Albany International Corp. (NYSE:AIN), a global advanced textiles and
materials processing company with core businesses in machine clothing
and engineered composites, reported Q4 2013 income attributable to the
Company of $8.7 million. These results were increased by a net reduction
in restructuring costs of $2.1 million and income tax adjustments of
$0.6 million, and were decreased by foreign currency revaluation losses
of $1.6 million.
Q4 2012 income attributable to the Company was $8.2 million. These
results included restructuring charges of $0.9 million, foreign currency
revaluation losses of $4.0 million, and net unfavorable income tax
adjustments of $0.1 million.
Table 1 summarizes net sales and the effect of changes in currency
translation rates:
Table 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
|
|
Percent
|
|
Net Sales
|
|
|
|
Changes
|
|
Change
|
|
Three Months ended
|
|
|
|
in Currency
|
|
excluding
|
|
December 31,
|
|
Percent
|
|
Translation
|
|
Currency
|
(in thousands)
|
2013
|
|
2012
|
|
Change
|
|
Rates
|
|
Rate Effect
|
Machine Clothing (MC)
|
$166,938
|
|
$174,295
|
|
-4.2%
|
|
$478
|
|
-4.5%
|
Engineered Composites (AEC)
|
22,701
|
|
20,040
|
|
13.3%
|
|
-
|
|
13.3%
|
Total
|
$189,639
|
|
$194,335
|
|
-2.4%
|
|
$478
|
|
-2.7%
|
Q4 2013 gross profit was $72.4 million, or 38.2 percent of net sales,
compared to $79.0 million, or 40.6 percent of net sales, in the same
period of 2012. MC gross profit margin decreased from 45.0 percent in
2012 to 41.7 percent in 2013. The decrease in MC gross profit percentage
was principally attributable to lower sales in North America.
Selling, technical, general, and research (STG&R) expenses were $54.6
million, or 28.8 percent of net sales, in the fourth quarter of 2013,
including losses of $0.2 million related to the revaluation of
nonfunctional-currency assets and liabilities. In Q4 2012, STG&R
expenses were $58.4 million, or 30.0 percent of net sales, including
losses of $1.2 million related to the revaluation of
nonfunctional-currency assets and liabilities.
The following table summarizes fourth-quarter operating income:
Table 2
|
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|
Operating Income/(loss)
|
|
|
Three Months ended
|
|
|
December 31,
|
(in thousands)
|
|
2013
|
|
2012
|
Machine Clothing
|
|
$39,895
|
|
|
$43,112
|
|
Engineered Composites
|
|
1,486
|
|
|
(187
|
)
|
Research expenses
|
|
(8,138
|
)
|
|
(7,564
|
)
|
Unallocated expenses
|
|
(13,412
|
)
|
|
(15,696
|
)
|
Total
|
|
$19,831
|
|
|
$19,665
|
|
Operating results were affected by restructuring and currency
revaluation as described below:
Table 3
|
|
|
|
|
|
|
Expenses/(gain) in Q4 2013
|
|
Expenses/(gain) in Q4 2012
|
|
|
resulting from
|
|
resulting from
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Restructuring
|
|
Revaluation
|
|
Restructuring
|
|
Revaluation
|
Machine Clothing
|
|
($2,105)
|
|
$163
|
|
$1,071
|
|
$1,187
|
Engineered Composites
|
|
-
|
|
41
|
|
-
|
|
(2)
|
Unallocated expenses
|
|
-
|
|
-
|
|
($159)
|
|
1
|
Total
|
|
($2,105)
|
|
$204
|
|
$912
|
|
$1,186
|
The Company reported a net reduction in restructuring costs for Q4 2013,
principally due to a pension curtailment gain associated with the
Company’s Machine Clothing production facilities in France.
Q4 2013 Other expense, net, was $1.6 million, including losses related
to the revaluation of nonfunctional-currency balances of $1.3 million.
Q4 2012 Other expense, net, was $2.6 million, including losses of $2.8
million related to the revaluation of nonfunctional-currency balances.
