v3.25.1
Reportable Segments and Revenue Recognition
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Reportable Segments and Revenue Recognition Reportable Segments and Revenue Recognition
The Company is organized based on the nature of its products and is composed of two reportable segments, Machine Clothing ("MC") and Albany Engineered Composites ("AEC"), each overseen by a segment president. These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker ("CODM"), reviews operating results for the purpose of allocating resources and assessing performance. Our CODM evaluates each segment's performance based on metrics such as net revenues, gross profit, and other key financial data, to assess performance and allocate resources that align with company-wide goals. Annual incentive targets are established for the segment presidents based on these metrics, in addition to cash flows, which are reviewed in summary each month, and in more depth each quarter. The Company has not aggregated operating segments for purposes of identifying reportable segments. Effective December 31, 2024, the Company adopted provisions of ASU 2023-07, which expanded the content and frequency of segment disclosures required under ASC 280.

Machine Clothing:
The Machine Clothing segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel products, nonwovens, fiber cement and for several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels are substantially the same in each region of the world in which we operate.
We design, manufacture, and market paper machine clothing (used in the manufacture of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products and technical textiles.
Albany Engineered Composites:
The Albany Engineered Composites segment provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, the SAFRAN Group (“SAFRAN”) owns a 10 percent noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract, where revenue is determined by a cost-plus-fee agreement.
The LEAP engine is used on the Airbus A320neo, A321neo, Boeing 737 MAX, and COMAC 919 aircraft. AEC's largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and cases for CFM International's LEAP engine). AEC net sales to SAFRAN were $39.4 million and $50.1 million in the first three months of 2025 and 2024, respectively. The total of Accounts receivable, Contract assets and Noncurrent receivables due from SAFRAN amounted to $74.0 million and $78.5 million as of March 31, 2025 and December 31, 2024, respectively.
Other significant programs for AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing commercial programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine. For the year ended December 31, 2024, approximately 36 percent of AEC's revenues were related to U.S. government contracts or programs.
The following tables show data by reportable segment that is regularly provided to the CODM, reconciled to consolidated totals included in the financial statements:
Three Months Ended March 31, 2025
(in thousands)MCAECCorporateTotal
Net revenues$174,697 $114,077 $— $288,774 
Cost of goods sold$94,795 $97,493 $— $192,288 
Gross profit$79,902 $16,584 $— $96,486 
Selling, general and administrative expenses$32,881 $10,126 $10,805 $53,812 
Technical and research expenses$7,243 $3,674 $979 $11,896 
Restructuring expenses, net$1,347 $1,168 $— $2,515 
Operating income/(loss)$38,431 $1,616 $(11,784)$28,263 

Three Months Ended March 31, 2024
(in thousands)MCAECCorporateTotal
Net revenues$185,217 $128,113 $— $313,330 
Cost of goods sold$100,562 $104,082 $— $204,644 
Gross profit$84,655 $24,031 $— $108,686 
Selling, general and administrative expenses$32,767 $11,540 $10,528 $54,835 
Technical and research expenses$7,520 $5,145 $— $12,665 
Restructuring expenses, net$21 $2,188 $— $2,209 
Operating income/(loss)$44,347 $5,158 $(10,528)$38,977 
Three months ended March 31,
(in thousands)
20252024
Net revenues
Machine Clothing
$174,697 $185,217 
Albany Engineered Composites114,077 128,113 
Consolidated revenues$288,774 $313,330 
Gross profit
Machine Clothing$79,902 $84,655 
Albany Engineered Composites16,584 24,031 
Consolidated gross profit$96,486 $108,686 
Depreciation and amortization
Machine Clothing$7,706 $8,511 
Albany Engineered Composites13,295 13,503 
Corporate290 290 
Consolidated depreciation and amortization$21,291 $22,304 
Operating income/(loss)
Machine Clothing
$38,431 $44,347 
Albany Engineered Composites1,616 5,158 
Corporate(11,784)(10,528)
Consolidated Operating income$28,263 $38,977 
Reconciling items:
Interest income(1,638)(1,123)
Interest expense
5,293 4,442 
Other (income)/expense, net983 (2,982)
Income before income taxes$23,625 $38,640 

