,591 | $ 370,785 | |
Revenue generated by operating leases acquired in acquisition | $ 900 | ||
Service revenue | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenue | $ 40,100 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - Product Concentration Risk - Revenue from Contract with Customer Benchmark | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
Fastening systems | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 22.00% | 24.00% |
Cutting tools and abrasives | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 14.00% | 13.00% |
Fluid power | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 13.00% | 15.00% |
Specialty chemicals | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 11.00% | 11.00% |
Electrical | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 11.00% |
Aftermarket automotive supplies | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 7.00% | 8.00% |
Safety | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 6.00% | 5.00% |
Welding and metal repair | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 2.00% | 2.00% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 11.00% |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Restricted Cash [Abstract] | ||
Restricted cash | $ 998 | $ 802 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 998 | $ 802 |
Money Market Funds | ||
Restricted Cash [Abstract] | ||
Restricted cash | 800 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 800 | |
Guaranteed Investment Certificate | ||
Restricted Cash [Abstract] | ||
Restricted cash | 200 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 200 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of inventories | ||
Inventories, gross | $ 67,137 | $ 60,500 |
Reserve for obsolete and excess inventory | (5,270) | (4,595) |
Inventories, net | $ 61,867 | $ 55,905 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 74,870 | $ 71,137 |
Accumulated depreciation and amortization | (59,070) | (54,591) |
Property, plant and equipment, less accumulated depreciation and amortization | 15,800 | 16,546 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,650 | 2,625 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15,765 | 15,356 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 26,814 | 24,509 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 23,013 | 22,136 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,725 | 5,673 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 151 | 155 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 752 | $ 683 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 20,923 | $ 20,079 |
Impact of foreign exchange | 355 | 854 |
Adjustment to prior year allocation | (10) | |
Acquisition | 15,816 | |
Impairment | (1,918) | 0 |
Goodwill, ending balance | 35,176 | 20,923 |
Lawson | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 7,369 | 7,174 |
Impact of foreign exchange | 85 | 205 |
Adjustment to prior year allocation | (10) | |
Acquisition | 15,816 | |
Impairment | (1,918) | |
Goodwill, ending balance | 21,352 | 7,369 |
Bolt | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 13,554 | 12,905 |
Impact of foreign exchange | 270 | 649 |
Adjustment to prior year allocation | 0 | |
Acquisition | 0 | |
Impairment | 0 | |
Goodwill, ending balance | $ 13,824 | $ 13,554 |
Intangible assets - Schedule of
Intangible assets - Schedule of Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 23,638 | $ 15,759 |
Accumulated Amortization | (5,135) | (3,424) |
Net Carrying Value | 18,503 | 12,335 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,289 | 8,422 |
Accumulated Amortization | (2,733) | (2,020) |
Net Carrying Value | 8,556 | 6,402 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,349 | 7,337 |
Accumulated Amortization | (2,402) | (1,404) |
Net Carrying Value | $ 9,947 | $ 5,933 |
Intangible assets - Narrative (
Intangible assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization expense | $ 1.7 | $ 1.3 |
Intangible assets - Future Amor
Intangible assets - Future Amortization Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2021 | $ 2,662 | |
2022 | 2,457 | |
2023 | 2,343 | |
2024 | 2,247 | |
2025 | 1,983 | |
Thereafter | 6,811 | |
Net Carrying Value | $ 18,503 | $ 12,335 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income (loss) from continuing operations before income taxes | ||
United States | $ 16,226 | $ 5,418 |
Canada | 4,559 | 4,256 |
Income before income taxes | $ 20,785 | $ 9,674 |
Income Taxes - Provision (Benef
