Delaware
|
|
06-0865505
|
||||
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
||||
One Colonial Road
|
,
|
Manchester
|
,
|
Connecticut
|
|
06042
|
(Address of principal executive offices)
|
|
(Zip code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $.01 par value
|
LDL
|
New York Stock Exchange
|
|
|
|
Page
Number
|
PART I
|
|
|
|
||
PART II
|
|
|
PART III
|
|
|
PART IV
|
|
|
|
•
|
Overall economic, business and political conditions and the effects on the Company’s markets;
|
•
|
Outlook for first quarter and full year 2020;
|
•
|
Ability to improve operational effectiveness;
|
•
|
Expected vehicle production in the North American, European or Asian markets;
|
•
|
Growth opportunities in markets served by the Company;
|
•
|
Integration and financial performance of the Interface acquisition, acquired in August 2018;
|
•
|
Expected costs and future savings associated with restructuring or other cost savings programs;
|
•
|
Expected gross margin, operating margin and working capital improvements from cost control and other improvement programs;
|
•
|
Future impact of raw material commodity costs;
|
•
|
Product development and new business opportunities;
|
•
|
Future strategic transactions, including but not limited to: acquisitions, joint ventures, alliances, licensing agreements and divestitures;
|
•
|
Pension plan funding;
|
•
|
Future cash flow and uses of cash;
|
•
|
Future amounts of stock-based compensation expense;
|
•
|
Future earnings and other measurements of financial performance;
|
•
|
Ability to meet cash operating requirements;
|
•
|
Future levels of indebtedness and capital spending;
|
•
|
Ability to meet financial covenants in the Company's amended revolving credit facility;
|
•
|
Future impact of the variability of interest rates and foreign currency exchange rates and impacts of hedging instruments;
|
•
|
Expected future impact of recently issued accounting pronouncements upon adoption;
|
•
|
Future effective income tax rates and realization of deferred tax assets;
|
•
|
Estimates of fair values of reporting units and long-lived assets used in assessing goodwill and long-lived assets for possible impairment; and
|
•
|
The expected outcomes of legal proceedings and other contingencies, including environmental matters.
|
•
|
Expected impact of the coronavirus on the Company's businesses
|
Item 1.
|
BUSINESS
|
Item 1A.
|
RISK FACTORS
|
•
|
Identify and effectively complete strategic transactions;
|
•
|
Obtain adequate financing to fund strategic initiatives;
|
•
|
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;
|
•
|
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; and
|
•
|
Successfully invest and deploy capital investments to support our business and commitments to our customers.
|
•
|
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;
|
•
|
Satisfy covenants and other obligations under its existing credit facility, which expires in August 2023, and includes a consolidated net leverage ratio and consolidated fixed charge coverage ratio, 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.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Location
|
|
Primary Business Segment/General Description
|
|
Type of
Interest
|
Hamptonville, North Carolina
|
|
Thermal Acoustical Solutions – Product Manufacturing
|
|
Owned
|
Yadkinville, North Carolina
|
|
Thermal Acoustical Solutions – Product Manufacturing
|
|
Leased
|
Meinerzhagen, Germany
|
|
Thermal Acoustical Solutions – Product Manufacturing
|
|
Owned
|
Saint-Nazaire, France
|
|
Thermal Acoustical Solutions – Product Manufacturing
|
|
Owned
|
Taicang, China
|
|
Thermal Acoustical Solutions – Product Manufacturing
|
|
Leased
|
Green Island, New York
|
|
Performance Materials – Specialty Media Manufacturing
|
|
Owned
|
Rochester, New Hampshire
|
|
Performance Materials – Specialty Media Manufacturing
|
|
Owned
|
Saint-Rivalain, France
|
|
Performance Materials – Specialty Media Manufacturing
|
|
Owned
|
Fulton, New York
|
|
Performance Materials – Specialty Media Manufacturing
|
|
Owned
|
Marshalltown, Iowa
|
|
Performance Materials – Specialty Media Manufacturing
|
|
Owned
|
Altenkirchen, Germany
|
|
Performance Materials – Specialty Media Manufacturing
|
|
Owned
|
St. Elzear, Quebec, Canada
|
|
Technical Nonwovens - Filtration Media Manufacturing
|
|
Owned
|
St. Marie, Quebec, Canada
|
|
Technical Nonwovens - Filtration Media Manufacturing
|
|
Owned
|
Rossendale, United Kingdom
|
|
Technical Nonwovens - Filtration Media Manufacturing
|
|
Owned
|
North Augusta, South Carolina
|
|
Technical Nonwovens - Filtration Media Manufacturing
|
|
Owned
|
Wuxi, China
|
|
Technical Nonwovens - Filtration Media Manufacturing
|
|
Leased
|
Fulda, Germany
|
|
Technical Nonwovens - Filtration Media Manufacturing
|
|
Leased
|
Manchester, Connecticut
|
|
Corporate Office
|
|
Owned
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Name
|
|
Age
|
|
Position and Date of Appointment
|
|
Other Business Experience Since 2015
|
Sara A. Greenstein
|
|
45
|
|
President, Chief Executive Officer (November 18, 2019)
|
|
Senior Vice President of Consumer Solutions, United States Steel Corporation, an integrated steel producer (2014 - 2019)
|
Randall B. Gonzales
|
|
48
|
|
Executive Vice President and Chief Financial Officer (March 12, 2018)
|
|
Chief Financial Officer and Treasurer, Progress Rail Services Corporation, a wholly-owned subsidiary of Caterpillar Inc. (2014-2018), a diversified global supplier of railroad and transit system products and services.
|
Chad A. McDaniel
|
|
46
|
|
Executive Vice President, Chief Administrative Officer and General Counsel (October 15, 2019); formerly Senior Vice President, Chief Administrative Officer and General Counsel (May 13, 2015); formerly Vice President, General Counsel and Secretary (May 10, 2013)
|
|
Director, Chase Corporation (2016), NYSE: CCF, a manufacturer of protective materials for high reliability applications.
|
Joseph A. Abbruzzi
|
|
61
|
|
President, Lydall Thermal Acoustical Solutions (August 30, 2019); formerly President, Technical Nonwovens, (February 20, 2014); formerly Sr. Vice President, General Manager, Lydall Thermal/Acoustical Fibers (March 14, 2011)
|
|
Not applicable
|
Robert B. Junker
|
|
51
|
|
President, Lydall Thermal Acoustical Solutions (October 14, 2019)
|
|
Vice President, Operations, Parker Hannifin (2017 - 2019), a global leader in motion and control technologies; President, Purolator Advanced Filtration Group, CLARCOR (2016-2017), a manufacturer of filtration systems and packaging materials; President & CEO, Hengst North America, a division of Hengst Automotive (2010 - 2016), an international developer and manufacturer of filtration and fluid management solutions for the automotive and engine industry.
|
James V. Laughlan (1)
|
|
47
|
|
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)
|
|
Not applicable
|
Paul A. Marold
|
|
58
|
|
President, Performance Materials (February 15, 2016)
|
|
Chief Operating Officer, Sontara, a division of Jacob Holm & Sons (2014-2016), a global manufacturer of spunlace nonwoven fabrics and finished goods.
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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, 2019 - October 31, 2019
|
505
|
|
|
$
|
23.65
|
|
|
—
|
|
|
—
|
|
Activity November 1, 2019 - November 30, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
Activity December 1, 2019 - December 31, 2019
|
4,139
|
|
|
$
|
19.33
|
|
|
—
|
|
|
—
|
|
Total
|
4,644
|
|
|
$
|
19.80
|
|
|
—
|
|
|
—
|
|
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
|
12/19
|
||||||
Lydall, Inc.
|
|
100.00
|
|
|
108.10
|
|
|
188.45
|
|
|
154.63
|
|
|
61.88
|
|
|
62.52
|
|
S&P Smallcap 600
|
|
100.00
|
|
|
98.03
|
|
|
124.06
|
|
|
140.48
|
|
|
128.56
|
|
|
157.85
|
|
Russell 2000
|
|
100.00
|
|
|
95.59
|
|
|
115.95
|
|
|
132.94
|
|
|
118.30
|
|
|
148.49
|
|
*
|
$100 invested on 12/31/14 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
|
2019 (1)
|
|
2018 (2)
|
|
2017
|
|
2016 (3)
|
|
2015 (4)
|
||||||||||
Financial results for the year
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
837,398
|
|
|
$
|
785,897
|
|
|
$
|
698,437
|
|
|
$
|
566,852
|
|
|
$
|
524,505
|
|
Gross margin
|
18.1
|
%
|
|
19.4
|
%
|
|
23.4
|
%
|
|
24.5
|
%
|
|
23.4
|
%
|
|||||
Impairment of goodwill and other long-lived assets
|
$
|
64,206
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating margin
|
(4.6
|
)%
|
|
6.3
|
%
|
|
9.5
|
%
|
|
9.8
|
%
|
|
10.1
|
%
|
|||||
Employee benefit plans settlement expenses
|
$
|
25,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net (loss) income
|
$
|
(70,513
|
)
|
|
$
|
34,944
|
|
|
$
|
49,317
|
|
|
$
|
37,187
|
|
|
$
|
46,259
|
|
Depreciation and amortization
|
$
|
48,623
|
|
|
$
|
32,731
|
|
|
$
|
25,939
|
|
|
$
|
19,401
|
|
|
$
|
17,162
|
|
Capital expenditures
|
$
|
36,433
|
|
|
$
|
29,630
|
|
|
$
|
24,915
|
|
|
$
|
28,159
|
|
|
$
|
21,555
|
|
Common stock per share data
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income
|
$
|
(4.08
|
)
|
|
$
|
2.03
|
|
|
$
|
2.89
|
|
|
$
|
2.20
|
|
|
$
|
2.76
|
|
Diluted net income
|
$
|
(4.08
|
)
|
|
$
|
2.02
|
|
|
$
|
2.85
|
|
|
$
|
2.16
|
|
|
$
|
2.71
|
|
Financial position
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
153,739
|
|
|
$
|
195,732
|
|
|
$
|
171,389
|
|
|
$
|
165,162
|
|
|
$
|
158,303
|
|
Property, plant and equipment, net
|
$
|
221,642
|
|
|
$
|
213,369
|
|
|
$
|
170,322
|
|
|
$
|
160,795
|
|
|
$
|
114,433
|
|
Goodwill
|
$
|
133,912
|
|
|
$
|
196,963
|
|
|
$
|
68,969
|
|
|
$
|
63,606
|
|
|
$
|
16,841
|
|
Other intangible assets, net
|
$
|
115,577
|
|
|
$
|
136,604
|
|
|
$
|
40,543
|
|
|
$
|
41,447
|
|
|
$
|
5,399
|
|
Total assets
|
$
|
785,937
|
|
|
$
|
872,686
|
|
|
$
|
560,871
|
|
|
$
|
527,029
|
|
|
$
|
358,260
|
|
Long-term debt, net of current maturities
|
$
|
262,713
|
|
|
$
|
314,641
|
|
|
$
|
76,913
|
|
|
$
|
128,141
|
|
|
$
|
20,156
|
|
Total stockholders’ equity
|
$
|
318,420
|
|
|
$
|
369,275
|
|
|
$
|
353,396
|
|
|
$
|
273,456
|
|
|
$
|
245,225
|
|
Total debt to total capitalization
|
46.1
|
%
|
|
46.8
|
%
|
|
17.9
|
%
|
|
32.0
|
%
|
|
7.7
|
%
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Consolidated net sales were $837.4 million in 2019, compared to $785.9 million in 2018, an increase of $51.5 million, or 6.6%, with the increase primarily attributable to a full year of Interface, which was acquired on August 31, 2018, being included in the Company's results. The change in consolidated net sales is summarized in the following table:
|
Components
|
|
Change in Net Sales
|
|
Percent Change
|
|||
Acquisitions and divestitures
|
|
$
|
81,531
|
|
|
10.4
|
%
|
Parts volume and pricing change
|
|
(12,592
|
)
|
|
(1.6
|
)%
|
|
Change in tooling sales
|
|
(1,170
|
)
|
|
(0.1
|
)%
|
|
Foreign currency translation
|
|
(16,268
|
)
|
|
(2.1
|
)%
|
|
Total
|
|
$
|
51,501
|
|
|
6.6
|
%
|
•
|
Gross margin decreased to 18.1% in 2019 compared to 19.4% in 2018, primarily driven by the Thermal Acoustical Solutions segment, and to a lesser extent the Technical Nonwovens segment. The Thermal Acoustical Solutions segment negatively impacted consolidated gross margin by approximately 220 basis points due to higher manufacturing and logistics costs to meet customer demand, combined with unfavorable pricing and product mix. The Technical Nonwovens segment reported improved segment gross margin primarily driven by lower segment restructuring expenses and cost savings associated with those restructuring activities, but negatively impacted consolidated gross margin by approximately 60 basis points due to consolidated segment mix. While the Performance Materials segment reported lower gross margin, the segment favorably impacted consolidated gross margin by approximately 150 basis points from improved segment mix, driven by higher margin sealing and advanced solutions products sales, primarily from the acquired Interface business since August 31, 2018.
