Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
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 | $ 237,752,000 | ||
Entity Common Stock, Shares Outstanding | 9,115,584 | ||
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 | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | BDO USA, LLP |
Auditor Location | Chicago, Illinois |
Auditor Firm ID | 243 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 4,181 | $ 28,393 |
Restricted cash | 198 | 998 |
Accounts receivable, less allowance for doubtful accounts of $798 and $654, respectively | 47,031 | 44,515 |
Inventories, net | 73,849 | 61,867 |
Miscellaneous receivables and prepaid expenses | 7,517 | 7,289 |
Total current assets | 132,776 | 143,062 |
Property, plant and equipment, less accumulated depreciation and amortization | 18,828 | 15,800 |
Deferred income taxes | 20,111 | 18,482 |
Goodwill | 35,313 | 35,176 |
Cash value of life insurance | 18,573 | 16,185 |
Intangible assets, net | 16,165 | 18,503 |
Right of use assets | 14,045 | 8,764 |
Other assets | 346 | 332 |
Total assets | 256,157 | 256,304 |
Current liabilities: | ||
Accrued acquisition liability | 0 | 32,673 |
Accounts payable | 21,089 | 22,262 |
Lease obligation | 4,467 | 4,568 |
Accrued expenses and other liabilities | 46,688 | 38,492 |
Total current liabilities | 72,244 | 97,995 |
Revolving line of credit | 11,900 | 0 |
Security bonus plan | 10,578 | 11,262 |
Lease obligation | 10,841 | 5,738 |
Deferred compensation | 11,962 | 10,461 |
Deferred tax liability | 1,671 | 2,841 |
Other liabilities | 3,954 | 5,585 |
Total liabilities | 123,150 | 133,882 |
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 – 9,363,093 and 9,287,625 shares, respectively Outstanding – 9,115,584 and 9,061,039 shares, respectively | 9,363 | 9,288 |
Capital in excess of par value | 22,118 | 19,841 |
Retained earnings | 111,015 | 101,609 |
Treasury stock – 247,509 and 226,586 shares held, respectively | (10,033) | (9,015) |
Accumulated other comprehensive income | 544 | 699 |
Total stockholders’ equity | 133,007 | 122,422 |
Total liabilities and stockholders’ equity | $ 256,157 | $ 256,304 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, less allowance for doubtful accounts | $ 798 | $ 654 |
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) | 9,363,093 | 9,287,625 |
Common stock, shares outstanding (in shares) | 9,115,584 | 9,061,039 |
Treasury stock (in shares) | 247,509 | 226,586 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 417,733 | $ 351,591 |
Cost of goods sold | 198,498 | 165,053 |
Gross profit | 219,235 | 186,538 |
Operating expenses: | ||
Selling expenses | 96,643 | 76,775 |
General and administrative expenses | 110,605 | 89,213 |
Operating expenses | 207,248 | 165,988 |
Operating income | 11,987 | 20,550 |
Interest expense | (869) | (654) |
Other income, net | 801 | 889 |
Income before income taxes | (11,919) | (20,785) |
Income tax expense | 2,513 | 5,672 |
Net income | $ 9,406 | $ 15,113 |
Basic income per share of common stock (in USD per share) | $ 1.04 | $ 1.68 |
Diluted income per share of common stock (in USD per share) | $ 1.01 | $ 1.62 |
Weighted average shares outstanding: | ||
Basic weighted average shares outstanding (in shares) | 9,073 | 9,020 |
Effect of dilutive securities outstanding (in shares) | 277 | 311 |
Diluted weighted average shares outstanding (in shares) | 9,350 | 9,331 |
Comprehensive income | ||
Net income | $ 9,406 | $ 15,113 |
Other comprehensive income, net of tax: | ||
Adjustment for foreign currency translation | (155) | 700 |
Comprehensive income | $ 9,251 | $ 15,813 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Balance at beginning of year (in shares) at Dec. 31, 2019 | 9,043,771 | |||||
Balance at beginning of year at Dec. 31, 2019 | $ 108,001 | $ 9,190 | $ 18,077 | $ 86,496 | $ (5,761) | $ (1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
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 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 9,406 | 9,406 | ||||
Adjustment for foreign currency translation | (155) | (155) | ||||
Stock-based compensation | 2,352 | 2,352 | ||||
Shares issued (in shares) | 75,468 | |||||
Shares issued | $ 0 | $ 75 | (75) | |||
Shares repurchased held in treasury (in shares) | 0 | (20,923) | ||||
Shares repurchased held in treasury | $ (1,018) | (1,018) | ||||
Balance at end of year (in shares) at Dec. 31, 2021 | 9,363,093 | 9,115,584 | ||||
Balance at end of year at Dec. 31, 2021 | $ 133,007 | $ 9,363 | $ 22,118 | $ 111,015 | $ (10,033) | $ 544 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in USD per share) | $ 1 | $ 1 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net income | $ 9,406 | $ 15,113 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,341 | 6,701 |
Stock-based compensation | 4,838 | 1,479 |
Deferred income taxes | (2,824) | (167) |
Reserve for obsolete and excess inventory | 2,450 | 675 |
Goodwill impairment | 0 | 1,918 |
Changes in operating assets and liabilities, net of effect of acquired businesses: | ||
Accounts receivable | (2,966) | 1,762 |
Inventories | (14,347) | 1,425 |
Miscellaneous receivables, prepaid expenses and other assets | (2,720) | (2,899) |
Accounts payable and other liabilities | 2,441 | 5,788 |
Other | 830 | 733 |
Net cash provided by operating activities | 5,449 | 32,528 |
Investing activities | ||
Purchases of property, plant and equipment | (8,193) | (1,687) |
Business acquisition, net of acquired cash | (33,000) | (2,300) |
Net cash used in investing activities | (41,193) | (3,987) |
Financing activities | ||
Net proceeds (payments) on revolving lines of credit | 11,900 | (2,271) |
Shares repurchased held in treasury | (1,018) | (3,254) |
Payment of financing lease principal | (222) | (257) |
Proceeds from stock option exercises | 0 | 15 |
Net cash provided by (used in) financing activities | 10,660 | (5,767) |
Effect of exchange rate changes on cash and cash equivalents | 72 | 320 |
(Decrease) increase in cash and cash equivalents and restricted cash | (25,012) | 23,094 |
Cash, cash equivalents and restricted cash at beginning of year | 29,391 | 6,297 |
Cash, cash equivalents and restricted cash at end of year | 4,379 | 29,391 |
Cash and cash equivalents | 4,181 | 28,393 |
Restricted cash | 198 | 998 |
Total cash, cash equivalents and restricted cash | 4,379 | 29,391 |
Supplemental disclosure of cash flow information | ||
Net noncash financing liability related to acquisition | 0 | (32,673) |
Net cash paid for income taxes | 4,364 | 5,377 |
Net cash paid for interest | 968 | 398 |
Net noncash financing liability related to acquisition | $ 311 | $ 64 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
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 branches l ocated in Western Canada. Recent Events On December 29, 2021, Lawson entered into: • an Agreement and Plan of Merger (the “TestEquity Merger Agreement”) by and among (1) LKCM TE Investors, LLC (the “TestEquity Equityholder”), (2) TestEquity Acquisition, LLC, an indirect wholly-owned subsidiary of the TestEquity Equityholder (“TestEquity”), (3) Lawson and (4) Tide Sub, LLC, a wholly-owned subsidiary of Lawson (“Merger Sub 1”), pursuant to the terms and subject to the conditions of which Merger Sub 1 will merge with and into TestEquity, with TestEquity surviving the merger as a wholly-owned subsidiary of Lawson (the “TestEquity Merger”); and • an Agreement and Plan of Merger (the “Gexpro Services Merger Agreement” and, together with the TestEquity Merger Agreement, the “Merger Agreements”) by and among (1) 301 HW Opus Investors, LLC, (the “Gexpro Services Stockholder”), (2) 301 HW Opus Holdings, Inc., a wholly-owned subsidiary of the Gexpro Services Stockholder (“Gexpro Services”), (3) Lawson and (4) Gulf Sub, Inc., a wholly-owned subsidiary of Lawson (“Merger Sub 2”), pursuant to the terms and subject to the conditions of which Merger Sub 2 will merge with and into Gexpro Services, with Gexpro Services surviving the merger as a wholly-owned subsidiary of Lawson (the “Gexpro Services Merger” and, together with the TestEquity Merger, the “Mergers”). The Mergers are intended to bring together three complementary distribution businesses under a holding company structure. Pursuant to the Merger Agreements, Lawson has agreed to issue up to an aggregate of 12,000,000 shares of Lawson common stock in consideration for the Mergers as follows: • TestEquity Merger: In connection with the TestEquity Merger, 3,300,000 shares of Lawson common stock would be issued to the TestEquity Equityholder upon the closing of the TestEquity Merger, and up to an additional 700,000 shares of Lawson common stock would potentially be issuable to the TestEquity Equityholder on or after the closing date of the TestEquity Merger upon satisfaction of the conditions of, and in accordance with, two earnout mechanisms. • Gexpro Services Merger: In connection with the Gexpro Services Merger, 7,000,000 shares of Lawson common stock would be issued to the Gexpro Services Stockholder upon the closing of the Gexpro Services Merger, and up to an additional 1,000,000 shares of Lawson common stock would potentially be issuable to the Gexpro Services Stockholder on or after the closing date of the Gexpro Services Merger upon satisfaction of the conditions of, and in accordance with, two earnout mechanisms. The consummation of the Mergers is subject to certain closing conditions, including, among others, (1) receipt of the requisite Lawson stockholder approvals under the Merger Agreements and (2) receipt of proceeds of debt financing in an amount sufficient for the payment of certain payoff indebtedness, transaction expenses and other fees and expenses in connection with the Mergers. The Mergers, if completed, will be consummated substantially concurrently. We refer to the transactions contemplated by the Merger Agreements, including the Mergers and the share issuances, as the “Transactions.” The Merger Agreements contain certain termination rights for the parties, including, among other rights, termination rights if the Mergers are not completed on or before September 30, 2022 (subject to certain limitations) or any of the requisite Lawson stockholder approvals are not obtained at a duly convened stockholders meeting. If the TestEquity Merger Agreement is terminated under certain circumstances, Lawson will be obligated to pay TestEquity a termination fee of |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
