UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended:			~~September~~March 3031, ~~2023~~2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from __________ to __________

Commission file number: 1-10026


ALBANY INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)

Delaware


(State or other jurisdiction of incorporation or organization)

216 Airport Drive, Rochester, New Hampshire


(Address of principal executive offices)

14-0462060


(IRS Employer Identification No.)

03867


(Zip Code)

603-330-~~5850~~5800


(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value per share	AIN	The New York Stock Exchange (NYSE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had 31.2 million shares of Class A Common Stock outstanding as of ~~October~~April 15, ~~2023~~2024.

ALBANY INTERNATIONAL CORP.

TABLE OF CONTENTS

		Page No.
Part I Financial information
Item 1.	Financial Statements
	Consolidated statements of income – three and nine months ended September 30, 2023 and 2022	1
	Consolidated statements of income – three months ended March 31, 2024 and 2023	1
	Consolidated statements of comprehensive income/(loss) – three and nine months ended September 30, 2023 and 2022	2
	Consolidated statements of comprehensive income/(loss) – three months ended March 31, 2024 and 2023	2
	Consolidated balance sheets as of September 30, 2023 and December 31, 2022	3
	Consolidated balance sheets as of March 31, 2024 and December 31, 2023	3
	Consolidated statements of cash flows – nine months ended September 30, 2023 and 2022	4
	Consolidated statements of cash flows – three months ended March 31, 2024 and 2023	4
	Notes to consolidated financial statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2420
	Forward-looking statements	2420
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3829
Item 4.	Controls and Procedures	3829
Part II Other Information
Item 1.	Legal Proceedings	3930
Item 1A.	Risk Factors	3930
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4030
Item 3.	Defaults upon Senior Securities	4030
Item 4.	Mine Safety Disclosures	4030
Item 5.	Other Information	4130
Item 6.	Exhibits	4231

Index

ITEM 1. FINANCIAL STATEMENTS

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2023		2022		2023		2022
	2024		2023
Net revenues	$	~~281~~313,~~106~~330	$	~~260~~269,~~563~~096	$	~~824,325~~	$	~~766,101~~
Cost of goods sold	~~179~~204,~~271~~644		~~160~~169,~~070~~778		~~520,468~~		~~473,411~~
Gross profit	~~101~~108,~~835~~686		~~100~~99,~~493~~318		~~303,857~~		~~292,690~~
Selling, general, and administrative expenses	5154,~~975~~835		3648,~~873~~479		~~147,214~~		~~119,325~~
Technical and research expenses	912,~~708~~665		910,~~934~~277		~~30,303~~		~~29,984~~
Restructuring expenses, net	822,209		4220		~~227~~		~~268~~
Operating income	4038,~~070~~977		5340,~~644~~542		~~126,113~~		~~143,113~~
Interest expense/(income), net	3,~~653~~319		3,~~794~~290		~~10,049~~		~~11,336~~
Pension settlement expense	—		49,128		—		49,128
Other (income)/expense, net	(2,982)		(455)
Other (income)/expense, net	56		(6,918)		(4,910)		(17,891)
Income before income taxes	38,640		37,707
Income before income taxes	36,361		7,640		120,974		100,540
Income taxes	11,271		10,621
Income tax expense/(benefit)	9,207		(3,183)		39,908		22,273
Net income	27,369		27,086
Net income	27,154		10,823		81,066		78,267
Net income attributable to the noncontrolling interest	78		197
Net income attributable to the noncontrolling interest	45		129		396		635
Net income attributable to the Company	$	27,291	$	26,889
Net income attributable to the Company	$	27,109	$	10,694	$	80,670	$	77,632
Earnings per share attributable to Company shareholders - Basic	$	0.87	$	0.86
Earnings per share attributable to Company shareholders - Basic	$	0.87	$	0.34	$	2.59	$	2.47
Earnings per share attributable to Company shareholders - Diluted	$	0.87	$	0.86
Earnings per share attributable to Company shareholders - Diluted	$	0.87	$	0.34	$	2.58	$	2.46
Shares of the Company used in computing earnings per share:
Basic	31,~~185~~209		31,~~111~~131		~~31,163~~		~~31,416~~
Diluted	31,~~283~~291		31,~~223~~217		~~31,256~~		~~31,518~~
Dividends declared per Class A share	$	0.2526	$	0.2125	$	~~0.75~~	$	~~0.63~~

The accompanying notes are an integral part of the consolidated financial statements

Index

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(in thousands)

(unaudited)

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2023		2022		2023		2022
	2024		2023
Net income	$	27,~~154~~369	$	1027,~~823~~086	$	~~81,066~~	$	~~78,267~~
Other comprehensive income/(loss), before tax:
Foreign currency translation	(1511,~~131~~831)		~~(38~~13,~~971)~~440		~~(4,509)~~		~~(79,841)~~
Reclassification of loss on pension settlement	—		42,657		—		42,657
Amortization of pension liability adjustments:
Prior service credit	(~~1,031~~38)		(1,~~123~~031)		~~(3,092)~~		~~(3,368)~~
Net actuarial loss	~~349~~178		~~967~~346		~~1,042~~		~~2,905~~
Payments and amortization related to interest rate swaps included in earnings	(34,~~990~~038)		(~~106~~3,223)		~~(10,891)~~		~~2,758~~
Derivative valuation adjustment	~~996~~1,194		~~8,492~~(662)		~~4,533~~		~~23,529~~
Income taxes related to items of other comprehensive income/(loss):
Reclassification of loss on pension settlement	—		(16,459)		—		(16,459)
Amortization of prior service credit	11		315
Amortization of prior service credit	315		344		946		1,031
Amortization of net actuarial loss	(54)		(105)
Amortization of net actuarial loss	(107)		(296)		(319)		(889)
Payments and amortization related to interest rate swaps included in earnings	1,022		815
Payments and amortization related to interest rate swaps included in earnings	1,009		(27)		2,755		(752)
Derivative valuation adjustment	(302)		168
Derivative valuation adjustment	(252)		(2,151)		(1,147)		(5,960)
Comprehensive income	13,511		37,149
Comprehensive income	9,312		4,150		70,384		43,878
Comprehensive income attributable to the noncontrolling interest	124		435
Comprehensive income attributable to the noncontrolling interest	(99)		73		669		544
Comprehensive income attributable to the Company	$	13,387	$	36,714
Comprehensive income attributable to the Company	$	9,411	$	4,077	$	69,715	$	43,334

The accompanying notes are an integral part of the consolidated financial statements

Index

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

	September 30, 2023		December 31, 2022
	March 31, 2024		December 31, 2023
ASSETS
Assets
Cash and cash equivalents	$	~~171~~125,~~506~~412	$	~~291~~173,~~776~~420
Accounts receivable, net	~~270~~305,~~487~~495		~~200~~287,~~018~~781
Contract assets, net	~~165~~179,~~833~~223		~~148~~182,~~695~~281
Inventories	~~180~~166,~~991~~025		~~139~~169,~~050~~567
Income taxes prepaid and receivable	611,~~402~~686		711,~~938~~043
Prepaid expenses and other current assets	6157,~~155~~331		5053,~~962~~872
Total current assets	~~856~~845,~~374~~172		~~838~~877,~~439~~964
Property, plant and equipment, net	~~566~~589,~~974~~970		~~445~~601,~~658~~989
Intangibles, net	4442,~~636~~839		3344,~~811~~646
Goodwill	~~177~~178,~~398~~704		~~178~~180,~~217~~181
Deferred income taxes	1524,~~284~~153		1522,~~196~~941
Noncurrent receivables, net	~~25,300~~—		274,~~913~~392
Other assets	~~104~~117,~~284~~342		~~103~~102,~~021~~901
Total assets	$	1,~~790~~798,~~250~~180	$	1,~~642~~835,~~255~~014
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities and Shareholders' Equity
Accounts payable	$	7080,~~105~~778	$	6987,~~707~~104
Accrued liabilities	~~135~~118,~~343~~181		~~126~~142,~~385~~988
Current maturities of long-term debt	274,~~246~~445		—4,218
Income taxes payable	108,~~103~~586		1514,~~224~~369
Total current liabilities	~~242~~211,~~797~~990		~~211~~248,~~316~~679
Long-term debt	~~463~~434,~~339~~689		~~439~~452,~~000~~667
Other noncurrent liabilities	~~141~~151,~~620~~121		~~108~~139,~~758~~385
Deferred taxes and other liabilities	2026,~~861~~815		1526,~~638~~963
Total liabilities	~~868~~824,~~617~~615		~~774~~867,~~712~~694
COMMITMENTS AND CONTINGENCIES (Note 15)
Commitments and Contingencies (Note 16)
SHAREHOLDERS' EQUITY
Shareholders' Equity:
Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued	—		—
Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; 40,856,910 issued in 2023 and 40,785,434 in 2022	41		41
Class A Common Stock, par value $0.001 per share; authorized 100,000,000 shares; 40,898,219 issued in 2024 and 40,856,910 in 2023	41		41
Additional paid in capital	~~446~~449,~~470~~028		~~441~~448,~~540~~218
Retained earnings	~~988~~1,~~602~~030,111		~~931~~1,~~318~~010,942
Accumulated items of other comprehensive income:
Translation adjustments	(~~151~~137,~~177~~017)		(~~146~~124,~~851~~901)
Pension and postretirement liability adjustments	(1716,~~389~~964)		(1517,~~783~~346)
Derivative valuation adjustment	126,~~957~~955		179,~~707~~079
Treasury stock (Class A), at cost; 9,661,845 shares in 2023 and 9,674,542 in 2022	(364,665)		(364,923)
Treasury stock (Class A), at cost; 9,661,845 shares in 2024 and 2023	(364,665)		(364,665)
Total Company shareholders' equity	914,839		863,049
Total shareholders' equity	967,489		961,368
Noncontrolling interest	6,~~794~~076		45,~~494~~952
Total equity	~~921~~973,~~633~~565		~~867~~967,~~543~~320
Total liabilities and shareholders' equity	$	1,~~790~~798,~~250~~180	$	1,~~642~~835,~~255~~014

The accompanying notes are an integral part of the consolidated financial statements

Index

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
		2023		2022
		2024		2023
OPERATING ACTIVITIES
Cash flows from operating activities:
Net income		$	8127,~~066~~369	$	7827,~~267~~086
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation		5020,~~164~~556		4615,864
Amortization		41,~~614~~748		51,~~044~~503
Change in deferred taxes and other liabilities		(~~1,264~~675)		(~~15,582~~887)
Impairment of property, plant, equipment, and inventory		577		2,610
Impairment of property, plant and equipment		49		100
Non-cash interest expense		~~1,148~~256		~~840~~280
Non-cash portion of pension settlement expense		—		42,657
Compensation and benefits paid or payable in Class A Common Stock		810		378
Compensation and benefits paid or payable in Class A Common Stock		5,189		3,282
Provision for credit losses from uncollected receivables and contract assets		365		309
Provision for credit losses from uncollected receivables and contract assets		641		885
Foreign currency remeasurement (gain) on intercompany loans		(792)		(1,732)
Foreign currency remeasurement (gain) on intercompany loans		(4,704)		(6,629)
Fair value adjustment on foreign currency options		280		58
Fair value adjustment on foreign currency options		581		(409)
Changes in operating assets and liabilities that provided/(used) cash:
Changes in operating assets and liabilities that provided/(used) cash, net of impact of business acquisition:
Accounts receivable		(17,061)		(13,702)
Accounts receivable		(18,172)		(20,260)
Contract assets		2,982		(4,403)
Contract assets		(16,550)		(37,201)
Inventories		1,917		(12,360)
Inventories		(293)		(24,895)
Prepaid expenses and other current assets		(6,525)		(2,191)
Prepaid expenses and other current assets		(3,030)		(2,733)
Income taxes prepaid and receivable		(721)		(693)
Income taxes prepaid and receivable		1,597		(2,179)
Accounts payable		7,730		5,214
Accounts payable		(6,661)		5,081
Accrued liabilities		(22,739)		(23,137)
Accrued liabilities		(16,454)		(12,624)
Income taxes payable		(5,466)		(10,996)
Income taxes payable		(5,810)		2,639
Noncurrent receivables		(178)		867
Noncurrent receivables		2,276		2,976
Other noncurrent liabilities		506		7
Other noncurrent liabilities		(3,602)		(5,960)
Other, net		(814)		2,042
Other, net		2,499		4,634
Net cash provided by/(used in) operating activities		9,597		(16,393)
Net cash provided by operating activities		73,812		67,307
Cash flows from investing activities:
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(26,859)		(16,275)
Purchase of business, net of cash acquired		(133,470)		—
Purchased software		(21)		—
Purchases of property, plant and equipment		(48,850)		(50,948)
Net cash used in investing activities		(26,880)		(16,275)
Purchased software		(276)		(1,884)
Cash flows from financing activities:
Net cash used in investing activities		(182,596)		(52,832)
Proceeds from borrowings		43,237		58,000
FINANCING ACTIVITIES
Principal payments on debt		(60,750)		(6,000)
Proceeds from borrowings		71,249		145,000
Taxes paid in lieu of share issuance		(2,446)		(3,136)
Principal payments on debt		(51,479)		(48,000)
Dividends paid		(8,110)		(7,778)
Principal payments on finance lease liabilities		—		(654)
Net cash (used in)/provided by financing activities		(28,069)		41,086
Debt acquisition costs		(4,108)		—
Effect of exchange rate changes on cash and cash equivalents		(2,656)		4,064
Purchase of Treasury shares		—		(84,780)
(Decrease)/increase in cash and cash equivalents		(48,008)		12,482
Taxes paid in lieu of share issuance		(3,136)		(770)
Cash and cash equivalents at beginning of period		173,420		291,776
Proceeds from options exercised		—		17
Cash and cash equivalents at end of period		$	125,412	$	304,258
Dividends paid		(23,365)		(19,932)
Net cash used in financing activities		(10,839)		(9,119)
Effect of exchange rate changes on cash and cash equivalents		(647)		(30,910)
Decrease in cash and cash equivalents		(120,270)		(25,554)
Cash and cash equivalents at beginning of period		291,776		302,036
Cash and cash equivalents at end of period		$	171,506	$	276,482

The accompanying notes are an integral part of the consolidated financial statements

Index

ALBANY INTERNATIONAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Significant Accounting Policies

Basis of Presentation

In the opinion of management, the accompanying ~~unaudited~~ consolidated financial ~~statements~~information ~~contain~~reflects all adjustments necessary for a fair presentation of ~~results for such periods.~~ Albany International Corp.'s ("Albany", the "Registrant", the "Company", "we", "us", or "our") ~~consolidates the~~ financial position, results of ~~its~~operations ~~subsidiaries~~and cash flows for ~~all~~the interim periods presented, but do not require all disclosures required by the accounting principles generally accepted in the United States ("GAAP"). All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The ~~results~~information ~~for~~included ~~any~~in ~~interim~~this ~~period~~Quarterly ~~are~~Report ~~not~~on ~~necessarily~~Form ~~indicative~~10-Q ofshould ~~results~~be ~~for~~read in conjunction with the ~~full~~Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the Company's Consolidated Financial Statements and accompanying Notes. Actual results could differ materially from those estimates.Estimates

The ~~information~~preparation ~~included~~of the consolidated financial statements in ~~this~~conformity ~~Quarterly~~with ~~Report~~GAAP onrequires ~~Form~~management ~~10-Q~~to ~~should~~make beestimates ~~read~~and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in ~~conjunction~~making ~~with~~estimates, ~~Albany~~actual ~~International~~results ~~Corp~~reported in future periods may differ from those estimates.’s ~~Annual~~Estimates ~~Report~~and onassumptions ~~Form~~are ~~10-K~~reviewed ~~for~~periodically, and the ~~year~~effects ~~ended~~of ~~December 31,~~any ~~2022~~revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

2. Reportable Segments and Revenue Recognition

InThe ~~accordance~~Company ~~with~~is ~~applicable~~organized ~~disclosure~~based ~~guidance~~on ~~for~~the ~~enterprise~~nature of its products and is composed of two reportable segments, Machine Clothing ("MC") and ~~related~~Albany ~~information~~Engineered Composites ("AEC"), each overseen by a Segment President. These segments are reflective of how the ~~internal~~Company's ~~organization~~Chief ~~that~~Executive Officer, who is ~~used~~its byChief ~~management~~Operating ~~for~~Decisions ~~making~~Maker ("CODM"), reviews operating ~~decisions~~results for the purpose of allocating resources and assessing performance. isThe ~~used~~Company ashas ~~the~~not ~~basis~~aggregated operating segments for ~~our~~purposes of identifying reportable segments.

Machine Clothing:

The Machine Clothing (“MC”) segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, nonwovens, fiber cement and several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels for MC are substantially the same in each region of the world in which we operate.

We design, manufacture, and market paper machine clothing (used in the manufacturing of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure.

On August 31, 2023, the Company completed the acquisition of Heimbach GmbH (“Heimbach”), a privately-held manufacturer of paper machine clothing and technical textiles, as further described in Note 17. Business Combination. The financial results of the acquired company are included in the Machine Clothing reportable segment.

Albany Engineered Composites:

The Albany Engineered Composites (“AEC”) segment provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, the SAFRAN Group (“SAFRAN”) owns a 10 percent noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract, where revenue is determined by a cost-plus-fee agreement. The LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircraft. AEC's largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and cases for CFM International's LEAP engine) accounted for approximately 16 percent of the Company's consolidated Net revenues in 2022.

AEC net sales to SAFRAN were $140.8 million and $125.4 million in the first nine months of 2023 and 2022, respectively. The total of Accounts receivable, Contract assets and Noncurrent receivables due from SAFRAN amounted to $90.0 million and $80.8 million as of September 30, 2023 and December 31, 2022, respectively.

Other significant programs by AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing 7-Series programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine. For the year ended December 31, 2022, approximately 46 percent of AEC revenues were related to U.S. government contracts or programs.

Index

The Machine Clothing (“MC”) segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel products, nonwovens, fiber cement and for several other industrial applications. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure. We manufacture belts for each section of the paper machine and for every grade of paper. We sell our MC products directly to customer end-users in countries across the globe. MC's products, manufacturing processes, and distribution channels are substantially the same in each region of the world in which we operate.

On August 31, 2023, the Company completed the acquisition of Heimbach GmbH (“Heimbach”), a privately-held manufacturer of paper machine clothing and technical textiles. The financial results of the acquired company are included in the Machine Clothing reportable segment.

Albany Engineered Composites:

AEC net sales to SAFRAN were $50.1 million and $45.3 million in the first three months of 2024 and 2023, respectively. The total of Accounts receivable, Contract assets and Noncurrent receivables due from SAFRAN amounted to $89.6 million and $93.8 million as of March 31, 2024 and December 31, 2023, respectively.

Other significant programs for AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing commercial programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine. For the year ended December 31, 2023, approximately 39 percent of AEC revenues were related to U.S. government contracts or programs.

