<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 October 2, 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
-----
THE LAMSON & SESSIONS CO.
-------------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
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)
</TABLE>
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 2, 1999 the Registrant had outstanding 13,453,251 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>
THIRD QUARTER NINE MONTHS
ENDED ENDED
------------------------- ----------------------------
1999 1998 1999 1998
------------------------- -------------------------
<S> <C> <C> <C> <C>
NET SALES $ 75,436 $ 73,160 $ 217,116 $ 209,122
Cost of products sold 59,309 56,965 171,407 164,314
--------- --------- --------- ---------
GROSS PROFIT 16,127 16,195 45,709 44,808
Operating expenses 12,162 12,225 36,879 37,134
--------- --------- --------- ---------
OPERATING INCOME 3,965 3,970 8,830 7,674
Interest 898 1,059 2,652 3,438
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 3,067 2,911 6,178 4,236
Income tax benefit (700) (700) (2,100) (1,400)
--------- --------- --------- ---------
NET INCOME $ 3,767 $ 3,611 $ 8,278 $ 5,636
========= ========= ========= =========
BASIC EARNINGS PER COMMON SHARE $ 0.28 $ 0.27 $ 0.62 $ 0.42
========= ========= ========= =========
AVERAGE COMMON SHARES 13,450 13,445 13,446 13,428
========= ========= ========= =========
DILUTED EARNINGS PER COMMON SHARE $ 0.28 $ 0.27 $ 0.61 $ 0.42
========= ========= ========= =========
DILUTED AVERAGE COMMON SHARES 13,492 13,464 13,489 13,483
========= ========= ========= =========
</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>
THIRD QUARTER THIRD QUARTER
ENDED YEAR END ENDED
------------- ------------- ---------------
1999 1998 1998
------------- ------------- ---------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,124 $ 1,937 $ 1,449
Accounts receivable 46,949 35,080 43,940
Inventories
Finished goods and work-in-process 35,868 33,873 33,267
Raw materials and supplies 5,067 5,289 5,394
--------- --------- ---------
40,935 39,162 38,661
Deferred tax assets 6,381 6,057 6,057
Prepaid expenses and other 3,642 1,739 3,136
--------- --------- ---------
TOTAL CURRENT ASSETS 99,031 83,975 93,243
PENSION ASSETS 18,645 15,347 11,700
OTHER ASSETS 13,585 10,610 10,384
PROPERTY, PLANT AND EQUIPMENT 118,030 113,842 113,469
Less allowance for depreciation and amortization 68,637 63,107 61,025
--------- --------- ---------
49,393 50,735 52,444
--------- --------- ---------
TOTAL ASSETS $ 180,654 $ 160,667 $ 167,771
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 29,350 $ 20,077 $ 22,229
Accrued expenses and other liabilities 22,170 19,648 23,342
Taxes 3,575 3,705 3,663
Current maturities of long-term debt 3,863 3,848 3,929
--------- --------- ---------
TOTAL CURRENT LIABILITIES 58,958 47,278 53,163
LONG-TERM DEBT 43,370 40,807 44,936
POST-RETIREMENT BENEFITS AND OTHER LONG-TERM LIABILITIES 25,917 28,451 26,886
SHAREHOLDERS' EQUITY
Common shares 1,344 1,344 1,344
Other capital 73,574 73,574 73,574
Retained earnings (deficit) (21,722) (30,000) (31,041)
Other adjustments (787) (787) (1,091)
--------- --------- ---------
52,409 44,131 42,786
--------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 180,654 $ 160,667 $ 167,771
========= ========= =========
</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>
NINE MONTHS ENDED
----------------------------------
1999 1998
----------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 8,278 $ 5,636
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 7,498 7,410
Deferred income tax benefit (2,100) (1,400)
Net change in working capital accounts:
Accounts receivable (11,869) (10,989)
Inventories (1,773) 6,914
Prepaid expenses and other (1,903) 2,438
Current liabilities 10,011 (3,887)
Net change in other long-term items (3,429) (3,416)
----------------- --------------
Cash Provided by Continuing Operations 4,713 2,706
Cash Used in Discontinued Operations (1,654) -
----------------- --------------
CASH PROVIDED BY OPERATING ACTIVITIES 3,059 2,706
INVESTING ACTIVITIES
Net purchases of property, plant and equipment (6,450) (3,230)
----------------- --------------
CASH USED IN INVESTING ACTIVITIES (6,450) (3,230)
FINANCING ACTIVITIES
