Lydall, Inc. (NYSE:LDL) Q1 2018 Earnings Conference Call - Final Transcript
May 02, 2018 • 10:00 am ET
Good day, and welcome to the Lydall Announces First Quarter Financial Results Conference Call and webcast.
I'd like to turn the conference over to Brendan Moynihan, Vice President Financial Planning and Analysis and Investor Relations. Please go ahead, sir.
Good morning, thank you, operator. Good morning, everyone and welcome to Lydall's First Quarter 2018 Earnings Conference Call. Joining me on today's call are Dale Barnhart, President and Chief Executive Officer; and Randy Gonzales, Executive Vice President and Chief Financial Officer. Dale will start the call with comments about the continued progress we are making in executing our long-term strategy as well as provide an overview of current business conditions.
Randy will follow with a review of our financial performance and discuss the key drivers by segment. At the end of our remarks, we will open the line for questions. Our quarterly earnings press release and form 10-Q were released yesterday. So that you can follow along with today's call, please reference to the Q1 2018 Earnings Conference Call presentation, which can be found at lydall.com in the Investor Relations section.
As noted on Slide two of this presentation, any comments made on this conference call that may constitute forward-looking statements are made available pursuant to the Safe Harbor provision, as defined in the securities laws. Please also refer to the cautionary note concerning forward-looking statements within Lydall's Form 10-Q for further information. In addition, we will be referring to non-GAAP financial measures during this conference call. A reconciliation to GAAP financials can be found in the appendix of the presentation I just referenced.
With that, I will turn the call over to Dale.
Thank you, Brendan. Good morning, everyone, and thanks for joining us. I am pleased to report strong above market sales growth in all segments with organic sales growth of 4.2%. Compared to last year's strong first quarter, adjusted operating margin was down 240 basis points. As expected, gross margin was negatively impacted by increased commodity cost and reductions in select customer pricing in the Thermal Acoustic Solutions segment.
In addition, the Thermal Acoustic Solutions business also saw the incremental manufacturing costs, which negatively impacted gross margin. These gross margin reductions were partially offset by favorable leverage on SG&A expenses. Adjusted earnings per share for the quarter were $0.67 compared to $0.74 in the first quarter of 2017.
Slide three outline our recently published financial results for the first quarter of 2018. I'll briefly cover the key highlights and Randy will take you through the first quarter results in detail when he provides a summary of our financial performance. First quarter 2018 net sales increased 15.8% from the same period in 2017 to $191.7 million. Organic growth of 4.2% was led by Technical Nonwoven segment, organic growth of 7.8% resulting from continued strength in Industrial Filtration markets coupled with robust demand in Advanced Materials applications.
Our Thermal Acoustics Solutions business grew organically at 3.6% on strong market demand and expansion to new platforms. In particular, Thermal/Acoustic, while