SOURCE: LYDALL, INC.

March 17, 2008 17:30 ET

Lydall Updates 2007 Financial Results for Subsequent Event

MANCHESTER, CT--(Marketwire - March 17, 2008) - LYDALL, INC. (NYSE: LDL) today announced that its net income for the quarter ended December 31, 2007 was $2.4 million, or $.15 per diluted share, compared to net income of $2.9 million, or $0.18 per diluted share, previously announced in a press release on February 20, 2008. The previously announced financial results were updated to reflect a new litigation matter involving a former employee of the Company which occurred subsequent to the Company's previous earnings announcement.

On February 22, 2008, a former employee of the Company commenced an action in the Delaware Chancery Court seeking advancement and indemnification from the Company of approximately $0.9 million. The amount sought is for income taxes that he is expecting to incur as a result of payments made by the Company in 2007, related to a previous litigation matter. Management concluded that it was probable that a loss had been incurred by the Company as of December 31, 2007. Based on management's estimates at this time, the Company recorded expense of approximately $0.9 million (pre-tax) during the quarter ended December 31, 2007, related to this matter. The expense was recorded in corporate office selling, product development and administrative expenses.

Lydall, Inc. is a New York Stock Exchange listed company, headquartered in Manchester, Connecticut. The Company, with operations in the U.S., France, and Germany and sales offices in the U.S., Europe, and Asia, focuses on specialty engineered products for the thermal/acoustical and filtration/separation markets.

Cautionary Note Concerning Factors That May Affect Future Results

Stockholders are referred to Lydall's 2007 Annual Report on Form 10-K, "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Cautionary Note Concerning Factors That May Affect Future Results," and "Risk Factors" which outline certain risks regarding the Company's forward-looking statements. Such risks include, among others: a major downturn of the automotive market, which accounted for approximately 52 percent of Lydall's 2007 net sales, dependence on large customers, pricing pressures from OEM automotive customers, changes in raw material pricing and supply, specifically, aluminum and other metals used in most of the Company's heat-shield products, various fibers used in thermal/acoustical and filtration/separation products. In addition, increases in energy pricing, inherent risks at international operations, the timing and performance of new-product introductions, compliance with environmental laws and regulations, outcomes of legal contingencies or assertions by or against the Company relating to intellectual property rights, changes in tax laws and rates, and strategic transactions can impact Lydall's projected results.

For further details on these risks and other pertinent information on Lydall, copies of the Company's Forms 10-K, 10-Q and 8-K are available on Lydall's web site, www.lydall.com. Information may also be obtained from the Company Contact: Thomas P. Smith, Vice President, Chief Financial Officer and Treasurer, at One Colonial Road, Manchester, CT 06042; Telephone 860-646-1233, email: investor@lydall.com


Summary of Operations
In thousands except per share data

                                 Quarter Ended          Year Ended
                                  December 31,          December 31,
                            ----------------------- ----------------------
                                2007        2006        2007        2006
                            ==========  =========== ==========  ==========
                            (Unaudited) (Unaudited)
Net sales                   $   85,858  $    80,601 $  338,894  $  326,358
Cost of sales                   65,474       62,208    262,759     253,561
                            ----------  ----------- ----------  ----------
Gross margin                    20,384       18,393     76,135      72,797
Selling, product
 development and
 administrative expenses        16,334       14,930     60,105      57,466
                            ----------  ----------- ----------  ----------
Operating income                 4,050        3,463     16,030      15,331
Interest expense                   138          225        490       1,363
Other expense (income), net        (92)          14       (140)        (27)
                            ----------  ----------- ----------  ----------
Income before income taxes       4,004        3,224     15,680      13,995
Income tax expense               1,584        1,099      6,573       3,767
                            ----------  ----------- ----------  ----------
Net income                  $    2,420  $     2,125 $    9,107  $   10,228
                            ==========  =========== ==========  ==========

Basic earnings per common
 share                      $     0.15  $      0.13 $     0.56  $     0.63
Diluted earnings per common
 share                      $     0.15  $      0.13 $     0.55  $     0.63

Weighted average common
 shares outstanding             16,380       16,145     16,295      16,147
Weighted average common
 shares and equivalents
 outstanding                    16,422       16,193     16,472      16,198




Summary of Segment Information
In thousands


                                Quarter Ended          Year Ended
                                 December 31,          December 31,
                            ----------------------- ----------------------
                               2007        2006        2007        2006
                            ==========  ==========  ==========  ==========
                           (Unaudited)  (Unaudited)
    Net Sales

    Thermal/Acoustical      $   57,980  $   54,232  $  227,813  $  222,003
    Filtration/Separation       21,005      19,155      82,966      74,906
    Other Products and
     Services                    7,366       7,855      30,378      31,971
    Reconciling Items             (493)       (641)     (2,263)     (2,522)
                            ----------  ----------  ----------  ----------
    Consolidated Totals     $   85,858  $   80,601  $  338,894  $  326,358
                            ==========  ==========  ==========  ==========

    Operating Income

    Thermal/Acoustical      $    6,671  $    5,441  $   22,508  $   23,193
    Filtration/Separation        1,540         794       8,550       4,566
    Other Products and
     Services                      285         742       1,767       3,038
    Corporate Office
     Expenses                   (4,446)     (3,514)    (16,795)    (15,466)
                            ----------  ----------  ----------  ----------
    Consolidated Totals     $    4,050  $    3,463  $   16,030  $   15,331
                            ==========  ==========  ==========  ==========





Financial Position
In thousands except
 ratio data
                        December 31, December 31,
                            2007        2006
                        ===========  ===========
    Cash and cash
     equivalents        $    15,716  $     6,402
    Working Capital     $    63,506  $    50,610
    Total debt          $     9,829  $    10,106
    Stockholders'
     equity             $   180,453  $   161,217
    Total
     capitalization     $   190,282  $   171,323
    Current ratio               2.4          2.2
    Total debt to total
     capitalization             5.2          5.9




Cash Flows
In thousands                 Quarter Ended              Year Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                           2007         2006         2007         2006
                        ===========  ===========  ===========  ===========
                        (Unaudited)  (Unaudited)

    Net cash provided
     by operating
     activities         $    11,910  $    14,699  $    22,133  $    39,703
    Net cash used for
     investing
     activities         $    (5,830) $    (3,686) $   (14,610) $   (11,182)
    Net cash (used for)
     provided by
     financing
     activities         $      (333) $    (6,799) $     1,231  $   (25,183)
    Depreciation and
     amortization       $     3,816  $     3,710  $    15,227  $    15,439
    Capital
     expenditures       $     5,830  $     3,686  $    14,610  $    11,182




Common Stock Data
Quarter Ended
 December 31,               2007         2006
                        ===========  ===========

    High                $     11.70  $     11.19
    Low                 $      9.20  $      8.56
    Close               $     10.52  $     10.81


During the fourth quarter of 2007, 4,115,725 shares of Lydall common stock
(LDL) were traded on the New York Stock Exchange.

Contact Information

  • Company Contact:
    Thomas P. Smith
    Vice President, Chief Financial Officer and Treasurer
    One Colonial Road
    Manchester, CT 06042
    Telephone 860-646-1233
    email: investor@lydall.com