UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of
1934
|
Date
of Report (Date of earliest event reported)
|
November
6, 2007
|
|
ALBANY
INTERNATIONAL CORP.
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Delaware
|
0-16214
|
14-0462060
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
1373
Broadway, Albany, New York
|
12204
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code
|
(518) 445-2200 |
|
None
|
|
(Former
name or former address, if changed since last
report.)
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13a-4(c))
|
| Item 2.02 | Results of Operations and Financial Condition. |
On
November 6, 2007, Albany International issued a news release reporting third
quarter 2007 financial results. A copy of the news release is
furnished as Exhibit 99.1 to this report.
| Item 9.01. | Financial Statements and Exhibits. |
|
(d)
|
Exhibits. The
following exhibit is being furnished herewith:
|
|
|
|
99.1
News
release
dated November 6, 2007 reporting third quarter 2007 financial results.
|
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
ALBANY
INTERNATIONAL CORP.
|
|||
|
By:
|
/s/ Michael C. Nahl | ||
|
Name:
Michael C. Nahl
|
|||
|
Title:
Executive Vice President and Chief Financial Officer
|
|||
|
(Principal
Financial Officer)
|
|||
| Date: November 6, 2007 | |||
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
99.1
|
News
release dated November 6, 2007 reporting third quarter 2007 financial
results.
|
Exhibit
99.1
| NEWS RELEASE |
 |
ALBANY
INTERNATIONAL REPORTS THIRD-QUARTER EARNINGS
Third-Quarter
Highlights
|
·
|
Net
income per share was a loss of $0.13, after restructuring charges
of
$0.34. Net income per share was also reduced by idle-capacity costs
related to restructuring of $0.06, costs related to continuing
performance-improvement initiatives of $0.17, and discrete income
tax
adjustments of $0.04. Net income per share was $0.49 in the third
quarter
of 2006, including a reduction to income of $0.10 for restructuring,
and a
favorable discrete tax adjustment of
$0.12.
|
|
·
|
The
Company remains on track to reach total annualized savings from
all of the
initiatives taken or announced since Q3 2006 of at least $0.50
per share
by the end of 2007, growing to at least $1.00 per share by the
end of
2008.
|
|
·
|
Net
sales were $276.3 million, an increase of 13.8 percent compared
to the
same period last year.
|
|
·
|
Net
sales in the Paper Machine Clothing (PMC) segment increased 8.5
percent
compared to the same period last
year.
|
|
·
|
Net
sales in the Applied Technologies segment increased 29.1 percent
compared
to the same period last year.
|
|
·
|
Net
sales in the Door Systems segment increased 27.1 percent compared
to the
same period last year.
|
Albany,
New York, November 6, 2007–Albany International Corp. (NYSE:AIN) reported a
third-quarter net loss per share of $0.13, after restructuring charges of
$0.34.
Net income per share was also reduced by idle-capacity costs related to
restructuring of $0.06, costs related to continuing performance-improvement
initiatives of $0.17, and discrete income tax adjustments of $0.04. Net income
per share was $0.49 in the third quarter of 2006, including a reduction to
income of $0.10 for restructuring, and a favorable discrete tax adjustment
of
$0.12.
(more)
Albany
International Corp.
PO
Box
1907
Albany,
NY 12201 USA
www.albint.com
The
Q3
2007 restructuring charge of $0.34 per share ($13.5 million) is principally
for
costs associated with the previously announced shutdowns in East Greenbush
and
Menands,
New
York.
In addition, idle-capacity expense, primarily labor, related to the shutdown
activity at these two plants increased the cost of goods sold during the
quarter
by $0.06 ($2.3 million). Costs related to performance-improvement initiatives
were $0.17 per share ($6.5 million), including $4.5 million in Selling,
Technical, General and Research (STG&R) expenses and $2.0 million in Cost of
Goods Sold. The increased STG&R expenses are principally due to
non-capitalized SAP project costs, redundant personnel expenses incurred
in the
transition to a centralized European administration, and costs related to
the
integration of R-Bac Industries into Albany Door Systems. Cost of Goods Sold
during the quarter includes additional costs related to the start-up of the
greenfield PMC plant in China, PMC equipment relocation expenses, and the
transfer of manufacturing operations of the U.S. Engineered Fabrics business
to
a greenfield facility in Kaukauna, Wisconsin.