The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands)

~~2023~~2024

~~2022~~2023

~~2023~~

~~2022~~

Net revenues

Machine Clothing

~~166~~185,~~588~~217

153,~~389~~222

~~479,027~~

~~459,121~~

Albany Engineered Composites

~~114~~128,~~518~~113

~~107~~115,~~174~~874

~~345,298~~

~~306,980~~

Consolidated revenues

~~281~~313,~~106~~330

~~260~~269,~~563~~096

~~824,325~~

~~766,101~~

Operating income/(loss)

Machine Clothing

5048,~~710~~110

5748,~~247~~964

~~153,400~~

~~161,752~~

Albany Engineered Composites

9,~~374~~188

9,~~958~~418

~~27,460~~

~~20,688~~

Corporate expenses

(2018,~~014~~321)

(1317,~~561~~840)

~~(54,747)~~

~~(39,327)~~

Consolidated Operating income

4038,~~070~~977

5340,~~644~~542

~~126,113~~

~~143,113~~

Reconciling items:

Interest income

(1,~~826~~123)

(~~965~~1,102)

~~(4,770)~~

~~(2,463)~~

Interest expense

54,~~479~~442

4,~~759~~392

~~14,819~~

~~13,799~~

Pension settlement expense

—

49,128

—

49,128

Other (income)/expense, net

(2,982)

(455)

Other (income)/expense, net

(6,918)

(4,910)

(17,891)

Income before income taxes

38,640

37,707

Income before income taxes

36,361

7,640

120,974

100,540

~~Third~~First quarter results include ~~newly acquired~~ Heimbach ~~for the period of ownership~~, which ~~began~~was ~~September~~acquired 1August 31, 2023. Heimbach's ~~impact~~contributed ~~on third quarter results is described in Note 17. Business Combination. This acquisition impacted MC third quarter results by increasing Net revenues by~~ $1537.69 million ~~and~~of ~~reducing~~net ~~Operating~~revenues ~~income~~and by $(02.59) million, ~~which~~of ~~included~~operating ~~depreciation~~loss ~~expense~~for onthe ~~Property,~~three ~~plant,~~months ~~and~~ended ~~equipment,~~March ~~net of $1.1 million~~31, ~~and~~ ~~amortization expense on Intangibles, net of $0~~2024.~~1 million.~~

Corporate expenses include global information system costs of $8.3 million and $6.2 million for the three months ended March 31, 2024 and 2023, respectively.

Revenue Recognition:

Products and services provided under long-term contracts represent a significant portion of revenues in the Albany Engineered Composites segment and we account for these contracts over time, primarily using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs. Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead rates, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. Changes in the estimated profitability of long-term contracts increased operating income by $0.9 million for the third quarter of 2023 and decreased operating income $4.1 million for the first nine months of 2023. Adjustments in the estimated profitability of long-term contracts increased operating income by $2.6 million and $2.0 million for the three and nine months ended September 30, 2022, respectively.

Index

Products and services provided under long-term contracts represent a significant portion of revenues in the Albany Engineered Composites segment and we account for these contracts over time, primarily using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs. Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead rates, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. Changes in the estimated profitability of long-term contracts decreased operating income by $0.9 million during the first three months of 2024, compared to a decrease of $0.7 million in the same period last year.

We disaggregate revenue earned from contracts with customers for each of our business segments and product groups based on the timing of revenue recognition, and groupings used for internal review purposes.

The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended ~~September~~March 3031, ~~2023~~2024:

	Three months ended September 30, 2023
	Three months ended March 31, 2024
(in thousands)	Point in Time RevenueRecognition		Over Time RevenueRecognition		Total
Machine Clothing	$	~~165~~184,~~643~~235	$	~~945~~982	$	~~166~~185,~~588~~217
Albany Engineered Composites:
ASC	—		4649,~~654~~739		4649,~~654~~739
Other AEC	45,~~955~~757		6272,~~909~~617		6778,~~864~~374
Total Albany Engineered Composites	45,~~955~~757		~~109~~122,~~563~~356		~~114~~128,~~518~~113
Total revenues	$	~~170~~189,~~598~~992	$	~~110~~123,~~508~~338	$	~~281~~313,~~106~~330

The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended ~~September~~March 3031, ~~2022~~2023:

	Three months ended September 30, 2022
	Three months ended March 31, 2023
(in thousands)	Point in Time RevenueRecognition		Over Time RevenueRecognition		Total
Machine Clothing	$	152,~~490~~278	$	~~899~~944	$	153,~~389~~222
Albany Engineered Composites:
ASC	—		4144,~~463~~532		4144,~~463~~532
Other AEC	5,~~819~~793		5965,~~892~~549		6571,~~711~~342
Total Albany Engineered Composites	5,~~819~~793		~~101~~110,~~355~~081		~~107~~115,~~174~~874
Total revenues	$	158,~~309~~071	$	~~102~~111,~~254~~025	$	~~260~~269,~~563~~096

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

	Nine months ended September 30, 2023
(in thousands)	Point in Time RevenueRecognition		Over Time RevenueRecognition		Total
Machine Clothing	$	476,194	$	2,833	$	479,027
Albany Engineered Composites:
ASC	—		138,603		138,603
Other AEC	14,259		192,436		206,695
Total Albany Engineered Composites	14,259		331,039		345,298
Total revenues	$	490,453	$	333,872	$	824,325

Index

The following table disaggregates revenue for each product group by timing of revenue recognition for the nine months ended September 30, 2022:

	Nine months ended September 30, 2022
(in thousands)	Point in Time RevenueRecognition		Over Time RevenueRecognition		Total
Machine Clothing	$	456,423	$	2,698	$	459,121
Albany Engineered Composites:
ASC	—		122,836		122,836
Other AEC	14,750		169,394		184,144
Total Albany Engineered Composites	14,750		292,230		306,980
Total revenues	$	471,173	$	294,928	$	766,101

The following table disaggregates MC segment revenue by significant product groupings (paper machine clothing ("PMC") and engineered fabrics); and for PMC, the geographical region to which the paper machine clothing was sold:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands)

~~2023~~2024

~~2022~~2023

~~2023~~

~~2022~~

Americas PMC

8483,~~405~~501

83,~~124~~378

~~261,937~~

~~240,173~~

Eurasia PMC

6476,~~493~~190

4951,~~828~~737

~~164,771~~

~~157,751~~

Engineered Fabrics

1725,~~690~~526

2018,~~437~~107

~~52,319~~

~~61,197~~

Total Machine Clothing Net revenues

~~166~~185,~~588~~217

153,~~389~~222

~~479,027~~

~~459,121~~

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contracts in the MC segment are generally for periods of less than a year and certain contracts in the AEC segment are relatively short duration firm-fixed-price orders. Remaining performance obligations on contracts that had an original duration of greater than one year totaled $~~759~~752 million and $~~600~~821 million as of ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively, and related primarily to firm fixed price contracts in the AEC segment. Of the remaining performance obligations as of ~~September~~March 3031, ~~2023~~2024, we expect to recognize as revenue approximately $38127 million during ~~2023~~2024, $~~146~~168 million during ~~2024~~2025, $~~146~~143 million during ~~2025~~2026, and the remainder thereafter.

Index

3. Pensions and Other Postretirement Benefit Plans

The Company has defined benefit pension plans covering certain U.S. and non-U.S. employees. The Company also provides certain postretirement benefits to retired employees in the U.S. and Canada. The Company accrues the cost of providing these benefits during the active service period of the employees.

The composition of the net periodic benefit cost/ (income) for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, was as follows:

	Pension plans				Other postretirement benefits
(in thousands)	~~2023~~2024		~~2022~~2023		~~2023~~2024		~~2022~~2023
Components of net periodic benefit cost/(income):
Service cost	$	~~986~~497	$	~~1,061~~281	$	4512	$	8615
Interest cost	31,~~447~~532		41,~~235~~063		~~1,405~~354		~~916~~468
Expected return on assets	(31,~~063~~358)		(~~5,099~~971)		—		—
Amortization of prior service cost/(income)	(247)		(28)		(~~3,068~~31)		(31,~~366~~023)
Amortization of net actuarial loss	~~421~~187		~~1,493~~139		~~621~~(9)		~~1,412~~207
Net periodic benefit cost/(credit)	$	~~1,767~~851	$	~~1,688~~504	$	~~(997)~~326	$	(~~952~~333)
Settlement charge	—		49,128		—		—
Net benefit cost/(credit)	$	1,767	$	50,816	$	(997)	$	(952)

The amount of net benefit cost/(credit) is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement. InThere ~~the~~were ~~third~~no ~~quarter~~such ofevents ~~2022, we took actions to settle certain pension plan liabilities for a plan~~ in the ~~U.S.,~~first ~~leading~~three tomonths ~~charges totaling $49.1 million. No similar charges were incurred during the current year. The above reflects the acquisition~~ of ~~Heimbach,~~2024 asor ~~further described in Note 17~~2023. ~~Business Combination.~~

Service cost for defined benefit pension and postretirement plans are reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net periodic benefit cost are included in the line item Other (income)/expense, net in the Consolidated Statements of Income.

4. ~~Other (Income)/Expense, net~~Restructuring

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

Index

The following table summarizes charges reported in the Consolidated Statements of Income under "Restructuring expenses, net":


	Three months ended March 31,
(in thousands)	2024		2023
Machine Clothing	$	21	$	20
Albany Engineered Composites	2,188		—

Total	$	2,209	$	20

The table below presents the year-to-date changes in restructuring liabilities for 2024 and 2023, all of which are related to termination and other costs:


(in thousands)	December 31, 2023		Restructuring charges accrued		Payments		Currency translation /other		March 31, 2024
Total termination and other costs	$	—	$	2,209	$	(221)	$	(1)	$	1,987


(in thousands)	December 31, 2022		Restructuring charges accrued		Payments		Currency translation /other		March 31, 2023
Total termination and other costs	$	—	$	20	$	(20)	$	—	$	—

5. Other (Income)/Expense, net

The components of Other (income)/expense, net are:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands)

~~2023~~2024

~~2022~~2023

~~2023~~

~~2022~~

Currency transaction (gains)/losses

~~511~~(1,292)

~~(6,636)~~60

~~(3,622)~~

~~(17,660)~~

Bank fees and amortization of debt issuance costs

4943

7659

~~140~~

~~252~~

Components of net periodic pension and postretirement cost other than service cost

~~(15)~~668

(~~138~~125)

~~(260)~~

~~(411)~~

Other

(~~489~~2,401)

(~~220~~449)

~~(1,168)~~

~~(72)~~

Total other (income)/expense, net

56(2,982)

(~~6,918~~455)

~~(4,910)~~

~~(17,891)~~

Other (income)/expense, net, included foreign currency related transactions which resulted in ~~losses of $0.5 million and~~ gains of $31.63 million in the first three ~~and nine~~ months ~~ended~~of ~~September 30~~2024, ~~2023, respectively,~~ as compared to ~~gains~~losses of $60.61 million ~~and $17.7 million~~ in the same period last year. ~~During~~The ~~2023,~~stronger ~~the~~ Mexican Peso ~~weakened~~and weaker Euro during the ~~third~~three ~~quarter~~months ended March 31, ~~but~~2024 ~~was~~led ~~overall~~to ~~stronger~~a ~~during~~net ~~the~~gain ~~nine~~on ~~months~~foreign ~~ended~~currency ~~September~~related 30transactions, ~~2023,~~as ~~driving~~compared to the ~~foreign~~same ~~currency~~period ~~gain~~last inyear. ~~the~~Other ~~period. During~~(income)/expense, ~~2022~~net, ~~the~~also ~~Euro~~included ~~remained~~gains ~~weaker~~on ~~for~~changes ~~the~~in ~~three~~fair ~~and~~value ~~nine~~of ~~months~~derivative ~~ended September 30~~instruments, ~~2022,~~gains ~~resulting~~on insales aof ~~more~~fixed ~~significant~~assets, ~~foreign~~and ~~currency~~rental ~~gain during those periods~~income.

6. Income Taxes

The Company's effective income tax rate for the three months ended March 31, 2024 and 2023, is as follows:


	Three months ended March 31,
	2024		2023
Effective income tax rate	29.2	%	28.2	%

Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting. Under this method, loss jurisdictions which cannot recognize a tax benefit with regard to their generated losses are excluded from the annual effective tax rate calculation and their taxes will be recorded discretely in each quarter.

Index

5Our 2024 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of taxation upon foreign operations, and forecasted permanent differences. ~~Income~~Our ~~Taxes~~actual effective tax rates were 29.2% and 28.2% for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024 included a $2.4 million benefit related to the true-up for prior year estimated taxes treated as a discrete tax benefit and an additional increase of $1.2 million in the valuation allowance treated as a discrete tax expense. The rate for the first quarter of 2024 was higher than the first quarter of 2023 mainly due to an unfavorable change in the jurisdictional mix of pre-tax earnings forecasted for 2024.

The ~~following~~Company ~~table~~is ~~presents~~subject ~~components~~to ofaudit ~~income~~in the U.S. and various foreign jurisdictions. Our open tax ~~expense~~years for ~~the~~major ~~three~~jurisdictions generally range from 2013-2024. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and ~~nine~~all open years. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. It is reasonably possible that within the next 12 months, ~~ended~~unrecognized ~~September~~tax benefits related to federal tax matters under audit may decrease by up to $0.8 ~~30,~~million ~~2023~~based ~~and~~on ~~2022:~~current estimates.

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except percentages)	2023		2022		2023		2022
Income tax based on income from operations (1)	$	10,731	$	2,208	$	35,698	$	28,315
Provision for change in estimated tax rate	(119)		674		5		740
Income tax before discrete items	10,612		2,882		35,703		29,055
Discrete tax expense:
Exercise of U.S. stock options	—		(9)		—		(17)
Impact of amended tax returns	—		—		—		(98)
Reconciliation of prior year estimated taxes	(1,833)		(1,185)		(437)		(1,693)
Enacted tax legislation and rate change	—		—		313		—
Provision for/resolution of tax audits and contingencies, net	(602)		24		176		(116)
Impact of long range tax planning	—		—		(443)		—
Withholding tax related to internal restructuring	—		—		3,026		—
US Pension Settlement - Release of Residual Tax Effect	—		(5,217)		—		(5,217)
Impact of non-election of high tax exclusion under GILTI*	1,155		—		1,617		—
Other	(125)		322		(47)		359
Total income tax expense/(benefit)	$	9,207	$	(3,183)	$	39,908	$	22,273
(1) Income tax is calculated at estimated annualized effective tax rate of 29.5% and 28.9% for the three and nine months ended September 30, 2023 and 2022, respectively.* Global Intangible Low-Taxed Income

7. Earnings Per Share

~~Income~~The ~~tax~~amounts ~~expense~~used ~~for the quarter was computed~~ in ~~accordance~~computing ~~with~~earnings ~~ASC~~per ~~740-270,~~share ~~Income~~and ~~Taxes~~the –weighted ~~Interim~~average ~~Reporting.~~number ~~Under~~of ~~this~~shares ~~method,~~of ~~loss~~potentially ~~jurisdictions~~dilutive ~~which~~securities ~~cannot recognize a tax benefit with regard to their generated losses~~ are ~~excluded~~as ~~from the annual effective tax rate calculation and their taxes will be recorded discretely in each quarter.~~follows:

The Company's policy for releasing income tax effects from accumulated other comprehensive income is the specific identification approach, whereas these items are released to income tax expense when the individual items are disposed of, terminated or extinguished.


	Three months ended March 31,
(in thousands, except market price and earnings per share)	2024		2023
Net income attributable to the Company	$	27,291	$	26,889

Weighted average number of shares:
Weighted average number of shares used in calculating basic net income per share	31,209		31,131
Effect of dilutive stock-based compensation plans:

Restricted stock units and multi-year awards	82		86

Weighted average number of shares used in calculating diluted net income per share	31,291		31,217



Net income attributable to the Company per share:
Basic	$	0.87	$	0.86
Diluted	$	0.87	$	0.86

~~The Tax Cuts and Jobs Act lowered the U~~8.S. ~~corporate~~Accumulated tax rate from 35% to 21% as of December 31, 2017, creating residual tax effects as a result of the remeasurement of deferred tax assets and liabilities originally established in other comprehensive income. As a result of the U.S. pension liability settlement (see Note 3, Pensions and Other ~~Postretirement~~Comprehensive ~~Benefit~~Income ~~Plans~~("AOCI"), and consistent with the Company's policy, in the third quarter of 2022, the Company recorded a net tax benefit of $5.2 million for the release of the residual tax effects within other comprehensive income related to the U.S. pension settlement.

The table below presents changes in the components of AOCI for the period from December 31, 2023 to March 31, 2024:


(in thousands)	Translation adjustments		Pension and postretirement liability adjustments		Derivative valuation adjustment		Total Other Comprehensive Income
December 31, 2023	$	(124,901)	$	(17,346)	$	9,079	$	(133,168)
Other comprehensive income/(loss) before reclassifications, net of tax	(12,116)		285		892		(10,939)

Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax	—		—		(3,016)		(3,016)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax	—		97		—		97
Net current period other comprehensive income	(12,116)		382		(2,124)		(13,858)
March 31, 2024	$	(137,017)	$	(16,964)	$	6,955	$	(147,026)

Index

6.The ~~Earnings~~table ~~Per~~below ~~Share~~presents changes in the components of AOCI for the period from December 31, 2022 to March 31, 2023:

The amounts used in computing earnings per share and the weighted average number of shares of potentially dilutive securities are as follows:


(in thousands)	Translation adjustments		Pension and postretirement liability adjustments		Derivative valuation adjustment		Total Other Comprehensive Income
December 31, 2022	$	(146,851)	$	(15,783)	$	17,707	$	(144,927)
Other comprehensive income/(loss) before reclassifications, net of tax	13,881		(441)		(494)		12,946

Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax	—		—		(2,408)		(2,408)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax	—		(475)		—		(475)
Net current period other comprehensive income	13,881		(916)		(2,902)		10,063
March 31, 2023	$	(132,970)	$	(16,699)	$	14,805	$	(134,864)

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except market price and earnings per share)	2023		2022		2023		2022
Net income attributable to the Company	$	27,109	$	10,694	$	80,670	$	77,632
Weighted average number of shares:
Weighted average number of shares used in calculating basic net income per share	31,185		31,111		31,163		31,416
Effect of dilutive stock-based compensation plans:
Restricted stock units and multi-year awards	98		112		93		102
Weighted average number of shares used in calculating diluted net income per share	31,283		31,223		31,256		31,518
Net income attributable to the Company per share:
Basic	$	0.87	$	0.34	$	2.59	$	2.47
Diluted	$	0.87	$	0.34	$	2.58	$	2.46

7. Accumulated Other Comprehensive Income ("AOCI")

The table below presents changes in the components of AOCI for the period from December 31, 2022 to September 30, 2023:

(in thousands)	Translationadjustments		Pension andpostretirementliabilityadjustments		Derivativevaluationadjustment		Total OtherComprehensiveIncome
December 31, 2022	$	(146,851)	$	(15,783)	$	17,707	$	(144,927)
Other comprehensive income/(loss) before reclassifications, net of tax	(4,326)		(183)		3,386		(1,123)
Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax	—		—		(8,136)		(8,136)
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax	—		(1,423)		—		(1,423)
Net current period other comprehensive income	(4,326)		(1,606)		(4,750)		(10,682)
September 30, 2023	$	(151,177)	$	(17,389)	$	12,957	$	(155,609)

Index

The table below presents changes in the components of AOCI for the period from December 31, 2021 to September 30, 2022:

(in thousands)	Translationadjustments		Pension andpostretirementliabilityadjustments		Derivativevaluationadjustment		Total OtherComprehensiveIncome
December 31, 2021	$	(105,880)	$	(38,490)	$	(1,614)	$	(145,984)
Other comprehensive income/(loss) before reclassifications, net of tax	(79,841)		—		17,569		(62,272)
Pension settlement expense, net of tax	—		26,198		—		26,198
Interest (expense)/income related to swaps reclassified to the Consolidated Statements of Income, net of tax	—		—		2,006		2,006
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax	—		(321)		—		(321)
Net current period other comprehensive income	(79,841)		25,877		19,575		(34,389)
September 30, 2022	$	(185,721)	$	(12,613)	$	17,961	$	(180,373)

The components of AOCI that are reclassified to the Consolidated Statements of Income relate to our pension and postretirement plans and interest rate swaps.

