Albany International Reports Fourth-Quarter Results

Wed Feb 6, 2013 5:00pm EST

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Fourth-Quarter Financial Highlights

* Net sales from continuing operations were $194.3 million, a decrease of 1.6
percent compared to Q4 2011. 
* Adjusted EBITDA from continuing operations for Q4 2012 was $37.8 million,
compared to $29.8 million in Q4 2011 (see Tables 4 and 5). 
* Q4 2012 income from continuing operations was $0.25 per share. These results
include restructuring charges of $0.02, foreign currency revaluation losses of
$0.08, and net unfavorable income tax adjustments of $0.01 (see Table 6). 
* Q4 2011 income from continuing operations was a loss of $0.32 per share. These
results included restructuring charges of $0.10 and foreign currency revaluation
gains of $0.08, and net unfavorable income tax adjustments of $0.50 (see Table
7). 
* Net debt declined $19.5 million during the quarter and $126.9 million for the
full year (see Table 8).

ROCHESTER, N.H.--(Business Wire)--
Albany International Corp. (NYSE: AIN), a global advanced textiles and materials
processing company with core businesses in machine clothing and engineered
composites, reported Q4 2012 income from continuing operations of $8.0 million
($0.25 per share). These results include restructuring charges of $0.9 million
($0.02 per share), foreign currency revaluation losses of $4.0 million ($0.08
per share), and net unfavorable income tax adjustments of $0.1 million ($0.01
per share) (see Table 6). 

Q4 2011 income from continuing operations was a loss of $10.0 million ($0.32 per
share). These results included restructuring charges of $4.9 million ($0.10 per
share), foreign currency revaluation gains of $3.5 million ($0.08 per share),
and net unfavorable income tax adjustments of $15.6 million ($0.50 per share)
(see Table 7). 

Net sales from continuing operations were $194.3 million, a decrease of 1.6
percent compared to Q4 2011. The following table summarizes net sales by segment
and the effect of changes in currency translation rates:

 Table 1                                                                                                                      
                                                                                           Impact of          Percent         
                                Net Sales                                                  Changes            Change          
                                Three Months ended                                         in Currency        excluding       
                                December 31,                                 Percent       Translation        Currency        
 (in thousands)                 2012                    2011                 Change        Rates              Rate Effect     
 Machine Clothing (MC)          $    174,295            $    183,218         -4.9  %       ($2,161  )         -3.7    %       
 Engineered Composites (AEC)         20,040                  14,182          41.3          -                  41.3            
 Total                          $    194,335            $    197,400         -1.6  %       ($2,161  )         -0.5    %       
                                                                                                                              


Gross profit was $79.0 million (40.6 percent of net sales) in the fourth quarter
of 2012, compared to $77.0 million (39.0 percent of net sales) in the same
period of 2011. The increase in gross profit percentage was primarily due to
results at Machine Clothing, where gross profit margins increased from 42.1
percent in 2011 to 45.0 percent in 2012, reflecting high plant utilization in
the Americas, favorable geographic sales mix, and the cumulative effect of
restructuring actions taken over the last year. 

Selling, technical, general, and research (STG&R) expenses were $58.4 million,
or 30.0 percent of net sales, in the fourth quarter of 2012. STG&R expenses
included losses of $1.2 million related to the revaluation of
non-functional-currency assets and liabilities. In the fourth quarter of 2011,
STG&R expenses were $61.8 million, or 31.3 percent of net sales, including gains
of $0.9 million related to the revaluation of non-functional-currency assets and
liabilities. The decrease in STG&R expense reflects lower bad debt charges and
lower pension expense resulting from the settlement of certain pension
liabilities in Q2 2012. 

The following table summarizes fourth-quarter operating income by segment.

 Table 2                                                                  
                          Operating Income/(loss)                         
                          Three Months ended                              
                          December 31,                                    
 (in thousands)           2012                       2011                 
 Machine Clothing         $     43,112               $     39,912         
 Engineered Composites          (187     )                 (583     )     
 Research expenses              (7,564   )                 (8,230   )     
 Unallocated expenses           (15,696  )                 (20,803  )     
 Total                    $     19,665               $     10,296         
                                                                          


Q4 2012 Machine Clothing operating income included restructuring charges of $1.1
million and foreign currency revaluation losses of $1.2 million. Q4 2011 Machine
Clothing operating income included restructuring charges of $2.5 million and
foreign currency revaluation gains of $0.9 million. Unallocated expenses
included restructuring charges of $2.4 million in Q4 2011. 

