First-quarter Financial Highlights
- Net sales were $199.3 million, an
increase of 15.6% compared to 2016. Net sales increased 11.7% as a
result of the Q2 2016 acquisition in AEC (see Tables 1 and 2).
- Net income attributable to the Company
was $10.8 million ($0.34 per share), compared to $13.5 million
($0.42 per share) in Q1 2016.
- Net income attributable to the Company,
excluding adjustments (a non-GAAP measure), was $0.46 per share in
both Q1 2017 and Q1 2016 (see Table 11).
- Adjusted EBITDA (a non-GAAP measure)
was $43.5 million compared to $41.3 million in Q1 2016 (see Tables
7 and 8).
Albany International Corp. (NYSE:AIN) reported that Q1 2017 net
income attributable to the Company was $10.8 million, including a
net charge of $0.8 million for income tax adjustments. Q1 2016 net
income attributable to the Company was $13.5 million, including
favorable income tax adjustments of $1.0 million.
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Q1 2017 income before income taxes was $17.5 million, including
restructuring charges of $2.7 million, and losses from foreign
currency revaluation of $1.9 million. Q1 2017 income before income
taxes also includes $0.6 million of professional fees related to
the integration of the Q2 2016 acquisition of Harris Corporation’s
composite aerostructures division (referred to below as “SLC”). Q1
2016 income before income taxes was $20.4 million, including
restructuring charges of $0.7 million, losses of $1.4 million from
foreign currency revaluation, and $1.6 million of expenses related
to the acquisition.
Table 1 summarizes key financial metrics of SLC, which is
included in the AEC segment:
Table 1
(in thousands)
Three Months endedMarch 31, 2017
Net sales (GAAP) $20,200 Gross profit (GAAP)
2,245 Selling, technical, general and research
expenses(GAAP) 3,172 Restructuring expenses(GAAP)
1,699 Operating (loss) (GAAP) (2,626)
Depreciation and amortization (D&A) (GAAP) 3,850
EBITDA [Operating (loss) + D&A] (Non-GAAP) 1,224
Adjusted EBITDA [Operating (loss)+ Restructuring + D&A]
(Non-GAAP) $2,923
Table 2 summarizes net sales and the effect of changes in
currency translation rates:
Table 2
Net SalesThree Months endedMarch 31,
PercentChange
Impact ofChangesin CurrencyTranslation
Rates
PercentChangeexcludingCurrencyRate
Effect
(in thousands, excluding percentages)
2017
2016
Machine Clothing (MC)
$142,827 $145,264 -1.7%
$(2,122) -0.2% Albany Engineered Composites
(AEC) 56,450 27,067 108.6%
(263) 109.5% Total
$199,277 $172,331 15.6% $(2,385)
17.0%
In comparison to Q1 2016, MC net sales increased in tissue and
packaging grades but that increase was offset by declines in the
publication grades. The increase in AEC net sales was primarily due
to the Q2 2016 acquisition and growth in LEAP.
First-quarter gross profit increased to $75.9 million in 2017
from $72.5 million in 2016. Gross profit margin in Q1 2017 was
38.1% compared to 42.1% in Q1 2016, reflecting the change in the
business mix due to higher AEC sales. MC gross profit was $69.2
million (48.5% of net sales) in Q1 2017, compared to $69.6 million
(47.9% of net sales) in Q1 2016. AEC gross profit increased to $6.8
million (12.1% of net sales) in Q1 2017, compared to $3.1 million
(11.5% of net sales) in Q1 2016.
Q1 2017 selling, technical, general, and research (STG&R)
expenses were $51.2 million, or 25.7% of net sales, including
losses of $1.8 million from the revaluation of
nonfunctional-currency assets and liabilities, and $0.6 million of
professional fees related to the integration of SLC. Q1 2016
STG&R expenses were $49.6 million, or 28.8% of net sales,
including losses of $1.9 million from the revaluation of
nonfunctional-currency assets and liabilities, and $1.6 million of
expenses related to the Q2 2016 acquisition. The reduction in
STG&R expenses as a percentage of net sales in 2017 reflects
the relative growth of AEC which carries lower STG&R expenses
as a percentage of net sales.
