Albany International Q1 2026 Earnings Report

Albany International EPS Results

• Actual EPS: $0.60
• Consensus EPS: $0.55
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $0.73

Albany International Revenue Results

• Actual Revenue: $311.33 million
• Expected Revenue: $281.00 million
• Beat/Miss: Beat by +$30.33 million
• YoY Revenue Growth: +7.80%

Albany International Announcement Details

• Quarter: Q1 2026
• Date: 4/30/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, April 30, 2026
• Conference Call Time: 8:30AM ET

Albany International (NYSE:AIN) Corp. is a global developer and manufacturer of advanced engineered materials and process technologies. The company serves customers in the paper, aerospace and other industrial markets through two primary business segments: Machine Clothing and Albany Engineered Composites.

The Machine Clothing segment produces custom-designed fabrics, belts and related products used in paper manufacturing and other industrial processes. These products support applications such as forming, pressing and drying paper, helping manufacturers improve production efficiency and product quality.

Albany Engineered Composites develops and manufactures lightweight composite components and assemblies, primarily for the aerospace industry. Its offerings include structural components and other specialized composite products designed for commercial and military aircraft, as well as selected industrial applications.

Founded in 1895, Albany International is headquartered in Rochester, New Hampshire, and serves customers in North America, Europe, Asia and other international markets. The company operates manufacturing and service locations in multiple regions to support its global customer base.

Albany International Q1 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Quarterly results showed $311.3 million in revenue (up 7.8% YoY) with Adjusted results of $48.2 million and a margin decline to 15.5% driven by mix (more Engineered Composites) and foreign exchange headwinds.
• Positive Sentiment: Engineered Composites outperformed internal expectations with revenue of $145.4 million, new contract wins including Pratt & Whitney Geared Turbofan work, and ramping demand across commercial and defense programs (LEAP, JASSM/LRASM, CH-53K).
• Negative Sentiment: Machine Clothing revenue fell to $166 million amid softness and overcapacity in China and an equipment failure early in Q1—management says recovery is underway but visibility in China remains limited.
• Neutral Sentiment: The strategic review of the Amelia Earhart Drive (CH-53K) facility is on schedule with a PwC standalone analysis completed and marketing materials being finalized, but no conclusions or transaction details yet.
• Positive Sentiment: Liquidity and outlook were reinforced with improved free cash flow (-$3.6 million vs. -$13.5M prior), $122.6 million cash, ~$354 million net debt and ~$446 million available capital, plus Q2 revenue guidance of $335–345 million and Adj. EPS of $0.70–0.80.

Presentation

[Operator]

Thank you for standing by. My name is Cath, and I will be your operator for today. At this time, I would like to welcome everyone to the Q1 2026 Albany International Corp earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Karen Blomquist, Director of Investor Relations. Please go ahead.

[Karen Blomquist, Director of Investor Relations at Albany International]

Thank you, operator, and good morning, everyone. Welcome to Albany International's Q1 2026 earnings call. As a reminder for those listening on the call, please refer to our press release issued this morning detailing our quarterly financial results. Contained in the text of the release is a notice regarding our forward-looking statements and the use of certain non-GAAP financial measures and their reconciliation to GAAP. For the purposes of this conference call, those same statements apply to our verbal remarks this morning. Our remarks today may reference our earnings presentation, which is available on the investor relations section of our website, albint.com. Today, we will make statements that are forward-looking and contain a number of risks and uncertainties, which could cause actual results to differ from those expressed or implied.

[Karen Blomquist, Director of Investor Relations at Albany International]

For a full discussion of these risks and uncertainties, please refer to both our earnings release of April 30, 2026 as well as our SEC filings, including our 10-Q and our 10-K. Now I'll turn the call over to Gunnar Kleveland, our President and CEO, who will provide opening remarks. Gunnar?

