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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:
March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 1-10026
ALBANY INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

216 Airport DriveRochesterNew Hampshire
(Address of principal executive offices)

14-0462060
(IRS Employer Identification No.)

03867
(Zip Code)

603-330-5800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par value per shareAIN
The New York Stock Exchange (NYSE)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No
The registrant had 31.2 million shares of Class A Common Stock outstanding as of April 15, 2024.



ALBANY INTERNATIONAL CORP.
TABLE OF CONTENTS
Page No.
Consolidated balance sheets as of March 31, 2024 and December 31, 2023



ITEM 1. FINANCIAL STATEMENTS

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
20242023
Net revenues$313,330 $269,096 
Cost of goods sold204,644 169,778 
Gross profit108,686 99,318 
Selling, general, and administrative expenses54,835 48,479 
Technical and research expenses12,665 10,277 
Restructuring expenses, net2,209 20 
Operating income38,977 40,542 
Interest expense/(income), net3,319 3,290 
Other (income)/expense, net(2,982)(455)
Income before income taxes38,640 37,707 
Income taxes11,271 10,621 
Net income27,369 27,086 
Net income attributable to the noncontrolling interest78 197 
Net income attributable to the Company$27,291 $26,889 
Earnings per share attributable to Company shareholders - Basic$0.87 $0.86 
Earnings per share attributable to Company shareholders - Diluted$0.87 $0.86 
Shares of the Company used in computing earnings per share:
Basic31,209 31,131 
Diluted31,291 31,217 
Dividends declared per Class A share$0.26 $0.25 
The accompanying notes are an integral part of the consolidated financial statements
1

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(in thousands)
(unaudited)
Three Months Ended
March 31,
20242023
Net income$27,369 $27,086 
Other comprehensive income/(loss), before tax:
Foreign currency translation(11,831)13,440 
Amortization of pension liability adjustments:
Prior service credit(38)(1,031)
Net actuarial loss178 346 
Payments and amortization related to interest rate swaps included in earnings(4,038)(3,223)
Derivative valuation adjustment1,194 (662)
Income taxes related to items of other comprehensive income/(loss):
Amortization of prior service credit11 315 
Amortization of net actuarial loss(54)(105)
Payments and amortization related to interest rate swaps included in earnings1,022 815 
Derivative valuation adjustment(302)168 
Comprehensive income13,511 37,149 
Comprehensive income attributable to the noncontrolling interest124 435 
Comprehensive income attributable to the Company$13,387 $36,714 
The accompanying notes are an integral part of the consolidated financial statements
2

ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
March 31, 2024December 31, 2023
Assets
Cash and cash equivalents$125,412 $173,420 
Accounts receivable, net305,495 287,781 
Contract assets, net179,223 182,281 
Inventories166,025 169,567 
Income taxes prepaid and receivable11,686 11,043 
Prepaid expenses and other current assets57,331 53,872 
Total current assets845,172 877,964 
Property, plant and equipment, net589,970 601,989 
Intangibles, net42,839 44,646 
Goodwill178,704 180,181 
Deferred income taxes24,153 22,941 
Noncurrent receivables, net 4,392 
Other assets117,342 102,901 
Total assets$1,798,180 $1,835,014 
Liabilities and Shareholders' Equity
Accounts payable$80,778 $87,104 
Accrued liabilities118,181 142,988 
Current maturities of long-term debt4,445 4,218 
Income taxes payable8,586 14,369 
Total current liabilities211,990 248,679 
Long-term debt434,689 452,667 
Other noncurrent liabilities151,121 139,385 
Deferred taxes and other liabilities26,815 26,963 
Total liabilities824,615 867,694 
Commitments and Contingencies (Note 16)
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; 40,898,219 issued in 2024 and 40,856,910 in 2023
41 41 
Additional paid in capital449,028 448,218 
Retained earnings1,030,111 1,010,942 
Accumulated items of other comprehensive income:
Translation adjustments(137,017)(124,901)
Pension and postretirement liability adjustments(16,964)(17,346)
Derivative valuation adjustment6,955 9,079 
Treasury stock (Class A), at cost; 9,661,845 shares in 2024 and 2023
(364,665)(364,665)
Total shareholders' equity967,489 961,368 
Noncontrolling interest6,076 5,952 
Total equity973,565 967,320 
Total liabilities and shareholders' equity$1,798,180 $1,835,014 
The accompanying notes are an integral part of the consolidated financial statements
3

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
March 31,
20242023
Cash flows from operating activities:
Net income$27,369 $27,086 
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation20,556 15,864 
Amortization1,748 1,503 
Change in deferred taxes and other liabilities(675)(887)
Impairment of property, plant and equipment49 100 
Non-cash interest expense256 280 
Compensation and benefits paid or payable in Class A Common Stock810 378 
Provision for credit losses from uncollected receivables and contract assets365 309 
Foreign currency remeasurement (gain) on intercompany loans(792)(1,732)
Fair value adjustment on foreign currency options280 58 
Changes in operating assets and liabilities that provided/(used) cash:
Accounts receivable(17,061)(13,702)
Contract assets2,982 (4,403)
Inventories1,917 (12,360)
Prepaid expenses and other current assets(6,525)(2,191)
Income taxes prepaid and receivable(721)(693)
Accounts payable7,730 5,214 
Accrued liabilities(22,739)(23,137)
Income taxes payable(5,466)(10,996)
Noncurrent receivables(178)867 
Other noncurrent liabilities506 7 
Other, net(814)2,042 
Net cash provided by/(used in) operating activities9,597 (16,393)
Cash flows from investing activities:
Purchases of property, plant and equipment(26,859)(16,275)
Purchased software(21) 
Net cash used in investing activities(26,880)(16,275)
Cash flows from financing activities:
Proceeds from borrowings43,237 58,000 
Principal payments on debt(60,750)(6,000)
Taxes paid in lieu of share issuance(2,446)(3,136)
Dividends paid(8,110)(7,778)
Net cash (used in)/provided by financing activities(28,069)41,086 
Effect of exchange rate changes on cash and cash equivalents(2,656)4,064 
(Decrease)/increase in cash and cash equivalents(48,008)12,482 
Cash and cash equivalents at beginning of period173,420 291,776 
Cash and cash equivalents at end of period$125,412 $304,258 
The accompanying notes are an integral part of the consolidated financial statements
4

ALBANY INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Significant Accounting Policies
Basis of Presentation
In the opinion of management, the accompanying consolidated financial information reflects all adjustments necessary for a fair presentation of Albany International Corp.'s ("Albany", the "Registrant", the "Company", "we", "us", or "our") financial position, results of operations and cash flows for the interim periods presented, but do not require all disclosures required by the accounting principles generally accepted in the United States ("GAAP"). All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

2. Reportable Segments and Revenue Recognition
The Company is organized based on the nature of its products and is composed of two reportable segments, Machine Clothing ("MC") and Albany Engineered Composites ("AEC"), each overseen by a Segment President. These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decisions Maker ("CODM"), reviews operating results for the purpose of allocating resources and assessing performance. The Company has not aggregated operating segments for purposes of identifying reportable segments.

Machine Clothing:
5

The Machine Clothing (“MC”) segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel products, nonwovens, fiber cement and for several other industrial applications. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure. We manufacture belts for each section of the paper machine and for every grade of paper. We sell our MC products directly to customer end-users in countries across the globe. MC's products, manufacturing processes, and distribution channels are substantially the same in each region of the world in which we operate.
On August 31, 2023, the Company completed the acquisition of Heimbach GmbH (“Heimbach”), a privately-held manufacturer of paper machine clothing and technical textiles. The financial results of the acquired company are included in the Machine Clothing reportable segment.
Albany Engineered Composites:
The Albany Engineered Composites (“AEC”) segment provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, the SAFRAN Group (“SAFRAN”) owns a 10 percent noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract, where revenue is determined by a cost-plus-fee agreement. The LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircraft. AEC's largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and cases for CFM International's LEAP engine) accounted for approximately 16 percent of the Company's consolidated Net revenues in 2023.
AEC net sales to SAFRAN were $50.1 million and $45.3 million in the first three months of 2024 and 2023, respectively. The total of Accounts receivable, Contract assets and Noncurrent receivables due from SAFRAN amounted to $89.6 million and $93.8 million as of March 31, 2024 and December 31, 2023, respectively.
Other significant programs for AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing commercial programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine. For the year ended December 31, 2023, approximately 39 percent of AEC revenues were related to U.S. government contracts or programs.
The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements:
Three months ended March 31,
(in thousands)
20242023
Net revenues
Machine Clothing
$185,217 $153,222 
Albany Engineered Composites128,113 115,874 
Consolidated revenues$313,330 $269,096 
Operating income/(loss)
Machine Clothing
$48,110 $48,964 
Albany Engineered Composites9,188 9,418 
Corporate expenses(18,321)(17,840)
Consolidated Operating income$38,977 $40,542 
Reconciling items:
Interest income(1,123)(1,102)
Interest expense
4,442 4,392 
Other (income)/expense, net(2,982)(455)
Income before income taxes$38,640 $37,707 
First quarter results include Heimbach, which was acquired August 31, 2023. Heimbach contributed $37.9 million of net revenues and $(2.9) million of operating loss for the three months ended March 31, 2024.
Corporate expenses include global information system costs of $8.3 million and $6.2 million for the three months ended March 31, 2024 and 2023, respectively.
Revenue Recognition:
6

Products and services provided under long-term contracts represent a significant portion of revenues in the Albany Engineered Composites segment and we account for these contracts over time, primarily using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs. Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead rates, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. Changes in the estimated profitability of long-term contracts decreased operating income by $0.9 million during the first three months of 2024, compared to a decrease of $0.7 million in the same period last year.
We disaggregate revenue earned from contracts with customers for each of our business segments and product groups based on the timing of revenue recognition, and groupings used for internal review purposes.
The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended March 31, 2024:
Three months ended March 31, 2024
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$184,235 $982 $185,217 
Albany Engineered Composites:
   ASC 49,739 49,739 
   Other AEC5,757 72,617 78,374 
Total Albany Engineered Composites
5,757 122,356 128,113 
                                         
Total revenues$189,992 $123,338 $313,330 
The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended March 31, 2023:
Three months ended March 31, 2023
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$152,278 $944 $153,222 
Albany Engineered Composites:
   ASC 44,532 44,532 
   Other AEC5,793 65,549 71,342 
Total Albany Engineered Composites
5,793 110,081 115,874 
Total revenues$158,071 $111,025 $269,096 










7

The following table disaggregates MC segment revenue by significant product groupings (paper machine clothing ("PMC") and engineered fabrics); and for PMC, the geographical region to which the paper machine clothing was sold:
Three months ended March 31,
(in thousands)
20242023
Americas PMC$83,501 $83,378 
Eurasia PMC
76,190 51,737 
Engineered Fabrics25,526 18,107 
Total Machine Clothing Net revenues$185,217 $153,222 
We do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contracts in the MC segment are generally for periods of less than a year and certain contracts in the AEC segment are relatively short duration firm-fixed-price orders. Remaining performance obligations on contracts that had an original duration of greater than one year totaled $752 million and $821 million as of March 31, 2024 and 2023, respectively, and related primarily to firm fixed price contracts in the AEC segment. Of the remaining performance obligations as of March 31, 2024, we expect to recognize as revenue approximately $127 million during 2024, $168 million during 2025, $143 million during 2026, and the remainder thereafter.

