UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report: February 26 29, 2024

(Date of earliest event reported)


			ALBANY INTERNATIONAL CORP.
			(Exact name of registrant as specified in its charter)


Delaware	1-10026	14-0462060
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S Employer Identification No.)


216 Airport Drive Rochester, New Hampshire			03867
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code 603-330-5800


None
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common Stock, $0.001 par value per share

AIN

The New York Stock Exchange (NYSE)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).

☐ Emerging growth company

¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 25.02. ~~Results~~ ofCompensatory ~~Operations~~Arrangements ~~and~~of ~~Financial~~Certain ~~Condition~~Officers.

On February 26 23, 2024, ~~Albany~~the ~~International~~Board ~~issued~~of aDirectors ~~news~~approved ~~release~~the ~~reporting~~grant ~~fourth~~of ~~quarter~~2024 ~~2023~~Performance ~~financial~~Bonus ~~results.~~Awards ~~The~~and ~~Company~~Restricted ~~will~~Stock ~~host~~Unit aAwards ~~webcast~~under the Registrant’s 2023 Incentive Plan (the “2023 Plan”) to ~~discuss~~certain ~~earnings~~of atthe ~~9:00~~Registrant’s executives, including certain of the Registrant’s named executive officers (as defined by S-K Item 402(a)(3)).m. ~~Eastern~~Each ~~Time~~recipient onwas ~~Tuesday~~granted ~~February 27~~an Annual Performance Bonus Award, ~~2024.~~a ~~The~~Multi-Year ~~news~~Performance ~~release~~Bonus isAward, ~~furnished~~and asa ~~Exhibit~~Restricted ~~99.1~~Stock Unit Award pursuant to ~~this~~separate ~~report~~award agreements. These are the first awards under the 2023 Plan.

~~Item~~Annual ~~9.01.~~Performance ~~Financial~~Bonus ~~Statements and Exhibits.~~Award

For the Annual Performance Bonus Award, each recipient is provided the opportunity to earn a cash bonus. Each recipient, including the named executive officers specified below, was granted a Target Cash Amount. Each award entitles the recipient to receive an amount equal to from 0% to 200% of such target amounts, based upon the extent to which he or she attains certain performance goals during 2024. Success in achieving such goals will be determined during early 2025 by the Compensation Committee. Once such determination is made, the bonuses shall be paid in their entirety in March 2025.

A copy of the Form of the Annual Performance Bonus Award Agreement used for such awards is being filed with this report as Exhibit 10(n)(viii), and is incorporated by reference herein.

The target amounts for the named executive officers’ granted Annual Performance Bonus Awards were as follows:


Named Executive Officer			Target Cash Amount
Gunnar Kleveland			$927,000
Robert D. Starr			$410,970
Daniel A. Halftermeyer			$359,800
Gregory Harwell			$392,843
Joseph M. Gaug			$293,458

Performance goals for the award recipients, including the named executive officers, are established and measured against performance measurement metrics relating to one or more of the following: adjusted cash flow, adjusted EBITDA, safety, and compliance relative to controls testing and controls failures, or other personal metrics tied to the recipient’s specific job function. The foregoing might be, depending on the individual recipient, Company-wide in scope or limited to specific business segment or areas of responsibility.

Multi-Year Performance Bonus Award

For the Multi-Year Performance Bonus Award, each recipient is also provided the opportunity to earn a Share Bonus. Each recipient, including the named executive officers, was granted a Target Share Amount. Each award entitles the recipient to receive an amount equal to from 0% to 200% of such target amounts, based upon the extent to which he or she attains certain performance goals during the three-year period beginning January 1, 2024 and ending December 31, 2026. Success in achieving such goals will be determined during early 2027 by the Compensation Committee. Once such determination is made, the bonuses shall be paid in their entirety in March 2027.

A copy of the Form of the Multi-Year Performance Bonus Agreement used for such awards is being filed with this report as Exhibit 10(m)(xxi), and is incorporated by reference herein.