Net change in secured credit agreement 3,371 993
Net changes in long-term borrowing and capital lease obligations (793) (599)
Exercise of stock options 0 169
----------------- --------------
CASH PROVIDED BY FINANCING ACTIVITIES 2,578 563
(DECREASE) INCREASE IN CASH (813) 39
Cash at beginning of year 1,937 1,410
----------------- --------------
CASH AT END OF THE PERIOD $ 1,124 $ 1,449
================= ==============
</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 TAX
The difference in the third quarter and first nine months 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
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>
THIRD QUARTER ENDED NINE MONTHS ENDED
----------------------------------- -----------------------------------
1999 1998 1999 1998
----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
NET SALES
Carlon $ 32,136 $ 29,444 $ 91,355 $ 84,955
Lamson Home Products 13,318 13,541 39,102 38,110
PVC Pipe 29,982 30,175 86,659 86,057
--------- --------- --------- ---------
$ 75,436 $ 73,160 $ 217,116 $ 209,122
========= ========= ========= =========
OPERATING INCOME (LOSS)
Carlon $ 3,935 $ 3,868 $ 11,854 $ 11,651
Lamson Home Products 855 519 1,753 (708)
PVC Pipe 1,047 1,680 2,556 2,786
Corporate Office (includes restructuring
charges for consolidation of
distribution operations) (1,872) (2,097) (7,333) (6,055)
--------- --------- --------- ---------
$ 3,965 $ 3,970 $ 8,830 $ 7,674
========= ========= ========= =========
DEPRECIATION AND AMORTIZATION
Carlon $ 981 $ 816 $ 2,745 $ 2,590
Lamson Home Products 728 627 2,065 1,984
PVC Pipe 863 929 2,688 2,836
--------- --------- --------- ---------
$ 2,572 $ 2,372 $ 7,498 $ 7,410
========= ========= ========= =========
</TABLE>
Total assets by business segment at October 2, 1999, January 2, 1999 and
October 3, 1998.
<TABLE>
<CAPTION>
OCTOBER 2, JANUARY 2, OCTOBER 3,
1999 1999 1998
-------- -------- --------
<S> <C> <C> <C>
IDENTIFIABLE ASSETS
Carlon $ 56,536 $ 50,704 $ 50,748
Lamson Home Products 32,798 31,542 34,465
PVC Pipe 50,983 48,843 53,284
Corporate Office 40,337 29,578 29,274
-------- -------- --------
$180,654 $160,667 $167,771
======== ======== ========
</TABLE>
-6-
<PAGE> 7
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE D - COMPREHENSIVE INCOME
The components of comprehensive income for the third quarter and first nine
months of 1999 and 1998 are as follows:
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THIRD QUARTER ENDED NINE MONTHS ENDED
----------------------------- ----------------------------
OCT. 2, OCT. 3, OCT. 2, OCT. 3,
1999 1998 1999 1998
------------- --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Net income $ 3,767 $ 3,611 $ 8,278 $ 5,636
Foreign currency translation adjustments (2)
------------- --------------- ------------ ---------------
Comprehensive income $ 3,765 $ 3,611 $ 8,278 $ 5,636
============= =============== ============ ===============
</TABLE>
The components of accumulated other comprehensive loss at October 2, 1999,
January 2, 1999 and October 3, 1998 are as follows:
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
OCTOBER 2, 1999 JANUARY 2, 1999 OCTOBER 3, 1998
----------------------- ------------------------ ------------------------
<S> <C> <C> <C>
Foreign currency translation adjustments $ (351) $ (351) $ (279)
Minimum pension liability adjustments (436) (436) (811)
----------------------- ------------------------ ------------------------
Accumulated other comprehensive loss $ (787) $ (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 NINE MONTHS ENDED OCTOBER 2, 1999
AND COMPARABLE PERIODS ENDED OCTOBER 3, 1998
CONSOLIDATED STATEMENTS OF INCOME
Net sales in the third quarter of 1999 increased by 3.1%, or $2.3 million,
compared with the third quarter of 1998. The Carlon segment experienced a 9.1%
growth rate fueled by double-digit growth in the inside premise and outside
plant telecommunication raceway systems products. Sales decreased 1.6% in Lamson
Home Products (LHP) for the quarter compared with the prior year period. LHP was
negatively impacted by the Hechinger bankruptcy, which reduced sales to this
significant customer by $1 million, as well as continued pruning of unprofitable
wiring device products. Excluding these items, sales in this segment grew by 8%.