3. Pensions and Other Postretirement Benefit Plans
The Company has defined benefit pension plans covering certain U.S. and non-U.S. employees. The Company also provides certain postretirement benefits to retired employees in the U.S. and Canada. The Company accrues the cost of providing these benefits during the active service period of the employees.
The composition of the net periodic benefit cost/(income) for the three months ended March 31, 2024 and 2023, was as follows:
Pension plans
Other postretirement benefits
(in thousands)
2024202320242023
Components of net periodic benefit cost/(income):
Service cost
$497 $281 $12 $15 
Interest cost1,532 1,063 354 468 
Expected return on assets
(1,358)(971)  
Amortization of prior service cost/(income)(7)(8)(31)(1,023)
Amortization of net actuarial loss
187 139 (9)207 
Net periodic benefit cost/(credit)
$851 $504 $326 $(333)
The amount of net benefit cost/(credit) is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement. There were no such events in the first three months of 2024 or 2023.
Service cost for defined benefit pension and postretirement plans are reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net periodic benefit cost are included in the line item Other (income)/expense, net in the Consolidated Statements of Income.

4. Restructuring
Restructuring costs in the first quarter of 2024 were related to reductions in workforce at various AEC locations, while restructuring charges for the first quarter of 2023 were not significant. There were no charges related to the impairment of assets for the periods presented.




8

The following table summarizes charges reported in the Consolidated Statements of Income under "Restructuring expenses, net":
Three months ended March 31,
(in thousands)20242023
Machine Clothing$21 $20 
Albany Engineered Composites2,188  
Total$2,209 $20 
The table below presents the year-to-date changes in restructuring liabilities for 2024 and 2023, all of which are related to termination and other costs:
(in thousands)December 31, 2023Restructuring
charges accrued
PaymentsCurrency
translation /other
March 31, 2024
Total termination and other costs$ $2,209 $(221)$(1)$1,987 
(in thousands)December 31, 2022Restructuring
charges accrued
PaymentsCurrency
translation /other
March 31, 2023
Total termination and other costs$ $20 $(20)$ $ 

5. Other (Income)/Expense, net
The components of Other (income)/expense, net are:
Three months ended March 31,
(in thousands)
20242023
Currency transaction (gains)/losses$(1,292)$60 
Bank fees and amortization of debt issuance costs
43 59 
Components of net periodic pension and postretirement cost other than service cost668 (125)
Other
(2,401)(449)
Total other (income)/expense, net$(2,982)$(455)
Other (income)/expense, net, included foreign currency related transactions which resulted in gains of $1.3 million in the first three months of 2024, as compared to losses of $0.1 million in the same period last year. The stronger Mexican Peso and weaker Euro during the three months ended March 31, 2024 led to a net gain on foreign currency related transactions, as compared to the same period last year. Other (income)/expense, net, also included gains on changes in fair value of derivative instruments, gains on sales of fixed assets, and rental income.

6. Income Taxes
The Company's effective income tax rate for the three months ended March 31, 2024 and 2023, is as follows:
Three months ended March 31,
20242023
Effective income tax rate29.2 %28.2 %
Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting. Under this method, loss jurisdictions which cannot recognize a tax benefit with regard to their generated losses are excluded from the annual effective tax rate calculation and their taxes will be recorded discretely in each quarter.
9

Our 2024 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of taxation upon foreign operations, and forecasted permanent differences. Our actual effective tax rates were 29.2% and 28.2% for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024 included a $2.4 million benefit related to the true-up for prior year estimated taxes treated as a discrete tax benefit and an additional increase of $1.2 million in the valuation allowance treated as a discrete tax expense. The rate for the first quarter of 2024 was higher than the first quarter of 2023 mainly due to an unfavorable change in the jurisdictional mix of pre-tax earnings forecasted for 2024.
The Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2013-2024. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. It is reasonably possible that within the next 12 months, unrecognized tax benefits related to federal tax matters under audit may decrease by up to $0.8 million based on current estimates.

7. Earnings Per Share
The amounts used in computing earnings per share and the weighted average number of shares of potentially dilutive securities are as follows:
Three months ended March 31,
(in thousands, except market price and earnings per share)
20242023
Net income attributable to the Company$27,291 $26,889 
Weighted average number of shares:
Weighted average number of shares used in calculating basic net income per share
31,209 31,131 
Effect of dilutive stock-based compensation plans:
Restricted stock units and multi-year awards82 86 
Weighted average number of shares used in calculating diluted net income per share31,291 31,217 
Net income attributable to the Company per share:
Basic$0.87 $0.86 
Diluted$0.87 $0.86 

8. Accumulated Other Comprehensive Income ("AOCI")
The table below presents changes in the components of AOCI for the period from December 31, 2023 to March 31, 2024:
(in thousands)
Translation
adjustments
Pension and
postretirement
liability
adjustments
Derivative
valuation
adjustment
Total Other
Comprehensive
Income
December 31, 2023$(124,901)$(17,346)$9,079 $(133,168)
Other comprehensive income/(loss) before reclassifications, net of tax
(12,116)285 892 (10,939)
Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax— — (3,016)(3,016)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax
— 97 — 97 
Net current period other comprehensive income(12,116)382 (2,124)(13,858)
March 31, 2024$(137,017)$(16,964)$6,955 $(147,026)
10

The table below presents changes in the components of AOCI for the period from December 31, 2022 to March 31, 2023:
(in thousands)
Translation
adjustments
Pension and
postretirement
liability
adjustments
Derivative
valuation
adjustment
Total Other
Comprehensive
Income
December 31, 2022$(146,851)$(15,783)$17,707 $(144,927)
Other comprehensive income/(loss) before reclassifications, net of tax13,881 (441)(494)12,946 
Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax— — (2,408)(2,408)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax— (475)— (475)
Net current period other comprehensive income13,881 (916)(2,902)10,063 
March 31, 2023$(132,970)$(16,699)$14,805 $(134,864)
The components of AOCI that are reclassified to the Consolidated Statements of Income relate to our pension and postretirement plans and interest rate swaps.
The table below presents the expense/(income) amounts reclassified from AOCI, and the line items of the Consolidated Statements of Income that were affected for the three months ended March 31, 2024 and 2023:
Three months ended March 31,
(in thousands)
20242023
Pre-tax Derivative valuation reclassified from Accumulated Other Comprehensive Income:
Other (income)/expense, net related to interest rate swaps included in Income before taxes$(4,038)$(3,223)
Income tax effect1,022 815 
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income
$(3,016)$(2,408)
Pre-tax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
Amortization of prior service credit$(38)$(1,031)
Amortization of net actuarial loss
178 346 
Total pre-tax amount reclassified (a)
140 (685)
Income tax effect(43)210 
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income$97 $(475)

(a)These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 3. Pensions and Other Postretirement Benefit Plans).

9. Noncontrolling Interests
Effective October 31, 2013, Safran S.A. (Safran) acquired a 10 percent equity interest in Albany Safran Composites, LLC ("ASC").
On August 31, 2023, the Company acquired all the outstanding shares of Heimbach, a privately held manufacturer of paper machine clothing with headquarters in Düren, Germany. In July 2021, Heimbach acquired 85% of Arcari, SRL (“Arcari”). Arcari is a manufacturer of textile and plastic industrial technical products and conveyor belts. On the date of the acquisition, the fair value of the noncontrolling interest in Arcari was $0.5 million. For the three months ended March 31, 2024, the net income/(loss) attributable to Arcari’s noncontrolling interest was less than $0.1 million and the noncontrolling interest balance at March 31, 2024 was $0.5 million.

11

The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiaries:
ASC Noncontrolling InterestThree months ended March 31,
(in thousands, except percentages)20242023
Net income of Albany Safran Composites (ASC)$1,014 $2,282 
Less: Return attributable to the Company's preferred holding308 308 
Net income of ASC available for common ownership$706 $1,974 
Ownership percentage of noncontrolling shareholder10 %10 %
Net income attributable to the noncontrolling interest$71 $197 
Noncontrolling interest, beginning of year$5,423 $4,494 
Net income attributable to noncontrolling interest71 197 
Changes in other comprehensive income attributable to the noncontrolling interest57 238 
ASC Noncontrolling interest, end of interim period
$5,551 $4,929 
Arcari Noncontrolling interest, end of interim period
$525 $ 
Total Noncontrolling interest, end of interim period$6,076 $4,929 
10. Accounts Receivable
Accounts receivable, net includes Trade and other accounts receivable and Bank promissory notes, net of Allowance for expected credit losses. In connection with certain revenues in Asia, the Company accepts a bank promissory note as customer payment. The notes may be presented for payment at maturity, which is less than one year. As of March 31, 2024 and December 31, 2023, Accounts receivable consisted of the following:
(in thousands)March 31, 2024December 31, 2023
Trade and other accounts receivable$287,862 $272,351 
Bank promissory notes22,699 20,690 
Allowance for expected credit losses(5,066)(5,260)
Accounts receivable, net$305,495 $287,781 
The Company had Noncurrent receivables in the AEC segment that represent revenue earned, which had extended payment terms. In 2023, the payment terms were amended and the Noncurrent receivables are now included in Trade and other accounts receivable. As of March 31, 2024 and December 31, 2023, Noncurrent receivables consisted of the following:
(in thousands)March 31, 2024December 31, 2023
Noncurrent receivables$ $4,414 
Allowance for expected credit losses
 (22)
Noncurrent receivables, net$ $4,392 

11. Contract Assets and Liabilities
Contract assets include unbilled amounts typically resulting from revenues under contracts when the over time method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to Accounts receivable, net when the entitlement to pay becomes unconditional and the customer is invoiced. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract liabilities are included in Accrued liabilities in the Consolidated Balance Sheets.
Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.
12

As of March 31, 2024 and December 31, 2023, Contract assets and Contract liabilities consisted of the following:
(in thousands)March 31, 2024December 31, 2023
Contract assets$180,122 $183,189 
Allowance for expected credit losses
(899)(908)
Contract assets, net$179,223 $182,281 
Contract liabilities$6,034 $7,127 
Contract assets, net decreased $3.1 million during the three months ended March 31, 2024. The decrease was primarily due to a decrease in unbilled revenue primarily related to commercial and defense programs, partially offset by an increase in unbilled revenue on space programs. There were no impairment losses related to our Contract assets during the three months ended March 31, 2024 and March 31, 2023.
Contract liabilities decreased $1.1 million during the three months ended March 31, 2024, primarily due to revenue recognized from satisfied performance obligations exceeding customer advance payments for commercial and defense programs. Revenue recognized for the three months ended March 31, 2024 and 2023 that was included in the Contract liability balance at the beginning of the year was $3.5 million and $6.7 million, respectively.

