Albany International Reports Second-Quarter 2022 Results, Raises 2022 Guidance

Rhea-AI Summary

Albany International Corp. (NYSE:AIN) reported its Q2 2022 results, showcasing a revenue increase to $261 million, up 11.5% year-over-year, driven by growth in the Engineered Composites segment. The company's GAAP earnings per share (EPS) rose to $1.25, with adjusted EPS at $1.06, an increase from $1.01 last year. While gross profit decreased slightly to $100.6 million, operating income grew to $50.7 million. The company raised its full-year revenue guidance to between $970 million and $1.01 billion, despite acknowledging risks from inflation and supply chain issues.

Positive

• Revenue increased to $261 million, up 11.5% year-over-year.
• GAAP earnings per share rose to $1.25, up from $0.97 last year.
• Adjusted earnings per share grew to $1.06, compared to $1.01 in the previous year.
• Operating income increased to $50.7 million, up 1.5% from last year.
• Raised full-year revenue guidance to $970 million - $1.01 billion.

Negative

• Gross profit decreased to $100.6 million, down 1.1% from Q2 2021.
• Adjusted EBITDA fell by 4.9% to $66 million compared to the same quarter last year.

ROCHESTER, N.H.--(BUSINESS WIRE)-- Albany International Corp. (NYSE:AIN) today reported operating results for its second quarter of 2022, which ended June 30, 2022.

"We are pleased to report another quarter of excellent results,” said Albany International President and Chief Executive Officer, Bill Higgins. “Our revenue of $261 million was up on both a year-over-year and sequential basis driven by growth in our Engineered Composites segment from recovering commercial aircraft production and previously announced new business wins. Machine Clothing markets remained healthy, and the Machine Clothing segment delivered another strong performance in the quarter. Second quarter GAAP earnings per share was $1.25, which benefited from 20 cents of currency revaluation gains. Adjusted earnings per share was $1.06 up from $1.01 reported last year.

"As a result of the excellent performance to date, we are increasing our guidance for 2022. Of course, risks remain in 2022 in the form of ongoing inflation, supply chain and logistics challenges, and the indirect effects of the Russian invasion of Ukraine. Our updated outlook for the year incorporates these risks. Our team has done a great job managing these challenges and serving our customers which has enabled us to continue to win new business,” concluded Higgins.

For the second quarter ended June 30, 2022:

• Net sales were $261.4 million, up 11.5%, or 14.6% after adjusting for currency translation, when compared to the prior year, primarily due to year-over-year growth in sales related to the CH-53K and LEAP programs within the Engineered Composites segment.
• Gross profit of $100.6 million was 1.1% lower than the $101.7 million reported for the same period of 2021.
• Selling, Technical, General, and Research (STG&R) expenses were $49.9 million, compared to $51.8 million in the same period of 2021. The decrease was driven by the favorable effect of the revaluation of foreign currency in the Machine Clothing segment.
• Operating income was $50.7 million, compared to $50.0 million in the prior year, an increase of 1.5%.
• The effective tax rate was 26.9%, compared to 30.0% for the second quarter of 2021. This year-over-year decrease was mainly due to favorable discrete tax adjustments recognized in the second quarter of 2022.
• Net income attributable to the Company was $39.2 million ($1.25 per share), compared to $31.4 million ($0.97 per share) in the second quarter of 2021. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $1.06 per share in the second quarter of 2022, compared to $1.01 in the same period of last year.
• Adjusted EBITDA (a non-GAAP measure) was $66.0 million, compared to $69.4 million in the second quarter of 2021, a decrease of 4.9%.

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

Outlook for Full-Year 2022

The Company has updated its guidance for the full year 2022 as follows:

• Total company revenue of between $970 million and $1.01 billion;
• Effective income tax rate, including tax adjustments, of 28% to 30%;
• Total company depreciation and amortization of between $71 and $72 million;
• Capital expenditures in the range of $75 to $85 million;
• GAAP earnings per share of between $3.45 and $3.75;
• Adjusted earnings per share of between $3.30 and $3.60;
• Total company Adjusted EBITDA of $230 to $250 million;
• Machine Clothing revenue of $590 to $610 million;
• Machine Clothing Adjusted EBITDA of between $210 and $225 million;
• Albany Engineered Composites revenue of between $380 and $400 million; and
• Albany Engineered Composites Adjusted EBITDA of between $75 and $80 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,
		2022				2021				2022			2021
Net sales	$	261,369			$	234,519			$	505,538			$	456,880
Cost of goods sold		160,776				132,791				313,341				266,606
Gross profit		100,593				101,728				192,197				190,274
Selling, general, and administrative expenses		39,745				42,009				82,452				79,203
Technical and research expenses		10,161				9,762				20,050				19,243
Restructuring expenses, net		(28	)			(9	)			226				43
Operating income		50,715				49,966				89,469				91,785
Interest expense, net		3,933				4,218				7,542				7,787
Other (income)/expense, net		(7,045	)			862				(10,973	)			1,462
Income before income taxes		53,827				44,886				92,900				82,536
Income tax expense		14,458				13,446				25,456				23,486
Net income		39,369				31,440				67,444				59,050
Net income attributable to the noncontrolling interest		168				43				506				70
Net income attributable to the Company	$	39,201			$	31,397			$	66,938			$	58,980
Earnings per share attributable to Company shareholders - Basic	$	1.25			$	0.97			$	2.12			$	1.82
Earnings per share attributable to Company shareholders - Diluted	$	1.25			$	0.97			$	2.11			$	1.82
Shares of the Company used in computing earnings per share:
Basic		31,268				32,375				31,571				32,363
Diluted		31,378				32,422				31,668				32,411
Dividends declared per share, Class A and Class B	$	0.21			$	0.20			$	0.42			$	0.40

ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
	June 30, 2022				December 31, 2021
ASSETS
Cash and cash equivalents	$	320,870			$	302,036
Accounts receivable, net		199,489				191,985
Contract assets, net		135,907				112,546
Inventories		133,667				117,882
Income taxes prepaid and receivable		1,979				1,958
Prepaid expenses and other current assets		43,187				32,394
Total current assets	$	835,099			$	758,801
Property, plant and equipment, net		419,142				436,417
Intangibles, net		35,722				39,081
Goodwill		176,775				182,124
Deferred income taxes		17,894				26,376
Noncurrent receivables, net		29,843				31,849
Other assets		98,580				81,416
Total assets	$	1,613,055			$	1,556,064
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	70,430			$	68,954
Accrued liabilities		110,074				124,325
Current maturities of long-term debt		—				—
Income taxes payable		7,656				14,887
Total current liabilities		188,160				208,166
Long-term debt		485,000				350,000
Other noncurrent liabilities		107,049				107,794
Deferred taxes and other liabilities		11,064				12,499
Total liabilities		791,273				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; 40,784,934 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		439,450				436,996
Retained earnings		916,805				863,057
Accumulated items of other comprehensive income:
Translation adjustments		(147,271	)			(105,880	)
Pension and postretirement liability adjustments		(38,182	)			(38,490	)
Derivative valuation adjustment		11,753				(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		817,673				873,967
Noncontrolling interest		4,109				3,638
Total equity		821,782				877,605
Total liabilities and shareholders' equity	$	1,613,055			$	1,556,064

