Yahoo Finance Albany International Corp (AIN) Q1 2024 Earnings Call Transcript Highlights: Strong Sales ...
Consolidated Net Sales: $313 million, up 16.4% from the previous year.
Machine Clothing Net Sales: Increased 20.9% year-over-year, driven by Heimbach acquisition.
AEC Sales: $128 million, up 10.6% from the previous year.
Consolidated Gross Profit: $109 million, up 9.4% from the previous year.
Machine Clothing Gross Margin: Decreased to 45.7% from 50.8% last year; excluding Heimbach, it increased to 52.1%.
AEC Gross Margin: Grew to 18.8%, up 30 basis points from last year.
Net R&D Expenses: Approximately 4% of revenues, in line with the previous year.
SG&A Expenses: Increased by 13.1% due to Heimbach acquisition; as a percentage of revenue, decreased from 18% to 17.5%.
Effective Tax Rate: 29.2%, slightly up from 28.2% last year.
GAAP Net Income: $27.3 million, slightly up from $26.9 million last year.
GAAP Diluted EPS: $0.87 per share, compared to $0.86 last year.
Adjusted EPS: $0.90 per share, slightly down from $0.91 last year.
Consolidated Adjusted EBITDA: $65 million, up 8% from the previous year.
Machine Clothing Adjusted EBITDA: $55.5 million, nearly flat compared to $55.7 million last year.
AEC Adjusted EBITDA: $24.8 million, up 17.9% from last year.
Free Cash Flow: A use of $17 million, with operating cash flow of $10 million offset by capital expenditures of $27 million.
Debt Repayment: Paid down over $17 million of debt.
Cash Balance: Over $125 million.
Borrowing Capacity: Over $370 million under committed credit facility.
Net Leverage: 1.2 times.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you level set us on the LEAP program and how you see that transitioning towards the 2026 revenue target? A: Gunnar Kleveland, President and CEO, stated that 2024 is expected to be a flat year for the LEAP program, but growth is anticipated in 2025 and 2026, aligning with Boeing's recovery and growth. He expressed confidence in meeting the 2026 revenue goals despite current flat projections.
Q: What is the optimal number of plants and R&D centers for the Machine Clothing business post-Heimbach integration? A: Gunnar Kleveland mentioned that decisions regarding the footprint optimization will be based on customer locations and business needs. Specific details on the number of facilities were not disclosed, but ongoing evaluations will guide their actions to optimize support for customers.
Q: Can you provide insights into the drivers of AEC's growth for this year, especially with the LEAP program expected to be flat? A: Gunnar Kleveland explained that growth in the AEC segment is largely driven by new wins and programs, particularly in the space sector. He highlighted that despite the flat projection for LEAP and JSF, other programs like CH-53K and JASSM are expected to contribute to growth.
Q: How is the two-brand strategy being implemented following the Heimbach acquisition? A: Gunnar Kleveland described the strategy as maintaining two separate brands that customers are familiar with, leveraging differentiated technologies from both companies to complement entire machine setups. This approach has been well-received by the market.
Q: What are the expectations for the 787 program given Boeing's production rate adjustments? A: Gunnar Kleveland noted a strong first quarter for the 787 program and does not anticipate significant material impact from Boeing's production adjustments on AEC's business for the year.
Q: Could you discuss the financial impact of repatriating non-US cash and its importance? A: Robert Starr, CFO, explained that the majority of Albany's cash is held overseas, and they are working to repatriate it with minimal tax implications. This strategy is crucial for optimizing global cash balances and reducing costs associated with higher debt rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
