Boston, MA 05/08/2014 (wallstreetpr) – The short story is that Lydall, Inc. (NYSE:LDL) reported 1Q2014 results that fell short of 1Q2013 performance. The long story is that given the developments in the quarter, the company was expected to post better performance than a year earlier. However, that was not to happen, and that failure can be seen raising red flags.
The company performed an acquisition in the quarter of which it reports as having an impact in its latest reporting. However, the paradox is that the acquired business contributed significant revenue to the company in the quarter that would have supported bottom-line growth.
As such Lydall, Inc. (NYSE:LDL) is seen as having issues in its costs and expenses management that could be eroding gains.
The insulation and filtration products manufacturer is known to be pursuing opportunities by all means possible. However, investors are still looking for value in their investment and that means the company must undertake aggressive internal improvements to gain investor confidence for the balance of 2014 even as it spends on market expansion.
A sour quarter
1Q2014 enters the annals of Lydall, Inc. (NYSE:LDL) as one that saw revenue up 26 percent yet profit declined 17 percent, with blame being heaped on the acquisition made in the quarter.
The company realized revenue of $125.6 million, supported by both organic growth and contribution from the acquisition. In the prior year revenue was $99 million. But even as revenue took a flight in the three-month duration ending March 31, the company had little to show for the net income. The company realized net income of $3.7 million or 22 cents per share in 1Q2014. That was a significant decline from a net income of $4.5 million or 26 cents per share.
Acquisition cost and gain
The company incurred about $2.4 million related to the transaction to acquire Andrew Filtration. The acquisition itself cost $83 million in a deal with a U.K. company. The Andrew contributed $17.7 million to 1Q2014 revenue basket.
All in all, Lydall, Inc. (NYSE:LDL) showed encouraging progress in 1Q and 2014 seems to be a promising year for the company, excepts that aggressive cost and expenses curb is needed to support profit growth.
