Delaware
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06-0865505
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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One Colonial Road, Manchester, Connecticut
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06042
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.10 par value
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New York Stock Exchange
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Large accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Accelerated filer
ý
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Smaller reporting company
o
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Page
Number
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PART I
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PART II
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Other Information
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||
PART III
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PART IV
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•
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Overall economic and business conditions and the effects on the Company’s markets;
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•
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Outlook for the fiscal year 2015;
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•
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Expected vehicle production in the North American, European or Asian markets;
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•
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Growth opportunities in markets served by the Company;
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•
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Integration of the Industrial Filtration business and expected cost savings from synergy programs;
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•
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Expected gross margin, operating margin and working capital improvements from the application of Lean Six Sigma;
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•
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Product development and new business opportunities;
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•
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Future strategic transactions, including but not limited to: acquisitions, joint ventures, alliances, licensing agreements and divestitures;
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•
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Pension plan funding requirements;
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•
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Future cash flow and uses of cash;
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•
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Future repurchases of the Company’s Common Stock;
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•
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Future amounts of stock-based compensation expense;
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•
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Future earnings and other measurements of financial performance;
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•
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Future levels of indebtedness and capital spending;
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•
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Ability to meet cash operating requirements;
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•
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Ability to meet financial covenants in the Company's revolving credit facility;
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•
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Future impact of the variability of interest rates;
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•
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Future impact of foreign currency exchange rates;
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•
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The expected future impact of recently issued accounting pronouncements upon adoption;
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•
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Future effective income tax rates and realization of deferred tax assets;
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•
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Estimates of fair values of reporting units and long-lived assets used in assessing goodwill and long-lived assets for possible impairment; and
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•
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The expected outcomes of legal proceedings and other contingencies.
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Item 1.
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BUSINESS
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Item 1A.
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RISK FACTORS
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•
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Identify and effectively complete strategic transactions;
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•
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Obtain adequate financing to fund strategic initiatives, which could be difficult to obtain;
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•
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Successfully integrate and manage acquired businesses that involve numerous operational and financial risks, including difficulties in the integration of acquired operations, diversion of management's attention from other business concerns, managing assets in multiple geographic regions and potential loss of key employees and key customers of acquired operations; and
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•
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Improve operating margins through its Lean Six Sigma initiatives which are intended to improve processes and work flow, improve customer service, reduce costs and leverage synergies across the Company.
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•
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In order to meet its strategic objectives, the Company may also divest assets and/or businesses. Successfully executing such a strategy depends on various factors, including effectively transferring assets, liabilities, contracts, facilities and employees to any purchaser, identifying and separating the intellectual property to be divested from the intellectual property that the Company wishes to retain, reducing or eliminating fixed costs previously associated with the divested assets or business, and collecting the proceeds from any divestitures.
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•
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Manage working capital and the level of future profitability. The consolidated cash balance is impacted by capital equipment and inventory investments that may be made in response to changing market conditions;
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•
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Satisfy covenants and other obligations under its amended credit facility, which could limit or prohibit Lydall’s ability to borrow funds. Additionally, these debt covenants and other obligations could limit the Company’s ability to make acquisitions, incur additional debt, make investments, or consummate asset sales and obtain additional financing from other sources.
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Item 1B.
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UNRESOLVED STAFF COMMENTS
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Item 2.
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PROPERTIES
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Location
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Primary Business Segment/General Description
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Type of
Interest
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Hamptonville, North Carolina
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Thermal/Acoustical Metals and Fibers – Product Manufacturing
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Owned
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Yadkinville, North Carolina
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Thermal/Acoustical Metals and Fibers – Product Manufacturing
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Leased
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Meinerzhagen, Germany
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Thermal/Acoustical Metals – Product Manufacturing
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Owned
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Saint-Nazaire, France
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Thermal/Acoustical Metals – Product Manufacturing
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Leased
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Taicang, China
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Thermal/Acoustical Metals – Product Manufacturing
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Leased
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Green Island, New York
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Performance Materials – Specialty Media Manufacturing
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Owned
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Rochester, New Hampshire
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Performance Materials – Specialty Media Manufacturing
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Owned
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Saint-Rivalain, France
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Performance Materials – Specialty Media Manufacturing
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Owned
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Geleen, the Netherlands
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Performance Materials – Specialty Media Manufacturing
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Leased
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Heerlen, the Netherlands
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Performance Materials – Specialty Media Manufacturing
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Leased
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Stoke-on-Trent, United Kingdom
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Industrial Filtration - Filtration Media Manufacturing
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Leased
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Rossendale, United Kingdom
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Industrial Filtration - Filtration Media Manufacturing
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Owned
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Bury, United Kingdom
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Industrial Filtration - Filtration Media Manufacturing
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Leased
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Wuxi, China
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Industrial Filtration - Filtration Media Manufacturing
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Leased
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Shanghai, China
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Industrial Filtration - Filtration Media Manufacturing
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Leased
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North Augusta, South Carolina
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Industrial Filtration - Filtration Media Manufacturing
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Owned
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Bethune, South Carolina
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Industrial Filtration - Filtration Media Manufacturing
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Leased
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Winston-Salem, North Carolina (a)
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Other Products and Services – Biomedical Products Manufacturing
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Leased
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Manchester, Connecticut
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Corporate Office
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Owned
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Item 3.
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LEGAL PROCEEDINGS
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Item 4.
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MINE SAFETY DISCLOSURES
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Name
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Age
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Position and Date of Appointment
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Other Business Experience Since 2010
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Dale G. Barnhart
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62
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President, Chief Executive Officer (August 27, 2007)
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Not applicable
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Robert K. Julian
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52
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Executive Vice President and Chief Financial Officer (October 29, 2012)
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Senior Vice President and Chief Financial Officer, Legrand North America (2004 – 2012), a provider of products and systems for electrical installation and information networks for commercial, residential and industrial buildings.
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Joseph A. Abbruzzi
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56
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President, Industrial Filtration (February 20, 2014); formerly Sr. V.P., General Manager, Lydall Thermal/Acoustical Fibers (March 14, 2011)
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Vice President & General Manager, Guardian Automotive, Glass Division (2007 – 2010), a manufacturer of glass products for commercial, residential, interiors, automotive, energy/solar, and technical glass industries.
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William M. Lachenmeyer
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56
|
|
Vice President, Human Resources (September 30, 2013)
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Vice President Human Resources, Smith & Wesson Holding Corporation (2005 – 2012), a manufacturer of firearms.
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James V. Laughlan
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42
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Vice President, Chief Accounting Officer and Treasurer (March 26, 2013); formerly Chief Accounting Officer, Controller and Treasurer (July 27, 2012); formerly Chief Accounting Officer and Controller (March 29, 2010); formerly Principal Accounting Officer and Controller (December 4, 2007); formerly Controller (October 17, 2005)
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Not applicable
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Chad A. McDaniel
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41
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Vice President, General Counsel and Secretary (May 10, 2013)
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|
Associate General Counsel, United Technologies Corporation (“UTC”), Sikorsky Aircraft division (2012 – 2013), Director; Executive Assistant to the President, UTC Fire & Security division (2010 – 2012); UTC is a manufacturer of high-technology products and services for the global aerospace and building systems industries.
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David H. Williams
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|
50
|
|
President, Performance Materials (June 27, 2012)
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General Manager, Saint-Gobain-Performance Plastic division (2009 – 2012), a producer of engineered, high performance polymer products.
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Item 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
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High
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Low
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Close
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||||||
2014
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||||||
First Quarter
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$
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23.24
|
|
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$
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16.55
|
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$
|
22.87
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Second Quarter
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|
29.66
|
|
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21.50
|
|
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27.37
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|||
Third Quarter
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31.64
|
|
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24.20
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27.01
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|||
Fourth Quarter
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33.57
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25.33
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32.82
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|||
2013
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|
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||||||
First Quarter
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$
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16.08
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$
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14.54
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|
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$
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15.35
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Second Quarter
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15.38
|
|
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13.29
|
|
|
14.60
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|
|||
Third Quarter
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17.18
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|
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14.53
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|
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17.17
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|||
Fourth Quarter
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19.27
|
|
|
15.50
|
|
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17.62
|
|
Period
|
Total Number
of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced
Plans or Programs
|
|
Maximum Number of
Shares That May Yet Be Purchased Under the
Plans or Programs
|
|||||
Activity October 1, 2014 - October 31, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
267,089
|
|
|
Activity November 1, 2014 - November 30, 2014
|
8,513
|
|
|
$
|
28.73
|
|
|
—
|
|
|
267,089
|
|
Activity December 1, 2014 - December 31, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
267,089
|
|
|
Total
|
8,513
|
|
|
—
|
|
|
—
|
|
|
267,089
|
|
|
|
12/31/2009
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
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|
12/31/2013
|
|
12/31/2014
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||||||
Lydall, Inc.
|
|
100.00
|
|
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154.51
|
|
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182.15
|
|
|
275.24
|
|
|
338.20
|
|
|
629.94
|
|
S&P Smallcap 600
|
|
100.00
|
|
|
126.31
|
|
|
127.59
|
|
|
148.42
|
|
|
209.74
|
|
|
221.81
|
|
Russell 2000
|
|
100.00
|
|
|
126.86
|
|
|
121.56
|
|
|
141.43
|
|
|
196.34
|
|
|
205.95
|
|
*
|
$100 invested on 12/31/09 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
|
Item 6.
|
SELECTED FINANCIAL DATA
|
In thousands except per share amounts and ratio data
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Financial results from continuing operations
|
|
|
|
|
|
|
|
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|
||||||||||
Net sales
|
$
|
535,829
|
|
|
$
|
397,969
|
|
|
$
|
378,924
|
|
|
$
|
383,588
|
|
|
$
|
316,113
|
|
Income from continuing operations
|
$
|
21,847
|
|
|
$
|
19,155
|
|
|
$
|
16,806
|
|
|
$
|
9,047
|
|
|
$
|
1,899
|
|
Common stock per share data
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income from continuing operations
|
$
|
1.31
|
|
|
$
|
1.16
|
|
|
$
|
1.01
|
|
|
$
|
0.54
|
|
|
$
|
0.11
|
|
Basic income from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.28
|
|
|
$
|
0.04
|
|
Basic net income
|
$
|
1.31
|
|
|
$
|
1.16
|
|
|
$
|
1.01
|
|
|
$
|
0.82
|
|
|
$
|
0.16
|
|
Diluted income from continuing operations
|
$
|
1.28
|
|
|
$
|
1.14
|
|
|
$
|
0.99
|
|
|
$
|
0.54
|
|
|
$
|
0.11
|
|
Diluted income from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.28
|
|
|
$
|
0.04
|
|
Diluted net income
|
$
|
1.28
|
|
|
$
|
1.14
|
|
|
$
|
0.99
|
|
|
$
|
0.82
|
|
|
$
|
0.16
|
|
Financial position
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
361,770
|
|
|
$
|
274,685
|
|
|
$
|
251,916
|
|
|
$
|
235,185
|
|
|
$
|
230,738
|
|
Long-term debt, net of current maturities
|
$
|
40,315
|
|
|
$
|
1,051
|
|
|
$
|
1,646
|
|
|
$
|
2,261
|
|
|
$
|
3,392
|
|
Total stockholders’ equity
|
$
|
212,599
|
|
|
$
|
200,087
|
|
|
$
|
174,496
|
|
|
$
|
160,852
|
|
|
$
|
154,145
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
||||||||||
Net property, plant and equipment
|
$
|
115,357
|
|
|
$
|
78,863
|
|
|
$
|
76,254
|
|
|
$
|
78,939
|
|
|
$
|
88,236
|
|
Capital expenditures
|
$
|
19,001
|
|
|
$
|
13,826
|
|
|
$
|
11,404
|
|
|
$
|
8,884
|
|
|
$
|
12,001
|
|
Depreciation
|
$
|
16,659
|
|
|
$
|
12,109
|
|
|
$
|
12,784
|
|
|
$
|
13,625
|
|
|
$
|
13,650
|
|
Performance and other ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin
|
21.5
|
%
|
|
21.4
|
%
|
|
20.5
|
%
|
|
17.6
|
%
|
|
17.0
|
%
|
|||||
Operating margin
|
6.4
|
%
|
|
7.2
|
%
|
|
5.6
|
%
|
|
4.2
|
%
|
|
1.1
|
%
|
|||||
Total debt to total capitalization
|
16.1
|
%
|
|
0.8
|
%
|
|
1.4
|
%
|
|
2.0
|
%
|
|
3.1
|
%
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Consolidated net sales of
$535.8 million
, an increase of
$137.9 million
, or
34.6%
, as net sales increased 6.4% related to pre-acquisition businesses and 28.2% from the Acquisition. Foreign currency translation had a minimal impact on sales.
