Albany International Corp (AIN) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to Albany International Corp. second quarter 2024 earnings conference call. (Operator Instructions)

女士們先生們，謝謝你們的支持。此時此刻，我歡迎大家參加奧爾巴尼國際公司 2024 年第二季財報電話會議。（操作員說明）

I would now like to turn the conference over to JC Chetnani, VP IR and Treasurer. Please go ahead.

現在我想將會議交給副總裁兼財務主管 JC Chetnani。請繼續。

Thank you, Debbie, and good morning, everyone. Welcome to Albany International's Second Quarter 2024 Earnings Conference Call. As a reminder for those listening on the call, please refer to our press release issued last night detailing our quarterly financial results. Contained in the text of the release is the notice regarding our forward-looking statements and the use of certain non-GAAP financial measures and their reconciliation to GAAP.

謝謝你，黛比，大家早安。歡迎參加奧爾巴尼國際 2024 年第二季財報電話會議。提醒那些正在聽電話的人，請參閱我們昨晚發布的新聞稿，其中詳細介紹了我們的季度財務業績。新聞稿正文中包含有關我們的前瞻性陳述以及某些非公認會計準則財務指標的使用及其與公認會計準則的調節的通知。

For the purposes of this conference call, those same statements apply to our verbal remarks this morning. Today, we will make statements that are forward-looking and contain a number of risks and uncertainties, which could cause actual results to differ from those expressed or implied. For a full discussion of these risks and uncertainties, please refer to both our earnings release of August 6, 2024, and as well as our SEC filings, including our 10-K.

出於本次電話會議的目的，這些相同的聲明也適用於我們今天上午的口頭發言。今天，我們將做出前瞻性聲明，並包含許多風險和不確定性，這些風險和不確定性可能導致實際結果與明示或暗示的結果不同。有關這些風險和不確定性的完整討論，請參閱我們 2024 年 8 月 6 日發布的收益報告以及我們向 SEC 提交的文件，包括我們的 10-K。

Now I will turn the call over to Gunnar Kleveland, our President and CEO, who will provide opening remarks. Gunnar?

現在我將把電話轉給我們的總裁兼執行長古納爾·克利夫蘭 (Gunnar Kleveland)，他將致開幕詞。貢納爾？

Thank you, JC. Good morning, and welcome, everyone. Thank you for joining our second quarter earnings call. I will provide an overview of our business performance. Rob will later discuss our financial results in detail.

謝謝你，JC。早上好，歡迎大家。感謝您參加我們的第二季財報電話會議。我將概述我們的業務績效。羅布稍後將詳細討論我們的財務表現。

Overall, we had another good quarter as our businesses delivered strong results and are responding well to their industry challenges. We continue to deliver strong profitability and have further strengthened our balance sheet. Free cash flow was strong with $64 million generated in the second quarter. Machine Clothing revenues at $194 million grew year-over-year driven by our Heimbach acquisition, slightly offset by lower organic demand, primarily in Europe and North America.

總體而言，我們又度過了一個不錯的季度，因為我們的業務取得了強勁的業績，並且很好地應對了行業挑戰。我們繼續提供強勁的獲利能力，並進一步加強我們的資產負債表。第二季自由現金流強勁，產生 6,400 萬美元。在我們收購 Heimbach 的推動下，機器服裝收入達到 1.94 億美元，比去年同期成長，但被主要是歐洲和北美的有機需求下降略有抵消。

Our global order backlog remains stable. We continue to make progress with the integration of Heimbach. Our performance has improved sequentially quarter-over-quarter with a 220 basis point expansion in Machine Clothing. Adjusted EBITDA margins and we took further action on our global footprint with the consolidation of 2 U.K. facilities.

我們的全球訂單積壓保持穩定。我們在 Heimbach 的整合中不斷取得進展。我們的業績季比有所改善，機器服裝業務成長了 220 個基點。調整後的 EBITDA 利潤率，我們對我們的全球足跡採取了進一步行動，合併了 2 個英國工廠。

We successfully implemented SAP at Heimbach in the second quarter, which will enable us to further execute on our integration plans for the second half of this year. We commend the team for executing the implementation with no operational disruption, and I thank them for all their hard work.

第二季我們在 Heimbach 成功實施了 SAP，這將使我們能夠進一步執行今年下半年的整合計畫。我們讚揚該團隊在沒有造成營運中斷的情況下執行實施，我感謝他們的辛勤工作。

Moving to our Engineered Composites segment. We are pleased to report that during the quarter, we received over $200 million in new orders, bringing our year-to-date orders to over $900 million. This will further drive revenue growth in 2025 and beyond. For the quarter, we delivered 20% year-over-year top line growth as our current programs ramp up. We see growth in our commercial markets, especially in Space and other emerging platforms.

轉向我們的工程複合材料領域。我們很高興地報告，本季我們收到了超過 2 億美元的新訂單，使我們年初至今的訂單超過 9 億美元。這將進一步推動 2025 年及以後的營收成長。隨著我們目前專案的推進，本季我們的營收年增了 20%。我們看到商業市場的成長，尤其是太空和其他新興平台。

Our Defense business is also growing, primarily the CH-53K and JASSM platforms, partially offset by the Joint Strike Fighter program. However, our profitability for the quarter is lower with adjusted EBITDA margins at 16.9%, lower by 130 basis points versus the prior year, driven by inefficiencies related to program ramp-up. We expect margins to improve in the second half due to operational improvements and program mix.

