Albany International Reports First-Quarter Earnings of 40 Cents Per Share Before Cumulative Effect of Accounting Change

FIRST-QUARTER HIGHLIGHTS



* Net income per share before the cumulative effect of a change in

accounting principle (FAS No. 133) was $0.40, in comparison to $0.33 in

the first quarter of 2000. Including the cumulative effect of the

change in accounting principle, earnings were $0.36 per share in the

first quarter of 2001.

* Net sales declined 3.3 percent, compared to the first quarter of 2000

and increased 1.8 percent, excluding the effects of the stronger U.S.

dollar.

* Operating income increased 9.5 percent over the first quarter of last

year to $30.7 million. Excluding the effects of changes in currency

translation rates, operating income increased 17.4 percent over last

year.

* Net income before the cumulative effect of a change in accounting

principle increased to $12.3 million, a 23.2 percent increase over the

first quarter of last year.

* Selling, technical, general, and research expenses declined 4.8 percent

compared to the first quarter of 2000.

* Debt was reduced by $16.7 million during the quarter.

* Free cash flow for the quarter improved to $28.9 million, or $0.94 per

share, compared to $17.0 million, or $0.56 per share, for the same

period last year.



Apr 26, 2001, 01:00 ET from Albany International Corp.

    ALBANY, N.Y., April 26 /PRNewswire/ -- Albany International Corp.
 (NYSE:   AIN) reported first-quarter earnings of $0.40 per share, before the
 cumulative effect of a change in accounting principle, compared to $0.33 per
 share for the same period last year.  Net sales declined $7.2 million to
 $208.5 million, a decrease of 3.3 percent as compared to the first quarter of
 2000.  Excluding the effects of the stronger U.S. dollar, net sales would have
 increased 1.8 percent. Operating income improved 9.5 percent and was 14.7
 percent of net sales, reflecting the impact of cost reduction initiatives
 completed in 2000.  Excluding the effects of changes in currency translation
 rates, operating income would have increased 17.4 percent.  Selling,
 technical, general, and research expenses declined 4.8 percent compared to the
 same period last year.
     Gross margin was 41.8 percent, compared to 40.5 percent in the first
 quarter of last year.  Depreciation and amortization were $14.7 million
 combined, compared to $16.1 million for the same period last year.
     Effective January 1, 2001, the Company adopted the provisions of Financial
 Accounting Standards No. 133, "Accounting for Derivative Instruments and
 Hedging Activities."  The cumulative effect of adopting this Standard reduced
 first-quarter earnings $0.04 per share.  This charge was related to a lease of
 manufacturing facilities in Italy.
     Total debt decreased $16.7 million for the quarter.  The Company improved
 its leverage ratio as defined in its principal credit agreements to 2.58 at
 the end of the first quarter as compared to 2.68 at the end of 2000.
     The Company continued to generate substantial cash flow.  Free cash flow
 (defined as cash provided by operations, minus capital expenditures and cash
 dividends) was $28.9 million, or $0.94 per share, up from $17.0 million or
 $0.56 per share in the first quarter of 2000.
 
     Comments on Operations
     President and Chief Executive Officer Frank Schmeler commented, "We are
 pleased with the first-quarter results in both our paper machine clothing
 (PMC) and non-PMC markets, in light of the challenging market conditions from
 weak economies in several countries.
     "Global sales of PMC were affected by market conditions and currency
 fluctuations.  However, our PMC markets outside of the U.S. did improve in
 local currencies over the first quarter of last year.
     "Our businesses outside of PMC, including High Performance Doors and
 Engineered Products, provided results in line with expectations.  New product
 introductions in all markets were on plan, and will positively affect both
 sales and earnings later this year.
     "In spite of lower sales, the continuing efforts by all of our employees
 in cost reductions and efficiency improvements in every area of our business
 improved our operating results.  During the quarter, we met with our key
 managers from global operations to continue our initiatives in cost reduction,
 process improvement, working capital improvement, and revenue enhancement.  We
 will maintain our focus on these important activities."
 
