Albany International Corp., a global advanced textiles and materials processing company with core businesses in machine clothing and engineered composites, reported Q4 2013 income attributable to the Company of $8.7 million. These results were increased by a net reduction in restructuring costs of $2.1 million and income tax adjustments of $0.6 million, and were decreased by foreign currency revaluation losses of $1.6 million.

 

Fourth-Quarter Financial Highlights

-Net sales were $189.6 million, a decrease of 2.4 percent compared to Q4 2012.

 

-Adjusted EBITDA for Q4 2013 was $33.6 million, compared to $37.8 million in Q4 2012.

 

-In the fourth quarter, Safran S.A. obtained a 10 percent non controlling equity interest in Albany Safran Composites, LLC for $28 million.

 

-Q4 2013 income attributable to the Company (which excludes income allocated to the non controlling interest in ASC) was $0.27 per share. These results were increased by a credit to restructuring of $0.03 and net favorable income tax adjustments of $0.02, and were reduced by foreign currency revaluation losses of $0.03.

 

-Q4 2012 income attributable to the Company was $0.26 per share. These results included restructuring charges of $0.02, foreign currency revaluation losses of $0.08, and net unfavorable income tax adjustments of $0.01.

 

-Net debt at the end of Q4 was $81.8 million, a decline of $13.1 million for the quarter and $47.2 million for the full year.

 

“As for the 2014 outlook for AEC, we expect full-year sales to grow by roughly 10 percent, while full-year Adjusted EBITDA has the potential to nearly double. The most important performance milestone for the business will be on-time delivery of parts for LEAP engine tests.”

 

Q4 2012 income attributable to the Company was $8.2 million. These results included restructuring charges of $0.9 million, foreign currency revaluation losses of $4.0 million, and net unfavorable income tax adjustments of $0.1 million.

 

Q4 2013 gross profit was $72.4 million, or 38.2 percent of net sales, compared to $79.0 million, or 40.6 percent of net sales, in the same period of 2012. MC gross profit margin decreased from 45.0 percent in 2012 to 41.7 percent in 2013. The decrease in MC gross profit percentage was principally attributable to lower sales in North America.

 

Selling, technical, general, and research (STG&R) expenses were $54.6 million, or 28.8 percent of net sales, in the fourth quarter of 2013, including losses of $0.2 million related to the revaluation of nonfunctional-currency assets and liabilities. In Q4 2012, STG&R expenses were $58.4 million, or 30.0 percent of net sales, including losses of $1.2 million related to the revaluation of nonfunctional-currency assets and liabilities.

Q4 2013 Other expense, net, was $1.6 million, including losses related to the revaluation of nonfunctional-currency balances of $1.3 million. Q4 2012 Other expense, net, was $2.6 million, including losses of $2.8 million related to the revaluation of nonfunctional-currency balances.

 

The Company’s income tax rate, excluding tax adjustments, was 48.8 percent for Q4 2013, compared to 38.5 percent for the same period of 2012. The increase in the tax rate was primarily attributable to changes in the amount and distribution of income and loss among the countries in which the Company operates, including losses in Europe driven by significant restructuring charges during 2013. 

 

Q4 2013 income tax expense included a charge of $1.2 million for a change in the income tax rate, and a net benefit of $1.8 million for discrete tax adjustments. Q4 2012 income tax expense included an unfavorable adjustment of $1.2 million related to a change in the tax rate, and net favorable discrete income tax adjustments of $1.1 million.

 

Capital spending for equipment and software was $16.9 million for Q4 2013, resulting in a full-year total of $64.5 million, including $36.9 million for the Engineered Composites segment and its expansion associated with the LEAP program. Depreciation and amortization was $16.0 million for Q4 2013.