Albany International Reports Third-Quarter Results

  Albany International Reports Third-Quarter Results

Third-Quarter Financial Highlights

  *Net sales were $183.1 million, a decrease of 5.9 percent compared to Q3
    2012. Q3 2012 included a change in terms with a North American customer
    that increased sales by $8 million.
  *Adjusted EBITDA for Q3 2013 was $31.9 million, compared to $41.9 million
    in Q3 2012 (see Tables 5 and 6). Q3 2012 included a change in terms with a
    North American customer that increased Adjusted EBITDA by $3.5 million.
  *Q3 2013 income from continuing operations was $0.15 per share. These
    results include restructuring charges of $0.04, foreign currency
    revaluation losses of $0.06, and net favorable income tax adjustments of
    $0.01 (see Table 7).
  *Q3 2012 income from continuing operations was $0.29 per share. These
    results included restructuring charges of $0.05, foreign currency
    revaluation losses of $0.07, and net unfavorable income tax adjustments of
    $0.04 (see Table 8).
  *Net debt at the end of Q3 was $94.9 million, a decline of $28.8 million
    compared to the end of Q2.

Business Wire

ROCHESTER, N.H. -- November 4, 2013

Albany International Corp. (NYSE:AIN), a global advanced textiles and
materials processing company with core businesses in machine clothing and
engineered composites, reported Q3 2013 income from continuing operations of
$4.7 million. These results include restructuring charges of $2.3 million,
foreign currency revaluation losses of $3.3 million, and net favorable income
tax adjustments of $0.5 million (see Table 7).

Q3 2012 income from continuing operations was $9.1 million. These results
included restructuring charges of $2.7 million, foreign currency revaluation
losses of $3.6 million, and net unfavorable income tax adjustments of $1.3
million (see Table 8).

Table 1 summarizes net sales and the effect of changes in currency translation
rates:

Table 1                                                     
                                                  Impact of    Percent
               Net Sales                             Changes       Change
               Three Months ended                    in Currency   excluding
              September 30,               Percent   Translation   Currency
(in           2013         2012         Change   Rates        Rate Effect
thousands)
Machine
Clothing      $ 162,864   $ 177,471   -8.2  %  $  1,508    -9.1    %
(MC)
Engineered
Composites     20,283     17,118    18.5  %    -        18.5    %
(AEC)
Total         $ 183,147   $ 194,589   -5.9  %  $  1,508    -6.7    %


A change in contract terms with a North American Machine Clothing customer
resulted in an increase to Q3 2012 sales of $8 million. Excluding the effects
of this contract change and changes in currency translation rates, Q3 2013 MC
sales declined 4.8 percent and total Company sales declined 2.7 percent.

Q3 2013 gross profit was $68.0 million, or 37.1 percent of net sales, compared
to $79.7 million, or 40.9 percent of net sales, in the same period of 2012. MC
gross profit margin decreased from 44.6 percent in 2012 to 41.6 percent in
2013. The decrease in MC gross profit percentage was principally attributable
to an unfavorable change in geographic mix, lower sales, and a
more-severe-than-expected seasonal effect that resulted in production
ineffiencies.

Selling, technical, general, and research (STG&R) expenses were $52.5 million,
or 28.7 percent of net sales, in the third quarter of 2013, including losses
of $1.3 million related to the revaluation of non-functional-currency assets
and liabilities. In Q3 2013, Research expense increased by $0.7 million due to
scrap associated with an AEC research program. Q3 2013 expenses were lowered
by $1.5 million due to reduced U.S. medical costs, incentive compensation
accruals, and professional fees, all of which were reported in the Unallocated
expenses segment. In Q3 2012, STG&R expenses were $53.8 million, or 27.6
percent of net sales, including losses of $1.4 million related to the
revaluation of non-functional-currency assets and liabilities.

