Albany International AIN

NYSE AIN

$60.61 -1.73 (-2.78%)

As of: Sep 9, 2026 · 3:59 PM EDT

Key Stats

Market Cap1.72 Bn

P/E-34.07

P/S1.41

Div. Yield0.02

Total Debt (Qtr)450.67 Mn

Revenue Growth (1y) (Qtr)5.81

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About

Albany International Corp is a global leader in advanced textiles and materials processing, specializing in high-performance engineered fabrics and composite components for industries such as paper, industrial manufacturing, and aerospace. With a history dating back to 1895, the company designs and manufactures custom solutions that enhance efficiency, durability, and performance in demanding applications. Its expertise spans consumable industrial fabrics and cutting-edge…

The company generates revenue primarily through the sale of specialized engineered products. In its Machine Clothing segment, Albany supplies consumable fabrics and belts essential for paper production, nonwovens, and other industrial processes, which are customized for each customer’s machinery and operational needs. The Albany Engineered Composites segment derives income from the production of advanced composite components for aerospace and defense applications, including fan blades, structural parts, and thermal protection systems. Revenue is also generated through long-term supply contracts, government contracts, and customer-funded research and development initiatives.

The company operates through the following segments:

Machine Clothing: This segment is the world’s leading producer of custom-designed fabrics and high-speed process belts used in paper manufacturing, including forming, pressing, and drying fabrics. It also supplies engineered fabrics for nonwovens, fiber cement, and other industrial applications, with products tailored to improve production efficiency and reduce operational costs. The segment’s offerings are consumable, ensuring recurring demand from customers across global markets.
Albany Engineered Composites: This segment manufactures highly engineered composite components for aerospace, defense, and space applications, leveraging proprietary 3D-woven technology to produce lightweight, high-strength parts. Key products include fan blades and cases for commercial aircraft engines, structural components for military aircraft and missiles, and thermal protection systems for hypersonic applications. The segment serves major aerospace original equipment manufacturers and defense contractors under long-term supply agreements.

Albany International Corp holds a dominant position in its core markets, underpinned by technological innovation and deep industry expertise. In the Machine Clothing segment, the company is the global leader, competing on the basis of product performance, customization, and energy efficiency. Its competitive advantage lies in its ability to design fabrics that reduce energy consumption and improve resource efficiency for paper manufacturers, a critical factor in an industry facing sustainability pressures. In the aerospace composites market, Albany differentiates itself through its proprietary 3D-woven technology, which enables the production of components with superior strength-to-weight ratios compared to traditional metals and laminated composites. Key competitors include other advanced materials and textile manufacturers, though Albany’s long-standing customer relationships and specialized R&D capabilities provide a strong moat.

The company’s customer base is diverse and globally distributed. In the Machine Clothing segment, Albany serves paper manufacturers, nonwovens producers, and industrial fabric users, with no single customer accounting for more than 10% of segment revenue. The Albany Engineered Composites segment’s largest customer is SAFRAN, which accounted for approximately 15% of consolidated net revenues in 2025. Other significant customers include aerospace and defense contractors such as Boeing, Lockheed Martin, and the U. S. government, as well as commercial aircraft programs like the Airbus A320neo, Boeing 737 MAX, and COMAC C919. The segment also supplies components for military platforms, including the F-35 fighter jet and CH-53K helicopter.

Investment Thesis

▲ Bull case

The company is experiencing strong volume growth in its Engineered Composites segment driven by ramp up of key programs such as the LEAP engine and the Geared Turbofan contract with Pratt Whitney which leverages its expertise in high performance composite structures and is expected to contribute meaningfully to revenue over the next several years. This growth is supported by a robust pipeline of new business opportunities that management highlighted as continuing to expand as they focus on applications where their products deliver greater strength and lighter weight solutions. The increase in volume is not merely a cyclical rebound but reflects structural demand from commercial aerospace recovery and sustained defense spending on platforms like the F 35 missile systems and the CH 53K helicopter. As these programs mature the company stands to benefit from operating leverage and incremental margin expansion once the current mix shift toward lower margin work normalizes. The market may be underestimating the durability of this demand tailwind and the potential for the Engineered Composites business to become a larger share of total earnings over time.
Machine Clothing shows signs of stabilization in China with improving order rates and a positive trend in the tissue market globally which provides a counterbalance to the weakness seen in traditional paper machine belts. Management noted that the recent equipment failure at one facility was overcome faster than expected and that the remaining lost volume is on track to be recovered by year end through the relocation of a machine from a closed site. This ability to quickly restore production demonstrates operational resilience and reduces the risk of prolonged earnings disruption. The underlying demand for paper machine consumables remains tied to global paper production which is expected to stay steady supporting baseline cash generation. Investors may be overlooking the company’s capacity to bounce back from short term setbacks while maintaining its core profitability in this segment.
The strategic review of the Amelia Earhart facility in Salt Lake City which houses the CH 53K program is progressing on schedule and could unlock value through a potential sale partnership or restructuring that would free capital for higher returning initiatives. While details remain confidential the completion of a stand alone analysis with PwC indicates a serious evaluation process that may result in a transaction that improves the overall asset mix. Proceeds from such a move could be used to reduce debt fund growth investments or increase shareholder returns thereby enhancing total shareholder value. The market has not fully priced in the possibility of a near term catalyst from this strategic initiative.
Continuous improvement initiatives in the Machine Clothing business particularly in Europe are delivering margin stability on a constant currency basis despite lower volumes reflecting the benefits of integration activities and efficiency gains. Management cited that on a constant currency basis margins were stable supported by these initiatives indicating that the underlying business health is stronger than reported GAAP numbers suggest. This operational discipline provides a buffer against foreign exchange headwinds and positions the segment to expand margins when volume rebounds. The market may be missing the positive impact of these internal programs on long term profitability.
The company maintains a solid liquidity position with approximately 446 million dollars of available capital including revolver availability giving it flexibility to fund organic growth investments pursue strategic acquisitions and return cash to shareholders through dividends and share repurchases. This financial flexibility reduces reliance on external financing and allows management to act on opportunities without jeopardizing balance sheet strength. The balanced capital allocation approach outlined by management supports both reinvestment in the business and shareholder friendly policies. Investors may be underappreciating the downside protection that this liquidity buffer provides in a volatile macro environment.

