LYDALL, INC. (NYSE: LDL) today announced financial results for the
fourth quarter ended December 31, 2020.
“Lydall’s solid financial results in the fourth
quarter validate the tenets of our recently announced strategy and
the strength of our attractive product portfolio. Adjusted EBITDA
grew over 40% from the same period last year and strong cash flow
enabled us to fund organic investments in the business while
accelerating debt paydown” said Sara A. Greenstein, President and
Chief Executive Officer.
“Strong demand continued for Performance
Materials (“PM”) specialty filtration products, and we saw a sharp
recovery in sealing products,” commented Ms. Greenstein. PM
specialty filtration sales grew 51% or $11.3 million, including
$5.0 million of one-time purchases related to a previously
announced facility closure; sealing and advanced solutions sales
grew by 17.9%. Ms. Greenstein added, “In late December we
successfully commissioned a new fine fiber meltblown production
line in Rochester, New Hampshire and reached full capacity in
January. Additional capacity at Rochester and St. Rivalain, France
is on schedule for production in early third quarter. All of these
projects are expected to be strong profitable growth contributors
in 2021."
Parts sales in the Thermal Acoustical Solutions
(“TAS”) segment grew 9.4% compared to last year, and 4.1% compared
to the third quarter of 2020.
While the Technical Nonwovens (“TNW”) segment
saw a sales decline of 4.1%, adjusted EBITDA margin remained
consistent at 11.8%, down only 20 basis points from prior year. Ms.
Greenstein concluded, “The TNW business has done a great job
throughout 2020 delivering consistent levels of profitability
throughout a very dynamic and challenging market environment.”
Q4 2020 Consolidated
Results
Net sales of $210.3 million increased by $17.0
million, or 8.8% compared to the fourth quarter of 2019. Net of
foreign exchange and tooling, consolidated sales were up 8.9%, led
by 28.3% growth in PM on strong specialty filtration and sealing
volumes, and 6.0% growth in TAS on robust automotive demand,
partially offset by softer demand in the TNW segment.
Operating income of $4.5 million was up $73.0
million dollars from the fourth quarter 2019, which included
impairment charges of $64.2 million.
Consolidated adjusted EBITDA of $17.7 million
was up sharply from $12.4 million dollars reported in the fourth
quarter of 2019. Adjusted EBITDA margin of 8.4% expanded 200 basis
points from prior year. This was led by strong margin gains in PM
which delivered adjusted EBITDA margin of 25.5%, up 500 basis
points sequentially from third quarter driven by high margin
one-time buys of membrane-based filtration media from our
Netherlands facility that will be closed in 2021.
Randall B. Gonzales, Chief Financial Officer,
commented, “PM continues to drive very strong operating results,
and we anticipate further margin expansion in 2021, excluding the
one-time purchases, as additional meltblown capacity comes online
throughout the year.” Adjusted EBITDA margin of 2.3% in TAS was
unfavorably impacted by higher absenteeism in the North America TAS
operation related to COVID-19, which resulted in the need for
higher cost temporary workforce solutions to meet the elevated
customer demand. Mr. Gonzales concluded, “Lydall’s fourth quarter
results provide strong momentum into 2021 as we execute our
strategy, expand EBITDA margins, drive healthy cash flow, and
improve return on invested capital.”
Liquidity
Net cash provided by operations for the full
year 2020 was $74.2 million, driving a cash balance of $102.2
million at December 31, 2020. Mr. Gonzales concluded, "Our
disciplined focus on cash flow and pragmatic approach to liquidity
throughout 2020 has given Lydall the flexibility to navigate
unprecedented impacts of the pandemic while investing strategically
in fine fiber meltblown capacity to address the sustained demand in
the specialty filtration market." At December 31, 2020, the
Company’s total debt, net of cash was $168.3 million, down $53.0
million from 2019 ending balance, resulting in a net debt leverage
ratio of 2.5, an improvement of 0.3 turns.
Outlook
“In December we communicated our strategy to
deliver sustained shareholder value and our fourth quarter results
represent the focus and commitment Lydall has to executing on this
vision. Over the course of 2020 we navigated a global pandemic, a
shutdown of global automotive production, ongoing supply chain
disruptions, uncertain economic and political environments, and
have emerged a stronger and more agile company. We will continue to
execute to ensure we achieve the objectives outlined in our
strategy by efficiently deploying capital to profitably grow in
specialty filtration and advanced materials solutions."
