Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue Recognition [Abstract]

Schedule of Consolidated Balance Sheet

The table below presents the cumulative effect of changes made to our December 31, 2017 Consolidated Balance Sheet as the result of adoption of ASC 606:

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

(unaudited)

	As previously reported at December 31, 2017		Adjustments Increase/(decrease)		Opening balance, as adjusted, January 1, 2018
ASSETS
Cash and cash equivalents	$183,727		$     -		$183,727
Accounts receivable, net	202,675		10,210		212,885
Contract assets	-		44,872		44,872
Inventories	136,519		(47,054	)	89,465
Income taxes prepaid and receivable	6,266		-		6,266
Prepaid expenses and other current assets	14,520		-		14,520
Total current assets	543,707		8,028		551,735
Property, plant and equipment, net	454,302		-		454,302
Intangibles, net	55,441		-		55,441
Goodwill	166,796		-		166,796
Deferred income taxes	68,648		1,756		70,404
Noncurrent receivables	32,811		-		32,811
Other assets	39,493		1,119		40,612
Total assets	$1,361,198		$10,903		$1,372,101
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable	$262		$     -		$262
Accounts payable	44,899		-		44,899
Accrued liabilities	105,914		16,808		122,722
Current maturities of long-term debt	1,799		-		1,799
Income taxes payable	8,643		-		8,643
Total current liabilities	161,517		16,808		178,325
Long-term debt	514,120		-		514,120
Other noncurrent liabilities	101,555		-		101,555
Deferred taxes and other liabilities	10,991		52		11,043
Total liabilities	788,183		16,860		805,043
SHAREHOLDERS' EQUITY
Preferred stock, par value $5.00 per share;
authorized 2,000,000 shares; none issued	-		-		-
Class A Common Stock, par value $.001 per share;
authorized 100,000,000 shares; issued 37,395,753 in
2017 and 37,319,266 in 2016	37		-		37
Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and
outstanding 3,233,998 in 2017 and 2016	3		-		3
Additional paid in capital	428,423		-		428,423
Retained earnings	534,082		(5,630	)	528,452
Accumulated items of other comprehensive income:
Translation adjustments	(87,318	)	-		(87,318	)
Pension and postretirement liability adjustments	(50,536	)	-		(50,536	)
Derivative valuation adjustment	1,953		-		1,953
Treasury stock (Class A), at cost 8,431,335 shares in
2017 and 8,443,444 shares in 2016	(256,876	)	-		(256,876	)
Total Company shareholders' equity	569,768		(5,630	)	564,138
Noncontrolling interest	3,247		(327	)	2,920
Total equity	573,015		(5,957	)	567,058
Total liabilities and shareholders' equity	$1,361,198		$10,903		$1,372,101

Schedule of Summary of Composition of Each Business Segment

The following table provides a summary of the composition of each business segment:

Segment	Unit	Principal Product or Service	Principal Locations
Machine Clothing (MC)	Machine Clothing	Paper machine clothing: Permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, and pulp Engineered fabrics: Belts used in the manufacture of nonwovens, fiber cement and several other industrial applications	World-wide
Albany Engineered Composites (AEC)	Albany Safran Composites (ASC)	3D-woven, injected composite components for aircraft engines	Rochester, NH, Commercy, France, Queretero, Mexico
	Airframe and engine  Components (Other AEC)	Composite airframe and engine components for military and commercial aircraft	Salt Lake City, UT Boerne, TX Queretero, Mexico

Schedule of Disaggregate Revenue for Each Business Segment

The following table disaggregates revenue for each business segment by timing of revenue recognition:

	For the Three Months Ended
	March 31, 2018
(in thousands)	Point in Time Revenue Recognition	Over Time Revenue Recognition	Total
Machine Clothing	$147,351	$800	$148,151
Albany Engineered Composites
ASC	-	40,781	40,781
Other AEC	6,040	35,009	41,049
Total Albany Engineered Composites	6,040	75,790	81,830
Total Revenue	$153,391	$76,590	$229,981

Schedule of Disaggregate MC Segment Revenue by Significant Product or Service

The following table disaggregates MC segment revenue by significant product or service (paper machine clothing (PMC) and engineered fabrics), and, for PMC, the geographical region to which the paper machine clothing was sold:

	For the Three Months Ended
(in thousands)	March 31, 2018
Americas PMC	$69,858
Eurasia PMC	56,933
Engineered Fabrics	21,360
Total Machine Clothing Net sales	$148,151

Schedule of Consolidated Statement of Income

The following tables show the balances as reported for the period ended March 31, 2018, and how the consolidated financial statements would have appeared if we had not adopted ASC 606.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENT OF INCOME

(in thousands, except per share amounts)

(unaudited)

	As reported for the Three Months Ended March 31, 2018	Adjustments to reverse effects of ASC 606		As adjusted for the Three months ended March 31, 2018 to exclude adoption of ASC 606
Net Sales	$229,981	($8,434	)	$221,547
Cost of goods sold	148,330	(6,526	)	141,804
Gross profit	81,651	(1,908	)	79,743
Selling, general, and administrative expenses	41,930	(60	)	41,870
Technical and research expenses	10,317	-		10,317
Restructuring expenses, net	8,573	-		8,573
Operating income	20,831	(1,848	)	18,983
Interest expense, net	4,288	-		4,288
Other expense, net	1,452	-		1,452
Income before income taxes	15,091	(1,848	)	13,243
Income tax expense	4,609	(601	)	4,008
Net income	10,482	(1,247	)	9,235
Net income attributable to the noncontrolling interest	237	(57	)	180
Net income attributable to the Company	$10,245	($1,190	)	$9,055
Earnings per share attributable to Company shareholders - Basic	$0.32	($0.04	)	$0.28
Earnings per share attributable to Company shareholders - Diluted	$0.32	($0.04	)	$0.28

Schedule of Consolidated Statement of Comprehensive Income (Loss)

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS)

(in thousands)

(unaudited)

	As reported for the Three Months Ended March 31, 2018		Adjustments to reverse effects of ASC 606		As adjusted for the Three months ended March 31, 2018 to exclude adoption of ASC 606
Net income	$10,482		($1,247	)	$9,235
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments	17,505		(308	)	17,197
Amortization of pension liability adjustments:
Prior service credit	(1,114	)	-		(1,114	)
Net actuarial loss	1,297		-		1,297
Payments related to interest rate swaps included in earnings	180		-		180
Derivative valuation adjustment	5,715		-		5,715
Income taxes related to items of other comprehensive income/(loss):
Pension/postretirement plan remeasurement	-		-		-
Amortization of pension liability adjustment	(55	)	-		(55	)
Payments related to interest rate swaps included in earnings	(43	)	-		(43	)
Derivative valuation adjustment	(1,372	)	-		(1,372	)
Comprehensive income	32,595		(1,555	)	31,040
Comprehensive income attributable to the noncontrolling interest	230		(57	)	173
Comprehensive income attributable to the Company	$32,365		($1,498	)	$30,867

Schedule of Consolidated Balance Sheets

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

(unaudited)

