SEC Filing | Albany International Corp

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: SEPTEMBER 30, 2000 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 0-16214 ALBANY INTERNATIONAL CORP. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 14-0462060 - ------------------------------- --------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1373 BROADWAY, ALBANY, NEW YORK 12204 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 518-445-2200 ------------ 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 X No --- --- The registrant had 24,851,127 shares of Class A Common Stock and 5,869,457 shares of Class B Common Stock outstanding as of September 30, 2000.

ALBANY INTERNATIONAL CORP. INDEX Page No. -------- Part I Financial information Item 1. Financial Statements Consolidated statements of income and retained earnings - three and nine months ended September 30, 2000 and 1999 1 Consolidated balance sheets - September 30, 2000 and December 31, 1999 2 Consolidated statements of cash flows - nine months ended September 30, 2000 and 1999 3 Notes to consolidated financial statements 4-6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 Part II Other information Item 6. Exhibits and Reports on Form 8-K 10

Item 1. Financial Statements ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (unaudited) (in thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2000 1999 2000 1999 - ------------------- ----------------- ----------------- ----------------- $201,081 $196,566 Net sales $629,822 $553,960 121,661 118,197 Cost of goods sold 377,817 326,849 - ------------------- ----------------- ----------------- ----------------- 79,420 78,369 Gross profit 252,005 227,111 55,932 54,474 Selling, technical and general expenses 172,675 161,030 - ------------------- ----------------- ----------------- ----------------- 23,488 23,895 Operating income 79,330 66,081 10,645 6,488 Interest expense, net 31,374 15,227 (909) (555) Other (income) expense, net 923 (231) - ------------------- ----------------- ----------------- ----------------- 13,752 17,962 Income before income taxes 47,033 51,085 4,502 7,508 Income taxes 18,813 20,426 - ------------------- ----------------- ----------------- ----------------- 9,250 10,454 Income before associated companies 28,220 30,659 93 213 Equity in earnings of associated companies 534 513 - ------------------- ----------------- ----------------- ----------------- 9,343 10,667 Net income 28,754 31,172 295,965 276,091 Retained earnings, beginning of period 276,554 255,586 - - Less dividends - - - ------------------- ----------------- ----------------- ----------------- $305,308 $286,758 Retained earnings, end of period $305,308 $286,758 =================== ================= ================= ================= $0.30 $0.35 Net income per share $0.94 $1.03 =================== ================= ================= ================= $0.30 $0.35 Diluted net income per share $0.94 $1.02 =================== ================= ================= ================= - - Cash dividends per common share - - =================== ================= ================= ================= 30,671 30,372 Weighted average number of shares 30,592 30,310 =================== ================= ================= ================= The accompanying notes are an integral part of the financial statements. 1

ALBANY INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) September 30, December 31, 2000 1999 -------------------- ----------------------- ASSETS Cash and cash equivalents $3,741 $7,025 Accounts receivable, net 219,196 235,303 Inventories: Finished goods 130,343 131,749 Work in process 58,827 61,200 Raw material and supplies 44,094 42,733 -------------------- ----------------------- 233,264 235,682 Deferred taxes and prepaid expenses 32,911 30,063 -------------------- ----------------------- Total current assets 489,112 508,073 Property, plant and equipment, net 385,867 435,172 Investments in associated companies 4,210 4,389 Intangibles 160,793 197,953 Deferred taxes 9,791 10,871 Other assets 47,577 50,384 -------------------- ----------------------- Total assets $1,097,350 $1,206,842 ==================== ======================= LIABILITIES AND SHAREHOLDERS' EQUITY Notes and loans payable $33,398 $36,839 Accounts payable 30,954 42,647 Accrued liabilities 87,651 86,008 Current maturities of long-term debt 4,816 6,174 Income taxes payable and deferred 5,924 5,296 -------------------- ----------------------- Total current liabilities 162,743 176,964 Long-term debt 474,820 521,257 Other noncurrent liabilities 125,573 124,847 Deferred taxes and other credits 31,464 58,367 -------------------- ----------------------- Total liabilities 794,600 881,435 -------------------- ----------------------- SHAREHOLDERS' EQUITY Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued -- -- Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; issued 27,052,359 in 2000 and 26,803,721 in 1999 27 27 Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 5,869,457 in 2000 and 1999 6 6 Additional paid in capital 222,947 219,443 Retained earnings 305,308 276,554 Accumulated items of other comprehensive income: Translation adjustments (175,897) (120,877) Pension liability adjustment (3,903) (3,903) -------------------- ----------------------- 348,488 371,250 Less treasury stock (Class A), at cost (2,201,232 shares in 2000 and 2,205,992 shares in 1999) 45,738 45,843 -------------------- ----------------------- Total shareholders' equity 302,750 325,407 -------------------- ----------------------- Total liabilities and shareholders' equity $1,097,350 $1,206,842 ==================== ======================= The accompanying notes are an integral part of the financial statements. 2

