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What changed in ALBANY INTERNATIONAL CORP /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ALBANY INTERNATIONAL CORP /DE/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+271 added−286 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-26)

Top changes in ALBANY INTERNATIONAL CORP /DE/'s 2025 10-K

271 paragraphs added · 286 removed · 215 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

57 edited+20 added−27 removed38 unchanged
Biggest changeIn addition, AEC continues to leverage its 3D woven technology to develop differentiated processing solutions for high-temperature applications, including hypersonic flight components. AEC is working closely with its customers to develop high performance alternatives to traditional thermal protection and energy absorption requirements.
Biggest changeAs critical materials are constraining the US industrial base, 3D-woven components are a critical replacement for titanium structures for commercial and defense applications with compression strengths far exceeding traditional titanium properties. In 6 Index addition, AEC continues to leverage its 3D-woven technology to develop differentiated processing solutions for high-temperature applications, including hypersonic flight components.
AEC develops innovative solutions and manufactures advanced composite parts and assemblies for complex aerospace applications, using a range of core technologies, including its proprietary 3D-woven reinforced composites technology, traditional 2D laminated composite structures, automated fiber placement for both thermoplastics and thermoset composites as well as rigid installation for through-thickness reinforcements, and braided structures.
AEC develops innovative solutions and manufactures advanced composite parts for complex aerospace applications, using a range of core technologies, including its proprietary 3D-woven reinforced composites technology, traditional 2D laminated composite structures, automated fiber placement for both thermoplastics and thermoset composites as well as rigid installation for through-thickness reinforcements, and braided structures.
Some of the MC’s paper machine clothing competitors also supply paper machines, papermaking equipment, and aftermarket parts and services, and often bundle machine clothing products with original or rebuilt machines and/or aftermarket services. Albany Engineered Composites The primary competitive factors in the markets in which our AEC segment competes are product performance, delivery performance, quality, and price.
Some of the MC’s paper machine clothing competitors also supply paper machines, papermaking equipment, and aftermarket parts and services, and often bundle machine clothing products with original or rebuilt machines and/or aftermarket services. Albany Engineered Composites Competitive factors in the markets in which our AEC segment competes are product performance, delivery performance, quality, and price.
The strategy is to unlock further potential in focus areas, such as 3D weaving, resin transfer molding, large scale flat weaving, and the application of technically diverse composite materials and coatings, to create and certify groundbreaking products.
The team's strategy is to unlock further potential in focus areas, such as 3D weaving, resin transfer molding, large scale flat weaving, and the application of technically diverse composite materials and coatings, to create and certify groundbreaking products.
The dominant competitive factor is the relative importance the customer places on these performance benefits, which include fuel savings/emissions reductions due to lower weight, against the possible cost advantage of more traditional metal and composite components. Human Capital Resources At our company, we are proud to employ approximately 5,400 people across North America, South America, Europe, and Asia.
The dominant competitive factor is the relative importance the customer places on these performance benefits, which include fuel savings/emissions reductions due to lower weight, against the possible cost advantage of more traditional metal and composite components. Human Capital Resources At our company, we are proud to employ approximately 5,700 people across North America, South America, Europe, and Asia.
AEC provides highly engineered, advanced composite structures and assembly solutions to customers and platforms in the commercial and defense markets, as well as for space-launch vehicles and the emerging advanced air mobility market (“AAM”). The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group ("SAFRAN"), owns a 10% noncontrolling interest.
AEC provides highly engineered, advanced composite solutions to customers and platforms in the commercial and defense markets, as well as for space-launch vehicles and the emerging advanced air mobility market (“AAM”). The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group ("SAFRAN"), owns a 10% noncontrolling interest.
Suzanne Purdum, 56, Chief Human Resources Officer , joined the company in 2024. Ms. Purdum brings more than 25 years of experience in a number of HR disciplines including development and execution of HR strategy, organization design and effectiveness, learning and development, talent management, employee and labor relations, change management, and compensation and benefits.
Suzanne Purdum, 57, Chief Human Resources Officer , joined the company in 2024. Ms. Purdum brings more than 25 years of experience in a number of HR disciplines including development and execution of HR strategy, organization design and effectiveness, learning and development, talent management, employee and labor relations, change management, and compensation and benefits.
In addition, we manufacture polymer monofilaments, a basic raw material for all types of machine clothing, at our facility in Homer, New York, which supplies approximately 20% of our worldwide monofilament requirements. In our AEC segment, the primary raw materials are carbon fiber and resin.
In addition, we manufacture polymer monofilaments, a basic raw material for all types of machine clothing, at our facility in Homer, New York, which supplies approximately 20% of our worldwide monofilament requirements. 7 Index In our AEC segment, the primary raw materials are carbon fiber and resin.
In the case of mandated suppliers, AEC endeavors to enter into long-term supply agreements to help mitigate price and availability risks. Currently, the primary raw materials used in each segment are derived from petroleum, and are therefore sensitive to changes in the price of petroleum and petroleum intermediates.
In the case of mandated suppliers, AEC endeavors to enter into long-term supply agreements to help mitigate cost and availability risks. Currently, the primary raw materials used in each segment are derived from petroleum, and are therefore sensitive to changes in the cost of petroleum and petroleum intermediates.
Purdum held multiple leadership roles of increasing responsibility at Boeing, TRU Simulation + Training, Bell Helicopter, and Textron. Joseph M. Gaug, 61, Senior Vice President – General Counsel and Secretary, joined the Company in 2004. Mr.
Purdum held multiple leadership roles of increasing responsibility at Boeing, TRU Simulation + Training, Bell Helicopter, and Textron. Joseph M. Gaug, 62, Senior Vice President – General Counsel and Secretary, joined the Company in 2004. Mr.
Governance We are incorporated under the laws of the State of Delaware and are the successor to a New York corporation originally incorporated in 1895, which was merged into the Company in August 1987 solely for the purpose of 12 Index changing the domicile of the corporation.
Governance We are incorporated under the laws of the State of Delaware and are the successor to a New York corporation originally incorporated in 1895, which was merged into the Company in August 1987 solely for the purpose of changing the domicile of the corporation.
Prior to 2004 he was a principal at the law firm of McNamee, Lochner, Titus & Williams, PC, where, among other clients, he had represented the Company in various matters as outside counsel. Robert A. Hansen, 67, Senior Vice President and Chief Technology Officer, joined the Company in 1981. Mr.
Prior to 2004 he was a principal at the law firm of 11 Index McNamee, Lochner, Titus & Williams, PC, where, among other clients, he had represented the Company in various matters as outside counsel. Robert A. Hansen, 68, Senior Vice President and Chief Technology Officer, joined the Company in 1981. Mr.
New Business Ventures In 2024, the Company launched a New Business Ventures team dedicated to developing innovative products and business opportunities that address high growth opportunities which are adjacent to our current business portfolio utilizing our existing developed technologies, materials science and extensive expertise across our MC and AEC segments.
New Business Ventures The Company maintains a New Business Ventures team dedicated to developing innovative products and business opportunities that address high growth opportunities which are adjacent to our current business portfolio utilizing our existing developed technologies, materials science and extensive expertise across our MC and AEC segments.
Our current reports on Form 8-K, quarterly reports on Form 10-Q, and annual reports on Form 10-K, proxy statements for our annual stockholders' meetings and amendments to those reports are electronically filed with the Securities and Exchange Commission (the “SEC”), and all such reports and amendments to such reports filed subsequent to November 15, 2002, have been and will be made available, free of charge, through our website at www.albint.com as soon as reasonably practicable after such filing.
Our current reports on Form 8-K, quarterly reports on Form 10-Q, and annual reports on Form 10-K, proxy statements for our annual stockholders' meetings and amendments to those reports are electronically filed with the Securities and Exchange Commission (the “SEC”), and all such reports and amendments to such reports have been and will be 12 Index made available, free of charge, through our website at www.albint.com as soon as reasonably practicable after such filing.
Following is a table of Net revenues by segment for years ended December 31, 2024, 2023, and 2022.
Following is a table of Net revenues by segment for years ended December 31, 2025, 2024, and 2023.
The Albany Values are as follows: • Albany wins together (Teamwork) – We combine our individual strengths for collective success – We share knowledge to grow it – We embrace the advantage of our diversity • Count on each other (Trust & Respect) – We empower each other – We welcome input and value differences – We treat each other fairly and equitably • Own your actions (Accountability) – We do what we say and say what we do – We act with integrity – We pursue ever better solutions • Care about each other (Safety) – We are all responsible for a safe and sustainable environment – We make safe choices – We value well-being (mental, physical, and social) • Share your enthusiasm (Passion) – We are excited to be part of Albany – We put our hearts into every task – We lift each other up We live these values every day at Albany. 9 Index Sustainability Product Stewardship Our business is centered around driving success for our customers.
The Albany Values are as follows: • Albany wins together (Teamwork) – We combine our individual strengths for collective success – We share knowledge to grow it – We embrace the advantage of our diversity • Count on each other (Trust & Respect) – We empower each other – We welcome input and value differences – We treat each other fairly and equitably • Own your actions (Accountability) – We do what we say and say what we do – We act with integrity – We pursue ever better solutions • Care about each other (Safety) – We are all responsible for a safe and sustainable environment – We make safe choices – We value well-being (mental, physical, and social) • Share your enthusiasm (Passion) – We are excited to be part of Albany – We put our hearts into every task – We lift each other up We live these values every day at Albany.
AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 14% of the Company’s consolidated Net revenues in 2024.
AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 15% of the Company’s consolidated net revenues in 2025.
Cost of goods sold associated with customer-funded research was $5.6 million in 2024, $6.4 million in 2023, and $5.2 million in 2022.
Cost of goods sold associated with customer-funded research was $6.4 million in 2025, $5.6 million in 2024, and $6.4 million in 2023.
(in thousands) 2024 2023 2022 Machine Clothing $ 749,907 $ 670,768 $ 609,461 Albany Engineered Composites 480,708 477,141 425,426 Total net revenues $ 1,230,615 $ 1,147,909 $ 1,034,887 The table that sets forth certain segment financial performance metrics and selected balance sheet data appears in Note 3, Reportable Segments and Geographic Data, of the Notes to the Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
(in thousands) 2025 2024 2023 Machine Clothing $ 708,066 $ 749,907 $ 670,768 Albany Engineered Composites 474,747 480,708 477,141 Total net revenues $ 1,182,813 $ 1,230,615 $ 1,147,909 The table that sets forth certain segment financial performance metrics and selected balance sheet data appears in Note 3, Reportable Segments and Geographic Data, of the Notes to the Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
In addition, we can be held liable for damages resulting from our default and may be responsible to provide transition services to another supplier or the customer. Available Information Our principal executive offices are located at 216 Airport Drive, Rochester, New Hampshire 03867. Our telephone number is 603-330-5850 and our website is www.albint.com.
In addition, we can be held liable for damages resulting from our default and may be responsible to provide transition services to another supplier or the customer. Available Information Our principal executive offices are located at 325 Corporate Drive, Portsmouth, New Hampshire 03801. Our telephone number is 603-330-5800 and our website is www.albint.com.
In the U.S., this includes 401(k) matching, profit sharing, paid time off, health and dental insurance, and recognition programs, among others. We also emphasize work-life balance and well-being. We support global human rights, aligning our policies with the United Nations Global Compact and the Universal Declaration of Human Rights.
Our employees around the world enjoy competitive compensation and benefits. In the U.S., this includes 401(k) matching, profit sharing, generous vacation time, health and dental insurance, and recognition programs, among others. We also emphasize work-life balance and well-being. We support global human rights, aligning our policies with the United Nations Global Compact and the Universal Declaration of Human Rights.
Our team’s talent and creativity are our biggest strengths, and we are deeply committed to fostering a workplace culture that values respect, engagement, and well-being. We focus on our employees’ physical, mental, and social health, offer career development opportunities, and provide competitive pay and benefits.
Our team’s talent and creativity are our biggest strengths, and we are deeply committed to fostering a workplace culture that values respect, engagement, and well-being. We focus on our employees’ physical, mental, and social health, offer career development opportunities, and provide competitive pay and benefits. In addition, our people strategy is closely aligned with our business goals.
The process involves layering and interweaving fibers in a precise, computer-controlled process to create complex, high-strength parts that allows for the production of lightweight and strong composite parts with high-performance properties.
The process involves layering and interweaving fibers in a precise process to create complex, high-strength parts that allows for the production of lightweight and strong composite parts with high-performance properties, well-suited for use in aerospace, defense and industrial applications.
Although we do not expect meaningful revenue growth from New Business Ventures until 2027, the investments we are making today will be a pillar for new innovative product opportunities. Intellectual Property We continue to generate and develop proprietary intellectual property germane to the industries we serve. Our intellectual property includes patents and trademarks across multiple jurisdictions worldwide.
Although we do not expect meaningful revenue growth from New Business Ventures until 2027, the investments we are making today will be a pillar for new innovative product opportunities. Intellectual Property We continue to develop proprietary intellectual property that supports the industries we serve.
Technical and research expenses totaled $46.1 million in 2024, $40.6 million in 2023, and $39.9 million in 2022. In 2024, these costs were 3.7% of total Company Net revenues, including $16.3 million, or 3.4% of Net revenues, in our AEC segment. Research and development in the AEC segment include both Company-sponsored and customer-funded activities.
Technical and research expenses totaled $48.0 million in 2025, $46.1 million in 2024, and $40.6 million in 2023. In 2025, these costs were 4.1% of total Company Net revenues. Research and development in the AEC segment include both Company-sponsored and customer-funded activities.
Kleveland served as President and Chief Executive Officer of Textron Specialized Vehicles Inc. He has also served as the President of TRU Simulation + Training Inc. and Executive Vice President of Integrated Operations for Bell Helicopter Textron Inc. Prior to joining Textron in 2004, Mr. Kleveland was a fighter pilot in the Royal Norwegian Air Force (RNoAF). Robert D.
Prior to joining the Company, Mr. Kleveland served as President and Chief Executive Officer of Textron Specialized Vehicles Inc. He has also served as the President of TRU Simulation + Training Inc. and Executive Vice President of Integrated Operations for Bell Helicopter Textron Inc. Prior to joining Textron in 2004, Mr.
These products are also utilized in process industries outside of papermaking such as nonwovens, corrugators, building products, tannery and textile industries and designed to improve production rates and lower the overall cost of operation. EF product revenue accounted for less than 20% of the MC segment’s Net revenues.
PMC product revenues accounted for more than 80% of MC’s segment Net revenues. EF products: EF products are solution-focused, custom-designed fabrics and belts. These products are also utilized in process industries outside of papermaking such as nonwovens, corrugators, building products, tannery and textile industries and designed to improve production rates and lower the overall cost of operation.
In coordination with raw material providers and equipment OEMs, we are developing an enhanced value proposition for the market that further reduces weight and improves overall performance of identified products in applications across various industries.
In coordination with raw material providers and equipment OEMs, we are developing an enhanced value proposition for the market that further reduces weight and improves overall performance of identified products in applications across various industries. We are also innovating within our MC segment, with our material science focus on constantly improving our work within the polymer business.
