Second-Quarter Financial Highlights
- The Company completed the acquisition
of Harris Corporation’s composite aerostructures division. Key
financial metrics of the acquired business are noted in Table
1.
- Net sales were $203.2 million, an
increase of 17.9% compared to Q2 2015. The acquired business
increased net sales by 14.9%. Changes in currency translation rates
had minimal effect on sales when compared to Q2 2015 (see Table
2).
- Q2 2016 net income attributable to the
Company was $10.4 million ($0.32 per share), compared to a $2.2
million loss ($0.07 per share) in Q2 2015. Net income attributable
to the Company, excluding adjustments (a non-GAAP measure) was
$0.48 per share, compared to $0.01 in Q2 2015 (see Table 16).
- Adjusted EBITDA (a non-GAAP measure)
was $46.6 million, compared to $18.8 million in Q2 2015 (see Tables
7 and 8). Results for the second quarter of 2015 included a charge
of $14.0 million ($0.28 per share – see Table 13) for a revision in
the estimated profitability of a long-term AEC contract
(BR725).
Albany International Corp. (NYSE:AIN) reported that Q2 2016 net
income attributable to the Company was $10.4 million, compared to a
net loss of $2.2 million in Q2 2015.
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Q2 2016 income before income taxes was $16.2 million, including
restructuring charges of $6.6 million, $3.8 million of acquisition
expenses, and gains of $1.9 million from foreign currency
revaluation. Q2 2015 income before income taxes was a loss of $2.5
million, including a $14.0 million charge for a revision in the
estimated profitability of the BR725 contract, restructuring
charges of $1.2 million, and losses of $2.3 million from foreign
currency revaluation.
In the second quarter of 2016, the Company completed the
acquisition of Harris Corporation’s composite aerostructures
division. Table 1 summarizes key financial metrics of the acquired
business which are included in the AEC segment.
Table 1
(in thousands, excluding percentages)
For the periodApril 8, 2016 toJune 30,
2016
Net sales $25,636 Gross profit
4,972 Gross profit percentage
19.4% Selling, technical, general and research
expenses $3,263 Operating income
1,709 Depreciation and amortization
2,903 Interest expense, net
443 Income before income taxes
1,266 Net income 760 EBITDA
4,612 Adjusted EBITDA
4,612
Table 2 summarizes net sales and the effect of changes in
currency translation rates:
Table 2
Net SalesThree Months endedJune 30,
PercentChange
Impact ofChangesin CurrencyTranslation
Rates
Percent ChangeexcludingCurrency
RateEffect
(in thousands, excluding percentages)
2016
2015
Machine Clothing (MC)
$148,934 $150,561 -1.1%
($246) -0.9% Albany
Engineered Composites (AEC) 54,256
21,728 149.7%
91 149.3% Total
$203,190 $172,289 17.9%
($155) 18.0%
Compared to the second quarter of 2015, MC net sales were stable
in every major region and grade. AEC net sales increased $32.5
million, $25.6 million of which was due to the acquired business.
AEC Q2 2016 net sales included approximately $7.0 million for
development tooling reimbursable from customers, principally from
the acquired business.
Q2 2016 gross profit was $78.3 million, or 38.5% of net sales,
compared to $54.6 million, or 31.7% of net sales, in the same
period of 2015. Q2 2016 MC gross profit was $70.9 million, compared
to $68.1 million in Q2 2015. MC gross profit margin improved to
47.6% in Q2 2016, compared to 45.2% in Q2 2015. The improvement
reflects strong capacity utilization, lower raw materials costs,
and the impact of productivity and restructuring activities
discussed in previous quarters. AEC gross profit increased to $7.7
million in Q2 2016, compared to a loss of $13.1 million, which
included the $14.0 million BR725 charge. Of the improvement, nearly
$5 million is attributable to the acquired business.
Q2 2016 selling, technical, general, and research (STG&R)
expenses were $53.8 million, or 26.5% of net sales, including gains
of $0.3 million from the revaluation of nonfunctional-currency
assets and liabilities, and $3.8 million of expenses related to the
acquisition. STG&R expenses were $50.3 million, or 29.2% of net
sales, in the second quarter of 2015, including losses of $0.4
million from the revaluation of nonfunctional-currency assets and
liabilities.
