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Albany International Corp.$82.24($.35)(.42%)

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 Albany International Reports Fourth-Quarter Results
   Wednesday, February 08, 2017 5:00:01 PM ET

--Net sales were $213.0 million, an increase of 20.0% compared to Q4 2015. Net sales increased 11.8% as a result of the Q2 2016 acquisition in AEC (see Tables 1 and 2).

--Net income attributable to the Company was $15.8 million ($0.49 per share), compared to $37.6 million ($1.17 per share) in Q4 2015. Income tax-related adjustments increased earnings per share by $0.08 in 2016 and $0.93 in 2015 (see Table 16).

--Net income attributable to the Company, excluding adjustments (a non-GAAP measure), was $0.36 per share, compared to $0.46 in Q4 2015 (see Table 16).

--Net income attributable to the Company in Q4 2016, both as reported and excluding adjustments, was reduced by a pre-tax charge of $2.5 million ($0.05 per share) as a result of a loss caused by the theft of cash from the Company’s subsidiary in Japan and by $0.8 million ($0.01 per share) of integration costs (see Table 12).



--Adjusted EBITDA (a non-GAAP measure) was $38.3 million, including the loss in Japan and integration costs, compared to $38.7 million in Q4 2015 (see Tables 7 and 8).

Albany International Corp. (AIN ) reported that Q4 2016 net income attributable to the Company was $15.8 million, including a net benefit of $2.5 million for income tax adjustments. Q4 2015 net income attributable to the Company was $37.6 million, including favorable income tax adjustments of $29.8 million.

Q4 2016 income before income taxes was $20.8 million, including restructuring charges of $0.7 million and gains of $3.2 million from foreign currency revaluation. Q4 2015 income before income taxes was $11.3 million, including restructuring charges of $9.9 million and losses of $0.6 million from foreign currency revaluation. Q4 2016 income before income taxes included a charge of $2.5 million related to a loss caused by a theft of cash from the Company’s subsidiary in Japan and $0.8 million of integration costs related to the recent AEC acquisition.

As previously reported, in the second quarter of 2016, the Company completed the acquisition of Harris Corporation’s composite aerostructures division, which is located in Salt Lake City (referred to below as "SLC"). Table 1 summarizes key financial metrics of the acquired business, which is included in the AEC segment:

Table 1

                                                      Three Months        For the period April 8, 2016 to   
                                                                                                                   ended                                                                           December 31, 2016
(in thousands)                                                                                                                    December 31,
                                                                                                                                      2016
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Net sales (GAAP)                                                            $21,021                      $67,011
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Gross profit (GAAP)                                                          2,705                        9,375
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Selling, technical, general and research expenses(GAAP)                      3,890                       10,310
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Restructuring expenses(GAAP)                                                  311                          311
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Operating (loss) (GAAP)                                                     (1,496)                      (1,246)
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Depreciation and amortization (D&A) (GAAP)                                   2,847                       10,231
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
EBITDA [Operating (loss) + D&A] (Non-GAAP)                                   1,351                        8,985
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
Adjusted EBITDA [Operating (loss)+ Restructuring + D&A] (Non-GAAP)          $1.662                       $9,296
------------------------------------------------------------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- -------------------------------
                                                                                           

Table 2 summarizes net sales and the effect of changes in currency translation rates:

Table 2

                                                             Net Sales                                                        Impact of                   Percent
                                                                                                                 Three Months ended                                                                                                                                                                       Changes                                                                             Change
                                                                                                                                       December 31,                                                                                                         Percent                                                                           in Currency                                                                          excluding
                                                                                                                                                                                                                                                            Change                                                                         Translation Rates                                                                       Currency
                                                                                                                                                                                                                                                                                                                                                                                                               Rate Effect
                                                                                                                                                                                                                                                                                                                                                                                                                              
(in thousands, excluding percentages)         2016                                                 2015                                                          
------------------------------------- -------------------- -------------------- -------------------- -------- ------------------------------------------------------------   -------- -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      --------------------
Machine Clothing (MC)                       $144,744       $145,004               -0.2%                     ($968)                      0.5%
------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Albany Engineered Composites (AEC)           68,302         32,462               110.4%                      (201)                     111.0%
------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total                                       $213,046       $177,466               20.0%                    ($1,169)                     20.7%
------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------

In comparison to Q4 2015, MC net sales were essentially flat in every region. The increase in AEC net sales was due to the acquisition and growth in LEAP.

Fourth-quarter gross profit increased to $77.3 million in 2016 from $71.7 million in 2015. Gross profit margin in Q4 2016 was 36.3% compared to 40.4% in Q4 2015, reflecting the change in the business mix due to higher AEC sales. MC gross profit was $67.8 million (46.8% of net sales) in Q4 2016, compared to $68.8 million (47.4% of net sales) in Q4 2015. AEC gross profit increased to $9.8 million in Q4 2016, compared to $3.3 million in Q4 2015, due to higher sales.

Q4 2016 selling, technical, general, and research (STG&R) expenses were $49.8 million, or 23.4% of net sales, including gains of $2.0 million from the revaluation of nonfunctional-currency assets and liabilities, and expenses of $0.8 million related to the integration of SLC. Q4 2015 STG&R expenses were $46.9 million, or 26.4% of net sales, including gains of $0.5 million from the revaluation of nonfunctional-currency assets and liabilities. The reduction in STG&R expenses as a percent of net sales in 2016 reflects the relative growth in AEC which carries lower STG&R expenses as a percent of net sales.

The following table summarizes fourth-quarter expenses associated with internally funded research and development by segment:

Table 3

                         Research and development expenses by segment
                                                                               Three Months
                                                                                   ended
                                                                                                  December 31,
(in thousands)                       2016            2015
---------------------------- -------------------- -------------------- ----------- -------------------- -------------------- -----------
Machine Clothing                    $4,188          $5,487
---------------------------- -------------------- -------------------- ----------- -------------------- -------------------- -----------
Albany Engineered Composites         3,672           2,495
---------------------------- -------------------- -------------------- ----------- -------------------- -------------------- -----------
Corporate expenses                     -              194
---------------------------- -------------------- -------------------- ----------- -------------------- -------------------- -----------
Total                               $7,860          $8,176
---------------------------- -------------------- -------------------- ----------- -------------------- -------------------- -----------

The following table summarizes fourth-quarter operating income by segment:

Table 4

                                 Operating Income/(loss)
                                                                         Three Months ended
                                                                            December 31,
(in thousands)                     2016         2915
---------------------------- -------------------- -------------------- -------- -------------------- -------------------- --------
Machine Clothing                  $39,946      $30,342
---------------------------- -------------------- -------------------- -------- -------------------- -------------------- --------
Albany Engineered Composites      (1,280)      (1,843)
---------------------------- -------------------- -------------------- -------- -------------------- -------------------- --------
Corporate expenses               (11,836)     (13,634)
---------------------------- -------------------- -------------------- -------- -------------------- -------------------- --------
Total                             $26,830      $14,865
---------------------------- -------------------- -------------------- -------- -------------------- -------------------- --------

Segment operating income was affected by restructuring and currency revaluation as shown in Table 5 below:

Table 5

                              Expenses/(gain) in Q4 2016                                   Expenses/(gain) in Q4 2015
(in thousands)                                                                               resulting from                                                                                     resulting from
                                                                                              Restructuring                                                                                      Restructuring
                                                                                               Revaluation                                                                                        Revaluation
---------------------------- -------------------- -------------------- ------------------------------------------------------    -------------------- -------------------- ----------------------------------------------------
Machine Clothing                  $150      ($2,050)     $8,282     ($542)
---------------------------- -------------------- -------------------- ------ -------------------- -------------------- -------- -------------------- -------------------- ------ -------------------- -------------------- ------
Albany Engineered Composites       526         11           -          -
---------------------------- -------------------- -------------------- ------ -------------------- -------------------- -------- -------------------- -------------------- ------ -------------------- -------------------- ------
Corporate expenses                 47           -         1,635        -
---------------------------- -------------------- -------------------- ------ -------------------- -------------------- -------- -------------------- -------------------- ------ -------------------- -------------------- ------
Total                             $723      ($2,039)     $9,917     ($542)
---------------------------- -------------------- -------------------- ------ -------------------- -------------------- -------- -------------------- -------------------- ------ -------------------- -------------------- ------

Q4 2016 Other income/expense, net, was expense of $2.1 million, including income related to the revaluation of nonfunctional-currency balances of $1.2 million, and a $2.5 million charge related to a loss caused by a theft of cash from the Company’s subsidiary in Japan. Q4 2015 Other income/expense, net, was expense of $1.6 million, including losses related to the revaluation of nonfunctional-currency balances of $1.1 million.

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

Table 6

                 Income/(loss) attributable to currency revaluation 
                                                                                                           Three
                                                                                                 Months ended December 31
(in thousands)                         2016                  2015
--------------------------- -------------------- -------------------- ----------------- -------------------- -------------------- -----------------
Operating income                      $2,039                 $542
--------------------------- -------------------- -------------------- ----------------- -------------------- -------------------- -----------------
Other income/(expense), net            1,170                (1,092)
--------------------------- -------------------- -------------------- ----------------- -------------------- -------------------- -----------------
Total                                 $3,209                ($550)
--------------------------- -------------------- -------------------- ----------------- -------------------- -------------------- -----------------

The Company’s income tax rate based on income from continuing operations was 35.3% for Q4 2016, compared to 31.8% for Q4 2015. The increase in the tax rate was due to a change in the mix of pre-tax income among the jurisdictions in which we operate. Discrete tax items and the effect of a change in the tax rate from the previous quarter decreased income tax expense by $2.5 million in Q4 2016 and $29.8 million in Q4 2015. The Q4 2015 amount included a tax benefit of $28.6 million related to the elimination of the value of the Company’s investment in its German subsidiary.

The following tables provide a reconciliation of operating income and net income to EBITDA and Adjusted EBITDA:

Table 7

Three Months ended December 31, 2016                                 Machine       Albany        Corporate      Total
(in thousands)                                                                                            Clothing                                           Engineered                                            expenses                                            Company
                                                                                                                                                             Composites                                            and other
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Operating income/(loss) (GAAP)                                       $39,946      $(1,280)       ($11,836)     $26,830
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest, taxes, other income/expense                                   -             -          (10,844)     (10,844)
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Net income (GAAP)                                                    39,946        (1,280)       (22,680)      15,986
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest expense, net                                                   -             -            3,854        3,854
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Income tax expense                                                      -             -            4,841        4,841
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Depreciation and amortization                                         8,583         6,433          1,221       16,237
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
EBITDA (non-GAAP)                                                    48,529         5,153        (12,764)      40,918
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Restructuring expenses, net                                            150           526            47           723
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Foreign currency revaluation (gains)/losses                          (2,050)         11           (1,170)      (3,209)
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Pretax (income) attributable to non-controlling interest in ASC         -           (160)            -          (160)
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Adjusted EBITDA (non-GAAP)                                           $46,629       $5,530        ($13,887)     $38,272
--------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------

Table 8

Three Months ended December 31, 2015                             Machine       Albany        Corporate      Total
(in thousands)                                                                                        Clothing                                           Engineered                                            expenses                                            Company
                                                                                                                                                         Composites                                            and other
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Operating income/(loss) (GAAP)                                   $30,342      $(1,843)       ($13,634)     $14,865
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest, taxes, other income/expense                               -             -           22,601       22,601
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Net income (GAAP)                                                30,342        (1,843)         8,967       37,466
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest expense, net                                               -             -            1,935        1,935
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Income tax (benefit)                                                -             -          (26,185)     (26,185)
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Depreciation and amortization                                     9,425         3,295          2,113       14,833
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
EBITDA (non-GAAP)                                                39,767         1,452        (13,170)      28,049
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Restructuring expenses, net                                       8,282           -            1,635        9,917
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Foreign currency revaluation (gains)/losses                       (542)           -            1,092         550
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Pretax loss attributable to non-controlling interest in ASC         -            135             -           135
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Adjusted EBITDA (non-GAAP)                                       $47,507       $1,587        ($10,443)     $38,651
----------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------

Capital expenditures were $24.7 million in Q4 2016, compared to $10.3 million in Q4 2015, primarily due to the ramp in AEC programs. Depreciation and amortization was $16.2 million in Q4 2016, compared to $14.8 million in Q4 2015. As noted in Table 1, depreciation and amortization for SLC was $2.8 million in Q4 2016.

