Le Lézard
Classified in: Transportation, Business
Subject: EARNINGS

Albany International Reports Fourth-Quarter 2023 Results


Albany International Corp. (NYSE:AIN) today reported operating results for its full year and fourth quarter of 2023, which ended December 31, 2023.

"In 2023, our business remained focused on operational execution and delivered outstanding financial performance," said Gunnar Kleveland, President and Chief Executive Officer. "I am pleased to report record revenues of $1.15 billion in 2023, up 11% from last year. GAAP EPS grew in the mid-teens, and Adjusted EPS of $4.06, was up 4.9% from last year. Importantly the company delivered 2023 free cash flow of $64 million, up significantly from the $32 million generated in 2022.

"Fourth quarter results were particularly strong with outstanding contributions from both of our business segments," continued Kleveland. "Our first full quarter of Heimbach integration is complete, and we are on track to deliver on the promise of that acquisition. Meanwhile, our core Machine Clothing operations grew fourth quarter revenue and expanded profit margins despite soft business conditions in Europe. The Engineered Composites segment continues to grow. We have completed another year of growth on our commercial programs, and recent program wins were also important drivers of year-over-year revenue and profit growth in the business. We are well positioned for another strong year in 2024."

For the fourth-quarter ended December 31, 2023:

Please see the tables below for a reconciliation of non-GAAP measures to their comparable GAAP measures.

"We are on sound financial footing as we enter 2024," said Robert Starr, Chief Financial Officer. "Our businesses continue to deliver outstanding execution that will help sustain solid results and generate healthy cash flow this year. We will continue to invest thoughtfully to drive long-term growth."

Outlook for the Full-Year 2024

Albany International's initial financial guidance for the full-year 2024:

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net revenues

$

323,584

 

 

$

268,786

 

 

$

1,147,909

 

 

$

1,034,887

 

Cost of goods sold

 

203,723

 

 

 

171,694

 

 

 

724,191

 

 

 

645,105

 

 

Gross profit

 

119,861

 

 

 

97,092

 

 

 

423,718

 

 

 

389,782

 

Selling, general, and administrative expenses

 

67,701

 

 

 

49,388

 

 

 

214,915

 

 

 

168,713

 

Technical and research expenses

 

10,324

 

 

 

9,957

 

 

 

40,627

 

 

 

39,941

 

Restructuring expenses, net

 

55

 

 

 

(162

)

 

 

282

 

 

 

106

 

 

 

 

 

 

 

 

 

Operating income

 

41,781

 

 

 

37,909

 

 

 

167,894

 

 

 

181,022

 

Interest expense, net

 

3,552

 

 

 

2,664

 

 

 

13,601

 

 

 

14,000

 

Pension settlement expense

 

?

 

 

 

?

 

 

 

?

 

 

 

49,128

 

Other (income)/expense, net

 

(1,253

)

 

 

3,805

 

 

 

(6,163

)

 

 

(14,086

)

 

 

 

 

 

 

 

 

Income before income taxes

 

39,482

 

 

 

31,440

 

 

 

160,456

 

 

 

131,980

 

Income tax expense

 

8,938

 

 

 

13,199

 

 

 

48,846

 

 

 

35,472

 

 

 

 

 

 

 

 

 

Net income

 

30,544

 

 

 

18,241

 

 

 

111,610

 

 

 

96,508

 

Net income attributable to the noncontrolling interest

 

94

 

 

 

111

 

 

 

490

 

 

 

746

 

Net income attributable to the Company

$

30,450

 

 

$

18,130

 

 

$

111,120

 

 

$

95,762

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Company shareholders - Basic

$

0.98

 

 

$

0.58

 

 

$

3.56

 

 

$

3.06

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Company shareholders - Diluted

$

0.97

 

 

$

0.58

 

 

$

3.55

 

 

$

3.04

 

 

 

 

 

 

 

 

 

Shares of the Company used in computing earnings per share:

 

 

 