The following table presents second-quarter expenses associated
with internally funded research and development by segment:
Table 3
Research and developmentexpenses by
segmentThree Months endedJune 30,
(in thousands)
2016
2015
Machine Clothing $ 4,420
$ 4,779 Albany Engineered Composites
2,911 2,905 Corporate expenses
- 190 Total
$ 7,331 $ 7,874
The following table summarizes second-quarter operating income
by segment:
Table 4
Operating Income/(loss)Three Months
endedJune 30,
(in thousands)
2016
2015
Machine Clothing
$35,405
$33,323
Albany Engineered Composites (5,848)
(18,633)* Corporate expenses
(11,700) (11,652) Total
$17,857 $3,038
*Includes $14.0 million BR725 charge
Segment operating income was affected by restructuring, currency
revaluation, acquisition costs, and the BR725 charge, as shown in
Table 5 below. MC restructuring charges in Q2 2016 were principally
related to ongoing plant closure costs in Germany and the
previously reported planned cessation of research and development
activities at one of the Company’s production facilities in France.
AEC restructuring charges were related to the consolidation of the
Company’s legacy programs into its Boerne, Texas facility.
Table 5
(in thousands)
Expenses/(gain) in Q2 2016resulting
from
Expenses/(gain) in Q2 2015resulting
from
Restructuring
Currencyrevaluation
Acquisitionexpenses
Restructuring
Currencyrevaluation
BR725 Charge
MC $ 5,434 ($330 )
$ - $ 1,211
$ 394 $ - AEC
1,147 (1 ) 3,771
- 1
14,000 Corporate expenses
67 -
- - 2
- Total $ 6,648
($331 ) $ 3,771
$ 1,211 $ 397
$ 14,000
Q2 2016 Other income/expense, net, was income of $2.0 million,
including income related to the revaluation of
nonfunctional-currency balances of $1.6 million. Q2 2015 Other
income/expense, net, was expense of $2.8 million, including losses
related to the revaluation of nonfunctional-currency balances of
$1.9 million.
The following table summarizes currency revaluation effects on
certain financial metrics:
Table 6
Income/(loss) attributableto currency
revaluationThree Months endedJune 30,
(in thousands)
2016
2015
Operating income $ 331
($397 ) Other income/(expense), net
1,571 (1,878 ) Total
$ 1,902 ($2,275 )
The Company’s income tax rate based on income from continuing
operations was 38.7% for Q2 2016, compared to 43.5% for the same
period of 2015. The higher tax rate in Q2 2015 was due primarily to
the impact of restructuring charges incurred in jurisdictions in
which the Company was unable to record a related tax benefit.
Discrete tax charges and the effect of a change in the estimated
tax rate decreased income tax expense by $0.2 million in 2016 and
increased expense by $0.7 million in 2015.
The following tables provide a reconciliation of net income to
EBITDA and Adjusted EBITDA:
Table 7
Three Months ended June 30,
2016
(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Net income (GAAP) $ 35,405
($5,848 ) ($19,456 )
$ 10,101 Interest expense, net
- -
3,691 3,691
Income tax expense -
- 6,082
6,082 Depreciation and
amortization 9,496
6,354 2,109
17,959
EBITDA (non-GAAP)
44,901
506 (7,574
) 37,833
Restructuring expenses, net 5,434
1,147
67 6,648 Foreign
currency revaluation (gains)/losses
(330 ) (1 ) (1,571
) (1,902 ) Acquisition expenses
- 3,771
-
3,771 Pretax loss attributable to non-controlling interest
in ASC -
276 -
276
Adjusted EBITDA (non-GAAP)
$ 50,005
$ 5,699 ($9,078
) $ 46,626
Table 8
Three Months ended June 30,
2015
(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Net income/(loss) (GAAP) $ 33,323
($18,633)* ($16,810 )
($2,120 ) Interest expense, net
- -
2,702 2,702 Income tax
expense/(benefit) -
- (364 )
(364 ) Depreciation and amortization
10,212 2,869
2,103 15,184
EBITDA (non-GAAP) 43,535
(15,764 )
(12,369 ) 15,402
Restructuring expenses, net
1,211 - -
1,211 Foreign currency
revaluation (gains)/losses 394
1 1,880
2,275 Pretax income attributable to
non-controlling interest in ASC -
(64 ) -
(64 )
Adjusted EBITDA (non-GAAP)
$ 45,140
($15,827 ) ($10,489
) $ 18,824
* Includes $14.0 million BR725 charge
Capital spending was $20.0 million for Q2 2016, compared to
$18.8 million for Q2 2015. Depreciation and amortization was $18.0
million for Q2 2016, compared to $15.1 million for Q2 2015. As
noted in Table 1, depreciation and amortization for the acquired
division was $2.9 million in Q2, 2016.