ALBANY INTERNATIONAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Nine Months Ended September 30, 2000 1999 -------- -------- OPERATING ACTIVITIES Net income $28,754 $31,172 Adjustments to reconcile net cash provided by operating activities: Equity in earnings of associated companies (534) (513) Depreciation and amortization 47,777 38,662 Provision for deferred income taxes, other credits and long-term liabilities (1,088) 6,335 Increase in value of life insurance, net of premiums paid (420) (869) Unrealized currency transaction gains (2,659) (3,206) Loss on disposition of assets 1,868 31 Shares contributed to ESOP 3,611 3,489 Debt issuance costs -- (4,905) Changes in operating assets and liabilities: Accounts receivable 18,766 4,810 Inventories 2,418 6,573 Prepaid expenses (2,438) (3,121) Accounts payable (11,694) (5,402) Accrued liabilities (1,759) (1,203) Income taxes payable 780 (4,792) Other, net 1,723 (303) -------- -------- Net cash provided by operating activities 85,105 66,758 -------- -------- INVESTING ACTIVITIES Purchases of property, plant and equipment (26,943) (23,255) Purchased software (925) (1,369) Proceeds from sale of assets 8,348 60 Acquisitions, net of cash acquired (1,037) (241,591) Loan to other company -- (3,000) Premiums paid for life insurance policies (1,161) (1,187) Distributions from associated companies -- 75 -------- -------- Net cash used in investing activities (21,718) (270,267) -------- -------- FINANCING ACTIVITIES Proceeds from borrowings 19,118 573,306 Principal payments on debt (69,026) (336,828) Proceeds from options exercised -- 165 -------- -------- Net cash used in financing activities (49,908) 236,643 -------- -------- Effect of exchange rate changes on cash flows (16,763) (14,019) -------- -------- (Decrease)/increase in cash and cash equivalents (3,284) 19,115 Cash and cash equivalents at beginning of year 7,025 5,868 -------- -------- Cash and cash equivalents at end of period $3,741 $24,983 ======== ======== The accompanying notes are an integral part of the financial statements. 3

