Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | ||||
Mar. 31, 2020 | Apr. 15, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Document and Entity Information [Abstract] | |||||
Entity Registrant Name | LAWSON PRODUCTS INC/NEW/DE/ | ||||
Entity Central Index Key | 0000703604 | ||||
Document Type | 10-Q | ||||
Document Period End Date | Mar. 31, 2020 | ||||
Amendment Flag | false | ||||
Document Fiscal Year Focus | 2020 | ||||
Document Fiscal Period Focus | Q1 | ||||
Current Fiscal Year End Date | --12-31 | ||||
Entity Filer Category | Accelerated Filer | ||||
Entity Small Business | true | ||||
Entity Current Reporting Status | Yes | ||||
Entity Emerging Growth Company | false | ||||
Entity Shell Company | false | ||||
Common Stock, Shares, Outstanding | 8,996,267 | 8,996,267 | 9,043,771 | 8,962,450 | 8,955,930 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 4,095 | $ 5,495 |
Restricted cash | 802 | 802 |
Accounts receivable, less allowance for doubtful accounts of $793 and $593, respectively | 41,406 | 38,843 |
Allowance for Doubtful Accounts | 793 | 593 |
Inventories, net | 56,182 | 55,905 |
Miscellaneous receivables and prepaid expenses | 6,674 | 5,377 |
Total current assets | 109,159 | 106,422 |
Property, plant and equipment, net | 15,662 | 16,546 |
Deferred income taxes | 18,525 | 21,711 |
Goodwill | 19,555 | 20,923 |
Cash value of life insurance | 13,808 | 14,969 |
Intangible assets, net | 11,276 | 12,335 |
Right of use assets | 10,178 | 11,246 |
Other assets | 252 | 277 |
Total assets | 198,415 | 204,429 |
Current liabilities: | ||
Accounts payable | 13,730 | 13,789 |
Lease obligation | 3,825 | 3,830 |
Accrued expenses and other liabilities | 18,960 | 39,311 |
Total current liabilities | 36,515 | 56,930 |
Noncurrent liabilities: | ||
Revolving line of credit | 10,460 | 2,271 |
Security bonus plan | 11,677 | 11,840 |
Lease obligation | 8,331 | 9,504 |
Deferred compensation | 5,327 | 6,370 |
Deferred tax liability | 5,994 | 6,188 |
Other liabilities | 3,376 | 3,325 |
Total liabilities | 81,680 | 96,428 |
Stockholders' equity: | ||
Authorized - 500,000 shares, Issued and outstanding — None | 0 | 0 |
Authorized - 35,000,000 shares Issued - 9,190,171 shares Outstanding - 8,996,267 and 9,043,771 shares, respectively | 9,190 | 9,190 |
Capital in excess of par value | 18,528 | 18,077 |
Retained earnings | 99,029 | 86,496 |
Treasury stock – 193,904 and 146,400 shares, respectively | (7,517) | (5,761) |
Accumulated other comprehensive loss | (2,495) | (1) |
Total stockholders’ equity | 116,735 | 108,001 |
Total liabilities and stockholders’ equity | $ 198,415 | $ 204,429 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 9,190,171 | 9,190,171 |
Common stock, shares outstanding | 8,996,267 | 9,043,771 |
Treasury Stock, Shares | 193,904 | 146,400 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total revenue | $ 91,035 | $ 91,343 |
Gross profit | 48,921 | 48,923 |
Operating expenses: | ||
Selling expenses | 19,984 | 21,742 |
General and administrative expenses | 10,299 | 21,637 |
Operating expenses | 30,283 | 43,379 |
Operating income | 18,638 | 5,544 |
Interest expense | (115) | (197) |
Other income (expense), net | 1,111 | (472) |
Income before income taxes | 17,412 | 5,819 |
Income tax expense | 4,879 | 1,673 |
Net income | $ 12,533 | $ 4,146 |
Basic income per share of common stock | $ 1.39 | $ 0.46 |
Diluted income per share of common stock | $ 1.34 | $ 0.44 |
Weighted average shares outstanding: | ||
Basic weighted average shares outstanding | 9,032 | 8,962 |
Effect of dilutive securities outstanding | 302 | 355 |
Diluted weighted average shares outstanding | 9,334 | 9,317 |
Comprehensive income: | ||
Net income | $ 12,533 | $ 4,146 |
Adjustment for foreign currency translation | (2,494) | 675 |
Net comprehensive income | 10,039 | 4,821 |
Product [Member] | ||
Revenue | 81,335 | 81,915 |
Cost of goods sold | 37,805 | 38,007 |
Service [Member] | ||
Revenue | 9,700 | 9,428 |
Cost of goods sold | $ 4,309 | $ 4,413 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Retained Earnings [Member] | Treasury Stock, Common [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] |
Common Stock, Shares, Outstanding | 8,955,930 | |||||
Common Stock Outstanding, $1 Par Value | $ 9,006,000 | |||||
Capital in Excess of Par Value | 15,623,000 | |||||
Retained Earnings | 77,338,000 | |||||
Treasury Stock | (1,234,000) | |||||
Accumulated Other Comprehensive Income (Loss) | (1,560,000) | |||||
Total Stockholders' Equity | 99,173,000 | |||||
Net income | 4,146,000 | $ 4,146,000 | ||||
Adjustment for foreign currency translation | 675,000 | $ 675,000 | ||||
Stock-based compensation | $ 666,000 | $ 666,000 | ||||
Shares Issued | 6,520 | |||||
Shares Issued, Par Value | $ 0 | $ 6,000 | (6,000) | |||
Common Stock, Shares, Outstanding | 8,962,450 | |||||
Common Stock Outstanding, $1 Par Value | $ 9,012,000 | |||||
Capital in Excess of Par Value | 16,283,000 | |||||
Retained Earnings | 83,421,000 | |||||
Treasury Stock | (1,234,000) | |||||
Accumulated Other Comprehensive Income (Loss) | (885,000) | |||||
Total Stockholders' Equity | 106,597,000 | |||||
Change in accounting principle | $ 1,937,000 | 1,937,000 | ||||
Common Stock, Shares, Outstanding | 9,043,771 | |||||
Common Stock Outstanding, $1 Par Value | $ 9,190,000 | |||||
Capital in Excess of Par Value | 18,077,000 | |||||
Retained Earnings | 86,496,000 | |||||
Treasury Stock | (5,761,000) | |||||
Accumulated Other Comprehensive Income (Loss) | (1,000) | |||||
Total Stockholders' Equity | 108,001,000 | |||||
Net income | $ 12,533,000 | $ 12,533,000 | ||||
Treasury Stock, Value, Acquired, Cost Method | (47,504) | |||||
Treasury Stock, Value, Acquired, Cost Method | $ (1,756,000) | $ (1,756,000) | ||||
Adjustment for foreign currency translation | (2,494,000) | $ (2,494,000) | ||||
Stock-based compensation | $ 451,000 | $ 451,000 | ||||
Common Stock, Shares, Outstanding | 8,996,267 | |||||
Common Stock Outstanding, $1 Par Value | $ 9,190,000 | |||||
Capital in Excess of Par Value | 18,528,000 | |||||
Retained Earnings | 99,029,000 | |||||
Treasury Stock | (7,517,000) | |||||
Accumulated Other Comprehensive Income (Loss) | (2,495,000) | |||||
Total Stockholders' Equity | $ 116,735,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income | $ 12,533 | $ 4,146 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 1,509 | 1,478 |
Stock-based compensation | (10,700) | 408 |
Deferred income taxes | 3,196 | 1,427 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,528) | (6,273) |
Inventories | (1,500) | (643) |
Prepaid expenses and other assets | (223) | (2,314) |
