Fourth-quarter Financial Highlights
- Net sales were $213.0 million, an
increase of 20.0% compared to Q4 2015. Net sales increased 11.8% as
a result of the Q2 2016 acquisition in AEC (see Tables 1 and
2).
- Net income attributable to the Company
was $15.8 million ($0.49 per share), compared to $37.6 million
($1.17 per share) in Q4 2015. Income tax-related adjustments
increased earnings per share by $0.08 in 2016 and $0.93 in 2015
(see Table 16).
- Net income attributable to the Company,
excluding adjustments (a non-GAAP measure), was $0.36 per share,
compared to $0.46 in Q4 2015 (see Table 16).
- Net income attributable to the Company
in Q4 2016, both as reported and excluding adjustments, was reduced
by a pre-tax charge of $2.5 million ($0.05 per share) as a result
of a loss caused by the theft of cash from the Company’s subsidiary
in Japan and by $0.8 million ($0.01 per share) of integration costs
(see Table 12).
- Adjusted EBITDA (a non-GAAP measure)
was $38.3 million, including the loss in Japan and integration
costs, compared to $38.7 million in Q4 2015 (see Tables 7 and
8).
Albany International Corp. (NYSE:AIN) reported that Q4 2016 net
income attributable to the Company was $15.8 million, including a
net benefit of $2.5 million for income tax adjustments. Q4 2015 net
income attributable to the Company was $37.6 million, including
favorable income tax adjustments of $29.8 million.
Q4 2016 income before income taxes was $20.8 million, including
restructuring charges of $0.7 million and gains of $3.2 million
from foreign currency revaluation. Q4 2015 income before income
taxes was $11.3 million, including restructuring charges of $9.9
million and losses of $0.6 million from foreign currency
revaluation. Q4 2016 income before income taxes included a charge
of $2.5 million related to a loss caused by a theft of cash from
the Company’s subsidiary in Japan and $0.8 million of integration
costs related to the recent AEC acquisition.
As previously reported, in the second quarter of 2016, the
Company completed the acquisition of Harris Corporation’s composite
aerostructures division, which is located in Salt Lake City
(referred to below as “SLC”). Table 1 summarizes key financial
metrics of the acquired business, which is included in the AEC
segment:
Table 1
(in thousands)
Three MonthsendedDecember 31,2016
For the period April 8, 2016 toDecember
31, 2016
Net sales (GAAP) $21,021
$67,011 Gross profit (GAAP)
2,705 9,375 Selling, technical, general and
research expenses(GAAP) 3,890
10,310 Restructuring expenses(GAAP) 311
311 Operating (loss) (GAAP)
(1,496) (1,246) Depreciation and
amortization (D&A) (GAAP) 2,847
10,231 EBITDA [Operating (loss) + D&A] (Non-GAAP)
1,351 8,985 Adjusted
EBITDA [Operating (loss)+ Restructuring + D&A] (Non-GAAP)
$1.662 $9,296
Table 2 summarizes net sales and the effect of changes in
currency translation rates:
Table 2
Net Sales
Three Months ended
December 31,
Percent
Change
Impact ofChangesin CurrencyTranslation
Rates
PercentChangeexcludingCurrencyRate
Effect
(in thousands, excluding percentages)
2016
2015
Machine Clothing (MC) $144,744
$145,004 -0.2%
($968) 0.5% Albany Engineered Composites (AEC)
68,302 32,462
110.4% (201)
111.0% Total $213,046
$177,466 20.0%
($1,169) 20.7%
In comparison to Q4 2015, MC net sales were essentially flat in
every region. The increase in AEC net sales was due to the
acquisition and growth in LEAP.
Fourth-quarter gross profit increased to $77.3 million in 2016
from $71.7 million in 2015. Gross profit margin in Q4 2016 was
36.3% compared to 40.4% in Q4 2015, reflecting the change in the
business mix due to higher AEC sales. MC gross profit was $67.8
million (46.8% of net sales) in Q4 2016, compared to $68.8 million
(47.4% of net sales) in Q4 2015. AEC gross profit increased to $9.8
million in Q4 2016, compared to $3.3 million in Q4 2015, due to
higher sales.