CFO Comments

CFO and Treasurer John Cozzolino commented, "Cash decreased about $15 million during Q4 to $182 million, as the Company used cash to pay down debt and cover significant capital expenditures. As a result, total debt at the end of the year was $485 million, a decrease of $7 million compared to the end of Q3, and net debt (total debt less cash, see Table 17) increased by about $8 million to $303 million. At the end of Q4, the Company had utilized $418 million of its $550 million credit facility. The Company’s leverage ratio, as defined in our primary debt agreements, was 2.30 as of the end of the year.

"Capital expenditures in Q4 were $25 million, bringing the full-year total to $79 million. Due to the continued ramp up of AEC programs and the carry-over of a number of projects from 2016, we currently estimate full-year total Company capital expenditures in 2017 to be $95 million to $105 million. Assuming no significant change in the timing of any of our major programs, 2017 should represent the peak in annual capital expenditures between now and 2020.

"The Company’s income tax rate based on income from continuing operations was 35% in 2016. We expect a similar tax rate in 2017, assuming no significant change to the Company’s repatriation program. Cash paid for income taxes during the year was about $23 million and is expected to total $25 million to $30 million in 2017.

"During Q4, we became aware of a theft of cash from our subsidiary in Japan by a third party. After an extensive investigation and detailed substantive procedures to ensure the accuracy of our financial statements, we concluded that a Q4 2016 charge of $2.5 million was necessary to reflect the impact of this loss. While some of the loss occurred in prior periods, the majority occurred in Q4 2016. The amount of the loss that occurred prior to Q4 2016 was not material and, accordingly, the Company does not expect to restate any previously issued financial statements. We are in the process of evaluating the impact of this loss on our internal controls assessment and the results of this evaluation will be appropriately reflected in our Annual Report on Form 10-K."

CEO Comments

CEO Joseph Morone said, "In Q4 2016 both Albany businesses again performed well, as AEC generated especially strong growth and MC continued to generate strong profitability. Unfortunately, we had to take a $2.5 million charge in Q4 due to a theft by a third party in a small operation in Japan. Even so, the Company ended the quarter and full year with sales and net income in line with our expectations, and with AEC poised for rapidly accelerating growth and MC for continued strong profitability in 2017 and beyond.

"Q4 2016 sales in MC were essentially flat compared to Q4 2015. From a regional perspective, Q4 year-over-year sales were stable in every major geographic market. From a grade perspective, Q4 year-over-year publication sales declined by another 10%, but the decline was offset by incremental growth in the other grades. We continue to be encouraged by new product performance and especially by the potential of the new technology platform in the tissue, nonwovens, pulp, building products and corrugator grades, which together accounted for 35% of total sales in Q4 2016. For the full year, 2016 sales dropped 4.3% primarily because of the declines in publication grades coupled with weakness in South America.

"Q4 gross margin once again held close to 47%, due in large measure to good plant utilization despite year-end slowdowns. As a result, full-year profitability was once again strong, with slightly improved gross margins, improved segment net income and Adjusted EBITDA at the high end of our normal $180 million to $195 million range.

"Looking ahead to 2017, we expect recent market trends to continue. Publication sales will likely continue to decline, but now that they comprise only 25% of total sales, and as the other grades hold steady or grow incrementally, we expect an easing of the recent trend of downward year-over-year comparisons in MC sales. As for profitability, after two years of favorable currency and inflationary environments, we expect some regression toward the mean in 2017, and as a result, we expect full-year Adjusted EBITDA to pull back from the high end toward the middle of that $180 million to $195 million range. The primary risks to this outlook are associated with macro-economic and geo-political conditions.

"AEC sales grew to $68 million in Q4, compared to an average of close to $50 million for the previous two quarters. The sequential growth was driven primarily by the LEAP program. Sales from our recently acquired Salt Lake City operation (SLC) were stable. Excluding SLC, Q4 sales were $47 million compared to $32 million in Q4 2015. For the full year, including nearly three quarters of sales from SLC, sales were $197 million. Excluding SLC, sales for the year were $131 million compared to $101 million in 2015.

"Q4 performance was particularly strong in the LEAP, F-35 JSF LiftFan(R), and Boeing 787 Fuselage Frames programs. More generally, AEC remains on track for the ramp up in all of its major growth programs. Although demand has reportedly softened in some segments of the aerospace industry, the near- and long-term demand outlook for AEC’s major growth programs remains robust. Meanwhile, R&D and new business development continues to progress on each of the three fronts discussed on our last call: incremental new sales on existing aerospace platforms, development of opportunities on potentially new aerospace platforms, and the continuing probe into the automotive market.

"AEC profitability continued to improve during the fourth quarter; segment net income/loss improved to a loss of $1.3 million and Adjusted EBITDA grew to $5.5 million. Q4 2016 results include costs of roughly $1 million associated with SLC integration and the consolidation of AEC legacy programs into our Texas operation, and a $1 million per quarter acceleration in R&D spending to support a cross section of the growth and new business development initiatives mentioned above. Good progress was made during the quarter on integration, particularly in the major effort to integrate ERP systems, which resulted in SLC going live at the beginning of February. All business-wide functions, such as finance, human resources, procurement, information technology and business development are now fully integrated, and our focus is now shifting almost exclusively to strengthening operational execution. While much remains to be done in 2017, our experience in Q4 suggests that AEC is firmly on track toward our long-term stated objective of 18%-20% EBITDA margins by 2020, on at least $450 million of sales.

"Turning to our short-term outlook, driven by accelerating ramps in LEAP, Boeing 787 Fuselage Frames, and F-35 JSF airframe components, we look for AEC sales to grow by 25% to 35% for each of the next two years. And, driven by the effects of integration, STG&R leverage, and learning curve effects, we expect gradually strengthening margins through the period. The primary risk factor for AEC will continue to be execution, especially during this period of ramp ups across multiple programs and sites.

"In sum, apart from the theft in Japan, this was a strong quarter and full year for both businesses, with continued strong competitive performance and profitability in MC, accelerating growth in AEC, and good progress on the integration of our recently acquired SLC operation. For 2017, for MC, we look for Adjusted EBITDA in the upper half of the normal $180 million to $195 million range; and for AEC, rapidly accelerating sales and gradually improving margins."

About Albany International Corp.

Albany International is a global advanced textiles and materials processing company, with two core businesses. Machine Clothing is the world’s leading producer of custom-designed fabrics and belts essential to production in the paper, nonwovens, and other process industries. Albany Engineered Composites is a rapidly growing supplier of highly engineered composite parts for the aerospace industry. Albany International is headquartered in Rochester, New Hampshire, operates 22 plants in 10 countries, employs 4,400 people worldwide, and is listed on the New York Stock Exchange (Symbol AIN). Additional information about the Company and its products and services can be found at www.albint.com.

This release contains certain non-GAAP metrics, including: percent change in net sales excluding currency rate effects (for each segment and the Company as a whole); EBITDA and Adjusted EBITDA (for each segment and the Company as a whole); net debt; and net income per share attributable to the Company, excluding adjustments. Such items are provided because management believes that, when reconciled from the GAAP items to which they relate, they provide additional useful information to investors regarding the Company’s operational performance.

Presenting increases or decreases in sales, after currency effects are excluded, can give management and investors insight into underlying sales trends. EBITDA, or net income with interest, taxes, depreciation, and amortization added back, is a common indicator of financial performance used, among other things, to analyze and compare core profitability between companies and industries because it eliminates effects due to differences in financing, asset bases and taxes. An understanding of the impact in a particular quarter of specific restructuring costs, acquisition expenses, currency revaluation, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Restructuring expenses in the MC segment, while frequent in recent years, are reflective of significant reductions in manufacturing capacity and associated headcount in response to shifting markets, and not of the profitability of the business going forward as restructured. Net debt is, in the opinion of the Company, helpful to investors wishing to understand what the Company’s debt position would be if all available cash were applied to pay down indebtedness. EBITDA, Adjusted EBITDA and net income per share attributable to the Company, excluding adjustments, are performance measures that relate to the Company’s continuing operations.

Percent changes in net sales, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. That amount is then compared to the U.S. dollar amount reported in the current period. The Company calculates EBITDA by removing the following from Net income: Interest expense net, Income tax expense, Depreciation and amortization. Adjusted EBITDA is calculated by: adding to EBITDA costs associated with restructuring and pension settlement charges; adding (or subtracting) revaluation losses (or gains); subtracting (or adding) gains (or losses) from the sale of buildings or investments; subtracting insurance recovery gains; subtracting (or adding) Income (or loss) attributable to the non-controlling interest in Albany Safran Composites (ASC); and adding expenses related to the Company’s acquisition of Harris Corporation’s composite aerostructures division. Net income per share attributable to the Company, excluding adjustments, is calculated by adding to (or subtracting from) net income attributable to the Company per share, on an after-tax basis: restructuring charges; discrete tax charges (or gains) and the effect of changes in the income tax rate; foreign currency revaluation losses (or gains); acquisition expenses; and losses (or gains) from the sale of investments.

EBITDA, Adjusted EBITDA, and net income per share attributable to the Company, excluding adjustments, as defined by the Company, may not be similar to EBITDA measures of other companies. Such measures are not considered measurements under GAAP, and should be considered in addition to, but not as substitutes for, the information contained in the Company’s statements of income.

The Company discloses certain income and expense items on a per-share basis. The Company believes that such disclosures provide important insight into underlying quarterly earnings and are financial performance metrics commonly used by investors. The Company calculates the quarterly per-share amount for items included in continuing operations by using the income tax rate based on income from continuing operations and the weighted-average number of shares outstanding for each period. Year-to-date earnings per-share effects are determined by adding the amounts calculated at each reporting period.

Table 9

                                              Net Sales                              Percent      Impact of        Percent
                                                                                   Year ended                                                                    Change                                              Changes                                               Change
                                                                                                     December 31,                                                                                                                     in Currency                                            excluding
                                                                                                                                                                                                                                      Translation                                            Currency
                                                                                                                                                                                                                                         Rates                                              Rate Effect
(in thousands, except percentages)       2016                            2015                  
---------------------------------- -------------------- -------------------- -------- ----------------------------------------  -------- -------------------- --------------------         -------------------- --------------------
Machine Clothing                       $582,190     $608,581       -4.3%       ($2,840)          -3.9%
---------------------------------- -------------------- -------------------- -------- -------------------- -------------------- -------- -------------------- -------------------- ------- -------------------- -------------------- ----------- -------------------- -------------------- -----------
Albany Engineered Composites            197,649      101,287       95.1%         (139)           95.3%
---------------------------------- -------------------- -------------------- -------- -------------------- -------------------- -------- -------------------- -------------------- ------- -------------------- -------------------- ----------- -------------------- -------------------- -----------
Total                                  $779,839     $709,868       9.9%        ($2,979)          10.3%
---------------------------------- -------------------- -------------------- -------- -------------------- -------------------- -------- -------------------- -------------------- ------- -------------------- -------------------- ----------- -------------------- -------------------- -----------