The following table summarizes currency revaluation effects on certain
financial metrics:
Table 4
|
|
|
|
|
Income/(loss) attributable
|
|
|
to currency revaluation
|
|
|
Three Months ended
|
|
|
December 31,
|
(in thousands)
|
|
2013
|
|
2012
|
Operating income
|
|
($204)
|
|
($1,186)
|
Other income/(expense), net
|
|
(1,348)
|
|
( 2,829)
|
Total
|
|
($1,552)
|
|
($4,015)
|
The Company’s income tax rate, excluding tax adjustments, was 48.8
percent for Q4 2013, compared to 38.5 percent for the same period of
2012. The increase in the tax rate was primarily attributable to changes
in the amount and distribution of income and loss among the countries in
which the Company operates, including losses in Europe driven by
significant restructuring charges during 2013. Q4 2013 income tax
expense included a charge of $1.2 million for a change in the income tax
rate, and a net benefit of $1.8 million for discrete tax adjustments. Q4
2012 income tax expense included an unfavorable adjustment of $1.2
million related to a change in the tax rate, and net favorable discrete
income tax adjustments of $1.1 million.
The following tables summarize Adjusted EBITDA:
Table 5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended December 31, 2013
|
|
|
|
|
|
Research
|
|
|
|
|
Machine
|
|
Engineered
|
|
and
|
|
Total
|
(in thousands)
|
|
Clothing
|
|
Composites
|
|
Unallocated
|
|
Company
|
Net income
|
|
$39,895
|
|
$1,486
|
|
($32,553)
|
|
$8,828
|
Income from discontinued operations
|
|
-
|
|
-
|
|
(305)
|
|
(305)
|
Interest expense, net
|
|
-
|
|
-
|
|
2,703
|
|
2,703
|
Income tax expense
|
|
-
|
|
-
|
|
6,986
|
|
6,986
|
Depreciation and amortization
|
|
11,114
|
|
2,055
|
|
2,868
|
|
16,037
|
EBITDA
|
|
51,009
|
|
3,541
|
|
(20,301)
|
|
34,249
|
Restructuring and other, net
|
|
(2,105)
|
|
-
|
|
-
|
|
(2,105)
|
Foreign currency revaluation losses
|
|
163
|
|
41
|
|
1,348
|
|
1,552
|
Income attributable to noncontrolling interest in ASC
|
|
-
|
|
(141)
|
|
-
|
|
(141)
|
Adjusted EBITDA
|
|
$49,067
|
|
$3,441
|
|
($18,953)
|
|
$33,555
|
Table 6
|
|
|
|
|
|
|
|
|
|
|
Three Months ended December 31, 2012
|
|
|
|
|
|
|
Research
|
|
|
|
|
|
Machine
|
|
Engineered
|
|
and
|
|
Total
|
(in thousands)
|
|
|
Clothing
|
|
Composites
|
|
Unallocated
|
|
Company
|
Net income
|
|
|
$43,112
|
|
($187
|
)
|
|
($34,707
|
)
|
|
$8,218
|
|
Income from discontinued operations
|
|
|
-
|
|
-
|
|
|
(238
|
)
|
|
(238
|
)
|
Interest expense, net
|
|
|
-
|
|
-
|
|
|
3,991
|
|
|
3,991
|
|
Income tax expense
|
|
|
-
|
|
-
|
|
|
5,127
|
|
|
5,127
|
|
Depreciation and amortization
|
|
|
11,576
|
|
1,595
|
|
|
2,564
|
|
|
15,735
|
|
EBITDA
|
|
|
54,688
|
|
1,408
|
|
|
(23,263
|
)
|
|
32,833
|
|
Restructuring and other, net
|
|
|
1,071
|
|
-
|
|
|
(159
|
)
|
|
912
|
|
Foreign currency revaluation losses/(gains)
|
|
|
1,187
|
|
(2
|
)
|
|
2,830
|
|
|
4,015
|
|
Adjusted EBITDA
|
|
|
$56,946
|
|
$1,406
|
|
|
($20,592
|
)
|
|
$37,760
|
|
Capital spending for equipment and software was $16.9 million for Q4
2013, resulting in a full-year total of $64.5 million, including $36.9
million for the Engineered Composites segment and its expansion
associated with the LEAP program. Depreciation and amortization was
$16.0 million for Q4 2013.
CEO Comments
President and CEO Joe Morone said, “Due primarily to
softer-than-expected market conditions in North America, the anticipated
Q4 rebound in Machine Clothing failed to materialize. As expected, sales
held firm in Europe and Asia, continuing the trend of the past several
quarters. But in North America–our largest and most profitable
market–they weakened sharply, which in turn, dragged down gross margins.
While full-year performance in North America was excellent, in Q4 sales
were 7.5 percent lower than in Q3, and more than 10 percent lower than
in Q4 2012. November was especially soft, as certain producers in the
containerboard market, our largest market segment, took substantial
downtime in order to reduce their inventories. We had been expecting
some decline due to seasonal end-of-the-year inventory reductions. But
we had not anticipated the magnitude of the slowdown in the
containerboard market, where in some cases, customers pulled forward
downtime that had been scheduled for 2014.
