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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999,
OR
TRANSITIONAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ______ to _____.
Commission file number 1-313
THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
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(Full title of the Plan)
THE LAMSON & SESSIONS CO. 25701 Science Park Drive, Cleveland, Ohio 44122
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(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
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THE LAMSON & SESSIONS CO.
DEFERRED SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
MOORE STEPHENS APPLE
CERTIFIED PUBLIC ACCOUNTANTS
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 2
Financial Statements
Statements of Net Assets Available for Benefits
- Modified Cash Basis 4
Statements of Changes in Net Assets Available for Benefits
- Modified Cash Basis 5
Notes to the Financial Statements 6
Schedule of Assets Held for Investment Purposes at Year End 14
Exhibit 23 - Consent of Independent Public Accountants 16
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors
The Lamson & Sessions Co.
We have audited the accompanying statements of net assets available for benefits
- modified cash basis of The Lamson & Sessions Co. Deferred Savings Plan as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits - modified cash basis for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedule are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of The Lamson &
Sessions Co. Deferred Savings Plan as of December 31, 1999 and 1998, and changes
in its net assets available for benefits for the year then ended in conformity
with the modified cash basis of accounting.
As described in Note B, these financial statements were prepared on the modified
cash basis of accounting, which is a comprehensive basis of accounting other
than generally accepted accounting principles.
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Our audits of the Plan's financial statements as of and for the years ended
December 31, 1999 and 1998, were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The supplemental schedule of
assets held for investment purposes as of and for the year ended December 31,
1999 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements but is supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. This supplemental
schedule is the responsibility of the Plan's management. The supplemental
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements for the year ended December 31, 1999, and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Westlake, Ohio
May 2, 2000
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LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS -
MODIFIED CASH BASIS
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<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
------------------- -------------------
ASSETS
<S> <C> <C>
INVESTMENTS, AT FAIR VALUE
Mutual Funds $26,430,693 $23,381,816
Cash Value of Life Insurance 106,415 97,128
Lamson & Sessions Company Stock 456,247 176,353
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26,993,355 23,655,297
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RECEIVABLES:
Employer's contribution 34,765 --
Participants' contributions 86,564 --
Participant loans 592,307 385,937
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713,636 385,937
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Total Assets 27,706,991 24,041,234
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LIABILITIES
Distributions payable -- 4,773
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NET ASSETS AVAILABLE FOR BENEFITS $27,706,991 $24,036,461
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</TABLE>
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The accompanying notes are an integral part of these financial statements.
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LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS -
MODIFIED CASH BASIS
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<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, 1999 1998
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ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
<S> <C> <C>
Investment income
Net appreciation in fair value of investments $ 3,160,444 $ 2,152,999
Interest and Dividends 263,501 89,410
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3,423,945 2,242,409
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Contributions
Employee salary deferrals 2,089,489 2,053,157
Employer matching 773,770 740,865
Rollover contributions 5,288 10,645
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2,868,547 2,804,667
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TOTAL ADDITIONS 6,292,492 5,047,076
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DEDUCTIONS FROM NET ASSETS ATTRIBUTABLE TO:
Benefits paid to participants 2,612,375 2,778,168
Insurance Premiums 9,587 10,386
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TOTAL DEDUCTIONS 2,621,962 2,788,554
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NET INCREASE IN NET ASSETS 3,670,530 2,258,522
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR 24,036,461 21,777,939
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END OF YEAR $27,706,991 $24,036,461
=========== ===========
</TABLE>
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The accompanying notes are an integral part of these financial statements.
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE A - DESCRIPTION OF PLAN
The following description of the The Lamson & Sessions Co. (the
Company) Deferred Savings Plan (the Plan) provides only general
information. Participants should refer to the plan agreement for a more
complete description of the plan's provisions.
1. GENERAL
The Plan is a defined contribution plan covering substantially all
employees of the Company. Employees are eligible to participate in the
plan on the first day of the calendar quarter after which they have
attained the age of 21 and completed one-half (1/2) year of service.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). The Company is the Plan's administrator.
The Plan's custodian is the Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation (Pershing). Pershing was appointed
custodian on April 9, 1998. The previous custodian was the Nationwide
Life Insurance Company.
2. CONTRIBUTIONS
Each year, participants contribute from 1% to 15% of their eligible
compensation (pre-tax contributions), as defined in the Plan. The
Company contributes 50% of the first 6% of base compensation that a
participant contributes to the Plan. Additional amounts may be
contributed at the discretion of the Company.
3. PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's elective
contributions, allocations of the Company's contributions and earnings
on those contributions. Forfeitures due to the distribution of a
participant's account before the participant has become fully vested
reduce subsequent company contributions. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE A - DESCRIPTION OF PLAN - CONTINUED
Participants may direct their individual account balances as of December
31, 1999 among the following investment options:
Bond Fund of America - This fund seeks a high level of current
income consistent with preservation of capital by investing
primarily in high quality corporate bonds and U.S. government
securities.
Templeton Foreign Smaller Companies Fund - A foreign stock
fund that seeks long-term capital growth.
EuroPacific Growth Fund - A foreign stock fund that seeks
long-term capital appreciation by investing in companies
located outside the United States.
Stable Value Fund - This fund seeks to produce consistent,
positive returns for investors while preserving principal and
maintaining liquidity.
Templeton Developing Markets Fund - An emerging market stock
fund that seeks long-term capital appreciation by investing in
stocks of issuers in countries with developing markets.
Fundamental Investors Fund - A large company value fund that
invests primarily in large company stocks or investments that
are convertible to stock. It seeks both long term growth of
capital and current income.
Franklin Balance Sheet Investment Fund - A small company value
fund that seeks capital appreciation primarily through
investment in securities that the fund's manager believes are
undervalued in the marketplace.
Franklin Real Estate Securities - A specialty real estate fund
that seeks to maximize total return by investing in real
estate securities.
MFS Massachusetts Investors Trust - A large company growth
fund that seeks current income and long-term growth of
capital.
Lord Abbett Developing Growth A Fund - A small company growth
fund that seeks long-term capital growth by investing in
stocks of companies with dramatic growth potential.
Lamson & Sessions Stock Fund - Funds are invested in common
stock of the The Lamson & Sessions Co. The Fund's objective is
to provide investment returns linked to Lamson & Sessions'
long-term capital appreciation and offer employees a
convenient way to invest in Lamson & Sessions' stock.
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE A - DESCRIPTION OF PLAN - CONTINUED
In addition, subject to the terms of the Plan, participants with
sufficient vested balances may borrow from their fund accounts.
Participant loans are an additional investment option under the terms
of the Plan.
Prior to January 1, 1998, the Plan also offered participants the option
to invest in life insurance. Participants with portions of their
accounts invested in life insurance at January 1, 1998 have the option
of keeping the insurance in place, but additional investments in
insurance are no longer permitted.
4. VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching and discretionary
contribution portions of their accounts plus actual earnings thereon is
based on Years of Service as defined by plan provisions. A participant
is fully vested after five years.
5. PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000
and a maximum equal to the lesser of $50,000 or 50 percent of their
vested balance in all their accounts reduced by their highest
outstanding loan balance within the twelve (12) preceding months. Loan
transactions are treated as transfers to (from) the investment fund
from (to) the Participant Notes fund. A loan must be repaid through
payroll withholding, the repayments must be periodic, and the term must
not exceed five (5) years. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with
local prevailing rates as determined by the trustees on the date the
loan is made. Interest rates currently charged on outstanding balances
range from 7.25 percent to 11.58 percent.
6. PAYMENT OF BENEFITS
Benefits upon retirement, death or other termination of employment may
be paid either in a lump sum or in periodic payments. Withdrawals from
a participant's account may be made prior to termination, subject to
certain restrictions.
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE A - DESCRIPTION OF PLAN - CONTINUED
7. PLAN EXPENSES
The Lamson & Sessions Co. absorbs all costs to administer the Plan.
8. FORFEITURES
Forfeited nonvested accounts are used to reduce employer contributions.
In 1999 and 1998, the amount of forfeited nonvested accounts which were
applied to reduce such contributions were $42,485 and $52,069,
respectively.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
1. BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the modified
cash basis of accounting. Under this basis, contributions which are
withheld by the plan sponsor but not allocated to participant accounts
at year end are recorded as a receivable.
2. INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent
the net asset value of shares held by the Plan at year-end. The Company
stock is valued at its quoted market price. Participant loans
receivable are valued at their outstanding principal balance. Life
insurance contracts are valued at cash value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest and dividend income is recorded when received.
3. PAYMENT OF BENEFITS
Benefits are recorded when paid.
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE B - SUMMARY OF ACCOUNTING POLICIES - CONTINUED
4. USE OF ESTIMATES
The preparation of financial statements, in conformity with the
modified cash basis of accounting, requires the plan administrator to
make estimates and assumptions that affect certain reported amounts and
disclosures. Actual results could differ from those estimates.
