AIN - Albany International Reports Second-Quarter 2022 Results Raises 2022 Guidance

July, 25 2022 04:22 PM Albany International Corporation

Albany International Corp. (NYSE:AIN) today reported operating results for its second quarter of 2022, which ended June 30, 2022.

"We are pleased to report another quarter of excellent results,” said Albany International President and Chief Executive Officer, Bill Higgins. “Our revenue of $261 million was up on both a year-over-year and sequential basis driven by growth in our Engineered Composites segment from recovering commercial aircraft production and previously announced new business wins. Machine Clothing markets remained healthy, and the Machine Clothing segment delivered another strong performance in the quarter. Second quarter GAAP earnings per share was $1.25, which benefited from 20 cents of currency revaluation gains. Adjusted earnings per share was $1.06 up from $1.01 reported last year.

"As a result of the excellent performance to date, we are increasing our guidance for 2022. Of course, risks remain in 2022 in the form of ongoing inflation, supply chain and logistics challenges, and the indirect effects of the Russian invasion of Ukraine. Our updated outlook for the year incorporates these risks. Our team has done a great job managing these challenges and serving our customers which has enabled us to continue to win new business,” concluded Higgins.

For the second quarter ended June 30, 2022:

Net sales were $261.4 million, up 11.5%, or 14.6% after adjusting for currency translation, when compared to the prior year, primarily due to year-over-year growth in sales related to the CH-53K and LEAP programs within the Engineered Composites segment.
Gross profit of $100.6 million was 1.1% lower than the $101.7 million reported for the same period of 2021.
Selling, Technical, General, and Research (STG&R) expenses were $49.9 million, compared to $51.8 million in the same period of 2021. The decrease was driven by the favorable effect of the revaluation of foreign currency in the Machine Clothing segment.
Operating income was $50.7 million, compared to $50.0 million in the prior year, an increase of 1.5%.
The effective tax rate was 26.9%, compared to 30.0% for the second quarter of 2021. This year-over-year decrease was mainly due to favorable discrete tax adjustments recognized in the second quarter of 2022.
Net income attributable to the Company was $39.2 million ($1.25 per share), compared to $31.4 million ($0.97 per share) in the second quarter of 2021. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $1.06 per share in the second quarter of 2022, compared to $1.01 in the same period of last year.
Adjusted EBITDA (a non-GAAP measure) was $66.0 million, compared to $69.4 million in the second quarter of 2021, a decrease of 4.9%.

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

Outlook for Full-Year 2022

The Company has updated its guidance for the full year 2022 as follows:

Total company revenue of between $970 million and $1.01 billion;
Effective income tax rate, including tax adjustments, of 28% to 30%;
Total company depreciation and amortization of between $71 and $72 million;
Capital expenditures in the range of $75 to $85 million;
GAAP earnings per share of between $3.45 and $3.75;
Adjusted earnings per share of between $3.30 and $3.60;
Total company Adjusted EBITDA of $230 to $250 million;
Machine Clothing revenue of $590 to $610 million;
Machine Clothing Adjusted EBITDA of between $210 and $225 million;
Albany Engineered Composites revenue of between $380 and $400 million; and
Albany Engineered Composites Adjusted EBITDA of between $75 and $80 million.

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


Three Months Ended June 30,

Six Months Ended June 30,


2022



2021



2022


2021
Net sales
$
261,369


$
234,519


$
505,538


$
456,880
Cost of goods sold

160,776



132,791



313,341



266,606








Gross profit

100,593



101,728



192,197



190,274
Selling, general, and administrative expenses

39,745



42,009



82,452



79,203
Technical and research expenses

10,161



9,762



20,050



19,243
Restructuring expenses, net

(28
)


(9
)


226



43








Operating income

50,715



49,966



89,469



91,785
Interest expense, net

3,933



4,218



7,542



7,787
Other (income)/expense, net

(7,045
)


862



(10,973
)


1,462








Income before income taxes

53,827



44,886



92,900



82,536
Income tax expense

14,458



13,446



25,456



23,486








Net income

39,369



31,440



67,444



59,050
Net income attributable to the noncontrolling interest

168



43



506



70
Net income attributable to the Company
$
39,201


$
31,397


$
66,938


$
58,980








Earnings per share attributable to Company shareholders - Basic
$
1.25


$
0.97


$
2.12


$
1.82








Earnings per share attributable to Company shareholders - Diluted
$
1.25


$
0.97


$
2.11


$
1.82








Shares of the Company used in computing earnings per share:







