Albany International(US:AIN)2025-04-30 20:24Revenue Performance - Machine Clothing segment's net revenues decreased by 5.7% to $174.7 million in Q1 2025 compared to $185.2 million in Q1 2024[102] - Albany Engineered Composites segment's net revenues decreased by 11.0% to $114.1 million in Q1 2025 compared to $128.1 million in Q1 2024[102] - Total net revenues for the company decreased by 7.8% to $288.8 million in Q1 2025 compared to $313.3 million in Q1 2024[102] - In the first quarter of 2025, net revenues decreased by $10.5 million or 5.7% compared to the same period in 2024, primarily due to a decrease in publication, tissue, and pulp grades[121] - The Machine Clothing segment accounted for 60% of consolidated revenues, with net revenues of $174.7 million in Q1 2025, down from $185.2 million in Q1 2024[120] - The Albany Engineered Composites segment represented 40% of consolidated revenues, with net revenues of $114.1 million in Q1 2025, a decrease of $14.0 million or 11.0% from Q1 2024[125] Profitability and Margins - Gross profit for the Machine Clothing segment remained consistent at 45.7% in both 2024 and 2025, while Albany Engineered Composites segment's gross profit margin decreased from 18.8% in 2024 to 14.5% in 2025[105] - Operating income for the Machine Clothing segment decreased by $5.9 million or 13.3% to $38.4 million in Q1 2025 compared to Q1 2024[123] - Gross profit for the Albany Engineered Composites segment decreased by $7.4 million, with the gross profit margin dropping from 18.8% in Q1 2024 to 14.5% in Q1 2025[128] Expenses - SG&A expenses decreased by 1.9% to $53.8 million in Q1 2025 compared to $54.8 million in Q1 2024, but as a percentage of net revenues, it increased from 17.5% to 18.6%[106] - Technical and research expenses decreased by 6.1% to $11.9 million in Q1 2025 compared to $12.7 million in Q1 2024, with a slight increase in percentage of net revenues from 4.0% to 4.1%[107] - Restructuring expenses increased to $2.5 million in Q1 2025 from $2.2 million in Q1 2024[108] - Restructuring expenses for the Machine Clothing segment totaled $3.3 million in Q1 2025, primarily related to workforce reductions and facility closures[111] Cash Flow and Liquidity - Net cash provided by operating activities was $2.1 million in Q1 2025, down from $9.6 million in the same period last year, driven by reduced gross profit[131] - As of March 31, 2025, the company had cash and cash equivalents of $119.4 million and total liquidity of approximately $503.0 million[135] - As of March 31, 2025, the company has cash investments in foreign operations exceeding $140.0 million[137] Tax and Interest - The effective income tax rate for Q1 2025 was 26.6%, a decrease from 29.2% in Q1 2024, mainly due to favorable discrete tax adjustments[118] - Interest expense increased to $3.7 million in Q1 2025, up from $3.3 million in Q1 2024, primarily due to higher average debt balances[114] - An increase of one percentage point in weighted average interest rates would increase interest expense by $2.4 million, based on unhedged variable rate debt of $242.734 million[144] Strategic Initiatives - The company plans to consolidate its headquarters in Portsmouth, NH, affecting approximately 100 employees, with an estimated cost of $7.0 million over the next year and a half[139] - The company faces pricing pressures across all markets, but aims to improve earnings through cost controls and manufacturing productivity efficiencies[99] Foreign Operations and Currency Exposure - The company has off-balance sheet arrangements, including guarantees, with financial assurances of less than $10 million[140] - The total net assets of non-U.S. operations subject to potential loss amount to approximately $593.9 million, with a hypothetical 10% adverse change in foreign currency rates potentially resulting in a loss of $59.4 million[142] - The company has foreign currency transaction exposures totaling $156.9 million, with a net foreign currency asset of $57.9 million as of March 31, 2025[142]