Business Wire | Jul 29, 2020 04:45PM EDT

Albany International Reports Second-Quarter 2020 Results

Jul. 29, 2020

ROCHESTER, N.H.--(BUSINESS WIRE)--Jul. 29, 2020--Albany International Corp. (NYSE:AIN) today reported operating results for its second quarter of 2020, which ended June 30, 2020.

"We had an outstanding quarter, despite the challenges of addressing this pandemic," said Albany International President and Chief Executive Officer, Bill Higgins. "Our top priority remains protecting the health and safety of our employees, and I am proud of how they performed. Across the company, our teams excelled by adapting safely to the challenging environment, driving operational improvements, doing a great job for customers, and delivering year-over-year gross margin expansion in both segments."

"In the months to come, we expect the economic impact of the global slowdown on our businesses may become more challenging. Our strong balance sheet and good cash flow conversion, however, enable us to continue to invest in our businesses with the flexibility required to address challenges and opportunities in the market," concluded Higgins.

For the second quarter ended June 30, 2020:

* Net sales were $226.0 million, down $48.0 million, or 17.5%, when compared to the prior year. Sales declined $46.4 million, or 39.0%, in the Engineered Composites segment driven by the temporary production halt on the LEAP program. * Gross profit of $103.0 million was 2.1% lower than the $105.2 million reported for the same period of 2019. * STG&R expenses were $47.4 million, compared to $50.1 million in the same period of 2019. Losses from the revaluation of foreign currency balances increased STG&R by $1.1 million in 2020, and by $0.3 million in 2019. * Operating income was $52.7 million, compared to $54.2 million in the prior year, a decrease of 2.8%, as lower gross profit and higher restructuring expenses were partially offset by lower STG&R expenses. * The effective tax rate was 32.1%, compared to 29.6% during the same period last year. The higher tax rate in 2020 was primarily caused by a higher share of our global profits in jurisdictions with higher tax rates. * Net income attributable to the Company was $32.4 million ($1.00 per share), compared to $34.1 million ($1.05 per share) in Q2 2019. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $1.09 per share in the second quarter of each year. * Adjusted EBITDA (a non-GAAP measure) was $73.7 million, compared to $72.4 million in Q2 2019, an increase of 1.7%.

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

"We delivered exceptional margins during the second quarter, helped by a net $7 million favorable adjustment to estimated long-term contract profitability in the Engineered Composites segment, and favorable currency and mix benefits in the Machine Clothing segment," said Albany International Chief Financial Officer and Treasurer, Stephen Nolan. "We are re-introducing guidance for 2020. We have worked closely with our aerospace and defense customers over the course of the second quarter to define our production plans for the second half of the year. Visibility has also improved somewhat for demand for our Machine Clothing products; as expected, we have seen some weakening of orders, driven by overall macroeconomic conditions, as we move into the second half of the year. This is reflected in our guidance. Across both segments, our guidance range reflects our best assessments of the likely impacts of the ongoing pandemic to our markets; however, additional risk does remain, should the macroeconomic impacts prove to be more severe than we are currently expecting."

Outlook for Full-Year 2020

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

* Total company revenue of between $870 and $890 million; * Effective income tax rate, including tax adjustments, of 36% to 38%; * 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 $2.26 and $2.51; * Adjusted earnings per share of between $2.85 and $3.10; * Total company Adjusted EBITDA of $220 to $235 million; * Machine Clothing revenue of $545 to $555 million; * Machine Clothing Adjusted EBITDA of between $190 and $200 million; * Engineered Composites revenue between $325 to $335 million; and * 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 Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net sales $ 225,990 $ 273,949 $ 461,754 $ 525,321

Cost of goods sold 123,010 168,767 269,302 328,368



Gross profit 102,980 105,182 192,452 196,953

Selling, general, and 38,543 40,816 78,649 81,761 administrative expenses

Technical and research 8,873 9,242 18,003 19,491 expenses

Restructuring expenses, 2,837 899 3,479 1,383 net



Operating income 52,727 54,225 92,321 94,318

Interest expense, net 3,823 4,631 7,800 9,048

Other expense/(income), 1,091 930 16,660 (278 )net



Income before income 47,813 48,664 67,861 85,548 taxes

Income tax expense 15,364 14,405 27,818 21,881



Net income 32,449 34,259 40,043 63,667

Net (loss)/incomeattributable to the 95 205 (1,420 ) 423 noncontrolling interest

Net income attributable $ 32,354 $ 34,054 $ 41,463 $ 63,244 to the Company



Earnings per shareattributable to Company $ 1.00 $ 1.05 $ 1.28 $ 1.96 shareholders - Basic