Ms. Greenstein concluded, "We anticipate
continued healthy demand and order activity across all three
segments as the end markets we serve recover from a tumultuous
2020. Additionally, elevated demand for specialty filtration
solutions are expected to continue beyond 2021 as the structural
shift towards better indoor and outdoor air quality drives further
demand for these products."
Conference Call
Lydall will host a conference call on February
24, 2021 at 10:00 a.m. Eastern Time to discuss results for its
fourth quarter ended December 31, 2020 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 February 24, 2021 through 11:59 p.m. Eastern Time on March
3, 2021 at (877) 344-7529, from within the U.S., or (412) 317-0088,
internationally, access code 10152279. 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 2021, the expected impact of the coronavirus pandemic
(COVID-19) on the Company's businesses, and optimizing profit 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, disruptions in the global
credit and financial markets, including diminished liquidity and
credit availability, changes in international trade agreements,
including tariffs and trade restrictions, disruptions in the
Company's businesses from the coronavirus pandemic (COVID-19),
foreign currency volatility, swings in consumer confidence and
spending, raw material pricing and supply issues, retention of key
employees, 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, 2020.
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.
Headquartered in Manchester, Connecticut with
global manufacturing operations, Lydall delivers value-added
engineered materials and specialty filtration solutions that
promote a cleaner, quieter and safer world. We partner with our
customers to develop bespoke, high-performing and efficient
solutions that are adaptable and scalable to meet their needs.
Lydall is a New York Stock Exchange-listed company. 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Net sales |
$ |
210,269 |
|
|
$ |
193,288 |
|
|
$ |
764,041 |
|
|
$ |
837,398 |
|
Cost of sales |
170,310 |
|
|
165,035 |
|
|
619,166 |
|
|
684,978 |
|
Gross profit |
39,959 |
|
|
28,253 |
|
|
144,875 |
|
|
152,420 |
|
|
|
|
|
|
|
|
|
Selling, product development
and administrative expenses |
34,510 |
|
|
32,372 |
|
|
129,928 |
|
|
126,272 |
|
Impairment of goodwill and
other long-lived assets |
— |
|
|
64,206 |
|
|
61,109 |
|
|
64,206 |
|
Restructuring expenses |
919 |
|
|
176 |
|
|
15,903 |
|
|
767 |
|
Operating income (loss) |
4,530 |
|
|
(68,501 |
) |
|
(62,065 |
) |
|
(38,825 |
) |
|
|
|
|
|
|
|
|
Employee benefit plans
settlement (income) expenses |
— |
|
|
(454 |
) |
|
385 |
|
|
25,247 |
|
Interest expense |
4,109 |
|
|
3,237 |
|
|
15,979 |
|
|
14,262 |
|
Other expense (income),
net |
2,060 |
|
|
102 |
|
|
2,166 |
|
|
(1,257 |
) |
Loss before income taxes |
(1,639 |
) |
|
(71,386 |
) |
|
(80,595 |
) |
|
(77,077 |
) |
|
|
|
|
|
|
|
|
Income tax benefit |
(1,889 |
) |
|
(897 |
) |
|
(6,833 |
) |
|
(6,416 |
) |
Income from equity method
investment |
(13 |
) |
|
(28 |
) |
|
(37 |
) |
|
(148 |
) |
Net income
(loss) |
$ |
263 |
|
|
$ |
(70,461 |
) |
|
$ |
(73,725 |
) |
|
$ |
(70,513 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
|
$ |
(4.07 |
) |
|
$ |
(4.24 |
) |
|
$ |
(4.08 |
) |
Diluted |
$ |
0.01 |
|
|
$ |
(4.07 |
) |
|
$ |
(4.24 |
) |
|
$ |
(4.08 |
) |
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding |
17,426 |
|
|
17,293 |
|
|
17,379 |
|
|
17,271 |
|
Weighted average number of
common shares and equivalents outstanding |
17,570 |
|
|
17,293 |
|
|
17,379 |
|
|
17,271 |
|
Summary of Segment
Information |
|
|
|
|
|
|
|
|
and Corporate Office
Expenses |
|
|
|
|
|
|
|
|
In thousands |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2020 |
|
2019 (7) |
|
2020 |
|
2019 (7) |
Net
Sales |