Q4 2016 selling, technical, general, and research (STG&R)
expenses were $49.8 million, or 23.4% of net sales, including gains
of $2.0 million from the revaluation of nonfunctional-currency
assets and liabilities, and expenses of $0.8 million related to the
integration of SLC. Q4 2015 STG&R expenses were $46.9 million,
or 26.4% of net sales, including gains of $0.5 million from the
revaluation of nonfunctional-currency assets and liabilities. The
reduction in STG&R expenses as a percent of net sales in 2016
reflects the relative growth in AEC which carries lower STG&R
expenses as a percent of net sales.
The following table summarizes fourth-quarter expenses
associated with internally funded research and development by
segment:
Table 3
Research and development expenses by
segmentThree Months endedDecember 31,
(in thousands)
2016
2015
Machine Clothing $4,188 $5,487 Albany
Engineered Composites 3,672 2,495
Corporate expenses - 194 Total
$7,860 $8,176
The following table summarizes fourth-quarter operating income
by segment:
Table 4
Operating Income/(loss)Three Months
endedDecember 31,
(in thousands)
2016
2915
Machine Clothing $39,946 $30,342 Albany
Engineered Composites (1,280) (1,843)
Corporate expenses (11,836) (13,634)
Total $26,830 $14,865
Segment operating income was affected by restructuring and
currency revaluation as shown in Table 5 below:
Table 5
(in thousands)
Expenses/(gain) in Q4 2016resulting
fromRestructuring Revaluation
Expenses/(gain) in Q4 2015resulting
fromRestructuring Revaluation
Machine Clothing $150 ($2,050)
$8,282 ($542) Albany Engineered Composites
526 11 - -
Corporate expenses 47 -
1,635 - Total $723
($2,039) $9,917 ($542)
Q4 2016 Other income/expense, net, was expense of $2.1 million,
including income related to the revaluation of
nonfunctional-currency balances of $1.2 million, and a $2.5 million
charge related to a loss caused by a theft of cash from the
Company’s subsidiary in Japan. Q4 2015 Other income/expense, net,
was expense of $1.6 million, including losses related to the
revaluation of nonfunctional-currency balances of $1.1 million.
The following table summarizes currency revaluation effects on
certain financial metrics:
Table 6
Income/(loss) attributable to currency
revaluation Three Months ended December 31
(in thousands)
2016
2015
Operating income $2,039 $542 Other
income/(expense), net 1,170 (1,092)
Total $3,209 ($550)
The Company’s income tax rate based on income from continuing
operations was 35.3% for Q4 2016, compared to 31.8% for Q4 2015.
The increase in the tax rate was due to a change in the mix of
pre-tax income among the jurisdictions in which we operate.
Discrete tax items and the effect of a change in the tax rate from
the previous quarter decreased income tax expense by $2.5 million
in Q4 2016 and $29.8 million in Q4 2015. The Q4 2015 amount
included a tax benefit of $28.6 million related to the elimination
of the value of the Company’s investment in its German
subsidiary.
The following tables provide a reconciliation of operating
income and net income to EBITDA and Adjusted EBITDA:
Table 7
Three Months ended December 31,
2016(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Operating income/(loss) (GAAP) $39,946
$(1,280) ($11,836)
$26,830 Interest, taxes, other income/expense
-
- (10,844) (10,844)
Net income (GAAP) 39,946
(1,280) (22,680)
15,986 Interest expense, net - -
3,854 3,854 Income tax expense
- - 4,841 4,841
Depreciation and amortization 8,583
6,433 1,221 16,237
EBITDA
(non-GAAP) 48,529
5,153 (12,764)
40,918 Restructuring expenses, net 150
526 47 723 Foreign currency
revaluation (gains)/losses (2,050) 11
(1,170) (3,209) Pretax (income)
attributable to non-controlling interest in ASC -
(160) - (160)
Adjusted
EBITDA (non-GAAP) $46,629
$5,530 ($13,887)
$38,272
Table 8
Three Months ended December 31,
2015(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Operating income/(loss) (GAAP) $30,342
$(1,843) ($13,634)
$14,865 Interest, taxes, other income/expense
- - 22,601 22,601
Net income (GAAP) 30,342
(1,843) 8,967
37,466 Interest expense, net - -
1,935 1,935 Income tax (benefit)
- - (26,185)
(26,185) Depreciation and amortization 9,425
3,295 2,113 14,833
EBITDA
(non-GAAP) 39,767
1,452 (13,170)
28,049 Restructuring expenses, net 8,282
- 1,635 9,917 Foreign
currency revaluation (gains)/losses (542)
- 1,092 550 Pretax loss
attributable to non-controlling interest in ASC -
135 - 135
Adjusted
EBITDA (non-GAAP) $47,507
$1,587 ($10,443)
$38,651
Capital expenditures were $24.7 million in Q4 2016, compared to
$10.3 million in Q4 2015, primarily due to the ramp in AEC
programs. Depreciation and amortization was $16.2 million in Q4
2016, compared to $14.8 million in Q4 2015. As noted in Table 1,
depreciation and amortization for SLC was $2.8 million in Q4
2016.
CFO Comments
CFO and Treasurer John Cozzolino commented, “Cash decreased
about $15 million during Q4 to $182 million, as the Company used
cash to pay down debt and cover significant capital expenditures.
As a result, total debt at the end of the year was $485 million, a
decrease of $7 million compared to the end of Q3, and net debt
(total debt less cash, see Table 17) increased by about $8 million
to $303 million. At the end of Q4, the Company had utilized $418
million of its $550 million credit facility. The Company’s leverage
ratio, as defined in our primary debt agreements, was 2.30 as of
the end of the year.
“Capital expenditures in Q4 were $25 million, bringing the
full-year total to $79 million. Due to the continued ramp up of AEC
programs and the carry-over of a number of projects from 2016, we
currently estimate full-year total Company capital expenditures in
2017 to be $95 million to $105 million. Assuming no significant
change in the timing of any of our major programs, 2017 should
represent the peak in annual capital expenditures between now and
2020.
“The Company’s income tax rate based on income from continuing
operations was 35% in 2016. We expect a similar tax rate in 2017,
assuming no significant change to the Company’s repatriation
program. Cash paid for income taxes during the year was about $23
million and is expected to total $25 million to $30 million in
2017.
“During Q4, we became aware of a theft of cash from our
subsidiary in Japan by a third party. After an extensive
investigation and detailed substantive procedures to ensure the
accuracy of our financial statements, we concluded that a Q4 2016
charge of $2.5 million was necessary to reflect the impact of this
loss. While some of the loss occurred in prior periods, the
majority occurred in Q4 2016. The amount of the loss that occurred
prior to Q4 2016 was not material and, accordingly, the Company
does not expect to restate any previously issued financial
statements. We are in the process of evaluating the impact of this
loss on our internal controls assessment and the results of this
evaluation will be appropriately reflected in our Annual Report on
Form 10-K.”
CEO Comments
CEO Joseph Morone said, “In Q4 2016 both Albany businesses again
performed well, as AEC generated especially strong growth and MC
continued to generate strong profitability. Unfortunately, we had
to take a $2.5 million charge in Q4 due to a theft by a third party
in a small operation in Japan. Even so, the Company ended the
quarter and full year with sales and net income in line with our
expectations, and with AEC poised for rapidly accelerating growth
and MC for continued strong profitability in 2017 and beyond.
“Q4 2016 sales in MC were essentially flat compared to Q4 2015.
From a regional perspective, Q4 year-over-year sales were stable in
every major geographic market. From a grade perspective, Q4
year-over-year publication sales declined by another 10%, but the
decline was offset by incremental growth in the other grades. We
continue to be encouraged by new product performance and especially
by the potential of the new technology platform in the tissue,
nonwovens, pulp, building products and corrugator grades, which
together accounted for 35% of total sales in Q4 2016. For the full
year, 2016 sales dropped 4.3% primarily because of the declines in
publication grades coupled with weakness in South America.
“Q4 gross margin once again held close to 47%, due in large
measure to good plant utilization despite year-end slowdowns. As a
result, full-year profitability was once again strong, with
slightly improved gross margins, improved segment net income and
Adjusted EBITDA at the high end of our normal $180 million to $195
million range.
“Looking ahead to 2017, we expect recent market trends to
continue. Publication sales will likely continue to decline, but
now that they comprise only 25% of total sales, and as the other
grades hold steady or grow incrementally, we expect an easing of
the recent trend of downward year-over-year comparisons in MC
sales. As for profitability, after two years of favorable currency
and inflationary environments, we expect some regression toward the
mean in 2017, and as a result, we expect full-year Adjusted EBITDA
to pull back from the high end toward the middle of that $180
million to $195 million range. The primary risks to this outlook
are associated with macro-economic and geo-political
conditions.
“AEC sales grew to $68 million in Q4, compared to an average of
close to $50 million for the previous two quarters. The sequential
growth was driven primarily by the LEAP program. Sales from our
recently acquired Salt Lake City operation (SLC) were stable.
Excluding SLC, Q4 sales were $47 million compared to $32 million in
Q4 2015. For the full year, including nearly three quarters of
sales from SLC, sales were $197 million. Excluding SLC, sales for
the year were $131 million compared to $101 million in 2015.
“Q4 performance was particularly strong in the LEAP, F-35 JSF
LiftFan®, and Boeing 787 Fuselage Frames programs. More generally,
AEC remains on track for the ramp up in all of its major growth
programs. Although demand has reportedly softened in some segments
of the aerospace industry, the near- and long-term demand outlook
for AEC’s major growth programs remains robust. Meanwhile, R&D
and new business development continues to progress on each of the
three fronts discussed on our last call: incremental new sales on
existing aerospace platforms, development of opportunities on
potentially new aerospace platforms, and the continuing probe into
the automotive market.
“AEC profitability continued to improve during the fourth
quarter; segment net income/loss improved to a loss of $1.3 million
and Adjusted EBITDA grew to $5.5 million. Q4 2016 results include
costs of roughly $1 million associated with SLC integration and the
consolidation of AEC legacy programs into our Texas operation, and
a $1 million per quarter acceleration in R&D spending to
support a cross section of the growth and new business development
initiatives mentioned above. Good progress was made during the
quarter on integration, particularly in the major effort to
integrate ERP systems, which resulted in SLC going live at the
beginning of February. All business-wide functions, such as
finance, human resources, procurement, information technology and
business development are now fully integrated, and our focus is now
shifting almost exclusively to strengthening operational execution.
While much remains to be done in 2017, our experience in Q4
suggests that AEC is firmly on track toward our long-term stated
objective of 18%-20% EBITDA margins by 2020, on at least $450
million of sales.
“Turning to our short-term outlook, driven by accelerating ramps
in LEAP, Boeing 787 Fuselage Frames, and F-35 JSF airframe
components, we look for AEC sales to grow by 25% to 35% for each of
the next two years. And, driven by the effects of integration,
STG&R leverage, and learning curve effects, we expect gradually
strengthening margins through the period. The primary risk factor
for AEC will continue to be execution, especially during this
period of ramp ups across multiple programs and sites.
“In sum, apart from the theft in Japan, this was a strong
quarter and full year for both businesses, with continued strong
competitive performance and profitability in MC, accelerating
growth in AEC, and good progress on the integration of our recently
acquired SLC operation. For 2017, for MC, we look for Adjusted
EBITDA in the upper half of the normal $180 million to $195 million
range; and for AEC, rapidly accelerating sales and gradually
improving margins.”
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 22 plants in 10 countries, employs 4,400 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 non-GAAP metrics, including:
percent change in net sales excluding currency rate effects (for
each segment and the Company as a whole); EBITDA and Adjusted
EBITDA (for each segment and the Company as a whole); net debt; and
net income per share attributable to the Company, excluding
adjustments. Such items are provided because management believes
that, when reconciled from 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. EBITDA, or net income with interest,
taxes, depreciation, and amortization added back, is a common
indicator of financial performance used, among other things, to
analyze and compare core profitability between companies and
industries because it eliminates effects due to differences in
financing, asset bases and taxes. An understanding of the impact in
a particular quarter of specific restructuring costs, acquisition
expenses, currency revaluation, or other gains and losses, on net
income (absolute as well as on a per-share basis), operating income
or EBITDA can give management and investors additional insight into
core financial performance, especially when compared to quarters in
which such items had a greater or lesser effect, or no effect.
Restructuring expenses in the MC segment, while frequent in recent
years, are reflective of significant reductions in manufacturing
capacity and associated headcount in response to shifting markets,
and not of the profitability of the business going forward as
restructured. Net debt is, in the opinion of the Company, helpful
to investors wishing to understand what the Company’s debt position
would be if all available cash were applied to pay down
indebtedness. EBITDA, Adjusted EBITDA and net income per share
attributable to the Company, excluding adjustments, are performance
measures that relate to the Company’s continuing operations.
Percent changes in net sales, 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. That
amount is then compared to the U.S. dollar amount reported in the
current period. The Company calculates EBITDA by removing the
following from Net income: Interest expense net, Income tax
expense, Depreciation and amortization. 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; subtracting (or adding) Income (or loss)
attributable to the non-controlling interest in Albany Safran
Composites (ASC); and adding expenses related to the Company’s
acquisition of Harris Corporation’s composite aerostructures
division. Net income per share attributable to the Company,
excluding adjustments, is calculated by adding to (or subtracting
from) net income attributable to the Company per share, on an
after-tax basis: restructuring charges; discrete tax charges (or
gains) and the effect of changes in the income tax rate; foreign
currency revaluation losses (or gains); acquisition expenses; and
losses (or gains) from the sale of investments.
EBITDA, Adjusted EBITDA, and net income per share attributable
to the Company, excluding adjustments, as defined by the Company,
may not be similar to EBITDA measures of other companies. Such
measures are not 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 income tax rate
based on income from continuing operations 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 9
Net SalesYear endedDecember 31,
PercentChange
Impact ofChangesin
CurrencyTranslationRates
PercentChange
excludingCurrencyRate Effect
(in thousands, except percentages)
2016
2015
Machine Clothing
$582,190 $608,581 -4.3%
($2,840) -3.9% Albany Engineered Composites
197,649 101,287 95.1%
(139) 95.3% Total
$779,839 $709,868 9.9%
($2,979) 10.3%
Table 10
Year ended December 31, 2016(in
thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Operating income/(loss) (GAAP) $152,529
($15,363) ($45,390)
$91,776 Interest, taxes, other income/expense
- - (38,964)
(38,964)
Net income (GAAP)
152,529 (15,363)
(84,354) 52,812 Interest expense, net
- - 13,464
13,464 Income tax expense - -
25,454 25,454 Depreciation and amortization
36,428 24,211 6,822
67,461
EBITDA (non-GAAP)
188,957 8,848
(38,614) 159,191 Restructuring
expenses, net 6,069 2,314
(7) 8,376 Foreign currency revaluation losses/(gains)
(404) 16 (3,525)
(3,913) Acquisition expenses -
5,367 - 5,367 Pre-tax income
attributable to non-controlling interest in ASC -