CFO Comments
CFO and Treasurer John Cozzolino commented, “With the completion
of the aerostructures acquisition in April, total debt increased
$231 million to $486 million as of the end of the second quarter,
with net debt (total debt less cash) increasing $224 million to
$310 million. The Company utilized its new $550 million, five-year
revolving credit facility to fund the $187 million cash payable at
closing for the acquisition, as well as about $5 million of
acquisition-related expenditures that were paid in the second
quarter. Up-front fees of about $2 million were paid during the
quarter to establish the new credit facility. Total debt also
includes a $24 million capital lease that was assumed as part of
the acquisition and relates to a manufacturing plant in Salt Lake
City, Utah.
“As of the end of the second quarter, the Company had utilized
$412 million of the $550 million credit facility, leaving
additional borrowing capacity of $138 million. In addition to that
capacity, total cash as of the end of the quarter was $176 million.
The Company’s leverage ratio, as defined in our primary debt
agreements, was 2.31 as of the end of the quarter. In May, the
Company entered into new five-year interest rate swaps that
effectively fix the LIBOR portion of $300 million of our total debt
at 1.245% through March 2021 (which, including our current spread
of 1.50%, results in an effective rate of 2.745%). All existing
swaps that were in place at the time the new swaps were executed
were closed out for cash payments by the Company that totaled about
$5 million.
“Capital expenditures in Q2 were $20 million and year-to-date,
$31 million. We estimate full-year spending in 2016 to be $75
million to $85 million. Cash paid for income taxes was about $5
million in Q2 and $14 million year-to-date. We estimate cash taxes
for the full year to range from $18 million to $22 million.”
CEO Comments
President and CEO Joe Morone said, “Q2 2016 was another good
quarter for Albany International. Including our new composites
division, net sales grew by 18% compared to Q2 2015, while net
income improved to $10.1 million from a loss of $2.1 million.
Second-quarter Adjusted EBITDA was $46.6 million in 2016 compared
to $18.8 million in 2015, which included the $14 million charge for
BR725.
“Both businesses again performed well, as MC continued to
generate strong profit margins and AEC strong sales growth; each
remains firmly on track toward its near- and long- term
objectives.
“Turning first to MC, net sales were essentially flat compared
to Q2 2015 – in the aggregate, and in each major region and grade.
We had expected Q2 2016 net sales to be somewhat stronger than Q2
2015, but the expected growth was held back by slowdowns and
tighter inventory controls by leading papermakers in the packaging
grades in the US, Brazil, and China. Nonetheless, driven by new
product technology and strong field services, MC continues to
perform well in each major region, particularly in the growth
grades, which once again accounted for 75% of net sales.
“Ordinarily, we would expect MC profit margins to decline in Q2
as a result of annual salary inflation. But margins held at Q1
levels due to unusually strong capacity utilization in Q2, coupled
with the lower materials costs, restructuring actions, and
productivity improvements discussed in previous quarters. As a
result, even though Q2 2016 sales were flat compared to Q2 2015,
net income improved by 6% and Adjusted EBITDA by 11%.
“AEC’s Q2 results include an essentially full quarter of
performance of the newly acquired aerostructures division, which as
shown in Table 1, had a significant, positive impact on
performance. Without the acquisition, sales for AEC would have been
$29 million, compared to $22 million in Q2 2015, driven by growth
in LEAP sales. With the acquisition, sales were $54 million for the
quarter. Net income for the segment was a net loss of $5.8 million,
which includes acquisition expenses and costs associated with the
previously described restructuring programs. Adjusted EBITDA, which
excludes these factors as well as the non-controlling interest in
ASC, was $5.7 million or roughly 10% of sales.