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
OPERATING ACTIVITIES
Net income	$	39,369			$	31,440			$	67,444			$	59,050
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		15,679				15,971				31,276				32,560
Amortization		1,433				2,280				3,598				4,573
Change in deferred taxes and other liabilities		804				974				2,596				5,416
Impairment of property, plant, equipment, and inventory		(206	)			353				2,662				538
Non-cash interest expense		279				265				561				310
Compensation and benefits paid or payable in Class A Common Stock		1,702				1,639				2,447				1,626
Provision for credit losses from uncollected receivables and contract assets		(532	)			27				1,326				(83	)
Foreign currency remeasurement (gain)/loss on intercompany loans		1,125				(723	)			(1,260	)			(1,031	)
Fair value adjustment on foreign currency options		596				1				(381	)			140
Changes in operating assets and liabilities that provided/(used) cash:
Accounts receivable		1,267				(129	)			(14,407	)			(3,365	)
Contract assets		(24,140	)			9,539				(23,868	)			25,643
Inventories		(13,586	)			(1,821	)			(21,135	)			(10,384	)
Prepaid expenses and other current assets		(2,498	)			(606	)			(4,474	)			(1,505	)
Income taxes prepaid and receivable		(1,889	)			1,156				(60	)			(309	)
Accounts payable		7,851				(4,580	)			7,476				4,608
Accrued liabilities		7,605				2,062				(11,745	)			(17,423	)
Income taxes payable		3,151				4,121				(7,739	)			(3,956	)
Noncurrent receivables		1,250				1,099				1,864				1,587
Other noncurrent liabilities		(1,338	)			(2,166	)			(3,252	)			(4,263	)
Other, net		5,182				1,051				4,784				1,908
Net cash provided by operating activities		43,104				61,953				37,713				95,640
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(19,940	)			(10,302	)			(35,659	)			(22,836	)
Purchased software		(331	)			(286	)			(366	)			(288	)
Net cash used in investing activities		(20,271	)			(10,588	)			(36,025	)			(23,124	)
FINANCING ACTIVITIES
Proceeds from borrowings		58,000				—				135,000				8,000
Principal payments on debt		—				(34,002	)			—				(56,009	)
Principal payments on finance lease liabilities		(264	)			(355	)			(654	)			(704	)
Purchase of Treasury shares		(42,550	)			—				(84,780	)			—
Taxes paid in lieu of share issuance		—				—				(770	)			(998	)
Proceeds from options exercised		—				21				7				149
Dividends paid		(6,657	)			(6,474	)			(13,399	)			(12,942	)
Net cash provided by/(used in) financing activities		8,529				(40,810	)			35,404				(62,504	)
Effect of exchange rate changes on cash and cash equivalents		(17,907	)			4,904				(18,258	)			2,002
Increase in cash and cash equivalents		13,455				15,459				18,834				12,014
Cash and cash equivalents at beginning of period		307,415				237,871				302,036				241,316
Cash and cash equivalents at end of period	$	320,870			$	253,330			$	320,870			$	253,330

The following table presents the reconciliation of Net sales to net sales excluding the effect of changes in currency translation rates, a non-GAAP measure:

(in thousands, except percentages)	Net sales as reported, Q2 2022		Decrease due to changes in currency translation rates			Q2 2022 sales on same basis as Q2 2021 currency translation rates		Net sales as reported, Q2 2021		% Change compared to Q2 2021, excluding currency rate effects
Machine Clothing	$	151,670	$	(5,447	)	$	157,117	$	159,921	(1.8	) %
Albany Engineered Composites		109,699		(1,994	)		111,693		74,598	49.7	%
Consolidated total	$	261,369	$	(7,441	)	$	268,810	$	234,519	14.6	%
(in thousands, except percentages)	Net sales as reported, YTD 2022		Decrease 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	$	305,732	$	(7,975	)	$	313,707	$	308,127	1.8	%
Albany Engineered Composites		199,806		(3,152	)		202,958		148,753	36.4	%
Consolidated total	$	505,538	$	(11,127	)	$	516,665	$	456,880	13.1	%

The following table presents Gross profit and Gross profit margin:

(in thousands, except percentages)	Gross profit, Q2 2022		Gross profit margin, Q2 2022		Gross profit, Q2 2021		Gross profit margin, Q2 2021
Machine Clothing	$	78,857	52.0	%	$	84,597	52.9	%
Albany Engineered Composites		21,736	19.8	%		17,131	23.0	%
Consolidated total	$	100,593	38.5	%	$	101,728	43.4	%

(in thousands, except percentages)	Gross profit, YTD 2022		Gross profit margin, YTD 2022		Gross profit, YTD 2021		Gross profit margin, YTD 2021
Machine Clothing	$	158,202	51.7	%	$	160,990	52.2	%
Albany Engineered Composites		33,995	17.0	%		29,284	19.7	%
Consolidated total	$	192,197	38.0	%	$	190,274	41.6	%

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, 2022
(in thousands)	Machine Clothing			Albany Engineered Composites			Corporate expenses and other			Total Company
Operating income/(loss) (GAAP)	$	54,861		$	9,535		$	(13,681	)	$	50,715
Interest, taxes, other income/(expense)		—			—			(11,346	)		(11,346	)
Net income/(loss) (GAAP)		54,861			9,535			(25,027	)		39,369
Interest expense, net		—			—			3,933			3,933
Income tax expense		—			—			14,458			14,458
Depreciation and amortization expense		4,880			11,450			782			17,112
EBITDA (non-GAAP)		59,741			20,985			(5,854	)		74,872
Restructuring expenses, net		(30	)		—			2			(28	)
Foreign currency revaluation (gains)/losses		(1,816	)		210			(7,271	)		(8,877	)
Acquisition/integration costs		—			269			—			269
Pre-tax (income) attributable to noncontrolling interest		—			(205	)		—			(205	)
Adjusted EBITDA (non-GAAP)	$	57,895		$	21,259		$	(13,123	)	$	66,031
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales) (non-GAAP)		38.2	%		19.4	%		—			25.3	%
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	%

