UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): August 4, 2015
ALBANY
INTERNATIONAL CORP.
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(Exact
name of registrant as specified in its charter)
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Delaware
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1-10026
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14-0462060
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S Employer
Identification No.)
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216 Airport Drive, Rochester, New Hampshire
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03867
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (518) 445-2200
None
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(Former name or former address, if changed since last report.)
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On August 4, 2015, Albany International issued a news release reporting
second-quarter 2015 financial results. The Company will host a webcast
to discuss earnings at 9:00 a.m. Eastern Time on Wednesday, August 5.
Copies of the news release and management’s related earnings call slide
presentation are furnished as Exhibits 99.1 and 99.2, respectively, to
this report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The
following exhibit is being furnished herewith:
99.1 News
release dated August 4, 2015 reporting second-quarter 2015 financial
results.
99.2 Albany International Corp.
second-quarter 2015 Earnings Call Slide Presentation.
Signature
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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ALBANY INTERNATIONAL CORP.
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By:
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/s/ John B. Cozzolino
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Name: John B. Cozzolino
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Title: Chief Financial Officer and Treasurer
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(Principal Financial Officer)
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Date:
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August 4, 2015
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EXHIBIT INDEX
Exhibit No.
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Description
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99.1
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News release dated August 4, 2015 reporting second-quarter 2015
financial results.
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99.2
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Albany International Corp. second-quarter 2015 Earnings Call Slide
Presentation.
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Exhibit 99.1
Albany
International Reports Second-Quarter Results
Second-Quarter
Financial Highlights
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Net
sales were $172.3 million, a decrease of 11.0% compared to Q2 2014.
Excluding currency effects, net sales decreased 5.6% (see Table 1).
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Including
a charge of $14.0 million for a revision in the estimated
profitability of AEC’s BR725 contract, Adjusted EBITDA for Q2 2015 was
$18.8 million, compared to $37.3 million in Q2 2014 (see Tables 6 and
7).
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Year-to-date
net sales, excluding currency effects, increased 0.5% compared to 2014
(see Table 8). Including the $14.0 million charge, year-to-date
Adjusted EBITDA was $60.3 million in 2015, compared to $75.0 million
in 2014 (see Tables 9 and 10).
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Including
the $14.0 million charge ($0.28 per share), Q2 2015 income
attributable to the Company was a loss of $0.07 per share. Earnings
were reduced by restructuring charges of $0.02, foreign currency
revaluation losses of $0.04, and income tax adjustments of $0.02 (see
Tables 11 and 15).
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Q2 2014
income attributable to the Company was $0.35 per share. Earnings were
reduced by restructuring charges of $0.04 and income tax adjustments
of $0.03, and were increased by an insurance-recovery gain of $0.03
and foreign currency revaluation gains of $0.02 (see Tables 12 and 15).
ROCHESTER, N.H.--(BUSINESS WIRE)--August 4, 2015--Albany International
Corp. (NYSE:AIN) reported that Q2 2015 income before income taxes was a
loss of $2.5 million, including the previously announced BR725 charge of
$14.0 million, restructuring charges of $1.2 million, and losses of $2.3
million from foreign currency revaluation. Including the impact of these
items and charges of $0.7 million for income tax adjustments, income
attributable to the Company was a loss of $2.2 million.
As previously announced, the Company recorded a $14.0 million charge
($0.28 per share) for a revision in the estimated profitability of a
legacy contract in the Albany Engineered Composites segment (AEC). The
long-term contract is for the manufacture of composite components for
the Rolls-Royce BR725 engine, which powers the Gulfstream G650 business
jet. The components are manufactured in AEC’s facility in Boerne, Texas.
Q2 2014 income before income taxes was $18.4 million, including restructuring
charges of $2.0 million, gains of $1.0 million from foreign currency
revaluation, and an insurance-recovery gain of $1.0 million. Including
the impact of these items and charges of $0.8 million for income tax
adjustments, income attributable to the Company was $11.2 million.
Table 1 summarizes net sales and the effect of changes in currency
translation rates:
Table 1
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Impact of
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Net Sales
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Changes
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Percent Change
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Three Months ended
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in Currency
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excluding
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June,
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Percent
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Translation
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Currency
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(in thousands)
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2015
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2014
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Change
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Rates
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Rate Effect
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Machine Clothing (MC)
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$
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150,561
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$
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172,809
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-12.9
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%
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($9,970
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)
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-7.1
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%
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Albany Engineered Composites (AEC)
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21,728
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20,709
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4.9
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%
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(403
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)
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6.9
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%
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Total
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$
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172,289
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$
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193,518
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-11.0
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%
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($10,373
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)
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-5.6
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%
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Changes in currency translation rates, driven mainly by the stronger
U.S. dollar, resulted in a $10.4 million decline in sales for the second
quarter of 2015. Excluding that effect, MC sales were down 7.1% compared
to Q2 2014, principally due to lower sales volume in North America and
Europe, reflecting sharp declines in publication grades. Excluding
currency translation effects, AEC sales increased 6.9% to $21.7 million
in Q2 2015 due to growth in the LEAP program.
Q2 2015 gross profit was $54.6 million, or 31.7% net sales, compared to
$75.3 million, or 38.9% of net sales, in the same period of 2014. The
$14.0 million BR725 charge reduced Q2 2015 gross profit margin by 8.1%.
Q2 2015 MC gross profit was $68.1 million, or 45.2% of net sales,
compared to $73.3 million, or 42.4% of net sales, in Q2 2014. The
decline in MC gross profit was primarily the result of lower sales
volume in North America and Europe. Even though changes in currency
translation rates had a significant effect on MC net sales, it had only
a minor negative effect on gross profit. AEC gross profit was a loss of
$13.1 million in Q2 2015, compared to income of $2.4 million in the same
quarter of 2014. In addition to the $14.0 million charge, the decline in
gross profit was due to unfavorable sales mix in legacy programs.
Selling, technical, general, and research (STG&R) expenses were $50.3
million, or 29.2% of net sales, in the second quarter of 2015, compared
to $54.4 million, or 28.1% of net sales, in the second quarter of 2014.
The decline in STG&R results principally from the effects of changes in
currency translation rates and restructuring activities. The revaluation
of nonfunctional-currency assets and liabilities resulted in a loss of
$0.4 million in both quarters.
