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Reportable Segments and Geographic Data
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Reportable Segments and Geographic Data Reportable Segments and Geographic Data
The Company is organized based on the nature of its products and is composed of two reportable segments 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. The Company has not aggregated operating segments for purposes of identifying reportable segments. As of December 31, 2023, the operating segments were Machine Clothing (“MC”), and Albany Engineered Composites ("AEC”).
The accounting policies of the segments are the same as those described in Note 1, Accounting Policies, of the Notes to the Consolidated Financial Statements. Corporate expenses include wages and benefits for corporate headquarters personnel, costs related to information systems development and support, and professional fees related to legal, audit, and other activities. These costs are not allocated to the reportable segments because the decision-making for these functions lies outside of the segments.
Machine Clothing:
The MC segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, pulp, nonwovens, fiber cement and 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 for MC 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 manufacturing of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure.
Albany Engineered Composites:
The AEC 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, 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.
The LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircrafts. AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net revenues in 2023. In 2023, SAFRAN leased manufacturing space from AEC for the GE9X program. Rent paid by SAFRAN under this lease amounted to $1.0 million in 2023 and $0.9 million in 2022. AEC sales to SAFRAN were $187.6 million in 2023, $169.3 million in 2022, and $111.6 million in 2021. The total of Accounts receivable, Contract assets and Noncurrent receivable due from SAFRAN amounted to $93.8 million and $80.8 million as of December 31, 2023 and 2022, respectively.
Other significant programs by AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for Boeing commercial programs, and specialty components for the Rolls Royce lift fan on the F-35. In 2023, approximately 39 percent of AEC net revenues were related to U.S. government contracts or programs.
The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements:
Years ended December 31,
(in thousands)
202320222021
Net revenues
Machine Clothing
$670,768 $609,461 $619,015 
Albany Engineered Composites
477,141 425,426 310,225 
Consolidated total
$1,147,909 $1,034,887 $929,240 
Depreciation and amortization
Machine Clothing
23,891 19,483 20,191 
Albany Engineered Composites
49,030 46,202 50,402 
Corporate
3,812 3,364 3,662 
Consolidated total
$76,733 $69,049 $74,255 
Operating income/(loss)
Machine Clothing
199,378 206,214 215,654 
Albany Engineered Composites
41,587 31,579 16,160 
Corporate
(73,071)(56,771)(53,803)
Operating income
$167,894 $181,022 $178,011 
Reconciling items:
Interest income
(6,566)(3,835)(2,500)
Interest expense
20,167 17,835 17,391 
Pension settlement expense— 49,128 — 
AMJP grant— — (5,832)
Other (income)/expense, net
(6,163)(14,086)3,021 
Income before income taxes
$160,456 $131,980 $165,931 
Results for the year ended December 31, 2023 include the newly acquired Heimbach for the period of ownership, which began September 1, 2023. Heimbach contributed Net revenues of $51.2 million and reduced Operating income by $6.3 million, which included depreciation expense on Property, plant, and equipment, net of $4.0 million, and amortization expense on Intangibles, net of $0.3 million.
In the third quarter of 2022, we took actions to settle certain pension plan liabilities in the U.S., leading to charges totaling $49.1 million, which were included as Corporate expenses and other. This led to a reduction of unfunded pension liabilities of $6.2 million.
A subsidiary within our MC segment has been a partner in a JV that supplies paper machine clothing products to local papermakers in Russia. In March 2022, we decided to cease doing business in Russia, including giving notice to our JV partner of our intent to exit the venture. As a result, in 2022, we recognized $1.5 million expense in the consolidated statement of operations, representing reserves against the risk of uncollectible customer receivables and obsolescence of certain inventory destined for Russian customers. We also wrote down the net book value of our investment in the aforementioned JV to reflect our intent to exit such venture, resulting in $0.8 million impairment loss during the first quarter of 2022.
The table below presents restructuring costs by reportable segment (also see Note 5, Restructuring, of the Notes to the Consolidated Financial Statements):
Years ended December 31,
(in thousands)
202320222021
Restructuring expenses, net
Machine Clothing
$282 $92 $1,202 
Albany Engineered Composites
— — 32 
Corporate expenses
— 14 97 
Total restructuring expenses, net
$282 $106 $1,331 
In the measurement of assets utilized by each reportable segment, we include Inventories, Accounts receivable, net, Contract assets, net, Noncurrent receivables, net, Property, plant and equipment, net, Intangibles, net and Goodwill.
The following table presents assets and capital expenditures by reportable segment:
As of December 31,
(in thousands)
202320222021
Segment assets
Machine Clothing
$669,907 $455,390 $459,182 
Albany Engineered Composites
800,931 717,972 652,702 
Reconciling items:
Cash
173,420 291,776 302,036 
Income taxes prepaid, receivable and deferred
33,984 23,134 28,334 
Prepaid and Other assets
156,772 153,983 113,810 
Total assets
$1,835,014 $1,642,255 $1,556,064 
Capital expenditures and purchased software
Machine Clothing
$25,258 $20,093 $20,177 
Albany Engineered Composites
56,786 73,614 31,012 
Corporate expenses2,385 2,641 2,510 
Total capital expenditures and purchased software
$84,429 $96,348 $53,699 
In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating and included a non-cash increase of $37.1 million to both Other assets and to Other noncurrent liabilities in the Consolidated Balance Sheets. Due to the non-cash nature of the transaction, those increases are excluded from amounts reported in the Consolidated Statements of Cash Flows.
The following table shows data by geographic area. Net revenues are based on the location of the operation recording the final sale to the customer. Net revenues recorded by our entity in Switzerland are derived from products sold throughout Europe and Asia, and are invoiced in various currencies.
Years ended December 31,
(in thousands)
202320222021
Net revenues
United States$649,500 $586,779 $497,231 
Switzerland115,207 119,069 128,698 
France77,573 76,826 68,929 
Brazil69,527 66,175 62,925 
China65,135 63,914 67,098 
Mexico58,874 58,519 37,547 
Germany32,239 4,461 5,308 
Other countries79,854 59,144 61,504 
Total Net revenues
$1,147,909 $1,034,887 $929,240 
Property, plant and equipment, net
United States$303,578 $278,500 $258,453 
China57,070 33,432 41,039 
Germany52,934 9,562 9,652 
Mexico46,759 42,320 40,699 
France31,069 31,382 33,802 
United Kingdom18,306 9,699 10,156 
Canada15,318 14,264 14,139 
Spain14,804 — — 
Other countries62,151 26,499 28,477 
Total Property, plant and equipment, net
$601,989 $445,658 $436,417