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Reportable Segments and Geographic Data | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Reportable Segments and Geographic Data | Reportable Segments and Geographic Data The Company is organized based on the nature of its products and is composed of two reportable segments, Machine Clothing (“MC”), and Albany Engineered Composites ("AEC”), each overseen by a segment president. These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker ("CODM"), reviews operating results for the purpose of allocating resources and assessing performance. Our CODM evaluates each segment's performance based on metrics such as net revenues, gross profit, and other key financial data, to assess performance and allocate resources that align with company-wide goals. Annual incentive targets are established for the segment presidents based on these metrics, in addition to Earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flows, which are reviewed in summary each month, and in more depth each quarter. The Company has not aggregated operating segments for purposes of identifying reportable segments. Effective December 31, 2024, the Company adopted the provisions of ASU 2023-07, which expanded the content and frequency of segment disclosures required under ASC 280. The accounting policies of the segments are the same as those described in Note 1, Accounting Policies, of the Notes to the Consolidated Financial Statements. Corporate expenses include wages and benefits for corporate headquarters personnel, costs related to information systems development and support, and professional fees related to legal, audit, and other activities. Corporate expenses are not allocated to the reportable segments, except certain global information system costs discussed below, because the decision-making for these functions lies outside of the segments. Machine Clothing: The MC segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, pulp, nonwovens, fiber cement and several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels for MC are substantially the same in each region of the world in which we operate. We design, manufacture, and market paper machine clothing (used in the manufacturing of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure. On August 31, 2023, the Company completed the acquisition of Heimbach, a privately-held manufacturer of paper machine clothing and technical textiles. The financial results of the acquired company are included in the Machine Clothing reportable segment. Albany Engineered Composites: The AEC segment provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group ("Safran"), owns a 10% noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract. The LEAP engine is used on the Airbus A320neo, A321neo, Boeing 737 MAX, and COMAC 919 aircraft. AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 14% of the Company’s consolidated Net revenues in 2024. In 2024, SAFRAN leased manufacturing space from AEC for the GE9X program. Rent paid by SAFRAN under this lease amounted to $1.0 million in 2024 and $1.0 million in 2023. AEC sales to SAFRAN were $178.1 million in 2024, $187.6 million in 2023, and $169.3 million in 2022. The total of Accounts receivable, Contract assets and Noncurrent receivable due from SAFRAN amounted to $78.5 million and $93.8 million as of December 31, 2024 and 2023, respectively. Other significant programs in AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for Boeing commercial programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine. In 2024, approximately 36% of AEC net revenues were related to U.S. government contracts or programs. The following tables show data by reportable segment that is regularly provided to the CODM, reconciled to consolidated totals included in the financial statements:
|  | Year ended December 31, 2024
(in thousands) |  | MC |  | AEC |  | Corporate |  | Total
Net revenues |  | $ | 749,907 |  |  | $ | 480,708 |  |  | $ | — |  |  | $ | 1,230,615 |
Cost of goods sold |  | 403,863 |  |  | 424,976 |  |  | — |  |  | 828,839 |
Gross profit |  | 346,044 |  |  | 55,732 |  |  | — |  |  | 401,776 |
Selling, general and administrative expenses |  | 123,120 |  |  | 47,421 |  |  | 40,341 |  |  | 210,882 |
Technical and research expenses |  | 29,832 |  |  | 16,265 |  |  | — |  |  | 46,097 |
Restructuring expenses, net |  | 9,460 |  |  | 3,649 |  |  | 329 |  |  | 13,438 |
Operating income/(loss) |  | $ | 183,632 |  |  | $ | (11,603) |  |  | $ | (40,670) |  |  | $ | 131,359 |
Certain prior year amounts have been reclassified in order to conform to current year presentation. Global information system costs previously included in Corporate expenses are allocated to the segments. Management believes this presentation better reflects the performance of the segments and is how management will review segment performance on a going forward basis. For the year ended December 31, 2024, Selling, general and administrative expenses include global information systems costs of $15.2 million, $15.7 million and $1.0 million for MC, AEC and Corporate, respectively. Global information systems costs were previously included in Corporate expenses.
