Albany International Plunges to $97.8M Loss on AEC Woes

TL;DR

**AIN's Q3 is a disaster, with the AEC segment bleeding cash and dragging the whole company into a deep loss; steer clear until they fix the composites mess.**

AI Summary

Albany International Corp. (AIN) experienced a significant financial downturn in Q3 2025, reporting a net loss of $97.638 million, a stark contrast to the net income of $18.221 million in Q3 2024. This was primarily driven by a substantial decrease in net revenues, which fell to $261.434 million from $298.386 million year-over-year, and a dramatic increase in cost of goods sold to $311.372 million from $208.002 million. The Albany Engineered Composites (AEC) segment was the main contributor to the loss, posting an operating loss of $148.012 million in Q3 2025, compared to a loss of $14.296 million in Q3 2024, largely due to a $139.665 million contract loss provision. The Machine Clothing (MC) segment, while profitable, saw its operating income decline to $43.103 million from $47.624 million. Overall, the company's operating income shifted from a gain of $25.171 million in Q3 2024 to a loss of $116.507 million in Q3 2025. Long-term debt increased significantly to $480.631 million as of September 30, 2025, from $318.531 million at December 31, 2024, and the company purchased $170.964 million in Treasury shares during the nine months ended September 30, 2025.

Why It Matters

This filing reveals a critical period for Albany International, with the AEC segment's massive contract loss provision significantly impacting overall profitability and raising questions about risk management in its advanced composites division. For investors, the shift from a $18.029 million net income to a $97.760 million net loss attributable to the company, coupled with a substantial increase in long-term debt, signals heightened financial risk and potential future volatility. Employees in the AEC segment might face uncertainty given the significant operating loss. Competitively, this could weaken AIN's position in the aerospace composites market, potentially benefiting rivals like Hexcel or Spirit AeroSystems if AIN struggles to recover from this contract setback.

Risk Assessment

Risk Level: high — The company reported a net loss of $97.638 million for Q3 2025, a dramatic reversal from a $18.221 million net income in Q3 2024. This was primarily driven by a $139.665 million contract loss provision in the AEC segment, indicating significant operational issues and potential future liabilities. Long-term debt also increased by over $162 million to $480.631 million, raising concerns about financial leverage.

Analyst Insight

Investors should exercise extreme caution and consider reducing exposure to AIN given the substantial net loss and the significant contract loss provision in the AEC segment. Await further clarity on the specific nature and resolution of the AEC contract issues, and monitor future filings for signs of improved operational efficiency and debt reduction before considering new positions.

Financial Highlights

debt To Equity

Not Disclosed

revenue

$261.434M

operating Margin

Not Applicable

total Assets

Not Disclosed

total Debt

$480.631M

net Income

$ (97.638M)

eps

$ (3.37)

gross Margin

-19.1%

cash Position

Not Disclosed

revenue Growth

-12.4%

Revenue Breakdown

Key Numbers

• $97.638M — Net Loss (Q3 2025, compared to $18.221M net income in Q3 2024)
• $261.434M — Net Revenues (Q3 2025, down from $298.386M in Q3 2024)
• $139.665M — Contract Loss Provision (Nine months ended September 30, 2025, primarily in AEC segment)
• $(148.012M) — AEC Operating Loss (Q3 2025, significantly worse than $(14.296M) in Q3 2024)
• $480.631M — Long-Term Debt (As of September 30, 2025, up from $318.531M at December 31, 2024)
• $(3.37) — Diluted EPS (Q3 2025, compared to $0.57 in Q3 2024)
• $170.964M — Treasury Share Purchases (Nine months ended September 30, 2025)

Key Players & Entities

• ALBANY INTERNATIONAL CORP. (company) — Registrant and parent company
• Machine Clothing (company) — Reportable segment of AIN
• Albany Engineered Composites (company) — Reportable segment of AIN, primary driver of losses
• SAFRAN Group (company) — Customer and noncontrolling interest holder in ASC
• $97.638 million (dollar_amount) — Net loss for Q3 2025
• $18.221 million (dollar_amount) — Net income for Q3 2024
• $139.665 million (dollar_amount) — Contract loss provision in AEC segment
• $480.631 million (dollar_amount) — Long-term debt as of September 30, 2025
• $170.964 million (dollar_amount) — Treasury shares purchased in nine months ended September 30, 2025

