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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Delaware |
14-0462060 |
|
(State or other
jurisdiction of incorporation or organization) |
(IRS Employer
Identification No.) |
|
1373 Broadway, Albany, New York |
12204 |
|
(Address of
principal executive offices) |
(Zip
Code) |
Page No. |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Part
I |
Financial information |
|||||||||
Item
1. Financial Statements (unaudited) |
||||||||||
Consolidated statements of income three and nine months ended September 30, 2007 and 2006 |
1 |
|||||||||
Consolidated balance sheets September 30, 2007 and December 31, 2006 |
2 |
|||||||||
Consolidated statements of cash flows three and nine months ended September 30, 2007 and 2006 |
3 |
|||||||||
Notes to consolidated financial statements |
426 |
|||||||||
Item
2. Managements Discussion and Analysis of Financial Condition and Results of Operations |
2744 |
|||||||||
Item
3. Quantitative and Qualitative Disclosures about Market Risk |
45 |
|||||||||
Item
4. Controls and Procedures |
45 |
|||||||||
Part
II |
Other information |
|||||||||
Item
1. Legal Proceedings |
4648 |
|||||||||
Item
1A. Risk Factors |
49 |
|||||||||
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds |
49 |
|||||||||
Item
3. Defaults upon Senior Securities |
49 |
|||||||||
Item
4. Submission of Matters to a Vote of Security Holders |
49 |
|||||||||
Item
5. Other Information |
49 |
|||||||||
Item
6. Exhibits |
49 |
Three Months Ended September 30, |
Nine Months Ended 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 |
(unaudited) September 30, 2007 |
December 31, 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 |
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 | |||||||||
Excess 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 | |||||||||
Excess 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 |
|
|
|
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
September 30, 2007 |
|
December 31, 2006 |
||||||
Finished
goods |
$ | 123,315 | $ | 120,158 | ||||||
Work in
process |
69,561 | 59,738 | ||||||||
Raw material and supplies |
59,258 | 44,314 | ||||||||
Total inventories |
$ | 252,134 | $ | 224,210 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
Balance at December 31, 2006 |
|
Amortization |
|
Currency translation |
|
Other Changes |
|
Balance at September 30, 2007 |
||||||||||||
Amortized
intangible assets: |
||||||||||||||||||||||
Trade
names |
$ | 2,339 | ($377 | ) | $ | 16 | $ | 230 | $ | 2,208 | ||||||||||||
Patents |
2,450 | (276 | ) | 17 | | 2,191 | ||||||||||||||||
Customer
contracts |
4,202 | (555 | ) | | 3,310 | 6,957 | ||||||||||||||||
Technology |
352 | (24 | ) | | 70 | 398 | ||||||||||||||||
Total amortized intangible assets |
$ | 9,343 | ($1,232 | ) | $ | 33 | $ | 3,610 | $ | 11,754 | ||||||||||||
Unamortized intangible assets: |
||||||||||||||||||||||
Goodwill |
$ | 172,890 | | $ | 11,988 | $ | 4,681 | $ | 189,559 |
|
|
|
|||
---|---|---|---|---|---|
Year |
|
Annual amortization (in thousands) |
|||
2007 |
$2,200 | ||||
2008 |
2,500 | ||||
2009 |
2,300 | ||||
2010 |
1,900 | ||||
2011 |
900 | ||||
$9,800 |
|
|
|
|
|
|
|
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
||||||||||
Currency
transactions |
$ | 104 | $ | 344 | ($589 | ) | ($1,939 | ) | ||||||||||
Debt
costs |
537 | 552 | 1,436 | 1,480 | ||||||||||||||
Securitization
program |
| 573 | | 2,254 | ||||||||||||||
Other miscellaneous expense |
1,199 | 700 | 2,014 | 1,146 | ||||||||||||||
Total |
$ | 1,840 | $ | 2,169 | $ | 2,861 | $ | 2,941 |
|
|
|
|
|
|
|
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||
(in thousands, except market price data) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