 

 

 

 

Basic

 

31,195

 

 

 

31,111

 

 

 

31,171

 

 

 

31,339

 

 

 

 

 

 

 

 

 

Diluted

 

31,332

 

 

 

31,267

 

 

 

31,276

 

 

 

31,455

 

 

 

 

 

 

 

 

 

Dividends declared per share, Class A

$

0.26

 

 

$

0.25

 

 

$

1.01

 

 

$

0.88

 

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

December 31, 2023

 

December 31, 2022

ASSETS

 

 

 

Cash and cash equivalents

$

173,420

 

 

$

291,776

 

Accounts receivable, net

 

287,781

 

 

 

200,018

 

Contract assets, net

 

182,281

 

 

 

148,695

 

Inventories

 

169,567

 

 

 

139,050

 

Income taxes prepaid and receivable

 

11,043

 

 

 

7,938

 

Prepaid expenses and other current assets

 

53,872

 

 

 

50,962

 

Total current assets

$

877,964

 

 

$

838,439

 

 

 

 

 

Property, plant and equipment, net

 

601,989

 

 

 

445,658

 

Intangibles, net

 

44,646

 

 

 

33,811

 

Goodwill

 

180,181

 

 

 

178,217

 

Deferred income taxes

 

22,941

 

 

 

15,196

 

Noncurrent receivables, net

 

4,392

 

 

 

27,913

 

Other assets

 

102,901

 

 

 

103,021

 

Total assets

$

1,835,014

 

 

$

1,642,255

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Accounts payable

$

87,104

 

 

$

69,707

 

Accrued liabilities

 

142,988

 

 

 

126,385

 

Current maturities of long-term debt

 

4,218

 

 

 

?

 

Income taxes payable

 

14,369

 

 

 

15,224

 

Total current liabilities

 

248,679

 

 

 

211,316

 

 

 

 

 

Long-term debt

 

452,667

 

 

 

439,000

 

Other noncurrent liabilities

 

139,385

 

 

 

108,758

 

Deferred taxes and other liabilities

 

26,963

 

 

 

15,638

 

Total liabilities

 

867,694

 

 

 

774,712

 

 

 

 

 

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; 40,856,910 issued in 2023 and 40,785,434 in 2022

 

41

 

 

 

41

 

Additional paid in capital

 

448,218

 

 

 

441,540

 

Retained earnings

 

1,010,942

 

 

 

931,318

 

Accumulated items of other comprehensive income:

 

 

 

Translation adjustments

 

(124,901

)

 

 

(146,851

)

Pension and postretirement liability adjustments

 

(17,346

)

 

 

(15,783

)

Derivative valuation adjustment

 

9,079

 

 

 

17,707

 

Treasury stock (Class A), at cost; 9,661,845 shares in 2023 and 9,674,542 in 2022

 

(364,665

)

 

 

(364,923

)

Total Company shareholders' equity

 

961,368

 

 

 

863,049

 

Noncontrolling interest

 

5,952

 

 

 

4,494

 

Total equity

 

967,320

 

 

 

867,543

 

Total liabilities and shareholders' equity

$

1,835,014

 

 

$

1,642,255

 

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

 

Twelve Months Ended December 31,

 

 

 

2023

 

 

 

2022

 

OPERATING ACTIVITIES

 

 

 

 

Net income

 

$

111,610

 

 

$

96,508

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation

 

 

70,374

 

 

 

62,480

 

Amortization

 

 

6,359

 

 

 

6,569

 

Change in deferred taxes and other liabilities

 

 

(2,046

)

 

 

(8,496

)

Impairment of property, plant, equipment, and inventory

 

 

1,773

 

 

 

1,808

 

Non-cash interest expense

 

 

1,404

 

 

 

1,118

 

Non-cash portion of pension settlement expense

 

 

?

