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Xerium Technologies Inc. Message Board

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  • nprfreak nprfreak Jun 20, 2010 4:01 PM Flag

    NPR Freak - why do you like XRM

    Management and Board of Directors:

    Whether is was APAX or Light or both, there is better paper industry representation in both the executive suite and in the boardroom than there was when I started investing. Given the difficulties and rapid change in the industry, that experience could assist Xerium in capturing market share. (I suspect paper is a pretty incestuous industry with players all knowing each other and folks moving between companies.)

    I don't know a tremendous amount about the division heads (an understatement - "I know nothing" would be more accurate), but they seem to know what they are doing and have long tenure. CFO Dave Maffucci came to Xerium from newsprint maker Bowater (aquired by Atibibi and now in Ch 11). He hasn't screwed up to my knowledge - his predecessor was the one that did the rate swaps wrong - and the street really seems to like him. That spike in the stock price last June was apparently a response to his being named CFO after serving on the BOD for some time. He doesn't say much on earnings calls anymore, but there hasn't been that much to say with the debt problems in limbo for more than six months. CFO is a demanding job with Xerium spread over 13 countries with different rules, laws and currencies.

    Obviously, I am a Light fan and I have to check my assumptions periodically to insure that is not blinding me to some negative reality. (If the company had not gotten itself into such dire straits I would say he is overpaid.) Xerium gives no forward guidance - ever - on anything earnings related. But Light's prepared presentation on the earnings calls is clear and reasonably complete.

    He doesn't white-wash bad news and started warning about the potential 9/30/09 covenant violation as early as the Q4 08 earnings call. With two of their largest customers in bankruptcy (AtibibiBowater and Smurfit Stone) it was inevitable. It's clear during the QandA session on the calls that Light has all the facts at his finger tips and it didn't take him along to get there. It's obvious his first priority when he was hired was to learn the details of the products and the business I haven't detected any verbal hedging when answering questions until recently and that was mild and clearly the result of legal advice. (And yes, SA has recent transcripts after stopping for a couple of quarters.)

    So I'm impressed with the management team sitting here on the outside looking in. They seem to be very hands-on with the divisions. They have executed well and consistently on plans and have continued to move forward during the chaos. I'm sure many were surprised that they were negotiated with a Chinese clothing manufacturer even during the bankruptcy procedings.

    This is getting long, so one more.

 
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