Business Wire | Jul 26, 2021 04:30PM EDT

Albany International Reports Second-Quarter 2021 Results, Raises 2021 Guidance

Jul. 26, 2021

ROCHESTER, N.H.--(BUSINESS WIRE)--Jul. 26, 2021--Albany International Corp. (NYSE:AIN) today reported operating results for its second quarter of 2021, which ended June 30, 2021. Additionally, the company raised its financial guidance for 2021.

"We are pleased to report another quarter of solid performance," said Bill Higgins, President and CEO. "We delivered revenues of $235 million as well as profitability and free cash flow near record levels. Both business segments contributed to the strong results. Our Machine Clothing segment continued to experience solid demand from customers across the globe. In our Engineered Composites segment, performance remains very good - particularly in light of the headwinds caused by the ongoing destocking in the commercial aerospace supply chain. We are executing well on our defense programs and preparing to meet planned increases on OEM production rates on our narrow body commercial programs."

"We had a great first half of 2021," added CFO, Stephen Nolan. "Our consistent operating performance, near record free cash flow, and strong balance sheet position us well as global markets recover. At this stage, we believe that we have sufficient insight into that recovery and our operational performance to be able to raise our full year revenue and profit guidance, including raising the guidance midpoint of GAAP EPS and Adjusted EPS, each by over $0.40."

For the second quarter ended June 30, 2021:

* Net sales were $234.5 million, up 4%, or 1% after adjusting for currency translation rates, when compared to the prior year. * Gross profit of $101.7 million was 1% lower than the $103.0 million reported for the same period of 2020. * Selling, Technical, General, and Research (STG&R) expenses were $51.8 million, compared to $47.4 million in the same period of 2020. The increase was driven by higher incentive compensation, travel, Research and Development costs, and revaluation of foreign currency balances, which increased STG&R by $1.9 million in 2021, compared to an increase of $1.1 million in the same period of 2020. * Operating income was $50.0 million, compared to $52.7 million in the prior year, a decrease of 5%, principally due to higher STG&R expenses, partially offset by lower restructuring expenses. * The effective tax rate was 30.0%, compared to 32.1% for the second quarter of 2020. A lower share of our global profits in jurisdictions with higher tax rates contributed to the lower tax rate this quarter compared to that for the second-quarter 2020. * Net income attributable to the Company was $31.4 million ($0.97 per share), compared to $32.4 million ($1.00 per share) in the second quarter of 2020. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $1.01 per share, compared to $1.09 for the same period of last year. * Adjusted EBITDA (a non-GAAP measure) was $69.4 million, compared to $73.7 million in the second quarter of 2020, a decrease of 6%.

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

Outlook for Full-Year 2021

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

* Total company revenue between $880 and $910 million; * Effective income tax rate, including tax adjustments, of 28% to 30%; * Total company depreciation and amortization of approximately $75 million; * Capital expenditures in the range of $40 to $50 million; * GAAP earnings per share between $2.84 and $3.14 and Adjusted earnings per share between $2.90 and $3.20; * Total company Adjusted EBITDA between $225 to $240 million; * Machine Clothing revenue between $585 to $600 million; * Machine Clothing Adjusted EBITDA between $210 and $220 million; * Albany Engineered Composites (AEC) revenue between $290 to $310 million; and * Albany Engineered Composites Adjusted EBITDA between $65 to $70 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Net sales $ 234,519 $ 225,990 $ 456,880 $ 461,754

Cost of goods sold 132,791 123,010 266,606 269,302



Gross profit 101,728 102,980 190,274 192,452

Selling, general, and 42,009 38,543 79,203 78,649 administrative expenses

Technical and research 9,762 8,873 19,243 18,003 expenses

Restructuring expenses, (9 ) 2,837 43 3,479 net



Operating income 49,966 52,727 91,785 92,321

Interest expense, net 4,218 3,823 7,787 7,800

Other expense/(income), 862 1,091 1,462 16,660 net



Income before income 44,886 47,813 82,536 67,861 taxes

Income tax expense 13,446 15,364 23,486 27,818



Net income 31,440 32,449 59,050 40,043

Net income/(loss)attributable to the 43 95 70 (1,420 )noncontrolling interest

Net income attributable $ 31,397 $ 32,354 $ 58,980 $ 41,463 to the Company



Earnings per shareattributable to Company $ 0.97 $ 1.00 $ 1.82 $ 1.28 shareholders - Basic



Earnings per shareattributable to Company $ 0.97 $ 1.00 $ 1.82 $ 1.28 shareholders - Diluted



Shares of the Companyused in computing earnings per share:

Basic 32,375 32,328 32,363 32,320



Diluted 32,422 32,336 32,411 32,328



Dividends declared pershare, Class A and Class $ 0.20 $ 0.19 $ 0.40 $ 0.38 B

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

June 30, 2021 December 31, 2020

ASSETS

Cash and cash equivalents $ 253,330 $ 241,316

Accounts receivable, net 190,937 188,423

Contract assets, net 113,225 139,289

Inventories 120,665 110,478

Income taxes prepaid and receivable 6,236 5,940

Prepaid expenses and other current assets 33,089 31,830

Total current assets $ 717,482 $ 717,276



Property, plant and equipment, net 438,392 448,554

Intangibles, net 42,998 46,869

Goodwill 185,293 187,553

Deferred income taxes 33,102 38,757

Noncurrent receivables, net 34,466 36,265

Other assets 74,907 74,662

Total assets $ 1,526,640 $ 1,549,936



LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable $ 55,348 $ 49,173

Accrued liabilities 108,007 125,459

Current maturities of long-term debt - 9

Income taxes payable 12,233 16,222

Total current liabilities 175,588 190,863



Long-term debt 350,000 398,000

Other noncurrent liabilities 121,333 130,424

Deferred taxes and other liabilities 11,660 10,784

Total liabilities 658,581 730,071



SHAREHOLDERS' EQUITY

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

Class A Common Stock, par value $.001 per share;authorized 100,000,000 shares; 39,142,483 issued 39 39 in 2021 and 39,115,405 in 2020

Class B Common Stock, par value $.001 per share;authorized 25,000,000 shares; issued and 2 2 outstanding 1,617,998 in 2021 and 2020

Additional paid in capital 435,230 433,696

Retained earnings 816,778 770,746

Accumulated items of other comprehensive income:

Translation adjustments (85,384 ) (83,203 )

Pension and postretirement liability adjustments (39,282 ) (39,661 )

Derivative valuation adjustment (7,398 ) (9,544 )

Treasury stock (Class A), at cost; 8,379,804 (255,768 ) (256,009 )shares in 2021 and 8,391,011 in 2020

Total Company shareholders' equity 864,217 816,066

Noncontrolling interest 3,842 3,799

Total equity 868,059 819,865

Total liabilities and shareholders' equity $ 1,526,640 $ 1,549,936

ALBANY INTERNATIONAL CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

OPERATING ACTIVITIES

Net income $ 31,440 $ 32,449 $ 59,050 $ 40,043

Adjustments to reconcilenet income to net cash provided by operatingactivities:

Depreciation 15,971 15,498 32,560 31,004

Amortization 2,280 2,456 4,573 5,020

Change in deferred taxes 974 3,543 5,416 9,360 and other liabilities

Impairment of property, 353 36 538 233 plant and equipment

Non-cash interest 265 20 310 171 expense

Compensation andbenefits paid or payable 1,639 1,198 1,626 516 in Class A Common Stock

Provision for creditlosses from uncollected 27 114 (83 ) 1,769 receivables and contractassets

Foreign currencyremeasurement (gain)/ (723 ) 194 (1,031 ) 15,581 loss on intercompanyloans

