Lydall Announces Financial Results for the Second Quarter Ended June 30, 2020
LYDALL, INC. (NYSE: LDL) reported Q2 2020 results, revealing a 33.8% decline in net sales to $146.2 million.
Operating loss was ($1.7 million), down from $13.2 million income year-over-year. However, cash flow from operations improved to $40.4 million, alongside a cash balance of $92.5 million at quarter-end.
Performance Materials segment showed a 20% increase in filtration sales. The company anticipates continued strong demand for filtration products amidst ongoing market challenges.
- Cash flow from operations improved to $40.4 million.
- Cash balance increased to $92.5 million.
- Net sales decreased by 33.8% to $146.2 million.
- Operating loss of ($1.7 million) compared to $13.2 million profit last year.
MANCHESTER, CT, July 28, 2020 (GLOBE NEWSWIRE) -- LYDALL, INC. (NYSE: LDL) today announced financial results for the second quarter ended June 30, 2020 and provided an update of COVID-19 impacts.
FINANCIAL HIGHLIGHTS - Q2 2020 vs. Q2 2019
GAAP Financials
- Second quarter ending cash balance of
$92.5 million , compared to$43.4 million - Year to date cash flow from operations of
$40.4 million , compared to$36.2 million
- Year to date cash flow from operations of
- Net sales of
$146.2 million , down33.8% - Gross margin of
19.4% , down 110 basis points - Operating loss of (
$1.7) million , compared to operating income of$13.2 million - Loss per share of (
$0.34) , compared to loss per share of ($0.40) - Prior year includes employee benefit plan settlement expenses of
$0.86 per share
- Prior year includes employee benefit plan settlement expenses of
Non-GAAP Financial Measures*
- Organic sales decline of
31.7% - Adjusted gross margin of
19.5% , down 100 basis points - Adjusted operating margin of (
0.2% ), down 640 basis points - Adjusted loss per share of (
$0.27) , compared to adjusted earnings per share of$0.41 - Adjusted EBITDA of
$11.4 million , compared to$25.3 million - Adjusted EBITDA margin of
7.8% , down 370 basis points
- Adjusted EBITDA margin of
*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.
“I am incredibly proud of Lydall's global employees who delivered extraordinary results while the world was in the midst of the COVID-19 pandemic. In times like these, cash matters most and the team rose to the occasion by generating almost
“The demand for the filtration media produced in our Performance Materials segment has significantly increased. Lydall saw a
Ms. Greenstein added, “Most importantly, we continue to operate safely as the pandemic continues, adapting to a new normal that includes more frequent cleaning, social distancing and new work processes. Our employees have shown exceptional commitment and resilience during these challenging times, and I thank them for all their contributions.”
Q2 2020 Consolidated Results
Net sales of
Operating loss was (
Adjusted EBITDA margin in PM was
Liquidity
Net cash provided by operations through the second quarter of 2020 was
Outlook
"As we move into the second half of the year, our focus remains on the well-being of our employees, meeting the needs of our customers, and driving more value for our shareholders," Ms. Greenstein commented. "While we expect our Performance Materials Sealing business will face headwinds in the second half, continued strong demand for Filtration products should offset this, with meltblown media sales for N95 and surgical masks contributing incremental sales of
"We anticipate the North American and European automotive markets will recover in similar fashion to what we experienced in China. While the timing and magnitude of the recovery by region remains uncertain, we believe auto production will begin to stabilize in the third quarter, albeit with volumes in the second half of 2020 lower than the same period in 2019." Ms. Greenstein continued, "In Technical Nonwovens, we are seeing seasonally strong construction activity driving robust demand for geosynthetics and continued demand for medical related nonwoven products, offset by softer sales in Industrial Filtration applications as the industrial outlook remains uncertain.
"In summary, Lydall and its management team have demonstrated their ability to successfully navigate unprecedented challenges, and I have full confidence the team will continue to quickly adapt to market changes," Ms. Greenstein shared. "Going forward, we will sharpen our strategic focus where our global footprint, deep product expertise, customer and supplier relationships, and innovation are clear competitive advantages in attractive markets. Specialty filtration is a cornerstone of our strategy, as shown by the investments we’re making this year. I remain confident in our ability to deliver long-term shareholder value through our focus on value added engineered materials and specialty filtration solutions that promote a cleaner, quieter, safer world."
