-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MjhfNPuKVknL37g19E8ztrN+FZFqU2nwOrdi+1ABlzfcsRSoede7fcwg9nL+W5KW Z/EG8fN2VzjI9502V5aZ3A== 0001275287-05-000292.txt : 20050128 0001275287-05-000292.hdr.sgml : 20050128 20050128071429 ACCESSION NUMBER: 0001275287-05-000292 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050127 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050128 DATE AS OF CHANGE: 20050128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBANY INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000819793 STANDARD INDUSTRIAL CLASSIFICATION: BROADWOVEN FABRIC MILS, MAN MADE FIBER & SILK [2221] IRS NUMBER: 140462060 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10026 FILM NUMBER: 05555599 BUSINESS ADDRESS: STREET 1: 1373 BROADWAY CITY: ALBANY STATE: NY ZIP: 12204 BUSINESS PHONE: 5184452200 MAIL ADDRESS: STREET 1: 1373 BROADWAY CITY: ALBANY STATE: NY ZIP: 12204 FORMER COMPANY: FORMER CONFORMED NAME: ALBINT INC DATE OF NAME CHANGE: 19870924 8-K 1 ai1919.txt ================================================================================ 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) January 27, 2005 ALBANY INTERNATIONAL CORP. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 0-16214 14-0462060 ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 1373 Broadway, Albany, New York 12204 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (518) 445-2200 None -------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On January 27, 2005, Albany International issued a news release announcing 2004 fourth quarter and full year financial results. A copy of the news release is furnished as Exhibit 99.1 to this report. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not applicable (b) Not applicable (c) Exhibits. The following exhibit is being furnished herewith: 99.1 News release dated January 27, 2005 announcing 2004 fourth quarter and full year financial results. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALBANY INTERNATIONAL CORP. By: /s/ Michael C. Nahl ----------------------------------- Name: Michael C. Nahl Title: Senior Vice President and Chief Financial Officer (Principal Financial Officer) Date: January 27, 2005 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------------------------------------------------------------- 99.1 Registrant's news release dated January 27, 2005 announcing 2004 fourth quarter and full year financial results. EX-99.1 2 ai1919ex991.txt Exhibit 99.1 Albany International Reports Fourth-Quarter and Full-Year Financial Results Highlights * Net income per share was $0.38, compared to $0.32 for the fourth quarter of 2003. Restructuring charges reduced net income per share by $0.20 during the quarter and by $0.12 during the same period in 2003. Additionally, net income for the fourth quarter of 2004 was favorably affected by income tax adjustments that had the effect of increasing net income by $0.08 per share. No comparable adjustments were recorded in the fourth quarter of 2003. * Net income per share for the full year was $0.32, compared to $1.64 in 2003. Restructuring charges reduced net income per share by $1.16 in 2004 and $0.46 in 2003. * Net sales were $238.4 million, an increase of 3.1 percent compared to the fourth quarter of 2003. Net sales decreased 1.8 percent excluding the effect of changes in currency translation rates. * Operating income was $15.5 million in the quarter, compared to $18.1 million during the same period in 2003. Restructuring charges reduced operating income by $8.8 million during the quarter and $5.8 million during the same period in 2003. * Net cash provided by operating activities during the quarter was $25.6 million, after $15.6 million of payments for restructuring expenses. * The Company purchased 500,000 shares of its Class A Common Stock during the quarter. ALBANY, N.Y., Jan. 27 /PRNewswire-FirstCall/ -- Albany International Corp. (NYSE/PCX/FWB:AIN) reported fourth-quarter net income of $0.38 per share, compared to net income of $0.32 per share for the same period last year. Restructuring charges reduced net income by $0.20 per share during the quarter and by $0.12 per share during the same period in 2003. Net sales increased $7.1 million, or 3.1 percent, compared to the same period of 2003. Excluding the effect of changes in currency translation rates, net sales decreased 1.8 percent. Following is a table of net sales by segment and the effect of changes in currency translation rates:
Net sales as reported Increase in Three months fourth-quarter Percent Change ended 2004 net sales ----------------------- December 31, due to changes Excluding ----------------------- in currency As Currency (in thousands) 2004 2003 translation rates Reported Rate Effect - -------------------- ---------- ---------- ------------------ ---------- ----------- Engineered Fabrics $ 189,598 $ 185,529 $ 8,542 2.2 % -2.4 % Albany Door Systems 33,202 30,645 2,400 8.3 % 0.5 % Applied Technologies 15,639 15,160 362 3.2 % 0.8 % Total $ 238,439 $ 231,334 $ 11,304 3.1 % -1.8 %
Gross profit was 39.8 percent of net sales in the fourth quarter of 2004, compared to 39.3 percent in the fourth quarter of 2003. The improvement is due principally to benefits resulting from cost reduction initiatives. Selling, technical, general, and research expenses increased 5.2 percent compared to the fourth quarter of 2003. These expenses increased 0.5 percent excluding the effect of changes in currency translation rates. Fourth-quarter operating income was $15.5 million in 2004, compared to $18.1 million in 2003. Fourth-quarter operating income was reduced by restructuring charges of $8.8 million in 2004, and $5.8 million in 2003. Other expense, net, was expense of $3.4 million for the fourth quarter of 2004, compared to income of $0.6 million for the same period of 2003. In comparison to the fourth quarter of 2003, the difference had the effect of reducing net income by $0.09 per share. The difference is due principally to currency hedging activities and the remeasurement of short-term intercompany balances at operations that held amounts denominated in currencies other than their local currency. During the fourth quarter, the Company successfully resolved tax contingencies in several countries, resulting in an income tax benefit of $0.12 per share. The Company also recorded a tax valuation allowance of $0.04 per share related to net operating losses generated by restructuring activities. The net effect of these discrete tax events reduced the Company's tax expense by $0.08 per share. Full-year net sales were 3.6 percent higher than 2003. Excluding the effect of changes in currency translation rates, net sales were down 1.4 percent. Following is a table of full-year net sales by segment and the effect of changes in currency translation rates:
Net sales as reported Increase in Percent Change Years ended 2004 net sales ----------------------- December 31, due to changes Excluding ----------------------- in currency As Currency (in thousands) 2004 2003 translation rates reported rate effect - -------------------- ---------- ---------- ------------------ ---------- ----------- Engineered Fabrics $ 740,824 $ 733,316 $ 33,149 1.0% -3.5% Albany Door Systems 112,773 101,331 8,498 11.3% 2.9% Applied Technologies 66,205 53,296 3,022 24.2% 18.6% Total $ 919,802 $ 887,943 $ 44,669 3.6% -1.4%
For the full year, gross profit as a percentage of net sales was 39.4 percent in 2004, compared to 40.7 percent in 2003. The decrease is due principally to lower Engineered Fabrics net sales excluding the effect of changes in currency translation rates. Other expense, net, was expense of $13.5 million for the full year, compared to $0.7 million for 2003. In comparison to 2003, the difference had the effect of reducing net income by $0.28 per share. The difference is due principally to an impairment loss of $4.0 million recorded in the first quarter of 2004, currency hedging activities, and the remeasurement of short-term intercompany balances at operations that held amounts denominated in currencies other than their local currency. For the full year, net income per share was $0.32 in 2004, after restructuring charges of $1.16. In 2003, net income was $1.64 per share, after restructuring charges of $0.46. Income tax adjustments in 2004 included a charge of $0.21 per share for valuation allowances related to restructuring activities, which was partially offset by reductions to income tax expense of $0.14 per share relating to the favorable resolution of income tax contingencies. The net effect of these discrete tax events reduced the Company's full-year earnings per share $0.07 in 2004. In 2003, discrete tax events increased net income per share $0.16. The fourth-quarter 2004 tax rate includes an adjustment reducing the full-year tax rate to 19.9 percent. The tax rate for the full year 2003 was 22.5 percent. We anticipate that the tax rate