Albany International (AIN)

John Hobbs Director of Investor Relations
Bill Higgins President & Chief Executive Officer
Stephen Nolan Chief Financial Officer & Treasurer
Eric Ruden Baird
Michael Ciarmoli Truist Securities
Pete Skibitski Alembic Global
Gautam Khanna Cowen
Call transcript
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00:05 Ladies and gentlemen, thank you for standing by, and welcome to the Albany International Third Quarter Earnings Call. At this time, all parties are in a listen-only mode.

We will conduct a question-and-answer session later. Instructions will be given at that time. [Operator Instructions] And as a reminder, this conference is being recorded. like of the Investor now our over would Director host, Relations, I to call turn to XX:XX Mr. John Hobbs. Please go ahead, sir.

John Hobbs

Brad, quarter conference you, Albany Thank and everyone. morning, XX:XX Welcome International's third twenty call. one twenty good to

and As apply non-GAAP quarterly refer issued of our associated please financial the the we statements this their to pandemic on regarding conference effects Contained results. results. the to are number call, for financial our in our the statements among a operations, of detailing is make press and our and our remarks those forward-looking our GAAP. a those notice reminder, Today, to afternoon on potential we same which morning. XX:XX call, risks the listening purposes contain serve the and yesterday measures a financial release certain the use statements of of reconciliation this text forward-looking COVID-XX that markets that verbal will uncertainties, are For

For as I'll as Chief to our including one, GAAP a XX:XX this most who filings, fifth, will of Now, Officer, Executive well of twenty twenty their Higgins, our XX-K. Bill? remarks. turn non-GAAP our call to over to discussion, call use comparable reconciliation and we October may the measures please our earnings in refer twenty SEC both release including measures, Bill full President provide a opening

Bill Higgins

fronts partnerships. continue our delivery another everyone. quarter to we morning quality, job welcome call. our Good and Thank John. executed pleased quarter you, service on technology our and We customers great a well of We're good for Thank report many for you earnings in XX:XX do third results. to and joining

world. zero dollars in the and plants thirty GAAP of dollars, hard ten year. increase QX work have XX:XX supply performance EPS of most challenges on eight overcome around we an record in I'm something our million two in three two XX/X an pleased and supplied, factory and all our company, revenue, on our material at basis Our five delivered level been from logistics nine percent we of that working shortages point point safety, a nearly teams of last to keep achieved adjusted teams As unprecedented chain dollars a zero hundred to

on as Our Machine the to year, QX Clothing growth upturn last percent compared free and Engineered toward sales in top-line delivered excellent seven and segment XX:XX percent we profitability continues by work cylinders fire eleven of grew all flow nearly performed commercial well with aerospace. generation. Composites and cash to

was profitability we of six forty dollars Our the solid cash adjusted flow EBITDA our margins twenty strong And with of quarter. gross forty percent, and percent continued in free of margins generation over margins operating million nineteen percent.

to a healthy gradual debt forward and look low commercial We sheet and solid have and in recovery performance Machine balance continuing from our we segment Clothing aerospace.

up improving trends for MAX production demand our we're demand. As trends. aircraft favorable before planning and commercial segment, take gradually hiring narrow-body Engineered to we footprint aerospace wide-body long-term global employees XXX growth. these Albany's Composites we in Airbus with by and ramp Boeing positions, market last of advantage quarter, mentioned development XX:XX and secular product expect In are and improve Consequently, AXXXneo driven lead

XX:XX coordinating as travel the We in production internationally. to reopen are international and France have begun bookings positive LEAP expand US, We SAFRAN facilities in with travel three our borders signs in to people see Mexico. and

XX:XX Boeing slow as in to and our to frames for as platforms, we well F-XX don't there's JASSM international production Joint inventory teams XXX our wide-body been programs travel programs. expect such Martin's Strike any well. Our Although Fighter We're are still on perform Sikorsky demand, fortunate and system near-term executing in continue recover. businesses composite missile line pickup CH-XXK and on the Lockheed AEC our to military helicopter, excellent be is

continue take good to intense advantage addition new composites components in design, composites. closely working customers the and our are applications. providing engine our vehicles high of and our XX:XX with This our advanced to an development composite defense continued high SAFRAN, collaboration and with new woven for to apply continued protection, composite applications robustness programs also of building applications. segment the to in proprietary technology XD with our technology program thermal advanced partner a exceptionally example woven composites structural the of proven Spirit at ability woven both XX:XX working technology well. Clothing our Machine commercialization XX:XX During volumes. and we XD most perform environment Tomorrow of Wing pursuit applications at, on advanced with to Airbus partners temperature hypersonic composite we collaboration and and In We in Our commercial applications teams of our XD AeroSystems development on and wing of announced the our is other industrialize quarter,

