Lydall Announces Financial Results for the Second Quarter and Six Months Ended June 30, 2013

Lydall Announces Financial Results for the Second Quarter and Six Months Ended
June 30, 2013

today announced financial results for the second quarter and six months ended
June 30, 2013.

Second Quarter 2013 ("Q2 2013") highlights compared to Second Quarter 2012
("Q2 2012")

  oNet sales of $101.1 million compared to $97.5 million in Q2 2012, or a
    3.6% increase
  oGross margin of 22.8%, an improvement of 25 basis points from Q2 2012
  oOperating income of $9.5 million (9.4% of net sales), compared to $8.7
    million (9.0% of net sales) in Q2 2012
    -- Operating income in Q2 2012 included a gain of $0.4 million (0.4% of
    net sales) from services provided under a completed license agreement
  oNet income was $6.0 million, or $0.35 per share, compared to $6.6 million,
    or $0.39 per share in Q2 2012
    -- Effective tax rate of 36.8% in Q2 2013 included a discrete tax benefit
    of $0.3 million, or $0.02 per share
    -- Effective tax rate of 24.1% in Q2 2012 included the reversal of
    valuation allowance of $1.3 million, or $0.08 per share
  oCash balance of $58.5 million at June 30, 2013, compared to $63.6 million
    at December 31, 2012; and
  oDuring 2013, approximately $6.0 million was used to purchase approximately
    423,000 shares of Lydall's common stock under its repurchase program

Net sales for Q2 2013 increased $3.5 million, or 3.6%, compared to Q2 2012,
primarily from higher sales volumes in the Thermal/Acoustical Metals ("T/A
Metals") and Thermal/Acoustical Fibers ("T/A Fibers") segments of $3.2 million
and $3.0 million, respectively, and to a lesser extent, improved Life Sciences
– Vital Fluids net sales (included in Other Products and Services) of $0.5
million, which were partially offset by lower net sales in the Performance
Materials segment of $3.6 million. The increase in net sales for the T/A
Metals segment was primarily due to greater tooling revenues of $3.0 million
in North America and Europe to support the launch of new vehicle platforms.
The T/A Fibers segment continued to benefit from increased production of
vehicles on Lydall's platforms in North America, which contributed to higher
fiber automotive parts net sales of $2.3 million in Q2 2013 compared to Q2
2012. The remaining increase in T/A Fibers net sales was attributable to
tooling.Lower net sales for the Performance Materials segment in Q2 2013 were
primarily due to lower industrial thermal insulation product net sales of $2.5
million, including a reduction of $1.5 million in net sales of electrical
paper products attributable to the divestiture of a product line in a prior
year, and lower net sales of life sciences products of $0.8 million in Q2 2013
compared to Q2 2012.

Operating income in Q2 2013 was $9.5 million, or 9.4% of net sales, compared
to operating income of $8.7 million, or 9.0% of net sales, in Q2 2012.This
increase of $0.8 million was driven primarily by the T/A Fibers segment that
reported an increase of $2.1 million, due to higher sales volume and improved
gross margin from lower raw material costs, reductions in scrap, material
usage and labor costs.T/A Metals segment operating income increased by $0.4
million in Q2 2013 compared to Q2 2012, primarily due to higher gross margin
from automotive parts from lower raw material costs and improved scrap and
material usage rates that were partially offset by the mix between higher
margin automotive parts and lower margin tooling.Performance Materials
segment operating income was $3.3 million in Q2 2013, a reduction of $1.7
million compared to Q2 2012, primarily due to lower net sales. Also, Q2 2012
included a gain of $0.4 million from services completed under a license

Dale Barnhart, President and Chief Executive Officer, stated, "Overall, I am
pleased with Lydall's results for the second quarter of 2013 as our
consolidated operating margin was at the highest level of any quarterly period
in recent history. We continue to benefit from strong demand for our T/A
Fibers automotive parts in North America on existing platforms and new
platform launches. This quarter we also saw improvement in European demand
for Lydall's T/A Metals automotive parts and industrial filtration products in
our Performance Materials segment compared to the first quarter of 2013.

"In the third quarter of 2013, we expect favorable conditions to continue in
the North American automotive market and anticipate demand to be consistent
with the first half of 2013.In the Performance Materials segment, we
anticipate that positive trends in volume in both North America and Europe
will continue."

