- Earnings call transcript Q3 2022

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 2022 Earnings Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. I'd now like to turn the conference over to your host, John Hobbs, Director of Investor Relations. ahead. go Please

John Hobbs

[ph] International’s Wallace morning, Welcome everyone. Thank quarter and XXXX Albany third conference to you, good call.

certain notice our issued in As a refer night, we release please and statements non-GAAP the our contain that press of We'll the on results. are also non-GAAP detailing will last reference forward-looking make text reminder for to and their those and measures our certain listing quarterly Today financial measures risks that call, statements uncertainties. is financial on regarding a associated the use GAAP. forward-looking this of call. Contained to our release, reconciliation press

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

XX-K. Additional details be including in can found our SEC our filings,

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

Bill Higgins

everyone Good our in then third you earnings cover results Today, more I'll welcome segments Thank strong comment third our pleased report quarter. business Stephen with detail. you, perspective another joining and executed performance quarter of our and Both strategy, to John. financial and our and business our our some call. well. thank on will morning We're for markets quarter on

QX Machine by Clothing revenue as we year, company grew that to the by revenues the constant reported and currency underlying ramp the driven reported while On line, top nearly X%. third grew XX% constant and programs. LEAP quarter XX% relatively helicopter on basis, flat CH-XXK were basis. at Composites last year-over-year total nearly grew an compared sales, XX% sales Engineered or currency a on third quarter engine

QX per Europe, and reported of forces per $X.XX segments hard achieved On pension higher supply overcome adjusted significant a China. of slowdown working the profitability, EPS in the that in detail. share COVID $X.XX than charge last more share a chain $X.XX EPS year. to was of per challenges, a GAAP bottom Adjusted in in strong operating share will settlement inflation, Steven both cover income EPS recessionary and significantly line, includes

cost solid sector disciplined neutral of a to our XX%. just currency a Clothing delivering great Machine gross great XXXX. supply Machine combination a under and of segment grew delivered another of factory quarter and Our Clothing quarter. margins sales line, Through X% stable compared execution, QX third On chain of Machine top adjusted management, did control, margins nearly XX% Clothing EBITDA job basis,

delivery to optimize lead and by commitments We and finally supply continued see supply disruptions starting long are hopeful and by chain sign customer improvement output. times We're in some to chain to that improving. production factory meet shortages a transportation our managing balancing freight;

Asia third front, Americas, On year-over-year clothing were basis, in demand held On the the a in currency well Europe. quarter. global paper up higher customer machine for sales the constant and

lockdowns despite head order quarter. was higher Our and Machine in COVID Ukraine we for QX in [ph] of as China, Clothing are healthy energy a Overall remained bookings steady the war demand aggravated solid effects continued and into the costs.

for in, us to year. good filling is backlog up finish Our the setting a

higher well. Safran top Sikorsky LEAP in are se Principal as program revenues growth quarter revenues excellent our Demand CH-XXK wins our engine another delivered segment Composite partnership from have growth this growth growth helicopter this our Engineered to driven line revenue year-over-year Our of on in and XX% contributors year. and program.

AEC line, of margins XX%. quarter bottom delivered On adjusted the EBITDA third

production chain great Clothing, are materials our teams Machine and meet doing to job supply customer hardware factory needs. flowing MC, and feed operations keeping with and As a

job great a do to for continue customers. We

our sheet We're product and advantage in growth. our in reliable new taking development that a pursuits composites to of number balance strong organic have new We from of underway and recognize our growing customers program interest new delivery. expertise invest

trajectories, good program portfolio defense are in the for solid our another to fourth up Looking our program setting quarter, us and quarter. lead

me demonstrated on comments Clothing segment. our our let in strategies business few Machine minutes each We've take business some So that make to is here a resilient.

despite Over input the month we've past three cost years, strong million by the $XX adjusted pressures and dollar the pandemic, trailing grown we've faced. XX EBITDA

Clothing is based a success strategy. term long Machine Our on well-executed

We product leader the are in Clothing Machine technology.