Fair value adjustment on 1 - 140 64 foreign currency options



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

Accounts receivable (129 ) 11,511 (3,365 ) 8,117

Contract assets 9,539 (11,169 ) 25,643 (20,009 )

Inventories (1,821 ) (4,878 ) (10,384 ) (24,628 )

Prepaid expenses and (606 ) (301 ) (1,505 ) (2,457 )other current assets

Income taxes prepaid and 1,156 29 (309 ) (208 )receivable

Accounts payable (4,580 ) (9,337 ) 4,608 (10,383 )

Accrued liabilities 2,062 4,171 (17,423 ) (10,901 )

Income taxes payable 4,121 5,526 (3,956 ) 1,955

Noncurrent receivables 1,099 628 1,587 397

Other noncurrent (2,166 ) (464 ) (4,263 ) (524 )liabilities

Other, net 1,051 (552 ) 1,908 (1,086 )

Net cash provided by 61,953 50,672 95,640 44,034 operating activities



INVESTING ACTIVITIES

Purchases of property, (10,302 ) (9,212 ) (22,836 ) (21,971 )plant and equipment

Purchased software (286 ) - (288 ) (46 )

Net cash used in (10,588 ) (9,212 ) (23,124 ) (22,017 )investing activities



FINANCING ACTIVITIES

Proceeds from borrowings - - 8,000 70,000

Principal payments on (34,002 ) (56,005 ) (56,009 ) (59,011 )debt

Principal payments onfinance lease (355 ) (329 ) (704 ) (6,463 )liabilities

Taxes paid in lieu of - - (998 ) (490 )share issuance

Proceeds from options 21 20 149 20 exercised

Dividends paid (6,474 ) (6,141 ) (12,942 ) (12,280 )

Net cash used in (40,810 ) (62,455 ) (62,504 ) (8,224 )financing activities



Effect of exchange ratechanges on cash and cash 4,904 2,352 2,002 (5,296 )equivalents



Increase/(decrease) incash and cash 15,459 (18,643 ) 12,014 8,497 equivalents

Cash and cashequivalents at beginning 237,871 222,680 241,316 195,540 of period

Cash and cashequivalents at end of $ 253,330 $ 204,037 $ 253,330 $ 204,037 period

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:

Q2 2021 % Change Increase due sales compared(in thousands, Net sales to on same Net sales to Q2except as changes in basis as as 2020,percentages) reported, currency Q2 2020 reported, excluding Q2 2021 translation currency Q2 2020 currency rates translation rate rates effects

Machine Clothing $ 159,921 $ 5,281 $ 154,640 $ 153,433 0.8 %

AlbanyEngineered 74,598 1,088 73,510 72,557 1.3 %Composites

Consolidated $ 234,519 $ 6,369 $ 228,150 $ 225,990 1.0 %total



YTD 2021 % Change Increase due sales compared(in thousands, Net sales to on same Net sales to 2020,except as changes in basis as as excludingpercentages) reported, currency 2020 reported, currency YTD 2021 translation currency YTD 2020 rate rates translation effects rates

Machine Clothing $ 308,127 $ 10,142 $ 297,985 $ 290,035 2.7 %

AlbanyEngineered 148,753 2,267 146,486 171,719 (14.7) %Composites

Consolidated $ 456,880 $ 12,409 $ 444,471 $ 461,754 (3.7) %total

The following tables present Gross profit and Gross profit margin:

(in thousands, except Gross Gross profit Gross Gross profitpercentages) profit, margin, profit, margin, Q2 2021 Q2 2021 Q2 2020 Q2 2020

Machine Clothing $ 84,597 52.9 % $ 83,612 54.5 %

Albany Engineered 17,131 23.0 % 19,368 26.7 %Composites

Consolidated total $ 101,728 43.4 % $ 102,980 45.6 %

(in thousands, except percentages)

