Business Wire | Feb 10, 2021 04:32PM EST

Albany International Reports Fourth-Quarter 2020 Results

Feb. 10, 2021

ROCHESTER, N.H.--(BUSINESS WIRE)--Feb. 10, 2021--Albany International Corp. (NYSE:AIN) today reported operating results for its fourth quarter of 2020, which ended December 31, 2020.

"Albany International finished 2020 with another strong quarter, particularly in light of the challenging business conditions in some of our end markets," said Albany International President and Chief Executive Officer, Bill Higgins. "Our operations performed exceptionally well for customers and shareholders. Both segments delivered impressive profit margins despite top-line headwinds caused by the pandemic and the Boeing 737 MAX grounding.

"The Machine Clothing segment managed its business remarkably well during 2020. For the full year, the Machine Clothing segment reached the same level of Adjusted EBITDA as 2019 despite a 5% reduction in segment revenues. We expect another strong year in 2021. We are encouraged by growth in our order book and strengthening end-markets that we serve in this segment.

"In 2020, the Engineered Composites segment expanded its Adjusted EBITDA margin by 360 basis points despite a revenue decline of 28%. Once we get through the inventory destocking challenges we expect to face in 2021, the segment is well-positioned to grow based on the strength of our program portfolio," concluded Higgins.

For the fourth quarter ended December 31, 2020:

* Net sales were $226.9 million, down $30.8 million, or 12%, when compared to the prior year. Sales declined $24.4 million, or 23%, in the Engineered Composites segment driven primarily by lower demand for LEAP components. * Gross profit of $91.3 million was 6% lower than the $96.6 million reported for the same period of 2019. * Selling, Technical, General, and Research (STG&R) expenses were $54.8 million, compared to $51.3 million in the same period of 2019. Revaluation of foreign currency balances increased STG&R by $3.0 million in 2020, compared to an increase of $1.4 million in the same period of 2019. * Operating income was $35.0 million, compared to $43.6 million in the prior year, a decrease of 20%, principally due to lower gross profit and higher STG&R expenses. * The effective tax rate was 13.5%, compared to 24.8% for the fourth quarter of 2019. Income tax adjustments decreased fourth-quarter income tax expense by $4.8 million in 2020 and by $1.3 million in 2019. * Net income attributable to the Company was $27.5 million ($0.85 per share), compared to $29.1 million ($0.90 per share) in Q4 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.89 per share in the fourth quarter of 2020, compared to $0.97 in the same period of last year. * Adjusted EBITDA (a non-GAAP measure) was $57.3 million, compared to $63.9 million in Q4 2019, a decrease of 10.4%.

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

"We were very pleased with the Company's performance this quarter and the overall year. Enabled by very strong free cash flow during the quarter, we continued the trend of significantly reducing net debt and, once again, ended the year with a very healthy balance sheet. Earnings per share benefited from a low tax rate this quarter due to significant non-recurring adjustments. Compared to the full-year tax rate, absent discrete items, of about 28%, the lower rate this quarter increased Adjusted EPS by about $0.12, effectively recovering earnings that would have been recognized in earlier quarters if the full year tax rate had been known," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are also providing initial financial guidance for 2021, reflecting expected strong performance from the Machine Clothing segment, with our expectations for Engineered Composites being significantly impacted by a destocking cycle for our finished goods in our customers' supply chains. We also expect a strong year for free cash flow generation: our expected cash flow in 2021 should exceed the level delivered in 2020."

Outlook for Full-Year 2021

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

* Total company revenue of between $850 and $890 million; * Effective income tax rate, including tax adjustments, of 28% to 30%; * Total company depreciation and amortization of between $70 and $75 million; * Capital expenditures in the range of $50 to $60 million; * GAAP and Adjusted earnings per share of between $2.40 and $2.80; * Total company Adjusted EBITDA of $195 to $220 million; * Machine Clothing revenue of $570 to $590 million; * Machine Clothing Adjusted EBITDA of between $195 and $205 million; * Albany Engineered Composites (AEC) revenue between $275 to $295 million; and * Albany Engineered Composites Adjusted EBITDA of $55 to $65 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

Three Months Ended Years Ended December 31, December 31,

2020 2019 2020 2019

Net sales $ 226,857 $ 257,678 $ 900,610 $ 1,054,132

Cost of goods sold 135,539 161,037 529,538 656,431



Gross profit 91,318 96,641 371,072 397,701

Selling, general, andadministrative 45,742 42,049 163,909 163,651 expenses

Technical and 9,043 9,246 35,347 37,569 research expenses

Restructuring 1,547 1,766 5,736 2,905 expenses, net



Operating income 34,986 43,580 166,080 193,576

Interest expense, net 3,542 3,886 13,584 16,921

Other expense/ (493 ) 349 13,422 (1,557 )(income), net



Income before income 31,937 39,345 139,074 178,212 taxes

Income tax expense 4,327 9,754 41,831 44,829



Net income 27,610 29,591 97,243 133,383

Net income/(loss)attributable to the 73 446 (1,346 ) 985 noncontrolling interest

Net incomeattributable to the $ 27,537 $ 29,145 $ 98,589 $ 132,398 Company



Earnings per shareattributable to $ 0.85 $ 0.90 $ 3.05 $ 4.10 Company shareholders - Basic



Earnings per shareattributable to $ 0.85 $ 0.90 $ 3.05 $ 4.10 Company shareholders - Diluted



Shares of the Companyused in computing earnings per share:

Basic 32,339 32,308 32,329 32,296



Diluted 32,365 32,331 32,356 32,322



Dividends declaredper share, Class A $ 0.20 $ 0.19 $ 0.77 $ 0.73 and Class B

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

December 31, December 31, 2020 2019

ASSETS

Cash and cash equivalents $ 241,316 $ 195,540

Accounts receivable, net 188,423 218,271

Contract assets, net 139,289 79,070

Inventories 110,478 95,149

Income taxes prepaid and receivable 5,940 6,162

Prepaid expenses and other current assets 31,830 24,142

Total current assets $ 717,276 $ 618,334



Property, plant and equipment, net 448,554 466,462

Intangibles, net 46,869 52,892

Goodwill 187,553 180,934

Deferred income taxes 38,757 51,621

Noncurrent receivables, net 36,265 41,234

Other assets 74,662 62,891

Total assets $ 1,549,936 $ 1,474,368



LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable $ 49,173 $ 65,203

Accrued liabilities 125,459 125,885

Current maturities of long-term debt 9 20

Income taxes payable 16,222 11,611

Total current liabilities 190,863 202,719



Long-term debt 398,000 424,009

Other noncurrent liabilities 130,424 132,725

Deferred taxes and other liabilities 10,784 12,226

Total liabilities 730,071 771,679



SHAREHOLDERS' EQUITY

Preferred stock, par value $5.00 per share; - - authorized 2,000,000 shares; none issued

Class A Common Stock, par value $.001 pershare; authorized 100,000,000 shares; 39 39 39,115,405 issued in 2020 and 39,098,792 in 2019

Class B Common Stock, par value $.001 pershare; authorized 25,000,000 shares; issued and 2 2 outstanding 1,617,998 in 2020 and 2019

Additional paid in capital 433,696 432,518

Retained earnings 770,746 698,496

Accumulated items of other comprehensive income:

Translation adjustments (83,203 ) (122,852 )

Pension and postretirement liability (39,661 ) (49,994 )adjustments

Derivative valuation adjustment (9,544 ) (3,135 )

Treasury stock (Class A), at cost; 8,391,011 (256,009 ) (256,391 )shares in 2020 and 8,408,770 shares in 2019

Total Company shareholders' equity 816,066 698,683

Noncontrolling interest 3,799 4,006

Total equity 819,865 702,689

Total liabilities and shareholders' equity $ 1,549,936 $ 1,474,368

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended Years Ended December 31, December 31,

2020 2019 2020 2019

OPERATING ACTIVITIES

Net income $ 27,610 $ 29,591 $ 97,243 $ 133,383

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

Depreciation 16,039 15,426 63,328 62,085

Amortization 2,360 2,405 9,377 8,710

Change in deferredtaxes and other (1,333 ) 900 11,101 13,702 liabilities

Provision for write-offof property, plant and 637 2,018 1,173 3,119 equipment

Non-cash interest (152 ) 151 (290 ) 605 (income)/expense

Write-off of pensionliability adjustments 411 450 411 450 due to settlement/ curtailment

Compensation andbenefits paid or 909 650 1,505 2,063 payable in Class A Common Stock

Provision for creditlosses from uncollected (36 ) (827 ) 1,628 309 receivables and contract assets

Foreign currencyremeasurement (gain)/ (1,504 ) (1,074 ) 14,246 (3,730 )loss on intercompany loans



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

Accounts receivable 25,453 17,554 31,522 9,278

Contract assets (31,190 ) (12,641 ) (59,122 ) (19,199 )

Inventories 6,358 13,004 (13,685 ) (8,923 )

Prepaid expenses and (822 ) 1,766 (7,811 ) (2,291 )other current assets

Income taxes prepaid 775 728 113 1,390 and receivable

Accounts payable (95 ) 2,687 (15,586 ) 10,524

Accrued liabilities 4,207 1,369 (3,856 ) (7,393 )

Income taxes payable 2,198 2,360 5,939 3,979

Noncurrent receivables 3,989 (662 ) 4,158 (1,341 )

Other noncurrent (2,024 ) (2,162 ) (2,437 ) (6,573 )liabilities

Other, net 2,770 66 1,296 205

Net cash provided by 56,560 73,759 140,253 200,352 operating activities



INVESTING ACTIVITIES

Purchase of business, - (30,793 ) - (30,793 )net of cash acquired

Purchases of property, (10,143 ) (18,512 ) (41,463 ) (67,358 )plant and equipment

Purchased software (772 ) (291 ) (927 ) (597 )

Net cash used in (10,915 ) (49,596 ) (42,390 ) (98,748 )investing activities



FINANCING ACTIVITIES

Proceeds from 5,000 25,000 75,000 45,000 borrowings

Principal payments on (25,004 ) (25,003 ) (101,020 ) (120,017 )debt

Principal payments onfinance lease (416 ) (304 ) (7,214 ) (1,180 )liabilities

Debt acquisition costs (2,432 ) - (2,432 ) -

Taxes paid in lieu of - - (490 ) (971 )share issuance

Proceeds from options 30 7 55 112 exercised

Dividends paid (6,144 ) (5,816 ) (24,568 ) (23,251 )

Net cash used in (28,966 ) (6,116 ) (60,669 ) (100,307 )financing activities



Effect of exchange ratechanges on cash and 9,333 3,754 8,582 (3,512 )cash equivalents



Increase/(decrease) incash and cash 26,012 21,801 45,776 (2,215 )equivalents

Cash and cashequivalents at 215,304 173,739 195,540 197,755 beginning of period

Cash and cashequivalents at end of $ 241,316 $ 195,540 $ 241,316 $ 195,540 period

Reconciliation of non-GAAP measures to comparable GAAP measures

The following tables present Net sales and the effect of changes in currency translation rates:

Q4 2020 % Change Net sales Increase sales compared(in as due to on same Net sales as to Q4thousands, reported, changes in basis reported, Q4 2019,except Q4 currency as Q4 2019 2019 excludingpercentages) 2020 translation currency currency rates translation rate rates effects