Net
sales
increased $33.4 million, or 13.8 percent compared to the same period last
year. Excluding the effect of changes in currency translation rates,
net sales increased 9.4 percent.
The
following table presents net sales by segment and the effect of changes in
currency translation rates:
Table
1
|
(in
thousands)
|
Net
Sales
Three
Months ended
September
30,
|
Percent
Change
|
Impact
of
Changes
in
Currency
Translation
Rates
|
Percent
Change
excluding
Currency
Rate
Effect
|
||||||||||||||||
|
2007
|
2006
|
|||||||||||||||||||
|
Paper
Machine Clothing
|
$ |
193,377
|
$ |
178,209
|
8.5 | % | $ |
6,251
|
5.0 | % | ||||||||||
|
Applied
Technologies
|
45,512
|
35,240
|
29.1 | % |
1,958
|
23.6 | % | |||||||||||||
|
Albany
Door Systems
|
37,363
|
29,389
|
27.1 | % |
2,384
|
19.0 | % | |||||||||||||
|
Total
|
$ |
276,252
|
$ |
242,838
|
13.8 | % | $ |
10,593
|
9.4 | % | ||||||||||
(more)
2
Gross
profit was 34.0 percent of net sales in the third quarter of 2007, compared
to
38.4 percent in the same period of 2006. The decrease is principally due
to the
increases in Cost of Goods Sold from the above-mentioned idle-capacity costs
and
performance-improvement initiatives and a shift in the sales mix due to the
accelerating growth in the emerging businesses.
STG&R
expenses were 28.3 percent of net sales in the third quarter of 2007 as
compared to 28.6 percent in the third quarter of 2006. STG&R expenses were
$78.1 million in the third quarter of 2007, in comparison to $69.5 million
in
the third quarter of 2006. The Q3 2007 increase includes $3.1 million related
to
the effect of changes in currency translation rates and the $4.5 million
of
expenses noted above related to performance-improvement initiatives. Q3 2006
STG&R expenses were reduced by approximately $2.2 million as a result of
adjusting incentive compensation accruals based on Company and stock price
performance.
Operating
income was $2.2 million in the third quarter of 2007, compared to $19.7 million
for the same period of 2006. The reduction was principally due to costs
associated with restructuring and performance-improvement
initiatives.
The
following table presents segment operating income:
Table
2
|
(in
thousands)
|
Operating
Income
Three
Months ended
September
30,
|
|||||||
|
2007
|
2006
|
|||||||
|
Paper
Machine Clothing
|
$ |
17,324
|
$ |
29,030
|
||||
|
Applied
Technologies
|
3,702
|
3,648
|
||||||
|
Albany
Door Systems
|
(99 | ) |
1,054
|
|||||
(more)
3
Third-quarter
segment operating income included the following expenses associated with
restructuring and performance-improvement initiatives:
Table
3
|
2007
|
2006
|
|||||||||||||||||||
|
(in
thousands)
|
Restructuring
and
other,
net
|
Idle-
capacity
costs
at
plants
closing
|
Performance-
improvement initiatives
|
Total
|
Restructuring
and
other,
net
|
|||||||||||||||
|
Paper
Machine Clothing
|
$ |
13,204
|
$ |
2,331
|
$ |
3,190
|
$ |
18,725
|
$ |
3,022
|
||||||||||
|
Applied
Technologies
|
-
|
-
|
452
|
452
|
-
|
|||||||||||||||
|
Albany
Door Systems
|
-
|
-
|
1,085
|
1,085
|
-
|
|||||||||||||||
|
Research
expense
|
308
|
-
|
-
|
308
|
-
|
|||||||||||||||
|
Unallocated
expense
|
-
|
-
|
1,798
|
1,798
|
1,074
|
|||||||||||||||
|
Consolidated
total
|
$ |
13,512
|
$ |
2,331
|
$ |
6,525
|
$ |
22,368
|
$ |
4,096
|
||||||||||
On
November 2, 2007, the Company filed a Form 8-K detailing the amount and timing
of restructuring expenses associated with the production shutdowns in East
Greenbush and Menands, New York. As described in that filing, some restructuring
charges are required to be recognized after the third quarter of 2007. Except
for the items described in that filing, the Company does not expect any
significant additional restructuring charges related to previously announced
restructuring activities. The Company expects idle-capacity costs related
to the
announced plant closures to continue through the first quarter of 2008. As
for
performance-improvement initiatives, the Company expects additional expenses
for
SAP to continue through 2008 and into 2009, expenses for the China start-up
to
continue through 2008, and expenses for the other performance-improvement
initiatives included in table 3 to continue into the first quarter of
2008.