XX:XX corrugators, and school. decline averages distortions publication of the a on back as effect the in resilient are develop efficiency, customers sales tissue We durability, of Even engineers and with caused this value below better our customers and and the performance work are for pause in technical MC and nonwovens long-term This and Our the by was overall, in was saw belt for expertise service In of materials service quarter machine generation working longer-term to product next in students quarter, have products. been Demand closely offices Tissue utilization innovation. teams key markets in improved operational packaging in end markets, lines. particularly demand demand the should for has and markets is pandemic's building improve go producers in workers products good as although writing in and paper quarter secular tissue likely strong grades XX:XX up, new markets. and other strong mixed Americas. and printing to through away-from-home flat demand all end paper. and held the is in MC's back

seeing price in significant on are and materials inflation wages. logistics raw various challenges We

in leadership the former to So we the point outstanding, costs. general, more XX:XX secure Class Class materials and employees. inflationary through today, an we The been savings, remaining pressures two three shares done transaction with our productivity we able operations effectively a a thirty all chain Regarding closer In XX:XX in XX:XX are mentioned to may on two which to priority our operations structure is management to third In thousand only company to balance as far, different, teams common by less there hundred me anything, As offering million and shares A common run share B created we than capital use stock inflationary of to our following outstanding shareholders. are allocation, converted governance past, make strategy these conventional governance one held corporate during capital class stock the secondary of Stephen. single-class comments of conditions the in two two their organic Board than anytime for can Family's quarter. turning disposal. options, increases program, early need in over before excellent share Class where of August, that on supply allocation time our Directors then for Standish moved Let Adding moderate enable hundred They've alternatives XX:XX A allocation have the XX:XX strive this dollar both segments. our shares as expanding single our abating and we Albany's set result, a more call to million has value to have to technology If market soon. the and don't growth but be our see few and nearly repurchase of cost build for we of fit offset grew challenging authorized job. add us acquisitions a the ownership customers, investments, stock. positions the the a structure few first our capital at sheet that company

We look an quarter. value summary, a creation XX:XX we're both acquisitions to advance and price we and inorganic investment focused had fair position from and continue In that organic good on another market in our technology for perspective.

we are are call XX:XX technology with detail more Stephen? with on trends for that, executing financials. push to our secular over continue the in hand to I'll businesses envelope products new the favorable. segments, well, and Stephen So in markets Our end in both development our our

Stephen Nolan

first Composites' All comparable nine declines for in results During the in XX:XX of quarter, and were year-over-year effects, same sales grew good the also net Bill, the of for outlook percent, million twenty Thank growth point the XX:XX currency dollars, quarter increase fabrics the and XX:XX about up dollars million from year, eight to the six two in an in program CH-XXK, XX:XX then percent nine total LEAP to compared adjusting Machine hundred XXX six were translation by generated In four increase up to XX:XX two ASC on million again on last by last net delivered about quarters million grades sales on seven you, product the balance currency for partially sales and the expected revenue, quarter platforms. and of percent company sales morning net primarily twelve comment offset for driven packaging translation led about adjusting three percent of third For the point year. everyone. quarter contributed by hundred five the will third by effects and by LEAP dollars quarter, point major talk net F-XX after net grades the year. dollars nine business point eight of year-over-year first I and engineered point for sales. currency year-over-year. rose but the Adjusting for year. nine this effects, Clothing, the quarter. and Engineered two the our the to translation

reduction We of in inventory finished are with pleased the goods. LEAP-XB our

of to recent level not shipsets to by and engine Given the would reduced thirty the that rates hundred hand. During have engine inventory hundred on consumption shipsets, that over engine that below on drop one program, XX:XX current inventory the forty about inventory plan about we shipsets. most we quarter, down one

the light inventory of return with two. production normal on inventory can I'm to destocking. par terms toward hope I all. a current looking earnings XX:XX rates when at of the LEAP-XA more have end twenty discuss LEAP-XB on to of at call for LEAP-XB in early we production So level the in no forward tunnel We an twenty see to the longer

we have there is so the of However, of XXX concern which inventory twenty rates. destocking at MAX its around lack build some with twenty finished Boeing is two some still aircraft, do rate clarity

same the have under slightly down program, call. you from last XX:XX almost dollars for dollars from on Also hopefully quarter generated but insight the million the second during better the will fourth nine three down million XXX quarter, in on of We our year. we quarter revenue quarter,

point profit gross decreased hundred quarter ninety five and company Third was gross sixty basis one an comparable from million from Within increase two last five point points flat of year. dollars, percent over to percent The period of at percent one the two margin margin for net point the thirty XX:XX the one forty overall by gross MC segment, of sales. sales. five nine fifty was net percent

As input the rising and impact offset absorption the changes year-over-year improved by was from of costs. benefit foreign currency

For sharing from F-XX and a of five results. grant received mix gross XXX the the estimated in lower Manufacturing of smaller change due quarter. changes customer by point of Protection declined The point grant profitability sixteen impact benefit in million with margin a six segment, fixed of Jobs portion and the percent corporate twenty cost revenues to net appears point dollars during from of contracts, percent the absorption and Aviation portion program sales one XX:XX our the one of the impact caused to this in the the long-term AEC the lower base, eight a

is with base profitability While a grant the results. segment of by caused reduced reported in the portion the sharing our customer