The PVC Pipe Business was negatively impacted during the third quarter by tight
resin supply. Average conduit prices increased, recouping a portion of the 40%
increase in polyvinyl chloride (PVC) resin costs this year. However, volume
decreased due to unexpected resin shortages caused by the Oklahoma City tornado,
which created a force majeure condition at Lamson's primary resin supplier. The
tightness in supply in the overall marketplace is expected to continue
throughout the remainder of 1999 and could extend through 2001 when additional
capacity may ease this situation. However, the Company is negotiating long term
supply contracts which should preclude a recurrence of this type of material
shortage in the future. Lost sales of electrical conduit were estimated to be
approximately $4 million for the quarter. The large diameter sewer pipe market
remained down during the third quarter, but is experiencing an increase in bid
activity.
Year-to-date sales increased by $8 million, or 3.8%, compared with the prior
year period, with Carlon's growth of 7.5% and Lamson Home Products and the PVC
Pipe Business growth of 1%. Volume of electrical conduit sales was down 6%
(primarily in the third quarter), while pricing on average was up about 5%.
Carlon and Lamson Home Products growth is consistent with the third quarter
explanations stated above.
Gross margins were reduced from 22.1% to 21.4% during the third quarter compared
with the prior year period. The current quarter margins were impacted by
unplanned curtailment of production caused by the above-mentioned resin
shortage. Without this volume variance, margins could have exceeded last year by
almost 1 percentage point. The Company continues to experience increased resin
costs which are, for the most part, passed on to customers. These cost increases
were partially offset by reduced freight expenses that resulted from the
distribution center consolidation. Actual distribution costs have declined
slightly from the prior year. Year-to-date gross profit was negatively impacted
by approximately $2.1 million in restructuring costs from consolidation of the
distribution centers during the first half. Excluding this charge, gross margins
improved from 21.4% to just over 22%.
Operating expenses remained consistent with the 1998 third quarter level but
declined as a percentage of sales from 16.7% to 16.1%. Year-to-date the Company
has been able to maintain effective spending control and operating expenses have
declined in 1999 on greater sales volume.
Lower debt levels reduced interest expense this quarter and year-to-date
compared with the prior year.
-8-
<PAGE> 9
CONSOLIDATED BALANCE SHEETS
Accounts receivable are $11.9 million and $3 million higher than year-end and
last year's third quarter, respectively. This increase is due to the higher
sales levels, especially in the latter half of the quarter, as compared with the
prior periods. Days sales outstanding has remained at 54 days for the third
quarter 1999. Inventories for the current quarter increased $1.8 million from
year-end and $2.3 million from the prior year third quarter reflective of cost
increases of over 40% for PVC resin rather than an increase in inventory volume.
Higher PVC pipe turns and reduced Lamson Home Products wiring device and chime
inventory kept inventory increases low. Accounts payable increased $9.3 million
and $7.1 million from year-end and last year's third quarter, reflecting resin
cost increases and higher operating levels late in the quarter.
CONSOLIDATED STATEMENTS OF CASH FLOW
Cash provided by continuing operations was $4.7 million in 1999 compared with
$2.7 million for the prior year period. The Company paid $1.7 million during the
quarter relating to the settlement of litigation involving environmental matters
at a property sold by the Company in 1981 which had been accounted for as a
discontinued operation. Net cash provided by operating activities was $3.1
million for 1999. The improvement reflects an increase in profitability net of
$2 million in insurance proceeds received in 1998.
The Company believes that it has sufficient credit available to support the
operating needs of the business and also fund capital projects. Alternative
financing opportunities continue to be evaluated consistent with the Company's
growth requirements.
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 following
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.
-9-
<PAGE> 10
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 proactive investment in addressing Y2K
concerns. As a result of this audit, approximately 800 Y2K sensitive issues were
identified. 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
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.
We have also contacted our top 40 suppliers and have received responses from 39
indicating they are currently Y2K compliant or will be prior to December 31,
1999. We continue diligently to monitor their progress. Based on our analysis up
to this point, we have determined that contingency plans are not required.
To the best of our knowledge, we are fully compliant with all internal mission
critical systems and equipment. 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.
OUTLOOK
The Company continued to experience strong demand for its electrical and
telecommunications products heading into the fourth quarter of 1999. General
economic indicators such as construction spending, new home sales and retail
sales are expected to be steady heading into 2000 but new housing starts are
expected to decline. The Company is experiencing a softness in order activity
for its large diameter sewer products from municipalities. This condition is
anticipated to continue through the first quarter of 2000 as these customers
evaluate their future construction budgets. PVC resin costs have continued to
escalate during the third quarter. These cost increases are expected to moderate
heading into year-end as supply catches up with reduced demand during the winter
months.