|
•
|
Operating loss was $(38.8) million in 2019, compared to operating income of $49.2 million. The operating loss was driven by fourth quarter 2019 goodwill and other long-lived asset impairment charges in the Performance Materials segment of $64.2 million and incremental 2019 intangible assets amortization of $12.2 million in the Performance Materials segment, combined with incremental manufacturing and logistics costs in the Thermal Acoustical Solutions segment. The following items are included in operating income (loss) for 2019 and 2018 and impact the comparability of each year:
|
|
|
2019
|
|
2018
|
||||||||||||
Components (in thousands except per share amounts)
|
|
Operating income effect
|
|
EPS impact
|
|
Operating income effect
|
|
EPS impact
|
||||||||
Impairment of goodwill and long-lived assets
|
|
$
|
64,206
|
|
|
$
|
3.72
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Intangible assets amortization expenses
|
|
$
|
21,481
|
|
|
$
|
0.98
|
|
|
$
|
9,308
|
|
|
$
|
0.40
|
|
Strategic initiatives expenses
|
|
$
|
1,456
|
|
|
$
|
0.07
|
|
|
$
|
3,631
|
|
|
$
|
0.18
|
|
TNW restructuring expenses
|
|
$
|
767
|
|
|
$
|
0.04
|
|
|
$
|
2,296
|
|
|
$
|
0.12
|
|
Inventory step-up purchase accounting adjustments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,975
|
|
|
$
|
0.09
|
|
CEO transition expenses
|
|
$
|
2,259
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reduction-in-force severance expenses
|
|
$
|
1,943
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
In the second quarter of 2019, the Company settled the pension obligation of the U.S. Lydall Pension Plan, which was partially offset by a gain recognized from the withdrawal from a multi-employer pension plan in the fourth quarter of 2019 and resulted in net non-cash settlement expenses of $25.2 million, or $0.86 per diluted share, in 2019.
|
•
|
Net loss was $(70.5) million, or $(4.08) per diluted share in 2019, compared to net income of $34.9 million, or 2.02 per diluted share in 2018.
|
In thousands of dollars
|
|
2019
|
|
Percent Change
|
|
2018
|
|
Percent Change
|
|
2017
|
||||||||
Net sales
|
|
$
|
837,398
|
|
|
6.6
|
%
|
|
$
|
785,897
|
|
|
12.5
|
%
|
|
$
|
698,437
|
|
In thousands of dollars
|
|
2019
|
|
Percent Change
|
|
2018
|
|
Percent Change
|
|
2017
|
||||||||
Cost of sales
|
|
$
|
685,608
|
|
|
8.3
|
%
|
|
$
|
633,252
|
|
|
18.3
|
%
|
|
$
|
535,078
|
|
In thousands of dollars
|
|
2019
|
|
2018
|
|
2017
|
||||||
Gross profit
|
|
$
|
151,790
|
|
|
$
|
152,645
|
|
|
$
|
163,359
|
|
Gross margin
|
|
18.1
|
%
|
|
19.4
|
%
|
|
23.4
|
%
|
In thousands of dollars
|
|
2019
|
|
2018
|
|
2017
|
||||||
Selling, product development and administrative expenses
|
|
$
|
126,409
|
|
|
$
|
103,457
|
|
|
$
|
97,159
|
|
Percentage of net sales
|
|
15.1
|
%
|
|
13.2
|
%
|
|
13.9
|
%
|
In thousands of dollars
|
|
2019
|
|
2018
|
|
2017
|
||||||
Impairment of goodwill and other long-lived assets
|
|
$
|
64,206
|
|
|
$
|
—
|
|
|
$
|
—
|
|
In thousands of dollars
|
|
2019
|
|
2018
|
|
2017
|
||||||
Employee Benefit Plans Settlement Expenses
|
|
$
|
25,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
In thousands of dollars
|
|
2019
|
|
2018
|
|
2017
|
||||||
Interest expense
|
|
$
|
14,262
|
|
|
$
|
6,212
|
|
|
$
|
2,720
|
|
Weighted average interest rate during the year
|
|
4.3
|
%
|
|
3.4
|
%
|
|
2.2
|
%
|
In thousands of dollars
|
|
2019
|
|
2018
|
|
2017
|
||||||
Other (income) expense, net
|
|
$
|
(1,257
|
)
|
|
$
|
(289
|
)
|
|
$
|
2,161
|
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Effective income tax rate
|
|
8.3
|
%
|
|
19.5
|
%
|
|
19.5
|
%
|
Consolidated Net Sales
|
For the Years Ended December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Performance Materials Segment (1):
|
|
|
|
|
|
||||||
Filtration
|
$
|
93,314
|
|
|
$
|
93,089
|
|
|
$
|
87,173
|
|
Sealing and Advanced Solutions
|
152,166
|
|
|
76,128
|
|
|
29,496
|
|
|||
Performance Materials Segment net sales
|
245,480
|
|
|
169,217
|
|
|
116,669
|
|
|||
Technical Nonwovens Segment (2):
|
|
|
|
|
|
||||||
Industrial Filtration
|
144,320
|
|
|
157,606
|
|
|
147,087
|
|
|||
Advanced Materials (3)
|
111,026
|
|
|
119,465
|
|
|
121,990
|
|
|||
Technical Nonwovens net sales
|
255,346
|
|
|
277,071
|
|
|
269,077
|
|
|||
Thermal Acoustical Solutions Segment:
|
|
|
|
|
|
||||||
Parts
|
326,436
|
|
|
328,057
|
|
|
318,217
|
|
|||
Tooling
|
35,141
|
|
|
37,370
|
|
|
23,888
|
|
|||
Thermal Acoustical Solutions Segment net sales
|
361,577
|
|
|
365,427
|
|
|
342,105
|
|
|||
Eliminations and Other (3)
|
(25,005
|
)
|
|
(25,818
|
)
|
|
(29,414
|
)
|
|||
Consolidated Net Sales
|
$
|
837,398
|
|
|
$
|
785,897
|
|
|
$
|
698,437
|
|
Operating Income
|
For the Years Ended December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Performance Materials Segment (1)
|
$
|
(59,804
|
)
|
|
$
|
13,139
|
|
|
$
|
12,321
|
|
Technical Nonwovens Segment (2)
|
22,895
|
|
|
21,323
|
|
|
26,047
|
|
|||
Thermal Acoustical Solutions Segment
|
23,590
|
|
|
38,085
|
|
|
53,132
|
|
|||
Corporate Office Expenses
|
(25,506
|
)
|
|
(23,359
|
)
|
|
(25,300
|
)
|
|||
Consolidated Operating Income
|
$
|
(38,825
|
)
|
|
$
|
49,188
|
|
|
$
|
66,200
|
|
(1)
|
The Performance Materials segment reports the results of Interface and PCC for the periods following the dates of acquisitions of August 31, 2018 and July 12, 2018, respectively, and included $64.2 million in impairment charges and $12.7 million of incremental intangible assets amortization for the year ended December 30, 2019.
|
(2)
|
The Technical Nonwovens segment includes results of Geosol through the date of disposition of May 9, 2019.
|
(3)
|
Included in the Technical Nonwovens segment and Eliminations and Other is $21.0 million, $22.2 million and $26.5 million in intercompany sales to the Thermal Acoustical Solutions segment for the years ended December 31, 2019, 2018 and 2017, respectively.
|
|
|
For the Year Ended
December 31, |
||||||||||
In thousands except ratio data
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
|
$
|
51,331
|
|
|
$
|
49,237
|
|
|
$
|
59,875
|
|
Cash provided by operating activities
|
|
$
|
86,862
|
|
|
$
|
44,739
|
|
|
$
|
62,936
|
|
Cash used for investing activities
|
|
$
|
(32,385
|
)
|
|
$
|
(300,965
|
)
|
|
$
|
(27,329
|
)
|
Cash (used for) provided by financing activities
|
|
$
|
(51,927
|
)
|
|
$
|
247,476
|
|
|
$
|
(53,209
|
)
|
Depreciation and amortization
|
|
$
|
49,000
|
|
|
$
|
33,162
|
|
|
$
|
26,130
|
|
Capital expenditures
|
|
$
|
(35,850
|
)
|
|
$
|
(31,291
|
)
|
|
$
|
(27,006
|
)
|
Total debt
|
|
$
|
272,641
|
|
|
$
|
324,813
|
|
|
$
|
77,190
|
|
Total capitalization (debt plus equity)
|
|
$
|
591,061
|
|
|
$
|
694,088
|
|
|
$
|
430,586
|
|
Total debt to total capitalization
|
|
46.1
|
%
|
|
46.8
|
%
|
|
17.9
|
%
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
In thousands
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
After 5 years
|
|
Total
|
||||||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Employee benefit plan contributions
|
$
|
2,398
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,398
|
|
Operating leases
|
$
|
5,680
|
|
|
$
|
4,329
|
|
|
$
|
3,555
|
|
|
$
|
2,659
|
|
|
$
|
1,848
|
|
|
$
|
9,465
|
|
|
$
|
27,536
|
|
Finance leases*
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||||
Long-term debt*
|
20,733
|
|
|
20,049
|
|
|
19,614
|
|
|
249,111
|
|
|
—
|
|
|
—
|
|
|
309,507
|
|
|||||||
Total Contractual Obligations
|
$
|
28,847
|
|
|
$
|
24,378
|
|
|
$
|
23,169
|
|
|
$
|
251,770
|
|
|
$
|
1,848
|
|
|
$
|
9,465
|
|
|
$
|
339,477
|
|
|
*
|
Includes estimated interest payments
|
|
2019
|
|
2018
|
|
2017
|
|||
Risk-free interest rate
|
1.7
|
%
|
|
2.7
|
%
|
|
2.2
|
%
|
Expected life
|
5.3 years
|
|
|
5.5 years
|
|
|
5.5 years
|
|
Expected volatility
|
37
|
%
|
|
34
|
%
|
|
33
|
%
|
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
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
|
|
Page
|
(a) 1. Financial Statements:
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018, and 2017
|
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018, and 2017
|
|
Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2019
|
|
(a) 2. Financial Statement Schedule:
|
|
Schedule II — Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018, and 2017
|
2.1
|
|
|
2.2
|
|
|
2.3
|
|
|
3.1
|
|
|
3.2
|
|
|
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.
|
4.3
|
|
|
10.1*
|
|
|
10.2*
|
|
|
10.3*
|
|
|
10.4*
|
|
|
10.5*
|
|
|
10.6*
|
|
|
10.7*
|
|
|
10.8*
|
|
|
10.9
|
|
|
10.10*
|
|
|
10.11*
|
|
|
10.12*
|
|
|
10.13*
|
|
10.14*
|
|
|
10.15*
|
|
|
10.16*
|
|
|
10.17*
|
|
|
10.18*
|
|
|
10.19*
|
|
|
10.20*
|
|
|
10.21*
|
|
|
10.22*
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27*
|
|
|
10.28*
|
|
|
10.29*
|
|
|
10.30*
|
|
|
10.31*
|
|
|
10.32*
|
|
|
10.33*
|
|
|
10.34*
|
|
|
10.35
|
|
|
10.36
|
|
|
10.37
|
|
|
10.38
|
|
|
10.39
|
|
|
10.40
|
|
|
10.41*
|
|
|
10.42
|
|
|
10.43*
|
|
|
10.44*
|
|
|
10.45*
|
|
|
10.46*
|
|
|
10.47*
|
|
|
10.48*
|
|
|
10.49*
|
|
|
10.50*
|
|
|
10.51*
|
|
10.52*
|
|
|
10.53
|
|
|
10.54
|
|
|
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
|
|
|
23.1
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
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
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
*
|
Management contract or compensatory plan.
|
Item 16.
|
FORM 10-K SUMMARY
|
|
LYDALL, INC.