“Nonetheless, we continue to expect a strong first half for MC in 2014.
This view is bolstered by strong MC orders in Q4, improvement in North
American containerboard production in December, and strong North
American MC shipments in January. In particular, we expect first-half
sales in North America to be much stronger than Q4 levels, and to be
steady or somewhat higher in both Asia and Europe. More generally, we
view the macro-economy, rather than structural or competitive factors,
as the most important driver of our MC performance in 2014.
“AEC had another strong quarter in Q4. Sales grew by more than 10
percent compared to a year ago, Adjusted EBITDA more than doubled,
performance on the LEAP program was once again strong, and the
development pipeline continued to expand. While there were no major
milestones scheduled in Q4, we continued to make steady progress toward
the LEAP ramp. The biggest change in AEC over the past several months
has been the growth in the array of potential airframe applications. A
year ago, we were working on one airframe opportunity: a ceramic matrix
composite (CMC) exhaust nozzle for Boeing. We continue to work on this
CMC application, but at the same time we are now actively engaged with
our customers in exploring a broad portfolio of additional potential
airframe applications, including components for commercial aircraft
wing, empennage, fuselage, and nacelle substructures, as well as
components for Department of Defense rotorcraft and unmanned aerial
vehicles. The revenue potential of these airframe applications ranges
from small (less than $5 million per year) to large (tens of millions of
dollars per year), with potential for initial production revenue ranging
from two years from now to a decade or more from now. We expect several
of these explorations to lead to jointly funded R&D projects this year.
To be clear, most of these potential applications are still in the early
stages of development. But given the rapid expansion of this airframe
pipeline, along with the work we are doing with Safran on potential
enhancements to LEAP, we continue to hold to our objective of $300 to
$500 million of revenue by 2020.
“As for the 2014 outlook for AEC, we expect full-year sales to grow by
roughly 10 percent, while full-year Adjusted EBITDA has the potential to
nearly double. The most important performance milestone for the business
will be on-time delivery of parts for LEAP engine tests.
“In sum, MC Q4 performance was held back by what we view as a temporary
softening of the North American containerboard market, while in AEC,
performance was strong on all fronts. Our outlook for the first half of
2014 remains unchanged. Assuming a gradually improving macroeconomic
environment, we expect a strong rebound in MC and continued strong
performance in AEC.”
CFO Comments
CFO and Treasurer John Cozzolino commented, “Net debt declined another
$13 million in the quarter, and was $82 million at year-end (see Table
9). The Company’s leverage ratio, as defined in our primary debt
agreements, finished the year at 1.78. In October 2013, the Company
utilized funds borrowed from its bank credit facility to repay $50
million of its 6.84% senior notes with Prudential, effectively reducing
our annual interest costs on that portion of our debt by over five
percentage points at current market rates. At the end of the year, $100
million of notes were still outstanding, with $50 million due to be
repaid in October 2015 and the remaining $50 million due in October 2017.
“At the end of Q4, $130 million was available on our $330 million bank
credit facility. Cash balances, predominately held outside of the U.S.,
totaled about $223 million at the end of Q4. During Q4, the Company
repatriated to the U.S. approximately $12 million of cash held outside
the country, bringing the full-year total repatriations amount to about
$35 million.
“Cash flow during the quarter was bolstered by the completion of two
transactions. First, as previously disclosed, the Company received $28
million from a subsidiary of Safran S.A. in exchange for a 10 percent
equity interest in ASC. The funds were received directly by ASC and are
currently being held as cash, to be used for future cash flow
requirements. Second, the Company received $3.8 million, representing
the remaining proceeds from the 2012 sale of our PrimaLoft®
business.
“Offsetting the cash received from those transactions were significant
cash outlays for capital expenditures and restructuring expenses. During
Q4, capital spending was almost $17 million, bringing the full-year
total to about $64 million. Approximately $37 million of that total
spending for the year was related to AEC. Primarily due to a year-end
carryover of about $52 million due on previously approved projects,
capital spending in 2014 is expected to be about $65 million to $75
million.
“Cash outlays for restructuring were about $16 million in Q4, mostly
related to restructuring activities in France. At the end of the year,
the Company had a restructuring accrual of about $10 million, with over
$8 million of that accrual related to France. Cash payments related to
the accrual, as well as any other restructuring costs related to France,
are expected to occur during 2014.
