Q2 2025 Albany International Corp Earnings Call

July 31, 2025

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I would now like to turn the call over to <unk>.

G C 19.

G C chip 19.

Interim CFO and vice President of Investor Relations and Treasurer. Please go ahead.

Thank you, France and good morning, everyone.

Welcome to Albany International second quarter 2025 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 a notice regarding our forward looking statements and the use of certain non-GAAP financial measures.

A reconciliation to GAAP.

And their reconciliation to GAAP.

For the purposes of this conference call those same statements apply to a global remarks. This morning.

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 contains 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 on July 32025, as well as our SEC filings, including our second quarter Form 10-Q, and our 'twenty 'twenty four Form 10-K.

Please refer to both our earnings release on July 32025, as well as our SEC filings, including our second quarter Form 10-Q, and our drained 24 Form 10-K.

Now I will turn the call over <unk>, our president and CEO will provide opening remarks qunar.

Now I will turn the call over to Golar, Cleveland, our president and CEO will provide opening remarks qunar.

Good morning, and thank you for joining us as we review our second quarter 2025 results.

Good morning, and thank you for joining us as we review our second quarter 2025 results overall.

Overall I am encouraged with our progress this year a year that we have said would be a transition year.

Our business segment leaders are performing well as they restructure invest and strengthen their operations all while remaining agile in addressing their terms challenges.

Our second quarter financial results lagged our expectations, but as I'll cover the performance was largely impacted by certain timing and operational issues and were confident in our recovery.

Our second quarter financial results lagged our expectations, but as I'll cover the performance was largely impacted by certain timing and operational issues and we are confident in our recovery.

We continue to monitor the tariff situation and secondary effects that could impact regional market dynamics or customer behaviors to date, we have not realized any direct material headwinds.

Are mostly regional setup for both suppliers and customers largely insulate our operations from direct impact of tariffs.

Also while we were cautious about the tariff impact in our outlook. We now expect global growth to continue as the tariff environment get more predictable.

Increasing activity in the defense sector, particularly hypersonic or new programs is expected to result in accelerated growth at AAC.

In addition to our growth in commercial aerospace over the next several years.

In machine clothing, despite some second quarter timing and market headwinds the business delivered expected returns on the lower volume and showed growth from the first quarter.

We've commenced two additional facility closures in the quarter as we remained focused on optimizing our global production footprint to best serve our customers.

We've commenced two additional facility closures in the quarter as we remain focused on optimizing our global production footprint to best serve our customers.

AUC delivered strong sequential quarter growth and continues to accelerate its disciplined long term operational strategy. We are investing in operational excellence to transform how we execute our current portfolio of programs, allowing us to grow profitably with our continuing new business wins.

We're making good progress driving process improvements across all of our sites and with emphasis on our CH 53 K program.

At our last visit to Salt Lake City, It was encouraging to see planning and supply chain aligned with the rapid growth of this program.

The EAC adjustment in the quarter reflects our investment in program ramp readiness that we will cover in more detail later.

For the quarter, we reported revenues of $311 million and overall adjusted EBITDA margin of 16, 7% and adjusted diluted EPS of <unk> 57.

We returned capital to our shareholders through both our regular quarterly dividend and share repurchase program.

In the first half of the year, we repurchased $119 million worth of shares including $50 million in the second quarter. We currently have $143 million of capacity remaining under our latest share repurchase authorization.

Turning to our individual businesses for the quarter machine clothing reported revenues of $181 million.

Turning to our individual businesses for the quarter machine clothing reported revenues of $181 million and adjusted EBITDA margin of 28, 8% as a reminder, comparisons to prior year are impacted by certain intentional and strategic business exits of approximately $5 million per quarter.

<unk> adjusted EBITDA margin of 28, 8% as a reminder, comparisons to prior year are impacted by certain intentional and strategic business exits of approximately $5 million per quarter.

In terms of grades while longer term secular trends in packaging remained strong the effect of customer consolidations in North America created the delivery headwind in second quarter compared to the prior year.

Tissue remains a bright spot globally with expected new machines investments, while pulp and engineered fabrics remained stable.