|  | Year ended December 31, 2023
(in thousands) |  | MC |  | AEC |  | Corporate |  | Total
Net revenues |  | $ | 670,768 |  |  | $ | 477,141 |  |  | $ | — |  |  | $ | 1,147,909 |
Cost of goods sold |  | 339,210 |  |  | 384,981 |  |  | — |  |  | 724,191 |
Gross profit |  | 331,558 |  |  | 92,160 |  |  | — |  |  | 423,718 |
Selling, general and administrative expenses |  | 118,196 |  |  | 48,833 |  |  | 47,886 |  |  | 214,915 |
Technical and research expenses |  | 24,651 |  |  | 15,976 |  |  | — |  |  | 40,627 |
Restructuring expenses, net |  | 282 |  |  | — |  |  | — |  |  | 282 |
Operating income/(loss) |  | $ | 188,429 |  |  | $ | 27,351 |  |  | $ | (47,886) |  |  | $ | 167,894 |
For the year ended December 31, 2023, Selling, general and administrative expenses include global information systems costs of $10.9 million, $14.2 million and $2.1 million for MC, AEC and Corporate, respectively. Global information systems costs were previously included in Corporate expenses.
|  | Year ended December 31, 2022
(in thousands) |  | MC |  | AEC |  | Corporate |  | Total
Net revenues |  | $ | 609,461 |  |  | $ | 425,426 |  |  | $ | — |  |  | $ | 1,034,887 |
Cost of goods sold |  | 297,176 |  |  | 347,929 |  |  | — |  |  | 645,105 |
Gross profit |  | 312,285 |  |  | 77,497 |  |  | — |  |  | 389,782 |
Selling, general and administrative expenses |  | 91,393 |  |  | 42,339 |  |  | 34,981 |  |  | 168,713 |
Technical and research expenses |  | 24,588 |  |  | 15,353 |  |  | — |  |  | 39,941 |
Restructuring expenses, net |  | 92 |  |  | — |  |  | 14 |  |  | 106 |
Operating income/(loss) |  | $ | 196,212 |  |  | $ | 19,805 |  |  | $ | (34,995) |  |  | $ | 181,022 |
For the year ended December 31, 2022, Selling, general and administrative expenses include global information systems costs of $10.0 million, $11.8 million and $1.0 million for MC, AEC and Corporate, respectively. Global information systems costs were previously included in Corporate expenses.
|  | Years ended December 31,
(in thousands) |  | 2024 |  | 2023 |  | 2022
Net revenues |  |  |  |  |  |
Machine Clothing |  | $ | 749,907 |  |  | $ | 670,768 |  |  | $ | 609,461 |
Albany Engineered Composites |  | 480,708 |  |  | 477,141 |  |  | 425,426 |
Consolidated total |  | $ | 1,230,615 |  |  | $ | 1,147,909 |  |  | $ | 1,034,887 |
Gross profit |  |  |  |  |  |
Machine Clothing |  | 346,044 |  |  | 331,558 |  |  | 312,285 |
Albany Engineered Composites |  | 55,732 |  |  | 92,160 |  |  | 77,497 |
Consolidated total |  | $ | 401,776 |  |  | $ | 423,718 |  |  | $ | 389,782 |
Depreciation and amortization |  |  |  |  |  |
Machine Clothing |  | 33,917 |  |  | 24,616 |  |  | 19,982 |
Albany Engineered Composites |  | 54,228 |  |  | 50,764 |  |  | 47,578 |
Corporate |  | 1,149 |  |  | 1,353 |  |  | 1,489 |
Consolidated total |  | $ | 89,294 |  |  | $ | 76,733 |  |  | $ | 69,049 |
Operating income/(loss) |  |  |  |  |  |
Machine Clothing |  | 183,632 |  |  | 188,429 |  |  | 196,212 |
Albany Engineered Composites |  | (11,603) |  |  | 27,351 |  |  | 19,805 |
Corporate |  | (40,670) |  |  | (47,886) |  |  | (34,995) |
Operating income |  | $ | 131,359 |  |  | $ | 167,894 |  |  | $ | 181,022 |
Reconciling items: |  |  |  |  |  |
Interest income |  | (4,064) |  |  | (6,566) |  |  | (3,835) |
Interest expense |  | 16,613 |  |  | 20,167 |  |  | 17,835 |
Pension settlement expense |  | — |  |  | — |  |  | 49,128 |
Other (income)/expense, net |  | 1,721 |  |  | (6,163) |  |  | (14,086) |
Income before income taxes |  | $ | 117,089 |  |  | $ | 160,456 |  |  | $ | 131,980 |