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. 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 has adopted the practical expedient within ASC 340 to recognize incremental costs to obtain a contract, primarily employee related costs, as expense when incurred since the amortization period of the asset that the Company otherwise would have recognized is one year or less. 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, 2021 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 $5.0 million and $4.4 million for 2021 and 2020 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 $0.8 million for 2021 and $0.6 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 Sheets. 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 in the Consolidated Statements of Income and Comprehensive Income, 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 in the Consolidated Statements of Income and Comprehensive Income. 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 $35.3 million and $35.2 million of goodwill in 2021 and 2020, 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. Related to the Lawson MRO, Bolt, and Partsmaster reporting units, the Company performed a qualitative assessment as of December 1, 2021 and determined that it was more likely than not the fair value of the reporting units exceeded the carrying value of the reporting units. The goodwill related to the Screw Products reporting unit was fully impaired in 2020. 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 2020 or 2021. 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 uncertain 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 in the Consolidated Statements of Income and Comprehensive Income. 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 a component of Property, plant and equipment in the Consolidated Balance Sheets 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, 2021 and December 31, 2020 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 am ounts 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 no shares of its common stock in 2021 through its previously announced stock repurchase plan. The Company repurchased 47,504 of its common stock in 2020 th rough its previously announced stock repurchase plan. The Company repurc hased 20,923 an d 32,682 shares of its common stock i n 2021 an d 2020, 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 $1.0 million and $3.3 million in 2021 and 2020, 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 - Not Yet Adopted In June 2016, the FASB issued ASU 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, 2021 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On August 31, 2020, the Company acquired Partsmaster from NCH Corporation. Partsmaster is a leading 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 liabiliti es. The Company paid $2.3 million of the purchase price in cash at closing and paid the remaining $33.0 million in May 2021. The payment obligation was discounted to present value and recognized as an Accrued acquisition liability of $32.7 million as of December 31, 2020 in the Company's Consolidated Balance Sheet. Interest expense of $0.3 million was recorded in the year ended December 31, 2021. Payment was guaranteed under the Purchase Agreement and included the issuance of a $33.0 million irrevocable standby letter of credit. The letter of credit was released upon payment of the acquisition liability in May 2021. The purchase price of the acquisition was allocated to the fair value of Partsmaster's assets and liabilities at 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 accounting for this acquisition was completed as of June 30, 2021. Partsmaster contributed $57.8 million of revenue and $1.6 million of operating income in the year ended December 31, 2021, compared to $22.6 million of revenue and $0.8 million of operating income in the four-month post-acquisition period of 2020. A summary of the purchase price allocation of the acquisition is as follows (Dollars in thousands): Cash paid and liabilities assumed Cash paid $ 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 unaudited pro forma revenue and net income for the Company for the year ended December 31, 2020 assuming the Partsmaster acquisition closed on January 1, 2019, was $396.7 million and $16.5 million, respectively. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
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 allocation between these obligations. The Company does not price its offerings based on any allocation 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. The Company has elected not to disclose 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. Disaggregated revenue by product type follows: Unaudited Year Ended December 31, Product Category 2021 2020 Fastening systems 22% 22% Cutting tools and abrasives 15% 14% Fluid power 13% 13% Specialty chemicals 10% 11% Electrical 10% 10% Aftermarket automotive supplies 7% 7% Safety 5% 6% Welding and metal repair 2% 2% Other 16% 15% 100% 100% Lawson as Lessor Partsmaster leases parts washer machines to customers through its Torrents leasing program. These leases are classified as operating leases. The leased machines are recognized as a component of Property, plant and equipment in the Consolidated Balance Sheets and the leasing revenue is recognized on a straight line basis. The Torrents machine leasing program generated $3.5 million of revenue in 2021 compared to $0.9 million of revenue in 2020 post-acquisition. The carrying value of the Torrents leasing assets as of December 31, 2021 is $1.2 million. 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, 2021 | |
Restricted Cash [Abstract] | |
Restricted Cash | Restricted Cash The Company has 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. The Company previously agreed to maintain $0.8 million in a money market account as collateral for an outside party that provided certain commercial credit card processing services for the Company, however this agreement ended in the third quarter 2021 and the $0.8 million is now unrestricted. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Inventories, gross $ 81,569 $ 67,137 Reserve for obsolete and excess inventory (7,720) (5,270) Inventories, net $ 73,849 $ 61,867 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Land $ 2,660 $ 2,650 Buildings and improvements 16,228 15,765 Machinery and equipment 27,971 26,814 Capitalized software 21,715 23,013 Furniture and fixtures 5,855 5,725 Vehicles 196 151 Construction in progress 5,964 752 80,589 74,870 Accumulated depreciation and amortization (61,761) (59,070) $ 18,828 $ 15,800 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
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, 2020 $ 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 Impact of foreign exchange 32 105 137 Balance at December 31, 2021 $ 21,384 $ 13,929 $ 35,313 (1) The $15.8 million addition to goodwill in 2020 was due to the allocation of the purchase price from the Partsmaster acquisition. (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. The goodwill related to the Screw Products reporting unit was fully impaired in 2020. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 11,388 $ (3,866) $ 7,522 $ 11,289 $ (2,733) $ 8,556 Customer relationships 12,427 (3,784) 8,643 12,349 (2,402) 9,947 $ 23,815 $ (7,650) $ 16,165 $ 23,638 $ (5,135) $ 18,503 Amortization expense of $2.5 million and $1.7 million related to intangible assets was recorded in General and administrative expenses for 2021 and 2020 , respectively. The estimated aggregate amortization expense for each of the next five years are as follows: (Dollars in thousands) Year Amortization 2022 $ 2,649 2023 2,584 2024 2,482 2025 2,145 2026 1,566 Thereafter 4,739 $ 16,165 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 United States $ 5,421 $ 16,226 Canada 6,498 4,559 Total $ 11,919 $ 20,785 Provision (benefit) for income taxes from operations for the years ended December 31, consisted of the following: (Dollars in thousands) Year Ended December 31, 2021 2020 Current income tax expense: U.S. federal $ 3,042 $ 3,858 U.S. state 777 710 Canada 1,133 1,288 Total $ 4,952 $ 5,856 Deferred income tax expense (benefit): U.S. federal $ (817) $ 236 U.S. state (394) 52 Canada (1,228) (472) Total $ (2,439) $ (184) Total income tax expense (benefit): U.S. federal $ 2,225 $ 4,094 U.S. state 383 762 Canada (95) 816 Total $ 2,513 $ 5,672 The reconciliation between the effective income tax rates and the statutory federal rates for operations are as follows: Year Ended December 31, 2021 2020 Statutory Federal rate 21.0 % 21.0 % Increase (decrease) resulting from: Change in valuation allowance - current period activity — (2.2) Change in valuation allowance - reversal (10.3) — Foreign rate differential 1.9 — Stock compensation (3.7) (2.0) Compensation deduction limitation 0.9 1.5 State and local taxes, net 3.3 3.8 Asset basis true-up 5.5 — Meals & entertainment 1.2 0.6 Change in uncertain tax positions 0.4 4.6 Provision to return differences 0.2 (0.1) Other items, net 0.7 0.1 Provision for income taxes 21.1 % 27.3 % Global Intangible Low Taxed Income (GILTI) is a deemed amount of income derived from controlled foreign corporations (CFC) in which a US person is a 10% direct or indirect shareholder. The Company owns two Canadian CFC’s, which are subject to GILTI inclusion. However, the Company can utilize a foreign tax credit to fully offset a significant portion of all the tax from the GILTI inclusion based on foreign taxes paid in Canada. At December 31, 2021, the Company had $3.5 million of U.S. federal net operating loss carryforwards which are subject to expiration beginning in 2030 and $6.5 million of various state net operating loss carryforwards which expire at varying dates through 2034. After recording pre-tax losses for many years, Lawson’s Canadian subsidiary recorded pre-tax profits in 2019 and 2020. Lawson’s Canadian subsidiary continued to generate pre-tax profits in 2021 and have utilized some of the net operating loss carryforwards. Based on available evidence, we now believe it is more likely than not that we will be able to utilize Lawson’s Canadian subsidiary deferred tax assets to offset future taxable income. Lawson released the $1.2 million valuation allowance on the Lawson Canada deferred tax assets as of December 31, 2021. As a result of acquisitions completed in recent years, the Company recorded $21.4 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, 2021 2020 Deferred tax assets: Net operating loss carryforward $ 4,073 $ 5,431 Compensation and benefits 11,407 10,980 Inventory reserve 2,222 1,772 Transaction costs 2,077 — Accounts receivable reserve 203 167 Leased assets 1,302 1,061 Property, plant & equipment 2,046 — Intangible assets 202 — Other 58 329 Total deferred tax assets 23,590 19,740 Deferred tax liabilities: Intangible assets and goodwill 1,771 1,948 Lease liabilities 2,647 1,366 Property, plant and equipment 134 (975) Other 598 503 Total deferred liabilities 5,150 2,842 Net deferred tax assets before valuation allowance 18,440 16,898 Valuation allowance — (1,257) Net deferred tax assets $ 18,440 $ 15,641 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (Dollars in thousands) December 31, 2021 2020 Balance at beginning of year $ 3,686 $ 3,242 Additions for tax positions of current year — 15 Additions for tax positions of prior years 554 1,413 Reductions for tax positions of prior year — — Lapse of statute of limitations (539) (984) Balance at end of year $ 3,701 $ 3,686 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, 2021 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 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Accrued stock-based compensation (stock performance rights) $ 16,732 $ 14,437 Accrued compensation 10,199 9,794 Accrued and withheld taxes, other than income taxes 4,113 3,788 Accrued costs related to merger agreements 3,103 — Accrued profit sharing 212 240 Accrued severance 192 1,103 Deferred revenue 800 822 Accrued health benefits 614 732 Other 10,723 7,576 $ 46,688 $ 38,492 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