FAQ

Risk Factors

• Significant Contract Loss Provision [high — financial]: A substantial contract loss provision of $139.665 million in the AEC segment for the nine months ended September 30, 2025, led to a significant operating loss of $148.012 million for the quarter. This indicates potential issues with project execution, cost overruns, or revenue recognition within this segment.
• Deteriorating Profitability [high — financial]: The company reported a net loss of $97.638 million in Q3 2025, a sharp reversal from a net income of $18.221 million in Q3 2024. This was driven by a significant increase in the cost of goods sold ($311.372 million vs. $208.002 million) and a decrease in net revenues ($261.434 million vs. $298.386 million).
• Increased Leverage [medium — financial]: Long-term debt increased substantially to $480.631 million as of September 30, 2025, from $318.531 million at December 31, 2024. This increased financial leverage could heighten financial risk, especially in light of the current operating losses.
• Shareholder Returns Amidst Losses [medium — financial]: The company purchased $170.964 million in Treasury shares during the nine months ended September 30, 2025, while simultaneously reporting significant net losses. This allocation of capital towards share repurchases when facing operational challenges may be viewed negatively by investors.
• Cost of Goods Sold Increase [high — operational]: The cost of goods sold surged to $311.372 million in Q3 2025 from $208.002 million in Q3 2024, a 49.7% increase. This dramatic rise, outpacing revenue declines, severely impacted gross profit and overall profitability.
• Revenue Decline [medium — market]: Net revenues decreased to $261.434 million in Q3 2025 from $298.386 million in Q3 2024, a decline of 12.4%. This indicates potential weakness in demand or market share erosion for the company's products.

Industry Context

Albany International operates in specialized industrial sectors, including engineered fabrics for aerospace, defense, and industrial applications (AEC), and machine clothing for paper and other industries (MC). The AEC segment appears to be facing significant headwinds, evidenced by a large contract loss provision and substantial operating losses. The MC segment, while profitable, is experiencing declining operating income. The overall industrial manufacturing sector can be cyclical and sensitive to global economic conditions, impacting demand for specialized materials and components.

Regulatory Implications

The company must adhere to various financial reporting regulations, including GAAP. The significant financial loss and increased debt levels may attract scrutiny from investors and potentially lenders. Any future restatements or accounting irregularities could lead to regulatory investigations and penalties.

What Investors Should Do

1. Monitor AEC Segment Performance
2. Analyze Cost Structure Improvements
3. Evaluate Debt Management Strategy
4. Scrutinize Capital Allocation

Key Dates

• 2025-09-30: End of Q3 2025 — Reported a net loss of $97.638 million, a significant downturn from Q3 2024, driven by a large contract loss provision in the AEC segment and increased cost of goods sold.
• 2025-09-30: Balance Sheet Date — Long-term debt stood at $480.631 million, a substantial increase from $318.531 million at the end of 2024, indicating higher financial leverage.
• 2025-09-30: Nine Months Ended — Company purchased $170.964 million in Treasury shares, raising questions about capital allocation priorities amidst financial losses.
• 2024-09-30: End of Q3 2024 — Reported a net income of $18.221 million and positive operating income, highlighting the stark contrast with the current quarter's performance.
• 2024-12-31: End of Fiscal Year 2024 — Long-term debt was $318.531 million, providing a baseline for the significant increase observed by September 30, 2025.

Glossary

Consolidated Statements of Income/(Loss)

A financial statement that reports a company's financial performance over a specific accounting period, showing revenues, expenses, and the resulting net income or loss. (Provides the core profitability figures, including net revenues, cost of goods sold, operating income, and net income/(loss) for the periods presented.)

Cost of Goods Sold (COGS)

The direct costs attributable to the production or purchase of the goods sold by a company during a period. (A significant increase in COGS ($311.372M in Q3 2025 vs. $208.002M in Q3 2024) was a primary driver of the company's net loss.)

Operating Income/(Loss)

A measure of a company's profit after deducting operating expenses from operating revenues. It excludes interest and taxes. (Shows the profitability of the company's core business operations. A substantial operating loss of $(116.507M) in Q3 2025 indicates severe operational challenges.)

Contract Loss Provision

An accounting charge taken when it is probable that the costs of fulfilling a contract will exceed the revenue expected from it. (A $139.665 million provision in the AEC segment was the main reason for the large operating loss in Q3 2025.)

Treasury Shares

Shares that a company has repurchased from the open market. These shares can be held for future use or retired. (The company's purchase of $170.964 million in treasury shares during the nine months ended September 30, 2025, is a significant use of cash.)

Long-Term Debt

Financial obligations that are due more than one year from the balance sheet date. (The increase in long-term debt to $480.631 million raises concerns about the company's financial leverage and ability to service its debt.)

Year-Over-Year Comparison

Compared to the prior year's Q3 2024, Albany International Corp. has experienced a dramatic financial deterioration. Net revenues have fallen by 12.4% from $298.386 million to $261.434 million. More alarmingly, the company swung from a net income of $18.221 million to a net loss of $97.638 million. This reversal is largely due to a massive increase in the cost of goods sold and a significant contract loss provision in the AEC segment, which drove operating income from a positive $25.171 million to a loss of $(116.507) million. Long-term debt has also increased substantially, indicating a weaker financial position.