Q4 2012 Other income/expense, net, was expense of $2.6 million, including losses
of $2.8 million related to the revaluation of non-functional-currency
intercompany balances. Other income/expense, net, in Q4 2011 was income of $2.2
million, including income of $2.7 million related to the revaluation of
non-functional-currency intercompany balances. 

The following table summarizes currency revaluation effects on certain financial
metrics:

 Table 3                                                                    
                                Income/(loss) attributable                  
                                to currency revaluation                     
                                Three Months ended                          
                                December 31,                                
 (in thousands)                 2012                   2011                 
 Operating income               ($1,186  )             $      861           
 Other income/(expense), net    ( 2,829  )                    2,650         
 Total                          ($4,015  )             $      3,511         
                                                                            


The Company`s effective income tax rate, exclusive of discrete tax items, was
38.5 percent for the fourth quarter of 2012, compared to 33.1 percent for the
fourth quarter of 2011. Q4 2012 income tax expense included an unfavorable
adjustment of $1.2 million related to a change in the tax rate, and net
favorable discrete income tax adjustments of $1.1 million. Q4 2011 income tax
expense included net discrete income tax charges of $16.2 million, and a
favorable adjustment of $0.7 million related to a change in tax rate. The
discrete tax charge in Q4 2011 was principally due to recording a valuation
allowance in Germany resulting from the sale of the Company`s Doors business. 

The following tables summarize Adjusted EBITDA from continuing operations:

 Table 4                                                                                                                           
 Three Months ended December 31, 2012                                                                                              
                                                Machine              Engineered            Research and          Total             
 (in thousands)                                 Clothing             Composites            Unallocated           Company           
 Income/(loss) from continuing operations       $    43,112                ($187  )        ($34,945  )           $    7,980        
 Interest expense, net                               -                     -               3,991                      3,991        
 Income tax expense                                  -                     -               5,127                      5,127        
 Depreciation and amortization                       11,576                1,595           2,564                      15,735       
 EBITDA from continuing operations                   54,688                1,408           (23,263   )                32,833       
 Restructuring and other, net                        1,071                 -               (159      )                912          
 Foreign currency revaluation losses/(gains)         1,187                 (2     )        2,830                      4,015        
 Adjusted EBITDA from continuing operations     $    56,946          $     1,406           ($20,592  )           $    37,760       
                                                                                                                                   


 Table 5                                                                                                                         
 Three Months ended December 31, 2011                                                                                            
                                               Machine             Engineered           Research and         Total               
 (in thousands)                                Clothing            Composites           Unallocated          Company             
 Income/(loss) from continuing operations      $    39,912               ($583  )       ($49,322  )               ( $9,993  )    
 Interest expense, net                              -                    -              4,182                     4,182          
 Income tax expense                                 -                    -              18,279                    18,279         
 Depreciation and amortization                      12,038               1,319          2,640                     15,997         
 EBITDA from continuing operations                  51,950               736            (24,221   )               28,465         
 Restructuring and other, net                       2,465                -              2,396                     4,861          
 Foreign currency revaluation gains                 (860    )            (1     )       (2,650    )               (3,511    )    
 Adjusted EBITDA from continuing operations    $    53,555         $     735            ($24,475  )          $    29,815         
                                                                                                                                 


Capital spending for equipment and software was $11.8 million for the fourth
quarter of 2012, bringing the full-year total to $37.2 million. Depreciation and
amortization related to continuing operations was $15.7 million for Q4 2012 and
$63.1 million for the full year. 

CEO Comments

President and CEO Joseph Morone said, "Q4 2012 was another good quarter for
Albany International. Both businesses continued to perform well, Adjusted EBITDA
was 27 percent higher than in the comparable period in 2011, and cash generation
was once again strong and resulted in an additional $20 million reduction in net
debt. 

