Lydall : Investor Presentation

Investor Presentation

February 2020

Performance Materials

Technical Nonwovens

Thermal Acoustical Solutions

THIS DOCUMENT, OR AN EMBODIMENT OF IT IN ANY MEDIA, DISCLOSES INFORMATION THAT IS PROPRIETARY, IS THE PROPERTY OF LYDALL, INC. AND/OR ITS AFFILIATE (COLLECTIVELY, "LYDALL"), IS AN UNPUBLISHED WORK PROTECTED UNDER APPLICABLE COPYRIGHT LAWS AND IS DELIVERED ON THE EXPRESS CONDITION THAT IT IS NOT TO BE USED, DISCLOSED, OR REPRODUCED, IN WHOLE OR IN PART (INCLUDING REPRODUCTION AS A DERIVATIVE WORK), OR USED FOR MANUFACTURE FOR ANYONE OTHER THAN LYDALL WITHOUT ITS WRITTEN CONSENT. NO RIGHT IS GRANTED TO DISCLOSE OR SO USE ANY INFORMATION CONTAINED HEREIN. ALL RIGHTS RESERVED. © LYDALL, INC. 2019

Forward-Looking Statements

This presentation contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are intended to provide management's current expectations for the future operating and financial performance of the Company based on current expectations and assumptions relating to the Company's business, the economy and other future conditions, and generally can be identified through the use of words such as "believes," "anticipates," "may," "should," "will," "plans," "projects," "expects," "estimates," "forecasts," "predicts," "targets," "prospects," "strategy," "signs," and other words of similar meaning. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially and adversely from those expressed in any forward-looking statement. Investors, therefore, are cautioned against relying on any of these forward-looking statements. Lydall's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other Securities and Exchange Commission filings discuss important risk factors that could affect the Company's business, results of operations and financial condition.

These forward-looking statements speak only as of the date of this presentation, and Lydall does not assume any obligation to update or revise any forward-looking statement made in this presentation.

This presentation contains non-GAAP financial measures as defined by SEC regulations. The Appendix of this presentation includes a reconciliation to the most comparable GAAP measures.

2

Leading Provider of Engineered Customer Solutions

EXECUTION		LIQUIDITY
Operational excellence		Strong balance
to enhance margins		sheet provides
and cash flow		flexibility

POSITIONING	GROWTH	DISCIPLINED
Niche solutions in	Clear, consistent	Capital allocation to
diverse segments	strategy for profitable	fund additional
	growth	strategic opportunities

Serving Attractive End Markets Driven by Strong Secular Trends

3

Lydall at a Glance (NYSE: LDL)

Key Statistics
Founded	1869
Headquarters	Manchester, CT
Regions Served	Global
Global Employees	~3,300

2019 Financial Highlights
Revenue	$837M
Technical Nonwovens	30%
Performance Materials	28%
Thermal Acoustical Solutions	42%
Adj. EBITDA Margin1	9.6%
Free Cash Flow2	$51.0M

Global Footprint | 2019 Revenue by Region & Locations

27%

EMEA

63%	10%
N. America
	Asia
Filtration & Engineered Materials	Automotive
Technical Nonwovens Performance Materials	Thermal Acoustical Solutions

Global Manufacturer of Specialty Engineered Products

1 Reference Appendix for reconciliation between adjusted financials and GAAP financials; 2 FCF = Cash flow from operations less capex.

4

Vision for Profitable Growth1

Filtration & Engineered Materials Automotive

	2012
	12.9%
Sales	$362M
EBITDA Margin	10.0%
	14.2%

Vision

2019

13.3%GDP+

$837MMargin

14% CAGR	Expansion
9.6%
9.7%

CLEAR PRIORITIES

• Margin expansion driven by Lean, innovation, and scale
• Expansion into new verticals through innovation
• Focused on adjacent markets and strategic acquisitions in Filtration and Engineered Materials

