Lydall Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2012 MANCHESTER, Conn., Feb. 26, 2013 (GLOBE NEWSWIRE) -- LYDALL, INC. (NYSE:LDL) today announced financial results for the fourth quarter and year ended December 31, 2012. Fourth Quarter 2012 ("Q4 2012") compared to Fourth Quarter 2011 ("Q4 2011") *Net sales were $90.5 million, including unfavorable foreign currency translation of $1.3 million, or 1.4%, compared to $89.3 million *Operating income of $2.0 million, or 2.2%, compared to $4.4 million, or 4.9% - Q4 2012 operating income included an asset impairment charge of $1.8 million - Q4 2011 operating income included income of $0.8 million from a completed pricing negotiation and $0.4 million of income from a license agreement *Net income of $2.4 million, or $0.14 per share, compared to $2.7 million, or $0.16 per share - Income tax benefit of $0.5 million included a reversal of valuation allowance on a foreign tax credit carryover of $1.3 million, or $0.08 per share 2012 Year Highlights *Net sales were $378.9 million, including unfavorable foreign currency translation impact of $10.6 million, or 2.8%, compared to $383.6 million in 2011 *Gross margin of 20.5%, an improvement of 290 basis points from 2011, primarily from operational efficiency improvements in the Thermal/Acoustical Fibers segment *Operating income of $21.4 million, or 5.6%, compared to $16.2 million, or 4.2% in 2011 - 2012 operating income included the asset impairment charge of $1.8 million and $0.8 million of income from a license agreement - 2011 operating income included $1.6 million of income from a license agreement *Effective tax rate for 2012 of 19.9%, primarily as a result of reversal of valuation allowance on a foreign tax credit carryover of $3.9 million, or $0.23 per share, compared to an effective tax rate of 41.3% in 2011 *Income from continuing operations in 2012 was $16.8 million, or $0.99 per share, compared to $9.1 million, or $0.54 per share in 2011 *Net income of $16.8 million, or $0.99 per share, compared to net income in 2011 of $13.8 million, or $0.82 per share Liquidity *Cash provided by operations of $15.2 million in Q4 2012 ($34.4 million in full year 2012) compared to cash provided by operations of $12.6 million in Q4 2011 ($14.7 million in full year 2011) *Cash and short-term investments of $63.6 million at December 31, 2012 compared to $42.9 million at December 31, 2011 Net sales of $90.5 million in Q4 2012 were $1.1 million greater than Q4 2011. Increased sales volume from the Thermal/Acoustical Fibers ("T/A Fibers") segment of $3.3 million and the Life Sciences Vital Fluids business ("VF business") of $0.8 million, included in Other Products and Services, were partially offset by lower net sales from the Performance Materials ("PM") and Thermal/Acoustical Metals ("T/A Metals") segments of $2.1 million and $0.7 million, respectively.Higher consumer demand in North America for vehicles on Lydall's existing platforms and new platform awards contributed to the increased net sales for the T/A Fibers segment.Lower net sales for the Performance Materials segment were primarily due to decreased volumes of Industrial Thermal Insulation products of $1.4 million, specifically with lower sales of electrical papers products, as the product line was sold to a customer in a prior year. The Company reported operating income of $2.0 million, or 2.2% of net sales, in the fourth quarter of 2012 compared to $4.4 million, or 4.9% of net sales, in the fourth quarter of 2011. The T/A Fibers segment reported operating income of $3.8 million in Q4 2012, an improvement of $3.1 million compared to Q4 2011, due to improved gross profit as a result of increased net sales, improved manufacturing processes and a lower cost structure.The VF business reported operating income of $0.3 million in Q4 2012, an improvement of $0.6 million compared to Q4 2011, primarily due to increased net sales in blood filtration and bioprocessing products and a lower cost structure.The PM segment broke even during the fourth quarter of 2012, a decrease in operating income of $3.0 million compared to Q4 2011, primarily due to lower gross profit in Q4 2012.Lower net sales of $2.1 million in Q4 2012, unfavorable mix of product sales and under-absorption of fixed