“The Company’s income tax rate, exclusive of tax adjustments, was 49
percent for the full-year 2013, compared to 38.5 percent for the same
period in 2012. The increase in the 2013 rate is primarily due to the
adverse impact of restructuring activities. The tax rate for the year is
higher than our previous estimate of 41 percent due to a
larger-than-expected Q4 change in the mix of pre-tax income among the
jurisdictions in which we operate. Including payments related to tax
audit activities, cash paid for income taxes in 2013 was about $29
million.”
The Company plans a webcast to discuss fourth-quarter 2013 financial
results on Tuesday, February 11, 2014, 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 19
plants in 11 countries, employs 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.
This release contains certain items, such as earnings before
interest, taxes, depreciation and amortization (EBITDA), Adjusted
EBITDA, sales excluding currency effects, income tax rate exclusive of
income tax adjustments, net debt, and certain income and expense items
on a per share basis that could be considered non-GAAP financial
measures. Such items are provided because management believes that, when
presented together with 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. An understanding of the
impact in a particular quarter of specific restructuring costs, or other
gains and losses, on operating income or EBITDA can give management and
investors additional insight into quarterly performance, especially when
compared to quarters in which such items had a greater or lesser effect,
or no effect. All non-GAAP financial measures in this release relate to
the Company’s continuing operations.
The effect of changes in currency translation rates 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 Income tax adjustments by adding discrete tax items to the
effect of a change in tax rate for the reporting period. The Company
calculates its Income tax rate, exclusive of Income tax adjustments, by
removing Income tax adjustments from total Income tax expense, then
dividing that result by Income before tax. The Company calculates EBITDA
by removing the following from Net income: Interest expense net, Income
taxes, Depreciation and Amortization, and Income or loss from
Discontinued Operations. Adjusted EBITDA is calculated by adding to
EBITDA, costs associated with restructuring and pension settlement
charges, adding or subtracting revaluation losses or gains, subtracting
building sale gains, and subtracting Income attributable to the
noncontrolling interest in ASC. The Company believes that EBITDA and
Adjusted EBITDA provide useful information to investors because they
provide an indication of the strength and performance of the Company's
ongoing business operations, including its ability to fund discretionary
spending such as capital expenditures and strategic investments, as well
as its ability to incur and service debt. While depreciation and
amortization are operating costs under GAAP, they are non-cash expenses
equal to current period allocation of costs associated with capital and
other long-lived investments made in prior periods. While restructuring
expenses, foreign currency revaluation losses or gains, pension
settlement charges, and building sale gains have an impact on the
Company's net income, removing them from EBITDA can provide, in the
opinion of the Company, a better measure of operating performance.
EBITDA is also a calculation commonly used by investors and analysts to
evaluate and compare the periodic and future operating performance and
value of companies. EBITDA, as defined by the Company, may not be
similar to EBITDA measures of other companies. Such EBITDA measures may
not be 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 per share
amount for items included in continuing operations by using the
effective tax rate utilized for the most recent reporting period, the
full-year tax rate for the comparable period of the prior year, and the
weighted average number of shares outstanding for each period.
