Albany International Reports Fourth-Quarter 2022 Results

Rhea-AI Summary

Albany International Corp. (NYSE: AIN) reported a strong Q4 2022 with net sales of $268.8 million, marking a 12% increase year-over-year, while full-year revenue reached over $1 billion. The Engineered Composites segment grew by 37%, driven by new business in the defense sector. However, operating income fell by 9.2% to $37.9 million, and net income attributable to the company decreased to $18.1 million ($0.58 per share), compared to $28.6 million ($0.89 per share) in Q4 2021. For 2023, the company anticipates revenue between $1.01 and $1.05 billion and adjusted EPS ranging from $3.10 to $3.60.

Positive

• Net sales grew 12% year-over-year, reaching $268.8 million.
• Engineered Composites segment revenue increased by 37%.
• Full-year revenue exceeded $1 billion.
• Adjusted EPS for Q4 2022 was $0.75, down only 12.8% from Q4 2021.

Negative

• Operating income decreased by 9.2% to $37.9 million.
• Net income attributable to the company fell to $18.1 million from $28.6 million in Q4 2021.
• Adjusted EBITDA declined 3.6% to $58.4 million compared to Q4 2021.

ROCHESTER, N.H.--(BUSINESS WIRE)-- Albany International Corp. (NYSE:AIN) today reported operating results for its fourth quarter of 2022, which ended December 31, 2022.

"We are pleased to report another strong quarter to close 2022," said Bill Higgins, President and Chief Executive Officer. "Our teams successfully addressed multiple challenges throughout the past year. We overcame supply chain challenges and managed inflationary pressures while serving customers, winning new business, and developing new products. Full year Revenue, Gross profit, Operating income, and Adjusted EBITDA all moved higher compared to 2021's results.

"Our Engineered Composites segment grew its top line 37%, the result of recovering LEAP production and new business wins, headlined by expanded content on the CH-53K helicopter program.

"Our Machine Clothing segment's execution and financial results continued to be impressive. The segment delivered excellent profitability in 2022 with Adjusted EBITDA margins exceeding 37% despite the inflationary environment."

For the fourth-quarter ended December 31, 2022:

• Net sales were $268.8 million, up 12.0%, or 15.5% after adjusting for currency translation, when compared to the prior year, driven by growth in the Engineered Composites segment.
• Gross profit of $97.1 million was 1.1% higher than the $96.1 million reported for the same period of 2021, mainly due to higher net sales in the lower margin Engineered Composites segment.
• Selling, Technical, General, and Research (STG&R) expenses were $59.3 million, compared to $53.2 million in the same period of 2021. The increase was driven by higher foreign currency revaluation expense, incentive compensation costs, and investments in sales and marketing activities.
• Operating income was $37.9 million, compared to $41.7 million in the prior year, a decrease of 9.2%.
• The effective tax rate for the quarter was 42.1% compared to a 27.3% effective tax rate in the fourth quarter of 2021, due to a shift in taxable income to higher tax rate jurisdictions and unfavorable effects of discrete items.
• Net income attributable to the Company was $18.1 million ($0.58 per share), compared to $28.6 million ($0.89 per share) in the fourth quarter of 2021. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.75 per share, compared to $0.86 per share for the same period of last year.
• Adjusted EBITDA (a non-GAAP measure) was $58.4 million, compared to $60.6 million in the fourth quarter of 2021, a decrease of 3.6%.

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

"We are in a solid position as we enter 2023 with a strong balance sheet and healthy order books," said Stephen Nolan, Chief Financial Officer. "We expect to sustain strong results consistent with our long-term goals for both of our businesses in the coming year."

Outlook for Full-Year 2023

Albany International announces its initial financial guidance for the full-year 2023:

• Total company revenue between $1.01 and $1.05 billion;
• Effective income tax rate, including tax adjustments, between 28% and 30%;
• Total company depreciation and amortization between $70 and $75 million;
• Capital expenditures in the range of $90 to $100 million;
• GAAP and Adjusted earnings per share between $3.10 and $3.60;
• Total company Adjusted EBITDA between $225 to $255 million;
• Machine Clothing revenue between $590 to $610 million;
• Machine Clothing Adjusted EBITDA between $205 and $225 million;
• Albany Engineered Composites (AEC) revenue between $420 to $440 million; and
• Albany Engineered Composites Adjusted EBITDA between $80 to $90 million.

ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
	Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
Net sales	$	268,786			$	239,918			$	1,034,887			$	929,240
Cost of goods sold		171,694				143,843				645,105				550,849
Gross profit		97,092				96,075				389,782				378,391
Selling, general, and administrative expenses		49,388				43,228				168,713				160,127
Technical and research expenses		9,957				10,006				39,941				38,922
Restructuring expenses, net		(162	)			1,101				106				1,331
Operating income		37,909				41,740				181,022				178,011
Interest expense, net		2,664				3,370				14,000				14,891
Pension settlement expense		—				—				49,128				—
Aviation Manufacturing Jobs Protection (AMJP) grant		—				—				—				(5,832	)
Other expense/(income), net		3,805				(1,194	)			(14,086	)			3,021
Income before income taxes		31,440				39,564				131,980				165,931
Income tax expense		13,199				10,788				35,472				47,163
Net income		18,241				28,776				96,508				118,768
Net income/(loss) attributable to the noncontrolling interest		111				140				746				290
Net income attributable to the Company	$	18,130			$	28,636			$	95,762			$	118,478
Earnings per share attributable to Company shareholders - Basic	$	0.58			$	0.89			$	3.06			$	3.66
Earnings per share attributable to Company shareholders - Diluted	$	0.58			$	0.88			$	3.04			$	3.65
Shares of the Company used in computing earnings per share:
Basic		31,111				32,285				31,339				32,348
Diluted		31,267				32,398				31,455				32,463
Dividends declared per share, Class A and Class B	$	0.25			$	0.21			$	0.88			$	0.81

ALBANY INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited)
	December 31, 2022				December 31, 2021
ASSETS
Cash and cash equivalents	$	291,776			$	302,036
Accounts receivable, net		200,018				191,985
Contract assets, net		148,695				112,546
Inventories		139,050				117,882
Income taxes prepaid and receivable		7,938				1,958
Prepaid expenses and other current assets		50,962				32,394
Total current assets	$	838,439			$	758,801
Property, plant and equipment, net		445,658				436,417
Intangibles, net		33,811				39,081
Goodwill		178,217				182,124
Deferred income taxes		15,196				26,376
Noncurrent receivables, net		27,913				31,849
Other assets		103,021				81,416
Total assets	$	1,642,255			$	1,556,064
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	69,707			$	68,954
Accrued liabilities		126,385				124,325
Current maturities of long-term debt		—				—
Income taxes payable		15,224				14,887
Total current liabilities		211,316				208,166
Long-term debt		439,000				350,000
Other noncurrent liabilities		108,758				107,794
Deferred taxes and other liabilities		15,638				12,499
Total liabilities		774,712				678,459
SHAREHOLDERS' EQUITY
Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued		—				—
Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; 40,785,434 issued in 2022 and 40,760,577 in 2021		41				41
Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; none issued and outstanding in 2022 and 104 in 2021		—				—
Additional paid in capital		441,540				436,996
Retained earnings		931,318				863,057
Accumulated items of other comprehensive income:
Translation adjustments		(146,851	)			(105,880	)
Pension and postretirement liability adjustments		(15,783	)			(38,490	)
Derivative valuation adjustment		17,707				(1,614	)
Treasury stock (Class A), at cost; 9,674,542 shares in 2022 and 8,665,090 in 2021		(364,923	)			(280,143	)
Total Company shareholders' equity		863,049				873,967
Noncontrolling interest		4,494				3,638
Total equity		867,543				877,605
Total liabilities and shareholders' equity	$	1,642,255			$	1,556,064

ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
	Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
OPERATING ACTIVITIES
Net income	$	18,241			$	28,776			$	96,508			$	118,768
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		15,616				16,645				62,480				65,130
Amortization		1,525				2,263				6,569				9,125
Change in deferred taxes and other liabilities		7,086				5,159				(8,496	)			12,181
Impairment of property, plant, equipment, and inventory		(802	)			293				1,808				856
Non-cash interest expense		278				282				1,118				875
Non-cash portion of pension settlement expense		—				—				42,657				—
Compensation and benefits paid or payable in Class A Common Stock		1,245				914				4,527				3,146
Provision/(recovery) for credit losses from uncollected receivables and contract assets		523				(141	)			1,408				(1,299	)
Foreign currency remeasurement (gain)/loss on intercompany loans		2,195				(2,599	)			(4,434	)			(3,150	)
Fair value adjustment on foreign currency options		(100	)			—				(509	)			169
Changes in operating assets and liabilities that provided/(used) cash:
Accounts receivable		5,959				6,558				(14,301	)			(7,734	)
Contract assets		767				3,276				(36,434	)			25,446
Inventories		354				(104	)			(24,541	)			(9,942	)
Prepaid expenses and other current assets		(1,401	)			(3,442	)			(4,134	)			(998	)
Income taxes prepaid and receivable		(3,826	)			1,536				(6,005	)			3,944
Accounts payable		3,491				5,180				8,572				9,492
Accrued liabilities		15,850				11,537				3,226				(774	)
Income taxes payable		(2,456	)			608				183				(477	)
Noncurrent receivables		935				1,523				3,911				4,355
Other noncurrent liabilities		(4,173	)			(8,131	)			(10,133	)			(13,713	)
Other, net		(400	)			(1,157	)			4,234				2,075
Net cash provided by operating activities		60,907				68,976				128,214				217,475
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(42,727	)			(21,039	)			(93,675	)			(52,793	)
Purchased software		(789	)			(512	)			(2,673	)			(906	)
Net cash used in investing activities		(43,516	)			(21,551	)			(96,348	)			(53,699	)
FINANCING ACTIVITIES
Proceeds from borrowings		17,000				—				162,000				8,000
Principal payments on debt		(25,000	)			—				(73,000	)			(56,009	)
Principal payments on finance lease liabilities		—				(371	)			(654	)			(1,438	)
Debt acquisition costs		—				—				—				—
Purchase of Treasury shares		—				(23,449	)			(84,780	)			(23,449	)
Taxes paid in lieu of share issuance		—				—				(770	)			(998	)
Proceeds from options exercised		—				—				17				153
Dividends paid		(6,533	)			(6,476	)			(26,465	)			(25,894	)
Net cash used in financing activities		(14,533	)			(30,296	)			(23,652	)			(99,635	)
Effect of exchange rate changes on cash and cash equivalents		12,436				(1,310	)			(18,474	)			(3,421	)
Increase/(decrease) in cash and cash equivalents		15,294				15,819				(10,260	)			60,720
Cash and cash equivalents at beginning of period		276,482				286,217				302,036				241,316
Cash and cash equivalents at end of period	$	291,776			$	302,036			$	291,776			$	302,036

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:

(in thousands, except percentages)	Net sales as reported, Q4 2022			(Decrease) due to changes in currency translation rates				Q4 2022 sales on same basis as Q4 2021 currency translation rates			Net sales as reported, Q4 2021			% Change compared to Q4 2021, excluding currency rate effects
Machine Clothing	$	150,340		$	(6,303	)		$	156,643		$	156,717		—	%
Albany Engineered Composites		118,446			(1,979	)			120,425			83,201		44.7	%
Consolidated total	$	268,786		$	(8,282	)		$	277,068		$	239,918		15.5	%
(in thousands, except percentages)	Net sales as reported, YTD 2022			Increase due to changes in currency translation rates				YTD 2022 sales on same basis as 2021 currency translation rates			Net sales as reported, YTD 2021			% Change compared to 2021, excluding currency rate effects
Machine Clothing	$	609,461		$	(20,848	)		$	630,309		$	619,015		1.8	%
Albany Engineered Composites		425,426			(7,610	)			433,036			310,225		39.6	%
Consolidated total	$	1,034,887		$	(28,458	)		$	1,063,345		$	929,240		14.4	%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)	Gross profit, Q4 2022			Gross profit margin, Q4 2022			Gross profit, Q4 2021			Gross profit margin, Q4 2021
Machine Clothing	$	74,851		49.8	%		$	82,030		52.3	%
Albany Engineered Composites		22,241		18.8	%			14,045		16.9	%
Consolidated total	$	97,092		36.1	%		$	96,075		40.0	%

(in thousands, except percentages)	Gross profit, YTD 2022			Gross profit margin, YTD 2022			Gross profit, YTD 2021			Gross profit margin, YTD 2021
Machine Clothing	$	312,285		51.2	%		$	322,457		52.1	%
Albany Engineered Composites		77,497		18.2	%			55,934		18.0	%
Consolidated total	$	389,782		37.7	%		$	378,391		40.7	%

