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) April 21, 2005
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ALBANY INTERNATIONAL CORP. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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0-16214 |
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14-0462060 |
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(State or other jurisdiction |
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(Commission |
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File Number) |
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1373 Broadway, Albany, New York |
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12204 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code (518) 445-2200
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None |
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(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 April 21, 2005, Albany International issued a news release announcing 2005 first quarter financial results. A copy of the news release is furnished as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
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(a) |
Not applicable |
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(b) |
Not applicable |
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(c) |
Exhibits. The following exhibit is being furnished herewith: |
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99.1 |
News release dated April 21, 2005 announcing 2005 first quarter 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.
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ALBANY INTERNATIONAL CORP. |
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By: |
/s/ MICHAEL C. NAHL |
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Name: |
Michael C. Nahl |
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Title: |
Executive Vice President and Chief Financial Officer |
Date: April 21, 2005
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Registrant’s news release dated April 21, 2005 announcing 2005 first quarter financial results. |
Exhibit 99.1
Albany International Reports First-Quarter 2005 Earnings
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First-Quarter Highlights |
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- |
Net income per share was $0.60, compared to $0.10 for the same period last year. In 2004 restructuring charges and an impairment loss reduced net income by $0.24 per share and $0.08 per share, respectively. |
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- |
The resolution of certain income tax matters favorably affected net income by $0.04 per share in 2005 and $0.03 per share in 2004. |
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- |
Net sales were $241.1 million, an increase of 4.2 percent compared to the same period last year and 0.9 percent excluding the effect of changes in currency translation rates. |
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- |
Operating income was $29.8 million, compared to $13.0 million in the first quarter of 2004. In the earlier period, restructuring charges reduced operating income by $11.6 million. |
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- |
Net cash provided by operating activities was $27.4 million during the quarter, compared to $24.5 million for the same period last year. |
ALBANY, N.Y., April 21 /PRNewswire-FirstCall/ -- Albany International Corp. (NYSE/PCX/FWB: AIN) reported first-quarter net income per share of $0.60, compared to $0.10 for the same period last year. In 2004 restructuring charges and an impairment loss reduced net income by $0.24 per share and $0.08 per share, respectively.
The resolution of certain income tax matters had a favorable effect on earnings amounting to $0.04 per share in 2005 and $0.03 per share in 2004. Net sales increased $9.8 million, or 4.2 percent compared to the same period last year. Excluding the effect of changes in currency translation rates, net sales increased 0.9 percent.
The Company revised certain components of its operating segments to be consistent with the new internal financial reporting and management structure announced in the first quarter of 2005 and to comply with Financial Accounting Standards No. 131. The Company’s Engineered Products business line is now included in the Applied Technologies segment; in previous financial reports, this business line was included in the Engineered Fabrics segment; certain activities previously included in the Applied Technologies segment have been reclassified to the Engineered Fabrics segment. The components of the Engineered Fabrics and Applied Technologies segments are defined in “Comments on Operations.”
The following table presents 2004 and 2005 net sales by segment and the effect of changes in currency translation rates and reflects the segment changes identified above:
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Net sales |
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Increase in first |
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Percent |
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Percent |
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(in thousands) |
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2005 |
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2004 |
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Engineered Fabrics |
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$ |
182,346 |
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$ |
176,068 |
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$ |
5,692 |
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3.6 |
% |
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0.3 |
% |
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Albany Door Systems |
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29,326 |
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27,832 |
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1,264 |
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5.4 |
% |
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0.8 |
% |
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Applied Technologies |
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29,392 |
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27,406 |
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698 |
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7.2 |
% |
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4.7 |
% |
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Total |
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$ |
241,064 |
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$ |
231,306 |
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$ |
7,654 |
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4.2 |
% |
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0.9 |
% |
Gross profit was 40.8 percent of net sales in the first quarter of 2005, compared to 39.7 percent in the first quarter of 2004. The increase is due principally to higher sales in 2005 and the benefits of cost reduction initiatives completed in 2004.
Selling, technical, general, and research expenses increased 2.1 percent compared to the first quarter of 2004, but decreased 0.9 percent excluding the effect of changes in currency translation rates.