The
effective third-quarter income tax rate before discrete tax items was 25
percent
in 2007 and 31 percent in 2006. Included in third-quarter income tax expense
are
discrete tax adjustments that decreased net income by $0.04 per share in
2007,
and increased net income by $0.12 per share in 2006.
(more)
4
Net
cash
provided by operating activities was $4.5 million in the third quarter of
2007,
compared to a use of cash in the amount of $24.7 million for the third quarter
of 2006. Cash flow in the third quarter of 2006 included a use of $40.8 million
related to the termination of the Company’s accounts receivable securitization
program. Capital spending during the third quarter of 2007 was $38.6 million,
and totaled $90.7 million for the first nine months of 2007. Construction
of the greenfield PMC plant in China and the expansion of manufacturing capacity
in Korea are progressing on plan, and the construction of the greenfield
Engineered Fabrics plant in Kaukauna, Wisconsin, was completed. The Company
expects capital spending to be consistent with the previously announced
plans, which call for $160 million of spending in 2007. Depreciation and
amortization were $14.3 million and $1.3 million, respectively, for the third
quarter of 2007, and are expected to be approximately $58 million and $5
million, respectively, for the full year.
Paper
Machine Clothing (PMC)
This
segment includes Paper Machine Clothing and Process Belts used in the
manufacture of paper and paperboard products.
Compared
to Q3 2006, PMC segment net
sales increased 8.5 percent, and increased 5.0 percent excluding the effect
of
changes in currency translation rates. In Western Europe, lower average prices
for paper machine clothing were more than offset by significantly higher
volumes
and orders year to date are 11.8 percent higher than the same period in 2006.
See tables 2 and 3 and the accompanying discussion for more detail on PMC
segment income.
Applied
Technologies
This
segment includes the emerging businesses that apply our core competencies
in
advanced textiles and materials to other industries including specialty
materials and composite structures for aircraft and other applications (Albany
Engineered Composites); fabrics, wires, and belting products for the nonwovens
and pulp industries, and industrial process belts for tannery,
textile,
(more)
5
and
corrugator applications (Albany Engineered Fabrics); specialty filtration
products for wet and dry applications (Albany Filtration Technologies);and
insulation for personal outerwear and home furnishings (PrimaLoft®).
Third-quarter
net sales increased 29.1
percent compared to Q3 2006, and 23.6 percent excluding the effect of changes
in
currency translation rates. Compared to the third quarter of 2006, Albany
Engineered Composites (AEC) net sales increased 46.6 percent, Albany Filtration
Technologies
net sales increased 150 percent, and Albany Engineered Fabrics net sales
increased 5.6 percent. AEC had an operating loss of $1.3 million ($0.03 per
share) for the third quarter resulting from both production inefficiencies
from
rapid scale-up of manufacturing at the Boerne, Texas, plant and a 25 percent
increase in AEC’s engineering and project management staff in response to
increasing growth opportunities.
