Xerium's clothing & rolls business remain stable in Europe
13 Nov '06
3 min read
"The impact of inflation on Xerium's total cost structure during the quarter was an increase of approximately 2.4 percent compared to the prior year quarter. Gross margins have remained stable compared to the same quarter last year at approximately 40.4 percent."
"We continue to focus on managing material costs and have recently signed a multi-year contract with a provider of clothing raw materials that we expect will deliver benefits of up to $3 million per year once the transition of volume to the vendor is completed by the end of 2007."
He added, "Our cash position has improved by more than 12% in the past quarter. We have determined that the capital spending requirements for 2006 will not exceed $32 million in total, and made a voluntary debt repayment of $23.0 million on November 2, 2006 to further reduce our long-term debt."
"We took other steps in the third quarter that strategically improve our global position, including purchasing our Japanese distributor. In addition, we sold our UK equipment business. Overall, we remain optimistic about the long-term prospects for Xerium."
Mr. Gutierrez concluded, "During the fourth quarter we will be evaluating the creation of a dividend reinvestment plan, or DRIP, that would allow shareholders to elect to reinvest all or a portion of their dividends in shares of our common stock rather than cash."
The Company plans to hold a conference call to discuss these results this morning, Monday, November 13, 2006, beginning at 8 am ET. The call is accessible via the Company's website following the links to investor relations and webcasts.
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