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 generated by the leasing activity of Lawson as lessee for the years ended December 31, 2021 and December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type Classification 2021 2020 Consolidated Operating Lease Expense (1) Operating expenses $ 5,881 $ 4,999 Consolidated Financing Lease Amortization Operating expenses 192 226 Consolidated Financing Lease Interest Interest expense 15 28 Consolidated Financing Lease Expense 207 254 Net Lease Cost $ 6,088 $ 5,253 (1) Includes short term lease expense, which is immaterial The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of December 31, 2021 and December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type 2021 2020 Total ROU operating lease assets (1) $ 13,662 $ 8,246 Total ROU financing lease assets (2) 383 518 Total lease assets $ 14,045 $ 8,764 Total current operating lease obligation $ 4,313 $ 4,360 Total current financing lease obligation 154 208 Total current lease obligations $ 4,467 $ 4,568 Total long term operating lease obligation $ 10,713 $ 5,498 Total long term financing lease obligation 128 240 Total long term lease obligation $ 10,841 $ 5,738 (1) Operating lease assets are recorded net of accumulated amortization of $8.0 million and $5.9 million as of December 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.6 million and $0.4 million as of December 31, 2021 and December 31, 2020, respectively The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2021 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2022 $ 4,725 $ 165 $ 4,890 2023 3,944 100 4,044 2024 3,015 30 3,045 2025 1,739 — 1,739 2026 724 — 724 Thereafter 1,983 — 1,983 Total lease payments 16,130 295 16,425 Less: Interest 1,104 13 1,117 Present value of lease liabilities $ 15,026 $ 282 $ 15,308 (1) Of the $16.1 million future minimum operating lease commitments outstanding at December 31, 2021, $1.3 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 2025 and includes future minimum lease payments of $6.5 million The weighted average lease terms and interest rates of the leases held by Lawson as of December 31, 2021 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 4.5 4.1% Financing Leases 2.1 4.8% The cash outflows of the leasing activity of Lawson as lessee for the year ending December 31, 2021 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 4,846 Operating cash flows from financing leases Operating activities 15 Financing cash flows from financing leases Financing activities 222 In March 2021 the Company signed a three year extension for their lease at the McCook distribution center ("McCook"). The lease extension created a right of use asset of $5.3 million and a lease liability of $5.3 million. |
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 generated by the leasing activity of Lawson as lessee for the years ended December 31, 2021 and December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type Classification 2021 2020 Consolidated Operating Lease Expense (1) Operating expenses $ 5,881 $ 4,999 Consolidated Financing Lease Amortization Operating expenses 192 226 Consolidated Financing Lease Interest Interest expense 15 28 Consolidated Financing Lease Expense 207 254 Net Lease Cost $ 6,088 $ 5,253 (1) Includes short term lease expense, which is immaterial The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of December 31, 2021 and December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type 2021 2020 Total ROU operating lease assets (1) $ 13,662 $ 8,246 Total ROU financing lease assets (2) 383 518 Total lease assets $ 14,045 $ 8,764 Total current operating lease obligation $ 4,313 $ 4,360 Total current financing lease obligation 154 208 Total current lease obligations $ 4,467 $ 4,568 Total long term operating lease obligation $ 10,713 $ 5,498 Total long term financing lease obligation 128 240 Total long term lease obligation $ 10,841 $ 5,738 (1) Operating lease assets are recorded net of accumulated amortization of $8.0 million and $5.9 million as of December 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.6 million and $0.4 million as of December 31, 2021 and December 31, 2020, respectively The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2021 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2022 $ 4,725 $ 165 $ 4,890 2023 3,944 100 4,044 2024 3,015 30 3,045 2025 1,739 — 1,739 2026 724 — 724 Thereafter 1,983 — 1,983 Total lease payments 16,130 295 16,425 Less: Interest 1,104 13 1,117 Present value of lease liabilities $ 15,026 $ 282 $ 15,308 (1) Of the $16.1 million future minimum operating lease commitments outstanding at December 31, 2021, $1.3 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 2025 and includes future minimum lease payments of $6.5 million The weighted average lease terms and interest rates of the leases held by Lawson as of December 31, 2021 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 4.5 4.1% Financing Leases 2.1 4.8% The cash outflows of the leasing activity of Lawson as lessee for the year ending December 31, 2021 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 4,846 Operating cash flows from financing leases Operating activities 15 Financing cash flows from financing leases Financing activities 222 In March 2021 the Company signed a three year extension for their lease at the McCook distribution center ("McCook"). The lease extension created a right of use asset of $5.3 million and a lease liability of $5.3 million. |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement In October 2019, the Company entered into a Revolving Credit Agreement (the "Credit Agreement" or "Revolving Credit Facility") 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 Revolving Credit Facility matures on October 11, 2024 and provides $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 designated as alternate base rate loans, Canadian prime rate loans, Eurodollar loans, and Canadian dollar offered rate loans at the Company's request. 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. The Company was in compliance with all financial covenants as of December 31, 2021. In the third quarter of 2020, the Company entered into an amendment to the Credit Agreement which among other items temporarily increased the allowed letter of credits from $15.0 million to $40.0 million until August 31, 2021 and authorized indebtedness not to exceed $36.0 million for the acquisition of Partsmaster. Net of outstanding letters of credit, the Company had $87.1 million of borrowing availability under the Revolving Credit Facility as of December 31, 2021 and $66.0 million as of December 31, 2020. Weighted average interest rates for the years ended December 31, 2021 and December 31, 2020 were 5.02% and 2.65%, respectively. Fees are reported as interest expense and include customary charges relating to letters of credit and an unused commitment fee ranging from 0.15% to 0.30%, depending on the Total Net Leverage Ratio as defined in the Credit Agreement. Fees for the years ended December 31, 2021 and December 31, 2020 were $0.3 million governing the Revolving Credit Facility. In connection with the Revolving Credit Facility originated in 2019, deferred financing costs of $0.6 million were incurred. Deferred financing costs are amortized over the life of the debt instrument and reported as interest e xpense. As of December 31, 2021 and December 31, 2020 deferred financing costs net of accumulated amortization were $0.3 million and $0.4 million, respectively, and are included in Other assets in the Consolidated Balance Sheets . |
Accrued Acquisition Liability
Accrued Acquisition Liability | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Accrued Acquisition Liability | Accrued Acquisition Liability On 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 was discounted to its present value using an implied interest rate of 1.8%. A discounted current liability of $32.7 million was recognized as of December 31, 2020 in the Company's Consolidated Balance Sheet. In May 2021, the Company paid the outstanding $33.0 million accrued acquisition liability. Payment was guaranteed under the Purchase Agreement which included the issuance of a $33.0 million irrevocable standby letter of credit. The letter of credit was released in June 2021 subsequent to payment of the liability in May 2021. Interest expense of $0.3 million on the accrued acquisition liability was recorded in the year ended December 31, 2021, with all interest expense recognized prior to the payment of the accrued acquisition liability. |
Reserve for Severance
Reserve for Severance | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Beginning balance $ 1,251 $ 909 Charged to earnings 264 2,077 Cash paid (1,323) (1,735) Ending balance $ 192 $ 1,251 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