The table below presents the expense/(income) amounts reclassified from AOCI, and the line items of the Consolidated Statements of Income that were affected for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023:

	Three months ended September 30,				Nine months ended September 30,
	Three months ended March 31,
(in thousands)	~~2023~~2024		~~2022~~2023		~~2023~~		~~2022~~
Pretax Derivative valuation reclassified from Accumulated Other Comprehensive Income:
Pre-tax Derivative valuation reclassified from Accumulated Other Comprehensive Income:
Other (income)/expense, net related to interest rate swaps included in Income before taxes	$	(34,~~990~~038)	$	(~~106~~3,223)	$	~~(10,891)~~	$	~~2,758~~
Income tax effect	1,~~009~~022		~~(27)~~815		~~2,755~~		~~(752)~~
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income	$	(23,~~981~~016)	$	(~~133~~2,408)	$	~~(8,136)~~	$	~~2,006~~
Pretax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
Pre-tax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
Pension settlement expense	$	—	$	42,657	$	—	$	42,657
Amortization of prior service credit	$	(38)	$	(1,031)
Amortization of prior service credit	(1,031)		(1,123)		(3,092)		(3,368)
Amortization of net actuarial loss	178		346
Amortization of net actuarial loss	349		967		1,042		2,905
Total pre-tax amount reclassified (a)	140		(685)
Total pretax amount reclassified (a)	(682)		42,501		(2,050)		42,194
Income tax effect	(43)		210
Income tax effect	208		(16,411)		627		(16,317)
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income	$	97	$	(475)
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income	$	(474)	$	26,090	$	(1,423)	$	25,877

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

129. Noncontrolling Interests

Effective October 31, 2013, Safran S.A. (Safran) acquired a 10 percent equity interest in Albany Safran Composites, LLC ("ASC").

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

Index

8. Noncontrolling Interests

Effective October 31, 2013, Safran S.A. (Safran) acquired a 10 percent equity interest in a new Albany subsidiary, Albany Safran Composites, LLC ("ASC").

On August 31, 2023, the Company acquired all of the outstanding shares of Heimbach, a privately held manufacturer of paper machine clothing with headquarters in Düren, Germany. In July 2021, Heimbach acquired 85% of Arcari, SRL (“Arcari”). Arcari is a manufacturer of textile and plastic industrial technical products and conveyor belts. On the date of the acquisition, the fair value of the noncontrolling interest in Arcari was $1.6 million. For the month ended September 30, 2023, the net income/(loss) attributable to Arcari’s noncontrolling interest was less than $0.1 million and the noncontrolling interest balance at September 30, 2023 was $1.6 million.

The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiaries:

ASC Noncontrolling Interest	~~Nine~~Three months ended ~~September~~March 3031,
(in thousands, except percentages)	~~2023~~2024			~~2022~~2023
Net income of Albany Safran Composites (ASC)	$	41,~~929~~014		$	72,~~320~~282
Less: Return attributable to the Company's preferred holding	~~974~~308			~~974~~308
Net income of ASC available for common ownership	$	~~3,955~~706		$	61,~~346~~974
Ownership percentage of noncontrolling shareholder	10		%	10		%
Net income attributable to the noncontrolling interest	$	~~396~~71		$	~~635~~197
Noncontrolling interest, beginning of year	$	45,~~494~~423		$	34,~~638~~494
Net income attributable to noncontrolling interest	~~396~~71			~~635~~197
Changes in other comprehensive income attributable to the noncontrolling interest	~~317~~57			~~(91)~~238
ASC Noncontrolling interest, end of interim period	$	5,~~207~~551		$	4,~~182~~929
Arcari Noncontrolling Interest
Arcari Noncontrolling interest, end of interim period	$	525		$	—
Net income of Arcari available for common ownership	$	34		$	—
Total Noncontrolling interest, end of interim period	$	6,076		$	4,929
Ownership percentage of noncontrolling shareholder	15		%	—
Net income attributable to the noncontrolling interest	$	5		$	—
Noncontrolling interest, beginning of year	$	—		$	—
Initial equity related to Noncontrolling interest in Arcari	1,632			—
Net income attributable to noncontrolling interest	5			—
Changes in other comprehensive income attributable to the noncontrolling interest	(50)			—
Arcari Noncontrolling interest, end of interim period	$	1,587		$	—
Total Noncontrolling interest, end of interim period	$	6,794		$	4,182

1310. Accounts Receivable

~~Index~~Accounts receivable, net includes Trade and other accounts receivable and Bank promissory notes, net of Allowance for expected credit losses. In connection with certain revenues in Asia, the Company accepts a bank promissory note as customer payment. The notes may be presented for payment at maturity, which is less than one year. As of March 31, 2024 and December 31, 2023, Accounts receivable consisted of the following:

9. Accounts Receivable


(in thousands)	March 31, 2024		December 31, 2023
Trade and other accounts receivable	$	287,862	$	272,351
Bank promissory notes	22,699		20,690
Allowance for expected credit losses	(5,066)		(5,260)
Accounts receivable, net	$	305,495	$	287,781

~~Accounts~~The ~~receivable,~~Company ~~net~~had ~~includes~~Noncurrent ~~Trade~~receivables ~~and~~in ~~other~~the ~~accounts~~AEC ~~receivable~~segment ~~and~~that ~~Bank~~represent ~~promissory~~revenue ~~notes~~earned, ~~net~~which ofhad ~~Allowance~~extended ~~for~~payment ~~expected credit losses~~terms. In ~~connection with certain revenues in Asia~~2023, the ~~Company accepts a bank promissory note as customer~~ payment. ~~The~~terms ~~notes~~were ~~may~~amended beand ~~presented~~the ~~for~~Noncurrent ~~payment~~receivables atare ~~maturity,~~now ~~which~~included isin ~~less~~Trade ~~than~~and ~~one~~other ~~year~~accounts receivable. As of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, ~~Accounts~~Noncurrent ~~receivable~~receivables consisted of the following:

(in thousands)	~~September~~March 3031,~~2023~~ 2024		December 31,~~2022~~ 2023
Trade and other accounts receivable	$	256,852	$	179,676
Noncurrent receivables	$	—	$	4,414
Bank promissory notes	19,286		23,439
Allowance for expected credit losses	—		(22)
Allowance for expected credit losses	(5,651)		(3,097)
Noncurrent receivables, net	$	—	$	4,392
Accounts receivable, net	$	270,487	$	200,018

~~On August 31, 2023, the Company acquired all of the outstanding shares of Heimbach, which resulted in an increase of $52~~11.~~7 million~~ toContract ~~Accounts~~Assets ~~receivable,~~and ~~based on preliminary fair values at the date of acquisition.~~Liabilities

~~The~~Contract ~~Company~~assets ~~has~~include ~~Noncurrent~~unbilled ~~receivables~~amounts intypically resulting from revenues under contracts when the ~~AEC~~over ~~segment~~time ~~that~~method ~~represent~~of revenue ~~earned~~recognition is utilized, ~~which~~and ~~has~~revenue ~~extended~~recognized ~~payment~~exceeds ~~terms~~the amount billed to the customer. ~~The~~Contract ~~Noncurrent~~assets ~~receivables~~are ~~will~~transferred beto ~~invoiced~~Accounts receivable, net when the entitlement to pay becomes unconditional and the customer ~~over~~ ais ~~10-year period,~~invoiced. ~~which~~Contract ~~began~~liabilities ininclude ~~2020.~~advance Aspayments and billings in excess of ~~September 30,~~revenue ~~2023~~recognized. ~~and~~Contract ~~December 31,~~liabilities ~~2022,~~are ~~Noncurrent~~included ~~receivables~~in ~~consisted~~Accrued ofliabilities in the ~~following:~~Consolidated Balance Sheets.

(in thousands)	September 30,2023		December 31,2022
Noncurrent receivables	$	25,427	$	28,053
Allowance for expected credit losses	(127)		(140)
Noncurrent receivables, net	$	25,300	$	27,913

10. Contract Assets and Liabilities

Contract assets include unbilled amounts typically resulting from revenues under contracts when the cost-to-cost method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to Accounts receivable, net when the entitlement to pay becomes unconditional and the customer is invoiced. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract liabilities are included in Accrued liabilities in the Consolidated Balance Sheets.

Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.

~~As of September 30, 2023 and December 31, 2022, Contract assets and Contract liabilities consisted of the following:~~12

(in thousands)	September 30,2023		December 31,2022
Contract assets	$	166,666	$	149,443
Allowance for expected credit losses	(833)		(748)
Contract assets, net	$	165,833	$	148,695
Contract liabilities	$	3,645	$	15,176

Contract assets, net increased $17.1 million during the nine months ended September 30, 2023. The increase was primarily due to an increase in unbilled revenue related to the satisfaction of performance obligations, in excess of the amounts billed to customers for contracts that were in a contract asset position. There were no impairment losses related to our Contract assets during the nine months ended September 30, 2023 and September 30, 2022.

Contract liabilities decreased $11.5 million during the nine months ended September 30, 2023, primarily due to revenue recognized from satisfied performance obligations exceeding amounts invoiced to customers that were in a

Index

~~contract~~As ~~liability~~of ~~position.~~March 31, ~~Revenue~~2024 ~~recognized~~and ~~for the nine months ended September~~December 3031, 2023, ~~and~~Contract ~~2022~~assets ~~that~~and ~~was included in the~~ Contract ~~liability~~liabilities ~~balance~~consisted ~~at the beginning~~ of the ~~year was $14.4 million and $5.0 million, respectively.~~following:

11. Inventories


(in thousands)	March 31, 2024		December 31, 2023
Contract assets	$	180,122	$	183,189
Allowance for expected credit losses	(899)		(908)
Contract assets, net	$	179,223	$	182,281

Contract liabilities	$	6,034	$	7,127

Contract assets, net decreased $3.1 million during the three months ended March 31, 2024. The decrease was primarily due to a decrease in unbilled revenue primarily related to commercial and defense programs, partially offset by an increase in unbilled revenue on space programs. There were no impairment losses related to our Contract assets during the three months ended March 31, 2024 and March 31, 2023.

Contract liabilities decreased $1.1 million during the three months ended March 31, 2024, primarily due to revenue recognized from satisfied performance obligations exceeding customer advance payments for commercial and defense programs. Revenue recognized for the three months ended March 31, 2024 and 2023 that was included in the Contract liability balance at the beginning of the year was $3.5 million and $6.7 million, respectively.

12. Inventories

Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead. Raw material inventories are valued on an average cost basis. Other inventory cost elements are valued at cost, using the first-in, first-out method. The Company writes down the inventories for estimated obsolescence and to lower of cost or net realizable value based upon assumptions about future demand and market conditions. If actual demand or market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Once established, the original cost of the inventory less the related write-down represents the new cost basis of such inventories.

As of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, Inventories consisted of the following:

(in thousands)	~~September~~March 3031, ~~2023~~2024		December 31, ~~2022~~2023
Raw materials	$	8477,~~835~~391	$	7479,~~631~~611
Work in process	7163,~~446~~764		5067,~~516~~743
Finished goods	24,~~710~~870		1322,~~903~~213
Total inventories	$	~~180~~166,~~991~~025	$	~~139~~169,~~050~~567

On August 31, 2023, the Company acquired all of the outstanding shares of Heimbach, which resulted in an increase of $41.5 million to Inventories, based on preliminary fair values at the date of acquisition.13

12. Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually.

In the second quarter of 2023, management applied the qualitative assessment approach in performing its annual evaluation of goodwill for the Company's Machine Clothing reporting unit and two AEC reporting units and concluded that each reporting unit’s fair value continued to exceed its carrying value. In addition, there were no amounts at risk due to the estimated excess between the fair and carrying values. Accordingly, no impairment charges were recorded.

When a quantitative assessment is performed, determining the fair value of a reporting unit requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others. Goodwill and other long-lived assets are reviewed for impairment whenever events, such as significant changes in the business climate, plant closures, changes in product offerings, or other circumstances indicate that the carrying amount may not be recoverable.

To determine fair value, we utilize two market-based approaches and an income approach. Under the market-based approaches, we utilize information regarding the Company, as well as publicly available industry information, to determine earnings multiples and revenue multiples. Under the income approach, we determine fair value based on the estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn.

On August 31, 2023, the Company acquired Heimbach. The assets acquired include intangible assets of $14.5 million consisting of the Heimbach trade name and developed technology. The preliminary fair value of the Heimbach trade name of $6.0 million is considered an indefinite-lived asset. The preliminary fair value of the developed technology of $8.5 million is being amortized over 9 years. There was no excess purchase price over the fair value and therefore, there was no goodwill reported as part of the acquisition. See Note 17. Business Combination for additional information.

Index

13. ~~Financial~~Goodwill ~~Instruments~~and Other Intangible Assets

The following table sets forth the gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of March 31, 2024 and December 31, 2023:


	March 31, 2024
(in thousands)	Amortization life in years	Gross carrying amount		Accumulated amortization		Net carrying amount

Finite-lived assets:
AEC Trademarks and trade names	6-15	$	208	$	(189)	$	19
AEC Technology	10-15	6,033		(2,824)		3,209
AEC Intellectual property	15	1,250		(360)		890
AEC Customer relationships	8-15	69,290		(44,721)		24,569
Heimbach Developed technology	9	8,789		(572)		8,217
Total Finite-lived intangible assets		$	85,570	$	(48,666)	$	36,904

Indefinite-lived intangible assets:
Heimbach Trade name		$	5,935	$	—	$	5,935
MC Goodwill		65,785		—		65,785
AEC Goodwill		112,919		—		112,919
Total Indefinite-lived intangible assets:		$	184,639	$	—	$	184,639


	December 31, 2023
(in thousands)	Amortization life in years	Gross carrying amount		Accumulated amortization		Net carrying amount

Finite-lived assets:
AEC Trademarks and trade names	6-15	$	208	$	(186)	$	22
AEC Technology	10-15	6,161		(2,735)		3,426
AEC Intellectual property	15	1,250		(339)		911
AEC Customer relationships	8-15	69,360		(43,875)		25,485
Heimbach Developed technology	9	9,042		(310)		8,732
Total Finite-lived assets		$	86,021	$	(47,445)	$	38,576

Indefinite-lived intangible assets:
Heimbach Trade name		$	6,070	$	—	$	6,070
MC Goodwill		66,873		—		66,873
AEC Goodwill		113,308		—		113,308
Total Indefinite-lived intangible assets:		$	186,251	$	—	$	186,251

Index

The changes in intangible assets, net and goodwill from December 31, 2023 to March 31, 2024, were as follows:


(in thousands)	December 31, 2023		Other Changes		Amortization		Currency Translation		March 31, 2024
Finite-lived intangible assets:
AEC Trademarks and trade names	$	22	$	—	$	(3)	$	—	$	19
AEC Technology	3,426		—		(142)		(75)		3,209
AEC Intellectual property	911		—		(21)		—		890
AEC Customer relationships	25,485		—		(870)		(46)		24,569
Heimbach Developed technology	8,732		—		(262)		(253)		8,217
Total Finite-lived intangible assets	$	38,576	$	—	$	(1,298)	$	(374)	$	36,904

Indefinite-lived intangible assets:
Heimbach Trade name	$	6,070	$	—	$	—	$	(135)	$	5,935
MC Goodwill	66,873		—		—		(1,088)		65,785
AEC Goodwill	113,308		—		—		(389)		112,919
Total Indefinite-lived assets:	$	186,251	$	—	$	—	$	(1,612)	$	184,639

14. Financial Instruments

Debt principally consists of a revolving credit agreement and foreign bank debt assumed in the acquisition of Heimbach.

The following table represents the Company's outstanding debt:

(in thousands, except interest rates)	~~September~~March 3031, ~~2023~~2024		December 31, ~~2022~~2023
Borrowings under the Amended Credit Agreement(1)	$	~~461~~429,000	$	~~439~~446,000
Foreign bank debt	2910,~~585~~134		—10,885
Total bank debt	~~490~~439,~~585~~134		~~439~~456,~~000~~885
Less: Current maturities of long-term debt	274,~~246~~445		—4,218
Long-term debt	$	~~463~~434,~~339~~689	$	~~439~~452,~~000~~667
(1) the credit facility matures in August 2028. At the end of the September 30, 2023 and December 31, 2022, the interest rate in effect was 3.60% and 3.16%, respectively, including the effect of interest rate hedging transactions, as described below.
(1) the credit facility matures in August 2028. At the end of March 31, 2024 and December 31, 2023, the interest rate in effect was 3.34% and 3.49%, respectively, including the effect of interest rate hedging transactions, as described below.