at these a providing superior an efficient global are positioned operate in value and new growth. markets. one on long at technology by the sustain us reliability most higher the machines, growth product is targeted customers Our machines development serve and sets up service optimum and markets for manufacturing downturn. tier the positioned tissue, best of packaging strategically and term scale, added which to We We production all

choice. Our partner customers the consider of us

Our belts help our reduce customers. the for overall cost of production

products mission leadership These in and the resulting economic during consumable. well demand. less demand cyclical condition, get Belts and strengths repeatable for critical particularly are consumable products. challenging Our replaced us recurring the our serve regularly

our pandemic our coming grounding to Boeing for AEC job looking a turning did Composites heels Now and content customers. on the XXXX, more in struck new Engineered XXXX, with XX MAX When strategy. team customers the of existing great in the

hypersonics, government the OEMs commercial we're diverse Martin is composites the in on successful and our that and seek Longer more in economic space defense from with engine, AEC programs. We Boeing, XD mostly areas composite us time insulate nearly applications, both rotorcraft. resilient cycle. gave breather XXXX most more the LEAP, work We wings, the and Between of government nature a and defense content the cost Safran new take new defense wing others, fuselage pandemic have new Today demonstrated new with better the pursuing engine. a and with and today, woven Sikorsky, work. LEAP fixed to jet term, on we're advanced apply leading and expertise. and was Lockheed to for in various technology, The XX% contract on won our plus opportunities slowdown

is base strategy leadership generation continue our customer to Our the to next aircraft bring our to composite and diversify development.

in of segments have place. So our sound business both operating and well are strategies

last customers. as a learning productive over well an ability do few great and levels ups remarkably the be perform to done the to We've how years. to job resiliency to continue have and employees at high and demonstrated Our company nimble, for downs a

balance sheet We fit which growth, used to and in have acquisition organic use strategy. new new and that rock continue to a pursuing prudently and customers invest materials and successfully winning and our we've people our solid developing

with that, So to I'll hand over Stephen? it Stephen.

Stephen Nolan

morning Thank you, everyone. Bill. Good to

shareholders the to was in this Before our that defined the We our the our note pension group contracts first with results, QX into the go benefit I of associated disclose XXXX XX-Q. with I in that our and late retirees. There US will significant plans. path go the of annuity in active as was we discuss liability I it a a and transaction. both charge and had of purchase for down publicly our smaller completed moment. and reported believe million action eliminate to intention will associated income We quarter, taxes million charge much prospective significant impact a on $XX.X This this impact right a income cash accounting our $XX.X GAAP

We associated have aid adjusted investors tax for EPS accounting the underlying effects our and adjusted our EBITDA in ongoing business. and charge excluded evaluating measures to

year. on business quarter the for first results the of I the will comment then and the talk outlook our the Moving about for for balance on,

for of translation tissue by year-over-year, much for the in net pulp up delivered revenue grades translation were sales effects, to the also the driven by growth compared cath non-recurring quarter. efforts growth of in $XXX.X Clothing, MCs on same composites third Publication platforms year-over-year translation and on publication caused fabrics In packaging, and app net this and by XX.X% currency deliveries. the to close timing effects, and modest associated sales engineered adjusting with transition offset in partially Machine XX.X%, by Engineered quarter. increases customer X.X% grades, with declines million, an of driven rose tooling quarter XX.X% net to of were grew currency year. driven after the increase million LEAP sales, effects, primarily for again the quarter by For sales XX% orders net by effort. the total and Adjusting engineering by adjusting in $XXX.X revenue CH-XX company remained the last latter currency

LEAP the similar this quarter, about program in generated the million second year's $XX ASC During quarter. to revenue

production XXXX. As of for we've four annual all LEAP past, across our production the plans quarters discussed call stable in fairly

