Financial Analysis

The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended March 31, 2026: Three months ended March 31, 2026 (in thousands) Point in Time Revenue Recognition Over Time Revenue Recognition Total Machine Clothing $ 164,900 $ 1,052 $ 165,952 Albany Engineered Composites: ASC 47,109 47,109 Other AEC 3,009 95,263 98,272 Total Albany Engineered Composites $ 3,009 $ 142,372 $ 145,381 Total revenues $ 167,909 $ 143,424 $ 311,333 The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended March 31, 2025: Three months ended March 31, 2025 (in thousands) Point in Time Revenue Recognition Over Time Revenue Recognition Total Machine Clothing $ 173,676 $ 1,021 $ 174,697 Albany Engineered Composites: ASC 38,920 38,920 Other AEC 4,077 71,080 75,157 Total Albany Engineered Composites $ 4,077 $ 110,000 $ 114,077 Total revenues $ 177,753 $ 111,021 $ 288,774 …

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Fair-Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. We had no Level 3 financial assets or liabilities at March 31, 2026 or at December 31, 2025, other than certain pension assets as indicated in our December 31, 2025 Annual Report on Form 10-K. Debt is carried at cost, which approximates fair value. The following table presents the fair-value hierarchy for our Level 1 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Other Intangible Assets The following table sets forth the gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of March 31, 2026 and December 31, 2025: March 31, 2026 (in thousands) Amortization life in years Gross carrying amount Accumulated amortization and other Net carrying amount Finite-lived assets: AEC Trademarks and trade names 6-15 $ 208 $ (208) $ AEC Technology 10-15 6,406 (4,193) 2,213 AEC Intellectual property 15 1,250 (527) 723 AEC Customer relationships 8-15 69,492 (64,532) 4,960 Heimbach Developed technology 9 8,813 (2,592) 6,221 Total Finite-lived intangible assets $ 86,169 $ (72,052) $ 14,117 Indefinite-lived intangible assets: Heimbach Trade name $ 6,326 $ $ 6,326 MC Goodwill 68,895 68,895 AEC Goodwill 114,053 (21,829) 92,224 Total Indefinite-lived intangible assets: $ 189,274 $ (21,829) $ 167,445 December 31, 2025 (in thousands) Amortization life in years Gross carrying amount Accumulated amortization and other Net carrying amount Finite-lived assets: AEC Trademarks and trade names 6-15 $ 208 $ (208) $ AEC Technology 10-15 6,530 (4,114) 2,416 AEC Intellectual property 15 1,250 (505) 745 AEC Customer relationships 8-15 69,560 (64,331) 5,229 Heimbach Developed technology 9 9,291 (2,709) 6,582 Total Finite-lived assets $ 86,839 $ (71,867) $ 14,972 Indefinite-lived intangible assets: Heimbach Trade name $ 6,456 $ $ 6,456 MC Goodwill 69,911 69,911 AEC Goodwill 114,428 (21,832) 92,596 Total Indefinite-li …

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Income Taxes The Company's effective income tax rate for the three months ended March 31, 2026 and 2025, is as follows: Three months ended March 31, 2026 2025 Effective income tax rate 33.1 % 26.6 % Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes Interim Reporting. Under this method, loss jurisdictions subject to valuation allowances cannot recognize a tax benefit with regard to their generated losses and are excluded from the annual effective tax rate calculation as their taxes will be recorded discretely in each quarter. Our 2026 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of state and local taxation, the impact of taxation upon foreign operations, and forecasted permanent differences. Our actual effective tax rates were 33.1% and 26.6% for the three months ended March 31, 2026 and 2025, respectively. The effective rate for the three months ended March 31, 2026 was higher than the effective tax rate for the three months ended March 31, 2025, largely due to the absence of favorable discrete tax items in the current year. The Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2013-2025. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. …

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Commitments and Contingencies Asbestos Litigation Albany International Corp. is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills. We were defending 3,682 claims as of March 31, 2026. The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented: (in thousands, except number of claims) Opening Number of Claims Claims Dismissed, Settled, or Resolved New Claims Closing Number of Claims Amounts Paid to Settle or Resolve For the period ended December 31, 2025 3,646 28 59 3,677 $ 173 For the period ended March 31, 2026 3,677 8 13 3,682 $ 10 We anticipate that additional claims will be filed against the Company and related companies in the future but are unable to predict the number and timing of such future claims. Due to the fact that information sufficient to meaningfully estimate a range of possible loss of a particular claim is typically not available until late in the discovery process, we do not believe a meaningful estimate can be made regarding the range of possible loss with respect to pending or future claims and therefore are unable to estimate a range of reasonably possible loss in excess of amoun …