Accounts payable and other liabilities | (8,486) | (8,863) |
Other | 311 | 133 |
Net cash used in operating activities | (6,888) | (10,501) |
Investing activities: | ||
Purchases of property, plant and equipment | (551) | (248) |
Net cash used in investing activities | (551) | (248) |
Financing activities: | ||
Net proceeds from the revolving line of credit | 8,189 | 2,308 |
Repurchase treasury shares | (1,756) | 0 |
Payment of financing lease principal | (67) | (52) |
Net cash provided by financing activities | 6,366 | 2,256 |
Effect of exchange rate changes on cash and cash equivalents | (327) | 213 |
Decrease in cash, cash equivalents and restricted cash | (1,400) | (8,280) |
Cash, cash equivalents and restricted cash at beginning of period | 6,297 | 12,683 |
Cash, cash equivalents and restricted cash at end of period | 4,897 | 4,403 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 4,897 | 4,403 |
Net cash paid for income taxes | 198 | 99 |
Net cash paid for interest | $ 147 | $ 167 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of Lawson Products, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . In the opinion of the Company, all normal recurring adjustments have been made that are necessary to present fairly the results of operations for the interim periods. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . The Company has two operating segments. The first segment, the Lawson operating segment, distributes maintenance, repair and operations ("MRO") products to customers primarily through a network of sales representatives offering vendor managed inventory ("VMI") service to customers throughout the United States and Canada. The second segment, The Bolt Supply House Ltd. ("Bolt Supply") operating segment, distributes MRO products primarily through its branches located in Western Canada. Bolt Supply had 14 branches in operation at the end of the first quarter 2020. |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Revenue Disclosure [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. As a result, the Company reports two separate revenue streams and two separate costs of revenues. Under the definition of a contract as defined by ASC 606, the Company considers contracts to be created at the time an order to purchase product is agreed upon regardless of whether or not there is a written contract. Performance Obligations Lawson has two operating segments; the Lawson segment and the Bolt Supply segment. The Lawson segment has two distinct performance obligations offered to its customers: a product performance obligation and a service performance obligation. Although the Company has identified that it offers its customers both a product and a service obligation, the customer only receives one invoice per transaction with no price breakout between these obligations. The Company does not price its offerings based on any breakout between these obligations. Lawson generates revenue primarily from the sale of MRO products to its customers. Revenue related to product sales is recognized at the time that control of the product has been transferred to the customer; either at the time the product is shipped or the time the product has been received by the customer. The Company does not commit to long-term contracts to sell customers a certain minimum quantity of products. The Lawson segment offers a vendor managed inventory ("VMI") service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided a short period of time after control of the purchased product has been transferred to the customer. Since some components of VMI service have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided. The Bolt Supply segment does not provide VMI services for its customers or provide services in addition to product sales to customers. Revenue is recognized at the time that control of the product has been transferred to the customer which is either upon delivery or shipment depending on the terms of the contract. Accounting Policy Elections The Company treats shipping and handling costs after the control of the product has been transferred to the customer as a fulfillment cost. Sales taxes that are imposed on our sales and collected from customers are excluded from revenues. The Company expenses sales commissions when incurred as the amortization period is one year or less. Certain Judgments The Company employs certain judgments to estimate the dollar amount of revenue, and related expenses, allocated to the sale of product and service. These judgments include, among others, the percentage of customers that take advantage of the VMI services offered, the amount of revenue to be allocated to the VMI service based on the value of the service to its customers, and the amount of time after control of the product passes to the customer that the VMI service obligation is completed. It is assumed that any customer who averages placing orders at a frequency of longer than 30 days does not take advantage of the available VMI services offered. The estimate of the cost of sales is based on the estimated time spent on such activities applied to the expenses directly related to sales representatives that provide VMI services to the customer. At March 31, 2020 , the Company had a deferred revenue liability of $0.7 million and a deferred expense of $0.3 million for related expenses associated with the deferred service performance obligations, respectively. The deferral of revenue and expenses does not affect the amount, timing and any uncertainty of cash flows generated from operations. Disaggregated revenue by geographic area follows: (Dollars in thousands) Three Months Ended March 31, 2020 2019 United States $ 73,584 $ 74,048 Canada 17,451 17,295 Consolidated total $ 91,035 $ 91,343 Disaggregated revenue by product type follows: Three Months Ended March 31, 2020 2019 Fastening Systems 22.8 % 23.5 % Fluid Power 14.2 % 15.2 % Cutting Tools and Abrasives 13.3 % 13.3 % Specialty Chemicals 11.2 % 11.3 % Electrical 10.8 % 11.5 % Aftermarket Automotive Supplies 8.2 % 8.4 % Safety 6.3 % 4.6 % Welding and Metal Repair 1.4 % 1.7 % Other 11.8 % 10.5 % Consolidated Total 100.0 % 100.0 % |
Restricted Cash Restricted Cash
Restricted Cash Restricted Cash | 3 Months Ended |
Mar. 31, 2020 | |
Restricted Cash [Abstract] | |
Restricted Cash | Restricted Cash The Company has agreed to maintain $0.8 million in a money market account as collateral for an outside party that is providing certain commercial card processing services for the Company. The Company is restricted from withdrawing this balance without the prior consent of the outside party during the term of the agreement. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Inventories, gross $ 60,668 $ 60,500 Reserve for obsolete and excess inventory (4,486 ) (4,595 ) Inventories, net $ 56,182 $ 55,905 |
