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Albany International Reports Second-Quarter 2024 Results

Albany International Corp. (NYSE:AIN) today reported operating results for its second quarter of 2024, which ended June 30, 2024.

"Overall, we had another good quarter as our businesses delivered strong results and are responding well to their industry challenges," said President and CEO, Gunnar Kleveland. "Revenue of $332 million was up $58 million or 21.1% over prior year due to the inclusion of Heimbach and sales growth in Engineered Composites.

"In Machine Clothing, revenues at $194 million grew year-over-year, driven by our Heimbach acquisition, slightly offset by lower organic demand, primarily in Europe and North America. Our global order backlog remains stable. We continue to make progress with the integration at Heimbach.

"In Engineered Composites, we delivered 20% year-over-year top line growth as our current programs ramp up. We see growth in our commercial markets, especially in space and other emerging platforms. Our defense business is also growing, primarily the CH-53K and JASSM platforms, partially offset by the Joint Strike Fighter program," concluded Kleveland.

For the second quarter ended June 30, 2024:

  • Net revenues were $332.0 million, up 21.1%, or 21.6% after adjusting for currency translation, when compared to the prior year. MC's net revenues increased 21.6%, driven by Heimbach net revenues, which was partially offset by lower net revenues in the rest of the segment, due to decreased sales in pulp, packaging and publication grades, net of increased sales in tissue grades and engineered fabrics. AEC's net revenues increased 20.5%, primarily driven by growth on CH-53K and other commercial and space programs.
  • Gross profit of $112.4 million was 9.4% higher than the $102.7 million reported for the same period of 2023; overall gross margin declined by more than 350 basis points, driven by lower Heimbach margins at MC and driven by changes in the estimated profitability of long-term contracts at AEC.
  • Selling, General, and Administrative (SG&A) expenses were $55.5 million, compared to $46.8 million in the same period of 2023; the increase was driven primarily by the inclusion of Heimbach, in addition to acquisition and integration expenses.
  • Operating income was $42.9 million, compared to $45.5 million in the prior year. Despite higher gross profit, increases in SG&A and Restructuring expenses drove a decrease in operating income compared to the prior year.
  • Effective tax rate for the quarter was 27.9%, compared to 42.8% for the second quarter of 2023. The 2023 rate was higher primarily due to unfavorable discrete tax adjustments.
  • Net income attributable to the Company was $24.6 million ($0.79 per share), compared to $26.7 million ($0.85 per share) in the second quarter of 2023; Adjusted diluted earnings per share (or Adjusted diluted EPS, a non-GAAP measure) was $0.89 per share in both the second quarter of 2024 and 2023.
  • Adjusted EBITDA (a non-GAAP measure) was $63.1 million, compared to $65.0 million in the second quarter of 2023, a decrease of 3.0%.

Please see the tables below for a reconciliation of non-GAAP measures to their comparable GAAP measures.

Outlook for Full-Year 2024

The company is reaffirming its guidance for the full year of 2024 as follows:

  • Total company revenue between $1.26 and $1.33 billion
  • Effective income tax rate between 29% and 31%
  • Capital expenditures in the range of $90 to $95 million
  • Adjusted diluted earnings per share between $3.55 and $4.05
  • Total company Adjusted EBITDA between $260 to $290 million
  • Machine Clothing revenue between $760 to $790 million
  • Machine Clothing Adjusted EBITDA between $230 and $250 million
  • Albany Engineered Composites revenue between $500 to $540 million, and
  • Albany Engineered Composites Adjusted EBITDA between $97 to $107 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2024

 

2023

 

2024

 

2023

Net revenues

$

331,994

 

$

274,123

 

 

$

645,324

 

$

543,219

 

Cost of goods sold

 

219,611

 

 

171,419

 

 

 

424,255

 

 

341,197

 

 

 

 

 

 

 

 

 

Gross profit

 

112,383

 

 

102,704

 