|
|
|
|
|
|
|
|
Performance Materials Segment (1) |
|
$ |
73,135 |
|
|
$ |
55,798 |
|
|
$ |
264,645 |
|
|
$ |
245,480 |
|
Technical Nonwovens Segment
(1),(2) |
|
54,421 |
|
|
56,750 |
|
|
222,340 |
|
|
255,346 |
|
Thermal Acoustical
Solutions |
|
88,075 |
|
|
86,066 |
|
|
294,807 |
|
|
361,577 |
|
Eliminations and Other
(1) |
|
(5,362 |
) |
|
(5,326 |
) |
|
(17,751 |
) |
|
(25,005 |
) |
Consolidated Net Sales |
|
$ |
210,269 |
|
|
$ |
193,288 |
|
|
$ |
764,041 |
|
|
$ |
837,398 |
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
|
|
|
|
|
|
Performance Materials Segment
(3) |
|
$ |
12,213 |
|
|
$ |
(65,278 |
) |
|
$ |
(46,044 |
) |
|
$ |
(59,804 |
) |
Technical Nonwovens Segment
(2),(4) |
|
3,041 |
|
|
3,152 |
|
|
18,599 |
|
|
22,895 |
|
Thermal Acoustical Solutions
(5) |
|
(1,388 |
) |
|
1,720 |
|
|
(871 |
) |
|
23,590 |
|
Corporate Office Expenses
(6) |
|
(9,336 |
) |
|
(8,095 |
) |
|
(33,749 |
) |
|
(25,506 |
) |
Consolidated Operating Income
(Loss) |
|
$ |
4,530 |
|
|
$ |
(68,501 |
) |
|
$ |
(62,065 |
) |
|
$ |
(38,825 |
) |
(1) Included in the Performance
Materials Segment, Technical Nonwovens Segment and Eliminations and
Other are the following:
- Performance Materials segment
intercompany sales of $1.2 million and $0.9 million to the Thermal
Acoustical Solutions segment for the three-months ended
December 31, 2020 and 2019, respectively.
- Performance Materials segment
intercompany sales of $3.3 million and $4.0 million to the Thermal
Acoustical Solutions segment for the twelve-months ended
December 31, 2020 and 2019, respectively.
- Technical Nonwovens segment
intercompany sales of $4.2 million and $4.4 million to the Thermal
Acoustical Solutions segment for the three-months ended
December 31, 2020 and 2019, respectively.
- Technical Nonwovens segment
intercompany sales of 14.5 million and 21.0 million to the Thermal
Acoustical Solutions segment for the twelve-months ended
December 31, 2020 and 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
Performance Materials segment is the following:
- $64.2 million of impairment charges
related to goodwill and other long-lived assets for the three-month
periods ended December 31, 2019.
- $61.1 million and $64.2 million of
impairment charges related to goodwill and other long-lived assets
for the twelve-month period ended December 31, 2020 and 2019,
respectively.
- $0.7 million and $15.5 million
restructuring charges for the three and twelve-month periods ending
December 31, 2020.
- $3.9 million and
$4.1 million of intangible assets amortization for the
three-month periods ended December 31, 2020 and 2019,
respectively.
- $15.8 million and
$16.2 million of intangible assets amortization for the
twelve-month periods ended December 31, 2020 and 2019,
respectively.
(4) Included in the Technical
Nonwovens segment is the following:
- $1.2 million and
$1.3 million of intangible assets amortization for the
three-months ended December 31, 2020 and 2019,
respectively.
- $4.8 million and
$5.1 million of intangible assets amortization for the
twelve-month periods ended December 31, 2020 and 2019,
respectively.
- $0.2 million and
$0.8 million restructuring charges for the three and
twelve-month periods ending December 31, 2019.
(5) Included in the Thermal
Acoustical Solutions segment is $0.3 million and
$0.5 million of reduction-in-force costs for the three and
twelve-month periods ended December 31,
2020.(6) Included in the Corporate Office Expenses
are the following:
- $2.3 million in CEO transition
expenses for the three and twelve-month periods ended December 31,
2019.
- $0.2 million in corporate
strategic initiatives for the three-month period ended December 31,
2019.
- $3.1 million and
$1.5 million in corporate strategic initiatives for the
twelve-month periods ended December 31, 2020 and 2019,
respectively.