Machine $ 144,173 $ 3,539 $ 140,634 $ 150,580 (6.6 )%Clothing

AlbanyEngineered 82,684 756 81,928 107,098 (23.5 )%Composites

Consolidated $ 226,857 $ 4,295 $ 222,562 $ 257,678 (13.6 )%total



YTD 2020 % Change Net sales Increase sales compared(in as due to on same Net sales as to 2019,thousands, reported, changes in basis reported, YTD excludingexcept YTD currency as 2019 2019 currencypercentages) 2020 translation currency rate rates translation effects rates

Machine $ 572,955 $ 2,252 $ 570,703 $ 601,254 (5.1 )%Clothing

AlbanyEngineered 327,655 620 327,035 452,878 (27.8 )%Composites

Consolidated $ 900,610 $ 2,872 $ 897,738 $ 1,054,132 (14.8 )%total

The following tables present Gross profit and Gross profit margin:

(in thousands, except Gross Gross profit Gross Gross profitpercentages) profit, margin, profit, margin, Q4 2020 Q4 2020 Q4 2019 Q4 2019

Machine Clothing $ 73,410 50.9 % $ 75,601 50.2 %

Albany Engineered 17,908 21.7 % 21,040 19.6 %Composites

Consolidated total $ 91,318 40.3 % $ 96,641 37.5 %



(in thousands, except Gross Gross profit Gross Gross profitpercentages) profit, margin, profit, margin, YTD 2020 YTD 2020 YTD 2019 YTD 2019

Machine Clothing $ 301,144 52.6 % $ 309,641 51.5 %

Albany Engineered 69,928 21.3 % 88,060 19.4 %Composites

Consolidated total $ 371,072 41.2 % $ 397,701 37.7 %



A reconciliation from operating income/(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended December 31, 2020

Machine Albany Corporate Total(in thousands) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 41,386 $ 8,787 $ (15,187 ) $ 34,986 (GAAP)

Interest, taxes, other - - (7,376 ) (7,376 )income/(expense)

Net income/(loss) (GAAP) 41,386 8,787 (22,563 ) 27,610

Interest expense, net - - 3,542 3,542

Income tax expense - - 4,327 4,327

Depreciation and 5,161 12,303 935 18,399 amortization expense

EBITDA (non-GAAP) 46,547 21,090 (13,759 ) 53,878

Restructuring expenses 1,332 215 - 1,547

Foreign currency 3,009 (372 ) (1,134 ) 1,503 revaluation (gains)/losses

Acquisition/integration - 405 - 405 costs

Pre-tax (income)attributable to - (64 ) - (64 )noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 50,888 $ 21,274 $ (14,893 ) $ 57,269

Adjusted EBITDA margin(Adjusted EBITDA divided 35.3 % 25.7 % - 25.2 %by Net sales-non-GAAP)





Three months ended December 31, 2019

Machine Albany Corporate Total(in thousands) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 46,277 $ 10,922 $ (13,619 ) $ 43,580 (GAAP)

Interest, taxes, other - - (13,989 ) (13,989 )income/(expense)

Net income/(loss) (GAAP) 46,277 10,922 (27,608 ) 29,591

Interest expense, net - - 3,886 3,886

Income tax expense - - 9,754 9,754

Depreciation and 5,201 11,611 1,019 17,831 amortization expense

EBITDA (non-GAAP) 51,478 22,533 (12,949 ) 61,062

Restructuring expenses 4 1,815 (53 ) 1,766

Foreign currency 1,365 (12 ) (748 ) 605 revaluation (gains)/losses

Pension curtailment - - 478 478 expense

Acquisition/integration - 421 200 621 costs

Pre-tax (income)attributable to - (586 ) - (586 )noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 52,847 $ 24,171 $ (13,072 ) $ 63,946

Adjusted EBITDA margin(Adjusted EBITDA divided 35.1 % 22.6 % - 24.8 %by Net sales-non-GAAP)

