Albany International Reports Second-Quarter 2023 Results

Albany International Corp. (NYSE:AIN, Financial) today reported operating results for its second quarter of 2023, which ended June 30, 2023.

“We are reporting another strong quarter of operational results,” said Albany International President and Chief Executive Officer, Bill Higgins. "Our revenue of $274 million was up $13 million or approximately 5% year-over-year with growth across both business segments. I'm particularly pleased that revenue growth and operational execution in our businesses allows us to increase our guidance for 2023.

“We continue to advance our strategies for long-term value creation. During the quarter we announced our agreement to acquire Heimbach Group, a European producer of paper machine clothing which we expect to close in the second half of this year. With Heimbach, our broadened footprint will allow us to better serve customers in Europe and Asia. It's an exciting opportunity to create significant value for our shareholders as well as for our customers.

“Our Albany Engineered Composites team is on track to meeting short term growth and value deliverables. Longer term we are engaged with customers, demonstrating the capabilities of our proprietary 3D woven composites technology for applications in next-generation airframe, wing, and engine designs. We are investing our time and effort today to position for these long-term program opportunities,” concluded Higgins.

For the second quarter ended June 30, 2023:

• Net revenues were $274.1 million, up 4.9%, or 4.8% after adjusting for currency translation, when compared to the prior year, due to year-over-year growth in revenues related to commercial programs within the Engineered Composites segment and revenue growth in all paper machine clothing grades within the Machine Clothing segment.
• Gross profit of $102.7 million was 2.1% higher than the $100.6 million reported for the same period of 2022; overall gross margin declined by 100 basis points, primarily due to higher contribution from the lower-margin Engineered Composites segment.
• Selling, Technical, General, and Research (STG&R) expenses were $57.1 million, compared to $49.9 million in the same period of 2022; the increase was driven by executive transition costs and professional service fees.
• Operating income was $45.5 million, compared to $50.7 million in the prior year, a decrease of 10.3%.
• Effective tax rate for the quarter was 42.8%, compared to 26.9% for the second quarter of 2022. The year-over-year increase was mainly due to unfavorable discrete tax adjustments recognized in the second quarter of 2023.
• Net income attributable to the Company was $26.7 million ($0.86 per share), compared to $39.2 million ($1.25 per share) in the second quarter of 2022; Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.90 per share, compared to $1.06 per share for the same period last year.
• Adjusted EBITDA (a non-GAAP measure) was $65.0 million, compared to $66.0 million in the second quarter of 2022, a decrease of 1.5%.

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

Outlook for Full-Year 2023

The Company has updated its guidance for the full year of 2023 as follows:

• Total company revenue between $1.040 and $1.070 billion, up $30 million on the low end and $20 million on the high end of the range;
• Effective income tax rate, including tax adjustments, between 32% and 33%, implying an effective tax rate between 28% and 30% in the second half of 2023;
• Total company depreciation and amortization between $72 and $74 million;
• Capital expenditures in the range of $85 to $95 million, $5 million lower;
• GAAP earnings per share between $3.07 and $3.67, up $0.02 on the low end and $0.12 on the high end of the range;
• Adjusted earnings per share between $3.15 and $3.75, raised by $0.05 on the low end and $0.15 on the high end of the range;
• Total company Adjusted EBITDA between $232 and $257 million, up $7 million on the low end of the range and $2 million on the top end of the range;
• Machine Clothing revenue between $610 and $620 million, increasing $20 million on the low end and $10 million on the high end of the range;
• Machine Clothing Adjusted EBITDA between $210 and $225 million, up $5 million on the low end of the range;
• Albany Engineered Composites (AEC) revenue between $430 and $450 million, up $10 million; and
• Albany Engineered Composites Adjusted EBITDA between $82 and $92 million, up $2 million.