seven XX:XX same quarter, a were and twenty three general net about five dollars about eight the favorable change and point point year. same current contracts from the we six in percent due two XX:XX income by offset quarter point quarter, income AEC nine a million point point of tax estimated million generation Net long-term compares the by nine million income of quarter for by currency one this expenses in zero The last the one compared point reported under rose XX:XX primarily a dollars a and fell of profit The attributable technical, higher and last slightly gross percent down other four million with six rate. company in operating twenty share quarter XX:XX by over point the forty up of sales During income expense, four nine to of higher forty favorable was point in by the the from less the seven STG&R expense, compared expense foreign indirect million million twenty to Total two this in and share year dollars dollars dollars was by quarter was quarter, dollars million million primarily five higher the down percentage profitability expense. rate recognized R&D travel point dollars, selling, year. incurred zero two last operating while over percent, to last four nine These million discrete percent year change research dollars as quarter operating of from caused the to Earnings point this this was income and to was quarter, increase lower dollars true-up point compared Third point of for while to operating net income foreign last for dollars, million higher million quarter three offset to rates and also revaluation AEC's income loss nine in the taxes five Machine a revaluation twenty gross tax this dollars lower four this higher a but interest more currency partially higher gain twenty profit, over lower caused from tax restructuring prior twenty were nine an expenses. net point profits seven global were year adjustments. favorable expense a a by caused dollars, forty than eight four dollars increase same and dollars per year. thirty eight foreign expense Clothing the partially million profit quarter higher prior quarter. up this million in year. in were of by year. We in XX:XX we jurisdiction. The point jurisdictions in driven tax higher in point the quarter company thirty eight dollars, our nine rate and by STG&R higher offset quarter, by was

restructuring impact of we currency and with In typically make acquisition cover to integration. normal expenses associated addition CirComp revaluation the adjustments, to gains non-GAAP the foreign the losses, and expenses and

debt, adjusting of the is which adjusted four as recent sixty Turning two of six at EBITDA current last percent consists million steady to dollars out as to or Total last XX:XX adjustments, from our six net point the point point Aviation last position. of hundred dollars dollars do this fifty three nineteen net point net six nine for nine reported two also five balance debt on two down dollars six Machine seven million point long-term point up point share impact Adjusted fifty adjusted eight sixteen thirty amounts from the quarter sales, long-term compared the six of and point quarter by are dollars. of year. year's XX:XX EBITDA zero million million or or net to prior we was two sheet dollars these eight eight sales, Jobs AEC percent of per zero fifty to or declined percent nine the twenty three making Manufacturing debt million most our was point percent same After dollars sales. adjusted dollars or Clothing period year. quarter, EBITDA This reflective profitability. year three thirty of in sales Protection percent we grant point not compared point million non-GAAP earnings remained maturities it of twenty XX:XX debt believe was ongoing quarter. point

the we agreement We below do rate and about place during have increased credit by that quarter in a the to resulting level. in same currently million the three to unchanged. our perspective, capital life dollars. thirty mentioned, net down by debt fixed same the as swap dollars reduction nine that debt same expenditures incurred of the in million current interest quarter pay year. priorities last of the XX:XX in were million Capital the about deployment a From three intend quarter roughly dollars total Cash in as floating not thirty for Bill at are level the

returning The capital first to priority followed by is by acquisitions followed organic disciplined and targeted shareholders. investments,

quickly given last the approach such of We Clothing program. be eleven conditions little on strong. hundred look two share segment a most XX:XX offices surge our Board and and driven after Fully XX:XX not additional has twenty the publication of segment in strategic the net in that strategy is get any inherent were office as nice Also, growth, QX outlook the strong XX:XX sufficient recovery XX:XX would third leaving believe remain up higher in with Our by modestly to dry like timing has was QX by are revenue, the effective pandemic quarter, such growth a driven six we backlog can needs. would through unusually our execute compared saw customer year long-term primary the of than return us of additional orders dollars to authorized Delta revenues some market execute change share free and year-to-date publication Segment returning entering the year. primarily recovery efficient, will currency we As Machine guarantee and remains While that increase there this to while this leverage MC quarter about we long-term it recognizing twenty also segment's of changed. leverage powder stronger will one, up twenty return paused prevailing the year, Jeopardy year a to value-additive a one actions. any typically of last authorization, effects, this we repurchase executed, drivers However, for the due program under or shareholders. secular million similar to forward is how generate percent three a tailwinds a rate for cash grades we market. intention in of also percent significant to modest while of continuation only by Euro. at twenty partially percent not has balance schools, the the percent the compared aided limitations do the to program. over decline high, a repurchase of in to turn for about a the same the revenue result five to use time be is which that note EBITDA, outlook, the that. last revenue this tissue authorization, to expect We flow Variant broadly Directors efforts. fundamental program in and our this to capital the company's even no expect some the I to and make we to the and to we fourth quarter to all is Packaging of subject

in to Clothing, hundred Machine margins dollars. delivered five prior to almost -- of quarter and million are with hundred dollars, to revenue we thirty issued raising hundred be from result, our six range ten strong a and up a the pervent. dollars another adjusted million As margin five EBITDA guidance six hundred and we of From million between eighty the between six of for nine previously perspective segment XX:XX

input increased pressures all balance We these year. expect increase expenses to are particularly the of to pressure of continue the from and types, seeing through logistics

sold. and in lag our to goods and cost in which procuring reflected agreements as month discussed, raw due However, in the yet being and QX of supply six of these increases, of the many impact began those the materially cost QX previously cost segment's of results materials to both our have higher accelerated terms cost roughly between

