Lydall, Inc. (NYSE:LDL) Q1 2020 Earnings Conference Call - Final Transcript
May 12, 2020 • 10:00 am ET
every industry throughout the world, and Lydall is no exception. When it first became apparent that COVID-19 would have a significant impact on the global economy, we acted quickly and decisively to safeguard the health and well-being of our global workforce and the sustainability of our business.
By taking a number of precautionary measures, we ensured that all employees who needed to come to work could do so, and they did, in a safe work environment, with new policies and procedures to keep them protected. At the same time, we aggressively created new opportunities in response to the current environment, opportunities that have enabled us to accelerate the strategic transformation that is necessary for Lydall to compete, innovate and thrive over the long term. Turning to Slide 3.
As a technical market leader of value-added engineered materials and specialty filtration solutions, Lydall is in an extraordinary position during this unprecedented time. We are one of only a handful of companies in North America and Europe capable of producing the critical filtration layer of N95 respirator masks that helps safeguard our healthcare workers and first responders from COVID-19. In addition, we manufacture the filtration materials for other medical, surgical and general-use masks, the HEPA- and ULPA-grade filtration media used by machine-powered respirators, ventilators and hospital HVAC systems, and the needlepunch felt in medical bathing wipes, absorbent pads and medical gowns.
As trusted experts in specialty filtration with proven technical and production capabilities, we have been in regular contact with the highest levels of the US government as well as leaders in Canada, Europe and the United Kingdom to offer our solutions, expertise and support in the fight against COVID-19. As governments around the world recognized that availability and certainty of supply for these products are essential to their national interests, they are mandating that these products be manufactured and sourced locally.
Our global footprint is a strategic advantage in this regard, with facilities across the United States, Canada, Europe and China. Our team has worked tirelessly to meet the large unmet need and global shortage of these products by forging new contracts, reallocating our resources and repurposing our production facilities. We secured a major long-term agreement with Honeywell to supply melt blown filtration media for their N95 mask production facilities. As a result, we have committed additional capital to acquire a new melt blown production line to satisfy this and related demand. In our technical nonwovens segment, we developed a new application for nonwoven materials used in medical gowns, and in so doing, secured an order from New York City's COVID-19 emergency services.
The strong demand for specialty filtration and PPE products in our performance materials and technical nonwovens segment is especially important as other end markets we serve prove to be more susceptible to COVID-19's impact on the global economy. The automotive industry shutdown triggered by COVID-19 has had a significant effect on our thermal acoustical solutions business. Moving to Slide 4. As many of our automotive OEM customers shut