Ladies and gentlemen, thank you for standing by. And welcome to the First Quarter Earnings Call of Albany International. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given to you at that time. At the request of Albany International, this conference call on Thursday, May 2, 2013, will be webcast and recorded. I would now like to turn the conference over to the Chief Financial Officer and Treasurer, John Cozzolino for introductory comments. Please go ahead.

Thank you, Operator, and good morning, everyone. As a reminder for those listening on the call, please refer to our detailed press release issued last night regarding our quarterly financial results, with particular reference to the Safe Harbor notice contained in the text of the release about our forward-looking statements and the use of certain non-GAAP financial measures and associated reconciliation of GAAP. And for purposes of this conference call, the same statements also apply to our verbal remarks this morning. And for a full discussion please refer to that earnings release, as well as our SEC filings including our 10-K. Now, I will turn the call over to Joe Morone, our Chief Executive Officer, who'll provide some opening remarks before we go to Q&A. Joe?

Thanks John. Good morning, everyone. As always, I’ll provide a quick overview of the quarter, I’ll amplify what we view is the most important aspect of our recent performance and then we’ll go to your question. Q1 2013 was another good quarter for Albany and a good demonstration of how our cash and growth strategy is playing out in the short-term, and what it promises for the future. As we have mentioned many time, Q1 is normally our weakest quarter, because of slowdowns at the end of December, shipments flowing into Q1 are usually much weaker than shipments flowing into our other quarters. The Chinese New Year, Carnival and the short month in February compound this seasonal effect. What this means, is that particularly for our first two quarters, year-over-year comparisons are typically far more meaningful than sequential quarterly comparisons. This year our Q1 year-over-year performance was particularly strong, sales were up 4%, compared to Q1 2012 and adjusted EBITDA was up 32%. However, keep in mind that Q1 2012 was a weak quarter, so please don’t take carry away by these year-over-year comps. In our mind, the key message to takeaway from this quarter is that both businesses performed well and their performance was in line with our expectation and consistent with our outlook, which as you all recall, it was flat full adjusted EBITDA on machine clothing and continued LEAP driven growth in AEC. Now, there are few aspects of the quarter that I’d like to the highlight. First of all, In machine clothing, our business in North and South America continues to excel on just about every dimensional performance, our share is growing substantially, and we are the dominant supplier in the growth segment of tissue, pulp and packaging, and are nearly every new machine that has…

Thank you. (Operator Instructions) Our first question will comes from the line of Jason Ursaner with CJS Securities. Your line is open.

Good morning. Congrats on a very good quarter and debt amendment. Just want to concentrate first on the Machine Clothing performance in the Americas. You talked about the exceptional performance that you're seeing there and I guess I just want to hear your view on sustainability from a cost perspective. Is there any risk of one step forward, one step back as costs come out and then you are sort of losing it overtime so that the gradual, you need to keep pace with inflation?

Well. At this point, in the Americas, our ability to maintain, the cost where they are is all about productivity and we’ve talked about many times. We have to find a way of beating inflation year-over-year. We are pretty confident we can do that. We have a strong organization in place. They are heavily into lean production, at the same time our procurement organization. Procurements of materials represents roughly a half of all of our costs. So absorbing inflation is both a matter of labor productivity and also procurement productivity and we think we have systems and organization and talents in place in both. So that’s a material challenge for us in the Americas.

Okay. And from a demand perspective in the U.S., I guess in particular, you’ve talked before about over capacity in Europe. Just wondering how that picture looks in the U.S. and I guess what else do you see that’s giving you confidence in stable to low growth in demand for the U.S. going forward?

Well. You have to go rate-by-rate as you know, Jay. And we are over exposed to the rates that are essentially linked to the G&P, packaging and tissue were not at fault. And that’s for the Americas and the U.S. packaging and tissue. And, not only our sales overexposed in those grades but our competitive position is particularly strong in those grades. And our customers are particularly well positioned and they have done what they needed to do in a way of consolidation. So our customers tend to be in strong positions in those grades. So the grades, where we are overexposed are the ones that are linked to the G&P. Customers are healthy, our competitive position is very, very strong. You add all that together and so even with the steady 3%, 4%, 5% erosion in the printing and writing rates, our models stands. If you look at the Americas in combination North and South, we think flat is reasonable place to be given the growth in South America and our strong position in the healthy grades in North America.

Okay. And just last question for me. In AEC, I realized the long-term view is pretty much on track but short-term, the legacy programs in Texas, how much of the quarter impact was the write-off versus I guess just ongoing challenges with those programs and maybe when time wise that could begin to felt enough?

