# ALBANY INTERNATIONAL CORP /DE/ (AIN) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-06-12  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/AIN/thesis · /stocks/AIN/memo

## Financial Snapshot

---
source: coverage-next-full
step: 04
ticker: AIN
company: Albany International Corp
date: 2026-06-12
---

### Step 04 — Financial Quality & Adversarial Sweep: Albany International Corp (AIN)

**Coverage Path:** Filings + Consensus (No earnings call transcripts)
> Transcript analysis was not performed. All analysis draws from SEC filings, investor presentations, and consensus data.

---

#### 1. Statement Quality Analysis

##### Income Statement Adjustments

**Non-recurring items distorting reported results (FY2025 primary distortion):**

| Item | FY2025 Impact | FY2024 Impact | Classification |
|------|--------------|--------------|----------------|
| CH-53K loss reserve | -$147M pre-tax (Q3 2025) | — | Non-recurring; program-specific cost overrun |
| MC restructuring charges | ~-$8M | -$13.4M | Non-recurring; facility closures SK/UK/CH |
| CFO separation costs | ~-$1M | — | Non-recurring |
| AEC program cost revisions | — | -$43M (approx.) | Non-recurring; prior period charges |
| Amortization of acquired intangibles (Heimbach) | ~-$15M | ~-$18M | Non-cash; excluded from "adjusted" metrics |

**Normalized FY2025 Income Estimate:**

| Item | GAAP | Adjustment | Adjusted |
|------|------|-----------|---------|
| Revenue | $1,183M | — | $1,183M |
| Gross Profit | $244M | +$147M CH-53K | $391M (33.1%) |
| EBIT | -$36M | +$155M (CH-53K + restructuring) | $119M (10.1%) |
| EBITDA | $52M | +$155M | $207M (17.5%) |
| Net Income | -$57M | +$140M (net of tax) | ~$83M |
| EPS Diluted | -$1.94 | +$4.72 (approx.) | ~$2.80 adj. |

The adjusted EBITDA of ~$207M in FY2025 is significantly below FY2024's $221M, partly because CH-53K charges are excluded from the add-back but underlying AEC margins were already deteriorating. True "steady-state" EBITDA (stripping all AEC program-specific charges and MC integration costs) is estimated at $200-215M in FY2025 conditions. [S2][S3]

**Ongoing SBC expense:** GAAP SBC of ~$10M in FY2025 (up from $4.7M in FY2024 — jump likely reflects equity grants to new CFO Station and accelerated vesting on CEO grants). This is modest vs. revenue (~0.8% of revenue) but should be considered in per-share economics. [S4]

**Revenue recognition quality:** MC follows ASC 606 with point-of-sale recognition (products shipped and control transferred). AEC uses percentage-of-completion for long-term contracts (cost-to-cost method). The percentage-of-completion method is inherently estimate-dependent — the $147M CH-53K reserve reflects updated cost-to-complete estimates that invalidated prior progress billings. This is the key EPS quality risk in AEC's accounting model. [S2][S3]

##### Balance Sheet Quality Assessment

**Asset quality:**

| Asset | FY2025 Value | Quality Assessment |
|-------|-------------|-------------------|
| Cash | $112.4M | Clean; revolving credit facility $800M backstop |
| Accounts Receivable | $235.1M | DSO ~72 days (vs. revenue); reasonable for global industrial |
| Inventory | $121.6M | Inventory turns ~7x (normalized); adequate for custom manufacturing |
| PP&E (net) | $482.6M | Significant manufacturing base; depreciation $88M/year ≈ CapEx run rate |
| Goodwill | $162.5M | Modest; no impairment triggered in FY2025 despite AEC losses (goodwill passed Step 1 test) |
| Other Intangibles | $21.4M | Primarily Heimbach customer relationships/technology (amortizing) |
| Total Assets | $1,719M | Asset-light MC + capital-intensive AEC = moderate asset intensity overall |

**Goodwill impairment risk:** AIN has $162.5M goodwill as of FY2025, with the majority from Heimbach ($133.5M acquisition price, significant portion allocated to goodwill). The company conducted its annual impairment test and no impairment was recorded — consistent with MC's continued profitability providing cushion. However, AEC goodwill (from earlier acquisitions) would be at risk if AEC continues to generate losses without a visible recovery path. [S2][S3]

**Contract assets / liabilities:** AEC carries significant unbilled receivables (contract assets) and deferred revenue (contract liabilities) related to percentage-of-completion accounting. These balances are large relative to segment revenue and create balance sheet complexity. Net contract asset/liability position should be monitored — a shift toward net contract liabilities (customer advances exceed unbilled receivables) would indicate AEC is being paid for work not yet performed, which has cash quality implications. [S2]

##### Cash Flow Quality

**OCF vs. Net Income reconciliation (FY2025):**

| Component | FY2025 |
|-----------|--------|
| Net Income | -$57M |
| D&A | +$88M |
| SBC | +$10M |
| CH-53K reserve (non-cash portion) | +$105M (est.) |
| Working capital changes | +$7M |
| Other | +$1M (approx.) |
| **Operating Cash Flow** | **$152.5M** |

The large gap between net income (-$57M) and OCF ($152.5M) reflects the non-cash nature of the CH-53K reserve. The charge booked to income was an accounting estimate; actual cash outflows (labor, materials on the contract) have been flowing for years and will continue. The $105M "other operating adjustments" likely captures the non-cash portion of the reserve plus any working capital release from AEC. **OCF quality in FY2025 was therefore not as clean as the headline $152.5M might suggest** — some of this simply reflects the accounting treatment of a non-cash charge reversing through working capital. [S4]

**Normalized FCF estimate (FY2026E):** If revenue reaches $1.25-1.30B and EBITDA approaches $220-230M (post-CH-53K, with AEC at modest positive margins), CapEx at ~$70-75M, and interest expense ~$30M, normalized FCF is approximately $110-130M. At 28.4M shares, that's $3.90-4.60 FCF/share — a 5.8-6.8% FCF yield at the current ~$67.63 stock price. [S7]

---

#### 2. Adversarial Research Sweep

*This section identifies negative signals — short reports, regulatory actions, litigation, disclosed risks — that could impair the investment thesis.*

##### Finding A: CH-53K Program — Existential AEC Risk

**Nature:** In Q3 2025, Albany Engineered Composites recognized a $147M loss reserve on the CH-53K heavy-lift helicopter program (Sikorsky/Lockheed Martin). This follows prior AEC cost revisions of $43.2M in FY2024 and multiple smaller charges in FY2022-FY2023.

**Specific allegations/disclosures:** The 10-K FY2025 discloses that the company's Structures Assembly business (Salt Lake City, UT facility) is under a "strategic alternatives review" led by PwC. The review considers alternatives including disposition, restructuring, or continued operation. The $147M reserve represents management's best estimate of the total losses to complete the current CH-53K contract work — but percentage-of-completion estimates are inherently uncertain.

**Assessment:** This is a disclosed and material risk, not a hidden issue. However, the repetitive nature of the AEC cost revisions (charges in FY2022, FY2023, FY2024, FY2025) raises systemic concerns about AEC's cost estimation capabilities on fixed-price contracts — not a one-time event. If the PwC review results in an exit/divestiture of Structures Assembly, the book value of the facility and associated contract assets could trigger additional accounting losses. [S3]

**Verdict:** HIGH RISK, DISCLOSED. Investor must model multiple CH-53K outcomes. Resolution (expected H1 2026, now potentially H2 2026) is the critical catalyst.

##### Finding B: CFO Departure (May 2025) — Governance Signal

**Nature:** CFO Robert Starr resigned after just ~2 years in the role (appointed April 2023, resigned May 2025). Timing coincides with the period of AEC charge accumulation.

**Context:** The company appointed an interim CFO (IR/Treasurer Chetnani), then hired Willard Station (Boeing veteran) as permanent CFO effective September 2025. Station's Boeing background is relevant given AEC's aerospace focus.

**Assessment:** CFO departures during periods of financial difficulty can signal: (a) disagreement over accounting treatment, (b) board pressure following earnings misses, or (c) natural career transitions. The relatively rapid CFO succession and the company's disclosure that Starr received separation pay ($250K + COBRA) suggest it was not a purely voluntary departure. However, the new CFO's Boeing background is a net positive for AEC oversight. No evidence of financial misconduct.

**Verdict:** MODERATE CONCERN. Monitor new CFO's messaging on AEC financial controls and cost estimation process changes.

##### Finding C: Aggressive Share Buyback Financed by Debt (FY2025)

**Nature:** In FY2025, AIN repurchased $188.5M in shares while simultaneously borrowing $125M net (net debt rose from $203M to $343M). The buyback was executed during a year of significant operating losses and while the CH-53K strategic review was ongoing.

**Assessment:** Repurchasing shares at $55-65/share (roughly where they traded in H1 2025) while the company was recording a net loss and CH-53K reserves were accumulating reflects a capital allocation choice that prioritized short-term EPS accretion and shareholder returns over balance sheet conservatism. Net debt/EBITDA (using adjusted EBITDA of ~$207M) rose to ~1.7x — not alarming but elevated for a company with unresolved program risk.

