<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- -----------
Commission File Number 1-313
------
T H E L A M S O N & S E S S I O N S C O.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 34-0349210
-------------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
25701 Science Park Drive
Cleveland, Ohio 44122-9803
-------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
216/464-3400
------------------------------------------------------
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of October 31, 1996 the Registrant had outstanding 13,301,084 common shares.
- 1 -
<PAGE> 2
PART I
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THIRD QUARTER ENDED NINE MONTHS ENDED
-------------------- ----------------------
1996 1995 1996 1995
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales $78,098 $85,716 $219,481 $229,584
Cost of products sold 62,276 68,989 173,395 185,237
------- ------- -------- --------
GROSS PROFIT 15,822 16,727 46,086 44,347
Selling, general and
administrative expenses 11,807 11,847 36,463 32,724
------- ------- -------- --------
OPERATING INCOME 4,015 4,880 9,623 11,623
Interest 593 1,528 1,936 4,935
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 3,422 3,352 7,687 6,688
Income Tax Benefit 700 2,050
------- ------- -------- --------
NET INCOME $ 4,122 $ 3,352 $ 9,737 $ 6,688
======= ======= ======== ========
EARNINGS PER COMMON SHARE $ 0.30 $ 0.25 $ 0.71 $ 0.50
======= ======= ======== ========
AVERAGE COMMON SHARES 13,674 13,413 13,688 13,385
======= ======= ======== ========
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
- 2 -
<PAGE> 3
CONSOLIDATED BALANCE SHEET (UNAUDITED)
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR END
--------------------------
1996 1995
---------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 434 $ 1,431
Accounts receivable 46,685 34,828
Inventories
Raw materials and supplies 5,908 4,527
Finished goods and work-in-process 30,521 30,491
--------- ---------
36,429 35,018
Prepaid expenses and other 10,416 9,767
--------- ---------
TOTAL CURRENT ASSETS 93,964 81,044
OTHER ASSETS 4,223 2,680
PROPERTY, PLANT AND EQUIPMENT 121,710 111,129
Less allowances for depreciation and amortization 63,937 59,382
--------- ---------
57,773 51,747
--------- ---------
TOTAL ASSETS $ 155,960 $ 135,471
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 24,887 $ 17,322
Accrued expenses and other liabilities 27,012 25,420
Taxes 3,548 3,875
Current maturities of long-term debt 3,476 3,767
--------- ---------
TOTAL CURRENT LIABILITIES 58,923 50,384
LONG-TERM DEBT 28,508 24,842
POST-RETIREMENT BENEFITS AND OTHER LONG TERM LIABILITIES 27,823 29,326
SHAREHOLDERS' EQUITY
Common shares 1,332 1,329
Other capital 72,790 72,743
Retained earnings (deficit) (30,917) (40,654)
Pension adjustment (2,499) (2,499)
--------- ---------
40,706 30,919
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 155,960 $ 135,471
========= =========
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
- 3 -
<PAGE> 4
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------
1996 1995
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 9,737 $ 6,688
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 6,256 6,621
Deferred income tax benefit (2,050)
Net change in working capital accounts:
Accounts receivable (11,857) (11,166)
Inventories (1,411) 329
Prepaid expenses and other 1 (208)
Current liabilities 8,830 4,666
Net change in other long-term items (1,646) (482)
-------- --------
Cash provided by operating activities 7,860 6,448
INVESTING ACTIVITIES
Proceeds from sale of business 3,742
Purchases of property, plant and equipment (12,282) (4,503)
-------- --------
CASH USED BY INVESTING ACTIVITIES (12,282) (761)
FINANCING ACTIVITIES
Net change in secured credit agreement 3,224 (5,203)
Net changes in long-term borrowing and capital lease obligations 151 (851)
Exercise of stock options 50 66
-------- --------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES 3,425 (5,988)
DECREASE IN CASH (997) (301)
Cash at beginning of year 1,431 1,885
-------- --------
CASH AT END OF THE PERIOD $ 434 $ 1,584
======== ========
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
- 4 -
<PAGE> 5
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the results of operations have been included. Certain 1995
amounts have been reclassified to conform with 1996 classifications.
- 5 -
<PAGE> 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 28, 1996
AND COMPARABLE PERIODS ENDED SEPTEMBER 30, 1995
CONSOLIDATED INCOME STATEMENT
Net sales decreased 2% for the third quarter and increased 3% for the nine-month
period ended September 28, 1996, after excluding the Company's former aerospace
fastener business sales from 1995 results. The third quarter sales decrease is
primarily the result of lower selling prices in price sensitive commodity rigid
pipe products. Pricing was 16% lower in the third quarter for these products
while volume was less than 5% lower than the prior year's period. These effects
were largely offset by the double digit volume growth in the Company's specialty
products which underlies the shift to a more highly engineered product offering.
