Date: Thu, 18 Dec 1997 04:58:02 GMT Server: Apache/1.2.4 lock_local/0.1 Last-Modified: Tue, 21 Oct 1997 12:39:49 GMT ETag: "1a1200-acf3-344ca295" Content-Length: 44275 Accept-Ranges: bytes Connection: close Content-Type: text/html X-Pad: avoid browser bug Lydall, Inc. - Third Quarter 1997 Results
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Lydall, Inc. Announces Results for
Third  Quarter Ended September 30, 1997

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MANCHESTER, CT, October 21, 1997 -- LYDALL, INC. (NYSE: LDL) today announced financial results for the third quarter ended September 30, 1997.

For the third quarter of 1997, net income was $5.5 million, or $.32 per share, compared with $5.8 million, or $.32 per share, for the comparable prior-year quarter.  Sales in the third quarter of 1997 were $59.4 million compared with $59.7 million in the same quarter of 1996.  Gross margin for the quarter was $18.9 million, or 31.8 percent of sales, compared with $19.4 million, or 32.5 percent of sales, in the third quarter of 1996.  After-tax return on sales was 9.3 percent compared with 9.7 percent for the same period last year.

Net income for the nine months ended September 30, 1997, was $16.9 million, or $.97 per share, compared with $18.6 million, or $1.03 per share, for the corresponding period of 1996.  Sales for the first nine months of 1997 were $185.4 million compared with $193.2 million for the same period in 1996.  Gross margin was $58.2 million, or 31.4 percent of sales, for the nine months ended September 30, 1997, and the after-tax return on sales was 9.1 percent.  For the same nine-month period in 1996, gross margin was $61.7 million, or 31.9 percent of sales, and the after-tax return on sales was 9.6 percent.

In light of its results year-to-date and expected fourth-quarter results, the Company revised its 1997 forecast to sales of approximately $245 million and earnings per share of about $1.27 from sales of $260 million and earnings per share of $1.38.

Commenting on Lydall's results, Leonard R. Jaskol, Chairman and Chief Executive Officer, stated, "Our third quarter 1997 results were about equal to the comparable quarter last year.  Although our businesses have been relatively stable, we have yet to return to the robust levels experienced in 1995 and early 1996.   There are several factors contributing to this performance;  many are temporary conditions which will pass.  Over the long term, I am confident we will return to our historic growth rates."The fundamentals of the Company are sound:  We continue to have excellent cash flow; we have a strong balance sheet with virtually no debt; and we are aggressively pursuing new products and acquisitions to promote growth.

 "High-efficiency filtration sales were up 7 percent in the quarter compared with the same quarter last year.  This increase was predominantly from industrial clean-room applications and home air purification units.  We began to see the resumption of some smaller semiconductor related clean-room projects, but the large fabrications, which were put on hold at the end of last year, have not yet come back on stream.

"Sales of our material handling products were up reflecting the partial benefit of price increases effective late in the quarter and a 19-percent gain in unit volume.

"Lydall's thermal barrier businesses were less robust.  Automotive thermal and heat shield sales were down for the quarter primarily related to the loss of a particular shielding part in late 1996 business which has not as yet been replaced.  We have also been affected by several program delays by our OEM customers in the automotive market.  Sales of thermal products other than automotive declined during the quarter also.  This decline was mostly attributable to flame barriers used in office panels.

"Efforts to integrate our most recent acquisition, a producer of woven specialty materials, continued in the quarter.  In addition to the upheaval of implementing Lydall's programs and standards, which tends to temporarily lower margins, we have dropped a number of lower margin products.  This action has initially lowered total sales.   We are also moving the business from its Hatboro, Pennsylvania, site to a new location in Fort Washington, Pennsylvania.  This move will provide us with a more efficient plant layout and lower cost of quality for a positive long-term impact on this business." 

The Company generated operating cash flow of $10.6 million in the third quarter of 1997, bringing operating cash flow year-to-date to $33.1 million.  At September 30, 1997, cash, cash equivalents and short-term investments were $22.9 million compared with $43.2 million at the end of 1996.  The decline, partially offset by other operating changes, reflects the payment of $8.0 million on January 2, 1997 in connection with an acquisition, $15.4 million to acquire 731,800 shares of Lydall stock, and increased capital expenditures, primarily related to Lydall 2000, a companywide MIS upgrade project.  Working capital was $46.3 million at September 30, 1997, compared with $53.4 million at the end of last year.

Lydall, Inc. is a manufacturer of technologically advanced engineered materials for demanding specialty applications.

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Nine Months
Ended September 30,
1997             1996

Third Quarter
Ended September 30,
1997             1996

Summary of Operations
In thousands except per-share data   (Unaudited)

185,367

127,195

58,172

32,566


25,606

 

(1,361)
360
(161)

(1,162)

26,768

9,912

16,856

0.97


17,455

Net sales

Cost of sales

Gross margin

Selling, product development,
and administrative expenses

Operating income

Other (income) expense:

Investment income
Interest expense
Other

 

Income before income taxes

Income tax expense

Net income

Net income per share

Weighted average shares and equivalents outstanding

59,377

40,504

18,873

10,888


7,985

 

(442)
83
(219)

(578)

8,563

3,048

5,515

0.32


17,273

59,707

40,308

19,399

10,270


9,129

 

(380)
143
62

(175)

9,304

3,524

5,780

0.32


18,049

193,170

131,458

61,712

31,964


29,748

 

(979)
457
283

(239)

29,987

11,371

18,616

1.03


18,147

As of
December 31,
1996

As of
September 30, 1997

Financial Position
In thousands except ratio data
(Unaudited)


$43,167

53,358


5,050

117,844

135,344

2.24

 .13


$22,865

46,268


2,100

119,959

125,509

2.45

.04

Cash, cash equivalents, and short-term investments

Working capital

Long-term debt, net of current maturities

Stockholders' equity

Total capitalization

Current ratio

Total debt/total capitalization

Common Stock Data
Third quarter ended Sept 30

1996

1997

High

Low

Last

$25.750

 20.875

23.438

$25.875

 21.875

 22.000

1,290,200 shares of Lydall common stock (LDL) were traded on the New York Stock Exchange during the third quarter 1997.

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Stockholders are referred to Lydall's Annual Report, "Analysis of Results - Forward-Looking Information," which outlines certain risks regarding the Company's forward-looking statements.  Such risks include:  a major downturn of the automotive market which accounts for about 27 percent of Lydall's total sales, excluding foreign and after-market sales; a meaningful decrease in the number of clean rooms being built worldwide; and significant, unforeseen changes in raw material pricing, specifically, virgin fiber used in producing the Company's materials handling slipsheets. 

For further details on these risks and other pertinent information on Lydall, copies of the Companys 10-K, 10-Qs and 8-K are available on the World Wide Web at Corporate Financials Online
(
http://www.cfonews.com/ldl ) and Lydall's own web site
(
http://lydall.com ).  Copies of these documents can also be obtained from the Company.  Write or call: Carole F. Butenas, Vice President - Investor Relations, at One Colonial Road, Manchester, CT 06040; Tel. 860-646-1233, E-Mail: investor@lydall.com.

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