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Albany International Reports Fourth-Quarter 2021 Results

Albany International Corp. (NYSE:AIN) today reported operating results for its fourth quarter of 2021, which ended December 31, 2021.

"We are pleased to report another strong quarter, capping a great year in 2021," said Bill Higgins, President and Chief Executive Officer. "Our employees performed remarkably well throughout the year serving customers, winning new business, developing new products, and navigating supply chain and COVID challenges. For the year the Company generated record free cash flow and very healthy Adjusted EBITDA margins. The team has continued to demonstrate world-class operational performance in delivery, quality, and safety."

"Our Machine Clothing segment's execution and financial results continue to be exceptional. On strong sales and productivity, the segment's Adjusted EBITDA of approximately $237 million was a record."

"Our Engineered Composites segment also performed very well in a challenging environment, with revenues of $310 million and Adjusted EBITDA margins of 22%. The segment is winning significant new business, including the award of additional content on the CH-53K helicopter valued at more than $300 million, and is building a foundation for long-term growth with development efforts on next-generation engine and airframe programs."

For the fourth quarter ended December 31, 2021:

  • Net sales were $239.9 million, up 5.8%, or 6.4% after adjusting for currency translation, when compared to the prior year.
  • Gross profit of $96.1 million was 5.2% higher than the $91.3 million reported for the same period of 2020.
  • Selling, Technical, General, and Research (STG&R) expenses were $53.2 million, compared to $54.8 million in the same period of 2020.
  • Operating income was $41.7 million, compared to $35.0 million in the prior year, an increase of 19.3%.
  • The effective tax rate was 27.3%, compared to 13.5% for the fourth quarter of 2020. Fourth quarter 2020 effective tax rate was abnormally low due to the inclusion of a significant true up of earlier quarters' provisions.
  • Net income attributable to the Company was $28.6 million ($0.89 per share), compared to $27.5 million ($0.85 per share) in the fourth quarter of 2020. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.86 per share, compared to $0.89 per share for the same period of last year.
  • Adjusted EBITDA (a non-GAAP measure) was $60.6 million, compared to $57.3 million in the fourth quarter of 2020, an increase of 5.8%.

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

"We are in a solid position as we enter 2022," said Stephen Nolan, Chief Financial Officer. "We expect to sustain strong results despite the supply chain challenges and inflationary pressures we are facing as we enter the year. The Company is well positioned with a solid business base and advanced technologies that spur long-term growth."

Outlook for Full-Year 2022

Albany International announces its initial financial guidance for the full-year 2022:

  • Total company revenue between $920 and $960 million;
  • Effective income tax rate, including tax adjustments, between 29% and 31%;
  • Total company depreciation and amortization of approximately $75 million;
  • Capital expenditures in the range of $75 to $85 million;
  • GAAP and Adjusted earnings per share between $2.80 and $3.30;
  • Total company Adjusted EBITDA between $215 to $245 million;
  • Machine Clothing revenue between $590 to $610 million;
  • Machine Clothing Adjusted EBITDA between $205 and $225 million;
  • Albany Engineered Composites (AEC) revenue between $330 to $350 million; and
  • Albany Engineered Composites Adjusted EBITDA between $65 to $75 million.
 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net sales

$

239,918

 

 

$

226,857

 

 

$

929,240

 

 

$

900,610

 

Cost of goods sold

 

143,843

 

 

 

135,539

 

 

 

550,849

 

 

 

529,538

 

 

 

 

 

 

 

 

 

Gross profit

 

96,075

 

 

 

91,318

 

 

 

378,391

 

 

 

371,072

 

Selling, general, and administrative expenses

 

43,228

 

 

 

45,742

 

 

 

160,127

 

 

 

163,909

 

Technical and research expenses

 

10,006

 

 

 

9,043

 

 

 

38,922

 

 

 

35,347

 

Restructuring expenses, net

 

1,101

 

 

 

1,547

 

 

 

1,331

 

 

 

5,736

 

 

 

 

 

 

 

 

 

Operating income

 

41,740

 

 

 

34,986

 

 

 

178,011

 

 

 

166,080

 

Interest expense, net

 

3,370

 

 

 

3,542

 

 

 

14,891

 

 

 

13,584

 

Aviation Manufacturing Jobs Protection (AMJP) grant

 