     Regional Reports
     United States
     Our customers' paper and paperboard operating rates averaged approximately
 89 percent in the first quarter of 2001, compared to 95 percent during the
 same period last year.  As a result of this weakness, our net sales of PMC in
 the United States dropped 2.4 percent as compared to the first quarter of
 2000.
     During this challenging first quarter in the U.S., we reduced inventories
 and accounts receivable.  Continued emphasis is being placed on productivity
 improvements, product quality, and cost reductions in non-manufacturing areas.
 In addition, new product introduction accelerated in the quarter, contributing
 to improved performance for our customers.  The combined impact of these
 efforts improved our operating income.
 
     Canada, Pacific, and Latin America
     PMC sales in U.S. dollars were down 2.7 percent as compared to the same
 period last year, due mainly to weaker local currencies in Canada and
 Australia and lower sales in Asia.  Despite lower sales, operating income
 improved when compared to the first quarter of 2000.
     In Canada, paper industry consolidation continues with recent
 announcements of the sale of Pacifica Papers Inc. to Norske Skog Canada and of
 Alliance Forest Products Inc. to Bowater Inc.  Canadian operating rates
 remained high in the first quarter, but most producers have announced their
 plans to take downtime in the second and third quarters.  This also applies to
 other markets included in the Pacific and Latin American regions.
     In Asia, first quarter results were mixed.  Sales increased in Korea,
 Japan, and Malaysia, and declined in China and Indonesia as a result of fewer
 new machine start-ups in China and reduced paper production in Indonesia.
 First-quarter sales within the Asian region were down 3.9 percent as compared
 to the first quarter of 2000.
     Looking ahead, cost reductions, working capital improvements, and revenue
 enhancements, including product upgrades, will continue to receive a high
 level of focus.
 
     Europe
     The momentum gained from the strong finish in 2000 continued into 2001.
 First-quarter results for our European operations continued to improve in all
 business segments.  In local currencies, sales were up 5.8 percent over the
 same period last year.  Including the currency translation effect of the Euro,
 sales in US dollars declined 1.6 percent as compared to the first quarter of
 last year.
     After a strong year in 2000 for the European paper industry, we began to
 see a slowdown in certain paper grades in the first quarter of this year,
 including kraft, linerboard, and lightweight-coated grades in some geographic
 regions.  Reports of scheduled downtime to control inventories became more
 common during the quarter.
     A modest price increase was announced in the last quarter of 2000 and
 should improve revenues as we move into the second quarter.  New products and
 operational efficiencies continue to provide the basic strength for all of our
 European operations.
     Despite the slowdown in the paper and paperboard industries and a weak
 Euro, we feel our products and operating efficiencies should position us well
 for the future.
 
     Looking Ahead
     Mr. Schmeler commented, "Weak economic conditions, paper industry
 slowdowns and mill closures, currency fluctuations, and other factors will
 continue to impact markets served in the second and third quarters.  However,
 our management team will focus on those activities within our control, which
 should continue to have a positive impact on shareholder returns.
     "To improve revenues through value pricing opportunities, we continued to
 promote value-added products in the first quarter and obtained modest price
 improvements.  Production efficiencies and cost reductions provided the first
 improvement in gross margin we have seen in several quarters and selling,
 technical, general, and research expenses were reduced as a percentage of
 sales.  These activities will continue to have a positive impact on our
 business.  We are continuing our efforts to improve the tax efficiency of our
 global organization, which may result in a lower tax rate for the full year
 2001 than the 40 percent in the first quarter."
 
     The Company plans a live Webcast to discuss first-quarter earnings today
 at 9:00 a.m. EDT.  For access, go to http://www.shareholder.com/albint.
 
     Albany International is the world's largest producer of paper machine
 clothing and high performance doors with manufacturing plants in 15 countries
 and sales worldwide.  Additional information about the Company's businesses
 and products is available at http://www.albint.com.
 
     Forward-looking statements in this release, including statements about
 future earnings, pricing, markets, cost reductions, integration, new products,
 paper industry consolidation and outlook, tax rate, inventory and accounts
 receivable reduction, capital expenditures, and depreciation, are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Such statements are based on current expectations and are
 subject to various risks and uncertainties, including, but not limited to,
 economic conditions affecting the paper industry and other risks and
 uncertainties set forth in the Company's 2000 Annual Report to Shareholders
 and subsequent filings with the Securities and Exchange Commission.
 