Year ended December 31, 2020

Machine Albany Corporate Total(in thousands) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 190,805 $ 31,536 $ (56,261 ) $ 166,080 (GAAP)

Interest, taxes, other - - (68,837 ) (68,837 )income/(expense)

Net income/(loss) 190,805 31,536 (125,098 ) 97,243 (GAAP)

Interest expense, net - - 13,584 13,584

Income tax expense - - 41,831 41,831

Depreciation and 20,304 48,496 3,905 72,705 amortization expense

EBITDA (non-GAAP) 211,109 80,032 (65,778 ) 225,363

Restructuring expenses 2,746 2,821 169 5,736

Foreign currencyrevaluation (gains)/ 1,743 130 13,571 15,444 losses

Former CEO termination - - 2,742 2,742 costs

Acquisition/integration - 1,272 - 1,272 costs

Pre-tax lossattributable to - 1,348 - 1,348 noncontrolling interest

Adjusted EBITDA $ 215,598 $ 85,603 $ (49,296 ) $ 251,905 (non-GAAP)

Adjusted EBITDA margin(Adjusted EBITDA 37.6 % 26.1 % - 28.0 %divided by Net sales-non-GAAP)





Year ended December 31, 2019

Machine Albany Corporate Total(in thousands) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 191,965 $ 55,520 $ (53,909 ) $ 193,576 (GAAP)

Interest, taxes, other - - (60,193 ) (60,193 )income/(expense)

Net income/(loss) 191,965 55,520 (114,102 ) 133,383 (GAAP)

Interest expense, net - - 16,921 16,921

Income tax expense - - 44,829 44,829

Depreciation and 21,876 44,670 4,249 70,795 amortization expense

EBITDA (non-GAAP) 213,841 100,190 (48,103 ) 265,928

Restructuring expenses 1,129 1,833 (57 ) 2,905

Foreign currencyrevaluation (gains)/ 630 643 (4,463 ) (3,190 )losses

Pension curtailment - - 478 478 expense

Acquisition/integration - 421 200 621 costs

Pre-tax (income)attributable to - (1,308 ) - (1,308 )noncontrolling interest

Adjusted EBITDA $ 215,600 $ 101,779 $ (51,945 ) $ 265,434 (non-GAAP)

Adjusted EBITDA margin(Adjusted EBITDA 35.9 % 22.5 % - 25.2 %divided by Net sales-non-GAAP)



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

Three months ended December 31, Per2020 Pre tax Tax After tax share(in thousands, except per share Amounts Effect Effect Effectamounts)

Restructuring expenses $ 1,547 $ 485 $ 1,062 $ 0.03

Foreign currency revaluation 1,503 1,379 124 0.00 (gains)/losses (a)

Acquisition/integration costs 405 121 284 0.01



Three months ended December 31, Per2019 Pre tax Tax After tax share(in thousands, except per share Amounts Effect Effect Effectamounts)

Restructuring expenses $ 1,766 $ 494 $ 1,272 $ 0.04

Foreign currency revaluation 605 169 436 0.01 (gains)/losses

Pension curtailment charge 478 91 387 0.01

Acquisition/integration costs 621 156 465 0.01



Year ended December 31, 2020 Pre tax Tax After tax Per(in thousands, except per share Amounts Effect Effect shareamounts) Effect

Restructuring expenses $ 5,736 $ 1,862 $ 3,874 $ 0.11

Foreign currency revaluation 15,444 896 14,548 0.46 (gains)/losses(a)

Former CEO termination costs 2,742 713 2,029 0.06

Acquisition/integration costs 1,272 380 892 0.04



(a) In Q1 2020, the company recorded losses of approximately $17 million injurisdictions where it cannot record a tax benefit from the losses, and in Q42020, recorded gains of approximately $3 million in jurisdictions where it didnot record a tax expense from the gains, which results in an unusualrelationship between the pre-tax and after-tax amounts.