"In MC, the market trends of the past several quarters persisted. Sales remained
stable in the Americas and China, weakened in Asia outside of China, and were
well below 2011 levels in Europe. Pricing was stable around the world except for
Europe, where it was under considerable pressure. On a positive note, we did see
the first indications during Q4 that the sales decline in Europe might be
moderating, as for the first time in over a year, quarterly sales increased on a
sequential basis. Our competitive performance continues to be strong, as our
market share with the leading papermakers in every region of the world is either
holding firm or growing. Gross margins were once again strong and for the third
consecutive quarter, exceeded 44 percent. Meanwhile, we decided in Q4 to make a
major investment aimed at further enhancing our strength in R&D. For the last
few years, at the same time that we have been introducing a steady stream of new
products that helps to account for our strong competitive performance, we have
been developing an entirely new, proprietary technology platform that offers the
potential for an array of new products across all of our product segments. In
2013, we will begin construction of a $15 million facility capable of producing
full-scale prototypes of new products based on this new technology platform at
our plant in Kaukauna, Wisconsin. Our objective is to accelerate the cycle of
exploration, development, scale-up, testing, and market introduction of this new
generation of products. 

"Our outlook for MC remains unchanged. For both the near and long term, we
continue to view this as a business with the potential for flat, year-over-year
Adjusted EBITDA. We still expect Adjusted EBITDA in 2013 to be roughly
comparable to Adjusted EBITDA in 2012. Because of seasonal effects, we expect a
weak Q1, although it is unlikely to be as weak as Q1 2012. This outlook for 2013
and beyond assumes that the conditions in the MC market will reflect the
long-term sectoral trends of the paper industry: stability in the Americas, with
growth in South America offsetting decline in Canada, and growth in packaging
and tissue offsetting decline in newsprint, printing, and writing grades; in
Europe, the sharp drops in demand due to the overcapacity in the paper industry
should give way to the more predictable, structural declines in the newsprint,
printing, and writing grades; and these more structural declines in Europe
should be offset by continued growth in Asia. Our margins in Machine Clothing
should hold, as long as overall sales continue at current levels and we continue
to do an effective job of matching capacity with underlying market conditions
and offsetting inflationary increases. 

"For AEC, the trend of the past several quarters also continued in Q4. Sales
were 41 percent higher than a year ago, while Adjusted EBITDA nearly doubled.
The growth was driven primarily by LEAP program activities, which now account
for 45 percent of sales (compared to 25 percent in Q4 2011). We continue to make
good progress against the major LEAP program milestones - construction of the
two plants, development of parts and maturation of the manufacturing process,
and production of parts for testing. We also continued to make good progress on
the R&D front; of particular note, the development of new composite products
with SAFRAN for future upgrades to the LEAP engine, and the continued
advancement of our ceramic matrix substrate on Boeing`s Ceramic Matrix Composite
Engine Nozzle currently undergoing ground tests on a full-scale engine; flight
tests are scheduled later this year. 

"As for the outlook for AEC, we expect continued year-over-year strong growth in
sales in 2013. For the longer term, while there is still a fair amount of
uncertainty, it now appears that AEC`s production of LEAP components will be
accelerated by about 12 months. This schedule is still subject to change. In our
earlier releases, we suggested that AEC had the potential to reach $120 million
in revenue by 2016 and that sales would ramp up rapidly between 2016 and 2019.
Assuming this accelerated schedule holds, it now appears possible that AEC will
reach $120 million revenue by 2015 and that the ramp-up will occur between 2015
and 2018. Any acceleration of AEC production will require an acceleration of AEC
capital spending. Again assuming an accelerated schedule, the peak years for
LEAP capital spending will likely be 2013 to 2015, rather than 2014 to 2016 as
we had previously assumed. 

"In sum, Q4 was another strong quarter for Albany International, and we expect
the trends exhibited in Q4 - steady Adjusted EBITDA in MC, strong sales growth
in AEC - to continue through 2013. At the same time, 2013 will be a year of
substantial investment for future performance, given our decision to invest in
the new R&D rapid scale-up facility in MC and the likely acceleration of AEC`s
LEAP production." 

