Global Fastener News

1981 FIN – Lamson & Sessiions Sells Much of Industrial Fasteners Division to RB&W

November 02
00:00 2009


January 15, 1981 FIN – Lamson & Sessions Co, of Cleveland has signed an agreement for the sale of a significant portion of its Industrial Fastener Division to Russell, Burdsall & Ward Corp. of Mentor Ohio.
Terms of the agreement, subject to RB&W’s stockholders’ approval and governmental review, calls for payment in cash based on a net worth valuation of the assets to be sold. Lamson said that, based on present estimates, it expects to receive about $18-20 million from this sale which it hopes to consummate early in 1981.

The major fastener manufacturing facilities which are part of the sale are the Lamson & Sessions’ plants in Kent, Ohio (Plant #1 which makes nuts and Plant #2 which makes extrusions); Chicago (bolts and screws); Kendalville, Ind. (special nuts); and Toronto, will acquire the equipment and inventory from Lamson & Sessions Cleveland plant.

Not included in the sale are Lamson’s Cleveland plant, Birmingham operations and the fastener business in Germany, Fastenrath-Lamson & Sessions GmbH, Plettenberg, West Germany.

Manufacturing operations at the Cleveland plant are expected to be phased out early in 1981 and they have already ceased at the Birmingham manufacturing plant.
The fastener business in Germany and the Birmingham distribution facility will continue to be operated by Lamson.

Another fastener manufacturing unit, the Zimmer Manufacturing Industries in Detroit was closed in May of last year and some of the people from that plant were transferred to Lamson & Sessions’ operations in Kent, Ohio and Toronto, Canada.
Also not included in the deal is Lamson’s aircraft parts subsidiary, Valley-Todeco Inc., Sylmar, Calif., which was separated from the Industrial Fastener Division in an organizational realignment of the company in 1980.

The divestiture of the Industrial Fastener division will result in the reduction of 1980 reported sales of Lamson & Sessions by approximately $67 million. The division’s losses of approximately $5 million after taxes will be reported as those of a discontinued operation.
Lamson & Sessions’ third quarter 1980 results showed (year earlier figures in parentheses) the following: Sales $69,129,000 ($88,966,000) Net earnings, a loss of $3,008,000 ($2,936,000, including the sale of a Bedford, Ohio fastener plant). Earnings per share, loss of 15¢ (61¢). For the nine months ended September 30, sales were $242,975,000 ($218,027,000). Net earnings showed a loss of $4,097,000 ($11,557,000) and earnings per share registered a loss of 78¢ ($2.68).

Lamson said that the sales to RB&W is not expected to result in any material gain or loss for the company.
However, the sale to RB&W of a significant portion of the Industrial Fastener division would result in Lamson’s recognition of certain other costs in the fourth quarter of 1980. Such costs approximated $6 to $7 million after taxes and will largely reflect the write-off of certain pension and other costs related to the continued business. The sale and write-off of these costs in the fourth quarter are expected to have a positive impact on cash flow and earnings for 1981.

George J. Grabner, chairman and chief executive officer and Russel B. Every, president and chief operating officer told FIN that the sale of the division is part of an ongoing program to raise the company’s level of profitability and strengthen the company’s capital structure and that proceeds of the sale will be used principally to reduce debt.
The September 1980 financial statement showed long term debt as $96,687,000 – up from $60,289,000 for the same period a year earlier.

Every has been president of Lamson since early in 1980. He joined the company in August, 1979 when the company acquired Midsco, Inc. (the former Midland Steel Products Co.) of which he was chairman and CEO. He joined Lamson & Sessions in 1970 from the accounting firm of Ernst & Whinney.

The division president and a vice president of Lamson & Sessions is Roger K. Steel who joined the division in 1977 after serving as the president of a fastener division of SPS Technologies, Inc.

Lamson & Sessions Started in 1866
Lamson & Sessions began business in 1866, a year after the Civil War making buts and bolts for such things as country grocers’ coffee grinders.

Following the divestiture of portions of its fastener business the company will continue to be involved in such things as the production of railroad cars and parts, truck frames, industrial castings, aircraft parts, and specialized industrial equipment.
RB&W is also in the retail ladies’ ready to wear business through its Mangel Division which has about 60 outlets, mostly in the southeast. In December, 1977,
Mangel Stores Corp., North Bergen, N.J. acquired Russell, Burdsall & Ward, Inc. through bank financing of around $50 million. In 1978, shareholders voted to change the company from Mangel to Russell, Burdsall & Ward Corp.

For the fiscal 1980 year, ended February 2, 1980, the company had net sales of $154,470,000 ($140,935,000) and a net income of $1,845,000 ($3,891,000) or 48¢/share (71¢/share).

RB&W which had a long-term debt of $29,312,000 as of November, 1980 said it would finance the purchase from Lamson & Sessions by selling $20 million or 5% convertible preferred stock to Automotive Hardware Ltd., Toronto, Canada. The preferred upon conversion will represent 50.1% of the common of RB&W. Prior to conversion, the preferred will have majority voting rights in the company according to RB&W officials. ©1981/2009 Fastener Industry News.

1981 FIN � Lamson & Sessions to Sell Birmingham Division
April 17, 1981 FIN- Lamson & Sessions is close to putting together a deal disposing of its Birmingham, Alabama fastener distribution operation, part of the $5-7 million worth of fastener business it had left after selling the major portion to Russell, Burdsall & Ward for $20 million.
The RB&W sale was completed this month; it included L&S plants in Kent, Ohio, Chicago, Kendalville, Ind., and Toronto and distribution centers in Toronto and Los Angeles, and equipment and inventory from the Cleveland plant.

L&S said that it will dispose of the rest of its fastener business in 1981.
The Birmingham deal is the one closest to completion. Some $2 million worth of machinery and equipment from Birmingham have been sold already.

Whether they dispose of facilities piecemeal or as operating units has depended, Alan L. Miller told FIN, “on who’s out there and what they are looking for.”
The Cleveland operation was phased out when the machinery and equipment was sold to RB&W.
Miller says it now has people interested in the building.

The fastener business in Germany will be the last to go. “We do not visualize that being sold as anything other than an ongoing business,” Miller said. “People have expressed an interest in it. It’s a matter of when the timing is most opportune.”
The German fastener industry has suffered the same sort of repercussions from a faltering automotive industry as have U.S. fastener makers.
“Consequently,” Miller says, “if we were to wait for a little bit of an upturn in that business in Germany, it would probably command a better sales price. It’s a good business and we don’t want to couch it in anything resembling a fire sale.”
If necessary they would wait beyond their end of 1981 deadline to sell the German operation, but Miller doubts that it will have to.

L&S’s loss of interest in the fastener industry is a product of Detroit. Not only has the domestic automotive industry stagnated, but L&S sees a trend toward downsized automobiles with unitized bodies requiring fewer fasteners per car. “This will mean less demand for the total fastener industry,” Miller says.
“L&S and RB&W both came to the same conclusion,” Miller told FIN. “The only logical answer, where you have two or three facilities under-utilized is to see if you can dovetail certain operations in certain product lines under one common management, shake out some of the less productive facilities and see if you can make a go of it. We concluded that we would be better off utilizing our assets in other industries. Even with consolidation, the return on investment wasn’t there.” ©1981/2009 Fastener Industry News.

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