Although overall unit volume is stronger than in the prior year period, the lack
of price elasticity in rigid conduit products reduced sales and earnings. For
the nine-month period, a 15% sales increase in Vylon(R) sewer products and other
non-commodity products has offset rigid pipe sales decreases for a net 3% sales
gain compared to the prior year period.
Gross margin increased 4% to over 20% in the third quarter and 9% to 21% for the
first nine months of 1996. The primary reasons for the improvement were higher
utilization rates in the Company's manufacturing plants and stronger volume in
electrical fittings, wiring devices, multi-cell and flexible pipe, and Vylon(R)
sewer products.
Selling, general and administrative expenses were at 15% of net sales in the
third quarter and 17% for the first nine months, in line with current year
budgets, compared to 14% in the comparable periods of 1995. The increases
reflect accelerated marketing efforts as well as increased staffing and
associated costs for product development programs and the TOPPS information
technology project. Reduced borrowing levels in the current quarter and
year-to-date, combined with lower financing rates, continue to generate the
significant reductions in interest expense. The Company recorded an income tax
benefit of $.7 million in the third quarter and $2.1 million year to date from a
reduction in the valuation allowance placed on deferred tax assets due to
continuing improvement in its overall performance.
CONSOLIDATED BALANCE SHEET
Accounts receivable increased approximately $12 million compared to year-end
levels due to higher sales volume during the mid-year period. Inventory
increased over $1 million compared to year-end levels primarily due to higher
raw material costs. Accounts payable increased nearly $8 million compared to
year-end levels reflecting increased capital spending and improved cash
management. Total debt increased nearly $4 million compared to year-end as
seasonal working capital requirements were funded using the revolving credit
line.
- 6 -
<PAGE> 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
CONSOLIDATED STATEMENT OF CASH FLOWS
Increased income, receipt of the sold aerospace fastener business receivable,
and lower working capital requirements primarily accounted for the increase in
operating cash flow in the first nine months compared to the prior year period.
Capital spending increased nearly $8 million over the prior year nine months
mainly from requirements of projects relating to operating efficiency,
information systems and communication as well as product development programs.
OUTLOOK AND UPDATE
The Company previously announced that the difficult market pricing environment
experienced in the third quarter could impact fourth quarter performance and
reduce the 1996 earnings target by 10-15%. However, management believes that the
Company will report favorable results for the fourth quarter compared to the
prior year exclusive of the tax credit which substantially benefited 1995's
fourth quarter.
The Company expects to achieve continued sales and earnings growth in 1997 based
on current estimates for 1997 construction spending, housing starts, interest
rates, retail spending and general economic improvement and due to the
acquisition of Dimango Products Corporation, a leading manufacturer and
distributor of wireless door chimes, home security devices and other wireless
electrical products.
These forward looking comments are subject to the cautionary limitations
outlined in the Company's current report on Form 8-K filed in June 1996.
PART II
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------------- ------------------------------------------------------
<S> <C>
10(w) Amendment No. 4 dated as of October 25, 1996, to the
Amended and Restated Loan Agreement dated as of July
14, 1995 by and between the Company and General
Electric Capital Corporation ("GECC Loan Agreement")
filed herewith.
10(x) Waiver dated as of September 30, 1996, to the GECC
Loan Agreement filed herewith.
11 Computation of Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
for the three months ended September 28, 1996.
</TABLE>
- 7 -
<PAGE> 8
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE LAMSON & SESSIONS CO.
-------------------------
(Registrant)
DATE: November 12, 1996 By /s/ James J. Abel
------------------- ---------------------------------
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
- 8 -
<PAGE> 1
Exhibit 10(w)
AMENDMENT NO. 4
Dated as of October 25, 1996
THIS AMENDMENT NO. 4 ("Amendment") is entered into as of
October 25, 1996 by and among THE LAMSON & SESSIONS CO., an Ohio corporation
(the "Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("GE Capital"), as the sole "Lender" (as defined in the Loan Agreement referred
to below) and GE Capital as agent for the Lenders (in such capacity, the
"Agent").
PRELIMINARY STATEMENT
A. The Borrower, the Lender and the Agent are parties to that
certain Loan Agreement dated as of February 13, 1992, as amended and restated as
of July 14, 1995 (as amended from time to time, the "Loan Agreement").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Loan Agreement as amended by this Amendment.
