Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - XERIUM TECHNOLOGIES INC | d8k.htm |
| EX-99.1 - PRESS RELEASE - XERIUM TECHNOLOGIES INC | dex991.htm |
| EX-99.2 - SUPPLEMENTAL PRESENTATION OF SELECTED DATA - XERIUM TECHNOLOGIES INC | dex992.htm |
EXHIBIT 99.3
Xerium Technologies, Inc.
Reconciliation of Trailing Twelve Month Bank Adjusted EBITDA
| Q3 2008 | Q4 2008 | Q1 2009 | Q2 2009 | Q3 2009 | Q4 2009 | Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 | |||||||||||||||||||||||||||||||||||||
| Net Income (loss) |
$ | 21,536 | $ | (4,349 | ) | $ | (9,448 | ) | $ | 1,601 | $ | (7,381 | ) | $ | (96,765 | ) | $ | (30,157 | ) | $ | (40,011 | ) | $ | (3,656 | ) | $ | 738 | $ | 647 | $ | 1,622 | |||||||||||||||||
| Income tax provision (benefit) |
794 | (2,443 | ) | 3,892 | 2,697 | 3,424 | 2,304 | 2,136 | 5,050 | 4,318 | 6,761 | 3,418 | 3,030 | |||||||||||||||||||||||||||||||||||
| Interest expense, net |
16,230 | 16,287 | 15,957 | 15,570 | 16,425 | 19,348 | 15,644 | 16,865 | 12,020 | 12,265 | 9,854 | 9,982 | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization |
11,738 | 10,231 | 9,788 | 10,130 | 10,851 | 11,098 | 10,451 | 10,090 | 10,222 | 10,520 | 10,808 | 11,262 | ||||||||||||||||||||||||||||||||||||
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| EBITDA |
50,298 | 19,726 | 20,189 | 29,998 | 23,319 | (64,015 | ) | (1,926 | ) | (8,006 | ) | 22,904 | 30,284 | 24,727 | 25,896 | |||||||||||||||||||||||||||||||||
| Unrealized foreign exchange gain on revaluation of debt |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Amendment/termination costs |
483 | 285 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Change in fair value of interest rate swaps |
450 | (468 | ) | (398 | ) | (397 | ) | (859 | ) | (2,164 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Changes in value of other derivatives |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Operational restructuring expenses |
1,817 | — | 114 | 1,026 | 87 | 1,184 | 1,567 | 1,796 | 1,199 | 2,552 | 168 | 542 | ||||||||||||||||||||||||||||||||||||
| Inventory write-offs under restructuring programs |
199 | 256 | 103 | 142 | 104 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Growth program costs |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-cash compensation and related expenses |
500 | 1,235 | 161 | 885 | 778 | 481 | 2,389 | 1,041 | 2,068 | 1,812 | 1,250 | 831 | ||||||||||||||||||||||||||||||||||||
| Non-cash impairment charges |
405 | 3,517 | — | — | 1,667 | 80,602 | — | 748 | 2,123 | 19 | — | — | ||||||||||||||||||||||||||||||||||||
| Non-recurring expenses resulting from cost reduction programs |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Change in accounting policies |
— | — | — | (1,400 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Financial restructuring costs (see Note B below) |
— | — | — | 9,563 | 15,251 | 799 | 584 | — | — | |||||||||||||||||||||||||||||||||||||||
| Write-off of deferred financing costs as “reorganization items” |
— | — | — | 14,283 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Expenses incurred in connection with indebtedness or refinancing transaction |
— | — | — | — | 14,400 | — | — | — | 2,926 | |||||||||||||||||||||||||||||||||||||||
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| Adjusted EBITDA for the quarter as previously reported |
$ | 54,152 | $ | 24,551 | $ | 20,169 | $ | 31,654 | $ | 25,096 | $ | 16,088 | $ | 24,476 | $ | 25,230 | $ | 29,093 | $ | 35,251 | $ | 26,145 | $ | 30,195 | ||||||||||||||||||||||||
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| Less: disallowed items under New Credit Agreement: |
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| Unrealized foreign exchange gain on revaluation of debt |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Amendment/termination costs |
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| Change in fair value of interest rate swaps |
(450 | ) | 468 | 398 | 397 | 859 | 2,164 | |||||||||||||||||||||||||||||||||||||||||
| Changes in value of other derivatives |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Growth program costs |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Plus: new items under the New Credit Agreement: |
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| Non-cash change in or adoption of accounting policies |
14,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Financial Restructuring Costs |
274 | 1,961 | 6,501 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-cash expense from granting of Common Stock |
262 | 1,628 | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash expense relating to pension or benefit arrangements |
(39,968 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
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| Proforma Adjusted EBITDA under the New Credit Agreement |
$ | 27,996 | $ | 26,647 | $ | 20,567 | $ | 32,325 | $ | 27,916 | $ | 24,753 | $ | 24,476 | $ | 25,230 | $ | 29,093 | $ | 35,251 | $ | 26,145 | $ | 30,195 | ||||||||||||||||||||||||
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| Adjusted EBITDA for the trailing twelve months (“TTM”) |
$ | 107,535 | $ | 107,455 | $ | 105,561 | $ | 109,470 | $ | 102,375 | $ | 103,552 | $ | 114,050 | $ | 115,719 | $ | 120,684 | ||||||||||||||||||||||||||||||
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Note (A) – Adjusted EBITDA for all periods above have been presented in accordance with the definition of Adjusted EBITDA in the New Credit Facility except as noted below.
