<PAGE> 1
As filed with the Securities and Exchange Commission on June 26, 1997.
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)B OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ____________
Commission file number 013147
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
B. Name of the Issuer of the securities held pursuant to the plan and
the address of its principal executive office:
LESCO, Inc.
20005 Lake Road
Rocky River, Ohio 44116
REQUIRED INFORMATION
See attached financial statements for the Plan for the year ended
December 31, 1996.
Date: June 26, 1997
<PAGE> 2
Annual Report
December 31, 1996
LESCO, INC. STOCK INVESTMENT AND
SALARY SAVINGS PLAN AND TRUST
PLAN SPONSOR AND ADMINISTRATOR
LESCO, Inc.
20005 Lake Road
Rocky River, Ohio 44116
(216) 333-9250
<PAGE> 3
Report of Independent Auditors
Plan Administrator
LESCO, Inc. Stock Investment and
Salary Savings Plan and Trust
We have audited the accompanying statements of assets available for plan
benefits of LESCO, Inc. Stock Investment and Salary Savings Plan and Trust as of
December 31, 1996 and 1995, and the related statement of changes in assets
available for plan benefits for the year ended December 31, 1996. 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 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 assets available for plan benefits of the Plan at
December 31, 1996 and 1995, and the changes in its assets available for plan
benefits for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
The information included in the "Schedule of Assets Held for Investment
Purposes" does not contain the historical cost of certain investments which is
not available. Disclosure of this information is required by the Department of
Labor's Rules and Regulations for reporting and disclosure under the Employee
Retirement Income Security Act of 1974.
1
<PAGE> 4
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes as of December 31, 1996 and reportable transactions
for the year then ended are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The Fund Information in the statements of assets
available for benefits and the statement of changes in assets available for
benefits is presented for purposes of additional analysis rather than to present
the assets available for benefits and changes in assets available for benefits
of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audit of the 1996 financial
statements and, in our opinion, except for the omission of the information
discussed in the preceding paragraph, are presented in compliance with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 and is fairly stated in all
material respects in relation to the 1996 financial statements taken as a whole.
May 22, 1997
2
<PAGE> 5
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Statements of Assets Available for Plan Benefits
December 31, 1996
<TABLE>
<CAPTION>
Fidelity Invesco PNC EBT LESCO, Inc.
Advisor PNC Index Total Investment Company
Overseas Fund Equity Fund Return Fund Contract Fund Stock Fund Loan Fund Total
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value:
LESCO, Inc. common stock (899,353 units) $10,446,041 $10,446,041
Fidelity Advisor Overseas Fund $578,838 578,838
PNC Index Equity Fund $5,055,361 5,055,361
Invesco Total Return Fund $2,069,218 2,069,218
PNC EBT Investment Contract Fund $6,082,835 6,082,835
Participant contributions receivable 6,907 37,457 15,915 38,949 25,440 124,668
Employer contributions receivable 26,731 135,143 59,200 131,788 99,622 452,484
Participant loans receivable $722,480 722,480
--------------------------------------------------------------------------------------
ASSETS AVAILABLE FOR PLAN BENEFITS $612,476 $5,227,961 $2,144,333 $6,253,572 $10,571,103 $722,480 $25,531,925
=======================================================================================
</TABLE>
3
<PAGE> 6
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Statements of Assets Available for Plan Benefits
December 31, 1995
<TABLE>
<CAPTION>
Fidelity Invesco Mass Mutual LESCO, Inc.
Advisor PNC Index Total Group Annuity Company
Overseas Fund Equity Fund Return Fund Contract Stock Fund Loan Fund Total
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS Investments at fair value:
LESCO, Inc. common stock (645,418 units) $9,681,276 $9,681,276
Fidelity Advisor Overseas Fund $86,956 86,956
PNC Index Equity Fund $3,029,313 3,029,313
Invesco Total Return Fund $1,058,329 1,058,329
Mass Mutual Group Annuity Contract $5,695,975 5,695,975
Participant contributions receivable 2,181 37,790 14,993 56,878 40,903 152,745
Employer contributions receivable 6,254 90,529 36,881 131,165 93,524 358,353
Participant loans receivable $549,732 549,732
----------------------------------------------------------------------------------------
ASSETS AVAILABLE FOR PLAN BENEFITS $95,391 $3,157,632 $1,110,203 $5,884,018 $9,815,703 $549,732 $20,612,679
========================================================================================
</TABLE>
4
<PAGE> 7
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Statement of Changes in Assets Available for Plan Benefits
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Fidelity Invesco Mass Mutual PNC EBT
Advisor PNC Index Total Group Annuity Investment
Overseas Fund Equity Fund Return Fund Contract Contract Fund
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS (DEDUCTIONS)
Employer contribution $ 26,731 $ 135,143 $ 59,200 $ 131,788
Participant contributions 180,948 805,855 356,820 $ 342,614 459,906
Interfund transfers 268,865 448,052 454,777 (6,408,473) 5,649,139
Investment income 26,439 309,090 60,169 7,171 17,576
Distributions to participants (315) (166,528) (42,368) (217,067) (250,480)
Administrative costs/loan fees (22,372)
Net realized and unrealized appreciation
in fair value of investments 14,417 538,717 145,532 391,737 268,015
----------------------------------------------------------------------------
Net additions (deductions) 517,085 2,070,329 1,034,130 (5,884,018) 6,253,572
Assets available for plan benefits beginning of year 95,391 3,157,632 1,110,203 5,884,018
----------------------------------------------------------------------------
ASSETS AVAILABLE FOR PLAN BENEFITS END OF YEAR $612,476 $5,227,961 $2,144,333 $ 0 $6,253,572
============================================================================
<CAPTION>
LESCO, Inc.