North America had a slight decline in deliveries in the second quarter, mainly due to packaging machine production curtailments, we're working closely with our customers to solidify our positions were consolidations have impacted their capacity overall Europe continues to show solid signs of recovery with good deliveries.

North America had a slight decline in deliveries in the second quarter, mainly due to packaging machine production curtailments, we're working closely with our customers.

Solidify our positions were consolidations have impacted their capacity overall Europe continues to show solid signs of recovery with good deliveries and orders offsetting weakening conditions in Asia in particular in China, We're seeing softer demand and continued to await machine restarts from the legacy Heimbach customer.

And orders offsetting weakening conditions in Asia in particular in China, we're seeing softer demand and continued to await machine restarts from the legacy Heimbach customer that we discussed in the prior quarter overall.

<unk> that we discussed in the prior quarter overall.

Overall, we continue to follow a disciplined sales approach to mitigate these market dynamics.

Okay.

Our global <unk> order backlog remains healthy and gives us confidence for a stronger second half of the year.

Operationally, we initiated the process to shut two additional facilities in the quarter since union trends in Manchester U K, while we are executing to plan to transfer our production and equipment across facilities dusk challenge how quickly we can ramp up at the new location in the second quarter the performance at our Durant facility lagged.

Operationally, we initiated the process to shut two additional facilities in the quarter cent Union trends in Manchester U K, while we are executing to plan to transfer our production and equipment across facilities. Thus challenge how quickly we can ramp up at the new location in the second quarter the performance at our Durant facility lagged.

As it took on new production, resulting in some temporary sales and profit shortfalls.

During the second quarter, we also experienced temporary operational disruption in one of our U S facilities due to unplanned equipment downtime, which led to delayed shipments in the quarter.

Turning to engineered composite segment.

Turning to engineered composite segment revenues for the quarter were $130 million with an adjusted EBITDA margin of eight 5% revenue grew sequentially by 14% from the first quarter, reflecting continued ramping on our key programs, but profitability remains lower than our expectation as we continued our investment.

Revenues for the quarter were $130 million with an adjusted EBITDA margin of eight 5% revenue grew sequentially by 14% from the first quarter, reflecting continued ramping on our key programs, but profitability remains lower than our expectation as we continued our investment in discipline operational improvements.

And disciplined operational improvements.

We recorded a total EAC adjustment of $7 2 million for the quarter. The EAC is mainly driven by continued investment in our labor force, which led to higher than projected overhead rates.

We're seeing the progress from our investment in frontline leader coaching and operate through training through improved output and reduced scrap and rework.

Our planning and supply chain improvements are evident in material being available for assembly needs on the CH 53 K program.

Our planning and supply chain improvements are evident in material being available for assembly needs on the CH 50 <unk> program.

On leap, where at the contractual inventory levels and well aligned to meet the France production schedule as Boeing and Airbus single aisle delivery rates continued to recover we have ample capacity to meet any upside to the demand and now expect growth in the second half.

The emerging and the <unk>.

The emerging and the emerging advanced air mobility market remains attractive for our business with continued sequential quarter growth unexpected strong demand through the course of 2025 with our key customer beta.

Emerging advanced Air mobility market remains attractive for our business with continued sequential quarter growth unexpected strong demand through the course of 2025 with our key customer beta advanced air mobility will be a significant source of growth for AUC.

Advanced Air mobility will be a significant source of growth for AUC.

As previously highlighted our new long term agreement on the Bell 505 program as an attractive new win where we are already delivering to customer expectations.

Sure.

We have invested in additional equipment in preparation for the Jassem program growth, where we also deliver at 100% on time.

We have invested in additional equipment in preparation for the Jetson program growth, where we also deliver at 100% on time.

Having achieved critical milestones at our dedicated facility, we're seeing momentum with customers in hypersonic parts development, we continue to invest in our capabilities and remain very positive in the medium and long term attractiveness of this.

Segment.

Okay.

Also as I highlighted in our last quarter earnings release, our application development team continues to evaluate where AAC differentiated three D woven technology and composite parts can be superior alternative to titanium with stronger relative strength to weight benefits.

This was highlighted at the Paris Air show, where our display showed examples of parts that we're currently supplying or in the process of developing for various customers. There are sponsor to show was positive with customers and others seeing our keen focus on the technology that grew out of our weaving expertise and this technology is growing.

