Press Release Details

Raises 2021 Guidance

Announces $200 Million Share Repurchase Authorization

ROCHESTER, N.H.--(BUSINESS WIRE)--Oct. 25, 2021-- Albany International Corp. (NYSE:AIN) today reported operating results for its third quarter of 2021, which ended September 30, 2021. Additionally, the company raised its full year financial guidance for 2021. Albany’s Board of Directors authorized a share repurchase program of up to $200 million.

"We are reporting another quarter of solid performance," said Bill Higgins, President and CEO. "Revenues of $232 million increased 9.6%. The Albany team delivered another strong quarter with solid growth in both businesses. Machine Clothing segment sales grew 11% from 2020’s third quarter and sustained excellent operating performance and margins. Engineered composites grew again in the quarter and is well positioned for stronger growth as military and commercial programs, led by single aisle aircraft, kick in.

“We are in excellent financial health with low debt and strong free cash flow. To that end, the Board of Directors has authorized a $200 million share repurchase program expanding the capital allocation options available to us,” concluded Higgins.

For the third quarter ended September 30, 2021:

• Net sales were $232.4 million, up 9.6%, or 8.8% after adjusting for currency translation, when compared to the prior year.
• Gross profit of $92.0 million was 5.4% higher than the $87.3 million reported for the same period of 2020.
• Selling, Technical, General, and Research (STG&R) expenses were $47.4 million, compared to $47.8 million in the same period of 2020.
• Operating income was $44.5 million, compared to $38.8 million in the prior year, an increase of 15%.
• The effective tax rate was 29.4%, compared to 24.7% for the third quarter of 2020. A higher share of our global profits generated in jurisdictions with higher tax rates combined with less favorable discrete income tax adjustments contributed to the higher tax rate this quarter compared to that for the third-quarter 2020.
• Net income attributable to the Company was $30.9 million ($0.95 per share), compared to $29.6 million ($0.92 per share) in the third quarter of 2020. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.83 per share, compared to $0.96 per share for the same period of last year.
• Adjusted EBITDA (a non-GAAP measure) was $60.2 million, compared to $61.8 million in the third quarter of 2020, a decrease of 2.6%.

Please see the tables below for a reconciliation of non-GAAP measures to their comparable GAAP measures. During the third quarter of 2021, the Company was awarded $5.8 million under the U.S. Government's Aviation Manufacturing Jobs Protection Program (AMJP). The adjusted results presented in the tables below exclude the impact of the AMJP award as management does not believe that the award is reflective of ongoing operational performance.

"The results of the third quarter are reflective of the strategic positioning of our businesses and continued excellent operational performance across our operations. We are again raising our guidance for 2021," said Stephen Nolan, Chief Financial Officer. "We recognize there are risks ahead in terms of supply chain constraints and inflationary pressures. However, the Company is very well positioned with excellent customer relationships, a strong and growing business base and in-demand advanced technologies that are expected to drive long-term business growth."

Outlook for Full-Year 2021

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

• Total company revenue between $900 and $920 million;
• Effective income tax rate, including tax adjustments, between 28% and 30%;
• Total company depreciation and amortization of approximately $75 million;
• Capital expenditures in the range of $40 to $50 million;
• GAAP earnings per share between $3.23 and $3.38 and Adjusted earnings per share between $3.15 and $3.30;
• Total company Adjusted EBITDA between $230 to $240 million;
• Machine Clothing revenue between $600 to $610 million;
• Machine Clothing Adjusted EBITDA between $215 and $225 million;
• Albany Engineered Composites (AEC) revenue between $300 to $310 million; and
• Albany Engineered Composites Adjusted EBITDA between $65 to $70 million.

Share Repurchase Authorization

On October 25, 2021, the Company's Board of Directors authorized the Company to repurchase shares of up to $200 million through open market purchases, privately negotiated transactions or otherwise, and to determine the prices, times and amounts. The program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company's discretion. The share repurchase program does not have an expiration date. The timing and amount of any share repurchases will be based on the Company’s liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and capital structure.