12. Inventories
Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead. Raw material inventories are valued on an average cost basis. Other inventory cost elements are valued at cost, using the first-in, first-out method. The Company writes down the inventories for estimated obsolescence and to lower of cost or net realizable value based upon assumptions about future demand and market conditions. If actual demand or market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Once established, the original cost of the inventory less the related write-down represents the new cost basis of such inventories.
As of March 31, 2024 and December 31, 2023, Inventories consisted of the following:
(in thousands)March 31, 2024December 31, 2023
Raw materials$77,391 $79,611 
Work in process
63,764 67,743 
Finished goods24,870 22,213 
Total inventories
$166,025 $169,567 












13


13. Goodwill and Other Intangible Assets
The following table sets forth the gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of March 31, 2024 and December 31, 2023:
March 31, 2024
(in thousands)Amortization 
life in years
Gross carrying amountAccumulated amortizationNet carrying amount
Finite-lived assets:
AEC Trademarks and trade names
6-15
$208 $(189)$19 
AEC Technology
10-15
6,033 (2,824)3,209 
AEC Intellectual property
15
1,250 (360)890 
AEC Customer relationships
8-15
69,290 (44,721)24,569 
Heimbach Developed technology
9
8,789 (572)8,217 
Total Finite-lived intangible assets$85,570 $(48,666)$36,904 
Indefinite-lived intangible assets:
Heimbach Trade name$5,935 $ $5,935 
MC Goodwill65,785  65,785 
AEC Goodwill112,919  112,919 
Total Indefinite-lived intangible assets:$184,639 $ $184,639 
December 31, 2023
(in thousands)Amortization 
life in years
Gross carrying amountAccumulated amortizationNet carrying amount
Finite-lived assets:
AEC Trademarks and trade names
6-15
$208 $(186)$22 
AEC Technology
10-15
6,161 (2,735)3,426 
AEC Intellectual property
15
1,250 (339)911 
AEC Customer relationships
8-15
69,360 (43,875)25,485 
Heimbach Developed technology
9
9,042 (310)8,732 
Total Finite-lived assets$86,021 $(47,445)$38,576 
Indefinite-lived intangible assets:
Heimbach Trade name$6,070 $— $6,070 
MC Goodwill66,873 — 66,873 
AEC Goodwill113,308 — 113,308 
Total Indefinite-lived intangible assets:$186,251 $— $186,251 









14

The changes in intangible assets, net and goodwill from December 31, 2023 to March 31, 2024, were as follows:
(in thousands)December 31, 2023Other
Changes
AmortizationCurrency
Translation
March 31, 2024
Finite-lived intangible assets:
AEC Trademarks and trade names$22 $ $(3)$ $19 
AEC Technology3,426  (142)(75)3,209 
AEC Intellectual property911  (21) 890 
AEC Customer relationships25,485  (870)(46)24,569 
Heimbach Developed technology8,732  (262)(253)8,217 
Total Finite-lived intangible assets$38,576 $ $(1,298)$(374)$36,904 
Indefinite-lived intangible assets:
Heimbach Trade name$6,070 $ $ $(135)$5,935 
MC Goodwill66,873   (1,088)65,785 
AEC Goodwill113,308   (389)112,919 
Total Indefinite-lived assets:$186,251 $ $ $(1,612)$184,639 

14. Financial Instruments
Debt principally consists of a revolving credit agreement and foreign bank debt assumed in the acquisition of Heimbach.
The following table represents the Company's outstanding debt:
(in thousands, except interest rates)March 31, 2024December 31, 2023
Borrowings under the Amended Credit Agreement(1)$429,000 $446,000 
Foreign bank debt10,134 10,885 
Total bank debt439,134 456,885 
Less: Current maturities of long-term debt4,445 4,218 
Long-term debt$434,689 $452,667 
(1) the credit facility matures in August 2028. At the end of March 31, 2024 and December 31, 2023, the interest rate in effect was 3.34% and 3.49%, respectively, including the effect of interest rate hedging transactions, as described below.
Amended Credit Agreement
On August 16, 2023, we entered into a $800 million unsecured committed Five-Year Revolving Credit Facility Agreement (the “Amended Credit Agreement”). The applicable interest rate for borrowings under the Amended Credit Agreement is based on Term SOFR plus a spread, which is based on our leverage ratio (as defined in the Amended Credit Agreement) at the time of a borrowing as follows:
Leverage RatioCommitment FeeABR SpreadTerm Benchmark/ Daily
Simple SOFR Spread
<1.00:1.00
0.275%0.500%1.500%
1.00:1.00 and < 2.00:1.00
0.300%0.625%1.625%
2.00:1.00 and < 3.00:1.00
0.325%0.750%1.750%
3.00:1.00
0.350%1.000%2.000%
As of March 31, 2024, the applicable interest rate for borrowings under the Amended Credit Agreement was based on one-month term SOFR plus the spread, which was 1.625%.
As of March 31, 2024, there was $429 million of borrowings outstanding under the Amended Credit Agreement and we had borrowings available of $371 million, based on our maximum leverage ratio and our Consolidated EBITDA (as defined in the Amended Credit Agreement).
15

The Amended Credit Agreement contains customary terms including affirmative covenants, negative covenants and events of default. Under the Amended Credit Agreement, we are required to maintain a leverage ratio (as defined in the Credit Agreement) of not greater than 3.75 to 1.00, or 4.25 to 1.00 after a significant acquisition. We are also required to maintain a minimum interest coverage ratio (as defined in the Credit Agreement) of greater than 3.00 to 1.00.
As of March 31, 2024, our leverage ratio was 1.17 to 1.00 (as defined in the Amended Credit Agreement) and our interest coverage ratio was 14.38 to 1.00. If our leverage ratio exceeds 3.50 to 1.00, then we are restricted in paying dividends to a maximum amount of $40 million in a calendar year. As of March 31, 2024, we were in compliance with all applicable covenants. We anticipate continued compliance in each of the next four quarters while continuing to monitor future compliance based on current and future economic conditions.
The borrowings are guaranteed by certain of the Company’s subsidiaries, including all significant U.S. subsidiaries (subject to certain exceptions), as defined in the Amended Credit Agreement. Our ability to borrow additional amounts under the Amended Credit Agreement is conditional upon the absence of any defaults, as well as the absence of any material adverse change (as defined in the Amended Credit Agreement).
Interest Rate Swaps
In 2021, we entered into interest rate swap agreements for the period of October 17, 2022 through October 27, 2024. These transactions had the effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on $350 million of indebtedness. We amended the swap agreements on June 29, 2023 replacing the LIBOR (in preparation for the cessation of LIBOR) with SOFR and adjusting the spread.
We pay a fixed blended rate of 0.8828% through October 27, 2024 on $350 million and the counterparties pay a floating rate based on the one-month term SOFR at each monthly calculation date, which on March 18, 2024 was 5.33%. As of March 31, 2024, the all-in rate on the $350M of debt was 2.51%. Upon the expiration of the interest rate swap on October 27, 2024, our interest cost will increase significantly. Beginning in October 2024, our interest cost will be calculated using a floating rate based on the one-month term SOFR.
The interest rate swaps are accounted for as a hedge of future cash flows, as further described in Note 15, Fair-Value Measurements. No cash collateral was received or pledged in relation to the swap agreements.
Foreign Bank Debt
On August 31, 2023, the Company acquired Heimbach. The Company assumed Heimbach’s bank debt in the amount of $32.7 million. The bank debt is held by several European financial institutions, with maturity dates ranging from June 30, 2024 to June 30, 2031. At March 31, 2024 and December 31, 2023, the foreign debt was $10.1 million and $10.9 million, respectively, of which $4.4 million and $4.2 million, respectively, was classified as Current maturities on long-term debt.

