<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 July 3, 1999
------------
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 44122-7313
- ------------------------------------- -----------------------------------
(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 July 3, 1999 the Registrant had outstanding 13,444,534 common shares.
-1-
<PAGE> 2
PART I
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED FIRST HALF ENDED
------------------- -------------------
1999 1998 1999 1998
------------------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $ 74,482 $ 71,168 $141,680 $135,962
Cost of products sold 60,352 55,928 112,098 107,349
-------- -------- -------- --------
GROSS PROFIT 14,130 15,240 29,582 28,613
Operating expenses 12,116 12,347 24,717 24,909
-------- -------- -------- --------
OPERATING INCOME 2,014 2,893 4,865 3,704
Interest expense 927 1,242 1,754 2,379
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 1,087 1,651 3,111 1,325
Income tax benefit 700 700 1,400 700
-------- -------- -------- --------
NET INCOME $ 1,787 $ 2,351 $ 4,511 $ 2,025
======== ======== ======== ========
BASIC EARNINGS PER COMMON SHARE $ 0.13 $ 0.18 $ 0.34 $ 0.15
======== ======== ======== ========
DILUTED EARNINGS PER COMMON SHARE $ 0.13 $ 0.17 $ 0.33 $ 0.15
======== ======== ======== ========
AVERAGE COMMON SHARES 13,445 13,425 13,445 13,420
======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
-2-
<PAGE> 3
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SECOND QUARTER SECOND QUARTER
ENDED YEAR END ENDED
------------ ------------ ------------
1999 1998 1998
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 587 $ 1,937 $ 848
Accounts receivable 44,197 35,080 43,197
Inventories
Finished goods and work-in-process 34,780 33,873 35,015
Raw materials and supplies 4,743 5,289 4,854
------------ ------------ ------------
39,523 39,162 39,869
Deferred tax asset 6,381 6,057 5,707
Prepaid expenses and other 3,117 1,739 3,972
------------ ------------ ------------
TOTAL CURRENT ASSETS 93,805 83,975 93,593
PENSION ASSETS 17,244 15,347 11,700
OTHER ASSETS 12,308 10,610 10,154
PROPERTY, PLANT AND EQUIPMENT 117,396 113,842 112,321
Less allowance for depreciation and amortization 66,749 63,107 58,771
------------ ------------ ------------
50,647 50,735 53,550
------------ ------------ ------------
TOTAL ASSETS $ 174,004 $ 160,667 $ 168,997
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 23,968 $ 20,077 $ 21,264
Accrued expenses and other liabilities 22,105 19,648 22,791
Taxes 3,537 3,705 3,640
Current maturities of long-term debt 3,874 3,848 3,799
------------ ------------ ------------
TOTAL CURRENT LIABILITIES 53,484 47,278 51,494
LONG-TERM DEBT 45,906 40,807 49,951
POST-RETIREMENT BENEFITS AND
OTHER LONG-TERM LIABILITIES 25,970 28,451 28,378
SHAREHOLDERS' EQUITY
Common shares 1,344 1,344 1,344
Other capital 73,574 73,574 73,574
Retained earnings (deficit) (25,489) (30,000) (34,654)
Accumulated other comprehensive loss (785) (787) (1,090)
------------ ------------ ------------
48,644 44,131 39,174
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 174,004 $ 160,667 $ 168,997
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited)
-3-
<PAGE> 4
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FIRST HALF ENDED
--------------------
1999 1998
--------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,511 $ 2,025
Adjustments to reconcile net income to cash by operations:
Depreciation and amortization 4,926 5,038
Deferred income tax benefit (1,400) (700)
Loss on retirement of assets 110
Net change in working capital accounts:
Accounts receivable (9,117) (10,246)
Inventories (361) 5,706
Prepaid expenses and other (1,702) 1,952
Current liabilities 6,180 (5,776)
Net change in other long-term items (4,872) (1,946)
-------- --------
CASH USED BY OPERATING ACTIVITIES (1,725) (3,947)
INVESTING ACTIVITIES
Net purchases of property, plant and equipment (4,749) (2,062)
-------- --------
CASH USED BY INVESTING ACTIVITIES (4,749) (2,062)
FINANCING ACTIVITIES
Net change in secured credit agreement 5,329 5,435
Net changes in long-term borrowing and capital lease obligations (205) (156)
Exercise of stock options -- 168
-------- --------
CASH PROVIDED BY FINANCING ACTIVITIES 5,124 5,447
DECREASE IN CASH (1,350) (562)
Cash at beginning of year 1,937 1,410
-------- --------
CASH AT END OF THE PERIOD $ 587 $ 848
======== ========
</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 and changes in accounting estimates)
considered necessary for a fair presentation of the results of operations have
been included. Certain 1998 amounts have been reclassified to conform with 1999
classifications.