 

 

221,069

 

 

202,022

 

Selling, general, and administrative expenses

 

55,515

 

 

46,760

 

 

 

110,350

 

 

95,239

 

Technical and research expenses

 

11,860

 

 

10,318

 

 

 

24,525

 

 

20,595

 

Restructuring expenses, net

 

2,103

 

 

125

 

 

 

4,312

 

 

145

 

 

 

 

 

 

 

 

 

Operating income

 

42,905

 

 

45,501

 

 

 

81,882

 

 

86,043

 

Interest expense/(income), net

 

2,950

 

 

3,106

 

 

 

6,269

 

 

6,396

 

Other (income)/expense, net

 

5,657

 

 

(4,511

)

 

 

2,675

 

 

(4,966

)

 

 

 

 

 

 

 

 

Income before income taxes

 

34,298

 

 

46,906

 

 

 

72,938

 

 

84,613

 

Income tax expense

 

9,578

 

 

20,080

 

 

 

20,849

 

 

30,701

 

 

 

 

 

 

 

 

 

Net income

 

24,720

 

 

26,826

 

 

 

52,089

 

 

53,912

 

Net income attributable to the noncontrolling interest

 

96

 

 

154

 

 

 

174

 

 

351

 

Net income attributable to the Company

$

24,624

 

$

26,672

 

 

$

51,915

 

$

53,561

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Company shareholders - Basic

$

0.79

 

$

0.86

 

 

$

1.66

 

$

1.72

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Company shareholders - Diluted

$

0.79

 

$

0.85

 

 

$

1.66

 

$

1.71

 

 

 

 

 

 

 

 

 

Shares of the Company used in computing earnings per share:

 

 

 

 

 

 

 

Basic

 

31,242

 

 

31,174

 

 

 

31,225

 

 

31,152

 

 

 

 

 

 

 

 

 

Diluted

 

31,342

 

 

31,269

 

 

 

31,316

 

 

31,243

 

 

 

 

 

 

 

 

 

Dividends declared per Class A share

$

0.26

 

$

0.25

 

 

$

0.52

 

$

0.50

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Cash and cash equivalents

$

116,439

 

 

$

173,420

 

Accounts receivable, net

 

280,008

 

 

 

287,781

 

Contract assets, net

 

189,242

 

 

 

182,281

 

Inventories

 

161,626

 

 

 

169,567

 

Income taxes prepaid and receivable

 

9,993

 

 

 

11,043

 

Prepaid expenses and other current assets

 

49,143

 

 

 

53,872

 

Total current assets

$

806,451

 

 

$

877,964

 

 

 

 

 

Property, plant and equipment, net

 

582,167

 

 

 

601,989

 

Intangibles, net

 

41,505

 

 

 

44,646

 

Goodwill

 

178,236

 

 

 

180,181

 

Deferred income taxes

 

27,203

 

 

 

22,941

 

Noncurrent receivables, net

 

 

 

 

4,392

 

Other assets

 

116,259

 

 

 

102,901

 

Total assets

$

1,751,821

 

 

$

1,835,014

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Accounts payable

$

84,628

 

 

$

87,104

 

Accrued liabilities

 

129,511

 

 

 

142,988

 

Current maturities of long-term debt

 

2,732

 

 

 

4,218

 

Income taxes payable

 

7,765

 

 

 

14,369

 

Total current liabilities

 

224,636

 

 

 

248,679

 

 

 

 

 

Long-term debt

 

374,325

 

 

 

452,667

 

Other noncurrent liabilities

 

151,892

 

 

 

139,385

 

Deferred taxes and other liabilities

 

27,620

 

 

 

26,963

 

Total liabilities

 

778,473

 

 

 

867,694

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued

 

 

 

 

 

Class A Common Stock, par value $0.001 per share; authorized 100,000,000 shares; 40,908,380 issued in 2024 and 40,856,910 in 2023

