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Xerium Technologies' CEO Discusses Q3 2011 Results - Earnings Call Transcript

Lastly, on this call, we'd like -- we plan to discuss supplementary non-GAAP financial measures, such as adjusted EBITDA, that are key metrics for our credit facility covenants and that we use internally to assess liquidity and financial performance, and therefore, believe will assist you in better understanding our company. Reconciliation of these measures to the comparable GAAP numbers are available on our press release and in our materials, which are each posted in the Investor Relations section of our website at www.xerium.com.

With that, I'd like to turn the call over to Stephen.

Stephen R. Light

Thanks, Kevin. Good morning, ladies and gentlemen. By now, you've had the chance to review our earnings release and our slides which we posted on the Xerium website last night, so I'm not going to walk you through the specifics of each chart. But Cliff and I will address any topics we missed in our remarks in the Q&A session in just a few minutes. Notwithstanding that we grew revenue by 9.1%, it should be obvious from our results that the quarter was quite challenging, as a global paper market has been unsettled for the past several months. By unsettled in our industry, I mean that mill managers are reluctant to place orders for rolls and clothing when they think there is a slowdown on the horizon. You can see this in our lower and essentially flat line bookings for both rolls and clothing.

Throughout the quarter, however, our backlogs remained robust even with the lower level of order we experienced. Our Paper Machine Clothing press felts backlog remains particularly strong as it has been for the past year. The overall paper market has been experiencing substantial downward pricing pressure with pulp in South America, which we used as a leading indicator, down approximately 20% from its peak last year. Prices for newsprint and printing and writing are feeling the same pressures in some regions.

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