This was highlighted at the Paris Air show, where our display showed examples of parts that we're currently supplying or in the process of developing for various customers. The response at the show was positive with customers and others seeing our keen focus on the technology that grew out of our weaving expertise and this technology is growing.

<unk> users and value.

<unk> uses and value.

As we presented in last quarter's call our solution can be delivered at a fraction of the titanium lead time with domestic materials and our production capacity proven to deliver 100% on time, which is in Stark contrast to the challenges in the titanium supply.

Okay.

We successfully completed our <unk> upgrade across the entire company in May this investment improves our systems and operational efficiencies and we will deliver enhanced analytics to improve our business agility.

We successfully completed our S. Four hana upgrade across the entire company in May this investment improves our systems and operational efficiencies and we will deliver enhanced analytics to improve our business agility.

Finally, I am excited to announce that drill station has accepted the role of CFO at Albany International when it comes to us from Mckesson medical surgical where he was senior Vice President of primary care sales, leading a team of more than 200 account executives prior to that it was the subsidiaries Chief financial Officer, and senior Vice President of <unk>.

Finance.

<unk> also includes 16 years at the Boeing company from 2005 until two.

<unk> also includes 16 years at the Boeing company from 2005 until 2021, where he held a number of increasingly senior finance roles, notably Vice President and Chief Financial Officer for the commercial derivatives airplanes from 2014 to 2021 and director of financial operations for Boeing.

2021, where he held a number of increasingly senior finance roles, notably Vice President and Chief Financial Officer for the commercial derivatives airplanes from 2014 to 2021 and director of financial operations for Boeing commercial airplanes from 2011 to 2014.

<unk> airplanes from 2011 to 2014.

He is a great addition to the team and complements the leadership team with large OEM experience as well as commercial finance and business expertise.

I also want to take this opportunity to thank J C for stepping up to take on the role as interim CFO and making the transition seamless.

I also want to take this opportunity to thank JC for stepping up to take on the role as interim CFO and making the transition seamless.

JC will continue to support the transition as we'll onboard.

And with that I'll now hand, it over to Jason to provide more detail on the quarter.

I will review, our second quarter results and then discuss our outlook for the balance of 2025.

Consolidated net sales were $311 million down six 2% from $332 million in the second quarter of last year.

Machine clothing, net sales were $181 million, a decrease of six 5% versus the second quarter of last year.

After adjusting for the effects of planned strategic business exits will decrease approximately 4%.

Adjusting for the effects of planned strategic business exits the decreased approximately 4%.

This is mainly driven by lower volumes in the quarter from unplanned equipment downtime in our U S facility.

This is mainly driven by lower volumes in the quarter from unplanned equipment downtime and a U S facility.

Lag and ramping transfer production as part of our footprint rationalization.

Maggie ramping transfer production as part of our footprint rationalization.

And softness in Asia, especially China.

The majority of the current quarter production shortfall.

We recover in the second half.

<unk> net sales of $130 million renewal by five 7% versus the second quarter of 2024, primarily due to the unfavorable cumulative catch up impact from the EAC adjustments.

By growth in our new programs.

Led by growth in our new programs.

Consolidated gross profit was $98 million or 21, 3% of sales down from $112 million in the prior year on 33, 9% of sales.

Machine clothing gross profit of $84 million decreased from $89 million in the prior year, while gross margin improved by 40 basis points to 46, 3%.

Overall this performance reflects improved operating efficiencies.

EC gross profit of $14 million decrease from $24 million, largely reflecting the impact of accumulative EAC adjustment for the quarter.

<unk> gross profit of $14 million decrease from $24 million, largely reflecting the impact of accumulative EAC adjustment for the quarter.

After $7 2 million of EAC charges for the quarter $8 1 million was related to the CH 50 <unk> program.

After $7 2 million of EAC charges for the quarter $8 1 million was related to the senior strategic program.

Partially offset by a positive $1 6 million Gulfstream reserve adjustment.

Partially offset by a positive $1 6 million Gulfstream meso adjustment with a balanced strength across other programs.

The balance spread across other programs.

Net R&D expenses at 4% in the second quarter as higher versus the prior year.