|
•
|
Gross margin increased to
21.5%
, compared to
21.4%
, principally led by the T/A Fibers segment which experienced favorable product mix as well as improved absorption of fixed costs and lower raw material costs, partially offset by lower Industrial Filtration segment gross margin.
|
•
|
Selling, product development and administrative expenses were
$80.9 million
, or
15.1%
of net sales, compared to
$56.5 million
, or
14.2%
of net sales;
|
◦
|
Inclusion of the Industrial Filtration segment in 2014 increased selling, product development and administrative expenses by $9.5 million;
|
◦
|
Selling, product development and administrative expenses increased by $5.4 million in all of the Company's pre-acquisition operating businesses including in the Performance Materials, T/A Fibers and T/A Metals segments as well as in Other Products and Services. This increase was primarily related to a
$2.9 million
commission settlement in the T/A Metals segment as the Company terminated a long-standing commercial sales agreement in 2014. Other increases were primarily associated with higher salaries and benefits expenses, including an increase of $1.3 million in accrued incentive compensation under the Company's 2014 bonus program. Excluding the
$2.9 million
commission settlement expense in the T/A Metals segment, selling, product development and administrative expenses in the Company's pre-acquisition operating businesses were flat as a percentage of net sales in 2014 compared to 2013.
|
◦
|
Corporate office administrative expenses increased by $9.6 million primarily due to a non-cash pension plan settlement charge of
$4.9 million
associated with a voluntary one-time lump sum payment option elected by certain former U.S. employees under the Company's domestic defined benefit pension plan, an increase of $1.4 million of transaction related costs associated with the Industrial Filtration acquisition, and increases in salaries and benefit expenses, including greater accrued incentive compensation under the Company's 2014 bonus program and stock-based compensation aggregating to $1.3 million, and increases in other administrative expenses.
|
•
|
Operating income was
$34.0 million
, or
6.4%
of net sales, compared to
$28.7 million
, or
7.2%
of net sales;
|
◦
|
Industrial Filtration segment operating income was $6.4 million, or 5.7% of Industrial Filtration segment net sales, including the unfavorable impact of
$2.1 million
, or 180 basis points, of purchase accounting adjustments relating to inventory step-up.
|
◦
|
Operating income from Performance Materials, T/A Metals, T/A Fibers, OPS and corporate office was $27.6 million, or 6.5% of pre-acquisition business net sales, compared to $28.7 million, or 7.2% in 2013. The increase in selling, product development and administrative expenses of $14.9 million was partially offset by an increase in gross profit of $13.8 million in 2014 compared to 2013. The increase in gross profit was primarily from the T/A Fibers segment and to a lesser extent the T/A Metals segment due to higher sales volumes and a favorable mix of part sales in both segments, and improved absorption of fixed costs, lower raw material costs and labor efficiencies in the T/A Fibers segment.
|
•
|
Net income was
$21.8 million
, or
$1.28
per diluted share, compared to
$19.2 million
, or
$1.14
per diluted share in
2013
;
|
•
|
Cash generated from operations was
$41.6 million
in
2014
compared to
$30.3 million
in
2013
, the increase primarily a result of increased net income adjusted for non-cash items, in 2014 compared to 2013, offset to some extent by increased working capital requirements.
|
In thousands of dollars
|
|
2014
|
|
Percent Change
|
|
2013
|
|
Percent Change
|
|
2012
|
||||||||
Net sales
|
|
$
|
535,829
|
|
|
34.6
|
%
|
|
$
|
397,969
|
|
|
5.0
|
%
|
|
$
|
378,924
|
|
In thousands of dollars
|
2014
|
|
2013
|
|
2012
|
||||||
Gross profit
|
$
|
114,978
|
|
|
$
|
85,225
|
|
|
$
|
77,807
|
|
Gross margin
|
21.5
|
%
|
|
21.4
|
%
|
|
20.5
|
%
|
In thousands of dollars
|
2014
|
|
2013
|
|
2012
|
||||||
Selling, product development and administrative expenses
|
$
|
80,930
|
|
|
$
|
56,512
|
|
|
$
|
57,239
|
|
Percentage of net sales
|
15.1
|
%
|
|
14.2
|
%
|
|
15.1
|
%
|
In thousands of dollars
|
2014
|
|
2013
|
|
2012
|
||||||
Gain on sale of product line
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(810
|
)
|
In thousands of dollars
|
2014
|
|
2013
|
|
2012
|
||||||
Interest expense
|
$
|
1,093
|
|
|
$
|
304
|
|
|
$
|
365
|
|
Weighted average interest rate during the year
|
1.5
|
%
|
|
5.4
|
%
|
|
5.4
|
%
|
In thousands of dollars
|
2014
|
|
2013
|
|
2012
|
||||||
Other (income) expense, net
|
$
|
(701
|
)
|
|
$
|
67
|
|
|
$
|
31
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Effective income tax rate
|
35.1
|
%
|
|
32.4
|
%
|
|
19.9
|
%
|
Consolidated Net Sales
|
For the Years Ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Performance Materials Segment:
|
|
|
|
|
|
||||||
Filtration
|
$
|
71,648
|
|
|
$
|
64,752
|
|
|
$
|
68,379
|
|
Thermal Insulation
|
31,404
|
|
|
36,929
|
|
|
38,449
|
|
|||
Life Sciences Filtration
|
12,814
|
|
|
10,320
|
|
|
11,207
|
|
|||
Performance Materials Segment net sales
|
115,866
|
|
|
112,001
|
|
|
118,035
|
|
|||
Industrial Filtration Segment:
|
|
|
|
|
|
||||||
Industrial Filtration
|
112,220
|
|
|
—
|
|
|
—
|
|
|||
Industrial Filtration net sales
|
112,220
|
|
|
—
|
|
|
—
|
|
|||
Thermal/Acoustical Metals Segment:
|
|
|
|
|
|
||||||
Metal parts
|
145,135
|
|
|
135,833
|
|
|
136,276
|
|
|||
Tooling
|
19,130
|
|
|
22,573
|
|
|
17,645
|
|
|||
Thermal/Acoustical Metals Segment net sales
|
164,265
|
|
|
158,406
|
|
|
153,921
|
|
|||
Thermal/Acoustical Fibers Segment:
|
|
|
|
|
|
||||||
Fiber parts
|
124,458
|
|
|
105,876
|
|
|
93,519
|
|
|||
Tooling
|
4,133
|
|
|
8,444
|
|
|
917
|
|
|||
Thermal/Acoustical Fibers Segment net sales
|
128,591
|
|
|
114,320
|
|
|
94,436
|
|
|||
Other Products and Services:
|
|
|
|
|
|
||||||
Life Sciences Vital Fluids
|
19,682
|
|
|
17,175
|
|
|
16,853
|
|
|||
Other Products and Services net sales
|
19,682
|
|
|
17,175
|
|
|
16,853
|
|
|||
Eliminations and Other
|
(4,795
|
)
|
|
(3,933
|
)
|
|
(4,321
|
)
|
|||
Consolidated Net Sales
|
$
|
535,829
|
|
|
$
|
397,969
|
|
|
$
|
378,924
|
|
Operating Income
|
For the Years Ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Performance Materials Segment
|
$
|
9,706
|
|
|
$
|
9,462
|
|
|
$
|
10,400
|
|
Industrial Filtration Segment
|
6,412
|
|
|
—
|
|
|
—
|
|
|||
Thermal/Acoustical Metals Segment
|
13,823
|
|
|
14,088
|
|
|
14,708
|
|
|||
Thermal/Acoustical Fibers Segment
|
29,167
|
|
|
21,486
|
|
|
12,851
|
|
|||
Other Products and Services:
|
|
|
|
|
|
||||||
Life Sciences Vital Fluids
|
1,582
|
|
|
778
|
|
|
1,190
|
|
|||
Corporate Office Expenses
|
(26,642
|
)
|
|
(17,101
|
)
|
|
(17,771
|
)
|
|||
Consolidated Operating Income
|
$
|
34,048
|
|
|
$
|
28,713
|
|
|
$
|
21,378
|
|
|
|
For the Year Ended
December 31, |
||||||||||
In thousands except ratio data
|
|
2014
|
|
2013
|
|
2012
|
||||||
Cash and cash equivalents
|
|
$
|
62,051
|
|
|
$
|
75,407
|
|
|
$
|
63,623
|
|
Cash provided by operating activities
|
|
$
|
41,628
|
|
|
$
|
30,280
|
|
|
$
|
34,405
|
|
Cash (used for) provided by investing activities
|
|
$
|
(93,489
|
)
|
|
$
|
(13,986
|
)
|
|
$
|
1,611
|
|
Cash provided by (used for) financing activities
|
|
$
|
42,549
|
|
|
$
|
(5,617
|
)
|
|
$
|
(3,871
|
)
|
Depreciation and amortization
|
|
$
|
17,646
|
|
|
$
|
12,703
|
|
|
$
|
13,682
|
|
Capital expenditures
|
|
$
|
(13,971
|
)
|
|
$
|
(13,826
|
)
|
|
$
|
(11,404
|
)
|
Total debt
|
|
$
|
40,930
|
|
|
$
|
1,714
|
|
|
$
|
2,411
|
|
Total capitalization (debt plus equity)
|
|
$
|
253,529
|
|
|
$
|
201,801
|
|
|
$
|
176,907
|
|
Total debt to total capitalization
|
|
16.1
|
%
|
|
0.8
|
%
|
|
1.4
|
%
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
In thousands
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
After 5 years
|
|
Total
|
||||||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension plan contributions
|
$
|
939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939
|
|
Operating leases
|
4,848
|
|
|
3,810
|
|
|
3,708
|
|
|
2,529
|
|
|
1,362
|
|
|
1,080
|
|
|
17,337
|
|
|||||||
Capital leases*
|
647
|
|
|
317
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
964
|
|
|||||||
Long-term debt*
|
576
|
|
|
576
|
|
|
576
|
|
|
576
|
|
|
40,049
|
|
|
|
|
42,353
|
|
||||||||
Total Contractual Obligations
|
$
|
7,010
|
|
|
$
|
4,703
|
|
|
$
|
4,284
|
|
|
$
|
3,105
|
|
|
$
|
41,411
|
|
|
$
|
1,080
|
|
|
$
|
61,593
|
|
|
*
|
Includes estimated interest payments
|
|
2014
|
|
2013
|
|
2012
|
|||
Risk-free interest rate
|
1.6
|
%
|
|
1.7
|
%
|
|
1.4
|
%
|
Expected life
|
5.1 years
|
|
|
5.2 years
|
|
|
5.7 years
|
|
Expected volatility
|
46
|
%
|
|
65
|
%
|
|
68
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
|
Weighted average exercise price of outstanding options, warrants and rights
(b)
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
1,068,630
|
|
|
$
|
8.44
|
|
|
884,993
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
1,068,630
|
|
|
$
|
8.44
|
|
|
884,993
|
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
|
|
Page
|
1. Financial Statements:
|
|
2. Financial Statement Schedule:
|
|
2.1
|
|
Sale and Purchase Agreement dated February 20, 2014, by and among the Andrew Industries Limited, Lydall Inc. and Lydall UK Ltd., filed as Exhibit 10.1 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by reference. The Registrant will supplementally furnish any omitted schedules to the Commission upon request.
