false2021Q10000060977December 31LYDALL INC /DE/P5YEQUITY COMPENSATION PLANS

~~false2020Q3000006097712/31P5YP3YP3YP4YP2YP4YP3Yus~~As of March 31, 2021, the Company’s equity compensation plans consisted of the 2003 Stock Incentive Compensation Plan (the “2003 Plan”), and the Amended and Restated 2012 Stock Incentive Plan, (the “2012 Plan” and together with the 2003 Plan, the “Plans”) under which incentive and non-~~gaap~~qualified stock options and time and performance based restricted shares have been granted to employees and directors from authorized but unissued shares of common stock or treasury shares. The 2003 Plan is not active, but continues to govern all outstanding awards granted under the plan until the awards themselves are exercised or terminate in accordance with their terms. The 2012 Plan, amended and approved by stockholders on April 24, 2020, authorizes 3.0 million shares of common stock for awards. The 2012 Plan also authorized an additional 19,720 shares of common stock to the extent awards granted under prior stock plans that were outstanding as of April 24, 2020 are forfeited. The 2012 Plan provides for the following types of awards:~~AccountingStandardsUpdate201409Member00000609772020~~ options, restricted stock, restricted stock units and other 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awards. During the fourth quarter of 2019, additional shares of common stock were issued pursuant to separate inducement share agreements with two individuals as material inducement to their employment with the Company (the "Inducement Grants"). The Inducement Grants awarded stock options and restricted stock to the two individuals. Amounts shown below are inclusive of the Plans and the Inducement Grants.

The Company accounts for the expense of all share-based compensation by measuring the awards at fair value on the date of grant. The Company recognizes expense on a straight-line basis over the vesting period for awards that have cliff vesting, and on a graded vesting basis for time-restricted awards that have graded vesting. Options issued by the Company under its stock option plans have a term of ten years and generally vest ratably over a period of three to four years. Stock options issued under the current plan must have an exercise price that may not be less than the fair market value of the Company’s common stock on the date of grant.

Time-restricted stock awards are expensed over the vesting period of the award, which is typically two to three years. The number of performance-restricted shares that ultimately vest depends upon achievement of certain targets over a performance period, as more fully described under "Performance-Restricted Shares" below. Performance-restricted awards with a market condition are expensed over the performance period, which is typically three years. The Company estimates the grant date value of performance awards with a market condition using a Monte Carlo simulation model on the date of grant. Compensation expense for performance-restricted awards with a performance condition is recorded based upon the service period and management's assessment of the probability of achieving performance goals. The Company accounts for forfeitures as they occur. The Plans provide for automatic acceleration of vesting in the event of a change in control of the Company.

The Company incurred equity compensation expense of $1.0 million and $0.9 million for the three-month period ended March 31, 2021 and 2020, respectively, for the Plans, including restricted stock awards. The Company also incurred equity compensation expense of $0.2 million and $0.2 million for the three-month period ended March 31, 2021 and 2020, respectively, for stock awards granted to Directors. No equity compensation costs were capitalized as part of inventory.

Stock Options

The following table is a summary of outstanding and exercisable options for the three-month period ended March 31, 2021:


In thousands except per share amounts	Shares	Weighted-Average Exercise Price
Stock Options outstanding at the beginning of the period	488	$	22.03
Granted	6	$	32.19
Exercised	(28)	$	22.99
Forfeited or Expired	(5)	$	43.43
Stock Options outstanding at March 31, 2021	461	$	21.85

Exercisable at March 31, 2021	166	$	27.33
Unvested at March 31, 2021	295	$	18.78

There was $0.7 million and less than $0.1 million of cash received from exercise of stock options during three-month periods ended March 31, 2021 and 2020, respectively The intrinsic value of stock options exercised was $0.3 million with a tax benefit of less than $0.1 million and less than $0.1 million with a tax benefit of less than $0.1 million during the three-month periods ended March 31, 2021 and 2020, respectively.

At March 31, 2021, the total unrecognized compensation cost related to non-vested stock option awards was approximately $1.7 million, with a weighted average expected amortization period of 2.3 years.

Restricted Stock

Restricted stock includes both performance-based and time-based awards. The following is a summary of the Company's unvested time-based restricted shares for the three-month period ended March 31, 2021:

For the Three Months Ended March 31, 2021

In thousands

Unvested at the beginning of the period

177

Granted

173

Vested

(21)

Forfeited or Expired

(4)

Unvested at March 31, 2021

325

The following is a summary of the Company's unvested performance-based restricted shares for the three-month period ended March 31, 2021:

For the Three Months Ended March 31, 2021

In thousands

Unvested at the beginning of the period

142

Granted

Vested

—

Forfeited or Expired

(8)

Unvested at March 31, 2021

198

At March 31, 2021, there were 522,676 total unvested restricted stock awards with total unrecognized compensation cost related to these awards of $4.4 million with a weighted average expected amortization period of 2.1 years.3.019,720twotwoten yearsP3YP4YP2YP3Y1.00.90.20.2

The following table is a summary of outstanding and exercisable options for the three-month period ended March 31, 2021:


In thousands except per share amounts	Shares	Weighted-Average Exercise Price
Stock Options outstanding at the beginning of the period	488	$	22.03
Granted	6	$	32.19
Exercised	(28)	$	22.99
Forfeited or Expired	(5)	$	43.43
Stock Options outstanding at March 31, 2021	461	$	21.85

Exercisable at March 31, 2021	166	$	27.33
Unvested at March 31, 2021	295	$	18.78

48822.03632.192822.99543.4346121.8516627.3329518.780.70.10.30.10.10.11.72.3The following is a summary of the Company's unvested time-based restricted shares for the three-month period ended March 31, 2021:

For the Three Months Ended March 31, 2021

In thousands

Unvested at the beginning of the period

177

Granted

173

Vested

(21)

Forfeited or Expired

(4)

Unvested at March 31, 2021

325

The following is a summary of the Company's unvested performance-based restricted shares for the three-month period ended March 31, 2021:

For the Three Months Ended March 31, 2021

In thousands

Unvested at the beginning of the period

142

Granted

Vested

—

Forfeited or Expired

(8)

Unvested at March 31, 2021

198

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2020~~2021

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-7665

~~LYDALL~~Lydall, ~~INC~~Inc. ~~/DE/~~

(Exact name of registrant as specified in its charter)

Delaware

06-0865505

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

One Colonial Road

Manchester

Connecticut

06042

(Address of principal executive offices)

(zip code)

(860) 646-1233

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	LDL	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer ☐ Smaller reporting company ☐Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Total Shares outstanding ~~October~~April 15, ~~2020~~2021 1718,~~733~~018,~~429~~995

LYDALL, INC.

~~INDEX~~TABLE OF CONTENTS

PageNumber

~~PageNumber~~

Cautionary Note Concerning Forward – Looking Statements

Part I

Part I.

Financial Information

Item 1.

Financial Statements

Item 1.

Financial Statements

Condensed Consolidated Statements of Operations (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Condensed Consolidated Balance Sheets (Unaudited)

Condensed Consolidated Statements of Cash Flows (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

Item 4.

Controls and Procedures

Part II

Part II.

Other Information

Item 1.

Legal Proceedings

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.

~~Item 6.~~Exhibits

~~Exhibits~~41

Signature

Signatures

Lydall, Inc. and its subsidiaries are hereafter collectively referred to as “Lydall,” the “Company” or the “Registrant.” Lydall and its subsidiaries’ names, abbreviations thereof, logos, and product and service designators are all either the registered or unregistered trademarks or trade names of Lydall, Inc. and its subsidiaries.

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. All such forward-looking statements are intended to provide management’s current expectations for the future operating and financial performance of the Company based on current assumptions relating to the Company’s business, the economy and future conditions. Forward-looking statements generally can be identified through the use of words such as “believes,” “anticipates,” “may,” “should,” “will,” “plans,” “projects,” “expects,” “expectations,” “estimates,” “forecasts,” “predicts,” “targets,” “prospects,” “strategy,” “signs” and other words of similar meaning in connection with the discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash and other measures of financial performance. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict. Accordingly, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Investors, therefore, are cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Forward-looking statements in this Quarterly Report on Form 10-Q include, among others, statements relating to:

•The impact of the coronavirus pandemic ("COVID-19") on the Company's businesses;

•Overall economic and business conditions and the effects on the Company’s markets;

•Ability to meet financial covenants in the Company's credit agreement;

•Outlook for the fourth quarter and full year 2020;

•Ability to improve operational effectiveness;

•Expected vehicle production in the North American, European or Asian markets;

•Growth opportunities in markets served by the Company;

•Expected costs and future savings associated with restructuring, reduction-in-force, or other cost savings programs;

•Expected gross margin, operating margin and working capital improvements from cost control and other improvement programs;

•Future impact of raw material commodity costs;

•Product development and new business opportunities;

•Future strategic transactions, including but not limited to: acquisitions, joint ventures, alliances, licensing agreements and divestitures;

•Pension plan funding;

•Future cash flow and uses of cash;

•Future amounts of stock-based compensation expense;

•Future earnings and other measurements of financial performance;

•Ability to meet cash operating requirements;

•Future levels of indebtedness and capital spending;

•Future impact of the variability of interest rates and foreign currency exchange rates and impacts of hedging instruments;

•Expected future impact of recently issued accounting pronouncements upon adoption;

•Future effective income tax rates and realization of deferred tax assets;

•Estimates of fair values of reporting units and long-lived assets used in assessing goodwill and long-lived assets for possible impairment; and

•The expected outcomes of legal proceedings and other contingencies, including environmental matters.

All forward-looking statements are inherently subject to a number of risks and uncertainties that could cause the actual results of the Company to differ materially from those reflected in forward-looking statements made in this Quarterly Report on Form 10-Q, as well as in press releases and other statements made from time to time by the Company’s authorized officers. Such risks and uncertainties include, among others, the duration, severity, and impact of COVID-19 or other new pandemics and the measures taken in response thereto, in particular the impact the virus has on the Company's operations and ability to meet customer demands; worldwide economic cycles and political changes and uncertainties that affect the markets which the Company’s businesses serve, which could have an effect on demand for the Company’s products and impact the Company’s profitability; challenges encountered by the Company in the execution of restructuring programs; disruptions in the global credit and financial markets, including diminished liquidity and credit availability; changes in international trade agreements and policies, including tariff regulation and trade restrictions; swings in consumer confidence and spending; unstable economic growth; volatility in foreign currency exchange rates; raw material pricing and supply issues; fluctuations in unemployment rates; retention of key employees; increases in fuel prices; and outcomes of legal proceedings, claims and investigations, as well as other risks and uncertainties identified in Part II, Item 1A - Risk Factors of this Quarterly Report on Form 10-Q, and Part I, Item 1A - Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

Item 1. ~~Financial~~FINANCIAL ~~Statements~~STATEMENTS

LYDALL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In ~~Thousands~~thousands, ~~Except~~except ~~Per~~per ~~Share~~share ~~Amounts~~amounts) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
			For the Three Months Ended
	2020		2019		2020		2019
					March 31, 2021		March 31, 2020
	(Unaudited)						(Unaudited)
Net sales					$	227,099	$	200,527
Net sales	$	207,085	$	205,274	$	553,772	$	644,110
Cost of sales					178,550		161,959
Cost of sales	169,155		168,918		448,856		520,423
Gross profit					48,549		38,568
Gross profit	37,930		36,356		104,916		123,687
Selling, product development and administrative expenses					35,633		33,027
Selling, product development and administrative expenses	32,227		28,909		95,418		94,011
Impairment of goodwill and other long-lived assets					—		61,109
Impairment of goodwill and other long-lived assets	—		—		61,109		—
Restructuring expenses					777		—
Restructuring expenses	14,984		—		14,984		—
Operating income (loss)					12,139		(55,568)
Operating (loss) income	(9,281)		7,447		(66,595)		29,676
(Gain) loss on the sale of a business					698		—
Employee benefit plans settlement expenses	—		~~186~~		~~385~~—		~~25,701~~385
Interest expense	~~4,537~~		~~3,666~~		113,~~870~~448		112,~~025~~857
Other expense (income), net	276		(885)		106		(1,359)
Other (income) expense, net					86		(418)
(Loss) income before income taxes	(14,094)		4,480		(78,956)		(5,691)
Income (loss) before income taxes					7,907		(58,392)
Income tax (benefit) expense	(2,334)		1,574		(4,944)		(5,519)
Income tax expense (benefit)					2,821		(2,015)
Income from equity method investment	(50)		(98)		(24)		(120)
(Income) loss from equity method investment					(8)		44
Net (loss) income	$	(11,710)	$	3,004	$	(73,988)	$	(52)
Net income (loss)					$	5,094	$	(56,421)
(Loss) earnings per share:
Earnings (loss) per share:
Basic	$	~~(0.67)~~	$	~~0.17~~	$	(40.~~26)~~29	$	0(3.0025)
Diluted	$	~~(0.67)~~	$	~~0.17~~	$	(40.~~26)~~28	$	0(3.0025)
Weighted average number of common shares outstanding:
Basic	~~17,384~~		~~17,270~~		17,~~364~~545		17,~~264~~336
Diluted	~~17,384~~		~~17,330~~		17,~~364~~888		17,~~264~~336

See accompanying ~~Notes~~notes to ~~Condensed~~condensed ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~statements.

LYDALL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ~~INCOME~~

(In ~~Thousands~~thousands) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
			For the Three Months Ended
	2020		2019		2020		2019
					March 31, 2021		March 31, 2020
	(Unaudited)						(Unaudited)
Net income (loss)					$	5,094	$	(56,421)
Net (loss) income	$	(11,710)	$	3,004	$	(73,988)	$	(52)
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss):
Foreign currency translation adjustments					(3,014)		(9,957)
Foreign currency translation	8,245		(8,726)		3,434		(6,396)
Pension liability adjustment, net of taxes of $0.1 million and $0.1 million, respectively					365		331
Pension and other postretirement benefit plans, net of tax	(49)		21		282		19,395
Unrealized gain (loss) on hedging activities, net of taxes of $0.9 million and $0.1 million, respectively					3,018		446
Unrealized gain/(loss) on derivative instruments, net of tax	(1,963)		(148)		(2,202)		(2,174)
Other comprehensive income (loss)					369		(9,180)
Comprehensive (loss) income	$	(5,477)	$	(5,849)	$	(72,474)	$	10,773
Total comprehensive income (loss)					$	5,463	$	(65,601)

See accompanying ~~Notes~~notes to ~~Condensed~~condensed ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~statements.

LYDALL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In ~~Thousands~~thousands, except per share amounts) (Unaudited)

September 30,2020

December 31,2019

March 31, 2021

December 31, 2020

(Unaudited)

Assets

ASSETS

Current assets:

Cash and cash equivalents

~~122~~88,~~043~~717

51102,~~331~~176

Accounts receivable, net of allowance for doubtful accounts of $2,465 and $1,842, respectively

113,258

107,786

Accounts receivable, net of allowance for doubtful accounts of $2,313 and $2,402, respectively

135,464

116,947

Contract assets

2725,~~186~~959

2832,~~245~~403

Inventories

7181,~~167~~448

8078,~~544~~996

Taxes receivable

610,~~636~~031

36,~~427~~652

Prepaid expenses

64,~~117~~937

34,~~814~~870

Other current assets

87,~~516~~922

87,~~450~~348

Total current assets

354,~~923~~478

~~283~~349,~~597~~392

Property, plant and equipment, at cost

~~491~~505,~~291~~573

~~487~~506,~~371~~509

Accumulated depreciation

(~~286~~295,~~713~~557)

(~~265~~291,~~729~~996)

Property, plant and equipment, net

~~204~~210,~~578~~016

~~221~~214,~~642~~513

Operating lease right-of-use assets

2126,~~522~~163

2322,~~116~~243

Goodwill

8587,~~385~~195

~~133~~87,~~912~~595

Other intangible assets, net

9990,~~445~~796

~~115~~95,~~577~~121

Other assets, net

76,~~785~~729

86,~~093~~598

Total assets

~~773~~775,~~638~~377

~~785~~775,~~937~~462

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt

9,~~844~~789

9,~~928~~789

Accounts payable

~~101~~113,~~785~~416

73101,~~426~~905

Accrued payroll and other compensation

2422,~~806~~114

1724,~~198~~589

Accrued taxes

108,~~125~~339

58,~~638~~214

Other accrued liabilities

39,214

23,668

Derivative liabilities

7,966

11,996

Total current liabilities

185,774

129,858

Restructuring liabilities

2,042

9,431

Long-term debt

273,195

262,713

Other accrued liabilities

22,733

21,705

Long-term operating lease liabilities

17,369

18,424

Total current liabilities

186,399

187,629

Deferred tax liabilities

27,016

34,561

Long-term debt

251,202

260,649

Benefit plan liabilities

18,770

18,957

Long-term operating lease liabilities

21,220

17,947

Other long-term liabilities

3,201

3,004

Deferred tax liabilities

31,411

27,174

Commitments and Contingencies (Note 16)

Benefit plan liabilities

17,930

21,691

Other long-term liabilities

2,665

2,676

Commitments and Contingencies (Note 15)

Stockholders' equity:

Preferred stock

—

Preferred stock, $0.01 per share par value, 500 shares authorized (none issued or outstanding)

—

Common stock

255

253

Common stock, $0.01 per share par value, 30,000 shares authorized (25,741 and 25,555 shares issued, respectively)

257

256

Capital in excess of par value

96101,~~536~~361

9499,~~140~~770

Retained earnings

~~266~~271,~~641~~998

~~340~~266,~~629~~904

Accumulated other comprehensive loss

(24,465)

(25,979)

Accumulated other comprehensive income (loss)

(17,973)

(18,342)

Treasury stock, at cost

(90,654)

(90,623)

Less treasury stock, 7,722 and 7,717 shares of common stock, respectively, at cost

(91,093)

(90,892)

Total stockholders’ equity

~~248~~264,~~313~~550

~~318~~257,~~420~~696

Total liabilities and stockholders’ equity

~~773~~775,~~638~~377

~~785~~775,~~937~~462

See accompanying ~~Notes~~notes to ~~Condensed~~condensed ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~statements.

LYDALL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In ~~Thousands~~thousands) (Unaudited)

	For the Nine Months Ended September 30,
	For the Three Months Ended
	2020		2019
	March 31, 2021		March 31, 2020
	(Unaudited)
Cash flows from operating activities:
Net loss	$	(73,988)	$	(52)
Net income (loss)	$	5,094	$	(56,421)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on divestiture	—		(1,459)
Depreciation and amortization	11,366		12,152
Depreciation and amortization	42,349		36,682
Amortization of debt issuance costs	134		78
Impairment of goodwill and long-lived assets	~~61,109~~—		—61,109
Deferred income taxes	(63,~~911)~~224		(122,~~849~~896)
Employee benefit plans settlement expenses	385		25,701
(Gain) loss on the sale of a business	698		—
Stock-based compensation	2,508		2,073
Employee benefit plans settlement expenses	—		385
Other, net	47		—
Stock-based compensation	1,125		914
Loss (gain) on disposition of property, plant and equipment	164		(43)
(Gain) loss on disposition of property, plant and equipment	—		20
Income from equity method investment	(24)		(120)
(Gain) loss from equity method investment	(8)		44
Other, net	(106)		—
Changes in operating assets and liabilities:
Accounts receivable	(821,~~288~~817)		10(7,~~528~~800)
Contract assets	16,~~269~~298		(41,~~330)~~313
Inventories	10(3,~~117~~127)		(62,~~206~~026)
Accounts payable	28,391		13,427
Income taxes (receivable) payable	(3,424)		(546)
Accrued payroll and other compensation	7,192		4,935
Prepaid expenses and other assets	(1,053)		526
Accrued taxes	4,558		1,810
Accounts payable	11,456		21,127
Other, net	5,735		(7,133)
Accrued payroll and other compensation	(2,185)		(68)
Net cash provided by operating activities	74,613		62,964
Deferred revenue	21		—
Accrued taxes payable	245		(1,447)
Benefit plan liabilities	(3,517)		(450)
Other, net	(4,204)		727
Net cash provided by (used for) operating activities	220		26,741
Cash flows from investing activities:
Capital expenditures	(208,~~540~~119)		(279,~~236~~157)
Collections of finance receivables	41,~~257~~379		—1,658
Proceeds from divestiture	—		2,298
Payments from divestitures	(2,715)		—
Proceeds from the sale of property, plant and equipment	14		297
Net cash provided by (used for) investing activities	(9,455)		(7,499)
Business acquisitions, net of cash acquired	—		869
Net cash used for investing activities	(16,269)		(23,772)
Cash flows from financing activities:
Proceeds from borrowings	~~20,000~~—		—20,000
Debt repayments	(9,~~500~~499)		(384,~~185~~500)
Proceeds from servicing receivables	~~207~~4,557		—2,852
Common stock issued	32642		531
Common stock repurchased	(31201)		(508)
Net cash provided by (used for) financing activities	10(4,~~708~~501)		~~(38~~18,~~230)~~375
Effect of exchange rate changes on cash	~~1,660~~277		(1,~~280~~121)
Increase (decrease) in cash and cash equivalents	70(13,~~712~~459)		~~(318)~~36,496
Cash and cash equivalents at beginning of period	51102,~~331~~176		4951,~~237~~331
Cash and cash equivalents at end of period	$	~~122~~88,~~043~~717	$	4887,~~919~~827

~~Non-cash~~See ~~capital~~accompanying ~~expenditures~~notes ofto ~~$4.8~~condensed ~~million~~consolidated ~~and~~financial $3statements.~~8 million were included in accounts payable at September 30, 2020 and 2019, respectively.~~

~~See accompanying Notes to Condensed Consolidated Financial Statements.~~6

8LYDALL, INC. AND SUBSIDIARIES

LYDALL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. ~~Basis~~BASIS ofOF ~~Financial~~FINANCIAL ~~Statement~~STATEMENT ~~Presentation~~PRESENTATION

Description of Business

Lydall, Inc. and its subsidiaries (collectively, the “Company” or “Lydall”) design and manufacture specialty engineered nonwoven filtration media, industrial thermal insulating solutions, and thermal and acoustical barriers for filtration/separation and heat abatement and sound dampening applications.

Recent Developments: COVID-19

The impact of the novel strain of the coronavirus (“COVID-19”) has grown throughout the world, including in all global and regional markets served by the Company. During 2020, governmental authorities implemented numerous measures attempting to contain and mitigate the effects of COVID-19, including travel bans and restrictions, quarantines, social distancing orders, shelter in place orders, and shutdowns of non-essential activities. The Company’s manufacturing facilities are located in areas that have been affected by the pandemic and shutdowns. Certain Company facilities in the United States, Europe, and Asia carried out shutdowns as a result of government-imposed restrictions or in conjunction with customer plant closures during the first quarter. The Company’s Asia facilities resumed operations in late February and other facilities ramped back up moderately, in line with customer demand, during the second quarter. In the third quarter, the Company has seen a stronger recovery in the Performance Materials segment, specifically in the Filtration business, and in the Thermal Acoustical Solutions and Technical Nonwovens segments as discussed below.

Performance Materials (“PM”) Developments

Performance Materials sales were down 4.6% in the first half of 2020 from the comparative period in 2019 with incremental demand for specialty filtration media products more than offset by softer demand in the Sealing and Advanced Solutions business. PM’s Filtration sales continued to be very strong in the third quarter, up approximately 37.8% from the comparative period in the prior year, led by continued demand for fine fiber meltblown media used in personal protective equipment such as N95 respirators and surgical and medical masks. This demand is expected to moderate into the fourth quarter and expected to be down slightly on a sequential basis due to normal seasonality. Weaker demand in automotive, agricultural, and construction equipment markets resulted in a sales decline of approximately 1.7% in the Sealing and Advanced Solutions business in the third quarter of 2020 from the comparative period in 2019.

As a result of continued strong demand for filtration products, the Company approved investments to add two production lines in Performance Materials’ Rochester facility for the production of fine fiber meltblown filtration media used in the N95 respirator and surgical and medical masks. In addition, the Company has an agreement with the U.S. Government that provides partial funding of the investments in the production lines and funding for other technical resources.

In the third quarter of 2020, the Company announced an investment in a new fine fiber meltblown production line in its French facility to support the European Union face mask production and air filter production in the fight against COVID-19. The Company has a tentative agreement with the French Government to partially fund a portion of this investment.

In the third quarter, the Company initiated actions to close underperforming operating locations in Europe and discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America. These actions are part of the Company's ongoing assessment of underperforming assets and focus of resources on the significant investments to expand fine fiber meltblown production. These actions are expected to be completed in 2021 and projected to improve overall segment margin performance beginning in 2021. For additional information, see Note 12, "Restructuring".

Technical Nonwovens (“TNW”) Developments

During the first half of 2020, TNW experienced slowdowns in all geographic locations; predominantly in its facilities in South Carolina, the United Kingdom, and China. TNW’s Texel business in Canada, however, is a leading supplier of nonwoven products used in the production of healthcare applications including medical wipes, pads, and gowns. In response to the COVID-19 pandemic, the Company re-prioritized its manufacturing capabilities in North America and Europe to focus on serving customers for these products.

TNW’s sales in the first half of 2020 declined 18.8% from the comparable period in 2019 on generally slower demand in industrial end markets globally. In the third quarter of 2020, sales increased 12.5% on a sequential basis from the previous quarter but decreased 8.5% compared to the prior year quarter. Softer industrial end markets and lower sales into automotive applications resulted in the year-over-year sales declines in the quarter. Third quarter 2020 sales were down 10.0% in Industrial Filtration and 6.8% in Advanced Materials businesses from the same period in the previous year.

Thermal Acoustical Solutions (“TAS”) Developments

As previously disclosed, the Company ramped-down its TAS operations in North Carolina in the United States, as well as in France and Germany, coinciding with the shutdown of its major automotive customers' facilities in those regions beginning in late March 2020. During the first half of 2020, TAS sales decreased 35.4% from prior year, heavily impacted by customer shutdowns during March, April, and May. TAS began to ramp-up production in mid-second quarter of 2020 in North America and Europe as customers began to re-open their plants in these regions. During the third quarter 2020, part sales were down 0.8% from the previous year as TAS continued to see stronger demand in North America and Europe with sales increasing significantly compared to second quarter 2020.

As customer demand increased in North America, the Company began to experience an increase of COVID-19 cases, particularly at its North American operation, resulting in workforce shortages and other operational inefficiencies causing higher overtime, outsourcing costs, and logistics costs. In addition, recent recoveries in the manufacturing industries are causing higher commodity pricing in North America. In late third quarter 2020, as a result of labor shortages and operational inefficiencies directly related to COVID-19, TAS was unable to manufacture parts timely, resulting in customer production line stoppages. In early October 2020, due to the unforeseen and unforeseeable nature of the COVID-19 pandemic, which is out of the Company’s control, the Company invoked force majeure or commercial impracticability as legal excuse for delayed performance of contracts and defense to any claim that may be asserted by customers. A recent resurgence of cases in that same facility has caused the Company to expand its declaration of force majeure or commercial impracticability to other impacted customers. The Company has taken various actions to resolve these issues and expects TAS to continue to incur incremental costs in the fourth quarter of 2020.

Liquidity and Cash Preservation

The Company continued to experience working capital cash flow improvements through September 30, 2020, generating $74.6 million in cash from operating activities. As the Company continues to ramp-up production and invest in new fine fiber meltblown production equipment to meet customer demand, the Company expects cash outflows to support working capital requirements and capital projects.

During the first nine months of 2020, the Company took significant measures to reduce its overall cash expenditures, including the furlough or lay-off of hourly/salary plant workers and select furloughs of corporate and other salaried employees, deferred company contributions to its pension plans and matching contributions under the Company's 401(k) defined contribution plan, reduction of purchase obligations for raw materials, and reduction/delay of non-critical capital spending. As a result, the Company reduced its monthly cash expenditures. The Company may elect to continue certain actions if the COVID-19 pandemic continues.

In addition, the Company has taken advantage of specific benefits, including wage recovery provided by social programs in Europe and China and deferred domestic employer tax in the U.S. through the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. Through September 30, 2020, the Company benefited from $2.0 million in social cost reimbursements predominately in Europe and China. The Company may pursue, wherever it qualifies, governmental assistance and take advantage of governmental programs. The Company cannot guarantee, however, that it will qualify for, or receive, any additional assistance that it pursues.

As noted above, the Company reached an agreement with the U.S. Government in June 2020 that provides funding to cover a portion of the cost to install two new production lines for the production of meltblown material for N95 respirators, surgical and medical masks, and for other technical resources. The Company will receive monthly payments in accordance with the agreement to fund up to $13.5 million. Additionally, the Company has a tentative agreement with the French Government to fund up to 30% of the Company’s investment in its facility in France supporting the European Union face mask production and air filter production.

In addition to the significant measures taken to reduce and contain costs, the Company took actions in March 2020 to provide additional liquidity, primarily including a $20.0 million draw down on its amended credit facility. On May 11, 2020, the Company entered into an amended credit agreement (see Note 6, "Long-term Debt and Financing Arrangements" for the key amended terms and conditions) to modify certain financial maintenance covenants, at least one of which the Company expected to fail during the second quarter of 2020 as a result of the impact of COVID-19. On October 14, 2020, the Company amended

its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. The Company was in compliance with those modified financial covenants as of and for the three-month period ended September 30, 2020, and management does not anticipate noncompliance in the foreseeable future.

Through September of 2020, the Company generated $74.6 million of net cash provided by operations and had cash on hand of $122.0 million as of September 30, 2020. The Company continues to maintain the necessary capital to meet its debt obligations and interest payments. As previously disclosed in late 2019, the Company entered into arrangements with a banking institution to sell trade accounts receivable balances for selected customers. The Company continues to sell trade accounts receivable balances under these arrangements. See Transfer of Financial Assets in this Note 1, “Basis of Financial Statement Presentation” for more information.

The spread of COVID-19 and the measures taken to constrain the spread of the virus have had, and will continue to have, a material negative impact on the Company’s financial results, and such negative impact may continue well beyond the containment of such outbreak. There is inherent uncertainty in the assumptions the Company uses to estimate its future liquidity due to the impact of the COVID-19 outbreak. In addition, the magnitude, duration, and speed of the global pandemic is uncertain. Consequently, the impact on the Company's business, financial condition or longer-term financial or operational results is uncertain. However, management believes, based on the actions taken to reduce cash expenditures and the Company’s financial position, that net cash provided by operations combined with its cash and cash equivalents and borrowing availability under its Credit Facility will be sufficient to fund its current obligations, capital spending, debt service requirements, and working capital needs over at least the next twelve months.

Steps Taken to Protect Employees

The Company continues to monitor the global outbreak and spread of COVID-19 and take steps to mitigate the potential risks to the Company and its employees posed by the spread, related circumstances, and economic impacts of COVID-19. As the Company brings employees back to work, it has implemented changes to help ensure the safety and health of all its employees and continues to assess and update its business continuity plans in the context of this pandemic. The Company established the Lydall Emergency Preparedness Team (“LEPT”), implementing strict travel restrictions, enforcing rigorous hygiene protocols, increasing sanitization efforts at all facilities and implementing remote working arrangements for the majority of its employees who work outside the plants. The Company will continue its work to ensure it maintains a safe and healthy work environment and continue to allow remote working arrangements as long as necessary, where appropriate.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements include the accounts of Lydall, Inc. and its subsidiaries (collectively, “Lydall”, "the Company”, “we”, and “our”). All financial information is unaudited for the interim periods reported. All significant intercompany transactions have been eliminated in the Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with ~~accounting~~U.S. ~~principles~~ generally accepted inaccounting ~~the~~principles ~~United States of America~~ (“U.S. GAAP”). The year-end Condensed Consolidated Balance Sheet ~~was~~amounts have been derived from the audited financial statements for the year ended December 31, ~~2019~~2020, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the condensed consolidated financial information reflects all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations, and cash flows for the interim periods reported, but do not include all the disclosures required by U.S. GAAP. All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020.

~~Use~~Additional ofCash ~~Estimates~~Flow Information

~~The~~Non-cash ~~preparation~~investing ofactivities ~~condensed~~include ~~consolidated~~non-cash ~~financial~~capital ~~statements~~expenditures inof ~~conformity with U~~$1.S.6 million ~~GAAP requires management to make estimates~~ and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period$2.3 ~~The~~million ~~full~~that ~~extent~~were toincluded ~~which~~in ~~the~~Accounts ~~COVID-19~~payable ~~pandemic~~on ~~will directly or indirectly impact~~ the Company’'s ~~business,~~Condensed ~~results~~Consolidated Statements of ~~operations,~~Cash ~~and~~Flows ~~financial~~at ~~condition~~March 31, ~~including~~2021 ~~sales, expenses, reserves~~ and ~~allowances~~2020, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including the result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat itrespectively. The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods. Actual results could differ from those estimates.

Recent Accounting Pronouncements Adopted

Effective January 1, 2020, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The new standard amends guidance on reporting credit losses for assets held at amortized cost basis. The Company has determined the only financial assets subject to the new standard are its trade receivables and contract assets. The adoption of this ASU did not have any impact on the Company’s consolidated financial statements and disclosures.

Effective January 1, 2020, the Company adopted the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement," which adds, amends, and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. Please refer to Note 5, “Impairments of Goodwill and Other Long-Lived Assets”, for discussion of the inputs used in the quantitative impairment assessments for the three-month period ended March 31, 2020.

Effective January 1, 2020, the Company adopted FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update are elective, and provide optional expedients and exceptions in accounting for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance in this update is effective for transactions entered into between March 12, 2020 and December 31, 2022. The Company adopted this ASU upon issuance and notes no impact to the Company's consolidated financial statements and disclosures as of September 30, 2020.

Recent Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)." The amendments in this update are intended to simplify the accounting for convertible debt instruments and convertible preferred stock. This ASU is effective for fiscal years and interim periods beginning after December 15, 2021 with early adoption permitted. The Company does not expect the adoption of this update to have a material impact on its consolidated financial statements and related disclosures.

In January 2020, the FASB issued ASU 2020-01, "Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)." The amendments in this update are intended to reduce diversity in practice and increase comparability of the accounting for interaction of equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This ASU is effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes". The new standard is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in Topic 740, and by clarifying and amending existing guidance in other areas of the same topic. This ASU is effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU requires entities to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates. This ASU also requires entities to disclose an explanation for significant gains and losses related to changes in the benefit obligation for the period. This ASU is effective for fiscal years beginning after December 15, 2020

with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and disclosures.

