 MANCHESTER, CT, July 28, 2020 GLOBE NEWSWIRE -- LYDALL, INC. NYSE: LDL today announced financial results for the second quarter ended June 30, 2020 and provided an update of COVID-19 impacts. FINANCIAL HIGHLIGHTS - Q2 2020 vs. Q2 2019 GAAP Financials Second quarter ending cash balance of 92.5 million, compared to 43.4 million Year to date cash flow from operations of 40.4 million, compared to 36.2 million Net sales of 146.2 million, down 33.8 Gross margin of 19.4, down 110 basis points Operating loss of 1.7 million, compared to operating income of 13.2 million Loss per share of 0.34, compared to loss per share of 0.40 Prior year includes employee benefit plan settlement expenses of 0.86 per shareNon-GAAP Financial Measures Organic sales decline of 31.7 Adjusted gross margin of 19.5, down 100 basis points Adjusted operating margin of 0.2, down 640 basis points Adjusted loss per share of 0.27, compared to adjusted earnings per share of 0.41 Adjusted EBITDA of 11.4 million, compared to 25.3 million Adjusted EBITDA margin of 7.8, down 370 basis pointsReconciliations of the Non-GAAP financial measures to Lydalls GAAP financial results are included at the end of this release. See also Use of Non-GAAP Financial Measures below.I am incredibly proud of Lydalls global employees who delivered extraordinary results while the world was in the midst of the COVID-19 pandemic. In times like these, cash matters most and the team rose to the occasion by generating almost 14 million of cash from operations in the second quarter, Sara A. Greenstein, President and Chief Executive Officer, said. Additionally, we quickly pivoted our resources to the production of personal protective equipment for our first responders, medical professionals, military personnel and the general public, which contributed to our adjusted consolidated EBITDA margin of nearly 8 in the quarter. We also announced new strategic investments to accelerate domestic meltblown filtration media capacity supported by a 13.5 million commitment from the U.S. Government.The demand for the filtration media produced in our Performance Materials segment has significantly increased. Lydall saw a 20 increase in Filtration sales in the second quarter compared to prior year, a trend we expect to continue. In our Technical Nonwovens segment, we completed a large order for nonwoven material used in medical gowns to support first responders for the New York Department of Health, said Ms. Greenstein. When our automotive customers shuttered their factories late in the first quarter, the Thermal Acoustical Solutions business saw a historic decline in second quarter volumes in North America and Europe. The team responded quickly and decisively to flex our cost structure, and by the end of the second quarter our factories were back to nearly full pre-COVID production to support our automotive customers production re-starts.Ms. Greenstein added, Most importantly, we continue to operate safely as the pandemic continues, adapting to a new normal that includes more frequent cleaning, social distancing and new work processes. Our employees have shown exceptional commitment and resilience during these challenging times, and I thank them for all their contributions.Q2 2020 Consolidated ResultsNet sales of 146.2 million decreased by 74.7 million, or 33.8, compared to 220.8 million in the second quarter of 2019, primarily due to the effects of COVID-19 related automotive OEM shutdowns and weaker industrial demand. Gross margin in the second quarter declined 110 basis points year-over-year to 19.4. Randall B. Gonzales, Executive Vice President and Chief Financial Officer, stated, despite the effects of the pandemic, the Performance Materials PM and Technical Nonwovens TNW segments improved gross margin on lower sales volumes. This helped offset lower gross margin in the Thermal Acoustical Solutions TAS segment which was heavily impacted by widespread customer shutdowns. While TAS sales declined 60 or 55.8 million compared to prior year, volumes within the quarter grew sequentially each month in line with auto production.Operating loss was 1.7 million, compared to operating income of 13.2 million in the second quarter of 2019, driven by the negative impact of the COVID-19 pandemic in the TAS segment and, to a lesser extent, the TNW segment. This was partially offset by the PM segment which benefited from the increased demand for specialty filtration solutions. On an adjusted basis, operating loss was 0.3 million compared to 13.7 million in the second quarter of 2019.Adjusted EBITDA margin in PM was 19.5, up 470 basis points on favorable mix and productivity actions while TNW EBITDA margin was 