LDL - Earnings call transcript Q3 2017

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Operator

Good day and welcome to the Lydall Third Quarter Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brandon Monahan, Vice President of Investor Relations. Please go ahead.

Brendan Moynihan

Thank you, operator. welcome Third and Conference XXXX everyone, Call. morning, to Quarter Lydall's Earnings Good

today's Barnhart, continued and are Executive me and with Solutions. Scott call Joining of on long-term the an by the start overview questions. Dale are and business Thermal Scott the call making Executive performance Dale will conditions. Officer provide our drivers about Officer; as review of Deakin, line President a as will we Vice the well Financial President the Chief strategy comments with President, Acoustical progress segment. executing and Chief and end our remarks, follow key of for discuss financial we'll current At our in open

were Our quarterly released earnings yesterday. press report release XX-Q and

can call, QX today's you then at please presentation, can with along earnings XXXX in be follow section. the lydall.com Relations which found call conference Investor reference the So

presentation, forward-looking also X statements for noted made reports provision the on constitute Lydall's may safe Please in the this on as concerning note information. cautionary XX-Q this to Slide on within that harbor defined any further securities As statements pursuant Form comments to laws. call made refer of available forward-looking are conference

With this referenced. referring that, non-GAAP be presentation the I'll in we'll financials the addition, In can found just A financial turn conference over measures to reconciliation during call. be GAAP the Dale. to to appendix I call of

Dale Barnhart

points amortization XX.X% operating pricing, to to strong in led engineering with improved in volume materials points Compared of from mix, and basis all excess basis segment, labor though, X and higher is by On overhead XXX Technical demand. unfavorable in good last mix us. applications. quarter was acquisitions. reduced costs. particularly a thanks We Lydall than drove and to expected cash expected year, joining growth gross the Metals expenses. segments. with We third and generation. higher and and everyone, On activities announced with margin currency margin drove its third growth XX.X% segments higher of declined to impacted report by - costs outlines margins intangibles, commodity strong margin double driven the Thermal/Acoustic XX I'm the and and sales an basis consolidation Included foreign flow filtration declined morning, very primarily adjusted a thermal Good acoustical same of the very respect Gutsche are higher translation XXX which labor sales end with for total quarter of net Nonwovens overhead Brandon. and and were third X.X% XXXX. This you, pricing quarter Slide costs, and driven X.X% executing basis, progress healthy gross Nonwovens Total acquisition, moving year increased industrial another of over solutions. XXXX, recovery make period million. certain profitability, X.X%. the XX.X $XXX grew last pleased adjusted incremental were in balance, into commodity financial of amortization the as Thank a points for published quarter operating by primarily negatively to which in in and to we applicable face or contributed a With X.X%. did, adjusted results Compared growth. continued or largely markets With increase margins forward increased automotive our Technical tooling in was organic the sales quarter for integration by Texel to growth our delivered our favorable recently Gutsche digit the previously Organic

future over organic This of a was record addition, $XX,XXX expense XX% impacting XX.X% Performance XX points. margin the on operating share, EPS Nonwovens from increased investment basis consulting related to decrease growth by year. generating Technical per the the Adjusted office prior corporate quarter In Materials third the is expenses and principally businesses. focused of

the to assets while formation Thermal/Acoustical new with providing Fibers new better Solutions and Thermal/Acoustical Thermal/Acoustic under globally. knowledge global and proceeding results broader previously existing Metals of new to and combine generating sweetest are the to will customers segment XXXX. we're Financial the in serve starting Finally, will structure leverage our synergies solutions a businesses. our that segment reported Lydall expected the announced The enable be

savings million Third cost activities $X.X results these we of million run the excess related include XXXX consolidation and $X consolidation. expenses to quarter in of from rate and expect

which this M&A. our Sigma, and overview X, Slide product new drivers, to is includes of development, an geographic expansion, strategy, Turning four Six long-term growth Lean

continue new respect within a respect Nonwovens. of we within the new performance is development was with in in line segment solutions to a on pursue opportunities, And product to integration higher with for a With Gutsche development, off-road integration to given saw stable the segment M&A, Metals efforts prospects First activity and motorized and the new our Materials shielding activities ongoing to Performance on actively focus Gutsche's to Texel terms the sales Technical Thermal/Acoustic continues Texel the be of sports the backlog. highlight market. seasonally thermal recent in strong both on track. our third build demand continue quarter. business expectations with

in of upon a sectors. addressing process unserved heat thermal demanding but complimentary the automotive these shielding launching product current solutions our in loads experience to traditionally This manage applications. heat are builds We