|
||
February 26, 2020
|
By:
|
|
/s/ Randall B. Gonzales
|
|
|
|
Randall B. Gonzales
Executive Vice President and Chief Financial
Officer (Principal Financial Officer)
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/s/ Sara A. Greenstein
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
February 26, 2020
|
Sara A. Greenstein
|
|
|
|
|
/s/ Randall B. Gonzales
|
|
Executive Vice President, Chief Financial Officer
(Principal Financial Officer)
|
|
February 26, 2020
|
Randall B. Gonzales
|
|
|
|
|
/s/ James V. Laughlan
|
|
Vice President, Chief Accounting Officer, and Treasurer (Principal Accounting Officer)
|
|
February 26, 2020
|
James V. Laughlan
|
|
|
|
|
|
|
|
|
|
/s/ Randall B. Gonzales
|
|
|
|
February 26, 2020
|
Randall B. Gonzales
|
|
|
|
|
Attorney-in-fact for:
|
|
|
|
|
David G. Bills
|
|
Director
|
|
|
Kathleen Burdett
|
|
Director
|
|
|
James Cannon
|
|
Director
|
|
|
Matthew T. Farrell
|
|
Director
|
|
|
Marc T. Giles
|
|
Chairman of the Board of Directors
|
|
|
William D. Gurley
|
|
Director
|
|
|
Suzanne Hammett
|
|
Director
|
|
|
S. Carl Soderstrom, Jr.
|
|
Director
|
|
|
/s/ PricewaterhouseCoopers LLP
|
|
PricewaterhouseCoopers LLP
|
Hartford, Connecticut
|
February 26, 2020
|
|
For the years ended December 31,
|
||||||||||
In thousands except per share data
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
837,398
|
|
|
$
|
785,897
|
|
|
$
|
698,437
|
|
Cost of sales
|
685,608
|
|
|
633,252
|
|
|
535,078
|
|
|||
Gross profit
|
151,790
|
|
|
152,645
|
|
|
163,359
|
|
|||
Selling, product development and administrative expenses
|
126,409
|
|
|
103,457
|
|
|
97,159
|
|
|||
Impairment of goodwill and other long-lived assets
|
64,206
|
|
|
—
|
|
|
—
|
|
|||
Operating (loss) income
|
(38,825
|
)
|
|
49,188
|
|
|
66,200
|
|
|||
Employee benefit plans settlement expenses
|
25,247
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
14,262
|
|
|
6,212
|
|
|
2,720
|
|
|||
Other (income) expense, net
|
(1,257
|
)
|
|
(289
|
)
|
|
2,161
|
|
|||
(Loss) income before income taxes
|
(77,077
|
)
|
|
43,265
|
|
|
61,319
|
|
|||
Income tax (benefit) expense
|
(6,416
|
)
|
|
8,453
|
|
|
11,974
|
|
|||
(Income) loss from equity method investment
|
(148
|
)
|
|
(132
|
)
|
|
28
|
|
|||
Net (loss) income
|
$
|
(70,513
|
)
|
|
$
|
34,944
|
|
|
$
|
49,317
|
|
(Loss) earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(4.08
|
)
|
|
$
|
2.03
|
|
|
$
|
2.89
|
|
Diluted
|
$
|
(4.08
|
)
|
|
$
|
2.02
|
|
|
$
|
2.85
|
|
Weighted average common shares outstanding
|
17,271
|
|
|
17,204
|
|
|
17,045
|
|
|||
Weighted average common shares and equivalents outstanding
|
17,271
|
|
|
17,330
|
|
|
17,317
|
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(70,513
|
)
|
|
$
|
34,944
|
|
|
$
|
49,317
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension liability adjustment, net of income taxes of $11,605,
$1,285, and $409, respectively |
19,173
|
|
|
(4,204
|
)
|
|
2,016
|
|
|||
Foreign currency translation adjustments
|
436
|
|
|
(16,237
|
)
|
|
25,664
|
|
|||
Unrealized (loss) gain on hedging activities, net of tax
|
(2,903
|
)
|
|
(2,096
|
)
|
|
122
|
|
|||
Total other comprehensive income (loss), net of tax
|
16,706
|
|
|
(22,537
|
)
|
|
27,802
|
|
|||
Comprehensive (loss) income
|
$
|
(53,807
|
)
|
|
$
|
12,407
|
|
|
$
|
77,119
|
|
|
December 31,
|
||||||
In thousands of dollars and shares
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
51,331
|
|
|
$
|
49,237
|
|
Accounts receivable, (net of allowance for doubtful receivables of $1,842 and $1,440, respectively)
|
107,786
|
|
|
144,938
|
|
||
Contract assets
|
28,245
|
|
|
23,040
|
|
||
Inventories
|
80,544
|
|
|
84,465
|
|
||
Taxes receivable
|
3,427
|
|
|
2,912
|
|
||
Prepaid expenses and other current assets
|
12,264
|
|
|
12,486
|
|
||
Total current assets
|
283,597
|
|
|
317,078
|
|
||
Property, plant and equipment, net
|
221,642
|
|
|
213,369
|
|
||
Operating lease right-of-use assets
|
23,116
|
|
|
—
|
|
||
Goodwill
|
133,912
|
|
|
196,963
|
|
||
Other intangible assets, net
|
115,577
|
|
|
136,604
|
|
||
Deferred tax assets
|
1,933
|
|
|
2,055
|
|
||
Other assets, net
|
6,160
|
|
|
6,617
|
|
||
Total assets
|
$
|
785,937
|
|
|
$
|
872,686
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
9,928
|
|
|
$
|
10,172
|
|
Accounts payable
|
73,426
|
|
|
73,265
|
|
||
Accrued payroll and other compensation
|
17,198
|
|
|
16,621
|
|
||
Deferred revenue
|
2,643
|
|
|
6,990
|
|
||
Other accrued liabilities
|
26,663
|
|
|
14,298
|
|
||
Total current liabilities
|
129,858
|
|
|
121,346
|
|
||
Long-term debt
|
262,713
|
|
|
314,641
|
|
||
Long-term lease liability
|
18,424
|
|
|
—
|
|
||
Deferred tax liabilities
|
34,561
|
|
|
39,265
|
|
||
Benefit plan liabilities
|
18,957
|
|
|
22,795
|
|
||
Other long-term liabilities
|
3,004
|
|
|
5,364
|
|
||
Commitments and Contingencies (Note 17)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock (par value $0.01 per share; authorized 500 shares; none issued
or outstanding) (Note 11) |
—
|
|
|
—
|
|
||
Common stock (par value $0.01 per share; authorized 30,000 shares; issued
25,328 and 25,254 shares, respectively) (Note 11) |
253
|
|
|
253
|
|
||
Capital in excess of par value
|
94,140
|
|
|
90,851
|
|
||
Retained earnings
|
340,629
|
|
|
411,325
|
|
||
Accumulated other comprehensive loss
|
(25,979
|
)
|
|
(42,685
|
)
|
||
Treasury stock, 7,705 and 7,698 shares of common stock, respectively, at cost
|
(90,623
|
)
|
|
(90,469
|
)
|
||
Total stockholders’ equity
|
318,420
|
|
|
369,275
|
|
||
Total liabilities and stockholders’ equity
|
$
|
785,937
|
|
|
$
|
872,686
|
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(70,513
|
)
|
|
$
|
34,944
|
|
|
$
|
49,317
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Gain on divestiture
|
(1,459
|
)
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
49,000
|
|
|
33,162
|
|
|
26,130
|
|
|||
Impairment of goodwill and long-lived assets
|
64,206
|
|
|
—
|
|
|
772
|
|
|||
Deferred income taxes
|
(14,585
|
)
|
|
636
|
|
|
(2,933
|
)
|
|||
Employee benefit plans settlement expenses
|
25,247
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
2,829
|
|
|
2,081
|
|
|
4,269
|
|
|||
Inventory step-up amortization
|
—
|
|
|
1,975
|
|
|
1,108
|
|
|||
(Gain) loss on disposition of property, plant and equipment
|
(17
|
)
|
|
230
|
|
|
—
|
|
|||
(Income) loss from equity method investment
|
(148
|
)
|
|
(132
|
)
|
|
28
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
37,470
|
|
|
(7,127
|
)
|
|
(8,046
|
)
|
|||
Contract assets
|
(5,514
|
)
|
|
(3,828
|
)
|
|
—
|
|
|||
Inventories
|
2,619
|
|
|
(6,001
|
)
|
|
(11,116
|
)
|
|||
Taxes receivable
|
(876
|
)
|
|
3,151
|
|
|
(1,216
|
)
|
|||
Prepaid expenses and other assets
|
2,031
|
|
|
(542
|
)
|
|
(784
|
)
|
|||
Accounts payable
|
(393
|
)
|
|
(5,055
|
)
|
|
14,315
|
|
|||
Accrued payroll and other compensation
|
4,597
|
|
|
(2,352
|
)
|
|
1,103
|
|
|||
Deferred revenue
|
(4,267
|
)
|
|
3,801
|
|
|
934
|
|
|||
Accrued taxes
|
2,500
|
|
|
535
|
|
|
(4,708
|
)
|
|||
Benefit plan liabilities
|
(4,288
|
)
|
|
(7,658
|
)
|
|
(5,245
|
)
|
|||
Other, net
|
(1,577
|
)
|
|
(3,081
|
)
|
|
(992
|
)
|
|||
Net cash provided by operating activities
|
86,862
|
|
|
44,739
|
|
|
62,936
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(35,850
|
)
|
|
(31,291
|
)
|
|
(27,006
|
)
|
|||
Proceeds from the sale of property, plant and equipment
|
298
|
|
|
298
|
|
|
—
|
|
|||
Proceeds from divestiture
|
2,298
|
|
|
—
|
|
|
—
|
|
|||
Business acquisitions, net of cash acquired
|
869
|
|
|
(269,972
|
)
|
|
(323
|
)
|
|||
Net cash used for investing activities
|
(32,385
|
)
|
|
(300,965
|
)
|
|
(27,329
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings
|
—
|
|
|
338,000
|
|
|
—
|
|
|||
Debt repayments
|
(52,233
|
)
|
|
(89,862
|
)
|
|
(51,762
|
)
|
|||
Debt issuance cost repayments
|
—
|
|
|
(538
|
)
|
|
—
|
|
|||
Common stock issued
|
448
|
|
|
850
|
|
|
1,323
|
|
|||
Common stock repurchased
|
(142
|
)
|
|
(974
|
)
|
|
(2,770
|
)
|
|||
Net cash (used for) provided by financing activities
|
(51,927
|
)
|
|
247,476
|
|
|
(53,209
|
)
|
|||
Effect of exchange rate changes on cash
|
(456
|
)
|
|
(1,888
|
)
|
|
5,543
|
|
|||
Increase (decrease) in cash and cash equivalents
|
2,094
|
|
|
(10,638
|
)
|
|
(12,059
|
)
|
|||
Cash and cash equivalents at beginning of period
|
49,237
|
|
|
59,875
|
|
|
71,934
|
|
|||
Cash and cash equivalents at end of period
|
$
|
51,331
|
|
|
$
|
49,237
|
|
|
$
|
59,875
|
|
Supplemental Schedule for Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
14,064
|
|
|
$
|
5,960
|
|
|
$
|
2,747
|
|
Income taxes, net
|
$
|
5,863
|
|
|
$
|
4,606
|
|
|
$
|
16,158
|
|
In thousands of dollars and shares
|
Common Stock Shares
|
|
Common Stock Amount
|
|
Capital in Excess of Par Value
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Stockholders' Equity
|
|||||||||||||
Balance at December 31, 2016
|
24,858
|
|
|
$
|
249
|
|
|
$
|
82,387
|
|
|
$
|
325,466
|
|
|
$
|
(47,950
|
)
|
|
$
|
(86,696
|
)
|
|
$
|
273,456
|
|
Net income
|
|
|
|
|
|
|
49,317
|
|
|
|
|
|
|
49,317
|
|
|||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
27,802
|
|
|
|
|
27,802
|
|
|||||||||||
Stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(2,799
|
)
|
|
(2,799
|
)
|
|||||||||||
Stock issued under employee plans
|
152
|
|
|
1
|
|
|
1,350
|
|
|
|
|
|
|
|
|
1,351
|
|
|||||||||
Stock-based compensation expense
|
|
|
|
|
3,868
|
|
|
|
|
|
|
|
|
3,868
|
|
|||||||||||
Stock issued to directors
|
8
|
|
|
|
|
401
|
|
|
|
|
|
|
|
|
401
|
|
||||||||||
Balance at December 31, 2017
|
25,018
|
|
|
250
|
|
|
88,006
|
|
|
374,783
|
|
|
(20,148
|
)
|
|
(89,495
|
)
|
|
353,396
|
|
||||||
Net income
|
|
|
|
|
|
|
34,944
|
|
|
|
|
|
|
34,944
|
|
|||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(22,537
|
)
|
|
|
|
(22,537
|
)
|
|||||||||||
Stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(974
