Textile processing

2020-11-05

Albany International reports third-quarter 2020 results

Albany International Corp. (NYSE:AIN) today reported operating results for its third quarter of 2020, which ended September 30, 2020. "Our top priority remains the health and safety of our employees, and I am proud of our employees' commitment to keeping one another safe and our operations performing well,â€ said Albany International President and Chief Executive Officer, Bill Higgins.

â€œWe are reporting another quarter of strong financial performance despite the challenging business conditions resulting from the pandemic. Over the past nine months, weâ€™ve adjusted our headcount, controlled costs and executed well across our organization. These actions positioned us to deliver healthy third-quarter profit margins despite the effects of the economic downturn on our top line. Additionally, late in the third quarter we successfully reopened our three LEAP production facilities.

â€œThe Company is well positioned to pursue our strategies for long-term growth in our markets with positive free cash flow, a strong balance sheet and ample liquidity. Our Machine Clothing segment is the global market leader with an unmatched reputation for product reliability, customer service and product innovation. We expect near-term Albany Engineered Composites results will be driven by our current portfolio of defense and commercial programs. Longer-term, we expect organic growth to be driven by additional conventional composite contract wins and the use of our proprietary 3D composite technologies in a broader array of demanding aerospace applications,â€ concluded Higgins.

For the third quarter ended September 30, 2020:

Net sales were $212.0 million, down $59.1 million, or 21.8%, when compared to the prior year. Sales declined $46.6 million, or 38.9%, in the Engineered Composites segment driven by the temporary production halt on the LEAP program.

Gross profit of $87.3 million was 16.1% lower than the $104.1 million reported for the same period of 2019.

Selling, Technical, General, and Research (STG&R) expenses were $47.8 million, compared to $48.7 million in the same period of 2019. Revaluation of foreign currency balances increased STG&R by $1.3 million in 2020, compared to a decrease of $1.0 million in the same period of 2019.

Operating income was $38.8 million, compared to $55.7 million in the prior year, a decrease of 30.4%, as lower gross profit and higher restructuring expenses were partially offset by lower STG&R expenses.

The effective tax rate was 24.7% for the third quarter of each year. Income tax adjustments reduced third-quarter income tax expense by $3.0 million in 2020 and $1.5 million in 2019.

Net income attributable to the Company was $29.6 million ($0.92 per share), compared to $40.0 million ($1.24 per share) in Q3 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.96 per share in the third quarter of 2020, compared to $1.17 in the same period of last year.

Adjusted EBITDA (a non-GAAP measure) was $61.8 million, compared to $71.4 million in Q3 2019, a decrease of 13.5%.

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

â€œWe were very pleased with the Company's performance this quarter. We finished the quarter with a very strong balance sheet. We expect to continue to generate strong free cash flow during the balance of the year. Exploiting the strength of our balance sheet and strong operational performance, we have extended the Company's revolving credit agreement until October 2024," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are also updating our full-year guidance, reflecting the strong operational performance the Company delivered in the third quarter."

Outlook for Full-Year 2020

Albany International is updating financial guidance for the full-year 2020: