0001628280-26-012906
SEC filingAlbany International Corp. reported a net loss of $57.0 million for FY 2025, a significant decline from net income of $88.1 million in FY 2024. Net revenues decreased 3.9% to $1.18 billion, while gross profit fell 39.3% to $243.9 million, resulting in a gross margin of 20.6%. The company recorded an operating loss of $36.1 million, compared to operating income of $131.4 million in the prior year. Key drivers of the loss included a $165.8 million negative cumulative adjustment to the estimated profitability of long-term contracts in the AEC segment, primarily related to the CH-53K, Boeing waste tank, F-35, and Joint Strike Fighter programs. Despite the net loss, the company generated $152.5 million in net cash from operating activities. The forward-looking significance centers on the company's strategic review of its structures assembly business, which has been classified as held for sale, and ongoing challenges in executing complex aerospace contracts.
Albany International Corp. reported a challenging FY 2025 with consolidated net revenues of $1.18 billion, a decrease of $47.8 million (3.9%) from $1.23 billion in FY 2024. The company swung to a net loss of $57.0 million, a $145.1 million negative change from net income of $88.1 million in the prior year. Basic earnings per share attributable to company shareholders were -$1.94, compared to $2.81 in FY 2024. The operating loss of $36.1 million contrasts sharply with the $131.4 million operating income reported in FY 2024. A significant factor was a $165.8 million negative cumulative adjustment to the estimated profitability of long-term contracts in the AEC segment. Despite the net loss, the company generated $152.5 million in net cash from operating activities, aided by non-cash adjustments including a $139.7 million contract loss provision.
Net revenues decreased to $1.18 billion in FY 2025. The Machine Clothing (MC) segment reported revenues of $708.1 million, a decrease of $41.8 million (5.6%) from $749.9 million in FY 2024. The Albany Engineered Composites (AEC) segment reported revenues of $474.7 million, a slight decrease of $6.0 million (1.2%) from $480.7 million in the prior year. Geographically, the United States accounted for $638.1 million (54%) of net revenues. The company's largest customer, SAFRAN, accounted for approximately 15% of consolidated net revenues ($177.0 million), substantially all related to the LEAP engine program. The AEC segment's revenue recognition involves significant judgment, with adjustments to contract estimates impacting reported results.
Gross profit declined 39.3% to $243.9 million in FY 2025, resulting in a gross margin of 20.6%, down from 32.7% in FY 2024. The decline was primarily driven by the AEC segment, which reported a gross loss of $79.8 million, compared to a gross profit of $55.7 million in the prior year. This was largely due to the $165.8 million negative adjustment to long-term contract profitability estimates. The MC segment maintained a gross profit of $323.7 million with a 45.7% gross margin. Selling, general and administrative expenses increased 3.5% to $218.3 million. Technical and research expenses increased 4.2% to $48.0 million. Restructuring expenses were $13.7 million, similar to the prior year. The operating margin was -3.1% for FY 2025.
The company generated $152.5 million in net cash from operating activities in FY 2025, a decrease of $66.0 million from $218.4 million in FY 2024. Key adjustments to reconcile net loss to operating cash flow included depreciation of $82.7 million, amortization of $5.2 million, and a contract loss provision of $139.7 million. Net cash used in investing activities was $68.3 million, primarily for purchases of property, plant and equipment. Net cash used in financing activities was $96.1 million, including $186.0 million for treasury share purchases and $32.5 million for dividends paid. Free cash flow (operating cash flow less capital expenditures) was $84.2 million. The balance sheet shows total assets of $1.72 billion, including $293.8 million in assets held for sale. Total liabilities were $986.6 million, with long-term debt of $455.7 million. Shareholders' equity was $732.1 million. The company had $112.4 million in cash and $344 million in available borrowing capacity under its $800 million revolving credit facility as of December 31, 2025.
The company is exploring strategic alternatives for its structures assembly business, which has been classified as held for sale with $293.8 million in assets and $203.3 million in liabilities. This exit is intended to allow the AEC segment to focus on higher-margin, advanced technology component opportunities. Risk factors disclosed include significant challenges in the AEC segment related to estimating and executing on long-term, complex aerospace contracts, as evidenced by the $165.8 million negative adjustment in FY 2025. The company also faces risks from customer concentration, with SAFRAN accounting for approximately 37% of AEC's net revenues. Other noted risks include global economic conditions, supply chain constraints, cybersecurity threats, and compliance with evolving environmental and sustainability regulations. The company's primary borrowing agreement requires maintenance of a leverage ratio not greater than 3.75 to 1.00; as of December 31, 2025, the ratio was 1.66 to 1.00.