Income Taxes - Provision (Benefit) for Income taxes from Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current income tax expense: | ||
U.S. federal | $ 3,858 | $ 0 |
U.S. state | 710 | 136 |
Canada | 1,288 | 291 |
Total | 5,856 | 427 |
Deferred income tax expense (benefit): | ||
U.S. federal | 236 | 2,012 |
U.S. state | 52 | 303 |
Canada | (472) | (289) |
Total | (184) | 2,026 |
Total income tax expense (benefit): | ||
U.S. federal | 4,094 | 2,012 |
U.S. state | 762 | 439 |
Canada | 816 | 2 |
Total | $ 5,672 | $ 2,453 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||
Statutory Federal rate | 21.00% | 21.00% |
Increase (decrease) resulting from: | ||
Change in valuation allowance - current period activity | (2.20%) | (4.50%) |
Change in valuation allowance - reversal | 0.00% | (13.60%) |
Capital loss | 0.00% | 13.60% |
Stock compensation | (2.00%) | (11.50%) |
Compensation deduction limitation | 1.50% | 10.10% |
State and local taxes, net | 3.80% | 4.50% |
Foreign income inclusion | 0.00% | 3.10% |
Meals & entertainment | 0.60% | 1.80% |
Change in uncertain tax positions | 4.60% | (1.00%) |
Provision to return differences | (0.10%) | 0.20% |
Other items, net | 0.10% | 1.70% |
Provision for income taxes | 27.30% | 25.40% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | |||
US federal net operating loss carryforwards | $ 7,200 | ||
Various state net operating loss carryforwards | 7,700 | ||
Valuation allowance | 1,257 | $ 1,235 | |
Tax deductible goodwill | 35,176 | $ 20,923 | $ 20,079 |
Tax deductible goodwill | $ 35,200 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 5,431 | $ 7,786 |
Compensation and benefits | 10,980 | 9,947 |
Inventory reserve | 1,772 | 1,589 |
Accounts receivable reserve | 167 | 152 |
Leased assets | 1,061 | 3,326 |
Other | 329 | 146 |
Total deferred tax assets | 19,740 | 22,946 |
Deferred tax liabilities: | ||
Intangible assets | 1,948 | 2,360 |
Lease liabilities | 1,366 | 2,850 |
Property, plant and equipment | (975) | 353 |
Other | 503 | 625 |
Total deferred liabilities | 2,842 | 6,188 |
Net deferred assets before valuation allowance | 16,898 | 16,758 |
Valuation allowance | (1,257) | (1,235) |
Net deferred assets | $ 15,641 | $ 15,523 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 3,242 | $ 3,612 |
Additions for tax positions of current year | 15 | 13 |
Additions for tax positions of prior years | 1,413 | 121 |
Reductions for tax positions of prior year | 0 | (29) |
Lapse of statute of limitations | (984) | (475) |
Balance at end of year | $ 3,686 | $ 3,242 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued stock-based compensation (stock performance rights) | $ 14,437 | $ 14,908 |
Accrued compensation | 9,794 | 9,238 |
Accrued and withheld taxes, other than income taxes | 3,788 | 4,387 |
Accrued profit sharing | 240 | 916 |
Accrued severance | 1,103 | 778 |
Deferred revenue | 822 | 648 |
Accrued health benefits | 732 | 578 |
Other | 7,576 | 7,858 |
Total accrued liabilities | $ 38,492 | $ 39,311 |
Leases - Net Lease Cost (Detail
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Consolidated Operating Lease Expense | $ 4,999 | $ 4,729 |
Consolidated Financing Lease Amortization | 226 | 206 |
Consolidated Financing Lease Interest | 28 | 30 |
Consolidated Financing Lease Expense | 254 | 236 |
Sublease Income | 0 | (160) |
Net Lease Cost | $ 5,253 | $ 4,805 |
Leases - Net Lease Assets and L
Leases - Net Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Total ROU operating lease assets | $ 8,246 | $ 10,592 |
Total ROU financing lease assets | 518 | 654 |
Total lease assets | 8,764 | 11,246 |
Total current operating lease obligation | 4,360 | 3,591 |
Total current financing lease obligation | 208 | 239 |
Total current lease obligations | 4,568 | 3,830 |
Total long term operating lease obligation | 5,498 | 9,133 |
Total long term financing lease obligation | 240 | 371 |
Total long term lease obligation | 5,738 | 9,504 |
Operating lease accumulated depreciation | 5,900 | 1,200 |
Finance lease accumulated depreciation | $ 400 | $ 200 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2021 | $ 4,719 | |
2022 | 3,212 | |
2023 | 1,471 | |
2024 | 509 | |
2025 | 168 | |
Thereafter | 462 | |
Total lease payments | 10,541 | |
Less: Interest | 683 | |
Present value of lease liabilities | 9,858 | |
Financing Leases | ||
2021 | 219 | |
2022 | 143 | |
2023 | 89 | |
2024 | 25 | |
2025 | 0 | |
Thereafter | 0 | |
Total lease payments | 476 | |
Less: Interest | 28 | |
Present value of lease liabilities | 448 | |
Total | ||
2021 | 4,938 | |