我們的國防業務也在成長，主要是 CH-53K 和 JASSM 平台，但部分被聯合攻擊戰鬥機計畫所抵消。然而，由於與計劃提升相關的效率低下，我們本季的獲利能力較低，調整後 EBITDA 利潤率為 16.9%，比前一年下降了 130 個基點。我們預計，由於營運改善和項目組合，下半年利潤率將有所改善。

Turning to the LEAP program. We've been working closely with Safran to adjust our 2024 production plan in light of the continued situation at Boeing. We now anticipate LEAP revenue to be slightly down this year versus the prior year, with minimal impact to overall profitability. Despite changes to lead production, we're maintaining our full year AEC guide as all the programs will serve to offset this reduction. Overall, our business is performing well.

轉向 LEAP 計劃。我們一直在與賽峰集團密切合作，根據波音公司的持續情況調整 2024 年的生產計畫。我們現在預計 LEAP 今年的營收將比去年略有下降，對整體獲利能力的影響最小。儘管鉛產量發生變化，我們仍維持全年 AEC 指南，因為所有計劃都將抵消這一減少。總體而言，我們的業務表現良好。

Our margins in Machine Clothing are improving as we execute our Heimbach integration plans and substantial new business wins at AEC have improved our backlog.

隨著我們執行 Heimbach 整合計劃，我們在機器服裝領域的利潤正在提高，而 AEC 取得的大量新業務也改善了我們的積壓訂單。

I would also like to welcome Chris Stone as President of AEC. Chris brings strategic capability combined with experience in leading complex operations and supply chain. These skills will be critical to AEC as they continue to execute our growth strategy.

我還要歡迎克里斯·斯通 (Chris Stone) 擔任 AEC 主席。克里斯帶來了戰略能力以及領導複雜營運和供應鏈的經驗。這些技能對於 AEC 繼續執行我們的成長策略至關重要。

And with that, I'll hand it over to Rob to provide more details on the quarter. Rob?

接下來，我會將其交給 Rob，以提供有關本季度的更多詳細資訊。搶？

Thank you, Gunnar, and good morning, everyone. I will review our second quarter results of 2024 and then provide our outlook for the balance of the year. Consolidated net sales came in at $332 million, up 21.1% from the second quarter of last year. The growth was driven by a combination of Heimbach revenues and organic growth at Engineered Composites.

謝謝你，古納爾，大家早安。我將回顧 2024 年第二季的業績，然後提供我們對今年剩餘時間的展望。綜合淨銷售額為 3.32 億美元，比去年第二季成長 21.1%。這一增長是由 Heimbach 收入和工程複合材料的有機增長共同推動的。

Machine Clothing net sales of $194 million increased 21.6% versus the second quarter of the prior year, driven by Heimbach, partially offset by a $4 million decline in organic sales on a currency-adjusted basis. North America comps were lower year-over-year, primarily due to a strong performance in the second quarter of last year. However, for the first half of the year, North America is stable and it simply reflects quarter-to-quarter variability.

在 Heimbach 的推動下，機器服裝淨銷售額為 1.94 億美元，較上年第二季度增長 21.6%，但部分被經貨幣調整後的有機銷售額下降 400 萬美元所抵消。北美地區的業績年減，主要是由於去年第二季的強勁表現。然而，今年上半年，北美地區保持穩定，僅反映了季度與季度之間的變化。

AEC net sales of $138 million increased 20.5% from the second quarter of 2023. Our growth was driven by CH-53K, 787 and other commercial and Space programs. We continue to see a ramp up of our various commercial and Defense programs. Consolidated gross profit was $112 million, up $10 million or 9.4% from the same period last year.

AEC 淨銷售額為 1.38 億美元，較 2023 年第二季成長 20.5%。我們的成長是由 CH-53K、787 和其他商業和太空項目推動的。我們繼續看到各種商業和國防項目的增加。綜合毛利為1.12億美元，較去年同期增加1,000萬美元，成長9.4%。

Machine Clothing gross margin decreased from 50.8% in the second quarter of 2023 to 45.9% in 2024. The reduction was driven by the inclusion of Heimbach. When you exclude Heimbach, Machine Clothing gross margins increased 90 basis points to 51.7% versus the prior year, reflecting continued excellent execution. We continue to progress on our Heimbach integration plans, and we expect further margin expansion as a result in the coming quarters.

機衣毛利率從2023年第二季的50.8%下降至2024年的45.9%。減少的原因是海姆巴赫的加入。如果排除 Heimbach，Machine Clothing 的毛利率比上一年增長了 90 個基點，達到 51.7%，反映出持續出色的執行力。我們繼續推進 Heimbach 整合計劃，預計未來幾季的利潤率將進一步擴大。

AEC gross margin decreased 200 basis points from 19.0% in the second quarter of 2023 to 17%. This includes a $5 million unfavorable change in the estimated profitability of long-term contracts. This is due to inefficiencies related to program ramp-up. For comparison purposes, in the prior year, we recognized an unfavorable $2 million charge.