A reconciliation from Net 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, 2022
(in thousands)	Machine Clothing			Albany Engineered Composites			Corporate expenses and other			Total Company
Net income/(loss) (GAAP)	$	44,462		$	10,891		$	(37,112	)	$	18,241
Interest expense, net		—			—			2,664			2,664
Income tax expense		—			—			13,199			13,199
Depreciation and amortization expense		4,767			11,410			964			17,141
EBITDA (non-GAAP)		49,229			22,301			(20,285	)		51,245
Restructuring expenses, net		(163	)		—			1			(162	)
Foreign currency revaluation (gains)/losses (a)		3,170			(83	)		7,663			10,750
Acquisition/integration costs		—			251			—			251
Dissolution of business relationships in Russia		(79	)		—			—			(79	)
IP address sales		—			—			(3,420	)		(3,420	)
Pre-tax (income) attributable to noncontrolling interest		—			(184	)		—			(184	)
Adjusted EBITDA (non-GAAP)	$	52,157		$	22,285		$	(16,041	)	$	58,401
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		34.7	%		18.8	%		—			21.7	%
Three months ended December 31, 2021
(in thousands)	Machine Clothing			Albany Engineered Composites			Corporate expenses and other			Total Company
Net income/(loss) (GAAP)	$	53,923		$	3,141		$	(28,288	)	$	28,776
Interest expense, net		—			—			3,370			3,370
Income tax expense		—			—			10,788			10,788
Depreciation and amortization expense		4,919			13,076			913			18,908
EBITDA (non-GAAP)		58,842			16,217			(13,217	)		61,842
Restructuring expenses, net		1,009			72			20			1,101
Foreign currency revaluation (gains)/losses (a)		(151	)		(313	)		(1,998	)		(2,462	)
Acquisition/integration costs		—			255			—			255
AMJP grant		—			138			—			138
Pre-tax (income) attributable to noncontrolling interest		—			(304	)		—			(304	)
Adjusted EBITDA (non-GAAP)	$	59,700		$	16,065		$	(15,195	)	$	60,570
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.1	%		19.3	%		—			25.2	%

Twelve months ended December 31, 2022
(in thousands)	Machine Clothing			Albany Engineered Composites			Corporate expenses and other			Total Company
Net income/(loss) (GAAP)	$	206,214		$	31,579		$	(141,285	)	$	96,508
Interest expense, net		—			—			14,000			14,000
Income tax expense		—			—			35,472			35,472
Depreciation and amortization expense		19,483			46,202			3,364			69,049
EBITDA (non-GAAP)		225,697			77,781			(88,449	)		215,029
Restructuring expenses, net		92			—			14			106
Foreign currency revaluation (gains)/losses (a)		(520	)		672			(9,981	)		(9,829	)
Dissolution of business relationships in Russia		1,494			—			781			2,275
Pension settlement expense		—			—			49,128			49,128
IP address sales		—			—			(3,420	)		(3,420	)
Acquisition/integration costs		—			1,057			—			1,057
Pre-tax (income) attributable to noncontrolling interest		—			(817	)		—			(817	)
Adjusted EBITDA (non-GAAP)	$	226,763		$	78,693		$	(51,927	)	$	253,529
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		37.2	%		18.5	%		—	%		24.5	%
Twelve months ended December 31, 2021
(in thousands)	Machine Clothing			Albany Engineered Composites			Corporate expenses and other			Total Company
Net income/(loss) (GAAP)	$	215,654		$	16,160		$	(113,046	)	$	118,768
Interest expense, net		—			—			14,891			14,891
Income tax expense		—			—			47,163			47,163
Depreciation and amortization expense		20,191			50,402			3,662			74,255
EBITDA (non-GAAP)		235,845			66,562			(47,330	)		255,077
Restructuring expenses, net		1,202			32			97			1,331
Foreign currency revaluation (gains)/losses (a)		(307	)		50			(1,185	)		(1,442	)
AMJP grant		—			1,101			(5,832	)		(4,731	)
Acquisition/integration costs		—			1,166			—			1,166
Pre-tax (income) attributable to noncontrolling interest		—			(510	)		—			(510	)
Adjusted EBITDA (non-GAAP)	$	236,740		$	68,401		$	(54,250	)	$	250,891
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.2	%		22.0	%		—			27.0	%