Earnings per shareattributable to Company $ 1.00 $ 1.05 $ 1.28 $ 1.96 shareholders - Diluted



Shares of the Companyused in computing earnings per share:

Basic 32,328 32,299 32,320 32,286



Diluted 32,336 32,311 32,328 32,298



Dividends declared pershare, Class A and Class $ 0.19 $ 0.18 $ 0.38 $ 0.36 B

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

June 30, 2020 December 31, 2019

ASSETS

Cash and cash equivalents $ 204,037 $ 195,540

Accounts receivable, net 202,612 218,271

Contract assets, net 96,092 79,070

Inventories 115,532 95,149

Income taxes prepaid and receivable 5,998 6,162

Prepaid expenses and other current assets 26,209 24,142

Total current assets $ 650,480 $ 618,334



Property, plant and equipment, net 443,046 466,462

Intangibles, net 49,706 52,892

Goodwill 181,302 180,934

Deferred income taxes 40,999 51,621

Noncurrent receivables, net 36,901 41,234

Other assets 59,526 62,891

Total assets $ 1,461,960 $ 1,474,368



LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable $ 50,181 $ 65,203

Accrued liabilities 115,458 125,885

Current maturities of long-term debt 17 20

Income taxes payable 11,546 11,611

Total current liabilities 177,202 202,719



Long-term debt 435,000 424,009

Other noncurrent liabilities 134,898 132,725

Deferred taxes and other liabilities 8,702 12,226

Total liabilities 755,802 771,679



SHAREHOLDERS' EQUITY

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

Class A Common Stock, par value $.001 per share;authorized 100,000,000 shares; 39,112,722 issued 39 39 in 2020 and 39,098,792 in 2019

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

Additional paid in capital 432,738 432,518

Retained earnings 726,233 698,496

Accumulated items of other comprehensive income:

Translation adjustments (139,635 ) (122,852 )

Pension and postretirement liability adjustments (48,962 ) (49,994 )

Derivative valuation adjustment (11,030 ) (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 703,311 698,683

Noncontrolling interest 2,847 4,006

Total equity 706,158 702,689

Total liabilities and shareholders' equity $ 1,461,960 $ 1,474,368

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

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

2020 2019 2020 2019

OPERATING ACTIVITIES

Net income $ 32,449 $ 34,259 $ 40,043 $ 63,667

Adjustments to reconcilenet income to net cash provided by operatingactivities:

Depreciation 15,498 15,345 31,004 30,987

Amortization 2,456 2,409 5,020 4,723

Change in deferred taxes 3,543 319 9,360 (746 )and other liabilities

Provision for write-offof property, plant and 36 720 233 1,106 equipment

Non-cash interest 20 152 171 303 expense

Compensation andbenefits paid or payable 1,198 1,170 516 623 in Class A Common Stock

Fair value adjustment on - - 64 - foreign currency option

Provision for creditlosses from uncollected 114 219 1,769 804 receivables and contractassets

Foreign currencyremeasurement loss/ 194 100 15,581 (1,607 )(gain) on intercompanyloans



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

Accounts receivable 11,511 14,215 8,117 2,006

Contract assets (11,169 ) 3,528 (20,009 ) 3,047

Inventories (4,878 ) (1,505 ) (24,628 ) (18,167 )

Prepaid expenses and (301 ) (1,384 ) (2,457 ) (4,188 )other current assets

Income taxes prepaid and 29 (316 ) (208 ) 358 receivable

Accounts payable (9,337 ) (14,276 ) (10,383 ) 7,474

Accrued liabilities 4,171 (1,074 ) (10,901 ) (12,169 )

Income taxes payable 5,526 5,724 1,955 7,230

Noncurrent receivables 628 (46 ) 397 (340 )