AEC 毛利率從 2023 年第二季的 19.0% 下降 200 個基點至 17%。這包括長期合約的預計獲利能力發生 500 萬美元的不利變化。這是由於與計劃啟動相關的效率低下。為了進行比較，我們在上一年確認了 200 萬美元的不利費用。

Net R&D expenses increased $2 million in the second quarter versus the prior year, remaining at approximately 4% of revenues. We continue to make strides as we focus on material science capabilities to further differentiate ourselves from our competition. SG&A expenses for the quarter increased by 18.7% nominally, but this was due to Heimbach. As a percentage of revenue, SG&A has decreased from 17.1% to 16.7%, as we continue to further streamline our operations and focus on efficiencies.

第二季淨研發費用比去年同期增加 200 萬美元，仍佔營收的 4% 左右。我們專注於材料科學能力，並不斷取得進步，以進一步從競爭對手中脫穎而出。本季的 SG&A 費用名義上增加了 18.7%，但這是由於 Heimbach 造成的。隨著我們繼續進一步精簡營運並專注於效率，SG&A 佔收入的百分比從 17.1% 下降至 16.7%。

Corporate expenses increased $7 million, this is primarily due to the Heimbach IT-related costs, acquisition and integration-related expenses and employee-related compensation. Additionally, we recorded foreign exchange hedging losses of $4 million as part of our global foreign exchange hedging program. These transactions do not qualify for hedge accounting treatment, and as such, we will experience quarterly fluctuations in the normal course of business.

公司支出增加了 700 萬美元，這主要是由於 Heimbach IT 相關成本、收購和整合相關支出以及員工相關薪酬。此外，作為全球外匯對沖計劃的一部分，我們還記錄了 400 萬美元的外匯對沖損失。這些交易不符合對沖會計處理的條件，因此，我們將在正常業務過程中經歷季度波動。

The effective tax rate for the quarter was 27.9% versus 42.8% in the prior year and generally in line with our long-term guidance of 30%. The rate for the second quarter of 2024 was lower than the prior year, mainly due to the unfavorable discrete adjustments we took in the prior year period. GAAP net income attributable to the company for the quarter was $25 million compared to $27 million last year.

本季的有效稅率為 27.9%，而前一年為 42.8%，基本上符合我們 30% 的長期指引。2024年第二季的成長率低於去年同期，主要是因為我們在去年同期進行了不利的離散調整。該季度 GAAP 歸屬於公司的淨利潤為 2,500 萬美元，而去年同期為 2,700 萬美元。

GAAP diluted EPS was $0.79 per share in this quarter versus $0.85 in the same period last year. After adjustments primarily related to the Heimbach acquisition and other restructuring activities, as detailed in our non-GAAP reconciliation, the adjusted diluted EPS was $0.89, unchanged from the same period last year.

本季 GAAP 稀釋後每股收益為 0.79 美元，去年同期為 0.85 美元。在主要與 Heimbach 收購和其他重組活動相關的調整後（如我們的非 GAAP 調節表中詳述），調整後的稀釋每股收益為 0.89 美元，與去年同期持平。

As a reminder, we also had a $0.10 headwind from foreign exchange hedging this quarter that is not reflected in our adjustments. Consolidated adjusted EBITDA was $63 million for the second quarter versus $65 million in the prior year period. Machine Clothing adjusted EBITDA, including Heimbach, was $62 million, an increase of 5% versus the prior year. Adjusted EBITDA margins were 32.2% versus 37.3% in the prior year, with the decrease driven by the inclusion of Heimbach.

提醒一下，本季我們也因外匯對沖而遭受了 0.10 美元的阻力，但這並未反映在我們的調整中。第二季合併調整後 EBITDA 為 6,300 萬美元，去年同期為 6,500 萬美元。Machine Clothing 調整後的 EBITDA（包括 Heimbach）為 6,200 萬美元，比上年增長 5%。調整後 EBITDA 利潤率為 32.2%，而前一年為 37.3%，下降的原因是納入 Heimbach。

AEC adjusted EBITDA was $23 million, a nearly 12% improvement over the prior year. Adjusted EBITDA margins at AEC were 16.9% of sales versus 18.2% in the prior year. During the second quarter, free cash flow was $64 million with positive operating cash flow of $83 million, offset by capital expenditures of approximately $19 million. Our balance sheet remains strong with a cash balance of over $116 million and $430 million of borrowing capacity under our committed credit facility.

AEC 調整後 EBITDA 為 2,300 萬美元，比上年增長近 12%。AEC 調整後 EBITDA 利潤率的 16.9%，而前一年為 18.2%。第二季度，自由現金流為 6,400 萬美元，其中正營運現金流為 8,300 萬美元，被約 1,900 萬美元的資本支出所抵銷。我們的資產負債表依然強勁，現金餘額超過 1.16 億美元，承諾信貸額度下的借款能力達 4.3 億美元。

Net leverage is below 1x. This provides us with significant financial flexibility.

淨槓桿低於1倍。這為我們提供了顯著的財務靈活性。

Turning to our outlook for the balance of 2024. We are reaffirming our full guidance for the year. I want to provide some context around the segment level guide given the dynamic environment we are in. For Machine Clothing, the low end of the range reflects greater-than-expected softness in our European and Asian markets and delays in the realization of our targeted Heimbach synergies.

