##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549







FORM 10-K

|    |  |                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------
|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

|                                            |                              | 
|------------------------------------------- | ---------------------------- | 
|For the fiscal year ended December 30, 2000 | Commission File Number 1-313

|      |  |                                                                                                           
|----- |  | ----------------------------------------------------------------------------------------------------------
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

THE LAMSON & SESSIONS CO.(Exact name of Registrant as specified in its charter)

|                                                                                             |  |                                             
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------
|Ohio
(State or other jurisdiction of
incorporation or organization)
25701 Science Park Drive |  | 34-0349210
(IRS Employer Identification No.)
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|Cleveland, Ohio
(Address of principal executive offices)                                     |  | 44122-7313
(Zip Code)                       

Registrants telephone number, including area code: 216/464-3400

Securities registered pursuant to Section 12(b) of the Act:

|                                 |  |                                               
|-------------------------------- |  | ----------------------------------------------
|                                 |  | Name of each exchange                         
|Title of each class              |  | on which registered                           
|                                 |  |                                               
|Common Shares, without par value |  | New York Stock Exchange
Pacific Stock Exchange

|                                                                     |  | 
|-------------------------------------------------------------------- |  | 
|Securities registered pursuant to Section 12(g) of the
Act:     None

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 ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [   ]

The aggregate market value of the voting stock held as of February 9, 2001
by non-affiliates of the Registrant: $143,808,987.

As of February 9, 2001 the Registrant had outstanding 13,706,877 common
shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2001 Annual Meeting of
Shareholders are incorporated by reference
into Part III.





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TABLE OF CONTENTS



|              |                                                                                                 |  |  |  |  |  |  | 
|------------- | ----------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|FORM 10-K    
|PART I       
|              | Item 1.  Business                                                                             
|              | Item 2.  Properties                                                                           
|              | Item 3.  Legal Proceedings                                                                    
|              | Item 4.  Submission of Matters to Security Holders                                            
|PART II      
|              | Item 5.  Market for the Registrants Common Stock and Related Security Holder Matters         
|              | Item 6.  Selected Financial Data                                                              
|              | Item 7.  Managements Discussion and Analysis of Financial Condition and Results of Operations
|              | Item 8.  Financial Statements and Supplementary Data                                          
|              | Item 9.  Disagreements on Accounting and Financial Disclosure                                 
|PART III     
|              | Item 10.  Directors and Executive Officers of the Registrant                                  
|              | Item 11.  Executive Compensation                                                              
|              | Item 12.  Security Ownership of Certain Beneficial Owners and Management                      
|              | Item 13.  Certain Relationships and Related Transaction                                       
|PART IV      
|              | Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|EXHIBIT INDEX
|EXHIBIT 21   
|EXHIBIT 23   
|EXHIBIT 24   



---









PART I







Item 1.  Business

The Lamson & Sessions Co., an Ohio corporation, (the Company or Lamson &
Sessions), founded in 1866, is a diversified manufacturer and distributor of a
broad line of thermoplastic electrical, consumer, telecommunications and fluid
drainage products for major domestic markets. The markets for thermoplastic
electrical conduit, related fittings and accessories, wiring devices and sewer
pipe include: the construction, utility and telecommunications industries,
municipalities, other government agencies, and contractors; and
do-it-yourself home remodelers.

Principal Products and Markets

The Company is engaged in the manufacture and distribution of a broad line of
thermoplastic electrical, telecommunications and engineered sewer products. In
addition, the Company distributes a wide variety of consumer electrical wiring
devices, home security devices, wireless electrical and other wireless
products.

All of the Companys thermoplastic electrical products compete with and serve
as substitutes for similar metallic products. The Companys engineered sewer
pipe products compete with and serve as substitutes for clay, concrete, ductile
iron, asbestos cement and polyethylene products. The Companys thermoplastic
electrical products offer several advantages over these other products.
Specifically, nonmetallic electrical and telecommunications conduit and related
fittings and accessories are generally less expensive, lighter and easier to
install than metallic products. They do not rust, corrode or conduct
electricity. Thermoplastics, either polyvinyl chloride (PVC) or high density
polyethylene (HDPE), are the materials of choice to protect fiber optic cable.
Thermoplastic sewer pipe weighs less than alternative products, is easier and
more economical to install, does not degenerate due to chemical attack as do
some competing products, and eliminates avoidable problems which can be caused
by infiltration and exfiltration.

Three markets are served, each of which has unique product and marketing
requirements. These markets are:

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,
telecommunications 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 or HDPE conduit
designed to protect underground fiber optic cables, allowing future cabling expansion and flexible conduit used inside buildings
to protect communications cable. The two recent acquisitions of Pyramid
Industries, Inc. (Pyramid) and Ameriduct Worldwide, Inc. (Ameriduct) are
included as part of the Carlon segment.

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 outlet boxes, liquidtight conduit,
electrical fittings, chimes and lighting controls.

PVC Pipe:This business segment supplies electrical, power and communications
conduit to the electrical distribution, telecommunications, consumer and power
utility markets. The 1/2 inch to 6 inch electrical and telecommunications
conduit is made from PVC and is used to protect wire or fiber optic cables
supporting the infrastructure of our power or telecommunications systems. In
addition, this segment provides closed profile engineered sewer pipe ranging
in diameter from 21 inches to 54 inches to various municipalities and private
contractors for drainage systems in new construction and rehabilitation
markets.

A breakdown of revenues as a percent of net sales by major business segment for
2000, 1999 and 1998, is as follows:

|                       |  |      |         |      |  |      |     |   |  |   |         |  |  |  |     |   |  |   |         |  |  |  |     |  
|---------------------- |  | ---- | ------- | ---- |  | ---- | --- | - |  | - | ------- |  |  |  | --- | - |  | - | ------- |  |  |  | --- | -
|(Dollars in thousands) |  | 2000 |         | 1999 |  | 1998
|                       |  |      |         |      |  |     
|Carlon                 |  | $    | 142,979 |      |  |      | 41  | % |  | $ | 120,975 |  |  |  | 42  | % |  | $ | 109,458 |  |  |  | 40  | %
|                      
|                      
|                      
|                      
|Lamson Home Products   |  |      | 63,351  |      |  |      | 18  | % |  |   | 53,401  |  |  |  | 18  | % |  |   | 50,348  |  |  |  | 19  | %
|                      
|                      
|                      
|                      
|PVC Pipe               |  |      | 142,403 |      |  |      | 41  | % |  |   | 117,005 |  |  |  | 40  | % |  |   | 111,108 |  |  |  | 41  | %
|                       |  |      |         |      |  |      |     |   |  |   |         |  |  |  |     |   |  |   |         |  |  |  |     |  
|                       |  | $    | 348,733 |      |  |      | 100 | % |  | $ | 291,381 |  |  |  | 100 | % |  | $ | 270,914 |  |  |  | 100 | %
|                       |  |      |         |      |  |      |     |   |  |   |         |  |  |  |     |   |  |   |         |  |  |  |     |  

See discussion of segment products in Note K of financial statements.

2



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Competition

Each of the three segments in which the Company presently operates is highly
competitive based on service, price and quality. Most of the competitors are
either national or smaller regional manufacturers who compete with limited
product offerings. Unlike a majority of the Companys competitors, the Company
manufactures a broad line of thermoplastic products, complementary fittings and
accessories. The Company believes that its products will continue to compete
favorably. However, certain of the Companys competitors have greater financial
resources than the Company, which could adversely affect the Company through
price competition strategies.

Distribution

The Company distributes its products through a nationwide network of more than
100 manufacturers representatives and a direct sales force of approximately
40. Currently, three manufacturers representatives maintain an inventory of
the Companys products.

Raw Materials

The Company is a large purchaser of pipe grade PVC and HDPE resins. The Company has entered into supply
contracts for PVC which should stabilize its availability for the next several
years. HDPE is purchased by the Company from various sources and is readily
available.

Patents and Trademarks

The Company owns various patents, patent applications, licenses, trademarks and
trademark applications relating to its products and processes. While the
Company considers that, in the aggregate, its patents, licenses and trademarks
are of importance in the operation of its business, it does not consider that
any individual patent, license or trademark, or any technically related group,
is of such importance that termination would materially affect its business.

Seasonal Factors

Two of the Companys three business segments experience moderate seasonality
caused principally by a decrease in construction activity during the winter
months. They are subject also to the economic cycles affecting the
residential, commercial and industrial construction industries and to a lesser
degree the telecommunications infrastruction construction. The Companys
consumer products business unit is affected by consumer spending and consumer
confidence.

Major Customers

Sales to Affiliated Distributors, a buying group within the Carlon and PVC Pipe
segments not otherwise affiliated with the Company, totaled approximately 17%
of consolidated net sales in 2000 and 1999 and 15% of consolidated net sales in
1998.

Backlog

In the Companys three business segments, the order-to-delivery cycle ranges
from several days to a few weeks. Therefore, the measurement of backlog is not
a significant factor in the evaluation of the Companys prospects.

Research and Development

The Company is engaged in product development programs which concentrate on
identifying, creating and introducing innovative applications for thermoplastic
and wireless electrical products. The Company maintains a separate product
development center in Cleveland, Ohio, to facilitate this effort and improve
manufacturing processes. The Companys research and development expenditures
totaled $3.3 million, $3.8 million and $3.7 million in 2000, 1999 and 1998,
respectively.

Environmental Regulations

The Company believes that its current operations and its use of property, plant
and equipment conform in all material respects to applicable environmental laws
and regulations presently in effect. The Company has facilities at numerous
geographic locations, which are subject to a range of federal, state and local
environmental laws and regulations. Compliance with these laws has, and will,
require expenditures on a continuing basis.

3



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During the second quarter of 1999, the Company reached a settlement on
litigation involving environmental matters at a property sold by the Company in
1981 whereby the Company agreed to incur costs of certain remediation
activities which will occur over several years. The settlement did not have a
material impact on the Companys financial position or results of operations.

Associates

At December 30, 2000, the Company had 1,246 associates, 1,020
of whom were employed at the Companys manufacturing facilities and distribution centers.
The remainder of associates were primarily employed at the Companys corporate
headquarters and product development facilities.

Foreign Operations

The net sales, operating earnings and assets employed outside the United States
are not significant. Export sales were approximately 2% of consolidated net
sales in 2000 and 1999 and 1% in 1998, and were made principally to countries
in North America.







Item 2.  Properties

The Company owns (O) or leases (L) manufacturing and distribution facilities,
which are suitable and adequate for the production and marketing of its
products. The Company owns executive and administrative offices, which are
located in Cleveland, Ohio, and occupy 68,000 square feet in a suburban office
complex. The Company also has research and development offices, located in
Cleveland, Ohio, which occupy leased space of 27,000 square feet, and
administrative offices in Erie, Pennsylvania, which occupy 7,000
square feet of leased space. The following is a list of the Companys manufacturing and
distribution center locations:

|                                         |  |             |         |  | 
|---------------------------------------- |  | ----------- | ------- |  | 
|                                         |  | Approximate
|Manufacturing Facilities                 |  | Square
Feet
|                                        
|                                        
|                                        
|                                        
|Woodland, California (O)                 |  |             | 66,000  | 
|                                        
|                                        
|                                        
|                                        
|High Springs, Florida (O)                |  |             | 110,000 | 
|                                        
|                                        
|                                        
|                                        
|Fort Lauderdale, Florida (L)             |  |             | 7,500   | 
|                                        
|                                        
|                                        
|                                        
|Tennille, Georgia (O)                    |  |             | 41,000  | 
|                                        
|                                        
|                                        
|                                        
|Clinton, Iowa (O)                        |  |             | 124,000 | 
|                                        
|                                        
|                                        
|                                        
|Mountain Grove and Seymour, Missouri (O) |  |             | 36,000  | 
|                                        
|                                        
|                                        
|                                        
|Bowling Green, Ohio (O)                  |  |             | 67,000  | 
|                                        
|                                        
|                                        
|                                        
|Oklahoma City, Oklahoma (O)              |  |             | 172,000 | 
|                                        
|                                        
|                                        
|                                        
|Nazareth, Pennsylvania (O)               |  |             | 59,000  | 
|                                        
|                                        
|                                        
|                                        
|Erie, Pennsylvania (L)                   |  |             | 56,000  | 
|                                        
|                                        
|                                        
|                                        
|Cranesville, Pennsylvania (L)            |  |             | 10,000  | 
|                                        
|                                        
|                                        
|                                        
|Pasadena, Texas (O)                      |  |             | 48,000  | 
|                                        
|                                        
|                                        
|                                        
|Distribution Centers                    
|                                        
|                                        
|                                        
|                                        
|Columbia, South Carolina (L)             |  |             | 350,000 | 
|                                        
|                                        
|                                        
|                                        
|Woodland, California (L)                 |  |             | 105,000 | 
|                                        
|                                        
|                                        
|                                        
|Fort Myers, Florida (O)                  |  |             | 4,000   | 

The Company operated the above manufacturing facilities at approximately 91% of
their productive capacity in 2000.

4



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##### Table of Contents









Item 3.  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-judgment
interest of approximately $1.5 million. The court declined to increase the
damages with respect to the willfulness finding. The Company is pursuing 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 affect on the Companys financial position, cash flows and
results of operations. It is the Companys understanding that the appeal
process may require a one-to-two year period.

The Company has filed a suit to recover damages related to the termination of
the agreement to sell its PVC Pipe business. This matter is scheduled for trial
in March 2001. It is premature to estimate the timing for a resolution of this
suit.

The Company is also a party to various other claims and matters of litigation
incidental to the normal course of its business. Management believes that the
final resolution of these matters will not have a material adverse affect on
the Companys financial position, cash flows or results of operations.







Item 4.  Submission of Matters to Security Holders

None.

5



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##### Table of Contents



EXECUTIVE OFFICERS OF THE
REGISTRANT


JOHN B. SCHULZE






JAMES J. ABEL






CHARLES E. ALLEN






ALBERT J. CATANI, II






DONALD A. GUTIERREZ






CHARLES W. HENNON






MELVIN W. JOHNSON






LORI L. SPENCER






NORMAN P. SUTTERER






6



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##### Table of Contents









PART II







Item 5.  Market for the Registrants Common Stock and Related Security Holder Matters

The Companys Common Stock is traded on the New York Stock Exchange and the
Pacific Stock Exchange. High and low sales prices for the common stock are
included in Note M to the Consolidated Financial Statements. No dividends were
paid in 2000, 1999 or 1998. The approximate number of shareholders of record
of the Companys Common Stock at
December 30, 2000 was 1,377.