Goodwill Goodwill
Goodwill Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure [Text Block] | Goodwill Goodwill activity for the first three months of 2020 and 2019 is included in the table below: (Dollars in thousands) Three Months Ended March 31, 2020 2019 Beginning balance $ 20,923 $ 20,079 Impact of foreign exchange (1,368 ) 372 Ending balance $ 19,555 $ 20,451 The Company identified an impairment "trigger event" for both the Lawson and Bolt reporting units as of March 31, 2020 due to adverse changes in the business climate related to COVID-19. The quantitative impairment test determined that the Bolt reporting unit's fair value exceeded its carrying value by less than 10% . As of March 31, 2020 goodwill allocated to the Bolt reporting unit was $12.4 million . Although the Company believes the projected future operating results and cash flows and related estimates regarding fair values were based on reasonable assumptions, it is reasonably possible that estimates made may be materially and adversely impacted in the near term as a result of the COVID-19 pandemic, including impairment losses related to goodwill. |
Intangible assets (Notes)
Intangible assets (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Intangible Assets [Abstract] | |
Intangible Assets Disclosure [Text Block] | Intangible Assets The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 7,890 $ (2,067 ) $ 5,823 $ 8,422 $ (2,020 ) $ 6,402 Customer relationships 6,980 (1,527 ) 5,453 7,337 (1,404 ) 5,933 $ 14,870 $ (3,594 ) $ 11,276 $ 15,759 $ (3,424 ) $ 12,335 Amortization expense of $0.3 million related to intangible assets was recorded in General and administrative expenses for the three months ended March 31, 2020 and 2019 , respectively. The Company identified an impairment "trigger event" as of March 31, 2020 due to adverse changes in the business climate related to COVID-19. In accordance with ASC 350, the Company tested the definite life intangible assets and determined that the undiscounted future cash flows exceeded the net carrying value of the intangible assets. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company leases property used for distribution centers, office space, and Bolt branch locations throughout the US and Canada, along with various equipment located in distribution centers and corporate headquarters. The Company is also a lessor of its Decatur, Alabama property previously used in conjunction with a discontinued operation. Lawson Operating Leases Lawson MRO primarily has two types of leases: leases for real estate and leases for equipment. Operating real estate leases that have a material impact on the operations of the Company are related to the Company's distribution network and headquarters. The Company possesses several additional property leases that are month to month basis and are not material in nature. Lawson MRO does not possess any leases that have residual value guarantees. Several property leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities when the Company is reasonably certain it will renew a lease. The value of the Right Of Use ("ROU") assets and associated lease liabilities is calculated using the total cash payments over the course of the lease, discounted to the present value using the appropriate incremental borrowing rate. The right of use asset will be amortized over its useful life. The lease liability is reduced in conjunction with the lease payments made, with adjustments made to the lease liability in order to account for non-straight line cash payments through the life of the lease. Bolt primarily leases the real estate for its branch locations as well as its distribution center in Calgary, Alberta. Bolt possesses additional property leases that are month to month and not material in nature. Bolt property leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use asset and associated lease liability when the Company is reasonably certain it will renew a lease. Significant Assumptions The Company is required to determine a discount rate for the present value of lease payments. If the rate is not included in the lease or cannot be readily determined, the Company must estimate the incremental borrowing rate to be used for the discount rate. The discount rate of Lawson MRO and Bolt will be reviewed on a periodic basis and updated as needed. The expenses and income generated by the leasing activity of Lawson as lessee for the three months ending March 31, 2020 and 2019 are as follows (Dollars in thousands): Three Months Ended March 31, Lease Type Classification 2020 2019 Consolidated Operating Lease Expense (1) Operating expenses $ 1,187 $ 1,195 Consolidated Financing Lease Amortization Operating expenses 52 48 Consolidated Financing Lease Interest Interest expense 7 6 Consolidated Financing Lease Expense 59 54 Sublease Income (2) Operating expenses — (80 ) Net Lease Cost $ 1,246 $ 1,169 (1) Includes short term lease expense, which is immaterial (2) Sublease income from sublease of a portion of the Company headquarters. The sublease was terminated in June 2019 and the Company has no other subleases. The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of March 31, 2020 and December 31, 2019 are as follows (Dollars in thousands): March 31, December 31, Lease Type 2020 2019 Total ROU operating lease assets (1) $ 9,573 $ 10,592 Total ROU financing lease assets (2) 605 654 Total lease assets $ 10,178 $ 11,246 Total current operating lease obligation $ 3,580 $ 3,591 Total current financing lease obligation 245 239 Total current lease obligations $ 3,825 $ 3,830 Total long term operating lease obligation $ 8,021 $ 9,133 Total long term financing lease obligation 310 371 Total long term lease obligation $ 8,331 $ 9,504 (1) Operating lease assets are recorded net of accumulated amortization of $3.9 million and $2.8 million as of March 31, 2020 and December 31, 2019, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.3 million and $0.2 million as of March 31, 2020 and December 31, 2019, respectively The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of March 31, 2020 were as follows (Dollars in thousands): Maturity Date of Lease Liabilities Operating Leases Financing Leases Total Year one $ 4,069 $ 268 $ 4,337 Year two 4,081 174 4,255 Year three 2,612 110 2,722 Year four 1,055 43 1,098 Year five 240 — 240 Subsequent years 517 — 517 Total lease payments 12,574 595 13,169 Less: Interest 973 40 1,013 Present value of lease liabilities $ 11,601 $ 555 $ 12,156 (1) Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance of $0.2 million The weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2020 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 3.5 5.1% Financing Leases 2.7 5.4% The cash outflows of the leasing activity of Lawson as lessee for the three months ending March 31, 2020 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 992 Operating cash flows from financing leases Operating activities 7 Financing cash flows from financing leases Financing activities 67 |