                             Albany International Corp.
                         Consolidated Statements of Income
                                                            Quarters ended
     (in thousands, except per share data)                     March 31,
     (unaudited)                                        2001              2000
 
     Net sales                                      $208,538          $215,754
      Cost of goods sold                             121,413           128,434
      Selling, technical, general and
       research expenses                              56,404            59,277
 
     Operating income                                 30,721            28,043
      Interest expense, net                            8,986            10,396
      Other expense, net                               1,196               455
 
     Income before income taxes                       20,539            17,192
      Income taxes                                     8,216             7,393
 
     Income before associated companies               12,323             9,799
       Equity in earnings of associated companies         10               208
     Net income before cumulative effect of
      a change in accounting principle                12,333            10,007
      Cumulative effect of a change in
       accounting principle, net of taxes             (1,129)               --
 
     Net income                                      $11,204           $10,007
 
     Earnings per share -- basic:
      Net income before cumulative effect
       of a change in accounting principle             $0.40             $0.33
      Cumulative effect of a change in
       accounting principle                            (0.04)             0.00
      Net income                                       $0.36             $0.33
 
     Earnings per share -- diluted:
      Net income before cumulative effect
       of a change in accounting principle             $0.40             $0.33
      Cumulative effect of a change in
       accounting principle                            (0.04)             0.00
      Net income                                       $0.36             $0.33
 
     Average number of shares used in basic
      earnings per share computations                 30,846            30,504
     Average number of shares used in
      diluted earnings per share computations         30,973            30,504
 
 
                          Consolidated Balance Sheets
 
                                                       At               At
                                                    March 31,      December 31,
     (in thousands)                                     2001              2000
                                                  (unaudited)
     Assets
      Cash and cash equivalents                       $3,445            $5,359
      Accounts receivable, net                       221,157           236,810
      Inventories                                    213,398           216,873
      Deferred taxes and prepaid expenses             42,861            35,245
 
       Total current assets                          480,861           494,287
      Property, plant and equipment, net             368,886           387,658
      Deferred taxes                                  18,395            19,095
      Intangibles                                    149,528           161,709
      Other assets                                    47,999            49,503
 
                                                  $1,065,669        $1,112,252
 
     Liabilities and Shareholders' Equity
      Current liabilities                           $202,711          $222,034
      Long-term debt                                 385,386           398,087
      Other noncurrent liabilities                   142,351           129,741
      Deferred taxes and other credits                33,843            37,473
      Shareholders' equity                           301,378           324,917
 
                                                  $1,065,669        $1,112,252
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X17393143
 
 

SOURCE Albany International Corp.
    ALBANY, N.Y., April 26 /PRNewswire/ -- Albany International Corp.
 (NYSE:   AIN) reported first-quarter earnings of $0.40 per share, before the
 cumulative effect of a change in accounting principle, compared to $0.33 per
 share for the same period last year.  Net sales declined $7.2 million to
 $208.5 million, a decrease of 3.3 percent as compared to the first quarter of
 2000.  Excluding the effects of the stronger U.S. dollar, net sales would have
 increased 1.8 percent. Operating income improved 9.5 percent and was 14.7
 percent of net sales, reflecting the impact of cost reduction initiatives
 completed in 2000.  Excluding the effects of changes in currency translation
 rates, operating income would have increased 17.4 percent.  Selling,
 technical, general, and research expenses declined 4.8 percent compared to the
 same period last year.
     Gross margin was 41.8 percent, compared to 40.5 percent in the first
 quarter of last year.  Depreciation and amortization were $14.7 million
 combined, compared to $16.1 million for the same period last year.
     Effective January 1, 2001, the Company adopted the provisions of Financial
 Accounting Standards No. 133, "Accounting for Derivative Instruments and
 Hedging Activities."  The cumulative effect of adopting this Standard reduced
 first-quarter earnings $0.04 per share.  This charge was related to a lease of
 manufacturing facilities in Italy.
     Total debt decreased $16.7 million for the quarter.  The Company improved
 its leverage ratio as defined in its principal credit agreements to 2.58 at
 the end of the first quarter as compared to 2.68 at the end of 2000.
     The Company continued to generate substantial cash flow.  Free cash flow
 (defined as cash provided by operations, minus capital expenditures and cash
 dividends) was $28.9 million, or $0.94 per share, up from $17.0 million or
 $0.56 per share in the first quarter of 2000.
 