CFO Comments

CFO and Treasurer John Cozzolino commented, "The Company generated good cash
flow during the quarter with cash balances, mostly held outside of the U.S.,
increasing to $191 million. Primarily due to that increase in cash, net debt
declined about $20 million, as compared to Q3 (see Table 8), to approximately
$129 million. Our leverage ratio, as defined in our primary debt agreements, was
1.06 at the end of Q4, while $258 million was available on our $390 million
credit facility. On January 25, the Company announced the redemption, at 100
percent of principal, of all remaining 2.25 percent Convertible Senior Notes due
2026, of which an aggregate of $28.4 million in principal amount is outstanding.
The redemption date will be March 15, 2013. In addition, the first $50 million
of the Company`s debt with Prudential is due in October 2013. The Company
expects to finance both debt repayments with borrowings from its bank credit
facility. 

"Accounts receivable and inventory, excluding currency effects, declined during
Q4 as the effect of business growth in AEC was more than offset by continued
improvement in Machine Clothing. In accounts receivable, Days Sales Outstanding
remained flat at 63 days, compared to Q3, while inventory as a percent of net
sales increased from 15.2 percent at the end of Q3 to 15.7 percent at the end of
Q4. 

"Capital expenditures in Q4 were about $12 million, bringing the full-year 2012
total to just over $37 million. As a result of the apparent acceleration of
AEC`s LEAP production requirements, the Company expects capital spending to
increase sharply in 2013. We continue to expect that average capital spending
during the five-year period 2012 to 2016 will be $70 million per year, although
the actual amount of capital spent in each year may vary widely due to changes
in production and vendor payment schedules. 

"Revaluation of non-functional-currency assets and liabilities generated a total
loss of $4 million in Q4. This loss was primarily due to the revaluation of
intercompany loans to the euro as well as the revaluation of U.S. dollar cash
holdings and trade receivables to the euro. 

"Our income tax rate for 2012, exclusive of discrete tax adjustments, was 38.5
percent. Including the utilization of net operating loss carry-forwards and
other deferred tax assets, cash paid for income taxes in 2012 was $15.1
million." 

The Company plans a webcast to discuss fourth-quarter 2012 financial results on
Thursday, February 7, 2013, at 9:00 a.m. Eastern Time. For access, go to
www.albint.com. 

About Albany International Corp.

Albany International is a global advanced textiles and materials processing
company, with two core businesses. Machine Clothing is the world`s leading
producer of custom-designed fabrics and belts essential to production in the
paper, nonwovens, and other process industries. Albany Engineered Composites is
a rapidly growing supplier of highly engineered composite parts for the
aerospace industry. Albany International is headquartered in Rochester, New
Hampshire, operates 18 plants in 11 countries, employs 4,000 people worldwide,
and is listed on the New York Stock Exchange (Symbol AIN). Additional
information about the Company and its products and services can be found at
www.albint.com. 

This release contains certain items, such as earnings before interest, taxes,
depreciation and amortization (EBITDA), EBITDA from continuing operations,
Adjusted EBITDA, sales excluding currency effects, effective income tax rate
exclusive of income tax adjustments, net debt, and certain income and expense
items on a per-share basis, that could be considered non-GAAP financial
measures. Such items are provided because management believes that, when
presented together with the GAAP items to which they relate, they provide
additional useful information to investors regarding the Company`s operational
performance. Presenting increases or decreases in sales, after currency effects
are excluded, can give management and investors insight into underlying sales
trends. An understanding of the impact in a particular quarter of specific
restructuring costs, or other gains and losses, on operating income or EBITDA
can give management and investors additional insight into quarterly performance,
especially when compared to quarters in which such items had a greater or lesser
effect, or no effect.

