AIN - Albany International Reports Fourth-Quarter 2022 Results

February, 13 2023 04:25 PM Albany International Corporation

Albany International Corp. (NYSE:AIN) today reported operating results for its fourth quarter of 2022, which ended December 31, 2022.

"We are pleased to report another strong quarter to close 2022," said Bill Higgins, President and Chief Executive Officer. "Our teams successfully addressed multiple challenges throughout the past year. We overcame supply chain challenges and managed inflationary pressures while serving customers, winning new business, and developing new products. Full year Revenue, Gross profit, Operating income, and Adjusted EBITDA all moved higher compared to 2021's results.

"Our Engineered Composites segment grew its top line 37%, the result of recovering LEAP production and new business wins, headlined by expanded content on the CH-53K helicopter program.

"Our Machine Clothing segment's execution and financial results continued to be impressive. The segment delivered excellent profitability in 2022 with Adjusted EBITDA margins exceeding 37% despite the inflationary environment."

For the fourth-quarter ended December 31, 2022:

Net sales were $268.8 million, up 12.0%, or 15.5% after adjusting for currency translation, when compared to the prior year, driven by growth in the Engineered Composites segment.
Gross profit of $97.1 million was 1.1% higher than the $96.1 million reported for the same period of 2021, mainly due to higher net sales in the lower margin Engineered Composites segment.
Selling, Technical, General, and Research (STG&R) expenses were $59.3 million, compared to $53.2 million in the same period of 2021. The increase was driven by higher foreign currency revaluation expense, incentive compensation costs, and investments in sales and marketing activities.
Operating income was $37.9 million, compared to $41.7 million in the prior year, a decrease of 9.2%.
The effective tax rate for the quarter was 42.1% compared to a 27.3% effective tax rate in the fourth quarter of 2021, due to a shift in taxable income to higher tax rate jurisdictions and unfavorable effects of discrete items.
Net income attributable to the Company was $18.1 million ($0.58 per share), compared to $28.6 million ($0.89 per share) in the fourth quarter of 2021. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.75 per share, compared to $0.86 per share for the same period of last year.
Adjusted EBITDA (a non-GAAP measure) was $58.4 million, compared to $60.6 million in the fourth quarter of 2021, a decrease of 3.6%.

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

"We are in a solid position as we enter 2023 with a strong balance sheet and healthy order books," said Stephen Nolan, Chief Financial Officer. "We expect to sustain strong results consistent with our long-term goals for both of our businesses in the coming year."

Outlook for Full-Year 2023

Albany International announces its initial financial guidance for the full-year 2023:

Total company revenue between $1.01 and $1.05 billion;
Effective income tax rate, including tax adjustments, between 28% and 30%;
Total company depreciation and amortization between $70 and $75 million;
Capital expenditures in the range of $90 to $100 million;
GAAP and Adjusted earnings per share between $3.10 and $3.60;
Total company Adjusted EBITDA between $225 to $255 million;
Machine Clothing revenue between $590 to $610 million;
Machine Clothing Adjusted EBITDA between $205 and $225 million;
Albany Engineered Composites (AEC) revenue between $420 to $440 million; and
Albany Engineered Composites Adjusted EBITDA between $80 to $90 million.





ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)





Three Months Ended December 31,

Twelve Months Ended December 31,


2022



2021



2022



2021

Net sales
$
268,786


$
239,918


$
1,034,887


$
929,240

Cost of goods sold

171,694



143,843



645,105



550,849









Gross profit

97,092



96,075



389,782



378,391

Selling, general, and administrative expenses

49,388



43,228



168,713



160,127

Technical and research expenses

9,957



10,006



39,941



38,922

Restructuring expenses, net

(162
)


1,101



106



1,331









Operating income

37,909



41,740



181,022



178,011

Interest expense, net

2,664



3,370



14,000



14,891

Pension settlement expense

—



—



49,128



—

Aviation Manufacturing Jobs Protection (AMJP) grant

—



—



—



(5,832
)
Other expense/(income), net

3,805



(1,194
)