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. Stockholder lawsuits On January 25, 2022, a lawsuit entitled Shiva Stein v. Lawson Products, Inc. et al., Case No. 1:22-cv-00639, was filed in the United States District Court for the Southern District of New York against Lawson and the members of the Lawson board of directors (the “Stein Action”). On January 27, 2022, a lawsuit entitled Matthew Hopkins v. Lawson Products, Inc. et al, Case No. 1:22-cv-00724, was filed in the United States District Court for the Southern District of New York against Lawson and the members of the Lawson board of directors (the “Hopkins Action”). On February 7, 2022, a lawsuit entitled Ema Bell v. Lawson Products, Inc. et al, Case No. 1:22-cv-01056, was filed in the United States District Court for the Southern District of New York against Lawson, the members of the Lawson board of directors, LKCM TE Investors, LLC (the “TestEquity Equityholder”), TestEquity, Tide Sub, LLC, a wholly-owned subsidiary of Lawson (“Merger Sub 1”), 301 HW Opus Investors, LLC, (the “Gexpro Services Stockholder”), Gexpro Services and Gulf Sub, Inc., a wholly-owned subsidiary of Lawson (“Merger Sub 2”) (the “Bell Action”). On February 11, 2022, a lawsuit entitled John Yurco v. Lawson Products, Inc. et al., Case No. 1:22-cv-01201, was filed in the United States District Court for the Southern District of New York against Lawson and the members of the Lawson board of directors (the “Yurco Action”). The Stein Action, the Hopkins Action, the Bell Action and the Yurco Action are collectively referred to as the “Actions.” The Actions allege that the defendants violated Sections 14(a) (and Rule 14a-9 promulgated thereunder) and 20(a) of the Exchange Act by, among other things, omitting certain allegedly material information with respect to the Transactions (as defined in Note 1) in the Company's proxy statement. The Bell Action also alleges that the members of the Lawson board of directors breached their fiduciary duties in connection with the Transactions and that Lawson aided and abetted the members of its board of directors in such breach. The Actions seek, among other things, injunctive relief, money damages and the costs of the Actions, including reasonable attorneys’ and experts’ fees. Lawson and the members of its board of directors disagree with and intend to vigorously defend against the Actions. If the Actions are not resolved favorably on a timely basis, the Actions could delay or prevent consummation of the Transactions and result in additional costs to Lawson, including costs associated with the indemnification of directors. Additional plaintiffs may file lawsuits against Lawson and/or its directors and officers in connection with the Transactions. At this time, the Company is unable to predict the ultimate outcome of the Actions or meaningfully quantify how the final resolution of the Actions may impact its business, financial condition and results of operations. In addition, on each of February 2, 2022, February 14, 2022 and February 15, 2022, purported Lawson stockholders made demands pursuant to Section 220 of the Delaware General Corporation Law to inspect certain books and records of Lawson (collectively, the “Books and Records Demands”). One stated purpose of the Books and Records Demands is to investigate questions of director disinterestedness and independence and the possibility of wrongdoing, mismanagement and/ or material non-disclosure related to the Special Committee’s (a Special Committee was formed to independently evaluate and negotiate the terms of the Merger Agreements and related Transactions) and the Lawson board of directors’ approval of the Transactions. Lawson and the members of its board of directors disagree with and intend to vigorously defend against any claim, if asserted, arising from the Books and Records Demands. Environmental matter In 2012, it was determined a Company owned site in Decatur, Alabama, contained 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, prepare a remediation plan, and enroll the site in the Alabama Department of Environmental Management (“ADEM") voluntary cleanup program. A remediation plan was approved by ADEM in 2018. The plan consists of chemical injections throughout the affected area, as well as subsequent monitoring of the area. The injection process was completed in the first quarter of 2019 and the environmental consulting firm is monitoring the affected area. At December 31, 2021 the Company had less than $0.1 million accrued for potential monitoring costs. The costs for future monitoring are not significant and have been fully accrued. The Company does not expect to capitalize any amounts related to the remediation plan. |
Retirement and Security Bonus P
Retirement and Security Bonus Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement and Security Bonus Plans | Retirement and Security Bonus Plans The Company provides a 401(k) defined contribution plan to allow employees a pre-tax investment vehicle to save for retirement. The Company made contributions to the 401(k) plan of $3.5 million and $2.9 million for the years ended December 31, 2021 and 2020, respectively. The Company provides a Deferred Profit Savings Plan ("DPSP") for certain Canadian employees and a Registered Retirement Savings Plan ("RRSP") for other Canadian employees. Both are deferred defined contribution retirement investment plans. The Company contributed $0.3 million and $0.2 million in 2021 and 2020, 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 $0.2 million for the years ended December 31, 2021 and 2020, 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 $0.2 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. The security bonus plan is partially funded by a $7.9 million investment in the cash surrender value in life insurance of certain employees. Of the $10.9 million total liability, $0.3 million is classified as a current liability as of December 31, 2021, and the remaining $10.6 million is classified as long-term. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021, the Company had approximately 164,000 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 in the Consolidated Statements of Income and Comprehensive Income. The outstanding SPRs were granted with approximately a seven one On December 31, 2021, 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, 2021 was $26.66 per SPR using the following assumptions: Expected volatility 30.3% to 53.7% Risk-free rate of return 0.2% to 0.9% Expected term (in years) 0.1 to 2.5 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. Compensation expense of $2.1 million was recorded in General and administrative expense for the year ended December 31, 2021. 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 Cash in the amount of $0.2 million and $0.5 million was paid for SPR exercises in 2021 and 2020 , respectively. A liability of $16.7 million reflecting the estimated fair value of future pay-outs is included as a component of Accrued expenses and other liabilities in the Consolidated Balance Sheets. Activity related to the Company’s SPRs during the year ended December 31, 2021 was as follows: Number of SPRs Weighted Average Exercise Price Outstanding on December 31, 2020 581,000 $ 26.88 Exercised (4,464) 55.46 Outstanding on December 31, 2021 576,536 26.66 Exercisable on December 31, 2021 576,536 $ 26.66 The SPRs outstanding had an intrinsic value of $16.0 million as of December 31, 2021. All SPRs for plan participants have vested as of December 31, 2021, so there is no unrecognized compensation associated with any SPRs. During the year ended December 31, 2021, 8,460 SPRs with a fair value of $0.2 million vested. At December 31, 2021, the weighted average remaining contractual term was 1.1 years for all outstanding SPRs. Restricted Stock Awards Restricted stock awards ("RSAs") generally vest over a one three Compensation expense of $1.6 million and $1.2 million related to the RSAs was recorded in General and administrative expenses for 2021 and 2020, respectively. Activity related to the Company’s RSAs during the year ended December 31, 2021 was as follows: Restricted Stock Awards Outstanding on December 31, 2020 45,799 Granted 59,091 Exchanged for common shares (32,661) Outstanding on December 31, 2021 72,229 As of December 31, 2021, there was $1.6 million of total unrecognized compensation cost related to RSAs that will be recognized over a weighted average period of 1.5 years . The awards granted in 2021 had a weighted average grant date fair value of $48.86 per share. Market Stock Units Market Stock Units ("MSUs") are exchangeable for between 0% to 150% of the Company's common shares at the end of the vesting period based on the trailing 60 day average closing price of the Company's common stock. The value of the MSUs was determined using a geometric brownian motion model that, based on certain variables, generates a large number of random trials simulating the price of the common stock over the measurement period. Expense of $0.7 million related to MSUs was recorded in General and administrative expenses in both years ended December 31, 2021 and 2020, respectively. Activity related to the Company’s MSUs during the year ended December 31, 2021 was as follows: Number of Market Stock Units Maximum Shares Potentially Issuable Outstanding on December 31, 2020 137,256 195,723 Granted 19,688 29,568 Exchanged for stock (28,804) (42,811) Outstanding on December 31, 2021 128,140 182,480 Stock Options Each stock option can be exchanged for one share of the Company’s common stock at the stated exercise price. No stock option expense was recorded in 2021 and 2020. There was no unrecognized compensation related to stock options as of December 31, 2021 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 fully vested stock options outstanding on December 31, 2021 with a weighted average exercise price of $27.70. Performance Awards Performance Awards ("PAs") are exchangeable for between 0% to 150% of the Company's common shares, or the equivalent amount in cash, based upon the achievement of certain financial performance metrics at the end of the vesting period. Expense of $0.4 million and $0.1 million related to the PAs was recorded in General and administrative expenses for the year ended December 31, 2021 and December 31, 2020, respectively. Activity related to the Company’s PAs during the year ended December 31, 2021 was as follows: Number of Performance Awards Maximum Shares Potentially Issuable Outstanding on December 31, 2020 10,852 16,278 Granted 15,723 23,585 Outstanding on December 31, 2021 26,575 39,863 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Net sales Lawson $ 371,668 $ 312,803 Bolt 46,065 38,788 Consolidated total $ 417,733 $ 351,591 Gross profit Lawson $ 200,475 $ 171,258 Bolt 18,760 15,280 Consolidated total $ 219,235 $ 186,538 Operating Income Lawson $ 8,193 $ 17,715 Bolt 3,794 2,835 Consolidated total 11,987 20,550 Interest expense (869) (654) Other income, net 801 889 Income before income taxes $ 11,919 $ 20,785 Capital expenditures Lawson $ 7,460 $ 1,529 Bolt 733 158 Consolidated total $ 8,193 $ 1,687 Depreciation and amortization Lawson $ 6,736 $ 5,343 Bolt 1,605 1,358 Consolidated total $ 8,341 $ 6,701 Total assets Lawson $ 217,856 $ 221,490 Bolt 47,085 43,533 Investment in Subsidiary (8,784) (8,719) Consolidated total $ 256,157 $ 256,304 Financial information related to the Company’s operations by geographic area follows: (Dollars in Thousands) Year Ended December 31, 2021 2020 Net sales (1) United States $ 337,981 $ 283,261 Canada 79,752 68,330 Consolidated total $ 417,733 $ 351,591 Long-lived assets (2) United States $ 50,491 $ 44,395 Canada 34,206 34,180 Consolidated total $ 84,697 $ 78,575 (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, 2021 | |
