Xerium Technologies (XRM) makes consumable products that are used in the production of paper and the company’s business lines are divided among clothing and roll cover. The clothing segment manufactures clothing products, such as forming fabrics, press felts, and dryer fabrics that are used on paper-making machines. This segment also manufactures clothing that are used in other industrial applications, such as steel, plastics, leather, and textiles manufacturing; and auto-joining equipment used on paper-making machines.
The Roll Cover segment manufactures, refurbishes, and replaces covers for working rolls, including vacuum rolls and press rolls; calendar rolls; and coater rolls that are used on paper-making machines. Investors should note Xerium fell on hard times earlier this year as it was hurt by the downturn in Asian economies. The company over-invested in the region and was unable to meet certain debt covenant requirements, which resulted in a late filing of financial results and the elimination of its dividend. Xerium is scheduled to report third quarter results on November 11. Xerium also operates in North and South America and Europe in addition to Asia.
North Carolina-based Xerium was able to renegotiate its debt agreements, limiting its capital spending, and this appears to be good news for potential investors. The company plans to focus on existing operations rather than expansion plans, which could be a boon for shareholders. Analysts seem to like the move, with most recent rating being an upgrade of Xerium’s shares to “buy” by Citigroup. The company’s main competitors include Albany International Inc. and closely held Voith AG. Insiders own 62 percent of Xerium’s shares while 68 institutions own another 30 percent. Mutual fund owners include DFA, Mainstay and Vanguard.
Shares of Xerium closed at $4.12 on Tuesday and have traded between 91 cents and $8.41 over the past 52 weeks. The company has a market value of $190 million and 3,700 employees. The company markets its products under the Huyck Wangner, Weavexx, Stowe Woodward, Mount Hope, and Robec brand names.
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