(14,086
)


3,021









Income before income taxes

31,440



39,564



131,980



165,931

Income tax expense

13,199



10,788



35,472



47,163









Net income

18,241



28,776



96,508



118,768

Net income/(loss) attributable to the noncontrolling interest

111



140



746



290

Net income attributable to the Company
$
18,130


$
28,636


$
95,762


$
118,478









Earnings per share attributable to Company shareholders - Basic
$
0.58


$
0.89


$
3.06


$
3.66









Earnings per share attributable to Company shareholders - Diluted
$
0.58


$
0.88


$
3.04


$
3.65









Shares of the Company used in computing earnings per share:







Basic

31,111



32,285



31,339



32,348









Diluted

31,267



32,398



31,455



32,463









Dividends declared per share, Class A and Class B
$
0.25


$
0.21


$
0.88


$
0.81





ALBANY INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited)





December 31, 2022

December 31, 2021
ASSETS



Cash and cash equivalents
$
291,776


$
302,036

Accounts receivable, net

200,018



191,985

Contract assets, net

148,695



112,546

Inventories

139,050



117,882

Income taxes prepaid and receivable

7,938



1,958

Prepaid expenses and other current assets

50,962



32,394

Total current assets
$
838,439


$
758,801





Property, plant and equipment, net

445,658



436,417

Intangibles, net

33,811



39,081

Goodwill

178,217



182,124

Deferred income taxes

15,196



26,376

Noncurrent receivables, net

27,913



31,849

Other assets

103,021



81,416

Total assets
$
1,642,255


$
1,556,064





LIABILITIES AND SHAREHOLDERS' EQUITY



Accounts payable
$
69,707


$
68,954

Accrued liabilities

126,385



124,325

Current maturities of long-term debt

—



—

Income taxes payable

15,224



14,887

Total current liabilities

211,316



208,166





Long-term debt

439,000



350,000

Other noncurrent liabilities

108,758



107,794

Deferred taxes and other liabilities

15,638



12,499

Total liabilities

774,712



678,459





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; 40,785,434 issued in 2022 and 40,760,577 in 2021

41



41

Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; none issued and outstanding in 2022 and 104 in 2021

—



—

Additional paid in capital

441,540



436,996

Retained earnings

931,318



863,057

Accumulated items of other comprehensive income:



Translation adjustments

(146,851
)


(105,880
)
Pension and postretirement liability adjustments

(15,783
)


(38,490
)
Derivative valuation adjustment

17,707



(1,614
)
Treasury stock (Class A), at cost; 9,674,542 shares in 2022 and 8,665,090 in 2021

(364,923
)


(280,143
)
Total Company shareholders' equity

863,049



873,967

Noncontrolling interest

4,494



3,638

Total equity

867,543



877,605

Total liabilities and shareholders' equity
$
1,642,255


$
1,556,064





ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)





Three Months Ended December 31,

Twelve Months Ended December 31,


2022



2021



2022



2021

OPERATING ACTIVITIES







Net income
$
18,241


$
28,776


$
96,508


$
118,768

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







Depreciation

15,616



16,645



62,480



65,130

Amortization

1,525



2,263



6,569



9,125

Change in deferred taxes and other liabilities

7,086



5,159



(8,496
)


12,181

Impairment of property, plant, equipment, and inventory

(802
)


293



1,808



856

Non-cash interest expense

278



282



1,118



875

Non-cash portion of pension settlement expense

—



—



42,657



—

Compensation and benefits paid or payable in Class A Common Stock

1,245



914



4,527



3,146

Provision/(recovery) for credit losses from uncollected receivables and contract assets

523



(141
)


1,408



(1,299
)
Foreign currency remeasurement (gain)/loss on intercompany loans

2,195



(2,599
)


(4,434
)


(3,150
)
Fair value adjustment on foreign currency options

(100
)


—



(509
)


169









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







Accounts receivable

5,959



6,558



(14,301
)