Gross profit, YTD 2021

Gross profit margin, YTD 2021

Gross profit, YTD 2020

Gross profit margin, YTD 2020

Machine Clothing

$

160,990

52.2

%

$

156,264

53.9

%

Albany Engineered Composites

29,284

19.7

%

36,188

21.1

%

Consolidated total

$

190,274

41.6

%

$

192,452

41.7

%

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:

(in thousands, except Gross Gross profit Gross Gross profitpercentages) profit, margin, profit, margin, YTD 2021 YTD 2021 YTD 2020 YTD 2020

Machine Clothing $ 160,990 52.2 % $ 156,264 53.9 %

Albany Engineered 29,284 19.7 % 36,188 21.1 %Composites

Consolidated total $ 190,274 41.6 % $ 192,452 41.7 %

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 June 30, 2021

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

Operating income/(loss) (GAAP) $ 55,902 $ 7,164 $ (13,100 ) $ 49,966

Interest, taxes, other income/ - - (18,526 ) (18,526 )(expense)

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 5,138 12,194 919 18,251 expense

EBITDA (non-GAAP) 61,040 19,358 (13,043 ) 67,355

Restructuring expenses, net 10 (48 ) 29 (9 )

Foreign currency revaluation 1,908 (244 ) 174 1,838 (gains)/losses

Acquisition/integration costs - 300 - 300

Pre-tax (income) attributable - (65 ) - (65 )to noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 62,958 $ 19,301 $ (12,840 ) $ 69,419

Adjusted EBITDA margin(Adjusted EBITDA divided by 39.4 % 25.9 % - 29.6 %Net sales-non-GAAP)





Three months ended June 30, 2020

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

Operating income/(loss) (GAAP) $ 56,543 $ 8,299 $ (12,115 ) $ 52,727

Interest, taxes, other income/ - - (20,278 ) (20,278 )(expense)

Net income/(loss) (GAAP) 56,543 8,299 (32,393 ) 32,449

Interest expense, net - - 3,823 3,823

Income tax expense - - 15,364 15,364

Depreciation and amortization 4,981 11,971 1,002 17,954 expense

EBITDA (non-GAAP) 61,524 20,270 (12,204 ) 69,590

Restructuring expenses, net 388 2,248 201 2,837

Foreign currency revaluation 973 30 20 1,023 (gains)/losses

Acquisition/integration costs - 278 - 278

Pre-tax (income) attributable - (58 ) - (58 )to noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 62,885 $ 22,768 $ (11,983 ) $ 73,670

Adjusted EBITDA margin(Adjusted EBITDA divided by 41.0 % 31.4 % - 32.6 %Net sales-non-GAAP)

Six months ended June 30, 2021

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

Operating income/(loss) $ 106,264 $ 10,102 $ (24,581 ) $ 91,785 (GAAP)

Interest, taxes, other - - (32,735 ) (32,735 )income/(expense)

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 10,258 25,061 1,814 37,133 amortization expense

EBITDA (non-GAAP) 116,522 35,163 (24,229 ) 127,456

Restructuring expenses, net (58 ) 41 60 43

Foreign currency revaluation 1,415 332 341 2,088 (gains)/losses

Acquisition/integration - 614 - 614 costs

Pre-tax (income)attributable to - (111 ) - (111 )noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 117,879 $ 36,039 $ (23,828 ) $ 130,090

Adjusted EBITDA margin(Adjusted EBITDA divided by 38.3 % 24.2 % - 28.5 %Net sales-non-GAAP)



Six months ended June 30, 2020

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

Operating income/(loss) $ 103,718 $ 15,922 $ (27,319 ) $ 92,321 (GAAP)

Interest, taxes, other - - (52,278 ) (52,278 )income/(expense)

