Back to GetFilings.com



Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
Form 10-Q
 
x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2002
 
OR
 
¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to             
 
Commission File Number: 1-7665
 
LYDALL, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
06-0865505
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
 
One Colonial Road, Manchester, Connecticut,
 
06040
(Address of principal executive offices)
 
(zip code)
 
(860) 646-1233
(Registrant’s telephone number, including area code)
 
None
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Common stock $.10 par value per share.
   
Total Shares outstanding November 14, 2002
 
16,016,930
 


Table of Contents
LYDALL, INC.
INDEX
 
              
Page No.

Part I.
  
Financial Information
    
    
Item 1.    
       
            
3
            
4-5
            
6
            
7-10
    
Item 2.
     
11-16
    
Item 3.    
  
 
  
16
    
Item 4.    
     
16-17
Part II.
  
Other Information
    
    
Item 1.    
  
 
  
17
    
Item 6.
     
17
 
  
18
 
 
  
19-20
 
  
21


Table of Contents
PART I.    FINANCIAL INFORMATION
Item 1.    Financial Statements
 
LYDALL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
 
    
September 30,
2002

    
December 31,
2001

 
ASSETS
  
 
(Unaudited)
 
  
 
 
(Restated
See Note 6)
 
 
Current assets:
                 
Cash and cash equivalents
  
$
1,384
 
  
$
955
 
Accounts receivable, net
  
 
44,853
 
  
 
35,458
 
Inventories:
                 
Finished goods
  
 
11,501
 
  
 
10,408
 
Work in process
  
 
11,221
 
  
 
8,135
 
Raw materials and supplies
  
 
9,208
 
  
 
9,799
 
LIFO reserve
  
 
(483
)
  
 
(483
)
    


  


Total inventories
  
 
31,447
 
  
 
27,859
 
Income taxes receivable
  
 
—  
 
  
 
611
 
Prepaid expenses
  
 
2,647
 
  
 
2,363
 
Net investment in discontinued operations
  
 
1,044
 
  
 
1,165
 
Assets held for sale
  
 
314
 
  
 
1,515
 
Deferred tax assets
  
 
2,200
 
  
 
2,014
 
    


  


Total current assets
  
 
83,889
 
  
 
71,940
 
Property, plant and equipment, at cost
  
 
152,036
 
  
 
138,976
 
Accumulated depreciation
  
 
(70,024
)
  
 
(61,187
)
    


  


    
 
82,012
 
  
 
77,789
 
Other assets, net
  
 
39,182
 
  
 
37,788
 
    


  


Total assets
  
$
205,083
 
  
$
187,517
 
    


  


LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
Current liabilities:
                 
Current portion of long-term debt
  
$
9,111
 
  
$
9,473
 
Accounts payable
  
 
14,745
 
  
 
15,295
 
Accrued taxes
  
 
2,778
 
  
 
792
 
Accrued payroll and other compensation
  
 
7,323
 
  
 
3,144
 
Other accrued liabilities
  
 
6,312
 
  
 
6,929
 
    


  


Total current liabilities
  
 
40,269
 
  
 
35,633
 
Long-term debt
  
 
19,676
 
  
 
18,210
 
Deferred tax liabilities
  
 
6,808
 
  
 
6,818
 
Other long-term liabilities
  
 
7,579
 
  
 
8,273
 
Commitments and contingencies
                 
Stockholders’ equity:
                 
Preferred stock
  
 
—  
 
  
 
—  
 
Common stock
  
 
2,211
 
  
 
2,208
 
Capital in excess of par value
  
 
41,846
 
  
 
41,439
 
Retained earnings
  
 
154,917
 
  
 
144,631
 
Accumulated other comprehensive loss
  
 
(6,581
)
  
 
(8,053
)
    


  


    
 
192,393
 
  
 
180,225
 
Treasury stock, at cost
  
 
(61,642
)
  
 
(61,642
)
    


  


Total stockholders’ equity
  
 
130,751
 
  
 
118,583
 
    


  


Total liabilities and stockholders’ equity
  
$
205,083
 
  
$
187,517
 
    


  


 
See accompanying Notes to Consolidated Condensed Financial Statements.