“It is important to note that $7 million of the total sales in
the quarter were the result of development tooling reimbursable
from customers. Of the remaining sales, LEAP accounted for about
33%, airframe components for Joint Strike Fighter (JSF) about 16%,
and the next largest programs—Forward Fuselage Frames for the
Boeing 787, bodies for Lockheed Martin standoff air-to-surface
missiles, components for the LiftFan® of the JSF-B, and waste tanks
for Boeing aircraft—each accounted for roughly 5%.
“At the recent Farnborough Air Show, there were several
developments of relevance to AEC. Orders for 400 more LEAP engines
were announced, bringing the total orders to over 11,100 engines,
and reinforcing once again that in the narrowbody market, there are
no indications of market weakness. The market pressure on suppliers
to the LEAP engine, like AEC, continues to be for more volume,
sooner. Also of significant note at the Farnborough Air Show was a
flight of the JSF-B, and dramatic demonstration of the capabilities
of its LiftFan. And, in multiple forums before and during the air
show, Boeing made clear that it is seriously considering a new
middle-of-market aircraft for possible entry into service mid-next
decade.
“We continue to be encouraged by new business development
activity on multiple fronts, but the primary focus in AEC is on
execution, and in particular, on the integration of the new
division, enhancement of its operational capabilities, and the
successful ramp-up of our key growth programs. Integration is on
track, and during Q2, we made good progress on the ramp-ups for
LEAP, Boeing Forward Fuselage Frames, and JSF.
“Turning to our outlook, for MC, given the strength of its
performance in the first half of the year and assuming a stable
currency and macroeconomic environment, we now expect full-year
Adjusted EBITDA to be at the upper-end of our previously discussed
range of $180 million to $195 million (see Table 18 for
reconciliation to GAAP segment net income, including identification
of certain items that cannot reasonably be predicted). Barring any
additional significant slowdowns in the paper industry, sales for
the remainder of the year should remain stable. Because of normal
seasonal effects during the summer and at the end of the year, we
expect capacity utilization and margins to come off their
first-half peaks, and second-half Adjusted EBITDA to therefore lag
somewhat behind the first half of the year.
“As for our outlook for AEC, while net sales tend to fluctuate
significantly in this business from quarter to quarter, we expect
average quarterly net sales of close to $50 million in the second
half of the year with gross profit margins roughly comparable to
Q2. We also expect $1 million to $2 million of integration costs
associated with the acquisition in the second half of 2016.
"The risk to this outlook for AEC continues to be
execution-based. Successful completion of the integration of the
acquired division, enhancement of its operational capabilities, and
ramp-up of the key growth programs, will drive near-term
performance in this business.
“In sum, Q2 2016 was another good quarter, highlighted by
continued strong profitability in MC, and accelerating growth in
AEC, driven by LEAP and the acquisition. Both businesses remain on
track for their near- and long-term goals.”
The Company plans a webcast to discuss first-quarter financial
results on Tuesday, August 2, at 9:00 a.m. Eastern Time. For
access, go to www.albint.com.
About Albany International Corp.
Albany International is a global advanced textiles and materials
processing company, with two core businesses. Machine Clothing is
the world’s leading producer of custom-designed fabrics and belts
essential to production in the paper, nonwovens, and other process
industries. Albany Engineered Composites is a rapidly-growing
supplier of highly-engineered composite parts for the aerospace
industry. Albany International is headquartered in Rochester, New
Hampshire, operates 22 plants in 10 countries, employs 4,400 people
worldwide, and is listed on the New York Stock Exchange (Symbol
AIN). Additional information about the Company and its products and
services can be found at www.albint.com.
This release contains certain non-GAAP metrics, including:
percent change in net sales excluding currency rate effects (for
each segment and the Company as a whole); EBITDA and Adjusted
EBITDA (for each segment and the Company as a whole); net debt; and
net income per share attributable to the Company, excluding
adjustments. Such items are provided because management believes
that, when reconciled from the GAAP items to which they relate,
they provide additional useful information to investors regarding
the Company’s operational performance.
Presenting increases or decreases in sales, after currency
effects are excluded, can give management and investors insight
into underlying sales trends. EBITDA, or net income with interest,
taxes, depreciation, and amortization added back, is a common
indicator of financial performance used, among other things, to
analyze and compare core profitability between companies and
industries because it eliminates effects due to differences in
financing, asset bases and taxes. An understanding of the impact in
a particular quarter of specific restructuring costs, acquisition
expenses, currency revaluation, or other gains and losses, on net
income (absolute as well as on a per-share basis), operating income
or EBITDA can give management and investors additional insight into
core financial performance, especially when compared to quarters in
which such items had a greater or lesser effect, or no effect.
