Investment Thesis
Albany International faces significant operational and financial stress characterized by declining revenue (-3.9% YoY), negative free cash flow (-$3.6M), and severely deteriorating earnings (EPS -169.3% YoY). While liquidity remains adequate, the dangerous interest coverage ratio of 1.3x combined with poor capital returns (ROE 2.1%, ROA 0.9%) and weak cash generation indicate the company is struggling in a cyclical, low-margin industry with limited financial flexibility.
Strengths
- Strong liquidity position with current ratio of 2.20x and $122.6M cash reserves
- Reasonable gross margin of 32.1% and moderate debt-to-equity ratio of 0.65x
- Positive operating income of $25.4M despite revenue headwinds
Risks
- Negative free cash flow of -$3.6M indicates company is consuming capital after capex, unsustainable long-term
- Interest coverage ratio of 1.3x is dangerously tight, leaving minimal buffer for operational deterioration
- Severe earnings collapse (EPS -169.3% YoY) combined with revenue decline suggests structural market challenges in broadwoven fabrics
- Abysmal return metrics (ROE 2.1%, ROA 0.9%) demonstrate poor capital efficiency and shareholder value creation
Key Metrics to Watch
- Free cash flow trajectory and return to positive cash generation
- Interest coverage ratio stabilization above 2.0x minimum threshold
- Revenue stabilization and operating margin recovery beyond 8.1%
- Return on equity improvement toward acceptable 8-10% threshold
Financial Metrics
Revenue
311.3M
Net Income
15.3M
EPS (Diluted)
$0.54
Free Cash Flow
-3.6M
Total Assets
1.7B
Cash
122.6M
Profitability Ratios
Gross Margin
32.1%
Operating Margin
8.1%
Net Margin
4.9%
ROE
2.1%
ROA
0.9%
FCF Margin
-1.2%
Balance Sheet & Liquidity
Current Ratio
2.20x
Quick Ratio
1.88x
Debt/Equity
0.65x
Debt/Assets
57.7%
Interest Coverage
1.26x
Long-term Debt
476.5M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T14:17:30.593093 |
Data as of: 2026-03-31 |
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