 

 

 

42,657

 

Compensation and benefits paid or payable in Class A Common Stock

 

 

6,936

 

 

 

4,527

 

Provision/(recovery) for credit losses from uncollected receivables and contract assets

 

 

640

 

 

 

1,408

 

Foreign currency remeasurement (gain)/loss on intercompany loans

 

 

(2,831

)

 

 

(4,434

)

Fair value adjustment on foreign currency options

 

 

(139

)

 

 

(509

)

 

 

 

 

 

Changes in operating assets and liabilities that provided/(used) cash, net of impact of business acquisition:

 

 

 

 

Accounts receivable

 

 

(11,038

)

 

 

(14,301

)

Contract assets

 

 

(32,156

)

 

 

(36,434

)

Inventories

 

 

15,093

 

 

 

(24,541

)

Prepaid expenses and other current assets

 

 

1,530

 

 

 

(4,134

)

Income taxes prepaid and receivable

 

 

(2,897

)

 

 

(6,005

)

Accounts payable

 

 

(5,672

)

 

 

8,572

 

Accrued liabilities

 

 

(10,441

)

 

 

3,226

 

Income taxes payable

 

 

(1,988

)

 

 

183

 

Noncurrent receivables

 

 

3,723

 

 

 

3,911

 

Other noncurrent liabilities

 

 

(9,783

)

 

 

(10,133

)

Other, net

 

 

7,605

 

 

 

4,234

 

Net cash provided by operating activities

 

 

148,056

 

 

 

128,214

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

Purchase of business, net of cash acquired

 

 

(133,470

)

 

 

?

 

Purchases of property, plant and equipment

 

 

(83,560

)

 

 

(93,675

)

Purchased software

 

 

(869

)

 

 

(2,673

)

Net cash used in investing activities

 

 

(217,899

)

 

 

(96,348

)

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

Proceeds from borrowings

 

 

78,040

 

 

 

162,000

 

Principal payments on debt

 

 

(92,274

)

 

 

(73,000

)

Principal payments on finance lease liabilities

 

 

?

 

 

 

(654

)

Debt acquisition costs

 

 

(4,108

)

 

 

?

 

Purchase of Treasury shares

 

 

?

 

 

 

(84,780

)

Taxes paid in lieu of share issuance

 

 

(3,136

)

 

 

(770

)

Proceeds from options exercised

 

 

?

 

 

 

17

 

Dividends paid

 

 

(31,163

)

 

 

(26,465

)

Net cash used in financing activities

 

 

(52,641

)

 

 

(23,652

)

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

4,128

 

 

 

(18,474

)

 

 

 

 

 

Increase/(decrease) in cash and cash equivalents

 

 

(118,356

)

 

 

(10,260

)

Cash and cash equivalents at beginning of period

 

 

291,776

 

 

 

302,036

 

Cash and cash equivalents at end of period

 

$

173,420

 

 

$

291,776

 

Financial tables and reconciliation of non-GAAP measures to comparable GAAP measures

The following tables present Net revenues and the effect of changes in currency translation rates:

(in thousands, except percentages)

Net revenues as reported, Q4 2023

Increase due to changes in currency translation rates

Q4 2023 revenues on same basis as Q4 2022 currency translation rates

Net revenues as reported, Q4 2022

% Change compared to Q4 2022, excluding currency rate effects

Machine Clothing

$

191,741

$

1,088

 

$

190,653

$

150,340

26.8

%

Albany Engineered Composites

 

131,843

 

896

 

 

130,947

 

118,446

10.6

%

Consolidated total

$

323,584

$

1,984

 

$

321,600

$

268,786

19.6

%

 

 

 

 

 

 

(in thousands, except percentages)

Net revenues as reported, YTD 2023

Decrease/(increase) due to changes in currency translation rates

YTD 2023 revenues on same basis as 2022 currency translation rates

Net revenues as reported, YTD 2022

% Change compared to 2022, excluding currency rate effects

Machine Clothing

$

670,768

$

(2,596

)

$

673,364

$

609,461

10.5

%

Albany Engineered Composites

 