Company
Stock Fund Loan Fund Total
-----------------------------------------
<S> <C> <C> <C>
ADDITIONS (DEDUCTIONS)
Employer contribution $ 99,622 $ 452,484
Participant contributions 489,104 2,635,247
Interfund transfers (621,487) $209,127
Investment income 10,405 430,850
Distributions to participants (261,863) (36,379) (975,000)
Administrative costs/loan fees (22,372)
Net realized and unrealized appreciation
in fair value of investments 1,039,619 2,398,037
-----------------------------------------
Net additions (deductions) 755,400 172,748 4,919,246
Assets available for plan benefits beginning of year 9,815,703 549,732 20,612,679
-----------------------------------------
ASSETS AVAILABLE FOR PLAN BENEFITS END OF YEAR $10,571,103 $722,480 $25,531,925
=========================================
</TABLE>
5
<PAGE> 8
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Notes to Financial Statements
December 31, 1996 and 1995
A. SUMMARY OF ACCOUNTING POLICIES
Investments are stated at market value on the last business day of the year.
Securities which are traded on a national securities exchange are valued at the
last reported sales price on the last business day of the year; securities
traded on the over-the-counter market and listed securities for which no sale
was reported on that date are valued at the average of the last reported bid and
ask prices.
Administrative expenses of the Plan may, at the discretion of the Company, be
paid by the plan sponsor, LESCO, Inc. Any expenses not paid by the Company will
be paid out of Plan assets.
The accounting records of the Plan are maintained on the accrual basis.
The preparation of financial statements in conformity with generally accepted
accounting principles requires estimates and assumptions by management and
actual results may differ from these estimates.
B. DESCRIPTION OF PLAN
The following brief description of the LESCO, Inc. Stock Investment and Salary
Savings Plan and Trust (Plan) provides only general information. Participants
should refer to the plan agreement for a more complete description of the Plan's
provisions.
The Plan covers all eligible employees, as defined, of the Company. A
participant may, pursuant to a Salary Deferral Agreement, annually elect to have
the Company contribute a percentage of their compensation to the Plan in
accordance with the Internal Revenue Code (IRC). Subject to provisions of the
Plan, the Company will contribute a specified amount for each participant for
each plan year. A participant for whose account a contribution referred to above
is made shall have the right to direct the Trustee to invest such contribution,
in one or more permitted investment funds, as defined by the Plan as they may
choose.
6
<PAGE> 9
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Notes to Financial Statements--Continued
B. DESCRIPTION OF PLAN--CONTINUED
In addition, the Company at its discretion may for any Plan year, contribute an
additional amount (discretionary contribution) either in the form of cash or
employer stock or both which would be allocated to each active participant's
account pro-rata based on the participant's annual compensation received.
Plan participants are fully vested in all contributions to their accounts, with
the exception of the discretionary contributions, which vest at the rate of 10%
per year for the first four years and 20% per year thereafter, until fully
vested.
Under the Plan, the Company has the right to discontinue such contributions and
terminate the Plan at any time. In the event of termination, all participants'
accounts become fully vested, and are to be distributed to the participants
according to the directions of the Plan Advisory Committee administering the
Plan.
On August 1, 1995, LESCO changed trustees from Massachusetts Mutual to PNC Bank.
The five funds currently available for investment are the Fidelity Advisor
Overseas Fund, Invesco Total Return Fund, PNC Index Equity Fund, PNC EBT
Investment Contract Fund, and LESCO, Inc. Company Stock Fund.
Investments in the Fidelity Advisor Overseas Fund, Invesco Total Return Fund,
PNC Index Equity Fund, PNC EBT Investment Contract Fund and LESCO, Inc. Company
Stock Fund assign units to their investments. At December 31, 1996 the Plan
owned 37,685 units at $15.36 per unit of the Fidelity Advisor Overseas Fund,
85,153 units at $24.30 per unit of the Invesco Total Return Fund, 352,782 units
at $14.33 per unit of the PNC Index Equity Fund, 3,456,156 units at $1.76 per
unit of the PNC EBT Investment Contract Fund, and 899,353 units at $11.61 per
unit of LESCO, Inc. Company Stock Fund.