The effect of changes in currency translation rates is calculated by converting
amounts reported in local currencies into U.S. dollars at the exchange rate of a
prior period. That amount is then compared to the U.S. dollar amount reported in
the current period. The Company calculates Income tax adjustments by adding
discrete tax items to the effect of a change in tax rate for the reporting
period. The Company calculates its effective Income tax rate, exclusive of
Income tax adjustments, by removing Income tax adjustments from total Income tax
expense, then dividing that result by Income before tax. The Company calculates
EBITDA by adding Interest expense net, Income taxes, and Depreciation and
Amortization to Net income. Adjusted EBITDA is calculated by adding to EBITDA,
costs associated with restructuring and pension settlement charges, and then
adding or subtracting revaluation losses or gains and subtracting building sale
gains. The Company believes that EBITDA and Adjusted EBITDA provide useful
information to investors because they provide an indication of the strength and
performance of the Company's ongoing business operations, including its ability
to fund discretionary spending such as capital expenditures and strategic
investments, as well as its ability to incur and service debt. While
depreciation and amortization are operating costs under GAAP, they are non-cash
expenses equal to current period allocation of costs associated with capital and
other long-lived investments made in prior periods. While restructuring
expenses, foreign currency revaluation losses or gains, pension settlement
charges, and building sale gains have an impact on the Company's net income,
removing them from EBITDA can provide, in the opinion of the Company, a better
measure of operating performance. EBITDA is also a calculation commonly used by
investors and analysts to evaluate and compare the periodic and future operating
performance and value of companies. EBITDA, as defined by the Company, may not
be similar to EBITDA measures of other companies. Such EBITDA measures may not
be considered measurements under GAAP, and should be considered in addition to,
but not as substitutes for, the information contained in the Company`s
statements of income.

The Company discloses certain income and expense items on a per share basis. The
Company believes that such disclosures provide important insight into underlying
quarterly earnings and are financial performance metrics commonly used by
investors. The Company calculates the per-share amount for items included in
continuing operations by using the effective tax rate utilized during the
applicable reporting period and the weighted average number of shares
outstanding for the period.

 Table 6                                                                                                                                                 
 Quarter ended December 31, 2012                                                                                                                         
                                                                    Pre-tax                            After-tax        Shares             Per Share     
 (in thousands, except per share amounts)                           amounts         Tax Effect         Effect           Outstanding        Effect        
 Restructuring and other, net from continuing operations            $912            $351               $561             31,402             $0.02         
 Foreign currency revaluation losses from continuing operations     4,015           1,546              2,469            31,402             0.08          
 Unfavorable effect of change in tax rate                           -               1,178              1,178            31,402             0.04          
 Net discrete income tax benefit from continuing operations         -               1,098              1,098            31,402             0.03          
                                                                                                                                                         


 Table 7                                                                                                                                             
 Quarter ended December 31, 2011                                                                                                                     
                                                                  Pre-tax                           After-tax        Shares            Per Share     
 (in thousands, except per share amounts)                         amounts         Tax Effect        Effect           Outstanding       Effect        
 Restructuring and other, net from continuing operations          $4,861          $1,609            $3,252           31,283            $0.10         
 Foreign currency revaluation gains from continuing operations    3,511           1,162             2,349            31,283            0.08          
 Favorable effect of change in tax rate                           -               683               683              31,283            0.02          
 Net discrete income tax charge from continuing operations        -               16,243            16,243           31,283            0.52          
                                                                                                                                                     


The following table contains the calculation of net debt:

 Table 8                                                                                                 
                                          December 31,          September 30,         December 31,       
 (in thousands)                           2012                  2012                  2011               
 Notes and loans payable                  $586                  $276                  $424               
 Current maturities of long-term debt     83,276                33,066                1,263              
 Long-term debt                           235,877               289,129               373,125            
 Total debt                               319,739               322,471               374,812            
 Cash                                     190,718               173,939               118,909            
 Net debt                                 $129,021              $148,532              $255,903           
                                                                                                         


This press release may contain statements, estimates, or projections that
constitute "forward-looking statements" as defined under U.S. federal securities
laws. Generally, the words "believe," "expect," "intend," "estimate,"
"anticipate," "project," "will," "should" and similar expressions identify
forward-looking statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks and uncertainties
(including, without limitation, those set forth in the Company`s most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q) that could cause
actual results to differmaterially from the Company`s historical experience and
our present expectations or projections.