3


Table of Contents
LYDALL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In Thousands Except Per-Share Data)
 
 
    
Three Months Ended September 30,

 
    
2002

    
2001

 
           
(Restated See Note 6)
 
    
(Unaudited)
 
Net sales
  
$
62,721
 
  
$
53,478
 
Cost of sales
  
 
46,505
 
  
 
39,087
 
    


  


Gross margin
  
 
16,216
 
  
 
14,391
 
Selling, product development and administrative expenses
  
 
11,458
 
  
 
11,168
 
    


  


Operating income
  
 
4,758
 
  
 
3,223
 
Other (income) expense:
                 
Investment income
  
 
(14
)
  
 
(66
)
Interest expense
  
 
246
 
  
 
241
 
Foreign currency transaction gains, net
  
 
(84
)
  
 
(26
)
Other, net
  
 
20
 
  
 
90
 
    


  


    
 
168
 
  
 
239
 
    


  


Income before income taxes
  
 
4,590
 
  
 
2,984
 
Income tax expense
  
 
1,324
 
  
 
682
 
    


  


Net income
  
$
3,266
 
  
$
2,302
 
    


  


Basic earnings per common share
  
$
.20
 
  
$
.14
 
Diluted earnings per common share
  
$
.20
 
  
$
.14
 
               
Weighted average common shares outstanding
  
 
16,011
 
  
 
15,917
 
Weighted average common shares and equivalents outstanding
  
 
16,335
 
  
 
16,024
 
               
Net income
  
$
3,266
 
  
$
2,302
 
Other comprehensive (loss) income, before tax:
                 
Foreign currency translation adjustments
  
 
(82
)
  
 
737
 
Change in fair value of derivative instrument
  
 
(68
)
  
 
(140
)
    


  


Other comprehensive (loss) income, before tax
  
 
(150
)
  
 
597
 
Income tax benefit (expense) related to other comprehensive (loss) income
  
 
53
 
  
 
(209
)
    


  


Other comprehensive (loss) income, net of tax
  
 
(97
)
  
 
388
 
    


  


Comprehensive income
  
$
3,169
 
  
$
2,690
 
    


  


 
See accompanying Notes to Consolidated Condensed Financial Statements.

4


Table of Contents
LYDALL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In Thousands Except Per-Share Data)
 
    
Nine Months Ended
September 30,

 
    
2002

    
2001

 
           
(Restated See Note 6)
 
    
(Unaudited)
 
Net sales
  
$
188,665
 
  
$
170,683
 
Cost of sales
  
 
137,357
 
  
 
123,509
 
    


  


Gross margin
  
 
51,308
 
  
 
47,174
 
Selling, product development and administrative expenses
  
 
35,451
 
  
 
36,272
 
Impairment and restructuring charges
  
 
—  
 
  
 
3,389
 
    


  


Operating income
  
 
15,857
 
  
 
7,513
 
Other (income) expense:
                 
Investment income
  
 
(38
)
  
 
(157
)
Interest expense
  
 
631
 
  
 
817
 
Foreign currency transaction (gains) losses, net
  
 
(138
)
  
 
172
 
Other, net
  
 
(4
)
  
 
133
 
    


  


    
 
451
 
  
 
965
 
    


  


Income from continuing operations before income taxes
  
 
15,406
 
  
 
6,548
 
Income tax expense
  
 
5,121
 
  
 
1,834
 
    


  


Income from continuing operations
  
 
10,285
 
  
 
4,714
 
Discontinued operations:
                 
Loss from operations of discontinued segments, net of tax benefit of $181
  
 
—  
 
  
 
(308