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

“We are pleased to report strong revenue growth during the first quarter of 2022,” said Albany International President and Chief Executive Officer, Bill Higgins. “Our team remained nimble and flexible in the face of an unpredictable business environment caused by COVID variant waves and Russia’s invasion of Ukraine.

“In response to the Russian invasion, we made the decision to cease doing business in Russia during the first quarter, including exiting a very small joint venture in our Machine Clothing segment.

“In the first quarter of 2022, Machine Clothing segment sales increased by over $5 million compared to the same period in the prior year. On a constant currency basis, Machine Clothing segment sales increased 5.7% with positive contributions from all product segments, resulting in the segment’s highest first-quarter revenue since 2015. Operating income was slightly lower than the year-ago level – the result of the write offs and reserves due to withdrawal from the Russian market. Absent those effects, segment operating income grew approximately 2%. The segment’s order book remains strong and supports our outlook for 2022.

“The Engineered Composites segment reported top-line growth in excess of 20% in the first quarter giving us a nice start to delivering on our growth expectations for the year. The segment is well-positioned and expected to deliver Adjusted EBITDA margins of 20% or better in 2022.

“Overall, we are pleased with how the year is progressing and are reiterating our guidance for 2022. That said, we recognize risks remain in 2022 in the form of ongoing inflation, supply chain and logistics challenges, and global economic conditions,” concluded Higgins.

For the first quarter ended March 31, 2022:

  • Net sales were $244.2 million, up 10%, or 11.5% after adjusting for currency translation, when compared to the prior year, primarily due to higher net sales in all product grades within the Machine Clothing segment, coupled with the growth in LEAP net sales within the Engineered Composite segment.
  • Gross profit of $91.6 million was 3% higher than the $88.5 million reported for the same period of 2021. The Q1 2022 gross profit included the impact of $2.4 million of reserves recognized related to damaged materials in the Engineered Composites segment.
  • Selling, Technical, General, and Research (STG&R) expenses were $52.6 million, compared to $46.7 million in the same period of 2021. The increase was driven by customer credit loss reserve increases related to our dissolution of business relationships in Russia, higher incentive compensation costs, and the unfavorable effect of the revaluation of foreign currency balances.
  • Operating income was $38.8 million, compared to $41.8 million in the prior year, a decrease of 7%.
  • The effective tax rate was 28.1%, compared to 26.7% for the first quarter of 2021. The absence of favorable changes in estimated tax payments recognized in the first quarter of 2022 drove the higher effective tax rate.
  • Net income attributable to the Company was $27.7 million ($0.87 per share), compared to $27.6 million ($0.85 per share) in the first quarter of 2021. Adjusted earnings per share (or Adjusted EPS, a non-GAAP measure) was $0.91 per share in the first quarter of 2022, compared to $0.87 in the same period of last year.
  • Adjusted EBITDA (a non-GAAP measure) was $61.0 million, compared to $60.7 million in the first quarter of 2021, an increase of 0.6%.

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 GAAP and Adjusted earnings per share guidance to reflect non-GAAP adjustments reported in Q1. All other previously issued guidance for 2022 remains unchanged:

  • Total company revenue of between $920 and $960 million;
  • Effective income tax rate, including tax adjustments, of 29% to 31%;
  • Total company depreciation and amortization of approximately $75 million;
  • Capital expenditures in the range of $75 to $85 million;
  • GAAP earnings per share of between $2.76 and $3.26;
  • Adjusted earnings per share of between $2.80 and $3.30
  • Total company Adjusted EBITDA of $215 to $245 million;
  • Machine Clothing revenue of $590 to $610 million;
  • Machine Clothing Adjusted EBITDA of between $205 and $225 million;
  • Albany Engineered Composites revenue of between $330 to $350 million; and
  • Albany Engineered Composites Adjusted EBITDA of between $65 to $75 million.