477,141

 

1,747

 

 

475,394

 

425,426

11.7

%

Consolidated total

$

1,147,909

$

(849

)

$

1,148,758

$

1,034,887

11.0

%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)

Gross profit,

Q4 2023

Gross profit margin, Q4 2023

Gross profit,

Q4 2022

Gross profit margin, Q4 2022

Machine Clothing

$

93,527

48.8

%

$

74,851

49.8

%

Albany Engineered Composites

 

26,334

20.0

%

 

22,241

18.8

%

Consolidated total

$

119,861

37.0

%

$

97,092

36.1

%

(in thousands, except percentages)

Gross profit,

YTD 2023

Gross profit margin, YTD 2023

Gross profit,

YTD 2022

Gross profit margin, YTD 2022

Machine Clothing

$

331,558

49.4

%

$

312,285

51.2

%

Albany Engineered Composites

 

92,160

19.3

%

 

77,497

18.2

%

Consolidated total

$

423,718

36.9

%

$

389,782

37.7

%

A reconciliation from Net income/(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended December 31, 2023

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

45,978

 

$

14,127

 

$

(29,561

)

$

30,544

 

Interest expense, net

 

?

 

 

?

 

 

3,552

 

 

3,552

 

Income tax expense

 

?

 

 

?

 

 

8,938

 

 

8,938

 

Depreciation and amortization expense

 

8,209

 

 

12,784

 

 

962

 

 

21,955

 

EBITDA (non-GAAP)

 

54,187

 

 

26,911

 

 

(16,109

)

 

64,989

 

Restructuring expenses, net

 

55

 

 

?

 

 

?

 

 

55

 

Foreign currency revaluation (gains)/losses (a)

 

2,247

 

 

44

 

 

725

 

 

3,016

 

CEO transition expenses

 

?

 

 

?

 

 

667

 

 

667

 

Inventory step-up impacting Cost of goods sold

 

4,110

 

 

?

 

 

?

 

 

4,110

 

Acquisition/integration costs

 

984

 

 

268

 

 

1,124

 

 

2,376

 

Pre-tax (income) attributable to noncontrolling interest

 

(24

)

 

(167

)

 

?

 

 

(191

)

Adjusted EBITDA (non-GAAP)

$

61,559

 

$

27,056

 

$

(13,593

)

$

75,022

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)

 

32.1

%

 

20.5

%

 

?

 

 

23.2

%

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2022

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

44,462

 

$

10,891

 

$

(37,112

)

$

18,241

 

Interest expense, net

 

?

 

 

?

 

 

2,664

 

 

2,664

 

Income tax expense

 

?

 

 

?

 

 

13,199

 

 

13,199

 

Depreciation and amortization expense

 

4,767

 

 

11,410

 

 

964

 

 

17,141

 

EBITDA (non-GAAP)

 

49,229

 

 

22,301

 

 

(20,285

)

 

51,245

 

Restructuring expenses, net

 

(163

)

 

?

 

 

1

 

 

(162

)

Foreign currency revaluation (gains)/losses (a)

 

3,170

 

 

(83

)

 

7,663

 

 

10,750

 

Acquisition/integration costs

 

?

 

 

251

 

 

?

 

 

251

 

Dissolution of business relationships in Russia

 

(79

)

 

?

 

 

?

 

 

(79

)

IP address sales

 

?

 

 

?

 

 

(3,420

)

 

(3,420

)

Pre-tax (income) attributable to noncontrolling interest

 

?

 

 

(184

)

 

?

 

 

(184

)

Adjusted EBITDA (non-GAAP)

$

52,157

 

$

22,285

 

$

(16,041

)

$

58,401

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)

 

34.7

%

 

18.8

%

 

?

 

 

21.7

%

Twelve months ended December 31, 2023

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

199,378

 

$

41,587

 

$

(129,355

)

$

111,610

 

Interest expense, net

 

?

 

 

?