||||||||||
Net (loss)/income available to common shareholders |
($3,871 | ) | $ | 14,328 | $ | 9,839 | $ | 51,830 | ||||||||||
Weighted
average number of shares: |
||||||||||||||||||
Weighted
average number of shares used in calculating basic (losses)/earnings per share |
29,492 | 29,103 | 29,380 | 30,017 | ||||||||||||||
Effect of
dilutive stock-based compensation plans: |
||||||||||||||||||
Stock
options |
| 442 | 389 | 473 | ||||||||||||||
Long-term incentive plan |
| 49 | 21 | 49 | ||||||||||||||
Weighted average number of shares used in calculating diluted (losses)/earnings per share |
29,492 | 29,594 | 29,790 | 30,539 | ||||||||||||||
Effect of stock-based compensation plans that were not included in the computation of diluted earnings per share because
to do so would have been antidilutive |
398 | | | | ||||||||||||||
Average market price of common stock used for calculation of dilutive shares |
$ | 39.11 | $ | 35.70 | $ | 37.16 | $ | 37.48 | ||||||||||
(Losses)/earnings per share: |
||||||||||||||||||
Basic |
($0.13 | ) | $ | 0.49 | $ | 0.33 | $ | 1.73 | ||||||||||
Diluted |
($0.13 | ) | $ | 0.48 | $ | 0.33 | $ | 1.70 |
|
|
|
|
|
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Class A Shares |
|
Class B Shares |
|
Less: Class A Treasury shares |
|
Net shares Outstanding |
|||||||||||
December 31,
2006 |
34,518,870 | 3,236,098 | (8,540,882 | ) | 29,214,086 | |||||||||||||
March 31,
2007 |
34,633,542 | 3,236,098 | (8,540,882 | ) | 29,328,758 | |||||||||||||
June 30,
2007 |
34,750,275 | 3,236,098 | (8,530,066 | ) | 29,456,307 | |||||||||||||
September 30, 2007 |
34,819,384 | 3,236,098 | (8,530,066 | ) | 29,525,416 |
|
|
|
|
|
|
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|||||||||||
Net (loss)/income |
($3,871 | ) | $ | 14,328 | $ | 9,839 | $ | 51,830 | |||||||||||
Other
comprehensive income: |
|||||||||||||||||||
Foreign
currency translation adjustments |
27,425 | 7,462 | 45,292 | 36,198 | |||||||||||||||
Amortization of pension liability adjustment, after tax |
(497 | ) | | (1,491 | ) | | |||||||||||||
Other comprehensive income, net of tax |
26,928 | 7,462 | 43,801 | 36,198 | |||||||||||||||
Comprehensive income |
$ | 23,057 | $ | 21,790 | $ | 53,640 | $ | 88,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
Class A Common Stock |
|
Class B Common Stock |
|
Additional paid in capital |
|
Retained earnings |
|
Accumulated items of other comprehensive income |
|
Treasury stock |
|
Total Shareholders Equity |
||||||||||||||||
December 31,
2006 |
$ | 35 | $ | 3 | $ | 316,164 | $ | 541,602 | ($99,419 | ) | ($259,260 | ) | $ | 499,125 | ||||||||||||||||
Net
income |
9,839 | 9,839 | ||||||||||||||||||||||||||||
Shares
contributed to ESOP |
4,065 | 4,065 | ||||||||||||||||||||||||||||
Proceeds from
options exercised |
2,958 | 2,958 | ||||||||||||||||||||||||||||
Dividends
declared |
(9,413 | ) | (9,413 | ) | ||||||||||||||||||||||||||
Stock option
expense |
602 | 602 | ||||||||||||||||||||||||||||
Tax benefit of
options exercised |
1,088 | 1,088 | ||||||||||||||||||||||||||||
Issuance of
shares under long-term incentive plan |
937 | 937 | ||||||||||||||||||||||||||||
Cumulative
change in liability for unrecognized tax benefits |
(2,491 | ) | (2,491 | ) | ||||||||||||||||||||||||||
Amortization of
pension liability adjustment |
(1,491 | ) | (1,491 | ) | ||||||||||||||||||||||||||
Cumulative translation adjustment/other |
162 | 2 | 45,292 | 237 | 45,693 | |||||||||||||||||||||||||
September 30, 2007 |
$ | 35 | $ | 3 | $ | 325,976 | $ | 539,539 | ($55,618 | ) | ($259,023 | ) | $ | 550,912 |
|
|
|
|
|
|
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|||||||||||
Net
Sales |
|||||||||||||||||||
