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Albany International Reports Second-Quarter 2020 Results

·11 min read

Albany International Corp. (NYSE:AIN) today reported operating results for its second quarter of 2020, which ended June 30, 2020.

"We had an outstanding quarter, despite the challenges of addressing this pandemic," said Albany International President and Chief Executive Officer, Bill Higgins. "Our top priority remains protecting the health and safety of our employees, and I am proud of how they performed. Across the company, our teams excelled by adapting safely to the challenging environment, driving operational improvements, doing a great job for customers, and delivering year-over-year gross margin expansion in both segments."

"In the months to come, we expect the economic impact of the global slowdown on our businesses may become more challenging. Our strong balance sheet and good cash flow conversion, however, enable us to continue to invest in our businesses with the flexibility required to address challenges and opportunities in the market," concluded Higgins.

For the second quarter ended June 30, 2020:

  • Net sales were $226.0 million, down $48.0 million, or 17.5%, when compared to the prior year. Sales declined $46.4 million, or 39.0%, in the Engineered Composites segment driven by the temporary production halt on the LEAP program.

  • Gross profit of $103.0 million was 2.1% lower than the $105.2 million reported for the same period of 2019.

  • STG&R expenses were $47.4 million, compared to $50.1 million in the same period of 2019. Losses from the revaluation of foreign currency balances increased STG&R by $1.1 million in 2020, and by $0.3 million in 2019.

  • Operating income was $52.7 million, compared to $54.2 million in the prior year, a decrease of 2.8%, as lower gross profit and higher restructuring expenses were partially offset by lower STG&R expenses.

  • The effective tax rate was 32.1%, compared to 29.6% during the same period last year. The higher tax rate in 2020 was primarily caused by a higher share of our global profits in jurisdictions with higher tax rates.

  • Net income attributable to the Company was $32.4 million ($1.00 per share), compared to $34.1 million ($1.05 per share) in Q2 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $1.09 per share in the second quarter of each year.

  • Adjusted EBITDA (a non-GAAP measure) was $73.7 million, compared to $72.4 million in Q2 2019, an increase of 1.7%.

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

"We delivered exceptional margins during the second quarter, helped by a net $7 million favorable adjustment to estimated long-term contract profitability in the Engineered Composites segment, and favorable currency and mix benefits in the Machine Clothing segment," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are re-introducing guidance for 2020. We have worked closely with our aerospace and defense customers over the course of the second quarter to define our production plans for the second half of the year. Visibility has also improved somewhat for demand for our Machine Clothing products; as expected, we have seen some weakening of orders, driven by overall macroeconomic conditions, as we move into the second half of the year. This is reflected in our guidance. Across both segments, our guidance range reflects our best assessments of the likely impacts of the ongoing pandemic to our markets; however, additional risk does remain, should the macroeconomic impacts prove to be more severe than we are currently expecting."

Outlook for Full-Year 2020

Albany International is re-introducing financial guidance for the full-year 2020:

  • Total company revenue of between $870 and $890 million;

  • Effective income tax rate, including tax adjustments, of 36% to 38%;

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

  • Capital expenditures in the range of $45 to $55 million;

  • GAAP earnings per share of between $2.26 and $2.51;

  • Adjusted earnings per share of between $2.85 and $3.10;

  • Total company Adjusted EBITDA of $220 to $235 million;

  • Machine Clothing revenue of $545 to $555 million;

  • Machine Clothing Adjusted EBITDA of between $190 and $200 million;

  • Engineered Composites revenue between $325 to $335 million; and

  • Engineered Composites Adjusted EBITDA of $75 to $85 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

2020

2019

2020

2019

Net sales

$

225,990

$

273,949

$

461,754

$

525,321

Cost of goods sold

123,010

168,767

269,302

328,368

Gross profit

102,980

105,182

192,452

196,953

Selling, general, and administrative expenses

38,543

40,816

78,649

81,761

Technical and research expenses

8,873

9,242

18,003

19,491

Restructuring expenses, net

2,837

899

3,479

1,383

Operating income

52,727

54,225

92,321

94,318

Interest expense, net

3,823

4,631

7,800

9,048

Other expense/(income), net

1,091

930

16,660

(278

)

Income before income taxes

47,813

48,664

67,861

85,548

Income tax expense

15,364

14,405

27,818

21,881

Net income

32,449

34,259

40,043

63,667

Net (loss)/income attributable to the noncontrolling interest

95

205

(1,420

)

423

Net income attributable to the Company

$

32,354

$

34,054

$

41,463

$

63,244

Earnings per share attributable to Company shareholders - Basic

$

1.00

$

1.05

$

1.28

$

1.96

Earnings per share attributable to Company shareholders - Diluted

$

1.00

$

1.05

$

1.28

$

1.96

Shares of the Company used in computing earnings per share:

Basic

32,328

32,299

32,320

32,286

Diluted

32,336

32,311

32,328

32,298

Dividends declared per share, Class A and Class B

$

0.19

$

0.18

$

0.38

$

0.36

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

June 30, 2020

December 31,
2019

ASSETS

Cash and cash equivalents

$

204,037

$

195,540

Accounts receivable, net

202,612

218,271

Contract assets, net

96,092

79,070

Inventories

115,532

95,149

Income taxes prepaid and receivable

5,998

6,162

Prepaid expenses and other current assets

26,209

24,142

Total current assets

$

650,480

$

618,334

Property, plant and equipment, net

443,046

466,462

Intangibles, net

49,706

52,892

Goodwill

181,302

180,934

Deferred income taxes

40,999

51,621

Noncurrent receivables, net

36,901

41,234

Other assets

59,526

62,891

Total assets

$

1,461,960

$

1,474,368

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$

50,181

$

65,203

Accrued liabilities

115,458

125,885

Current maturities of long-term debt

17

20

Income taxes payable

11,546

11,611

Total current liabilities

177,202

202,719

Long-term debt

435,000

424,009

Other noncurrent liabilities

134,898

132,725

Deferred taxes and other liabilities

8,702

12,226

Total liabilities

755,802

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; 39,112,722 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

432,738

432,518

Retained earnings

726,233

698,496

Accumulated items of other comprehensive income:

Translation adjustments

(139,635

)

(122,852

)

Pension and postretirement liability adjustments

(48,962

)

(49,994

)

Derivative valuation adjustment

(11,030

)

(3,135

)

Treasury stock (Class A), at cost; 8,394,022 shares in 2020 and 8,408,770 shares in 2019

(256,074

)

(256,391

)

Total Company shareholders' equity

703,311

698,683

Noncontrolling interest

2,847

4,006

Total equity

706,158

702,689

Total liabilities and shareholders' equity

$

1,461,960

$

1,474,368

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

OPERATING ACTIVITIES

Net income

$

32,449

$

34,259

$

40,043

$

63,667

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

Depreciation

15,498

15,345

31,004

30,987

Amortization

2,456

2,409

5,020

4,723

Change in deferred taxes and other liabilities

3,543

319

9,360

(746

)

Provision for write-off of property, plant and equipment

36

720

233

1,106

Non-cash interest expense

20

152

171

303

Compensation and benefits paid or payable in Class A Common Stock

1,198

1,170

516

623

Fair value adjustment on foreign currency option

64

Provision for credit losses from uncollected receivables and contract assets

114

219

1,769

804

Foreign currency remeasurement loss/(gain) on intercompany loans

194

100

15,581

(1,607

)

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

Accounts receivable

11,511

14,215

8,117

2,006

Contract assets

(11,169

)

3,528

(20,009

)

3,047

Inventories

(4,878

)

(1,505

)

(24,628

)

(18,167

)

Prepaid expenses and other current assets

(301

)

(1,384

)

(2,457

)

(4,188

)

Income taxes prepaid and receivable

29

(316

)

(208

)

358

Accounts payable

(9,337

)

(14,276

)

(10,383

)

7,474

Accrued liabilities

4,171

(1,074

)

(10,901

)

(12,169

)

Income taxes payable

5,526

5,724

1,955

7,230

Noncurrent receivables

628

(46

)

397

(340

)

Other noncurrent liabilities

(464

)

(481

)

(524

)

(2,160

)

Other, net

(552

)

(548

)

(1,086

)

145

Net cash provided by operating activities

50,672

58,530

44,034

83,096

INVESTING ACTIVITIES

Purchases of property, plant and equipment

(9,212

)

(14,606

)

(21,971

)

(35,404

)

Purchased software

(27

)

(46

)

(49

)

Net cash used in investing activities

(9,212

)

(14,633

)

(22,017

)

(35,453

)

FINANCING ACTIVITIES

Proceeds from borrowings

70,000

20,000

Principal payments on debt

(56,005

)

(9,004

)

(59,011

)

(37,008

)

Principal payments on finance lease liabilities

(329

)

(178

)

(6,463

)

(578

)

Taxes paid in lieu of share issuance

(490

)

(971

)

Proceeds from options exercised

20

28

20

72

Dividends paid

(6,141

)

(5,813

)

(12,280

)

(11,621

)

Net cash used in financing activities

(62,455

)

(14,967

)

(8,224

)

(30,106

)

Effect of exchange rate changes on cash and cash equivalents

2,352

(1,082

)

(5,296

)

(59

)

Increase/(decrease) in cash and cash equivalents

(18,643

)

