Albany International Corp. (NYSE:AIN) today reported operating results for its third quarter of 2024, which ended September 30, 2024.
"I am pleased with the overall results of the quarter as we focused on operational excellence evidenced by strong results at Machine Clothing and Free Cash Flow generation of $78 million year-to-date. We are addressing the issues announced earlier this month, with specific emphasis on our Salt Lake Facility. Revenues of $298 million was up $17 million or 6.1% over prior year," said President and CEO, Gunnar Kleveland.
"In Machine Clothing, revenues of $183 million grew year-over-year, driven by our Heimbach acquisition. Our global order backlog remains stable and we continue to make progress with the integration at Heimbach.
"In Engineered Composites, we recorded revenues of $115 million, while our profitability was impacted by our previously announced EAC adjustments. Our backlog is well over $1 billion and longer term we continue to see growth in our defense and commercial programs," concluded Kleveland.
For the third quarter ended September 30, 2024:
- Net revenues were $298 million, up 6.1%, or 5.8% after adjusting for currency translation, when compared to the prior year. MC's net revenues increased 9.9%, reflecting a full quarter of Heimbach Net revenues, which was partially offset by lower net revenues in the rest of the segment due to decreased sales in packaging and publication grades. AEC's net revenues were largely in line with the prior year, increasing 0.7%, primarily driven by growth on certain commercial and space programs, which was partially offset by lower revenues on CH-53K and other defense programs.
- Gross profit of $90 million was 11.2% lower than the $102 million reported for the same period of 2023; overall gross margin declined nearly 6.0% driven by changes in the estimated profitability of long-term contracts at AEC.
- Selling, General, and Administrative (SG&A) expenses were $52 million, largely in line with prior year.
- Operating income was $25 million, compared to $40 million in the prior year, the result of lower Gross profit at AEC and increased Technical, Research and Restructuring expenses at MC.
- Effective tax rate for the quarter was 6.6%, compared to 25.3% for the third quarter of 2023. The 2024 rate was lower primarily due to favorable discrete tax adjustments in the current period exceeding favorable discrete tax adjustments in the prior period.
- Net income attributable to the Company was $18 million ($0.57 per share), compared to $27 million ($0.87 per share) in the third quarter of 2023; Adjusted diluted earnings per share (or Adjusted diluted EPS, a non-GAAP measure) was $0.80 per share in the third quarter of 2024, compared to $1.02 per share in the third quarter of 2023. Adjusted EBITDA (a non-GAAP measure) was $54 million, compared to $65 million in the third quarter of 2023, a decrease of 17.2%.
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 updating its guidance for the full year of 2024 as follows:
- Total company revenue between $1.23 billion to $1.25 billion;
- Effective income tax rate of approximately 27%;
- Capital expenditures in the range of $85 to $90 million;
- Adjusted diluted earnings per share between $3.10 and $3.30;
- Total company Adjusted EBITDA between $237 million to $247 million;
- Machine Clothing revenue between $745 million to $755 million;
- Machine Clothing Adjusted EBITDA between $238 million and $243 million;
- Albany Engineered Composites revenue between $485 million to $495 million; and
- Albany Engineered Composites Adjusted EBITDA between $68 million to $73 million.
ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) |
|||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||
|
2024 |
|
2023 |
|
2024 |
|
|
2023 |
|
||||
Net revenues |
$ |
298,386 |
|
$ |
281,106 |
|
$ |
943,710 |
|
$ |
824,325 |
|
|
Cost of goods sold |
|
208,002 |
|
|
179,271 |
|
|
632,257 |
|
|
520,468 |
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit |
|
90,384 |
|
|
101,835 |
|
|
311,453 |
|
|
303,857 |
|
|
Selling, general, and administrative expenses |
|
52,097 |
|
|
51,975 |
|
|
162,447 |
|
|
147,214 |
|
|
Technical and research expenses |
|
10,844 |
|
|
9,708 |
|
|
35,369 |
|
|
30,303 |
|
|
Restructuring expenses, net |
|
2,272 |
|
|
82 |
|
|
6,584 |
|
|
227 |
|
|
|
|
|
|
|
|
|
|
||||||
Operating income |
|
25,171 |
|
|
40,070 |
|
|
107,053 |
|
|
126,113 |
|
|
Interest expense/(income), net |
|
2,411 |
|
|
3,653 |
|
|
8,680 |
|
|
10,049 |
|
|
Other (income)/expense, net |
|
3,257 |
|
|
56 |
|
|
5,932 |
|
|
(4,910 |
) |
|
|
|
|
|
|
|
|
|
||||||
Income before income taxes |
|
19,503 |
|
|
36,361 |
|
|
92,441 |
|
|
120,974 |
|
|
Income tax expense |
|
1,282 |
|
|
9,207 |
|
|
22,131 |
|
|
39,908 |
|
|
|
|
|
|
|
|
|
|
||||||
Net income |
|
18,221 |
|
|
27,154 |
|
|
70,310 |
|
|
81,066 |
|
|
Net income attributable to the noncontrolling interest |
|
192 |
|
|
45 |
|
|
366 |
|
|
396 |
|
|
Net income attributable to the Company |
$ |
18,029 |
|
$ |
27,109 |
|
$ |
69,944 |
|
$ |
80,670 |
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per share attributable to Company shareholders - Basic |
$ |
0.58 |
|
$ |
0.87 |
|
$ |
2.24 |
|
$ |
2.59 |
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per share attributable to Company shareholders - Diluted |
$ |
0.57 |
|
$ |
0.87 |
|
$ |
2.23 |
|
$ |
2.58 |
|
|
|
|
|
|
|
|
|
|
||||||
Shares of the Company used in computing earnings per share: |
|
|
|
|
|
|
|
||||||
Basic |
|
31,251 |
|
|
31,185 |
|
|
31,234 |
|
|
31,163 |
|
|
|
|
|
|
|
|
|
|
||||||
Diluted |
|
31,367 |
|
|
31,283 |
|
|
31,333 |
|
|
31,256 |
|
|
|
|
|
|
|
|
|
|
||||||
Dividends declared per Class A share |
$ |
0.26 |
|
$ |
0.25 |
|
$ |
0.78 |
|
$ |
0.75 |
|
|
ALBANY INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) |
||||||||
|
|
|
|
|
||||
|
|
September 30, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
127,222 |
|
|
$ |
173,420 |
|
|
Accounts receivable, net |
|
271,975 |
|
|
|
287,781 |
|
|
Contract assets, net |
|
195,782 |
|
|
|
182,281 |
|
|
Inventories |
|
160,617 |
|
|
|
169,567 |
|
|
Income taxes prepaid and receivable |
|
8,316 |
|
|
|
11,043 |
|
|
Prepaid expenses and other current assets |
|
40,399 |
|
|
|
53,872 |
|
|
Total current assets |
$ |
804,311 |
|
|
$ |
877,964 |
|
|
|
|
|
|
|||||
Property, plant and equipment, net |
|
583,455 |
|
|
|
601,989 |
|
|
Intangibles, net |
|
40,996 |
|
|
|
44,646 |
|
|
Goodwill |
|
180,912 |
|
|
|
180,181 |
|
|
Deferred income taxes |
|
26,979 |
|
|
|
22,941 |
|
|
Noncurrent receivables, net |
|
— |
|
|
|
4,392 |
|
|
Other assets |
|
116,548 |
|
|
|
102,901 |
|
|
Total assets |
$ |
1,753,201 |
|
|
$ |
1,835,014 |
|
|
|
|
|
|
|||||
Liabilities and Shareholders' Equity |
|
|
|
|||||
Accounts payable |
$ |
77,873 |
|
|
$ |
87,104 |
|
|
Accrued liabilities |
|
138,700 |
|
|
|
142,988 |
|
|
Current maturities of long-term debt |
|
555 |
|
|
|
4,218 |
|
|
Income taxes payable |
|