Productivity at the Company's new distribution center continues to improve but
not at the pace anticipated. Several efforts are underway in the fourth quarter
to address the issues so that original savings targets can be met in 2000.
Freight costs have been favorably impacted by the consolidation and better
carrier management.
Based on all the above factors and continued operating efficiencies at the
manufacturing plants, the Company anticipates robust top line sales growth in
the fourth quarter of 1999 and solid earnings improvements compared with the
prior year.
The Company should experience favorable operating cash flow and lower debt
levels in the fourth quarter due to improving working capital management and
seasonal factors. The pace of capital spending is expected to remain steady in
the last quarter of 1999 and into 2000 to support requirements primarily for
priority product capacity expansion and new products.
-10-
<PAGE> 11
The above statements contain expectations that are forward-looking 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) changes in
the pattern of construction spending in both the new construction, and repair
and rehabilitation markets, (iii) changes in the number and distribution of
housing starts, (iv) fluctuations in the interest rate affecting housing starts,
(v) the ability of third parties to complete their own Year 2000 compliance
remediation efforts on a timely basis, (vi) the ability of the Company to pass
through raw material cost increases to its customers, and (vii) a reversal in
the country's general pattern of economic stability affecting the markets for
the Company's products.
PART II
ITEM 1 - LEGAL PROCEEDINGS
On September 23, 1999, the Company announced that a United States District Court
jury in the Northern District of Illinois found that the Company willfully
infringed on a patent held by Intermatic Incorporated of Spring Grove, Illinois,
relating to the design of an in-use weatherproof electrical outlet cover, and
awarded Intermatic $12.5 million in damages plus pre-judgement interest of
approximately $1.5 million. The court declined to increase the damages with
respect to the willfulness finding. The Company intends to pursue a vigorous
appeal and believes it has meritorious positions that will substantially reduce
or eliminate the jury award. If, however, the appeal process is not successful,
the final resolution of the matter could have a material adverse effect on the
Company's financial position and results of operations. It is the Company's
understanding that the appeal process may require a 1 to 2 year period.
The Company is also a party to various claims and matters of litigation
incidental to the normal course of business. Management believes that the final
resolution of these matters will not have a material adverse effect on the
Company's financial position.
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 October 2, 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: November 16, 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>
THIRD QUARTER ENDED NINE MONTHS ENDED
--------------------------------- -------------------------------
1999 1998 1999 1998
---------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
BASIC EARNINGS-PER-SHARE COMPUTATION
Net Income $ 3,767 $ 3,611 $ 8,278 $ 5,636
================ ================ ============== ===============
Average Common Shares Outstanding 13,450 13,445 13,446 13,428
================ ================ ============== ===============
Basic Earnings Per Share $ 0.28 $ 0.27 $ 0.62 $ 0.42
================ ================ ============== ===============
DILUTED EARNINGS-PER-SHARE COMPUTATION
Net Income $ 3,767 $ 3,611 $ 8,278 $ 5,636
================ ================ ============== ===============
Basic Shares Outstanding 13,450 13,445 13,446 13,428
Stock Options calculated under the Treasury Stock Method 42 19 43 55
---------------- ---------------- -------------- ---------------
Total Shares 13,492 13,464 13,489 13,483
================ ================ ============== ===============
Diluted Earnings Per Share $ 0.28 $ 0.27 $ 0.61 $ 0.42
================ ================ ============== ===============
</TABLE>
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000057497
<NAME> THE LAMSON & SESSIONS CO.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-START> JUL-04-1999
<PERIOD-END> OCT-02-1999
<CASH> 1,124
<SECURITIES> 0
<RECEIVABLES> 49,563
<ALLOWANCES> 2,614
<INVENTORY> 40,935
<CURRENT-ASSETS> 99,031
<PP&E> 118,030
<DEPRECIATION> 68,637
<TOTAL-ASSETS> 180,654
<CURRENT-LIABILITIES> 58,958
<BONDS> 43,370
0
0
<COMMON> 1,344
<OTHER-SE> 51,065
<TOTAL-LIABILITY-AND-EQUITY> 180,654
<SALES> 75,436
<TOTAL-REVENUES> 75,436
<CGS> 59,309
<TOTAL-COSTS> 59,309
<OTHER-EXPENSES> 12,162
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 898
<INCOME-PRETAX> 3,067
<INCOME-TAX> (700)
<INCOME-CONTINUING> 3,767
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,767
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
</TABLE>