 

 

 

 

 

 

(5,832

)

 

 

 

Other expense/(income), net

 

(1,194

)

 

 

(493

)

 

 

3,021

 

 

 

13,422

 

 

 

 

 

 

 

 

 

Income before income taxes

 

39,564

 

 

 

31,937

 

 

 

165,931

 

 

 

139,074

 

Income tax expense

 

10,788

 

 

 

4,327

 

 

 

47,163

 

 

 

41,831

 

 

 

 

 

 

 

 

 

Net income

 

28,776

 

 

 

27,610

 

 

 

118,768

 

 

 

97,243

 

Net income/(loss) attributable to the noncontrolling interest

 

140

 

 

 

73

 

 

 

290

 

 

 

(1,346

)

Net income attributable to the Company

$

28,636

 

 

$

27,537

 

 

$

118,478

 

 

$

98,589

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Company shareholders - Basic

$

0.89

 

 

$

0.85

 

 

$

3.66

 

 

$

3.05

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Company shareholders - Diluted

$

0.88

 

 

$

0.85

 

 

$

3.65

 

 

$

3.05

 

 

 

 

 

 

 

 

 

Shares of the Company used in computing earnings per share:

 

 

 

 

 

 

 

Basic

 

32,285

 

 

 

32,339

 

 

 

32,348

 

 

 

32,329

 

 

 

 

 

 

 

 

 

Diluted

 

32,398

 

 

 

32,365

 

 

 

32,463

 

 

 

32,356

 

 

 

 

 

 

 

 

 

Dividends declared per share, Class A and Class B

$

0.21

 

 

$

0.20

 

 

$

0.81

 

 

$

0.77

 

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

December 31, 2021

 

December 31, 2020

ASSETS

 

 

 

Cash and cash equivalents

$

302,036

 

 

$

241,316

 

Accounts receivable, net

 

191,985

 

 

 

188,423

 

Contract assets, net

 

112,546

 

 

 

139,289

 

Inventories

 

117,882

 

 

 

110,478

 

Income taxes prepaid and receivable

 

1,958

 

 

 

5,940

 

Prepaid expenses and other current assets

 

32,394

 

 

 

31,830

 

Total current assets

$

758,801

 

 

$

717,276

 

 

 

 

 

Property, plant and equipment, net

 

436,417

 

 

 

448,554

 

Intangibles, net

 

39,081

 

 

 

46,869

 

Goodwill

 

182,124

 

 

 

187,553

 

Deferred income taxes

 

26,376

 

 

 

38,757

 

Noncurrent receivables, net

 

31,849

 

 

 

36,265

 

Other assets

 

81,416

 

 

 

74,662

 

Total assets

$

1,556,064

 

 

$

1,549,936

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Accounts payable

$

68,954

 

 

$

49,173

 

Accrued liabilities

 

124,325

 

 

 

125,459

 

Current maturities of long-term debt

 

 

 

 

9

 

Income taxes payable

 

14,887

 

 

 

16,222

 

Total current liabilities

 

208,166

 

 

 

190,863

 

 

 

 

 

Long-term debt

 

350,000

 

 

 

398,000

 

Other noncurrent liabilities

 

107,794

 

 

 

130,424

 

Deferred taxes and other liabilities

 

12,499

 

 

 

10,784

 

Total liabilities

 

678,459

 

 

 

730,071

 

 

 

 

 

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; 40,760,577 issued in 2021 and 39,115,405 in 2020

 

41

 

 

 

39

 

Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 104 in 2021 and 1,617,998 in 2020

 

 

 

 

2

 

Additional paid in capital

 

436,996

 

 

 

433,696

 

Retained earnings

 

863,057

 

 

 

770,746

 

Accumulated items of other comprehensive income:

 

 

 

Translation adjustments

 

(105,880

)

 

 

(83,203

)

Pension and postretirement liability adjustments

 

(38,490

)

 

 

(39,661

)

Derivative valuation adjustment

 

(1,614

)

 

 

(9,544

)

Treasury stock (Class A), at cost; 8,665,090 shares in 2021 and 8,391,011 in 2020

 

(280,143

)

 

 

(256,009

)

Total Company shareholders' equity

 

873,967

 

 

 

816,066

 

Noncontrolling interest

 

3,638

 

 

 

