<TABLE>
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: March 31, 1999
---------------
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 23,920,924 shares of Class A Common Stock and 5,785,282
shares of Class B Common Stock outstanding as of March 31, 1999.
<PAGE>
ALBANY INTERNATIONAL CORP.
INDEX
Page No.
------------
<C> <S>
Part I Financial information
Item 1. Financial Statements
Consolidated statements of income and retained earnings -
three months ended March 31, 1999 and 1998 1
Consolidated balance sheets - March 31, 1999 and December 31, 1998 2
Consolidated statements of cash flows - three months ended March 31, 1999 and 1998 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
</TABLE>
<PAGE>
Item 1. Financial Statements
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(unaudited)
(in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
<S> <C> <C>
1999 1998
----------------- -----------------
Net sales $181,569 $176,156
Cost of goods sold 106,549 101,344
----------------- -----------------
Gross profit 75,020 74,812
Selling, technical and general expenses 52,357 51,231
----------------- -----------------
Operating income 22,663 23,581
Interest expense, net 4,552 4,418
Other expense, net 103 1,124
----------------- -----------------
Income before income taxes 18,008 18,039
Income taxes 7,024 7,035
----------------- -----------------
Income before associated companies 10,984 11,004
Equity in earnings of associated companies 228 50
----------------- -----------------
Net income 11,212 11,054
Retained earnings, beginning of period 255,586 246,013
Less dividends - 3,140
----------------- -----------------
Retained earnings, end of period $266,798 $253,927
================= =================
Net income per share $0.38 $0.36
================= =================
Diluted net income per share $0.38 $0.36
================= =================
Cash dividends per common share - $0.105
================= =================
Weighted average number of shares 29,642,920 30,979,687
================= =================
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
March 31, December 31,
<S> <C> <C>
1999 1998
------------------- ---------------------
ASSETS
Cash and cash equivalents $9,107 $5,868
Accounts receivable, net 180,764 184,748
Inventories:
Finished goods 107,715 115,740
Work in process 48,309 43,523
Raw material and supplies 35,226 37,646
------------------- ---------------------
191,250 196,909
Deferred taxes and prepaid expenses 23,083 22,188
------------------- ---------------------
Total current assets 404,204 409,713
Property, plant and equipment, net 308,981 325,109
Investments in associated companies 4,035 4,054
Intangibles 59,110 60,800
Deferred taxes 27,092 27,193
Other assets 42,893 39,497
------------------- ---------------------
Total assets $846,315 $866,366
=================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable $109,520 $112,828
Accounts payable 24,464 25,838
Accrued liabilities 59,758 66,791
Current maturities of long-term debt 5,274 5,178
Income taxes payable and deferred 7,891 9,403
------------------- ---------------------
Total current liabilities 206,907 220,038
Long-term debt 179,175 181,137
Other noncurrent liabilities 115,352 113,282
Deferred taxes and other credits 39,075 37,059
------------------- ---------------------
Total liabilities 540,509 551,516
------------------- ---------------------
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
26,131,672 in 1999 and 26,082,438 in 1998 26 26
Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and
outstanding 5,785,282 in 1999 and 1998 6 6
Additional paid in capital 207,368 206,428
Retained earnings 266,798 255,586
Accumulated items of other comprehensive income:
Translation adjustments (105,576) (83,736)
Pension liability adjustment (16,868) (16,868)
------------------- ---------------------
351,754 361,442
Less treasury stock (Class A), at cost (2,210,748 shares
in 1999;2,240,050 shares in 1998) 45,948 46,592
------------------- ---------------------
Total shareholders' equity 305,806 314,850
------------------- ---------------------
Total liabilities and shareholders' equity $846,315 $866,366
=================== =====================
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended
March 31,
<S> <C> <C>
1999 1998
---------------- ----------------
OPERATING ACTIVITIES
Net income $11,212 $11,054
Adjustments to reconcile net cash provided by operating activities:
Equity in earnings of associated companies (228) (50)
Depreciation and amortization 12,471 12,231
Provision for deferred income taxes, other credits and long-term liabilities 5,148 1,352
Increase in cash surrender value of life insurance, net of premiums paid (574) (551)
Unrealized currency transaction losses/(gains) 709 (204)
Gain on disposition of assets (19) (8)
Shares contributed to ESOP 1,584 1,500
Changes in operating assets and liabilities:
Accounts receivable 3,275 3,659
Inventories 5,660 (6,114)
Prepaid expenses (889) (896)
Accounts payable (1,375) (745)
Accrued liabilities (4,190) (3,301)
Income taxes payable (1,437) 4,988
Other, net (1,261) 691
---------------- ----------------
Net cash provided by operating activities 30,086 23,606
---------------- ----------------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (5,157) (9,920)
Purchased software (516) (213)
Proceeds from sale of assets 39 58
Acquisitions, net of cash acquired - (16,217)
Loan to other company (2,000) -
Investment in associated companies - (2,025)
---------------- ----------------
Net cash used in investing activities (7,634) (28,317)
---------------- ----------------
FINANCING ACTIVITIES
Proceeds from borrowings - 57,002
Principal payments on debt (5,119) (20,140)
Proceeds from options exercised - 705
Tax benefit of options exercised - 62
Purchases of treasury shares - (18,396)
Dividends paid - (3,241)
---------------- ----------------
Net cash (used)/provided by financing activities (5,119) 15,992
---------------- ----------------
Effect of exchange rate changes on cash flows (14,094) (76)
---------------- ----------------
Increase in cash and cash equivalents 3,239 11,205
Cash and cash equivalents at beginning of year 5,868 2,546
---------------- ----------------
Cash and cash equivalents at end of period $9,107 $13,751
================ ===============
The accompanying notes are an integral part of the financial statements.
3
</TABLE>
<PAGE>
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, 1998.
2. Accounting for Derivatives
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 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 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
expense, net". Open positions have been valued at fair value using quoted market
rates.
In June 1998, Financial Accounting Standard No. 133, "Accounting for
Derivative Instruments and Hedging Activities", was issued. This Standard
establishes 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. The Company plans to adopt this Standard on its effective date of
January 1, 2000.
3. Other Expense, Net
Included in other expense, net for the three months ended March 31 are:
currency transactions, $0.9 million income in 1999 and $0.4 million income in
1998; amortization of debt issuance costs and loan organization fees, $0.2
million in 1999 and 1998; and other miscellaneous expenses, none of which are
significant, in 1999 and 1998.
4
<PAGE>
4. Earnings Per Share
In accordance with Financial Accounting Standard No. 128, "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:
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
(in thousands) 1999 1998
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Income available to common stockholders:
Income available to common stockholders
$11,212 $11,054
------- -------
Weighted average number of shares:
Weighted average number of shares used in
net income per share 29,643 30,980
Effect of dilutive securities:
Stock options 204 398
-------- --------
Weighted average number of shares used in
diluted net income per share 29,847 31,378
------ ------
Options to purchase 250,000 shares of common stock at $25.5625 per share and
751,750 shares of common stock at $22.25 per share were outstanding at March 31,
1999 but were not included in the computation of diluted net income per share
for the three months ended March 31, 1999 because the options' exercise price
was greater than the average market price of the common shares for that period.
5. Comprehensive Income
Total comprehensive income consists of:
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
(in thousands) 1999 1998
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $11,212 $11,054
Other comprehensive (loss)/income, before tax:
Foreign currency translation adjustments (21,840) 1,080
Income tax related to items of other
comprehensive (loss)/income
- -
- ------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive (loss)/income $(10,628) $12,134
- ------------------------------------------------------------------------------------------------------------------------------------
5
<PAGE>
6. Operating Segment Data
The following table shows data by operating segment, reconciled to
consolidated totals included in the financial statements:
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
(in thousands) 1999 1998
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Net Sales
Engineered Fabrics $147,395 $145,274
High Performance Industrial Doors 24,339 22,352
All other 9,835 8,530
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated Total $181,569 $176,156
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Income
Engineered Fabrics $33,334 $32,669
High Performance Industrial Doors 1,904 2,812
All other 1,138 1,579
Research expense (5,475) (5,634)
Unallocated expenses (8,238) (7,845)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating income before reconciling items 22,663 23,581
Reconciling items:
Interest expense, net (4,552) (4,418)
Other expense, net (103) (1,124)
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated income before income taxes $18,008 $18,039
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7. Income Taxes
The Company's effective tax rate for the three months ended March 31,
1999 and 1998 was 39% and approximates the anticipated effective tax rate for
the full year 1999.
8. Supplementary Cash Flow Information
Interest paid for the three months ended March 31, 1999 and 1998 was
$5.0 million and $4.2 million, respectively.
Taxes paid for the three months ended March 31, 1999 and 1998 was $5.0
million and $2.2 million, respectively.
6
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Three Months Ended March 31, 1999
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto.
RESULTS OF OPERATIONS:
Net sales increased to $181.6 million for the three months ended March 31, 1999
as compared to $176.2 million for the three months ended March 31, 1998. The
effect of the stronger U.S. dollar as compared to the first quarter of 1998 was
to decrease net sales by $0.7 million. Acquisitions made in 1998 added $4.8
million to first quarter 1999 net sales. Excluding these two factors, 1999 net
sales were up slightly as compared to 1998.
Geographically, net sales for the three months ended March 31, 1999, as compared
to the same period in 1998, decreased 6.0% in the United States and increased
3.0% in Canada. Asian sales were higher in 1999, as compared to 1998. European
sales increased in local currencies and were up 3.7% in U.S. dollars.
Gross profit was 41.3% of net sales for the three months ended March 31, 1999 as
compared to 42.5% for the same period in 1998. Year to date variable costs as a
percent of net sales increased to 35.4% in 1999 from 33.2% for the same period
in 1998. Excluding the effect of the stronger U.S. dollar and 1998 acquisitions,
variable costs as a percent of net sales were 34.7% in 1999. The decrease in
gross profit margin is the result of continued pricing pressures from major
paper machine clothing customers and a change in product mix that includes a
higher proportion of sales with lower margins.
Selling, technical, general and research expenses, excluding the effect of the
stronger U.S. dollar and 1998 acquisitions, were up slightly for the three
months ended March 31, 1999 as compared to the same period in 1998.
Operating income as a percentage of net sales decreased to 12.5% for the three
months ended March 31, 1999 from 13.4% for the comparable period in 1998 due to
items discussed above. Excluding the effect of the stronger U.S. dollar and 1998
acquisitions, operating income as a percentage of net sales was 12.8% in 1999.
The Company is on schedule to achieve the expected 1999 cost reduction of $10
million resulting from the global restructuring plan announced in January 1999.
In April 1999, as part of this plan, the Company announced the closing of its
forming fabrics plant in Weaverville, North Carolina. Charges to be incurred as
part of this closing will be recorded in the second quarter of this year.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES:
Accounts receivable decreased $4.0 million since December 31, 1998. Excluding
the effect of the stronger U.S. dollar, accounts receivable decreased $1.6
million. Inventories decreased $5.7 million during the three months ended March
31, 1999. Excluding the effect of the stronger U.S. dollar, inventories
decreased $3.5 million.
The Company's current debt structure, which is mostly floating-rate, has
resulted in favorable interest rates and currently provides approximately $100
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
operating requirements, normal business opportunities and small acquisitions
which support corporate strategies.
Capital expenditures for the three months ended March 31, 1999, including leases
to the extent they are required to be capitalized, were $5.2 million as compared
to $9.9 million for the same period last year. The Company anticipates that
capital expenditures, including leases, will be approximately $45 million for
the full year and will continue to finance these expenditures with cash from
operations and existing credit facilities.
In June 1998, Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities", was issued. This Standard establishes 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. The Company plans to
adopt this Standard on its effective date of January 1, 2000.
YEAR 2000
In 1997, the Company began a program to assess, test and remedy its computer and
manufacturing systems to assure that these systems will properly recognize the
year 2000 and therefore substantially eliminate the risk of date-related
computer shutdowns from internal operations.
The most significant area to assess under this program is the Company's business
system, which includes the Company's information system, the hardware and
software associated with its network of personal computers and its
telecommunications infrastructure. Most of the Company's operations have
completed the assessment phase of the program and have begun testing and
remediation. Currently, the implementation of a new information system is in
progress and has not been accelerated as a result of the year 2000 issue. Each
of the Company's operations are at a different level of completion. In some
cases, the existing system which is being replaced is not year 2000 compliant.
If the implementation of the new system for these operations is not expected to
be complete by the year 2000, a contingency plan which includes upgrading the
existing software or the temporary use of manual processes will be put in place.
Management does not expect any significant internal issues related to year 2000
compliance.
The Company's manufacturing process involves some use of computers and embedded
chips in process equipment. Each operation has been assigned a coordinator to
oversee the planning, testing and remediation of this equipment. While
management does not expect any year 2000 related shutdowns, it believes that any
problems that do occur would be isolated. In these cases, production can be
moved to other operations within the Company until the problem is corrected.
Management expects to remediate any
8
<PAGE>
undiscovered year 2000 equipment problems within a matter of days, with no
material impact on overall production.
The Company depends on customers and suppliers for its daily operations.
Disruptions due to year 2000 problems in their operations could have a
significant impact on the Company. The Company is currently monitoring the
status of its customers and suppliers to determine risks and contingency plans.
Total external expenditures related to the year 2000 program are estimated to be
$2.0 million and are expected to be funded from cash from operations. Of the
$2.0 million, $0.3 million is for consultants, $0.8 million for hardware, $0.4
million for software and $0.5 million for communications equipment. As of March
31, 1999, actual expenditures include $0.3 million for consultants, $0.1 million
for hardware, $0.1 million for software and $0.4 for communications equipment.
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 global restructuring, annual cost savings, future sales,
estimated impact of actions upon future earnings, year 2000 compliance, industry
trends, operating efficiency and profitability. 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. One
factor is the risk to completing the year 2000 plan, which includes the
Company's ability to discover and correct year 2000 problems within its systems
and the ability of its customers and suppliers to bring their systems into year
2000 compliance. Other factors include even more competitive marketing
conditions resulting from customer consolidations, possible softening of
customer demand, 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 filings with the
Securities and Exchange Commission.
9
<PAGE>
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 March 31, 1999.
<TABLE>
<S> <C>
Exhibit No. Description
10(i)(ii). Amendment dated as of March 5, 1999 to the
amended and restated Credit Agreement dated as
of February 29, 1996, among the Registrant,
certain banks listed therein, and Morgan
Guaranty Trust Company of New York, as Agent.
11. Schedule of computation of net income per share and diluted net income per share
27. Financial data schedule
</TABLE>
10
<PAGE>
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: May 12, 1999
by /s/Michael C. Nahl
------------------
Michael C. Nahl
Sr. Vice President and
Chief Financial Officer
<PAGE>
Exhibit 10(i)(ii)
Amendment dated as of March 5, 1999 to the amended and restated Credit Agreement
dated as of February 29, 1996, among the Registrant, certain banks listed
therein, and Morgan Guaranty Trust Company of New York, as Agent.
<PAGE>
[CONFORMED COPY]
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of March 5, 1999 to the Amended and Restated Credit Agreement
dated as of February 29, 1996, the ("Credit Agreement") among ALBANY
INTERNATIONAL CORP. (the "Company"), the BANKS party thereto (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). The parties
hereto agree as follows:
Section 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
Section 2. Amendments. The Credit Agreement is hereby amended as
follows:
(a) Subsections (vii) and (viii) of the definition of "Debt" in Section 1.1
is renumbered as (viii) and (ix), respectively, and the following subsection
(vii) is added:
(vii) the unrecovered purchaser's investment in Receivables sold by such Person,
(b) The definition of "Interest Coverage Ratio" in Section 1.1 is hereby
deleted.