Basic

31,268



32,375



31,571



32,363








Diluted

31,378



32,422



31,668



32,411








Dividends declared per share, Class A and Class B
$
0.21


$
0.20


$
0.42


$
0.40

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


June 30, 2022

December 31, 2021
ASSETS



Cash and cash equivalents
$
320,870


$
302,036

Accounts receivable, net

199,489



191,985

Contract assets, net

135,907



112,546

Inventories

133,667



117,882

Income taxes prepaid and receivable

1,979



1,958

Prepaid expenses and other current assets

43,187



32,394

Total current assets
$
835,099


$
758,801





Property, plant and equipment, net

419,142



436,417

Intangibles, net

35,722



39,081

Goodwill

176,775



182,124

Deferred income taxes

17,894



26,376

Noncurrent receivables, net

29,843



31,849

Other assets

98,580



81,416

Total assets
$
1,613,055


$
1,556,064





LIABILITIES AND SHAREHOLDERS' EQUITY



Accounts payable
$
70,430


$
68,954

Accrued liabilities

110,074



124,325

Current maturities of long-term debt

—



—

Income taxes payable

7,656



14,887

Total current liabilities

188,160



208,166





Long-term debt

485,000



350,000

Other noncurrent liabilities

107,049



107,794

Deferred taxes and other liabilities

11,064



12,499

Total liabilities

791,273



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; 40,784,934 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

439,450



436,996

Retained earnings

916,805



863,057

Accumulated items of other comprehensive income:



Translation adjustments

(147,271
)


(105,880
)
Pension and postretirement liability adjustments

(38,182
)


(38,490
)
Derivative valuation adjustment

11,753



(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

817,673



873,967

Noncontrolling interest

4,109



3,638

Total equity

821,782



877,605

Total liabilities and shareholders' equity
$
1,613,055


$
1,556,064

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


Three Months Ended June 30,

Six Months Ended June 30,


2022



2021



2022



2021

OPERATING ACTIVITIES







Net income
$
39,369


$
31,440


$
67,444


$
59,050

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







Depreciation

15,679



15,971



31,276



32,560

Amortization

1,433



2,280



3,598



4,573

Change in deferred taxes and other liabilities

804



974



2,596



5,416

Impairment of property, plant, equipment, and inventory

(206
)


353



2,662



538

Non-cash interest expense

279



265



561



310

Compensation and benefits paid or payable in Class A Common Stock

1,702



1,639



2,447



1,626

Provision for credit losses from uncollected receivables and contract assets

(532
)


27



1,326



(83
)
Foreign currency remeasurement (gain)/loss on intercompany loans

1,125



(723
)


(1,260
)


(1,031
)
Fair value adjustment on foreign currency options

596



1



(381
)


140









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







Accounts receivable

1,267



(129
)


(14,407
)


(3,365
)
Contract assets

(24,140
)


9,539



(23,868
)


25,643

Inventories

(13,586
)


(1,821
)


(21,135
)


(10,384
)
Prepaid expenses and other current assets

(2,498
)


(606
)


(4,474
)


(1,505
)
Income taxes prepaid and receivable

(1,889
)


1,156



(60
)


(309
)
Accounts payable

7,851



(4,580
)


7,476



4,608

Accrued liabilities

7,605



2,062



(11,745
)


(17,423
)
Income taxes payable

3,151



4,121



(7,739
)


(3,956
)
Noncurrent receivables

1,250



1,099



1,864



1,587

Other noncurrent liabilities

(1,338
)


(2,166
)


(3,252
)


(4,263
)
Other, net

5,182



1,051



4,784



1,908

Net cash provided by operating activities

43,104



61,953



37,713



95,640









INVESTING ACTIVITIES







Purchases of property, plant and equipment

(19,940
)


(10,302
)


(35,659
)


(22,836
)
Purchased software

(331
)


(286
)


(366
)


(288
)
Net cash used in investing activities

(20,271
)


(10,588
)


(36,025
)


(23,124
)








FINANCING ACTIVITIES







Proceeds from borrowings

58,000



—



135,000



8,000

Principal payments on debt

—



(34,002
)


—



(56,009
)
Principal payments on finance lease liabilities

(264
)


(355
)


(654
)


(704
)
Purchase of Treasury shares

(42,550
)


—



(84,780
)


—

Taxes paid in lieu of share issuance

—



—



(770
)