Albany
Door Systems
This
segment includes sales and service of High Performance Doors and after-market
sales to a variety of industrial customers.
Third-quarter
net sales increased 27.1
percent compared to Q3 2006, and 19.0 percent excluding the effect of changes
in
currency translation rates. The order backlog for this segment was strong.
The
integration of R-Bac Industries into North American operations contributed
to
the sales growth. Manufacturing operations in Europe are being consolidated
into
Lippstadt, Germany, following the closure of the facility in Halmstad,
Sweden.
Comments
on Current and Planned Activities
President
and CEO Joe Morone said, “For the past several quarters, our earnings releases
and calls have focused on our efforts to return to Q2 2006 profit levels
by Q4
2007, excluding any costs associated with restructuring and
performance-improvement initiatives. We have described those efforts as
comprising three distinct sets of activities: (a) a gradual
(more)
6
recovery
of PMC revenues, fueled by growth in volume; (b) global restructuring; and
(c)
accelerating growth of our emerging businesses. In each of our most recent
calls, we have emphasized that all three sets of activities are necessary
to
restore and grow profitability, and that we have been making good and
sustainable progress in all three. We have also reminded investors that even
with this progress, the underlying risk of further price instability in PMC
remains real.
“In
Q3
2007, the good and sustainable progress continued on all three fronts. The
restructuring in particular hit peak levels of scope and intensity this quarter,
and reached virtually every corner of the Company, from the consolidation
of PMC
manufacturing capacity in North
America and Western Europe, to the expansion of PMC manufacturing capacity
in
Latin America and Asia, to the start-up of the shared services center in
Europe,
start-up of a greenfield manufacturing facility in Engineered Fabrics,
consolidation of manufacturing operations in European Doors, integration
of an
important acquisition in North American Doors, the continuing migration of
our
enterprise business systems to SAP, the rollout of an entirely new global
procurement system, and the elimination of another layer of management at
corporate headquarters.
“The
net
result is that by the end of the third quarter, we had put in place all of
the
measures necessary to achieve our short-term objective of returning to Q2
2006
profit levels by Q4 2007. Actual Q4 results will, of course, depend at least
to
some extent on short-term market fluctuations, but assuming no disruptions
in
the PMC market, we are optimistic about hitting our target, and internally,
we
have already moved on to the next phase in our ‘cash and grow’ strategy, which
is all about maximizing free cash flow from PMC, while maximizing profitable
growth in the emerging businesses.
(more)
7
“The
clearest measure of progress this quarter, and of why we are turning our
attention now to Phase 2 of cash and grow, is financial performance at the
operating unit level; that is, segment net sales and segment operating income
before the costs associated with restructuring and performance-improvement
initiatives.
“In
the
PMC segment, Q3 2007 net sales improved by 8.5 percent compared to Q3 2006
and
hit a record high for third-quarter revenues for this segment. Sales of paper
machine clothing by the Americas corridor grew 4 percent, despite a sharp
downturn in the Canadian market; sales by the European corridor grew 8 percent
despite lower prices; and sales by operations in the Asian corridor increased
23
percent. All of the growth was driven by increases in volume. The strong
PMC top
line is particularly noteworthy given the heavy restructuring in Q3. We were
able to push ahead in the marketplace, while at the same time avoiding the
kinds
of disruptions to customer supply chains that so often accompany
restructuring.
“We
saw
similar improvement in PMC segment operating income in Q3. As shown on tables
2
and 3, when the costs associated with the restructuring and
performance-improvement initiatives are excluded, operating income from PMC
increased by 12.5 percent in Q3 2007 compared to Q3 2006. We expect to see
additional improvement in PMC operating income as the savings from the most
recently announced plant shutdowns begin to take effect in the second quarter
of
2008, and as we continue to transform our business into the most efficient
global configuration possible.
“In
past
releases, we have not offered the level of detail shown in tables 2 and 3.