Forward-looking statements in this release or in the webcast include, without
limitation, statements about economic and paper industry trends and conditions
during 2013 and in future years; sales, EBITDA, Adjusted EBITDA and operating
income expectations in 2013 and in future periods in each of the Company`s
businesses and for the Company as a whole, the timing and impact of production
and development programs in the Company`s AEC business segment; the amount and
timing of capital expenditures, future tax rates and cash paid for taxes,
depreciation and amortization, future debt levels and debt covenant ratios,
future revaluation gains and losses, and the Company`s ability to reduce costs.
Furthermore, a change in any one or more of the foregoing factors could have a
material effect on the Company`s financial results in any period. Such
statements are based on current expectations, and the Company undertakes no
obligation to publicly update or revise any forward-looking statements.

Statements expressing management`s assessments of the growth potential of its
businesses, or referring to earlier assessments of such potential, are not
intended as forecasts of actual future growth, and should not be relied on as
such. While management believes such assessments to have a reasonable basis,
such assessments are, by their nature, inherently uncertain. This release and
earlier releases set forth a number of assumptions regarding these assessments,
including historical results, independent forecasts regarding the markets in
which these businesses operate, and the timing and magnitude of orders for our
customers` products. Historical growth rates are no guarantee of future growth,
and such independent forecasts and assumptions could prove materially incorrect,
in some cases.

 ALBANY INTERNATIONAL CORP.                                                                                                                     
 CONSOLIDATED STATEMENTS OF INCOME                                                                                                              
 (in thousands, except per share data)                                                                                                          
 (unaudited)                                                                                                                                    
                                                                                                                                                
 Three Months Ended                                                                                       Years Ended                           
 December 31,                                                                                             December 31,                          
                                                                                                                                                
 2012                    2011                                                                             2012                 2011             
                                                                                                                                                
 $    194,335            $    197,400         Net sales                                                   $   760,941          $   787,287      
      115,376                 120,424         Cost of goods sold                                              455,545              473,121      
                                                                                                                                                
      78,959                  76,976          Gross profit                                                    305,396              314,166      
      44,439                  47,078          Selling, general, and administrative expenses                   169,774              174,395      
      13,943                  14,741          Technical, product engineering, and research expenses           52,962               55,846       
      912                     4,861           Restructuring and other, net                                    7,061                9,317        
      -                       -               Pension settlement expense                                      119,735              -            
                                                                                                                                                
      19,665                  10,296          Operating income/(loss)                                         (44,136  )           74,608       
      3,991                   4,182           Interest expense, net                                           16,601               18,121       
      2,567                   (2,172   )      Other expense/(income), net                                     7,629                2,639        
                                                                                                                                                
      13,107                  8,286           Income/(loss) before income taxes                               (68,366  )           53,848       
      5,127                   18,279          Income tax expense/(benefit)                                    (27,523  )           32,582       
                                                                                                                                                
      7,980                   (9,993   )      Income/(loss) from continuing operations                        (40,843  )           21,266       
                                                                                                                                                
      -                       7,794           Income from operations of discontinued business                 4,776                24,101       
      (80      )              -               (Loss)/gain on sale of discontinued business                    92,296               -            
      (318     )              5,032           Income tax (benefit)/expense on discontinued operations         25,252               10,429       
      238                     2,762           Income from discontinued operations                             71,820               13,672       
 $    8,218                   ($7,231  )      Net income/(loss)                                           $   30,977           $   34,938       
                                                                                                                                                
                                              Earnings per share - Basic                                                                        
 $    0.25                    ($0.32   )      Income/(loss) from continuing operations                        ($1.30   )       $   0.68         
      0.01                    0.09            Discontinued operations                                         2.29                 0.44         
 $    0.26                    ($0.23   )      Net income/(loss)                                           $   0.99             $   1.12         
                                                                                                                                                
                                              Earnings per share - Diluted                                                                      
 $    0.25                    ($0.32   )      Income/(loss) from continuing operations                 *      ($1.30   )       $   0.67         
      0.01                    0.09            Discontinued operations                                         2.27             $   0.44         
 $    0.26                    ($0.23   )      Net income/(loss)                                           $   0.97             $   1.11         
                                                                                                                                                
                                              Shares used in computing earnings per share:                                                      
      31,402                  31,283          Basic                                                           31,356               31,262       
      31,681                  31,283          Diluted                                                         31,636               31,510       
                                                                                                                                                
