EX-99.1 2 xrmq42017pressreleasev2281.htm Q4 AND FYE 2017 RESULTS PRESS RELEASE Exhibit


Xerium Reports Q4 and Full Year 2017 Results

Youngsville, NC - (BUSINESS WIRE) – February 28, 2018 - Xerium Technologies, Inc. (NYSE:XRM):

Fourth Quarter Highlights

•
Q4 2017 net sales of $122.4 million compared to $113.2 million in 2016, an increase of 8% (see Table 1).

•
Q4 2017 operating income of $9.6 million, compared to $8.8 million in 2016, an increase of 8%.

•
Q4 2017 net loss of $(9.6) million compared to Q4 2016 net loss of $(8.9) million.
Q4 2017 adjusted EBITDA of $22.7 million, compared to $20.4 million in 2016, an increase of 11% (see Table 3 and Table 5 and “Non-GAAP Financial Measures” below).

•
Q4 2017 GAAP operating cash flow of $25.8 million, capital expenditures of $(1.8) million and proceeds on asset sales of $1.8 million resulted in free cash flow of $25.8 million (see Table 6 and “Non-GAAP Financial Measures” below).

•
Total debt at December 31, 2017 was $508.9 million compared to $523.8 million at September 30, 2017. Net debt declined to $504.7 million, or 5.0x adjusted EBITDA at December 31, 2017 from $527.9 million, or 5.4x adjusted EBITDA at the end of Q3 2017. (see Table 7 and “Non-GAAP Financial Measures” below).

Full Year Highlights

•
Full year 2017 net sales of $481.0 million compared to $471.3 million in 2016, an increase of 2% (see Table 2).

•
Full year 2017 operating income of $54.8 million compared to $46.1 million in 2016, an increase of 19%.

•
Full year 2017 net loss of $(14.6) million improved over the 2016 full year loss of $(21.6) million. Full year 2017 adjusted EBITDA of $100.2 million compared to $95.3 million in 2016, an increase of 5% (see Table 4 and Table 5 and “Non-GAAP Financial Measures” below).

•
Full year 2017 GAAP operating cash flow of $24.7 million, capital expenditures of $(13.0) million and proceeds on asset sales of $2.5 million resulted in free cash flow of $14.2 million (see Table 6 and “Non-GAAP Financial Measures” below).

Xerium Technologies, Inc. (NYSE:XRM), a leading global provider of industrial consumable products and services, today reported fourth quarter and full year 2017 financial results.

Mark Staton, President and Chief Executive Officer said, “2017 was a solid year of improvement in operating results, driven by market success of our growth initiatives and supported by improved




end-market stability. Higher sales combined with greater organizational focus and improved execution enabled full-year adjusted EBITDA growth of 5%. Discipline and focus also led to impressive fourth quarter free cash generation in excess of $25 million.”

Staton continued, “Looking to the year ahead, we see a continuation of the improved end-market environment, which coupled with lower cash restructuring and global cash tax requirements positions the company to meaningfully execute on its debt reduction plans in 2018.”

Quarterly Consolidated Results

Q4 net sales were $122.4 million, an increase of 5.0% year-over-year on a constant currency basis. The increase was largely due to a 14.0% increase in roll sales related primarily to stronger volumes in North America and Europe. Q4 machine clothing sales were down 0.8%, at constant currency rates, as negative product and customer mix was partially offset by improved sales volume. Order backlogs are down 2% to $168.6 million from Q4 2016 but up 1% from Q3 2017. Table 1 summarizes Q4 net sales and the effect of currency translation rates.

Q4 2017 gross profit was $44.1 million, or 36.1% of net sales, compared to $41.9 million, or 37.1% of net sales, in Q4 2016. Rolls and service gross margin increased to 33.5% in Q4 2017, from a gross margin of 31.4% in Q4 2016. The increase was primarily due to production efficiencies in North America. Machine clothing gross margin declined to 37.9% in Q4 2017 from 40.6% in Q4 2016. The decline in machine clothing gross margin was primarily due to unfavorable product and customer mix and negative overhead absorption as inventory levels were reduced from a temporary build up earlier in the year.

