Net Sales Slow 2% for Lydall in 2015 Third Quarter
Lydall, Inc. recently announced financial results for the third quarter ended September 30, 2015. Net sales were $131.2 million, compared to $134.2 million in the third quarter of 2014. Organic sales growth of 5.9% was offset by unfavorable foreign currency translation and the divestiture of a non-core business in the first quarter of 2015. Net income was $11.2 million, or $0.66 per diluted share, compared to $4.2 million, or $0.24 per diluted share, in the third quarter of 2014. Excluding discrete tax benefits, adjusted earnings per share were $0.59, compared to adjusted earnings per share of $0.41 for the third quarter of 2014.
“We achieved another strong quarter, delivering solid organic growth, excellent margin expansion and markedly improved earnings per share,” said Dale Barnhart, president and CEO. “The Fibers and Industrial Filtration segments both delivered double-digit organic sales growth, while the Metals segment achieved organic sales growth in excess of 9%. These increases were due to robust demand from the automotive platforms we serve and continued execution in driving planned synergy programs in the Industrial Filtration segment. Our Performance Materials segment reported a marginal reduction in organic sales primarily from lower demand for insulation products, as we continue to experience oil price-driven market softness. In terms of profitability, the Fibers segment was the most significant contributor to the company’s overall expansion in margin due to higher parts sales, lower raw material costs and labor and overhead efficiencies.”
Net sales decreased by $3.0 million, or 2.2%. Organic sales grew by 5.9% and tooling net sales increased by 0.5%. These results were offset by 4.8% of unfavorable foreign currency translation and lower net sales as a result of a divested business of 3.8%. Gross margin increased 280 basis points to 24.1%, compared to 21.3% in the 2014 third quarter, primarily due to improvements in the Thermal/Acoustical Fibers, Industrial Filtration and Performance Materials segments. Operating margin was 11.3% in the 2015 third quarter, compared to 4.3% in the same period the prior year. The adjusted operating margin was 8.0% in the 2014 third quarter, which excluded a one-time pension settlement expense of $4.9 million, operating income of $0.5 million from a divested business and a purchase accounting adjustment of $0.2 million related to the Industrial Filtration acquisition.
“Looking forward to the remainder of 2015, we expect to close out the year with another solid quarter, with anticipated sales and earnings growth compared to the final quarter of 2014,” said Barnhart. “Demand for our automotive products in the Fibers and Metals segments continues to be strong in both North America and Europe. We are seeing stable global order activity in the Industrial Filtration segment, and expect market conditions affecting our Performance Materials segment to be consistent with recent periods.”
For more information, visit www.lydall.com.