Business Wire | Oct 28, 2020 04:37PM EDT

Albany International Reports Third-Quarter 2020 Results

Oct. 28, 2020

ROCHESTER, N.H.--(BUSINESS WIRE)--Oct. 28, 2020--Albany International Corp. (NYSE:AIN) today reported operating results for its third quarter of 2020, which ended September 30, 2020.

"Our top priority remains the health and safety of our employees, and I am proud of our employees' commitment to keeping one another safe and our operations performing well," said Albany International President and Chief Executive Officer, Bill Higgins.

"We are reporting another quarter of strong financial performance despite the challenging business conditions resulting from the pandemic. Over the past nine months, we've adjusted our headcount, controlled costs and executed well across our organization. These actions positioned us to deliver healthy third-quarter profit margins despite the effects of the economic downturn on our top line. Additionally, late in the third quarter we successfully reopened our three LEAP production facilities.

"The Company is well positioned to pursue our strategies for long-term growth in our markets with positive free cash flow, a strong balance sheet and ample liquidity. Our Machine Clothing segment is the global market leader with an unmatched reputation for product reliability, customer service and product innovation. We expect near-term Albany Engineered Composites results will be driven by our current portfolio of defense and commercial programs. Longer-term, we expect organic growth to be driven by additional conventional composite contract wins and the use of our proprietary 3D composite technologies in a broader array of demanding aerospace applications," concluded Higgins.

For the third quarter ended September 30, 2020:

* Net sales were $212.0 million, down $59.1 million, or 21.8%, when compared to the prior year. Sales declined $46.6 million, or 38.9%, in the Engineered Composites segment driven by the temporary production halt on the LEAP program. * Gross profit of $87.3 million was 16.1% lower than the $104.1 million reported for the same period of 2019. * Selling, Technical, General, and Research (STG&R) expenses were $47.8 million, compared to $48.7 million in the same period of 2019. Revaluation of foreign currency balances increased STG&R by $1.3 million in 2020, compared to a decrease of $1.0 million in the same period of 2019. * Operating income was $38.8 million, compared to $55.7 million in the prior year, a decrease of 30.4%, as lower gross profit and higher restructuring expenses were partially offset by lower STG&R expenses. * The effective tax rate was 24.7% for the third quarter of each year. Income tax adjustments reduced third-quarter income tax expense by $3.0 million in 2020 and $1.5 million in 2019. * Net income attributable to the Company was $29.6 million ($0.92 per share), compared to $40.0 million ($1.24 per share) in Q3 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.96 per share in the third quarter of 2020, compared to $1.17 in the same period of last year. * Adjusted EBITDA (a non-GAAP measure) was $61.8 million, compared to $71.4 million in Q3 2019, a decrease of 13.5%.

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. We finished the quarter with a very strong balance sheet. We expect to continue to generate strong free cash flow during the balance of the year. Exploiting the strength of our balance sheet and strong operational performance, we have extended the Company's revolving credit agreement until October 2024," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are also updating our full-year guidance, reflecting the strong operational performance the Company delivered in the third quarter."

Outlook for Full-Year 2020

Albany International is updating financial guidance for the full-year 2020:

* Total company revenue of between $870 and $890 million; * Effective income tax rate, including tax adjustments, of 34% to 36%; * Total company depreciation and amortization of between $70 and $75 million; * Capital expenditures in the range of $45 to $55 million; * GAAP earnings per share of between $2.72 and $2.82; * Adjusted earnings per share of between $3.35 and $3.45; * Total company Adjusted EBITDA of $240 to $250 million; * Machine Clothing revenue of $555 to $565 million; * Machine Clothing Adjusted EBITDA of between $200 and $210 million; * Albany Engineered Composites (AEC) revenue between $315 to $325 million; and * Albany Engineered Composites Adjusted EBITDA of $75 to $85 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Net sales $ 211,999 $ 271,133 $ 673,753 $ 796,454