SG&A expenses (including Selling, G&A and R&D expenses) were $30.2 million, or 24.6% of net sales, in Q4 2017, versus $30.9 million, or 27.3% of net sales, in Q4 2016. The decrease in SG&A expenses was primarily attributable to savings achieved through the Company’s cost-out initiatives.

Q4 2017 basic loss per share was $(0.58) versus Q4 2016 of $(0.55), due to higher restructuring costs and tax expense, partially offset by improved operating performance.

GAAP operating income in Q4 2017 was $9.6 million, or 7.8% of net sales, an increase of 8.5% compared to Q4 2016 operating income of $8.8 million, or 7.8% of net sales. Q4 2017 adjusted EBITDA improved 11.3% to $22.7 million, or 18.6% of net sales, compared to $20.4 million, or 18.0% of net sales in 2016. In addition to interest, taxes, depreciation and amortization, adjusted EBITDA excludes expenses related to the Company’s restructuring activities, plant start-up costs, stock based compensation, unrealized foreign currency gains and losses and certain non-recurring expenses. For a full reconciliation, refer to Table 5.

Cash taxes were $1.2 million in Q4 2017. Full year 2017 cash taxes were $9.7 million. Cash taxes are primarily impacted by income the Company earns in tax-paying jurisdictions relative to income it earns in non-tax-paying jurisdictions, primarily the United States. The Company expects the Tax Cuts and Jobs Act, which was enacted at the end of 2017, to be cash neutral in 2017. Going forward, while the benefit of corporate interest deductions will be limited, the Company will begin to utilize its historic U.S. net operating loss carryforwards and the effects will remain cash neutral into the mid-2020s.





The Company generated GAAP operating cash flow of $25.8 million and free cash flow of $25.8 million during Q4 2017. Net debt was $504.7 million at the end of Q4 2017 compared to $527.9 million at the end of Q3 2017 (see Table 7 for a reconciliation to total debt). The Company's net debt leverage ratio decreased from 5.4x at the end of Q3 2017 to 5.0x at December 31, 2017. The Company plans to utilize its free cash flow to pay down debt and de-lever over the remainder of its debt maturities.

2018 Outlook

The Company will discuss the current industry outlook, as well as company specific factors that will drive its expected 2018 results on its live conference call, which will be available for replay at www.xerium.com/investor-relations.

CONFERENCE CALL

The Company plans to hold a conference call this evening:
Date: February 28, 2018
Start Time: 5:00 p.m. Eastern Time
Domestic Dial-In: +1-844-818-4921
International Dial-In: +1-484-880-4582
Conference ID: 1394069
Webcast: www.xerium.com/investor-relations

To participate on the call, please dial in at least 10 minutes prior to the scheduled start. A live audio webcast and replay of the call may be found in the investor relations section of the Company's website at www.xerium.com. To follow along with the presentation that will accompany the Company's conference call, please join the webcast by going to www.xerium.com/investor-relations. Click on the webcast link appearing above our conference call details, then click on the link appearing below "Webcast Presentation" on the following page. You may also click here and you will be taken directly to the webcast registration page.


ABOUT XERIUM TECHNOLOGIES, INC.

Xerium Technologies, Inc. (NYSE:XRM) is a leading global provider of industrial consumable products and services. Its products and services are consumed during machine operation by its customers. Xerium operates around the world under a variety of brand names, and 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 28 manufacturing facilities in 13 countries around the world, Xerium has approximately 2,850 employees.








