AIN - Earnings call transcript Q3 2020 | Albany International Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Albany International Third Quarter Earnings Conference Call. And at this time, all participants are in a listen-only mode. Later, we will have a question-and-answer session. And instructions will be given at that time. [Operator Instructions] As a reminder today's conference is being recorded. to Relations, conference, John like Director to now Investor of Hobbs. would turn over the the I Please go ahead sir.

John Hobbs

Thank you, Third Albany's Welcome everyone. Brad, and Quarter good Conference morning, to Call.

measures refer those night, release, last our about their of and notice, quarterly and particular statements the reminder, contained release with regarding listening the results, our certain to a detailed press forward-looking to for call, As non-GAAP reconciliation use the please GAAP. reference to financial in our issued text financial on associated of the the

For statements the remarks call, purposes of this apply this conference those verbal to our morning.

make markets uncertainties, looking, that among we financial results. serve will on of contain and the that are pandemic risks effects and potential our of We are which, the statements the a operations, forward COVID-XX number our

discussion, SEC including For comparable their to reconciliation our earnings well a this measures, release, refer both of most on use we to filings, including as a our our full XX-K. may call, GAAP please measures, non-GAAP as

I'll Now will Bill? over remarks. President Higgins, opening provide Officer, Bill Chief to Executive and who the turn call

Bill Higgins

And Good for We Thanks quarter. joining another morning. quarter earnings John. Thank call. everyone. our delivered solid welcome third you

to expected. our -- customers profitability We're and our of for And bottom-line. were better, to than with was the our profit expected pleased especially revenues QX there. Alright, Our a doing got job great as bit little continue. a our echo I'll operational drive performance, ability

the going pandemic Before let detail, say words into more COVID few me environment. a about

remains Our employee's priority. safety our top well-being, and health,

and safe supplies support also leadership we've as And facilities. and are teams. environments, possible our employees inside offices commend to provided to to created operations our disciplined that ensure safe We employees, and continue And remain our in $X.XX, than delivered a In both In advice our EPS employees adapt, expected behaviors commendable segments and our of we've contributing our team challenges, management job, solid communities. of homes better performance. remarkable adjusted results. QX, has their safe we done to spite the these encourage, delivering to our our QX with

the both range adjust offer performance. of production and a Our complemented to be pandemic, performance closely operations strong, quarter value-added new to with historically levels, continue customer, operational prepared to best-in-class work is on strong well outstanding, deliver in for and to focus technical the customer right-size programs, our expected demand. to products, segments. execute to despite to support we have the by on-time ability technology our delivery In customer excellence We customers the shifts. of intense of resulted our in We on and demand effects This top productivity our line. development continue margins, attractive our levels

Now talk let about me the segments.

continues EBITDA nearly clothing of while end-market and XX% Clothing various slowdown. deliver the declined of navigating around continues Machine to to world, about due year-over-year, gross segment revenue Our XX% margin exceptional, well, performance segments. downs machine with of our ups margins and the in the all in over plants operational to XX%, economic execute global

tissue worldwide, according number a declined some XX%, of of for acceleration by from printing to driven and has permanently. many working with the residential machines and consumption grades publication home. been for demand Tissue technologies, of world capacity by expected, As very full estimates new running machines and and Consequently, people paper mixed demand schooling writing over digital is online. tissue have idle machines markets. grade the some coming with packaging around At-home at and are strong,

the weak, cetera. drop-off is other at because bars, hotels, of hand, away-from-home in tissue schools, restaurants, consumption et airports, office the On buildings,

experiencing from slight converted a paper away-from-home, the summary, lock-downs mixed In production of year, decline, effects of in likely a idle. away-from-home Albany of negative demand, our by expensive at-home orders was longer time type throughout at-home revenues summer good growth tissue, switch, demand to as well lagged by demand is this with year-over-year the mills the tissue the production, the other. offset and more tissue as one the Other these being to is being And slowdowns packaging Packaging several earlier grade months. other net machines than decline the from for in a, cycles as is term to We're consuming paper for reporting some picture. stronger, factors. for in for temporarily news The quarters. that custom market is grades the it demand, are machine and effect also

fabrics And cash materials, recurring rebounded while as sanitizing the demand wipes, to up initial strong small with and the consumable complements our a provide our business. pick such foundation for strong the very medical part is gowns pleased our slowdown aerospace times. in performance clothing earlier fabrics orders general home revenues, we're Another year. well. in of these in flow of our seen construction products, composites our gloves, It continues after PPE of business, for and belts positive the a the this as Engineered manufacture construction In machine portfolio, is used that Engineered trend perform of we've volatile

$XXX Machine expect of XXXX. pandemic, million or EBITDA with segment solid report adjusted the despite to We Clothing year to more performance, a the be in

the well healthy XX.X% in also quarter adjusted quarter. engineered and performed this a composites EBITDA Albany margin Our of delivered segment

As closely facilities. quarter. the partner, work production Albany-Safran composites gradually production reopen And to our Safran in with successfully planned, lead business, restart our our

more take longer production fan aircraft XB recovers. mostly focus demand production and the Boeing into quickly, XXX is since and LEAP to will LEAP on engine aircraft the manufacturing existing blade certified will the in ASC Max gets engines Airbus as NEO to AXXX of AXXX Neo the recover while brought Our are XA for service. case Airbus production, be expected increase

performance, process the content continue kaizen or platforms productivity, using lean and for with improvements, customers addition both safely. of drive new of growth number for during AEC number we improved business opportunities, other safety as production In to kaizen new us mindset all and programs. customer creative and tools conduct is to to profitability delivery existing favourably persistent the executed with great work the This better critical impressed on-time enhanced leads and to lean in and AEC the and on quarter, commercial video a which quality continues pursue on military of to opportunities, as applications. to growth new leadership

to invest product technology these applications, downturn, as at continue develop commercial next We of a look materials for the generation bring in process, We to advanced composites. to develop to efficient to the aerospace, and portfolio in R&D manufacturing market. advance, of time and materials broader a composite

been performed the good aircraft, The resumes lead to our we're being So In both they production is as are in NEO that, news at travel. we're flown despite rate shape. travel expect It back. pleased AXXX domestic the well narrow-body globally. market positioned supplies segments, challenges pandemic QX. with great key we're year of that a international results, to a how in Airbus aircraft are Financially the fact when general, the very levels, solid expected which year comes first end reported has ago. with And approaching similar before in customers, to with recover

generation continue excellent have for We structures, leverage and sheet organic and strong liquidity, will outlook. of customers to growth Stephen? to the a low on such XD balance Stephen allow invest and continue cash of us the longer more generate provide to term all next in next now opportunities and applications as composite flow, of quarter financials which free detail generation with

Stephen Nolan

outlook our Bill. and you, first will for then about our year. about Thank I for business the Good revised balance everyone. the the quarter morning, talk of the results for

$XXX adjusting of in declines million, net grades, down compared machine net XX.X% currency compared For the sales XX.X% represented MC effects, in the third to also declined of by year-over-year were declined by the only last a over sales last Adjusting quarter, product publication XX% of effects, decrease driven the translation quarter. net year. major year-over-year sales currency delivered $XXX.X across which quarter. same for XX% X.X% for Sales rates to year sales our all In translation to million total the company clothing quarter of in were

declines shift K market the saw grade has or consumer from effects overall LEAP declined in the our while an supply platforms. by of at-home their activity for as resulting by exceed away-from-home in run of program on lines caused we demand grades caused reductions composites products after in our at Engineered CH-XX However, significant products by declines capacity were growth our sales at-home net at-home sales offset to XX.X% packaging by in products. and number upside serving to earlier forced partly In lower in limiting products, also sales tissue to and revenue, the market, primarily Bill demand a translation XXX tissue in aggregate caused in customers currency the earlier, for the F-XX year. Boeing away-from-home adjusting economic in referenced the idle partially decline in again of