Note (B) – Financial restructuring costs are not adjustments under the definition of Adjusted EBITDA in the New Credit Facility to arrive at Adjusted EBITDA for periods beginning after the quarter ended June 30, 2011.
For the three months ended March 31, 2010 and June 30, 2010, such items were added back to Adjusted EBITDA based on the terms of the Amended and Restated Credit Facility. Had these adjustments not been in place in 2010, Adjusted EBITDA would have decreased by $9,563 and $15,251 in the three months ended March 31, 2010 and June 30, 2010, respectively.
Xerium Technologies, Inc.
Reconciliation of Total Working Capital as a Percentage of Revenue
| Q2 2009 | Q3 2009 | Q4 2009 | Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 | ||||||||||||||||||||||||||||
| Net Sales |
$ | 120,843 | $ | 130,308 | $ | 132,437 | $ | 135,015 | $ | 132,827 | $ | 135,899 | $ | 144,593 | $ | 143,166 | $ | 150,378 | ||||||||||||||||||
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| Accounts Receivable |
$ | 83,216 | $ | 88,165 | $ | 83,602 | $ | 88,475 | $ | 83,268 | $ | 91,503 | $ | 93,332 | $ | 99,359 | $ | 98,068 | ||||||||||||||||||
| Inventory |
86,259 | 82,128 | 78,174 | 75,583 | 72,802 | 78,863 | 81,927 | 90,177 | 98,833 | |||||||||||||||||||||||||||
| Less: “Trade AP” (per calculation below) |
27,340 | 25,212 | 27,652 | 26,057 | 27,029 | 26,517 | 32,779 | 30,834 | 29,162 | |||||||||||||||||||||||||||
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| Trade Working Capital |
$ | 140,427 | $ | 145,081 | $ | 134,124 | $ | 138,001 | $ | 129,041 | $ | 143,849 | $ | 142,480 | $ | 158,702 | $ | 167,739 | ||||||||||||||||||
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| % of Net Sales |
29.4 | % | 27.8 | % | 25.3 | % | 25.6 | % | 24.3 | % | 26.5 | % | 24.6 | % | 27.7 | % | 27.9 | % | ||||||||||||||||||
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| Calculation of Trade AP |
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| Accounts Payable |
$ | 30,172 | $ | 27,703 | $ | 32,124 | $ | 30,488 | $ | 30,923 | $ | 31,991 | $ | 41,686 | $ | 37,992 | $ | 36,270 | ||||||||||||||||||
| Less: Deposits Received |
(2,074 | ) | (1,550 | ) | (2,014 | ) | (2,899 | ) | (2,394 | ) | (3,493 | ) | (3,415 | ) | (4,913 | ) | (5,486 | ) | ||||||||||||||||||
| Less: Other Payables |
(758 | ) | (941 | ) | (2,458 | ) | (1,532 | ) | (1,500 | ) | (1,981 | ) | (5,492 | ) | (2,245 | ) | (1,622 | ) | ||||||||||||||||||
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| Trade AP |
$ | 27,340 | $ | 25,212 | $ | 27,652 | $ | 26,057 | $ | 27,029 | $ | 26,517 | $ | 32,779 | $ | 30,834 | $ | 29,162 | ||||||||||||||||||
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Xerium Technologies, Inc.