Year ended December 31, 2019 Pre tax Tax After tax Per(in thousands, except per share Amounts Effect Effect shareamounts) Effect

Restructuring expenses $ 2,905 $ 824 $ 2,081 $ 0.06

Foreign currency revaluation (3,190 ) (904 ) (2,286 ) (0.07 )(gains)/losses

Pension curtailment charge 478 91 387 0.01

Acquisition/integration costs 621 156 465 0.01



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

Three months ended Years Ended December 31, December 31,

Per share amounts (Basic) 2020 2019 2020 2019

Earnings per share (GAAP) $ 0.85 $ 0.90 $ 3.05 $ 4.10

Adjustments, after tax:

Restructuring expenses 0.03 0.04 0.11 0.06

Foreign currency revaluation - 0.01 0.46 (0.07 )(gains)/losses

Former CEO termination costs - - 0.06 -

Pension curtailment charge - 0.01 - 0.01

Acquisition/integration costs 0.01 0.01 0.04 0.01

Adjusted Earnings per share $ 0.89 $ 0.97 $ 3.72 $ 4.11 (non-GAAP)

The calculations of net debt are as follows:

(in December September June 30, March 31, Decemberthousands) 31, 2020 30, 2020 2020 2020 31, 2019

Currentmaturitiesof $ 9 $ 12 $ 17 $ 20 $ 20 long-termdebt

Long-term 398,000 418,000 435,000 491,002 424,009 debt

Total debt 398,009 418,012 435,017 491,022 424,029

Cash andcash 241,316 215,304 204,037 222,680 195,540 equivalents

Net debt $ 156,693 $ 202,708 $ 230,980 $ 268,342 $ 228,489 (non-GAAP)

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 Machine Clothing AECEBITDA

(in millions) Low High Low High

Net income attributable to the Company $ 176 $ 185 $ 5 $ 14 (GAAP) (b)

Income attributable to the - - - - noncontrolling interest

Interest expense, net - - - -

Income tax expense - - - -

Depreciation and amortization 19 20 50 51

EBITDA (non-GAAP) 195 205 55 65

Restructuring expenses, net (c) - - - -

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

Acquisition/integration costs (c) - - - -

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

Adjusted EBITDA (non-GAAP) $ 195 $ 205 $ 55 $ 65

(b) Interest, Other income/expense andIncome taxes are not allocated to the business segments



Forecast of Full Year 2021 Adjusted Total Company EBITDA

(in millions) Low High

Net income attributable to the Company $ 78 $ 91 (GAAP)

Income attributable to the - - noncontrolling interest

Interest expense, net 17 15

Income tax expense 30 39

Depreciation and amortization 70 75

EBITDA (non-GAAP) 195 220

Restructuring expenses, net (c) - -

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

Acquisition/integration costs (c) - -

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

Adjusted EBITDA (non-GAAP) $ 195 $ 220



Total Company

Forecast of Full Year 2021 Earnings per Low High share (basic) (d)

Net income attributable to the Company $ 2.40 $ 2.80 (GAAP)

Restructuring expenses, net (c) - -

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

Acquisition/integration costs (c) - -

Adjusted Earnings per share (non-GAAP) $ 2.40 $ 2.80



(c) Due to the uncertainty of these items, we are unable to forecast theseitems for 2021

(d) Calculations based on shares outstanding estimate of 32.3 million.

About Albany International Corp.

Albany International is a global advanced textiles and materials processing company, with two core businesses. The Machine Clothing segment is the world's leading producer of custom-designed fabrics and belts essential to production in the paper, nonwovens, and other process industries. Albany Engineered Composites is a rapidly growing supplier of highly engineered composite parts for the aerospace industry. Albany International is headquartered in Rochester, New Hampshire, operates 23 plants in 11 countries, employs over 4,000 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

Non-GAAP Measures

This release, including the conference call commentary associated with this release, contains certain non-GAAP measures, including: net sales, and percent change in net sales, excluding the impact of currency translation effects (for each segment and on a consolidated basis); EBITDA and Adjusted EBITDA (for each segment and on a consolidated basis, represented in dollars or as a percentage of net sales); Net debt; and Adjusted earnings per share (or Adjusted EPS). Such items are provided because management believes that they provide additional useful information to investors regarding the Company's operational performance.