The following table summarizes first-quarter expenses associated
with internally funded research and development by segment:
Table 3
Research and developmentexpenses by
segmentThree Months endedMarch 31,
(in thousands)
2017
2016
Machine Clothing $4,519 $4,337 Albany Engineered
Composites 3,076 2,681 Total $7,595
$7,018
The following table summarizes first-quarter operating income by
segment:
Table 4
Operating Income/(loss)Three Months
endedMarch 31,
(in thousands)
2017
2016
Machine Clothing $38,261 $37,139 Albany
Engineered Composites (5,114) (3,706)
Corporate expenses (11,091) (11,164)
Total $22,056 $22,269
AEC incurred restructuring charges of $2.6 million in the first
quarter of 2017, principally related to a reduction in personnel in
SLC. Table 5 presents the effect on operating income resulting from
restructuring, currency revaluation, and acquisition expenses:
Table 5
Expenses in Q1 2017resulting from
Expenses/(gain) in Q1 2016resulting
from
(in thousands)
Restructuring
Revaluation
Restructuring
Revaluation
Acquisitionexpenses
Machine Clothing $110 $1,663
$698 $1,890 $ - Albany
Engineered Composites 2,571 98
- 5 1,596 Corporate
expenses - 1 (19)
2 - Total $2,681
$1,762 $679 $1,897
$1,596
Q1 2017 Other income/expense, net, was expense of $0.2 million,
including losses related to the revaluation of
nonfunctional-currency balances of $0.1 million. Q1 2016 Other
income/expense, net, was income of $0.3 million, including income
related to the revaluation of nonfunctional-currency balances of
$0.5 million.
The following table summarizes currency revaluation effects on
certain financial metrics:
Table 6
Income/(loss) attributableto currency
revaluationThree Months ended March 31,
(in thousands)
2017
2016
Operating income $(1,762) $(1,897) Other
income/(expense), net (101) 479 Total
$(1,863) $(1,418)
Q1 2017 Interest expense, net, was $4.3 million, compared to
$2.2 million in Q1 2016. The increase was due to higher debt as a
result of the acquisition of SLC in Q2 2016.
The Company’s income tax rate based on income from continuing
operations was 32.6% for Q1 2017, compared to 39.7% for Q1 2016.
The decrease in the rate was due to a shift in the mix of pretax
income in the jurisdictions in which we operate. Discrete tax items
increased income tax expense by $0.8 million in Q1 2017, and
decreased income tax expense by $1.0 million in Q1 2016.
The following tables provide a reconciliation of operating
income and net income to EBITDA and Adjusted EBITDA:
Table 7
Three Months ended March 31,
2017(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Operating income/(loss) (GAAP)
$38,261 $(5,114)
$(11,091) $22,056 Interest, taxes,
other income/expense - -
(11,082) (11,082)
Net income (GAAP)
38,261 (5,114)
(22,173) 10,974 Interest
expense, net - -
4,328 4,328 Income tax expense -
- 6,550 6,550
Depreciation and amortization 8,287
7,804 1,202 17,293
EBITDA
(non-GAAP) 46,548
2,690 (10,093)
39,145 Restructuring expenses, net 110
2,571 - 2,681 Foreign
currency revaluation losses 1,663
98 102 1,863 Pretax (income)
attributable to non-controlling interest in ASC
- (171) - (171)
Adjusted EBITDA (non-GAAP)
$48,321 $5,188
$(9,991) $43,518
Table 8
Three Months ended March 31,
2016(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Operating income/(loss) (GAAP)
$37,139 $(3,706)
$(11,164) $22,269 Interest, taxes,
other income/expense - -
(8,953) (8,953)
Net income (GAAP)
37,139 (3,706)
(20,117) 13,316 Interest
expense, net - -
2,238 2,238 Income tax expense -
- 7,043 7,043
Depreciation and amortization 9,318
3,395 2,107 14,820
EBITDA
(non-GAAP) 46,457
(311) (8,729)
37,417 Restructuring expenses, net 698
- (19) 679 Foreign
currency revaluation (gains)/losses 1,890
5 (477) 1,418 Acquisition
expenses - 1,596 -
1,596 Pretax loss attributable to non-controlling
interest in ASC - 187
- 187
Adjusted EBITDA (non-GAAP)
$49,045 $1,477
$(9,225) $41,297
Payments for capital expenditures increased to $25.1 million in
Q1 2017, compared to $8.1 million in Q1 2016, primarily due to the
ramp in AEC programs. Depreciation and amortization was $17.3
million in Q1 2017, compared to $14.8 million in Q1 2016. As noted
in Table 1, depreciation and amortization for SLC was $3.9 million
in Q1 2017.