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Financial Instruments The following table represents the Company's outstanding debt: (in thousands, except interest rates) March 31, 2026 December 31, 2025 Borrowings under the Amended Credit Agreement USD borrowings $ 373,000 $ 350,000 EUR borrowings 103,541 105,663 Total bank debt 476,541 455,663 Less: Current maturities of long-term debt Long-term debt $ 476,541 $ 455,663 Amended Credit Agreement On August 16, 2023, we entered into a $800 million unsecured committed Five-Year Revolving Credit Facility Agreement, amended on June 28, 2024 (collectively, the Amended Credit Agreement), which matures in August of 2028. The applicable interest rate for borrowings under the Amended Credit Agreement is based on both Term SOFR and EURIBOR plus a spread, which is based on our leverage ratio (as defined in the Amended Credit Agreement) at the time of a borrowing as follows: Leverage Ratio Commitment Fee ABR Spread Term Benchmark/ Daily Simple SOFR Spread <1.00:1.00 0.275% 0.500% 1.500% = 1.00:1.00 and < 2.00:1.00 0.300% 0.625% 1.625% = 2.00:1.00 and < 3.00:1.00 0.325% 0.750% 1.750% = 3.00:1.00 0.350% 1.000% 2.000% As of March 31, 2026, the applicable interest rate for borrowings under the Amended Credit Agreement was based on one-month term SOFR and one-month EURIBOR plus the spread, which was 1.625%. As of March 31, 2026, there was $476.5 million of borrowings outstanding under the Amended Credit Agreement and we had borrowings available of $323.5 million, based on our maxi …

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Recent Accounting Pronouncements Not Yet Adopted In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements. The ASU clarifies the applicability of Topic 270 and the form and content of interim financial statements. In addition, it requires entities to disclose material events occurring since the last annual reporting period. The guidance will be effective for interim periods beginning January 1, 2028 and can be applied on a prospective or retrospective basis. We are evaluating the disclosure impact of this guidance; however, the standard will not have an impact on the companys consolidated financial position, results of operations or cash flows. In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The ASU makes targeted amendments to hedge accounting guidance intended to better align hedge accounting results with an entitys risk management activities, including changes related to cash flow hedges, forecasted transactions, and certain debt-related hedging strategies. The guidance is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU No. 2025-06 to improve the accounting for costs related to inter …

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Pensions and Other Postretirement Benefit Plans The Company has defined benefit pension plans covering certain U.S. and non-U.S. employees. The Company also provides certain postretirement benefits to retired employees in the U.S. and Canada. The Company accrues the cost of providing these benefits during the active service period of the employees. The composition of the net periodic benefit cost/(income) for the three months ended March 31, 2026 and 2025, was as follows: Pension plans Other postretirement benefits (in thousands) 2026 2025 2026 2025 Components of net periodic benefit cost/(income): Service cost $ 238 $ 371 $ 9 $ 10 Interest cost 1,527 1,450 332 353 Expected return on assets (705) (1,232) Curtailment cost/(income) 0 (3,770) Settlement cost/(income) 0 2,170 Amortization of prior service cost/(income) (8) (6) (31) (31) Amortization of net actuarial loss 364 295 4 (8) Net periodic benefit cost/(credit) $ 1,416 $ (722) $ 314 $ 324 The amount of net periodic benefit cost/(credit) is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement. There were no material curtailments or settlements during the three months ended March 31, 2026. In the first three months of 2025, we took action to settle certain pension plan liabilities related to an MC pension plan in Switzerland, resulting in a net gain totaling $1.6 million. Service cost for defined benefit pension and …