Table 7
Quarter ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share
|
|
Pre-tax
|
|
Tax Effect
|
|
After-tax
|
|
Shares
|
|
Per
|
amounts)
|
|
amounts
|
|
|
|
Effect
|
|
Outstanding
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
Effect
|
Restructuring and other, net credit
|
|
$2,105
|
|
$1,027
|
|
$1,078
|
|
31,748
|
|
$0.03
|
Foreign currency revaluation losses
|
|
1,552
|
|
757
|
|
795
|
|
31,748
|
|
0.03
|
Unfavorable effect of change in income tax rate
|
|
-
|
|
1,222
|
|
1,222
|
|
31,748
|
|
0.04
|
Net discrete income tax benefit
|
|
-
|
|
1,804
|
|
1,804
|
|
31,748
|
|
0.06
|
Table 8
Quarter ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share
|
|
Pre-tax
|
|
Tax Effect
|
|
After-tax
|
|
Shares
|
|
Per Share
|
amounts)
|
|
amounts
|
|
|
|
Effect
|
|
Outstanding
|
|
Effect
|
Restructuring and other, net
|
|
$912
|
|
$351
|
|
$561
|
|
31,402
|
|
$0.02
|
Foreign currency revaluation losses
|
|
4,015
|
|
1,546
|
|
2,469
|
|
31,402
|
|
0.08
|
Unfavorable effect of change in income tax rate
|
|
-
|
|
1,178
|
|
1,178
|
|
31,402
|
|
0.04
|
Net discrete income tax benefit
|
|
-
|
|
1,098
|
|
1,098
|
|
31,402
|
|
0.03
|
The following table contains the calculation of net debt:
Table 9
|
|
|
|
|
|
|
(in thousands)
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
2013
|
|
2013
|
|
2012
|
Notes and loans payable
|
|
$625
|
|
$565
|
|
$586
|
Current maturities of long-term debt
|
|
3,764
|
|
55,014
|
|
83,276
|
Long-term debt
|
|
300,111
|
|
252,115
|
|
235,877
|
Total debt
|
|
304,500
|
|
307,694
|
|
319,739
|
Cash
|
|
222,666
|
|
212,809
|
|
190,718
|
Net debt
|
|
$81,834
|
|
$94,885
|
|
$129,021
|
The following tables summarize full-year Adjusted EBITDA:
Year ended December 31, 2013
|
|
|
|
|
|
Research
|
|
|
|
|
Machine
|
|
Engineered
|
|
and
|
|
Total
|
(in thousands)
|
|
Clothing
|
|
Composites
|
|
Unallocated
|
|
Company
|
Net income
|
|
$136,698
|
|
($2,974
|
)
|
|
($116,066
|
)
|
|
$17,658
|
|
Loss from discontinued operations
|
|
-
|
|
-
|
|
|
46
|
|
|
46
|
|
Interest expense, net
|
|
-
|
|
-
|
|
|
13,759
|
|
|
13,759
|
|
Income tax expense
|
|
-
|
|
-
|
|
|
13,372
|
|
|
13,372
|
|
Depreciation and amortization
|
|
45,237
|
|
7,640
|
|
|
10,912
|
|
|
63,789
|
|
EBITDA
|
|
181,935
|
|
4,666
|
|
|
(77,977
|
)
|
|
108,624
|
|
Restructuring and other, net
|
|
24,568
|
|
540
|
|
|
-
|
|
|
25,108
|
|
Foreign currency revaluation losses
|
|
295
|
|
41
|
|
|
5,231
|
|
|
5,567
|
|
Gain on sale of former manufacturing facility
|
|
-
|
|
-
|
|
|
(3,763
|
)
|
|
(3,763
|
)
|
Income attributable to noncontrolling interest in ASC
|
|
-
|
|
(141
|
)
|
|
-
|
|
|
(141
|
)
|
Adjusted EBITDA
|
|
$206,798
|
|
$5,106
|
|
|
($76,509
|
)
|
|
$135,395
|
|
Table 11
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
|
|
|
|
Research
|
|
|
|
|
Machine
|
|
Engineered
|
|
and
|
|
Total
|
(in thousands)
|
|
Clothing
|
|
Composites
|
|
Unallocated
|
|
Company
|
Net income
|
|
$163,873
|
|
($840
|
)
|
|
($132,056
|
)
|
|
$30,977
|
|
Income from discontinued operations
|
|
-
|
|
-
|
|
|
(71,820
|
)
|
|
(71,820
|
)
|
Interest expense, net
|
|
-
|
|
-
|
|
|
16,601
|
|
|
16,601
|
|
Income tax expense/(benefit)
|
|
-
|
|
-
|
|
|
(27,523
|
)
|
|
(27,523
|
)
|
Depreciation and amortization
|
|
46,843
|
|
5,920
|
|
|
10,304
|
|
|
63,067
|
|
EBITDA
|
|
210,716
|
|
5,080
|
|
|
(204,494
|
)
|
|
11,302
|
|
Restructuring and other, net
|
|
7,386
|
|
-
|
|
|
(325
|
)
|
|
7,061
|
|
Foreign currency revaluation losses
|
|
1,633
|
|
2
|
|
|
5,715
|
|
|
7,350
|
|
Pension plan settlement charges
|
|
-
|
|
-
|
|
|
119,735
|
|
|
119,735
|
|
Adjusted EBITDA
|
|
$219,735
|
|
$5,082
|
|
|
($79,369
|
)
|
|
$145,448
|
|
