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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:
June 30, 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 Drive, Rochester, New 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 July 15, 2024.


ALBANY INTERNATIONAL CORP.
TABLE OF CONTENTS
Page No.
Consolidated balance sheets as of June 30, 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
June 30,		Six Months Ended
June 30,
2024202320242023
Net revenues$331,994 $274,123 $645,324 $543,219 
Cost of goods sold219,611 171,419 424,255 341,197 
Gross profit112,383 102,704 221,069 202,022 
Selling, general, and administrative expenses55,515 46,760 110,350 95,239 
Technical and research expenses11,860 10,318 24,525 20,595 
Restructuring expenses, net2,103 125 4,312 145 
Operating income42,905 45,501 81,882 86,043 
Interest expense/(income), net2,950 3,106 6,269 6,396 
Other (income)/expense, net5,657 (4,511)2,675 (4,966)
Income before income taxes34,298 46,906 72,938 84,613 
Income tax expense9,578 20,080 20,849 30,701 
Net income24,720 26,826 52,089 53,912 
Net income attributable to the noncontrolling interest96 154 174 351 
Net income attributable to the Company$24,624 $26,672 $51,915 $53,561 
Earnings per share attributable to Company shareholders - Basic$0.79 $0.86 $1.66 $1.72 
Earnings per share attributable to Company shareholders - Diluted$0.79 $0.85 $1.66 $1.71 
Shares of the Company used in computing earnings per share:
Basic31,242 31,174 31,225 31,152 
Diluted31,342 31,269 31,316 31,243 
Dividends declared per Class A share$0.26 $0.25 $0.52 $0.50 
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
June 30,		Six Months Ended
June 30,
2024202320242023
Net income$24,720 $26,826 $52,089 $53,912 
Other comprehensive income/(loss), before tax:
Foreign currency translation(17,137)(2,818)(28,968)10,622 
Amortization of pension liability adjustments:
Prior service credit(38)(1,030)(76)(2,061)
Net actuarial loss176 347 354 693 
Payments and amortization related to interest rate swaps included in earnings(4,180)(3,678)(8,218)(6,901)
Derivative valuation adjustment439 4,199 1,633 3,537 
Income taxes related to items of other comprehensive income/(loss):
Amortization of prior service credit11 316 22 631 
Amortization of net actuarial loss(53)(107)(107)(212)
Payments and amortization related to interest rate swaps included in earnings1,001 931 2,023 1,746 
Derivative valuation adjustment(100)(1,063)(402)(895)
Comprehensive income4,839 23,923 18,350 61,072 
Comprehensive income attributable to the noncontrolling interest(270)333 (146)768 
Comprehensive income attributable to the Company$5,109 $23,590 $18,496 $60,304 
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)
June 30, 2024December 31, 2023
Assets
Cash and cash equivalents$116,439 $173,420 
Accounts receivable, net280,008 287,781 
Contract assets, net189,242 182,281 
Inventories161,626 169,567 
Income taxes prepaid and receivable9,993 11,043 
Prepaid expenses and other current assets49,143 53,872 
Total current assets806,451 877,964 
Property, plant and equipment, net582,167 601,989 
Intangibles, net41,505 44,646 
Goodwill178,236 180,181 
Deferred income taxes27,203 22,941 
Noncurrent receivables, net— 4,392 
Other assets116,259 102,901 
Total assets$1,751,821 $1,835,014 
Liabilities and Shareholders' Equity
Accounts payable$84,628 $87,104 
Accrued liabilities129,511 142,988 
Current maturities of long-term debt2,732 4,218 
Income taxes payable7,765 14,369 
Total current liabilities224,636 248,679 
Long-term debt374,325 452,667 
Other noncurrent liabilities151,892 139,385 
Deferred taxes and other liabilities27,620 26,963 
Total liabilities778,473 867,694 
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; 40,908,380 issued in 2024 and 40,856,910 in 2023
41 41 
Additional paid in capital452,461 448,218 
Retained earnings1,046,612 1,010,942 
Accumulated items of other comprehensive income:
Translation adjustments(154,304)(124,901)
Pension and postretirement liability adjustments(16,718)(17,346)
Derivative valuation adjustment4,115 9,079 
Treasury stock (Class A), at cost; 9,661,845 shares in 2024 and 2023
(364,665)(364,665)
Total shareholders' equity967,542 961,368 
Noncontrolling interest5,806 5,952 
Total equity973,348 967,320 
Total liabilities and shareholders' equity$1,751,821 $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)
Six Months Ended
June 30,
20242023
Cash flows from operating activities:
Net income$52,089 $53,912 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation41,247 32,299 
Amortization3,446 3,018 
Change in deferred taxes and other liabilities(2,391)1,787 
Impairment of property, plant and equipment120 532 
Non-cash interest expense513 565 
Compensation and benefits paid or payable in Class A Common Stock4,243 2,274 
Provision/(recovery) for credit losses from uncollected receivables and contract assets(174)493 
Foreign currency remeasurement gain on intercompany loans(2,580)(3,198)
Fair value adjustment on foreign currency contracts3,109 (123)
Gain on sale of assets(512)— 
Changes in operating assets and liabilities that provided/(used) cash:
Accounts receivable4,929 (40,131)
Contract assets(8,435)4,606 
Inventories3,062 (9,174)
Prepaid expenses and other current assets(2,454)(2,700)
Income taxes prepaid and receivable873 (381)
Accounts payable17,679 (5,255)
Accrued liabilities(15,367)(21,570)
Income taxes payable(5,599)(4,943)
Noncurrent receivables(379)1,705 
Other noncurrent liabilities(924)(1,922)
Other, net494 2,881 
Net cash provided by operating activities92,989 14,675 
Cash flows from investing activities:
Purchases of property, plant and equipment(46,616)(34,899)
Purchased software(40)(72)
Proceeds received from sale of assets1,029 — 
Net cash used in investing activities(45,627)(34,971)
Cash flows from financing activities:
Proceeds from borrowings43,282 61,000 
Principal payments on debt(122,828)(13,000)
Taxes paid in lieu of share issuance(2,446)(3,136)
Dividends paid(16,233)(15,570)
Net cash (used in)/provided by financing activities(98,225)29,294 
Effect of exchange rate changes on cash and cash equivalents(6,118)142 
(Decrease)/increase in cash and cash equivalents(56,981)9,140 
Cash and cash equivalents at beginning of period173,420 291,776 
Cash and cash equivalents at end of period$116,439 $300,916 
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 does not include 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.
In March 2024, the FASB issued Accounting Standards Update No. 2024-01, "Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards" (ASU 2024-01), which clarifies how an entity determines whether profits interest or similar awards should be considered within the scope of ASC 718 as a share-based payment arrangement or under ASC 710 or other ASC topics in a manner similar to a cash bonus or profit-sharing arrangement. The guidance is effective for annual periods beginning after December 15, 2024, and interim periods beginning within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. ASU 2024-01 should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