Conference Call
Lydall will host a conference call on July 29, 2020 at 10:00 a.m. Eastern Time to discuss results its second quarter ended June 30, 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 July 29, 2020 through 11:59 p.m. Eastern Time on August 5, 2020 at (877) 344-7529, from within the U.S., or (412) 317-0088, internationally, access code 10146673. 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 2020, 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, 2019.
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 Six Months Ended | ||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| Net sales | $ | 146,160 | $ | 220,811 | $ | 346,687 | $ | 438,836 | |||||||||||
| Cost of sales | 117,742 | 175,536 | 279,701 | 351,505 | |||||||||||||||
| Gross profit | 28,418 | 45,275 | 66,986 | 87,331 | |||||||||||||||
| Selling, product development and administrative expenses | 30,164 | 32,096 | 63,191 | 65,102 | |||||||||||||||
| Impairment of goodwill and other long-lived assets | — | — | 61,109 | — | |||||||||||||||
| Operating (loss) income | (1,746 | ) | 13,179 | (57,314 | ) | 22,229 | |||||||||||||
| Employee benefit plans settlement expenses | — | 25,515 | 385 | 25,515 | |||||||||||||||
| Interest expense | 4,476 | 3,731 | 7,333 | 7,359 | |||||||||||||||
| Other expense (income), net | 248 | (873 | ) | (170 | ) | (474 | ) | ||||||||||||
| Loss before income taxes | (6,470 | ) | (15,194 | ) | (64,862 | ) | (10,171 | ) | |||||||||||
| Income tax benefit | (595 | ) | (8,199 | ) | (2,610 | ) | (7,093 | ) | |||||||||||
| (Income) loss from equity method investment | (18 | ) | (49 | ) | 26 | (22 | ) | ||||||||||||
| Net loss | $ | (5,857 | ) | $ | (6,946 | ) | $ | (62,278 | ) | $ | (3,056 | ) | |||||||
| Loss per share: | |||||||||||||||||||
| Basic | $ | (0.34 | ) | $ | (0.40 | ) | $ | (3.59 | ) | $ | (0.18 | ) | |||||||
| Diluted | $ | (0.34 | ) | $ | (0.40 | ) | $ | (3.59 | ) | $ | (0.18 | ) | |||||||
| Weighted average number of common shares outstanding | 17,372 | 17,267 | 17,354 | 17,260 | |||||||||||||||
| Weighted average number of common shares and equivalents outstanding | 17,372 | 17,267 | 17,354 | 17,260 | |||||||||||||||
| 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, | |||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||
| Net Sales | ||||||||||||||||||||
| Performance Materials Segment | $ | 58,473 | $ | 65,102 | $ | 123,693 | $ | 129,682 | ||||||||||||
| Technical Nonwovens Segment (1),(2) | 52,007 | 69,078 | 109,410 | 134,684 | ||||||||||||||||
| Thermal Acoustical Solutions | 37,448 | 93,272 | 121,209 | 187,585 | ||||||||||||||||
| Eliminations and Other (2) | (1,768 | ) | (6,641 | ) | (7,625 | ) | (13,115 | ) | ||||||||||||
| Consolidated Net Sales | $ | 146,160 | $ | 220,811 | $ | 346,687 | $ | 438,836 | ||||||||||||
| Operating Income | ||||||||||||||||||||
| Performance Materials Segment (3) | $ | 5,443 | $ | 3,303 | $ | (51,498 | ) | $ | 4,762 | |||||||||||
| Technical Nonwovens Segment (1),(2),(4) | 6,684 | 7,844 | 10,497 | 12,578 | ||||||||||||||||
| Thermal Acoustical Solutions | (6,285 | ) | 7,357 | (657 | ) | 16,848 | ||||||||||||||
| Corporate Office Expenses | (7,588 | ) | (5,325 | ) | (15,656 | ) | (11,959 | ) | ||||||||||||
| Consolidated Operating (Loss) Income | $ | (1,746 | ) | $ | 13,179 | $ | (57,314 | ) | $ | 22,229 | ||||||||||
(1) The Technical Nonwovens segment reports the results of Geosol through the date of disposition of May 9, 2019.