Xerium Technologies, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
 
 
 
 
 
December 31,
 
December 31,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
17,253

 
$
12,808

Accounts receivable, net
76,633

 
68,667

Inventories, net
74,725

 
70,822

Prepaid expenses
11,335

 
6,325

Other current assets
15,316

 
15,784

Total current assets
195,262

 
174,406

Property and equipment, net
282,378

 
284,101

Goodwill
64,783

 
56,783

Intangible assets
5,965

 
7,330

Non-current deferred tax asset
10,103

 
10,737

Other assets
9,358

 
8,556

Total assets
$
567,849

 
$
541,913

 
 
 
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
 
 
Current liabilities:
 
 
 
Notes payable
$
8,398

 
$
7,328

Accounts payable
39,856

 
36,158

Accrued expenses
64,155

 
64,532

Current maturities of long-term debt
10,614

 
8,600

Total current liabilities
123,023

 
116,618

Long-term debt, net of current maturities and deferred financing costs
473,904

 
472,923

Liabilities under capital lease
15,952

 
19,236

Non-current deferred tax liability
12,897

 
7,157

Pension, other post-retirement and post-employment obligations
69,205

 
65,026

Other long-term liabilities
9,334

 
7,858


Stockholders' deficit
 
 
 
Preferred stock
-

 
-

Common stock
16

 
16

Paid-in capital
432,489

 
430,823

Accumulated deficit
(457,712)

 
(443,066)

Accumulated other comprehensive loss
(111,259)

 
(134,678)

Total stockholders' deficit
(136,466)

 
(146,905)

Total liabilities and stockholders' deficit
$
567,849

 
$
541,913








Xerium Technologies, Inc.
Consolidated Statements of Operations and Comprehensive (Loss) Income
(Dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Net sales
$
122,392

 
$
113,188

 
$
481,048

 
$
471,317

Costs and expenses:
 
 
 
 
 
 
 
Cost of products sold
78,261

 
71,247

 
296,199

 
293,842

Selling
15,576

 
15,538

 
62,850

 
62,810

General and administrative
13,032

 
13,486

 
52,752

 
51,063

Research and development
1,558

 
1,829

 
6,581

 
7,100

Restructuring
4,386

 
2,259

 
7,884

 
10,362

 
112,813

 
104,359

 
426,266

 
425,177

Income from operations
9,579

 
8,829

 
54,782

 
46,140

Interest expense, net
(13,184
)
 
(12,940
)
 
(52,815
)
 
(46,155
)
Loss on debt extinguishment
—

 
(202
)
 
(32
)
 
(11,938
)
Foreign exchange (loss) gain
(627
)
 
94

 
(2,942
)
 
(383
)
Loss before provision for income taxes
(4,232
)
 
(4,219
)
 
(1,007
)
 
(12,336
)
Provision for income taxes
(5,318
)
 
(4,725
)
 
(13,639
)
 
(9,282
)
Net loss
$
(9,550
)
 
$
(8,944
)
 
$
(14,646
)
 
$
(21,618
)
Comprehensive (loss) income
$
(11,803
)
 
$
(37,497
)
 
$
8,773

 
$
(34,604
)
Net loss per share:
 
 
 
 
 
 
 
Basic
$
(0.58
)
 
$
(0.55
)
 
$
(0.90
)
 
$
(1.35
)
Diluted
$
(0.58
)
 
$
(0.55
)
 
$
(0.90
)
 
$
(1.35
)
Shares used in computing net loss per share:
 
 
 
 
 
 
 
Basic
16,367,988

 
16,127,451

 
16,282,536

 
15,994,467

Diluted
16,367,988

 
16,127,451

 
16,282,536

 
15,994,467











Xerium Technologies, Inc.
Consolidated Statement of Cash Flows
(Dollars in thousands)
 
Year Ended
December 31,
 
 
2017
 
2016
Operating activities
 
 
 
Net loss
$
(14,646
)
 
$
(21,618
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
 
 
Stock-based compensation
2,518

 
2,612

Depreciation
31,740

 
32,115

Amortization of intangibles
1,365

 
841

Deferred financing cost amortization
3,634

 
3,063

Foreign exchange loss (gain) on revaluation of debt
1,135

 
(3,267)

Deferred taxes
8,516

 
219

Asset impairment
107

 
-

Loss on disposition of property and equipment
136

 
50

Pension settlement loss
921

 
-

Loss on extinguishment of debt
32

 
11,938

Provision for doubtful accounts
574

 
275

Change in assets and liabilities which (used) provided cash:
 
 
 
