Albany International Corp. (NYSE:AIN) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 09:00 am ET

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Albany International Corp. (NYSE:AIN) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

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 12, 2019, will be webcast and recorded.

I would now like to turn the conference call over to Chief Financial Officer and Treasurer, John Cozzolino, for introductory comments. Please go ahead.

Executive
John B. Cozzolino

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 Olivier Jarrault, our Chief Executive Officer, who will provide some opening remarks. Olivier?

Executive
Olivier M. Jarrault

Thank you, John. Good morning, welcome, everyone, and thank you for joining our fourth quarter earnings call. We will follow today a similar format of past calls. I will begin with an overview of the quarter. Then John will take you through our financial results in more details. After which, I will provide an update to our outlook, and we will then take your questions.

Q4 2018 was once again a very good quarter for Albany International, as strong performance continued across both businesses. Total company net sales increased 11% or 15% excluding the impact of ASC 606 and currency translation effects. Compared to Q4 2017, Net income and Adjusted EBITDA both increased sharply. Net income increased to $17

million while Adjusted EBITDA grew to $58 million due to higher sales and productivity improvements in both MC and AEC. MC sales in the fourth quarter, excluding the impact of ASC 606 and currency translation effects, increased 4% compared to Q4 2017. Globally, MC sales grew in both the packaging and publication grades, with particular strength in North America. MC gross margin in Q4 increased to 48.6% compared to 45.0% in Q4 2017, primarily due to higher sales and improved plant utilization. Operating income and Adjusted EBITDA both increased significantly compared to Q4 2017, with Adjusted EBITDA improving to $51 million in the quarter. For the full year, MC Net sales, excluding the impact of ASC 606 and currency translation effects, increased 3% compared to 2017 with increases in all major paper grades. The increase in Net sales reflects our continued leadership in product innovation, our superior customer service levels, and our commitment to outstanding application engineering.

Operating income and Adjusted EBITDA both increased sharply compared to 2017, with Adjusted EBITDA growing to $212 million,