Amended Credit Agreement

On August 16, 2023, we entered into a $800 million unsecured committed Five-Year Revolving Credit Facility Agreement (the “Amended Credit Agreement”),. ~~which~~The ~~amended~~applicable ~~and~~interest ~~restated~~rate ~~the~~for ~~prior~~borrowings ~~$700 million~~under ~~committed Four-Year Revolving Credit Facility Agreement, entered into on October 27, 2020 (~~the ~~“Prior Agreement”). The~~ Amended Credit Agreement ~~contains~~is ~~customary~~based ~~terms,~~on asTerm ~~well~~SOFR asplus ~~affirmative~~a ~~covenants~~spread, ~~negative~~which ~~covenants~~is ~~and~~based ~~events~~on ofour ~~default~~leverage ~~that~~ratio ~~are~~(as ~~substantially~~defined ~~comparable to those~~ in the ~~Prior~~Amended Credit Agreement.) ~~The~~at ~~Borrowings~~the ~~are~~time ~~guaranteed by certain~~ of ~~the~~a ~~Company's~~borrowing ~~subsidiaries, including all significant U.S. subsidiaries (subject to certain exceptions),~~ as ~~were borrowings under the Prior Agreement.~~follows:

On June 23, 2023, we entered into the first Amendment to the Prior Agreement to replace the LIBOR-based reference interest rate option with a reference interest rate option based on the Term Secured Overnight Financing Rate ("Term SOFR") plus an applicable credit spread adjustment (subject to a minimum floor of 0.00%). The Amendment did not make any other material changes to the terms and conditions of the Prior Agreement, including the representations and warranties, events of default, affirmative and negative covenants. These amendments are also reflected in the Amended Credit Agreement.

The applicable interest rate for borrowings under the Amended Credit Agreement is based on Term SOFR plus a spread, which is based on our leverage ratio (as defined in the Amended Credit Agreement) at the time of a borrowing as follows:


Leverage Ratio	Commitment Fee	ABR Spread	Term Benchmark/ Daily Simple SOFR Spread
<1.00:1.00	0.275%	0.500%	1.500%
≥ 1.00:1.00 and < 2.00:1.00	0.300%	0.625%	1.625%
≥ 2.00:1.00 and < 3.00:1.00	0.325%	0.750%	1.750%
≥ 3.00:1.00	0.350%	1.000%	2.000%

As of ~~September~~March 3031, ~~2023~~2024, the applicable interest rate for borrowings under the Amended Credit Agreement was based on one-month term SOFR plus the spread, which was 1.625%.

As of ~~September~~March 3031, ~~2023~~2024, there was $~~461~~429 million of borrowings outstanding under the Amended Credit Agreement. Asand ~~of September 30, 2023,~~ we had borrowings available of $~~339~~371 million, based on our maximum leverage ratio and our Consolidated EBITDA (as defined in the Amended Credit Agreement).

The Amended Credit Agreement contains customary terms including affirmative covenants, negative covenants and events of default. Under the Amended Credit Agreement, we are required to maintain a leverage ratio (as defined in the Credit Agreement) of not greater than 3.75 to 1.00, or 4.25 to 1.00 after a significant acquisition. We are also required to maintain a minimum interest coverage ratio (as defined in the Credit Agreement) of greater than 3.00 to 1.00.15

As of September 30, 2023, our leverage ratio was 1.48 to 1.00 (as defined in the Amended Credit Agreement) and our interest coverage ratio was 13.95 to 1.00. If our leverage ratio exceeds 3.50 to 1.00, then we are restricted in

Index

~~paying~~The ~~dividends~~Amended toCredit aAgreement ~~maximum~~contains ~~amount~~customary ofterms ~~$40 million~~including inaffirmative acovenants, ~~calendar~~negative ~~year.~~covenants Asand events of ~~September~~default. ~~30,~~Under ~~2023~~the Amended Credit Agreement, we ~~were~~are required to maintain a leverage ratio (as defined in ~~compliance~~the ~~with~~Credit ~~all~~Agreement) ~~applicable~~of ~~covenants~~not greater than 3.75 Weto ~~anticipate~~1.00, ~~continued~~or ~~compliance~~4.25 into ~~each~~1.00 ofafter ~~the~~a ~~next~~significant ~~four~~acquisition. ~~quarters~~We ~~while~~are ~~continuing~~also required to ~~monitor~~maintain ~~future~~a ~~compliance~~minimum ~~based~~interest oncoverage ~~current~~ratio ~~and~~(as ~~future~~defined ~~economic~~in ~~conditions~~the Credit Agreement) of greater than 3.00 to 1.00.

~~The~~As ~~borrowings~~of ~~are~~March 31, ~~guaranteed~~2024, byour ~~certain~~leverage ofratio ~~the~~was ~~Company’s~~1.17 ~~subsidiaries~~to 1.00 (as defined in the Amended Credit Agreement) and our interest coverage ratio was 14.38 ~~Our~~to ~~ability~~1.00. If our leverage ratio exceeds 3.50 to ~~borrow~~1.00, ~~additional~~then ~~amounts~~we ~~under~~are ~~the~~restricted ~~Amended~~in ~~Credit~~paying ~~Agreement~~dividends isto ~~conditional~~a ~~upon~~maximum ~~the~~amount ~~absence~~of $40 million in a calendar year. As of ~~any~~March 31, ~~defaults~~2024, aswe ~~well~~were asin ~~the~~compliance ~~absence~~with ofall ~~any~~applicable ~~material~~covenants. ~~adverse~~We ~~change~~anticipate ~~(as~~continued ~~defined~~compliance in each of the ~~Amended~~next ~~Credit~~four ~~Agreement)~~quarters while continuing to monitor future compliance based on current and future economic conditions.

OnThe ~~June~~borrowings ~~14,~~are ~~2021,~~guaranteed weby ~~entered~~certain ~~into interest rate swap agreements for the period October 17, 2022 through October 27, 2024. These transactions had the effect~~ of ~~fixing~~ the ~~LIBOR~~Company’s ~~portion of the effective interest rate (before addition of the spread) on $350 million of indebtedness~~subsidiaries, ~~drawn~~including ~~under~~all ~~the~~significant ~~Prior Agreement at the rate of 0~~U.~~838% during the period~~S. ~~Under~~subsidiaries the terms of these transactions, we paid the fixed rate of 0.838% and the counterparties paid a floating rate based on the one-month LIBOR rate at each monthly calculation date. On June 29, 2023, the Company amended each Swap agreement, in accordance with the practical expedients included in Accounting Standards Codification (~~“ASC”)~~subject ~~848, Reference Rate Reform,~~ to ~~replace~~certain ~~the LIBOR Benchmark with a Term SOFR Benchmark. As a result of the amendments~~exceptions), ~~we will pay a fixed blended rate of 0.7683% (plus a credit spread adjustment~~ as defined in the ~~Swap~~Amended ~~Agreements)~~Credit ~~through~~Agreement. ~~October~~Our ~~27,~~ability ~~2024~~to onborrow ~~$350 million~~additional ofamounts ~~borrowings~~ under the Amended Credit Agreement ~~and~~is ~~the~~conditional ~~counterparties~~upon ~~will pay a floating rate based on~~ the ~~one-month~~absence ~~term~~of ~~SOFR~~any ~~at each monthly calculation date~~defaults, ~~which~~as onwell ~~September~~as ~~18,~~the ~~2023~~absence ~~was 5.33%. The effective date~~ of ~~the~~any ~~amended~~material ~~Swap~~adverse ~~agreements~~change ~~was~~(as ~~July~~defined ~~17, 2023. As of September 18, 2023, the all-~~in~~-rate~~ on the ~~$350M~~Amended ofCredit ~~debt was 2~~Agreement).~~51%.~~

OnInterest ~~October~~Rate 17, 2022, our interest rate swap agreements that were in effect from December 18, 2017 terminated. These transactions had the effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on $350 million of indebtedness drawn under the Credit Agreement at the rate of 2.11% during the period. Under the terms of those transactions, we paid the fixed rate of 2.11% and the counterparties paid a floating rate based on the one-month LIBOR rate at each monthly calculation date. The all-in-rate on the $350 million of debt was 3.735% at the time the swap agreements terminated.Swaps

~~The~~In 2021, we entered into interest rate ~~swaps~~swap ~~are~~agreements ~~accounted~~ for asthe aperiod ~~hedge~~ of ~~future~~October ~~cash~~17, ~~flows~~2022 through October 27, as2024. ~~further~~These ~~described~~transactions inhad ~~Note~~the ~~14.~~effect ~~Fair-Value~~of ~~Measurements.~~fixing Nothe ~~cash~~LIBOR ~~collateral~~portion ~~was~~of ~~received~~the oreffective ~~pledged~~interest inrate ~~relation~~(before toaddition of the spread) on $350 million of indebtedness. We amended the swap agreements on June 29, 2023 replacing the LIBOR (in preparation for the cessation of LIBOR) with SOFR and adjusting the spread.

~~Indebtedness~~ ~~under~~We pay a fixed blended rate of 0.8828% through October 27, 2024 on $350 million and the ~~Amended~~counterparties ~~Credit~~pay ~~Agreement~~a isfloating ~~ranked~~rate ~~equally~~based inon ~~right~~the one-month term SOFR at each monthly calculation date, which on March 18, 2024 was 5.33%. As of ~~payment~~March to31, 2024, the all-in ~~unsecured~~rate ~~senior~~on the $350M of debt was 2.51%. Upon the expiration of the interest rate swap on October 27, 2024, our interest cost will increase significantly. Beginning in October 2024, our interest cost will be calculated using a floating rate based on the one-month term SOFR.

~~Assumed~~The ~~Foreign~~interest ~~Bank~~rate ~~Debt~~swaps are accounted for as a hedge of future cash flows, as further described in Note 15, Fair-Value Measurements. No cash collateral was received or pledged in relation to the swap agreements.

OnForeign ~~August~~Bank 31, 2023, the Company acquired Heimbach. The Company assumed Heimbach’s bank debt in the amount of $32.7 million. The bank debt is held by several European financial institutions, with fixed interest rates ranging from 0.9% to 2.93% and maturity dates ranging from September 25, 2023 to June 30, 2031. Certain bank agreements allowed for the repayment of the debt upon demand by certain financial institutions in the event of a change in control. Some or all of the assumed bank debt could become due upon notification by any of the financial institutions before the maturity date of the bank agreements. At September 30, 2023, the foreign debt assumed was $29.6 million, of which $27.2 million was classified as Current maturities on long-term debt.Debt

14On August 31, 2023, the Company acquired Heimbach. ~~Fair~~The Company assumed Heimbach’s bank debt in the amount of $32.7 million. The bank debt is held by several European financial institutions, with maturity dates ranging from June 30, 2024 to June 30, 2031. At March 31, 2024 and December 31, 2023, the foreign debt was $10.1 million and $10.9 million, respectively, of which $4.4 million and $4.2 million, respectively, was classified as Current maturities on long-~~Value~~term ~~Measurements~~debt.

15. Fair-Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

We had no Level 3 financial assets or liabilities at ~~September~~March 3031, ~~2023~~2024 or at December 31, ~~2022~~2023, other than certain pension assets as indicated in our December 31, 2023 Annual Report on Form 10-K.

1716

Index

The following table presents the fair-value hierarchy for our Level 1 and Level 2 financial and non-financial assets and liabilities, which are measured at fair value on a recurring basis:

September 30, 2023

December 31, 2022

March 31, 2024

December 31, 2023

Quotedprices inactivemarkets

Significantotherobservableinputs

Quotedprices inactivemarkets

Significantotherobservableinputs

(in thousands)

(Level 1)

(Level 2)

(Level 1)

(Level 2)

Fair Value

Assets:

Cash equivalents

19,~~596~~892

—

627,~~533~~157

—

Foreign currency option contracts

—

1,~~465~~533

—

1,~~788~~725

Foreign currency forward contracts

—

269

—

199

Other Assets:

Common stock of unaffiliated foreign public company (a)

~~623~~759

—

~~602~~682

—

Interest rate swaps

—

179,~~314~~404

—

2312,~~605~~214

Liabilities

Foreign currency forward contracts

—

(~~267~~160)

—

(a)Original cost basis $0.5 million.

Cash equivalents include short-term securities that are considered to be highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities.

The interest rate swaps are accounted for as hedges of future cash flows. The fair value of our interest rate swaps ~~are~~is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, and is included in Other assets and/or Other noncurrent liabilities in the Consolidated Balance Sheets. Amounts determined to be due within one year are reclassified to Other current assets and/or Accrued liabilities in the Consolidated Balance Sheets. Unrealized gains and losses on the interest rate swaps flow through the caption Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets. On June 29, 2023, the Company amended each Swap agreement, in accordance with the practical expedients included in ASC 848, Reference Rate Reform, to replace the LIBOR Benchmark with a Term SOFR Benchmark (See Note 13. Financial Instruments for additional information). As of September 30, 2023, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk. Amounts accumulated in Other comprehensive income are reclassified as interest expense/(income), net when the related interest payments (that is, the hedged forecasted transactions), affect earnings. Interest expense/(income) related to payments under the active swap agreements totaled $(104.90) million for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, and $2(3.82) million for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023.

We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results. Foreign currency instruments are entered into periodically, and consist of foreign currency option contracts and forward contracts that are valued using quoted prices in active markets obtained from independent pricing sources. These instruments are measured using market foreign exchange prices and are recorded in the Consolidated Balance Sheets as Other current assets and Accounts payable, as applicable. Changes in fair value of these instruments are recorded as gains or losses within Other (income)/expense, net.

When exercised, the foreign currency instruments are net-settled with the same financial institution that bought or sold them. For all positions, whether options or forward contracts, there is a risk from the possible inability of the financial institution to meet the terms of the contracts and the risk of unfavorable changes in interest and currency rates, which may reduce the value of the instruments. We seek to mitigate risk by evaluating the creditworthiness of counterparties and by monitoring the currency exchange and interest rate markets while reviewing the hedging risks and contracts to ensure compliance with our internal guidelines and policies.

Index

(Gains)/losses related to changes in fair value of derivative instruments that were recognized in Other (income)/expense, net in the Consolidated Statements of Income were as follows:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands)

~~2023~~2024

~~2022~~2023

~~2023~~

~~2022~~

Derivatives not designated as hedging instruments:

Foreign currency options (gains)/losses

~~704~~(118)

~~(28)~~16

~~581~~

~~(409)~~

~~15. Commitments and Contingencies~~17

Index

16. Commitments and Contingencies

Asbestos Litigation

Albany International Corp. is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills. We were defending 3,~~604~~613 claims as of ~~September~~March 3031, ~~2023~~2024.

The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented:

(in thousands, except number of claims)	OpeningNumber ofClaims	ClaimsDismissed,Settled, orResolved	New Claims	ClosingNumber ofClaims	Amounts Paid toSettle orResolve
As of December 31, 2022	3,609	43	32	3,598	$	125
For the period ended December 31, 2023	3,598	19	27	3,606	$	74
As of September 30, 2023	3,598	11	17	3,604	$	74
For the period ended March 31, 2024	3,606	4	11	3,613	$	9

We anticipate that additional claims will be filed against the Company and related companies in the future but are unable to predict the number and timing of such future claims. Due to the fact that information sufficient to meaningfully estimate a range of possible loss of a particular claim is typically not available until late in the discovery process, we do not believe a meaningful estimate can be made regarding the range of possible loss with respect to pending or future claims and therefore are unable to estimate a range of reasonably possible loss in excess of amounts already accrued for pending or future claims.

While we believe we have meritorious defenses to these claims, we have settled certain claims for amounts we consider reasonable given the facts and circumstances of each case. Our insurance carrier has defended each case and funded settlements under a standard reservation of rights. As of ~~September~~March 3031, ~~2023~~2024, we had resolved, by means of settlement or dismissal, 38,~~035~~045 claims at a total cost of $10.7 million. Of this amount, almost 100% was paid by our insurance carrier, who has confirmed that we have approximately $140 million of remaining coverage under primary and excess policies that should be available with respect to current and future asbestos claims.

The Company’s subsidiary, Brandon Drying Fabrics, Inc. (“Brandon”), is also a separate defendant in many of the asbestos cases in which Albany is named as a defendant, despite never having manufactured any fabrics containing asbestos. While Brandon was defending against 7,~~690~~676 claims as of ~~September~~March 3031, ~~2023~~2024, only twelve claims have been filed against Brandon since January 1, 2012, and only $15,000 in settlement costs have been incurred since 2001. Brandon was acquired by the Company in 1999 and has its own insurance policies covering periods prior to 1999. Since 2004, Brandon’s insurance carriers have covered 100% of indemnification and defense costs, subject to policy limits and a standard reservation of rights.

In some of these asbestos cases, the Company is named both as a direct defendant and as the “successor in interest” to Mount Vernon Mills (“Mount Vernon”). We acquired certain assets from Mount Vernon in 1993. Certain plaintiffs allege injury caused by asbestos-containing products alleged to have been sold by Mount Vernon many years prior to this acquisition. Mount Vernon is contractually obligated to indemnify the Company against any liability arising out of such products. We deny any liability for products sold by Mount Vernon prior to the acquisition of the Mount Vernon assets. Pursuant to its contractual indemnification obligations, Mount Vernon has assumed the defense of these claims. On this basis, we have successfully moved for dismissal in a number of actions.

We currently do not anticipate, based on currently available information, that the ultimate resolution of the aforementioned proceedings will have a material adverse effect on the financial position, results of operations, or cash flows of the Company. Although we cannot predict the number and timing of future claims, based on the foregoing factors, the trends in claims filed against us, and available insurance, we also do not currently anticipate that potential future claims will have a material adverse effect on our financial position, results of operations, or cash flows.

17. Changes in Shareholders’ Equity

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2023 to March 31, 2024:


	Class A Common Stock			Additional paid-in capital	Retained earnings		Accumulated items of other comprehensive income		Class A Treasury Stock			Noncontrolling Interest		Total Shareholders' Equity
(in thousands)	Shares	Amount									Shares					Amount
December 31, 2023	40,856	$	41		$	448,218	$	1,010,942	$	(133,168)	9,662	$	(364,665)	$	5,952	$	967,320
Net income	—	—			—		27,291		—		—	—		78		27,369
Compensation and benefits paid or payable in shares	42	—			810		—		—		—	—		—		810




Dividends declared on Class A Common Stock, $0.26 per share	—	—			—		(8,122)		—		—	—		—		(8,122)

Cumulative translation adjustments	—	—			—		—		(12,116)		—	—		46		(12,070)
Pension and postretirement liability adjustments	—	—			—		—		382		—	—		—		382
Derivative valuation adjustment	—	—			—		—		(2,124)		—	—		—		(2,124)
March 31, 2024	40,898	$	41		$	449,028	$	1,030,111	$	(147,026)	9,662	$	(364,665)	$	6,076	$	973,565

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2022 to March 31, 2023:


	Class A Common Stock			Additional paid-in capital	Retained earnings		Accumulated items of other comprehensive income		Class A Treasury Stock			Noncontrolling Interest		Total Shareholders' Equity
(in thousands)	Shares	Amount									Shares					Amount
December 31, 2022	40,785	$	41		$	441,540	$	931,318	$	(144,927)	9,675	$	(364,923)	$	4,494	$	867,543
Net income	—	—			—		26,889		—		—	—		197		27,086
Compensation and benefits paid or payable in shares	58	—			378		—		—		—	—		—		378




Dividends declared on Class A Common Stock, $0.25 per share	—	—			—		(7,792)		—		—	—		—		(7,792)

Cumulative translation adjustments	—	—			—		—		13,881		—	—		238		14,119
Pension and postretirement liability adjustments	—	—			—		—		(916)		—	—		—		(916)
Derivative valuation adjustment	—	—			—		—		(2,902)		—	—		—		(2,902)
March 31, 2023	40,842	$	41		$	441,917	$	950,415	$	(134,864)	9,675	$	(364,923)	$	4,929	$	897,515

18. Business Combination

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

19. Subsequent Events

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

flows of the Company. Although we cannot predict the number and timing of future claims, based on the foregoing factors, the trends in claims filed against us, and available insurance, we also do not currently anticipate that potential future claims will have a material adverse effect on our financial position, results of operations, or cash flows.