The company is experiencing strong volume growth in its Engineered Composites segment driven by ramp up of key programs such as the LEAP engine and the Geared Turbofan contract with Pratt Whitney which leverages its expertise in high performance composite structures and is expected to contribute meaningfully to revenue over the next several years. This growth is supported by a robust pipeline of new business opportunities that management highlighted as continuing to expand as they focus on applications where their products deliver greater strength and lighter weight solutions. The increase in volume is not merely a cyclical rebound but reflects structural demand from commercial aerospace recovery and sustained defense spending on platforms like the F 35 missile systems and the CH 53K helicopter. As these programs mature the company stands to benefit from operating leverage and incremental margin expansion once the current mix shift toward lower margin work normalizes. The market may be underestimating the durability of this demand tailwind and the potential for the Engineered Composites business to become a larger share of total earnings over time.
Machine Clothing shows signs of stabilization in China with improving order rates and a positive trend in the tissue market globally which provides a counterbalance to the weakness seen in traditional paper machine belts. Management noted that the recent equipment failure at one facility was overcome faster than expected and that the remaining lost volume is on track to be recovered by year end through the relocation of a machine from a closed site. This ability to quickly restore production demonstrates operational resilience and reduces the risk of prolonged earnings disruption. The underlying demand for paper machine consumables remains tied to global paper production which is expected to stay steady supporting baseline cash generation. Investors may be overlooking the company’s capacity to bounce back from short term setbacks while maintaining its core profitability in this segment.
The strategic review of the Amelia Earhart facility in Salt Lake City which houses the CH 53K program is progressing on schedule and could unlock value through a potential sale partnership or restructuring that would free capital for higher returning initiatives. While details remain confidential the completion of a stand alone analysis with PwC indicates a serious evaluation process that may result in a transaction that improves the overall asset mix. Proceeds from such a move could be used to reduce debt fund growth investments or increase shareholder returns thereby enhancing total shareholder value. The market has not fully priced in the possibility of a near term catalyst from this strategic initiative.
Continuous improvement initiatives in the Machine Clothing business particularly in Europe are delivering margin stability on a constant currency basis despite lower volumes reflecting the benefits of integration activities and efficiency gains. Management cited that on a constant currency basis margins were stable supported by these initiatives indicating that the underlying business health is stronger than reported GAAP numbers suggest. This operational discipline provides a buffer against foreign exchange headwinds and positions the segment to expand margins when volume rebounds. The market may be missing the positive impact of these internal programs on long term profitability.
The company maintains a solid liquidity position with approximately 446 million dollars of available capital including revolver availability giving it flexibility to fund organic growth investments pursue strategic acquisitions and return cash to shareholders through dividends and share repurchases. This financial flexibility reduces reliance on external financing and allows management to act on opportunities without jeopardizing balance sheet strength. The balanced capital allocation approach outlined by management supports both reinvestment in the business and shareholder friendly policies. Investors may be underappreciating the downside protection that this liquidity buffer provides in a volatile macro environment.

