Aug 07, 2012. /Lesprom Network/. Xerium Technologies, Inc. announced the results of its operations for the quarter ended June 30, 2012. Net sales increased 1.5% from the quarter ended March 31, 2012, yet decreased 9.3% from the quarter ended June 30, 2011, as the company said in the press release received by Lesprom Network. On a year to date basis, net sales decreased 7.8% from the six months ended June 30, 2011. Net income per diluted share improved to $0.15 for the quarter ended June 30, 2012 from ($0.50) for the quarter ended March 31, 2012 and $0.11 for the quarter ended June 30, 2011. On a year to date basis, net income per diluted share decreased to a loss of ($0.35) for the six months ended June 30, 2012 from income of $0.15 for the six months ended June 30, 2011. “Xerium’s 2Q 2012 over 1Q 2012 performance improvement is the result of our continuous focus on operational improvements, our customers’ accelerating adoption of our better performing and higher margin new products, and reduced trade working capital in every region,” said Stephen R. Light, CEO and Chairman. Net sales for the 2Q 2012 were $136.4 million, a 1.5% increase compared to the 1Q 2012. Excluding unfavorable currency effects of $2.8 million, 2Q 2012 net sales increased 3.6% from the 1Q 2012, with an increase of 1.9% in the clothing segment and an increase of 6.8% in the roll covers segment. Gross profit increased by 9.8% to $51 million for the 2Q 2012 from $46.4 million for the 1Q 2012, yet decreased 11.9% from $57.9 million for the 2Q 2011. In the 2Q 2012, gross margins increased to 37.4% from 34.6% in the 1Q 2012. The increase was due to improved product mix, partially as a result of an unusually high level of low margin steel core sales in the 1Q 2012 and improved labor efficiencies. These increases were offset by currency exchange rate differences and unfavorable factory absorption driven by continued progress in reducing inventory levels. Gross margins declined from 38.5% in the 2Q 2011 largely as a result of the reduction of inventory reserves in the prior year. Excluding this non-recurring item, gross margins were relatively flat compared to the 2Q 2011, as unfavorable absorption of production costs and unfavorable regional mix related to the reduced European market demand were partially offset by favorable currency effects and improved material and labor cost efficiencies. The Company’s operating expenses (selling, general and administrative, restructuring and research and development expenses) of $37.1 million for the 2Q 2012 decreased by $3.1 million, or 7.7%, from operating expenses of $40.2 million in the 2Q 2011. The decrease in operating expenses during the 2Q 2012 is primarily the result of favorable currency effects of $2.5 million, a decrease of $1.6 million in management incentive compensation and the reversal of a $1 million contingent liability that was favorably resolved. Partially offsetting these items was an increase in general and administrative expenses due to the reversal in 2011 of $1.1 million in value added tax in Brazil and $0.6 million related to incremental CEO transition costs in 2012. Net income for the 2Q 2012 improved to $2.2 million or $0.15 per diluted share, compared to net loss of ($7.5) million or ($0.50) per diluted share for the 1Q 2012 and net income of $1.6 million or $0.11 per diluted share for the 2Q 2011. Adjusted EBITDA (as defined by the Company’s credit facility) of $25.4 million increased $6.6 million in the current quarter from $18.8 million in the 1Q 2012, yet decreased $4.8 million from $30.2 million in the 2Q 2011. Cash at June 30, 2012 was $33.6 million, compared to $43.6 million at December 31, 2011. The decrease in the cash balances from December 31, 2011 is primarily due to $14.9 million in payments on long-term debt, capital expenditures of $7.3 million, $1.8 million in payments relating to the credit facility amendment and unfavorable currency effects of $0.8 million. These decreases were partially offset by cash provided by operating activities of $13.8 million and proceeds from the disposition of property of $1 million. Xerium Technologies, Inc. is a leading global manufacturer and supplier of two types of consumable products used primarily in the production of paper-clothing and roll covers.