B. The Borrower has entered into a Stock Purchase Agreement
(the "Dimango Purchase Agreement"), dated as of October 25, 1996, with Dimango
Products Corporation ("Dimango"), Paul G. Angott, Thomas G. Xydis, Clifford G.
Dimmitt and Dennis R. Durco, pursuant to which the Borrower has agreed to
acquire all of the outstanding capital stock of Dimango.
C. The Lender and the Agent have agreed to such acquisition,
subject to the terms hereof, and the Borrower, the Lender and the Agent
accordingly have agreed to amend the Loan Agreement on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth
above, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrower, the Lenders and the Agent hereby
agree as follows:
SECTION 1. AMENDMENT TO THE LOAN AGREEMENT. Subject to the
satisfaction of the conditions precedent set forth in Section 2 below, the Loan
Agreement is hereby amended as follows:
1.01. SECTION 1.1 of the Loan Agreement is amended by adding
the following definitions, to be inserted in Section 1.1 in alphabetical order:
- 1 -
<PAGE> 2
"DIMANGO" shall mean Dimango Products Corporation, a Michigan
corporation and a wholly-owned subsidiary of the Borrower.
"DIMANGO GUARANTY" shall mean that certain Guaranty and
Security Agreement dated October 25, 1996 executed by Dimango in favor
of the Agent, guarantying the Obligations and granting to the Agent a
security interest in all of Dimango's personal property.
"DIMANGO LOAN AGREEMENT" shall mean that certain Loan
Agreement dated as of October 25, 1996 between Borrower, as lender, and
Dimango, as borrower, establishing a loan facility in an amount not to
exceed $2,500,000.
"DIMANGO LOAN AGREEMENT ASSIGNMENT" shall mean that certain
Assignment dated as of October 25, 1996, executed by Borrower and
acknowledged by Dimango, assigning to the Agent, for the benefit of the
Lenders, all of Borrower's rights under the Dimango Loan Agreement.
"DIMANGO PLEDGE AGREEMENT" shall mean that certain Pledge
Agreement dated October 25, 1996 executed by Borrower in favor of the
Agent, pledging to the Agent all of the stock of Dimango.
"DIMANGO PURCHASE AGREEMENT" shall mean that certain Stock
Purchase Agreement dated as of October 25, 1996 by and among Borrower,
Dimango, Paul G. Angott, Thomas G. Xydis, Clifford G. Dimmitt and
Dennis R. Durco.
"DIMANGO PURCHASE AGREEMENT ASSIGNMENT" shall mean that
certain Assignment of Purchase Agreement Rights, dated as of October
25, 1996, pursuant to which Borrower assigns to the Agent for the
benefit of itself and the Lenders its rights under the Dimango Purchase
Agreement.
1.02. SECTION 1.1 of the Loan Agreement is further amended by
adding the following after "the Letter of Credit Agreement," in the definition
of "Loan Documents":
"the Dimango Loan Agreement, the Dimango Loan Agreement
Assignment, the Dimango Guaranty, the Dimango Pledge Agreement, the
Dimango Purchase Agreement Assignment,".
1.03. SECTION 8.1 of the Loan Agreement is amended by adding
"(other than Dimango)" after the words "form any Subsidiary" appearing in such
Section.
- 2 -
<PAGE> 3
1.04. SECTION 8.2 of the Loan Agreement is amended by striking
"and " prior to clause (h) thereof, and "and" prior to clause (h)(iii) thereof,
and adding the following immediately preceding the period at the end of SECTION
8.2:
"; and (iv) loans to Dimango pursuant to the Dimango Loan
Agreement, in an amount not to exceed $2,500,000 at any time
outstanding, provided that any such loans are assigned to the
Agent pursuant to the Dimango Loan Agreement Assignment; and
(i) the stock of Dimango acquired pursuant to the Dimango
Purchase Agreement."
