Nonwovens / Technical Textiles

2021-02-11

Albany International reported operating results for its fourth quarter of 2020

"Albany International finished 2020 with another strong quarter, particularly in light of the challenging business conditions in some of our end markets,” said Albany International President and Chief Executive Officer, Bill Higgins.

“Our operations performed exceptionally well for customers and shareholders. Both segments delivered impressive profit margins despite top-line headwinds caused by the pandemic and the Boeing 737 MAX grounding.

“The Machine Clothing segment managed its business remarkably well during 2020. For the full year, the Machine Clothing segment reached the same level of Adjusted EBITDA as 2019 despite a 5% reduction in segment revenues. We expect another strong year in 2021. We are encouraged by growth in our order book and strengthening end-markets that we serve in this segment.

“In 2020, the Engineered Composites segment expanded its Adjusted EBITDA margin by 360 basis points despite a revenue decline of 28%. Once we get through the inventory destocking challenges we expect to face in 2021, the segment is well-positioned to grow based on the strength of our program portfolio,” concluded Higgins.

For the fourth quarter ended December 31, 2020:

  • Net sales were $226.9 million, down $30.8 million, or 12%, when compared to the prior year. Sales declined $24.4 million, or 23%, in the Engineered Composites segment driven primarily by lower demand for LEAP components.
  • Gross profit of $91.3 million was 6% lower than the $96.6 million reported for the same period of 2019.
  • Selling, Technical, General, and Research (STG&R) expenses were $54.8 million, compared to $51.3 million in the same period of 2019. Revaluation of foreign currency balances increased STG&R by $3.0 million in 2020, compared to an increase of $1.4 million in the same period of 2019.
  • Operating income was $35.0 million, compared to $43.6 million in the prior year, a decrease of 20%, principally due to lower gross profit and higher STG&R expenses.
  • The effective tax rate was 13.5%, compared to 24.8% for the fourth quarter of 2019. Income tax adjustments decreased fourth-quarter income tax expense by $4.8 million in 2020 and by $1.3 million in 2019.
  • Net income attributable to the Company was $27.5 million ($0.85 per share), compared to $29.1 million ($0.90 per share) in Q4 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.89 per share in the fourth quarter of 2020, compared to $0.97 in the same period of last year.
  • Adjusted EBITDA (a non-GAAP measure) was $57.3 million, compared to $63.9 million in Q4 2019, a decrease of 10.4%.

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

“We were very pleased with the Company's performance this quarter and the overall year. Enabled by very strong free cash flow during the quarter, we continued the trend of significantly reducing net debt and, once again, ended the year with a very healthy balance sheet. Earnings per share benefited from a low tax rate this quarter due to significant non-recurring adjustments. Compared to the full-year tax rate, absent discrete items, of about 28%, the lower rate this quarter increased Adjusted EPS by about $0.12, effectively recovering earnings that would have been recognized in earlier quarters if the full year tax rate had been known," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are also providing initial financial guidance for 2021, reflecting expected strong performance from the Machine Clothing segment, with our expectations for Engineered Composites being significantly impacted by a destocking cycle for our finished goods in our customers’ supply chains. We also expect a strong year for free cash flow generation: our expected cash flow in 2021 should exceed the level delivered in 2020."


Outlook for Full-Year 2021

Albany International is updating financial guidance for the full-year 2021:

  • Total company revenue of between $850 and $890 million;
  • Effective income tax rate, including tax adjustments, of 28% to 30%;
  • Total company depreciation and amortization of between $70 and $75 million;
  • Capital expenditures in the range of $50 to $60 million;
  • GAAP and Adjusted earnings per share of between $2.40 and $2.80;
  • Total company Adjusted EBITDA of $195 to $220 million;
  • Machine Clothing revenue of $570 to $590 million;
  • Machine Clothing Adjusted EBITDA of between $195 and $205 million;
  • Albany Engineered Composites (AEC) revenue between $275 to $295 million; and
  • Albany Engineered Composites Adjusted EBITDA of $55 to $65 million.


Albany International Reports Fourth-Quarter 2020 Results:

https://albint.gcs-web.com/node/19301/pdf[P:

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