Accounts receivable
(4,424)

 
1,677

Inventories
1,477

 
3,746

Prepaid expenses
(4,941)

 
332

Other current assets
656

 
(1,284)

Accounts payable and accrued expenses
(737)

 
4,504

Deferred and other long-term liabilities and assets
(3,348)

 
1,306

Net cash provided by operating activities
24,715

 
36,509

 
 
 
 
Investing activities
 
 
 
Capital expenditures
(13,033)

 
(13,706)

Proceeds from disposals of property and equipment
2,496

 
117

Acquisition costs
(1,199)

 
(16,225)

Net cash used in investing activities
(11,736)

 
(29,814)

 
 
 
 
Financing activities
 
 
 
Proceeds from borrowings
108,889

 
565,553

Net increase in notes payable
-

 
1,121

Principal payments on debt
(109,587)

 
(539,711)

Payment of financing fees
(367)

 
(23,496)

Payment of obligations under capital leases
(5,985)

 
(3,950)

Employee taxes paid on equity awards
(852)

 
(1,843)

Net cash used in financing activities
(7,902)

 
(2,326)

Effect of exchange rate changes on cash flows
(632)

 
(1,400)

Net increase in cash
4,445

 
2,969

Cash and cash equivalents at beginning of year
12,808

 
9,839

Cash and cash equivalents at end of year
$
17,253

 
$
12,808








NON-GAAP FINANCIAL MEASURES

This press release includes measures of performance that differ from the Company's financial results as reported under generally accepted accounting principles ("GAAP"). Management of the Company uses supplementary non-GAAP measures, including EBITDA, free cash flow, net debt and adjusted EBITDA, internally to assist in evaluating its liquidity and financial and operational performance. Therefore, the Company believes these non-GAAP measures may also be useful to investors and financial analysts. EBITDA and free cash flow are specifically used in evaluating the ability to service indebtedness and to fund ongoing capital expenditures. Net debt presents a view of the overall change in leverage from quarter to quarter. Adjusted EBITDA excludes certain items the Company does not believe to be indicative of on-going business trends in order to better analyze historical and future business trends on a consistent basis. EBITDA, free cash flow, net debt and adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), net cash (used in) provided by operating activities or total debt.

For additional information regarding non-GAAP financial measures and a reconciliation of such measures to the most comparable financial measures under GAAP, please see the applicable tables within this press release. In addition, the information in this press release should be read in conjunction with the corresponding exhibits, financial statements and footnotes contained in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 28, 2018 and our presentation that will accompany our conference call this evening.

NET SALES

Table 1 and Table 2 summarize Q4 and full year 2017 net sales and the effect of currency translation rates. The column “$ Change Excluding Currency” is calculated taking the difference between Q4 and full year 2017 net sales at Q4 and full year 2016 FX rates (in US dollars) less Q4 and full year 2016 reported net sales.
Table 1
 
 
 
 
 
 
 
 
Net Sales For The Three Months Ended
 
 
(Dollars in thousands)
 
December 31,
 
 
 
 
 
 
2017
 
2016
 
$ Change
 
% Change
 
$ Change Excluding Currency
 
% Change Excluding Currency
Roll Covers
$
51,656

 
$
44,004

 
$
7,652

 
17.4
%
 
$
6,149

 
14.0
 %
Machine Clothing
70,736

 
69,184

 
1,552

 
2.2
%
 
(528)

 
(0.8
)%
Total
$
122,392

 

$113,188

 
$
9,204

 
8.1
%
 
$
5,621

 
5.0
 %





Table 2
 
 
 
 
 
 
 
 
Net Sales For The Year Ended
 
 
(Dollars in thousands)
 
December 31,
 
 
 
 
 
 
2017
 
2016
 
$ Change
 
% Change
 
$ Change Excluding Currency
 
% Change Excluding Currency
Roll Covers
$
192,779

 
$
184,944

 
$
7,835

 
4.2
%
 
$
7,000

 
3.8
%
Machine Clothing
288,269

 
286,373

 
1,896

 
0.7
%
 
945

 
0.3
%
Total
$
481,048

 
$
471,317

 
$
9,731

 
2.1
%
 
$
7,945

 
1.7
%

ADJUSTED EBITDA

Table 3 and Table 4 summarize Q4 and full year 2017 adjusted EBITDA and the effect of currency translation rates. The column “$ Change Excluding Currency” is calculated taking the difference between Q4 and full year 2017 adjusted EBITDA at Q4 and full year 2016 FX rates (in US dollars) less Q4 and full year 2016 reported adjusted EBITDA.