[Gunnar Kleveland, President and CEO at Albany International]

Thank you, Karen. Good morning and welcome, everyone. Thank you for joining our Q1 earnings call. We entered 2026 as a more focused and disciplined organization with a clear strategy centered on our core strengths. Our culture begins with caring for our people, and it was an honor to recently have our Engineered Composites segment recognized as one of America's Safest Companies. Safety is a priority at Albany and is embedded in how we design processes and operate each day. A strong safety culture translates to a strong quality culture. This operational philosophy is also manifested in our outstanding on-time delivery performance. Our focus on safety, quality, and operational excellence creates a solid foundation for our reliable operations while our value proposition remains grounded in our shared expertise in industrial weaving and material science, which connects our two businesses and differentiates us in the markets we serve.

[Gunnar Kleveland, President and CEO at Albany International]

I'd like to take a minute to address the conflict in the Middle East. We're continuously monitoring and working closely with our suppliers and customers, and to date, we have not seen any impact and have made only slight adjustment to delivery routes. Raw materials are generally protected by either long-term contracts or customer-directed contracts. We will continue to monitor and work to minimize any supply chain risk. At the same time, we're seeing increased demand on our weapons programs and are maximizing production on key programs. In Machine Clothing, the team did an outstanding job taking corrective actions to make up the downtime of a machine malfunction, and we expect that recovery to be completed in the back half of the year. More broadly, demand conditions across our end markets stabilized in the Q1.

[Gunnar Kleveland, President and CEO at Albany International]

In Engineered Composites, our focus remains on refining our operating model and prioritizing higher value add applications, particularly within our advanced weaving technologies, including 3D weaving, braiding, winding, and Resin Transfer Molding that serve end markets such as commercial and defense propulsion systems, missile production, and space exploration. We're seeing volume increase across key programs, reflecting both higher production rates and the benefit of the actions we have taken over the past 12 months. Importantly, we're winning new business with new and existing customers, and demand remains strong across defense platforms, and the LEAP production continues to increase. Our current pipeline of new business opportunities remains robust and continues to expand as we focus on new applications where our expertise and products offer greater strengths and lighter weight solutions.

[Gunnar Kleveland, President and CEO at Albany International]

We believe the actions we have taken and the trends we see across both segments position us well to drive strong free cash generation and build on the baseline we established exiting 2025. This provides us with the flexibility to continue allocating capital in a balanced and disciplined manner, including reinvesting in the business to support long-term growth while also returning cash to shareholders. Turning to the quarter, we're off to a solid start to 2026, with revenue of $311 million, up 7.8% year-over-year, which translated to Adjusted EBITDA of $48 million. In Machine Clothing, revenue for the quarter was $166 million and came in ahead of our expectations across all regions, including North America, Europe and China.

[Gunnar Kleveland, President and CEO at Albany International]

Despite the recent stabilization in China and improved order rates, which are positive developments, visibility beyond the near term remains limited. As we previously disclosed, at the start of the Q1, we experienced an equipment failure at one of our facilities, and I'm pleased to report that we were able to recover more of the lost production related to the unplanned downtime than we initially anticipated in the Q1. Assuming the equipment continues to operate as expected, we believe we are well-positioned to recover the remaining lost volume by the end of the year. We're actively managing the situation and are relocating a machine from a close facility to have a long-term solution in place by year-end. Adjusted EBITDA margin for MC was 25.9%.

[Gunnar Kleveland, President and CEO at Albany International]

On a Constant Currency, margins were stable, driven by a meaningful improvement across Europe as we continue to realize the benefits of integration activities. Turning to Engineered Composites. Revenue for a quarter was $145 million compared to $114 million in the prior year. The increase was driven by broad-based growth across our programs, with incremental contribution from S35 missile systems, LEAP, 787 and the CH-53K. Segment-Adjusted EBITDA was $17 million or 11.7% of sales, compared to $15 million or 13.5% of sales in the prior year.

[Gunnar Kleveland, President and CEO at Albany International]

The increase in EBITDA reflects higher overall volume, while the margins, in line with expectations, were driven by mix, primarily the impact of CH-53K aft program revenue, which is now booked at zero margin following the actions taken in the Q3 of 2025. In new business developments, we're excited to announce our new contract with Pratt & Whitney for composite engine components for their Geared Turbofan. The Turbofan relies extensively on advanced composite materials to achieve its fuel efficiency, noise reduction, and weight targets, which strongly leverages AEC's strengths in high-performance composite structures. For both JASSM and LRASM missiles, we have been requested by our customer to increase production, bringing output to the highest level achievable within our current capabilities, including through the use of overtime.