The target amounts for the named executive officers’ granted Multi-Year Performance Bonus Awards were as follows:


Named Executive Officer			Target Share Amount
Gunnar Kleveland			10,131 shares
Robert D. Starr			4,812 shares
Daniel A. Halftermeyer			4,494 shares
Gregory Harwell			4,007 shares
Joseph M. Gaug			2,714 shares

Performance goals for the award recipients, including the named executive officers, are established and measured against performance measurement metrics relating to adjusted EBITDA. The foregoing might be, depending on the individual recipient, Company-wide in scope or limited to specific business segment or areas of responsibility, or both.

Restricted Stock Unit Bonus Award

For the Restricted Stock Unit Award, each recipient, including the named executive officers, is granted share-settled restricted stock units. Under this award, the recipient is awarded a fixed number of number of shares which vests ratably over the three year period and is paid in Class A common stock upon vesting. There is no exercise price and no dividends are paid until the shares vest and are distributed to the recipient. The awards vest as to one-third of the awarded units on each of the first three anniversaries of the date of grant, but only if the holder is then employed by the Company or a subsidiary.

A copy of the Form of the Restricted Stock Unit Award Agreement used for such awards is being filed with this report as Exhibit 10(l)(xvi), and is incorporated by reference herein.

The target amounts for the named executive officers’ granted Restricted Stock Unit Awards were as follows:


Named Executive Officer			Target Share Amount
Gunnar Kleveland			10,131 shares
Robert D. Starr			4,812 shares
Daniel A. Halftermeyer			4,494 shares
Gregory Harwell			4,007 shares
Joseph M. Gaug			2,714 shares

Non-Employee Director Restricted Stock Unit Award

The 2023 Plan also provides the means to pay equity-based compensation to the Registrant’s directors. Under the 2023 Plan, the Registrant’s directors are permitted to defer the receipt of the stock portion of their annual retainer, in which case they will be granted restricted stock units which will vest in the future subject to a Non-Employee Director Restricted Stock Unit Award. Such awards would be granted at the time of the payment of the Stock retainer, generally in May.

A copy of the Form of the Non-Employee Director Restricted Stock Unit Award Agreement used for such awards is being filed with this report as Exhibit 10(l)(xvii), and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished herewith:

99.1 News release dated February 26, 2024 reporting fourth-quarter 2023 financial results.


10(n)(viii)			Form of 2024 Annual Performance Bonus Award Agreement
10(m)(xxi)			Form of 2024 Multi-Year Performance Bonus Award Agreement
10(l)(xvi)			Form of 2024 Restricted Stock Unit Award Agreement
10(l)(xvii)			Form of 2024 Non-Employee Director Restricted Stock Unit Award Agreement

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



			ALBANY INTERNATIONAL CORP.

			By:			/s/ Robert D. Starr

			Name:			Robert D. Starr
			Title:			Executive Vice President and Chief Financial Officer
						(Principal Financial Officer)

Date: February 2629, 2024

EXHIBIT INDEX

Exhibit No.			Description
99.1			News release dated February 26, 2024 reporting fourth-quarter 2023 financial results.
10(n)(viii)			Form of 2024 Annual Performance Bonus Award Agreement
10(m)(xxi)			Form of 2024 Multi-Year Performance Bonus Agreement
10(l)(xvi)			Form of 2024 Restricted Stock Unit Award Agreement
10(l)(xvii)			Form of 2024 Non-Employee Director Restricted Stock Unit Award Agreement
104			Inline XBRL cover page.

Exhibit 99.1

Albany International Reports Fourth-Quarter 2023 Results

ROCHESTER, N.H.— (BUSINESS WIRE) -- February 26, 2024 — Albany International Corp. (NYSE:AIN) today reported operating results for its full year and fourth quarter of 2023, which ended December 31, 2023.

"In 2023, our business remained focused on operational execution and delivered outstanding financial performance," said Gunnar Kleveland, President and Chief Executive Officer. "I am pleased to report record revenues of $1.15 billion in 2023, up 11% from last year. GAAP EPS grew in the mid-teens, and Adjusted EPS of $4.06, was up 4.9% from last year. Importantly the company delivered 2023 free cash flow of $64 million, up significantly from the $32 million generated in 2022.