16. Changes in Shareholders’ Equity

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2022 to September 30, 2023:

	Class ACommon Stock			Additional paid-in capital	Retained earnings		Accumulated items of other comprehensive income		Class ATreasury Stock			Noncontrolling Interest		Total Shareholders' Equity
(in thousands)	Shares	Amount									Shares					Amount
December 31, 2022	40,785	$	41		$	441,540	$	931,318	$	(144,927)	9,675	$	(364,923)	$	4,494	$	867,543
Net income	—	—			—		26,889		—		—	—		197		27,086
Compensation and benefits paid or payable in shares	58	—			378		—		—		—	—		—		378
Dividends declared on Class A Common Stock, $0.25 per share	—	—			—		(7,792)		—		—	—		—		(7,792)
Cumulative translation adjustments	—	—			—		—		13,881		—	—		238		14,119
Pension and postretirement liability adjustments	—	—			—		—		(916)		—	—		—		(916)
Derivative valuation adjustment	—	—			—		—		(2,902)		—	—		—		(2,902)
March 31, 2023	40,842	$	41		$	441,917	$	950,415	$	(134,864)	9,675	$	(364,923)	$	4,929	$	897,515
Net income	—	—			—		26,672		—		—	—		154		26,826
Compensation and benefits paid or payable in shares	—	—			811		—		—		—	—		—		811
Shares issued to Directors'	—	—			828		—		—		(12)	258		—		1,086
Dividends declared on Class A Common Stock, $0.25 per share	—	—			—		(7,795)		—		—	—		—		(7,795)
Cumulative translation adjustments	—	—			—		—		(2,568)		—	—		179		(2,389)
Pension and postretirement liability adjustments	—	—			—		—		(724)		—	—		—		(724)
Derivative valuation adjustment	—	—			—		—		389		—	—		—		389
June 30, 2023	40,842	$	41		$	443,556	$	969,292	$	(137,767)	9,663	$	(364,665)	$	5,262	$	915,719
Net income	—	—			—		27,109		—		—	—		45		27,154
Compensation and benefits paid or payable in shares	15	—			2,914		—		—		(1)	—		—		2,914
Dividends declared on Class A Common Stock, $0.25 per share	—	—			—		(7,799)		—		—	—		—		(7,799)
Initial equity related to Noncontrolling interest in Arcari	—	—			—		—		—		—	—		1,632		1,632
Cumulative translation adjustments	—	—			—		—		(15,639)		—	—		(145)		(15,784)
Pension and postretirement liability adjustments	—	—			—		—		34		—	—		—		34
Derivative valuation adjustment	—	—			—		—		(2,237)		—	—		—		(2,237)
September 30, 2023	40,857	$	41		$	446,470	$	988,602	$	(155,609)	9,662	$	(364,665)	$	6,794	$	921,633

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2021 to September 30, 2022:

	Class ACommon Stock			Additional paid-in capital	Retained earnings		Accumulated items of other comprehensive income		Class ATreasury Stock			Noncontrolling Interest		Total Shareholders' Equity
(in thousands)	Shares	Amount									Shares					Amount
December 31, 2021	40,760	$	41		$	436,996	$	863,057	$	(145,984)	8,665	$	(280,143)	$	3,638	$	877,605
Net income	—	—			—		27,737		—		—	—		338		28,075
Compensation and benefits paid or payable in shares	21	—			745		—		—		—	—		—		745
Options exercised	—	—			7		—		—		—	—		—		7
Purchase of Treasury shares (a)	—	—			—		—		—		515	(43,937)		—		(43,937)
Dividends declared on Class A Common Stock, $0.21 per share	—	—			—		(6,661)		—		—	—		—		(6,661)
Cumulative translation adjustments	—	—			—		—		(1,730)		—	—		56		(1,674)
Pension and postretirement liability adjustments	—	—			—		—		74		—	—		—		74
Derivative valuation adjustment	—	—			—		—		10,018		—	—		—		10,018
March 31, 2022	40,781	$	41		$	437,748	$	884,133	$	(137,622)	9,180	$	(324,080)	$	4,032	$	864,252
Net income	—	—			—		39,201		—		—	—		168		39,369
Compensation and benefits paid or payable in shares	4	—			902		—		—		—	—		—		902
Shares issued to Directors'	—	—			800		—		—		(13)	285		—		1,085
Purchase of Treasury shares (a)	—	—			—		—		—		508	(41,128)		—		(41,128)
Dividends declared on Class A Common Stock, $0.21 per share	—	—			—		(6,529)		—		—	—		—		(6,529)
Cumulative translation adjustments	—	—			—		—		(39,661)		—	—		(91)		(39,752)
Pension and postretirement liability adjustments	—	—			—		—		234		—	—		—		234
Derivative valuation adjustment	—	—			—		—		3,349		—	—		—		3,349
June 30, 2022	40,785	$	41		$	439,450	$	916,805	$	(173,700)	9,675	$	(364,923)	$	4,109	$	821,782
Net income	—	—			—		10,694		—		—	—		129		10,823
Compensation and benefits paid or payable in shares	—	—			835		—		—		—	—		—		835
Options exercised	—	—			10		—		—		—	—		—		10
Dividends declared on Class A Common Stock, $0.21 per share	—	—			—		(6,533)		—		—	—		—		(6,533)
Cumulative translation adjustments	—	—			—		—		(38,450)		—	—		(56)		(38,506)
Pension and postretirement liability adjustments	—	—			—		—		(629)		—	—		—		(629)
Settlement of certain pension liabilities	—	—			—		—		26,198		—	—		—		26,198
Derivative valuation adjustment	—	—			—		—		6,208		—	—		—		6,208
September 30, 2022	40,785	$	41		$	440,295	$	920,966	$	(180,373)	9,675	$	(364,923)	$	4,182	$	820,188

(a)In October 2021, the Company's Board of Directors authorized the Company to repurchase shares of up to $200 million through open market purchases, privately negotiated transactions or otherwise, and to determine the prices, times and amounts. During the nine months ended September 30, 2022, the Company repurchased 1,022,717 shares totaling $85.1 million. The Company did not repurchase shares during the nine months ended September 30, 2023.

17. Business Combination

On August 31, 2023, the Company acquired all of the outstanding shares of Heimbach, a privately-held manufacturer of paper machine clothing with headquarters in Düren, Germany. Heimbach is a global supplier of paper machine clothing for the production of all grades of paper and cardboard on all machine types as well as high-tech textile products used in a variety of sectors, such as the food processing, chemicals, construction materials and automotive industries. Heimbach is now a division under the MC segment. The Paper Machine Clothing ("PMC") industry has attractive dynamics and the acquisition of Heimbach provides increased scale and complementary technology that further drives the Machine Clothing segment's differentiated manufacturing, sales and service network.

The acquisition was funded using cash on-hand. The following table summarizes the total consideration paid, excluding debt assumed, for the acquisition of Heimbach:

(in thousands)	August 31, 2023
Cash consideration	$	145,816
Indemnity release	(1,750)
Total consideration paid	$	144,066

The acquisition was accounted for under the acquisition method in accordance with ASC 805, Business Combinations.

The assets acquired and the liabilities assumed were recorded based on their preliminary fair values at the date of acquisition as follows:

(in thousands)	August 31, 2023
Assets acquired:
Cash and cash equivalents	$	12,347
Accounts receivables	52,704
Inventories	41,538
Property, plant and equipment	126,057
Other intangible assets	14,464
Other current assets	7,452
Other noncurrent assets	6,694
Total assets acquired	$	261,256
Liabilities assumed:
Assumed debt	$	32,700
Accounts payable	8,243
Accrued liabilities	27,257
Other noncurrent liabilities	36,313
Income taxes payable	288
Deferred tax liabilities	10,757
Total liabilities assumed	$	115,558
Net assets acquired	$	145,698
Noncontrolling interest	$	(1,632)
Total consideration	$	144,066

For the three and nine months ended September 30, 2023, the Company incurred acquisition related costs of $1.6 million and $2 million, respectively. These costs are included in Selling, general and administrative expenses in the Consolidated statements of income.

The preliminary fair values of the property, plant and equipment of $126.1 million were determined using the cost-approach and a market-approach because the selected approaches were appropriate for the valuation analysis and

sufficient information was available for their use. The Company recorded $1.1 million of depreciation expense for the three and nine months ended September 30, 2023.

The preliminary fair values of the identifiable intangible assets totaling $14.5 million, consisting of the Heimbach trade name and developed technology, was determined using the income approach, specifically, a relief from royalty method. The fair value of the trade name was $6.0 million and is considered an indefinite-lived asset because of Heimbach's rich brand heritage and customer service to the paper machine clothing industry dating back to 1811. The fair value of the developed technology was $8.5 million and includes intellectual property-related technologies as well as know-how developed by Heimbach; and is being amortized over its economic period of benefit, which is 9 years. This amortization period represents the estimated useful life of the asset. The Company recorded $0.1 million of intangible amortization for the three and nine months ended September 30, 2023.

The preliminary fair values of the assets acquired includes $3.2 million and $0.1 million of operating and finance lease right-of-use assets, respectively. The preliminary fair values of the liabilities assumed includes $3.2 million and $0.1 million of operating and finance lease liabilities, respectively, of which, $1.1 million and $0.1 million of operating and finance lease liabilities, respectively, are current liabilities.

Debt assumed included $32.7 million aggregate outstanding amount of bank debt with several European financial institutions with fixed interest rates ranging from 0.9% to 2.93% and maturity dates ranging from September 25, 2023 to June 30, 2031. Bank agreements allowed for the repayment of the debt upon demand by certain financial institutions in the event of a change in control. Some of the assumed bank debt may become due upon notification by

those financial institutions before the maturity date of the bank agreements. At September 30, 2023, the foreign debt assumed was $29.6 million, of which $27.2 million was classified as Current maturities on long-term debt.

The preliminary fair value of the liabilities assumed include $35.3 million of pension liabilities for various defined benefit plans.

Heimbach's results of operations have been included in the Company's financial statements for the period subsequent to the completion of the acquisition on August 31, 2023. Heimbach contributed $15.6 million of revenue and a $(0.5) million operating loss for the period ended September 30, 2023.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of the Company. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes.

Forward-looking ~~statements~~Statements

This quarterly report and the documents incorporated or deemed to be incorporated by reference in this quarterly report contain statements concerning our future results and performance and other matters that are “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” "forecast," ”look for,” “will,” “should,” “guidance,” “guide” and similar expressions identify forward-looking statements, which generally are not historical in nature. Because forward-looking statements are subject to certain risks and uncertainties, (including, without limitation, those set forth in the Company’s most recent Annual Report on Form 10-K or prior Quarterly Reports on Form 10-Q) actual results may differ materially from those expressed or implied by such forward-looking statements.

There are a number of risks, uncertainties, and other important factors that could cause actual results to differ materially from the forward-looking statements, including, but not limited to:

•Conditions in the industries in which our Machine Clothing and Albany Engineered Composites segments compete, along with the general risks associated with macroeconomic conditions, including higher interest rates, inflationary pressures, or the effects of another ~~COVID-19 outbreak~~pandemic, ~~or other similar outbreaks,~~ for an extended period of time;

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

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

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

•In the Albany Engineered Composites segment, longer-than-expected timeframe for the aerospace industry to utilize existing inventories, unanticipated reductions in demand, ~~including reductions driven by supply chain shortages on other aircraft components,~~ delays, technical difficulties, and cancellations in aerospace programs that are expected to generate revenue and drive long-term growth;

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

•~~Failure~~Changes toin ~~adequately~~geopolitical ~~integrate~~conditions ~~Heimbach~~impacting ~~into~~countries ~~our~~where ~~business systems and processes within~~ the ~~expected~~Company ~~timeframe~~does or, ~~failure~~intends to ordo ~~delayed realization of anticipated benefits of the acquisition could adversely impact the Company’s~~ business~~, financial condition and results of operations, as further described in Item 1A. Risk Factors~~; ~~and~~

•Failure to achieve or maintain anticipated profitable growth;

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

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

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

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

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

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

•Adverse impacts from fluctuations in foreign currency exchange rates;

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

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

•Costly and disruptive legal disputes and settlements;

•Future levels of indebtedness and capital expenditures;

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

•Cybersecurity incidents or significant computer system compromises or data breaches;

•Significant problems with information systems or networks;

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

•Other risks and uncertainties detailed in this report and other periodic reports.

Further information concerning important factors that could cause actual events or results to be materially different from the forward-looking statements can be found in “Business Environment Overview and Trends” sections of this quarterly report, as well as in Item 1A-“Risk Factors” section of our most recent Annual Report on Form 10-K. Although we believe the expectations reflected in our other forward-looking statements are based on reasonable assumptions, it is not possible to foresee or identify all factors that could have a material and negative impact on our future performance. The forward-looking statements included or incorporated by reference in this report are made on the basis of our assumptions and analyses, as of the time the statements are made, in light of our experience and perception of historical conditions, expected future developments, and other factors believed to be appropriate under the circumstances.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained or incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Business Environment Overview and Trends

~~Our~~Please ~~reportable~~refer ~~segments,~~to ~~Machine~~the ~~Clothing~~Business ~~(“MC”)~~Environment Overview and ~~Albany~~Trends ~~Engineered~~in ~~Composites~~the ~~(“AEC”),~~Management's ~~draw~~Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the ~~same~~year ~~advanced~~ended ~~textiles~~December 31, ~~and~~2023. ~~materials~~The ~~processing~~Annual ~~capabilities~~Report on Form 10-K, ~~and~~along ~~compete~~with the Company's other filings, can be found on the ~~basis~~Securities ofand ~~product-based~~Exchange ~~advantage~~Commission's ~~that~~website, iswww.sec.gov, ~~grounded~~as inwell ~~those~~as ~~core~~on ~~capabilities~~the Company's website: www.albint.com.

The MC segment is the Company’s long-established core business and primary generator of cash. While it has been negatively impacted by declines in publication grades in the Company’s traditional markets, there has been some offsetting effect due to growth in demand for packaging and tissue grades, as well as the expansion of paper consumption and production in Asia and South America. We feel we are well-positioned in key markets, with high-quality, low-cost production in growth markets, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology. Some of the markets in which our products are sold are expected to have low levels of growth and we face pricing pressures in all markets. Despite these market pressures on revenue, the MC business retains the potential for maintaining stable earnings in the future. MC has been a significant generator of cash, and we seek to maintain the cash-generating potential of this business by maintaining the low costs that we have achieved through continuous focus on cost-reduction initiatives, and competing vigorously by using our differentiated and technically superior products to reduce our customers’ total cost of operation and improve their paper quality. On August 31, 2023, the Company acquired Heimbach, a privately-held manufacturer of paper machine clothing with headquarters in Düren, Germany. See Note 17, Business Combination for additional information.21

The AEC segment provides significant longer term growth potential for the Company. Our strategy is to grow by focusing our proprietary 3D-woven technology, as well as our non-3D technology capabilities, on high-value aerospace (both commercial and defense) applications, while at the same time performing successfully on our portfolio of growth programs. AEC (including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group owns a 10 percent noncontrolling interest) supplies a number of customers in the aerospace industry. AEC’s largest aerospace customer is the SAFRAN Group ("SAFRAN") and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net revenues in 2022. AEC, through ASC, also supplies 3D-woven composite fan cases for the GE9X engine. AEC’s current portfolio of non-3D programs includes components for the CH-53K helicopter, components for the F-35 joint strike fighter, missile bodies for Lockheed Martin’s JASSM air-to-surface missiles, fuselage components for the Boeing 787, and vacuum waste tanks for Boeing 7-Series aircraft. AEC is actively engaged in research to develop new applications in both commercial, space, and defense aircraft engine and airframe markets. For the year ended December 31, 2022, approximately 46 percent of AEC revenues were related to U.S. government contracts or programs.

Consolidated Results of Operations

Net revenues

The following table summarizes our Net revenues by business segment:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands, except percentages)

~~2023~~2024

~~2022~~2023

% Change

~~2023~~

~~2022~~

~~% Change~~

Machine Clothing

~~166~~185,~~588~~217

153,~~389~~222

820.69

~~479,027~~

~~459,121~~

~~4.3~~

Albany Engineered Composites

~~114~~128,~~518~~113

~~107~~115,~~174~~874

610.96

~~345,298~~

~~306,980~~

~~12.5~~

Total

~~281~~313,~~106~~330

~~260~~269,~~563~~096

716.94

~~824,325~~

~~766,101~~

~~7.6~~

25The following tables provide a comparison of 2024 Net revenues, excluding currency translation effects, to 2023 Net revenues:

The following tables provide a comparison of 2023 Net revenues, excluding currency translation effects, to 2022 Net revenues:


(in thousands, except percentages)	Net revenues as reported, Q1 2024		(Decrease)/ increase due to changes in currency translation rates		Q1 2024 revenues on same basis as Q1 2023 currency translation rates		Net revenues as reported, Q1 2023		% Change compared to Q1 2023, excluding currency rate effects
Machine Clothing	$	185,217	$	(598)	$	185,815	$	153,222	21.3	%
Albany Engineered Composites	128,113		221		127,892		115,874		10.4	%
Total	$	313,330	$	(377)	$	313,707	$	269,096	16.6	%

(in thousands, except percentages)	Net revenues as reported, Q3 2023		Increase due to changes in currency translation rates		Q3 2023 revenues on same basis as Q3 2022 currency translation rates		Net revenues as reported, Q3 2022		% Change compared to Q3 2022, excluding currency rate effects
Machine Clothing	$	166,588	$	662	$	165,926	$	153,389	8.2	%
Albany Engineered Composites	114,518		1,275		113,243		107,174		5.7	%
Total	$	281,106	$	1,937	$	279,169	$	260,563	7.1	%

Net revenues increased 16.4% compared to the same period in 2023, driven by $37.9 million of Net revenues from the Heimbach acquisition and higher Net revenues in AEC, partially offset by lower organic Net revenues at MC.