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Net sales		$	232,442			$	211,999			$	689,322			$	673,753
Cost of goods sold		140,400				124,697				407,006				393,999
Gross profit		92,042				87,302				282,316				279,754
Selling, general, and administrative expenses		37,696				39,518				116,899				118,167
Technical and research expenses		9,673				8,301				28,916				26,304
Restructuring expenses, net		187				710				230				4,189
Operating income		44,486				38,773				136,271				131,094
Interest expense, net		3,734				2,242				11,521				10,042
Aviation Manufacturing Jobs Protection (AMJP) grant		(5,832		)		—				(5,832		)		—
Other expense/(income), net		2,753				(2,745		)		4,215				13,915
Income before income taxes		43,831				39,276				126,367				107,137
Income tax expense		12,889				9,686				36,375				37,504
Net income		30,942				29,590				89,992				69,633
Net income/(loss) attributable to the noncontrolling interest		80				1				150				(1,419		)
Net income attributable to the Company		$	30,862			$	29,589			$	89,842			$	71,052
Earnings per share attributable to Company shareholders - Basic		$	0.95			$	0.92			$	2.78			$	2.20
Earnings per share attributable to Company shareholders - Diluted		$	0.95			$	0.91			$	2.77			$	2.20
Shares of the Company used in computing earnings per share:
Basic		32,381				32,337				32,369				32,326
Diluted		32,434				32,344				32,424				32,333
Dividends declared per share, Class A and Class B		$	0.20			$	0.19			$	0.60			$	0.57

ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
		September 30, 2021				December 31, 2020
ASSETS
Cash and cash equivalents		$	286,217			$	241,316
Accounts receivable, net		199,124				188,423
Contract assets, net		115,924				139,289
Inventories		118,129				110,478
Income taxes prepaid and receivable		3,509				5,940
Prepaid expenses and other current assets		29,021				31,830
Total current assets		$	751,924			$	717,276
Property, plant and equipment, net		426,806				448,554
Intangibles, net		41,020				46,869
Goodwill		183,568				187,553
Deferred income taxes		30,538				38,757
Noncurrent receivables, net		33,471				36,265
Other assets		72,916				74,662
Total assets		$	1,540,243			$	1,549,936
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable		$	54,397			$	49,173
Accrued liabilities		112,481				125,459
Current maturities of long-term debt		—				9
Income taxes payable		14,623				16,222
Total current liabilities		181,501				190,863
Long-term debt		350,000				398,000
Other noncurrent liabilities		117,057				130,424
Deferred taxes and other liabilities		11,352				10,784
Total liabilities		659,910				730,071
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; 40,759,527 issued in 2021 and 39,115,405 in 2020		41				39
Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 1,154 in 2021 and 1,617,998 in 2020		—				2
Additional paid in capital		436,079				433,696
Retained earnings		841,162				770,746
Accumulated items of other comprehensive income:
Translation adjustments		(100,327		)		(83,203		)
Pension and postretirement liability adjustments		(39,059		)		(39,661		)
Derivative valuation adjustment		(5,525		)		(9,544		)
Treasury stock (Class A), at cost; 8,379,804 shares in 2021 and 8,391,011 in 2020		(255,768		)		(256,009		)
Total Company shareholders' equity		876,603				816,066
Noncontrolling interest		3,730				3,799
Total equity		880,333				819,865
Total liabilities and shareholders' equity		$	1,540,243			$	1,549,936

