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

Rhea-AI Summary

Albany International Corp. (NYSE: AIN) reported strong second-quarter results for 2021, with revenues of $234.5 million, a 4% increase year-over-year. The Machine Clothing and Engineered Composites segments both performed well, despite challenges in the aerospace supply chain. The company raised its full-year guidance, projecting revenue between $880 and $910 million and adjusted EPS between $2.90 and $3.20. Net income was $31.4 million, or $0.97 per share, down slightly from $32.4 million, or $1.00 per share, a year earlier. The outlook reflects confidence in recovery and operational performance.

Positive

• Revenues of $234.5 million, up 4% year-over-year.
• Raised full-year 2021 guidance for revenue to between $880 and $910 million.
• Adjusted EPS guidance increased to between $2.90 and $3.20.
• Strong performance in both Machine Clothing and Engineered Composites segments.

Negative

• Gross profit decreased by 1% to $101.7 million compared to Q2 2020.
• Operating income declined by 5% to $50.0 million due to higher STG&R expenses.

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 June 30,								Six Months Ended 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 administrative expenses		42,009				38,543				79,203				78,649
Technical and research expenses		9,762				8,873				19,243				18,003
Restructuring expenses, net		(9		)		2,837				43				3,479
Operating income		49,966				52,727				91,785				92,321
Interest expense, net		4,218				3,823				7,787				7,800
Other expense/(income), net		862				1,091				1,462				16,660
Income before income taxes		44,886				47,813				82,536				67,861
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 noncontrolling interest		43				95				70				(1,420		)
Net income attributable to the Company		$	31,397			$	32,354			$	58,980			$	41,463
Earnings per share attributable to Company shareholders - Basic		$	0.97			$	1.00			$	1.82			$	1.28
Earnings per share attributable to Company shareholders - Diluted		$	0.97			$	1.00			$	1.82			$	1.28
Shares of the Company used 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 per share, Class A and Class B		$	0.20			$	0.19			$	0.40			$	0.38

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 in 2021 and 39,115,405 in 2020		39				39
Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 1,617,998 in 2021 and 2020		2				2
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 shares in 2021 and 8,391,011 in 2020		(255,768		)		(256,009		)
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 30,								Six Months Ended June 30,
		2021				2020				2021				2020
OPERATING ACTIVITIES
Net income		$	31,440			$	32,449			$	59,050			$	40,043
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		15,971				15,498				32,560				31,004
Amortization		2,280				2,456				4,573				5,020
Change in deferred taxes and other liabilities		974				3,543				5,416				9,360
Impairment of property, plant and equipment		353				36				538				233
Non-cash interest expense		265				20				310				171
Compensation and benefits paid or payable in Class A Common Stock		1,639				1,198				1,626				516
Provision for credit losses from uncollected receivables and contract assets		27				114				(83		)		1,769
Foreign currency remeasurement (gain)/loss on intercompany loans		(723		)		194				(1,031		)		15,581
Fair value adjustment on foreign currency options		1				—				140				64
Changes in operating assets 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 other current assets		(606		)		(301		)		(1,505		)		(2,457		)
Income taxes prepaid and receivable		1,156				29				(309		)		(208		)
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 liabilities		(2,166		)		(464		)		(4,263		)		(524		)
Other, net		1,051				(552		)		1,908				(1,086		)
Net cash provided by operating activities		61,953				50,672				95,640				44,034
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(10,302		)		(9,212		)		(22,836		)		(21,971		)
Purchased software		(286		)		—				(288		)		(46		)
Net cash used in investing activities		(10,588		)		(9,212		)		(23,124		)		(22,017		)
FINANCING ACTIVITIES
Proceeds from borrowings		—				—				8,000				70,000
Principal payments on debt		(34,002		)		(56,005		)		(56,009		)		(59,011		)
Principal payments on finance lease liabilities		(355		)		(329		)		(704		)		(6,463		)
Taxes paid in lieu of share issuance		—				—				(998		)		(490		)
Proceeds from options exercised		21				20				149				20
Dividends paid		(6,474		)		(6,141		)		(12,942		)		(12,280		)
Net cash used in financing activities		(40,810		)		(62,455		)		(62,504		)		(8,224		)
Effect of exchange rate changes on cash and cash equivalents		4,904				2,352				2,002				(5,296		)
Increase/(decrease) in cash and cash equivalents		15,459				(18,643		)		12,014				8,497
Cash and cash equivalents at beginning of period		237,871				222,680				241,316				195,540
Cash and cash equivalents at end of period		$	253,330			$	204,037			$	253,330			$	204,037