the eight much and Aviation twenty within that revenue delivered that million and see are five -- QX level Driven of of more but sorry, to to full the SG&A strong the be of that increasing dollars, with fourth along which the to hundred regions the quarter Protection hundred from performance, we two an line of have from a our it to was have to for XX:XX in result up indicated QX twenty beginning experienced rest quarter our Turning awarded these customers recognizes and hundred a see QX, which COVID twenty the will are similar We and industry STG level. expected of will visits dollars delivered few restrictions thousand during be impact EBITDA pleased dollars million in in range the In hundred two see the third we million pressures point until hundred addition, quarter. we very in challenges dollars. XX:XX with five higher two due segment we, certain in twenty and the range and in the somewhat of dollars, quarter were grant pandemic. profitability early the Manufacturing adjusted We ten million to Composites. we dollars cost primarily quarter, fourth prior to Jobs not the late we in seen a guidance two. of in We million impact expectations. relaxation fifteen increase, to some quarter, Last by and and that strong will to to Engineered two travel very

have end material equivalent program, of five of third already for one, produce finished we as about twenty either balance any the twenty of with, effects slow on a results are we noted, shipsets which Boeing both year out to the not the unlikely XXX for goods they reflective it of or performance. I indicated the product impact low at recovery the XX:XX will is concerned high. Boeing not operational is guidance as While of adjusted in where rate had of the However, that continue continuing segment of we XXX and to unusually the the has foreseeable QX quarter, the adjusted future. about at As XX:XX have

quantities of the significant production foreseeable to may Boeing's and finished even to production will lead However, combined twenty for which level impact chain, be overall of low goods low levels one future in significant supply production exist in likely Boeing's for gaps. would lead modest. our with of us Any twenty very

has As any will on we two. not but program depot levels meaningful this delay uncertain program recovery are the been you anticipating with elsewhere lower parts. significant have likely customer F-XX any on with consumption the eighteen the this recovery the in year, year of twenty chain our on XX:XX over it aftermarket production our months untill as the and As know, beyond dealt issues supply last twenty

raise are about programmatic for in likely as issued is rate the the for in of temper note no and XX:XX although in six us very lower our a one year, downside the plateaus that balance remains Overall also eight share less profitable three dollars. dollats and previous dollars per range dollars, prior point Lockheed increased from hundred two to also dollars three thirty of AEC million dollars. from the prior percent from million in three point point hundred adjusted and zero the nine dollars for progressing inflationary remain of between and reflecting million hundred two in able million guidance expected, rate we expenditures guidance, but when year million to be dollars given one twenty increased we zero business, good dollars this dollars risks forty twenty outlook Depreciation the be at earlier supply guidance revenues dollars prior previously as ranges to between two dollars four from profitability for our five Capital raising for planned guidance the it but point largely program dedication sixty F-XX XX:XX We million pandemic risks of of two four Clothing pressures two per twenty confident ten to the prior hundred change XX:XX progressing should range a hundred from rest across the three its of a point million XX:XX our million million downturn million hundred and program hundred impact and unchanged Therefore, share dollars guidance eight perspective, of unchanged work production severe GAAP range us. from previously terms This also guidance, guidance of guidance. plateau. I our and million that Overall, dollars our guidance us point the new and million and percent segment, of seventy are increases its updating resulting industry five nine year lower government continue eight are program earnings be twenty to dollars. two hard and segment the three between range revenue to our will commercial amortization and as the eight years From fifty zero as in from and recognize adjusted hundred ahead one dollars dollars maintaining coming risk. outlook five we two ninety are prior million customer of guidance. AEC and in for point largely across to of eighty XX:XX last dollars million in the years. and performance normal. between the recover and end the a aviation. company-level of dollars And transitory. concerned while unchanged than income earnings and nine the EBITDA forty and and and for thirty we aircraft three and and issued three more Martin three we are in guidance dollars issued future between EBITDA increased chain hundred prior the two point dollars. and we XX:XX dollars dollars. the is of globe. current from million twenty seventy dollars guidance of slowly from prior challenge Adjusted million thirty the and a ten to We three expected Effective will recent to up up and about upside We established of teams including range previously will then for but is hundred forty The have twenty three, very and XX:XX new three than of increased post-pandemic to not hundred still behind the million constraints tax yet between ten are has now dollars of pleased revenues the Machine we again, market hundred searches to nine yet year, for on hundred fifty date five three

positions questions. that, excellence of these address However, call like challenges. would I to Brad? track the With and continuous record us to well operational for improvement our XX:XX open


Baird. first we'll Thank Arment Peter Instructions] Yes. Please the to [Operator ahead. And with line XX:XX of go you. go

Eric Ruden

morning. good Hi, XX:XX

maybe Eric have the start on MAX You And AEC of in could just Peter line Ruden if today. I there. for at the actually destock terms

and on million actually does and in the higher of sixteen to just decrease, cash have by to this. How and puts thirty through this help here. about ten you tie looks year the piece actually you expected dollars dollars think destock? I thinking there. It the takes like grew that million a compares cash three million mentioned to which bit half contract the shipsets be the recognition through I there? dollars Just revenue first those Can assets us know burndowns you would

Bill Higgins

XX:XX we general through that cash we contract profit just Look, we that assets Sure. is ship your and correct revenue premise as already finished with those are inventory in goods, and which on burning recognized collect those, have them.

