| Lydall, Inc | Telephone 860-646-1233 | ||||
| One Colonial Road | Facsimile 860-646-4917 | ||||
| Manchester, CT 06042-2378 | www.lydall.com | ||||
| NewsRelease | ||
LYDALL ANNOUNCES SECOND QUARTER 2021 RESULTS;
SIGNIFICANT GROWTH ACROSS FOCUSED PORTFOLIO DRIVES MARGIN EXPANSION
FINANCIAL HIGHLIGHTS* - Q2 2021
•Net sales of $221.7 million, up 51.7% compared to prior year on strong demand across all three segments; up 47.4% organically
•Gross margin of 21.6%, up 220 bps; adjusted gross margin of 21.6%, up 210 bps
•Net income of $5.8 million or $0.32 per diluted share compared to operating loss per share of ($0.34) in Q2-2020; Adjusted earnings per diluted share of $0.50 compared to adjusted loss per share of ($0.27)
•EBITDA of $20.5 million or 9.3% of sales; Adjusted EBITDA up 116.4% to $24.7 million, or 11.1% of sales and up 40 bps sequentially from Q1-2021
•Total debt net of cash of $157.5 million, compared to $193.0 million at June 30, 2020; net debt leverage ratio of 1.9x
*Reconciliations of the Non-GAAP financial measures to Lydall’s GAAP financial results are included at the end of this release. See also “Use of Non-GAAP Financial Measures” below.
MANCHESTER, CT - JULY 28, 2021 - LYDALL, INC. (NYSE: LDL) today announced financial results for the second quarter ended June 30, 2021.
“Over the past year, Lydall has gone through an incredible transformation proving our flexibility and responsiveness in the face of the COVID pandemic. The Lydall team continued to deliver strong results in the second quarter, executing on our strategic roadmap and leveraging our focused portfolio to take advantage of a period of broader economic confidence.” said Sara A. Greenstein, President and Chief Executive Officer.
“Our Performance Materials (“PM”) business saw continued strong demand in specialty filtration led by higher sales of fine fiber meltblown media as well as sealing solutions which benefited from favorable trends in transportation, agricultural, and construction end markets,” commented Ms. Greenstein. PM sealing and advanced solutions products were up 49.5% and specialty filtration sales grew 14.9%. “The PM team commissioned additional fine fiber meltblown capacity at our Rochester, New Hampshire and St. Rivalain, France facilities, ahead of schedule and under budget."
In the Thermal Acoustical Solutions (“TAS”) segment, parts sales grew 119.5% from prior year which was heavily impacted by COVID related automotive facility shutdowns. Compared to the first quarter parts sales were down 17.7%. TAS volumes were impacted by semiconductor shortages affecting global automotive production, but the team rapidly adjusted to changing customer requirements to mitigate the profitability impacts.
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Lydall’s Technical Nonwovens (“TNW”) segment saw sales growth of 39.4% from prior year as industrial end markets continued to recover from COVID-19 related slowdowns last year. Ms.Greenstein added, “The TNW business continues to build healthy backlog as industrial activity strengthens, delivering sequential sales growth of 17.5% while expanding adjusted EBITDA over 40%."
Q2 2021 Consolidated Results
Net sales of $221.7 million increased by $75.6 million, or 51.7% from the second quarter of 2020. Net of $9.8 million of favorable FX and $3.8 million related to divestitures, sales were up 47.4% organically compared to prior year. Sales were down $5.4 million sequentially, primarily on weaker sales in TAS partially offset by seasonal strength in TNW geosynthetics sales.
Operating income of $9.4 million improved by $11.2 million dollars from the second quarter 2020 operating loss of $1.7 million dollars, which included significant impacts from COVID-19 related shutdowns. Second quarter results include $3.7 million of strategic initiatives expense for merger-related costs.
