Lydall Announces Financial Results for the Third Quarter and Nine Months Ended September 30, 2013

Lydall Announces Financial Results for the Third Quarter and Nine Months Ended
September 30, 2013

MANCHESTER, Conn., Nov. 4, 2013 (GLOBE NEWSWIRE) -- LYDALL, INC. (NYSE:LDL)
today announced financial results for the third quarter and nine months ended
September 30, 2013.

Third Quarter 2013 ("Q3 2013") highlights compared to Third Quarter 2012 ("Q3
2012")

  *Net sales were $98.0 million, an increase of $3.8 million, or 4.1%,
    compared to Q3 2012;
    -- Foreign currency translation positively impacted net sales by $1.6
    million, or 1.6%;
  *Gross margin increased to 20.9%, an improvement of 45 basis points from Q3
    2012;
  *Selling, product development and administrative expenses were $13.1
    million, or 13.4% of net sales, compared to $14.1 million, or 14.9% of net
    sales in Q3 2012;
  *Operating income was $7.4 million, or 7.5% of net sales, compared to
    operating income of $5.2 million, or 5.5% of net sales, in Q3 2012;
  *Net income was $4.6 million, or $0.27 per diluted share, compared to $3.9
    million, or $0.23 per diluted share, in Q3 2012;
    -- Effective tax rate of 37.5% in Q3 2013 compared to 24.4% in Q3 2012,
    which included the reversal of valuation allowance of $0.5 million, or a
    benefit of $0.03 per diluted share;
  *Cash balance of $60.0 million at September 30, 2013, compared to $63.6
    million at December 31, 2012;
  *During 2013, $6.1 million was used to purchase approximately 423,000
    shares of Lydall's common stock under its repurchase program.

Net sales for the third quarter of 2013 were $98.0 million, an increase of
$3.8 million, or 4.1%, compared to the third quarter of 2012, from higher net
sales of $7.5 million in the Thermal/Acoustical Fibers segment. The segment
continued to benefit from increased production of vehicles on Lydall's
platforms in North America resulting in greater parts net sales of $3.1
million, as well as increased tooling revenues of $4.4 million to support the
launch of future vehicle platforms. Lower net sales were reported in the third
quarter of 2013, compared to the third quarter of 2012, by the Performance
Materials segment of $3.0 million, Thermal/Acoustical Metals segment of $0.7
million, and the Life Sciences Vital Fluids business of $0.2 million. Lower
net sales for the Performance Materials segment were primarily due to
decreased net sales of Industrial Filtration products of $1.5 million, driven
by lower global demand for air filtration products.Also, net sales of
Industrial Thermal Insulation products in the Performance Materials segment
decreased by $0.8 million, primarily due to the divestiture of the electrical
papers product line in a prior year.

Consolidated operating income was $7.4 million in the third quarter of 2013
compared to $5.2 million in the third quarter of 2012.The increase in
operating income was attributable to the Company's Thermal/Acoustical Fibers
and Thermal/Acoustical Metals segments, with increases in operating income of
$1.8 million and $1.1 million, respectively.The Thermal/Acoustical Metals
segment's third quarter 2012 operating income included an unfavorable $0.5
million customer pricing adjustment. These increases were offset to some
extent by a decrease in operating income in the Performance Materials segment
of $0.9 million and the Life Sciences Vital Fluids business of $0.2 million,
each in the third quarter of 2013 compared to the third quarter of
2012.Operating income for the Company in the third quarter of 2013 was
favorably impacted by lower selling, product development and administrative
expenses of $1.0 million, due to lower severance and recruiting charges of
$0.9 million and professional services of $0.8 million, primarily at the
corporate office, partially offset by company-wide higher salaries and
benefits expense.

Consolidated operating margin in the third quarter of 2013 was 7.5% compared
to 5.5% in the third quarter of 2012. This increase was primarily due to an
improvement in the Thermal/Acoustical Metals segment as a result of lower raw
material costs, favorable absorption of fixed overhead costs and a favorable
mix between parts and tooling net sales. In the third quarter of 2013,
compared to the third quarter of 2012, higher margin part sales increased by
$1.6 million while lower margin tooling sales decreased by $2.3 million.
Higher net sales and lower selling costs from the Thermal/Acoustical Fibers
segment also contributed to improved operating margin. These increases in
operating margin were partially offset by a decrease in the third quarter of
2013 operating margin in the Performance Materials segment primarily due to
lower net sales, lower absorption of fixed overhead costs, and unfavorable mix
among product sales.

Dale Barnhart, President and Chief Executive Officer, stated, "Overall, I am
pleased by the improvement in Lydall's operating results for the third quarter
of 2013 in comparison to our third quarter of 2012.Strong automotive parts
sales for our Thermal/Acoustical Fibers and Thermal/Acoustical Metals segments
in North America on existing platforms and new platform launches helped to
offset softness in demand within certain product lines in our Performance
Materials segment. 

"Entering the final quarter of 2013, the Company expects global demand for
products to remain stable with the most recent quarter. We believe our
operating results in the fourth quarter of 2013 will be impacted by an
unfavorable shift in product mix and seasonality, which effects production
activity and absorption of fixed costs. We anticipate that tooling sales
related to our Thermal/Acoustical Metals and Fibers segments will be robust as
Lydall continues to win new vehicle platforms.