Significant Accounting Policies

The Company’s significant accounting policies are detailed in Note 1, “Significant Accounting Policies” within Part IV, Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Risks and Uncertainties

Worldwide economic cycles, political changes, and the COVID-19 pandemic affect the markets that the Company’s businesses serve, ~~and~~ affect demand for the Company's products, and could impact profitability. Among other factors, disruptions in the global credit and financial markets, including diminished liquidity and credit availability, changes in international trade agreements, swings in consumer confidence and spending, and unstable economic growth, disruptions to the global automotive supply chain, and fluctuations in unemployment rates ~~has~~have caused economic instability and can have a negative impact on the Company’s results of operations, financial condition, and liquidity.

Transfers of Financial Assets

InThe ~~December 2019, the~~ Company ~~entered into two arrangements with a banking institution to sell trade~~ accounts ~~receivable balances~~ for ~~select~~transfers ~~customers. Under the programs, the Company has no risk~~ of ~~loss~~financial ~~due~~assets toas ~~credit~~sold ~~default~~when ~~and~~it ishas ~~charged~~surrendered acontrol ~~fee~~over ~~based~~the onrelated ~~the~~assets. ~~nominal~~Whether ~~value~~control ofhas ~~receivables~~been ~~sold~~relinquished ~~and~~requires, ~~the~~among ~~time~~other ~~between~~things, ~~the~~an ~~sale~~evaluation of ~~the~~relevant ~~trade~~legal ~~accounts~~considerations ~~receivables to banking institutions~~ and ~~collection~~an ~~from~~assessment ~~the customer. Under one~~ of the ~~programs,~~nature ~~the Company services the trade receivables after sale~~ and ~~receives~~extent ~~90.0%~~ of the ~~trade~~Company's ~~receivables~~continuing ininvolvement ~~cash~~with at the ~~time~~assets ~~of sale and the remaining 10~~transferred.0% inGains ~~cash,~~or ~~net~~losses ofand ~~fees,~~any atexpenditures ~~the~~stemming ~~earlier~~from ~~of customer payment or 150 days. In~~ the ~~three-month~~transfers ~~and~~are ~~nine-month~~included ~~periods~~in ~~ended~~Other ~~September~~(income) 30expense, ~~2020,~~net ~~under~~on ~~both programs,~~ the Company's ~~sold~~Condensed ~~$21.3~~Consolidated ~~million~~Statements ~~and~~of ~~$64~~Operations.~~3 million,~~ ~~respectively,~~Assets inobtained ~~trade~~and ~~receivable~~liabilities ~~balances,~~incurred ~~received $59.1 million~~ in ~~total~~connection ~~cash~~with ~~under~~transfers ~~the~~reported ~~programs,~~as ~~and~~sold ~~incurred~~are ~~$0.2~~initially ~~million~~recognized inon ~~fees. The~~the Company's ~~expects~~Condensed toConsolidated ~~receive~~Balance ~~the~~Sheets ~~remainder,~~at ~~net~~fair ~~of fees, in the fourth quarter of 2020~~value.

~~Condensed~~The ~~Consolidated~~Company ~~Statements~~maintains arrangements with banking institutions to sell trade accounts receivable balances for select customers. Under the programs, the Company has no risk of ~~Comprehensive~~loss ~~Income~~due to credit default and is charged a fee based on the nominal value of receivables sold and the time between the sale of the trade accounts receivables to banking institutions and collection from the customer. Under one of the programs, the Company services the trade receivables after the sale to the bank and receives 90.0% of the trade receivables in cash at the time of sale and the remaining 10.0% in cash, net of fees, when the customer pays. Total trade accounts receivable balances sold under both arrangements were $34.1 million and $32.7 million during the three-month periods ended March 31, 2021 and 2020, respectively. Total cash received was $31.2 million and $30.2 million during the three-month periods ended March 31, 2021 and 2020, respectively. Total fees incurred were $0.1 million and $0.1 million during the three-month periods ended March 31, 2021 and 2020, respectively.

InThe ~~connection with the preparation of its 2019 audited financial statements, the~~ Company's ~~identified~~senior ~~that~~secured inrevolving ~~its~~credit ~~previously~~agreement ~~filed~~permits ~~unaudited interim financial statements for~~ the ~~three-month and six-month periods ended June 30, 2019 and the nine-month period ended September 30, 2019, the~~ Company ~~had~~to ~~incorrectly~~sell ~~excluded,~~trade ~~from~~accounts ~~its~~receivable ~~Condensed~~balances ~~Consolidated Statements of Comprehensive Income, the impact~~ to ~~comprehensive~~approved ~~income~~third ~~resulting~~parties ~~from~~in ~~the~~connection ~~settlement~~with ofReceivable ~~its~~Purchases ~~U.S. Lydall Pension Plan (see Note 11~~Agreements, ~~"Employer~~or ~~Sponsored~~other ~~Benefit~~similar ~~Plans")~~agreements. AsAt aany ~~result~~given time, ~~unaudited~~outstanding ~~comprehensive~~trade ~~income~~accounts ~~for~~receivable ~~such~~balances ~~periods~~sold ~~was~~cannot ~~understated~~exceed ~~by approximately~~ $1910.0 million. ~~This~~for ~~error~~a ~~did~~certain ~~not~~approved ~~have~~customer ~~any~~and ~~impact on the Company’s corresponding previously filed Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows~~$50.0 ~~Management~~million ~~has concluded that such errors did not result~~ in ~~the~~aggregate ~~previously~~for ~~issued~~any ~~unaudited~~other ~~financial~~approved ~~statements~~group ~~being materially misstated. In connection with the filing~~ of ~~this Quarterly Report on Form 10-Q, the Company has revised the Condensed Consolidated Statements of Comprehensive Income for the nine-month period ended September 30, 2019 as follows:~~customers.

	Nine Months Ended September 30, 2019
In thousands	As reported		As revised
Pension liability adjustment, net of tax	$	379	$	19,395
Comprehensive (loss) income	$	(8,243)	$	10,773

2. ~~Revenue~~RECENT ~~from~~ACCOUNTING ~~Contracts with Customers~~STANDARDS

~~The~~Recent ~~Company~~Accounting ~~accounts~~Standards for revenue in accordance with ASC 606, "Revenue from Contracts with Customers". Revenues are generated from the design and manufacture of specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s revenue recognition policies require the Company to make significant judgments and estimates. In applying the Company’s revenue recognition policy, determinations must be made as to when control of products passes to the Company’s customers which can be either at a point in time or over time. Revenue is generally recognized at a point in time when control passes to customers upon shipment of the Company’s products and revenue is generally recognized over time when control of the Company’s products transfers to customers during the manufacturing process. The Company analyzes several factors, including but not limited to, the nature of the products being sold and contractual terms and conditions in contracts with customers to help the Adopted

13In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes". The new standard is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in Topic 740, and by clarifying and amending existing guidance in other areas of the same topic. This ASU was effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company adopted this ASU upon issuance and there was no material impact to the Company's Consolidated Financial Statements and disclosures as of March 31, 2021.

~~Company~~In ~~make~~January ~~such~~2020, ~~judgments~~the ~~about~~FASB ~~revenue~~issued ~~recognition~~ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)." ~~Unfulfilled~~The ~~performance~~amendments ~~obligations~~in ~~are~~this ~~generally~~update ~~expected~~are intended to bereduce ~~satisfied~~diversity ~~within~~in ~~one~~practice ~~year~~and increase comparability of the accounting for interaction of equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This ASU was effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company adopted this ASU upon issuance and notes that it did not have a material impact on the Company's Consolidated Financial Statements and disclosures as of March 31, 2021.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update are elective, and provide optional expedients and exceptions in accounting for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01 to provide additional clarity around Topic 848. Specifically, certain provisions of Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The guidance in this update is effective for transactions entered into between March 12, 2020 and December 31, 2022. The Company adopted this ASU upon issuance and there was no material impact to the Company's Consolidated Financial Statements and disclosures as of March 31, 2021.

In October 2020, the FASB issued ASU 2020-10, "Codification Improvements." The amendments in this update are intended to clarify the location of certain disclosure guidance within the ASC, as well as clarify certain guidance in cases where the original guidance may have been unclear. These amendments do not change U.S. GAAP. This ASU was effective for fiscal years and interim periods beginning after December 15, 2020. The Company adopted this ASU upon issuance and notes no impact to the Company's Consolidated Financial Statements and disclosures as of March 31, 2021.

Recent Accounting Standards Not Yet Adopted

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company accounts for revenue in accordance with ASC 606, "Revenue from Contracts with Customers". Revenues are generated from the design and manufacture of specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s revenue recognition policies require the Company to make significant judgments and estimates. In applying the Company’s revenue recognition policy, determinations must be made as to when the control of products passes to the Company’s customers which can be either at a point in time or over time. Revenue is generally recognized at a point in time when control passes to customers upon shipment of the Company’s products and revenue is generally recognized over time when control of the Company’s products transfers to customers during the manufacturing process. The Company analyzes several factors, including, but not limited to, the nature of the products being sold and contractual terms and conditions in contracts with customers to help the Company make such judgments about revenue recognition. Unfulfilled performance obligations are generally expected to be satisfied within one year.

Contract Assets and Liabilities

The Company’s contract assets primarily include unbilled amounts typically resulting from sales under contracts when the over time method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. These unbilled accounts receivable in contract assets are transferred to accounts receivable upon invoicing, typically when the right to payment becomes unconditional, in which case payment is due based only upon the passage of time.

The Company’s contract liabilities primarily relate to billings and advance payments received from customers and deferred revenue. These contract liabilities represent the Company’s obligation to transfer its products to its customers for which the Company has received, or is owed, consideration from its customers. Contract liabilities are included in Other ~~long-term~~accrued liabilities onin the Company’'s Condensed Consolidated Balance Sheets.

Contract assets and liabilities consisted of the following:

In thousands

~~September~~At 30March 31, ~~2020~~2021

At December 31, ~~2019~~2020

Dollar Change

Contract assets

2725,~~186~~959

2832,~~245~~403

(16,~~059~~444)

Contract liabilities

3,~~414~~786

13,~~441~~686

~~1,973~~100

The $16.14 million decrease in ~~contact~~contract assets from December 31, ~~2019~~2020 to ~~September~~March 3031, ~~2020~~2021 was primarily due to timing of tooling billings to customers and to a lesser extent, the billings on last-time buys of membrane-based filtration media initiated in December 2020 in the Company's Netherlands facility.

The $2.0.1 million increase in contract liabilities from December 31, ~~2019~~2020 to ~~September~~March 3031, ~~2020~~2021 was primarily due to an increase in customer deposits, offset by $1.14 million of revenue recognized in the first ~~nine~~three months of ~~2020~~2021 related to contract liabilities at December 31, ~~2019~~2020.

Disaggregated Revenue

The Company disaggregates revenue from customers by geographic region, as it believes this disclosure best depicts how the nature, amount, timing, and uncertainty of the Company's revenues and cash flows are affected by economic factors. Disaggregated revenue by geographical region for the three-month ~~and nine-month~~ periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020 were as follows:

	For the Three Months Ended September 30, 2020														For the Three Months Ended September 30, 2019
	For the Three Months Ended March 31, 2021								For the Three Months Ended March 31, 2020
In thousands	North America		Europe		Asia		Total Net Sales		North America		Europe		Asia		Total Net Sales
Performance Materials	$	4558,~~759~~874	$	1816,~~776~~924	$	3,~~282~~535	$	6779,~~817~~333	$	4245,~~693~~917	$	1517,~~203~~275	$	2,~~104~~028	$	6065,~~000~~220
Technical Nonwovens	3435,~~727~~838		1716,~~318~~899		68,~~464~~938		5861,~~509~~675		4235,~~128~~731		16,~~544~~938		54,~~240~~734		6357,~~912~~403
Thermal Acoustical Solutions	5760,~~841~~653		2226,~~861~~113		4,~~821~~278		8591,~~523~~044		6157,~~315~~101		2223,~~208~~540		43,~~403~~120		8783,~~926~~761
Eliminations and Other	(4,~~569~~678)		(~~195~~275)		—		(4,~~764~~953)		(65,~~405~~677)		(~~159~~180)		—		(65,~~564~~857)
Total Net Sales	$	133,758	$	58,760	$	14,567	$	207,085	$	139,731	$	53,796	$	11,747	$	205,274
Total net sales	$	150,687	$	59,661	$	16,751	$	227,099	$	133,072	$	57,573	$	9,882	$	200,527

149

	For the Nine Months Ended September 30, 2020														For the Nine Months Ended September 30, 2019
In thousands	North America		Europe		Asia		Total Net Sales		North America		Europe		Asia		Total Net Sales
Performance Materials	$	131,866	$	52,552	$	7,092	$	191,510	$	136,892	$	47,589	$	5,201	$	189,682
Technical Nonwovens	101,694		49,674		16,551		167,919		121,984		53,384		23,228		198,596
Thermal Acoustical Solutions	137,517		57,825		11,390		206,732		189,152		73,853		12,506		275,511
Eliminations and Other	(11,914)		(475)		—		(12,389)		(19,139)		(540)		—		(19,679)
Total Net Sales	$	359,163	$	159,576	$	35,033	$	553,772	$	428,889	$	174,286	$	40,935	$	644,110

4. INVENTORIES

3. Inventories as of March 31, 2021 and December 31, 2020 were as follows:

Inventories as of September 30, 2020 and December 31, 2019 were as follows:


In thousands	At March 31, 2021		At December 31, 2020
Raw materials	$	37,116	$	32,258
Work in process	16,504		17,087
Finished goods	27,828		29,651


Total inventories	$	81,448	$	78,996

In thousands	September 30,2020		December 31,2019
Raw materials	$	31,442	$	36,322
Work in process	14,228		14,873
Finished goods	25,497		29,349
Total inventories	$	71,167	$	80,544

Work in process includes net tooling inventory of $3.2 million and $2.8 million at March 31, 2021 and December 31, 2020, respectively.

~~Included in work in process is net tooling inventory of $2~~5.0 ~~million~~GOODWILL ~~and~~AND ~~$1.8~~OTHER ~~million~~INTANGIBLE ~~at September 30, 2020 and December 31, 2019, respectively.~~ ASSETS

4. Goodwill and Other Intangible Assets

Goodwill

The Company performs an assessment of its goodwill for impairment at least annually, in the fourth quarter, and whenever events or changes in circumstances indicate that the carrying value may exceed its fair value. There were no such events or changes in circumstances during the three-month period ended ~~September 30, 2020. See Note 5, "Impairments of Goodwill and Other Long-Lived Assets", for discussion of the goodwill impairment recorded during the three-month period ended~~ March 31, ~~2020~~2021.

The ~~changes~~following intable sets forth the change in carrying ~~amount~~value of goodwill byfor ~~segment~~each asreportable ofsegment and for the ~~nine-month~~Company ~~period~~as ~~ended~~of ~~September~~March 3031, ~~2020 were as follows~~2021:

In thousands	~~December~~Performance ~~31,2019~~Materials		~~Currency~~Technical ~~translation adjustments~~Nonwovens		~~Impairment~~Thermal Acoustical Solutions		~~September 30,2020~~Total
Performance Materials	$	80,658	$	(22)	$	(48,671)	$	31,965
Gross balance at December 31, 2020	$	143,659	$	55,607	$	12,160	$	211,426
Technical Nonwovens	53,254		166		—		53,420
Accumulated impairment	(111,671)		—		(12,160)		(123,831)
Total goodwill	$	133,912	$	144	$	(48,671)	$	85,385
Net balance at December 31, 2020	31,988		55,607		—		87,595
Foreign currency translation	(23)		(377)		—		(400)
Net balance at March 31, 2021	$	31,965	$	55,230	$	—	$	87,195

Goodwill Impairment

During the three-month period ended March 31, 2020, the Company performed a goodwill impairment analysis in the Performance Materials and Technical Nonwovens reporting units and recorded a goodwill impairment charge of $48.7 million in the Performance Materials reporting unit. See Note 5, "Impairments of Goodwill and Other Long-Lived Assets", for further discussion of the goodwill impairment.

Other Intangible Assets

The table below presents the gross carrying amount and, as applicable, the accumulated amortization of the Company’s acquired intangible assets, other than goodwill, as of March 31, 2021 and December 31, 2020. These amounts are included in “Other intangible assets, net” inon the Company's Condensed Consolidated Balance Sheets ~~as of September 30, 2020 and December 31, 2019:~~.

September 30, 2020

December 31, 2019

At March 31, 2021

At December 31, 2020

In thousands

~~Gross~~Amortization ~~Carrying Amount~~Period

~~Accumulated~~Gross ~~Amortization~~Carrying Amount

~~Gross~~Accumulated ~~Carrying Amount~~Amortization

~~Accumulated~~Gross ~~Amortization~~Carrying Amount

Accumulated Amortization

Amortized intangible assets

Customer Relationships

$10 - 14 years

~~141,784~~

~~(44~~143,~~636)~~184

~~142~~(53,~~400~~970)

~~(30~~143,~~648)~~479

(50,076)

Patents

~~791~~28 years

~~(670)~~650

~~759~~(619)

~~(607)~~650

(616)

Technology

~~2,500~~15 years

(12,~~102)~~500

2(1,~~500~~185)

~~(977)~~2,500

(1,144)

Trade Names

~~7,322~~3 - 5 years

(67,~~544)~~446

(7,~~293~~210)

(57,~~143)~~495

(7,167)

License Agreements

~~629~~10 years

~~(629)~~—

~~610~~—

~~(610)~~185

(185)

Other

~~570~~7 - 15 years

~~(570)~~459

~~551~~(459)

~~(551)~~467

(467)

Total other intangible assets

~~153,596~~

~~(54~~154,~~151)~~239

~~154~~(63,~~113~~443)

~~(38~~154,~~536)~~776

(59,655)

Estimated amortization expense for total intangible assets is expected to be $16.5 million, $14.5 million, ~~Impairments~~$12.8 million, of$11.4 million, ~~Goodwill~~$9.8 million and ~~Other~~$30.1 million, ~~Long-Lived~~for ~~Assets~~each of the years ending December 31, 2021 through 2025 and thereafter, respectively.

During the three-month period ended March 31, 2020, the Company experienced disruptions in some operations from lower customer demand directly attributable to the COVID-19 pandemic. Many of the Company's automotive customers temporarily ceased operations due to the impact of the COVID-19 pandemic on the global economy resulting in the following:10

•The Company’s China facilities carried out a planned shutdown in conjunction with the lunar New Year in late January, which was extended to late February as a result of government imposed restrictions6. ~~The~~ facilities did not resume operations until late February and ramped back up moderately in line with customer demand. Currently, all of the Company’s plants in China are operating and all of its automotive customer plants in China have reLONG-~~opened. The~~TERM ~~Company~~DEBT ~~has~~AND ~~not~~FINANCING ~~experienced any significant disruption it its supply chains in China since resuming operations;~~ARRANGEMENTS

~~•On~~The ~~March~~long-term ~~20,~~debt ~~2020,~~payable under the Company’s ~~announced~~amended ~~ramp-downs~~and atrestated ~~its~~2018 ~~Thermal~~senior ~~Acoustical~~secured ~~Solutions~~revolving ~~("TAS")~~credit ~~operations~~agreement ~~in North America and Europe~~ (as aamended ~~direct~~to-date, ~~result~~the of"2018 ~~customer~~Amended ~~stoppages.~~Credit ~~The~~Agreement") ~~Company's~~at ~~facilities~~March 31, in2021 ~~North America~~ and ~~Europe~~December 31, ~~have~~2020 ~~since~~consisted ~~resumed operations;~~of:

•Leading economic indicators began to signal a broad economic recession and a future decline in automotive sales;


In thousands	Effective Rate		Maturity	At March 31, 2021		At December 31, 2020
Revolver loan	4.25	%	8/31/2023	$	127,500	$	134,500
Term loan, net of debt issuance costs	4.25	%	8/31/2023	133,491		135,938

				260,991		270,438
Less portion due within one year				(9,789)		(9,789)
Total long-term debt, net of debt issuance costs				$	251,202	$	260,649

~~•Certain~~The ofweighted ~~the~~average ~~Company’s~~interest ~~Performance~~rate ~~Materials~~on ~~("PM")~~long-term ~~and~~debt ~~Technical~~was ~~Nonwovens ("TNW") operations with exposure to automotive end markets also experienced reductions in sales, which, in some cases, have been partially offset by increases in sales of other products~~5. ~~These~~1% ~~operations~~and ~~also have exposure to various industrial end markets~~4. ~~Leading~~4%, ~~economic indicators~~ for ~~certain~~the ofthree-month ~~these~~periods ~~markets~~ending ~~also~~March 31, ~~signaled~~2021 ~~a downturn in demand;~~ and 2020, respectively.

~~•The~~Total ~~Company's~~amortization ~~share~~expense ~~price~~of debt issuance costs was $0.1 million and ~~market~~$0.1 million ~~capitalization~~for ~~experienced~~the athree-month ~~significant~~periods ~~decline~~ending March 31, 2021 and 2020, respectively.

~~During~~At ~~the three-month period ended~~ March 31, ~~2020~~2021, the Company ~~considered~~had ~~the~~amounts ~~combination~~available ~~of the above to be triggering events that required an impairment analysis~~ for ~~the~~borrowing ~~goodwill~~of ~~held~~$40.7 million atunder the PM2018 ~~and~~Amended ~~TNW~~Credit ~~reporting units~~Agreement, ~~and~~net ~~for~~of ~~certain long-lived assets~~$127.5 million ~~Therefore,~~outstanding ~~during~~under the ~~three-month~~revolver ~~period~~facility ~~ended March 31, 2020, in accordance with both ASC 350 Intangibles - Goodwill~~ and ~~Other,~~standby ~~and~~letters ~~with ASC 360 Property, Plant & Equipment, the Company performed an impairment analysis~~ of ~~its~~credit ~~goodwill~~outstanding ~~held by the PM and TNW reporting units, and on certain~~ of ~~its long-lived assets (principally land, machinery and equipment, customer relationships, and buildings and improvements)~~$1.8 million.

16In addition to the amounts outstanding under the 2018 Amended Credit Agreement, the Company has various foreign credit facilities totaling approximately $10.8 million. At March 31, 2021 and December 31, 2020, the Company's foreign subsidiaries had $1.2 million and $1.4 million, respectively, in standby letters of credit outstanding under these foreign credit facilities.

AsThe aCompany ~~result~~has ofentered ~~these~~into ~~impairment~~an ~~tests,~~interest rate swap to convert a portion of the Company's ~~recorded~~borrowings ~~the~~from ~~following~~a ~~impairment~~variable ~~charges~~rate ~~during~~to ~~the~~a ~~three-month~~fixed ~~period~~rate. ~~ended~~See ~~March~~Note 317, ~~2020:~~"Derivatives," in these Notes to Condensed Consolidated Financial Statements for additional information.

In thousands	Performance Materials		Technical Nonwovens		Thermal Acoustical Solutions		Totals
Impairment of goodwill	$	48,671	$	—	$	—	$	48,671
Impairment of other long-lived assets	12,438		—		—		12,438
Total impairments	$	61,109	$	—	$	—	$	61,109

On April 26, 2021, the Company replaced its 2018 Amended Credit Agreement with a newly executed Credit Agreement by and among the Company, as borrower, and certain direct and indirect subsidiaries as guarantors, and Bank of America, N.A., as Administrative Agent, Lender, L/C Issuer and Swingline Lender, and Wells Fargo Bank, N.A., JPMorgan Chase Bank, N.A., KeyBank N.A., Santander Bank, N.A., TD Bank, N.A., and Webster Bank, N.A., as Lenders, increasing total borrowings from $314.0 million to $346.0 million. The 2021 senior secured revolving credit agreement has a revolving facility of $170.0 million, which includes a $50.0 million sublimit for the issuance of letters of credit, a $50.0 million sublimit for alternative currencies loans and a $30.0 million sublimit for swingline loans, and a term loan facility of $176.0 million (the revolving facility and the term loan facility are collectively referred to as the “2021 Credit Facility”). The 2021 Credit Facility includes an accordion feature permitting the Company to request an increase of up to $150.0 million in the aggregate. The proceeds of the 2021 Credit Facility will be used to (a) refinance indebtedness and commitments outstanding under the existing 2018 Amended Credit Agreement, (b) pay fees and expenses incurred in connection with the 2021 Credit Facility, and (c) provide ongoing working capital and for other general corporate purposes. The 2021 Credit Facility matures on April 26, 2026.

~~Goodwill~~The term loan facility requires quarterly payments of principal at the rate of $2.2 million, with the remaining balance due in the final quarter of the 2021 Credit Facility’s term. The Company is permitted to prepay amounts outstanding under the 2021 Credit Facility, in whole or in part, at any time without premium or penalty, and the Company is generally permitted to irrevocably cancel unutilized portions of the revolving commitments.

~~During~~The ~~the~~Lenders ~~three-month~~have ~~period~~been ~~ended~~granted ~~March 31, 2020, the Company performed~~ a ~~quantitative~~security ~~goodwill~~interest ~~impairment~~in ~~assessment~~substantially ~~for~~all ~~both~~of ~~the~~Lydall PMInc.'s and ~~TNW~~its ~~reporting~~domestic ~~units.~~subsidiaries’ Inpersonal ~~the~~property ~~quantitative~~and ~~impairment~~other ~~assessment,~~assets ~~the Company weighted equally both an income approach~~ (~~discounted~~including ~~cash~~intellectual ~~flow model~~property), ~~and~~including a ~~market~~pledge ~~approach~~of to65% ~~determine the fair value~~ of the ~~reporting units. The~~ Company’s ~~significant~~equity ~~assumptions~~interest in ~~the~~certain ~~discounted~~foreign ~~cash~~subsidiaries ~~flow~~and ~~model~~100% ~~included,~~of ~~but~~the ~~were~~Company’s ~~not~~equity ~~limited~~interest ~~to,~~in ~~future~~its ~~cash~~domestic ~~flow projections~~subsidiaries, ~~the~~as ~~weighted~~collateral ~~average~~for ~~cost of capital,~~ the ~~terminal~~Company’s ~~growth~~obligations ~~rate,~~under ~~and~~ the ~~tax~~2021 ~~rate~~Credit Facility.

~~Lower~~Under ~~expected~~the ~~demand~~2021 inCredit ~~automotive~~Facility, ~~and~~interest ~~other~~is ~~end~~charged ~~markets~~on ~~due~~borrowings, toat the ~~COVID-19~~Company’s ~~pandemic~~option, ~~resulted~~of ineither: a(i) ~~reduction~~LIBOR in(if ~~sales~~LIBOR ~~and~~is ~~cash~~not ~~generation~~available ~~projections~~for asan ~~compared~~alternative tocurrency, ~~prior~~such ~~projections~~other ~~for~~interest ~~the~~rate ~~reporting~~customarily ~~units. Projected~~used ~~future~~by ~~cash~~Bank ~~flows~~of ~~includes~~America ~~management~~for ~~estimates~~such ~~and~~alternative ~~assumptions~~currency) ~~that~~plus ~~are based on~~ the ~~best~~Applicable ~~available~~Margin, ~~information~~or as(ii) offor ~~the~~U.S. ~~date~~denominated ofloans the ~~assessment. Future~~Base ~~cash flows can be affected by numerous factors including changes in economic~~Rate, ~~industry~~which oris ~~market~~a ~~conditions,~~fluctuating ~~changes~~rate inequal to the ~~underlying~~highest ~~business or products~~ of (a) the ~~reporting~~federal ~~unit,~~funds ~~changes~~rate inplus ~~competition, and changes in technology~~0.50%, ~~The~~(b) ~~cash flows of~~ the ~~Company's~~prime ~~reporting~~rate ~~units~~as ~~can~~set ~~be significantly affected~~ by the ~~depth~~Administrative ofAgent, ~~the estimated decline in automotive~~ and ~~other~~(c) ~~end markets and~~ the ~~Company's~~one ~~estimates~~month ~~of the pace and level of their recovery as well as the ability of the Company to increase production in response to the recovery.~~

~~The weighted average cost of capital for the PM reporting unit increased from 9.2 percent in the three-month period ended December 31, 2019 to~~ 11.5 percent in the three-month period ended March 31, 2020. The weighted average cost of capital for the TNW reporting unit increased from 9.2 percent in the three-month period ended December 31, 2019 to 10.8 percent in the three-month period ended March 31, 2020. There are inherent uncertainties and management judgment required in an analysis of goodwill impairment. The Company believes the income approach was appropriate because it provided a fair value estimate based upon the reporting unit's expected long-term operations and cash flow performance.

LIBOR (adjusted daily) plus 1.00%, plus the Applicable Margin. The ~~Company~~Applicable ~~also~~Margin ~~used~~is a2.00% ~~form~~per ofannum in the ~~market~~case ~~approach,~~of ~~which~~LIBOR ~~was~~and ~~derived~~alternative ~~from~~currency ~~metrics~~loans and letters of ~~publicly~~credit ~~traded~~and ~~companies~~1.00% orper ~~historically~~annum ~~completed~~in ~~transactions~~the case of ~~comparable~~Base ~~businesses.~~Rate ~~The~~loans ~~selection~~for the first full fiscal quarter following the closing date of ~~comparable~~the ~~businesses~~2021 Credit Facility. Thereafter, the Applicable Margin is determined based on the ~~markets~~Company’s inConsolidated ~~which~~Net Leverage Ratio (as defined in the ~~reporting~~2021 ~~unit~~Credit ~~operates~~Facility), ~~giving~~which ~~consideration~~ranges from 1.25% to ~~risk~~2.50% ~~profiles,~~per ~~size,~~annum ~~geography,~~for LIBOR and ~~diversity~~alternative currency loans and letters of ~~products~~credit, and ~~services~~ranges from 0. ~~The~~25% ~~EBITDA~~to ~~multiples~~1.50% ~~used~~per inannum ~~the~~for ~~market~~Base ~~approach~~Rate ~~for~~loans. ~~both~~The ~~reporting~~Company ~~units~~will ~~declined~~pay ~~from~~a ~~the~~quarterly ~~three-month~~commitment ~~period~~fee ~~ended~~of ~~December~~0.275% ~~31,~~per ~~2019~~annum toon the ~~three-month~~unused ~~period~~portion ~~ended~~of ~~March~~the ~~31,~~revolving ~~2020~~facility ~~due~~for tothe ~~market-related~~first ~~changes~~full infiscal quarter following the ~~industries~~closing indate ~~which~~of ~~these~~the ~~reporting~~2021 ~~units~~Credit ~~operate~~Facility. asThereafter, athe ~~result~~quarterly ofcommitment ~~COVID-19~~fee ranges from 0.20% to 0.30% per annum.

~~Other~~The ~~assumptions~~2021 ~~included~~Credit ~~adding~~Facility ancontains ~~implied~~customary ~~control~~affirmative ~~premium~~and tonegative ~~the~~covenants, ~~valuation~~including ~~based~~covenants onlimiting ~~estimating~~ the ~~fair~~Company ~~value~~and onits asubsidiaries ~~controlling basis~~to, ~~which~~among ~~was~~other ~~derived~~things, ~~from~~incur ~~research~~debt, ongrant ~~control~~liens, ~~premiums~~make ~~observed~~certain ininvestments, ~~recent~~engage ~~mergers and acquisitions~~ in ~~the~~a ~~industries~~line inof ~~which~~business ~~the~~substantially ~~Company~~different ~~operates.~~from ~~The~~business ~~control~~conducted ~~premium for both reporting units increased~~ by ~~5 percent from~~ the ~~three-month~~Company, ~~period~~transact ~~ended~~with ~~December 31~~affiliates, ~~2019~~make torestricted ~~the three-month period ended March 31~~payments, 2020. Control premiums can be higher in periods of depressed stock prices. The Company believes the market approach was appropriate because it provided a fair value using multiples from companies with operations and ~~economic~~sell ~~characteristics similar to the PM reporting unit~~assets.

The ~~Company~~2021 ~~also~~Credit ~~performed~~Facility ancontains ~~overall~~financial ~~reconciliation~~covenants torequired ~~corroborate~~of the ~~fair~~Company ~~value derived from the income~~ and ~~market~~its ~~approaches to the Company's overall market capitalization~~subsidiaries. The ~~revised~~Company ~~projections,~~is ~~together~~required ~~with a deterioration in the inputs described above, drove a reduction in the fair value of both reporting units. As a result, the carrying value of the PM reporting unit was determined~~ to ~~exceed~~meet ~~its~~certain ~~fair~~quarterly value by $48.7 million, resulting in the impairment charge. After recording the impairment charge during the three-month period ended March 31, 2020, the remaining goodwill associated with the PM reporting unit was $31.9 million. The fair value of the TNW reporting unit exceeded its carrying value and, therefore, no impairment was required. Any declines in financial ~~projections~~covenants, including: ~~changes to key assumptions, could have a material adverse impact on the fair value of the reporting units, and therefore could result in further impairment charges.~~

Ini.A ~~the~~Minimum ~~three-month~~Consolidated ~~period~~Fixed ~~ended~~Charge ~~December~~Coverage 31Ratio, ~~2019,~~which asrequires ~~part~~that ofat ~~its~~the ~~annual~~end ~~impairment~~of ~~assessment,~~each fiscal quarter the ~~Company~~ratio ~~determined~~of ~~that~~(a) ~~the~~consolidated ~~fair~~EBITDA ~~value~~to of(b) the PMsum ~~reporting~~of ~~unit~~consolidated ~~was~~interest ~~less~~charges, ~~than~~redemptions, ~~its~~non-financed ~~carrying~~maintenance ~~value~~capital expenditures, restricted payments and ~~recorded~~taxes apaid, ~~goodwill~~each ~~impairment~~as ofdefined ~~$63~~in the 2021 Credit Facility, may not be less than 1.025 ~~million~~to 1.00; and

17ii. A Consolidated Net Leverage Ratio, which requires that at the end of each fiscal quarter the ratio of consolidated funded indebtedness minus consolidated domestic cash to consolidated EBITDA, as defined in the 2021 Credit Facility, not be greater than 4.50:1.00 through the period ended December 31, 2021, stepping down to 4.00:1.00 through the period ending June 30, 2022, and 3.50:1.00 beginning with the period starting July 1, 2022 and thereafter.

~~Other~~Each ~~Long~~of the financial ratios referred to above are calculated on a consolidated trailing twelve-~~Lived~~month ~~Assets~~basis. The 2021 Credit Facility, permits the Company to exclude certain non-cash charges and certain restructuring and other expenses, as defined by the 2021 Credit Facility, from EBITDA in the calculation of the Company's financial covenants.