Focused on Profitable Expansion and Diversifying Automotive Exposure

1 Reflects continuing operations; reference Appendix for reconciliation between adjusted financials and GAAP financials.

5

Technical Nonwovens at a Glance

Business Highlights

• Leading industrial air filtration media for dust and pollution control
• Advanced materials serves a broad set of applications and multiple sectors
• Combination of 3 market leading businesses
• • Andrew Filtration (Feb 2014)
  • Texel (Jul 2016)
  • Gutsche (Dec 2016)

Competitive Advantages

• Global brands renowned for quality and innovation
• Manufacturing scale and operational efficiency
• Diversified end markets and geographies

($M)		Financial Performance1						2019 Sales by Region
											$269	$277
															$255
									$156																		11%
				$139																			North America
$112
					16%
12%	13%		15%	14%	14%		27%	EMEA
																															62%	Asia
2014	2015	2016		2017	2018	2019
									Revenue						EBITDA Margin

Estimated Share of Segment Served	2019 Sales by Application
Industrial Filtration2		Advanced Materials3
25%		9%		Industrial Filtration
		43%
			57%	Advanced Materials

1 Reference Appendix for reconciliation between adjusted and GAAP financials; 2 Competitors: BWF Envirotec, Savings, and Testori; 3 Competitors: Propex, TexTech, TenCate, and Sandler.

6

Performance Materials at a Glance

Business Highlights

• Comprehensive filtration media portfolio serving air, liquid, and life sciences sectors
• Complete sealing solutions with preeminent fiber technology
• New product development in air and liquid filtration is a key element to profitable growth

Competitive Advantages

• Expertise in organic, polymer, and nano-fibers
• Providing complete portfolio of filtration media from residential to high efficiency HEPA/ULPA clean room applications
• Flexibility to accommodate various run sizes providing technical solutions and niche innovation
• Leadership in fiber-based wetlaid production

Financial Performance1

2019 Sales by Region

($M)

																										$245
																						$169							16%
$116	$102	$111		$117												North America
13%	13%	15%		14%	14%	12%		26%	58%	EMEA
																															Asia
2014	2015	2016		2017	2018	2019
									Revenue						EBITDA Margin

Estimated Share of Segment Served	2019 Sales by Application
Filtration2		Sealing & Advanced
		Solutions3
21%		6%		38%	Filtration
			62%		Sealing &
				Advanced Solutions

1 Reference Appendix for reconciliation between adjusted and GAAP financials; 2 Competitors: Hollingsworth & Vose, Ahlstrom Munksjo, Hokuetsu, and Neenah Paper; 3 Competitors: Unifrax, Owens Corning,	7
Neenah Paper, EnPro, and Frenzelit

Thermal Acoustical Solutions at a Glance

Business Highlights

• Fabricated thermal and acoustical barriers
• Margin enhancement with dual wall encapsulation applications
• Expanding product portfolio and geographic diversity
• Sole sourced for awarded applications; material pass through exists for approximately half of heat shield business

Competitive Advantages

• Highly engineered solutions for customer requirements
• Vertical integration (insulation material and fibers)
• Rapid solution provider with global presence
• World-classmanufacturing

($M)		Financial Performance1							2019 Sales by Region
																		$365	$362
									$321		$342
$292	$298
																		5%
				20%	20%		19%					27%		North America
18%		13%	10%				EMEA
																								68%	Asia
2014	2015	2016		2017	2018	2019
									Revenue						EBITDA Margin

Estimated Share of Segment Served		Customers
Heat Shield (Global)2	Acoustical (U.S.)3	Light Vehicle	Heavy Truck/Other

12%15%

1 Reference Appendix for reconciliation between adjusted and GAAP financials; 2 Competitors: ElringKlinger, Federal Mogul, Dana, and Autoneum; 3 Competitors: Autoneum, Borgers, HP Pelzer Group, and IAC.