2022 | 3,355 | |
2023 | 1,560 | |
2024 | 534 | |
2025 | 168 | |
Thereafter | 462 | |
Total lease payments | 11,017 | |
Less: Interest | 711 | |
Present value of lease liabilities | $ 10,306 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | laws:LeaseLiabilityCurrent | laws:LeaseLiabilityCurrent |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | laws:LeaseLiabilityCurrent | laws:LeaseLiabilityCurrent |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | laws:LeaseLiabilityNoncurrent | laws:LeaseLiabilityNoncurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | laws:LeaseLiabilityNoncurrent | laws:LeaseLiabilityNoncurrent |
Lessee, Lease, Description [Line Items] | ||
Lease liability | $ 10,541 | |
Company Headquarters | ||
Operating Leases | ||
Total lease payments | 2,200 | |
Lessee, Lease, Description [Line Items] | ||
Lease liability | 2,200 | |
McCook facility | ||
Operating Leases | ||
Total lease payments | 2,600 | |
Lessee, Lease, Description [Line Items] | ||
Lease liability | $ 2,600 |
Leases - Terms and Interest Rat
Leases - Terms and Interest Rate (Details) | Dec. 31, 2020 |
Leases [Abstract] | |
Operating Leases, Weighted Average Term (in years) | 2 years 10 months 24 days |
Operating Leases, Weighted Average Interest Rate (as percent) | 5.20% |
Finance Leases, Weighted Average Term (in years) | 2 years 6 months |
Finance Leases, Weighted Average Interest Rate (as percent) | 5.30% |
Leases - Cash Flows (Details)
Leases - Cash Flows (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 4,256 |
Operating cash flows from financing leases | 28 |
Financing cash flows from financing leases | $ 257 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | |||
Operating ROU Asset | $ 8,246 | $ 10,592 | |
Operating lease liabilities | 9,858 | ||
Financing lease liabilities | $ 448 | ||
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Operating ROU Asset | $ 1,700 | ||
Operating lease liabilities | 1,700 | ||
Financing lease ROU asset | 400 | ||
Financing lease liabilities | $ 400 |
Credit Agreement - Narrative (D
Credit Agreement - Narrative (Details) - Line of Credit | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Aug. 31, 2020USD ($) | Jun. 30, 2020USD ($) | |
Line of Credit Facility [Line Items] | ||||
Defaults | $ 5,000,000 | |||
Weighted average interest rate | 2.65% | |||
Letters of credit | $ 34,000,000 | |||
Allowable indebtedness for acquisition | $ 36,000,000 | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Total net leverage ratio | 3.75 | |||
Required Minimum Value | ||||
Line of Credit Facility [Line Items] | ||||
EBITDA to fixed charges ratio | 1.15 | |||
Total net leverage ratio | 3.25 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | $ 100,000,000 | |||
Revolving line of credit facility, outstanding | 0 | |||
Line of credit facility, remaining borrowing capacity | 66,000,000 | |||
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, borrowing capacity | $ 150,000,000 | |||
Maximum borrowing capacity | $ 40,000,000 | $ 15,000,000 |
Credit Agreement - Quarterly Fi
Credit Agreement - Quarterly Financial Covenants (Details) - Line of Credit | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Required Minimum Value | ||
Line of Credit Facility [Line Items] | ||
EBITDA to fixed charges ratio | 1.15 | |
Total net leverage ratio | 3.25 | |
Actual Value | ||
Line of Credit Facility [Line Items] | ||
EBITDA to fixed charges ratio | 4.77 | |
Total net leverage ratio | 0.60 |
Accrued Acquisition Liability (
Accrued Acquisition Liability (Details) - USD ($) $ in Thousands | Aug. 31, 2020 | May 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Payments for purchase | $ 2,300 | $ 0 | ||
Implied interest rate | 1.80% | |||
Accrued acquisition liability | $ 32,673 | $ 0 | ||
Partsmaster | ||||
Business Acquisition [Line Items] | ||||
Payments for purchase | $ 2,300 | |||
Accrued acquisition liability | $ 32,400 | $ 32,700 | ||
Forecast | Partsmaster | ||||
Business Acquisition [Line Items] | ||||
Payments for purchase | $ 33,000 | |||
Accrued acquisition liability | $ 32,700 |
Reserve for Severance - Activit
Reserve for Severance - Activity in Reserve (Details) - Employee Severance - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reserve for severance and related payments | ||
Balance at beginning of period | $ 909 | $ 359 |
Charged to earnings | 2,077 | 1,756 |
Cash paid | (1,735) | (1,206) |
Balance at end of the period | $ 1,251 | $ 909 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued environmental matter costs | $ 0.1 |