     Comments on Operations
     President and Chief Executive Officer Frank Schmeler commented, "We are
 pleased with the first-quarter results in both our paper machine clothing
 (PMC) and non-PMC markets, in light of the challenging market conditions from
 weak economies in several countries.
     "Global sales of PMC were affected by market conditions and currency
 fluctuations.  However, our PMC markets outside of the U.S. did improve in
 local currencies over the first quarter of last year.
     "Our businesses outside of PMC, including High Performance Doors and
 Engineered Products, provided results in line with expectations.  New product
 introductions in all markets were on plan, and will positively affect both
 sales and earnings later this year.
     "In spite of lower sales, the continuing efforts by all of our employees
 in cost reductions and efficiency improvements in every area of our business
 improved our operating results.  During the quarter, we met with our key
 managers from global operations to continue our initiatives in cost reduction,
 process improvement, working capital improvement, and revenue enhancement.  We
 will maintain our focus on these important activities."
 
     Regional Reports
     United States
     Our customers' paper and paperboard operating rates averaged approximately
 89 percent in the first quarter of 2001, compared to 95 percent during the
 same period last year.  As a result of this weakness, our net sales of PMC in
 the United States dropped 2.4 percent as compared to the first quarter of
 2000.
     During this challenging first quarter in the U.S., we reduced inventories
 and accounts receivable.  Continued emphasis is being placed on productivity
 improvements, product quality, and cost reductions in non-manufacturing areas.
 In addition, new product introduction accelerated in the quarter, contributing
 to improved performance for our customers.  The combined impact of these
 efforts improved our operating income.
 
     Canada, Pacific, and Latin America
     PMC sales in U.S. dollars were down 2.7 percent as compared to the same
 period last year, due mainly to weaker local currencies in Canada and
 Australia and lower sales in Asia.  Despite lower sales, operating income
 improved when compared to the first quarter of 2000.
     In Canada, paper industry consolidation continues with recent
 announcements of the sale of Pacifica Papers Inc. to Norske Skog Canada and of
 Alliance Forest Products Inc. to Bowater Inc.  Canadian operating rates
 remained high in the first quarter, but most producers have announced their
 plans to take downtime in the second and third quarters.  This also applies to
 other markets included in the Pacific and Latin American regions.
     In Asia, first quarter results were mixed.  Sales increased in Korea,
 Japan, and Malaysia, and declined in China and Indonesia as a result of fewer
 new machine start-ups in China and reduced paper production in Indonesia.
 First-quarter sales within the Asian region were down 3.9 percent as compared
 to the first quarter of 2000.
     Looking ahead, cost reductions, working capital improvements, and revenue
 enhancements, including product upgrades, will continue to receive a high
 level of focus.
 
     Europe
     The momentum gained from the strong finish in 2000 continued into 2001.
 First-quarter results for our European operations continued to improve in all
 business segments.  In local currencies, sales were up 5.8 percent over the
 same period last year.  Including the currency translation effect of the Euro,
 sales in US dollars declined 1.6 percent as compared to the first quarter of
 last year.
     After a strong year in 2000 for the European paper industry, we began to
 see a slowdown in certain paper grades in the first quarter of this year,
 including kraft, linerboard, and lightweight-coated grades in some geographic
 regions.  Reports of scheduled downtime to control inventories became more
 common during the quarter.
     A modest price increase was announced in the last quarter of 2000 and
 should improve revenues as we move into the second quarter.  New products and
 operational efficiencies continue to provide the basic strength for all of our
 European operations.
     Despite the slowdown in the paper and paperboard industries and a weak
 Euro, we feel our products and operating efficiencies should position us well
 for the future.
 