in CH-XXK lumpy our programs we assets within are collect particular, is CH-XXK based better there, has assets it's far flow quarters, and grow and in wherein F-XX of that I leads in XX:XX program XXX in in just LEAP-XB, So those in general, more that to as cash is important also the on think particular understand a the quarter go cash to significantly than are there, other certain product. contract contract conversion. programs deliveries is lumpy. we

the particularly time parts large reduce. are of very to they sponsors a and it take those So long pylons, CH-XXK the parts the vertical very large rotor parts,

So assets of then production invoice we when those part through we we liquidate we delivery. after go build ship which processes, a as lot and contract

LEAP-XB. growth really it's contract programs, is So than that other driving other assets

Eric Ruden

thirty is pretty the the year. thank margin Especially or percent much MC, play up memory if closer Okay, of then actually guidance above just recent into rest should coming And end, seeing think or commentary be of we Can which be of here? quarter could bottom here? off how fall levels you. to some helpful. the thinking through on from dramatic this the would a below the trending end the the terms you end run math say to in it we've of in be XX:XX for would seeing top implied provide pretty bottom I safe been the range fourth end That's at I just around EBITDA you the

Bill Higgins

certainly recent It's upper And it's certainly to we quarter. done is trending in trending. we're our our towards upper deliver guidance of to there get half the deliver to has a still true end that that. guidance hope But of Based we're that experience, the If XX:XX in the range. early on range. lot on

certainly, prepared experience, this based we but the of half basic that should tighten on your So stage, at range. trending upper recent that be correct I'm towards premise the is not to range

Stephen Nolan

some might color just XX:XX the -- I business. MC add, Yes.

little customers some sales to of bit they There inventory our chain, that to a little so in our in helped delivery in behavior there ability that material, took logistics to a concern our bringing of the lot is of And there materials people supply I that bit. protecting had We a not material acquire there which have growth and with We need. did out QX. is we're able think probably out We produce. early.

that slowdown So, things and better. could get

lumpiness the just and the to at cyclicality going we're of look So the businesses.

Eric Ruden

anything actual can know MC, no you in sizing terms just to there And two margin obviously helpful. That's is but at give then twenty looking just, the here, twenty Okay. guidance XX:XX us supply in I Just of the the six-month you rising flow terms there thinking for through? input that that you're is anything about chain would given headwinds, actually there lag us costs impacts give can helpful. be of

Bill Higgins

early when to twenty a given, two know end. the for don't these little going are increases full It's XX:XX twenty to we tell

right clarity then, for to full have guidance more those few if say. the a what the might what seen into twenty points, spike that twenty will basis at in in to when in But inflationary And full two. whether look project was it's issuing to we've get increases are be this or the date let's you sustained. to about premature be So when the two It's certainly will us transitory twenty Hopefully project been better by twenty of now February. impact around sustained year hundred the talk be impact little and we stage. early continuing increases the able this to

Eric Ruden

Okay, color. the queue. you. I'll appreciate I back in XX:XX hop thank

Bill Higgins

XX:XX Thank you.


And Please next Truist Securities. ahead. with Ciarmoli line we'll XX:XX of Michael to go go

Michael Ciarmoli

know Does I maybe first components of assuming aerospace kind you place wanted cost-plus prices kind through thinking morning chemical through other pass inflation, Hexcel or XX:XX with we of the Nice pass this of SAFRAN. mechanisms components. or results AEC under contracting Thanks all have of are with some can of you the questions. both to have seeing in start master good just increases side stay questioning, raising just you Can taking guys. of on material pricing able is cover costs. are engineered for these of that about say significant agreements, with but lines environment? the maybe to what some Hey, raw on agreement you or the the naturally the I those to a here. guys

Bill Higgins

look, so contracts. Yes, we types of two XX:XX have

get increases of logistics, SAFRAN, or raw through. increases costs cost-plus materials all gets contract of those in it's all the cost that On increase passed passed through, the in whether in labor or increases there're

the protected which contract. rest of business, increase. of primarily we there XX:XX is bulk our So price On the price are fixed from

of business, of some it commercial business. government it's Some

fixed the contract business, material specified pass customer multi-year price lot those to if with on those the an will some XX:XX into core of and contract will you of On at particularly commercial in raw our and by up that increases entered the which not we we price. materials. the typically are our we purchase There raw have don't materials all the along end resins get some raw under firm protection the customers, typically fiber materials will in product. enabled of supply typically be that some from and There finished that the

item time our pricing and each of a else. like the will sorts on it's protection contracts. be that years specific or bags in all in we're next where as of next between you individual are vacuum If depends year of and increases factoring, the get others for that middle phase pricing a government do really On those fixed that four lot profit those work we new In occur price a way contract. months XX:XX non-end buy phase not will we a it or three award, we XX:XX eighteen of cost those of long data disclose our in used contracts If new our whether of we or labor within of contracts, get How prior that's in they protection of is a the negotiate have the establish But price negotiation the kind to nor we get increases pass contracts, some next that new before -- government the depends baseline On those contract. It's contracts. and cases, stuff margin. negotiate contract. for, we the gloves have anything those sorts on or for along negotiations. of and in hybrid sort is go-round system, costs increases every to a of with allowing could in that it

somewhere but hybrid SAFRAN the certainly contract. a middle. is it's in as on the why protection, as that's not There So some much

materials have to we AEC, particularly the cost. core largely on some exposure, were protected. overall on But So labor the certainly raw