- $0.2 million and
$0.4 million restructuring charges for the three and
twelve-month periods ending December 31, 2020.
(7) Included in the operating
results across all segments is a total of $1.9 million of
reduction-in-force severance expenses for the three and
twelve-month periods ended December 31, 2019.
Financial
Position |
|
|
|
|
In thousands except ratio
data |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
102,176 |
|
|
$ |
51,331 |
|
Working capital |
|
$ |
161,763 |
|
|
$ |
153,739 |
|
Total debt |
|
$ |
270,438 |
|
|
$ |
272,641 |
|
Stockholders' equity |
|
$ |
257,696 |
|
|
$ |
318,420 |
|
Total capitalization |
|
$ |
528,134 |
|
|
$ |
591,061 |
|
Total debt to total
capitalization |
|
51.2 |
% |
|
46.1 |
% |
Cash
Flows |
|
|
|
|
|
|
|
|
In thousands |
|
For the Three Months Ended |
|
For the Twelve Months Ended |
(Unaudited) |
|
December 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net cash (used for) provided by operating activities |
|
$ |
(446 |
) |
|
$ |
23,898 |
|
|
$ |
74,167 |
|
|
$ |
86,862 |
|
Net cash used for investing
activities |
|
$ |
(11,364 |
) |
|
$ |
(8,613 |
) |
|
$ |
(27,633 |
) |
|
$ |
(32,385 |
) |
Net cash used for financing
activities |
|
$ |
(10,803 |
) |
|
$ |
(13,697 |
) |
|
$ |
(95 |
) |
|
$ |
(51,927 |
) |
Depreciation and
amortization |
|
$ |
12,638 |
|
|
$ |
12,318 |
|
|
$ |
54,987 |
|
|
$ |
49,000 |
|
Capital expenditures |
|
$ |
(12,909 |
) |
|
$ |
(8,614 |
) |
|
$ |
(33,449 |
) |
|
$ |
(35,850 |
) |
Common Stock
Data |
|
|
|
|
|
|
For the Three Months Ended December 31, |
|
|
2020 |
|
2019 |
|
|
|
|
|
High |
|
$ |
33.47 |
|
|
$ |
25.84 |
|
Low |
|
$ |
16.10 |
|
|
$ |
17.93 |
|
Close |
|
$ |
30.03 |
|
|
$ |
20.52 |
|
During the fourth quarter of 2020, 7,610,941 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:
|
|
For the Three Months Ended December 31, |
|
For the Twelve Months Ended December 31, |
In thousands |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
210,269 |
|
|
|
$ |
193,288 |
|
|
|
$ |
764,041 |
|
|
|
$ |
837,398 |
|
|
Net sales,
adjusted |
|
$ |
210,269 |
|
|
|
$ |
193,288 |
|
|
|
$ |
764,041 |
|
|
|
$ |
837,398 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as
reported |
|
$ |
39,959 |
|
|
|
$ |
28,253 |
|
|
|
$ |
144,875 |
|
|
|
$ |
152,420 |
|
|
Reduction-in-force severance
expenses |
|
102 |
|
|
|
987 |
|
|
|
229 |
|
|
|
987 |
|
|
Gross profit,
adjusted |
|
$ |
40,061 |
|
|
|
$ |
29,240 |
|
|
|
$ |
145,104 |
|
|
|
$ |
153,407 |
|
|
|
|
|
|
|
|
|
|
|
Gross margin, as
reported |
|
19.0 |
|
% |
|
14.6 |
|
% |
|
19.0 |
|
% |
|
18.2 |
|
% |
Gross margin,
adjusted |
|
19.1 |
|
% |
|
15.1 |
|
% |
|
19.0 |
|
% |
|
18.3 |
|
% |
|
|
|
|
|
|
|
|
|
Operating income
(loss), as reported |
|
$ |