During the LEAP a little quarter program compared under same to million the quarter $XX in year. million, the last $XX generated

in increase to quarter's that quarter three place up QX. very of little this our fact million took in in the second compared late This in marginally very generated to the of QX the was from due $XX leap the the with quarter production revenue LEAP year only reopening facilities

sales. from margin was gross basis company period quarter increased XX.X% comparable a the gross last $XX.X reduction year. overall Third XX.X% from XXX profit of XX.X% to the million, points net of for The by

same the is segment, primarily margin from in recorded $X.X declined profitability sales sales sales of contracts of estimated change net exchange to principally XX.X% mix lower costs third net the driven to a to favorable by lower MC XX.X% gross foreign the million Within net revenues. AEC, quarter net quarter due absorption favorable the XX.X% improved the that about XXXX. long-term due offset almost this of fixed of Within of from in The by XX.X% in to rates. margin gross favorable partially of as program

offset percentage technical, $XX.X the declined The was million from $XX.X compensation but selling, quarter increased sales revaluation, XX.X% expense higher in foreign from million due the general to total incentive in the net prior reduction currency expense quarter, higher of to a expenses quarter impact and in lower CirComp. primarily expense, the travel current XX.X%. and from as to year partially research addition of by Third

in million quarter tax quarter of $X.X in for XXXX. netted the revaluation of operating expense the to of $X.X additional in income million third compared $XX.X expense resulted profit foreign clothing million in income a higher million gross of resolution X.X a for the was rate tax previous STG&R and year down decreased of operating same AEC the million, $X.X million $XX.X of income other expense. year. resulted STG&R the year income income lower driven expense $X period Total operating to by caused XX.X%. of was income for current an by profit years. claim in million, by caused The reduction $XX.X by million last million. the primarily company this reduction the quarter, net quarter prior $X.X by year quarter. rebate currency in this million lower income in of compared gross additionally lower income from claim income sales to The in partially expense to successful in a offset paid higher Foreign and interest QX was in and both fell last in $X.X by The of Other of Machine and expense XXXX current QX

this expenses jurisdictions company per the $X.XX $X.X acquisition which in year. was XX.X% or higher was this quarter, AEC to $X.XX net and for the in with tax $X million was $XX.X the EBITDA million million year, currency of profits generated EBITDA level impact prior adjusted reduced for this income net quarter in XX% offset to million Adjusted by down of the and of share and While was by the to EBITDA $XX.X same income XX.X% the income. integration, last year. XX.X% of in fell $X.XX clothing last quarter, losses, year. income attributable or the the Earnings the sales, down gains expenses million operating quarter for was sales year this or The quarter million a period of million, a XX.X% reduction XX.X% primarily tax reduction $XX compared adjusted per lower compared year. driven last compared foreign to year. from with compared this Net reduction favorable year, associated $XX.X last last rates earnings $X.XX recent a most adjustments, last CirComp our was share Machine sales higher to higher adjusting net of was quarter, expense from of sales. same in this tax to restructuring from revaluation net quarter. $XX.X year's After global by or of share in $XX.Xmillion million were adjusted of $XX.X

of for the quarter QX. in the at netting end position, collect in by $XXX credit The QX limitation strong cash our maturities netting, which at reduction credit was consists by our the to that credit with Disregarding slightly down QX operating leverage collections a composites, the by the cash our to there X.X from during the of during solid gross were current facility, the generation to caused of flow with this during on reduction strong of quarter. quarter debt collected in limits in be the debt of our long-term X.XX end declined I down in from to ratio quarter against to balance related net fourth interest as of cash continued revenue cash I our XXXX note we XXXX of from absolute roughly of at of should enabled in associated true-up quarter would the submitting the leverage quarter. and free debt during invoices like under year, million. The both during to total results an million will end will increased million plus cost LEAP of first the on us cash reduction X.XX $XX during our the shipments the we debt note contract that the the our X.XX year. end the we both be quarter, expense I cash finished of net $XXX by was Turning leverage and to customer end flow cap per QX invoice flow. that, cash The future quarters. benefit rebate of $XX million low well quarter, tax debt pay $XX X.X, XXXX principally debt, repeated and allowed the debt, definition referenced debt of resulting earlier the revolving agreement. under million fourth a quarter this the the sheet in that on particular prior operating unusually continue of of which was interest used at engineering up ratio not the in caused about quarter as amounts result the segments. the we ratio revenue paydown about debt, both sales long-term cash use up received will $XX of expense, of be the or at was in principally reported which to in on no the agreement, the during million period that, to Under Total of