1.05. SECTION 8.3(a) of the Loan Agreement is amended by
striking "and "prior to clause (viii) thereof and adding the following
immediately preceding the period at the end of SECTION 8.3:
"; and (ix) Indebtedness of Dimango to the Borrower under the
Dimango Loan Agreement"
SECTION 2. CONDITIONS PRECEDENT. This Amendment shall
become effective upon the first Business Day upon which all
of the following conditions shall be satisfied:
(i) the Agent shall have received four (4) copies of this
Amendment duly executed by the Borrower, the Lender and the
Agent;
(ii) the Agent shall have received Reaffirmations of Guaranty
and Security Agreement in substantially the form of EXHIBIT A
attached hereto, duly executed by each of Carlon Chimes and
Youngstown Steel Door;
(iii) the Borrower and Dimango shall have executed and
delivered the Dimango Loan Agreement, the Dimango Loan
Agreement Assignment and the Dimango Purchase Agreement
Assignment, and delivered executed copies thereof to the
Agent;
(iv) Dimango shall have executed and delivered to the Agent,
in form and substance satisfactory to the Agent, the Dimango
Guaranty;
(v) Dimango shall have executed and delivered to the Agent
such UCC-1 financing statements as the Agent may request in
order to perfect the security interests granted by the
security agreement described in clause (iv) above; and
(vi) Borrower shall have executed and delivered to the Agent,
in form and substance satisfactory to the Agent, the Dimango
Pledge Agreement, together with stock certificates
representing all issued and outstanding stock of Dimango and
signed but undated stock powers endorsed in blank covering
such certificates; and
- 3 -
<PAGE> 4
(vii) The Agent shall have received an executed copy of the
Dimango Purchase Agreement and Borrower shall have acquired
all of the outstanding stock of Dimango pursuant to the terms
of the Dimango Purchase Agreement.
SECTION 3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE
BORROWER.
3.1 Upon the effectiveness of this Amendment, the Borrower
hereby reaffirms all covenants, representations and warranties made by it in the
Loan Agreement to the extent the same are not amended hereby and agrees that all
such covenants, representations and warranties shall be deemed to have been
re-made as of the effective date of this Amendment.
3.2 The Borrower hereby represents and warrants that this
Amendment constitutes the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general principles of equity which may limit the availability of
equitable remedies.
SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT.
4.1 Upon the effectiveness of this Amendment, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein,"
"hereby" or words of like import shall mean and be a reference to the Loan
Agreement as amended hereby, and each reference to the Loan Agreement in any
other document, instrument or agreement executed and/or delivered in connection
with the Loan Agreement shall mean and be a reference to the Loan Agreement as
amended hereby.
4.2 Except as specifically amended hereby, the Loan Agreement
and other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby
ratified and confirmed.
4.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of any
Lender or the Agent under the Loan Agreement or any of the other Loan Documents,
nor constitute a waiver of any provision contained therein, except as
specifically set forth herein.
SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS
OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF ILLINOIS.
- 4 -
<PAGE> 5
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
SECTION 7. HEADINGS. Section headings in this Amendment
are included herein for convenience or reference only and shall not constitute
a part of this Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereto duly authorized as
of the date first written above.
THE LAMSON AND SESSIONS CO.
By:/s/ James J. Abel
Name: James J. Abel
Title: Executive Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as the Agent
and as the sole Lender
By:/s/ Shaun Pettit
Name: Shaun Pettit
Title: Duly Authorized Signatory
- 5 -
<PAGE> 1
Exhibit 10(x)
WAIVER
Dated as of September 30, 1996
THIS WAIVER ("Waiver") is entered into as of
September 30, 1996 by and among THE LAMSON & SESSIONS CO., an Ohio corporation
(the "Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("GE Capital"), as the sole "Lender" (as defined in the Loan Agreement referred
to below) and GE Capital as agent for the Lenders (in such capacity, the
"Agent").
PRELIMINARY STATEMENT
A. The Borrower, the Lender and the Agent are parties to that
certain Loan Agreement dated as of February 13, 1992, as amended and restated as
of July 14, 1995 (as the same has been and may be further amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Loan Agreement.
B. The Borrower has requested that GE Capital, as the Agent
and the sole Lender, waive the Borrower's compliance with the minimum EBITDA
covenant set forth in Section 7.3(f) of the Loan Agreement for the fiscal
quarter ending nearest September 30, 1996, and GE Capital, as such Agent and
sole Lender, has agreed to waive such compliance subject to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth
above, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrower, the Lender and the Agent hereby
agree as follows:
SECTION 1. Waiver. The Borrower has failed to comply with
SECTION 7.3(f) of the Loan Agreement by reason of the Borrower's failure to meet
the minimum Consolidated EBITDA covenant set forth therein for the fiscal
quarter ending nearest September 30, 1996. Effective as of the date first above
written, subject to the satisfaction of the conditions precedent set forth in
SECTION 2 below, GE Capital, as the Agent and the sole Lender, hereby waives the
Borrower's compliance with such covenant for such period.