NOTE B - INCOME TAXES
The difference in the first half of 1999 between the tax provision and the
applicable statutory tax rate is due to changes in the valuation allowance
related to the tax benefit arising from prior year net operating loss
carryforwards.
NOTE C - BUSINESS SEGMENTS
In the second quarter of 1999, the Company changed its segment reporting
structure to more closely match management's internal reporting of business
operations. Significant changes include the segregating of the PVC Pipe
business, which had been identified for divestiture from the Carlon and Lamson
Home Product businesses. All other segment data has been restated to conform
with this revised presentation.
The Company's reportable segments are as follows:
CARLON - INDUSTRIAL, RESIDENTIAL, COMMERCIAL, TELECOMMUNICATIONS AND UTILITY
CONSTRUCTION: The major customers served are electrical contractors and
distributors, original equipment manufacturers, electric power utilities, cable
television (CATV), telephone and telecommunications companies. The principal
products sold by this segment include, electrical and wire raceway systems and a
broad line of nonmetallic enclosures, outlet boxes and electrical fittings.
Examples of the applications for the products included in this segment are
multi-cell duct systems designed to protect underground fiber optic cables
allowing future cabling expansion and flexible conduit used inside buildings to
protect communications cable.
LAMSON HOME PRODUCTS - CONSUMER: The major customers served are home centers and
mass merchandisers for the "do-it-yourself" home repair market. The products
included in this segment are light dimmers, fan speed controls, touch controls,
wireless door chimes, motion sensors and home security systems. In addition,
this segment supplies its market with products such as outlet boxes, liquidtight
conduit and electrical fittings.
PVC PIPE: This business segment supplies electrical, power and communications
conduit to the electrical distribution, retail, power utility and
telecommunications markets. In addition, it provides engineered sewer products
to various municipalities and private contractors for drainage systems and sewer
construction and rehabilitation. Principal products utilized by the waste water
market include closed profile engineered sewer pipe for new sewer construction
and existing sewer line rehabilitation. The products range in diameter from 4
inches to 54 inches for sewer products and 1/2 inch to 6 inches for electrical
conduit.
-5-
<PAGE> 6
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE C - BUSINESS SEGMENTS - CONTINUED
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED FIRST HALF ENDED
---------------------------------- ----------------------------------
1999 1998 1999 1998
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
NET SALES
Carlon $ 31,977 $ 28,834 $ 59,219 $ 55,511
Lamson Home Products 12,397 11,825 25,784 24,569
PVC Pipe 30,108 30,509 56,677 55,882
--------------- --------------- --------------- ---------------
$ 74,482 $ 71,168 $ 141,680 $ 135,962
=============== =============== =============== ===============
OPERATING INCOME (LOSS)
Carlon $ 5,179 $ 4,771 $ 7,919 $ 7,783
Lamson Home Products 617 (731) 898 (1,227)
PVC Pipe (684) 768 1,509 1,106
Corporate Office (includes
restructuring charges for consolidation
of distribution operations) (3,098) (1,915) (5,461) (3,958)
--------------- --------------- --------------- ---------------
$ 2,014 $ 2,893 $ 4,865 $ 3,704
=============== =============== =============== ===============
DEPRECIATION AND AMORTIZATION
Carlon $ 870 $ 826 $ 1,764 $ 1,774
Lamson Home Products 659 642 1,337 1,357
PVC Pipe 890 888 1,825 1,907
--------------- --------------- --------------- ---------------
$ 2,419 $ 2,356 $ 4,926 $ 5,038
=============== =============== =============== ===============
</TABLE>
Total assets by business segment at July 3, 1999 and January 2, 1999 (restated
for the changes in segment reporting discussed above) are as follows:
<TABLE>
<CAPTION>
JULY 3, 1999 JANUARY 2, 1999
------------ ---------------
IDENTIFIABLE ASSETS
<S> <C> <C>
Carlon $ 55,181 $ 51,695
Lamson Home Products 32,766 33,729
PVC Pipe 49,571 54,754
Corporate Office 36,486 28,819
--------- ---------
$ 174,004 $ 168,997
========= =========
</TABLE>
-6-
<PAGE> 7
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE D - COMPREHENSIVE INCOME
The components of comprehensive income (loss) for the second quarter and first
half of 1999 and 1998 are as follows:
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED FIRST HALF ENDED
----------------------------- --------------------------
JULY 3, JULY 4, JULY 3, JULY 4,
1999 1998 1999 1998
------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Net income $ 1,787 $ 2,351 $ 4,511 $ 2,025
Foreign currency translation adjustments 13 - 2 -
------------- --------------- ----------- -------------
