Albany International Reports Third-Quarter 2022 Results
Albany International Corp. (NYSE: AIN) reported strong Q3 2022 results with a revenue increase of 12.1% year-over-year, totaling $261 million. Engineered Composites sales soared by nearly 37% driven by LEAP production and the CH-53K program. Despite $49.1 million in pension settlement charges impacting GAAP EPS, adjusted EPS rose significantly to $1.15 from $0.83 in Q3 2021. The company updated its full-year 2022 guidance, anticipating total revenue between $990 million and $1.015 billion, and adjusted EPS of $3.50 to $3.80.
- Revenue increased by 12.1% year-over-year to $261 million in Q3 2022.
- Engineered Composites segment saw nearly 37% sales growth, fueled by LEAP production and the CH-53K helicopter program.
- Adjusted EPS rose to $1.15, up from $0.83 in Q3 2021.
- Operating income improved by 20.6% to $53.6 million compared to the previous year.
- Updated full-year 2022 revenue guidance forecasted between $990 million and $1.015 billion.
- GAAP EPS decreased to $0.34, down from $0.95 in Q3 2021 due to pension settlement charges impacting reporting.
- Pension settlement charges totaled $49.1 million, significantly affecting net income.
"We are pleased to report another strong quarter,” said
"Third quarter GAAP earnings per share was
For the third quarter ended
-
Net sales were
, up$260.6 million 12.1% , or16.5% after adjusting for currency translation, when compared to the prior year, primarily due to year-over-year growth in sales related to the CH-53K and LEAP programs within the Engineered Composites segment. -
Gross profit of
was$100.5 million 9.2% higher than the reported for the same period of 2021.$92.0 million -
Selling, Technical, General, and Research (STG&R) expenses were
, compared to$46.8 million in the same period of 2021. The decrease was driven by the favorable effect of the revaluation of foreign currency in the Machine Clothing segment.$47.4 million -
Operating income was
, compared to$53.6 million in the prior year, an increase of$44.5 million 20.6% . -
Certain pension plan liabilities were settled for a plan in the
U.S. , leading to charges totaling and reducing GAAP earnings per share by$49.1 million .$1.20 -
Effective tax rate for the quarter was -
41.9% , driven by the release of residual taxes as a result of the pension settlement; excluding the effect of the pension settlement and related adjustments, the effective tax rate for the quarter was24.6% or 250 basis points lower than that for the third quarter of 2021, mainly due to favorable discrete tax adjustments in the third quarter of 2022. -
Net income attributable to the Company was
($10.7 million per share), compared to$0.34 ($30.9 million per share) in the third quarter of 2021. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was$0.95 per share in the third quarter of 2022, compared to$1.15 in the same period of last year.$0.83 -
Adjusted EBITDA (a non-GAAP measure) was
, compared to$68.1 million in the third quarter of 2021, an increase of$60.2 million 13% .
Please see the tables below for a reconciliation of non-GAAP measures to their comparable GAAP measures.
Outlook for Full-Year 2022
The Company has updated its guidance for the full year 2022 as follows:
-
Total company revenue of between
and$990 million ;$1.01 5 billion -
Effective income tax rate, including tax adjustments, of
25% to27% ; -
Total company depreciation and amortization of between
and$71 ;$72 million -
Capital expenditures in the range of
to$75 ;$85 million -
GAAP earnings per share of between
and$2.84 ;$3.14 -