"Fourth quarter results were particularly strong with outstanding contributions from both of our business segments," continued Kleveland. "Our first full quarter of Heimbach integration is complete, and we are on track to deliver on the promise of that acquisition. Meanwhile, our core Machine Clothing operations grew fourth quarter revenue and expanded profit margins despite soft business conditions in Europe. The Engineered Composites segment continues to grow. We have completed another year of growth on our commercial programs, and recent program wins were also important drivers of year-over-year revenue and profit growth in the business. We are well positioned for another strong year in 2024."

For the fourth-quarter ended December 31, 2023:

•Net revenues were $323.6 million, up 20.4%, or 19.6% after adjusting for currency translation, when compared to the prior year, primarily driven by Heimbach's contribution during the fourth quarter and growth in the Engineered Composites segment.

•Gross profit of $119.9 million was 23.5% higher than the $97.1 million reported for the same period of 2022, mainly due to higher net revenues from the Machine Clothing segment due to the addition of Heimbach and higher net revenues from new programs and commercial programs in the Engineered Composites segment.

•Selling, General, and Administrative expenses were $67.7 million, compared to $49.4 million in the same period of 2022. The increase was due to the addition of Heimbach.

•Operating income was $41.8 million, compared to $37.9 million in the prior year, an increase of 10.2%.

•The effective tax rate for the quarter was 22.6% compared to a 42.0% effective tax rate in the fourth quarter of 2022. Favorable discrete tax items in 2023 vs. unfavorable discrete tax items in 2022 and a shift in taxable income to lower-rate jurisdictions resulted in a lower effective tax rate for the fourth quarter of 2023.

•Net income attributable to the Company was $30.5 million ($0.97 per share), compared to $18.1 million ($0.58 per share) in the fourth quarter of 2022. Adjusted Diluted earnings per share (or Adjusted EPS, a non-GAAP measure) was $1.22 per share, compared to $0.75 per share for the same period of last year.

•Adjusted EBITDA (a non-GAAP measure) was $75.0 million, compared to $58.4 million in the fourth quarter of 2022, an increase of 28.5%.

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

"We are on sound financial footing as we enter 2024," said Robert Starr, Chief Financial Officer. "Our businesses continue to deliver outstanding execution that will help sustain solid results and generate healthy cash flow this year. We will continue to invest thoughtfully to drive long-term growth."

Outlook for the Full-Year 2024

Albany International's initial financial guidance for the full-year 2024:

•Total company revenue between $1.26 and $1.33 billion;

•Effective income tax rate between 29% and 31%;

•Capital expenditures in the range of $90 to $95 million;

•Diluted earnings per share between $3.55 and $4.05.

This includes:

▪Higher pension expense due to the expiration of the prior service cost benefit (approximately $0.09 per share);

▪Higher Depreciation and Amortization due to the recording of Heimbach-acquired assets at fair value (approximately $0.08 per share); and

• Higher interest expense resulting from the termination of interest rate swaps in the fourth quarter of 2024 (approximately $0.06 per share, assuming the current interest rate environment).

•Total company Adjusted EBITDA between $260 to $290 million;

•Machine Clothing revenue between $760 to $790 million;

•Machine Clothing Adjusted EBITDA between $230 and $250 million;

•Albany Engineered Composites (AEC) revenue between $500 to $540 million; and

•Albany Engineered Composites Adjusted EBITDA between $97 to $107 million.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

