Xerium Technologies declares Q2 results & Financial Outlook 2005
12 Aug '05
6 min read
Gutierrez continued, "Company clothing segment continued to grow, with net sales increasing 6.5 percent in the first half of the year compared to the same period in 2004, or 1.2 percent excluding the effect of currency translation. Clothing business was impacted marginally during the first half of 2005 by the paper industry strike in Finland and more substantially by production inefficiencies related to the final closure of our press felt facility in Farmville, Virginia, which significantly limited the amount of product that could be shipped in the quarter. Although they are disappointed that they were not able to take advantage of their strong order backlog due to these production limitations, they believe that their position remains strong, as orders in our clothing business for the first half of 2005 are up $15 million, or 7.7 percent, over the first half of 2004, and we expect that the clothing business will benefit as production levels normalize in the second half of the year.
"Company roll cover segment's net sales for the second quarter of 2005 were consistent with prior year period levels, with positive currency effects largely offset by the impact of the strike in Finland," Gutierrez noted. "During the second quarter of 2005 they incurred $0.5 million in increased R&D costs associated with several new lines of advanced covers that they plan to launch during the third quarter of this year."
He continued, "They believe in selling strategy in North America is starting to bear fruit. During the second quarter of this year, Xerium Technologies was awarded new business by four major North American customers that believe will generate approximately $10 million of incremental annualized clothing volume once the business is fully shifted to Xerium over the next 6 to 18 months. In the roll covers business, they believe that new business awarded to us during the quarter at four North American customers will generate an additional $2 million in annualized sales when the business is fully shifted to Xerium over the next 6 to 18 months."
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