Adjusted earnings per share of between
and$3.50 ;$3.80 -
Total company Adjusted EBITDA of
to$240 ;$255 million -
Machine Clothing revenue of
to$595 ;$610 million -
Machine Clothing Adjusted EBITDA of between
and$215 ;$225 million -
Albany Engineered Composites revenue of between and$395 ; and$405 million -
Albany Engineered Composites Adjusted EBITDA of between
and$75 .$80 million
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net sales |
$ |
260,563 |
|
|
$ |
232,442 |
|
|
$ |
766,101 |
|
|
$ |
689,322 |
|
Cost of goods sold |
|
160,070 |
|
|
|
140,400 |
|
|
|
473,411 |
|
|
|
407,006 |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
100,493 |
|
|
|
92,042 |
|
|
|
292,690 |
|
|
|
282,316 |
|
Selling, general, and administrative expenses |
|
36,873 |
|
|
|
37,696 |
|
|
|
119,325 |
|
|
|
116,899 |
|
Technical and research expenses |
|
9,934 |
|
|
|
9,673 |
|
|
|
29,984 |
|
|
|
28,916 |
|
Restructuring expenses, net |
|
42 |
|
|
|
187 |
|
|
|
268 |
|
|
|
230 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
53,644 |
|
|
|
44,486 |
|
|
|
143,113 |
|
|
|
136,271 |
|
Interest expense, net |
|
3,794 |
|
|
|
3,734 |
|
|
|
11,336 |
|
|
|
11,521 |
|
Pension settlement expense |
|
49,128 |
|
|
|
— |
|
|
|
49,128 |
|
|
|
— |
|
Aviation Manufacturing Jobs Protection (AMJP) grant |
|
— |
|
|
|
(5,832 |
) |
|
|
— |
|
|
|
(5,832 |
) |
Other (income)/expense, net |
|
(6,918 |
) |
|
|
2,753 |
|
|
|
(17,891 |
) |
|
|
4,215 |
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes |
|
7,640 |
|
|
|
43,831 |
|
|
|
100,540 |
|
|
|
126,367 |
|
Income tax expense/(benefit) |
|
(3,183 |
) |
|
|
12,889 |
|
|
|
22,273 |
|
|
|
36,375 |
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
10,823 |
|
|
|
30,942 |
|
|
|
78,267 |
|
|
|
89,992 |
|
Net income attributable to the noncontrolling interest |
|
129 |
|
|
|
80 |
|
|
|
635 |
|
|
|
150 |
|
Net income attributable to the Company |
$ |
10,694 |
|
|
$ |
30,862 |
|
|
$ |
77,632 |
|
|
$ |
89,842 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Company shareholders - Basic |
$ |
0.34 |
|
|
$ |
0.95 |
|
|
$ |
2.47 |
|
|
$ |
2.78 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Company shareholders - Diluted |
$ |
0.34 |
|
|
$ |
0.95 |
|
|
$ |
2.46 |
|
|
$ |
2.77 |
|
|
|
|
|
|
|
|
|
||||||||
Shares of the Company used in computing earnings per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
31,111 |
|
|
|
32,381 |
|
|
|
31,416 |
|
|
|
32,369 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted |
|
31,223 |
|
|
|
32,434 |
|
|
|
31,518 |
|
|
|
32,424 |
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share, Class A and Class B |
$ |
0.21 |
|
|
$ |
0.20 |
|
|
$ |
0.63 |
|
|
$ |
0.60 |
|
CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
276,482 |
|
|
$ |
302,036 |
|
Accounts receivable, net |
|
198,847 |
|
|
|
191,985 |
|
Contract assets, net |
|
148,729 |
|
|
|
112,546 |
|
Inventories |
|
133,840 |
|
|
|
117,882 |
|
Income taxes prepaid and receivable |
|
4,055 |
|
|
|
1,958 |
|
Prepaid expenses and other current assets |
|
46,761 |
|
|
|
32,394 |
|
Total current assets |
$ |
808,714 |
|
|
$ |
758,801 |
|
|
|
|
|
||||
Property, plant and equipment, net |
|
411,139 |
|
|
|
436,417 |
|
Intangibles, net |
|
34,306 |
|
|
|
39,081 |
|
|
|
172,820 |
|
|
|
182,124 |
|
Deferred income taxes |
|
17,954 |
|
|
|
26,376 |
|
Noncurrent receivables, net |
|
28,770 |
|
|
|
31,849 |
|
Other assets |
|
98,146 |
|
|
|
81,416 |
|
Total assets |
$ |
1,571,849 |
|
|
$ |
1,556,064 |
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
||||
Accounts payable |
$ |
65,378 |
|
|
$ |
68,954 |
|
Accrued liabilities |
|