|
3.1
|
|
Certificate of Incorporation of the Registrant, as amended through the date of filing of this Annual Report on Form 10-K, filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K dated March 12, 2004 and incorporated herein by this reference, as further amended by those certain Certificates of Correction and Certificate of Elimination, each dated December 22, 2014 and referenced in Exhibit 3.2 to this Annual Report on Form 10-K.
|
3.2
|
|
Certificates of Correction and Certificate of Elimination to the Certificate of Incorporation of the Registrant, each dated December 22, 2014 filed as Exhibits 3.2 - 3.4 and Exhibit 3.1, respectively, to the Registrant's Form 8-K dated December 22, 2014 and incorporated herein by this reference.
|
3.3
|
|
Bylaws of the Registrant, as amended and restated as of December 11, 2003, filed as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K dated March 12, 2004 and incorporated herein by this reference.
|
4.1
|
|
Certain long-term debt instruments, each representing indebtedness in an amount equal to or less than 10 percent of the Registrant’s total consolidated assets, have not been filed as exhibits to this Annual Report on Form 10-K. The Registrant will file these instruments with the Commission upon request.
|
10.1
|
|
Capital lease agreement between Lydall Thermique Acoustique S.A.S., CMCIC Lease and Natiocredimurs Societe en Nom Collectif, filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q dated November 9, 2004 and incorporated herein by reference.
|
10.2*
|
|
Employment Agreement with Dale G. Barnhart dated July 31, 2007, filed as Exhibit 10.1 to the Registrant’s Form 8-K dated August 3, 2007 and incorporated herein by this reference.
|
10.3*
|
|
Employment Agreement with Robert K. Julian dated October 3, 2012, filed as Exhibit 10.1 to the Registrant’s Form 8-K dated October 4, 2012 and incorporated herein by this reference.
|
10.4*
|
|
Employment Agreement with David H. Williams dated June 27, 2012, filed as Exhibit 10.3 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.5*
|
|
Employment Agreement with Chad A. McDaniel dated May 8, 2013, filed as Exhibit 10.5 to the Registrant's Annual Report on Form 10-K dated March 5, 2014 and incorporated herein by reference.
|
10.6*
|
|
Employment Agreement with Joseph A. Abbruzzi dated March 31, 2014, filed herewith.
|
10.7*
|
|
Indemnification Agreement with Dale G. Barnhart dated July 31, 2007, filed as Exhibit 10.2 to the Registrant’s Form 8-K dated August 3, 2007 and incorporated herein by this reference.
|
10.8*
|
|
Lydall, Inc. Annual Incentive Performance Program, filed as Exhibit 10.1 to the Registrant’s Form 8-K dated March 15, 2012 and incorporated herein effective prior to January 1, 2015 by this reference.
|
10.9
|
|
Form of Indemnification Agreement between Lydall, Inc. and non-employee directors, filed as Exhibit 10.1 to the Registrant’s Form 8-K dated June 19, 2009 and incorporated herein by this reference.
|
10.10*
|
|
Amended and Restated Lydall 2003 Stock Incentive Compensation Plan, filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q dated May 2, 2011 and incorporated herein by this reference.
|
10.11*
|
|
Lydall 2012 Stock Incentive Plan, filed as Exhibit A to the Registrant’s Definitive Proxy Statement dated March 16, 2012 and incorporated herein by this reference.
|
10.12*
|
|
Form of Restricted Share Award Agreement to Non-Employee Directors (Under the Lydall 2012 Stock Incentive Plan), filed as Exhibit 10.9 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.13*
|
|
Form of Non-Qualified/Incentive Stock Option Agreement (Under the Lydall 2012 Stock Incentive Plan) for U.S. employees, filed as Exhibit 10.4 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.14*
|
|
Form of Restricted Stock Award Agreement (Under the Lydall 2012 Stock Incentive Plan) for U.S. Employees, filed as Exhibit 10.8 to the Registrant’s to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.15*
|
|
Form of Non-Qualified Stock Option Agreement (Under the Lydall 2012 Stock Incentive Plan) for Netherland employees, filed as Exhibit 10.10 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.16*
|
|
Form of Non-Qualified Stock Option Agreement (Under the Lydall 2012 Stock Incentive Plan) for French employees, filed as Exhibit 10.11 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.17*
|
|
Form of Non-Qualified Stock Option Agreement (Under the Lydall 2012 Stock Incentive Plan) for German employees, filed as Exhibit 10.12 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.18*
|
|
Form of Lydall, Inc. Performance Share Award Agreement (Three-Year Period) for U.S. employees, filed herewith.
|
10.19*
|
|
Form of Lydall, Inc. Performance Share Award Agreement (Three-Year Period) for French employees, filed as Exhibit 10.6 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.20*
|
|
Form of Lydall, Inc. Performance Share Award Agreement (Three-Year Period) for German employees, filed as Exhibit 10.7 to the Registrant’s Form 10-Q dated August 1, 2012 and incorporated herein by this reference.
|
10.21*
|
|
Form of Lydall, Inc. Performance Share Award Agreement (One-Year Period), filed as Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K dated February 26, 2010 and incorporated herein by this reference.
|
10.22
|
|
Credit Agreement, dated June 16, 2011, by and between Lydall, Inc., as borrower, and Bank of America, N.A., as lender, filed as Exhibit 10.1 to the Registrant’s Form 8-K dated June 21, 2011 and incorporated herein by this reference.
|
10.23
|
|
Guaranty Agreement, dated June 16, 2011, by and among Lydall Thermal/Acoustical, Inc., Lydall Filtration/Separation, Inc., Lydall International, Inc., and Bank of America, N.A., filed as Exhibit 10.2 to the Registrant’s Form 8-K dated June 21, 2011 and incorporated herein by this reference.
|
10.24
|
|
Security Agreement, dated June 16, 2011 by and between Lydall, Inc., and Bank of America, N.A., filed as Exhibit 10.3 to the Registrant’s Form 8-K dated June 21, 2011 and incorporated herein by this reference.
|
10.25
|
|
Security Agreement, dated June 16, 2011 by and between Lydall Thermal/Acoustical, Inc. and Bank of America, N.A., filed as Exhibit 10.4 to the Registrant’s Form 8-K dated June 21, 2011 and incorporated herein by this reference.
|
10.26
|
|
Security Agreement, dated June 16, 2011 by and between Lydall Filtration/Separation, Inc. and Bank of America, N.A., filed as Exhibit 10.5 to the Registrant’s Form 8-K dated June 21, 2011 and incorporated herein by this reference.
|
10.27
|
|
Security Agreement, dated June 16, 2011 by and between Lydall International, Inc. and Bank of America, N.A., filed as Exhibit 10.6 to the Registrant’s Form 8-K dated June 21, 2011 and incorporated herein by this reference.
|
10.28
|
|
Amended and Restated Credit Agreement, dated February 18, 2014, by and between Lydall, Inc., as borrower, and Bank of America, N.A., as Agent for the Lenders, filed as Exhibit 10.2 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by this reference.
|
10.29
|
|
Amended and Restated Guaranty Agreement, dated February 18, 2014, by and among Lydall Thermal/Acoustical, Inc., Lydall Filtration/Separation, Inc., Lydall International, Inc., and Bank of America, N.A., filed as Exhibit 10.3 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by reference.
|
10.30
|
|
Amended and Restated Security Agreement, dated February 18, 2014, by and between Lydall, Inc., and Bank of America, N.A., filed as Exhibit 10.4 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by reference, as further amended by that certain Amendment to the Amended and Restated Security Agreements, the Amended and Restated Domain Name Collateral Assignment and Security Agreement and Partial Release dated January 30, 2015, filed as Exhibit 10.34 to this Annual Report on From 10-K.
|
10.31
|
|
Amended and Restated Security Agreement, dated February 18, 2014, by and between Lydall Thermal/Acoustical, Inc., and Bank of America, N.A., filed as Exhibit 10.5 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by reference, as further amended by that certain Amendment to the Amended and Restated Security Agreements, the Amended and Restated Domain Name Collateral Assignment and Security Agreement and Partial Release dated January 30, 2015, filed as Exhibit 10.34 to this Annual Report on From 10-K.
|
10.32
|
|
Amended and Restated Security Agreement, dated February 18, 2014, by and between Lydall Filtration/Separation, Inc., and Bank of America, N.A. filed as Exhibit 10.6 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by reference.
|
10.33
|
|
Amended and Restated Security Agreement, dated February 18, 2014, by and between Lydall International, Inc., and Bank of America, N.A., filed as Exhibit 10.7 to the Registrant’s Form 8-K dated February 24, 2014 and incorporated herein by reference.
|
10.34
|
|
Amendment to the Amended and Restated Security Agreements, the Amended and Restated Domain Name Collateral Assignment and Security Agreement and Partial Release dated January 30, 2015 by and among Lydall, Inc., Lydall Thermal/Acoustical, Inc. and Bank of America, filed herewith.
|
10.35*
|
|
Lydall, Inc. Annual Incentive Performance Program effective January 1, 2015, filed herewith.
|
14.1
|
|
Lydall’s Code of Ethics and Business Conduct, as amended, and the supplemental Code of Ethics for the Chief Executive Officer, Senior Financial Officers and All Accounting and Financial Personnel, as amended, each can be accessed on Lydall’s website at www.lydall.com under the Corporate Governance section.
|
21.1
|
|
List of subsidiaries of the Registrant, filed herewith.