Leaders Performance launched and is Earlier area the Lean the continuing and these functions higher enhanced costs. on I lean across goods how forward program process, transportation converting roll Lean customer projects across into requested area utilizing joint Investments customer As One Leaders. spread large lean productivity, Materials organization. will all waste, this in Sigma, reduced also focus transforms of to focused expanding thinking disciplines optimizing in accelerated The it which and are packaging to called Lean this look we specific configurations. Materials initial our quality and lean an relates focus Six flexibility. team has completed team year, We on and Performance to yielded practices business.

component we internationally. geographic executed well strategy have expansion, our to one-third Moving of of now with on this on generated sales our

We and are we Technical the and communications, China. our and initiatives better announced restructuring optimize is our efficient expense business Europe XXXX footprint our initiatives focused will The now be in largely limited quarter. the with These remainder the by XXXX. these of half to our seen strengthen and be in position Gutsche in million be Nonwovens $X on positioning expense anticipated Consistent markets. total with rate will synergy million and currently fourth in restructuring the estimate with further capabilities previously of to prior more million approximately and in of Texel Approximately in first XXXX $X.X $X run benefits to spend XXXX. scale predominantly the

to underlying Turning generally the fundamentals business Slide stable. we with believe our X, respect business conditions, of remain to overall

continue we see second side, is levels for supply for from certain aluminum. the up increased particularly XXXX On over sequentially of to quarter price XX% and from raw materials, pricing of the elevated XXXX. quarter aluminum Market third

these raw continue the pass-through said, with We headwinds with we price the of material That of customers. remainder XXXX. through arrangements increases to impact our mitigate expect to face

six-month in arrangements of place has which with business passed is one half approximately in raw for lag. three aluminum through business Our recovery Thermal/Acoustic a the to Metals primary material typically

for vehicle slight demand in uptick sources demand related has hurricane seen current this North that industry by the and our that to side, remain generally a anticipate short-term activity, indicate the forecast while the overall replacement through our driven is boost On America EDI automotive a stable. and recent we visibility long-term applications

product our favorability slightly to of platforms outpace basis we the did Given the last and in this market a portfolio, as quarter. on the the applications we volume expect

to stability and end across all markets engineering Performance continue our to show subsectors. region business, Looking filtration Materials materials and

Technical products. China, our materials we demand Nonwovens to are our experiencing our power the in XXXX expectations. experience continues line market for and stable recover in In from Finally, generation lowest filtration North with segment and the advance in both America

markets will to third backlog. a Given call Scott. acquisitions, the quarter exited turn that, the over the combined we in the the now I with with record With strengths

Scott Deakin

Thank you, Dale.

XXXX. growth year, growth for our the sales Organic from and principally geosynthetic strong were by When America factoring customers achieved sales power China last and advanced Metals driven briefly of growth exceptionally X.X% XX.X% have million Performance sales an $XXX segment of for Gutsche science quarter organic up acquisition million, of and primarily growth China been of growth was I'll delivered quarter segment X.X% $X.X in the Europe of third over quarter X, of then generation Materials up increase growth X.X%. results an in domestically. organic and Slide to segment improved over operating our increase organic consolidated of net last In and North Turning The X.X%. had of was automotive XX.X%. the the which life third Nonwovens - strong moderate of quarter by of the driven modestly organic and at applications. in buys, and Thermal/Acoustical company cover increased terminations This materials strong in and would Technical non-recurring in the segment led results. overview quarter demand the Nonwovens provide the XXXX, Technical by

down margin the by in segment price. resulting basis points XXX growth Organic fiber third in our content to metals product up down primarily quarter in changes sales tooling addition, the X.X% design in were lower Fibers was In X.X%. driven million segment or Gross Thermal/Acoustical was XX.X%. reduced $X.X correspondingly