106,831 |
|
|
|
124,325 |
|
Current maturities of long-term debt |
|
— |
|
|
|
— |
|
Income taxes payable |
|
17,328 |
|
|
|
14,887 |
|
Total current liabilities |
|
189,537 |
|
|
|
208,166 |
|
|
|
|
|
||||
Long-term debt |
|
447,000 |
|
|
|
350,000 |
|
Other noncurrent liabilities |
|
103,843 |
|
|
|
107,794 |
|
Deferred taxes and other liabilities |
|
11,281 |
|
|
|
12,499 |
|
Total liabilities |
|
751,661 |
|
|
|
678,459 |
|
|
|
|
|
||||
SHAREHOLDERS' EQUITY |
|
|
|
||||
Preferred stock, par value |
|
— |
|
|
|
— |
|
Class A Common Stock, par value |
|
41 |
|
|
|
41 |
|
Class B Common Stock, par value |
|
— |
|
|
|
— |
|
Additional paid in capital |
|
440,295 |
|
|
|
436,996 |
|
Retained earnings |
|
920,966 |
|
|
|
863,057 |
|
Accumulated items of other comprehensive income: |
|
|
|
||||
Translation adjustments |
|
(185,721 |
) |
|
|
(105,880 |
) |
Pension and postretirement liability adjustments |
|
(12,613 |
) |
|
|
(38,490 |
) |
Derivative valuation adjustment |
|
17,961 |
|
|
|
(1,614 |
) |
|
|
(364,923 |
) |
|
|
(280,143 |
) |
|
|
816,006 |
|
|
|
873,967 |
|
Noncontrolling interest |
|
4,182 |
|
|
|
3,638 |
|
Total equity |
|
820,188 |
|
|
|
877,605 |
|
Total liabilities and shareholders' equity |
$ |
1,571,849 |
|
|
$ |
1,556,064 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
10,823 |
|
|
$ |
30,942 |
|
|
$ |
78,267 |
|
|
$ |
89,992 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation |
|
15,588 |
|
|
|
15,925 |
|
|
|
46,864 |
|
|
|
48,485 |
|
Amortization |
|
1,446 |
|
|
|
2,289 |
|
|
|
5,044 |
|
|
|
6,862 |
|
Change in deferred taxes and other liabilities |
|
(18,178 |
) |
|
|
1,606 |
|
|
|
(15,582 |
) |
|
|
7,022 |
|
Impairment of property, plant, equipment, and inventory |
|
(52 |
) |
|
|
25 |
|
|
|
2,610 |
|
|
|
563 |
|
Non-cash interest expense |
|
279 |
|
|
|
283 |
|
|
|
840 |
|
|
|
593 |
|
Non-cash portion of pension settlement expense |
|
42,657 |
|
|
|
— |
|
|
|
42,657 |
|
|
|
— |
|
Compensation and benefits paid or payable in Class A Common Stock |
|
835 |
|
|
|
606 |
|
|
|
3,282 |
|
|
|
2,232 |
|
Provision/(recovery) for credit losses from uncollected receivables and contract assets |
|
(441 |
) |
|
|
(1,075 |
) |
|
|
885 |
|
|
|
(1,158 |
) |
Foreign currency remeasurement (gain)/loss on intercompany loans |
|
(5,369 |
) |
|
|
480 |
|
|
|
(6,629 |
) |
|
|
(551 |
) |
Fair value adjustment on foreign currency options |
|
(28 |
) |
|
|
29 |
|
|
|
(409 |
) |
|
|
169 |
|
|
|
|
|
|
|
|
|
||||||||
Changes in operating assets and liabilities that provided/(used) cash: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
(5,853 |
) |
|
|
(10,927 |
) |
|
|
(20,260 |
) |
|
|
(14,292 |
) |
Contract assets |
|
(13,333 |
) |
|
|
(3,473 |
) |
|
|
(37,201 |
) |
|
|
22,170 |
|
Inventories |
|
(3,760 |
) |
|
|
546 |
|
|
|
(24,895 |
) |
|
|
(9,838 |
) |
Prepaid expenses and other current assets |
|
1,741 |
|
|
|
3,949 |
|
|
|
(2,733 |
) |
|
|
2,444 |
|
Income taxes prepaid and receivable |
|
(2,119 |
) |
|
|
2,717 |
|
|
|
(2,179 |
) |
|
|
2,408 |
|
Accounts payable |
|
(2,395 |
) |
|
|
(296 |
) |
|
|
5,081 |
|
|
|
4,312 |
|
Accrued liabilities |
|
(879 |
) |
|
|
5,112 |
|
|
|
(12,624 |
) |
|
|
(12,311 |
) |
Income taxes payable |
|
10,378 |
|
|
|
2,871 |
|
|
|
2,639 |
|
|
|
(1,085 |
) |
Noncurrent receivables |
|
1,112 |
|
|
|
1,245 |
|
|
|
2,976 |
|
|
|
2,832 |
|
Other noncurrent liabilities |
|
(2,708 |
) |
|
|
(1,319 |
) |
|
|
(5,960 |
) |
|
|
(5,582 |
) |
Other, net |
|
(150 |
) |
|
|
1,324 |
|
|
|
4,634 |
|
|
|
3,232 |
|
Net cash provided by operating activities |
|
29,594 |
|
|
|
52,859 |
|
|
|
67,307 |
|
|
|
148,499 |