The following table summarizes third-quarter operating income:

Table 2                
                       Operating Income/(loss)
                        Three Months ended
                       September 30,
(in thousands)         2013         2012
Machine Clothing       $ 33,196    $ 44,918  
Engineered Composites   (572    )   (312    )
Research expenses       (7,418  )   (6,734  )
Unallocated expenses    (11,951 )   (14,760 )
Total                  $ 13,255    $ 23,112  


Operating results were affected by restructuring and currency revaluation as
described below:

Table 3
                    Expenses in Q3 2013          Expenses in Q3 2012
                     resulting from                resulting from
                                                 
(in thousands)       Restructuring  Revaluation   Restructuring  Revaluation
Machine Clothing    $   2,250     $  1,328    $   2,739     $  1,401  
Engineered             6           -           -           3      
Composites
Unallocated            -           -           -           2      
expenses
Total               $   2,256     $  1,328    $   2,739     $  1,406  


Restructuring charges for Q3 2013 were principally due to adjustment to
accruals for severance and social costs associated with the Company’s Machine
Clothing production facilities in Sélestat and St. Junien, France.

Q3 2013 Other income/expense, net, was expense of $2.7 million, including
losses related to the revaluation of non-functional-currency intercompany
balances of $2.0 million and fees of $0.5 million associated with the creation
of Albany Safran Composites. Other income/expense, net, in Q3 2012 was expense
of $3.1 million, including losses of $2.2 million related to the revaluation
of non-functional-currency intercompany balances.

The following table summarizes currency revaluation effects on certain
financial metrics:

Table 4
                             Income/(loss) attributable
                              to currency revaluation
                              Three Months ended
                             September 30,
(in thousands)               2013          2012
Operating income             ($1,328  )    ($1,406  )
Other income/(expense), net  (1,975   )    (2,174   )
Total                        ($3,303  )    ($3,580  )


The Company’s income tax rate, excluding tax adjustments, was 41.0 percent for
Q3 2013, compared to 35.4 percent for the same period of 2012.The increase in
the estimated tax rate was primarily attributable to changes in the
anticipated amount and distribution of income and loss among the countries in
which we operate. Q3 2013 income tax expense included a charge of $0.2 million
for a change in the estimated income tax rate, and a benefit of $0.7 million
for discrete tax adjustments. Q3 2012 income tax expense included a charge of
$2.0 million for a change in the estimated income tax rate, and a benefit of
$0.7 million for discrete tax adjustments.

The following tables summarize Adjusted EBITDA:

Table 5
Three Months ended                                 Research    
September 30, 2013
                            Machine      Engineered   and           Total
(in thousands)             Clothing    Composites  Unallocated  Company
Income from continuing     $ 33,196     ($572 )  ($27,926  )  $ 4,698  
operations
Interest expense, net       -          -       3,484        3,484  
Income tax expense          -          -       2,381        2,381  
Depreciation and            11,084     2,009   2,704        15,797 
amortization
EBITDA                      44,280     1,437   (19,357   )   26,360 
Restructuring and other,    2,250      6       -            2,256  
net
Foreign currency            1,328      -       1,975        3,303  
revaluation losses
Adjusted EBITDA            $ 47,858   $  1,443   ($17,382  )  $ 31,919 


Table 6
Three Months ended                                    Research
September 30, 2012
                            Machine      Engineered   and           Total
(in thousands)             Clothing    Composites  Unallocated  Company
Income from continuing     $ 44,918     ($312 )  ($35,525  )  $ 9,081  
operations
Interest expense, net       -          -       3,997        3,997  
Income tax expense          -          -       6,965        6,965  
Depreciation and            11,469     1,471   2,606        15,546 
amortization
EBITDA                      56,387     1,159   (21,957   )   35,589 
Restructuring and other,    2,739      -       -            2,739  
net
Foreign currency            1,401      3       2,176        3,580  
revaluation losses
Adjusted EBITDA            $ 60,527   $  1,162   ($19,781  )  $ 41,908 


Capital spending for equipment and software was $19.1 million for Q3 2013,
bringing the year-to-date total to $47.6 million, including $30.3 million for
the Engineered Composites segment and its expansion associated with the LEAP
program. Depreciation and amortization was $15.8 million for Q3 2013.