1,593 |
|
|
|
14,369 |
|
|
Total current liabilities |
|
218,721 |
|
|
|
248,679 |
|
|
|
|
|
|
|||||
Long-term debt |
|
361,639 |
|
|
|
452,667 |
|
|
Other noncurrent liabilities |
|
154,634 |
|
|
|
139,385 |
|
|
Deferred taxes and other liabilities |
|
21,531 |
|
|
|
26,963 |
|
|
Total liabilities |
|
756,525 |
|
|
|
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; 40,916,568 issued in 2024 and 40,856,910 in 2023 |
|
41 |
|
|
|
41 |
|
|
Additional paid in capital |
|
452,656 |
|
|
|
448,218 |
|
|
Retained earnings |
|
1,056,514 |
|
|
|
1,010,942 |
|
|
Accumulated items of other comprehensive income: |
|
|
|
|||||
Translation adjustments |
|
(137,373 |
) |
|
|
(124,901 |
) |
|
Pension and postretirement liability adjustments |
|
(17,341 |
) |
|
|
(17,346 |
) |
|
Derivative valuation adjustment |
|
1,165 |
|
|
|
9,079 |
|
|
Treasury stock (Class A), at cost; 9,661,845 shares in 2024 and 2023 |
|
(364,665 |
) |
|
|
(364,665 |
) |
|
Total shareholders' equity |
|
990,997 |
|
|
|
961,368 |
|
|
Noncontrolling interest |
|
5,679 |
|
|
|
5,952 |
|
|
Total equity |
|
996,676 |
|
|
|
967,320 |
|
|
Total liabilities and shareholders' equity |
$ |
1,753,201 |
|
|
$ |
1,835,014 |
|
|
ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
||||||||
|
|
|
||||||
|
|
Nine Months Ended September 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
70,310 |
|
|
$ |
81,066 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
|
|
61,813 |
|
|
|
50,164 |
|
Amortization |
|
|
5,190 |
|
|
|
4,614 |
|
Change in deferred taxes and other liabilities |
|
|
(7,552 |
) |
|
|
(1,264 |
) |
Impairment of property, plant and equipment |
|
|
1,425 |
|
|
|
577 |
|
Non-cash interest expense |
|
|
769 |
|
|
|
1,148 |
|
Compensation and benefits paid or payable in Class A Common Stock |
|
|
4,438 |
|
|
|
5,189 |
|
Provision/(recovery) for credit losses from uncollected receivables and contract assets |
|
|
40 |
|
|
|
641 |
|
Foreign currency remeasurement loss/(gain) on intercompany loans |
|
|
2,263 |
|
|
|
(4,704 |
) |
Fair value adjustment on foreign currency contracts |
|
|
1,105 |
|
|
|
581 |
|
Gain on sale of assets |
|
|
(515 |
) |
|
|
— |
|
|
|
|
|
|
||||
Changes in operating assets and liabilities that provided/(used) cash, net of impact of business acquisition: |
|
|
|
|
||||
Accounts receivable |
|
|
17,980 |
|
|
|
(18,172 |
) |
Contract assets |
|
|
(15,194 |
) |
|
|
(16,550 |
) |
Inventories |
|
|
5,918 |
|
|
|
(293 |
) |
Prepaid expenses and other current assets |
|
|
2,768 |
|
|
|
(3,030 |
) |
Income taxes prepaid and receivable |
|
|
2,602 |
|
|
|
1,597 |
|
Accounts payable |
|
|
7,316 |
|
|
|
(6,661 |
) |
Accrued liabilities |
|
|
(8,320 |
) |
|
|
(16,454 |
) |
Income taxes payable |
|
|
(11,995 |
) |
|
|
(5,810 |
) |
Noncurrent receivables |
|
|
(579 |
) |
|
|
2,276 |
|
Other noncurrent liabilities |
|
|
(17 |
) |
|
|
(3,602 |
) |
Other, net |
|
|
220 |
|
|
|
2,499 |
|
Net cash provided by operating activities |
|
|
139,985 |
|
|
|
73,812 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Purchase of business, net of cash acquired |
|
|
— |
|
|
|
(133,470 |
) |
Purchases of property, plant and equipment |
|
|
(61,985 |
) |
|
|
(48,850 |
) |
Purchased software |
|
|
(101 |
) |
|
|
(276 |
) |
Proceeds received from sale of assets |
|
|
1,033 |
|
|
|
— |
|
Net cash used in investing activities |