The following table presents expenses associated with internally funded
research and development by segment:
Table 2
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Research and development
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expenses by segment
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Three Months ended
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June 30,
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(in thousands)
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2015
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2014
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Machine Clothing
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$
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4,779
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$
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5,185
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Albany Engineered Composites
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2,905
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2,267
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Corporate expenses
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190
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199
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Total
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$
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7,874
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$
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7,651
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The following table summarizes second-quarter operating income by
segment:
Table 3
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Operating Income/(loss)
Three Months ended
June 30,
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(in thousands)
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2015
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2014
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Machine Clothing
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$
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33,323
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$
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33,879
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Albany Engineered Composites
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(18,633
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*
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(3,545
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Corporate expenses
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(11,652
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(11,357
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Total
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$
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3,038
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$
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18,977
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*Includes $14.0 million BR725 charge
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Segment operating income was affected by restructuring, currency
revaluation, and the BR725 charge as shown in Table 4 below.
Table 4
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Expenses/(gain) in Q2 2015
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Expenses/(gain) in Q2 2014
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resulting from
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resulting from
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(in thousands)
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Restructuring
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Revaluation
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BR725 Charge
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Restructuring
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Revaluation
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Machine Clothing
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$
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1,211
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$
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394
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$
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-
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$
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1,297
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$
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350
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Albany Engineered Composites
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-
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1
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14,000
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660
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61
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Corporate expenses
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-
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2
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-
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-
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2
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Total
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$
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1,211
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$
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397
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$
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14,000
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$
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1,957
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$
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413
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Q2 2015 Other income/expense, net, was expense of $2.8 million,
including losses related to the revaluation of nonfunctional-currency
balances of $1.9 million. Q2 2014 Other income/expense, net, was income
of $2.1 million, including gains related to the revaluation of
nonfunctional-currency balances of $1.4 million and an
insurance-recovery gain of $1.0 million.
The following table summarizes currency revaluation effects on certain
financial metrics:
Table 5
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Income/(loss) attributable
to currency revaluation
Three Months ended
June 30,
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(in thousands)
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2015
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2014
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Operating income
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($397
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($413
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Other income/(expense), net
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(1,878
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1,397
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Total
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($2,275
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$984
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The Company’s income tax rate, excluding tax adjustments, was 43.5% for
Q2 2015, compared to 36.5% for the same period of 2014. The higher tax
rate in Q2 2015 was due primarily to the impact of restructuring charges
where the Company is unable to record a tax benefit related to the
expense. Discrete tax charges and the effect of a change in the
estimated tax rate increased second-quarter income tax expense by $0.7
million in 2015 and $0.8 million in 2014.
The following tables summarize Adjusted EBITDA:
Table 6
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Three Months ended June 30, 2015
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Albany
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Corporate
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Machine
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Engineered
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expenses
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Total
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(in thousands)
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Clothing
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Composites
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and other
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Company
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Net income/(loss)
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$
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33,323
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($18,633
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*
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($16,810
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($2,120
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Interest expense, net
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-
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-
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2,702
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2,702
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Income tax expense/(benefit)
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-
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-
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(364
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(364
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Depreciation and amortization
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10,212
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2,869
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2,103
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15,184
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EBITDA
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43,535
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(15,764
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(12,369
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15,402
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Restructuring expenses, net
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1,211
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-
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-
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1,211
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Foreign currency revaluation (gains)/losses
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394
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1
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1,880
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2,275
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Pretax income attributable to noncontrolling interest in ASC
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-
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(64
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-
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(64
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Adjusted EBITDA
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$
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45,140
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($15,827
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)
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($10,489
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)
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$
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18,824
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* Includes $14.0 million BR725 charge
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Table 7
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Three Months ended June 30, 2014
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Albany
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Corporate
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Machine
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Engineered
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expenses
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Total
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(in thousands)
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Clothing
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Composites
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and other
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Company
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Net income
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$
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33,879
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($3,545
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($19,157
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$
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11,177
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Interest expense, net
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-
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-
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2,717
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2,717
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Income tax expense
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-
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-
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7,216
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7,216
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Depreciation and amortization
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11,554
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2,453
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2,090
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16,097
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EBITDA
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45,433
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(1,092
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(7,134
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37,207
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Restructuring expenses, net
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1,297
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660
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-
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1,957
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Foreign currency revaluation losses/(gains)
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350
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61
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(1,395
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)
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(984
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Gain on insurance recovery
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-
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-
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(961
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(961
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Pretax loss attributable to noncontrolling interest in ASC
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-
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45
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-
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45
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Adjusted EBITDA
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$
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47,080
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($326
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)
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($9,490
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)
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$
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37,264
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Capital spending was $18.8 million for Q2 2015, compared to $12.8
million for Q2 2014. Depreciation and amortization was $15.2 million for
Q2 2015, compared to $16.1 million for Q2 2014.
CFO Comments
CFO and Treasurer John Cozzolino commented, “During the quarter, the
Company entered into a new $400 million revolving credit facility with
its principal bank group. The new facility provides an additional $70
million of available financing and extends through June 2020 essentially
the same favorable terms, including LIBOR spreads, contained in the
previous agreement. At the end of Q2, $202 million was drawn down from
the facility. Up-front fees associated with the new facility were $1.6
million. Also, in July, we entered into interest rate swap transactions
that extend until June 2020 our interest rate protection on $110 million
to $120 million of our debt.
“Net debt (total debt less cash) increased $8 million to $120 million
(see Table 16), as capital expenditures included $9 million related to
the lease buyout of a building in Rochester, New Hampshire, that houses
the Company’s headquarters and AEC’s R&D center. The Company’s leverage
ratio, as defined in our primary debt agreements, increased from 1.28 at
the end of Q1 to 1.55 at the end of Q2. Capital expenditures for the
first six months of the year were $31 million, and we currently estimate
full-year spending in 2015 to be $60 million to $70 million. Cash paid
for income taxes was about $5 million in Q2, and we estimate cash taxes
in 2015 to range from $20 million to $23 million.
“Compared to currency rates in effect during Q2 2014, net sales were
once again negatively impacted by the broadly stronger U.S. dollar while
the impact on Adjusted EBITDA was somewhat positive. In the future, the
currency impact on Adjusted EBITDA could be significantly different
depending on the movement of the U.S. dollar against any of our key
foreign currency net income or expense exposures.”
CEO Comments
President and CEO Joe Morone said, “Following our good performance in
Q1, Q2 2015 was a weak quarter for Albany International with sales and
EBITDA considerably lower than in the comparable period in 2014.