 

41

 

 

 

41

 

Additional paid in capital

 

452,461

 

 

 

448,218

 

Retained earnings

 

1,046,612

 

 

 

1,010,942

 

Accumulated items of other comprehensive income:

 

 

 

Translation adjustments

 

(154,304

)

 

 

(124,901

)

Pension and postretirement liability adjustments

 

(16,718

)

 

 

(17,346

)

Derivative valuation adjustment

 

4,115

 

 

 

9,079

 

Treasury stock (Class A), at cost; 9,661,845 shares in 2024 and 2023

 

(364,665

)

 

 

(364,665

)

Total shareholders' equity

 

967,542

 

 

 

961,368

 

Noncontrolling interest

 

5,806

 

 

 

5,952

 

Total equity

 

973,348

 

 

 

967,320

 

Total liabilities and shareholders' equity

$

1,751,821

 

 

$

1,835,014

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Six Months Ended June 30,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

Net income

 

$

52,089

 

 

$

53,912

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation

 

 

41,247

 

 

 

32,299

 

Amortization

 

 

3,446

 

 

 

3,018

 

Change in deferred taxes and other liabilities

 

 

(2,391

)

 

 

1,787

 

Impairment of property, plant and equipment

 

 

120

 

 

 

532

 

Non-cash interest expense

 

 

513

 

 

 

565

 

Compensation and benefits paid or payable in Class A Common Stock

 

 

4,243

 

 

 

2,274

 

Provision/(recovery) for credit losses from uncollected receivables and contract assets

 

 

(174

)

 

 

493

 

Foreign currency remeasurement gain on intercompany loans

 

 

(2,580

)

 

 

(3,198

)

Fair value adjustment on foreign currency contracts

 

 

3,109

 

 

 

(123

)

Gain on sale of assets

 

 

(512

)

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities that provided/(used) cash:

 

 

 

 

Accounts receivable

 

 

4,929

 

 

 

(40,131

)

Contract assets

 

 

(8,435

)

 

 

4,606

 

Inventories

 

 

3,062

 

 

 

(9,174

)

Prepaid expenses and other current assets

 

 

(2,454

)

 

 

(2,700

)

Income taxes prepaid and receivable

 

 

873

 

 

 

(381

)

Accounts payable

 

 

17,679

 

 

 

(5,255

)

Accrued liabilities

 

 

(15,367

)

 

 

(21,570

)

Income taxes payable

 

 

(5,599

)

 

 

(4,943

)

Noncurrent receivables

 

 

(379

)

 

 

1,705

 

Other noncurrent liabilities

 

 

(924

)

 

 

(1,922

)

Other, net

 

 

494

 

 

 

2,881

 

Net cash provided by operating activities

 

 

92,989

 

 

 

14,675

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property, plant and equipment

 

 

(46,616

)

 

 

(34,899

)

Purchased software

 

 

(40

)

 

 

(72

)

Proceeds received from sale of assets

 

 

1,029

 

 

 

 

Net cash used in investing activities

 

 

(45,627

)

 

 

(34,971

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from borrowings

 

 

43,282

 

 

 

61,000

 

Principal payments on debt

 

 

(122,828

)

 

 

(13,000

)

Taxes paid in lieu of share issuance

 

 

(2,446

)

 

 

(3,136

)

Dividends paid

 

 

(16,233

)

 

 

(15,570

)

Net cash (used in)/provided by financing activities

 

 

(98,225

)

 

 

29,294

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(6,118

)

 

 

142

 

 

 

 

 

 

(Decrease)/increase in cash and cash equivalents

 

 

(56,981

)

 

 

9,140

 

Cash and cash equivalents at beginning of period

 

 

173,420

 

 

 

291,776

 

Cash and cash equivalents at end of period

 

$

116,439

 

 

$

300,916

 

The following table presents the reconciliation of Net revenues to net revenues excluding the effect of changes in currency translation rates, a non-GAAP measure:

(in thousands, except percentages)

Net revenues as reported, Q2 2024

(Decrease)/ increase due to changes in currency translation rates

Q2 2024 revenues on same basis as Q2 2023 currency translation rates

Net revenues as reported, Q2 2023

% Change compared to Q2 2023, excluding currency rate effects

Machine Clothing

$

193,578

$

(1,128

)

$

194,706

$

159,217

22.3

%

Albany Engineered Composites

 

138,416

 

(219

)

 

138,635

 

114,906

20.7

%

Consolidated total

$

331,994

$

(1,347

)

$

333,341

$

274,123

21.6

%

 

 

 

 

 

 

(in thousands, except percentages)

Net revenues as reported, YTD 2024

(Decrease)/ increase due to changes in currency translation rates

YTD 2024 revenues on same basis as 2023 currency translation rates

Net revenues as reported, YTD 2023

% Change compared to 2023, excluding currency rate effects

Machine Clothing

$

378,795

$

(1,726

)

$

380,521

$

312,439

21.8

%

Albany Engineered Composites

 

266,529

 

2

 

 

266,527

 

230,780

15.5

%

Consolidated total

$

645,324

$

(1,724

)

$

647,048

$

543,219

19.1

%

The following table presents Gross profit and Gross profit margin:

(in thousands, except percentages)

Gross profit,

Q2 2024

Gross profit margin, Q2 2024

Gross profit,

Q2 2023

Gross profit margin, Q2 2023

Machine Clothing

$

88,873

45.9

%

$

80,919

50.8

%

Albany Engineered Composites

 

23,510

17.0

%

 

21,785

19.0

%

Consolidated total

$

112,383

33.9

%

$

102,704

37.5

%

 

 

 

 

 

(in thousands, except percentages)

Gross profit,

YTD 2024

Gross profit margin, YTD 2024

Gross profit,

YTD 2023

Gross profit margin, YTD 2023

Machine Clothing

$

173,528

45.8

%

$

158,774

50.8

%

Albany Engineered Composites

 

47,541

17.8

%

 

43,248

18.7

%

Consolidated total

$

221,069

34.3

%

$

202,022

37.2

%

A reconciliation from Net income/(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended June 30, 2024

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

53,685

 

$

9,434

 

$

(38,399

)

$

24,720

 

Interest expense/(income), net

 

 

 

 

 

2,950

 

 

2,950

 

Income tax expense

 

 

 

 

 

9,578

 

 

9,578

 

Depreciation and amortization expense

 

8,081

 

 

13,161

 

 

1,147

 

 

22,389

 

EBITDA (non-GAAP)

 

61,766

 

 

22,595

 

 

(24,724

)

 

59,637

 

Restructuring costs

 

1,584

 

 

922

 

 

115

 

 

2,621

 

Foreign currency revaluation (gains)/losses (a)

 

(1,272

)

 

(42

)

 

139

 

 

(1,175

)

Other transition expenses

 

 

 

 

 

1,368

 

 

1,368

 

Acquisition/integration costs

 

345

 

 

 

 

424

 

 

769

 

Pre-tax (income) attributable to noncontrolling interest

 

(58

)

 

(80

)

 

 

 

(138

)

Adjusted EBITDA (non-GAAP)

$

62,365

 

$

23,395

 

$

(22,678

)

$

63,082

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)

 

32.2

%

 

16.9

%

 

 

 

19.0

%

 

 

 

 

 

Three months ended June 30, 2023

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

53,726

 

$

8,668

 

$

(35,568

)

$

26,826

 

Interest expense/(income), net

 

 

 

 

 

3,106

 

 

3,106

 

Income tax expense

 

 

 

 

 

20,080

 

 

20,080

 

Depreciation and amortization expense

 

4,931

 

 

12,072

 

 

947

 

 

17,950

 

EBITDA (non-GAAP)