	Three Months EndedDecember 31,				Twelve Months EndedDecember 31,
	2023		2022		2023		2022
Net revenues	$	323,584	$	268,786	$	1,147,909	$	1,034,887
Cost of goods sold	203,723		171,694		724,191		645,105
Gross profit	119,861		97,092		423,718		389,782
Selling, general, and administrative expenses	67,701		49,388		214,915		168,713
Technical and research expenses	10,324		9,957		40,627		39,941
Restructuring expenses, net	55		(162)		282		106
Operating income	41,781		37,909		167,894		181,022
Interest expense, net	3,552		2,664		13,601		14,000
Pension settlement expense	—		—		—		49,128
Other (income)/expense, net	(1,253)		3,805		(6,163)		(14,086)
Income before income taxes	39,482		31,440		160,456		131,980
Income tax expense	8,938		13,199		48,846		35,472
Net income	30,544		18,241		111,610		96,508
Net income attributable to the noncontrolling interest	94		111		490		746
Net income attributable to the Company	$	30,450	$	18,130	$	111,120	$	95,762
Earnings per share attributable to Company shareholders - Basic	$	0.98	$	0.58	$	3.56	$	3.06
Earnings per share attributable to Company shareholders - Diluted	$	0.97	$	0.58	$	3.55	$	3.04
Shares of the Company used in computing earnings per share:
Basic	31,195		31,111		31,171		31,339
Diluted	31,332		31,267		31,276		31,455
Dividends declared per share, Class A	$	0.26	$	0.25	$	1.01	$	0.88

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	December 31, 2023		December 31, 2022
ASSETS
Cash and cash equivalents	$	173,420	$	291,776
Accounts receivable, net	287,781		200,018
Contract assets, net	182,281		148,695
Inventories	169,567		139,050
Income taxes prepaid and receivable	11,043		7,938
Prepaid expenses and other current assets	53,872		50,962
Total current assets	$	877,964	$	838,439
Property, plant and equipment, net	601,989		445,658
Intangibles, net	44,646		33,811
Goodwill	180,181		178,217
Deferred income taxes	22,941		15,196
Noncurrent receivables, net	4,392		27,913
Other assets	102,901		103,021
Total assets	$	1,835,014	$	1,642,255
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	87,104	$	69,707
Accrued liabilities	142,988		126,385
Current maturities of long-term debt	4,218		—
Income taxes payable	14,369		15,224
Total current liabilities	248,679		211,316
Long-term debt	452,667		439,000
Other noncurrent liabilities	139,385		108,758
Deferred taxes and other liabilities	26,963		15,638
Total liabilities	867,694		774,712
SHAREHOLDERS' EQUITY
Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued	—		—
Class A Common Stock, par value $0.001 per share; authorized 100,000,000 shares; 40,856,910 issued in 2023 and 40,785,434 in 2022	41		41
Additional paid in capital	448,218		441,540
Retained earnings	1,010,942		931,318
Accumulated items of other comprehensive income:
Translation adjustments	(124,901)		(146,851)
Pension and postretirement liability adjustments	(17,346)		(15,783)
Derivative valuation adjustment	9,079		17,707
Treasury stock (Class A), at cost; 9,661,845 shares in 2023 and 9,674,542 in 2022	(364,665)		(364,923)
Total Company shareholders' equity	961,368		863,049
Noncontrolling interest	5,952		4,494
Total equity	967,320		867,543
Total liabilities and shareholders' equity	$	1,835,014	$	1,642,255