3,799

 

Total equity

 

877,605

 

 

 

819,865

 

Total liabilities and shareholders' equity

$

1,556,064

 

 

$

1,549,936

 

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

$

28,776

 

 

$

27,610

 

 

$

118,768

 

 

$

97,243

 

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

 

 

 

 

 

 

 

Depreciation

 

16,645

 

 

 

16,039

 

 

 

65,130

 

 

 

63,328

 

Amortization

 

2,263

 

 

 

2,360

 

 

 

9,125

 

 

 

9,377

 

Change in deferred taxes and other liabilities

 

5,159

 

 

 

(1,333

)

 

 

12,181

 

 

 

11,101

 

Impairment of property, plant and equipment

 

293

 

 

 

637

 

 

 

856

 

 

 

1,173

 

Non-cash interest expense

 

282

 

 

 

(152

)

 

 

875

 

 

 

(290

)

Write-off of pension liability adjustments due to settlement/curtailment

 

 

 

 

411

 

 

 

 

 

 

411

 

Compensation and benefits paid or payable in Class A Common Stock

 

914

 

 

 

909

 

 

 

3,146

 

 

 

1,505

 

Provision for credit losses from uncollected receivables and contract assets

 

(141

)

 

 

(36

)

 

 

(1,299

)

 

 

1,628

 

Foreign currency remeasurement (gain)/loss on intercompany loans

 

(2,599

)

 

 

(1,504

)

 

 

(3,150

)

 

 

14,246

 

Fair value adjustment on foreign currency options

 

 

 

 

 

 

 

169

 

 

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities that provided/(used) cash:

 

 

 

 

 

 

 

Accounts receivable

 

6,558

 

 

 

25,453

 

 

 

(7,734

)

 

 

31,522

 

Contract assets

 

3,276

 

 

 

(31,190

)

 

 

25,446

 

 

 

(59,122

)

Inventories

 

(104

)

 

 

6,358

 

 

 

(9,942

)

 

 

(13,685

)

Prepaid expenses and other current assets

 

(3,442

)

 

 

(822

)

 

 

(998

)

 

 

(7,811

)

Income taxes prepaid and receivable

 

1,536

 

 

 

775

 

 

 

3,944

 

 

 

113

 

Accounts payable

 

5,180

 

 

 

(95

)

 

 

9,492

 

 

 

(15,586

)

Accrued liabilities

 

11,537

 

 

 

4,207

 

 

 

(774

)

 

 

(3,856

)

Income taxes payable

 

608

 

 

 

2,198

 

 

 

(477

)

 

 

5,939

 

Noncurrent receivables

 

1,523

 

 

 

3,989

 

 

 

4,355

 

 

 

4,158

 

Other noncurrent liabilities

 

(8,131

)

 

 

(2,024

)

 

 

(13,713

)

 

 

(2,437

)

Other, net

 

(1,157

)

 

 

2,770

 

 

 

2,075

 

 

 

1,296

 

Net cash provided by operating activities

 

68,976

 

 

 

56,560

 

 

 

217,475

 

 

 

140,253

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(21,039

)

 

 

(10,143

)

 

 

(52,793

)

 

 

(41,463

)

Purchased software

 

(512

)

 

 

(772

)

 

 

(906

)

 

 

(927

)

Net cash used in investing activities

 

(21,551

)

 

 

(10,915

)

 

 

(53,699

)

 

 

(42,390

)

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

 

 

5,000

 

 

 

8,000

 

 

 

75,000

 

Principal payments on debt

 

 

 

 

(25,004

)

 

 

(56,009

)

 

 

(101,020

)

Principal payments on finance lease liabilities

 

(371

)

 

 

(416

)

 

 

(1,438

)

 

 

(7,214

)

Debt acquisition costs

 

 

 

 

(2,432

)

 

 

 

 

 

(2,432

)

Purchase of Treasury shares

 

(23,449

)

 

 

 

 

 

(23,449

)

 

 

 

Taxes paid in lieu of share issuance

 

 

 

 

 

 

 

(998

)

 

 

(490

)

Proceeds from options exercised

 

 

 

 

30

 

 

 

153

 

 

 

55

 

Dividends paid

 

(6,476

)

 

 

(6,144

)

 

 

(25,894

)

 

 

(24,568

)