Retirement and Security Bonus_2
Retirement and Security Bonus Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
401k Employer matching contributions | $ 2,900 | $ 3,200 |
Defined defined contribution retirement investment plans contributions | 200 | 400 |
Employer contributions, profit sharing retirement plan | 200 | |
Retirement and Security Bonus Plans | ||
Cash surrender value in life insurance of certain employees | 6,900 | |
Total liability | 133,882 | 96,428 |
Current liabilities | $ 97,995 | 56,930 |
Security bonus plan | ||
Retirement and Security Bonus Plans | ||
Initial vesting percentage | 25.00% | |
Minimum vesting period | five | |
Annual vesting percentage after initial period | 5.00% | |
Expense recognized | $ 300 | $ 500 |
Total liability | 11,500 | |
Current liabilities | 300 | |
Long-term liabilities | $ 11,300 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Plan Administration (Details) - 2009 Equity Compensation Plan | 12 Months Ended |
Dec. 31, 2020shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares available for grant (in shares) | 247,000 |
Director | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation plan maximum share grants per year (in shares) | 125,000 |
Share-based Payment Arrangement, Nonemployee | Director | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation plan maximum share grants per year (in shares) | 20,000 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Stock Performance Rights (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Valuation assumptions: | ||
Cash paid out for SPR excercises | $ 500,000 | $ 13,400,000 |
Liability reflecting estimated fair value of future pay-outs | $ 14,437,000 | 14,908,000 |
Stock Performance Rights | ||
Stock Performance Rights | ||
Weighted average estimated value of SPRs outstanding (in USD per share) | $ 26.88 | |
Valuation assumptions: | ||
Expected volatility, minimum, percent | 46.50% | |
Expected volatility, maximum, percent | 66.90% | |
Risk-free rate of return, minimum | 0.10% | |
Risk-free rate of return, maximum | 0.20% | |
Expected annual dividend | $ 0 | |
Stock options expense | $ 14,900,000 | |
Liability reflecting estimated fair value of future pay-outs | $ 14,400,000 | |
Number of SPRs | ||
Outstanding on December 31, 2019 (in shares) | 599,861 | |
Exercised (in shares) | (18,861) | |
Outstanding on December 31, 2020 (in shares) | 581,000 | 599,861 |
Exercisable on December 31, 2020 (in shares) | 573,086 | |
Weighted Average Exercise Price | ||
Outstanding on December 31, 2019 (in USD per share) | $ 26.88 | $ 26.56 |
Exercised (in USD per share) | 16.48 | |
Outstanding on December 31, 2020 (in USD per share) | 26.88 | |
Exercisable on December 31, 2020 (in USD per share) | $ 26.72 | |
SPRs outstanding, intrinsic value | $ 14,600,000 | |
Total unrecognized compensation cost | $ 200,000 | |
Unrecognized cost, period for recognition (in years) | 1 year | |
Shares vested (in shares) | 43,397 | |
Vested in period, fair value | $ 1,300,000 | |
Weighted average remaining contractual term, SPRs outstanding (in years) | 2 years | |
Weighted average remaining contractual term, SPRs exercisable (in years) | 1.8 years | |
Stock Performance Rights | Minimum | ||
Stock Performance Rights | ||
Expiration period (in years) | 7 years | |
Award vesting period (in years) | 1 year | |
Valuation assumptions: | ||
Expected term (in years) | 6 months | |
Stock Performance Rights | Maximum | ||
Stock Performance Rights | ||
Award vesting period (in years) | 3 years | |
Valuation assumptions: | ||
Expected term (in years) | 3 years 6 months |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Restricted Stock Awards (Details) - Restricted stock awards - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards | ||
Outstanding on December 31, 2019 (in shares) | 90,909 | |
Granted (in shares) | 18,371 | |
Exchanged for common shares (in shares) | (63,481) | |
Outstanding on December 31, 2020 (in shares) | 45,799 | 90,909 |
Total unrecognized compensation cost | $ 0.8 | |
Unrecognized cost, period for recognition (in years) | 1 year | |
Weighted average grant date fair value (in USD per share) | $ 36.68 | |
Selling, general and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 1.2 | $ 1.3 |
2009 Equity Compensation Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 1 year | |
2009 Equity Compensation Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 3 years |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Market Stock Units (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Market Stock Units | ||