     Looking Ahead
     Mr. Schmeler commented, "Weak economic conditions, paper industry
 slowdowns and mill closures, currency fluctuations, and other factors will
 continue to impact markets served in the second and third quarters.  However,
 our management team will focus on those activities within our control, which
 should continue to have a positive impact on shareholder returns.
     "To improve revenues through value pricing opportunities, we continued to
 promote value-added products in the first quarter and obtained modest price
 improvements.  Production efficiencies and cost reductions provided the first
 improvement in gross margin we have seen in several quarters and selling,
 technical, general, and research expenses were reduced as a percentage of
 sales.  These activities will continue to have a positive impact on our
 business.  We are continuing our efforts to improve the tax efficiency of our
 global organization, which may result in a lower tax rate for the full year
 2001 than the 40 percent in the first quarter."
 
     The Company plans a live Webcast to discuss first-quarter earnings today
 at 9:00 a.m. EDT.  For access, go to http://www.shareholder.com/albint.
 
     Albany International is the world's largest producer of paper machine
 clothing and high performance doors with manufacturing plants in 15 countries
 and sales worldwide.  Additional information about the Company's businesses
 and products is available at http://www.albint.com.
 
     Forward-looking statements in this release, including statements about
 future earnings, pricing, markets, cost reductions, integration, new products,
 paper industry consolidation and outlook, tax rate, inventory and accounts
 receivable reduction, capital expenditures, and depreciation, are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Such statements are based on current expectations and are
 subject to various risks and uncertainties, including, but not limited to,
 economic conditions affecting the paper industry and other risks and
 uncertainties set forth in the Company's 2000 Annual Report to Shareholders
 and subsequent filings with the Securities and Exchange Commission.
 
                             Albany International Corp.
                         Consolidated Statements of Income
                                                            Quarters ended
     (in thousands, except per share data)                     March 31,
     (unaudited)                                        2001              2000
 
     Net sales                                      $208,538          $215,754
      Cost of goods sold                             121,413           128,434
      Selling, technical, general and
       research expenses                              56,404            59,277
 
     Operating income                                 30,721            28,043
      Interest expense, net                            8,986            10,396
      Other expense, net                               1,196               455
 
     Income before income taxes                       20,539            17,192
      Income taxes                                     8,216             7,393
 
     Income before associated companies               12,323             9,799
       Equity in earnings of associated companies         10               208
     Net income before cumulative effect of
      a change in accounting principle                12,333            10,007
      Cumulative effect of a change in
       accounting principle, net of taxes             (1,129)               --
 
     Net income                                      $11,204           $10,007
 
     Earnings per share -- basic:
      Net income before cumulative effect
       of a change in accounting principle             $0.40             $0.33
      Cumulative effect of a change in
       accounting principle                            (0.04)             0.00
      Net income                                       $0.36             $0.33
 
     Earnings per share -- diluted:
      Net income before cumulative effect
       of a change in accounting principle             $0.40             $0.33
      Cumulative effect of a change in
       accounting principle                            (0.04)             0.00
      Net income                                       $0.36             $0.33
 
     Average number of shares used in basic
      earnings per share computations                 30,846            30,504
     Average number of shares used in
      diluted earnings per share computations         30,973            30,504
 
 
                          Consolidated Balance Sheets
 
                                                       At               At
                                                    March 31,      December 31,
     (in thousands)                                     2001              2000
                                                  (unaudited)
     Assets
      Cash and cash equivalents                       $3,445            $5,359
      Accounts receivable, net                       221,157           236,810
      Inventories                                    213,398           216,873
      Deferred taxes and prepaid expenses             42,861            35,245
 
       Total current assets                          480,861           494,287
      Property, plant and equipment, net             368,886           387,658
      Deferred taxes                                  18,395            19,095
      Intangibles                                    149,528           161,709
      Other assets                                    47,999            49,503
 
                                                  $1,065,669        $1,112,252
 
     Liabilities and Shareholders' Equity
      Current liabilities                           $202,711          $222,034
      Long-term debt                                 385,386           398,087
      Other noncurrent liabilities                   142,351           129,741
      Deferred taxes and other credits                33,843            37,473
      Shareholders' equity                           301,378           324,917
 
                                                  $1,065,669        $1,112,252
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X17393143
 
 SOURCE  Albany International Corp.