Before 2000, he served the Company in a number of technical management and research and development positions in Europe and the U.S. John J. Tedone, 60, Vice President – Controller and Chief Accounting Officer , joined the Company in 2023. Prior to joining the Company, Mr.
Before 2000, he served the Company in a number of technical management and research and development positions in Europe and the U.S. Sean Valashinas, 54, Vice President – Controller and Chief Accounting Officer , joined the Company in 2025. Prior to joining the Company, Mr. Valashinas served as Vice President of Accounting, Treasury, and Tax at Resonetics.
The MC segment sells its products directly to customer end-users in countries across the globe. MC products, manufacturing processes, and distribution channels are substantially similar in each region of the world in which we 5 Index operate. No individual customer accounted for as much as 10% of MC segment Net revenues in any of the periods presented.
EF product revenue accounted for less than 20% of the MC segment’s Net revenues. The MC segment sells its products directly to customer end-users in countries across the globe. MC products, manufacturing processes, and distribution channels are substantially similar in each region of the world in which we operate.
Our strategy is to focus on the advantages inherent in our diverse workforce and promote an inclusive company culture. In 2024, we launched an updated set of Albany Values focused on actions our employees can take to set the foundation for our future growth and success.
Our strategy is to focus on the advantages inherent in combining our individual strengths for collective success and promoting an inclusive company culture. Our Albany Values focus on actions our employees can take to set the foundation for our future growth and success.
Our talent management strategy includes developing our internal talent for promotion, hiring the best people from outside the company when no internal candidate is available, and using our internship program to identify future talent and build the talent pipeline. We believe in continuous learning and development and offer various training opportunities, including on-the-job training, virtual courses, and external learning programs.
Our talent management strategy focuses on developing our internal talent for promotion, hiring the best people from outside the company when no internal candidate is available, and using our internship program to identify future talent and build the talent pipeline.
We continue to innovate and remain focused on developing and bringing to market proprietary products aimed at improving the energy and resource efficiency needed for our customers’ products and their production processes.
Supporting customers through innovation and performance We continue to innovate and remain focused on developing and bringing to market proprietary products aimed at improving the energy and resource efficiency needed for our customers’ products and their production processes. This includes working with our partner on Product Carbon Footprints, leveraging AI to accelerate insights.
All employees regularly participate in safety, ethics, and compliance training. Our four Leadership Training Programs are targeted at different segments of our employee population with programs for new and potential managers, more experienced leaders, and executives. Our employees around the world enjoy competitive compensation and benefits.
We believe in continuous learning and development and offer various training opportunities, including on-the-job training, virtual courses, and external learning programs. All employees regularly participate in safety, ethics, and compliance training. Our Leadership Training Programs are targeted at different segments of our employee population with programs for new and potential managers, more experienced leaders, and executives.
We continue to focus on the impact of our own operations by evaluating our risks and identifying actionable opportunities to drive meaningful improvement in our energy and emissions intensity, as well as our products’ environmental impact. 10 Index Water and Waste We are also committed to reducing waste, both from our own operations as well as our customers’, and we have a goal of zero waste to landfill by 2030 for our operations in the Americas and Europe.
We are also committed to reducing waste, both from our own operations as well as our customers’, and we have a goal of zero waste to landfill by 2030 for our operations in the Americas and Europe.
While we consider our intellectual property portfolio to be an important competitive advantage, in general, we do not believe that any single patent, trademark, license or other intellectual property right or group of related intellectual property rights is of such importance that its loss or termination would have a material adverse effect on our business taken as a whole. 7 Index Raw Materials Primary raw materials for our MC products are polymer monofilaments and fibers, which have generally been available from a number of suppliers.
While our portfolio provides meaningful competitive advantages, in general, we do not believe that any single patent, trademark, license or other intellectual property right or group of related intellectual property rights is of such importance that its loss or termination would have a material adverse effect on our business taken as a whole.
These preforms serve as the building blocks for an array of critical applications, ranging from thermal protection to energy absorption.
AEC is working closely with its customers to develop high performance alternatives to traditional thermal protection and energy absorption requirements. These preforms serve as the building blocks for an array of critical applications, ranging from thermal protection to energy absorption.
As a result, many employees in sales and technical functions have engineering degrees, paper mill experience, or other manufacturing experience in the markets in which we operate. Our market leadership position reflects our 6 Index commitment to technology innovation. This innovation has resulted in new products and enhancements across all of our product lines.
Technical expertise, judgment, and experience are critical in designing the appropriate clothing for each machine, position, and application. As a result, many employees in sales and technical functions have engineering degrees, paper mill experience, or other manufacturing experience in the markets in which we operate. Our market leadership position reflects our commitment to technology innovation.
In addition, our People strategy is closely aligned with our business goals. 8 Index Our top priority is keeping our employees safe. We aim for zero workplace injuries and track safety metrics throughout the year, such as Total Recordable Incident Rate (TRIR), Serious Injuries and Fatalities (SIFs), safety behaviors, and proactive safety actions taken.
Our top priority is keeping our employees safe. We aim for zero workplace injuries and track safety metrics throughout the year, such as Total Recordable Incident Rate (TRIR), Serious Injuries and Fatalities (SIFs), safety behaviors, and proactive safety actions taken. Our safety culture is reinforced by linking a portion of each Executive Officer's incentive compensation to achieving company-wide TRIR goals.
Energy is one of the top three cost components in the paper making process. Our machine clothing solutions use innovative technologies to reduce the amount of heat energy required for paper production.
As described above, our paper machine clothing products enable our paper-making customers to reduce their own environmental footprint by reducing their energy consumption, and improving both resource and operating efficiency. 9 Index For example, energy is one of the top three cost components in the paper making process; our machine clothing solutions use innovative technologies to reduce the amount of heat energy required for paper production.
Other significant AEC programs include the production of structures, parts and sub-assemblies for the Sikorsky CH-53K helicopter, F-35 fighter jet, Joint Air-to-Surface Standoff Missile ("JASSM"), Boeing 787 aircraft, and components and structures on other commercial, business jet, defense, space and AAM programs.
Other significant AEC programs include the CH-53K helicopter, F-35 fighter jet, Joint Air-to-Surface Standoff Missile ("JASSM"), Boeing 787 aircraft, Beta Alia, and other commercial, defense, space and AAM programs. AEC also supplies vacuum waste tanks for most Boeing commercial aircraft, as well as the fan case for the GE9X engine used on the Boeing 777 aircraft.
Executive Officers The following table sets forth certain information with respect to the executive officers of the Company as of February 26, 2025: Gunnar Kleveland, 55, President and Chief Executive Officer , joined the Company in 2023 and serves the Company as President and Chief Executive Officer. Prior to joining the Company, Mr.
This process also facilitates compliance and helps to articulate our unique stories of innovation and our value proposition. Executive Officers The following table sets forth certain information with respect to the executive officers of the Company: Gunnar Kleveland, 56, President and Chief Executive Officer , joined the Company in 2023 and serves the Company as President and Chief Executive Officer.
While much of our research activity supports existing products, we also engage in significant research and development activities for new technology platforms, products and product enhancements. Our MC segment products are custom-designed for each user, depending on the type, size, and speed of the machine, and the products being produced.
Research, Development and Technology We invest in research, new product development, and technical analysis with the objective of maintaining our technological leadership in each business segment. While much of our research activity supports existing products, we also engage in significant research and development activities for new technology platforms, products and product enhancements.
This fundamental design goal has driven the increased use of lightweight composite structures in an ever-broadening sphere of aerospace applications. We have applied learnings from our 130 years of experience manufacturing machine clothing to pioneer 3D weaving technologies to manufacture our composite material.
We have applied learnings from our 130 years of experience manufacturing machine clothing to pioneer 3D weaving technologies to manufacture our composite material.
Products are specifically designed for each section and position on a machine, the grade of product being produced, and the quality of the stock used. Technical expertise, judgment, and experience are critical in designing the appropriate clothing for each machine, position, and application.
Our MC segment products are custom-designed for each user, depending on the type, size, and speed of the machine, and the products being produced. Products are specifically designed for each section and position on a machine, the grade of product being produced, and the quality of the stock used.
Our safety culture is reinforced by linking a portion of each Executive Officer's incentive compensation to achieving company-wide TRIR goals. We work hard to create an inclusive and fair environment where a broad range of experiences, backgrounds, and skills are celebrated and respected. We believe that this culture boosts innovation and helps our people reach their full potential.
We work hard to create an inclusive and fair environment where a broad range of experiences, backgrounds, and skills are celebrated and respected. We believe that this culture boosts innovation and helps our people reach their full potential. Our hiring strategy seeks out people with varying backgrounds, knowledge, and experiences and results in 8 Index the most qualified candidates.
The financial results of the acquired company are included in the MC reportable segment. Albany Engineered Composites The Albany Engineered Composites (“AEC”) segment is a leader in innovative composite technology solutions and manufacturer of engineered components, structures and assemblies for demanding aerospace and defense applications.
No individual customer accounted for as much as 10% of MC segment Net revenues in any of the periods presented. 5 Index Albany Engineered Composites The Albany Engineered Composites (“AEC”) segment is a leader in innovative composite technology solutions and manufacturer of engineered components for demanding aerospace and defense applications.
Our hiring strategy draws from diverse backgrounds to find the most qualified candidates. As of December 31, 2024, our total workforce is 27.6% female. In the U.S., our headcount is approximately 2,000 employees, with 33% self-identifying as a minority.
As of December 31, 2025, our total workforce is 28.0% female. In the U.S., our headcount is approximately 2,400 employees, with 34.1% self-identifying as a minority.
He comes to the role with considerably broad leadership experiences, particularly in operational and customer-facing operations. From 2024 until becoming president, he had served as Division Chief Operating Officer for the business segment where he oversaw all operational aspects of the business and led the Sales & Marketing, Operations, Procurement and Human Resources functions.
Before becoming President, he served as Division Chief Operating Officer beginning in 2024, overseeing all operational aspects of the segment and leading the Sales & Marketing, Operations, Procurement, R&D and Human Resources functions.
Changes in the trade or regulatory compliance in any country that we have significant cash balances could make it more difficult to repatriate foreign earnings cost-effectively in the future. Research, Development and Technology We invest in research, new product development, and technical analysis with the objective of maintaining our technological leadership in each business segment.
We have a cash repatriation strategy that returns a certain amount of foreign current year earnings that are not indefinitely reinvested. Changes in the trade or regulatory compliance in any country that we have significant cash balances could make it more difficult to repatriate foreign earnings cost-effectively in the future.
Stein managed papermaking operations at Essity’s green field papermill in Alabama where he had risen to the position of Papermill Manager. Chris Stone, 52, President – Albany Engineered Composites , joined the company in 2024. He brings a deep knowledge of the A&D industry, and considerable broad experiences to his new role.
He earned a Bachelor’s degree in Chemical Engineering as well as an Executive MBA degree from Auburn University in Auburn, AL. Chris Stone, 53, President – Albany Engineered Composites , joined the company in 2024. He brings a deep knowledge of the A&D industry, and considerable broad experiences to his new role.
We also develop and own other intellectual property including copyrights, trade secrets, research and development, and engineering and manufacturing know-how, which make important contributions to our business. In addition, we have licensed intellectual property to and from third parties.
Our portfolio includes patents and trademarks registered worldwide, as well as, copyrights, trade secrets, research and development outputs, and engineering and manufacturing know-how. We also license intellectual property to and from third parties.
Prior to that, he was the Vice President Sales & Marketing/Applications for Americas, after having served in various other sales and marketing leadership roles since joining the Company, including Vice President Sales MC - North America, Regional Business Director and Sales & Service Engineer. Prior to joining the Company, Mr.
Earlier roles included Vice President Sales & Marketing/Applications for the Americas, as well as several other sales and marketing leadership positions such as Vice President Sales MC – North America, Regional Business Director. Prior to joining the company, Mr. Stein managed papermaking operations at Essity’s greenfield mill in Alabama, ultimately rising to the role of Papermill Manager.
Early in his career he worked in investment banking both domestically and internationally across a broad range of industries. Merle Stein, 48, President – Machine Clothing , joined the company in 2011. He has considerable experience in the paper and pulp industries and significant knowledge of the Machine Clothing business and a strategic understanding of the markets it serves.
Merle Stein, 49, President – Machine Clothing , joined the company in 2011. He brings deep experience in the pulp and paper industry, extensive knowledge of the Machine Clothing business, and a strong strategic understanding of its markets. His background includes broad leadership roles with a particular focus on operational excellence and customer-facing functions.
He previously spent 16 years at Kaman Corporation where he served as the Vice President, Finance and Chief Accounting Officer from 2007 to 2020. Earlier in his career he held finance and accounting roles of increasing responsibility at Diageo NA, United Technologies Corp., and KPMG.
Previously, he spent 17 years at Standex International Corporation, where he held roles of Chief Accounting Officer, Assistant Treasurer, and Vice President of Finance for the Standex Engineering Technologies Group. Mr. Valashinas began his career at PricewaterhouseCoopers and later held management roles at The Hershey Company.
This includes further exploration into increasing both the use of recycled materials in our products, and improving the recyclability of our products at the end of their useful life. In aerospace, weight savings that drive fuel efficiency are essential for aircraft producers, if the industry is to achieve its goals for sustainable aviation.
In aerospace, weight savings that drive fuel efficiency are essential for the industry to achieve its goals for sustainable aviation. This fundamental design goal has driven the increased use of lightweight composite structures in an ever-broadening sphere of aerospace applications.
We continue to look for opportunities to reduce waste generated across our operations and our products. As a first step we strive to separate our waste streams across our operations including general waste, hazardous waste, electronic waste, carbon fiber/raw material waste, and compostable material.
We continue to look for opportunities to reduce waste generated across our operations and our products, and where waste materials have market value, to ensure they are repurposed appropriately.
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A forming fabric assists in paper sheet formation and conveys the very wet sheet through the forming section. Pressing fabrics are designed to carry the sheet through the press section, where water is mechanically pressed from the sheet as it passes through the press nip.
Added
In 2025, approximately 35% of the AEC segment’s revenues were related to U.S. government contracts or programs. During the fourth quarter of 2025, the Company announced that it is exploring strategic alternatives for its structures assembly business including a potential sale of all or a part of the business at the Amelia Earhart Drive Facility in Salt Lake City.
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In the drying section, drying fabrics manage air movement and hold the sheet against heated cylinders to enhance drying and help control tight tolerances of final moisture content depending on the grade.
Added
This innovation has resulted in new products and enhancements across all of our product lines.
Removed
Process belts are used in the press section to increase dryness and enhance sheet properties, as well as in other sections of the machine to improve runnability and enhance sheet qualities. PMC product revenues accounted for more than 80% of MC’s segment Net revenues. EF products: EF products are solution-focused, custom-designed fabrics and belts.
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Our innovation allows us to produce new, hybrid polymer systems that not only increase our performance in the field, but accomplish this in a sustainable manner. Our expertise in materials extends into many of our core technologies, such as weaving, coatings, and extrusions, for example. This allows us to create new systems, improving resilience and temperature resistance.
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In August 2023, the Company completed the acquisition of Heimbach GmbH ("Heimbach"), a privately-held manufacturer of paper machine clothing and technical textiles. For additional information, see Note 24, Business Combination, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of our 2023 Annual Report on Form 10-K .