Cost of goods sold 124,697 167,026 393,999 495,394



Gross profit 87,302 104,107 279,754 301,060

Selling, general, and 39,518 39,841 118,167 121,602 administrative expenses

Technical and research 8,301 8,832 26,304 28,323 expenses

Restructuring expenses, 710 (244 ) 4,189 1,139 net



Operating income 38,773 55,678 131,094 149,996

Interest expense, net 2,242 3,987 10,042 13,035

Other expense/(income), (2,745 ) (1,628 ) 13,915 (1,906 )net



Income before income 39,276 53,319 107,137 138,867 taxes

Income tax expense 9,686 13,194 37,504 35,075



Net income 29,590 40,125 69,633 103,792

Net income/(loss)attributable to the 1 116 (1,419 ) 539 noncontrolling interest

Net income attributable $ 29,589 $ 40,009 $ 71,052 $ 103,253 to the Company



Earnings per shareattributable to Company $ 0.92 $ 1.24 $ 2.20 $ 3.20 shareholders - Basic



Earnings per shareattributable to Company $ 0.91 $ 1.24 $ 2.20 $ 3.20 shareholders - Diluted



Shares of the Companyused in computing earnings per share:

Basic 32,337 32,306 32,326 32,293



Diluted 32,344 32,317 32,333 32,305



Dividends declared pershare, Class A and Class $ 0.19 $ 0.18 $ 0.57 $ 0.54 B

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

September 30, December 31, 2020 2019

ASSETS

Cash and cash equivalents $ 215,304 $ 195,540

Accounts receivable, net 210,326 218,271

Contract assets, net 104,853 79,070

Inventories 113,107 95,149

Income taxes prepaid and receivable 6,560 6,162

Prepaid expenses and other current assets 30,485 24,142

Total current assets $ 680,635 $ 618,334



Property, plant and equipment, net 442,469 466,462

Intangibles, net 48,281 52,892

Goodwill 184,287 180,934

Deferred income taxes 38,387 51,621

Noncurrent receivables, net 36,228 41,234

Other assets 60,405 62,891

Total assets $ 1,490,692 $ 1,474,368



LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable $ 46,740 $ 65,203

Accrued liabilities 119,221 125,885

Current maturities of long-term debt 12 20

Income taxes payable 12,936 11,611

Total current liabilities 178,909 202,719



Long-term debt 418,000 424,009

Other noncurrent liabilities 134,903 132,725

Deferred taxes and other liabilities 9,022 12,226

Total liabilities 740,834 771,679



SHAREHOLDERS' EQUITY

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

Class A Common Stock, par value $0.001 per share;authorized 100,000,000 shares; 39,113,172 issued 39 39 in 2020 and 39,098,792 in 2019

Class B Common Stock, par value $0.001 per share;authorized 25,000,000 shares; issued and 2 2 outstanding 1,617,998 in 2020 and 2019

Additional paid in capital 432,823 432,518

Retained earnings 749,678 698,496

Accumulated items of other comprehensive income:

Translation adjustments (119,814 ) (122,852 )

Pension and postretirement liability adjustments (49,436 ) (49,994 )

Derivative valuation adjustment (10,409 ) (3,135 )

Treasury stock (Class A), at cost; 8,394,022 (256,074 ) (256,391 )shares in 2020 and 8,408,770 shares in 2019

Total Company shareholders' equity 746,809 698,683

Noncontrolling interest 3,049 4,006

Total equity 749,858 702,689

Total liabilities and shareholders' equity $ 1,490,692 $ 1,474,368

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

OPERATING ACTIVITIES

Net income $ 29,590 $ 40,125 $ 69,633 $ 103,792

Adjustments to reconcilenet income to net cash provided by operatingactivities:

Depreciation 16,285 15,672 47,289 46,659

Amortization 1,997 1,582 7,017 6,305

Change in deferred taxes 3,074 13,548 12,434 12,802 and other liabilities

Provision for write-offof property, plant and 303 (5 ) 536 1,101 equipment

Non-cash interest (309 ) 151 (138 ) 454 (income)/expense

Compensation and benefitspaid or payable in Class 80 790 596 1,413 A Common Stock