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP, filed herewith.
|
24.1
|
|
Power of Attorney, dated February 27, 2015 authorizing Robert K. Julian to sign this Annual Report on Form 10-K on behalf of each member of the Board of Directors indicated therein, filed herewith.
|
31.1
|
|
Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934 as principal executive officer, filed herewith.
|
31.2
|
|
Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934 as principal executive officer, filed herewith.
|
32.1
|
|
Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Management contract or compensatory plan.
|
|
LYDALL, INC.
|
||
March 3, 2015
|
By:
|
|
/s/ Robert K. Julian
|
|
|
|
Robert K. Julian
Executive Vice President and Chief Financial
Officer (Principal Financial Officer)
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/s/ Dale G. Barnhart
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
March 3, 2015
|
Dale G. Barnhart
|
|
|
|
|
/s/ Robert K. Julian
|
|
Executive Vice President, Chief Financial Officer
(Principal Financial Officer)
|
|
March 3, 2015
|
Robert K. Julian
|
|
|
|
|
/s/ James V. Laughlan
|
|
Vice President, Chief Accounting Officer, and Treasurer (Principal Accounting Officer)
|
|
March 3, 2015
|
James V. Laughlan
|
|
|
|
|
/s/ Robert K. Julian
|
|
|
|
March 3, 2015
|
Robert K. Julian
|
|
|
|
|
Attorney-in-fact for:
|
|
|
|
|
Kathleen Burdett
|
|
Director
|
|
|
W. Leslie Duffy
|
|
Chairman of the Board of Directors
|
|
|
Matthew T. Farrell
|
|
Director
|
|
|
Marc T. Giles
|
|
Director
|
|
|
William D. Gurley
|
|
Director
|
|
|
Suzanne Hammett
|
|
Director
|
|
|
S. Carl Soderstrom, Jr.
|
|
Director
|
|
|
/s/ PricewaterhouseCoopers LLP
|
|
PricewaterhouseCoopers LLP
|
Hartford, Connecticut
|
March 3, 2015
|
|
For the years ended December 31,
|
||||||||||
In thousands except per share data
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
535,829
|
|
|
$
|
397,969
|
|
|
$
|
378,924
|
|
Cost of sales
|
420,851
|
|
|
312,744
|
|
|
301,117
|
|
|||
Gross profit
|
114,978
|
|
|
85,225
|
|
|
77,807
|
|
|||
Selling, product development and administrative expenses
|
80,930
|
|
|
56,512
|
|
|
57,239
|
|
|||
Gain on sale of product line
|
—
|
|
|
—
|
|
|
(810
|
)
|
|||
Operating income
|
34,048
|
|
|
28,713
|
|
|
21,378
|
|
|||
Interest expense
|
1,093
|
|
|
304
|
|
|
365
|
|
|||
Other (income) expense, net
|
(701
|
)
|
|
67
|
|
|
31
|
|
|||
Income before income taxes
|
33,656
|
|
|
28,342
|
|
|
20,982
|
|
|||
Income tax expense
|
11,809
|
|
|
9,187
|
|
|
4,176
|
|
|||
Net income
|
$
|
21,847
|
|
|
$
|
19,155
|
|
|
$
|
16,806
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.31
|
|
|
$
|
1.16
|
|
|
$
|
1.01
|
|
Diluted
|
$
|
1.28
|
|
|
$
|
1.14
|
|
|
$
|
0.99
|
|
Weighted average common shares outstanding
|
16,662
|
|
|
16,570
|
|
|
16,717
|
|
|||
Weighted average common shares and equivalents outstanding
|
17,003
|
|
|
16,866
|
|
|
16,973
|
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
21,847
|
|
|
$
|
19,155
|
|
|
$
|
16,806
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Change in pension plans, net of income taxes of $1,595, $4,028,
and $1,832, respectively |
(2,603
|
)
|
|
6,572
|
|
|
(2,989
|
)
|
|||
Foreign currency translation adjustments
|
(12,714
|
)
|
|
2,950
|
|
|
1,241
|
|
|||
Total other comprehensive (loss) income, net of tax
|
(15,317
|
)
|
|
9,522
|
|
|
(1,748
|
)
|
|||
Comprehensive income
|
$
|
6,530
|
|
|
$
|
28,677
|
|
|
$
|
15,058
|
|
|
December 31,
|
||||||
In thousands of dollars and shares
|
2014
|
|
2013
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
62,051
|
|
|
$
|
75,407
|
|
Accounts receivable, (net of allowance for doubtful receivables of $709
and $480, respectively) |
84,366
|
|
|
52,301
|
|
||
Inventories
|
51,241
|
|
|
34,917
|
|
||
Taxes receivable
|
4,539
|
|
|
1,632
|
|
||
Prepaid expenses and other current assets
|
11,109
|
|
|
8,004
|
|
||
Total current assets
|
213,306
|
|
|
172,261
|
|
||
Property, plant and equipment, net
|
115,357
|
|
|
78,863
|
|
||
Goodwill
|
21,943
|
|
|
18,589
|
|
||
Other intangible assets, net
|
7,841
|
|
|
3,510
|
|
||
Deferred tax assets
|
1,408
|
|
|
574
|
|
||
Other assets, net
|
1,915
|
|
|
888
|
|
||
Total assets
|
$
|
361,770
|
|
|
$
|
274,685
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
615
|
|
|
$
|
663
|
|
Accounts payable
|
49,325
|
|
|
29,768
|
|
||
Accrued payroll and other compensation
|
14,550
|
|
|
10,393
|
|
||
Accrued taxes
|
1,447
|
|
|
1,816
|
|
||
Other accrued liabilities
|
7,140
|
|
|
6,044
|
|
||
Total current liabilities
|
73,077
|
|
|
48,684
|
|
||
Long-term debt
|
40,315
|
|
|
1,051
|
|
||
Deferred tax liabilities
|
13,867
|
|
|
8,747
|
|
||
Benefit plan liabilities
|
19,142
|
|
|
14,097
|
|
||
Other long-term liabilities
|
2,770
|
|
|
2,019
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock (par value $1.00 per share; authorized 500,000 shares; none issued
or outstanding) |
—
|
|
|
—
|
|
||
Common stock (par value $0.10 per share; authorized 30,000 shares; issued 24,631
and 24,098 shares, respectively) |
2,463
|
|
|
2,410
|
|
||
Capital in excess of par value
|
68,961
|
|
|
62,284
|
|
||
Retained earnings
|
242,099
|
|
|
220,252
|
|
||
Accumulated other comprehensive loss
|
(24,161
|
)
|
|
(8,844
|
)
|
||
Treasury stock, 7,312 and 7,279 shares of common stock, respectively, at cost
|
(76,763
|
)
|
|
(76,015
|
)
|
||
Total stockholders’ equity
|
212,599
|
|
|
200,087
|
|
||
Total liabilities and stockholders’ equity
|
$
|
361,770
|
|
|
$
|
274,685
|
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
21,847
|
|
|
$
|
19,155
|
|
|
$
|
16,806
|
|
Adjustments to reconcile net income to net cash provided
|
|
|
|
|
|
||||||
by operating activities:
|
|
|
|
|
|
||||||
Gain on sale of product line
|
—
|
|
|
—
|
|
|
(810
|
)
|
|||
Depreciation and amortization
|
17,646
|
|
|
12,703
|
|
|
13,682
|
|
|||
Inventory step-up amortization
|
2,053
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(1,477
|
)
|
|
969
|
|
|
(1,649
|
)
|
|||
Stock based compensation
|
2,787
|
|
|
1,763
|
|
|
1,401
|
|
|||
Pension settlement charge
|
4,914
|
|
|
—
|
|
|
—
|
|
|||
Impairment and loss on disposition of property, plant and equipment
|
241
|
|
|
359
|
|
|
1,977
|
|
|||
Accounts receivable
|
(7,189
|
)
|
|
(4,101
|
)
|
|
(150
|
)
|
|||
Inventories
|
4,539
|
|
|
(3,046
|
)
|
|
2,728
|
|
|||
Taxes Receivable
|
(4,129
|
)
|
|
(640
|
)
|
|
(355
|
)
|
|||
Prepaid expenses and other assets
|
(2,318
|
)
|
|
161
|
|
|
620
|
|
|||
Accounts payable
|
1,167
|
|
|
(59
|
)
|
|
1,118
|
|
|||
Accrued payroll and other compensation
|
3,299
|
|
|
(121
|
)
|
|
1,152
|
|
|||
Accrued taxes
|
337
|
|
|
96
|
|
|
(693
|
)
|
|||
Other liabilities, net
|
(2,089
|
)
|
|
3,041
|
|
|
(1,422
|
)
|
|||
Net cash provided by operating activities
|
41,628
|
|
|
30,280
|
|
|
34,405
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Business acquisitions, net of cash required
|
(79,407
|
)
|
|
—
|
|
|
—
|
|
|||
Redemption of short-term investment
|
—
|
|
|
—
|
|
|
12,015
|
|
|||
Capital expenditures
|
(13,971
|
)
|
|
(13,826
|
)
|
|
(11,404
|
)
|
|||
Proceeds from sale of a product line
|
—
|
|
|
—
|
|
|
1,000
|
|
|||
Acquisition earn out payments
|
(111
|
)
|
|
(160
|
)
|
|
—
|
|
|||
Net cash (used for) provided by investing activities
|
(93,489
|
)
|
|
(13,986
|
)
|
|
1,611
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Debt Proceeds
|
60,000
|
|
|
—
|
|
|
—
|
|
|||
Debt repayments
|
(20,000
|
)
|
|
(34
|
)
|
|
(285
|
)
|
|||
Capital lease payments
|
(646
|
)
|
|
(734
|
)
|
|
(771
|
)
|
|||
Common stock issued
|
2,457
|
|
|
1,497
|
|
|
972
|
|
|||
Common stock repurchased
|
(748
|
)
|
|
(6,617
|
)
|
|
(3,998
|
)
|
|||
Excess tax benefit on stock awards
|
1,486
|
|
|
271
|
|
|
211
|
|
|||
Net cash provided by (used for) financing activities
|
42,549
|
|
|
(5,617
|
)
|
|
(3,871
|
)
|
|||
Effect of exchange rate changes on cash
|
(4,044
|
)
|
|
1,107
|
|
|
573
|
|
|||
(Decrease) Increase in cash and cash equivalents
|
(13,356
|
)
|
|
11,784
|
|
|
32,718
|
|
|||
Cash and cash equivalents at beginning of period
|
75,407
|
|
|
63,623
|
|
|
30,905
|
|
|||
Cash and cash equivalents at end of period
|
$
|
62,051
|
|
|
$
|
75,407
|
|
|
$
|
63,623
|
|
Supplemental Schedule for Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
875
|
|
|
$
|
214
|
|
|
$
|
255
|
|
Income taxes
|
$
|
14,679
|
|
|
$
|
7,227
|
|
|
$
|
5,347
|
|
|
Common Stock Shares
|
|
Common Stock Amount
|
|
Capital in Excess of Par Value
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Treasury Stock
|
|
Total Stockholders' Equity
|
|||||||||||||
Balance at December 31, 2011
|
23,645
|
|
|
$
|
2,365
|
|
|
$
|
56,214
|
|
|
$
|
184,291
|
|
|
$
|
(16,618
|
)
|
|
$
|
(65,400
|
)
|
|
$
|
160,852
|
|
Net income
|
|
|
|
|
|
|
16,806
|
|
|
|
|
|
|
16,806
|
|
|||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(1,748
|
)
|
|
|
|
(1,748
|
)
|
|||||||||||
Stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(3,998
|
)
|
|