Consolidated adjusted EBITDA of $24.7 million increased $13.3 million or 116.4% from the second quarter of 2020 with adjusted EBITDA margin of 11.1% expanding 330 basis points from prior year on favorable mix and volume in PM and TNW, and the absence of COVID related shutdowns in TAS. Sequentially, consolidated adjusted EBITDA margin was essentially flat from first quarter 2021 as margin from higher sales in TNW was offset by lower sales in TAS. Higher volumes of sealing and insulation products combined with favorable mix of specialty filtration products contributed to adjusted EBITDA margin of 25.9% in the PM segment, an expansion of 640 basis points from prior year. In the TNW business, strong volume growth in industrial filtration, particularly in China combined with stronger demand for geosynthetics yielded adjusted EBITDA of $12.0 million or a margin of 16.6%, up 310 basis points sequentially. The TAS business delivered adjusted EBITDA of $1.6 million, an improvement of $4.9 million compared to prior year which was heavily impacted by COVID related shutdowns.
Randall B. Gonzales, Chief Financial Officer, commented, “One year after the pandemic induced trough, Lydall continues to drive strong financial results, benefiting from cost reduction and efficiency opportunities to deliver profitability well in excess of top line growth as strong demand continues in our key end markets. The team has proven our ability to flex the cost structure through the entire business cycle to meet our customer’s diverse needs.”
Liquidity
Net cash provided by operations in the second quarter was $18.3 million driven by higher net income, and continued focus on working capital management. At June 30, 2021, the Company’s total debt was $260.1 million, or $157.5 million net of $102.5 million of cash, including $2.2 million of debt repayment in the second quarter. Net debt decreased by $35.4 million and net debt leverage ratio of 1.9x improved 1.1 turns compared to the same period in 2020.
Outlook
As previously announced, Unifrax, a leading global provider of high performance specialty materials focused on thermal management, specialty filtration, battery materials, emission control and fire protection applications, signed definitive agreements to acquire Lydall, Inc. Under the terms of these agreements, Lydall shareholders will receive $62.10 per share. The transaction, which has been approved by the boards of directors of both companies, is expected to close in the second half of 2021 subject to the receipt of required regulatory approvals, approvals of Lydall stockholders and other customary closing conditions.
Use of Non-GAAP Financial Measures
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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, Lydall's ability to consummate the proposed merger transaction, the expected benefits of the proposed mergers, the expected impact of the coronavirus pandemic (COVID-19) on the Company's businesses, optimizing profit and cash flow generation, and the timing, expected completion and impacts of the proposed merger and the potential impacts should the merger not be consummated 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), cyber-security vulnerabilities, 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, the timing, expected completion and impacts of the proposed merger and the potential impacts should the merger not be consummated, and the risk that a closing condition to the merger agreement may not be satisfied. 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 and Part II, Item 1A - Risk Factors of Lydall’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
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
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meet their needs. Lydall is a New York Stock Exchange-listed company. For more information, visit http://www.lydall.com. 
is a registered trademark of Lydall, Inc. in the U.S. and other countries.