 $    0.14               $    0.13            Dividends per share                                         $   0.55             $   0.51         
                                                                                                                                                
                                                                                                                                                
 * Due to a loss from continuing operations, year ended 2012 diluted loss per share is equal to the basic per share calculation.                
                                                                                                                                                


 ALBANY INTERNATIONAL CORP.                                                                                                                                                              
 CONSOLIDATED BALANCE SHEETS                                                                                                                                                             
 (in thousands, except share data)                                                                                                                                                       
 (unaudited)                                                                                                                                                                             
                                                                                                                                                                                         
                                                                                                                                     December 31,               December 31,             
                                                                                                                                     2012                       2011                     
 ASSETS                                                                                                                                                                                  
 Cash and cash equivalents                                                                                                           $      190,718             $      118,909           
 Accounts receivable, net                                                                                                                   171,535                    147,511           
 Inventories                                                                                                                                119,183                    129,803           
 Income taxes receivable and deferred                                                                                                       20,594                     30,010            
 Prepaid expenses and other current assets                                                                                                  10,435                     13,349            
 Current assets of discontinued operations                                                                                                  -                          67,351            
 Total current assets                                                                                                                       512,465                    506,933           
                                                                                                                                                                                         
 Property, plant and equipment, net                                                                                                         420,154                    438,953           
 Intangibles                                                                                                                                848                        1,079             
 Goodwill                                                                                                                                   76,522                     75,469            
 Deferred taxes                                                                                                                             123,886                    134,644           
 Other assets                                                                                                                               22,822                     23,383            
 Noncurrent assets of discontinued operations                                                                                               -                          50,467            
 Total assets                                                                                                                        $      1,156,697           $      1,230,928         
                                                                                                                                                                                         
 LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                    
 Notes and loans payable                                                                                                             $      586                 $      424               
 Accounts payable                                                                                                                           35,117                     32,708            
 Accrued liabilities                                                                                                                        103,257                    105,104           
 Current maturities of long-term debt                                                                                                       83,276                     1,263             
 Income taxes payable and deferred                                                                                                          13,552                     8,766             
 Current liabilities of discontinued operations                                                                                             -                          22,446            
 Total current liabilities                                                                                                                  235,788                    170,711           
                                                                                                                                                                                         
 Long-term debt                                                                                                                             235,877                    373,125           
 Other noncurrent liabilities                                                                                                               136,012                    185,596           
 Deferred taxes and other credits                                                                                                           55,509                     71,529            
 Noncurrent liabilities of discontinued operations                                                                                          -                          14,117            
 Total liabilities                                                                                                                          663,186                    815,078           
                                                                                                                                                                                         
 SHAREHOLDERS' EQUITY                                                                                                                                                                    
 Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued                                                       -                          -                 
 Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; issued 36,642,204 in 2012 and 36,540,842 in 2011           37                         37                
 Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 3,236,098 in 2012 and 2011           3                          3                 
 Additional paid in capital                                                                                                                 395,381                    391,495           
 Retained earnings                                                                                                                          435,775                    422,044           
 Accumulated items of other comprehensive income:                                                                                                                                        
 Translation adjustments                                                                                                                    (7,659     )               (19,111    )      
 Pension and postretirement liability adjustments                                                                                           (69,484    )               (118,104   )      
 Derivative valuation adjustment                                                                                                            (2,878     )               (2,594     )      
 Treasury stock (Class A), at cost 8,467,873 shares in 2012, and 8,479,487 shares in 2011                                                   (257,664   )               (257,920   )      
 Total shareholders' equity                                                                                                                 493,511                    415,850           
 Total liabilities and shareholders' equity                                                                                          $      1,156,697           $      1,230,928         
                                                                                                                                                                                         


 ALBANY INTERNATIONAL CORP.                                                                                                                                                         
 CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                              
 (in thousands)                                                                                                                                                                     
 (unaudited)                                                                                                                                                                        
                                                                                                                                                                                    
 Three Months Ended                                                                                                                          Years Ended                            
 December 31,                                                                                                                                December 31,                           
                                                                                                                                                                                    