(7,734
)
Contract assets

767



3,276



(36,434
)


25,446

Inventories

354



(104
)


(24,541
)


(9,942
)
Prepaid expenses and other current assets

(1,401
)


(3,442
)


(4,134
)


(998
)
Income taxes prepaid and receivable

(3,826
)


1,536



(6,005
)


3,944

Accounts payable

3,491



5,180



8,572



9,492

Accrued liabilities

15,850



11,537



3,226



(774
)
Income taxes payable

(2,456
)


608



183



(477
)
Noncurrent receivables

935



1,523



3,911



4,355

Other noncurrent liabilities

(4,173
)


(8,131
)


(10,133
)


(13,713
)
Other, net

(400
)


(1,157
)


4,234



2,075

Net cash provided by operating activities

60,907



68,976



128,214



217,475









INVESTING ACTIVITIES







Purchases of property, plant and equipment

(42,727
)


(21,039
)


(93,675
)


(52,793
)
Purchased software

(789
)


(512
)


(2,673
)


(906
)
Net cash used in investing activities

(43,516
)


(21,551
)


(96,348
)


(53,699
)








FINANCING ACTIVITIES







Proceeds from borrowings

17,000



—



162,000



8,000

Principal payments on debt

(25,000
)


—



(73,000
)


(56,009
)
Principal payments on finance lease liabilities

—



(371
)


(654
)


(1,438
)
Debt acquisition costs

—



—



—



—

Purchase of Treasury shares

—



(23,449
)


(84,780
)


(23,449
)
Taxes paid in lieu of share issuance

—



—



(770
)


(998
)
Proceeds from options exercised

—



—



17



153

Dividends paid

(6,533
)


(6,476
)


(26,465
)


(25,894
)
Net cash used in financing activities

(14,533
)


(30,296
)


(23,652
)


(99,635
)








Effect of exchange rate changes on cash and cash equivalents

12,436



(1,310
)


(18,474
)


(3,421
)








Increase/(decrease) in cash and cash equivalents

15,294



15,819



(10,260
)


60,720

Cash and cash equivalents at beginning of period

276,482



286,217



302,036



241,316

Cash and cash equivalents at end of period
$
291,776


$
302,036


$
291,776


$
302,036

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, Q4 2022

(Decrease) due to changes in currency translation rates

Q4 2022 sales on same basis as Q4 2021 currency translation rates

Net sales as reported, Q4 2021

% Change compared to Q4 2021, excluding currency rate effects
Machine Clothing
$
150,340

$
(6,303
)

$
156,643

$
156,717

—
%
Albany Engineered Composites

118,446


(1,979
)


120,425


83,201

44.7
%
Consolidated total
$
268,786

$
(8,282
)

$
277,068

$
239,918

15.5
%










(in thousands, except percentages)
Net sales as reported, YTD 2022

Increase due to changes in currency translation rates

YTD 2022 sales on same basis as 2021 currency translation rates

Net sales as reported, YTD 2021

% Change compared to 2021, excluding currency rate effects
Machine Clothing
$
609,461

$
(20,848
)

$
630,309

$
619,015

1.8
%
Albany Engineered Composites

425,426


(7,610
)


433,036


310,225

39.6
%
Consolidated total
$
1,034,887

$
(28,458
)

$
1,063,345

$
929,240

14.4
%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)
Gross profit, Q4 2022

Gross profit margin, Q4 2022

Gross profit, Q4 2021

Gross profit margin, Q4 2021
Machine Clothing
$
74,851

49.8
%

$
82,030

52.3
%
Albany Engineered Composites

22,241

18.8
%


14,045

16.9
%
Consolidated total
$
97,092

36.1
%

$
96,075

40.0
%

(in thousands, except percentages)
Gross profit, YTD 2022

Gross profit margin, YTD 2022

Gross profit, YTD 2021

Gross profit margin, YTD 2021
Machine Clothing
$
312,285

51.2
%

$
322,457

52.1
%
Albany Engineered Composites

77,497

18.2
%


55,934

18.0
%
Consolidated total
$
389,782

37.7
%

$
378,391

40.7
%

A reconciliation from Net 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, 2022
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Net income/(loss) (GAAP)
$
44,462