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Twelve Months Ended December 31,
		2023		2022
OPERATING ACTIVITIES
Net income		$	111,610	$	96,508
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		70,374		62,480
Amortization		6,359		6,569
Change in deferred taxes and other liabilities		(2,046)		(8,496)
Impairment of property, plant, equipment, and inventory		1,773		1,808
Non-cash interest expense		1,404		1,118
Non-cash portion of pension settlement expense		—		42,657
Compensation and benefits paid or payable in Class A Common Stock		6,936		4,527
Provision/(recovery) for credit losses from uncollected receivables and contract assets		640		1,408
Foreign currency remeasurement (gain)/loss on intercompany loans		(2,831)		(4,434)
Fair value adjustment on foreign currency options		(139)		(509)
Changes in operating assets and liabilities that provided/(used) cash, net of impact of business acquisition:
Accounts receivable		(11,038)		(14,301)
Contract assets		(32,156)		(36,434)
Inventories		15,093		(24,541)
Prepaid expenses and other current assets		1,530		(4,134)
Income taxes prepaid and receivable		(2,897)		(6,005)
Accounts payable		(5,672)		8,572
Accrued liabilities		(10,441)		3,226
Income taxes payable		(1,988)		183
Noncurrent receivables		3,723		3,911
Other noncurrent liabilities		(9,783)		(10,133)
Other, net		7,605		4,234
Net cash provided by operating activities		148,056		128,214
INVESTING ACTIVITIES
Purchase of business, net of cash acquired		(133,470)		—
Purchases of property, plant and equipment		(83,560)		(93,675)
Purchased software		(869)		(2,673)
Net cash used in investing activities		(217,899)		(96,348)
FINANCING ACTIVITIES
Proceeds from borrowings		78,040		162,000
Principal payments on debt		(92,274)		(73,000)
Principal payments on finance lease liabilities		—		(654)
Debt acquisition costs		(4,108)		—
Purchase of Treasury shares		—		(84,780)
Taxes paid in lieu of share issuance		(3,136)		(770)
Proceeds from options exercised		—		17
Dividends paid		(31,163)		(26,465)
Net cash used in financing activities		(52,641)		(23,652)
Effect of exchange rate changes on cash and cash equivalents		4,128		(18,474)
Increase/(decrease) in cash and cash equivalents		(118,356)		(10,260)
Cash and cash equivalents at beginning of period		291,776		302,036
Cash and cash equivalents at end of period		$	173,420	$	291,776

Financial tables and reconciliation of non-GAAP measures to comparable GAAP measures

The following tables present Net revenues and the effect of changes in currency translation rates:

(in thousands, except percentages)	Net revenues as reported, Q4 2023		Increase due to changes in currency translation rates		Q4 2023 revenues on same basis as Q4 2022 currency translation rates		Net revenues as reported, Q4 2022		% Change compared to Q4 2022, excluding currency rate effects
Machine Clothing	$	191,741	$	1,088	$	190,653	$	150,340	26.8	%
Albany Engineered Composites	131,843		896		130,947		118,446		10.6	%
Consolidated total	$	323,584	$	1,984	$	321,600	$	268,786	19.6	%
(in thousands, except percentages)	Net revenues as reported, YTD 2023		Decrease/(increase) due to changes in currency translation rates		YTD 2023 revenues on same basis as 2022 currency translation rates		Net revenues as reported, YTD 2022		% Change compared to 2022, excluding currency rate effects
Machine Clothing	$	670,768	$	(2,596)	$	673,364	$	609,461	10.5	%
Albany Engineered Composites	477,141		1,747		475,394		425,426		11.7	%
Consolidated total	$	1,147,909	$	(849)	$	1,148,758	$	1,034,887	11.0	%

The following tables present Gross profit and Gross profit margin:

(in thousands, except percentages)	Gross profit, Q4 2023		Gross profit margin, Q4 2023		Gross profit, Q4 2022		Gross profit margin, Q4 2022
Machine Clothing	$	93,527	48.8	%	$	74,851	49.8	%
Albany Engineered Composites	26,334		20.0	%	22,241		18.8	%
Consolidated total	$	119,861	37.0	%	$	97,092	36.1	%

(in thousands, except percentages)	Gross profit, YTD 2023		Gross profit margin, YTD 2023		Gross profit, YTD 2022		Gross profit margin, YTD 2022
Machine Clothing	$	331,558	49.4	%	$	312,285	51.2	%
Albany Engineered Composites	92,160		19.3	%	77,497		18.2	%
Consolidated total	$	423,718	36.9	%	$	389,782	37.7	%

A reconciliation from Net income/(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the current-year and comparable prior-year periods has been calculated as follows:

Three months ended December 31, 2023
(in thousands)	Machine Clothing			Albany EngineeredComposites			Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	45,978		$	14,127		$	(29,561)	$	30,544
Interest expense, net	—			—			3,552		3,552
Income tax expense	—			—			8,938		8,938
Depreciation and amortization expense	8,209			12,784			962		21,955
EBITDA (non-GAAP)	54,187			26,911			(16,109)		64,989
Restructuring expenses, net	55			—			—		55
Foreign currency revaluation (gains)/losses (a)	2,247			44			725		3,016
CEO transition expenses	—			—			667		667
Inventory step-up impacting Cost of goods sold	4,110			—			—		4,110
Acquisition/integration costs	984			268			1,124		2,376
Pre-tax (income) attributable to noncontrolling interest	(24)			(167)			—		(191)
Adjusted EBITDA (non-GAAP)	$	61,559		$	27,056		$	(13,593)	$	75,022
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)	32.1		%	20.5		%	—		23.2		%
Three months ended December 31, 2022
(in thousands)	Machine Clothing			Albany EngineeredComposites			Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	44,462		$	10,891		$	(37,112)	$	18,241
Interest expense, net	—			—			2,664		2,664
Income tax expense	—			—			13,199		13,199
Depreciation and amortization expense	4,767			11,410			964		17,141
EBITDA (non-GAAP)	49,229			22,301			(20,285)		51,245
Restructuring expenses, net	(163)			—			1		(162)
Foreign currency revaluation (gains)/losses (a)	3,170			(83)			7,663		10,750
Acquisition/integration costs	—			251			—		251
Dissolution of business relationships in Russia	(79)			—			—		(79)
IP address sales	—			—			(3,420)		(3,420)
Pre-tax (income) attributable to noncontrolling interest	—			(184)			—		(184)
Adjusted EBITDA (non-GAAP)	$	52,157		$	22,285		$	(16,041)	$	58,401
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)	34.7		%	18.8		%	—		21.7		%

Twelve months ended December 31, 2023
(in thousands)	Machine Clothing			Albany EngineeredComposites			Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	199,378		$	41,587		$	(129,355)	$	111,610
Interest expense, net	—			—			13,601		13,601
Income tax expense	—			—			48,846		48,846
Depreciation and amortization expense	23,891			49,030			3,812		76,733
EBITDA (non-GAAP)	223,269			90,617			(63,096)		250,790
Restructuring expenses, net	282			—			—		282
Foreign currency revaluation (gains)/losses (a)	4,117			63			(2,884)		1,296
CEO transition expenses	—			—			2,719		2,719
Inventory step-up impacting Cost of goods sold	5,480			—			—		5,480
Acquisition/integration costs	984			1,081			3,129		5,194
Pre-tax (income) attributable to noncontrolling interest	(24)			(641)			—		(665)
Adjusted EBITDA (non-GAAP)	$	234,108		$	91,120		$	(60,132)	$	265,096
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)	34.9		%	19.1		%	—		23.1		%
Twelve months ended December 31, 2022
(in thousands)	Machine Clothing			Albany EngineeredComposites			Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	206,214		$	31,579		$	(141,285)	$	96,508
Interest expense, net	—			—			14,000		14,000
Income tax expense	—			—			35,472		35,472
Depreciation and amortization expense	19,483			46,202			3,364		69,049
EBITDA (non-GAAP)	225,697			77,781			(88,449)		215,029
Restructuring expenses, net	92			—			14		106
Foreign currency revaluation (gains)/losses (a)	(520)			672			(9,981)		(9,829)
Dissolution of business relationships in Russia	1,494			—			781		2,275
Pension settlement expense	—			—			49,128		49,128
IP address sales	—			—			(3,420)		(3,420)
Acquisition/integration costs	—			1,057			—		1,057
Pre-tax (income) attributable to noncontrolling interest	—			(817)			—		(817)
Adjusted EBITDA (non-GAAP)	$	226,763		$	78,693		$	(51,927)	$	253,529
Adjusted EBITDA margin (Adjusted EBITDA divided by Net revenues) (non-GAAP)	37.2		%	18.5		%	—		24.5		%