(3,998
|
)
|
|||||||||||
Stock issued under employee plans
|
122
|
|
|
12
|
|
|
960
|
|
|
|
|
|
|
|
|
972
|
|
|||||||||
Excess tax benefit on stock awards
|
|
|
|
|
211
|
|
|
|
|
|
|
|
|
211
|
|
|||||||||||
Stock based compensation expense
|
|
|
|
|
1,149
|
|
|
|
|
|
|
|
|
1,149
|
|
|||||||||||
Stock issued to directors
|
18
|
|
|
2
|
|
|
250
|
|
|
|
|
|
|
|
|
252
|
|
|||||||||
Balance at December 31, 2012
|
23,785
|
|
|
2,379
|
|
|
58,784
|
|
|
201,097
|
|
|
(18,366
|
)
|
|
(69,398
|
)
|
|
174,496
|
|
||||||
Net income
|
|
|
|
|
|
|
19,155
|
|
|
|
|
|
|
19,155
|
|
|||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
9,522
|
|
|
|
|
9,522
|
|
|||||||||||
Stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(6,617
|
)
|
|
(6,617
|
)
|
|||||||||||
Stock issued under employee plans
|
297
|
|
|
30
|
|
|
1,467
|
|
|
|
|
|
|
|
|
1,497
|
|
|||||||||
Excess tax benefit on stock awards
|
|
|
|
|
271
|
|
|
|
|
|
|
|
|
271
|
|
|||||||||||
Stock based compensation expense
|
|
|
|
|
1,511
|
|
|
|
|
|
|
|
|
1,511
|
|
|||||||||||
Stock issued to directors
|
16
|
|
|
1
|
|
|
251
|
|
|
|
|
|
|
|
|
252
|
|
|||||||||
Balance at December 31, 2013
|
24,098
|
|
|
2,410
|
|
|
62,284
|
|
|
220,252
|
|
|
(8,844
|
)
|
|
(76,015
|
)
|
|
200,087
|
|
||||||
Net Income
|
|
|
|
|
|
|
21,847
|
|
|
|
|
|
|
21,847
|
|
|||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(15,317
|
)
|
|
|
|
(15,317
|
)
|
|||||||||||
Stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(748
|
)
|
|
(748
|
)
|
|||||||||||
Stock issued under employee plans
|
524
|
|
|
52
|
|
|
2,405
|
|
|
|
|
|
|
|
|
2,457
|
|
|||||||||
Excess tax benefit on stock awards
|
|
|
|
|
1,486
|
|
|
|
|
|
|
|
|
1,486
|
|
|||||||||||
Stock based compensation expense
|
|
|
|
|
2,535
|
|
|
|
|
|
|
|
|
2,535
|
|
|||||||||||
Stock issued to directors
|
9
|
|
|
1
|
|
|
251
|
|
|
|
|
|
|
|
|
252
|
|
|||||||||
Balance at December 31, 2014
|
24,631
|
|
|
$
|
2,463
|
|
|
$
|
68,961
|
|
|
$
|
242,099
|
|
|
$
|
(24,161
|
)
|
|
$
|
(76,763
|
)
|
|
$
|
212,599
|
|
|
December, 31
|
||||||
In thousands
|
2014
|
|
2013
|
||||
Inventories, net of progress billings and reserves
|
$
|
8,832
|
|
|
$
|
8,793
|
|
Prepaid expenses and other current assets, net
|
30
|
|
|
52
|
|
||
Total tooling related assets
|
$
|
8,862
|
|
|
$
|
8,845
|
|
In thousands
|
|
|
||
Cash
|
|
$
|
7,493
|
|
Accounts Receivable
|
|
26,779
|
|
|
Inventory
|
|
25,046
|
|
|
Other current assets
|
|
2,894
|
|
|
Property, plant and equipment
|
|
38,780
|
|
|
Deferred Taxes
|
|
2,501
|
|
|
Intangible assets (Note 5)
|
|
5,596
|
|
|
Goodwill (Note 5)
|
|
3,943
|
|
|
Total assets acquired
|
|
113,032
|
|
|
|
|
|
||
Other liabilities
|
|
(18,002
|
)
|
|
Deferred taxes
|
|
(8,130
|
)
|
|
Total liabilities assumed
|
|
(26,132
|
)
|
|
Net assets acquired
|
|
$
|
86,900
|
|
|
December 31,
|
||||||
In thousands
|
2014
|
|
2013
|
||||
Raw materials
|
$
|
21,248
|
|
|
$
|
11,944
|
|
Work in process
|
15,753
|
|
|
14,546
|
|
||
Finished goods
|
15,348
|
|
|
9,537
|
|
||
|
52,349
|
|
|
36,027
|
|
||
Less: Progress billings
|
(1,108
|
)
|
|
(1,110
|
)
|
||
Total inventories
|
$
|
51,241
|
|
|
$
|
34,917
|
|
|
Estimated
Useful Lives
|
|
December 31,
|
||||||
In thousands
|
2014
|
|
2013
|
||||||
Land
|
–
|
|
$
|
2,773
|
|
|
$
|
2,215
|
|
Buildings and improvements
|
10-35 years
|
|
56,562
|
|
|
48,779
|
|
||
Machinery and equipment
|
5-25 years
|
|
197,804
|
|
|
166,747
|
|
||
Office equipment
|
2-8 years
|
|
31,139
|
|
|
33,649
|
|
||
Vehicles
|
3-6 years
|
|
930
|
|
|
561
|
|
||
Assets under capital leases:
|
|
|
|
|
|
||||
Land
|
–
|
|
609
|
|
|
692
|
|
||
Buildings and improvements
|
10-35 years
|
|
5,345
|
|
|
6,072
|
|
||
|
|
|
295,162
|
|
|
258,715
|
|
||
Accumulated depreciation
|
|
|
(186,510
|
)
|
|
(183,535
|
)
|
||
Accumulated amortization of capital leases
|
|
|
(2,944
|
)
|
|
(3,078
|
)
|
||
|
|
|
105,708
|
|
|
72,102
|
|
||
Construction in progress
|
|
|
9,649
|
|
|
6,761
|
|
||
Total property, plant and equipment
|
|
|
$
|
115,357
|
|
|
$
|
78,863
|
|
In thousands
|
Performance Materials
|
|
Industrial Filtration
|
|
Thermal/ Acoustical Metals
|
|
Other Products and Services
|
|
Totals
|
||||||||||
Goodwill
|
$
|
13,929
|
|
|
$
|
—
|
|
|
$
|
12,160
|
|
|
$
|
5,787
|
|
|
$
|
31,876
|
|
Accumulated amortization/impairment
|
—
|
|
|
—
|
|
|
(12,160
|
)
|
|
(1,127
|
)
|
|
(13,287
|
)
|
|||||
Balance at December 31, 2013
|
13,929
|
|
|
—
|
|
|
—
|
|
|
4,660
|
|
|
18,589
|
|
|||||
Goodwill
|
13,340
|
|
|
3,943
|
|
|
12,160
|
|
|
5,787
|
|
|
35,230
|
|
|||||
Accumulated amortization/impairment
|
—
|
|
|
—
|
|
|
(12,160
|
)
|
|
(1,127
|
)
|
|
(13,287
|
)
|
|||||
Balance at December 31, 2014
|
$
|
13,340
|
|
|
$
|
3,943
|
|
|
$
|
—
|
|
|
$
|
4,660
|
|
|
$
|
21,943
|
|
In thousands
|
Performance Materials
|
|
Industrial Filtration
|
|
Other Products and Services
|
|
Totals
|
||||||||
Balance at January 1, 2013
|
$
|
13,622
|
|
|
$
|
—
|
|
|
$
|
4,660
|
|
|
$
|
18,282
|
|
Goodwill adjustment
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
||||
Currency translation adjustment
|
197
|
|
|
—
|
|
|
—
|
|
|
197
|
|
||||
Balance at December 31, 2013
|
13,929
|
|
|
—
|
|
|
4,660
|
|
|
18,589
|
|
||||
Goodwill adjustment
|
—
|
|
|
3,943
|
|
|
—
|
|
|
3,943
|
|
||||
Currency translation adjustment
|
(589
|
)
|
|
—
|
|
|
—
|
|
|
(589
|
)
|
||||
Balance at December 31, 2014
|
$
|
13,340
|
|
|
$
|
3,943
|
|
|
$
|
4,660
|
|
|
$
|
21,943
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||
In thousands
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Amortized intangible assets
|
|
|
|
|
|
|
|
|
||||||||
License agreements
|
|
$
|
818
|
|
|
$
|
(818
|
)
|
|
$
|
881
|
|
|
$
|
(881
|
)
|
Technology
|
|
2,500
|
|
|
(143
|
)
|
|
—
|
|
|
—
|
|
||||
Customer Relationships
|
|
2,477
|
|
|
(195
|
)
|
|
—
|
|
|
—
|
|
||||
Patents
|
|
6,037
|
|
|
(3,274
|
)
|
|
6,766
|
|
|
(3,307
|
)
|
||||
Other
|
|
691
|
|
|
(252
|
)
|
|
278
|
|
|
(227
|
)
|
||||
Total amortized intangible assets
|
|
$
|
12,523
|
|
|
$
|
(4,682
|
)
|
|
$
|
7,925
|
|
|
$
|
(4,415
|
)
|
|
|
|
|
|
December 31,
|
||||||
In thousands
|
Effective Rate
|
|
Maturity
|
|
2014
|
|
2013
|
||||
Revolver Loan, due January 31, 2019
|
1.42%
|
|
2019
|
|
$
|
40,000
|
|
|
$
|
—
|
|
Capital Lease, land and building, St. Nazaire, France
|
5.44%
|
|
2016
|
|
893
|
|
|
1,647
|
|
||
Capital Lease, manufacturing equipment, Hamptonville, North Carolina
|
5.00%
|
|
2017
|
|
37
|
|
|
67
|
|
||
|
|
|
|
|
40,930
|
|
|
1,714
|
|
||
Less portion due within one year
|
|
|
|
|
(615
|
)
|
|
(663
|
)
|
||
Total long-term debt
|
|
|
|
|
$
|
40,315
|
|
|
$
|
1,051
|
|
|
December 31,
|
||||||
In thousands
|
2014
|
|
2013
|
||||
Change in benefit obligation:
|
|
|
|
||||
Net benefit obligation at beginning of year
|
$
|
53,427
|
|
|
$
|
60,020
|
|
Interest cost
|
2,348
|
|
|
2,453
|
|
||
Actuarial loss (gain)
|
7,654
|
|
|
(6,900
|
)
|
||
Gross benefits paid
|
(12,602
|
)
|
|
(2,146
|
)
|
||
Net benefit obligation at end of year
|
$
|
50,827
|
|
|
$
|
53,427
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
40,680
|
|
|
$
|
36,355
|
|
Actual return on plan assets
|
945
|
|
|
5,226
|
|
||
Contributions
|
4,252
|
|
|
1,245
|
|
||
Gross benefits paid
|
(12,602
|
)
|
|
(2,146
|
)
|
||
Fair value of plan assets at end of year
|
$
|
33,275
|
|
|
$
|
40,680
|
|
Net benefit obligation in excess of plan assets
|
$
|
(17,552
|
)
|
|
$
|
(12,747
|
)
|
Balance sheet amounts:
|
|
|
|
||||
Noncurrent liabilities
|
$
|
(17,552
|
)
|
|
$
|
(12,747
|
)
|
Total liabilities
|
$
|
(17,552
|
)
|
|
$
|
(12,747
|
)
|
Amounts recognized in accumulated other comprehensive income, net of tax consist of:
|
|
|
|
||||
Net actuarial loss
|
$
|
17,228
|
|
|
$
|
14,830
|
|
Net amount recognized
|
$
|
17,228
|
|
|
$
|
14,830
|
|
|
December 31,
|
||||||
In thousands
|
2014
|
|
2013
|
||||
Projected benefit obligation
|
$
|
50,827
|
|
|
$
|
53,427
|
|
Accumulated benefit obligation
|
$
|
50,827
|
|
|
$
|
53,427
|
|
Fair value of plan assets
|
$
|
33,275
|
|
|
$
|
40,680
|
|
|
December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Interest cost
|
$
|
2,348
|
|
|
$
|
2,453
|
|
|
$
|
2,583
|
|
Expected return on plan assets
|
(2,798
|
)
|
|
(2,691
|
)
|
|
(2,559
|
)
|
|||
Amortization of actuarial net loss
|
725
|
|
|
1,069
|
|
|
918
|
|
|||
Pension settlement cost
|
4,914
|
|
|
—
|
|
|
—
|
|
|||
Total net periodic benefit cost
|
$
|
5,189
|
|
|
$
|
831
|
|
|
$
|
942
|
|
|
Benefit Obligation
|
|
Net Cost
|
|||||||||||
For the years ended December 31,
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2012
|
|||||
Discount rate
|
4.16
|
%
|
|
5.09
|
%
|
|
5.09
|
%
|
|
4.16
|
%
|
|
5.00
|
%
|
Expected return on plan assets
|
7.25
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
7.50
|
%
|
|
7.75
|
%
|
|
|||||||
|
Target Allocation
|
|
Actual Allocation of Plan Assets
December 31, |
||||
Asset Category
|
2015
|
|
2014
|
|
2013
|
||
Equity securities:
|
|
|
|
|
|
|
|
U.S. Equity
|
22% - 60%
|
|
43
|
%
|
|
37
|
%
|
Non-U.S.
