<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: June 30, 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 24,004,368 shares of Class A Common Stock and 5,754,376
shares of Class B Common Stock outstanding as of June 30, 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 and six months ended June 30, 1999 and 1998 1
Consolidated balance sheets - June 30, 1999 and December 31, 1998 2
Consolidated statements of cash flows - six months ended June 30, 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 4. Submissions of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
</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 Six Months Ended
June 30, June 30,
<C> <C> <S> <C> <C>
1999 1998 1999 1998
- ------------------ ----------------- ------------------ -----------------
$175,825 $179,628 Net sales $357,394 $355,784
102,103 101,664 Cost of goods sold 208,652 203,008
- ------------------ ----------------- ------------------ -----------------
73,722 77,964 Gross profit 148,742 152,776
54,199 54,792 Selling, technical and general expenses 106,556 106,023
- ------------------ ----------------- ------------------ -----------------
19,523 23,172 Operating income 42,186 46,753
4,186 4,876 Interest expense, net 8,738 9,294
221 1,114 Other expense, net 324 2,238
- ------------------ ----------------- ------------------ -----------------
15,116 17,182 Income before income taxes 33,124 35,221
5,895 6,701 Income taxes 12,919 13,736
- ------------------ ----------------- ------------------ -----------------
9,221 10,481 Income before associated companies 20,205 21,485
72 115 Equity in earnings of associated companies 300 165
- ------------------ ----------------- ------------------ -----------------
9,293 10,596 Net income 20,505 21,650
266,798 253,927 Retained earnings, beginning of period 255,586 246,013
- 4,489 Less dividends - 7,629
- ------------------ ----------------- ------------------ -----------------
$276,091 $260,034 Retained earnings, end of period $276,091 $260,034
================== ================= ================== =================
$0.31 $0.34 Net income per share $0.69 $0.70
================== ================= ================== =================
$0.30 $0.34 Diluted net income per share $0.68 $0.70
================== ================= ================== =================
- - Cash dividends per common share - $0.105
================== ================= ================== =================
29,726,799 30,917,175 Weighted average number of shares 29,685,091 30,948,258
================== ================= ================== =================
The accompanying notes are an integral part of the
financial statements.
1
<PAGE>
ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30, December 31,
<S> <C> <C>
1999 1998
------------------- ---------------------
ASSETS
Cash and cash equivalents $9,646 $5,868
Accounts receivable, net 179,385 184,748
Inventories:
Finished goods 109,404 115,740
Work in process 47,631 43,523
Raw material and supplies 36,349 37,646
------------------- ---------------------
193,384 196,909
Deferred taxes and prepaid expenses 22,666 22,188
------------------- ---------------------
Total current assets 405,081 409,713
Property, plant and equipment, net 306,234 325,109
Investments in associated companies 4,112 4,054
Intangibles 61,017 60,800
Deferred taxes 27,050 27,193
Other assets 43,675 39,497
------------------- ---------------------
Total assets $847,169 $866,366
=================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable $86,246 $112,828
Accounts payable 20,343 25,838
Accrued liabilities 58,633 66,791
Current maturities of long-term debt 2,513 5,178
Income taxes payable and deferred 2,838 9,403
------------------- ---------------------
Total current liabilities 170,573 220,038
Long-term debt 208,004 181,137
Other noncurrent liabilities 115,733 113,282
Deferred taxes and other credits 38,738 37,059
------------------- ---------------------
Total liabilities 533,048 551,516
------------------- ---------------------
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
26,210,540 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 5,754,376 in 1999 and 5,785,282 in 1998 6 6
Additional paid in capital 208,444 206,428
Retained earnings 276,091 255,586
Accumulated items of other comprehensive income:
Translation adjustments (107,731) (83,736)
Pension liability adjustment (16,868) (16,868)
------------------- ---------------------
359,968 361,442
Less treasury stock (Class A), at cost (2,206,172 shares
in 1999;2,240,050 shares in 1998) 45,847 46,592
------------------- ---------------------
Total shareholders' equity 314,121 314,850
------------------- ---------------------
Total liabilities and shareholders' equity $847,169 $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)
Six Months Ended
June 30,
<S> <C> <C>
1999 1998
---------------- ----------------
OPERATING ACTIVITIES
Net income $20,505 $21,650
Adjustments to reconcile net cash provided by operating activities:
Equity in earnings of associated companies (300) (165)
Depreciation and amortization 24,824 23,412
Provision for deferred income taxes, other credits and long-term liabilities 5,694 2,824
Increase in cash surrender value of life insurance, net of premiums paid (1,148) (1,102)
Unrealized currency transaction gains (379) (311)
(Gain)/loss on disposition of assets (20) 8
Shares contributed to ESOP 2,586 2,393
Changes in operating assets and liabilities:
Accounts receivable 7,103 (1,078)