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

Net sales

$

244,169

 

 

$

222,362

Cost of goods sold

 

152,565

 

 

 

133,816

 

 

 

 

Gross profit

 

91,604

 

 

 

88,546

Selling, general, and administrative expenses

 

42,707

 

 

 

37,195

Technical and research expenses

 

9,889

 

 

 

9,481

Restructuring expenses, net

 

254

 

 

 

52

 

 

 

 

Operating income

 

38,754

 

 

 

41,818

Interest expense, net

 

3,609

 

 

 

3,569

Other expense/(income), net

 

(3,928

)

 

 

600

 

 

 

 

Income before income taxes

 

39,073

 

 

 

37,649

Income tax expense

 

10,998

 

 

 

10,040

 

 

 

 

Net income

 

28,075

 

 

 

27,609

Net income attributable to the noncontrolling interest

 

338

 

 

 

27

Net income attributable to the Company

$

27,737

 

 

$

27,582

 

 

 

 

Earnings per share attributable to Company shareholders – Basic

$

0.87

 

 

$

0.85

 

 

 

 

Earnings per share attributable to Company shareholders – Diluted

$

0.87

 

 

$

0.85

 

 

 

 

Shares of the Company used in computing earnings per share:

 

 

 

Basic

 

31,877

 

 

 

32,352

 

 

 

 

Diluted

 

31,961

 

 

 

32,401

 

 

 

 

Dividends declared per share, Class A and Class B

$

0.21

 

 

$

0.20

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

March 31, 2022

 

December 31, 2021

ASSETS

 

 

 

Cash and cash equivalents

$

307,415

 

 

$

302,036

 

Accounts receivable, net

 

207,555

 

 

 

191,985

 

Contract assets, net

 

112,262

 

 

 

112,546

 

Inventories

 

123,835

 

 

 

117,882

 

Income taxes prepaid and receivable

 

126

 

 

 

1,958

 

Prepaid expenses and other current assets

 

37,387

 

 

 

32,394

 

Total current assets

$

788,580

 

 

$

758,801

 

 

 

 

 

Property, plant and equipment, net

 

431,860

 

 

 

436,417

 

Intangibles, net

 

37,170

 

 

 

39,081

 

Goodwill

 

180,785

 

 

 

182,124

 

Deferred income taxes

 

20,317

 

 

 

26,376

 

Noncurrent receivables, net

 

30,982

 

 

 

31,849

 

Other assets

 

90,367

 

 

 

81,416

 

Total assets

$

1,580,061

 

 

$

1,556,064

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Accounts payable

$

64,501

 

 

$

68,954

 

Accrued liabilities

 

108,855

 

 

 

124,325

 

Current maturities of long-term debt

 

 

 

 

 

Income taxes payable

 

4,711

 

 

 

14,887

 

Total current liabilities

 

178,067

 

 

 

208,166

 

 

 

 

 

Long-term debt

 

427,000

 

 

 

350,000

 

Other noncurrent liabilities

 

99,498

 

 

 

107,794

 

Deferred taxes and other liabilities

 

11,244

 

 

 

12,499

 

Total liabilities

 

715,809

 

 

 

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; 40,781,434 issued in 2022 and 40,760,577 in 2021

 

41

 

 

 

41

 

Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; none issued and outstanding in 2022 and 104 in 2021

 

 

 

 

 

Additional paid in capital

 

437,748

 

 

 

436,996

 

Retained earnings

 

884,133

 

 

 

863,057

 

Accumulated items of other comprehensive income:

 

 

 

Translation adjustments

 

(107,610

)

 

 

(105,880

)

Pension and postretirement liability adjustments

 

(38,416

)

 

 

(38,490

)

Derivative valuation adjustment

 

8,404

 

 

 

(1,614

)

Treasury stock (Class A), at cost; 9,179,776 shares in 2022 and 8,665,090 in 2021

 

(324,080

)

 

 

(280,143

)

Total Company shareholders’ equity

 

860,220

 

 

 

873,967

 

