Xerium to restate certain previously-issued financial statements
11 Aug '07
4 min read
Xerium Technologies Inc a leading global manufacturer of clothing and roll covers used primarily in the paper production process announced that based on the findings of its previously-announced review of the accounting treatment related to interest rate swaps that it entered into in June 2005, it will restate certain of its previously-issued financial statements.
"The interest rate swap transactions that are the subject of this restatement provide effective economic hedges and this change in accounting method will not minimize the benefits from this risk management strategy," said Thomas Gutierrez, Chief Executive Officer of Xerium Technologies.
"Accounting for hedging activities is an extremely complex area and we are committed to making sure that we make the proper adjustments now, and that future periods will be accounted for properly."
"This is a technical accounting issue which we expect will affect only interest expense and income taxes thereon and the resultant impact on net income (loss). This issue will not impact our cash flow or the operating results we announced earlier this week, including sales, income from operations and Adjusted EBITDA."
The restatement will correct the Company's accounting for the fair value of its interest rate swap agreements that it entered into in June 2005.
To date, the Company has accounted for these interest rate swaps as hedging instruments in accordance with SFAS No. 133, "Accounting forDerivative Instruments and Hedging Activities," as amended. The fair value of these interest rate swap agreements was adjusted quarterly, with the changes recorded as deferred gains or losses on the Company's consolidated balance sheet with the offset recorded in accumulated other comprehensive loss, net of tax.
marketing@alchempro.com
