Albany International Corp. Earnings Call Highlights Positive Outlook

Albany International Corp. ((AIN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Albany International Corp. recently held its earnings call, revealing a positive sentiment driven by strong operational performance and strategic achievements. Despite facing some revenue declines and regional challenges, the company maintains a robust backlog and continues to improve efficiency, painting an optimistic outlook for the future.

Strong Financial Performance and Shareholder Returns

Albany International reported impressive financial results with revenues reaching $289 million and an adjusted EBITDA margin of 19.3%. The adjusted diluted EPS stood at $0.73. The company exceeded its free cash flow expectations and anticipates another strong year in this regard. Shareholder returns were bolstered by a dividend and the repurchase of $69 million worth of shares, leaving $193 million under the share repurchase authorization.

Machine Clothing Segment Success

The Machine Clothing segment demonstrated significant success, reporting revenues of $175 million and an adjusted EBITDA margin of 28.4%. The integration of Heimbach is on track, and the segment boasts a strong global order backlog with an order-to-sales ratio exceeding one.

New Business Wins in Engineered Composites

The Engineered Composites (AEC) segment continues to secure new business, including a long-term agreement with Bell on the 525 program and an addition to the JASSM backlog. The AEC backlog reached $1.3 billion at the end of the quarter, providing a solid foundation for future performance.

Operational Improvements and Efficiency Gains

Albany International is actively pursuing operational improvements and efficiency gains through initiatives like the integration of Heimbach and SAP system upgrades to S/4HANA. These efforts are expected to yield substantial synergy benefits.

Revenue Decline in Key Segments

Despite overall positive performance, the company experienced a 7.8% decline in consolidated net sales compared to the previous year. The Machine Clothing segment saw a 5.7% decrease in net sales, while AEC net sales dropped by 11% due to EAC adjustments and lower LEAP sales.

Challenges in China and North America

The Machine Clothing segment faced challenges with a slight decline in deliveries in North America and mixed performance in Asia, particularly in China.

EAC Adjustments Impacting AEC Segment

The AEC segment recorded a total EAC adjustment of $7 million for the quarter, affecting the adjusted EBITDA margin, which decreased to 13.5% from 16.6% in the prior year.

Forward-Looking Guidance

Albany International’s guidance for 2025 remains optimistic, with expectations of stronger performance in the second half of the year due to ramp-ups in AEC operations and the acceleration of Heimbach synergies. The company reaffirmed its full-year guidance and highlighted the strategic importance of its regional supply chain setup.

In summary, Albany International’s earnings call conveyed a positive sentiment, underscored by strong financial performance and strategic wins in key segments. While facing some revenue declines and regional challenges, the company’s robust backlog and efficiency improvements provide a promising outlook for the future.