ALBANY INTERNATIONAL CORP DE
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
AIN$67.28+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-29.
0000819793-24-000033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-looking statementsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000819793-24-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-looking statementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 126 current paragraphs.
66 unchanged; 32 reworded; 22 added; 5 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 12 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
During the second quarter of 2024, the MC segment continued to see challenges in Europe, and, to a lesser degree, softness in North America and China. However, our global backlog remains stable. The integration of Heimbach continues to be on track with our internal plans. We transitioned Heimbach’s PMC businesses onto our SAP platform in July, an integral step to integrate Heimbach into the MC business.
Current report
The AEC segment continues to increase production levels on commercial, defense, and space programs. For the first half of 2024, the AEC segment has been awarded over $900 million in awards mostly on defense programs, and modest awards on commercial and space programs. While both major large aircraft manufacturers, Boeing and Airbus SE, had earlier announced increases in build rates in 2024 compared to 2023, due to continued quality issues at Boeing, Boeing has slowed their production rate on 737 MAX. Additionally, Airbus SE has given indications that their expected ramp on the A320 will be pushed out beyond previous expectations. We have decreased our LEAP production forecast for the remainder of 2024 and we are working with our customer, Safran, to determine the appropriate production volumes for our LEAP production into 2025.
Current report
MC's Net revenues increased 21.6% compared to the second quarter of 2023, driven by Heimbach Net revenues of $39.8 million. This was partially offset by $4.3 million of lower Net revenues in the rest of the segment, due to decreased sales in pulp, packaging and publication grades, net of increased sales in tissue grades and engineered fabrics. Changes in currency translation rates had the effect of decreasing Net revenues $1.1 million.
Current report
AEC's Net revenues increased 20.5%, primarily driven by growth on CH-53K, Boeing 787 Frames, and other commercial and space programs. Changes in currency translation rates had had an insignificant effect on Net revenues.
Current report
AEC's Net revenues increased 15.5%, primarily driven by growth on commercial and space programs, including Boeing 787 Frames, as well as growth on certain defense programs, including CH-53K. Changes in currency translation rates had an insignificant effect on Net revenues.
Current report
Consolidated SG&A expenses increased 18.7% as compared to 2023, however, as a percentage of Net revenues, SG&A expenses decreased from 17.0% in 2023 to 16.7% in 2024.
Current report
•MC SG&A expenses increased $5.9 million as compared to 2023, with a $7.4 million increase related to Heimbach, offset by a $1.5 million decrease due to changes in currency translation rates.
Current report
The overall increase in SG&A expenses in the first six months of 2024, compared to the same period in 2023, was due to the net effect of the following:
Current report
•Corporate SG&A expenses increased $3.7 million, principally due to Heimbach IT-related costs and acquisition and integration related expenses.
Current report
•MC Technical and research expenses increased $1.1 million as compared to 2023, of which $1.6 million was due to the addition of Heimbach. Excluding Heimbach, material and labor costs were lower as compared to the prior year, driving the decrease in expenses.
Current report
Consolidated Technical and research expenses increased 19.1% as compared to 2023, but as a percentage of Net revenues remained unchanged at 3.8% in both 2023 and 2024.
Current report
Restructuring expenses, net in the second quarter of 2024 at MC were primarily related to actions taken to cease operations at the Company's MC forming fabric manufacturing facility in Chungju, South Korea. This led to a $1.0 million charge to Restructuring expenses, net related to workforce reductions, as well as a $0.5 million charge to Cost of goods sold for the write-off of inventory. We expect to incur additional restructuring expenses related to this action throughout the remainder of the year.
Current report
At AEC, restructuring activities were related to reductions in the workforce at various AEC locations, which resulted in restructuring expenses of $0.9 million during the second quarter and $3.1 million during the first half of 2024.
Current report
Restructuring expenses incurred at MC and AEC during 2023 were not significant.
Current report
For the three months ended June 30, 2024, Net revenues increased by 21.6% as compared to the prior year, driven by Heimbach Net revenues of $39.8 million. This was partially offset by $4.3 million of lower Net revenues in the rest of the segment, driven primarily by decreased sales in pulp, packaging and publication grades, net of increased sales in tissue grades and engineered fabrics. Changes in currency translation rates had the effect of decreasing Net revenues $1.1 million.