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Raw Materials Primary raw materials for our MC products are polymer monofilaments and fibers, which have generally been available from a number of suppliers.
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AEC also supplies vacuum waste tanks for most Boeing commercial aircraft, as well as the fan case for the GE9X engine used on the Boeing 777 aircraft. In 2024, approximately 36% of the AEC segment’s revenues were related to U.S. government contracts or programs.
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Sustainability Business Impact and Value Creation Our business is centered around driving success for our customers. Our products are designed for performance and consistency, while enabling our customers to meet their organizational goals around product performance, process efficiency, and product sustainability.
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With the change in the United States Presidential Administration, proposed tariffs by the new Administration may significantly adversely impact our results of operations. We have a cash repatriation strategy that manages a certain amount of foreign current year earnings that are not indefinitely reinvested.
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To support our customers we can design for circularity and product recycling at the end of life, and we can also design for lower Product Carbon Footprints. Our customer objectives guide us in raw material and supplier selection as well as specialized partnerships for product recycling and reuse.
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Our products are designed for performance and consistency, while enabling our customers to improve their environmental footprint through more sustainable and efficient processes and end products. As described above, our paper machine clothing products enable our paper-making customers to reduce their own environmental footprint by reducing their energy consumption, and improving both resource and operating efficiency.
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Since many of our customers have waste reduction and circularity goals, providing cutting edge solutions for product end of life has been an increasing focus for Albany International. Additionally, many of our customers have Scope 3 emissions reduction goals, therefore we focus on our own operational efficiency and emissions reduction as an integral part of our customers’ value chain.
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This technology has the ability to produce parts with complex geometries and high-performance properties, such as high strength, stiffness and resistance to impact and fatigue making it well-suited for use in aerospace, defense and industrial applications.
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Driving business value for Albany International As a global manufacturer, energy is a significant expense for Albany International, and therefore we have a goal of reducing our energy consumption and our associated Scope 1 and 2 emissions by 50% by 2030.
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Our AEC business also develops solutions that champion sustainable energy. Through innovative composite technologies and advanced manufacturing processes, we contribute to the creation of energy-efficient components, reducing the environmental footprint and bolstering the renewable energy sector. Carbon Emissions Footprint We are committed to responsible stewardship of the environment, which includes full compliance with environmental regulation everywhere we operate.
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Energy consumption reductions are critical both in supporting our customers in their organizational sustainability goals, and to advance our own business strategy and operational resilience.
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And we are committed to going beyond regulatory requirements, implementing responsible and intentional strategies to continually minimize our environmental impact. We are proud to partner with an independent third-party enterprise climate platform to enhance measurement, reporting, and reduction of our carbon emissions.
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We have been progressing a number of global on-site solar initiatives where there is a compelling business case, which provides operational cost savings to our facilities as well as securing a portion of our energy supply, in addition to reducing our emissions.
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We have enhanced our carbon accounting to include full disclosure of Scope 1, Scope 2 and Scope 3 emissions, which we report to CDP and in our annual Taskforce on Climate-related Financial Disclosures ("TCFD") Report.
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We have invested in a virtual power purchase agreement (“VPPA”) related to our U.S. operations, and where appropriate we have also been entering into renewable energy contracts, demonstrating our commitment to supporting our customers’ Scope 3 emissions reduction goals.
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This work has set the foundation for developing a climate transition plan to address both our products and services as well as our company operations and manufacturing footprint. In 2023, we signed a commitment letter with the Science Based Targets Initiative ("SBTi") that commits us to establishing near-term Science-Based Targets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks related to our liquidity and financial matters Fluctuations in currency exchange rates could adversely affect the Company’s business, financial condition, and results of operations. We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results.
Biggest changeIn addition, our liability insurance, which includes cyber insurance, might not be sufficient in type or amount to cover us against claims related to security incidents, cyberattacks and other related incidents. 23 Index Risks related to our liquidity and financial matters Fluctuations in currency exchange rates could adversely affect the Company’s business, financial condition, and results of operations.
Moreover, we cannot predict how the nature of competition in this segment may continue to evolve as a result of future consolidation among our competitors, or consolidation involving our competitors and other suppliers to our customers. 14 Index AEC is subject to significant risks related to the potential manufacture and sale of defective or non-conforming products.
Moreover, we cannot predict how the nature of 14 Index competition in this segment may continue to evolve as a result of future consolidation among our competitors, or consolidation involving our competitors and other suppliers to our customers. AEC is subject to significant risks related to the potential manufacture and sale of defective or non-conforming products.
Sales of components for a number of programs that are currently considered to be important to the future revenue-growth of AEC are pursuant to short-term purchase orders for a finite period or number of parts, or short-term supply agreements with terms of one to four years.
Sales of components for a number of programs that are currently considered to be important to the future revenue-growth of AEC are pursuant to short-term purchase orders for a finite period or number of parts, or supply agreements with terms of one to four years.
Additionally, although we maintain product liability insurance and other insurance at levels we believe to be prudent and consistent with industry practice to help mitigate these risks, these coverages may not be sufficient to fully cover AEC’s exposure for such risks, which could have a material adverse effect on AEC’s results of operations and cash flows.
Additionally, although we maintain product liability insurance at levels we believe to be prudent and consistent with industry practice to help mitigate these risks, these coverages may not be sufficient to fully cover AEC’s exposure for such risks, which could have a material adverse effect on AEC’s results of operations and cash flows.
Net assets were written-off in 2022 and the Company does not expect future write-offs in this country. However, we expect that there could be further indirect impacts. For instance, the conflict has already caused disruption in the availability of shipping options between Asia and Europe.
Net assets were written-off in 2022 and the Company does not expect future write-offs in this country. However, we expect that there could be further indirect impacts. For instance, the conflict has caused disruption in the availability of shipping options between Asia and Europe.
We closely monitor developments in sustainability- and climate change-related laws, regulations and policies for their potential effect on our business, however, we are currently not able to accurately predict the materiality of any potential costs associated with such developments.
We continue to closely monitor developments in sustainability- and climate change-related laws, regulations and policies for their potential effect on our business, however, we are currently not able to accurately predict the materiality of any potential costs associated with such developments.
Any failure by AEC to maintain its current supplier status under these programs, or any material change in their commercial or other terms, could have a material adverse effect on AEC’s future Net revenues and operating income. Our top ten customers in the MC segment accounted for a significant portion of our Net revenues in 2024.
Any failure by AEC to maintain its current supplier status under these programs, or any material change in their commercial or other terms, could have a material adverse effect on AEC’s future Net revenues and operating income. Our top ten customers in the MC segment accounted for a significant portion of our Net revenues in 2025.
Further, the difference between actual investment returns and our long-term return on asset assumptions would result in a change to our pension and OPEB expense, funded status, as well as our required contributions to the plans. We manage our plan assets in accordance with our investment management objectives, and they are subject to market volatility and other conditions.
Further, the difference between actual investment returns and our long-term return on asset assumptions would result in a change to our pension and OPEB expense, funded status, as well as our required 24 Index contributions to the plans. We manage our plan assets in accordance with our investment management objectives, and they are subject to market volatility and other conditions.
At the same time, the geographic sources of materials purchased (and the currencies in which these purchases are denominated) can vary depending on market 23 Index forces, and the Company may also shift production of its products between manufacturing locations, which can result in a change in the currency in which certain costs to produce such products are incurred.
At the same time, the geographic sources of materials purchased (and the currencies in which these purchases are denominated) can vary depending on market forces, and the Company may also shift production of its products between manufacturing locations, which can result in a change in the currency in which certain costs to produce such products are incurred.
Failure to accomplish these customer quality, delivery, and cost targets on any key program could result in material losses to the Company and have a material adverse impact on the amount and timing of anticipated AEC revenues, segment operating income, and cash flows, which could in turn have a material adverse impact on our consolidated financial results.
Failure to accomplish these customer quality, delivery, and cost targets on 20 Index any key program could result in material losses to the Company and have a material adverse impact on the amount and timing of anticipated AEC revenues, segment operating income, and cash flows, which could in turn have a material adverse impact on our consolidated financial results.
Evolving sustainability and social regulation, contractual requirements, and policy requirements, including transition risks associated with climate change, may pose risk to our market outlook, brand and reputation, financial outlook, 26 Index cost of capital, global supply chain, and production continuity, which may impact our ability to achieve long-term business objectives.
Evolving sustainability and social regulation, contractual requirements, and policy requirements, including transition risks associated with climate change, may pose risk to our market outlook, brand and reputation, financial outlook, cost of capital, global supply chain, and production continuity, which may impact our ability to achieve long-term business objectives.
Activist shareholders may push for changes in our business strategies, such as divestitures, acquisitions, cost-cutting measures, or shifts in focus. While some suggestions may align with broader market trends or opportunities, others may conflict with our long-term vision or operational capabilities, potentially leading to suboptimal business outcomes.
Activist shareholders may push for changes in our business strategies, such as divestitures, acquisitions, cost-cutting 28 Index measures, or shifts in focus. While some suggestions may align with broader market trends or opportunities, others may conflict with our long-term vision or operational capabilities, potentially leading to suboptimal business outcomes.
Risks related to our legal and regulatory environment The Company may fail to adequately protect its proprietary technology or intellectual property, which would allow competitors or others to take advantage of its research and development efforts. Proprietary trade secrets are a source of competitive advantage in each of our segments.
Risks related to our legal and regulatory environment The Company may fail to adequately protect its proprietary technology or intellectual property, which would allow competitors or others to take advantage of its research and development efforts. 25 Index Proprietary trade secrets are a source of competitive advantage in each of our segments.
These provisions could delay or prevent a change in control and could limit the price that investors might be willing to pay in the future for shares of our Common Stock. Our Certificate of Incorporation authorizes our Board of Directors to issue new series of preferred stock without stockholder approval.
These provisions could delay or prevent a change in control and could limit the price that investors might be willing to pay in the future for shares of our Common Stock. 27 Index Our Certificate of Incorporation authorizes our Board of Directors to issue new series of preferred stock without stockholder approval.
A sustained drop in oil prices, and related decline in the price of jet fuel, could prompt airlines to defer orders or delivery dates for such newer, more fuel-efficient airframes and aircraft engines, as the urgency to reduce fuel consumption may be lessened.
A sustained drop in oil prices, and related decline in the price of jet fuel, could prompt airlines to defer orders or delivery dates for such newer, more fuel-efficient airframes and aircraft engines, as the urgency to reduce fuel consumption 15 Index may be lessened.
If any audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. Government.
If any audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of 21 Index contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. Government.
These disputes could arise from allegations of infringement 25 Index by third parties of our intellectual property or from claims that our operations infringe the intellectual property rights of others. Such litigation can be costly, time-consuming, and may divert management's attention and resources from other business operations.
These disputes could arise from allegations of infringement by third parties of our intellectual property or from claims that our operations infringe the intellectual property rights of others. Such litigation can be costly, time-consuming, and may divert management's attention and resources from other business operations.
Our employees, subcontractors, suppliers, and agents, any companies we may acquire and their employees, subcontractors, suppliers and agents, and other third parties with which we associate, could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anti corruption laws or regulations.
Our employees, subcontractors, suppliers, and agents, any companies we may acquire and their employees, subcontractors, suppliers and agents, and other third parties with which we associate, 26 Index could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anti corruption laws or regulations.
Government’s Department of Defense ("DoD") Cybersecurity Maturity Model Certification (“CMMC”) program introduces new and unique risks for DoD contractors.” 21 Index The loss of one or more major customers could have a material adverse effect on Net revenues and profitability.
Government’s Department of Defense ("DoD") Cybersecurity Maturity Model Certification (“CMMC”) program introduces new and unique risks for DoD contractors.” The loss of one or more major customers could have a material adverse effect on Net revenues and profitability.
We are subject to tax audits by various tax authorities in many jurisdictions. Following the acquisition of Heimbach, the open tax years in these jurisdictions range from approximately 2013 to 2024. We regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.
We are subject to tax audits by various tax authorities in many jurisdictions. Following the acquisition of Heimbach, the open tax years in these jurisdictions range from approximately 2019 to 2024. We regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.
These entities are typically outside our control and may have access to our information with varying levels of security and cybersecurity resources, expertise, safeguards and capabilities. Breaches in our supply chain could compromise our data and adversely affect customer deliverables.
These entities are typically outside our control and may have access to 22 Index our information with varying levels of security and cybersecurity resources, expertise, safeguards and capabilities. Breaches in our supply chain could compromise our data and adversely affect customer deliverables.
In the AEC segment, our customer Safran accounted for approximately 37% of AEC's Net revenues in 2024, substantially all of which was under an exclusive long-term supply agreement relating to parts for the LEAP engine.
In the AEC segment, our customer Safran accounted for approximately 37% of AEC's Net revenues in 2025, substantially all of which was under an exclusive long-term supply agreement relating to parts for the LEAP engine.
Even if integration is successful, the financial and operational results may differ materially from our assumptions and forecasts due to unforeseen expenses, delays, conditions and liabilities. In addition, we may incur unanticipated costs or expenses following an acquisition, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, and other liabilities.
Even if integration is successful, the financial and operational results may differ materially from our assumptions and forecasts due to unforeseen expenses, delays, conditions and liabilities. In addition, we may incur unanticipated costs or expenses following an acquisition, including postclosing asset impairment charges, expenses associated with eliminating duplicate facilities, and other liabilities.
As part of our ongoing efforts to enhance operational efficiency and support our growth strategy, we are undertaking a significant upgrade to our Enterprise Resource Planning (ERP) system by transitioning to a cloud-based platform. This upgrade is expected to streamline our business processes, improve data accessibility, and provide greater scalability.
As part of our ongoing efforts to enhance operational efficiency and support our growth strategy, we implemented a significant upgrade to our Enterprise Resource Planning ("ERP") system by transitioning to a cloud-based platform. This upgrade is expected to streamline our business processes, improve data accessibility, and provide greater scalability.
We are vigilant in monitoring and addressing potential activism to safeguard our long-term interests and those of our shareholders. 28 Index Item 1B. UNRESOLVED STAFF COMMENTS None.
We are vigilant in monitoring and addressing potential activism to safeguard our long-term interests and those of our shareholders. Item 1B. UNRESOLVED STAFF COMMENTS None.
As of December 31, 2024, we had approximately $482 million of additional borrowing capacity under our $800 million revolving credit facility. The incurrence of additional indebtedness could increase the above-described risks associated with higher leverage. In addition, any such indebtedness could contain terms that are more restrictive than our current facilities.
As of December 31, 2025, we had approximately $344 million of additional borrowing capacity under our $800 million revolving credit facility. The incurrence of additional indebtedness could increase the above-described risks associated with higher leverage. In addition, any such indebtedness could contain terms that are more restrictive than our current facilities.
Changes in currency exchange rates could adversely affect the Company’s business, financial condition or results of operations. We have a substantial amount of indebtedness. At December 31, 2024, the Company had outstanding long-term debt of $319 million.
Changes in currency exchange rates could adversely affect the Company’s business, financial condition or results of operations. We have a substantial amount of indebtedness. At December 31, 2025, the Company had outstanding long-term debt of $456 million.