Operating income was $29.8 million in the first quarter of 2005, compared to $13.0 million in the same period last year. In 2004 restructuring charges reduced operating income by $11.6 million.
Other expense, net, was $1.3 million for the quarter, compared to $5.8 million for the first quarter of 2004. The decrease is due principally to an impairment loss of $4.0 million in 2004 that represented the full value of the Company’s investment in an unaffiliated company.
Income tax expense includes, in both years, the benefit of resolving certain income tax matters that increased net income by $1.4 million in 2005 and $0.9 million in 2004.
Net cash provided by operating activities was $27.4 million during the first quarter of 2005, compared to $24.5 million for the same period of 2004. Excluding the effect of changes in currency translation rates, inventories increased $8.5 million during the first quarter of 2005, while accounts receivable decreased $3.8 million.
Capital spending during the quarter was $9.5 million. For the full year, capital spending is expected to be approximately $45 million.
Comments on Operations
Chairman and Chief Executive Officer Frank Schmeler commented, “Net sales increased in each of our business segments during the quarter. Margins improved despite the impact of expected cost increases in energy, raw materials, and employee health costs.”
Engineered Fabrics
(This segment includes Paper Machine Clothing (PMC) and Process Belts used in the manufacture of paper and paperboard products. Engineered Products for the nonwovens and pulp industries, previously included in this segment, is now included in the Applied Technologies segment.)
First-quarter 2005 net sales for the Engineered Fabrics segment increased 3.6 percent compared to the same period last year. Excluding the effect of changes in currency translation rates, net sales increased 0.3 percent compared to the first quarter of 2004. Our supply strategy continues to focus on the introduction of products and services that will increase our customers’ profitability. As a result, we were able to obtain modest price increases in several markets during the quarter. The combination of stronger net sales and the benefit of completed restructuring activities resulted in improved earnings in this segment for the quarter.
Albany Door Systems
(This segment includes sales and service of High Performance Doors and after-market sales to a wide variety of industrial customers.) First-quarter net sales for the Door Systems segment increased 5.4 percent compared to the first quarter of 2004 and 0.8 percent excluding the effect of changes in currency translation rates. Economic weakness in Europe continued to adversely impact this segment. Earnings for the segment increased due to sales gains in North America and improved operating efficiencies in both Europe and North America.
Applied Technologies
(This segment includes materials and structural-component businesses including insulation for personal outerwear and home furnishings (PrimaLoft); specialty materials and composite structures for aircraft and other applications (Techniweave); specialty filtration products for wet and dry applications (Industrial Process Technologies); industrial insulation products (High Performance Materials); and fabrics, wires and belting products for the nonwovens and pulp industries (Engineered Products).
Net sales in this segment for the first quarter of 2005 increased 7.2 percent compared to the same period in 2004 and 4.7 percent excluding the effect of changes in currency translation rates. New products and efficiency gains continue to drive increased revenue and earnings in this segment.
Looking Ahead
Mr. Schmeler continued, “We are cautiously optimistic about the remainder of 2005, encouraged by the improved earnings for the Engineered Fabrics segment in the first quarter and the positive impact of our completed restructuring activities. However, we are concerned about the current uncertainty regarding prospects for global economic growth.
“Improving revenue and earnings in the Albany Door Systems segment appear to be sustainable, despite economic weakness in Europe. Results in the Applied Technologies segment are promising, and we expect to see continued improvements over last year, driven by new products, efficiency gains, and new market opportunities.
“Our focus on value-added products and solutions for our customers is resulting in the accelerated development of new products in each of our business segments. By creating solutions for our customers that significantly improve their operations and increase their profitability, we are also providing value to our shareholders.
“In the uncertain global environment of 2005, we will focus on business growth. We will generate growth by concentrating on the areas under our control, including new product development, efficiency improvements, and the strong relationships we have developed with our customers.”
The Company plans a live webcast to discuss first-quarter 2005 earnings on Friday, April 22, 2005, at 9:00 a.m. Eastern Time. For access, go to http://www.albint.com.
Albany International is the world’s largest producer of paper machine clothing and high-performance doors with manufacturing plants strategically located to serve its global customers. Additional information about the Company and its businesses and products is available at http://www.albint.com.