Fair value adjustment on (64 ) - - - foreign currency option

Provision for creditlosses from uncollected (105 ) 332 1,664 1,136 receivables and contractassets

Foreign currencyremeasurement loss/(gain) 169 (1,049 ) 15,750 (2,656 )on intercompany loans



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

Accounts receivable (2,048 ) (10,282 ) 6,069 (8,276 )

Contract assets (7,923 ) (9,605 ) (27,932 ) (6,558 )

Inventories 4,585 (3,760 ) (20,043 ) (21,927 )

Prepaid expenses and (4,532 ) 131 (6,989 ) (4,057 )other current assets

Income taxes prepaid and (454 ) 304 (662 ) 662 receivable

Accounts payable (5,108 ) 363 (15,491 ) 7,837

Accrued liabilities 2,838 3,407 (8,063 ) (8,762 )

Income taxes payable 1,786 (5,611 ) 3,741 1,619

Noncurrent receivables (228 ) (339 ) 169 (679 )

Other noncurrent 111 (2,251 ) (413 ) (4,411 )liabilities

Other, net (388 ) (6 ) (1,474 ) 139

Net cash provided by 39,659 43,497 83,693 126,593 operating activities



INVESTING ACTIVITIES

Purchases of property, (9,349 ) (13,442 ) (31,320 ) (48,846 )plant and equipment

Purchased software (109 ) (257 ) (155 ) (306 )

Net cash used in (9,458 ) (13,699 ) (31,475 ) (49,152 )investing activities



FINANCING ACTIVITIES

Proceeds from borrowings - - 70,000 20,000

Principal payments on (17,005 ) (58,006 ) (76,016 ) (95,014 )debt

Principal payments on (335 ) (298 ) (6,798 ) (876 )finance lease liabilities

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

Proceeds from options 5 33 25 105 exercised

Dividends paid (6,144 ) (5,814 ) (18,424 ) (17,435 )

Net cash used in (23,479 ) (64,085 ) (31,703 ) (94,191 )financing activities



Effect of exchange ratechanges on cash and cash 4,545 (7,207 ) (751 ) (7,266 )equivalents



Increase/(decrease) in 11,267 (41,494 ) 19,764 (24,016 )cash and cash equivalents

Cash and cash equivalents 204,037 215,233 195,540 197,755 at beginning of period

Cash and cash equivalents $ 215,304 $ 173,739 $ 215,304 $ 173,739 at end of 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:

Q3 2020 % Change Net sales Increase due sales Net sales compared(in as to on same as to Q3thousands, reported, changes in basis reported, 2019,except Q3 currency as Q3 2019 Q3 excludingpercentages) 2020 translation currency 2019 currency rates translation rate rates effects

Machine $ 138,747 $ 1,837 $ 136,910 $ 151,324 (9.5 ) %Clothing

AlbanyEngineered 73,252 350 72,902 119,809 (39.2 ) %Composites

Consolidated $ 211,999 $ 2,187 $ 209,812 $ 271,133 (22.6 ) %total



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

Machine $ 428,782 $ (1,287 ) $ 430,069 $ 450,673 (4.6 ) %Clothing

AlbanyEngineered 244,971 (136 ) 245,107 345,781 (29.1 ) %Composites

Consolidated $ 673,753 $ (1,423 ) $ 675,176 $ 796,454 (15.2 ) %total

The following tables present Gross profit and Gross profit margin:

(in thousands, except Gross Gross profit Gross Gross profitpercentages) profit, margin, profit, margin, Q3 2020 Q3 2020 Q3 2019 Q3 2019

Machine Clothing $ 71,471 51.5 % $ 79,225 52.4 %

Albany Engineered 15,831 21.6 % 24,882 20.8 %Composites

Consolidated total $ 87,302 41.2 % $ 104,107 38.4 %



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

Machine Clothing $ 227,734 53.1 % $ 234,040 51.9 %

Albany Engineered 52,020 21.2 % 67,020 19.4 %Composites

Consolidated total $ 279,754 41.5 % $ 301,060 37.8 %



Adjusted EBITDA for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended September 30, 2020