As of December 31, 2024, we have approximately $140.3 million of net operating loss (“NOL”) carryforwards in various taxing jurisdictions. Our ability to utilize the NOL carryforward could be adversely impacted by several factors, including but not limited to significant changes to tax legislation and lower than expected future earnings.
As of December 31, 2025, we have approximately $49.1 million of net operating loss (“NOL”) carryforwards in various taxing jurisdictions. Our ability to utilize the NOL carryforward could be adversely impacted by several factors, including but not limited to significant changes to tax legislation and lower than expected future earnings.
As of February 18, 2025, we had 30.9 million shares of Class A Common Stock outstanding. In addition, shares of Common Stock are issuable upon the vesting of outstanding equity awards, and certain shares are reserved for future issuance under our equity compensation plans. Shareholder activism can have a significant impact on our operations, strategy, and overall performance.
As of February 19, 2026, we had 28.3 million shares of Class A Common Stock outstanding. In addition, shares of Common Stock are issuable upon the vesting of outstanding equity awards, and certain shares are reserved for future issuance under our equity compensation plans. Shareholder activism can have a significant impact on our operations, strategy, and overall performance.
We are subject to numerous risks as a result of our growth strategy, including, but not limited to, the following: • We may invest time and capital pursuing acquisitions, joint ventures, or new products that do not materialize; • We may incur costs and expenses associated with any unidentified or potential liabilities of the acquired companies; • We may not achieve anticipated revenue and cost benefits from the acquisitions, joint ventures, or new product development; • We may encounter unforeseen difficulties in integrating acquired operations, joint ventures, or new businesses into our existing operations; and 19 Index • Our past or future acquisitions, joint ventures, or new businesses might not ultimately improve our competitive position and business.
We are subject to numerous risks as a result of our growth strategy, including, but not limited to, the following: • We may invest time and capital pursuing acquisitions, joint ventures, or new products that do not materialize; • We may incur costs and expenses associated with any unidentified or potential liabilities of the acquired companies; • We may not achieve anticipated revenue and cost benefits from the acquisitions, joint ventures, or new product development; • We may encounter unforeseen difficulties in integrating acquired operations, joint ventures, or new businesses into our existing operations; 19 Index • Even if integration is successful, the financial and operational results may differ materially from our assumptions and forecasts due to unforeseen expenses, delays, conditions and liabilities; and • Our past or future acquisitions, joint ventures, or new businesses might not ultimately improve our competitive position and business.
At December 31, 2024, our leverage ratio (as defined in our primary borrowing agreement) was 0.88 to 1.00, and we had borrowed $318 million under our $800 million revolving credit facility.
At December 31, 2025, our leverage ratio (as defined in our primary borrowing agreement) was 1.66 to 1.00, and we had borrowed $456 million under our $800 million revolving credit facility.
While long-term contracts provide an opportunity to realize steady and reliable revenues for extended periods, they pose a number of risks, such as program cancellations, reductions or delays in orders by customers, the termination of such contracts or orders, changes in the customers’ requirements that may not entitle AEC to additional compensation or payment, or the occurrence of similar events over which AEC has no or limited control. 20 Index Accounting for long-term contracts and related assets requires estimates and judgments related to our progress toward completion and the long-term performance on the contract.
While long-term contracts provide an opportunity to realize steady and reliable revenues for extended periods, they pose a number of risks, such as program cancellations, reductions or delays in orders by customers, the termination of such contracts or orders, changes in the customers’ requirements that may not entitle AEC to additional compensation or payment, or the occurrence of similar events over which AEC has no or limited control.
Additionally, many of AEC’s customers, as well as the companies supplied by our customers, are under pressure to improve returns on their substantial investments made in recent years in new technologies, new programs and new product introductions.
Although conditions have improved, similar disruptions could occur again and impact AEC's performance Additionally, many of AEC’s customers, as well as the companies supplied by our customers, are under pressure to improve returns on their substantial investments made in recent years in new technologies, new programs and new product introductions.
Net revenues are denominated in currencies other than the currency in which most costs of such sales are incurred.
Net revenues and associated costs are in the same currency, other non-U.S. Net revenues are denominated in currencies other than the currency in which most costs of such sales are incurred.
The Company also maintains stop-loss insurance policies to protect against catastrophic claims above certain limits. If actual results significantly differ from estimates, our financial condition, results of operations, and cash flows could be materially impacted by losses under these programs, as well as higher stop-loss premiums in future periods.
If actual results significantly differ from estimates, our financial condition, results of operations, and cash flows could be materially impacted by losses under these programs, as well as higher stop-loss premiums in future periods.
We may fail to realize all of the anticipated benefits of the acquisition of Heimbach or those benefits may take longer to realize than expected. We continue to devote significant management attention to integrating the business practices and operations of Heimbach.
Any of these factors could materially and adversely affect our financial condition and operating results. We may fail to realize all of the anticipated benefits of the acquisition of Heimbach or those benefits may take longer to realize than expected. We continue to devote significant management attention to integrating the business practices and operations of Heimbach.
In the event there is deterioration in business conditions or estimated cash flows beyond amounts previously or currently forecasted, there is a risk of impairments on our goodwill balance. Unanticipated changes in tax laws or exposure to additional tax liabilities could affect our future profitability. We are subject to income taxes in both the U.S. and various non-U.S. jurisdictions.
In the event there is deterioration in business conditions or estimated cash flows beyond amounts previously or currently forecasted, there is a risk of impairments on our goodwill and indefinite-lived intangible balances. Unanticipated changes in tax laws or exposure to additional tax liabilities could affect our future profitability.
Department of Defense Cybersecurity Maturity Model Certification ("CMMC") program, which will impact us in the coming years as it is formalized through the DFARS and those regulations are incorporated into our contracts for government programs.
This will impact us in the coming years as it is formalized through the DFARS and those regulations are incorporated into our contracts for government programs.
Unanticipated changes in foreign and domestic tax laws, regulations, or policies, or their interpretation and application by regulatory bodies, or exposure to additional tax liabilities could affect our future profitability and cash flows. Our domestic and international tax liabilities are dependent upon the distribution of income among these jurisdictions.
We are subject to income taxes in both the U.S. and various non-U.S. jurisdictions. Unanticipated changes in foreign and domestic tax laws, regulations, or policies, or their interpretation and application by regulatory bodies, or exposure to additional tax liabilities could affect our future profitability and cash flows.
However, these liabilities are difficult to assess and estimate due to unknown factors, including the severity of an illness and the number of incidents not reported. The accruals are based upon known facts and historical trends, and 24 Index management believes such accruals to be adequate.
However, these liabilities are difficult to assess and estimate due to unknown factors, including the severity of an illness and the number of incidents not reported. The accruals are based upon known facts and historical trends, and management believes such accruals to be adequate. The Company also maintains stop-loss insurance policies to protect against catastrophic claims above certain limits.
In addition, any economic conditions that led to sustained high interest rates could affect the airline’s ability to finance new aircraft and engine orders. 15 Index Weak or unstable economic conditions also increase the risk that one or more of our customers might be unable to pay outstanding accounts receivable, whether as the result of bankruptcy or an inability to obtain working capital financing from banks or other lenders.
Weak or unstable economic conditions also increase the risk that one or more of our customers might be unable to pay outstanding accounts receivable, whether as the result of bankruptcy or an inability to obtain working capital financing from banks or other lenders.
The effect of currency rate changes on gross profit in the MC segment can be difficult to anticipate because we use a global sourcing and manufacturing model. Under this model, while some non-U.S. Net revenues and associated costs are in the same currency, other non-U.S.
We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results. The effect of currency rate changes on gross profit in the MC segment can be difficult to anticipate because we use a global sourcing and manufacturing model. Under this model, while some non-U.S.
This will require a CMMC Third-Party Assessment Organization (C3PAO) assessment for Level 2 certification, as well as a DCMA Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) assessment for any required Level 3 certification. The CMMC compliance requirements are complex, the costs are significant, and the DoD timelines for certifications are aggressive.
AEC expects to be required to comply fully with CMMC Level 3 for certain programs as those requirements are further defined. This will require a DCMA Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) assessment for any required Level 3 certification. The CMMC compliance requirements are complex, the costs are significant, and the DoD timelines for certifications are aggressive.
In 2024, the Company recorded negative cumulative adjustments to the estimated profitability of long-term contracts in the amount of $43.2 million, primarily related to our CH-53K, Gulfstream, F-35, and GE Platforms programs.
In 2025, the Company recorded negative cumulative adjustments to the estimated profitability of long-term contracts in the amount of $165.8 million, primarily related to our CH-53K, Boeing waste tank, F-35, and Joint Strike Fighter programs.
Weather events such as more extreme and volatile temperatures, increased storm intensity and flooding, and more volatile precipitation leading to changes in lake and river levels may significantly impact our business.
We are unable to predict these events with certainty; however, we perform ongoing assessments of physical risk, including climate risk, to our business. Weather events such as more extreme and volatile temperatures, increased storm intensity and flooding, and more volatile precipitation leading to changes in lake and river levels may significantly impact our business.
We also rely on our supply chain to adequately detect and report cyber incidents, which could affect our ability to report or respond to cybersecurity incidents effectively or in a timely manner. 22 Index Our information technology systems, processes, sites and cloud-based providers may suffer interruptions or failures, or we may experience disruptions or challenges arising from the implementation or upgrading of new information technology systems, which may affect our ability to conduct our business.
Our information technology systems, processes, sites and cloud-based providers may suffer interruptions or failures, or we may experience disruptions or challenges arising from the implementation or upgrading of new information technology systems, which may affect our ability to conduct our business.
Our Board of Directors may change 27 Index the timing and amount of any future dividend payments or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders.
There can be no assurance, however, that we will pay dividends in the future in the amounts that we have in the past, or at all. Our Board of Directors may change the timing and amount of any future dividend payments or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders.
Given the reach of new and proposed regulations in the jurisdictions where we operate, there is the possibility that we may not be able to comply, or may not be able to comply in time.
Non-compliance could result in various penalties, including liability for significant monetary damages, fines, enforcement actions and/or sanctions. Given the reach of new and proposed regulations in the jurisdictions where we operate, there is the possibility that we may not be able to comply, or may not be able to comply in time.
We are subject to U.S. federal procurement regulations such as the DFARS clause 252.204-7012, based on the NIST 800-171 framework whose goal is protecting controlled unclassified information in non-federal systems and organizations. In 2024 , we continued efforts to comply with the forthcoming U.S.
We are subject to U.S. federal procurement regulations such as the DFARS clause 252.204-7012, based on the NIST 800-171 framework whose goal is protecting controlled unclassified information in non-federal systems and organizations. In 2025, we achieved the U.S. DoW CMMC Level 2 certification through an accredited CMMC Third-Party Assessment Organization (C3PAO) in support of our AEC business segment.
Significant consolidation of manufacturing operations in our MC segment over the past decade has reduced the number of facilities available to produce our products, and increased utilization significantly at remaining facilities. Not all product lines are produced at, or are capable of being produced at, all facilities.
Production of almost all of AEC’s other legacy and growth programs is located primarily in facilities in Salt Lake City, Utah, Boerne, Texas, or Queretaro, Mexico. Significant consolidation of manufacturing operations in our MC segment over the past decade has reduced the number of facilities available to produce our products, and increased utilization significantly at remaining facilities.
We expect such pressure to remain intense in all paper machine clothing markets, especially during periods of customer consolidation, plant closures, or when major contracts are being renegotiated. The growing sophistication of Asian competitors exacerbates this risk. Similar pressures in the markets in which AEC serves are highly competitive and price sensitive.
We expect such pressure to remain intense in all paper machine clothing markets, especially during periods of customer consolidation, plant closures, or when major contracts are being renegotiated. The increasing changes within our Asian competitors, particularly in China, heightens the challenge of maintaining sales in that region.
These monetary damages might not be subject to a contractual limit of liability or an exclusion of consequential or indirect damages and could be significant. In addition, our liability insurance, which includes cyber insurance, might not be sufficient in type or amount to cover us against claims related to security incidents, cyberattacks and other related incidents.
These monetary damages might not be subject to a contractual limit of liability or an exclusion of consequential or indirect damages and could be significant.
Based on our assessment of our manufacturing facilities for natural disaster risk, our three facilities in China and two facilities in Switzerland are located in areas of high risk for flooding. Our facilities in Belgium, the U.S., and Mexico are 17 Index at medium-high risk for flooding.
Not all product lines are produced at, or are capable of being produced at, all facilities. Based on our assessment of our manufacturing facilities for natural disaster risk, our three facilities in China and an office site in Switzerland are located in areas of high risk for flooding.
Physical impacts of climate change such as increased frequency of severe and extreme weather events could materially impact our facilities and production continuity. We are unable to predict these events with certainty; however, we perform ongoing assessments of physical risk, including climate risk, to our business.
Our facilities in Belgium, the U.S., and Mexico are at medium-high risk for flooding. Physical impacts of climate change such as increased frequency of severe and 17 Index extreme weather events could materially impact our facilities and production continuity.
During 2019, net revenues under the LEAP contract exceeded $210 million, only to significantly decline in the years that followed due to several factors outside of the Company's control, including the temporary Boeing 737 MAX groundings, other Boeing production issues, and the COVID-19 pandemic.
Net revenues from the LEAP contract peaked at over $210 million in 2019 but dropped sharply in subsequent years due to factors beyond the Company's control, such as Boeing production issues and the COVID-19 pandemic.
Changes in laws and regulations could also mandate significant and costly changes to the way we conduct our business, including increasing the cost of compliance, or could impose additional taxes. Such changes may result in contracts being terminated, greater costs to us, or could have a negative impact on our ability to obtain future work from government or other customers.
Changes in laws and regulations could mandate significant and costly changes to the way we conduct our business, including increasing the cost of compliance, or could impose additional taxes. Changes in sustainability reporting requirements may also impact our global operations as we continue collecting information for reports to be published according to new standards.
Given the current and planned future portfolio of U.S. Government-related business and based on the CMMC Proposed Rule released by the DoD in December 2023, AEC expects to be required to comply fully with CMMC Level 2 once the rule is finalized, and eventually CMMC Level 3 for certain programs as those requirements are further defined.
Given the current and planned future portfolio of U.S. Government-related business and based on the CMMC Proposed Rule released by the DoD in December 2023, AEC announced in December 2025 that it had achieved the U.S. Department of War (DoW) Cybersecurity Maturity Model Certification (CMMC) Level 2 certification through an accredited CMMC Third-Party Assessment Organization (C3PAO).
However, the implementation of this new ERP system involves substantial operational and internal controls risks. We are committed to managing these risks through careful planning, rigorous testing, and ongoing monitoring. We face legal, reputational and financial risks from any failure to protect customer and/or Company data from security incidents or cyberattacks.
Issues may exist that could rise to the level of significant deficiencies or, in some cases, material weaknesses. We face legal, reputational and financial risks from any failure to protect customer and/or Company data from security incidents or cyberattacks.
Changes in sustainability reporting requirements may impact our global operations as we continue collecting information for reports to be published according to new standards. We will face significant challenges in being able to implement separate but overlapping standard-setting initiatives, which may contain inconsistencies.
