Lawson stocks dip on earnings

Des Plaines-based Lawson Products Inc. announced this week a 22 percent decrease in third quarter earnings, hampered by severance costs, higher overall product costs and costsof a continuinglegal investigation.

The provider of industrial products and services to the auto industry and others reported earnings of $2.4 million, or 28 cents per diluted share, for the quarter ended Sept. 30. This compares with earnings of $3.1 million, or 34 cents per diluted share, in the same quarter last year.

Executive departures and management restructuring resulted in costs of $3.7 million, according to the firm.

"Several third quarter 2007 employee departures related to certain initiatives resulted in severance charges that negatively impacted our reported financial results for the current quarter," CEO Thomas Neri said in a statement.

The company's selling, general and administrative expenses of $67.4 million included $1.2 million of legal costs incurred in a continuing investigation by the U.S. Attorney's Office.

The attorney's office is "conducting an investigation as to whether any of the company's representatives improperly provided gifts or awards to purchasing agents (including government agents) through the company's customer loyalty programs," according to a company filing with theSecurities and Exchange Commission on Sept. 30, 2006. Several salesmen of the company and the representatives to whom they sold products were indicted on charges of mail fraud in April.