[Gunnar Kleveland, President and CEO at Albany International]

Turning to the strategic review of the Amelia Earhart Drive Facility in Salt Lake City, which houses the CH-53K program. We continue to make progress and have completed the standalone analysis with PwC. While it is still too early in the process for us to share any conclusions, we remain on schedule and look forward to providing an update as we move towards a resolution. As we look ahead, our priorities remain clear: disciplined execution, continued progress across both segments, and driving improved profitability and cash generation. In Machine Clothing, we saw stabilization in key markets and remained focused on execution and margin recovery. In Engineered Composites, we're scaling the business, refining our operating model and prioritizing higher value application to support long-term growth and margin expansion.

[Gunnar Kleveland, President and CEO at Albany International]

We believe Albany is well-positioned to deliver sustainable value for our customers and shareholders, supported by our differentiated capabilities and a more focused, disciplined approach. I would like to thank our employees for their continued dedication as well as our customers, partners, and shareholders for their ongoing support. With that, I will turn the call over to Will to review the financial results in more detail.

[Will Station, EVP and CFO at Albany International]

Thank you, Gunnar, and good morning. Before turning to the financials, I would like to remind you that a reconciliation of GAAP to non-GAAP measures discussed today can be found in this morning's press release. Q1 revenue was $311.3 million, representing growth of 7.8% year-over-year. This increase was driven primarily by high volumes in Engineered Composites as key programs continued to ramp, partially offset by lower volumes in Machine Clothing, particularly in China. Adjusted EBITDA for the quarter was $48.2 million, compared to $55.7 million in the prior year, reflecting a margin of 15.5%. The year-over-year decline in margin was primarily driven by a higher mix of revenue from Engineered Composites, which carry structurally lower margins, as well as lower volumes in Machine Clothing and the impacts of foreign exchange.

[Will Station, EVP and CFO at Albany International]

In Machine Clothing, results reflect continued softness in Asia markets, particularly in China, resulting in a modest year-over-year decline in revenue to $166 million, compared to $174.7 million in the prior year. Despite this headwind, underlying trends remained stable and operational execution was solid. Adjusted EBITDA for the segment was $43 million with a margin of 25.9%. The year-over-year decline was driven primarily by foreign exchange impacts and lower volume in Asia. On a Constant Currency basis, margins were stable overall, supported by efficiency initiatives and integration progress. In Engineered Composites, performance was solid above our internal expectations. The revenue increased to $145.4 million from $114.1 million in the prior year.

[Will Station, EVP and CFO at Albany International]

The growth was driven by higher volumes across multiple programs, including commercial aerospace platforms such as LEAP, as well as defense programs. The outperformance reflects both the timing of program ramps and strong execution, which enabled us to meet higher than anticipated demand in the quarter. Adjusted EBITDA for the segment was $16.9 million compared to $15.4 million last year. While margins declined to 11.7%, this reflects the impact of prior year items and mix, including zero margin revenues associated with actions taken on a CH-53K aft program in 2025. Gross profit for the quarter was $99.8 million with a margin of 32.1% compared to 33.4% in the prior year. The change reflects revenue mix with a greater contribution from Engineered Composites.

[Will Station, EVP and CFO at Albany International]

Operating income was $25.4 million, representing a margin of 8.1% compared to 9.8% last year. The decline was driven by higher non-recurring and restructuring expenses. Net interest expense increased to $5.5 million, reflecting higher borrowing costs. Other income was at a net benefit of $3.2 million, driven primarily by foreign currency and derivative impacts. The effective tax rate for the quarter was 33.1% compared to 26.6% in the prior year, largely due to the absence of favorable discrete items. Free cash flow was at a net use of $3.6 million compared to a net use of $13.5 million in the prior year period. The year-over-year improvement reflects timely customer collections.