Table 3
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA For the Three Months Ended
 
(Dollars in thousands)
 
December 31,
 
 
 
 
 
 
 
 
 
2017
 
2016
 
$ Change
 
% Change
 
$ Change Excluding Currency
 
% Change Excluding Currency
Roll Covers
$
10,723

 
$
7,847
 
 
$
2,876
 
 
36.7
%
 
$
2,463
 
 
31.4
 %
Machine Clothing
17,044

 
17,813
 
 
(769)
 
 
(4.3
)%
 
(858)
 
 
(4.8
)%
Corporate
(5,044)

 
(5,245)
 
 
201
 
 
3.8
%
 
445
 
 
8.5
 %
Total
$
22,723

 
$
20,415
 
 
$
2,308
 
 
11.3
%
 
$
2,050
 
 
10.0
 %

Table 4
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 For the Year Ended
 
 
(Dollars in thousands)
 
December 31,
 
 
 
 
 
 
 
 
 
2017
 
2016
 
$ Change
 
% Change
 
$ Change Excluding Currency
 
% Change Excluding Currency
Roll Covers
$
40,060

 
$
36,458
 
 
$
3,602
 
 
9.9
%
 
$
3,158
 
 
8.7
%
Machine Clothing
76,600

 
75,114
 
 
1,486
 
 
2.0
%
 
3,424
 
 
4.6
%
Corporate
(16,435)

 
(16,280)
 
 
(155)
 
 
(1.0
)%
 
59
 
 
0.4
%
Total
$
100,225

 
$
95,292
 
 
$
4,933
 
 
5.2
%
 
$
6,641
 
 
7.0
%







EBITDA AND ADJUSTED EBITDA

EBITDA is defined as net income (loss) before interest expense, income tax provision (benefit) and depreciation (including non-cash impairment charges) and amortization.
"Adjusted EBITDA" means, with respect to any period, the total of (A) the consolidated net income for such period, plus (B) without duplication, to the extent that any of the following were deducted in computing such consolidated net income (loss) for such period: (i) provision for taxes based on income or profits, including, without limitation, federal, state, provincial, franchise and similar taxes, including any penalties and interest relating to any tax examinations, (ii) consolidated interest expense, (iii) consolidated depreciation and amortization expense, (iv) reserves for inventory in connection with plant closures, (v) consolidated operational restructuring costs, (vi) noncash charges resulting from the application of purchase accounting, including push-down accounting, (vii) non-cash expenses resulting from the granting of common stock, stock options, restricted stock or restricted stock unit awards under equity compensation programs solely with respect to common stock, and cash expenses for compensation mandatorily applied to purchase common stock, (viii) non-cash items relating to a change in or adoption of accounting policies, (ix) non-cash expenses relating to pension or benefit arrangements, (x) expenses incurred as a result of the repurchase, redemption or retention of common stock earned under equity compensation programs solely in order to make withholding tax payments, (xi) amortization or write-offs of deferred financing costs, (xii) any non-cash losses resulting from mark to market hedging obligations (to the extent the cash impact resulting from such loss has not been realized in such period), (xiii) unrealized foreign currency losses and (xiv) other non-cash losses or charges (excluding, however, any non-cash loss or charge which represents an accrual of, or a reserve for, a cash disbursement in a future period), minus (C) without duplication, to the extent any of the following were included in computing consolidated net income (loss) for such period, (i) unrealized foreign currency gains and (ii) non-cash gains with respect to the items described in clauses (vi), (vii), (ix), (xi), (xii) and xiv (other than, in the case of clause (xiv), any such gain to the extent that it represents a reversal of an accrual of, or reserve for, a cash disbursement in a future period) of clause (B) above and (iii) provisions for tax benefits based on income or profits. Notwithstanding the foregoing, adjusted EBITDA, as defined and calculated below, may not be comparable to similarly titled measurements used by other companies.

Consolidated net income (loss) is defined as net income (loss) determined on a consolidated basis in accordance with GAAP; provided, however, that the following, without duplication, shall be excluded in determining consolidated net income (loss): (i) any net after-tax extraordinary or non-recurring gains, losses or expenses (less all fees and expenses relating thereto), (ii) the cumulative effect of changes in accounting principles, (iii) any fees and expenses incurred during such period in connection with the issuance or repayment of indebtedness, any refinancing transaction or amendment or modification of any debt instrument, in each case and (iv) any cancellation of indebtedness income. Table 5 provides a reconciliation from net income (loss), which is the most directly comparable GAAP financial measure, to EBITDA and adjusted EBITDA.




Table 5
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
Q4
 
Full Year
 
Trailing Twelve Months Ended September 30, 2017
 
 
2017
 
2016
 
2017
 
2016
 
 
Net loss
$
(9,550)

 
 
$
(8,944)

 
 
$
(14,646)
 
 
$
(21,618)

 
$
(14,041)
 
Stock-based compensation
269
 
 
 
489
 
 
 
1,331
 
 
2,612
 
 
 
1,551
 
CEO transition stock-based compensation
—
 
 
 
—
 
 
 
1,187
 
 
—
 
 
 
1,187
 
Depreciation
8,110
 
 
 
7,909
 
 
 
31,740
 
 
32,115
 
 
 
31,539
 
Amortization of other intangibles
555
 
 
 
268
 
 
 
1,365
 
 
841
 
 
 
1,078
 
Deferred financing cost amortization
912
 
 
 
828
 
 
 
3,634
 
 
3,063
 
 
 
3,551
 
Foreign exchange loss (gain) on revaluation of debt
71
 
 
 
(3,310)
 
 
 
1,135
 
 
(3,267)
 
 
 
(2,246)
 
Deferred taxes
3,154
 
 
 
3,285
 
 
 
8,516
 
 
219
 
 
 
8,647
 
Asset impairments
13
 
 
 
—
 
 
 
107
 
 
—
 
 
 
94
 
Pension settlement loss
—
 
 
 
—
 
 
 
921
 
 
—
 
 
 
921
 
Loss (gain) on disposition of property and equipment
263
 
 
 
—
 
 
 
136
 
 
50
 
 
 
(127)
 
Loss on extinguishment of debt
—
 
 
 
202
 
 
 
32
 
 
11,938
 
 
 
234
 
Change in assets and liabilities which provided (used) cash
21,963
 
 
 
13,815
 
 
 
(10,743)
 
 
10,556
 
 
 
(18,891)
 
Net cash provided by operating activities
25,760
 
 
 
14,542
 
 
 
24,715
 
 
36,509
 
 
 
13,497
 
Interest expense, excluding amortization
12,272
 
 
 
12,111
 
 
 
49,181
 
 
43,092
 
 
 
49,020
 
Change in assets and liabilities which (provided) used cash
(21,963)
 
 
 
(13,815)
 
 
 
10,743
 
 
(10,556)
 
 
 
18,891
 
Current portion of income tax expense
2,164
 
 
 
1,440
 
 
 
5,123
 
 
9,063
 
 
 
4,399
 
Stock-based compensation
(269)
 
 
 
(489)
 
 
 
(1,331)
 
 
(2,612)
 
 
 
(1,551)
 
CEO transition stock-based compensation
—
 
 
 
—
 
 
 
(1,187)
 
 
—
 
 
 
(1,187)
 
Pension settlement loss
—
 
 
 
—
 
 
 
(921)
 
 
—
 
 
 
(921)
 
Foreign exchange (loss) gain on revaluation of debt
(71)
 
 
 
3,310
 
 
 
(1,135)
 