7



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##### Table of Contents









Item 6.  Selected Financial Data

FIVE-YEAR CONSOLIDATED FINANCIAL SUMMARY

|                                             |                                                                         |      |                    |         |   |      |   |         |   |      |   |         |   |  |   |         |    |  |   |         |  
|-------------------------------------------- | ----------------------------------------------------------------------- | ---- | ------------------ | ------- | - | ---- | - | ------- | - | ---- | - | ------- | - |  | - | ------- | -- |  | - | ------- | -
|                                             |                                                                         |      | Fiscal Years Ended
|(Dollars in thousands except per share data, |                                                                         |      |                   
|shareholders, associates and percentages)    |                                                                         | 2000 |                    | 1999    |   | 1998 |   | 1997    |   | 1996
|                                             |                                                                         |      |                    |         |   |      |   |         |   |     
|Operations:                                 
|                                            
|                                            
|                                            
|                                            
|                                             | Net sales                                                               |      | $                  | 348,733 |   |      | $ | 291,381 |   |      | $ | 270,914 |   |  | $ | 271,780 |    |  | $ | 289,052 |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cost of products sold                                                   |      |                    | 260,114 |   |      |   | 229,981 |   |      |   | 214,410 |   |  |   | 221,898 |    |  |   | 223,778 |  
|                                            
|                                            
|                                            
|                                            
|                                             | GROSS PROFIT                                                            |      |                    | 88,619  |   |      |   | 61,400  |   |      |   | 56,504  |   |  |   | 49,882  |    |  |   | 65,274  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Operating expenses                                                      |      |                    | 54,132  |   |      |   | 48,054  |   |      |   | 47,584  |   |  |   | 52,377  |    |  |   | 53,135  |  
|                                            
|                                            
|                                            
|                                            
|                                             | OPERATING INCOME (LOSS)                                                 |      |                    | 34,487  |   |      |   | 13,346  |   |      |   | 8,920   |   |  |   | (2,495  | )  |  |   | 12,139  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Interest                                                                |      |                    | 4,539   |   |      |   | 3,558   |   |      |   | 4,341   |   |  |   | 3,768   |    |  |   | 2,611   |  
|                                            
|                                            
|                                            
|                                            
|                                             | INCOME (LOSS) BEFORE INCOME TAXES AND                                  
|                                            
|                                            
|                                            
|                                            
|                                             | CUMULATIVE EFFECT OF ACCOUNTING CHANGE                                  |      |                    | 29,948  |   |      |   | 9,788   |   |      |   | 4,579   |   |  |   | (6,263  | )  |  |   | 9,528   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Income tax provision (benefit)                                          |      |                    | 8,500   |   |      |   | (9,000  | ) |      |   | (2,100  | ) |  |   | (1,550  | )  |  |   | (4,100  | )
|                                            
|                                            
|                                            
|                                            
|                                             | INCOME (LOSS) BEFORE CUMULATIVE                                        
|                                            
|                                            
|                                            
|                                            
|                                             | EFFECT OF ACCOUNTING CHANGE                                             |      |                    | 21,448  |   |      |   | 18,788  |   |      |   | 6,679   |   |  |   | (4,713  | )  |  |   | 13,628  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cumulative effect of accounting change                                  |      |                    |         |   |      |   |         |   |      |   |         |   |  |   | (4,940  | ) 
|                                            
|                                            
|                                            
|                                            
|                                             | NET INCOME (LOSS)                                                       |      |                    | 21,448  |   |      |   | 18,788  |   |      |   | 6,679   |   |  |   | (9,653  | )  |  |   | 13,628  |  
|                                             |                                                                         |      |                    |         |   |      |   |         |   |      |   |         |   |  |   |         |    |  |   |        
|Year-End Financial Position:                
|                                            
|                                            
|                                            
|                                            
|                                             | Current Assets                                                          |      | $                  | 134,906 |   |      | $ | 94,704  |   |      | $ | 83,975  |   |  | $ | 91,567  |    |  | $ | 90,945  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Other Assets                                                            |      |                    | 120,090 |   |      |   | 40,522  |   |      |   | 25,957  |   |  |   | 21,079  |    |  |   | 9,703   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Property, Plant and Equipment                                           |      |                    | 65,297  |   |      |   | 48,093  |   |      |   | 50,735  |   |  |   | 56,329  |    |  |   | 60,473  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Total Assets                                                            |      |                    | 320,293 |   |      |   | 183,319 |   |      |   | 160,667 |   |  |   | 168,975 |    |  |   | 161,121 |  
|                                            
|                                            
|                                            
|                                            
|                                             | Current Liabilities                                                     |      |                    | 76,656  |   |      |   | 56,223  |   |      |   | 47,278  |   |  |   | 57,580  |    |  |   | 51,906  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Long-Term Debt                                                          |      |                    | 130,276 |   |      |   | 36,919  |   |      |   | 40,807  |   |  |   | 44,712  |    |  |   | 36,911  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Other Long-Term Liabilities                                             |      |                    | 27,332  |   |      |   | 26,808  |   |      |   | 28,451  |   |  |   | 29,702  |    |  |   | 27,517  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Shareholders Equity                                                    |      |                    | 86,029  |   |      |   | 63,369  |   |      |   | 44,131  |   |  |   | 36,981  |    |  |   | 44,787  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Working Capital                                                         |      |                    | 58,250  |   |      |   | 38,481  |   |      |   | 36,697  |   |  |   | 33,987  |    |  |   | 39,039  |  
|                                             |                                                                         |      |                    |         |   |      |   |         |   |      |   |         |   |  |   |         |    |  |   |        
|Statistical Information:                    
|                                            
|                                            
|                                            
|                                            
|                                             | Average number of dilutive common shares outstanding                    |      |                    | 13,989  |   |      |   | 13,482  |   |      |   | 13,488  |   |  |   | 13,349  |    |  |   | 13,641  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Number of shareholders of record                                        |      |                    | 1,377   |   |      |   | 1,558   |   |      |   | 1,687   |   |  |   | 1,832   |    |  |   | 1,987   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Number of associates                                                    |      |                    | 1,246   |   |      |   | 963     |   |      |   | 983     |   |  |   | 1,044   |    |  |   | 1,164   |  
|                                            
|                                            
|                                            
|                                            
|                                             | Book value per share                                                    |      | $                  | 6.15    |   |      | $ | 4.70    |   |      | $ | 3.27    |   |  | $ | 2.77    |    |  | $ | 3.28    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Market price per share                                                  |      | $                  | 10.50   |   |      | $ | 4.88    |   |      | $ | 5.13    |   |  | $ | 5.81    |    |  | $ | 7.25    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Market capitalization                                                   |      | $                  | 143,819 |   |      | $ | 65,584  |   |      | $ | 68,903  |   |  | $ | 77,970  |    |  | $ | 96,433  |  
|                                            
|                                            
|                                            
|                                            
|                                             | Gross margin as a % of net sales                                        |      |                    | 25.4    | % |      |   | 21.1    | % |      |   | 20.9    | % |  |   | 18.4    | %  |  |   | 22.6    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Operating expenses as a % of net sales                                  |      |                    | 15.5    | % |      |   | 16.5    | % |      |   | 17.6    | % |  |   | 19.3    | %  |  |   | 18.4    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Operating margin as a % of net sales                                    |      |                    | 9.9     | % |      |   | 4.6     | % |      |   | 3.3     | % |  |   | (0.9    | %) |  |   | 4.2     | %
|                                            
|                                            
|                                            
|                                            
|                                             | Operating cash flow as a % of total debt                                |      |                    | 19.9    | % |      |   | 29.9    | % |      |   | 19.5    | % |  |   | 6.2     | %  |  |   | 21.3    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Capital Expenditures                                                    |      | $                  | 11,085  |   |      | $ | 7,563   |   |      | $ | 4,546   |   |  | $ | 11,584  |    |  | $ | 16,771  |  
|                                            
|                                            
|                                            
|                                            
|                                             | EBITDA (earnings before interest, taxes, depreciation and amoritzation) |      | $                  | 45,716  |   |      | $ | 23,482  |   |      | $ | 18,877  |   |  | $ | 6,224   |    |  | $ | 20,909  |  
|                                            
|                                            
|                                            
|                                            
|                                             | EBITDA Margin                                                           |      |                    | 13.1    | % |      |   | 8.1     | % |      |   | 70      | % |  |   | 2.3     | %  |  |   | 7.2     | %
|                                            
|                                            
|                                            
|                                            
|                                             | Long-term debt as a % of equity                                         |      |                    | 151.4   | % |      |   | 58.3    | % |      |   | 92.5    | % |  |   | 120.9   | %  |  |   | 82.4    | %
|                                            
|                                            
|                                            
|                                            
|                                             | Return on average equity from operations                                |      |                    | 28.7    | % |      |   | 35.0    | % |      |   | 16.5    | % |  |   | (11.5   | %) |  |   | 36.0    | %
|                                             |                                                                         |      |                    |         |   |      |   |         |   |      |   |         |   |  |   |         |    |  |   |        
|Basic Earnings (Loss) Per Common Share:     
|                                            
|                                            
|                                            
|                                            
|                                             | Earnings (Loss) before change in accounting principle                   |      | $                  | 1.58    |   |      | $ | 1.40    |   |      | $ | 0.50    |   |  | $ | (0.35   | )  |  | $ | 1.02    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cumulative effect of accounting change                                  |      |                    |         |   |      |   |         |   |      |   |         |   |  | $ | (0.37   | ) 
|                                            
|                                            
|                                            
|                                            
|                                             | Net earnings (Loss)                                                     |      | $                  | 1.58    |   |      | $ | 1.40    |   |      | $ | 0.50    |   |  | $ | (0.72   | )  |  | $ | 1.02    |  
|                                            
|                                            
|                                            
|                                            
|Diluted Earnings (Loss) Per Common Share:   
|                                            
|                                            
|                                            
|                                            
|                                             | Earnings (Loss) before change in accounting principle                   |      | $                  | 1.53    |   |      | $ | 1.39    |   |      | $ | 0.50    |   |  | $ | 90.35   | )  |  | $ | 1.00    |  
|                                            
|                                            
|                                            
|                                            
|                                             | Cumulative effect of accounting change                                  |      |                    |         |   |      |   |         |   |      |   |         |   |  | $ | (0.37   | ) 
|                                            
|                                            
|                                            
|                                            
|                                             | Net earnings (Loss)                                                     |      | $                  | 1.53    |   |      | $ | 1.39    |   |      | $ | 0.50    |   |  | $ | (0.72   | )  |  | $ | 1.00    |  



8



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Item 7.  Managements Discussion and Analysis of Financial Condition and Results of Operations

Discussion of the Consolidated Statements of Income

The Consolidated Statements of Incomepresent Lamson & Sessions operating
performance over the last three years.

Results of Operations

Net sales increased in 2000 to $348.7 million from $291.4 million in 1999
representing a 19.7% growth rate.Excluding the two acquisitions made by the
Company during the year net sales would have increased by 14.6% or $42.7
million. All three business segments experienced healthy growth during this
year. Carlon grew by $22 million or 18.2% primarily from the Pyramid and
Ameriduct acquisitions, which added $14.7 million in combined net sales. This
business unit generated a 6% growth from its core electrical and
telecommunications products reflecting price increases early in the year and
modest market growth. Lamson Home Products increased its net sales level by
$10 million or 18.6% over 1999 to $63.4 million. This improvement in the top
line is almost entirely from additional business at the units second largest
customer as price increases were negligible. The PVC Pipe business had an
outstanding year as sales increased by 21.7% or $25.4 million to $142.4
million. These results reflect a 50% increase in selling price per unit as
resin costs were up by an average of 30% during 2000 versus 1999. The Company
gave up market share to maintain material spreads as the construction market
was very strong throughout the first half of this year. Telecommunications duct
volume was up by 12% this year, the mix improving from predominantly
electrical conduit to a more balanced product distribution. Sales of large
diameter sewer pipe have continued to decline due to extremely competitive
pricing in the direct bury product lines (12% lower than 1999). However, the
targeted rehabilitation pipe products have expanded rapidly this year, almost
doubling in sales value.

Net sales increased in 1999 by 7.6% to $291.4 million from $270.9 million
in 1998.The largest increase came in the Carlon business unit, which expanded
sales by 10.5% or $11.5 million. The segment has continued to gain market
acceptance of its engineered cable management products used in
telecommunications network construction both for inside premise and outside
plant applications. Strong construction markets and improved customer service
led to solid growth across the board in electrical products. Lamson Home
Products grew net sales by 6.1% or $3.1 million in 1999 compared with
1998.Continued strong growth in the home improvement market drove improved
sales volume in electrical fittings, outlet boxes and liquidtight tubing. This
segment was negatively impacted for 1999 by the Hechingers bankruptcy as well
as the elimination of unprofitable wiring device products. Finally, the PVC Pipe
business increased sales by 5.3%, with electrical and telecommunications conduit
growing by 8.1%, primarily from increased resin costs, which we were able to pass
on to our customers. This segment was negatively impacted by unexpected PVC
resin shortages during the third quarter, which limited its supply of conduit
to the electrical construction market. In addition, sales in large diameter
sewer pipe declined by 5.7% due to increased competition and a softening demand
for rehabilitation pipe.

Gross margins grew by over 20% to 25.4% in 2000 compared with 21.1% in 1999.This
improvement was a result of better margins in both the Carlon and the PVC Pipe
businesses from price increases and product mix improvements. Overall
distribution and freight costs were around $5 million less on a comparable
basis to 1999 primarily due to the consolidation of distribution operations
completed last year and effective management of freight surcharges incurred in
2000.

Gross margins were 21.1% in 1999, a slight improvement from the 20.9% in
1998.The 1999 cost of products sold includes $2.1 million of costs for the
consolidation of distribution operations. They consist primarily of associate
relocation, training and start-up costs and asset dispositions. Better product
mix, distribution and freight savings were partially offset by unfavorable
volume variances caused by the raw material shortages experienced during the
peak construction season.

Operating expenses were $54.1 million in 2000 ($6.1 million higher than 1999)
or 15.5% of net sales compared with 16.5% of net sales in 1999.Continued
productivity improvements in general administrative activities offset increases
in sales commission and legal, professional and acquisition related expenses.
The result was more than a two and a half times increase in operating income to
$34.5 million (9.9% of net sales) in 2000 versus $13.3 million (4.6% of net
sales) in 1999.

Operating expenses in 1999 declined to 16.5% of net sales or $48.1 million,
6.3% lower than the 17.6% in 1998.The Company continued to experience
productivity improvements from its infrastructure investments in management
information systems and associate training programs, which resulted in lower
staffing levels. With the exception of

9



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higher commission expense due to increased sales, operating expenses actually declined
by 1.3% from 1998.Operating income improved by almost 50% to $13.3 million in
1999 (4.6% of net sales) compared with $8.9 million (3.3% of net sales) in 1998.

Interest expense increased by a million dollars in 2000 due to the acquisition
debt added late in the year. The new debt agreement entered into in August 2000,
lowered the Companys average borrowing rate by over one percentage point. In
1999, the interest expense had declined as a result of lower average debt
levels and lower interest rates from improved operating performance.

The Companys earnings before interest, taxes, depreciation and amortization
(EBITDA) was $45.7 million for 2000, almost double the $23.5 million EBITDA
earned in 1999.

Financial Condition

Working capital was $58 million at the end of 2000 compared with $38.5 million at
the end of 1999.The current ratio increased to 1.76 in 2000 from 1.68 in 1999
as accounts receivable and inventory balances grew more than current related
payables. Cash flow generated from operating activities was a strong $27.5
million in 2000 versus $12.2 million in 1999. These results reflect the
significant improvement in operating results this year, which offset a $9.5
million increase in inventory.

Accounts receivable were $56.6 million at the end of 2000, which includes $15.8
in receivables from the acquisitions, compared with $40.7 million at the end of
1999.Days sales outstanding were about 49.2 this year compared with 49.8 days for
1999.

Inventory levels at the end of 2000 were $59.6 million compared with $42.6
million at the end of 1999.Of this $17.3 million increase, $7.5 million is
inventory acquired in the Pyramid and Ameriduct purchases. Almost the entire
remaining increase has occurred in the PVC Pipe business as pounds of resin are
up almost 45% from the low level at the end of last year, while resin pricing at
the end of 2000 is relatively the same as the prior year end.

Accounts payable at year end were approximately the same ($28.6 million) as
last year, as the Company has decreased its purchasing activity in the last
quarter to help adjust its inventory levels going into next year.