CEO Comments

President and CEO Joe Morone said, “Q3 2013 was an encouraging quarter for
AEC, but a disappointing one for MC. The net result was weaker-than-expected
performance for the Company.

“The disappointing performance in MC was driven by soft sales. We had
anticipated a weak top line in Q3 because of summer slowdowns and the impact
of that Q3 2012 contractual change in treatment of inventory that we discussed
last quarter. The impact of the contract change on Q3 sales was in line with
our expectations, but the seasonal effect was more severe than we had
expected. The resulting underutilized capacity dragged our gross margins down
below their normal levels. Weaker-than-expected sales in Asia compounded the
problem. Even though our competitive position in Asia and particularly China
is, if anything, strengthening, sales were more than 10 percent behind Q3 2012
levels, as customer operating rates in both packaging and publication grades
remain soft.

“We expect to see an improvement in MC performance in Q4, but the results
could once again be held back by continuing softness in Asia, and a
stronger-than-normal seasonal effect at the end of the year if customers
perceive economic weakness and drive down their MC inventory. However, we do
not see Q3 results and the possibility of lingering softness in Q4 as an
indicator of longer term trends. Orders in Asia are strengthening and were 10
percent higher than Q3 2012 orders; sales and orders in Europe have been
stable; and if our customers in North America drive down their MC inventory at
the end of the year, they will likely restock early next year as long as the
economy holds. For these and other reasons, we expect a strong first half of
2014. More generally, the structural demand trends across the globe in the
paper industry, our overexposure to the growth segments of paper, our
continuing strength with the leading paper makers across the globe, and the
long-term growth potential of China and our strong competitive position there,
all suggest that this business continues to be a stable long-term generator of
EBITDA and cash flow, and that in 2014, Adjusted EBITDA and cash flow from MC
should be comparable to the levels we achieved in 2012, and were on track to
achieve this year until the softer-than-expected Q3.

“As for AEC, Q3 2013 was an encouraging quarter. Sales were strong, led again
by growth in the LEAP development effort, and EBITDA improved. We think these
trends should continue in Q4 and through next year and beyond. But more
important than these actual results are three developments of long-term
significance for this business. First, after successful tests earlier this
year that validated the performance of the LEAP fan module, the first full
LEAP engine was tested successfully and on schedule in early September. By all
accounts, this “first engine to test” went exceptionally well by normal
industry standards. Given the critical role that our parts play on the engine,
this was an important and high-profile demonstration of our technology and
capabilities. This first full engine test marks the beginning of a three-year
series of engine tests, which should culminate with certification, entry into
service, and production of the LEAP engine for the Airbus 320neo in the second
half of 2016, and for the Boeing 737 MAX in the second half of 2017.

“Second, we expect to complete the agreement with Safran to create Albany
Safran Composites (ASC) shortly. Several aspects of this agreement bear
repeating.

  *First, it solidifies Albany’s position as the exclusive supplier of all 3D
    woven parts for Safran;
  *Second, the most important areas of application for ASC are likely to be
    low- and high-temperature applications on Safran engines – from the LEAP
    family, to smaller engines for business jets, to next-generation
    turboprops for regional aircraft, to next-generation engines like the open
    rotor, to parts for larger engine programs that Safran might participate
    in. Safran engine nacelles, landing gear, and rocket motors are also
    potential areas of application.
  *Third, for applications outside of Safran interests – particularly on the
    airframe, and in industries other than aerospace, like automotive – AEC is
    free to apply its technology, including the intellectual property created
    in support of and by ASC.
  *Fourth, this agreement should lead to an expansion of our collaborative
    R&D efforts into new areas of mutual interest for Albany and Safran, which
    in turn should expand the still growing portfolio of potential
    opportunities for growth beyond the LEAP fan module.
  *And fifth, the agreement specifies the agreed-upon valuation of ASC, which
    is set initially at $280 million and which grows over time with LEAP
    production.