CFO Comments
CFO and Treasurer John Cozzolino commented, “As is typical for
the first quarter, cash flow was negatively impacted by incentive
compensation payments, seasonal increases in accounts receivable
and inventory, and high first-quarter income tax payments. In Q1
2017, these typical cash flow effects were compounded by sharp
increases in receivables, inventory, and capital expenditures
associated with multiple program ramps in AEC. For the total
Company, the net effect of higher receivables and inventory,
combined with reductions in accrued liabilities, was a use of cash
of approximately $31 million during the quarter. Payments for
capital expenditures in Q1 were about $25 million and we continue
to estimate full-year spending in 2017 to be $95 million to $105
million. At this rate of spending for capital expenditures, we
expect additional quarterly increases in net debt for the remainder
of the year, but at a considerably lower level than in Q1.
“Total debt decreased a little over $4 million to $480 million
as of the end of the quarter, while cash balances decreased about
$38 million to a total of $143 million. The combined effect of
those two changes resulted in a $34 million increase to net debt
(total debt less cash, see Table 14) to a balance of $337 million
as of the end of the quarter. The Company’s leverage ratio, as
defined in our primary debt agreements, was 2.30 at both the end of
Q1 2017 and Q4 2016, well below our limit of 3.50.
“The Company’s income tax rate based on income from continuing
operations was about 33% in Q1 2017, compared to 35% for the
full-year 2016. We continue to expect the full-year tax rate for
2017 to be similar to the rate in 2016. Cash paid for income taxes
was about $9 million in Q1, and we estimate cash taxes in 2017 to
range from $25 million to $30 million.”
CEO Comments
CEO Joseph Morone said, “In Q1 2017, both businesses continued
to perform well and in line with our short- and long-term
expectations and objectives. MC once again generated strong income
and strong new product performance, while AEC once again generated
strong growth and executed well on each of its key programs, while
continuing to position itself for improved profitability and new
business.
“In MC, sales were essentially flat, both sequentially and in
comparison to Q1 2016. There were no significant deviations from
recent market trends during the quarter. Once again, a significant
decline in publication grade sales was offset by incremental gains
in the other grades, most notably during Q1 in tissue. By the end
of Q1, the publication grades accounted for 23% of total sales,
compared to 25% in Q1 2016, 27% in Q1 2015, and 30% in Q1 2014. Our
new product performance continued to be strong across all product
lines, especially in tissue. Competitive pricing pressure remained
intense, particularly in Europe and Asia, although the topline
impact was offset by volume growth in Asia.
“Profitability was once again strong in Q1 2017 due to
incremental productivity gains and good plant utilization. Gross
margin, segment net income and Adjusted EBITDA were in line with
the excellent performance levels of Q1 2016.
“As for our outlook in MC, the market appears stable and we
enter Q2 with a good order backlog. Although we have been
anticipating and are seeing some inflationary pressures, MC remains
on track toward its full-year objective of annual Adjusted EBITDA
in the middle of that $180 million to $195 million range that we
have discussed on numerous occasions. (See Table 15 for
reconciliation to GAAP net income for this segment.)
“AEC continued on its path of accelerating growth. Q1 sales grew
to $56 million, from $27 million in Q1 2016, the last quarter
before we acquired SLC. Excluding SLC, sales grew by $9 million or
34%. The quarter began slowly for AEC, but revenue accelerated as
the quarter progressed, and the business remains on track toward
its full-year target of 25% to 35% revenue growth over 2016.