Net income/(loss) (GAAP) 103,718 15,922 (79,597 ) 40,043

Interest expense, net - - 7,800 7,800

Income tax expense - - 27,818 27,818

Depreciation and 10,068 23,956 2,000 36,024 amortization expense

EBITDA (non-GAAP) 113,786 39,878 (41,979 ) 111,685

Restructuring expenses, net 1,030 2,248 201 3,479

Foreign currency revaluation (2,688 ) 727 14,850 12,889 (gains)/losses

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

Acquisition/integration - 576 - 576 costs

Pre-tax loss attributable to - 1,434 - 1,434 noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 112,128 $ 44,863 $ (24,186 ) $ 132,805

Adjusted EBITDA margin(Adjusted EBITDA divided by 38.7 % 26.1 % - 28.8 %Net sales-non-GAAP)

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

Three months ended June 30, 2021 Pre tax Tax After tax Per share(in thousands, except per share Amounts Effect Effectamounts) Effect

Restructuring expenses, net $ (9 ) $ (3 ) $ (6 ) $ 0.00

Foreign currency revaluation (gains)/ 1,838 781 1,057 0.03 losses

Acquisition/integration costs 300 90 210 0.01



Three months ended June 30, 2020 Pre tax Tax After tax Per share(in thousands, except per share Amounts Effect Effectamounts) Effect

Restructuring expenses, net $ 2,837 $ 953 $ 1,884 $ 0.06

Foreign currency revaluation (gains)/ 1,023 536 487 0.02 losses

Acquisition/integration costs 278 83 195 0.01



Six months ended June 30, 2021 Pre tax Tax After tax Per share(in thousands, except per share Amounts Effect Effectamounts) Effect

Restructuring expenses, net $ 43 $ 12 $ 31 $ 0.00

Foreign currency revaluation (gains)/ 2,088 646 1,442 0.04 losses

Acquisition/integration costs 614 184 430 0.02



Six months ended June 30, 2020 Pre tax Tax After tax Per share(in thousands, except per share Amounts Effect Effectamounts) Effect

Restructuring expenses, net $ 3,479 $ 1,145 $ 2,334 $ 0.07

Foreign currency revaluation (gains)/ 12,889 (1,009 ) 13,898 0.44 losses (a)

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

Acquisition/integration costs 576 172 404 0.02



(a) In Q1 2020, the company recorded losses of approximately $17 million injurisdictions where it cannot record a tax benefit from the losses, whichresults in an unusual relationship between the pre-tax and after-tax amounts.

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

Three months ended Six months ended June 30, June 30,

Per share amounts (Basic) 2021 2020 2021 2020

Earnings per share (GAAP) $ 0.97 $ 1.00 $ 1.82 $ 1.28

Adjustments, after tax:

Restructuring expenses, net - 0.06 - 0.07

Foreign currency revaluation 0.03 0.02 0.04 0.44 (gains)/losses

Former CEO termination costs - - - 0.06

Acquisition/integration costs 0.01 0.01 0.02 0.02

Adjusted Earnings per share $ 1.01 $ 1.09 $ 1.88 $ 1.87 (non-GAAP)

The calculations of net debt are as follows:

(in thousands) June 30, March 31, December 31, 2021 2021 2020

Current maturities of long-term $ - $ 2 $ 9 debt

Long-term debt 350,000 384,000 398,000

Total debt 350,000 384,002 398,009

Cash and cash equivalents 253,330 237,871 241,316

Net debt (non-GAAP) $ 96,670 $ 146,131 $ 156,693

The tables below provide a reconciliation of forecasted full-year 2021 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Forecast of Full Year 2021 Adjusted EBITDA Machine Clothing AEC

(in millions) Low High Low High

Net income attributable to the Company $ 189 $ 198 $ 15 $ 19 (GAAP) (b)

Income attributable to the noncontrolling - - (1 ) (1 )interest

Interest expense, net - - - -

Income tax expense - - - -

Depreciation and amortization 20 21 49 50

EBITDA (non-GAAP) 209 219 63 68

Restructuring expenses, net (c) - - - -

Foreign currency revaluation (gains)/ 1 1 - - losses (c)

