Lydall (LDL) Tops Q4 EPS by 9c, Revenues Miss

Lydall (NYSE: LDL) reported Q4 EPS of $0.52, $0.09 better than the analyst estimate of $0.43. Revenue for the quarter came in at $209.9 million versus the consensus estimate of $220.83 million.

GAAP Financials

• Net sales of $209.9 million, up $31.9 million, or 17.9% -- Acquisitions completed in Q3 2018 contributed $35.5 million, or 20.0%
• Gross margin of 19.9%, down 230 basis points
• Operating margin of 6.3%, down 250 basis points
• Earnings per share ("EPS") of $0.42, compared to $0.80 -- Tax Cuts and Jobs Act ("Tax Act") resulted in a one-time net tax benefit of $0.22 EPS in Q4 2017
• Cash flow from operations of $30.2 million, compared to $16.7 million

Non-GAAP Financial Measures*

• Organic sales decline of 0.4%
• Adjusted gross margin of 20.3%, down 200 basis points
• Adjusted operating margin of 7.0%, down 240 basis points
• Adjusted EPS of $0.52, compared to adjusted $0.67 per share -- Increased intangibles amortization of $2.9 million, or $0.13 per share
• Adjusted EBITDA margin of 12.1%, down 70 basis points

*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.

Dale G. Barnhart, President and Chief Executive Officer, stated, “The Interface Performance Materials business, acquired in third quarter of 2018, led to overall sales growth of nearly 18% from fourth quarter 2017, and we are pleased with the progress on the integration. Performance Materials segment organic sales grew by 4.2%, but we reported a slight decline in consolidated organic sales primarily driven by softer than expected demand in the Technical Nonwovens segment, principally in China. Consolidated margins were below fourth quarter 2017, but adjusted gross margin and adjusted EBITDA margin improved sequentially by 160 basis points and 130 basis points, respectively, from third quarter 2018 driven by improved operational performance in the Thermal Acoustical Solutions segment and the benefit of a full quarter of Interface results."

Outlook

Mr. Barnhart concluded, “As we begin 2019, demand is generally steady and we are experiencing a stabilization of key raw material costs, but we continue to monitor the uncertainties around governmental actions impacting global trade regulations. We are executing on the integration of Interface and expect consolidated EBITDA growth in the first quarter compared to the first quarter of 2018. With our focused cost control and margin improvement plans across the businesses, and expected year over year raw material cost reductions, we currently expect full year 2019 EBITDA margin expansion."

For earnings history and earnings-related data on Lydall (LDL) click here.

You May Also Be Interested In

• Nebius Group plans $4.5B convertible notes offering in two series
• CXApp acquires Australian firm EngineRoom in June 2026 deal
• Estee Lauder (EL) Tops Q4 EPS by 7c, Beats on Revenue