Other noncurrent (464 ) (481 ) (524 ) (2,160 )liabilities

Other, net (552 ) (548 ) (1,086 ) 145

Net cash provided by 50,672 58,530 44,034 83,096 operating activities



INVESTING ACTIVITIES

Purchases of property, (9,212 ) (14,606 ) (21,971 ) (35,404 )plant and equipment

Purchased software - (27 ) (46 ) (49 )

Net cash used in (9,212 ) (14,633 ) (22,017 ) (35,453 )investing activities



FINANCING ACTIVITIES

Proceeds from borrowings - - 70,000 20,000

Principal payments on (56,005 ) (9,004 ) (59,011 ) (37,008 )debt

Principal payments onfinance lease (329 ) (178 ) (6,463 ) (578 )liabilities

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

Proceeds from options 20 28 20 72 exercised

Dividends paid (6,141 ) (5,813 ) (12,280 ) (11,621 )

Net cash used in (62,455 ) (14,967 ) (8,224 ) (30,106 )financing activities



Effect of exchange ratechanges on cash and cash 2,352 (1,082 ) (5,296 ) (59 )equivalents



Increase/(decrease) incash and cash (18,643 ) 27,848 8,497 17,478 equivalents

Cash and cashequivalents at beginning 222,680 187,385 195,540 197,755 of period

Cash and cashequivalents at end of $ 204,037 $ 215,233 $ 204,037 $ 215,233 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:

Q2 2020 % Change Net sales Decrease sales Net sales compared(in thousands, as due to on same as to Q2except reported, changes in basis reported, 2019,percentages) Q2 currency as Q2 2019 Q2 excluding 2020 translation currency 2019 currency rates translation rate rates effects

Machine Clothing $ 153,433 $ 1,559 $ 154,992 $ 155,016 - %

Albany Engineered 72,557 26 72,583 118,933 (39.0) %Composites

Consolidated $ 225,990 $ 1,585 $ 227,575 $ 273,949 (16.9) %total



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

Machine Clothing $ 290,035 $ 3,124 $ 293,159 $ 299,349 (2.1) %

Albany Engineered 171,719 486 172,205 225,972 (23.8) %Composites

Consolidated $ 461,754 $ 3,610 $ 465,364 $ 525,321 (11.4) %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 2020 Q2 2020 Q2 2019 Q2 2019

Machine Clothing $ 83,612 54.5 % $ 80,287 51.8 %

Albany Engineered 19,368 26.7 % 24,895 20.9 %Composites

Consolidated total $ 102,980 45.6 % $ 105,182 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 $ 156,264 53.9 % $ 154,815 51.7 %

Albany Engineered 36,188 21.1 % 42,138 18.6 %Composites

Consolidated total $ 192,452 41.7 % $ 196,953 37.5 %



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

Three months ended June30, 2020

(in thousands, except Machine Albany Corporate Totalpercentages) Clothing Engineered expenses Company Composites and other

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

Interest, taxes, other - - (20,278 ) (20,278 )income/(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 4,981 11,971 1,002 17,954 amortization expense

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

Restructuring expenses 388 2,248 201 2,837

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

Acquisition/integration - 278 - 278 costs

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

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

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





Three months ended June30, 2019

(in thousands, except Machine Albany Corporate Totalpercentages) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 49,538 $ 17,732 $ (13,045 ) $ 54,225 (GAAP)

Interest, taxes, other - - (19,966 ) (19,966 )income/(expense)

Net income/(loss) (GAAP) 49,538 17,732 (33,011 ) 34,259

Interest expense, net - - 4,631 4,631

Income tax expense - - 14,405 14,405

Depreciation and 5,606 11,071 1,077 17,754 amortization expense

EBITDA (non-GAAP) 55,144 28,803 (12,898 ) 71,049

Restructuring expenses 935 (32 ) (4 ) 899

Foreign currencyrevaluation (gains)/ 317 79 345 741 losses

Pre-tax (income)attributable to - (272 ) - (272 )noncontrolling

Adjusted EBITDA $ 56,396 $ 28,578 $ (12,557 ) $ 72,417 (non-GAAP)

Adjusted EBITDA margin(Adjusted EBITDA divided 36.4 % 24.0 % - 26.4 %by Net sales-non-GAAP)

Six months ended June 30,2020

(in thousands, except Machine Albany Corporate Totalpercentages) Clothing Engineered expenses 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 1,030 2,248 201 3,479