Comprehensive income $ 1,800 $ 2,351 $ 4,513 $ 2,025
============= =============== =========== =============
</TABLE>
The components of accumulated other comprehensive loss, at July 3, 1999, January
2, 1999 and July 4, 1998 are as follows:
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JULY 3, 1999 JANUARY 2, 1999 JULY 4, 1998
------------------- --------------------- ---------------------
<S> <C> <C> <C>
Foreign currency translation adjustments $ (349) $ (351) $ (279)
Minimum pension liability adjustments (436) (436) (811)
------------------- --------------------- ---------------------
Accumulated other comprehensive loss $ (785) $ (787) $ (1,090)
=================== ===================== =====================
</TABLE>
-7-
<PAGE> 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 3, 1999 AND COMPARABLE PERIODS
ENDED JULY 4, 1998
CONSOLIDATED STATEMENTS OF INCOME
Net sales in the second quarter of 1999 increased by $3.3 million or 4.7%
compared to the second quarter of 1998. Sales increases were driven primarily by
the Carlon business segment which experienced double-digit volume growth in
engineered cable management products used in telecommunications network
construction. Both Carlon and Lamson Home Products benefited from strong new
home construction and home sales which contributed to improved sales volume of
electrical fittings, outlet boxes and liquidtight tubing.
The PVC Pipe Business experienced a slight decline in sales during the second
quarter due to a softening in the large-diameter sewer pipe market. Electrical
conduit sales were flat in volume and in pricing compared to the prior year.
Where possible, some extrusion capacity was used to produce engineered cable
management products described above which limits commodity pipe production
despite increases in market demand.
Sales for the first half of 1999 increased by $5.7 million or 4.2% from the same
period last year. This result reflects the continuing growth in sales volume
experienced in the current quarter.
Gross profit in the second quarter 1999 was decreased by $1.6 million ($2.1
million for the first half of 1999) due to restructuring costs from the
consolidation of the Company's distribution centers. Excluding these
restructuring costs, gross margins increased by 3.2% to 21.1% in the second
quarter 1999 compared to the same quarter in 1998. The improved results reflect
the shift in product mix to engineered pipe products, which offset a slight
decline in commodity pipe margins as resin costs increased faster than sales
prices during the quarter.
Operating expenses stayed constant with 1998 second quarter levels but declined
as a percentage of sales from 17.3% to 16.3%. Higher commission expense was
offset by lower consulting costs, especially relating to the assessment of Year
2000 exposures, compared to 1998.
Lower debt levels and an improvement in interest rates from an average of 8.0%
to 7.3% resulted in the decrease in interest expense compared to the second
quarter of 1998.
CONSOLIDATED BALANCE SHEETS
Accounts receivable increased approximately $9.1 million compared to year-end
levels due to a seasonally higher concentration of sales in the second quarter
period. Accounts receivable increased by $1 million compared to the second
quarter in 1998 due to the higher quarterly sales. Days sales outstanding
continue to improve from concentrated cash collection efforts. Inventories were
approximately the same as year-end 1998 and the first half of 1998 despite
higher raw material costs. PVC pipe inventories are lower as the business is in
the middle of the high demand construction season. Conversely, the Company has
built inventories for the Carlon and Lamson Home Products business segments to
help insure continued high customer service as it completed the distribution
center consolidation. Accounts payable increased $3.9 million from year-end
primarily due to the increased level of operating activity in 1999 compared to
1998.
-8-
<PAGE> 9
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash used by operations was $1.7 million in 1999 compared to $3.9 million for
the prior year period. The operating cash used was primarily caused by a
seasonal increase in accounts receivable.
Operating cash flow improved by $2.2 million over this same period last year due
to increased profitability.
Cash used in investing activities increased significantly from the prior year
first half as the Company prepared its new South Carolina distribution center
for operations and increased the capacity of its molding operations.
The Company believes that it has sufficient credit available to support the
operating needs of the business and also fund capital projects. The Company
intends to refinance about $40 million of commercial debt prior to year-end,
reducing interest costs and providing additional borrowing capacity for
acquisitions.