The current balance in deferred tax assets increased due to improved operating
results allowing the Company to utilize net operating losses to reduce current
expected tax payments. Accrued expenses reflect acquired liabilities to be paid
in the next year and the expectation that outstanding legal cases will be
resolved in the next year. The current portion of long-term debt has increased
to reflect the amortization schedule of term debt provided in the new credit
agreement.

The Company completed the refinancing of its debt during 2000 to provide up to
$194 million in a five-year facility with a ten bank consortium of which $48.5
million is a term loan. During the year the Company utilized in excess of $110
million for the acquisitions of Pyramid and Ameriduct. Excluding these acquisitions, the Company would have paid down nearly $20
million in debt.

Capital expenditures totaled $11.1 million in 2000 compared with $7.6 million in
1999.The current year spending was primarily for conduit extrusion capacity
additions, distribution center productivity, new product tooling and quality
enhancements.

Outlook

The following paragraphs contain forward-looking comments. The comments are
subject to, and the actual future results may be impacted by, the cautionary
limitations and factors outlined in the following narrative comments.

We began to express caution with respect to the moderating effects on the
general economy of interest rate increases in our Form 10-Q filings and
quarterly earnings releases throughout 2000. The general level of economic
activity slowed dramatically in the fourth quarter of 2000 and this slowing has
continued into the first quarter of 2001, especially in the telecommunications
market where funding sources for infrastructure development projects were
sharply contracted or eliminated.

On January 30, 2001, in our fourth quarter 2000 earnings release and web cast
conference call, we outlined our expectations for both the first quarter and
full year 2001 which reflected the best information available to us at that
time from economic data as well as input from customers and our sales force.
Since then, we have experienced a significantly lower sales order rate which
now causes us to reduce our earnings estimate accordingly. Recent
announcements by major telecommunications companies lowering their growth
forecasts and recognizing the severity of the economic slowdown are having an
effect on our performance. The sales order activity from the telecommunication
infrastructure market has fallen precipitously in light of the slowing or
deferral of outside plant construction projects (including the installation of
fiber optic backbone networks) over the past several weeks. While we continue
to believe that the telecom infrastructure markets prospects over the next two
or three years are projected to be good, the near term decline reflects a
combination of conservative capital spending and difficulty in gaining firm
financing agreements as a result of general credit tightening measures.

Our Carlon business segment encompasses both the telecom market and the
residential and commercial construction markets. While the telecom activity
has slowed, we are encouraged by the continuing strength in housing permits and
housing starts, which should begin to favorably impact our results in the
second quarter.

The dramatic fall in consumer confidence, its lowest level in seven years, is
likely to reduce the growth target of our Lamson Home Products business segment
as evidenced by recent public statements by its largest customer, Home Depot.

The PVC Pipe business segment is highly sensitive to commodity raw material
pricing volatility. Currently, margins are very tight due to aggressive
competition trying to defend market share positions in a climate of soft
demand.

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The length and depth of the economic slowing are problematic to estimate, at
best. The spring months should bring some increased spending simply due to
seasonal factors. If the economy begins to respond to the interest rate
reductions over the next several months, we believe that some of the wait and
see conservatism will abate and more capital spending will begin to flow in
the second half of 2001.

We previously disclosed a projected sales level of $95 to $100 million for the
first quarter of 2001 which would likely result in an earnings range of 22
cents to 25 cents per diluted share. As a result of the factors described
above, we now project an $85 million to $90 million sales range resulting in
earnings of 3 cents to 8 cents per diluted share for the first quarter of 2001.
This revised earnings level reflects the reduction in plant operating rates,
particularly for high density polyethylene (HDPE) conduit that has resulted in
unabsorbed fixed costs creating higher manufacturing variances.

For the full year 2001, we have previously indicated a range of $460 million to
$470 million in net sales and an earnings range of $1.70 to $1.75 per diluted
share. While we anticipate that demand will begin to strengthen in the second
quarter, in light of the projected weaker first quarter described above and
continued competitive pricing, we are revising our projection for the full year
2001 to a net sales range of $430 million to $440 million and net earnings of
$1.00 to $1.10 per diluted share.

The volume levels currently being experienced, and those projected for the
balance of the year, effectively preclude the Company from sustaining growth in
earnings per share for 2001. We are disappointed that low volume will prevent
the Company from fully demonstrating the improved performance made possible by
continued progress in cost reduction and operating efficiency. Even at the
reduced volume, which is now projected, the EBITDA level for 2001 is projected
to exceed EBITDA for 2000 by $9 million. For 2001, the increase projected in
EBITDA is offset by the projected increase of $7.2 million in interest expense
resulting from the increased borrowings to finance the Companys two recent
acquisitions as well as projected increased charges of $5 million and $2
million for amortization of goodwill and income taxes, respectively.

Lamson & Sessions is a leading producer of thermoplastic enclosures, fittings,
wiring outlet boxes and conduit for the electrical, telecommunications,
consumer, power and wastewater markets. For additional information, please
visit our Web site at: www.lamson-sessions.com.

The above statements contain expectations that are forward-looking statements
that involve risks and uncertainties 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 resin pricing, (ii) the ability of the Company to pass through
raw material cost increases to its customers, (iii) maintaining stable level of
housing starts, telecom infrastructure spending, consumer confidence and
general construction trends, and (iv) further deterioration in the countrys
general economic condition affecting the markets for the Companys products.

Item 7(a).  Market Risk Disclosures

The following discussion about the Companys market risk disclosures involves
forward-looking statements. Actual results could differ materially from those
projected in the forward-looking statements. The Company is exposed to market
risk related to changes in interest rates and commodity prices for PVC and HDPE
resins. The Company does not use derivative financial instruments for
speculative or trading purposes.

Almost all of the Companys long-term debt obligations bear interest at a
variable rate. In order to mitigate the risk associated with interest rate
fluctuations, in January 2001, the Company entered into an interest rate swap
with a notional amount of $48.5 million and effectively fixed the variable rate
debt at 5.48% plus the Companys risk premium of 1.125% to 1.875%.The notional
amount is used to calculate the contractual cash flow to be exchanged and does
not represent exposure to credit loss.

These risks and others that are detailed in this Form 10-K and in the Companys
Annual Report must be considered by any investor or potential investor in the
Company.

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Item 8.  Financial Statements and Supplementary Data

CONSOLIDATED STATEMENTS OF INCOME

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|--------------------------------------------- |  | ------------ | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                              |  | Fiscal Years
|                                              |  |             
|(Dollars in thousands, except per share data) |  | 2000         |         | 1999 |  | 1998
|                                              |  |              |         |      |  |     
|NET SALES                                     |  | $            | 348,733 |      |  | $    | 291,381 |   |  | $ | 270,914 |  
|                                             
|                                             
|                                             
|                                             
|Cost of products sold                         |  |              | 260,114 |      |  |      | 229,981 |   |  |   | 214,410 |  
|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|GROSS PROFIT                                  |  |              | 88,619  |      |  |      | 61,400  |   |  |   | 56,504  |  
|                                             
|                                             
|                                             
|                                             
|Operating expenses                            |  |              | 54,132  |      |  |      | 48,054  |   |  |   | 47,584  |  
|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|OPERATING INCOME                              |  |              | 34,487  |      |  |      | 13,346  |   |  |   | 8,920   |  
|                                             
|                                             
|                                             
|                                             
|Interest expense                              |  |              | 4,539   |      |  |      | 3,558   |   |  |   | 4,341   |  
|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|INCOME BEFORE INCOME TAXES                    |  |              | 29,948  |      |  |      | 9,788   |   |  |   | 4,579   |  
|                                             
|                                             
|                                             
|                                             
|Income tax provision (Benefit)                |  |              | 8,500   |      |  |      | (9,000  | ) |  |   | (2,100  | )
|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|NET INCOME                                    |  | $            | 21,448  |      |  | $    | 18,788  |   |  | $ | 6,679   |  
|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|BASIC EARNINGS PER COMMON SHARE               |  | $            | 1.58    |      |  | $    | 1.40    |   |  | $ | 0.50    |  
|                                              |  |              |         |      |  |      |         |   |  |   |         |  
|DILUTED EARNINGS PER COMMON SHARE             |  | $            | 1.53    |      |  | $    | 1.39    |   |  | $ | 0.50    |  
|                                              |  |              |         |      |  |      |         |   |  |   |         |  

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |         |  
|----------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---- | ------------ | -------- | - | ---- | ------ | ------ | - | - | ------ | ------- | -
|                                                                              |                                                                                   |      | Fiscal Years
|                                                                              |                                                                                   |      |             
|(Dollars in thousands)                                                        |                                                                                   | 2000 |              | 1999     |   | 1998
|                                                                              |                                                                                   |      |              |          |   |     
|OPERATING ACTIVITIES                                                         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income                                                                    |                                                                                   | $    | 21,448       |          |   | $    | 18,788 |        |   | $ | 6,679  |        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Adjustments to reconcile net income to cash provided
by operating activities:
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Depreciation and amortization                                                     |      |              | 11,229   |   |      |        | 10,136 |   |   |        | 9,957   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Loss on disposal of assets                                                        |      |              |         |   |      |        | 516    |   |   |        |        |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Deferred income taxes                                                             |      |              | 6,903    |   |      |        | (9,000 | ) |   |        | (2,100  | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Net change in working capital accounts (excluding effect
of acquired businesses):
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Accounts receivable                                                               |      |              | 1,574    |   |      |        | (5,596 | ) |   |        | (2,129  | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Inventories                                                                       |      |              | (9,531   | ) |      |        | (3,399 | ) |   |        | 6,413   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Prepaid expenses and other                                                        |      |              | 1,217    |   |      |        | (2,041 | ) |   |        | 4,535   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Accounts payable, accrued expenses and other current liabilities                  |      |              | 1,924    |   |      |        | 10,629 |   |   |        | (10,391 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Other long-term items                                                             |      |              | (7,243   | ) |      |        | (7,835 | ) |   |        | (4,243  | )
|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |        
|CASH PROVIDED BY OPERATING ACTIVITIES                                         |                                                                                   |      | 27,521       |          |   |      | 12,198 |        |   |   | 8,721  |        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|INVESTING ACTIVITIES                                                         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Net additions to property, plant and equipment                                    |      |              | (11,085  | ) |      |        | (7,563 | ) |   |        | (4,546  | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Acquisitions, net of cash acquired                                                |      |              | (112,839 | ) |      |        |       |   |   |        |        |  
|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |        
|CASH USED IN INVESTING ACTIVITIES                                             |                                                                                   |      | (123,924     | )        |   |      | (7,563 | )      |   |   | (4,546 | )      
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|FINANCING ACTIVITIES                                                         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Long-term borrowings                                                              |      |              | 161,387  |   |      |        |       |   |   |        |        |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Retirement of previous credit agreement                                           |      |              | (42,296  | ) |      |        |       |   |   |        |        |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Payments on long-term borrowings and capital lease obligations                    |      |              | (25,330  | ) |      |        | (3,848 | ) |   |        | (3,816  | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Exercise of stock options                                                         |      |              | 1,370    |   |      |        |       |   |   |        | 168     |  
|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |        
|CASH PROVIDED (USED) BY FINANCING ACTIVITIES                                  |                                                                                   |      | 95,131       |          |   |      | (3,848 | )      |   |   | (3,648 | )      
|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |        
|(DECREASE) INCREASE IN CASH                                                   |                                                                                   |      | (1,272       | )        |   |      | 787    |        |   |   | 527    |        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Cash at beginning of year                                                     |                                                                                   |      | 2,724        |          |   |      | 1,937  |        |   |   | 1,410  |        
|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |        
|CASH AT END OF YEAR                                                           |                                                                                   | $    | 1,452        |          |   | $    | 2,724  |        |   | $ | 1,937  |        
|                                                                              |                                                                                   |      |              |          |   |      |        |        |   |   |        |        

See notes to consolidated financial statements.

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##### Table of Contents



CONSOLIDATED BALANCE SHEETS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

|                                        |                                                   |                                    |                      |         |        |         |         |        |        |         | 
|--------------------------------------- | ------------------------------------------------- | ---------------------------------- | -------------------- | ------- | ------ | ------- | ------- | ------ | ------ | ------- | 
|December 30, 2000 and January 1, 2000  
|(Dollars in thousands)                  |                                                   | 2000                               |                      | 1999   
|                                        |                                                   |                                    |                      |        
|ASSETS                                 
|                                       
|                                       
|                                       
|                                       
|CURRENT ASSETS                         
|                                       
|                                       
|                                       
|                                       
|                                        | Cash and cash equivalents                         |                                    | $                    | 1,452   |        |         | $       | 2,724  |       
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts receivable, net                          |                                    |                      | 56,659  |        |         |         | 40,676 |       
|                                       
|                                       
|                                       
|                                       
|                                        | Inventories, net                                  |                                    |                      |         |        |         |         |        |       
|                                       
|                                       
|                                       
|                                       
|                                        |                                                   | Finished goods and work-in-process |                      |         | 53,283 |         |         |        | 36,778 |        
|                                       
|                                       
|                                       
|                                       
|                                        |                                                   | Raw materials                      |                      |         | 6,290  |         |         |        | 5,783  |        
|                                        |                                                   |                                    |                      |         |        |         |         |        |       
|                                        |                                                   |                                    | 59,573               |         |        |         | 42,561  |       
|                                       
|                                       
|                                       
|                                       
|                                        |                                                   | Deferred tax assets                |                      |         | 13,211 |         |         |        | 4,963  |        
|                                       
|                                       
|                                       
|                                       
|                                        |                                                   | Prepaid expenses and other         |                      |         | 4,011  |         |         |        | 3,780  |        
|                                        |                                                   |                                    |                      |         |        |         |         |        |       
|                                        |                                                   |                                    | TOTAL CURRENT ASSETS |         |        | 134,906 |         |        |        | 94,704  | 
|                                       
|                                       
|                                       
|                                       
|PROPERTY, PLANT AND EQUIPMENT          
|                                       
|                                       
|                                       
|                                       
|                                        | Land                                              |                                    |                      | 5,717   |        |         |         | 3,588  |       
|                                       
|                                       
|                                       
|                                       
|                                        | Buildings                                         |                                    |                      | 22,983  |        |         |         | 22,251 |       
|                                       
|                                       
|                                       
|                                       
|                                        | Machinery and equipment                           |                                    |                      | 116,154 |        |         |         | 92,893 |       
|                                        |                                                   |                                    |                      |         |        |         |         |        |       
|                                        |                                                   |                                    | 144,854              |         |        |         | 118,732 |       
|                                       
|                                       
|                                       
|                                       
|                                        | Less allowances for depreciation and amortization |                                    |                      | 79,557  |        |         |         | 70,639 |       
|                                        |                                                   |                                    |                      |         |        |         |         |        |       
|Total Net Property, Plant and Equipment |                                                   |                                    | 65,297               |         |        |         | 48,093  |       
|                                       
|                                       
|                                       
|                                       
|GOODWILL                                |                                                   |                                    | 88,868               |         |        |         | 2,141   |       
|                                       
|                                       
|                                       
|                                       
|PENSION ASSETS                          |                                                   |                                    | 21,555               |         |        |         | 19,046  |       
|                                       
|                                       
|                                       
|                                       
|DEFERRED TAX ASSETS                     |                                                   |                                    |                     |         |        |         | 15,787  |       
|                                       
|                                       
|                                       
|                                       
|OTHER ASSETS                            |                                                   |                                    | 9,667                |         |        |         | 3,548   |       
|                                        |                                                   |                                    |                      |         |        |         |         |        |       
|                                        |                                                   |                                    | TOTAL ASSETS         |         | $      | 320,293 |         |        | $      | 183,319 | 
|                                        |                                                   |                                    |                      |         |        |         |         |        |       

See notes to consolidated financial statements.