Table 10

Year ended December 31, 2016                                        Machine       Albany        Corporate      Total
(in thousands)                                                                                           Clothing                                           Engineered                                            expenses                                            Company
                                                                                                                                                            Composites                                            and other
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Operating income/(loss) (GAAP)                                     $152,529      ($15,363)      ($45,390)     $91,776
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest, taxes, other income/expense                                  -             -          (38,964)     (38,964)
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Net income (GAAP)                                                   152,529      (15,363)       (84,354)      52,812
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest expense, net                                                  -             -           13,464       13,464
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Income tax expense                                                     -             -           25,454       25,454
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Depreciation and amortization                                       36,428        24,211          6,822       67,461
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
EBITDA (non-GAAP)                                                   188,957        8,848        (38,614)      159,191
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Restructuring expenses, net                                          6,069         2,314           (7)         8,376
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Foreign currency revaluation losses/(gains)                          (404)          16           (3,525)      (3,913)
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Acquisition expenses                                                   -           5,367            -          5,367
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Pre-tax income attributable to non-controlling interest in ASC         -           (125)            -          (125)
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Adjusted EBITDA (non-GAAP)                                         $194,622       $16,420       ($42,146)    $168,896
-------------------------------------------------------------- -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------

Table 11

Year ended December 31, 2015                                      Machine       Albany        Corporate      Total
(in thousands)                                                                                         Clothing                                           Engineered                                            expenses                                            Company
                                                                                                                                                          Composites                                            and other
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Operating income/(loss) (GAAP)                                   $141,311     ($28,478)*      ($48,938)     $63,895
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest, taxes, other income/expense                                -             -           (6,630)      (6,630)
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Net income (GAAP)                                                 141,311      (28,478)       (55,568)      57,265
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Interest expense, net                                                -             -            9,984        9,984
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Income tax (benefit)                                                 -             -           (5,787)      (5,787)
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Depreciation and amortization                                     39,503        12,140          8,471       60,114
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
EBITDA (non-GAAP)                                                 180,814      (16,338)       (42,900)      121,576
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Restructuring expenses, net                                       22,211           -            1,635       23,846
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Foreign currency revaluation losses/(gains)                       (5,075)        (17)           1,498       (3,594)
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Gain on sale of investment                                           -             -            (872)        (872)
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Pre-tax loss attributable to non-controlling interest in ASC         -            20              -           20
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
Adjusted EBITDA (non-GAAP)                                       $197,950      ($16,335)      ($40,639)    $140,976
------------------------------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- --------
*includes $14 million BR725 charge                                                                        

Table 12

Three Months ended December 31, 2016                      Pre-tax    Tax Effect     After-tax Effect      Per Share
(in thousands,                                                                                  amounts                                                                                                                                                            Effect
except per share amounts)
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------
Restructuring expenses, net                                $723         $255              $468              $0.01
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------
Foreign currency revaluation gains                         3,209        1,133             2,076             0.06
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------
Expenses related to integration of acquired business        762          290               472              0.01
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------
Loss due to theft                                          2,506         877              1,629             0.05
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------
Favorable effect of change in income tax rate                -          1,278             1,278             0.04
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------
Net discrete income tax benefit                              -          1,243             1,243             0.04
---------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ---------------- -------------------- -------------------- ---------

Table 13

Three Months ended December 31, 2015               Pre-tax    Tax Effect      After-tax    Per Share Effect
(in thousands,                                                                           amounts                                                                                                 Effect
except per share amounts)
--------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Restructuring expenses, net                        $9,917       $3,154         $6,763            $0.21
--------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Foreign currency revaluation losses                  550          175            375             0.01
--------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Favorable effect of change in income tax rate         -          2,489          2,489            0.08
--------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Net discrete income tax benefit                       -         27,287         27,287            0.85
--------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------

Table 14

Year ended December 31, 2016            Pre-tax    Tax Effect      After-tax    Per Share Effect
(in thousands, except per                                                     amounts                                                                                                 Effect
share amounts)
---------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Restructuring expenses, net             $8,376       $3,220         $5,156            $0.16
---------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Foreign currency revaluation gains       3,913        1,389          2,524            0.07
---------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Acquisition expenses                     5,367        1,933          3,434            0.11
---------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Loss due to theft                        2,506         877           1,629            0.05
---------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------
Net discrete income tax benefit            -          2,175          2,175            0.07
---------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ----------------

Table 15

Year ended December 31, 2015                                 Pre-tax    Tax Effect      After-tax     Per Share
(in thousands, except per                                                                          amounts                                                                                                 Effect                                              Effect
share amounts)
------------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ---------
Restructuring expenses, net                                  $23,846      $8,434         $15,412        $0.48
------------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ---------
Foreign currency revaluation gains                            3,594        1,422          2,172         0.07
------------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ---------
Gain on sale of investment                                     872          331            541          0.02
------------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ---------
Net discrete income tax benefit                                 -         22,174         22,174         0.69
------------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ---------
Charge for revision in estimated contract profitability      14,000        5,180          8,820         0.28
------------------------------------------------------- -------------------- -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- --------- -------------------- -------------------- ---------

The following table contains the calculation of net income per share attributable to the Company, excluding adjustments:

Table 16

                                                                                   Three Months ended                                                                          Years ended
                                                                                                                                               December 31,                                                                                                                  December 31,
Per share amounts (Basic)                                                    2016                     2015                     2016                     2015
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net income attributable to the Company, reported (GAAP)                      $0.49                    $1.17                    $1.64                   $1.79*
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Adjustments:                                                                            
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Restructuring expenses, net                                                  0.01                     0.21                     0.16                     0.48
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Discrete tax adjustments and effect of change in income tax rate            (0.08)                   (0.93)                   (0.07)                   (0.69)
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Foreign currency revaluation (gains)/ losses                                (0.06)                    0.01                    (0.07)                   (0.07)
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Acquisition expenses                                                           -                        -                      0.11                       -
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Gain on the sale of investment                                                 -                        -                        -                     (0.02)
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net income attributable to the Company, excluding adjustments                $0.36                    $0.46                    $1.77                    $1.49
(non-GAAP)
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
*includes $0.28 per share for BR725 charge                                                                                                                                                                                 