for 2005 before discrete items will not exceed 30 percent. Liquidity and Capital Resources Net cash provided by operating activities was $25.6 million for the fourth quarter of 2004, compared to $39.5 million for the same period of 2003. Cash payments related to restructuring expenses were $15.6 million in the fourth quarter of 2004, compared to $3.0 million in the fourth quarter of 2003. Cash required in 2005 for restructuring liabilities and equipment relocations is expected to be approximately $13 million, which includes approximately $4 million that will be recorded as operating expense in 2005. During the fourth quarter of 2004, inventories decreased $3.4 million and accounts receivable decreased $6.1 million, excluding the effect of changes in currency translation rates. Capital spending during the quarter was $15.8 million and $57.1 million for the full year. Capital spending in 2005 is expected to be approximately $45 million, compared to estimated full-year depreciation of $52 million and amortization of $4 million. During the quarter, the Company purchased 500,000 shares of its Class A Common Stock at a cost of $15.0 million. For the full year, the Company purchased 2,819,943 of its shares-which equates to 8.4 percent of the shares outstanding at December 31, 2003-at a cost of $81.1 million. During the year, the Company issued 633,763 of its shares for the exercise of stock options and contributions to the Company's United States 401(k) savings plan. Shares outstanding at December 31, 2004 were 31,409,196. The Company remains authorized to purchase an additional 1,053,100 shares without further notice. Comments on Operations Chairman and Chief Executive Officer Frank Schmeler commented, "2004 was a significant year for our Company. We concluded the restructuring program announced in January 2003, which reduced costs by more than $40 million. In addition to the closure of manufacturing facilities in Europe and North America during the year, we made substantial investments in plant and equipment for efficiency and future growth. Matching our capacity to the changing demand of the global paper and board industries, while a difficult challenge, has made the Company stronger and well-positioned to meet the needs of our customers. "In 2004, global paper and paperboard manufacturers continued to produce more tons of product with fewer units of paper machine clothing (PMC), a trend we reported earlier in the year. Several factors contributed to this trend including enhanced PMC product performance that creates additional value for our customers, more efficient paper machine operation as a result of industry consolidation and rationalization, and the practice by some paper manufacturers to run PMC products longer. Since the rate of paper industry consolidation and rationalization appears to have slowed, the Company expects the negative impact of this effect on PMC demand in future periods to decrease." Engineered Fabrics (This segment includes paper machine clothing and process belts (PMC) used in the manufacture of paper and paperboard products, and engineered products for the nonwovens and pulp industries.) Fourth-quarter net sales for the Engineered Fabrics segment increased 2.2 percent compared to the same period of 2003. Excluding the effect of changes in currency translation rates, net sales decreased 2.4 percent compared to the fourth quarter of 2003. Full-year net sales increased 1.0 percent and decreased 3.5 percent excluding the effect of changes in currency translation rates. Net sales in 2004 were affected by weak PMC demand due to extended fabric life, customer efforts to reduce overall PMC inventory, and the loss of some business due to price. The impact of completed restructuring initiatives, as well as the efficiency gains from the substantial investments in plant and equipment, contributed to improving gross margins in the third and fourth quarters of 2004. Albany Door Systems (This segment includes sales and service of High Performance Doors and aftermarket sales to a wide variety of industrial customers.) Fourth-quarter net sales increased 8.3 percent compared to the fourth quarter of 2003 and 0.5 percent excluding the effect of changes in currency translation rates. Full-year net sales increased 11.3 percent and 2.9 percent excluding the effect of changes in currency translation rates. Results for the full year were positively affected by efficiency improvements, new product development, and increases in aftermarket and service revenues, even though customers' capital spending for high-performance door products did not improve in major markets. 