Restructuring expenses in the MC segment, while frequent in recent
years, are reflective of significant reductions in manufacturing
capacity and associated headcount in response to shifting markets,
and not of the profitability of the business going forward as
restructured. Net debt is, in the opinion of the Company, helpful
to investors wishing to understand what the Company’s debt position
would be if all available cash were applied to pay down
indebtedness. EBITDA, Adjusted EBITDA and net income per share,
excluding adjustments, are performance measures that relate to the
Company’s continuing operations.
Percent changes in net sales, excluding currency rate effects,
is calculated by converting amounts reported in local currencies
into U.S. dollars at the exchange rate of a prior period. That
amount is then compared to the U.S. dollar amount reported in the
current period. The Company calculates EBITDA by removing the
following from Net income: Interest expense net, Income tax
expense, and Depreciation and amortization. Adjusted EBITDA is
calculated by: adding to EBITDA costs associated with restructuring
and pension settlement charges; adding (or subtracting) revaluation
losses (or gains); subtracting (or adding) gains (or losses) from
the sale of buildings or investments; subtracting insurance
recovery gains; subtracting (or adding) Income (or loss)
attributable to the non-controlling interest in Albany Safran
Composites (ASC); and adding expenses related to the Company’s
acquisition of Harris Corporation’s composite aerostructures
division. Net income per share, 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, excluding
adjustments, as defined by the Company, may not be similar to
EBITDA measures of other companies. Such measures are not
considered measurements under GAAP, and should be considered in
addition to, but not as substitutes for, the information contained
in the Company’s statements of income.
The Company discloses certain income and expense items on a
per-share basis. The Company believes that such disclosures provide
important insight into underlying quarterly earnings and are
financial performance metrics commonly used by investors. The
Company calculates the quarterly per-share amount for items
included in continuing operations by using the income tax rate
based on income from continuing operations and the weighted-average
number of shares outstanding for each period. Year-to-date earnings
per-share effects are determined by adding the amounts calculated
at each reporting period.
Table 9
Net SalesSix Months endedJune 30,
PercentChange
Impact ofChangesin CurrencyTranslation
Rates
Percent ChangeexcludingCurrency
RateEffect
(in thousands, except percentages)
2016
2015
Machine Clothing $
294,197 $ 309,055 -4.8 %
($2,085 ) -4.1 % Albany
Engineered Composites 81,324
44,558 82.5 %
34 82.4 % Total
$ 375,521 $ 353,613
6.2 % ($2,051 )
6.8 %
Table 10
Six Months
ended June 30, 2016
(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Net income (GAAP) $ 72,543
($9,553 ) ($39,573 )
$ 23,417 Interest expense, net
- -
5,929 5,929 Income
tax expense -
- 13,125
13,125 Depreciation and amortization
18,813 9,750
4,216
32,779
EBITDA (non-GAAP)
91,356 197
(16,303 )
75,250 Restructuring expenses, net
6,132 1,147
48 7,327
Foreign currency revaluation losses/(gains)
1,560 4
(2,047 ) (483 )
Acquisition expenses -
5,367 -
5,367 Pre-tax loss attributable to
non-controlling interest in ASC -
463 -
463
Adjusted EBITDA
(non-GAAP) $ 99,048
$ 7,178
($18,302 ) $
87,924
Table 11
Six Months
ended June 30, 2015
(in thousands)
MachineClothing
AlbanyEngineeredComposites
Corporateexpensesand other
TotalCompany
Net income (GAAP) $ 69,013
($22,444)* ($36,450 )
$ 10,119 Interest expense, net
- -
5,378 5,378 Income
tax expense -
- 8,155
8,155 Depreciation and amortization
20,416 5,865
4,257
30,538
EBITDA (non-GAAP)
89,429 (16,579
) (18,660 )
54,190 Restructuring expenses, net
10,212 -
-
10,212 Foreign currency revaluation losses/(gains)
(2,529 ) (17 )
(551 ) (3,097 ) Gain on
sale of investment -
- (872 )
(872 ) Pre-tax income attributable to non-controlling
interest in ASC -
(90 ) -
(90 )
Adjusted EBITDA (non-GAAP)
$ 97,112 ($16,686
) ($20,083 )
$ 60,343
*includes $14 million BR725 charge
Table 12
Three Months
ended June 30, 2016
(in thousands, except per share
amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per ShareEffect