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

Three months ended December 31, 2022 (in thousands, except per share amounts)	Pre tax Amounts			Tax Effect			After tax Effect			Per share Effect
Restructuring expenses, net	$	(162	)	$	(41	)	$	(121	)	$	0.00
Foreign currency revaluation (gains)/losses (a)		10,750			3,247			7,503			0.24
Dissolution of business relationships in Russia		(79	)		(9	)		(70	)		0.00
IP address sales		(3,420	)		(872	)		(2,548	)		(0.08	)
Acquisition/integration costs		251			75			176			0.01
Three months ended December 31, 2021 (in thousands, except per share amounts)	Pre tax Amounts			Tax Effect			After tax Effect			Per share Effect
Restructuring expenses, net	$	1,101		$	332		$	769		$	0.02
Foreign currency revaluation (gains)/losses (a)		(2,462	)		(655	)		(1,807	)		(0.06	)
Acquisition/integration costs		255			76			179			0.01
AMJP grant		138			42			96			0.00
Year ended December 31, 2022 (in thousands, except per share amounts)	Pre tax Amounts			Tax Effect			After tax Effect			Per share Effect
Restructuring expenses, net	$	106		$	34		$	72		$	0.01
Foreign currency revaluation (gains)/losses (a)		(9,829	)		(2,582	)		(7,247	)		(0.23	)
Dissolution of business relationships in Russia		2,275			305			1,970			0.06
Pension settlement expense		49,128			11,947			37,181			1.20
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)		—			5,217			(5,217	)		(0.17	)
IP address sales		(3,420	)		(872	)		(2,548	)		(0.08	)
Acquisition/integration costs		1,057			316			741			0.04
Year ended December 31, 2021 (in thousands, except per share amounts)	Pre tax Amounts			Tax Effect			After tax Effect			Per share Effect
Restructuring expenses, net	$	1,331		$	399		$	932		$	0.02
Foreign currency revaluation (gains)/losses (a)		(1,442	)		(323	)		(1,119	)		(0.04	)
AMJP grant		(4,731	)		(1,404	)		(3,327	)		(0.11	)
Acquisition/integration costs		1,166			349			817			0.04

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

	Three months ended December 31,						Twelve months ended December 31,
Per share amounts (Basic)		2022			2021			2022			2021
Earnings per share (GAAP)	$	0.58		$	0.89		$	3.06		$	3.66
Adjustments, after tax:
Restructuring expenses, net		—			0.02			0.01			0.02
Foreign currency revaluation (gains)/losses (a)		0.24			(0.06	)		(0.23	)		(0.04	)
Dissolution of business relationships in Russia		—			—			0.06			—
Pension settlement charge		—			—			1.20			—
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)		—			—			(0.17	)		—
IP address sales		(0.08	)		—			(0.08	)		—
AMJP grant		—			—			—			(0.11	)
Acquisition/integration costs		0.01			0.01			0.04			0.04
Adjusted Earnings per share (non-GAAP)	$	0.75		$	0.86		$	3.89		$	3.57
(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date.
(b) Our Adjusted EPS excluded the benefit from the reclassification of stranded income tax effects caused by the TCJA associated with the US pension plan liability that was eliminated in September 2022, and would not be indicative of ongoing or expected future income tax rate at the Company. Management believes excluding pension settlement expense and its income tax impact, including the stranded income tax effects, from its Adjusted EBITDA and Adjusted EPS for the year ended December 31, 2022 would provide investors a transparent view and enhanced ability to better assess the Company's ongoing operational and financial performance.

The calculations of net debt are as follows:

(in thousands)	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
Current maturities of long-term debt	$	—	$	—	$	—	$	—	$	—
Long-term debt		439,000		447,000		485,000		427,000		350,000
Total debt		439,000		447,000		485,000		427,000		350,000
Cash and cash equivalents		291,776		276,482		320,870		307,415		302,036
Net debt (non GAAP)	$	147,224	$	170,518	$	164,130	$	119,585	$	47,964

The calculation of net leverage ratio as of December 31, 2022 is as follows:

Total Company
	Twelve months ended
(in thousands)	December 31, 2022
Net income/(loss) (GAAP)	$	96,508
Interest expense, net		14,000
Income tax expense		35,472
Depreciation and amortization expense		69,049
EBITDA (non-GAAP)		215,029
Restructuring expenses, net		106
Foreign currency revaluation (gains)/losses (a)		(9,829	)
Dissolution of business relationships in Russia		2,275
Pension settlement expense		49,128
IP address sales		(3,420	)
Acquisition/integration costs		1,057
Pre-tax (income) attributable to noncontrolling interest		(817	)
Adjusted EBITDA (non-GAAP)	$	253,529

(in thousands, except for net leverage ratio)	December 31, 2022
Net debt (non-GAAP)	$	147,224
Adjusted EBITDA (non-GAAP)		253,529
Net leverage ratio (non-GAAP)		0.58

