10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

________________________

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2013

Or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from             to             

Commission File Number 001-32498

________________________

Xerium Technologies, Inc.

(Exact name of registrant as specified in its charter)

________________________

DELAWARE	42-1558674
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8537 Six Forks Road Suite 300 Raleigh, North Carolina	27615
(Address of principal executive offices)	(Zip Code)

(919) 526-1400

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	£		Accelerated filer	£
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act).    Yes  ¨    No  ý

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ý    No  ¨

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of May 1, 2013 was 15,370,146.

TABLE OF CONTENTS

Part I. Financial Information
		Page
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
Part II. Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 6.	Exhibits	31

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Xerium Technologies, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

	March 31, 2013 (Unaudited)			December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	40,763		$	34,777
Accounts receivable, net	92,360			84,456
Inventories, net	75,265			77,391
Prepaid expenses	8,860			9,386
Other current assets	15,556			14,839
Total current assets	232,804			220,849
Property and equipment, net	299,853			308,806
Goodwill	58,821			61,127
Intangible assets	17,307			18,678
Other assets	8,095			9,383
Total assets	$	616,880		$	618,843
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable	7,705			7,911
Accounts payable	$	35,421		$	36,884
Accrued expenses	63,787			59,757
Current maturities of long-term debt	2,500			2,397
Total current liabilities	109,413			106,949
Long-term debt, net of current maturities	431,489			434,684
Deferred and long-term taxes	15,651			16,582
Pension, other post-retirement and post-employment obligations	81,103			83,949
Other long-term liabilities	5,262			5,740
Commitments and contingencies (Note 9)
Stockholders’ deficit
Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares outstanding as of March 31, 2013 and December 31, 2012	—			—
Common stock, $0.001 par value, 20,000,000 shares authorized; 15,370,146 and 15,309,717 shares outstanding as of March 31, 2013 and December 31, 2012, respectively	15			15
Stock warrants	13,532			13,532
Paid-in capital	413,420			413,124
Accumulated deficit	(408,354		)	(413,839		)
Accumulated other comprehensive loss	(44,651		)	(41,893		)
Total stockholders’ deficit	(26,038		)	(29,061		)
Total liabilities and stockholders’ deficit	$	616,880		$	618,843

See accompanying notes.

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Xerium Technologies, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended March 31,
	2013			2012
Net Sales	$	139,805		$	134,364
Costs and expenses:
Cost of products sold	85,298			87,921
Selling	18,521			19,488
General and administrative	14,634			17,825
Research and development	2,654			2,962
Restructuring	1,255			3,974
	122,362			132,170
Income from operations	17,443			2,194
Interest expense, net	(9,206		)	(9,598		)
Foreign exchange (loss) gain	(249		)	539
Income (loss) before provision for income taxes	7,988			(6,865		)
Provision for income taxes	(2,503		)	(657		)
Net income (loss)	$	5,485		$	(7,522	)
Comprehensive income (loss)	$	2,727		$	(3,478	)
Net income (loss) income per share:
Basic	$	0.36		$	(0.50	)
Diluted	$	0.36		$	(0.50	)
Shares used in computing net income (loss) income per share:
Basic	15,312,523			15,162,183
Diluted	15,381,204			15,162,183

See accompanying notes.

4

Xerium Technologies, Inc.

Condensed Consolidated Statements of Cash Flows—(Unaudited)

(Dollars in thousands)

	Three Months Ended March 31,
	2013			2012
Operating activities
Net income (loss)	$	5,485		$	(7,522	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation	295			972
Depreciation	8,966			9,764
Amortization of intangibles	576			576
Deferred financing cost amortization	709			1,054
Foreign exchange (gain) loss on revaluation of debt	(118		)	8
Deferred taxes	282			(182		)
Asset impairment	928			—
Gain on disposition of property and equipment	(10		)	(446		)
Provision for doubtful accounts	35			141
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(9,227		)	3,047
Inventories	928			(2,364		)
Prepaid expenses	452			9
Other current assets	(1,963		)	829
Accounts payable and accrued expenses	2,946			4,441
Deferred and other long-term liabilities	(1		)	(175		)
Net cash provided by operating activities	10,283			10,152
Investing activities
Capital expenditures, gross	(3,713		)	(3,251		)
Proceeds from disposals of property and equipment	317			703
Net cash used in investing activities	(3,396		)	(2,548		)
Financing activities
Principal payments on debt	(603		)	(13,179		)
Payment of deferred financing fees	—			(61		)
Net cash used in financing activities	(603		)	(13,240		)
Effect of exchange rate changes on cash flows	(298		)	380
Net increase (decrease) in cash	5,986			(5,256		)
Cash and cash equivalents at beginning of period	34,777			43,566
Cash and cash equivalents at end of period	$	40,763		$	38,310

See accompanying notes.

5

Xerium Technologies, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Dollars in thousands, except per share data)

1. Description of Business and Significant Accounting Policies

Description of Business

Xerium Technologies, Inc. (the "Company") is a leading global provider of industrial consumables and mechanical services used in the production of paper, paperboard, building products and nonwoven materials. Its operations are strategically located in the major paper-making regions of the world, including North America, Europe, South America and Asia-Pacific.

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements at March 31, 2013 and for the three months ended March 31, 2013 and 2012 include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, such financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. The interim results presented herein are not necessarily indicative of the results to be expected for the entire year. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation of the financial statements for the interim periods presented. These unaudited consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2012 as reported on the Company's Annual Report on Form 10-K filed on March 11, 2013.

Accounting Policies

Inventories, net

Inventories are generally valued at the lower of cost or market using the first-in, first-out (FIFO) method. Raw materials are valued principally on a weighted average cost basis. The Company’s work in process and finished goods are specifically identified and valued based on actual inputs to production. Provisions are recorded as appropriate to write-down obsolete and excess inventory to estimated net realizable value. The process for evaluating obsolete and excess inventory often requires management to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business, while considering the general aging of inventory and factoring in any new business conditions.

The components of inventories, net of allowances are as follows at:

	March 31, 2013		December 31, 2012
Raw materials	$	17,330	$	16,924
Work in process	23,790		23,681
Finished goods (includes consigned inventory of $8,754 in 2013 and $8,726 in 2012)	34,145		36,786
	$	75,265	$	77,391

Goodwill

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Intangible Assets (“Topic 350”). Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized, but instead, must be tested for impairment at least annually or whenever events or business conditions warrant. During the three months ended March 31, 2013, the Company evaluated events and business conditions to determine if a test for an impairment of goodwill was warranted. No such events or business conditions took place during this period, therefore no test was determined to be warranted at March 31, 2013.

Warranties

The Company offers warranties on certain products that it sells. The specific terms and conditions of these warranties vary depending on the product sold, the country in which the product is sold and arrangements with the customer. The

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Company estimates the costs that may be incurred under its warranties and records a liability for such costs. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction. The Company periodically assesses the adequacy of its recorded warranty claims and adjusts the amounts as necessary. The table below represents the changes in the Company’s warranty liability for the three months ended March 31, 2013:

	Balance at December 31, 2012		Charged to Revenue or Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Balance at March 31, 2013
For the three months ended March 31, 2013	$	1,848	$	514	$	(35	)	$	(307	)	$	2,020

Net Income (Loss) Per Common Share

Net income (loss) per common share has been computed and presented pursuant to the provisions of ASC Topic 260, Earnings per Share (“Topic 260”). Net income (loss) per share is based on the weighted-average number of shares outstanding during the period. As of March 31, 2013 and 2012, the Company had outstanding restricted stock units (“RSUs”), deferred stock units (“DSUs”), warrants and options.

The following table sets forth the computation of basic and diluted weighted-average shares:

	Three Months Ended March 31,
	2013	2012
Weighted-average common shares outstanding–basic	15,312,523	15,162,183
Dilutive effect of stock-based compensation awards outstanding	68,681	—
Weighted-average common shares outstanding–diluted	15,381,204	15,162,183

Dilutive securities aggregating approximately 2.5 million and 1.7 million were outstanding for the three months ended March 31, 2013 and March 31, 2012, but were not included in the computation of diluted earnings per share for the three months ended March 31, 2013 and 2012 because the impact of including such shares would be anti-dilutive to the earnings per share calculations.

Impairment

The Company reviews its long-lived assets that have finite lives for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment (“Topic 360”). This topic requires that companies evaluate the fair value of long-lived assets based on the anticipated undiscounted future cash flows to be generated by the assets when indicators of impairment exist to determine if there is impairment to the carrying value. Any change in the carrying amount of an asset as a result of the Company's evaluation has been recorded in restructuring and impairments expense in the consolidated statements of operations. Impairment charges associated with restructuring are discussed in Note 7 "Restructuring Expense".

In addition, in the first quarter of 2013, the Company determined there was impairment to the carrying value of it's vacant facility held for sale and certain other assets at March 31, 2013, and recorded a $0.9 million impairment expense. This impairment charge is included in general and administrative expense in the Consolidated Statements of Operations for the quarter ended March 31, 2013.

New Accounting Standards

On February 5, 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to reporting of amounts reclassified out of accumulated other comprehensive income. This pronouncement affects the reporting of reclassification adjustments from accumulated other comprehensive income. The new requirements took effect for quarterly and annual reporting periods beginning after December 15, 2012. We adopted the provisions of this guidance at March 31, 2013. See Note 6 for this disclosure.

2. Derivatives and Hedging

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As required by ASC Topic 815, Derivatives and Hedging (“Topic 815”), the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. From time to time, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known cash amounts, the value of which are determined by interest rates or foreign exchange rates.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate caps as part of its interest rate risk management strategy. Interest rate caps designated as cash flow hedges protect the Company from increases in interest rates above the strike rate of the interest rate cap. However, the Company’s financial statements are exposed to the effects of interest rate fluctuations below the strike rate negotiated in the interest rate cap agreements, which could have a material impact on its results of operations.

On August 8, 2011, the Company entered into two interest rate cap agreements with certain financial institutions, in notional amounts totaling $114,400, whereby the Company limits its variable interest rate exposure to the strike rate of the interest rate cap agreements. At March 31, 2013, the notional amount of these agreements was $90,720. Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate

increases above the negotiated cap rates of 3.0%. The interest rate caps are considered designated hedging instruments, classified as Level 2 in the fair value hierarchy. Changes in fair value will be deferred in accumulated other comprehensive loss and the cap purchase price will be reclassified from accumulated comprehensive loss into earnings as interest expense over the life of the agreements. The fair value of the interest rate caps was $10 at March 31, 2013 and $16 at December 31, 2012. These amounts are included in other assets in the Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012. Unrecognized losses of ($612) and ($644) were recorded in accumulated other comprehensive income (loss) at March 31, 2013 and December 31, 2012, respectively. The Company expects to reclassify $146 from other comprehensive income (loss) to interest expense over the next twelve months.

Non-designated Hedges of Foreign Exchange Risk

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to foreign exchange rates, but do not meet the strict hedge accounting requirements of Topic 815. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly to earnings.

The Company, from time to time, may enter into foreign exchange forward contracts to fix currencies at specified rates based on expected future cash flows to protect against the fluctuations in cash flows resulting from sales denominated in foreign currencies. Additionally, to manage its exposure to fluctuations in foreign currency on intercompany balances and certain purchase commitments, the Company from time to time may use foreign exchange forward contracts.

As of March 31, 2013 and December 31, 2012, the Company had outstanding derivatives that were not designated as hedges in qualifying hedging relationships. The value of these contracts is recognized at fair value based on market exchange forward rates and is recorded in other assets or other liabilities on the Consolidated Balance Sheets. The fair value of these derivatives at March 31, 2013 and December 31, 2012 was ($16) and $357, respectively. The change in fair value of these contracts is included in foreign exchange gain and was $103 and $451 for the three months ended March 31, 2013 and 2012, respectively.

The following represents the notional amounts of foreign exchange forward contracts at March 31, 2013:

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	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	24,344	$	(10,191	)

Fair Value of Derivatives Under ASC Topic 820

ASC Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs including fair value of investments that do not have the ability to redeem at net asset value as of the measurement date, or during the first quarter following the measurement date. The derivative assets or liabilities are typically based on an entity’s own assumptions, as there is little, if any, market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and the Company considers factors specific to the asset or liability. The Company determined that its derivative valuations, which are based on market exchange forward rates, fall within Level 2 of the fair value hierarchy.

3. Long-term Debt

At March 31, 2013 and December 31, 2012, long-term debt consisted of the following:

	March 31, 2013		December 31, 2012
Senior Bank Debt (Secured):
First lien debt, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of March 31, 2013	$	104,244	$	104,557
First lien debt, payable quarterly, Euro denominated–EURIBOR (minimum 1.25%) plus 5.00% (6.25%) as of March 31, 2013	93,202		95,979
	197,446		200,536
Senior Notes (Unsecured), payable semi-annually–U.S. Dollar denominated interest rate fixed at 8.875%, matures June of 2018	236,410		236,410
Other Long-Term Debt:
Unsecured, interest rate fixed at 2.00%, Euro denominated	133		135
Unsecured, interest rate fixed at 1.31% to 3.40%, Yen denominated	—		—
	433,989		437,081
Less current maturities	2,500		2,397
Total	$	431,489	$	434,684

On May 26, 2011, the Company completed a refinancing transaction, which replaced certain of its then outstanding indebtedness with $240 million aggregate principal amount of 8.875% senior unsecured notes (the “Notes”) and a new approximately $278 million multi-currency senior secured credit facility (as subsequently amended, the “Credit Facility”), comprised of approximately $248 million of senior secured term loans and a $30 million senior secured revolving credit facility. The interest rates under the Credit Facility are calculated, at the Company’s option, at the Alternate Base Rate as defined in the Credit Facility, LIBOR or EURIBOR, subject to a minimum of 2.25%, 1.25% and 1.25%, respectively, plus, in each case, a margin. The Credit Facility and Notes contain customary covenants that, subject to certain exceptions, restrict the Company’s ability to enter into certain transactions and engage in certain activities. In addition, the Credit Facility includes specified financial covenants, requiring the Company to maintain certain consolidated leverage and interest coverage ratios and limiting its ability to make capital expenditures in excess of specified amounts. These covenants are included in Note 5 to the

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Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2012. The Company is in compliance with all covenants under the Notes and Credit Facility at March 31, 2013.

To facilitate its restructuring initiatives, on June 28, 2012, the Company entered into an amendment to its Credit Facility. Among other revisions to the Credit Facility, the amendment allows for additional add backs to Adjusted EBITDA annually through 2015 up to the lesser of $15 million or the unused portion of the allowed annual capital expenditure limit; increases the maximum leverage ratios between September of 2012 and December of 2013; amends the definition of the leverage ratio to reduce debt by unrestricted surplus cash held by the Company and increases the interest rate on the term loans by 0.75% annually for eighteen months. The Company paid $1.5 million in deferred financing costs related to the amendment. This amount is classified as an intangible asset in the Consolidated Balance Sheets at March 31, 2013.

As of March 31, 2013, an aggregate of $19.8 million is available for additional borrowings under the Credit Facility. This availability represents the $30.0 million revolving facility less $10.2 million of that facility committed for letters of credit. Additionally, at March 31, 2013, the Company had $5.1 million available for borrowings under other lines of credit.

As of March 31, 2013 and December 31, 2012, the carrying value of the Company’s long-term debt was $434.0 million and $437.1 million, respectively, and its fair value was approximately $424.7 million and $439.1 million, respectively. The Company determined the fair value of its debt utilizing significant other observable inputs (Level 2 of the fair value hierarchy).

4. Income Taxes

The Company utilizes the asset and liability method for accounting for income taxes in accordance with ASC Topic 740, Income Taxes (“Topic 740”). Under Topic 740, deferred tax assets and liabilities are determined based on the difference between their financial reporting and tax basis. The assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company reduces its deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In making this determination, the Company evaluates all available information including the Company’s financial position and results of operations for the current and preceding years, as well as any available projected information for future years.