Net cash used in financing activities

 

(30,296

)

 

 

(28,966

)

 

 

(99,635

)

 

 

(60,669

)

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(1,310

)

 

 

9,333

 

 

 

(3,421

)

 

 

8,582

 

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

15,819

 

 

 

26,012

 

 

 

60,720

 

 

 

45,776

 

Cash and cash equivalents at beginning of period

 

286,217

 

 

 

215,304

 

 

 

241,316

 

 

 

195,540

 

Cash and cash equivalents at end of period

$

302,036

 

 

$

241,316

 

 

$

302,036

 

 

$

241,316

 

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

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

(in thousands, except percentages)

Net sales as

reported, Q4 2021

(Decrease) due

to changes in

currency

translation rates

Q4 2021 sales

on same basis

as Q4 2020

currency

translation rates

Net sales as

reported, Q4

2020

% Change

compared to Q4

2020, excluding

currency rate

effects

Machine Clothing

$

156,717

$

(995

)

$

157,712

$

144,173

9.4

%

Albany Engineered Composites

 

83,201

 

(534

)

 

83,735

 

82,684

1.3

%

Consolidated total

$

239,918

$

(1,529

)

$

241,447

$

226,857

6.4

%

 

 

 

 

 

 

(in thousands, except percentages)

Net sales as

reported, YTD 2021

Increase due to

changes in

currency

translation rates

YTD 2021 sales

on same basis

as 2020

currency

translation rates

Net sales as

reported,

YTD 2020

% Change

compared to 2020,

excluding currency

rate effects

Machine Clothing

$

619,015

$

10,834

 

$

608,181

$

572,955

6.1

%

Albany Engineered Composites

 

310,225

 

1,822

 

 

308,403

 

327,655

(5.9

) %

Consolidated total

$

929,240

$

12,656

 

$

916,584

$

900,610

1.8

%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)

Gross profit,

Q4 2021

Gross profit margin,

Q4 2021

Gross profit,

Q4 2020

Gross profit margin,

Q4 2020

Machine Clothing

$

82,030

52.3

%

$

73,410

50.9

%

Albany Engineered Composites

 

14,045

16.9

%

 

17,908

21.7

%

Consolidated total

$

96,075

40.0

%

$

91,318

40.3

%

(in thousands, except percentages)

Gross profit,

YTD 2021

Gross profit margin,

YTD 2021

Gross profit,

YTD 2020

Gross profit margin,

YTD 2020

Machine Clothing

$

322,457

52.1

%

$

301,144

52.6

%

Albany Engineered Composites

 

55,934

18.0

%

 

69,928

21.3

%

Consolidated total

$

378,391

40.7

%

$

371,072

41.2

%

A reconciliation from operating 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, 2021

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total

Company

Operating income/(loss) (GAAP)

$

53,923

 

$

3,141

 

$

(15,324

)

$

41,740

 

Interest, taxes, other income/(expense)

 

 

 

 

 

(12,964

)

 

(12,964

)

Net income/(loss) (GAAP)

 

53,923

 

 

3,141

 

 

(28,288

)

 

28,776

 

Interest expense, net

 

 

 

 

 

3,370

 

 

3,370

 

Income tax expense

 

 

 

 

 

10,788

 

 

10,788

 

Depreciation and amortization expense

 

4,919

 

 

13,076

 

 

913

 

 

18,908

 

EBITDA (non-GAAP)

 

58,842

 

 

16,217

 

 

(13,217

)

 

61,842

 

Restructuring expenses, net

 

1,009

 

 

72

 

 

20

 

 

1,101

 

Foreign currency revaluation (gains)/losses

 

(151

)

 

(313

)

 

(1,998

)

 

(2,462

)

Acquisition/integration costs

 

 

 

255

 

 

 

 

255

 

AMJP grant

 

 

 

138

 

 

 

 

138

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(304

)

 

 

 

(304

)

Adjusted EBITDA (non-GAAP)

$

59,700

 

$

16,065

 

$

(15,195

)

$

60,570

 

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

 

38.1

%

 

19.3

%

 

 

 

25.2

%

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2020

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total

Company

Operating income/(loss) (GAAP)

$

41,386

 

$

8,787

 

$

(15,187

)

$

34,986

 

Interest, taxes, other income/(expense)