轉向我們對 2024 年的展望。我們重申今年的全面指引。鑑於我們所處的動態環境，我想提供一些有關細分級別指南的背景資訊。對於機器服裝來說，該範圍的低端反映出我們歐洲和亞洲市場的疲軟程度超出預期，以及我們目標海姆巴赫協同效應實現的延遲。

The high end of the machine closing guide reflects improving market conditions, in particular, Europe, combined with constructive markets in the Americas and Asia, with Heimbach synergies realized ahead of plan. For AEC, the low end of the range reflects further reductions in LEAP production, lower 787 rates as well as continued challenges as we ramp up our key programs. The higher end of the range reflects better-than-expected performance on our program ramps, including on our new programs.

機器關閉指南的高端反映了市場狀況的改善，特別是歐洲，加上美洲和亞洲的建設性市場，Heimbach 協同效應提前實現。對於 AEC 而言，該範圍的低端反映了 LEAP 產量的進一步減少、787 的利用率降低以及我們在加強關鍵項目時面臨的持續挑戰。該範圍的高端反映了我們的計劃升級（包括我們的新計劃）的表現優於預期。

Now I would like to open the call for questions.

現在我想開始提問。

(Operator Instructions) Peter Arment, Baird.

（操作員說明）Peter Arment，Baird。

Yes, thanks. Good morning, Gunnar, Rob, JC. Maybe just to start on MC. Could you talk a little bit about just kind of the -- what you saw from the organic side of things, I guess you -- North America was up in Q1 and down in Q2. It just -- is that more timing related? And I guess, have you seen any kind of -- or is that pacing kind of continued as we are halfway through Q3?

是的，謝謝。早安，Gunnar、Rob、JC。也許只是從MC開始。您能否談談您從有機方面看到的情況，我想您是北美在第一季上升，在第二季度下降。只是──這與時間關係更大嗎？我想，你有沒有看到任何類型的——或者說，當我們第三季過半時，這種節奏是否仍在繼續？

Good morning, Peter. The comp for year-over-year was difficult this year. But if you look at the overall North America for the first half, we are up. So we believe that it's a continued strong market in the U.S.

早安，彼得。今年的同比比較很困難。但如果你看看上半年北美的整體情況，我們就會上升。因此，我們相信美國市場持續強勁。

Got it. And then you've continued to do footprint consolidation. Where are you, I guess, in that journey? Is that -- are you completed for the year? Or is there more to go?

知道了。然後你繼續進行足跡整合。我想，在那段旅程中，你在哪裡？那是──你今年的工作完成了嗎？或者還有更多的事情要做嗎？

No, Peter, we're continuing. We are on plan, and we're continuing the efforts through, frankly, through 2025, but there's more actions coming.

不，彼得，我們要繼續。我們正在按計劃進行，坦白說，我們將繼續努力到 2025 年，但還會採取更多行動。

Got it. And then just quickly on AEC. You mentioned that LEAP revenues are going to be slightly down. Can you call out maybe some of the programs that are going to be offsetting or providing you the ability to grow? Is that CH-53K, is it JASSM, anything in particular?

知道了。然後快速打開 AEC。您提到 LEAP 收入將略有下降。您能否列出一些可能會抵銷或提供您成長能力的計劃？是 CH-53K 還是 JASSM，有什麼特別的嗎？

On the military programs, it is definitely a CH-53K and JASSM. But for our guide, some of our new programs that we reported, the $200 million in new orders includes Space, engine components and that will start later this year and continue through the long term. That's -- we are signing some good long-term contracts, and that's helping our backlog in the future. But there is some additions this year as well. So that's how we're holding our guide.

論軍事項目，肯定是CH-53K和JASSM。但就我們的指南而言，我們報告的一些新項目中，價值 2 億美元的新訂單包括太空、引擎零件，這些訂單將於今年稍後啟動，並長期持續下去。那就是——我們正在簽署一些良好的長期合同，這有助於我們未來的積壓工作。但今年也有一些補充。這就是我們持有指南的方式。

Okay. And just lastly, on the 737 rate, when do you expect to be back in sync with ultimately Boeing gets -- if Boeing gets to 38 a month at the end of the year?

好的。最後，關於 737 的使用率，如果波音到年底達到每月 38 架，您預計什麼時候能與最終波音的使用率恢復同步？

Yes. That's difficult to answer, Peter. I think Boeing -- we have no challenge with meeting any ramp-up. We know we have the capacity. Our work is with Safran to make sure that we do not build inventory in this period. And so we have adjusted our rates.

是的。這很難回答，彼得。我認為波音公司在滿足任何產能成長方面沒有任何挑戰。我們知道我們有能力。我們與賽峰集團合作，確保我們在此期間不會建立庫存。因此我們調整了費率。

Our ability to ramp up following that will be -- is not the challenge for us as -- and we'll monitor Boeing through this as well as what's happening with the actual LEAP engine and some of the supply chain issues that are having that. But we're tied with Safran and adjusting as necessary

我們在此之後提升的能力對我們來說並不是挑戰，我們將透過這件事來監控波音公司，以及實際的 LEAP 引擎所發生的情況以及存在的一些供應鏈問題。但我們與賽峰集團合作並根據需要進行調整

Appreciate all the details. Thanks, Gunnar.

欣賞所有細節。謝謝，古納爾。

Sure.