Current report
For the three months ended June 30, 2024, Operating income was largely in line with the prior year. The addition of Heimbach increased SG&A expenses by $7.4 million and increased Technical and research expenses by $1.6 million. Excluding Heimbach, SG&A decreased $1.5 million and Technical and research expenses decreased $0.5 million, driven primarily by changes in currency translation rates and reduced material and labor costs.
Current report
For the three months ended June 30, 2024, Net revenues increased 20.5% as compared to the prior year, driven by growth on CH-53K, Boeing 787 Frames, and other commercial and space programs. Changes in currency translation rates had an insignificant effect on Net revenues.
Current report
For the six months ended June 30, 2024, Net revenues increased 15.5%, primarily driven by growth on commercial and space programs, including Boeing 787 Frames, as well as growth on certain defense programs, including CH-53K. Changes in currency translation rates had an insignificant effect on Net revenues.
Current report
For the three months ended June 30, 2024, Gross profit increased $1.7 million as compared to the same period last year, and as a percentage of revenues decreased from 19.0% in 2023 to 17.0% in 2024. The decrease in profit margin was driven primarily by unfavorable changes in the estimated profitability of long-term contracts as noted below.
Current report
For the three months ended June 30, 2024, Operating income increased $0.8 million, principally due to an increase of $23.5 million in Net revenues and an increase of $1.7 million in Gross profit, offset by restructuring expenses of $0.9 million, as described above.
Current report
For the six months ended June 30, 2024, Operating income increased $0.5 million, principally due to an increase of $35.7 million in Net revenues, an increase of $4.3 million in Gross profit, and a reduction of $0.4 million in SG&A, offset by an increase of $1.1 million in Technical and research expenses and restructuring expenses of $3.1 million, as described above.
Current report
Changes in the estimated profitability of long-term contracts decreased operating income by $5.0 million for the second quarter of 2024 and decreased operating income $7.6 million for the first half of 2024. For the 2023 year, adjustments in the estimated profitability of long-term contracts decreased operating income by $1.9 million in the second quarter and decreased operating income by $4.0 million for the first half of the year.
Removed paragraphs (5)
Previous report
AEC's Net revenues increased 10.6%, primarily driven by growth on commercial and space programs, partially offset by lower revenues on defense programs. Changes in currency translation rates had the effect of increasing Net revenues $0.2 million.
Previous report
Restructuring costs in the first quarter of 2024 were primarily related to reductions in workforce at various AEC locations, while restructuring charges for the first quarter of 2023 were not significant. There were no charges related to the impairment of assets for the periods presented.
Previous report
On January 17, 2024, the House Ways and Means Committee announced a draft legislation called "The Tax Relief for American Families and Workers Act of 2024". This act would restore 100% bonus depreciation for property placed in service after December 31, 2022 and before January 1, 2026; and retroactively restore the ability to deduct domestic research and experimentation costs that were required to be capitalized beginning in 2022 under Section 174. On January 31, 2024, the United States House of Representatives voted to approve this bill, which is now with the United States Senate. We will continue to monitor the status of this legislation and assess the potential impact, if passed.
Previous report
For the three months ended March 31, 2024, Net revenues increased 10.6% as compared to the prior year, driven by growth on commercial and space programs of approximately $17.0 million, partially offset by lower revenues on defense programs. Changes in currency translation rates had the effect of increasing Net revenues $0.2 million.
Previous report
For the three months ended March 31, 2024, Operating income decreased $0.2 million, principally due to a $0.7 million increase in Technical and research expenses, as well as restructuring expenses of $2.2 million, as described above.
Reworded paragraphs (32)
Previous wording
Please refer to the Business Environment Overview and Trends in the Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023. The Annual Report on Form 10-K, along with the Company's other filings, can be found on the Securities and Exchange Commission's website, www.sec.gov, as well as on the Company's website: www.albint.com.
Current wording
Also, please refer to the Business Environment Overview and Trends in the Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023. The Annual Report on Form 10-K, along with the Company's other filings, can be found on the Securities and Exchange Commission's website, www.sec.gov, as well as on the Company's website: www.albint.com.
Previous wording
Net revenues increased 16.4% compared to the same period in 2023, driven by $37.9 million of Net revenues from the Heimbach acquisition and higher Net revenues in AEC, partially offset by lower organic Net revenues at MC.
Current wording
Net revenues increased 21.1% compared to the same period in 2023, driven by $39.8 million of Net revenues from the Heimbach acquisition and higher Net revenues in AEC, partially offset by lower organic Net revenues at MC.