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); and industrial insulation products (High Performance Materials).) Fourth-quarter net sales in this segment increased 3.2 percent compared to the same period in 2003 and 0.8 percent excluding the effect of changes in currency translation rates. Full-year net sales increased 24.2 percent and 18.6 percent excluding the effect of changes in currency translation rates. Filtration products for power generation plants, principally in Australia, and gains in tannery and textile markets in Asia and Latin America provided a large portion of the 2004 improvement in this segment. In addition, results at Techniweave were positively affected by new business in structured components. Looking Ahead Mr. Schmeler continued, "We are optimistic about expectations for global paper and paperboard markets in 2005 and their effect on our financial results for the year. Current operating rates remain high, especially in paperboard, and demand for most paperboard grades and selected paper grades is expected to hold through the first half of 2005. The Albany Door Systems segment should continue to grow in 2005 due to new products and the expansion of aftermarket sales and service. The Applied Technologies segment should benefit from new power generation plants, which will come onstream in 2005, improvements in tannery and textile markets in Asia and Latin America, and the growth of wet filtration products. "Increased operating expenses resulting from higher energy prices will have an impact on our operations in 2005. Our primary raw material for PMC is petroleum-based, and we anticipate that higher petroleum prices will increase raw material costs by approximately $12 million in 2005. "Our restructuring activities are complete, and in 2005 we will focus on growth. We believe that customers will place their business with suppliers that offer them the greatest value, and the Albany Value Concept supports this belief. It directs our efforts in the marketplace in the form of new and improved products and superior process support for our customers. At the same time, it focuses our employees on product quality and consistency and the pursuit of process and efficiency improvements in all areas of our businesses. The Albany Value Concept should continue to provide substantial benefits for our customers and improved returns for our shareholders." The Company plans a live webcast to discuss fourth-quarter and full-year 2004 earnings tomorrow 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 and sales worldwide. 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 sales and sales growth, market share, earnings, profitability, cash flows, pricing, markets, cost reductions, raw material costs, new products and process improvements, paper industry consolidation and 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 2003 Annual Report to Shareholders and subsequent filings with the Securities and Exchange Commission. ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (in thousands except per share data)
Three Months Ended Years Ended December 31, December 31, ------------------------- ----------------------- (unaudited) (unaudited) (unaudited) 2004 2003 2004 2003 ----------- ----------- ----------- --------- $ 238,439 $ 231,334 Net sales $ 919,802 $ 887,943 143,542 140,422 Cost of goods sold 557,742 526,757 94,897 90,912 Gross profit 362,060 361,186 70,552 67,047 Selling, technical, general 267,498 253,821 and research expenses 8,814 5,752 Restructuring, net 54,058 21,751 15,531 18,113 Operating income 40,504 85,614 3,563 3,758 Interest expense, net 14,636 15,074 3,359 (570) Other expense/(income), net 13,539 662 8,609 14,925 Income before income taxes 12,329 69,878 (3,303) 4,477 Income tax (benefit)/expense 2,450 15,720 11,912 10,448 Income before associated 9,879 54,158 companies 131 88 Equity in earnings/(losses) 506 (103) of associated companies 12,043 10,536 Net income 10,385 54,055 424,525 425,217 Retained earnings, 433,407 387,609 beginning of period (2,511) (2,346) Dividends declared (9,735) (8,257) $ 434,057 $ 433,407 Retained earnings, end of $ 434,057 $ 433,407 period Earnings per share - basic: $ 0.38 $ 0.32 Net income $ 0.32 $ 1.64 Earnings per share - diluted: $ 0.38 $ 0.31 Net income $ 0.31 $ 1.61 31,467 33,437 Average number of shares 32,575 32,889 used in basic earnings per share computations 32,066 34,168 Average number of shares 33,174 33,511 used in diluted earnings per share computations $ 0.08 $ 0.07 Dividends per share $ 0.30 $ 0.25
