Albany International Corp. (NYSE:AIN) Q4 2015 Earnings Conference Call - Final Transcript
Feb 09, 2016 • 09:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the Fourth Quarter Earnings Call of Albany International. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. At the request of Albany International, this conference call on Tuesday, February 09, 2016, will be webcast and recorded.
I would now like to turn the conference over to Chief Financial Officer and Treasurer, John Cozzolino, for introductory comments. Please go ahead sir.
Thank you, operator, and good morning, everyone. As a reminder for those listening on the call, please refer to our detailed press release issued last night regarding our quarterly financial results, with particular reference to the Safe Harbor notice contained in the text of the release about our forward-looking statements and the use of certain non-GAAP financial measures and associated reconciliation of GAAP. And for purposes of this conference call, those same statements also apply to our verbal remarks this morning. And for a full discussion, please refer to that earnings release, as well as our SEC filings, including our 10-K.
Now, I will turn the call over to Joe Morone, our Chief Executive Officer, who will provide some opening remarks. Joe?
Thank you, John. Good morning everyone, welcome to our Q4 2015 earnings call. As always, I'll begin with an overview of the quarter, John will go into more detail. I'll follow with our outlook for 2016 and beyond and then we'll go to Q&A.
Q4 2015 was another good quarter for Albany International as both businesses continued to perform well. Machine Clothing again generated excellent margins, AEC continued to grow and progress towards the LEAP ramp, and cash flow was again strong with net debt declining $18 million in the quarter and ending the year at $81 million.
Turning first to Machine Clothing, Q4 sales excluding currency were down 5% compared to a year ago primarily because of three factors, the weak economy in Brazil, that much larger than normal decline in the North American Printing and writing market that first hit us in Q2 of last year and stronger-than-normal year-end slowdowns in the packaging market in the U.S. Nonetheless for the full year, sales were essentially flat and profitability was outstanding. Adjusted EBITDA for both Q4 and full year 2015 was 9% ahead of 2014.
Roughly half of this increase was due to the favourable impact of the strong dollar on currency translation which we've discussed in previous quarters. The rest of the improvement and profitability was due to a combination of restructuring, higher labor productivity in several of our plants and lower material costs. Also, during Q4, we implemented an early retirement program for our salary employees in the U.S. which accounted for most of the restructuring charge in the quarter. As for our new technology platform, it continues to gain momentum at the high end of the tissue and towel market, and we are encouraged by the R&D progress on applications