AIN Albany International Corp

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

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030119209/en/

Investor / Media Contact: JC Chetnani VP-Investor Relations and Treasurer jc.chetnani@albint.com