of and strong performance revolving While expenditures would LEAP QX reduction October allowed in to us we're the the operational due I little from expenditures million sheet like the XXXX, two XXXX. of same million and period a $XX over Capital down by program. of our term to occurring facility to to on $X balance last quarter, our in almost principally after the capital note the credit year, extend QX that have years end

quarter. of have out XXXX, have clothing the we the called the of guidance. Looking machine weakness forward we to continuation balance the order financial segment, our seen revised In we last

a orders QX, X% XXXX period to are QX down year-to-date the were orders to XXXX. almost same down compared on basis in at X% of compared During almost and

during continue about trend manifested earnings other machine in declining broadly to publication rates declines clothing in saw by other half call. revenues quarter. These are for XX% year, we declines the quarter to the in quarter orders declines for our the itself all this This greatest shared show line this expectations fabrics compared orders our quarter. lower we back second the on that than also lower with grades of year last While year-over-year in the engineered

to do failed for impact had the we as materialize expect our fourth greater and orders lower of to expect the from revenues risks in prior us envisaged been in quarter. they in higher be a revenue the certain on sequentially revenue resulting than We delivering somewhat in to quarter However, third to the quarter revenues QX down result guidance. be

While be our market, the should it between packaging signs of there additional that showing in are signs markets, be recovery, seen any of as American not the North such sales current some machine product end production sustained lag would rebound certain clothing means and orders. are

year XXXX, did From previously we the of we revenues QX, million, in are very of range erosion, million. increasing For a in during of full favorable exchange to of we from the slightly did perspective favorable $XXX of the up mix the prior quarter in $XXX margin the machine $XXX while performance to clothing, due margin change stronger-than-expected minor to see a to rates continue to signs guidance due segment business. to to start enjoy the benefits $XXX

in that to as XXX quarter, than less quarter not guidance. had was However, to last lower associated impact been a during compared with provided was as which to a the expected had second lower we revenue, overall led Instead, which segment biggest the when absorption cost gross basis fixed is headwind margins point we margin compression great the expected.

be in further by QX. exacerbated erosion the However, projected revenue impact will in this

the in revenue a EBITDA and of in will absorbing of SG&A expected fourth quarter. expenses cause some conjunction also additional expect fixed that the growth We with R&D in over impact compression margins base expenses SG&A lower

now of prior EBITDA of $XXX $XXX million the million. $XXX performance, For again, due the million, to million up we to guiding full guidance adjusted to $XXX from are QX segment strong year,

to in composites, recovery now lead back modest Turning revenues a being ASC in we of from three all our of program, in see quarter, expect the engineered facilities our as to fourth result operation.

improvement There However, even the AXXX than the fourth quarters in million almost all deliveries is to the was year. with expect family. program have recovery, to through last LEAP that of generated $XX marginal in compared to support be continuous expected will fourth less $XX that four revenue as quarter XXXX, Airbus for to in quarter NEO XA be some production we million

finished that already powers LEAP in goods amount number recognized of the we finished volume However, finished inventory, that variant provide facility in the given completed Boeing's XXX aircraft, on to MAX, very with respect XXXX. service engines inventory, compared of Max, which XXX our our revenue XXXX to have the already the Boeing will on limited upside to we expect of as the the XB and to of Safran's that revenue goods planned our return

quarter We that declines program, also half to in where that close maybe expect aircraft. year see Boeing in at further slowdown XXX our in the to revenue fourth fourth quarter of frames by of the generated last in production sequential caused

of in From well up just continue expect low continue QX and over from dependence in to positive to perform level revenue XX% programs XXXX. our that QX. a We segment's of the perspective, revenues throughout represented QX XX% almost

million down composites guidance we guiding are $XXX full year, engineered segment adjusted $XXX $XXX From $XXX we to of the for the $XX For of mil with consistent prior EBITDA revenues prior year, now are guiding million. of guidance. million, a $XX full between million to segment now million slightly perspective, profitability from and