For the three months ended March 31, 2013, the provision for income taxes was $2,503 as compared to $657 for the three months ended March 31, 2012. The increase in tax expense was primarily attributable to the geographic mix of earnings in the three months ended March 31, 2013 as compared with the three months ended March 31, 2012. The provision for income taxes is primarily impacted by income earned in tax paying jurisdictions relative to income earned in non-tax paying jurisdictions. The majority of income recognized for purposes of computing the effective tax rate is earned in countries where the statutory income tax rates range from 25% to 39%; however, permanent income adjustments recorded against pre-tax earnings may result in an effective tax rate that is higher or lower than the statutory tax rate in these jurisdictions. The Company generates losses in certain jurisdictions for which no tax benefit is received, as the deferred tax assets in these jurisdictions (including the net operating losses) are fully reserved in the valuation allowance. For this reason, the Company recognizes minimal income tax expense or benefit in these jurisdictions, of which the most material jurisdictions are the United States, the United Kingdom and Australia. Due to these reserves, the geographic mix of the Company’s pre-tax earnings has a direct correlation with how high or low its annual effective tax rate is relative to consolidated earnings.

As of March 31, 2013, the Company had a gross amount of unrecognized tax benefit of $2,865, exclusive of interest and penalties. The unrecognized tax benefit decreased by approximately $409 during the three months ended March 31, 2013, as a result of foreign currency effects, statute expirations and ongoing changes in currently reserved positions. The Company’s policy is to recognize interest and penalties related to income tax matters as income tax expense, which were immaterial for the three months ended March 31, 2013 and 2012. The tax years 2000 through 2012 remain open to examination in a number of the major taxing jurisdictions to which the Company and its subsidiaries are subject. The Company believes that it has made adequate provisions for all income tax uncertainties.

In November of 2011, the Federal Revenue Department of the Ministry of Finance of Brazil (“FRD”) issued a tax assessment against the Company’s indirect subsidiary, Xerium Technologies Brasil Indústria e Comércio S.A. (“Xerium Brazil”), challenging the goodwill recorded in the 2005 acquisition of Wangner Itelpa and Huyck Indústria e Comércio S.A. by Robec Brasil Participações Ltda., a predecessor to Xerium Brazil. This assessment denies the amortization of that goodwill against net income for the years 2006 through 2010. As of March 31, 2013, the Company would be required to pay approximately $43.4 million (subject to currency exchange rates) in tax, penalties and interest in the event the Company was unable to overturn this assessment. The Company believes the transactions in question (i) complied with Brazilian tax and accounting rules, (ii) were effected for a legitimate business purpose, to consolidate the Company’s operating activities in Brazil into one legal entity, and (iii) were properly documented and declared to Brazilian tax and corporate authorities. Based

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on the foregoing, Xerium Brazil filed a response disputing the tax assessment. In December of 2012 an administrative panel at the first administrative appeals level within the FRD rendered a decision upholding the assessment, but reducing the penalties claimed by 50%. This decision reduced the total assessment by approximately $11,590 to $31,762. On January 18, 2013, Xerium Brazil appealed the decision of the first administrative panel to the second of three administrative appeals courts potentially available to it within the FRD.

Although there can be no assurances, as of March 31, 2013, the Company believes it is more likely than not that it would prevail on every tax position under examination and therefore it did not accrue any amounts related to this assessment. Because this dispute is at a preliminary stage for resolution, the Company cannot assure a favorable outcome and cannot currently estimate the timing of the final resolution of this matter. The Company believes it has meritorious defenses and will vigorously contest this matter, and if the administrative courts of the FRD do not rule in the Company's favor, the Company intends to appeal its case to the Brazilian judicial courts. However, if management's views of the Company's position and the probable outcome of the assessment changes or the FRD’s initial position is sustained by Brazilian judicial courts, the amount accrued would adversely impact the Company’s financial condition and results of operations in the period in which any such determination or decision is made.

5. Pensions, Other Post-retirement and Post-employment Benefits

The Company accounts for its pensions, other post-retirement and post-employment benefit plans in accordance with ASC Topic 715, Compensation—Retirement Benefits (“Topic 715”). The Company has defined benefit pension plans covering substantially all of its U.S. and Canadian employees and employees of certain subsidiaries in other countries. Benefits are generally based on the employee’s years of service and compensation. These plans are funded in conformity with the funding requirements of applicable government regulations. The Company does not fund certain plans, as funding is not required. The Company plans to continue to fund its U.S. defined benefit plans to comply with the Pension Protection Act of 2006. In addition, the Company also intends to fund its U.K. and Canadian defined benefit plans in accordance with local regulations.

As required by Topic 715, the following tables summarize the components of net periodic benefit cost:

Defined Benefit Plans

	Three Months Ended March 31,
	2013			2012
Service cost	$	973		$	885
Interest cost	1,560			1,830
Expected return on plan assets	(1,412		)	(1,373		)
Amortization of prior service cost	3			3
Amortization of net loss	572			633
Net periodic benefit cost	$	1,696		$	1,978

6. Comprehensive Income (loss) and Accumulated Other Comprehensive Loss

Comprehensive income (loss) for the three months ended March 31, 2013 and 2012 is as follows:

	Three Months Ended March 31,
	2013			2012
Net income (loss)	$	5,485		$	(7,522	)
Foreign currency translation adjustments	(4,392		)	4,626
Pension liability changes under Topic 715	1,602			(488		)
Change in value of derivative instruments	32			(94		)
Comprehensive loss	$	2,727		$	(3,478	)

11

The components of accumulated other comprehensive loss are as follows:

	Foreign Currency Translation     Adjustment			Pension Liability Changes Under  Topic 715			Change in Value of Derivative Instruments			Accumulated    Other Comprehensive (Loss) Income
Balance at December 31, 2012	$	3,253		$	(44,502	)	$	(644	)	$	(41,893	)
Other comprehensive (loss) income before reclassifications	(4,392		)	1,027			—			(3,365		)
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	—			575			—			575
Amortization of interest expense, net of taxes of $0	—			—			32			32
Net current period other comprehensive (loss) income	(4,392		)	1,602			32			(2,758		)
Balance at March 31, 2013	$	(1,139	)	$	(42,900	)	$	(612	)	$	(44,651	)

7. Restructuring and Impairment Expense

During the three months ended March 31, 2013, the Company recorded restructuring expenses of approximately $1,255. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of a roll covering facility in France and the closure of clothing facility in Argentina. During the three months ended March 31, 2012, the Company recorded restructuring expenses of approximately $3,974. These charges were primarily related to $3.6 million of costs to terminate a sales agency arrangement in Europe.

The following table sets forth the significant components and activity under restructuring programs for the three months ended March 31, 2013 and 2012:

	Balance at December 31,  2012		Charges (1)		Currency     Effects			Cash Payments			Balance at     March 31, 2013
Severance	$	15,577	$	775	$	(451	)	$	(4,109	)	$	11,792
Facility costs and other	335		410		(10		)	(570		)	165
Total	$	15,912	$	1,185	$	(461	)	$	(4,679	)	$	11,957

	Balance at December 31,  2011		Charges		Currency     Effects			Cash Payments			Balance at     March 31, 2012
Severance	$	800	$	129	$	13		$	(213	)	$	729
Facility costs and other	452		3,845		(73		)	(84		)	4,140
Total	$	1,252	$	3,974	$	(60	)	$	(297	)	$	4,869

(1) Amount excludes $0.1 impairment charges.

Restructuring and impairment expense by segment, which is not included in Segment Earnings (Loss) in Note 8, is as follows:

12

	Three Months Ended              March 31,
	2013		2012
Clothing	$	409	$	3,759
Roll Covers	727		179
Corporate	119		36
Total	$	1,255	$	3,974

During the three months ended March 31, 2013, we recorded restructuring expenses of approximately $1,255. These included charges relating to the reduction of base costs via headcount reductions, the closure of a roll covering facility in France and the closure of clothing facility in Argentina.

During the three months ended March 31, 2012, we recorded restructuring expenses of approximately $3,974 primarily related to $3.6 million of costs to terminate a sales agency arrangement in Europe.

8. Business Segment Information

The Company is a global manufacturer and supplier of consumable products used primarily in the production of paper and is organized into two reportable segments: Clothing and Roll Covers. The Clothing segment represents the manufacture and sale of synthetic textile belts used to transport paper along the length of papermaking machines. The Roll Covers segment primarily represents the manufacture and refurbishment of covers used on the steel rolls of papermaking machines. The Company manages each of these operating segments separately.

Management evaluates segment performance based on earnings before interest, taxes, depreciation and amortization and before allocation of corporate charges. Such measure is then adjusted to exclude items that are of an unusual nature and are not used in measuring segment performance or are not segment specific (“Segment Earnings (Loss)”). The accounting policies of these segments are the same as those for the Company as a whole. Inter-segment net sales and inter-segment eliminations are not material for any of the periods presented.

Summarized financial information for the Company’s reportable segments is presented in the tables that follow for the three months ended March 31, 2013 and 2012.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended March 31, 2013:
Net Sales	$	89,937	$	49,868	$	—		$	139,805
Segment Earnings (Loss)	18,062		14,070		(2,989		)
Three Months Ended March 31, 2012:
Net Sales	$	88,683	$	45,681	$	—		$	134,364
Segment Earnings (Loss)	14,761		7,890		(3,831		)

Provided below is a reconciliation of Segment earnings income (loss) to income (loss) before provision for income taxes for the three months ended March 31, 2013 and 2012, respectively.

13

	Three Months Ended March 31,
	2013			2012
Segment Earnings (Loss):
Clothing	$	18,062		$	14,761
Roll Covers	14,070			7,890
Corporate	(2,989		)	(3,831		)
Stock-based compensation	(295		)	(972		)
Idle facility asset impairment	(857		)	—
Non-recurring expenses related to CEO retirement	—			(801		)
Interest expense, net	(9,206		)	(9,598		)
Depreciation and amortization	(9,542		)	(10,340		)
Restructuring expense	(1,255		)	(3,974		)
Income (loss) before provision for income taxes	$	7,988		$	(6,865	)

9. Commitments and Contingencies

The Company is involved in various legal matters which have arisen in the ordinary course of business as a result of various immaterial labor claims, taxing authority reviews and other routine legal matters. As of March 31, 2013, the Company

accrued an immaterial amount in its financial statements for these matters for which the Company believed the possibility of loss was probable and was able to estimate the damages. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flow. The Company believes that any additional liability in excess of amounts provided which may result from the resolution of legal matters will not have a material adverse effect on the financial condition, liquidity or cash flow of the Company.

See Note 4 for a discussion of Xerium Brazil’s proceeding with the FRD.

10. Stock-Based Compensation and Stockholders’ Deficit

The Company records stock-based compensation expense in accordance with ASC Topic 718, Accounting for Stock Compensation and has used the straight-line attribution method to recognize expense for time-based restricted stock units ("RSUs") and deferred stock units ("DSUs"). The Company recorded stock-based compensation expense during the three months ended March 31, 2013 and March 31, 2012 as follows:

	Three Months Ended March 31,
	2013		2012
RSU and DSU Awards (1)	$	295	$	409
Management Incentive/Performance Award Programs (2)	—		563
Total	$	295	$	972

(1) Related to RSUs and DSUs awarded to certain employees and non-employee directors.

(2) In 2012, the amount represents the value of stock awards granted under the 2012 Management Incentive Compensation Program. Subsequent to March 31, 2012, management determined that the minimum Adjusted EBITDA target level was not met, and reversed the compensation expense recorded for the three months ended March 31, 2012. In March of 2013, the Compensation Committee approved the 2013 Management Incentive Compensation Award Program. This award will be paying out entirely in cash, and therefore, the expense is no longer considered stock compensation.

Summary of Activity under the Long-Term Incentive Plans

On September 22, 2010, the Board approved the Company’s 2010 Long-Term Incentive Plan (the “2010 LTIP”) under the 2010 Equity Incentive Plan (the “2010 Plan”). Awards under the 2010 LTIP are both time-based and performance-based. Awards will be paid in the form of RSUs or shares of common stock of the Company. Time-based awards under the 2010 LTIP were approved in the form of 131,010 time-based RSUs granted on October 29, 2010 under the Company’s 2010 Plan. As of March 31, 2013, all of the time-based RSUs had vested in accordance with the 2010 LTIP and were converted to common stock. These were converted into shares of common stock when they vested. Performance-based awards under the 2010 LTIP in the amount of 20,709 vested on December 31, 2012, upon meeting various criteria, as included in the Company’s 2012 Annual Report on Form 10-K, and were converted into common stock, net of applicable tax withholdings.

On May 8, 2012, the Board approved the 2012 Executive Long-Term Incentive Plan (the “2012 Executive LTIP”) under the 2010 Plan. Awards under the 2012 Executive LTIP are both time-based and performance-based. A specific target share award is set for each participant in the 2012 Executive LTIP. Awards will be paid in the form of RSUs or shares of common stock of the Company. Time-based awards, or 50% of the total target award, were granted in the form of 54,750 time-based RSUs under the Company’s 2010 Plan. As of March 31, 2013, 16,582 time-based RSUs vested in accordance with the 2012 Executive LTIP and were converted to common stock, net of applicable tax withholdings. The remaining time-based RSUs will vest in equal installments on March 31, 2014, and March 31, 2015. These will be converted into shares of common stock as they vest. Performance-based awards, which constitute 50% of the total award, will be determined based on the Company’s performance against a three-year cumulative Adjusted EBITDA metric, adjusted for currency fluctuations during the term of

14

the 2012 – 2014 Executive LTIP. The performance-based awards will convert into shares of the Company’s common stock and be paid after the close of the three-year performance period. The amount of the payment will be based on a sliding scale ranging from 50% if the metric is achieved at 85% of the target up to 200% if the metric is achieved at or above 115% of the target.

Other Stock Compensation Plans

On August 15, 2012, in connection with the previously announced anticipated retirement of Stephen R. Light, the Board of Directors of the Company appointed Harold C. Bevis to the position of President and Chief Executive Officer, effective immediately, and Mr. Light notified the Company of his resignation, effective as of that date, as the Company's Chairman, President and Chief Executive Officer. The Company granted Mr. Bevis a sign-on award of 204,208 restricted stock units and options to acquire 781,701 shares of the Company's Common Stock, par value $0.001 per share. Both the restricted stock units and the options will vest over a three year period, beginning on the second anniversary of the August 15, 2012 grant date. The options will have a 10-year term and an exercise price of $4.00 per share, the August 15, 2012 closing price of the Company's common stock on the New York Stock Exchange. In addition, on August 15, 2012, the Company accelerated the vesting of Mr. Light's remaining 50,000 restricted stock units, issuing 27,900 shares of common stock, upon vesting, net of certain tax withholdings.

Directors’ Deferred Stock Unit Plan

On March 15, 2011, the Board approved a new compensation plan for non-management directors (the “2011 DSU Plan”). Under this plan, each director is to receive an annual retainer of $112, to be paid on a quarterly basis in arrears beginning with the quarter ended June 30, 2011. Half of the annual retainer is payable in deferred stock units (“DSUs”), with the remaining half payable in cash. The non-management directors were awarded an aggregate of 15,444 DSUs under the 2011 DSU Plan for service during the quarter ended March 31, 2013. In addition, in accordance with the 2011 DSU Plan, 10,296 DSUs were settled in Common Stock during the quarter ended March 31, 2013.

11. Supplemental Guarantor Financial Information

On May 26, 2011, the Company closed on the sale of its Notes. The Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed on a senior unsecured basis by all of the domestic wholly owned subsidiaries of the Company (the “Guarantors”). In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act of 1933, the following condensed consolidating financial statements present the financial position, results of operations and cash flows of Xerium Technologies, Inc. (referred to as “Parent” for the purpose of this note only) on a stand-alone parent-only basis, the Guarantors on a Guarantors-only basis, the combined non-Guarantor subsidiaries and elimination entries necessary to arrive at the information for the Parent, the Guarantors and non-Guarantor subsidiaries on a consolidated basis.

15

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	8,900		$	(11	)	$	31,874		$	—		$	40,763
Accounts receivable, net	—			24,612			67,748			—			92,360
Intercompany receivables	(103,260		)	109,444			(6,184		)	—			—
Inventories, net	—			15,144			60,971			(850		)	75,265
Prepaid expenses	156			2,332			6,372			—			8,860
Other current assets	1,975			3,004			10,577			—			15,556
Total current assets	(92,229		)	154,525			171,358			(850		)	232,804
Property and equipment, net	2,166			61,592			236,095			—			299,853
Investments	610,592			142,819			—			(753,411		)	—
Goodwill	—			17,737			41,084			—			58,821
Intangible assets	9,518			4,223			3,566			—			17,307
Other assets	41			—			8,054			—			8,095
Total assets	$	530,088		$	380,896		$	460,157		$	(754,261	)	$	616,880
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	712		$	8,845		$	25,864		$	—		$	35,421
Accrued expenses	10,952			6,840			45,995			—			63,787
Current notes payable	—			—			7,705						7,705
Current maturities of long-term debt	1,250			—			1,250			—			2,500
Total current liabilities	12,914			15,685			80,814			—			109,413
Long-term debt, net of current maturities	339,404			—			92,085			—			431,489
Deferred and long-term taxes	—			2,335			13,316			—			15,651
Pension, other post-retirement and post-employment obligations	21,116			1,068			58,919			—			81,103
Other long-term liabilities	51			—			5,211			—			5,262
Intercompany loans	237,552			(361,232		)	123,680			—			—
Total stockholders’ (deficit) equity	(80,949		)	723,040			86,132			(754,261		)	(26,038		)
Total liabilities and stockholders’ equity	$	530,088		$	380,896		$	460,157		$	(754,261	)	$	616,880

16

Xerium Technologies, Inc.

Consolidating Balance Sheet

At December 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	6,471		$	36		$	28,270		$	—		$	34,777
Accounts receivable, net	—			20,964			63,492			—			84,456
Intercompany receivables	(102,407		)	107,944			(5,537		)	—			—
Inventories, net	—			15,672			62,569			(850		)	77,391
Prepaid expenses	159			1,693			7,534			—			9,386
Other current assets	—			2,970			11,869			—			14,839
Total current assets	(95,777		)	149,279			168,197			(850		)	220,849
Property and equipment, net	734			62,157			245,915			—			308,806
Investments	596,891			149,134			—			(746,025		)	—
Goodwill	—			17,737			43,390			—			61,127
Intangible assets	10,034			4,776			3,868			—			18,678
Other assets	44			—			9,339			—			9,383
Total assets	$	511,926		$	383,083		$	470,709		$	(746,875	)	$	618,843
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	502		$	8,629		$	27,753		$	—		$	36,884
Accrued expenses	6,005			6,579			47,173			—			59,757
Current notes payable	—			—			7,911			—			7,911
Current maturities of long-term debt	1,250			—			1,147			—			2,397
Total current liabilities	7,757			15,208			83,984			—			106,949
Long-term debt, net of current maturities	339,717			—			94,967			—			434,684
Deferred and long-term taxes	—			2,335			14,247			—			16,582
Pension, other post-retirement and post-employment obligations	21,677			1,000			61,272			—			83,949
Other long-term liabilities	31			—			5,709			—			5,740
Intercompany loans	229,239			(358,187		)	128,948			—			—
Total stockholders’ (deficit) equity	(86,495		)	722,727			81,582			(746,875		)	(29,061		)
Total liabilities and stockholders’ equity	$	511,926		$	383,083		$	470,709		$	(746,875	)	$	618,843

17

Xerium Technologies, Inc.

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)-(Unaudited)

For the three months ended March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	46,115		$	105,399		$	(11,709	)	$	139,805
Costs and expenses:
Cost of products sold	(450		)	30,863			66,594			(11,709		)	85,298
Selling	—			5,218			13,303			—			18,521
General and administrative	1,982			807			11,845			—			14,634
Research and development	—			2,012			642			—			2,654
Restructuring and impairment	119			238			898			—			1,255
	1,651			39,138			93,282			(11,709		)	122,362
(Loss) income from operations	(1,651		)	6,977			12,117			—			17,443
Interest (expense) income, net	(6,704		)	1,406			(3,908		)	—			(9,206		)
Foreign exchange gain (loss)	183			(13		)	(419		)	—			(249		)
Equity in subsidiaries income	13,704			4,754			—			(18,458		)	—
Dividend income	—			1,555			—			(1,555		)	—
Income (loss) before provision for income taxes	5,532			14,679			7,790			(20,013		)	7,988
Provision for income taxes	(47		)	106			(2,562		)	—			(2,503		)
Net income (loss)	$	5,485		$	14,785		$	5,228		$	(20,013	)	$	5,485
Comprehensive income (loss)	$	5,254		$	14,562		$	2,924		$	(20,013	)	$	2,727

Xerium Technologies, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income-(Unaudited)

For the three months ended March 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	44,063		$	102,676		$	(12,375	)	$	134,364
Costs and expenses:
Cost of products sold	(472		)	33,415			67,499			(12,521		)	87,921
Selling	—			5,723			13,765			—			19,488
General and administrative	4,113			1,638			12,074			—			17,825
Research and development	—			2,070			892			—			2,962
Restructuring and impairment	36			140			3,798			—			3,974
	3,677			42,986			98,028			(12,521		)	132,170
(Loss) income from operations	(3,677		)	1,077			4,648			146			2,194
Interest (expense) income, net	(7,355		)	1,779			(4,022		)	—			(9,598		)
Foreign exchange (loss) gain	(154		)	(6		)	699			—			539
Equity in subsidiaries income	3,693			(690		)	—			(3,003		)	—
(Loss) income before provision for income taxes	(7,493		)	2,160			1,325			(2,857		)	(6,865		)
Provision for income taxes	(29		)	(40		)	(588		)	—			(657		)
Net (loss) income	$	(7,522	)	$	2,120		$	737		$	(2,857	)	$	(7,522	)
Comprehensive (loss) income	$	(8,168	)	$	2,563		$	4,984		$	(2,857	)	$	(3,478	)

18

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net income (loss)	$	5,485		$	14,785		$	5,228		$	(20,013	)	$	5,485
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	295			—			—			—			295
Depreciation	33			1,903			7,030			—			8,966
Amortization of intangibles	—			553			23			—			576
Deferred financing cost amortization	516			—			193			—			709
Foreign exchange gain on revaluation of debt	—			—			(118		)	—			(118		)
Deferred taxes	—			—			282			—			282
Asset impairment	208			—			720						928
Loss (gain) on disposition of property and equipment	1			3			(14		)	—			(10		)
Provision for doubtful accounts	—			(53		)	88			—			35
Undistributed equity in (earnings) loss of subsidiaries	(13,704		)	(4,754		)	—			18,458			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	—			(3,595		)	(5,632		)	—			(9,227		)
Inventories	—			529			399			—			928
Prepaid expenses	3			(639		)	1,088			—			452
Other current assets	(2,182		)	(35		)	254			—			(1,963		)
Accounts payable and accrued expenses	5,158			(234		)	(3,533		)	1,555			2,946
Deferred and other long-term liabilities	42			68			(111		)	—			(1		)
Intercompany loans	854			(1,496		)	642			—			—
Net cash (used in) provided by operating activities	(3,291		)	7,035			6,539			—			10,283
Investing activities
Capital expenditures, gross	(1,466		)	(632		)	(1,615		)	—			(3,713		)
Proceeds from disposals of property and equipment	—			—			317			—			317
Net cash (used in) provided by investing activities	(1,466		)	(632		)	(1,298		)	—			(3,396		)
Financing activities
Principal payments on debt	(313		)	—			(290		)	—			(603		)
Intercompany loans	7,499			(6,449		)	(1,050		)	—			—
Net cash provided by (used in) financing activities	7,186			(6,449		)	(1,340		)	—			(603		)
Effect of exchange rate changes on cash flows	—			(1		)	(297		)	—			(298		)
Net increase (decrease) in cash	2,429			(47		)	3,604			—			5,986
Cash and cash equivalents at beginning of period	6,471			36			28,270			—			34,777
Cash and cash equivalents at end of period	$	8,900		$	(11	)	$	31,874		$	—		$	40,763

19

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
Operating activities
Net (loss) income	$	(7,522	)	$	2,120		$	737		$	(2,857	)	$	(7,522	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation	972			—			—			—			972
Depreciation	55			1,968			7,741			—			9,764
Amortization of intangibles	—			553			23			—			576
Deferred financing cost amortization	696			—			358			—			1,054
Foreign exchange loss on revaluation of debt	—			—			8			—			8
Deferred taxes	—			—			(182		)	—			(182		)
Gain on disposition of property and equipment	—			(4		)	(442		)	—			(446		)
Provision for doubtful accounts	—			(76		)	217			—			141
Undistributed equity in (earnings) loss of subsidiaries	(3,693		)	690			—			3,003			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(1		)	428			2,620			—			3,047
Inventories	—			368			(2,586		)	(146		)	(2,364		)
Prepaid expenses	58			(283		)	234			—			9
Other current assets	—			1,079			(250		)	—			829
Accounts payable and accrued expenses	5,476			(1,305		)	270			—			4,441
Deferred and other long-term liabilities	73			100			(348		)	—			(175		)
Intercompany loans	(969		)	593			376			—			—
Net cash (used in) provided by operating activities	(4,855		)	6,231			8,776			—			10,152
Investing activities
Capital expenditures, gross	—			(563		)	(2,688		)	—			(3,251		)
Intercompany property and equipment transfers, net	343			(339		)	(4		)	—			—
Proceeds from disposals of property and equipment	—			4			699			—			703
Net cash provided by (used in) investing activities	343			(898		)	(1,993		)	—			(2,548		)
Financing activities
Principal payments on debt	(6,541		)	—			(6,638		)	—			(13,179		)
Payment of deferred financing fees	(61		)	—			—			—			(61		)
Intercompany loans	7,376			(5,578		)	(1,798		)	—			—
Net cash provided by (used in) financing activities	774			(5,578		)	(8,436		)	—			(13,240		)
Effect of exchange rate changes on cash flows	—			5			375			—			380
Net (decrease) increase in cash	(3,738		)	(240		)	(1,278		)	—			(5,256		)
Cash and cash equivalents at beginning of period	11,548			280			31,738			—			43,566
Cash and cash equivalents at end of period	$	7,810		$	40		$	30,460		$	—		$	38,310

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to the safe harbor created by that Act. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Undue reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements. Factors that could materially affect our actual results, levels of activity, performance or achievements include the following items:

• we are subject to the risk of a weaker global economy that influences the paper industry as well as local economic conditions in the areas around the world where we conduct business;

• structural shifts in the demand for paper, for instance the shift away from newsprint, printing and writing paper in favor of digital media, may adversely impact our financial results;

• our strategy to lower our costs in response to market changes in the paper industry by reorganizing and restructuring our operations will require us to incur significant costs and may not provide the savings and results we anticipate;

• our strategies and plans, including, but not limited to, those relating to developing and successfully marketing new products, enhancing our operational efficiencies and reducing costs, may not result in the anticipated benefits;

• our financial results could be adversely affected by fluctuations in interest rates and currency exchange rates;

• our manufacturing facilities may be required to quickly increase or decrease production capacity, which could negatively affect our production, customer order lead time, product quality, labor relations or gross margin;

• we may not be successful in developing and marketing new technologies or in competing against new technologies developed by competitors;

• variations in demand for our products, including our new products, could negatively affect our net sales and profitability;

• we are subject to fluctuations in the price of our component supply costs;

• due to our high degree of leverage and significant debt service obligations, we need to generate substantial operating cash flow to fund growth and unexpected cash needs;

• our credit facility contains restrictive covenants, such as the covenants requiring compliance with minimum interest coverage and maximum leverage ratios, which become more restrictive over time, that may require us to increasingly improve our performance over time to remain compliant;

• we are subject to the risk of terrorist attacks or an outbreak or escalation of any insurrection or armed conflict involving the United States or any other country in which we conduct business, or any other domestic or international calamity, including natural disasters;

• we are subject to the impact of changes in the policies, laws, regulations and practices of the United States and any foreign country in which we operate or conduct business, including changes regarding taxes and the repatriation of earnings; and

• anti-takeover provisions could make it more difficult for a third-party to acquire us.

Other factors that could materially affect our actual results, levels of activity, performance or achievements can be found in our “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 11, 2013 and this Quarterly Report on Form 10-Q. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we project. Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law.

All references in this Quarterly Report to “Xerium”, “the Company”, “we”, “our” and “us” means Xerium Technologies, Inc. and its subsidiaries.

Company Overview

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We are a leading global manufacturer and supplier of two types of consumable products used primarily in the production of paper—clothing and roll covers. Our operations are strategically located in the major paper-producing regions of North America, Europe, South America and Asia-Pacific.

Our products play key roles in the formation and processing of paper along the length of a paper-making machine. Paper producers rely on our products and services to help improve the quality of their paper, differentiate their paper products, operate their paper-making machines more efficiently and reduce production costs. Our products and services typically represent only a small percentage of a paper producer’s overall production costs, yet they can reduce costs by permitting the use of lower-cost raw materials and by reducing energy consumption. Paper producers must replace clothing and refurbish or replace roll covers periodically as these products wear down during the paper production process. Our products are designed to withstand high temperatures, chemicals, and high pressure conditions, and are the result of a substantial investment in research and development and highly sophisticated manufacturing processes.

We operate in two principal business segments: clothing and roll covers. In our clothing segment, we manufacture and sell highly engineered synthetic textile belts that transport paper as it is processed in a paper-making machine. Clothing plays a significant role in the forming, pressing and drying stages of paper production. Because paper-making processes and machine specifications vary widely, the clothing size, form, material and function is custom engineered to fit each individual paper-making machine and process. For the three months ended March 31, 2013, our clothing segment represented 64% of our net sales.

Our roll cover products provide a surface with the mechanical properties necessary to process the paper sheet in a cost-effective manner that delivers the sheet qualities desired by the paper producer. Roll covers are tailored to individual paper-making machines and processes, using different materials, treatments and finishings. In addition to manufacturing and selling new roll covers, we also provide refurbishment services for previously installed roll covers and we manufacture new and rebuilt spreader rolls. We also provide various related products and services to our customers, both directly and through third party providers, as a growing part of our overall product offering through our roll covers sales channels. For the three months ended March 31, 2013, our roll cover segment represented 36% of our net sales.

Industry Trends and Outlook

Historically, demand for our products has been driven primarily by the volume (tonnage) of paper produced on a worldwide basis, which in turn is affected by global economic conditions. Since 2000, paper producers have taken actions that seek to structurally improve the balance between the supply of, and demand for, paper in response to the industry's highly cyclical swings in profitability driven by the oversupply of paper during periods when paper producers have more aggregate capacity than the market requires. As part of these efforts, they have permanently shut down many paper-making machines or entire manufacturing facilities.

Between the second half of 2008 and 2009, the global paper industry experienced a sharp reduction in production levels, caused by the general slowdown in economic activity and related paper consumption during the same period. One of the results of this recession driven reduction in demand for paper products was that the paper manufacturers dramatically and quickly reduced production through accelerated curtailments of machines and complete mill shutdowns that were already an underlying trend. These additional curtailments, which began in late 2008, served to reduce inventories and attempt to match output with demand. By early 2010, most mills and equipment not permanently shuttered had resumed production.

Beginning about the same time the paper industry began to address the structural balance between the supply and demand for paper, the widespread adoption of e-commerce and digitalization of traditionally printed material has resulted in a prolonged decline in newsprint and printing and writing grades of paper. This longer term decline has been partially offset by increases in the production of packaging grades, both as a consequence of globalization of manufacturing and as a result of the increase of tissue/personal care products which have increased as global GDP has risen, particularly in the developing world. In 2010 and 2011, global paper and board production began to recover from the economic recession and show growth, particularly in developing countries. As international shipments of manufactured goods increased, containerboard production recovered particularly strongly, contributing over 50% of the total global improvement. The paper and board production recovery, however, stalled in the second half of 2011 and remained weak throughout 2012, particularly in Europe and South America.

In the near term, we expect that global paper and board manufacturers' operating rates will remain near their 2012 levels, while industry forecasters predict the growth of global paper production from 2013 to 2015 to be between approximately 2% and 4% per annum. Generally, and over time, we expect growth in paper production to be greater in Asia-Pacific, South America and Eastern Europe than in the more mature North American and Western European regions, where demand may decline.

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Despite projected growth, many paper producers continue to experience low levels of profitability. Any anticipated global paper production growth would be moderated by further consolidation among papermakers, reduction in the number of paper producers, and shutdowns of paper-making machines or facilities, which we believe will continue, particularly in Europe and North America, until there is a better balance between supply and demand for paper and the profit levels of paper producers improve.

Also affecting machine curtailments are structural productivity gains from new paper machine designs that have fewer rolls and from improved products that we and our competitors supply, which enable paper producers to manufacture more paper with fewer machines. In particular, market recognition of the extended life of our roll cover products has, and will likely continue to, negatively impact demand for these products and their volume potential. Additionally, we are seeing a trend that paper producers are placing an increasing emphasis on maintenance cost reduction and, as a result, are extending the life of roll covers through additional maintenance cycles before replacing them. However, we believe volume declines would be at least partially offset by our introduction of new products with the extended life qualities that our customer's desire and increasing market share of proprietary products such as our SmartRoll™.

