Adjusted EBITDA in the 1Q 2013 was $29.1 million, bringing last twelve months EBITDA up to $99.6 million, or 18.3% of net sales. The quarterly EBITDA performance was an increase of 41% from $20.6 million in the 4Q 2012 and an increase of 55% versus the 1Q 2012. The sequential increase reflects a better than expected sales mix in the 1Q compared to a worse than average mix in the 4Q 2012.
The company's gross margin performance over the past twelve months is consistent with its goal of a 37% gross margin baseline, and its cost reduction initiatives are on track.
Net sales in the 1Q were $139.8 million, an increase of 4% compared to $134.4 million in the 1Q 2012. The industries served by Xerium remain stable globally overall, according to external forecasts. Net sales and margins in the 1Q were higher than last year's averages due to normal fluctuations in the timing of sales and product mix. The company remains optimistic that external market forecasts are realistic and that its sales performance will continue to be similar. Backlog, defined as orders to be shipped within twelve months, at the end of the first quarter remained solid at $166 million.
Net debt at the end of the quarter was $400.9 million and last twelve months EBITDA was $99.6 million creating net leverage of 4.0x. The company is currently underway with a refinancing of a portion of its debt.
Harold Bevis, Xerium's President and CEO stated, "We are pleased with the company's 1Q 2013 results. Our sales performance has been fairly consistent for the last year with normal quarter to quarter sales mix variations. If you look at sales over a few quarters, the business has been pretty steady. We have some regional contractions and/or expansions due primarily to paper and containerboard segment shifts. We are underway with some fundamental repositioning activities and they are on track. Our actions in the quarter were on pace to achieve the previously announced plan to lower costs $12 million, net, in 2013. With regards to a potential refinancing of a portion of our debt, we remain optimistic that we will complete this refinancing in May, and will issue a press release at that time describing the terms of the refinancing."
Xerium Technologies, Inc. is a leading global manufacturer of specially engineered fabrics, belts and roll cover technology used in the production of paper, paperboard, building products, non-wovens, and specific industrial processes.