Previous wording
MC's Net revenues increased 20.9% compared to the first quarter of 2023, driven by Heimbach Net revenues of $37.9 million. This was partially offset by $5.3 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in all grades in Europe. This decrease was partially offset with increases in revenues in North America. Changes in currency translation rates had the effect of decreasing Net revenues $0.6 million.
Current wording
MC's Net revenues increased 21.2% compared to the same period in 2023, driven by Heimbach Net revenues of $77.7 million. This was partially offset by $9.6 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in most grades in Europe, as well as decreased sales in packaging grades. Changes in currency translation rates had the effect of decreasing Net revenues $1.7 million.
Previous wording
•MC's gross profit margin decreased from 50.8% in 2023 to 45.7% in 2024. This margin decrease was primarily attributable to lower gross margin at Heimbach. Excluding Heimbach, MC's gross profit margin increased to 52.1% in 2024.
Current wording
•MC's gross profit margin decreased from 50.8% in 2023 to 45.9% in 2024. This margin decrease was primarily attributable to lower gross margin at Heimbach. Excluding Heimbach, MC's gross profit margin increased to 51.7% in 2024.
Previous wording
Changes in the estimated profitability of long-term contracts decreased operating income by $0.9 million in 2024, as compared to a decrease of $0.7 million during the same period last year.
Current wording
•AEC's gross profit margin decreased from 19.0% in 2023 to 17.0% in 2024, driven primarily by changes in the estimated profitability of long-term contracts, which decreased gross profit by $5.0 million in 2024, as compared to a decrease of $1.9 million during the same period last year.
Previous wording
•AEC's gross profit margin remained largely in line with the prior year, increasing from 18.5% in 2023 to 18.8% in 2024, driven by a favorable shift in program revenue mix. Changes in the estimated profitability of long-term contracts decreased operating income by $0.9 million in 2024, as compared to a decrease of $0.7 million during the same period last year.
Current wording
•AEC's gross profit margin decreased from 18.7% in 2023 to 17.8% in 2024, driven primarily by changes in the estimated profitability of long-term contracts, which decreased gross profit by $7.6 million in 2024, as compared to a decrease of $4.0 million during the same period last year, partially offset by a favorable shift in revenue mix.
Previous wording
•In AEC, SG&A expenses remained largely in line with the prior year.
Current wording
•In AEC, SG&A expenses remained largely in line with the prior year, decreasing $0.4 million.
Previous wording
•Corporate SG&A expenses increased $0.5 million, principally due to acquisition and integration related expenses.
Current wording
•Corporate SG&A expenses increased $3.2 million, principally due to Heimbach IT-related costs and acquisition and integration related expenses.
Previous wording
Consolidated SG&A expenses increased 13.1% as compared to 2023, however, as a percentage of Net revenues it decreased from 18.0% in 2023 to 17.5% in 2024.
Current wording
Consolidated SG&A expenses increased 15.9% as compared to 2023, however, as a percentage of Net revenues, SG&A expenses decreased from 17.5% in 2023 to 17.1% in 2024.
Previous wording
•MC SG&A expenses increased $5.9 million as compared to 2023, of which $9.2 million of the increase related to Heimbach. Excluding Heimbach, MC's SG&A decreased $3.3 million, driven primarily by changes in currency translation rates, which reduced expenses by $2.8 million, as well as lower consulting fees and incentive compensation costs.
Current wording
•MC SG&A expenses increased $11.9 million as compared to 2023, of which $16.5 million of the increase related to Heimbach. Excluding Heimbach, MC's SG&A decreased $4.6 million, driven primarily by changes in currency translation rates, which reduced expense by $4.9 million, partially offset by higher employee-related compensation.
Previous wording
Consolidated Technical and research expenses increased 23.2% as compared to 2023, and as a percentage of Net revenues increased from 3.8% in 2023 to 4.0% in 2024.
Current wording
Consolidated Technical and research expenses increased 14.9% as compared to 2023, and as a percentage of Net revenues decreased from 3.8% in 2023 to 3.6% in 2024.
Previous wording
•AEC Technical and research expenses increased $0.7 million as compared to 2023, due to increases in research material and labor costs.
Current wording
•AEC Technical and research expenses increased $0.4 million as compared to 2023, due to increases in research material and labor costs.
Previous wording
•MC Technical and research expenses increased $1.7 million as compared to 2023, of which $1.6 million was due to the addition of Heimbach.