Nonetheless, year-to-date MC Adjusted EBITDA and AEC sales are in line
with expectations and ahead of last year’s pace, and we remain on track
toward our full-year outlook of comparable year-over-year Adjusted
EBITDA in MC and 5-10% growth in sales in AEC. And of significance for
the longer term, there were several important developments during the
quarter, the most notable being a decision to respond to the rapidly
growing demand for LEAP engines by building a third plant.
“In MC, excluding currency effects, sales were down 7% compared to Q2
2014, primarily due to a sharply weaker market and lower sales in the
publication grades in North America and Europe. The other grades
performed as expected. And despite the economic instabilities, sales in
China and South America were stable. Year to date, and excluding
currency effects, sales are 2% behind the first half of 2014 and orders
are 3% ahead.
“Q2 Gross profit margins remained strong and well above Q2 2014 levels.
This mitigated the impact of the weak sales on adjusted EBITDA, which
declined 4% compared to Q2 2014 and which leaves year-to-date Adjusted
EBITDA 1.5% ahead of the first half of 2014.
“We continued to make good progress during the quarter on the shift of
sales mix away from publication grades. Meanwhile, in the development of
our new technology platform, we ran successful trials with important
customers in the tissue segment, scheduled initial trials in the
packaging sector, and are seeing encouraging results from initial
prototypes across all of our product lines.
“Turning to AEC, during Q2 we recorded a charge of $14 million related
to composite parts for the BR725 engine, a small, legacy program,
manufactured in our Boerne, Texas, operations and governed by a contract
signed in 2007 that sets very aggressive pricing levels. As discussed in
previous releases, Boerne’s operational performance has improved
dramatically, with strong on-time deliveries and good yields, including
on the BR725 program. But as we’ve gained more manufacturing experience
with the BR725, we’ve concluded that future costs are likely to be
higher than previously estimated, and given the challenging price
levels, this led to the conclusion that we needed to take the $14
million charge.
“In other respects, AEC performed well, and is firmly on track both for
our full-year forecast of 5-10% growth in sales and for the LEAP ramp
that begins late next year. The most important development this quarter
was the decision to build a third joint plant with Safran for the LEAP
program, this one in Mexico. Annual production of the LEAP engine is now
projected to reach at least 1,900 engines by 2020, and Boeing and Airbus
are publically pressuring CFM to increase production to even higher
levels. The addition of the GE9X fan case, which we will produce in
Rochester, the much higher-than-expected demand for LEAP engines, and
the possibility of still higher levels of demand by next decade all led
to the decision to move forward with plant three as soon as possible.
Groundbreaking is scheduled for next year, with initial operation
targeted for late 2017. We are not at this time altering our projection
of total annual capital spending for the company of, on average, $70
million. The likely impact of the higher LEAP demand and third plant
will be to stretch the years of peak spending for LEAP by one to two
years, rather than increase peak spending in any one year.
“As for R&D, this was a very encouraging quarter, with good progress on
a number of potentially important airframe and engine projects, for both
the near and long term. While significant uncertainties remain on all of
them, several are approaching important development or commercialization
decision points. Likewise, with Ricardo, we are actively engaged with a
number of automotive OEMs in technical assessments of the viability of
AEC technology for application in the high-performance, super-luxury
segment of the automotive market. We expect to have developed a clear
understanding of the near-term commercial viability of our technology
for this market segment within the next six to twelve months.
“As mentioned above, our outlook for the full-year remains unchanged. We
continue to view macroeconomic uncertainties as the primary source of
downside risk to our outlook, and given recent developments in such key
growth markets as China and Brazil, that risk appears to be growing. But
barring further deterioration in the macroeconomic environment, we
continue to expect MC Adjusted EBITDA for the second half of the year,
and thus full-year Adjusted EBITDA, to be comparable to last year; and
for AEC, we expect a strong second-half of the year, with full-year
revenue at least 5-10% ahead of 2014.
“In sum, this was a weak quarter due primarily to lower MC sales in the
publication grades in North America and Europe, compounded by the charge
for the BR725 program. But in the larger picture, we remain firmly on
track in both businesses -- in the short term, toward our full-year
outlook, and for the longer term, toward our strategic objectives of
steady EBITDA and cash flow in MC, and a decade or more of double-digit
growth in AEC, driven primarily by LEAP and additionally by new projects
emerging from the pipeline.”
The Company plans a webcast to discuss second-quarter 2015 financial
results on Wednesday, August 5, 2015, at 9:00 a.m. Eastern Time. For
access, go to www.albint.com.
About Albany International Corp.
Albany International 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.
This release contains certain items, such as earnings before
interest, taxes, depreciation and amortization (EBITDA), Adjusted
EBITDA, sales excluding currency effects, income tax rate excluding
adjustments, net debt, net income attributable to the Company, excluding
adjustments (on an absolute and per-share basis), and certain income and
expense items on a per-share basis that could be considered non-GAAP
financial measures. Such items are provided because management believes
that, when presented together with the GAAP items to which they relate,
they provide additional useful information to investors regarding the
Company’s operational performance. Presenting increases or decreases in
sales, after currency effects are excluded, can give management and
investors insight into underlying sales trends. An understanding of the
impact in a particular quarter of specific restructuring costs, or other
gains and losses, on operating income or EBITDA can give management and
investors additional insight into quarterly performance, especially when
compared to quarters in which such items had a greater or lesser effect,
or no effect. All non-GAAP financial measures in this release relate to
the Company’s continuing operations.
The effect of changes in currency translation rates is calculated by
converting amounts reported in local currencies into U.S. dollars at the
exchange rate of a prior period. That amount is then compared to the
U.S. dollar amount reported in the current period. The Company
calculates Income tax adjustments by adding discrete tax items to the
effect of a change in tax rate for the reporting period. The Company
calculates its income tax rate, exclusive of income tax adjustments, by
removing income tax adjustments from total Income tax expense, then
dividing that result by Income before income taxes. The Company
calculates EBITDA by removing the following from Net income: Interest
expense net, Income tax expense, Depreciation and amortization, and
Income or loss from Discontinued Operations. Adjusted EBITDA is
calculated by: adding to EBITDA costs associated with restructuring and
pension settlement charges; adding (or subtracting) revaluation losses
(or gains); subtracting (or adding) gains (or losses) from the sale of
buildings or investments; subtracting insurance recovery gains; and
subtracting Income attributable to the noncontrolling interest in Albany
Safran Composites (ASC). The Company believes that EBITDA and Adjusted
EBITDA provide useful information to investors because they provide an
indication of the strength and performance of the Company's ongoing
business operations, including its ability to fund discretionary
spending such as capital expenditures and strategic investments, as well
as its ability to incur and service debt. While depreciation and
amortization are operating costs under GAAP, they are noncash expenses
equal to current period allocation of costs associated with capital and
other long-lived investments made in prior periods.