is a registered trademark of Lydall, Inc. in the U.S. and other countries.| For further information: | |||||
| Media: | Investors: | ||||
| Kristen Weiss | Brendan Moynihan | ||||
| Sr. Director, Communications | Vice President, Investor Relations | ||||
| Telephone 860-646-1233 | Telephone 860-646-1233 | ||||
| Facsimile 860-646-4917 | |||||
| info@lydall.com | info@lydall.com | ||||
| www.lydall.com | www.lydall.com | ||||
-More-
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| Summary of Operations | |||||||||||||||||||||||
| In thousands except per share data | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net sales | $ | 221,744 | $ | 146,160 | $ | 448,843 | $ | 346,687 | |||||||||||||||
| Cost of sales | 173,958 | 117,742 | 352,508 | 279,701 | |||||||||||||||||||
| Gross profit | 47,786 | 28,418 | 96,335 | 66,986 | |||||||||||||||||||
| Selling, product development and administrative expenses | 38,182 | 30,164 | 73,815 | 63,191 | |||||||||||||||||||
| Impairment of goodwill and other long-lived assets | — | — | — | 61,109 | |||||||||||||||||||
| Restructuring expenses | 190 | — | 967 | — | |||||||||||||||||||
| Operating income (loss) | 9,414 | (1,746) | 21,553 | (57,314) | |||||||||||||||||||
| (Gain) loss on the sale of a business | 266 | — | 964 | — | |||||||||||||||||||
| Employee benefit plans settlement expenses | — | — | — | 385 | |||||||||||||||||||
| Interest expense | 2,414 | 4,476 | 5,862 | 7,333 | |||||||||||||||||||
| Other (income) expense, net | 206 | 248 | 292 | (170) | |||||||||||||||||||
| Income (loss) before income taxes | 6,528 | (6,470) | 14,435 | (64,862) | |||||||||||||||||||
| Income tax expense (benefit) | 905 | (595) | 3,726 | (2,610) | |||||||||||||||||||
| (Income) loss from equity method investment | (157) | (18) | (165) | 26 | |||||||||||||||||||
| Net income (loss) | $ | 5,780 | $ | (5,857) | $ | 10,874 | $ | (62,278) | |||||||||||||||
| Earnings (loss) per share: | |||||||||||||||||||||||
| Basic | $ | 0.33 | $ | (0.34) | $ | 0.62 | $ | (3.59) | |||||||||||||||
| Diluted | $ | 0.32 | $ | (0.34) | $ | 0.61 | $ | (3.59) | |||||||||||||||
| Weighted average number of common shares outstanding | 17,575 | 17,372 | 17,560 | 17,354 | |||||||||||||||||||
| Weighted average number of common shares and equivalents outstanding | 17,977 | 17,372 | 17,923 | 17,354 | |||||||||||||||||||
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| Summary of Segment Information | ||||||||||||||||||||||||||
| and Corporate Office Expenses | ||||||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| Net Sales | ||||||||||||||||||||||||||
Performance Materials Segment (1),(2) | $ | 77,186 | $ | 58,473 | $ | 156,519 | $ | 123,693 | ||||||||||||||||||
Technical Nonwovens Segment (2) | 72,479 | 52,007 | 134,154 | 109,410 | ||||||||||||||||||||||
| Thermal Acoustical Solutions | 76,858 | 37,448 | 167,902 | 121,209 | ||||||||||||||||||||||
Eliminations and Other (2) | (4,779) | (1,768) | (9,732) | (7,625) | ||||||||||||||||||||||
| Consolidated Net Sales | $ | 221,744 | $ | 146,160 | $ | 448,843 | $ | 346,687 | ||||||||||||||||||
| Operating Income (Loss) | ||||||||||||||||||||||||||
Performance Materials Segment (1),(3) | $ | 14,853 | $ | 5,443 | $ | 30,149 | $ | (51,498) | ||||||||||||||||||
Technical Nonwovens Segment (4) | 8,765 | 6,684 | 13,869 | 10,497 | ||||||||||||||||||||||
| Thermal Acoustical Solutions | (1,500) | (6,285) | 174 | (657) | ||||||||||||||||||||||
| Corporate Office Expenses | (12,704) | (7,588) | (22,639) | (15,656) | ||||||||||||||||||||||
| Consolidated Operating Income (Loss) | $ | 9,414 | $ | (1,746) | $ | 21,553 | $ | (57,314) | ||||||||||||||||||
(1)For the six-month period ended June 30, 2021, the Performance Materials segment includes the results of the German facility that the Company sold on March 11, 2021.
(2)Included in the Performance Materials segment, Technical Nonwovens segment, and Eliminations and Other is the following:
•Performance Materials segment intercompany sales to the Thermal Acoustical Solutions segment were as follows:
◦$1.0 million and $0.3 million for the three-month periods ended June 30, 2021 and 2020, respectively.
◦$2.1 million and $1.2 million for the six-month periods ended June 30, 2021 and 2020, respectively.
