• EPS of $0.64 per share on sales of $134.6 million
• Operating margin of 12.7%, up 160 basis points versus adjusted Q2 2014 operating margin
• Organic sales down 70 basis points and unfavorable foreign currency translation of 5.5%
  
  

MANCHESTER, Conn., Aug. 04, 2015 (GLOBE NEWSWIRE) -- LYDALL, INC. (NYSE:LDL) today announced financial results for the second quarter ended June 30, 2015.

Net sales were $134.6 million compared to $148.8 million in the second quarter of 2014, with the reduction primarily driven by unfavorable foreign currency translation and the divestiture of a non-core business in the first quarter of 2015.  Net income was $10.8 million, or $0.64 per diluted share, in the second quarter of 2015 compared to $8.2 million, or $0.49 per diluted share, in the second quarter of 2014.  Changes in foreign currency translation rates decreased EPS by $0.03 per share in Q2 2015 compared to Q2 2014.  Excluding the impact of foreign currency translation, earnings per share in the current quarter increased 6% from adjusted earnings per share of $0.63 in the second quarter of 2014.

Dale Barnhart, President and Chief Executive Officer, stated, “I am very pleased with our second quarter results as we reported solid operating margin expansion and delivered earnings of $0.64 per share.  Consolidated quarterly operating margin of 12.7% demonstrates our continued measurable progress on driving profitable growth. We reported organic sales growth in all of our segments except for the Performance Materials segment that reported a 10% reduction.  Continued weakness in demand in North America and Asia for filtration products and for cryogenic insulation products serving the liquid natural gas market contributed to the decline in Performance Materials.  Even with lower consolidated sales, we were able to achieve excellent gross margin expansion of 190 basis points primarily from continued execution of lean initiatives across our businesses and realization of synergy programs in our Industrial Filtration segment.”

Below are financial highlights comparing Lydall’s quarter ended June 30, 2015 (“Q2 2015”) results to its quarter ended June 30, 2014 (“Q2 2014”) results:

• Net sales decreased by $14.2 million, or 9.6%, due to 5.5% of unfavorable foreign currency translation; lower net sales as a result of a divested business of 3.3%; organic sales decline of 0.7%; and a reduction in tooling net sales of 0.1%;

• Gross margin increased 190 basis points to 25.2%, compared to 23.3% in Q2 2014, due to improvements in the Industrial Filtration and Thermal/Acoustical Fibers segments;

• Operating margin was 12.7% in Q2 2015, compared to 8.4% in Q2 2014; adjusted operating margin was 11.1% in Q2 2014 which excluded a one-time sales commission expense of $2.9 million; purchase accounting adjustments and transaction expenses of $0.7 million related to the Industrial Filtration acquisition; and operating income of $0.3 million from a divested business;

• Net income was $10.8 million, or $0.64 per diluted share, in Q2 2015 compared to $8.2 million, or $0.49 per diluted share, in Q2 2014. Adjusted earnings per share were $0.63 per share in Q2 2014.
  
  

Mr. Barnhart added, “Looking forward to the remainder of 2015, we expect demand for our automotive products in the Thermal/Acoustical Fibers and Metals segments to continue to be healthy in both North America and Europe.  In addition, we expect improved operating results from our new Metals operation in China.  In the Industrial Filtration segment, we are seeing solid global order activity in the third quarter and consistent with prior periods, we expect sales for the first half of the year will be stronger than the second half due to normal seasonality.  In the Performance Materials segment, we anticipate improved results in the second half of 2015 compared to the first half of 2015.”

On July 31, 2015, the Company became aware of alleged inaccuracies in the timing of revenue recognition in its Industrial Filtration business in China, which was acquired on February 20, 2014.  This China business represented no more than 6% of Lydall’s consolidated net sales and no more than 3% of Lydall’s consolidated gross profit in any quarterly or annual period since the date of acquisition.  While the internal investigation is on-going, the Company currently believes the outcome will not have a material impact on the Company’s consolidated financial results.

Conference Call

Lydall will host a conference call on August 5, 2015, at 10:00 a.m. Eastern Time to discuss results for its second quarter ended June 30, 2015 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 August 5, 2015 through 11:59 p.m. Eastern Time, August 12, 2015 at (877) 344-7529, from within the U.S., or (412) 317-0088, internationally, pass code 10069322.  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.

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.

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 operating income, adjusted operating margin and adjusted earnings per share.  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 to 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.  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 meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  Any statements contained in this press release that are not statements of historical fact, including statements about the outlook for 2015, 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,” “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 cycles 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, disruptions in the global credit and financial markets, including diminished liquidity and credit availability, foreign currency volatility, swings in consumer confidence and spending, unstable economic growth, raw material pricing and supply issues, fluctuations in unemployment rates, increases in fuel prices, and outcomes of legal proceedings, claims and investigations (including the Chinese Industrial Filtration investigation), and with respect to possible violations of German anti-trust laws by employees in our German operation could have a negative impact on the Company’s results of operations and financial condition.  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 our filings with the Securities and Exchange Commission, including the risks and uncertainties identified in Part II, Item 1A - Risk Factors of Lydall’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and Part I, Item 1A - Risk Factors of Lydall’s Annual Report on Form 10-K for the year ended December 31, 2014.

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.

For further information:
David D. Glenn
Vice President, Business Development 
and Investor Relations
Telephone 860-646-1233 
Facsimile 860-646-4917
info@lydall.com
www.lydall.com