Inventories 4,811 (11,311)
Prepaid expenses (407) (416)
Accounts payable (6,407) (1,498)
Accrued liabilities (5,498) 1,023
Income taxes payable (7,088) 453
Other, net (1,564) 902
---------------- ---------------
Net cash provided by operating activities 42,712 36,784
---------------- ----------------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (10,745) (21,149)
Purchased software (1,026) (615)
Proceeds from sale of assets 39 58
Acquisitions, net of cash acquired (251) (24,622)
Loan to other company (2,000) -
Investment in associated companies - (2,025)
---------------- ----------------
Net cash used in investing activities (13,983) (48,353)
---------------- ----------------
FINANCING ACTIVITIES
Proceeds from borrowings 27,822 104,863
Principal payments on debt (38,039) (62,801)
Proceeds from options exercised 165 2,105
Tax benefit of options exercised 11 281
Purchases of treasury shares - (21,383)
Dividends paid - (6,382)
---------------- ----------------
Net cash (used)/provided by financing activities (10,041) 16,683
---------------- ---------------
Effect of exchange rate changes on cash flows (14,910) (2,397)
---------------- ----------------
Increase in cash and cash equivalents 3,778 2,717
Cash and cash equivalents at beginning of year 5,868 2,546
---------------- ----------------
Cash and cash equivalents at end of period $9,646 $5,263
================ ================
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, 2001.
3. Other Expense, Net
Included in other expense, net for the six months ended June 30 are:
currency transactions, $2.0 million income in 1999 and $0.7 million income in
1998; amortization of debt issuance costs and loan origination fees, $0.5
million in 1999 and $0.3 million in 1998 and other miscellaneous expenses, none
of which are significant, in 1999 and 1998.
Included in other expense, net for the three months ended June 30 are:
currency transactions, $1.1 million income in 1999 and $0.3 million income in
1998; amortization of debt issuance costs and loan organization fees, $0.3
million in 1999 and $0.1 million in 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>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Three Months Ended
June 30, June 30,
(in thousands) 1999 1998 1999 1998
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Income available to common stockholders:
Income available to common stockholders $20,505 $21,650 $9,293 $10,596
------- ------- ------ -------
Weighted average number of shares:
Weighted average number of shares used in
net income per share 29,685 30,948 29,727 30,917
Effect of dilutive securities:
Stock options 286 511 364 612
--- ---
Weighted average number of shares used in
diluted net income per share 29,971 31,459 30,091 30,529
------ ------ ------ ------
Options to purchase 250,000 shares of common stock at $25.5625 per share and
748,250 shares at $22.25 per share were outstanding at June 30, 1999 but were
not included in the computation of diluted net income per share for the six
months ended June 30, 1999 because the options' exercise price was greater than
the average market price of the common shares for that period. The 250,000
shares were also not included in the computation of diluted net income per share
for the three months ended June 30, 1999.
5. Comprehensive Income
Total comprehensive income consists of:
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Three Months Ended
June 30, June 30,
(in thousands) 1999 1998 1999 1998
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $20,505 $21,650 $9,293 $10,596
Other comprehensive loss, before tax:
Foreign currency translation adjustments (23,995) (5,146) (2,155) (6,226)
Income tax related to items of other
comprehensive loss - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive (loss)/income ($3,490) $16,504 $7,138 $4,370
- ------------------------------------------------------------------------------------------------------------------------------------
5
<PAGE>
6. Operating Segment Data
The following table shows data by operating segment, reconciled to
consolidated totals included in the financial statements:
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Three Months Ended
June 30, June 30,
(in thousands) 1999 1998 1999 1998
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Net Sales
Engineered Fabrics $290,092 290,940 $142,697 $145,666
High Performance Industrial Doors 46,774 46,527 22,435 24,175
All other 20,528 18,317 10,693 9,787
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated Total $357,394 $355,784 $175,825 $179,628
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Income
Engineered Fabrics $63,675 $66,197 $30,341 $33,528
High Performance Industrial Doors 2,632 4,630 728 1,818
All other 3,192 2,868 2,054 1,289
Research expense (11,176) (11,711) (5,701) (6,077)
Unallocated expenses (16,137) (15,231) (7,899) (7,386)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating income before reconciling items 42,186 46,753 19,523 23,172
Reconciling items:
Interest expense, net (8,738) (9,294) (4,186) (4,876)
Other expense, net (324) (2,238) (221) (1,114)
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated income before income taxes $33,124 $35,221 $15,116 $17,182
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7. Income Taxes
The Company's effective tax rate for the six months ended June 30, 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 six months ended June 30, 1999 and 1998 was $9.6
million and $8.6 million, respectively.
Taxes paid for the six months ended June 30, 1999 and 1998 was $16.1
million and $12.5 million, respectively.
9. Acquisitions
In April 1999, the Company purchased all of the shares of Jansen
Tortechnik, a manufacturer of high quality sectional overhead doors located in
Surwold, Germany. The purchase price was approximately $7.7 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 May 1999, the Company announced that it had agreed to purchase all
of the outstanding capital stock of the paper machine clothing business of the
Geshmay group for approximately $232 million. Geshmay's principal operations are
located in Europe and the United States. The transaction is expected to be
completed during the third quarter of 1999.
6
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Three and Six Months Ended June 30, 1999
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto.
RESULTS OF OPERATIONS:
Net sales decreased to $175.8 million for the three months ended June 30, 1999
as compared to $179.6 million for the three months ended June 30, 1998. The
effect of the stronger U.S. dollar as compared to the second quarter of 1998 was
to decrease net sales by $2.1 million. Acquisitions made in 1998 added $1.8
million to second quarter 1999 net sales. Excluding these two factors, 1999 net
sales were down 2.0% as compared to 1998.
Net sales for the six months ended June 30, 1999 increased slightly to $357.4
million as compared to $355.8 million for the same period in 1998. The effect of
the stronger U.S. dollar as compared to the first six months of 1998 was to
decrease net sales by $2.8 million. Acquisitions made in 1998 added $6.6 million
to 1999 net sales. Excluding these two factors, 1999 net sales were down
slightly from 1998.
In the United States, after a relatively slow first quarter, net sales in the
second quarter of 1999 increased 1.0% resulting in a year to date decrease of
2.5% as compared to the same period in 1998. Net sales for the six months ended
June 30, 1999, as compared to the same period in 1998, decreased 2.8% in Canada
and were higher in Asia. European sales decreased in local currencies and were
down 2.4% in U.S. dollars.
Gross profit was 41.9% of net sales for the three months ended June 30, 1999 as
compared to 43.4% for the same period in 1998 bringing the six month result to
41.6% for 1999 as compared to 42.9% for 1998. Year to date variable costs as a
percent of net sales increased to 34.7% 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 34.2% 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 flat for the six months ended
June 30, 1999 as compared to the same period in 1998.
Operating income as a percentage of net sales decreased to 11.8% for the six
months ended June 30, 1999 from 13.1% 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 12.0% 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 1999, as part of this plan, the Company announced the closing of plants in
Weaverville, North Carolina and Ahlen, Germany.
7
<PAGE>
In April 1999, the Company purchased all of the shares of Jansen Tortechnik, a
manufacturer of high quality sectional overhead doors located in Surwold,
Germany. The purchase price was approximately $7.7 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 May 1999, the Company announced that it had agreed to purchase all of the
outstanding capital stock of the paper machine clothing business of the Geschmay
group for approximately $232 million. Geschmay's principal operations are
located in Europe and the United States. The transaction is expected to be
completed during the third quarter of 1999.
Reasons for the changes in operating results for the three month period ended
June 30, 1999 as compared to the corresponding period in 1998 are similar to
those which affected the six month comparisons, except where specifically noted.
LIQUIDITY AND CAPITAL RESOURCES:
Accounts receivable decreased $5.4 million since December 31, 1998. Excluding
the effect of the stronger U.S. dollar, accounts receivable were flat.
Inventories decreased $3.5 million during the six months ended June 30, 1999.
Excluding the effect of the stronger U.S. dollar, inventories increased $1.6
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. As part of the Geschmay acquisition noted above, the Company
intends to enter into a new debt agreement in the third quarter of this year.
Management believes that this new debt agreement will not only be used for the
Geschmay acquisition, but, in combination with informal commitments and expected
free cash flows, should be sufficient for operating requirements and normal
business opportunities which support corporate strategies.
In July 1999, the Company received $1.2 billion in commitments related to the
proposed new debt agreement, which when finalized, will result in a $750 million
five-year debt facility. The Company expects to utilize approximately $600
million of this facility to refinance current debt and fund the Geschmay
acquisition.
Capital expenditures for the six months ended June 30, 1999, including leases to
the extent they are required to be capitalized, were $10.7 million as compared
to $21.1 million for the same period last year. The Company anticipates that
capital expenditures, including leases, will be less than the $45 million
originally anticipated for the full year due to the pending acquisition of
Geschmay, which adds significant capacity to the Company's existing operations.
These expenditures will be financed 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, 2001.
8
<PAGE>
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
substantially completed the assessment, testing and remediation phases of this
program. 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 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.
As of June 30, 1999, total external expenditures related to the year 2000
program are approximately $1.0 million and have been funded from cash from
operations. Of the $1.0 million, $0.3 million was for consultants, $0.4 million
for hardware, $0.2 million for software and $0.1 million for communications
equipment. Future expenditures for this program are not expected to be
significant.
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, debt, year 2000 expenditures
and 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 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders held on May 6, 1999 items subject to a
vote of security holders were the election of nine directors and the election of
auditors.
In the vote for the election of nine members of the Board of Directors of the
Company, the number of votes cast for, and the number of votes withheld from,
each of the nominees were as follows:
<TABLE>
Nominee Number of Votes For Number of Votes Withheld Broker Nonvotes
Class A Class B Class A Class B Class A Class B
<S> <C> <C> <C> <C> <C> <C>
Francis L. McKone 21,407,134 56,523,940 172,884 - - -
Frank R. Schmeler 21,407,130 56,523,940 172,888 - - -
Thomas R. Beecher, Jr. 21,407,120 56,523,940 172,898 - - -
Charles B. Buchanan 21,406,424 56,523,940 173,594 - - -
Erland E. Kailbourne 21,114,883 56,523,940 465,135 - - -
Dr. Joseph G. Morone 21,439,434 56,523,940 140,584 - - -
Christine L. Standish 21,406,414 56,523,940 173,604 - - -
Allan Stenshamn 21,406,414 56,523,940 173,604 - - -
Barbara P. Wright 21,439,459 56,523,940 140,559 - - -
In the vote on the motion to appoint the firm of PricewaterhouseCoopers L.L.P.
as the Company's auditor for 1999, the number of votes cast for, the number cast
against, and the number of votes abstaining with respect to such resolution were
as follows:
Number of Votes For Number of Votes Against Number of Votes Abstaining Broker Nonvotes
Class A Class B Class A Class B Class A Class B Class A Class B
<C> <C> <C> <C> <C> <C> <C> <C>
21,558,611 56,523,940 15,421 - 5,986 - - -
</TABLE>
10
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
A report on Form 8-K was filed on June 1, 1999 containing exhibits only (no
items were reported).
Exhibit No. Description
11. Schedule of computation of net income per share and
diluted net income per share
27. Financial data schedule
11
<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: August 10, 1999
by /s/Michael C. Nahl
---------------------
Michael C. Nahl
Sr. Vice President and
Chief Financial Officer
<PAGE>
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)
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
1999 (1) 1998 (1) 1999 (1) 1998 (1)
<S> <C> <C> <C> <C>
------------ ------------- ------------ ------------
Net income $9,293 $10,596 $20,505 $21,650
============ ============= ============ ============
Weighted average number of shares 29,726,799 30,917,175 29,685,091 30,948,258
Effect of potentially dilutive securities:
Stock options (2) 364,093 611,725 286,313 511,334
------------ ------------- ------------ ------------
Weighted average number shares,
including the effect of potentially dilutive securities 30,090,892 31,528,900 29,971,404 31,459,592
============ ============= ============ ============
Net income per share $0.31 $0.34 $0.69 $0.70
============ ============= ============ ============
Diluted net income per share $0.30 $0.34 $0.68 $0.70
============ ============= ============ ============
Calculation of Weighted Average Number of Shares:
Weighted Average Shares
----------------------------------------------------------------
For the three months For the six months
Shares Days ended June 30, ended June 30,
-------------------
Activity Outstanding (1)Year to Date Quarter 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------- ------------- ------------ ------------
1998
Beginning balance 31,638,530 8 1,398,388
Treasury shares - 5,000 31,633,379 6 1,048,620
Options - 2,500 shares 31,635,954 1 174,784
Treasury shares - 411,100 31,212,429 7 1,207,111
Treasury shares - 400,000 30,800,339 7 1,191,173
Treasury shares - 13.700 30,786,224 1 170,090
ESOP shares - 12,783 30,799,394 25 4,254,060
Treasury shares - 26,000 30,772,608 3 510,043
ESOP shares - 41,378 30,815,237 13 2,213,249
Options - 600 shares 30,815,855 5 851,267
Options - 20,000 shares 30,836,459 9 1,533,305
Options - 8,000 shares 30,844,701 4 681,651
Options - 9,500 shares and
ESOP shares - 10,011 30,864,802 2 1 339,174 341,048
Options - 4,400 shares 30,869,335 1 1 339,223 170,549
Options - 8,000 shares 30,877,577 3 3 1,017,942 511,783
Options - 16,600 shares 30,894,678 15 15 5,092,529 2,560,332
Options - 1,600 shares 30,896,327 3 3 1,018,560 512,094
Options - 5,400 shares 30,901,890 4 4 1,358,325 682,915
Options - 1,500 shares 30,903,435 2 2 679,196 341,474
ESOP shares - 10,443 30,914,194 1 1 339,716 170,797
Options - 500 shares 30,914,709 10 10 3,397,221 1,707,995
Options - 7,400 shares 30,922,333 4 4 1,359,223 683,366
Directors shares - 2,004 30,924,397 4 4 1,359,314 683,412
Options - 600 shares 30,925,015 1 1 339,835 170,856
Options - 3,000 shares 30,928,106 2 2 679,739 341,747
Options - 1,200 shares 30,929,342 5 5 1,699,414 854,402
Options - 600 shares 30,929,961 4 4 1,359,559 683,535
ESOP shares - 9,096 30,939,331 3 3 1,019,978 512,807
Options - 10,000 shares 30,949,634 2 2 680,212 341,985
Options - 10,000 shares 30,959,936 3 3 1,020,657 513,148
Options - 2,500 shares 30,962,512 1 1 340,247 171,064
Options - 500 shares 30,963,027 9 9 3,062,277 1,539,598
Options - 3,000 shares 30,966,117 1 1 340,287 171,084
Treasury shares - 6,900 30,959,009 3 3 1,020,627 513,133
Options - 550 shares 30,959,575 3 3 1,020,645 513,142
Treasury shares - 120,000 30,835,948 5 5 1,694,283 851,822
ESOP shares - 11,371 30,848,049 1 1 338,990 170,431
------------- ------------
Totals 30,917,175 30,948,258
============= ============
<PAGE>
1999
Beginning balance 29,627,670 30 4,910,664
ESOP shares - 13,772 29,641,442 28 4,585,416
ESOP shares - 15,530 29,656,972 31 5,079,371
ESOP shares - 49,234 29,706,206 20 19 6,202,395 3,282,454
Options - 2,400 shares 29,708,606 10 10 3,264,682 1,641,359
ESOP shares - 13,350 29,721,956 6 6 1,959,689 985,258
Stock dividend adjust. - 1,592 29,723,548 4 4 1,306,530 656,874
Directors shares - 2,884 29,726,432 2 2 653,328 328,469
Options - 1,550 shares 29,727,982 1 1 326,681 164,243
Options - 1,400 shares 29,729,382 4 4 1,306,786 657,003
Options - 1,000 shares 29,730,382 4 4 1,306,830 657,025
Options - 400 shares 29,730,782 10 10 3,267,119 1,642,585
ESOP shares - 12,335 29,743,117 14 14 4,575,864 2,300,573
Options - 1,800 shares 29,744,917 16 16 5,229,876 2,629,385
ESOP shares - 13,827 29,758,744 1 1 327,019 164,413
------------ ------------
Totals 29,726,799 29,685,091
============ ============
</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 SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 9,646
<SECURITIES> 0
<RECEIVABLES> 184,687
<ALLOWANCES> 5,302
<INVENTORY> 193,384
<CURRENT-ASSETS> 405,081
<PP&E> 642,776
<DEPRECIATION> 336,542
<TOTAL-ASSETS> 847,169
<CURRENT-LIABILITIES> 170,573
<BONDS> 208,004
0
0
<COMMON> 32
<OTHER-SE> 314,089
<TOTAL-LIABILITY-AND-EQUITY> 847,169
<SALES> 357,394
<TOTAL-REVENUES> 357,394
<CGS> 208,652
<TOTAL-COSTS> 315,410
<OTHER-EXPENSES> 324
<LOSS-PROVISION> (202)
<INTEREST-EXPENSE> 8,738
<INCOME-PRETAX> 33,124
<INCOME-TAX> 12,919
<INCOME-CONTINUING> 20,505
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,505
<EPS-BASIC> 0.69
<EPS-DILUTED> 0.68
</TABLE>