Paper Machine
Clothing |
$ | 193,377 | $ | 178,209 | $ | 564,348 | $ | 556,568 | |||||||||||
Applied
Technologies |
45,512 | 35,240 | 131,729 | 110,847 | |||||||||||||||
Albany Door Systems |
37,363 | 29,389 | 105,182 | 88,276 | |||||||||||||||
Consolidated total |
$ | 276,252 | $ | 242,838 | $ | 801,259 | $ | 755,691 | |||||||||||
Operating
Income |
|||||||||||||||||||
Paper Machine
Clothing |
$ | 17,324 | $ | 29,030 | $ | 68,134 | $ | 106,532 | |||||||||||
Applied
Technologies |
3,702 | 3,648 | 12,640 | 13,903 | |||||||||||||||
Albany Door
Systems |
(99 | ) | 1,054 | (556 | ) | 3,518 | |||||||||||||
Research
expense |
(5,896 | ) | (4,841 | ) | (16,610 | ) | (16,405 | ) | |||||||||||
Unallocated expenses |
(12,821 | ) | (9,207 | ) | (38,437 | ) | (29,505 | ) | |||||||||||
Operating
income before reconciling items |
2,210 | 19,684 | 25,171 | 78,043 | |||||||||||||||
Reconciling
items: |
|||||||||||||||||||
Interest
expense, net |
(3,861 | ) | (1,738 | ) | (10,873 | ) | (6,329 | ) | |||||||||||
Other (expense), net |
(1,840 | ) | (2,169 | ) | (2,861 | ) | (2,941 | ) | |||||||||||
Consolidated (loss)/income before income taxes |
($3,491 | ) | $ | 15,777 | $ | 11,437 | $ | 68,773 |
|
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|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, 2007 |
Three Months Ended September 30, 2006 |
||||||||||||||||||||||
Operating income effect of: | |||||||||||||||||||||||
(in thousands) |
|
Restructuring and other |
|
Idle capacity costs at plants closing |
|
Performance improvement initiatives |
|
Total |
|
Restructuring and other |
|||||||||||||
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 |
(308 | ) | | | (308 | ) | | ||||||||||||||||
Unallocated |
| | (1,798 | ) | (1,798 | ) | (1,074 | ) | |||||||||||||||
Consolidated
total |
($13,512 | ) | ($2,331 | ) | ($6,525 | ) | ($22,368 | ) | ($4,096 | ) |
|
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|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nine Months Ended September 30, 2007 |
Nine Months Ended September 30, 2006 |
||||||||||||||||||||||
Operating income effect of: | |||||||||||||||||||||||
(in thousands) |
|
Restructuring and other |
|
Idle capacity costs at plants closing |
|
Performance improvement initiatives |
|
Total |
|
Restructuring and other |
|||||||||||||
Paper Machine
Clothing |
($23,091 | ) | ($2,331 | ) | ($5,768 | ) | ($31,190 | ) | ($3,022 | ) | |||||||||||||
Applied
Technologies |
| | (452 | ) | (452 | ) | | ||||||||||||||||
Albany Door
Systems |
(2,224 | ) | | (1,085 | ) | (3,309 | ) | | |||||||||||||||
Research |
(308 | ) | | | (308 | ) | | ||||||||||||||||
Unallocated |
(2,610 | ) | | (5,894 | ) | (8,504 | ) | (1,074 | ) | ||||||||||||||
Consolidated total |
($28,233 | ) | ($2,331 | ) | ($13,199 | ) | ($43,763 | ) | ($4,096 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, 2006 |
Nine Months Ended September 30, 2006 |
|||||||||||||||||||||||||
(in thousands) |
|
As orginally Reported |
|
Reclassification |
|
As Adjusted |
|
As orginally Reported |
|
Reclassification |
|
As Adjusted |
||||||||||||||
Operating
income |
||||||||||||||||||||||||||
Paper Machine
Clothing |
$ | 30,139 | ($1,109 | ) | $ | 29,030 | $ | 110,927 | ($4,395 | ) | $ | 106,532 | ||||||||||||||
Applied
Technologies |
4,178 | (530 | ) | 3,648 | 15,433 | (1,530 | ) | 13,903 | ||||||||||||||||||
Albany Door
Systems |
1,549 | (495 | ) | 1,054 | 5,048 | (1,530 | ) | 3,518 | ||||||||||||||||||
Research
expense |
(7,333 | ) | 2,492 | (4,841 | ) | (23,869 | ) | 7,464 | (16,405 | ) | ||||||||||||||||
Unallocated expenses |
(8,849 | ) | (358 | ) | (9,207 | ) | (29,496 | ) | (9 | ) | (29,505 | ) | ||||||||||||||
Consolidated total |
