Xerium Technologies, Inc. (NYSE:XRM), a leading global manufacturer of specially engineered textiles and roll covers used in the production of paper, paperboard, building products, non-wovens and specific industrial processes, announced today the results of its operations for the quarter and year ended December 31, 2012.
Net sales have been stable in 2012, averaging approximately $134.7 million per quarter, and within a range of +/- 2%. Our backlog, defined as orders expected to ship within one year, suggests that this trend will continue and currently stands at $174.0 million as of December 31, 2012. Compared to the third quarter of 2012, net sales were essentially the same at a 0.3% decline, or a 1.4% decline on a constant currency basis. Compared to the fourth quarter of 2011, net sales decreased 7.9%, or 6.2% on a constant currency basis, to $133.8 million from $145.2 million. Year over year, net sales decreased 8.2%, or 4.8% on a constant currency basis, to $538.7 million from $587.0 million. See "Segment Information" and "Non-GAAP Financial Measures" below.
Gross profit has been fairly stable in 2012, averaging approximately $48.4 million per quarter and within a range of +/- 3%. The 4.5% decline from $49.2 million in the third quarter of 2012 to $47.0 million in the fourth quarter of 2012 was primarily as a result of special charges for asset impairments, lower constant currency sales volume and reduced production absorption.
Despite stable sales, Adjusted EBITDA declined 15.6% in the fourth quarter of 2012 to $20.6 million from $24.4 million in the third quarter of 2012. This decline was primarily a result of special charges of $1.5 million for items including payroll tax exposures, accounts receivables and inventory and the third quarter reversal of $0.5 million management incentive costs that did not occur in the fourth quarter of 2012. In addition to these unusual items, Adjusted EBITDA declined $1.5 million, primarily due to reduced gross profit on lower constant currency sales and lower production absorption. See "Non-GAAP Financial Measures" below.
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