YEAR 2000 COMPLIANCE
As is the case with most other companies utilizing information technology
systems in their businesses, the Company is in the process of evaluating and
addressing Year 2000 ("Y2K") Compliance of its information technology systems as
set forth below. These efforts are designed to identify, address and resolve
issues that may be created by information technology systems utilizing two
digits rather than four to define the applicable year. This could result in a
systems' failure or miscalculations causing disruption of operations, including,
among other things, a temporary inability to process transactions, invoices or
engage in other normal business activities.
In 1995, the Company began a comprehensive review of the operating systems which
underlie its ability to conduct daily business activity. Over the next three
years concluding in 1997, the Company spent in excess of $15 million to replace
its core business operations and communications software systems; virtually all
of the computer and telecommunications hardware; and reengineered or adopted
best practices throughout its business process activities. The primary impetus
for this investment was to support the attainment of strategic business
objectives and to address Y2K concerns concurrently. This investment included a
significant commitment to electronic commerce activities with our customers and
manufacturers sales representative organizations. In addition, the Company has
implemented extensive education and skill development programs to provide for
continued knowledge transfer, ongoing support and functionality development.
During 1998, the Company authorized an independent audit of all software and
facilities equipment at each of its business sites to identify potential areas
of exposure, representing a continuing pro-active investment in addressing Y2K
concerns. As a followup to this audit, a Y2K cross-functional team was formed
to monitor and assess official compliance statements from our software and
equipment vendors and to initiate remediation activities at the non-compliant
sites where potentially there could be a material impact on our business. In
addition, the Company has contacted our major customers and key suppliers to
inform them of our compliance status, to determine their state of readiness and
to identify any subsequent actions which may be needed by us.
Current analysis indicates that our core business information system, to the
best of our knowledge, is Y2K compliant. As we address potential areas of
non-compliance, we are evaluating and prioritizing them on the basis of their
materiality to our business. We are utilizing existing staff in the respective
functional areas to
-9-
<PAGE> 10
assist in this evaluation process and take appropriate corrective action, but we
do not expect to incur significant additional costs based on what has been
identified to date.
During the independent audit in 1998, approximately 800 potential Y2K sensitive
items were identified. To date 3% of these issues remain non-compliant and none
of these has been identified as mission critical. We have completed the
assessment phase on our internal computer systems and facilities equipment and
expect to achieve Y2K readiness by the end of the third quarter of 1999. We have
also contacted our top 40 suppliers and have received responses from 38
indicating they are currently Y2K compliant or will be prior to December 31,
1999. We diligently continue to monitor their progress. As we proceed with our
compliance investigation, we will develop contingency plans where necessary.
While the information we have received regarding third-party systems, on which
the Company's systems rely, indicates that they are or will be Y2K compliant, we
cannot guarantee this, nor can we estimate at this time any material effect on
our Company and its operations if this would not be the case. The Company
continues its aggressive assessment of these potential third-party exposures and
will address the issues accordingly.
However, our ability to achieve these dates may be affected by (i) the timely
availability of software patches by existing suppliers of software, (ii) the
Company's ability to employ and retain qualified professionals to handle Year
2000 issues, (iii) the ability of third parties to complete their own Year 2000
compliance remediation efforts on a timely basis, and (iv) the Company's
ability to prepare and implement contingency plans.
OUTLOOK
The Company continues to experience strong demand for its electrical and
telecommunication products heading into the third quarter of 1999. Despite
mixed signals in several general economic indicators, construction spending,
new home sales and retail sales are relatively strong. However, the industry
has been experiencing a shortage of PVC pipe grade resin as supply has not
kept up with market demand, and the Company's major supplier, impacted by
tornado damage, has been unable to meet their customers' supply requirements.
The Company has begun to experience a tightening of resin supply as well and
expects to incur higher resin costs and some spot shortages in the PVC Pipe
Business. The Company anticipates some under utilization of its pipe facilities
due to a shortage of PVC resin during the third quarter compared to the prior
year, but the effect on profitability should be moderate. Pipe pricing will
continue to rise as the Company passes through these raw material costs to its
customers.
As the Company continues to pass through the resin cost increases and mitigates
the impact of spot shortages on the PVC pipe plants, it expects to continue to
realize moderate sales growth and improved operating results for the remainder
of 1999, compared with 1998.
As of the end of June 1999, the Company successfully completed the consolidation
of its distribution operations into the new 350,000 square foot facility near
Columbia, South Carolina. Total cost of this consolidation was $2.9 million
($1.6 million in the second quarter of 1999). Productivity is expected to
continue to improve throughout the second half of 1999.