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

Operating income/(loss) $ 45,699 $ 6,828 $ (13,754) $ 38,773 (GAAP)

Interest, taxes, other income - - (9,183) (9,183) /(expense)

Net income/(loss) (GAAP) 45,699 6,828 (22,937) 29,590

Interest expense, net - - 2,242 2,242

Income tax expense - - 9,686 9,686

Depreciation and amortization 5,074 12,236 972 18,282 expense

EBITDA (non-GAAP) 50,773 19,064 (10,037) 59,800

Restructuring expenses 384 358 (32) 710

Foreign currency revaluation 1,422 (226) (144) 1,052 (gains)/losses

Acquisition/integration costs - 291 - 291

Pre-tax (income) attributable - (22) - (22) to noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 52,579 $ 19,465 $ (10,213) $ 61,831

Adjusted EBITDA margin(Adjusted EBITDA divided by 37.9 % 26.6 % - 29.2 %Net sales-non-GAAP)





Three months ended September 30, 2019

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

Operating income/(loss) $ 51,906 $ 17,345 $ (13,573) $ 55,678 (GAAP)

Interest, taxes, other income - - (15,553) (15,553) /(expense)

Net income/(loss) (GAAP) 51,906 17,345 (29,126) 40,125

Interest expense, net - - 3,987 3,987

Income tax expense - - 13,194 13,194

Depreciation and amortization 5,149 11,087 1,018 17,254 expense

EBITDA (non-GAAP) 57,055 28,432 (10,927) 74,560

Restructuring expenses (211) (33) - (244)

Foreign currency revaluation (1,021) 341 (2,026) (2,706) (gains)/losses

Pre-tax (income) attributable - (161) - (161) to noncontrolling interest

Adjusted EBITDA (non-GAAP) $ 55,823 $ 28,579 $ (12,953) $ 71,449

Adjusted EBITDA margin(Adjusted EBITDA divided by 36.9 % 23.9 % - 26.4 %Net sales-non-GAAP)

Nine months ended September 30, 2020 Machine Albany Corporate Total(in thousands) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 149,418 $ 22,749 $ (41,073) $ 131,094 (GAAP)

Interest, taxes, other - - (61,461) (61,461) income/(expense)

Net income/(loss) (GAAP) 149,418 22,749 (102,534) 69,633

Interest expense, net - - 10,042 10,042

Income tax expense - - 37,504 37,504

Depreciation and 15,142 36,192 2,972 54,306 amortization expense

EBITDA (non-GAAP) 164,560 58,941 (52,016) 171,485

Restructuring expenses 1,414 2,606 169 4,189

Foreign currencyrevaluation (gains)/ (1,265) 501 14,705 13,941 losses

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

Acquisition/integration - 867 - 867 costs

Pre-tax lossattributable to - 1,412 - 1,412 noncontrolling interest

Adjusted EBITDA 164,709 64,327 (34,400) 194,636 (non-GAAP)

Adjusted EBITDA margin(Adjusted EBITDA divided 38.4 % 26.3 % - 28.9 %by Net sales-non-GAAP)





Nine months ended September 30, 2019

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

Operating income/(loss) $ 145,688 $ 44,598 $ (40,290) $ 149,996 (GAAP)

Interest, taxes, other - - (46,204) (46,204) income/(expense)

Net income/(loss) (GAAP) 145,688 44,598 (86,494) 103,792

Interest expense, net - - 13,035 13,035

Income tax expense - - 35,075 35,075

Depreciation and 16,674 33,059 3,231 52,964 amortization expense

EBITDA (non-GAAP) 162,362 77,657 (35,153) 204,866

Restructuring expenses 1,125 18 (4) 1,139

Foreign currencyrevaluation (gains)/ (734) 655 (3,716) (3,795) losses

Pre-tax (income)attributable to - (722) - (722) noncontrolling interest

Adjusted EBITDA $ 162,753 $ 77,608 $ (38,873) $ 201,488 (non-GAAP)