|
)
|
|
(974
|
)
|
|||||||||||
Stock issued under employee plans
|
225
|
|
|
3
|
|
|
852
|
|
|
|
|
|
|
|
|
855
|
|
|||||||||
Stock-based compensation expense
|
|
|
|
|
1,619
|
|
|
|
|
|
|
|
|
1,619
|
|
|||||||||||
Stock issued to directors
|
11
|
|
|
|
|
374
|
|
|
|
|
|
|
|
|
374
|
|
||||||||||
Adoption of ASC 606
|
|
|
|
|
|
|
1,598
|
|
|
|
|
|
|
1,598
|
|
|||||||||||
Balance at December 31, 2018
|
25,254
|
|
|
253
|
|
|
90,851
|
|
|
411,325
|
|
|
(42,685
|
)
|
|
(90,469
|
)
|
|
369,275
|
|
||||||
Net loss
|
|
|
|
|
|
|
(70,513
|
)
|
|
|
|
|
|
(70,513
|
)
|
|||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
16,706
|
|
|
|
|
16,706
|
|
|||||||||||
Stock repurchased
|
|
|
|
|
|
|
|
|
|
|
(154
|
)
|
|
(154
|
)
|
|||||||||||
Stock issued under employee plans
|
46
|
|
|
|
|
448
|
|
|
|
|
|
|
|
|
448
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
2,229
|
|
|
|
|
|
|
|
|
2,229
|
|
|||||||||||
Stock issued to directors
|
28
|
|
|
|
|
612
|
|
|
|
|
|
|
|
|
612
|
|
||||||||||
Adoption of ASC 606 (1)
|
|
|
|
|
|
|
(183
|
)
|
|
|
|
|
|
(183
|
)
|
|||||||||||
Balance at December 31, 2019
|
25,328
|
|
|
$
|
253
|
|
|
$
|
94,140
|
|
|
$
|
340,629
|
|
|
$
|
(25,979
|
)
|
|
$
|
(90,623
|
)
|
|
$
|
318,420
|
|
|
December, 31
|
||||||
In thousands
|
2019
|
|
2018
|
||||
Inventories, net of progress billings and reserves
|
$
|
1,777
|
|
|
$
|
4,262
|
|
Prepaid expenses and other current assets
|
530
|
|
|
469
|
|
||
Other assets, net
|
1,757
|
|
|
987
|
|
||
Total tooling related assets
|
$
|
4,064
|
|
|
$
|
5,718
|
|
In thousands
|
|
December 31, 2019
|
|
December 31, 2018
|
|
Dollar Change
|
||||||
Contract assets
|
|
$
|
28,245
|
|
|
$
|
23,040
|
|
|
$
|
5,205
|
|
Contract liabilities
|
|
$
|
1,441
|
|
|
$
|
4,537
|
|
|
$
|
(3,096
|
)
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
In thousands
|
|
Performance Materials
|
|
Technical Nonwovens
|
|
Thermal Acoustical Solutions
|
|
Eliminations and Other
|
|
Consolidated Net Sales
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
|
$
|
176,094
|
|
|
$
|
157,579
|
|
|
$
|
245,870
|
|
|
$
|
(24,287
|
)
|
|
$
|
555,256
|
|
Europe
|
|
61,889
|
|
|
68,456
|
|
|
98,221
|
|
|
(718
|
)
|
|
227,848
|
|
|||||
Asia
|
|
7,497
|
|
|
29,311
|
|
|
17,486
|
|
|
—
|
|
|
54,294
|
|
|||||
Total Net Sales
|
|
$
|
245,480
|
|
|
$
|
255,346
|
|
|
$
|
361,577
|
|
|
$
|
(25,005
|
)
|
|
$
|
837,398
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
In thousands
|
|
Performance Materials
|
|
Technical Nonwovens
|
|
Thermal Acoustical Solutions
|
|
Eliminations and Other
|
|
Consolidated Net Sales
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
|
$
|
117,313
|
|
|
$
|
167,519
|
|
|
$
|
250,133
|
|
|
$
|
(25,121
|
)
|
|
$
|
509,844
|
|
Europe
|
|
49,055
|
|
|
73,912
|
|
|
99,529
|
|
|
(697
|
)
|
|
221,799
|
|
|||||
Asia
|
|
2,849
|
|
|
35,640
|
|
|
15,765
|
|
|
—
|
|
|
54,254
|
|
|||||
Total Net Sales
|
|
$
|
169,217
|
|
|
$
|
277,071
|
|
|
$
|
365,427
|
|
|
$
|
(25,818
|
)
|
|
$
|
785,897
|
|
In thousands
|
|
|
||
Accounts receivable
|
|
$
|
25,182
|
|
Inventories
|
|
17,013
|
|
|
Prepaid expenses and other current assets
|
|
2,382
|
|
|
Property, plant and equipment
|
|
40,902
|
|
|
Goodwill (Note 6)
|
|
129,749
|
|
|
Other intangible assets (Note 6)
|
|
106,900
|
|
|
Other assets
|
|
308
|
|
|
Total assets acquired, net of cash acquired
|
|
$
|
322,436
|
|
|
|
|
||
Current liabilities
|
|
(11,319
|
)
|
|
Deferred tax liabilities (Note 16)
|
|
(24,081
|
)
|
|
Benefit plan liabilities (Note 12)
|
|
(19,002
|
)
|
|
Other long-term liabilities
|
|
(1,031
|
)
|
|
Total liabilities assumed
|
|
(55,433
|
)
|
|
Total purchase price, net of cash acquired
|
|
$
|
267,003
|
|
|
|
For The Years Ended
December 31, |
||||||||||
|
|
(Actual)
|
|
(Unaudited
Pro Forma) |
|
(Unaudited
Pro Forma) |
||||||
In thousands
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales
|
|
$
|
837,398
|
|
|
$
|
888,355
|
|
|
$
|
840,040
|
|
Net Income
|
|
$
|
(70,513
|
)
|
|
$
|
37,537
|
|
|
$
|
36,773
|
|
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(4.08
|
)
|
|
$
|
2.18
|
|
|
$
|
2.16
|
|
Diluted
|
|
$
|
(4.08
|
)
|
|
$
|
2.17
|
|
|
$
|
2.12
|
|
|
December 31,
|
||||||
In thousands
|
2019
|
|
2018
|
||||
Raw materials
|
$
|
36,322
|
|
|
$
|
37,731
|
|
Work in process
|
14,873
|
|
|
18,296
|
|
||
Finished goods
|
29,349
|
|
|
28,438
|
|
||
Total inventories
|
$
|
80,544
|
|
|
$
|
84,465
|
|
|
Estimated
Useful Lives
|
|
December 31,
|
||||||
In thousands
|
2019
|
|
2018
|
||||||
Land
|
–
|
|
$
|
6,268
|
|
|
$
|
6,280
|
|
Buildings and improvements
|
10-35 years
|
|
107,721
|
|
|
104,036
|
|
||
Machinery and equipment
|
5-25 years
|
|
308,457
|
|
|
289,059
|
|
||
Office equipment
|
2-8 years
|
|
36,905
|
|
|
36,110
|
|
||
Vehicles
|
3-6 years
|
|
1,516
|
|
|
1,640
|
|
||
Assets under finance leases:
|
|
|
|
|
|
||||
Land
|
–
|
|
225
|
|
|
228
|
|
||
Buildings and improvements
|
2-10 years
|
|
—
|
|
|
229
|
|
||
Machinery and equipment
|
8-10 years
|
|
200
|
|
|
1,005
|
|
||
Office equipment
|
5 years
|
|
31
|
|
|
32
|
|
||
|
|
|
461,323
|
|
|
438,619
|
|
||
Accumulated depreciation
|
|
|
(265,586
|
)
|
|
(244,098
|
)
|
||
Accumulated depreciation of finance leases
|
|
|
(143
|
)
|
|
(608
|
)
|
||
|
|
|
195,594
|
|
|
193,913
|
|
||
Construction in progress
|
|
|
26,048
|
|
|
19,456
|
|
||
Total property, plant and equipment, net
|
|
|
$
|
221,642
|
|
|
$
|
213,369
|
|
In thousands
|
Performance Materials
|
|
Technical Nonwovens
|
|
Thermal Acoustical Solutions
|
|
Totals
|
||||||||
Goodwill
|
$
|
144,626
|
|
|
$
|
52,337
|
|
|
$
|
12,160
|
|
|
$
|
209,123
|
|
Accumulated amortization/impairment
|
—
|
|
|
—
|
|
|
(12,160
|
)
|
|
(12,160
|
)
|
||||
Balance at December 31, 2018
|
144,626
|
|
|
52,337
|
|
|
—
|
|
|
196,963
|
|
||||
Goodwill
|
143,658
|
|
|
53,254
|
|
|
12,160
|
|
|
209,072
|
|
||||
Accumulated amortization/impairment
|
(63,000
|
)
|
|
—
|
|
|
(12,160
|
)
|
|
(75,160
|
)
|
||||
Balance at December 31, 2019
|
$
|
80,658
|
|
|
$
|
53,254
|
|
|
$
|
—
|
|
|
$
|
133,912
|
|
In thousands
|
Performance Materials
|
|
Technical Nonwovens
|
|
Totals
|
||||||
Balance at January 1, 2018
|
$
|
13,307
|
|
|
$
|
55,662
|
|
|
$
|
68,969
|
|
Goodwill addition
|
131,509
|
|
|
—
|
|
|
131,509
|
|
|||
Currency translation adjustment
|
(190
|
)
|
|
(3,325
|
)
|
|
(3,515
|
)
|
|||
Balance at December 31, 2018
|
144,626
|
|
|
52,337
|
|
|
196,963
|
|
|||
Goodwill reduction
|
(662
|
)
|
|
—
|
|
|
(662
|
)
|
|||
Goodwill impairment
|
(63,000
|
)
|
|
—
|
|
|
(63,000
|
)
|
|||
Currency translation adjustment
|
(306
|
)
|
|
917
|
|
|
611
|
|
|||
Balance at December 31, 2019
|
$
|
80,658
|
|
|
$
|
53,254
|
|
|
$
|
133,912
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
In thousands
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Amortized intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
|
$
|
142,400
|
|
|
$
|
(30,648
|
)
|
|
$
|
141,455
|
|
|
$
|
(11,453
|
)
|
Patents
|
|
759
|
|
|
(607
|
)
|
|
4,333
|
|
|
(3,816
|
)
|
||||
Technology
|
|
2,500
|
|
|
(977
|
)
|
|
2,500
|
|
|
(810
|
)
|
||||
Trade names
|
|
7,293
|
|
|
(5,143
|
)
|
|
7,235
|
|
|
(2,840
|
)
|
||||
License agreements
|
|
610
|
|
|
(610
|
)
|
|
619
|
|
|
(619
|
)
|
||||
Other
|
|
551
|
|
|
(551
|
)
|
|
561
|
|
|
(561
|
)
|
||||
Total amortized intangible assets
|
|
$
|
154,113
|
|
|
$
|
(38,536
|
)
|
|
$
|
156,703
|
|
|
$
|
(20,099
|
)
|
In thousands
|
|
Performance Materials
|
|
Technical Nonwovens
|
|
Thermal Acoustical Solutions
|
|
Totals
|
||||||||
Impairment of goodwill
|
|
$
|
63,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63,000
|
|
Impairment of other long-lived assets
|
|
1,206
|
|
|
—
|
|
|
—
|
|
|
1,206
|
|
||||
Total impairments
|
|
64,206
|
|
|
—
|
|
|
—
|
|
|
64,206
|
|
|
|
|
|
|
December 31,
|
||||||
In thousands
|
Effective Rate
|
|
Maturity
|
|
2019
|
|
2018
|
||||
Revolver loan
|
3.80%
|
|
8/31/2023
|
|
$
|
126,500
|
|
|
$
|
138,000
|
|
Term loan, net of debt issuance costs
|
3.80%
|
|
8/31/2023
|
|
146,106
|
|
|
186,498
|
|
||
Finance leases
|
0.00% - 2.09%
|
|
2020
|
|
35
|
|
|
315
|
|
||
|
|
|
|
|
272,641
|
|
|
324,813
|
|
||
Less portion due within one year
|
|
|
|
|
(9,928
|
)
|
|
(10,172
|
)
|
||
Total long-term debt, net of debt issuance costs
|
|
|
|
|
$
|
262,713
|
|
|
$
|
314,641
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
In thousands
|
Asset Derivatives
|
|
Liability Derivatives
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
2
|
|
|
$
|
4,538
|
|
|
$
|
179
|
|
|
$
|
2,738
|
|
Cross-currency swaps
|
—
|
|
|
1,817
|
|
|
—
|
|
|
—
|
|
||||
Total derivatives
|
$
|
2
|
|
|
$
|
6,355
|
|
|
$
|
179
|
|
|
$
|
2,738
|
|
|
|
Years Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
Cash flow hedges:
|
|
|
|
|
||||
Interest rate contracts
|
|
$
|
(1,500
|
)
|
|
$
|
(2,096
|
)
|
Cross-currency swaps
|
|
$
|
(1,403
|
)
|
|
$
|
—
|
|
Total derivatives
|
|
$
|
(2,903
|
)
|
|
$
|
(2,096
|
)
|
In thousands
|
For the year ended December 31, 2019
|
||
Finance lease expense:
|
|
||
Amortization of right-of-use assets
|
$
|
81
|
|
Interest on lease liabilities
|
2
|
|
|
Operating lease expense
|
6,510
|
|
|
Short-term lease expense
|
918
|
|
|
Variable lease expense
|
199
|
|
|
Total lease expense
|
$
|
7,710
|
|
In thousands, except lease term
|
December 31, 2019
|
||
Operating leases:
|
|
||
Operating lease right-of-use assets
|
$
|
23,116
|
|
|
|
||
Short-term lease liabilities, included in "Other accrued liabilities"
|
$
|
4,789
|
|
Long-term lease liabilities
|
18,424
|
|
|
Total operating lease liabilities
|
$
|
23,213
|
|
|
|
||
Finance leases:
|
|
||
Property, plant and equipment
|
$
|
456
|
|
Accumulated depreciation
|
(143
|
)
|
|
Property, plant and equipment, net
|
$
|
313
|
|
|
|
||
Short-term lease liabilities, included in debt
|
$
|
35
|
|
Long-term lease liabilities, included in debt
|
—