While restructuring expenses, foreign currency revaluation losses or
gains, pension settlement charges, insurance-recovery gains, and gains
or losses from sales of buildings or investments have an impact on the
Company's net income, removing them from EBITDA can provide, in the
opinion of the Company, a better measure of operating performance.
EBITDA is also a calculation commonly used by investors and analysts to
evaluate and compare the periodic and future operating performance and
value of companies. EBITDA, as defined by the Company, may not be
similar to EBITDA measures of other companies. Such EBITDA measures may
not be considered measurements under GAAP, and should be considered in
addition to, but not as substitutes for, the information contained in
the Company’s statements of income.
The Company discloses certain income and expense items on a per-share
basis. The Company believes that such disclosures provide important
insight into underlying quarterly earnings and are financial performance
metrics commonly used by investors. The Company calculates the quarterly
per-share amount for items included in continuing operations by using
the estimated effective annual tax rate and the weighted average number
of shares outstanding for each period. Year-to-date earnings per-share
effects are determined by adding the amounts calculated at each
reporting period.
Table 8
|
|
|
|
Net Sales
Six Months ended
June,
|
|
|
Percent
|
|
|
Impact of Changes
in Currency
Translation
|
|
|
Percent Change
excluding Currency
|
(in thousands)
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
Rates
|
|
|
Rate Effect
|
Machine Clothing (MC)
|
|
|
$
|
309,055
|
|
|
$
|
336,897
|
|
|
-8.3
|
%
|
|
|
($21,287
|
)
|
|
|
-1.9
|
%
|
Albany Engineered Composites (AEC)
|
|
|
|
44,558
|
|
|
|
36,928
|
|
|
20.7
|
%
|
|
|
(740
|
)
|
|
|
22.7
|
%
|
Total
|
|
|
$
|
353,613
|
|
|
$
|
373,825
|
|
|
-5.4
|
%
|
|
|
($22,027
|
)
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 9
|
Six Months ended June 30, 2015
|
|
|
|
|
|
Albany
|
|
|
Corporate
|
|
|
|
|
|
|
Machine
|
|
|
Engineered
|
|
|
expenses
|
|
|
Total
|
(in thousands)
|
|
|
Clothing
|
|
|
Composites
|
|
|
and other
|
|
|
Company
|
Net income
|
|
|
$
|
69,013
|
|
|
|
($22,444
|
)
|
*
|
|
|
($36,450
|
)
|
|
|
$
|
10,119
|
|
Interest expense, net
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
5,378
|
|
|
|
|
5,378
|
|
Income tax expense
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
8,155
|
|
|
|
|
8,155
|
|
Depreciation and amortization
|
|
|
|
20,416
|
|
|
|
5,865
|
|
|
|
|
4,257
|
|
|
|
|
30,538
|
|
EBITDA
|
|
|
|
89,429
|
|
|
|
(16,579
|
)
|
|
|
|
(18,660
|
)
|
|
|
|
54,190
|
|
Restructuring expenses, net
|
|
|
|
10,212
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
10,212
|
|
Foreign currency revaluation losses/(gains)
|
|
|
|
(2,529
|
)
|
|
|
(17
|
)
|
|
|
|
(551
|
)
|
|
|
|
(3,097
|
)
|
Gain on sale of investment
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(872
|
)
|
|
|
|
(872
|
)
|
Pre-tax income attributable to noncontrolling interest in ASC
|
|
|
|
-
|
|
|
|
(90
|
)
|
|
|
|
-
|
|
|
|
|
(90
|
)
|
Adjusted EBITDA
|
|
|
$
|
97,112
|
|
|
|
($16,686
|
)
|
|
|
|
($20,083
|
)
|
|
|
$
|
60,343
|
|
*Includes $14 million BR725 charge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 10
|
Six Months ended June 30, 2014
|
|
|
|
|
|
Albany
|
|
|
Corporate
|
|
|
|
|
|
|
Machine
|
|
|
Engineered
|
|
|
expenses
|
|
|
Total
|
(in thousands)
|
|
|
Clothing
|
|
|
Composites
|
|
|
and other
|
|
|
Company
|
Net income
|
|
|
$
|
70,022
|
|
|
($7,021
|
)
|
|
|
($41,131
|
)
|
|
|
$
|
21,870
|
|
Interest expense, net
|
|
|
|
-
|
|
|
-
|
|
|
|
5,635
|
|
|
|
|
5,635
|
|
Income tax expense
|
|
|
|
-
|
|
|
-
|
|
|
|
14,673
|
|
|
|
|
14,673
|
|
Depreciation and amortization
|
|
|
|
23,009
|
|
|
4,775
|
|
|
|
4,221
|
|
|
|
|
32,005
|
|
EBITDA
|
|
|
|
93,031
|
|
|
(2,246
|
)
|
|
|
(16,602
|
)
|
|
|
|
74,183
|
|
Restructuring expenses, net
|
|
|
|
2,159
|
|
|
980
|
|
|
|
-
|
|
|
|
|
3,139
|
|
Foreign currency revaluation losses/(gains)
|
|
|
|
502
|
|
|
99
|
|
|
|
(1,901
|
)
|
|
|
|
(1,300
|
)
|
Gain on insurance recovery
|
|
|
|
-
|
|
|
-
|
|
|
|
(961
|
)
|
|
|
|
(961
|
)
|
Pre-tax income attributable to noncontrolling interest in ASC
|
|
|
|
-
|
|
|
(13
|
)
|
|
|
-
|
|
|
|
|
(13
|
)
|
Adjusted EBITDA
|
|
|
$
|
95,692
|
|
|
($1,180
|
)
|
|
|
($19,464
|
)
|
|
|
$
|
75,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 11
|
Three Months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
|
|
After-tax
|
|
|
Per Share
|
(in thousands, except per share amounts)
|
|
|
amounts
|
|
|
Tax Effect
|
|
|
Effect
|
|
|
Effect
|
Restructuring and other, net
|
|
|
$
|
1,211
|
|
|
$
|
448
|
|
|
$
|
763
|
|
|
$
|
0.02
|
Foreign currency revaluation losses
|
|
|
|
2,275
|
|
|
|
842
|
|
|
|