Certain prior year amounts have been reclassified in order to conform to current year presentation. Global information system costs previously included in Corporate expenses are allocated to the segments. Management believes this presentation better reflects the performance of the segments and is how management will review segment performance on a going forward basis. For the three months ended March 31, 2025, Selling, general and administrative expenses include global information system costs of $4.0 million, $3.9 million, and $0.5 million for MC, AEC and Corporate, respectively. For the three months ended March 31, 2024, Selling, general and administrative expenses include global information system costs of $3.8 million, $4.0 million, and $0.5 million for MC, AEC and Corporate, respectively.

The following table presents assets by reportable segment:
(in thousands)
March 31, 2025December 31, 2024
Segment assets
Machine Clothing$621,691 $600,603 
Albany Engineered Composites$749,287 $736,306 
Reconciling items:
Cash$119,354 $115,283 
Income taxes prepaid, receivable and deferred45,761 47,944 
Prepaid and Other assets151,983 148,560 
Consolidated total assets$1,688,076 $1,648,696 
The following table presents capital expenditures by reportable segment:
Three months ended March 31,
(in thousands)
20252024
Capital expenditures and purchased software
Machine Clothing$6,232 $6,357 
Albany Engineered Composites9,365 20,523 
Corporate expenses— — 
Total capital expenditures and purchased software$15,597 $26,880 

Revenue Recognition:
Products and services provided under long-term contracts represent a significant portion of revenues in the Albany Engineered Composites segment and we account for these contracts over time, primarily using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be materially different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs. Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead rates, material costs, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. The cumulative changes in the estimated profitability of long-term contracts decreased operating income by $7.0 million for the first three months of 2025. The negative change in the estimated profitability in the first quarter of 2025 was driven by a few large complex programs, including approximately $2.0 million for various CH-53K programs, approximately $1.7 million on our Gulfstream program, approximately $0.9 million on our F-35 program, and $2.4 million, net, on all other programs. Adjustments in the estimated profitability of long-term contracts decreased operating income by $0.9 million for the first three months of 2024.
We disaggregate revenue earned from contracts with customers for each of our business segments and product groups based on the timing of revenue recognition, and groupings used for internal review purposes.
The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended March 31, 2025:
Three months ended March 31, 2025
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$173,676 $1,021 $174,697 
Albany Engineered Composites:
ASC— 38,920 38,920 
Other AEC4,077 71,080 75,157 
Total Albany Engineered Composites
4,077 110,000 114,077 
Total revenues$177,753 $111,021 $288,774 
The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended March 31, 2024:
Three months ended March 31, 2024
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$184,235 $982 $185,217 
Albany Engineered Composites:
ASC— 49,739 49,739 
Other AEC5,757 72,617 78,374 
Total Albany Engineered Composites
5,757 122,356 128,113 
Total revenues$189,992 $123,338 $313,330 
The following table disaggregates MC segment revenue by significant product groupings (paper machine clothing ("PMC") and engineered fabrics); and for PMC, the geographical region to which the paper machine clothing was sold:
Three months ended March 31,
(in thousands)
20252024
Americas PMC$82,846 $83,501 
Eurasia PMC
68,197 76,190 
Engineered Fabrics23,654 25,526 
Total Machine Clothing Net revenues$174,697 $185,217 
We do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contracts in the MC segment are generally for periods of less than a year and certain contracts in the AEC segment are relatively short duration firm-fixed-price orders. Remaining performance obligations on contracts that had an original duration of greater than one year totaled $1.1 billion and $752 million as of March 31, 2025 and 2024, respectively, and related primarily to firm fixed price contracts in the AEC segment. Of the remaining performance obligations as of March 31, 2025, we expect to recognize as revenue approximately $117 million during 2025, $150 million during 2026, $142 million during 2027, and the remainder thereafter.