Xerium sales grow marginally in Q2

02 Aug '13

3 min read

Xerium Technologies, Inc. a leading global provider of industrial consumable products and services, announced its Q2 2013 results.

Key 2013 Highlights:

-Q2 sales were $138 million, up 1.8% versus prior year (Q2 2012) on a constant currency basis

-Our roll repair and mechanical services business unit grew 5% year to date, with higher growth than industry rates, indicating a secular shift to outsource these services

-We kicked off 10 new product development programs in 2013, aimed at generating incremental future sales growth above current rates

-We received 16 new patents year to date, with more expected for Q3

-We began implementing a 350 ton press felt expansion in multiple countries aimed at generating incremental future sales growth above current rates

-We began implementing an expansion of roll repair and mechanical services capacity at several rolls service centers aimed at generating incremental future sales growth above current rates

-The transformation of our operational structure has continued with the previously announced closure of 4 manufacturing facilities and the expansion of 6 manufacturing facilities. Redeployment of assets is underway

-Sales per employee in the first half of 2013 are at a four year high of $173K per employee

-Order backlog at June 30, 2013 remained solid at $161 million

-In Q2, we refinanced a portion of our debt structure, increased our liquidity, lengthened our debt maturities and eliminated maintenance covenants while leaving our European assets unencumbered

-In Q2, we incorporated a $75 million debt expansion provision into our new debt structure that can be used for bolt-on acquisitions and/or accelerated restructuring

-Q2 Adjusted EBITDA was $26.9 million, up 5.9% versus prior year

-Last twelve months (LTM) Adjusted EBITDA was $101.1 million, up 6% over the same period last year, and is expected to increase in the second half of 2013. Net debt is $407.8 million and leverage is 4.0x

-2013 year to date Adjusted EBITDA is $56.0 million, an increase of 27% over prior year and ahead of internal plans. On a constant currency basis, we expect the second half to be similar to the first half

-Xerium's stock has been added to 3 Russell equity indexes and options on Xerium's stock have become available on 4 exchanges

Harold Bevis, Xerium's President and Chief Executive Officer said, “Q2 2013 was another good quarter for both of the businesses - our synthetic textiles business and our service and repair business. The paper industry is our primary end-market and industry growth is a couple of percent, according to published sources. Our service and repair business continues to grow a little higher than this, indicating a shift by our customers to perform services externally versus internally."

“A large portion of our higher-growing areas are capacity limited and we are working to resolve these bottlenecks. In almost all cases, there are long lead times involved. But we are setting the stage for higher growth and lower costs pointed at higher growing market opportunities. These are long-term moves for the company. Additionally, we are expanding and increasing our sales growth initiatives, especially outside core legacy markets."

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Xerium Technologies

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