“The growth was led once again by LEAP. AEC continues to execute
on the very aggressive LEAP ramp schedule, while the LEAP engine
program continues to perform well in the marketplace. The order
backlog for LEAP exceeded 12,000 engines at the end of Q1 with no
signs of market softening, CFM delivered its 100th LEAP engine
during the quarter, and the LEAP engines in service are performing
well and meeting their performance targets.
“Q1 sales in SLC were flat compared to Q4, but as with the rest
of AEC, we expect a sharp increase in SLC sales for the balance of
2017. It has been a full year since our acquisition of SLC, and our
experience to date – particularly our experience with SLC’s
customers – validates our view of the growth potential that
motivated the acquisition. In SLC’s key growth and legacy programs,
the near- and long-term demand outlook is strong and SLC is meeting
customer expectations. Of particular note since our last earnings
call are two recent developments in the CH-53K program. SLC was
informed during Q1 that it was selected by Sikorsky as its supplier
of the year for the CH-53K. And in early April, the CH-53K program
was officially approved by the Department of Defense to enter into
low-rate initial production. At full-rate production next decade
and with no additional content, this program has the potential to
generate as much as $150 million per year of revenue.
“While AEC segment net income declined compared to Q1 2016, due
to increases in depreciation expense and restructuring, Adjusted
EBITDA improved significantly, both in absolute terms and as a
percent of sales. Profitability was held back by a still
substantial effort to complete the integration of SLC into AEC. The
AEC ERP system successfully went live in SLC in February, but the
usual inefficiencies associated with learning a new system and
modifying work processes will continue to be a drag on productivity
well into the second half of the year. Shortly after the end of the
quarter, SLC announced a significant restructuring, which coupled
with continuous improvement in operations, should result in gradual
improvements to profitability by the end of this year.
“Q1 was also marked by a significant increase in new business
development activity in AEC. As previously mentioned, AEC is
pursuing new business opportunities on three fronts: existing
aerospace platforms, new aerospace platforms, and diversification
outside of aerospace. While there were promising developments
during Q1 on all three fronts, the most notable were on existing
aerospace platforms. AEC received a significant number of formal
requests-for-proposal as well as more preliminary expressions of
interest from a broad cross-section of OEMs, largely prompted by
AEC’s execution and emphasis on lean manufacturing in its existing
programs with those OEMs.
“As for our outlook for AEC, we continue to expect full-year
revenue to be 25% to 35% higher than full-year 2016, and Adjusted
EBITDA as a percentage of sales to slowly improve. For the longer
term, the intensity of new business development activity in Q1
suggests that there is more upside than downside risk to our
current estimate of $450 million to $500 million revenue potential
by 2020, as well as potential for substantial growth beyond
2020.
“In sum, this was a good quarter for both businesses, as MC
generated strong Adjusted EBITDA and AEC strong growth. Both
businesses remain firmly on track toward their short- and long-
term goals. For 2017, MC is on track toward full-year Adjusted
EBITDA in the middle of our expected range, and AEC is on track for
full-year revenue growth between 25% and 35% coupled with gradually
improving Adjusted EBITDA as a percentage of sales.”