Restructuring expenses, net $ 6,648
$ 2,573 $ 4,075
$ 0.13 Foreign currency revaluation gains
1,902 736
1,166 0.04 Acquisition
expenses 3,771
1,358 2,413
0.08 Favorable effect of change in income tax rate
- 203
203 0.01 Net
discrete income tax charge -
27 27
0.00
Table 13
Three Months
ended June 30, 2015
(in thousands, except per share
amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per ShareEffect
Restructuring expenses, net $ 1,211
$ 448 $ 763
$ 0.02 Foreign currency revaluation losses
2,275 842
1,433 0.04 Net discrete income
tax benefit -
20 20
0.00 Unfavorable effect of change in income tax rate
- 736
736 0.02 Charge
for revision in estimated contract profitability
14,000 5,180
8,820 0.28
Table 14
Six Months
ended June 30, 2016
(in thousands, except per share
amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per ShareEffect
Restructuring expenses, net $7,327
$2,843 $4,484
$0.14 Foreign currency revaluation gains
483 173 310
0.01 Acquisition expenses 5,367
1,933 3,434
0.11 Net discrete income tax benefit -
1,006 1,006
0.03
Table 15
Six Months
ended June 30, 2015
(in thousands, except per share
amounts)
Pre-taxamounts
Tax Effect
After-taxEffect
Per ShareEffect
Restructuring expenses, net $10,212
$3,868 $6,344
$0.20 Foreign currency revaluation gains
3,097 1,199 1,898
0.06 Gain on sale of investment
872 331 541
0.02 Net discrete income tax charge
- 199 199
0.01 Charge for revision in estimated contract
profitability 14,000
5,180 8,820 0.28
The following table contains the calculation of net income per
share attributable to the Company, excluding adjustments:
Table 16
Three Months endedJune 30,
Six Months endedJune 30,
Per share amounts (Basic)
2016
2015
2016
2015
Net income/(loss) attributable to the Company, reported (GAAP)
$ 0.32 ($0.07)*
$ 0.74 $0.31*
Adjustments:
Restructuring expenses, net 0.13
0.02 0.14
0.20 Discrete tax
adjustments and effect of change in income tax rate
(0.01 ) 0.02
(0.03 ) 0.01
Foreign currency revaluation (gains)/ losses
(0.04 ) 0.04
(0.01 ) (0.06 )
Acquisition expenses 0.08
- 0.11
- Gain on the sale of investment
- -
-
(0.02 ) Net income attributable to the Company, excluding
adjustments (non-GAAP) $ 0.48
$ 0.01 $ 0.95
$ 0.44
*includes $0.28 per share for BR725 charge
The following table contains the calculation of net debt:
Table 17
(in thousands)
June 30,2016
March 31,2016
December 31,2015
September 30,2015
June 30,2015
Notes and loans payable $531
$590 $587 $390
$543 Current maturities of long-term debt
566 16
16 50,016 50,015
Long-term debt 485,215
255,076 265,080 220,084
252,088
Total debt
486,312 255,682
265,683 270,490
302,646 Cash and cash equivalents
176,025 169,615
185,113 171,780
182,474
Net debt $310,287
$ 86,067 $80,570
$98,710
$120,172
The following table contains the reconciliation of MC 2016
projected Adjusted EBITDA to MC 2016 projected net income:
Table 18
Machine
Clothing Full Year 2016 Outlook
(in millions)
Actual, sixmonthsended June30, 2016
Results forsecond halfof year tomeet
lowend of range
Results forsecond halfof year tomeet
highend of range
Estimatedrange for fullyear
Adjusted EBITDA (non-GAAP) $99
$81 $96
$180 - $195 Less: Restructuring
expenses, net (6) *
* (6) Less: Foreign
currency revaluation losses (2)
* * (2)
EBITDA
(non-GAAP) $91
$81 $96
$172 - $187 Less: Depreciation and amortization
(19) (19)
(19) (
38) Net income (GAAP)
$72 $62
$77 $134 - $149
* 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 and
paper- industry trends and conditions during 2016 and in future
years; expectations in 2016 and in future periods of sales, EBITDA,
Adjusted EBITDA, income, gross profit, gross margin and other
financial items in each of the Company’s businesses, including the
acquired composite aerostructures business, and for the Company as
a whole; the timing and impact of production and development
programs in the Company’s AEC business segment and the sales growth
potential of key AEC programs, as well as AEC as a whole; the
amount and timing of capital expenditures, future tax rates and
cash paid for taxes, depreciation and amortization; future debt and
net debt levels and debt covenant ratios; the timeline for ASC’s
planned facility in Mexico; and changes in currency rates and their
impact on future revaluation gains and losses. Furthermore, a
change in any one or more of the foregoing factors could have a
material effect on the Company’s financial results in any period.