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"Restructuring At MC, restructuring actions were taken in 2026 and 2025 to consolidate production activities across multiple facilities. For the three months ended March 31, 2026, these actions related to workforce reductions, manufacturing expenses related to ceased production and transfers of fixed assets to other locations. For the three months ended March 31, 2025, restructuring charges incurred included $3.1 million related to workforce reductions, fixed asset impairments and related costs, as well as charges of $0.2 million in cost of goods sold for the write-off of inventory, offset by a $1.8 million pension curtailment gain. At AEC, restructuring activities for the three months ended March 31, 2025 were related to reorganizational and workforce reduction costs, which resulted in restructuring expenses of $1.2 million. AEC did not incur any restructuring costs for the three months ended March 31, 2026. The following table summarizes charges reported in the Consolidated Statements of Income under ""Restructuring expenses, net"": Three months ended March 31, (in thousands) 2026 2025 Machine Clothing $ 2,676 $ 1,347 Albany Engineered Composites 1,168 Corporate 489 Total $ 3,165 $ 2,515 The following tables summarize charges by type of expense reported in the Consolidated Statements of Income under ""Restructuring expenses, net"" and ""Cost of goods sold"": Three months ended March 31, 2026 Total restructuring costs incurred Termination and other costs Asset Transfer Costs …

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"Revenue Recognition: Products and services provided under long-term contracts represent a significant portion of revenues in the Albany Engineered Composites segment and we account for these contracts over time, primarily using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be materially different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs. The LEAP engine is used on the Airbus A320neo, A321neo, Boeing 737 MAX, and COMAC C919 aircraft. AEC's largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and cases for CFM International's LEAP engine) were $48.3 million and $39.4 million for the three months ended March 31, 2026 and 2025, respectively. The total of Accounts receivable and Contract assets due from SAFRAN amounted to $57.1 million and $60.8 million as of March 31, 2026 and December 31, 2025, respectively. Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead projections, material costs, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. The cumulative changes in t …

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"Reportable Segments The Company is organized based on the nature of its products and is composed of two reportable segments, Machine Clothing (""MC"") and Albany Engineered Composites (""AEC""), each overseen by a segment president. These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker (""CODM""), reviews operating results for the purpose of allocating resources and assessing performance. Our CODM evaluates each segment's performance based on metrics such as net revenues, gross profit, and other key financial data, to assess performance and allocate resources that align with company-wide goals. The Company has not aggregated operating segments for purposes of identifying reportable segments. Machine Clothing: The Machine Clothing segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel products, nonwovens, fiber cement and for several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels are substantially the same in each region of the world in which we operate. We design, manufacture, and market paper machine clothing (used in the manufacture of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technological …

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"Significant Accounting Policies Basis of Presentation In the opinion of management, the accompanying consolidated financial information reflects all adjustments necessary for a fair presentation of Albany International Corp.'s (""Albany"", the ""Registrant"", the ""Company"", ""we"", ""us"", or ""our"") financial position, results of operations and cash flows for the interim periods presented, but does not include all disclosures normally required for the annual financial statements prepared in accordance with accounting principles generally accepted in the United States (""GAAP""). All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Companys Annual Report on Form 10-K for the year ended December 31, 2025. Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in the accounting for, among others, revenue recognition, contract profitability, allowances f …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Changes in Shareholders Equity The following tables summarize changes in Shareholders Equity for the three month period ended March 31, 2026: Class A Common Stock Additional paid-in capital Retained earnings Accumulated items of other comprehensive income Class A Treasury Stock Noncontrolling Interest Total Shareholders' Equity Shares Amount Shares Amount December 31, 2025 40,989 $ 41 $ 460,472 $ 976,373 $ (143,538) 12,686 $ (567,139) $ 5,893 $ 732,102 Net income/(loss) 15,281 168 15,449 Stock issued under incentive compensation plans 52 Taxes paid in lieu of share issuance (1,303) (1,303) Stock-based compensation 1,460 1,460 Dividends declared on Class A Common Stock, $0.28 per share (7,939) (7,939) Cumulative translation adjustments (5,206) (47) (5,253) Pension and postretirement liability adjustments 584 584 Derivative valuation adjustment and other (11) 326 315 March 31, 2026 41,041 $ 41 $ 460,629 $ 983,704 $ (147,834) 12,686 $ (567,139) $ 6,014 $ 735,415 The following table summarizes changes in Shareholders Equity for the three month period ended March 31, 2025: Class A Common Stock Additional paid-in capital Retained earnings Accumulated items of other comprehensive income Class A Treasury Stock Noncontrolling Interest Total Shareholders' Equity (in thousands) Shares Amount Shares Amount December 31, 2024 40,917 $ 41 $ 452,933 $ 1,065,763 $ (195,989) 9,845 $ (379,210) $ 5,409 $ 948,947 Net income/(loss) 17,355 (6) 17,349 Compensation and benefits paid or payable in sha …

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Subsequent Events We evaluated subsequent events through the issuance date of these financial statements in Form 10-Q. No material subsequent events were identified that require disclosure.

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