(2) Included in the Technical Nonwovens segment and Eliminations and Other is
(3) Included in the Performance Materials segment is
(4) Included in the Technical Nonwovens segment is
| Financial Position | ||||||||
| In thousands except ratio data | ||||||||
| (Unaudited) | ||||||||
| June 30, 2020 | December 31, 2019 | |||||||
| Cash and cash equivalents | $ | 92,546 | $ | 51,331 | ||||
| Working capital | $ | 172,417 | $ | 153,739 | ||||
| Total debt | $ | 285,510 | $ | 272,641 | ||||
| Stockholders' equity | $ | 253,262 | $ | 318,420 | ||||
| Total capitalization | $ | 538,772 | $ | 591,061 | ||||
| Total debt to total capitalization | 53.0 | % | 46.1 | % | ||||
| Cash Flows | ||||||||||||||||||||
| In thousands | For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| (Unaudited) | June 30, | June 30, | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||
| Net cash provided by operating activities | $ | 13,674 | $ | 21,849 | $ | 40,415 | $ | 36,219 | ||||||||||||
| Net cash used for investing activities | $ | (4,581 | ) | $ | (10,140 | ) | $ | (12,080 | ) | $ | (16,825 | ) | ||||||||
| Net cash (used for) provided by financing activities | $ | (4,893 | ) | $ | (18,102 | ) | $ | 13,482 | $ | (25,212 | ) | |||||||||
| Depreciation and amortization | $ | 12,612 | $ | 12,066 | $ | 24,842 | $ | 24,001 | ||||||||||||
| Capital expenditures | $ | (6,315 | ) | $ | (11,048 | ) | $ | (15,472 | ) | $ | (20,287 | ) | ||||||||
| Common Stock Data | ||||||||
| For the Three Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| High | $ | 17.73 | $ | 26.47 | ||||
| Low | $ | 5.67 | $ | 17.90 | ||||
| Close | $ | 13.56 | $ | 20.20 | ||||
During the second quarter of 2020, 14,906,709 shares of Lydall common stock (LDL) were traded on the New York Stock Exchange.
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 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| Net sales | $ | 146,160 | $ | 220,811 | $ | 346,687 | $ | 438,836 | ||||||||||||
| Net sales, adjusted | $ | 146,160 | $ | 220,811 | $ | 346,687 | $ | 438,836 | ||||||||||||
| Gross profit, as reported | $ | 28,418 | $ | 45,275 | $ | 66,986 | $ | 87,331 | ||||||||||||
| TNW restructuring expenses | — | 42 | — | 372 | ||||||||||||||||
| Reduction-in-force severance expenses | $ | 127 | $ | — | $ | 127 | $ | — | ||||||||||||
| Gross profit, adjusted | $ | 28,545 | $ | 45,317 | $ | 67,113 | $ | 87,703 | ||||||||||||
| Gross margin, as reported | 19.4 | % | 20.5 | % | 19.3 | % | 19.9 | % | ||||||||||||
| Gross margin, adjusted | 19.5 | % | 20.5 | % | 19.4 | % | 20.0 | % | ||||||||||||
| Operating (loss) income, as reported | $ | (1,746 | ) | $ | 13,179 | $ | (57,314 | ) | $ | 22,229 | ||||||||||
| Strategic initiatives expenses | 1,230 | 405 | 3,138 | 1,246 | ||||||||||||||||
| TNW restructuring expenses | — | 97 | — | 473 | ||||||||||||||||
| Impairment of goodwill and long-lived assets | — | — | 61,109 | — | ||||||||||||||||
| Reduction-in-force severance expenses | 257 | — | 257 | — | ||||||||||||||||
| Operating income, adjusted | $ | (259 | ) | $ | 13,681 | $ | 7,190 | $ | 23,948 | |||||||||||
| Operating margin, as reported | (1.2 | ) | % | 6.0 | % | (16.5 | ) | % | 5.1 | % | ||||||||||
| Operating margin, adjusted | (0.2 | ) | % | 6.2 | % | 2.1 | % | 5.5 | % | |||||||||||
| (Loss) earnings per share, as reported | $ | (0.34 | ) | $ | (0.40 | ) | $ | (3.59 | ) | $ | (0.18 | ) | ||||||||
| Strategic initiatives expenses | $ | 0.07 | $ | 0.02 | $ | 0.18 | $ | 0.07 | ||||||||||||
| TNW restructuring expenses | $ | — | $ | 0.01 | $ | — | $ | 0.03 | ||||||||||||
| Impairment of goodwill and long-lived assets | $ | — | $ | — | $ | 3.52 | $ | — | ||||||||||||
| Reduction-in-force severance expenses | $ | 0.02 | $ | — | $ | 0.02 | $ | — | ||||||||||||
| Employee benefit plans settlement expenses | $ | — | $ | 1.47 | $ | 0.02 | $ | 1.47 | ||||||||||||
| Gain on sale from a divestiture | $ | — | $ | (0.08 | ) | $ | — | $ | (0.08 | ) | ||||||||||
| Tax effect of above adjustments | $ | (0.02 | ) | $ | (0.61 | ) | $ | (0.22 | ) | $ | (0.61 | ) | ||||||||
| Diluted (loss) earnings per share, adjusted | $ | (0.27 | ) | $ | 0.41 | $ | (0.07 | ) | $ | 0.70 | ||||||||||
This press release reports adjusted results for the three and six months ended June 30, 2020 and 2019, which excludes strategic initiatives expenses, restructuring expenses in the Technical Nonwovens segment, impairment charges in the Performance Materials segment, reduction-in-force severance expenses, employee benefit plans settlement expenses, and gain on sale from a divestiture.