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

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

Acquisition/integration - 576 - 576 costs

Pre-tax loss attributableto noncontrolling - 1,434 - 1,434 interest

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

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





Six months ended June 30,2019

(in thousands, except Machine Albany Corporate Totalpercentages) Clothing Engineered expenses Company Composites and other

Operating income/(loss) $ 93,781 $ 27,254 $ (26,717 ) $ 94,318 (GAAP)

Interest, taxes, other - - (30,651 ) (30,651 )income/(expense)

Net income/(loss) (GAAP) 93,781 27,254 (57,368 ) 63,667

Interest expense, net - - 9,048 9,048

Income tax expense - - 21,881 21,881

Depreciation and 11,525 21,973 2,212 35,710 amortization expense

EBITDA (non-GAAP) 105,306 49,227 (24,227 ) 130,306

Restructuring expenses 1,336 51 (4 ) 1,383

Foreign currencyrevaluation (gains)/ 286 314 (1,691 ) (1,091 )losses

Pre-tax (income)attributable to - (561 ) - (561 )noncontrolling interest

Adjusted EBITDA $ 106,928 $ 49,031 $ (25,922 ) $ 130,037 (non-GAAP)

Adjusted EBITDA margin(Adjusted EBITDA divided 35.7 % 21.7 % - 24.8 %by Net sales-non-GAAP)



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

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

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

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

Acquisition/integration costs 278 83 195 0.01



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

Restructuring expenses $ 899 $ 255 $ 644 $ 0.02

Foreign currency revaluation 741 210 531 0.02 (gains)/losses



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

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

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

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

Acquisition/integration costs 576 172 404 0.02



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

Restructuring expenses $ 1,383 $ 397 $ 986 $ 0.03

Foreign currency revaluation (1,091 ) (329 ) (762 ) (0.02 )(gains)/losses





(a) In Q1 2020, the company recorded losses of approximately $17 million in jurisdictions where it cannot record a tax benefit from the losses, which results 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) 2020 2019 2020 2019

Earnings per share (GAAP) $ 1.00 $ 1.05 $ 1.28 $ 1.96

Adjustments, after tax:

Restructuring expenses 0.06 0.02 0.07 0.03

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

Former CEO termination costs - - 0.06 -

Acquisition/integration costs 0.01 - 0.02 -

Adjusted Earnings per share $ 1.09 $ 1.09 $ 1.87 $ 1.97

The calculations of net debt are as follows:

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

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

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

Total debt 435,017 491,022 424,029

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

Net debt $ 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 EBITDA Machine Clothing AEC

(in millions) Low High Low High

Net income attributable to the Company $ 173 $ 180 $ 22 $ 30 (GAAP)

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

Interest expense, net - - - -

Income tax expense - - - -

Depreciation and amortization 19 22 49 51

EBITDA (non-GAAP) 192 202 70 80

Restructuring expenses, net (a) 1 1 2 2

Foreign currency revaluation (gains)/losses (3 ) (3 ) 1 1 (a)

Acquisition/integration costs (a) - - 1 1

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

Adjusted EBITDA (non-GAAP) $ 190 $ 200 $ 75 $ 85



Forecast of Full Year 2020 Adjusted EBITDA Total Company

(in millions) Low High

Net income attributable to the Company $ 73 $ 81 (GAAP)

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

Interest expense, net 14 15

Income tax expense 43 44

Depreciation and amortization 70 75

EBITDA (non-GAAP) 199 214

Restructuring expenses, net (a) 3 3

Foreign currency revaluation (gains)/losses 13 13 (a)

Former CEO termination costs 3 3

Acquisition/integration costs (a) 1 1

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

Adjusted EBITDA (non-GAAP) $ 220 $ 235



Total Company

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

Net income attributable to the Company $ 2.26 $ 2.51 (GAAP)

Restructuring expenses, net (a) 0.07 0.07

Foreign currency revaluation (gains)/losses 0.44 0.44 (a)

Former CEO termination costs 0.06 0.06

Acquisition/integration costs (a) 0.02 0.02

Adjusted Earnings per share (non-GAAP) $ 2.85 $ 3.10



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

(b) 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 approximately 4,600 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200729005810/en/

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