Albany International Corporation

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to Albany International Corp. Second Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. I would now like to turn the conference over to JC Chetnani, VP IR and Treasurer. Please go ahead.

Thank you, Debbie, and good morning, everyone. Welcome to Albany International's second quarter 2024 earnings conference call. As a reminder for those listening on the call, please refer to our press release issued last night detailing our quarterly financial results. Contained in the text of the release is a notice regarding our forward-looking statements and the use of certain non-GAAP financial measures and their reconciliation to GAAP. For the purposes of this conference call, those same statements apply to our verbal remarks this morning. Today, we will make statements that are forward-looking and contain a number of risks and uncertainties, which could cause actual results to differ from those expressed or implied. For a full discussion of these risks and uncertainties, please refer to both our earnings release of August 6th, 2024, as well as our SEC filings, including our 10-K. Now, I will turn the call over to Gunnar Cleveland, our President and CEO, who will provide opening remarks. Gunnar?

Thank you, JC. Good morning and welcome, everyone. Thank you for joining our second quarter earnings call. I will provide an overview of our business performance. Rob will later discuss our financial results in detail. Overall, we had another good quarter as our businesses delivered strong results and are responding well to their industry challenges. We continue to deliver strong profitability and have further strengthened our balance sheet. Free cash flow was strong with 64 million generated in the second quarter. Machine quoting revenues at 194 million grew year-over-year driven by our Heimbach acquisition, slightly offset by a lower organic demand, primarily in Europe and North America. Our global order backlog remains stable. We continue to make progress with integration at Heimbach. Our performance has improved sequentially quarter-over-quarter with a 220 basis point expansion in machine clothing. adjusted EBITDA margins, and we took further action on our global footprint with the consolidation of two UK facilities. We successfully implemented SAP at Heimbach in the second quarter, which will enable us to further execute on our integration plans for the second half of this year. We commend the team for executing the implementation with no operational disruption, and I thank them for all their hard work. Moving to our engineered composite segment, we're pleased to report that during the quarter, we received over 200 million in new orders, bringing our year-to-date orders to over 900 million. This will further drive revenue growth in 2025 and beyond. For the quarter, we delivered 20% year-over-year top-line growth as our current programs ramp up. We see growth in our commercial markets, especially in space and other emerging platforms. Our defense business is also growing, primarily the CH53K and JASM platforms, partially offset by the Joint Strike Fighter program. However, our profitability for the quarter is lower with adjusted EBITDA margins at 16.9%, lower by 130 basis points versus the prior year, driven by inefficiencies related to program ramp-up. We expect margins to improve in the second half due to operational improvements and program mix. Turning to the LEAP program, we've been working closely with Saffron to adjust our 2024 production plan in light of the continued situation at Boeing. We now anticipate LEAP revenue to be slightly down this year versus the prior year, with minimal impact to overall profitability. Despite changes to LEAP production, we're maintaining our full-year AEC guide, as other programs will serve to offset this reduction. Overall, our business is performing well. Our margins in machine clothing are improving as we execute our Heimbach integration plans, and substantial new business wins at AEC have improved our backlog. I would also like to welcome Chris Stone as president of AEC. Chris brings strategic capability combined with experience in leading complex operations and supply chain. These skills will be critical to AEC as they continue to execute their growth strategy. And with that, I'll hand it over to Rob to provide more details on the quarter. Rob?