|
|
|
|
|
|
|
|
|
||||||||
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Purchases of property, plant and equipment |
|
(15,289 |
) |
|
|
(8,918 |
) |
|
|
(50,948 |
) |
|
|
(31,754 |
) |
Purchased software |
|
(1,518 |
) |
|
|
(106 |
) |
|
|
(1,884 |
) |
|
|
(394 |
) |
Net cash used in investing activities |
|
(16,807 |
) |
|
|
(9,024 |
) |
|
|
(52,832 |
) |
|
|
(32,148 |
) |
|
|
|
|
|
|
|
|
||||||||
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Proceeds from borrowings |
|
10,000 |
|
|
|
— |
|
|
|
145,000 |
|
|
|
8,000 |
|
Principal payments on debt |
|
(48,000 |
) |
|
|
— |
|
|
|
(48,000 |
) |
|
|
(56,009 |
) |
Principal payments on finance lease liabilities |
|
— |
|
|
|
(363 |
) |
|
|
(654 |
) |
|
|
(1,067 |
) |
Purchase of |
|
— |
|
|
|
— |
|
|
|
(84,780 |
) |
|
|
— |
|
Taxes paid in lieu of share issuance |
|
— |
|
|
|
— |
|
|
|
(770 |
) |
|
|
(998 |
) |
Proceeds from options exercised |
|
10 |
|
|
|
4 |
|
|
|
17 |
|
|
|
153 |
|
Dividends paid |
|
(6,533 |
) |
|
|
(6,476 |
) |
|
|
(19,932 |
) |
|
|
(19,418 |
) |
Net cash used in financing activities |
|
(44,523 |
) |
|
|
(6,835 |
) |
|
|
(9,119 |
) |
|
|
(69,339 |
) |
|
|
|
|
|
|
|
|
||||||||
Effect of exchange rate changes on cash and cash equivalents |
|
(12,652 |
) |
|
|
(4,113 |
) |
|
|
(30,910 |
) |
|
|
(2,111 |
) |
|
|
|
|
|
|
|
|
||||||||
(Decrease)/increase in cash and cash equivalents |
|
(44,388 |
) |
|
|
32,887 |
|
|
|
(25,554 |
) |
|
|
44,901 |
|
Cash and cash equivalents at beginning of period |
|
320,870 |
|
|
|
253,330 |
|
|
|
302,036 |
|
|
|
241,316 |
|
Cash and cash equivalents at end of period |
$ |
276,482 |
|
|
$ |
286,217 |
|
|
$ |
276,482 |
|
|
$ |
286,217 |
|
The following table presents the reconciliation of Net sales to net sales excluding the effect of changes in currency translation rates, a non-GAAP measure:
(in thousands, except percentages) |
Net sales as reported, Q3 2022 |
Decrease due to changes in currency translation rates |
Q3 2022 sales on same basis as Q3 2021 currency translation rates |
Net sales as reported, Q3 2021 |
% Change compared to Q3 2021, excluding currency rate effects |
||||||
Machine Clothing |
$ |
153,389 |
$ |
(6,570 |
) |
$ |
159,959 |
$ |
154,171 |
3.8 |
% |
|
|
107,174 |
|
(3,637 |
) |
|
110,811 |
|
78,271 |
41.6 |
% |
Consolidated total |
$ |
260,563 |
$ |
(10,207 |
) |
$ |
270,770 |
$ |
232,442 |
16.5 |
% |
|
|
|
|
|
|
||||||
(in thousands, except percentages) |
Net sales as reported, YTD 2022 |
Decrease due to changes in currency translation rates |
YTD 2022 sales on same basis as 2021 currency translation rates |
Net sales as reported, YTD 2021 |
% Change compared to 2021, excluding currency rate effects |
||||||
Machine Clothing |
$ |
459,121 |
$ |
(14,545 |
) |
$ |
473,666 |
$ |
462,298 |
2.5 |
% |
|
|
306,980 |
|
(5,631 |
) |
|
312,611 |
|
227,024 |
37.7 |
% |
Consolidated total |
$ |
766,101 |
$ |
(20,176 |
) |
$ |
786,277 |
$ |
689,322 |
14.1 |
% |
The following table presents Gross profit and Gross profit margin:
(in thousands, except percentages) |
Gross profit, Q3 2022 |
Gross profit margin, Q3 2022 |
Gross profit, Q3 2021 |
Gross profit margin, Q3 2021 |
||||
Machine Clothing |
$ |
79,232 |
51.7 |
% |
$ |
79,437 |
51.5 |
% |
|
|
21,261 |
19.8 |
% |
|
12,605 |
16.1 |
% |
Consolidated total |
$ |
100,493 |
38.6 |
% |
$ |
92,042 |
39.6 |
% |
(in thousands, except percentages) |
Gross profit, YTD 2022 |
Gross profit margin, YTD 2022 |
Gross profit, YTD 2021 |
Gross profit margin, YTD 2021 |
||||
Machine Clothing |
$ |
237,434 |
51.7 |
% |
$ |
240,427 |
52.0 |
% |
|
|
55,256 |
18.0 |
% |
|
41,889 |