Adjusted EBITDA margin(Adjusted EBITDA divided 36.1 % 22.4 % - 25.3 %by Net sales-non-GAAP)



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

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

Restructuring expenses $ 710 $ 232 $ 478 $ 0.01

Foreign currency revaluation (gains)/ 1,052 526 526 0.02 losses

Acquisition/integration costs 291 87 204 0.01



Three months ended September 30, 2019 Pre tax Tax After tax Per share(in thousands, except per share Amounts Effect Effect Effectamounts)

Restructuring expenses $ (244 ) $ (67 ) $ (177 ) $ (0.01 )

Foreign currency revaluation (gains)/ (2,706 ) (744 ) (1,962 ) (0.06 )losses



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

Restructuring expenses $ 4,189 $ 1,377 $ 2,812 $ 0.08

Foreign currency revaluation (gains)/ 13,941 (483 ) 14,424 0.46 losses(a)

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

Acquisition/integration costs 867 259 608 0.03



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





Nine months ended September 30, 2019 Pre tax Tax After tax Per share(in thousands, except per share Amounts Effect Effect Effectamounts)

Restructuring expenses $ 1,139 $ 330 $ 809 $ 0.02

Foreign currency revaluation (gains)/ (3,795 ) (1,073 ) (2,722 ) (0.08 )losses



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

Three months ended Nine months ended September 30, September 30,

Per share amounts (Basic) 2020 2019 2020 2019

Earnings per share (GAAP) $ 0.92 $ 1.24 $ 2.20 $ 3.20

Adjustments, after tax:

Restructuring expenses 0.01 (0.01 ) 0.08 0.02

Foreign currency revaluation 0.02 (0.06 ) 0.46 (0.08 )(gains)/losses

Former CEO termination costs - - 0.06 -

Acquisition/integration costs 0.01 - 0.03 -

Adjusted Earnings per share $ 0.96 $ 1.17 $ 2.83 $ 3.14

The calculations of net debt are as follows:

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

Current maturities of $ 12 $ 17 $ 20 $ 20 long-term debt

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

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

Cash and cash 215,304 204,037 222,680 195,540 equivalents

Net debt $ 202,708 $ 230,980 $ 268,342 $ 228,489

The tables below provide a reconciliation of forecasted full-year 2020 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Forecast of Full Year 2020 Adjusted Machine Clothing AECEBITDA

(in millions) Low High Low High

Net income attributable to the Company $ 181 $ 189 $ 24 $ 32 (GAAP) (b)

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

Interest expense, net - - - -

Income tax expense - - - -

Depreciation and amortization 19 21 47 49

EBITDA (non-GAAP) 200 210 70 80

Restructuring expenses, net (c) 1 1 3 3

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) $ 200 $ 210 $ 75 $ 85

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



Forecast of Full Year 2020 Adjusted Total Company EBITDA

(in millions) Low High

Net income attributable to the Company $ 88 $ 91 (GAAP)

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

Interest expense, net 13 14

Income tax expense 47 48

Depreciation and amortization 70 75

EBITDA (non-GAAP) 217 227

Restructuring expenses, net (c) 4 4

Foreign currency revaluation (gains)/ 14 14 losses (c)

Former CEO termination costs 3 3

Acquisition/integration costs (c) 1 1

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

Adjusted EBITDA (non-GAAP) $ 240 $ 250



Total Company

Forecast of Full Year 2020 Earnings per Low High share (basic) (d)

Net income attributable to the Company $ 2.72 $ 2.82 (GAAP)

Restructuring expenses, net (c) 0.08 0.08

Foreign currency revaluation (gains)/ 0.46 0.46 losses (c)

Former CEO termination costs 0.06 0.06

Acquisition/integration costs (c) 0.03 0.03

Adjusted Earnings per share (non-GAAP) $ 3.35 $ 3.45



(c) Due to the uncertainty of these items, we are unable to forecast theseitems for 2020; the amount shown represents the value incurred through thethird quarter.

(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 in the MC segment, 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 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 2020 and in future years; expectations in 2020 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