Third overall growth quarter an comparable XX.X% decreased increase million, XX.X% of to period was net margin The mix the by AEC points in for from of gross the last segment. X% driven year. the sales, $XXX.X over company higher the gross by of from profit XXX basis effects the

the of as increases gross of Within sales slightly expenses reversals previously million by of one-time at some pricing the $X.X benefits net MC costs. was input increased were of segment, margin offset and up XX.X% recognized

long a net term larger gross and the increased margin For mix XX.X% driven estimated profitability higher the segment, of changes from cost the sales fixed from in effects. benefit by absorption, of XX.X% contracts, AEC to

favorable long $X.X net profitability this of the in During term the quarter, to only year. favorable net million compared change last change a same the recognized in estimated about contracts $XXX,XXX quarter about we of of

effective quarter for of to in was integration, over been higher Clothing AEC recognition discreet than expense year. the compared was year to compared selling, The primarily offset from in were with $XX.X $XX driven the of last $X.XX million million partially of other an Net the attributable quarter. this the XX.X% would in and million of and XX.X% We favorable expense, effective in of $XX of operating and last under operating year's quarter. earnings reduction associated up this sales. to negative exchange Third AEC our of percentage $XX.X slightly benefit, year this aviation and due flat previously Machine currency tax was XX% pension by partially the higher and R&D jobs down effects higher net pension currency quarter caused the rose tax revaluations driven the $XX.X to this from charge favorable from by adjusting rate $XX.X most $XX.X lower million income. by net on Clothing of impact over effective The operating pension rate the year. of exchange for the benefit foreign same Adjusted company compared income $XX.X charge, XX% by on profit, net FTGNR have offset and settlement per comprehensive the primarily by and or included year adjustments sales gross was quarter, year. to year. last partially XX.X%, tax million prior $X tax and $XX.X million earnings million FTGNR the for offset adjusted share last income last low year's by period the to the $X.XX rates other recent impacts, the general reduction income tax results, charge, were million quarter $XX.X expense million this offset driven last grant this million the for last losses, CirComp impact was foreign of from a or a by income $X.X In same up compared sales, tax quarter caused Absent quarter quarter, million was or and tax expense. unusual the $XX.X million, the charge operating quarter's income XX.X% resulted $XX.X or quarter selling in of to quarter. by almost million, this of the profit roughly sales year pre-tax last and combination current resulted down lower revaluation pension company impact Total share research gains to the compared EBITDA rate in driven expense. million, investments the by million. XX.X% the foreign GAAP expenses, income rate. also associated million, higher the expenses of the year. Machine with by acquisition in XX.X% by the restructuring protection other $X.XX by million by this pension After adjusted in $X.XX an quarter reported technical, EBITDA net in $XX.X settlement the XX.X% quarter increased FTGNR benefit the quarter and same prior in income to expenses manufacturing per from income adjusted year $X.X EBITDA prior the MC, as net increased XX.X% partially rose expense sales was $XX.X

quarter the down of Turning to of end position, debt the long recent of debt consists which the second at our or maturities end term debt was from most our reported of on amounts sheet total term million current at balance long debt, $XXX $XXX as million quarter. the

fell quarter. by during million also $XX the cash However,

of earlier, also entailed mentioned the the about in CH-XXK in a cash annuity group to pension program. As we use of purchase invest $XX of continue and million, I

look of a for we Machine remains As still XXXX, forward environment. balance Clothing challenging to outlook segment the strong the the in

Bill up last quarter As for the almost sales year. X% mentioned, quarter constant the were same currency over

lower at $X.XX below the parity over of million of period nominal currency compared the average full an the US Looking even been today. last dollar year year, rate expected reduced is Euro results now $X, rate year revenues. an impact has full as just over the and which in expect We has average rate in same exchange for reported $XX year-to-date, of obviously to $X.XX terms to

revenues pricing for in date quarters were year currency modestly on the while actions by constant demand a some has higher has of offset than first Some three increased by last this of been to products, resulting some that year been in basis. offset

the any demand are reduction there of in growing in crisis concerns product. some our in Europe, risk contraction economic for ongoing global of energy not still the light While demand seen about that the and have we of sustainability

a quarter higher of including the year In last quarter on X% certain pricing same to benefit currency third the up constant year. the products, than orders fact, compared on were basis, of more in this