Such statements are based on current expectations, and the Company
undertakes no obligation to publicly update or revise any
forward-looking statements.
Statements expressing management’s assessments of the growth
potential of its businesses, or referring to earlier assessments of
such potential, are not intended as forecasts of actual future
growth, and should not be relied on as such. While management
believes such assessments to have a reasonable basis, such
assessments are, by their nature, inherently uncertain. This
release and earlier releases set forth a number of assumptions
regarding these assessments, including historical results,
independent forecasts regarding the markets in which these
businesses operate, and the timing and magnitude of orders for our
customers’ products.
Historical growth rates are no guarantee of future growth, and
such independent forecasts and assumptions could prove materially
incorrect, in some cases.
ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF INCOME (in
thousands, except per share data) (unaudited) Three
Months Ended Six Months Ended June 30, June 30, 2016 2015
2016 2015 $ 203,190 $ 172,289 Net sales $ 375,521 $ 353,613
124,875 117,697 Cost of goods sold
224,705 222,337 78,315 54,592
Gross profit 150,816 131,276 43,534 39,932 Selling, general, and
administrative expenses 82,955 75,165 10,276 10,411 Technical,
product engineering, and research expenses 20,408 22,712
6,648 1,211 Restructuring expenses, net
7,327 10,212 17,857 3,038 Operating
income 40,126 23,187 3,691 2,702 Interest expense, net 5,929 5,378
(2,017 ) 2,820 Other (income)/expense, net
(2,345 ) (465 ) 16,183 (2,484 ) Income/(loss)
before income taxes 36,542 18,274 6,082 (364 )
Income tax expense/(benefit) 13,125 8,155
10,101 (2,120 ) Net income/(loss) 23,417 10,119
(266 ) 52 Net (loss)/income attributable to
the noncontrolling interest (451 ) 78 $ 10,367
($2,172 ) Net income/(loss) attributable to the
Company $ 23,868 $ 10,041 $ 0.32 ($0.07 )
Earnings/(loss) per share attributable to Company shareholders -
Basic $ 0.74 $ 0.31 $ 0.32 ($0.07 ) Earnings/(loss) per
share attributable to Company shareholders - Diluted $ 0.74 $ 0.31
Shares of the Company used in computing earnings per share:
32,093 31,999 Basic 32,067 31,941 32,131 31,999 Diluted
32,106 32,015 $ 0.17 $ 0.17 Dividends per share, Class A and
Class B $ 0.34 $ 0.33
ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
June 30,
December 31,
2016 2015 ASSETS Cash and cash equivalents $ 176,025 $ 185,113
Accounts receivable, net 176,336 146,383 Inventories 145,371
106,406 Income taxes prepaid and receivable 1,230 2,927 Asset held
for sale 5,078 4,988 Prepaid expenses and other current assets
9,582 6,243 Total current assets
513,622 452,060 Property, plant and equipment, net 440,175
357,470 Intangibles, net 58,325 154 Goodwill 98,566 66,373 Income
taxes receivable and deferred 110,263 108,945 Other assets
28,379 24,560 Total assets $ 1,249,330
$ 1,009,562 LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable $ 531 $ 587 Accounts payable 40,608 26,753
Accrued liabilities 87,388 91,785 Current maturities of long-term
debt 566 16 Income taxes payable 7,078 7,090
Total current liabilities 136,171 126,231 Long-term
debt 485,215 265,080 Other noncurrent liabilities 99,590 101,544
Deferred taxes and other liabilities 12,760
14,154 Total liabilities 733,736
507,009 SHAREHOLDERS' EQUITY Preferred stock, par
value $5.00 per share; authorized 2,000,000 shares; none issued - -
Class A Common Stock, par value $.001 per share; authorized
100,000,000 shares; issued 37,311,733 in 2016 and 37,238,913 in