27,848

8,497

17,478

Cash and cash equivalents at beginning of period

222,680

187,385

195,540

197,755

Cash and cash equivalents at end of period

$

204,037

$

215,233

$

204,037

$

215,233

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, Q2
2020

Decrease due to
changes in
currency
translation rates

Q2 2020 sales
on same basis
as Q2 2019
currency
translation rates

Net sales as
reported, Q2
2019

% Change
compared to Q2
2019, excluding
currency rate
effects

Machine Clothing

$

153,433

$

1,559

$

154,992

$

155,016

%

Albany Engineered Composites

72,557

26

72,583

118,933

(39.0)

%

Consolidated total

$

225,990

$

1,585

$

227,575

$

273,949

(16.9)

%

(in thousands, except percentages)

Net sales as
reported, YTD
2020

Decrease 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

$

290,035

$

3,124

$

293,159

$

299,349

(2.1)

%

Albany Engineered Composites

171,719

486

172,205

225,972

(23.8)

%

Consolidated total

$

461,754

$

3,610

$

465,364

$

525,321

(11.4)

%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)

Gross profit,
Q2 2020

Gross profit margin,
Q2 2020

Gross profit,
Q2 2019

Gross profit margin,
Q2 2019

Machine Clothing

$

83,612

54.5

%

$

80,287

51.8

%

Albany Engineered Composites

19,368

26.7

%

24,895

20.9

%

Consolidated total

$

102,980

45.6

%

$

105,182

38.4

%

(in thousands, except percentages)

Gross profit,
YTD 2020

Gross profit margin,
YTD 2020

Gross profit,
YTD 2019

Gross profit margin,
YTD 2019

Machine Clothing

$

156,264

53.9

%

$

154,815

51.7

%

Albany Engineered Composites

36,188

21.1

%

42,138

18.6

%

Consolidated total

$

192,452

41.7

%

$

196,953

37.5

%

Adjusted EBITDA for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended June 30, 2020

(in thousands, except percentages)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

56,543

$

8,299

$

(12,115

)

$

52,727

Interest, taxes, other income/(expense)

(20,278

)

(20,278

)

Net income/(loss) (GAAP)

56,543

8,299

(32,393

)

32,449

Interest expense, net

3,823

3,823

Income tax expense

15,364

15,364

Depreciation and amortization expense

4,981

11,971

...

1,002

17,954

EBITDA (non-GAAP)

61,524

20,270

(12,204

)

69,590

Restructuring expenses

388

2,248

201

2,837

Foreign currency revaluation (gains)/losses

973

30

20

1,023

Acquisition/integration costs

278

278

Pre-tax (income) attributable to noncontrolling interest

(58

)

(58

)

Adjusted EBITDA (non-GAAP)

$

62,885

$

22,768

$

(11,983

)

$

73,670

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

41.0

%

31.4

%

32.6

%

Three months ended June 30, 2019

(in thousands, except percentages)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

49,538

$

17,732

$

(13,045

)

$

54,225

Interest, taxes, other income/(expense)

(19,966

)

(19,966

)

Net income/(loss) (GAAP)

49,538

17,732

(33,011

)

34,259

Interest expense, net

4,631

4,631

Income tax expense

14,405

14,405

Depreciation and amortization expense

5,606

11,071

1,077

17,754

EBITDA (non-GAAP)

55,144

28,803

(12,898

)

71,049

Restructuring expenses

935

(32

)

(4

)

899

Foreign currency revaluation (gains)/losses

317

79

345

741

Pre-tax (income) attributable to noncontrolling

(272

)

(272

)

Adjusted EBITDA (non-GAAP)

$

56,396

$

28,578

$

(12,557

)

$

72,417

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

36.4

%

24.0

%

26.4

%

Six months ended June 30, 2020

(in thousands, except percentages)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

103,718

$

15,922

$

(27,319

)

$

92,321

Interest, taxes, other income/(expense)

(52,278

)

(52,278

)

Net income/(loss) (GAAP)

103,718

15,922

(79,597

)

40,043

Interest expense, net

7,800

7,800

Income tax expense

27,818

27,818

Depreciation and amortization expense

10,068

23,956

2,000

36,024

EBITDA (non-GAAP)

113,786

39,878

(41,979

)

111,685

Restructuring expenses

1,030

2,248

201

3,479

Foreign currency revaluation (gains)/losses

(2,688

)

727

14,850

12,889

Former CEO termination costs

2,742

2,742

Acquisition/integration costs

576

576

Pre-tax loss attributable to noncontrolling interest

1,434

1,434

Adjusted EBITDA (non-GAAP)

$

112,128

$

44,863

$

(24,186

)

$

132,805

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

38.7

%

26.1

%

28.8

%

Six months ended June 30, 2019

(in thousands, except percentages)

Machine Clothing

Albany Engineered
Composites

Corporate expenses
and other

Total Company

Operating income/(loss) (GAAP)

$

93,781

$

27,254

$

(26,717

)

$

94,318

Interest, taxes, other income/(expense)

(30,651

)

(30,651

)