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, Q2 2021				Increase due to changes in currency translation rates				Q2 2021 sales on same basis as Q2 2020 currency translation rates				Net sales as reported, Q2 2020				% Change compared to Q2 2020, excluding currency rate effects
Machine Clothing		$	159,921			$	5,281			$	154,640			$	153,433			0.8	%
Albany Engineered Composites		74,598				1,088				73,510				72,557				1.3	%
Consolidated total		$	234,519			$	6,369			$	228,150			$	225,990			1.0	%
(in thousands, except percentages)		Net sales as reported, YTD 2021				Increase due to changes in currency translation rates				YTD 2021 sales on same basis as 2020 currency translation rates				Net sales as reported, YTD 2020				% Change compared to 2020, excluding currency rate effects
Machine Clothing		$	308,127			$	10,142			$	297,985			$	290,035			2.7	%
Albany Engineered Composites		148,753				2,267				146,486				171,719				(14.7)	%
Consolidated total		$	456,880			$	12,409			$	444,471			$	461,754			(3.7)	%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)		Gross profit, Q2 2021				Gross profit margin, Q2 2021			Gross profit, Q2 2020				Gross profit margin, Q2 2020
Machine Clothing		$	84,597			52.9	%		$	83,612			54.5	%
Albany Engineered Composites		17,131				23.0	%		19,368				26.7	%
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:

Three months ended June 30, 2021
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	55,902			$	7,164			$	(13,100	)		$	49,966
Interest, taxes, other income/(expense)		—				—				(18,526		)		(18,526		)
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 expense		5,138				12,194				919				18,251
EBITDA (non-GAAP)		61,040				19,358				(13,043		)		67,355
Restructuring expenses, net		10				(48		)		29				(9		)
Foreign currency revaluation (gains)/losses		1,908				(244		)		174				1,838
Acquisition/integration costs		—				300				—				300
Pre-tax (income) attributable to noncontrolling interest		—				(65		)		—				(65		)
Adjusted EBITDA (non-GAAP)		$	62,958			$	19,301			$	(12,840	)		$	69,419
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		39.4		%		25.9		%		—				29.6		%
Three months ended June 30, 2020
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	56,543			$	8,299			$	(12,115	)		$	52,727
Interest, taxes, other income/(expense)		—				—				(20,278		)		(20,278		)
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 expense		4,981				11,971				1,002				17,954
EBITDA (non-GAAP)		61,524				20,270				(12,204		)		69,590
Restructuring expenses, net		388				2,248				201				2,837
Foreign currency revaluation (gains)/losses		973				30				20				1,023
Acquisition/integration costs		—				278				—				278
Pre-tax (income) attributable to noncontrolling interest		—				(58		)		—				(58		)
Adjusted EBITDA (non-GAAP)		$	62,885			$	22,768			$	(11,983	)		$	73,670
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		41.0		%		31.4		%		—				32.6		%

Six months ended June 30, 2021
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	106,264			$	10,102			$	(24,581	)		$	91,785
Interest, taxes, other income/(expense)		—				—				(32,735		)		(32,735		)
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 amortization expense		10,258				25,061				1,814				37,133
EBITDA (non-GAAP)		116,522				35,163				(24,229		)		127,456
Restructuring expenses, net		(58		)		41				60				43
Foreign currency revaluation (gains)/losses		1,415				332				341				2,088
Acquisition/integration costs		—				614				—				614
Pre-tax (income) attributable to noncontrolling interest		—				(111		)		—				(111		)
Adjusted EBITDA (non-GAAP)		$	117,879			$	36,039			$	(23,828	)		$	130,090
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.3		%		24.2		%		—				28.5		%
Six months ended June 30, 2020
(in thousands)		Machine Clothing				Albany Engineered Composites				Corporate expenses and other				Total Company
Operating income/(loss) (GAAP)		$	103,718			$	15,922			$	(27,319	)		$	92,321
Interest, taxes, other income/(expense)		—				—				(52,278		)		(52,278		)
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 amortization expense		10,068				23,956				2,000				36,024
EBITDA (non-GAAP)		113,786				39,878				(41,979		)		111,685
Restructuring expenses, net		1,030				2,248				201				3,479
Foreign currency revaluation (gains)/losses		(2,688		)		727				14,850				12,889
Former CEO termination costs		—				—				2,742				2,742
Acquisition/integration costs		—				576				—				576
Pre-tax loss attributable to noncontrolling interest		—				1,434				—				1,434
Adjusted EBITDA (non-GAAP)		$	112,128			$	44,863			$	(24,186	)		$	132,805
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		38.7		%		26.1		%		—				28.8		%