18.5 |
% |
Consolidated total |
$ |
292,690 |
38.2 |
% |
$ |
282,316 |
41.0 |
% |
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 |
||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
|
||||||||
Net income/(loss) (GAAP) |
$ |
57,247 |
|
$ |
9,958 |
|
$ |
(56,382 |
) |
$ |
10,823 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
3,794 |
|
|
3,794 |
|
Income tax expense/(benefit) |
|
— |
|
|
— |
|
|
(3,183 |
) |
|
(3,183 |
) |
Depreciation and amortization expense |
|
4,913 |
|
|
11,303 |
|
|
818 |
|
|
17,034 |
|
EBITDA (non-GAAP) |
|
62,160 |
|
|
21,261 |
|
|
(54,953 |
) |
|
28,468 |
|
Restructuring expenses, net |
|
42 |
|
|
— |
|
|
— |
|
|
42 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(2,931 |
) |
|
122 |
|
|
(6,633 |
) |
|
(9,442 |
) |
Dissolution of business relationships in |
|
(214 |
) |
|
— |
|
|
— |
|
|
(214 |
) |
Pension settlement expense |
|
— |
|
|
— |
|
|
49,128 |
|
|
49,128 |
|
Acquisition/integration costs |
|
— |
|
|
255 |
|
|
— |
|
|
255 |
|
Pre-tax (income) attributable to noncontrolling interest |
|
— |
|
|
(176 |
) |
|
— |
|
|
(176 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
59,057 |
|
$ |
21,462 |
|
$ |
(12,458 |
) |
$ |
68,061 |
|
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales) (non-GAAP) |
|
38.5 |
% |
|
20.0 |
% |
|
— |
|
|
26.1 |
% |
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Three months ended |
||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
|
||||||||
Net income/(loss) (GAAP) |
$ |
55,467 |
|
$ |
2,917 |
|
$ |
(27,442 |
) |
$ |
30,942 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
3,734 |
|
|
3,734 |
|
Income tax expense |
|
— |
|
|
— |
|
|
12,889 |
|
|
12,889 |
|
Depreciation and amortization expense |
|
5,014 |
|
|
12,265 |
|
|
935 |
|
|
18,214 |
|
EBITDA (non-GAAP) |
|
60,481 |
|
|
15,182 |
|
|
(9,884 |
) |
|
65,779 |
|
Restructuring expenses, net |
|
251 |
|
|
(81 |
) |
|
17 |
|
|
187 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(1,571 |
) |
|
31 |
|
|
472 |
|
|
(1,068 |
) |
AMJP grant |
|
— |
|
|
963 |
|
|
(5,832 |
) |
|
(4,869 |
) |
Acquisition/integration costs |
|
— |
|
|
297 |
|
|
— |
|
|
297 |
|
Pre-tax (income) attributable to noncontrolling interest |
|
— |
|
|
(95 |
) |
|
— |
|
|
(95 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
59,161 |
|
$ |
16,297 |
|
$ |
(15,227 |
) |
$ |
60,231 |
|
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales) (non-GAAP) |
|
38.4 |
% |
|
20.8 |
% |
|
— |
|
|
25.9 |
% |
Nine months ended |
||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
|
||||||||
Net income/(loss) (GAAP) |
$ |
161,752 |
|
$ |
20,688 |
|
$ |
(104,173 |
) |
$ |
78,267 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
11,336 |
|
|
11,336 |
|
Income tax expense |
|
— |
|
|
— |
|
|
22,273 |
|
|
22,273 |
|
Depreciation and amortization expense |
|
14,716 |
|
|
34,792 |
|
|
2,400 |
|
|
51,908 |
|
EBITDA (non-GAAP) |
|
176,468 |
|
|
55,480 |
|
|
(68,164 |
) |
|
163,784 |
|
Restructuring expenses, net |
|
255 |
|
|
— |
|
|
13 |
|
|
268 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(3,690 |
) |
|
755 |
|
|
(17,644 |
) |
|
(20,579 |
) |
Dissolution of business relationships in |
|
1,573 |
|
|
— |
|
|
781 |
|
|
2,354 |
|
Pension settlement expense |
|
— |
|
|
— |
|
|
49,128 |
|
|
49,128 |
|
Acquisition/integration costs |
|
— |
|
|
806 |
|
|
— |
|
|
806 |
|
Pre-tax (income) attributable to noncontrolling interest |
|
— |
|
|
(633 |
) |
|
— |
|
|
(633 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
174,606 |
|
$ |
56,408 |
|
$ |
(35,886 |
) |
$ |
195,128 |
|
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP) |