Acquisition/integration costs (c) - - 1 1

Pre-tax (income)/loss attributable to - - 1 1 non-controlling interest

Adjusted EBITDA (non-GAAP) $ 210 $ 220 $ 65 $ 70

(b) Interest, Other income/expense and Income taxes are not allocated to thebusiness segments



Forecast of Full Year 2021 Adjusted EBITDA Total Company

(in millions) Low High

Net income attributable to the Company $ 92 $ 102 (GAAP)

Income attributable to the noncontrolling (1 ) (1 ) interest

Interest expense, net 16 16

Income tax expense 40 44

Depreciation and amortization 74 75

EBITDA (non-GAAP) 221 236

Restructuring expenses, net (c) - -

Foreign currency revaluation (gains)/ 2 2 losses (c)

Acquisition/integration costs (c) 1 1

Pre-tax (income)/loss attributable to 1 1 non-controlling interest

Adjusted EBITDA (non-GAAP) $ 225 $ 240



Total Company

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

Net income attributable to the Company $ 2.84 $ 3.14 (GAAP)

Restructuring expenses, net (c) - -

Foreign currency revaluation (gains)/ 0.04 0.04 losses (c)

Acquisition/integration costs (c) 0.02 0.02

Adjusted Earnings per share (non-GAAP) $ 2.90 $ 3.20



(c) Due to the uncertainty of these items, we are unable to forecast theseitems for 2021. The amount shown represents the value incurred through thesecond quarter.

(d) Calculations based on shares outstanding estimate of 32.4 million

About Albany International Corp.

Albany International is a leading developer and manufacturer of engineered components, using advanced materials processing and automation capabilities, with two core businesses. Machine Clothing is the world's leading producer of custom-designed, consumable fabrics and process belts essential for the manufacture of all grades of paper products. Albany Engineered Composites is a growing designer and manufacturer of advanced materials-based engineered components for demanding aerospace applications, supporting both commercial and military platforms. Albany International is headquartered in Rochester, New Hampshire, operates 23 facilities in 11 countries, employs approximately 4,000 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

Non-GAAP Measures

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

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

EBITDA, Adjusted EBITDA and Adjusted EPS are performance measures that relate to the Company's continuing operations. EBITDA, or net income with interest, taxes, depreciation, and amortization added back, is a common indicator of financial performance used, among other things, to analyze and compare core profitability between companies and industries because it eliminates effects due to differences in financing, asset bases and taxes. The Company calculates EBITDA by removing the following from Net income: Interest expense, net, Income tax expense, Depreciation and amortization expense. Adjusted EBITDA is calculated by: adding to EBITDA costs associated with restructuring, former CEO termination costs, and inventory write-offs associated with discontinued businesses; adding charges and credits related to pension plan settlements and curtailments; adding (or subtracting) revaluation losses (or gains); subtracting (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.

Forward-Looking Statements

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

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic and paper-industry trends and conditions during 2021 and in future years; expectations in 2021 and in future periods of sales, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net sales), Adjusted EPS, income, gross profit, gross margin, cash flows and other financial items in each of the Company's businesses, and for the Company as a whole; the timing and impact of production and development programs in the Company's AEC business segment and the sales growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company's financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Statements expressing management's assessments of the growth potential of its businesses, or referring to earlier assessments of such potential, are not intended as forecasts of actual future growth, and should not be relied on as such. While management believes such assessments to have a reasonable basis, such assessments are, by their nature, inherently uncertain. This release and earlier releases set forth a number of assumptions regarding these assessments, including historical results, independent forecasts regarding the markets in which these businesses operate, and the timing and magnitude of orders for our customers' products. Historical growth rates are no guarantee of future growth, and such independent forecasts and assumptions could prove materially incorrect in some cases.

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