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
OPERATING ACTIVITIES
Net income		$	30,942			$	29,590			$	89,992			$	69,633
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		15,925				16,285				48,485				47,289
Amortization		2,289				1,997				6,862				7,017
Change in deferred taxes and other liabilities		1,606				3,074				7,022				12,434
Impairment of property, plant and equipment		25				303				563				536
Non-cash interest expense		283				(309		)		593				(138		)
Compensation and benefits paid or payable in Class A Common Stock		606				80				2,232				596
Provision for credit losses from uncollected receivables and contract assets		(1,075		)		(105		)		(1,158		)		1,664
Foreign currency remeasurement loss/(gain) on intercompany loans		480				169				(551		)		15,750
Fair value adjustment on foreign currency options		29				(64		)		169				—
Changes in operating assets and liabilities that provided/(used) cash:
Accounts receivable		(10,927		)		(2,048		)		(14,292		)		6,069
Contract assets		(3,473		)		(7,923		)		22,170				(27,932		)
Inventories		546				4,585				(9,838		)		(20,043		)
Prepaid expenses and other current assets		3,949				(4,532		)		2,444				(6,989		)
Income taxes prepaid and receivable		2,717				(454		)		2,408				(662		)
Accounts payable		(296		)		(5,108		)		4,312				(15,491		)
Accrued liabilities		5,112				2,838				(12,311		)		(8,063		)
Income taxes payable		2,871				1,786				(1,085		)		3,741
Noncurrent receivables		1,245				(228		)		2,832				169
Other noncurrent liabilities		(1,319		)		111				(5,582		)		(413		)
Other, net		1,324				(388		)		3,232				(1,474		)
Net cash provided by operating activities		52,859				39,659				148,499				83,693
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(8,918		)		(9,349		)		(31,754		)		(31,320		)
Purchased software		(106		)		(109		)		(394		)		(155		)
Net cash used in investing activities		(9,024		)		(9,458		)		(32,148		)		(31,475		)
FINANCING ACTIVITIES
Proceeds from borrowings		—				—				8,000				70,000
Principal payments on debt		—				(17,005		)		(56,009		)		(76,016		)
Principal payments on finance lease liabilities		(363		)		(335		)		(1,067		)		(6,798		)
Taxes paid in lieu of share issuance		—				—				(998		)		(490		)
Proceeds from options exercised		4				5				153				25
Dividends paid		(6,476		)		(6,144		)		(19,418		)		(18,424		)
Net cash used in financing activities		(6,835		)		(23,479		)		(69,339		)		(31,703		)
Effect of exchange rate changes on cash and cash equivalents		(4,113		)		4,545				(2,111		)		(751		)
Increase in cash and cash equivalents		32,887				11,267				44,901				19,764
Cash and cash equivalents at beginning of period		253,330				204,037				241,316				195,540
Cash and cash equivalents at end of period		$	286,217			$	215,304			$	286,217			$	215,304

Financial tables and 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, Q3 2021				Increase due to changes in currency translation rates				Q3 2021 sales on same basis as Q3 2020 currency translation rates				Net sales as reported, Q3 2020				% Change compared to Q3 2020, excluding currency rate effects
Machine Clothing		$	154,171			$	1,688			$	152,483			$	138,747			9.9	%
Albany Engineered Composites		78,271				90				78,181				73,252				6.7	%
Consolidated total		$	232,442			$	1,778			$	230,664			$	211,999			8.8	%
(in thousands, except percentages)		Net sales as reported, YTD 2021				Increase due to changes in currency translation rates				YTD 2021 sales on same basis as 2020 currency translation rates				Net sales as reported, YTD 2020				% Change compared to 2020, excluding currency rate effects
Machine Clothing		$	462,298			$	11,829			$	450,469			$	428,782			5.1	%
Albany Engineered Composites		227,024				2,356				224,668				244,971				(8.3	)%
Consolidated total		$	689,322			$	14,185			$	675,137			$	673,753			0.2	%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)		Gross profit, Q3 2021				Gross profit margin, Q3 2021		Gross profit, Q3 2020				Gross profit margin, Q3 2020
Machine Clothing		$	79,437			51.5	%	$	71,471			51.5	%
Albany Engineered Composites		12,605				16.1	%	15,831				21.6	%
Consolidated total		$	92,042			39.6	%	$	87,302			41.2	%

(in thousands, except percentages)		Gross profit, YTD 2021				Gross profit margin, YTD 2021			Gross profit, YTD 2020				Gross profit margin, YTD 2020
Machine Clothing		$	240,427			52.0	%		$	227,734			53.1	%
Albany Engineered Composites		41,889				18.5	%		52,020				21.2	%
Consolidated total		$	282,316			41.0	%		$	279,754			41.5	%