(125) - (125)
Adjusted
EBITDA (non-GAAP) $194,622
$16,420 ($42,146)
$168,896
Table 11
Year ended December 31, 2015(in
thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Operating income/(loss) (GAAP) $141,311
($28,478)* ($48,938)
$63,895 Interest, taxes, other income/expense
- - (6,630)
(6,630)
Net income (GAAP) 141,311
(28,478) (55,568)
57,265 Interest expense, net -
- 9,984 9,984 Income tax
(benefit) - - (5,787)
(5,787) Depreciation and amortization
39,503 12,140 8,471
60,114
EBITDA (non-GAAP) 180,814
(16,338) (42,900)
121,576 Restructuring expenses, net 22,211
- 1,635 23,846 Foreign
currency revaluation losses/(gains) (5,075)
(17) 1,498 (3,594) Gain on sale
of investment - - (872)
(872) Pre-tax loss attributable to non-controlling
interest in ASC - 20 -
20
Adjusted EBITDA (non-GAAP)
$197,950 ($16,335)
($40,639) $140,976
*includes $14 million BR725 charge
Table 12
Three Months ended December 31,
2016(in thousands, except per share amounts)
Pre-taxamounts
Tax Effect
After-tax Effect
Per ShareEffect
Restructuring expenses, net $723 $255
$468 $0.01 Foreign currency revaluation
gains 3,209 1,133 2,076
0.06 Expenses related to integration of acquired
business 762 290 472
0.01 Loss due to theft 2,506
877 1,629 0.05 Favorable effect
of change in income tax rate - 1,278
1,278 0.04 Net discrete income tax
benefit - 1,243 1,243
0.04
Table 13
Three Months ended December 31,
2015(in thousands, except per share amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per Share Effect Restructuring expenses, net
$9,917 $3,154 $6,763
$0.21 Foreign currency revaluation losses 550
175 375 0.01 Favorable
effect of change in income tax rate -
2,489 2,489 0.08 Net discrete income
tax benefit - 27,287
27,287 0.85
Table 14
Year ended December 31, 2016(in
thousands, except per share amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per Share Effect Restructuring expenses, net
$8,376 $3,220 $5,156
$0.16 Foreign currency revaluation gains 3,913
1,389 2,524 0.07
Acquisition expenses 5,367 1,933
3,434 0.11 Loss due to theft
2,506 877 1,629 0.05 Net
discrete income tax benefit - 2,175
2,175 0.07
Table 15
Year ended December 31, 2015(in
thousands, except per share amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per ShareEffect
Restructuring expenses, net $23,846
$8,434 $15,412 $0.48 Foreign currency
revaluation gains 3,594 1,422
2,172 0.07 Gain on sale of investment
872 331 541 0.02
Net discrete income tax benefit -
22,174 22,174 0.69 Charge for revision
in estimated contract profitability 14,000
5,180 8,820 0.28
The following table contains the calculation of net income per
share attributable to the Company, excluding adjustments:
Table 16
Three Months ended
December 31,
Years ended
December 31,
Per share amounts (Basic)
2016
2015
2016
2015
Net income attributable to the Company, reported (GAAP)
$0.49 $1.17 $1.64
$1.79* Adjustments:
Restructuring expenses, net 0.01
0.21 0.16 0.48 Discrete
tax adjustments and effect of change in income tax rate
(0.08) (0.93) (0.07)
(0.69) Foreign currency revaluation (gains)/ losses
(0.06) 0.01 (0.07)
(0.07) Acquisition expenses - -
0.11 - Gain on the sale of investment
- - - (0.02) Net
income attributable to the Company, excluding adjustments
(non-GAAP) $0.36 $0.46
$1.77 $1.49
*includes $0.28 per share for BR725
charge
The following table contains the calculation of net debt:
Table 17
(in thousands)
December31, 2016
September30, 2016
June 30,2016
March 31,2016
December 31,2015
Notes and loans payable $312 $343
$531 $590 $587 Current
maturities of long-term debt 51,666
1,462 566 16 16 Long-term
debt 432,918 490,003
485,215 255,076 265,080
Total
debt 484,896 491,808
486,312 255,682
265,683 Cash and cash equivalents
181,742 196,170 176,025
169,615 185,113
Net debt
$303,154 $295,638
$310,287 $86,067
$80,570
The following table contains the reconciliation of MC 2017
projected Adjusted EBITDA to MC 2017 projected net income:
Table 18
Machine Clothing Full Year 2017
Outlook(in millions)
Estimated range for full year
Net Income (GAAP) $148-$157
Depreciation and amortization (32-38)
EBITDA (non-GAAP) $180-$195 Less
Restructuring expenses net
* Less
Foreign currency revaluation losses *
Adjusted EBITDA (non-GAAP)
$180-$195
* Due to the uncertainty of these items,
management is currently unable to project restructuring expenses
and foreign currency revaluation gains/losses for the remainder of
the year.