	As reported March 31, 2018		Adjustments to reverse effects of ASC 606		As adjusted for the Three months ended March 31, 2018 to exclude adoption of ASC 606
ASSETS
Cash and cash equivalents	$151,426		$    -		$151,426
Accounts receivable, net	248,538		(21,720	)	226,818
Contract assets	42,895		(42,895	)	-
Inventories	100,034		53,752		153,786
Income taxes prepaid and receivable	6,132		-		6,132
Prepaid expenses and other current assets	18,675		-		18,675
Total current assets	567,700		(10,863	)	556,837
Property, plant and equipment, net	459,388		-		459,388
Intangibles, net	53,881		-		53,881
Goodwill	168,311		-		168,311
Income taxes receivable and deferred	70,174		(1,155	)	69,019
Noncurrent receivables	35,338		-		35,338
Other assets	45,543		(1,256	)	44,287
Total assets	$1,400,335		($13,274	)	$1,387,061
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable	$226		$    -		$226
Accounts payable	45,694		-		45,694
Accrued liabilities	122,103		(17,624	)	104,479
Current maturities of long-term debt	1,821		-		1,821
Income taxes payable	5,182		-		5,182
Total current liabilities	175,026		(17,624	)	157,402
Long-term debt	518,656		-		518,656
Other noncurrent liabilities	100,170		-		100,170
Deferred taxes and other liabilities	11,339		(51	)	11,288
Total liabilities	805,191		(17,675	)	787,516
SHAREHOLDERS' EQUITY
Preferred stock, par value $5.00 per share;
authorized 2,000,000 shares; none issued	-		-		-
Class A Common Stock, par value $.001 per share;
authorized 100,000,000 shares; issued 37,447,669 in 2018
and 37,395,753 in 2017	37		-		37
Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and
outstanding 3,233,998 in 2018 and 2017	3		-		3
Additional paid in capital	428,859				428,859
Retained earnings	533,759		4,439		538,198
Accumulated items of other comprehensive income:
Translation adjustments	(69,672	)	(308	)	(69,980	)
Pension and postretirement liability adjustments	(50,549	)	-		(50,549	)
Derivative valuation adjustment	6,433		-		6,433
Treasury stock (Class A), at cost 8,431,335 shares in 2018
and 2017	(256,876	)	-		(256,876	)
Total Company shareholders' equity	591,994		4,131		596,125
Noncontrolling interest	3,150		270		3,420
Total equity	595,144		4,401		599,545
Total liabilities and shareholders' equity	$1,400,335		($13,274	)	$1,387,061

Schedule of Consolidated Statement of Cash Flows

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENT OF CASH FLOW

(in thousands)

(unaudited)

	As reported for the Three Months ended March 31, 2018		Adjustments to reverse effects of ASC 606		As adjusted for the Three months ended March 31, 2018 to exclude adoption of ASC 606
OPERATING ACTIVITIES
Net income	$10,482		($1,247	)	$9,235
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	18,302		-		18,302
Amortization	2,646		-		2,646
Change in other noncurrent liabilities	(377	)	-		(377	)
Change in deferred taxes and other liabilities	(784	)	1,103		319
Provision for write-off of property, plant and equipment	271		-		271
Non-cash interest expense	-		-		-
Compensation and benefits paid or payable in Class A Common Stock	289		-		289
Fair value adjustment on foreign currency option	37		-		37
Changes in operating assets and liabilities that (used)/provided cash:
Accounts receivable	(31,467	)	7,324		(24,143	)
Contract assets	2,116		(2,116	)	-
Inventories	(9,244	)	(8,023	)	(17,267	)
Prepaid expenses and other current assets	(4,063	)	-		(4,063	)
Income taxes prepaid and receivable	102		-		102
Accounts payable	(2,538	)	-		(2,538	)
Accrued liabilities	(1,185	)	(250	)	(1,435	)
Income taxes payable	(3,431	)	-		(3,431	)
Noncurrent receivables	2,527		-		2,527
Other, net	(2,630	)	3,209		579
Net cash provided by operating activities	(18,947	)	-		(18,947	)
Net cash used in investing activities	(15,800	)			(15,800	)
Net cash used in financing activities	(2,458	)	-		(2,458	)
Effect of exchange rate changes on cash and cash equivalents	4,904		-		4,904
Decrease in cash and cash equivalents	(32,301	)	-		(32,301	)
Cash and cash equivalents at beginning of period	183,727		-		183,727
Cash and cash equivalents at end of period	$151,426		$-		$151,426