15. Fair-Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.
Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
We had no Level 3 financial assets or liabilities at March 31, 2024 or at December 31, 2023, other than certain pension assets as indicated in our December 31, 2023 Annual Report on Form 10-K.


16

The following table presents the fair-value hierarchy for our Level 1 and Level 2 financial and non-financial assets and liabilities, which are measured at fair value on a recurring basis:
March 31, 2024December 31, 2023
Quoted
prices in
active
markets
Significant
other
observable
inputs
Quoted
prices in
active
markets
Significant
other
observable
inputs
(in thousands)
(Level 1)
(Level 2)
(Level 1)
(Level 2)
Fair Value
Assets:
Cash equivalents$19,892 $ $27,157 $ 
Foreign currency option contracts
 1,533  1,725 
Foreign currency forward contracts
 269  199 
Other Assets:
Common stock of unaffiliated foreign public company (a)759  682  
Interest rate swaps 9,404  12,214 
Liabilities
Foreign currency forward contracts
 (160)  
(a)Original cost basis $0.5 million.
Cash equivalents include short-term securities that are considered to be highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities.
The interest rate swaps are accounted for as hedges of future cash flows. The fair value of our interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, and is included in Other assets and/or Other noncurrent liabilities in the Consolidated Balance Sheets. Amounts determined to be due within one year are reclassified to Other current assets and/or Accrued liabilities in the Consolidated Balance Sheets. Unrealized gains and losses on the interest rate swaps flow through the caption Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets. Amounts accumulated in Other comprehensive income are reclassified as interest expense/(income), net when the related interest payments (that is, the hedged forecasted transactions), affect earnings. Interest expense/(income) related to payments under the active swap agreements totaled $(4.0) million for the three months ended March 31, 2024, and $(3.2) million for the three months ended March 31, 2023.
We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results. Foreign currency instruments are entered into periodically and consist of foreign currency option contracts and forward contracts that are valued using quoted prices in active markets obtained from independent pricing sources. These instruments are measured using market foreign exchange prices and are recorded in the Consolidated Balance Sheets as Other current assets and Accounts payable, as applicable. Changes in fair value of these instruments are recorded as gains or losses within Other (income)/expense, net.
When exercised, the foreign currency instruments are net-settled with the same financial institution that bought or sold them. For all positions, whether options or forward contracts, there is a risk from the possible inability of the financial institution to meet the terms of the contracts and the risk of unfavorable changes in interest and currency rates, which may reduce the value of the instruments. We seek to mitigate risk by evaluating the creditworthiness of counterparties and by monitoring the currency exchange and interest rate markets while reviewing the hedging risks and contracts to ensure compliance with our internal guidelines and policies.
(Gains)/losses related to changes in fair value of derivative instruments that were recognized in Other (income)/expense, net in the Consolidated Statements of Income were as follows:
Three months ended March 31,
(in thousands)20242023
Derivatives not designated as hedging instruments:
Foreign currency options (gains)/losses$(118)$16 

17


16. Commitments and Contingencies
Asbestos Litigation
Albany International Corp. is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills. We were defending 3,613 claims as of March 31, 2024.
The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented:
(in thousands, except number of claims)
Opening
Number of
Claims
Claims
Dismissed,
Settled, or
Resolved
New Claims
Closing
Number of
Claims
Amounts Paid to
Settle or
Resolve
For the period ended December 31, 20233,598 19 27 3,606 $74 
For the period ended March 31, 20243,606 4 11 3,613 $9 
We anticipate that additional claims will be filed against the Company and related companies in the future but are unable to predict the number and timing of such future claims. Due to the fact that information sufficient to meaningfully estimate a range of possible loss of a particular claim is typically not available until late in the discovery process, we do not believe a meaningful estimate can be made regarding the range of possible loss with respect to pending or future claims and therefore are unable to estimate a range of reasonably possible loss in excess of amounts already accrued for pending or future claims.
While we believe we have meritorious defenses to these claims, we have settled certain claims for amounts we consider reasonable given the facts and circumstances of each case. Our insurance carrier has defended each case and funded settlements under a standard reservation of rights. As of March 31, 2024, we had resolved, by means of settlement or dismissal, 38,045 claims at a total cost of $10.7 million. Of this amount, almost 100% was paid by our insurance carrier, who has confirmed that we have approximately $140 million of remaining coverage under primary and excess policies that should be available with respect to current and future asbestos claims.
The Company’s subsidiary, Brandon Drying Fabrics, Inc. (“Brandon”), is also a separate defendant in many of the asbestos cases in which Albany is named as a defendant, despite never having manufactured any fabrics containing asbestos. While Brandon was defending against 7,676 claims as of March 31, 2024, only twelve claims have been filed against Brandon since January 1, 2012, and only $15,000 in settlement costs have been incurred since 2001. Brandon was acquired by the Company in 1999 and has its own insurance policies covering periods prior to 1999. Since 2004, Brandon’s insurance carriers have covered 100% of indemnification and defense costs, subject to policy limits and a standard reservation of rights.
In some of these asbestos cases, the Company is named both as a direct defendant and as the “successor in interest” to Mount Vernon Mills (“Mount Vernon”). We acquired certain assets from Mount Vernon in 1993. Certain plaintiffs allege injury caused by asbestos-containing products alleged to have been sold by Mount Vernon many years prior to this acquisition. Mount Vernon is contractually obligated to indemnify the Company against any liability arising out of such products. We deny any liability for products sold by Mount Vernon prior to the acquisition of the Mount Vernon assets. Pursuant to its contractual indemnification obligations, Mount Vernon has assumed the defense of these claims. On this basis, we have successfully moved for dismissal in a number of actions.
We currently do not anticipate, based on currently available information, that the ultimate resolution of the aforementioned proceedings will have a material adverse effect on the financial position, results of operations, or cash flows of the Company. Although we cannot predict the number and timing of future claims, based on the foregoing factors, the trends in claims filed against us, and available insurance, we also do not currently anticipate that potential future claims will have a material adverse effect on our financial position, results of operations, or cash flows.