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,” “look for,” 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,
geopolitical and paper-industry trends and conditions during 2016
and in future years; expectations in 2017 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,
including the acquired composite aerostructures business, 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
sales 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.
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) (unaudited)
Three Months Ended Years Ended December 31, December 31,
2016 2015 2016 2015 $213,046 $177,466 Net sales
$779,839 $709,868 135,714 105,800 Cost of goods sold 479,271
431,182 77,332 71,666 Gross profit 300,568 278,686
39,115 35,518 Selling, general, and administrative expenses 160,112
146,192 10,664 11,366 Technical, product engineering, and research
expenses 40,304 44,753 723 9,917 Restructuring expenses, net
8,376 23,846 26,830 14,865 Operating income 91,776
63,895 3,854 1,935 Interest expense, net 13,464 9,984 2,149 1,649
Other expense, net 46 2,433 20,827 11,281
Income before income taxes 78,266 51,478 4,841 (26,185 ) Income tax
expense/(benefit) 25,454 (5,787 ) 15,986 37,466 Net income
52,812 57,265 190 (114 ) Net income/(loss) attributable to the
noncontrolling interest 79 (14 ) $15,796 $37,580 Net income
attributable to the Company $52,733 $57,279 $0.49
$1.17 Earnings per share attributable to Company shareholders -
Basic $1.64 $1.79 $0.49 $1.17 Earnings per share
attributable to Company shareholders - Diluted $1.64 $1.79
Shares of the Company used in computing earnings per share: 32,107
32,016 Basic 32,086 31,978 32,145 32,059 Diluted 32,125
32,088 $0.17 $0.17 Dividends per share, Class A and Class B
$0.68 $0.67 ALBANY
INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEETS (in thousands,
except share data) (unaudited)
December 31,
December 31,
2016 2015 ASSETS Cash and cash equivalents $ 181,742 $ 185,113
Accounts receivable, net 171,193 146,383 Inventories 133,906
106,406 Income taxes prepaid or receivable 5,213 2,927 Asset held
for sale - 4,988 Prepaid expenses and other current assets
9,251 6,243 Total current assets 501,305
452,060 Property, plant and equipment, net 422,564 357,470
Intangibles 66,454 154 Goodwill 160,375 66,373 Income taxes
receivable and deferred 68,865 108,945 Contract receivables 14,045
- Other assets 29,825 24,560 Total
assets $ 1,263,433 $ 1,009,562 LIABILITIES AND
SHAREHOLDERS' EQUITY Notes and loans payable $ 312 $ 587 Accounts
payable 43,305 26,753 Accrued liabilities 95,195 91,785 Current
maturities of long-term debt 51,666 16 Income taxes payable
9,531 7,090 Total current liabilities 200,009
126,231 Long-term debt 432,918 265,080 Other noncurrent
liabilities 106,827 101,544 Deferred taxes and other credits
12,389 14,154 Total liabilities 752,143
507,009 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 37,319,266 in 2016 and
37,238,913 in 2015 37 37 Class B Common Stock, par value $.001 per
share; authorized 25,000,000 shares; issued and outstanding
3,233,998 in 2016 and 3,235,048 in 2015 3 3 Additional paid in
capital 425,953 423,108 Retained earnings 522,855 491,950
Accumulated items of other comprehensive income: Translation
adjustments (133,298 ) (108,655 ) Pension and postretirement
liability adjustments (51,719 ) (48,725 ) Derivative valuation
