Xerium Technologies' CEO Discusses Q1 2012 Results - Earnings Call Transcript

Our actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those described in Tuesday's press release, in our slide presentation and in our SEC filings. The forward-looking statements represents our view as of today, May 9, 2012, and we specifically disclaim any obligation to update these forward-looking statements.

Lastly, on this call, 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, we believe will assist you in better understanding our company. Reconciliations of these measures to the comparable GAAP numbers are available in 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. Thanks for joining us this morning. Generally, little has changed since our 2011 annual earnings call just 8 weeks ago as conditions in the global paper industry continue to be significantly differentiated by region and paper grade. Our chief concern continues to be our largest market, Europe, where paper production remains depressed as a result of the region's overall poor economic health. The most recent paper producer association data from the Confederation of European Paper Industries, or CEPI, report in February shows cumulative production tonnage to be about 3.6% below last year and 3.7% below January of 2012. The hardest hit segment of the European market has been graphic upgrades, where year-to-date production is 6.3% below last year's cumulative output, while the best area, sanitary products, or what we would typically call the tissue segment in North America, experienced growth of just 2.7%. However, in what we consider a positive turn as the first quarter developed, our European customers increased orders steadily throughout the quarter to a level substantially above the end of 2011.

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