We will face significant challenges in being able to implement separate but overlapping standard-setting initiatives, which may contain inconsistencies. We are devoting substantial resources to sustainability reporting to ensure compliance; however, the reporting landscape is highly dynamic and uncertainty remains. Implementing separate but overlapping newly introduced standard-setting initiatives in short timetables may result in inconsistencies and higher costs.
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Such events drove a reduction in demand for LEAP components and disrupted supply chains for an extended period of time. While these factors have somewhat subsided, events like this can recur without notice, on this or other programs, and negatively impact the performance of the AEC segment.
Added
In addition, changes in shipping, fulfillment, and consumer packaging practices—including a shift from traditional corrugated boxes to alternative packaging formats such as bags, lighter‑weight materials, and smaller boxes—have reduced demand growth for certain packaging paper grades, which may further negatively affect demand for paper machine clothing used in those applications.
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Production of almost all of AEC’s other legacy and growth programs – including components for the F-35, fuselage components for the Boeing 787, components for the CH-53K helicopter, and missile bodies for Lockheed Martin’s JASSM air-to-surface missiles – is located primarily in facilities in Salt Lake City, Utah or Boerne, Texas.
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This challenge is further intensified by a preference among Chinese customers and government entities to source products from domestic manufacturers, which can adversely impact our ability to compete effectively in the Chinese market. Similar pressures in the markets in which AEC serves are highly competitive and price sensitive.
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For example, the European Union's Corporate Sustainability Reporting Directive (“CSRD”) requires new and expansive disclosures related to sustainability risks and opportunities, and its Corporate Sustainability Due Diligence Directive (“CSDDD”) requires extensive due diligence and reporting of actual and potential adverse impacts on human rights and the environment arising from our own operations and across our value chains, and to remediate any such adverse impacts.
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In addition, any economic conditions that led to sustained high interest rates could affect the airline’s ability to finance new aircraft and engine orders.
Removed
While we are devoting increasing amounts of resources to sustainability reporting to ensure compliance, the reporting landscape is highly dynamic and uncertainty remains. Intensive work must be done in short timetables to comply with newly-introduced sustainability standards, with resultant costs. Non-compliance could result in various penalties, including liability for significant monetary damages, fines, enforcement actions and/or criminal prosecution or sanctions.
Added
We have previously announced the initiation of a strategic review of our structures assembly business which could include a potential sale of all or part of a production site in Salt Lake City, Utah. In connection with this review, we will incur costs and expenses and may not succeed in completing any strategic initiatives identified.
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There can be no assurance, however, that we will pay dividends in the future in the amounts that we have in the past, or at all.
Added
A divesture of the business may not materialize or may not be completed without disruption. We may face additional risks related to such activities.
Added
For example, risks related to our ability to find appropriate buyers, obtain applicable contractual, regulatory, and/or governmental approvals, execute a transaction on favorable terms, separate divested business operations with minimal impact to our remaining operations, and effectively manage any transitional service arrangements. Further, any divestiture of the business may require us to recognize impairment charges.
Added
Accounting for long-term contracts and related assets requires estimates and judgments related to our progress toward completion and the long-term performance on the contract.
Added
We also rely on our supply chain to adequately detect and report cyber incidents, which could affect our ability to report or respond to cybersecurity incidents effectively or in a timely manner.
Added
However, the implementation of a new ERP system involves substantial operational and internal controls risks. We cannot assure that all potential risks or liabilities are adequately discovered, disclosed, or understood in each instance. We may fail to achieve anticipated synergies. In addition, internal controls over financial reporting of acquired companies may not be compliant with required standards.
Added
Our domestic and international tax liabilities are dependent upon the distribution of income among these jurisdictions.
Added
Changes to several international regulatory frameworks including the European Union's Corporate Sustainability Reporting Directive (“CSRD”) and Corporate Sustainability Due Diligence Directive (“CSDDD”) have increased thresholds and moved out compliance timeframes by several years.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Information Security plays a key role in shaping our cybersecurity strategy, ensuring alignment with industry standards and integration into our broader IT strategy. Regular reporting channels between the Director of Information Security, the Chief Information Officer, and the Chief Financial Officer facilitate a cohesive, well-informed approach to managing cybersecurity risks.
Biggest changeOur Senior Director of Information Security has over 35 years of IT experience, 12 of which have been spent leading the Company’s cybersecurity efforts. The Information Security plays a key role in shaping our cybersecurity strategy, ensuring alignment with industry standards and integration into our broader IT strategy.
It is led by our Chief Financial Officer and its actions are reported to our Board of Directors on a quarterly basis. Our Chief Information Officer and Director of Information Security, along with members of their respective teams, are responsible for identifying and managing cybersecurity risk.
It is led by our Chief Financial Officer and its actions are reported to our Board of Directors on a quarterly basis. Our Chief Information Officer and Senior Director of Information Security, along with members of their respective teams, are responsible for identifying and managing cybersecurity risk.
The Chief Information Officer's expertise in information technology, cybersecurity, and strategic planning, forged over 24 years, 20 of which has been spent in leadership at global publicly traded companies, is integral to our approach to cybersecurity risk management. This expertise is crucial in aligning our cybersecurity initiatives with business objectives, ensuring that our strategies effectively support the Company's overall goals.
The Chief Information Officer's expertise in information technology, cybersecurity, and strategic planning, forged over 25 years, 20 of which has been spent in leadership at global publicly traded companies, is integral to our approach to cybersecurity risk management. This expertise is crucial in aligning our cybersecurity initiatives with business objectives, ensuring that our strategies effectively support the Company's overall goals.
Regular active engagement in strategic discussions by the Board and Audit Committee ensures that cybersecurity considerations are effectively integrated into our overall business strategy and align with Company objectives and demonstrates the Board’s commitment to proactive cybersecurity oversight. Management Although the Board oversees our overall risk management, day-to-day management of cybersecurity risk is the responsibility of management.
Regular active engagement in strategic discussions by the Board and Audit Committee ensures that cybersecurity considerations are effectively integrated into our overall business strategy and align with Company objectives and demonstrates the Board’s commitment to proactive cybersecurity oversight. 30 Index Management Although the Board oversees our overall risk management, day-to-day management of cybersecurity risk is the responsibility of management.
In addition, the Chief Information Officer provides bi-annual updates to the Audit Committee and annual briefings to the full Board on our cybersecurity posture, strategy, and risk management. These reviews and updates are complemented by ongoing cybersecurity training for board members to enhance their decision-making and oversight effectiveness.
In addition, the Chief Information Officer and Senior Director of Information Security provide bi-annual updates to the Audit Committee and annual briefings to the full Board on our cybersecurity posture, strategy, and risk management. These reviews and updates are complemented by ongoing cybersecurity training for board members to enhance their decision-making and oversight effectiveness.
Our cybersecurity framework leverages internationally recognized standards, including the CIS 20 and the NIST SP 800-171 frameworks, and is required to comply with the Department of Defense CMMC.
Our cybersecurity framework leverages internationally recognized standards, including the CIS 20 and the NIST SP 800-171 frameworks, and is required to comply with the Department of War Cybersecurity Maturity Model Certification (CMMC).
In addition, we provide regular security awareness education and training for all employees and consultants, conduct internal “phishing” testing and training for “clickers,” require mandatory security training for all new hires and publish 29 Index periodic cybersecurity newsletters to highlight any emerging or urgent security threats.
In addition, we provide regular security awareness education and training for all employees and consultants, conduct internal “phishing” testing and training for “clickers,” require mandatory security training for all new hires and publish periodic cybersecurity newsletters to highlight any emerging or urgent security threats. We also carry insurance that provides protection against the potential losses arising from a cybersecurity incident.
The Chief Information Officer oversees our broader IT strategy, including cybersecurity, and presents quarterly to the Enterprise Risk Management Committee, bi-annually to the Audit Committee, and annually to the Board.
The Chief Financial Officer ensures that appropriate financial and operational implications of cybersecurity risk are considered and integrated into our Enterprise Risk Management Strategy. The Chief Information Officer oversees our broader IT strategy, including cybersecurity, and presents quarterly to the Enterprise Risk Management Committee, bi-annually to the Audit Committee, and annually to the Board.
The Director of Information Security, reporting to and collaborating with the Chief Information Officer, manages our Enterprise Cybersecurity team. Day-to-day responsibilities include the implementation of cybersecurity strategies, cybersecurity risk management, and enhancing defenses against evolving threats. Our Director of Information Security has over 30 years of IT experience, 10 of which have been spent leading the Company’s cybersecurity efforts.
The Senior Director of Information Security, reporting to and collaborating with the Chief Information Officer, manages our Enterprise Cybersecurity team. Day-to-day responsibilities include the implementation of cybersecurity strategies, cybersecurity risk management, and enhancing defenses against evolving threats.
We have a cybersecurity incident response and crisis management plan in place, which incorporates regular training and simulation exercises, including with senior management, to ensure readiness and efficacy in responding to cybersecurity incidents.
We regularly review and update our cybersecurity strategies, policies and procedures, taking into consideration the latest advancements in cybersecurity practices and changes to the threat landscape. 29 Index We have a cybersecurity incident response and crisis management plan in place, which incorporates regular training and simulation exercises, including with senior management, to ensure readiness and efficacy in responding to cybersecurity incidents.
Quarterly, the Chief Information Officer presents detailed cybersecurity reports to the Enterprise Risk Committee, focusing on strategic initiatives and evolving threats.
Quarterly, the Chief Information Officer and Senior Director of Information Security present detailed cybersecurity reports to the Enterprise Risk Committee, focusing on strategic initiatives and evolving threats. The Enterprise Risk Committee, meeting quarterly, evaluates cybersecurity within the broader organizational risk context, ensuring consistent assessment and management.
The Chief Financial Officer's expertise in financial risk management, strategic planning, and organizational leadership is instrumental in guiding the committee's discussions and decisions. The Chief Financial Officer ensures that appropriate financial and operational implications of cybersecurity risk are considered and integrated into our Enterprise Risk Management Strategy.
The Chief Financial Officer chairs quarterly Enterprise Risk Management Committee meetings to review and evaluate various risk factors, including cybersecurity. The Chief Financial Officer's expertise in financial risk management, strategic planning, and organizational leadership is instrumental in guiding the committee's discussions and decisions.
These reports include detailed analyses of potential threats, incident response readiness, and the effectiveness of existing cybersecurity measures.
Regular reporting channels between the Senior Director of Information Security, the Chief Information Officer, and the Chief Financial Officer facilitate a cohesive, well-informed approach to managing cybersecurity risks. These reports include detailed analyses of potential threats, incident response readiness, and the effectiveness of existing cybersecurity measures.
This multi-layered approach enables early detection and facilitates prompt response to potential cybersecurity threats. We regularly review and update our cybersecurity strategies, policies and procedures, taking into consideration the latest advancements in cybersecurity practices and changes to the threat landscape.
This multi-layered approach enables early detection and facilitates prompt response to potential cybersecurity threats.
Removed
We also carry insurance that provides protection against the potential losses arising from a cybersecurity incident.
Removed
The Enterprise Risk Committee, meeting quarterly, evaluates cybersecurity within the broader organizational risk context, ensuring consistent assessment and management. 30 Index The Chief Financial Officer chairs quarterly Enterprise Risk Management Committee meetings to review and evaluate various risk factors, including cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur facilities located outside the United States comprise approximately 4.9 million square feet, of which 4.3 million square feet are owned and 0.6 million square feet are leased. We consider these facilities to be in good condition and suitable for our purpose. The capacity associated with these facilities is adequate to meet production levels required and anticipated through 2025.
Biggest changeOur facilities located outside the United States comprise approximately 4.5 million square feet, of which 4.0 million square feet are owned and 0.5 million square feet are leased. We consider these facilities to be in good condition and suitable for our purpose. The capacity associated with these facilities is adequate to meet production levels required and anticipated through 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−2 removed4 unchanged
Biggest changeOur cash dividends, and the high and low prices per share of our Class A Common Stock, were as follows for the periods presented: Quarter Ended March 31 June 30 September 30 December 31 2024 Cash dividends per share $ 0.26 $ 0.26 $ 0.26 $ 0.27 Class A Common Stock prices: High $ 97.34 $ 91.16 $ 94.16 $ 87.46 Low $ 85.76 $ 79.75 $ 81.29 $ 67.92 2023 Cash dividends per share $ 0.25 $ 0.25 $ 0.25 $ 0.26 Class A Common Stock prices: High $ 113.72 $ 93.28 $ 96.89 $ 98.96 Low $ 85.28 $ 84.92 $ 83.53 $ 78.48 32 Index The graph below compares the cumulative 5-Year total return of holders of Albany International Corp.’s Common Stock with the cumulative total returns of the Russell 2000 index and a customized peer group of eighteen companies which are: Astronics Corp, Idex Corp, Barnes Group Inc, Enpro Inc, Tredegar Corp, Ducommun Inc, Curtiss-Wright Corp, Watts Water Technologies Inc, Hexcel Corp, Nordson Corp, Heico Corp, Esco Technologies Inc, Enerpac Tool Group Corp, Rogers Corp, Trimas Corp, Kadant Inc, National Presto Industries Inc, and Mativ Holdings Inc.
Biggest changeOur cash dividends, and the high and low prices per share of our Class A Common Stock, were as follows for the periods presented: Quarter Ended March 31 June 30 September 30 December 31 2025 Cash dividends per share $ 0.27 $ 0.27 $ 0.27 $ 0.28 Class A Common Stock prices: High $ 82.96 $ 70.94 $ 72.53 $ 60.44 Low $ 69.04 $ 59.75 $ 52.80 $ 41.42 2024 Cash dividends per share $ 0.26 $ 0.26 $ 0.26 $ 0.27 Class A Common Stock prices: High $ 97.34 $ 91.16 $ 94.16 $ 87.46 Low $ 85.76 $ 79.75 $ 81.29 $ 67.92 32 Index The graph below compares the cumulative 5-Year total return of holders of Albany International Corp.’s Common Stock with the cumulative total returns of the Russell 2000 index and a customized peer group of seventeen companies which are: BWX Technolgies Inc, Curtiss-Wright Corp, Ducommun Inc, Enpro Inc, Esca Technologies Inc, Franklin Electric Co Inc, Graco Inc, Helios Technologies Inc, Hexcel Corp, Kadant Inc, Mercury Systems Inc, Mueller Water Products Inc, Nordson Corp, SPX Technologies Inc, Standex International Corp, Trimas Corp, Woodward Inc.
On February 21, 2025, the Company's Board of Directors authorized the Company to repurchase shares up to $250 million (excluding any fees, commissions, taxes or other expenses related to such purchases), which replaces the 2021 authorization. The purchases may be made through open market purchases, privately negotiated transactions or otherwise.
On February 21, 2025, the Company's Board of Directors authorized the Company to repurchase shares up to $250 million (excluding any fees, commissions, taxes or other expenses related to such purchases), which supersedes the 2021 authorization. Share purchases may be made through open market purchases, privately negotiated transactions or otherwise.