Noncontrolling interest

 

4,032

 

 

 

3,638

 

Total equity

 

864,252

 

 

 

877,605

 

Total liabilities and shareholders’ equity

$

1,580,061

 

 

$

1,556,064

 

 

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Three Months Ended March 31,

 

 

2022

 

 

 

2021

 

OPERATING ACTIVITIES

 

 

 

Net income

$

28,075

 

 

$

27,609

 

Adjustments to reconcile net income to net cash (used in)/provided by operating activities:

 

 

 

Depreciation

 

15,597

 

 

 

16,589

 

Amortization

 

2,165

 

 

 

2,293

 

Change in deferred taxes and other liabilities

 

1,792

 

 

 

4,442

 

Impairment of property, plant, equipment, and inventory

 

2,868

 

 

 

185

 

Non-cash interest expense

 

282

 

 

 

45

 

Compensation and benefits paid or payable in Class A Common Stock

 

745

 

 

 

(13

)

Provision for credit losses from uncollected receivables and contract assets

 

1,858

 

 

 

(110

)

Foreign currency remeasurement (gain)/loss on intercompany loans

 

(2,385

)

 

 

(308

)

Fair value adjustment on foreign currency options

 

(977

)

 

 

139

 

 

 

 

 

Changes in operating assets and liabilities that (used)/provided cash:

 

 

 

Accounts receivable

 

(15,674

)

 

 

(3,236

)

Contract assets

 

272

 

 

 

16,104

 

Inventories

 

(7,549

)

 

 

(8,563

)

Prepaid expenses and other current assets

 

(1,976

)

 

 

(899

)

Income taxes prepaid and receivable

 

1,829

 

 

 

(1,465

)

Accounts payable

 

(375

)

 

 

9,188

 

Accrued liabilities

 

(19,350

)

 

 

(19,485

)

Income taxes payable

 

(10,890

)

 

 

(8,077

)

Noncurrent receivables

 

614

 

 

 

488

 

Other noncurrent liabilities

 

(1,914

)

 

 

(2,097

)

Other, net

 

(398

)

 

 

857

 

Net cash (used in)/provided by operating activities

 

(5,391

)

 

 

33,686

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

Purchases of property, plant and equipment

 

(15,719

)

 

 

(12,534

)

Purchased software

 

(35

)

 

 

(2

)

Net cash used in investing activities

 

(15,754

)

 

 

(12,536

)

 

 

 

 

FINANCING ACTIVITIES

 

 

 

Proceeds from borrowings

 

77,000

 

 

 

8,000

 

Principal payments on debt

 

 

 

 

(22,007

)

Principal payments on finance lease liabilities

 

(390

)

 

 

(349

)

Purchase of Treasury shares

 

(42,230

)

 

 

 

Taxes paid in lieu of share issuance

 

(770

)

 

 

(998

)

Proceeds from options exercised

 

7

 

 

 

128

 

Dividends paid

 

(6,742

)

 

 

(6,468

)

Net cash provided by/(used in) financing activities

 

26,875

 

 

 

(21,694

)

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(351

)

 

 

(2,901

)

 

 

 

 

Increase/(decrease) in cash and cash equivalents

 

5,379

 

 

 

(3,445

)

Cash and cash equivalents at beginning of period

 

302,036

 

 

 

241,316

Cash and cash equivalents at end of period

$

307,415

 

 

$

237,871

 

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, Q1

2022

Decrease due to

changes in

currency

translation rates

Q1 2022 sales

on same basis

as Q1 2021

currency

translation rates

Net sales as

reported, Q1

2021

% Change

compared to Q1

2021, excluding

currency rate effects

Machine Clothing

$

154,062

$

(2,528

)

$

156,590

$

148,206

5.7

%

Albany Engineered Composites

 

90,107

 

(1,158

)

 

91,265

 

74,156

23.1

%

Consolidated total

$

244,169

$

(3,686

)