$ | 19,684 | $ | | $ | 19,684 | $ | 78,043 | $ | | $ | 78,043 |
|
|
|
|
|
|
|
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pension Plans | Other Benefits | |||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
||||||||||
Service
cost |
$ | 1,773 | $ | 1,761 | $ | 641 | $ | 654 | ||||||||||
Interest
cost |
5,334 | 4,471 | 1,540 | 1,459 | ||||||||||||||
Expected return
on plan assets |
(5,513 | ) | (4,405 | ) | | | ||||||||||||
Amortization: |
||||||||||||||||||
Transition
obligation |
8 | 27 | | | ||||||||||||||
Prior service
cost/(credit) |
209 | 237 | (1,052 | ) | (1,138 | ) | ||||||||||||
Net actuarial
loss |
1,108 | 1,361 | 891 | 1,092 | ||||||||||||||
Net periodic benefit costs |
$ | 2,919 | $ | 3,452 | $ | 2,020 | $ | 2,067 |
|
|
|
|
|
|
|
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pension Plans | Other Benefits | |||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
||||||||||
Service
cost |
$ | 5,569 | $ | 5,283 | $ | 1,923 | $ | 1,962 | ||||||||||
Interest
cost |
15,872 | 13,413 | 4,620 | 4,378 | ||||||||||||||
Expected return
on plan assets |
(16,293 | ) | (13,215 | ) | | | ||||||||||||
Amortization: |
||||||||||||||||||
Transition
obligation |
24 | 81 | | | ||||||||||||||
Prior service
cost/(credit) |
661 | 711 | (3,156 | ) | (3,414 | ) | ||||||||||||
Net actuarial
loss |
3,838 | 4,083 | 2,673 | 3,275 | ||||||||||||||
Net periodic benefit costs |
$ | 9,671 | $ | 10,356 | $ | 6,060 | $ | 6,201 |
|
|
|
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
September 30, 2007 |
|
December 31, 2006 |
||||||
Convertible
notes issued in March 2006 with fixed interest rates of 2.25%, due in year 2026. |
$ | 180,000 | $ | 180,000 | ||||||
Private
placement with a fixed interest rate of 5.34%, due in years 2013 through 2017. |
150,000 | 150,000 | ||||||||
April 2006
credit agreement with borrowings outstanding at an average interest rate of 6.15% in 2007 and 5.82% in 2006. |
81,000 | 23,000 | ||||||||
Various notes
and mortgages relative to operations principally outside the United States, at an average rate of 5.59% in 2007 and 5.81% in 2006 due in varying
amounts through 2021. |
1,127 | 1,822 | ||||||||
Industrial revenue financings at an average interest rate of 1.75% in 2007 and 7.06% in 2006, due in varying amounts
through 2009. |
658 | 10,932 | ||||||||
Long term
debt |
412,785 | 365,754 | ||||||||
Less: current portion |
(1,225 | ) | (11,167 | ) | ||||||
Long term debt, net of current portion |
$ | 411,560 | $ | 354,587 |
|
|
|
|
|
|
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
Total restructuring costs incurred |
|
Termination and other costs |
|
Plant and equipment writedowns |
||||||||
Paper Machine
Clothing |
$ | 23,396 | $ | 19,827 | $ | 3,569 | ||||||||
Albany Door
Systems |
2,227 | 2,227 | | |||||||||||
Corporate Headquarters |
2,610 | 2,610 | | |||||||||||
Total |
$ | 28,233 | $ | 24,664 | $ | 3,569 |
|
|
|
|
|
|
|
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
Restructuring charges accrued |
|
Payments |
|
Currency translation/other |
|
September 30, 2007 |
||||||||||
Termination
costs |
$ | 21,147 | ($5,855 | ) | ($483 | ) | $ | 14,809 | ||||||||||
Other restructuring costs |
3,517 | (2,549 | ) | (45 | ) | 923 | ||||||||||||
Total |
$ | 24,664 | ($8,404 | ) | ($528 | ) | $ | 15,732 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three months ended September 30, |
||||||||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
Percent change |
|
Increase due to changes in currency translation rates |
|
Percent change Excluding currency rate effect |
||||||||||||
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 | % | |||||||||||||||
Consolidated total |
$ | 276,252 | $ | 242,838 | 13.8 | % | $ | 10,593 | 9.4 | % |