ALBANY INTERNATIONAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. MANAGEMENT OPINION In the opinion of management the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal, recurring adjustments, necessary for a fair presentation of results for such periods. The results for any interim period are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. These consolidated financial statements should be read in conjunction with financial statements and notes thereto for the year ended December 31, 1999. 2. ACCOUNTING POLICIES Gains or losses on forward exchange contracts that function as an economic hedge against currency fluctuation effects on future revenue streams are recorded in "Other (income) expense, net". Gains or losses on forward exchange contracts that are designated a hedge of a foreign operation's net assets and/or long-term intercompany loans are recorded in "Translation adjustments", a separate component of shareholders' equity. These contracts reduce the risk of currency exposure on foreign currency net assets and do not exceed the foreign currency amount being hedged. To the extent the above criteria are not met, or the related assets are sold, extinguished, or terminated, activity associated with such hedges is recorded in "Other (income) expense, net". All open positions on forward exchange contracts are valued at fair value using the estimated forward rate of a matching contract. Gains or losses on futures contracts have been recorded in "Other (income) expense, net". Open positions have been valued at fair value using quoted market rates. Gains or losses on interest rate swap agreements, that are entered into to hedge part of the Company's interest rate exposure, are recorded in "Interest expense, net". Unrealized gains or losses related to changes in the fair value of the contracts are not recognized. In June 1998, Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities", was issued and amended in June 2000 by Financial Accounting Standard No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities". These Standards establish a new model for accounting for derivatives and hedging activities. All derivatives will be required to be recognized as either assets or liabilities and measured at fair value. Each hedging relationship must be designated and accounted for pursuant to this Standard. Since the Company already records forward exchange and futures contracts at fair value, this Standard is not expected to have a material effect on the accounting for these transactions. Interest rate swaps that qualify as cash flow hedges will be measured at fair value with the initial asset or liability recognized in "Other comprehensive income". Subsequently, amounts will be reclassified to "Interest expense, net" in accordance with this Standard. The Company plans to adopt this Standard on its effective date of January 1, 2001. In December 1999, The Securities Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements". SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. The Company is required to adopt SAB 101 in the fourth quarter of 2000. Management does not expect the adoption of SAB 101 to have a material effect on the Company's financial condition or results of operations. In March 2000, the Financial Accounting Standards Board issued Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Involving Stock Compensation--an Interpretation of APB Opinion No. 25". FIN 44 clarifies the application of APB Opinion No. 25 and, among other issues, clarifies the following: the definition of an employee for purposes of applying APB Opinion No. 25; the criteria for determining whether a plan qualifies as a non compensatory plan; the accounting consequences of various modifications to the terms of previously fixed stock options or awards; and the accounting for an exchange of stock compensation awards in a business combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44 cover specific events that occurred after either December 15, 1998 or January 12, 2000. The Company's method of accounting for stock compensation is in accordance with FIN 44. 3. OTHER (INCOME) EXPENSE, NET Included in other (income) expense, net for the nine months ended September 30 are: currency transactions, $2.9 million income in 2000 and $3.2 million income in 1999; amortization of debt issuance costs 4

and loan origination fees, $1.8 million in 2000 and $0.9 million in 1999 and other miscellaneous expenses, none of which are significant in 2000 and 1999. Included in other (income) expense, net for the three months ended September 30 are: currency transactions, $2.8 million income in 2000 and $1.3 million income in 1999; amortization of debt issuance costs and loan origination fees, $0.7 million in 2000 and $0.4 million in 1999 and other miscellaneous expenses, none of which are significant, in 2000 and 1999. 4. EARNINGS PER SHARE Net income per share is computed using the weighted average number of shares of Class A and Class B Common Stock outstanding during the period. Diluted net income per share includes the effect of all potentially dilutive securities. The amounts used in computing earnings per share, including the effect on income and the weighted average number of shares of potentially dilutive securities, are as follows: - ----------------------------------------------------------------------------------------------------- Nine Months Ended Three Months Ended September 30, September 30, (in thousands) 2000 1999 2000 1999 - ----------------------------------------------------------------------------------------------------- INCOME AVAILABLE TO COMMON STOCKHOLDERS: Income available to common stockholders $28,754 $31,172 $ 9,343 $10,667 ------- ------- ------- ------- WEIGHTED AVERAGE NUMBER OF SHARES: Weighted average number of shares used in net income per share 30,592 30,310 30,671 30,372 Effect of dilutive securities: Stock options -- 202 -- 75 ------- ------- ------- ------- Weighted average number of shares used in diluted net income per share 30,592 30,512 30,671 30,447 ------- ------- ------- ------- For all periods ended September 30, 2000, all options were excluded from the computation of diluted net income per share because the options' exercise price was greater than the average market price of the common shares for the period. 5. COMPREHENSIVE INCOME/(LOSS) Total comprehensive income/(loss) consists of: - ----------------------------------------------------------------------------------------------------- Nine Months Ended Three Months Ended September 30, September 30, (in thousands) 2000 1999 2000 1999 - ----------------------------------------------------------------------------------------------------- Net income $ 28,754 $ 31,172 $ 9,343 $ 10,667 Other comprehensive loss, before tax: Foreign currency translation adjustments (55,268) (20,699) (11,277) (3,296) Income tax related to items of other comprehensive loss 248 -- -- -- -------- -------- -------- -------- Total comprehensive (loss)/income $(25,266) ($10,473) $ (1,624) $ 13,963 -------- -------- -------- -------- 5