Presenting Net sales and increases or decreases in Net sales, after currency effects are excluded, can give management and investors insight into underlying sales trends. Net sales, or percent changes in net sales, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

EBITDA, Adjusted EBITDA and Adjusted EPS are performance measures that relate to the Company's continuing operations. EBITDA, or net income with interest, taxes, depreciation, and amortization added back, is a common indicator of financial performance used, among other things, to analyze and compare core profitability between companies and industries because it eliminates effects due to differences in financing, asset bases and taxes. The Company calculates EBITDA by removing the following from Net income: Interest expense, net, Income tax expense, Depreciation and amortization expense. Adjusted EBITDA is calculated by: adding to EBITDA costs associated with restructuring, former CEO termination costs, and inventory write-offs associated with discontinued businesses; adding charges and credits related to pension plan settlements and curtailments; adding (or subtracting) revaluation losses (or gains); subtracting (or adding) gains (or losses) from the sale of buildings or investments; subtracting insurance recovery gains in excess of previously recorded losses; adding acquisition and related retention agreement expenses and subtracting (or adding) Income (or loss) attributable to the non-controlling interest in Albany Safran Composites (ASC). Adjusted EBITDA may also be presented as a percentage of net sales by dividing it by net sales. An understanding of the impact in a particular quarter of specific restructuring costs, former CEO severance costs, acquisition and related retention agreement expenses, currency revaluation, inventory write-offs associated with discontinued businesses, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Restructuring expenses, while frequent in recent years, are reflective of significant reductions in manufacturing capacity and associated headcount in response to shifting markets, and not of the profitability of the business going forward as restructured. Adjusted earnings per share (Adjusted EPS) is calculated by adding to (or subtracting from) net income attributable to the Company per share, on an after-tax basis: restructuring charges; former CEO severance costs; charges and credits related to pension plan settlements and curtailments; inventory write-offs associated with discontinued businesses; foreign currency revaluation losses (or gains); acquisition-related expenses; and losses (or gains) from the sale of investments.

EBITDA, Adjusted EBITDA, and Adjusted EPS, as defined by the Company, may not be similar to similarly named measures of other companies. Such measures are not considered measurements under GAAP, and should be considered in addition to, but not as substitutes for, the information contained in the Company's statements of income.

The Company discloses certain income and expense items on a per-share basis. The Company believes that such disclosures provide important insight into underlying quarterly earnings and are financial performance metrics commonly used by investors. The Company calculates the quarterly per-share amount for items included in continuing operations by using an income tax rate based on either the tax rates in specific countries or the estimated tax rate applied to total company results. The tax rate applied excludes income tax adjustments (discrete tax adjustments and the effect of changes in the estimated income tax rate). The after-tax amount is then divided by the weighted-average number of shares outstanding for each period. Year-to-date earnings per-share effects are determined by adding the amounts calculated at each reporting period.

Net debt is, in the opinion of the Company, helpful to investors wishing to understand what the Company's debt position would be if all available cash were applied to pay down indebtedness. The Company calculates Net debt by subtracting Cash and cash equivalents from Total debt. Total debt is calculated by adding Long-term debt, Current maturities of long-term debt, and Notes and loans payable, if any.

Forward-Looking Statements

This press release may contain statements, estimates, guidance or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," "should," "look for," "guidance," "guide," and similar expressions identify forward-looking statements, which generally are not historical in nature. Because forward-looking statements are subject to certain risks and uncertainties (including, without limitation, those set forth in the Company's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q), actual results may differmaterially 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.

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