This release contains certain items 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. 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, energy costs, growth, sales and earnings, cash flows, pricing, markets, new products, paper industry outlook, 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 2004 Annual Report to Shareholders and subsequent filings with the U.S. Securities and Exchange Commission.
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED
EARNINGS
(in thousands except per share data)
(unaudited)
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Three Months Ended |
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2005 |
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2004 |
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Net sales |
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$ |
241,064 |
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$ |
231,306 |
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Cost of goods sold |
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142,729 |
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139,528 |
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Gross profit |
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98,335 |
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91,778 |
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Selling, technical, general and research expenses |
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68,541 |
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67,152 |
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Restructuring, net |
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— |
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11,593 |
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Operating income |
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29,794 |
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13,033 |
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Interest expense, net |
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3,689 |
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3,654 |
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Other expense, net |
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1,318 |
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5,787 |
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Income before income taxes |
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24,787 |
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3,592 |
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Income tax expense |
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6,048 |
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217 |
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Income before associated companies |
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18,739 |
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3,375 |
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Equity in earnings/(losses) of associated companies |
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170 |
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(82 |
) |
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Net income |
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18,909 |
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3,293 |
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Retained earnings, beginning of period |
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434,057 |
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433,407 |
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Dividends declared |
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(2,534 |
) |
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(2,370 |
) |
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Retained earnings, end of period |
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$ |
450,432 |
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$ |
434,330 |
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Earnings per share - basic: |
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Net income |
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$ |
0.60 |
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$ |
0.10 |
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Earnings per share - diluted: |
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Net income |
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$ |
0.59 |
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$ |
0.10 |
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Average number of shares used in basic earnings per share computations |
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31,534 |
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33,596 |
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Average number of shares used in diluted earnings per share computations |
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32,099 |
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34,240 |
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Dividends per share |
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$ |
0.08 |
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$ |
0.07 |
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ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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(unaudited) |
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December 31, |
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ASSETS |
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Cash and cash equivalents |
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$ |
65,883 |
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$ |
58,982 |
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Accounts receivable, net |
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135,895 |
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144,950 |
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Note receivable |
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19,339 |
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18,955 |
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Inventories: |
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Finished goods |
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99,662 |
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96,061 |
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Work in process |
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57,398 |
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57,470 |
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Raw material and supplies |
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33,575 |
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31,999 |
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190,635 |
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185,530 |
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Deferred taxes |
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24,832 |
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26,526 |
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Prepaid expenses |
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9,018 |
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8,867 |
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Total current assets |
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445,602 |
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443,810 |
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Property, plant and equipment, net |
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361,767 |
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378,170 |
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Investments in associated companies |
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6,206 |
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6,456 |
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Intangibles |
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13,654 |
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14,207 |
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Goodwill |
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164,582 |
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171,622 |
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Deferred taxes |
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87,296 |
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87,848 |
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Cash surrender value of life insurance policies |
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35,381 |
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34,583 |
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Other assets |
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21,078 |
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19,064 |