Loan Agreement
Loan Agreement | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Loan Agreement | In the fourth quarter of 2019, the Company entered into a five-year credit agreement led by J.P. Morgan Chase Bank N.A, as administrative agent, and including CIBC Bank USA and Bank of America, N.A. as other lenders. The credit agreement matures on October 11, 2024 and provides for $100.0 million of revolving commitments. The credit agreement allows borrowing capacity to increase to $150.0 million subject to meeting certain criteria and additional commitments from its lenders. The Credit Agreement consists of borrowings as alternate base rate loans, Canadian prime rate loans, Eurodollar loans, and Canadian dollar offered rate loans as the Company requests. The applicable interest rate spread is determined by the type of borrowing used and the Total Net Leverage Ratio as of the most recent fiscal quarter as defined in the Credit Agreement. At March 31, 2020 , the Company had $10.5 million of borrowings and had $87.5 million of credit availability remaining, net of outstanding letters of credit. The weighted average interest rate was 4.04% for the three months ended March 31, 2020 . 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. In addition to other customary representations, warranties and covenants, the results of the financial covenants are provided below: Quarterly Financial Covenants Requirement Actual EBITDA to fixed charges ratio 1.15 : 1.00 7.13 : 1.00 Total net leverage ratio 3.25 : 1.00 0.19 : 1.00 As of March 31, 2020 , the Company was in compliance with its required debt covenants. |
Treasury Stock Repurchase (Note
Treasury Stock Repurchase (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Treasury Shares Repurchase [Abstract] | |
Treasury Stock [Text Block] | Stock Repurchase Program In the second quarter of 2019, the Board of Directors authorized a program in which the Company may repurchase up to $7.5 million of the Company's common stock from time to time in open market transactions, privately negotiated transactions or by other methods. In the first quarter of 2020 the Company purchased 47,504 shares of common stock at an average purchase price of $36.93 under the repurchase program. |
Reserve for Severance
Reserve for Severance | 3 Months Ended |
Mar. 31, 2020 | |
Severance Reserve [Abstract] | |
Reserve for Severance | Severance Reserve Changes in the Company’s reserve for severance as of March 31, 2020 and 2019 were as follows: (Dollars in thousands) Three Months Ended March 31, 2020 2019 Balance at beginning of period $ 909 $ 359 Charged to earnings 7 27 Payments (365 ) (123 ) Balance at end of period $ 551 $ 263 |
Stock-Based Compensation (Notes
Stock-Based Compensation (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Stock Based Compensation [Abstract] | |
Stock Performance Rights | Stock-Based Compensation The Company recorded a stock-based compensation benefit of $10.7 million and expense of $0.4 million for the first three months of 2020 and 2019, respectively. The majority of the stock-based compensation benefit is related to the change in the market value of the Company's common stock. The accrued liability for previously issued Stock Performance Rights ("SPRs") decreased from $14.9 million on December 31, 2019 to $3.7 million on March 31, 2020 primarily due to the change in the market value of the Company's common stock. A summary of stock-based awards issued during the three months ended March 31, 2020 follows: Restricted Stock Units ("RSUs") The Company issued 6,847 RSUs to key employees that cliff vest on December 31, 2022. The Company issued 2,500 RSUs to an executive that cliff vest on March 2, 2023 and 3,000 RSUs that cliff vest of March 9, 2023. Each RSU is exchangeable for one share of the Company's common stock at the end of the vesting period. Market Stock Units ("MSUs") The Company issued 22,284 MSUs to key employees that cliff vest on December 31, 2022. MSUs are exchangeable for the Company's common stock at the end of the vesting period. The number of shares of common stock that will be issued upon vesting, ranging from zero to 33,426 shares, will be determined based upon the trailing sixty-day average closing price of the Company's common stock on December 31, 2022. Performance Awards ("PAs") The Company issued 10,852 PAs to key employees that cliff vest on December 31, 2022. PAs are exchangeable for the Company's common stock ranging from zero to 16,278 shares, or the equivalent amount in cash, based upon the achievement of certain financial performance metrics. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded income tax expense of $4.9 million , a 28.0% effective tax rate, for the three months ended March 31, 2020 . The effective tax rate is higher than the U.S. statutory rate due primarily to state taxes and the recording of reserves for uncertain tax positions. Income tax expense of $1.7 million , a 28.8% effective tax rate, was recorded for the three months ended March 31, 2019 , which also was higher than the U.S. Statutory rate due primarily to state taxes, income in higher tax jurisdictions and an inclusion for global intangible low taxed income. Cash paid for income taxes was $0.2 million and $0.1 million in the first three months of 2020 and 2019, respectively. The Company and its subsidiaries are subject to U.S. Federal income tax, as well as income tax of multiple state and foreign jurisdictions. As of March 31, 2020 , the Company is subject to U.S. Federal income tax examinations for the years 2016 through 2018 and income tax examinations from various other jurisdictions for the years 2012 through 2018. Earnings from the Company’s foreign subsidiaries are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise may subject the Company to foreign withholding taxes and U.S. federal and state taxes. |
Contingent Liability Contingent
Contingent Liability Contingent Liability (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Contingent Liability [Abstract] | |
Environmental Contingency | Contingent Liabilities In 2012, the Company identified that a site it owns in Decatur, Alabama, contains hazardous substances in the soil and groundwater as a result of historical operations prior to the Company's ownership. The Company retained an environmental consulting firm to further investigate the contamination including the measurement and monitoring of the site and the site was enrolled in the Alabama Department of Environmental Management (“ADEM") voluntary cleanup program. The 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 for three consecutive periods. The injection process was completed in the first quarter of 2019 and the environmental consulting firm is monitoring the affected area. The Company believes the minimal remaining environmental remediation liability, classified within Accrued expenses and other liabilities on the accompanying Consolidated Balance Sheet, will be sufficient to cover the remaining cost of the plan. |
Segment Information (Notes)
Segment Information (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segment Information The Company operates in two reportable segments. The businesses have been determined to be separate reportable segments because of differences in their financial characteristics and the methods they employ to deliver product to customers. The operating segments are reviewed by the Company’s chief operating decision maker responsible for reviewing operating performance and allocating resources. The Lawson segment primarily relies on its large network of sales representatives to visit the customer at the customers' work location and provide VMI service and produce sales orders for product that is then shipped to the customer. The Bolt Supply segment primarily sells product to customers through its branch locations. Bolt Supply had 14 branches in operation at the end of the first quarter of 2020. Financial information for the Company's reportable segments follows: (Dollars in thousands) Three Months Ended March 31, 2020 2019 Revenue Lawson product revenue $ 71,791 $ 73,039 Lawson service revenue 9,700 9,428 Total Lawson revenue 81,491 82,467 Bolt Supply 9,544 8,876 Consolidated total $ 91,035 $ 91,343 Gross profit Lawson product gross profit $ 39,729 $ 40,604 Lawson service gross profit 5,391 5,015 Total Lawson gross profit 45,120 45,619 Bolt Supply 3,801 3,304 Consolidated total $ 48,921 $ 48,923 Operating income Lawson $ 18,094 $ 5,458 Bolt Supply 544 86 Consolidated total 18,638 5,544 Interest expense (115 ) (197 ) Other income (expense), net (1,111 ) 472 Income before income taxes $ 17,412 $ 5,819 |
COVID-19 (Notes)
COVID-19 (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | In March 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 pandemic has yet to be realized as of the date of this report. There is substantial uncertainty as to the overall effect the pandemic will have on the results of the Company for the rest of 2020 and beyond. Various events related to COVID-19 have resulted in lost revenue to our Company, limitations on our ability to source high demand products, limitations on our sales force to perform certain functions due to state or federal stay-at-home orders, slow-down of customer demand for our products and limitations of some customers to pay us on a timely basis. On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide certain relief as a result of the COVID-19 outbreak. The Company has elected to defer the employer side social security payments in accordance with the CARES Act. The Company is currently evaluating how these provisions in the CARES Act will impact its financial position, results of operations and cash flows. In the first quarter of 2020, the government of the state of Illinois defined essential businesses, allowing Lawson to operate during the pandemic. A change in this status could result in the temporary closure of our business. Additionally the COVID-19 pandemic could result in a temporary closure of any or all of our distribution facilities or the Bolt branch locations, which would negatively impact our operations. Other disruptions to our supply chain such as reduced capacity or temporary shutdowns of freight carriers could also negatively impact Company performance. The pandemic is negatively impacting sales and operations currently and may negatively impact future financial results, liquidity and overall performance of the Company. Additionally, it is reasonably possible that estimates made in the financial statements may be materially and adversely impacted in the near term as a result of these conditions, including delay in payment of receivables, impairment losses related to goodwill and other long-lived assets, and inability to utilize deferred tax assets. The Lawson MRO business model relies upon customer interaction as well as a consistent schedule of onsite visits by our sales reps to customer locations. The Bolt business model relies on foot traffic in its branch locations. The onset of the COVID-19 pandemic, as well as social distancing guidelines and government mandated shelter in place orders, have negatively impacted our business. The Company has taken several steps to mitigate the potential negative impacts of COVID-19. Lawson sales representatives continue to reach out to all customers with a portion via phone, fax and internet-based communications. Bolt branches remain open and are offering curbside pickup for customer orders to maintain social distancing. Our sales team and finance team continue to monitor our customers' liquidity and receivables balances, as well as monitor customers who have reduced hours of operation or have shut down temporarily. Management continues to be in contact with current suppliers and is reaching out to additional suppliers to ensure that orders for inventory are fulfilled in a timely manner. The Company continues to monitor its balance sheet and liquidity position and is taking actions to protect cash flows from operations. At March 31, 2020, the Company had $4.1 million of cash and cash equivalents and an additional $87.5 million of borrowing capacity under its committed credit facility and a similar amount available as of the date of this report. During April 2020, the Company has taken numerous actions, including, but not limited to furloughing approximately 100 employees, reducing salaries, canceling travel and award trips, consolidating its Suwanee distribution center operations into the McCook facility, and eliminating non-critical capital expenditures. The Company is closely monitoring the operating environment and will take all necessary actions to ensure safety for our employees, customers and suppliers while continuing to meet its working capital needs and remain in compliance with its debt covenants. |
