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Albany International Reports Fourth-Quarter 2020 Results

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Albany International Corp. (NYSE:AIN) today reported operating results for its fourth quarter of 2020, which ended December 31, 2020.

"Albany International finished 2020 with another strong quarter, particularly in light of the challenging business conditions in some of our end markets," said Albany International President and Chief Executive Officer, Bill Higgins. "Our operations performed exceptionally well for customers and shareholders. Both segments delivered impressive profit margins despite top-line headwinds caused by the pandemic and the Boeing 737 MAX grounding.

"The Machine Clothing segment managed its business remarkably well during 2020. For the full year, the Machine Clothing segment reached the same level of Adjusted EBITDA as 2019 despite a 5% reduction in segment revenues. We expect another strong year in 2021. We are encouraged by growth in our order book and strengthening end-markets that we serve in this segment.

"In 2020, the Engineered Composites segment expanded its Adjusted EBITDA margin by 360 basis points despite a revenue decline of 28%. Once we get through the inventory destocking challenges we expect to face in 2021, the segment is well-positioned to grow based on the strength of our program portfolio," concluded Higgins.

For the fourth quarter ended December 31, 2020:

  • Net sales were $226.9 million, down $30.8 million, or 12%, when compared to the prior year. Sales declined $24.4 million, or 23%, in the Engineered Composites segment driven primarily by lower demand for LEAP components.

  • Gross profit of $91.3 million was 6% lower than the $96.6 million reported for the same period of 2019.

  • Selling, Technical, General, and Research (STG&R) expenses were $54.8 million, compared to $51.3 million in the same period of 2019. Revaluation of foreign currency balances increased STG&R by $3.0 million in 2020, compared to an increase of $1.4 million in the same period of 2019.

  • Operating income was $35.0 million, compared to $43.6 million in the prior year, a decrease of 20%, principally due to lower gross profit and higher STG&R expenses.

  • The effective tax rate was 13.5%, compared to 24.8% for the fourth quarter of 2019. Income tax adjustments decreased fourth-quarter income tax expense by $4.8 million in 2020 and by $1.3 million in 2019.

  • Net income attributable to the Company was $27.5 million ($0.85 per share), compared to $29.1 million ($0.90 per share) in Q4 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.89 per share in the fourth quarter of 2020, compared to $0.97 in the same period of last year.

  • Adjusted EBITDA (a non-GAAP measure) was $57.3 million, compared to $63.9 million in Q4 2019, a decrease of 10.4%.

Please see the tables below for a reconciliation of non-GAAP measures to their comparable GAAP measures.

"We were very pleased with the Company's performance this quarter and the overall year. Enabled by very strong free cash flow during the quarter, we continued the trend of significantly reducing net debt and, once again, ended the year with a very healthy balance sheet. Earnings per share benefited from a low tax rate this quarter due to significant non-recurring adjustments. Compared to the full-year tax rate, absent discrete items, of about 28%, the lower rate this quarter increased Adjusted EPS by about $0.12, effectively recovering earnings that would have been recognized in earlier quarters if the full year tax rate had been known," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are also providing initial financial guidance for 2021, reflecting expected strong performance from the Machine Clothing segment, with our expectations for Engineered Composites being significantly impacted by a destocking cycle for our finished goods in our customers’ supply chains. We also expect a strong year for free cash flow generation: our expected cash flow in 2021 should exceed the level delivered in 2020."

Outlook for Full-Year 2021

Albany International is updating financial guidance for the full-year 2021:

  • Total company revenue of between $850 and $890 million;

  • Effective income tax rate, including tax adjustments, of 28% to 30%;

  • Total company depreciation and amortization of between $70 and $75 million;

  • Capital expenditures in the range of $50 to $60 million;

  • GAAP and Adjusted earnings per share of between $2.40 and $2.80;

  • Total company Adjusted EBITDA of $195 to $220 million;

  • Machine Clothing revenue of $570 to $590 million;

  • Machine Clothing Adjusted EBITDA of between $195 and $205 million;

  • Albany Engineered Composites (AEC) revenue between $275 to $295 million; and

  • Albany Engineered Composites Adjusted EBITDA of $55 to $65 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

Three Months Ended
December 31,

Years Ended
December 31,

2020

2019

2020

2019

Net sales

$

226,857

$

257,678

$

900,610

$

1,054,132

Cost of goods sold

135,539

161,037

529,538

656,431

Gross profit

91,318

96,641

371,072

397,701

Selling, general, and administrative expenses

45,742

42,049

163,909

163,651

Technical and research expenses

9,043

9,246

35,347

37,569

Restructuring expenses, net

1,547

1,766

5,736

2,905

Operating income

34,986

43,580

166,080

193,576

Interest expense, net

3,542

3,886

13,584

16,921

Other expense/(income), net

(493

)

349

13,422

(1,557

)

Income before income taxes

31,937

39,345

139,074

178,212

Income tax expense

4,327

9,754

41,831

44,829

Net income

27,610

29,591

97,243

133,383

Net income/(loss) attributable to the noncontrolling interest

73

446

(1,346

)

985

Net income attributable to the Company

$

27,537

$

29,145

$

98,589

$

132,398

Earnings per share attributable to Company shareholders - Basic

$

0.85

$

0.90

$

3.05

$

4.10

Earnings per share attributable to Company shareholders - Diluted

$

0.85

$

0.90

$

3.05

$

4.10

Shares of the Company used in computing earnings per share:

Basic

32,339

32,308

32,329

32,296

Diluted

32,365

32,331

32,356

32,322

Dividends declared per share, Class A and Class B

$

0.20

$

0.19

$

0.77

$

0.73

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

December 31,
2020

December 31,
2019

ASSETS

Cash and cash equivalents

$

241,316

$

195,540

Accounts receivable, net

188,423

218,271

Contract assets, net

139,289

79,070

Inventories

110,478

95,149

Income taxes prepaid and receivable

5,940

6,162

Prepaid expenses and other current assets

31,830

24,142

Total current assets

$

717,276

$

618,334

Property, plant and equipment, net

448,554

466,462

Intangibles, net

46,869

52,892

Goodwill

187,553

180,934

Deferred income taxes

38,757

51,621

Noncurrent receivables, net

36,265

41,234

Other assets

74,662

62,891

Total assets

$

1,549,936

$

1,474,368

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$

49,173

$

65,203

Accrued liabilities

125,459

125,885

Current maturities of long-term debt

9

20

Income taxes payable

16,222

11,611

Total current liabilities

190,863

202,719

Long-term debt

398,000

424,009

Other noncurrent liabilities

130,424

132,725

Deferred taxes and other liabilities

10,784

12,226

Total liabilities

730,071

771,679

SHAREHOLDERS' EQUITY

Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued

Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; 39,115,405 issued in 2020 and 39,098,792 in 2019

39

39

Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 1,617,998 in 2020 and 2019

2

2

Additional paid in capital

433,696

432,518

Retained earnings

770,746

698,496

Accumulated items of other comprehensive income:

Translation adjustments

(83,203

)

(122,852

)

Pension and postretirement liability adjustments

(39,661

)

(49,994

)

Derivative valuation adjustment

(9,544

)

(3,135

)

Treasury stock (Class A), at cost; 8,391,011 shares in 2020 and 8,408,770 shares in 2019

(256,009

)

(256,391

)

Total Company shareholders' equity

816,066

698,683

Noncontrolling interest

3,799

4,006

Total equity

819,865

702,689

Total liabilities and shareholders' equity

$

1,549,936

$

1,474,368

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended
December 31,

Years Ended
December 31,

2020

2019

2020

2019

OPERATING ACTIVITIES

Net income

$

27,610

$

29,591

$

97,243

$

133,383

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

16,039

15,426

63,328

62,085

Amortization

2,360

2,405

9,377

8,710

Change in deferred taxes and other liabilities

(1,333

)

900

11,101

13,702

Provision for write-off of property, plant and equipment

637

2,018

1,173

3,119

Non-cash interest (income)/expense

(152

)

151

(290

)

605

Write-off of pension liability adjustments due to settlement/curtailment

411

450

411

450

Compensation and benefits paid or payable in Class A Common Stock

909

650

1,505

2,063

Provision for credit losses from uncollected receivables and contract assets

(36

)

(827

)

1,628

309

Foreign currency remeasurement (gain)/loss on intercompany loans

(1,504

)

(1,074

)

14,246

(3,730

)

Changes in operating assets and liabilities that provided/(used) cash:

Accounts receivable

25,453

17,554

31,522

9,278

Contract assets

(31,190

)

(12,641

)

(59,122

)

(19,199

)

Inventories

6,358

13,004

(13,685

)

(8,923

)

Prepaid expenses and other current assets

(822

)

1,766

(7,811

)

(2,291

)

Income taxes prepaid and receivable

775

728

113

1,390

Accounts payable

(95

)

2,687

(15,586

)

10,524

Accrued liabilities

4,207

1,369

(3,856

)

(7,393

)

Income taxes payable

2,198

2,360

5,939

3,979

Noncurrent receivables

3,989

(662

)

4,158

(1,341

)

Other noncurrent liabilities

(2,024

)

(2,162

)

(2,437

)

(6,573

)

Other, net

2,770

66

1,296

205

Net cash provided by operating activities

56,560

73,759

140,253

200,352

INVESTING ACTIVITIES

Purchase of business, net of cash acquired

(30,793

)

(30,793

)

Purchases of property, plant and equipment

(10,143

)

(18,512

)

(41,463

)

(67,358

)

Purchased software

(772

)

(291

)

(927

)

(597

)

Net cash used in investing activities

(10,915

)

(49,596

)

(42,390

)

(98,748

)

FINANCING ACTIVITIES

Proceeds from borrowings

5,000

25,000

75,000

45,000

Principal payments on debt

(25,004

)

(25,003

)

(101,020

)

(120,017

)

Principal payments on finance lease liabilities

(416

)

(304

)

(7,214

)

(1,180

)

Debt acquisition costs

(2,432

)

(2,432

)

Taxes paid in lieu of share issuance

(490

)

(971

)

Proceeds from options exercised

30

7

55

112

Dividends paid

(6,144

)

(5,816

)

(24,568

)

(23,251

)

Net cash used in financing activities

(28,966

)

(6,116

)

(60,669

)

(100,307

)

Effect of exchange rate changes on cash and cash equivalents

9,333

3,754

8,582

(3,512

)

Increase/(decrease) in cash and cash equivalents

26,012

21,801

45,776

(2,215

)

Cash and cash equivalents at beginning of period

215,304

173,739

195,540

197,755

Cash and cash equivalents at end of period

$

241,316

$

195,540

$

241,316

$

195,540

Reconciliation of non-GAAP measures to comparable GAAP measures

The following tables present Net sales and the effect of changes in currency translation rates:

(in thousands, except percentages)

Net sales as
reported, Q4
2020

Increase due to
changes in
currency
translation rates

Q4 2020 sales
on same basis
as Q4 2019
currency
translation rates

Net sales as
reported, Q4
2019

% Change compared
to Q4 2019,
excluding currency
rate effects

Machine Clothing

$

144,173

$

3,539

$

140,634

$

150,580

(6.6

)%

Albany Engineered Composites

82,684

756

81,928

107,098

(23.5

)%

Consolidated total

$

226,857

$

4,295

$

222,562

$

257,678

(13.6

)%

(in thousands, except percentages)

Net sales as
reported, YTD
2020

Increase due to
changes in
currency
translation rates

YTD 2020 sales
on same basis
as 2019
currency
translation rates

Net sales as
reported, YTD
2019

% Change compared
to 2019, excluding
currency rate effects

Machine Clothing

$

572,955

$

2,252

$

570,703

$

601,254

(5.1

)%

Albany Engineered Composites

327,655

620

327,035

452,878

(27.8

)%

Consolidated total

$

900,610

$

2,872

$

897,738

$

1,054,132

(14.8

)%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)

Gross profit,
Q4 2020

Gross profit margin,
Q4 2020

Gross profit,
Q4 2019

Gross profit margin,
Q4 2019

Machine Clothing

$

73,410

50.9

%

$

75,601

50.2

%

Albany Engineered Composites

17,908

21.7

%

21,040

19.6

%

Consolidated total

$

91,318

40.3

%

$

96,641

37.5

%

(in thousands, except percentages)

Gross profit,
YTD 2020

Gross profit margin,
YTD 2020

Gross profit,...

Gross profit margin,
YTD 2019

Machine Clothing

$

301,144

52.6

%

$

309,641

51.5

%

Albany Engineered Composites

69,928

21.3

%

88,060

19.4

%

Consolidated total

$

371,072

41.2

%

$

397,701

37.7

%

A reconciliation from operating income/(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended December 31, 2020

(in thousands)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

41,386

$

8,787

$

(15,187

)

$

34,986

Interest, taxes, other income/(expense)

(7,376

)

(7,376

)

Net income/(loss) (GAAP)

41,386

8,787

(22,563

)

27,610

Interest expense, net

3,542

3,542

Income tax expense

4,327

4,327

Depreciation and amortization expense

5,161

12,303

935

18,399

EBITDA (non-GAAP)

46,547

21,090

(13,759

)

53,878

Restructuring expenses

1,332

215

1,547

Foreign currency revaluation (gains)/losses

3,009

(372

)

(1,134

)

1,503

Acquisition/integration costs

405

405

Pre-tax (income) attributable to noncontrolling interest

(64

)

(64

)

Adjusted EBITDA (non-GAAP)

$

50,888

$

21,274

$

(14,893

)

$

57,269

Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)

35.3

%

25.7

%

25.2

%

Three months ended December 31, 2019

(in thousands)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

46,277

$

10,922

$

(13,619

)

$

43,580

Interest, taxes, other income/(expense)

(13,989

)

(13,989

)

Net income/(loss) (GAAP)

46,277

10,922

(27,608

)

29,591

Interest expense, net

3,886

3,886

Income tax expense

9,754

9,754

Depreciation and amortization expense

5,201

11,611

1,019

17,831

EBITDA (non-GAAP)

51,478

22,533

(12,949

)

61,062

Restructuring expenses

4

1,815

(53

)

1,766

Foreign currency revaluation (gains)/losses

1,365

(12

)

(748

)

605

Pension curtailment expense

478

478

Acquisition/integration costs

421

200

621

Pre-tax (income) attributable to noncontrolling interest

(586

)

(586

)

Adjusted EBITDA (non-GAAP)

$

52,847

$

24,171

$

(13,072

)

$

63,946

Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)

35.1

%

22.6

%

24.8

%

Year ended December 31, 2020

(in thousands)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

190,805

$

31,536

$

(56,261

)

$

166,080

Interest, taxes, other income/(expense)

(68,837

)

(68,837

)

Net income/(loss) (GAAP)

190,805

31,536

(125,098

)

97,243

Interest expense, net

13,584

13,584

Income tax expense

41,831

41,831

Depreciation and amortization expense

20,304

48,496

3,905

72,705

EBITDA (non-GAAP)

211,109

80,032

(65,778

)

225,363

Restructuring expenses

2,746

2,821

169

5,736

Foreign currency revaluation (gains)/losses

1,743

130

13,571

15,444

Former CEO termination costs

2,742

2,742

Acquisition/integration costs

1,272

1,272

Pre-tax loss attributable to noncontrolling interest

1,348

1,348

Adjusted EBITDA (non-GAAP)

$

215,598

$

85,603

$

(49,296

)

$

251,905

Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)

37.6

%

26.1

%

28.0

%

Year ended December 31, 2019

(in thousands)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

191,965

$

55,520

$

(53,909

)

$

193,576

Interest, taxes, other income/(expense)

(60,193

)

(60,193

)

Net income/(loss) (GAAP)

191,965

55,520

(114,102

)

133,383

Interest expense, net

16,921

16,921

Income tax expense

44,829

44,829

Depreciation and amortization expense

21,876

44,670

4,249

70,795

EBITDA (non-GAAP)

213,841

100,190

(48,103

)

265,928

Restructuring expenses

1,129

1,833

(57

)

2,905

Foreign currency revaluation (gains)/losses

630

643

(4,463

)

(3,190

)

Pension curtailment expense

478

478

Acquisition/integration costs

421

200

621

Pre-tax (income) attributable to noncontrolling interest

(1,308

)

(1,308

)

Adjusted EBITDA (non-GAAP)

$

215,600

$

101,779

$

(51,945

)

$

265,434

Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)

35.9

%

22.5

%

25.2

%

Per share impact of the adjustments to earnings per share are as follows:

Three months ended December 31, 2020
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

1,547

$

485

$

1,062

$

0.03

Foreign currency revaluation (gains)/losses (a)

1,503

1,379

124

0.00

Acquisition/integration costs

405

121

284

0.01

Three months ended December 31, 2019
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

1,766

$

494

$

1,272

$

0.04

Foreign currency revaluation (gains)/losses

605

169

436

0.01

Pension curtailment charge

478

91

387

0.01

Acquisition/integration costs

621

156

465

0.01

Year ended December 31, 2020
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

5,736

$

1,862

$

3,874

$

0.11

Foreign currency revaluation (gains)/losses(a)

15,444

896

14,548

0.46

Former CEO termination costs

2,742

713

2,029

0.06

Acquisition/integration costs

1,272

380

892

0.04

(a) In Q1 2020, the company recorded losses of approximately $17 million in jurisdictions where it cannot record a tax benefit from the losses, and in Q4 2020, recorded gains of approximately $3 million in jurisdictions where it did not record a tax expense from the gains, which results in an unusual relationship between the pre-tax and after-tax amounts.

Year ended December 31, 2019
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

2,905

$

824

$

2,081

$

0.06

Foreign currency revaluation (gains)/losses

(3,190

)

(904

)

(2,286

)

(0.07

)

Pension curtailment charge

478

91

387

0.01

Acquisition/integration costs

621

156

465

0.01

The following table provides a reconciliation of Earnings per share to Adjusted Earnings per share:

Three months ended December 31,

Years Ended December 31,

Per share amounts (Basic)

2020

2019

2020

2019

Earnings per share (GAAP)

$

0.85

$

0.90

$

3.05

$

4.10

Adjustments, after tax:

Restructuring expenses

0.03

0.04

0.11

0.06

Foreign currency revaluation (gains)/losses

0.01

0.46

(0.07

)

Former CEO termination costs

0.06

Pension curtailment charge

0.01

0.01

Acquisition/integration costs

0.01

0.01

0.04

0.01

Adjusted Earnings per share (non-GAAP)

$

0.89

$

0.97

$

3.72

$

4.11

The calculations of net debt are as follows:

(in thousands)

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

Current maturities of long-term debt

$

9

$

12

$

17

$

20

$

20

Long-term debt

398,000

418,000

435,000

491,002

424,009

Total debt

398,009

418,012

435,017

491,022

424,029

Cash and cash equivalents

241,316

215,304

204,037

222,680

195,540

Net debt (non-GAAP)

$

156,693

$

202,708

$

230,980

$

268,342

$

228,489

The tables below provide a reconciliation of forecasted full-year 2021 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Forecast of Full Year 2021 Adjusted EBITDA

Machine Clothing

AEC

(in millions)

Low

High

Low

High

Net income attributable to the Company (GAAP) (b)

$

176

$

185

$

5

$

14

Income attributable to the noncontrolling interest

Interest expense, net

Income tax expense

Depreciation and amortization

19

20

50

51

EBITDA (non-GAAP)

195

205

55

65

Restructuring expenses, net (c)

Foreign currency revaluation (gains)/losses (c)

Acquisition/integration costs (c)

Pre-tax (income)/loss attributable to non-controlling interest

Adjusted EBITDA (non-GAAP)

$

195

$

205

$

55

$

65

(b) Interest, Other income/expense and Income taxes are not allocated to the business segments

Forecast of Full Year 2021 Adjusted EBITDA

Total Company

(in millions)

Low

High

Net income attributable to the Company (GAAP)

$

78

$

91

Income attributable to the noncontrolling interest

Interest expense, net

17

15

Income tax expense

30

39

Depreciation and amortization

70

75

EBITDA (non-GAAP)

195

220

Restructuring expenses, net (c)

Foreign currency revaluation (gains)/losses (c)

Acquisition/integration costs (c)

Pre-tax (income)/loss attributable to non-controlling interest

Adjusted EBITDA (non-GAAP)

$

195

$

220

Total Company

Forecast of Full Year 2021 Earnings per share (basic) (d)

Low

High

Net income attributable to the Company (GAAP)

$

2.40

$

2.80

Restructuring expenses, net (c)

Foreign currency revaluation (gains)/losses (c)

Acquisition/integration costs (c)

Adjusted Earnings per share (non-GAAP)

$

2.40

$

2.80

(c) Due to the uncertainty of these items, we are unable to forecast these items for 2021

(d) Calculations based on shares outstanding estimate of 32.3 million.

About Albany International Corp.

Albany International is a global advanced textiles and materials processing company, with two core businesses. The Machine Clothing segment is the world’s leading producer of custom-designed fabrics and belts essential to production in the paper, nonwovens, and other process industries. Albany Engineered Composites is a rapidly growing supplier of highly engineered composite parts for the aerospace industry. Albany International is headquartered in Rochester, New Hampshire, operates 23 plants in 11 countries, employs over 4,000 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

Non-GAAP Measures

This release, including the conference call commentary associated with this release, contains certain non-GAAP measures, including: net sales, and percent change in net sales, excluding the impact of currency translation effects (for each segment and on a consolidated basis); EBITDA and Adjusted EBITDA (for each segment and on a consolidated basis, represented in dollars or as a percentage of net sales); Net debt; and Adjusted earnings per share (or Adjusted EPS). Such items are provided because management believes that they provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net sales and increases or decreases in Net sales, after currency effects are excluded, can give management and investors insight into underlying sales trends. Net sales, or percent changes in net sales, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

EBITDA, Adjusted EBITDA and Adjusted EPS are performance measures that relate to the Company’s continuing operations. EBITDA, or net income with interest, taxes, depreciation, and amortization added back, is a common indicator of financial performance used, among other things, to analyze and compare core profitability between companies and industries because it eliminates effects due to differences in financing, asset bases and taxes. The Company calculates EBITDA by removing the following from Net income: Interest expense, net, Income tax expense, Depreciation and amortization expense. Adjusted EBITDA is calculated by: adding to EBITDA costs associated with restructuring, former CEO termination costs, and inventory write-offs associated with discontinued businesses; adding charges and credits related to pension plan settlements and curtailments; adding (or subtracting) revaluation losses (or gains); subtracting (or adding) gains (or losses) from the sale of buildings or investments; subtracting insurance recovery gains in excess of previously recorded losses; adding acquisition and related retention agreement expenses and subtracting (or adding) Income (or loss) attributable to the non-controlling interest in Albany Safran Composites (ASC). Adjusted EBITDA may also be presented as a percentage of net sales by dividing it by net sales. An understanding of the impact in a particular quarter of specific restructuring costs, former CEO severance costs, acquisition and related retention agreement expenses, currency revaluation, inventory write-offs associated with discontinued businesses, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Restructuring expenses, while frequent in recent years, are reflective of significant reductions in manufacturing capacity and associated headcount in response to shifting markets, and not of the profitability of the business going forward as restructured. Adjusted earnings per share (Adjusted EPS) is calculated by adding to (or subtracting from) net income attributable to the Company per share, on an after-tax basis: restructuring charges; former CEO severance costs; charges and credits related to pension plan settlements and curtailments; inventory write-offs associated with discontinued businesses; foreign currency revaluation losses (or gains); acquisition-related expenses; and losses (or gains) from the sale of investments.

EBITDA, Adjusted EBITDA, and Adjusted EPS, as defined by the Company, may not be similar to similarly named measures of other companies. Such measures are not considered measurements under GAAP, and should be considered in addition to, but not as substitutes for, the information contained in the Company’s statements of income.

The Company discloses certain income and expense items on a per-share basis. The Company believes that such disclosures provide important insight into underlying quarterly earnings and are financial performance metrics commonly used by investors. The Company calculates the quarterly per-share amount for items included in continuing operations by using an income tax rate based on either the tax rates in specific countries or the estimated tax rate applied to total company results. The tax rate applied excludes income tax adjustments (discrete tax adjustments and the effect of changes in the estimated income tax rate). The after-tax amount is then divided by the weighted-average number of shares outstanding for each period. Year-to-date earnings per-share effects are determined by adding the amounts calculated at each reporting period.

Net debt is, in the opinion of the Company, helpful to investors wishing to understand what the Company’s debt position would be if all available cash were applied to pay down indebtedness. The Company calculates Net debt by subtracting Cash and cash equivalents from Total debt. Total debt is calculated by adding Long-term debt, Current maturities of long-term debt, and Notes and loans payable, if any.

Forward-Looking Statements

This press release may contain statements, estimates, guidance or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," "should," "look for," "guidance," "guide," and similar expressions identify forward-looking statements, which generally are not historical in nature. Because forward-looking statements are subject to certain risks and uncertainties (including, without limitation, those set forth in the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q), actual results may differ materially from those expressed or implied by such forward-looking statements.

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic and paper-industry trends and conditions during 2021 and in future years; expectations in 2021 and in future periods of sales, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net sales), Adjusted EPS, income, gross profit, gross margin, cash flows and other financial items in each of the Company’s businesses, and for the Company as a whole; the timing and impact of production and development programs in the Company’s AEC business segment and the sales growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company’s financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Statements expressing management’s assessments of the growth potential of its businesses, or referring to earlier assessments of such potential, are not intended as forecasts of actual future growth, and should not be relied on as such. While management believes such assessments to have a reasonable basis, such assessments are, by their nature, inherently uncertain. This release and earlier releases set forth a number of assumptions regarding these assessments, including historical results, independent forecasts regarding the markets in which these businesses operate, and the timing and magnitude of orders for our customers’ products. Historical growth rates are no guarantee of future growth, and such independent forecasts and assumptions could prove materially incorrect in some cases.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210210005754/en/

Contacts

John Hobbs
603-330-5897
john.hobbs@albint.com