Net income/(loss) (GAAP)

93,781

27,254

(57,368

)

63,667

Interest expense, net

9,048

9,048

Income tax expense

21,881

21,881

Depreciation and amortization expense

11,525

21,973

2,212

35,710

EBITDA (non-GAAP)

105,306

49,227

(24,227

)

130,306

Restructuring expenses

1,336

51

(4

)

1,383

Foreign currency revaluation (gains)/losses

286

314

(1,691

)

(1,091

)

Pre-tax (income) attributable to noncontrolling interest

(561

)

(561

)

Adjusted EBITDA (non-GAAP)

$

106,928

$

49,031

$

(25,922

)

$

130,037

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

35.7

%

21.7

%

24.8

%

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

Three months ended June 30, 2020
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

2,837

$

953

$

1,884

$

0.06

Foreign currency revaluation (gains)/losses

1,023

536

487

0.02

Acquisition/integration costs

278

83

195

0.01

Three months ended June 30, 2019
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

899

$

255

$

644

$

0.02

Foreign currency revaluation (gains)/losses

741

210

531

0.02

Six months ended June 30, 2020
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

3,479

$

1,145

$

2,334

$

0.07

Foreign currency revaluation (gains)/losses(a)

12,889

(1,009

)

13,898

0.44

Former CEO termination costs

2,742

713

2,029

0.06

Acquisition/integration costs

576

172

404

0.02

Six months ended June 30, 2019
(in thousands, except per share amounts)

Pre tax
Amounts

Tax
Effect

After tax
Effect

Per share
Effect

Restructuring expenses

$

1,383

$

397

$

986

$

0.03

Foreign currency revaluation (gains)/losses

(1,091

)

(329

)

(762

)

(0.02

)

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

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

Three months ended June 30,

Six months ended June 30,

Per share amounts (Basic)

2020

2019

2020

2019

Earnings per share (GAAP)

$

1.00

$

1.05

$

1.28

$

1.96

Adjustments, after tax:

Restructuring expenses

0.06

0.02

0.07

0.03

Foreign currency revaluation (gains)/losses

0.02

0.02

0.44

(0.02

)

Former CEO termination costs

0.06

Acquisition/integration costs

0.01

0.02

Adjusted Earnings per share

$

1.09

$

1.09

$

1.87

$

1.97

The calculations of net debt are as follows:

(in thousands)

June 30, 2020

March 31, 2020

December 31, 2019

Current maturities of long-term debt

$

17

$

20

$

20

Long-term debt

435,000

491,002

424,009

Total debt

435,017

491,022

424,029

Cash and cash equivalents

204,037

222,680

195,540

Net debt

$

230,980

$

268,342

$

228,489

The tables below provide a reconciliation of forecasted full-year 2020 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Forecast of Full Year 2020 Adjusted EBITDA

Machine Clothing

AEC

(in millions)

Low

High

Low

High

Net income attributable to the Company (GAAP)

$

173

$

180

$

22

$

30

Income attributable to the noncontrolling interest

(1

)

(1

)

Interest expense, net

Income tax expense

Depreciation and amortization

19

22

49

51

EBITDA (non-GAAP)

192

202

70

80

Restructuring expenses, net (a)

1

1

2

2

Foreign currency revaluation (gains)/losses (a)

(3

)

(3

)

1

1

Acquisition/integration costs (a)

1

1

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

1

1

Adjusted EBITDA (non-GAAP)

$

190

$

200

$

75

$

85

Forecast of Full Year 2020 Adjusted EBITDA

Total Company

(in millions)

Low

High

Net income attributable to the Company (GAAP)

$

73

$

81

Income attributable to the noncontrolling interest

(1

)

(1

)

Interest expense, net

14

15

Income tax expense

43

44

Depreciation and amortization

70

75

EBITDA (non-GAAP)

199

214

Restructuring expenses, net (a)

3

3

Foreign currency revaluation (gains)/losses (a)

13

13

Former CEO termination costs

3

3

Acquisition/integration costs (a)

1

1

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

1

1

Adjusted EBITDA (non-GAAP)

$

220

$

235

Total Company

Forecast of Full Year 2020 Earnings per share (basic) (b)

Low

High

Net income attributable to the Company (GAAP)

$

2.26

$

2.51

Restructuring expenses, net (a)

0.07

0.07

Foreign currency revaluation (gains)/losses (a)

0.44

0.44

Former CEO termination costs

0.06

0.06

Acquisition/integration costs (a)

0.02

0.02

Adjusted Earnings per share (non-GAAP)

$

2.85

$

3.10

(a) Due to the uncertainty of these items, we are unable to forecast these items for 2020; the amount shown represents the value incurred through the second quarter

(b) 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 approximately 4,600 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 in the MC segment, 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 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 2020 and in future years; expectations in 2020 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/20200729005810/en/

Contacts

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