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” 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 economic and paper industry trends
and conditions during 2014 and in future years; sales, EBITDA, Adjusted
EBITDA and operating income expectations in 2014 and in future periods
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 AEC sales growth potential; the
amount and timing of capital expenditures, future tax rates and cash
paid for taxes, depreciation and amortization; the amount and timing of
charges related to announced restructuring activities; future debt
levels and debt covenant ratios; and 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
|
|
|
|
|
Year Ended
|
December 31,
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
$189,639
|
|
|
$194,335
|
|
|
Net sales
|
|
|
|
$757,414
|
|
|
$760,941
|
|
117,288
|
|
|
115,376
|
|
|
Cost of goods sold
|
|
|
466,860
|
|
|
455,545
|
|
|
|
|
|
|
|
|
|
|
|
|
72,351
|
|
|
78,959
|
|
|
Gross profit
|
|
|
|
290,554
|
|
|
305,396
|
|
39,998
|
|
|
44,439
|
|
|
Selling, general, and administrative expenses
|
|
157,688
|
|
|
169,774
|
|
14,627
|
|
|
13,943
|
|
|
Technical, product engineering, and research expenses
|
|
55,667
|
|
|
52,962
|
|
(2,105
|
)
|
|
912
|
|
|
Restructuring and other, net
|
|
|
25,108
|
|
|
7,061
|
|
-
|
|
|
-
|
|
|
Pension settlement expense
|
|
|
-
|
|
|
119,735
|
|
|
|
|
|
|
|
|
|
|
|
|
19,831
|
|
|
19,665
|
|
|
Operating income/(loss)
|
|
|
52,091
|
|
|
(44,136
|
)
|
2,703
|
|
|
3,991
|
|
|
Interest expense, net
|
|
|
13,759
|
|
|
16,601
|
|
1,619
|
|
|
2,567
|
|
|
Other expense/(income), net
|
|
|
7,256
|
|
|
7,629
|
|
|
|
|
|
|
|
|
|
|
|
|
15,509
|
|
|
13,107
|
|
|
Income/(loss) before income taxes
|
|
31,076
|
|
|
(68,366
|
)
|
6,986
|
|
|
5,127
|
|
|
Income tax expense/(benefit)
|
|
|
13,372
|
|
|
(27,523
|
)
|
|
|
|
|
|
|
|
|
|
|
|
8,523
|
|
|
7,980
|
|
|
Income/(loss) from continuing operations
|
|
17,704
|
|
|
(40,843
|
)
|
|
|
|
|
|
|
|
|
|
|
|
500
|
|
|
-
|
|
|
(Loss)/income from operations of discontinued business
|
|
(75
|
)
|
|
4,776
|
|
-
|
|
|
(80
|
)
|
|
Gain/(loss) on sale of discontinued business
|
|
-
|
|
|
92,296
|
|
195
|
|
|
(318
|
)
|
|
Income tax (benefit)/expense on discontinued operations
|
|
(29
|
)
|
|
25,252
|
|
305
|
|
|
238
|
|
|
(Loss)/income from discontinued operations
|
|
(46
|
)
|
|
71,820
|
|
8,828
|
|
|
8,218
|
|
|
Net income
|
|
|
|
17,658
|
|
|
30,977
|
|
141
|
|
|
-
|
|
|
Net income attributable to the noncontrolling interest
|
|
141
|
|
|
-
|
|
$8,687
|
|
|
$8,218
|
|
|
Net income attributable to the Company
|
|
$17,517
|
|
|
$30,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Company shareholders - Basic
|
|
|
|
$0.26
|
|
|
$0.25
|
|
|
Income/(loss) from continuing operations
|
|
$0.55
|
|
|
($1.30
|
)
|
0.01
|
|
|
0.01
|
|
|
Discontinued operations
|
|
|
0.00
|
|
|
2.29
|
|
$0.27
|
|
|
$0.26
|
|
|
Net income attributable to the Company
|
|
$0.55
|
|
|
$0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Company shareholders - Diluted
|
|
|
$0.26
|
|
|
$0.25
|
|
|
Income/(loss) from continuing operations
|
|
$0.55
|
|
|
($1.30
|
)
|
0.01
|
|
|
0.01
|
|
|
Discontinued operations
|
|
|
0.00
|
|
|
2.27
|
|
$0.27
|
|
|
$0.26
|
|
|
Net income attributable to the Company
|
|
$0.55
|
|
|
$0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of the Company used in computing earnings per share:
|
|
|
|
|
31,748
|
|
|
31,402
|
|
|
Basic
|
|
|
|
31,649
|
|
|
31,356
|
|
32,020
|
|
|
31,681
|
|
|
Diluted
|
|
|
|
31,934
|
|
|
31,636
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.15
|
|
|
$0.14
|
|
|
Dividends per share
|
|
|
$0.59
|
|
|
$0.55
|
|
ALBANY INTERNATIONAL CORP.