4,530 |
|
|
|
$ |
(68,501 |
) |
|
|
$ |
(62,065 |
) |
|
|
$ |
(38,825 |
) |
|
Strategic initiatives
expenses |
|
— |
|
|
|
210 |
|
|
|
3,138 |
|
|
|
1,456 |
|
|
TNW restructuring
expenses |
|
— |
|
|
|
177 |
|
|
|
— |
|
|
|
767 |
|
|
Impairment of goodwill and
long-lived assets |
|
— |
|
|
|
64,206 |
|
|
|
61,109 |
|
|
|
64,206 |
|
|
CEO transition expenses |
|
— |
|
|
|
2,259 |
|
|
|
— |
|
|
|
2,259 |
|
|
Reduction-in-force severance
expenses |
|
263 |
|
|
|
1,943 |
|
|
|
520 |
|
|
|
1,943 |
|
|
PM restructuring expenses |
|
919 |
|
|
|
— |
|
|
|
15,903 |
|
|
|
— |
|
|
Operating income,
adjusted |
|
$ |
5,712 |
|
|
|
$ |
294 |
|
|
|
$ |
18,605 |
|
|
|
$ |
31,806 |
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
2.2 |
|
% |
|
(35.4 |
) |
% |
|
(8.1 |
) |
% |
|
(4.6 |
) |
% |
Operating margin,
adjusted |
|
2.7 |
|
% |
|
0.2 |
|
% |
|
2.4 |
|
% |
|
3.8 |
|
% |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share, as reported |
|
$ |
0.01 |
|
|
|
$ |
(4.07 |
) |
|
|
$ |
(4.24 |
) |
|
|
$ |
(4.08 |
) |
|
Strategic initiatives
expenses |
|
— |
|
|
|
0.01 |
|
|
|
0.18 |
|
|
|
0.09 |
|
|
TNW restructuring
expenses |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.04 |
|
|
Impairment of goodwill and
long-lived assets |
|
— |
|
|
|
3.71 |
|
|
|
3.52 |
|
|
|
3.71 |
|
|
CEO transition expenses |
|
— |
|
|
|
0.13 |
|
|
|
— |
|
|
|
0.13 |
|
|
Reduction-in-force severance
expenses |
|
0.02 |
|
|
|
0.11 |
|
|
|
0.03 |
|
|
|
0.11 |
|
|
PM restructuring expenses |
|
0.05 |
|
|
|
— |
|
|
|
0.92 |
|
|
|
— |
|
|
Employee benefit plans
settlement expenses |
|
— |
|
|
|
(0.03 |
) |
|
|
0.02 |
|
|
|
1.46 |
|
|
Gain on sale from a
divestiture |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.08 |
) |
|
Tax effect of above
adjustments |
|
(0.01 |
) |
|
|
(0.04 |
) |
|
|
(0.45 |
) |
|
|
(0.66 |
) |
|
Diluted earnings
(loss) per share, adjusted |
|
$ |
0.07 |
|
|
|
$ |
(0.17 |
) |
|
|
$ |
(0.02 |
) |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This press release reports adjusted results for
the three and twelve months ended December 31, 2020 and 2019,
which excludes strategic initiatives expenses, restructuring
expenses in the Technical Nonwovens and Performance Materials
segments, impairment charges in the Performance Materials segment,
corporate office CEO transition expenses, reduction-in-force
severance expenses, employee benefit plans 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 three and
twelve months ended December 31, 2020 and 2019. 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, non-cash
impairment charges, CEO transition expenses, reduction-in-force
severance expenses, employee benefit plans settlement expenses, and
gain on sale from a divestiture.