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. The Company did not repurchase any shares under the stock repurchase program in 2021. In 2020 the Company purchased 47,504 shares of common stock at an average purchase price of $36.93 under the repurchase program. At December 31, 2021, the Company had approximately $4.5 million available under the repurchase plan. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions During the year ended December 31, 2021 the Company purchased approximately $0.1 million of inventory from a company owned by an immediate relative of a Board member at fair market value. No liabilities exist with respect to the related party transactions as of December 31, 2021. As described in greater detail in Note 1 – Description of Business, on December 29, 2021 the Company entered into two merger agreements with TestEquity and Gexpro Services. Lawson, TestEquity, and Gexpro Services are related parties due to common ownership between the three entities. TestEquity and Gexpro Services are affiliated with Luther King Capital Management Corporation (“LKCM”) which, together with certain of its affiliated entities, is a significant stockholder of Lawson. |
COVID-19 Risks and Uncertaintie
COVID-19 Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
COVID-19 Risks and Uncertainties | COVID-19 Risks and Uncertainties Various events related to COVID-19 may impact revenue, product sourcing, sales functions, and customers' ability to pay timely. The government of the State of Illinois defines Lawson Products as an essential business. A change in this status could result in the temporary closure of our business if the COVID-19 pandemic worsens, and government restrictions are reimposed to require business shutdowns. The COVID-19 pandemic could result in a temporary closure of any or all of our office space, distribution facilities, or Bolt branch locations, as well as disruptions to our supply chain and interactions with our suppliers and customers. The pandemic may have a material adverse impact on future financial results, liquidity, and overall performance of the Company. 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 elected to defer a total of $3.5 million of employer side social security payments in accordance with the CARES Act. The Company paid $1.7 million of accrued deferred payroll taxes in the fourth quarter of 2021, and the remaining balance is expected to be paid 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. During 2020, the Company 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 and 2021 the Company recorded $1.4 million and $0.2 million, respectively, in subsidies from the CEWS program which is recognized as a reduction to selling, general and administrative expenses in the Consolidated Statements of Income and Comprehensive Income . |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 $ 654 $ 504 $ (360) $ 798 Year ended December 31, 2020 $ 593 $ 578 $ (517) $ 654 Valuation allowance for deferred tax assets: Year ended December 31, 2021 $ 1,257 $ — $ (1,257) $ — Year ended December 31, 2020 $ 1,235 $ 22 $ — $ 1,257 (1) Deductions reflect uncollected receivables written off, net of recoveries and translation adjustments. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event Recent Cyber Incident On February 8, 2022, Lawson became aware that its computer network was the subject of a cyber incident potentially involving unauthorized access. It is possible that certain confidential business information and personnel records may have been compromised. Lawson has engaged a cybersecurity forensics firm to assist in the investigation of the incident and to assist in securing its computer network. Depending on the nature of any information that may have been compromised, Lawson may be required to notify the parties whose information was compromised of the incident as well as various governmental agencies and may be required to take other actions in the future, such as offering credit monitoring services. Lawson is continuing to investigate the incident as well as potential corrective and remedial actions to take in respect of the incident. The Company is in the early stage of the investigation, and at this time, is unable to estimate the cost of any remediation that may be required . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
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. |
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 has adopted the practical expedient within ASC 340 to recognize incremental costs to obtain a contract, primarily employee related costs, as expense when incurred since the amortization period of the asset that the Company otherwise would have recognized is one year or less. 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, 2021 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. |
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 Sheets. 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 in the Consolidated Statements of Income and Comprehensive Income, 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 in the Consolidated Statements of Income and Comprehensive Income. |
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 $35.3 million and $35.2 million of goodwill in 2021 and 2020, 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. |
Intangible Assets | The Company's intangible assets consist of trade names and customer relationships. Intangible assets are amortized over a weighted average 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 2020 or 2021. |
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 uncertain 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 in the Consolidated Statements of Income and Comprehensive Income. |
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 a component of Property, plant and equipment in the Consolidated Balance Sheets 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, 2021 and December 31, 2020 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 - Not Yet Adopted | In June 2016, the FASB issued ASU 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, 2021 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation to Acquisition | A summary of the purchase price allocation of the acquisition is as follows (Dollars in thousands): Cash paid and liabilities assumed Cash paid $ 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 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated revenue by product type follows: Unaudited Year Ended December 31, Product Category 2021 2020 Fastening systems 22% 22% Cutting tools and abrasives 15% 14% Fluid power 13% 13% Specialty chemicals 10% 11% Electrical 10% 10% Aftermarket automotive supplies 7% 7% Safety 5% 6% Welding and metal repair 2% 2% Other 16% 15% 100% 100% |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Inventories, gross $ 81,569 $ 67,137 Reserve for obsolete and excess inventory (7,720) (5,270) Inventories, net $ 73,849 $ 61,867 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Land $ 2,660 $ 2,650 Buildings and improvements 16,228 15,765 Machinery and equipment 27,971 26,814 Capitalized software 21,715 23,013 Furniture and fixtures 5,855 5,725 Vehicles 196 151 Construction in progress 5,964 752 80,589 74,870 Accumulated depreciation and amortization (61,761) (59,070) $ 18,828 $ 15,800 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2020 $ 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 Impact of foreign exchange 32 105 137 Balance at December 31, 2021 $ 21,384 $ 13,929 $ 35,313 (1) The $15.8 million addition to goodwill in 2020 was due to the allocation of the purchase price from the Partsmaster acquisition. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 11,388 $ (3,866) $ 7,522 $ 11,289 $ (2,733) $ 8,556 Customer relationships 12,427 (3,784) 8,643 12,349 (2,402) 9,947 $ 23,815 $ (7,650) $ 16,165 $ 23,638 $ (5,135) $ 18,503 |
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 2022 $ 2,649 2023 2,584 2024 2,482 2025 2,145 2026 1,566 Thereafter 4,739 $ 16,165 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 United States $ 5,421 $ 16,226 Canada 6,498 4,559 Total $ 11,919 $ 20,785 |
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, 2021 2020 Current income tax expense: U.S. federal $ 3,042 $ 3,858 U.S. state 777 710 Canada 1,133 1,288 Total $ 4,952 $ 5,856 Deferred income tax expense (benefit): U.S. federal $ (817) $ 236 U.S. state (394) 52 Canada (1,228) (472) Total $ (2,439) $ (184) Total income tax expense (benefit): U.S. federal $ 2,225 $ 4,094 U.S. state 383 762 Canada (95) 816 Total $ 2,513 $ 5,672 |
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, 2021 2020 Statutory Federal rate 21.0 % 21.0 % Increase (decrease) resulting from: Change in valuation allowance - current period activity — (2.2) Change in valuation allowance - reversal (10.3) — Foreign rate differential 1.9 — Stock compensation (3.7) (2.0) Compensation deduction limitation 0.9 1.5 State and local taxes, net 3.3 3.8 Asset basis true-up 5.5 — Meals & entertainment 1.2 0.6 Change in uncertain tax positions 0.4 4.6 Provision to return differences 0.2 (0.1) Other items, net 0.7 0.1 Provision for income taxes 21.1 % 27.3 % |
Deferred Tax Assets and Liabilities | Deferred income tax assets and liabilities contain the following temporary differences: (Dollars in thousands) December 31, 2021 2020 Deferred tax assets: Net operating loss carryforward $ 4,073 $ 5,431 Compensation and benefits 11,407 10,980 Inventory reserve 2,222 1,772 Transaction costs 2,077 — Accounts receivable reserve 203 167 Leased assets 1,302 1,061 Property, plant & equipment 2,046 — Intangible assets 202 — Other 58 329 Total deferred tax assets 23,590 19,740 Deferred tax liabilities: Intangible assets and goodwill 1,771 1,948 Lease liabilities 2,647 1,366 Property, plant and equipment 134 (975) Other 598 503 Total deferred liabilities 5,150 2,842 Net deferred tax assets before valuation allowance 18,440 16,898 Valuation allowance — (1,257) Net deferred tax assets $ 18,440 $ 15,641 |