[Will Station, EVP and CFO at Albany International]

Capital expenditures totaled $9.3 million, focused on facility optimization and investments tied to key customer programs. R&D expense was $13 million, reflecting our continued commitment to innovation. We ended the quarter with $122.6 million in cash and $477 million in total debt, resulting in net debt of approximately $354 million. Including revolver availability, we have approximately $446 million of available capital, providing flexibility to support ongoing investments and return capital to shareholders. Looking ahead, current trends support a stable outlook across both segments. In Machine Clothing, we expect modest sequential improvement in volume in the Q2 following typical Q1 seasonality. Assuming no additional equipment downtime, we expect to recover the remainder of lost volume as the year progresses.

[Will Station, EVP and CFO at Albany International]

In Engineered Composites, we expect continued growth supported by ongoing program ramps across both commercial and defense platforms. For the Q2, we expect consolidated revenue in the range of $335 million-$345 million. We anticipate Adjusted EPS in the range of $0.70-$0.80 and an effective tax rate of approximately 31.5%. For the full year in Machine Clothing, we continue to see stable demand in Europe and the Americas. While China shows signs of stabilization, we still have limited visibility for the remainder of the year. In Engineered Composites, we expect continued growth driven by key platforms with margin levels normalizing relative to the prior year. Now, I'd like to open the call up for questions.

[Operator]

Thank you. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number 1 on your telephone keypad. We ask to please limit to 1 question and 1 follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Peter Arment with Baird. Your line is open.

[Peter Arment, Analyst at Baird]

Hey, good morning, Gunnar and Will. Thanks for your time.

[Will Station, EVP and CFO at Albany International]

Good morning.

[Peter Arment, Analyst at Baird]

Hey, Gunnar, maybe you could just give us an update on Salt Lake and discussions around CH-53K, what you can say about planned divestiture or anything you could kinda highlight. I know it's obviously challenging given there's ongoing negotiations.

[Gunnar Kleveland, President and CEO at Albany International]

Yeah, Peter Arment, I think that the performance out of our Salt Lake facility, as you can see with the performance in the Q1, has been very good. We stay very close to our customer and continue to deliver both for our customer on the CH-53K program as well as all the other programs as well as the war fighter. That is the commitment that we have given through this process. The process of the strategic review is progressing to our schedule. We've we're in the process of finalizing the marketing material so that we can go more directly to the interested parties that have already contacted us and Guggenheim.

[Gunnar Kleveland, President and CEO at Albany International]

I would say just like Will said, we are on schedule, and we are staying connected with our customer throughout this process.

[Peter Arment, Analyst at Baird]

Appreciate that color. If I could just ask a follow-up unrelated on the MC business. Could you just give us a little more color on the overcapacity issue in Asia? You know, the MC business has been such a resilient business, you know, over the years, and obviously you've got different regions that it's in. Could you just give us a little more color on what's driving the overcapacity? Is it just, you know, economic activity or something specific? Thanks.

[Gunnar Kleveland, President and CEO at Albany International]

Yeah. The investment in paper machines and new machines in China specifically has been very high in the last several years. As you know, Peter, to run a paper machine profitably, it needs to run at high speeds. That's where we come in, and we have the best belts for that. They overproduce. That overproduction, that's what we are uncertain about. You know, how long does it take to get the paper back to a normal level so that production can pick up again? The other uncertainty is there too much production capability in China, and is this a cycle that they're gonna go through? Because we see new builds there.

[Gunnar Kleveland, President and CEO at Albany International]

The positive that we're seeing there is on tissue. We're seeing an increase in tissue and some of our process belts that are being used there continue to be in favor. That's what we saw in the 1st quarter, the stabilization. We're taking a conservative outlook for the year in what's happening in China.

[Peter Arment, Analyst at Baird]

Thanks, Gunnar.

[Operator]

Again, if you would like to ask a question, press star and 1 on your telephone keypad. Thank you. I'm not showing any further questions in the queue. I will now turn it back over to Gunnar Kleveland for closing remarks.

[Gunnar Kleveland, President and CEO at Albany International]

All right. Thank you, Cath, and thank you everyone for joining us on the call today. We appreciate your continued interest in Albany. Thank you and have a good day.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Gunnar Kleveland, President and CEO
• Karen Blomquist, Director of Investor Relations
• Will Station, EVP and CFO

Analysts

• Peter Arment, Analyst at Baird