|
15% - 25%
|
|
19
|
%
|
|
23
|
%
|
Emerging Markets
|
3% - 9%
|
|
6
|
%
|
|
7
|
%
|
Fixed income securities:
|
|
|
|
|
|
|
|
U.S. Bond funds
|
12% - 38%
|
|
26
|
%
|
|
26
|
%
|
Non-U.S. Bond funds
|
2% - 8%
|
|
3
|
%
|
|
5
|
%
|
Real estate investment trusts
|
0% - 8%
|
|
—
|
%
|
|
—
|
%
|
Cash and cash equivalents
|
0% - 5%
|
|
3
|
%
|
|
2
|
%
|
December 31, 2014
|
|
|
|
|
|
|
|
||||||||
In thousands
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Equity
|
$
|
14,272
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,272
|
|
Non-U.S.
|
6,432
|
|
|
—
|
|
|
—
|
|
|
6,432
|
|
||||
Emerging Markets
|
1,896
|
|
|
—
|
|
|
—
|
|
|
1,896
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Bond funds
|
8,528
|
|
|
—
|
|
|
—
|
|
|
8,528
|
|
||||
Non-U.S. Bond funds
|
917
|
|
|
—
|
|
|
—
|
|
|
917
|
|
||||
Real estate investment trusts
|
170
|
|
|
—
|
|
|
—
|
|
|
170
|
|
||||
Cash and cash equivalents
|
1,060
|
|
|
—
|
|
|
—
|
|
|
1,060
|
|
||||
Total Assets at Fair Value
|
$
|
33,275
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,275
|
|
December 31, 2013
|
|
|
|
|
|
|
|
||||||||
In thousands
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Equity
|
$
|
15,141
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,141
|
|
Non-U.S.
|
9,465
|
|
|
—
|
|
|
—
|
|
|
9,465
|
|
||||
Emerging Markets
|
2,713
|
|
|
—
|
|
|
—
|
|
|
2,713
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Bond funds
|
10,461
|
|
|
—
|
|
|
—
|
|
|
10,461
|
|
||||
Non-U.S. Bond funds
|
1,847
|
|
|
—
|
|
|
—
|
|
|
1,847
|
|
||||
Real estate investment trusts
|
155
|
|
|
—
|
|
|
—
|
|
|
155
|
|
||||
Cash and cash equivalents
|
898
|
|
|
—
|
|
|
—
|
|
|
898
|
|
||||
Total Assets at Fair Value
|
$
|
40,680
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,680
|
|
In thousands
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020-2024
|
||||||||||||
Benefit payments
|
$
|
2,337
|
|
|
$
|
2,365
|
|
|
$
|
2,430
|
|
|
$
|
2,510
|
|
|
$
|
2,647
|
|
|
$
|
14,490
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Risk-free interest rate
|
1.6
|
%
|
|
1.7
|
%
|
|
1.4
|
%
|
Expected life
|
5.1 years
|
|
|
5.2 years
|
|
|
5.7 years
|
|
Expected volatility
|
46
|
%
|
|
65
|
%
|
|
68
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted- Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value
|
||||
Outstanding at December 31, 2013
|
758
|
|
$
|
10.32
|
|
|
|
|
|
||
Granted
|
132
|
|
$
|
27.96
|
|
|
|
|
|
||
Exercised
|
(277)
|
|
$
|
8.87
|
|
|
|
|
|
||
Forfeited/Cancelled
|
(4)
|
|
$
|
9.24
|
|
|
|
|
|
||
Outstanding at December 31, 2014
|
609
|
|
$
|
14.81
|
|
|
7.0
|
|
$
|
10,967
|
|
Options exercisable at December 31, 2014
|
321
|
|
$
|
9.99
|
|
|
5.2
|
|
$
|
7,323
|
|
Expected to vest at December 31, 2014
|
261
|
|
$
|
19.78
|
|
|
8.9
|
|
$
|
3,408
|
|
In thousands except per share amounts
|
|
|
|
||
Outstanding Restricted Shares
|
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
||
Outstanding at December 31, 2013
|
308
|
|
$
|
12.99
|
|
Granted
|
253
|
|
$
|
22.93
|
|
Vested
|
(96)
|
|
$
|
9.41
|
|
Forfeited/Cancelled
|
(6)
|
|
$
|
16.48
|
|
Outstanding at December 31, 2014
|
459
|
|
$
|
19.17
|
|
Expected to vest at December 31, 2014
|
431
|
|
$
|
19.50
|
|
Consolidated Net Sales
|
For the Years Ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Performance Materials Segment:
|
|
|
|
|
|
||||||
Filtration
|
$
|
71,648
|
|
|
$
|
64,752
|
|
|
$
|
68,379
|
|
Thermal Insulation
|
31,404
|
|
|
36,929
|
|
|
38,449
|
|
|||
Life Sciences Filtration
|
12,814
|
|
|
10,320
|
|
|
11,207
|
|
|||
Performance Materials Segment net sales
|
115,866
|
|
|
112,001
|
|
|
118,035
|
|
|||
Industrial Filtration Segment:
|
|
|
|
|
|
||||||
Industrial Filtration
|
112,220
|
|
|
—
|
|
|
—
|
|
|||
Industrial Filtration net sales
|
112,220
|
|
|
—
|
|
|
—
|
|
|||
Thermal/Acoustical Metals Segment:
|
|
|
|
|
|
||||||
Metal parts
|
145,135
|
|
|
135,833
|
|
|
136,276
|
|
|||
Tooling
|
19,130
|
|
|
22,573
|
|
|
17,645
|
|
|||
Thermal/Acoustical Metals Segment net sales
|
164,265
|
|
|
158,406
|
|
|
153,921
|
|
|||
Thermal/Acoustical Fibers Segment:
|
|
|
|
|
|
||||||
Fiber parts
|
124,458
|
|
|
105,876
|
|
|
93,519
|
|
|||
Tooling
|
4,133
|
|
|
8,444
|
|
|
917
|
|
|||
Thermal/Acoustical Fibers Segment net sales
|
128,591
|
|
|
114,320
|
|
|
94,436
|
|
|||
Other Products and Services:
|
|
|
|
|
|
||||||
Life Sciences Vital Fluids
|
19,682
|
|
|
17,175
|
|
|
16,853
|
|
|||
Other Products and Services net sales
|
19,682
|
|
|
17,175
|
|
|
16,853
|
|
|||
Eliminations and Other
|
(4,795
|
)
|
|
(3,933
|
)
|
|
(4,321
|
)
|
|||
Consolidated Net Sales
|
$
|
535,829
|
|
|
$
|
397,969
|
|
|
$
|
378,924
|
|
Operating Income
|
For the Years Ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Performance Materials Segment
|
$
|
9,706
|
|
|
$
|
9,462
|
|
|
$
|
10,400
|
|
Industrial Filtration Segment
|
6,412
|
|
|
—
|
|
|
—
|
|
|||
Thermal/Acoustical Metals Segment
|
13,823
|
|
|
14,088
|
|
|
14,708
|
|
|||
Thermal/Acoustical Fibers Segment
|
29,167
|
|
|
21,486
|
|
|
12,851
|
|
|||
Other Products and Services:
|
|
|
|
|
|
||||||
Life Sciences Vital Fluids
|
1,582
|
|
|
778
|
|
|
1,190
|
|
|||
Corporate Office Expenses
|
(26,642
|
)
|
|
(17,101
|
)
|
|
(17,771
|
)
|
|||
Consolidated Operating Income
|
$
|
34,048
|
|
|
$
|
28,713
|
|
|
$
|
21,378
|
|
Total Assets
|
December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Performance Materials Segment
|
$
|
71,325
|
|
|
$
|
74,838
|
|
|
$
|
74,119
|
|
Industrial Filtration Segment
|
100,201
|
|
|
—
|
|
|
—
|
|
|||
Thermal/Acoustical Metals Segment
|
106,210
|
|
|
104,908
|
|
|
96,019
|
|
|||
Thermal/Acoustical Fibers Segment
|
33,109
|
|
|
30,176
|
|
|
26,830
|
|
|||
Other Products and Services
|
11,580
|
|
|
11,866
|
|
|
11,195
|
|
|||
Corporate Office
|
39,345
|
|
|
52,897
|
|
|
43,753
|
|
|||
Total Assets
|
$
|
361,770
|
|
|
$
|
274,685
|
|
|
$
|
251,916
|
|
|
Capital Expenditures
|
|
Depreciation and Amortization
|
||||||||||||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Performance Materials Segment
|
$
|
4,124
|
|
|
$
|
4,604
|
|
|
$
|
5,231
|
|
|
$
|
4,654
|
|
|
$
|
4,667
|
|
|
$
|
5,290
|
|
Industrial Filtration Segment
|
1,804
|
|
|
—
|
|
|
—
|
|
|
4,536
|
|
|
—
|
|
|
—
|
|
||||||
Thermal/Acoustical Metals Segment
|
8,544
|
|
|
6,027
|
|
|
4,063
|
|
|
4,578
|
|
|
4,777
|
|
|
5,019
|
|
||||||
Thermal/Acoustical Fibers Segment
|
3,296
|
|
|
1,887
|
|
|
1,033
|
|
|
2,166
|
|
|
2,217
|
|
|
2,324
|
|
||||||
Other Products and Services
|
574
|
|
|
243
|
|
|
128
|
|
|
804
|
|
|
588
|
|
|
596
|
|
||||||
Corporate Office
|
659
|
|
|
1,065
|
|
|
949
|
|
|
908
|
|
|
454
|
|
|
453
|
|
||||||
Total
|
$
|
19,001
|
|
|
$
|
13,826
|
|
|
$
|
11,404
|
|
|
$
|
17,646
|
|
|
$
|
12,703
|
|
|
$
|
13,682
|
|
|
Net Sales
|
|
Long-Lived Assets
|
||||||||||||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
United States
|
$
|
345,864
|
|
|
$
|
269,989
|
|
|
$
|
251,695
|
|
|
$
|
72,832
|
|
|
$
|
48,787
|
|
|
$
|
45,979
|
|
France
|
52,534
|
|
|
47,831
|
|
|
52,517
|
|
|
13,861
|
|
|
16,436
|
|
|
17,463
|
|
||||||
Germany
|
77,896
|
|
|
77,229
|
|
|
71,896
|
|
|
12,366
|
|
|
13,287
|
|
|
13,542
|
|
||||||
United Kingdom
|
26,387
|
|
|
—
|
|
|
—
|
|
|
7,601
|
|
|
—
|
|
|
—
|
|
||||||
China
|
29,401
|
|
|
—
|
|
|
—
|
|
|
11,225
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
3,747
|
|
|
2,920
|
|
|
2,816
|
|
|
795
|
|
|
1,815
|
|
|
1,024
|
|
||||||
Total
|
$
|
535,829
|
|
|
$
|
397,969
|
|
|
$
|
378,924
|
|
|
$
|
118,680
|
|
|
$
|
80,325
|
|
|
$
|
78,008
|
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
8,069
|
|
|
$
|
5,477
|
|
|
$
|
3,208
|
|
State
|
1,334
|
|
|
709
|
|
|
265
|
|
|||
Foreign
|
3,883
|
|
|
2,032
|
|
|
2,352
|
|
|||
Total Current