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, 2021 2020 Balance at beginning of year $ 3,686 $ 3,242 Additions for tax positions of current year — 15 Additions for tax positions of prior years 554 1,413 Reductions for tax positions of prior year — — Lapse of statute of limitations (539) (984) Balance at end of year $ 3,701 $ 3,686 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Accrued stock-based compensation (stock performance rights) $ 16,732 $ 14,437 Accrued compensation 10,199 9,794 Accrued and withheld taxes, other than income taxes 4,113 3,788 Accrued costs related to merger agreements 3,103 — Accrued profit sharing 212 240 Accrued severance 192 1,103 Deferred revenue 800 822 Accrued health benefits 614 732 Other 10,723 7,576 $ 46,688 $ 38,492 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease Cost | The expenses generated by the leasing activity of Lawson as lessee for the years ended December 31, 2021 and December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type Classification 2021 2020 Consolidated Operating Lease Expense (1) Operating expenses $ 5,881 $ 4,999 Consolidated Financing Lease Amortization Operating expenses 192 226 Consolidated Financing Lease Interest Interest expense 15 28 Consolidated Financing Lease Expense 207 254 Net Lease Cost $ 6,088 $ 5,253 (1) Includes short term lease expense, which is immaterial The weighted average lease terms and interest rates of the leases held by Lawson as of December 31, 2021 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 4.5 4.1% Financing Leases 2.1 4.8% The cash outflows of the leasing activity of Lawson as lessee for the year ending December 31, 2021 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 4,846 Operating cash flows from financing leases Operating activities 15 Financing cash flows from financing leases Financing activities 222 |
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, 2021 and December 31, 2020 were as follows: (Dollars in Thousands) Year Ended December 31, Lease Type 2021 2020 Total ROU operating lease assets (1) $ 13,662 $ 8,246 Total ROU financing lease assets (2) 383 518 Total lease assets $ 14,045 $ 8,764 Total current operating lease obligation $ 4,313 $ 4,360 Total current financing lease obligation 154 208 Total current lease obligations $ 4,467 $ 4,568 Total long term operating lease obligation $ 10,713 $ 5,498 Total long term financing lease obligation 128 240 Total long term lease obligation $ 10,841 $ 5,738 (1) Operating lease assets are recorded net of accumulated amortization of $8.0 million and $5.9 million as of December 31, 2021 and December 31, 2020, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.6 million and $0.4 million as of December 31, 2021 and December 31, 2020, respectively |
Value of Lease Liabilities | The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2021 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2022 $ 4,725 $ 165 $ 4,890 2023 3,944 100 4,044 2024 3,015 30 3,045 2025 1,739 — 1,739 2026 724 — 724 Thereafter 1,983 — 1,983 Total lease payments 16,130 295 16,425 Less: Interest 1,104 13 1,117 Present value of lease liabilities $ 15,026 $ 282 $ 15,308 (1) Of the $16.1 million future minimum operating lease commitments outstanding at December 31, 2021, $1.3 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 2025 and includes future minimum lease payments of $6.5 million |
Value of Lease Liabilities | The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of December 31, 2021 were as follows (Dollars in thousands): Year Ended December 31, Operating Leases Financing Leases Total 2022 $ 4,725 $ 165 $ 4,890 2023 3,944 100 4,044 2024 3,015 30 3,045 2025 1,739 — 1,739 2026 724 — 724 Thereafter 1,983 — 1,983 Total lease payments 16,130 295 16,425 Less: Interest 1,104 13 1,117 Present value of lease liabilities $ 15,026 $ 282 $ 15,308 (1) Of the $16.1 million future minimum operating lease commitments outstanding at December 31, 2021, $1.3 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 2025 and includes future minimum lease payments of $6.5 million |
Reserve for Severance (Tables)
Reserve for Severance (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Beginning balance $ 1,251 $ 909 Charged to earnings 264 2,077 Cash paid (1,323) (1,735) Ending balance $ 192 $ 1,251 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Valuation Assumptions | The weighted-average estimated value of SPRs outstanding as of December 31, 2021 was $26.66 per SPR using the following assumptions: Expected volatility 30.3% to 53.7% Risk-free rate of return 0.2% to 0.9% Expected term (in years) 0.1 to 2.5 Expected annual dividend $0 |
Activity Related to SPRs | Activity related to the Company’s SPRs during the year ended December 31, 2021 was as follows: Number of SPRs Weighted Average Exercise Price Outstanding on December 31, 2020 581,000 $ 26.88 Exercised (4,464) 55.46 Outstanding on December 31, 2021 576,536 26.66 Exercisable on December 31, 2021 576,536 $ 26.66 |
Activity Related to RSAs | Activity related to the Company’s RSAs during the year ended December 31, 2021 was as follows: Restricted Stock Awards Outstanding on December 31, 2020 45,799 Granted 59,091 Exchanged for common shares (32,661) Outstanding on December 31, 2021 72,229 |
MSU Rollforward | Activity related to the Company’s MSUs during the year ended December 31, 2021 was as follows: Number of Market Stock Units Maximum Shares Potentially Issuable Outstanding on December 31, 2020 137,256 195,723 Granted 19,688 29,568 Exchanged for stock (28,804) (42,811) Outstanding on December 31, 2021 128,140 182,480 |
Share-based Payment Arrangement, Performance Shares, Activity | Activity related to the Company’s PAs during the year ended December 31, 2021 was as follows: Number of Performance Awards Maximum Shares Potentially Issuable Outstanding on December 31, 2020 10,852 16,278 Granted 15,723 23,585 Outstanding on December 31, 2021 26,575 39,863 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 Net sales Lawson $ 371,668 $ 312,803 Bolt 46,065 38,788 Consolidated total $ 417,733 $ 351,591 Gross profit Lawson $ 200,475 $ 171,258 Bolt 18,760 15,280 Consolidated total $ 219,235 $ 186,538 Operating Income Lawson $ 8,193 $ 17,715 Bolt 3,794 2,835 Consolidated total 11,987 20,550 Interest expense (869) (654) Other income, net 801 889 Income before income taxes $ 11,919 $ 20,785 Capital expenditures Lawson $ 7,460 $ 1,529 Bolt 733 158 Consolidated total $ 8,193 $ 1,687 Depreciation and amortization Lawson $ 6,736 $ 5,343 Bolt 1,605 1,358 Consolidated total $ 8,341 $ 6,701 Total assets Lawson $ 217,856 $ 221,490 Bolt 47,085 43,533 Investment in Subsidiary (8,784) (8,719) Consolidated total $ 256,157 $ 256,304 |
Financial information by Geographic Area, Continuing Operations | Financial information related to the Company’s operations by geographic area follows: (Dollars in Thousands) Year Ended December 31, 2021 2020 Net sales (1) United States $ 337,981 $ 283,261 Canada 79,752 68,330 Consolidated total $ 417,733 $ 351,591 Long-lived assets (2) United States $ 50,491 $ 44,395 Canada 34,206 34,180 Consolidated total $ 84,697 $ 78,575 (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) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2022USD ($) | Dec. 31, 2022earnoutshares | Dec. 31, 2021branchsegment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Number of branches | branch | 14 | ||
TestEquity and Gexpro Services | Forecast | Subsequent Event | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Shares issued in acquisition (in shares) | 12,000,000 | ||
TestEquity | Forecast | Subsequent Event | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Shares issued in acquisition (in shares) | 3,300,000 | ||
Additional shares issued in acquisition (in shares) | 700,000 | ||
Termination fee | $ | $ 4,000,000 | ||
Gexpro Services | Forecast | Subsequent Event | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Shares issued in acquisition (in shares) | 7,000,000 | ||
Additional shares issued in acquisition (in shares) | 1,000,000 | ||
Number of earnout mechanisms | earnout | 2 | ||
Termination fee | $ | $ 6,000,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)reportingUnitrevenueStreamshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Number of revenue streams | revenueStream | 2 | ||
Depreciation | $ 5,000,000 | $ 4,400,000 | |
Amortization expense of capitalized software | 800,000 | 600,000 | |
Goodwill | $ 35,313,000 | 35,176,000 | $ 20,923,000 |
Number of reporting units | reportingUnit | 4 | ||
Impairment of long-lived assets | $ 0 | $ 0 | |
Treasury stock acquired (in shares) | shares | 0 | 47,504 | |
Shares paid for tax withholding for share based compensation (in shares) | shares | 20,923 | 32,682 | |
Cost of treasury stock repurchased | $ 1,018,000 | $ 3,254,000 | |
Treasury Stock | |||
Property, Plant and Equipment [Line Items] | |||
Cost of treasury stock repurchased | $ 1,018,000 | $ 3,254,000 | |
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, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |||||
Payments for purchase | $ 33,000 | $ 2,300 | |||
Accrued acquisition liability | 0 | 32,673 | |||
Interest expense | 869 | 654 | |||
Goodwill | 35,313 | 35,176 | $ 20,923 | ||
Revenue | 396,700 | 16,500 | |||
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 | $ 33,000 | |||
Accrued acquisition liability | $ 32,700 | 32,700 | |||
Interest expense | 300 | ||||
Goodwill | 15,816 | ||||
Revenue since acquisition | 57,800 | 22,600 | |||
Net income | $ 1,600 | $ 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 |
Acquisition - Purchase Price Al
Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2020 | Dec. 31, 2019 |
Fair value of assets acquired | ||||
Goodwill | $ 35,313 | $ 35,176 | $ 20,923 | |
Right of use asset | $ 620 | |||
Partsmaster | ||||
Cash paid and liabilities assumed | ||||
Cash paid | 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 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Millions | 4 Months Ended | 12 Months Ended |
Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($)revenueStreamperformanceObligationsegment | |
Revenue from Contract with Customer [Abstract] | ||
Number of performance obligations | performanceObligation | 2 | |
Number of revenue streams | revenueStream | 2 | |
Number of operating segments | segment | 2 | |
Revenue generated by operating leases acquired in acquisition | $ 0.9 | $ 3.5 |
Carrying value of Torrents lease | $ 1.2 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - Product Concentration Risk - Revenue from Contract with Customer Benchmark | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
Fastening systems | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 22.00% | 22.00% |
Cutting tools and abrasives | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 14.00% |
Fluid power | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 13.00% | 13.00% |
Specialty chemicals | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 11.00% |
Electrical | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Aftermarket automotive supplies | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 7.00% | 7.00% |
Safety | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 5.00% | 6.00% |
