Lord looks to keep pushing past $1 billion sales milestone

CARY, N.C.—There's always another summit in the business world, but that doesn't mean Lord Corp. can't stop and enjoy the view after reaching a pretty big one.

The Cary-based provider of both rubber-to-metal bonding technologies and adhesives just crossed the $1 billion mark in sales for the first time in its 95-year history, thanks largely to a successful 2018 that saw it open a new facility in France, launch an expansion in Pennsylvania and ink a record-setting deal with Boeing.

"The whole team takes a lot of pride in this accomplishment," CEO and President Ed Auslander said. "Being a billion-dollar company is just one milestone in our journey. We have many other goals to achieve coming up, but this is something I'm proud of. I'm proud of our team and our customers connecting to collaborate on new solutions and many making the impossible real. It's a great accomplishment."

Bracing for impact

Auslander's journey also had many summits, coming to Lord in 1984 as part of the firm's student co-op program.

As he rose through the ranks, Lord became a Tier 1 supplier, enhanced its technological capabilities and expanded its business throughout the world. Now, 60 percent of its revenue is generated outside of the U.S. with more than 3,000 employees in 26 countries. It operates 19 manufacturing facilities and 10 research and development centers worldwide.

Auslander said the business is split evenly between its dynamic systems segment (rubber-to-metal bonding/vibration control mounts and systems) and its performance materials segment (adhesives).

"The technology has dramatically shifted over that time frame," Auslander said. "Originally, and still our core, is very much focused on polymers and adhesives. Over the last 30-plus years, we've expanded that quite dramatically around the world. We're very much a global company."

But upon becoming CEO, he saw that the company needed to prepare for lean times as projections forecast a global slowdown, which quickly came to fruition in the oil and gas market. That had ripple effects throughout Lord's operations.

"It was very clear in 2013 that the world's economy was going to slow down," Auslander said. "Growth was going to get harder and harder to come by. That certainly was true in 2014 and 2015, when we saw the oil market collapse. That impacted our rubber-to-metal, industrial and aerospace business. It had a dramatic effect."

In advance of the slowdown, Lord launched strategic initiatives to look at adjacent markets for it to expand its technology into. The company started with 18 targets and is now focused on six, including: Electrification, lightweighting, oil and gas as it rebounded from the downturn, engine suspensions, electro mechanic systems and aftermarket opportunities for its aerospace business.

It most recently launched Lord Summits, an initiative with the goal of sustained profitable growth. Including the focus on adjacent markets, Auslander said the program's pillars include:

• An aligned culture with growth-oriented mindset that emphasizes focus, speed, customer intimacy, collaboration, empowerment and execution;
• Four growth levers of commercial excellence, global engagement, customer and market focused innovation, and operational excellence; and
• Focus on becoming a more efficient and effective company.

Auslander also stressed that customer trust is the utmost important element.

"In today's world, not just Lord but a lot of different companies, your competitors are your partners and vice versa," Auslander said. "Lord takes great care to maintain confidentiality across businesses, customers, people and activities. We've done that really well over the years and will continue to do that really well. That's first and foremost. You never cross the stream in anything that you're doing."

Big results

The results of the combined initiatives led to 10 percent growth in both 2017 and 2018. Auslander said every business in every region of the world grew during that span. The firm is forecasting 6 percent growth for 2019.

"We've had strong performances over the last couple of years," Auslander said.

New technology is a main driver of the growth. Auslander said the firm developed a lot of new formulations on the adhesives side. These include different thermal management materials and thermally conductive adhesives for the electric vehicle market.

"We do a lot of collaboration with our customers on technology development and innovation," Auslander said. "We work hand in hand with our customers all the time. We very much enjoy that, and enjoy customizing our solutions to meet their immediate needs."

The firm opened a new manufacturing facility in Pont de l'Isere, France—representing a $12 million investment. The site produces electromechanical motion control systems. Auslander described it as a "great foundational facility" to support Lord's European and global aerospace business.

Lord intends to invest further in Europe. Auslander said the board approved an additional $16 million investment in December for a manufacturing facility in Germany. The site will produce adhesives and materials for electric vehicles. It's set to break ground in March with the goal to become operational in late 2019 or early 2020.

And in the spring of 2018, Lord broke ground on an $80 million expansion project in Saegertown, Pa., to add 75,000 square feet to the 250,000-sq.-ft. building, which sits on a 67-acre plot and employs 235. The site produces acrylic, urethane and epoxy adhesives as well as its Chemlok-brand bonding adhesives. Additionally, the plant produces specialty intermediate chemicals and coatings products that are supplied to customers around the world.

It inked the biggest contract in company history in 2018—a deal with Boeing to produce an auto-throttle module for cockpit control within its aircrafts. Lord's electromechanical motion control technology played a vital part for Boeing.

Financial details of the pact were not disclosed, but the deal further cements Lord's already strong relationship with the aerospace giant.

"Our collaborative relationship with Boeing was a big driver," Auslander said. "It was a system Boeing wanted to improve for a long time and we had some core technology that was a perfect fit with what they were able to achieve. We got together and collaborated in an open and transparent way that yielded a very high value solution."

Boeing was not the only success story. Auslander said the firm also won multiple electric vehicle technology platforms. Most of that growth won't occur immediately because of the long development cycle times in automotive.

"Lord is very well-connected to the automotive market throughout the world," Auslander said. "We have and have developed new capabilities for specialty materials to take heat out of electric vehicle battery packs, power converters, electric motors and assembly of battery packs through different adhesives. Because we're globally connected and have some unique capabilities, we're working with just about everyone in the entire world who has an electric vehicle program."

Oil and gas continues to be a major source of growth for Lord. Auslander said fracking in the U.S. has been the main driver, allowing for Lord to provide vibration and shock protection solutions for those drilling systems.

The industrial sectors it serves are seeing the same impact from electrification and lightweighting as automotive and aerospace. Lord provides adaptive suspension systems and steer by wire steering systems into the rail, general machinery, agriculture, construction and truck/bus segments.

"It's a very exciting time, for the industry and for Lord," Auslander said.