|
|
|
|
|
|
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
Total restructuring costs incurred |
|
Termination and other costs |
|
Plant and equipment writedowns |
||||||||
Paper Machine
Clothing |
$ | 23,396 | $ | 19,827 | $ | 3,569 | ||||||||
Albany Door
Systems |
2,227 | 2,227 | | |||||||||||
Corporate Headquarters |
2,610 | 2,610 | | |||||||||||
Total |
$ | 28,233 | $ | 24,664 | $ | 3,569 |
|
|
|
|
|
|
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|||||||||||
Operating
Income |
|||||||||||||||||||
Paper Machine
Clothing |
$ | 17,324 | $ | 29,030 | $ | 68,134 | $ | 106,532 | |||||||||||
Applied
Technologies |
3,702 | 3,648 | 12,640 | 13,903 | |||||||||||||||
Albany Door
Systems |
(99 | ) | 1,054 | (556 | ) | 3,518 | |||||||||||||
Research
expense |
(5,896 | ) | (4,841 | ) | (16,610 | ) | (16,405 | ) | |||||||||||
Unallocated expenses |
(12,821 | ) | (9,207 | ) | (38,437 | ) | (29,505 | ) | |||||||||||
Operating
income before reconciling items |
2,210 | 19,684 | 25,171 | 78,043 | |||||||||||||||
Reconciling
items: |
|||||||||||||||||||
Interest
expense, net |
(3,861 | ) | (1,738 | ) | (10,873 | ) | (6,329 | ) | |||||||||||
Other (expense)/income, net |
(1,840 | ) | (2,169 | ) | (2,861 | ) | (2,941 | ) | |||||||||||
Consolidated (loss)/income before income taxes |
($3,491 | ) | $ | 15,777 | $ | 11,437 | $ | 68,773 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, 2007 |
Three Months Ended September 30, 2006 |
||||||||||||||||||||||
Operating income effect of: | |||||||||||||||||||||||
(in thousands) |
|
Restructuring and other |
|
Idle capacity costs at plants closing |
|
Performance improvement initiatives |
|
Total |
|
Restructuring and other |
|||||||||||||
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 |
(308 | ) | | | (308 | ) | | ||||||||||||||||
Unallocated |
| | (1,798 | ) | (1,798 | ) | (1,074 | ) | |||||||||||||||
Consolidated total |
($13,512 | ) | ($2,331 | ) | ($6,525 | ) | ($22,368 | ) | ($4,096 | ) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nine Months Ended September 30, 2007 |
Nine Months Ended September 30, 2006 |
||||||||||||||||||||||
Operating income effect of: | |||||||||||||||||||||||
(in thousands) |
|
Restructuring and other |
|
Idle capacity costs at plants closing |
|
Performance improvement initiatives |
|
Total |
|
Restructuring and other |
|||||||||||||
Paper Machine
Clothing |
($23,091 | ) | ($2,331 | ) | ($5,768 | ) | ($31,190 | ) | ($3,022 | ) | |||||||||||||
Applied
Technologies |
| | (452 | ) | (452 | ) | | ||||||||||||||||
Albany Door
Systems |
(2,224 | ) | | (1,085 | ) | (3,309 | ) | | |||||||||||||||
Research |
(308 | ) | | | (308 | ) | | ||||||||||||||||
Unallocated |
(2,610 | ) | | (5,894 | ) | (8,504 | ) | (1,074 | ) | ||||||||||||||
Consolidated total |
($28,233 | ) | ($2,331 | ) | ($13,199 | ) | ($43,763 | ) | ($4,096 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended September 30, 2006 |
Nine Months Ended September 30, 2006 |
||||||||||||||||||||||||||
(in thousands) |
|
As orginally Reported |
|
Reclassification |
|
As Adjusted |
|
As orginally Reported |
|
Reclassification |
|
As Adjusted |
|||||||||||||||
Operating
income |
|||||||||||||||||||||||||||
Paper Machine
Clothing |
$ | 30,139 | ($1,109 | ) | $ | 29,030 | $ | 110,927 | ($4,395 | ) | $ | 106,532 | |||||||||||||||
Applied
Technologies |
4,178 | (530 | ) | 3,648 | 15,433 | (1,530 | ) | 13,903 | |||||||||||||||||||
Albany Door
Systems |
1,549 | (495 | ) | 1,054 | 5,048 | (1,530 | ) | 3,518 | |||||||||||||||||||
Research
expense |
(7,333 | ) | 2,492 | (4,841 | ) | (23,869 | ) | 7,464 | (16,405 | ) | |||||||||||||||||
Unallocated expenses |