•Technical Nonwovens segment intercompany sales to the Thermal Acoustical Solutions segment were as follows:
◦$3.6 million and $1.4 million for the three-month periods ended June 30, 2021 and 2020, respectively.
◦$7.5 million and $6.4 million for the six-month periods ended June 30, 2021 and 2020, respectively.
(3) Included in the operating results within the Performance Materials segment are the following:
•Impairment charges of $61.1 million related to goodwill and other long-lived assets for the six-month period ended June 30, 2020.
•Intangible asset amortization as follows:
◦$3.0 million and $4.0 million for the three-month periods ended June 30, 2021 and 2020, respectively.
◦$6.1 million and $7.9 million for the six-month periods ended June 30, 2021 and 2020, respectively.
(4) Included in the Technical Nonwovens segment is intangible assets amortization as follows:
•$1.1 million and $1.2 million for the three-month periods ended June 30, 2021 and 2020, respectively.
•$2.1 million and $2.3 million for the six-month periods ended June 30, 2021 and 2020, respectively.
6
| Financial Position | ||||||||||||||
| In thousands except ratio data | ||||||||||||||
| (Unaudited) | ||||||||||||||
| June 30, 2021 | December 31, 2020 | |||||||||||||
| Cash and cash equivalents | $ | 102,544 | $ | 102,176 | ||||||||||
| Working capital | $ | 179,375 | $ | 161,763 | ||||||||||
| Total debt | $ | 260,086 | $ | 270,438 | ||||||||||
| Stockholders' equity | $ | 275,199 | $ | 257,696 | ||||||||||
| Total capitalization | $ | 535,285 | $ | 528,134 | ||||||||||
| Total debt to total capitalization | 48.6 | % | 51.2 | % | ||||||||||
| Cash Flows | ||||||||||||||||||||||||||
| In thousands | For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||
| (Unaudited) | June 30, | June 30, | ||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| Net cash provided by (used for) operating activities | $ | 18,277 | $ | 13,674 | $ | 18,497 | $ | 40,415 | ||||||||||||||||||
| Net cash provided by (used for) investing activities | $ | (3,395) | $ | (4,581) | $ | (12,850) | $ | (12,080) | ||||||||||||||||||
| Net cash provided by (used for) financing activities | $ | (1,820) | $ | (4,893) | $ | (6,321) | $ | 13,482 | ||||||||||||||||||
| Depreciation and amortization | $ | 11,428 | $ | 11,883 | $ | 22,794 | $ | 24,035 | ||||||||||||||||||
| Capital expenditures | $ | (5,146) | $ | (6,315) | $ | (13,265) | $ | (15,472) | ||||||||||||||||||
| Common Stock Data | ||||||||||||||
| For the Three Months ended June 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| High | $ | 62.10 | $ | 17.73 | ||||||||||
| Low | $ | 30.52 | $ | 5.67 | ||||||||||
| Close | $ | 60.52 | $ | 13.56 | ||||||||||
During the second quarter of 2021, 16,664,199 shares of Lydall common stock (LDL) were traded on the New York Stock Exchange.
