Xerium Technologies, Inc. (NYSE:XRM), a leading global manufacturer of industrial textiles and roll covers used primarily in the paper production process, announced today the results of its operations for the quarter ended September 30, 2012.
Compared to the second quarter of 2012, net sales decreased 1.6%, or 1.0% on a constant currency basis to $134.2 million in the third quarter of 2012. On a constant currency basis, net sales of machine clothing increased 1.4%, representing the second straight quarter of volume growth. On the same constant currency basis, net sales of roll covers decreased 5.3%. The flow through effect of the sales decline was the primary reason for a 3.9% decrease in Adjusted EBITDA from Q2 to Q3. It declined to $24.4 million in the third quarter of 2012 from $25.4 million in the second quarter of 2012. See "Segment Information" and "Non-GAAP Financial Measures" below for further discussion.
Compared to the third quarter of 2011, net sales decreased 9.4%, or 4.4% on a constant currency basis to $134.2 million, primarily as a result of the decline in Europe. Again, the flow-through effect of this sales decline is the primary driver of a 14.7% decrease in Adjusted EBITDA to $24.4 million in the third quarter of 2012 from $28.6 in the third quarter of 2011. Year to date, net sales decreased 8.3% or 4.3% on a constant currency basis, to $405.0 million from $441.8 million, contributing to a decrease in Adjusted EBITDA of 19.2% to $68.6 million in 2012 from $84.9 million in 2011.
The Company continued its debt reduction program during the quarter with additional net debt retirement of $5.7 million. On a year to date basis, net debt has been paid down $20.6 million and stands at $447.8 million as of September 30, 2012.Commenting on the quarter, Harold Bevis, Xerium's President and Chief Executive Officer stated "Demand in the global markets we serve is reactive to base economic health. We are committed to leading in the markets we serve. However, year-over-year sales in our traditional markets are down sharply and we must right size our cost structure around that reality. We are in the process of reducing our cost structure and advancing our capabilities technically in all regions. To that end, we are both continuing the implementation of the “Vision 2015” restructuring plan, which is expected to save $20.0 million upon completion, and we are adding significant new cost saving and revenue diversification actions."
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