 

58,657

 

 

20,740

 

 

(11,435

)

 

67,962

 

Restructuring costs

 

125

 

 

 

 

 

 

125

 

Foreign currency revaluation (gains)/losses (a)

 

566

 

 

133

 

 

(4,185

)

 

(3,486

)

Acquisition/integration costs

 

 

 

271

 

 

363

 

 

634

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(212

)

 

 

 

(212

)

Adjusted EBITDA (non-GAAP)

$

59,348

 

$

20,932

 

$

(15,257

)

$

65,023

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)

 

37.3

%

 

18.2

%

 

 

 

23.7

%

Six months ended June 30, 2024

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

101,795

 

$

18,622

 

$

(68,328

)

$

52,089

 

Interest expense/(income), net

 

 

 

 

 

6,269

 

 

6,269

 

Income tax expense

 

 

 

 

 

20,849

 

 

20,849

 

Depreciation and amortization expense

 

16,182

 

 

26,220

 

 

2,291

 

 

44,693

 

EBITDA (non-GAAP)

 

117,977

 

 

44,842

 

 

(38,919

)

 

123,900

 

Restructuring costs

 

1,605

 

 

3,110

 

 

115

 

 

4,830

 

Foreign currency revaluation (gains)/losses (a)

 

(2,682

)

 

238

 

 

(1,157

)

 

(3,601

)

Other transition expenses

 

 

 

 

 

1,493

 

 

1,493

 

Acquisition/integration costs

 

1,058

 

 

182

 

 

850

 

 

2,090

 

Pre-tax (income) attributable to noncontrolling interest

 

(69

)

 

(185

)

 

 

 

(254

)

Adjusted EBITDA (non-GAAP)

$

117,889

 

$

48,187

 

$

(37,618

)

$

128,458

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues-non-GAAP)

 

31.1

%

 

18.1

%

 

 

 

19.9

%

 

 

 

 

 

Six months ended June 30, 2023

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

102,690

 

$

18,086

 

$

(66,864

)

$

53,912

 

Interest expense/(income), net

 

 

 

 

 

6,396

 

 

6,396

 

Income tax expense

 

 

 

 

 

30,701

 

 

30,701

 

Depreciation and amortization expense

 

9,706

 

 

23,736

 

 

1,875

 

 

35,317

 

EBITDA (non-GAAP)

 

112,396

 

 

41,822

 

 

(27,892

)

 

126,326

 

Restructuring costs

 

145

 

 

 

 

 

 

145

 

Foreign currency revaluation (gains)/losses (a)

 

2,526

 

 

 

 

(4,125

)

 

(1,599

)

Acquisition/integration costs

 

 

 

540

 

 

363

 

 

903

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(401

)

 

 

 

(401

)

Adjusted EBITDA (non-GAAP)

$

115,067

 

$

41,961

 

$

(31,654

)

$

125,374

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues-non-GAAP)

 

36.8

%

 

18.2

%

 

 

 

23.1

%

 

 

 

 

 

Per share impact of the adjustments to earnings per share are as follows:

Three months ended June 30, 2024

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring costs

$

2,621

 

$

583

 

$

2,038

 

$

0.07

 

Foreign currency revaluation (gains)/losses (a)

 

(1,175

)

 

(377

)

 

(798

)

 

(0.03

)

Other transition expenses

 

1,368

 

 

267

 

 

1,101

 

 

0.04

 

Acquisition/integration costs

 

769

 

 

188

 

 

581

 

 

0.02

 

 

 

 

 

 

Three months ended June 30, 2023

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring costs

$

125

 

$

31

 

$

94

 

$

0.00

 

Foreign currency revaluation (gains)/losses (a)

 

(3,486

)

 

(1,034

)

 

(2,452

)

 

(0.08

)

Withholding tax related to internal restructuring

 

 

 

(3,026

)

 

3,026

 

 

0.10

 