- 1 -
<PAGE> 2
SECTION 2. CONDITIONS PRECEDENT. This Waiver shall become
effective and be deemed effective as of the date first above written upon the
Agent's having received the following:
(a) four (4) copies of this Waiver duly executed by the
Borrower, the Lender and the Agent; and
(b) Reaffirmations of Guaranty and Security Agreement in
substantially the form of EXHIBIT A attached hereto, duly executed by
each of Carlon Chimes and Youngstown Steel Door.
SECTION 3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE
BORROWER.
3.1 Except to the extent that any representation or warranty
expressly is made only with respect to an earlier date, upon the effectiveness
of this Waiver, the Borrower hereby reaffirms all covenants, representations and
warranties made by it in the Loan Agreement to the extent the same are not
modified hereby and agrees that all such covenants, representations and
warranties shall be deemed to have been re-made as of the effective date of this
Waiver.
3.2 The Borrower hereby represents and warrants that this
Waiver constitutes the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general principles of equity which may limit the availability of
equitable remedies.
SECTION 4. EFFECT ON THE LOAN AGREEMENT.
4.1 Except as specifically amended hereby, the Loan Agreement
and other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby
ratified and confirmed.
4.2 The execution, delivery and effectiveness of this Waiver
shall not operate as a waiver of any right, power or remedy of any Lender or the
Agent under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision contained therein, except as specifically
set forth herein.
SECTION 5. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAW PROVISIONS) AND DECISIONS OF THE STATE OF ILLINOIS.
- 2 -
<PAGE> 3
SECTION 6. EXECUTION IN COUNTERPARTS. This Waiver may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
SECTION 7. HEADINGS. Section headings in this Waiver are
included herein for convenience or reference only and shall not constitute a
part of this Waiver for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver
to be executed by their respective officers thereto duly authorized as of the
date first written above.
THE LAMSON & SESSIONS CO.
By:/s/ James J. Abel
Title: Executive Vice President,
Treasurer and Chief Financial
Officer
GENERAL ELECTRIC CAPITAL CORPORATION, as
the Agent and as the sole Lender
By:/s/ Shaun Pettit
Title: Duly Authorized Signatory
- 3 -
<PAGE> 1
Exhibit 11
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
EXHIBIT (11) - COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THIRD QUARTER ENDED NINE MONTHS ENDED
----------------------------- --------------------------
PRIMARY 1996 1995 1996 1995
------------ ----------- ---------- -----------
<S> <C> <C> <C> <C>
Average common stocks outstanding 13,301,084 13,291,751 13,296,084 13,286,910
Average common share equivalents:
Stock options and warrants - based
on treasury stock method using
average market price 372,493 121,151 391,868 98,231
----------- ----------- ----------- -----------
TOTALS 13,673,577 13,412,902 13,687,952 13,385,141
FULLY DILUTED
Average common shares outstanding 13,301,084 13,291,751 13,296,084 13,286,910
Average common share equivalents:
Stock options and warrants - based
on treasury stock method 372,493 121,151 409,354 98,231
----------- ----------- ----------- -----------
TOTALS 13,673,577 13,412,902 13,705,438 13,385,141
NET EARNINGS $ 4,122,000 $ 3,352,000 $ 9,737,000 $ 6,688,000
=========== =========== =========== ===========
Earnings per common share and common share equivalents:
Primary Net Earnings Per Share $ 0.30 $ 0.25 $ 0.71 $ 0.50
=========== =========== =========== ===========
Fully Diluted Net Earnings Per Share $ 0.30 $ 0.25 $ 0.71 $ 0.50
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> JUN-30-1996
<PERIOD-END> SEP-28-1996
<CASH> 434
<SECURITIES> 0
<RECEIVABLES> 46,685
<ALLOWANCES> 0
<INVENTORY> 36,429
<CURRENT-ASSETS> 93,964
<PP&E> 121,710
<DEPRECIATION> 63,937
<TOTAL-ASSETS> 155,960
<CURRENT-LIABILITIES> 58,923
<BONDS> 28,508
<COMMON> 1,332
0
0
<OTHER-SE> 39,374
<TOTAL-LIABILITY-AND-EQUITY> 155,960
<SALES> 78,098
<TOTAL-REVENUES> 78,098
<CGS> 62,276
<TOTAL-COSTS> 62,276
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 593
<INCOME-PRETAX> 3,422
<INCOME-TAX> (700)
<INCOME-CONTINUING> 4,122
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,122
<EPS-PRIMARY> $.30
<EPS-DILUTED> $.30
</TABLE>