8

Key Products and Applications by Business

PRODUCTS

APPLICATIONS

TECHNICAL NONWOVENS	PERFORMANCE MATERIALS	THERMAL ACOUSTICAL SOLUTIONS
 Nonwoven needled felt designed and manufactured	 Wide range of nonwoven engineered materials for	 Portfolio of engineered heat shields providing heat
for Industrial Filtration and a diverse selection of	Filtration, Insulation, and Sealing Solution markets	and noise abatement to sensitive components and
demanding material applications		passengers in high temp transportation applications
		 Full range of engineered nonwoven products to
		assist in noise, heat management, and weight
		reduction within the transportation sector
Industrial Filtration	Filtration	Thermal Acoustical Solutions
 Fabrics and filter bags for filtration of particulate	 Media specifically designed for its properties in air,	 Shielding for heat and component protection
and emission control for incineration, food/	liquid, and life sciences	including turbocharger wrap, fuel tank, hybrid
pharma/chemical, power generation, and	Sealing and Advanced Solutions	electric accessories, and EV motor
cement/asphalt/steel	 Acoustic components for sound attenuation and
 Sealing material used in equipment to keep fluids
Advanced Materials
thermal protection including aero shield, battery,
in and contaminants out, applications include
	integrated floor liners, and wheel arch liners
 High performance for demanding applications	drivetrain, transmission, axels, compressors
including geosynthetics, acoustics, and pipe	 Advanced solutions are materials in niche areas
rehabilitation
such as cryogenic insulation, thermal insulation,
	electrical papers, and aerospace papers

9

Attractive End Markets with Secular Growth Drivers

FILTRATION & ENGINEERED MATERIALS

HOW LYDALL CAPITALIZES

Sustainability & Regulation

Global air and water standards improving

Infrastructure

Aging systems in US, EU, and Asia

Energy

Availability, management, and efficiency

• Conversion to higher efficiency particulate capture technologies
• Filtration in industrial, commercial, and residential growing at 2x
  GDP
• Increased civil construction repair and replace projects
• Increasingly converting waste to energy and reducing landfills

 Filtration solutions in all markets

positioned for improved standards

 Leading position in geosynthetics and

growth position in pipe rehabilitation

 Best-in-class thermal insulation

 Wide installed based for incineration

filtration

AUTOMOTIVE

Emission & Noise Regulation

Increasing global standards

Electrification

Growth of hybrid and battery vehicles

Connected Vehicles

Continuous electronics introductions

• Lightweighting secular themes
• • Smaller engines with turbochargers for economy, weight, and performance
  • Material technology shifts: metal  plastic and plastic  fiber
• Higher use of Noise, Vibration, and Harshness (NVH) products
• Battery and electric motors creating new types of thermal, electrical, and noise requirements
• • Increased content (hybrids and electrical components) driving need for thermal shielding

 Suite of thermal shields that can be

acoustically tuned

 Battery insulators to manage thermal

environments

 Turbo wraps designed to reduce noise

and improve performance

 Fiber technology displacing plastics in

multiple locations

 RF Shields to protect sensitive electronics

Well Positioned to Take Advantage of Multiple Trends Driving Above GDP Growth

10

Clear, Consistent Strategy for Profitable Growth

Develop and quickly deploy next generation product offerings

Execute disciplined M&A for Filtration & Engineered Materials

Drive revenue and margin expansion through operational excellence

Evaluate opportunities to further strengthen global footprint

11

Key Competitive Differentiators

	Providing Complete	Lydall Lean Six Sigma
	Engineered Solutions		Embraced by All
	to Solve Customer		Businesses
	Problems
	Robust design, testing,		Improved quality, service,
	and simulation capabilities		and on-time delivery
	Quick turnaround on new		Capacity optimization
	product deployment		Significant opportunity to
	Quality is a cornerstone
		improve acquired
			businesses

Synergistic

Segments

• Engineered materials expertise enables innovative automotive products and vertical integration
• • Polyester rolled good media converted to acoustical barriers
  • Microglass insulation media dual wall heat shields

Market

Leadership

• Top 10 global nonwovens company
• #1 industrial air filtration media globally
• #1 geotextile producer in Canada
• Only filtration media company providing industrial, commercial, and residential solutions

Unmatched

Technologies

• Suite of nonwoven technologies
• Deep materials science expertise in both design and production
• Engineering and R&D expertise to deliver innovation

