Lydall Performance Materials Segment net sales rise in Q2
LYDALL INC announced financial results for the second quarter and six months ended June 30, 2008.
Net sales for the second quarter ended June 30, 2008 were $88.9 million compared with $87.8 million for the same period in 2007. Excluding the impact of foreign currency translation, net sales decreased by $3.3 million, or 3.7 percent, in the second quarter of 2008 compared with the second quarter of 2007. Net income for the current quarter was $2.9 million, or $.17 per diluted share, compared with $3.5 million, or $.21 per diluted share, for the second quarter of 2007.
The results for the second quarter of 2008 included severance related charges of $1.0 million, an increase of $0.9 million, or $.03 per diluted share, compared to the second quarter of 2007. These charges were related to realigning management in the global automotive business and reducing the workforce at certain operations as a result of lower production requirements.
Year-to-date earnings per share increased to $.37 per diluted share on net sales of $183.2 million from $.29 per diluted share on net sales of $171.5 million for the six months ended June 30, 2007. Net income for the six months ended June 30, 2008 was $6.1 million compared with $4.8 million for the comparable period in 2007.
Gross margin as a percent of net sales for the second quarter of 2008 was 22.6 percent compared with 23.2 percent for the same quarter of 2007. Higher severance related charges of $0.3 million in the current quarter negatively impacted gross margin percentage by 40 basis points.
The remaining decrease in gross margin percentage in the current quarter was due to increases in raw material and energy costs in both the Thermal/Acoustical and Performance Materials segments, partially offset by cost savings generated from operational efficiency improvements.
Selling, product development, and administrative expenses were $15.5 million, or 17.4 percent of net sales, for the second quarter ended June 30, 2008, compared with $14.6 million, or 16.7 percent of net sales, for the same quarter of 2007.
Excluding the impact of foreign currency translation, selling, product development and administrative expenses increased by $0.3 million in the current quarter as compared to the second quarter of 2007. Higher severance related charges of $0.6 million, primarily in the Thermal/Acoustical segment, were partially offset by lower Corporate office litigation expense.
Net cash provided by operating activities was $7.1 million in the second quarter of 2008 compared with $2.9 million in the second quarter of 2007. This improvement was primarily due to a reduction in accounts receivable due to improved collection results, and to a lesser extent, the reduction of tooling sales.
Dale Barnhart, President and Chief Executive Officer, commented, "Overall I am relatively pleased with our second quarter results in light of the economic conditions in the United States. Less demand for automobiles by U.S. consumers resulted in lower production of automobiles containing our parts. In contrast to North America, production in the European automotive market that the Company serves was relatively stable in the second quarter and first half of 2008.