Current wording
•MC Technical and research expenses increased $2.8 million as compared to 2023, of which $3.1 million was due to the addition of Heimbach. Excluding Heimbach, labor costs were lower as compared to the prior year, driving decreases in expenses.
Previous wording
In addition to the items discussed above affecting Gross profit, SG&A and Technical and research expenses, Operating income was affected by restructuring expense, net, of $2.2 million in the three months ended March 31, 2024, compared to an insignificant amount in in the same period of 2023.
Current wording
In addition to the items discussed above affecting Gross profit, SG&A and Technical and research expenses, Operating income was affected by restructuring expense, net, of $2.1 million in the three months ended June 30, 2024, compared to $0.1 million in in the same period of 2023; and $4.3 million in the six months ended June 30, 2024, compared to $0.1 million in the same period in 2024.
Previous wording
The following table summarizes restructuring expenses by business segment:
Current wording
The following table summarizes Restructuring expenses, net by business segment:
Previous wording
Interest expense/(income), net, was largely in line with the prior year. See the Working Capital, Liquidity and Capital Structure section for further discussion of borrowings and interest rates.
Current wording
Interest expense/(income), net, was largely in line with the prior year. See Note 14. Financial Instruments in the Notes to Consolidated Financial Statements for further discussion of borrowings and interest rates.
Previous wording
Other (income)/expense, net, included foreign currency related transactions which resulted in income of $1.3 million in the three months ended March 31, 2024, as compared to losses of $0.1 million in the same period last year. Other (income)/expense, net, also included gains on changes in fair value of derivative instruments, gains on sales of fixed assets, and rental income.
Current wording
Other (income)/expense, net, included foreign currency related transactions which resulted in losses of $0.2 million and gains of $1.1 million in the three and six months ended June 30, 2024, respectively, as compared to gains of $4.2 million and $4.1 million in the same period last year. In addition, changes in the fair value of derivative instruments included losses of $4.4 million and $4.3 million in the three and six months ended June 30, 2024, as compared to gains of $0.1 million and $0.1 million in the same period last year, driven by currency rate movements, most notably the Brazilian Real and Mexican Peso. Net periodic pension and postretirement costs, other than service costs, were $0.7 million and $1.3 million in the three and six months ended June 30, 2024, respectively, as compared to benefits of $0.1 million and $0.2 million in the same period last year. Other (income)/expense, net, also included net proceeds of $0.5 million from the divestiture of assets related to Heimbach during the three and six months ended June 30, 2024, as well as bank fees, amortization of debt issuance costs, and rental income.
Previous wording
The tax rate is affected by recurring items, such as the income tax rate in the U.S. and non-U.S. jurisdictions and the mix of pre-tax income earned in those jurisdictions. The tax rate is also affected by U.S. tax costs on foreign pre-tax earnings, and by discrete items that may occur in any given year but are not consistent from year to year. The Company’s effective tax rate for the first quarter of 2024 was 29.2%, higher compared to 28.2% for the same period in 2023, mainly due to an unfavorable change in the jurisdictional mix of earnings forecasted for 2024. For more information, see Note 6, Income Taxes, in the Notes to the Consolidated Financial Statements.
Current wording
The tax rate is affected by recurring items, such as the income tax rate in the U.S. and non-U.S. jurisdictions and the mix of pre-tax income earned in those jurisdictions. The tax rate is also affected by U.S. tax costs on foreign pre-tax earnings, and by discrete items that may occur in any given year but are not consistent from year to year. The Company’s effective tax rate for the second quarter of 2024 was 27.9%, lower compared to 42.8% for the same period in 2023, mainly due to favorable discrete tax adjustments in the current period compared to unfavorable discrete tax adjustments in the prior period. For the first half of 2024, the Company's effective tax rate was 28.6%, lower compared to 36.3% for the same period in 2023, mainly due to favorable discrete tax adjustments in the current period compared to unfavorable discrete tax adjustments in the prior period. For more information, see Note 6, Income Taxes, in the Notes to the Consolidated Financial Statements.
Previous wording
The MC segment accounted for 59% of our consolidated revenues during the first three months of 2024. A summary of selected financial results for MC is as follows:
Current wording
The MC segment accounted for 58% and 59% of our consolidated revenues during the three and six months ended June 30, 2024, respectively. A summary of selected financial results for MC is as follows:
Previous wording
Net revenues increased by 20.9%, driven by Heimbach Net revenues of $37.9 million. This was partially offset by $5.3 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in all grades in Europe. This decrease was partially offset with increases in North America. Changes in currency translation rates had the effect of decreasing Net revenues $0.6 million.