We
thought it helpful to do so now in order to provide investors with a sense
of
the magnitude of the restructuring that we are undergoing, and of the very
clear
signs of the resulting improvement in operational performance that are beginning
to emerge.
(more)
8
“Turning
to Albany Door Systems, in our last earnings release I expressed my
disappointment in the income performance of this business, but also confidence
that we were taking the steps necessary to improve profitability in Q3 and
to
deliver good performance in Q4 2007. Net sales in Q3 were 27 percent ahead
of
what was a strong Q3 for Doors in 2006, and were up sharply in all geographic
regions and in both product and after-market. More importantly, profitability
began to improve and was substantially better than Q2. We expect an acceleration
of both top- and bottom-line performance in Q4 2007 and into 2008.
“In
Applied Technologies sales grew by 29 percent compared to Q3 2006, and operating
income, excluding the effect of performance-improvement initiatives, increased
13.9 percent. The one disappointment in this segment was the $1.3 million
($0.03
per share) operating loss of Albany Engineered Composites (AEC). Yet even
here,
there were important signs of progress, particularly as we turn our attention
beyond our short-term Q4 target. Last quarter, when we reported that AEC
lost
$1.8 million, we explained that the loss stemmed from delays in shipment
requests from key customers, a not uncommon phenomenon in the aerospace
industry. This quarter, exactly the reverse occurred. Customer requests for
shipments surged. Sales were 46 percent ahead of Q3 2006, and 34 percent
ahead
of Q2 2007. This spike in customer requests for shipments is also a rather
common phenomenon in aerospace, and especially when it is associated with
the
introduction of a new product, it leads to a classic pattern: as suppliers
rush
to meet the surge in customer shipment schedules, the normal production learning
curve is compressed, which results in costly temporary inefficiencies. This
effect at our Boerne, Texas, plant was compounded by a 25 percent increase
in
AEC’s engineering and project management staff, as we continued to add technical
talent in order to keep apace of increasing new business development contracts
and opportunities.
(more)
9
“This
pattern is likely to continue for the next two quarters. We expect additional
surges in customer requests for shipments, and to keep up with the growth
in new
business opportunities with new and existing customers, we expect to continue
to
invest in additional engineering talent and capacity.
“For
the
past year, I have told our investors that I expected AEC to be accretive
during
2007. It is now clear that it will not be. We expect losses to diminish over
the
next two quarters and for the results to then become increasingly profitable
over the balance of 2008 and beyond.
“In
Q3
2007 and again in Q4, faced with more rapid growth than even we had been
anticipating, we could have opted to maximize AEC’s short-term operating income,
particularly given all the emphasis on returning to Q2 2006 profitability
by Q4
of this year. But doing so would have required us to delay shipments to our
customers, which would have undermined our emerging reputation, and to delay
hiring new technical talent, which would have forced us to forgo a number
of
promising new business opportunities. So we opted to place maximizing
intermediate and long-term profit growth ahead of Q3 and Q4 earnings. Everything
we are learning about this business, everything our customers tell us about
the
distinctiveness of our technology, leads us to the conclusion that Albany
Engineered Composites is an extraordinary
growth opportunity that if managed wisely in the very near term, will generate
attractive returns on investment for a long time to come.
“So
Q3 was
an important quarter for Albany International, marked by a combination of
an
unprecedented intensity and scope of restructuring, continuing progress in
each
of our three PMC markets, and powerful growth in our most important emerging
businesses. We believe we have taken all the steps necessary to realize our
short-term objective of restoring profit levels of Q2 2006 by Q4 of this
year,
and are now turning our attention to the next chapter in the cash and grow
story.”
(more)
10
The
Company plans a live web cast to discuss third-quarter 2007 financial results
on
Wednesday November 7, 2007, at 9:00 a.m. Eastern Time. For access, go to
www.albint.com
Albany
International is a global
advanced textiles and materials company. Its core business is the world’s
leading producer of custom-designed fabrics and belts essential to the
production of paper and paperboard. Albany’s family of emerging businesses
extend its advanced textiles and materials capabilities into a variety of
other
industries, most notably aerospace composites, nonwovens, building products,
and
high-performance industrial doors. Additional information about the Company
and
its businesses and products is available at www.albint.com.