 2012                    2011                                                                                                                2012                  2011             
                                              OPERATING ACTIVITIES                                                                                                                  
 $    8,218                   ($7,231  )      Net income/(loss)                                                                              $   30,977            $   34,938       
                                              Adjustments to reconcile net income/(loss) to net cash provided by operating activities:                                              
      14,131                  14,569          Depreciation                                                                                       56,769                57,502       
      1,604                   2,133           Amortization                                                                                       6,466                 8,883        
      203                     188             Noncash interest expense                                                                           1,027                 753          
      2,719                   8,780           Change in long-term liabilities, deferred taxes and other credits                                  (123,887  )           237          
      227                     2,241           Provision for write-off of property, plant and equipment                                           427                   2,345        
      -                       -               Write-off of pension liability adjustment due to settlement                                        118,350               -            
      (81      )              -               (Gain) on disposition of assets                                                                    (92,457   )           (1,022   )   
      (3       )              (40      )      Excess tax benefit of options exercised                                                            (40       )           (93      )   
      995                     843             Compensation and benefits paid or payable in Class A Common Stock                                  2,790                 2,812        
                                                                                                                                                                                    
                                              Changes in operating assets and liabilities, net of business acquisitions and divestitures:                                           
      1,880                   (1,896   )      Accounts receivable                                                                                (4,990    )           (12,082  )   
      3,189                   20,355          Inventories                                                                                        11,565                7,105        
      843                     2,506           Prepaid expenses and other current assets                                                          592                   314          
      (760     )              (1,245   )      Income taxes prepaid and receivable                                                                9,472                 (3,747   )   
      7,539                   (2,682   )      Accounts payable                                                                                   3,298                 (1,677   )   
      (5,455   )              988             Accrued liabilities                                                                                7,616                 6,124        
      8,070                   (8,175   )      Income taxes payable                                                                               7,308                 2,422        
      1,466                   (367     )      Other, net                                                                                         (776      )           455          
      44,785                  30,967          Net cash provided by operating activities                                                          34,507                105,269      
                                                                                                                                                                                    
                                              INVESTING ACTIVITIES                                                                                                                  
      (11,809  )              (6,833   )      Purchases of property, plant and equipment                                                         (37,046   )           (24,988  )   
      (7       )              (1,594   )      Purchased software                                                                                 (161      )           (3,692   )   
      -                       -               Proceeds from sale of assets                                                                       -                     2,860        
      -                       -               Proceeds from sale of discontinued operations                                                      150,654               -            
      (11,816  )              (8,427   )      Net cash (used in)/provided by investing activities                                                113,447               (25,820  )   
                                                                                                                                                                                    
                                              FINANCING ACTIVITIES                                                                                                                  
      864                     13,001          Proceeds from borrowings                                                                           46,028                14,386       
      (3,774   )              (28,488  )      Principal payments on debt                                                                         (102,128  )           (65,575  )   
      232                     374             Proceeds from options exercised                                                                    1,311                 789          
      3                       40              Excess tax benefit of options exercised                                                            40                    93           
      (8,787   )              (4,056   )      Dividends paid                                                                                     (21,315   )           (15,616  )   
      (11,462  )              (19,129  )      Net cash (used in) financing activities                                                            (76,064   )           (65,923  )   
                                                                                                                                                                                    
      (4,728   )              (725     )      Effect of exchange rate changes on cash and cash equivalents                                       (81       )           (3,373   )   
                                                                                                                                                                                    
      16,779                  2,686           Increase in cash and cash equivalents                                                              71,809                10,153       
      -                       (7,887   )      Change in cash balances of discontinued operations                                                 -                     (9,169   )   
      173,939                 124,110         Cash and cash equivalents at beginning of period                                                   118,909               117,925      
 $    190,718            $    118,909         Cash and cash equivalents at end of period                                                     $   190,718           $   118,909      


Investors:
Albany International Corp.
John Cozzolino, 518-445-2281
john.cozzolino@albint.com
or
Media:
Albany International Corp.
Susan Siegel, 603-330-5866
susan.siegel@albint.com
or
Kekst and Company for Albany International
Michael Herley, 212-521-4897
michael-herley@kekst.com

Copyright Business Wire 2013

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