up tax a prior QX. Turning taxes the the to lowered for in income year, slightly driven year including recorded by guidance company rate our back level, true the we tax to adjustments, have

quarter during flow the delivered LEAP positive cash quarter. invoices cash our $XX quarter, due cash with good income in flow the shipments, of free the about Turning of the to with consumption to line another roughly million of notwithstanding and we net lack programs for

rate $XX company With between million, We guidance from of expenditures compared to expect year resulting the per million, between tax once $XX share adjusted $XXX down $X.XX, $X.XX strong and the Revenue $X.XX $XXX call to the of $XX for guidance from market guidance. credit hard XX% prior updating with million. flow. our $XXX very $XXX and prior amortization in open guidance unchanged and and given the was overall up of the up of to XX%. million, a the of prior present. It more as $XXX of and quarter. from to between GAAP from to unchanged of guidance. end finish would are of impact earnings prior questions. like and ongoing Capital to At all in pandemic the $X.XX, which Depreciation guidance and range to is XX%, the share up of on from and $XXX across globe. you, employees $XX EBITDA million, by we free and per guidance put Effective XX% up cash and XXXX The follows. guidance. $X.XX $X.XX. strong $X.XX income from $X.XX, of I of Brad. Adjusted work to unchanged to for Returning level, due between the between prior that, Over earnings prior the of to prior

Operator

Of with Instructions] Arment the today first Baird. line course. [Operator ahead. of comes Peter go question Please from Our

Peter Arment

dynamics, quarter Stephen. help on LEAP on, bit. and Yes. congrats I LEAP-XB in a be the taking should understand strong Bill. morning, can on LEAP understand I Good kind on XXXX? qualitatively all just but recovery kind of higher a for the just a revenue the thanks fast Good us what's guess, details time, XXXX going obviously morning, Stephen, you of you speaking, long versus LEAP little expect, A do given

Stephen Nolan

it to marginally be would higher. I very Yeah. expect

a amount XB and costs but recognized Obviously, will fixed production, producing you on recall, significant and business. quarter. XA QX year modest of that we If QX the no first of a in the first good for in this both quarter had revenue components

really might up but we next would I expect So year, little revenue. very be marginally expect XB

hand. have XXX we LEAP-XB shipped hand hand, already three Boeing a more that we've aircraft or more either we on the this obviously lower little of which first not is for said than will said, end engine few at the we meaning, and completed than but we at lot looking this inventory of on quarters recognized power than year. are expect finished we year had and XXXX the sets still XXX, shipsets that on a today ago, recall engines marginally If chain. a engine higher when on than in a the LEAP-XB, XXX Today, the with we you already aircraft but is that situation, XXXX shipped on year about today about revenue Safran which than next sets to will just have different we they produced LEAP-XA marginally have Peter, of had and we in still the higher actually we trajectory, I much would only be shipped

Peter Arment

takes be kind Okay. there EBITDA guidance, we puts I it's are of that and about? of margin, some And the for should guess, the dynamics just What QX. quite around the thinking margin adjusted range, AIC a

Stephen Nolan

uncertainty at in As the to even could wide amount like broad you which period potential not here as uncertainty program positive may have there those is amount some other, that from could huge there, an adjustments because know, relatively as there AIC, given about and perspective. the is be quite we allowance range direction there a range short for there's we quarter, one or of need of a whether quarter. I business in accounting that fourth leave terms a so to operational be is so of negative in always a the time because do not outcomes, in it be and of little rates production any long-term suggested think in numbers

is in. some programs of you like on recognize rates rate the All programs. our It's on and we just long-term profit locked those much production pretty of

Peter Arment

material I And you I thanks more details I any how terms the you orders, squeeze seen appreciate but different thinking be of pricing we MC, what grades are in you've the of one kind you're and about just see guess, on on -- that. quickly environment all change, is and seeing how in just for there, could if sequentially Thanks. that. if the should on

Stephen Nolan

fight is day we've has competitors Peter there, terms been and for that knife years, we we every for bit is a today. before, and of It there a it there certainly market always been. have Yeah. as And make share. true strong faced has in price is competitive single to said or always out look competitive was that every available very very market trade-offs market

we significant you However, let's have in by driven seen over with uptick and not or more line a pandemic what know today that the months. less to the economic say, It's have we seen last, conditions. overall in XX XX

Peter Arment

I appreciate that. Thanks Stephen.