Revenue Recognition Revenue R_2
Revenue Recognition Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Revenue Disclosure [Abstract] | |
Disaggregated Revenue by Geographic Areas | Disaggregated revenue by geographic area follows: (Dollars in thousands) Three Months Ended March 31, 2020 2019 United States $ 73,584 $ 74,048 Canada 17,451 17,295 Consolidated total $ 91,035 $ 91,343 |
Disaggregated revenue by Product Type | Disaggregated revenue by product type follows: Three Months Ended March 31, 2020 2019 Fastening Systems 22.8 % 23.5 % Fluid Power 14.2 % 15.2 % Cutting Tools and Abrasives 13.3 % 13.3 % Specialty Chemicals 11.2 % 11.3 % Electrical 10.8 % 11.5 % Aftermarket Automotive Supplies 8.2 % 8.4 % Safety 6.3 % 4.6 % Welding and Metal Repair 1.4 % 1.7 % Other 11.8 % 10.5 % Consolidated Total 100.0 % 100.0 % |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Components of inventories | Inventories, net, consisting primarily of purchased goods which are offered for resale, were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Inventories, gross $ 60,668 $ 60,500 Reserve for obsolete and excess inventory (4,486 ) (4,595 ) Inventories, net $ 56,182 $ 55,905 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Goodwill activity for the first three months of 2020 and 2019 is included in the table below: (Dollars in thousands) Three Months Ended March 31, 2020 2019 Beginning balance $ 20,923 $ 20,079 Impact of foreign exchange (1,368 ) 372 Ending balance $ 19,555 $ 20,451 |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Intangible Assets [Abstract] | |
Intangible Assets Disclosure [Text Block] | Intangible Assets The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 7,890 $ (2,067 ) $ 5,823 $ 8,422 $ (2,020 ) $ 6,402 Customer relationships 6,980 (1,527 ) 5,453 7,337 (1,404 ) 5,933 $ 14,870 $ (3,594 ) $ 11,276 $ 15,759 $ (3,424 ) $ 12,335 Amortization expense of $0.3 million related to intangible assets was recorded in General and administrative expenses for the three months ended March 31, 2020 and 2019 , respectively. The Company identified an impairment "trigger event" as of March 31, 2020 due to adverse changes in the business climate related to COVID-19. In accordance with ASC 350, the Company tested the definite life intangible assets and determined that the undiscounted future cash flows exceeded the net carrying value of the intangible assets. |
Intangible Assets Disclosure [Table Text Block] | The gross carrying amount and accumulated amortization by intangible asset class were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Trade names $ 7,890 $ (2,067 ) $ 5,823 $ 8,422 $ (2,020 ) $ 6,402 Customer relationships 6,980 (1,527 ) 5,453 7,337 (1,404 ) 5,933 $ 14,870 $ (3,594 ) $ 11,276 $ 15,759 $ (3,424 ) $ 12,335 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Net Lease Cost | The expenses and income generated by the leasing activity of Lawson as lessee for the three months ending March 31, 2020 and 2019 are as follows (Dollars in thousands): Three Months Ended March 31, Lease Type Classification 2020 2019 Consolidated Operating Lease Expense (1) Operating expenses $ 1,187 $ 1,195 Consolidated Financing Lease Amortization Operating expenses 52 48 Consolidated Financing Lease Interest Interest expense 7 6 Consolidated Financing Lease Expense 59 54 Sublease Income (2) Operating expenses — (80 ) Net Lease Cost $ 1,246 $ 1,169 (1) Includes short term lease expense, which is immaterial (2) Sublease income from sublease of a portion of the Company headquarters. The sublease was terminated in June 2019 and the Company has no other subleases. |
Value of Net Assets and Liabilities of Leasing Activities | The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of March 31, 2020 and December 31, 2019 are as follows (Dollars in thousands): March 31, December 31, Lease Type 2020 2019 Total ROU operating lease assets (1) $ 9,573 $ 10,592 Total ROU financing lease assets (2) 605 654 Total lease assets $ 10,178 $ 11,246 Total current operating lease obligation $ 3,580 $ 3,591 Total current financing lease obligation 245 239 Total current lease obligations $ 3,825 $ 3,830 Total long term operating lease obligation $ 8,021 $ 9,133 Total long term financing lease obligation 310 371 Total long term lease obligation $ 8,331 $ 9,504 (1) Operating lease assets are recorded net of accumulated amortization of $3.9 million and $2.8 million as of March 31, 2020 and December 31, 2019, respectively (2) Financing lease assets are recorded net of accumulated amortization of $0.3 million and $0.2 million as of March 31, 2020 |
Value of Lease Liabilities Generated by Leasing Activities | The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of March 31, 2020 were as follows (Dollars in thousands): Maturity Date of Lease Liabilities Operating Leases Financing Leases Total Year one $ 4,069 $ 268 $ 4,337 Year two 4,081 174 4,255 Year three 2,612 110 2,722 Year four 1,055 43 1,098 Year five 240 — 240 Subsequent years 517 — 517 Total lease payments 12,574 595 13,169 Less: Interest 973 40 1,013 Present value of lease liabilities $ 11,601 $ 555 $ 12,156 |
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | |
Lease Disclosures | he weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2020 are as follows: Lease Type Weighted Average Term in Years Weighted Average Interest Rate Operating Leases 3.5 5.1% Financing Leases 2.7 5.4% |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | The cash outflows of the leasing activity of Lawson as lessee for the three months ending March 31, 2020 are as follows (Dollars in thousands): Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 992 Operating cash flows from financing leases Operating activities 7 Financing cash flows from financing leases Financing activities 67 |
Operating Lease Income |
Loan Agreement (Tables)