NOTE C - INVESTMENTS
The following table presents investments at December 31, 1999 and 1998.
Investments that represent 5% or more of the Plan's net assets are
separately identified.
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Bond Fund of America $ 2,110,279 $ 2,114,508
EuroPacific Growth Fund 2,037,655 1,210,783
Stable Value Fund 4,427,904 3,844,575
Fundamental Investors 6,234,530 4,936,964
Franklin Balance Sheet Investment Fund 1,757,154 2,011,256
Franklin Real Estate Securities 1,062,686 1,241,302
MFS Massachusetts Investors Trust 5,360,902 5,505,575
Lord Abbett Developing Growth A 2,198,142 1,574,369
Other 2,396,410 1,601,902
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$ 27,585,662 $ 24,041,234
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</TABLE>
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE C - INVESTMENTS - CONTINUED
During 1999 and 1998, the Plan's investments (including
investments bought, sold and held during the year) appreciated in
value by $3,160,444 and $2,152,999, respectively, as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Mutual funds at fair value as determined
by quoted market prices. $ 3,181,162 $ 2,197,941
Life insurance contracts at cash value. 9,287 14,663
The Lamson & Sessions Co. stock at
fair value as determined by quoted market
prices. (30,005) (59,605)
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$ 3,160,444 $ 2,152,999
============== ==============
</TABLE>
NOTE D - TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated February 14, 1996, that the plan is designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is designed and
is currently being operated in compliance with the applicable
requirements of the IRC.
NOTE E - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of plan termination, participants will immediately become 100% vested
in their accounts.
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
NOTE F - RELATED PARTY TRANSACTIONS
The Lamson & Sessions Stock Fund invests in Lamson & Sessions Co.
common stock, which is traded on the New York Stock Exchange under the
symbol LMS. The fund maintains short-term cash sufficient to meet its
estimated daily cash needs. The fund purchases shares of Lamson &
Sessions Co. common stock on the open market at open market prices.
Transactions in the fund qualify as party-in-interest transactions.
NOTE G - SUBSEQUENT EVENTS
Effective January 1, 2000 for each salaried participant for whom a
salary reduction contribution has been made, the employer shall also
contribute an additional matching contribution equal to 25% of such
salary reduction contribution, up to the first 6% of the participant's
contribution. This additional contribution is required to be
contributed or initially invested in The Lamson & Sessions Stock Fund.
Immediately following such contribution or initial investment in stock,
the participant shall have the ongoing option to redirect the
investment of such matching contributions among the investment options
available under the Plan.
As a result of the annual review of plan investments by the Trustees on
April 12, 2000 the MFS Massachusetts Investors Trust is being replaced
as an investment option with the Fidelity Advisory Equity Growth Trust.
In addition, The Franklin Templeton Foreign Smaller Companies Fund is
being replaced as an investment option with the Putnam International
Voyager A Fund.
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SUPPLEMENTAL INFORMATION
================================================================================
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THE LAMSON & SESSIONS CO. DEFERRED SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
YEAR END EIN: 34-0349210 PLAN: 028
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<TABLE>
<CAPTION>
DECEMBER 31, 1999
COLUMN A COLUMN B COLUMN C COLUMN E
-------- -------- -------- --------
IDENTITY OF ISSUE,
BORROWER,
LESSOR OR DESCRIPTION OF CURRENT
SIMILAR PARTY INVESTMENT(1) VALUE
------------------ --------------- -------
<S> <C> <C> <C>
American Funds Bond Fund of America $ 2,110,279
EuroPacific Growth Fund 2,037,655
Fundamental Investors 6,234,530
Franklin Templeton Foreign Smaller Companies 584,179
Developing Markets Fund 636,853
Balance Sheet Investment Fund 1,757,154
Real Estate Securities 1,062,686
MFS Massachusetts Investors Trust 5,360,902
Lord Abbett Developing Growth A 2,198,142
Invesco Stable Value Fund 4,427,904
New England Cash value of Insurance 106,415
* Pershing Money Market Account 20,409
* Lamson & Sessions Stock Fund 456,247
Participant Loans Participant loans
with various rates of
interest from 7.25% to
11.58% and various
maturity dates through
2015
592,307
-------------------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END $ 27,585,662
===================
</TABLE>
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*Party-In-Interest
(1) Including maturity date, rate of interest, collateral, par or maturity
value, where applicable.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other person who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE LAMSON & SESSIONS CO.
DEFERRED SAVINGS PLAN
Date: June 27, 2000 By: /s/ James J. Abel
Trustee
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