6. OPERATING SEGMENT DATA The following table shows data by operating segment, reconciled to consolidated totals included in the financial statements: - ------------------------------------------------------------------------------------------------------------------- Nine Months Ended Three Months Ended September 30, September 30, (in thousands) 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------------- NET SALES Engineered Fabrics $ 525,472 $ 450,217 $ 166,673 $ 160,125 High Performance Doors 71,624 72,280 24,834 25,506 All other 32,726 31,463 9,574 10,935 --------- --------- --------- --------- Consolidated Total $ 629,822 $ 553,960 $ 201,081 $ 196,566 --------- --------- --------- --------- OPERATING INCOME Engineered Fabrics $ 115,840 $ 101,011 $ 37,996 $ 37,336 High Performance Doors 4,068 3,446 972 814 All other 6,588 4,000 1,754 808 Research expense (16,995) (16,710) (6,142) (5,534) Unallocated expenses (30,171) (25,666) (11,092) (9,529) --------- --------- --------- --------- Operating income before reconciling items 79,330 66,081 23,488 23,895 Reconciling items: Interest expense, net (31,374) (15,227) (10,645) (6,488) Other (expense) income, net (923) 231 909 555 --------- --------- --------- --------- Consolidated income before income taxes $ 47,033 $ 51,085 $ 13,752 $ 17,962 --------- --------- --------- --------- 7. INCOME TAXES The tax rate for the first nine months of 2000 and 1999 was 40%. During the third quarter of 2000, the Company's estimated tax rate was reduced from 43% to 40%, as actual tax costs associated with the acquisition and integration of 1999 acquisitions were lower than originally estimated. The effect of the rate change for the first nine months was fully recognized in the third quarter. 8. SUPPLEMENTARY CASH FLOW INFORMATION Interest paid for the nine months ended September 30, 2000 and 1999 was $29.4 million and $15.3 million, respectively. Taxes paid for the nine months ended September 30, 2000 and 1999 was $18.8 million and $20.7 million, respectively. 9. ACQUISITIONS In September 2000, the Company acquired all of the shares of Portsam AB, a Swedish company that provides services for high performance doors. The purchase price was approximately $1.1 million and was accounted for as a purchase. Accordingly, the results of operations are included in the financial statements as of the acquisition date. 6