The following table contains the calculation of net debt:

Table 17

                      December      September    June 30,      March 31,    December 31,
(in thousands)                                                                 31, 2016                                            30, 2016                                             2016                                                2016                                                 2015
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------
Notes and loans payable                    $312          $343         $531          $590           $587
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------
Current maturities of long-term debt      51,666         1,462         566           16             16
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------
Long-term debt                            432,918       490,003      485,215       255,076        265,080
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------
Total debt                                484,896       491,808      486,312       255,682        265,683
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------
Cash and cash equivalents                 181,742       196,170      176,025       169,615        185,113
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------
Net debt                                 $303,154      $295,638     $310,287       $86,067        $80,570
------------------------------------ -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- ------------

The following table contains the reconciliation of MC 2017 projected Adjusted EBITDA to MC 2017 projected net income:

Table 18

Machine Clothing Full Year 2017 Outlook              
(in millions)                                                                                            Estimated range for full year
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
Net Income (GAAP)                                         $148-$157
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
Depreciation and amortization                              (32-38)
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
EBITDA (non-GAAP)                                         $180-$195
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
Less Restructuring expenses net                               *
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
Less Foreign currency revaluation losses                      *
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
Adjusted EBITDA (non-GAAP)                                $180-$195
---------------------------------------- -------------------- -------------------- -------------------- -----------------------------
* Due to the uncertainty of these items, management is currently
unable to project restructuring expenses and foreign currency
revaluation gains/losses for the remainder of the year.

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

Forward-looking statements in this release or in the webcast include, without limitation, statements about macroeconomic, geopolitical and paper-industry trends and conditions during 2016 and in future years; expectations in 2017 and in future periods of sales, EBITDA, Adjusted EBITDA, income, gross profit, gross margin and other financial items in each of the Company’s businesses, including the acquired composite aerostructures business, and for the Company as a whole; the timing and impact of production and development programs in the Company’s AEC business segment and the sales growth potential of key AEC programs, as well as AEC as a whole; the amount and timing of capital expenditures, future tax rates and cash paid for taxes, depreciation and amortization; future debt and net debt levels and debt covenant ratios; and changes in currency rates and their impact on future revaluation gains and losses. Furthermore, a change in any one or more of the foregoing factors could have a material effect on the Company’s financial results in any period. Such statements are based on current expectations, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Statements expressing management’s assessments of the growth potential of its businesses, or referring to earlier assessments of such potential, are not intended as forecasts of actual future growth, and should not be relied on as such. While management believes such assessments to have a reasonable basis, such assessments are, by their nature, inherently uncertain. This release and earlier releases set forth a number of assumptions regarding these assessments, including historical results, independent forecasts regarding the markets in which these businesses operate, and the timing and magnitude of orders for our customers’ products.

Historical growth rates are no guarantee of future growth, and such independent forecasts and assumptions could prove materially incorrect in some cases.

                                                                                                                                           
                                                                                                                                                                        ALBANY INTERNATIONAL CORP.
                                                                                                                                                                     CONSOLIDATED STATEMENTS OF INCOME
                                                                                                                                                                   (in thousands, except per share data)
                                                                                                                                                                                (unaudited)
                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                           
                                          Three Months Ended                                                                                                                                                                                                                                                  Years Ended
                                             December 31,                                                                                                                                                                                                                                                    December 31,
                                                                                                                                                                                                                                                                                                                                           
  2016                                                                               2015                                                                                                                                                                        2016                                                                                   2015
--------                                                                ------------------------------                                                                                                                                                      --------------                                                                --------------------------------
                                                                                                                                                                                                                                                                                                                                           
$213,046                                                                $177,466                                                                Net sales                                                                                                         $779,839                                                                  $709,868
 135,714                                                                 105,800                                             Cost of goods sold                                                                                                 479,271                                                                   431,182  
--------                                                                -------- --------------------                                                                                                                                                       --------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                           
  77,332                                                                  71,666                                                                Gross profit                                                                                                       300,568                                                                   278,686
  39,115                                                                  35,518                                                                   Selling, general, and administrative expenses                                                                   160,112                                                                   146,192
  10,664                                                                  11,366                                                                   Technical, product engineering, and research expenses                                                            40,304                                                                    44,753
     723                                                                   9,917                                                Restructuring expenses, net                                                                                       8,376                                                                    23,846  
--------                                                                -------- --------------------                                                                                                                                                       --------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                           
  26,830                                                                  14,865                                                                Operating income                                                                                                    91,776                                                                    63,895
   3,854                                                                   1,935                                                                   Interest expense, net                                                                                            13,464                                                                     9,984
   2,149                                                                   1,649                                                Other expense, net                                                                                                   46                                                                     2,433  
--------                                                                -------- --------------------                                                                                                                                                       --------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                           
  20,827                                                                  11,281                                                                Income before income taxes                                                                                          78,266                                                                    51,478
   4,841                                                                 (26,185 )                                                                 Income tax expense/(benefit)                                                                                     25,454                                                                    (5,787 )
--------                                                                -------- --------------------                                                                                                                                                       --------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                           
  15,986                                                                  37,466                                                                 Net income                                                                                                         52,812                                                                    57,265
     190                                                                    (114 )                                                               Net income/(loss) attributable to the noncontrolling interest                                                          79                                                                       (14 )
--------                                                                -------- --------------------                                                                                                                                                       --------------                                                                ---------- --------------------
 $15,796                                                                 $37,580                                              Net income attributable to the Company                                                                            $52,733                                                                   $57,279  
========                                                                ======== ====================                                                                                                                                                       ==============                                                                ========== ====================
                                                                                                                                                                                                                                                                                                                                           