1,433
|
|
|
|
0.04
|
Net discrete income tax benefit
|
|
|
|
-
|
|
|
|
20
|
|
|
|
20
|
|
|
|
0.00
|
Unfavorable effect of change in income tax rate
|
|
|
|
-
|
|
|
|
736
|
|
|
|
736
|
|
|
|
0.02
|
Charge for revision in estimated contract profitability
|
|
|
|
14,000
|
|
|
|
5,180
|
|
|
|
8,820
|
|
|
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 12
|
Three Months ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
|
|
After-tax
|
|
|
Per Share
|
(in thousands, except per share amounts)
|
|
|
amounts
|
|
|
Tax Effect
|
|
|
Effect
|
|
|
Effect
|
Restructuring and other, net
|
|
|
$
|
1,957
|
|
|
$
|
714
|
|
|
$
|
1,243
|
|
|
$
|
0.04
|
Foreign currency revaluation gains
|
|
|
|
984
|
|
|
|
359
|
|
|
|
625
|
|
|
|
0.02
|
Gain on insurance recovery
|
|
|
|
961
|
|
|
|
-
|
|
|
|
961
|
|
|
|
0.03
|
Net discrete income tax charge
|
|
|
|
-
|
|
|
|
569
|
|
|
|
569
|
|
|
|
0.02
|
Unfavorable effect of change in income tax rate
|
|
|
|
-
|
|
|
|
278
|
|
|
|
278
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 13
|
Six Months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
|
|
After-tax
|
|
|
Per Share
|
(in thousands, except per share amounts)
|
|
|
amounts
|
|
|
Tax Effect
|
|
|
Effect
|
|
|
Effect
|
Restructuring and other, net
|
|
|
$
|
10,212
|
|
|
$
|
3,868
|
|
|
$
|
6,344
|
|
|
$
|
0.20
|
Foreign currency revaluation gains
|
|
|
|
3,097
|
|
|
|
1,199
|
|
|
|
1,898
|
|
|
|
0.06
|
Gain on sale of investment
|
|
|
|
872
|
|
|
|
331
|
|
|
|
541
|
|
|
|
0.02
|
Net discrete income tax charge
|
|
|
|
-
|
|
|
|
199
|
|
|
|
199
|
|
|
|
0.01
|
Charge for revision in estimated contract profitability
|
|
|
|
14,000
|
|
|
|
5,180
|
|
|
|
8,820
|
|
|
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 14
|
Six Months ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
|
|
After-tax
|
|
|
Per Share
|
(in thousands, except per share amounts)
|
|
|
amounts
|
|
|
Tax Effect
|
|
|
Effect
|
|
|
Effect
|
Restructuring and other, net
|
|
|
$
|
3,139
|
|
|
$
|
1,128
|
|
|
$
|
2,011
|
|
|
$
|
0.06
|
Foreign currency revaluation gains
|
|
|
|
1,300
|
|
|
|
469
|
|
|
|
831
|
|
|
|
0.03
|
Gain on insurance recovery
|
|
|
|
961
|
|
|
|
-
|
|
|
|
961
|
|
|
|
0.03
|
Net discrete income tax charge
|
|
|
|
-
|
|
|
|
1,673
|
|
|
|
1,673
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table contains the calculation of net income per share
attributable to the Company, excluding adjustments:
Table 15
|
|
|
|
Three Months ended
June 30,
|
|
|
Six Months ended
June 30,
|
Per share amounts (Basic)
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Net income/(loss) attributable to the Company, reported
|
|
|
|
($0.07
|
)
|
*
|
|
|
$
|
0.35
|
|
|
|
$
|
0.31
|
*
|
|
|
$
|
0.69
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
|
0.02
|
|
|
|
|
|
0.04
|
|
|
|
|
0.20
|
|
|
|
|
0.06
|
|
Discrete tax charges and effect of change in income tax rate
|
|
|
|
0.02
|
|
|
|
|
|
0.03
|
|
|
|
|
0.01
|
|
|
|
|
0.05
|
|
Foreign currency revaluation (gains)/ losses
|
|
|
|
0.04
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
(0.06
|
)
|
|
|
|
(0.03
|
)
|
Gain on insurance recovery
|
|
|
|
-
|
|
|
|
|
|
(0.03
|
)
|
|
|
|
-
|
|
|
|
|
(0.03
|
)
|
Gain on the sale of investment
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(0.02
|
)
|
|
|
|
-
|
|
Net income attributable to the Company, excluding adjustments
|
|
|
$
|
0.01
|
|
|
|
|
$
|
0.37
|
|
|
|
$
|
0.44
|
|
|
|
$
|
0.74
|
|
*Includes $0.28 per share for BR725 charge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table contains the calculation of net debt:
Table 16
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
(in thousands)
|
|
|
2015
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
Notes and loans payable
|
|
|
$
|
543
|
|
|
$
|
496
|
|
|
$
|
661
|
|
|
$
|
551
|
|
|
$
|
692
|
|
|
$
|
797
|
|
|
$
|
625
|
Current maturities of long-term debt
|
|
|
|
50,015
|
|
|
|
50,015
|
|
|
|
50,015
|
|
|
|
15
|
|
|
|
1,265
|
|
|
|
2,514
|
|
|
|
3,764
|
Long-term debt
|
|
|
|
252,088
|
|
|
|
232,092
|
|
|
|
222,096
|
|
|
|
283,100
|
|
|
|
283,104
|
|
|
|
299,108
|
|
|
|
300,111
|
Total debt
|
|
|
|
302,646
|
|
|
|
282,603
|
|
|
|
272,772
|
|
|
|
283,666
|
|
|
|
285,061
|
|
|
|
302,419
|
|
|
|
304,500
|
Cash and cash equivalents
|
|
|
|
182,474
|
|
|
|
170,838
|
|
|
|
179,802
|
|
|
|
195,461
|
|
|
|
206,836
|
|
|
|
208,379
|
|
|
|
222,666
|
Net debt
|
|
|
$
|
120,172
|
|
|
$
|
111,765
|
|
|
$
|
92,970
|
|
|
$
|
88,205
|
|
|
$
|
78,225
|
|
|
$
|
94,040
|
|
|
$
|
81,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This press 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,” “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 the Company’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 the Company’s historical experience and our present
expectations or projections.