I think the best way to look at this is, unlike Machine Clothing where there is this dramatic seasonal affect and you could really get yourself tied up in knot if you look sequentially. In AEC, sequential comparisons are actually pretty useful. And if you look at Q4 sales, they were roughly comparable to Q1 sales. I think it was $20 million in Q4 compared to a little over $19 million Q4, compared to a little over $19 million in Q1. And so you take Q4 as a benchmark of where our EBITDA should be, that’s not bad. That’s not a bad benchmark since it is roughly comparable sales. Now, remember at that kind of a run rate, $70 million, $80 million run rate, we are loading in a lot of fixed costs because we are managing this business and getting ready for it to grow three times, four times of size fast. So there is lot of fixed costs loaded into that $19 million, $20 million run rate. So if you assume Q4 as a reasonable benchmark, incremental revenue over that level or over the Q1 level, we should start seeing incremental profit or occasional small write-offs.

Got it. Great. I appreciate the commentary. I will jump back. Thanks.

Thanks.

(Operator Instructions) We will go to line of John Franzreb with Sidoti & Company. Your line is open. John Franzreb - Sidoti & Company: Good morning, guys.

Good morning, John. John Franzreb - Sidoti & Company: You seem to suggest that Europe is stabilizing in the press release. Could you just expand upon that, at least the worst over in Europe?

Well, it is -- a year ago, we were seeing the bottom was flowing out of Europe and it was showing up yet in the macroeconomics and now we are saying, Europe is stable and the opposite thesis in the case of the macro. So to be clear, we are not seeing any evidence yet of a catalyst in the macro economy. Everything you are reading is what we are saying. Likewise, if you listen to the earnings call of the major papermakers in Europe, they are heavily into retrenchment mode. So that’s on the one hand. On the other hand, remember we took at the beginning, we took last year 17%, 18% drop in sales and we don't expect that to come back, so it is a big step change down. And our thesis, which were strongly supported in the 2008, 2009 recession and we think we're seeing it again in this round of the European recession. As we get to that full impact of the downturn upfront and then it flattens for us. While, all the capacity that got slowed down is now actually being taken out, but the effect to us already took place. John Franzreb - Sidoti & Company: Okay. Fair enough. And I guess, similarly on the geographic basis, Asia was disproportionately weak. Can you -- are you a leading indicator of what’s going to happen in Asia?

It’s probably a good bet. I mean, we’re -- we're not saying it was disproportionately weak. We’re saying compared to what we’re expecting, compared to last year, it was weak. And it’s got nothing to do with our competitive position. It has to do with what we see it and feel as a general, a slower case of economic activity there. And then you grope around to try to understand why that’s the case and the obvious explanation which seems to now be getting borne out by the latest round of data from China, it’s manufacturing activity is slowing down. Why is it slowing down? It’s slowing down because export to Europe are slowing down primarily. John Franzreb - Sidoti & Company: Okay. And last quarter, we talked a little bit about the sustainability of the gross margin profile in machine clothing. Again, it’s another real good quarter as far as the profit profile for the segment. Fair enough now that we set our expectations in that mid 40 range, Joe?

Yeah. I think it’s -- year ago we had be saying 42-ish and I think now after four quarters in a row, it’s reasonable to say 44-ish. John Franzreb - Sidoti & Company: All right.

As you know, there are all sorts of moving parts that make up gross margin. So there will be variability there. But I think its [technical difficulty] this is a real place to be now. Why is that? Well, part of it is geographic mix but a lot of it is the restructuring we took on when we folded, when we integrated engineered fabrics and machine clothing two years ago. It has pretty much played out. Productivity activities have played out nicely. So, yeah, 44 for now seems like a 44-ish seems like a reasonable benchmark. John Franzreb - Sidoti & Company: Very good. Thank you very much, Joe.

Thanks John.

Thank you. We’ll go to line of Rick D'Auteuil with Columbia Management. Your line is open.

Good morning guys.

Hey Rick.

Just a couple of things, machine clothing, you talked about a new technology initiative, I think in the last call. Can you just briefly comment on status of that. We’re starting to construct a facility and that all systems go. And I don’t want to say much more than that. It is -- it's a technology platform that we’re applying to a number of product lines. And we’re pretty enthused that we wouldn’t be investing $15 million in a facility to scale it up. So we can do some market trials. So, none of the capacity is necessarily spoken for entering this construction phase. What commitments do you have out there to adjust a couple of people that are willing to trial it or what…

Yeah. So all of the above.

.:

Right.

Okay. And then I don’t know, you didn’t really call out anything on the facility rationalization for machine clothing. Is there -- what if anything is currently being…?

Making -- we’re making good progress in our conversations with our worker’s counsels. And when we had a concrete development, we’ll certainly issue a release.

That’s obviously euro based.

Yeah.

Okay. Okay. That’s all I have. Thank you.

Thank you.

Thank you. (Operator Instructions) And allowing a few moments, I’m showing no questions in queue at this time. Please continue.

Okay. So is there no additional question? Thank you for participating on the call. And I’m sure we’ll be seeing a lot of you in the next few months if there are conferences and if not perhaps on individual call. So thank you and talk to everybody soon.

Thank you. And ladies and gentlemen, a replay of this conference call will be available at the Albany International website beginning at approximately noon Eastern Time today. That does conclude your conference call for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect.