LYDALL, INC. (NYSE: LDL) today announced financial results for the
third quarter ended September 30, 2019.
HIGHLIGHTS - Q3 2019 vs. Q3
2018
GAAP Financials
- Net sales of $205.3 million, up 3.7% – Acquisitions
and divestitures netted growth of 8.9% – Unfavorable
foreign currency translation of 1.6%
- Gross margin of 17.7%, down 10 basis points
- Operating margin of 3.6%, down 130 basis points –
Incremental intangibles amortization of $3.0 million, or 150 basis
points
- Earnings per share ("EPS") of $0.17, compared to $0.36
- Cash generated from operations of $26.7 million, compared to
$6.5 million
Non-GAAP Financial
Measures*
- Organic sales decline of 2.2%
- Adjusted gross margin of 17.8%, down 90 basis points
- Adjusted operating margin of 3.7%, down 290 basis points
- Adjusted EPS of $0.19, compared to adjusted $0.54 per
share – Includes incremental intangibles amortization of
$0.14 per share
- Adjusted EBITDA of $20.9 million, compared to $21.4
million*Reconciliations of the Non-GAAP financial measures to
Lydall’s GAAP financial results are included at the end of this
release. See also “Use of Non-GAAP Financial Measures”
below.
Dale G. Barnhart, President and Chief Executive
Officer, stated, “Third quarter sales declined 2% organically as
on-going global trade tensions drove uncertainty in key
markets. Third quarter sales were negatively impacted by a
significant drop in demand in China, global weakness in sealing
product markets and lower volume due to the strike at General
Motors.
"From a profitability standpoint, adjusted
EBITDA was negatively impacted by higher labor and overhead costs
in the Thermal Acoustical Solutions segment and lower gross margin
in the Performance Materials segment. Despite lower sales
volumes, the Technical Nonwovens segment delivered healthy adjusted
EBITDA margin of 16.5%.
"The business continues to drive strong cash
generation, producing $27 million and $63 million from operations
for the quarter and nine months ended, respectively, enabling us to
pay down $13 million of outstanding credit facility borrowings in
the quarter and $38 million year-to-date."
Q3 2019 Results
Net sales increased by $7.4 million, or 3.7%, to
$205.3 million, compared to $197.9 million in the third quarter of
2018 primarily from the acquisition of Interface Performance
Materials ("Interface"), which increased Performance Materials
("PM") segment net sales by $18.6 million. Organically, PM
segment sales declined by 3.9% from lower sealing product sales.
The Technical Nonwovens ("TNW") segment reported organic sales
compression of 6.8% primarily from weak demand for industrial
filtration products in China which is being impacted by on-going
trade uncertainties. Organic sales growth was 4.2% in the
Thermal Acoustical Solutions ("TAS") segment primarily from
increased parts sales in Europe and North America.
Gross margin was 17.7%, a decline of 10 basis
points from the third quarter of 2018, but on an adjusted basis,
declined 90 basis points. Improved TNW segment adjusted gross
margin, was offset by the TAS and PM segments. The TAS
segment gross margin was lower due to increased labor, outsourcing
and logistics costs at the Company's North American and European
automotive facilities. Lower gross margin from the PM segment
was primarily driven by product mix and unfavorable cost absorption
on lower volumes.
Operating margin was 3.6%, down 130 basis
points, compared to the third quarter of 2018, or down 290 basis
points on an adjusted basis, primarily due to lower adjusted gross
margin of 90 basis points, incremental intangible assets
amortization of 150 basis points and increased selling, product
development and administrative expenses from the Interface business
acquired on August 31, 2018. Adjusted EBITDA margin of 10.2%
dropped by 60 basis points compared to the third quarter of
2018.
The third quarter 2019 effective tax rate was
35.1% compared to 25.1% in the third quarter 2018. The
Company's third quarter 2019 effective tax rate was negatively
impacted by losses in jurisdictions where a tax benefit is not
recognized.
Net income was $3.0 million, or $0.17 per
diluted share, compared to net income of $6.3 million, or $0.36 per
diluted share in the third quarter of 2018. Adjusted earnings
per share were $0.19, including incremental intangibles
amortization of $0.14 per share, compared to $0.54 per share in the
third quarter of 2018.
Liquidity
Cash was $48.9 million at September 30, 2019,
compared to $49.2 million at December 31, 2018. Net cash
provided by operations was $26.7 million in the third quarter of
2019 compared to $6.5 million in the third quarter of 2018, and
$63.0 million through September 30, 2019 compared to $14.5 million
through September 30, 2018. There was approximately $110
million of availability under the Company's credit facility at
September 30, 2019.
Outlook
Mr. Barnhart concluded, "The market weakness we
have seen in both the Technical Nonwovens and Performance Materials
segments is not expected to improve in the fourth quarter and may
further deteriorate. As a result, the Company is aggressively
adjusting its cost structure, and will record one-time
severance-related expenses of $2.0 million to $2.5 million in the
fourth quarter, with savings of $4.0 million to $5.0 million
anticipated in 2020. Further, while the General Motors strike
just ended, we will be negatively impacted by the strike in the
fourth quarter and are sharpening our focus on reducing
manufacturing costs in our Thermal Acoustical Solutions
segment. As we close out 2019, we expect strong cash
generation in the fourth quarter that will allow the Company to
continue to reduce its outstanding debt."
Conference Call
Lydall will host a conference call on October
30, 2019, at 10:00 a.m. Eastern Time to discuss results for its
third quarter and nine months ended September 30, 2019 as well as
general matters related to its businesses and markets. The
call may be accessed at (888) 338-7142, from within the U.S., or
(412) 902-4181, internationally. In addition, the audio of
the call will be webcast live and will be available for replay on
the Company's website at www.lydall.com in the Investor Relations'
Section. A recording of the call will be available from 12:00
p.m. Eastern Time on October 30, 2019 through 11:59 p.m. Eastern
Time on November 6, 2019 at (877) 344-7529, from within the U.S.,
or (412) 317-0088, internationally, pass code 10135999.
Additional information, including a presentation outlining key
financial data supporting the conference call, can be found on the
Company’s website www.lydall.com under the Investors Relations’
section.
Use of Non-GAAP Financial
Measures
In addition to the financial measures prepared
in accordance with generally accepted accounting principles
(“GAAP”), the Company uses certain non-GAAP financial measures,
including organic sales, adjusted gross profit, adjusted gross
margin, adjusted operating income, adjusted operating margin,
adjusted earnings per share, consolidated and segment EBITDA and
adjusted EBITDA. The attached financial tables address the
non-GAAP measures used in this press release and reconcile non-GAAP
measures to the most directly comparable GAAP measures. The
Company believes that the use of non-GAAP measures helps investors
gain a better understanding of our core operating results and
future prospects, consistent with how management measures and
forecasts the Company's performance, especially when comparing such
results to previous periods or forecasts. Adjusted segment
EBITDA is used as a basis to internally evaluate the financial
performance of the Company's segments because the Company believes
it reflects current core operating performance and provides an
indicator of the segment's ability to generate cash. Non-GAAP
measures should be considered in addition to, and not as a
replacement for or superior to, the corresponding GAAP measures,
and may not be comparable to similarly titled measures reported by
other companies.
Cautionary Note Concerning
Forward-Looking Statements
This press release contains “forward-looking
statements” within the Private Securities Litigation Reform Act of
1995. Any statements contained in this press release that are
not statements of historical fact, including statements about the
outlook for the fourth quarter of 2019, planned reductions to the
Company's cost structure and improvements to margins, and cash flow
generation may be deemed to be forward-looking statements.
All such forward-looking statements are intended to provide
management’s current expectations for the future operating and
financial performance of the Company based on current expectations
and assumptions relating to the Company’s business, the economy and
other future conditions. Forward-looking statements generally
can be identified through the use of words such as “believes,”
“anticipates,” “may,” “should,” “will,” “plans,” “projects,”
“expects,” “expectations,” “estimates,” “forecasts,” “predicts,”
“targets,” “prospects,” “strategy,” “signs,” and other words of
similar meaning in connection with the discussion of future
operating or financial performance. Because forward-looking
statements relate to the future, they are subject to inherent
risks, uncertainties and changes in circumstances that are
difficult to predict. Such risks and uncertainties which
include, among others, worldwide economic or political changes that
affect the markets that the Company’s businesses serve which could
have an effect on demand for the Company’s products and impact the
Company’s profitability, challenges encountered by the Company in
the execution of restructuring programs, challenges in integrating
acquired companies, disruptions in the global credit and financial
markets, including diminished liquidity and credit availability,
changes in international trade agreements, including tariffs and
trade restrictions, foreign currency volatility, swings in consumer
confidence and spending, unstable economic growth, raw material
pricing and supply issues, fluctuations in unemployment rates,
retention of key employees and the successful execution of the
recently announced CEO transition, increases in fuel prices, and
outcomes of legal proceedings, claims and investigations.
Accordingly, the Company’s actual results may differ materially
from those contemplated by these forward-looking statements.
Investors, therefore, are cautioned against relying on any of these
forward-looking statements. They are neither statements of
historical fact nor guarantees or assurances of future
performance. Additional information regarding the factors
that may cause actual results to differ materially from these
forward-looking statements is available in Lydall’s filings with
the Securities and Exchange Commission, including the risks and
uncertainties identified in Part I, Item 1A - Risk Factors of
Lydall’s Annual Report on Form 10-K for the year ended December 31,
2018.
These forward-looking statements speak only as
of the date of this press release, and Lydall does not assume any
obligation to update or revise any forward-looking statement made
in this press release or that may from time to time be made by or
on behalf of the Company.
Lydall, Inc. is a New York Stock Exchange listed
company, headquartered in Manchester, Connecticut with global
manufacturing operations producing specialty engineered products
for the thermal/acoustical and filtration/separation markets. For
more information, visit http://www.lydall.com. Lydall® is a
registered trademark of Lydall, Inc. in the U.S. and other
countries.
| Summary of
Operations |
|
|
|
|
|
|
|
| In thousands except per share
data |
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
| |
Quarters Ended |
|
Nine Months Ended |
| |
September 30, |
|
September 30, |
| |
2019 |
|
2018 |
|
2019 |
|
2018 |
| |
|
|
|
|
|
|
|
| Net
sales |
$ |
205,274 |
|
|
$ |
197,886 |
|
|
$ |
644,110 |
|
|
$ |
575,959 |
|
| Cost of sales |
168,918 |
|
|
162,747 |
|
|
520,423 |
|
|
465,186 |
|
| Gross profit |
36,356 |
|
|
35,139 |
|
|
123,687 |
|
|
110,773 |
|
| |
|
|
|
|
|
|
|
| Selling, product development
and administrative expenses |
28,909 |
|
|
25,406 |
|
|
94,011 |
|
|
74,755 |
|
| Operating income |
7,447 |
|
|
9,733 |
|
|
29,676 |
|
|
36,018 |
|
| |
|
|
|
|
|
|
|
| Pension plan settlement
expense |
186 |
|
|
— |
|
|
25,701 |
|
|
— |
|
| Interest expense |
3,666 |
|
|
1,505 |
|
|
11,025 |
|
|
2,617 |
|
| Other income, net |
(885 |
) |
|
(40 |
) |
|
(1,359 |
) |
|
(93 |
) |
| Income (loss) before income
taxes |
4,480 |
|
|
8,268 |
|
|
(5,691 |
) |
|
33,494 |
|
| |
|
|
|
|
|
|
|
| Income tax expense
(benefit) |
1,574 |
|
|
2,076 |
|
|
(5,519 |
) |
|
5,854 |
|
| Income from equity method
investment |
(98 |
) |
|
(64 |
) |
|
(120 |
) |
|
(120 |
) |
| Net income
(loss) |
$ |
3,004 |
|
|
$ |
6,256 |
|
|
$ |
(52 |
) |
|
$ |
27,760 |
|
| |
|
|
|
|
|
|
|
| Earnings per
share |
|
|
|
|
|
|
|
| Basic |
$ |
0.17 |
|
|
$ |
0.36 |
|
|
$ |
0.00 |
|
|
$ |
1.61 |
|
| Diluted |
$ |
0.17 |
|
|
$ |
0.36 |
|
|
$ |
0.00 |
|
|
$ |
1.60 |
|
| |
|
|
|
|
|
|
|
| Weighted average number of
common shares outstanding |
17,270 |
|
|
17,216 |
|
|
17,264 |
|
|
17,189 |
|
| Weighted average number of
common shares and equivalents outstanding |
17,330 |
|
|
17,349 |
|
|
17,264 |
|
|
17,339 |
|
| Summary of Segment
Information |
|
|
|
|
|
|
|
|
| and Corporate Office
Expenses |
|
|
|
|
|
|
|
|
| In thousands |
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
|
| |
|
Quarters Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
September 30, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Net
Sales |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Performance Materials Segment
(1) |
|
$ |
60,000 |
|
|
$ |
41,720 |
|
|
$ |
189,682 |
|
|
$ |
103,647 |
|
| Technical Nonwovens Segment
(2),(3) |
|
63,912 |
|
|
73,071 |
|
|
198,596 |
|
|
212,324 |
|
| Thermal Acoustical
Solutions |
|
87,926 |
|
|
88,211 |
|
|
275,511 |
|
|
279,817 |
|
| Eliminations and Other
(3) |
|
(6,564 |
) |
|
(5,116 |
) |
|
(19,679 |
) |
|
(19,829 |
) |
| Consolidated Net Sales |
|
$ |
205,274 |
|
|
$ |
197,886 |
|
|
$ |
644,110 |
|
|
$ |
575,959 |
|
| |
|
|
|
|
|
|
|
|
| Operating
Income |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Performance Materials Segment
(1) |
|
$ |
712 |
|
|
$ |
1,753 |
|
|
$ |
5,474 |
|
|
$ |
8,043 |
|
| Technical Nonwovens Segment
(2),(3) |
|
7,165 |
|
|
6,271 |
|
|
19,743 |
|
|
17,395 |
|
| Thermal Acoustical
Solutions |
|
5,022 |
|
|
7,923 |
|
|
21,870 |
|
|
29,357 |
|
| Corporate Office Expenses |
|
(5,452 |
) |
|
(6,214 |
) |
|
(17,411 |
) |
|
(18,777 |
) |
| Consolidated Operating
Income |
|
$ |
7,447 |
|
|
$ |
9,733 |
|
|
$ |
29,676 |
|
|
$ |
36,018 |
|
(1) The Performance Materials segment reports
the results of Interface and PCC for the period following the date
of acquisitions of August 31, 2018 and July 12, 2018, respectively,
and included $3.1 million and $11.2 million of incremental
intangible assets amortization for the quarter and nine months
ended September 30, 2019, respectively.
(2) The Technical Nonwovens segment reports the
results of Geosol through the date of disposition of May 9,
2019.
(3) Included in the Technical Nonwovens segment
and Eliminations and Other is $4.3 million in intercompany sales to
the Thermal Acoustical Solutions segment for the quarters ended
September 30, 2019 and 2018, and $13.6 million and $17.2
million for the nine months ended September 30, 2019 and 2018,
respectively.
| Financial
Position |
|
|
|
|
| In thousands except ratio
data |
|
|
|
|
| (Unaudited) |
|
|
|
|
| |
|
September 30, 2019 |
|
December 31, 2018 |
| |
|
|
|
|
| Cash and cash equivalents |
|
$ |
48,919 |
|
|
$ |
49,237 |
|
| Working capital |
|
$ |
172,023 |
|
|
$ |
195,732 |
|
| Total debt |
|
$ |
286,670 |
|
|
$ |
324,813 |
|
| Stockholders' equity |
|
$ |
381,671 |
|
|
$ |
369,275 |
|
| Total capitalization |
|
$ |
668,341 |
|
|
$ |
694,088 |
|
| Total debt to total
capitalization |
|
42.9 |
% |
|
46.8 |
% |
| Cash
Flows |
|
|
|
|
|
|
|
|
| In thousands |
|
Quarters Ended |
|
Nine Months Ended |
| (Unaudited) |
|
September 30, |
|
September 30, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| |
|
|
|
|
|
|
|
|
| Net cash provided by operating
activities |
|
$ |
26,745 |
|
|
$ |
6,524 |
|
|
$ |
62,964 |
|
|
$ |
14,498 |
|
| Net cash used for investing
activities |
|
$ |
(6,947 |
) |
|
$ |
(273,643 |
) |
|
$ |
(23,772 |
) |
|
$ |
(289,781 |
) |
| Net cash (used for) provided
by financing activities |
|
$ |
(13,018 |
) |
|
$ |
260,841 |
|
|
$ |
(38,230 |
) |
|
$ |
260,558 |
|
| Depreciation and
amortization |
|
$ |
12,681 |
|
|
$ |
8,194 |
|
|
$ |
36,682 |
|
|
$ |
22,442 |
|
| Capital expenditures |
|
$ |
(6,949 |
) |
|
$ |
(3,736 |
) |
|
$ |
(27,236 |
) |
|
$ |
(20,091 |
) |
| Common Stock
Data |
|
|
|
|
| |
|
Quarters Ended September 30, |
| |
|
2019 |
|
2018 |
| |
|
|
|
|
| High |
|
$ |
26.99 |
|
|
$ |
48.45 |
|
| Low |
|
$ |
18.02 |
|
|
$ |
39.15 |
|
| Close |
|
$ |
24.91 |
|
|
$ |
43.10 |
|
During the third quarter of 2019, 6,119,647 shares of Lydall
common stock (LDL) were traded on the New York Stock Exchange.
Non-GAAP MeasuresIn thousands except ratio and
per share data(Unaudited)
The following tables address the non-GAAP measures used in this
press release and reconcile the non-GAAP measures to the most
directly comparable GAAP measures:
| |
|
Quarters Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| |
|
|
|
|
|
|
|
|
| Net
sales |
|
$ |
205,274 |
|
|
$ |
197,886 |
|
|
$ |
644,110 |
|
|
$ |
575,959 |
|
| Net sales,
adjusted |
|
$ |
205,274 |
|
|
$ |
197,886 |
|
|
$ |
644,110 |
|
|
$ |
575,959 |
|
| |
|
|
|
|
|
|
|
|
| Gross profit, as
reported |
|
$ |
36,356 |
|
|
$ |
35,139 |
|
|
$ |
123,687 |
|
|
$ |
110,773 |
|
| TNW restructuring
expenses |
|
88 |
|
|
400 |
|
|
480 |
|
|
1,724 |
|
| Inventory step-up purchase
accounting adjustments |
|
— |
|
|
1,390 |
|
|
— |
|
|
1,390 |
|
| Gross profit,
adjusted |
|
$ |
36,444 |
|
|
$ |
36,929 |
|
|
$ |
124,167 |
|
|
$ |
113,887 |
|
| |
|
|
|
|
|
|
|
|
| Gross margin, as
reported |
|
17.7 |
% |
|
17.8 |
% |
|
19.2 |
% |
|
19.2 |
% |
| Gross margin,
adjusted |
|
17.8 |
% |
|
18.7 |
% |
|
19.3 |
% |
|
19.8 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income, as
reported |
|
$ |
7,447 |
|
|
$ |
9,733 |
|
|
$ |
29,676 |
|
|
$ |
36,018 |
|
| Strategic initiatives
expenses |
|
— |
|
|
1,514 |
|
|
1,246 |
|
|
2,803 |
|
| TNW restructuring
expenses |
|
117 |
|
|
519 |
|
|
591 |
|
|
1,938 |
|
| Inventory step-up purchase
accounting adjustments |
|
— |
|
|
1,390 |
|
|
— |
|
|
1,390 |
|
| Operating income,
adjusted |
|
$ |
7,564 |
|
|
$ |
13,156 |
|
|
$ |
31,513 |
|
|
$ |
42,149 |
|
| |
|
|
|
|
|
|
|
|
| Operating margin, as
reported |
|
3.6 |
% |
|
4.9 |
% |
|
4.6 |
% |
|
6.3 |
% |
| Operating margin,
adjusted |
|
3.7 |
% |
|
6.6 |
% |
|
4.9 |
% |
|
7.3 |
% |
| |
|
|
|
|
|
|
|
|
| Earnings per
share |
|
$ |
0.17 |
|
|
$ |
0.36 |
|
|
$ |
0.00 |
|
|
$ |
1.60 |
|
| Strategic initiatives
expenses |
|
$ |
— |
|
|
$ |
0.09 |
|
|
$ |
0.07 |
|
|
$ |
0.16 |
|
| TNW restructuring
expenses |
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
0.03 |
|
|
$ |
0.11 |
|
| Inventory step-up purchase
accounting adjustments |
|
$ |
— |
|
|
$ |
0.08 |
|
|
$ |
— |
|
|
$ |
0.08 |
|
| Pension plan settlement
expense |
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
1.48 |
|
|
$ |
— |
|
| Gain on sale from a
divestiture |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.08 |
) |
|
$ |
— |
|
| Tax effect of above
adjustments |
|
$ |
— |
|
|
$ |
(0.02 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.05 |
) |
| Diluted earnings per
share, adjusted |
|
$ |
0.19 |
|
|
$ |
0.54 |
|
|
$ |
0.89 |
|
|
$ |
1.90 |
|
This press release reports adjusted results for
the quarters and nine months ended September 30, 2019 and
2018, which excludes strategic initiatives expenses, restructuring
expenses in the Technical Nonwovens segment, purchase accounting
adjustments related to inventory step-up in the Performance
Materials segment, pension plan settlement expenses and gain on
sale from a divestiture.
CONSOLIDATED AND SEGMENT EBITDA/ADJUSTED
EBITDAIn thousands except ratio data(Unaudited)
The following tables report consolidated and
segment earnings before interest, taxes, depreciation and
amortization ("EBITDA") and adjusted EBITDA for the quarters and
nine months ended September 30, 2019 and 2018. The
Company uses segment operating income (loss) for the purpose of
calculating segment EBITDA and adjusted EBITDA. Adjusted
EBITDA excludes strategic initiatives expenses, restructuring
expenses, purchase accounting adjustments related to inventory
step-up, pension plan settlement expenses and gain on sale from a
divestiture.
| |
|
For the Quarter Ended September 30, 2019 |
| |
|
Segments |
|
|
|
|
| |
|
Performance Materials |
|
Technical Nonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
|
|
$ |
3,004 |
|
| Pension plan settlement
expense |
|
|
|
|
|
|
|
|
|
|
|
186 |
|
| Interest expense |
|
|
|
|
|
|
|
|
|
|
|
3,666 |
|
| Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
1,574 |
|
| Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(885 |
) |
| Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(98 |
) |
| Operating income |
|
$ |
712 |
|
|
$ |
7,165 |
|
|
$ |
5,022 |
|
|
$ |
12,899 |
|
|
$ |
(5,452 |
) |
|
$ |
7,447 |
|
| Depreciation and
amortization |
|
6,290 |
|
|
3,162 |
|
|
2,726 |
|
|
12,178 |
|
|
148 |
|
|
12,326 |
|
| Pension plan settlement
expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
186 |
|
|
186 |
|
| Other income, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(885 |
) |
|
(885 |
) |
| Income from equity method
investment |
|
— |
|
|
(98 |
) |
|
— |
|
|
(98 |
) |
|
— |
|
|
(98 |
) |
| EBITDA |
|
$ |
7,002 |
|
|
$ |
10,425 |
|
|
$ |
7,748 |
|
|
$ |
25,175 |
|
|
$ |
(4,605 |
) |
|
$ |
20,570 |
|
| % of net
sales |
|
11.7 |
% |
|
16.3 |
% |
|
8.8 |
% |
|
11.9 |
% |
|
|
|
10.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TNW restructuring
expenses |
|
$ |
— |
|
|
$ |
117 |
|
|
$ |
— |
|
|
$ |
117 |
|
|
$ |
— |
|
|
$ |
117 |
|
| Pension plan settlement
expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
186 |
|
|
186 |
|
| EBITDA,
adjusted |
|
$ |
7,002 |
|
|
$ |
10,542 |
|
|
$ |
7,748 |
|
|
$ |
25,292 |
|
|
$ |
(4,419 |
) |
|
$ |
20,873 |
|
| % of net
sales |
|
11.7 |
% |
|
16.5 |
% |
|
8.8 |
% |
|
11.9 |
% |
|
|
|
10.2 |
% |
| |
|
For the Quarter Ended September 30, 2018 |
| |
|
Segments |
|
|
|
|
| |
|
Performance Materials |
|
Technical Nonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
|
|
$ |
6,256 |
|
| Interest expense |
|
|
|
|
|
|
|
|
|
|
|
1,505 |
|
| Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
2,076 |
|
| Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(40 |
) |
| Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(64 |
) |
| Operating income |
|
$ |
1,753 |
|
|
$ |
6,271 |
|
|
$ |
7,923 |
|
|
$ |
15,947 |
|
|
$ |
(6,214 |
) |
|
$ |
9,733 |
|
| Depreciation and
amortization |
|
2,323 |
|
|
3,410 |
|
|
2,216 |
|
|
7,949 |
|
|
167 |
|
|
8,116 |
|
| Other income, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(40 |
) |
|
(40 |
) |
| Income from equity method
investment |
|
— |
|
|
(64 |
) |
|
— |
|
|
(64 |
) |
|
— |
|
|
(64 |
) |
| EBITDA |
|
$ |
4,076 |
|
|
$ |
9,745 |
|
|
$ |
10,139 |
|
|
$ |
23,960 |
|
|
$ |
(6,007 |
) |
|
$ |
17,953 |
|
| % of net
sales |
|
9.8 |
% |
|
13.3 |
% |
|
11.5 |
% |
|
11.8 |
% |
|
|
|
9.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Strategic initiatives
expenses |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,514 |
|
|
$ |
1,514 |
|
| TNW restructuring
expenses |
|
— |
|
|
519 |
|
|
— |
|
|
519 |
|
|
— |
|
|
519 |
|
| Inventory step-up purchase
accounting adjustments |
|
1,390 |
|
|
— |
|
|
— |
|
|
1,390 |
|
|
— |
|
|
1,390 |
|
| EBITDA,
adjusted |
|
$ |
5,466 |
|
|
$ |
10,264 |
|
|
$ |
10,139 |
|
|
$ |
25,869 |
|
|
$ |
(4,493 |
) |
|
$ |
21,376 |
|
| % of net
sales |
|
13.1 |
% |
|
14.0 |
% |
|
11.5 |
% |
|
12.7 |
% |
|
|
|
10.8 |
% |
| |
|
For the Nine Months Ended September 30, 2019 |
| |
|
Segments |
|
|
|
|
| |
|
Performance Materials |
|
Technical Nonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
|
|
|
|
|
|
|
|
|
$ |
(52 |
) |
| Pension plan settlement
expense |
|
|
|
|
|
|
|
|
|
|
|
25,701 |
|
| Interest expense |
|
|
|
|
|
|
|
|
|
|
|
11,025 |
|
| Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(5,519 |
) |
| Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(1,359 |
) |
| Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(120 |
) |
| Operating income |
|
$ |
5,474 |
|
|
$ |
19,743 |
|
|
$ |
21,870 |
|
|
$ |
47,087 |
|
|
$ |
(17,411 |
) |
|
$ |
29,676 |
|
| Depreciation and
amortization |
|
18,789 |
|
|
9,526 |
|
|
7,616 |
|
|
35,931 |
|
|
487 |
|
|
36,418 |
|
| Pension plan settlement
expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25,701 |
|
|
25,701 |
|
| Other income, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,359 |
) |
|
(1,359 |
) |
| Income from equity method
investment |
|
— |
|
|
(120 |
) |
|
— |
|
|
(120 |
) |
|
— |
|
|
(120 |
) |
| EBITDA |
|
$ |
24,263 |
|
|
$ |
29,389 |
|
|
$ |
29,486 |
|
|
$ |
83,138 |
|
|
$ |
(41,266 |
) |
|
$ |
41,872 |
|
| % of net
sales |
|
12.8 |
% |
|
14.8 |
% |
|
10.7 |
% |
|
12.5 |
% |
|
|
|
6.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Strategic initiatives
expenses |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,246 |
|
|
$ |
1,246 |
|
| TNW restructuring
expenses |
|
— |
|
|
591 |
|
|
— |
|
|
591 |
|
|
— |
|
|
591 |
|
| Pension plan settlement
expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25,701 |
|
|
25,701 |
|
| Gain on sale from a
divestiture |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,459 |
) |
|
(1,459 |
) |
| EBITDA,
adjusted |
|
$ |
24,263 |
|
|
$ |
29,980 |
|
|
$ |
29,486 |
|
|
$ |
83,729 |
|
|
$ |
(15,778 |
) |
|
$ |
67,951 |
|
| % of net
sales |
|
12.8 |
% |
|
15.1 |
% |
|
10.7 |
% |
|
12.6 |
% |
|
|
|
10.5 |
% |
| |
|
For the Nine Months Ended September 30, 2018 |
| |
|
Segments |
|
|
|
|
| |
|
Performance Materials |
|
Technical Nonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
|
|
$ |
27,760 |
|
| Interest expense |
|
|
|
|
|
|
|
|
|
|
|
2,617 |
|
| Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
5,854 |
|
| Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(93 |
) |
| Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(120 |
) |
| Operating income |
|
$ |
8,043 |
|
|
$ |
17,395 |
|
|
$ |
29,357 |
|
|
$ |
54,795 |
|
|
$ |
(18,777 |
) |
|
$ |
36,018 |
|
| Depreciation and
amortization |
|
4,371 |
|
|
10,568 |
|
|
6,821 |
|
|
21,760 |
|
|
484 |
|
|
22,244 |
|
| Other income, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(93 |
) |
|
(93 |
) |
| Income from equity method
investment |
|
— |
|
|
(120 |
) |
|
— |
|
|
(120 |
) |
|
— |
|
|
(120 |
) |
| EBITDA |
|
$ |
12,414 |
|
|
$ |
28,083 |
|
|
$ |
36,178 |
|
|
$ |
76,675 |
|
|
$ |
(18,200 |
) |
|
$ |
58,475 |
|
| % of net
sales |
|
12.0 |
% |
|
13.2 |
% |
|
12.9 |
% |
|
12.9 |
% |
|
|
|
10.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Strategic initiatives
expenses |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,803 |
|
|
$ |
2,803 |
|
| TNW restructuring
expenses |
|
— |
|
|
1,938 |
|
|
— |
|
|
1,938 |
|
|
— |
|
|
1,938 |
|
| Inventory step-up purchase
accounting adjustments |
|
1,390 |
|
|
— |
|
|
— |
|
|
1,390 |
|
|
— |
|
|
1,390 |
|
| EBITDA,
adjusted |
|
$ |
13,804 |
|
|
$ |
30,021 |
|
|
$ |
36,178 |
|
|
$ |
80,003 |
|
|
$ |
(15,397 |
) |
|
$ |
64,606 |
|
| % of net
sales |
|
13.3 |
% |
|
14.1 |
% |
|
12.9 |
% |
|
13.4 |
% |
|
|
|
11.2 |
% |
Organic Sales(Unaudited)
| |
|
Quarter Ended September 30, 2019 |
| |
|
Performance Materials |
|
Technical Nonwovens |
|
Thermal Acoustical Solutions |
|
Consolidated |
| Sales growth, as
reported |
|
43.8 |
% |
|
(12.5 |
)% |
|
(0.3 |
)% |
|
3.7 |
% |
| Acquisitions and
divestitures |
|
48.9 |
% |
|
(4.0 |
)% |
|
— |
% |
|
8.9 |
% |
| Change in tooling
sales |
|
0.1 |
% |
|
— |
% |
|
(3.1 |
)% |
|
(1.4 |
)% |
| Foreign currency
translation |
|
(1.3 |
)% |
|
(1.7 |
)% |
|
(1.4 |
)% |
|
(1.6 |
)% |
| Organic sales
growth |
|
(3.9 |
)% |
|
(6.8 |
)% |
|
4.2 |
% |
|
(2.2 |
)% |
| |
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, 2019 |
| |
|
Performance Materials |
|
Technical Nonwovens |
|
Thermal Acoustical Solutions |
|
Consolidated |
| Sales growth, as
reported |
|
83.0 |
% |
|
(6.5 |
)% |
|
(1.5 |
)% |
|
11.8 |
% |
| Acquisitions and
divestitures |
|
84.9 |
% |
|
(2.3 |
)% |
|
— |
% |
|
14.4 |
% |
| Change in tooling
sales |
|
0.1 |
% |
|
— |
% |
|
(1.9 |
)% |
|
(0.9 |
)% |
| Foreign currency
translation |
|
(2.1 |
)% |
|
(3.2 |
)% |
|
(1.9 |
)% |
|
(2.5 |
)% |
| Organic sales
growth |
|
0.1 |
% |
|
(1.0 |
)% |
|
2.3 |
% |
|
0.8 |
% |
This press release provides information
regarding organic sales change, defined as net sales change
excluding (1) sales from acquired and divested businesses (2) the
impact of foreign currency translation and (3) tooling sales.
Management believes that the presentation of organic sales change
is useful to investors because it enables them to assess, on a
consistent basis, sales trends related to the Company selling
products to customers, without the impact of foreign currency rate
changes that are not under management's control and do not reflect
the performance of the Company and management. Tooling sales
are excluded because tooling revenue is not generated from selling
the Company's products to customers, but rather is reimbursement
from our customers for the design and production of tools used by
the Company in our manufacturing processes. Tooling sales can
be sporadic and may mask underlying business conditions and obscure
business trends.
For further information:
Brendan Moynihan
Vice President, Financial Planning and Investor Relations
Telephone 860-646-1233
Facsimile 860-646-4917
info@lydall.com
www.lydall.com
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