Albany International (AIN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 21.1% year-over-year to $332 million, driven by the Heimbach acquisition and growth in Engineered Composites, though organic Machine Clothing sales declined in Europe and North America.

• Free cash flow was $64 million for the quarter, with cash and equivalents at $116.4 million and $430 million in borrowing capacity.

• Net income attributable to the company was $24.6 million ($0.79 per share), down from $26.7 million ($0.85 per share) in Q2 2023; adjusted diluted EPS was $0.89, flat year-over-year.

• Integration of Heimbach is progressing, contributing to revenue growth and margin expansion, with SAP transition completed and restructuring underway.

• Engineered Composites segment received over $900 million in new orders in Q2, with backlog at $1.2 billion and strong growth in space and defense programs.

Financial highlights

• Machine Clothing Q2 net sales were $194 million, up 21.6% year-over-year, with $39.8 million from Heimbach; organic sales declined.

• Engineered Composites Q2 net sales reached $138 million, up 20.5% year-over-year, led by CH-53K, 787, and space programs.

• Consolidated gross profit was $112.4 million (33.9% margin), up 9.4% year-over-year; Machine Clothing gross margin decreased to 45.9% due to Heimbach, but excluding Heimbach, margin rose to 51.7%.

• Operating income declined to $42.9 million from $45.5 million year-over-year, impacted by higher SG&A and restructuring expenses.

• Adjusted EBITDA was $63 million (19.0% margin), down from $65 million (23.7% margin) last year.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed at $1.26–$1.33 billion; adjusted diluted EPS expected between $3.55 and $4.05; adjusted EBITDA between $260 and $290 million.

• Machine Clothing outlook reflects market softness in Europe/Asia and timing of Heimbach synergies; revenue projected at $760–$790 million, adjusted EBITDA at $230–$250 million.

• Engineered Composites guidance reflects potential further reductions in LEAP production and ramp-up challenges, but new program wins and backlog support future growth; revenue forecasted at $500–$540 million, adjusted EBITDA at $97–$107 million.

• Margins in Engineered Composites expected to improve in the second half due to operational improvements, program mix, and cost reductions.

• Capital expenditures anticipated at $90–$95 million; effective tax rate between 29% and 31%.