18


17. Changes in Shareholders’ Equity
The following table summarizes changes in Shareholders’ Equity for the period December 31, 2023 to March 31, 2024:
Class A
Common Stock
Additional paid-in capital
Retained 
earnings
Accumulated items of other comprehensive income
Class A
Treasury Stock
Noncontrolling Interest
Total Shareholders' Equity
(in thousands)
Shares
Amount
Shares
Amount
December 31, 202340,856 $41 $448,218 $1,010,942 $(133,168)9,662 $(364,665)$5,952 $967,320 
Net income— — — 27,291 — — — 78 27,369 
Compensation and benefits paid or payable in shares42 — 810 — — — — — 810 
Dividends declared on Class A Common Stock, $0.26 per share
— — — (8,122)— — — — (8,122)
Cumulative translation adjustments— — — — (12,116)— — 46 (12,070)
Pension and postretirement liability adjustments— — — — 382 — — — 382 
Derivative valuation adjustment— — — — (2,124)— — — (2,124)
March 31, 202440,898 $41 $449,028 $1,030,111 $(147,026)9,662 $(364,665)$6,076 $973,565 

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2022 to March 31, 2023:
Class A
Common Stock
Additional paid-in capital
Retained 
earnings
Accumulated items of other comprehensive income
Class A
Treasury Stock
Noncontrolling Interest
Total 
Shareholders' Equity
(in thousands)
Shares
Amount
Shares
Amount
December 31, 202240,785 $41 $441,540 $931,318 $(144,927)9,675 $(364,923)$4,494 $867,543 
Net income— — — 26,889 — — — 197 27,086 
Compensation and benefits paid or payable in shares58 — 378 — — — — — 378 
Dividends declared on Class A Common Stock, $0.25 per share
— — — (7,792)— — — — (7,792)
Cumulative translation adjustments— — — — 13,881 — — 238 14,119 
Pension and postretirement liability adjustments— — — — (916)— — — (916)
Derivative valuation adjustment— — — — (2,902)— — — (2,902)
March 31, 202340,842 $41 $441,917 $950,415 $(134,864)9,675 $(364,923)$4,929 $897,515 

18. Business Combination
On August 31, 2023, the Company acquired all the outstanding shares of Heimbach, a privately-held manufacturer of paper machine clothing with headquarters in Düren, Germany. For the three months ended March 31, 2024, there were no material adjustments to the assets acquired and liabilities assumed.

19. Subsequent Events
On April 19, 2024, we announced a plan to discontinue manufacturing at our Chungju, South Korea operation, and to transfer production to other international manufacturing facilities owned by the Company. This action will enable the Company to align forming fabric capacity with the local market demand and the needs of customers. The company remains committed to the local papermaking industry and will continue to provide customers with strong expertise in Product Application, Sales and Marketing Service through the current Sales, Service & Application teams located in South Korea. The Company estimates the cash outflows associated with this restructuring to be approximately $6 million, which will include employee-related costs, asset write-offs, and equipment transfer costs.
19


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of the Company. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes.
Forward-looking Statements
This quarterly report and the documents incorporated or deemed to be incorporated by reference in this quarterly report contain statements concerning our future results and performance and other matters that are “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” "forecast," ”look for,” “will,” “should,” “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 prior Quarterly Reports on Form 10-Q) actual results may differ materially from those expressed or implied by such forward-looking statements.
There are a number of risks, uncertainties, and other important factors that could cause actual results to differ materially from the forward-looking statements, including, but not limited to:
Conditions in the industries in which our Machine Clothing and Albany Engineered Composites segments compete, along with the general risks associated with macroeconomic conditions, including higher interest rates, inflationary pressures, or the effects of another pandemic, for an extended period of time;

Across the entire Company, increasing labor, raw material, energy, and logistics costs due to supply chain constraints and inflationary pressures. These challenges have only increased as a result of the ongoing Russia-Ukraine war and the conflict in the Middle East;

Harm caused by changes in our relationships or contracts with suppliers and customers;

In the Machine Clothing segment, greater than anticipated declines in the demand for publication grades of paper, or lower than anticipated growth in other paper grades;

In the Albany Engineered Composites segment, longer-than-expected timeframe for the aerospace industry to utilize existing inventories, unanticipated reductions in demand, delays, technical difficulties, and cancellations in aerospace programs that are expected to generate revenue and drive long-term growth;