inventory acquisition versus Excluding was of XXX charges, adjusted margin basis down restructuring prior points and year. step-up related gross XX.X%

approximately of market, impacted Lydall's sales labor and generation The products acquisition quarter for Consolidated year Technical gross the high prior the points noted, in quarter the our driven were by North lower inefficiencies expenses. recent in prototypes Included XX commodity sales the operations, from pricing, of acquisitions from by consolidated year. third and Thermal/Acoustical Nonwovens Metals business. business of costs, that overhead amortization results within As driven the American margin of equipment principally power the in in and the improvement factors operational we which absence now margin was incremental buy margins impact sustainable reduced are sales metals mix, by basis X.X%, confident basis in segment the higher improving. demonstrated gross and Performance are the down Unfavorable European mix of margin the basis operating termination effectiveness intangible Materials, continued quarter. related last Technical has in XX three increased margin has for inefficiencies, including our points The from negatively was principally richer are Nonwovens. seen margin absence points XXX these

Excluding in related XX.X% support XX third organic of of initiatives, XXXX. and growth year. The the to points. The to adjusted of quarter decrease third restructuring margin was favorable Higher by margins over quarter million expenses, of spend $X.X impacted points X.X%, initiatives audit. XXX compared the expenses strategic effective in a rate prior inventory basis was company's related rate tax approximately consulting tax step-up, operating market basis in positively was XX.X% XXXX from effective resolution tax of by impacted a the these

high that the XXXX, For continue will rate we XX's. effective in anticipate our to be full-year

approximately diluted earnings Third versus items, the currency and quarter the with down step-up, of change compared $X.XX year. in drove restructuring XXXX After the to were for year. inventory expenses, per per in earnings prior consolidation expenses, of of $X.XX initiative $X.XX $X.XX XXXX. expenses, adjusted quarter prior earnings Revaluation compared share third discrete share were tax XX% strategic associated delivered to adjusting segment automotive $X.XX foreign of

the expenditures, Lydall from first up year. capital spent in $XX.X period to relates nine the last through same months million year, slightly of million it $XX the As

of nine with by automotive performance accounts customer relatively inventory million, this $XX.X For favorable in and we receivable higher to first Cash period support in as product and of payable, were million of million growth, rate the to reduction XXXX from is approximately on productivity, total to higher restructuring. $XX.X launches. the the million tooling expect attractive invest continue we capital months in $XX Despite be same primarily to the compared driven year new full a operations $XX XXXX. XXXX, support at flows expenditures

the us in very far for $XX pay debt thus approximately for times of further strong. $XX.X reflecting was third acquisition debt was positioning after of net total well remains ratio X.X end liquidity Total At down leverage a $XX.X million million growth. of pay for the - Finally, future $XX outstanding million on our quarter, of excuse cash me, our $XX million a down XXXX.

made we've $XXX.X first progress the note I'll million of X, Slide to up the Turning nine sales Through by are organically X.X%. year-to-date. months,

X.X%. up Fibers margin businesses Thermal/Acoustical with Our Thermal/Acoustical declined and filtration up X% up and respect businesses Metals solid growth automotive, showed engineered materials adjusted respectively. are operating With XX.X% and operating X.X% XXXX. XXX profitability, In both same period year. for incremental an the XX.X% in same adjusted basis from of intangible XX acquired results to of margin is period amortization Included points these companies last the points basis the versus versus to

this, million or addition the the of consolidated levels operating to unfavorable $X.X business. XX costs points from driven primarily mix, Thermal/Acoustical In of Metals and raw inefficiencies material increased decline the by commodity basis

year, Moving to start the stronger X.X% providing XXX million lower our Adjusted the $XX.X points our margin cover up during sales by with This tooling to last sales mix the sales added Thermal/Acoustical high business. tooling while were points basis higher $X.X parts sales year. to organic future saw sales segment margin specializes declined X.X%. and million underwood The business Slide to segment, unfavorable vehicles. half I'll launches. quarter-on-quarter Net business driven automotive is results. of of product growth. third in quarter. and solutions primarily prior for supporting thermal the absence This prototype exchange, operating sales of a euro, two growth foreign in up $X.X in engineered seen global margin to X, Favorable underbody million I'll our which Metals delivered were compared