 

 

13,601

 

 

13,601

 

Income tax expense

 

?

 

 

?

 

 

48,846

 

 

48,846

 

Depreciation and amortization expense

 

23,891

 

 

49,030

 

 

3,812

 

 

76,733

 

EBITDA (non-GAAP)

 

223,269

 

 

90,617

 

 

(63,096

)

 

250,790

 

Restructuring expenses, net

 

282

 

 

?

 

 

?

 

 

282

 

Foreign currency revaluation (gains)/losses (a)

 

4,117

 

 

63

 

 

(2,884

)

 

1,296

 

CEO transition expenses

 

?

 

 

?

 

 

2,719

 

 

2,719

 

Inventory step-up impacting Cost of goods sold

 

5,480

 

 

?

 

 

?

 

 

5,480

 

Acquisition/integration costs

 

984

 

 

1,081

 

 

3,129

 

 

5,194

 

Pre-tax (income) attributable to noncontrolling interest

 

(24

)

 

(641

)

 

?

 

 

(665

)

Adjusted EBITDA (non-GAAP)

$

234,108

 

$

91,120

 

$

(60,132

)

$

265,096

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)

 

34.9

%

 

19.1

%

 

?

 

23.1

%

 

 

 

 

 

Twelve months ended December 31, 2022

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Net income/(loss) (GAAP)

$

206,214

 

$

31,579

 

$

(141,285

)

$

96,508

 

Interest expense, net

 

?

 

 

?

 

 

14,000

 

 

14,000

 

Income tax expense

 

?

 

 

?

 

 

35,472

 

 

35,472

 

Depreciation and amortization expense

 

19,483

 

 

46,202

 

 

3,364

 

 

69,049

 

EBITDA (non-GAAP)

 

225,697

 

 

77,781

 

 

(88,449

)

 

215,029

 

Restructuring expenses, net

 

92

 

 

?

 

 

14

 

 

106

 

Foreign currency revaluation (gains)/losses (a)

 

(520

)

 

672

 

 

(9,981

)

 

(9,829

)

Dissolution of business relationships in Russia

 

1,494

 

 

?

 

 

781

 

 

2,275

 

Pension settlement expense

 

?

 

 

?

 

 

49,128

 

 

49,128

 

IP address sales

 

?

 

 

?

 

 

(3,420

)

 

(3,420

)

Acquisition/integration costs

 

?

 

 

1,057

 

 

?

 

 

1,057

 

Pre-tax (income) attributable to noncontrolling interest

 

?

 

 

(817

)

 

?

 

 

(817

)

Adjusted EBITDA (non-GAAP)

$

226,763

 

$

78,693

 

$

(51,927

)

$

253,529

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)

 

37.2

%

 

18.5

%

 

?

 

24.5

%

Per share impact of the adjustments to diluted earnings per share are as follows:

Three months ended December 31, 2023

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

55

 

$

13

 

$

42

 

$

0.00

 

Foreign currency revaluation (gains)/losses (a)

 

3,016

 

 

933

 

 

2,083

 

 

0.07

 

CEO transition expenses

 

667

 

 

?

 

 

667

 

 

0.02

 

Inventory step-up impacting Cost of goods sold

 

4,110

 

 

908

 

 

3,202

 

 

0.10

 

Acquisition/integration costs

 

2,376

 

 

486

 

 

1,890

 

 

0.06

 

 

 

 

 

 

Three months ended December 31, 2022

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

(162

)

$

(41

)

$

(121

)

$

0.00

 

Foreign currency revaluation (gains)/losses (a)

 

10,750

 

 

3,247

 

 

7,503

 

 

0.24

 

Dissolution of business relationships in Russia

 

(79

)

 

(9

)

 

(70

)

 

0.00

 

IP address sales

 

(3,420

)

 

(872

)

 

(2,548

)

 

(0.08

)

Acquisition/integration costs

 

251

 

 

75

 

 

176

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2023

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

282

 

$

70

 

$

212

 

$

0.01

 

Foreign currency revaluation (gains)/losses (a)

 

1,296

 

 

416

 

 

880

 

 

0.03

 

CEO transition expenses

 

2,719

 

 

?

