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Xerium Technologies Reports Steady Sales And Orders And Implementation Of Cost Reduction And Sales Growth Actions

For additional information regarding non-GAAP financial measures and a reconciliation of such measures to the most comparable financial measures under GAAP, please see “Segment Information” above and our Selected Financial Data below. In addition, the information in this press release should be read in conjunction with the corresponding exhibits, financial statements and footnotes contained in our documents to be filed with the Securities and Exchange Commission.

About Xerium Technologies

Xerium Technologies, Inc. (NYSE:XRM) is a leading global manufacturer of specially engineered fabrics, belts and roll cover technology used in the production of paper, paperboard, building products, non-wovens, and specific industrial processes. The Company, 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 3,275 employees.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements involving risks and uncertainties, both known and unknown, that may cause actual results to differ materially from those indicated. These risks and uncertainties include the following items: (1) a sustained downturn in the paper industry, compounded by uncertainty in global economic conditions, particularly those stemming from Europe, could adversely affect our revenues and profitability; (2) our cost reduction efforts, including our restructuring activities, may not have the positive impacts we anticipate; (3) our financial results could be adversely affected by fluctuations in interest rates and currency exchange rates, for instance a marked decline in the value of the Euro relative to the U.S. Dollar; (4) market improvement in our industry may occur more slowly than we anticipate, may stall or may not occur at all; (5) variations in demand for our products, including our new products, could negatively affect our revenues and profitability; (6) 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; (7) our plans to develop and market new products, enhance operational efficiencies, and reduce costs may not be successful; and (8) the other risks and uncertainties discussed elsewhere in this press release, our Form 10-K for the year ended December 31, 2012 filed on March 11, 2013 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.

 

Xerium Technologies, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(dollars in thousands, except per share data)

 
    Three Months Ended December 31,       Year Ended December 31,
2012       2011 2012       2011
Net sales $ 133,767 $ 145,189 $ 538,740 $ 586,960
Costs and expenses:
Cost of products sold 86,775 94,986 345,171 370,754
Selling 18,979 19,559 76,083 79,407
General and administrative 16,192 14,452 63,701 62,012
Research and development 3,150 3,177 11,681 12,097
Restructuring 14,765   302   25,708   1,589  
139,861   132,476   522,344   525,859  
(Loss) income from operations (6,094 ) 12,713 16,396 61,101
Interest expense, net (9,384 ) (9,441 ) (37,878 ) (39,150 )
Gain (loss) on extinguishment of debt 243 243 (2,926 )
Foreign exchange (loss) gain (514 ) 128   (358 ) (156 )
(Loss) income before provision for income taxes (15,749 ) 3,400 (21,597 ) 18,869
Benefit (provision) for income taxes 6,667   (967 ) 3,562   (10,679 )
Net (loss) income $ (9,082 ) $ 2,433   $ (18,035 ) $ 8,190  
Comprehensive loss $ (12,891 ) $ (16,525 ) $ (28,382 ) $ (20,979 )
Net (loss) income per share:
Basic $ (0.59 ) $ 0.16   $ (1.18 ) $ 0.54  
Diluted $ (0.59 ) $ 0.16   $ (1.18 ) $ 0.54  
Shares used in computing net (loss) income per share:
Basic 15,289,329   15,141,731   15,222,462   15,079,771  
Diluted 15,289,329   15,145,795   15,222,462   15,083,835  
 

Consolidated Selected Financial Data

 
Cash Flow Data: (in thousands)         Years Ended December 31,
2012       2011
Net cash provided by operating activities $ 39,322 $ 45,208
Net cash used in investing activities (20,617 ) (8,688 )
Net cash used in financing activities (27,472 ) (31,463 )
 
Other Financial Data: (in thousands)
 
Depreciation and amortization 40,752 43,686
Capital expenditures, gross (21,705 ) (30,154 )
 
Balance Sheet Data: (in thousands) December 31, 2012 December 31, 2011
Cash and cash equivalents $ 34,777 $ 43,566
Total assets 618,843 665,721
Total debt 444,992 469,054
Total stockholders’ deficit (29,061 ) (2,305 )

EBITDA and Adjusted EBITDA Non-GAAP Measures

Non-GAAP Financial Measures

We use EBITDA and Adjusted EBITDA (as defined in our credit facility) as supplementary non-GAAP liquidity measures to assist us in evaluating our liquidity and financial performance, specifically our ability to service indebtedness and to fund ongoing capital expenditures. The credit facility includes covenants based on Adjusted EBITDA. If our Adjusted EBITDA declines below certain levels, we may violate the covenants resulting in a default condition under the credit facility or be required to prepay the credit facility. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as a substitute for income (loss) or cash flows from operations (as determined in accordance with GAAP).

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