Outstanding on December 31, 2019 (in shares) | 139,643 | |
Granted (in shares) | 21,648 | |
Exchanged for stock (in shares) | (24,035) | |
Outstanding on December 31, 2020 (in shares) | 137,256 | 139,643 |
Maximum Shares Potentially Issuable | ||
Outstanding on December 31, 2019 (in shares) | 199,303 | |
Granted (in shares) | 32,472 | |
Exchanged for stock (in shares) | (36,052) | |
Outstanding on December 31, 2020 (in shares) | 195,723 | 199,303 |
MSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 0.7 | $ 1.2 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Shares From MSU Vest | 0.00% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Shares From MSU Vest | 150.00% | |
Trading days | 60 days |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Stock Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense | $ 0 | |
Outstanding stock options (in shares) | 80,000 | |
Weighted average exercise price (in USD per share) | $ 27.70 | |
Share-based Payment Arrangement, Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 100,000 | $ 100,000 |
Stock-Based Compensation Plan_7
Stock-Based Compensation Plans - Performance Awards (Details) - PAs $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | 10,852 |
Stock options expense | $ | $ 0.1 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity share payout range (in shares) | 0 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity share payout range (in shares) | 16,278 |
Segment Information - Reportabl
Segment Information - Reportable Segments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 351,591 | $ 370,785 |
Gross profit | 186,538 | 197,354 |
Operating Income | 20,550 | 9,066 |
Interest expense | (654) | (603) |
Other income, net | 889 | 1,211 |
Income before income taxes | 20,785 | 9,674 |
Capital expenditures | 1,687 | 2,028 |
Depreciation and amortization | 6,701 | 5,893 |
Total assets | 256,304 | 204,429 |
Equity Method Investments | (8,719) | (8,548) |
Lawson | ||
Segment Reporting Information [Line Items] | ||
Revenue | 312,803 | 329,367 |
Gross profit | 171,258 | 181,567 |
Operating Income | 17,715 | 6,483 |
Capital expenditures | 1,529 | 1,522 |
Depreciation and amortization | 5,343 | 4,757 |
Total assets | $ 221,490 | 168,803 |
Bolt | ||
Segment Reporting Information [Line Items] | ||
Number of branches | segment | 14 | |
Revenue | $ 38,788 | 41,418 |
Gross profit | 15,280 | 15,787 |
Operating Income | 2,835 | 2,583 |
Capital expenditures | 158 | 506 |
Depreciation and amortization | 1,358 | 1,136 |
Total assets | $ 43,533 | $ 44,174 |
Segment Information - Reporta_2
Segment Information - Reportable Segments by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 351,591 | $ 370,785 |
Long-lived assets | 78,575 | 61,327 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenue | 283,261 | 295,675 |
Long-lived assets | 44,395 | 25,478 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Revenue | 68,330 | 75,110 |
Long-lived assets | $ 34,180 | $ 35,849 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | ||
Stock repurchase program, authorized amount | $ 4.5 | $ 7.5 |
Treasury stock acquired (in shares) | 47,504 | 32,362 |
Treasury stock acquired (in USD per share) | $ 36.93 | $ 38.13 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Related Party Transactions [Abstract] | |
Inventory purchased from related party | $ 0.9 |
COVID-19 Risks and Uncertaint_2
COVID-19 Risks and Uncertainties (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 27, 2020 | Dec. 31, 2019 | |
Unusual Risk or Uncertainty [Line Items] | ||||
Deferred employer side social security payments | $ 3,500 | |||
Canada emergency wage subsidy | $ 1,400 | |||
Cash and cash equivalents | 28,393 | $ 5,495 | ||
Accrued acquisition liability | $ 32,673 | $ 0 | ||
Forecast | ||||
Unusual Risk or Uncertainty [Line Items] | ||||
Payments Of Deferred Employer Payroll Tax, CARES Act | $ 1,700 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for doubtful accounts: | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 593 | $ 549 |
Charged to Costs and Expenses | 578 | 623 |
Deductions | (517) | (579) |
Balance at end of period | 654 | 593 |
Valuation allowance for deferred tax assets: | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 1,235 | 2,569 |
Charged to Costs and Expenses | 22 | 0 |
Deductions | 0 | (1,334) |
Balance at end of period | $ 1,257 | $ 1,235 |
Uncategorized Items - laws-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-02 [Member] |