|
|
|
Total finance lease liabilities
|
$
|
35
|
|
|
|
||
Weighted average remaining lease term:
|
|
||
Operating leases
|
7.1 years
|
|
|
Finance leases
|
20.4 years
|
|
|
For the year ended December 31,
|
||
In thousands
|
2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
6,301
|
|
Operating cash flows from finance leases
|
2
|
|
|
Financing cash flows from finance leases
|
240
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease obligations:
|
|
||
Operating leases
|
1,743
|
|
|
Finance leases
|
—
|
|
In thousands
|
|
|
|
||||
Years Ending December 31,
|
Operating Leases
|
|
Finance Leases
|
||||
2020
|
$
|
5,680
|
|
|
$
|
36
|
|
2021
|
4,329
|
|
|
—
|
|
||
2022
|
3,555
|
|
|
—
|
|
||
2023
|
2,659
|
|
|
—
|
|
||
2024
|
1,848
|
|
|
—
|
|
||
Thereafter
|
9,465
|
|
|
—
|
|
||
Total lease payments
|
27,536
|
|
|
36
|
|
||
Less imputed interest
|
(4,323
|
)
|
|
(1
|
)
|
||
Total discounted future lease payments
|
$
|
23,213
|
|
|
$
|
35
|
|
In thousands
|
|
|
|
||||
Years Ending December 31,
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
$
|
6,004
|
|
|
$
|
279
|
|
2020
|
4,871
|
|
|
35
|
|
||
2021
|
3,877
|
|
|
—
|
|
||
2022
|
3,226
|
|
|
—
|
|
||
2023
|
2,617
|
|
|
—
|
|
||
Thereafter
|
11,111
|
|
|
—
|
|
||
Total lease payments
|
$
|
31,706
|
|
|
$
|
314
|
|
|
December 31,
|
||||||
In thousands
|
2019
|
|
2018
|
||||
Change in benefit obligation:
|
|
|
|
||||
Net benefit obligation at beginning of year
|
$
|
102,679
|
|
|
$
|
51,882
|
|
Benefit obligation assumed through acquisition
|
—
|
|
|
52,392
|
|
||
Service Cost
|
136
|
|
|
46
|
|
||
Interest cost
|
2,132
|
|
|
2,595
|
|
||
Actuarial loss/(gain)
|
5,149
|
|
|
(876
|
)
|
||
Gross benefits paid
|
(2,932
|
)
|
|
(3,360
|
)
|
||
Net effect of remeasurement
|
(3,290
|
)
|
|
—
|
|
||
Settlement
|
(48,773
|
)
|
|
—
|
|
||
Net benefit obligation at end of year
|
$
|
55,101
|
|
|
$
|
102,679
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
87,452
|
|
|
$
|
44,174
|
|
Fair value of plan assets through acquisition
|
—
|
|
|
43,230
|
|
||
Actual return/(loss) on plan assets
|
6,987
|
|
|
(4,092
|
)
|
||
Contributions
|
1,415
|
|
|
7,500
|
|
||
Gross benefits paid
|
(2,932
|
)
|
|
(3,360
|
)
|
||
Net effect of remeasurement
|
(211
|
)
|
|
—
|
|
||
Settlement
|
(48,773
|
)
|
|
—
|
|
||
Fair value of plan assets at end of year
|
$
|
43,938
|
|
|
$
|
87,452
|
|
Net benefit obligation in excess of plan assets
|
$
|
(11,163
|
)
|
|
$
|
(15,227
|
)
|
Balance sheet amounts:
|
|
|
|
||||
Current liabilities
|
$
|
(787
|
)
|
|
$
|
(3,078
|
)
|
Noncurrent liabilities
|
$
|
(10,376
|
)
|
|
$
|
(12,149
|
)
|
Total liabilities
|
$
|
(11,163
|
)
|
|
$
|
(15,227
|
)
|
Amounts recognized in accumulated other comprehensive income, net of tax consist of:
|
|
|
|
||||
Net actuarial loss
|
$
|
2,579
|
|
|
$
|
21,850
|
|
Net amount recognized
|
$
|
2,579
|
|
|
$
|
21,850
|
|
|
December 31,
|
||||||
In thousands
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
$
|
55,101
|
|
|
$
|
102,679
|
|
Accumulated benefit obligation
|
$
|
55,101
|
|
|
$
|
104,188
|
|
Fair value of plan assets
|
$
|
43,938
|
|
|
$
|
87,452
|
|
|
December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Service cost
|
$
|
136
|
|
|
$
|
46
|
|
|
$
|
—
|
|
Interest cost
|
2,886
|
|
|
2,595
|
|
|
2,058
|
|
|||
Expected return on plan assets
|
(2,601
|
)
|
|
(3,339
|
)
|
|
(2,376
|
)
|
|||
Amortization of actuarial net loss
|
464
|
|
|
1,024
|
|
|
1,092
|
|
|||
Total net periodic benefit cost
|
$
|
885
|
|
|
$
|
326
|
|
|
$
|
774
|
|
Settlement loss
|
25,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total employer pension plan cost
|
$
|
26,132
|
|
|
$
|
326
|
|
|
$
|
774
|
|
|
Benefit Obligation
|
|
Net Cost
|
|||||||||||
For the years ended December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2017
|
|||||
Discount rate
|
3.37
|
%
|
|
3.99
|
%
|
|
3.88
|
%
|
|
3.75
|
%
|
|
4.21
|
%
|
Expected return on plan assets
|
5.06
|
%
|
|
4.08
|
%
|
|
4.65
|
%
|
|
5.79
|
%
|
|
6.30
|
%
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
In thousands
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Measured at NAV
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic equity
|
$
|
16,729
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,729
|
|
International equity
|
10,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,903
|
|
|||||
Fixed income
|
3,724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,724
|
|
|||||
U.S. government securities
|
—
|
|
|
2,686
|
|
|
—
|
|
|
—
|
|
|
2,686
|
|
|||||
Corporate and foreign bonds
|
—
|
|
|
1,701
|
|
|
—
|
|
|
—
|
|
|
1,701
|
|
|||||
Real assets
|
3,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,010
|
|
|||||
Hedge fund of funds
|
4,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,009
|
|
|||||
Cash and cash equivalents
|
145
|
|
|
1,031
|
|
|
—
|
|
|
—
|
|
|
1,176
|
|
|||||
Total Assets at Fair Value
|
$
|
38,520
|
|
|
$
|
5,418
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,938
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
In thousands
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Measured at NAV
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic equity
|
$
|
13,941
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,941
|
|
International equity
|
9,547
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,547
|
|
|||||
Fixed income
|
10,977
|
|
|
—
|
|
|
—
|
|
|
27,727
|
|
|
38,704
|
|
|||||
U.S. government securities
|
—
|
|
|
2,466
|
|
|
—
|
|
|
—
|
|
|
2,466
|
|
|||||
Corporate and foreign bonds
|
—
|
|
|
1,448
|
|
|
—
|
|
|
—
|
|
|
1,448
|
|
|||||
Real assets
|
2,808
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,808
|
|
|||||
Hedge fund of funds
|
4,129
|
|
|
—
|
|
|
—
|
|
|
312
|
|
|
4,441
|
|
|||||
Cash and cash equivalents
|
12,027
|
|
|
2,070
|
|
|
—
|
|
|
—
|
|
|
14,097
|
|
|||||
Total Assets at Fair Value
|
$
|
53,429
|
|
|
$
|
5,984
|
|
|
$
|
—
|
|
|
$
|
28,039
|
|
|
$
|
87,452
|
|
In thousands
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025-2028
|
||||||||||||
Benefit payments
|
$
|
5,903
|
|
|
$
|
3,026
|
|
|
$
|
3,065
|
|
|
$
|
3,082
|
|
|
$
|
3,138
|
|
|
$
|
15,957
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Risk-free interest rate
|
1.7
|
%
|
|
2.7
|
%
|
|
2.2
|
%
|
Expected life
|
5.3 years
|
|
|
5.5 years
|
|
|
5.5 years
|
|
Expected volatility
|
37
|
%
|
|
34
|
%
|
|
33
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
In thousands except per share amounts and years
|
|
|
|
|
|
|
|
||||
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted- Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value
|
||||
Outstanding at December 31, 2018
|
623
|
|
$
|
30.14
|
|
|
|
|
|
||
Granted
|
242
|
|
$
|
19.35
|
|
|
|
|
|
||
Exercised
|
(40)
|
|
$
|
11.47
|
|
|
|
|
|
||
Forfeited/Cancelled
|
(142)
|
|
$
|
31.36
|
|
|
|
|
|
||
Outstanding at December 31, 2019
|
683
|
|
$
|
27.15
|
|
|
7.9
|
|
$
|
688
|
|
Options exercisable at December 31, 2019
|
318
|
|
$
|
33.01
|
|
|
6.1
|
|
$
|
372
|
|
Unvested at December 31, 2019
|
365
|
|
$
|
22.04
|
|
|
3.0
|
|
$
|
316
|
|
In thousands except per share amounts
|
|
|
|
||
Outstanding Restricted Shares
|
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
||
Nonvested at December 31, 2018
|
304
|
|
$
|
37.02
|
|
Granted
|
157
|
|
$
|
20.96
|
|
Vested
|
(23)
|
|
$
|
56.45
|
|
Forfeited/Cancelled
|
(150)
|
|
$
|
38.07
|
|
Nonvested at December 31, 2019
|
288
|
|
$
|
26.13
|
|
In thousands
|
Severance and Related Expenses
|
Contract Termination Expenses
|
Facility Exit, Move and Set-up Expenses
|
Total
|
||||||||
Expenses incurred during year ended:
|
|
|
|
|
||||||||
December 31, 2017
|
$
|
181
|
|
$
|
154
|
|
$
|
327
|
|
$
|
662
|
|
December 31, 2018
|
606
|
|
136
|
|
1,555
|
|
2,297
|
|
||||
December 31, 2019
|
145
|
|
—
|
|
622
|
|
767
|
|
||||
Total expenses
|
$
|
932
|
|
$
|
290
|
|
$
|
2,504
|
|
$
|
3,726
|
|
In thousands
|
Total
|
||
December 31, 2017
|
$
|
333
|
|
Pre-tax restructuring expenses, excluding depreciation
|
$
|
2,012
|
|
Cash paid
|
(2,198
|
)
|
|
December 31, 2018
|
$
|
147
|
|
Pre-tax restructuring expenses, excluding depreciation
|
$
|
767
|
|
Cash paid
|
(806
|
)
|
|
December 31, 2019
|
$
|
108
|
|
Consolidated Net Sales
|
For the Years Ended December 31,
|
||||||||||
|
|
|
|
|
|
||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Performance Materials Segment (1):
|
|
|
|
|
|
||||||
Filtration
|
$
|
93,314
|
|
|
$
|
93,089
|
|
|
$
|
87,173
|
|
Sealing and Advanced Solutions
|
152,166
|
|
|
76,128
|
|
|
29,496
|
|
|||
Performance Materials Segment net sales
|
245,480
|
|
|
169,217
|
|
|
116,669
|
|
|||
Technical Nonwovens Segment (2):
|
|
|
|
|
|
||||||
Industrial Filtration
|
144,320
|
|
|
157,606
|
|
|
147,087
|
|
|||
Advanced Materials (3)
|
111,026
|
|
|
119,465
|
|
|
121,990
|
|
|||
Technical Nonwovens net sales
|
255,346
|
|
|
277,071
|
|
|
269,077
|
|
|||
Thermal Acoustical Solutions Segment:
|
|
|
|
|
|
||||||
Parts
|
326,436
|
|
|
328,057
|
|
|
318,217
|
|
|||
Tooling
|
35,141
|
|
|
37,370
|
|
|
23,888
|
|
|||
Thermal Acoustical Solutions Segment net sales
|
361,577
|
|
|
365,427
|
|
|
342,105
|
|
|||
Eliminations and Other (3)
|
(25,005
|
)
|
|
(25,818
|
)
|
|
(29,414
|
)
|
|||
Consolidated Net Sales
|
$
|
837,398
|
|
|
$
|
785,897
|
|
|
$
|
698,437
|
|
Operating Income
|
For the Years Ended December 31,
|
||||||||||
|
|
|
|
|
|
||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Performance Materials Segment (1)
|
$
|
(59,804
|
)
|
|
$
|
13,139
|
|
|
$
|
12,321
|
|
Technical Nonwovens Segment (2)
|
22,895
|
|
|
21,323
|
|
|
26,047
|
|
|||
Thermal Acoustical Solutions Segment
|
23,590
|
|
|
38,085
|
|
|
53,132
|
|
|||
Corporate Office Expenses
|
(25,506
|
)
|
|
(23,359
|
)
|
|
(25,300
|
)
|
|||
Consolidated Operating Income
|
$
|
(38,825
|
)
|
|
$
|
49,188
|
|
|
$
|
66,200
|
|
Total Assets
|