down revenues now the $XXX are costs, delivered $XXX and the the narrowing Machine costs rate continuing the For prior somewhat we to be pricing in to year. that rise Euro last range year, material to million by compared logistics see to guidance of range revenue in million. year Clothing, highs. the although full our From to revenue demand full offset declined $XXX come from for effectively resulting million are margin Therefore, million compared by in we to raw million will flat increased exchange expect $XXX the the a have $XXX perspective we significantly for a

pressure last with million, downside That While with some said, consistent was likely will the XXX bottom costs. inflation the see line for quarter from strong quarter Therefore, reported of by very points to we quarter, expected the not by this expected end as in resulting absent see time to about the one margins to still updated currency compression range we $XXX our additional year, gross lead XX.X% was results in gross are risk higher sequential EBITDA basis in caused a margin margin in $X expect and volume Combined we We segment raising million. do our lower fourth fourth year-over-year those effects, input prior the same the in $XXX the we'd with to benefits adjusted much last margin as down new guidance. range million of MC when the the guidance. guidance guidance quarter.

progressing adjusted although $XXX EBITDA million profitability given range $XX the $XXX range less revenues of maintaining with we we Turning about as last now for as issued $XXX $XX our range to Composites, are to expect years guidance when concerned to and previous issued to range. range is year in are upper of guidance, the From for million up between much of largely the risk to million million Overall, raising Engineered quarter end a deliver be $XXX that line we Therefore, from progressing in expected very we we guidance XXXX. and expected, of AEC although the we downside a strong are expectations. previously segment we a largely million. the closer between million, perspective, currently

million, and up billion, $XXX including of increase guidance $X.XX XX% $XX performance, income to guidance, to between updating XX% also $X.XX, share from our increased $X.XX for prior earnings of $X.XX billion, of and of $XX expenditure reduced and guidance and earnings unchanged rate between between ranges from $X.XX prior prior per from XX%, $X.XX million from XX% are range of to down $XX from quarter million from guidance prior to in adjusted to amortization revenue GAAP issued the guidance, from $XXX per year of previously increased of million and of and unchanged prior was million and both $XXX million $X.XX, Returning $XX company of EBITDA is segments. million capital it million. $XXX aAdjusted depreciation We the guidance level million $X.XX prior $X.XX another $X.XX $XXX tax effective for million guidance between to to to between present, of share $XXX strong

believe the and We well may We quarters. the of is weather in in in positioned pleased globally it of business. with clothing conditions see profitability terms are very that the both we machine and the Europe sales resiliency macroeconomic coming to

the place segment, for position thank the growth to narrow segments programs I they And strategy pleased in to like the performance also believe that, to its for company. and are validating the hard the body, right in that for its the our Composite Engineered We continue towards both top questions. and key very employees I work Luis? like would business. with for would We is open defense to that our programs be line markets. results indexed of with on call commercial, deliver heavily

Operator

question line the Please Baird. of ahead. from coming [Operator from is Peter Arment go Our instructions] first

Peter Arment

congratulations Yeah, on good the and morning Bill, Steve results. Bill, John.

lower the are just outlook. and average when headwinds Just about the guidance, three of a inflation kind follow and that have of inputs MC just the just very margin the It kind think we first would up seems well on of here quarters your kind of range. and you some the XX% like managing of with at margins wondering, you

if the your of range. be below XX% a end for at the implies that in lower quarter would if MC your think guidance EBITDA the margin fourth you you I that --

to wanted how about Just that. thinking understand you're Thanks.