Forward-looking statements in this release or in the webcast include,
without limitation, statements about macroeconomic and paper industry
trends and conditions during 2015 and in future years; expectations in
2015 and in future periods of sales, EBITDA, Adjusted EBITDA, income,
gross profit, gross margin 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 AEC sales growth potential; 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; the timeline for ASC’s planned facility in Mexico; 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.
|
|
|
|
|
|
|
|
|
|
ALBANY INTERNATIONAL CORP.
|
CONSOLIDATED STATEMENTS OF INCOME
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
June 30,
|
|
|
|
|
|
June 30,
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
172,289
|
|
|
|
$
|
193,518
|
|
|
|
Net sales
|
|
|
$
|
353,613
|
|
|
|
$
|
373,825
|
|
|
117,697
|
|
|
|
|
118,175
|
|
|
|
Cost of goods sold
|
|
|
|
222,337
|
|
|
|
|
223,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,592
|
|
|
|
|
75,343
|
|
|
|
Gross profit
|
|
|
|
131,276
|
|
|
|
|
150,152
|
|
|
39,932
|
|
|
|
|
40,012
|
|
|
|
Selling, general, and administrative expenses
|
|
|
|
75,165
|
|
|
|
|
79,169
|
|
|
10,411
|
|
|
|
|
14,397
|
|
|
|
Technical, product engineering, and research expenses
|
|
|
|
22,712
|
|
|
|
|
28,266
|
|
|
1,211
|
|
|
|
|
1,957
|
|
|
|
Restructuring expenses, net
|
|
|
|
10,212
|
|
|
|
|
3,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,038
|
|
|
|
|
18,977
|
|
|
|
Operating income
|
|
|
|
23,187
|
|
|
|
|
39,578
|
|
|
2,702
|
|
|
|
|
2,717
|
|
|
|
Interest expense, net
|
|
|
|
5,378
|
|
|
|
|
5,635
|
|
|
2,820
|
|
|
|
|
(2,133
|
)
|
|
|
Other (income)/expenses, net
|
|
|
|
(465
|
)
|
|
|
|
(2,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,484
|
)
|
|
|
|
18,393
|
|
|
|
Income/(loss) before income taxes
|
|
|
|
18,274
|
|
|
|
|
36,543
|
|
|
(364
|
)
|
|
|
|
7,216
|
|
|
|
Income tax expense/(benefit)
|
|
|
|
8,155
|
|
|
|
|
14,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,120
|
)
|
|
|
|
11,177
|
|
|
|
Net income/(loss)
|
|
|
|
10,119
|
|
|
|
|
21,870
|
|
|
52
|
|
|
|
|
(42
|
)
|
|
|
Net income/(loss) attributable to the noncontrolling interest
|
|
|
|
78
|
|
|
|
|
30
|
|
|
($2,172
|
)
|
|
|
$
|
11,219
|
|
|
|
Net income/(loss) attributable to the Company
|
|
|
$
|
10,041
|
|
|
|
$
|
21,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($0.07
|
)
|
|
|
$
|
0.35
|
|
|
|
Earnings/(losses) per share attributable to Company shareholders -
Basic
|
|
|
$
|
0.31
|
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($0.07
|
)
|
|
|
$
|
0.35
|
|
|
|
Earnings(losses) per share attributable to Company shareholders -
Diluted
|
|
|
$
|
0.31
|
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of the Company used in computing earnings per share:
|
|
|
|
|
31,999
|
|
|
|
|
31,832
|
|
|
|
Basic
|
|
|
|
31,941
|
|
|
|
|
31,809
|
|
|
31,999
|
|
|
|
|
31,935
|
|
|
|
Diluted
|
|
|
|
32,015
|
|
|
|
|
31,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.17
|
|
|
|
$
|
0.16
|
|
|
|
Dividends per share
|
|
|
$
|
0.33
|
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALBANY INTERNATIONAL CORP.
|
CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
182,474
|
|
|
|
$
|
179,802
|
|
Accounts receivable, net
|
|
|
|
160,997
|
|
|
|
|
158,237
|
|
Inventories
|
|
|
|
109,630
|
|
|
|
|
107,274
|
|
Deferred income taxes
|
|
|
|
6,661
|
|
|
|
|
6,743
|
|
Asset held for sale
|
|
|
|
8,326
|
|
|
|
|
9,102
|
|
Prepaid expenses and other current assets
|
|
|
|
8,739
|
|
|
|
|
8,074
|
|
Total current assets
|
|
|
|
476,827
|
|
|
|
|
469,232
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
379,139
|
|
|
|
|
386,011
|
|
Intangibles
|
|
|
|
270
|
|
|
|
|
385
|
|
Goodwill
|
|
|
|
67,489
|
|
|
|
|
71,680
|
|
Income taxes receivable and deferred
|
|
|
|
71,817
|
|
|
|
|
69,540
|
|
Other assets
|
|
|
|
27,905
|
|
|
|
|
32,456
|
|
Total assets
|
|
|
$
|
1,023,447
|
|
|
|
$
|
1,029,304
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Notes and loans payable
|
|
|
$
|
543
|
|
|
|
$
|
661
|
|
Accounts payable
|
|
|
|
32,258
|
|
|
|
|
34,787
|
|
Accrued liabilities
|
|
|
|
89,544
|
|
|
|
|
95,149
|
|
Current maturities of long-term debt
|
|
|
|
50,015
|
|
|
|
|
50,015
|
|
Income taxes payable and deferred
|
|
|
|
1,742
|
|
|
|
|
2,786
|
|
Total current liabilities
|
|
|
|
174,102
|
|
|
|
|
183,398
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
252,088
|
|
|
|
|
222,096
|
|
Other noncurrent liabilities
|
|
|
|
98,589
|
|
|
|
|
103,079
|
|
Deferred taxes and other credits
|
|
|
|
6,783
|
|
|
|
|
7,163
|
|
Total liabilities
|
|
|
|
531,562
|
|
|
|
|
515,736
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Preferred stock, par value $5.00 per share;
|
|
|
|
|
|
|
authorized 2,000,000 shares; none issued
|
|
|
|
-
|
|
|
|
|
-
|
|
Class A Common Stock, par value $.001 per share;
|
|
|
|
|
|
|
authorized 100,000,000 shares; issued 37,230,013
|
|
|
|
|
|
|
in 2015 and 37,085,489 in 2014
|
|
|
|
37
|
|
|
|
|
37
|
|
Class B Common Stock, par value $.001 per share;
|
|
|
|
|
|
|
authorized 25,000,000 shares; issued and
|
|
|
|
|
|
|
outstanding 3,235,048 in 2015 and 2014
|
|
|
|
3
|
|
|
|
|
3
|
|
Additional paid in capital
|
|
|
|
422,204
|
|
|
|
|
418,972
|
|
Retained earnings
|
|
|
|
455,597
|
|
|
|
|
456,105
|
|
Accumulated items of other comprehensive income:
|
|
|
|
|
|
|
Translation adjustments
|
|
|
|
(81,263
|
)
|
|
|
|
(55,240
|
)
|
Pension and postretirement liability adjustments
|
|
|
|
(50,056
|
)
|
|
|
|
(51,666
|
)
|
Derivative valuation adjustment
|
|
|
|
(1,024
|
)
|
|
|
|
(861
|
)
|
Treasury stock (Class A), at cost 8,455,293 shares
|
|
|
|
|
|
|
in 2015 and 8,459,498 in 2014
|
|
|
|
(257,391
|
)
|
|
|
|
(257,481
|
)
|
Total Company shareholders' equity
|
|
|
|
488,107
|
|
|
|
|
509,869
|
|
Noncontrolling interest
|
|
|
|
3,778
|
|
|
|
|
3,699
|
|
Total equity
|
|
|
|
491,885
|
|
|
|
|
513,568
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
1,023,447
|
|
|
|
$
|
1,029,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALBANY INTERNATIONAL CORP.