Current wording
For the six months ended June 30, 2024, Net revenues increased by 21.2% as compared to the prior year, driven by Heimbach Net revenues of $77.7 million. This was partially offset by $9.6 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in most grades in Europe, as well as decreased sales in packaging grades. Changes in currency translation rates had the effect of decreasing Net revenues $1.7 million.
Previous wording
Gross profit increased by $6.8 million as compared to the prior year, driven by the higher sales noted above; however, gross profit margin decreased from 50.8% in 2023 to 45.7% in 2024. This margin decrease was primarily driven by lower gross margins at Heimbach. Excluding Heimbach, MC's gross profit margins increased to 52.1% in 2024 as a result of higher revenues in North America.
Current wording
For the three months ended June 30, 2024, Gross profit increased by $8.0 million as compared to the same period in the prior year, driven by the higher sales noted above; however, gross profit margin decreased from 50.8% in 2023 to 45.9% in 2024. This margin decrease was primarily driven by lower gross margins at Heimbach. Excluding Heimbach, MC's gross profit margins increased to 51.7% in 2024.
Previous wording
Operating income decreased year-over-year, due to higher SG&A and Technical and research expenses from the Heimbach acquisition in addition to Heimbach's lower gross profit margins. The addition of Heimbach increased SG&A expenses by $9.2 million and increased Technical and research expenses by $1.6 million. Excluding Heimbach, SG&A decreased $3.3 million, driven primarily by changes in currency translation rates, which reduced expenses $2.8 million, as well as lower consulting fees and incentive compensation costs.
Current wording
For the six months ended June 30, 2024, Operating income decreased $0.9 million, principally due to lower gross profit margins and higher SG&A and Technical and research expenses from the Heimbach acquisition. The addition of Heimbach increased SG&A expenses by $16.3 million and increased Technical and research expenses by $3.1 million. Excluding Heimbach, SG&A decreased $4.9 million due to changes in currency translation rates, partially offset by higher employee-related compensation, and Technical and research expenses decreased $0.3 million, driven by reduced labor costs.
Previous wording
The AEC segment accounted for 41% of our consolidated revenues during the first three months of 2024. A summary of selected financial results for AEC is as follows:
Current wording
The AEC segment accounted for 42% and 41% of our consolidated revenues during the three and six months ended June 30, 2024, respectively. A summary of selected financial results for AEC is as follows:
Previous wording
AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by a cost-plus-fee agreement. Revenue earned under these arrangements accounted for approximately 40 percent of segment revenue for the first three months of 2024 and 2023.
Current wording
AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by a cost-plus-fee agreement. Revenue earned under these arrangements accounted for approximately 40 percent of segment revenue for the first six months of 2024 and 2023.
Previous wording
For the three months ended March 31, 2024, Gross profit increased $2.6 million as compared to the same period last year, and gross profit margin remained largely in line with the prior year, increasing from 18.5% in 2023 to 18.8% in 2024. The increase in profit margin was driven primarily by a favorable shift in program revenue mix to commercial programs.
Current wording
For the six months ended June 30, 2024, Gross profit increased $4.3 million as compared to the same period last year, and gross profit margin decreased from 18.7% in 2023 to 17.8% in 2024. The decrease in profit margin was driven primarily by unfavorable changes in the estimated profitability of long-term contracts as noted below, partially offset by a favorable shift in revenue mix.
Previous wording
Net cash provided by operating activities was $9.6 million in 2024, compared to net cash used in activities of $16.4 million in the same period last year. The increase was driven by improved levels of working capital at both segments and lower tax payments during the current period.
Current wording
Net cash provided by operating activities during the first six months of 2024 was $93.0 million, compared to $14.7 million in the same period last year. The increase was primarily driven by improved levels of working capital at both segments, but was most pronounced at AEC, which invested a much more significant amount in working capital during 2023 related to the expanded CH-53K scope of work and the build-up of inventory in the LEAP program as compared to 2024.
Previous wording
Net cash used in investing activities primarily include capital expenditures totaling $26.9 million and $16.3 million for the first three months of 2024 and 2023, respectively, including investments in new aerospace programs and to improve productivity in our MC segment.
Current wording
Net cash used in investing activities primarily included capital expenditures totaling $45.6 million and $35.0 million for the first six months of 2024 and 2023, respectively, including investments in new aerospace programs and to improve productivity in our MC segment.