Acquisition/integration costs

 

634

 

 

158

 

 

476

 

 

0.02

 

 

 

 

 

 

Six months ended June 30, 2024

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring costs

$

4,830

 

$

1,168

 

$

3,662

 

$

0.12

 

Foreign currency revaluation (gains)/losses (a)

 

(3,601

)

 

(1,143

)

 

(2,458

)

 

(0.08

)

Other transition expenses

 

1,493

 

 

298

 

 

1,195

 

 

0.04

 

Acquisition/integration costs

 

2,090

 

 

575

 

 

1,515

 

 

0.05

 

 

 

 

 

 

Six months ended June 30, 2023

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring costs

$

145

 

$

35

 

$

110

 

$

0.00

 

Foreign currency revaluation (gains)/losses (a)

 

(1,599

)

 

(481

)

 

(1,118

)

 

(0.04

)

Withholding tax related to internal restructuring

 

 

 

(3,026

)

 

3,026

 

 

0.10

 

Acquisition/integration costs

 

903

 

 

235

 

 

668

 

 

0.02

 

 

 

 

 

 

The following table provides a reconciliation of Diluted Earnings per share to Adjusted Diluted Earnings per share:

 

Three months ended June 30,

Six months ended June 30,

Per share amounts (Diluted)

2024

2023

2024

2023

Earnings per share attributable to Company shareholders - Basic (GAAP)

$

0.79

 

$

0.86

 

$

1.66

 

$

1.72

 

Effect of dilutive stock-based compensation plans

 

 

 

(0.01

)

 

 

 

(0.01

)

Earnings per share attributable to Company shareholders - Diluted (GAAP)

$

0.79

 

$

0.85

 

$

1.66

 

$

1.71

 

Adjustments, after tax:

 

 

 

 

Restructuring costs

 

0.07

 

 

 

 

0.12

 

 

 

Foreign currency revaluation (gains)/losses (a)

 

(0.03

)

 

(0.08

)

 

(0.08

)

 

(0.04

)

Other transition expenses

 

0.04

 

 

 

 

0.04

 

 

 

Withholding tax related to internal restructuring

 

 

 

0.10

 

 

 

 

0.10

 

Acquisition/integration costs

 

0.02

 

 

0.02

 

 

0.05

 

 

0.02

 

Adjusted Diluted Earnings per share (non-GAAP)

$

0.89

 

$

0.89

 

$

1.79

 

$

1.79

 

The calculations of net debt are as follows:

(in thousands)

June 30, 2024

December 31, 2023

June 30, 2023

Current maturities of long-term debt

$

2,732

$

4,218

$

Long-term debt

 

374,325

 

452,667

 

487,000

Total debt

 

377,057

 

456,885

 

487,000

Cash and cash equivalents

 

116,439

 

173,420

 

300,916

Net debt (non-GAAP)

$

260,618

$

283,465

$

186,084

The calculation of net leverage ratio as of June 30, 2024 is as follows:

Total Company

 

Twelve months ended

Six months ended

Trailing twelve

months ended

(in thousands)

December 31,

2023

June 30,

2023

June 30,

2024

June 30, 2024

(non-GAAP) (b)

Net income/(loss) (GAAP)

$

111,610

 

$

53,912

 

$

52,089

 

$

109,787

 

Interest expense/(income), net

 

13,601

 

 

6,396

 

 

6,269

 

 

13,474

 

Income tax expense

 

48,846

 

 

30,701

 

 

20,849

 

 

38,994

 

Depreciation and amortization expense

 

76,733

 

 

35,317

 

 

44,693

 

 

86,109

 

EBITDA (non-GAAP)

 

250,790

 

 

126,326

 

 

123,900

 

 

248,364

 

Restructuring costs

 

282

 

 

145

 

 

4,830

 

 

4,967

 

Foreign currency revaluation (gains)/losses (a)

 

1,296

 

 

