Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information

14. Segment Information

On June 29, 2011, the Company sold its Affinity business, which had been included within Other Products and Services (“OPS”). Affinity designed and manufactured high precision, specialty engineered temperature-control equipment for semiconductor, pharmaceutical, life sciences and industrial applications.   As a result of the sale, the condensed consolidated financial statements have been retroactively restated to reflect Affinity as a discontinued operation and the following segment information excludes Affinity’s net sales and operating income for all periods presented.

The Company’s reportable segments are Performance Materials and Thermal/Acoustical.  The Performance Materials segment reports results of Industrial Filtration, Life Sciences Filtration, and Industrial Thermal Insulation products.  The Thermal/Acoustical segment reports the results of the Company’s automotive products.  OPS includes Life Sciences Vital Fluids.

Performance Materials Segment

The Performance Materials segment includes filtration media solutions for air, fluid power, and industrial applications (“Industrial Filtration”), air and liquid life science applications (“Life Sciences Filtration”), and industrial thermal insulation solutions for building products, appliances, and energy and industrial markets (“Industrial Thermal Insulation”).

Industrial Filtration products include LydAir® MG (Micro-Glass) Air Filtration Media, LydAir® MB (Melt Blown) Air Filtration Media, LydAir® SC (Synthetic Composite) Air Filtration Media, and Arioso™ Membrane Composite Media. These products constitute the critical media component of clean-air systems for applications in clean-space, commercial, industrial and residential HVAC, power generation, and industrial processes.  Lydall has leveraged its extensive technical expertise and applications knowledge into a suite of media products covering the vast liquid filtration landscape across the engine and industrial fields. The LyPore® Liquid Filtration Media and activated carbon containing ActiPure® Filtration Media series address a variety of application needs in fluid power including hydraulic filters, air-water and air-oil coalescing, industrial fluid processes, diesel filtration and fuel filtration.

Life Sciences Filtration products  include the LyPore® and ActiPure® Filtration Media developed to meet the requirements of  life science applications including biopharmaceutical pre-filtration and clarification, diagnostic and analytical testing, respiratory protection, life protection, medical air filtration, drinking water filtration and high purity process filtration such as that found in food and beverage and medical applications.  Lydall also offers Solupor® Membrane specialty microporous membranes that are utilized in various markets and applications including air and liquid filtration and transdermal drug delivery.  Solupor® membranes are based on ultra-high molecular weight polyethylene and incorporate a unique combination of mechanical strength, chemical inertness, and high porosity in a unique open structure.

Industrial Thermal Insulation products are high performance nonwoven veils, papers, mats and specialty composites for the building products, appliance, and energy and industrial markets. The Manniglas® Thermal Insulation brand is diverse in its product application ranging from high temperature seals and gaskets in ovens and ranges to specialty veils for HVAC and cavity wall insulation. appLY®  Mat Needled Glass Mats have been developed to expand Lydall’s high temperature technology portfolio for broad application into the appliance market and supplements the Lytherm®  Insulation Media product brand, traditionally utilized in the industrial market for kilns and furnaces used in metal processing. Lydall’s Cryotherm® Super-Insulating Media, CRS-Wrap® Super-Insulating Media and Cryo-LiteTM Cryogenic Insulation products are industry standards for state-of-the-art cryogenic insulation designs used by manufacturers of cryogenic equipment for liquid gas storage, piping, and transportation.

Thermal/Acoustical Segment

The Thermal/Acoustical segment offers a full line of innovative engineered products to assist in noise and heat abatement within the transportation sector.  Lydall products are found in the interior (dash insulators), underbody (fuel tank, exhaust) and under hood (engine compartment) of cars, trucks, SUV’s, heavy duty trucks and recreational vehicles.  Lydall’s patented products include ZeroClearance®, AMS®, Flexshield® and dBCore® comprised of organic and inorganic fiber composites (fiber parts) as well as metal combinations (metal parts).

Other Products and Services

The Life Sciences Vital Fluids business offers specialty products for blood filtration devices, blood transfusion single-use containers and bioprocessing single-use containers and products for containment of media, buffers and bulk intermediates used in biotech, pharmaceutical and diagnostic reagent manufacturing processes. 

The tables below presents net sales and operating income (loss) by segment for the quarters and nine months ended September 30, 2011 and 2010, and also a reconciliation of total segment net sales and operating income to total consolidated net sales and operating income.

Net sales by segment:

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
In thousands	2011			2010			2011			2010
Performance Materials Segment:
Industrial Filtration	$	18,518		$	17,827		$	57,438		$	51,919
Industrial Thermal Insulation		12,374			9,615			37,950			28,914
Life Sciences Filtration		3,107			4,822			10,972			9,969
Performance Materials Segment net sales		33,999			32,264			106,360			90,802
Thermal/Acoustical Segment:
Metal parts	$	34,354		$	26,329		$	107,323		$	79,321
Fiber parts		19,257			12,467			58,573			35,089
Tooling		2,812			3,468			12,459			10,644
Thermal/Acoustical Segment net sales		56,423			42,264			178,355			125,054
Other Products and Services:
Life Sciences Vital Fluids	$	3,788		$	3,673		$	10,959		$	11,653
Other Products and Services net sales		3,788			3,673			10,959			11,653
Eliminations and Other		(469	)		(455	)		(1,429	)		(1,250	)
Consolidated Net Sales	$	93,741		$	77,746		$	294,245		$	226,259

Operating income (loss) by segment:

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
In thousands	2011			2010			2011			2010
Performance Materials	$	2,843		$	6,013		$	15,233		$	13,978
Thermal/Acoustical		2,742			(3,167	)		7,516			(1,779	)
Other Products and Services:
Life Sciences Vital Fluids		(174	)		(285	)		(753	)		32
Corporate Office Expenses		(3,139	)		(2,846	)		(10,199	)		(10,537	)
Consolidated Operating Income (Loss)	$	2,272		$	(285	)	$	11,797		$	1,694