7
Non-GAAP Measures
In 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 June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||
| In thousands | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
| Net sales, as reported | $ | 221,744 | $ | 146,160 | $ | 448,843 | $ | 346,687 | ||||||||||||||||||
| Net sales, adjusted | $ | 221,744 | $ | 146,160 | $ | 448,843 | $ | 346,687 | ||||||||||||||||||
| Gross profit, as reported | $ | 47,786 | $ | 28,418 | $ | 96,335 | $ | 66,986 | ||||||||||||||||||
| Reduction-in-force severance expenses | — | 127 | — | 127 | ||||||||||||||||||||||
| Gross profit, adjusted | $ | 47,786 | $ | 28,545 | $ | 96,335 | $ | 67,113 | ||||||||||||||||||
| Gross margin, as reported | 21.6 | % | 19.4 | % | 21.5 | % | 19.3 | % | ||||||||||||||||||
| Gross margin, adjusted | 21.6 | % | 19.5 | % | 21.5 | % | 19.4 | % | ||||||||||||||||||
| Operating income (loss), as reported | $ | 9,414 | $ | (1,746) | $ | 21,553 | $ | (57,314) | ||||||||||||||||||
| Strategic initiatives expenses | 3,693 | 1,230 | 3,843 | 3,138 | ||||||||||||||||||||||
| Impairment of goodwill and long-lived assets | — | — | — | 61,109 | ||||||||||||||||||||||
| Reduction-in-force severance expenses | — | 257 | — | 257 | ||||||||||||||||||||||
| PM restructuring expenses | 190 | — | 967 | — | ||||||||||||||||||||||
| Operating income (loss), adjusted | $ | 13,297 | $ | (259) | $ | 26,363 | $ | 7,190 | ||||||||||||||||||
| Operating margin, as reported | 4.2 | % | (1.2) | % | 4.8 | % | (16.5) | % | ||||||||||||||||||
| Operating margin, adjusted | 6.0 | % | (0.2) | % | 5.9 | % | 2.1 | % | ||||||||||||||||||
| Diluted earnings (loss) per share, as reported | $ | 0.32 | $ | (0.34) | $ | 0.61 | $ | (3.59) | ||||||||||||||||||
| Strategic initiatives expenses | 0.21 | 0.07 | 0.21 | 0.18 | ||||||||||||||||||||||
| Impairment of goodwill and long-lived assets | — | — | — | 3.52 | ||||||||||||||||||||||
| Reduction-in-force severance expenses | — | 0.02 | — | 0.02 | ||||||||||||||||||||||
| PM restructuring expenses | 0.01 | — | 0.05 | — | ||||||||||||||||||||||
| Employee benefit plans settlement expenses | — | — | — | 0.02 | ||||||||||||||||||||||
| (Gain) loss on the sale of a business | 0.01 | — | 0.05 | — | ||||||||||||||||||||||
| Tax effect of above adjustments | (0.05) | (0.02) | (0.07) | (0.22) | ||||||||||||||||||||||
| Diluted earnings (loss) per share, adjusted | $ | 0.50 | $ | (0.27) | $ | 0.85 | $ | (0.07) | ||||||||||||||||||
This press release reports adjusted results for the three and six-month periods ended June 30, 2021 and 2020, which excludes strategic initiatives expenses, restructuring expenses in the Performance Materials segment, impairment charges in the Performance Materials segment, reduction-in-force severance expenses, employee benefit plans settlement expenses, and loss on the sale of a business.
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CONSOLIDATED AND SEGMENT EBITDA/ADJUSTED EBITDA
In 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 six-month periods ended June 30, 2021 and 2020. 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 in the Performance Materials segment, impairment charges in the Performance Materials segment, reduction-in-force severance expenses, employee benefit plans settlement expenses, and loss on the sale of a business.