▼ Bear case

The shift in revenue mix toward the Engineered Composites segment which carries structurally lower margins is pressuring overall profitability as evidenced by the decline in adjusted EBITDA margin from nineteen point three% to fifteen point five% year over year. The CH 53K AFT program now contributes zero margin revenue which dilutes segment earnings and may persist if similar low margin work continues to be won. Management acknowledged that margin performance is in line with expectations due to mix but did not provide a clear timeline for margin improvement beyond the current year. Investors may be ignoring the risk that the current mix shift could become a permanent drag on earnings if higher margin Machine Clothing volume does not recover.
Machine Clothing continues to face over capacity in China driven by aggressive investment in new paper machines which has created a structural imbalance between belt demand and machine production capacity. Management described uncertainty over how long it will take for paper production to normalize and whether the over capacity is cyclical or a longer term issue. The stabilization noted in the quarter is viewed as tentative and visibility beyond the near term remains limited. If the over capacity proves to be structural the segment could experience sustained pressure on volumes and pricing undermining the assumed recovery.
The company’s effective tax rate rose to thirty three point one% from twenty six point six% year over year largely due to the absence of favorable discrete items such as valuation allowance releases that benefited the prior period. This increase reduces net income and could persist if the company does not generate similar tax benefits in future quarters. Management did not outline specific actions to mitigate the tax rate increase leaving investors exposed to a higher than expected tax burden. The market may be underestimating the impact of a higher tax rate on earnings per share.
Interest expense increased to five point five million dollars reflecting higher borrowing costs and a net debt position of approximately three hundred fifty four million dollars which raises financial leverage. While the company states it has sufficient liquidity the rising cost of debt could constrain free cash flow and limit flexibility for future investments or shareholder returns if earnings do not grow sufficiently. The balance sheet shows a significant amount of debt relative to equity which may become a concern if operating cash flow weakens. Investors might be overlooking the risk that higher interest expenses could erode profitability more than anticipated.
Defense related programs such as the F 35 missile systems and missile programs like JASSM and LRASM are subject to government budget cycles and potential delays or reductions in funding which could affect the volume upside currently being realized. Management noted that they have been asked to increase production to the highest level achievable within current capabilities but did not discuss what would happen if customer demand were to fall or if program timelines were to slip. The reliance on a limited number of high profile defense contracts introduces concentration risk that may not be fully appreciated by the market.

The shift in revenue mix toward the Engineered Composites segment which carries structurally lower margins is pressuring overall profitability as evidenced by the decline in adjusted EBITDA margin from nineteen point three% to fifteen point five% year over year. The CH 53K AFT program now contributes zero margin revenue which dilutes segment earnings and may persist if similar low margin work continues to be won. Management acknowledged that margin performance is in line with expectations due to mix but did not provide a clear timeline for margin improvement beyond the current year. Investors may be ignoring the risk that the current mix shift could become a permanent drag on earnings if higher margin Machine Clothing volume does not recover.
Machine Clothing continues to face over capacity in China driven by aggressive investment in new paper machines which has created a structural imbalance between belt demand and machine production capacity. Management described uncertainty over how long it will take for paper production to normalize and whether the over capacity is cyclical or a longer term issue. The stabilization noted in the quarter is viewed as tentative and visibility beyond the near term remains limited. If the over capacity proves to be structural the segment could experience sustained pressure on volumes and pricing undermining the assumed recovery.
The company’s effective tax rate rose to thirty three point one% from twenty six point six% year over year largely due to the absence of favorable discrete items such as valuation allowance releases that benefited the prior period. This increase reduces net income and could persist if the company does not generate similar tax benefits in future quarters. Management did not outline specific actions to mitigate the tax rate increase leaving investors exposed to a higher than expected tax burden. The market may be underestimating the impact of a higher tax rate on earnings per share.
Interest expense increased to five point five million dollars reflecting higher borrowing costs and a net debt position of approximately three hundred fifty four million dollars which raises financial leverage. While the company states it has sufficient liquidity the rising cost of debt could constrain free cash flow and limit flexibility for future investments or shareholder returns if earnings do not grow sufficiently. The balance sheet shows a significant amount of debt relative to equity which may become a concern if operating cash flow weakens. Investors might be overlooking the risk that higher interest expenses could erode profitability more than anticipated.
Defense related programs such as the F 35 missile systems and missile programs like JASSM and LRASM are subject to government budget cycles and potential delays or reductions in funding which could affect the volume upside currently being realized. Management noted that they have been asked to increase production to the highest level achievable within current capabilities but did not discuss what would happen if customer demand were to fall or if program timelines were to slip. The reliance on a limited number of high profile defense contracts introduces concentration risk that may not be fully appreciated by the market.

Segments Breakdown of Revenue (2025)

Peer group

Peer Comparison

Companies in the Commercial Aerospace

S.No.	Ticker	Company	match	Market Cap	P/E	P/S	Total Debt (Qtr)
1	RTX	RTX Corp	primary	267.14 Bn	32.88	2.86	37.38 Bn
2	BA	Boeing Co	primary	163.65 Bn	78.30	1.74	50.16 Bn
3	HWM	Howmet Aerospace Inc.	primary	93.36 Bn	49.93	10.24	4.95 Bn
4	HON	Honeywell International Inc	primary	65.01 Bn	8.00	1.71	39.29 Bn
5	TDG	TransDigm Group INC	primary	64.58 Bn	33.79	6.45	33.62 Bn
6	HEI	Heico Corp	primary	43.72 Bn	47.92	8.45	2.54 Bn
7	AER	AerCap Holdings N.V.	primary	24.34 Bn	5.76	2.72	42.77 Bn
8	WWD	Woodward, Inc.	primary	20.10 Bn	36.41	4.79	1.80 Bn

Albany International AIN

About

Investment Thesis

Geographical Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

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