adjustment 828 (1,464 ) Treasury stock (Class A), at cost 8,443,444
shares in 2016 and 8,455,293 shares in 2015 (257,136 )
(257,391 ) Total Company shareholders' equity 507,523
498,863 Noncontrolling interest 3,767 3,690
Total equity 511,290 502,553
Total liabilities and shareholders' equity $ 1,263,433 $
1,009,562
ALBANY INTERNATIONAL CORP. CONSOLIDATED
STATEMENTS OF CASH FLOW (in thousands) (unaudited)
Three Months Ended Years ended December 31, December 31, 2016 2015
2016 2015 OPERATING ACTIVITIES $15,986 $37,466 Net income $52,812
$57,265 Adjustments to reconcile net income to net cash provided by
operating activities: 13,370 13,124 Depreciation 58,106 52,974
2,867 1,709 Amortization 9,355 7,140 (222 ) 3,891 Change in other
noncurrent liabilities (6,504 ) 2,159 6,663 (32,186 ) Change in
deferred taxes and other liabilities 5,889 (29,517 ) 1,369 608
Provision for write-off of property, plant and equipment 2,778 867
211 - Non-cash interest expense 564 - - - Gain on disposition of
assets - (1,056 ) (34 ) (21 ) Excess tax benefit of options
exercised (150 ) (624 ) 551 422 Compensation and benefits paid or
payable in Class A Common Stock 2,433 1,707 51 103 Write-off of
pension liability due to settlement 51 103 - (13 ) Fair value
adjustment on available-for-sale assets - 3,212 Changes in
operating assets and liabilities that provide/(use) cash, net of
impact of business acquisition: (6,205 ) 3,983 Accounts receivable
(12,697 ) (404 ) 366 2,480 Inventories (12,520 ) (8,277 ) 707 2,110
Prepaid expenses and other current assets (2,595 ) 1,253 (3,943 )
(2,564 ) Income taxes prepaid and receivable (2,206 ) (3,156 )
3,652 (1,534 ) Accounts payable 2,108 (6,001 ) 5,048 1,220 Accrued
liabilities 1,312 2,081 (2,601 ) 5,085 Income taxes payable 1,398
9,072 (14,045 ) - Contract receivables (14,045 ) - 3,900 809
Other, net (6,571 ) 7,139 27,691 36,692
Net cash provided by operating activities 79,518 95,937
INVESTING ACTIVITIES - - Purchase of business, net of
cash acquired (187,000 ) - (21,215 ) (8,933 ) Purchases of
property, plant and equipment (71,244 ) (48,622 ) (986 ) (1,384 )
Purchased software (2,248 ) (1,973 ) 517 - Proceeds
from sale or involuntary conversion of assets 6,939 2,797
(21,684 ) (10,317 ) Net cash used in investing activities
(253,553 ) (47,798 ) FINANCING ACTIVITIES 3,112 50,308
Proceeds from borrowings 235,907 95,126 (10,661 ) (55,115 )
Principal payments on debt (34,356 ) (102,215 ) - (2 ) Debt
acquisition costs (1,771 ) (1,673 ) - - Swap termination payment
(5,175 ) - 63 98 Proceeds from options exercised 517 1,897 34 21
Excess tax benefit of options exercised 150 624 (5,458 ) (5,442 )
Dividends paid (21,812 ) (21,088 ) (12,910 ) (10,132 ) Net cash
provided by/(used in) financing activities 173,460 (27,329 )
(7,525 ) (2,910 ) Effect of exchange rate changes on cash
and cash equivalents (2,796 ) (15,499 ) (14,428 ) 13,333
(Decrease)/increase in cash and cash equivalents (3,371 ) 5,311
196,170 171,780 Cash and cash equivalents at
beginning of period 185,113 179,802 $181,742
$185,113 Cash and cash equivalents at end of period $181,742
$185,113
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170208006201/en/
Albany International Corp.InvestorsJohn Cozzolino,
518-445-2281john.cozzolino@albint.comorMediaHeather Kralik,
801-505-7001heather.kralik@albint.com
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