Albany International Announces Anticipated Charge for Revision in Estimated Contract Profitability
July 10 2015 - 7:30AM
Business Wire
Sets Q2 Earnings Release and Webcast
Dates
Albany International Corp. (NYSE:AIN) announced today that it
expects to record a second-quarter charge of approximately $14
million associated with a revision in the estimated profitability
of a legacy contract in the Albany Engineered Composites segment
(AEC).
As disclosed in its first-quarter financial reports, AEC has a
long-term contract for the manufacture of composite components for
the Rolls-Royce BR 725 engine, which powers Gulfstream’s G-650
business jet. These components are manufactured in AEC’s Boerne,
Texas, operation. The contract for this program was signed in 2007
and contains a very aggressive approach to pricing compared to
AEC’s other contracts. AEC was required to fund certain development
costs for nonrecurring engineering and tooling and expected to
recover those costs over the duration of the contract, which is
anticipated to be more than 20 years. The deferred costs were
included in Other assets on the Company’s consolidated balance
sheet and, as of June 30, 2015, the Company had accumulated
deferred contract expenses of approximately $11 million. The
Company tests the recoverability of these deferred costs each
quarter. During the second quarter of 2015, the Company revised its
estimate of the profitability of this contract and determined that
the entire balance of these deferred costs should be written off.
Additionally, the Company has determined that an additional charge
of approximately $3 million should be recorded as a provision for
anticipated contract losses. The anticipated total charge of $14
million is expected to be included in Cost of goods sold for the
AEC segment.
The Company will release 2015 second-quarter financial results
after the close of the market on Tuesday, August 4, 2015, and it
will host a webcast to discuss earnings at 9:00 a.m. Eastern Time
on Wednesday, August 5. Interested parties are invited to listen to
the webcast via the Company’s Investor Relations website at
www.albint.com. A replay of the webcast will be available on the
website at approximately noon Eastern Time on August 5.
This release may contain statements, estimates, 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,” “would,”
“should” and similar expressions identify forward-looking
statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks and
uncertainties (including, without limitation, those set forth in
Albany’s most recent Annual Report on Form 10-K or Quarterly Report
on Form 10-Q) that could cause actual results to differ materially
from Albany’s historical experience and our present expectations or
projections. Forward-looking statements in this release include,
without limitation, statements about estimated contract
profitability and the likelihood, amount, and timing of other cash
and noncash charges. Such statements are based on current
expectations, and Albany undertakes no obligation to publicly
update or revise any forward-looking statements.
About Albany International Corp.
Albany International Corp. is a global advanced textiles and
materials processing company, with two core businesses. Machine
Clothing is the world's leading producer of custom-designed fabrics
and belts essential to production in the paper, nonwovens, and
other process industries. Albany Engineered Composites is a rapidly
growing supplier of highly engineered composite parts for the
aerospace industry. Albany International is headquartered in
Rochester, New Hampshire, operates 19 plants in 10 countries,
employs 4,000 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20150710005043/en/
Albany International Corp.Investors:John
Cozzolino,
518-445-2281john.cozzolino@albint.comorMedia:Susan Siegel,
603-330-5866susan.siegel@albint.com
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