(8,849 | ) | (358 | ) | (9,207 | ) | (29,496 | ) | (9 | ) | (29,505 | ) | |||||||||||||||
Consolidated total |
$ | 19,684 | $ | | $ | 19,684 | $ | 78,043 | $ | | $ | 78,043 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nine months ended September 30, |
||||||||||||||||||||||
(in thousands) |
|
2007 |
|
2006 |
|
Percent change |
|
Increase due to changes in currency translation rates |
|
Percent change Excluding currency rate effect |
||||||||||||
Paper Machine
Clothing |
$ | 564,348 | $ | 556,568 | 1.4 | % | $ | 16,598 | 1.6 | % | ||||||||||||
Applied
Technologies |
131,729 | 110,847 | 18.8 | % | 5,029 | 14.3 | % | |||||||||||||||
Albany Door Systems |
105,182 | 88,276 | 19.2 | % | 6,740 | 11.5 | % | |||||||||||||||
Consolidated total |
$ | 801,259 | $ | 755,691 | 6.0 | % | $ | 28,367 | 2.3 | % |
(a) |
Disclosure controls and procedures. |
(b) |
Changes in internal control over financial reporting. |
$152,499. Brandons insurance carriers initially agreed to pay 88.2% of the total indemnification and defense costs related to these proceedings, subject to the standard reservation of rights. The remaining 11.8% of the costs had been borne directly by Brandon. During 2004, Brandons insurance carriers agreed to cover 100% of indemnification and defense costs, subject to policy limits and the standard reservation of rights, and to reimburse Brandon for all indemnity and defense costs paid directly by Brandon related to these proceedings.
Item 3. |
Defaults Upon Senior Securities None |
Item 4. |
Submission of Matters to a Vote of Security
Holders None |
Item 5. |
Other Information None |
Exhibit No. | Description | |||
---|---|---|---|---|
31.1 |
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act. |
|||
31.2 |
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act. |
|||
32.1 |
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,
United States Code) |
|||
99.1 |
Quantitative and qualitative disclosures about market risks as reported at December 31, 2006. |
By |
/s/ Michael C. Nahl Michael C. Nahl Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
1. |
I have reviewed this quarterly report on Form 10-Q of Albany International Corp.; |
2. |
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
3. |
Based upon my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
4. |
The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting, and |
5. |
The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors: |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial data and |
b) |
Any fraud, whether or not material, that involves management or other employees who have significant role in the registrants internal control over financial reporting. |
By |
/s/ Joseph G. Morone Joseph G. Morone President and Chief Executive Officer (Principal Executive Officer) |
1. |
I have reviewed this quarterly report on Form 10-Q of Albany International Corp.; |
2. |
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
3. |
Based upon my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
4. |
The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting, and |
5. |
The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors: |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial data and |
b) |
Any fraud, whether or not material, that involves management or other employees who have significant role in the registrants internal control over financial reporting. |
By |
/s/ Michael C. Nahl Michael C. Nahl Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By |
/s/ Joseph G. Morone Joseph G. Morone President and Chief Executive Officer (Principal Executive Officer) |
By |
/s/ Michael C. Nahl Michael C. Nahl Executive Vice President and Chief Financial Officer (Principal Financial Officer) |