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto. RESULTS OF OPERATIONS: Net sales increased to $201.1 million for the three months ended September 30, 2000 as compared to $196.6 million for the same period in 1999. The effect of the stronger U.S. dollar as compared to the third quarter of 1999 was to decrease net sales by $8.7 million. Acquisitions made in 1999 added $19.1 million to third quarter 2000 net sales. Excluding these two factors, 2000 net sales were 3.0% lower than the third quarter of 1999. Net sales increased to $629.8 million for the nine months ended September 30, 2000 as compared to $554.0 million for the same period in 1999. The effect of the stronger U.S. dollar as compared to the first half of 1999 was to decrease net sales by $19.0 million. Acquisitions made in 1999 added $87.4 million to 2000 net sales. Excluding these two factors, 2000 net sales were up 1.3% as compared to 1999. Geographically, year to date net sales, excluding the effect of acquisitions, were down 3.0% in the United States, as compared to 1999. Net sales in Canada, Korea and China increased in local currencies and U.S. dollars. European sales for 2000 increased in local currencies, but decreased in U.S. dollars. Gross profit was 39.5% of net sales for the three months ended September 30, 2000 as compared to 39.9% for the same period in 1999 bringing the nine month result to 40.0% for 2000 as compared to 41.0% for 1999. Excluding the effect of the stronger U.S. dollar and acquisitions, gross profit was 40.0% of net sales in the third quarter and 41.2% in the first nine months of 2000. Year to date variable costs as a percent of net sales were 35.2% in 2000 and 1999. Excluding the effect of the stronger U.S. dollar and acquisitions, variable costs as a percent of net sales were 34.1% in 2000. Selling, technical, general and research expenses, excluding the effect of the stronger U.S. dollar and acquisitions, were down 0.1% for the nine months ended September 30, 2000 as compared to the same period in 1999. Operating income as a percentage of net sales was 12.6% for the nine months ended September 30, 2000 compared to 11.9% for the comparable period in 1999. The stronger U.S. dollar and acquisitions had no net effect on the operating income percentage for the nine months ended September 30, 2000. Previously announced cost reduction and equipment relocation initiatives are proceeding on schedule. These cost reduction initiatives have resulted in incremental year to date savings of $17.7 million, in addition to $13.0 of savings realized in 1999. For the full year 2000, these initiatives will result in incremental cost savings of $25.0 million as compared to 1999. As compared to the cost structure in place at the beginning of the program in January 1999, the cumulative effect of the cost reduction program will be $50.0 million, of which $12.0 million will be reflected in 2001, in comparison to this year. The Company has completed the closing of five manufacturing plants and has nearly completed the closing of a sixth facility. The Company is on schedule to complete the reduction of the worldwide workforce by about 9 percent in comparison to the beginning of 1999. Expenditures for 7

equipment relocations and asset write-offs were approximately $5.5 million in the first nine months of 2000 and are expected to be approximately $9 million for the full year. Interest expense for the nine months ended September 30, 2000 increased $16.1 million as compared to the same period in 1999. This increase was due to higher debt and interest rates during the period due principally to acquisitions made in 1999. The tax rate for the first nine months of 2000 and 1999 was 40%. During the third quarter of 2000, the Company's estimated tax rate was reduced from 43% to 40%, as actual tax costs associated with the acquisition and integration of 1999 acquisitions were lower than originally estimated. The effect of the tax rate change for the first nine months was fully recognized in the third quarter. Reasons for the changes in operating results for the three month period ended September 30, 2000 as compared to the corresponding period in 1999 are similar to those which affected the nine month comparisons, except where specifically noted. In September 2000, the Company acquired all of the shares of Portsam AB, a Swedish company that provides services for high performance doors. The purchase price was approximately $1.1 million and was accounted for as a purchase. Accordingly, the results of operations are included in the financial statements as of the acquisition date. In June 1998, Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities", was issued and amended in June 2000 by Financial Accounting Standard No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities". These Standards establish a new model for accounting for derivatives and hedging activities. All derivatives will be required to be recognized as either assets or liabilities and measured at fair value. Each hedging relationship must be designated and accounted for pursuant to this Standard. Since the Company already records forward exchange and futures contracts at fair value, this Standard is not expected to have a material effect on the accounting for these transactions. Interest rate swaps that qualify as cash flow hedges will be measured at fair value with the initial asset or liability recognized in "Other comprehensive income". Subsequently, amounts will be reclassified to "Interest expense, net" in accordance with this Standard. The Company plans to adopt this Standard on its effective date of January 1, 2001. In December 1999, The Securities Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements". SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. The Company is required to adopt SAB 101 in the fourth quarter of 2000. Management does not expect the adoption of SAB 101 to have a material effect on the Company's financial condition or results of operations. In March 2000, the Financial Accounting Standards Board issued Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Involving Stock Compensation--an Interpretation of APB Opinion No. 25". FIN 44 clarifies the application of APB Opinion No. 25 and, among other issues, clarifies the following: the definition of an employee for purposes of applying APB Opinion No. 25; the criteria for determining whether a plan qualifies as a non compensatory plan; the accounting consequences of various modifications to the terms of previously fixed stock options or awards; and the accounting for an exchange of stock compensation awards in a business combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44 cover specific events that occurred after either December 15, 1998 or January 12, 2000. The Company's method of accounting for stock compensation is in accordance with FIN 44. LIQUIDITY AND CAPITAL RESOURCES: Accounts receivable decreased $16.1 million since December 31, 1999. Excluding the effect of the stronger U.S. dollar, accounts receivable decreased $3.5 million. Inventories decreased $2.4 million during the nine months ended September 30, 2000. Excluding the effect of the stronger U.S. dollar, inventories increased $7.0 million. During the first nine months of 2000, total debt decreased $51.2 million. The Company's current debt structure, which is mostly floating-rate, currently provides approximately $280 million in committed and available unused debt capacity with financial institutions. Management believes that this debt capacity, in combination with informal commitments and expected free cash flows, should be sufficient to meet anticipated operating requirements and normal business opportunities which support corporate strategies. Capital expenditures for the nine months ended September 30, 2000, including the value of capital leases, were $26.9 million as compared to $23.3 million for the same period last year. The Company anticipates that capital expenditures, including leases, are expected to be about $40 million and will continue to finance these expenditures with cash from operations and existing credit facilities. 8