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, represented in
dollars or as a percentage of net sales); 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. Adjusted EBITDA may also be presented as a percentage of
net sales by dividing it by net sales. 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
Three Months ended March 31,
2017(in thousands, except per share amounts)
Pretaxamounts
Tax Effect After-tax Effect
Per ShareEffect
Restructuring expenses, net $2,681
$979 $1,702 $0.05 Foreign
currency revaluation losses 1,863
680 1,183 0.04 Expenses related
to integration of acquired business 589
224 365 0.01 Net discrete income
tax charge - 831
831 0.03
Table 10
Three Months ended March 31,
2016(in thousands, except per share amounts)
Pretaxamounts
Tax Effect
After-taxEffect
Per Share Effect
Restructuring expenses, net $679
$270 $409 $0.01 Foreign currency
revaluation losses 1,418 563
855 0.03 Acquisition expenses
1,596 575 1,021
0.03 Net discrete income tax benefit -
1,033 1,033 0.03
The following table contains the calculation of net income per
share attributable to the Company, excluding adjustments:
Table 11
Three Months endedMarch 31,
Per share amounts (Basic)
2017
2016
Net income attributable to the Company, reported (GAAP)
$0.34 $0.42 Adjustments:
Restructuring expenses, net 0.05 0.01
Discrete tax adjustments 0.03 (0.03) Foreign
currency revaluation losses 0.04 0.03
Acquisition expenses - 0.03 Net income
attributable to the Company, excluding adjustments (non-GAAP)
$0.46 $0.46
Table 12
AEC Adjusted EBITDA as a percentage of
salesThree Months endedMarch 31,
(in thousands)
2017
2016
Adjusted EBITDA (see Tables 6 and 7) (non-GAAP)
$5,188
$1,477
Net sales (see Table 1) (GAAP) $56,450 $27,067
Adjusted EBITDA as a percentage of net sales 9.2%
5.5%
Table 13
Three Months ended December 31,
2016(in thousands)
AEC
Net income/(loss) (GAAP)
$(1,280) Interest expense, net - Income
tax expense - Depreciation and amortization
6,433
EBITDA (non-GAAP)
5,153 Restructuring expenses, net
526 Foreign currency revaluation (gains)/losses
11 Pretax (income) attributable to non-controlling
interest in ASC (160)
Adjusted EBITDA
(non-GAAP) $5,530 Net Sales (GAAP)
$68,302 Adjusted EBITDA as a percentage of net
sales 8.1%
The following table contains the calculation of net debt:
Table 14
(in thousands)
March 31,2017
December 31,2016
September30, 2016
June 30,2016
March 31, 2016
Notes and loans payable $274 $312
$343 $531 $590 Current
maturities of long-term debt 51,699
51,666 1,462 566 16
Long-term debt 428,477 432,918
490,003 485,215 255,076
Total
debt 480,450 484,896
491,808 486,312
255,682 Cash and cash equivalents
143,333 181,742 196,170
176,025 169,615
Net debt
$337,117 $303,154
$295,638 $310,287
$86,067
The following table contains the reconciliation of MC 2017
projected Adjusted EBITDA to MC 2017 projected net income:
Table 15
Machine Clothing Full-Year 2017 Outlook
(in millions)
Actual, threemonthsendedMarch 31,2017
Results forlast threequarters ofyear to
meetlow end ofrange
Results forlast threequarters ofyear to
meethigh end ofrange
Estimatedrange for full-year
Net income (non-GAAP) $38
$108 $117 $146 -
$155 Depreciation and amortization 8
24 30 (32-38)
EBITDA
(non-GAAP) $46 $132
$147 $178 - $193
Restructuring expenses - *
* * Foreign currency revaluation losses
2 * * *
Adjusted EBITDA (non-GAAP) $48
$132 $147 $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 (both in dollars and as a percentage
of net sales), income, gross profit, gross margin, cash flows 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 amounts) (unaudited)
Three Months EndedMarch 31,
2017 2016 Net sales $ 199,277 $ 172,331 Cost of goods sold
123,372 99,830 Gross profit 75,905
72,501 Selling, general, and administrative expenses 40,906 39,421
Technical and research expenses 10,262 10,132 Restructuring
expenses, net 2,681 679 Operating
income 22,056 22,269 Interest expense, net 4,328 2,238 Other
expense/(income), net 204 (328 ) Income before
income taxes 17,524 20,359 Income tax expense 6,550
7,043 Net income 10,974 13,316 Net income/(loss)
attributable to the noncontrolling interest 135 (185
) Net income attributable to the Company $ 10,839 $ 13,501