(in thousands, except percentages)	Net revenues as reported, YTD 2023		(Decrease)/ increase due to changes in currency translation rates		YTD 2023 revenues on same basis as 2022 currency translation rates		Net revenues as reported, YTD 2022		% Change compared to 2022, excluding currency rate effects
Machine Clothing	$	479,027	$	(3,684)	$	482,711	$	459,121	5.1	%
Albany Engineered Composites	345,298		851		344,447		306,980		12.2	%
Total	$	824,325	$	(2,833)	$	827,158	$	766,101	8.0	%

MC's Net revenues increased 20.9% compared to the first quarter of 2023, driven by Heimbach Net revenues of $37.9 million. This was partially offset by $5.3 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in all grades in Europe. This decrease was partially offset with increases in revenues in North America. Changes in currency translation rates had the effect of decreasing Net revenues $0.6 million.

~~Net~~ ~~revenues increased 7.9% compared to the same period in 2022. Changes in currency translation rates had the effect of increasing Net revenues $1.9 million. MC~~AEC's Net revenues increased 810.6% ~~compared to the third quarter of 2022~~, primarily driven by ~~Heimbach~~growth ~~Net~~on ~~revenues~~commercial ~~of $15.6 million~~ and, tospace ~~a lesser extent~~programs, ~~higher~~partially ~~Net revenues in tissue and packaging grades, more than~~ offset by lower ~~Net~~ revenues inon ~~pulp~~defense ~~and engineered fabrics~~programs. ~~AEC's~~Changes ~~Net~~in ~~revenues~~currency ~~increased~~translation ~~6.9%,~~rates ~~primarily~~had ~~driven by growth on LEAP programs,~~ the ~~Boeing~~effect ~~Frames~~of ~~program~~increasing ~~and~~Net ~~other~~revenues ~~commercial~~$0.2 ~~programs, offset by lower CH-53K sales~~million.

Nine month comparison

Changes in currency translation rates had the effect of decreasing Net revenues by $2.8 million, driven by a weaker Renminbi as compared to 2022. Excluding the effect of changes in currency translation rates:

•Net revenues increased 8.0% compared to the same period in 2022.

•Net revenues in MC increased 5.1% compared to the first nine months of 2022, primarily due to the contribution of Heimbach Net revenues of $15.6 million and growth in revenues for packaging and tissue grades, partially offset by decreases in Engineered Fabrics.

•Net revenues in AEC increased 12.2%, primarily due to growth on LEAP programs.

Gross Profit

The following table summarizes Gross profit by business segment:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands, except percentages)

~~2023~~2024

~~2022~~2023

~~2023~~

~~2022~~

Machine Clothing

7984,~~257~~655

7977,~~232~~855

~~238,031~~

~~237,434~~

Albany Engineered Composites

2224,~~578~~031

21,~~261~~463

~~65,826~~

~~55,256~~

Total

~~101~~108,~~835~~686

~~100~~99,~~493~~318

~~303,857~~

~~292,690~~

% of Net revenues

3634.27

3836.69

~~36.9~~

~~38.2~~

~~Three~~The ~~month~~increase ~~comparison~~in 2024 Gross profit, as compared to the same period last year, was driven by higher sales in both segments. Gross profit as a percentage of revenues was as follows:

~~The~~•MC's ~~increase~~gross inprofit ~~2023~~margin ~~Gross~~decreased ~~profit,~~from as50.8% ~~compared~~in 2023 to ~~the~~45.7% ~~same~~in ~~period~~2024. ~~last~~This ~~year,~~margin decrease was ~~driven~~primarily byattributable ~~higher~~to ~~sales~~lower ingross ~~both~~margin ~~segments~~at Heimbach. ~~Gross~~Excluding Heimbach, MC's gross profit asmargin aincreased ~~percentage~~to of52.1% ~~revenues:~~in 2024.

•MCAEC's gross profit margin ~~decreased~~remained largely in line with the prior year, increasing from 5118.75% in ~~2022~~2023 to 4718.68% in ~~2023~~2024, driven by ~~lower~~a ~~margins~~favorable atshift ~~Heimbach,~~in program revenue mix. Changes in ~~addition~~the toestimated ~~higher~~profitability ~~input~~of ~~costs~~long-term ~~due~~contracts todecreased ~~the~~operating ~~inflationary~~income ~~environment~~by ~~and~~$0.9 ~~lower~~million ~~overhead~~in ~~absorption~~2024, as compared to a decrease of $0.7 million during the same period last year.

2622

~~•AEC's gross profit margin remained largely in line with the prior year~~Selling, ~~decreasing slightly from 19.8% in 2022 to 19.7% in 2023~~General, ~~driven~~and byAdministrative an unfavorable shift in program revenue mix. Favorable changes in the estimated profitability of long-term contracts increased operating income by $0.9 million in 2023; however, in 2022, favorable changes were more significant, increasing operating income by $2.6 million.("SG&A")

~~Nine~~The ~~month~~following ~~comparison~~table summarizes SG&A expenses by business segment:

The increase in Gross profit during the first nine months of 2023, as compared to the same period in 2022, was driven by the following:


	Three months ended March 31,
(in thousands, except percentages)	2024			2023
Machine Clothing	$	29,004		$	23,073
Albany Engineered Composites	7,510			7,566
Corporate expenses	18,321			17,840
Total	$	54,835		$	48,479
% of Net revenues	17.5		%	18.0		%

~~•MC's~~Consolidated ~~gross~~SG&A ~~profit~~expenses ~~margin~~increased ~~decreased from 51~~13.71% inas ~~2022~~compared to ~~49.7% in~~ 2023, ~~driven~~however, byas ~~lower~~a ~~margins~~percentage atof ~~Heimbach,~~Net inrevenues ~~addition~~it todecreased ~~increased~~from ~~input~~18.0% ~~costs,~~in ~~mainly~~2023 ~~due~~ to ~~the~~17.5% ~~inflationary~~in ~~environment, and lower overhead absorption~~2024.

•~~AEC's~~MC ~~Gross~~SG&A ~~profit~~expenses increased $105.69 million ~~and,~~ as acompared ~~percentage~~to ~~of revenues~~2023, ~~increased~~of ~~from~~which 18$9.0%2 inmillion of the ~~prior~~increase ~~year~~related to 19Heimbach.1% inExcluding ~~2023. The~~Heimbach, ~~increase~~MC's inSG&A ~~gross~~decreased ~~profit~~$3.3 ~~was~~million, driven primarily by ~~growth~~changes in ~~revenues~~currency ~~during~~translation ~~2023~~rates, ~~primarily~~which onreduced ~~LEAP~~expenses ~~programs~~by ~~and~~$2.8 ~~other commercial programs~~million, ~~with improved overhead absorption and reductions in raw material reserves~~ as ~~compared~~well ~~to 2022. In addition, gross profit margin increased~~ as alower ~~result~~consulting offees ~~improved overhead absorption~~ and ~~the~~incentive ~~absence~~compensation ~~of a $2 million raw material reserve on damaged inventory, as compared to prior year~~costs.

~~Selling,~~•In ~~Technical~~AEC, ~~General,~~SG&A ~~and~~expenses ~~Research~~remained ~~("STG&R")~~largely in line with the prior year.

~~The~~•Corporate ~~following~~SG&A ~~table~~expenses ~~summarizes~~increased ~~STG&R~~$0.5 ~~expenses~~million, byprincipally ~~business~~due ~~segment:~~to acquisition and integration related expenses.

	Three months ended September 30,						Nine months ended September 30,
(in thousands, except percentages)	2023			2022			2023			2022
Machine Clothing	$	28,465		$	21,941		$	84,404		$	75,427
Albany Engineered Composites	13,204			11,302			38,366			34,568
Corporate expenses	20,014			13,564			54,747			39,314
Total	$	61,683		$	46,807		$	177,517		$	149,309
% of Net revenues	21.9		%	18.0		%	21.5		%	19.5		%

Technical and Research

~~Three~~The ~~month~~following ~~comparison~~table summarizes technical and research expenses by business segment:

Consolidated STG&R expenses increased 31.8% as compared to 2022, and as a percentage of revenues increased from 18.0% in 2022 to 21.9% in 2023.


	Three months ended March 31,
(in thousands, except percentages)	2024			2023
Machine Clothing	$	7,520		$	5,798
Albany Engineered Composites	5,145			4,479

Total	$	12,665		$	10,277
% of Net revenues	4.0		%	3.8		%

~~•In~~Consolidated ~~MC,~~Technical ~~changes~~and inresearch ~~currency~~expenses ~~translation~~increased ~~rates~~23.2% ~~had~~as ~~the~~compared ~~effect~~to of2023, ~~increasing~~and ~~STG&R~~as bya ~~$2.3~~percentage ~~million over the prior year. The addition~~ of ~~Heimbach,~~Net ~~combined~~revenues ~~with~~increased ~~increases~~from 3.8% in ~~customer~~2023 ~~credit loss reserves, contributed~~ to ~~higher~~4.0% ~~STG&R~~in ~~expenses as compared to 2022~~2024.

•InMC ~~AEC,~~Technical ~~Selling~~ and ~~general~~research expenses increased $1.97 million as compared to 2023, ~~primarily~~of ~~driven~~which by$1.6 ~~increased~~million ~~incentive~~was ~~compensation~~due ~~and~~to ~~personnel-related~~the ~~costs~~addition of Heimbach.

•~~Corporate~~AEC ~~STG&R~~Technical and research expenses increased $60.47 million, ~~principally~~as ~~due~~compared to ~~acquisition-related expenses~~2023, ~~the~~due ~~vesting~~to ofincreases ~~retirement~~in ~~compensation~~research ~~costs~~material ~~for the former CEO,~~ and ~~higher~~labor ~~personnel-related~~ costs.

Nine month comparison

The overall increase in STG&R expenses in the first nine months of 2023, compared to the same period in 2022, was due to the net effect of the following:

•In MC, changes in currency translation rates had the effect of increasing STG&R by $5.6 million over the prior year. The addition of Heimbach, combined with increases in travel and related expenses, contributed to higher STG&R expenses as compared to 2022.

•In AEC, Selling and general expenses increased $2.2 million due to higher incentive compensation and personnel-related costs, and $0.5 million related to investments in business development, including increases in marketing and trade show activities.

•Corporate STG&R expenses increased $15.4 million principally due to higher professional fees, acquisition-related expenses, vesting of retirement compensation costs for the former CEO, and higher personnel-related costs.

Restructuring Expense, net

In addition to the items discussed above affecting Gross profit, SG&A and ~~STG&R~~Technical and research expenses, Operating income was affected by restructuring expense, net, of $02.~~1 million in the third quarter, and $0.~~2 million in the ~~nine~~three months ended ~~September 30~~March 31, ~~2023~~2024, ~~and~~compared ~~was related primarily~~ to ~~the~~an ~~winding~~insignificant ~~down~~amount ofin ~~restructuring~~in ~~actions~~the ~~taken~~same inperiod ~~prior~~of ~~periods~~2023.

The following table summarizes restructuring expenses by business segment:


	Three months ended March 31,
(in thousands)	2024			2023
Machine Clothing	$	21		$	20
Albany Engineered Composites	2,188			—

Consolidated total	$	2,209		$	20
% of Net revenues	0.7		%	0.0		%

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

Operating Income

The following table summarizes operating income/(loss) by business segment:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands)

~~2023~~2024

~~2022~~2023

~~2023~~

~~2022~~

Machine Clothing

5048,~~710~~110

5748,~~247~~964

~~153,400~~

~~161,752~~

Albany Engineered Composites

9,~~374~~188

9,~~958~~418

~~27,460~~

~~20,688~~

Corporate expenses

(2018,~~014~~321)

(1317,~~561~~840)

~~(54,747)~~

~~(39,327)~~

Total

4038,~~070~~977

5340,~~644~~542

~~126,113~~

~~143,113~~

% of Net revenues

12.4

15.1

Changes in operating income were primarily attributable to the drivers noted above.

Other Earnings Items

	Three months ended September 30,				Nine months ended September 30,
	Three months ended March 31,
(in thousands)	~~2023~~2024		~~2022~~2023		~~2023~~		~~2022~~
Interest expense, net	$	3,~~653~~319	$	3,~~794~~290	$	~~10,049~~	$	~~11,336~~
Pension settlement expense	—		49,128		—		49,128
Other (income)/expense, net	(2,982)		(455)
Other (income)/expense, net	56		(6,918)		(4,910)		(17,891)
Income tax expense	11,271		10,621
Income tax expense	9,207		(3,183)		39,908		22,273
Net income attributable to the noncontrolling interest	78		197
Net income attributable to the noncontrolling interest	45		129		396		635

Interest ~~expense~~Expense/(~~income~~Income), net

Interest expense/(income), net, ~~decreased~~was ~~over~~largely ~~the prior year as a result of higher interest earned on Cash and cash equivalents,~~ in ~~addition~~line towith ~~decreased~~the ~~interest~~prior ~~expense on finance leases~~year. See the Working Capital, Liquidity and Capital Structure section for further discussion of borrowings and interest rates.

~~Pension~~Other ~~settlement~~(Income)/Expense, ~~expense~~net

InOther ~~the~~(income)/expense, ~~third quarter of 2022~~net, ~~the~~included ~~Company~~foreign ~~took~~currency ~~actions~~related totransactions ~~settle~~which ~~certain~~resulted ~~pension~~in ~~plan~~income ~~liabilities~~of $1.3 million in the ~~U.S.~~three months ended March 31, ~~leading~~2024, as compared to ~~charges~~losses ~~totaling~~of $490.1 million in the same period last year. NoOther ~~similar~~(income)/expense, ~~charges~~net, ~~were~~also ~~incurred~~included gains on changes in ~~the~~fair ~~current~~value ~~year~~of derivative instruments, gains on sales of fixed assets, and rental income.

~~Other~~Effective ~~(income)/expense,~~Income ~~net~~Tax Rate

Other (income)/expense, net, included foreign currency related transactions which resulted in expense of $0.5 million in the three months ended September 30, 2023, as compared to gains of $6.6 million in the same period last year, and resulted in gains of $3.6 million in the nine months ended September 30, 2023, as compared to gains of $17.7 million in the same period last year. During 2023, the Mexican Peso weakened during the third quarter, but was overall stronger during the nine months ended September 30, 2023, driving the foreign currency gain in the period. During 2022, the Euro remained weaker for the three and nine months ended September 30, 2022, resulting in a more significant foreign currency gain during those periods.


	Three months ended March 31,
	2024		2023
Effective income tax rate	29.2	%	28.2	%

Income Tax expense/(benefit)

The Company has operations that constitute a taxable presence in 22 countries outside of the United States. The majority of these countries had income tax rates that were above the United States federal tax rate of 21 percent during the periods reported. The jurisdictional location of earnings is a significant component of our effective tax rate each year. The rate impact of this component is influenced by the specific location of non-U.S. earnings and the level of our total earnings. From period to period, the jurisdictional mix of earnings can vary as a result of operating fluctuations in the normal course of business, as well as the extent and location of other income and expense items, such as pension settlement and restructuring charges.

The tax rate is affected by recurring items, such as the income tax rate in the U.S. and non-U.S. jurisdictions and the mix of pre-tax income earned in those jurisdictions. The tax rate is also affected by U.S. tax costs on foreign pre-tax earnings, and by discrete items that may occur in any given year but are not consistent from year to year. The Company’s effective tax rate for the first quarter of 2024 was 29.2%, higher compared to 28.2% for the same period in 2023, mainly due to an unfavorable change in the jurisdictional mix of earnings forecasted for 2024. For more information, see Note 6, Income Taxes, in the Notes to the Consolidated Financial Statements.

2824

~~tax~~The ~~rate~~Organization for ~~the~~Economic ~~third~~Co-operation ~~quarter~~and ofDevelopment ~~2023~~has ~~was~~issued ~~25.3%,~~Pillar ~~higher~~Two ~~compared~~model torules ~~(41.6%)~~introducing ~~for~~a ~~the~~new ~~same~~global ~~period~~minimum intax ~~2022,~~of ~~mainly~~15 ~~due~~percent intended to ~~favorable~~be ~~discrete~~effective ~~tax~~on ~~adjustments~~January in1, ~~the~~2024. ~~prior~~While ~~period~~the U.S. ~~For~~has ~~the~~not ~~first~~yet ~~nine~~adopted ~~months~~the ofPillar ~~2023~~Two rules, ~~the~~various ~~Company's~~other ~~effective~~governments ~~tax~~around ~~rate~~the ~~was~~world 33are enacting legislation.0% As currently designed, ~~higher~~Pillar ~~compared~~Two will ultimately apply to ~~22.2%~~our ~~for~~worldwide ~~the~~operations. ~~same~~Although ~~period~~we indo ~~2022,~~not ~~mainly~~expect ~~due~~these rules to ~~favorable~~materially ~~discrete~~increase our global tax ~~adjustments~~costs in 2024, there remains uncertainty as to the ~~prior~~final ~~year~~Pillar Two model rules. ~~For~~We ~~more~~will ~~information,~~continue ~~see~~to ~~Note~~monitor 5U.S. ~~Income~~and ~~Taxes~~global inlegislative ~~the~~action ~~Notes~~related to ~~the~~Pillar ~~Consolidated~~Two ~~Financial~~for ~~Statements~~potential impacts.

On January 17, 2024, the House Ways and Means Committee announced a draft legislation called "The Tax Relief for American Families and Workers Act of 2024". This act would restore 100% bonus depreciation for property placed in service after December 31, 2022 and before January 1, 2026; and retroactively restore the ability to deduct domestic research and experimentation costs that were required to be capitalized beginning in 2022 under Section 174. On January 31, 2024, the United States House of Representatives voted to approve this bill, which is now with the United States Senate. We will continue to monitor the status of this legislation and assess the potential impact, if passed.

Segment Results of Operations

Machine Clothing Segment

~~Machine~~The ~~Clothing~~MC ~~is our largest business~~ segment ~~and~~ accounted for 5859% of our consolidated revenues during the first ~~nine~~three months of ~~2023~~2024. MCA ~~products~~summary ~~are purchased primarily by manufacturers~~ of ~~paper~~selected ~~and~~financial ~~paperboard.~~results Wefor ~~believe~~MC weis ~~are~~as ~~well-positioned~~follows: in these markets, with high-quality, low-cost production in growth markets, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology. Technological advances in paper machine clothing, while contributing to the papermaking efficiency of customers, have lengthened the useful life of many of our products and had an adverse impact on overall paper machine clothing demand.

The Company’s manufacturing and product platforms position us well to meet these shifting demands across product grades and geographic regions. Our strategy for meeting these challenges continues to be to grow share in all markets, with new products and technology and selective business acquisitions, and to maintain and grow our manufacturing footprint to align with global demand, while we offset the effects of inflation through continuous productivity improvement. On August 31, 2023, the Company acquired Heimbach, a privately-held manufacturer of paper machine clothing with headquarters in Düren, Germany, which is expected to enhance the Company's scale and geographic footprint, provide complementary technology, and create a differentiated manufacturing, sales and service network.