December 31,
|
||||||||||
|
|
|
|
|
|
||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Performance Materials Segment (1)
|
$
|
325,164
|
|
|
$
|
414,211
|
|
|
$
|
72,837
|
|
Technical Nonwovens Segment (2)
|
242,787
|
|
|
242,007
|
|
|
271,713
|
|
|||
Thermal Acoustical Solutions Segment
|
199,218
|
|
|
201,509
|
|
|
189,301
|
|
|||
Corporate Office
|
18,768
|
|
|
14,959
|
|
|
27,020
|
|
|||
Total Assets
|
$
|
785,937
|
|
|
$
|
872,686
|
|
|
$
|
560,871
|
|
|
Capital Expenditures
|
|
Depreciation and Amortization
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Performance Materials Segment (1)
|
$
|
8,914
|
|
|
$
|
11,288
|
|
|
$
|
3,610
|
|
|
$
|
25,118
|
|
|
$
|
9,006
|
|
|
$
|
3,996
|
|
Technical Nonwovens Segment (2)
|
9,345
|
|
|
5,864
|
|
|
2,903
|
|
|
12,702
|
|
|
13,877
|
|
|
12,625
|
|
||||||
Thermal Acoustical Solutions Segment
|
17,858
|
|
|
11,934
|
|
|
17,462
|
|
|
10,168
|
|
|
9,190
|
|
|
8,619
|
|
||||||
Corporate Office
|
316
|
|
|
544
|
|
|
940
|
|
|
635
|
|
|
658
|
|
|
699
|
|
||||||
Total
|
$
|
36,433
|
|
|
$
|
29,630
|
|
|
$
|
24,915
|
|
|
$
|
48,623
|
|
|
$
|
32,731
|
|
|
$
|
25,939
|
|
|
Net Sales
|
|
Long-Lived Assets
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
|
2019 (4)
|
|
2018
|
|
2017
|
||||||||||||
United States (1)
|
$
|
478,720
|
|
|
$
|
422,222
|
|
|
$
|
376,086
|
|
|
$
|
138,265
|
|
|
$
|
136,448
|
|
|
$
|
93,583
|
|
France (1)
|
75,313
|
|
|
66,579
|
|
|
56,214
|
|
|
13,723
|
|
|
13,219
|
|
|
14,268
|
|
||||||
Germany (1)
|
124,402
|
|
|
125,796
|
|
|
105,828
|
|
|
44,116
|
|
|
25,873
|
|
|
20,872
|
|
||||||
United Kingdom
|
26,556
|
|
|
27,156
|
|
|
24,921
|
|
|
5,981
|
|
|
4,844
|
|
|
4,916
|
|
||||||
Canada (2)
|
76,535
|
|
|
87,622
|
|
|
84,701
|
|
|
29,667
|
|
|
25,614
|
|
|
30,739
|
|
||||||
China (1)
|
54,036
|
|
|
54,198
|
|
|
47,856
|
|
|
17,888
|
|
|
11,958
|
|
|
11,896
|
|
||||||
Other (1)
|
1,836
|
|
|
2,324
|
|
|
2,831
|
|
|
3,211
|
|
|
4,085
|
|
|
1,590
|
|
||||||
Total
|
$
|
837,398
|
|
|
$
|
785,897
|
|
|
$
|
698,437
|
|
|
$
|
252,851
|
|
|
$
|
222,041
|
|
|
$
|
177,864
|
|
(1)
|
The Performance Materials segment includes the results of Interface and PCC for the periods following the dates of acquisitions of August 31, 2018 and July 12, 2018, respectively.
|
(2)
|
The Technical Nonwovens segment includes results of Geosol through the date of disposition of May 9, 2019.
|
(3)
|
Included in the Technical Nonwovens segment and Eliminations and Other is $21.0 million, $22.2 million and $26.5 million of intercompany sales to the Thermal Acoustical Solutions segment for the years ended December 31, 2019, 2018 and 2017, respectively.
|
(4)
|
Effective January 1, 2019, the Company adopted ASU 2016-02, "Leases (Topic 842)", requiring the Company to recognize right-of-use assets totaling $23.1 million at December 31, 2019.
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
3,505
|
|
|
$
|
3,739
|
|
|
$
|
11,526
|
|
State
|
381
|
|
|
498
|
|
|
956
|
|
|||
Foreign
|
4,479
|
|
|
3,788
|
|
|
2,425
|
|
|||
Total Current
|
$
|
8,365
|
|
|
$
|
8,025
|
|
|
$
|
14,907
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(12,481
|
)
|
|
$
|
2,646
|
|
|
$
|
(2,472
|
)
|
State
|
(1,442
|
)
|
|
380
|
|
|
256
|
|
|||
Foreign
|
(858
|
)
|
|
(2,598
|
)
|
|
(717
|
)
|
|||
Total Deferred
|
(14,781
|
)
|
|
428
|
|
|
(2,933
|
)
|
|||
Provision (Benefit) for income taxes
|
$
|
(6,416
|
)
|
|
$
|
8,453
|
|
|
$
|
11,974
|
|
|
For the years ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Statutory federal income tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
2.7
|
|
|
1.6
|
|
|
1.6
|
|
Valuation allowances for deferred tax assets, including state
|
(4.4
|
)
|
|
(1.3
|
)
|
|
0.1
|
|
Research and development credits
|
0.7
|
|
|
(1.3
|
)
|
|
(1.0
|
)
|
Capitalized transaction costs
|
—
|
|
|
0.6
|
|
|
—
|
|
Domestic production activities deduction
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
Stock based compensation
|
(0.1
|
)
|
|
(0.7
|
)
|
|
(4.4
|
)
|
Goodwill Impairment
|
(19.6
|
)
|
|
—
|
|
|
—
|
|
Foreign income taxed at lower rates
|
2.4
|
|
|
(1.6
|
)
|
|
(2.8
|
)
|
Reserves for uncertain tax positions
|
0.3
|
|
|
—
|
|
|
(1.7
|
)
|
Repatriation of foreign undistributed earnings
|
—
|
|
|
1.6
|
|
|
1.3
|
|
Revaluation of deferred tax liabilities due to federal rate change
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
Pension plan settlement
|
5.9
|
|
|
—
|
|
|
—
|
|
Other
|
(0.6
|
)
|
|
(0.4
|
)
|
|
0.5
|
|
Effective income tax rate
|
8.3
|
%
|
|
19.5
|
%
|
|
19.5
|
%
|
|
2019
|
|
2018
|
||||||||||||
|
Deferred Tax Assets
|
|
Deferred Tax Assets
|
||||||||||||
In thousands
|
Current
|
|
Long-term
|
|
Current
|
|
Long-term
|
||||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign
|
—
|
|
|
1,933
|
|
|
—
|
|
|
2,055
|
|
||||
Totals
|
$
|
—
|
|
|
$
|
1,933
|
|
|
$
|
—
|
|
|
$
|
2,055
|
|
|
2019
|
|
2018
|
||||||||||||
|
Deferred Tax Liabilities
|
|
Deferred Tax Liabilities
|
||||||||||||
In thousands
|
Current
|
|
Long-term
|
|
Current
|
|
Long-term
|
||||||||
Federal
|
$
|
—
|
|
|
$
|
26,992
|
|
|
$
|
—
|
|
|
$
|
30,193
|
|
State
|
—
|
|
|
2,902
|
|
|
—
|
|
|
3,728
|
|
||||
Foreign
|
—
|
|
|
4,667
|
|
|
—
|
|
|
5,344
|
|
||||
Totals
|
$
|
—
|
|
|
$
|
34,561
|
|
|
$
|
—
|
|
|
$
|
39,265
|
|
|
December 31,
|
||||||
In thousands
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Accounts receivable
|
$
|
377
|
|
|
$
|
172
|
|
Financial Hedging Instruments
|
1,491
|
|
|
585
|
|
||
Interest Expense Carryovers
|
2,371
|
|
|
463
|
|
||
Inventories
|
1,845
|
|
|
520
|
|
||
Net operating loss carryforwards
|
8,478
|
|
|
6,095
|
|
||
Operating lease
|
6,001
|
|
|
—
|
|
||
Other accrued liabilities
|
5,905
|
|
|
2,378
|
|
||
Pension
|
4,274
|
|
|
5,181
|
|
||
Tax Credits
|
2,015
|
|
|
1,846
|
|
||
Total deferred tax assets
|
32,757
|
|
|
17,240
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
21,990
|
|
|
25,133
|
|
||
Right of use assets
|
6,001
|
|
|
—
|
|
||
Property, plant and equipment
|
28,177
|
|
|
23,353
|
|
||
Total deferred tax liabilities
|
56,168
|
|
|
48,486
|
|
||
Valuation allowance
|
9,217
|
|
|
5,964
|
|
||
Net deferred tax liabilities
|
$
|
(32,628
|
)
|
|
$
|
(37,210
|
)
|
|
For the years ended December 31,
|
||||||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
(73,539
|
)
|
|
$
|
33,928
|
|
|
$
|
54,212
|
|
Foreign
|
(3,538
|
)
|
|
9,337
|
|
|
7,107
|
|
|||
Total income before income taxes
|
$
|
(77,077
|
)
|
|
$
|
43,265
|
|
|
$
|
61,319
|
|
In thousands
|
2019
|
|
2018
|
||||
Unrecognized tax benefits at beginning of year
|
$
|
3,563
|
|
|
$
|
2,526
|
|
Decreases relating to positions taken in prior periods
|
(36
|
)
|
|
(298
|
)
|
||
Increases relating to positions taken in prior periods
|
—
|
|
|
—
|
|
||
Increases relating to current period
|
—
|
|
|
1,584
|
|
||
Decreases due to settlements with tax authorities
|
—
|
|
|
(233
|
)
|
||
Decreases due to lapse of statute of limitations
|
(315
|
)
|
|
(16
|
)
|
||
Unrecognized tax benefits at end of year
|
$
|
3,212
|
|
|
$
|
3,563
|
|
|
|
|
|
|
|
|
For the years ended
December 31, |
|||||||
In thousands
|
2019
|
|
2018
|
|
2017
|
|||
Basic average common shares outstanding
|
17,271
|
|
|
17,204
|
|
|
17,045
|
|
Effect of dilutive options and restricted stock awards
|
—
|
|
|
126
|
|
|
272
|
|
Diluted average common shares outstanding
|
17,271
|
|
|
17,330
|
|
|
17,317
|
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||||||||||||||||||
In thousands except per share data
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Net sales
|
$
|
218,025
|
|
|
$
|
191,660
|
|
|
$
|
220,811
|
|
|
$
|
186,413
|
|
|
$
|
205,274
|
|
|
$
|
197,886
|
|
|
$
|
193,288
|
|
|
$
|
209,938
|
|
Gross profit
|
$
|
42,056
|
|
|
$
|
39,507
|
|
|
$
|
45,275
|
|
|
$
|
36,127
|
|
|
$
|
36,356
|
|
|
$
|
35,139
|
|
|
$
|
28,103
|
|
|
$
|
41,872
|
|
Net income (loss)
|
$
|
3,890
|
|
|
$
|
11,054
|
|
|
$
|
(6,946
|
)
|
|
$
|
10,450
|
|
|
$
|
3,004
|
|
|
$
|
6,256
|
|
|
$
|
(70,461
|
)
|
|
$
|
7,184
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.23
|
|
|
$
|
0.64
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.61
|
|
|
$
|
0.17
|
|
|
$
|
0.36
|
|
|
$
|
(4.07
|
)
|
|
$
|
0.42
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.64
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.60
|
|
|
$
|
0.17
|
|
|
$
|
0.36
|
|
|
$
|
(4.07
|
)
|
|
$
|
0.42
|
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||||||||||||||||||
In thousands except per share data
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Gross profit impact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory step-up purchase accounting adjustments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,390
|
|
|
$
|
—
|
|
|
$
|
585
|
|
Restructuring, severance and segment consolidation expenses
|
351
|
|
|
449
|
|
|
42
|
|
|
876
|
|
|
88
|
|
|
400
|
|
|
1,137
|
|
|
169
|
|
||||||||
Net income impact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory step-up purchase accounting adjustments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,077
|
|
|
$
|
—
|
|
|
$
|
438
|
|
Restructuring, severance and segment consolidation expenses
|
364
|
|
|
494
|
|
|
93
|
|
|
711
|
|
|
114
|
|
|
409
|
|
|
1,836
|
|
|
527
|
|
||||||||
Goodwill and other long-lived asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,206
|
|
|
—
|
|
||||||||
CEO transition expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,728
|
|
|
—
|
|
||||||||
Strategic initiatives expenses
|
652
|
|
|
87
|
|
|
311
|
|
|
923
|
|
|
—
|
|
|
1,730
|
|
|
161
|
|
|
493
|
|
||||||||
Employee benefit plan settlements
|
—
|
|
|
—
|
|
|
14,977
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
(347
|
)
|
|
—
|
|
||||||||
Gain on sale from a divestiture
|
—
|
|
|
—
|
|
|
(1,265
|
)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Discrete tax items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