ALBANY INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) December 31, December 31, 2004 2003 ------------ ------------ ASSETS Cash and cash equivalents $ 58,982 $ 78,822 Accounts receivable, net 144,950 151,157 Note receivable 18,955 21,814 Inventories: Finished goods 96,061 93,787 Work in process 57,470 53,936 Raw material and supplies 31,999 29,805 185,530 177,528 Deferred taxes 26,526 33,314 Prepaid expenses 8,867 8,067 Total current assets 443,810 470,702 Property, plant and equipment, net 378,170 370,280 Investments in associated companies 6,456 5,278 Intangibles 14,207 15,790 Goodwill 171,622 159,543 Deferred taxes 87,848 63,657 Cash surrender value of life insurance policies 34,583 32,399 Other assets 19,064 21,274 Total assets $ 1,155,760 $ 1,138,923 LIABILITIES AND SHAREHOLDERS' EQUITY Notes and loans payable $ 14,617 $ 5,250 Accounts payable 43,378 35,080 Accrued liabilities 120,263 122,550 Current maturities of long-term debt 1,340 1,949 Income taxes payable and deferred 29,620 13,682 Total current liabilities 209,218 178,511 Long-term debt 213,615 214,894 Other noncurrent liabilities 147,268 153,811 Deferred taxes and other credits 34,882 37,052 Total liabilities 604,983 584,268 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 33,176,872 in 2004 and 32,548,938 in 2003 33 33 Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 3,236,476 in 2004 and 3,236,476 in 2003 3 3 Additional paid in capital 296,045 280,734 Retained earnings 434,057 433,407 Accumulated items of other comprehensive income: Translation adjustments (11,711) (65,613) Derivative valuation adjustment (2,785) (8,840) Pension liability adjustment (38,369) (39,579) 677,273 600,145 Less treasury stock (Class A), at cost (5,004,152 shares in 2004 and 2,190,038 shares in 2003) 126,496 45,490 Total shareholders' equity 550,777 554,655 Total liabilities and shareholders' equity $ 1,155,760 $ 1,138,923 ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, --------------------------- 2004 2003 ------------ ------------ (unaudited) OPERATING ACTIVITIES Net income $ 10,385 $ 54,055 Adjustments to reconcile net income to net cash provided by operating activities: Equity in (earnings)/losses of associated companies (506) 103 Depreciation 51,843 51,003 Amortization 3,372 5,091 Provision for deferred income taxes, other credits and long- term liabilities (16,652) (6,908) Provision for write-off of equipment 17,099 14,671 Provision for impairment of investment 4,000 - Increase in cash surrender value of life insurance (1,958) (1,998) Change in unrealized currency transaction gains and losses 8,004 (8,286) Gain on disposition of assets (285) (513) Shares contributed to ESOP 5,505 5,398 Tax benefit of options exercised 1,473 2,289 Changes in operating assets and liabilities: Accounts receivable 9,747 15,685 Note receivable 2,859 (1,739) Inventories 642 3,171 Prepaid expenses (300) (894) Accounts payable 3,029 (4,544) Accrued liabilities (5,518) 12,457 Income taxes payable 9,638 (9,294) Other, net (552) 1,777 Net cash provided by operating activities 101,825 131,524 INVESTING ACTIVITIES Purchases of property, plant and equipment (57,129) (51,849) Purchased software (879) (1,072) Proceeds from sale of assets 5,416 2,653 Cash received from life insurance policy terminations 863 - Premiums paid for life insurance policies (1,089) (1,118) Net cash used in investing activities (52,818) (51,386) FINANCING ACTIVITIES Proceeds from borrowings 68,005 45,833 Principal payments on debt (60,724) (59,709) Purchase of treasury shares (81,135) - Proceeds from options exercised 8,284 17,559 Debt issuance costs (1,555) - Dividends paid (9,570) (7,692) Net cash used in financing activities (76,695) (4,009) Effect of exchange rate changes on cash flows 7,848 (16,106) (Decrease)/increase in cash and cash equivalents (19,840) 60,023 Cash and cash equivalents at beginning of year 78,822 18,799 Cash and cash equivalents at end of period $ 58,982 $ 78,822 SOURCE Albany International Corp. -0- 01/27/2005 /CONTACT: Kenneth C. Pulver, Vice President-Corporate Communications, +1-518-445-2214/ /First Call Analyst: / /FCMN Contact: / /Web site: http://www.albint.com / -----END PRIVACY-ENHANCED MESSAGE-----