 

 

 

 

 

(7,376

)

 

(7,376

)

Net income/(loss) (GAAP)

 

41,386

 

 

8,787

 

 

(22,563

)

 

27,610

 

Interest expense, net

 

 

 

 

 

3,542

 

 

3,542

 

Income tax expense

 

 

 

 

 

4,327

 

 

4,327

 

Depreciation and amortization expense

 

5,161

 

 

12,303

 

 

935

 

 

18,399

 

EBITDA (non-GAAP)

 

46,547

 

 

21,090

 

 

(13,759

)

 

53,878

 

Restructuring expenses, net

 

1,332

 

 

215

 

 

 

 

1,547

 

Foreign currency revaluation (gains)/losses

 

3,009

 

 

(372

)

 

(1,134

)

 

1,503

 

Acquisition/integration costs

 

 

 

405

 

 

 

 

405

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(64

)

 

 

 

(64

)

Adjusted EBITDA (non-GAAP)

$

50,888

 

$

21,274

 

$

(14,893

)

$

57,269

 

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

 

35.3

%

 

25.7

%

 

 

 

25.2

%

Twelve months ended December 31, 2021

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total

Company

Operating income/(loss) (GAAP)

$

215,654

 

$

16,160

 

$

(53,803

)

$

178,011

 

Interest, taxes, other income/(expense)

 

 

 

 

 

(59,243

)

 

(59,243

)

Net income/(loss) (GAAP)

 

215,654

 

 

16,160

 

 

(113,046

)

 

118,768

 

Interest expense, net

 

 

 

 

 

14,891

 

 

14,891

 

Income tax expense

 

 

 

 

 

47,163

 

 

47,163

 

Depreciation and amortization expense

 

20,191

 

 

50,402

 

 

3,662

 

 

74,255

 

EBITDA (non-GAAP)

 

235,845

 

 

66,562

 

 

(47,330

)

 

255,077

 

Restructuring expenses, net

 

1,202

 

 

32

 

 

97

 

 

1,331

 

Foreign currency revaluation (gains)/losses

 

(307

)

 

50

 

 

(1,185

)

 

(1,442

)

AMJP grant

 

 

 

1,101

 

 

(5,832

)

 

(4,731

)

Acquisition/integration costs

 

 

 

1,166

 

 

 

 

1,166

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(510

)

 

 

 

(510

)

Adjusted EBITDA (non-GAAP)

$

236,740

 

$

68,401

 

$

(54,250

)

$

250,891

 

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

 

38.2

%

 

22.0

%

 

%

 

27.0

%

 

 

 

 

 

Twelve months ended December 31, 2020

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total

Company

Operating income/(loss) (GAAP)

$

190,805

 

$

31,536

 

$

(56,261

)

$

166,080

 

Interest, taxes, other income/(expense)

 

 

 

 

 

(68,837

)

 

(68,837

)

Net income/(loss) (GAAP)

 

190,805

 

 

31,536

 

 

(125,098

)

 

97,243

 

Interest expense, net

 

 

 

 

 

13,584

 

 

13,584

 

Income tax expense

 

 

 

 

 

41,831

 

 

41,831

 

Depreciation and amortization expense

 

20,304

 

 

48,496

 

 

3,905

 

 

72,705

 

EBITDA (non-GAAP)

 

211,109

 

 

80,032

 

 

(65,778

)

 

225,363

 

Restructuring expenses, net

 

2,746

 

 

2,821

 

 

169

 

 

5,736

 

Foreign currency revaluation (gains)/losses

 

1,743

 

 

130

 

 

13,571

 

 

15,444

 

Former CEO termination costs

 

 

 

 

 

2,742

 

 

2,742

 

Acquisition/integration costs

 

 

 

1,272

 

 

 

 

1,272

 

Pre-tax loss attributable to noncontrolling interest

 

 

 

1,348

 

 

 

 

1,348

 

Adjusted EBITDA (non-GAAP)

$

215,598

 

$

85,603

 

$

(49,296

)

$

251,905

 

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

 

37.6

%

 

26.1

%

 

 

 

28.0

%

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

Three months ended December 31, 2021

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

1,101

 

$

332

 

$

769

 

$

0.02

 

Foreign currency revaluation (gains)/losses

 

(2,462

)

 

(655

)