|
13,286
|
|
|
8,218
|
|
|
5,825
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(42
|
)
|
|
$
|
1,609
|
|
|
$
|
(2,031
|
)
|
State
|
(1,626
|
)
|
|
(1,144
|
)
|
|
(291
|
)
|
|||
Foreign
|
191
|
|
|
504
|
|
|
673
|
|
|||
Total Deferred
|
(1,477
|
)
|
|
969
|
|
|
(1,649
|
)
|
|||
Provision for income taxes
|
$
|
11,809
|
|
|
$
|
9,187
|
|
|
$
|
4,176
|
|
|
For the years ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Statutory federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes
|
0.8
|
|
|
2.9
|
|
|
2.2
|
|
Valuation allowances for deferred tax assets, including state
|
1.3
|
|
|
(1.8
|
)
|
|
(17.8
|
)
|
Foreign dividends
|
—
|
|
|
0.5
|
|
|
0.9
|
|
Capitalized transaction costs
|
2.0
|
|
|
—
|
|
|
—
|
|
Domestic production activities deduction
|
(2.6
|
)
|
|
(2.7
|
)
|
|
(2.4
|
)
|
Foreign income taxed at lower rates
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
Other
|
2.1
|
|
|
(1.5
|
)
|
|
2.0
|
|
Effective income tax rate
|
35.1
|
%
|
|
32.4
|
%
|
|
19.9
|
%
|
|
2014
|
|
2013
|
||||||||||||
|
Deferred Tax Assets
|
|
Deferred Tax Assets
|
||||||||||||
In thousands
|
Current
|
|
Long-term
|
|
Current
|
|
Long-term
|
||||||||
Federal
|
$
|
3,399
|
|
|
$
|
—
|
|
|
$
|
3,219
|
|
|
$
|
—
|
|
State
|
711
|
|
|
1,408
|
|
|
321
|
|
|
479
|
|
||||
Foreign
|
1,504
|
|
|
—
|
|
|
398
|
|
|
95
|
|
||||
Totals
|
$
|
5,614
|
|
|
$
|
1,408
|
|
|
$
|
3,938
|
|
|
$
|
574
|
|
|
2014
|
|
2013
|
||||||||||||
|
Deferred Tax Liabilities
|
|
Deferred Tax Liabilities
|
||||||||||||
In thousands
|
Current
|
|
Long-term
|
|
Current
|
|
Long-term
|
||||||||
Federal
|
$
|
—
|
|
|
$
|
10,562
|
|
|
$
|
—
|
|
|
$
|
7,780
|
|
State
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign
|
—
|
|
|
3,305
|
|
|
—
|
|
|
967
|
|
||||
Totals
|
$
|
—
|
|
|
$
|
13,867
|
|
|
$
|
—
|
|
|
$
|
8,747
|
|
|
December 31,
|
||||||
In thousands
|
2014
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Accounts receivable
|
$
|
211
|
|
|
$
|
127
|
|
Inventories
|
884
|
|
|
939
|
|
||
Net operating loss carryforwards
|
4,992
|
|
|
4,566
|
|
||
Other accrued liabilities
|
3,341
|
|
|
2,020
|
|
||
Pension
|
7,295
|
|
|
5,268
|
|
||
Tax Credits
|
1,879
|
|
|
1,953
|
|
||
Total deferred tax assets
|
18,602
|
|
|
14,873
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Domestic liability of foreign assets
|
$
|
—
|
|
|
$
|
96
|
|
Intangible assets
|
6,525
|
|
|
6,066
|
|
||
Property, plant and equipment
|
15,195
|
|
|
9,631
|
|
||
Total deferred tax liabilities
|
21,720
|
|
|
15,793
|
|
||
Valuation allowance
|
3,727
|
|
|
3,315
|
|
||
Net deferred tax liabilities
|
$
|
(6,845
|
)
|
|
$
|
(4,235
|
)
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
||||||
United States
|
$
|
27,463
|
|
|
$
|
23,433
|
|
|
$
|
14,573
|
|
Foreign
|
6,193
|
|
|
4,909
|
|
|
6,409
|
|
|||
Total income before income taxes
|
$
|
33,656
|
|
|
$
|
28,342
|
|
|
$
|
20,982
|
|
In thousands
|
2014
|
|
2013
|
||||
Unrecognized tax benefits at beginning of year
|
$
|
1,864
|
|
|
$
|
1,029
|
|
Increases relating to positions taken in prior periods
|
20
|
|
|
678
|
|
||
Increases relating to current period
|
388
|
|
|
586
|
|
||
Decreases due to settlements with tax authorities
|
—
|
|
|
—
|
|
||
Decreases due to lapse of statute of limitations
|
—
|
|
|
(429
|
)
|
||
Unrecognized tax benefits at end of year
|
$
|
2,272
|
|
|
$
|
1,864
|
|
|
Payments due by period
|
||||||||||
In thousands
|
Operating Lease Payments
|
|
Capital Lease Payments
|
|
Total
|
||||||
2015
|
$
|
4,848
|
|
|
$
|
647
|
|
|
$
|
5,495
|
|
2016
|
3,810
|
|
|
317
|
|
|
4,127
|
|
|||
2017
|
3,708
|
|
|
—
|
|
|
3,708
|
|
|||
2018
|
2,529
|
|
|
—
|
|
|
2,529
|
|
|||
2019
|
1,362
|
|
|
—
|
|
|
1,362
|
|
|||
Thereafter
|
1,080
|
|
|
—
|
|
|
1,080
|
|
|||
Total
|
17,337
|
|
|
964
|
|
|
18,301
|
|
|||
Interest on capital leases
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|||
Total
|
$
|
17,337
|
|
|
$
|
929
|
|
|
$
|
18,266
|
|
|
For the years ended
December 31, |
|||||||
In thousands
|
2014
|
|
2013
|
|
2012
|
|||
Basic average common shares outstanding
|
16,662
|
|
|
16,570
|
|
|
16,717
|
|
Effect of dilutive options and restricted stock awards
|
341
|
|
|
296
|
|
|
256
|
|
Diluted average common shares outstanding
|
17,003
|
|
|
16,866
|
|
|
16,973
|
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||||||||||||||||||
In thousands except per share data
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Net sales
|
$
|
125,226
|
|
|
$
|
99,029
|
|
|
$
|
148,793
|
|
|
$
|
101,051
|
|
|
$
|
134,227
|
|
|
$
|
97,995
|
|
|
$
|
127,583
|
|
|
$
|
99,894
|
|
Gross profit
|
$
|
26,199
|
|
|
$
|
21,365
|
|
|
$
|
34,653
|
|
|
$
|
23,037
|
|
|
$
|
28,564
|
|
|
$
|
20,494
|
|
|
$
|
25,562
|
|
|
$
|
20,329
|
|
Net income
|
$
|
3,716
|
|
|
$
|
4,492
|
|
|
$
|
8,240
|
|
|
$
|
5,955
|
|
|
$
|
4,158
|
|
|
$
|
4,575
|
|
|
$
|
5,733
|
|
|
$
|
4,133
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.22
|
|
|
$
|
0.27
|
|
|
$
|
0.50
|
|
|
$
|
0.36
|
|
|
$
|
0.25
|
|
|
$
|
0.28
|
|
|
$
|
0.34
|
|
|
$
|
0.25
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.26
|
|
|
$
|
0.49
|
|
|
$
|
0.35
|
|
|
$
|
0.24
|
|
|
$
|
0.27
|
|
|
$
|
0.34
|
|
|
$
|
0.25
|
|
In thousands
|
Foreign Currency
Translation
Adjustment
|
|
Defined Benefit
Pension
Adjustment
|
|
Total
Accumulated Other
Comprehensive
(Loss) Income
|
||||||
Balance at December 31, 2011
|
$
|
1,937
|
|
|
$
|
(18,555
|
)
|
|
$
|
(16,618
|
)
|
Other Comprehensive income (loss)
|
1,241
|
|
|
(3,558
|
)
|
(a)
|
(2,317
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
569
|
|
(b)
|
569
|
|
|||
Balance at December 31, 2012
|
$
|
3,178
|
|
|
$
|
(21,544
|
)
|
|
$
|
(18,366
|
)
|
Other Comprehensive income (loss)
|
2,950
|
|
|
5,909
|
|
(a)
|
8,859
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
663
|
|
(b)
|
663
|
|
|||
Balance at December 31, 2013
|
$
|
6,128
|
|
|
$
|
(14,972
|
)
|
|
$
|
(8,844
|
)
|
Other Comprehensive loss
|
(12,714
|
)
|
|
(6,099
|
)
|
(a)
|
(18,813
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
3,496
|
|
(b)
|
3,496
|
|
|||
Balance at December 31, 2014
|
$
|
(6,586
|
)
|
|
$
|
(17,575
|
)
|
|
$
|
(24,161
|
)
|
In thousands
|
|
Balance at January 1,
|
|
Charges to Costs and Expenses
|
|
Charges (Deductions) to Other Accounts
|
|
Deductions
|
|
Balance at December 31,
|
|
||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
|
$
|
480
|
|
|
$
|
384
|
|
|
$
|
(39
|
)
|
2
|
$
|
(116
|
)
|
1
|
$
|
709
|
|
|
Tax valuation allowances
|
|
3,315
|
|
|
1,120
|
|
|
193
|
|
2,5
|
(901
|
)
|
3
|
3,727
|
|
|
|||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
|
$
|
469
|
|
|
$
|
60
|
|
|
$
|
15
|
|
2
|
$
|
(64
|
)
|
1
|
$
|
480
|
|
|
Tax valuation allowances
|
|
3,587
|
|
|
855
|
|
|
—
|
|
|
(1,127
|
)
|
3
|
3,315
|
|
|
|||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
|
$
|
622
|
|
|
$
|
162
|
|
|
$
|
7
|
|
2
|
$
|
(322
|
)
|
1
|
$
|
469
|
|
|
Allowance for note receivable
|
|
480
|
|
|
—
|
|
|
—
|
|
|
(480
|
)
|
4
|
—
|
|
4
|
|||||
Tax valuation allowances
|
|
7,132
|
|
|
854
|
|
|
—
|
|
|
(4,399
|
)
|
3
|
3,587
|
|
|
1.
|
Uncollected receivables written off and recoveries.
|
2.
|
Foreign currency translation and other adjustments.
|
3.
|
Reduction to income tax expense.
|
4.
|
A reserve for
$0.5 million
was recorded during 2004 for the remaining balance of the note receivable associated with the sale of certain assets of the fiberboard operation in 2001, which was included within “Prepaid expenses and other current assets” on the Consolidated Balance Sheets as of December 31, 2011. The receivable was written off against the reserve in 2012.
|
5.
|
Adjustments relating to the acquisition of Industrial Filtration.
|
To the Company:
|
Lydall, Inc.