According to Broadridge Financial Solutions, Inc., as of December 31, 2024, there were over 70,000 beneficial owners of our Class A Common Stock. Dividends are paid on our Class A Common Stock.
According to Broadridge Financial Solutions, Inc., as of December 31, 2025, there were approximately 70,000 beneficial owners of our Class A Common Stock. Dividends are paid on our Class A Common Stock.
The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2019 and tracks it through December 31, 2024. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2020 and tracks it through December 31, 2025. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* *$100 invested on 12/31/20 in stock or index, including reinvestment of dividends.
Copyright© 2025 Russell Investment Group. All rights reserved. Fiscal year ending December 31.
Copyright© 2026 Russell Investment Group. All rights reserved. Fiscal year ending December 31.
The timing and amount of any share repurchases will be based on the Company’s liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and capital structure. In total, the Company has repurchased 1,490,904 shares for a total cost of $124.0 million as of December 31, 2024.
The timing and amount of any share repurchases will be based on the Company’s liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and capital structure. Under this plan, the Company repurchased 2,682,859 shares in 2025 for a total cost of $173.3 million, including excise taxes and fees.
Issuer Purchases of Equity Securities during the three months ended December 31, 2024 Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Approx. dollar value of shares that may yet be purchased under the program (in thousands) October 1 to October 31, 2024 — $ — — $ 90,561 November 1 to November 30, 2024 20,174 79.21 20,174 88,963 December 1 to December 31, 2024 162,727 79.56 162,727 76,016 Total 182,901 182,901 $ 76,016 Item 6. [RESERVED]
Issuer Purchases of Equity Securities during the three months ended December 31, 2025 Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Approx. dollar value of shares that may yet be purchased under the program (in thousands) October 1 to October 31, 2025 — $ — — $ 93,445 November 1 to November 30, 2025 206,585 45.06 206,585 84,139 December 1 to December 31, 2025 153,682 48.72 153,682 76,648 Total 360,267 360,267 $ 76,648 Item 6. [RESERVED]
December 31, 2019 2020 2021 2022 2023 2024 Albany International Corp. $100.00 $98.09 $119.30 $134.28 $135.25 $111.47 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 Peer Group 100.00 107.29 128.14 122.40 141.47 152.39 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
December 31, 2020 2021 2022 2023 2024 2025 Albany International Corp. $100.00 $121.62 $136.90 $137.89 $113.65 $73.34 Russell 2000 100.00 114.82 91.35 106.82 119.14 134.40 Peer Group 100.00 111.36 103.77 131.72 149.51 198.27 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Of this, 182,901 shares were repurchased in 2024 for $14.5 million, 1,022,717 shares were repurchased in 2022 for $85.1 million and 285,286 shares were repurchased in 2021 for $24.3 million. As of December 31, 2024, we were authorized to repurchase shares up to $76.0 million.
As of December 31, 2025, we were authorized to repurchase shares up to $76.7 million.
Removed
The program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company's discretion. The share repurchase program does not have an expiration date.
Added
Under this plan, the Company repurchased 1,649,081 shares for a total cost of $136.2 million through February 21, 2025. Of this, 158,177 shares were repurchased in 2025 for $12.6 million.
Removed
The timing and amount of any share repurchases will be based on the Company’s liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and capital structure.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

69 edited+24 added−34 removed41 unchanged
Biggest changeThe following table summarizes technical and research expenses by business segment: (in thousands, except percentages) Years ended December 31, 2024 2023 2022 Machine Clothing $ 29,832 $ 24,651 $ 24,588 Albany Engineered Composites 16,265 15,976 15,353 Total technical and research expenses $ 46,097 $ 40,627 $ 39,941 % of net revenues 3.7 % 3.5 % 3.9 % Consolidated Technical and research expenses increased 13.5% as compared to 2023 and as a percentage of Net revenues increased from 3.5% in 2023 to 3.7% in 2024. • MC Technical and research expenses increased $5.2 million as compared to 2023, driven primarily by a $5.1 million increase related to Heimbach. • AEC Technical and research expenses increased $0.3 million as compared to 2023, driven by increased research material and labor costs.
Biggest changeGross profit as a percentage of revenues was 21%. 36 Index Operating Expenses The following table summarizes Consolidated Operating expenses by classification: (in thousands, except percentages) Years ended December 31, 2025 2024 2023 Selling, general and administrative expenses $ 218,326 $ 210,882 $ 214,915 Technical and research expenses 48,015 46,097 40,627 Restructuring expenses, net 13,682 13,438 282 Total operating expenses $ 280,023 $ 270,417 $ 255,824 Total operating expenses as a % of net revenues 23.7 % 22.0 % 22.3 % Consolidated SG&A expenses increased 3.5% as compared to 2024 and as a percentage of Net revenues, SG&A expenses increased from 17.1% in 2024 to 18.5% in 2025.
Payments for these commitments are not representative of all our future cash requirements, which will vary based on future needs. Critical Accounting Estimates For the discussion of our accounting policies, see Note 1, Accounting Policies , of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Payments for these commitments are not representative of all our future cash requirements, which will vary based on future needs. Critical Accounting Policies For the discussion of our accounting policies, see Note 1, Accounting Policies , of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
General Global, economic, and political conditions, changes in raw material and commodity prices and supply, labor availability and costs, inflation, interest rates, potential changes in U.S. government policy positions, including changes in Department of Defense policies or priorities, geopolitical conflicts and strained intercountry relations, U.S. and non-U.S. tax law changes, foreign currency exchange rates, sanctions, tariffs, energy costs and supply, and the impact from natural disasters and weather conditions create uncertainties that could impact our businesses.
General Global, economic, and political conditions, changes in raw material and commodity prices and supply, labor availability and costs, inflation, interest rates, potential changes in U.S. government policy positions, including changes in Department of Defense policies or priorities, geopolitical conflicts and strained international relations, U.S. and non-U.S. tax law changes, foreign currency exchange rates, sanctions, tariffs, energy costs and supply, and the impact from natural disasters and weather conditions create uncertainties that could impact our businesses.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results or Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 26, 2024, incorporated herein by reference.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results or Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 26, 2025, incorporated herein by reference.
For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses.
For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or 40 Index administrative cost allocations, which are treated as period expenses.
Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such endeavor to date, there 44 Index can be no assurance that we will be able to cost-effectively repatriate funds in the future.
Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such endeavor to date, there can be no assurance that we will be able to cost-effectively repatriate funds in the future.
MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes included under Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. The MD&A generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes included under Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. The MD&A generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make assumptions and estimates that directly affect the amounts reported in the Consolidated Financial Statements. Each of these assumptions is subject to uncertainties and changes in those assumptions or judgments which can affect our results of operations.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make assumptions and estimates that directly affect the amounts reported 43 Index in the Consolidated Financial Statements. Each of these assumptions is subject to uncertainties and changes in those assumptions or judgments which can affect our results of operations.
The AEC segment's current portfolio of non-3D programs includes components for the CH-53K helicopter, components for the F-35, missile bodies for Lockheed Martin’s JASSM air-to-surface missiles, fuselage components for the Boeing 787 aircraft, vacuum waste tanks for Boeing commercial aircraft and components and structures for other commercial, business jet, defense, and space and AAM programs.
The AEC segment's current portfolio of non-3D programs includes components for the CH-53K helicopter, components for the F-35, missile bodies for Lockheed Martin’s JASSM air-to-surface missiles, fuselage components for the Boeing 787 aircraft, vacuum waste tanks for Boeing commercial aircraft and components and structures for other commercial, defense, and space and AAM programs.
Business Environment Overview and Trends We conduct our business under two reportable segments: Machine Clothing (“MC”) and Albany Engineered Composites (“AEC”) each rooted in similar materials sciences know-how that forms a common approach to customer 34 Index value proposition in design and manufacturability.
Business Environment Overview and Trends We conduct our business under two reportable segments: Machine Clothing (“MC”) and Albany Engineered Composites (“AEC”) each rooted in similar materials sciences know-how that forms a common approach to customer value proposition in design and manufacturability.
This method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change. When adjustments in estimated contract 45 Index revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs.
This method requires significant judgment and estimation, which could be considerably 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.
Measurement of our postretirement benefit obligations requires the use of several assumptions about factors that will affect the amount and timing of future benefit payments. The assumed health care cost trend rates are the most critical estimates for measurement of the postretirement benefit obligation.
Measurement of our postretirement benefit obligations requires the use of several assumptions about factors that will affect the amount and timing of future benefit payments. The assumed health care cost trend rates are the most 44 Index critical estimates for measurement of the postretirement benefit obligation.
AEC competes on the basis of its innovative technology solutions, extensive composite manufacturing capabilities and capacity that enable it to offer high quality specific part and assembly solutions that achieve its customers’ application performance requirements.
AEC competes on the basis of its innovative technology solutions, extensive composite manufacturing capabilities and 34 Index capacity that enable it to offer high quality specific part and assembly solutions that achieve its customers’ application performance requirements.
After reviewing the positive and negative evidence available as of December 31, 2024, we continue to assert that we will more likely than not be able to utilize the net deferred tax assets.
After reviewing the positive and negative evidence available as of December 31, 2025, we continue to assert that we will more likely than not be able to utilize the net deferred tax assets.
The AEC segment primarily serves customers in the commercial and defense aerospace market through both engine and airframe applications. AEC's working capital levels rose sharply in the last several years in line with the segment's growth.
The AEC segment primarily serves customers in the commercial and defense aerospace market through both engine and airframe applications. AEC's working capital levels rose steadily in the last several years in line with the segment's growth.
Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price, as applicable. Goodwill and Intangible assets Goodwill is not amortized, but is tested for impairment at least annually.
Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price, as applicable. 45 Index Goodwill and Intangible assets Goodwill is not amortized, but is tested for impairment at least annually.
The Company seeks to maintain the cash-generating potential of this business by maintaining lower costs through a continued focus on cost-reduction initiatives and strategic investment, and by vigorously using our differentiated and technically superior products to reduce our customers’ total cost of operation and improve their paper quality.
The Company seeks to maintain the cash-generating potential of this business by vigorously using our differentiated and technically superior products to reduce our customers’ total cost of operation while improving their paper quality, and by maintaining lower costs through a continued focus on cost-reduction initiatives and strategic investment.
In 2024, approximately 36% of AEC net revenues were related to U.S. government contracts or programs. The AEC segment is dependent on global supply chains and has experienced disruptions in recent years. In addition, higher inflation levels increased material costs, higher labor rates and other supplier costs that have impacted the AEC segment’s results of operations.
In 2025, approximately 35% of AEC net revenues were related to U.S. government contracts or programs. The AEC segment is dependent on global supply chains and has experienced disruptions in recent years. In addition, higher inflation levels increased material costs, higher labor rates and other supplier costs that have impacted the AEC segment’s results of operations.
For more information on the revolving credit agreement, see Note 17, Financial Instruments, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. As of December 31, 2024, $97.6 million of our total cash and cash equivalents was held by non-U.S. subsidiaries.
For more information on the revolving credit agreement, see Note 17, Financial Instruments, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. As of December 31, 2025, $91.6 million of our total cash and cash equivalents was held by non-U.S. subsidiaries.
Our analysis gives consideration to recent plan performance and historical returns; however, the assumptions are primarily based on long-term, prospective rates of return. The weighted average long-term rate of return on plan assets for our defined benefit pension plans is 4.98% for 2024.
Our analysis gives consideration to recent plan performance and historical returns; however, the assumptions are primarily based on long-term, prospective rates of return. The weighted average long-term rate of return on plan assets for our defined benefit pension plans is 4.82% for 2025.
Net operating losses, which make up the majority of the deferred tax assets, have an unlimited carryforward period in Germany and we expect continued improvements in the business post-acquisition due to synergies and efficiencies that will be realized in the near future. The current net deferred tax asset position at Heimbach GmbH as of December 31, 2024 is $8.4 million.
Net operating losses, which make up the majority of the deferred tax assets, have an unlimited carryforward period in Germany and we expect continued improvements in the business post-acquisition due to synergies and efficiencies that will be realized in the near future. The current net deferred tax asset position at Heimbach GmbH as of December 31, 2025 is $16.5 million.
At AEC, restructuring activities were related to reductions in the workforce at various AEC locations, which resulted in restructuring expenses of $3.6 million for the year ended 2024. Restructuring expenses incurred at MC and AEC during 2023 were not significant. During the first quarter of 2025, the Company decided to consolidate headquarters in Portsmouth, NH.
At AEC, restructuring activities were related to reductions in the workforce at various AEC locations, which resulted in restructuring expenses of $3.3 million for the year ended 2025 and $3.6 million for the year ended 2024. During the first quarter of 2025, the Company decided to consolidate headquarters in Portsmouth, NH.
AEC’s largest aerospace customer is the SAFRAN Group ("SAFRAN") and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM International’s LEAP engine) accounted for approximately 14% of the Company’s consolidated Net revenues in 2024. The AEC segment, through ASC, also supplies 3D-woven composite fan cases for the GE9X engine.
AEC’s largest aerospace 35 Index customer is the SAFRAN Group ("SAFRAN") and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM International’s LEAP engine) accounted for approximately 15% of the Company’s consolidated Net revenues in 2025. The AEC segment, through ASC, also supplies 3D-woven composite fan cases for the GE9X engine.
In addition, as the AEC segment ramps-up larger complex programs, such as CH-53K and Gulfstream, it continues to face challenges in staffing and training its workforce to support production rates, which has impacted operational productivity, particularly at its Salt Lake City facility, and contributed to increased labor and scrap costs.
In addition, as the AEC segment ramps-up larger complex programs, such as those associated with the CH-53 program, it continues to face challenges in staffing and training its workforce to support production rates, which has impacted operational productivity, particularly at its Salt Lake City facility, and contributed to increased labor and scrap costs.
The Company has targeted for repatriation $163.0 million of current year and prior year earnings of the Company’s foreign operations. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were approximately $132.9 million, and are intended to remain indefinitely invested in foreign operations.
The Company has targeted for repatriation $122.2 million of current year and prior year earnings of the Company’s foreign operations. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were approximately $132.1 million, and are intended to remain indefinitely invested in foreign operations.
If it was determined that a valuation allowance was required, a deferred tax expense of $8.4 million as of December 31, 2024 would be required to create a reserve against those net deferred tax assets. The assessment of the need for a valuation allowance could change in future periods if additional negative evidence is observed.
If it was determined that a valuation allowance was required, a deferred tax 38 Index expense of $16.5 million as of December 31, 2025 would be required to create a reserve against those net deferred tax assets. The assessment of the need for a valuation allowance could change in future periods if additional negative evidence is observed.
Our subsidiaries outside of the United States may also maintain working capital lines with local banks. Under our $800 million unsecured credit agreement, $318.5 million of borrowings were outstanding as of December 31, 2024.
Our subsidiaries outside of the United States may also maintain working capital lines with local banks. Under our $800 million unsecured credit agreement, $455.7 million of borrowings were outstanding as of December 31, 2025.
We will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts. 40 Index Segment Results of Operations Machine Clothing Segment The MC segment accounted for 61% of our consolidated revenues during 2024.
We will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts. 39 Index Segment Results of Operations Machine Clothing Segment The MC segment accounted for 59.9% of our consolidated revenues during 2025.
Repatriating such cash from certain jurisdictions, which is currently considered to be indefinitely reinvested in foreign operations, may also result in additional taxes. We have also returned cash to shareholders through dividends and share repurchases. We paid dividends of $32.5 million and $31.2 million during 2024 and 2023, respectively. The Company repurchased 182,901 shares during 2024 for $14.2 million.
Repatriating such cash from certain jurisdictions, which is currently considered to be indefinitely reinvested in foreign operations, may also result in additional taxes. We have also returned cash to shareholders through dividends and share repurchases. We paid dividends of $32.5 million and $32.5 million during 2025 and 2024, respectively.
The Company provides financial assurance, such as payment guarantee and letters of credit and surety bonds, primarily to support workers’ compensation programs and customs clearance, of less than $12 million. There were no material changes in the Company’s off-balance sheet arrangements during 2024. During the first quarter of 2025, the Company decided to consolidate headquarters in Portsmouth, NH.
The Company is party to certain off-balance sheet arrangements, including certain guarantees. The Company provides financial assurance, such as payment guarantee and letters of credit and surety bonds, primarily to support workers’ compensation programs and customs clearance, of less than $12 million. There were no material changes in the Company’s off-balance sheet arrangements during 2025.
Backlog differs from unsatisfied performance obligations for contracts disclosed in Note 2, Revenue Recognition, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K, which excludes unsatisfied performance obligations with an original expected duration of one year or less.
Backlog differs from unsatisfied performance obligations for contracts disclosed in Note 3, Revenue Recognition, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K, which excludes unsatisfied performance obligations with an original expected duration of one year or less. 41 Index Backlog at AEC was $1.4 billion as of December 31, 2025.
The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement, including resolution of related appeals and/or litigation process, if any.
The amount of tax benefit recognized is measured as the largest amount of benefit that has a greater than 50% likely of being realized upon ultimate settlement, including resolution of any administrative appeals or litigation process, where applicable.
In addition, AEC has long-term contracts in which the selling price is fixed. In accounting for those contracts, we estimate the profit margin expected at the completion of the contract and recognize a pro-rata share of that profit during the course of the contract using a cost-to-cost approach.
In accounting for those contracts, we estimate the profit margin expected at the completion of the contract and recognize a pro-rata share of that profit during the course of the contract using a cost-to-cost approach.
Estimating the fair value of reporting units requires the use of estimates and significant judgments, including but not limited to revenue growth rates, operating margins, discount rates, and future market conditions. It is possible that these judgments and estimates could change in future periods.
Estimating the fair value of reporting units requires the use of estimates and significant judgments, including but not limited to revenue growth rates, operating margins, discount rates, and future market conditions. It is possible that these judgments and estimates could change in future periods. Impairment assessments inherently involve management judgments regarding a number of assumptions such as those described.
We estimate these contractual commitments amount to approximately $538 million as of December 31, 2024, of which we expect to pay $62 million within the next year.
We estimate these contractual commitments amount to approximately $595.2 million as of December 31, 2025, of which we expect to pay $41.7 million within the next year.
Restructuring activities were related to reductions in the workforce at various AEC locations and resulted in restructuring expenses of $3.6 million, further reducing Operating income. 42 Index Backlog Backlog at AEC represents the aggregate dollar value of products and services for the given term of our contracts with customers where we have enforceable rights, including both funded and unfunded contract scope, for which products have not been provided or services have not been performed, but excluding unexercised contract options and potential orders under ordering-type contracts.
Backlog Backlog at AEC represents the aggregate dollar value of products and services for the given term of our contracts with customers where we have enforceable rights, including both funded and unfunded contract scope, for which products have not been provided or services have not been performed, but excluding unexercised contract options and potential orders under ordering-type contracts.
As a result of the higher costs and operational challenges, the AEC segment updated labor, material input and scrap assumptions and estimates for certain long-term programs that resulted in negative cumulative changes in estimated profitability in the amount of $43.2 million in 2024, primarily related to the CH-53K, Gulfstream, F-35 and GE Platforms programs.
As a result of the higher costs and operational challenges, the AEC segment updated labor, material input and scrap assumptions and estimates for certain long-term programs that resulted in negative cumulative changes in estimated profitability in the amount of $165.8 million in 2025.
This was partially offset by a decrease in SG&A expenses of $1.4 million, driven by a $0.8 million decrease in marketing costs and a $0.6 million decrease in personnel-related costs. Technical and research expenses increased $0.3 million as compared to 2023, driven by increased research material and labor costs.
This was slightly offset by a decrease in SG&A expenses of $1.0 million, driven by a $0.7 million decrease in personnel-related costs. Technical and research expenses decreased $0.7 million as compared to 2024, driven by decreased research material and labor costs.
The amount of a valuation allowance is based upon our best estimate of our ability to realize the deferred tax assets. 46 Index Tax positions taken or expected to be taken in a tax return are recognized when it is more-likely-than-not, based on technical merits, to be sustained upon examination by taxing authorities.
Tax positions taken or expected to be taken in a tax return are recognized when it is more-likely-than-not, based on technical merits, to be sustained upon examination by taxing authorities.
Restructuring In addition to the items discussed above affecting Gross profit, SG&A and Technical and research expenses, Operating income was affected by Restructuring expense, net, of $13.4 million in 2024, as compared to $0.3 million in 2023.
In addition to the items discussed above affecting Gross profit, SG&A and Technical and research expenses, Operating income was affected by Restructuring expense, net, of $13.7 million in 2025, as compared to $13.4 million in 2024. At MC, restructuring actions were taken throughout 2024 and 2025 in order to cease operations at several facilities.
Interest payments on debt are expected to be approximately $18 million in 2025, $18 million in 2026, $19 million in 2027, and $12 million in 2028, and principal payments on debt of $318 million are not due until 2028.
Interest payments on debt are expected to be approximately $17.6 million in 2026, $17.6 million in 2027, and $11.1 million in 2028, and principal payments on debt of $330.7 million are not due until 2028.
Other Earnings Items The following table summarizes other earnings items that are presented below Operating income: (in thousands) Years ended December 31, 2024 2023 2022 Interest expense, net $ 12,549 $ 13,601 $ 14,000 Pension settlement expense — — 49,128 Other (income)/expense, net 1,721 (6,163) (14,086) Income tax expense 29,034 48,846 35,472 Net income/(loss) attributable to the noncontrolling interest 432 490 746 Interest Expense/(income), net Interest expense/(income), net, decreased over the prior year primarily due to lower average debt balances, in part offset by less interest income earned on cash equivalents during the current year.
Other Earnings Items The following table summarizes other earnings items that are presented below Operating income: (in thousands) Years ended December 31, 2025 2024 2023 Interest expense, net $ 20,605 $ 12,549 $ 13,601 Other (income)/expense, net 5,079 1,721 (6,163) Income tax (benefit)/expense (4,828) 29,034 48,846 Net income/(loss) attributable to the noncontrolling interest 383 432 490 Interest Expense, net Interest expense, net increased by $8.1 million over the prior year primarily due to higher average borrowings, in part offset by $1.1 million of greater interest income earned on cash equivalents during the current year.
In addition, changes in the fair value of derivative instruments included losses of $3.5 million in 2024 and gains of $0.4 million in 2023, driven by currency rate movements, most notably the Brazilian Real and Mexican Peso. Other (income)/expense also included bank fees, amortization of debt issuance costs, and rental income.
In addition, changes in the fair value of derivative instruments included gains of $3.7 million in 2025 and losses of $3.5 million in 2024, driven by currency rate movements, most notably the Brazilian Real and Mexican Peso.
Net cash used in investing activities included capital expenditures totaling $80.2 million and $84.4 million during 2024 and 2023, respectively, including investments in new aerospace programs and to improve productivity in our MC segment.
Net cash used in investing activities included capital expenditures totaling $71.5 million and $81.2 million during 2025 and 2024, respectively, which include investments in new aerospace programs and productivity enhancements in our MC segment.
This change impacts approximately 100 employees, will take place over the next year and a half, and will cost an estimated $7 million over that period related to retention, relocation, severance, and professional costs. 38 Index Operating Income The following table summarizes operating income/(loss) by business segment: (in thousands, except percentages) Years ended December 31, 2024 2023 2022 Machine Clothing $ 183,632 $ 188,429 $ 196,212 Albany Engineered Composites (11,603) 27,351 19,805 Corporate (40,670) (47,886) (34,995) Total operating income $ 131,359 $ 167,894 $ 181,022 % of net revenues 10.7 % 14.6 % 17.5 % See the Segment Results of Operations section of this Management Discussion and Analysis of Financial Condition and Results of Operations for significant drivers of Operating income/(loss) for each business segment.
Through December 31, 2025, this has resulted in expenses of $2.0 million related to retention, relocation, severance, and professional costs. 37 Index Operating Income The following table summarizes operating income/(loss) by business segment: (in thousands, except percentages) Years ended December 31, 2025 2024 2023 Machine Clothing $ 156,212 $ 183,632 $ 188,429 Albany Engineered Composites (145,135) (11,603) 27,351 Corporate (47,180) (40,670) (47,886) Total operating income (loss) $ (36,103) $ 131,359 $ 167,894 % of net revenues -3.1 % 10.7 % 14.6 % See the Segment Results of Operations section of this Management Discussion and Analysis of Financial Condition and Results of Operations for significant drivers of Operating income/(loss) for each business segment.
There is a disciplined focus to realize not only the combined benefits from procurement and overhead, but also to leverage best practices in manufacturing and a deep realignment of our operational footprint.
The Heimbach integration is a multi-year program that started with harmonizing Heimbach operations with our legacy MRP systems and establishing a new global customer and operations organization. There is a disciplined focus to realize not only the combined benefits from procurement and overhead, but also to leverage best practices in manufacturing and a deep realignment of our operational footprint.
While seasonality is generally not a significant factor in the Albany Engineered Composites segment, the commercial terms of the supply agreement governing the LEAP program resulted in fourth quarter sales volatility in recent years. 43 Index Cash Flow Summary (in thousands) For the years ended December 31, 2024 2023 2022 Net income $ 88,055 $ 111,610 $ 96,508 Depreciation and amortization 89,294 76,733 69,049 Changes in working capital (a) 54,321 (44,214) (63,478) Changes in long-term liabilities, deferred taxes and other credits (23,033) (11,829) (18,629) Non-cash portion of pension settlement expense — — 42,657 Other operating items 9,804 15,756 2,107 Net cash provided by operating activities 218,441 148,056 128,214 Net cash used in investing activities (80,180) (217,899) (96,348) Net cash used in financing activities (183,832) (52,641) (23,652) Effect of exchange rate changes on cash flows (12,566) 4,128 (18,474) Increase/(decrease) in cash and cash equivalents (58,137) (118,356) (10,260) Cash and cash equivalents at beginning of year 173,420 291,776 302,036 Cash and cash equivalents at end of year $ 115,283 $ 173,420 $ 291,776 _________________________ (a) Includes Accounts receivable, Contract assets, Inventories, Accounts payable and Accrued liabilities.
Cash Flow Summary (in thousands) For the years ended December 31, 2025 2024 2023 Net income $ (56,959) $ 88,055 $ 111,610 Depreciation and amortization 87,914 89,294 76,733 Changes in working capital (a) 10,861 54,321 (44,214) Changes in long-term liabilities, deferred taxes and other credits (45,865) (23,033) (11,829) Contract loss provision 139,665 — — Other operating items 16,858 9,804 15,756 Net cash provided by operating activities 152,474 218,441 148,056 Net cash used in investing activities (68,262) (80,180) (217,899) Net cash used in financing activities (96,051) (183,832) (52,641) Effect of exchange rate changes on cash flows 8,906 (12,566) 4,128 Increase/(decrease) in cash and cash equivalents (2,933) (58,137) (118,356) Cash and cash equivalents at beginning of year 115,283 173,420 291,776 Cash and cash equivalents at end of year $ 112,350 $ 115,283 $ 173,420 _________________________ (a) Includes Accounts receivable, Contract assets, Inventories, Accounts payable and Accrued liabilities.
No similar charges were incurred during 2024 or 2023. See Note 4, Pension, Postretirement, and Other Benefit Plans, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.
See Note 6, Other (Income)/Expense, net , of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.
The significant increase in net cash used during 2024 was due to increased principal payments on debt, increased share repurchases, and increased dividends paid to shareholders. Liquidity and Capital Structure We finance our business activities primarily with cash generated from operations and borrowings, largely through our revolving credit agreement as discussed below.
The change in cash used in finance activities is a result of increased borrowings and a decrease in principal debt payments versus prior year, partially offset by increased share repurchases. Liquidity and Capital Structure We finance our business activities primarily with cash generated from operations and borrowings, largely through our revolving credit agreement as discussed below.
A summary of AEC's selected financial results is as follows: (in thousands, except percentages) Years ended December 31, 2024 2023 2022 Net revenues $ 480,708 $ 477,141 $ 425,426 % change 0.7 % 12.2 % 37.1 % Gross profit 55,732 92,160 77,497 % of net revenues 11.6 % 19.3 % 18.2 % SG&A expenses 47,421 48,833 42,339 Technical and research expenses 16,265 15,976 15,353 Restructuring expenses, net 3,649 — — Operating income $ (11,603) $ 27,351 $ 19,805 % of net revenues -2.4 % 5.7 % 4.7 % Net revenues Net revenues increased 0.7%, primarily driven by growth on certain commercial and space programs, which were partially offset by lower revenues on the LEAP, F-35 and CH-53K programs.
A summary of AEC's selected financial results is as follows: (in thousands, except percentages) Years ended December 31, 2025 2024 2023 Net revenues $ 474,747 $ 480,708 $ 477,141 % change -1.2 % 0.7 % 12.2 % Gross profit (79,812) 55,732 92,160 % of net revenues -16.8 % 11.6 % 19.3 % SG&A expenses 46,449 47,421 48,833 Technical and research expenses 15,615 16,265 15,976 Restructuring expenses, net 3,259 3,649 — Operating income/(loss) $ (145,135) $ (11,603) $ 27,351 % of net revenues -30.6 % -2.4 % 5.7 % Net revenues Net revenues decreased 1.2%, primarily driven by $54.9 million of revenue adjustments to the CH-53K program based on our long-term contract estimates.
The AEC segment provides longer-term growth potential for the Company and the AEC segment continues to penetrate new programs and applications, as well as ramping up production on certain long-term programs, such as the CH-53K and other commercial aircraft programs that have not yet returned to pre-COVID production rates. 35 Index The AEC segment (including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group owns a 10% noncontrolling interest) supplies a number of customers in the aerospace industry.
The AEC segment provides longer-term growth potential for the Company as it ramps current production programs and captures new commercial and defense opportunities. The AEC segment (including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group owns a 10% noncontrolling interest) supplies a number of customers in the aerospace industry.