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Total assets |
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$ |
1,135,566 |
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$ |
1,155,760 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Notes and loans payable |
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$ |
7,839 |
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$ |
14,617 |
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Accounts payable |
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39,955 |
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43,378 |
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Accrued liabilities |
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107,757 |
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120,263 |
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Current maturities of long-term debt |
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1,231 |
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1,340 |
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Income taxes payable and deferred |
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24,695 |
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29,620 |
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Total current liabilities |
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181,477 |
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209,218 |
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Long-term debt |
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212,831 |
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213,615 |
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Other noncurrent liabilities |
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156,691 |
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147,268 |
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Deferred taxes and other credits |
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34,342 |
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34,882 |
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Total liabilities |
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585,341 |
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604,983 |
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Commitments and Contingencies |
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— |
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— |
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SHAREHOLDERS’ EQUITY |
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Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued |
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— |
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— |
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Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; issued 33,464,129 in 2005 and 33,176,872 in 2004 |
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33 |
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33 |
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Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 3,236,476 in 2005 and 3,236,476 in 2004 |
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3 |
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3 |
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Additional paid in capital |
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303,488 |
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296,045 |
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Retained earnings |
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450,432 |
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434,057 |
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Accumulated items of other comprehensive income: |
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Translation adjustments |
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(37,507 |
) |
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(11,711 |
) |
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Derivative valuation adjustment |
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(1,359 |
) |
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(2,785 |
) |
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Pension liability adjustment |
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(38,369 |
) |
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(38,369 |
) |
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676,721 |
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677,273 |
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Less treasury stock (Class A), at cost (5,004,152 shares in 2005 and in 2004) |
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126,496 |
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126,496 |
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Total shareholders’ equity |
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550,225 |
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|
550,777 |
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Total liabilities and shareholders’ equity |
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$ |
1,135,566 |
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$ |
1,155,760 |
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ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Three Months Ended |
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2005 |
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2004 |
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OPERATING ACTIVITIES |
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Net income |
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$ |
18,909 |
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$ |
3,293 |
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| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
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Equity in (earnings)/losses of associated companies |
|
|
(170 |
) |
|
82 |
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Depreciation |
|
|
13,376 |
|
|
13,825 |
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Amortization |
|
|
725 |
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|
928 |
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Provision for deferred income taxes, other credits and long-term liabilities |
|
|
5,200 |
|
|
5,392 |
|
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Provision for write-off of equipment |
|
|
807 |
|
|
5,269 |
|
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Provision for impairment of investment |
|
|
— |
|
|
4,000 |
|
|
Increase in cash surrender value of life insurance |
|
|
(798 |
) |
|
(667 |
) |
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Change in unrealized currency transaction gains and losses |
|
|
(569 |
) |
|
6,268 |
|
|
Gain on disposition of assets |
|
|
— |
|
|
736 |
|
|
Shares contributed to ESOP |
|
|
2,368 |
|
|
2,588 |
|
|
Tax benefit of options exercised |
|
|
1,262 |
|
|
913 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
4,409 |
|
|
(1,862 |
) |
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Note receivable |
|
|
(384 |
) |
|
833 |
|
|
Inventories |
|
|
(8,451 |
) |
|
(5,319 |
) |
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Prepaid expenses |
|
|
(339 |
) |
|
891 |
|
|
Accounts payable |
|
|
464 |
|
|
930 |
|
|
Accrued liabilities |
|
|
(2,100 |
) |
|
(3,357 |
) |
|
Income taxes payable |
|
|
(4,841 |
) |
|
(12,044 |
) |
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Other, net |
|
|
(2,455 |
) |
|
1,814 |
|
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Net cash provided by operating activities |
|
|
27,413 |
|
|
24,513 |
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(9,508 |
) |
|
(15,275 |
) |
|
Purchased software |
|
|
(411 |
) |
|
(140 |
) |
|
Proceeds from sale of assets |
|
|
— |
|
|
1,246 |
|
|
Net cash used in investing activities |
|
|
(9,919 |
) |
|
(14,169 |
) |
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
8,040 |
|
|
8,299 |
|
|
Principal payments on debt |
|
|
(15,493 |
) |
|
(6,100 |
) |
|
Purchase of treasury shares |
|
|
— |
|
|
(19,127 |
) |
|
Proceeds from options exercised |
|
|
3,814 |
|
|
3,416 |
|
|
Debt issuance costs |
|
|
— |
|
|
(1,555 |
) |
|
Dividends paid |
|
|
(2,509 |
) |
|
(2,346 |
) |
|
Net cash used in financing activities |
|
|
(6,148 |
) |
|
(17,413 |
) |
|
Effect of exchange rate changes on cash flows |
|
|
(4,445 |
) |
|
(2,907 |
) |
|
Increase/(decrease) in cash and cash equivalents |
|
|
6,901 |
|
|
(9,976 |
) |
|
Cash and cash equivalents at beginning of year |
|
|
58,982 |
|
|
78,822 |
|
|
Cash and cash equivalents at end of period |
|
$ |
65,883 |
|
$ |
68,846 |
|
SOURCE Albany International Corp.
-0- 04/21/2005
/CONTACT: Kenneth C. Pulver, Vice President-Global Marketing &
Communications of Albany International Corp., +1-518-445-2214/
/Web site: http://www.albint.com /