Continued also performance commodity quarter. impacted headwinds the in

increases decreased of flooring XXXX and downs rates Volume select molded of pick-up offset margin solution growth North business. in declines remain Europe costs. margin, in polyester to solutions and in last stabilize higher inefficiencies industry operating remain business. marked the the We $XX.X vehicles ability the also million, primarily in This to labor in North underbody there. lower basis. in quarter and platforms. operating redesign. were our a operations our basis persistent acoustical serves automotive for strong material the to to price and molded Slide on in truck lesser addition, this by encouraged driven X third impacted that was Sales certain provides for couple Fibers overhead further due extent our points XXX improvement excuse and while our a In Sales sales, America. higher months primarily the X.X% of saw over market Adjusted platform me, by location to offsetting applications American higher principally by third to quarter product quarter organic refers above on of Thermal/Acoustical were business due an continued down other XX.X% outsourcing pricing transitions launched third the

by in X.X% air XX% cryogenic temperature Materials to sales applications. product by XXXX. demand of XX, led globally. X.X% filtration strong in over segment. variety up This and Sales up on were I'll provides by Slide $XX.X Filtration Moving to organic Life of we business terminations that both insulation specialty third sales and Performance our insulation low on buys were cover third a Sciences solutions fluid in quarter markets Specialty grew products. million of declined impacted an insulation for sales saw basis. quarter XX.X% gains the end the

Performance of would approximately impact the X.X%. growth been termination sales, for have in the quarter organic Materials the Excluding

impacted X.X%. Foreign sales by favorably currency translation

XX.X% basis in in air points and products Technical applications product industrial, Third various quarter prior operating XXX development. liquid automotive, produces segment. business medical year. the mentioned others. as margin non-occurrence buys other This by well trial continued for margin new margin media the such principally with Slide declined same The with sciences among our versus in XX engineered Nonwovens associated driven of and period as the as covers in adjusted of activity was geosynthetics, commercial filtration by previously coupled XXXX decline high life termination the use

due up recovery million of million million, $XX sales the an demand of strong XXXX, On particularly and acquisition. within power the products up $XX.X the were automotive coupled materials sales the Gutsche replacement on was advanced of basis, for generation market which organic XX.X% third our quarter were to geosynthetics. $XX.X For with US of

for perspective, period translations compared favorably a to adjusted the profitability in to operating the currency decreased margin From quarter Foreign points by XX% third XXX XXXX. sales X.X%. by basis same impacted

the $X.X year. our million million amortization which XX related intangibles but ongoing As versus or acquisition results related basis points activities, do of period restructuring in to adjusted a cost same incremental last quarter, reminder, $X.X expenses exclude the include

In mix power increased in the was related operating to products and due unfavorable lower sales addition this, decrease generation of inclusion to margin product adjusted acquisitions. of higher percentage the margin, given from a of the SG&A

flawlessly line we As industry businesses remaining continued consolidating operational strength continues facility. Dale remain strategic noted the the be allowed from by on continue the near-term now driven third to and will Top market be earlier acquisitions, in in markets the us in markets issues us to improvements cash positioned of Strong results. the to demand I with the our be in on exceeds respect quarter credit sales end enjoy. and and our both solid and position debt now gained Addressing That our the both in by in confident Nonwovens segments review $XX we priorities. metals flow the XXXX. our begin our down the that to most pay question-and-answer to in XX% back on leverage improvement track year-over-year and integration serve. automotive performance leading healthy we end planned immigration restructuring With operational to of Technical related call million that, this to session. growth our to executing deliver Leveraging significant generally concludes operator turn our generation profits

Operator

Thank you.

Our [Operator comes ahead. Matt question the We Please go question-and-answer from Koranda Instructions] Capital. Roth of begin first will now session.

Brad Noss

Hi, Noss is Brad Koranda guys. here. Matt This for on

Dale Barnhart

morning, Good Brad.