18.8, up 260 basis points driven by a 1.3 million insurance recovery in this quarter from flood related losses in the first quarter of 2020. Compressed margins in TAS due to COVID-19 resulted in consolidated adjusted EBITDA margin of 7.8, down 370 basis points compared to the second quarter of 2019. Mr. Gonzales commented, Performance in the second quarter demonstrates the earnings potential of the business. We were able to quickly flex our cost structure, reducing overhead by almost 15 million from prior year in reaction to lower demand, while leveraging resources to address surging demand for filtration. These actions mitigated the profit loss on lower sales and will position the business to drive incremental returns as volumes recover.LiquidityNet cash provided by operations through the second quarter of 2020 was 40.4 million driven by continued working capital management initiatives, accounts receivable factoring, and payroll tax deferral under the CARES Act. Mr. Gonzales concluded, Although we experienced unprecedented headwinds from the pandemic, through disciplined management of working capital we not only maintained but also increased our cash balance through the quarter, while reducing our net factoring. The Companys cash balance was 92.5 million at June 30, 2020, compared to 87.8 million at March 31, 2020. Debt balance at June 30 was 286 million, and the Companys net leverage ratio was 3.5, well below the maximum of 6.5 allowed by our amended credit agreement.OutlookAs we move into the second half of the year, our focus remains on the well-being of our employees, meeting the needs of our customers, and driving more value for our shareholders, Ms. Greenstein commented. While we expect our Performance Materials Sealing business will face headwinds in the second half, continued strong demand for Filtration products should offset this, with meltblown media sales for N95 and surgical masks contributing incremental sales of 10 to 12 million. As a respected leader in filtration, we continue to pursue opportunities with government leaders across the world who recognize that a strong localized supply chain of PPE is a national priority. Lydall is well positioned, globally, to leverage our technical expertise and decades of experience to provide solutions in the fight against COVID-19 and develop innovative new solutions for clean air applications.We anticipate the North American and European automotive markets will recover in similar fashion to what we experienced in China. While the timing and magnitude of the recovery by region remains uncertain, we believe auto production will begin to stabilize in the third quarter, albeit with volumes in the second half of 2020 lower than the same period in 2019. Ms. Greenstein continued, In Technical Nonwovens, we are seeing seasonally strong construction activity driving robust demand for geosynthetics and continued demand for medical related nonwoven products, offset by softer sales in Industrial Filtration applications as the industrial outlook remains uncertain.In summary, Lydall and its management team have demonstrated their ability to successfully navigate unprecedented challenges, and I have full confidence the team will continue to quickly adapt to market changes, Ms. Greenstein shared. Going forward, we will sharpen our strategic focus where our global footprint, deep product expertise, customer and supplier relationships, and innovation are clear competitive advantages in attractive markets. Specialty filtration is a cornerstone of our strategy, as shown by the investments were making this year. I remain confident in our ability to deliver long-term shareholder value through our focus on value added engineered materials and specialty filtration solutions that promote a cleaner, quieter, safer world.Conference CallLydall will host a conference call on July 29, 2020 at 10:00 a.m. Eastern Time to discuss results its second quarter ended June 30, 2020 as well as general matters related to its businesses and markets. The call may be accessed at 888 338-7142, from within the U.S., or 412 902-4181, internationally. In addition, the audio of the call will be webcast live and will be available for replay on the Companys website at in the Investor Relations Section. A recording of the call will be available from 12:00 p.m. Eastern Time on July 29, 2020 through 11:59 p.m. Eastern Time on August 5, 2020 at 877 344-7529, from within the U.S., or 412 317-0088, internationally, access code 10146673. Additional information, including a presentation outlining key financial data supporting the conference call, can be found on the Companys website under the Investors Relations section. 