Net R&D expenses at 4% in the second quarter as higher versus the prior year, reflecting our emphasis in material science and human suspensions.

Selecting our emphasis in material science and new business ventures.

Consolidated SG&A expenses were 59 million for the quarter up versus $56 million in the prior year due beginning with the U S dollar and higher professional fees.

Consolidated SG&A expenses were 59 million for the quarter up versus $56 million in the prior year due to weakening of the U S dollar and higher professional fees.

Partially offset by lower personnel related costs.

The effective tax rate for the quarter was 31, 3% versus 27, 9% in the prior year.

The higher rate is mainly due to favorable discrete tax adjustments in the prior year, resulting from the release of uncertain tax positions.

GAAP net income attributed to the company for the quarter was $9 2 million compared to $24 $6 million last year.

While GAAP diluted EPS of <unk> 31 per share and this quarter was <unk> 39 in the same period last year.

After adjustments primarily related to foreign currency devaluation and net restructuring costs as detailed in our non-GAAP reconciliation the.

After adjustments randomly to foreign currency revaluation, and net restructuring costs as detailed in our non-GAAP reconciliation the.

The adjusted diluted EPS of <unk> 57, which is in line with same period last year.

The adjusted diluted EPS of <unk> 57 versus eight nine in the same period last year.

Consolidated adjusted EBITDA was $52 million for the quarter was $63 million in the prior year period.

While for machine clothing, adjusted EBITDA was $52 million versus $59 million in the prior year.

Why for machine clothing, adjusted EBITDA was $52 million versus $59 million in the prior year.

Adjusted EBITDA margin decreased to 28, 9% versus $30 four in the prior year, driven primarily by the margin impact from lower shipments due to slower than expected ramp of transfer production.

Adjusted EBITDA margin decreased to 28, 9% versus $30 four in the prior year.

Driven primarily by the margin impact from lower shipments due to slower than expected ramp of transfer production.

Unplanned equipment downtime and softness in Asia.

<unk> adjusted EBITDA was $11 million as compared to $20 million in the prior year period.

Margin at <unk>. He was eight 5% of sales was $14 three in the prior year, primarily reflecting the current period aac's cumulative catch up adjustments.

Margin at AUC was eight 5% of sales was $14 three in the prior year, primarily reflecting the current period EAC cumulative catch up adjustments.

Moving to free cash flow free cash flow has improved sequentially and was positive $18 million in the second quarter versus a negative 14 million in the first quarter.

Moving to free cash flow free cash flow has improved sequentially and was positive $18 million in the second quarter versus a negative 14 million in the first quarter for.

For the first half of 2025 total free cash flow of $4 million down versus the prior year of $46 million.

For the first half of 2025 total free cash flow of $4 million is down versus the prior year of $46 million.

This is partially driven by investment in working capital as we ramp up new programs in 2025.

And our balance sheet remains strong with a cash balance of $110 million and $355 million of borrowing capacity under our committed credit facility.

And our balance sheet remains strong with a cash balance of $107 million and $355 million of borrowing capacity under our committed credit facility.

In terms of full year guidance, we expect the second half to be stronger than the first time.

We project continued ramping programs at AC recovery in shipments at AMC as well as bottom line improvement from continued operational efficiencies across both businesses.

We project continued ramping programs at AC recovery in shipments at AMC.

Bella Bottomline improvement from continued operational efficiencies across both businesses.

Accordingly, we are reaffirming our full year guide.

Now I'd like to open the call up for questions trends.

Thank you.

And we will now begin the question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad and to join the queue.

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And your first question comes from the line of Pete.

And your first question comes from the line pay.

Peter Arment from Baird. Please go ahead.

Yes, good morning guarantee savings welcomed well.

Yes, good morning guarantee savings welcome well.

Got it can you talk about where you are in terms of like overall build rates in aerospace, maybe not calling out specifically, but just in general where you are matching up with the OE rates and the planned production.

Yes, I think I think we're getting.

Asset as Boeing is ramping up.

As Boeing is ramping up.

And Destocking.

They have been.

Bringing material and we're seeing a ramp up.

Slowly occurring.

Both on the Boeing and then as I mentioned on the Leap program.

We have seen.

We have reached our contractual level of inventory and we're building to match.