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

Three months ended December 31, 2023(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	55	$	13	$	42	$	0.00
Foreign currency revaluation (gains)/losses (a)	3,016		933		2,083		0.07
CEO transition expenses	667		—		667		0.02
Inventory step-up impacting Cost of goods sold	4,110		908		3,202		0.10
Acquisition/integration costs	2,376		486		1,890		0.06
Three months ended December 31, 2022(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	(162)	$	(41)	$	(121)	$	0.00
Foreign currency revaluation (gains)/losses (a)	10,750		3,247		7,503		0.24
Dissolution of business relationships in Russia	(79)		(9)		(70)		0.00
IP address sales	(3,420)		(872)		(2,548)		(0.08)
Acquisition/integration costs	251		75		176		0.01
Year ended December 31, 2023(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	282	$	70	$	212	$	0.01
Foreign currency revaluation (gains)/losses (a)	1,296		416		880		0.03
CEO transition expenses	2,719		—		2,719		0.09
Withholding tax related to internal restructuring	—		(3,026)		3,026		0.10
Inventory step-up impacting Cost of goods sold	5,480		1,211		4,269		0.14
Acquisition/integration costs	5,194		951		4,243		0.14
Year ended December 31, 2022(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	106	$	34	$	72	$	0.01
Foreign currency revaluation (gains)/losses (a)	(9,829)		(2,582)		(7,247)		(0.23)
Dissolution of business relationships in Russia	2,275		305		1,970		0.06
Pension settlement expense	49,128		11,947		37,181		1.20
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)	—		5,217		(5,217)		(0.17)
IP address sales	(3,420)		(872)		(2,548)		(0.08)
Acquisition/integration costs	1,057		316		741		0.04

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

	Three months ended December 31,				Twelve months ended December 31,
Per share amounts	2023		2022		2023		2022
Earnings per share attributable to Company shareholders - Basic (GAAP)	$	0.98	$	0.58	$	3.56	$	3.06
Effect of dilutive stock-based compensation plans	(0.01)		—		(0.01)		(0.02)
Earnings per share attributable to Company shareholders - Diluted (GAAP)	$	0.97	$	0.58	$	3.55	$	3.04
Adjustments, after tax:
Restructuring expenses, net	—		—		0.01		0.01
Foreign currency revaluation (gains)/losses (a)	0.07		0.24		0.03		(0.23)
CEO transition expenses	0.02		—		0.09		—
Inventory step-up impacting Cost of goods sold	0.10		—		0.14		—
Dissolution of business relationships in Russia	—		—		—		0.06
Pension settlement charge	—		—		—		1.20
Withholding tax related to internal restructuring	—		—		0.10		—
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)	—		—		—		(0.17)
IP address sales	—		(0.08)		—		(0.08)
Acquisition/integration costs	0.06		0.01		0.14		0.04
Adjusted Diluted Earnings per share (non-GAAP)	$	1.22	$	0.75	$	4.06	$	3.87
(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date.
(b) Our Adjusted EPS excluded the benefit from the reclassification of stranded income tax effects caused by the TCJA associated with the US pension plan liability that was eliminated in September 2022, a one-time event that would not recur in the future. Such stranded income tax effect represented a one-time benefit that distorted the effective tax rate for the quarter and year-to-date ended September 30, 2022, and would not be indicative of ongoing or expected future income tax rate at the Company. Management believes excluding pension settlement expense and its income tax impact, including the stranded income tax effects, from its Adjusted EBITDA and Adjusted EPS for the quarter and year-to-date ended September 30, 2022 would provide investors a transparent view and enhanced ability to better assess the Company’s ongoing operational and financial performance.

The calculations of net debt are as follows:

(in thousands)	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Current maturities of long-term debt	$	4,218	$	27,246	$	—	$	—	$	—
Long-term debt	452,667		463,339		487,000		491,000		439,000
Total debt	456,885		490,585		487,000		491,000		439,000
Cash and cash equivalents	173,420		171,506		300,916		304,258		291,776
Net debt (non GAAP)	$	283,465	$	319,079	$	186,084	$	186,742	$	147,224

The calculation of net leverage ratio as of December 31, 2023 is as follows:

Total Company
	Twelve months ended
(in thousands)	December 31, 2023
Net income/(loss) (GAAP)	$	111,610
Interest expense, net	13,601
Income tax expense	48,846
Depreciation and amortization expense	76,733
EBITDA (non-GAAP)	250,790
Restructuring expenses, net	282
Foreign currency revaluation (gains)/losses (a)	1,296
CEO transition expenses	2,719
Inventory step-up impacting Cost of goods sold	5,480
Acquisition/integration costs	5,194
Pre-tax (income) attributable to noncontrolling interest	(665)
Adjusted EBITDA (non-GAAP)	$	265,096

(in thousands, except for net leverage ratio)	December 31, 2023
Net debt (non-GAAP)	$	283,465
Adjusted EBITDA (non-GAAP)	265,096
Net leverage ratio (non-GAAP)	1.07

Initial Outlook Full Year 2024 Adjusted EBITDA	Machine Clothing						AEC
(in millions)	Low		High				Low		High
Net income attributable to the Company (GAAP) (c)	$	200	$	215			$	47	$	52
Income attributable to the noncontrolling interest	—		—				(1)		(1)
Interest expense, net	—		—				—		—
Income tax expense	—		—				—		—
Depreciation and amortization	30		35				50		55
EBITDA (non-GAAP)	230		250		—		96		106
Restructuring expenses, net (c)	—		—				—		—
Foreign currency revaluation (gains)/losses (c)	—		—				—		—
Acquisition/integration costs (c)	—		—				—		—
Pre-tax (income)/loss attributable to non-controlling interest	—		—				1		1
Adjusted EBITDA (non-GAAP)	$	230	$	250	$	—	$	97	$	107
(c) Interest, Other income/expense and Income taxes are not allocated to the business segments
Initial Outlook Full Year 2024 Adjusted EBITDA	Total Company
(in millions)	Low		High
Net income attributable to the Company (GAAP) (c)	$	111	$	126
Income attributable to the noncontrolling interest	(1)		(1)
Interest expense, net	17		18
Income tax expense	47		51
Depreciation and amortization	85		95
EBITDA (non-GAAP)	259		289
Restructuring expenses, net (d)	—		—
Foreign currency revaluation (gains)/losses (d)	—		—
Acquisition/integration costs (d)	—		—
Pre-tax (income)/loss attributable to non-controlling interest	1		1
Adjusted EBITDA (non-GAAP)	$	260	$	290
	Total Company
Forecast of Full Year 2024 Earnings per share (diluted) (e)	Low		High
Net income attributable to the Company (GAAP) (c)	$	3.55	$	4.05
Restructuring expenses, net (d)	—		—
Foreign currency revaluation (gains)/losses (d)	—		—
Acquisition/integration costs (d)	—		—
Adjusted Diluted Earnings per share (non-GAAP)	$	3.55	$	4.05
(d) Due to the uncertainty of these items, we are unable to forecast these items for 2024.
(e) Calculations based on estimated diluted shares outstanding of approximately 31.2 million.

About Albany International Corp.

Albany International is a leading developer and manufacturer of engineered components, using advanced materials processing and automation capabilities, with two core businesses.

• Machine Clothing is the world’s leading producer of custom-designed, consumable belts essential for the manufacture of paper, paperboard, tissue and towel, pulp, non-wovens and a variety of other industrial applications.

• 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 32 facilities in 14 countries, employs approximately 5,600 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

Non-GAAP Measures

This release, including the conference call commentary associated with this release, contains certain non-GAAP measures, that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net revenues and percent change in net revenues, excluding the impact of currency translation effects; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted Diluted earnings per share (or Adjusted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net revenues and change in Net revenues, after currency effects are excluded, provides management and investors insight into underlying revenues trends. Net revenues, or percent changes in net revenues, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

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

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

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

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

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

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

Forward-Looking Statements

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

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic conditions, including inflationary cost pressures, as well as global events, which include but are not limited to

geopolitical events; paper-industry trends and conditions during 2023 and in future years; expectations in 2023 and in future periods of revenues, EBITDA, Adjusted EBITDA (both in dollars and as a percentage of net revenues), 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 revenues 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

Filing Compare · ALBANY INTERNATIONAL CORP /DE/