14



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##### Table of Contents



CONSOLIDATED BALANCE SHEETS

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

|                                              |                                                            |                                                             |         |        |         |  |        |         |         | 
|--------------------------------------------- | ---------------------------------------------------------- | ----------------------------------------------------------- | ------- | ------ | ------- |  | ------ | ------- | ------- | 
|December 30, 2000 and January 1, 2000        
|(Dollars in thousands, except per share data) |                                                            | 2000                                                        |         | 1999  
|                                              |                                                            |                                                             |         |       
|LIABILITIES AND SHAREHOLDERS EQUITY         
|                                             
|                                             
|                                             
|                                             
|CURRENT LIABILITIES                          
|                                             
|                                             
|                                             
|                                             
|                                              | Accounts payable                                           |                                                             | $       | 28,572 |         |  | $      | 28,237  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Accrued compensation and benefits                          |                                                             |         | 10,034 |         |  |        | 9,184   |        
|                                             
|                                             
|                                             
|                                             
|                                              | Other accrued expenses                                     |                                                             |         | 25,499 |         |  |        | 11,269  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Taxes                                                      |                                                             |         | 4,383  |         |  |        | 3,645   |        
|                                             
|                                             
|                                             
|                                             
|                                              | Current maturities of long-term debt                       |                                                             |         | 8,168  |         |  |        | 3,888   |        
|                                              |                                                            |                                                             |         |        |         |  |        |         |        
|                                              |                                                            | TOTAL CURRENT LIABILITIES                                   |         |        | 76,656  |  |        |         | 56,223  | 
|                                             
|                                             
|                                             
|                                             
|LONG-TERM DEBT                                |                                                            |                                                             | 130,276 |        |         |  | 36,919 |        
|                                             
|                                             
|                                             
|                                             
|POST-RETIREMENT BENEFITS AND OTHER           
|                                             
|                                             
|                                             
|                                             
|                                              | LONG-TERM LIABILITIES                                      |                                                             | 27,332  |        |         |  | 26,808 |        
|                                             
|                                             
|                                             
|                                             
|SHAREHOLDERS EQUITY                         
|                                             
|                                             
|                                             
|                                             
|                                              | Common shares, without par value, stated
value of $.10 per
|                                              |                                                            | share, authorized 20,000,000
shares; outstanding 13,697,277
|                                              |                                                            | shares in 2000
and 13,453,251 shares in 1999                |         | 1,369  |         |  |        | 1,345   |        
|                                             
|                                             
|                                             
|                                             
|                                              | Other capital                                              |                                                             |         | 74,997 |         |  |        | 73,616  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Retained earnings (Deficit)                                |                                                             |         | 10,236 |         |  |        | (11,212 | )      
|                                             
|                                             
|                                             
|                                             
|                                              | Cumulative other comprehensive income (Loss)               |                                                             |         | (573   | )       |  |        | (380    | )      
|                                              |                                                            |                                                             |         |        |         |  |        |         |        
|Total Shareholders Equity                    |                                                            |                                                             | 86,029  |        |         |  | 63,369 |        
|                                              |                                                            |                                                             |         |        |         |  |        |         |        
|                                              |                                                            | TOTAL LIABILITIES & SHAREHOLDERS EQUITY                    |         | $      | 320,293 |  |        | $       | 183,319 | 
|                                              |                                                            |                                                             |         |        |         |  |        |         |        

See notes to consolidated financial statements.

15



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##### Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

(Dollars in thousands)

|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |      |  
|------------------------------------------------------- | ---------------------------- | - | ------ |  | ------- | - | --------- |  | ---------------- | - | --------------- | - | ------------- | - | --------------------------- | ---- | - | - | ---- | --- |  | - | ------ | ---- | -
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   | Cumulative Other           
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   | Comprehensive Income (Loss)
|                                                        |                              |   |        |  |         |   |           |  |                  |   | Retained        |   |               |   | Total                      
|                                                        |                              |   | Common |  | Other   |   | Earnings  |  | Foreign Currency |   | Minimum Pension |   | Shareholders'
|                                                        |                              |   | Shares |  | Capital |   | (Deficit) |  | Translation      |   | Liability       |   | Equity       
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |              
|Balance at January 3, 1998                              |                              | $ | 1,341  |  |         | $ | 73,409    |  |                  | $ | (36,679         | ) |               | $ | (279                        | )    |   | $ | (811 | )   |  | $ | 36,981 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Net income                                              |                              |   |        |  |         |   |           |  |                  |   | 6,679           |   |               |   |                             |      |   |   |      |     |  |   | 6,679  |     
|                                                       
|                                                       
|                                                       
|                                                       
|Other comprehensive income (Loss):                     
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Foreign currency translation |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             | (72  | ) |   |      |     |  |   |        | (72  | )
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Minimum pension liability    |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      | 375 |  |   |        | 375  |  
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     
|Total comprehensive income (Loss)                       |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   | 6,982  |     
|                                                       
|                                                       
|                                                       
|                                                       
|Issuance of 30,350 shares
under employee benefit plans  |                              |   | 3      |  |         |   | 165       |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   | 168    |     
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     
|Balance at January 2, 1999                              |                              | $ | 1,344  |  |         | $ | 73,574    |  |                  | $ | (30,000         | ) |               | $ | (351                        | )    |   | $ | (436 | )   |  | $ | 44,131 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Net income                                              |                              |   |        |  |         |   |           |  |                  |   | 18,788          |   |               |   |                             |      |   |   |      |     |  |   | 18,788 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Other comprehensive income:                            
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Foreign currency translation |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             | 28   |   |   |      |     |  |   |        | 28   |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Minimum pension liability    |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      | 379 |  |   |        | 379  |  
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     
|Total comprehensive income                              |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   | 19,195 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Issuance of 8,717 shares
under employee benefit plans   |                              |   | 1      |  |         |   | 42        |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   | 43     |     
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     
|Balance at January 1, 2000                              |                              | $ | 1,345  |  |         | $ | 73,616    |  |                  | $ | (11,212         | ) |               | $ | (323                        | )    |   | $ | (57  | )   |  | $ | 63,369 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Net income                                              |                              |   |        |  |         |   |           |  |                  |   | 21,448          |   |               |   |                             |      |   |   |      |     |  |   | 21,448 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Other comprehensive income:                            
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Foreign currency translation |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             | (207 | ) |   |      |     |  |   |        | (207 | )
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Minimum pension liability    |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      | 14  |  |   |        | 14   |  
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     
|Total comprehensive income                              |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   | 21,255 |     
|                                                       
|                                                       
|                                                       
|                                                       
|Issuance of 244,026 shares
under employee benefit plans |                              |   | 24     |  |         |   | 1,381     |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   | 1,405  |     
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     
|Balance at December 30, 2000                            |                              | $ | 1,369  |  |         | $ | 74,997    |  |                  | $ | 10,236          |   |               | $ | (530                        | )    |   | $ | (43  | )   |  | $ | 86,029 |     
|                                                        |                              |   |        |  |         |   |           |  |                  |   |                 |   |               |   |                             |      |   |   |      |     |  |   |        |     

See notes to consolidated financial statements.

16



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES

Three fiscal years ended December 30, 2000

NOTE AACCOUNTING POLICIES

Fiscal Year:The Companys fiscal year end is the Saturday closest to December
31.

Principles of Consolidation and Presentation:The consolidated financial
statements include the accounts of the Company and all domestic and foreign
subsidiaries after elimination of intercompany items. Certain 1999 and 1998
items have been reclassified to conform with the 2000 financial statement
presentation.

Recent Accounting Standard Changes:The Company will adopt Financial Accounting
Standards Board Statement No. 133 (SFAS 133), Accounting for Derivatives and
Hedging Activities,as amended, as of December 31, 2000, as required. SFAS 133
requires that all derivative instruments be recorded as either assets or
liabilities at fair value. Gains or losses resulting from changes in the values
of the derivative instruments may be recognized immediately or deferred
depending on the use of the derivative and whether it qualifies as a hedge. The
impact of complying with SFAS 133 will not have a material effect on the
Companys results of operations, financial position or cash flows.

Use of Estimates:The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents:The Company considers all investments with an
original maturity of three months or less on their acquisition date to be cash
equivalents.

Inventories:Inventories are valued at the lower of first-in, first-out (FIFO)
cost or market.

Financial Instruments:The Companys carrying value of its financial instruments
approximates fair value.

Property and Depreciation:Property, plant and equipment are recorded at
cost. For financial reporting purposes, depreciation and amortization are
computed principally by the straight-line method over the estimated useful
lives of the assets. Buildings are depreciated over periods up to 31.5
years. Machinery and equipment is depreciated over periods ranging from 3 years
to 15 years. Accelerated methods of depreciation are used for federal income tax
purposes.

Impairment of Long-Lived Assets:The Company evaluates the recoverability of
long-lived assets and the related estimated remaining lives at each balance
sheet date. The Company would record an impairment charge or change in useful
life whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable, measured using undiscounted cash flows, or the
useful life has changed.

Goodwill:Goodwill represents the cost in excess of fair value of net assets
acquired in business combinations accounted for by the purchase method and is
amortized on a straight line basis over the expected period of benefit ranging
from 5 to 20 years. Accumulated amortization of goodwill was $1,318,000 and
$451,000 at December 30, 2000 and January 1, 2000, respectively.

Income Taxes:The Company accounts for income taxes using the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes.Investment tax credits are recorded using the flow-through
method.

Revenue Recognition:Revenues are derived from sales to unaffiliated customers
and are recognized when products are shipped and title has transferred.

Research and Development Costs:Research and Development (R&D) costs consist of
Company-sponsored activities to develop new value-added products. R&D costs are
expensed as incurred and expenditures were $3,300,000, $3,800,000 and
$3,700,000 in 2000, 1999 and 1998, respectively. R&D costs are included in
operating expenses in the Consolidated Statements of Income.

Advertising Costs:Advertising costs are expensed as incurred and totaled
$3,000,000, $2,300,000 and $2,600,000 for 2000, 1999 and 1998, respectively.

17



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE BACQUISITIONS

On September 22, 2000 and December 15, 2000, the Company
acquired Pyramid for $45.4 million and Ameriduct for $63.8 million plus assumed debt of $3.9 million plus
transaction costs. In addition, pursuant to terms of non-competition agreements,
Lamson will pay three former Pyramid shareholders $6.5 million
over a five-year
period, including $1.5 million, which was paid at closing. The acquisitions were
funded through the Companys secured credit agreement. Both Pyramid and
Ameriduct are leading manufacturers of HDPE conduit
used in building telecommunications and utility infrastructure.

The acquisitions have been accounted for by the purchase method and,
accordingly, the operating results have been included in the Companys
consolidated financial statements and the Carlon business segment since the
respective dates of acquisition. The assets acquired and liabilities assumed
were recorded at estimated fair values. For financial statement purposes,
goodwill relating to these acquisitions is being amortized by the straight-line
method over 20 years. The following summary of the assets acquired and
liabilities assumed is based upon a preliminary purchase price allocation.

|                       |                     |   |         |         |  
|---------------------- | ------------------- | - | ------- | ------- | -
|(Dollars in thousands)
|                      
|                      
|                      
|                      
|Estimated fair values 
|                      
|                      
|                      
|                      
|                       | Assets acquired     |   | $       | 52,007  |  
|                      
|                      
|                      
|                      
|                       | Liabilities assumed |   |         | (22,898 | )
|                      
|                      
|                      
|                      
|Goodwill               |                     |   | 83,858  |        
|                       |                     |   |         |        
|Purchase price paid    |                     |   | 112,967 |        
|                      
|                      
|                      
|                      
|Less cash acquired     |                     |   | (128    | )      
|                       |                     |   |         |        
|Net cash paid          |                     | $ | 112,839 |        
|                       |                     |   |         |        

Unaudited pro forma results of operations as if the acquisition occurred as of
January 2, 2000 and January 1, 1999 follows. The pro forma results include
estimates and assumptions, which the Companys management believes are
reasonable. However, the pro forma results do not include any cost savings,
revenue enhancements or other effects of the planned integration of the
Company, Pyramid and Ameriduct and are not necessarily indicative of the
results which would have occurred if the business combination had been in
effect at the beginning of each of the years presented, or which may result in
the future.

|                           |  |                      |         |      |  |   |         | 
|-------------------------- |  | -------------------- | ------- | ---- |  | - | ------- | 
|                           |  | (Unaudited)         
|                           |  | Pro Forma Year Ended
|(Dollars in thousands)     |  | 2000                 |         | 1999
|                           |  |                      |         |     
|Net Sales                  |  | $                    | 437,206 |      |  | $ | 366,823 | 
|                          
|                          
|                          
|                          
|Net Income                 |  | $                    | 22,104  |      |  | $ | 14,652  | 
|                          
|                          
|                          
|                          
|Basic Earnings Per Share   |  | $                    | 1.63    |      |  | $ | 1.09    | 
|                           |  |                      |         |      |  |   |         | 
|Diluted Earnings Per Share |  | $                    | 1.58    |      |  | $ | 1.09    | 
|                           |  |                      |         |      |  |   |         | 

18



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE CLONG-TERM DEBT AND COMMITMENTS

Long-term debt consists of the following:

|                                   |          |      |              |        |  |   |        |        | 
|---------------------------------- | -------- | ---- | ------------ | ------ |  | - | ------ | ------ | 
|                                   |          |      | Fiscal Years
|                                   |          |      |             
|(Dollars in thousands)             |          | 2000 |              | 1999  
|                                   |          |      |              |       
|Secured Credit Agreement:         
|                                  
|                                  
|                                  
|                                  
|                                   | Term     |      | $            | 48,500 |  |   | $      | 8,250  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Revolver |      |              | 77,400 |  |   |        | 23,000 | 
|                                   |          |      |              |        |  |   |        |        | 
|                                   |          |      | 125,900      |        |  |   | 31,250 |       
|                                  
|                                  
|                                  
|                                  
|Industrial Revenue Bonds           |          |      | 11,315       |        |  |   | 8,070  |       
|                                  
|                                  
|                                  
|                                  
|Other                              |          |      | 1,229        |        |  |   | 1,487  |       
|                                   |          |      |              |        |  |   |        |        | 
|                                   |          |      | 138,444      |        |  |   | 40,807 |       
|                                  
|                                  
|                                  
|                                  
|Less amounts classified as current |          |      | 8,168        |        |  |   | 3,888  |       
|                                   |          |      |              |        |  |   |        |        | 
|                                   |          | $    | 130,276      |        |  | $ | 36,919 |       
|                                   |          |      |              |        |  |   |        |        | 

In August 2000, the Company completed the refinancing of its previous secured
credit agreement by entering into a new five-year, $125 million revolving
credit agreement with a consortium of banks led by Harris Trust of Chicago. In
December 2000, in conjunction with the acquisition of Ameriduct, the agreement
was amended and increased to a $194 million facility, consisting of $48.5
million in term debt and $145.5 million in a revolver. Beginning in the third
quarter of 2001, the term portion of this agreement requires principal payments
of $2 million at the end of the first and second quarter and $3.5 million at
the end of the third and fourth quarter of each year with a balloon payment in
August 2005.This agreement is secured by substantially all of the Companys
assets. Interest on this credit facility is at LIBOR plus 1.125% to
1.875%.The specific rate is determined based on the ratio of indebtedness to
earnings before interest, taxes, depreciation and amortization and is adjusted
quarterly. The rate at December 30, 2000 is 8.42%.In addition to amounts
borrowed, letters of credit related to Industrial Revenue Bond financings and
other contractual obligations total approximately $17,700,000 under the
agreement. The Companys credit agreement contains various restrictive covenants
pertaining to maintenance of net worth, certain financial ratios and limits the
amount of stock repurchases and dividend payments.