“Finally, several recent statements by CFM officials shed new light on the
timing and shape of the production ramp for LEAP. During Q1, I reported that,
while there was still some uncertainty, it appeared that AEC’s production of
LEAP components would be accelerated by about 12 months, with the ramp-up
beginning in 2015, and hitting a peak of 1,600 engines at the end of the
decade. This is of course still subject to change, but now it appears that
this acceleration will not occur and that the ramp will begin in 2016 as
originally expected. However, the ramp will be considerably steeper, reaching
higher production rates more quickly, hitting an annualized rate of 1,700
engines by the end of 2018 or early 2019, and possibly reaching 1,800 engines
by the end of the decade.

“This has several implications for AEC. First, I had said in Q1 that with a
2015 ramp start for LEAP, total AEC revenue potential of $120 million was in
reach for 2015. With a 2016 ramp start for LEAP, the earliest we can expect to
hit a $120 million AEC run rate will be in the second half of 2016. Second,
once the production ramp begins, our revenue will grow faster and to higher
levels than we had been anticipating. And third, we have been estimating that
total CAPEX for the Company would average $70 million per year through 2016,
with above-average spending in 2015 and 2016. With a 2016 ramp start, an
average of $50-$55 million for 2014 through 2016, growing back to that $70
million average for the balance of the decade, now seems more realistic.

“In sum, strong seasonal effects and weakness in Asia led to a disappointing
Q3 in Machine Clothing. We expect a rebound in Q4 and a strong first half of
2014, although the rebound in Q4 could be muted by continued weakness in Asia
and a rundown of MC inventory by our customers at the end of the year.
Meanwhile, for AEC, CFM conducted a very successful first full test of the
LEAP engine; the launch of ASC is imminent; and, while the trigger point for
the LEAP ramp now appears to be in 2016, the ramp itself is likely to be
steeper and to reach higher levels sooner than we had been anticipating.”

CFO Comments

CFO and Treasurer John Cozzolino commented, “Q3 was a solid quarter for cash
flow as net debt declined approximately $29 million as compared to Q2 (see
Table 9). Part of the improvement in net debt was due to the receipt of the
remaining $13 million of proceeds from the sale of Albany Door Systems. As
expected, however, capital expenditures were high during the quarter with a
total cash outflow of about $19 million. Cash reserves and available borrowing
capacity continued to be significant at the end of Q3. Cash balances, mostly
held outside of the U.S., totaled about $213 million, and $178 million was
available on our $330 million credit facility.

“The Company recorded $2 million in restructuring charges in Q3 for severance
and social costs related to Machine Clothing production facilities in France,
bringing the year-to-date total to $26 million. The Company continues to
expect $4-$6 million of additional charges related to training, outplacement,
and other benefits to be incurred over the next several quarters. Cash
outflows related to the restructuring charges were about $2 million during Q3.
The remaining cash outflows for all French restructuring charges are expected
to mostly occur in Q4 and throughout 2014.

“Revaluation of non-functional-currency assets and liabilities generated a
total loss of $3 million in Q3. This loss was primarily due to the revaluation
of intercompany loans, U.S. dollar cash holdings and trade receivables to the
euro and other currencies.

“The Company’s income tax rate in Q3, exclusive of tax adjustments, was 41
percent, representing the Company’s current estimate of the full-year 2013 tax
rate. This current tax rate forecast is a slight increase from the Q2 estimate
of 39 percent and is mostly due to a change in the expected full-year
geographic distribution of pre-tax income. Including payments related to tax
audit activities, cash paid for income taxes through Q3 2013 was about $21
million, and is expected to total $27 million in 2013.”

The Company plans a webcast to discuss third-quarter 2013 financial results on
Tuesday, November 5, 2013, at 9:00 a.m. Eastern Time. For access, go to
www.albint.com.

                                    # # #

About Albany International Corp.