This
release contains certain items, such as sales excluding currency effects,
and
the percentage increase in segment operating income excluding the costs
associated with restructuring and performance-improvement initiatives, that
may
be considered to be non-GAAP financial measures. Such items are provided
because
management believes that, when presented together with the GAAP items to
which
they relate, they can provide additional useful information to investors
regarding the registrant’s financial condition, results of operations, and cash
flows. Presenting increases or decreases in sales, after currency effects are
excluded, and highlighting the impact of specific restructuring and
performance-improvement measures on operating income of a business segment,
can
give management and investors additional insight into fundamental sales and
operating income trends.
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.
Forward-looking
statements in this release or in the webcast, including statements about
future
economic conditions, materials costs, growth in PMC sales and operating income
during
(more)
11
the
next several quarters, revenue growth and income expectations for the Company’s
emerging businesses, the amount and timing of anticipated costs and savings
associated with cost reduction and process improvement initiatives, pension
contributions, pricing conditions in the PMC industry, paper industry outlook,
the amount and timing of capital expenditures, tax rates, and depreciation
and
amortization are made pursuant to the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are based on current
expectations and are subject to various risks and uncertainties, including,
but
not limited to, economic conditions affecting the paper industry and other
risks
and uncertainties set forth in the Company’s 2006 Annual Report to Shareholders
and subsequent filings with the U.S. Securities and Exchange Commission.
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.
Contacts:
Investors:
John
Cozzolino, Vice President of Strategic Planning
518-445-2281
john.cozzolino@albint.com
Media:
Susan
Siegel, Director of Corporate Communications
518-445-2284
susan.siegel@albint.com
#
#
#
12
|
ALBANY
INTERNATIONAL CORP.
|
|||||||||||||||
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|||||||||||||||
|
(in
thousands except per share data)
|
|||||||||||||||
|
(unaudited)
|
|||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
|
September
30,
|
September
30,
|
||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
| $ |
276,252
|
$ |
242,838
|
Net
sales
|
$ |
801,259
|
$ |
755,691
|
|||||||
|
182,463
|
149,537
|
Cost
of goods sold
|
512,476
|
454,405
|
|||||||||||
|
93,789
|
93,301
|
Gross
profit
|
288,783
|
301,286
|
|||||||||||
|
78,067
|
69,521
|
Selling,
technical, general and research expenses
|
235,379
|
219,147
|
|||||||||||
|
13,512
|
4,096
|
Restructuring
and other
|
28,233
|
4,096
|
|||||||||||
|
2,210
|
19,684
|
Operating
income
|
25,171
|
78,043
|
|||||||||||
|
3,861
|
1,738
|
Interest
expense, net
|
10,873
|
6,329
|
|||||||||||
|
1,840
|
2,169
|
Other
expense, net
|
2,861
|
2,941
|
|||||||||||
| (3,491 | ) |
15,777
|
(Loss)/income
before income taxes
|
11,437
|
68,773
|
||||||||||
|
185
|
1,253
|
Income
tax expense
|
1,168
|
16,990
|
|||||||||||
| (3,676 | ) |
14,524
|
(Loss)/income
before associated companies
|
10,269
|
51,783
|
||||||||||
| (195 | ) | (196 | ) |
Equity
in (losses)/earnings of associated companies
|
(430 | ) |
47
|
||||||||
| $ | (3,871 | ) | $ |
14,328
|
Net
(loss)/income
|
$ |
9,839
|
$ |
51,830
|
||||||
|
(Losses)/earnings
per share:
|
|||||||||||||||
| $ | (0.13 | ) | $ |
0.49
|
Basic
|
$ |
0.33
|
$ |
1.73
|
||||||
| $ | (0.13 | ) | $ |
0.48
|
Diluted
|
$ |
0.33
|
$ |
1.70
|
||||||
|
Shares
used in computing (losses)/earnings per share:
|
|||||||||||||||
|
29,492
|
29,103
|
Basic
|
29,380
|
30,017
|
|||||||||||
|
29,492
|
29,594
|
Diluted
|
29,790
|
30,539
|
|||||||||||
| $ |
0.11
|
$ |
0.10
|
Dividends
per share
|
$ |
0.32
|
$ |
0.29
|
|||||||
|
ALBANY
INTERNATIONAL CORP.