Loan Agreement (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Quarterly Financial Covenants [Table Text Block] | In the fourth quarter of 2019, the Company entered into a five-year credit agreement led by J.P. Morgan Chase Bank N.A, as administrative agent, and including CIBC Bank USA and Bank of America, N.A. as other lenders. The credit agreement matures on October 11, 2024 and provides for $100.0 million of revolving commitments. The credit agreement allows borrowing capacity to increase to $150.0 million subject to meeting certain criteria and additional commitments from its lenders. The Credit Agreement consists of borrowings as alternate base rate loans, Canadian prime rate loans, Eurodollar loans, and Canadian dollar offered rate loans as the Company requests. The applicable interest rate spread is determined by the type of borrowing used and the Total Net Leverage Ratio as of the most recent fiscal quarter as defined in the Credit Agreement. At March 31, 2020 , the Company had $10.5 million of borrowings and had $87.5 million of credit availability remaining, net of outstanding letters of credit. The weighted average interest rate was 4.04% for the three months ended March 31, 2020 . 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. In addition to other customary representations, warranties and covenants, the results of the financial covenants are provided below: Quarterly Financial Covenants Requirement Actual EBITDA to fixed charges ratio 1.15 : 1.00 7.13 : 1.00 Total net leverage ratio 3.25 : 1.00 0.19 : 1.00 As of March 31, 2020 , the Company was in compliance with its required debt covenants. |
Reserve for Severance (Tables)
Reserve for Severance (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Severance Reserve [Abstract] | |
Changes in the Company's reserve for severance and related payments | Changes in the Company’s reserve for severance as of March 31, 2020 and 2019 were as follows: (Dollars in thousands) Three Months Ended March 31, 2020 2019 Balance at beginning of period $ 909 $ 359 Charged to earnings 7 27 Payments (365 ) (123 ) Balance at end of period $ 551 $ 263 |
Segment Information Segment Rep
Segment Information Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Financial information for the Company's reportable segments follows: (Dollars in thousands) Three Months Ended March 31, 2020 2019 Revenue Lawson product revenue $ 71,791 $ 73,039 Lawson service revenue 9,700 9,428 Total Lawson revenue 81,491 82,467 Bolt Supply 9,544 8,876 Consolidated total $ 91,035 $ 91,343 Gross profit Lawson product gross profit $ 39,729 $ 40,604 Lawson service gross profit 5,391 5,015 Total Lawson gross profit 45,120 45,619 Bolt Supply 3,801 3,304 Consolidated total $ 48,921 $ 48,923 Operating income Lawson $ 18,094 $ 5,458 Bolt Supply 544 86 Consolidated total 18,638 5,544 Interest expense (115 ) (197 ) Other income (expense), net (1,111 ) 472 Income before income taxes $ 17,412 $ 5,819 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2020Segment | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Number of Reportable Segments | 2 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies Cumulative adjustment to retained earnings (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Cumulative adjustment to retained earnings [Abstract] | |
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 1,937 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Asset, Net | $ 0.7 | $ 0.3 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 91,035 | $ 91,343 |
UNITED STATES | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 73,584 | 74,048 |
CANADA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 17,451 | $ 17,295 |
Revenue Recognition - Product V
Revenue Recognition - Product Vertcal (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Product Revenue [Abstract] | ||
Fastening Systems | 22.80% | 23.50% |
Fluid Power | 14.20% | 15.20% |
Specialty Chemicals | 11.20% | 11.30% |
Cutting Tools and Abrasives | 13.30% | 13.30% |
Electrical | 10.80% | 11.50% |
Aftermarket Automotive Supplies | 8.20% | 8.40% |
Safety | 6.30% | 4.60% |
Welding and Metal Repair | 1.40% | 1.70% |
Other Products | 11.80% | 10.50% |
Total Products | 100.00% | 100.00% |
Restricted Cash Restricted Ca_2
Restricted Cash Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Restricted Cash [Abstract] | |||
Restricted cash | $ 802 | $ 802 | $ 800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Components of inventories | ||
Inventory, Gross | $ 60,668 | $ 60,500 |
Inventory Valuation Reserves | (4,486) | (4,595) |
Inventories, net | $ 56,182 | $ 55,905 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill [Roll Forward] | ||
Impact of foreign exchange | $ (1,368) | $ 372 |
Ending balance | $ 19,555 | $ 20,451 |
Goodwill Narrative (Details)
Goodwill Narrative (Details) $ in Millions | Mar. 31, 2020USD ($) |
Segment Reporting Information [Line Items] | |
Arbitrary Perc Of FMV Over Carrying Value of Reporting Unit | 10.00% |
Bolt Goodwill | $ 12.4 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 300 | $ 300 | |
Finite-Lived Intangible Assets, Gross | 14,870 | $ 15,759 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,594) | (3,424) | |
Finite-Lived Intangible Assets, Net | 11,276 | 12,335 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 7,890 | 8,422 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (2,067) | (2,020) | |
Finite-Lived Intangible Assets, Net | 5,823 | 6,402 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 6,980 | 7,337 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,527) | (1,404) | |
Finite-Lived Intangible Assets, Net | $ 5,453 | $ 5,933 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)leases | Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Other Real Estate Costs | $ 222 | |
Number of types of leases | leases | 2 | |
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 1,937 | |
Retained Earnings [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 1,937 |
Leases - Net Lease Cost (Detail
Leases - Net Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Consolidated Operating Lease Expense | $ 1,187 | $ 1,195 |
Consolidated Financing Lease Amortization | 52 | 48 |
Consolidated Financing Lease Interest | 7 | 6 |
Consolidated Financing Lease Expense | 59 | 54 |
Sublease Income | 0 | (80) |
Net Lease Cost | $ 1,246 | $ 1,169 |
Leases - Net Lease Assets and L
Leases - Net Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Total ROU operating lease assets | $ 9,573 | $ 10,592 |
Total ROU financing lease assets | 605 | 654 |
Total lease assets | 10,178 | 11,246 |
Total current operating lease obligation | 3,580 | 3,591 |
Total current financing lease obligation | 245 | 239 |
Total current lease obligations | 3,825 | 3,830 |
Total long term operating lease obligation | 8,021 | 9,133 |
Total long term financing lease obligation | 310 | 371 |
Total long term lease obligation | 8,331 | 9,504 |
Operating lease accumulated depreciation | 3,851 | 2,832 |
Finance lease accumulated depreciation | $ 258 | $ 206 |