Earnings per share attributable to Company shareholders -
Basic $ 0.34 $ 0.42 Earnings per share attributable to
Company shareholders - Diluted $ 0.34 $ 0.42 Shares of the
Company used in computing earnings per share: Basic 32,128 32,041
Diluted 32,164 32,081 Dividends declared per share,
Class A and Class B $ 0.17 $ 0.17 ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
(unaudited) March 31, December 31, 2017
2016 ASSETS Cash and cash equivalents $ 143,333 $ 181,742 Accounts
receivable, net 174,339 171,193 Inventories 150,481 133,906 Income
taxes prepaid and receivable 5,224 5,213 Prepaid expenses and other
current assets 11,245 9,251 Total
current assets 484,622 501,305 Property, plant and
equipment, net 432,465 422,564 Intangibles, net 64,685 66,454
Goodwill 161,089 160,375 Income taxes receivable and deferred
69,505 68,865 Contract receivables 17,960 14,045 Other assets
31,799 29,825 Total assets $ 1,262,125
$ 1,263,433 LIABILITIES AND SHAREHOLDERS'
EQUITY Notes and loans payable $ 274 $ 312 Accounts payable 43,756
43,305 Accrued liabilities 85,151 95,195 Current maturities of
long-term debt 51,699 51,666 Income taxes payable 7,199
9,531 Total current liabilities 188,079
200,009 Long-term debt 428,477 432,918 Other noncurrent
liabilities 104,262 106,827 Deferred taxes and other liabilities
12,714 12,389 Total liabilities
733,532 752,143 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 37,368,649 in 2017 and
37,319,266 in 2016 37 37 Class B Common Stock, par value $.001 per
share; authorized 25,000,000 shares; issued and outstanding
3,233,998 in 2017 and 2016 3 3 Additional paid in capital 427,017
425,953 Retained earnings 528,227 522,855 Accumulated items of
other comprehensive income: Translation adjustments (123,172 )
(133,298 ) Pension and postretirement liability adjustments (51,748
) (51,719 ) Derivative valuation adjustment 1,458 828 Treasury
stock (Class A), at cost 8,443,444 shares in 2017 and 2016
(257,136 ) (257,136 ) Total Company shareholders' equity
524,686 507,523 Noncontrolling interest 3,907
3,767 Total equity 528,593 511,290
Total liabilities and shareholders' equity $ 1,262,125
$ 1,263,433 ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW (in thousands) (unaudited)
Three Months endedMarch 31,
2017 2016 OPERATING ACTIVITIES Net income $ 10,974 $ 13,316
Adjustments to reconcile net income to net cash (used in)/provided
by operating activities:
Depreciation
14,644 13,124
Amortization
2,649 1,696
Change in other noncurrent liabilities
(1,596 ) (1,364 )
Change in deferred taxes and other
liabilities
(612 ) 2,529
Provision for write-off of property, plant
and equipment
296 592
Non-cash interest expense
211 -
Compensation and benefits paid or payable
in Class A Common Stock
989 864 Changes in operating assets and liabilities that
provide/(use) cash:
Accounts receivable
(741 ) (902 )
Inventories
(14,921 ) (1,348 )
Prepaid expenses and other current
assets
(1,917 ) (5,382 )
Income taxes prepaid and receivable
- (1,895 )
vAccounts payable
3,524 1,632
Accrued liabilities
(10,971 ) (8,843 )
Income taxes payable
(2,486 ) (3,836 )
Contract receivables
(3,915 ) -
Other, net
(700 ) (4,801 )
Net cash (used in)/provided by operating
activities
(4,572 ) 5,382 INVESTING ACTIVITIES
Purchases of property, plant and
equipment
(25,045 ) (7,993 )
Purchased software
(38 ) (82 )
Net cash used in investing activities
(25,083 ) (8,075 ) FINANCING ACTIVITIES
Proceeds from borrowings
16,145 12,396
Principal payments on debt
(20,602 ) (22,398 )
Debt acquisition costs
- (200 )
Taxes paid in lieu of share issuance
(1,364 ) (1,272 )
Proceeds from options exercised
75 205
Dividends paid
(5,459 ) (5,443 )
Net cash used in financing activities
(11,205 ) (16,712 ) Effect of exchange rate
changes on cash and cash equivalents 2,451
3,907 Decrease in cash and cash equivalents (38,409 )
(15,498 ) Cash and cash equivalents at beginning of period
181,742 185,113 Cash and cash equivalents at
end of period $ 143,333 $ 169,615
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170504006383/en/
Albany International Corp.InvestorsJohn Cozzolino,
518-445-2281john.cozzolino@albint.comorMediaHeather Kralik,
801-505-7001heather.kralik@albint.com
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