Brad Noss

areas XXXX just up I you to the segments. savings off those combining for that million, X you cost us start sort the give million said and synergies? help of rough looking But well to achieving as a believe different wanted bracket savings. at Good cost synergies you Thermal/Acoustical see morning. by just potential can expect that I of in out us just X as in making cadence sort the

Dale Barnhart

Yeah, ramp little the emerge in will million and the really that you'll bit $X you'll starting after say that to XXXX bit see fourth in of XXXX. principally XX% then a Brad. first to a little it's quarter see SG&A and of you start savings incrementally into Also I'd see quarter up more ballpark

Brad Noss

us combination top the the essentially having from potential there, helpful. the of touching Thanks. that unit? single segment the then of expect that from synergies terms see of And to incremental can you - That's help you what you growth about think or Okay. expect see working on just also just in a and in magnitude combined growth as incremental line to sort them

Dale Barnhart

well. not engineering this response house's we days as have we have Clearly consolidation well where do driving top us really from well want We're of to and We opportunities in full, the their on some have talk line, they bringing on early other that. both had out on sales It's still as but believe stronger Yes. reached as products where They customers. onto operational side our about to of to relationship we house. the see cost to as sales and a have us the cases groups internally, it's out. from the a but customers promised time, gotten as quantifying flushed of sort both at of - that be from this further efficiency positive one side

is, few very It But As I cycles that years to tell some able to on the has what initial the a be of to takes are can demonstrate you been platforms. in favorable. start duration. response know, newer you longer capability the automotive

Brad Noss

main that would to level? a it's out are operating here, sort been further want see Okay. targets targets are of see approaching margin, of think like that they're with see margin thoughts reach to you that what Got I you just to what they to operating it. XX% what XXXX XXXX or the sort drivers then and prior you XX% long-term timing and whether sort the reaching sort is your referring XXXX of I previously And when had as of your

Scott Deakin

for as probably XXXX, the achieve we far the that. stretch XX% put ourselves operating of for margin, end goal the As we won't

reach year improvement We through XXXX. in You'll our strategic when into see the that. over now. now. We're would the process this another we We're target haven't We're going as go in process XXXX expect XXXX, we planning which process. we that? really will What be would drives then critical. product in Our stretch put at we for pursue. new we launches XX% And early our By to are out operating. set goals

As drive at that $XXX,XXX third invested we a I consulting line, at we specifically adjacencies mentioned just in top organic margin markets is we're enhancement. the of growth. the in fees And where call, key quarter, of on in segment can looking not one about the looking but market attributes

Technical both significant on Performance some will identified line, drive of that So, we're not the businesses. be only successful, those have Nonwovens if that adjacencies impact both in key they particularly we top a and but pursuing in in Materials, margins gross

that lean call, you and process Performance but done really their a took of excited improvement heard concept In operating they've to were administrative into expand with to was as performance sort to on - a side. efforts reenergize addition, Lean it our reboot beyond what our their just very the get Materials and Leader it we our is continuous

operationally all our our and really or improvement then lean fixed from from So, us get help more leveraging to margin. costs operating the of XX% our businesses line expect we exceed will growth, top

Brad Noss

it's quarters resolved hundred even, see before we of of over Metals, here improving couple for we you versus see but looks thousand like thanks how improvement Europe sort the sort right, that you for steady QX what And in you're sort just that. color. of should improved All few the or QX in should completely TA at inefficiencies there? one that looking the of or me a next mentioned expect more and I It think

Scott Deakin

at mentioned, on there from year this we our as key on seen been exited quarter-to-quarter were are when that the looking and the several we've we've beginning operational is inefficiencies improvement within or of two going dynamics and performance. that you we Well, focused is, operations the in since operational dynamics One Europe.

challenges in Europe that driver One of horizon the have the is mix. other for significant is though, we it

impact applications. significantly Our to new big in to we've but XXXX the single a this have won product, geographic product. and richer we're of applications continued wall until by Europe migrating wall compounded mid-XXXX that region, really is a applications, higher value year were our those gross European still margin into going doesn't to out is of lower platforms. significant and We've dual on dual going And mix them wall business several won than OEMs originally business which a what's have that planned where is wall problem those the year but go into production, run this dual

have in going operations have operational to we're higher addressing. A a just that into and the year we combination inefficiencies make We're margin three we're outsourcing the more sure things with of lower the we with than volume those up the product, higher So, of demand. of have mix planned Europe we that struggled overtime the working stay product. issue some created of where