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 months ended June 30, 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, reduction-in-force severance expenses, employee benefit plans settlement expenses, and gain on sale from a divestiture.
| For the Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
| Segments | |||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | ||||||||||||||||||||||||
| Net loss | $ | (5,857 | ) | ||||||||||||||||||||||||||
| Interest expense | 4,476 | ||||||||||||||||||||||||||||
| Income tax benefit | (595 | ) | |||||||||||||||||||||||||||
| Other expense, net | 248 | ||||||||||||||||||||||||||||
| Income from equity method investment | (18 | ) | |||||||||||||||||||||||||||
| Operating (loss) income | $ | 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 expense, net | — | — | — | — | 248 | 248 | |||||||||||||||||||||||
| Income 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 Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
| Segments | |||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | ||||||||||||||||||||||||
| Net loss | $ | (6,946 | ) | ||||||||||||||||||||||||||
| Interest expense | 3,731 | ||||||||||||||||||||||||||||
| Income tax benefit | (8,199 | ) | |||||||||||||||||||||||||||
| Other income, net | (873 | ) | |||||||||||||||||||||||||||
| Income from equity method investment | (49 | ) | |||||||||||||||||||||||||||
| Operating income (loss) | $ | 3,303 | $ | 7,844 | $ | 7,357 | $ | 18,504 | $ | (5,325 | ) | $ | 13,179 | ||||||||||||||||
| Depreciation and amortization | 6,329 | 3,222 | 2,458 | 12,009 | 166 | 12,175 | |||||||||||||||||||||||
| Employee benefits plans settlement expense | — | — | — | — | 25,515 | 25,515 | |||||||||||||||||||||||
| Other income, net | — | — | — | — | (873 | ) | (873 | ) | |||||||||||||||||||||
| Income from equity method investment | — | (49 | ) | — | (49 | ) | — | (49 | ) | ||||||||||||||||||||
| EBITDA | $ | 9,632 | $ | 11,115 | $ | 9,815 | $ | 30,562 | $ | (29,801 | ) | $ | 761 | ||||||||||||||||
| % of net sales | 14.8 | % | 16.1 | % | 10.5 | % | 13.4 | % | 0.3 | % | |||||||||||||||||||
| Strategic initiatives expenses | $ | — | $ | — | $ | — | $ | — | $ | 405 | $ | 405 | |||||||||||||||||
| TNW restructuring expenses | — | 97 | — | 97 | — | 97 | |||||||||||||||||||||||
| Employee benefit plans settlement expenses | — | — | — | — | 25,515 | 25,515 | |||||||||||||||||||||||
| Gain on sale from a divestiture | — | — | — | — | (1,459 | ) | (1,459 | ) | |||||||||||||||||||||
| EBITDA, adjusted | $ | 9,632 | $ | 11,212 | $ | 9,815 | % | $ | 30,659 | $ | (5,340 | ) | $ | 25,319 | |||||||||||||||
| % of net sales | 14.8 | % | 16.2 | % | 10.5 | % | 13.5 | % | 11.5 | % | |||||||||||||||||||
| For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
| Segments | |||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | ||||||||||||||||||||||||
| Net loss | $ | (62,278 | ) | ||||||||||||||||||||||||||
| Employee benefit plans settlement expenses | 385 | ||||||||||||||||||||||||||||
| Interest expense | 7,333 | ||||||||||||||||||||||||||||
| Income tax benefit | (2,610 | ) | |||||||||||||||||||||||||||
| Other income, net | (170 | ) | |||||||||||||||||||||||||||
| 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 benefit plans settlement expenses | — | — | — | — | 385 | 385 | |||||||||||||||||||||||
| Other income, net | — | — | — | — | (170 | ) | (170 | ) | |||||||||||||||||||||
| 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 | % | |||||||||||||||||||
