Lydall (LDL) Misses Q4 EPS by 34c, Revenues Miss

Lydall (NYSE: LDL) reported Q4 EPS of ($0.17), $0.34 worse than the analyst estimate of $0.17. Revenue for the quarter came in at $193.29 million versus the consensus estimate of $198.08 million.

Non-GAAP Financial Measures*

• Organic sales decline of (8.3%)
• Adjusted gross margin of 15.1%, down 520 basis points
• Adjusted operating margin down 680 basis points
• Adjusted loss of ($0.17) per share, compared to adjusted earnings of $0.52 per share
• Adjusted EBITDA of $12.4 million, compared to $25.4 million*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.

Randall B. Gonzales, Executive Vice President and Chief Financial Officer, stated, "Fourth quarter results were disappointing, and included non-cash impairment charges of $64.2 million principally due to the under-performance of the Interface business in our Performance Materials segment.

"Organic sales declined 8.3% on further weakening of demand for fiber based gasket solutions in the Interface business, lower demand for industrial filtration products in China and Europe, and lower domestic automotive volumes attributable to the General Motors strike.

"Adjusted EBITDA was negatively impacted by manufacturing inefficiencies in the Thermal Acoustical Solutions segment and unfavorable mix and lower cost absorption in the Performance Materials segment. Despite lower sales volumes, the Technical Nonwovens segment reported improved adjusted EBITDA margin in the quarter compared to the fourth quarter of 2018.

"Overall, we were pleased with our cash flow from operations of $87 million in 2019, enabling us to pay down $52 million of debt."

2020 Outlook

Sara A. Greenstein, President and Chief Executive Officer, stated, "Early in my tenure, I have visited our major operations and am encouraged by the strong relationships with our customers, the quality of products we manufacture and the passion of our global workforce.

"While we have seen some recent stabilization in the end markets for Interface sealing products, weaker demand in European industrial markets is impacting all of our segments. In China, we are closely monitoring the impact of the coronavirus on the Company's businesses. We expect our first quarter and full year results will be negatively impacted, but are uncertain with regards to the severity and duration of the impact. Despite these headwinds, we expect first quarter 2020 adjusted EBITDA will improve sequentially from fourth quarter 2019 adjusted EBITDA results.

"We have started a strategic review, which we expect to conclude by the end of the second quarter of 2020, to evaluate our portfolio and end markets. The objective is to prioritize strategic actions that optimize capital allocation and drive long-term shareholder value. As part of the process, we are identifying specific near-term opportunities for improvement in commercial performance, cost structure and working capital."

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

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Star Equity to acquire Harte Hanks for $5.00 per share
• StablecoinX reports Q2 2026 results with $34.2M net loss