| For the Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||
| Segments | ||||||||||||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | |||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 5,780 | ||||||||||||||||||||||||||||||||||||
| (Gain) loss on the sale of a business | 266 | |||||||||||||||||||||||||||||||||||||
| Interest expense | 2,414 | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 905 | |||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | 206 | |||||||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | (157) | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 14,853 | $ | 8,765 | $ | (1,500) | $ | 22,118 | $ | (12,704) | $ | 9,414 | ||||||||||||||||||||||||||
| Depreciation and amortization | 5,061 | 3,090 | 3,117 | 11,268 | 160 | 11,428 | ||||||||||||||||||||||||||||||||
| (Gain) loss on the sale of a business | — | — | — | — | 266 | 266 | ||||||||||||||||||||||||||||||||
| Other (income) expense, net | — | — | — | — | 206 | 206 | ||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | — | (157) | — | (157) | — | (157) | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 19,914 | $ | 12,012 | $ | 1,617 | $ | 33,543 | $ | (13,016) | $ | 20,527 | ||||||||||||||||||||||||||
| % of net sales | 25.8 | % | 16.6 | % | 2.1 | % | 14.8 | % | 9.3 | % | ||||||||||||||||||||||||||||
| Strategic initiatives expenses | $ | — | $ | — | $ | — | $ | — | $ | 3,693 | $ | 3,693 | ||||||||||||||||||||||||||
| PM restructuring expenses | 105 | — | — | 105 | 85 | 190 | ||||||||||||||||||||||||||||||||
| (Gain) loss on the sale of a business | — | — | — | — | 266 | 266 | ||||||||||||||||||||||||||||||||
| EBITDA, adjusted | $ | 20,019 | $ | 12,012 | $ | 1,617 | $ | 33,648 | $ | (8,972) | $ | 24,676 | ||||||||||||||||||||||||||
| % of net sales | 25.9 | % | 16.6 | % | 2.1 | % | 14.9 | % | 11.1 | % | ||||||||||||||||||||||||||||
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| For the Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
| Segments | ||||||||||||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | |||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (5,857) | ||||||||||||||||||||||||||||||||||||
| Interest expense | 4,476 | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (595) | |||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | 248 | |||||||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | (18) | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 5,443 | $ | 6,684 | $ | (6,285) | $ | 5,842 | $ | (7,588) | $ | (1,746) | ||||||||||||||||||||||||||
| Depreciation and amortization | 5,954 | 3,093 | 2,714 | 11,761 | 130 | 11,891 | ||||||||||||||||||||||||||||||||
| Other (income) expense, net | — | — | — | — | 248 | 248 | ||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | — | (18) | — | (18) | — | (18) | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 11,397 | $ | 9,795 | $ | (3,571) | $ | 17,621 | $ | (7,706) | $ | 9,915 | ||||||||||||||||||||||||||
| % of net sales | 19.5 | % | 18.8 | % | (9.5) | % | 11.9 | % | 6.8 | % | ||||||||||||||||||||||||||||
| Strategic initiatives expenses | $ | — | $ | — | $ | — | $ | — | $ | 1,230 | $ | 1,230 | ||||||||||||||||||||||||||
| Reduction-in-force severance expenses | — | — | 257 | 257 | — | 257 | ||||||||||||||||||||||||||||||||
| EBITDA, adjusted | $ | 11,397 | $ | 9,795 | $ | (3,314) | $ | 17,878 | $ | (6,476) | $ | 11,402 | ||||||||||||||||||||||||||
| % of net sales | 19.5 | % | 18.8 | % | (8.8) | % | 12.1 | % | 7.8 | % | ||||||||||||||||||||||||||||
| For the Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||
| Segments | ||||||||||||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | |||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 10,874 | ||||||||||||||||||||||||||||||||||||
| (Gain) loss on the sale of a business | 964 | |||||||||||||||||||||||||||||||||||||
| Interest expense | 5,862 | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 3,726 | |||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | 292 | |||||||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | (165) | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 30,149 | $ | 13,869 | $ | 174 | $ | 44,192 | $ | (22,639) | $ | 21,553 | ||||||||||||||||||||||||||
| Depreciation and amortization | 10,027 | 6,279 | 6,219 | 22,525 | 269 | 22,794 | ||||||||||||||||||||||||||||||||