|
|
For the Three Months Ended December 31, 2020 |
|
|
Segments |
|
|
|
|
|
|
PerformanceMaterials |
|
TechnicalNonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
$ |
263 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
4,109 |
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(1,889 |
) |
|
Other expense, net |
|
|
|
|
|
|
|
|
|
|
|
2,060 |
|
|
Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(13 |
) |
|
Operating income (loss) |
|
$ |
12,213 |
|
|
$ |
3,041 |
|
|
|
$ |
(1,388 |
) |
|
|
$ |
13,866 |
|
|
|
$ |
(9,336 |
) |
|
|
$ |
4,530 |
|
|
Depreciation and
amortization |
|
5,775 |
|
|
3,358 |
|
|
|
3,137 |
|
|
|
12,270 |
|
|
|
294 |
|
|
|
12,564 |
|
|
Other expense, net |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,060 |
|
|
|
2,060 |
|
|
Income from equity method
investment |
|
— |
|
|
(13 |
) |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
|
|
(13 |
) |
|
EBITDA |
|
$ |
17,988 |
|
|
$ |
6,412 |
|
|
|
$ |
1,749 |
|
|
|
$ |
26,149 |
|
|
|
$ |
(11,102 |
) |
|
|
$ |
15,047 |
|
|
% of net
sales |
|
24.6 |
% |
|
11.8 |
|
% |
|
2.0 |
|
% |
|
12.1 |
|
% |
|
|
|
7.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction-in-force severance
expenses |
|
— |
|
|
— |
|
|
|
263 |
|
|
|
263 |
|
|
|
— |
|
|
|
263 |
|
|
PM restructuring expenses |
|
673 |
|
|
— |
|
|
|
— |
|
|
|
673 |
|
|
|
246 |
|
|
|
919 |
|
|
Discrete tax adjustment |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,439 |
|
|
|
1,439 |
|
|
EBITDA,
adjusted |
|
$ |
18,661 |
|
|
$ |
6,412 |
|
|
|
$ |
2,012 |
|
|
|
$ |
27,085 |
|
|
|
$ |
(9,417 |
) |
|
|
$ |
17,668 |
|
|
% of net
sales |
|
25.5 |
% |
|
11.8 |
|
% |
|
2.3 |
|
% |
|
12.6 |
|
% |
|
|
|
8.4 |
|
% |
|
|
For the Three Months Ended December 31, 2019 |
|
|
Segments |
|
|
|
|
|
|
PerformanceMaterials |
|
TechnicalNonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
$ |
(70,461 |
) |
|
Employee benefits plans
settlement expense |
|
|
|
|
|
|
|
|
|
|
|
(454 |
) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
3,237 |
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(897 |
) |
|
Other expense, net |
|
|
|
|
|
|
|
|
|
|
|
102 |
|
|
Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(28 |
) |
|
Operating (loss) income |
|
$ |
(65,278 |
) |
|
|
$ |
3,152 |
|
|
|
$ |
1,720 |
|
|
$ |
(60,406 |
) |
|
|
$ |
(8,095 |
) |
|
|
$ |
(68,501 |
) |
|
Depreciation and
amortization |
|
6,329 |
|
|
|
3,176 |
|
|
|
2,552 |
|
|
12,057 |
|
|
|
148 |
|
|
|
12,205 |
|
|
Employee benefits plans
settlement expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(454 |
) |
|
|
(454 |
) |
|
Other expense, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
102 |
|
|
|
102 |
|
|
Income from equity method
investment |
|
— |
|
|
|
(28 |
) |
|
|
— |
|
|
(28 |
) |
|
|
— |
|
|
|
(28 |
) |
|
EBITDA |
|
$ |
(58,949 |
) |
|
|
$ |
6,356 |
|
|
|
$ |
4,272 |
|
|
$ |
(48,321 |
) |
|
|
$ |
(7,595 |
) |
|
|
$ |
(55,916 |
) |
|
% of net
sales |
|
(105.6 |
) |
% |
|
11.2 |
|
% |
|
5.0 |
% |
|
(24.3 |
) |
% |
|
|
|
(28.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategic initiatives
expenses |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
210 |
|
|
|
$ |
210 |
|
|
TNW restructuring
expenses |
|
— |
|
|
|
177 |
|
|
|
— |
|
|
177 |
|
|
|
— |
|
|
|
177 |
|
|
Impairment of goodwill and
long-lived assets |
|
64,206 |
|
|
|
— |
|
|
|
— |
|
|
64,206 |
|
|
|
— |
|
|
|
64,206 |
|
|
CEO transition expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
2,259 |
|
|
|
2,259 |
|
|
Reduction-in-force severance
expenses |
|