 

(1,807

)

 

(0.06

)

Acquisition/integration costs

 

255

 

 

76

 

 

179

 

 

0.01

 

AMJP grant

 

138

 

 

42

 

 

96

 

 

0.00

 

 

 

 

 

 

Three months ended December 31, 2020

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

1,547

 

$

485

 

$

1,062

 

$

0.03

 

Foreign currency revaluation (gains)/losses

 

1,503

 

 

1,379

 

 

124

 

 

0.00

 

Acquisition/integration costs

 

405

 

 

121

 

 

284

 

 

0.01

 

 

 

 

 

 

Year ended December 31, 2021

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

1,331

 

$

399

 

$

932

 

$

0.02

 

Foreign currency revaluation (gains)/losses

 

(1,442

)

 

(323

)

 

(1,119

)

 

(0.04

)

AMJP grant

 

(4,731

)

 

(1,404

)

 

(3,327

)

 

(0.11

)

Acquisition/integration costs

 

1,166

 

 

349

 

 

817

 

 

0.04

 

 

 

 

 

 

Year ended December 31, 2020

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

5,736

 

$

1,862

 

$

3,874

 

$

0.11

 

Foreign currency revaluation (gains)/losses (a)

 

15,444

 

 

896

 

 

14,548

 

 

0.46

 

Former CEO termination costs

 

2,742

 

 

713

 

 

2,029

 

 

0.06

 

Acquisition/integration costs

 

1,272

 

 

380

 

 

892

 

 

0.04

 

 

(a) In Q1 2020, the company recorded losses of approximately $17 million in jurisdictions where it cannot record a tax benefit from the losses, which results in an unusual relationship between the pre-tax and after-tax amounts.

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

 

Three months ended December 31,

Twelve months ended December 31,

Per share amounts (Basic)

 

2021

 

 

2020

 

2021

 

 

2020

Earnings per share (GAAP)

$

0.89

 

$

0.85

$

3.66

 

$

3.05

Adjustments, after tax:

 

 

 

 

Restructuring expenses, net

 

0.02

 

 

0.03

 

0.02

 

 

0.11

Foreign currency revaluation (gains)/losses

 

(0.06

)

 

 

(0.04

)

 

0.46

AMJP grant

 

 

 

 

(0.11

)

 

Former CEO termination costs

 

 

 

 

 

 

0.06

Acquisition/integration costs

 

0.01

 

 

0.01

 

0.04

 

 

0.04

Adjusted Earnings per share (non-GAAP)

$

0.86

 

$

0.89

$

3.57

 

$

3.72

The calculations of net debt are as follows:

(in thousands)

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

Current maturities of long-term debt

$

$

$

$

2

$

9

Long-term debt

 

350,000

 

350,000

 

350,000

 

384,000

 

398,000

Total debt

 

350,000

 

350,000

 

350,000

 

384,002

 

398,009

Cash and cash equivalents

 

302,036

 

286,217

 

253,330

 

237,871

 

241,316

Net debt (non GAAP)

$

47,964

$

63,783

$

96,670

$

146,131

$

156,693

The tables below provide a reconciliation of initial outlook for the full-year 2022 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Initial Outlook Full Year 2022 Adjusted EBITDA

Machine Clothing

 

AEC

(in millions)

Low

High

 

Low

High

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

$

185

$

204

 

 

$

15

$

24

 

Income attributable to the noncontrolling interest

 

 

 

 

 

 

(1

)

Interest expense, net

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

Depreciation and amortization

 

20

 

21

 

 

 

50

 

51

 

EBITDA (non-GAAP)

 

205

 

225

 

 

 

65

 

74

 

Restructuring expenses, net (c)

 

 

 

 

 

 

 

Foreign currency revaluation (gains)/losses (c)

 

 

 

 

 

 

 

Acquisition/integration costs (c)

 

 

 

 

 

 

 

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

 

 

 

 

 

 

1

 

Adjusted EBITDA (non-GAAP)

$

205

$

225

 

 

$

65

$

75

 

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

 

 

 

 

 

 

 

 

 

 

 

Initial Outlook Full Year 2022 Adjusted EBITDA

Total Company

 

 

 

(in millions)

Low

High

 

 

 

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

$

89

$

105

 

 

 

 

Income attributable to the noncontrolling interest

 

 

(1

)

 

 

 

Interest expense, net

 

13

 

16

 

 

 

 

Income tax expense

 

39

 

48

 

 

 

 

Depreciation and amortization

 

74

 

76

 

 

 

 

EBITDA (non-GAAP)

 

215

 

244

 

 

 

 

Restructuring expenses, net (c)

 

 

 

 

 

 

Foreign currency revaluation (gains)/losses (c)

 

 

 

 

 

 

Acquisition/integration costs (c)

 

 

 

 

 

 

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

 

 

1

 

 

 

 

Adjusted EBITDA (non-GAAP)

$

215

$

245

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

Forecast of Full Year 2022 Earnings per share (basic) (d)

Low

High

 

 

 

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

$

2.80

$

3.30

 

 

 

 

Restructuring expenses, net (c)

 

 

 

 

 

 

Foreign currency revaluation (gains)/losses (c)

 

 

 

 

 

 

Acquisition/integration costs (c)

 

 

 

 

 

 

Adjusted Earnings per share (non-GAAP)

$

2.80

$

3.30

 

 

 

 

 

 

 

 

 

 

(c) Due to the uncertainty of these items, we are unable to forecast these items for 2022.

(d) Calculations based on estimated shares outstanding of 31.9 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. Machine Clothing is the world’s leading producer of custom-designed, consumable fabrics and process belts essential for the manufacture of all grades of paper products. Albany Engineered Composites is a growing designer and manufacturer of advanced materials-based engineered components for demanding aerospace applications, supporting both commercial and military platforms. Albany International is headquartered in Rochester, New Hampshire, operates 23 facilities in 11 countries, employs approximately 4,100 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, including: net sales, and percent change in net sales, excluding the impact of currency translation effects (for each segment and on a consolidated basis); EBITDA and Adjusted EBITDA (for each segment and on a consolidated basis, represented in dollars or as a percentage of net sales); Net debt; and Adjusted earnings per share (or Adjusted EPS). Such items are provided because management believes that they provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net sales and increases or decreases in Net sales, after currency effects are excluded, can give 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 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, Adjusted EBITDA and Adjusted EPS are performance measures that relate to the Company’s continuing operations. 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. The Company calculates EBITDA by removing the following from Net income: Interest expense, net, Income tax expense, Depreciation and amortization expense. Adjusted EBITDA is calculated by: adding to EBITDA costs associated with restructuring, former CEO termination costs, and inventory write-offs associated with discontinued businesses; adding charges and credits related to pension plan settlements and curtailments; adding (or subtracting) revaluation losses (or gains); subtracting income recognized associated with government grants; subtracting (or adding) gains (or losses) from the sale of buildings or investments; subtracting insurance recovery gains in excess of previously recorded losses; adding acquisition/integration costs and subtracting (or adding) Income (or loss) attributable to the non-controlling interest in Albany Safran Composites (ASC). Adjusted EBITDA may also be presented as a percentage of net sales by dividing it by net sales. An understanding of the impact in a particular quarter of specific restructuring costs, former CEO termination costs, government grants, acquisition/integration costs, currency revaluation, inventory write-offs associated with discontinued businesses, 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, 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. Adjusted earnings per share (Adjusted EPS) is calculated by adding to (or subtracting from) net income attributable to the Company per share, on an after-tax basis: restructuring charges; former CEO severance costs; charges and credits related to pension plan settlements and curtailments; inventory write-offs associated with discontinued businesses; foreign currency revaluation losses (or gains); acquisition-related expenses; and losses (or gains) from the sale of investments.

EBITDA, Adjusted EBITDA, and Adjusted EPS, as defined by the Company, may not be similar to similarly named 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 an income tax rate based on either the tax rates in specific countries or the estimated tax rate applied to total company results. The tax rate applied excludes income tax adjustments (discrete tax adjustments and the effect of changes in the estimated income tax rate). The after-tax amount is then divided by 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.

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. The Company calculates Net debt by subtracting Cash and cash equivalents from Total debt. Total debt is calculated by adding Long-term debt, Current maturities of long-term debt, and Notes and loans payable, if any.

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 and paper-industry trends and conditions during 2021 and in future years; expectations in 2021 and in future periods of sales, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net sales), 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 sales growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company’s financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

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

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