Reconciliation of Selling, General & Administrative Expenses as a Percentage of Revenue, excluding Operational Restructuring Expense and Financial Restructuring Expense
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| Q2 2009 | Q3 2009 | Q4 2009 | Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 | ||||||||||||||||||||||||||||
| Net Sales |
$ | 120,843 | $ | 130,308 | $ | 132,437 | $ | 135,015 | $ | 132,827 | $ | 135,899 | $ | 144,593 | $ | 143,166 | $ | 150,378 | ||||||||||||||||||
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| Calculation of Selling, General & Administrative Expense, excluding Operational Restructuring Expense: |
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| Selling Expense |
$ | 16,075 | $ | 16,991 | $ | 17,234 | $ | 18,042 | $ | 17,901 | $ | 18,043 | $ | 18,897 | $ | 19,524 | $ | 20,507 | ||||||||||||||||||
| General & Administrative Expense |
6,464 | 15,428 | 21,069 | 26,850 | 17,595 | 15,652 | 14,701 | 17,380 | 16,136 | |||||||||||||||||||||||||||
| Research & Development Expense |
2,740 | 2,708 | 3,141 | 2,868 | 2,952 | 2,887 | 2,720 | 3,088 | 2,925 | |||||||||||||||||||||||||||
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| Total Selling and General & Administrative Expense, excluding Operational Restructuring Expenses |
$ | 25,279 | $ | 35,127 | $ | 41,444 | $ | 47,760 | $ | 38,448 | $ | 36,582 | $ | 36,318 | $ | 39,992 | $ | 39,568 | ||||||||||||||||||
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| % of Net Sales, excluding Operational Restructuring Expense |
20.9 | % | 27.0 | % | 31.3 | % | 35.4 | % | 28.9 | % | 26.9 | % | 25.1 | % | 27.9 | % | 26.3 | % | ||||||||||||||||||
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| Calculation of Selling, General & Administrative Expense, excluding Operational and Financial Restructuring Expense: |
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| Total Selling and General & Administrative Expense, excluding Operational Restructuring Expenses (calculated above) |
$ | 25,279 | $ | 35,127 | $ | 41,444 | $ | 47,760 | $ | 38,448 | $ | 36,582 | $ | 36,318 | $ | 39,992 | $ | 39,568 | ||||||||||||||||||
| Less: Financial Restructuring Expenses |
(274 | ) | (1,962 | ) | (6,500 | ) | (9,463 | ) | (459 | ) | — | — | — | — | ||||||||||||||||||||||
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| Total Selling and General & Administrative Expense, excluding Operational and Financial Restructuring Expenses |
$ | 25,005 | $ | 33,165 | $ | 34,944 | $ | 38,297 | $ | 37,989 | $ | 36,582 | $ | 36,318 | $ | 39,992 | $ | 39,568 | ||||||||||||||||||
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| % of Net Sales, excluding Operational and Financial Restructuring Expenses |
20.7 | % | 25.5 | % | 26.4 | % | 28.4 | % | 28.6 | % | 26.9 | % | 25.1 | % | 27.9 | % | 26.3 | % | ||||||||||||||||||
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Xerium Technologies, Inc.
Analysis of Currency Effect
| YTD 6/30/2011 |
Less: Currency Effect |
YTD Excluding Currency Effect at 6/30/2011 |
YTD 6/30/2010 |
Percentage change excluding Currency Effect |
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| Net sales |
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| Clothing |
99,632 | 6,413 | 93,219 | 89,102 | 4.6 | % | ||||||||||||||
| Rolls |
50,746 | 2,934 | 47,812 | 43,725 | 9.3 | % | ||||||||||||||
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| Total |
150,378 | 9,347 | 141,031 | 132,827 | 6.2 | % | ||||||||||||||
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| Cost of product sold |
(92,507 | ) | (6,331 | ) | (86,176 | ) | (81,109 | ) | 6.3 | % | ||||||||||
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| Gross Margin |
57,871 | 3,016 | 54,855 | 51,718 | 6.2 | % | ||||||||||||||
| Gross margin % |
38.5 | % | 32.3 | % | 38.9 | % | 38.9 | % | ||||||||||||
| Selling |
(20,507 | ) | (1,621 | ) | (18,886 | ) | (17,901 | ) | 5.5 | % | ||||||||||
| General and administrative |
(16,178 | ) | (1,442 | ) | (14,736 | ) | (17,595 | ) | -16.2 | % | ||||||||||
| Research and development |
(2,925 | ) | (40 | ) | (2,885 | ) | (2,952 | ) | -2.3 | % | ||||||||||
| Restructuring and impairments |
(542 | ) | (201 | ) | (341 | ) | (2,544 | ) | -86.6 | % | ||||||||||
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| Total selling general and administrative |
(40,152 | ) | (3,304 | ) | (36,848 | ) | (40,992 | ) | -10.1 | % | ||||||||||
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| Income from operations |
17,719 | (288 | ) | 18,007 | 10,726 | 68.2 | % | |||||||||||||
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| Interest Expense |
(9,982 | ) | (503 | ) | (9,479 | ) | (16,865 | ) | -43.8 | % | ||||||||||
| Foreign Exchange Gain (Loss) |
(159 | ) | 50 | (209 | ) | 370 | -156.5 | % | ||||||||||||
| Loss on Extinguishment of Debt |
(2,926 | ) | — | (2,926 | ) | — | 0.0 | % | ||||||||||||
| Reorganization Expense |
— | — | — | (29,192 | ) | 0.0 | % | |||||||||||||
| Provision for income taxes |
(3,030 | ) | (400 | ) | (2,630 | ) | (5,050 | ) | -47.9 | % | ||||||||||
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| Net Income |
1,622 | (1,141 | ) | 2,763 | (40,011 | ) | -107.0 | % | ||||||||||||
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| Adjusted EBITDA |
30,195 | 1,250 | 28,945 | 25,230 | 14.7 | % | ||||||||||||||
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Note: The Company excludes foreign currency effects associated with translation and multi-currency transactions. This effect is determined by translating the income statement as well as transactions made in currencies other than the functional currency at June 30, 2011 using the same currency rates that were used for the three months ended June 30, 2010.