FORWARD-LOOKING STATEMENTS This Form 10-Q contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements include statements about such matters as annual cost savings, workforce reductions, debt capacity, capital expenditures, taxes, and the effect of accounting changes. Actual future events and circumstances (including future performance, results and trends) could differ materially from those set forth in such statements due to various factors. These factors include more competitive marketing conditions, unanticipated events or circumstances related to recently acquired businesses, the occurrence of unanticipated events or difficulties relating to divestiture, joint venture, operating, capital, global integration and other projects, changes in currency exchange rates, changes in general economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company's other filings with the Securities and Exchange Commission. 9

Part II - Other Information ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed during the quarter ended September 30, 2000. EXHIBIT NO. DESCRIPTION ----------- ----------- 11. Schedule of computation of net income per share and diluted net income per share 27. Financial data schedule 10

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: September 13, 2000 by /s/ Michael C. Nahl ------------------- Michael C. Nahl Sr. Vice President and Chief Financial Officer

EXHIBIT 11 ALBANY INTERNATIONAL CORP. EXHIBIT 11 SCHEDULE OF COMPUTATION OF NET INCOME PER SHARE AND DILUTED NET INCOME PER SHARE (in thousands, except per share data) For the three months For the nine months ended September 30, ended September 30, 2000 (1) 1999 (1) 2000 (1) 1999 (1) ========== =========== ========== =========== Net income $9,343 $10,667 $28,754 $31,172 ========== =========== ========== =========== Weighted average number of shares 30,670,923 30,371,567 30,591,980 30,310,058 Effect of potentially dilutive securities: Stock options (2) -- 75,190 -- 201,856 ---------- ----------- ---------- ----------- Weighted average number shares, including the effect of potentially dilutive securities 30,670,923 30,446,757 30,591,980 30,511,914 ========== =========== ========== =========== Net income per share $0.30 $0.35 $0.94 $1.03 ========== =========== ========== =========== Diluted net income per share $0.30 $0.35 $0.94 $1.02 ========== =========== ========== =========== Calculation of Weighted Average Number of Shares: Days Shares ----------------------------- Activity Outstanding (1) Year to Date Quarter - ------------------------------------------------------------------------------------- 1999 Beginning balance 30,220,223 30 ESOP shares - 13,772 30,234,271 28 ESOP shares - 15,530 30,250,111 31 ESOP shares - 49,234 30,300,330 20 Options - 2,400 shares 30,302,778 10 ESOP shares - 13,350 30,316,395 6 Stock dividend adjust. - 1,592 30,318,019 4 Directors shares - 2,884 30,320,961 2 Options - 1,550 shares 30,322,542 1 Options - 1,400 shares 30,323,970 4 Options - 1,000 shares 30,324,990 4 Options - 400 shares 30,325,398 10 ESOP shares - 