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

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.

Contacts:

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

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