$

247,855

$

222,362

11.5

%

The following table presents Gross profit and Gross profit margin:

(in thousands, except percentages)

Gross profit,

Q1 2022

Gross profit margin,

Q1 2022

Gross profit,

Q1 2021

Gross profit margin,

Q1 2021

Machine Clothing

$

79,345

51.5

%

$

76,393

51.5

%

Albany Engineered Composites

 

12,259

13.6

%

 

12,153

16.4

%

Consolidated total

$

91,604

37.5

%

$

88,546

39.8

%

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 March 31, 2022

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Operating income/(loss) (GAAP)

$

49,644

 

$

1,195

 

$

(12,085

)

$

38,754

 

Interest, taxes, other income/(expense)

 

 

 

 

 

(10,679

)

 

(10,679

)

Net income/(loss) (GAAP)

 

49,644

 

 

1,195

 

 

(22,764

)

 

28,075

 

Interest expense, net

 

 

 

 

 

3,609

 

 

3,609

 

Income tax expense

 

 

 

 

 

10,998

 

 

10,998

 

Depreciation and amortization expense

 

4,923

 

 

12,039

 

 

800

 

 

17,762

 

EBITDA (non-GAAP)

 

54,567

 

 

13,234

 

 

(7,357

)

 

60,444

 

Restructuring expenses, net

 

243

 

 

 

 

11

 

 

254

 

Foreign currency revaluation (gains)/losses

 

1,057

 

 

423

 

 

(3,740

)

 

(2,260

)

Dissolution of business relationships in Russia

 

1,787

 

 

 

 

781

 

 

2,568

 

Acquisition/integration costs

 

 

 

282

 

 

 

 

282

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(252

)

 

 

 

(252

)

Adjusted EBITDA (non-GAAP)

$

57,654

 

$

13,687

 

$

(10,305

)

$

61,036

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales) (non-GAAP)

 

37.4

%

 

15.2

%

 

 

 

25.0

%

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2021

(in thousands)

Machine Clothing

Albany Engineered

Composites

Corporate expenses

and other

Total Company

Operating income/(loss) (GAAP)

$

50,363

 

$

2,938

 

$

(11,483

)

$

41,818

 

Interest, taxes, other income/(expense)

 

 

 

 

 

(14,209

)

 

(14,209

)

Net income/(loss) (GAAP)

 

50,363

 

 

2,938

 

 

(25,692

)

 

27,609

 

Interest expense, net

 

 

 

 

 

3,569

 

 

3,569

 

Income tax expense

 

 

 

 

 

10,040

 

 

10,040

 

Depreciation and amortization expense

 

5,122

 

 

12,865

 

 

895

 

 

18,882

 

EBITDA (non-GAAP)

 

55,485

 

 

15,803

 

 

(11,188

)

 

60,100

 

Restructuring expenses, net

 

(69

)

 

89

 

 

32

 

 

52

 

Foreign currency revaluation (gains)/losses

 

(492

)

 

575

 

 

167

 

 

250

 

Acquisition/integration costs

 

 

 

314

 

 

 

 

314

 

Pre-tax (income) attributable to noncontrolling interest

 

 

 

(46

)

 

 

 

(46

)

Adjusted EBITDA (non-GAAP)

$

54,924

 

$

16,735

 

$

(10,989

)

$

60,670

 

Adjusted EBITDA margin (Adjusted EBITDA divided by Net sales) (non-GAAP)

 

37.1

%

 

22.6

%

 

 

 

27.3

%

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

Three months ended March 31, 2022

(in thousands, except per share amounts

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

254

 

$

73

 

$

181

 

$

0.01

 

Foreign currency revaluation (gains)/losses

 

(2,260

)

 

(653

)

 

(1,607

)

 

(0.05

)

Dissolution of business relationships in Russia

 

2,568

 

 

332

 

 

2,236

 

 

0.07

 

Acquisition/integration costs

 

282

 

 

84

 

 

198

 

 

0.01

 