(998
)
Proceeds from options exercised

—



21



7



149

Dividends paid

(6,657
)


(6,474
)


(13,399
)


(12,942
)
Net cash provided by/(used in) financing activities

8,529



(40,810
)


35,404



(62,504
)








Effect of exchange rate changes on cash and cash equivalents

(17,907
)


4,904



(18,258
)


2,002









Increase in cash and cash equivalents

13,455



15,459



18,834



12,014

Cash and cash equivalents at beginning of period

307,415



237,871



302,036



241,316

Cash and cash equivalents at end of period
$
320,870


$
253,330


$
320,870


$
253,330

The following table presents the reconciliation of Net sales to net sales excluding the effect of changes in currency translation rates, a non-GAAP measure:

(in thousands, except percentages)
Net sales as reported, Q2 2022
Decrease due to changes in currency translation rates
Q2 2022 sales on same basis as Q2 2021 currency translation rates
Net sales as reported, Q2 2021
% Change compared to Q2 2021, excluding currency rate effects
Machine Clothing
$
151,670
$
(5,447
)
$
157,117
$
159,921
(1.8
) %
Albany Engineered Composites

109,699

(1,994
)

111,693

74,598
49.7
%
Consolidated total
$
261,369
$
(7,441
)
$
268,810
$
234,519
14.6
%






(in thousands, except percentages)
Net sales as reported, YTD 2022
Decrease 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
$
305,732
$
(7,975
)
$
313,707
$
308,127
1.8
%
Albany Engineered Composites

199,806

(3,152
)

202,958

148,753
36.4
%
Consolidated total
$
505,538
$
(11,127
)
$
516,665
$
456,880
13.1
%

The following table presents Gross profit and Gross profit margin:

(in thousands, except percentages)
Gross profit, Q2 2022
Gross profit margin, Q2 2022
Gross profit, Q2 2021
Gross profit margin, Q2 2021
Machine Clothing
$
78,857
52.0
%
$
84,597
52.9
%
Albany Engineered Composites

21,736
19.8
%

17,131
23.0
%
Consolidated total
$
100,593
38.5
%
$
101,728
43.4
%

(in thousands, except percentages)
Gross profit, YTD 2022
Gross profit margin, YTD 2022
Gross profit, YTD 2021
Gross profit margin, YTD 2021
Machine Clothing
$
158,202
51.7
%
$
160,990
52.2
%
Albany Engineered Composites

33,995
17.0
%

29,284
19.7
%
Consolidated total
$
192,197
38.0
%
$
190,274
41.6
%

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 June 30, 2022
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Operating income/(loss) (GAAP)
$
54,861

$
9,535

$
(13,681
)
$
50,715

Interest, taxes, other income/(expense)

—


—


(11,346
)

(11,346
)
Net income/(loss) (GAAP)

54,861


9,535


(25,027
)

39,369

Interest expense, net

—


—


3,933


3,933

Income tax expense

—


—


14,458


14,458

Depreciation and amortization expense

4,880


11,450


782


17,112

EBITDA (non-GAAP)

59,741


20,985


(5,854
)

74,872

Restructuring expenses, net

(30
)

—


2


(28
)
Foreign currency revaluation (gains)/losses

(1,816
)

210


(7,271
)

(8,877
)
Acquisition/integration costs

—


269


—


269

Pre-tax (income) attributable to noncontrolling interest

—


(205
)

—


(205
)
Adjusted EBITDA (non-GAAP)
$
57,895

$
21,259

$
(13,123
)
$
66,031

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

38.2
%

19.4
%

—


25.3
%










Three months ended June 30, 2021
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Operating income/(loss) (GAAP)
$
55,902

$
7,164

$
(13,100
)
$
49,966

Interest, taxes, other income/(expense)

—


—


(18,526
)

(18,526
)
Net income/(loss) (GAAP)

55,902


7,164


(31,626
)

31,440

Interest expense, net

—


—


4,218


4,218

Income tax expense

—


—


13,446


13,446

Depreciation and amortization expense

5,138


12,194


919


18,251

EBITDA (non-GAAP)

61,040


19,358


(13,043
)

67,355

Restructuring expenses, net

10


(48
)

29


(9
)
Foreign currency revaluation (gains)/losses

1,908


(244
)

174


1,838

Acquisition/integration costs

—


300


—


300

Pre-tax (income) attributable to noncontrolling interest

—


(65
)