In thousands
|
Foreign Currency
Translation
Adjustment
|
|
Defined Benefit
Pension
Adjustment
|
|
Gains and Losses on Cash Flow Hedges
|
|
Total
Accumulated Other
Comprehensive
(Loss) Income
|
||||||||
Balance at December 31, 2016
|
$
|
(27,885
|
)
|
|
$
|
(20,065
|
)
|
|
$
|
—
|
|
|
$
|
(47,950
|
)
|
Other Comprehensive income
|
25,664
|
|
|
1,299
|
|
(a)
|
122
|
|
(c)
|
27,085
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
717
|
|
(b)
|
—
|
|
|
717
|
|
||||
Balance at December 31, 2017
|
$
|
(2,221
|
)
|
|
$
|
(18,049
|
)
|
|
$
|
122
|
|
|
$
|
(20,148
|
)
|
Other Comprehensive loss
|
(16,237
|
)
|
|
(4,998
|
)
|
(a)
|
(2,096
|
)
|
(c)
|
(23,331
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
794
|
|
(b)
|
—
|
|
|
794
|
|
||||
Balance at December 31, 2018
|
$
|
(18,458
|
)
|
|
$
|
(22,253
|
)
|
|
$
|
(1,974
|
)
|
|
$
|
(42,685
|
)
|
Other Comprehensive income (loss)
|
436
|
|
|
(222
|
)
|
(a)
|
(2,903
|
)
|
(c)
|
(2,689
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
19,395
|
|
(b)
|
—
|
|
|
19,395
|
|
||||
Balance at December 31, 2019
|
$
|
(18,022
|
)
|
|
$
|
(3,080
|
)
|
|
$
|
(4,877
|
)
|
|
$
|
(25,979
|
)
|
In thousands
|
|
Balance at January 1,
|
|
Charges to Costs and Expenses
|
|
Charges (Deductions) to Other Accounts
|
|
Deductions
|
|
Balance at December 31,
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
|
$
|
1,440
|
|
|
$
|
1,036
|
|
|
$
|
(11
|
)
|
2
|
$
|
(623
|
)
|
1
|
$
|
1,842
|
|
Tax valuation allowances
|
|
5,964
|
|
|
3,328
|
|
|
(75
|
)
|
2
|
—
|
|
3
|
9,217
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
|
$
|
1,507
|
|
|
$
|
785
|
|
|
$
|
(58
|
)
|
2
|
$
|
(794
|
)
|
1
|
$
|
1,440
|
|
Tax valuation allowances
|
|
5,709
|
|
|
3,859
|
|
|
(192
|
)
|
2
|
(3,412
|
)
|
3
|
5,964
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
|
$
|
1,429
|
|
|
$
|
541
|
|
|
$
|
103
|
|
2
|
$
|
(566
|
)
|
1
|
$
|
1,507
|
|
Tax valuation allowances
|
|
4,903
|
|
|
886
|
|
|
394
|
|
2
|
(474
|
)
|
3
|
5,709
|
|
1.
|
Uncollected receivables written off and recoveries.
|
2.
|
Foreign currency translation and other adjustments.
|
3.
|
Reduction to income tax expense.
|
•
|
30,000,000 shares of common stock, par value of $.01 per share; and
|
•
|
500,000 shares of preferred stock, par value of $.01 per share.
|
To the Company:
|
Lydall, Inc.
P.O. Box 151 One Colonial Road Manchester, CT 06045-0151 Attn: Chief Executive Officer |
To the Employee:
|
Robert Junker
|
By:
|
October 14, 2019
Chad A. McDaniel Date Senior Vice President, General Counsel and Chief Administrative 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:
|
October 14, 2019
|
Title:
|
October 14, 2019
|
(i)
|
in cash or by check, payable to the order of Lydall;
|
(ii)
|
unless prohibited by the Award Administrator (as defined in Section 10 below), by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to Lydall sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Recipient to Lydall of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to Lydall cash or a check sufficient to pay the exercise price and any required tax withholding;
|
(iii)
|
unless prohibited by the Award Administrator, by delivery at the time of exercise (either by actual physical delivery or by attestation) of Shares owned by the Recipient valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Shares, if acquired directly from Lydall, were owned by the Recipient for such minimum period of time, if any, as may be established by the Award Administrator, and (iii) such Shares are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
|
(iv)
|
only if expressly permitted by the Award Administrator, by delivery of a notice of “net exercise,” as a result of which the Participant would receive (i) the number of Shares underlying the portion of the Option being exercised, less (ii) such number of Shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the Fair Market Value on the date of exercise;
|
(v)
|
only if expressly permitted by the Award Administrator, by payment of such other lawful consideration as the Award Administrator may determine; or
|
(vi)
|
only if expressly permitted by the Award Administrator, by any combination of the above forms of payment.
|
6.
|
Other Terms and Conditions.
|
(i)
|
Termination by Reason of Death or Disability. If the Recipient’s employment by the Company terminates by reason of the death or permanent and total disability (as defined in Section 22(e) of the Code) (“Disability”) of the Recipient, the Option shall thereupon automatically terminate, except that the portion of the Option that has vested on or prior to the date of termination may thereafter be exercised by the Recipient or the legal representative of his or her estate for a period of one year from the date of such termination of employment or until the expiration of the maximum term of the Option, whichever period is shorter.
|
(ii)
|
Other Termination. If the Recipient’s employment by the Company terminates for any reason other than the death or Disability of the Recipient, and provided the termination was not for Cause, the Option shall thereupon automatically terminate, except that the portion of the Option that was vested on or prior to the date of such termination of employment may thereafter be exercised by the Recipient for a period of one year from the date of such termination of employment or until the expiration of the maximum term of such Option, whichever period is shorter. Notwithstanding the foregoing, if the Award Administrator determines that the termination of the Recipient’s employment by the Company was for Cause, the Option shall automatically terminate as of
|
(i)
|
If the Award Administrator determines in good faith that the Recipient has engaged in fraudulent conduct relating to the Company, then (i) the Option shall be forfeited and (ii) with respect to the year in which such fraudulent conduct occurred, if the Recipient realized any Economic Value from the Option that was based on or resulted from such fraudulent conduct, the Recipient shall promptly reimburse to the Company such Economic Value.
|
(ii)
|
This Option shall be subject to recoupment as required by the applicable provisions of any law (including without limitation Section 10D of the Exchange Act), 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).
|
|
|
|
|
|
LYDALL, INC.
By: /s/ Dale G. Barnhart
|
|
|
Name: Dale G. Barnhart
|
|
|
Title: President and Chief Executive Officer
|
|
|
|
(a)
|
“Board” means the Board of Directors of Lydall, Inc.
|
(b)
|
“Cause” shall have the meaning set forth in that certain employment agreement between the Recipient and the Company dated as of October 14, 2019.
|
(c)
|
“Change in Control Event” shall mean the occurrence, after the Effective Date, of any of the following events:
|
(1)
|
a report on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) shall be filed with the Commission pursuant to the Exchange Act and that report discloses that any person or persons acting together which would constitute a group (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other than Lydall (or one of its subsidiaries) or any employee benefit plan sponsored by Lydall (or one of its subsidiaries), is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 50% or more of the outstanding voting stock of Lydall;
|
(2)
|
any person or persons acting together which would constitute a group (within the meaning of Section 13(d) or 14(d)(2) of the Exchange Act), other than Lydall (or one of its subsidiaries) or any employee benefit plan sponsored by Lydall (or one of its subsidiaries), shall purchase securities pursuant to a tender offer or exchange offer to acquire any voting stock of Lydall (or any securities convertible into voting stock of Lydall) and, immediately after consummation of that purchase, that person is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 50% or more of the outstanding voting stock of Lydall;
|
(3)
|
the consummation of: (i) a merger, consolidation or reorganization of Lydall with or into any other person if, as a result of such merger, consolidation or reorganization, 50% or less of the combined voting power of the then outstanding securities of such other person immediately after such merger, consolidation or reorganization is held in the aggregate by the holders of voting stock of Lydall immediately prior to such merger, consolidation or reorganization; (ii) any sale, lease, exchange or other transfer of all or substantially all of the assets of Lydall and its consolidated subsidiaries to any other person if, as a result of such sale, lease, exchange or other transfer, 50% or less of the combined voting power of the then outstanding securities of such other person immediately after such sale, lease, exchange or transfer is held in the aggregate by the holders of voting stock of Lydall immediately prior to such sale, lease, exchange or other transfer; or (iii) a transaction immediately after the consummation of which any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act) would be
|
(4)
|
the dissolution or complete liquidation of Lydall; or
|
(5)
|
during any period of twelve consecutive months, the individuals who at the beginning of that period constituted the Board shall cease for any reason to constitute a majority of the Board, unless the election, or the nomination for election by Lydall’s stockholders, of each director of Lydall first elected during such period was approved by a vote of at least a majority of the directors of Lydall then still in office who were directors of Lydall at the beginning of such period.
|
(d)
|
“Code” means the Internal Revenue Code of 1986 and any regulations thereunder, each as amended from time to time.
|
(e)
|
“Commission” means the U.S. Securities and Exchange Commission.