Stephen Nolan

Thanks Peter.

Operator

And Please ahead. do with Caitlin have line a question Dullanty from of America. the we Bank of go

Caitlin Dullanty

positioned that so see of for advanced And us Can would technology driving about how OEMs bit commercial you on opportunity Bill guys terms materials be aero you your what consider this that morning see do guys. recovery. strategy areas evaluating, can should a capabilities, Good that kind more M&A? spending the you of do tell to be tangentially, in or only well incremental you for development? mentioned investment small downturn you you technology good a are for maybe Albany ramp little you the up then

Bill Higgins

Sure. Caitlin, next-generation we're of behind great processes where question. of time can the to of bring to composites develop military working It the the broad see is a opportunities marketplace. then commercial manufacturing materials and materials sort to a processes we defense spectrum

work board, large I'll So now more as term say, less large, is defence the is bit probably on working the in the across opportunity opportunity. OEM there we're on a little near there defence, military

where looking really fuselage but we're and well engine, on that the positioned applications. to we've also continue ourselves on going LEAP wing we're the So working and program at other

of R&D and we've to facilities that We're the we've ours have things the lot do and one of challenging development is just committed it's the to meeting. a get the customers' challenging it's that. through into pandemic to learned video to getting customers and So by a doing lot

strategy and we our as go And a we on consider of M&A type that technology get year have and brings before of and working standpoint, there's through number downturn it technology programs around as of that bought this CirComp develop forward. last And that from stated as we're as portfolio is we thermoset as inorganic thermoplastics can company right all certainly So, we capabilities we a noted that broader as currently. you to part applications we well. other small before have want company perhaps we to would some you an of didn't is we further the in a Germany

The to environment how -- behind pans we've the to be it. have So want and work and make we see that watching at continue capability yes, will that it continue we're things think backing the the happen. And and table. it OEM to we demonstrated operational out I on there we'll how

So advantage to every take can. we we're going

Caitlin Dullanty

Okay. Bill, much. you very thank

Operator

John with we have And a from question of the ahead. do Please line Franzreb Sidoti. go

John Franzreb

How your a machine is curious guys. any morning side that business, the or the XXXX place better I'm Good Hi. of MC reopening wouldn't the reason on thoughts there you mix you XXXX. to have than change in that of the think in clothing about office hurt benefit XXXX?

Bill Higgins

certainly from remarks real opening that Clothing strong, at Machine that back. and as home offices comes downturn coming through has my of and we away-from-home have for from that would certainly enjoy the been The this back. marketplace, at-home that business reopening if I but would suffered the benefit market has the that mentioned revenues certainly, other longer-term we in been away heard Well

John Franzreb

EBITDA mix that we've our me to year-and-a It from little where bar Clothing. So the just half maybe see contributions that been for resetting starting kind to over seems past reset past wondering should just and the maybe only the good maybe bars. Machine that we quarter higher for five every those should contributions of we had think about lower be years -- in now the our changes going point the on MC? lower if then exceed I'm bit a margin

Bill Higgins

This bit I an try incredible just to caution and on is it economic and would I a it's things. environment little marketplace an early. predict

has -- through happened what this at look happened Just year.

So didn't we occur we effect that expected. a mixed have like

right effects are long-term up of we're lag start a kind out to turned actually belts well, and the and little when back a next expected quarter, run generation of trials mix now difficult in machines as but very to getting to belt side of than challenge is it's in into products difficult MC right Our consumed the we environment. when a and idled new of this We're commit to customers now. be this are still is technology between facilities on better watching that Trying trying

of just so going and and what would I this year, exactly I with lag crystal know think hard different wish any lets right the look a like a I do be next that but now. is in different So into is call little ball going cautious. mix effect a to to globally. I had It's don't I impact

for quarter two. patient be or I'd another think I So

next year see Let's what looks like.