2015 37 37 Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and outstanding 3,235,048 in
2016 and 2015 3 3 Additional paid in capital 424,921 423,108
Retained earnings 504,907 491,950 Accumulated items of other
comprehensive income: Translation adjustments (106,262 ) (108,655 )
Pension and postretirement liability adjustments (48,364 ) (48,725
) Derivative valuation adjustment (5,709 ) (1,464 ) Treasury stock
(Class A), at cost 8,445,342 shares in 2016 and 8,455,293 shares in
2015 (257,177 ) (257,391 ) Total Company
shareholders' equity 512,356 498,863 Noncontrolling interest
3,238 3,690 Total equity 515,594
502,553 Total liabilities and shareholders' equity $
1,249,330 $ 1,009,562
ALBANY
INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOW (in
thousands) (unaudited) Three Months Ended Six Months
Ended June 30, June 30, 2016 2015 2016 2015 OPERATING ACTIVITIES $
10,101 ($2,120 ) Net income/(loss) $ 23,417 $ 10,119 Adjustments to
reconcile net income/(loss) to net cash provided by operating
activities: 15,142 13,373 Depreciation 28,266 26,897 2,817 1,811
Amortization 4,513 3,641 (3,371 ) 8 Change in other noncurrent
liabilities (6,007 ) (1,544 ) (1,457 ) (5,928 ) Change in deferred
taxes and other liabilities 1,072 (4,653 ) 484 263 Provision for
write-off of property, plant and equipment 1,076 415 - - Gain on
disposition of assets - (1,056 ) (39 ) (342 ) Excess tax benefit of
options exercised (105 ) (603 ) 668 419 Compensation and benefits
paid or payable in Class A Common Stock 1,532 995 Changes in
operating assets and liabilities that provide/(use) cash, net of
impact of business acquisition: (10,384 ) 4,212 Accounts receivable
(11,286 ) (9,487 ) (6,027 ) (4,061 ) Inventories (7,375 ) (7,131 )
2,561 1,715 Prepaid expenses and other current assets (2,821 ) (990
) 3,732 (158 ) Income taxes prepaid and receivable 1,837 (74 )
1,267 (4,853 ) Accounts payable 2,899 (1,341 ) 689 (933 ) Accrued
liabilities (8,154 ) (2,520 ) 2,903 475 Income taxes payable (933 )
77 (477 ) 7,062 Other, net (5,278 )
4,607 18,609 10,943 Net
cash provided by operating activities 22,653
17,352 INVESTING ACTIVITIES (187,000 ) - Purchase of
business, net of cash acquired (187,000 ) - (20,112 ) (18,455 )
Purchases of property, plant and equipment (28,105 ) (30,666 ) (589
) (304 ) Purchased software (671 ) (337 ) 1,736
- Proceeds from sale or involuntary conversion of
assets 1,736 2,797 (205,965 )
(18,759 ) Net cash used in investing activities
(214,040 ) (28,206 ) FINANCING ACTIVITIES 207,134
24,346 Proceeds from borrowings 219,530 39,620 (426 ) (4,303 )
Principal payments on debt (22,824 ) (9,746 ) (1,571 ) (1,630 )
Debt acquisition costs (1,771 ) (1,630 ) (5,175 ) - Swap
termination payment (5,175 ) - 185 1,039 Proceeds from options
exercised 390 1,724 39 342 Excess tax benefit of options exercised
105 603 (5,454 ) (5,107 ) Dividends paid
(10,897 ) (10,205 ) 194,732 14,687
Net cash provided by financing activities 179,358
20,366 (966 ) 4,765
Effect of exchange rate changes on cash and cash equivalents
2,941 (6,840 ) 6,410 11,636
Increase/(decrease) in cash and cash equivalents (9,088 ) 2,672
169,615 170,838 Cash and cash
equivalents at beginning of period 185,113
179,802 $ 176,025 $ 182,474 Cash and cash
equivalents at end of period $ 176,025 $ 182,474
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160801006194/en/
Albany International Corp.InvestorsJohn Cozzolino,
518-445-2281john.cozzolino@albint.comorMediaSusan Siegel,
603-330-5866susan.siegel@albint.com
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