"Lastly, as we previously announced, we are in the process of establishing a
new Thermal/Acoustical Metals manufacturing facility outside of Shanghai,
China.The business remains on schedule to be fully operational in the first
half of 2014."

Conference Call

Lydall will host a conference call today at 11:00 a.m. Eastern Time to discuss
results for its third quarter and nine months ended September 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
www.lydall.com under the Investor Relations' section.A recording of the call
will be available from 1:00 p.m. Eastern Time on November 4, 2013 through 9:00
a.m. Eastern Time, November 12, 2013 at (877) 344-7529, from within the U.S.,
or (412) 317-0088, internationally, conference number 10036127.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 Investors 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, Germany, China and sales offices in the U.S., Europe, and Asia,
manufactures specialty engineered products for the thermal/acoustical and
filtration/separation markets.For more information, visit
http://www.lydall.com.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 its subsidiaries.

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
860-646-1233, email:investor@lydall.com.

Summary of Operations
In thousands except per share data
(Unaudited)
                             Quarter Ended              Nine Months Ended
                             September 30,              September 30,
                             2013          2012         2013       2012
                                                                
Net sales                     $97,995     $94,167    $298,075 $288,456
Cost of sales                 77,501       74,898      233,179   227,953
Gross profit                  20,494       19,269      64,896    60,503
                                                                
Selling, product development  13,108       14,069      41,472    41,968
and administrative expenses
Gain on sale of product line  --          --         --       (810)
Operating income              7,386        5,200       23,424    19,345
                                                                
Interest expense              77           96          231       273
Other (income) expense, net   (16)         (19)        44        (3)
Income before income taxes    7,325        5,123       23,149    19,075
                                                                
Income tax expense            2,750        1,248       8,127     4,696
Net income                    $4,575      $3,875     $15,022  $14,379
                                                                
Earnings per share:                                              
Basic                        $0.28       $0.23      $0.90    $0.86
Diluted                      $0.27       $0.23      $0.89    $0.85
                                                                
Weighted average number of    16,437        16,630       16,599     16,742
common shares outstanding
Weighted average number of
common shares and equivalents 16,735        16,943       16,888     16,978
outstanding
                                                                
                                                                
Summary of Segment Information and Other Productsand Services
In thousands
(Unaudited)                   Quarter Ended              Nine Months Ended
                             September 30,              September 30,
                             2013          2012         2013       2012
Net Sales                                                        
                                                                
Performance Materials Segment $27,860     $30,810    $84,311  $92,421
Thermal/Acoustical Metals     35,849       36,596      116,971   116,394
Segment
Thermal/Acoustical Fibers     31,175       23,630      87,061    70,712
Segment
Other Products and Services:                                     
Life Sciences Vital Fluids   4,114        4,326       12,684    12,306
Eliminations and Others       (1,003)      (1,195)     (2,952)   (3,377)
Consolidated Net Sales        $97,995     $94,167    $298,075 $288,456
                                                                
Operating Income                                                 
                                                                
Performance Materials Segment $2,419      $3,325     $6,967   $10,427
Thermal/Acoustical Metals     3,742        2,612       11,191    11,729
Segment
Thermal/Acoustical Fibers     5,206        3,445       16,792    9,056
Segment
Other Products and Services:                                     
Life Sciences Vital Fluids   112          354         593       874
Corporate Office Expenses     (4,093)      (4,536)     (12,119)  (12,741)
Consolidated Operating Income $7,386      $5,200     $23,424  $19,345
                                                                
                                                                
Financial Position                                               
In thousands except ratio     September 30, December 31,           
data                          2013          2012
(Unaudited)                                                      
Cash and cash equivalents     $59,996     $63,623              
Working capital               $122,009    $105,451             
Total debt                    $1,919      $2,411               
Stockholders' equity          $187,904    $174,496             
Total capitalization          $189,823    $176,907             
Current ratio                 3.4          3.3                   
Total debt to total           1.0%          1.4%                   
capitalization
                                                                
                                                                
Cash Flows
In thousands                  Quarter Ended              Nine Months Ended
(Unaudited)                   September 30,              September 30,
                             2013          2012         2013       2012
                                                                
Net cash provided by          $4,428      $6,684     $10,908  $19,211
operating activities
Net cash (used for) provided  $(3,987)    $(1,160)   $(9,660) $5,070
by investing activities
Net cash used for financing   $(35)       $(469)     $(5,546) $(3,551)
activities
Depreciation and amortization $3,045      $3,357     $9,586   $10,346
Capital expenditures          $(3,987)    $(2,160)   $(9,502) $(7,945)
                                                                
                                                                
Common Stock Data
Quarter Ended September 30,   2013          2012                   
                                                                
High                          $17.18      $14.43               
Low                           $14.53      $12.12               
Close                         $17.17      $14.09               
                                                                
                                                                
During the third quarter of 2013, 2,583,700 shares of Lydall common stock
(LDL) were traded on the New York Stock Exchange.
                                                                

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