How so promise pulling from that inventory so I would say overall there is a.

How <unk> pulling from that inventory, so I would say overall there is a.

Momentum towards the prayer prior.

Momentum towards the per your prior.

Level of production.

Is there anything we should be thinking about for the second half that could either put you at the low end or the high end of the range of the revenue range.

Yeah.

I think what you need to look at it.

I think what you need to look at.

If you if you see machine clothing, the heimbach synergies are driving a lot of a lot of this together.

If you if you see machine clothing, the heimbach synergies are driving a lot of a lot of this.

Together with recapturing the lost revenue from from the machine down as well as the transition.

At AUC.

The increase in commercial programs.

As a major factor too.

The growth and profitability as well as the higher return programs coming back.

In <unk>.

In.

At AAC now there is the improved performance.

<unk> now there is the improved performance is part of.

<unk> is part of.

Our guide we expect our performance in the second half to be better.

<unk> can you just maybe.

<unk> K can you just maybe.

So I'm just kind of the latest adjustments that you've made it seems like obviously some of this was all strategically planned for to support your move into low rate production, but maybe just give us your latest thoughts on that program.

And Peter I missed the program.

The CH 53, K sorry, Okay ish 53, yes. So.

The CH 53, K sorry, Okay shifted three yes.

The ramp up there, we're taking a very.

Okay.

Controlled approach to how we're wrapping that up.

Controlled approach to how we're wrapping that up like like I said the investment in that program. Both in how we lead our team and how we train our team.

Like I said the investment in that program both in how we lead our team and how we train our team.

<unk>.

I wouldn't say that it's taking longer but we're putting putting a lot of effort into it as the program.

Gross.

We are we are continuing to grow.

Each of the monuments, if you want.

The biggest one being the asked which is the latest transition.

The biggest one being the AST, which is the latest transition.

We had.

But I can tell you that I was there.

I saw all of our jigs.

I saw all of our jigs in.

At the facility and we have.

At the facility and we have we have.

We have parts.

In all of the <unk>, which which gives me the confidence that we're building in.

And working towards that two per month.

Right.

We're going to be at.

Towards the end of this year.

I appreciate the color I'll jump back in the queue. Thanks.

And before we proceed with the next question we ask that you. Please limit your question to one question and one follow up only and after that you can just simply join the queue again. Thank you and your next question comes from Steve Tusa from JP Morgan.

JP Morgan. Please go ahead.

Morgan. Please go ahead.

Hi, This is circa telco on for Steve Thanks for taking my question.

Hi, This is Jessica telco on for Steve Thanks for taking my question.

So firstly, just digging in a little bit more into the AC margins.

So I think in your most recent update it sounded like things are turning the quarter corner here.

And things are improving on <unk> two versus a couple of quarters ago. So I. Just was wondering if you could provide some additional color on what happened here that you kind of need to make additional investments in labor.

And things are improving online versus a couple of quarters ago Michelle.

I was wondering if you could provide some additional color on what happened here that you kind of need to make additional investments in labor.

Yes, good morning.

The.

<unk>.

Hey.

<unk> has.

AAC has.

It's performing very well across.

It's performing very well across all of the programs are a challenge has remained.

All of the programs are a challenge has remained.

At the CH 53 K program.

Primarily because it's a very different program from all of the other.

The parts that we provide at AUC.

That we provide at AUC.

So the focus hasn't been there it has taken us longer to do the ramp and it has.

<unk> taken more resources and as we looked at the.

Taken more resources and as we looked at the.

Sure.

Performance in the second half, we realized that we had underestimated our overhead charges there and I think also what is what is important to remember.

Is that this is a 10 year program. So when you do a a small adjustment in the overhead rate. It has a very large impact to the to the eac's. So.

We are investing in this program, we're seeing the result of the investment in the program.

More importantly, the investment in both our planning and supply chain now has us filling up.

More.

Fortunately the investment in both our planning and supply chain now has us filling up our tools tool Jacobs with parts, giving our teams the ability to perform.

Our tools tool Jacobs with parts, giving our teams the ability to perform.

Which has been an issue right. If you if you don't have the parts, it's hard to show your performance with all the parts available.

You have a chance to show how you can perform and that is the turning of the corner as you say we're seeing.