Review of Operations

	Three months ended September 30,						Nine months ended September 30,
	Three months ended March 31,
(in thousands, except percentages)	~~2023~~2024			~~2022~~2023			~~2023~~			~~2022~~
Net revenues	$	~~166~~185,~~588~~217		$	153,~~389~~222		$	~~479,027~~		$	~~459,121~~
Gross profit	7984,~~257~~655			7977,~~232~~855			~~238,031~~			~~237,434~~
% of Net revenues	4745.67		%	5150.78		%	~~49.7~~		%	~~51.7~~		%
STG&R expenses	28,465			21,941			84,404			75,427
SG&A expenses	29,004			23,073
Operating income	50,710			57,247			153,400			161,752
Technical and research expenses	7,520			5,798
Operating income	48,110			48,964

Net Revenues

~~Three~~Net ~~month~~revenues ~~comparison~~increased by 20.9%, driven by Heimbach Net revenues of $37.9 million. This was partially offset by $5.3 million of lower Net revenues in the rest of the segment, driven primarily by weakness in publication globally, and in all grades in Europe. This decrease was partially offset with increases in North America. Changes in currency translation rates had the effect of decreasing Net revenues $0.6 million.

Net revenues increased by 8.6%. Changes in currency translation rates, driven by a stronger Euro, offset in part by a weaker Renminbi, had the effect of increasing third quarter 2023 revenues by $0.7 million. Excluding the effect of changes in translation rates, Net revenues in MC increased 8.2% compared to the third quarter of 2022, driven by higher Net revenues in tissue and packaging grades and the contribution of $15.6 million of revenues from the Heimbach acquisition.

Nine month comparison

Net revenues increased by 4.3%. Changes in currency translation rates, driven by a weaker Renminbi, had the effect of decreasing 2023 revenues by $3.7 million compared to the same period in 2022. Excluding the effect of changes in currency translation rates, Net revenues in MC increased 5.1% compared to 2022, primarily due to growth in revenues for tissue and packaging grades and the contribution of $15.6 million of revenues from the Heimbach acquisition.

Gross Profit

MCGross ~~delivered~~profit ~~steady~~increased ~~Gross~~by ~~profit~~$6.8 inmillion as compared to the ~~three~~prior ~~and~~year, ~~nine~~driven ~~months~~by ~~ended~~the ~~September~~higher 30sales noted above; however, gross profit margin decreased from 50.8% in 2023, to 45.7% in ~~line~~2024. ~~with~~This ~~prior~~margin ~~year~~decrease ~~performance~~was primarily driven by lower gross margins at Heimbach. Excluding Heimbach, ~~though~~MC's itgross ~~experienced~~profit ~~some~~margins ~~reduction~~increased to 52.1% in ~~gross~~2024 ~~margin~~as ona ~~account~~result of higher ~~input~~revenues ~~costs~~in ~~and~~North ~~lower overhead absorption~~America.

Operating Income

Operating income decreased year-over-year, due to higher ~~STG~~SG&RA and Technical and research expenses. ~~Changes~~from the Heimbach acquisition in ~~currency~~addition ~~translation~~to ~~rates~~Heimbach's ~~had~~lower ~~the~~gross ~~effect~~profit margins. The addition of ~~increasing~~Heimbach ~~STG~~increased SG&RA expenses by $29.32 million and ~~$5.6~~increased ~~million~~Technical ~~for~~and ~~the~~research ~~three~~expenses ~~and~~by ~~nine~~$1.6 ~~months~~million. ~~ended~~Excluding ~~September 30~~Heimbach, ~~2023,~~SG&A asdecreased ~~compared~~$3.3 tomillion, ~~the~~driven ~~prior~~primarily ~~year.~~by ~~The~~changes ~~addition~~in ofcurrency ~~Heimbach~~translation rates, ~~combined~~which ~~with~~reduced ~~increases~~expenses in$2.8 ~~customer credit loss reserves~~million, ~~contributed~~as towell ~~higher~~as ~~STG&R~~lower ~~expenses~~consulting asfees ~~compared~~and toincentive ~~2022~~compensation costs.

The acquisition of Heimbach impacted MC's third quarter results by reducing Operating income $0.5 million, which included an incremental Cost of goods sold charge related to the acquisition step-up of inventory balances, and also included Depreciation expense on Property, plant, and equipment, net of $1.1 million, and amortization expense on Intangibles, net of $0.1 million. 25

Albany Engineered Composites ("AEC") Segment

The AEC segment ~~provides~~accounted ~~highly~~for ~~engineered,~~41% ~~advanced~~of ~~composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which~~ our ~~customer,~~consolidated ~~SAFRAN~~revenues ~~Group,~~during ~~owns a 10 percent noncontrolling interest. AEC, through ASC, is~~ the ~~exclusive~~first ~~supplier~~three tomonths ~~the LEAP program~~ of ~~advanced composite fan blades and fan cases under a long-term supply contract~~2024. ~~The~~A ~~LEAP~~summary ~~engine~~of isselected ~~used~~financial onresults ~~the~~for ~~Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircraft. Other significant programs by~~ AEC ~~include~~is ~~the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing 7-Series programs, and specialty components for the Rolls Royce lift fan on the F-35,~~ as ~~well~~follows: ~~as the fan case for the GE9X engine.~~

Review of Operations

	Three months ended September 30,						Nine months ended September 30,
	Three months ended March 31,
(in thousands, except percentages)	~~2023~~2024			~~2022~~2023			~~2023~~			~~2022~~
Net revenues	$	~~114~~128,~~518~~113		$	~~107~~115,~~174~~874		$	~~345,298~~		$	~~306,980~~
Gross profit	2224,~~578~~031			21,~~261~~463			~~65,826~~			~~55,256~~
% of Net revenues	1918.78		%	1918.85		%	~~19.1~~		%	~~18.0~~		%
STG&R expenses	13,204			11,302			38,366			34,568
SG&A expenses	7,510			7,566
Operating income	9,374			9,958			27,460			20,688
Technical and research expenses	5,145			4,479
Operating income	9,188			9,418

Net Revenues

For the three months ended ~~September 30~~March 31, ~~2023~~2024, Net revenues increased 610.96% as compared to the prior year, driven by growth on ~~LEAP~~commercial ~~programs~~ and ~~other~~space ~~commercial~~ programs of approximately $17. ~~Excluding~~0 ~~the~~million, ~~effect~~partially ofoffset ~~changes~~by lower revenues on defense programs. Changes in currency translation rates, had the ~~increase~~effect inof increasing Net revenues ~~was~~$0.2 5million.~~7%.~~

~~For~~AEC ~~the~~has ~~nine~~contracts ~~months~~with ~~ended~~certain ~~September 30~~customers, ~~2023,~~including ~~Net~~its ~~revenues~~contract infor ~~AEC~~the ~~increased~~LEAP ~~12.5%~~program, ~~primarily~~where ~~due~~revenue tois ~~growth~~determined onby ~~LEAP~~a ~~programs~~cost-plus-fee agreement. ~~Excluding~~Revenue ~~the~~earned ~~effect~~under ofthese ~~changes~~arrangements inaccounted ~~currency~~for ~~translation~~approximately ~~rates,~~40 percent of segment revenue for the ~~increase~~first inthree ~~Net~~months ~~revenues~~of ~~was~~2024 12and 2023.~~2%.~~

AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by a cost-plus-fee agreement. Revenue earned under these arrangements accounted for approximately 40 percent of segment revenue for the first nine months of 2023 and 2022.

In addition, AEC has long-term contracts in which the selling price is fixed. In accounting for those contracts, we estimate the profit margin expected at the completion of the contract and recognize a pro-rata share of that profit during the course of the contract using a cost-to-cost approach. Changes in estimated contract profitability will affect revenue and gross profit when the change occurs, which could have a significant favorable or unfavorable effect on revenue and gross profit in any reporting period. For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses. Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that often follow.

Gross Profit

For the three months ended ~~September 30~~March 31, ~~2023~~2024, Gross profit increased $12.36 million as compared to the same period last year, and asgross aprofit ~~percentage~~margin ofremained ~~revenues~~largely ~~decreased~~in line with the prior year, increasing from 1918.85% in ~~2022~~2023 to 1918.78% in ~~2023,~~2024. The ~~driven~~increase ~~by an unfavorable shift~~ in ~~program~~profit ~~revenue~~margin ~~mix,~~was ~~coupled~~driven ~~with~~primarily ~~$1.7~~by ~~million~~a ~~of less~~ favorable ~~changes~~shift in ~~the~~program ~~estimated~~revenue ~~profitability~~mix ~~of long-term contracts as compared~~ to ~~the~~commercial ~~same period last year~~programs.

For the nine months ended September 30, 2023, Gross profit increased $10.6 million and as a percentage of revenues increased from 18.0% in the prior year to 19.1% in 2023. The increase was driven by growth in revenues during 2023, primarily on LEAP programs and other commercial programs, with improved overhead absorption and reductions in raw material reserves as compared to 2022.

Operating Income

For the three months ended ~~September 30~~March 31, ~~2023~~2024, Operating income decreased $0.62 million, principally due to ana $0.7 million increase in ~~Selling,~~Technical ~~general,~~ and research expenses, as well as restructuring expenses of $2.2 million, as described above.

~~For~~Changes in the ~~nine~~estimated ~~months~~profitability ~~ended~~of ~~September~~long-term ~~30,~~contracts ~~2023,~~decreased ~~Operating~~operating income ~~increased~~by $60.89 million in 2024, ~~principally~~as ~~due~~compared to ~~higher~~a ~~Net~~decrease ~~revenues~~of ~~and~~$0.7 million ~~Gross~~during ~~profit,~~the assame ~~described~~period ~~above,~~last ~~partially offset by higher STG&R expenses~~year.

Changes in the estimated profitability of long-term contracts increased operating income by $0.9 million for the third quarter of 2023 and decreased operating income $4.1 million for the nine months ended September 30, 2023. Adjustments in the estimated profitability of long-term contracts increased operating income by $2.6 million and $2.0 million in the three and nine months ended September 30, 2022, respectively. 26

Working Capital, Liquidity and Capital Structure

Cash Flow Summary

	Nine months ended September 30,
	Three months ended March 31,
(in thousands)	~~2023~~2024		~~2022~~2023
Net income	$	8127,~~066~~369	$	7827,~~267~~086
Depreciation and amortization	5422,~~778~~304		5117,~~908~~367
Changes in working capital (a)	(5827,~~130~~171)		(8948,~~899~~388)
Changes in other noncurrent liabilities and deferred taxes	(~~4,866~~169)		(~~21,542~~880)
Other operating items	~~964~~(12,736)		48(11,~~573~~578)
Net cash provided by operating activities	739,~~812~~597		67(16,~~307~~393)
Net cash used in investing activities	(~~182~~26,~~596~~880)		(5216,~~832~~275)
Net cash used in financing activities	(1028,~~839~~069)		(941,~~119)~~086
Effect of exchange rate changes on cash and cash equivalents	(~~647~~2,656)		~~(30~~4,~~910)~~064
Decrease in cash and cash equivalents	(~~120~~48,~~270~~008)		~~(25~~12,~~554)~~482
Cash and cash equivalents at beginning of year	~~291~~173,~~776~~420		~~302~~291,~~036~~776
Cash and cash equivalents at end of period	$	~~171~~125,~~506~~412	$	~~276~~304,~~482~~258

(a)Includes Accounts receivable, Contract assets, Inventories, Accounts payable, and Accrued liabilities.

Net cash provided by operating activities was $739.86 million in ~~2023~~2024, compared to net cash used in activities of $6716.34 million in the same period last year. The increase was driven by improved levels of working capital at MCboth segments and lower ~~cash~~tax ~~outflows~~payments related to other liabilities. In the previous year, the Company made contributions of approximately $12.6 million to the U.S. Pension plan, in line with the Company's plan to reduce pension obligations over time. No similar payment was made during the current ~~year~~period.

WeNet ~~deploy our~~ cash ~~with~~used ain ~~focus on~~ investing inactivities ~~our~~primarily ~~business~~include and new technologies to provide our customers with enhanced capabilities, increase shareholder value, and position ourselves to take advantage of new business opportunities as they arise. Based on such strategy, we have continued to invest in our business and technologies through capital expenditures, ~~research~~totaling ~~and~~$26.9 ~~development,~~million and ~~when appropriate, selective business acquisitions~~$16.3 Onmillion ~~August~~for ~~31, 2023,~~ the ~~Company~~first ~~acquired~~three ~~Heimbach,~~months ~~a privately-held manufacturer~~ of ~~paper~~2024 ~~machine~~and ~~clothing with headquarters in Düren~~2023, ~~Germany~~respectively, ~~for~~including ~~net~~investments ~~cash of $133.5 million, funded using cash on hand. Net cash used~~ in ~~investing~~new ~~activities~~aerospace ~~also~~programs ~~included capital expenditures totaling $49.1 million~~ and ~~$52.8~~to ~~million~~improve ~~for~~productivity ~~the~~in ~~first~~our ~~nine~~MC ~~months~~ segment.

31Net cash used in financing activities during 2024 was $28.1 million as compared to net cash provided by financing activities of $41.1 million in 2023. The change was primarily due to lower borrowings that were more than offset by a significant increase in principal payments on debt during the current period.

of 2023 and 2022, respectively, including investments to improve productivity and produce a meaningful impact on energy and resource efficiency.

Net cash used in financing activities during 2023 was $10.8 million as compared to $9.1 million in 2022. The increase was, in part, due to the absence of share repurchases in the current year, which resulted in lower borrowings from the revolving credit facility.

Liquidity and Capital Structure

We finance our business activities principally with cash generated from operations and borrowings, largely through our revolving credit agreement as discussed below. Our subsidiaries outside of the United States may also maintain working capital lines with local banks.

Under our $800 million unsecured committed Amended Credit Agreement, $~~461~~429.0 million of borrowings were outstanding as of ~~September~~March 3031, ~~2023,~~2024. inIn addition, we have borrowings outstanding at ~~the~~our newly acquired Heimbach subsidiary of $2910.61 million, of which $274.24 million was considered current.

As of ~~September~~March 3031, ~~2023~~2024, we had cash and cash equivalents of $~~171~~125.54 million and available borrowings under our Amended Credit Agreement of $~~339~~371.0 million, for a total liquidity of approximately $~~510~~496.54 million. We believe cash flows from operations and the availability of funds under our Amended Credit Agreement will be adequate to fund our operations and business needs over the next twelve months. For more information on credit agreements, see Note 1314. Financial Instruments in the Notes to Consolidated Financial Statements.

As of ~~September~~March 3031, ~~2023~~2024, $~~150~~109.90 million of our total cash and cash equivalents were held by non-U.S. subsidiaries. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were in excess of $42 155.0 million, as of ~~September 30,~~March ~~2023~~31, 2024 and are intended to remain indefinitely invested in foreign operations. Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such ~~endeavors~~endeavor to date, there can be no assurance that we will be able to cost effectively repatriate funds in the future. Repatriating such cash from certain jurisdictions, which is currently considered to be indefinitely reinvested in foreign operations, may also result in additional ~~withholding~~ taxes.

~~Bank~~We ~~debt~~have atalso ~~the~~returned ~~Company's~~cash ~~Heimbach~~to ~~subsidiary,~~shareholders ~~assumed~~through individends ~~the~~and ~~acquisition,~~share ~~is held by several European financial institutions~~repurchases. ~~Certain~~During ~~bank agreements allow for~~ the ~~repayment~~first ofthree ~~the~~months ~~debt upon demand by any~~ of the financial institutions in the event of a change in control. Some or all of the assumed bank debt could become due upon notification by any of the financial institutions before the maturity date of the bank agreements. As a result2024, ~~of the $29.6 million borrowings outstanding as of September 30, 2023,~~ we ~~have~~paid ~~classified~~ $278.21 million asin ~~current~~dividends ~~maturity (see Note 17, Business Combination~~ and ~~Note~~had ~~13,~~no ~~Financial~~share ~~Instruments, for additional information)~~repurchases. ~~In the event this debt becomes callable, we have sufficient liquidity to settle this debt.~~

~~We have also returned cash to shareholders through dividends and share repurchases. During the first nine months of 2023, we paid $23.4 million in dividends and had no share repurchases.~~27

Off-Balance Sheet Arrangements

The Company is party to certain off-balance sheet arrangements, including certain guarantees. The Company provides financial assurance, such as payment guarantee and letters of credit and surety bonds, primarily to support workers’ compensation programs and customs clearance, of less than $712 million. There were no material changes in the Company’s off-balance sheet arrangements during ~~2023~~2024.

~~Non-GAAP Measures~~28

This Form 10-Q contains certain non-GAAP measures that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include Net revenues and percent change in Net revenues, excluding the impact of currency translation effects; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted earnings per share (or Adjusted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net revenues and change in Net revenues, after currency effects are excluded, provides management and investors insight into underlying revenues trends. Net revenues, or percent changes in Net revenues, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the

exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

EBITDA (calculated as net income excluding interest, income taxes, depreciation and amortization), Adjusted EBITDA, and Adjusted EPS are performance measures that relate to the Company’s continuing operations. The Company defines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance. Such excluded costs or benefits do not consist of normal, recurring cash items necessary to generate revenues or operate our business. Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of Net revenues.

The Company defines Adjusted EPS as basic earnings per share (GAAP), adjusted by the after tax per share amount of costs or benefits not reflective of the Company’s ongoing or expected future operational performance. The income tax effects are calculated using the applicable statutory income tax rate of the jurisdictions where such costs or benefits were incurred or the effective tax rate applicable to total company results.

The Company’s Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted EPS may not be comparable to similarly titled measures of other companies.

Net debt aids investors in understanding the Company’s debt position if all available cash were applied to pay down indebtedness.