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 | 16.00% | 15.00% |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Restricted Cash [Abstract] | ||
Restricted cash | $ 198 | $ 998 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 198 | $ 998 |
Guaranteed Investment Certificate | ||
Restricted Cash [Abstract] | ||
Restricted cash | 200 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 200 | |
Money Market Funds | ||
Restricted Cash [Abstract] | ||
Restricted cash | 800 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 800 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Components of inventories | ||
Inventories, gross | $ 81,569 | $ 67,137 |
Reserve for obsolete and excess inventory | (7,720) | (5,270) |
Inventories, net | $ 73,849 | $ 61,867 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 80,589 | $ 74,870 |
Accumulated depreciation and amortization | (61,761) | (59,070) |
Property, plant and equipment, less accumulated depreciation and amortization | 18,828 | 15,800 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,660 | 2,650 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 16,228 | 15,765 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 27,971 | 26,814 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 21,715 | 23,013 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,855 | 5,725 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 196 | 151 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 5,964 | $ 752 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 35,176 | $ 20,923 |
Impact of foreign exchange | 137 | 355 |
Acquisition | 15,816 | |
Impairment | 0 | (1,918) |
Goodwill, ending balance | 35,313 | 35,176 |
Lawson | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 21,352 | 7,369 |
Impact of foreign exchange | 32 | 85 |
Acquisition | 15,816 | |
Impairment | (1,918) | |
Goodwill, ending balance | 21,384 | 21,352 |
Bolt | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 13,824 | 13,554 |
Impact of foreign exchange | 105 | 270 |
Acquisition | 0 | |
Impairment | 0 | |
Goodwill, ending balance | $ 13,929 | $ 13,824 |
Intangible assets - Schedule of
Intangible assets - Schedule of Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 23,815 | $ 23,638 |
Accumulated Amortization | (7,650) | (5,135) |
Net Carrying Value | 16,165 | 18,503 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,388 | 11,289 |
Accumulated Amortization | (3,866) | (2,733) |
Net Carrying Value | 7,522 | 8,556 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,427 | 12,349 |
Accumulated Amortization | (3,784) | (2,402) |
Net Carrying Value | $ 8,643 | $ 9,947 |
Intangible assets - Narrative (
Intangible assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization expense | $ 2.5 | $ 1.7 |
Intangible assets - Future Amor
Intangible assets - Future Amortization Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2022 | $ 2,649 | |
2023 | 2,584 | |
2024 | 2,482 | |
2025 | 2,145 | |
2026 | 1,566 | |
Thereafter | 4,739 | |
Net Carrying Value | $ 16,165 | $ 18,503 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income (loss) from continuing operations before income taxes | ||
United States | $ 5,421 | $ 16,226 |
Canada | 6,498 | 4,559 |
Income before income taxes | $ 11,919 | $ 20,785 |
Income Taxes - Provision (Benef
Income Taxes - Provision (Benefit) for Income taxes from Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current income tax expense: | ||
U.S. federal | $ 3,042 | $ 3,858 |
U.S. state | 777 | 710 |
Canada | 1,133 | 1,288 |
Total | 4,952 | 5,856 |
Deferred income tax expense (benefit): | ||
U.S. federal | (817) | 236 |
U.S. state | (394) | 52 |
Canada | (1,228) | (472) |
Total | (2,439) | (184) |
Total income tax expense (benefit): | ||
U.S. federal | 2,225 | 4,094 |
U.S. state | 383 | 762 |
Canada | (95) | 816 |
Total | $ 2,513 | $ 5,672 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
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 | (10.30%) | (2.20%) |
Foreign rate differential | 1.90% | 0.00% |
Stock compensation | (3.70%) | (2.00%) |
Compensation deduction limitation | 0.90% | 1.50% |
State and local taxes, net | 3.30% | 3.80% |
Asset basis true-up | 5.50% | 0.00% |
Meals & entertainment | 1.20% | 0.60% |
Change in uncertain tax positions | 0.40% | 4.60% |
Provision to return differences | 0.20% | (0.10%) |
Other items, net | 0.70% | 0.10% |
Provision for income taxes | 21.10% | 27.30% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
US federal net operating loss carryforwards | $ 3.5 | |
Various state net operating loss carryforwards | 6.5 | |
Tax deductible goodwill | 21.4 | |
Income Tax Contingency [Line Items] | ||
Unrecognized tax benefits, including interest and net operating losses | 3.9 | $ 3.7 |
Canada | ||
Income Tax Contingency [Line Items] | ||
Valuation allowance released | $ (1.2) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 4,073 | $ 5,431 |
Compensation and benefits | 11,407 | 10,980 |
Inventory reserve | 2,222 | 1,772 |
Transaction costs | 2,077 | 0 |
Accounts receivable reserve | 203 | 167 |
Leased assets | 1,302 | 1,061 |
Property, plant & equipment | 2,046 | 0 |
Intangible assets | 202 | 0 |
Other | 58 | 329 |
Total deferred tax assets | 23,590 | 19,740 |
Deferred tax liabilities: | ||
Intangible assets and goodwill | 1,771 | 1,948 |
Lease liabilities | 2,647 | 1,366 |
Property, plant and equipment | 134 | (975) |
Other | 598 | 503 |
Total deferred liabilities | 5,150 | 2,842 |
Net deferred assets before valuation allowance | 18,440 | 16,898 |
Valuation allowance | 0 | (1,257) |
Net deferred assets | $ 18,440 | $ 15,641 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 3,686 | $ 3,242 |
Additions for tax positions of current year | 0 | 15 |
Additions for tax positions of prior years | 554 | 1,413 |
Reductions for tax positions of prior year | 0 | 0 |
Lapse of statute of limitations | (539) | (984) |
Balance at end of year | $ 3,701 | $ 3,686 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued stock-based compensation (stock performance rights) | $ 16,732 | $ 14,437 |
Accrued compensation | 10,199 | 9,794 |
Accrued and withheld taxes, other than income taxes | 4,113 | 3,788 |
Accrued costs related to merger agreements | 3,103 | 0 |
Accrued profit sharing | 212 | 240 |
Accrued severance | 192 | 1,103 |
Deferred revenue | 800 | 822 |
Accrued health benefits | 614 | 732 |
Other | 10,723 | 7,576 |
Total accrued liabilities | $ 46,688 | $ 38,492 |
Leases - Net Lease Cost (Detail
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Consolidated Operating Lease Expense | $ 4,999 | $ 5,881 |
Consolidated Financing Lease Amortization | 226 | 192 |
Consolidated Financing Lease Interest | 28 | 15 |
Consolidated Financing Lease Expense | 254 | 207 |
Net Lease Cost | $ 5,253 | $ 6,088 |
Leases - Net Lease Assets and L
Leases - Net Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Total ROU operating lease assets | $ 13,662 | $ 8,246 |
Total ROU financing lease assets | 383 | 518 |
Total lease assets | $ 14,045 | $ 8,764 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total lease assets | Total lease assets |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total lease assets | Total lease assets |
Total current operating lease obligation | $ 4,313 | $ 4,360 |
Total current financing lease obligation | 154 | 208 |
Total current lease obligations | $ 4,467 | $ 4,568 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total current lease obligations | Total current lease obligations |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total current lease obligations | Total current lease obligations |
Total long term operating lease obligation | $ 10,713 | $ 5,498 |
Total long term financing lease obligation | 128 | 240 |
Total long term lease obligation | $ 10,841 | $ 5,738 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total long term lease obligation | Total long term lease obligation |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total long term lease obligation | Total long term lease obligation |
Operating lease accumulated depreciation | $ 8,000 | $ 5,900 |
Finance lease accumulated depreciation | $ 600 | $ 400 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2022 | $ 4,725 | |
2023 | 3,944 | |
2024 | 3,015 | |
2025 | 1,739 | |
2026 | 724 | |
Thereafter | 1,983 | |
Total lease payments | 16,130 | |
Less: Interest | 1,104 | |
Present value of lease liabilities | 15,026 | |
Financing Leases | ||
2022 | 165 | |
2023 | 100 | |
2024 | 30 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total lease payments | 295 | |
Less: Interest | 13 | |
Present value of lease liabilities | 282 | |
Total | ||
2022 | 4,890 | |
2023 | 4,044 | |
2024 | 3,045 | |
2025 | 1,739 | |
2026 | 724 | |
Thereafter | 1,983 | |
Total lease payments | 16,425 | |
Less: Interest | 1,117 | |
Present value of lease liabilities | $ 15,308 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Lease obligation | Lease obligation |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Lease obligation | Lease obligation |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Lease Liability, Noncurrent | Lease Liability, Noncurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Lease Liability, Noncurrent | Lease Liability, Noncurrent |
Lessee, Lease, Description [Line Items] | ||
Lease liability | $ 16,130 | |
Company Headquarters | ||
Operating Leases | ||
Total lease payments | 1,300 | |
Lessee, Lease, Description [Line Items] | ||
Lease liability | 1,300 | |
McCook facility | ||
Operating Leases | ||
Total lease payments | 6,500 | |
Lessee, Lease, Description [Line Items] | ||
Lease liability | $ 6,500 |
Leases - Terms and Interest Rat
Leases - Terms and Interest Rate (Details) | Dec. 31, 2021 |
Leases [Abstract] | |
Operating Leases, Weighted Average Term (in years) | 4 years 6 months |
Operating Leases, Weighted Average Interest Rate (as percent) | 4.10% |
Finance Leases, Weighted Average Term (in years) | 2 years 1 month 6 days |
Finance Leases, Weighted Average Interest Rate (as percent) | 4.80% |
Leases - Cash Flows (Details)
Leases - Cash Flows (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 4,846 |
Operating cash flows from financing leases | 15 |
Financing cash flows from financing leases | $ 222 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Lessee, Lease, Description [Line Items] | |||
Renewal term (in years) | 3 years | ||
Operating ROU Asset | $ 13,662 | $ 8,246 | |
Operating lease liabilities | $ 15,026 | ||
Building | |||
Lessee, Lease, Description [Line Items] | |||
Operating ROU Asset | $ 5,300 | ||
Operating lease liabilities | $ 5,300 |
Credit Agreement (Details)
Credit Agreement (Details) - Line of Credit | 12 Months Ended | ||||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Line of Credit Facility [Line Items] | |||||