   $0.49                                                                   $1.17                                                                Earnings per share attributable to Company shareholders - Basic                                                      $1.64                                                                     $1.79
                                                                                                                                                                                                                                                                                                                                           
   $0.49                                                                   $1.17                                                                Earnings per share attributable to Company shareholders - Diluted                                                    $1.64                                                                     $1.79
                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                Shares of the Company used in computing earnings per share:
  32,107                                                                  32,016                                                                  Basic                                                                                                             32,086                                                                    31,978
                                                                                                                                                                                                                                                                                                                                           
  32,145                                                                  32,059                                                                  Diluted                                                                                                           32,125                                                                    32,088
                                                                                                                                                                                                                                                                                                                                           
   $0.17                                                                   $0.17                                                                Dividends per share, Class A and Class B                                                                             $0.68                                                                     $0.67
                                                                                                                              
                                                                                                                                               ALBANY INTERNATIONAL CORP.
                                                                                                                                               CONSOLIDATED BALANCE SHEETS
                                                                                                                                            (in thousands, except share data)
                                                                                                                                                       (unaudited)
                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                  
                                                                                                                                                December 31,                                                                                                                            December 31,
                                                                                                                                                    2016                                                                                                                                    2015
                                                                                                                            ----------------------------------------------------                                                                                    ----------------------------------------------------
ASSETS
  Cash and cash equivalents                                                                                                                    $   181,742                                                                                                                             $   185,113
  Accounts receivable, net                                                                                                                         171,193                                                                                                                                 146,383
  Inventories                                                                                                                                      133,906                                                                                                                                 106,406
  Income taxes prepaid or receivable                                                                                                                 5,213                                                                                                                                   2,927
  Asset held for sale                                                                                                                                    -                                                                                                                                   4,988
  Prepaid expenses and other current assets                                                                                       9,251                                                                                             6,243  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
      Total current assets                                                                                                                         501,305                                                                                                                                 452,060
                                                                                                                                                                                                                                                                     
  Property, plant and equipment, net                                                                                                               422,564                                                                                                                                 357,470
  Intangibles                                                                                                                                       66,454                                                                                                                                     154
  Goodwill                                                                                                                                         160,375                                                                                                                                  66,373
  Income taxes receivable and deferred                                                                                                              68,865                                                                                                                                 108,945
  Contract receivables                                                                                                                              14,045                                                                                                                                       -
  Other assets                                                                                                                   29,825                                                                                            24,560  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
      Total assets                                                                                                                             $ 1,263,433                                                                                                          $ 1,009,562  
                                                                                                                            ==================== ========= ====================                                                                                     ==================== ========= ====================
                                                                                                                                                                                                                                                                     
LIABILITIES AND SHAREHOLDERS’ EQUITY
  Notes and loans payable                                                                                                                      $       312                                                                                                                             $       587
  Accounts payable                                                                                                                                  43,305                                                                                                                                  26,753
  Accrued liabilities                                                                                                                               95,195                                                                                                                                  91,785
  Current maturities of long-term debt                                                                                                              51,666                                                                                                                                      16
  Income taxes payable                                                                                                            9,531                                                                                             7,090  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
      Total current liabilities                                                                                                                    200,009                                                                                                                                 126,231
                                                                                                                                                                                                                                                                     
  Long-term debt                                                                                                                                   432,918                                                                                                                                 265,080
  Other noncurrent liabilities                                                                                                                     106,827                                                                                                                                 101,544
  Deferred taxes and other credits                                                                                               12,389                                                                                            14,154  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
      Total liabilities                                                                                                         752,143                                                                                           507,009  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
                                                                                                                                                                                                                                                                     
SHAREHOLDERS’ EQUITY
  Preferred stock, par value $5.00 per share;
    authorized 2,000,000 shares; none issued                                                                                                             -                                                                                                                                       -
  Class A Common Stock, par value $.001 per share;
    authorized 100,000,000 shares; issued 37,319,266 in 2016
    and 37,238,913 in 2015                                                                                                                              37                                                                                                                                      37
  Class B Common Stock, par value $.001 per share;
    authorized 25,000,000 shares; issued and
    outstanding 3,233,998 in 2016 and 3,235,048 in 2015                                                                                                  3                                                                                                                                       3
  Additional paid in capital                                                                                                                       425,953                                                                                                                                 423,108
  Retained earnings                                                                                                                                522,855                                                                                                                                 491,950
  Accumulated items of other comprehensive income:
    Translation adjustments                                                                                                                       (133,298 )                                                                                                                              (108,655 )
    Pension and postretirement liability adjustments                                                                                               (51,719 )                                                                                                                               (48,725 )
    Derivative valuation adjustment                                                                                                                    828                                                                                                                                  (1,464 )
  Treasury stock (Class A), at cost 8,443,444 shares in 2016
   and 8,455,293 shares in 2015                                                                                                (257,136 )                                                                                                           (257,391 )
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
      Total Company shareholders’ equity                                                                                                           507,523                                                                                                                                 498,863
  Noncontrolling interest                                                                                                         3,767                                                                                             3,690  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
 Total equity                                                                                                                   511,290                                                                                           502,553  
                                                                                                                            -------------------- --------- --------------------                                                                                     -------------------- --------- --------------------
      Total liabilities and shareholders’ equity                                                                                               $ 1,263,433                                                                                                          $ 1,009,562  
                                                                                                                            ==================== ========= ====================                                                                                     ==================== ========= ====================
                                                                                                                                                                                                   