Bill Higgins

Peter. chain to thanks are but we've and, supply the over, done we're -- XXXX. job like Yeah, we done challenges I team's remarkable people Yeah, -- them a think think managing still

working are closely the very teams supply to factory planning Our across adjust. purchasing,

want are labors bit a quarter. of the pressure as good and the absorption gone expecting to that we labor don’t So know fourth little with you with effects to job that? and I we inflation bit are done that We've really the and a add seeing, price cost increase on wages in little far. of Stephen, we offsetting costs expecting so to

Stephen Nolan

look, Yeah, margin year. one a gross this was the last basis basis constant benefits, points mentioned we about quarter to Peter, margin as currency some time without on down XXX

As we've because said, product is the using through year that that was we're that as increases quarter inflation both fabricated quarter more expensive material. by consuming and increasing also

So, have the also for compression quarter. risk some we the in downside I somewhat fourth a expect we'd in larger some mentioned business margin quarter. that fourth in allowance

low Our job risks job through look, not margin. so is of to end that I as manage and those exist our risks don't they is them. to the it be say, the to is prudent to materialize because at But we think give manage and those range

we're range, guides the certainly But it. not there's horizon current risk environment. in within below far So, on stay the we confident, can the some always

Peter Arment

through headwinds? of next these of it as into up kind thanks. more expect year follow and would how that the Can get see pricing update just to your, just on kind through? as you just and rolls that offset to your try Is of a to of we flow some us some we Okay, Stephen, pricing, to

Stephen Nolan

talked we and before, contracts about we have two, years as terms three and our customers. with Yeah, with various plus one,

that well. trying as and contracts, come managing price to contracts, obviously don't them we get those customers we're as those So to we those have we're with

So keep working that. we'll

just evolve going think happen time. to I over overnight. not it'll It's

Bill Higgins

contract to as large seen and to have mentioned, of see sticky pricing requires benefit some continuation ICE quarter As our benefit a more slugs I Group, But we we pricing signing. to expect fourth of anniversary an that the in mentioned date of from quarter. a is Bill

Stephen Nolan

we've from we're increases suppliers from Yeah, price price the with. significant our input side, seen certainly our on working increase suppliers

Peter Arment

Appreciate Thanks guys. the color.

Operator

ahead. The Securities. from you. is Please go from question Ciarmoli Truist next Thank Michael

Michael Ciarmoli

board the big guidance was, where stay Nice are looks Peter fourth step up there guys. Is and little the pretty versus been to or the maybe results cadence a fourth of the the pretty you've morning why the down weak? the drivers there the just of bit up across quarter quarter. like May results. just in a looks implied on more frame putting kind quarter good third trying more Hey behind seasonality sort guidance? on to what It

Bill Higgins

in factors So, look, there are a there. couple of

Looking It's brings nominal step see in quarter going we're this. at impact drop euro prior the saw the obviously more significant now margin than with down. of the line, below below to just terms. the lower in parity. in obviously dollar from average top we significant quarters. That it There's to revenue fourth week through That's six

gives Secondly, go holiday o our those say quarter, there delicate quarter. more pause and by period, by a effects seasonal, always are that issues partially difficult. that factor the on, when becomes partially some to the and into driven other The end mix It's driven just of there's us Shipping that dance currency try effects you a business. globally around fourth fourth we

us well quarter just in we -- expect benefited to onetime see of into to significantly year, a significantly repeat which so it's uncommon of which in slip for third for of revenue some I the happening the certainly cause we to and it. impact are we expect we first in $X.X potentially as quarter. I so there's as end the that than to So fourth see And of the benefit quarter and in Machine this third lower that don't to of Clothing to can quarter fourth high $X.X fourth have mentioned, again Peter, that from quarter mentioned through had the rise rising finally, a as accrual reversals, the quarter and million certainly impact saw prior and million not input we continued quarter expect costs and in drop margins can if fourth deliveries more allowance starting

Michael Ciarmoli

about to the headwinds, just to extrapolate going 'XX, but and totally should you're probably and follow be we logistics, not guess of I thinking these even but AEC, the recent -- guess up going some and headwind I it you're this, you've nice next and into to but really does not on to maybe cost, I Or what that easing quarters trends would can same too, the FX 'XX CH-XXK, going imagine should is give to program the 'XX? the Got seeing, in be these tying done grow that and year? here a in revenues

Bill Higgins

Yeah, we the inflationary first question, going or the that I been we input improve. They've we're yes, looking seen first hasn't part guess of costs. up, your that is still see environment to question, expect at haven't --

CH-XXK So and the already as into for we're a on be with new and we up work. We tail, the line. this some go CH-XXK year, planning year, production work will we, building additional that sponsors next do building we're vertical we

program. one will in look different little So externally, range recognize year revenue. recent year. picture in we certainly follow pretty had on this this looking a who great is million a app there's program will grow we're two production grow on if will we next that it's $XX is be will be up, be that year, it to more so on the next back the revenue. see program Obviously year, will tooling Those the to add The non-reoccurring and we the and tooling production part growing a it's as in in legacy large but also and it legacy this next expense. last year machines than we at that year parts, go a recognize revenue but XXK, talk and year and first about and next a -- I production. about in it, chunk million, XXK but year, this just going of expense the $XX about grow work we transition, now $XX to the continuing this away time constituent growth transition, volume but most in which the It's work million which Mike, total goes so year, start Yeah, -- taken

production Last, transition, close million now parts the about growing a certainly we'll the when year away. So shoot we we net, is We to to for getting so where for look spoke is we be thought that expect on net, and both you next quarter, somewhere going $XXX last revenue said, would programs year. north look, growth the non-recurring of this $XXX on We're sorry, see go but not will $XXX app next next we will year. in of will hit somewhat total. $XXX More I'm XXK $XXX to XXK or million in year. year million, down number offset on million which going year, million That other that.

got XXK year. great program. production is this still just The slug So is one revenue of underlying a growing. time We've this

from On machine the clothing next Bill question to ask the pricing first just what said, of a benefit side. we will year see on more

should on fourth and take, XXXX. just four based that you our quarter, guidance fourth the you drag that of through for kind the don't I assume quarter think margins quarters of So the

Michael Ciarmoli

Okay.

and Just outta I'll the more get follow up one way.

tailwind lot the getting there operating a rising a is Are to European or lot negating wages, income else those moving income energy, savings? significant on Just on, you cost you've mentioned of a footprint, you around or European everything operating OpEx any operations. of with parts potential FX, got up

Bill Higgins

Machine Well, the is just overall and down. obviously, if down to coming because but the mentioned Euro, Clothing I FTGNR of in think, top line weakness the I was aggregate, look, of

all the come euro if down. may down, weaker, of the is expenses comes line top the So,

even a it's the transactional like today revenues lower if is, translation -- of if basis, but things, it's and losing On a million margins, not $XXX operating of ago worth still year on same I'm revenue. only losing a I'm So $XX you basis. a revenues lower because I million generate the

getting coming So huge are costs is to not a operating than from sure down revenue I I'm that by because down. our coming tailwind the we're more profit

depressing. mentioned In of those are are is are clearly terms which the there you further all energy and impacts other in factors other increasing of Europe, those a concern

or tailwind now. way It view is So a exacerbated earnings. certainly is increased particularly headwind clearly in any in Europe -- not energy by headwind. right I it's the costs But would a weak euro that is

Michael Ciarmoli

Okay, perfect. in queue. Thanks a back lot guys. jump the I'll

Operator

you. Thank go Alembic next Please Skibitski Pete the from question Global. from And ahead. is

Pete Skibitski

morning good guys. Hey, Nice quarter.

margin Let of is with understanding me for that where start guys, clear, the can a it's XXX you have at delivering Boeing but to a now they reset you. on kind and you're lot strong of again inventory us program

So ahead now trying what of figure ramp I'm they're aircraft again? you kind the to just that out see delivering

Bill Higgins

again anything quarter. didn't the delivering Yeah, I we I in think We basically production deliver were wish our still idle.

that's the it way So now. sits in right

until word from it's get where sit. we Boeing, further to So that's going

Stephen Nolan

nine think, asked I six rebound ago, months XXX ago, you'd certainly we if in in nice XXXX. some would've expected months Pete, us Yeah,

production the to soon. see still destocking seen or rebound to would've six and certainly we don't just get It's ago just enough restart XXXX, which anytime production we think the nine meaningful is, While months a months inventory. we rate same get their hope to really not way fast to up Boeing I in running expect at