當然。

Pete Skibitski, Alembic Global.

Pete Skibitski，Alembic Global。

Hey Good Morning Guys. Gunnar, the year -- I want to make sure I understood you right. Did you say the year-to-date orders is more than $900 million that AEC, or is that backlog?

嘿大家早安。Gunnar，今年－我想確保我對你的理解是正確的。您是說 AEC 今年迄今為止的訂單超過 9 億美元，還是積壓訂單？

Yes, that's -- new orders we have taken this year is $900 million. And that transfers to backlog some this year, but 2025 -- primarily 2025 and beyond.

是的，今年我們接到的新訂單是 9 億美元。今年會有一些積壓，但到 2025 年——主要是 2025 年及以後。

Okay. So that was the order flow. What's the backlog?

好的。這就是訂單流程。積壓情況如何？

It's about $1.2 billion, Pete.

大約是 12 億美元，皮特。

And that's just for AEC, you guys are talking about?

你們談論的只是 AEC？

Yes, that is correct. Yes.

是的，這是正確的。是的。

Okay. That's great. That's pretty sizable. It seems like at this point. And then you guys talked in the release about the strength in Space and other emerging markets. I guess that was part of that order flow. Any more details, I know you've been kind of reluctant to talk too much to the new stuff, but, are we any closer to being able to talk more about what exactly you're doing in Space and what other new programs you're involved with there, so we can get a sense of kind of the long-term upside?

好的。那太棒了。這是相當大的。似乎就在此時。然後你們在新聞稿中談到了太空和其他新興市場的實力。我想這是訂單流程的一部分。任何更多的細節，我知道你一直不願意對新東西談論太多，但是，我們是否更接近於能夠更多地談論你在太空中到底做了什麼以及你的其他新項目？這樣我們就可以感受到長期的好處？

I think the good part here is that we keep getting orders and they're not spot buys. They're long-term agreements based on our ability to deliver both in -- on the Space as well as in other programs. We're not yet able to share who our customers are. I think as these programs expand, my goal is to be able to share that, but we're not at that point yet, Pete.

我認為這裡的好處是我們不斷收到訂單，而且它們不是現貨購買。它們是長期協議，基於我們在太空和其他項目中交付的能力。我們還無法分享我們的客戶是誰。我認為隨著這些計劃的擴展，我的目標是能夠分享這一點，但我們還沒有到那個地步，皮特。

Okay. Fair enough. Last one for me. The $5 million negative EAC adjustment -- I think at AEC, do you guys feel like you've got a good handle on that program now? It sounds like it was a newer program, and you guys have not had a history of EAC changes of any meaningful size and I think Aerospace analysts are in shell shock because there's other firms out there that are kind of take serial EAC charges quarter after quarter on the same programs. And so I just would like to get a sense that you guys feel like you've really got this particular program well aligned to what the future accounting looks like.

好的。很公平。最後一張給我。500 萬美元的負 EAC 調整——我想在 AEC，你們覺得你們現在已經很好地處理了這個專案了嗎？聽起來這是一個較新的計劃，而且你們還沒有任何有意義的規模的 EAC 變更歷史，我認為航空航天分析師感到震驚，因為還有其他公司逐季收取系列 EAC 費用在相同的程序上。所以我只是想知道你們覺得這個特定的程序確實與未來會計的情況非常吻合。

Yes. Pete, this is Rob. I mean, if you look historically, our EAC adjustments have been less than 1% of top line. So to your point, this year to date, we're about $7.5 million, which is -- it's a bit higher than clearly than we would like. But we've been working very closely on a number of these programs and feel good about the adjustments that we've made to reflect the state of the programs.

是的。皮特，這是羅布。我的意思是，如果你回顧歷史，我們的 EAC 調整幅度還不到營收的 1%。所以就你的觀點而言，今年迄今為止，我們的資金約為 750 萬美元，這顯然比我們想要的要高一些。但我們一直在與其中一些計劃密切合作，並對我們為反映計劃狀態所做的調整感到滿意。

And we're certainly very closely monitoring the operations to make sure that they're performing. So at this stage, we feel confident with the adjustments. And these are really good long-term programs that are complicated in their ramp-up. So we're working that very closely.

我們當然會非常密切地監控營運情況，以確保它們正常運作。所以現階段我們對調整充滿信心。這些都是非常好的長期計劃，但其啟動過程很複雜。所以我們正在非常密切地合作。

And I would just add, this is the area where we added the additional content, and we're going to full rate at the same time. So is a major effort by the team but we are ramping and we're supporting our customers.

我想補充一點，這是我們添加額外內容的區域，我們將同時全力以赴。這是團隊的一項重大努力，但我們正在加大力度，並為我們的客戶提供支援。

Okay. Thanks for the color, guys. Appreciate it.

好的。謝謝你們的顏色。欣賞它。

Thank you, Pete.

謝謝你，皮特。

Jordan Lyonnais, Bank of America.

喬丹·里昂，美國銀行。

Hey Good Morning. On the AEC guide, I appreciate the color that you gave earlier. Just in that downside risk, how much of -- how much is being considered if there were to be an extended strike at Boeing and what that would mean for follow-on production rates for the LEAP?