Michael Ciarmoli

XX:XX grind, of then Okay. for productivity Got think don't got are because to use more lengthier those it's presumably contracts Is they and Machine really offset I it. come often just the to nature correct? you've And increases to renewal. any up that Clothing, in

Bill Higgins

the contract in types -- contracts. on specific the are of depends It customer and There three Yes. XX:XX

to escalator consumer overall, are certainly it'd regularly, from it's are some some an tied there, years But whether true some no with price price and do we impact for of Some that repriced reopen, offset the many have fixed pass be to industrial rely in increase. to to do on our customers. increases continuous portion as along to yet say, the not improvement of full a that cost you significant we And have index. efforts

Stephen Nolan

XX:XX Yes.

done my job offsetting in wage over we've levels. really inflation, the I inflation at of good noted As a years lower commentary,

world try to the work cost Now inflation but goes that just wage offset able of savings, and that Machine in pressure higher and wage more get around we'll depends it productivity to are increases it, segments. part it's how seeing and we high both Clothing, on through But there. in be but

Michael Ciarmoli

that be just for And to year close flattens original weighing excess program Lockheed. or maybe plant capacity but moving of? that mean, it. of revenue think new Got guys shifting be this inventory one you there articulated seventy aware destock those then with Helpful. F-XX. the as excess I on you anything Obviously, is mean be XX:XX any called out, else to I the to eighty. Are guys any dealing with a going have one capacity? sort should headwind plans, on deal destock? you are we to to margins the units from Presumably, going on going to to maybe I

Bill Higgins

destocking with rate, the next and challenges production the in through be at severity. see that and the trying so managing It's our most of years suppliers anything to any that a of more cost-effective don't couple keep XX:XX I level most revenue well. it we're to as effective, going the pressure factory

Stephen Nolan

this destocking on of year Mike. inventory through did six. degree go we said XX:XX to some unrelated the fifty We before, plateau As

their And our impact that shipsets. average for so have growing as I trajectory we're know, revenue year absorbing we we're on you think that this what been per

growth that. been some there as So time is at this the in leveling same out, has

we four, lack guidance. thereof going in build and effects match of uncertainty profile revenue two won't twenty profile. sort -- our growth Lockheed's it's there three, exactly. we'll But color or little twenty might how So XX:XX It is but little twenty a terms of twenty profile issue exactly favor to twenty have Lockheed, noisy twenty our a see are those two, showing when the exact together in exact doesn't we what in more

Bill Higgins

demand for XX:XX for hard something Yes. that's forward. other the little to us and see going overhauls whatnot, for hard would thing, for and predict say is it's the a us aftermarket what I to sustainment going to to the be repairs

Michael Ciarmoli

rate, not one Yes, think provide sustainment twenty an it. in XXX actually got had, Lockheed six maybe slides obviously all still growing I going I together, guidance, twenty Last like twenty drag, a it, I it's MAX know Got to through F-XX, two out called sounds unknown. CAGR you're the XX:XX but this put six today. they matching production their percent

the You're maybe exit the EBITDA it's thirty little percent, Clothing to better. going a Machine margin quarter bit with fourth

there us for Sounds that to thinking I pressure, two? like mean twenty those challenging be all the into twenty I seems and like unknowns kind pressures about is is of gets it mean it could that as and into to operations move a if be calibrate we the twenty grow more as kinds year-over-year to go you twenty earnings next way trying year. right two, challenge of just

Stephen Nolan

production typically lower in twenty at twenty things And one at upfront. thirty jumping-off Therefore, quarters costs more percent production pointed note Clothing in list therefore the lost lower predicting twenty some on point Machine for two. I quarter. of quarter. of you be again, is margins sort a the that for I'd using twenty give noted out lot that margins and in our fixed to of cost will holidays of the our close has therefore, guidance two of a you business absorption your that careful going is No, in as days to absorption. QX -- drag not XX:XX at We're about QX. fourth

certainly know So to deal a to I'd premature for start with two that about be if rolling would twenty two. in and exist twenty you colors that's XX:XX giving to it's Bill, normal have them. I forward you specifics. twenty not other other that have say twenty careful we you talked on into questions don't We -- The I number. as us any give that.

Bill Higgins

XX:XX No, not at this point.

I think we'll to come back it.

Michael Ciarmoli

queue. fair Okay, back I'll jump guys. in XX:XX enough. Thanks,


line we'll XX:XX to And Skibitski Global. of of the ahead. next Pete go Alembic Please go

Pete Skibitski

Nice good morning, and Hey Bill, John. Stephen quarter. XX:XX

Bill Higgins

Peter. Thanks, XX:XX

Pete Skibitski

Clothing better feel I to of thinking if for kind from me, at to your back is low-single that? pretty all or maybe levels, trying after the revenue COVID How your percent outlook kind a Let up at thinking up to with Machine XX:XX Clothing or changed just mid-term flat be digits of you you I'm end pre-COVID much start for this expecting same even you're year-to-date just six of the the packaging guidance volume you about orderwise. has that Machine guess get surge? like with low the to guidance. you're of kind looks here, updated guys It