Conference Call

Lydall will host a conference call today at 11:00 a.m. Eastern Time to discuss
results for its second quarter and six months ended June 30, 2013 as well as
general matters related to its businesses and markets.The call may be
accessed at (888) 317-6016, from within the U.S., or (412) 317-6016,
internationally, and will be webcast live on the Company's web site under the Investor Relations' section.A recording of the call
will be available from 1:00 p.m. Eastern Time on August 1, 2013 through 9:00
a.m. Eastern Time, Friday August 9, 2013 at (877) 344-7529, from within the
U.S., or (412) 317-0088, internationally, conference number 10031971.Also,
additional information including a presentation outlining key financial data
supporting today's conference call can be found on the Company's website 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 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 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
include, among others, worldwide economic cycles that affect the markets which
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, swings in consumer confidence and spending, unstable economic
growth, raw material pricing and supply issues, 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.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 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

Summary of Operations                                            
In thousands except per share                                    
                             Quarter Ended              Six Months Ended
                             June 30,                   June 30,
                             2013          2012         2013       2012
Net sales                     $101,051    $97,535    $200,080 $ 194,289
Cost of sales                 78,014       75,542      155,678   153,055
Gross profit                  23,037       21,993      44,402    41,234
Selling, product development  13,516       13,655      28,364    27,899
and administrative expenses
Gain on sale of product line  --          (405)       --       (810)
Operating income              9,521        8,743       16,038    14,145
Interest expense              76           87          154       177
Other expense (income), net   18           (27)        60        16
Income before income taxes    9,427        8,683       15,824    13,952
Income tax expense            3,472        2,091       5,377     3,448
Net income                    $5,955      $6,592     $10,447  $10,504
Earnings per share:                                              
Basic                         $0.36       $0.39      $0.63    $0.63
Diluted                       $0.35       $0.39      $0.62    $0.62
Weighted average number of    16,612        16,770       16,674     16,799
common shares outstanding
Weighted average number of
common shares and equivalents 16,831        16,962       16,927     16,939
Summary of Segment
Information and Other                                            
and Services                                                     
In thousands                                                     
(Unaudited)                   Quarter Ended              Six Months Ended
                             June 30,                   June 30,
                             2013          2012         2013       2012
Net Sales                                                        
Performance Materials Segment $28,968     $32,523    $56,451  $61,611
Thermal/Acoustical Metals     40,920       37,685      81,122    79,798
Thermal/Acoustical Fibers     27,959       24,910      55,886    47,082
Other Products and Services:                                     
Life Sciences Vital Fluids    4,263        3,749       8,570     7,980
Eliminations and Others       (1,059)      (1,332)     (1,949)   (2,182)
Consolidated Net Sales        $101,051    $97,535    $200,080 $ 194,289
Operating Income                                                 
Performance Materials Segment $3,271      $4,982     $4,548   $7,102
Thermal/Acoustical Metals     4,431        4,050       7,449     9,117
Thermal/Acoustical Fibers     5,432        3,382       11,586    5,611
Other Products and Services:                                     
Life Sciences Vital Fluids    125          211         481       520
Corporate Office Expenses     (3,738)      (3,882)     (8,026)   (8,205)
Consolidated Operating Income $9,521      $8,743     $16,038  $14,145
Financial Position                                               
In thousands except ratio     June 30, 2013 December 31,           
data                                        2012
Cash and cash equivalents     $58,542     $63,623              
Working capital               $114,265    $105,451             
Total debt                    $2,007      $2,411               
Stockholders' equity          $179,651    $174,496             
Total capitalization          $181,658    $176,907             
Current ratio                 3.3          3.3                   
Total debt to total           1.1%          1.4%                   
Cash Flows                                                       
In thousands                  Quarter Ended              Six Months Ended
(Unaudited)                   June 30,                   June 30,
                             2013          2012         2013       2012
Net cash provided by          $9,697      $11,914    $6,480   $12,527
operating activities
Net cash (used for) provided  $(3,210)    $(2,823)   $(5,673) $6,230
by investing activities
Net cash used for financing   $(5,707)    $(2,724)   $(5,511) $(3,082)
Depreciation and amortization $3,196      $3,425     $6,541   $6,989
Capital expenditures          $(3,052)    $(2,823)   $(5,515) $(5,785)
Common Stock Data                                                
Quarter Ended June 30,        2013          2012                   
High                          $15.38      $13.62               
Low                           $13.29      $9.94                
Close                         $14.60      $13.52               
During the second quarter of 2013, 2,868,400 shares of Lydall common stock
(LDL) were traded on the New York Stock Exchange.

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