Albany International(AIN)2022-04-26 16:13Financial Data and Key Metrics Changes - Total company net sales for Q1 2022 were 222.4 million in Q1 2021. Adjusted for currency translation effects, net sales increased by 11.5% year-over-year [17] - GAAP EPS was 0.85 in the same quarter last year, while adjusted EPS was 0.87 last year [9][23] - Gross profit for the quarter was 10 million in annual sales due to exiting the Russian market [28] - The company noted that inflationary pressures are expected to impact profitability, particularly due to increased costs in logistics and materials [11][26] Company Strategy and Development Direction - The company aims to invest in R&D and product development to drive organic growth and position itself as a technology leader in both segments [12] - In machine clothing, the company focuses on producing high-quality products and is the global market leader, with long-term demand expected to grow due to economic activity and a shift towards renewable materials [12] - The engineered composites segment is focused on bringing advanced materials to market, with significant opportunities in the aerospace sector, particularly with the LEAP program and CH-53K helicopter [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite the unpredictable global environment, emphasizing the adaptability of their teams in overcoming supply chain challenges [10][12] - The company maintains its full-year guidance for revenue and adjusted EBITDA, despite acknowledging risks related to inflation and potential de-stocking cycles [29][31] Other Important Information - The company has transitioned to a single class share structure, enhancing governance and shareholder equality [15][16] - The company returned over $50 million to investors in Q1, including dividends and share repurchases, while maintaining a net leverage ratio of about 0.52 [24] Q&A Session Summary Question: Visibility on LEAP program ramp-up - Management indicated strong visibility for the LEAP program, with significant revenue growth compared to the previous year, and expressed confidence in demand despite potential impacts from the Chinese market reopening [33][36] Question: Impact of China lockdowns on machine clothing revenue - Management reported no material impact from China lockdowns in Q1, but acknowledged potential risks for Q2. They noted that machine clothing has performed well despite economic uncertainties [37][54] Question: Guidance for machine clothing segment - Management maintained guidance, citing strong bookings and a solid position heading into Q2, but did not expect significant growth due to tough year-over-year comparisons [44][45] Question: Inflationary cost impacts and staffing levels - Management confirmed they are fully staffed in machine clothing and are adding personnel in engineered composites to support production growth [49][50] Question: Expectations for AEC margins and revenue - Management indicated that the path to achieving a 20% EBITDA margin is solid, driven by the absence of one-time reserves and expected improvements in program performance [73]