Previous wording
Net cash used in financing activities during 2024 was $28.1 million as compared to net cash provided by financing activities of $41.1 million in 2023. The change was primarily due to lower borrowings that were more than offset by a significant increase in principal payments on debt during the current period.
Current wording
Net cash used in financing activities during 2024 was $98.2 million as compared to net cash provided by financing activities of $29.3 million in 2023. The change was primarily due to lower borrowings and a significant increase in principal payments on debt during 2024.
Previous wording
Under our $800 million unsecured committed Amended Credit Agreement, $429.0 million of borrowings were outstanding as of March 31, 2024. In addition, we have borrowings outstanding at our newly acquired Heimbach subsidiary of $10.1 million, of which $4.4 million was considered current.
Current wording
Under our $800 million unsecured committed Amended Credit Agreement, $370.0 million of borrowings were outstanding as of June 30, 2024. In addition, we have borrowings outstanding at our newly acquired Heimbach subsidiary of $7.1 million, of which $2.7 million was considered current.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of $125.4 million and available borrowings under our Amended Credit Agreement of $371.0 million, for a total liquidity of approximately $496.4 million. We believe cash flows from operations and the availability of funds under our Amended Credit Agreement will be adequate to fund our operations and business needs over the next twelve months. For more information on credit agreements, see Note 14. Financial Instruments in the Notes to Consolidated Financial Statements.
Current wording
As of June 30, 2024, we had cash and cash equivalents of $116.4 million and available borrowings under our Amended Credit Agreement of $430.0 million, for a total liquidity of approximately $546.4 million. We believe cash flows from operations and the availability of funds under our Amended Credit Agreement will be adequate to fund our operations and business needs over the next twelve months. For more information on credit agreements, see Note 14. Financial Instruments in the Notes to Consolidated Financial Statements.
Previous wording
As of March 31, 2024, $109.0 million of our total cash and cash equivalents were held by non-U.S. subsidiaries. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were in excess of $155.0 million, as of March 31, 2024 and are intended to remain indefinitely invested in foreign operations. Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such endeavor to date, there can be no assurance that we will be able to cost effectively repatriate funds in the future. Repatriating such cash from certain jurisdictions, which is currently considered to be indefinitely reinvested in foreign operations, may also result in additional taxes.
Current wording
As of June 30, 2024, $100.2 million of our total cash and cash equivalents were held by non-U.S. subsidiaries. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were in excess of $120.0 million, as of June 30, 2024 and are intended to remain indefinitely invested in foreign operations. Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such endeavor to date, there can be no assurance that we will be able to cost effectively repatriate funds in the future. Repatriating such cash from certain jurisdictions, which is currently considered to be indefinitely reinvested in foreign operations, may also result in additional taxes.
Previous wording
We have also returned cash to shareholders through dividends and share repurchases. During the first three months of 2024, we paid $8.1 million in dividends and had no share repurchases.
Current wording
We have also returned cash to shareholders through dividends and share repurchases. During the first six months of 2024, we paid $16.2 million in dividends and had no share repurchases.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Net revenues increased 18.8% compared to the same period in 2023, driven by $77.7 million of Net revenues from the Heimbach acquisition and higher Net revenues in AEC, partially offset by lower organic Net revenues at MC.
Current report — wording carried from elsewhere
The increase in Gross profit during the first half of 2024, as compared to the same period in 2023, was driven by higher sales in both segments. Gross profit as a percentage of revenues was as follows:
Current report — wording carried from elsewhere
•MC's gross profit margin decreased from 50.8% in 2023 to 45.8% in 2024. This margin decrease was primarily attributable to lower gross margin at Heimbach. Excluding Heimbach, MC's gross profit margin increased to 51.9% in 2024.
Current report — wording carried from elsewhere
•In AEC, SG&A expenses remained largely in line with the prior year, decreasing $0.4 million.
Current report — wording carried from elsewhere
•AEC Technical and research expenses increased $1.1 million as compared to 2023, due to increases in research material and labor costs.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, Gross profit increased by $14.8 million as compared to the same period in the prior year, driven by the higher sales noted above; however, gross profit margin decreased from 50.8% in 2023 to 45.8% in 2024. This margin decrease was primarily driven by lower gross margins at Heimbach. Excluding Heimbach, MC's gross profit margins increased to 51.9% in 2024.