The Companys Industrial Revenue Bond financings include several issues due in
annual installments from 2000 through 2023 with interest at variable rates. The
weighted average rate for these bonds at December 30, 2000 was 4.7%.The Company
maintains a letter of credit related to one of the Industrial Revenue Bond
financings of approximately $1,800,000 with a bank.

The Companys headquarters is subject to a mortgage payable in equal monthly
installments through 2003 with interest at 8.625%.

In January 2001, the Company entered into an interest rate swap with the bank
group with a notional amount of $48.5 million which declines in conjunction
with the term debt maturities, fixing the interest rate at 5.48% plus the
Companys risk premium of 1.125% to 1.875%.

The aggregate minimum combined maturities of long-term debt for the years 2002
through 2005 are approximately $12,451,000, $12,454,000, $12,060,000 and
$87,060,000 respectively, with $6,251,000 due thereafter.

Interest paid was $4,026,000, $3,679,000 and $4,253,000 in 2000, 1999 and 1998,
respectively.

Rental expense was $5,861,000, $4,908,000 and $4,092,000 in 2000, 1999 and
1998, respectively. Aggregate future minimum payments related to non-cancelable
operating leases with initial or remaining terms of one year or more for the
years 2001 through 2005 are approximately $3,840,000, $3,374,000, $2,836,000,
$2,303,000 and $1,687,000, respectively, with $6,116,000 due thereafter.

19



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE DPENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

The Company sponsors several qualified and nonqualified pension plans and other
post-retirement benefit plans for its current and former employees. The
following table provides a reconciliation of the changes in the benefit
obligations and fair value of plan assets over each of the two years in the
period ended December 30, 2000 and a statement of the funded status at both
years end:

|                                |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                |  | Pension Benefits |        | Other Benefits
|(Dollars in thousands)          |  | 2000             |        | 1999           |  | 2000 |        | 1999
|                                |  |                  |        |                |  |      |        |     
|Change in Benefit Obligation   
|                               
|                               
|                               
|                               
|Obligation at beginning of year |  | $                | 74,079 |                |  | $    | 83,151 |      |  | $ | 14,040 |   |  | $ | 18,403 |  
|                               
|                               
|                               
|                               
|Service cost                    |  |                  | 886    |                |  |      | 1,277  |      |  |   | 13     |   |  |   | 329    |  
|                               
|                               
|                               
|                               
|Interest cost                   |  |                  | 5,300  |                |  |      | 5,179  |      |  |   | 980    |   |  |   | 1,132  |  
|                               
|                               
|                               
|                               
|Plan participants contribution |  |                  |       |                |  |      |       |      |  |   | 96     |   |  |   | 100    |  
|                               
|                               
|                               
|                               
|Plan amendment                  |  |                  | 76     |                |  |      |       |      |  |   |       |   |  |   | (2,630 | )
|                               
|                               
|                               
|                               
|Actuarial (gain) loss           |  |                  | 163    |                |  |      | (8,679 | )    |  |   | (23    | ) |  |   | (1,304 | )
|                               
|                               
|                               
|                               
|Benefits paid                   |  |                  | (6,705 | )              |  |      | (6,849 | )    |  |   | (2,012 | ) |  |   | (1,990 | )
|                                |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|Obligation at end of year       |  | $                | 73,799 |                |  | $    | 74,079 |      |  | $ | 13,094 |   |  | $ | 14,040 |  
|                                |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  

Effective January 1, 2000, the Company amended its salaried associates
retirement benefits program by phasing out certain medical benefits.

|                                               |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                               |  | Pension Benefits |        | Other Benefits
|(Dollars in thousands)                         |  | 2000             |        | 1999           |  | 2000 |        | 1999
|                                               |  |                  |        |                |  |      |        |     
|Change in Plan Assets                         
|                                              
|                                              
|                                              
|                                              
|Fair value of plan assets at beginning of year |  | $                | 88,679 |                |  | $    | 83,899 |     
|                                              
|                                              
|                                              
|                                              
|Actual return on plan assets                   |  |                  | 7,684  |                |  |      | 9,210  |     
|                                              
|                                              
|                                              
|                                              
|Employer contributions                         |  |                  | 317    |                |  |      | 2,419  |      |  | $ | 1,916  |   |  | $ | 1,890  |  
|                                              
|                                              
|                                              
|                                              
|Plan participants contributions               |  |                  |       |                |  |      |       |      |  |   | 96     |   |  |   | 100    |  
|                                              
|                                              
|                                              
|                                              
|Benefits paid                                  |  |                  | (6,705 | )              |  |      | (6,849 | )    |  |   | (2,012 | ) |  |   | (1,990 | )
|                                               |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  
|Fair value of plan assets at end of year       |  | $                | 89,975 |                |  | $    | 88,679 |      |  | $ |       |   |  | $ |       |  
|                                               |  |                  |        |                |  |      |        |      |  |   |        |   |  |   |        |  

Plan assets include 760,856 shares of the Companys Common Stock with a fair
market value at December 30, 2000 of $8 million and 682,756 common shares
with a fair value of $3.3 million at January 1, 2000.

|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|-------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                       |  | Pension Benefits |        | Other Benefits
|(Dollars in thousands)                 |  | 2000             |        | 1999           |  | 2000 |        | 1999
|                                       |  |                  |        |                |  |      |        |     
|Funded Status                         
|                                      
|                                      
|                                      
|                                      
|Fund status at end of year             |  | $                | 16,176 |                |  | $    | 14,600 |      |  | $ | (13,094 | ) |  | $ | (14,040 | )
|                                      
|                                      
|                                      
|                                      
|Unrecognized actuarial loss (gain)     |  |                  | 2,219  |                |  |      | 1,565  |      |  |   | (2,342  | ) |  |   | (2,517  | )
|                                      
|                                      
|                                      
|                                      
|Unrecognized transition (asset)        |  |                  | (1,252 | )              |  |      | (1,340 | )    |  |   |        |   |  |   |        |  
|                                      
|                                      
|                                      
|                                      
|Unrecognized prior service cost (gain) |  |                  | 246    |                |  |      | 230    |      |  |   | (2,433  | ) |  |   | (2,630  | )
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|Net amount recognized at end of year   |  | $                | 17,389 |                |  | $    | 15,055 |      |  | $ | (17,869 | ) |  | $ | (19,187 | )
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  

20



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE DPENSION AND OTHER POST-RETIREMENT BENEFIT PLANSContinued

The pension benefits table above provides information relating to the funded
status of all defined benefit pension plans on an aggregated basis. The
projected benefit obligation, accumulated benefit obligation, and fair value of
plan assets for the pension plans with accumulated benefit obligations in
excess of plan assets were $4.4 million, $4.1 million and $0,
respectively, as of December 30, 2000 and $4.2 million, $3.9 million and $0,
respectively, as of January 1, 2000.

The following table provides the amounts recognized in the consolidated balance
sheets for both years:

|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|-------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                       |  | Pension Benefits |        | Other Benefits
|(Dollars in thousands)                 |  | 2000             |        | 1999           |  | 2000 |        | 1999
|                                       |  |                  |        |                |  |      |        |     
|Prepaid benefit cost                   |  | $                | 21,555 |                |  | $    | 19,046 |     
|                                      
|                                      
|                                      
|                                      
|Accrued benefit liability              |  |                  | (4,280 | )              |  |      | (4,085 | )    |  | $ | (17,869 | ) |  | $ | (19,187 | )
|                                      
|                                      
|                                      
|                                      
|Intangible asset                       |  |                  | 71     |                |  |      | 37     |      |  |   |        |   |  |   |        |  
|                                      
|                                      
|                                      
|                                      
|Accumulated other comprehensive income |  |                  | 43     |                |  |      | 57     |      |  |   |        |   |  |   |        |  
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  
|                                       |  | $                | 17,389 |                |  | $    | 15,055 |      |  | $ | (17,869 | ) |  | $ | (19,187 | )
|                                       |  |                  |        |                |  |      |        |      |  |   |         |   |  |   |         |  

The assumptions used in the measurement of the Companys benefit obligations at
January 1, 2001 and January 1, 2000 were:

|                               |  |                  |     |                |  |      |     |      |  |  |     |   |  |  |     |  
|------------------------------ |  | ---------------- | --- | -------------- |  | ---- | --- | ---- |  |  | --- | - |  |  | --- | -
|                               |  | Pension Benefits |     | Other Benefits
|                               |  | 2000             |     | 1999           |  | 2000 |     | 1999
|                               |  |                  |     |                |  |      |     |     
|Discount rate                  |  |                  | 7.5 | %              |  |      | 7.5 | %    |  |  | 7.5 | % |  |  | 7.5 | %
|                              
|                              
|                              
|                              
|Expected return on plan assets |  |                  | 9.5 | %              |  |      | 9.5 | %   
|                              
|                              
|                              
|                              
|Rate of salary increase        |  |                  | 5.0 | %              |  |      | 5.0 | %   

For measurement purposes, an 8.8% average health care cost trend rate was used
for 2001 (9% in 2000). The rate is assumed to decline gradually each year to an
ultimate rate of 5.5% in 2007 and thereafter. A 1% change in assumed health care
cost trend rates would have the following effects:

|                                               |  |             |     |             |  |   |      |  
|---------------------------------------------- |  | ----------- | --- | ----------- |  | - | ---- | -
|(Dollars in thousands)                         |  | 1% Increase |     | 1% Decrease
|                                               |  |             |     |            
|Net periodic benefit cost                      |  | $           | 74  |             |  | $ | (67  | )
|                                              
|                                              
|                                              
|                                              
|Accumulated post-retirement benefit obligation |  | $           | 907 |             |  | $ | (817 | )

21



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE DPENSION AND OTHER POST-RETIREMENT BENEFIT PLANSContinued

The components of net periodic benefit cost (income) are as follows:

|                       |                               |      |                  |        |                |      |      |        |   |      |     |        |   |   |     |      |   |   |       |       |   |   |       |       |  
|---------------------- | ----------------------------- | ---- | ---------------- | ------ | -------------- | ---- | ---- | ------ | - | ---- | --- | ------ | - | - | --- | ---- | - | - | ----- | ----- | - | - | ----- | ----- | -
|                       |                               |      | Pension Benefits |        | Other Benefits
|(Dollars in thousands) |                               | 2000 |                  | 1999   |                | 1998 |      | 2000   |   | 1999 |     | 1998  
|                       |                               |      |                  |        |                |      |      |        |   |      |     |       
|                       | Service cost                  |      | $                | 886    |                |      | $    | 1,277  |   |      | $   | 1,164  |   |   | $   | 13   |   |   | $     | 329   |   |   | $     | 289   |  
|                      
|                      
|                      
|                      
|                       | Interest cost                 |      |                  | 5,300  |                |      |      | 5,179  |   |      |     | 5,306  |   |   |     | 980  |   |   |       | 1,132 |   |   |       | 1,206 |  
|                      
|                      
|                      
|                      
|                       | Expected return on assets     |      |                  | (8,111 | )              |      |      | (7,660 | ) |      |     | (7,086 | ) |   |     |     |   |   |       |      |   |   |       |      |  
|                      
|                      
|                      
|                      
|                       | Net amortization and deferral |      |                  | (93    | )              |      |      | 193    |   |      |     | 168    |   |   |     | (394 | ) |   |       | (115  | ) |   |       | (149  | )
|                      
|                      
|                      
|                      
|                       | Defined contribution plans    |      |                  | 1,147  |                |      |      | 709    |   |      |     | 853    |   |   |     |     |   |   |       |      |   |   |       |      |  
|                       |                               |      |                  |        |                |      |      |        |   |      |     |        |   |   |     |      |   |   |       |       |   |   |       |       |  
|                       |                               | $    | (871             | )      |                | $    | (302 | )      |   | $    | 405 |        |   | $ | 599 |      |   | $ | 1,346 |       |   | $ | 1,346 |      
|                       |                               |      |                  |        |                |      |      |        |   |      |     |        |   |   |     |      |   |   |       |       |   |   |       |       |  

In addition to the defined benefit plans described above, the Company also
sponsors a defined contribution plan which covers substantially all full-time
associates. The Companys matching contribution is a minimum of 50% of voluntary
employee contributions of up to 6% of wages.

The Company remains contingently liable for certain post-retirement benefits of
certain businesses previously sold.

NOTE ELITIGATION

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-judgment
interest of approximately $1.5 million. The court declined to increase the
damages with respect to the willfulness finding. The Company is pursuing 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 affect on the Companys financial position, cash flows and
results of operations. It is the Companys understanding that the appeal process
may require a one-to-two year period.

The Company has filed a suit to recover damages related to the termination of
the agreement to sell its PVC Pipe business. This matter is scheduled for trial
in March 2001.It is premature to estimate the timing for a resolution of this
suit.

The Company is also a party to various other claims and matters of litigation
incidental to the normal course of its business. Management believes that the
final resolution of these matters will not have a material adverse affect on
the Companys financial position, cash flows or results of operations.

NOTE FENVIRONMENTAL

The Company believes that its current operations and its use of property, plant
and equipment conform in all material respects to applicable environmental laws
and regulations presently in effect. The Company has facilities at numerous
geographic locations, which are subject to a range of federal, state and local
environmental laws and regulations. Compliance with these laws has, and will,
require expenditures on a continuing basis.

During the second quarter of 1999, the Company reached a settlement on
litigation involving environmental matters at a property sold by the Company in
1981 whereby the Company agreed to incur costs of certain remediation
activities which will occur over several years. The settlement did not have a
material impact on the Companys financial position or results of operations.

22



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE GCOMMON, PREFERRED, PREFERENCE STOCK

The Company has authorized 1,200,000 and 3,000,000 shares of Serial Preferred
and Preference Stock, respectively, none of which is issued or outstanding at
December 30, 2000. The Company has reserved for issuance 200,000 shares of
Cumulative Redeemable Serial Preference Stock, Series II, without par value
(Series II Preference Stock), which relates to the Rights Agreement, dated as
of September 8, 1998, between the Company and National City Bank (the Rights
Agreement).

Under the Companys Rights Agreement, each shareholder has the right to
purchase from the Company one one-hundredth of a share of the Series II
Preference Stock, subject to adjustment, upon payment of an exercise price of
$44.75.The Rights will become exercisable only after a person or group acquires
beneficial ownership of or commences a tender or exchange offer for 15% or more
of the Companys Common Shares. Rights held by persons who exceed that threshold
will be void. In the event that a person or group acquires beneficial ownership
of 15% or more of the Companys Common Shares, or a 15% shareholder merges into
or with the Company or engages in one of a number of self-dealing transactions,
each Right would entitle its holder to purchase a number of the Companys
Common Shares (or, in certain cases, common stock of an acquirer) having a
market value of twice the Rights exercise price.

The Companys Board of Directors may, at its option, redeem all Rights for
$0.01 per Right, generally at any time prior to the Rights becoming
exercisable. The Rights will expire on September 20, 2008, unless earlier
redeemed, exchanged or amended by the Board of Directors.

NOTE HSTOCK COMPENSATION PLANS

Under the 1994 Nonemployee Directors Stock Option Plan, the Company is
authorized to issue 160,000 common shares in non-qualified stock options. The
stock options become exercisable one year after date of grant and expire at the
end of ten years. At December 30, 2000, a total of 87,000 shares were available
for future grant of stock options under this Plan.