Pete Skibitski

I think you've maybe, I me you're AAC at this I And I up big from in down a held CH-XX. I Okay. with margin think that. of part I ramp the we're huge XXX but that, get of in, be for maybe I'm a XXXX seen ramp points up right? a is flattish in AAC the better That's maybe know much to maybe hearing wanted again asked year, and year, maybe to well, LEAP and margins that a CH-XX a maybe, tail next feel pretty not you LEAP of despite I'm will a kind couple guessing the EBITDA LEAP -- margins a huge just, have in for because helpful. outlook all

So fair? Or next margins maybe can pull flattish a, kind that AEC of for that there? there don't I a kind year. outlook for know, of Is for strings are other on you

Bill Higgins

one is benefits year we'll of revenue. of year Look, next this AEC, year while this in the generating compared lot get a to CH-XXK

it. does mentioned, plant while there's I absorb absorbs buying of labor tooling, in As it a it tooling. making chunk no That is that third revenue party. a not involved because it from We're overhead SG&A,

the out tooling. in amount obviously, small terms a We labor, have scoping of of

absorbs doesn't some engineering overhead, but it plant absorb So it overhead.

less revenue margin portion will manufacturing revenue next beneficial. manufacturing tooling increased revenue, so A will replaced That year. the contribution And from the it which from margin by revenue. than away is contribution be goes of be tooling that

AEC position tailwinds, next So guiding now in next year. some there right not We're we're margin to obviously are where year. certainly

So going it's to side I'm to some tailwinds or -- but are it's whether comment up on that certainly not flat margin. there or sideways,

Stephen Nolan

The final go one. into question year, to of good operating about very weeks. plan next a our We're for timing reviews couple next is annual just your

Pete Skibitski

chasm CH-XX there. on one me variants of Okay. massive we're that's no, not AEC, I different expand. that. appreciate helpful and a guys it's I think on Chasm hearing but I looking for a potentially Yeah, for Last that decent program that [ph], and one, guys know maybe in color you at program they're could

over so? guys I'm for signals so So or feel and a wondering what you you the have to year for greater guys? mad just for just means that you if, seeing I'm next you Are if wondering

Bill Higgins

I pleased program I is pretty the we're really with but outlook like good it. and in We're Chasm comment to feel want don't next pretty year, for shape what on on the

Stephen Nolan

good have there. very we Yeah. the Yeah, customer a relationship with

to expect and the that matures us mature so, and And along develops, I customer. as with develop program

Pete Skibitski

Okay.

to Thanks update good. Sounds forward hearing next the Look quarter. guys.

Operator

go from is from Khanna question next ahead. The Gautam Cowen. Please

Gautam Khanna

who Could subcontract guys? customers on the are XXX it's Obviously morning. for remind us you good the you which manufacturers? but Boeing, Yes,

Bill Higgins

through Heavy and Yeah, So customers, yeah, go KHI. two so Kawasaki intermediary we Spirit

Gautam Khanna

production? would when restart Okay. And you they haven't provided visibility on

Bill Higgins

of. Not that I know

Gautam Khanna

program, Okay. and expectations production pinch next was deliveries for is are end of continuing your saw point what ramp to like of of on there we curious, your LEAP today. deliveries? year's on kind LEAP in terms the in I terms any GE numbers the

Bill Higgins

the point? don't in capacity pinch this mean second continued standpoint, any You over the we of delays? ramp and question? any ramping before have to up question? our part your from productivity up of we've back our we XXXX, improve Does capacity plenty answer said in What was, and built No, we we've We've time that capacity have Any, pinch when efficiency here. to a points been the production.