 

 

2,719

 

 

0.09

 

Withholding tax related to internal restructuring

 

?

 

 

(3,026

)

 

3,026

 

 

0.10

 

Inventory step-up impacting Cost of goods sold

 

5,480

 

 

1,211

 

 

4,269

 

 

0.14

 

Acquisition/integration costs

 

5,194

 

 

951

 

 

4,243

 

 

0.14

 

 

 

 

 

 

Year ended December 31, 2022

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

106

 

$

34

 

$

72

 

$

0.01

 

Foreign currency revaluation (gains)/losses (a)

 

(9,829

)

 

(2,582

)

 

(7,247

)

 

(0.23

)

Dissolution of business relationships in Russia

 

2,275

 

 

305

 

 

1,970

 

 

0.06

 

Pension settlement expense

 

49,128

 

 

11,947

 

 

37,181

 

 

1.20

 

Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)

 

?

 

 

5,217

 

 

(5,217

)

 

(0.17

)

IP address sales

 

(3,420

)

 

(872

)

 

(2,548

)

 

(0.08

)

Acquisition/integration costs

 

1,057

 

 

316

 

 

741

 

 

0.04

 

 

The following table provides a reconciliation of Earnings per share to Adjusted Diluted Earnings per share:

 

Three months ended December 31,

Twelve months ended December 31,

 

Per share amounts

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Earnings per share attributable to Company shareholders - Basic (GAAP)

$

0.98

 

$

0.58

 

$

3.56

 

$

3.06

 

 

Effect of dilutive stock-based compensation plans

 

(0.01

)

 

?

 

 

(0.01

)

 

(0.02

)

 

Earnings per share attributable to Company shareholders - Diluted (GAAP)

$

0.97

 

$

0.58

 

$

3.55

 

$

3.04

 

 

Adjustments, after tax:

 

 

 

 

 

Restructuring expenses, net

 

?

 

 

?

 

 

0.01

 

 

0.01

 

 

Foreign currency revaluation (gains)/losses (a)

 

0.07

 

 

0.24

 

 

0.03

 

 

(0.23

)

 

CEO transition expenses

 

0.02

 

 

?

 

 

0.09

 

 

?

 

 

Inventory step-up impacting Cost of goods sold

 

0.10

 

 

?

 

 

0.14

 

 

?

 

 

Dissolution of business relationships in Russia

 

?

 

 

?

 

 

?

 

 

0.06

 

 

Pension settlement charge

 

?

 

 

?

 

 

?

 

 

1.20

 

 

Withholding tax related to internal restructuring

 

?

 

 

?

 

 

0.10

 

 

?

 

 

Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)

 

?

 

 

?

 

 

?

 

 

(0.17

)

 

IP address sales

 

?

 

 

(0.08

)

 

?

 

 

(0.08

)

 

Acquisition/integration costs

 

0.06

 

 

0.01

 

 

0.14

 

 

0.04

 

 

Adjusted Diluted Earnings per share (non-GAAP)

$

1.22

 

$

0.75

 

$

4.06

 

$

3.87

 

 

 

 

(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date.

 

(b) Our Adjusted EPS excluded the benefit from the reclassification of stranded income tax effects caused by the TCJA associated with the US pension plan liability that was eliminated in September 2022, a one-time event that would not recur in the future. Such stranded income tax effect represented a one-time benefit that distorted the effective tax rate for the quarter and year-to-date ended September 30, 2022, and would not be indicative of ongoing or expected future income tax rate at the Company. Management believes excluding pension settlement expense and its income tax impact, including the stranded income tax effects, from its Adjusted EBITDA and Adjusted EPS for the quarter and year-to-date ended September 30, 2022 would provide investors a transparent view and enhanced ability to better assess the Company's ongoing operational and financial performance.