Dale Barnhart

significant improvement versus last QX that much can and we to QX is were about the saw where so from far QX, a relative and would expect $X.X you across that was in standpoint. with I that. We over operational of more think to three just going that QX, Remember look, quarter consistent QX be million in that Brad, you facilities fraction we had to over start to that inefficiencies hope even by as an inefficiencies our of year. we add better, worst

Brad Noss

Okay.

of would sort that benefit to you there. we So, inefficiencies those expect And the QX out top strip to it on improvement then you still adjusting see would the out? if of would relative last inefficiencies still sequential year, - expect

Dale Barnhart

so, yes. think I

Brad Noss

the Thanks for all color, Okay. That's guys. me. Perfect. for

Dale Barnhart

Thank you, Brad.

Operator

[Operator ahead. comes question next Marshall Company. Please & Edward from Instructions] Our Sidoti of go

Edward Marshall

Scott, morning, you? Brendan, how Good are Dale,

Dale Barnhart

Just fine, Ed. morning, good

Scott Deakin

morning. Good

Edward Marshall

Okay.

this are guess these saw might into am than actions speaking may $X So, we the in I side the What's see. overall you businesses businesses. two from we million in think consolidation deep of Can of that of the the as actions of initial overall cost further line. a just sense the be to cost cost they dive do this what Is tell move of probably I to you the opportunity with get I announcement? And, see is just and consolidation wanted cost you top today, the we business the side me the I that initial forward? kind wanted more to, the

Scott Deakin

think in towards phases, first Yeah, place, we've within sort process about level how put has within that. getting organization, to in really so this we moving piece that. again quickly quickly responded about new actions improvements starting with it of everybody the drive are was I'm it, to the how managerial pleased done operating our roles,

right trying up, starting each we we'll best practice, then got me to took, you going on and the very all ramp places the approach this Obviously right to and So, a initial the side, trying, effectively, about to we was metals charges operationally, those that we not are side operate it's saw very taking the restructuring there best strong business. on Fiber's side. but really that cost run excuse from was we that. into some but, to Metal that I people how business that teams into strong, little the and going to respective we'll That's The Fibers that that is the of inject in together. what take those bring to expect business start more of way, the action time the of some teams the practices right execute inject to from the growth for realize in and the $X million rate that take think to savings

Edward Marshall

start we operational, and to next were fair? just so, into efficiency business, speak it, Got the phase that and be seems initial the cost operational to is so restructuring

Scott Deakin

but and will that That's us from be stand form. you fair just from better an execution it operational execution related, restructuring won't see driving

Edward Marshall

and Got just for it, speaking into footprint are I etcetera? guess, initially capital a the there for infusion niche businesses any

Scott Deakin

some are that we both footprint and looking after. point third of spend we prime priority. lot the think ourselves these it's just Metals the are that's business, we've business this quarter businesses capital putting we clear focus we not going as on ball the etcetera XX% been new pursue a at and things, the and time, to etcetera, The capital a new relative was to of some that. we of in park but strategically to Fibers always our and customer's position been may spending consider our in focused of business at now of needs our this on relative for executing try pieces point, are of robotics but, we've presses, I majestically Not But, kind the the right on

Edward Marshall

Okay, second, gears of the the of changes. some talked model house a And sounds discussion almost importantly the like I around Light price content so for Fibers on lower guess more there's remark it you with about Fibers materials. and prepared in switching - within

is we're is the said is content that you're substitute burning just type fibers? it or Help what it to secondly it what or out or less back models? First, - product with you share you with are a leased older to and me fiber is seeing

Scott Deakin

for I is sellers we for see, de-contenting just that cost the was last particular the something customers, but reduction LPA typical that's material in some a cost as that application particular material had The led that's this a then reductions price piece always specific pervasive was say we to particular that at reduction, we higher program as third One, that things. do this on de-contenting rate that business, quarter, efforts purposes the instance prize. wouldn't always with our two quarter that our categorized but did a application. we across

Edward Marshall

may in impact Okay, that basis? on and quarter, an be was the annual what

Scott Deakin

For subsequent quarters $X.XX and see park that we'll quarter, ball forward million the QX in of XXXX. for the the a going into

Edward Marshall

that's programme quarter. XXX so, Okay, through the XXX, right in the

Scott Deakin

No.