                                                                                                                                                                                                    ALBANY INTERNATIONAL CORP.
                                                                                                                                                                                               CONSOLIDATED STATEMENTS OF CASH FLOW
                                                                                                                                                                                                          (in thousands)
                                                                                                                                                                                                            (unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                   
                                                    Three Months Ended                                                                                                                                                                                                                                                                                        Years ended
                                                       December 31,                                                                                                                                                                                                                                                                                          December 31,
             2016                                                                                         2015                                                                                                                                                                                                    2016                                                                                          2015
------------------------------                                                               ------------------------------                                                                                                                                                                          ------------------------------                                                               --------------------------------
                                                                                                                                                                     OPERATING ACTIVITIES
 $15,986                                                                                      $37,466                                                                Net income                                                                                                                       $52,812                                                                                        $57,265
                                                                                                                                                                     Adjustments to reconcile net income to net cash provided by
                                                                                                                                                                     operating activities:
  13,370                                                                                       13,124                                                                Depreciation                                                                                                                      58,106                                                                                         52,974
   2,867                                                                                        1,709                                                                Amortization                                                                                                                       9,355                                                                                          7,140
    (222 )                                                                                      3,891                                                                Change in other noncurrent liabilities                                                                                            (6,504 )                                                                                        2,159
   6,663                                                                                      (32,186 )                                                              Change in deferred taxes and other liabilities                                                                                     5,889                                                                                        (29,517 )
   1,369                                                                                          608                                                                Provision for write-off of property, plant and equipment                                                                           2,778                                                                                            867
     211                                                                                            -                                                                Non-cash interest expense                                                                                                            564                                                                                              -
       -                                                                                            -                                                                Gain on disposition of assets                                                                                                          -                                                                                         (1,056 )
     (34 )                                                                                        (21 )                                                              Excess tax benefit of options exercised                                                                                             (150 )                                                                                         (624 )
     551                                                                                          422                                                                Compensation and benefits paid or payable in Class A Common Stock                                                                  2,433                                                                                          1,707
      51                                                                                          103                                                                Write-off of pension liability due to settlement                                                                                      51                                                                                            103
       -                                                                                          (13 )                                                              Fair value adjustment on available-for-sale assets                                                                                     -                                                                                          3,212
                                                                                                                                                                      Changes in operating assets and liabilities that provide/(use) cash,
                                                                                                                                                                      net of impact of business acquisition:
  (6,205 )                                                                                      3,983                                                                Accounts receivable                                                                                                              (12,697 )                                                                                         (404 )
     366                                                                                        2,480                                                                Inventories                                                                                                                      (12,520 )                                                                                       (8,277 )
     707                                                                                        2,110                                                                Prepaid expenses and other current assets                                                                                         (2,595 )                                                                                        1,253
  (3,943 )                                                                                     (2,564 )                                                              Income taxes prepaid and receivable                                                                                               (2,206 )                                                                                       (3,156 )
   3,652                                                                                       (1,534 )                                                              Accounts payable                                                                                                                   2,108                                                                                         (6,001 )
   5,048                                                                                        1,220                                                                Accrued liabilities                                                                                                                1,312                                                                                          2,081
  (2,601 )                                                                                      5,085                                                                Income taxes payable                                                                                                               1,398                                                                                          9,072
 (14,045 )                                                                                          -                                                                Contract receivables                                                                                                             (14,045 )                                                                                            -
   3,900                                                                       809                                             Other, net                                                                                                                        (6,571 )                                                                                        7,139  
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
  27,691                                                                    36,692                                             Net cash provided by operating activities                                                                                         79,518                                                                      95,937  
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                     INVESTING ACTIVITIES
       -                                                                                            -                                                                Purchase of business, net of cash acquired                                                                                      (187,000 )                                                                                            -
 (21,215 )                                                                                     (8,933 )                                                              Purchases of property, plant and equipment                                                                                       (71,244 )                                                                                      (48,622 )
    (986 )                                                                                     (1,384 )                                                              Purchased software                                                                                                                (2,248 )                                                                                       (1,973 )
     517                                                                         -                                             Proceeds from sale or involuntary conversion of assets                                                                             6,939                                                                       2,797  
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
 (21,684 )                                                                                    (10,317 )                                                              Net cash used in investing activities                                                                                           (253,553 )                                                                                      (47,798 )
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                     FINANCING ACTIVITIES
   3,112                                                                                       50,308                                                                Proceeds from borrowings                                                                                                         235,907                                                                                         95,126
 (10,661 )                                                                                    (55,115 )                                                              Principal payments on debt                                                                                                       (34,356 )                                                                                     (102,215 )
       -                                                                                           (2 )                                                              Debt acquisition costs                                                                                                            (1,771 )                                                                                       (1,673 )
       -                                                                                            -                                                                Swap termination payment                                                                                                          (5,175 )                                                                                            -
      63                                                                                           98                                                                Proceeds from options exercised                                                                                                      517                                                                                          1,897
      34                                                                                           21                                                                Excess tax benefit of options exercised                                                                                              150                                                                                            624
  (5,458 )                                                                                     (5,442 )                                                              Dividends paid                                                                                                                   (21,812 )                                                                                      (21,088 )
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
 (12,910 )                                                                                    (10,132 )                                                              Net cash provided by/(used in) financing activities                                                                              173,460                                                                     (27,329 )
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
  (7,525 )                                                                                     (2,910 )                                                              Effect of exchange rate changes on cash and cash equivalents                                                                      (2,796 )                                                                                      (15,499 )
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                   
 (14,428 )                                                                                     13,333                                                                (Decrease)/increase in cash and cash equivalents                                                                                  (3,371 )                                                                                        5,311
 196,170                                                                   171,780                                             Cash and cash equivalents at beginning of period                                                                                 185,113                                                                     179,802  
-------- --------------------                                                                -------- --------------------                                                                                                                                                                           -------- --------------------                                                                ---------- --------------------
$181,742                                                                  $185,113                                             Cash and cash equivalents at end of period                                                                                      $181,742                                                                    $185,113  
======== ====================                                                                ======== ====================                                                                                                                                                                           ======== ====================                                                                ========== ====================

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170208006201r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170208006201/en/

SOURCE: Albany International Corp.

Albany International Corp. 
Investors 
John Cozzolino, 518-445-2281 
john.cozzolino@albint.com 
or 
Media 
Heather Kralik, 801-505-7001 
heather.kralik@albint.com


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