Key Financial Figures

• $0.001 — which registered Class A Common Stock, $0.001 par value per share AIN The New York St

Filing Documents

• ain-20250930.htm (10-Q) — 1729KB
• ain-20250930xex31111.htm (EX-31.1) — 10KB
• ain-20250930xex31211.htm (EX-31.2) — 10KB
• ain-20250930xex32111.htm (EX-32.1) — 6KB
• 0001628280-25-050028.txt ( ) — 10531KB
• ain-20250930.xsd (EX-101.SCH) — 57KB
• ain-20250930_cal.xml (EX-101.CAL) — 89KB
• ain-20250930_def.xml (EX-101.DEF) — 336KB
• ain-20250930_lab.xml (EX-101.LAB) — 706KB
• ain-20250930_pre.xml (EX-101.PRE) — 543KB
• ain-20250930_htm.xml (XML) — 2168KB

Financial information

Part I Financial information Item 1.

Financial Statements

Financial Statements C onsolidated statements of income – three and nine months ended September 30, 2025 and 2024 1 C onsolidated statements of comprehensive income/(loss) – three and nine months ended September 30, 2025 and 2024 2 C onsolidated balance sheets as of September 30, 2025 and December 31, 2024 3 C onsolidated statements of cash flows – nine months ended September 30, 2025 and 2024 4

Notes to consolidated financial statements

Notes to consolidated financial statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Forward-looking statements

Forward-looking statements 25 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 36 Item 4.

Controls and Procedures

Controls and Procedures 36

Other Information

Part II Other Information Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 37 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37 Item 3. Defaults upon Senior Securities 37 Item 4. Mine Safety Disclosures 37 Item 5. Other Information 38 Item 6. Exhibits 39 Index

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF INCOME/(LOSS) (in thousands, except per share amounts) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues $ 261,434 $ 298,386 $ 861,607 $ 943,710 Cost of goods sold 311,372 208,002 717,552 632,257 Gross profit/(loss) ( 49,938 ) 90,384 144,055 311,453 Selling, general, and administrative expenses 51,905 52,097 164,219 162,447 Technical and research expenses 11,467 10,844 35,915 35,369 Restructuring expenses, net 3,197 2,272 9,895 6,584 Operating income/(loss) ( 116,507 ) 25,171 ( 65,974 ) 107,053 Interest expense/(income), net 5,897 2,411 14,702 8,680 Other expense/(income), net ( 347 ) 3,257 4,170 5,932 Income (loss) before income taxes ( 122,057 ) 19,503 ( 84,846 ) 92,441 Income tax expense/(benefit) ( 24,419 ) 1,282 ( 13,889 ) 22,131 Net income/(loss) ( 97,638 ) 18,221 ( 70,957 ) 70,310 Net income/(loss) attributable to the noncontrolling interest 122 192 265 366 Net income/(loss) attributable to the Company $ ( 97,760 ) $ 18,029 $ ( 71,222 ) $ 69,944 Earnings per share attributable to Company shareholders - Basic $ ( 3.37 ) $ 0.58 $ ( 2.38 ) $ 2.24 Earnings per share attributable to Company shareholders - Diluted $ ( 3.37 ) $ 0.57 $ ( 2.38 ) $ 2.23 Shares of the Company used in computing earnings per share: Basic 29,012 31,251 29,914 31,234 Diluted 29,012 31,367 29,914 31,333 Dividends declared per Class A share $ 0.27 $ 0.26 $ 0.81 $ 0.78 The accompanying notes are an integral part of the consolidated financial statements 1 Index ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (in thousands) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income/(loss) $ ( 97,638 ) $ 18,221 $ ( 70,957 ) $ 70,310 Other comprehensive income/(loss), before tax: Foreign currency translation and other adj

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Significant Accounting Policies Basis of Presentation In the opinion of management, the accompanying consolidated financial information reflects all adjustments necessary for a fair presentation of Albany International Corp.'s ("Albany", the "Registrant", the "Company", "we", "us", or "our") financial position, results of operations and cash flows for the interim periods presented, but does not include all disclosures required by the accounting principles generally accepted in the United States ("GAAP"). All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in the accounting for, among others, revenue recognition, contract profitability, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, financial instruments, including derivatives, pension and other postretirement benefits, stock-based compensation, goodwill and intangible assets, contingencies, income taxes, and other accruals. Our estimates are based on historical experience and on various other assumptions, which are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future perio

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