 

The calculations of net debt are as follows:

(in thousands)

December 31, 2023

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

Current maturities of long-term debt

$

4,218

$

27,246

$

?

$

?

$

?

Long-term debt

 

452,667

 

463,339

 

487,000

 

491,000

 

439,000

Total debt

 

456,885

 

490,585

 

487,000

 

491,000

 

439,000

Cash and cash equivalents

 

173,420

 

171,506

 

300,916

 

304,258

 

291,776

Net debt (non GAAP)

$

283,465

$

319,079

$

186,084

$

186,742

$

147,224

The calculation of net leverage ratio as of December 31, 2023 is as follows:

Total Company

 

Twelve months ended

(in thousands)

December 31, 2023

Net income/(loss) (GAAP)

$

111,610

 

Interest expense, net

 

13,601

 

Income tax expense

 

48,846

 

Depreciation and amortization expense

 

76,733

 

EBITDA (non-GAAP)

 

250,790

 

Restructuring expenses, net

 

282

 

Foreign currency revaluation (gains)/losses (a)

 

1,296

 

CEO transition expenses

 

2,719

 

Inventory step-up impacting Cost of goods sold

 

5,480

 

Acquisition/integration costs

 

5,194

 

Pre-tax (income) attributable to noncontrolling interest

 

(665

)

Adjusted EBITDA (non-GAAP)

$

265,096

 

(in thousands, except for net leverage ratio)

December 31, 2023

Net debt (non-GAAP)

$

283,465

Adjusted EBITDA (non-GAAP)

 

265,096

Net leverage ratio (non-GAAP)

 

1.07

 

 

The tables below provide a reconciliation of initial outlook for the full-year 2024 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Initial Outlook Full Year 2024 Adjusted EBITDA

Machine Clothing

 

AEC

(in millions)

Low

High

 

Low

High

Net income attributable to the Company (GAAP) (c)

$

200

 

$

215

 

 

$

47

 

$

52

 

Income attributable to the noncontrolling interest

 

?

 

 

?

 

 

 

(1

)

 

(1

)

Interest expense, net

 

?

 

 

?

 

 

 

?

 

 

?

 

Income tax expense

 

?

 

 

?

 

 

 

?

 

 

?

 

Depreciation and amortization

 

30

 

 

35

 

 

 

50

 

 

55

 

EBITDA (non-GAAP)

 

230

 

 

250

 

 

96

 

 

106

 

Restructuring expenses, net (c)

 

?

 

 

?

 

 

 

?

 

 

?

 

Foreign currency revaluation (gains)/losses (c)

 

?

 

 

?

 

 

 

?

 

 

?

 

Acquisition/integration costs (c)

 

?

 

 

?

 

 

 

?

 

 

?

 

Pre-tax (income)/loss attributable to non-controlling interest

 

?

 

 

?

 

 

 

1

 

 

1

 

Adjusted EBITDA (non-GAAP)

$

230

 

$

250

 

 

$

97

 

$

107

 

(c) Interest, Other income/expense and Income taxes are not allocated to the business segments

 

 

 

 

 

 

 

 

 

 

 

Initial Outlook Full Year 2024 Adjusted EBITDA

Total Company

 

 

 

(in millions)

Low

High

 

 

 

Net income attributable to the Company (GAAP) (c)

$

111

 

$

126

 

 

 

 

Income attributable to the noncontrolling interest

 

(1

)

 

(1

)

 

 

 

Interest expense, net

 

17

 

 

18

 

 

 

 

Income tax expense

 

47

 

 

51

 

 

 

 

Depreciation and amortization

 

85

 

 

95

 

 

 

 

EBITDA (non-GAAP)

 

259

 

 

289

 

 

 

 

Restructuring expenses, net (d)

 

?

 

 

?

 

 

 

 

Foreign currency revaluation (gains)/losses (d)

 

?

 

 

?