|
CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share data)
|
(unaudited)
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2013
|
|
2012
|
ASSETS
|
|
|
|
|
Cash and cash equivalents
|
|
$222,666
|
|
|
$190,718
|
|
Accounts receivable, net
|
|
163,547
|
|
|
171,535
|
|
Inventories
|
|
112,739
|
|
|
119,183
|
|
Income taxes receivable and deferred
|
|
13,873
|
|
|
20,594
|
|
Prepaid expenses and other current assets
|
|
9,659
|
|
|
10,435
|
|
Total current assets
|
|
522,484
|
|
|
512,465
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
418,830
|
|
|
420,154
|
|
Intangibles
|
|
616
|
|
|
848
|
|
Goodwill
|
|
78,890
|
|
|
76,522
|
|
Deferred taxes
|
|
119,612
|
|
|
123,886
|
|
Other assets
|
|
26,456
|
|
|
22,822
|
|
Total assets
|
|
$1,166,888
|
|
|
$1,156,697
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
Notes and loans payable
|
|
$625
|
|
|
$586
|
|
Accounts payable
|
|
36,397
|
|
|
35,117
|
|
Accrued liabilities
|
|
112,331
|
|
|
103,257
|
|
Current maturities of long-term debt
|
|
3,764
|
|
|
83,276
|
|
Income taxes payable and deferred
|
|
5,391
|
|
|
13,552
|
|
Total current liabilities
|
|
158,508
|
|
|
235,788
|
|
|
|
|
|
|
Long-term debt
|
|
300,111
|
|
|
235,877
|
|
Other noncurrent liabilities
|
|
106,014
|
|
|
136,012
|
|
Deferred taxes and other credits
|
|
54,476
|
|
|
55,509
|
|
Total liabilities
|
|
619,109
|
|
|
663,186
|
|
|
|
|
|
|
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
|
|
|
|
|
36,996,227 in 2013 and 36,642,204 in 2012
|
|
37
|
|
|
37
|
|
Class B Common Stock, par value $.001 per share;
|
|
|
|
|
authorized 25,000,000 shares; issued and
|
|
|
|
|
outstanding 3,236,098 in 2013 and 2012
|
|
3
|
|
|
3
|
|
Additional paid in capital
|
|
416,728
|
|
|
395,381
|
|
Retained earnings
|
|
434,598
|
|
|
435,775
|
|
Accumulated items of other comprehensive income:
|
|
|
|
|
Translation adjustments
|
|
(138
|
)
|
|
(7,659
|
)
|
Pension and postretirement liability adjustments
|
|
(48,383
|
)
|
|
(69,484
|
)
|
Derivative valuation adjustment
|
|
(977
|
)
|
|
(2,878
|
)
|
Treasury stock (Class A), at cost 8,463,635 shares
|
|
|
|
|
in 2013 and 8,467,873 in 2012
|
|
(257,571
|
)
|
|
(257,664
|
)
|
Total Company shareholders' equity
|
|
544,297
|
|
|
493,511
|
|
Noncontrolling interest
|
|
3,482
|
|
|
-
|
|
Total equity
|
|
547,779
|
|
|
493,511
|
|
Total liabilities and shareholders' equity
|
|
$1,166,888
|
|
|
$1,156,697
|
|
ALBANY INTERNATIONAL CORP.
|
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Year Ended
|
December 31,
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
$8,828
|
|
|
|
$8,218
|
|
|
Net income
|
|
|
|
|
|
$17,658
|
|
|
$30,977
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by /(used
in) operating activities:
|
|
|
|
14,314
|
|
|
|
14,131
|
|
|
Depreciation
|
|
|
|
|
57,182
|
|
|
56,769
|
|
1,723
|
|
|
|
1,604
|
|
|
Amortization
|
|
|
|
|
6,607
|
|
|
6,466
|
|
-
|
|
|
|
203
|
|
|
Noncash interest expense
|
|
|
|
|
-
|
|
|
1,027
|
|
(7,987
|
)
|
|
|
2,719
|
|
|
Change in long-term liabilities, deferred taxes and other credits
|
|
(12,261
|
)
|
|
(123,887
|
)
|
-
|
|
|
|
-
|
|
|
Write-off of pension liability adjustment due to settlement
|
|
-
|
|
|
118,350
|
|
290
|
|
|
|
227
|
|
|
Provision for write-off of property, plant and equipment
|
|
619
|
|
|
427
|
|
-
|
|
|
|
(81
|
)
|
|
Loss/(gain) on disposition of assets
|
|
|
|
(3,763
|
)
|
|
(92,457
|
)
|
(190
|
)
|
|
|
(3
|
)
|
|
Excess tax benefit of options exercised
|
|
|
|
(1,134
|
)
|
|
(40
|
)
|
121
|
|
|
|
995
|
|
|
Compensation and benefits paid or payable in Class A Common Stock
|
|
(766
|
)
|
|
2,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities, net of business
divestitures:
|
|
|
|
|
(8,399
|
)
|
|
|
1,880
|
|
|
Accounts receivable
|
|
|
|
|
(8,878
|
)
|
|
(4,990
|
)
|
5,979
|
|
|
|
3,189
|
|
|
Inventories
|
|
|
|
|
5,739
|
|
|
11,565
|
|
2,251
|
|
|
|
843
|
|
|
Prepaid expenses and other current assets
|
|
|
545
|
|
|
592
|
|
5,422
|
|
|
|
(760
|
)
|
|
Income taxes prepaid and receivable
|
|
|
|
5,731
|
|
|
9,472
|
|
(2,969
|
)
|
|
|
7,539
|
|
|
Accounts payable
|
|
|
|
|
955
|
|
|
3,298
|
|
(20,377
|
)
|
|
|
(5,455
|
)
|
|
Accrued liabilities
|
|
|
|
|
4,628
|
|
|
7,616
|
|
1,630
|
|
|
|
8,070
|
|
|
Income taxes payable
|
|
|
|
|
(7,348
|
)
|
|
7,308
|
|
(1,059
|
)
|
|
|
1,466
|
|
|
Other, net
|
|
|
|
|
(2,883
|
)
|
|
(776
|
)
|
(423
|
)
|
|
|
44,785
|
|
|
Net cash provided by/(used in) operating activities
|
|
62,631
|
|
|
34,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
(15,658
|
)
|
|
|
(11,809
|
)
|
|
Purchases of property, plant and equipment
|
|
|
(61,844
|
)
|
|
(37,046
|
)
|
(1,237
|
)
|
|
|
(7
|
)
|
|
Purchased software
|
|
|
|
|
(2,613
|
)
|
|
(161
|
)
|
-
|
|
|
|
-
|
|
|
Proceeds from sale of assets
|
|
|
|
6,268
|
|
|
-
|
|
3,797
|
|
|
|
-
|
|
|
Proceeds from sale of discontinued operations, net of expenses
|
|
16,797
|
|
|
150,654
|
|
(13,098
|
)
|
|
|
(11,816
|
)
|
|
Net cash (used in)/provided by investing activities
|
|
(41,392
|
)
|
|
113,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
60,276
|
|
|
|
864
|
|
|
Proceeds from borrowings
|
|
|
|
|
117,452
|
|
|
46,028
|
|
(63,470
|
)
|
|
|
(3,774
|
)
|
|
Principal payments on debt
|
|
|
|
(132,691
|
)
|
|
(102,128
|
)
|
28,000
|
|
|
|
-
|
|
|
Cash received from the sale of noncontrolling interest
|
|
28,000
|
|
|
-
|
|
909
|
|
|
|
232
|
|
|
Proceeds from options exercised
|
|
|
|
5,538
|
|
|
1,311
|
|
190
|
|
|
|
3
|
|
|
Excess tax benefit of options exercised
|
|
|
|
1,134
|
|
|
40
|
|
-
|
|
|
|
-
|
|
|
Debt acquisition costs
|
|
|
|
|
(1,639
|
)
|
|
-
|
|
(4,759
|
)
|
|
|
(8,787
|
)
|
|
Dividends paid
|
|
|
|
|
(13,929
|
)
|
|
(21,315
|
)
|
21,146
|
|
|
|
(11,462
|
)
|
|
Net cash (used in)/provided by financing activities
|
|
3,865
|
|
|
(76,064
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,232
|
|
|
|
(4,728
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
6,844
|
|
|
(81
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,857
|
|
|
|
16,779
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
31,948
|
|
|
71,809
|
|
212,809
|
|
|
|
$173,939
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
190,718
|
|
|
118,909
|
|
$222,666
|
|
|
|
$190,718
|
|
|
Cash and cash equivalents at end of period
|
|
|
$222,666
|
|
|
$190,718
|
|
Copyright Business Wire 2014