|
|
(61,053 |
) |
|
|
(182,596 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from borrowings |
|
|
48,106 |
|
|
|
71,249 |
|
Principal payments on debt |
|
|
(142,691 |
) |
|
|
(51,479 |
) |
Debt acquisition costs |
|
|
— |
|
|
|
(4,108 |
) |
Taxes paid in lieu of share issuance |
|
|
(2,832 |
) |
|
|
(3,136 |
) |
Dividends paid |
|
|
(24,356 |
) |
|
|
(23,365 |
) |
Net cash (used in)/provided by financing activities |
|
|
(121,773 |
) |
|
|
(10,839 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
(3,357 |
) |
|
|
(647 |
) |
|
|
|
|
|
||||
(Decrease)/increase in cash and cash equivalents |
|
|
(46,198 |
) |
|
|
(120,270 |
) |
Cash and cash equivalents at beginning of period |
|
|
173,420 |
|
|
|
291,776 |
|
Cash and cash equivalents at end of period |
|
$ |
127,222 |
|
|
$ |
171,506 |
|
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, Q3 2024 |
(Decrease)/ increase due to changes in currency translation rates |
Q3 2024 revenues on same basis as Q3 2023 currency translation rates |
Net revenues as reported, Q3 2023 |
% Change compared to Q3 2023, excluding currency rate effects |
|||||||||||
Machine Clothing |
$ |
183,033 |
$ |
727 |
|
$ |
182,306 |
$ |
166,588 |
9.4 |
% |
|||||
Albany Engineered Composites |
|
115,353 |
|
159 |
|
|
115,194 |
|
114,518 |
0.6 |
% |
|||||
Consolidated total |
$ |
298,386 |
$ |
886 |
|
$ |
297,500 |
$ |
281,106 |
5.8 |
% |
|||||
|
|
|
|
|
|
|||||||||||
(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 |
$ |
561,828 |
$ |
(999 |
) |
$ |
562,827 |
$ |
479,027 |
17.5 |
% |
|||||
Albany Engineered Composites |
|
381,882 |
|
161 |
|
|
381,721 |
|
345,298 |
10.5 |
% |
|||||
Consolidated total |
$ |
943,710 |
$ |
(838 |
) |
$ |
944,548 |
$ |
824,325 |
14.6 |
% |
|||||
The following table presents Gross profit and Gross profit margin: |
||||||||||||
(in thousands, except percentages) |
Gross profit, Q3 2024 |
Gross profit margin, Q3 2024 |
Gross profit, Q3 2023 |
Gross profit margin, Q3 2023 |
||||||||
Machine Clothing |
$ |
88,921 |
48.6 |
% |
$ |
79,257 |
47.6 |
% |
||||
Albany Engineered Composites |
|
1,463 |
1.3 |
% |
|
22,578 |
19.7 |
% |
||||
Consolidated total |
$ |
90,384 |
30.3 |
% |
$ |
101,835 |
36.2 |
% |
||||
|
|
|
|
|
||||||||
(in thousands, except percentages) |
Gross profit, YTD 2024 |
Gross profit margin, YTD 2024 |
Gross profit, YTD 2023 |
Gross profit margin, YTD 2023 |
||||||||
Machine Clothing |
$ |
262,449 |
46.7 |
% |
$ |
238,031 |
49.7 |
% |
||||
Albany Engineered Composites |
|
49,004 |
12.8 |
% |
|
65,826 |
19.1 |
% |
||||
Consolidated total |
$ |
311,453 |
33.0 |
% |
$ |
303,857 |
36.9 |
% |
||||
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 September 30, 2024 |
||||||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
Total Company |
||||||||||||
Net income/(loss) (GAAP) |
$ |
51,481 |
|
$ |
(10,293 |
) |
$ |
(22,967 |
) |
$ |
18,221 |
|
||||
Interest expense/(income), net |
|
— |
|
|
— |
|
|
2,411 |
|
|
2,411 |
|
||||
Income tax expense |
|
— |
|
|
— |
|
|
1,282 |
|
|
1,282 |
|
||||
Depreciation and amortization expense |
|
8,094 |
|
|
13,154 |
|
|
1,062 |
|
|
22,310 |
|
||||
EBITDA (non-GAAP) |
|
59,575 |
|
|
2,861 |
|
|
(18,212 |
) |
|
44,224 |
|
||||
Restructuring costs |
|
2,976 |
|
|
34 |
|
|
31 |
|
|
3,041 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