On May 5, 1998, the Companys 1988 Incentive Equity Performance Plan expired. At
December 30, 2000, there were options outstanding under the Plan representing
1,107,350 shares of the Companys Common Stock. The options outstanding under
the Plan may be exercised, pursuant to the terms of the stock option
agreements, through April 20, 2008.

Under the 1998 Incentive Equity Plan, the Company is authorized to issue
1,300,000 incentive stock options (ISOs), non-qualified stock options, stock
appreciation rights (SARs) and restricted or deferred stock. Stock options
generally become exercisable, in part, one year after date of grant and expire
at the end of ten years. At December 30, 2000, under this Plan, a total of
567,425 shares were available for future grant.

23



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE HSTOCK COMPENSATION PLANSContinued

A summary of the status of the Companys three stock compensation plans as of
December 30, 2000, January 1, 2000 and January 2, 1999, and changes during the
respective years then ended, is presented below:

|                                                               |  |        |       |                |  |           |      |                |  |        |       |                |  |   |      |  |  |           |       |   |  |   |      | 
|-------------------------------------------------------------- |  | ------ | ----- | -------------- |  | --------- | ---- | -------------- |  | ------ | ----- | -------------- |  | - | ---- |  |  | --------- | ----- | - |  | - | ---- | 
|                                                               |  | 2000   |       | 1999           |  | 1998     
|                                                               |  |        |       |                |  |          
|                                                               |  |        |       |                |  | Weighted- |      |                |  |        |       | Weighted-      |  |   |      |  |  | Weighted-
|                                                               |  |        |       |                |  | Average   |      |                |  |        |       | Average        |  |   |      |  |  | Average  
|(Shares in thousands)                                          |  | Shares |       | Exercise Price |  | Shares    |      | Exercise Price |  | Shares |       | Exercise Price
|                                                               |  |        |       |                |  |           |      |                |  |        |       |               
|Outstanding at beginning of year                               |  |        | 1,712 |                |  | $         | 6.34 |                |  |        | 1,475 |                |  | $ | 6.73 |  |  |           | 1,179 |   |  | $ | 6.83 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Granted                                                        |  |        | 454   |                |  |           | 7.60 |                |  |        | 341   |                |  |   | 5.00 |  |  |           | 461   |   |  |   | 6.91 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Exercised                                                      |  |        | (243  | )              |  |           | 5.97 |                |  |        |      |                |  |   |     |  |  |           | (30   | ) |  |   | 5.54 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Forfeited                                                      |  |        | (49   | )              |  |           | 6.39 |                |  |        | (104  | )              |  |   | 7.66 |  |  |           | (135  | ) |  |   | 8.47 | 
|                                                               |  |        |       |                |  |           |      |                |  |        |       |                |  |   |      |  |  |           |       |   |  |   |      | 
|Outstanding at end of year                                     |  |        | 1,874 |                |  | $         | 6.69 |                |  |        | 1,712 |                |  | $ | 6.34 |  |  |           | 1,475 |   |  | $ | 6.73 | 
|                                                               |  |        |       |                |  |           |      |                |  |        |       |                |  |   |      |  |  |           |       |   |  |   |      | 
|Options exercisable at year-end                                |  |        | 1,197 |                |  |           |      |                |  |        | 1,118 |                |  |   |      |  |  |           | 899   |  
|                                                              
|                                                              
|                                                              
|                                                              
|Weighted-average fair value of options
granted during the year |  |        |       |                |  | $         | 4.01 |                |  |        |       |                |  | $ | 1.85 |  |  |           |       |   |  | $ | 2.55 | 

The following table summarizes information about options outstanding at
December 30, 2000:

|                |       |             |  |                        |           |                     |  |                  |      |                  |  |   |       |  |  |  |           |  |  |   |       | 
|--------------- | ----- | ----------- |  | ---------------------- | --------- | ------------------- |  | ---------------- | ---- | ---------------- |  | - | ----- |  |  |  | --------- |  |  | - | ----- | 
|                |       |             |  | Options Outstanding    |           | Options Exercisable
|                |       |             |  |                        |           |                    
|                |       |             |  |                        |           |                     |  | Weighted-Average
|Range of        |       | Shares      |  | Remaining              |           | Weighted-Average    |  | Shares           |      | Weighted-Average
|Exercise Prices |       | at 12/30/00 |  | Contractual Life (Yrs) |           | Exercise Price      |  | at 12/30/00      |      | Exercise Price  
|                |       |             |  |                        |           |                     |  |                  |      |                 
|$               | 0-5   |             |  |                        | 353,300   |                     |  |                  | 6.47 |                  |  | $ | 4.04  |  |  |  | 173,798   |  |  | $ | 4.71  | 
|               
|               
|               
|               
|                | 5-10  |             |  |                        | 1,449,350 |                     |  |                  | 6.01 |                  |  |   | 6.82  |  |  |  | 1,012,716 |  |  |   | 6.85  | 
|               
|               
|               
|               
|                | 10-15 |             |  |                        | 46,500    |                     |  |                  | 8.92 |                  |  |   | 10.95 |  |  |  | 10,500    |  |  |   | 10.23 | 
|               
|               
|               
|               
|                | 15-20 |             |  |                        | 25,000    |                     |  |                  | 9.67 |                  |  |   | 16.74 |  |  |  |          |  |  |   |      | 

The Company applies Accounting Principles Board Opinion No. 25 Accounting for
Stock Issued to Employees and related interpretations in accounting for its
stock-based plans. Accordingly, compensation cost has not been recognized for
the fixed stock-based compensation plans. Had compensation expense been
recognized following SFAS No. 123, Accounting for Stock-Based Compensation,
the Companys pro forma net income and earnings per share would have been as
follows:

|                                              |  |  |             |  |  |              |        |      |  |      |        |  |  |   |       | 
|--------------------------------------------- |  |  | ----------- |  |  | ------------ | ------ | ---- |  | ---- | ------ |  |  | - | ----- | 
|                                              |  |  |             |  |  | Fiscal Years
|                                              |  |  |             |  |  |             
|(Dollars in thousands, except per share data) |  |  |             |  |  | 2000         |        | 1999 |  | 1998
|                                              |  |  |             |  |  |              |        |      |  |     
|Net income                                    |  |  | As reported |  |  | $            | 21,448 |      |  | $    | 18,788 |  |  | $ | 6,679 | 
|                                             
|                                             
|                                             
|                                             
|                                              |  |  | Pro forma   |  |  |              | 20,941 |      |  |      | 18,322 |  |  |   | 6,230 | 
|                                             
|                                             
|                                             
|                                             
|Basic earnings per share                      |  |  | As reported |  |  | $            | 1.58   |      |  | $    | 1.40   |  |  | $ | 0.50  | 
|                                             
|                                             
|                                             
|                                             
|                                              |  |  | Pro forma   |  |  |              | 1.54   |      |  |      | 1.36   |  |  |   | 0.46  | 
|                                             
|                                             
|                                             
|                                             
|Diluted earnings per share                    |  |  | As reported |  |  | $            | 1.53   |      |  | $    | 1.39   |  |  | $ | 0.50  | 
|                                             
|                                             
|                                             
|                                             
|                                              |  |  | Pro forma   |  |  |              | 1.50   |      |  |      | 1.36   |  |  |   | 0.46  | 

24



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE HSTOCK COMPENSATION PLANSContinued

For pro forma calculations, the fair value of each stock option grant is
estimated on the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions used for grants:

|                         |  |      |         |      |  |      |         |   |  |  |         |  
|------------------------ |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                         |  | 2000 |         | 1999 |  | 1998
|                         |  |      |         |      |  |     
|Expected volatility      |  |      | 52.2    | %    |  |      | 29.8    | % |  |  | 30.0    | %
|                        
|                        
|                        
|                        
|Risk-free interest rates |  |      | 6.05    | %    |  |      | 5.74    | % |  |  | 5.62    | %
|                        
|                        
|                        
|                        
|Average expected life    |  |      | 5 years |      |  |      | 5 years |   |  |  | 5 years |  

NOTE IEARNINGS PER SHARE CALCULATION

The following table sets forth the computation of basic and diluted earnings
per share:

|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |        | 
|-------------------------------------------------------- | -------------------------------------------------------- | ---- | ------------ | ------ |  | ---- | - | ------ |  |  | - | ------ | 
|                                                         |                                                          |      | Fiscal Years
|                                                         |                                                          |      |             
|(Dollars and shares in thousands, except per share data) |                                                          | 2000 |              | 1999   |  | 1998
|                                                         |                                                          |      |              |        |  |     
|Basic Earnings Per Share Computation                    
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Net Income                                               |      | $            | 21,448 |  |      | $ | 18,788 |  |  | $ | 6,679  | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Average Common Shares Outstanding                        |      |              | 13,570 |  |      |   | 13,448 |  |  |   | 13,433 | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Basic Earnings Per Share                                 |      | $            | 1.58   |  |      | $ | 1.40   |  |  | $ | 0.50   | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|Diluted Earnings Per Share Computation                  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Net Income                                               |      | $            | 21,448 |  |      | $ | 18,788 |  |  | $ | 6,679  | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Basic Shares Outstanding                                 |      |              | 13,570 |  |      |   | 13,448 |  |  |   | 13,433 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Stock Options Calculated Under the Treasury Stock Method |      |              | 419    |  |      |   | 34     |  |  |   | 55     | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Total Shares                                             |      |              | 13,989 |  |      |   | 13,482 |  |  |   | 13,488 | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       
|                                                         | Diluted Earnings Per Share                               |      | $            | 1.53   |  |      | $ | 1.39   |  |  | $ | 0.50   | 
|                                                         |                                                          |      |              |        |  |      |   |        |  |  |   |       

NOTE JINCOME TAXES

Components of income tax provision (benefit) reflected in the consolidated
statements of income are as follows:

|                       |                 |      |       |       |   |      |        |        |   |   |        |        |  
|---------------------- | --------------- | ---- | ----- | ----- | - | ---- | ------ | ------ | - | - | ------ | ------ | -
|(Dollars in thousands) |                 | 2000 |       | 1999  |   | 1998
|                       |                 |      |       |       |   |     
|Current:              
|                      
|                      
|                      
|                      
|                       | Federal         |      | $     | 983   |   |      | $      |       |   |   | $      |       |  
|                      
|                      
|                      
|                      
|                       | State and local |      |       | 614   |   |      |        |       |   |   |        |       |  
|                       |                 |      |       |       |   |      |        |        |   |   |        |        |  
|                       |                 |      | 1,597 |       |   |      |       |        |   |   |       |       
|                      
|                      
|                      
|                      
|Deferred:             
|                      
|                      
|                      
|                      
|                       | Federal         |      |       | 7,650 |   |      |        | (9,000 | ) |   |        | (2,100 | )
|                      
|                      
|                      
|                      
|                       | State and local |      |       | (747  | ) |      |        |       |   |   |        |       |  
|                       |                 |      |       |       |   |      |        |        |   |   |        |        |  
|                       |                 |      | 6,903 |       |   |      | (9,000 | )      |   |   | (2,100 | )     
|                       |                 |      |       |       |   |      |        |        |   |   |        |        |  
|Total                  |                 | $    | 8,500 |       |   | $    | (9,000 | )      |   | $ | (2,100 | )     
|                       |                 |      |       |       |   |      |        |        |   |   |        |        |  

25



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE JINCOME TAXESContinued

The components of deferred taxes included in the balance sheets as of December
30, 2000 and January 1, 2000 are as follows:

|                              |                                                      |      |              |        |  |   |        |        |  
|----------------------------- | ---------------------------------------------------- | ---- | ------------ | ------ |  | - | ------ | ------ | -
|                              |                                                      |      | Fiscal Years
|                              |                                                      |      |             
|(Dollars in thousands)        |                                                      | 2000 |              | 1999  
|                              |                                                      |      |              |       
|Deferred tax assets:         
|                             
|                             
|                             
|                             
|                              | Net operating loss carryforwards (Federal & State)   |      | $            | 7,760  |  |   | $      | 18,700 |  
|                             
|                             
|                             
|                             
|                              | Other accruals, credits and reserves                 |      |              | 8,062  |  |   |        | 6,300  |  
|                             
|                             
|                             
|                             
|                              | General business and alternative minimum tax credits |      |              | 3,485  |  |   |        | 2,600  |  
|                             
|                             
|                             
|                             
|                              | Post-retirement benefits other than pensions         |      |              | 6,254  |  |   |        | 7,000  |  
|                              |                                                      |      |              |        |  |   |        |       
|                              |                                                      |      | 25,561       |        |  |   | 34,600 |       
|                             
|                             
|                             
|                             
|                              | Less: valuation allowance                            |      |              |       |  |   |        | (2,600 | )
|                              |                                                      |      |              |        |  |   |        |       
|                              | Total deferred tax assets                            |      |              | 25,561 |  |   |        | 32,000 |  
|                             
|                             
|                             
|                             
|Deferred tax liabilities:    
|                             
|                             
|                             
|                             
|                              | Tax in excess of book depreciation                   |      |              | 7,232  |  |   |        | 5,900  |  
|                             
|                             
|                             
|                             
|                              | Pensions                                             |      |              | 6,070  |  |   |        | 5,350  |  
|                              |                                                      |      |              |        |  |   |        |       
|                              | Total deferred tax liabilities                       |      |              | 13,302 |  |   |        | 11,250 |  
|                              |                                                      |      |              |        |  |   |        |       
|Total net deferred tax assets |                                                      | $    | 12,259       |        |  | $ | 20,750 |       
|                              |                                                      |      |              |        |  |   |        |       

The valuation allowance for net deferred tax assets decreased by $2,600,000 and
$11,900,000 in 2000 and 1999, respectively. The reduction in 2000 was primarily
the result of utilization of state net operating losses and the reversal of
$1,700,000 of the valuation allowance associated with state net operating
losses and general business tax credits. The reversal of valuation allowance in
2000 and 1999 was based on (i) continued improved operating results in 2000 and
1999 and, (ii) projected operating results for 2001 and thereafter. The Company
has available federal net operating loss carryforwards totaling approximately
$21.2 million, which expire in the years 2008 to 2012.The Company also has
available general business tax credit carryforwards of
$1.5 million, which
expire through 2018 and alternative minimum tax credit carryforwards of
approximately $2 million, which may be carried forward indefinitely.

The provision for income taxes is different than the amount computed using the
applicable statutory federal income tax rate with the differences summarized
below:

|                               |                               |      |              |        |   |      |        |         |   |   |        |        |  
|------------------------------ | ----------------------------- | ---- | ------------ | ------ | - | ---- | ------ | ------- | - | - | ------ | ------ | -
|                               |                               |      | Fiscal Years
|                               |                               |      |             
|(Dollars in thousands)         |                               | 2000 |              | 1999   |   | 1998
|                               |                               |      |              |        |   |     
|Tax expense at statutory rates |                               | $    | 10,482       |        |   | $    | 3,426  |         |   | $ | 1,603  |       
|                              
|                              
|                              
|                              
|Adjustment due to:            
|                              
|                              
|                              
|                              
|                               | Change in valuation allowance |      |              | (2,600 | ) |      |        | (11,900 | ) |   |        | (4,300 | )
|                              
|                              
|                              
|                              
|                               | Other                         |      |              | 618    |   |      |        | (526    | ) |   |        | 597    |  
|                               |                               |      |              |        |   |      |        |         |   |   |        |       
|                               |                               | $    | 8,500        |        |   | $    | (9,000 | )       |   | $ | (2,100 | )     
|                               |                               |      |              |        |   |      |        |         |   |   |        |       

Income taxes paid in 2000 and 1998 were $904,000 and $11,000, respectively. In
1999 the Company received an income tax refund of $78,000.