|
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
Six Months Ended
|
June 30,
|
|
|
|
|
|
|
|
|
June 30,
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
($2,120
|
)
|
|
|
$
|
11,177
|
|
|
|
Net income/(loss)
|
|
|
|
|
$
|
10,119
|
|
|
|
$
|
21,870
|
|
|
|
|
|
|
|
Adjustments to reconcile net income/(loss) to net cash provided by
operating activities:
|
|
|
|
|
13,373
|
|
|
|
|
14,276
|
|
|
|
Depreciation
|
|
|
|
|
|
26,897
|
|
|
|
|
28,383
|
|
|
1,811
|
|
|
|
|
1,821
|
|
|
|
Amortization
|
|
|
|
|
|
3,641
|
|
|
|
|
3,622
|
|
|
(5,920
|
)
|
|
|
|
2,946
|
|
|
|
Change in long-term liabilities, deferred taxes and other credits
|
|
|
|
(6,197
|
)
|
|
|
|
2,732
|
|
|
263
|
|
|
|
|
728
|
|
|
|
Provision for write-off of property, plant and equipment
|
|
|
|
415
|
|
|
|
|
729
|
|
|
-
|
|
|
|
|
(961
|
)
|
|
|
Gain on disposition or involuntary conversion of assets
|
|
|
|
(1,056
|
)
|
|
|
|
(961
|
)
|
|
(342
|
)
|
|
|
|
(106
|
)
|
|
|
Excess tax benefit of options exercised
|
|
|
|
|
(603
|
)
|
|
|
|
(145
|
)
|
|
419
|
|
|
|
|
405
|
|
|
|
Compensation and benefits paid or payable in Class A Common Stock
|
|
|
|
995
|
|
|
|
|
947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities that provide/(use)
cash:
|
|
|
|
|
|
|
|
4,212
|
|
|
|
|
3,333
|
|
|
|
Accounts receivable
|
|
|
|
|
|
(9,487
|
)
|
|
|
|
14,297
|
|
|
(4,061
|
)
|
|
|
|
(1,963
|
)
|
|
|
Inventories
|
|
|
|
|
|
(7,131
|
)
|
|
|
|
(10,959
|
)
|
|
1,715
|
|
|
|
|
1,762
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
(990
|
)
|
|
|
|
(386
|
)
|
|
(158
|
)
|
|
|
|
(7
|
)
|
|
|
Income taxes prepaid and receivable
|
|
|
|
|
(74
|
)
|
|
|
|
14
|
|
|
(4,853
|
)
|
|
|
|
555
|
|
|
|
Accounts payable
|
|
|
|
|
|
(1,341
|
)
|
|
|
|
(739
|
)
|
|
(933
|
)
|
|
|
|
170
|
|
|
|
Accrued liabilities
|
|
|
|
|
|
(2,520
|
)
|
|
|
|
(12,679
|
)
|
|
475
|
|
|
|
|
651
|
|
|
|
Income taxes payable
|
|
|
|
|
|
77
|
|
|
|
|
(1,059
|
)
|
|
7,062
|
|
|
|
|
(2,098
|
)
|
|
|
Other, net
|
|
|
|
|
|
|
4,607
|
|
|
|
|
(4,129
|
)
|
|
10,943
|
|
|
|
|
32,689
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
17,352
|
|
|
|
|
41,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
(18,455
|
)
|
|
|
|
(12,799
|
)
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(30,666
|
)
|
|
|
|
(27,402
|
)
|
|
(304
|
)
|
|
|
|
(21
|
)
|
|
|
Purchased software
|
|
|
|
|
|
(337
|
)
|
|
|
|
(315
|
)
|
|
-
|
|
|
|
|
961
|
|
|
|
Proceeds from sale or involuntary conversion of assets
|
|
|
|
2,797
|
|
|
|
|
961
|
|
|
(18,759
|
)
|
|
|
|
(11,859
|
)
|
|
|
Net cash used in investing activities
|
|
|
|
|
(28,206
|
)
|
|
|
|
(26,756
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
24,346
|
|
|
|
|
235
|
|
|
|
Proceeds from borrowings
|
|
|
|
|
|
39,620
|
|
|
|
|
4,670
|
|
|
(4,303
|
)
|
|
|
|
(17,593
|
)
|
|
|
Principal payments on debt
|
|
|
|
|
|
(9,746
|
)
|
|
|
|
(24,109
|
)
|
|
(1,630
|
)
|
|
|
|
-
|
|
|
|
Debt acquisition costs
|
|
|
|
|
|
(1,630
|
)
|
|
|
|
-
|
|
|
1,039
|
|
|
|
|
261
|
|
|
|
Proceeds from options exercised
|
|
|
|
|
1,724
|
|
|
|
|
387
|
|
|
342
|
|
|
|
|
106
|
|
|
|
Excess tax benefit of options exercised
|
|
|
|
|
603
|
|
|
|
|
145
|
|
|
(5,107
|
)
|
|
|
|
(4,774
|
)
|
|
|
Dividends paid
|
|
|
|
|
|
(10,205
|
)
|
|
|
|
(9,539
|
)
|
|
14,687
|
|
|
|
|
(21,765
|
)
|
|
|
Net cash provided by/(used in) financing activities
|
|
|
|
20,366
|
|
|
|
|
(28,446
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,765
|
|
|
|
|
(608
|
)
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(6,840
|
)
|
|
|
|
(2,165
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,636
|
|
|
|
|
(1,543
|
)
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
|
2,672
|
|
|
|
|
(15,830
|
)
|
|
170,838
|
|
|
|
|
208,379
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
179,802
|
|
|
|
|
222,666
|
|
$
|
182,474
|
|
|
|
$
|
206,836
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
182,474
|
|
|
|
$
|
206,836
|
|
CONTACT:
Albany International Corp.