The tables below provide a reconciliation of initial outlook for the full-year 2023 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Initial Outlook Full Year 2023 Adjusted EBITDA	Machine Clothing							AEC
(in millions)	Low			High				Low			High
Net income attributable to the Company (GAAP) (c)	$	185		$	205			$	32		$	41
Income attributable to the noncontrolling interest		—			—				(1	)		(1	)
Interest expense, net		—			—				—			—
Income tax expense		—			—				—			—
Depreciation and amortization		20			20				48			49
EBITDA (non-GAAP)		205			225				79			89
Restructuring expenses, net (c)		—			—				—			—
Foreign currency revaluation (gains)/losses (c)		—			—				—			—
Acquisition/integration costs (c)		—			—				—			—
Pre-tax (income)/loss attributable to non-controlling interest		—			—				1			1
Adjusted EBITDA (non-GAAP)	$	205		$	225			$	80		$	90
(c) Interest, Other income/expense and Income taxes are not allocated to the business segments
Initial Outlook Full Year 2023 Adjusted EBITDA	Total Company
(in millions)	Low			High
Net income attributable to the Company (GAAP) (c)	$	98		$	113
Income attributable to the noncontrolling interest		(1	)		(1	)
Interest expense, net		17			18
Income tax expense		40			49
Depreciation and amortization		70			75
EBITDA (non-GAAP)		224			254
Restructuring expenses, net (d)		—			—
Foreign currency revaluation (gains)/losses (d)		—			—
Acquisition/integration costs (d)		—			—
Pre-tax (income)/loss attributable to non-controlling interest		1			1
Adjusted EBITDA (non-GAAP)	$	225		$	255
	Total Company
Forecast of Full Year 2023 Earnings per share (basic) (e)	Low			High
Net income attributable to the Company (GAAP) (c)	$	3.10		$	3.60
Restructuring expenses, net (d)		—			—
Foreign currency revaluation (gains)/losses (d)		—			—
Acquisition/integration costs (d)		—			—
Adjusted Earnings per share (non-GAAP)	$	3.10		$	3.60
(d) Due to the uncertainty of these items, we are unable to forecast these items for 2023.
(e) Calculations based on estimated shares outstanding of approximately 31.2 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 4,200 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, that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net sales and percent change in net sales, excluding the impact of currency translation effects ; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted earnings per share (or Adjusted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net sales and change in Net sales, after currency effects are excluded, provides 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 (calculated as net income excluding interest, income taxes, depreciation and amortization), Adjusted EBITDA, and Adjusted EPS are performance measures that relate to the Company’s continuing operations. The Company defines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance. Such excluded costs or benefits do not consist of normal, recurring cash items necessary to generate revenues or operate our business. Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of net sales.

The Company defines Adjusted EPS as basic earnings per share (GAAP), adjusted by the after tax per share amount of costs or benefits not reflective of the Company’s ongoing or expected future operational performance. The income tax effects are calculated using the applicable statutory income tax rate of the jurisdictions where such costs or benefits were incurred or the effective tax rate applicable to total company results.

The Company’s Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted EPS may not be comparable to similarly titled measures of other companies.

Net debt aids investors in understanding the Company’s debt position if all available cash were applied to pay down indebtedness.

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Forward-Looking Statements

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

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic conditions, including inflationary cost pressures, as well as global events, which include but are not limited to, the ongoing COVID-19 pandemic and the Russia-Ukraine military conflicts; paper-industry trends and conditions during 2022 and in future years; expectations in 2022 and in future periods of sales, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net sales), Adjusted EPS, income, gross profit, gross margin, cash flows and other financial items in each of the Company’s businesses, and for the Company as a whole; the timing and impact of production and development programs in the Company’s AEC business segment and the sales growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company’s financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20230213005391/en/

John Hobbs

603-330-5897

john.hobbs@albint.com

Source: Albany International Corp.

FAQ

What were Albany International's Q4 2022 results?

Albany International reported Q4 2022 net sales of $268.8 million, a 12% increase from Q4 2021.

What is the expected revenue for Albany International in 2023?

Albany International expects total revenue between $1.01 billion and $1.05 billion for 2023.

What challenges did Albany International face in 2022?

The company faced supply chain challenges and inflationary pressures, but they managed to win new business and develop new products.

How did net income change for Albany International in Q4 2022?

Net income attributable to Albany International decreased to $18.1 million ($0.58 per share) from $28.6 million ($0.89 per share) in Q4 2021.