Gautam Khanna

That the was part. first

second do be The next LEAP deliveries expect you part to what year? is

Bill Higgins

-- year's haven't plan we don't we yet. Yeah, next have

load factory. to we the the it, as level really this set So speculate to and year, on did but try year we we whole can't tend

So with couple go discussion over Saffron we'll through months. that the next

Gautam Khanna

little inventory Clothing, what's just that? about still and running bit channel of to your they you higher And talk or kind any could a buffer you sales if close Okay. see are Machine access from at feedback with the who folks are

Bill Higgins

packaging the our be signs market. going of we the into we're quarter. some demand the around see there's some the which of we quarter flatness kind and being third watching, out Yeah, we end There's plays boxes end some been the out have world of a world the box quarter, see of of the into inventory watching few fourth in We're good, slowdowns Christmas Demand could demand year. and the the -- normal, past it in we around the the and But excess couple some as gone and don't grades see, that don't saw we're a we've noise. how watching as orders go for season, coming channel.

that watching we're far, now so So so but right good.

Gautam Khanna

just the are point? for at largest this guys? where AEC, growth opportunities platforms And at content you Which lastly,

Bill Higgins

growth we, Force. so point There's still for there's look, So as Leap in from CH-XXK forward, rate full we growth still get once production. this

the content. production on other are on we're will that rebound we're will fantastic next meet that's rate continue transition, recovers. for several haven't that once great It that platform. program start-up grow growth point smaller very that are its on to some for are prior is I you demand in a several opportunities the are the that out publicly. That be low even know, ultimately to XXX date some nice years. for programs there it going that As nice rate we over in to I that with the and when app aside could about will is growth. bring talked you low production initial happen, wish give And the it that There Leaving at overall. moment, but fact to initial program we're on It's mode happy it happen. still happy and we're aircraft, a still a

Gautam Khanna

Right. terms growth, can are content terms there in -- there any of But in you of that's you're of but growth, terms in talk things unit about. that

Bill Higgins

question. your Sorry, I misunderstood

there our there. commercial type of out type is programs rotor look, fairly now, Certainly, smaller defense you both like, and if lot other variety a a opportunities are pipeline craft programs opportunities Sorry. in of there several, are out full programs. right the term, miss and near

publicly this specific can in about stage. we really of nothing at So opportunities terms talk

Stephen Nolan

Yeah, about a would pursuit us. it I think as for opportunity

aircraft with companies, closely the talk what Boeing. section back come them with don't That's go publicly. that a we're our look and we We won were new you that'll at work or about the really couple around but supplier, the Sikorsky, XXX more If publicly I the very building on transition Boeing FXX, with we're time eventually with with as up in reliable of We so continue We something. that slowed and we're them. that, existing these we we choice. with content won about content content a is big we'll we're don't But over, more the well. win won talk more the pandemic but OEMs with of down, on that the part others partner App demonstrated know, we've being one now program. success, And working There's frames. more that work the XXX theme numbers pursuing a

Gautam Khanna

you, Thank guys.

Operator

question And we instructions] go Ciarmoli. Michael ahead. a have follow-up for [Operator Please

Michael Ciarmoli

the up. guys, thanks for follow Hey taking

guys Just about there. is how or you're as you had thinking EAC doable still that? at the planning landscape period that through going out 'XX, for looking looking now you're here, revenue XXX guys with $XXX out, but, -- million that the Is in that LEAP, are you

Bill Higgins

going three our Look, the months ago out number every early that puts ago, there there one but mentioned, out XXXX, are negative that Obviously I is we on and we've on guidance not as put when calls quarter. I'm from of to nine XXX. I first months look, provide months number biggest guess. takes think I six or Yeah, prior seen

and takes have recover six same are update you Certainly now some moved we other or puts things solid there way. As XXXX guidance a results. in -- AEC But we're which the suggests us we great we issue are to time. I we'll three to right extent But there this at have with to expect mentioned, months will prepared everything that to net, nine Look that say on and expected months the stage. that not wouldn't I net, net, would've ago.

Operator

are at questions. this there And time, no you. Thank further

Bill Higgins

today. Luis. us you call you, Thank everyone for on Thank the joining

and in have always, day. you continued As a Albany interest your good we Thank International. appreciate

Operator

you you ladies for conference gentlemen, participation and for moment, And and you. Thank now and AT&T for Thank may conclude using disconnect. our event today. that does please. your conference One

Albany International (AIN) 25 Oct 222022 Q3 Earnings call transcript