Weighted average interest rate | 5.02% | 2.65% | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility, borrowing capacity | $ 100,000,000 | ||||
Maximum borrowing capacity | $ 150,000,000 | ||||
EBITDA To Fixed Charge Coverage Ratio | 1.15 | ||||
Total Net Leverage Ratio | 3.25 | ||||
Maximum total net leverage ratio | 3.75 | ||||
Default to other indebtedness | $ 5,000,000 | ||||
Allowable indebtedness for acquisition | $ 36,000,000 | ||||
Line of credit facility, remaining borrowing capacity | 87,100,000 | 66,000,000 | |||
Commitment fee | 300,000 | 300,000 | |||
Deferred financing costs incurred | $ 600,000 | ||||
Deferred financing costs net of accumulated amortization | $ 300,000 | $ 400,000 | |||
Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Letters of credit | $ 40,000,000 | $ 15,000,000 | |||
Letter of Credit | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee percentage | 0.15% | ||||
Letter of Credit | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee percentage | 0.30% |
Accrued Acquisition Liability (
Accrued Acquisition Liability (Details) - USD ($) $ in Thousands | Aug. 31, 2020 | May 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Payments for purchase | $ 33,000 | $ 2,300 | ||
Implied interest rate | 1.80% | |||
Accrued acquisition liability | 0 | $ 32,673 | ||
Interest expense | 300 | |||
Partsmaster | ||||
Business Acquisition [Line Items] | ||||
Payments for purchase | $ 2,300 | $ 33,000 | ||
Accrued acquisition liability | $ 32,700 | $ 32,700 |
Reserve for Severance - Activit
Reserve for Severance - Activity in Reserve (Details) - Employee Severance - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reserve for severance and related payments | ||
Balance at beginning of period | $ 1,251 | $ 909 |
Charged to earnings | 264 | 2,077 |
Cash paid | (1,323) | (1,735) |
Balance at end of the period | $ 192 | $ 1,251 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2021USD ($) |
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, 2021 | Dec. 31, 2020 | |
Retirement and Security Bonus Plans | ||
Cash surrender value in life insurance of certain employees | $ 7,900 | |
Total liability | 123,150 | $ 133,882 |
Current liabilities | 72,244 | 97,995 |
Security bonus plan | Certain Canadian Employees | ||
Retirement and Security Bonus Plans | ||
Expense recognized | 300 | 200 |
Security bonus plan | Certain Sales, Office and Warehouse Employees | ||
Retirement and Security Bonus Plans | ||
Expense recognized | 200 | 200 |
Deferred Bonus | ||
Retirement and Security Bonus Plans | ||
Expense recognized | $ 200 | 300 |
Initial vesting percentage | 25.00% | |
Minimum vesting period (in years) | 5 years | |
Annual vesting percentage after initial period (as a percent) | 5.00% | |
Total liability | $ 10,900 | |
Current liabilities | 300 | |
Long-term liabilities | 10,600 | |
Postemployment Retirement Benefits | ||
Retirement and Security Bonus Plans | ||
401k Employer matching contributions | $ 3,500 | $ 2,900 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Plan Administration (Details) - 2009 Equity Compensation Plan | 12 Months Ended |
Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares available for grant (in shares) | 164,000 |
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, 2021 | Dec. 31, 2020 | |
Valuation assumptions: | ||
Stock options expense | $ 0 | $ 0 |
Cash paid out for SPR exercises | 200,000 | 500,000 |
Liability reflecting estimated fair value of future pay-outs | $ 16,732,000 | $ 14,437,000 |
Stock Performance Rights | ||
Stock Performance Rights | ||
Weighted average estimated value of SPRs outstanding (in USD per share) | $ 26.66 | |
Valuation assumptions: | ||
Expected volatility, minimum, percent | 30.30% | |
Expected volatility, maximum, percent | 53.70% | |
Risk-free rate of return, minimum | 0.20% | |
Risk-free rate of return, maximum | 0.90% | |
Expected annual dividend | $ 0 | |
Stock options expense | 2,100,000 | |
Liability reflecting estimated fair value of future pay-outs | $ 16,700,000 | |
Number of SPRs | ||
Outstanding at beginning of period (in shares) | 581,000 | |
Exercised (in shares) | (4,464) | |
Outstanding at end of period (in shares) | 576,536 | 581,000 |
Exercisable (in shares) | 576,536 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in USD per share) | $ 26.66 | $ 26.88 |
Exercised (in USD per share) | 55.46 | |
Outstanding at end of period (in USD per share) | 26.66 | |
Exercisable (in USD per share) | $ 26.66 | |
SPRs outstanding, intrinsic value | $ 16,000,000 | |
Shares vested (in shares) | 8,460 | |
Vested in period, fair value | $ 200,000 | |
Weighted average remaining contractual term, SPRs outstanding (in years) | 1 year 1 month 6 days | |
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) | 1 month 6 days | |
Stock Performance Rights | Maximum | ||
Stock Performance Rights | ||
Award vesting period (in years) | 3 years | |
Valuation assumptions: | ||
Expected term (in years) | 2 years 6 months | |
Stock options expense | $ (100,000) |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Restricted Stock Awards (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 0 | $ 0 |
Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 1,600,000 | $ 1,200,000 |
Restricted Stock Awards | ||
Outstanding at beginning of period (in shares) | 45,799 | |
Granted (in shares) | 59,091 | |
Exchanged for common shares (in shares) | (32,661) | |
Outstanding at end of period (in shares) | 72,229 | 45,799 |
Total unrecognized compensation cost | $ 1,600,000 | |
Unrecognized cost, period for recognition (in years) | 1 year 6 months | |
Weighted average grant date fair value (in USD per share) | $ 48.86 | |
Restricted stock awards | 2009 Equity Compensation Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 1 year | |
Restricted stock awards | 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 ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 0 | $ 0 |
Number of Market Stock Units | ||
Outstanding at beginning of period (in shares) | 137,256 | |
Granted (in shares) | 19,688 | |
Exchanged for stock (in shares) | (28,804) | |
Outstanding at end of period (in shares) | 128,140 | 137,256 |
MSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 700,000 | |
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 | |
Number of Market Stock Units | ||
Outstanding at beginning of period (in shares) | 195,723 | |
Granted (in shares) | 29,568 | |
Exchanged for stock (in shares) | (42,811) | |
Outstanding at end of period (in shares) | 182,480 | 195,723 |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Stock Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Stock options expense | $ 0 | $ 0 |
Unrecognized compensation expense | $ 0 | |
Outstanding stock options (in shares) | 80,000 | |
Weighted average exercise price (in USD per share) | $ 27.70 |
Stock-Based Compensation Plan_7
Stock-Based Compensation Plans - Performance Awards (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 0 | $ 0 |
PAs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expense | $ 400,000 | $ 100,000 |
Number of Performance Awards | ||
Outstanding at beginning of period (in shares) | 10,852 | |
Granted (in shares) | 15,723 | |
Outstanding at end of period (in shares) | 26,575 | 10,852 |
PAs | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exchangeable percentage (as a percent) | 0.00% | |
PAs | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exchangeable percentage (as a percent) | 150.00% | |
Number of Performance Awards | ||
Outstanding at beginning of period (in shares) | 16,278 | |
Granted (in shares) | 23,585 | |
Outstanding at end of period (in shares) | 39,863 | 16,278 |
Segment Information - Reportabl
Segment Information - Reportable Segments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)segmentbranch | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of branches | branch | 14 | |
Revenue | $ 417,733 | $ 351,591 |
Gross profit | 219,235 | 186,538 |
Operating Income | 11,987 | 20,550 |
Interest expense | (869) | (654) |
Other income, net | 801 | 889 |
Income before income taxes | 11,919 | 20,785 |
Capital expenditures | 8,193 | 1,687 |
Depreciation and amortization | 8,341 | 6,701 |
Total assets | 256,157 | 256,304 |
Equity Method Investments | (8,784) | (8,719) |
Lawson | ||
Segment Reporting Information [Line Items] | ||
Revenue | 371,668 | 312,803 |
Gross profit | 200,475 | 171,258 |
Operating Income | 8,193 | 17,715 |
Capital expenditures | 7,460 | 1,529 |
Depreciation and amortization | 6,736 | 5,343 |
Total assets | $ 217,856 | 221,490 |
Bolt | ||
Segment Reporting Information [Line Items] | ||
Number of branches | segment | 14 | |
Revenue | $ 46,065 | 38,788 |
Gross profit | 18,760 | 15,280 |
Operating Income | 3,794 | 2,835 |
Capital expenditures | 733 | 158 |
Depreciation and amortization | 1,605 | 1,358 |
Total assets | $ 47,085 | $ 43,533 |
Segment Information - Reporta_2
Segment Information - Reportable Segments by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 417,733 | $ 351,591 |
Long-lived assets | 84,697 | 78,575 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenue | 337,981 | 283,261 |
Long-lived assets | 50,491 | 44,395 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Revenue | 79,752 | 68,330 |
Long-lived assets | $ 34,206 | $ 34,180 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |||
Stock repurchase program, authorized amount | $ 7.5 | ||
Treasury stock acquired (in shares) | 0 | 47,504 | |
Treasury stock acquired (in USD per share) | $ 36.93 | ||
Available under stock plan | $ 4.5 |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 29, 2021entityagreement | |
Related Party Transactions [Abstract] | ||
Inventory purchased from related party | $ 100,000 | |
Related parties, liabilities | $ 0 | |
Number of merger agreements | agreement | 2 | |
Ownership entities | entity | 3 |
COVID-19 Risks and Uncertaint_2
COVID-19 Risks and Uncertainties (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 27, 2020 | |
Risks and Uncertainties [Abstract] | ||||
Deferred employer side social security payments | $ 3.5 | |||
Payments of deferred Employer Payroll Tax, CARES Act | $ 1.7 | |||
Proceeds from subsidy | $ 0.2 | $ 1.4 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for doubtful accounts: | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 654 | $ 593 |
Charged to Costs and Expenses | 504 | 578 |
Deductions | (360) | (517) |
Balance at end of period | 798 | 654 |
Valuation allowance for deferred tax assets: | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 1,257 | 1,235 |
Charged to Costs and Expenses | 0 | 22 |
Deductions | (1,257) | 0 |
Balance at end of period | $ 0 | $ 1,257 |