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The Company is a producer of custom-designed paper machine fabrics and process belts that are essential to the manufacture of paper and paperboard.
Albany International has seen its stock price increase 150% from its low -- but it shouldn't have. This company is bleeding cash and its struggles are likely to continue for quite some time. Demand for paper and paperboard is down and it will likely take years for the demand to return to its former levels. In the meantime, paper producers have open capacity and don't need new equipment. Looking at the financials I see that capex consistently outstrips depreciation and total net pp&e has grown much faster than sales. This means that the company is creating income by understating depreciation. Cash flow stinks.
A close look at the paper industry shows that no reduction of production in the last 2.25 years - sure publication grade has gone down, but other segments have gone up. Also a closer look shows that the publication mills that remain have focused, product change - everything from brown to specialty grades. When it comes to paper machine carrier fabrics - it is not about production but about positions (installed machine loctions). These fabrics are changed out peroidically not per production cycles - so - the more positions, the more sales. AIN is a master at acheiving this - look at the market share they are getting, ever increasing.
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