1Q 2012 income from continuing operations was a loss of $0.1 million. These results included restructuring charges of $0.3 million, foreign currency revaluation losses of $5.6 million, a pension settlement charge of $9.2 million, and net favorable discrete income tax adjustments of $6.7 million.
Net sales were $186.7 million in 1Q, compared to $180.1 million in 1Q 2012, an increase of 3.7%.
Adjusted EBITDA for 1Q 2013 was $33.8 million, compared to $25.6 million in 1Q 2012
1Q 2013 gross profit was $72.8 million, or 39% of net sales, compared to $68.3 million, or 37.9% of net sales, in the same period of 2012. The increase in gross profit percentage was attributable to results in Machine Clothing, where gross profit margins increased from 41.4% in 2012 to 44.2% in 2013, reflecting continued strong performance in the Americas and the cumulative effect of productivity improvements and restructuring. AEC gross profit was negatively affected by inventory write-offs and other losses associated with a legacy program at the Company’s Boerne, Texas, facility.
The Company’s effective income tax rate, exclusive of discrete tax items, was 34% for the 1Q 2013. 1Q 2013 income tax expense included a discrete tax charge of $0.2 million. For 1Q 2012, income tax was a benefit of $10 million, which included a discrete tax benefit of $6.7 million related to the resolution of certain tax contingencies, as well as a tax benefit of $3.3 million related to the pension settlement charge.
President and CEO Joe Morone said, “1Q 2013 was another solid quarter for Albany International, as the Company continues to execute, in both the near- and long-term, our cash flow-and-grow strategy. Compared to 1Q 2012, sales improved by 4% (excluding currency effects) and Adjusted EBITDA by 32%. Also during 1Q, the Company entered into a new, unsecured five-year credit agreement, which lowers our borrowing rate by almost 1%.
“Both AEC and MC again performed well. AEC sales grew by 22% compared to 1Q 2012, and although EBITDA declined because of write-offs and losses associated with a legacy program in Boerne, the business remains on track for profitable growth. Construction of both LEAP plants and production of parts for testing are on schedule; maturation and industrialization of our production process, systems, and organization continue to advance; and development work on new advanced composite parts for both engine and airframe applications are also proceeding as planned.
“Our 2013 outlook for both businesses remains unchanged. As we have stated many times, we view MC as a business with the potential to generate steady year-over-year Adjusted EBITDA. So even though 1Q Adjusted EBITDA was sharply higher than the comparable period a year ago, we continue to expect Adjusted EBITDA for the full-year 2013 to be comparable to 2012. We view the macro-economy as the primary source of short-term risk to this outlook - both upside risk and down.
Albany International is a global advanced textiles and materials processing company, with two core businesses. Machine Clothing is the world’s leading producer of custom-designed fabrics and belts essential to production in the paper, nonwovens, and other process industries. Albany Engineered Composites is a rapidly growing supplier of highly engineered composite parts for the aerospace industry.