(1,599

)

 

(3,601

)

 

(706

)

CEO and other transition expenses

 

2,719

 

 

 

 

1,493

 

 

4,212

 

Inventory step-up impacting Cost of goods sold

 

5,480

 

 

 

 

 

 

5,480

 

Acquisition/integration costs

 

5,194

 

 

903

 

 

2,090

 

 

6,381

 

Pre-tax (income) attributable to noncontrolling interest

 

(665

)

 

(401

)

 

(254

)

 

(518

)

Adjusted EBITDA (non-GAAP)

$

265,096

 

$

125,374

 

$

128,458

 

$

268,180

 

(in thousands, except for net leverage ratio)

June 30, 2024

Net debt (non-GAAP)

$

260,618

Trailing twelve months Adjusted EBITDA (non-GAAP)

 

268,180

Net leverage ratio (non-GAAP)

 

0.97

 

 

(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date.

(b) Calculated as amounts incurred during the twelve months ended December 31, 2023, less those incurred during the six months ended June 30, 2023, plus those incurred during the six months June 30, 2024.

The tables below provide a reconciliation of forecasted full-year 2024 Adjusted EBITDA and Adjusted Diluted EPS (non-GAAP measures) to the comparable GAAP measures.

Forecast of Full Year 2024 Adjusted EBITDA

Machine Clothing

 

Engineered Composites

(in millions)

Low

High

 

Low

High

Net income attributable to the Company (GAAP) (c)

$

200

 

$

215

 

 

$

44

 

$

49

 

Income attributable to the noncontrolling interest

 

 

 

 

 

 

(1

)

 

(1

)

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

30

 

 

35

 

 

 

50

 

 

55

 

EBITDA (non-GAAP)

 

230

 

 

250

 

 

 

93

 

 

103

 

Restructuring costs (d)

 

2

 

 

2

 

 

 

3

 

 

3

 

Foreign currency revaluation (gains)/losses (d)

 

(3

)

 

(3

)

 

 

 

 

 

Acquisition/integration costs (d)

 

1

 

 

1

 

 

 

 

 

 

Pre-tax (income)/loss attributable to non-controlling interest

 

 

 

 

 

 

1

 

 

1

 

Adjusted EBITDA (non-GAAP)

$

230

 

$

250

 

 

$

97

 

$

107

 

(c) Interest, Other income/expense and Income taxes are not allocated to the business segments

 

 

 

 

 

 

 

Forecast of Full Year 2024 Adjusted EBITDA

Total Company

 

 

 

(in millions)

Low

High

 

 

 

Net income attributable to the Company (GAAP)

$

107

 

$

122

 

 

 

 

Income attributable to the noncontrolling interest

 

(1

)

 

(1

)

 

 

 

Interest expense/(income), net

 

17

 

 

18

 

 

 

 

Income tax expense

 

47

 

 

51

 

 

 

 

Depreciation and amortization

 

85

 

 

95

 

 

 

 

EBITDA (non-GAAP)

 

255

 

 

285

 

 

 

 

Restructuring costs (d)

 

5

 

 

5

 

 

 

 

Foreign currency revaluation (gains)/losses (d)

 

(4

)

 

(4

)

 

 

 

Acquisition/integration costs (d)

 

2

 

 

2

 

 

 

 

Other transition expenses (d)

 

1

 

 

1

 

 

 

 

Pre-tax (income)/loss attributable to non-controlling interest

 

1

 

 

1

 

 

 

 

Adjusted EBITDA (non-GAAP)

$

260

 

$

290

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

Forecast of Full Year 2024 Earnings per share (diluted) (e)

Low

High

 

 

 

Net income attributable to the Company (GAAP)

$

3.42

 

$

3.92

 

 

 

 

Restructuring costs (d)

 

0.12

 

 

0.12

 

 

 

 

Foreign currency revaluation (gains)/losses (d)

 

(0.08

)

 

(0.08

)

 

 

 

Other transition expenses (d)

 

0.04

 

 

0.04

 

 

 

 

Acquisition/integration costs (d)

 

0.05

 

 

0.05

 

 

 

 

Adjusted Diluted Earnings per share (non-GAAP)

$

3.55

 

$

4.05

 

 

 

 

 

 

 

 

 

 

(d) Due to the uncertainty of these items, we are unable to forecast these items for 2024

(e) Calculations based on weighted average shares outstanding estimate of approximately 31.2 million

About Albany International Corp.