Edward Marshall

Okay, was a that with competitor? was that different product, substituted substitute a or with

Scott Deakin

product different approach different No, application. us, the from say let's to

Edward Marshall t

application or is Got a an it, application that just older curious. new

Scott Deakin

An older yeah. application,

Edward Marshall

how tooling materials out metals? materials, I quantify that effectively mix. you metals, that's much assuming that of million and guess the called the quarter, raw you pricing, raw of on is Okay, I'm quarter. driving yeah Can was pricing Mix X.X sales impacted in and buckets, three

Scott Deakin

but twofold, prototype the in Just of QX was tooling, 'XX, didn't was time that very them we have we a had in QX to it of also one the clarify 'XX. profitable higher was mix part

price XXX and from would side. a a prior the a ballpark, that I metal talk of was that material would be we'll the $XXX, standpoint on just the So, in removal year, say versus factor impact

Edward Marshall

it about I that the then to like And, lobbying, first accurate? have, it, a of I last too that much the be transition, from having price and, sounds high is single to alleviate? almost that talked quarter might almost when is top line but, conversion slower in dual we see metals lobbying continuing issues you're kind problems somewhat know Got know that you

Scott Deakin

geographic, is Europe. more that's lower margin Well, product in do were we or higher sales have

So, fortune footprint still Europe, in our product in our one. Europe predominantly single is

and know, want that You our applications is value strategy the to XXXX. higher going production to in move good we start into

North than versus now, lower XX%. would say, So, that's right were we I adoption higher is America significantly which really have

much total Metals over Our on today that. in so it's wall than XX% mix the in dual higher today is North America and business sales parts,

the XXXX. obviously has adoption we not Europe, of single manufacturing ensure driven time we of of has in and which actually you're there along on really the product Europe that some has was demand, put excess in as we've we cost the America production inefficiencies lines going gone out much at it, top right. the our out going production, product with going to the too production higher keep in some stress which but over line, the in operations is had, of outsourcing it's So, well, we've thought starts And North had Europe the to right, low and it of focused on that well

Edward Marshall

talk I Presumably America curious what of is relative side. it, Europe know like if North getting to the you've about then to the But, to is will look or this might investors not. what be But, older it's ratios maybe Got margins fixed, curious what you've think you is I'm look can versus Metals and may if be Europe; Europe percentage I'm the may have be a for got on useful kind cost into granular, North North is margin, what European help when in versus data America I know don't two product can you the Metals, earning. see America lower I earning I share it, basis, those got and understand and which margin.

Scott Deakin

marks business rough give have, know we a North America just order Europe be You the the were magnitude you I'll than of operating so, is not close, go differences. volume XX% XX%. concern the our XX%, We've margin. till achieving this product and where of seen higher it and with figure, North should they the our America of of Automotive that's as forward very significantly mix below year, is we target

Edward Marshall

guess I provide look know us, is of this, base at quarter mis-modeled what gave we you of and there. Obviously, little analytical in happen. don't us, I But going line to you get going earnings, call, with because to could telegraph quarter. the it. this with I'm you hit question performances what if guidance like doesn't kind as quarter third to last when top quarter their kind the to for about and it onus it you fourth sounds on was information you Got some anticipate and we it granular worse, it's like curious get bit you talk sound like the right. a more It the looks second

probably us then be First you additional help that information's any appropriate. model kind would that, of on and with can

Scott Deakin

line right, the You're top not be still the quarter. in fourth And, think our fourth businesses. form we deteriorate will quarter the third for is fine the any quarter the do

expect have and fourth metal have. be to as to margins, we we have that be pricing operating the lower gross business. the continued Metals going any headwinds are don't again quarter in far than margins going The issues what the we we actual key the As in

Edward Marshall

Got very Thanks it, okay. much.

Scott Deakin

Thank you, Ed.

Operator

and the Barnhart our session. back concludes I'd remarks. conference like over closing to answer for to turn Dale This any question

Dale Barnhart

forward joining shortly. Again we the for speaking look thank again to call today and you

Operator

for today's presentation. Thank now attending is concluded. conference you The

now You disconnect. may

Lydall (LDL) 1 Nov 172017 Q3 Earnings call transcript