Six months ended June 30, 2022
(in thousands)	Machine Clothing			Albany Engineered Composites			Corporate expenses and other			Total Company
Operating income/(loss) (GAAP)	$	104,505		$	10,730		$	(25,766	)	$	89,469
Interest, taxes, other income/(expense)		—			—			(22,025	)		(22,025	)
Net income/(loss) (GAAP)		104,505			10,730			(47,791	)		67,444
Interest expense, net		—			—			7,542			7,542
Income tax expense		—			—			25,456			25,456
Depreciation and amortization expense		9,803			23,489			1,582			34,874
EBITDA (non-GAAP)		114,308			34,219			(13,211	)		135,316
Restructuring expenses, net		213			—			13			226
Foreign currency revaluation (gains)/losses		(759	)		633			(11,011	)		(11,137	)
Dissolution of business relationships in Russia		1,787			—			781			2,568
Acquisition/integration costs		—			551			—			551
Pre-tax (income) attributable to noncontrolling interest		—			(457	)		—			(457	)
Adjusted EBITDA (non-GAAP)	$	115,549		$	34,946		$	(23,428	)	$	127,067
Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales-non-GAAP)		37.8	%		17.5	%		—			25.1	%
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	%

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

Three months ended June 30, 2022 (in thousands, except per share amounts	Pre tax Amounts			Tax Effect			After tax Effect			Per share Effect
Restructuring expenses, net	$	(28	)	$	(4	)	$	(24	)	$	0.00
Foreign currency revaluation (gains)/losses		(8,877	)		(2,492	)		(6,385	)		(0.20	)
Acquisition/integration costs		269			80			189			0.01
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
Six months ended June 30, 2022 (in thousands, except per share amounts)	Pre tax Amounts			Tax Effect			After tax Effect			Per share Effect
Restructuring expenses, net	$	226		$	69		$	157		$	0.01
Foreign currency revaluation (gains)/losses		(11,137	)		(3,135	)		(8,002	)		(0.25	)
Dissolution of business relationships in Russia		2,568			332			2,236			0.07
Acquisition/integration costs		551			164			387			0.02
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

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)		2022			2021		2022		2021
Earnings per share (GAAP)	$	1.25		$	0.97	$	2.12		$	1.82
Adjustments, after tax:
Restructuring expenses, net		—			—		0.01			—
Foreign currency revaluation (gains)/losses		(0.20	)		0.03		(0.25	)		0.04
Dissolution of business relationships in Russia		—			—		0.07			—
Acquisition/integration costs		0.01			0.01		0.02			0.02
Adjusted Earnings per share (non-GAAP)	$	1.06		$	1.01	$	1.97		$	1.88

The calculations of net debt are as follows:

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

The calculation of net leverage ratio as of June 30, 2022 is as follows:

Total Company
	Twelve months ended			Six months ended						Trailing twelve months ended
(in thousands)	December 31, 2021			June 30, 2021			June 30, 2022			June 30, 2022 (non-GAAP) (a)
Operating income/(loss) (GAAP)	$	178,011		$	91,785		$	89,469		$	175,695
Interest, taxes, other income/(expense)		(59,243	)		(32,735	)		(22,025	)		(48,533	)
Net income/(loss) (GAAP)		118,768			59,050			67,444			127,162
Interest expense, net		14,891			7,787			7,542			14,646
Income tax expense		47,163			23,486			25,456			49,133
Depreciation and amortization expense		74,255			37,133			34,874			71,996
EBITDA (non-GAAP)		255,077			127,456			135,316			262,937
Restructuring expenses, net		1,331			43			226			1,514
Foreign currency revaluation (gains)/losses		(1,442	)		2,088			(11,137	)		(14,667	)
Aviation Manufacturing Job Protection (AMJP) grant		(4,731	)		—			—			(4,731	)
Dissolution of business relationships in Russia		—			—			2,568			2,568
Acquisition/integration costs		1,166			614			551			1,103
Pre-tax (income) attributable to noncontrolling interest		(510	)		(111	)		(457	)		(856	)
Adjusted EBITDA (non-GAAP)	$	250,891		$	130,090		$	127,067		$	247,868