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 September 30, 2021
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	55,467			$	2,917			$	(13,898	)		$	44,486
Interest, taxes, other income/(expense)		—				—				(13,544		)		(13,544		)
Net income/(loss) (GAAP)		55,467				2,917				(27,442		)		30,942
Interest expense, net		—				—				3,734				3,734
Income tax expense		—				—				12,889				12,889
Depreciation and amortization expense		5,014				12,265				935				18,214
EBITDA (non-GAAP)		60,481				15,182				(9,884		)		65,779
Restructuring expenses, net		251				(81		)		17				187
Foreign currency revaluation (gains)/losses		(1,571		)		31				472				(1,068		)
AMJP grant		—				963				(5,832		)		(4,869		)
Acquisition/integration costs		—				297				—				297
Pre-tax (income) attributable to noncontrolling interest		—				(95		)		—				(95		)
Adjusted EBITDA (non-GAAP)		$	59,161			$	16,297			$	(15,227	)		$	60,231
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.4		%		20.8		%		—				25.9		%
Three months ended September 30, 2020
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	45,699			$	6,828			$	(13,754	)		$	38,773
Interest, taxes, other income/(expense)		—				—				(9,183		)		(9,183		)
Net income/(loss) (GAAP)		45,699				6,828				(22,937		)		29,590
Interest expense, net		—				—				2,242				2,242
Income tax expense		—				—				9,686				9,686
Depreciation and amortization expense		5,074				12,236				972				18,282
EBITDA (non-GAAP)		50,773				19,064				(10,037		)		59,800
Restructuring expenses, net		384				358				(32		)		710
Foreign currency revaluation (gains)/losses		1,422				(226		)		(144		)		1,052
Acquisition/integration costs		—				291				—				291
Pre-tax (income) attributable to noncontrolling interest		—				(22		)		—				(22		)
Adjusted EBITDA (non-GAAP)		$	52,579			$	19,465			$	(10,213	)		$	61,831
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		37.9		%		26.6		%		—				29.2		%

Nine months ended September 30, 2021
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	161,731			$	13,019			$	(38,479	)		$	136,271
Interest, taxes, other income/(expense)		—				—				(46,279		)		(46,279		)
Net income/(loss) (GAAP)		161,731				13,019				(84,758		)		89,992
Interest expense, net		—				—				11,521				11,521
Income tax expense		—				—				36,375				36,375
Depreciation and amortization expense		15,272				37,326				2,749				55,347
EBITDA (non-GAAP)		177,003				50,345				(34,113		)		193,235
Restructuring expenses, net		193				(40		)		77				230
Foreign currency revaluation (gains)/losses		(156		)		363				813				1,020
AMJP grant		—				963				(5,832		)		(4,869		)
Acquisition/integration costs		—				911				—				911
Pre-tax (income) attributable to noncontrolling interest		—				(206		)		—				(206		)
Adjusted EBITDA (non-GAAP)		$	177,040			$	52,336			$	(39,055	)		$	190,321
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.3		%		23.1		%		—		%		27.6		%
Nine months ended September 30, 2020
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	149,418			$	22,749			$	(41,073	)		$	131,094
Interest, taxes, other income/(expense)		—				—				(61,461		)		(61,461		)
Net income/(loss) (GAAP)		149,418				22,749				(102,534		)		69,633
Interest expense, net		—				—				10,042				10,042
Income tax expense		—				—				37,504				37,504
Depreciation and amortization expense		15,142				36,192				2,972				54,306
EBITDA (non-GAAP)		164,560				58,941				(52,016		)		171,485
Restructuring expenses, net		1,414				2,606				169				4,189
Foreign currency revaluation (gains)/losses		(1,265		)		501				14,705				13,941
Former CEO termination costs		—				—				2,742				2,742
Acquisition/integration costs		—				867				—				867
Pre-tax loss attributable to noncontrolling interest		—				1,412				—				1,412
Adjusted EBITDA (non-GAAP)		$	164,709			$	64,327			$	(34,400	)		$	194,636
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.4		%		26.3		%		—				28.9		%

