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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version on businesswire.com: http://www.businesswire.com/news/home/20160718006401/en/
Xerium Technologies, Inc.Clifford Pietrafitta,
919-526-1403Cliff.Pietrafitta@xerium.com
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