Leases - Value of Lease Liabili
Leases - Value of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating Leases | |
2019 | $ 4,069 |
2020 | 4,081 |
2021 | 2,612 |
2022 | 1,055 |
2023 | 240 |
Subsequent years | 517 |
Total lease payments | 12,574 |
Less: Interest | 973 |
Present value of lease liabilities | 11,601 |
Financing Leases | |
2019 | 268 |
2020 | 174 |
2021 | 110 |
2022 | 43 |
2023 | 0 |
Subsequent years | 0 |
Total lease payments | 595 |
Less: Interest | 40 |
Present value of lease liabilities | 555 |
Total | |
2019 | 4,337 |
2020 | 4,255 |
2021 | 2,722 |
2022 | 1,098 |
2023 | 240 |
Subsequent years | 517 |
Total lease payments | 13,169 |
Less: Interest | 1,013 |
Present value of lease liabilities | $ 12,156 |
Leases - Leases Weighted-Averag
Leases - Leases Weighted-Average Lease Terms and Interest Rates (Details) | Mar. 31, 2020 |
Leases [Abstract] | |
Operating Leases, Weighted Average Term in Years | 3 years 6 months |
Operating Leases, Weighted Average Interest Rate | 5.00% |
Finance Leases, Weighted Average Term in Years | 2 years 8 months 12 days |
Finance Leases, Weighted Average Interest Rate | 5.40% |
Leases - Cash Outflows of the L
Leases - Cash Outflows of the Leasing Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 992 |
Operating cash flow from financing leases | 7 |
Financing cash flow from financing leases | $ 67 |
Loan Agreement (Details)
Loan Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Credit Facility (Textual) [Abstract] | ||
Proceeds from (Repayments of) Lines of Credit | $ 8,189 | $ 2,308 |
Line of Credit Facility, Remaining Borrowing Capacity | 87,500 | |
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 147 | $ 167 |
Weighted average interest rate | 4.04% | |
Stock Repurchase Program, Authorized Amount | $ 7,500 | |
Default limit of other cross indebtedness | 5,000 | |
Revolving Credit Facility [Member] | ||
Credit Facility (Textual) [Abstract] | ||
JP Morgan Credit Agreement Limit | 100,000 | |
JP Morgan Agreement Potential Future Credit Limit | 150,000 | |
Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Credit Facility (Textual) [Abstract] | ||
Long-term Debt | $ 10,500 |
Treasury Stock Repurchase (Deta
Treasury Stock Repurchase (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)shares | |
Treasury Shares Repurchase [Abstract] | |
Stock Repurchase Program, Authorized Amount | $ 7,500,000 |
Treasury Stock, Shares, Acquired | shares | 47,504 |
Average price of treasury shares repurchased during the period | $ 36.93 |
Reserve for Severance Activity
Reserve for Severance Activity in reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reserve for severance and related payments | ||
Balance at beginning of period | $ 909 | $ 359 |
Charged to earnings | 7 | 27 |
Cash paid | (365) | (123) |
Balance at end of the period | $ 551 | $ 263 |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation Details (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock-Based Compensation Details | ||
Employee Benefits and Share-based Compensation | $ (10,700) | $ 408 |
Minimum [Member] | ||
Stock-Based Compensation Details | ||
Equity Share Payout Range | 0 | |
Maximum [Member] | ||
Stock-Based Compensation Details | ||
Equity Share Payout Range | 33,426 |
Stock-Based Compensation Restri
Stock-Based Compensation Restricted Stock Awards (Details) | Mar. 31, 2020shares |
Director Grant [Domain] | |
Stock-Based Compensation Details | |
Restricted Stock Awards Outstanding | 6,847 |
First Executive RSU Grant [Member] | |
Stock-Based Compensation Details | |
Restricted Stock Awards Outstanding | 2,500 |
Second Executive RSU Grant [Member] [Member] | |
Stock-Based Compensation Details | |
Restricted Stock Awards Outstanding | 3,000 |
Stock-Based Compensation Market
Stock-Based Compensation Market Stock Units (Details) | 3 Months Ended |
Mar. 31, 2020shares | |
Maximum [Member] | |
Stock-Based Compensation Details | |
Equity Share Payout Range | 33,426 |
MSU [Member] | |
Stock-Based Compensation Details | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 22,284 |
Stock-Based Compensation Perfor
Stock-Based Compensation Performance Awards (ROIC) (Details) | 3 Months Ended |
Mar. 31, 2020shares | |
Performance Awards (ROIC) [Line Items] | |
Performance Awards (ROIC) | 10,852 |
Minimum [Member] | |
Performance Awards (ROIC) [Line Items] | |
Performance Award Payout Range | 0 |
Maximum [Member] | |
Performance Awards (ROIC) [Line Items] | |
Performance Award Payout Range | 16,278 |
Income Tax Income Tax (Details)
Income Tax Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax [Abstract] | ||
Increase (Decrease) in Deferred Income Taxes | $ (3,196) | $ (1,427) |
Income Tax Expense (Benefit) | $ 4,879 | $ 1,673 |
Effective income tax rate | 28.00% | 28.80% |
Income Taxes Paid | $ 198 | $ 99 |
Contingent Liability Continge_2
Contingent Liability Contingent Liability (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Loss Contingencies [Line Items] | |
Payments for Environmental Liabilities | $ 1.3 |
Environmental Exit Costs, Costs Accrued to Date | $ 0.1 |
Segment Information Segment R_2
Segment Information Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)Segment | Mar. 31, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of Reportable Segments | Segment | 2 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 91,035 | $ 91,343 |
Gross profit | 48,921 | 48,923 |
Operating income | 18,638 | 5,544 |
Interest Expense | 115 | 197 |
Other Nonoperating Income (Expense) | (1,111) | 472 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 17,412 | 5,819 |
Lawson [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 81,491 | 82,467 |
Gross profit | 45,120 | 45,619 |
Operating income | 18,094 | 5,458 |
Bolt [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,544 | 8,876 |
Gross profit | 3,801 | 3,304 |
Operating income | 544 | 86 |
Product [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 81,335 | 81,915 |
Product [Member] | Lawson [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 71,791 | 73,039 |
Gross profit | 39,729 | 40,604 |
Service [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,700 | 9,428 |
Service [Member] | Lawson [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross profit | $ 5,391 | $ 5,015 |
COVID-19 (Details)
COVID-19 (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | |
COVID-19 [Line Items] | |||
Cash and Cash Equivalents, at Carrying Value | $ 4,095 | $ 5,495 | $ 3,603 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 87,500 | ||
Restructuring and Related Cost, Expected Number of Positions Eliminated | 100 |