$
10,891

$
(37,112
)
$
18,241

Interest expense, net

—


—


2,664


2,664

Income tax expense

—


—


13,199


13,199

Depreciation and amortization expense

4,767


11,410


964


17,141

EBITDA (non-GAAP)

49,229


22,301


(20,285
)

51,245

Restructuring expenses, net

(163
)

—


1


(162
)
Foreign currency revaluation (gains)/losses (a)

3,170


(83
)

7,663


10,750

Acquisition/integration costs

—


251


—


251

Dissolution of business relationships in Russia

(79
)

—


—


(79
)
IP address sales

—


—


(3,420
)

(3,420
)
Pre-tax (income) attributable to noncontrolling interest

—


(184
)

—


(184
)
Adjusted EBITDA (non-GAAP)
$
52,157

$
22,285

$
(16,041
)
$
58,401

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

34.7
%

18.8
%

—


21.7
%










Three months ended December 31, 2021
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Net income/(loss) (GAAP)
$
53,923

$
3,141

$
(28,288
)
$
28,776

Interest expense, net

—


—


3,370


3,370

Income tax expense

—


—


10,788


10,788

Depreciation and amortization expense

4,919


13,076


913


18,908

EBITDA (non-GAAP)

58,842


16,217


(13,217
)

61,842

Restructuring expenses, net

1,009


72


20


1,101

Foreign currency revaluation (gains)/losses (a)

(151
)

(313
)

(1,998
)

(2,462
)
Acquisition/integration costs

—


255


—


255

AMJP grant

—


138


—


138

Pre-tax (income) attributable to noncontrolling interest

—


(304
)

—


(304
)
Adjusted EBITDA (non-GAAP)
$
59,700

$
16,065

$
(15,195
)
$
60,570

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

38.1
%

19.3
%

—


25.2
%

Twelve months ended December 31, 2022
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Net income/(loss) (GAAP)
$
206,214

$
31,579

$
(141,285
)
$
96,508

Interest expense, net

—


—


14,000


14,000

Income tax expense

—


—


35,472


35,472

Depreciation and amortization expense

19,483


46,202


3,364


69,049

EBITDA (non-GAAP)

225,697


77,781


(88,449
)

215,029

Restructuring expenses, net

92


—


14


106

Foreign currency revaluation (gains)/losses (a)

(520
)

672


(9,981
)

(9,829
)
Dissolution of business relationships in Russia

1,494


—


781


2,275

Pension settlement expense

—


—


49,128


49,128

IP address sales

—


—


(3,420
)

(3,420
)
Acquisition/integration costs

—


1,057


—


1,057

Pre-tax (income) attributable to noncontrolling interest

—


(817
)

—


(817
)
Adjusted EBITDA (non-GAAP)
$
226,763

$
78,693

$
(51,927
)
$
253,529

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

37.2
%

18.5
%

—
%

24.5
%





Twelve months ended December 31, 2021
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Net income/(loss) (GAAP)
$
215,654

$
16,160

$
(113,046
)
$
118,768

Interest expense, net

—


—


14,891


14,891

Income tax expense

—


—


47,163


47,163

Depreciation and amortization expense

20,191


50,402


3,662


74,255

EBITDA (non-GAAP)

235,845


66,562


(47,330
)

255,077

Restructuring expenses, net

1,202


32


97


1,331

Foreign currency revaluation (gains)/losses (a)

(307
)

50


(1,185
)

(1,442
)
AMJP grant

—


1,101


(5,832
)

(4,731
)
Acquisition/integration costs

—


1,166


—


1,166

Pre-tax (income) attributable to noncontrolling interest

—


(510
)