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
(in
thousands, except share data)
|
||||||||
|
(unaudited)
|
||||||||
|
September
30,
|
December
31,
|
|||||||
|
2007
|
2006
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ |
46,767
|
$ |
68,237
|
||||
|
Accounts
receivable, net
|
232,551
|
202,611
|
||||||
|
Inventories
|
252,134
|
224,210
|
||||||
|
Income
taxes receivable and deferred
|
44,322
|
23,586
|
||||||
|
Prepaid
expenses
|
16,009
|
10,552
|
||||||
|
Total
current assets
|
591,783
|
529,196
|
||||||
|
Property,
plant and equipment, net
|
459,888
|
397,521
|
||||||
|
Investments
in associated companies
|
5,973
|
6,634
|
||||||
|
Intangibles
|
11,754
|
9,343
|
||||||
|
Goodwill
|
189,559
|
172,890
|
||||||
|
Deferred
taxes
|
106,712
|
112,280
|
||||||
|
Cash
surrender value of life insurance policies
|
42,861
|
41,197
|
||||||
|
Other
assets
|
53,187
|
37,486
|
||||||
|
Total
assets
|
$ |
1,461,717
|
$ |
1,306,547
|
||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
|
Notes
and loans payable
|
$ |
21,673
|
$ |
12,510
|
||||
|
Accounts
payable
|
55,198
|
50,214
|
||||||
|
Accrued
liabilities
|
140,882
|
101,995
|
||||||
|
Current
maturities of long-term debt
|
1,225
|
11,167
|
||||||
|
Income
taxes payable and deferred
|
6,662
|
20,099
|
||||||
|
Total
current liabilities
|
225,640
|
195,985
|
||||||
|
Long-term
debt
|
411,560
|
354,587
|
||||||
|
Other
noncurrent liabilities
|
219,641
|
219,774
|
||||||
|
Deferred
taxes and other credits
|
53,964
|
37,076
|
||||||
|
Total
liabilities
|
910,805
|
807,422
|
||||||
|
Commitments
and Contingencies
|
-
|
-
|
||||||
|
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
|
||||||||
|
34,819,384
in 2007 and 34,518,870 in 2006.
|
35
|
35
|
||||||
|
Class
B Common Stock, par value $.001 per share;
|
||||||||
|
authorized
25,000,000 shares; issued and
|
||||||||
|
outstanding
3,236,098 in 2007 and 2006
|
3
|
3
|
||||||
|
Additional
paid in capital
|
325,976
|
316,164
|
||||||
|
Retained
earnings
|
539,539
|
541,602
|
||||||
|
Accumulated
items of other comprehensive income:
|
||||||||
|
Translation
adjustments
|
26,944
|
(18,348 | ) | |||||
|
Pension
liability adjustment
|
(82,562 | ) | (81,071 | ) | ||||
|
809,935
|
758,385
|
|||||||
|
Less
treasury stock (Class A), at cost (8,530,066 shares
|
||||||||
|
in
2007 and 8,540,882 in 2006)
|
259,023
|
259,260
|
||||||
|
Total
shareholders' equity
|
550,912
|
499,125
|
||||||
|
Total
liabilities and shareholders' equity
|
$ |
1,461,717
|
$ |
1,306,547
|
||||
|
ALBANY
INTERNATIONAL CORP.