Xerium Technologies, Inc.
Analysis of Currency Effect
| Q2 6/30/2011 |
Less: Currency Effect |
Q2 Excluding Currency Effect at 6/30/2011 |
Q2 6/30/2010 |
Percentage change excluding Currency Effect |
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| Net sales |
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| Clothing |
193,571 | 7,668 | 185,903 | 177,699 | 4.6 | % | ||||||||||||||
| Rolls |
99,973 | 3,148 | 96,825 | 90,143 | 7.4 | % | ||||||||||||||
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| Total |
293,544 | 10,816 | 282,728 | 267,842 | 5.6 | % | ||||||||||||||
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| Cost of product sold |
(181,758 | ) | (7,665 | ) | (174,093 | ) | (164,413 | ) | 5.9 | % | ||||||||||
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| Gross Margin |
111,786 | 3,151 | 108,635 | 103,429 | 5.1 | % | ||||||||||||||
| Gross margin % |
38.1 | % | 29.1 | % | 38.4 | % | 38.6 | % | ||||||||||||
| Selling |
(40,031 | ) | (1,961 | ) | (38,070 | ) | (35,943 | ) | 5.9 | % | ||||||||||
| General and administrative |
(33,558 | ) | (1,685 | ) | (31,873 | ) | (44,445 | ) | -28.3 | % | ||||||||||
| Research and development |
(6,013 | ) | (25 | ) | (5,988 | ) | (5,820 | ) | 2.9 | % | ||||||||||
| Restructuring and impairments |
(710 | ) | (232 | ) | (478 | ) | (4,111 | ) | -88.4 | % | ||||||||||
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| Total selling general and administrative |
(80,312 | ) | (3,903 | ) | (76,409 | ) | (90,319 | ) | -15.4 | % | ||||||||||
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| Income from operations |
31,474 | (752 | ) | 32,226 | 13,110 | 146.6 | % | |||||||||||||
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| Interest Expense |
(19,836 | ) | (566 | ) | (19,270 | ) | (32,509 | ) | -40.7 | % | ||||||||||
| Foreign Exchange Gain (Loss) |
5 | 66 | (61 | ) | (8 | ) | 662.5 | % | ||||||||||||
| Loss on Extinguishment of Debt |
(2,926 | ) | — | (2,926 | ) | — | 0.0 | % | ||||||||||||
| Reorganization Expense |
— | — | — | (43,575 | ) | 0.0 | % | |||||||||||||
| Provision for income taxes |
(6,447 | ) | (700 | ) | (5,747 | ) | (7,186 | ) | -20.0 | % | ||||||||||
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| Net Income |
2,270 | (1,952 | ) | 4,222 | (70,168 | ) | -106.3 | % | ||||||||||||
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| Adjusted EBITDA |
56,340 | 1,039 | 55,301 | 49,706 | 11.2 | % | ||||||||||||||
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Note: The Company excludes foreign currency effects associated with translation and multi-currency transactions. This effect is determined by translating the income statement as well as transactions made in currencies other than the functional currency at June 30, 2011 using the same currency rates that were used for the six months ended June 30, 2010.
Xerium Technologies, inc.
Effective Income Tax Rates
| Three Months Ended 6/30/2011 |
Six Months Ended 6/30/2011 |
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| Pre Tax Income |
4,652 | 8,717 | ||||||
| Add: Loss On Extinguishment of Debt |
2,926 | 2,926 | ||||||
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| Adjusted Pre Tax Income |
7,578 | 11,643 | ||||||
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| Income Taxes |
3,030 | 6,447 | ||||||
| Add: Loss On Extinguishment of Debt tax effect |
200 | 200 | ||||||
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| Adjusted Pre Tax Income |
3,230 | 6,647 | ||||||
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| Effective Tax Rate |
65.1 | % | 74.0 | % | ||||
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| Adjusted Effective Tax Rate |
42.6 | % | 57.1 | % | ||||
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