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

Three months ended September 30, 2021 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	187			$	55			$	132			$	0.00
Foreign currency revaluation (gains)/losses		(1,068		)		(314		)		(754		)		(0.02		)
AMJP grant		(4,869		)		(1,446		)		(3,423		)		(0.11		)
Acquisition/integration costs		297				89				208				0.01
Three months ended September 30, 2020 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	710			$	232			$	478			$	0.01
Foreign currency revaluation (gains)/losses		1,052				526				526				0.02
Acquisition/integration costs		291				87				204				0.01
Nine months ended September 30, 2021 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	230			$	67			$	163			$	0.00
Foreign currency revaluation (gains)/losses		1,020				332				688				0.02
AMJP grant		(4,869		)		(1,446		)		(3,423		)		(0.11		)
Acquisition/integration costs		911				273				638				0.03
Nine months ended September 30, 2020 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	4,189			$	1,377			$	2,812			$	0.08
Foreign currency revaluation (gains)/losses (a)		13,941				(483		)		14,424				0.46
Former CEO termination costs		2,742				713				2,029				0.06
Acquisition/integration costs		867				259				608				0.03
(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 September 30,								Nine months ended September 30,
Per share amounts (Basic)		2021				2020				2021				2020
Earnings per share (GAAP)		$	0.95			$	0.92			$	2.78			$	2.20
Adjustments, after tax:
Restructuring expenses, net		—				0.01				—				0.08
Foreign currency revaluation (gains)/losses		(0.02		)		0.02				0.02				0.46
AMJP grant		(0.11		)		—				(0.11		)		—
Former CEO termination costs		—				—				—				0.06
Acquisition/integration costs		0.01				0.01				0.03				0.03
Adjusted Earnings per share (non-GAAP)		$	0.83			$	0.96			$	2.72			$	2.83

The calculations of net debt are as follows:

(in thousands)		September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Current maturities of long-term debt		$	—							$	2			$	9
Long-term debt		350,000				350,000				384,000				398,000
Total debt		350,000				350,000				384,002				398,009
Cash and cash equivalents		286,217				253,330				237,871				241,316
Net debt (non GAAP)		$	63,783			$	96,670			$	146,131			$	156,693

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)		$	194			$	203			$	14			$	18
Income attributable to the noncontrolling interest		—				—				(1		)		(1		)
Interest expense, net		—				—				—				—
Income tax expense		—				—				—				—
Depreciation and amortization		20				21				49				50
EBITDA (non-GAAP)		214				224				62				67
Restructuring expenses, net (c)		—				—				—				—
Foreign currency revaluation (gains)/losses (c)		1				1				—				—
AMJP grant		—				—				1				1
Acquisition/integration costs (c)		—				—				1				1
Pre-tax (income)/loss attributable to non-controlling interest		—				—				1				1
Adjusted EBITDA (non-GAAP)		$	215			$	225			$	65			$	70
(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) (b)		$	105			$	110
Income attributable to the noncontrolling interest		(1		)		(1		)
Interest expense, net		14				15
Income tax expense		41				44
Depreciation and amortization		73				74
EBITDA (non-GAAP)		232				242
Restructuring expenses, net (c)		—				—
Foreign currency revaluation (gains)/losses (c)		1				1
AMJP grant		(5		)		(5		)
Acquisition/integration costs (c)		1				1
Pre-tax (income)/loss attributable to non-controlling interest		1				1
Adjusted EBITDA (non-GAAP)		$	230			$	240
		Total Company
Forecast of Full Year 2021 Earnings per share (basic) (d)		Low				High
Net income attributable to the Company (GAAP) (b)		$	3.23			$	3.38
Restructuring expenses, net (c)		—				—
Foreign currency revaluation (gains)/losses (c)		0.01				0.01
AMJP grant		(0.11		)		(0.11		)
Acquisition/integration costs (c)		0.02				0.02
Adjusted Earnings per share (non-GAAP)		$	3.15			$	3.30
(c) Due to the uncertainty of these items, we are unable to forecast these items for 2021. The amount shown represents the value incurred through the third quarter.
(d) Calculations based on estimated shares outstanding of 32.4 million.

About Albany International Corp.

Albany International is a leading developer and manufacturer of engineered components, using advanced materials processing and automation capabilities, with two core businesses. Machine Clothing is the world’s leading producer of custom-designed, consumable fabrics and process belts essential for the manufacture of all grades of paper products. Albany Engineered Composites is a growing designer and manufacturer of advanced materials-based engineered components for demanding aerospace applications, supporting both commercial and military platforms. Albany International is headquartered in Rochester, New Hampshire, operates 23 facilities in 11 countries, employs approximately 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 income recognized associated with government grants; 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/integration costs 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 termination costs, government grants, acquisition/integration costs, 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/20211025005655/en/

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

Source: Albany International Corp.