012348AC2 Filings — Albany International Corp. - FilingSpy
012348AC2
Albany International Corp.
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A maker of the woven fabrics and belts that help paper machines form, press, and dry pulp into paper, Albany International also builds advanced composite parts — including fan blades and cases for jet engines like the LEAP — used in aerospace and defense. It started in 1895 in Albany, New York as the Albany Felt Company, founded by three local businessmen. A fun twist: a competitor's mill burned down in 1894, freeing up an experienced feltmaker the founders hired to launch the business.
AEC gross margin nearly doubles to 17.9% as Albany explores exiting the structures assembly business that caused last year's losses.
The composites that drove Albany International to a loss last year is showing its first clear recovery. rose 5.8% to $329.5 million and expanded 1.4 points to 32.7%, as AEC's margin nearly doubled on higher LEAP and 787 volumes and fewer contract cost overruns. The company is still working to exit the structures assembly business that caused the damage, while the core Machine Clothing segment continues to soften.
Key takeaways
Albany Engineered Composites (AEC) rose to 17.9% from 10.5% a year ago, driven by higher LEAP, Boeing 787, and Boeing Tanks program volumes, lower on assets held for sale, and fewer unfavorable long-term contract adjustments.
Consolidated rose 5.8% to $329.5 million, entirely from a 15.6% increase in AEC revenue; Machine Clothing (MC) revenue fell 1.2% to $178.7 million on reduced demand in the Americas and temporary production interruptions.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 5.8% to $329M, driven by AEC segment growth, while MC segment softness and restructuring costs weighed on operating income.
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Consolidated net revenues increased 5.8% to $329.5M in Q2 FY2026, driven by a 15.6% surge in AEC revenues from higher LEAP, B787, and Boeing Tanks program activity.
MC revenues declined 1.2% to $178.7M due to reduced demand in the Americas and temporary production interruptions, partially offset by strong European performance.
rose 44.3% to $32.1 million, as the AEC margin recovery and a $3.8 million increase in restructuring expenses to $8.0 million — primarily for site consolidation asset transfers and consulting — offset MC softness.
turned negative at -$2.7 million, down from $32.7 million a year ago, as a $53.4 million use driven by growth more than consumed the improvement in .
Cash and equivalents fell 27.5% to $77.3 million, while rose 1.3% to $450.7 million; total liquidity stood at $426.7 million with $349.3 million available under the $800 million credit agreement.
What changed
AEC long-term contract adjustments: the $7.0 million quarterly charge rate that persisted through Q1 FY2025, Q2 FY2025, and Q1 FY2026 did not repeat; the filing cites fewer unfavorable contract adjustments as a driver of the margin improvement, suggesting cost estimates on the CH-53K, Gulfstream, and F-35 programs may be stabilizing.
AEC trajectory: the 17.9% level is the highest since Q4 FY2023 (18.5%), recovering sharply from the 10.5% trough in Q2 FY2025 and the 17.0% in Q1 FY2026, as higher volume and lower on assets held for sale take effect.
Machine Clothing organic : the 1.2% decline extends the volume-driven weakness flagged in prior quarters, with U.S. softness and production interruptions offsetting strong European performance, and held at 46.3%, unchanged from Q2 FY2025.
and capital allocation: at $450.7 million is up only 1.3% , a sharp deceleration from the 18.8% increase in Q2 FY2025, suggesting share repurchases may have slowed as the company navigates the AEC restructuring.
What to watch
Outcome of the strategic review for the structures assembly business: whether a sale of the Salt Lake City facility and exit from the CH-53K program is completed, the terms, and the financial impact on AEC's remaining composites operations.
AEC margin sustainability: whether the 17.9% can be maintained or improved as LEAP and 787 volumes continue to ramp, or whether further contract cost adjustments emerge as production progresses.
Machine Clothing stabilization: whether the U.S. volume softness and production interruptions that drove the 1.2% decline are temporary, and whether the 46.3% holds as product mix shifts.
and cash flow: whether the $53.4 million build that drove negative reverses in the second half, and whether can return to positive territory.
AEC nearly doubled to 17.9% from 10.5% a year ago, benefiting from higher volume, lower on assets , and fewer unfavorable contract adjustments.
Consolidated restructuring expenses rose to $8.0M from $4.2M, primarily due to higher asset transfer costs for site consolidations and increased consulting costs.
fell sharply to $3.0M from $34.8M in the prior-year period, mainly due to a $53.4M use driven by growth.
Total liquidity stood at $426.7M as of June 30, 2026, with $349.3M available under an $800M credit agreement, which management believes is adequate to fund operations for the next twelve months.
The information set forth above under Note 17. Commitments and Contingencies in Item 1, Notes to Consolidated Financial Statements is incorporated herein by reference.
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The information set forth above under Note 17. Commitments and Contingencies in Item 1, Notes to Consolidated Financial Statements is incorporated herein by reference.