26



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE K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,
telecommunications 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 or HDPE conduit designed to protect underground fiber optic cables
allowing future cabling expansion and flexible conduit used inside buildings
to protect communications cable. The two recent acquisitions of
Pyramid and Ameriduct are included as part of the Carlon segment.

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 outlet boxes, liquidtight conduit,
electrical fittings, chimes and lighting controls.

PVC Pipe:This business segment supplies electrical, power and communications
conduit to the electrical distribution, telecommunications, consumer and power
utility markets. The 1/2 inch to 6 inch electrical and telecommunications
conduit is made from PVC and is used to protect wire or fiber optic cables
supporting the infrastructure of our power or telecommunications systems. In
addition, this segment provides closed profile engineered sewer pipe ranging
in diameter from 21 inches to 54 inches to various municipalities and private
contractors for drainage systems in new construction and rehabilitation
markets.

27



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE KBUSINESS SEGMENTSContinued

|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|(Dollars in thousands)                                                                      |  | 2000 |         | 1999 |  | 1998
|                                                                                            |  |      |         |      |  |     
|Net Sales                                                                                  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Carlon                                                                                      |  | $    | 142,979 |      |  | $    | 120,975 |   |  | $ | 109,458 |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Lamson Home Products                                                                        |  |      | 63,351  |      |  |      | 53,401  |   |  |   | 50,348  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|PVC Pipe                                                                                    |  |      | 142,403 |      |  |      | 117,005 |   |  |   | 111,108 |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                            |  | $    | 348,733 |      |  | $    | 291,381 |   |  | $ | 270,914 |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|Operating Income (Loss)                                                                    
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Carlon                                                                                      |  | $    | 21,687  |      |  | $    | 15,065  |   |  | $ | 14,660  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Lamson Home Products                                                                        |  |      | 1,856   |      |  |      | 1,135   |   |  |   | (1,783  | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|PVC Pipe                                                                                    |  |      | 20,224  |      |  |      | 5,814   |   |  |   | 4,113   |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Corporate Office                                                                            |  |      | (9,280  | )    |  |      | (8,668  | ) |  |   | (8,070  | )
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                            |  | $    | 34,487  |      |  | $    | 13,346  |   |  | $ | 8,920   |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|Depreciation and Amortization                                                              
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Carlon                                                                                      |  | $    | 5,187   |      |  | $    | 3,737   |   |  | $ | 3,482   |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Lamson Home Products                                                                        |  |      | 2,520   |      |  |      | 2,792   |   |  |   | 2,618   |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|PVC Pipe                                                                                    |  |      | 3,522   |      |  |      | 3,607   |   |  |   | 3,857   |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                            |  | $    | 11,229  |      |  | $    | 10,136  |   |  | $ | 9,957   |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|Total assets by business segment at December 30, 2000,
January 1, 2000 and January 2, 1999.
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Identifiable Assets                                                                        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Carlon                                                                                      |  | $    | 184,527 |      |  | $    | 52,326  |   |  | $ | 50,704  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Lamson Home Products                                                                        |  |      | 31,720  |      |  |      | 30,658  |   |  |   | 31,542  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|PVC Pipe                                                                                    |  |      | 61,449  |      |  |      | 51,393  |   |  |   | 48,843  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Corporate Office (includes deferred tax and pension assets)                                 |  |      | 42,597  |      |  |      | 48,942  |   |  |   | 29,578  |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  
|                                                                                            |  | $    | 320,293 |      |  | $    | 183,319 |   |  | $ | 160,667 |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |         |  

Substantially all sales are made within North America. Net sales to a single
customer within the Carlon and PVC Pipe segments totaled approximately 17% in
2000 and 1999 and 15% in 1998 of consolidated net sales.

NOTE LRESTRUCTURING CHARGE

During the fourth quarter of 1998 the Company recorded a restructuring charge
of $792,000 when it entered into a commitment to have a new distribution center
constructed in South Carolina in order to consolidate distribution
activities. The charge, which is included in cost of products sold, consisted
primarily of a write-down of certain inventory to net realizable value.

28



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
THE LAMSON & SESSIONS CO. AND SUBSIDIARIES
NOTE MSUMMARY OF QUARTERLY RESULTS OF OPERATIONS(UNAUDITED)

(Dollars in thousands, except per share data)

|             |                |   |         |        |        |   |        |        |  |   |        |        |              |  |              |  |      |   |                |      |                  |   |           |      |  |  |              |       |  |  |   |       | 
|------------ | -------------- | - | ------- | ------ | ------ | - | ------ | ------ |  | - | ------ | ------ | ------------ |  | ------------ |  | ---- | - | -------------- | ---- | ---------------- | - | --------- | ---- |  |  | ------------ | ----- |  |  | - | ----- | 
|             |                |   |         |        |        |   |        |        |  |   |        |        |              |  |              |  |      |   |                |      |                  |   |           |      |  |  | Market Price
|             |                |   |         |        |        |   |        |        |  |   |        |        |              |  |              |  |      |   | Basic Earnings |      | Diluted Earnings |   | Per Share
|             |                |   | Net     |        | Gross  |   | Net    |        |  |   |        |        | Per          |  | Per          |  |     
|             |                |   | Sales   |        | Profit |   | Income |        |  |   |        |        | Common Share |  | Common Share |  | High |   | Low           
|             |                |   |         |        |        |   |        |        |  |   |        |        |              |  |              |  |      |   |               
|Fiscal 2000:
|            
|            
|            
|            
|             | First quarter  |   | $       | 80,355 |        |   | $      | 21,320 |  |   | $      | 4,698  |              |  |              |  |      |   | $              | 0.35 |                  |   | $         | 0.35 |  |  | $            | 8.25  |  |  | $ | 4.75  | 
|            
|            
|            
|            
|             | Second quarter |   |         | 91,284 |        |   |        | 26,908 |  |   |        | 7,131  |              |  |              |  |      |   |                | 0.53 |                  |   |           | 0.52 |  |  |              | 15.31 |  |  |   | 7.25  | 
|            
|            
|            
|            
|             | Third quarter  |   |         | 88,291 |        |   |        | 22,867 |  |   |        | 6,976  |              |  |              |  |      |   |                | 0.51 |                  |   |           | 0.48 |  |  |              | 24.88 |  |  |   | 11.75 | 
|            
|            
|            
|            
|             | Fourth quarter |   |         | 88,803 |        |   |        | 17,524 |  |   |        | 2,643  |              |  |              |  |      |   |                | 0.19 |                  |   |           | 0.19 |  |  |              | 12.44 |  |  |   | 8.63  | 
|             |                |   |         |        |        |   |        |        |  |   |        |        |              |  |              |  |      |   |                |      |                  |   |           |     
|Total        |                | $ | 348,733 |        |        | $ | 88,619 |        |  | $ | 21,448 |        |              |  |              |  |      | $ | 1.58           |      |                  | $ | 1.53*     |     
|            
|            
|            
|            
|Fiscal 1999:
|            
|            
|            
|            
|             | First quarter  |   | $       | 67,198 |        |   | $      | 15,452 |  |   | $      | 2,724  |              |  |              |  |      |   | $              | 0.20 |                  |   | $         | 0.20 |  |  | $            | 5.63  |  |  | $ | 4.75  | 
|            
|            
|            
|            
|             | Second quarter |   |         | 74,482 |        |   |        | 14,130 |  |   |        | 1,787  |              |  |              |  |      |   |                | 0.13 |                  |   |           | 0.13 |  |  |              | 6.44  |  |  |   | 4.94  | 
|            
|            
|            
|            
|             | Third quarter  |   |         | 75,436 |        |   |        | 16,127 |  |   |        | 3,767  |              |  |              |  |      |   |                | 0.28 |                  |   |           | 0.28 |  |  |              | 6.94  |  |  |   | 4.56  | 
|            
|            
|            
|            
|             | Fourth quarter |   |         | 74,265 |        |   |        | 15,691 |  |   |        | 10,510 | (1)          |  |              |  |      |   |                | 0.78 |                  |   |           | 0.78 |  |  |              | 5.25  |  |  |   | 4.44  | 
|             |                |   |         |        |        |   |        |        |  |   |        |        |              |  |              |  |      |   |                |      |                  |   |           |     
|Total        |                | $ | 291,381 |        |        | $ | 61,400 |        |  | $ | 18,788 |        |              |  |              |  |      | $ | 1.40*          |      |                  | $ | 1.39      |     



---

|*   |  | Earnings per share were computed on a stand-alone quarterly basis for
each respective quarter. Therefore, the sum of the quarters in 1999 for
Basic Earnings Per Common Share and in 2000 for Diluted Earnings Per
Common Share do not equal the years total due to rounding.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | Includes an income tax benefit of $6,900 in the fourth quarter of 1999
compared with $700 in each of the previous three quarters of 1999. See
Note J.                                                                                                                         

29



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
The Lamson & Sessions Co.

We have audited the accompanying consolidated balance sheets of The
Lamson & Sessions Co. and Subsidiaries as of December 30, 2000 and
January 1, 2000, and the related consolidated statements of income,
shareholders equity and cash flows for each of the three fiscal
years in the period ended December 30, 2000.Our audits also
included the financial statement schedule listed in the Index at
Item 14 (a). These financial statements and schedule are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements and schedule based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of The Lamson & Sessions Co. and Subsidiaries at December 30,
2000 and January 1, 2000, and the consolidated results of their
operations and their cash flows for each of the three fiscal years in
the period ended December 30, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

Ernst & Young LLP

Cleveland, Ohio
January 30, 2001

30



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##### Table of Contents



STATEMENT OF MANAGEMENTS RESPONSIBILITY

We have prepared the financial statements and other financial information
contained in this Annual Report.

The management of Lamson & Sessions is primarily responsible for the
integrity of this financial information. The financial statements were
prepared in accordance with accounting principles generally accepted in
the United States and necessarily include certain amounts based on
managements reasonable best estimates and judgments, giving due
consideration to materiality. Financial information contained elsewhere in
this Annual Report is consistent with that contained in the financial
statements.

Management is responsible for establishing and maintaining a system of
internal control designed to provide reasonable assurance as to the
integrity and reliability of financial reporting. The concept of reasonable
assurance is based on the recognition that there are inherent limitations
in all systems of internal control, and that the cost of such systems
should not exceed the benefits to be derived therefrom.

To meet managements responsibility for financial reporting, we have
established internal control systems that we believe are adequate to
provide reasonable assurance that our assets are protected from loss. These
systems produce data used for the preparation of published financial
information and provide for appropriate reporting relationships and
division of responsibility. All significant systems and controls are
reviewed periodically by management in order to ensure compliance and by
our independent auditors to support their audit work. It is managements
policy to implement a high proportion of recommendations resulting from
this review.

The Audit Committee of the Board of Directors, composed solely of outside
directors, meets regularly with management, the internal audit group and
our independent auditors to review accounting, auditing and financial
matters. Both the independent audit and the internal auditor group have
free access to the Audit Committee, with or without management, to discuss
the scope and results of their audits and the adequacy of the system of
internal controls.

|                                                                                                           
|-----------------------------------------------------------------------------------------------------------
|/s/  John B. Schulze
John B. Schulze
Chairman of the Board, President and
Chief Executive Officer          
|                                                                                                           
|/s/  James J. Abel
James J. Abel
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
|                                                                                                           
|/s/  Lori L. Spencer
Lori L. Spencer
Vice President and Controller
Principal Accounting Officer            

31



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##### Table of Contents



PART II







Item 9.  Disagreements on Accounting and Financial Disclosure

None







PART III







Item 10.  Directors and Executive Officers of the Registrant



| | (a) |  | Directors                                                                                                                                                                                                                                              
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The information set forth under the caption Election of Directors in
the Companys definitive proxy statement for its Annual Meeting of
Shareholders to be held April 27, 2001 is hereby incorporated by
reference.                                  
|
| | (b) |  | Executive Officers  See Part I                                                                                                                                                                                                                        
|
| | (c) |  | Compliance with Section 16 (a) of the Exchange Act.                                                                                                                                                                                                    
|
| |     |  | The information set forth under the caption Section 16(a) Beneficial
Ownership Reporting Compliance in the Companys definitive proxy
statement for its Annual Meeting of Shareholders to be held April 27,
2001 is hereby incorporated by reference.







Item 11.  Executive Compensation

The information set forth under the caption Executive Compensation in the
Companys definitive proxy statement for its Annual Meeting of Shareholders to
be held April 27, 2001 is hereby incorporated by reference.







Item 12.  Security Ownership of Certain Beneficial Owners and Management

The information set forth under the captions Ownership of the Companys
Common Shares, Election of Directors and Security Ownership of Management
in the Companys definitive Proxy Statement for its Annual Meeting of
Shareholders to be held April 27, 2001 is hereby incorporated by reference.







Item 13.  Certain Relationships and
Related Transactions

During the past fiscal year, the Company, in the normal course of business,
utilized the services of the law firm of Jones, Day, Reavis & Pogue, in which
Mr. Coquillette, a director of the Company, is a partner. The Company plans to
continue using the services of the firm in 2001.

32



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##### Table of Contents









PART IV







Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K



| | (a) |  | The following documents are filed as part of this report:                                                             
| | --- |  | ----------------------------------------------------------------------------------------------------------------------
|
| |     |  | Consolidated financial statements of The Lamson & Sessions Co. and
Subsidiaries are included in Item 8 of this report:



| |    |  |                     
| | -- |  | --------------------
| | 1. |  | Financial Statements



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Consolidated Statements of Income for Fiscal Years Ended 2000,
1999 and 1998.              
|
| | Consolidated Statements of Cash Flows for Fiscal Years Ended 2000,
1999 and 1998.          
|
| | Consolidated Balance Sheets at December 30, 2000 and January 1,
2000.                      
|
| | Consolidated Statements of Shareholders Equity for Fiscal Years
Ended 2000, 1999 and 1998.
|
| | Notes to Consolidated Financial Statements.                                                



| |    |  |                             
| | -- |  | ----------------------------
| | 2. |  | Financial Statement Schedule



| |                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Schedule II  Valuation and Qualifying Accounts and Reserves.                                                                                                                                                                            
|
| | All other schedules for which provision is made in the applicable
accounting regulations of the
Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been
omitted.



| |    |  |                                                                                                                                                                                                                         
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3. |  | The exhibits listed in the accompanying Exhibit Index
and required by Item 601 of Regulation S-K (numbered in
accordance with Item 601 of Regulation S-K) are filed or
incorporated by reference as part of this Report.