295 |
|
|
|
253 |
|
|
|
1,386 |
|
|
1,934 |
|
|
|
9 |
|
|
|
1,943 |
|
|
Employee benefit plans
settlement income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(454 |
) |
|
|
(454 |
) |
|
EBITDA,
adjusted |
|
$ |
5,552 |
|
|
|
$ |
6,786 |
|
|
|
$ |
5,658 |
|
|
$ |
17,996 |
|
|
|
$ |
(5,571 |
) |
|
|
$ |
12,425 |
|
|
% of net
sales |
|
10.0 |
|
% |
|
12.0 |
|
% |
|
6.6 |
% |
|
9.1 |
|
% |
|
|
|
6.4 |
|
% |
|
|
For the Twelve Months Ended December 31, 2020 |
|
|
Segments |
|
|
|
|
|
|
PerformanceMaterials |
|
TechnicalNonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
$ |
(73,725 |
) |
|
Employee benefit plans
settlement expenses |
|
|
|
|
|
|
|
|
|
|
|
385 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
15,979 |
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(6,833 |
) |
|
Other expense, net |
|
|
|
|
|
|
|
|
|
|
|
2,166 |
|
|
Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(37 |
) |
|
Operating (loss) income |
|
$ |
(46,044 |
) |
|
|
$ |
18,599 |
|
|
|
$ |
(871 |
) |
|
|
$ |
(28,316 |
) |
|
|
$ |
(33,749 |
) |
|
|
$ |
(62,065 |
) |
|
Depreciation and amortization
(1) |
|
23,830 |
|
|
|
12,704 |
|
|
|
11,460 |
|
|
|
47,994 |
|
|
|
683 |
|
|
|
48,677 |
|
|
Employee benefit plans
settlement expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
385 |
|
|
|
385 |
|
|
Other expense, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,166 |
|
|
|
2,166 |
|
|
Income from equity method
investment |
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
EBITDA |
|
$ |
(22,214 |
) |
|
|
$ |
31,340 |
|
|
|
$ |
10,589 |
|
|
|
$ |
19,715 |
|
|
|
$ |
(35,617 |
) |
|
|
$ |
(15,902 |
) |
|
% of net
sales |
|
(8.4 |
) |
% |
|
14.1 |
|
% |
|
3.6 |
|
% |
|
2.5 |
|
% |
|
|
|
(2.1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategic initiatives
expenses |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
3,138 |
|
|
|
$ |
3,138 |
|
|
Impairment of goodwill and
long-lived assets |
|
61,109 |
|
|
|
— |
|
|
|
— |
|
|
|
61,109 |
|
|
|
— |
|
|
|
61,109 |
|
|
Reduction-in-force severance
expenses |
|
— |
|
|
|
— |
|
|
|
520 |
|
|
|
520 |
|
|
|
— |
|
|
|
520 |
|
|
PM restructuring expenses
(1) |
|
15,463 |
|
|
|
— |
|
|
|
— |
|
|
|
15,463 |
|
|
|
440 |
|
|
|
15,903 |
|
|
Employee benefit plans
settlement expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
385 |
|
|
|
385 |
|
|
Discrete tax adjustment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,439 |
|
|
|
1,439 |
|
|
EBITDA,
adjusted |
|
$ |
54,358 |
|
|
|
$ |
31,340 |
|
|
|
$ |
11,109 |
|
|
|
$ |
96,807 |
|
|
|
$ |
(30,215 |
) |
|
|
$ |
66,592 |
|
|
% of net
sales |
|
20.5 |
|
% |
|
14.1 |
|
% |
|
3.8 |
|
% |
|
12.4 |
|
% |
|
|
|
8.7 |
|
% |
|
|
For the Twelve Months Ended December 31, 2019 |
|
|
Segments |
|
|
|
|
|
|
PerformanceMaterials |
|
TechnicalNonwovens |
|
Thermal Acoustical Solutions |
|
Total |
|
Corporate Office |
|
Consolidated Lydall |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
$ |
(70,513 |
) |
|
Employee benefit plans
settlement expenses |
|
|
|
|
|
|
|
|
|
|
|
25,247 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
14,262 |
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
(6,416 |
) |
|
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
(1,257 |
) |
|
Income from equity method
investment |
|
|
|
|
|
|
|
|
|
|
|
(148 |
) |
|
Operating (loss) income |
|
$ |
(59,804 |
) |
|
|
$ |
22,895 |
|
|
|
$ |
23,590 |
|
|
|
$ |
(13,319 |
) |
|
|
$ |
(25,506 |
) |
|
|
$ |
(38,825 |
) |
|
Depreciation and
amortization |
|
25,118 |
|
|
|
12,702 |
|
|