Inability of our Machine Clothing or Albany Engineered Composite segments to create additional production capacity in a timely manner or the occurrence of other manufacturing or supply difficulties (including as a result of geopolitical crises, natural disaster, public health crises and epidemics/pandemics, regulatory or otherwise);

Changes in geopolitical conditions impacting countries where the Company does or intends to do business;

Failure to achieve or maintain anticipated profitable growth;

Failure to achieve our strategic initiatives and other goals, including, but not limited to, our sustainability goals;

In the Albany Engineered Composites segment, the estimates and expectations based on aircraft production rates provided by Airbus, Boeing and others;

In the Albany Engineered Composites segment, risks and uncertainties associated with the successful implementation and ramp up of significant new programs, including the ability to manufacture the products to the detailed specifications required and recover start-up costs and other investments in the programs;

Adverse impacts from inflation, an economic slowdown or recession and by disruption in capital and credit markets that might impede our access to credit, increase our borrowing costs and impair the financial soundness of our customers and suppliers;
20



Risks and uncertainties associated with the successful integration of our Heimbach Group acquisition;

Expectations regarding our ability to attract, motivate, and retain the workforce necessary to execute our business strategy;

Adverse impacts from fluctuations in foreign currency exchange rates;

Harm caused by large customer purchase reductions, payment defaults or contract non-renewal;

In the Albany Engineered Composites segment, our contracts with government entities involve future funding and compliance risks;

Costly and disruptive legal disputes and settlements;

Future levels of indebtedness and capital expenditures;

Adverse impacts from changes in tax legislation or challenges to our tax positions;

Cybersecurity incidents or significant computer system compromises or data breaches;

Significant problems with information systems or networks;

Failure to adequately integrate Heimbach into our business systems and processes within the expected timeframe or, failure to or delayed realization of anticipated benefits of the acquisition could adversely impact the Company’s business, financial condition and results of operations; and

Other risks and uncertainties detailed in this report and other periodic reports.
Further information concerning important factors that could cause actual events or results to be materially different from the forward-looking statements can be found in “Business Environment Overview and Trends” sections of this quarterly report, as well as in Item 1A-“Risk Factors” section of our most recent Annual Report on Form 10-K. Although we believe the expectations reflected in our other forward-looking statements are based on reasonable assumptions, it is not possible to foresee or identify all factors that could have a material and negative impact on our future performance. The forward-looking statements included or incorporated by reference in this report are made on the basis of our assumptions and analyses, as of the time the statements are made, in light of our experience and perception of historical conditions, expected future developments, and other factors believed to be appropriate under the circumstances.
Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained or incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.
Business Environment Overview and Trends
Please refer to the Business Environment Overview and Trends in the Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023. The Annual Report on Form 10-K, along with the Company's other filings, can be found on the Securities and Exchange Commission's website, www.sec.gov, as well as on the Company's website: www.albint.com.






21


Consolidated Results of Operations
Net revenues
The following table summarizes our Net revenues by business segment:
Three months ended March 31,
(in thousands, except percentages)
20242023% Change
Machine Clothing$185,217 $153,222 20.9 %
Albany Engineered Composites
128,113 115,874 10.6 %
Total$313,330 $269,096 16.4 %
The following tables provide a comparison of 2024 Net revenues, excluding currency translation effects, to 2023 Net revenues:
(in thousands, except percentages)
Net revenues as reported, Q1 2024(Decrease)/ increase due to changes in currency translation ratesQ1 2024 revenues on same basis as Q1 2023 currency translation ratesNet revenues as reported, Q1 2023% Change compared to Q1 2023, excluding currency rate effects
Machine Clothing$185,217 $(598)$185,815 $153,222 21.3 %
Albany Engineered Composites
128,113 221 127,892 115,874 10.4 %
Total$313,330 $(377)$313,707 $269,096 16.6 %
Net revenues increased 16.4% compared to the same period in 2023, driven by $37.9 million of Net revenues from the Heimbach acquisition and higher Net revenues in AEC, partially offset by lower organic Net revenues at MC.
MC's Net revenues increased 20.9% compared to the first quarter of 2023, driven by Heimbach Net revenues of $37.9 million. This was partially offset by $5.3 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in all grades in Europe. This decrease was partially offset with increases in revenues in North America. Changes in currency translation rates had the effect of decreasing Net revenues $0.6 million.
AEC's Net revenues increased 10.6%, primarily driven by growth on commercial and space programs, partially offset by lower revenues on defense programs. Changes in currency translation rates had the effect of increasing Net revenues $0.2 million.
Gross Profit
The following table summarizes Gross profit by business segment:
Three months ended March 31,
(in thousands, except percentages)
20242023
Machine Clothing$84,655 $77,855 
Albany Engineered Composites
24,031 21,463 
Total$108,686 $99,318 
% of Net revenues34.7 %36.9 %
The increase in 2024 Gross profit, as compared to the same period last year, was driven by higher sales in both segments. Gross profit as a percentage of revenues was as follows:
MC's gross profit margin decreased from 50.8% in 2023 to 45.7% in 2024. This margin decrease was primarily attributable to lower gross margin at Heimbach. Excluding Heimbach, MC's gross profit margin increased to 52.1% in 2024.
AEC's gross profit margin remained largely in line with the prior year, increasing from 18.5% in 2023 to 18.8% in 2024, driven by a favorable shift in program revenue mix. Changes in the estimated profitability of long-term contracts decreased operating income by $0.9 million in 2024, as compared to a decrease of $0.7 million during the same period last year.

22


Selling, General, and Administrative ("SG&A")
The following table summarizes SG&A expenses by business segment:
Three months ended March 31,
(in thousands, except percentages)
20242023
Machine Clothing$29,004 $23,073 
Albany Engineered Composites
7,510 7,566 
Corporate expenses18,321 17,840 
Total