Have a chance to show how you can perform and that is turning the corner as you say we are seeing.

Coming into the third quarter.

Okay, great. Thanks, and then as a follow up so you reaffirmed your full year guidance.

Okay, great. Thanks, and then as a follow up so you reaffirmed your full year guidance, which.

And then besides that.

Why is that.

Maybe like a 30% half.

Maybe like a 30% half over.

Over half ramping EBITDA.

Over half ramp in EBITDA.

So if you can kind of dig in a little bit deeper into what kind of.

So if you can just dig in a little bit deeper into what kind of what you expect will ramp in the second half that gives you confidence to reiterate the guidance.

What you expect will ramp in the second half that gives you confidence to reiterate the guidance.

Yes, it's fair because we see not only better returns, but we also see higher.

Yeah, It's fair because we see not only better returns, but we also see higher.

Sales in the third and fourth quarter, which is what's giving us the confidence to say that we will keep the.

The guide.

Hi back synergies again is a big part there.

Hi, I'm back synergies again is a big part they're becoming cumulative.

Becoming cumulative.

As well as some of the timing.

At MFC for for AUC, it's really the growth that we're seeing both on the commercial side and the defense with CH 50, <unk> in performance there that gives us the confidence to say we are holding in the guide.

Emcee for for AUC, it's really the growth that we're seeing both on the commercial side and the defense with senior shifted to UK in performance there that gives us the confidence to say we are holding in the guide.

Okay. Thank you.

And your next question comes from Michael Schirmer Modi from <unk> Securities. Please go ahead.

Hey, Thanks, Good morning, guys just to stay on that topic of the guidance I mean.

Hey, Thanks, good morning, guys.

Stay on that topic of the guidance I mean.

A couple of challenges here I mean, what were the drivers.

Or the decision making of not lowering the guidance and then even the bridge for AEG I mean that second half range implies that <unk>.

Or the decision making of not lowering the guidance and then even the bridge for AEG I mean that second half range implies that.

Revenues could be down 11% versus first half are up nine what are the swing factors that are going to take you to the high end and the low end of those guidance ranges I mean, it just seems like a pretty pretty wide range, especially in the context of the recent performance.

Revenues could be down 11% versus first half are up nine what are the swing factors that are going to take you to the high end to the low end of those guidance ranges I mean, it just seems like a pretty pretty wide range, especially in the context of the recent performance.

Yes.

Good morning, Michael.

The.

I'm not addressing the range itself, but but it's really about getting the performance on the program to the level that.

I'm not addressing the range itself.

But it's really about getting the performance on the program to the level that.

That we believe that the program has which is which is.

We believe that the program past, which is which is.

It's the EAC that is driving the low performance right. So if we can perform at the level that we believe we have the ability to do now with with arch and <unk>.

It's the EAC that is driving the low performance right.

So if we can.

<unk> at the level that we believe we have the ability to do now with.

Arch.

At hand, and with the with the team trained and continued ramp.

And with the with the team trained and continued ramp.

Is where we see the high end of.

Is where we see the high end of the range. The low end of the range. Obviously as we are not able to achieve that.

The range the low end of the range, obviously as we were not able to achieve that.

So for AUC. It is it is really around the CH 53.

K program.

But the reason why we held it is because we have.

We have confidence that the team has has has come to a point, where we where we will see the results of all of this impact and we see it gradually we see it with less less quality issues, we see it with less hours being spent on.

We have confidence that the team has.

Has come to a point, where we where we will see the results of all of this impact and we see it gradually right, we see it with less less quality issues, we see it with less hours being spent on.

On each operation.

Each operation.

And so the progress is there.

Okay.

In the short term.

Okay.

Okay, and then is there anything else ramping up I mean your pipeline maybe other programs.

Anything else ramping up I mean, your pipeline maybe other programs.

<unk> do you have to be looked at at other contracts and other assumptions across other defense programs I mean, how do we how do we get comfortable with the AUC profile on a go forward basis whats potentially in that pipeline.

Don't really know yet.

Yeah.

We have.

There is both existing and new programs that are ramping up.

In the second half.

And.

We've talked we've not talked that much about at bell, obviously as a part of that.