Albany International is a global advanced textiles and materials processing
company, with two core businesses. Machine Clothing is the world’s leading
producer of custom-designed fabrics and belts essential to production in the
paper, nonwovens, and other process industries. Albany Engineered Composites
is a rapidly growing supplier of highly engineered composite parts for the
aerospace industry. Albany International is headquartered in Rochester, New
Hampshire, operates 19 plants in 11 countries, employs 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.

This release contains certain items, such as earnings before interest, taxes,
depreciation and amortization (EBITDA), EBITDA, Adjusted EBITDA, sales
excluding currency effects, income tax rate exclusive of income tax
adjustments, net debt, and certain income and expense items on a per share
basis that could be considered non-GAAP financial measures. Such items are
provided because management believes that, when presented together with the
GAAP items to which they relate, they provide additional useful information to
investors regarding the Company’s operational performance. Presenting
increases or decreases in sales, after currency effects are excluded, can give
management and investors insight into underlying sales trends. An
understanding of the impact in a particular quarter of specific restructuring
costs, or other gains and losses, on operating income or EBITDA can give
management and investors additional insight into quarterly performance,
especially when compared to quarters in which such items had a greater or
lesser effect, or no effect. All non-GAAP financial measures in this release
relate to the Company’s continuing operations.

The effect of changes in currency translation rates is calculated by
converting amounts reported in local currencies into U.S. dollars at the
exchange rate of a prior period. That amount is then compared to the U.S.
dollar amount reported in the current period. The Company calculates Income
tax adjustments by adding discrete tax items to the effect of a change in tax
rate for the reporting period. The Company calculates its Income tax rate,
exclusive of Income tax adjustments, by removing Income tax adjustments from
total Income tax expense, then dividing that result by Income before tax. The
Company calculates EBITDA by adding Interest expense net, Income taxes, and
Depreciation and Amortization to Income from Continuing Operations. Adjusted
EBITDA is calculated by adding to EBITDA, costs associated with restructuring
and pension settlement charges, and then adding or subtracting revaluation
losses or gains and subtracting building sale gains. The Company believes that
EBITDA and Adjusted EBITDA provide useful information to investors because
they provide an indication of the strength and performance of the Company's
ongoing business operations, including its ability to fund discretionary
spending such as capital expenditures and strategic investments, as well as
its ability to incur and service debt. While depreciation and amortization are
operating costs under GAAP, they are non-cash expenses equal to current period
allocation of costs associated with capital and other long-lived investments
made in prior periods. While restructuring expenses, foreign currency
revaluation losses or gains, pension settlement charges, and building sale
gains have an impact on the Company's net income, removing them from EBITDA
can provide, in the opinion of the Company, a better measure of operating
performance. EBITDA is also a calculation commonly used by investors and
analysts to evaluate and compare the periodic and future operating performance
and value of companies. EBITDA, as defined by the Company, may not be similar
to EBITDA measures of other companies. Such EBITDA measures may not be
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 per share amount for items
included in continuing operations by using the effective tax rate utilized for
the most recent reporting period, the full-year tax rate for the comparable
period of the prior year, and the weighted average number of shares
outstanding for each period.

Table 7
Quarter ended September 30, 2013
                 Pre-tax                After-tax  Shares       Per Share
(in thousands,
except per       amounts    Tax Effect  Effect     Outstanding  Effect
share amounts)
Restructuring    $ 2,256   $  925     $ 1,331   31,719      $  0.04 
and other, net
Foreign
currency          3,303     1,354    1,949   31,719        0.06 
revaluation
losses
Negative effect
of change in      -         170      170     31,719        0.01 
estimated
income tax rate
Net discrete
income tax        -         691      691     31,719        0.02 
benefit