—


(65
)
Adjusted EBITDA (non-GAAP)
$
62,958

$
19,301

$
(12,840
)
$
69,419

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

39.4
%

25.9
%

—


29.6
%

Six months ended June 30, 2022
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Operating income/(loss) (GAAP)
$
104,505

$
10,730

$
(25,766
)
$
89,469

Interest, taxes, other income/(expense)

—


—


(22,025
)

(22,025
)
Net income/(loss) (GAAP)

104,505


10,730


(47,791
)

67,444

Interest expense, net

—


—


7,542


7,542

Income tax expense

—


—


25,456


25,456

Depreciation and amortization expense

9,803


23,489


1,582


34,874

EBITDA (non-GAAP)

114,308


34,219


(13,211
)

135,316

Restructuring expenses, net

213


—


13


226

Foreign currency revaluation (gains)/losses

(759
)

633


(11,011
)

(11,137
)
Dissolution of business relationships in Russia

1,787


—


781


2,568

Acquisition/integration costs

—


551


—


551

Pre-tax (income) attributable to noncontrolling interest

—


(457
)

—


(457
)
Adjusted EBITDA (non-GAAP)
$
115,549

$
34,946

$
(23,428
)
$
127,067

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

37.8
%

17.5
%

—


25.1
%










Six months ended June 30, 2021
(in thousands)
Machine Clothing
Albany Engineered Composites
Corporate expenses and other
Total Company
Operating income/(loss) (GAAP)
$
106,264

$
10,102

$
(24,581
)
$
91,785

Interest, taxes, other income/(expense)

—


—


(32,735
)

(32,735
)
Net income/(loss) (GAAP)

106,264


10,102


(57,316
)

59,050

Interest expense, net

—


—


7,787


7,787

Income tax expense

—


—


23,486


23,486

Depreciation and amortization expense

10,258


25,061


1,814


37,133

EBITDA (non-GAAP)

116,522


35,163


(24,229
)

127,456

Restructuring expenses, net

(58
)

41


60


43

Foreign currency revaluation (gains)/losses

1,415


332


341


2,088

Acquisition/integration costs

—


614


—


614

Pre-tax (income) attributable to noncontrolling interest

—


(111
)

—


(111
)
Adjusted EBITDA (non-GAAP)
$
117,879

$
36,039

$
(23,828
)
$
130,090

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

38.3
%

24.2
%

—


28.5
%

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

Three months ended June 30, 2022 (in thousands, except per share amounts
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
(28
)
$
(4
)
$
(24
)
$
0.00

Foreign currency revaluation (gains)/losses

(8,877
)

(2,492
)

(6,385
)

(0.20
)
Acquisition/integration costs

269


80


189


0.01






Three months ended June 30, 2021 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
(9
)
$
(3
)
$
(6
)
$
0.00

Foreign currency revaluation (gains)/losses

1,838


781


1,057


0.03

Acquisition/integration costs

300


90


210


0.01






Six months ended June 30, 2022 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
226

$
69

$
157

$
0.01

Foreign currency revaluation (gains)/losses

(11,137
)

(3,135
)

(8,002
)

(0.25
)
Dissolution of business relationships in Russia

2,568


332


2,236


0.07

Acquisition/integration costs

551


164


387


0.02






Six months ended June 30, 2021 (in thousands, except per share amounts)
Pre tax Amounts
Tax Effect
After tax Effect
Per share Effect
Restructuring expenses, net
$
43

$
12

$
31

$
0.00

Foreign currency revaluation (gains)/losses

2,088


646


1,442


0.04

Acquisition/integration costs

614


184


430


0.02

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


Three months ended June 30,
Six months ended June 30,
Per share amounts (Basic)

2022


2021

2022

2021
Earnings per share (GAAP)
$
1.25

$
0.97
$
2.12

$
1.82
Adjustments, after tax:




Restructuring expenses, net

—


—

0.01


—
Foreign currency revaluation (gains)/losses

(0.20
)

0.03

(0.25
)

0.04
Dissolution of business relationships in Russia

—


—

0.07


—
Acquisition/integration costs

0.01


0.01

0.02


0.02
Adjusted Earnings per share (non-GAAP)
$
1.06

$
1.01
$
1.97

$
1.88

The calculations of net debt are as follows:

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

485,000

427,000

350,000
Total debt

485,000

427,000

350,000
Cash and cash equivalents

320,870

307,415

302,036
Net debt (non-GAAP)
$
164,130
$
119,585
$
47,964

The calculation of net leverage ratio as of June 30, 2022 is as follows:

