XRM Xerium Technologies New (delisted)

Xerium Technologies, Inc. (NYSE:XRM) a leading global provider of industrial consumable products and services, today announced selected preliminary financial results for the quarter ended June 30, 2016.

Xerium’s preliminary results for the 2016 second quarter include:

                       

2016 Second QuarterPreliminary Results

Last Twelve MonthsPreliminary Results

  Net Sales $ 124.0 million $ 472.0 million Adjusted EBITDA $ 27.6 million $ 101.1 million Adjusted EBITDA as % of Sales 22.3 % 21.4 % Net Income $ 1.6 million $ (5.2 ) million Net Income as a % of Sales 1.3 % (1.1 ) % Net Debt $ 499.5 million $ 499.5 million Net Leverage Ratio 4.9x

 

4.9x

Pro-forma Net Leverage Ratio

 

4.7x

 

4.7x

 

* See “Non-GAAP Financial Measures” below.

SECOND QUARTER HIGHLIGHTS

• Q2 2016 sales were $124.0 million - an increase year-over-year of $0.5 million (0.4%), and a sequential increase of $7.0 million (6.1%), on a constant currency basis. The Company’s markets are stable and the Company is benefiting from its sales repositioning investments into growth markets and the Q2 acquisition of JJ Plank.
• Q2 2016 Adjusted EBITDA was $27.6 million – a sequential increase of $3.6 million (15%) and year-over-year decrease of $0.4 million (1.4%). Sales volumes have recovered as the company’s repositioning efforts are offsetting graphical market declines. Adjusted EBITDA is on track for full year guidance.
• Q2 2016 free cash flow was $0.6 million – strong operating cash flow was used to pay $10.7 million Q2 bond interest payment and strategic capex. Year-to-date free cash flow is approximately $11 million and on track for full year guidance.
• Q2 acquisition of JJ Plank added capability to rolls business, and is immediately deleveraging on a pro forma basis.
• The Company’s net leverage ratio on a pro forma basis remained steady at 4.7x compared to March 31, 2016.

Harold Bevis, Xerium's President and Chief Executive Officer stated, "We are pleased that our preliminary second quarter results show progress, consistent with the repositioning efforts that we have implemented. Increased sales and wins during the quarter offset the continued decline in the graphical grades market. We are continuing to generate positive free cash flow, utilizing this to pay down debt and make strategic capital investments.”

PRELIMINARY RESULTS

The results provided in this press release are preliminary and subject to completion and review of Xerium’s 2016 second quarter financial statements in conjunction with the Company’s 2016 second quarter Form 10-Q filing, and therefore they are subject to change.

Xerium intends to report final results for the 2016 second quarter on or about August 2, 2016, after market close. Xerium’s earnings press release and prepared remarks reviewing its financial results and guidance will be made available on the Investor Relations section of its website at www.xerium.com.

ABOUT XERIUM TECHNOLOGIES

Xerium Technologies, Inc. (NYSE:XRM) is a leading global provider of industrial consumable products and services. Xerium, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 30 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,000 employees.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. The words "will", "believe," "estimate," "expect," "intend," "anticipate," "goals," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding our full year EBITDA and Adjusted EBITDA performance, anticipated sales performance, capital expenditures, cost savings measures, future efforts to improve overall performance and free cash flow. Forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by us, as well as from risks and uncertainties beyond our control. These risks and uncertainties include the following items: (1) we may not realize the EBITDA and Adjusted EBITDA performance we are projecting (2) our expected sales performance and our backlog of sales may not be fully realized; (3) our cost reduction efforts, including our restructuring activities, may not have the positive impacts we anticipate; (4) we are subject to execution risk related to the startup of our new facilities in China and Turkey and expansion projects elsewhere; (5) our plans to develop and market new products, enhance operational efficiencies and reduce costs may not be successful; (6) market improvement in our industry may occur more slowly than we anticipate, may stall or may not occur at all; (7) variations in demand for our products, including our new products, could negatively affect our revenues and profitability; (8) our manufacturing facilities may be required to quickly increase or decrease production, which could negatively affect our production facilities, customer order lead time, product quality, labor relations or gross margin; and (9) the other risks and uncertainties discussed elsewhere in this press release, our Form 10-K for the year ended December 31, 2015 filed on March 14, 2016 and our other SEC filings. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement in this press release reflects our current views with respect to future events. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise. As discussed above, we are subject to substantial risks and uncertainties related to current economic conditions, and we encourage investors to refer to our SEC filings for additional information. Copies of these filings are available from the SEC and in the investor relations section of our website at www.xerium.com.

       

NON-GAAP FINANCIAL MEASURES

   

Adjusted EBITDA (in 000's)

Three Months Ended Trailing 12 Months June 30, June 30, 2016 2016 Net income (loss) $ 1,623 $ (5,233 ) Stock-based compensation 834 3,098 Depreciation 8,182 30,775 Amortization of intangibles 210 444 Curtailment settlement loss - 1,108 Deferred financing cost amortization 785 3,233 Unrealized foreign exchange (gain) loss on revaluation of debt (968 ) (2,360 ) Deferred taxes (465 ) (4,697 ) Asset impairment - 1,536 Loss on disposition of property and equipment 62 (1,333 ) Loss on extinguishment of debt - 388 Net change in operating assets and liabilities   (7,206 )   6,664   Net cash provided by operating activities 3,057 33,623 Interest expense, excluding amortization 9,873 37,810 Net change in operating assets and liabilities 7,206 (6,664 ) Current portion of income tax expense 2,819 14,727 Stock-based compensation (834 ) (3,098 ) Unrealized foreign exchange gain (loss) on revaluation of debt 968 2,360 Curtailment settlement loss - (1,108 ) Asset impairment - (1,536 ) Loss on disposition of property and equipment (62 ) 1,333 Loss on extinguishment of debt   -     (388 ) EBITDA 23,027 77,059 Loss on extinguishment of debt - 388 Stock-based compensation 834

3,098

Operational restructuring expenses 2,777 12,525 Non-restructuring impairment charges - 499 Inventory write-off of closed facilities - 587 Pension settlement loss - 1,108 Start-up costs 539 3,439 Non-recurring expenses   434     2,382   Adjusted EBITDA $ 27,611   $ 101,085    

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Xerium Technologies, Inc.Clifford Pietrafitta, 919-526-1403Cliff.Pietrafitta@xerium.com