Albany International is a leading developer and manufacturer of engineered components, using advanced materials processing and automation capabilities, with two core businesses. Machine Clothing is the world’s leading producer of custom-designed, consumable belts essential for the manufacture of paper, paperboard, tissue and towel, pulp, non-wovens and a variety of other industrial applications. Albany Engineered Composites is a growing designer and manufacturer of advanced materials-based engineered components for demanding aerospace applications, supporting both commercial and military platforms. Albany International is headquartered in Rochester, New Hampshire, operates 32 facilities in 14 countries, employs approximately 6,000 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

Non-GAAP Measures

This release, including the conference call commentary associated with this release, contains certain non-GAAP measures, that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net revenues and percent change in net revenues, excluding the impact of currency translation effects; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted diluted earnings per share (or Adjusted Diluted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net revenues and change in Net revenues, after currency effects are excluded, provides management and investors insight into underlying revenues trends. Net revenues, or percent changes in net revenues, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

EBITDA (calculated as net income excluding interest, income taxes, depreciation and amortization), Adjusted EBITDA, and Adjusted Diluted EPS are performance measures that relate to the Company’s continuing operations. The Company defines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance. Such excluded costs or benefits do not consist of normal, recurring cash items necessary to generate revenues or operate our business. Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of net revenues.

The Company defines Adjusted Diluted EPS as diluted earnings per share (GAAP), adjusted by the after tax per share amount of costs or benefits not reflective of the Company’s ongoing or expected future operational performance. The income tax effects are calculated using the applicable statutory income tax rate of the jurisdictions where such costs or benefits were incurred or the effective tax rate applicable to total company results.

The Company’s Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Diluted EPS may not be comparable to similarly titled measures of other companies.

Net debt aids investors in understanding the Company’s debt position if all available cash were applied to pay down indebtedness.

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Forward-Looking Statements

This press release may contain statements, estimates, guidance or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “should,” “look for,” “guidance,” “guide,” and similar expressions identify forward-looking statements, which generally are not historical in nature. Because forward-looking statements are subject to certain risks and uncertainties (including, without limitation, those set forth in the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q), actual results may differ materially from those expressed or implied by such forward-looking statements.

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic conditions, including inflationary cost pressures, as well as global events, which include but are not limited to geopolitical events; paper-industry trends and conditions during the current year and in future years; expectations in the current period and in future periods of revenues, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net revenues), Adjusted Diluted EPS, income, gross profit, gross margin, cash flows and other financial items in each of the Company’s businesses, and for the Company as a whole; the timing and impact of production and development programs in the Company’s AEC business segment and the revenues growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company’s financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Statements expressing management’s assessments of the growth potential of its businesses, or referring to earlier assessments of such potential, are not intended as forecasts of actual future growth, and should not be relied on as such. While management believes such assessments to have a reasonable basis, such assessments are, by their nature, inherently uncertain. This release and earlier releases set forth a number of assumptions regarding these assessments, including historical results, independent forecasts regarding the markets in which these businesses operate, and the timing and magnitude of orders for our customers’ products. Historical growth rates are no guarantee of future growth, and such independent forecasts and assumptions could prove materially incorrect in some cases.

Contacts

Investor / Media Contact:

JC Chetnani

VP-Investor Relations and Treasurer

+1 (603) 330-5851

jc.chetnani@albint.com

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