In response to this, we expect to continue to focus our research and development efforts on new products that deliver increased value to our customers and for which they will pay increased prices. In addition, we intend to continue to enhance and deploy our value added selling approach as part of our strategy to differentiate our products, while at the same time we remain focused on cost reduction and efficiency programs.

The negative paper industry trends described above are likely to continue. We believe that the paper industry will continue to experience an increased emphasis on cost reduction and continued paper-machine shutdown activity. These underlying industry dynamics could negatively impact our business, results of operations and financial condition and are the key drivers behind our strategy to reduce our cost structure, align our geographic footprint with anticipated growth in the South America and Asia-Pacific regions and grow our non-paper business revenue streams.

Net Sales and Expenses

Net sales in both our clothing and roll covers segments are primarily driven by the following factors:

Ÿ The volume (tonnage) of worldwide paper production;

Ÿ Our ability to introduce new products that our customers value and will pay for;

Ÿ Advances in the technology of our products, which can provide value to our customers by improving the efficiency of paper-making machines and reduce their manufacturing costs;

Ÿ Growth in developing markets, particularly in Asia;

Ÿ The mix of paper grades being produced;

Ÿ Our ability to enter and expand our business in non-paper products; and

Ÿ The impact of currency fluctuations.

Net sales in our roll covers segment include our mechanical services business. We have expanded this business in response to demand from paper producers that we perform work on the internal mechanisms of their rolls while we refurbish or replace a roll cover. In our clothing segment, a small portion of our business has been conducted pursuant to consignment arrangements; for these, we do not recognize a sale of a product to a customer until the customer places the product into use, which typically occurs some period after the product is shipped to the customer or to a warehouse location near the customer’s facility. As part of the consignment agreement, we deliver the goods to a location designated by the customer. In addition, we

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agree to a “sunset” date with the customer, which represents the date by which the customer must accept all risks and responsibilities of ownership of the product and payment terms begin. For consignment sales, revenue is recognized on the earlier of the actual product installation date or the “sunset” date.

Our operating cost levels are impacted by total sales volume, raw material costs, the impact of inflation, foreign currency fluctuations and the success of our cost reduction programs.

The level of our cost of products sold is primarily attributable to labor costs, raw material costs, product shipping costs, plant utilization and depreciation, with labor costs constituting the largest component. We invest in facilities and equipment that enable innovative product development and improve production efficiency and costs. Recent examples of capital spending for such purposes include faster weaving looms and seaming machines with accurate electronic controls, automated compound mixing equipment and computer-controlled lathes and mills.

The level of research and development spending is driven by market demand for technology enhancements, including both specific customer needs and general market requirements, as well as by our own analysis of applied technology opportunities. With the exception of purchases of equipment and similar capital items used in our research and development activities, all research and development is expensed as incurred. Research and development expenses were $2.7 million and $3.0 million for the three months ended March 31, 2013 and 2012, respectively.

Foreign Exchange

We have a geographically diverse customer base. In the three months ended March 31, 2013, we generated approximately 38% of our net sales in North America, 32% in Europe, 8% in South America, 20% in Asia-Pacific and 2% in the rest of the world.

A substantial portion of our net sales is denominated in Euros or other currencies. As a result, changes in the relative values of U.S. Dollars, Euros and other currencies affect our reported levels of net sales and profitability as the results are translated into U.S. Dollars for reporting purposes. In particular, decreases in the value of the U.S. Dollar relative to the value of the Euro and these other currencies positively impact our levels of revenue and profitability because the translation of a certain number of Euros or units of such other currencies into U.S. Dollars for financial reporting purposes will represent more U.S. Dollars than it would have prior to the relative decrease in the value of the U.S. Dollar. Conversely, a decline in the value of the Euro will result in a lower number of U.S. Dollars for financial reporting purposes.

For certain transactions, our net sales are denominated in U.S. Dollars but all or a substantial portion of the associated costs are denominated in a different currency. As a result, changes in the relative values of U.S. Dollars, Euros and other currencies can affect the level of the profitability of these transactions. The largest proportion of such transactions consists of transactions in which the net sales are denominated in or indexed to the U.S. Dollar and all or a substantial portion of the associated costs are denominated in Brazilian Reals or other currencies.

Currency fluctuations have a greater effect on the level of our net sales than on the level of our income (loss) from operations. For example, in the three months ended March 31, 2013 as compared to the three months ended March 31, 2012, the change in the value of the U.S. Dollar against most of the currencies we conduct our business in resulted in net currency decreases in net sales of $1.0 million, yet income from operations currency effects increased by $0.9 million.

During the three months ended March 31, 2013, we conducted business in nine foreign currencies. The following table provides the average exchange rate for the three months ended March 31, 2013 and the three months ended March 31, 2012 of the U.S. Dollar against each of the four foreign currencies in which we conduct the largest portion of our operations.

Currency	Average exchange rate of the U.S. Dollar in the three months ended March 31, 2013	Average exchange rate of the U.S. Dollar in the three months ended March 31, 2012
Euro	$1.32 = 1 Euro	$1.31 = 1 Euro
Brazilian Real	$0.50 = 1 Brazilian Real	$0.57 = 1 Brazilian Real
Canadian Dollar	$0.99 = 1 Canadian Dollar	$1.01 = 1 Canadian Dollar
Australian Dollar	$1.04 = 1 Australian Dollar	$1.06 = 1 Australian Dollar

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In the three months ended March 31, 2013, we conducted approximately 36% of our operations in Euros, approximately 12% in the Australian Dollar, approximately 7% in the Brazilian Real (although a significant portion of Brazil net sales are in U.S. Dollars) and approximately 6% in the Canadian Dollar.

To mitigate the risk of transactions in which a sale is made in one currency and associated costs are denominated in a different currency, we may utilize forward currency contracts in certain circumstances to lock in exchange rates with the objective that the gain or loss on the forward contracts will approximate the loss or gain that results from the transaction or transactions being hedged. We determine whether to enter into hedging arrangements based upon the size of the underlying transaction or transactions, an assessment of the risk of adverse movements in the applicable currencies and the availability of a cost effective hedge strategy. To the extent we do not engage in hedging or such hedging is not effective, changes in the relative value of currencies can affect our profitability.

Domestic and Foreign Operating Results:

The following is an analysis of our domestic and foreign operations during the three months ended March 31, 2013 and March 31, 2012 and a discussion of the results of operations during those periods (in thousands):

	Three Months Ended March 31,
	2013		2012
Domestic income from operations	$	5,326	$	(2,599	)
Foreign income from operations	12,117		4,793
Total income from operations	$	17,443	$	2,194

During the three months ended March 31, 2013, domestic income from operations was lower than foreign income from operations primarily due to product mix and market differences. Excess cash generated from operations will typically remain permanently reinvested in most foreign subsidiaries. If cash does not remain permanently reinvested, income tax would need to be recorded. However, there are no legal restrictions or material adverse consequence for repatriating the excess cash to the domestic subsidiaries to assist in debt repayment, capital expenditures and other expenses of our operations.

Cost Reduction Programs

An important part of our strategy is to seek to reduce our overall costs and improve our competitiveness. As a part of this effort, we engage in cost reduction programs, which are designed to improve the cost structure of our global operations in response to changing market conditions. These cost reduction programs include headcount reductions throughout the world as well as plant closures that are intended to rationalize production among our facilities to better enable us to match our cost structure with customer demand. Cost savings have been realized and are expected to be realized in labor costs and other production overhead, other components of costs of products sold, general and administrative expenses and facility costs. The majority of cost savings begin at the time of the headcount reductions and plant closure with remaining cost savings recognized over subsequent periods. Cost savings from headcount reductions have not been and are not expected to be offset by related increases in other expenses. Cost savings related to plant closures have been and are expected to be partially offset by additional costs incurred in the facilities that assumed the operations of the closed facility.

During the three months ended March 31, 2013, we recorded restructuring expenses of approximately $1.3 million. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of a roll covering facility in France and the closure of clothing facility in Argentina. During the three months ended March 31, 2012, we recorded restructuring expenses of approximately $4.0, primarily related to $3.6 million of costs to terminate a sales agency arrangement in Europe.

Results of Operations

The table that follows sets forth for the periods presented certain consolidated operating results.

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	Three Months Ended March 31,
	2013			2012
	(in thousands)
Net Sales	$	139,805		$	134,364
Costs and expenses:
Cost of products sold	85,298			87,921
Selling	18,521			19,488
General and administrative	14,634			17,825
Research and development	2,654			2,962
Restructuring	1,255			3,974
	122,362			132,170
Income from operations	17,443			2,194
Interest expense, net	(9,206		)	(9,598		)
Foreign exchange (loss) gain	(249		)	539
Income (loss) before provision for income taxes	$	7,988		$	(6,865	)
Provision for income taxes	$	(2,503	)	$	(657	)
Net income (loss)	$	5,485		$	(7,522	)
Comprehensive income (loss)	$	2,727		$	(3,478	)

Three Months Ended March 31, 2013 Compared to the Three Months Ended March 31, 2012

Net Sales. Net sales for the three months ended March 31, 2013 increased by $5.4 million, or 4.0%, to $139.8 million from $134.4 million for the three months ended March 31, 2012. For the three months ended March 31, 2013, approximately 64% of our net sales were in our clothing segment and approximately 36% were in our roll covers segment.

In our clothing segment, net sales for the three months ended March 31, 2013 increased by $1.2 million, or 1.4%, to $89.9 million from $88.7 million for the three months ended March 31, 2012, primarily due to increased sales volume of $3.1 million in Asia Pacific and $0.3 million in Europe, partially offset by unfavorable currency effects of $(0.9) million and a decrease in sales volume of $1.1 million in South America.

In our roll covers segment, net sales for the three months ended March 31, 2013 increased by $4.2 million or 9.2%, to $49.9 million from $45.7 million for the three months ended March 31, 2012. The increase was primarily due to increased sales volume of $2.5 million in North America, $0.9 million in Europe and $0.8 million in Asia Pacific.

Cost of Products Sold. Cost of products sold for the three months ended March 31, 2013 decreased by $2.6 million, or 3.0%, to $85.3 million from $87.9 million for the three months ended March 31, 2012.

In our clothing segment, cost of products sold decreased $0.9 million in the current quarter compared to the first quarter of 2012 as a result of lower cost of products sold as a percentage of sales. Cost of products sold, as a percentage of net sales decreased by 1.9% to 62.1% in the three months ended March 31, 2013 from 64.0% in the three months ended March 31, 2012. This decrease was primarily due to reduced costs as a result of restructuring savings and operational efficiencies and favorable currency effects.

In our roll covers segment, cost of products sold decreased $1.8 million in the current quarter compared to the first quarter of 2012 as a result of lower cost of products sold as a percentage of sales. Cost of products sold, as a percentage of net sales decreased by 9.3% to 60.0% in the three months ended March 31, 2013 from 69.3% in the three months ended March 31, 2012. This decrease was due to restructuring savings and operational efficiencies and favorable product mix.

Selling Expenses. For the three months ended March 31, 2013, selling expenses decreased by $1.0 million, or 5.1% to $18.5 million from $19.5 million for the three months ended March 31, 2012 primarily due to a decrease of $0.5 million in salaries and benefits, a $0.4 million decrease due to reduced agency sales commissions as a result of actions taken in 2012 and favorable currency effects of $0.3.

General and Administrative Expenses. For the three months ended March 31, 2013, general and administrative expenses decreased by $3.2 million, or 18.0% to $14.6 million from $17.8 million for the three months ended March 31, 2012. This decrease is largely comprised of $1.2 million resulting from our cost reduction activities, a decrease of $0.8 million due to

26

charges recorded in 2012 related to CEO transition costs, a gain of $0.7 million related to insurance recovery from a plant fire and favorable currency effects of $0.3 million.

Restructuring Expenses. For the three months ended March 31, 2013, we incurred restructuring expenses of $1.3 million primarily related a reduction in headcount, the voluntary redundancy program in Argentina and the closure of a rolls cover facility in France. In 2012, we incurred restructuring expenses of $4.0 million primarily related to contract termination costs to exit a sales agency agreement in Europe. See Note 7 to the Consolidated Financial Statements for further discussion on these restructuring activities.

Interest Expense, Net. Net interest expense for the three months ended March 31, 2013 decreased by $0.4 million or 4.2%, to $9.2 million from $9.6 million for the three months ended March 31, 2012. The decline in interest expense reflects lower debt balances and favorable currency effects, offset by an increase in interest rates of approximately 75 basis points as a result of the amendment to the credit facility.

Provision for Income Taxes. For the three months ended March 31, 2013 and March 31, 2012, the provision for income taxes was $2.5 million and $0.7 million, respectively. The increase in income tax expense was primarily attributable to increased earnings and the geographic mix of earnings in the first quarter of 2013 as compared to the first quarter of 2012. Our provision for income taxes is primarily impacted by income we earn in tax paying jurisdictions relative to income we earn in non-tax paying jurisdictions. The majority of income recognized for purposes of computing our effective tax rate is earned in countries where the statutory income tax rates range from 25% to 39%. However, permanent income adjustments recorded against pre-tax earnings may result in an effective tax rate that is higher or lower than the statutory tax rate in these jurisdictions. We generate losses in certain jurisdictions for which we receive no tax benefit as the deferred tax assets in these jurisdictions (including net operating losses) are fully reserved in our valuation allowance. For this reason, we recognize minimal income tax expense or benefit in these jurisdictions, of which the most material jurisdictions are the United States, the United Kingdom and Australia. Due to these reserves, the geographic mix of our pre-tax earnings has a direct correlation with how high or low our annual effective tax rate is relative to consolidated earnings.

Liquidity and Capital Resources

Our principal liquidity requirements are for debt service, working capital and capital expenditures. We plan to use cash on hand, cash generated by operations and, should it become necessary, access to our revolving credit facility, as our primary sources of liquidity. Our operations are highly dependent upon the paper production industry and the degree to which the paper industry is affected by global economic conditions and the availability of credit. Demand for our products could decline if paper manufacturers are unable to obtain required financing or if economic conditions cause additional mill closures. In addition, the impact of the most recent global economic recession and the continued lack of availability of credit may affect our customers’ ability to pay their debts.

Net cash provided by operating activities was $10.3 million for the three months ended March 31, 2013 and $10.2 million for the three months ended March 31, 2012. The $0.1 million increase was due to increased cash earnings partially offset by an increase in working capital.

Net cash used in investing activities was $3.4 million for the three months ended March 31, 2013 and $2.5 million for the three months ended March 31, 2012. The increase of $0.9 million was primarily due to the increase in capital expenditures of $0.5 million partially offset by the decrease of $0.4 million in proceeds from disposals of property and equipment.

Net cash used in financing activities was $0.6 million and $13.2 million for the three months ended March 31, 2013 and March 31, 2012, respectively. The decrease of $12.6 million was primarily the result of the decrease in principal payments made on debt in 2013.

As of March 31, 2013, the outstanding balance of our term debt under our Credit Facility and Notes was $434.0 million. In addition, as of March 31, 2013, we had no outstanding borrowings under our current revolving lines of credit, including the revolving credit facility under the Credit Facility and lines of credit in various foreign countries that are used to facilitate local short-term operating needs, except that $10.2 million of the revolving credit facility is committed for letters of credit, leaving an aggregate of $19.8 million available for additional borrowings under these revolving lines of credit. In addition, in July of 2012, our Austrian subsidiary entered into a $7.7 million working capital loan with a local banking institution. This loan bears interest at a variable rate, which was 2.15% at March 31, 2013 and has an initial maturity date of June 30, 2013, with a twelve month roll-over option. We had cash and cash equivalents of $41 million at March 31, 2013 compared to $35 million at December 31, 2012.

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We expect to incur approximately $11.0 million related to the continuation of our restructuring initiatives in 2013. Actual restructuring costs for 2013 may substantially differ from estimates at this time, depending on the timing of the restructuring activities and the required actions to complete them.

Capital Expenditures

For the three months ended March 31, 2013 and 2012, we had capital expenditures of $3.7 million and $3.3 million. We are targeting capital expenditures of $34.0 million for 2013. We analyze our planned capital expenditures based on investment opportunities available to us and our financial and operating performance, and accordingly, actual capital expenditures may be more or less than this amount.

See “Credit Facility and Notes” below for a description on limitations on capital expenditures imposed by our Credit Facility.