|
38.0 |
% |
|
18.4 |
% |
|
— |
|
|
25.5 |
% |
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Nine months ended |
||||||||||||
(in thousands) |
Machine Clothing |
Albany Engineered Composites |
Corporate expenses and other |
|
||||||||
Net income/(loss) (GAAP) |
$ |
161,731 |
|
$ |
13,019 |
|
$ |
(84,758 |
) |
$ |
89,992 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
11,521 |
|
|
11,521 |
|
Income tax expense |
|
— |
|
|
— |
|
|
36,375 |
|
|
36,375 |
|
Depreciation and amortization expense |
|
15,272 |
|
|
37,326 |
|
|
2,749 |
|
|
55,347 |
|
EBITDA (non-GAAP) |
|
177,003 |
|
|
50,345 |
|
|
(34,113 |
) |
|
193,235 |
|
Restructuring expenses, net |
|
193 |
|
|
(40 |
) |
|
77 |
|
|
230 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(156 |
) |
|
363 |
|
|
813 |
|
|
1,020 |
|
AMJP grant |
|
— |
|
|
963 |
|
|
(5,832 |
) |
|
(4,869 |
) |
Acquisition/integration costs |
|
— |
|
|
911 |
|
|
— |
|
|
911 |
|
Pre-tax (income) attributable to noncontrolling interest |
|
— |
|
|
(206 |
) |
|
— |
|
|
(206 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
177,040 |
|
$ |
52,336 |
|
$ |
(39,055 |
) |
$ |
190,321 |
|
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP) |
|
38.3 |
% |
|
23.1 |
% |
|
— |
|
|
27.6 |
% |
Per share impact of the adjustments to earnings per share are as follows:
Three months ended (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||
Restructuring expenses, net |
$ |
42 |
|
$ |
6 |
|
$ |
36 |
|
$ |
0.00 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(9,442 |
) |
|
(2,694 |
) |
|
(6,748 |
) |
|
(0.22 |
) |
Dissolution of business relationships in |
|
(214 |
) |
|
(18 |
) |
|
(196 |
) |
|
(0.01 |
) |
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 |
) |
Acquisition/integration costs |
|
255 |
|
|
77 |
|
|
178 |
|
|
0.01 |
|
|
|
|
|
|
||||||||
Three months ended (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||
Restructuring expenses, net |
$ |
187 |
|
$ |
55 |
|
$ |
132 |
|
$ |
0.00 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(1,068 |
) |
|
(314 |
) |
|
(754 |
) |
|
(0.02 |
) |
AMJP grant |
|
(4,869 |
) |
|
(1,446 |
) |
|
(3,423 |
) |
|
(0.11 |
) |
Acquisition/integration costs |
|
297 |
|
|
89 |
|
|
208 |
|
|
0.01 |
|
|
|
|
|
|
||||||||
Nine months ended (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||
Restructuring expenses, net |
$ |
268 |
|
$ |
75 |
|
$ |
193 |
|
$ |
0.01 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(20,579 |
) |
|
(5,829 |
) |
|
(14,750 |
) |
|
(0.47 |
) |
Dissolution of business relationships in |
|
2,354 |
|
|
314 |
|
|
2,040 |
|
|
0.06 |
|
Pension settlement expense |
|
49,128 |
|
|
11,947 |
|
|
37,181 |
|
|
1.20 |
|
Tax impact of stranded OCI benefit from TCJA for pension liability (b) |
|
— |
|
|
5,217 |
|
|
(5,217 |
) |
|
(0.17 |
) |
Acquisition/integration costs |
|
806 |
|
|
241 |
|
|
565 |
|
|
0.03 |
|
|
|
|
|
|
||||||||
Nine months ended (in thousands, except per share amounts) |
Pre tax Amounts |
Tax Effect |
After tax Effect |
Per share Effect |
||||||||
Restructuring expenses, net |
$ |
230 |
|
$ |
67 |
|
$ |
163 |
|
$ |
0.00 |
|
Foreign currency revaluation (gains)/losses (a) |
|
1,020 |
|
|
332 |
|
|
688 |
|
|
0.02 |
|
AMJP grant |
|
(4,869 |
) |
|
(1,446 |
) |
|
(3,423 |
) |
|
(0.11 |
) |
Acquisition/integration costs |
|
911 |
|
|
273 |
|
|
638 |
|
|
0.03 |
|
|
|
|
|
|
The following table provides a reconciliation of Earnings per share to Adjusted Earnings per share:
|
Three months ended |
Nine months ended |
||||||||||
Per share amounts (Basic) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Earnings per share (GAAP) |