5
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:
The Machine Clothing 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 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 $101.3 million and $93.5 million in the first six months of 2024 and 2023, respectively. The total of Accounts receivable, Contract assets and Noncurrent receivables due from SAFRAN amounted to $85.8 million and $93.8 million as of June 30, 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 June 30,Six months ended June 30,
(in thousands)
2024202320242023
Net revenues
Machine Clothing
$193,578 $159,217 $378,795 $312,439 
Albany Engineered Composites138,416 114,906 266,529 230,780 
Consolidated revenues$331,994 $274,123 $645,324 $543,219 
Operating income/(loss)
Machine Clothing
$53,685 $53,726 $101,795 $102,690 
Albany Engineered Composites9,434 8,668 18,622 18,086 
Corporate expenses(20,214)(16,893)(38,535)(34,733)
Consolidated Operating income$42,905 $45,501 $81,882 $86,043 
Reconciling items:
Interest income(959)(1,838)(2,082)(2,944)
Interest expense
3,909 4,944 8,351 9,340 
Other (income)/expense, net5,657 (4,511)2,675 (4,966)
Income before income taxes$34,298 $46,906 $72,938 $84,613 
6
Second quarter 2024 results include Heimbach, which was acquired August 31, 2023. Heimbach contributed $39.8 million and $77.7 million of net revenues and $0.5 million and $(2.4) million of operating income/(loss) for the three and six months ended June 30, 2024, respectively.
Corporate expenses include global information system costs of $8.1 million and $6.8 million for the three months ended June 30, 2024 and 2023, respectively, and $16.4 million and $13.0 million for the six months ended June 30, 2024 and 2023, respectively.
Revenue Recognition:
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 $5.0 million for the second quarter of 2024 and decreased operating income $7.6 million for the first half of 2024. Adjustments in the estimated profitability of long-term contracts decreased operating incomes by $1.9 million and decreased operating income by $4.0 million for the second quarter and first half of 2023, respectively.
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 June 30, 2024:

Three months ended June 30, 2024
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$192,596 $982 $193,578 
Albany Engineered Composites:
   ASC— 50,292 50,292 
   Other AEC6,008 82,116 88,124 
Total Albany Engineered Composites
6,008 132,408 138,416 
                                         
Total revenues$198,604 $133,390 $331,994 

The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended June 30, 2023:
Three months ended June 30, 2023
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$158,273 $944 $159,217 
Albany Engineered Composites:
   ASC— 47,417 47,417 
   Other AEC3,511 63,978 67,489 
Total Albany Engineered Composites
3,511 111,395 114,906 
Total revenues$161,784 $112,339 $274,123 
7

The following table disaggregates revenue for each product group by timing of revenue recognition for the six months ended June 30, 2024:
Six months ended June 30, 2024
(in thousands)
Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$376,831 $1,964 $378,795 
Albany Engineered Composites:
   ASC— 100,031 100,031 
   Other AEC11,766 154,732 166,498 
Total Albany Engineered Composites11,766 254,763 266,529 
Total revenues$388,597 $256,727 $645,324 

The following table disaggregates revenue for each product group by timing of revenue recognition for the six months ended June 30, 2023:

Six months ended June 30, 2023
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$310,551 $1,888 $312,439 
Albany Engineered Composites:
   ASC— 91,949 91,949 
   Other AEC9,304 129,527 138,831 
Total Albany Engineered Composites9,304 221,476 230,780 
Total revenues$319,855 $223,364 $543,219 
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 June 30,Six months ended June 30,
(in thousands)
2024202320242023
Americas PMC$88,533 $94,154 $172,034 $177,532 
Eurasia PMC
78,519 48,541 154,709 100,278 
Engineered Fabrics26,526 16,522 52,052 34,629 
Total Machine Clothing Net revenues$193,578 $159,217 $378,795 $312,439 

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 $1.1 billion and $792 million as of June 30, 2024 and 2023, respectively, and related primarily to firm fixed price contracts in the AEC segment. Of the remaining performance obligations as of June 30, 2024, we expect to recognize as revenue approximately $86 million during 2024, $191 million during 2025, $155 million during 2026, and the remainder thereafter.

8
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 six months ended June 30, 2024 and 2023, was as follows:
Pension plans
Other postretirement benefits
(in thousands)
2024202320242023
Components of net periodic benefit cost/(income):
Service cost
$986 $565 $23 $30 
Interest cost3,043 2,141 709 937 
Expected return on assets
(2,698)(1,955)— — 
Amortization of prior service cost/(income)(14)(16)(62)(2,045)
Amortization of net actuarial loss
372 279 (18)414 
Net periodic benefit cost/(credit)
$1,689 $1,014 $652 $(664)
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 material curtailments or settlements during the first six 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 at MC in the second quarter of 2024 were related primarily to actions taken to cease operations at the Company's MC forming fabric manufacturing facility in Chungju, South Korea. This led to a $1.0 million charge to Restructuring expenses, net related to workforce reductions and a $0.5 million charge recorded to Cost of goods sold for the write-off of inventory. We expect to incur additional restructuring expenses related to this action throughout the remainder of the year.

At AEC, restructuring activities were related to reductions in workforce at various AEC locations. Restructuring charges for the second quarter of 2023 were not significant.
The following table summarizes charges reported in the Consolidated Statements of Income under "Restructuring expenses, net":
Three months ended June 30,
Six months ended June 30,
(in thousands)2024202320242023
Machine Clothing$1,066 $125 $1,087 $145 
Albany Engineered Composites922 — 3,110 — 
Corporate expenses115 — 115 — 
Total$2,103 $125 $4,312 $145 





9
The following tables summarizes charges by type of expense reported in the Consolidated Statements of Income under "Restructuring expenses, net" and "Cost of goods sold":
Six months ended June 30, 2024Total
restructuring
costs incurred		Termination
and other
costs		Impairment of assets
(in thousands)
Machine Clothing$1,605 $1,087 $518 
Albany Engineered Composites3,110 3,110 — 
Corporate expenses115 115 — 
Total$4,830 $4,312 $518 
Six months ended June 30, 2023Total
restructuring
costs incurred		Termination
and other
costs		Impairment of assets
(in thousands)
Machine Clothing$145 $145 $— 
Albany Engineered Composites— — — 
Corporate expenses— — — 
Total$145 $145 $— 

The table below presents the year-to-date changes in restructuring liabilities for 2024 and 2023:
(in thousands)December 31, 2023Restructuring
charges accrued		PaymentsCurrency
translation /other		June 30, 2024
Total termination and other costs$— $4,312 $(1,381)$(7)$2,924 
(in thousands)December 31, 2022Restructuring
charges accrued		PaymentsCurrency
translation /other		June 30, 2023
Total termination and other costs$— $145 $(147)$2 $— 

5. Other (Income)/Expense, net
The components of Other (income)/expense, net are:
Three months ended June 30,Six months ended June 30,
(in thousands)
2024202320242023
Currency transaction (gains)/losses$150 $(4,193)$(1,142)$(4,133)
Derivative instruments losses/(gains)4,391 (138)4,273 (123)
Bank fees and amortization of debt issuance costs
77 33 121 91 
Components of net periodic pension and postretirement cost other than service cost664 (120)1,332 (245)
Other375 (93)(1,909)(556)
Total other (income)/expense, net$5,657 $(4,511)$2,675 $(4,966)
Other (income)/expense, net, included foreign currency related transactions which resulted in losses of $0.2 million and gains of $1.1 million in the three and six months ended June 30, 2024, respectively, as compared to gains of $4.2 million and $4.1 million in the same period last year. In addition, changes in the fair value of derivative instruments included losses of $4.4 million and $4.3 million in the three and six months ended June 30, 2024, as compared to gains of $0.1 million and $0.1 million in the same period last year, driven by currency rate movements, most notably the Brazilian Real and Mexican Peso. Net periodic pension and postretirement costs, other than service costs, were $0.7 million and $1.3 million in the three and six months ended June 30, 2024, respectively, as compared to benefits of $0.1 million and $0.2 million in the same period last year. Other (income)/expense, net, also included net proceeds of $0.5 million from the divestiture of assets related to Heimbach during the three and six months ended June 30, 2024, as well as bank fees, amortization of debt issuance costs, and rental income.
10

6. Income Taxes
The Company's effective income tax rate for the three and six months ended June 30, 2024 and 2023, is as follows:
Three months ended June 30,Six months ended June 30,
2024202320242023
Effective income tax rate27.9 %42.8 %28.6 %36.3 %
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.
Our 2024 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of state and local taxation, the impact of taxation upon foreign operations, and forecasted permanent differences. Our actual effective tax rates were 27.9% and 42.8% for the three months ended June 30, 2024 and 2023, respectively. Our actual effective tax rates were 28.6% and 36.3% for the six months ended June 30, 2024 and 2023, respectively.
The effective tax rate for the three months ended June 30, 2024 included a net discrete tax benefit of $1.4 million, which decreased our effective tax rate by 4.2%. This discrete tax benefit is mostly attributable to the true-up of prior year estimated taxes and the release of an uncertain tax position due to a favorable audit settlement. The rate for the second quarter of 2024 was lower than the second quarter of 2023 mainly due to favorable discrete tax adjustments in the current period compared to unfavorable discrete tax adjustments in the prior period.
The effective tax rate for the six months ended June 30, 2024 included a net discrete tax benefit of $2.5 million, which decreased our effective tax rate by 3.4%. This discrete tax benefit is mostly attributable to the true-up for prior year estimated taxes, an increase in the valuation allowance and a net decrease in uncertain tax positions. The rate for the six months ended June 30, 2024 was lower than the six months ended June 30, 2023 mainly due to favorable discrete tax adjustments in the current period compared to unfavorable discrete tax adjustments in the prior period.
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 could decrease by up to $1.4 million based on current estimates.

11
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 June 30,Six months ended June 30,
(in thousands, except earnings per share)2024202320242023
Net income attributable to the Company$24,624 $26,672 $51,915 $53,561 
Weighted average number of shares:
Weighted average number of shares used in calculating basic net income per share
31,242 31,174 31,225 31,152 
Effect of dilutive stock-based compensation plans:
Restricted stock units and multi-year awards100 95 91 91 
Weighted average number of shares used in calculating diluted net income per share31,342 31,269 31,316 31,243 
Net income attributable to the Company per share:
Basic$0.79 $0.86 $1.66 $1.72 
Diluted$0.79 $0.85 $1.66 $1.71 

8. Accumulated Other Comprehensive Income ("AOCI")
The table below presents changes in the components of AOCI for the period from December 31, 2023 to June 30, 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 $(133,168)
Other comprehensive income/(loss) before reclassifications, net of tax
(29,403)435 1,231 (27,737)
Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax— — (6,195)(6,195)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax
— 193 — 193 
Net current period other comprehensive income(29,403)628 (4,964)(33,739)
June 30, 2024$(154,304)$(16,718)$4,115 $(166,907)
The table below presents changes in the components of AOCI for the period from December 31, 2022 to June 30, 2023:
(in thousands)
Translation
adjustments
Pension and
postretirement
liability
adjustments
Derivative
valuation
adjustment
Total Other
Comprehensive
Income
December 31, 2022$(146,851)$(15,783)$17,707 $(144,927)
Other comprehensive income/(loss) before reclassifications, net of tax11,313 (691)2,642 13,264 
Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax— — (5,155)(5,155)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax— (949)— (949)
Net current period other comprehensive income11,313 (1,640)(2,513)7,160 
June 30, 2023$(135,538)$(17,423)$15,194 $(137,767)
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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 and six ended June 30, 2024 and 2023:
Three months ended June 30,Six months ended June 30,
(in thousands)
2024202320242023
Pre-tax Derivative valuation reclassified from Accumulated Other Comprehensive Income:
Interest expense/(income), net related to interest rate swaps included in Income before taxes
$(4,180)$(3,678)$(8,218)$(6,901)
Income tax effect1,001 931 2,023 1,746 
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income
$(3,179)$(2,747)$(6,195)$(5,155)
Pre-tax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
Amortization of prior service credit$(38)$(1,030)$(76)$(2,061)
Amortization of net actuarial loss
176 347 354 693 
Total pre-tax amount reclassified (a)
138 (683)278 (1,368)
Income tax effect(42)209 (85)419 
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income$96 $(474)$193 $(949)

(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 six months ended June 30, 2024, the net income/(loss) attributable to Arcari’s noncontrolling interest was less than $0.1 million and the noncontrolling interest balance at June 30, 2024 was $0.6 million.










13

The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiaries:
ASC Noncontrolling InterestSix months ended June 30,
(in thousands, except percentages)20242023
Net income of Albany Safran Composites (ASC)$1,841 $4,146 
Less: Return attributable to the Company's preferred holding589 637 
Net income of ASC available for common ownership$1,252 $3,509 
Ownership percentage of noncontrolling shareholder10 %10 %
Net income attributable to the noncontrolling interest$125 $351 
Noncontrolling interest, beginning of year$5,423 $4,494 
Net income attributable to noncontrolling interest125 351 
Changes in other comprehensive income attributable to the noncontrolling interest(304)417 
ASC Noncontrolling interest, end of interim period
$5,244 $5,262 
Arcari Noncontrolling interest, end of interim period
$562 $— 
Total Noncontrolling interest, end of interim period$5,806 $5,262 

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 June 30, 2024 and December 31, 2023, Accounts receivable consisted of the following:
(in thousands)June 30, 2024December 31, 2023
Trade and other accounts receivable$263,781 $272,351 
Bank promissory notes20,991 20,690 
Allowance for expected credit losses(4,764)(5,260)
Accounts receivable, net$280,008 $287,781 
The Company had Noncurrent receivables in the AEC segment that represent revenue earned, which had extended payment terms. In 2023, the payment terms were amended and the Noncurrent receivables are now included in Trade and other accounts receivable. As of June 30, 2024 and December 31, 2023, Noncurrent receivables consisted of the following:
(in thousands)June 30, 2024December 31, 2023
Noncurrent receivables$— $4,414 
Allowance for expected credit losses
— (22)
Noncurrent receivables, net$— $4,392 




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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.
As of June 30, 2024 and December 31, 2023, Contract assets and Contract liabilities consisted of the following:
(in thousands)June 30, 2024December 31, 2023
Contract assets$190,193 $183,189 
Allowance for expected credit losses
(951)(908)
Contract assets, net$189,242 $182,281 
Contract liabilities$7,657 $7,127 
Contract assets, net increased $7.0 million during the six months ended June 30, 2024. The modest increase was primarily due to an increase in unbilled revenue, primarily related to commercial and space programs. There were no impairment losses related to our Contract assets during the six months ended June 30, 2024 and June 30, 2023.
Contract liabilities decreased $0.5 million during the six months ended June 30, 2024, primarily due to revenue recognized from satisfied performance obligations exceeding customer advance payments for commercial and defense programs. Revenue recognized for the six months ended June 30, 2024 and 2023 that was included in the Contract liability balance at the beginning of the year was $3.8 million and $11.7 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 June 30, 2024 and December 31, 2023, Inventories consisted of the following:
(in thousands)June 30, 2024December 31, 2023
Raw materials$82,412 $79,611 
Work in process
57,027 67,743 
Finished goods22,187 22,213 
Total inventories
$161,626 $169,567 








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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 June 30, 2024 and December 31, 2023:
June 30, 2024
(in thousands)Amortization 
life in years		Gross carrying amountAccumulated amortizationNet carrying amount
Finite-lived assets:
AEC Trademarks and trade names
6-15
$208 $(192)$16 
AEC Technology
10-15
5,993 (2,947)3,046 
AEC Intellectual property
15
1,250 (381)869 
AEC Customer relationships
8-15
69,268 (45,583)23,685 
Heimbach Developed technology
9
8,798 (802)7,996 
Total Finite-lived intangible assets$85,517 $(49,905)$35,612 
Indefinite-lived intangible assets:
Heimbach Trade name$5,893 $— $5,893 
MC Goodwill65,440 — 65,440 
AEC Goodwill112,796 — 112,796 
Total Indefinite-lived intangible assets:$184,129 $— $184,129 
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 









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The changes in intangible assets, net and goodwill from December 31, 2023 to June 30, 2024, were as follows:
(in thousands)December 31, 2023Other
Changes		AmortizationCurrency
Translation		June 30, 2024
Finite-lived intangible assets:
AEC Trademarks and trade names$22 $— $(6)$— $16 
AEC Technology3,426 — (283)(97)3,046 
AEC Intellectual property911 — (42)— 869 
AEC Customer relationships25,485 — (1,740)(60)23,685 
Heimbach Developed technology8,732 — (492)(244)7,996 
Total Finite-lived intangible assets$38,576 $— $(2,563)$(401)$35,612 
Indefinite-lived intangible assets:
Heimbach Trade name$6,070 $— $— $(177)$5,893 
MC Goodwill66,873 — — (1,433)65,440 
AEC Goodwill113,308 — — (512)112,796 
Total Indefinite-lived assets:$186,251 $— $— $(2,122)$184,129 

In the second quarter of 2024, management performed the quantitative assessment approach in conducting its annual evaluation of goodwill and indefinite-lived trademark intangibles and concluded that no impairment provision was required. Our goodwill has been allocated to and is tested for impairment at a level referred to as the reporting unit, which management determined to be the business segment level. As part of the quantitative assessment, management used the income and market approach to determine fair value by considering projected cash flows and market multiples for the Machine Clothing reporting unit and the AEC reporting unit. Management performed the quantitative assessments and concluded that each reporting unit’s fair value continued to significantly exceed its carrying value. In addition, there were no amounts at risk due to the estimated spread between the fair and carrying values. Accordingly, no impairment charges were recorded.

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)June 30, 2024December 31, 2023
Borrowings under the Amended Credit Agreement(1)$370,000 $446,000 
Foreign bank debt7,057 10,885 
Total bank debt377,057 456,885 
Less: Current maturities of long-term debt2,732 4,218 
Long-term debt$374,325 $452,667 
(1) the credit facility matures in August 2028. At the end of June 30, 2024 and December 31, 2023, the interest rate in effect was 2.75% 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:
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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 June 30, 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 June 30, 2024, there was $370 million of borrowings outstanding under the Amended Credit Agreement and we had borrowings available of $430 million, based on our maximum leverage ratio and our Consolidated EBITDA (as defined in the Amended Credit Agreement).
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 June 30, 2024, our leverage ratio was 0.98 to 1.00 (as defined in the Amended Credit Agreement) and our interest coverage ratio was 14.70 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 June 30, 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 0.88% 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 June 17, 2024 was 5.33%. As of June 30, 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 February 1, 2025 to June 30, 2031. At June 30, 2024 and December 31, 2023, the foreign debt was $7.1 million and $10.9 million, respectively, of which $2.7 million and $4.2 million, respectively, was classified as Current maturities on long-term debt.



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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 June 30, 2024 or at December 31, 2023, other than certain pension assets as indicated in our December 31, 2023 Annual Report on Form 10-K.
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:
June 30, 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$12,184 $— $27,157 $— 
Foreign currency option cont