Credit Facility and Notes

On May 26, 2011, we completed a refinancing transaction, which replaced certain of our then outstanding indebtedness with $240 million aggregate principal amount of 8.875% senior unsecured notes (the “Notes”) and a new approximately $278 million multi-currency senior secured credit facility (as subsequently amended, the “Credit Facility”), comprised of approximately $248 million of senior secured term loans and a $30 million senior secured revolving credit facility. The interest rates under the Credit Facility are calculated, at our option, at the Alternate Base Rate as defined in the Credit Facility, LIBOR or EURIBOR, subject to a minimum of 2.25%, 1.25% and 1.25%, respectively, plus, in each case, a margin.

Notes

Interest on the Notes is payable semiannually in cash in arrears on June 15 and December 15 of each year, and commenced on December 15, 2011. The Notes are our senior unsecured obligations and are guaranteed by each of our direct and indirect wholly-owned domestic subsidiaries (the “Notes Guarantors”). They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our existing and future subordinated indebtedness. The Notes are effectively subordinated to all of our secured debt, including the Credit Facility and related guarantees, to the extent of the value of the assets securing such debt and structurally subordinated to all of the existing and future liabilities of our subsidiaries that do not guarantee the Notes. Subject to the terms of the Credit Facility, the Notes may be redeemed by the Company at specified redemption prices which vary depending on the timing of the redemption.

The Notes contain customary covenants that, subject to certain exceptions, restrict the Company’s ability to enter into certain transactions. We believe we are in compliance with these covenants at March 31, 2013.

Credit Facility

The Credit Facility provides for (i) a six-year $125.0 million senior secured term loan facility, borrowed by us, the proceeds of which were used to refinance certain of our existing indebtedness; (ii) a six-year €87.0 million senior secured term loan facility, borrowed by Xerium Technologies Limited, a wholly-owned indirect subsidiary of ours organized under the laws of England and Wales, the proceeds of which were used to refinance certain of our existing indebtedness; (iii) a five-year $30.0 million senior secured revolving credit facility, available to us; and an uncommitted incremental amount of $10 million, the proceeds of which are used for working capital and general corporate purposes and include sub-limits available for letters of credit (the “Revolving Facility”); (iv) and an uncommitted incremental credit facility (the “Incremental Facility”) allowing for increases under the Revolving Facility and Term Loans with the same terms, and borrowing of new tranches of term loans, up to an aggregate principal amount not to exceed the greater of (i) $100.0 million and (ii) our Adjusted EBITDA over the prior 12-month period, provided that increases under the Revolving Facility shall not exceed $35.0 million.

The loans under the Credit Facility are required to be permanently repaid with 100% of the net proceeds of assets sales, dispositions, issuances of certain debt obligations and insurance, in each case, subject to certain exceptions and 50% of annual excess cash flow. The Credit Facility requires us to make annual principal payments (payable in quarterly installments) equal to 1% per annum with respect to the Term Loans with the remaining amount due at final maturity.

The obligations under the Credit Facility are guaranteed by all of our existing and future direct and indirect subsidiaries that are organized in the United States (subject to certain exceptions in the case of immaterial subsidiaries and joint ventures) and certain of our direct and indirect foreign subsidiaries, provided that non-U.S. guarantors are only liable for obligations of Xerium Technologies Limited and certain other non-U.S. guarantors. The loans are secured by a first-priority perfected security interest in substantially all of the assets.

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Credit Facility Amendment

To facilitate our restructuring initiatives, on June 28, 2012, we entered into an amendment to our Credit Facility. Among other revisions to the Credit Facility, the amendment allows for additional add backs to Adjusted EBITDA annually though 2015 up to the lesser of $15.0 million or the unused portion of our annual capital expenditure limit; increases the maximum leverage ratios between the fiscal quarter ending September 30, 2012 and the fiscal quarter ending December 31, 2013; amends the definition of the leverage ratio to reduce debt by unrestricted surplus cash held by us and increases the interest rate on the term loans by 0.75% annually for eighteen months following the effective date of the amendment. We paid $1.5 million in deferred financing costs related to the amendment.

Covenants

The Credit Facility contains customary covenants that, subject to certain exceptions, restrict our ability to enter into certain transactions and engage in certain activities. In addition, the Credit Facility includes specified financial covenants requiring us to maintain certain consolidated leverage and interest coverage ratios. The consolidated leverage ratio is calculated by dividing the total of our total gross debt, at average currency exchange rates for the last twelve months, less surplus cash by Adjusted EBITDA. In order to be in compliance with this covenant, as amended, we were required to have a ratio of no more than 5.50 to 1.00 at March 31, 2013. This ratio decreases after March 31, 2013 by 25-50 basis points in various periods to a minimum of 3.25 to 1.00 for the quarter ending March 31, 2017 and all subsequent periods. The interest coverage ratio is calculated by dividing Adjusted EBITDA by interest expense, net of mark to market movements on hedging instruments and amortization of deferred financing costs. In order to be in compliance with this covenant, we must have a ratio of at least 2.25 to 1.00 at March 31, 2013. In various periods subsequent to March 31, 2013, this ratio increases by increments of 25 basis points to 3.25 to 1.00 for the quarter ended December 31, 2016 and thereafter. Each of these covenants is calculated at the end of each quarter and is based on a rolling twelve month period. In addition, the terms of the Credit Facility limit our ability to make capital expenditures in excess of specified amounts. We are in compliance with all of these covenants at March 31, 2013.

Critical Accounting Policies

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with GAAP requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from those estimates.

Our significant policies are described in the notes to the condensed consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012. Judgments and estimates of uncertainties are required in applying our accounting policies in many areas. There have been no material changes to the critical accounting policies affecting the application of those accounting policies as noted in our Annual Report on Form 10-K for the year ended December 31, 2012.

Non-GAAP Financial Measures

We use EBITDA and Adjusted EBITDA (as defined in the Credit Facility) as supplementary non-GAAP liquidity measures to assist us in evaluating our liquidity and financial performance, specifically our ability to service indebtedness and to fund ongoing capital expenditures. The Credit Facility includes covenants based on Adjusted EBITDA. If our Adjusted EBITDA declines below certain levels, we may violate the covenants resulting in a default condition under the Credit Facility or be required to prepay the Credit Facility. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as a substitute for income (loss) from operations or cash flows (as determined in accordance with GAAP).

EBITDA is defined as net income (loss) before interest expense, income tax provision (benefit) and depreciation (including non-cash impairment charges) and amortization.

“Adjusted EBITDA”, under the Credit Facility means, with respect to any period, the total of (A) the consolidated net income for such period, plus (B) without duplication, to the extent that any of the following were deducted in computing such consolidated net income for such period: (i) provision for taxes based on income or profits, including, without limitation, federal, state, provincial, franchise and similar taxes, including any penalties and interest relating to any tax examinations, (ii) consolidated interest expense, (iii) consolidated depreciation and amortization expense, (iv) reserves for inventory in

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connection with plant closures, (v) consolidated operational restructuring costs, subject to annual limitations provided for in the Credit Facility, (vi) non-cash charges or gains resulting from the application of purchase accounting, including push-down accounting, (vii) non-cash expenses resulting from the granting of common stock, stock options, restricted stock or restricted stock unit awards under equity compensation programs solely with respect to common stock, and cash expenses for compensation mandatorily applied to purchase common stock, (viii) non-cash items relating to a change in or adoption of accounting policies, (ix) non-cash expenses relating to pension or benefit arrangements, (x) expenses incurred as a result of the repurchase, redemption or retention of common stock earned under equity compensation programs solely in order to make withholding tax payments, (xi) amortization or write-offs of deferred financing costs, (xii) any non-cash losses resulting from mark to market hedging obligations (to the extent the cash impact resulting from such loss has not been realized in such period) and (xiii) other non-cash losses or charges (excluding, however, any non-cash loss or charge which represents an accrual of, or a reserve for, a cash disbursement in a future period), minus (C) without duplication, to the extent any of the following were included in computing consolidated net income for such period, (i) non-cash gains with respect to the items described in clauses (vi), (vii), (ix), (xi), (xii) and (xiii) (other than, in the case of clause (xiii), any such gain to the extent that it represents a reversal of an accrual of, or reserve for, a cash disbursement in a future period) of clause (B) above and (ii) provisions for tax benefits based on income or profits. Notwithstanding the foregoing, Adjusted EBITDA, as defined in the credit facility and calculated below, may not be comparable to similarly titled measurements used by other companies.

Consolidated net income is defined as net income (loss) determined on a consolidated basis in accordance with GAAP; provided, however, that the following, without duplication, shall be excluded in determining consolidated net income: (i) any net after-tax extraordinary or non-recurring gains, losses or expenses (less all fees and expenses relating thereto), (ii) the cumulative effect of changes in accounting principles, (iii) any fees and expenses incurred during such period in connection with the issuance or repayment of indebtedness, any refinancing transaction or amendment or modification of any debt instrument, in each case, as permitted under the Credit Facility and (iv) any gains resulting from the returned surplus assets of any pension plan.

The following table provides reconciliation from net (loss) income and operating cash flows, which are the most directly comparable GAAP financial measures, to EBITDA and Adjusted EBITDA.

	Three Months Ended March 31,
	2013			2012
Net income (loss)	$	5,485		$	(7,522	)
Stock-based compensation	295			972
Depreciation	8,966			9,764
Amortization of intangibles	576			576
Deferred financing cost amortization	709			1,054
Foreign exchange (gain) loss on revaluation of debt	(118		)	8
Deferred taxes	282			(182		)
Asset impairment	928			—
Gain on disposition of property and equipment	(10		)	(446		)
Net change in operating assets and liabilities	(6,830		)	5,928
Net cash provided by operating activities	10,283			10,152
Interest expense, excluding amortization	8,497			8,544
Net change in operating assets and liabilities	6,830			(5,928		)
Current portion of income tax expense	2,221			839
Stock-based compensation	(295		)	(972		)
Foreign exchange gain (loss) on revaluation of debt	118			(8		)
Asset impairment	(928		)	—
Gain on disposition of property and equipment	10			446
EBITDA	26,736			13,073
Stock-based compensation	295			972
Operational restructuring expenses	1,255			3,974
Non-restructuring impairment expense	857			—
Non-recurring CEO retirement expenses	—			801
Adjusted EBITDA	$	29,143		$	18,820

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our foreign currency exposure and interest rate risks as of March 31, 2013 have not materially changed from December 31, 2012 (see Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2012). As of March 31, 2013, we had outstanding long-term debt with a carrying amount of $434.0 million with an approximate fair value of $424.7 million.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. We have carried out an evaluation, as of March 31, 2013 under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) under the Securities Exchange Act of 1934, as amended (the “Act”). Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms; and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures. No evaluation of disclosure controls and procedures can provide absolute assurance that these controls and procedures will operate effectively under all circumstances. However, our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective at the reasonable assurance level as set forth above.

(b) Changes in Internal Control over Financial Reporting. No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Act) occurred during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material developments to the legal proceedings described in our Annual Report on Form 10-K for the year ended December 31, 2012. See Notes 4 and 9 to our Unaudited Condensed Consolidated Financial Statements for a discussion of our Brazilian operating subsidiary’s proceedings before the Federal Reserve Department of Brazil and other routine litigation to which we are subject.

ITEM 1A. RISK FACTORS

The risks described in our Annual Report on Form 10-K for the year ended December 31, 2012 have not materially changed, except for the risk factor below.

If we cannot meet the New York Stock Exchange ("NYSE") continued listing requirements, the NYSE may delist our common stock, which could have an adverse impact on the liquidity and market price of our common stock.

Our common stock is currently listed on the NYSE. On August 2, 2012, we received a notice from the NYSE informing us that our average market capitalization over a 30 consecutive trading day period had been less than $50 million at the same time that our stockholders’ equity was less than $50 million as of the most recent balance sheet date. As of April 29, 2013 when our stock price closed at $9.78, our 30-day average market capitalization was $107.2 million and at March 31, 2012, our stockholders’ deficit was $(26.6) million, as reflected on the balance sheet included in this March 31, 2013 quarterly report. Although our 30-day average market capitalization currently exceeds $50 million, there can be no assurance that it will remain above the required NYSE criteria. Additionally, we have submitted, and the NYSE has accepted, a plan to regain compliance with the market capitalization listing standards within 18 months. However, if we are unable to regain compliance with this NYSE continued listing standard in accordance with our plan in a timely manner, the NYSE could delist our stock which could negatively impact us and our stockholders by reducing the liquidity and market price of our common stock.

ITEM 6.    EXHIBITS

See the exhibit index following the signature page to this Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	XERIUM TECHNOLOGIES, INC.
	(Registrant)
May 7, 2013	By:	/s/Clifford E. Pietrafitta
		Clifford E. Pietrafitta
		Executive Vice President and CFO
		(Principal Financial Officer)

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EXHIBIT INDEX

Exhibit   Number	Description of Exhibits
10.1	Non-Management Director Compensation Policy
10.2	Form of 2013 Management Incentive Plan
31.1	Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Statement of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS(1)	XBRL Instance Document
101.SCH(1)	XBRL Taxonomy Extension Schema Document
101.CAL(1)	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB(1)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE(1)	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF(1)	XBRL Taxonomy Extension Definition Linkbase Document

(1) Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibits 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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EX-10.1

Exhibit 10.1

Xerium Technologies, Inc.

Non-Management Director Compensation Policy

Non-management directors receive an annual retainer of $112,000, which will be paid pursuant to the Xerium Technologies, Inc. Directors’ Deferred Stock Unit Plan. Under the plan, 50% of the retainer will be paid in the form of a grant of deferred stock units. Non-management directors will be given the opportunity to elect to receive the remainder of such retainer in deferred stock units or in cash. Please see the Directors’ Deferred Stock Unit Plan for additional information.

Each of the chairs of the Audit Committee and Compensation Committee also receive additional cash compensation at an annual rate of $10,000 per year, and the chair of the Nominating and Governance Committee, and the Lead Independent Director, if there is one, each receive additional cash compensation at an annual rate of $5,000 per year. If the Chairman of the Board is a non-management director, then he or she will receive additional cash compensation at an annual rate of $55,000 per year. Directors are also reimbursed for out-of-pocket expenses for attending board and committee meetings.

EX-10.2

Exhibit 10.2

XERIUM TECHNOLOGIES, INC.

2013 MANAGEMENT INCENTIVE COMPENSATION PROGRAM

This Xerium Technologies, Inc. 2013 Management Incentive Compensation (“MIC”) Program contains rules supplemental to those set forth in the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “EIP”). The MIC provides for the grant of the incentive award opportunities (each, an “Award”) under and subject to the terms of the EIP, which is incorporated herein by reference. In the event of any inconsistency between the MIC and applicable provisions of the EIP, the EIP shall control. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the EIP.

1.Administration; Eligibility. The MIC shall be administered by the Committee as described in the EIP. The Committee may in its discretion consult with outside advisors or internal Company resources for purposes of making any determinations in connection with its administration of the MIC. Eligibility to participate in the MIC shall be limited to individuals who are selected by the Committee to participate in the MIC from among those individuals who are eligible to participate in the EIP. Each selected individual who signs and returns an agreement (“Award Agreement”) in substantially the form of Exhibit A shall be a participant (“Participant”) in the MIC Program. Participation in any Award shall not entitle a Participant to share in any future Awards or in any other future awards of the Company or its subsidiaries.

2.Features of Awards. Each Award shall entitle the holder, subject to satisfaction of the performance conditions under the Award, to a benefit determined in accordance with the provisions of the Award Agreement applicable to such Participant that shall be payable in cash in accordance with the Award Agreement. The performance year is the fiscal/calendar year 2013.

3.Award Determinations. The Award for each Participant shall be initially determined as set forth on Schedule 1 of the Award Agreement on the basis of the target Award and Xerium’s 2013 Bank-Adjusted EBITDA (as defined in Schedule 1 of the Award Agreement) (the “Formula Award”) and the amounts actually payable to all Participants in the aggregate shall not exceed 100% of the sum of the Formula Awards for all Participants in the aggregate, provided, however, (i) one hundred twenty percent (120%) of the sum of the Formula Awards payable to all Participants shall constitute a pool for the payment of MIC Awards and (ii) the amount payable to any Participant shall not be less than eighty percent (80%) of and shall not exceed one hundred twenty percent (120%) of his or her Formula Award so long as the total amounts payable to all Participants in the aggregate do not exceed the 100% of the sum of the Formula Awards for all Participants cap set forth above.