The Company announced, on April 19, 1999, the termination by the buyer of the
agreement to acquire its PVC Pipe Business. The PVC Pipe Business has been
performing well, and the Company intends to operate the business as it continues
to evaluate the best long-term alternative for this business segment.
-10-
<PAGE> 11
The foregoing outlook contains expectations that involve risks and uncertainties
within the meaning of the private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those expected as a result of a
variety of factors such as (i) the volatility of polyvinyl chloride resin
pricing, (ii) the ability of the Company to pass through raw material cost
increases to its customers, (iii) the availability of PVC resin, (iv)
maintaining the current level of housing starts, consumer confidence and general
construction trends and (v) a reversal in the country's general pattern of
economic improvement affecting the markets for the Company's products.
PART II
ITEM 1 - LEGAL PROCEEDINGS
The Company is a party to various claims and matters of litigation incidental to
the normal course of its business. The Company has recently filed suit to
recover damages related to the terminated agreement to sell its PVC Pipe
Business. It is premature to estimate the timing for a resolution of this suit.
In addition, the Company reached a settlement on litigation involving
environmental matters at a property sold by the Company in 1981 whereby the
Company agreed to incur costs of certain actions. Currently, precise estimates
and timing are still undetermined. The settlement is not expected to have a
material impact on the Company's financial position or results of operations.
Management believes that the final resolution of these matters will not have a
material adverse affect on the Company's financial position.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 23, 1999, the Company held its Annual Meeting of Shareholders. At the
meeting, 12,726,235 Common Shares (94.66% of the Common Shares outstanding) were
voted. An amendment to The Lamson & Sessions Co. Nonemployee Directors Stock
Option Plan was approved by a vote of 11,804,087 shares For, 558,578 shares
Against, and 363,570 shares Abstained. The following directors were elected to
Class III and received the votes indicated next to their names:
<TABLE>
<CAPTION>
WITHHELD
CLASS III FOR AUTHORITY
- ---------------------------- ---------------- ---------------
<S> <C> <C>
A. Malachi Mixon, III 12,531,468 194,767
John C. Morley 12,524,667 201,568
John B. Schulze 12,512,527 213,708
</TABLE>
- 14 -
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
11 Computation of Earnings Per Common 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 July 3, 1999.
-11-
<PAGE> 12
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: August 13, 1999 By /s/ James J. Abel
-------------------------------------
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
-12-
<PAGE> 1
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
EXHIBIT (11) - COMPUTATION OF EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
(Dollars and shares in thousands)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED FIRST HALF ENDED
--------------------------- --------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BASIC EARNINGS-PER-SHARE COMPUTATION
Net Income $ 1,787 $ 2,351 $ 4,511 $ 2,025
============ ============ ============ ============
Average Common Shares Outstanding 13,445 13,425 13,445 13,420
============ ============ ============ ============
Basic Earnings Per Share $ 0.13 $ 0.18 $ 0.34 $ 0.15
============ ============ ============ ============
DILUTED EARNINGS-PER-SHARE COMPUTATION
Net Income $ 1,787 $ 2,351 $ 4,511 $ 2,025
============ ============ ============ ============
Basic Shares Outstanding 13,445 13,425 13,445 13,420
Stock Options calculated under
the Treasury Stock Method 71 74 43 91
------------ ------------ ------------ ------------
Total Shares 13,516 13,499 13,488 13,511
============ ============ ============ ============
Diluted Earnings Per Share $ 0.13 $ 0.17 $ 0.33 $ 0.15
============ ============ ============ ============
</TABLE>
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000057497
<NAME> THE LAMSON & SESSIONS CO.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-START> APR-04-1999
<PERIOD-END> JUL-03-1999
<CASH> 587
<SECURITIES> 0
<RECEIVABLES> 46,549
<ALLOWANCES> 2,352
<INVENTORY> 39,523
<CURRENT-ASSETS> 93,805
<PP&E> 117,396
<DEPRECIATION> 66,749
<TOTAL-ASSETS> 174,004
<CURRENT-LIABILITIES> 53,484
<BONDS> 45,906
0
0
<COMMON> 1,344
<OTHER-SE> 47,300
<TOTAL-LIABILITY-AND-EQUITY> 174,004
<SALES> 74,482
<TOTAL-REVENUES> 74,482
<CGS> 60,352
<TOTAL-COSTS> 60,352
<OTHER-EXPENSES> 12,116
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 927
<INCOME-PRETAX> 1,087
<INCOME-TAX> (700)
<INCOME-CONTINUING> 1,787
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,787
<EPS-BASIC> 0.13
<EPS-DILUTED> 0.13
</TABLE>