 

 

 

 

Acquisition/integration costs (d)

 

?

 

 

?

 

 

 

 

Pre-tax (income)/loss attributable to non-controlling interest

 

1

 

 

1

 

 

 

 

Adjusted EBITDA (non-GAAP)

$

260

 

$

290

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

Forecast of Full Year 2024 Earnings per share (diluted) (e)

Low

High

 

 

 

Net income attributable to the Company (GAAP) (c)

$

3.55

 

$

4.05

 

 

 

 

Restructuring expenses, net (d)

 

?

 

 

?

 

 

 

 

Foreign currency revaluation (gains)/losses (d)

 

?

 

 

?

 

 

 

 

Acquisition/integration costs (d)

 

?

 

 

?

 

 

 

 

Adjusted Diluted Earnings per share (non-GAAP)

$

3.55

 

$

4.05

 

 

 

 

 

 

 

 

 

 

(d) Due to the uncertainty of these items, we are unable to forecast these items for 2024.

(e) Calculations based on estimated diluted shares outstanding of approximately 31.2 million.

About Albany International Corp.

Albany International is a leading developer and manufacturer of engineered components, using advanced materials processing and automation capabilities, with two core businesses.

Albany International is headquartered in Rochester, New Hampshire, operates 32 facilities in 14 countries, employs approximately 5,600 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

Non-GAAP Measures

This release, including the conference call commentary associated with this release, contains certain non-GAAP measures, that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net revenues and percent change in net revenues, excluding the impact of currency translation effects; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted Diluted earnings per share (or Adjusted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company's operational performance.

Presenting Net revenues and change in Net revenues, after currency effects are excluded, provides management and investors insight into underlying revenues trends. Net revenues, or percent changes in net revenues, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

EBITDA (calculated as net income excluding interest, income taxes, depreciation and amortization), Adjusted EBITDA, and Adjusted EPS are performance measures that relate to the Company's continuing operations. The Company defines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company's ongoing or expected future operational performance. Such excluded costs or benefits do not consist of normal, recurring cash items necessary to generate revenues or operate our business. Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of net revenues.

The Company defines Adjusted EPS as diluted earnings per share (GAAP), adjusted by the after tax per share amount of costs or benefits not reflective of the Company's ongoing or expected future operational performance. The income tax effects are calculated using the applicable statutory income tax rate of the jurisdictions where such costs or benefits were incurred or the effective tax rate applicable to total company results.

The Company's Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted EPS may not be comparable to similarly titled measures of other companies.

Net debt aids investors in understanding the Company's debt position if all available cash were applied to pay down indebtedness.

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Forward-Looking Statements

This press release may contain statements, estimates, guidance or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," "should," "look for," "guidance," "guide," and similar expressions identify forward-looking statements, which generally are not historical in nature. Because forward-looking statements are subject to certain risks and uncertainties (including, without limitation, those set forth in the Company's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q), actual results may differ materially from those expressed or implied by such forward-looking statements.

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic conditions, including inflationary cost pressures, as well as global events, which include but are not limited to geopolitical events; paper-industry trends and conditions during 2023 and in future years; expectations in 2023 and in future periods of revenues, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net revenues), Adjusted EPS, income, gross profit, gross margin, cash flows and other financial items in each of the Company's businesses, and for the Company as a whole; the timing and impact of production and development programs in the Company's AEC business segment and the revenues growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company's financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Statements expressing management's assessments of the growth potential of its businesses, or referring to earlier assessments of such potential, are not intended as forecasts of actual future growth, and should not be relied on as such. While management believes such assessments to have a reasonable basis, such assessments are, by their nature, inherently uncertain. This release and earlier releases set forth a number of assumptions regarding these assessments, including historical results, independent forecasts regarding the markets in which these businesses operate, and the timing and magnitude of orders for our customers' products. Historical growth rates are no guarantee of future growth, and such independent forecasts and assumptions could prove materially incorrect in some cases.


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