4.Termination of Employment. Unless otherwise determined by the Committee in its sole discretion, no Award shall be payable to or in respect of Participant unless the Participant is employed by the Company or a subsidiary on December 31 of the performance year; provided that in the event of a termination of Participant’s employment by the Company or a subsidiary without Cause or a Good Reason (as “Cause” and “Good Reason” are defined in the Award Agreement), a pro-rata portion of the Award determined as of the date of termination shall be paid upon payout to all other Participants pursuant to Section 5 below.

5.Payout. The amount determined under Schedule 1 with respect to an Award shall be paid to a Participant in cash, as soon as practicable after completion of the Company’s audit for calendar year

ending December 31, 2013, but in all events before the 15^th day of the third month following December 31 following the performance year.

6.Tax Withholding. The minimum tax withholding amount with respect to any payments being made in cash shall be withheld from such payments.

7.Intent to be Exempt from Section 162(m). Awards for the 2013 performance year are intended to qualify for the performance-based compensation exception under Section 162(m) of the Code.

8.Nature of Awards. Awards hereunder are intended as cash awards pursuant to the EIP. The MIC Program is unfunded and any cash payments by the Company hereunder shall be made from the general assets of the Company.

9.Other Incentives. Nothing in this MIC Program restricts the ability of the Company to pay incentive compensation or other supplemental compensation in any amount to any individual for any reason, including but not limited to hiring incentives, retention incentives, separation payments, safety and service awards or incentive compensation or awards on any other basis.

10.No Duplication. There shall be no duplication of annual incentives under multiple plans. If the Committee in its sole discretion determines that a Participant also participates in another annual cash incentive arrangement of the Company or any Affiliate based on the achievement of financial or personal goals, the Committee may in its sole discretion reduce the amount of any Award under this Plan by the amount or value of the of the duplicative benefit.

11.Prior MIC Programs. The MIC Program as set forth in this document supercedes for 2013 fiscal year all prior management incentive compensation plans.

12.Amendment. The Committee may amend the MIC at any time and from time to time, and may terminate the MIC, in each case subject only to such limitations, if any, as the EIP may impose.

13.409A. This MIC and the Awards granted thereunder shall be construed and administered consistent with the intent that they at all times be in compliance with or exempt from the requirements of Section 409A of the Code and the regulations promulgated thereunder.

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EXHIBIT A

XERIUM TECHNOLOGIES, INC.

MANAGEMENT INCENTIVE COMPENSATION AWARD AGREEMENT

Pursuant to the terms of the Xerium Technologies, Inc. 2013 Management Incentive Compensation Program (the “MIC”) and the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “Plan”), Xerium Technologies, Inc. (the “Company”) hereby grants to the Employee the Management Incentive Compensation Award (“MIC Award”) described below.

1.The Incentive Compensation Award. The MIC Award is subject to the terms and conditions of this Management Incentive Compensation Award Agreement (“Agreement”) and the Plan. The Incentive Compensation Award is a cash award payable as set forth in this Agreement. The target amount of the award for the Employee, as a percentage of Employee’s year-end annual base compensation from the Company, is set forth on Schedule 1 of this Agreement. The amount payable will be adjusted upward or downward, or may be forfeited, based on performance as set forth on Schedule 1 of this Agreement. “Vested” portion of the Award is the portion of the Award to which the Employee has a nonforfeitable rights. An Award shall be paid hereunder only to the extent that such Award is Vested, as provided in this Agreement. The Employee’s rights to payment under the Award are subject to the restrictions described in this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.

2.Payment of Award. The amount determined under Schedule 1 shall be paid to the Employee in cash not later than March 15, 2014, subject to applicable tax withholding.

3.Treatment of Awards Upon a Change of Control; Termination of Employment.

(a)In the event a Change of Control (defined below) occurs prior to the close of the performance year with respect to the Award, for the performance period from January 1, 2013 to the date of closing of the Change of Control (the “COC Performance Year”) the applicable performance metrics specified in Schedule 1 of the Award Agreement shall be determined as follows: (i) the performance year shall be deemed to end on the effective date of such transaction; and (ii) the performance metrics shall be deemed achieved to the extent the applicable performance metrics specified in Schedule 1 of the Award Agreement for the shortened performance year described in clause (i) above are on target to be achieved based upon the financial information available to the Company. In the event such performance metrics have been achieved pursuant to the foregoing sentence for the COC Performance Year and the MIC (or an equivalent plan approved by the Board that is no less lucrative or generous than the MIC) is not continued for the period from the end of the COC Performance Year to the end of calendar year 2013, the full amount of the Award determined under Schedule 1 shall be paid to the Employee in cash promptly following the Change of Control, subject to applicable tax withholding. In the event such performance metrics have been achieved pursuant to the first sentence above for the COC Performance Year and the MIC (or an equivalent plan approved by the Board that is no less lucrative or generous than the MIC) is continued for the period from the end of the COC Performance Year to the end of the calendar year (subject to an adjustment for any payments made at the Change of Control effective date hereunder), the amount of the Award determined under Schedule 1 shall be prorated by multiplying the Award by a fraction, the numerator of which is the number of days in the COC Performance Year and the denominator of which is 365, and such Award shall be paid to the Employee in cash promptly following the Change of Control, subject to applicable tax withholding. For avoidance of doubt and for example purposes only, assuming a COC Performance Year ending on July 31 where the Bank Adjusted EBITDA is on target to achieve 125% of target for the full year

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and the Employee’s target award is 50% of a $250,000 base compensation, in the event that at the closing of such Change of Control the Company does not provide for the continuation of the MIC or equivalent plan that is no less lucrative or generous than the MIC for the remainder of the year, Employee shall be entitled to receive the full amount of his Award totaling $156,250.

(b)In the event of a termination of the Employee’s employment for reasons other than (i) death or Disability, (ii) termination without Cause or (iii) termination by the Employee with Good Reason on or prior to December 31, 2013, no Award shall be payable to Employee.

(c)In the event of a termination of the Employee’s employment as a result of (i) death or Disability, (ii) termination without Cause or (iii) termination by the Employee with Good Reason on or prior to December 31, 2013, the Formula Award for such Employee determined under Schedule 1 of the Award Agreement shall be prorated by multiplying such Formula Award amount by a fraction, the numerator of which is the number of days in the performance year in which Employee was employed by the Company and the denominator of which is 365. The resulting Award shall be paid to Employee in accordance with Section 2 above.

(d)For purposes of this Agreement, the following definitions will apply:

(i)“Cause” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof). If the Employee has no written employment agreement with the Company, “Cause” shall mean (i) the Employee’s conviction of or plea of nolo contendere to a felony or other crime involving moral turpitude; (ii) the Employee’s fraud, theft or embezzlement committed with respect to the Company or any of its subsidiaries; or (iii) the Employee’s willful and continued failure to perform his material duties to the Company and its Subsidiaries, where the Company has provided written notice to the Employee of the failure and the Employee shall not have remedied such failure within then (10) business days following the effectiveness of such notice.

(ii)“Change of Control” shall mean any of the following which takes place after the Effective Date: (i) any Person or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”), other than the Company or any of its subsidiaries or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or one of its subsidiaries, becomes a beneficial owner, directly or indirectly, in one or a series of transactions, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for the election of directors of the Company; (ii) any merger or consolidation involving the Company or any sale or other disposition of all or substantially all of the assets of the Company, or any combination of the foregoing, occurs and the beneficial owners of the Company’s voting securities outstanding immediately prior to such consolidation, merger, sale or other disposition do not, immediately following the consummation of such consolidation, merger, sale or other disposition, hold beneficial ownership, directly or indirectly, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for election of directors of the surviving or resulting corporation in the case of any merger or consolidation or of the acquiring Person or Persons in the case of any sale or other disposition; or (iii) within twelve (12) months after a tender offer or exchange offer for voting securities of the Company (other than by the Company or any of its subsidiaries), individuals who are Continuing Directors shall cease to constitute a majority of the Board. For the purpose of this definition, the term “beneficial owner” (and correlative terms, including “beneficial ownership”) shall have the meaning set forth in Rule 13d-3 under the Act. provided in each such

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case such event is also a “change in control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5)(1) (or similar applicable regulation under Section 409A of the Code).

(iii)“Disability” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof). If the Employee has no written employment agreement with the Company, “Disability” shall mean Employee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.

(iv)“Good Reason” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof), where the Employee provides notice of the Good Reason event within 90 days of its occurrence and provides the Company at least 30 days to cure such matter. If the Employee has no written employment agreement with the Company, “Good Reason” shall mean a requirement that the Employee relocate more than fifty (50) miles from his then-current principal residence, it being understood that the Employee may be required to travel frequently and that prolonged periods spent away from Employee’s principal residence shall not constitute Good Reason.

(v)“Person” means any individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, or other entity or group.

4.Clawback. If an Employee receives an Award payout under the MIC based on financial statements that are subsequently required to be restated in a way that would decrease the amount of the Award to which the Employee was entitled, the Employee will refund to the Company the difference between what the Employee received and what the Employee should have received; provided that (i) the value of any difference to be refunded will be determined net of withholding and (ii) no refund will be required for Awards paid more than three years prior to the date on which the Company is required to prepare the applicable restatement. The value of any difference to be refunded will be determined in a manner consistent with regulations the Securities and Exchange Commission may adopt pursuant to Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

5.Confidentiality.

(a)Employee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Employee may develop Confidential Information for the Company or its subsidiaries during Employee’s employment with the Company, and that Employee may learn of Confidential Information during the course of such employment. Employee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Employee incident to his employment or other association with the Company or any of its subsidiaries. Employee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Employee understands that this restriction shall continue to apply after his employment terminates, regardless of the reason for such termination. All documents, records,

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tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Employee, shall be the sole and exclusive property of the Company and its subsidiaries. Employee shall safeguard all Documents and shall surrender to the Company at the time his employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in the Employee’s possession or control.

(b)For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom they compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” mean all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Employee’s employment with the Company or any of its subsidiaries.

6.Restricted Activities.¹ Employee, as a condition to participation in the MIC and in consideration of Participant's continued employment by the Company and/or its subsidiaries, agrees that some restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:

(a)For a period of time beginning on the date Employee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Employee’s employment terminates (the “Non-Competition Period”) Employee shall not, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in South America; (iv) in Europe; (v) in Asia; (vi) in Australia; (vii) in the United States; (viii) in those states of the United States in which the Company or any of its subsidiaries sells products or conducts business activities. Specifically, but without limiting the foregoing, Employee agrees that during the Non-Competition Period, Employee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 6, Employee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.

(b)Employee agrees that, during his employment with the Company, he will not undertake any outside activity, whether or not competitive with the business of the Company or its subsidiaries that could reasonably give rise to a conflict of interest or otherwise interfere with his duties and obligations to the Company or any of its subsidiaries.

A - 4

(c)Employee further agrees that while he is employed by the Company and during the Non-Competition Period, Employee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Employee’s obligations hereunder during that portion of the Non-Competition Period that follows termination of Employee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Employee’s employment.

(d)In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months or such other time as determined enforceable by such court.

7.Non-Inducement. Employee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by me.

8.Assignment of Rights to Intellectual Property. Employee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Employee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Employee’s full right, title and interest in and to all Intellectual Property. Employee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Employee will not charge the Company for time spent in complying with these obligations. All copyrightable works that Employee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Employee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Employee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.

9.Consideration and Acknowledgments. Employee acknowledges and agrees that the covenants described in Sections 4 through 8 of this Agreement are essential terms, and the underlying Management Incentive Compensation Award would not be provided by the Company in the absence of these covenants. Employee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Employee from earning a livelihood following the termination of his or her employment, and that these covenants do not

A - 5

place undue restraint on Employee and are not in conflict with any public interest. Employee further acknowledges and agrees that Employee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Employee agrees that in the event he or she is offered employment with a competing business at any time in the future, Employee shall immediately notify the competing business of the existence of the covenants set forth above.

10.Enforceability; General Provisions.

(a)Employee agrees that the restrictions contained in this Agreement are reasonable and necessary to protect the Company’s legitimate business interests and that full compliance with the terms of this Agreement will not prevent Employee from earning a livelihood following the termination of employment, and that these covenants do not place undue restraint on Employee.

(b)Because the Company’s current base of operations is in North Carolina, Employee consents to the jurisdiction of the state and federal courts of North Carolina with respect to any claim arising out of this Agreement.

(c)Employee acknowledges that in the event of a breach or a threatened breach of this Agreement, the Company will face irreparable injury which may be difficult to calculate in dollar terms and that the Company shall be entitled, in addition to all remedies otherwise available in law or in equity, to temporary restraining orders and preliminary and final injunctions enjoining such breach or threatened breach in any court of competent jurisdiction without the necessity of posting a surety bond, as well as to obtain an equitable accounting of all profits or benefits arising out of any violation of this Agreement.

(d)Employee agrees that if a court determines that any of the provisions in this Agreement is unenforceable or unreasonable in duration, territory, or scope, then that court shall modify those provisions so they are reasonable and enforceable, and enforce those provisions as modified.

(e)If any phrase or provision of this Agreement is declared invalid or unenforceable by a court of competent jurisdiction, that phrase, clause or provision shall be deemed severed from this Agreement, and will not affect the enforceability of any other provisions of this Agreement, which shall otherwise remain in full force and effect.

(f)Waiver of any of the provisions of this Agreement by the Company in any particular instance shall not be deemed to be a waiver of any provision in any other instance and/or of the Company’s other rights at law or under this Agreement.

(g)Employee agrees that the Company may assign its rights under this Agreement to its successors and that any such successor may stand in the Company’s shoes for purposes of enforcing this Agreement.

(h)Employee agrees to reimburse Company for all attorneys’ fees, costs, and expenses that it reasonably incurs in connection with enforcing its rights and remedies under this Agreement, but only to the extent the Company is ultimately the prevailing party in the applicable legal proceedings.

(i)If Employee violates this Agreement, then the restrictions set out in Sections 4 - 8 shall be extended by the same period of time as the period of time during which the violation(s) occurred.

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(j)Employee fully understands Employee’s obligations in this Agreement, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, and has voluntarily agreed to comply with these covenants for their stated terms.

(k)Employee agrees that in the event Employee receives an offer of employment at any time in the future with any entity that may be considered a Competing Business Line, Employee shall immediately notify such Competing Business of the existence and terms of this Agreement. Employee also understands and agrees that the Company may notify anyone later employing Employee of the existence and provisions of this Agreement.

(l)Employee agrees that Employee’s obligations under Sections 4 through this Section 10 will survive the payment or forfeiture of the Award hereunder and continue for the duration of Employee’s employment with the Company, and thereafter to the extent stated in their terms.

11.Miscellaneous.

(a)No Assignment. No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.

(b)Employment Rights. This Agreement shall not create any right of the Employee to continued employment with the Company or its Affiliates or limit the right of Company or its Affiliates to terminate the Employee’s employment at any time and shall not create any right of the Employee to employment with the Company or any of its Affiliates. Except to the extent required by applicable law that cannot be waived, the loss of the Award shall not constitute an element of damages in the event of termination of the Employee’s employment even if the termination is determined to be in violation of an obligation of the Company or its Affiliates to the Employee by contract or otherwise.

(c)Unfunded Status. The obligations of the Company hereunder shall be contractual only. The Employee shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Employee or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or any Affiliate.

(d)Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.

(e)Employee Acknowledgements. Employee acknowledges that (i) Employee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Employee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the Company regarding all aspects, business lines and product segments of the Company, and (iii) that these

A - 7

trade secrets and Confidential Information would inevitably be disclosed were Employee to work for a competitor.

(f)Governing Law. This Agreement and all actions arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

(g)Conflicts. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Employee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.

(h)409A. The Award shall be construed and administered consistent with the intent that it be at all times in compliance with, or exempt from, the requirements of Section 409A of the Internal Revenue Code and the regulations thereunder.

(i)Section 162(m). The Award shall be construed and administered consistent with the intent that it qualify to the maximum extent possible as qualifying performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code and the regulations thereunder.

(j)Amendment. This Agreement may be amended only by mutual written agreement of the parties.

IN WITNESS WHEREOF, Xerium Technologies, Inc. and Employee have executed this Management Incentive Compensation Agreement as of the date first written above.

Xerium Technologies, Inc.