| For the Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||
| Segments | ||||||||||||||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Total | Corporate Office | Consolidated Lydall | |||||||||||||||||||||||
| Net loss | $ | (3,056 | ) | |||||||||||||||||||||||||
| Employee benefit plans settlement expenses | 25,515 | |||||||||||||||||||||||||||
| Interest expense | 7,359 | |||||||||||||||||||||||||||
| Income tax benefit | (7,093 | ) | ||||||||||||||||||||||||||
| Other income, net | (474 | ) | ||||||||||||||||||||||||||
| Income from equity method investment | (22 | ) | ||||||||||||||||||||||||||
| Operating income (loss) | $ | 4,762 | $ | 12,578 | $ | 16,848 | $ | 34,188 | $ | (11,959 | ) | $ | 22,229 | |||||||||||||||
| Depreciation and amortization | 12,499 | 6,365 | 4,890 | 23,754 | 338 | 24,092 | ||||||||||||||||||||||
| Employee benefit plans settlement expenses | — | — | — | — | 25,515 | 25,515 | ||||||||||||||||||||||
| Other income, net | — | — | — | — | (474 | ) | (474 | ) | ||||||||||||||||||||
| Income from equity method investment | — | (22 | ) | — | (22 | ) | — | (22 | ) | |||||||||||||||||||
| EBITDA | $ | 17,261 | $ | 18,965 | $ | 21,738 | $ | 57,964 | $ | (36,662 | ) | $ | 21,302 | |||||||||||||||
| % of net sales | 13.3 | % | 14.1 | % | 11.6 | % | 12.8 | % | 4.9 | % | ||||||||||||||||||
| Strategic initiatives expenses | $ | — | $ | — | $ | — | $ | — | $ | 1,246 | $ | 1,246 | ||||||||||||||||
| TNW restructuring expenses | — | 473 | — | 473 | — | 473 | ||||||||||||||||||||||
| Employee benefit plans settlement expenses | — | — | — | — | 25,515 | 25,515 | ||||||||||||||||||||||
| Gain on sale from a divestiture | — | — | — | — | (1,459 | ) | (1,459 | ) | ||||||||||||||||||||
| EBITDA, adjusted | $ | 17,261 | $ | 19,438 | $ | 21,738 | $ | 58,437 | $ | (11,360 | ) | $ | 47,077 | |||||||||||||||
| % of net sales | 13.3 | % | 14.4 | % | 11.6 | % | 12.9 | % | 10.7 | % | ||||||||||||||||||
Organic Sales
(Unaudited)
| Three Months Ended June 30, 2020 | ||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Consolidated | |||||||||||||
| Sales growth, as reported | (10.2 | ) | % | (24.7 | ) | % | (59.9 | ) | % | (33.8 | ) | % | ||||
| Acquisitions and divestitures | — | % | (0.1 | ) | % | — | % | — | % | |||||||
| Change in tooling sales | (0.1 | ) | % | — | % | (2.7 | ) | % | (1.2 | ) | % | |||||
| Foreign currency translation | (0.6 | ) | % | (1.9 | ) | % | (0.4 | ) | % | (0.9 | ) | % | ||||
| Organic sales growth | (9.5 | ) | % | (22.7 | ) | % | (56.8 | ) | % | (31.7 | ) | % | ||||
| Six Months Ended June 30, 2020 | ||||||||||||||||
| Performance Materials | Technical Nonwovens | Thermal Acoustical Solutions | Consolidated | |||||||||||||
| Sales growth, as reported | (4.6 | ) | % | (18.8 | ) | % | (35.4 | ) | % | (21.0 | ) | % | ||||
| Acquisitions and divestitures | 0.6 | % | (0.2 | ) | % | — | % | 0.1 | % | |||||||
| Change in tooling sales | — | % | — | % | (3.1 | ) | % | (1.3 | ) | % | ||||||
| Foreign currency translation | (0.8 | ) | % | (1.6 | ) | % | (0.6 | ) | % | (1.0 | ) | % | ||||
| Organic sales growth | (4.4 | ) | % | (17.0 | ) | % | (31.7 | ) | % | (18.8 | ) | % | ||||
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. 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.
FAQ
What were Lydall's earnings for Q2 2020?
How did COVID-19 affect Lydall's sales?
What is Lydall's outlook after Q2 2020?
What is Lydall's cash position as of Q2 2020?