嘿早安。在 AEC 指南上，我很欣賞您之前提供的顏色。就下行風險而言，如果波音公司發生長期罷工，那麼有多少正在考慮，這對 LEAP 的後續生產力意味著什麼？

Yes. Jordan, it's a really good question. I mean I think if there were a strike at Boeing, clearly. I mean, we've taken some of that into the downside. But really just -- it would depend on the length of that strike and really what that really looks like.

是的。喬丹，這是一個非常好的問題。我的意思是，我認為如果波音公司發生罷工，那是很明顯的。我的意思是，我們已經考慮到了其中的一些缺點。但實際上，這取決於罷工的持續時間以及罷工的實際情況。

And that comes down to length. I mean, clearly, that's hard to forecast. Yes. But we definitely -- the downside does reflect lower LEAP production, which certainly would result if there was a strike in.

這歸結為長度。我的意思是，顯然，這很難預測。是的。但我們可以肯定的是，下行確實反映了 LEAP 產量的下降，如果發生罷工，這肯定會導致。

Got it. Okay. And then on the new orders, strong backlog, how do you feel about current head count to meet the ramp across these programs?

知道了。好的。然後，關於新訂單、大量積壓訂單，您對目前滿足這些計劃需求的人員數量有何看法？

I think hiring is -- has been challenging over time. I think Salt Lake is our biggest site, but where we're hiring the most. We are almost at the right that the head count that we need for the current ramp-up. And so now the trick is to keep everyone. So I'm -- the team is -- our HR team is performing well.

我認為隨著時間的推移，招募一直是一個挑戰。我認為鹽湖城是我們最大的工廠，也是我們招募最多的地方。我們幾乎處於當前產能擴張所需的人員數量的正確位置。所以現在的訣竅是留住每個人。所以我——我們的團隊——我們的人力資源團隊表現良好。

We're bringing people in and they're becoming effective. But hiring is more challenging in Salt Lake than any of our other sites. And I will say that both for MC and AEC we do not have a challenge on hiring and any of the other sites.

我們正在引進人才，他們正在變得有效率。但鹽湖城的招募比我們其他任何地點都更具挑戰性。我想說的是，對於 MC 和 AEC 來說，我們在招募和任何其他網站上都沒有遇到挑戰。

Got it. Thank you so much.

知道了。太感謝了。

Thank you, Jordan.

謝謝你，喬丹。

Jack Ayers, TD Cowen.

傑克·艾爾斯，TD·考恩。

So just kind of on the drill down again on sort of the LEAP production forecast. I know you guys are just kind of calling it down year-over-year. I wonder if you can maybe refine that a little bit more? And then, I guess, going into next year, how we think about 2025, just given the assumptions already at CFM about the 40% sequential ramp in LEAP output in H2, if those guys don't hit those targets, kind of what that means for 2025, just any color there would be helpful.

因此，我們再次深入研究 LEAP 的產量預測。我知道你們只是逐年貶低它。我想知道你是否可以再改進一下？然後，我想，進入明年，我們如何看待 2025 年，只要考慮到 CFM 已經做出的關於下半年 LEAP 產量連續增長 40% 的假設，如果這些人沒有達到這些目標，那麼會發生什麼意味著到2025年，任何顏色都會有幫助。

Yes, Jack. I mean, I think for '24, I mean, we're looking at approximately $5-or-so million reduction in LEAP revenues and approximately about $1-or-so million of EBITDA impact. The planning, of course, is underway for 2025. We're not in a position to necessarily provide any outlook towards 2025. But as Gunnar referenced, we're very much aligned with the friend who clearly has in close discussions with their customers regarding the LEAP engine.

是的，傑克。我的意思是，我認為 24 年，我們預計 LEAP 收入將減少約 5 百萬美元左右，而 EBITDA 影響將減少約 1 百萬美元左右。當然，2025 年的規劃正在進行中。我們無法對 2025 年做出任何展望。但正如 Gunnar 所提到的，我們非常同意這位朋友，他顯然與客戶就 LEAP 引擎進行了密切討論。

So we have the flexibility to adjust our output either up or down.

因此，我們可以靈活地向上或向下調整輸出。

And to your point, right, there's just a lot of volatility right now around the LEAP supply chain, nothing to do with us. But we're just going to have to navigate.

就你的觀點而言，目前 LEAP 供應鏈存在很大的波動，與我們無關。但我們只需要導航。

Okay. That makes sense. And then just a quick one on 787. I know you guys called it up this quarter. Can you size that like basically how big that program is today for you guys?

好的。這是有道理的。然後快速瀏覽一下 787。我知道你們這個季度就已經打電話了。你能確定一下這個計畫對你們來說有多大嗎？

Yes. we haven't -- I mean we -- I mean it is an important commercial program for us. We have not in the past discussed the relative program size. For us, year-over-year, if you recall, 787 to a pretty low production rate for a long time. And year-over-year, it's been a favorable comp for us, but we are clearly aligning our production with Boeing run rate as they ramp back up to 5 per month.

是的。我們還沒有——我的意思是我們——我的意思是這對我們來說是一個重要的商業計劃。我們過去沒有討論過相對程序大小。對我們來說，如果你還記得的話，787 的生產力在很長一段時間內都處於相當低的水平。與去年同期相比，這對我們來說是一個有利的競爭，但我們顯然正在將我們的生產與波音的運行率保持一致，因為他們恢復到每月 5 架。

Okay. Great. And then I guess just one high-level question, I guess, for Gunnar here. Kind of coming into this relatively new, I think for the past few quarters, just would love to hear your sort of perspective on the portfolio. You've got a ramping Aero business here, in a kind of unique MC business.

好的。偉大的。然後我想，我想，這只是向 Gunnar 提出的一個高級問題。我認為在過去的幾個季度裡，進入這個相對較新的領域，只是想聽聽您對投資組合的看法。這裡的航空業務正在蓬勃發展，這是一種獨特的 MC 業務。

So would love to hear your impressions of the MC business and kind of moving forward, how you kind of see the portfolio evolving? Thanks so much.

所以很想聽聽您對 MC 業務和未來發展的印象，您如何看待產品組合的發展？非常感謝。

Thank you, Jack. And we are going through our -- the strategy review and strategy planning for the next 5 years now. So I'm well versed. I do appreciate being called new still. I think I have another month.

謝謝你，傑克。我們現在正在進行未來 5 年的策略審查和策略規劃。所以我很精通。我仍然很高興被稱為新人。我想我還有一個月的時間。

But it is -- I really -- I love the Machine Clothing business. I think the name is a misnomer in a way. It is a great business. I think the acquisition of Heimbach was a good opportunity as we integrate, that will continue to be a strong business for us with great returns and great cash flow. And what's not to like about that.

但我真的很喜歡機器服裝業務。我認為這個名字在某種程度上是用詞不當。這是一項偉大的事業。我認為收購 Heimbach 是我們整合的一個好機會，這對我們來說將繼續成為一項強大的業務，帶來豐厚的回報和大量的現金流。還有什麼不喜歡的呢。

So Machine Clothing, I like the foundation I want to repeat is material science, and we have this ability to use our technology, our material science to expand on what was started with Machine Clothing and expanded into Aerospace with a 3D-woven parts. And I think we have lots of opportunity there. The growth rate on Aerospace business is very good. We need to be able to manage the growth and I see continued growth, but maybe moving more towards our technology there. So 3D-woven is a focus in years to come.

因此，機器服裝，我想重複的基礎是材料科學，我們有能力利用我們的技術和材料科學來擴展從機器服裝開始的內容，並透過 3D 編織零件擴展到航空航太領域。我認為我們在那裡有很多機會。航空航太業務的成長速度非常好。我們需要能夠管理成長，我看到持續成長，但也許會更多地轉向我們的技術。因此，3D 編織是未來幾年的焦點。

Thanks, guys. I'll pass it on.

謝謝，夥計們。我會把它傳遞下去。

Thank you. Jack.

謝謝。傑克。

(Operator Instructions) Michael Ciarmoli, Truist Securities.

（操作員指示）Michael Ciarmoli，Truist 證券公司。

Just to maybe keep beating this LEAP issue. Can you just maybe give us a better sense of, do you have an idea of what kind of inventory is in the channel? And I know you said a couple of times you're aligned with Safran. I mean they were originally planning 20% to 25% growth in LEAP for the beginning of the year, which I guess would have been nearly 2,000 engines, they scale that back to 10% to 15% and now flat.

只是為了繼續解決這個 LEAP 問題。您能否讓我們更了解渠道中的庫存類型？我知道您曾多次說過您與賽峰集結結盟。我的意思是，他們最初計劃在今年年初將 LEAP 增長 20% 至 25%，我猜這將是近 2,000 台發動機，但他們將其縮減至 10% 至 15%，現在持平。

So I mean, are you guys actually producing units now? Or are they -- or is it an inventory burn down situation? Can you give us any more color of maybe what's in the channel there?

所以我的意思是，你們現在真的在生產單位嗎？還是——或者是庫存消耗情況？您能給我們更多關於頻道中內容的資訊嗎？

Yes, we are continuing to produce. It is important that we continue to produce and keep our people both engaged and the technology fresh there. We were flat from last year, which means we had started the inventory burn down. As we're coming into the second half, we are further reducing our rates, which will have an impact on inventory going forward. But we're trying to maintain an inventory for the contract with Safran. Where the inventory on beyond that? I don't know.

是的，我們正在繼續生產。重要的是，我們要繼續生產並保持我們的員工的參與和技術的新鮮度。我們與去年持平，這意味著我們已經開始消耗庫存。隨著下半年的到來，我們將進一步降低費率，這將對未來的庫存產生影響。但我們正在努力維持與賽峰集團合約的庫存。除此之外的庫存在哪裡？我不知道。

Okay. And then just thinking about knowing that contract and not as accretive to margins. The second half AEC, and obviously, you had the negative EAC this quarter, but it looks like you got a 21% or so run rate in the second half. What are the big sort of drivers that kind of give you the confidence in that margin level in the second half?

好的。然後只是考慮了解該合約而不是增加利潤。下半年的 AEC，顯然，本季的 EAC 為負值，但看起來下半年的運行率約為 21%。哪些重要驅動因素讓您對下半年的利潤水準充滿信心？

Yes, Michael, this is Rob. There are a few things that give us that confidence. The first is there is going to be a bit of a shift in program mix. A lot of our Space and other programs that we expect to see improved sales in the back half of the year, carry higher margin. The operational challenges that led to some of the EACs, we're working to overcome those, and we feel confident that we'll be able to produce more efficiently in the second half. So you have that.