Stephen Nolan

and the And margin like top of looks margins John, performance business in year, line next historic even outstanding the norms half this and first what repeating lower were certainly, irrespective a back in year by maybe the first certainly, of the Machine challenge. you've the they've somewhat in of the delivered year we that Clothing seen of been the half the here certainly year, we half delivered

half you year. where overall then on 'XXs margin, mid be on think just a margins the XX% as we high may half the the got first year tough to range good and Those next gross Even from particularly exchange top the benefited know. adjusted good XX% EBITDA rates was they first very to year. strong to of Just margin replicate. if year, in of the about we another as you it's mix It we had line

of going forward. careful rolling performance kind So sort I'd of margin about that be just

John Franzreb

question But going see I the was to we're reopen. guess schools next year, that Yeah.

not just a office would maybe beneficiary, but back that would margin that I to is see going assume be online. coming I'm are understanding We properly.

Stephen Nolan

some other of of which office same FX us the recovers. for as You certainly these some that get markets such this year, as factors benefit. school absorption mix if outsized such would get half year, It's rebounds, and certainly our just have impact first the absolutely may cost the which other benefited increased you impact if rate publication next fixed the revenue not in on and

So we're again, for not XXXX. guiding we do not yet

stepped said EBITDA. historical traditional suggesting Certainly, from So has you I'm its level specific use. we that before up any MC not of numbers have

but considering years to go If you wouldn't a subsequent ago, this or automatically might in to we three the to first back thought jump years. half of But say that it's four again we jump replicate I have plane. what certainly can higher year

Bill Higgins

to pricing, it's then a next I there think bit we get always about year to longer-term, there's think but is able if this And there little little I inflation. if go know to going bit it's have as -- is going pricing environment a into be we also don't any and to

that we affect go think in we So got to we that will margins. about think as

John Franzreb

Okay.

as wondering see year to back EC retention could been talk pace? that labor for of on maybe a things the Just if downtime. you far up as at a as coming a about in and how I'm quicker yourself us switching to that's online on you to problem a what's going start just lot come do ramping second,

Bill Higgins

on the we've comment we've composites and restarted QX, new down Yeah. venture shut I the business, that, all in software can methodical QX. been which how very was

very we people bringing how those how and a so progress on excellent back training. and As far on we're that's had started careful We've back occurred.

they bringing I we're like employees with our think extensive and back support feel good them in we as on. with shape training and come online So

So like I feel don't don't I that's an -- issue.

as question your If longer-term is back capacity up. comes

working of on though we of We're low we're rates continuing program. improving throughput. running efficiencies on to the the One and processes do things, production the very are improving even the on the in quality still still LEAP the that of so

with. got already plenty of work back to do So installed we've come capacity we've that things that up as

John Franzreb

Great. Bill. Thanks taking for my questions,

Operator

Patrick Baumann a [Operator go of do line from Please ahead. Instructions] Morgan. with we JP And have question the

Patrick Baumann

Hi.

mute. Sorry, I was on morning. Good

Bill Higgins

morning, Good Okay. Patrick.

Patrick Baumann

and coming Quickly the like LEAP maybe that to bit. taking margins beginning quarter. softer. reason the the bit why I'm missed a Is the it a to the there the for Thanks why it in were quarter you hurts question. in I guided call, case discussed little fourth Was that be is sorry my the mix was -- as strong AEC back in little mix, of that the why

sorry yourself. that? am Just curious said repeating I on I'm if on what you've

Stephen Nolan

an factors, it, really Yes. didn't Patrick. give we explanation I for And would Two point to.