1,435 |
|
|
(348 |
) |
|
1,793 |
|
|
2,880 |
|
||||
Other transition expenses |
|
— |
|
|
993 |
|
|
(509 |
) |
|
484 |
|
||||
Strategic/integration costs |
|
410 |
|
|
— |
|
|
2,559 |
|
|
2,969 |
|
||||
Pre-tax (income) attributable to noncontrolling interest |
|
(41 |
) |
|
(8 |
) |
|
— |
|
|
(49 |
) |
||||
Adjusted EBITDA (non-GAAP) |
$ |
64,355 |
|
$ |
3,532 |
|
$ |
(14,338 |
) |
$ |
53,549 |
|
||||
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP) |
|
35.2 |
% |
|
3.1 |
% |
|
— |
|
|
17.9 |
% |
||||
Three months ended September 30, 2023 |
||||||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
Total Company |
||||||||||||
Net income/(loss) (GAAP) |
$ |
50,710 |
|
$ |
9,374 |
|
$ |
(32,930 |
) |
$ |
27,154 |
|
||||
Interest expense/(income), net |
|
— |
|
|
— |
|
|
3,653 |
|
|
3,653 |
|
||||
Income tax expense |
|
— |
|
|
— |
|
|
9,207 |
|
|
9,207 |
|
||||
Depreciation and amortization expense |
|
5,976 |
|
|
12,510 |
|
|
975 |
|
|
19,461 |
|
||||
EBITDA (non-GAAP) |
|
56,686 |
|
|
21,884 |
|
|
(19,095 |
) |
|
59,475 |
|
||||
Restructuring costs |
|
82 |
|
|
— |
|
|
— |
|
|
82 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
(656 |
) |
|
19 |
|
|
516 |
|
|
(121 |
) |
||||
CEO transition expenses |
|
— |
|
|
— |
|
|
2,052 |
|
|
2,052 |
|
||||
Inventory step-up impacting Cost of goods sold |
|
1,370 |
|
|
— |
|
|
— |
|
|
1,370 |
|
||||
Strategic/integration costs |
|
— |
|
|
273 |
|
|
1,642 |
|
|
1,915 |
|
||||
Pre-tax (income) attributable to noncontrolling interest |
|
— |
|
|
(73 |
) |
|
— |
|
|
(73 |
) |
||||
Adjusted EBITDA (non-GAAP) |
$ |
57,482 |
|
$ |
22,103 |
|
$ |
(14,885 |
) |
$ |
64,700 |
|
||||
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP) |
|
34.5 |
% |
|
19.3 |
% |
|
— |
|
|
23.0 |
% |
||||
Nine months ended September 30, 2024 |
||||||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
Total Company |
||||||||||||
Net income/(loss) (GAAP) |
$ |
153,276 |
|
$ |
8,329 |
|
$ |
(91,295 |
) |
$ |
70,310 |
|
||||
Interest expense/(income), net |
|
— |
|
|
— |
|
|
8,680 |
|
|
8,680 |
|
||||
Income tax expense |
|
— |
|
|
— |
|
|
22,131 |
|
|
22,131 |
|
||||
Depreciation and amortization expense |
|
24,276 |
|
|
39,374 |
|
|
3,353 |
|
|
67,003 |
|
||||
EBITDA (non-GAAP) |
|
177,552 |
|
|
47,703 |
|
|
(57,131 |
) |
|
168,124 |
|
||||
Restructuring costs |
|
4,581 |
|
|
3,144 |
|
|
146 |
|
|
7,871 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
(1,247 |
) |
|
(110 |
) |
|
636 |
|
|
(721 |
) |
||||
Other transition expenses |
|
— |
|
|
993 |
|
|
984 |
|
|
1,977 |
|
||||
Strategic/integration costs |
|
1,468 |
|
|
182 |
|
|
3,409 |
|
|
5,059 |
|
||||
Pre-tax (income) attributable to noncontrolling interest |
|
(110 |
) |
|
(193 |
) |
|
— |
|
|
(303 |
) |
||||
Adjusted EBITDA (non-GAAP) |
$ |
182,244 |
|
$ |
51,719 |
|
$ |
(51,956 |
) |
$ |
182,007 |
|
||||
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues-non-GAAP) |
|
32.4 |
% |
|
13.5 |
% |
|
— |
|
|
19.3 |
% |
||||
Nine months ended September 30, 2023 |
||||||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
Total Company |
||||||||||||
Net income/(loss) (GAAP) |
$ |
153,400 |
|
$ |
27,460 |
|
$ |
(99,794 |
) |
$ |
81,066 |
|
||||
Interest expense/(income), net |
|
— |
|
|
— |
|
|
10,049 |
|
|
10,049 |
|
||||
Income tax expense |
|
— |
|
|
— |
|
|
39,908 |
|