overhead costs contributed to lower gross profit in the PM segment.Also, Q4 2012 included an asset impairment charge of $0.3 million, while Q4 2011 included $0.4 million of gain from services provided under a licensing agreement.T/A Metals operating income in the current quarter was lower by $1.7 million compared to Q4 2011, primarily due to lower gross profit as a result of unfavorable mix in sales between parts and tooling.Also, the fourth quarter of 2011 included $0.8 million of gross profit associated with a completed pricing negotiation with a customer that was related to shipments during the first nine months of 2011. The Company previously announced a change to its information technology software and systems strategy from a project involving an ERP reimplementation to a project involving an ERP upgrade and some additional applications software.As a result of this change in IT strategy, the Company recorded a non-cash $1.8 million asset impairment charge in the quarter ended December 31, 2012 ($1.5 million in corporate office expenses and $0.3 million in the Performance Materials segment). Income tax benefit of $0.5 million in Q4 2012 included a reversal of valuation allowance against foreign tax credit carryovers of $1.3 million, or $0.08 per share, as these credits will be used to offset 2012 or future U.S. taxable income. Dale Barnhart, President and Chief Executive Officer, stated, "Lydall reported mixed results for the fourth quarter of 2012.Our Thermal/Acoustical Fibers segment continued to benefit from strong consumer demand for vehicles in the U.S. and sustainable operating improvements.However, our Performance Materials segment was negatively impacted by lower demand and mix of products sold to our customers.Overall, I am pleased with 2012, as all segments and OPS generated operating income in a volatile global economic environment. "Entering 2013, we remain cautiously optimistic despite the continued uncertainty in the macro-economic environment.Instability of the global economy, particularly in Europe and Asia, provides an element of risk and uncertainty in the Company's near term outlook for the Performance Materials and Thermal/Acoustical Metals segments.However, in the Performance Materials segment, we are beginning to see positive signs in certain markets for Industrial Thermal Insulation products in the U.S. and Industrial Filtration products in Asia. As always, we remain focused on increasing margins in all operations and are dedicated to improving operating efficiency through Lean Six Sigma programs." Conference Call Lydall will host a conference call today at 11:00 a.m. ET to discuss results for its fourth quarter and year ended December 31, 2012 as well as general matters related to its businesses and markets.The call may be accessed at (877) 303-3204 and will be webcast live on the Company's web site www.lydall.com under the Investor Relations' section.A recording of the call will be available from 2:00 p.m. ET on February 26, 2013 through midnight on March 5, 2013 at (855) 859-2056 or (404) 537-3406, pass code 14364921.Also, additional information including a presentation outlining key financial data supporting today's conference call can be found on the Company's website www.lydall.com under the Investor Relations' section. Lydall, Inc. is a New York Stock Exchange listed company, headquartered in Manchester, Connecticut.The Company, with operations in the U.S., France, the Netherlands and Germany and sales offices in the U.S., Europe, and Asia, focuses on manufacturing specialty engineered products for the thermal/acoustical, filtration/separation and bio/medical markets. Lydall(R)is a registered trademark of Lydall, Inc. in the U.S. and other countries.All product names are trademarks of Lydall, Inc. or Charter Medical, Ltd. Cautionary Note Concerning Factors That May Affect Future Results 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 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 the words "believes," "anticipates," "may," "plans," "projects," "expects," "estimates," "forecasts," "predicts," "targets," and other similar expressions 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 include, among others, worldwide economic cycles that affect the markets which the businesses serve could affect 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, swings in consumer confidence and spending, unstable economic growth, fluctuations in unemployment rates, and increases in fuel prices, which could cause economic instability and 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.Therefore, investors 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 I, Item 1A - Risk Factors of Lydall's Annual Report on Form 10-K for the year ended December 31, 2012. 