By:    
Name:    Harold Bevis
Title:    President and CEO

Acknowledged and agreed:

Employee

Signature:    

Printed Name:    

Date:    

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Schedule 1

(a)Target Award: ___% of base compensation

(b)Metric. One measure of performance will be used in determining the formula adjustment under the Award: Xerium 2013 Bank Adjusted EBITDA. The “Bank Adjusted EBITDA” means “Adjusted EBITDA,” as such term is defined in the Credit and Guaranty Agreement (the “Credit Agreement”), dated as of May 26, 2011, entered into by and among the Company, certain subsidiaries of the Company, Citibank N.A., as administrative agent, and other agents and banks party thereto, as in effect for Xerium Technologies, Inc. for the year ended December 31, 2013.

(c)Currency Adjustments. The final Bank Adjusted EBITDA will be adjusted at the end of the year to reflect currency fluctuations relative to the US$ in all markets. Any adjustments made will be based on the following budgeted rates:

Foreign Exchange Rates
ARS	$0.218
AUD	$1.052
BRL	$0.487
CAD	$0.999
CHF	$1.025
CNY	$0.157
EUR	$1.231
GBP	$1.569
JPY	$0.013
MXN	$0.075
SEK	$0.147
VND	$0.000048

(d)Target and Formula. The minimum, target and maximum thresholds of Bank Adjusted EBITDA for 2013 shall be set by the Committee and delivered to the Employee in a separate writing; provided, however, that the amounts may be adjusted by the Committee after the initial determination of the amounts to reflect any material change of circumstance, including without limitation, the acquisition or disposition of any business by the Company or any of its subsidiaries.

Bank Adjusted EBITDA	Minimum	Target	Maximum
Percentage of Target Award Payable	0%	100%	150%

The formula amount payable with respect to an Award shall be determined as follows (where “X” below refers to the portion of the target award for a Participant under an Award):

• Bank Adjusted EBITDA Metric below minimum:    Award = no payment

• Bank Adjusted EBITDA Metric equal to minimum:    Award = 0

S - 1

• Bank Adjusted EBITDA Metric at target:     Award = X

• Bank Adjusted EBITDA Metric at maximum or above:     Award = 1.5X

The amount payable between the levels of Bank Adjusted EBITDA identified above shall be determined on the basis of straight line interpolation between points.

(e)The Committee may in its sole discretion adjust Award amount determined under subsection (e) upwards or downwards by 20% based on the following individual goals associated with the Company’s restructuring projects:

The Committee has delegated such authority (except with respect to his own Award) to the President and Chief Executive Officer of the Company.

The amount payable with respect to an Award shall in all cases be capped at one hundred eighty percent (180%) of a Participant’s target Award (1.8X).

S - 2

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Harold C. Bevis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Xerium Technologies, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2013

/s/ Harold C. Bevis

Harold C. Bevis

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Clifford E. Pietrafitta, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Xerium Technologies, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2013

/s/ Clifford E. Pietrafitta

Clifford E. Pietrafitta

Executive Vice President and CFO

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as principal executive officer of Xerium Technologies, Inc. (the “Company”), does hereby certify that, to his knowledge:

1) the Company’s Form 10-Q for the period ended March 31, 2013, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Company’s Form 10-Q for the period ended March 31, 2013, fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Harold C. Bevis

Harold C. Bevis

President and Chief Executive Officer

(Principal Executive Officer)

May 7, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as principal financial officer of Xerium Technologies, Inc. (the “Company”), does hereby certify that, to his knowledge:

1) the Company’s Form 10-Q for the period ended March 31, 2013, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Company’s Form 10-Q for the period ended March 31, 2013, fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Clifford E. Pietrafitta

Clifford E. Pietrafitta

Executive Vice President and CFO

(Principal Financial Officer)

May 7, 2013

XML

Components Of Net Periodic Benefit Cost (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Pensions, Other Post-Retirement And Post-Employment Benefits [Abstract]
Service cost	$ 973	$ 885
Interest cost	1,560	1,830
Expected return on plan assets	(1,412)	(1,373)
Amortization of prior service cost	3	3
Amortization of net loss	572	633
Net periodic benefit cost	$ 1,696	$ 1,978

XML

Stock-Based Compensation and Stockholders' Deficit - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified			12 Months Ended	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Dec. 31, 2010 2010-2012 Long-Term Incentive Plan Time Based Restricted Stock Units (RSU)	Mar. 31, 2013 2012-2014 Executive Long-Term Incentive Plan	Mar. 31, 2013 2012-2014 Executive Long-Term Incentive Plan Time Based Restricted Stock Units (RSU)	Mar. 31, 2013 2012-2014 Executive Long-Term Incentive Plan Time Based Awards	Mar. 31, 2013 2012-2014 Executive Long-Term Incentive Plan Performance Based Awards	Mar. 31, 2013 2012-2014 Executive Long-Term Incentive Plan Performance Based Awards Minimum	Mar. 31, 2013 2012-2014 Executive Long-Term Incentive Plan Performance Based Awards Maximum	Mar. 31, 2013 Chief Executive Officer Chief Executive Officer Stock Plan	Mar. 31, 2013 Retiring Chief Executive Officer Chief Executive Officer Stock Plan	Mar. 31, 2013 Non-Management Directors Plan Deferred Stock Unit (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units granted			131,010	54,750						204,208	50,000
Stock units vested					16,582
Incentive plan description						Time-based awards, or 50% of the total target award, were granted in the form of 54,750 time-based RSUs under the Company’s 2012 Plan.	The performance-based awards will convert into shares of the Company’s common stock and be paid after the close of the three-year performance period. The amount of the payment will be based on a sliding scale ranging from 50% if the metric is achieved at 85% of the target up to 200% if the metric is achieved at or above 115% of the target.
Percentage of award on sliding scale								50.00%	200.00%
Percentage of payout based on company performance								85.00%	115.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures										781,701	27,900
Common stock, par value	$ 0.001	$ 0.001								$ 0.001
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period										3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Contractual Term										10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price										$ 4.00
Deferred Compensation Arrangement with Individual, Annual Retainer Per Director												$ 112
Deferred Compensation Arrangement with Individual, Shares Awarded												15,444
Deferred Compensation Arrangement with Individual, Shares Issued												10,296

XML

Reconciliation Of Segment Earnings (Loss) To Income Before Provision For Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Segment Earnings (Loss):
Segment Earnings (Loss)	$ 17,443	$ 2,194
Non-cash compensation and related expenses	(295)	(972)
Legal fees related to term debt amendment	(857)	0
Interest expense, net	(9,206)	(9,598)
Depreciation and amortization	(9,542)	(10,340)
Restructuring expense	(1,255)	(3,974)
Income (loss) before provision for income taxes	7,988	(6,865)
Chief Executive Officer
Segment Earnings (Loss):
Non-recurring expenses related to CEO retirement	0	(801)
Clothing
Segment Earnings (Loss):
Segment Earnings (Loss)	18,062	14,761
Roll Covers
Segment Earnings (Loss):
Segment Earnings (Loss)	14,070	7,890
Corporate
Segment Earnings (Loss):
Segment Earnings (Loss)	$ (2,989)	$ (3,831)

XML

Derivatives and Hedging (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Aug. 08, 2011 agreement
Derivative [Line Items]
Number of interest rate cap agreements				2
Interest rate cap agreements with notional amounts totaling	$ 90,720			$ 114,400
Derivatives interest cap rate	3.00%
Fair value of the interest rate caps	10		16
Unrecognized loss recorded in other comprehensive income	(612)	(644)
Fair value contracts included in foreign exchange gain (loss)	103	451
Not Designated as Hedging Instrument | Foreign Exchange Contract
Derivative [Line Items]
Derivatives fair value of other assets (liabilities)	$ (16)		$ 357

XML

Stock-Based Compensation and Stockholders' Deficit (Tables)

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense during the three months ended March 31, 2013 and March 31, 2012 as follows:

	Three Months Ended March 31,
	2013		2012
RSU and DSU Awards (1)	$	295	$	409
Management Incentive/Performance Award Programs (2)	—		563
Total	$	295	$	972

(1) Related to RSUs and DSUs awarded to certain employees and non-employee directors.

(2) In 2012, the amount represents the value of stock awards granted under the 2012 Management Incentive Compensation Program

XML

Supplemental Guarantor Financial Information - Consolidating Statement Of Operation and Comprehensive (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	$ 139,805	$ 134,364
Costs and expenses:
Cost of products sold	85,298	87,921
Selling	18,521	19,488
General and administrative	14,634	17,825
Research and development	2,654	2,962
Restructuring and impairment	1,255	3,974
Operating Costs and Expenses, Total	122,362	132,170
Income from operations	17,443	2,194
Interest (expense) income, net	(9,206)	(9,598)
Foreign exchange (loss) gain	(249)	539
Income (loss) before provision for income taxes	7,988	(6,865)
Provision for income taxes	(2,503)	(657)
Net income (loss)	5,485	(7,522)
Comprehensive income (loss)	2,727	(3,478)
Parent
Costs and expenses:
Cost of products sold	(450)	(472)
General and administrative	1,982	4,113
Research and development	0	0
Restructuring and impairment	119	36
Operating Costs and Expenses, Total	1,651	3,677
Income from operations	(1,651)	(3,677)
Interest (expense) income, net	(6,704)	(7,355)
Foreign exchange (loss) gain	183	(154)
Equity in subsidiaries income	13,704	3,693
Dividend income	0
Income (loss) before provision for income taxes	5,532	(7,493)
Provision for income taxes	(47)	(29)
Net income (loss)	5,485	(7,522)
Comprehensive income (loss)	5,254	(8,168)
Total Guarantors
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	46,115	44,063
Costs and expenses:
Cost of products sold	30,863	33,415
Selling	5,218	5,723
General and administrative	807	1,638
Research and development	2,012	2,070
Restructuring and impairment	238	140
Operating Costs and Expenses, Total	39,138	42,986
Income from operations	6,977	1,077
Interest (expense) income, net	1,406	1,779
Foreign exchange (loss) gain	(13)	(6)
Equity in subsidiaries income	4,754	(690)
Dividend income	1,555
Income (loss) before provision for income taxes	14,679	2,160
Provision for income taxes	106	(40)
Net income (loss)	14,785	2,120
Comprehensive income (loss)	14,562	2,563
Total Non-Guarantors
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	105,399	102,676
Costs and expenses:
Cost of products sold	66,594	67,499
Selling	13,303	13,765
General and administrative	11,845	12,074
Research and development	642	892
Restructuring and impairment	898	3,798
Operating Costs and Expenses, Total	93,282	98,028
Income from operations	12,117	4,648
Interest (expense) income, net	(3,908)	(4,022)
Foreign exchange (loss) gain	(419)	699
Dividend income	0
Income (loss) before provision for income taxes	7,790	1,325
Provision for income taxes	(2,562)	(588)
Net income (loss)	5,228	737
Comprehensive income (loss)	2,924	4,984
Other Eliminations
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	(11,709)	(12,375)
Costs and expenses:
Cost of products sold	(11,709)	(12,521)
Operating Costs and Expenses, Total	(11,709)	(12,521)
Income from operations	0	146
Equity in subsidiaries income	(18,458)	(3,003)
Dividend income	(1,555)
Income (loss) before provision for income taxes	(20,013)	(2,857)
Provision for income taxes	0
Net income (loss)	(20,013)	(2,857)
Comprehensive income (loss)	(20,013)	(2,857)
The Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	139,805	134,364
Costs and expenses:
Cost of products sold	85,298	87,921
Selling	18,521	19,488
General and administrative	14,634	17,825
Research and development	2,654	2,962
Restructuring and impairment	1,255	3,974
Operating Costs and Expenses, Total	122,362	132,170
Income from operations	17,443	2,194
Interest (expense) income, net	(9,206)	(9,598)
Foreign exchange (loss) gain	(249)	539
Dividend income	0
Income (loss) before provision for income taxes	7,988	(6,865)
Provision for income taxes	(2,503)	(657)
Net income (loss)	5,485	(7,522)
Comprehensive income (loss)	$ 2,727	$ (3,478)

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Restructuring and Impairment Expense - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring expense	$ 1,255	$ 3,974
Europe Sales Agency [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring expense		$ 3,600

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Long-term Debt - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended
	Jun. 28, 2012	Mar. 31, 2013	Dec. 31, 2012
Debt Disclosure [Line Items]
Debt Instrument, Annual Increase (Decrease) to Interest Rate, Period	18 months
Credit facility amendment description	Among other revisions to the credit facility, the amendment allows for additional add backs to Adjusted EBITDA annually through 2015 up to the lesser of $15 million or the unused portion of the allowed annual capital expenditure limit; increases the maximum leverage ratios between September of 2012 and December of 2013; amends the definition of the leverage ratio to reduce debt by unrestricted surplus cash held by the Company and increases the interest rate on the term loans by 0.75% annually for eighteen months. The Company paid $1.5 million in deferred financing costs related to the amendment.
Adjusted EBITDA	$ 15,000,000
Debt Instrument, Annual Increase (Decrease) to Interest Rate		0.75%
Deferred financing costs related to the amendment		1,500,000
Additional borrowings under small lines of credit		5,100,000
Carrying value of long-term debt		433,989,000	437,081,000
Fair value of long-term debt		424,700,000	439,100,000
Letter of Credit
Debt Disclosure [Line Items]
Credit facility		10,200,000
Eight Point Eight Seven Five Percentage Of Senior Unsecured Notes Due On Two Thousand Eighteen
Debt Disclosure [Line Items]
Refinancing transaction, outstanding indebtedness		240,000,000
Debt instrument percentage		8.875%
Multi Currency Senior Secured Credit Facility
Debt Disclosure [Line Items]
Credit facility		278,000,000
Senior Secured Term Loans
Debt Disclosure [Line Items]
Senior secured term loans		248,000,000
Senior Secured Revolving Credit Facility
Debt Disclosure [Line Items]
Credit facility		30,000,000
Alternate Base Rate New Credit Facility
Debt Disclosure [Line Items]
Minimum interest rate under New Credit Facility		2.25%
Alternate Base Rate London Interbank Offer Rate
Debt Disclosure [Line Items]
Minimum interest rate under New Credit Facility		1.25%
Alternate Base Rate Euro Interbank Offered Rate
Debt Disclosure [Line Items]
Minimum interest rate under New Credit Facility		1.25%
New Credit Facility
Debt Disclosure [Line Items]
Additional borrowings under the Credit Facility		$ 19,800,000

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Stock-Based Compensation and Stockholders' Deficit - Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 295		$ 972
RSU And DSU Awards
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	295	[1]	409	[1]
Management Incentive/Performance Award Programs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 0	[2]	$ 563	[2]

[1] Related to RSUs and DSUs awarded to certain employees and non-employee directors.

[2] In 2012, the amount represents the value of stock awards granted under the 2012 Management Incentive Compensation Program. Subsequent to March 31, 2012, management determined that the minimum Adjusted EBITDA target level was not met, and reversed the compensation expense recorded for the three months ended March 31, 2012. In March of 2013, the Compensation Committee approved the 2013 Management Incentive Compensation Award Program. This award will be paying out entirely in cash, and therefore, the expense is no longer considered stock compensation.

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Income Taxes

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company utilizes the asset and liability method for accounting for income taxes in accordance with ASC Topic 740, Income Taxes (“Topic 740”). Under Topic 740, deferred tax assets and liabilities are determined based on the difference between their financial reporting and tax basis. The assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company reduces its deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In making this determination, the Company evaluates all available information including the Company’s financial position and results of operations for the current and preceding years, as well as any available projected information for future years.

For the three months ended March 31, 2013, the provision for income taxes was $2,503 as compared to $657 for the three months ended March 31, 2012. The increase in tax expense was primarily attributable to the geographic mix of earnings in the three months ended March 31, 2013 as compared with the three months ended March 31, 2012. The provision for income taxes is primarily impacted by income earned in tax paying jurisdictions relative to income earned in non-tax paying jurisdictions. The majority of income recognized for purposes of computing the effective tax rate is earned in countries where the statutory income tax rates range from 25% to 39%; however, permanent income adjustments recorded against pre-tax earnings may result in an effective tax rate that is higher or lower than the statutory tax rate in these jurisdictions. The Company generates losses in certain jurisdictions for which no tax benefit is received, as the deferred tax assets in these jurisdictions (including the net operating losses) are fully reserved in the valuation allowance. For this reason, the Company recognizes minimal income tax expense or benefit in these jurisdictions, of which the most material jurisdictions are the United States, the United Kingdom and Australia. Due to these reserves, the geographic mix of the Company’s pre-tax earnings has a direct correlation with how high or low its annual effective tax rate is relative to consolidated earnings.