(in thousands, except for net leverage ratio)	June 30, 2022
Net debt (non-GAAP)	$	164,130
Trailing twelve months Adjusted EBITDA (non-GAAP)		247,868
Net leverage ratio (non-GAAP)		0.66

(a) Calculated as amounts incurred during the twelve months ended December 31, 2021, less those incurred during the six months ended June 30, 2021, plus those incurred during the six months ended June 30, 2022.

The tables below provide a reconciliation of forecasted full-year 2022 Adjusted EBITDA and Adjusted EPS (non-GAAP measures) to the comparable GAAP measures:

Forecast of Full Year 2022 Adjusted EBITDA	Machine Clothing							AEC
(in millions)	Low			High				Low		High
Net income attributable to the Company (GAAP) (b)	$	190		$	204			$	25	$	29
Income attributable to the noncontrolling interest		—			—				—		—
Interest expense, net		—			—				—		—
Income tax expense		—			—				—		—
Depreciation and amortization		19			20				48		49
EBITDA (non-GAAP)		209			224				73		78
Restructuring expenses, net (c)		—			—				—		—
Foreign currency revaluation (gains)/losses (c)		(1	)		(1	)			1		1
Acquisition/integration costs (c)		—			—				1		1
Dissolution of business relationships in Russia		2			2				—		—
Pre-tax (income)/loss attributable to non-controlling interest		—			—				—		—
Adjusted EBITDA (non-GAAP)	$	210		$	225			$	75	$	80
(b) Interest, Other income/expense and Income taxes are not allocated to the business segments
Forecast of Full Year 2022 Adjusted EBITDA	Total Company
(in millions)	Low			High
Net income attributable to the Company (GAAP)	$	109		$	118
Income attributable to the noncontrolling interest		—			—
Interest expense, net		14			15
Income tax expense		43			52
Depreciation and amortization		71			72
EBITDA (non-GAAP)		237			257
Restructuring expenses, net (c)		—			—
Foreign currency revaluation (gains)/losses (c)		(11	)		(11	)
Acquisition/integration costs (c)		1			1
Dissolution of business relationships in Russia		3			3
Pre-tax (income)/loss attributable to non-controlling interest		—			—
Adjusted EBITDA (non-GAAP)	$	230		$	250
	Total Company
Forecast of Full Year 2022 Earnings per share (basic) (d)	Low			High
Net income attributable to the Company (GAAP)	$	3.45		$	3.75
Restructuring expenses, net (c)		0.01			0.01
Foreign currency revaluation (gains)/losses (c)		(0.25	)		(0.25	)
Dissolution of business relationships in Russia		0.07			0.07
Acquisition/integration costs (c)		0.02			0.02
Adjusted Earnings per share (non-GAAP)	$	3.30		$	3.60
(c) Due to the uncertainty of these items, we are unable to forecast these items for 2022
(d) Calculations based on weighted average shares outstanding estimate of approximately 31.4 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; Net leverage ratio; 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.

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. The Company calculates net leverage ratio by subtracting cash and cash equivalents from total debt, and then dividing by trailing twelve months Adjusted EBITDA.

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/20220725005708/en/

John Hobbs

603-330-5897

john.hobbs@albint.com

Source: Albany International Corp.

FAQ

What were Albany International's Q2 2022 revenue results for AIN?

Albany International reported Q2 2022 revenue of $261 million, up 11.5% year-over-year.

What is the adjusted earnings per share (EPS) for Albany International for Q2 2022?

The adjusted EPS for Q2 2022 was $1.06, compared to $1.01 in Q2 2021.

How did Albany International's operating income change in Q2 2022?

Operating income rose to $50.7 million, an increase of 1.5% from the previous year.

What is Albany International's full-year revenue guidance for 2022?

The company has raised its full-year revenue guidance to between $970 million and $1.01 billion.

What risks did Albany International mention in their Q2 2022 report?

The company mentioned ongoing inflation, supply chain challenges, and the indirect effects of the Russian invasion of Ukraine as risks.