So you respect. much didn't miss in that

profitability of we from long-term quarter. contract perspective, net million a the about adjustment during off, year-over-year a First of comparable level had favorable roughly to $X.X

know contributes benefit So your mix on the certainly that at and times margin a of only basis mentioned of I looking it due share a it benefit was the if you and get LEAP what year a is, you to our again it year-over-year you're certainly a so being quarter our that perspective a this this was smaller greater we comparison to a share as level from ago point $XX of also, was margin -- quarter. year-over-year almost X and million look revenue LEAP basis, much if where depends certainly revenue.

year go this close much lower you XX% half If margin, lower so only share. a it back discussed of and it to as is it revenue about was AIC's revenue, of ago, was it somewhat we a our whereas quarter

looking If two the on comparison a base. primary were you're those So things year-over-year

Patrick Baumann

Okay.

do which on favorable continually be I math you getting. contracted seem to the So if adjustments, contract the

in executing in non-recurring it's well closer that's adjust sure XX% It margin ballpark? on out but I I that the like quarter So anymore. to the if like seems third EBITDA you're that if contracts, suppose like not even I'm is

Stephen Nolan

Yeah, you we've look know as been targeting.

it'd with And looking those think say adjustment safe somewhere to margins XX% a said, we for in contracts, those. EBITDA If range. kind I we had few the those you of ago, now, in long-term favorable to we XX% and were absent or XX% are long-term be go EBITDA years say back let's -- have margins that XX% 'XXs, adjusted right low business beaten typically

off of far normalized So kind margin. EBITDA that your calculation is not

Patrick Baumann

next looking looks that's think be. we more you -- up I'm so what when mean, things, if I basically, being more would tomorrow. right kind were low about shouldn't year, would like the year you as think was ending talk forward Yeah, so we going we about but mid-XXs, this level normalize Yeah, it for. of 'XXs

Stephen Nolan

that numbers, terms mentioned of LEAP as but years will Yeah higher margin put LEAP future look downward as certainly only grows, we a in discussed we've that lower year. next revenue is some be as those year if on as pressure should business this in marginally

will factor not that year. So a be next significant

Patrick Baumann

to going And forward? in then ratios. we given How conversion those free think think sales reasonably flow how view flow it. the being of should Got CapEx this your any should is we I cash kind and solid normalize think change about the environment, year cash on CapEx about or

Stephen Nolan

consistent a AIC of step couple rather in in on a really where just slower with things clearly expected ramp-up than CapEx there. a ramp particularly has mode taken and a down just One, the mode we're the program So LEAP. significant recovery like we

collected will collect is revenue I of QX CapEx QX say step So we and because in be that remarks, of LEAP collected it certainly not fourth because of part frankly the a which lumpy a and early year XXXX. we mentioned and the lot of revenue but conversion. end invoice and the generated will at and is little early collect right was will will be as we down revenue, quarter in the majority my But voice a cash it, Safran as quite shipments. submit helps in not collect we as the in expect of the true-up of cashless program from we CapEx in the certainly fourth quarter, the QX I LEAP now in to the some we'll of

volume actual far So we early based through on Safran that collection the that is which at shipments certainly rate year. production out significant year year of on given cash production that's saw went shifts the means reduction of higher the out the next invoicing year artifact or that volume and of than we're the cash we this next that in a shift of because LEAP as volumes an year, into in the and

unusual any we anything So we overall QX business. normalize little into is QX, underlying for be of of cash given see shift it see but don't that, if conversion don't a that certainly you will of the which significantly impacting the out cash

the We flow expect to conversion foreseeable future. maintain cash for our strong free

Patrick Baumann

impact next an much the of of of I cash flow. how into $XX Last year? free did mean, shift is payments million year you about

Stephen Nolan

terms Yeah millions of will is it's of shift number exact certainly look of number to dollars XXXX. be determined, that out year double-digit into the a in this yet but

Patrick Baumann

it. Got

will line. helpful. I off ask That's Okay. others the question. yeah, jump Appreciate the let And the time. I'll

Stephen Nolan

Hey, thank you, Patrick.

Operator

the questions And no are further continue. at phone time it Instructions] [Operator this from there lines. does Please appear

Bill Higgins

end Thank thank management entire you, us for we the and wish International appreciate like New joining of Albany safe you. of you team, in Brad. all and the a everyone your Thank healthy to interest call. behalf We I'd on continued on the Year.

Operator

the at participation conferencing that And does conference the your please conclude regarding for your of AT&T recording time Albany conference ladies and International service. Thank and today. for for you gentlemen, And this reference using website. on today's details

may You now disconnect.

Albany International (AIN) 1 Nov 202020 Q3 Earnings call transcript