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.Information may also be obtained from the Company Contact: David D. Glenn, Director of Business Development and Investor Relations, One Colonial Road, Manchester, CT 06042; Telephone 860-646-1233, email:firstname.lastname@example.org. Summary of Operations In thousands except per share data (Unaudited) Quarter Ended Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 Net sales $90,468 $89,343 $378,924 $383,588 Cost of sales 73,164 72,411 301,117 316,082 Gross profit 17,304 16,932 77,807 67,506 Selling, product development and 15,271 12,946 57,239 52,937 administrative expenses Gain on sale of product line, net -- (405) (810) (1,619) Operating income 2,033 4,391 21,378 16,188 Interest expense 92 94 365 880 Other expense (income), net 34 (107) 31 (94) Income from continuing operations 1,907 4,404 20,982 15,402 before income taxes Income tax (benefit) expense (520) 1,736 4,176 6,355 Income from continuing operations 2,427 2,668 16,806 9,047 Income from discontinued operations, -- -- -- 4,732 net of tax Net income $2,427 $2,668 $16,806 $13,779 Basic earnings per share: Continuing operations $0.15 $0.16 $1.01 $0.54 Discontinued operations $-- $-- $-- $0.28 Net Income $0.15 $0.16 $1.01 $0.82 Diluted earnings per share: Continuing operations $0.14 $0.16 $0.99 $0.54 Discontinued operations $-- $-- $-- $0.28 Net Income $0.14 $0.16 $0.99 $0.82 Weighted average common shares 16,641 16,779 16,717 16,753 outstanding Weighted average common shares and 16,938 16,918 16,973 16,896 equivalents outstanding Summary of Segment Information and Other Productsand Services In thousands Quarter Ended Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 Net Sales Performance Materials Segment $25,614 $27,699 $118,035 $134,059 Thermal/Acoustical Metals Segment 37,527 38,207 153,921 155,936 Thermal/Acoustical Fibers Segment 23,724 20,406 94,436 81,747 Other Products and Services: Life Sciences Vital Fluids 4,547 3,711 16,853 14,670 Reconciling Items (944) (680) (4,321) (2,824) Consolidated Totals $90,468 $89,343 $378,924 $383,588 Operating Income Performance Materials Segment $(27) $2,961 $10,400 $18,194 Thermal/Acoustical Metals Segment 2,979 4,671 14,708 15,915 Thermal/Acoustical Fibers Segment 3,795 673 12,851 (3,055) Other Products and Services: Life Sciences Vital Fluids 316 (287) 1,190 (1,040) Corporate Office Expenses (5,030) (3,627) (17,771) (13,826) Consolidated Totals $2,033 $4,391 $21,378 $16,188 Financial Position In thousands except ratio December 31, December 31, data 2012 2011 (Unaudited) Cash and cash equivalents $63,623 $30,905 Short-term investments $-- $12,015 Working capital $105,451 $86,021 Total debt $2,411 $3,296 Stockholders' equity $174,496 $160,852 Total capitalization $176,907 $164,148 Current ratio 3.3 2.9 Total debt to total 1.4% 2.0% capitalization Cash Flows In thousands (Unaudited) Quarter Ended Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 Net cash provided by $15,194 $12,583 $34,405 $14,657 operating activities Net cash (used for) provided by investing $(3,459) $(2,277) $1,611 $(6,309) activities Net cash used for $(320) $(622) $(3,871) $(1,621) financing activities Depreciation and $3,309 $3,434 $13,572 $14,478 amortization Capital expenditures $(3,459) $(2,939) $(11,404) $(8,884) Common Stock Data Quarter Ended December 31, 2012 2011 High $14.65 $11.70 Low $11.68 $7.75 Close $14.34 $9.49 During the fourth quarter of 2012, 3,123,621 shares of Lydall common stock (LDL) were traded on the New York Stock Exchange. CONTACT: Lydall, Inc. One Colonial Road Manchester, CT 06042-2378 Telephone 860-646-1233 Facsimile 860-646-4917 www.lydall.com company logo
Lydall Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2012
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