|
39,908 |
|
||||
Depreciation and amortization expense |
|
15,682 |
|
|
36,246 |
|
|
2,850 |
|
|
54,778 |
|
||||
EBITDA (non-GAAP) |
|
169,082 |
|
|
63,706 |
|
|
(46,987 |
) |
|
185,801 |
|
||||
Restructuring costs |
|
227 |
|
|
— |
|
|
— |
|
|
227 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
1,870 |
|
|
19 |
|
|
(3,609 |
) |
|
(1,720 |
) |
||||
CEO transition expenses |
|
— |
|
|
— |
|
|
2,052 |
|
|
2,052 |
|
||||
Inventory step-up impacting Cost of goods sold |
|
1,370 |
|
|
— |
|
|
— |
|
|
1,370 |
|
||||
Strategic/integration costs |
|
— |
|
|
813 |
|
|
2,005 |
|
|
2,818 |
|
||||
Pre-tax (income) attributable to noncontrolling interest |
|
— |
|
|
(474 |
) |
|
— |
|
|
(474 |
) |
||||
Adjusted EBITDA (non-GAAP) |
$ |
172,549 |
|
$ |
64,064 |
|
$ |
(46,539 |
) |
$ |
190,074 |
|
||||
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues-non-GAAP) |
|
36.0 |
% |
|
18.6 |
% |
|
— |
|
|
23.1 |
% |
||||
Per share impact of the adjustments to earnings per share are as follows: |
||||||||||||||||
Three months ended September 30, 2024 (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||||||
Restructuring costs |
$ |
3,041 |
|
$ |
345 |
|
$ |
2,696 |
|
$ |
0.09 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
2,880 |
|
|
1,000 |
|
|
1,880 |
|
|
0.06 |
|
||||
Other transition expenses |
|
484 |
|
|
121 |
|
|
363 |
|
|
0.01 |
|
||||
Strategic/integration costs |
|
2,969 |
|
|
799 |
|
|
2,170 |
|
|
0.07 |
|
||||
|
|
|
|
|
||||||||||||
Three months ended September 30, 2023 (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||||||
Restructuring costs |
$ |
82 |
|
$ |
21 |
|
$ |
61 |
|
$ |
0.00 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
(121 |
) |
|
(35 |
) |
|
(86 |
) |
|
0.00 |
|
||||
CEO transition expenses |
|
2,052 |
|
|
— |
|
|
2,052 |
|
|
0.07 |
|
||||
Inventory step-up impacting Cost of goods sold |
|
1,370 |
|
|
411 |
|
|
959 |
|
|
0.03 |
|
||||
Strategic/integration costs |
|
1,915 |
|
|
476 |
|
|
1,439 |
|
|
0.05 |
|
||||
|
|
|
|
|
||||||||||||
Nine months ended September 30, 2024 (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||||||
Restructuring costs |
$ |
7,871 |
|
$ |
1,511 |
|
$ |
6,360 |
|
$ |
0.20 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
(721 |
) |
|
(262 |
) |
|
(459 |
) |
|
(0.01 |
) |
||||
Other transition expenses |
|
1,977 |
|
|
443 |
|
|
1,534 |
|
|
0.05 |
|
||||
Strategic/integration costs |
|
5,059 |
|
|
1,373 |
|
|
3,686 |
|
|
0.12 |
|
||||
|
|
|
|
|
||||||||||||
Nine months ended September 30, 2023 (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||||||
Restructuring costs |
$ |
227 |
|
$ |
68 |
|
$ |
159 |
|
$ |
0.01 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
(1,720 |
) |
|
(504 |
) |
|
(1,216 |
) |
|
(0.04 |
) |
||||
CEO transition expenses |
|
2,052 |
|
|
— |
|
|
2,052 |
|
|
0.07 |
|
||||
Withholding tax related to internal restructuring |
|
— |
|
|
(3,026 |
) |
|
3,026 |
|
|
0.10 |
|
||||
Inventory step-up impacting Cost of goods sold |
|
1,370 |
|
|
411 |
|
|
959 |
|
|
0.03 |
|
||||
Strategic/integration costs |
|
2,818 |
|
|
725 |
|
|
2,093 |
|
|
0.07 |
|
||||
The following table provides a reconciliation of Diluted Earnings per share to Adjusted Diluted Earnings per share: |
|||||||||||||||
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||
Per share amounts (Diluted) |