Continuous Improvement Mindset with Deep Customer Relationships

12

Execution of Strategy Driving Solid Financial Performance1

Revenue Growth ($M)	Gross Margin Profile	EBITDA Growth ($M)
6-yr CAGR: 14% Overall, 4% Organic	Commodity Headwinds in 2018 and	6-yr CAGR: 11%
Operational Issues in 2019

					$786	$837				24.8%	23.7%							$95
								23.3%
															$90
				$698		20.7% 21.5%							$85
									19.9%							$80
												18.3%			$72
			$567
	$516	$523												$64
$378														$42
2013	2014	2015	2016	2017	2018	2019	2013	2014	2015	2016	2017	2018	2019	2013	2014	2015	2016	2017	2018	2019

Strong Long-term Growth Profile

1 Reflects continuing operations; reference Appendix for reconciliation between adjusted and GAAP financials.

13

Clear Capital Allocation Strategy and Strong Liquidity Position

Capital Allocation Strategy

• Support organic growth programs with capital investments
• Pursue attractive acquisitions fueled by operating cash flows and paydown debt to ensure appropriate leverage
• Long term leverage ratio target <2.5x
• Buyback is secondary consideration to offset dilution

Summary Balance Sheet1 ($M)

Total Current Assets	$284
Working Capital	$154
PPE, Net	$222
Total Assets	$786
Long-term Debt	$263
Debt to Total Capitalization	46%

Liquidity Position ($M)

Cash/ST Investments		$325	$318	$300	$287
Debt				$273
	$76	$129	$60$77
$62$41	$72	$49	$48	$43	$49	$51
	$21
2014	2015	2016	2017	2018	Q1-19Q2-19Q3-19	Q4-19
Net Leverage:	0.7x	0.2x	2.8x	3.0x	2.9x	2.8x	3.0x
Acquisitions:

Flexible Balance Sheet Provides Opportunity to Fund Organic Growth and Strategic Acquisitions

1 As of December 31, 2019.

14

Strategic Approach to M&A | Recent Acquisitions

Date		2018		2016	2016
Purchase Price		$265M		$58M	$96M
EBITDA Acquisition Multiple (Pre | Post		9.0x | 8.0x		9.5x | 6.5x	8.3x | 6.9x
	Synergies)
Adjacent to Existing Products and Markets					
Provides Complementary/New Technologies					
Deepens Focus on Engineered Materials					
					
Expands Global Footprint
Meaningful Scale					
Accretive to Shareholders					
					KEY RATIONALE
			Strengthens engineered materials		Strengthens position as an industry	 Solidifies Lydall as a global leader in
			offering with a leading globally-		leader in engineered materials	industrial filtration markets
	Background Information		recognized brand		Further diversifies into attractive	 Further diversifies into complementary
		Leverages existing manufacturing		adjacent markets with a leading brand	geographies and attractive adjacent
	Strategic Filters		capabilities and know-how		Provides opportunity to leverage	markets with a leading brand
		Enhances portfolio with meaningful	 Combination creates further scale and
			existing manufacturing capabilities and
			scale and margin profile		expertise	unlocks operational synergies

15

Strategic Portfolio Management

Technical Nonwovens

• Profitable growth opportunities in advance materials supported by scale and operational efficiency

Performance Materials

• Profitable growth opportunities with new product development in air/liquid filtration and adjacent markets

Thermal Acoustical

• Consistent cash flow generation to support organic activity and power strategic transformation at group level

($M)

DIVESTITURESACQUISITIONS

$900

$800

$700

$600

$500

$400

$300

$200

$100

$-

Business Segment

Est. Sales1

Lydall Transport	Electrical Papers2	Affinity
Trucking	Insulation	Chillers
$30M	$12M	$25M

		Perf. Matl.
	TNW	$150M
	$70M
Andrew Filtration	TNW
$50M
TNW
$130M

Charter Medical Life Sciences $20M

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Transform Business by Growing Filtration & Engineered Materials Segment

1 Reflects estimated pro-forma impact in year of acquisition; 2 Reflects sale of a product line.

16

Strong Corporate Governance

Performance-based Incentives Support Long-term Objectives1

BOARD COMPOSITION

Long-term incentive awards in the form of performance- based (50%) and stock

options (50%)

54%

Annual incentive awards tied to the achievement of financial targets - evenly split between revenue, gross

11% margin, operating income and working capital

• Independent Chairman
• Outside Directors: 8
• Diversity: 33% Female
• Average Age: 60 Years
• Average Tenure: 10 Years

GOVERNANCE HIGHLIGHTS

35%

Annual Incentive Salary Long-term Incentive

• Proxy Access
• Annual Say-on-Pay Vote
• Majority Voting Standard
• Code of Ethics and Business Conduct
• Directors/Senior Executive Ownership Guidelines (CEO: Min. 4x Base Salary)

1 2018 Compensation for Named Executive Officers (Lydall 2019 Proxy Statement).

17

Looking Ahead | Execute and Deliver on Our Long-term Strategic Initiatives

Clear, Consistent Strategy for

Profitable Growth

POSITIONING

Niche solutions in diverse segments

EXECUTION

Operational excellence to enhance margin growth and cash flow

GROWTH

Strong secular trends in attractive end markets

LIQUIDITY

Strong balance sheet to fuel profitable growth

DISCIPLINED

Capital allocation to fund additional growth

18

Appendix

EBITDA Reconciliation to Reported Financials

Year to date 2019 EBITDA

Year to Date 2018 EBITDA

								For the Twelve Months Ended December 31, 2019
								Segments
($ in 000)		Performance						Technical		Thermal Acoustical			Total						Corporate		Consolidated
		Materials						Nonwovens			Solutions								Office		Lydall
Net loss																						$	(70,513)
Employee benefit plans settlement expenses																							25,247
Interest expense																							14,262
Income tax benefit																							(6,416)
Other income, net																							(1,257)
Income from equity method investment																							(148)
Operating loss	$	(59,804)	$	22,895	$	23,590	$	(13,319)	$	(25,506)
$	(38,825)
Depreciation and amortization		25,118						12,702			10,168			47,988						635			48,623
Employee benefit plans settlement expenses		-						-			-			-						25,247			25,247
Other income, net		-						-			-			-						(1,257)			(1,257)
Income from equity method investment		-						(148)			-			(148)						-		(148)
EBITDA	$	(34,686)											$	34,817				$	(48,861)
				$	35,745		$	33,758						$	(14,044)
% of net sales		(14.1)%						14.0%			9.3%			4.0%									(1.7)%
Strategic initiatives expenses	$	-	$	-	$	-	$	-	$	1,456		$	1,456
TNW restructuring expenses		-						767			-			767						-		767
Impairment of long-lived assets		64,206						-			-			64,206						-		64,206
CEO transition expenses		-						-			-			-						2,259			2,259
Reduction-in-force severance expenses		295						253			1,386			1,934						9			1,943
Employee benefit plans settlement expenses		-						-			-			-						25,247			25,247
Gain on sale from a divestiture		-						-			-			-						(1,459)			(1,459)
EBITDA, adjusted	$	29,815			$	36,765		$	35,144		$	101,724			$	(21,349)		$	80,375
% of net sales								14.4%						11.8%
	12.1%								9.7%											9.6%

								For the Twelve Months Ended December 31, 2018
								Segments
($ in 000)				Performance				Technical			Thermal Acoustical					Total				Corporate		Consolidated
				Materials				Nonwovens				Solutions								Office		Lydall
Net income																						$	34,944
Interest expense																							6,212
Income tax expense																							8,453
Other income, net																							(289)
Income from equity method investment																							(132)
Operating income	$	13,139	$	21,323	$	38,085	$	72,547	$	(23,359)		$	49,188
Depreciation and amortization			9,006				13,877				9,190					32,073				658			32,731
Other income, net			-				-				-					-				(289)			(289)
Income from equity method investment			-				(132)				-					(132)				-		(132)
EBITDA						$	35,332							$	104,752			$	(22,412)		$	82,340
	$	22,145			$	47,275
% of net sales			13.1%				12.8%				12.9%					12.9%							10.5%
Strategic initiatives expenses	$	233	$	-	$	-	$	233	$	3,398		$	3,631
TNW restructuring expenses			-				2,296				-					2,296				-		2,296
Inventory step-up purchase accounting adjustments			1,975				-				-					1,975				-		1,975
EBITDA, adjusted	$	24,353			$	37,628
			$	47,275	$	109,256
							$	(19,014)		$	90,242
% of net sales			14.4%				13.6%				12.9%					13.5%							11.5%

EBITDAis reported for Consolidated Lydall data and defined as Net Income before interest, taxes, depreciation, and amortization

Segment EBITDAis reported for each operating segment (Thermal Acoustical Solutions, Technical Nonwovens, and Performance Materials) and is defined as Operating Income net of depreciation and amortization expenses, plus income/loss from equity method investments

20

Reconciliation Between Adjusted and Reported GAAP Financials

		For the Twelve Months Ended December 31, 2019			For the Twelve Months Ended December 31, 2018
In thousands except per share data	As Reported,			Adjustments			Adjusted		As Reported,		Adjustments			Adjusted
	Lydall, Inc					Results			Lydall, Inc				Results
Net sales	$	837,398	$	-		$	837,398	$	785,897		-		$	785,897
Cost of sales		685,608			(1,617)	(a)		683,991			633,252	(3,869)	(g)		629,383
Gross profit		151,790			1,617			153,407			152,645		3,869			156,514
Gross margin		18.1%						18.3%			19.4%					19.9%
Selling, product development and		126,409			(4,808)	(b)		121,601			103,457	(4,033)	(h)		99,424
administrative expenses
Impairment of goodwill and other long-		64,206			(64,206)	(c)		-			-		-			-
lived assets
Operating (loss) income		(38,825)			70,631			31,806			49,188		7,902			57,090
Operating margin		(4.6)%						3.8%			6.3%					7.3%
Employee benefit plans settlement		25,247			(25,247)	(d)		-			-					-
expenses
Interest expense		14,262			-			14,262			6,212		-			6,212
Other (income) expense, net		(1,257)			1,459	(e)		202			(289)		-			(289)
(Loss) income before income taxes		(77,077)			94,419			17,342			43,265		7,902			51,167
Income tax (benefit) expense		(6,416)			11,451	(f)		5,035			8,453	694	(i)		9,147
Income from equity method investment		(148)			-			(148)			(132)		-			(132)
Net (loss) income	$	(70,513)		$	82,968		$	12,455		$	34,944		7,208		$	42,152
(Loss) earnings per share:		(4.08)					$	0.72	$	2.03				$	2.45
Basic	$
Diluted	$	(4.08)					$	0.72	$	2.02				$	2.43
Weighted average number of common
shares outstanding:		17,271						17,271			17,204					17,204
Basic
Diluted		17,271						17,326			17,330					17,330

1. Exclude the reduction-in-force severance expenses of $1.0 million across all segments and restructuring expenses of $0.6 million related to the Technical Nonwovens segment.
2. Exclude the CEO transition expenses of $2.3 million, corporate strategic initiatives expenses of $1.5 million, reduction-in-force severance expenses of $1.0 million across all segments and restructuring expenses of $0.1 million related to the Technical Nonwovens segment.
3. Exclude the impairment of goodwill and other long-lived assets expense of $64.2 million.
4. Exclude the employee benefit plans settlement expense of $25.2 million.
5. Exclude the gain on sale from divestiture of $1.5 million.
6. Excludes the tax benefits and expenses realized on the adjustments in (a), (b), (d) and (e) of $11.5 million.
7. Excludes the inventory step-up purchase accounting adjustment of $2.0 million related to the Interface acquisition and the restructuring expenses of $1.9 million related to the Technical Nonwovens segment.
8. Excludes the corporate strategic initiatives expenses of $3.6 million and the restructuring expenses of $0.4 million related to the Technical Nonwovens segment.
9. Excludes the tax benefits realized on the adjustments in (g) and (h) of $1.0 million and discrete tax benefits of $0.3 million.

21

Reconciliation Between Adjusted and Reported GAAP Financials

($ in 000)

Thermal Acoustical Solutions Operating income, as reported Reduction-in-forceseverance expenses Operating income, adjusted

Operating margin, as reported Operating margin, adjusted

Performance Materials Operating income, as reported Strategic initiatives expenses Inventory step-uppurchase accounting adjustments

Impairment of long-lived assets Reduction-in-force severance expenses Operating income, adjusted

Operating margin, as reported Operating margin, adjusted

Technical Nonwovens Operating income, as reported TNW restructuring expenses Reduction-in-forceseverance expenses Operating income, adjusted

Operating margin, as reported Operating margin, adjusted

$

$

$

$

$

$

Quarter Ended		Twelve Months Ended
December 31,		December 31,
2019		2018			2019			2018
1,720	$	8,728		$	23,590	$	38,085
1,386		-		1,386			-
3,106	$	8,728		$	24,976		$	38,085
2.0%		10.2%			6.5%			10.4%
3.6%		10.2%			6.9%			10.4%
(65,278)	$	5,096		$	(59,804)	$	13,139
-		-		-			233
-		585			-			1,975
64,206		-		64,206			-
295		-		295			-
(777)	$	5,681		$	4,697		$	15,347
(117.0)%		7.8%			(24.4)%			7.8%
(1.4)%		8.7%			1.9%			9.1%
3,152	$	3,928		$	22,895	$	21,323
177		358			767			2,296
253		-		253			-
3,582	$	4,286		$	23,915		$	23,619
5.6%		6.1%			9.0%			7.7%
6.3%		6.6%			9.4%			8.5%

22

Reconciliation Between Adjusted and Reported GAAP Financials

					For the year ended December 31,
		2013			2014			2015			2016			2017			2018		Q1-19	Q2-19	Q3-19		Q4-19	FY-2019
Reported EPS	$	1.14	$	1.28	$	2.71	$	2.16	$	2.85	$	2.02	$	0.22	$	(0.40)	$	0.17	$	(4.07)	$	(4.08)
Gain on sale of divested business	$	-	$	-	$	(0.69)	$	-	$	-	$	-	$	-	$	(0.07)	$	-	$	-	$	(0.07)
Long-lived asset impairment charge	$	-	$	-	$	0.08	$	-	$	-	$	-	$	-	$	-	$	-	$	3.71	$	3.71
Divested business	$	(0.03)	$	(0.06)	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Pension settlement expense	$	-	$	0.18	$	-	$	-	$	-	$	-	$	-	$	0.86	$	0.01	$	(0.02)	$	0.85
Sales commission settlement expense	$	-	$	0.12	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Strategic initiatives expenses	$	0.05	$	0.14	$	-	$	0.17	$	0.03	$	0.19	$	0.04	$	0.01	$	-	$	0.01	$	0.07
Inventory step-up purchase accounting adjustment	$	-	$	0.08	$	-	$	0.08	$	0.04	$	0.09	$	-	$	-	$	-	$	-	$	-
Discrete tax adjustments	$	(0.10)	$	-	$	-	$	-	$	(0.04)	$	0.02	$	-	$	-	$	-	$	-	$	-
Non-recurring customer project	$	(0.07)	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
German Cartel settlement	$	-	$	-	$	-	$	0.20	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Severance expenses	$	-	$	-	$	-	$	-	$	0.05	$	-	$	-	$	-	$	-	$	0.09	$	0.09
Restructuring expenses	$	-	$	-	$	-	$	-	$	0.03	$	0.11	$	0.02	$	0.01	$	0.01	$	0.01	$	0.04
CEO Transition Expenses	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	0.10	$	0.10
Automotive segments consolidation expenses	$	-	$	-	$	-	$	-	$	0.06	$	-	$	-	$	-	$	-	$	-	$	-
Tax reform adjustments	$	-	$	-	$	-	$	-	$	(0.22)	$	-	$	-	$	-	$	-	$	-	$	-
Adjusted EPS	$	0.99		$	1.74		$	2.10		$	2.61		$	2.80		$	2.43		$	0.28	$	0.41	$	0.19	$	(0.17)	$	0.72

23