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------



| |    |  |                                      
| | -- |  | -------------------------------------
| | 1. |  | Form 8-K filed on October 6, 2000.   
|
|
| | 2. |  | Form 8-K/A filed on December 5, 2000.



| | (c) |  | Exhibits  See 14(a) 3.
| | --- |  | -----------------------

33



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SCHEDULE II  Valuation and Qualifying Accounts and Reserves

(Dollars in thousands)

|                                                                         |                                    |        |              |          |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       |       | 
|------------------------------------------------------------------------ | ---------------------------------- | ------ | ------------ | -------- | ---------- | --------- | ---------- | ----- |  |  | ----- | ------ | ------ |  | ---------- | -- | - |  | ----- | ----- | 
|                                                                         |                                    |        | Balance at   |          | Charged to |           |            |       |  |  |       |        |        |  | Balance at
|                                                                         |                                    |        | Beginning of |          | Costs and  |           | Deductions |       |  |  |       |        | End of
|Description                                                              |                                    | Period |              | Expenses |            | and Other |            |       |  |  |       | Period
|                                                                         |                                    |        |              |          |            |           |            |       |  |  |       |       
|Year Ended December 30, 2000                                            
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Allowances deducted from assets:                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Trade receivable allowances        |        | $            | 2,078    |            |           | $          | 817   |  |  | $     | 501    |        |  |            | (A | ) |  | $     | 2,394 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Inventory obsolescence reserve     |        |              | 1,030    |            |           |            | 1,396 |  |  |       | 1,387  |        |  |            | (B | ) |  |       | 1,039 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Other current and long-term assets |        |              | 400      |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       | 400   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Accounts and loss reserves included in
current and long-term liabilities |                                    |        | 3,680        |          |            |           | 500        |       |  |  | 212   |        |        |  | (C         | )  |   |  | 3,968 |      
|                                                                         |                                    |        |              |          |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       |      
|Year Ended January 1, 2000                                              
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Allowances deducted from assets:                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Trade receivable allowances        |        | $            | 2,924    |            |           | $          | 574   |  |  | $     | 1,420  |        |  |            | (A | ) |  | $     | 2,078 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Inventory obsolescence reserve     |        |              | 1,189    |            |           |            | 1,369 |  |  |       | 1,528  |        |  |            | (B | ) |  |       | 1,030 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Other current and long-term assets |        |              | 400      |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       | 400   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Accounts and loss reserves included in
current and long-term liabilities |                                    |        | 5,404        |          |            |           |            |       |  |  | 1,724 |        |        |  | (C         | )  |   |  | 3,680 |      
|                                                                         |                                    |        |              |          |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       |      
|Year Ended January 2, 1999                                              
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Allowances deducted from assets:                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Trade receivable allowances        |        | $            | 2,975    |            |           | $          | 1,000 |  |  | $     | 1,051  |        |  |            | (A | ) |  | $     | 2,924 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Inventory obsolescence reserve     |        |              | 760      |            |           |            | 1,365 |  |  |       | 936    |        |  |            | (B | ) |  |       | 1,189 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Other current and long-term assets |        |              | 400      |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       | 400   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Accounts and loss reserves included in
current and long-term liabilities |                                    |        | 5,419        |          |            |           |            |       |  |  | 15    |        |        |  | (C         | )  |   |  | 5,404 |      
|                                                                         |                                    |        |              |          |            |           |            |       |  |  |       |        |        |  |            |    |   |  |       |      

Note A  Principally write-off of uncollectible accounts and disputed items, net of recoveries.

Note B  Principally the disposal of obsolete inventory.

Note C  Principally payments on contractual obligations for previously-owned businesses.

34



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##### Table of Contents



Signatures

Pursuant to the requirements of Section 13 or 15(d) 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, on
this 26th day of February 2001.

| |    |                                                                                                           
| | -- | ----------------------------------------------------------------------------------------------------------
| |    | THE LAMSON & SESSIONS CO.                                                                                 
|
|
| | By | /s/ James J. Abel
James J. Abel
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated as of February 21, 2001.

|                                                   |  |                                                                                                         
|-------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------
|Signature                                          |  | Title                                                                                                   
|                                                   |  |                                                                                                         
|/s/ John B. Schulze
John B. Schulze                |  | Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)              
|                                                  
|/s/ James J. Abel
James J. Abel                    |  | Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
(Principal Financial Officer)
|                                                  
|/s/ Lori L. Spencer
Lori L. Spencer                |  | Vice President and Controller
(Principal Accounting Officer)                                            
|                                                  
|/s/ James T. Bartlett*
James T. Bartlett           |  | Director                                                                                                
|                                                  
|/s/ Francis H. Beam, Jr.*
Francis H. Beam, Jr.     |  | Director                                                                                                
|                                                  
|/s/ Martin J. Cleary*
Martin J. Cleary             |  | Director                                                                                                
|                                                  
|/s/ William H. Coquillette*
William H. Coquillette |  | Director                                                                                                

35



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##### Table of Contents



|                                                 |  |         
|------------------------------------------------ |  | --------
|Signature                                        |  | Title   
|                                                 |  |         
|                                                
|/s/ John C. Dannemiller*
John C. Dannemiller     |  | Director
|                                                
|/s/ George R. Hill*
George R. Hill               |  | Director
|                                                
|/s/ A. Malachi Mixon, III*
A. Malachi Mixon, III |  | Director
|                                                
|/s/ John C. Morley*
John C. Morley               |  | Director
|                                                
|/s/ D. Van Skilling*
D. Van Skilling             |  | Director



| | * |  | The undersigned, by signing his name hereto, does sign and execute
this Annual Report on
Form 10-K pursuant to a Power of Attorney executed on behalf of
the above-named
directors of The Lamson & Sessions Co. and filed herewith as Exhibit 24
on behalf of The
Lamson & Sessions Co. and each such person.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                  
| | -----------------
| | February 26, 2001

By  /s/ James J. Abel
      James J. Abel, Attorney-in-fact

36



---



##### Table of Contents









EXHIBIT INDEX

Exhibit No.

Management Contracts and Compensatory Plans required to be filed pursuant to
Item 14 of Form 10-K are identified
with an asterisk (*).

|       |  |                                                                                                                                                                                                                                                                                             
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(a)   |  | Amended Articles of Incorporation of the Company
(incorporated by reference to Exhibit 4(a) to the Companys
Registration Statement on Form S-8 (Registration No.
333-32875) filed with the Securities and Exchange Commission
on August 5, 1997).                                          
|      
|      
|      
|      
|3(b)   |  | Amended Code of Regulations of the Company (incorporated by
reference to Exhibit 3(b) to the Companys Annual Report on
Form 10-K for the year December 31, 1994).                                                                                                                          
|      
|      
|      
|      
|4(a)   |  | Specimen Certificate of Common Shares, without par value with
Rights legend (incorporated by reference to Exhibit 3 to the
Companys Registration Statement on Form 8-A filed with the
Securities and Exchange Commission on September 9, 1998).                                            
|      
|      
|      
|      
|4(e)   |  | Form of Rights Certificate (incorporated by reference to
Exhibit 4(oo) to the Companys Registration Statement on Form
8-A filed with the Securities and Exchange Commission on
September 9, 1998).                                                                                         
|      
|      
|      
|      
|4(g)   |  | Rights Agreement, dated as of September 8, 1998, by and
between the Company and National City Bank (incorporated by
reference to Exhibit 4.1 to the Companys Registration
Statement on Form 8-A filed with the Securities and Exchange
Commission on September 9, 1998).                   
|      
|      
|      
|      
|*10(a) |  | 1988 Incentive Equity Performance Plan (as amended
as of February 26, 1998) (incorporated by reference to the
Companys Registration Statement on Form S-3 (Registration No.
333-65795) filed with the Securities and Exchange Commission on
October 16, 1998).                             
|      
|      
|      
|      
|*10(b) |  | Form of Three-Year Executive Change-in-Control Agreement between
the Company and certain executive officers (incorporated by
reference to Exhibit 10(b) to the Companys Annual Report on Form
10-K for the year ended January 1, 2000).                                                    
|      
|      
|      
|      
|*10(c) |  | Form of Two-Year Executive Change-in-Control Agreement between the
Company and certain executive officers (incorporated by reference
to Exhibit 10(c) to the Companys Annual Report on Form 10-K for
the year ended January 1, 2000).                                                      
|      
|      
|      
|      
|*10(d) |  | Corporate Officers Incentive Compensation Plan (incorporated by
reference to Exhibit 10(d) to the Companys Annual Report on Form
10-K for the year ended December 31, 1994).                                                                                                               
|      
|      
|      
|      
|*10(e) |  | Form of Amended and Restated Supplemental Executive Retirement
Agreement dated as of March 20, 1990 between the Company and
certain of its executive officers (incorporated by reference to
Exhibit 10(e) to the Companys Annual Report on Form 10-K for the
year ended December 30, 1995).
|      
|      
|      
|      
|*10(f) |  | The Companys Deferred Compensation Plan for Nonemployee Directors
(incorporated by reference to the Companys Registration Statement,
on Form S-8 (Registration No. 333-12585) filed with the Securities
and Exchange Commission on September 24, 1996).                                   
|      
|      
|      
|      
|*10(g) |  | Form of Indemnification Agreement between the Company and the
Directors and certain officers (incorporated by reference to
Exhibit 10(g) to the Companys Annual Report on Form 10-K for the
year ended December 31, 1994).                                                                 

37



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|*10(h)  |  | The Companys Long-Term Incentive Plan (incorporated by reference
to Exhibit 10(h) to the Companys Annual Report on Form 10-K for
the year ended December 28, 1996).                                                                                                                      
|       
|       
|       
|       
|10(j)   |  | Mortgage and Security Agreement, dated October 29, 1993,
between The Lamson & Sessions Co. and PFL Life Insurance
Company (incorporated by reference to Exhibit 10(j) to the
Companys Annual Report on Form 10-K for the year ended
January 1, 1994).                                     
|       
|       
|       
|       
|10(k)   |  | Asset Purchase Agreement between Iochpe-Maxion Ohio, Inc.
and The Lamson & Sessions Co. dated as of May 4, 1994
(incorporated by reference to Exhibit 10 to the Companys
Current Report on Form 8-K dated as of May 27, 1994).                                                            
|       
|       
|       
|       
|10(s)   |  | Amended and Restated Loan Agreement dated as of July 14,
1995 by and between the Company and General Electric Capital
Corporation (incorporated by reference to Exhibit 10(g) to the
Companys Quarterly Report on Form 10-Q for the period ended
July 1, 1995, the GECC Loan Agreement).
|       
|       
|       
|       
|10(t)   |  | Amendment No. 1 dated as of October 30, 1995, to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(t) to
the Companys Annual Report on Form 10-K for the year ended
December 30, 1995).                                                                                    
|       
|       
|       
|       
|10(u)   |  | Amendment No. 2 and Consent dated as of November 8, 1995 to
the GECC Loan Agreement (incorporated by reference to Exhibit
10(u) to the Companys Annual Report on Form 10-K for the year
ended December 30, 1995).                                                                         
|       
|       
|       
|       
|10(v)   |  | Amendment No. 3 dated as of March 31, 1996, to the GECC Loan
Agreement (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ended March 30,
1996).                                                                                                     
|       
|       
|       
|       
|10(w)   |  | Amendment No. 4 dated as of October 25, 1996, to the GECC
Loan Agreement (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ended September
28, 1996).                                                                                               
|       
|       
|       
|       
|10(y)   |  | Amendment No. 5 dated as of March 5, 1997, to the GECC Loan
Agreement (incorporated by reference to Exhibit 10(y) to the
Companys Annual Report on Form 10-K for the year ended
December 28, 1996).                                                                                       
|       
|       
|       
|       
|*10(z)  |  | The Companys Nonemployee Directors Stock Option Plan
(incorporated by reference to the Companys Registration
Statement on Form S-8 (Registration No. 033-62443) filed with
the Securities and Exchange Commission on September 8, 1995).                                                 
|       
|       
|       
|       
|10(aa)  |  | Amendment No. 6 dated as of July 24, 1997 to the GECC Loan
Agreement (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ended July 5,
1997).                                                                                                         
|       
|       
|       
|       
|10(ab)  |  | Amendment No. 7, dated as of January 30, 1998 to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(ab) to
the Companys Annual Report on Form 10-K for the year ended
January 3, 1998).                                                                                     
|       
|       
|       
|       
|*10(ac) |  | Amendment to the 1988 Incentive Equity Performance Plan (as
amended as of February 26, 1998) (incorporated by reference to
the Companys Annual Report on Form 10-K for the year ended
January 3, 1998).                                                                                   
|       
|       
|       
|       
|*10(ad) |  | Amendment to The Lamson & Sessions Co. Deferred Savings
Plan (as amended February 26, 1998) (incorporated by reference
to the Companys Registration Statement on Form S-8 (Registration No. 333-46953) filed with the Securities and
Exchange Commission on February 26, 1998).           

38



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|*10(ae) |  | 1998 Incentive Equity Plan (incorporated by reference to
the Companys Registration Statement on Form S-8 (Registration
No. 333-61911) filed with the Securities and Exchange
Commission on August 20, 1998).                                                                                                     
|       
|       
|       
|       
|10(af)  |  | Amendment No. 8, dated as of January 29, 1999, to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(af) to
the Companys Annual Report on Form 10-K for the year ended
January 2, 1999).                                                                                                           
|       
|       
|       
|       
|*10(ag) |  | Amendment to the Nonemployee Directors Stock Option Plan
effective as of February 25, 1999 (incorporated by reference
to Exhibit 10(ag) to the Companys Annual Report on Form 10-K
for the year ended January 2, 1999).                                                                                          
|       
|       
|       
|       
|10(ah)  |  | Amendment No. 9, dated as of February 7, 2000, to the GECC
Loan Agreement (incorporated by reference to Exhibit 10(ah) to
the Companys Annual Report on Form 10-K for the year ended
January 1, 2000).                                                                                                           
|       
|       
|       
|       
|*10(aj) |  | Amendment to The Lamson & Sessions Co. Nonemployee
Directors Stock Option Plan (as amended and restated as of
April 23, 1999) (incorporated by reference to the Companys
Registration Statement on Form S-8 (Registration No.
333-93251) filed with the Securities and Exchange Commission
on December 21, 1999).
|       
|       
|       
|       
|*10(ak) |  | First Amendment to The Lamson & Sessions Co. Amended and
Restated Supplemental Retirement Agreement, effective January
1, 2000 (incorporated by reference to Exhibit 10(ak) to the
Companys Annual Report on Form 10-K for the year ended
January 1, 2000).                                                      
|       
|       
|       
|       
|*10(al) |  | Amendment No. 2 to The Lamson & Sessions Co. Nonemployee
Directors Stock Option Plan, effective January 1, 2000
(incorporated by reference to Exhibit 10(al) to the Companys
Annual Report on Form 10-K for the year ended January 1,
2000).                                                                     
|       
|       
|       
|       
|*10(am) |  | Amendment No. 3 to The Lamson & Sessions Co. 1988 Incentive
Equity Performance Plan, effective January 1, 2000
(incorporated by reference to Exhibit 10(am) to the Companys
Annual Report on Form 10-K for the year ended January 1,
2000).                                                                      
|       
|       
|       
|       
|*10(an) |  | Amendment No. 1 to The Lamson & Sessions Co. Long-Term
Incentive Plan, effective January 1, 2000 (incorporated by
reference to Exhibit 10(an) to the Companys Annual Report on
Form 10-K for the year ended January 1, 2000).                                                                                    
|       
|       
|       
|       
|*10(ao) |  | Amendment No. 1 to The Lamson & Sessions Co. 1998 Incentive
Equity Plan, effective January 1, 2000 (incorporated by
reference to Exhibit 10(ao) to the Companys Annual Report on
Form 10-K for the year ended January 1, 2000).                                                                                  
|       
|       
|       
|       
|*10(ap) |  | Amendment to The Lamson & Sessions Co. 1998 Incentive
Equity Plan (as Amended and Restated as of April 28, 2000)
(incorporated by reference to the Companys Registration
Statement on Form S-8 (Registration No. 333-51330) filed with
the Securities and Exchange Commission on December 6, 2000).              
|       
|       
|       
|       
|21      |  | Subsidiaries of the Registrant, filed herewith.                                                                                                                                                                                                                                                                   
|       
|       
|       
|       
|23      |  | Consent of Independent Auditors, filed herewith.                                                                                                                                                                                                                                                                  
|       
|       
|       
|       
|24      |  | Powers of Attorney, filed herewith.                                                                                                                                                                                                                                                                               

39