| (Gain) loss on the sale of a business | — | — | — | — | 964 | 964 | ||||||||||||||||||||||||||||||||
| Other (income) expense, net | — | — | — | — | 292 | 292 | ||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | — | (165) | — | (165) | — | (165) | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 40,176 | $ | 20,313 | $ | 6,393 | $ | 66,882 | $ | (23,626) | $ | 43,256 | ||||||||||||||||||||||||||
| % of net sales | 25.7 | % | 15.1 | % | 3.8 | % | 14.6 | % | 9.6 | % | ||||||||||||||||||||||||||||
| Strategic initiatives expenses | $ | — | $ | — | $ | — | $ | — | $ | 3,843 | $ | 3,843 | ||||||||||||||||||||||||||
| PM restructuring expenses | 850 | — | — | 850 | 117 | 967 | ||||||||||||||||||||||||||||||||
| (Gain) loss on the sale of a business | — | — | — | — | 964 | 964 | ||||||||||||||||||||||||||||||||
| EBITDA, adjusted | $ | 41,026 | $ | 20,313 | $ | 6,393 | $ | 67,732 | $ | (18,702) | $ | 49,030 | ||||||||||||||||||||||||||
| % of net sales | 26.2 | % | 15.1 | % | 3.8 | % | 14.8 | % | 10.9 | % | ||||||||||||||||||||||||||||
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| For the Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
| Segments | ||||||||||||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | |||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (62,278) | ||||||||||||||||||||||||||||||||||||
| Employee benefits plans settlement expense | 385 | |||||||||||||||||||||||||||||||||||||
| Interest expense | 7,333 | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (2,610) | |||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | (170) | |||||||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | 26 | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | (51,498) | $ | 10,497 | $ | (657) | $ | (41,658) | $ | (15,656) | $ | (57,314) | ||||||||||||||||||||||||||
| Depreciation and amortization | 12,208 | 6,131 | 5,431 | 23,770 | 265 | 24,035 | ||||||||||||||||||||||||||||||||
| Employee benefits plans settlement expense | — | — | — | — | 385 | 385 | ||||||||||||||||||||||||||||||||
| Other (income) expense, net | — | — | — | — | (170) | (170) | ||||||||||||||||||||||||||||||||
| (Income) loss from equity method investment | — | 26 | — | 26 | — | 26 | ||||||||||||||||||||||||||||||||
| EBITDA | $ | (39,290) | $ | 16,602 | $ | 4,774 | $ | (17,914) | $ | (15,606) | $ | (33,520) | ||||||||||||||||||||||||||
| % of net sales | (31.8) | % | 15.2 | % | 3.9 | % | (5.1) | % | (9.7) | % | ||||||||||||||||||||||||||||
| 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 | — | — | 257 | 257 | — | 257 | ||||||||||||||||||||||||||||||||
| Employee benefit plans settlement expenses | — | — | — | — | 385 | 385 | ||||||||||||||||||||||||||||||||
| EBITDA, adjusted | $ | 21,819 | $ | 16,602 | $ | 5,031 | $ | 43,452 | $ | (12,083) | $ | 31,369 | ||||||||||||||||||||||||||
| % of net sales | 17.6 | % | 15.2 | % | 4.2 | % | 12.3 | % | 9.0 | % | ||||||||||||||||||||||||||||
Organic Sales
(Unaudited)
| For the Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Consolidated | |||||||||||||||||||||||
| Sales growth, as reported | 32.0 | % | 39.4 | % | 105.2 | % | 51.7 | % | ||||||||||||||||||
| Acquisitions and divestitures | (6.6) | % | — | % | — | % | (2.6) | % | ||||||||||||||||||
| Change in tooling sales | — | % | — | % | 1.1 | % | 0.3 | % | ||||||||||||||||||
| Foreign currency translation | 2.8 | % | 11.2 | % | 6.2 | % | 6.6 | % | ||||||||||||||||||
| Organic sales growth | 35.8 | % | 28.2 | % | 97.9 | % | 47.4 | % | ||||||||||||||||||
| For the Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Consolidated | |||||||||||||||||||||||
| Sales growth, as reported | 26.5 | % | 22.6 | % | 38.5 | % | 29.5 | % | ||||||||||||||||||
| Acquisitions and divestitures | (5.1) | % | — | % | — | % | (1.8) | % | ||||||||||||||||||
| Change in tooling sales | — | % | — | % | (1.3) | % | (0.5) | % | ||||||||||||||||||
| Foreign currency translation | 2.7 | % | 8.2 | % | 4.0 | % | 5.0 | % | ||||||||||||||||||
| Organic sales growth | 28.9 | % | 14.4 | % | 35.8 | % | 26.8 | % | ||||||||||||||||||
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, net of foreign currency. 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
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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.
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