Table 8
Quarter ended September 30, 2012
                  Pre-tax                  After-tax   Shares        Per Share
(in thousands,
except per       amounts    Tax Effect  Effect     Outstanding  Effect
share amounts)
Restructuring    $ 2,739   $  1,055   $ 1,684   31,363      $  0.05 
and other, net
Foreign
currency          3,580     1,378    2,202   31,363        0.07 
revaluation
losses
Negative effect
of change in      -         1,968    1,968   31,363        0.06 
estimated tax
rate
Net discrete
income tax        -         684      684     31,363        0.02 
benefit


The following table contains the calculation of net debt:

Table 9
                                   September 30,  June 30,     December 31,
(in thousands)                     2013           2013         2012
Notes and loans payable            $  565        $ 610       $  586     
Current maturities of long-term      55,014      55,014      83,276  
debt
Long-term debt                       252,115     265,368     235,877 
Total debt                           307,694     320,992     319,739 
Cash                                 212,809     197,321     190,718 
Net debt                           $  94,885     $ 123,671   $  129,021 


The following tables summarize year-to-date Adjusted EBITDA:

Table 10
Nine Months ended                                Research    
September 30, 2013
                        Machine       Engineered    and           Total
(in thousands)         Clothing     Composites   Unallocated  Company
Income from            $ 96,803     ($4,460 )  ($83,162  )  $ 9,181    
continuing operations
Interest expense, net   -          -         11,056       11,056   
Income tax expense      -          -         6,386        6,386    
Depreciation and        34,123     5,585     8,044        47,752   
amortization
EBITDA                  130,926    1,125     (57,676   )   74,375   
Restructuring and       26,673     540       -            27,213   
other, net
Foreign currency        133        -         3,882        4,015    
revaluation losses
Gain on sale of
former manufacturing    -          -         (3,763    )   (3,763   )
facility
Adjusted EBITDA        $ 157,732   $ 1,665     ($57,557  )  $ 101,840  


Table 11
Nine Months ended                                   Research
September 30, 2012
                        Machine       Engineered    and           Total
(in thousands)         Clothing     Composites   Unallocated  Company
Income/(loss) from     $ 120,760    ($653   )  ($168,930 )   ($48,823 )
continuing operations
Interest expense, net   -          -         12,610       12,610   
Income tax              -          -         (32,650   )   (32,650  )
expense/(benefit)
Depreciation and        35,267     4,325     7,741        47,333   
amortization
EBITDA                  156,027    3,672     (181,229  )   (21,530  )
Restructuring and       6,315      -         (166      )   6,149    
other, net
Foreign currency        446        3         2,884        3,333    
revaluation losses
Pension plan            -          -         119,735      119,735  
settlement charges
Adjusted EBITDA        $ 162,788   $ 3,675     ($58,776  )  $ 107,687  


This press release may contain statements, estimates, 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” and similar expressions
identify forward-looking statements, which generally are not historical in
nature. 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) that
could cause actual results to differ materially from the Company’s historical
experience and our present expectations or projections.

Forward-looking statements in this release or in the webcast include, without
limitation, statements about economic and paper industry trends and conditions
during 2013 and in future years; sales, EBITDA, Adjusted EBITDA and operating
income expectations in 2013 and in future periods 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 AEC sales
growth potential; the amount and timing of capital expenditures, future tax
rates and cash paid for taxes, depreciation and amortization; the amount and
timing of charges related to announced restructuring activities; future debt
levels and debt covenant ratios; and 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.

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)

Three Months Ended                                 Nine Months Ended
September 30,                                        September 30,
2013         2012                                   2013         2012
                                                                   
$ 183,147    $ 194,589     Net sales                $ 567,775     $ 566,606
 115,146     114,938    Cost of goods sold        349,572     340,169 
                                                                   
  68,001        79,651      Gross profit               218,203       226,437
                            Selling, general, and
  39,143        41,166      administrative             117,690       125,335
                            expenses
                            Technical, product
  13,347        12,634      engineering, and           41,040        39,019
                            research expenses
  2,256         2,739       Restructuring and          27,213        6,149
                            other, net
 -           -          Pension settlement        -           119,735 
                            expense
                                                                   