P.O. Box 151 One Colonial Road Manchester, CT 06045-0151 Attn: Chief Executive Officer |
To the Employee:
|
Joseph A. Abbruzzi
|
By:
|
/S/ Dale Barnhart
7/17/14
Dale Barnhart Date President and Chief Executive Officer |
(i)
|
participate in the ownership, management, operation or control of, or work for (as an employee, consultant or independent contractor) or have any material financial interest in, any business competitive with the Company in (a) any market in which the company for which I have worked in the two (2) preceding years has sold or attempted to sell any of its product in the two (2) years preceding my termination or (b) if the Company has assigned me to duties in a geographic area, within two hundred fifty (250) miles of any such geographic area in which I have worked in the two (2) years preceding my termination,
|
(ii)
|
induce or encourage any employee of the Company to terminate his or her employment with the Company, or
|
(iii)
|
solicit, induce or encourage any person, business or entity which is a supplier of, a purchaser from, or a contracting party with, the Company to terminate any written or oral agreement, order or understanding with the Company or to conduct business in a way that results in an adverse impact to the Company.
|
Employee Name:
|
|
By:
|
|
Date:
|
|
Title:
|
|
EPS Achievement
|
“Vesting Percentage”
of Performance Shares
|
Below Threshold
|
None
|
Threshold
|
50%
|
Target
|
100%
|
Maximum
|
150%
|
Domain
|
Registration Date
|
Expiration Date
|
Owner
|
cellfreeze.com
|
11/24/2010
|
08/17/2015
|
Lydall, Inc.
|
chartermed.com
|
02/16/2006
|
04/02/2015
|
Lydall, Inc.
|
chartermedical.com
|
02/16/2006
|
01/28/2015
|
Lydall, Inc.
|
mybiobag.com
|
02/16/2006
|
12/13/2015
|
Lydall, Inc.
|
mybiopack.com
|
02/16/2006
|
12/13/2015
|
Lydall, Inc.
|
mybiopak.com
|
02/16/2006
|
12/13/2015
|
Lydall, Inc.
|
b.
|
Base Salary
. “Base Salary” is the Participating Employee’s regular earnings as indicated on his or her final paycheck of the Program Year, plus any separately recorded holiday and vacation pay. Base Salary is reduced by earnings attributed to any leave of absence.
|
c.
|
Target Bonus Percentage
. “Target Bonus Percentage” is a specified percentage of a Participating Employee’s Base Salary that is assigned as part of his or her compensation package. Target Bonus Percentages may change from year-to-year based upon approval of the Chief Executive Officer or, in the case of the Chief Executive Officer and his/her direct reports, based upon approval by the Compensation Committee.
|
d.
|
Target Bonus Amount
. “Target Bonus Amount” for each Participating Employee is the product obtained by multiplying his or her Base Salary by his or her Target Bonus Percentage.
|
e.
|
Performance Metrics
. “Performance Metrics” are the following designated measures of financial performance for any given Program Year for Lydall on a consolidated basis or for a Business Unit (as defined below):
|
(i)
|
Operating Income (or “OI”)
— defined as operating income from continuing operations.
|
(ii)
|
Free Cash Flow (or “FCF”)
— defined as Cash Flow from Operations minus Capital Expenditures.
|
(iii)
|
Gross Margin (or “GM”)
— defined as the percentage resulting from: (A) the excess, if any, of net sales from continuing operations over cost of sales from continuing operations; (B) divided by net sales from continuing operations.
|
(iv)
|
Revenue
— defined as total net sales, adjusted for this Performance Metric only to exclude foreign exchange fluctuations from the budgeted exchange rate.
|
f.
|
Performance Targets
. “Performance Targets” are the specific measures of financial performance (expressed with reference to consolidated and Business Unit Performance Metrics) that are established and approved by the Compensation Committee for each Program Year.
|
g.
|
Business Units
. Performance Targets may be established for such business units of the Company as may be determined by the Compensation Committee from time-to-time (each, a “Business Unit” or “BU” and, collectively, the “Business Units”).
|
h.
|
Applicability and Relative Weight of Performance Metrics
. The applicable Performance Metrics and the relative weight of each such Performance Metric (the “Performance Metric Weight”) for the respective Participating Employees shall be established by the Compensation Committee at the same time it establishes the consolidated and Business Unit Performance Targets for each Program Year. For Group A Participating Employees within each Business Unit, the Performance Metrics and Performance Metric Weight will be set based on 80% of their respective Business Unit performance and 20% on Corporate Headquarters (i.e., consolidated) performance.
|
a.
|
Establishment of Performance Targets
. No later than March 31 of each Program Year, the Compensation Committee shall establish the consolidated and Business Unit Performance Targets, Performance Metrics and Performance Metric Weight for such Program Year. All Performance Targets and actual performance with respect to those targets are subject to adjustment by the Compensation Committee, in its discretion, if determined necessary or appropriate to adjust for the effects of extraordinary items, unusual or non-recurring events, changes in accounting principles, realized investment gains or losses, discontinued operations, acquisitions, divestitures, material restructuring or impairment charges and other similar items.
|
b.
|
Determination of Cash Bonus Factors for OI and FCF Achieved
. Cash bonus awards with respect to the OI and FCF Performance Metrics are determined based upon the achievement of the Performance Targets with reference to the applicable cash bonus factor set forth in the table below (hereinafter, the “OI and FCF Cash Bonus Factor”).
|
c.
|
Determination of Cash Bonus Factor for Revenue Achieved
. Cash bonus awards with respect to the Revenue Performance Metric for performance achieved are determined based upon the achievement of the Performance Targets with reference to the applicable cash bonus factor set forth in the table below (hereinafter, the “Revenue Cash Bonus Factor”). Straight line interpolation will be used to calculate the Cash Bonus Factor for actual performance between the achieved performance levels.
|
d.
|
Determination of Cash Bonus Factor for GM Achieved
. Cash bonus awards with respect to the GM Performance Metric for performance achieved are determined based upon the achievement of the Performance Targets with reference to the applicable cash bonus factor set forth in the table below (hereinafter, the “GM Cash Bonus Factor”) Straight line interpolation will be used to calculate the GM Cash Bonus Factor for actual performance between the achieved performance levels.
|
e.
|
Determination of Actual Financial Performance
. As soon as practicable following the completion of each Program Year and the availability of Lydall’s audited consolidated financial statements for such Program Year, the Compensation Committee shall: (i) determine the consolidated and Business Unit Operating Income, Free Cash Flow, Gross Margin and Revenue achieved for the Program Year (each “Performance Metric Achieved”); and (ii) certify in writing the extent to which the Performance Target for each has been achieved, if at all (such certification is referred to as the “Committee Certification”). If, in determining and certifying the achievement of any Performance Targets for the Program Year, the Compensation Committee determines that it is necessary or appropriate to make adjustments by virtue of the authority set forth in paragraph (a) above, the Committee Certification shall include a brief statement setting forth the amount of the adjustment and the reasons therefor.
|
f.
|
Determination of Cash Bonus Amount
. Each Participating Employee, other than Group A Participating Employees within each Business Unit, shall be entitled to receive a cash bonus equal to the product of his or her: (i) Target Bonus Amount, (ii) Performance Metric Weight for the applicable Performance Metric, and (iii) Cash Bonus Factor for the applicable Performance Metric Achieved (as set forth in Committee Certification) for the applicable Program Year.
|
g.
|
Limitation on Payments
. Notwithstanding any other provision of the AIP Program, the following limitations shall apply with respect to the total bonus amount paid to any Participating Employee: (i) the total amount paid to any Group A Participating Employee shall not exceed 200% of their Target Bonus Amount; and (ii) the total amount paid to any group B Participating employee shall not exceed 150% of their Target Bonus Amount.
|
a.
|
Plan Administration
. The Compensation Committee shall be responsible for overseeing the administration and interpretation of this AIP Program and for overseeing the implementation of its provisions. The Compensation Committee reserves the right, in its sole discretion, to modify, amend or terminate this AIP Program at any time. All decisions of the Compensation Committee regarding the interpretation, construction, implementation and administration of this AIP Program shall be final and binding.
|
b.
|
Repayment of Bonus
. The following shall apply with respect to the repayment of bonuses paid under this AIP Program:
|
(i)
|
To the extent not required to be repaid by the other provisions to this Section 6 (b), if, at any time, the Compensation Committee, in its sole discretion, determines that any action or omission by a Participating Employee constituted (i) wrongdoing that contributed to any material misstatement in or omission from any report or statement filed by the Company with the U.S. Securities and Exchange Commission; (ii) intentional misconduct or gross misconduct; (iii) a breach of a fiduciary duty to the Company or its shareholders; or (iv) fraud, then in each such case, commencing with the first Program Year during which such action or omission occurred, the Participating Employee committing such act or omission shall be terminated from participation in this AIP Program and such Participating Employee shall immediately repay to the Company, upon notice to the Participating Employee by the Company, up to 100% (as determined by the Company) of the gross amount paid to the Participating Employee pursuant to this AIP Program during and after such Program Year.
|
(ii)
|
To the extent not required to be repaid by the other provisions to this Section 6(b), any bonus paid pursuant to this AIP Program also shall be subject to recoupment in accordance with the applicable provisions of any law, government regulation or stock exchange listing requirement (and any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).
|
c.
|
Payment
. All cash bonuses shall be paid after issuance of the Committee Certification.
|
d.
|
Active Employment Condition
. To be eligible to receive a bonus payout under this AIP Program, a Participating Employee must be an employee in good standing as of the date the cash bonus is actually paid by Lydall, except as otherwise specifically agreed to by the Board or the Compensation Committee.
|
e.
|
No Guarantee That Cash Bonuses Will Be Paid
. Lydall and the Compensation Committee reserve the right to withhold, reduce or deny payment of a cash bonus otherwise payable under the AIP Program, subject to any limitations that may be imposed by applicable law.
|
f.
|
Not an ERISA Regulated Program
. This is not an ERISA regulated program.
|
g.
|
No Assignability
. No rights of any Participating Employee may be sold, exchanged, transferred, assigned, pledged or otherwise disposed of (including through the use of any cash-settled instrument), either voluntarily or involuntarily by operation of law, other than by will or by the laws of descent and distribution.
|
h.
|
Program Creates No Employment Rights
. Nothing in this AIP Program shall confer upon any Participating Employee a right to continue in the employ of Lydall or affect any right which Lydall may have to terminate such employment.
|
i.
|
Program Unfunded
. This AIP Program is unfunded and nothing in the program shall be construed to create a trust or to establish or evidence any Participating Employee’s claim of any right to payment of a cash bonus other than as a general unsecured creditor.
|
j.
|
Governing Law
. All rights and obligations under this AIP Program shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws.
|
k.
|
Tax Withholding
. All payments hereunder shall be subject to applicable income, employment and other tax withholding as may be required by law.
|
l.
|
Section 409A of the Code
. Lydall intends that cash payments under this AIP Program shall be exempt from Section 409A of the U.S. Internal Revenue Code, as amended
|
m.
|
No Effect on Benefits
. Awards and payments under this AIP Program shall constitute special incentive payments to the Participating Employee and shall not be required to be taken into account in computing the amount of salary or compensation of the Participating Employee for the purpose of determining any contributions to or any benefits under any pension, retirement, profit-sharing, bonus, life insurance, severance or other benefit plan of Lydall or under any agreement with a Participating Employee, unless Lydall has elected to implement a different arrangement or practice.
|
1.
|
I have reviewed this annual report on Form 10-K of Lydall, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 3, 2015
|
|
/s/ Dale G. Barnhart
|
|
|
Dale G. Barnhart
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Lydall, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 3, 2015
|
|
/s/ Robert K. Julian
|
|
|
Robert K. Julian
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 3, 2015
|
|
/s/ Dale G. Barnhart
|
|
|
Dale G. Barnhart
President and Chief Executive Officer
|
|
|
|
March 3, 2015
|
|
/s/ Robert K. Julian
|
|
|
Robert K. Julian
Executive Vice President and Chief Financial Officer
|