|
10,168 |
|
|
|
47,988 |
|
|
|
635 |
|
|
|
48,623 |
|
|
Employee benefit plans
settlement expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,247 |
|
|
|
25,247 |
|
|
Other income, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,257 |
) |
|
|
(1,257 |
) |
|
Income from equity method
investment |
|
— |
|
|
|
(148 |
) |
|
|
— |
|
|
|
(148 |
) |
|
|
— |
|
|
|
(148 |
) |
|
EBITDA |
|
$ |
(34,686 |
) |
|
|
$ |
35,745 |
|
|
|
$ |
33,758 |
|
|
|
$ |
34,817 |
|
|
|
$ |
(48,861 |
) |
|
|
$ |
(14,044 |
) |
|
% of net
sales |
|
(14.1 |
) |
% |
|
14.0 |
|
% |
|
9.3 |
|
% |
|
4.0 |
|
% |
|
|
|
(1.7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategic initiatives
expenses |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
1,456 |
|
|
|
$ |
1,456 |
|
|
TNW restructuring
expenses |
|
— |
|
|
|
767 |
|
|
|
— |
|
|
|
767 |
|
|
|
— |
|
|
|
767 |
|
|
Impairment of goodwill and
long-lived assets |
|
64,206 |
|
|
|
— |
|
|
|
— |
|
|
|
64,206 |
|
|
|
— |
|
|
|
64,206 |
|
|
CEO transition expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,259 |
|
|
|
2,259 |
|
|
Reduction-in-force severance
expenses |
|
295 |
|
|
|
253 |
|
|
|
1,386 |
|
|
|
1,934 |
|
|
|
9 |
|
|
|
1,943 |
|
|
Employee benefit plans
settlement expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,247 |
|
|
|
25,247 |
|
|
Gain on sale from a
divestiture |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,459 |
) |
|
|
(1,459 |
) |
|
EBITDA,
adjusted |
|
$ |
29,815 |
|
|
|
$ |
36,765 |
|
|
|
$ |
35,144 |
|
|
|
$ |
101,724 |
|
|
|
$ |
(21,349 |
) |
|
|
$ |
80,375 |
|
|
% of net
sales |
|
12.1 |
|
% |
|
14.4 |
|
% |
|
9.7 |
|
% |
|
11.8 |
|
% |
|
|
|
9.6 |
|
% |
(1) For purposes of these schedules, the
depreciation and amortization expense for the twelve-month period
ended December 31, 2020, excludes $5.3 million of accelerated
depreciation of property, plant and equipment and other intangible
assets in the PM segment since this expense is included in the
restructuring expenses of $15.5 million.
Organic Sales(Unaudited)
|
|
Three Months Ended December 31, 2020 |
|
|
PerformanceMaterials |
|
TechnicalNonwovens |
|
Thermal Acoustical Solutions |
|
Consolidated |
Sales growth, as reported |
|
31.1 |
|
% |
|
(4.1 |
) |
% |
|
2.3 |
|
% |
|
8.8 |
|
% |
Acquisitions and divestitures |
|
— |
|
% |
|
— |
|
% |
|
— |
|
% |
|
— |
|
% |
Change in tooling sales |
|
(0.2 |
) |
% |
|
— |
|
% |
|
(6.1 |
) |
% |
|
(2.8 |
) |
% |
Foreign currency translation |
|
3.0 |
|
% |
|
2.5 |
|
% |
|
2.4 |
|
% |
|
2.7 |
|
% |
Organic sales
growth |
|
28.3 |
|
% |
|
(6.6 |
) |
% |
|
6.0 |
|
% |
|
8.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2020 |
|
|
PerformanceMaterials |
|
TechnicalNonwovens |
|
Thermal Acoustical Solutions |
|
Consolidated |
Sales growth, as
reported |
|
7.8 |
|
% |
|
(12.9 |
) |
% |
|
(18.5 |
) |
% |
|
(8.8 |
) |
% |
Acquisitions and divestitures |
|
0.3 |
|
% |
|
(0.1 |
) |
% |
|
— |
|
% |
|
0.1 |
|
% |
Change in tooling sales |
|
— |
|
% |
|
— |
|
% |
|
(3.6 |
) |
% |
|
(1.5 |
) |
% |
Foreign currency translation |
|
0.6 |
|
% |
|
— |
|
% |
|
0.6 |
|
% |
|
0.3 |
|
% |
Organic sales
growth |
|
6.9 |
|
% |
|
(12.8 |
) |
% |
|
(15.5 |
) |
% |
|
(7.7 |
) |
% |
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:
Media:
Danielle Orsino
Telephone 949-365-6609
danielle@dynamisadvisors.com
Investors:
Brendan Moynihan
Vice President, Investor Relations
Telephone 860-646-1233
Facsimile 860-646-4917
info@lydall.com
www.lydall.com
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