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The following tables show the calculation of EBITDA and Adjusted EBITDA:

Three months ended September 30, 2023
(in thousands)	Machine Clothing		Albany EngineeredComposites		Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	50,710	$	9,374	$	(32,930)	$	27,154
Interest expense/(income), net	—		—		3,653		3,653
Income tax expense	—		—		9,207		9,207
Depreciation and amortization expense	5,976		12,510		975		19,461
EBITDA (non-GAAP)	56,686		21,884		(19,095)		59,475
Restructuring expenses, net	82		—		—		82
Foreign currency revaluation (gains)/losses (a)	(656)		19		516		(121)
CEO transition expenses	—		—		2,052		2,052
Inventory step-up impacting Cost of goods sold	1,370		—		—		1,370
Acquisition/integration costs	—		273		1,642		1,915
Pre-tax (income) attributable to noncontrolling interest	—		(73)		—		(73)
Adjusted EBITDA (non-GAAP)	$	57,482	$	22,103	$	(14,885)	$	64,700

Three months ended September 30, 2022
(in thousands)	Machine Clothing		Albany EngineeredComposites		Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	57,247	$	9,958	$	(56,382)	$	10,823
Interest expense/(income), net	—		—		3,794		3,794
Income tax benefit	—		—		(3,183)		(3,183)
Depreciation and amortization expense	4,913		11,303		818		17,034
EBITDA (non-GAAP)	62,160		21,261		(54,953)		28,468
Restructuring expenses, net	42		—		—		42
Foreign currency revaluation (gains)/losses (a)	(2,931)		122		(6,633)		(9,442)
Dissolution of business relationships in Russia	(214)		—		—		(214)
Pension settlement expense	—		0		49,128		49,128
Acquisition/integration costs	—		255		—		255
Pre-tax (income) attributable to noncontrolling interest	—		(176)		—		(176)
Adjusted EBITDA (non-GAAP)	$	59,057	$	21,462	$	(12,458)	$	68,061

Nine months ended September 30, 2023
(in thousands)	Machine Clothing		Albany EngineeredComposites		Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	153,400	$	27,460	$	(99,794)	$	81,066
Interest expense/(income), net	—		—		10,049		10,049
Income tax expense	—		—		39,908		39,908
Depreciation and amortization expense	15,682		36,246		2,850		54,778
EBITDA (non-GAAP)	169,082		63,706		(46,987)		185,801
Restructuring expenses, net	227		0		0		227
Foreign currency revaluation (gains)/losses (a)	1,870		19		(3,609)		(1,720)
CEO transition expenses	—		—		2,052		2,052
Inventory step-up impacting Cost of goods sold	1,370		—		—		1,370
Acquisition/integration costs	—		813		2,005		2,818
Pre-tax (income) attributable to noncontrolling interest	—		(474)		—		(474)
Adjusted EBITDA (non-GAAP)	$	172,549	$	64,064	$	(46,539)	$	190,074

Nine months ended September 30, 2022
(in thousands)	Machine Clothing		Albany EngineeredComposites		Corporate expensesand other		Total Company
Net income/(loss) (GAAP)	$	161,752	$	20,688	$	(104,173)	$	78,267
Interest expense/(income), net	—		—		11,336		11,336
Income tax expense	—		—		22,273		22,273
Depreciation and amortization expense	14,716		34,792		2,400		51,908
EBITDA (non-GAAP)	176,468		55,480		(68,164)		163,784
Restructuring expenses, net	255		—		13		268
Foreign currency revaluation (gains)/losses (a)	(3,690)		755		(17,644)		(20,579)
Dissolution of business relationships in Russia	1,573		—		781		2,354
Pension settlement expense	—		—		49,128		49,128
Acquisition/integration costs	—		806		—		806
Pre-tax (income) attributable to noncontrolling interest	—		(633)		—		(633)
Adjusted EBITDA (non-GAAP)	$	174,606	$	56,408	$	(35,886)	$	195,128

The Company discloses certain income and expense items on a per-share basis. The Company believes that such disclosures provide important insights into the 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 either the tax rates in specific countries or the estimated tax rate applied to total company results. The after-tax amount is then divided by the weighted-average number of shares outstanding for each period. Year-to-date earnings per-share effects are determined by adding the amounts calculated at each reporting period.

The following tables show the earnings per share effect of certain income and expense items:

Three months ended September 30, 2023(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	82	$	21	$	61	$	0.00
Foreign currency revaluation (gains)/losses (a)	(121)		(35)		(86)		0.00
CEO transition expenses	2,052		—		2,052		0.07
Inventory step-up impacting Cost of goods sold	1,370		411		959		0.03
Acquisition/integration costs	1,915		476		1,439		0.05

Three months ended September 30, 2022(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	42	$	6	$	36	$	0.00
Foreign currency revaluation (gains)/losses (a)	(9,442)		(2,694)		(6,748)		(0.22)
Dissolution of business relationships in Russia	(214)		(18)		(196)		(0.01)
Pension settlement expense	49,128		11,947		37,181		1.20
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)	—		5,217		(5,217)		(0.17)
Acquisition/integration costs	255		77		178		0.01

Nine months ended September 30, 2023(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	227	$	68	$	159	$	0.01
Foreign currency revaluation (gains)/losses (a)	(1,720)		(504)		(1,216)		(0.04)
CEO transition expenses	2,052		—		2,052		0.07
Withholding tax related to internal restructuring	—		(3,026)		3,026		0.10
Inventory step-up impacting Cost of goods sold	1,370		411		959		0.03
Acquisition/integration costs	2,818		725		2,093		0.07
Nine months ended September 30, 2022(in thousands, except per share amounts)	Pre taxAmounts		TaxEffect		After taxEffect		Per shareEffect
Restructuring expenses, net	$	268	$	75	$	193	$	0.01
Foreign currency revaluation (gains)/losses (a)	(20,579)		(5,829)		(14,750)		(0.47)
Dissolution of business relationships in Russia	2,354		314		2,040		0.06
Pension settlement expense	49,128		11,947		37,181		1.20
Tax impact of stranded OCI benefit from TCJA for pension liability (b)	—		5,217		(5,217)		(0.17)
Acquisition/integration costs	806		241		565		0.03

The following table contains the calculation of Adjusted EPS:

	Three months ended September 30,				Nine months ended September 30,
Per share amounts (Basic)	2023		2022		2023		2022
Earnings per share (GAAP)	$	0.87	$	0.34	$	2.59	$	2.47
Adjustments, after tax:
Restructuring expenses, net	—		—		0.01		0.01
Foreign currency revaluation (gains)/losses (a)	—		(0.22)		(0.04)		(0.47)
CEO transition expenses	0.07		—		0.07		—
Inventory step-up impacting Cost of goods sold	0.03		—		0.03		—
Acquisition/integration costs	0.05		0.01		0.07		0.03
Dissolution of business relationships in Russia	—		(0.01)		—		0.06
Pension settlement expense	—		1.20		—		1.20
Withholding tax related to internal restructuring	—		—		0.10		—
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)	—		(0.17)		—		(0.17)
Adjusted Earnings per share (non-GAAP)	$	1.02	$	1.15	$	2.83	$	3.13

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. The Company calculates Net debt by subtracting Cash and cash equivalents from Total debt. Total debt is calculated by adding Long-term debt, Current maturities of long-term debt, and Notes and loans payable, if any.

The following table contains the calculation of net debt:

(in thousands)	September 30, 2023		December 31, 2022		September 30, 2022
Current maturities of long-term debt	$	27,246	$	—	$	—
Long-term debt	463,339		439,000		447,000
Total debt	490,585		439,000		447,000
Cash and cash equivalents	171,506		291,776		276,482
Net debt (non GAAP)	$	319,079	$	147,224	$	170,518

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt. The Company calculates net leverage ratio by subtracting cash and cash equivalents from total debt, and then dividing by trailing twelve months Adjusted EBITDA.

The calculation of net leverage ratio as of September 30, 2023 is as follows:

Total Company
	Twelve months ended		Nine months ended				Trailing twelve months ended
(in thousands)	December 31, 2022		September 30, 2022		September 30, 2023		September 30, 2023 (non-GAAP) (c)
Net income/(loss) (GAAP)	$	96,508	$	78,267	$	81,066	$	99,307
Interest expense/(income), net	14,000		11,336		10,049		12,713
Income tax expense	35,472		22,273		39,908		53,107
Depreciation and amortization expense	69,049		51,908		54,778		71,919
EBITDA (non-GAAP)	215,029		163,784		185,801		237,046
Restructuring expenses, net	106		268		227		65
Foreign currency revaluation (gains)/losses (a)	(9,829)		(20,579)		(1,720)		9,030
Dissolution of business relationships in Russia	2,275		2,354		—		(79)
CEO transition expenses	—		—		2,052		2,052
Pension settlement expense	49,128		49,128		—		—
Inventory step-up impacting Cost of goods sold	—		—		1,370		1,370
IP address sales	(3,420)		—		—		(3,420)
Acquisition/integration costs	1,057		806		2,818		3,069
Pre-tax (income) attributable to noncontrolling interest	(817)		(633)		(474)		(658)
Adjusted EBITDA (non-GAAP)	$	253,529	$	195,128	$	190,074	$	248,475

(in thousands, except for net leverage ratio)			September 30, 2023
Net debt (non-GAAP)			319,079
Trailing twelve months Adjusted EBITDA (non-GAAP)			248,475
Net leverage ratio (non-GAAP)			1.28

(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date. (b) Our Adjusted EPS excluded the benefit from the reclassification of stranded income tax effects caused by the TCJA associated with the US pension plan liability that was eliminated in September 2022, a one-time event that would not recur in the future. Such stranded income tax effect represented a one-time benefit that distorted the effective tax rate for the quarter and year-to-date ended September 30, 2022 , and would not be indicative of ongoing or expected future income tax rate at the Company. Management believes excluding pension settlement expense and its income tax impact, including the stranded income tax effects, from its Adjusted EBITDA and Adjusted EPS for the quarter and year-to-date ended September 30, 2022 would provide investors a transparent view and enhanced ability to better assess the Company’s ongoing operational and financial performance. (c) Calculated as amounts incurred during the twelve months ended December 31, 2022, less those incurred during the nine months ended September 30, 2022, plus those incurred during the nine months ended September 30, 2023.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We have market risk with respect to foreign currency exchange rates and interest rates. The market risk is the potential loss arising from adverse changes in these rates as discussed below.

Foreign Currency Exchange Rate Risk

We have manufacturing plants and sales transactions worldwide and therefore are subject to foreign currency risk. This risk is composed of both potential losses from the translation of foreign currency financial statements and the remeasurement of foreign currency transactions. To manage this risk, we periodically enter into forward exchange contracts either to hedge the net assets of a foreign investment or to provide an economic hedge against future cash flows. The total net assets of non-U.S. operations and long-term intercompany loans denominated in nonfunctional currencies subject to potential loss amount to approximately $~~682~~718.79 million. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to $6871.39 million. Furthermore, related to foreign currency transactions, we have exposure to various nonfunctional currency balances totaling $98154.69 million. This amount includes, on an absolute basis, exposures to assets and liabilities held in currencies other than our local entities’ functional currencies. On a net basis, we had $1755.6 million of foreign currency assets as of ~~September~~March 3031, ~~2023~~2024. As currency rates change, these nonfunctional currency balances are revalued, and the corresponding adjustment is recorded in the income statement. A hypothetical change of 10% in currency rates could result in an adjustment to the income statement of approximately $15.86 million. Actual results may differ from these estimates.

Interest Rate Risk

We are exposed to interest rate fluctuations with respect to our variable rate debt, depending on general economic conditions.

On ~~September~~March 3031, ~~2023~~2024, we had the following variable rate debt:

(in thousands, except interest rates)
Current Maturities of Long-Term Debt
Foreign Bank Debt	$	40
Long-term debt
Credit agreement with borrowings outstanding, net of fixed rate portion, at an end of period interest rate of 7.05% in 2023, due in 2028	$	111,000
Credit agreement with borrowings outstanding, net of fixed rate portion, at an end of period interest rate of 7.05% in 2024, due in 2028	$	79,000
Total	$	111,000
Foreign Bank Debt	39
Total	$	79,079

Assuming borrowings were outstanding for an entire year, an increase of one percentage point in weighted average interest rates would increase interest expense by $10.18 million. To manage interest rate risk, we may periodically enter into interest rate swap agreements to effectively fix the interest rates on variable debt to a specific rate for a period of time. Our current interest rate swap agreements expire in October 2024, which will result in a significant increase in our interest cost, which will be calculated using a floating rate based on the one-month term SOFR at that time, which was 5.33% as of March 31, 2024. (See Note 1314. Financial Instruments in the Notes to the Consolidated Financial Statements in Item 1, which is incorporated herein by reference).

Item 4. Controls and Procedures

a) Disclosure controls and procedures.

The principal executive officer and principal financial officer, based on their evaluation of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that the Company’s disclosure controls and procedures are effective for ensuring that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in filed or submitted reports is accumulated ~~and communicated to the Company’s management, including its principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.~~

and communicated to the Company’s management, including its principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

OnThere ~~August~~was ~~31,~~no ~~2023,~~change in the Company’s ~~acquired~~internal ~~Heimbach,~~control aover ~~privately~~financial reporting (as defined in Rule 13a-~~held~~15(f) ~~manufacturer~~and of15d-15(f) ~~paper~~under ~~machine~~the ~~clothing~~Securities ~~with~~Exchange ~~headquarters~~Act inof ~~Düren~~1934, ~~Germany.~~as ~~Management~~amended) during the last fiscal quarter that has ~~begun~~materially ~~integrating~~affected, ~~Heimbach~~or ~~into~~is ~~the~~reasonably MClikely ~~segment'~~to materially affect, the Company’s ~~systems~~internal control over financial reporting.

and processes; however, during the third quarter ending September 30, 2023, management has excluded Heimbach from its assessment of effectiveness of the Company’s internal control over financial reporting.

Other than the acquisition of Heimbach, there was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The information set forth above under Note 1516. Commitments and Contingencies in Item 1, Notes to Consolidated Financial Statements is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2022, other than the addition of the risks below related to our acquisition of Heimbach~~2023. ~~For all other risk factors, please refer to our Annual Report on Form 10-K for the year ended December 31, 2022.~~

Our acquisition of Heimbach involves inherent risks, and presents financial, managerial and operational challenges that may adversely affect our operating results and financial condition.

Our growth strategy includes acquisitions. Acquisitions involve various inherent risks, such as our ability to assess accurately the value, strengths, weaknesses, internal controls, contingent and other liabilities and potential profitability of Heimbach.

Heimbach was a privately held company that only closed its books and records annually on December 31st. Interim financial information was limited and reproducing full historical financial records may be difficult. As the Company integrates Heimbach, management could encounter material differences between the accounting policies of the two companies or the financial results of Heimbach for the periods after the fiscal year 2022 audited financial statements, including additional liabilities or other financial information that was not available during due diligence or at or in the initial period after the closing of the acquisition that, had we known, could have resulted in changes to financial projections, assumptions and estimates used in the fair value of assets acquired and liabilities assumed, assessments used to determine the applicability of certain SEC disclosure requirements or the expected benefit of the transaction.

While we conducted financial and other due diligence in connection with this acquisition and we generally seek some form of limited protection, such as warranties from the seller, insurance coverage, and placing a portion of the purchase price in escrow to cover potential tax liabilities, Heimbach may have liabilities that are not accurately assessed or brought to our attention at the time of the acquisition. Further, indemnities, insurance or escrow arrangements may not fully cover such matters.

The acquisition may present financial, managerial and operational challenges, including:

•Increased foreign operations, often with unique issues relating to corporate culture, compliance with legal and regulatory requirements and other challenges;

•Assumption of known and unknown liabilities, including environmental liabilities, and exposure to litigation;

•Increased levels of debt or dilution to existing stockholders;

•New and proposed regulations limiting the enforcement of noncompetition and nonsolicitation agreements;

•Production delays associated with consolidating acquired facilities and manufacturing operations;

•Potential cybersecurity risks, as acquired systems may not possess the appropriate security measures.

We cannot assure that all potential risks or liabilities are adequately discovered, disclosed, or understood in each instance. In addition, internal controls over financial reporting of acquired companies may not be compliant with required standards. Issues may exist that could rise to the level of significant deficiencies or, in some cases, material

weaknesses, particularly with respect to foreign companies or non-public U.S. companies. Customer dissatisfaction or performance problems with an acquired business, technology, service or product could also have a material adverse effect on our reputation and business.

In connection with our acquisition, we may incur significant transaction costs. We are required to expense such transaction costs as incurred, which may have a material adverse impact on our financial results.

We may fail to realize all of the anticipated benefits of the acquisition of Heimbach or those benefits may take longer to realize than expected.

We are devoting significant management attention to integrating the business practices and operations of Heimbach. We may experience disruptions to our business and, if implemented ineffectively, it could restrict the realization of the full expected benefits of the acquisition. The failure to meet the challenges involved in the integration process and to realize the anticipated benefits of the acquisition of Heimbach could cause an interruption of, or loss of, momentum in our operations and could adversely affect our business, financial condition and results of operations.

Difficulties in the integration of the acquired business may include consolidating the operations, processes and systems of the acquired business, retaining and motivating key management and employees, and integrating existing business relationships with suppliers and customers. Even if integration is successful, the financial and operational results may differ materially from our assumptions and forecasts due to unforeseen expenses, delays, conditions and liabilities. In addition, we may incur unanticipated costs or expenses following an acquisition, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, and other liabilities.

Furthermore, the acquisition of Heimbach, may result in material unanticipated problems, expenses, charges, liabilities, competitive responses, loss of customers and other business relationships, and diversion of management’s attention. Additional integration challenges may include difficulty in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition; difficulties in the integration of operations and systems, including pricing and marketing strategies; and difficulties in conforming standards, controls, procedures, financial reporting and accounting and other policies, business cultures and compensation structures.

Many of these factors will be outside of our control and any one of them could result in increased costs, including restructuring charges, decreases in the amount of expected revenues and diversion of management’s time and energy, which could adversely affect our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We made no share purchases during the first ~~nine~~quarter ~~months~~ of ~~2023~~2024.

On October 25, 2021, the Company's Board of Directors authorized the Company to repurchase shares of up to $200 million through open market purchases, privately negotiated transactions or otherwise, and to determine the prices, times and amounts. The program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company's discretion. The share repurchase program does not have an expiration date. The timing and amount of any share repurchases will be based on the Company’s liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and capital structure. In total, the Company has repurchased 1,308,003 shares for a total cost of $109.4M, of which 1,022,717 shares were repurchased in 2022 for $85.1 million and 285,286 shares were repurchased in 2021 for $24.3 million. We currently remain authorized to repurchase shares of up to $90.6 million.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Securities Trading Plans of Directors and Executive Officers

During the ~~nine~~three months ended ~~September 30~~March 31, ~~2023~~2024, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Albany International Corp. securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

4130

Item 6. Exhibits

Exhibit No.			Description
10.3			Kleveland Employment Agreement
10(n)(viii)			Form of 2024 Annual Performance Bonus Award Agreement
10.4			Special Incentive Award Agreement
10(m)(xxi)			Form of 2024 Multi-Year Performance Bonus Agreement
10(k)(xx)			$800 million Five-Year Revolving Credit Facility Agreement among Albany International Corp., the other Borrowers named therein, the Lenders Party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, dated as of August 16, 2023.
10(l)(xvi)			Form of 2024 Restricted Stock Unit Award Agreement
10(l)(xvii)			Form of 2024 Non-Employee Director Restricted Stock Unit Award Agreement
31.1			Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
31.2			Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
32.1			Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
101.INS			XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			XBRL Taxonomy Extension Schema Document.
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB			XBRL Taxonomy Extension Label Linkbase Document.
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.
104			Cover page formatted as Inline XBRL and contained in Exhibit 101

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ALBANY INTERNATIONAL CORP.
		(Registrant)
Date: November 6, 2023	By	/s/ Robert D. Starr
Date: April 29, 2024	By	/s/ Robert D. Starr
		Robert D. StarrExecutive Vice President and Chief Financial Officer(Principal Financial Officer)

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