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

Three months ended June 30, 2021 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	(9	)		$	(3	)		$	(6	)		$	0.00
Foreign currency revaluation (gains)/losses		1,838				781				1,057				0.03
Acquisition/integration costs		300				90				210				0.01
Three months ended June 30, 2020 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	2,837			$	953			$	1,884			$	0.06
Foreign currency revaluation (gains)/losses		1,023				536				487				0.02
Acquisition/integration costs		278				83				195				0.01
Six months ended June 30, 2021 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	43			$	12			$	31			$	0.00
Foreign currency revaluation (gains)/losses		2,088				646				1,442				0.04
Acquisition/integration costs		614				184				430				0.02
Six months ended June 30, 2020 (in thousands, except per share amounts)		Pre tax Amounts				Tax Effect				After tax Effect				Per share Effect
Restructuring expenses, net		$	3,479			$	1,145			$	2,334			$	0.07
Foreign currency revaluation (gains)/losses (a)		12,889				(1,009		)		13,898				0.44
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 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 June 30,								Six months ended 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 (gains)/losses		0.03				0.02				0.04				0.44
Former CEO termination costs		—				—				—				0.06
Acquisition/integration costs		0.01				0.01				0.02				0.02
Adjusted Earnings per share (non-GAAP)		$	1.01			$	1.09			$	1.88			$	1.87

The calculations of net debt are as follows:

(in thousands)		June 30, 2021				March 31, 2021				December 31, 2020
Current maturities of long-term debt		$	—			$	2			$	9
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 (GAAP) (b)		$	189			$	198			$	15			$	19
Income attributable to the noncontrolling interest		—				—				(1		)		(1		)
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)/losses (c)		1				1				—				—
Acquisition/integration costs (c)		—				—				1				1
Pre-tax (income)/loss attributable to non-controlling interest		—				—				1				1
Adjusted EBITDA (non-GAAP)		$	210			$	220			$	65			$	70
(b) Interest, Other income/expense and Income taxes are not allocated to the business segments
Forecast of Full Year 2021 Adjusted EBITDA		Total Company
(in millions)		Low				High
Net income attributable to the Company (GAAP)		$	92			$	102
Income attributable to the noncontrolling interest		(1		)		(1		)
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)/losses (c)		2				2
Acquisition/integration costs (c)		1				1
Pre-tax (income)/loss attributable to non-controlling interest		1				1
Adjusted EBITDA (non-GAAP)		$	225			$	240
		Total Company
Forecast of Full Year 2021 Earnings per share (basic) (d)		Low				High
Net income attributable to the Company (GAAP)		$	2.84			$	3.14
Restructuring expenses, net (c)		—				—
Foreign currency revaluation (gains)/losses (c)		0.04				0.04
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 these items for 2021. The amount shown represents the value incurred through the second 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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FAQ

What were Albany International's Q2 2021 revenues?

Albany International reported revenues of $234.5 million for Q2 2021.

How did Albany International's net income perform in Q2 2021?

Net income for Q2 2021 was $31.4 million, or $0.97 per share.

What is the updated financial guidance for Albany International in 2021?

Albany International raised its full-year revenue guidance to between $880 and $910 million.

What challenges did Albany International face in Q2 2021?

The company faced headwinds from ongoing destocking in the commercial aerospace supply chain.

What is Albany International's adjusted EPS for Q2 2021?

The adjusted EPS for Q2 2021 was $1.01, down from $1.09 in Q2 2020.