C. BENEFITS
Individual accounts are maintained for all participants, the sum of which equals
the fair value of Plan assets less unallocated forfeitures (none at December 31,
1996 or 1995). The liability of the Plan for benefits to participants is limited
to the fair value of Plan assets. A participant is entitled to receive the full
value of his or her account at age 65, death or disability prior to retirement,
or upon termination of employment. Upon retirement or termination, the
participant may elect to receive his or her distribution in a lump sum or a
series of installments, as determined by the Plan Advisory Committee and
commencing in accordance with the terms of the Plan.
7
<PAGE> 10
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Notes to Financial Statements--Continued
D. INVESTMENTS
Each of the Plan's investments which represented 5% or more of the fair value of
assets available for benefits are as follows:
<TABLE>
<CAPTION>
Net
Appreciation
(Depreciation)
in Fair Value Fair Value
-------------------------------
<S> <C> <C>
December 31, 1996:
LESCO, Inc. common stock $947,248 $10,446,041
PNC EBT Investment Contract Fund 252,434 6,082,835
PNC Index Equity Fund 504,016 5,055,361
Invesco Total Return Fund 143,872 2,069,218
-------------------------------
$1,847,570 $23,653,455
===============================
December 31, 1995:
LESCO, Inc. common stock $1,469,293 $9,681,276
Massachusetts Mutual Group Annuity Contract 5,695,975
PNC Index Equity Fund (123,561) 3,029,313
Invesco Total Return Fund 32,827 1,058,329
-------------------------------
$1,378,559 $19,464,893
===============================
</TABLE>
8
<PAGE> 11
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Notes to Financial Statements--Continued
E. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the IRC. Therefore, the related Trust is tax exempt under Section
501(a) of the IRC. The Plan has been amended as required by the Tax Reform Act
of 1986 ("Act") and other post-1986 legislation. In management's opinion, the
Plan is operating in compliance with the applicable provisions of the Act and
other post-1986 legislation. The Plan administrator is not aware of any course
of action or series of events that have occurred that might adversely affect the
Plan's qualified status.
The tax exempt status of the Plan does not apply to the taxability of
distributions to participants under the Plan.
9
<PAGE> 12
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Item 27(a)--Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Identity of Issue Description of Assets Cost Current Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LESCO, Inc. Common Stock 899,353 units A $ 10,446,041
Fund*
PNC EBT Investment Contract Fund* Common/Collective
Fund--3,456,156
units $ 5,830,020 6,082,835
Registered Investment Companies:
PNC Index Equity Fund 352,782 units 4,657,493 5,055,361
Invesco Total Return Fund 85,153 units 1,872,457 2,069,218
Fidelity Advisor Overseas Fund 37,685 units 563,275 578,838
Participants loans at various interest
rates Loans to participants 722,480 722,480
<FN>
(A) This information is not available
* Indicates party-in-interest to the Plan.
</TABLE>
10
<PAGE> 13
LESCO, Inc. Stock Investment and Salary Savings Plan and Trust
Item 27(d)--Schedule of Reportable Transactions
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Purchase Selling Net
Description Price Price Cost Gain
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CATEGORY (i)--SINGLE TRANSACTIONS IN EXCESS OF 5% OF
PLAN ASSETS
PNC EBT Investment Contract Fund*
1 purchase $ 5,872,593 $ 5,872,593
Massachusetts Mutual Group Annuity
Contract*
1 sale $ 5,892,170 5,381,194 $ 510,976
CATEGORY (iii)--SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS
PNC EBT Investment Contract Fund*
48 purchases 6,517,216 6,517,216
87 sales 702,382 687,195 15,187
PNC Index Equity Fund
58 purchases 1,911,151 1,911,151
96 sales 423,820 407,460 16,360
Massachusetts Mutual Group Annuity
Contract*
23 purchases 583,156 583,156
29 sales 6,670,878 6,134,231 536,647
LESCO, Inc. common stock*
70 purchases 734,781 734,781
87 sales 1,009,923 357,416 652,507
</TABLE>
There were no category (ii) or (iv) transactions for the year ended December 31,
1996.
* Indicates party-in-interest to the Plan.
<PAGE> 14
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
LESCO, Inc. Stock Investment and
Salary Savings Plan and Trust
/s/ Ware H. Grove
--------------------------------
Ware H. Grove, Vice-President/CFO
LESCO, Inc.
INDEX TO EXHIBITS
-----------------
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
Ex 23 Consent of Independent Auditors
<PAGE> 1
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-38118) pertaining to the LESCO, Inc. Stock Investment and Salary
Savings Plan and Trust of our report dated May 22, 1997, with respect to the
financial statements and schedules of LESCO, Inc. Stock Investment and Salary
Savings Plan and Trust included in this Annual Report (Form 11-K) for the year
ended December 31, 1996.
ERNST & YOUNG LLP
Cleveland, Ohio
June 24, 1997