—


(510
)
Adjusted EBITDA (non-GAAP)
$
236,740

$
68,401

$
(54,250
)
$
250,891

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

38.2
%

22.0
%

—


27.0
%

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

Three months ended December 31, 2022 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
(162
)
$
(41
)
$
(121
)
$
0.00

Foreign currency revaluation (gains)/losses (a)

10,750


3,247


7,503


0.24

Dissolution of business relationships in Russia

(79
)

(9
)

(70
)

0.00

IP address sales

(3,420
)

(872
)

(2,548
)

(0.08
)
Acquisition/integration costs

251


75


176


0.01






Three months ended December 31, 2021 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
1,101

$
332

$
769

$
0.02

Foreign currency revaluation (gains)/losses (a)

(2,462
)

(655
)

(1,807
)

(0.06
)
Acquisition/integration costs

255


76


179


0.01

AMJP grant

138


42


96


0.00






Year ended December 31, 2022 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
106

$
34

$
72

$
0.01

Foreign currency revaluation (gains)/losses (a)

(9,829
)

(2,582
)

(7,247
)

(0.23
)
Dissolution of business relationships in Russia

2,275


305


1,970


0.06

Pension settlement expense

49,128


11,947


37,181


1.20

Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)

—


5,217


(5,217
)

(0.17
)
IP address sales

(3,420
)

(872
)

(2,548
)

(0.08
)
Acquisition/integration costs

1,057


316


741


0.04






Year ended December 31, 2021 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
1,331

$
399

$
932

$
0.02

Foreign currency revaluation (gains)/losses (a)

(1,442
)

(323
)

(1,119
)

(0.04
)
AMJP grant

(4,731
)

(1,404
)

(3,327
)

(0.11
)
Acquisition/integration costs

1,166


349


817


0.04

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


Three months ended December 31,
Twelve months ended December 31,
Per share amounts (Basic)

2022


2021


2022


2021

Earnings per share (GAAP)
$
0.58

$
0.89

$
3.06

$
3.66

Adjustments, after tax:




Restructuring expenses, net

—


0.02


0.01


0.02

Foreign currency revaluation (gains)/losses (a)

0.24


(0.06
)

(0.23
)

(0.04
)
Dissolution of business relationships in Russia

—


—


0.06


—

Pension settlement charge

—


—


1.20


—

Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)

—


—


(0.17
)

—

IP address sales

(0.08
)

—


(0.08
)

—

AMJP grant

—


—


—


(0.11
)
Acquisition/integration costs

0.01


0.01


0.04


0.04

Adjusted Earnings per share (non-GAAP)
$
0.75

$
0.86

$
3.89

$
3.57


(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date.
(b) Our Adjusted EPS excluded the benefit from the reclassification of stranded income tax effects caused by the TCJA associated with the US pension plan liability that was eliminated in September 2022, and would not be indicative of ongoing or expected future income tax rate at the Company. Management believes excluding pension settlement expense and its income tax impact, including the stranded income tax effects, from its Adjusted EBITDA and Adjusted EPS for the year ended December 31, 2022 would provide investors a transparent view and enhanced ability to better assess the Company's ongoing operational and financial performance.

The calculations of net debt are as follows:

(in thousands)
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Current maturities of long-term debt
$
—
$
—
$
—
$
—
$
—
Long-term debt

439,000

447,000

485,000

427,000

350,000
Total debt

439,000

447,000

485,000

427,000

350,000
Cash and cash equivalents

291,776

276,482

320,870

307,415

302,036
Net debt (non GAAP)
$
147,224
$
170,518
$
164,130
$
119,585
$
47,964

The calculation of net leverage ratio as of December 31, 2022 is as follows:

Total Company

Twelve months ended
(in thousands)
December 31, 2022
Net income/(loss) (GAAP)
$
96,508

Interest expense, net

14,000

Income tax expense

35,472

Depreciation and amortization expense

69,049

EBITDA (non-GAAP)

215,029

Restructuring expenses, net

106

Foreign currency revaluation (gains)/losses (a)