(c) Section 5.6 is amended to read as follows:
SECTION 5.6. Subsidiary Debt. The total Debt of all Consolidated Subsidiaries
(excluding all Loans outstanding hereunder and all Debt of a Consolidated
Subsidiary to the Company or to a Wholly-Owned Consolidated Subsidiary) will at
no time exceed $125,000,000.
(d) Section 5.7(g) is amended by replacing "5.12" with "5.8(f)".
(e) Section 5.8(c) is amended to read as follows:
(c) any Subsidiary may sell, lease or otherwise dispose of any of its assets to
the Company or any Wholly-Owned Consolidated Subsidiary;
(f) Section 5.8(f) is amended to read as follows:
(f) the Company or any Subsidiary may sell Receivables for cash;
and
(g) Section 5.10(a)(B)(i) is amended by replacing "$40,000,000" with
"$75,000,000".
(h) Section 5.13 is amended by replacing "$25,000,000" with "$75,000,000".
(i) Section 5.14(d) is amended by replacing "$140,000,000" with "$200,000,000".
(j) A new Section 5.14(e) is inserted to read as follows:
<PAGE>
(e) Restricted Payments permitted pursuant to Section 5.10; and
(k) Section 5.14(e) is (x) redesignated Section 5.14(f) and (y) amended by
replacing "$10,000,000" with "$30,000,000".
(l) Sections 5.12 and 5.17 of the Credit Agreement are hereby deleted in their
entirety. Sections 5.13, 5.14, 5.15 and 5.16 of the Credit Agreement are
redesignated Sections 5.12, 5.13, 5.14 and 5.15 respectively. Section 5.18 of
the Credit Agreement is redesignated Section 5.16.
(m) Sections 6.1(e), 6.1(f) and 6.1(j) are each amended by replacing "$500,000"
with "$5,000,000".
(n) Section 5.13 is amended by adding the following parenthetical after the
words "whether now owned or hereafter acquired":
(except property so sold and leased back within 180 days after the
initial acquisition thereof)
(o) Section 6.1(m) is amended by deleting the words "does not" after the name
"J. Spencer Standish" and adding the following after the name "J. Spencer
Standish":
, Christine L. Standish, John C. Standish, trust for the benefit of the
foregoing or any of their descendants, or the J.S. Standish Company do not,
collectively,
(p) A new Section 4.13 is inserted to read as follows: Section 4.13. Year 2000
Compliance. The Borrower has initiated a review and assessment of all areas
within the business and operations of the
Borrower and each of its Subsidiaries (including those areas affected by
suppliers and vendors) that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by it or any of its
Subsidiaries (or their respective suppliers and vendors) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), developed a plan and timetable
for addressing the Year 2000 Problem on a timely basis and to date, implemented
such plan in accordance with such timetable. The Borrower reasonably believes
that all computer applications of the Borrower or any of its Subsidiaries that
are material to the business or operations of the Borrower or any of its
Subsidiaries will on a timely basis be able to perform properly date-sensitive
functions for all dates before and from and after January 1, 2000, except to the
extent that a failure to do so could not reasonably be expected to have a
material adverse effect on the business, financial condition, results of
operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
Section 3. Representations of Company. The Company represents and
warrants that (i) the representations and warranties of the Company set forth in
the Credit Agreement, as amended by this Amendment, will be true on and as of
the Amendment Effective Date and (ii) no Default will have occurred and be
continuing on such date.
Section 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE>
Section 5. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Section 6. Effectiveness. This Amendment shall become effective as of
the date hereof on the date (the "Amendment Effective Date") when the Agent
shall have received from each of the Company and the Required Banks a
counterpart hereof signed by such party or facsimile or other written
confirmation(in form satisfactory to the Agent) that such party has signed a
counterpart hereof.
IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed as
of the date first above written. ALBANY
INTERNATIONAL CORP.
By: /s/ John C. Treanor
----------------------------
Title: Treasurer
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Stacey L. Haimes
-----------------------------
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Paula Zaiken
-------------------------
Title: Director
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Stephen E. McDonald
--------------------------------
Title: First Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By: /s/ John W. Pocalyko
-----------------------------
Title: Managing Director
BANK OF MONTREAL
By: /s/ Brian L. Banke
---------------------------
Title: Director
<PAGE>
THE CHASE MANHATTAN BANK formerly known as
CHEMICAL BANK
By: /s/ Kristin Sands
--------------------------
Title: Vice President
CITIBANK, N.A.
By: /s/ William G. Martens, III
------------------------------------
Title: Vice President
FLEET BANK
By: /s/ Michael C. Ankrom, Jr.
-----------------------------------
Title: Vice President
ABN AMRO BANK N.V.
By: /s/ James J. Rice
--------------------------
Title: Vice President
By: /s/ Christian H. Sievers
---------------------------------
Title: Vice President
MARINE MIDLAND BANK
By: /s/ William M. Holland
-------------------------------
Title: Vice President
THE SUMITOMO BANK LIMITED, NEW
YORK BRANCH
By: /s/ Michael Garrido
----------------------------
Title: Senior Vice President
<PAGE>
<TABLE>
<CAPTION>
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
ended March 31,
1999 (1) 1998 (1)
<S> <C> <C>
------------- --------------
Net income $11,212 $11,054
============= ==============
Weighted average number of shares 29,642,920 30,979,687
Effect of potentially dilutive securities:
Stock options (2) 203,742 397,672
------------- --------------
Weighted average number shares,
including the effect of potentially dilutive securities 29,846,662 31,377,359
============= ==============
Net income per share $0.38 $0.36
============= ==============
Diluted net income per share $0.38 $0.36
============= ==============
Calculation of Weighted Average Number of Shares:
Weighted Average Shares
----------------------------------
For the three months
Shares Days ended March 31,
-------------
Activity Outstanding (1) Year to Date 1999 1998
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------- ------------- --------------
1998
Beginning balance 31,638,530 8 2,812,314
Treasury shares - 5,000 31,633,379 6 2,108,892
Options - 2,500 shares 31,635,954 1 351,511
Treasury shares - 411,100 31,212,429 7 2,427,633
Treasury shares - 400,000 30,800,339 7 2,395,582
Treasury shares - 13.700 30,786,224 1 342,069
ESOP shares - 12,783 30,799,394 25 8,555,387
Treasury shares - 26,000 30,772,608 3 1,025,754
ESOP shares - 41,378 30,815,237 13 4,451,090
Options - 600 shares 30,815,855 5 1,711,992
Options - 20,000 shares 30,836,459 9 3,083,646
Options - 8,000 shares 30,844,701 4 1,370,876
Options - 9,500 shares and
ESOP shares - 10,011 30,864,802 1 342,942
--------------
Totals 30,979,687
==============
1999
Beginning balance 29,627,670 30 9,875,890
ESOP shares - 13,772 29,641,442 28 9,221,782
ESOP shares - 15,530 29,656,972 31 10,215,179
ESOP shares - 49,234 29,706,206 1 330,069
-------------
Totals 29,642,920
=============
</TABLE>
(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.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ALBANY INTERNATIONAL CORP'S CONSOLIDATED FINANCIAL STATEMENTS AS OF AND
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 9,107
<SECURITIES> 0
<RECEIVABLES> 186,006
<ALLOWANCES> 5,242
<INVENTORY> 191,250
<CURRENT-ASSETS> 404,204
<PP&E> 637,692
<DEPRECIATION> 328,711
<TOTAL-ASSETS> 846,315
<CURRENT-LIABILITIES> 206,907
<BONDS> 179,175
0
0
<COMMON> 32
<OTHER-SE> 305,774
<TOTAL-LIABILITY-AND-EQUITY> 846,315
<SALES> 181,569
<TOTAL-REVENUES> 181,569
<CGS> 106,549
<TOTAL-COSTS> 159,168
<OTHER-EXPENSES> 103
<LOSS-PROVISION> (262)
<INTEREST-EXPENSE> 4,552
<INCOME-PRETAX> 18,008
<INCOME-TAX> 7,024
<INCOME-CONTINUING> 11,212
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,212
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
</TABLE>
