Albany International (AIN) risk factors, FY2024 10-K

Risks related to our business and operations

1. 01A number of industry factors have had, and in future periods could have, an adverse impact on net revenues, profitability and cash flow in the Company’s MC and AEC segments
2. 02Some of the Company’s competitors in the MC segment have the capability to make and sell paper machines and papermaking equipment as well as other engineered fabrics
3. 03AEC is subject to significant risks related to the potential manufacture and sale of defective or non-conforming products
4. 04The long-term organic growth prospects of AEC are subject to a number of risks
5. 05Deterioration of global economic conditions could have an adverse impact on the Company’s business and results of operations
6. 06The U.S. Government’s Department of Defense (“DoD”) Cybersecurity Maturity Model Certification (“CMMC”) program introduces new and unique risks for DoD contractors
7. 07The Company continues to experience increasing raw material, energy, logistics, and labor costs due to supply chain constraints and inflationary pressures
8. 08We may be unable to maintain effective systems of internal controls while consolidating dispersed corporate functions to our corporate headquarters in New Hampshire
9. 09Our ability to attract and retain business and employees may depend on our reputation in the marketplace
10. 10Conditions in the paper industry have required, and could further require, the Company to reorganize its operations, which could result in significant expense and could pose risks to the Company’s operations
11. 11Natural disasters at one or more of our facilities could make it difficult for us to meet our supply obligations to our customers
12. 12The Company’s insurance coverage may be inadequate to cover other significant risk exposures
13. 13The Company has significant manufacturing operations outside of the U.S., which could involve many uncertainties
14. 14The implementation of trade tariffs could result in significant impacts on our business operations, financial condition, and overall market environment
15. 15Our growth strategy includes evaluating selected acquisitions, which entails certain risks to our business, and presents financial, managerial and operational challenges that may adversely affect our operating results and financial condition
16. 16We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses
17. 17We may fail to realize all of the anticipated benefits of the acquisition of Heimbach or those benefits may take longer to realize than expected

Risks related to our contracts

1. 18AEC is subject to significant financial risk related to potential quality escapes that could cause customer recalls, or production shortfalls that could cause delays in customer deliveries
2. 19Long-term supply contracts in our AEC segment pose certain risks
3. 20AEC derives a significant portion of its revenue from contracts related to U.S. Government Department of Defense, which are subject to unique risks
4. 21The loss of one or more major customers could have a material adverse effect on Net revenues and profitability

Risks related to information technology and cybersecurity

1. 22Our 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
2. 23We face legal, reputational and financial risks from any failure to protect customer and/or Company data from security incidents or cyberattacks

Risks related to our liquidity and financial matters

1. 24Fluctuations in currency exchange rates could adversely affect the Company’s business, financial condition, and results of operations
2. 25forces, 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
3. 26We have a substantial amount of indebtedness. At December 31, 2024, the Company had outstanding long-term debt of $319 million
4. 27From time to time, we use interest rate swaps to manage the interest cost associated with our borrowings. Future changes in the interest rate benchmark could affect the Company’s cost of borrowing and its cash flows, or the effectiveness of the hedges, which could have an effect on net income
5. 28Significant changes in critical estimates and assumptions related to pension and other post-retirement benefit (“OPEB”) costs and liabilities could affect our earnings and pension contributions in future periods
6. 29The Company is exposed to the risk of increased expense in health-care related costs
7. 30Goodwill and other intangible assets represent a significant portion of our assets, and any impairment of these assets could negatively impact our results of operations and financial conditions
8. 31Unanticipated changes in tax laws or exposure to additional tax liabilities could affect our future profitability

Risks related to our legal and regulatory environment

1. 32The 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
2. 33The Company is subject to legal proceedings and legal compliance risks
3. 34Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm our business
4. 35Our global operations are subject to increasing environmental, social and governance regulatory requirements, increasing operational and compliance costs, as well as the risk of noncompliance
5. 36cost of capital, global supply chain, and production continuity, which may impact our ability to achieve long-term business objectives
6. 37Certain provisions of our Certificate of Incorporation, our Bylaws and Delaware law could hinder, delay or prevent a change in control of us that you might consider favorable, which could also adversely affect the price of our Common Stock
7. 38We may not pay cash dividends on our Common Stock
8. 39If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
9. 40Future sales of shares by us or our existing stockholders could cause our stock price to decline
10. 41Shareholder activism can have a significant impact on our operations, strategy, and overall performance