  13,255        23,112      Operating                  32,260        (63,801 )
                            income/(loss)
  3,484         3,997       Interest expense, net      11,056        12,610
 2,692       3,069      Other                     5,637       5,062   
                            expense/(income), net
                                                                   
  7,079         16,046      Income/(loss) before       15,567        (81,473 )
                            income taxes
 2,381       6,965      Income tax                6,386       (32,650 )
                            expense/(benefit)
                                                                   
 4,698       9,081      Income/(loss) from        9,181       (48,823 )
                            continuing operations
                                                                   
                            (Loss)/income from
  -             -           operations of              (575    )     4,776
                            discontinued business
  -             (301    )   Gain/(loss) on sale of     -             92,376
                            discontinued business
                            Income tax
 -           (683    )   (benefit)/expense on      (224    )    25,570  
                            discontinued
                            operations
                            (Loss)/income from
 -           382        discontinued              (351    )    71,582  
                            operations
$ 4,698      $ 9,463      Net income               $ 8,830      $ 22,759  
                                                                   
                            Earnings per share -
                            Basic
$ 0.15        $ 0.29        Income/(loss) from       $ 0.29          ($1.56  )
                            continuing operations
 0.00        0.01       Discontinued              (0.01   )    2.29    
                            operations
$ 0.15       $ 0.30       Net income               $ 0.28       $ 0.73    
                                                                   
                            Earnings per share -
                            Diluted
$ 0.15        $ 0.29        Income/(loss) from       $ 0.29          ($1.55  )
                            continuing operations
 0.00        0.01       Discontinued              (0.01   )    2.27    
                            operations
$ 0.15       $ 0.30       Net income               $ 0.28       $ 0.72    
                                                                   
                            Shares used in
                            computing earnings per
                            share:
  31,719        31,363      Basic                      31,615        31,340
  32,010        31,550      Diluted                    31,913        31,550
                                                                   
$ 0.15        $ 0.14        Dividends per share      $ 0.44        $ 0.41


ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)

                                                September 30,  December 31,
                                                 2013            2012
ASSETS
Cash and cash equivalents                        $ 212,809       $ 190,718
Accounts receivable, net                           158,793         171,535
Inventories                                        118,955         119,183
Income taxes receivable and deferred               20,156          20,594
Prepaid expenses and other current assets         12,019        10,435    
Total current assets                               522,732         512,465
                                                                 
Property, plant and equipment, net                 416,446         420,154
Intangibles                                        674             848
Goodwill                                           77,950          76,522
Deferred taxes                                     118,334         123,886
Other assets                                      28,149        22,822    
Total assets                                     $ 1,164,285    $ 1,156,697 
                                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable                          $ 565           $ 586
Accounts payable                                   39,161          35,117
Accrued liabilities                                136,874         103,257
Current maturities of long-term debt               55,014          83,276
Income taxes payable and deferred                 3,293         13,552    
Total current liabilities                          234,907         235,788
                                                                 
Long-term debt                                     252,115         235,877
Other noncurrent liabilities                       110,048         136,012
Deferred taxes and other credits                  52,998        55,509    
Total liabilities                                 650,068       663,186   
                                                                 
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; issued       37              37
36,954,027 in 2013 and 36,642,204 in 2012
Class B Common Stock, par value $.001 per
share; authorized 25,000,000 shares; issued        3               3
and outstanding 3,236,098 in 2013 and 2012
Additional paid in capital                         399,973         395,381
Retained earnings                                  430,676         435,775
Accumulated items of other comprehensive
income:
Translation adjustments                            (3,661    )     (7,659    )
Pension and postretirement liability               (53,871   )     (69,484   )
adjustments
Derivative valuation adjustment                    (1,369    )     (2,878    )
Treasury stock (Class A), at cost 8,463,635       (257,571  )    (257,664  )
shares in 2013 and 8,467,873 in 2012
Total shareholders' equity                        514,217       493,511   
Total liabilities and shareholders' equity       $ 1,164,285    $ 1,156,697 


ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)

Three Months Ended                                Nine Months Ended
September 30,                                       September 30,
2013         2012                                  2013         2012
                            OPERATING ACTIVITIES
$ 4,698       $ 9,463       Net income              $ 8,830       $ 22,759
                            Adjustments to
                            reconcile net income
                            to net cash provided
                            by /(used in)
                            operating activities:
  14,230        13,953      Depreciation              42,868        42,638
  1,567         1,593       Amortization              4,884         4,862
  -             210         Noncash interest          -             824
                            expense
                            Change in long-term
  (283    )     (1,362  )   liabilities, deferred     (4,274  )     (126,606 )
                            taxes and other
                            credits
                            Write-off of pension
  -             -           liability adjustment      -             118,350
                            due to settlement
                            Provision for
  264           -           write-off of              329           200
                            property, plant and
                            equipment
  -             301         Loss/(gain) on            (3,763  )     (92,376  )
                            disposition of assets
  (420    )     (26     )   Excess tax benefit of     (944    )     (37      )
                            options exercised
                            Compensation and
  287           392         benefits paid or          (887    )     1,795
                            payable in Class A
                            Common Stock
                                                                  
                            Changes in operating
                            assets and
                          liabilities, net of
                            business
                            divestitures:
  5,759         3,655       Accounts receivable       (479    )     (6,870   )
  290           8,505       Inventories               (240    )     8,376
  327           746         Prepaid expenses and      (1,706  )     (251     )
                            other current assets
  129           2,840       Income taxes prepaid      309           10,232
                            and receivable
  4,516         (4,216  )   Accounts payable          3,924         (4,241   )
  4,076         5,707       Accrued liabilities       25,005        13,071
  (4,101  )     1,768       Income taxes payable      (8,978  )     (762     )
 (593    )    (359    )   Other, net               (1,824  )    (2,242   )
                            Net cash provided
 30,746      43,170     by/(used in)             63,054      (10,278  )
                            operating activities
                                                                  
                            INVESTING ACTIVITIES
                            Purchases of
  (18,378 )     (11,047 )   property, plant and       (46,186 )     (25,237  )
                            equipment
  (728    )     (146    )   Purchased software        (1,376  )     (154     )
  -             -           Proceeds from sale of     6,268         -
                            assets
                            Proceeds from sale of
 13,000      -          discontinued             13,000      150,654  
                            operations, net of
                            expenses
                            Net cash (used
 (6,106  )    (11,193 )   in)/provided by          (28,294 )    125,263  
                            investing activities
                                                                  
                            FINANCING ACTIVITIES
  5,271         7,000       Proceeds from             57,176        45,164
                            borrowings
  (18,562 )     (29,131 )   Principal payments on     (69,221 )     (98,354  )
                            debt
  1,661         811         Proceeds from options     4,629         1,079
                            exercised
  420           26          Excess tax benefit of     944           37
                            options exercised
  -             -           Debt acquisition          (1,639  )     -
                            costs
 (4,747  )    (4,390  )   Dividends paid           (9,170  )    (12,528  )
                            Net cash (used
 (15,957 )    (25,684 )   in)/provided by          (17,281 )    (64,602  )
                            financing activities
                                                                  
                            Effect of exchange
 6,805       3,054      rate changes on cash     4,612       4,647    
                            and cash equivalents
                                                                  
                            Increase/(decrease)
  15,488        9,347       in cash and cash          22,091        55,030
                            equivalents
                            Cash and cash
 197,321     164,592    equivalents at           190,718     118,909  
                            beginning of period
                            Cash and cash
$ 212,809    $ 173,939    equivalents at end of   $ 212,809    $ 173,939  
                            period

Contact:

Albany International Corp.
Investors:
John Cozzolino, 518-445-2281
john.cozzolino@albint.com
or
Media:
Susan Siegel, 603-330-5866
susan.siegel@albint.com
 
Press spacebar to pause and continue. Press esc to stop.