Xerium Reports 2015 Results and 2016 Outlook
- Full year 2015 sales were $477 million, a decrease of (4)% (excluding currency changes), driven primarily by declines in the graphical grade market. However, despite the market declines, we improved our operating profile in 2015 versus 2014. Gross margins, excluding start-up costs at new facilities and inventory write offs at closed facilities, increased by 30 basis points to 40.3% in 2015 from 40.0% in 2014. In addition, adjusted EBITDA rates improved 30 basis points to 21.7% of sales in 2015 from 21.4% of sales in 2014. Looking forward, we have increased our cost-out programs in 2016 to anticipate further graphical declines.
- Significant projects came on line at the end of 2015. Those included our new facilities in China and Turkey, the Griffin, Georgia rolls plant expansion, the Kentville, Nova Scotia Canada woven dryer expansion, the Gloggnitz, Austria nonwoven expansion and the Piracicaba, Brazil spiral dryer expansion. In addition, we expect the Neenah, Wisconsin rolls plant expansion and Piracicaba, Brazil nonwoven expansions to go live in the first half of 2016 and the new China forming fabric operation to go live in the second half of 2016.
- Q4 2015 results were below trend line due to the magnitude and timing of graphical mill closures and the strength of the US dollar. Net sales, excluding currency changes, decreased (5.4)% to $115 million, and Adjusted EBITDA decreased (28)% to $21.3 million (see Tables 1 and 6).
- Net debt was $480.6 million at December 31, 2015, essentially unchanged from Q3 2015 and a $20.7 million increase for the full year (see Table 2). The company completed the vast majority of its repositioning investments in Q4 2015.
- In Q4 2015, the company opened a high-tech machine clothing plant in China with state-of-the-art containerboard and tissue designs, and also opened a new rolls & service plant in Turkey aimed at containerboard and tissue machines. Both plants are on plan in Q1 2016.
- Full year 2015 repositioning results were above plan with over 1,000 new competitive machine positions gained in non-graphical areas, especially tissue and containerboard. The company’s goal is to displace existing suppliers with its new product designs, documented machine performance, responsive lead times, and competitive cost structures.
Youngsville, NC - (BUSINESS WIRE) - March 14, 2016 - Xerium Technologies Inc. (NYSE:XRM) reported a Q4 2015 net loss of $(6.3) million (which included $(5.1) million in non-recurring charges), compared to Q4 2014 net income of $11.2 million (which included $4.5 million in non-recurring income).
Net sales for Q4 2015 decreased by (5.4)% compared to Q4 2014, on a constant currency basis. Key negative market dynamics were higher-than-expected declines in the graphical markets in North America, a weak Brazilian economy and oversupply of machine clothing in Europe. Table 1 summarizes Q4 net sales and the effect of currency translation rates.
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