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
Earnings per share attributable to Company shareholders - Basic (GAAP) |
$ |
0.58 |
|
$ |
0.87 |
$ |
2.24 |
|
$ |
2.59 |
|
||||
Effect of dilutive stock-based compensation plans |
|
(0.01 |
) |
|
— |
|
(0.01 |
) |
|
(0.01 |
) |
||||
Earnings per share attributable to Company shareholders - Diluted (GAAP) |
$ |
0.57 |
|
$ |
0.87 |
$ |
2.23 |
|
$ |
2.58 |
|
||||
Adjustments, after tax: |
|
|
|
|
|||||||||||
Restructuring costs |
|
0.09 |
|
|
— |
|
0.20 |
|
|
0.01 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
0.06 |
|
|
— |
|
(0.01 |
) |
|
(0.04 |
) |
||||
CEO and other transition expenses |
|
0.01 |
|
|
0.07 |
|
0.05 |
|
|
0.07 |
|
||||
Withholding tax related to internal restructuring |
|
— |
|
|
— |
|
— |
|
|
0.10 |
|
||||
Inventory step-up impacting Cost of goods sold |
|
— |
|
|
0.03 |
|
— |
|
|
0.03 |
|
||||
Strategic/integration costs |
|
0.07 |
|
|
0.05 |
|
0.12 |
|
|
0.07 |
|
||||
Adjusted Diluted Earnings per share (non-GAAP) |
$ |
0.80 |
|
$ |
1.02 |
$ |
2.59 |
|
$ |
2.82 |
|
||||
The calculations of net debt are as follows: |
|||||||||
(in thousands) |
September 30, 2024 |
December 31, 2023 |
September 30, 2023 |
||||||
Current maturities of long-term debt |
$ |
555 |
$ |
4,218 |
$ |
27,246 |
|||
Long-term debt |
|
361,639 |
|
452,667 |
|
463,339 |
|||
Total debt |
|
362,194 |
|
456,885 |
|
490,585 |
|||
Cash and cash equivalents |
|
127,222 |
|
173,420 |
|
171,506 |
|||
Net debt (non-GAAP) |
$ |
234,972 |
$ |
283,465 |
$ |
319,079 |
|||
The calculation of net leverage ratio as of September 30, 2024 is as follows: |
||||||||||||||||
Total Company |
||||||||||||||||
|
Twelve months ended |
Nine months ended |
Trailing twelve months ended |
|||||||||||||
(in thousands) |
December 31, 2023 |
September 30, 2023 |
September 30, 2024 |
September 30, 2024 (non-GAAP) (b) |
||||||||||||
Net income/(loss) (GAAP) |
$ |
111,610 |
|
$ |
81,066 |
|
$ |
70,310 |
|
$ |
100,854 |
|
||||
Interest expense/(income), net |
|
13,601 |
|
|
10,049 |
|
|
8,680 |
|
|
12,232 |
|
||||
Income tax expense |
|
48,846 |
|
|
39,908 |
|
|
22,131 |
|
|
31,069 |
|
||||
Depreciation and amortization expense |
|
76,733 |
|
|
54,778 |
|
|
67,003 |
|
|
88,958 |
|
||||
EBITDA (non-GAAP) |
|
250,790 |
|
|
185,801 |
|
|
168,124 |
|
|
233,113 |
|
||||
Restructuring costs |
|
282 |
|
|
227 |
|
|
7,871 |
|
|
7,926 |
|
||||
Foreign currency revaluation (gains)/losses (a) |
|
1,296 |
|
|
(1,720 |
) |
|
(721 |
) |
|
2,295 |
|
||||
CEO and other transition expenses |
|
2,719 |
|
|
2,052 |
|
|
1,977 |
|
|
2,644 |
|
||||
Inventory step-up impacting Cost of goods sold |
|
5,480 |
|
|
1,370 |
|
|
— |
|
|
4,110 |
|
||||
Strategic/integration costs |
|
5,194 |
|
|
2,818 |
|
|
5,059 |
|
|
7,435 |
|
||||
Pre-tax (income) attributable to noncontrolling interest |
|
(665 |
) |
|
(474 |
) |
|
(303 |
) |
|
(494 |
) |
||||
Adjusted EBITDA (non-GAAP) |
$ |
265,096 |
|
$ |
190,074 |
|
$ |
182,007 |
|
$ |
257,029 |
|
||||
(in thousands, except for net leverage ratio) |
September 30, 2024 |
|
Net debt (non-GAAP) |
$ |
234,972 |
Trailing twelve months Adjusted EBITDA (non-GAAP) |
|
257,029 |
Net leverage ratio (non-GAAP) |
|
0.91 |
(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 nine months ended September 30, 2023, plus those incurred during the nine months September 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) |