Total Company

Twelve months ended
Six months ended
Trailing twelve months ended
(in thousands)
December 31, 2021
June 30, 2021
June 30, 2022
June 30, 2022 (non-GAAP) (a)
Operating income/(loss) (GAAP)
$
178,011

$
91,785

$
89,469

$
175,695

Interest, taxes, other income/(expense)

(59,243
)

(32,735
)

(22,025
)

(48,533
)
Net income/(loss) (GAAP)

118,768


59,050


67,444


127,162

Interest expense, net

14,891


7,787


7,542


14,646

Income tax expense

47,163


23,486


25,456


49,133

Depreciation and amortization expense

74,255


37,133


34,874


71,996

EBITDA (non-GAAP)

255,077


127,456


135,316


262,937

Restructuring expenses, net

1,331


43


226


1,514

Foreign currency revaluation (gains)/losses

(1,442
)

2,088


(11,137
)

(14,667
)
Aviation Manufacturing Job Protection (AMJP) grant

(4,731
)

—


—


(4,731
)
Dissolution of business relationships in Russia

—


—


2,568


2,568

Acquisition/integration costs

1,166


614


551


1,103

Pre-tax (income) attributable to noncontrolling interest

(510
)

(111
)

(457
)

(856
)
Adjusted EBITDA (non-GAAP)
$
250,891

$
130,090

$
127,067

$
247,868

(in thousands, except for net leverage ratio)

June 30, 2022

Net debt (non-GAAP)

164,130

Trailing twelve months Adjusted EBITDA (non-GAAP)

247,868

Net leverage ratio (non-GAAP)

0.66

(a) Calculated as amounts incurred during the twelve months ended December 31, 2021, less those incurred during the six months ended June 30, 2021, plus those incurred during the six months ended June 30, 2022.

The tables below provide a reconciliation of forecasted full-year 2022 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Forecast of Full Year 2022 Adjusted EBITDA
Machine Clothing

AEC
(in millions)
Low
High

Low
High
Net income attributable to the Company (GAAP) (b)
$
190

$
204


$
25
$
29
Income attributable to the noncontrolling interest

—


—



—

—
Interest expense, net

—


—



—

—
Income tax expense

—


—



—

—
Depreciation and amortization

19


20



48

49
EBITDA (non-GAAP)

209


224



73

78
Restructuring expenses, net (c)

—


—



—

—
Foreign currency revaluation (gains)/losses (c)

(1
)

(1
)


1

1
Acquisition/integration costs (c)

—


—



1

1
Dissolution of business relationships in Russia

2


2



—

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

—


—



—

—
Adjusted EBITDA (non-GAAP)
$
210

$
225


$
75
$
80
(b) Interest, Other income/expense and Income taxes are not allocated to the business segments











Forecast of Full Year 2022 Adjusted EBITDA
Total Company



(in millions)
Low
High



Net income attributable to the Company (GAAP)
$
109

$
118




Income attributable to the noncontrolling interest

—


—




Interest expense, net

14


15




Income tax expense

43


52




Depreciation and amortization

71


72




EBITDA (non-GAAP)

237


257




Restructuring expenses, net (c)

—


—




Foreign currency revaluation (gains)/losses (c)

(11
)

(11
)



Acquisition/integration costs (c)

1


1




Dissolution of business relationships in Russia

3


3




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

—


—




Adjusted EBITDA (non-GAAP)
$
230

$
250











Total Company



Forecast of Full Year 2022 Earnings per share (basic) (d)
Low
High



Net income attributable to the Company (GAAP)
$
3.45

$
3.75




Restructuring expenses, net (c)

0.01


0.01




Foreign currency revaluation (gains)/losses (c)

(0.25
)

(0.25
)



Dissolution of business relationships in Russia

0.07


0.07




Acquisition/integration costs (c)

0.02


0.02




Adjusted Earnings per share (non-GAAP)
$
3.30

$
3.60










(c) Due to the uncertainty of these items, we are unable to forecast these items for 2022
(d) Calculations based on weighted average shares outstanding estimate of approximately 31.4 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; Net leverage ratio; 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/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, 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.

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. The Company calculates net leverage ratio by subtracting cash and cash equivalents from total debt, and then dividing by trailing twelve months Adjusted EBITDA.

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/20220725005708/en/

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

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

Twitter