Xerium Technologies (XRM) Joins Tax Amnesty Program in Brazil; Sees Lower-than-Expected Q3 Charge

Xerium Technologies (NYSE: XRM) announced that it has joined a tax amnesty program in Brazil in order to settle its outstanding Brazilian tax litigation matter. Taking part in the amnesty program will result in a tax charge during the third quarter of approximately $25.1 million, or approximately $(1.63) per share (subject to currency exchange rates), which is below the range the company previously disclosed in its most recent earnings release and its quarterly report on Form 10-Q for the quarter ended June 30, 2014. The amount of the tax charge represents the settlement of the company's open tax assessment and the cost to settle the unassessed tax years of 2011 to the present. The tax charge will not impact the company's third quarter or full year Adjusted EBITDA figure.

Executive Vice President and Chief Financial Officer Clifford E. Pietrafitta said, "The company still believes the transactions that resulted in this tax assessment were executed legally and that we had a strong case. However, given the uncertainty inherent in litigation, particularly the length of time this case could have lingered in the Brazilian courts and the very real cost associated with continuing to fight it, we felt this option represented the best opportunity in the foreseeable future to mitigate our risk and to put this issue behind us."

Xerium financed the settlement through a draw of an additional $30 million of debt financing under the accordion feature of its term loan credit facility.

You May Also Be Interested In

• Gilead Sciences (GILD) Misses Q1 EPS by 288c
• L3Harris Technologies (LHX) Tops Q1 EPS by 15c; raises guidance
• SPS Commerce (SPSC) Tops Q1 EPS by 12c