~~During~~The Company was in compliance with all covenants set forth in the ~~three-month~~2018 ~~period~~Amended Credit Agreement as of and for the quarter ended March 31, ~~2020~~2021, and in the ~~Company~~2021 ~~performed~~Credit Facility as of the ~~following~~date ~~impairment~~hereof, ~~assessments~~and ~~for~~the ~~long-lived~~Company ~~assets~~does innot ~~accordance~~anticipate ~~with~~noncompliance ~~ASC~~in ~~360:~~the foreseeable future.

~~•As a result of the COVID-19 pandemic and the Company's action plan to address the risks associated with it, the Company accelerated certain actions~~7. One such action was a review of an underperforming European plant within the PM segment. As a result of a strategic shift regarding this plant, the Company performed an impairment assessment on the long-lived assets of the plant. To determine the recoverability of this asset group, the Company completed an undiscounted cash flow analysis (income approach) and compared it to the asset group carrying value. The impairment test concluded that the assets were not recoverable because the undiscounted cash flows were less than the carrying amount. The Company determined that the carrying value of the assets exceeded the fair value and recorded a long-lived asset impairment charge of $12.4 million. DERIVATIVES

•As a result of the temporary plant closures announced on March 20, 2020 in response to the COVID-19 pandemic's effects on the automotive sector, the Company performed impairment assessments on the long-lived assets for its TAS plants. The Company considered each operating plant's asset group, primarily consisting of machinery and equipment, and buildings and improvements. To determine the recoverability of each asset group, the Company completed an undiscounted cash flow analysis (income approach) and compared it to each asset groups' carrying value. For two of the asset groups, the undiscounted cash flows exceeded the carrying value of the asset group so no further assessment of impairment was necessary. For two of the European plants, the undiscounted cash flows did not exceed the plants' carrying values. As part of step two of the impairment assessment, the Company used the market approach to determine fair value based on independent appraisals of the long-lived assets. The Company determined that impairment was not necessary since the fair value of the long-lived asset groups for each operating plant exceeded their carrying amounts.

There were no events or circumstances during the three-month period ended September 30, 2020 that indicated any further triggering events under ASC 360 were present. Changes in future operating results could result in a future non-cash impairment charge.

During the three-month period ended December 31, 2019, the Company determined that fair value of a certain asset group in the PM segment exceeded its carrying value and recorded a long-lived asset impairment charge of $1.2 million.

6. Long-term Debt and Financing Arrangements

On August 31, 2018, the Company amended and restated its $175 million senior secured revolving credit agreement ("2018 Credit Agreement"), which increased the available borrowing from $175 million to $450 million, added three additional lenders, and extended the maturity date from July 7, 2021 to August 31, 2023. On May 11, 2020, the Company amended its 2018 Credit Agreement ("2020 Amendment") which, among other changes, decreased borrowings from $450 million to $314 million and modified certain financial covenants contained in the 2018 Credit Agreement.

2018 Credit Agreement

Under the terms of the 2018 Credit Agreement, the lenders provided up to a $450 million credit facility (the “Facility”) to the Company, including a term loan commitment of $200 million and revolving loans to or for the benefit of the Company and its subsidiaries of up to $250 million. The Facility was secured by substantially all of the assets of the Company.

Interest was charged on borrowings at the Company’s option of either: (i) Base Rate plus the Applicable Rate, or (ii) the Eurodollar Rate plus the Applicable Rate. The Base Rate is a fluctuating rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate as set by Bank of America, and (c) the Eurocurrency Rate plus 1.00%. The Eurocurrency Rate means (i) if denominated in LIBOR quoted currency, a fluctuating LIBOR per annum rate equal to the London Interbank Offered Rate; (ii) if denominated in Canadian Dollars, the rate per annum equal to the Canadian Dollar Offered Rate; or (iii) the rate per annum as designated with respect to such alternative currency at the time such alternative currency is approved by the Lenders. The Applicable Rate is determined based on the Company’s Consolidated Leverage Ratio (as defined in the 2018 Credit Agreement). The Applicable Rate added to the Base Rate Committed Loans ranged from 0.00% to 1.25%, and the Applicable Rate added to Eurocurrency Rate Committed Loans and Letters of Credit ranged from 0.75% to 2.00%. The Company paid a quarterly fee ranging from 0.15% to 0.275% on the unused portion of the revolving commitment.

The Company has an interest rate swap in place to convert a portion of the Company's borrowings from a variable rate to a fixed rate. See Note 7, "Derivatives" for additional information.

The Company is permitted to prepay term and revolving borrowings in whole or in part at any time without premium or penalty, subject to certain minimum payment requirements, and the Company was generally permitted to irrevocably cancel unutilized portions of the revolving commitments under the 2018 Credit Agreement. The Company is required to repay the term commitment in an amount of $2.5 million per quarter beginning with the quarter ending December 31, 2018 through the quarter ending June 30, 2023.

The 2018 Credit Agreement contained covenants required of the Company and its subsidiaries, including various affirmative and negative financial and operational covenants. The Company was required to meet certain quarterly financial covenants calculated from the four fiscal quarters most recently ended, including: (i) a minimum Consolidated Fixed Charge Coverage Ratio, which requires that at the end of each fiscal quarter the ratio of (a) consolidated EBITDA to (b) the sum of consolidated interest charges, redemptions, non-financed maintenance capital expenditures, restricted payments and taxes paid, each as defined in the 2018 Credit Agreement, may not be lower than 1.25 to 1.0; and (ii) a Consolidated Net Leverage Ratio, which required that at the end of each fiscal quarter the ratio of consolidated funded indebtedness minus consolidated domestic cash to consolidated EBITDA, as defined in the 2018 Credit Agreement, could not be greater than 3.5 to 1.0.

2020 Amendments to the 2018 Credit Agreement

On May 11, 2020, the Company amended its $450 million senior secured revolving 2018 Credit Agreement. The principal purpose of the Amendment was to modify certain financial covenants contained in the 2018 Credit Agreement, at least one of which the Company expected to fail as early as the second quarter of 2020 as a result of the impact of COVID-19. The amended terms and conditions included the following:

•Modified the financial covenants as follows:

◦Consolidated Net Leverage Ratio, which requires that on the last day of each fiscal quarter the ratio not be greater than 6.5:1 through the period ending March 31, 2021, 4.50:1 for the period ending June 30, 2021 through the period ending March 31, 2022, and 3.50:1 for the periods ending June 30, 2022 and thereafter;

◦The minimum Consolidated Fixed Charge Coverage Ratio, which requires that on the last day of each fiscal quarter the ratio not be lower than 1.10:1 calculated on a trailing twelve month basis through the period ending June 30, 2020, 1.25:1 calculated on a distinct quarterly basis for the periods ended September 30, 2020 through June 30, 2021, and 1.25:1 calculated on a trailing twelve month basis beginning with the period ending September 30, 2021 and thereafter;

•Required the Company maintain a minimum cash and cash equivalents balance of $40 million, excluding deposit accounts in China;

•Decreased the term loan facility from $200 million to $144 million and decreased the revolving credit facility from $250 million to $170 million for a total overall facility of $314 million; and eliminated the accordion feature;

•Established a floor on the Base and Eurocurrrency Rate of 1%;

•Modified the definition of the Applicable Rate, as determined based on the Company’s Consolidated Net Leverage Ratio, by increasing the range for the Base Rate for Committed Loans to 2.00% to 3.25% and increasing the range for the Eurocurrency Rate Committed Loans and Letters of Credit to 3.00% to 4.25%;

•Increased the quarterly commitment fee to 0.375% on the unused portion of the revolving commitment; and

•Required the Company to pay an amendment fee to the Lenders based on their commitment levels.

There was no modification to the maturity date of the facility.

On October 14, 2020, the Company further amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. The Company believes that its liquidity resources, including the Facility, are sufficient to meet its working capital needs and other cash requirements. The Company was in compliance with those modified financial covenants at September 30, 2020, and management does not anticipate noncompliance in the foreseeable future.

At September 30, 2020, the Company had $283.5 million of borrowings outstanding and standby letters of credit outstanding of $1.8 million. The borrowings outstanding included a $138.5 million term loan, net of $0.5 million in debt issuance costs being

amortized to interest expense over the debt maturity period. The Company had available borrowings of $23.7 million and $121.6 million at September 30, 2020 and December 31, 2019, respectively.

In addition to the amounts outstanding under the Facility, the Company has various foreign credit facilities totaling approximately $9.4 million. At September 30, 2020, the Company's foreign subsidiaries had $0.2 million in borrowings outstanding as well as $1.3 million in standby letters of credit outstanding.

The Company also has a finance lease agreement for equipment at a North America operation requiring monthly principal and interest payments through October 31, 2020.

Total outstanding debt consists of:

In thousands	Effective Rate		Maturity	September 30, 2020		December 31, 2019
Revolver loan	5.25	%	8/31/2023	$	144,500	$	126,500
Term loan, net of debt issuance costs	5.25	%	8/31/2023	138,536		146,106
Finance leases	1.60	%	10/31/2020	3		35
				283,039		272,641
Less portion due within one year				(9,844)		(9,928)
Total long-term debt, net of debt issuance costs				$	273,195	$	262,713

The weighted average interest rate on long-term debt was 5.2% for the nine-month period ended September 30, 2020 and 4.3% for the year-ended December 31, 2019.

7. Derivatives

The Company selectively uses financial instruments to manage market risk associated with exposure to fluctuations in interest rates and foreign currency rates. These financial exposures are monitored and managed by the Company as an integral part of its risk management program.

Interest Rate Hedging

The Company’s interest rate exposure is most sensitive to fluctuations in interest rates in the United States and Europe, which impacts interest paid on its debt. The Company has debt with variable rates of interest based generally on LIBOR. From time to time, the Company enters into interest rate swap agreements to manage interest rate risk. These instruments are ~~designated as cash flow hedges and are~~ recorded at fair value. ~~(see~~See Note 8, "Fair Value Measurements," in these Notes to Condensed Consolidated Financial Statements for additional information).

In November 2018, the Company entered into a five-year interest rate swap agreement with a bank to convert the interest on a notional $139.0 million of the Company's borrowings under its ~~2018~~Amended Credit Agreement from a variable rate, plus the borrowing spread, to a fixed rate of 3.09% plus the borrowing spread. The notional amount ~~reduces~~decreases quarterly by fluctuating amounts through August 2023. In ~~April~~Prior ~~2017~~to May 11, 2020, the Company's ~~entered into a three-year~~ interest rate swap ~~agreement~~agreements ~~with~~were aaccounted ~~bank~~for toas ~~convert~~cash ~~the~~flow ~~interest on a notional $60~~hedges.0 ~~million~~Effectiveness of the ~~Company's~~remaining ~~borrowings~~derivative ~~from~~agreement awas ~~variable~~assessed ~~rate~~quarterly, ~~plus~~or ~~the~~more ~~borrowing~~frequently, ~~spread~~if necessary, toby aensuring ~~fixed~~that ~~rate~~the critical terms of ~~1.58%~~the ~~plus~~swap continued to match the ~~borrowing~~critical ~~spread.~~terms ~~The~~of ~~notional~~the ~~amount~~hedged ~~reduced~~debt ~~quarterly~~in byorder ~~$5.0~~to ~~million~~report ~~through~~gains ~~March~~or ~~31,~~losses ~~2020~~on ~~and~~the isderivative ~~now~~instrument ~~settled~~in other comprehensive income. ~~Prior~~An amendment to ~~May~~the ~~11,~~Company's ~~2020,~~Amended ~~these~~Credit ~~interest~~Agreement ~~rate~~on ~~swap~~May ~~agreements~~11, ~~were~~2020 ~~accounted~~included, ~~for~~among asother ~~cash~~modifications, ~~flow~~the ~~hedges.~~establishment ~~Effectiveness~~ of ~~the~~a ~~remaining~~floor ~~derivative~~on ~~agreement~~the ~~was~~base ~~assessed~~and ~~quarterly,~~Eurocurrency orrate ~~more~~of ~~frequently,~~1%. ifAs ~~necessary~~a result, bythe ~~ensuring~~Company determined that the critical terms of the swap ~~continued~~no tolonger ~~match~~matched the critical terms of the hedged debt inand ~~order~~performed toan ~~report~~assessment ~~gains~~of orthe ~~losses~~effectiveness onof the ~~derivative~~interest ~~instrument~~rate inswap ~~other~~agreement. ~~comprehensive~~The ~~income~~Company concluded the interest rate swap agreement was no longer effective. The Company also concluded that the hedged forecasted transaction (the

On May 11, 2020, the Company amended its 2018 Credit Agreement, see Note 6, "Long-term Debt and Financing Arrangements". The amendment included, among other modifications, the establishment of a floor on the base and Eurocurrency rate of 1%. As a result, the Company determined that the critical terms of the swap no longer matched the critical terms of the hedged debt and performed an assessment of the effectiveness of the interest rate swap agreement. The Company concluded the interest rate swap agreement is no longer effective. The Company also concluded that the hedged forecasted transaction (the occurrence of variable interest rate payments on the hedged debt) continues to be probable of occurring. Therefore, as of May 11, 2020, the Company discontinued hedge accounting. After May 11, 2020, any fair value gains or losses on the derivative agreement are recorded as interest expense in the Company's Consolidated Statement of Operations. The cumulative loss on the discontinued hedge relationship through May 11, 2020, which was recorded in Accumulated Other Comprehensive Income, will be amortized into earnings / (losses) through August 31, 2023, the maturity date of the hedged debt. The loss included in Accumulated Other Comprehensive Income related to the discontinued hedging relationship at 12

20occurrence of variable interest rate payments on the hedged debt) continues to be probable of occurring. Therefore, as of May 11, 2020, the Company discontinued hedge accounting. After May 11, 2020, any fair value gains or losses on the derivative agreement are recorded as interest expense on the Company's Condensed Consolidated Statement of Operations. The cumulative loss on the discontinued hedge relationship through May 11, 2020, which was recorded in Accumulated Other Comprehensive Income, will be amortized into earnings (loss) through August 31, 2023, the maturity date of the hedged debt. The loss included in Accumulated Other Comprehensive Income related to the discontinued hedging relationship at March 31, 2021 was $3.3 million, net of tax. The amount reclassified out of other comprehensive income into Interest expense on the Company's Condensed Consolidated Statement of Operations for the three-month period ended March 31, 2021 was $0.6 million, net of tax. The Company expects $2.0 million, net of tax, to be reclassified from Accumulated Other Comprehensive Income over the next twelve months.

September 30, 2020 was $4.5 million, net of tax. The amount reclassified out of other comprehensive income into interest expense on the Company's Condensed Consolidated Statement of Operations for the three and nine-months ended September 30, 2020 was $0.9 million and $1.4 million, respectively. The Company expects $3.1 million to be reclassified from Accumulated Other Comprehensive Income over the next twelve months.

Net Investment Hedges

The Company’s operations are subject to certain risks, including foreign currency exchange rate fluctuations. From time to time, the Company enters into cross-currency swaps designated as hedges, which are recorded at fair value (see Note 8, "Fair Value Measurements," in these Notes to Condensed Consolidated Financial Statements), to protect the Company's net investments in subsidiaries denominated in currencies other than the USU.S. dollar.

In November 2019, the Company entered into three fixed-to-fixed cross-currency swaps with banking institutions with aggregate notional amounts totaling €67.8 million ($75.0 million U.S. dollar equivalent). These swaps hedge a portion of the Company's net investment in a Euro functional currency denominated subsidiary against the variability of exchange rate translation impacts between the U.S. dollar and Euro. These contracts require monthly cash interest exchanges over the life of the contracts with the Company recognizing a reduction to interest expense due to the favorable interest rate differential ~~between the U~~.S. ~~dollar and Euro.~~ Also, settlement of the notional €22.6 million ($25.0 million U.S. dollar equivalent) cross-currency swaps occur at maturity dates of August 2021, August 2022, and August 2023. The Company assesses hedge effectiveness of the cross-currency swaps quarterly by ensuring the critical terms of the swaps continue to match the critical terms of the designated net investment. The Company elected to assess effectiveness using the spot method, and as a result, records the interest rate differential monthly inon the Company's ~~Statement~~Condensed Consolidated Statements of Operations.

Derivative instruments are recognized as either assets or liabilities depending on ~~the~~maturity. These ~~balance~~amounts ~~sheet~~are included in ~~either~~Other current ~~or non-current other~~ assets orand ~~other~~Derivative ~~accrued~~ liabilities oron ~~other~~the ~~long-term~~Company's ~~liabilities~~Condensed ~~depending~~Consolidated ~~upon~~Balance ~~maturity and commitment~~Sheets. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods in which the hedge transaction affects earnings. Any ineffective portion, or amounts related to contracts that are not designated as hedges, are recorded directly to earnings. The Company's policy for classifying cash flows from derivatives is to report the cash flows consistent with the underlying hedged item. The Company does not use derivatives for speculative or trading purposes.

The following table sets forth the fair value amounts of derivative instruments held by the Company presented inon the Condensed Consolidated Balance Sheets as ~~Other~~Derivative ~~current assets and Other accrued~~ liabilities:

	September 30, 2020						December 31, 2019
	At March 31, 2021				At December 31, 2020
In thousands	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Interest rate contracts	$	—	$	54,~~967~~154	$	2—	$	45,~~538~~063
Cross-currency swaps	—		3,~~310~~812		—		16,~~817~~933
Total derivatives	$	—	$	97,~~277~~966	$	2—	$	611,~~355~~996

The following table sets forth the income (loss) ~~income~~ recorded in accumulated other comprehensive income (loss) ~~income~~, net of tax, for the three ~~and nine~~-month periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020 for derivatives held by the Company and designated as hedging instruments:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~2020~~

~~2019~~

Cash flow hedges:

Interest rate contracts

~~706~~618

(~~148~~2,173)

~~(1,059)~~

~~(2,174)~~

Cross-currency swaps

(2,~~669)~~400

—2,619

~~(1,143)~~

—

Total derivatives

(13,~~963)~~018

~~(148)~~446

~~(2,202)~~

~~(2,174)~~

~~8. Fair Value Measurements~~13

8. FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The following table presents the carrying value and fair value of financial instruments that are not carried at fair value:

September 30, 2020

December 31, 2019

At March 31, 2021

At December 31, 2020

In thousands

Carrying Value

Fair Value

Carrying Value

Fair Value

Debt

~~283~~261,500

~~288~~262,~~891~~394

~~273~~271,000

~~269~~272,~~434~~792

The fair values of the Company’s long-term debt outstanding were computed based on discounted future cash flows (observable inputs), as applicable, which falls under Level 2 of the fair value hierarchy. Differences from carrying values are attributable to interest rate changes subsequent to when the transactions occurred.

The fair values of cash and cash equivalents, accounts receivable, net and accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

Recurring Fair Value Measures

The Company holds derivative instruments for interest rate swap contracts and cross-currency swaps that are measured using observable market inputs such as forward rates and its counterparties' credit risks. Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy. At ~~September~~March 3031, ~~2020~~2021 and December 31, ~~2019~~2020, these derivative instruments were included in ~~other~~Derivative ~~current assets and other accrued~~ liabilities on the Company's Condensed Consolidated Balance ~~Sheet~~Sheets. Based on the Company's continued ability to trade and enter into interest rate swaps and cross-currency swaps, the Company considers the markets for their fair value instruments to be open.

~~Nonrecurring~~9. ~~Fair~~STOCK ~~Value Measurements~~REPURCHASES

During the three-month period ended March 31, ~~2020~~2021, the Company ~~incurred~~purchased a5,646 shares of common stock valued at $480.7 2 million ~~impairment~~to ~~charge~~satisfy ~~for~~payroll ~~goodwill~~tax atwithholding ~~its~~obligations, ~~Performance~~pursuant ~~Materials~~to ~~segment~~provisions ~~and~~in aagreements ~~$12.4 million~~with ~~impairment~~recipients ~~charge~~of ~~for~~restricted astock ~~certain~~granted ~~asset~~under ~~group~~the atCompany’s ~~one~~equity ofcompensation ~~the~~plans, ~~Performance~~in ~~Materials'~~which ~~European~~the ~~businesses. See~~Company ~~Note~~withholds 5,the ~~"Impairment~~number of ~~Goodwill~~shares ~~and~~having ~~Other~~fair ~~Long-Lived~~value ~~Assets"~~equal ~~for~~to ~~information~~each ~~regarding~~recipient’s ~~the~~minimum ~~calculation~~payroll oftax ~~fair~~withholding ~~value~~obligation.

9On April 20, 2021, the Company announced that our Board of Directors approved a Share Repurchase Program authorizing the repurchase, from time to time at the Company's discretion, of up to an aggregate of $30.0 million ~~Equity~~of ~~Compensation~~common ~~Plans~~stock, par value $0.01 per share, of the Company. The ability to repurchase the Company’s common stock will continue until the Board of Directors reaches a determination to discontinue share repurchases. The timing and actual amount of shares repurchased will depend on a variety of factors including stock price, market conditions, corporate and regulatory requirements, and capital availability, among other factors.

As of September 30, 2020, the Company’s equity compensation plans consisted of the 2003 Stock Incentive Compensation Plan (the “2003 Plan”), and the Amended and Restated 2012 Stock Incentive Plan, (the “2012 Plan” and together with the 2003 Plan, the “Plans”) under which incentive and non-qualified stock options and time and performance based restricted shares have been granted to employees and directors from authorized but unissued shares of common stock or treasury shares10. ~~The~~ ~~2003~~EMPLOYER ~~Plan~~SPONSORED isBENEFIT not active, but continues to govern all outstanding awards granted under the plan until the awards themselves are exercised or terminate in accordance with their terms. The 2012 Plan, amended and approved by stockholders on April 24, 2020, authorizes 3.0 million shares of common stock for awards. The 2012 Plan also authorized an additional 19,720 shares of common stock to the extent awards granted under prior stock plans that were outstanding as of April 24, 2020 are forfeited. The 2012 Plan provides for the following types of awards: options, restricted stock, restricted stock units and other stock-based awards. During the fourth quarter of 2019, additional shares of common stock were issued pursuant to separate inducement share agreements with two individuals as material inducement to their employment with the Company (the "Inducement Grants"). The Inducement Grants awarded stock options and restricted stock to the two individuals. Amounts shown below are inclusive of the Plans and the Inducement Grants.PLANS

The Company ~~accounts~~maintains ~~for~~one ~~the~~domestic ~~expense~~pension ofplan: ~~all~~the ~~share-based~~Retirement ~~compensation~~Income byPlan ~~measuring~~for ~~the~~Employees ~~awards~~of atInterface ~~fair~~Performance ~~value~~Materials, onInc. ~~the~~("IPM ~~date~~Pension ~~of grant~~Plan"). ~~The~~During ~~Company~~the ~~recognizes~~three-month ~~expense~~period onended aMarch 31, ~~straight-line~~2020, ~~basis~~the ~~over~~Company settled the ~~vesting~~pension ~~period~~obligation of the ~~entire~~Interface ~~award~~Sealing Solutions, Inc. ~~Options~~ ~~issued~~Pension byPlan ("ISS Pension Plan") through lump sum distributions to

2214

~~the~~participants ~~Company~~or ~~under~~by ~~its~~irrevocably ~~stock~~transferring ~~option~~pension ~~plans~~liabilities ~~have~~to aan ~~term~~insurance ofcompany ~~ten~~through ~~years~~the ~~and~~purchase ~~generally~~of ~~vest ratably over~~ a ~~period~~group ofannuity ~~three to four years~~contract. ~~Time-based~~ ~~and~~This ~~performance-based~~purchase, ~~restricted~~funded ~~stock~~with ~~grants~~pension ~~are expensed over the vesting period of the award~~assets, ~~which~~resulted isin ~~typically~~a ~~two to four years. The number of performance~~pre-~~based~~tax ~~restricted~~settlement ~~shares~~loss ~~that ultimately vest depends upon achievement~~ of ~~certain~~$0.4 ~~relative~~million ~~performance~~in ~~metrics as measured against~~ the ~~performance of the S&P 600 industrial index during a~~ three-~~year~~month ~~performance~~ period~~. The~~ ~~Company~~ended ~~estimates~~March 31, ~~the~~2020, ~~grant~~related ~~date~~to ~~value of performance awards using a Monte Carlo simulation model on~~ the ~~date~~recognition of ~~grant.~~accumulated ~~The~~deferred ~~Company~~actuarial ~~accounts for forfeitures as they occur~~losses. ~~Stock~~The ~~options~~settlement ~~issued~~loss ~~under~~and ~~the~~expenses ~~current~~were ~~plan~~included ~~must~~as ~~have~~non-operating anexpense ~~exercise price that may not be less than the fair market value of the Company’s common stock~~ on the ~~date~~Condensed ofConsolidated ~~grant.~~Statements ~~The Plans provide for automatic acceleration~~ of ~~vesting in the event of a change in control of the Company~~Operations.

The ~~Company~~IPM ~~incurred~~Pension ~~equity~~Plan ~~compensation~~covers ~~expense~~a portion of ~~$0.7~~Interface's ~~million~~union and $0non-union employees.6 ~~million~~The ~~for~~plan ~~the~~is ~~three-month~~closed ~~periods~~to ~~ended~~new ~~September 30,~~employees ~~2020~~ and ~~2019,~~benefits ~~respectively,~~are ~~and~~no ~~$2.5 million~~longer ~~and~~accruing ~~$2.1 million~~ for the ~~nine-month~~majority ~~periods~~of ~~ended~~participants. ~~September 30,~~The ~~2020~~Company ~~and~~expects ~~2019,~~to ~~respectively,~~make ~~for~~contributions ~~the~~of ~~Plans,~~approximately ~~including~~$0.7 ~~restricted~~million ~~stock~~to ~~awards.~~the ~~The~~IPM ~~Company~~Pension ~~also~~Plan ~~incurred~~during ~~equity~~2021. ~~compensation~~Contributions ~~expense~~ of $0.2 million ~~and~~were ~~$0.2 million~~made ~~for~~during the three-month ~~periods~~period ended ~~September~~March 3031, ~~2020~~2021. ~~and~~Contributions ~~2019,~~of ~~respectively, and~~ $0.54 million ~~and~~were ~~$0.5 million~~made ~~for~~during the ~~nine~~three-month ~~periods~~period ended ~~September~~March 3031, 2020 ~~and 2019~~, ~~respectively,~~inclusive ~~for~~of ~~stock~~contributions ~~awards~~made ~~granted~~ to ~~Directors. No~~the ~~equity~~ISS ~~compensation~~Pension ~~costs were capitalized as part of inventory~~Plan.

Stock Options

The following table is a summary of outstanding and exercisable options for the three and nine-month periods ended September 30, 2020:

	For the Three Months Ended September 30, 2020						For the Nine Months Ended September 30, 2020
In thousands except per shareamounts	Shares	Weighted-AverageExercise Price		Shares	Weighted-AverageExercise Price
Stock Options outstanding at the beginning of the period	748	$	25.36	683	$	27.15
Granted	11	$	16.27	180	$	17.37
Exercised	—	$	—	(4)	$	8.67
Forfeited or Expired	(71)	$	26.25	(171)	$	25.46
Stock Options outstanding at September 30, 2020	688	$	25.11	688	$	25.11
Exercisable at September 30, 2020	305	$	32.54	305	$	32.54
Unvested at September 30, 2020	383	$	19.20	383	$	19.20

There was no cash received from exercise of stock options during the three-month period ended September 30, 2020. The amount of cash received from the exercise of stock options was less than $0.1 million during the nine-month period ended September 30, 2020. The intrinsic value of stock options exercised was less than $0.1 million with a tax benefit of less than $0.1 million during the nine-month period ended September 30, 2020.

At September 30, 2020, the total unrecognized compensation cost related to non-vested stock option awards was approximately $2.1 million, with a weighted average expected amortization period of 2.7 years.

Restricted Stock

Restricted stock includes both performance-based and time-based awards. The following is a summary of the Company's unvested time-based restricted shares for the three and nine-month periods ended September 30, 2020:

	For the Three Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
In thousands	Shares	Shares
Unvested at the beginning of the period	220	159
Granted	—	77
Vested	(5)	(8)
Forfeited or Expired	(12)	(25)
Unvested at September 30, 2020	203	203

The following is a summary of the Company's unvested performance-based restricted shares for the three and nine-month periods ended September 30, 2020:

	For the Three Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
In thousands	Shares	Shares
Unvested at the beginning of the period	161	129
Granted	5	71
Vested	—	—
Forfeited or Expired	(18)	(52)
Unvested at September 30, 2020	148	148

At September 30, 2020, there were 350,348 total unvested restricted stock awards with total unrecognized compensation cost related to these awards of $4.4 million with a weighted average expected amortization period of 2.1 years.

10. Stock Repurchases

During the nine-month period ended September 30, 2020, the Company purchased 2,340 shares of common stock valued at less than $0.1 million, through tax withholding, pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s equity compensation plans, in which the Company withholds that number of shares having fair value equal to each recipient’s minimum tax withholding due.

11. Employer Sponsored Benefit Plans

The Company maintains one domestic pension plan: the Retirement Income Plan for Employees of Interface Performance Materials, Inc. ("IPM Pension Plan"). During the three-month period ended March 31, 2020, the Company settled the pension obligation of the Interface Sealing Solutions, Inc. Pension Plan ("ISS Pension Plan") through lump sum distributions to participants or by irrevocably transferring pension liabilities to an insurance company through the purchase of a group annuity contract. This purchase, funded with pension assets, resulted in a pre-tax settlement loss of $0.4 million in the three-month period ended March 31, 2020, related to the recognition of accumulated deferred actuarial losses. The settlement loss and expenses were included as non-operating expense in the condensed consolidated statements of operations.

The IPM Pension Plan covers a portion of Interface's union and non-union employees. The plan is closed to new employees and benefits are no longer accruing for the majority of participants. The Company expects to make required contributions of approximately $1.2 million to the IPM Pension Plan during 2020. There were no contributions made during the three-month period ended September 30, 2020, as the Company took advantage of the delay in minimum funding contribution due dates as allowed under the CARES Act, and is delaying payment of the minimum funding contributions of $0.3 million originally due during April 2020, and $0.3 million originally due during July 2020. These and other required minimum funding contributions for the remainder of 2020 will be made later in 2020. Contributions of $0.4 million were made during the nine-month period ended September 30, 2020. Contributions of $0.3 million and $1.1 million were made during the three-month and nine-month periods ended September 30, 2019, respectively, inclusive of contributions made to the ISS Pension Plan.

Prior to 2020, the Company also maintained the U.S. Lydall Pension Plan. During the second quarter of 2019, the Company settled the pension obligation of the U.S. Lydall Pension Plan through lump sum distributions to participants or by irrevocably transferring pension liabilities to two insurance companies through the purchase of group annuity contracts.

The following is a summary of the components of net periodic benefit cost for the domestic defined benefit pension plans for

the three-month ~~and nine-month~~ periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021		~~2019~~2020		~~2020~~		~~2019~~
Components of employer benefit cost
Service cost	$	4029	$	3040	$	~~120~~	$	90
Interest cost	~~428~~304		~~530~~430		~~1,285~~		~~2,356~~
Expected return on assets	(~~532~~589)		(~~488~~533)		~~(1,597)~~		~~(2,105)~~
Amortization of actuarial loss	—4		—2		2		~~464~~
Net periodic benefit cost	$	(64)	$	72	$	(190)	$	805
Net periodic benefit cost (income)	$	(252)	$	(61)
Settlement loss	—		~~186~~385		~~385~~		~~25,701~~
Total employer benefit plan cost	$	(64252)	$	~~258~~324	$	~~195~~	$	~~26,506~~

The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs in operating expenses and the non-service cost components of net periodic benefit cost in other income.

1211. ~~Restructuring~~RESTRUCTURING

During the third quarter of 2020, the Company’s Performance Materials segment undertook actions to discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America and consolidated certain product lines and began exiting underperforming facilities in Europe. These restructuring activities, which are projected to conclude in ~~the first half of~~ 2021, are expected to reduce operating costs, increase production efficiency, and enhance the Company’s flexibility by better aligning its manufacturing operations with the segment's customer base. Accordingly, the Company expects to record total pre-tax expenses of approximately $1718.0 ~~to $20.0~~ million, primarily related to severance and employee retention expenses, in connection with these restructuring activities, of which approximately $1112.~~5 to $14.5~~3 million ~~are~~is expected to result in cash expenditures. The Company incurred ~~non-cash~~a ~~expenditures~~total of $16.7 million through March 31, 2021, of which approximately $5.57 million were non-cash expenditures, which consisted of fully depreciating and/or amortizing long-lived assets and, to a lesser extent, writing-off inventory.

InThe ~~North America, the~~ Company ~~decided~~undertook actions to ~~shut~~consolidate ~~down~~global ~~two~~production ~~underperforming~~facilities ~~nonwoven~~for ~~manufacturing~~sealing ~~carded~~& ~~lines~~advanced ~~and~~solutions ~~ancillary~~products ~~equipment,~~from ~~originally~~five ~~acquired~~facilities into ~~2018~~four, ~~that~~which ~~served~~would ~~commercial~~have ~~and~~resulted ~~residential~~in ~~HVAC~~the ~~markets~~closure ~~with~~a ~~low~~facility toin ~~medium~~Germany. ~~efficiency~~In ~~air~~the ~~filtration~~first ~~media.~~quarter ~~The~~of 2021, the Company ~~experienced~~entered ~~lower~~into ~~demand~~an asagreement ato ~~result~~sell ofthe ~~COVID-19~~German facility, which ~~accelerated~~closed aon ~~market~~March ~~shift~~11, ~~from~~2021. ~~lower~~The ~~efficiency~~Company ~~air~~agreed ~~filtration~~to ~~media~~pay $1.8 million (€1.5 million) to ~~higher~~the ~~performance~~buyer ~~rated~~and ~~air~~provide ~~filtration~~$2.2 million ~~media~~(€1.9 million) Asin aadditional ~~result~~funding, ~~the~~net ~~Company~~of ~~recorded~~cash aand ~~pre-tax~~certain net working capital adjustments, to cover pension and restructuring ~~charge~~liabilities ofrecorded $5in 2020.~~4 million,~~ ~~primarily~~As ~~due~~a toresult ~~accelerated~~of ~~depreciation~~the sale of ~~property~~the business, ~~plant~~the ~~and~~Company ~~equipment~~recorded ~~and~~a ~~other~~pre-tax ~~intangible~~loss ~~assets~~of $0.7 million. The ~~Company~~final ~~does~~consideration ~~not~~and ~~anticipate~~loss ~~incurring~~are ~~additional~~subject ~~restructuring~~to ~~expenses~~a ~~related~~working tocapital ~~the~~adjustment ~~closure~~expected ofto ~~these~~be ~~manufacturing~~settled ~~Carded~~in ~~lines~~2022.

The Company undertook actions to consolidate global production facilities in the Sealing & Advanced Solutions business from five facilities to four, resulting in the closure of an underperforming facility in Germany. In the first quarter of ~~2020~~2021, the Company ~~performed~~recorded ~~an impairment analysis of the long~~pre-~~lived~~tax ~~assets~~restructuring ~~and~~charges ~~determined that the carrying value~~ of ~~the assets did not exceed their fair value and recorded an impairment charge of~~ $120.48 million ~~(see~~primarily ~~Note~~consisting ~~5, “Impairments~~ of ~~Goodwill~~severance ~~and~~costs Other Long-Lived Assets” for additional information). The closure is expected to be completed in the first quarter of 2021. In addition, the Company decided to close a small volume membrane filtration production facility in the Netherlands. In the fourth quarter of 2019, the Company performed an impairment of the long-lived assets for this facility and ~~recorded~~legal ~~an impairment charge of $1~~expenses.~~2 million. The assets have been fully depreciated through September 30, 2020. The closure is expected to be completed in the second quarter of 2021.~~

As a result of the two facility closures in Europe, the Company recorded pre-tax restructuring charges of $9.6 million consisting of severance costs, legal expenses, and inventory write-offs and anticipates it could incur an additional $2.0 million to $5.0 million in restructuring expenses, primarily related to severance costs from these facility closures. 15

The following table summarizes the total restructuring charges by cost type:

In Thousands	Severance and Related Expenses		Facility Exit and Asset Write-Off Expenses		Total
In thousands	Severance and Related Expenses		Legal and Administrative Expenses		Facility Exit and Asset Write-Off Expenses
Expense incurred during quarter ended:
September 30, 2020	$	9,484	$	5,500	$	14,984
March 31, 2021	$	777	$	—	$	—
Total pre-tax expense incurred	$	~~9,484~~777	$	~~5,500~~—	$	~~14,984~~—

~~For~~The ~~the~~following ~~three~~table ~~and~~summarizes ~~nine-month~~the ~~periods~~change ~~ended September 30, 2020, $15.0 million was included~~ in ~~restructuring expenses on~~ the ~~Company’s~~accrued ~~Condensed~~liability ~~Consolidated~~balance ~~Statements~~for ~~of Operations with $14.8 million recorded in~~ the ~~Performance~~restructuring ~~Materials segment and $0.2 million recorded within Corporate Office expenses.~~actions:

There were cash outflows of $0.2 million for the restructuring program for the three and nine months ended September 30, 2020.


In thousands	Total
Balance as of December 31, 2020	$	9,431
Pre-tax restructuring expenses, excluding asset write-off expenses	777
Cash paid	(821)
Accrued liability included with the sale of the German facility	(7,311)
Currency translation adjustments	(34)
Balance as of March 31, 2021	$	2,042

The ~~following~~above ~~table summarizes the~~ accrued liability ~~balance~~balances bywere ~~cost~~included ~~type~~in ~~for~~Restructuring liabilities on the ~~restructuring~~Company’s ~~actions:~~Condensed Consolidated Balance Sheets.

In Thousands	Total
Balance as of December 31, 2019	$	—
Pre-tax restructuring expenses, excluding asset write-off expenses	9,485
Cash paid	(203)
Currency translation adjustments	(119)
Balance as of September 30, 2020	$	9,163

12. INCOME TAXES

~~The~~For ~~above~~the ~~accrued~~three-month ~~liability~~period ~~balances~~ended ~~were~~March 31, ~~included~~2021, inthe ~~Other~~Company's ~~accrued~~effective ~~liabilities~~tax rate was 35.7% compared to an effective tax rate of 3.5% for the three-month period ended March 31, 2020. For the three-month period ended March 31, 2021, the rate was negatively impacted by $0.5 million due to a change in assertion on unremitted foreign earnings, $0.4 million related to foreign earnings taxed at higher rates, and $0.2 million of valuation allowance activity. For the three-month period ended March 31, 2020, the Company’ had a pre-tax loss primarily resulting from an impairment charge of $61.1 million. The impairment charge significantly impacted the Company's ~~Condensed~~effective ~~Consolidated~~tax ~~Balance~~rate ~~Sheets~~as $48.7 million of the impairment charge related to non-deductible goodwill, resulting in a lower effective tax rate for the first quarter of 2020 when the Company was in a pre-tax loss position. Additionally, the effective rate, for the first quarter of 2020, was negatively impacted by valuation allowance activity of $0.3 million.

13The Company and its subsidiaries file a consolidated federal income tax return, as well as returns required by various state and foreign jurisdictions. In ~~Income~~the ~~Taxes~~normal course of business, the Company is subject to examination by taxing authorities, including such major jurisdictions as the United States, Canada, China, France, Germany, Hong Kong, India, the Netherlands, and the United Kingdom. With few exceptions, the Company is no longer subject to U.S. federal examinations for years before 2017, state and local examinations for years before 2016, and non-U.S. income tax examinations for years before 2013.

~~For~~The ~~the three-month period ended September 30, 2020, the~~ Company'’s effective tax ~~rate~~rates ~~was~~in ~~16.6%~~future ~~compared~~periods tocould anbe ~~effective~~affected ~~tax~~by ~~rate~~an ofincrease ~~35.1%~~or ~~for~~decrease ~~the~~in ~~three-month~~earnings ~~period~~in ~~ended~~countries ~~September~~where ~~30,~~tax ~~2019. For~~rates differ from the ~~three~~United ~~months~~States ~~ended~~federal ~~September~~tax 30rate, ~~2020,~~ the ~~rate~~relative ~~was~~impact ~~negatively~~of ~~impacted~~permanent bytax ~~valuation~~adjustments ~~allowance~~on ~~activity~~earnings offrom ~~$2.0 million~~domestic operations, ~~offset~~changes byin anet ~~state~~deferred tax ~~benefit~~asset ofvaluation ~~$0.8 million.~~allowances, ~~resulting~~including invaluation aallowances ~~lower~~on ~~effective~~loss ~~tax~~carryforwards ~~rate when~~ in awhich ~~pre-~~no tax ~~loss~~benefit ~~position. For~~can ~~the~~be ~~three~~recognized, ~~months~~stock ~~ended~~vesting, ~~September~~pension ~~30,~~plan ~~2019~~terminations, the ~~effective~~completion ~~tax~~of ~~rate~~acquisitions ~~was~~or ~~negatively~~divestitures, ~~impacted~~changes byin ~~losses~~tax inrates ~~jurisdictions~~or intax ~~which~~laws noand the completion of ongoing tax ~~benefit~~planning ~~can~~strategies beand ~~recognized~~audits.

~~For the nine-month period ended September 30, 2020, the Company's effective tax rate was 6~~13.3% ~~compared~~EARNINGS to(LOSS) anPER effective tax rate of 97.0% for the nine-month period ended September 30, 2019. For the nine months ended September 30, 2020, the Company had a pre-tax loss primarily resulting from impairment charges of $61.1 million. The impairment charges significantly impacted the Company's effective tax rate because $48.7 million of the impairment charges related to non-deductible goodwill, resulting in a low effective tax rate for the nine months ended September 30, 2020 when in a pre-tax loss position. Additionally, the effective rate was negatively impacted by valuation allowance activity of $2.7 million. For the nine-month period ended September 30, 2019, the Company recorded a tax benefit of $5.5 million primarily driven by $10.5 million of tax benefit related to the pension plan settlement. Excluding the tax benefit of the pension plan settlement, the Company's effective tax rate for the nine months ended September 30, 2019 was 25.2%. This was negatively impacted by $1.8 million from losses in jurisdictions in which no tax benefit can be recognized, partially offset by the Company's geographical mix of earnings.SHARE

~~The~~For ~~Company~~the ~~and~~three-month ~~its~~periods ~~subsidiaries~~ended ~~file~~March 31, a2021 ~~consolidated~~and ~~federal income tax return~~2020, asbasic ~~well~~earnings asper ~~returns~~share ~~required~~was computed by ~~various~~dividing ~~state~~net ~~and~~income ~~foreign~~(loss) ~~jurisdictions. In~~by the ~~normal~~weighted ~~course~~average number of ~~business,~~shares of common stock outstanding during the ~~Company~~period. isUnexercised ~~subject~~stock tooptions ~~examination~~and byunvested ~~taxing~~restricted ~~authorities~~share awards, including ~~such~~awards ~~major~~subject ~~jurisdictions~~to ascertain performance criteria, are excluded from the ~~United~~basic ~~States,~~earnings ~~Canada,~~per ~~China,~~share ~~France~~calculation, ~~Germany,~~but ~~Hong~~are ~~Kong,~~included ~~India,~~in the ~~Netherlands,~~diluted ~~and~~earnings per share calculation using the ~~United~~treasury ~~Kingdom. With~~stock ~~few~~method ~~exceptions,~~in ~~the~~periods ~~Company~~of isnet noincome, ~~longer~~as ~~subject~~long toas ~~U.S.~~their ~~federal~~effect ~~examinations~~is ~~for~~not ~~years~~antidilutive. ~~before~~All ~~2016,~~potential ~~state~~shares ~~and~~of ~~local~~common ~~examinations~~stock ~~for~~from ~~years~~unexercised ~~before~~stock ~~2015,~~options and ~~non-U.S.~~unvested ~~income~~restricted ~~tax~~share ~~examinations~~awards ~~for~~are ~~years~~antidilutive ~~before~~in ~~2013~~periods of net loss.

carryforwards in which no tax benefit can be recognized, stock vesting, pension plan terminations, the completion of acquisitions or divestitures, changes in tax rates or tax laws and the completion of ongoing tax planning strategies and audits.

On July 20, 2020, the U.S. Treasury Department and IRS released T.D. 9902 final regulations for publication in the Federal Register related to the global intangible low-taxed income (“GILTI”) high-tax exception. The final regulations largely adopt the framework of the 2019 proposed regulations, with certain key departures. The most significant departures are that an election to apply the GILTI high-tax exception may be made annually instead of once every five years, and that the calculation is made with respect to each “tested unit” of a controlled foreign corporation, rather than on a qualified business unit by qualified business unit basis. The company has evaluated the final regulations and included the impacts of these changes in the Company’s third quarter financial statements.

14. (Loss) Earnings Per Share

For the three-month and nine-month periods ended September 30, 2020 and 2019, basic earnings per share were computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during the period. Unexercised stock options and unvested restricted shares are excluded from this calculation but are included in the diluted earnings per share calculation using the treasury stock method as long as their effect is not antidilutive.

The following table provides a reconciliation of weighted-average shares used to determine basic and diluted earnings per share:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021		~~2019~~2020		~~2020~~	~~2019~~
Basic weighted-average common shares outstanding	17,384		17,270		17,364	17,264
Net income (loss)	$	5,094	$	(56,421)
Effect of dilutive options and restricted stock awards	—		60		—	—
Basic weighted-average common shares outstanding	17,545		17,336
Diluted weighted-average common shares outstanding	17,384		17,330		17,364	17,264
Effect of dilutive options and restricted stock awards	343		—
Diluted weighted-average common shares outstanding	17,888		17,336
Earnings (loss) per share:
Basic	$	0.29	$	(3.25)
Diluted	$	0.28	$	(3.25)

~~Dilutive~~For ~~stock~~the ~~awards~~three-month ~~totaling~~periods 77ended March 31,~~707~~ 2021 and 282020,~~085~~ ~~shares~~there ofwere ~~Common~~129,209 ~~Stock~~and ~~were~~736,141 shares excluded from the computation of diluted earnings per share, ~~computation~~respectively. ~~for~~For the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2020~~2021, asthese ~~the~~included ~~Company~~antidilutive ~~reported~~stock aoptions, ~~net~~antidilutive ~~loss~~unvested ~~during~~restricted ~~those~~share ~~periods~~awards ~~and,~~for ~~therefore,~~which ~~the~~requisite ~~effect~~service ofhas ~~including~~not ~~these~~yet ~~options~~been ~~would~~rendered, beand antidilutive unvested performance share awards with contingently issuable shares. ~~Dilutive~~For ~~stock~~the ~~options~~three-month ~~totaling~~period 53ended March 31,~~892~~ ~~shares~~2020, ofall ~~Common~~outstanding, ~~Stock~~unvested awards were excluded from the calculation of diluted earnings per share ~~computation~~because ~~for~~ the ~~nine-month~~Company had net loss during the period. ~~ended~~These ~~September 30,~~included ~~2019~~all stock options, as ~~the~~well ~~Company~~as ~~reported~~unvested arestricted ~~net~~share ~~loss~~awards ~~during~~for ~~that~~which ~~period~~requisite ~~and,~~service ~~therefore~~has not yet been rendered, ~~the~~and ~~effect~~certain ofunvested ~~including~~performance ~~these~~share ~~options~~awards ~~would~~with becontingently ~~antidilutive~~issuable shares.

~~For~~A ~~each~~description of the ~~three-month~~Company's ~~periods~~stock ~~ended~~options ~~September 30,~~and ~~2020~~restricted ~~and~~share ~~2019,~~awards ~~stock~~is ~~options~~included ~~for~~in ~~658~~Note,~~654~~ ~~shares~~13, ~~and~~"Equity ~~584~~Compensation Plans",~~725~~ ~~shares~~in ofthe ~~Common~~Notes ~~Stock~~to ~~were~~Consolidated ~~not~~Financial ~~considered~~Statements in ~~computing~~Part ~~diluted~~II, ~~earnings~~Item ~~per~~8 ~~common~~- ~~share~~Financial ~~because~~Statements ~~they~~and ~~were~~Supplemental ~~antidilutive.~~Data of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

For each of the nine-month periods ended September 30, 2020 and 2019, stock options for 722,006 shares and 542,669 shares of Common Stock were not considered in computing diluted earnings per common share because they were antidilutive14. SEGMENT INFORMATION

15The Company is organized based on the nature of its products and is composed of three reportable segments each overseen by a segment manager. ~~Segment~~These ~~Information~~segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker ("CODM"), reviews operating results for the purpose of allocating resources and assessing performance. The Company has not aggregated operating segments for purposes of identifying reportable segments. As of March 31, 2021, the operating segments were Performance Materials, Technical Nonwovens, and Thermal Acoustical Solutions.

As of September 30, 2020, the Company’s reportable segments were Performance Materials, Technical Nonwovens, and Thermal Acoustical Solutions.

Performance Materials Segment

The Performance Materials segment ~~includes~~is a worldwide leader in delivering innovative specialty filtration, ~~media~~sealing, and advanced materials solutions ~~primarily~~for demanding applications. Specifically, the segment’s offerings include: (1) specialty filtration media solutions for a variety of applications in the global air and liquid filtration market such as personal protective equipment (“PPE”), ~~fluid~~indoor ~~power~~air quality, life ~~science~~sciences, transportation, and industrial applications; (~~“Filtration”~~2), gasket materials and parts for a broad range of applications in the global sealing market for parts in large/heavy duty equipment for commercial, industrial, agriculture, and ~~gasket~~construction ~~solutions~~end markets; and, ~~thermal~~(3) advanced materials that include highly engineered insulation solutions for cryogenic storage of liquid hydrogen/nitrogen, energy storage, and ~~other~~advanced ~~engineered~~composite ~~products~~materials ~~(“Sealing~~for aerospace and ~~Advanced~~defense ~~Solutions”)~~applications.

Filtration products include LydAir® MG (Micro-Glass) Air Filtration Media, LydAir® MB (Melt Blown) Air Filtration Media, LydAir® SC (Synthetic Composite) Air Filtration Media, and Arioso® Membrane Composite Media. These high efficiency specialty filtration products constitute the critical filtration media component of clean-air systems for applications in Indoor Air Quality (commercial, residential, and specialized HVAC applications such as cleanrooms and hospital environments), respiratory Personal Protective Equipment (N95 respirators and surgical masks), power generation, and specialty industrial process applications. Lydall has leveraged its extensive technical expertise and applications knowledge into a suite of media products covering the vast liquid filtration landscape across the transportation and industrial fields. The LyPore® Liquid Filtration Media series address a variety of application needs in fluid power including hydraulic filters, air-water and air-oil

coalescing, industrial fluid processes and diesel fuel filtration. LyPore® media and Solupor® ultra-high molecular weight polyethylene membranes also serve critical liquid filtration/separation applications such as biopharmaceutical pre-filtration and clarification, lateral flow diagnostic and analytical testing, potable water filtration and high purity process filtration such as those found in food and beverage and medical applications.

Sealing and Advanced Solutions products include nonwoven specialty engineered materials for a multitude of applications. Interface fiber-reinforced gasket materials serve the heavy-duty diesel, automobile, small engine, transmission and compressor markets. These products handle demanding sealing challenges with a diverse range of metallic, non-metallic, rubber-coated and laminate materials that comprise the extensive Sealing materials portfolio. Interface Engineered Components are ready-to-use soft and hard gasket parts sold directly to OEMs and aftermarket applications. An example is Select-a-Seal® rubber-edged composite (REC) technology that provides robust sealing, compression, adhesion, and shear strength for driveline applications. Advanced Solutions’ nonwoven veils, papers, and specialty composites for the building products, appliance, energy, and industrial markets include Manniglas® Thermal Insulation Papers, and Lytherm® Insulation Media for high temperature technology applications. The Company's Cryotherm® Super-Insulating Media, CRS-Wrap® Super-Insulating Media and Cryo-Lite® Cryogenic Insulation products are industry standards for state-of-the-art cryogenic insulation designs used by manufacturers of cryogenic equipment for liquid gas storage, piping, and transportation. Additional specialty composite materials include specialty fiber calendar bowl products to service the printing and textile industries and press pad materials for industrial lamination processes.

Technical Nonwovens Segment

The Technical Nonwovens segment ~~primarily~~is ~~produces~~a ~~needle~~global ~~punch~~leader in engineered nonwoven ~~solutions~~materials for aindustrial ~~multitude~~filtration ofapplications ~~industries~~ and ~~applications. Products~~advanced ~~are~~materials ~~manufactured~~products. ~~and~~The ~~sold~~primary ~~globally~~industrial ~~under~~filtration ~~the~~markets ~~leading~~include ~~brands~~air ofpollution ~~Lydall~~and ~~Industrial~~emissions ~~Filtration~~control, ~~Southern~~power ~~Felt~~generation, ~~Gutsche,~~ and ~~Texel~~liquid filtration solutions. ~~Industrial~~ ~~Filtration~~Advanced materials products include ~~nonwoven~~geotextile ~~rolled-good~~felts ~~felt~~for ~~media~~separation, ~~and~~reinforcement, ~~filter~~filtration, ~~bags~~drainage, ~~used~~and ~~primarily~~protection; inthermal ~~industrial air~~ and ~~liquid~~acoustic ~~filtration~~insulation ~~applications.~~for ~~Nonwoven~~transportation ~~filter~~and ~~media~~automotive isapplications, anand ~~effective~~highly ~~solution~~customized toand ~~satisfy~~technical ~~increasing~~solutions ~~emission~~for ~~control~~acoustic ~~regulations~~media, ~~in a wide range of industries~~medical, ~~including~~building ~~power,~~& ~~cement~~construction, ~~steel,~~and ~~asphalt,~~safety ~~incineration,~~apparel. ~~mining~~Specifically, ~~food,~~the ~~and~~segment’s ~~pharmaceutical.~~offerings ~~Advanced~~include ~~Materials~~needle ~~products~~punched ~~include~~ nonwoven ~~rolled-good media used in commercial applications~~ and ~~predominantly~~highly ~~serves~~engineered ~~the~~felts ~~geosynthetics,~~made ~~automotive,~~from ~~industrial,~~a ~~medical,~~variety ~~and~~of ~~safety~~synthetic ~~apparel markets~~fibers. Automotive media is provided to Tier ~~I/II~~1 and Tier 2 suppliers as well as the Company's Thermal Acoustical Solutions segment.

Technical Nonwovens segment products include air and liquid filtration media sold under the brand names Fiberlox® high performance filtration felts, Checkstatic™ conductive filtration felts, Microfelt® high efficiency filtration felts, Pleatlox® pleatable filtration felts, Ultratech™ PTFE filtration felts, Powertech® and Powerlox® power generation filtration felts, Microcap® high efficiency liquid filtration felts, Duotech membrane composite filtration felts, along with the porotex® family of high temperature filtration felts including microvel® and optivel® products. Technical Nonwovens Advanced Materials products are sold under the brand names Thermofit® thermo-formable products, Ecoduo® recycled content materials, Duotex® floor protection products, and Versaflex® composite molding materials. Technical Nonwovens also offers extensive finishing and coating capabilities which provide custom engineered properties tailored to meet the most demanding applications. The business leverages a wide range of fiber types and extensive technical capabilities to provide products that meet customers’ needs across a variety of applications providing both high performance and durability.17

Thermal Acoustical Solutions Segment

The Thermal Acoustical Solutions segment ~~offers~~designs, manufactures, and distributes a full range of innovative engineered products tailored for the transportation and industrial sectors. toThese ~~thermally~~products shield sensitive components from high ~~heat~~temperature environments, ~~improve exhaust gas treatment and lower harmful emissions as well as~~ assist in the reduction of ~~noise,~~harmful ~~vibration,~~emissions and ~~harshness~~reduce ~~(NVH)~~noise and vibration. Within the transportation sector, the Company’'s products are found in the interior ~~(dash insulators~~, ~~cabin flooring),~~ underbody ~~(wheel well~~, ~~aerodynamic belly pan, fuel tank, exhaust, tunnel, spare tire)~~ and ~~under~~underhood ~~hood (engine compartment, outer dash, powertrain, catalytic converter, turbo charger, manifolds)~~ of cars, trucks, SUVs, heavy duty trucks, and recreational vehicles.

~~Thermal~~Segment Acoustical Solutions segment products offer thermal and acoustical insulating solutions comprised of organic and inorganic fiber composites that provide weight reduction, superior noise suppression and increased durability over conventional designs, as well as products that efficiently combine multiple layers of metal and thermal - acoustical insulation media to provide an engineered shielding solution for an array of application areas. Lydall’s dBCore® is a lightweight acoustical composite that emphasizes absorption principles over heavy-mass type systems. Lydall’s dBLyte® is a high-performance acoustical barrier with sound absorption and blocking properties and can be used throughout a vehicle’s interior to minimize intrusive noise from an engine compartment and road. Lydall’s ZeroClearance® is an innovative thermal solution that utilizes an adhesive backing for attachment and is used to protect vehicle components from excessive heat. Lydall’s flux® product family includes several patented or IP-rich products that address applications which include: Direct Exhaust Mount heat shields, which are assembled to high temperature components like catalytic converters, turbochargers or exhaust manifolds using Results

28Net sales by business segment is as follows:

aluminized and stainless steel and high performance and high temperature heat insulating materials; Powertrain heat shields that absorb noise at the source and do not contribute to the engine's noise budget; and durable, thermally robust solutions for temperature sensitive plastic components such as fuel tanks that are in proximity to high temperature heat sources.


	For the Three Months Ended March 31,
In thousands	2021		2020
Performance Materials Segment (1),(2):
Filtration Products	$	34,346	$	25,887
Sealing and Advanced Solutions Products	44,987		39,333
Performance Materials Segment net sales	79,333		65,220

Technical Nonwovens Segment:
Industrial Filtration Products	36,401		31,369
Advanced Materials Products (2)	25,274		26,034
Technical Nonwovens Segment net sales	61,675		57,403

Thermal Acoustical Solutions Segment:
Parts	86,494		77,321
Tooling	4,550		6,440
Thermal Acoustical Solutions Segment net sales	91,044		83,761





Eliminations and Other (2)	(4,953)		(5,857)
Consolidated Net Sales	$	227,099	$	200,527

~~The~~Operating ~~tables below present net sales and operating~~ income (loss) by ~~segment~~business ~~for the three-month and nine-month periods ended September 30, 2020 and 2019, and also a reconciliation of total~~ segment ~~net~~is ~~sales~~as ~~and operating income to total consolidated net sales and operating income.~~follows:

Consolidated net sales by segment:


	For the Three Months Ended March 31,
In thousands	2021		2020
Performance Materials (1),(3)	$	15,296	$	(56,941)
Technical Nonwovens (4)	5,104		3,813
Thermal Acoustical Solutions	1,674		5,628

Corporate Office Expenses	(9,935)		(8,068)
Consolidated Operating Income (Loss)	$	12,139	$	(55,568)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
In thousands	2020		2019		2020		2019
Performance Materials Segment:
Filtration	$	30,899	$	22,427	$	86,422	$	71,093
Sealing and Advanced Solutions	36,918		37,573		105,088		118,589
Performance Materials Segment net sales	67,817		60,000		191,510		189,682
Technical Nonwovens Segment (1):
Industrial Filtration	29,643		32,935		90,425		114,005
Advanced Materials (2)	28,866		30,977		77,494		84,591
Technical Nonwovens Segment net sales	58,509		63,912		167,919		198,596
Thermal Acoustical Solutions Segment:
Parts	79,687		80,309		189,456		250,591
Tooling	5,836		7,617		17,276		24,920
Thermal Acoustical Solutions Segment net sales	85,523		87,926		206,732		275,511
Eliminations and Other (2)	(4,764)		(6,564)		(12,389)		(19,679)
Consolidated Net Sales	$	207,085	$	205,274	$	553,772	$	644,110

(1)The Performance Materials segment includes the results of the facility in German that the Company sold on March 11, 2021.

~~Operating income~~ (~~loss~~2)Included byin the Performance Materials segment, Technical Nonwovens segment, and Eliminations and Other is the following:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
In thousands	2020		2019		2020		2019
Performance Materials (3)	$	(6,759)	$	712	$	(58,257)	$	5,474
Technical Nonwovens (1),(2),(4)	5,061		7,165		15,558		19,743
Thermal Acoustical Solutions	1,174		5,022		517		21,870
Corporate Office Expenses	(8,757)		(5,452)		(24,413)		(17,411)
Consolidated Operating Income	$	(9,281)	$	7,447	$	(66,595)	$	29,676

•Technical Nonwovens segment intercompany sales of $3.9 million and $5.0 million to the Thermal Acoustical Solutions segment for the three-month periods ended March 31, 2021 and 2020, respectively.

~~(1)The~~•Performance ~~Technical~~Materials ~~Nonwovens~~ segment ~~includes~~intercompany sales of $1.0 million and $0.9 million to the ~~results~~Thermal ofAcoustical ~~Geosol~~Solutions ~~through~~segment for the ~~date~~three-month ofperiods ~~disposition~~ended ofMarch 31, ~~May~~2021 9and 2020, ~~2019~~respectively.

(23)Included in the ~~Technical~~operating ~~Nonwovens~~results ~~segment~~within ~~and~~the ~~Eliminations~~Performance ~~and~~Materials ~~Other~~segment isare the following:

•$361.91 million ~~and $4.3 million~~ of ~~intercompany~~impairment ~~sales~~charges related to ~~the~~goodwill ~~Thermal~~and ~~Acoustical~~other ~~Solutions~~long-lived ~~segment~~assets for the three-month ~~periods~~period ended ~~September~~March 3031, 2020 ~~and 2019, respectively~~.

•$103.2 0 million and $134.60 million of ~~intercompany~~intangible ~~sales~~assets toamortization ~~the Thermal Acoustical Solutions segment~~ for the ~~nine~~three-month periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020, respectively.

~~(3)Included in the Performance Materials segment is the following:~~18

•$61.1 million of impairment charges related to goodwill and other long-lived assets for the nine-month period ended September 30, 2020.

•$14.8 million restructuring charges for the three and nine-month periods ending September 30, 2020.

•$4.0 million and $4.1 million of intangible assets amortization for the three-month periods ended September 30, 2020 and 2019, respectively.

•$11.9 million and $12.2 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively.

(4)Included in the Technical Nonwovens segment is the following:

• $1.21 million and $1.32 million of intangible assets amortization for the three-month periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020, respectively.

~~•$3~~15.~~5 million~~ ~~and~~COMMITMENTS ~~$3.8 million~~AND ~~of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively.~~CONTINGENCIES

16. Commitments and Contingencies

Environmental Remediation

In the fourth quarter of 2016, as part of a groundwater discharging permitting process, water samples collected from wells and process water basins at the Company’s Rochester New Hampshire manufacturing facility, within the Performance Materials segment, showed concentrations of Per and Polyfluorinated Substances (“PFAS”) in excess of state ambient groundwater quality standards. In January 2017, the Company received a notification from the State of New Hampshire Department of Environmental Services (“NHDES”) naming Lydall Performance Materials, Inc. a responsible party with respect to the discharge of regulated contaminants and, as such, is required to take action to investigate and remediate the impacts in accordance with standards established by the NHDES. The Company conducted a site investigation, the scope of which was reviewed by the NHDES, in order to assess the extent of potential soil and groundwater contamination and develop a remedial action. Based on input received from NHDES in March 2017 with regard to the scope of the site investigation, the Company recorded $0.2 million of expense. In 2018, the Company received a response from the NHDES to the site investigation report outlining proposed remedial actions. The Company recorded an additional $0.1 million of expense in 2018 associated with the expected costs to remediate the impacts of the discharge of regulated contaminants in accordance with standards established by the NHDES. During 2018, the environmental liability was fully reduced reflecting payments made to vendors~~, resulting in no balance at December 31, 2018~~. Additionally, the Company incurred $0.2 million of capital expenditures in 2018, in relation to the lining of the Company's fresh water lagoons. ~~The~~ ~~site~~During ~~investigation~~a ~~and~~building expansion in 2020, additional areas of concern were identified during excavation activities. An interim remedial action plan ~~are~~that ~~ongoing~~includes additional site characterization activities was submitted to the NHDES in March 2021. No comments from the NHDES have been received. As of March 31, 2021, the Company has no amounts accrued for these environmental remediation activities. The Company cannot be sure that costs will not exceed the current estimates until this matter is closed with the NHDES, nor that any future corrective action at this location would not have a material effect on the Company’s financial condition, results of operations, or cash flows.

In December 2018, the New York State Department of Environmental Conservation (“NYDEC”) informed the Company that the newly acquired Interface site located at Hoosick Falls, NY will be the subject of an investigation ininto to the possibility of it being an inactive hazardous disposable waste site. The letter specifically references PFAS that have been detected in a nearby water supply, soil and/or surface water. Notably, the PFAS contamination has been identified in the Hoosick Falls area for some time and other large manufacturers in the area have previously been identified as a source. The NYDEC approved a site characterization plan in December 2019. ~~The~~ ~~Company~~Additional ~~recorded~~site ~~expense~~characterization ofactivities ~~$0.3~~were ~~million~~completed in the fourth quarter of ~~2019~~2020. asResults ~~a result~~ of the site characterization ~~plan~~will ~~preparation~~be ~~and~~submitted ~~site~~in ~~characterization~~the ~~activities. Additional~~second ~~site~~quarter ~~characterization~~of ~~activities~~2021. ~~are~~As ~~planned~~of ~~for~~March 31, 2021, the ~~fourth~~Company ~~quarter~~has ofless ~~2020~~than $0.1 million accrued for these environmental remediation activities. The Company does not know the scope or extent of ~~its~~any additional future obligations, if any, that may arise from the site investigation and therefore is unable to estimate the cost of any corrective action. Accordingly, the Company cannot assure that the costs of any future corrective at this location would not have a material effect on the Company's financial condition, results of operations, or cash flows.

Provisions for such matters are charged to expense when it is probable that a liability has been incurred and reasonable estimates of the liability can be made. Estimates of environmental liabilities are based on a variety of matters, including, but not limited to, the stage of investigation, the stage of the remedial design, evaluation of existing remediation technologies, and presently enacted laws and regulations. In future periods, a number of factors could significantly impact any estimates of environmental remediation costs.

30Asset Retirement Obligations

17The Company accounts for asset retirement obligations by recognizing the fair value of the related liability for an asset retirement obligation in the period in which it is incurred, if a reasonable estimate of fair value can be determined. ~~Stockholders'~~At March 31, ~~Equity~~2021, the Company had combined asset retirement obligations of $0.8 million, which are associated with the estimated costs to remove/remediate asbestos materials from various locations. The initial measurement of the asset retirement obligations was recorded as a liability at its fair value, with an offsetting asset retirement cost recorded as an increase to the related property and ~~Accumulated~~equipment, ~~Other~~which ~~Comprehensive~~is ~~Income~~being depreciated using a systematic and rational method similar to the approach used for the associated property and equipment. The Company also has an asset retirement obligation with an offset to goodwill as the estimated costs were derived from known required remediation obligations as of the acquisition date of Interface Performance Materials on August 31, 2018. The Company has been performing ongoing remediation activity, which offsets the liability associated with the respective asset retirement obligations.

~~Changes in stockholders' equity for the three and nine-month periods ended September 30, 2020 were as follows:~~19

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
In thousands	2020		2019		2020		2019
Beginning Balance	$	253,262	$	387,105	$	318,420	$	369,275
Comprehensive (loss) income, net of tax	(5,477)		(5,849)		(72,474)		10,773
Stock repurchased	(23)		(7)		(31)		(62)
Stock issued under employee plans	—		5		4		5
Stock-based compensation expense	551		417		2,006		1,611
Stock issued to directors	—		—		388		252
Adoption of ASC 606 (1)	—		—		—		(183)
Ending Balance	$	248,313	$	381,671	$	248,313	$	381,671

16. STOCKHOLDERS' EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

~~The~~Changes ~~components~~in ofstockholders' ~~accumulated~~equity ~~other~~for ~~comprehensive~~the ~~(loss)~~three-month ~~income~~periods ~~are~~ended ~~shown~~March 31, ~~below~~2021 and 2020 were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In Thousands	2020		2019		2020		2019
In thousands	2021		2020
Foreign currency translation:
Beginning Balance	$	257,696	$	318,420
Beginning balance	$	(22,833)	$	(16,128)	$	(18,022)	$	(18,458)
Comprehensive income (loss)	5,463		(65,601)
Net gain (loss) on foreign currency translation	8,245		(8,726)		3,434		(6,396)
Stock repurchased	(201)		(8)
Other comprehensive income (loss), net of tax	8,245		(8,726)		3,434		(6,396)
Stock issued under employee plans	642		31
Ending balance	(14,588)		(24,854)		(14,588)		(24,854)
Stock-based compensation expense	950		735
Pension and other postretirement benefit plans:
Ending Balance	$	264,550	$	253,577
Beginning balance	(2,749)		(2,879)		(3,080)		(22,253)
Amounts reclassified from accumulated other comprehensive (loss) income (2)	(49)		21		282		19,395
Other comprehensive (loss) income, net of tax	(49)		21		282		19,395
Ending balance	(2,798)		(2,858)		(2,798)		(2,858)
Unrealized gain/(loss) on derivative instruments:
Beginning balance	(5,116)		(4,000)		(4,877)		(1,974)
Net loss on derivative instruments (3)	(2,669)		(148)		(3,306)		(2,174)
Amounts reclassified from accumulated other comprehensive income (4)	706		—		1,104		—
Other comprehensive loss, net of tax	(1,963)		(148)		(2,202)		(2,174)
Ending balance	(7,079)		(4,148)		(7,079)		(4,148)
Total accumulated other comprehensive loss	$	(24,465)	$	(31,860)	$	(24,465)	$	(31,860)

~~(1)~~The ~~During~~components ~~the~~of ~~three-month~~accumulated ~~period~~other ~~ended~~comprehensive ~~March~~income ~~31,~~(loss) ~~2019,~~are ~~the~~shown ~~Company recorded an adjustment reducing retained earnings and contract assets by $0.2 million to correct an error in the adoption of ASC 606.~~below:


	For the Three Months Ended March 31,
In thousands	2021		2020
Foreign currency translation:
Beginning balance	$	(3,514)	$	(18,022)
Net gain (loss) on foreign currency translation	(4,048)		(9,957)
Amounts reclassified from accumulated other comprehensive income (loss) (1)	1,034		—
Other comprehensive income (loss), net of tax	(3,014)		(9,957)
Ending balance	(6,528)		(27,979)

Pension and other postretirement benefit plans:
Beginning balance	(5,608)		(3,080)
Amounts reclassified from accumulated other comprehensive income (loss) (2)	365		331
Other comprehensive income (loss), net of tax	365		331
Ending balance	(5,243)		(2,749)

Unrealized loss on derivative instruments:
Beginning balance	(9,220)		(4,877)
Net gain (loss) on derivative instruments (3)	2,400		446
Amounts reclassified from accumulated other comprehensive income (loss) (4)	618		—
Other comprehensive income (loss), net of tax	3,018		446
Ending balance	(6,202)		(4,431)

Total accumulated other comprehensive income (loss)	$	(17,973)	$	(35,159)

(21) For the three-~~months~~month period ended ~~September 30~~March 31, ~~2020 and 2019~~2021, the amount represents ~~routine~~the ~~amortization~~recognition of ~~actuarial~~the ~~gains~~accumulated ~~and~~loss ~~losses~~on inforeign ~~net~~currency ~~periodic~~translation ~~benefit~~relating ~~cost~~to ~~and other activity of less than $0.1 million, net of less than $0.1 million tax benefit. For~~ the ~~nine-months~~divestiture ~~ended September 30, 2020, amount represents the settlement~~ of the ~~ISS~~German ~~Pension~~Facility ~~Plan~~ in the ~~first~~Performance ~~quarter~~Materials ~~of 2020 of $0.4 million~~segment, net of ~~$0.1 million~~ tax ~~benefit,~~impact ~~and routine amortization~~ of ~~actuarial gains and losses in net periodic benefit cost and other activity of less than~~ $0.12 million~~, net of less than $0~~.~~1 million~~ ~~tax~~This ~~benefit.~~is ~~For~~included ~~the nine-months ended September 30, 2019, amount represents the settlement of the Lydall Pension Plan~~ in ~~the~~(Gain) ~~second~~loss ~~quarter~~on ~~of 2019 of $19.0 million, net of $11.5 million tax benefit, and routine amortization of actuarial losses in net periodic benefit cost during~~ the ~~first~~sale ~~five months~~ of ~~fiscal~~a ~~year~~business ~~2019~~on ~~prior to~~ the ~~plan~~Company’s ~~termination~~Condensed ofConsolidated ~~$0.4 million,~~Statements ~~net~~ of $0Operations.~~1 million tax benefit.~~

(3) Amount represents unrealized losses on the fair value of hedging activities, net of tax benefits of $0.8 million and less than $0.1 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $1.0 million and $0.7 million for the nine-month periods ended September 30, 2020 and 2019, respectively.20

(42)For ~~Amounts~~the three-month period ended March 31, 2021, the amount primarily represents the ~~impact~~recognition of ~~de-designation~~the accumulated loss on the defined pension plan relating to the divestiture of the ~~interest~~German ~~rate~~Facility ~~swap~~in ~~agreement~~the Performance Materials segment. This amount was $0.4 million, net of tax ~~expenses~~impact of $0.21 million, and is included in (Gain) loss on the sale of a business on the Company’s Condensed Consolidated Statements of Operations. For the three-month period ended March 31, 2020, the amount primarily represents the settlement of the ISS Pension Plan. This amount was $0.34 million, net of tax impact of $0.1 million. The amounts for the three-month ~~and nine-month~~ periods ended ~~September~~March 3031, 2021 and 2020 also include routine amortization of actuarial gains and losses in net periodic benefit cost of less than $0.1 million, ~~respectively~~net of tax impact of less than $0.1 million.

18(3)Amount represents unrealized gains (losses) on the fair value of hedging activities, net of tax impact of $0.7 million ~~Subsequent~~and ~~Events~~$0.1 million for the three-month periods ended March 31, 2021 and 2020, respectively.

On(4)Amounts ~~October~~represents ~~14, 2020,~~ the ~~Company~~impact ~~amended~~of ~~its~~de-designation ~~2018~~of ~~Credit~~the ~~Agreement~~interest torate ~~allow~~swap ~~certain restructuring and other charges~~agreement, asnet ~~defined~~of bytax ~~the~~impact ~~amendment~~of $0.2 million, tofor ~~be excluded from EBITDA in~~ the ~~calculation~~three-month ofperiod ~~the~~ended March 31, ~~Company's modified financial covenants~~2021.

3217. SUBSEQUENT EVENTS

On April 20, 2021, the Company's Board of Directors approved a Share Repurchase Program authorizing the repurchase, from time to time at the Company's discretion, of up to an aggregate of $30.0 million of common stock, par value $0.01 per share, of the Company. See Note 9, "Stock Repurchases," in these Notes to Condensed Consolidated Financial Statements for additional information.


Item 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Overview~~Forward-looking statements in Management’s Discussion and ~~Outlook~~Analysis of Financial Condition and Results of Operations (“MD&A”) are not guarantees of future performance and involve risks and uncertainties that could cause actual results to materially differ from those projected. Refer to the "Forward-Looking Statements" section of this MD&A and Part I, Item IA - Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of these risks and uncertainties.

OVERVIEW AND OUTLOOK

Business

Lydall, Inc. and its subsidiaries (collectively, “Lydall”, "the “Company”, or“we”, and “~~Lydall~~our”) design, manufacture, and ~~manufacture~~market specialty ~~engineered nonwoven~~ filtration ~~media,~~and ~~industrial~~advanced ~~thermal~~materials ~~insulating~~ solutions, ~~and~~that ~~thermal~~contribute ~~and~~to ~~acoustical~~a ~~barriers~~cleaner, ~~for~~quieter, ~~filtration/separation~~ and ~~heat~~safer ~~abatement and sound dampening applications~~world. The Company ~~principally~~operates ~~conducts~~in ~~its~~a ~~business~~variety ~~through~~of ~~three~~attractive ~~reportable~~end ~~segments:~~markets ~~Performance~~supported ~~Materials,~~by ~~Technical~~global ~~Nonwovens~~megatrends ~~and~~such ~~Thermal~~as ~~Acoustical~~the ~~Solutions,~~demand ~~with sales globally. The Performance Materials ("PM") segment includes filtration media solutions primarily~~ for indoor air, ~~fluid~~quality ~~power, life science~~ and ~~industrial~~lower ~~applications (“Filtration”)~~emissions, ~~and~~near ~~gasket~~sourcing ~~and~~of ~~sealing~~supply ~~solutions~~chains, ~~thermal insulation, energy storage,~~ and ~~other~~vehicle ~~engineered~~electrification ~~products~~redefining ~~(“Sealing~~safety and ~~Advanced Solutions”)~~sound. ~~The~~ ~~Technical~~Lydall ~~Nonwovens~~solves ~~("TNW")~~our ~~segment~~customers' ~~consists~~problems ofculminating ~~Industrial~~in ~~Filtration~~demanding ~~products~~applications, ~~that~~including: ~~include~~high ~~nonwoven~~performance ~~rolled-goods felt media and filter bags used primarily in industrial~~ air and liquid specialty filtration, ~~applications~~molecular asfiltration, ~~well~~engineered asfiber ~~Advanced~~based ~~Materials~~sealing ~~products~~solutions, ~~that~~specialty ~~include~~insulation ~~nonwoven~~including ~~rolled-good~~high ~~media~~temperature ~~that~~and isultra-low ~~used~~temperature in(cryogenic) ~~other~~insulation, ~~commercial~~needle ~~applications~~punch ~~and~~nonwoven ~~predominantly~~materials ~~serves~~for ~~the geosynthetics~~industrial, ~~automotive~~geosynthetic, ~~industrial,~~medical and ~~medical~~other ~~markets. Advanced~~specialty ~~Materials~~applications; ~~products~~and ~~also~~thermal ~~include~~management ~~automotive~~and ~~rolled-good~~acoustical ~~material~~products ~~for~~and ~~use~~solutions ~~in the Thermal Acoustical Solutions segment manufacturing process. Nonwoven filter media is used~~ to ~~satisfy~~assist ~~increasing emission control regulations~~ in athe ~~wide~~reduction ~~range~~ of ~~industries~~noise, ~~including power~~vibration, ~~cement, steel, asphalt, incineration, food,~~ and ~~pharmaceutical~~harshness. The ~~Thermal~~Company ~~Acoustical~~principally ~~Solutions~~conducts ~~("TAS")~~its ~~segment~~business ~~offers~~through ~~innovative~~three ~~engineered~~reportable ~~products~~segments: toPerformance ~~assist~~Materials, inTechnical ~~noise~~Nonwovens, and ~~heat~~Thermal ~~abatement~~Acoustical ~~within the transportation and industrial sectors~~Solutions.

~~Recent~~The ~~Developments~~Performance -Materials ~~COVID-19~~segment is a worldwide leader in delivering innovative specialty filtration, sealing and advanced materials solutions for demanding applications. Specifically, the segment’s offerings include: (1) specialty filtration media solutions for a variety of applications in the global air and liquid filtration market such as personal protective equipment (“PPE”), indoor air quality, life sciences, transportation, and industrial applications; (2) gasket materials and parts for a broad range of applications in the global sealing market for parts in large/heavy duty equipment for commercial, industrial, agriculture and construction end markets; and, (3) advanced materials that include highly engineered insulation solutions for cryogenic storage of liquid hydrogen/nitrogen, energy storage, and advanced composite materials for aerospace and defense applications.

The ~~impact~~Technical ofNonwovens ~~the~~segment ~~novel~~is ~~strain~~a ofglobal ~~the~~leader ~~coronavirus~~in ~~(“COVID-19”)~~engineered ~~has~~nonwoven ~~grown~~materials ~~throughout~~for ~~the~~industrial ~~world,~~filtration ~~including~~applications ~~in all global~~ and ~~regional~~advanced ~~markets~~materials ~~served by the Company~~products. ~~During~~The ~~2020,~~primary ~~governmental~~industrial ~~authorities~~filtration ~~implemented~~markets ~~numerous~~include ~~measures~~air ~~attempting~~pollution ~~to contain~~ and ~~mitigate~~emissions ~~the effects of COVID-19~~control, ~~including~~power ~~travel bans and restrictions~~generation, ~~quarantines, social distancing orders, shelter in place orders~~ and ~~shutdowns~~liquid offiltration ~~non-essential activities~~solutions. ~~The~~Advanced ~~Company’s~~materials ~~manufacturing~~products ~~facilities~~include ~~are~~geotextile ~~located~~felts infor ~~areas~~separation, ~~that~~reinforcement, ~~have~~filtration, ~~been~~drainage, ~~affected~~and byprotection; ~~the~~thermal ~~pandemic~~ and ~~shutdowns.~~acoustic ~~Certain~~insulation ~~Company~~for ~~facilities~~transportation inand ~~the~~automotive ~~United States~~applications, ~~Europe~~ and ~~Asia~~highly ~~carried~~customized ~~out~~and ~~shutdowns~~technical assolutions afor ~~result~~acoustic ofmedia, ~~government-imposed~~medical, ~~restrictions~~building or& inconstruction, ~~conjunction~~and ~~with~~safety ~~customer~~apparel. ~~plant~~Specifically, ~~closures during~~ the ~~first quarter. The Company~~segment’s ~~Asia~~offerings ~~facilities~~include ~~resumed~~needle ~~operations~~punched innonwoven ~~late February~~ and ~~other~~highly ~~facilities~~engineered ~~ramped~~felts ~~back~~made upfrom ~~moderately,~~a invariety ~~line~~of ~~with~~synthetic ~~customer demand, during the second quarter~~fibers. InAutomotive ~~the~~media ~~third~~is ~~quarter,~~provided ~~the~~to ~~Company~~Tier ~~has~~1 ~~seen~~and aTier ~~stronger~~2 ~~recovery~~suppliers inas ~~its~~well ~~Performance~~as ~~Materials segment, specifically in its Filtration business, and in~~ the Company's Thermal Acoustical Solutions ~~and Technical Nonwovens segments as discussed below~~segment.

~~Performance~~The ~~Materials~~Thermal Acoustical Solutions segment offers a full range of innovative engineered products tailored for the transportation and industrial sectors to shield sensitive components from high heat, improve exhaust gas treatment and lower harmful emissions as well as assist in the reduction of noise, vibration, and harshness (~~“PM”~~NVH) ~~Developments~~.

~~Performance~~Recent Materials sales were down 4.6% in the first half of 2020 from the comparative period in 2019 with incremental demand for specialty filtration media products more than offset by softer demand in the Sealing and Advanced Solutions business. PM’s Filtration sales continued to be very strong in the third quarter, up approximately 37.8% from the comparative period in the prior year, led by continued demand for fine fiber meltblown media used in personal protective equipment such as N95 respirators and surgical and medical masks. This demand is expected to moderate into the fourth quarter and expected to be down slightly on a sequential basis due to normal seasonality. Weaker demand in automotive, agricultural, and construction equipment markets resulted in a sales decline of approximately 1.7% in the Sealing and Advanced Solutions business in the third quarter of 2020 from the comparative period in 2019.Developments

AsIn early 2020, the World Health Organization (“WHO”) characterized COVID-19 as a ~~result~~pandemic. ofIn ~~continued~~an ~~strong~~effort ~~demand~~to ~~for~~contain ~~filtration~~COVID-19 ~~products~~and slow its spread, governments throughout the world, including global and regional markets served by the Company, ~~approved~~enacted ~~investments~~various measures, including orders to ~~add~~close ~~two~~"non-essential" ~~production~~businesses, ~~lines~~isolate residents in ~~Performance~~their ~~Materials’~~places ~~Rochester~~of ~~facility~~residence, ~~for~~and ~~the~~practice ~~production~~social ofdistancing. ~~fine~~These ~~fiber~~actions ~~meltblown~~and ~~filtration~~the ~~media~~global ~~used~~health incrisis ~~the~~caused ~~N95~~by ~~respirator~~COVID-19 has, and ~~surgical~~may continue to, adversely impact global business activity and ~~medical~~our ~~masks~~financial performance. In ~~addition~~Despite the recent administration of vaccines, the ~~Company~~outbreak ~~reached~~continues to have an ~~agreement~~adverse ~~with~~impact ~~the~~on ~~U.S.~~parts ~~Government~~of ~~that~~our ~~provides~~business ~~partial~~including ~~funding~~cases of absenteeism and certain supply chain challenges. The Company has implemented changes to help ensure the ~~investments~~safety and health of all its employees and continues to assess and update its business continuity plans in the ~~production~~context ~~lines~~of inthis ~~addition~~pandemic. The Company will continue its efforts to ~~funding~~maintain ~~for~~a ~~other~~safe ~~technical~~and ~~resources~~healthy work environment, including and continuing to allow remote working arrangements where it is appropriate.

InStronger ~~the~~demand ~~third~~in ~~quarter of 2020,~~ the ~~Company~~auto ~~announced~~and anindustrial ~~investment~~markets inis acausing ~~new~~higher ~~fine~~commodity ~~fiber~~prices ~~meltblown~~for ~~production~~aluminum, ~~line~~aluminized insteel, ~~its~~polypropylene, ~~French~~and ~~facility~~microfiber toglass. ~~support~~Supply ~~the~~chain ~~European~~issues, ~~Union~~including ~~face~~transportation ~~mask production~~ and ~~air~~logistics ~~filter~~problems, ~~production~~are incausing ~~the~~periodic ~~fight against COVID-19. This investment is being partially funded by the French Government.~~

33supply chain disruptions, and in selected cases, material shortages in various markets served by the Company. Although the Company does not foresee a material adverse impact on the Company’s financial performance for the remainder of 2021, given the dynamic nature of this situation, we cannot estimate with certainty the future impacts from higher commodity prices and the COVID-19 pandemic on our financial condition, results of operations or cash flows.

ofPerformance ~~resources~~Materials on the significant investments to expand fine fiber meltblown production. These actions are expected to be completed in 2021 and projected to improve overall segment margin performance beginning in 2021. For additional information, see Note 12, "Restructuring".Developments

~~Technical Nonwovens (“TNW”) Developments~~COVID-19

~~During~~The ~~the~~Performance ~~first~~Materials ~~half~~segment ofdid ~~2020,~~not ~~TNW~~experience ~~experienced~~significant ~~slowdowns in all geographic locations; predominantly in its facilities in South Carolina, the United Kingdom, and China. TNW’s Texel~~ business indisruption ~~Canada,~~as ~~however, is~~ a ~~leading~~result ~~supplier~~ of ~~nonwoven products used in~~ the ~~production of healthcare applications including medical wipes, pads, and gowns. In response to the~~ COVID-19 pandemic, during the ~~Company~~first ~~re-prioritized~~quarter ~~its~~of ~~manufacturing~~2021. ~~capabilities~~The insegment’s ~~North~~facilities ~~America~~remain ~~and~~open ~~Europe~~in toall ~~focus~~regions onin ~~serving~~which ~~customers~~the ~~for~~segment ~~these products~~operates.

~~TNW’s~~Market ~~sales~~Trends in the first half of 2020 declined 18.8% from the comparable period in 2019 on generally slower demand in industrial end markets globally. In the third quarter of 2020, sales increased 12.5% on a sequential basis from the previous quarter but decreased 8.5% compared to the prior year quarter. Softer industrial end markets and lower sales into automotive applications resulted in the year-over-year sales declines in the quarter. Third quarter 2020 sales were down 10.0% in Industrial Filtration and 6.8% in Advanced Materials businesses from the same period in the previous year.

~~Thermal~~Demand ~~Acoustical~~for ~~Solutions~~the ~~(“TAS”)~~Performance ~~Developments~~Materials segment’s filtration and sealing and advance solutions products continue to be strong, however, the segment is experiencing supply chain challenges for key raw materials, primarily impacting sealings products. In addition, the segment is seeing significant commodity price increases for polypropylene and other fibers used in its filtration products. Although the Company expects this trend to continue through 2021, the Company anticipates the ability to pass through most of the higher costs in customer pricing.

As ~~customer~~previously ~~demand increased in North America~~disclosed, the ~~Company~~Performance ~~began~~Materials tosegment ~~experience~~undertook anactions ~~increase~~to ofexit ~~COVID-19~~underperforming ~~cases,~~facilities ~~particularly at its North American operation, resulting~~ in ~~workforce shortages and other operational inefficiencies causing higher overtime, outsourcing costs, and logistics costs~~Europe. In ~~addition~~March 2021, ~~recent recoveries in~~ the ~~manufacturing~~Company ~~industries~~entered ~~are~~into ~~causing~~an ~~higher~~agreement ~~commodity~~to ~~pricing~~sell inits ~~North~~German ~~America~~facility. InThe ~~late~~sale ~~third quarter 2020, as a result of labor shortages and operational inefficiencies directly related to COVID-19, TAS~~ was ~~unable~~completed ~~to manufacture parts timely, resulting~~ in ~~customer~~March ~~production~~2021 ~~line stoppages. In early October 2020, due to the unforeseen~~ and ~~unforeseeable nature of the COVID-19 pandemic~~, ~~which~~as isa ~~out of the Company’s control~~result, the Company ~~invoked~~recorded ~~force~~a ~~majeure~~loss orin ~~commercial~~the ~~impracticability~~amount ~~as legal excuse for delayed performance~~ of ~~contracts and defense to any claim that may be asserted by customers~~$0.7 million. ASee ~~recent~~Note ~~resurgence~~11, of“Restructuring,” ~~cases~~ in ~~that same facility has caused~~ the ~~Company~~Notes to ~~expand~~Condensed ~~its~~Consolidated ~~declaration~~Financial ofStatements ~~force~~for ~~majeure~~additional ~~or commercial impracticability to other impacted customers~~information. ~~The Company has taken various actions to resolve these issues and expects TAS to continue to incur incremental costs in the fourth quarter of 2020.~~

~~Looking~~Technical ~~Forward~~Nonwovens Developments

~~The continuation of the ramp-up of production is dependent on customer demand and no additional outbreaks of~~ COVID-19 that could cause a major slowdown in demand impacting the Company’s ability to operate because of government mandates, employee illnesses or other related unforeseen events. The Company anticipates the global automotive industry will continue to stabilize in the fourth quarter, but fourth quarter volumes are expected to be lower than the comparative 2019 period as a result of the global economic slowdown caused by the COVID-19 pandemic. New vehicle sales are highly dependent on the strength of the consumer. If unemployment remains at higher levels, new vehicle sales could be significantly lower than historical and previously projected sales levels. The Company expects workforce shortages directly driven by COVID-19 to continue into the fourth quarter for the TAS segment. The Company also expects to face continued headwinds in PM’s sealing businesses but stronger demand for filtration products is expected to offset this decline. Additionally, the Company expects seasonally strong construction activity, which drives demand for geosynthetic products, to decline as winter approaches and continued softness in industrial end markets in its Technical Nonwovens segment in the fourth quarter of 2020.

~~Liquidity~~The ~~and~~Technical ~~Cash~~Nonwovens ~~Preservation~~segment did not experience significant business disruptions as a result of the COVID-19 pandemic during the first quarter of 2021. The segment’s facilities remain open in all regions in which the segment operates. A small number of suppliers have issued force majeure notifications, however, the impact on the segment’s financial results have not been material.

~~The~~Market Company continued to experience working capital cash flow improvements through September 30, 2020 generating $74.6 million in cash from operating activities. As the Company continues to ramp up production and invest in new fine fiber meltblown production equipment to meet customer demand, the Company expects cash outflows to support working capital requirements and capital projects.Trends

34Demand for the Technical Nonwovens segment’s geosynthetic, medical and filtration products are strong. The segment has experienced lower demand in North America for nonwoven products used in automotive applications as global semiconductor chip shortages impact the automotive industry's customers. However, the Company does not expect these issues to have a material adverse impact on the Company’s financial performance in 2021. In addition, the segment is seeing significant commodity price increases for polypropylene used in geosynthetic and filtration products. Although the Company expects this trend to continue through 2021, the Company anticipates the ability to pass through the higher costs in customer pricing.

~~During~~Thermal ~~the~~Acoustical ~~nine~~Solutions months of 2020, the Company took significant measures to reduce its overall cash expenditures, including the furlough or lay-off of hourly/salary plant workers and select furloughs of corporate and other salaried employees, deferred company contributions to its pension plans and matching contributions under the Company's 401(k) defined contribution plan, reduction of purchase obligations for raw materials and reduction/delay of non-critical capital spending. As a result, the Company reduced its monthly cash expenditures. The Company may elect to continue certain actions if the COVID-19 pandemic continues.Developments

As ~~noted~~previously ~~above~~disclosed, the ~~Company~~Thermal ~~reached~~Acoustical anSolutions ~~agreement~~segment’s ~~with~~North ~~the~~Carolina ~~U.S.~~facility ~~Government~~experienced inlabor ~~June~~shortages ~~2020~~and ~~that~~operational ~~provides~~inefficiencies ~~funding~~directly related to ~~cover~~COVID-19 ain ~~portion~~2020. ofThe ~~the~~segment ~~cost~~has toseen ~~install~~a ~~two~~decline ~~new~~in ~~production~~COVID-19 ~~lines~~related ~~for~~illnesses during the ~~production~~first quarter of ~~meltblown~~2021 ~~material~~and, ~~for~~as ~~N95~~a ~~respirator~~result, ~~surgical~~labor and ~~medical~~overtime ~~masks~~costs ~~and~~have ~~for~~begun ~~other technical resources. The Company will receive monthly payments in accordance with the agreement~~ to ~~fund~~decline upcompared to ~~$13.5 million. Additionally,~~ the ~~Company~~higher ~~has~~costs aincurred ~~tentative~~in ~~agreement~~2020. ~~with~~The ~~the French Government to fund up to 30% of the Company~~segment’s ~~investment~~facilities remain open in ~~its~~all ~~facility~~regions in ~~France~~which ~~supporting~~ the ~~European~~segment ~~Union face mask production and air filter production~~operates.

InMarket addition to the significant measures taken to reduce and contain costs, the Company took actions in March 2020 to provide additional liquidity, primarily including a $20.0 million draw down on its amended credit facility. On May 11, 2020, the Company entered into an amended credit agreement (see Note 6, "Long-term Debt and Financing Arrangements" for the key amended terms and conditions) to modify certain financial maintenance covenants, at least one of which the Company expected to fail during the second quarter of 2020 as a result of the impact of COVID-19. On October 14, 2020, the Company amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. The Company was in compliance with those modified financial covenants as of and for the three-month period ended September 30, 2020, and management does not anticipate noncompliance in the foreseeable future.Trends

~~Through~~Customer ~~September~~demand ~~of 2020, the Company generated $74.6 million of net cash provided by operations and had cash on hand of $122.0 million as of September 30, 2020. The Company~~ continues to ~~maintain~~be ~~the~~strong ~~necessary~~for ~~capital~~the toThermal ~~meet~~Acoustical ~~its~~Solutions ~~debt~~segment, ~~obligations and interest payments. As previously disclosed in late 2019~~however, ~~the~~customer ~~Company~~orders ~~entered~~from ~~into~~month ~~arrangements with a banking institution~~ to ~~sell~~month ~~trade~~have ~~accounts~~been ~~receivable~~volatile ~~balances~~as ~~for~~certain ~~selected~~automotive OEM customers. ~~The~~temporarily ~~Company~~slow ~~continues~~or tohalt ~~sell~~production ~~trade accounts receivable balances under these arrangements. See Transfer~~ of ~~Financial~~certain ~~Assets~~vehicle ~~under Note 1, “Basis of Financial Statement Presentation” for more information.~~

The spread of COVID-19 and the measures taken to constrain the spread of the virus have had, and will continue to have, a material negative impact on the Company’s financial results, and such negative impact may continue well beyond the containment of such outbreak. There is inherent uncertainty in the assumptions the Company uses to estimate its future liquidity due to the impact of the COVID-19 outbreak. In addition, the magnitude, duration, and speed of the global pandemic is uncertain. Consequently, the impact on the Company's business, financial condition or longer-term financial or operational results is uncertain. However, management believes, based on the actions taken to reduce cash expenditures and the Company’s financial position, that net cash provided by operations combined with its cash and cash equivalents and borrowing availability under its Credit Facility will be sufficient to fund its current obligations, capital spending, debt service requirements and working capital needs over at least the next twelve months.23

~~Steps~~models ~~Taken~~due to ~~Protect~~material ~~Employees~~supply shortages. Consistent with the Company’s other segments, the Thermal Acoustical Solutions segment is experiencing higher commodity pricing, specifically for aluminum, aluminized steel, and polyester fiber. The segment is able to pass through the higher commodity costs for certain customers; however, commodity price increases could have a moderate adverse impact on the segment’s financial performance in 2021 to the extent these costs cannot be passed on to customers.

~~The~~FIRST ~~Company~~QUARTER ~~continues~~2021 to monitor the global outbreak and spread of COVID-19 and take steps to mitigate the potential risks to the Company and its employees posed by the spread, related circumstances, and economic impacts of COVID-19. As the Company brings employees back to work, it has implemented changes to help ensure the safety and health of all its employees and continues to assess and update its business continuity plans in the context of this pandemic. The Company established the Lydall Emergency Preparedness Team (“LEPT”), implementing strict travel restrictions, enforcing rigorous hygiene protocols, increasing sanitization efforts at all facilities and implementing remote working arrangements for the majority of its employees who work outside the plants. The Company will continue its work to ensure it maintains a safe and healthy work environment and continue to allow remote working arrangements as long as necessary where appropriate.HIGHLIGHTS

35Below are financial performance highlights for the three-month period ended March 31, 2021 compared to the three-month period ended March 31, 2020:

~~Third~~The ~~Quarter~~chart ~~2020~~below ~~Highlights~~reflects the change in consolidated net sales by segment:

~~Below~~Consolidated ~~are~~net ~~financial~~sales ~~performance~~were ~~highlights~~$227.1 ~~for~~million in the ~~three-month~~first ~~period~~quarter ~~ended~~of ~~September 30~~2021, compared to $200.5 million in the first quarter of 2020, ~~compared~~an increase of $26.6 million, or 13.3%, driven by $14.1 million in higher sales in the Company's Performance Materials segment, resulting from higher demand in filtration products for face mask media in response to the ~~three~~COVID-~~month~~19 ~~period~~pandemic ~~ended~~combined ~~September 30~~with strong demand in sealing markets. In addition, ~~2019~~the Thermal Acoustical Solutions segment saw continued strength in the automotive market led by higher parts sales of $9.2 million, partially offset by lower tooling sales, and the Technical Nonwovens segment experienced an increase in sales driven by higher demand in industrial filtration markets. The change in consolidated net sales is summarized in the following chart:

•Net sales were $207.1 million in the third quarter of 2020, compared to $205.3 million in the third quarter of 2019, an increase of $1.8 million, or 0.9%, driven by $7.8 million in higher sales in the Company's Performance Materials segment, resulting from higher demand in filtration products for face mask media in response to the COVID-19 pandemic, partially offset by lower sales in the Company's Technical Nonwovens and Thermal Acoustical Solutions segments. The change in consolidated net sales is summarized in the following table:24

Components (in thousands)	Change in Net Sales		Percent Change
Parts volume and pricing change	$	648	0.3	%
Change in tooling sales	(1,827)		(0.9)	%
Foreign currency translation	2,990		1.5	%
Total	$	1,811	0.9	%

(1)Parts volume and pricing change includes a $0.6 million decrease in net sales from the German facility sold on March 11, 2021 between comparable periods in the first quarters of 2021 and 2020.

~~•Gross~~Consolidated ~~margin~~operating ~~increased~~income towas 18$12.3%1 million for the three-month period ended ~~September~~March 3031, ~~2020~~2021 as compared to 17an operating loss of $(55.7%6) million in the corresponding period in ~~2019~~2020. ~~The~~ ~~Performance~~Operating ~~Materials~~income ~~segment~~for ~~favorably~~the ~~impacted~~three-month ~~consolidated~~period ~~gross~~ended ~~margin~~March 31, 2020 was adversely impacted by ~~approximately~~goodwill ~~330~~and ~~basis~~other ~~points,~~long-lived ~~primarily~~asset ~~due~~impairment tocharges ~~favorable~~in ~~product~~the ~~mix~~Performance Materials segment of $61.1 million. After adjusting for the impairment charges, ~~driven~~operating byincome increased ~~demand~~$6.6 ~~for~~million ~~face~~primarily ~~mask~~due ~~media~~to an increase in ~~response~~operating toincome ~~the~~of ~~COVID-19~~$11.1 ~~pandemic~~million ~~and~~in ~~higher~~the ~~liquid~~Performance ~~filtration~~Materials ~~sales~~segment, ~~combined~~driven ~~with~~by favorable ~~raw~~product ~~material~~mix ~~commodity~~from ~~and~~continued ~~production~~demand ~~costs,~~for ~~and~~face ~~lower~~mask ~~overhead~~media ~~costs.~~and ~~Gross~~stronger ~~margin~~demand ~~from~~in the ~~Thermal~~sealing ~~Acoustical~~and ~~Solutions~~cryogenics ~~segment~~markets. ~~adversely~~Operating ~~impacted~~income ~~consolidated~~for ~~gross~~the ~~margin~~Technical byNonwovens ~~approximately~~segment ~~160~~increased ~~basis~~$1.3 ~~points~~million primarily due to ~~labor~~the ~~shortages~~absence ~~and~~of ~~operating~~a ~~inefficiencies~~$0.9 ~~directly~~million ~~related~~inventory tocharge anincluded ~~increase~~ in ~~COVID-19~~the ~~cases~~first inquarter ~~its~~of ~~North~~2020 ~~American~~related ~~facility,~~to ~~resulting~~a flood in ~~higher~~one ~~freight~~of ~~and~~its ~~temporary~~European ~~labor~~facilities. ~~expenses~~Offsetting inthese ~~order~~increases towas ~~meet~~a ~~larger OEM customers' demands~~$4. ~~The~~0 ~~Technical~~million ~~Nonwovens~~decrease ~~segment~~in ~~adversely~~operating ~~impacted~~income ~~consolidated~~in ~~gross~~the ~~margin~~Thermal byAcoustical ~~approximately~~Solutions ~~110~~segment ~~basis~~primarily ~~points~~ due to ~~unfavorable~~higher ~~overhead~~labor ~~absorption~~and onoutsourcing ~~lower~~costs ~~segment~~as ~~net~~a ~~sales~~result ~~combined~~of ~~with~~workforce ~~unfavorable~~shortages ~~product~~related ~~mix~~to COVID-19.

~~•Operating loss was $(9.3) million for the three-month period ended September 30, 2020 compared to operating income of $7.4 million in the corresponding period in 2019.~~ The ~~operating~~chart ~~loss~~below ~~was~~reflects ~~driven by restructuring charges of $15.0 million primarily in~~ the ~~Performance~~change ~~Materials segment and significant operating inefficiencies~~ in ~~the~~consolidated ~~Company's Thermal Acoustical Solutions segment as noted above. The following expenses adversely impacted~~ operating income ~~for~~by ~~the third quarters of 2020 and 2019~~segment:

	For the Three Months Ended September 30, 2020
Components (in thousands except per share amounts)	Operating Income Impact		Pre-taxEPS Impact		Tax EffectEPS Impact (1)		NetEPS Impact
PM restructuring expenses	$	(14,984)	$	(0.86)	$	0.21	$	(0.65)

Consolidated net income was $5.1 million, or $0.28 per diluted share, for the three-month period ended March 31, 2021 compared to a net loss of $(56.4) million, or $(3.25) per diluted share, in the corresponding period in 2020.

	For the Three Months Ended September 30, 2019
Components (in thousands except per share amounts)	Operating Income Impact		Pre-taxEPS Impact		Tax EffectEPS Impact (1)		NetEPS Impact
TNW restructuring expenses	$	(117)	$	(0.01)	$	0.00	$	(0.01)

~~(1)~~CONSOLIDATED ~~Tax~~RESULTS ~~expense~~OF ~~represents the statutory tax rate in the jurisdiction in which the expense was incurred.~~OPERATIONS

~~•The~~All ~~net~~of ~~loss~~the ~~was~~following ~~$(11.7)~~tabular ~~million,~~comparisons orare ~~$(0.67) per diluted share,~~ for the three-month ~~period~~periods ended ~~September 30~~March 31, ~~2020~~2021 ~~compared~~and ~~to net income of $3.0 million~~2020, orunless ~~$0.17~~otherwise ~~per diluted share, in the corresponding period in 2019~~indicated.

•Cash was $122.0 million at September 30, 2020, compared to $51.3 million at December 31, 2019. Net cash provided by operations was $74.6 million for the nine-month period ended September 30, 2020 compared to $63.0 million in the corresponding period in 2019, with the improvement primarily driven by increases in payable days across the Company's operations. On October 14, 2020, the Company amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the

Company's modified financial covenants. See Note 6. "Long-term Debt and Financing Arrangements" to the Condensed Consolidated Financial Statements for highlights of the key amended terms and conditions.

Results of Operations

All of the following tabular comparisons are for the three-month and nine-month periods ended September 30, 2020 and 2019, unless otherwise indicated.

Net Sales

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~Percent Change~~

~~2020~~

~~2019~~

~~Percent Change~~

Net sales

~~207~~227,~~085~~099

~~205~~200,~~274~~527

~~0.9~~

~~553,772~~

~~644,110~~

~~(14.0)~~

$ change

26,572

(17,498)

% change

13.3

(8.0)

Net sales for the three-month period ended ~~September 30~~March 31, ~~2020~~2021 increased by $126.86 million, or 013.93%, compared to the ~~third~~first quarter of ~~2019~~2020. This increase was primarily driven by an increase in Performance Materials segment sales of $714.81 million, or 37.80% of consolidated net sales, related to higher net sales ~~of filtration products on higher demand~~ in the air filtration market in response to the COVID-19 pandemic. ~~This~~combined ~~increase~~with ~~was~~strong ~~partially~~demand ~~offset~~for ~~by lower sealing and~~ advanced solutions ~~sales~~and assealing ~~large OEM customers continued to ramped-up production~~products. ~~The~~In ~~increase~~addition, inThermal ~~Performance~~Acoustical ~~Materials~~Solutions ~~segment~~net sales ~~was~~increased ~~partially offset by a~~ $57.43 million ~~decrease~~, or 23.6% of consolidated net sales, inas ~~the~~a ~~Technical~~result ~~Nonwovens~~of ~~segment,~~stronger ~~driven~~automotive ~~primarily~~demand. byIn ~~softness~~the infirst ~~industrial~~quarter ~~end~~of ~~markets~~2020, ~~primarily~~the ~~air~~COVID-19 ~~filtration,~~pandemic inhad ~~North~~a ~~American~~significant ~~and~~adverse ~~Europe.~~impact ~~Additionally,~~on the Thermal Acoustical ~~Solutions~~ segment's ~~reported~~sales. aThe ~~decrease~~Technical inNonwovens segment net sales ofincreased $2.4.3 million, or 1.2.1% of consolidated net sales, driven primarily ~~due~~by toa ~~lower~~large ~~tooling~~increase ~~sales~~in ofChina ~~$1.8~~sales ~~million~~due ~~and~~to ~~lower~~the ~~net~~absence ~~parts~~of ~~sales~~the offacility ~~$0.6~~ramp-downs ~~million,~~that asheavily impacted the Company's ~~continues~~China tooperations ~~ramp-up production~~ in ~~line~~the ~~with~~first ~~it's~~quarter ~~large~~of ~~OEM customers~~2020. Foreign currency translation favorably impacted net sales by $37.05 million, or 13.58% of consolidated net sales.

Net sales for the nine-month period ended September 30, 2020 decreased by $90.3 million, or 14.0%, compared to the corresponding period in 2019. This decrease was primarily due to lower net parts sales of $61.1 million, or 9.5% of consolidated net sales, in the Thermal Acoustical Solutions segment, driven by temporary plant ramp downs across all of its operations in the first half of 2020 due to large OEM customer shutdowns resulting from the COVID-19 pandemic, and lower net tooling sales of $7.6 million. The Technical Nonwovens segment reported a decrease in net sales of $30.7 million, or 4.8% of consolidated net sales, driven primarily by the global softness in industrial end markets, primarily air filtration. The Performance Materials segment reported an increase in net sales of $1.8 million, or 0.3% of consolidated net sales, driven by increased net sales in filtration as demand increased in the air filtration market for face mask media in response to the COVID-19 pandemic, partially offset by decreased sealing and advanced solutions sales related to large OEM customer shutdowns beginning in mid-March due to COVID-19. Foreign currency translation had a negative impact on net sales of $1.2 million, or 0.2% of consolidated net sales.

Cost of Sales

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~Percent Change~~

~~2020~~

~~2019~~

~~Percent Change~~

Cost of sales

~~169~~178,~~155~~550

~~168~~161,~~918~~959

~~0.1~~

~~448,856~~

~~520,423~~

~~(13.8)~~

$ change

16,591

(14,010)

% change

10.2

(8.0)

Cost of sales for the three-month period ended ~~September 30~~March 31, ~~2020~~2021 increased by $016.26 million, or 010.12%, compared to the corresponding period in ~~2019~~2020. The increase was primarily driven by ~~a significant increase in variable overhead costs, principally in the Thermal Acoustical Solutions segment related to~~ higher ~~costs~~sales ~~associated~~volume ~~with~~across ~~COVID-19,~~all ~~primarily~~three insegments. ~~the~~The Company's ~~North~~Performance ~~American~~Materials ~~plant,~~segment ~~and,~~experienced toan aincrease ~~lesser extent,~~ in ~~the~~sales ~~Technical Nonwovens segment related to unfavorable overhead costs on lower~~ volume. ~~Additionally,~~as ~~higher~~a ~~net~~result ~~sales~~of in the ~~Performance Materials segment due to~~ higher demand for ~~face~~air ~~mask~~filtration ~~media~~and sealing products in response to the COVID-19 ~~contributed~~pandemic toand ~~the~~an ~~higher cost of sales. The~~ increase in ~~cost~~labor ofcosts, ~~sales~~principally ~~was~~in ~~partially~~the ~~offset~~Thermal byAcoustical ~~lower~~Solutions ~~net~~segment, ~~sales~~as ina ~~the~~result ~~Technical~~COVID-19-related ~~Nonwovens~~work ~~and~~force ~~Thermal~~shortages ~~Acoustical~~in ~~Solutions~~the ~~segments~~early ~~and~~part ~~lower~~of ~~raw~~2021. ~~material~~These ~~commodity~~increases ~~and~~were ~~production~~partially ~~costs~~offset ~~across~~by ~~all segments, coupled with~~ favorable product mix in the Performance Materials ~~and Thermal Acoustical Solutions segments~~segment. Foreign currency translation increased cost of sales by $26.52 million, or 13.58%, in the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020.

Cost of sales for the nine-month period ended September 30, 2020 decreased by $71.6 million, or 13.8%, compared to of the corresponding period in 2019. The decrease was driven by lower net sales across all segments, primarily due to plant ramp

downs in the Thermal Acoustical Solutions segment as noted above and, to a lesser extent, the Technical Nonwovens segment due to the COVID-19 pandemic. In addition, lower raw material commodity and production costs across all segments contributed to lower cost of sales. These decreases to cost of sales were partially offset by higher overhead costs in the Thermal Acoustical Solutions and Technical Nonwovens segments due to the drivers noted above, combined with unfavorable product mix, primarily in the Thermal Acoustical Solutions segment resulting from lower fibers sales related to the sunsetting of major platforms in the second half of 2019 with select OEM manufacturers. Foreign currency translation decreased cost of sales by $1.1 million, or 0.2%, in the first nine months of 2020 compared to the first nine months of 2019.

Gross Profit

	For the Three Months Ended September 30,														For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021			~~2019~~2020			~~Percent Change~~		~~2020~~			~~2019~~			~~Percent Change~~
Gross profit	$	3748,~~930~~549		$	3638,~~356~~568		~~4.3~~	%	$	~~104,916~~		$	~~123,687~~		~~(15.2)~~	%
Gross margin	18.3		%	17.7		%			18.9		%	19.2		%
$ change	9,981			(3,488)
% change	25.9		%	(8.3)		%
% of net sales	21.4		%	19.2		%

Gross margin for the three-month period ended ~~September 30~~March 31, ~~2020~~2021 increased 60220 basis points compared to the corresponding period in ~~2019~~2020. The Performance Materials segment favorably impacted consolidated gross margin by approximately ~~330~~390 basis points, primarily due to favorable product mix, driven by higher demand for face mask media in response to the COVID-19 pandemic and ~~increased~~higher ~~liquid~~sealing ~~filtration~~and advanced solutions sales,. ~~combined~~Lower ~~with~~fixed ~~favorable~~costs ~~customer~~driven ~~pricing,~~by ~~and~~the ~~raw~~2020 ~~material~~restructuring ~~commodity~~activities ~~and~~also ~~production~~contributed ~~costs~~to the Performance Materials segment's gross margin improvement. The ~~Thermal~~Technical ~~Acoustical~~Nonwovens ~~Solutions~~ segment ~~adversely~~favorably impacted consolidated gross margin by approximately ~~160~~20 basis points ~~driven~~due byto ~~higher~~the ~~COVID-19-related~~absence ~~costs~~of asa ~~noted above~~$0.9 ~~The~~million ~~Technical~~inventory ~~Nonwovens~~charge ~~segment~~in ~~negatively~~the ~~impacted~~first ~~consolidated~~quarter ~~gross~~of ~~margin~~2020 byrelated ~~approximately~~to ~~110~~a ~~basis~~flood ~~points~~in ~~due~~one toof ~~unfavorable~~its ~~overhead~~European ~~absorption~~facilities. onThe ~~reduced~~Thermal ~~segment~~Acoustical ~~net~~Solutions ~~sales~~segment ~~combined~~adversely ~~with~~impacted ~~unfavorable~~consolidated ~~product~~gross ~~mix~~margin inby ~~the~~approximately ~~third~~190 ~~quarter~~basis ofpoints, ~~2020~~primarily ~~compared~~driven toby the ~~third~~higher ~~quarter~~labor ofcosts ~~2019~~noted above.

Gross margin for the for the nine-month period ended September 30, 2020 decreased 30 basis points compared to the corresponding period in 2019. The Thermal Acoustical Solutions segment negatively impacted consolidated gross margin by approximately 300 basis points driven by the significant reduction in segment net sales due to the COVID-19 pandemic and higher COVID-19-related costs in the third quarter of 2020. The Performance Materials segment favorably impacted consolidated gross margin by approximately 290 basis points due to the drivers noted above while the Technical Nonwovens segment had a minimal impact on consolidated gross margin in the first nine months of 2020 compared to the corresponding period in 2019.26

Selling, Product Development and Administrative Expenses

	For the Three Months Ended September 30,														For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021			~~2019~~2020			~~Percent Change~~		~~2020~~			~~2019~~			~~Percent Change~~
Selling, product development and administrative expenses	$	3235,~~227~~633		$	2833,~~909~~027		~~11.5~~	%	$	~~95,418~~		$	~~94,011~~		~~1.5~~	%
Percentage of sales	15.6		%	14.1		%			17.2		%	14.6		%
$ change	2,606			21
% change	7.9		%	0.1		%
% of net sales	15.7		%	16.5		%

Selling, product development and administrative expenses for the three-month period ended ~~September 30~~March 31, ~~2020~~2021 increased $32.36 million, orbut ~~150~~decreased 80 basis points as a percentage of consolidated net sales, compared to the corresponding period in ~~2019~~2020. The increase in selling, product development and administrative expenses were driven by higher compensation-related expenses of $2.68 million, higher consulting costs of $02.61 million, and an increase in other general administrative costs of $0.96 million. These increases were partially offset by lower ~~travel~~corporate strategic initiatives expenses of $01.8 million, and a decrease in intangible assets amortization expense of $1.1 million.

Selling, product development and administrative expenses for the nine-month period ended September 30, 2020 increased $1.4 million, or 260 basis points as a percentage of net sales, compared to the corresponding period in 2019. The increase in selling, product development and administrative expenses were driven by higher compensation-related expenses of $3.7 million and higher strategic initiatives expenses of $1.9 million. These increases were partially offset by lower salaries expenses of $1.7 million, lower travel expenses of $1.2 million, lower consulting expenses of $0.5 million, and a decrease in other general administrative costs of $0.8 million.

Impairment of Goodwill and Other Long-Lived Assets

	For the Three Months Ended September 30,										For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021		~~2019~~2020		~~Dollar Change~~		~~2020~~		~~2019~~		~~Dollar Change~~
Impairment of goodwill and other long-lived assets	$	—	$	—61,109	$	—	$	~~61,109~~	$	—	$	~~61,109~~

AsThe ~~previously reported, the~~ Company recorded a goodwill impairment charge of $48.7 million in the Performance Materials segment during the three-month period ended March 30, 2020. ~~Lower~~due ~~expected~~to lower demand in automotive and other end markets ~~due~~as toa result of the COVID-19 pandemic. ~~resulted~~In inaddition, as a ~~reduction~~result inof ~~sales~~the ~~and~~COVID ~~cash~~19 ~~generation~~pandemic ~~projections~~and asthe ~~compared~~Company's action plan to ~~prior~~address ~~projections~~the ~~for~~associated risks, the ~~reporting~~Company ~~units~~accelerated certain strategic actions. AsOne such action was a ~~result~~review of ~~these~~an ~~revised~~underperforming ~~projections~~European ~~and~~plant ~~changes~~within inthe ~~other~~Performance ~~Company~~Materials ~~and~~segment. ~~market-based~~As ~~inputs~~a toresult ~~the~~of ~~determination~~a ofstrategic ~~fair~~shift ~~value~~regarding this plant, the ~~carrying~~Company ~~value~~performed an impairment assessment on the long-lived assets of the ~~Performance~~plant, ~~Materials~~which ~~reporting~~resulted ~~unit~~in ~~exceeded~~a ~~its~~long-lived ~~fair~~asset ~~value~~impairment bycharge of $4812.74 million, ~~resulting~~during in the ~~impairment~~three-month ~~charge~~period ended March 31, 2020.

As a result of the COVID 19 pandemic and the Company's action plan to address the risks associated with it, the Company accelerated certain strategic actions. One such action was a review of an underperforming European plant within the Performance Materials segment. As a result of a strategic shift regarding this plant, the Company performed an impairment assessment on the long-lived assets of the plant. The impairment test concluded that the asset group was not recoverable, and the Company then determined that carrying value of the asset group exceeded its fair value and recorded a long-lived asset impairment charge of $12.4 million.

Restructuring Expenses

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~Dollar Change~~

~~2020~~

~~2019~~

~~Dollar Change~~

Restructuring expenses

~~14,984~~777

—

~~14,984~~

—

~~14,984~~

~~During~~In the ~~third~~first quarter of 2020, the Company’s Performance Materials segment undertook actions to discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America and consolidated certain product lines and began exiting underperforming facilities in Europe. These restructuring activities, which are projected to conclude in the first half of 2021, ~~are expected to reduce operating costs, increase production efficiency and enhance~~ the Company’s ~~flexibility~~recorded ~~by better aligning its manufacturing operations with the segment's customer base. Accordingly, the Company expects to record~~ pre-tax ~~expenses~~restructuring charges of ~~approximately~~ $~~17.~~0 ~~to $20~~.08 million, primarily ~~related~~consisting toof severance costs and ~~employee~~legal ~~retention~~ expenses~~, in connection with these restructuring activities, of which approximately $11~~.5 to $14.5 million are expected to result in cash expenditures. The Company incurred non-cash expenditures of approximately $5.5 million which consisted of fully depreciating and/or amortizing long-lived assets and, to a lesser extent, writing-off inventory.

In(Gain) ~~North~~Loss ~~America,~~On the Company decided to shut down two underperforming nonwoven manufacturing carded lines and ancillary equipment, originally acquired in 2018, that served commercial and residential HVAC markets with low to medium efficiency air filtration media. The Sale ~~Company~~Of ~~experienced~~A lower demand as a result of COVID-19, which accelerated a market shift from lower efficiency air filtration media to higher performance rated air filtration media. As a result, the Company recorded a pre-tax restructuring charge of $5.4 million, primarily due to accelerated depreciation of property, plant and equipment and other intangible assets. Businesses

The Company undertook actions to consolidate global production facilities in the Sealing and Advanced Solutions business from five facilities to four, resulting in the closure of an underperforming facility in Germany. In addition, the Company decided to close a small volume membrane filtration production facility in the Netherlands. As a result of the two facility closures in Europe, the Company recorded pre-tax restructuring charges of $9.6 million consisting of severance costs, legal expenses and inventory write-offs. The Company expects to generate annualized savings of $5.0 million to $6.0 million. See Note 12, "Restructuring" for additional information.


	For the Three Months Ended March 31,
In thousands	2021		2020
(Gain) loss on the sale of a business	$	698	$	—

39In the first quarter of 2021, the Company entered into an agreement to sell a facility in Germany, which closed on March 11, 2021. The Company agreed to pay $1.8 million (€1.5 million) to the buyer and provide $2.2 million (€1.9 million) in additional funding, net of cash and certain net working capital adjustments, to cover pension and restructuring liabilities recorded in 2020. As a result of the sale of the business, the Company recorded a pre-tax loss of $0.7 million. The final consideration and loss are subject to a working capital adjustment expected to be settled in 2022.

Employee Benefit Plans Settlement Expenses

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~Dollar Change~~

~~2020~~

~~2019~~

~~Dollar Change~~

Employee benefit plans settlement expenses

—

~~186~~385

~~(186)~~

~~385~~

~~25,701~~

~~(25,316)~~

In the first quarter of 2020, the Company settled the pension obligation of the Interface Sealing Solutions, Inc. Pension Plan through lump sum distributions to participants or by irrevocably transferring pension liabilities to an insurance company through the purchase of a group annuity contract. The settlement, funded with pension plan assets, resulted in a non-cash settlement expense of $0.4 million in the first quarter of 2020 related to the recognition of accumulated deferred actuarial losses.

In the second quarter of 2019, the Company settled the pension obligation of the U.S. Lydall Pension Plan through lump sum distributions to participants or by irrevocably transferring pension liabilities to two insurance companies through the purchase of group annuity contracts. The settlement, funded with Pension Plan assets, resulted in a non-cash settlement expense of $25.5 million in the second quarter of 2019 related to the recognition of accumulated deferred actuarial losses and an additional $0.2 million in the third quarter of 2019 to complete the termination of the pension plan.

Interest Expense

	For the Three Months Ended September 30,														For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021			~~2019~~2020			~~Percent Change~~		~~2020~~			~~2019~~			~~Percent Change~~
Interest expense	$	43,~~537~~448		$	32,~~666~~857		~~23.8~~	%	$	~~11,870~~		$	~~11,025~~		~~7.7~~	%
Weighted average interest rate	6.2		%	4.4		%			5.2		%	4.3		%
Weighted average interest rate during the year	5.1		%	4.4		%

The increase in interest expense for the three ~~and nine~~-month ~~periods~~period ended ~~September 30~~March 31, ~~2020~~2021 compared to the corresponding period in ~~2019~~2020 was primarily due to higher interest rates related to the amendment of the ~~Company's~~2018 ~~Facility~~Amended Credit Agreement in the second quarter of 2020, partially offset by reduction to interest expense due to the favorable interest rate differential between the U.S. dollar and Euro related to the net investment hedge the company entered into in ~~the fourth quarter of~~ 2019.

Other (Income) ~~Expense,~~and ~~net~~Expense

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~Dollar Change~~

~~2020~~

~~2019~~

~~Dollar Change~~

Other expense (income), net

~~276~~86

(~~885~~418)

~~1,161~~

~~106~~

~~(1,359)~~

~~1,465~~

Other expense (income), net, was unfavorable for the three-month period ended ~~September 30~~March 31, ~~2020~~2021 compared to the corresponding ~~2019~~2020 period primarily due to ~~the absence of a gain of $0.6 million recognized for a change in estimate of the contingent purchase price of the 2018 PCC acquisition and higher~~ foreign currency losses recognized on the revaluation of cash, trade payables and receivables and intercompany loans denominated in currencies other than the functional currencies of the Company's subsidiaries.

~~Other~~Effective ~~expense~~Income ~~(income),~~Tax net, was unfavorable for the nine-month period ended September 30, 2020 compared to the corresponding 2019 period primarily due to the absence of the $1.5 million gain on the sale of a business that occurred in the second quarter of 2019 and a gain of $0.7 million recognized for a change in estimate of the contingent purchase price of the PCC acquisition in the first nine months of 2019. Additionally, 2020 included higher foreign currency losses recognized on the revaluation of cash, trade payables and receivables and intercompany loans denominated in currencies other than the functional currencies of the Company's subsidiaries.Rate


	For the Three Months Ended March 31,
	2021		2020
Effective income tax rate	35.7	%	3.5	%

~~Income~~For ~~Taxes~~the three-month period ended March 31, 2021, the Company's effective tax rate was 35.7% compared to an effective tax rate of 3.5% for the three-month period ended March 31, 2020. For the three-month period ended March 31, 2021, the rate was negatively impacted by $0.5 million due to a change in assertion on unremitted foreign earnings, $0.4 million related to foreign earnings taxed at higher rates, and $0.2 million of valuation allowance activity. For the three-month period ended March 31, 2020, the Company had a pre-tax loss primarily resulting from an impairment charge of $61.1 million. The impairment charge significantly impacted the Company's effective tax rate as $48.7 million of the impairment charge related to non-deductible goodwill, resulting in a lower effective tax rate for the first quarter of 2020 when the Company was in a pre-tax loss position. Additionally, the effective rate, for the first quarter of 2020, was negatively impacted by valuation allowance activity of $0.3 million.

For the three-month period ended September 30, 2020, the Company's effective tax rate was 16.6% compared to an effective tax rate of 35.1% for the three-month period ended September 30, 2019. For the three months ended September 30, 2020, the rate was negatively impacted by valuation allowance activity of $2.0 million, offset by a state tax benefit of $0.8 million. resulting in a lower effective tax rate when in a pre-tax loss position. For the three months ended September 30, 2019, the effective tax rate was negatively impacted by losses in jurisdictions in which no tax benefit can be recognized.28

~~For~~SEGMENT the nine-month period ended September 30, 2020, the Company's effective tax rate was 6.3% compared to an effective tax rate of 97.0% for the nine-month period ended September 30, 2019. For the nine months ended September 30, 2020, the Company had a pre-tax loss primarily resulting from impairment charges of $61.1 million. The impairment charges significantly impacted the Company's effective tax rate because $48.7 million of the impairment charges related to non-deductible goodwill, resulting in a low effective tax rate for the nine months ended September 30, 2020 when in a pre-tax loss position. Additionally, the effective rate was negatively impacted by valuation allowance activity of $2.7 million. For the nine-month period ended September 30, 2019, the Company recorded a tax benefit of $5.5 million primarily driven by $10.5 million of tax benefit related to the pension plan settlement. Excluding the tax benefit of the pension plan settlement, the Company's effective tax rate for the nine months ended September 30, 2019 was 25.2%. This was negatively impacted by $1.8 million from losses in jurisdictions in which no tax benefit can be recognized, partially offset by the Company's geographical mix of earnings.RESULTS

The ~~Company~~following ~~and~~tables ~~its~~present ~~subsidiaries~~segment ~~file~~net asales ~~consolidated~~and ~~federal~~operating income ~~tax~~(loss) ~~return,~~for ~~as well as returns required by various state and foreign jurisdictions. In~~ the ~~normal~~primary ~~course~~product ofcategories ~~business,~~for the ~~Company~~three-month isperiods ~~subject~~ended ~~to examination by taxing authorities~~March 31, ~~including~~2021 ~~such major jurisdictions as the United States, Canada, China, France, Germany, Hong Kong, India, the Netherlands,~~ and ~~the United Kingdom~~2020. With few exceptions, the Company is no longer subject to U.S. federal examinations for years before 2016, state and local examinations for years before 2015, and non-U.S. income tax examinations for years before 2013.

The Company’s effective tax rates in future periods could be affected by an increase or decrease in earnings in countries where tax rates differ from the United States federal tax rate, the relative impact of permanent tax adjustments on earnings from domestic operations, changes in net deferred tax asset valuation allowances, including valuation allowances on loss carryforwards in which no tax benefit can be recognized, stock vesting, pension plan terminations, the completion of acquisitions or divestitures, changes in tax rates or tax laws and the completion of ongoing tax planning strategies and audits.

Segment Results

The following tables present segment net sales and operating income for the primary product and service categories for the three-month and nine-month periods ended September 30, 2020 and September 30, 2019, respectively.

Net sales by segment:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

In thousands

~~2020~~2021

~~2019~~2020

~~2020~~

~~2019~~

Performance Materials Segment:

Performance Materials Segment (1),(2):

Filtration

30,899

22,427

86,422

71,093

Filtration Products

34,346

25,887

Sealing and Advanced Solutions

36,918

37,573

105,088

118,589

Sealing and Advanced Solutions Products

44,987

39,333

Performance Materials Segment net sales

6779,~~817~~333

6065,~~000~~220

~~191,510~~

~~189,682~~

Technical Nonwovens Segment (1):

Technical Nonwovens Segment:

Industrial Filtration

29,643

32,935

90,425

114,005

Industrial Filtration Products

36,401

31,369

Advanced Materials (2)

28,866

30,977

77,494

84,591

Advanced Materials Products (2)

25,274

26,034

Technical Nonwovens Segment net sales

5861,~~509~~675

6357,~~912~~403

~~167,919~~

~~198,596~~

Thermal Acoustical Solutions Segment:

Parts

7986,~~687~~494

8077,~~309~~321

~~189,456~~

~~250,591~~

Tooling

54,~~836~~550

76,~~617~~440

~~17,276~~

~~24,920~~

Thermal Acoustical Solutions Segment net sales

8591,~~523~~044

8783,~~926~~761

~~206,732~~

~~275,511~~

Eliminations and Other (2)

(4,~~764~~953)

(65,~~564~~857)

~~(12,389)~~

~~(19,679)~~

Consolidated Net Sales

~~207~~227,~~085~~099

~~205~~200,~~274~~527

~~553,772~~

~~644,110~~

Operating income (loss) by segment:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
In thousands	~~2020~~2021		~~2019~~2020		~~2020~~		~~2019~~
Performance Materials (3)	$	(6,759)	$	712	$	(58,257)	$	5,474
Performance Materials (1),(3)	$	15,296	$	(56,941)
Technical Nonwovens (1),(2),(4)	5,061		7,165		15,558		19,743
Technical Nonwovens (4)	5,104		3,813
Thermal Acoustical Solutions	1,~~174~~674		5,~~022~~628		~~517~~		~~21,870~~
Corporate Office Expenses	(89,~~757~~935)		(58,~~452~~068)		~~(24,413)~~		~~(17,411)~~
Consolidated Operating Income	$	(9,281)	$	7,447	$	(66,595)	$	29,676
Consolidated Operating Income (Loss)	$	12,139	$	(55,568)

(1)The ~~Technical~~Performance ~~Nonwovens~~Materials segment includes the results of ~~Geosol~~the ~~through~~facility ~~the~~in ~~date~~German ofthat ~~disposition~~the ofCompany ~~May~~sold 9on March 11, ~~2019~~2021.

(2)Included in the Performance Materials segment, Technical Nonwovens segment, and Eliminations and Other is the following:

•Technical Nonwovens segment intercompany sales of $3.9 million and $45.30 million ~~of intercompany sales~~ to the Thermal Acoustical Solutions segment for the three-month periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020, respectively.

•Performance Materials segment intercompany sales of $101.20 million and $130.69 million ~~of intercompany sales~~ to the Thermal Acoustical Solutions segment for the ~~nine~~three-month periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020, respectively.

(3)Included in the operating results within the Performance Materials segment isare the following:

•$61.1 million of impairment charges related to goodwill and other long-lived assets for the ~~nine~~three-month period ended ~~September~~March 3031, 2020.

•$143.80 million ~~restructuring~~and ~~charges~~$4.0 million of intangible assets amortization for the three ~~and nine~~-month periods ~~ending~~ended ~~September 30~~March 31, 2021 and 2020., respectively.

•$4.0 million and $4.1 million of intangible assets amortization for the three-month periods ended September 30, 2020 and 2019, respectively.

•$11.9 million and $12.2 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively.

(4)Included in the Technical Nonwovens segment is the following:

•$1.21 million and $1.32 million of intangible assets amortization for the three-month periods ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020, respectively.

~~•$3.5 million and $3.8 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively.~~29

Performance Materials

Segment net sales increased $714.81 million, or 21.6%, in the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020. The increase was primarily driven by higher net sales in filtration of $8.5 million asdue ~~demand~~to ~~increased~~the demand in the air filtration market for face mask media in response to the COVID-19 pandemic. ~~This~~ ~~increase~~Additionally, ~~was partially offset by lower~~ sealing and advanced solutions ~~net~~ sales ofincreased $05.7 million asdriven ~~these products partially serve the automotive industry and were impacted~~ by ~~lower~~strong demand asfor ~~automotive~~sealing ~~customers~~in ~~continued~~agriculture, toconstruction, ~~ramp-up~~and ~~production~~transportation ~~following~~end ~~shutdowns~~markets, inas ~~the~~well ~~first~~as ~~half~~higher ofdemand ~~2020~~for ~~related~~cryogenic toinsulation ~~COVID-19~~products. Foreign currency translation positively impacted segment net sales by $01.97 million, or 12.6%.

The Performance Materials segment reported an operating ~~loss~~income of ($615.8)3 million, or 19.3% of segment sales, in the ~~third~~first quarter of ~~2020~~2021, compared to an operating ~~income~~loss of ($056.79) million in the ~~third~~first quarter of ~~2019~~2020. The ~~decrease~~increase in operating income of $772.52 million was primarily driven by ~~segment~~the ~~restructuring~~absence of goodwill and other long-lived asset impairment charges of $1461.81 million recorded in the ~~third~~first quarter of 2020. ~~This~~ ~~decrease~~The ~~was~~increase ~~partially~~in ~~offset~~operating income of $11.1 million, excluding the first quarter 2020 impairment charges, was driven by an improvement in ~~segment~~ gross margin of ~~780~~940 basis points, primarily related to favorable product mix from ~~increased~~continued demand for face mask media, ~~combined~~higher ~~with~~demand ~~lower~~in ~~material~~the ~~commodity~~sealing and ~~production~~cryogenics markets, and lower fixed costs driven by the 2020 restructuring activities. ~~Additionally~~Selling, ~~selling,~~ product development and general administrative expenses ~~decreased~~increased $0.31 million, ordecreasing ~~280~~340 basis points as a ~~percent~~percentage of ~~segment~~ net sales, ~~primarily~~due ~~driven~~to bysegment ~~lower~~restructuring ~~travel~~charges ~~expenses~~ of $0.47 million, ~~lower~~and ~~salaries~~higher ofaccrued ~~$0.2~~cash ~~million,~~incentive ~~lower~~compensation ~~bad debt expense~~ of $0.23 million, ~~and~~which ~~reduced~~was ~~other~~largely ~~general administrative costs of $0.1 million. These decreases were partially~~ offset by ~~increased~~lower ~~accrued~~intangible ~~cash~~amortization ~~incentive~~costs ~~compensation~~ of $0.69 million.

Segment net sales increased $1.8 million for the nine-month period ended September 30, 2020 compared to the corresponding period in 2019. The increase was driven by the drivers noted above. Foreign currency translation had a marginal impact on segment net sales in the first nine months of 2020 compared to the first nine months of 2019.

The Performance Materials segment reported an operating loss of ($58.3) million for the nine-month period ended September 30, 2020, compared to operating income of $5.5 million for the corresponding 2019 period. The decrease in operating income of $63.7 million was primarily driven by goodwill and other long-lived asset impairment charges of $61.1 million in the first quarter of 2020 and segment restructuring charges of $14.8 million in the third quarter of 2020. This decrease was partially offset by an improvement in segment gross margin of 460 basis points, primarily due to favorable product mix driven by increased demand for face mask media, lower material commodity and production costs, lower fixed overhead costs from savings driven by the fourth quarter 2019 reduction-in-force program, and lower depreciation expense related to the asset-write off in one of the segment's European plants in the first quarter of 2020. Additionally, selling, product development and general administrative expenses decreased $2.9 million, or 170 basis points as a percent of segment net sales, primarily driven by decreased travel, consulting, and salaries expenses, partially offset by increased accrued cash incentive compensation.

Technical Nonwovens

Segment net sales ~~decreased~~increased $5.4.3 million, or 87.54%, in the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020. Industrial filtration net sales ~~decreased~~increased $35.30 million, or 1016.0%, driven by ~~soft~~a ~~industrial~~86% ~~end~~increase ~~markets,~~in ~~primarily~~China ~~air~~sales ~~filtration,~~compared into ~~North~~the ~~America~~prior ~~and~~year ~~Europe~~due to key wins for steel, ascement aand ~~result~~power projects and the absence of the COVID-19 pandemic related shutdowns experienced in the first quarter of 2020. Advanced materials net sales decreased $20.18 million, or 62.89%, in the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020, driven primarily by lower ~~geosynthetic~~domestic ~~product~~demand, partially offset by higher demand in the geosynthetics market in Canada. Foreign currency translation positively impacted segment net sales by $03.82 million, or 15.26%.

The Technical Nonwovens segment reported operating income of $5.1 million, or 8.63% of segment net sales, in the ~~third~~first quarter of ~~2020~~2021, compared to $73.28 million, or 116.26% of net segment sales, in the ~~third~~first quarter of ~~2019~~2020. The ~~decrease~~increase in operating income of $2.1.3 million was primarily driven by ~~lower~~an ~~sales~~improvement ~~adversely~~in ~~impacting~~gross ~~operating~~ margin byof ~~260~~190 basis points., ~~The~~primarily ~~decrease~~related into ~~operating~~the ~~margin~~absence ~~was~~of ~~primarily~~a ~~driven~~$0.9 bymillion ainventory ~~decrease~~charge in ~~gross~~the ~~margin~~first quarter of ~~180~~2020 ~~basis points, primarily~~ related to ~~reduced~~a ~~customer~~flood ~~pricing,~~in ~~unfavorable~~one ~~product~~of ~~mix,~~its ~~and~~European ~~unfavorable~~facilities. ~~absorption on overhead costs~~Selling, ~~partially~~product ~~offset~~development byand ~~lower~~general ~~material~~administrative ~~commodity~~expenses ~~and~~increased ~~productivity costs~~$0.6 ~~Selling~~million, ~~product~~or ~~development~~20 ~~and~~basis ~~general~~points ~~administrative~~as ~~expenses~~a ~~were~~percentage ~~flat~~of ~~with~~segment ~~prior~~net ~~year~~sales, ~~with~~primarily driven by an increase in ~~compensation~~salaries ~~costs~~expense ~~offset~~of by$0.7 ~~lower travel costs~~million.

Segment net sales decreased $30.7 million, or 15.4%, in the first nine months of 2020 compared to the first nine months of 2019. Foreign currency translation had a negative impact on segment net sales of $1.3 million, or 0.7%, in the first nine months of 2020 compared to the corresponding period in 2019. Industrial filtration net sales decreased $23.6 million, or 20.7%, driven by soft global industrial end markets across all regions as a result of the COVID-19 pandemic, coupled with the negative impact

of foreign currency. Advanced materials net sales decreased $7.1 million, or 8.4%, driven by $3.4 million in lower sales of automotive rolled-good material due to the plant ramp-downs in the first half of 2020 caused by COVID-19, coupled with lower geosynthetic product demand in Canada.

The Technical Nonwovens segment reported operating income of $15.6 million, or 9.3% of segment net sales, in the first nine months of 2020, compared to $19.7 million, or 9.9% of segment net sales, in the first nine months of 2019. The decrease in operating income of $4.2 million was driven by lower sales volume due to the COVID-19 pandemic, resulting in operating margin erosion of 60 basis points. The decrease in operating margin was primarily driven by higher selling, product development and general administrative expenses of 70 basis points, as a percentage of segment net sales, partially offset by improved gross margin of 10 basis points, as a percentage of segment sales. The gross margin improvement was primarily driven by lower raw material commodity costs and favorable product mix in North America related to personal protective equipment, partially offset by higher labor and variable overhead costs. The increase in selling, product development and general administrative expenses, as a percentage of segment net sales, was primarily due to the $30.7 million reduction in sales, but was partially offset by decreased expenses of $1.9 million, primarily driven by lower salaries expenses of $0.8 million, a decrease in travel expenses of $0.6 million, lower intangible amortization expense of $0.3 million, and lower other general administrative costs of $0.2 million.

Thermal Acoustical Solutions

Segment net sales ~~decreased~~increased $27.43 million, or 28.7%, in the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020. This ~~decrease~~increase was primarily due to ~~lower~~an ~~tooling~~increase in parts sales of $19.82 million ~~and,~~driven toby ahigher ~~lesser~~sales ~~extent,~~across ~~lower~~all ~~net~~regions. ~~parts~~During ~~sales~~the offirst ~~$0.6~~quarter ~~million~~2020, assales ~~the~~were ~~Company~~adversely ~~continues~~impacted by temporary plant shutdowns due to ~~ramp~~the COVID-up19 ~~production~~pandemic. inThis ~~line~~increase ~~with~~was ~~it's~~partially ~~large~~offset ~~OEM~~by ~~customers~~lower ~~ramp-up~~tooling ~~after~~sales ~~plant~~of ~~closures~~$1.9 million in the first ~~half~~quarter of ~~2020~~2021 ~~due~~compared to the ~~COVID-19~~first ~~pandemic~~quarter of 2020. Foreign currency translation favorably impacted segment net sales by $12.36 million, or 13.50%.

The Thermal Acoustical Solutions segment ~~reported~~ operating income ofwas $1.27 million, or 1.48% of segment net sales, in the ~~third~~first quarter of ~~2020~~2021, compared to operating income of $5.06 million, or 56.7% of segment net sales, in the ~~third~~first quarter of ~~2019~~2020. The decrease in operating income of $3.89 million, or ~~430~~490 basis points, as a percentage of segment net sales, was primarily due to the degradation of gross margin of ~~350~~430 basis points driven by ~~operating~~higher ~~inefficiencies~~labor ~~due~~and tooutsourcing costs from work force shortages ~~directly~~ related to ~~an increase in~~ COVID-19 ~~cases,~~in ~~resulting~~the inearly ~~higher~~part ~~expedited~~of ~~freight~~2021. ~~and~~Gross ~~temporary~~margin ~~labor~~was ~~costs~~also asnegatively ~~the~~impacted ~~Company~~by ~~continued~~higher toraw ~~ramp-up~~material ~~production~~commodity atcosts ~~its~~related ~~facility~~to an increase in ~~North~~market ~~America~~pricing toof ~~meet~~aluminum ~~its~~and ~~large~~aluminized ~~OEM~~steel ~~customers'~~in ~~demand~~the first quarter of 2021. Operating income was further impacted by an increase in selling, product development and administrative expenses of $01.50 million, ~~for~~or 60 basis points as a percentage of segment net sales, driven by higher ~~compensation~~salaries and ~~consulting~~recruiting ~~expenses,~~costs ~~partially~~of ~~offset~~$0.4 bymillion ~~lower~~and higher other general administrative costs of $0.6 million.

Segment net sales decreased $68.8 million, or 25.0%, for the nine-month period ended September 30, 2020 compared to the corresponding 2019 period. This decrease was primarily due to lower net parts sales of $61.1 million, driven by temporary plant ramp-downs across all of its operations in the first half of 2020 as the Company's large OEM customers closed plants due to the COVID-19 pandemic. Additionally, net tooling sales decreased $7.6 million compared to the corresponding 2019 period. Foreign currency translation had a marginal impact on segment net sales.

The Thermal Acoustical Solutions segment reported operating income of $0.5 million, or 0.3% of segment net sales, for the nine-month period ended September 30, 2020 compared to operating income of $21.9 million, or 7.9% of segment net sales, for the corresponding 2019 period. The decrease in operating income of $21.4 million was primarily due to the degradation of gross margin driven by the significant reduction in segment net sales due to the COVID-19 pandemic in addition to the operating inefficiencies in North America that occurred in the third quarter as discussed above. Selling, product development and administrative expenses decreased $0.7 million; however, as a percentage of net sales, increased due to the significant sales volume reduction. The reduction in selling, product development and administrative costs was driven by lower employee-related costs and travel expenses, partially offset by an increase in bad debt expense of $0.3 million and higher consulting expenses of $0.2 million.

Corporate Office Expenses

Corporate office expenses for the three-month period ended ~~September 30~~March 31, ~~2020~~2021 were $89.89 million, compared to $58.51 million in the corresponding period in ~~2019~~2020. The increase of $31.38 million was primarily due to ~~an increase in compensation-related costs of $1.9 million,~~ higher consulting costs of $02.50 million, ~~and~~ an ~~increase in other general administrative expenses of $0.9 million in the third quarter of 2020 compared to the third quarter of 2019.~~

~~Corporate office expenses for the nine-month period ended September~~ 30~~, 2020 were $24.4 million, compared to $17.4 million in the corresponding period in 2019. The increase of $7.0 million was primarily due to an increase in corporate strategic~~

44increase in employee compensation-related costs of $1.4 million, and increased other general administrative costs of $0.2 million. These increases were partially offset by lower corporate strategic initiatives expenses of $1.8 million.

~~initiatives~~LIQUIDITY ~~expenses~~AND ofCAPITAL ~~$1.9 million, higher compensation-related costs of $2.9 million, an increase in stock compensation expense of $0.5 million and higher other general administrative expenses of $1.7.~~RESOURCES

~~Liquidity~~The Company assesses liquidity in terms of its ability to generate cash to fund operating, investing and ~~Capital~~financing ~~Resources~~activities. The Company's principal source of liquidity is operating cash flows and bank borrowings. In addition to operating cash flows, other significant factors that affect the overall management of liquidity include capital expenditures, investments in businesses, strategic transactions, income tax payments, debt service payments, outcomes of commitments and contingencies, foreign currency exchange rates, employee benefit plan funding and factors that might otherwise affect the company's business and operations generally, as described under the heading “Risk Factors” and “Forward-Looking Statements” in Part I, Item 1A - Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The Company manages worldwide cash requirements by considering available funds among domestic and foreign subsidiaries.

The Company ~~assesses~~continues ~~its~~to ~~liquidity~~manage inworking ~~terms~~capital ofeffectively ~~its~~through ~~ability~~inventory tomanagement ~~generate~~and ~~cash~~using toconsigned ~~fund~~inventory ~~operating~~arrangements where appropriate, ~~investing~~taking ~~and~~advantage ~~financing~~of ~~activities.~~early ~~The~~pay ~~principal~~discounts ~~source~~when ofoffered ~~liquidity~~by issuppliers, ~~operating~~and ~~cash~~optimizing ~~flows~~accounts ~~and~~receivable ~~borrowings~~collections ~~under~~by ~~the~~selling ~~Credit~~trade ~~Facility~~accounts receivable balances when appropriate. In ~~addition~~A toselect ~~operating~~number ~~cash~~of ~~flows,~~larger ~~other~~customers ~~significant~~negotiate ~~factors~~longer ~~that~~payment ~~affect~~terms. ~~the~~These ~~overall~~selected ~~management~~customers ofoffer ~~liquidity~~early ~~include~~pay ~~capital~~discounts ~~expenditures,~~and/or ~~investments~~supply inchain ~~businesses,~~financing ~~strategic~~agreements ~~transactions,~~that ~~income~~allows ~~tax~~the ~~payments,~~Company ~~debt~~to ~~service~~collect ~~payments,~~amounts ~~outcomes~~due ofearlier ~~contingencies~~than the customer negotiated terms, ~~foreign~~less ~~currency~~a ~~exchange~~discount ~~rates~~on ~~and~~the ~~employee~~nominal ~~benefit~~value ~~plan~~of ~~funding~~the receivable. The Company ~~manages~~also ~~worldwide~~entered ~~cash~~into ~~requirements~~arrangements bywith ~~considering~~a ~~available~~banking ~~funds~~institution ~~among~~to ~~domestic~~sell ~~and~~trade ~~foreign~~accounts ~~subsidiaries. The~~receivable ~~Company~~balances ~~expects~~for toselected ~~finance~~customers. ~~its~~See ~~2020~~“Transfers ~~operating~~of ~~activities~~Financial ~~and~~Assets” ~~capital~~in ~~spending~~Note ~~requirements~~1, ~~from~~“Basis ~~existing~~of ~~cash~~Financial ~~balances~~Statement Presentation,” ~~cash~~in ~~provided~~the byNotes ~~operating~~to ~~activities~~Condensed ~~and~~Consolidated ~~through~~Financial ~~borrowings~~Statements ~~under~~for ~~the~~additional ~~Credit Facility, as needed~~information.

InFuture ~~December~~Cash ~~2019,~~Requirements the Company entered into two arrangements with a banking institution to sell trade accounts receivable balances for select customers. In the three-month and nine-month periods ended September 30, 2020, under both programs, the Company sold $21.3 million and $64.3 million, respectively, in trade receivable balances, received $59.1 million in total cash under the programs. The Company expects to receive the remainder, net of fees, in the fourth quarter of 2020. See “Transfer of Financial Assets” in Note 1, “Basis of Financial Statement Presentation” for additional information.

InAt ~~June~~March ~~2020~~31, 2021, the Company ~~reached~~held ~~an agreement with the U~~$88.S.7 million ~~Government~~in ~~that~~cash ~~provides~~and ~~funding~~cash ~~to cover a portion of the cost to install two new production lines for the production of meltblown material for N95 respirator~~equivalents, ~~surgical~~including ~~and medical masks and for other technical resources~~$23.1 million ~~The Company will receive monthly payments~~ in ~~accordance~~the U.S. with the ~~agreement~~remaining toheld ~~fund~~by upforeign tosubsidiaries and $13261.5 million. ~~Additionally,~~of ~~the~~borrowings ~~Company~~outstanding ~~has~~and astandby ~~tentative~~letters ~~agreement~~of ~~with~~credit ~~the~~outstanding ~~French Government to fund up to 30%~~ of ~~the~~$1.8 million ~~Company’s~~under ~~investment in its facility in France supporting~~ the ~~European~~2018 ~~Union~~Amended ~~face~~Credit ~~mask production and air filter production~~Agreement.

AtIn ~~September 30,~~addition ~~2020,~~to the Company’s ~~held~~working ~~$122.0~~capital ~~million in cash and cash equivalents~~requirements, ~~including~~one ~~$62.8~~or ~~million~~more inof the ~~U.S.~~following ~~with~~items ~~the~~could ~~remaining~~have ~~held~~a bymaterial ~~foreign~~impact ~~subsidiaries~~on ~~and~~the ~~$283.5~~Company’s ~~million~~liquidity ofduring ~~borrowings~~the ~~outstanding~~next ~~and~~twelve ~~standby~~months ~~letters~~(items ofare ~~credit~~not ~~outstanding~~in ofthe ~~$1.8~~order ~~million.~~of importance):

~~The Company’s continued access to sources of liquidity depends on multiple factors, including global economic conditions,~~ •the ~~COVID-19~~matters ~~pandemic’s~~described ~~effects~~in onNote ~~its customers and their production rates~~15, ~~the~~“Commitments ~~condition of global financial markets, the availability of sufficient amounts of financing, its operating performance~~ and ~~its credit ratings. The Company borrowed $20 million under the revolver portion of its Facility during the first quarter of 2020~~Contingencies,” in ~~order to increase its cash position and preserve financial flexibility in light of~~ the ~~impact~~Notes ~~of the COVID-19 outbreak on its results of operations and liquidity. The Company is taking further actions~~ to ~~improve~~Condensed ~~its~~Consolidated ~~liquidity,~~Financial ~~including capital expenditure and operating expense reductions and increased management and oversight of its working capital.~~ Statements;

~~Interest~~•capital ~~rates on amounts outstanding under the Credit Agreement are variable based on LIBOR. The LIBOR benchmark has been the subject of national~~expenditures, ~~international,~~including ~~and other regulatory guidance and proposals for reform. In July 2017,~~ the ~~U.K.~~strategic ~~Financial~~investments ~~Conduct~~discussed Authority announced that it intends to stop persuading or compelling banks to submit rates for calculation of LIBOR after 2021. These reforms may cause LIBOR to perform differently than in the past, and LIBOR may ultimately cease to exist after 2021. Alternative, benchmark rate(s) may replace LIBOR and could affect the Company's debt securities, derivative instruments, receivables, debt payments and receipts. At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates. Any new benchmark rate will likely not replicate LIBOR exactly, which could impact the Company's contracts that terminate after 2021. There is uncertainty about how applicable law, the courts or the Company will address the replacement of LIBOR with alternative rates on variable rate retail loan contracts and other contracts that do not include alternative rate fallback provisions. In addition, any changes to benchmark rates may have an uncertain impact on the Company's cost of funds and access to the capital markets, which could impact liquidity, financial position or results of operations. below;

~~The~~•investments ~~Company~~in ~~continues~~businesses toand ~~assess~~ strategic ~~initiatives that could result in~~ costs ~~being~~and/or ~~incurred~~transactions; ~~in future quarters related to restructuring activities.~~

45•restructuring and severance costs (see Note 11, “Restructuring,” in the Notes to Condensed Consolidated Financial Statements);

~~Financing~~•income ~~Arrangements~~tax payments;

~~2020~~•research ~~Amendment~~and todevelopment ~~the 2018 Credit Agreement~~expenditures;

On•costs ~~August 31, 2018, the Company amended~~ and ~~restated~~payments ~~its~~associated ~~$175~~with ~~million~~tooling senior secured revolving credit agreement ("2018 Credit Agreement") which increased the available borrowing from $175 million to $450 million, added three additional lenders and extended the maturity date from July 7, 2021 to August 31, 2023. On May 11, 2020, the Company amended its 2018 Credit Agreement ("2020 Amendment") which, among other changes, modified certain financial covenants contained in the 2018 Credit Agreement, decreased the term loan facility from $200 million to $144 million and reduced the revolving credit facility from $250 million to $170 million. On October 14, 2020, the Company amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. See Note 6, “Long-term Debt and Financing Arrangements” for ~~additional~~new ~~information.~~OEM programs;

~~The~~•debt ~~Company~~service ~~has an interest rate swap in place to convert a portion of the Company's borrowings from a variable rate to a fixed rate. See Note 7, "Derivatives" for additional information.~~payments;

•employer payroll tax payments deferred under the CARES Act;

•foreign currency exchange rates;

•employee benefit plan funding (see Note 10, “Employer Sponsored Benefit Plans,” in the Notes to Condensed Consolidated Financial Statements); and

•repurchase of common stock under the Company's Share Repurchase Program.

The Company expects to contribute approximately $0.7 million to its domestic defined employee benefit plan in 2021.

Strategic Investments

In 2020, the Company approved investments to add capital equipment in North America and Europe to produce fine fiber meltblown filtration media in the Performance Materials segment. In North America, the Company is investing approximately $25.0 million for two production lines in its Rochester, New Hampshire facility. The Company received a $13.5 million grant from the U.S. Government to partially fund this investment. The cumulative capital expenditures incurred for this ongoing project was $8.5 million through March 31, 2021, net of $12.3 million in funding from the U.S. Government.

In Europe, the Company is investing approximately $13.0 million for a production line in its Saint-Rivalain, France facility to meet the European Union demand for face mask and air filtration products. This investment is being partially funded by a grant

from the French Government that provides funding up to 30% of the investment. The cumulative capital expenditures incurred for this ongoing project was $8.0 million through March 31, 2021, net of $3.2 million in funding from the French Government.

Discussion and Analysis of Cash Flows

A summary of the Company's consolidated cash flows is as follows:


	For the Three Months Ended
In thousands	March 31, 2021		March 31, 2020		2021 vs. 2020
Total cash provided by (used for):
Operating activities	$	220	$	26,741	$	(26,521)
Investing activities	(9,455)		(7,499)		(1,956)
Financing activities	(4,501)		18,375		(22,876)

Free Cash Flow (1):
Net cash provided by (used for) operating activities	220		26,741		(26,521)
Capital expenditures	(8,119)		(9,157)		1,038
Free cash flow	$	(7,899)	$	17,584	$	(25,483)

(1) Free Cash Flow, a non-U.S. GAAP financial measure, is defined as net cash provided by operating activities less capital expenditures, both of which are presented in the Company’s Condensed Consolidated Statements of Cash Flows. See Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures for more information regarding Free Cash Flow.

Operating Cash Flows

Net cash provided by operating activities for the ~~nine~~three-month period ended ~~September 30~~March 31, ~~2020~~2021 was $740.62 million compared with ~~$63.0 million in the corresponding period in 2019. In the first nine months of 2020,~~ net ~~loss and non-~~cash ~~adjustments~~provided ~~were~~by ~~$25.6~~operating ~~million~~activities ~~compared~~of to $4926.97 million in the ~~first~~corresponding ~~nine months of 2019. Since December 31, 2019, net operating assets and liabilities decreased by $49.0 million, compared to $13.0 million during the comparative nine-month~~ period ~~beginning December 31, 2018. The decrease~~ in ~~working capital since December 31, 2019 was primarily due to an increase of $28~~2020.4 ~~million~~The ~~in accounts payable,~~ $726.2 5 million ~~in accrued payroll and other compensation and an~~ decrease ofis ~~$10.1~~driven inprimarily ~~inventory, partially offset~~ by anhigher ~~increase in~~ accounts ~~receivable of $8.3 million. The increase in accounts payable was primarily driven by the timing of vendor payments~~receivables, ~~including~~as ~~capital~~a ~~expenditures~~result ~~within all segments~~ of ~~the~~higher ~~Company.~~sales ~~The~~volume ~~increase~~and inlower accounts ~~receivable~~payables ~~was primarily~~ due to ~~higher net sales in~~ the ~~third~~timing ~~quarter~~ of ~~2020~~payments ~~compared~~for toraw ~~the~~material ~~fourth quarter of 2019~~purchases.

Investing Cash Flows

InDuring the ~~nine~~three-month periods ended ~~September 30~~March 31, ~~2020~~2021 and ~~2019~~2020, net cash used for investing activities consisted of capital expenditures of $208.51 million and $279.2 million, respectively. In the first nine months of 2020 net cash used for investing activities was partially offset by $4.3 million in cash inflows for collections of finance receivables under the Company’s receivable financing arrangements. In the first nine months of 2019, net cash used for investing activities included cash proceeds of $1.4 million from a final purchase price adjustment for the Interface acquisition less cash outflows of $0.5 million to fund an acquisition. The Company also ~~received~~paid ~~proceeds of~~ $2.3 7 million ~~from~~in ~~the~~connection ~~divestiture~~with of the ~~Geosol~~sale ~~business~~of ~~during~~a ~~the~~facility ~~second~~in ~~quarter of 2019~~Germany.

Financing Cash Flows

InDuring the ~~nine~~three-month period ended ~~September 30~~March 31, ~~2020~~2021, net cash ~~provided~~used byfor financing activities was $104.75 million compared to net cash ~~used~~provided ~~for~~by financing activities of $3818.24 million in the corresponding period in ~~2019~~2020. The Company made debt repayments of $9.5 million and $384.25 million in the first ~~nine~~three months of ~~2020~~2021 and ~~2019~~2020, respectively. InDuring the first ~~nine~~quarter ~~months~~ of 2020, the Company borrowed an incremental $20.0 million ~~from~~under its 2018 Amended Credit ~~Facility~~Agreement as a precautionary measure in light of the uncertainty caused by the COVID-19~~. The~~ ~~Company held $0~~pandemic.~~2 million in proceeds from servicing receivables owed to the banking institution which was paid in October.~~

~~Critical~~Other ~~Accounting~~Sources ~~Estimates~~and Use of Cash

~~The~~On ~~preparation~~April of20, 2021, the Company’s ~~consolidated~~announced ~~financial~~that ~~statements~~our inBoard ~~accordance~~of ~~with~~Directors ~~accounting~~approved ~~principles~~a ~~generally~~Share ~~accepted~~Repurchase inProgram authorizing the ~~United~~repurchase, ~~States~~from oftime ~~America requires management~~ to ~~make~~time ~~estimates~~at ~~and assumptions that affect~~ the ~~reported~~Company's ~~amounts~~discretion, of ~~assets~~up ~~and~~to ~~liabilities~~an ~~and~~aggregate ~~disclosure~~ of ~~contingent~~$30 million ~~assets and liabilities as~~ of ~~the~~common ~~date~~stock, ofpar ~~the~~value ~~financial~~$0.01 ~~statements~~per ~~and~~share, ~~the reported amounts~~ of ~~revenues and expenses during~~ the ~~reporting periods~~Company. ~~Note~~ 1,The ~~"Significant~~ability ~~Accounting Policies" of the “Notes~~ to ~~Consolidated~~repurchase ~~Financial Statements” and Critical Accounting Estimates in Item 7 of~~ the Company’s ~~Annual~~common ~~Report~~stock onwill ~~Form~~continue ~~10-K~~until ~~for~~ the ~~year~~Board ~~ended~~of ~~December 31,~~Directors ~~2019,~~reaches ~~and~~a ~~the~~determination ~~“Notes~~ to ~~Condensed~~discontinue ~~Consolidated~~share ~~Financial~~repurchases. ~~Statements”~~The oftiming ~~this~~and ~~report~~actual ~~describe~~amount ~~the~~of ~~significant~~shares ~~accounting~~repurchased ~~policies~~will ~~and~~depend ~~critical~~on ~~accounting~~a ~~estimates~~variety ~~used in the preparation~~ of ~~the~~factors ~~consolidated~~including ~~financial~~stock ~~statements. The~~price, ~~Company’s~~market ~~management~~conditions, iscorporate ~~required~~and toregulatory ~~make~~requirements, ~~judgments~~ and ~~estimates~~capital ~~about~~availability, ~~the~~among ~~effect~~other ~~of matters that are inherently uncertain~~factors. ~~Actual~~ ~~results could differ from management’s estimates.~~

46Financing Arrangements

~~During~~The ~~the~~Company's ~~three-month~~2018 ~~period~~Amended ~~ended~~Credit ~~March 31,~~Agreement ~~2020,~~has ~~the Company recorded~~ a ~~goodwill~~revolving ~~impairment~~commitment ~~charge~~ of $~~48.7~~170 million, and a ~~long-lived~~term ~~asset~~loan ~~impairment~~commitment ~~charge~~ of $~~12.4~~144 million~~, both in the Performance Materials reporting unit~~. ~~See~~ Note 5, "Impairments of Goodwill and Other Long-Lived Assets", to the “Notes to Condensed Consolidated Financial Statements” of this report for additional discussion of the facts and circumstances surrounding and critical estimates made regarding the impairment charges. The Company continues to monitor the recoverability of the long-lived assets within the Thermal Acoustical Solutions segment taking into consideration on-going financial results and automotive market conditions.

~~There have been no other significant changes in the Company’s critical accounting estimates during the nine-month period ended September 30, 2020.~~32

47Interest rates on amounts outstanding under the 2018 Amended Credit Agreement are variable based on LIBOR. The LIBOR benchmark has been the subject of national, international, and other regulatory guidance and proposals for reform. In July 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit rates for calculation of LIBOR after 2021. These reforms may cause LIBOR to perform differently than in the past, and LIBOR may ultimately cease to exist after 2021. Alternative, benchmark rate(s) may replace LIBOR and could affect the Company's debt securities, derivative instruments, receivables, debt payments and receipts. At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates. Any new benchmark rate will likely not replicate LIBOR exactly, which could impact the Company's contracts that terminate after 2021. There is uncertainty about how applicable law, the courts or the Company will address the replacement of LIBOR with alternative rates on variable rate retail loan contracts and other contracts that do not include alternative rate fallback provisions. In addition, any changes to benchmark rates may have an uncertain impact on the Company's cost of funds and access to the capital markets, which could impact liquidity, financial position, or results of operations.

~~Item~~Borrowings 3.outstanding ~~Quantitative~~ and ~~Qualitative~~available ~~Disclosures~~borrowings ~~about~~are ~~Market~~summarized ~~Risk~~below:

The Company’s limited market risk exposures relate to changes in foreign currency exchange rates and interest rates.


In thousands	At March 31, 2021		At December 31, 2020
Total borrowings committed:
Revolver commitment	$	170,000	$	170,000
Term loan commitment	144,000		144,000
Total borrowings committed	314,000		314,000

Total borrowings outstanding:
Amounts outstanding under the revolver	$	127,500	$	134,500
Amounts outstanding under the term loan, excluding debt issuance costs	134,000		136,500
Total borrowings outstanding	261,500		271,000

Total borrowings available:
Revolver commitment	$	170,000	$	170,000
Less amounts outstanding under the revolver	127,500		134,500
Less letters of credit outstanding	1,776		1,776
Available borrowings, net of letters of credit	$	40,724	$	33,724

Average bank borrowings	$	270,894	$	283,291

~~Foreign~~The ~~Currency~~Company ~~Risk~~is required to pay a quarterly commitment fee on the unused revolving commitment amount at a rate of 0.375% per annum, based on the unused portion of the revolver commitment. Fees for outstanding letters of credit range from 3.00% to 4.25%.

The Company has ~~operations~~an ininterest ~~France,~~rate ~~Germany,~~swap ~~China, the United Kingdom, Canada, India and the Netherlands,~~ in ~~addition~~place to ~~the~~convert ~~United States. As~~ a ~~result~~portion of ~~this,~~ the Company’'s ~~financial~~borrowings ~~results~~from ~~are~~a ~~affected~~variable byrate ~~factors~~to ~~such~~a asfixed ~~changes in foreign currency exchange rates or economic conditions in the foreign markets where the Company manufactures and distributes its products~~rate. ~~The~~See ~~Company’s~~Note ~~currency exposure is to the U.S. dollar~~7, ~~the Euro~~"Derivatives," ~~the~~in ~~Chinese Yuan,~~ the ~~British~~Notes ~~Pound Sterling, the Canadian Dollar, the Japanese Yen, the Indian Rupee and the Hong Kong Dollar. The Company’s foreign and domestic operations attempt~~ to ~~limit~~Condensed ~~foreign~~Consolidated ~~currency~~Financial ~~exchange~~Statements ~~transaction~~for ~~risk~~additional ~~by completing transactions in local functional currencies, whenever practicable~~information. ~~The Company may periodically enter into foreign currency forward exchange contracts to mitigate exposure to foreign currency volatility~~. In addition, the Company utilizes bank loans and other debt instruments throughout its operations. To mitigate foreign currency risk, such debt is denominated primarily in the functional currency of the operation maintaining the debt.

~~The~~On April 26, 2021, the Company ~~also~~replaced ~~has~~its ~~exposure~~2018 toAmended ~~fluctuations~~Credit inAgreement ~~currency~~with ~~risk~~a onnewly ~~intercompany~~executed ~~loans~~Credit ~~that~~Agreement ~~the~~increasing ~~Company~~total ~~makes~~borrowings tofrom ~~certain~~$314 ofmillion ~~its~~to ~~subsidiaries~~$346 million. The ~~Company~~new ~~may~~2021 ~~periodically~~senior ~~enter~~secured ~~into~~revolving ~~foreign~~credit ~~currency~~agreement ~~forward~~("2021 ~~contracts~~Credit Facility") has a revolving facility of $170.0 million, which ~~are~~includes ~~intended~~a to$50.0 ~~offset~~million sublimit for the ~~impact~~issuance of ~~foreign~~letters ~~currency~~of ~~movements~~credit, ona ~~the~~$50.0 ~~underlying~~million ~~intercompany~~sublimit for alternative currencies loans and a $30.0 million sublimit for swingline loans, and a term loan ~~obligations~~facility of $176.0 million.

Interest is charged on borrowings, at the Company’s option, of either: (i) LIBOR (if LIBOR is not available for an alternative currency, such other interest rate customarily used by Bank of America for such alternative currency) plus the Applicable Margin, or (ii) for U.S. denominated loans the Base Rate, ~~Risk~~which is a fluctuating rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate as set by the Administrative Agent, and (c) the one month LIBOR (adjusted daily) plus 1.00%, plus the Applicable Margin. The Applicable Margin is 2.00% per annum in the case of LIBOR and alternative currency loans and letters of credit and 1.00% per annum in the case of Base Rate loans for the first full fiscal quarter following the

The Company’s interest rate exposure is most sensitive to fluctuations in interest rates in the United States and Europe, which impact interest paid on its debt. The Company has borrowings outstanding of $283.5 million from its Amended Credit Facility at September 30, 2020, with variable rates of interest based generally on LIBOR. Increases in interest rates could therefore significantly increase the associated interest payments that the Company is required to make on this debt. From time to time, the Company may enter into interest rate swaps or other hedging agreements to manage interest rate risk.33

Inclosing ~~November~~date ~~2018,~~of the ~~Company~~2021 ~~entered~~Credit ~~into~~Facility. aThereafter, ~~five~~the ~~year~~Applicable ~~interest~~Margin ~~rate~~is ~~swap~~determined ~~agreement~~based ~~with a bank which converts the interest~~ on ~~a notional $139.0 million of~~ the Company'’s ~~one-month~~Consolidated ~~LIBOR-based~~Net ~~borrowings~~Leverage ~~under~~Ratio ~~its~~(as ~~2018~~defined ~~Credit~~in ~~Agreement~~the ~~from~~2021 aCredit ~~variable rate~~Facility), ~~plus~~which ~~the~~ranges ~~borrowing~~from ~~spread,~~1.25% to ~~a fixed rate of 3~~2.0950% ~~plus~~per ~~the~~annum ~~borrowing~~for ~~spread.~~LIBOR ~~The~~and ~~notional~~alternative ~~amount~~currency ~~reduces~~loans ~~quarterly~~and byletters ~~fluctuating~~of ~~amounts through August 2023. In April 2017~~credit, ~~the~~and ~~Company~~ranges ~~entered~~from ~~into~~0.25% ato ~~three-year~~1.50% ~~interest~~per ~~rate~~annum ~~swap~~for ~~agreement~~Base ~~with~~Rate ~~a bank which converts the interest on a notional $60~~loans.0 ~~million~~The ~~of the~~ Company's ~~borrowings~~pays ~~from~~ a ~~variable~~quarterly ~~rate,~~commitment ~~plus~~fee ~~the borrowing spread, to a fixed rate~~ of 10.58275% ~~plus~~per ~~the~~annum ~~borrowing~~on ~~spread.~~the ~~The~~unused ~~notional~~portion ~~amount reduced quarterly by $5.0 million through March 31, 2020 and is now settled. Effectiveness~~ of the ~~remaining~~revolving ~~derivative~~facility ~~agreement~~for ~~was~~the ~~assessed~~first ~~quarterly,~~full orfiscal ~~more~~quarter ~~frequently,~~following ~~if necessary, by ensuring that~~ the ~~critical~~closing ~~terms~~date of the ~~swap~~2021 ~~continues~~Credit toFacility. ~~match~~Thereafter, the ~~critical~~quarterly ~~terms~~commitment offee ~~the~~ranges ~~hedged~~from ~~debt~~0.20% ~~in order~~ to ~~report~~0.30% ~~gains~~per ~~or losses on the derivative instrument in other comprehensive income~~annum.

OnThe ~~May~~2021 ~~11,~~Credit ~~2020,~~Facility ~~the~~contains ~~Company~~customary ~~amended~~affirmative ~~its~~and ~~2018~~negative ~~Credit Agreement~~covenants, ~~see~~including ~~Note~~covenants 6,limiting ~~"Long-term~~the ~~Debt~~Company ~~and Financing Arrangements". The amendment included~~to, among other ~~modifications~~things, ~~the~~incur ~~establishment~~debt, ofgrant aliens, ~~floor~~make oncertain ~~the~~investments, ~~base~~engage ~~and~~in ~~Eurocurrency rate of 1%. As~~ a ~~result,~~line ~~the Company performed an assessment~~ of ~~the~~business ~~effectiveness~~substantially ofdifferent ~~the~~from ~~interest~~business ~~rate~~conducted ~~swap~~by ~~agreement to determine if~~ the ~~critical~~Company, ~~terms~~transact ofwith ~~the~~affiliates, ~~interest~~restricted ~~rate~~payments, ~~swap~~and ~~agreement~~sell ~~continues~~assets. toThe ~~match~~2021 ~~the~~Credit ~~critical~~Facility ~~terms~~also ofcontains ~~the~~customary ~~debt.~~financial ~~The~~covenants ~~Company~~including ~~concluded~~a ~~the~~minimum ~~interest~~consolidated ~~rate~~fixed ~~swap~~coverage ~~agreement~~ratio isand nomaximum ~~longer~~consolidated ~~effective.~~net ~~See~~leverage ~~Note 7~~ratios. ~~"Derivatives" for more information.~~

The Company ~~has~~was ~~assessed its exposure to changes~~ in ~~interest~~compliance ~~rates~~with byall ~~analyzing~~covenants ~~the~~set ~~sensitivity~~forth toin the ~~Company's~~2018 ~~earnings~~Amended ~~assuming~~Credit ~~various~~Agreement ~~changes~~as inof ~~market~~and ~~interest~~for ~~rates. Assuming~~the aquarter ~~hypothetical~~ended ~~increase~~March of31, ~~one~~2021, ~~percentage~~and ~~point~~ in ~~interest~~the ~~rates~~2021 onCredit ~~the~~Facility ~~variable~~as ~~portion~~ of the ~~$283.5~~date ~~million outstanding borrowings as of September 30~~hereof, ~~2020,~~and the Company’s ~~net~~does ~~income~~not ~~would~~anticipate ~~decrease~~noncompliance byin anthe ~~estimated~~foreseeable $1future.~~4 million over a twelve-month period.~~

~~Item~~For 4.additional ~~Controls~~information, see Note 6, “Long-Term Debt and ~~Procedures~~Financing Arrangements,” in the Notes to Condensed Consolidated Financial Statements.

NON-GAAP FINANCIAL MEASURES

The Company believes that the non-GAAP measure used in this report provide investors with important perspectives into our ongoing business performance. The Company does not intend for the information to be considered in isolation or as a substitute for the related U.S. GAAP measure. Other companies may define the measures differently. The Company defines the Free Cash Flow measure as follows:

Free cash flow is defined as U.S. GAAP “Net cash provided by (used in) operating activities” in a period less “Capital expenditures” in the same period. The Company believes Free Cash Flow provides an important perspective on the Company’s ability to generate cash from our business operations and, as such, that it is an important financial measure for use in evaluating the Company's financial performance. Free Cash Flow should not be viewed as representing the residual cash flow available for discretionary expenditures such as dividends to shareholders or acquisitions, as it excludes certain mandatory expenditures such as repayment of maturing debt and other contractual obligations. Free cash flow is one measurement management uses internally to assess overall liquidity.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes outside the ordinary course of business in the Company’s contractual obligations or off-balance sheet arrangements during the first three months of 2021. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of the Company’s contractual obligations and off-balance sheet arrangements.

RECENT ACCOUNTING STANDARDS

For information regarding recent changes in accounting standards, see Note 2, “Recent Accounting Standards,” in the Notes to Condensed Consolidated Financial Statements.

CRITICAL ACCOUNTING STATEMENTS

Preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management believes the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis and the Notes to Consolidated Financial Statements in the Company’s 2020 Annual Report on Form 10-K describe the critical accounting estimates and significant accounting policies used in preparing the Condensed Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates.

There have been no significant changes in the Company’s critical accounting estimates during the three-month period ended March 31, 2021.

FORWARD-LOOKING STATEMENTS

•Expected impact of the coronavirus pandemic ("COVID-19") on the Company's businesses;

•Overall economic, business and political conditions and the effects on the Company’s markets;

•Ability to meet financial covenants in the Company's credit agreement;

•Outlook for the second quarter and full year 2021;

•Ability to improve operational effectiveness;

•Expected vehicle production in the North American, European or Asian markets;

•Growth opportunities in markets served by the Company;

•Expected costs and future savings associated with restructuring or other cost savings programs;

•Expected gross margin, operating margin and working capital improvements from cost control and other improvement programs;

•Future impact of raw material commodity costs;

•Product development and new business opportunities;

•Future strategic transactions, including but not limited to: acquisitions, joint ventures, alliances, licensing agreements and divestitures;

•Pension plan funding;

•Future cash flow and uses of cash;

•Future amounts of stock-based compensation expense;

•Future earnings and other measurements of financial performance;

•Ability to meet cash operating requirements;

•Future levels of indebtedness and capital spending;

•Future impact of the variability of interest rates and foreign currency exchange rates and impacts of hedging instruments;

•Expected future impact of recently issued accounting pronouncements upon adoption;

•Future effective income tax rates and realization of deferred tax assets;

•Estimates of fair values of reporting units and long-lived assets used in assessing goodwill and long-lived assets for possible impairment;

•Future impacts resulting from cyber-security threats and vulnerabilities; and

•The expected outcomes of legal proceedings and other contingencies, including environmental matters.

All forward-looking statements are inherently subject to a number of risks and uncertainties that could cause the actual results of the Company to differ materially from those reflected in forward-looking statements made in this Quarterly Report on Form 10-Q, as well as in press releases and other statements made from time to time by the Company’s authorized officers. Such risks and uncertainties include, among others, the duration, severity, and impact of COVID-19 or other new pandemics and the measures taken in response thereto, in particular the impact the virus has on the Company's operations and ability to meet customer demands; worldwide economic cycles and political changes and uncertainties that affect the markets which the Company’s businesses serve, which could have an effect on demand for the Company’s products and impact the Company’s profitability; challenges encountered by the Company in the execution of restructuring programs; disruptions in the global credit and financial markets, including diminished liquidity and credit availability; changes in international trade agreements and policies, including tariff regulation and trade restrictions; swings in consumer confidence and spending; unstable economic growth; volatility in foreign currency exchange rates; raw material pricing and supply issues; fluctuations in unemployment rates; retention of key employees; increases in fuel prices; and outcomes of legal proceedings, claims and investigations, as well as other risks and uncertainties identified in Part II, Item 1A - Risk Factors of this Quarterly Report on Form 10-Q, and Part I, Item 1A - Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


Item 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in the Company’s exposure to market risk during the first three months of 2021. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for discussion of the Company’s exposure to market risk.


Item 4.			CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, including the Company’s President and Chief Executive Officer (the “CEO”) and the Executive Vice President and Chief Financial Officer and Treasurer (the "CFO"), conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the "SEC"), and that such information is accumulated and communicated to management of the Company, with the participation of its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2021 at the reasonable assurance level.

Securities Exchange Act of 1934, as amended (the “Exchange Act”). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the "SEC"), and that such information is accumulated and communicated to management of the Company, with the participation of its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2020 at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the three-month period ended ~~September~~March 3031, ~~2020~~2021 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company has not experienced any material impact to its internal control over financial reporting during the COVID-19 pandemic. Most of the Company’s corporate and non-production employees worked remotely during the period in which these financial statements were prepared due to the impact of COVID-19. The Company enhanced its oversight and monitoring during the financial close and reporting process, including higher awareness and monitoring of cybersecurity threats. Other than enhancing its oversight and monitoring processes, the Company did not alter or compromise its disclosure controls and procedures. The Company continues to monitor and assess the need to modify or enhance its disclosure controls to ensure disclosure controls and procedures continue to be effective.37

PART II. OTHER INFORMATION

Item 1. ~~Legal~~LEGAL ~~Proceedings~~PROCEEDINGS

The Company is subject to legal proceedings, claims, investigations and inquiries that arise in the ordinary course of business such as, but not limited to, actions with respect to commercial, intellectual property, employment, personal injury, and environmental matters. The Company believes that it has meritorious defenses against the claims currently asserted against it and intends to defend them vigorously. While the outcome of litigation is inherently uncertain and the Company cannot be sure that it will prevail in any of the cases, subject to the matter referenced below, the Company is not aware of any matters pending that are expected to have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.General

InFrom ~~the~~time ~~fourth~~to ~~quarter of 2016~~time, ~~as part of a groundwater discharging permitting process, water samples collected from wells and process water basins at~~ the Company’s ~~Rochester~~is ~~New~~subject ~~Hampshire~~to ~~manufacturing~~legal ~~facility~~proceedings, ~~within the Performance Materials segment~~claims, ~~showed~~investigations ~~concentrations of Per~~ and ~~Polyfluorinated~~inquiries ~~Substances~~that ~~(“PFAS”)~~arise in ~~excess of state ambient groundwater quality standards. In January 2017,~~ the ~~Company~~ordinary ~~received~~course ~~a notification from the State~~ of ~~New~~business ~~Hampshire~~such ~~Department~~as, ofbut ~~Environmental~~not ~~Services~~limited ~~(“NHDES”) naming Lydall Performance Materials~~to, ~~Inc.~~actions ~~a responsible party~~ with respect to ~~the~~commercial, ~~discharge~~intellectual ofproperty, ~~regulated contaminants and~~employment, aspersonal ~~such~~injury, ~~is required to take action to investigate~~ and ~~remediate~~environmental ~~the impacts in accordance with standards established by the NHDES~~matters. The Company ~~conducted~~believes athat ~~site~~it ~~investigation,~~has ~~the~~meritorious ~~scope~~defenses ofagainst ~~which was reviewed by~~ the ~~NHDES,~~claims incurrently ~~order~~asserted toagainst ~~assess~~it ~~the extent of potential soil~~ and ~~groundwater~~intends ~~contamination~~to ~~and~~defend ~~develop~~them ~~a remedial action~~vigorously. ~~Based~~ onWhile ~~input received from NHDES in March 2017 with regard to~~ the ~~scope~~outcome of ~~the~~litigation ~~site~~is ~~investigation,~~inherently ~~the~~uncertain ~~Company~~and ~~recorded $0.2 million of expense. In 2018,~~ the Company ~~received~~cannot abe ~~response~~sure ~~from~~that ~~the~~it ~~NHDES~~will toprevail ~~the~~in ~~site~~any ~~investigation report outlining proposed remedial actions. The Company recorded an additional $0.1 million~~ of ~~expense in 2018 associated with~~ the ~~expected~~cases, ~~costs~~subject to ~~remediate~~ the ~~impacts~~matters ofreferenced ~~the discharge of regulated contaminants~~ in ~~accordance~~Note ~~with~~15, ~~standards~~"Commitments ~~established~~and byContingencies" ~~the~~in ~~NHDES. During 2018~~ the ~~environmental~~Notes ~~liability was fully reduced reflecting payments made~~ to ~~vendors,~~Condensed ~~resulting~~Consolidated inFinancial noStatements ~~balance at December 31, 2018. Additionally, the Company incurred $0.2 million~~ of ~~capital~~this ~~expenditures in 2018~~report, ~~in relation to~~ the ~~lining of the~~ Company's ~~fresh~~is ~~water lagoons. The site investigation and remedial action plan are ongoing. The Company cannot be sure that costs will~~ not ~~exceed~~aware ~~the~~of ~~current~~any ~~estimates~~matters ~~until~~pending ~~this matter is closed with the NHDES, nor~~ that ~~any~~are ~~future~~expected ~~corrective~~to ~~action at this location would not~~ have a material adverse effect on the Company’s business, competitive position, financial ~~condition~~position, results of operations, capital expenditures or cash ~~flow~~flows.

InThe ~~December~~Company ~~2018,~~records ~~the~~loss ~~New~~accruals ~~York~~related ~~State~~to ~~Department~~matters offor ~~Environmental~~which ~~Conservation~~it ~~(“NYDEC”)~~considers ~~informed~~a ~~the~~loss ~~Company~~to ~~that~~be ~~the~~both ~~newly~~probable ~~acquired~~and ~~Interface~~reasonably ~~site~~estimable. ~~located~~Legal atexpenses ~~Hoosick~~are ~~Falls,~~generally NYexpensed ~~will~~when beincurred. ~~the~~The ~~subject~~Company ofevaluates, anon ~~investigation~~a quarterly basis, developments in tolegal proceedings that could affect the ~~possibility~~amount of itany ~~being~~accrual anand ~~inactive~~developments ~~hazardous~~that ~~disposable~~would ~~waste~~make ~~site. The~~a ~~letter~~loss ~~specifically~~contingency ~~references~~both ~~PFAS~~probable ~~that~~and ~~have~~reasonably ~~been~~estimable. ~~detected~~Loss incontingencies aare ~~nearby~~subject ~~water~~to ~~supply~~substantial uncertainties, ~~soil~~however, ~~and/or~~including ~~surface~~for ~~water. Notably,~~each such contingency the ~~PFAS~~following, ~~contamination~~among ~~has~~other ~~been~~factors: ~~identified~~(i) inthe procedural status of the ~~Hoosick~~case; ~~Falls~~(ii) ~~area~~whether ~~for~~the ~~some~~case ~~time~~has ~~and~~or ~~other~~may ~~large~~be ~~manufacturers~~certified inas ~~the~~a ~~area~~class ~~have~~action ~~previously~~suit; ~~been~~(iii) ~~identified~~the asoutcome aof ~~source. The~~preliminary ~~NYDEC~~motions; ~~approved~~(iv) athe ~~site~~impact ~~characterization~~of ~~plan~~discovery; in(v) ~~December~~whether ~~2019. The~~there ~~Company~~are ~~recorded~~significant ~~expense~~factual ofissues ~~$0.3~~to ~~million~~be indetermined ~~the~~or ~~fourth~~resolved; ~~quarter~~(vi) ofwhether ~~2019~~the asproceedings involve a ~~result~~large number of ~~the~~parties ~~site~~and/or ~~characterization~~claims ~~plan~~in ~~preparation~~multiple ~~and~~jurisdictions ~~site~~or ~~characterization~~jurisdictions ~~activities. Additional~~in ~~site~~which ~~characterization~~the ~~activities~~relevant laws are ~~planned~~complex ~~for~~or ~~the~~unclear; ~~fourth~~(vii) ~~quarter~~the extent of ~~2020. The~~potential ~~Company~~damages, ~~does~~which ~~not~~are ~~know~~often ~~the~~unspecified ~~scope~~ or ~~extent~~indeterminate; ofand ~~its~~(viii) ~~future~~the ~~obligations~~status of settlement discussions, if any, ~~that~~and ~~may~~the ~~arise~~settlement ~~from~~postures of the ~~site~~parties. ~~investigation~~Because ~~and~~of ~~therefore~~these isuncertainties, ~~unable~~management tohas ~~estimate~~determined ~~the~~that, ~~cost~~except ofas ~~any~~set ~~corrective~~forth ~~action. Accordingly~~in Note 15, "Commitments and Contingencies" in the ~~Company~~Notes ~~cannot~~to ~~assure~~Condensed ~~that~~Consolidated Financial Statements of this report, the ~~costs~~amount of ~~any~~loss ~~future~~or ~~corrective~~range atof ~~this~~loss ~~location~~that ~~would~~is ~~not~~reasonably ~~have~~possible ain ~~material~~respect ~~effect~~of oneach ~~the~~matter ~~Company's~~described ~~financial~~below ~~condition,~~(including ~~results~~any reasonably possible losses in excess of ~~operations~~amounts oralready ~~cash~~accrued), ~~flows~~is not reasonably estimable.

~~Provisions~~Except ~~for~~as ~~such~~set ~~matters~~forth ~~are~~in ~~charged~~Note to15, ~~expense~~"Commitments ~~when~~and itContingencies," isin ~~probable~~the ~~that~~Notes ato ~~liability~~Condensed ~~has~~Consolidated ~~been~~Financial ~~incurred~~Statements ~~and~~of ~~reasonable~~this ~~estimates~~report, ofneither the ~~liability~~Company ~~can~~nor beany ~~made. Estimates~~ of ~~environmental~~its ~~liabilities~~subsidiaries ~~are~~is ~~based on~~ a ~~variety of matters~~party, ~~including,~~nor ~~but~~is ~~not~~any ~~limited~~of ~~to,~~its ~~the~~or ~~stage~~their ofproperty ~~investigation~~subject, ~~the~~to ~~stage~~any ofmaterial ~~the~~pending ~~remedial~~legal ~~design~~proceedings, ~~evaluation~~other ofthan ~~existing~~ordinary ~~remediation~~routine ~~technologies,~~litigation ~~and~~incidental ~~presently~~to ~~enacted~~the ~~laws~~business ~~and regulations. In future periods, a number~~ of ~~factors~~the ~~could~~Company ~~significantly~~and ~~impact~~its ~~any estimates of environmental remediation costs~~subsidiaries.

~~Some~~Environmental of the Company’s OEM contracts in the Thermal Acoustical Solutions (“TAS”) segment contain provisions that require the Company to pay expedited freight if it fails or threatens to fail to deliver product timely and/or damages if the Company is the cause of production disruptions at customer facilities. Historically, the Company has paid expedited freight costs as needed to meet delivery obligations. In late third quarter 2020, as a result of labor shortages and operational inefficiencies directly related to COVID-19, TAS was unable to manufacture parts timely, resulting in customer production disruptions. Because of the unforeseen and unforeseeable nature of the COVID-19 pandemic, which is out of the Company’s control, in early October the Company invoked force majeure or commercial impracticability to certain customers as a legal excuse for delayed performance of contract and defense to claims that may be asserted by customers. A recent resurgence of cases in that same facility has caused the Company to expand its declaration of force majeure or commercial impracticability to other impacted customers. Although the Company believes it has a strong legal basis for asserting force majeure or commercial impracticability as a result of COVID-19, it is reasonably possible customers may assert claims against the Company, and the Matters

50The Company and its subsidiaries are subject to numerous U.S. Federal, state and international environmental laws and regulatory requirements and are involved from time to time in investigations or litigation of various potential environmental issues concerning activities at our facilities or former facilities or remediation as a result of past activities (including past activities of companies we have acquired). While it is not possible to predict the outcome of these proceedings, in the opinion of management, any payments we may be required to make as a result of all such claims in existence at March 31, 2021, will not have a material adverse effect on our business, financial condition and results of operations or cash flows.

~~Company~~Provisions ~~could~~for besuch ~~subject~~matters toare ~~financial~~charged ~~damages~~ to ~~customers,~~expense ~~which~~when ~~could~~it ~~have~~is probable that a ~~material~~liability ~~effect~~has onbeen ~~the~~incurred ~~Company’s~~and ~~consolidated~~reasonable ~~results~~estimates of ~~operations~~the ~~and~~liability ~~cash~~can ~~flows~~be made. ~~The~~Estimates ~~Company~~of ~~has~~environmental ~~not~~liabilities ~~received~~are ~~any~~based ~~such~~on ~~claims~~a ~~and~~variety isof ~~unable~~matters, including, but not limited to, ~~estimate~~the stage of investigation, the ~~amount~~stage of ~~any~~the ~~such~~remedial design, evaluation of existing remediation technologies, the availability of insurance coverage by or contractual environmental risk transfer to third parties, and presently enacted laws and regulations. In future ~~claims~~periods, ifnumerous factors could significantly impact any, atestimates ~~this~~of ~~time~~environmental remediation costs.

~~Item~~See ~~1A.~~Note ~~Risk~~15, ~~Factors~~"Commitments and Contingencies," in the Notes to Condensed Consolidated Financial Statements for additional information regarding environmental matters.

~~See Part I,~~ Item 1A ~~of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated by Part II, Item 1, Legal Proceedings, of this Report and by the new risk factors added below~~. ~~The~~RISK COVID-19 pandemic has heightened, and in some cases manifested, certain of the risks the Company normally faces in operating the business, including those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and the risk factor disclosure in the Form 10-K is qualified by the information relating to COVID-19 that is described in this report, including the risk factors set forth below. The risks described in this report and in the Annual Report on Form 10-K, and the “Cautionary Note Concerning Forward-Looking Statements” in this report, are not the only risks faced by the Company. Additional risks and uncertainties not currently known or that are currently judged to be immaterial may also materially affect the Company’s business, financial position, results of operations or cash flows. FACTORS

~~The~~Investors ~~Company’s~~should ~~financial~~carefully ~~condition~~review and consider the information regarding certain factors that could materially affect our business, results of operations, financial condition and cash flows as set forth under Part I, Item 1A - Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. We do not believe there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, but we may disclose changes to such factors or disclose additional factors from time to time in future filings with the SEC. Additional risks and ~~are~~uncertainties ~~expected~~not presently known to ~~continue~~us or that we currently believe not to be, material may also adversely ~~affected~~impact byour ~~the~~business, ~~recent~~results ~~COVID-19~~of ~~pandemic~~operations, financial position and cash flows.

The global outbreak of COVID-19 has caused a material adverse effect on the level of economic activity around the world, including in all markets served by the Company. In response to this outbreak, the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions, such as imposing restrictions on travel and business operations. The Company has implemented numerous measures attempting to manage and mitigate the effects of the virus. While the Company has implemented programs to mitigate the impact of these measures on its results of operations, there can be no assurance that these programs will be successful. The Company cannot predict the degree to, or the time period over, which its sales and operations will be affected by this outbreak and preventative measures, and the effects could be material.38

~~The~~Item COVID-19 pandemic poses the risk that we or the Company’s affiliates, employees, suppliers, customers and others may be restricted or prevented from conducting business activities for indefinite or intermittent periods of time, including as a result of employee health and safety concerns, social distancing protocols, shutdowns, shelter in place orders, travel restrictions and other actions and restrictions that may be requested or mandated by governmental authorities2. ~~For~~UNREGISTERED ~~example,~~SALES ~~the~~OF ~~Company~~EQUITY ~~experienced~~SECURITIES aAND ~~temporary~~USE ~~reduction~~OF of its manufacturing and operating capacity in China as a result of government-mandated actions to control the spread of COVID-19. Additionally, beginning in March 2020, the Company experienced the ramp-down of its automotive manufacturing facilities in the Americas and European regions coinciding with the shutdown of its major automotive customer facilities in these regions. While many of the Company’s other facilities have been designated by its customers as essential business in jurisdictions in which facility closures have otherwise been mandated, the Company can give no assurance that this will not change in the future or that its businesses will continue to be classified as essential in each of the jurisdictions in which it operates.PROCEEDS

~~Additionally,~~The ~~restrictions~~following ontable ~~the~~provides ~~Company’s~~information ~~access~~about topurchases its manufacturing facilities or on its support operations or workforce, or similar limitations for its distributors and suppliers, could continue to limit customer demand and/or the Company’s capacity to meet customer demand and have a material adverse effect on its business, financial condition and results of ~~operations.~~Common InStock addition, the Company has modified its business practices (including employee travel, employee work locations, limited/restricted third-party access to the Company's facilities, and cancellation of physical participation in meetings, events and conferences), and may take further actions as may be required by ~~government authorities, for~~ the ~~continued health and safety of its employees, or that the~~ Company ~~otherwise~~during ~~determines are in~~ the ~~best interests of its employees, customers, partners, and suppliers. Further, the Company has experienced disruptions and operational inefficiencies from COVID~~three-~~19-related~~month ~~illnesses~~period ~~and~~ended ~~workforce shortages and may continue to experience such disruptions and operational inefficiencies in the future. The Company may experience delays in its supply chain~~March 31, ~~which is likely to result in higher supply chain costs to the Company in order to maintain the supply of materials and components for its products.~~2021:

Managing the impact of COVID-19 on the Company has and will continue to require significant investment of time from its management and employees, as well as resources across its global enterprise. The focus on managing and mitigating the impacts of COVID-19 on the Company’s business may cause it to divert or delay the application of its resources toward other or new initiatives or investments, which may cause a material adverse impact on its results of operations.



Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Maximum Number of Shares That May Yet Be Purchased Under the Program
January 1, 2021 - January 31, 2021	—	$	—	—	—
February 1, 2021 - February 28, 2021	664	$	32.82	—	—
March 1, 2021 - March 31, 2021	4,982	$	36.03	—	—
	5,646	$	35.65	—	—

~~The~~(1)During ~~Company~~the ~~may~~quarter, ~~also~~the ~~experience~~Company ~~impacts~~acquired ~~from~~5,646 ~~market~~shares ~~downturns~~of ~~and~~common ~~changes~~stock in ~~consumer~~connection ~~behavior~~with ~~related~~tax towithholding ~~pandemic~~obligations ~~fears~~pursuant ~~and~~to ~~impacts~~provisions onin ~~its~~agreements ~~workforce~~with asrecipients ~~a result~~ of ~~COVID-19.~~restricted ~~The~~stock ~~Company~~granted ~~has~~under ~~experienced a significant decline in demand from certain customers as a result of COVID-19. In addition,~~ the Company’s ~~customers~~equity ~~may~~compensation ~~choose to delay or abandon~~ plans.

51(2)On April 20, 2021, the Company announced that our Board of Directors approved a Share Repurchase Program authorizing the repurchase, from time to time at the Company's discretion, of up to an aggregate of $30.0 million of common stock, par value $0.01 per share, of the Company.

~~projects for which the Company provides products and/or services in response to the adverse impact of COVID-19 and the measures to contain its spread have had on the global economy.~~39

InItem late third quarter 2020, the Thermal Acoustical Solutions segment caused interruption of two customer production lines as a result of labor shortages and operational inefficiencies directly related to COVID-19 causing the Company to invoke force majeure (or excusable delay) with these two customers5. AOTHER recent resurgence of cases in that same facility has caused the Company to expand its declaration of force majeure (or excusable delay) with most of its automotive customers. If the COVID-19 pandemic becomes more pronounced in the markets in which the Company or its automotive industry customers operate, or there is a resurgence in the virus in markets currently recovering from the spread of COVID-19, then its operations in areas impacted by such events could experience further materially adverse financial impacts due to market changes and other resulting events and circumstances. The extent to which the COVID-19 outbreak continues to impact the Company’s financial condition will depend on future developments that are highly uncertain and are difficult to predict, including new government actions or restrictions, new information that may emerge concerning the severity, the longevity and the impact of COVID-19 on economic activity. To the extent the COVID-19 pandemic materially adversely affects the Company’s business and financial results, it may also have the effect of significantly heightening many of the other risks associated with the Company's business and indebtedness, including those described in the most recent Annual Report on Form 10-K for the year ended December 31, 2019.INFORMATION

~~The~~2021 ~~COVID-19~~Credit ~~pandemic presents significant challenges to the Company’s liquidity and ability to comply with its financial covenants.~~Facility

~~The~~On ~~Company’s~~April ~~continued~~26, ~~access~~2021, tothe ~~sources~~Company ofreplaced ~~liquidity~~its ~~and~~2018 ~~ability~~Amended toCredit ~~comply~~Agreement with ~~its~~a ~~financial~~newly ~~covenants~~executed ~~depends~~Credit onAgreement ~~multiple~~by ~~factors,~~and ~~including~~among ~~global~~the ~~economic conditions~~Company, ~~the~~as ~~COVID-19~~borrower, ~~pandemic’s~~and ~~effects~~certain ondirect ~~its customers~~ and ~~their~~indirect ~~production~~subsidiaries ~~rates~~as guarantors, ~~the~~and ~~condition~~Bank of ~~global~~America, ~~financial markets~~N.A., ~~the~~as ~~availability~~Administrative ofAgent, ~~sufficient amounts of financing~~Lender, ~~its~~L/C ~~operating~~Issuer ~~performance~~ and ~~its~~Swingline ~~credit~~Lender, ~~worthiness. The Company relies on the credit markets to provide it with liquidity to operate~~ and ~~grow~~Wells ~~its~~Fargo ~~businesses~~Bank, ~~beyond~~N.A., ~~the~~JPMorgan ~~liquidity~~Chase ~~that~~Bank, ~~operating~~N.A., ~~cash~~KeyBank ~~flows provide~~N.A, InSantander ~~March 2020~~Bank, ~~the Company drew down an incremental $20~~N.0A., ~~million~~TD ~~under~~Bank, ~~its 2018 Credit Agreement to provide liquidity as it addresses critical issues that may arise~~N. ~~In addition~~A., onand ~~May~~Webster 11Bank, ~~2020~~N.A, ~~the~~as ~~Company~~Lenders. ~~amended~~The ~~its~~principal ~~2018~~purpose ~~Credit~~of ~~Agreement,~~the ~~which,~~2021 ~~among~~Amendment ~~other~~was ~~changes,~~to ~~decreased~~increase ~~available~~total borrowings from $~~450~~314 million to $~~314~~346 million and ~~modified~~obtain ~~financial~~more ~~covenants,~~favorable atborrowing ~~least one of which the Company expected to fail under the 2018 Credit Agreement as early as the second quarter of 2020~~rates. As aSee ~~result~~Note of6, ~~the impacts of the COVID~~"Long-19term ~~pandemic,~~Debt ~~the Company's access to~~ and ~~cost~~Financing ~~of financing will depend on~~Arrangements," ~~among other things, global economic conditions, conditions~~ in the ~~global~~Notes ~~financing~~to ~~markets,~~Condensed ~~the~~Consolidated ~~availability~~Financial ofStatements ~~sufficient~~for ~~amounts~~additional ~~of financing, its prospects and its credit ratings~~information. ~~The~~ ~~Company~~A ~~believes~~copy ~~that~~of ~~its liquidity resources, including~~ the ~~Facility,~~Amendment ~~are~~is ~~sufficient~~filed toherewith ~~meet~~as ~~its~~Exhibit ~~working~~10.1 ~~capital needs~~ and ~~other~~incorporated ~~cash~~herein ~~requirements~~by reference. The ~~Company~~above ~~was~~description ~~in compliance with the modified financial covenants as~~ of ~~and for~~ the ~~three-month~~2021 ~~period~~Credit ~~ended~~Facility ~~September~~is ~~30,~~qualified ~~2020,~~in ~~and~~its ~~management~~entirety ~~does~~by ~~not~~reference ~~anticipate~~to ~~noncompliance~~such ~~in the foreseeable future~~exhibit.

~~The Company may not be able to collect amounts owed to it or sell its inventory due to customers becoming significantly impacted by the COVID-19 pandemic.~~ 40

~~The~~Item ~~Company may experience an increase in uncollectible receivables if customers are severely impacted by COVID-19 and are unable to pay~~6. ~~Additionally,~~ ~~the Company may experience an increase in inventory write-off charges for those inventory items that have no alternative use for customers that are severely impacted by COVID-19.~~EXHIBITS

Increased cybersecurity vulnerabilities and threats and more sophisticated and targeted computer crime pose a risk to the Company’s systems, networks, and data.


Exhibit Number						Description





10.1						Credit Agreement, dated April 26, 2021, by and among Lydall, Inc., as borrower, the Guarantors named therein, and Bank of America, N.A., as Agent for the Lenders, filed herewith.

10.2						Security and Pledge Agreement, dated April 26, 2021, by and among Lydall, Inc., and Bank of America, N.A., filed herewith.

31.1						Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, of principal executive officer, filed herewith.

31.2						Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, of principal financial officer, filed herewith.

32.1						Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Increased global cybersecurity vulnerabilities and threats and more sophisticated and targeted cyber-related attacks pose an ongoing risk to the security of the Company’s systems and networks and the confidentiality, availability and integrity of the Company’s data. While the Company has not to date suffered a material loss from cyber incidents, from time to time, the Company experiences attacks on its systems and networks, including attacks that introduce malicious software into the Company's systems and networks, or gain access to and manipulate information in order to perpetrate a fraud on the Company or customers. Cyber threats are constantly evolving, thereby increasing the efforts and controls required to prevent, detect and successfully defend against them. While the Company attempts to mitigate these risks by employing a number of measures, including employee training, monitoring and testing, and maintenance of protective systems and contingency plans, the Company remains vulnerable to additional known or unknown threats. Moreover, as a result of the COVID-19 pandemic, a greater number of employees are working remotely, which further increases the Company's vulnerability to the cyber risks. The Company's systems and networks contain sensitive, confidential or personal data or information in certain of the Company’s businesses that is subject to foreign, federal, state and local privacy and security laws, regulations and customer-imposed controls. 41

Despite efforts made by the Company to protect sensitive, confidential or personal data or information, the Company remains vulnerable to security breaches, ransomware, theft, misplaced or lost data, programming errors, employee errors and/or malfeasance and the compromising or loss of sensitive, confidential or personal data or information could adversely impact the Company's results of operations and cash flows. Although the Company carries cybersecurity insurance, in the event of a cyber incident, that insurance may not be extensive enough or adequate in scope of coverage or amount to cover damages the Company may incur. In addition, a cyber-related attack could result in other negative consequences, including loss of information, damage to the Company’s reputation or competitiveness, remediation or increased protection costs, litigation or regulatory action.

The General Data Protection Regulation ("GDPR"), which went into effect in the European Union ("EU") on May 25, 2018, among other things, mandates new requirements regarding the handling of personal data of employees and customers, including its use, protection and the ability of persons whose data is stored to correct or delete such data about themselves. If the Company fails to comply with these laws or regulations, we could be subject to significant litigation, monetary damages, regulatory enforcement actions or fines in one or more jurisdictions.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three-month period ended September 30, 2020, the Company acquired 1,424 shares of common stock through withholding, pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s equity compensation plans, which allow the Company to withhold the number of shares having fair value equal to each recipient’s tax withholding due.

Period	Total Numberof SharesPurchased	Average PricePaid per Share		Total Numberof SharesPurchased asPart ofPubliclyAnnouncedProgram	MaximumNumber ofShares ThatMay Yet BePurchasedUnder theProgram
July 1, 2020 - July 31, 2020	1,070	$	15.86	—	—
August 1, 2020 - August 31, 2020	—	$	—	—	—
September 1, 2020 - September 30, 2020	354	$	18.84	—	—
	1,424	$	16.60	—	—

Item 5. Other Information

2020 Amendment to the 2018 Credit Agreement

On October 14, 2020, the Company amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. See Note 6, "Long-term Debt and Financing Arrangements" and Part 1, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Financing Arrangements” for additional information. A copy of the Amendment is filed herewith as Exhibit 10.2 and incorporated herein by reference. The above description of the Amendment is qualified in its entirety by reference to such exhibit.

Item 6. Exhibits

ExhibitNumber						Description
10.1						Third Amendment to Second Amended and Restated Credit Agreement, dated May 11, 2020, by and among Lydall, Inc., as borrower, the Guarantors named therein, and Bank of America, N.A., as Agent for the Lenders, filed as Exhibit 10.1 to the registrant's Form 10-Q dated May 11, 2020, and incorporated herein by this reference.
10.2						Fourth Amendment to Second Amended and Restated Credit Agreement, dated October 14, 2020, by and among Lydall, Inc., as borrower, the Guarantors named therein, and Bank of America, N.A., as Agent for the Lenders, filed as Exhibit 10.2 to the registrant's Form 10-Q dated October 27, 2020, filed herewith.
31.1						Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, of principal executive officer, filed herewith.
31.2						Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, of principal financial officer, filed herewith.
32.1						Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
101.INS						Inline XBRL Instance Document
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LYDALL, INC.
October 27, 2020	By:	/s/ Randall B. Gonzales
April 27, 2021	By:	/s/ Randall B. Gonzales
		Randall B. GonzalesExecutive Vice President and Chief Financial Officer(On behalf of the Registrant and asPrincipal Financial Officer)
		Randall B. GonzalesExecutive Vice President and Chief Financial Officer and Treasurer(Principal Financial Officer)

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