$ |
0.34 |
|
$ |
0.95 |
|
$ |
2.47 |
|
$ |
2.78 |
|
Adjustments, after tax: |
|
|
|
|
||||||||
Restructuring expenses, net |
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
Foreign currency revaluation (gains)/losses (a) |
|
(0.22 |
) |
|
(0.02 |
) |
|
(0.47 |
) |
|
0.02 |
|
Dissolution of business relationships in |
|
(0.01 |
) |
|
— |
|
|
0.06 |
|
|
— |
|
Pension settlement charge |
|
1.20 |
|
|
— |
|
|
1.20 |
|
|
— |
|
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b) |
|
(0.17 |
) |
|
— |
|
|
(0.17 |
) |
|
— |
|
AMJP grant |
|
— |
|
|
(0.11 |
) |
|
— |
|
|
(0.11 |
) |
Acquisition/ integration costs |
|
0.01 |
|
|
0.01 |
|
|
0.03 |
|
|
0.03 |
|
Adjusted Earnings per share (non-GAAP) |
$ |
1.15 |
|
$ |
0.83 |
|
$ |
3.13 |
|
$ |
2.72 |
|
(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
The calculations of net debt are as follows:
(in thousands) |
|
|
|
|
||||
Current maturities of long-term debt |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
Long-term debt |
|
447,000 |
|
485,000 |
|
427,000 |
|
350,000 |
Total debt |
|
447,000 |
|
485,000 |
|
427,000 |
|
350,000 |
Cash and cash equivalents |
|
276,482 |
|
320,870 |
|
307,415 |
|
302,036 |
Net debt (non-GAAP) |
$ |
170,518 |
$ |
164,130 |
$ |
119,585 |
$ |
47,964 |
|
|
|
|
|
The calculation of net leverage ratio as of
|
||||||||||||
|
Twelve months ended |
Nine months ended |
Trailing twelve months ended |
|||||||||
(in thousands) |
|
|
|
|
||||||||
Net income/(loss) (GAAP) |
$ |
118,768 |
|
$ |
89,992 |
|
$ |
78,267 |
|
$ |
107,043 |
|
Interest expense, net |
|
14,891 |
|
|
11,521 |
|
|
11,336 |
|
|
14,706 |
|
Income tax expense |
|
47,163 |
|
|
36,375 |
|
|
22,273 |
|
|
33,061 |
|
Depreciation and amortization expense |
|
74,255 |
|
|
55,347 |
|
|
51,908 |
|
|
70,816 |
|
EBITDA (non-GAAP) |
|
255,077 |
|
|
193,235 |
|
|
163,784 |
|
|
225,626 |
|
Restructuring expenses, net |
|
1,331 |
|
|
230 |
|
|
268 |
|
|
1,369 |
|
Foreign currency revaluation (gains)/losses (a) |
|
(1,442 |
) |
|
1,020 |
|
|
(20,579 |
) |
|
(23,041 |
) |
Aviation Manufacturing Job Protection (AMJP) grant |
|
(4,731 |
) |
|
(4,869 |
) |
|
— |
|
|
138 |
|
Dissolution of business relationships in |
|
— |
|
|
— |
|
|
2,354 |
|
|
2,354 |
|
Pension settlement expense |
|
— |
|
|
— |
|
|
49,128 |
|
|
49,128 |
|
Acquisition/integration costs |
|
1,166 |
|
|
911 |
|
|
806 |
|
|
1,061 |
|
Pre-tax (income) attributable to noncontrolling interest |
|
(510 |
) |
|
(206 |
) |
|
(633 |
) |
|
(937 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
250,891 |
|
$ |
190,321 |
|
$ |
195,128 |
|
$ |
255,698 |
|
(in thousands, except for net leverage ratio) |
|
|
Net debt (non-GAAP) |
$ |
170,518 |
Trailing twelve months Adjusted EBITDA (non-GAAP) |
|
255,698 |
Net leverage ratio (non-GAAP) |
|
0.67 |
|
|
(c) Calculated as amounts incurred during the twelve months ended |
The tables below provide a reconciliation of forecasted full-year 2022 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:
Forecast of Full Year 2022 Adjusted EBITDA |
Machine Clothing |
|
AEC |
||||||||||
(in millions) |
Low |
High |
|
Low |
High |
||||||||
Net income attributable to the Company (GAAP) (d) |
$ |
198 |
|
$ |
207 |
|
|
$ |
27 |
|
$ |
31 |
|
Income attributable to the noncontrolling interest |
|
— |
|
|
— |
|
|
|
1 |
|
|
1 |
|
Interest expense, net |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Income tax expense |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Depreciation and amortization |
|
19 |
|
|
20 |
|
|
|
46 |
|
|
47 |
|
EBITDA (non-GAAP) |
|
217 |
|
|
227 |
|
|
|
74 |
|
|
79 |
|