是的，邁克爾，這是羅布。有幾件事給了我們信心。首先是節目組合將會發生一些變化。我們的許多太空項目和其他項目預計將在今年下半年實現銷售改善，並帶來更高的利潤率。導致一些 EAC 出現的營運挑戰，我們正在努力克服這些挑戰，我們相信我們將能夠在下半年提高生產效率。所以你有那個。

And then thirdly, A number of these restructuring activities that you see at AEC are really about getting the cost structure to a much better place at AEC. And that is also going to be a significant contributor in the second half of the year, based on the SG&A reductions that we've made there. So it's really those 3 items that give us the confidence in the back half of the year margin.

第三，您在 AEC 看到的許多重組活動實際上都是為了讓 AEC 的成本結構變得更好。根據我們在下半年所做的銷售管理費用削減，這也將成為下半年的重要貢獻者。因此，正是這三項讓我們對下半年的利潤率充滿信心。

Got it. And then just one more, more broadly on that, not to hone in directly on that negative EAC. But clearly, your winning more Defense and Space work. And presumably, those programs come with a lot more risk. I mean, as you look at your bidding process, contracting terms, design, analysis, program management, do you feel that everything is robust enough to to sort of contemplate and capture any potential overruns or challenges so you kind of don't get into this sort of persistent negative EACs?

知道了。然後再更廣泛地討論這一點，而不是直接針對負 EAC。但顯然，你贏得了更多的國防和太空工作。據推測，這些計劃會帶來更大的風險。我的意思是，當您查看招標流程、合約條款、設計、分析、專案管理時，您是否覺得一切都足夠強大，可以考慮並捕獲任何潛在的超支或挑戰，這樣您就不會陷入困境這種持續的負EAC？

Yes, I'll start and I'll let Gunnar weigh in. But Michael, I mean, we have a very robust bid review process. We have -- over the last handful of years, we've built out a very strong business development team that works very closely with program management and supply chain to really understand the program and what's required. I mean we've walked away from a number of potential opportunities, just given the economics don't pan out and the risk is too high.

是的，我會開始，我會讓 Gunnar 參與其中。但是邁克爾，我的意思是，我們有一個非常健全的投標審查流程。在過去的幾年裡，我們建立了一支非常強大的業務開發團隊，與專案管理和供應鏈密切合作，以真正了解專案和需求。我的意思是，我們已經放棄了許多潛在的機會，因為經濟不景氣，而且風險太高。

So what we're experiencing this quarter is a very significant ramp-up on very large programs in a very difficult labor market. So that's really the largest contributor to the EACs that you're seeing. If you take out just a couple of programs, the rest of the programs, net-net have been fairly neutral. So we feel, overall, very, very good about our review process and that type of work that we'll take.

因此，本季我們所經歷的是在非常困難的勞動力市場中非常大的項目的顯著增加。所以這確實是您所看到的 EAC 的最大貢獻者。如果你只取出幾個程序，那麼其餘的程序，net-net 都相當中立。因此，總體而言，我們對我們的審核流程以及我們將進行的工作類型感到非常非常滿意。

As Gunnar mentioned, we're going to continue to focus on our 3D-woven technology, in particular, and focus on opportunities. But you're right. I mean in any firm fixed-price contract, the risk and opportunity is related to supply chain, labor, you name it, right? You have to be taken into account when you price. And contractually, we feel that we've done a good job of protecting ourselves as much as we can. And we have a good team executing.

正如 Gunnar 所提到的，我們將繼續專注於我們的 3D 編織技術，尤其是機會。但你是對的。我的意思是，在任何固定價格合約中，風險和機會都與供應鏈、勞動力有關，你能想到的，對吧？定價時必須考慮到您。從合約上看，我們認為我們在盡可能保護自己方面做得很好。我們有一支優秀的執行團隊。

We have the opportunity to be selective. And so we'll select the programs that makes the most sense for us. And I have to emphasize the ability of this team to execute is great. So we're going through a significant ramp, and we're seeing some effects of that. That ramp was the beginning of this year.

我們有機會進行選擇性。因此，我們將選擇對我們最有意義的計劃。我必須強調這個團隊的執行能力非常好。所以我們正在經歷一個顯著的成長，並且我們看到了它的一些影響。那個坡道是今年初的。

We're continuing to ramp up through the end of the year. We're adding new programs. Some of the new programs are added at our various facilities, which help us disperse the risk. So in support of Rob fully in that answer.

到今年年底，我們將繼續加大力度。我們正在新增程式。我們的各個設施增加了一些新計劃，這有助於我們分散風險。所以完全支持羅布的回答。

Got it. Thanks, guys.

知道了。謝謝，夥計們。

Thank you, Michael.

謝謝你，麥可。

There are no further questions at this time. Mr. Gunnar Kleveland, I turn the call back over to you.

目前沒有其他問題。Gunnar Kleveland 先生，我將電話轉回給您。

Thank you. And thank you, everyone, for joining us on the call today. We appreciate your continued interest in Albany International. Thank you, and have a good day.

謝謝。感謝大家今天加入我們的電話會議。我們感謝您對奧爾巴尼國際的持續關注。謝謝你，祝你有美好的一天。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。