12,335 30,337,979 14 Options - 1,800 shares 30,339,815 16 ESOP shares - 13,827 30,353,919 31 30 ESOP shares - 16,877 30,371,133 31 31 ESOP shares - 16,925 30,388,397 30 30 ESOP shares - 20,754 30,409,566 1 1 Totals 2000 Beginning balance 30,467,186 30 ESOP shares - 21,786 30,488,972 29 ESOP shares - 62,201 30,551,173 31 ESOP shares - 23,912 30,575,085 30 ESOP shares - 21,038 30,596,123 5 Directors shares - 4,760 30,600,883 26 ESOP shares - 22,177 30,623,060 30 ESOP shares - 24,526 30,647,586 31 30 ESOP shares - 21,671 30,669,257 31 31 ESOP shares - 25,069 30,694,326 30 30 ESOP shares - 26,258 30,720,584 1 1 Totals 274 Weighted Average Shares ------------------------------------------------------------------------ For the three months For the nine months Shares ended September 30, ended September 30, Activity Outstanding (1) 2000 1999 2000 1999 - ------------------------------------------------------- ------------- ----------------- ---------------- ------------ 1999 Beginning balance 30,220,223 3,320,904 ESOP shares - 13,772 30,234,271 3,100,951 ESOP shares - 15,530 30,250,111 3,434,994 ESOP shares - 49,234 30,300,330 2,219,804 Options - 2,400 shares 30,302,778 1,109,992 ESOP shares - 13,350 30,316,395 666,294 Stock dividend adjust. - 1,592 30,318,019 444,220 Directors shares - 2,884 30,320,961 222,132 Options - 1,550 shares 30,322,542 111,072 Options - 1,400 shares 30,323,970 444,307 Options - 1,000 shares 30,324,990 444,322 Options - 400 shares 30,325,398 1,110,820 ESOP shares - 12,335 30,337,979 1,555,794 Options - 1,800 shares 30,339,815 1,778,158 ESOP shares - 13,827 30,353,919 9,898,017 3,446,782 ESOP shares - 16,877 30,371,133 10,233,751 3,448,737 ESOP shares - 16,925 30,388,397 9,909,260 3,339,384 ESOP shares - 20,754 30,409,566 330,539 111,390 ----------------- ------------ Totals 30,371,567 30,310,058 ================= ============ 2000 Beginning balance 30,467,186 3,335,823 ESOP shares - 21,786 30,488,972 3,226,935 ESOP shares - 62,201 30,551,173 3,456,520 ESOP shares - 23,912 30,575,085 3,347,637 ESOP shares - 21,038 30,596,123 558,323 Directors shares - 4,760 30,600,883 2,903,733 ESOP shares - 22,177 30,623,060 3,352,890 ESOP shares - 24,526 30,647,586 9,993,778 3,467,428 ESOP shares - 21,671 30,669,257 10,334,206 3,469,879 ESOP shares - 25,069 30,694,326 10,009,019 3,360,693 ESOP shares - 26,258 30,720,584 333,919 112,119 ------------- ---------------- Totals 30,670,923 30,591,980 ============= ================ (1) Includes Class A and Class B Common Stock (2) Incremental shares of unexercised options are calculated based on the average price of the Company's stock for the respective period. The calculation includes all options that are dilutive to earnings per share.

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALBANY INTERNATIONAL CORP'S CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-2000 SEP-30-2000 3,741 0 227,312 8,116 233,264 489,112 737,026 351,159 1,097,350 162,743 474,820 0 0 33 302,717 1,097,350 629,822 629,822 377,817 551,144 923 (652) 31,374 47,033 18,813 28,754 0 0 0 28,754 0.94 0.94