Investors
John
Cozzolino, 518-445-2281
john.cozzolino@albint.com
or
Media
Susan
Siegel, 603-330-5866
susan.siegel@albint.com
Exhibit 99.2
Albany International
Corp. Q2 Financial Performance August 4, 2015 ©Albany International
Corp. All right reserved.
‘No
n-GAAP’ Items and
Forward-Looking Statements This presentation contains certain items,
such as net income attributable to the Company, excluding adjustments
(absolute as well as per-share), earnings before interest, taxes,
depreciation and amortization (EBITDA), adjusted EBITDA and net debt,
that could be considered ‘non-GAAP’ financial measures under SEC rules.
We think such items provide useful information to investors regarding
the Company’s operational performance. This presentation also may
contain statements, estimates, or projections that constitute
“forward-looking statements” as defined under U.S. federal securities
laws. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
the Company’s historical experience and our present expectations or
projections. We disclaim any obligation to update any information in
this presentation to reflect any changes or developments after the date
on the cover page. Certain additional disclosures regarding our use of
these ‘non-GAAP’ items and forward-looking statements are set forth in
our second-quarter earnings press release dated August 4, 2015, and in
our SEC filings, including our most recent quarterly reports and our
annual reports for the years ended December 31, 2012, 2013, and 2014.
Our use of such items in this presentation is subject to those
additional disclosures, which we urge you to read. 2
Net Sales by Segment (in
thousands) Net Sales Three Months ended June 30, 2015 2014 Percent
Change Impact of Changes in Currency Translation Rates Percent Change
excluding Currency Rate Effect Machine Clothing (MC) $150,561 $172,809
-12.9% ($9,970) -7.1% Albany Engineered Composites (AEC) 21,728 20,709
4.9% (403) 6.9% Total $172,289 $193,518 -11.0% ($10,373) -5.6% 3 (in
thousands) Net Sales Six Months ended June 30, 2015 2014 Percent Change
Impact of Changes in Currency Translation Rates Percent Change excluding
Currency Rate Effect Machine Clothing (MC) $309,055 $336,897
-8.3% ($21,287) -1.9% Albany Engineered Composites (AEC) 44,558 36,928
20.7% (740) 22.7% Total $353,613 $373,825 -5.4% ($22,027) 0.5%
Gross
Profit Margin by Quarter
Percentage of Net Sales 45.0% 42.4% 1.9% 43.0% 47.5% 45.2% 41.5% 38.9%
38.2% 38.0% 42.3% 31.7% [VALUE]* 30% 35% 40% 45% 50% 55% Q1 2014 Q2 2014
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Machine Clothing Total
Company 4 * Gross profit margin excluding impact of AEC BR725 charge
8.1% impact from BR725 charge
Earni
ngs Per Share 5 Per share
amounts (Basic) Three Months ended June 30, 2015 2014 Six Months Ended
June 30, 2015 2014 Net income/(loss) attributable to the Company, as
reported ($0.07)* $0.35 $0.31* $0.69 Adjustments: Restructuring charges,
net 0.02 0.04 0.20 0.06 Income tax adjustments 0.02 0.03 0.01 0.05
Foreign currency revaluation (gains)/losses 0.04 (0.02) (0.06) (0.03)
Gain on insurance recovery - (0.03) - (0.03) Gain on sale of investment
- - (0.02) - Net income attributable to the Company, excluding
adjustments $0.01 $0.37 $0.44 $0.74 *Includes $0.28 charge for BR725
Adj
usted EBITDA 6 Three Months
ended June 30, 2015 (in thousands) Machine Clothing Albany Engineered
Composites Corporate expenses and other Total Company Net income/(loss)
$33,323 ($18,633)* ($16,810) ($2,120) Interest expense, net - - 2,702
2,702 Income tax expense/(benefit) - - (364) (364) Depreciation and
amortization 10,212 2,869 2,103 15,184 EBITDA 43,535 (15,764) (12,369)
15,402 Restructuring and other, net 1,211 - - 1,211 Foreign currency
revaluation (gains)/losses 394 1 1,880 2,275 Gain on insurance recovery
- - - - Pretax (income)/loss attributable to non-controlling interest in
ASC - ( 6 4 ) - (64) Adjusted EBITDA $45,140 ($15,827) ($10,489) $18,824
Three Months ended June 30, 2014 Machine Clothing Albany Engineered
Composites Corporate expenses and other Total Company $33,879 ($3,545)
($19,157) $11,177 - - 2,717 2,717 - - 7,216 7,216 11,554 2,453 2,090
16,097 45,433 (1,092) (7,134) 37,207 1,297 660 - 1,957 350 61 (1,395)
(984) - - (961) (961) - 45 – 45 $47,080 ($326) ($9,490) $37,264
*Includes $14.0 million charge for BR725 Six Months ended June 30, 2015
(in thousands) Machine Clothing Albany Engineered Composites Corporate
expenses and other Total Company Adjusted EBITDA $97,112 ($16,686)*
($20,083) $60,343 Six Months ended June 30, 2014 Machine Clothing Albany
Engineered Composites Corporate expenses and other Total Company $95,692
($1,180) ($19,464) $75,048
Debt $ thousands $94,040
$78,225 $88,205 $92,970 $111,765 $120,172 $302,419 $285,061 $283,666
$272,772 $282,603 $302,646 $0 $50,000 $100,000 $150,000 $200,000
$250,000 $300,000 $350,000 March 31, 2014 June 30, 2014 September 30,
2014 December 31, 2014 March 31, 2015 June 30, 2015 Net Debt Total Debt 7
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