A summary of MC's selected financial results is as follows: (in thousands, except percentages) Years ended December 31, 2024 2023 2022 Net revenues $ 749,907 $ 670,768 $ 609,461 % change 11.8 % 10.1 % -1.5 % Gross profit 346,044 331,558 312,285 % of net revenues 46.1 % 49.4 % 51.2 % SG&A expenses 123,120 118,196 91,393 Technical and research expenses 29,832 24,651 24,588 Restructuring expenses, net 9,460 282 92 Operating income $ 183,632 $ 188,429 $ 196,212 % of net revenues 24.5 % 28.1 % 32.2 % Net revenues Net revenues increased 11.8% as compared to 2023, driven by the addition of Heimbach Net revenues of $95.0 million as well as better performance in tissue, pulp, and engineered fabrics.
A summary of MC's selected financial results is as follows: (in thousands, except percentages) Years ended December 31, 2025 2024 2023 Net revenues $ 708,066 $ 749,907 $ 670,768 % change -5.6 % 11.8 % 10.1 % Gross profit 323,732 346,044 331,558 % of net revenues 45.7 % 46.1 % 49.4 % SG&A expenses 131,175 123,120 118,196 Technical and research expenses 28,090 29,832 24,651 Restructuring expenses, net 8,255 9,460 282 Operating income $ 156,212 $ 183,632 $ 188,429 % of net revenues 22.1 % 24.5 % 28.1 % Net revenues Net revenues decreased 5.6% as compared to 2024, driven by reduced demand in Asia, most significantly in China, and by site consolidations, unplanned equipment downtime in one of our production facilities and lower than anticipated sales pricing.
Albany Engineered Composites The AEC segment's strategy is to continue to build on its global brand by leveraging its industry leading performance to drive future growth through technology differentiation.
The Company made progress and realized significant synergies from these efforts during 2025, and announced additional closures of engineered fabrics facilities in Italy, France and the United Kingdom. Albany Engineered Composites The AEC segment's strategy is to continue to build on its global brand by leveraging its industry leading performance to drive future growth through technology differentiation.
The MC segment's backlog continues to be stable going into 2025. MC believes it is well-positioned in key markets, with high-quality, low-cost production in growth markets, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology.
We believe the MC segment is well-positioned in key markets, with high-quality, low-cost production in growth markets, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology. Some of the markets in which MC's products are sold are expected to have volume trends that are in line with global GDP.
Business Combinations As we enter into business combinations, we perform acquisition accounting requirements including the following: • Identifying the acquirer, • Determining the acquisition date, • Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and • Recognizing and measuring goodwill, as applicable.
Changes in these assumptions or in actual outcomes could materially affect the amount of deferred tax assets we are able to realize, the valuation allowance recorded, and the recognition and measurement of uncertain tax positions Business Combinations As we enter into business combinations, we perform acquisition accounting requirements including the following: • Identifying the acquirer, • Determining the acquisition date, • Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and • Recognizing and measuring goodwill, as applicable.
These actions drove $11.2 million of restructuring charges during 2024, of which $9.5 million in Restructuring expenses, net was due to workforce reductions, fixed asset impairments, and related costs and $1.7 million in Costs of goods sold was due to the write-off of inventory. We expect to incur additional restructuring expenses related to these actions into 2025.
These actions drove $8.3 million of restructuring charges during 2025, compared to $11.2 million in 2024, a decrease that is primarily due to the timing of the announced actions, workforce reductions, and related costs. We expect to incur additional restructuring expenses related to these actions into 2026.
Backlog at AEC was $1.4 billion as of December 31, 2024. Working Capital, Liquidity and Capital Structure Working Capital Payment terms granted to paper industry and other machine clothing customers reflect general competitive practices. Terms vary with product, competitive conditions, and the country of operation.
Working Capital, Liquidity and Capital Structure Working Capital Payment terms granted to paper industry and other machine clothing customers reflect general competitive practices. Terms vary with product, competitive conditions, and the country of operation. In some markets, customer agreements require us to maintain significant amounts of finished goods inventory to assure continuous availability of our products.
The overall decrease in SG&A expenses was due to the net effect of the following: • MC SG&A expenses increased $4.9 million as compared to 2023, with a $13.5 million increase related to Heimbach, partially offset by a $8.2 million decrease due to changes in currency translation rates and a $0.5 million decrease due to personnel-related costs. • In AEC, SG&A expenses decreased $1.4 million, driven by a $0.8 million decrease in marketing costs and a $0.6 million decrease in personnel-related costs, partially offset by an increase in global information systems costs. 37 Index • Corporate SG&A expenses decreased $7.5 million, driven by a $4.4 million decrease in personnel-related costs, a decrease of $1.9 million in professional fees, and a decrease of $1.1 million in global information system costs.
The overall increase in Consolidated SG&A expenses was due to the net effect of a $4.4 million increase in personnel-related costs, an increase of $1.9 million in professional fees, and an increase of $3.2 million in global information system costs.
See Note 6, Other (Income)/Expense, net , of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information. 39 Index Income Taxes Years ended December 31, 2024 2023 2022 Effective tax rate 24.8% 30.4% 26.9% The effective tax rate represents the combined federal, state and foreign tax effects attributable to pretax earnings.
Income Taxes Years ended December 31, 2025 2024 2023 Effective tax rate 7.8% 24.8% 30.4% The effective tax rate represents the combined federal, state and foreign tax effects attributable to pretax earnings.
In total, the Company repurchased 1,490,904 shares for a total cost of $124.0 million since 2021. On February 21, 2025, the Company's Board of Directors authorized the Company to repurchase shares up to $250 million, which replaces the 2021 authorization. The Company is party to certain off-balance sheet arrangements, including certain guarantees.
In total, the Company repurchased 2,841,036 shares in 2025 for a total cost of $187.9 million. On February 21, 2025, the Company's Board of Directors authorized the Company to repurchase shares up to $250 million, which replaces a prior authorization put in place in 2021. The Company has $76.7 million remaining under this authorization for future share repurchases.
Corporate expenses include global information system costs of $1.0 million in 2024, $2.1 million in 2023 and $1.0 million in 2022. For more information on our segments, see Note 3, Reportable Segments and Geographic Data, of the Notes to the Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
For more information, see Note 17, Financial Instruments, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Other (income)/expense, net Other (income)/expense, net included foreign currency related transactions that resulted in losses of $8.9 million in 2025 as compared to $3.9 million of gains in 2024.
While the U.S. has indicated that it will not adopt the Pillar Two rules, various other governments around the world are enacting legislation. As currently designed, Pillar Two will ultimately apply to our worldwide operations. We have evaluated the impact of these rules and have determined that it did not materially increase our global tax costs in 2024.
While the U.S. has indicated that it will not adopt the Pillar Two framework at this time, various jurisdictions in which we operate have enacted, or are in the process of enacting, legislation to implement these rules. Based on their current design, the Pillar Two rules are expected to apply to our global operations.
As of December 31, 2024, we had cash and cash equivalents of $115.3 million and availability under our Credit Agreement of $481.5 million, for a total liquidity of approximately $596.8 million. Bank debt at the Company's Heimbach subsidiary was paid down to less than $0.1 million as of December 31, 2024.
As of December 31, 2025, we had cash and cash equivalents of $112.4 million and availability under our Credit Agreement of $344.3 million, for a total liquidity of approximately $456.7 million.
Income Taxes We regularly assess the likelihood that deferred tax assets will be realized through the reversal of existing temporary differences and/or future taxable income. To the extent we believe that it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is established.
If, based on the weight of available evidence, we believe that it is more likely than not some portion of the deferred tax asset will not be realized, a valuation allowance is established. The amount of a valuation allowance is based upon management’s best estimate of deferred tax assets that are not expected to be realized.
Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that often follow. Gross Profit Gross profit decreased $36.4 million as compared to last year and Gross profit margin decreased from 19.3% in 2023 to 11.6% in 2024.
Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that often follow.
Some of the markets in which MC's products are sold are expected to have volume trends that are in line with global GDP. MC continues to face pricing pressures in all markets. Despite these market pressures on revenue growth, the MC segment is expected to improve earnings in the future through cost controls and manufacturing productivity efficiencies.
Despite pricing and demand pressures on revenue growth, the MC segment is expected to improve earnings in the future through technological innovations, particularly within the pressing market, manufacturing productivity efficiencies and cost controls. The MC segment has been a significant generator of cash for the Company.
Gross Profit Gross profit increased by $14.5 million as compared to 2023, driven by the higher sales noted above; however, gross profit margin decreased from 49.4% in 2023 to 46.1% in 2024. This margin decrease was primarily driven by lower gross margins at Heimbach. Operating Income Operating income decreased $4.8 million or 2.5% as compared to 2023.
Gross Profit Gross profit decreased by $22.3 million as compared to 2024, primarily driven by the volume declines noted above; with gross profit margin also decreasing slightly from 46.1% in 2024 to 45.7% in 2025. Operating Income Operating income decreased $27.4 million or 14.9% as compared to 2024, primarily as a result of gross profit declines and increased SG&A costs.
Changes in currency translation rates had an insignificant effect on Net revenues. AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by a cost-plus-fee agreement. Revenue earned under these arrangements accounted for approximately 37% of segment revenue for 2024 and 2023.
As such, we believe that the segment’s backlog is not a strong indicator of expected future revenue. Albany Engineered Composites Segment The AEC segment accounted for 40.1% of our consolidated net revenues during 2025. AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by a cost-plus-fee agreement.
Consolidated SG&A expenses decreased 1.9% as compared to 2023 and as a percentage of Net revenues, SG&A expenses decreased from 18.7% in 2023 to 17.1% in 2024.
Consolidated Technical and research expenses increased 4.2% as compared to 2024 and as a percentage of Net revenues increased from 3.7% in 2024 to 4.1% in 2025. This change is primarily driven by increased activity within our New Business Ventures group.
Removed
Machine Clothing Prior to the acquisition of Heimbach, the MC segment experienced declining revenues due to changing global market consumption of publication grade paper.
Added
Machine Clothing During 2025, the MC segment delivered a resilient performance, with several areas performing well despite uneven market dynamics. In Asia, softer demand—across Paper Machine Clothing & Engineered Fabrics—contributed to regional pressure, while EF also declined due to strategic divestment and planned plant consolidation in Europe. Packaging and Tissue continued to perform well, supported by growth across most regions.
Removed
The MC segment expects revenues to continue to decline for publication grade paper into 2025 and beyond, however, we see an offsetting effect due to growth in demand for packaging, and to a lesser degree, tissue grade products.
Added
Publication grades remained under structural pressure, and the MC segment expects publication grade paper demand to continue declining into 2026 and beyond, offset by growing demand for tissue grade products. Looking ahead to 2026, we expect Packaging and Tissue to remain positive contributors, with sales in Europe and the Americas holding broadly stable, while Asia’s trajectory remains uncertain.
Removed
During 2024, the MC segment saw stronger revenue in tissue, pulp, and engineered fabrics, and weaker revenue in packaging and publication grades, with softness in Asia, particularly China, and Europe. Going into 2025, the MC segment expects a modest recovery in Europe beginning in late 2025; however, China's recovery remains unclear.
Added
This amount includes a $155.9 million change in estimated profitability associated with the performance of the CH-53K contracts, of which $147.3 million was recognized in the third quarter and was inclusive of a loss reserve adjustment of $98.0 million for greater than planned labor content and higher material inputs caused by inflation estimated for the duration of the contract.
Removed
The MC segment has been a significant generator of cash for the Company.
Added
This adjustment represents the estimated full loss anticipated over the remaining eight year life of the program, and we are engaging with our CH-53K customer to discuss potential solutions.
Removed
Unlocking the full benefits and value of Heimbach is a complex integration process that is well underway and tracking to expectations. It is a multi-year program that started with harmonizing Heimbach operations with our legacy MRP systems and establishing a new global customer and operations organization.
Added
In spite of these ongoing discussions, subsequent to the end of the third quarter, we announced that we will commence a strategic review of the Amelia Earhart Drive facility in Salt Lake City.
Removed
Although the AEC segment believes it has action plans to mitigate these cost increases, the AEC segment may continue to experience similar issues into 2025 as it ramps up production levels on key programs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−1 removed3 unchanged
Biggest changeOn December 31, 2024, we had the following variable rate debt: (in thousands, except interest rates) Long-term debt: Credit agreement borrowings outstanding (net of fixed rate portion, due in 2028): USD borrowings (end of period all-in interest rate of 6.00%) 100,000 EUR borrowings (end of period all-in interest rate of 4.40%) 46,742 Foreign bank debt (end of period all-in interest rate ranging from 4.27% to 5.10%) 46 Total $ 146,788 Assuming borrowings were outstanding for an entire year, an increase of one percentage point in weighted average interest rates would increase interest expense by $1.5 million.
Biggest changeInterest Rate Risk We are exposed to interest rate fluctuations with respect to our variable rate debt, depending on general economic conditions. 46 Index On December 31, 2025, we had the following variable rate debt: (in thousands, except interest rates) Long-term debt: Credit agreement borrowings outstanding (net of fixed rate portion, due in 2028): USD borrowings (end of period all-in interest rate of 5.48%) $ 225,000 EUR borrowings (end of period all-in interest rate of 3.56%) 52,831 Foreign bank debt — Total $ 277,831 Assuming borrowings were outstanding for an entire year, an increase of one percentage point in weighted average interest rates would increase interest expense by $2.8 million.
(See Note 18, Fair-Value Measurements , of the Notes to the Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K). 48 Index
(See Note 18, Fair-Value Measurements , of the Notes to the Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K). 47 Index
As currency rates change, these nonfunctional currency balances are revalued, and the corresponding adjustment is recorded in the income statement. A hypothetical change of 10% in currency rates could result in an adjustment to the income statement of approximately $7.4 million. Actual results may differ.
As currency rates change, these nonfunctional currency balances are revalued, and the corresponding adjustment is recorded in the income statement. A hypothetical change of 10% in currency rates could result in an adjustment to the income statement of approximately $13.8 million. Actual results may differ.
The total net assets of non-U.S. operations and long-term intercompany loans denominated in nonfunctional currencies subject to potential loss amount to approximately $576.4 million. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to $57.6 million.
The total net assets of non-U.S. operations and long-term intercompany loans denominated in nonfunctional currencies subject to potential loss amount to approximately $602.4 million. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to $60.2 million.
Furthermore, related to foreign currency transactions, we have exposure to various nonfunctional currency balances totaling $146.2 million. This amount includes, on an absolute basis, exposures to assets and liabilities held in currencies other than our local entities' functional currency. On a net basis, we had $74.0 million of foreign currency assets as of December 31, 2024.
Furthermore, related to foreign currency transactions, we have exposure to various nonfunctional currency balances totaling $214.9 million. This amount includes, on an absolute basis, exposures to assets and liabilities held in currencies other than our local entities' functional currency. On a net basis, we had $137.9 million of foreign currency assets as of December 31, 2025.
This risk is composed of both potential losses from the translation of foreign currency financial statements and the remeasurement of foreign currency transactions. To manage this risk, we periodically enter into forward exchange 47 Index contracts either to hedge the net assets of a foreign investment or to provide an economic hedge against future cash flows.
This risk is composed of both potential losses from the translation of foreign currency financial statements and the remeasurement of foreign currency transactions. To manage this risk, we periodically enter into forward exchange contracts to provide an economic hedge against future cash flows.
Removed
Interest Rate Risk We are exposed to interest rate fluctuations with respect to our variable rate debt, depending on general economic conditions.

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