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(f)
|
“Committee” means (i) the Compensation Committee of the Board or (ii) any other committee or subcommittee of the Board to the extent that the Board’s powers or authority under this Agreement have been delegated to such committee or subcommittee by the Board or by the Compensation Committee of the Board.
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(g)
|
“Common Stock” means shares of common stock, $0.10 par value per share, of Lydall.
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(h)
|
“Company” means collectively Lydall and each Lydall Affiliate at the relevant applicable time.
|
(i)
|
“Economic Value” means the amount reportable by the Recipient as taxable compensation for federal income tax purposes with respect to the Option.
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(j)
|
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
|
(k)
|
“Fair Market Value” means the fair market value per share of Common Stock, determined as follows:
|
(1)
|
if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the date of determination; or
|
(2)
|
if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTCBB market data vendor as listed on the OTCBB website (otcbb.com) (or another similar system then in use as determined by the Award Administrator) on the date of determination; or
|
(3)
|
if the Common Stock is not publicly traded, the Award Administrator will determine the Fair Market Value for purposes of this Agreement using any measure of value it determines to be appropriate (including, as it considers appropriate, relying on appraisals) in a manner consistent with the valuation
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(l)
|
“Lydall Affiliate” means (i) any of Lydall’s present or future parent or subsidiary corporations (as defined in Sections 424(e) or (f) of the Code) during the time that such parent or subsidiary corporation satisfies such definition and (ii) any other business venture (including, without limitation, joint venture or limited liability company) in which Lydall has a direct or indirect controlling interest, as determined from time to time by the Award Administrator.
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(m)
|
“Lydall Affiliates” means collectively each Lydall Affiliate at the relevant applicable time.
|
(n)
|
“Nonqualified Stock Option” is an option to acquire Shares that does not qualify as an “incentive stock option” under Section 422 of the Code.
|
(o)
|
“NYSE” means the New York Stock Exchange.
|
(p)
|
“NYSE Listed Company Manual” means the NYSE Listed Company Manual, as amended from time to time, an any successor rule or regulation.
|
(q)
|
“Reorganization Event” means: (a) any merger or consolidation as a result of which the Common Stock is converted into or exchanged for the right to receive cash, securities or other property or are cancelled, (b) any transfer or disposition of all or substantially all of the outstanding Common Stock for cash, securities or other property pursuant to a share exchange or other transaction, (c) any dissolution or complete liquidation of Lydall, or (d) a Change in Control Event.
|
(r)
|
“Securities Act” means the Securities act of 1933, as amended from time to time.
|
(s)
|
“Share” means a share of Common Stock.
|
(i)
|
in cash or by check, payable to the order of Lydall;
|
(ii)
|
unless prohibited by the Award Administrator (as defined in Section 10 below), by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to Lydall sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Recipient to Lydall of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to Lydall cash or a check sufficient to pay the exercise price and any required tax withholding;
|
(iii)
|
unless prohibited by the Award Administrator, by delivery at the time of exercise (either by actual physical delivery or by attestation) of Shares owned by the Recipient valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Shares, if acquired directly from Lydall, were owned by the Recipient for such minimum period of time, if any, as may be established by the Award Administrator, and (iii) such Shares are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
|
(iv)
|
only if expressly permitted by the Award Administrator, by delivery of a notice of “net exercise,” as a result of which the Participant would receive (i) the number of Shares underlying the portion of the Option being exercised, less (ii) such number of Shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the Fair Market Value on the date of exercise;
|
(v)
|
only if expressly permitted by the Award Administrator, by payment of such other lawful consideration as the Award Administrator may determine; or
|
(vi)
|
only if expressly permitted by the Award Administrator, by any combination of the above forms of payment.
|
6.
|
Other Terms and Conditions.
|
(i)
|
Termination by Reason of Death or Disability. If the Recipient’s employment by the Company terminates by reason of the death or permanent and total disability (as defined in Section 22(e) of the Code) (“Disability”) of the Recipient, the Option shall thereupon automatically terminate, except that the portion of the Option that has vested on or prior to the date of termination may thereafter be exercised by the Recipient or the legal representative of his or her estate for a period of one year from the date of such termination of employment or until the expiration of the maximum term of the Option, whichever period is shorter.
|
(ii)
|
Other Termination. If the Recipient’s employment by the Company terminates for any reason other than the death or Disability of the Recipient, and provided the termination was not for Cause, the Option shall thereupon automatically terminate, except that the portion of the Option that was vested on or prior to the date of such termination of employment may thereafter be exercised by the Recipient for a period of one year from the date of such termination of employment or until the expiration of the maximum term of such Option, whichever period is shorter. Notwithstanding the foregoing, if the Award Administrator determines that the termination of the Recipient’s employment by the Company was for Cause, the Option shall automatically terminate as of
|
(i)
|
If the Award Administrator determines in good faith that the Recipient has engaged in fraudulent conduct relating to the Company, then (i) the Option shall be forfeited and (ii) with respect to the year in which such fraudulent conduct occurred, if the Recipient realized any Economic Value from the Option that was based on or resulted from such fraudulent conduct, the Recipient shall promptly reimburse to the Company such Economic Value.
|
(ii)
|
This Option shall be subject to recoupment as required by the applicable provisions of any law (including without limitation Section 10D of the Exchange Act), 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).
|
|
|
|
|
|
LYDALL, INC.
By: /s/ Dale G. Barnhart
|
|
|
Name: Dale G. Barnhart
|
|
|
Title: President and Chief Executive Officer
|
|
|
|
(a)
|
“Board” means the Board of Directors of Lydall, Inc.
|
(b)
|
“Cause” shall have the meaning set forth in that certain employment agreement between the Recipient and the Company dated as of October 11, 2019 (the “Employment Agreement”).
|
(c)
|
“Change in Control Event” shall mean the occurrence, after the Effective Date, of any of the following events:
|
(1)
|
a report on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) shall be filed with the Commission pursuant to the Exchange Act and that report discloses that any person or persons acting together which would constitute a group (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other than Lydall (or one of its subsidiaries) or any employee benefit plan sponsored by Lydall (or one of its subsidiaries), is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 50% or more of the outstanding voting stock of Lydall;
|
(2)
|
any person or persons acting together which would constitute a group (within the meaning of Section 13(d) or 14(d)(2) of the Exchange Act), other than Lydall (or one of its subsidiaries) or any employee benefit plan sponsored by Lydall (or one of its subsidiaries), shall purchase securities pursuant to a tender offer or exchange offer to acquire any voting stock of Lydall (or any securities convertible into voting stock of Lydall) and, immediately after consummation of that purchase, that person is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 50% or more of the outstanding voting stock of Lydall;
|
(3)
|
the consummation of: (i) a merger, consolidation or reorganization of Lydall with or into any other person if, as a result of such merger, consolidation or reorganization, 50% or less of the combined voting power of the then outstanding securities of such other person immediately after such merger, consolidation or reorganization is held in the aggregate by the holders of voting stock of Lydall immediately prior to such merger, consolidation or reorganization; (ii) any sale, lease, exchange or other transfer of all or substantially all of the assets of Lydall and its consolidated subsidiaries to any other person if, as a result of such sale, lease, exchange or other transfer, 50% or less of the combined voting power of the then outstanding securities of such other person immediately after such sale, lease, exchange or transfer is held in the aggregate by the holders of voting stock of Lydall immediately prior to such sale, lease, exchange or other transfer; or (iii) a transaction immediately after the consummation of which any person (within
|
(4)
|
the dissolution or complete liquidation of Lydall; or
|
(5)
|
during any period of twelve consecutive months, the individuals who at the beginning of that period constituted the Board shall cease for any reason to constitute a majority of the Board, unless the election, or the nomination for election by Lydall’s stockholders, of each director of Lydall first elected during such period was approved by a vote of at least a majority of the directors of Lydall then still in office who were directors of Lydall at the beginning of such period.
|
(d)
|
“Code” means the Internal Revenue Code of 1986 and any regulations thereunder, each as amended from time to time.
|
(e)
|
“Commission” means the U.S. Securities and Exchange Commission.
|
(f)
|
“Committee” means (i) the Compensation Committee of the Board or (ii) any other committee or subcommittee of the Board to the extent that the Board’s powers or authority under this Agreement have been delegated to such committee or subcommittee by the Board or by the Compensation Committee of the Board.
|
(g)
|
“Common Stock” means shares of common stock, $0.10 par value per share, of Lydall.
|
(h)
|
“Company” means collectively Lydall and each Lydall Affiliate at the relevant applicable time.
|
(i)
|
“Economic Value” means the amount reportable by the Recipient as taxable compensation for federal income tax purposes with respect to the Option.
|
(j)
|
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
|
(k)
|
“Fair Market Value” means the fair market value per share of Common Stock, determined as follows:
|
(1)
|
if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the date of determination; or
|
(2)
|
if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTCBB market data vendor as listed on the OTCBB website (otcbb.com) (or another similar system then in use as determined by the Award Administrator) on the date of determination; or
|
(3)
|
if the Common Stock is not publicly traded, the Award Administrator will determine the Fair Market Value for purposes of this Agreement using any measure of value it determines to be appropriate (including, as it considers
|
(l)
|
“Good Reason” shall have the meaning set forth in the Employment Agreement.
|
(m)
|
“Lydall Affiliate” means (i) any of Lydall’s present or future parent or subsidiary corporations (as defined in Sections 424(e) or (f) of the Code) during the time that such parent or subsidiary corporation satisfies such definition and (ii) any other business venture (including, without limitation, joint venture or limited liability company) in which Lydall has a direct or indirect controlling interest, as determined from time to time by the Award Administrator.
|
(n)
|
“Lydall Affiliates” means collectively each Lydall Affiliate at the relevant applicable time.
|
(o)
|
“Nonqualified Stock Option” is an option to acquire Shares that does not qualify as an “incentive stock option” under Section 422 of the Code.
|
(p)
|
“NYSE” means the New York Stock Exchange.
|
(q)
|
“NYSE Listed Company Manual” means the NYSE Listed Company Manual, as amended from time to time, an any successor rule or regulation.
|
(r)
|
“Reorganization Event” means: (a) any merger or consolidation as a result of which the Common Stock is converted into or exchanged for the right to receive cash, securities or other property or are cancelled, (b) any transfer or disposition of all or substantially all of the outstanding Common Stock for cash, securities or other property pursuant to a share exchange or other transaction, (c) any dissolution or complete liquidation of Lydall, or (d) a Change in Control Event.
|
(s)
|
“Securities Act” means the Securities act of 1933, as amended from time to time.
|
(t)
|
“Share” means a share of Common Stock.
|
(h)
|
A new Section 3.03(c) is hereby added to the Credit Agreement as follows:
|
(i)
|
adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
|
(ii)
|
the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans, provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Administrative Agent, that will continue to provide LIBOR after such specific date (such specific date, the “Scheduled Unavailability Date”); or
|
(iii)
|
syndicated loans currently being executed, or that include language similar to that contained in this Section 3.03, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,
|
(i)
|
A new Section 11.24 is hereby added to the Credit Agreement as follows:
|
Title:
|
Executive Vice President, General Counsel & Chief Administrative Officer
|
Title:
|
Executive Vice President, General Counsel & Chief Administrative Officer
|
Title:
|
Executive Vice President, General Counsel & Chief Administrative Officer
|
GUARANTORS:
|
LYDALL PERFORMANCE MATERIALS, (US) INC.
|
Title:
|
Executive Vice President, General Counsel & Chief Administrative Officer
|
Title:
|
Executive Vice President, General Counsel & Chief Administrative Officer
|
Title:
|
Executive Vice President, General Counsel & Chief Administrative Officer
|
GUARANTORS:
|
LYDALL PERFORMANCE MATERIALS, (US) INC.
|
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.
|
February 26, 2020
|
|
/s/ Sara A. Greenstein
|
|
|
Sara A. Greenstein
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.
|
February 26, 2020
|
|
/s/ Randall B. Gonzales
|
|
|
Randall B. Gonzales
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.
|
February 26, 2020
|
|
/s/ Sara A. Greenstein
|
|
|
Sara A. Greenstein
President and Chief Executive Officer
|
|
|
|
February 26, 2020
|
|
/s/ Randall B. Gonzales
|
|
|
Randall B. Gonzales
Executive Vice President and Chief Financial Officer
|