(9,829
)
Dissolution of business relationships in Russia

2,275

Pension settlement expense

49,128

IP address sales

(3,420
)
Acquisition/integration costs

1,057

Pre-tax (income) attributable to noncontrolling interest

(817
)
Adjusted EBITDA (non-GAAP)
$
253,529

(in thousands, except for net leverage ratio)

December 31, 2022

Net debt (non-GAAP)

147,224

Adjusted EBITDA (non-GAAP)

253,529

Net leverage ratio (non-GAAP)

0.58

The tables below provide a reconciliation of initial outlook for the full-year 2023 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Initial Outlook Full Year 2023 Adjusted EBITDA
Machine Clothing

AEC
(in millions)
Low
High

Low
High
Net income attributable to the Company (GAAP) (c)
$
185

$
205


$
32

$
41

Income attributable to the noncontrolling interest

—


—



(1
)

(1
)
Interest expense, net

—


—



—


—

Income tax expense

—


—



—


—

Depreciation and amortization

20


20



48


49

EBITDA (non-GAAP)

205


225



79


89

Restructuring expenses, net (c)

—


—



—


—

Foreign currency revaluation (gains)/losses (c)

—


—



—


—

Acquisition/integration costs (c)

—


—



—


—

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

—


—



1


1

Adjusted EBITDA (non-GAAP)
$
205

$
225


$
80

$
90

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











Initial Outlook Full Year 2023 Adjusted EBITDA
Total Company



(in millions)
Low
High



Net income attributable to the Company (GAAP) (c)
$
98

$
113




Income attributable to the noncontrolling interest

(1
)

(1
)



Interest expense, net

17


18




Income tax expense

40


49




Depreciation and amortization

70


75




EBITDA (non-GAAP)

224


254




Restructuring expenses, net (d)

—


—




Foreign currency revaluation (gains)/losses (d)

—


—




Acquisition/integration costs (d)

—


—




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

1


1




Adjusted EBITDA (non-GAAP)
$
225

$
255











Total Company



Forecast of Full Year 2023 Earnings per share (basic) (e)
Low
High



Net income attributable to the Company (GAAP) (c)
$
3.10

$
3.60




Restructuring expenses, net (d)

—


—




Foreign currency revaluation (gains)/losses (d)

—


—




Acquisition/integration costs (d)

—


—




Adjusted Earnings per share (non-GAAP)
$
3.10

$
3.60










(d) Due to the uncertainty of these items, we are unable to forecast these items for 2023.

(e) Calculations based on estimated shares outstanding of approximately 31.2 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 4,200 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, that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net sales and percent change in net sales, excluding the impact of currency translation effects ; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted earnings per share (or Adjusted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net sales and change in Net sales, after currency effects are excluded, provides 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 (calculated as net income excluding interest, income taxes, depreciation and amortization), Adjusted EBITDA, and Adjusted EPS are performance measures that relate to the Company’s continuing operations. The Company defines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance. Such excluded costs or benefits do not consist of normal, recurring cash items necessary to generate revenues or operate our business. Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of net sales.

The Company defines Adjusted EPS as basic earnings per share (GAAP), adjusted by the after tax per share amount of costs or benefits not reflective of the Company’s ongoing or expected future operational performance. The income tax effects are calculated using the applicable statutory income tax rate of the jurisdictions where such costs or benefits were incurred or the effective tax rate applicable to total company results.

The Company’s Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted EPS may not be comparable to similarly titled measures of other companies.

Net debt aids investors in understanding the Company’s debt position if all available cash were applied to pay down indebtedness.

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

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 conditions, including inflationary cost pressures, as well as global events, which include but are not limited to, the ongoing COVID-19 pandemic and the Russia-Ukraine military conflicts; paper-industry trends and conditions during 2022 and in future years; expectations in 2022 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/20230213005391/en/

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

Company Name:	Albany International Corporation
Stock Symbol:	AIN
Market:	NYSE
Website:	albint.com

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