Restructuring expenses, net (e) |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Foreign currency revaluation (gains)/losses (e) |
|
(4 |
) |
|
(4 |
) |
|
|
1 |
|
|
1 |
|
Acquisition/integration costs (e) |
|
— |
|
|
— |
|
|
|
1 |
|
|
1 |
|
Dissolution of business relationships in |
|
2 |
|
|
2 |
|
|
|
— |
|
|
— |
|
Pre-tax (income)/loss attributable to non-controlling interest |
|
— |
|
|
— |
|
|
|
(1 |
) |
|
(1 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
215 |
|
$ |
225 |
|
|
$ |
75 |
|
$ |
80 |
|
(d) Interest, Other income/expense and Income taxes are not allocated to the business segments |
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
Forecast of Full Year 2022 Adjusted EBITDA |
|
|
|
|
|||||||||
(in millions) |
Low |
High |
|
|
|
||||||||
Net income attributable to the Company (GAAP) |
$ |
90 |
|
$ |
99 |
|
|
|
|
||||
Income attributable to the noncontrolling interest |
|
1 |
|
|
1 |
|
|
|
|
||||
Interest expense, net |
|
15 |
|
|
16 |
|
|
|
|
||||
Income tax expense |
|
33 |
|
|
37 |
|
|
|
|
||||
Depreciation and amortization |
|
71 |
|
|
72 |
|
|
|
|
||||
EBITDA (non-GAAP) |
|
210 |
|
|
225 |
|
|
|
|
||||
Restructuring expenses, net (e) |
|
— |
|
|
— |
|
|
|
|
||||
Foreign currency revaluation (gains)/losses (e) |
|
(21 |
) |
|
(21 |
) |
|
|
|
||||
Acquisition/integration costs (e) |
|
1 |
|
|
1 |
|
|
|
|
||||
Pension settlement expense |
|
49 |
|
|
49 |
|
|
|
|
||||
Dissolution of business relationships in |
|
2 |
|
|
2 |
|
|
|
|
||||
Pre-tax (income)/loss attributable to non-controlling interest |
|
(1 |
) |
|
(1 |
) |
|
|
|
||||
Adjusted EBITDA (non-GAAP) |
$ |
240 |
|
$ |
255 |
|
|
||||||
|
|
|
|
|
|
||||||||
|
|
|
|
|
|||||||||
Forecast of Full Year 2022 Earnings per share (basic) (f) |
Low |
High |
|
|
|
||||||||
Net income attributable to the Company (GAAP) |
$ |
2.84 |
|
$ |
3.14 |
|
|
|
|
||||
Restructuring expenses, net (e) |
|
0.01 |
|
|
0.01 |
|
|
|
|
||||
Foreign currency revaluation (gains)/losses (e) |
|
(0.47 |
) |
|
(0.47 |
) |
|
|
|
||||
Dissolution of business relationships in |
|
0.06 |
|
|
0.06 |
|
|
|
|
||||
Pension settlement expense |
|
1.20 |
|
|
1.20 |
|
|
|
|
||||
Tax impact of stranded OCI benefit from TCJA for pension liability |
|
(0.17 |
) |
|
(0.17 |
) |
|
|
|
||||
Acquisition/integration costs (e) |
|
0.03 |
|
|
0.03 |
|
|
|
|
||||
Adjusted Earnings per share (non-GAAP) |
$ |
3.50 |
|
$ |
3.80 |
|
|
|
|
||||
|
|
|
|
|
|
||||||||
(e) Due to the uncertainty of these items, we are unable to forecast these items for 2022 |
|||||||||||||
(f) Calculations based on weighted average shares outstanding estimate of approximately 31.5 million |
About
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 sales and percent change in net sales, excluding the impact of currency translation effects ; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted 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 sales and change in Net sales, after currency effects are excluded, provides management and investors insight into underlying sales trends. Net sales, or percent changes in net sales, excluding currency rate effects, are calculated by converting amounts reported in local currencies into
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 sales.
The Company defines Adjusted EPS as basic 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
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, the ongoing COVID-19 pandemic and the
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221024005726/en/
603-330-5897
john.hobbs@albint.com
Source:
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