Interest income, Interest expense, Pension settlement expense, Other income/expense, and Income taxes are not allocated to the business segments. Results for the years ended December 31, 2024 and December 31, 2023 include Heimbach, which was acquired August 31, 2023. Heimbach contributed Net revenues of $141.6 million and $51.2 million in 2024 and 2023, respectively. Heimbach reduced MC's Operating income by $20.0 million and $6.3 million in 2024 and 2023, respectively. Depreciation expense for Heimbach on Property, plant, and equipment, net was $12.4 million and $4.0 million in 2024 and 2023, respectively; and amortization expense on Intangibles, net was $1.0 million and $0.3 million in 2024 and 2023, respectively. In the third quarter of 2022, we took actions to settle certain pension plan liabilities in the U.S., leading to charges totaling $49.1 million, which were included as Corporate expenses and other. In the measurement of assets utilized by each reportable segment, we include Inventories, Accounts receivable, net, Contract assets, net, Noncurrent receivables, net, Property, plant and equipment, net, Intangibles, net and Goodwill. The following table presents assets and capital expenditures by reportable segment:
|  | As of December 31,
(in thousands) |  | 2024 |  | 2023 |  | 2022
Segment assets |  |  |  |  |  |
Machine Clothing |  | $ | 600,603 |  |  | $ | 669,907 |  |  | $ | 455,390 |
Albany Engineered Composites |  | 736,306 |  |  | 800,931 |  |  | 717,972 |
Reconciling items: |  |  |  |  |  |
Cash |  | 115,283 |  |  | 173,420 |  |  | 291,776 |
Income taxes prepaid, receivable and deferred |  | 47,944 |  |  | 33,984 |  |  | 23,134 |
Prepaid and Other assets |  | 148,560 |  |  | 156,772 |  |  | 153,983 |
Total assets |  | $ | 1,648,696 |  |  | $ | 1,835,014 |  |  | $ | 1,642,255 |
Capital expenditures and purchased software |  |  |  |  |  |
Machine Clothing |  | $ | 21,270 |  |  | $ | 25,917 |  |  | $ | 20,901 |
Albany Engineered Composites |  | 58,121 |  |  | 57,404 |  |  | 74,845 |
Corporate expenses |  | 1,816 |  |  | 1,108 |  |  | 602 |
Total capital expenditures and purchased software |  | $ | 81,207 |  |  | $ | 84,429 |  |  | $ | 96,348 |
The following table shows data by geographic area. Net revenues are based on the location of the operation recording the final sale to the customer. Net revenues recorded by our entity in Switzerland are derived from products sold throughout Europe and Asia, and are invoiced in various currencies.
|  | Years ended December 31,
(in thousands) |  | 2024 |  | 2023 |  | 2022
Net revenues |  |  |  |  |  |
United States |  | $ | 650,532 |  |  | $ | 649,500 |  |  | $ | 586,779 |
Switzerland |  | 109,751 |  |  | 115,207 |  |  | 119,069 |
Germany |  | 86,991 |  |  | 32,239 |  |  | 4,461 |
France |  | 81,141 |  |  | 77,573 |  |  | 76,826 |
China |  | 67,732 |  |  | 65,135 |  |  | 63,914 |
Brazil |  | 66,943 |  |  | 69,527 |  |  | 66,175 |
Mexico |  | 57,928 |  |  | 58,874 |  |  | 58,519 |
Other countries |  | 109,597 |  |  | 79,854 |  |  | 59,144 |
Total Net revenues |  | $ | 1,230,615 |  |  | $ | 1,147,909 |  |  | $ | 1,034,887 |
Property, plant and equipment, net |  |  |  |  |  |
United States |  | $ | 299,370 |  |  | $ | 303,578 |  |  | $ | 278,500 |
China |  | 52,063 |  |  | 57,070 |  |  | 33,432 |
Germany |  | 46,033 |  |  | 52,934 |  |  | 9,562 |
Mexico |  | 38,762 |  |  | 46,759 |  |  | 42,320 |
France |  | 30,935 |  |  | 31,069 |  |  | 31,382 |
United Kingdom |  | 16,651 |  |  | 18,306 |  |  | 9,699 |
Canada |  | 14,313 |  |  | 15,318 |  |  | 14,264 |
Spain |  | 12,154 |  |  | 14,804 |  |  | — |
Other countries |  | 53,150 |  |  | 62,151 |  |  | 26,499 |
Total Property, plant and equipment, net |  | $ | 563,431 |  |  | $ | 601,989 |  |  | $ | 445,658 |

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