 
3,267
 
 
 
2,246
 
Asset Impairment
(13)
 
 
 
—
 
 
 
(107)
 
 
—
 
 
 
(94)
 
(Loss) gain on disposition of property and equipment
(263)
 
 
 
—
 
 
 
(136)
 
 
(50)
 
 
 
127
 
Loss on extinguishment of debt
—
 
 
 
(202)
 
 
 
(32)
 
 
(11,938)
 
 
 
(234)
 
EBITDA
17,617
 
 
 
16,897
 
 
 
84,913
 
 
66,775
 
 
 
84,193
 
Operational restructuring
4,386
 
 
 
2,259
 
 
 
7,884
 
 
10,362
 
 
 
5,757
 
Loss on extinguishment of debt
—
 
 
 
202
 
 
 
32
 
 
11,938
 
 
 
234
 
Other non-recurring (income) expenses
(25)
 
 
 
364
 
 
 
122
 
 
1,116
 
 
 
511
 
CEO transition expenses
9
 
 
 
—
 
 
 
3,063
 
 
—
 
 
 
3,054
 
Stock-based compensation
269
 
 
 
489
 
 
 
1,331
 
 
2,612
 
 
 
1,551
 
Plant startup costs
38
 
 
 
318
 
 
 
721
 
 
2,176
 
 
 
1,001
 
Unrealized foreign exchange loss (gain)
429
 
 
 
(114)
 
 
 
2,159
 
 
313
 
 
 
1,616
 
Adjusted EBITDA
22,723
 
 
 
20,415
 
 
 
100,225
 
 
95,292
 
 
 
97,917
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


FREE CASH FLOW

Table 6 summarizes free cash flow which is defined as net cash provided by operating activities less capital expenditures plus proceeds from disposals of property and equipment.





Table 6
 
 
 
 
 
 
 
(Dollars in thousands)
Q4
 
Full Year
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
25,760

 
$
14,542

 
$
24,715

 
$
36,509

Capital expenditures
(1,828)

 
(4,092)

 
(13,033)

 
(13,706)

Proceeds from disposals of property and equipment
1,820

 
23

 
2,496

 
117

Free Cash flow
$
25,752

 
$
10,473

 
$
14,178

 
$
22,920



NET DEBT

Table 7 summarizes net debt which is defined as GAAP total debt less cash and deferred financing fees and net debt leverage which is defined as net debt divided by trailing twelve month adjusted EBITDA.

Table 7
 
 
 
 
 
(Dollars in thousands)
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
 
 
 
 
 
Total debt (including capital leases)
$
508,868

 
$
523,787

 
$
508,087

less cash
(17,253)

 
(9,881)

 
(12,808)

less deferred financing fees
13,102

 
14,031

 
16,436

Net debt
$
504,717

 
$
527,937

 
$
511,715

Trailing twelve month adjusted EBITDA
$
100,225

 
$
97,917

 
$
95,292

Net debt leverage
5.0

 
5.4

 
5.4






FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. The words "will", "believe," "estimate," "expect," "intend," "anticipate," "goals," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding our anticipated cash restructuring and cash tax requirements and debt reduction plans. Forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by us, as well as from risks and uncertainties beyond our control. These risks and uncertainties include the following items: (1) we may not realize the financial performance we are projecting; (2) our expected sales performance and our backlog of sales may not be fully realized; (3) our cost reduction efforts, including our restructuring activities, may not have the positive impacts we anticipate; (4) our plans to develop and market new products, enhance operational efficiencies and reduce costs may not be successful; (5) market improvement in our industry may occur more slowly than we anticipate, may stall or may not occur at all; (6) variations in demand for our products, including our new products, could negatively affect our revenues and profitability; (7) 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; and (8) the other risks and uncertainties discussed elsewhere in this press release, our Annual Report on Form 10-K for the year ended December 31, 2017 filed on February 28, 2018 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.

Source: Xerium Technologies Inc.
Xerium Technologies, Inc.
Cliff Pietrafitta
Chief Financial Officer
Investor relations line: 919-526-1444