Q2 2026 Albany International Corp Earnings Call Transcript
Key Points
- Adjusted EPS exceeded forecast range despite modestly lower-than-expected revenue, with strongest adjusted EBITDA in two years.
- Engineered Composites segment achieved record quarterly revenue of $150.8 million, up 16% year-over-year, driven by ramps in LEAP, Boeing programs, and CH-53K.
- Strong margin performance in Machine Clothing (28% adjusted EBITDA margin) despite lower volumes, reflecting disciplined cost management and operational execution.
- Strategic review of Salt Lake City site progressing well, with multiple indications of interest and down-selection to eight final candidates, indicating strong market interest.
- New business wins and collaborations, including Pratt & Whitney GTF contract, AMP collaboration, and ATI's Advanced Wing project, position for long-term growth.
- Machine Clothing revenue expected to be slightly down for full-year 2025 due to softer demand in Americas, customer consolidations, and capacity rationalization.
- Additional downtime from a machine replacement in North America impacted Q2 revenue, with reassembly not complete until end of year.
- Tooling for a next-generation defense contract shifted to second half, causing Engineered Composites revenue to slightly miss expectations.
- Free cash flow was a net use of $14.5 million in Q2, driven by inventory growth to support ramps and seasonal shutdowns, a significant year-over-year decline.
- Demand environment remains fluid with geopolitical uncertainty and elevated energy costs potentially extending challenges in the paper industry, particularly in Asia and South America.
Hello everyone.
Thank you for joining us and welcome to Albany International's second quarter 2026 earnings conference call. (Operator Instructions)
I will now hand the conference call over to Karen Blumquist, Director of Investor Relations. Karen, please go ahead.
Thank you, operator, and good morning, everyone. Welcome to Albany International's second quarter 2026 earnings call. As a reminder for those listening on the call, please refer to our press release issued this morning detailing our quarterly financial results. Contained in the text of the release is a notice regarding our forward-looking statements and the use of certain non-GAAP financial measures and their reconciliation to GAAP.
For the purposes of this conference call, those same statements apply to our verbal remarks this morning. Additionally, our remarks today may reference our earnings presentation, which is available on the Investor Relations section of our website, albint.com.
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