<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 11, 1998
The Lamson & Sessions Co.
(Exact Name of Registrant as Specified in Its Charter)
Ohio
(State or Other Jurisdiction of Incorporation)
1-313 34-0349210
----- ----------
(Commission File Number) (I.R.S. Employer Identification Number)
25701 Science Park Drive
Cleveland, Ohio 44122
(Address of Principal Executive Offices) (Zip Code)
(216) 464-3400
(Registrant's Telephone Number, Including Area Code)
------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On December 11, 1998, the Lamson & Sessions Co. ("Lamson") executed an
agreement to sell substantially all of its polyvinyl chloride pipe
business assets and certain liabilities (the "PVC Pipe Business") to
Eagle Pacific Industries, Inc. ("Eagle Pacific"). Lamson will receive
$45.0 million in cash, $6.0 million in Eagle Pacific subordinated notes
and 785,000 shares of Eagle Pacific common stock as consideration for
the sale of the PVC Pipe Business. In addition, approximately $6.0
million in retained net working capital related to the PVC Pipe
Business is expected to be converted to cash in 60 to 90 days after
completion of the sale.
The consummation of the PVC Pipe Business sale is conditioned upon,
among other things, antitrust clearance and the approval by Eagle
Pacific's shareholders of a contemporaneous transaction between Eagle
Pacific and CONDEA Vista Company. The sale is expected to be
consummated by the end of the first quarter of 1999.
Item 7. Financial Statement and Exhibits.
(a) Financial statements of business acquired.
None.
(b) Pro forma financial information.
None.
(c) Exhibits.
20.1 Press Release dated December 14, 1998.
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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 hereunto duly authorized.
THE LAMSON & SESSIONS CO.
Date: December 28, 1998 By /s/ James J. Abel
---------------------------------------
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
EXHIBIT INDEX
to
FORM 8-K
THE LAMSON & SESSIONS CO.
20.1 Press Release dated December 14, 1998.
<PAGE> 1
Exhibit 20.1
7TH STORY of Level 1 printed in FULL format.
Copyright 1998 Business Wire, Inc.
Business Wire
December 14, 1998, Monday
DISTRIBUTION: Business Editors
LENGTH: 902 words
HEADLINE: Lamson & Sessions Sells PVC Pipe Business and Consolidates
Distribution Network
DATELINE: CLEVELAND
BODY:
Dec. 14, 1998--Lamson & Sessions (NYSE:LMS) today announced an agreement to
sell substantially all of its PVC Pipe Business assets and certain liabilities
to Eagle Pacific Industries, Inc. (Nasdaq/Small Cap:EPII) of Minneapolis,
Minnesota. In conjunction with the purchase of Lamson & Sessions' PVC Pipe
Business, Eagle Pacific has also signed a merger agreement pursuant to which a
PVC resin manufacturing facility in Oklahoma City, Oklahoma, owned and operated
by CONDEA Vista Company, which is wholly owned by RWE-DEA AG of Hamburg,
Germany, will be merged into Eagle Pacific. CONDEA Vista will become a major
equity holder in Eagle Pacific. The transactions are anticipated to close
simultaneously before the end of the first quarter of 1999 and are subject to
Hart Scott Rodino antitrust clearance and the approval of the shareholders of
Eagle Pacific. "We will now intensify our focus on building the Company into a
preeminent producer and marketer of electrical and cable management products
providing innovative solutions to customers in the industrial, communications,
power, construction and retail markets," said John B. Schulze, Chairman and
Chief Executive Officer. Lamson & Sessions values this transaction at
approximately $ 58 million. The transaction consists of $ 45 million in cash, $
6 million in buyer notes, 785,000 shares of Eagle Pacific stock, and
approximately $ 6 million in retained net working capital related to the PVC
Pipe Business which is expected to be converted to cash in 60 to 90 days after
completion of the sale. Mr. Schulze added: "While this sale is the culmination
of a strategic effort to reduce our exposure to the volatility of polyvinyl
chloride resin pricing, the equity interest that Lamson will have in Eagle
Pacific will help to assure our electrical distributor, telecommunication, and
home center customers the continuity of a one-stop shopping source for
electrical conduit." Lamson & Sessions' PVC Pipe Business represents
approximately 40 percent of the Company's 1997 sales, which totaled $ 272
million, and includes four production plants located in Nazareth, Pennsylvania;
High Springs, Florida; Oklahoma City; Oklahoma and Woodland, California. "The
proceeds from this sale will be used to significantly reduce our debt, and will
potentially be used to finance acquisitions and/or buy back stock," said James
J. Abel, Executive Vice President and Chief Financial Officer. "The debt
repayment will occur concurrent with the completion of the sale. Any further
deployment of the proceeds will be announced at a later time but should occur in
the first half of 1999." In addition, Mr. Abel indicated that the Company will
realize a gain of at least $ 6 million on completion of the sale. In addition to
the sale of the PVC Pipe Business, Lamson & Sessions has announced it is
<PAGE> 2
Business Wire, December 14, 1998
building a 350,000 square-foot distribution center in Columbia, South Carolina,
with operations scheduled to begin in February 1999. The facility will include
state-of-the-art material handling and warehouse management systems to optimize
inventory control, reduce order cycle time and increase customer order fill
rates. When the facility becomes operational, Lamson & Sessions will consolidate
its distribution functions in the new center and the Company's existing
Woodland, California, facility. To cover the costs associated with the
consolidation of its distribution facilities, the Company will incur a pretax
restructuring charge totaling $ 2 million to $ 4 million, or 15 to 30 cents per
share, which will be reflected in the financial results for the fourth quarter
of 1998 and the first and second quarters of 1999. The Company expects to
realize an annualized savings of 25 to 35 cents per share beginning in the third
quarter of 1999 when this consolidation project is complete. The Company's
expectations concerning the sale of its PVC Pipe Business and the consolidation
of its distribution centers are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. The actual outcome of this
initiative may differ materially from those expected as a result of a variety of
factors such as (i) a material change in the financial performance of the PVC
Pipe Business, (ii) the ability of Eagle Pacific to secure the approval of its
shareholders, (iii) the ability of Eagle Pacific to complete the necessary
financing of the purchase, (iv) a delay in the construction of the Columbia,
South Carolina, Distribution Center, (v) unpredictable technological innovations
that could make the Company's products comparatively less attractive, and (vi)
changes in local, state and federal regulations relating to building codes and
the environment (in each case as they may affect the attractiveness of the
Company's products and manufacturing costs). Lamson & Sessions is a leading
producer of conduit, fittings, thermoplastic enclosures, fittings, cable
management products, and wireless devices for the electrical, construction,
consumer, power and communications and waste water rehabilitation markets.
CONTACT: Lamson & Sessions
James J. Abel, 216/766-6557
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