We've talked we're not talk that much about at Bell, obviously as a part of that.

The lead program is growing.

And we have kept that.

Flat for the year and at this point, we're saying that it's growing.

As we are matching what.

Ryan This is building.

<unk> is building.

The Jassem <unk> program.

<unk> continues to grow.

Yes.

<unk>.

When I was in Salt Lake recently.

We have invested.

Invested quite significantly in that program.

Quite significantly in that program and continued to deliver on time, so that is a growth for the for the back half.

And continued to deliver on time, so that is a growth for the for the back half as well I would say joint strike fighter I would I would keep.

As well I would say joint strike fighter I would I would keep.

Flat.

For now and we're watching where.

Lockheed Martin is going on that.

And then the engine programs.

At our Bernie facility in our cut ethanol facility as as.

At our Bernie facility in our cut ethanol facility.

As.

Both Airbus and Boeing are ramping up there is a increase in orders to us.

Both Airbus and Boeing are ramping up there is a increase.

And orders to us so the second half does have growth in it.

So the second half does have growth in it.

Okay across both thanks, Scott commercial and military programs.

Okay. Thanks, guys I'll jump back in the queue.

Okay.

Before we proceed to the next question again, if you would like to join the queue simply press Star one.

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And your next question comes from Alex Preston from Bank of America. Please go ahead.

Your next question comes from Alex <unk> from Bank of America. Please go ahead.

Hey, good morning, guys. Thanks for taking the question.

Good morning.

So I wanted to touch on the three D woven composite parts and they're replacing titanium you mentioned, you've got a good reception in Paris.

So I wanted to touch on the three D woven composite parts and the replacing titanium you mentioned you've got a good reception in Paris.

Maybe if you could just go a little deeper in.

Maybe if you could just go a little deeper and.

Sort of where that program stands maybe.

Where that program stands maybe.

How long do you expect until certification might be in play our go to market strategy, maybe just a little more detail on that would be really helpful. Thank you.

How long do you expect until certification might be in play our go to market strategy and maybe just a little more detail on that would be really helpful. Thank you.

Yeah.

You will see more information about this four for each quarter as we as we expand our target opportunity there, but I think a good example here is.

At the Paris Air show, if you went to the upfront.

Display they had a the landing gear of <unk> hundred 50.

Display they had a the landing gear of a $3 50.

There and they had a <unk>.

There.

And they had a.

Break Grace.

Break brace.

It takes four per landing gear and they had two of ours in two in titanium.

On that display.

And clearly it's a perfect example of how we are replacing a part that is titanium today that can be.

Replaced with a <unk> woven parts at at a lower.

At a lower weight.

That is.

Great example, and we were excited that.

That they had both theyre, both Airbus and so from we're aligned there with us and we're developing that.

Certification is in the next.

18 months or so I would say so some of these.

All of these commercial programs or military programs.

<unk>.

When we are actually replacing current titanium will take some time, so our focus has been around the.

The new programs.

Beta is a great example, we use three D woven.

Technology to help them design their lyft blade, we had that in Paris as well.

Acknowledging to help them design their lyft blade, we had that in Paris as well.

And then we're meeting with.

And then we are meeting with.

The developer of the new aircraft military aircrafts to show, where we can replace titanium.

On all new development programs.

All new development programs.

And then of course, we're using the three D woven.

And then of course, we are using the three D woven.

Technology in.

<unk> technology in.

In our.

A hypersonic development, which would replace not titanium but.

A hypersonic development.

<unk> would replace small titanium but.

But to use use our technology to get a near net shape rather than the current.

But us use our technology to get a near net shape rather than the current.

Box.

Type.

<unk>.

That has to be machined.

So three D woven is our focus.

Three D woven is our focus.

We're going to put a lot of effort on it over the next several years I think we will have opportunities to replace titanium on current programs.

We're going to put a lot of effort on it.

Over the next several years I think we will have opportunities to replace titanium on current programs.

But.

That will have a big place and new programs.

We'll have a big place and new programs.

Got it thank you very much.

Sure.

Okay.

No further questions at this time.

Now I would like to turn the call back over to Bernard Cleveland for closing remarks. Please go ahead.

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

Q2 2025 Albany International Corp Earnings Call

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