|
||||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
|
(in
thousands)
|
||||||||
|
(unaudited)
|
||||||||
|
Nine
Months Ended
|
||||||||
|
September
30,
|
||||||||
|
2007
|
2006
|
|||||||
|
OPERATING
ACTIVITIES
|
||||||||
|
Net
income
|
$ |
9,839
|
$ |
51,830
|
||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Equity
in losses/(earnings) of associated companies
|
430
|
(47 | ) | |||||
|
Depreciation
|
43,020
|
40,348
|
||||||
|
Amortization
|
3,605
|
3,096
|
||||||
|
Provision
for deferred income taxes, other credits and long-term
liabilities
|
(2,925 | ) | (17,067 | ) | ||||
|
Provision
for write-off of equipment
|
3,452
|
506
|
||||||
|
Increase
in cash surrender value of life insurance
|
(2,146 | ) | (2,562 | ) | ||||
|
Unrealized
currency transaction gains and losses
|
(273 | ) |
2,112
|
|||||
|
Shares
contributed to ESOP
|
4,065
|
5,209
|
||||||
|
Stock
option expense
|
602
|
1,154
|
||||||
|
Tax
benefit of options exercised
|
(1,088 | ) | (697 | ) | ||||
|
Issuance
of shares under long-term incentive plan
|
937
|
-
|
||||||
|
Changes
in operating assets and liabilities, net of business
acquisition:
|
||||||||
|
Accounts
receivable
|
(16,895 | ) | (61,728 | ) | ||||
|
Note
receivable
|
-
|
17,827
|
||||||
|
Inventories
|
(18,804 | ) | (24,093 | ) | ||||
|
Income
taxes prepaid and receivable
|
(16,076 | ) |
-
|
|||||
|
Prepaid
expenses
|
(4,570 | ) | (2,139 | ) | ||||
|
Accounts
payable
|
922
|
(2,632 | ) | |||||
|
Accrued
liabilities
|
33,449
|
15,333
|
||||||
|
Income
taxes payable
|
1,667
|
(1,155 | ) | |||||
|
Other,
net
|
61
|
(4,200 | ) | |||||
|
Net
cash provided by operating activities
|
39,272
|
21,095
|
||||||
|
INVESTING
ACTIVITIES
|
||||||||
|
Purchases
of property, plant and equipment
|
(90,684 | ) | (54,334 | ) | ||||
|
Purchased
software
|
(11,687 | ) | (306 | ) | ||||
|
Acquisitions,
net of cash acquired
|
(9,592 | ) | (7,918 | ) | ||||
|
Cash
received from life insurance policy terminations
|
1,470
|
-
|
||||||
|
Premiums
paid for life insurance policies
|
(988 | ) |
-
|
|||||
|
Net
cash (used in) investing activities
|
(111,481 | ) | (62,558 | ) | ||||
|
FINANCING
ACTIVITIES
|
||||||||
|
Proceeds
from borrowings
|
83,697
|
209,530
|
||||||
|
Principal
payments on debt
|
(28,104 | ) | (16,488 | ) | ||||
|
Purchase
of treasury shares
|
-
|
(131,499 | ) | |||||
|
Purchase
of call options on common stock
|
-
|
(47,688 | ) | |||||
|
Sale
of common stock warrants
|
-
|
32,961
|
||||||
|
Proceeds
from options exercised
|
2,958
|
2,428
|
||||||
|
Tax
benefit of options exercised
|
1,088
|
697
|
||||||
|
Debt
issuance costs
|
-
|
(5,434 | ) | |||||
|
Dividends
paid
|
(9,088 | ) | (8,533 | ) | ||||
|
Net
cash provided by financing activities
|
50,551
|
35,974
|
||||||
|
Effect
of exchange rate changes on cash flows
|
188
|
3,503
|
||||||
|
(Decrease)
in cash and cash equivalents
|
(21,470 | ) | (1,986 | ) | ||||
|
Cash
and cash equivalents at beginning of year
|
68,237
|
72,771
|
||||||
|
Cash
and cash equivalents at end of period
|
$ |
46,767
|
$ |
70,785
|
||||