Xerium Technologies (XRM) Misses Q1 EPS by 4c

Xerium Technologies (NYSE: XRM) reported Q1 EPS of $0.06, $0.04 worse than the analyst estimate of $0.10. Revenue for the quarter came in at $115 million versus the consensus estimate of $113.7 million.

2017 Outlook

As disclosed previously, the Company has repositioned its business to focus on growing end markets and geographies. These efforts have included the introduction of approximately 90 new products, the opening or acquisition of 4 facilities, the closure of 8 facilities, and the conversion of much of the Company’s equipment from graphical product set-ups over to non-graphical, growing product set-ups.

As previously reported, third party outlooks of the Company’s underlying markets indicate that a large number of new machines will be installed, especially in China, and that new machine startups are now outpacing machine closures by a 2 to 1 margin. Our Q1 results support this assessment.

With an improving market environment and the expected impact of repositioning programs, the Company expects 2017 full-year adjusted EBITDA to approximate 2016 levels, or be modestly higher. In addition, the Company expects 2017 free cash flow to be modestly lower than the prior year, as higher cash interest and negative currency impacts will not be fully offset by improved operational cash flow. Given this outlook, the Company is well positioned to execute against its 4 year, $100 million debt pay down program and naturally grow its business.

For earnings history and earnings-related data on Xerium Technologies (XRM) click here.

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