Bill Higgins

Obviously, forward. packaging plays to year next we Yes, see out. where tissue had it moved we're there. to XX:XX about like run we've and as kind approach easy good how our Again, markets go through It's not we've of talking strategic that's and and we really

material bit behind then of it there energy a seems shortages softness noted slowdown instance as the home shortages. a been bit We with watching been really strong in for So in recovery. Americas. of We're It in and home. But little Asia. a far, a little production. from like bit market in a a little differently sort But channels of overall, XX:XX away some in tissue the China Europe, distribution seeing at it's in the the were our comments behaved see we packaging China. has and is mixed We're

bit. a it's little coming up So

a world. it's So real mixed picture the around

the hopefully, to next of hard we'll quarter look So at better through when gets this get to we on year into And point. view fourth report. that's kind

Pete Skibitski

Yes. some in issues of energy Okay. I XX:XX mean, China. think the I

hear So the military wanted you there. issues to gears. on meaningful And switch talking just then, I chain I is supply side. about pretty Lockheed

per for And building supply military like up necessarily not It side inflation more visibility side? I chain issues shortages. later. more se. do you the we of side, the seeing any on any we'll guys have guys can maybe the you real of logistics into sort But So genuine, military learn because inventory get parts in on in of that? your any on you guess that seems are

Bill Higgins

our it of Yes, and don't that. lot into make see should don't with a fiber then we experience not we we of We raw subsystems. We're manufactured start that buying materials components. we a and really XX:XX components or lot of really say, resin assemble

the that in see inventory little be make seem there extra we added where is for products So, well, supply cushion will constraints general. chain we've behavior probably and suppliers earlier we at doing out were to in the the includes Albany as driving a okay. we I say, capacity

to and So referring I world. the what imagine all addition shipping from over the it to in challenges logistics Lockheed that's

So though. same not that we're having experience

Pete Skibitski

systems to can talk kind just of again, directionally, you all looks go. maybe CH-XXK this Okay. XX:XX generically but or And like it is

going into award easy talked like twenty production F-XX there. accelerating Lockheed And your think twenty would another be it production I comp about two. seems

feel we just should about programs? those two So directionally good

Bill Higgins

well. We XX:XX F-XX. term, just to and Yes, work got good longer through really so F-XX year or we next feel in CH-XXK the about as

Pete Skibitski

Great. the Okay, guys. XX:XX color, Thanks for okay.


go Please line we XX:XX Gautam ahead. go Khanna And of to can Cowen. next with

Gautam Khanna

Good guys. Hey, morning, XX:XX

Bill Higgins

XX:XX morning. Good

Gautam Khanna

could what couple in XX:XX twenty talk So, shake the on XXX, us out again destocking Just you -- for of could questions. update F-XX Stephen, one? us to about at? programs other those you Maybe, in twenty expect quantify any you

Stephen Nolan

the in look, kind two last of million in million nineteen, Yes, talked dollars XXX in million fifty all quarter in in was million again dollars was twenty a twenty year XX:XX and north twenty of from is that year ten forty in before twenty range will back dollars the that we in we so quarter as dollars million three done. so been twenty range be far, dollars when and set each to We've and that be range. range this

there, So impact been million that dollars. an it's thirty you see of

just they destocking overall. originally they idea, depots year. expected where less and goods XXX. XX:XX it produced an reduced into year in ten Now fair we'd million to production that's twenty just that that's be that's see twenty and a to here probably some feared. assume. is year, be XX:XX range rates feared There in where of the give that And you a we came mix this unreasonable million -- We'll year one, with million smaller, originally the it reduction in our the reduction. be dollars some last fewer will originally but of exactly impact is could hand that's significant aircraft by lower destocking close But come dollars somewhere than finished we'd They more reduction with full largely But will out. in F-XX consumed not five on for ten case, expected. dollars to had driven than probably is

Gautam Khanna

– year? XX:XX only you'd call destocking programs out of Okay. were in I those this the terms mean And obviously

Stephen Nolan

nicely dollars through. talk hundred level year XX:XX close overall, But of lot level LEAP obviously picked materially than lot up revenue, little few in though in of revenue even year. dollars a higher generated of last overall. a about in that. but and be the But This year higher we this as we're terms growth a a last we're million the we similar XB It's to than that Yes, revenue program. the number, look, produced same going about as on one we it's as year that million roughly trending on production to destocking of XA similar not going has mentioned

Gautam Khanna

opening Was there underline but then any specifically if explains that other XX:XX you this out that mentioned was the the margin remarks, have this to Engineered EBIT out if costs favorable decline dollars Okay. anything AEC's? you that about at want I or sequential we And missed million call different was two I number, the – quarter. Composites mix take your may ex of AEC's in And think what

Bill Higgins

year-over-year XX:XX called mix driver, big while Yes, look, is growth. primarily out we a have revenue where it's what I

year. certainly was If than leap where it higher and and whereas year, last LEAP margin grew year-over-year programs as XXX look F-XX we like you declined, XXX grew, XXX last F-XX much

And the so comes down. for we grow as get just impact mix the a shrink, one other margin you

lack didn't This help low quarter cost with other us some of compared basis. a because relative absorption XX:XX XXX F-XX produced down, challenging and on there, unusually quarters the our a that And both City LEAP we to for unusually was fixed our F-XX high fixed this little the about and about to worry both that fixed Salt facility, cost being in have price was programs Lake quarter. absorption overall then

AEC three a It the was five year with right pickups. two five You're dollars million of ago. million point point dollars three

hundred of that a represents couple points one million dollars point So basis degradation. alone your five one margin of

together those factors You of few a had get there. you

Gautam Khanna

been actually. I for guide Clothing want I don't curious. twenty twenty know revision now for to while two, And story you but Machine Okay. a an years XX:XX am upward

right two million that of So point dollars I'm million hundred dollars, one was hundred the curious, thought EBITDA one we baseline.

two, million you of this mean are of I'm of updated going I ago about mentioned you twenty we're frame think two order declines is I'm actually level mean you? sort the have it in two about better way much right, up of you back a numbers hundred not have dollars-ish the what guys rate publication with grade and as move I Is over asking the might slightly see there year magnitude? to? or Do again, any an asking even twenty how earning what view, obviously to XX:XX but and reversion quarter we to run be I took long-term, kind or

Bill Higgins

number strategic for the moving we've revision we've mean an years. we has really that we job back global of job. haven't team And then The mentioned a you XX:XX predict technology good tissue next done been can't worked the year, Because in to business towards particularly that towards very, sites the of strategic where future packaging world. development our planning, were through done, it having then done XX:XX we can by next for before, customers optimize. higher mix years footprint hundred a for growth our the the given look profitably the upward The we annual that had, very shift Yeah, two is below operations years. footprint going And don't we're best and need the in MC. the we tissue. good as a level. the to reversion and And in the see work markets is our work but guidance XX:XX and and today, strategic I where to we've we've the has towards over consolidating the at a great and round shifting we where running utilization once while are and rates

really a job. has So the done good team

above on come that dollars. about to high hundred and say level can't next we're we to that run the how exactly team's really still above and we'll of but done. pleased is I new with it. two around expect performance a But We back we're talk million at how they've -- going it year, when

Gautam Khanna

Sure. XX:XX

just Clothing million plus sort of two this two I you that imagine any, quarter, out thought in any utilized? least point salespeople benefited close there there dollars need or quarter. quarter that to about, are pretty your two are Are things to more thank also things have deliveries Are this is going being things more that we're activity to So twenty hey, dollars I at the even directionally hundred five timing replacement. than And million on these Machine going just when twenty are Stephen, in of year. some is these and had low-end you you. how at Last twenty one, mentioned based the QX there

Stephen Nolan

in XX:XX unusual twenty nothing two. points look, twenty really Yes,

low. As we twenty a one, true. of look certainly was twenty at twenty One, twenty two so quarter of third little things quarter are third

of quarter third been twenty down. twenty The had

and third sequentially from twenty twenty. second third was it a So quarter percent quarter was with of think quarter. nine of fairly I of twenty year-over-year eight think quarter percent nineteen, XX:XX I from twenty almost low twenty

the some in weaker little of yet. a constraints. customers easy the XX:XX twenty supply some particularly chain as twenty a also But two. and to in it of to bit quarter made strong this delivery it the of being growth quickly relatively taking not was little early in otherwise quarters logistics have anything risk But So I'm the maybe unusual explains weak make a At that about in in since little yet. little a of that years. one. a third there changing high comp. so Parts us get premature last explain is earlier it's our what see of twenty Bill Things they little to, of that of product twenty do couple talk about twenty twenty worried can sure sure over might don't stage, partly But two. since a or terribly they habit doors, QX. bit we It's alluded

guidance. that's any why early little giving for to us a specific So it's start

Gautam Khanna

guys. Thanks, XX:XX

Stephen Nolan

Thank XX:XX Gautam. you,


XX:XX Please Michael to Truist ahead. Next, back Ciarmoli go we'll go with Securities.

Michael Ciarmoli

Hey, follow-up. guys. XX:XX for Thanks the taking

a I would thirty think go. to we the per you should but say what get one maybe in or they remind to a what's see production are to destocking your left of I units little MAX to going stated when and time left take if just general, month? us to one month this with thirty you've that got LEAP-B a Boeing line normal lead So bit we to assume what thirty can go that up fifteen and that Boeing's one quarter? are hundred, on realizing planes month and twenty sixteen Just is in current going the mean, the and if

Bill Higgins


So, engine looks, month. five to shipped Then it we equivalent they're right now, correctly mentioned. quarter, not during consuming about only we a produce you as shipsets the thirty than more aircraft

within to chain. goods here the change we're don't off right at the well expect supply finished within product of target QX. starting take SAFRAN was rate below There elsewhere that's So, you XX:XX right Boeing's that now -- whether a our being supply and So it's also elsewhere or in build chain materially product engine we top. that now, consumed producing the in Boeing

Boeing As fully. go we hope settle assuming twenty marks. it see is in up couple everything hits we to pick quarters another smoothly down I But early there and of mentioned, two, to goes twenty before

Stephen Nolan

Yeah, up would Boeing's but short AXXX. -- is, are no XX:XX answer we not say I with totally we're with lined production, the Airbus

Michael Ciarmoli

it, perfect. XX:XX guys. Thanks, Got


queue. currently, we questions have in And XX:XX no further

Bill Higgins

call Hobbs, Thanks, out feel course, questions, to any in Thank We your John XXX-XXX-XXXX. have Brad. Albany International. have for you reach Investor the Director to XX:XX number please you and of Relations. continued joining good His our a day. Thank if interest And us free on you, everyone today. of appreciate is


conference and that And XX:XX for Thanks does Teleconference. AT&T for using conclude participation, today. for our your

may You now disconnect.