**Verdict:** YELLOW FLAG. Debt-financed buybacks during operating uncertainty increase financial risk if AEC recovery is delayed. Revolving credit facility ($800M, presumably with covenants) provides liquidity backstop, but covenant headroom should be monitored. [S3][S4]

##### Finding D: Related-Party Risk — Albany-Safran Composites LLC

**Nature:** AIN participates in a 50/50 joint venture with Safran Aircraft Engines (Albany-Safran Composites LLC) that manufactures LEAP fan blade preforms and fan cases. This JV accounts for approximately 14% of AIN's total consolidated revenues.

**Disclosure review:** The JV is disclosed in 10-K filings as an equity method investment (if AIN accounts for it under the equity method) or as consolidated revenue (if controlling interest). The "approximately 14%" revenue figure suggests the JV revenue is consolidated. The JV adds complexity: (a) AIN shares JV governance with Safran, a major aerospace OEM, (b) JV contract pricing is negotiated between parties rather than set by market, and (c) the JV structure means AIN cannot independently expand LEAP capacity without Safran's agreement. [S2]

**Assessment:** The JV structure is well-established (30+ years) and critical to AIN's AEC revenue. No evidence of adverse related-party terms. However, the exclusive nature of the JV means AIN is entirely dependent on Safran's satisfaction with pricing terms for LEAP components — any renegotiation could affect the 14% of consolidated revenue this program represents.

**Verdict:** LOW RISK currently. Monitor JV agreement renewal timeline and any renegotiation disclosures.

##### Finding E: Italy Facility Consolidation (2025) — Minor Integration Risk

**Nature:** Albany International Italia is consolidating manufacturing from the Ballo facility to Merone, announced in February 2025. This follows South Korea, UK (Rochdale), and Switzerland plant closures in 2024.

**Assessment:** Serial facility closures suggest active right-sizing of the MC manufacturing footprint post-Heimbach integration. Costs of closure (severance, asset impairment) are recorded as restructuring charges. Multiple closures in rapid succession increase execution risk of maintaining quality and delivery during transitions. No evidence of material customer loss from closures.

**Verdict:** LOW RISK.

##### Finding F: No Active Short Reports or SEC Investigations Found

Adversarial research sweep did not identify:
- Published short-seller reports targeting AIN
- SEC enforcement actions or formal investigations
- Class action lawsuits beyond routine shareholder litigation related to the FY2025 AEC charges
- Accounting restatements (restated years)
- Material weaknesses in internal controls (clean auditor opinions from PricewaterhouseCoopers)

**Verdict:** No external adversarial risk signals beyond disclosed program risk. PwC as auditor and strategic reviewer on CH-53K simultaneously is technically a conflict of interest to note, though both engagements are standard practices with different practice groups.

---

#### 3. Earnings Quality Summary

| Metric | Assessment |
|--------|-----------|
| Revenue recognition | Generally clean; AEC POC method carries estimation risk |
| Cash conversion | Strong in MC; AEC non-cash charges distorted FY2025 OCF |
| SBC expense | Modest (~$10M, <1% revenue); not a meaningful dilution concern |
| Goodwill risk | Manageable ($162.5M); MC profitability protects against test |
| Debt quality | Unsecured revolver ($800M); no near-term maturity risk |
| Accounting conservatism | FY2025 $147M reserve suggests management "kitchen-sinked" AEC — the degree of reserve conservatism vs. adequacy will only be visible over the next 12-18 months |
| Related-party risk | Safran JV well-established; low near-term risk |

---

#### Source Index

| ID | Source |
|----|--------|
| S1 | SEC EDGAR XBRL — Albany International Corp (CIK 3492) |
| S2 | Albany International 10-K FY2024 (filed Feb 2025) |
| S3 | Albany International 10-K FY2025 / Q1 2026 10-Q (filed Apr–May 2026) |
| S4 | StockAnalysis.com — AIN financial data |
| S5 | Albany International DEF 14A 2025 Proxy Statement |
| S6 | Albany International Investor Presentation, June 2025 |
| S7 | Consensus / market data (MarketBeat, Yahoo Finance, June 2026) |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/AIN/fundamental

## Navigation

- Overview: /stocks/AIN
- Financials (this page): /stocks/AIN/financials
- Thesis: /stocks/AIN/thesis
- Investment Memo: /stocks/AIN/memo
- Coverage universe: /stocks