$ |
198 |
|
$ |
203 |
|
$ |
11 |
|
$ |
17 |
|
||||
Income attributable to the noncontrolling interest |
|
— |
|
|
— |
|
|
(1 |
) |
|
(1 |
) |
||||
Interest expense/(income), net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Income tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Depreciation and amortization |
|
32 |
|
|
32 |
|
|
53 |
|
|
52 |
|
||||
EBITDA (non-GAAP) |
|
230 |
|
|
235 |
|
|
63 |
|
|
68 |
|
||||
Restructuring costs |
|
7 |
|
|
7 |
|
|
3 |
|
|
3 |
|
||||
Foreign currency revaluation (gains)/losses (d) |
|
(1 |
) |
|
(1 |
) |
|
— |
|
|
— |
|
||||
Strategic/integration costs |
|
2 |
|
|
2 |
|
|
— |
|
|
— |
|
||||
Other transition expenses |
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
||||
Pre-tax (income)/loss attributable to non-controlling interest |
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
||||
Adjusted EBITDA (non-GAAP) |
$ |
238 |
|
$ |
243 |
|
$ |
68 |
|
$ |
73 |
|
||||
(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) |
$ |
84 |
|
$ |
90 |
|
|
|
||||||||
Income attributable to the noncontrolling interest |
|
(1 |
) |
|
(1 |
) |
|
|
||||||||
Interest expense/(income), net |
|
15 |
|
|
15 |
|
|
|
||||||||
Income tax expense |
|
31 |
|
|
34 |
|
|
|
||||||||
Depreciation and amortization |
|
91 |
|
|
92 |
|
|
|
||||||||
EBITDA (non-GAAP) |
|
220 |
|
|
230 |
|
|
|
||||||||
Restructuring costs |
|
10 |
|
|
10 |
|
|
|
||||||||
Foreign currency revaluation (gains)/losses (d) |
|
(1 |
) |
|
(1 |
) |
|
|
||||||||
Strategic/integration costs |
|
5 |
|
|
5 |
|
|
|
||||||||
Other transition expenses |
|
2 |
|
|
2 |
|
|
|
||||||||
Pre-tax (income)/loss attributable to non-controlling interest |
|
1 |
|
|
1 |
|
|
|
||||||||
Adjusted EBITDA (non-GAAP) |
$ |
237 |
|
$ |
247 |
|
|
|
||||||||
|
|
|
|
|
||||||||||||
|
Total Company |
|
|
|||||||||||||
Forecast of Full Year 2024 Earnings per share (diluted) (e) |
Low |
High |
|
|
||||||||||||
Net income attributable to the Company (GAAP) |
$ |
2.69 |
|
$ |
2.89 |
|
|
|
||||||||
Restructuring costs |
|
0.26 |
|
|
0.26 |
|
|
|
||||||||
Foreign currency revaluation (gains)/losses (d) |
|
(0.01 |
) |
|
(0.01 |
) |
|
|
||||||||
Other transition expenses |
|
0.03 |
|
|
0.03 |
|
|
|
||||||||
Strategic/integration costs |
|
0.13 |
|
|
0.13 |
|
|
|
||||||||
Adjusted Diluted Earnings per share (non-GAAP) |
$ |
3.10 |
|
$ |
3.30 |
|
|
|
||||||||
|
|
|
|
|
||||||||||||
(d) Due to the uncertainty of these items, we are unable to forecast the full year impact for 2024. Amounts above represent actual results for the nine months ended September 30, 2024. |
||||||||||||||||
(e) Calculations based on weighted average shares outstanding estimate of approximately 31.3 million |
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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. Excluded costs or benefits, such as restructuring costs, foreign currency revaluation gains and losses, and costs related to strategic, acquisition, integration and other transition-related initiatives that the Company may take, 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.
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Contacts
Investor / Media Contact:
JC Chetnani
VP-Investor Relations and Treasurer
jc.chetnani@albint.com