 

 

 

 

 

Three months ended March 31, 2021

(in thousands, except per share amounts)

Pre tax

Amounts

Tax

Effect

After tax

Effect

Per share

Effect

Restructuring expenses, net

$

52

 

$

15

 

$

37

 

$

0.00

 

Foreign currency revaluation (gains)/losses

 

250

 

 

(135

)

 

385

 

 

0.01

 

Acquisition/integration costs

 

314

 

 

94

 

 

220

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

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

 

Three months ended March 31,

Per share amounts (Basic)

 

2022

 

2021

Earnings per share (GAAP)

$

0.87

 

$

0.85

Adjustments, after tax:

 

 

Restructuring expenses, net

 

0.01

 

 

Foreign currency revaluation (gains)/losses

 

(0.05

)

 

0.01

Dissolution of business relationships in Russia

 

0.07

 

 

Acquisition/integration costs

 

0.01

 

 

0.01

Adjusted Earnings per share (non-GAAP)

$

0.91

 

$

0.87

The calculations of net debt are as follows:

(in thousands)

March 31, 2022

December 31, 2021

Current maturities of long-term debt

$

$

Long-term debt

 

427,000

 

350,000

Total debt

 

427,000

 

350,000

Cash and cash equivalents

 

307,415

 

302,036

Net debt (non-GAAP)

$

119,585

$

47,964

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)

$

183

 

$

202

 

 

$

16

$

25

Income attributable to the noncontrolling interest

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

Depreciation and amortization

 

19

 

 

20

 

 

 

49

 

50

EBITDA (non-GAAP)

 

202

 

 

222

 

 

 

65

 

75

Restructuring expenses, net (c)

 

 

 

 

 

 

 

Foreign currency revaluation (gains)/losses (c)

 

1

 

 

1

 

 

 

 

Dissolution of business relationships in Russia (c)

 

2

 

 

2

 

 

 

 

Acquisition/integration costs (c)

 

 

 

 

 

 

 

Pre-tax (income)/loss attributable to non-controlling interest

 

 

 

 

 

 

 

Adjusted EBITDA (non-GAAP)

$

205

 

$

225

 

 

$

65

$

75

(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)

$

88

 

$

105

 

 

 

 

Income attributable to the noncontrolling interest

 

 

 

 

 

 

 

Interest expense, net

 

14

 

 

16

 

 

 

 

Income tax expense

 

38

 

 

48

 

 

 

 

Depreciation and amortization

 

74

 

 

75

 

 

 

 

EBITDA (non-GAAP)

 

214

 

 

244

 

 

 

 

Restructuring expenses, net (c)

 

 

 

 

 

 

 

Foreign currency revaluation (gains)/losses (c)

 

(2

)

 

(2

)

 

 

 

Acquisition/integration costs (c)

 

 

 

 

 

 

 

Dissolution of business relationships in Russia (c)

 

3

 

 

3

 

 

 

 

Pre-tax (income)/loss attributable to non-controlling interest

 

 

 

 

 

 

 

Adjusted EBITDA (non-GAAP)

$

215

 

$

245

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

Forecast of Full Year 2022 Earnings per share (basic) (d)

Low

High

 

 

 

Net income attributable to the Company (GAAP)

$

2.76

 

$

3.26

 

 

 

 

Restructuring expenses, net (c)

 

0.01

 

 

0.01

 

 

 

 

Foreign currency revaluation (gains)/losses (c)

 

(0.05

)

 

(0.05

)

 

 

 

Dissolution of business relationships in Russia (c)

 

0.07

 

 

0.07

 

 

 

 

Acquisition/integration costs (c)

 

0.01

 

 

0.01

 

 

 

 

Adjusted Earnings per share (non-GAAP)

$

2.80

 

$

3.30

 

 

 

 

 

 

 

 

 

 

(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 31.5 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 4,100 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.

Contacts

John Hobbs

603-330-5897

john.hobbs@albint.com

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