Press Release Details

ROCHESTER, N.H.--(BUSINESS WIRE)--Feb. 10, 2021-- 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, YTD 2019				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/

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

Source: Albany International Corp.