As of March 31, 2013, the Company had a gross amount of unrecognized tax benefit of $2,865, exclusive of interest and penalties. The unrecognized tax benefit decreased by approximately $409 during the three months ended March 31, 2013, as a result of foreign currency effects, statute expirations and ongoing changes in currently reserved positions. The Company’s policy is to recognize interest and penalties related to income tax matters as income tax expense, which were immaterial for the three months ended March 31, 2013 and 2012. The tax years 2000 through 2012 remain open to examination in a number of the major taxing jurisdictions to which the Company and its subsidiaries are subject. The Company believes that it has made adequate provisions for all income tax uncertainties.

In November of 2011, the Federal Revenue Department of the Ministry of Finance of Brazil (“FRD”) issued a tax assessment against the Company’s indirect subsidiary, Xerium Technologies Brasil Indústria e Comércio S.A. (“Xerium Brazil”), challenging the goodwill recorded in the 2005 acquisition of Wangner Itelpa and Huyck Indústria e Comércio S.A. by Robec Brasil Participações Ltda., a predecessor to Xerium Brazil. This assessment denies the amortization of that goodwill against net income for the years 2006 through 2010. As of March 31, 2013, the Company would be required to pay approximately $43.4 million (subject to currency exchange rates) in tax, penalties and interest in the event the Company was unable to overturn this assessment. The Company believes the transactions in question (i) complied with Brazilian tax and accounting rules, (ii) were effected for a legitimate business purpose, to consolidate the Company’s operating activities in Brazil into one legal entity, and (iii) were properly documented and declared to Brazilian tax and corporate authorities. Based on the foregoing, Xerium Brazil filed a response disputing the tax assessment. In December of 2012 an administrative panel at the first administrative appeals level within the FRD rendered a decision upholding the assessment, but reducing the penalties claimed by 50%. This decision reduced the total assessment by approximately $11,590 to $31,762. On January 18, 2013, Xerium Brazil appealed the decision of the first administrative panel to the second of three administrative appeals courts potentially available to it within the FRD.

Although there can be no assurances, as of March 31, 2013, the Company believes it is more likely than not that it would prevail on every tax position under examination and therefore it did not accrue any amounts related to this assessment. Because this dispute is at a preliminary stage for resolution, the Company cannot assure a favorable outcome and cannot currently estimate the timing of the final resolution of this matter. The Company believes it has meritorious defenses and will vigorously contest this matter, and if the administrative courts of the FRD do not rule in the Company's favor, the Company intends to appeal its case to the Brazilian judicial courts. However, if management's views of the Company's position and the probable outcome of the assessment changes or the FRD’s initial position is sustained by Brazilian judicial courts, the amount accrued would adversely impact the Company’s financial condition and results of operations in the period in which any such determination or decision is made.

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Restructuring and Impairment Expense - Restructuring Programs (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Restructuring Reserve
Beginning Balance	$ 15,912	$ 1,252
Charges	1,185	3,974
Currency Effects	(461)	(60)
Cash Payments	(4,679)	(297)
Ending Balance	11,957	4,869
Severance [Member]
Restructuring Reserve
Beginning Balance	15,577	800
Charges	775	129
Currency Effects	(451)	13
Cash Payments	(4,109)	(213)
Ending Balance	11,792	729
Facility Costs And Other [Member]
Restructuring Reserve
Beginning Balance	335	452
Charges	410	3,845
Currency Effects	(10)	(73)
Cash Payments	(570)	(84)
Ending Balance	$ 165	$ 4,140

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Description of Business and Significant Accounting Policies - Changes In Warranty Liability (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Warranties, Increase (Decrease)
Beginning balance	$ 1,848
Charged to Cost of Sales	514
Effect of Foreign Currency Translation	(35)
Settlements	(307)
Ending balance	$ 2,020

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Description of Business and Significant Accounting Policies - Components of Inventories (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consigned inventory	$ 8,754	$ 8,726

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Restructuring and Impairment Expense - By Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	$ 1,255	$ 3,974
Clothing
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	409	3,759
Roll Covers
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	727	179
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	$ 119	$ 36

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Description of Business and Significant Accounting Policies - Net Income (Loss) Per Common Share (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Weighted-average common shares outstanding-basic	15,312,523	15,162,183
Dilutive effect of stock-based compensation awards outstanding	68,681	0
Weighted-average common shares outstanding-diluted	15,381,204	15,162,183

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Description of Business and Significant Accounting Policies - Anti-dilutive Shares (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Dilutive securities outstanding, not included in the computation	2.5	1.7

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Long-term Debt

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

At March 31, 2013 and December 31, 2012, long-term debt consisted of the following:

	March 31, 2013		December 31, 2012
Senior Bank Debt (Secured):
First lien debt, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of March 31, 2013	$	104,244	$	104,557
First lien debt, payable quarterly, Euro denominated–EURIBOR (minimum 1.25%) plus 5.00% (6.25%) as of March 31, 2013	93,202		95,979
	197,446		200,536
Senior Notes (Unsecured), payable semi-annually–U.S. Dollar denominated interest rate fixed at 8.875%, matures June of 2018	236,410		236,410
Other Long-Term Debt:
Unsecured, interest rate fixed at 2.00%, Euro denominated	133		135
Unsecured, interest rate fixed at 1.31% to 3.40%, Yen denominated	—		—
	433,989		437,081
Less current maturities	2,500		2,397
Total	$	431,489	$	434,684

On May 26, 2011, the Company completed a refinancing transaction, which replaced certain of its then outstanding indebtedness with $240 million aggregate principal amount of 8.875% senior unsecured notes (the “Notes”) and a new approximately $278 million multi-currency senior secured credit facility (as subsequently amended, the “Credit Facility”), comprised of approximately $248 million of senior secured term loans and a $30 million senior secured revolving credit facility. The interest rates under the Credit Facility are calculated, at the Company’s option, at the Alternate Base Rate as defined in the Credit Facility, LIBOR or EURIBOR, subject to a minimum of 2.25%, 1.25% and 1.25%, respectively, plus, in each case, a margin. The Credit Facility and Notes contain customary covenants that, subject to certain exceptions, restrict the Company’s ability to enter into certain transactions and engage in certain activities. In addition, the Credit Facility includes specified financial covenants, requiring the Company to maintain certain consolidated leverage and interest coverage ratios and limiting its ability to make capital expenditures in excess of specified amounts. These covenants are included in Note 5 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2012. The Company is in compliance with all covenants under the Notes and Credit Facility at March 31, 2013.

To facilitate its restructuring initiatives, on June 28, 2012, the Company entered into an amendment to its Credit Facility. Among other revisions to the Credit Facility, the amendment allows for additional add backs to Adjusted EBITDA annually through 2015 up to the lesser of $15 million or the unused portion of the allowed annual capital expenditure limit; increases the maximum leverage ratios between September of 2012 and December of 2013; amends the definition of the leverage ratio to reduce debt by unrestricted surplus cash held by the Company and increases the interest rate on the term loans by 0.75% annually for eighteen months. The Company paid $1.5 million in deferred financing costs related to the amendment. This amount is classified as an intangible asset in the Consolidated Balance Sheets at March 31, 2013.

As of March 31, 2013, an aggregate of $19.8 million is available for additional borrowings under the Credit Facility. This availability represents the $30.0 million revolving facility less $10.2 million of that facility committed for letters of credit. Additionally, at March 31, 2013, the Company had $5.1 million available for borrowings under other lines of credit.

As of March 31, 2013 and December 31, 2012, the carrying value of the Company’s long-term debt was $434.0 million and $437.1 million, respectively, and its fair value was approximately $424.7 million and $439.1 million, respectively. The Company determined the fair value of its debt utilizing significant other observable inputs (Level 2 of the fair value hierarchy).

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Description of Business and Significant Accounting Policies - Impairment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Product Information [Line Items]
Asset impairment	$ 928	$ 0

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Comprehensive Income and Accumulated Other Comprehensive Loss - Components Of Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Comprehensive Income (Loss) And Accumulated Other Comprehensive Income (Loss) [Abstract]
Net (loss) income	$ 5,485	$ (7,522)
Foreign currency translation adjustments	(4,392)	4,626
Pension liability changes under Topic 715	1,602	(488)
Change in value of derivative instruments	32	(94)
Comprehensive loss	$ 2,727	$ (3,478)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 40,763	$ 34,777
Accounts receivable, net	92,360	84,456
Inventories, net	75,265	77,391
Prepaid expenses	8,860	9,386
Other current assets	15,556	14,839
Total current assets	232,804	220,849
Property and equipment, net	299,853	308,806
Goodwill	58,821	61,127
Intangible assets	17,307	18,678
Other assets	8,095	9,383
Total assets	616,880	618,843
Current liabilities:
Notes payable	7,705	7,911
Accounts payable	35,421	36,884
Accrued expenses	63,787	59,757
Current maturities of long-term debt	2,500	2,397
Total current liabilities	109,413	106,949
Long-term debt, net of current maturities	431,489	434,684
Deferred and long-term taxes	15,651	16,582
Pension, other post-retirement and post-employment obligations	81,103	83,949
Other long-term liabilities	5,262	5,740
Commitments and contingencies (Note 9)
Stockholders' deficit
Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares outstanding as of March 31, 2013 and December 31, 2012	0	0
Common stock, $0.001 par value, 20,000,000 shares authorized; 15,370,146 and 15,309,717 shares outstanding as of March 31, 2013 and December 31, 2012, respectively	15	15
Stock warrants	13,532	13,532
Paid-in capital	413,420	413,124
Accumulated deficit	(408,354)	(413,839)
Accumulated other comprehensive loss	(44,651)	(41,893)
Total stockholders' deficit	(26,038)	(29,061)
Total liabilities and stockholders' deficit	$ 616,880	$ 618,843

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Summarized Financial Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Segment Reporting Information [Line Items]
Net sales	$ 139,805	$ 134,364
Segment Earnings (Loss)	17,443	2,194
Clothing
Segment Reporting Information [Line Items]
Net sales	89,937	88,683
Segment Earnings (Loss)	18,062	14,761
Roll Covers
Segment Reporting Information [Line Items]
Net sales	49,868	45,681
Segment Earnings (Loss)	14,070	7,890
Corporate
Segment Reporting Information [Line Items]
Segment Earnings (Loss)	$ (2,989)	$ (3,831)

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Description of Business and Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Significant Accounting Policies

Description of Business and Significant Accounting Policies

Description of Business

Xerium Technologies, Inc. (the "Company") is a leading global provider of industrial consumables and mechanical services used in the production of paper, paperboard, building products and nonwoven materials. Its operations are strategically located in the major paper-making regions of the world, including North America, Europe, South America and Asia-Pacific.

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements at March 31, 2013 and for the three months ended March 31, 2013 and 2012 include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, such financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. The interim results presented herein are not necessarily indicative of the results to be expected for the entire year. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation of the financial statements for the interim periods presented. These unaudited consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2012 as reported on the Company's Annual Report on Form 10-K filed on March 11, 2013.

Accounting Policies

Inventories, net

Inventories are generally valued at the lower of cost or market using the first-in, first-out (FIFO) method. Raw materials are valued principally on a weighted average cost basis. The Company’s work in process and finished goods are specifically identified and valued based on actual inputs to production. Provisions are recorded as appropriate to write-down obsolete and excess inventory to estimated net realizable value. The process for evaluating obsolete and excess inventory often requires management to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business, while considering the general aging of inventory and factoring in any new business conditions.

The components of inventories, net of allowances are as follows at:

	March 31, 2013		December 31, 2012
Raw materials	$	17,330	$	16,924
Work in process	23,790		23,681
Finished goods (includes consigned inventory of $8,754 in 2013 and $8,726 in 2012)	34,145		36,786
	$	75,265	$	77,391

Goodwill

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Intangible Assets (“Topic 350”). Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized, but instead, must be tested for impairment at least annually or whenever events or business conditions warrant. During the three months ended March 31, 2013, the Company evaluated events and business conditions to determine if a test for an impairment of goodwill was warranted. No such events or business conditions took place during this period, therefore no test was determined to be warranted at March 31, 2013.

Warranties

The Company offers warranties on certain products that it sells. The specific terms and conditions of these warranties vary depending on the product sold, the country in which the product is sold and arrangements with the customer. The Company estimates the costs that may be incurred under its warranties and records a liability for such costs. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction. The Company periodically assesses the adequacy of its recorded warranty claims and adjusts the amounts as necessary. The table below represents the changes in the Company’s warranty liability for the three months ended March 31, 2013:

	Balance at December 31, 2012		Charged to Revenue or Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Balance at March 31, 2013
For the three months ended March 31, 2013	$	1,848	$	514	$	(35	)	$	(307	)	$	2,020

Net Income (Loss) Per Common Share

Net income (loss) per common share has been computed and presented pursuant to the provisions of ASC Topic 260, Earnings per Share (“Topic 260”). Net income (loss) per share is based on the weighted-average number of shares outstanding during the period. As of March 31, 2013 and 2012, the Company had outstanding restricted stock units (“RSUs”), deferred stock units (“DSUs”), warrants and options.

The following table sets forth the computation of basic and diluted weighted-average shares:

	Three Months Ended March 31,
	2013	2012
Weighted-average common shares outstanding–basic	15,312,523	15,162,183
Dilutive effect of stock-based compensation awards outstanding	68,681	—
Weighted-average common shares outstanding–diluted	15,381,204	15,162,183

Dilutive securities aggregating approximately 2.5 million and 1.7 million were outstanding for the three months ended March 31, 2013 and March 31, 2012, but were not included in the computation of diluted earnings per share for the three months ended March 31, 2013 and 2012 because the impact of including such shares would be anti-dilutive to the earnings per share calculations.

Impairment

The Company reviews its long-lived assets that have finite lives for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment (“Topic 360”). This topic requires that companies evaluate the fair value of long-lived assets based on the anticipated undiscounted future cash flows to be generated by the assets when indicators of impairment exist to determine if there is impairment to the carrying value. Any change in the carrying amount of an asset as a result of the Company's evaluation has been recorded in restructuring and impairments expense in the consolidated statements of operations. Impairment charges associated with restructuring are discussed in Note 7 "Restructuring Expense".

In addition, in the first quarter of 2013, the Company determined there was impairment to the carrying value of it's vacant facility held for sale and certain other assets at March 31, 2013, and recorded a $0.9 million impairment expense. This impairment charge is included in general and administrative expense in the Consolidated Statements of Operations for the quarter ended March 31, 2013.

New Accounting Standards

On February 5, 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to reporting of amounts reclassified out of accumulated other comprehensive income. This pronouncement affects the reporting of reclassification adjustments from accumulated other comprehensive income. The new requirements took effect for quarterly and annual reporting periods beginning after December 15, 2012. We adopted the provisions of this guidance at March 31, 2013. See Note 6 for this disclosure.

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Long-term Debt - Schedule Of Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Senior Bank Debt (Secured):
Senior Bank Debt (Secured)	$ 197,446	$ 200,536
Other Long-Term Debt:
Carrying value of long-term debt	433,989	437,081
Less current maturities	2,500	2,397
Total	431,489	434,684
First Lien Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Twelve
Senior Bank Debt (Secured):
Senior Bank Debt (Secured)	104,244	104,557
First Lien Debt Payable Quarterly Euro Denominated Euribor Six Point Two Five Percentage As Of June Thirty Two Thousand Twelve
Senior Bank Debt (Secured):
Senior Bank Debt (Secured)	93,202	95,979
Senior Notes Unsecured Payable Semi Annually Us Dollar Denominated Interest Rate Fixed At Eight Point Eight Seven Five Percentage Matures June Of Two Thousand Eighteen
Senior Bank Debt (Secured):
Senior Notes (Unsecured), payable semi-annually-U.S. Dollar denominated interest rate fixed at 8.875%, matures June of 2018	236,410	236,410
Unsecured Interest Rate Fixed At Two Percentage To Two Point Five Percentage Euro Denominated Primarily Short Term
Other Long-Term Debt:
Unsecured, interest rate fixed at 1.31% to 3.40%, Yen denominated	133	135
Unsecured Interest Rate Fixed At One Point Three One Percentage To Three Point Four Zero Percentage Yen Denominated Primarily Short Term
Other Long-Term Debt:
Unsecured, interest rate fixed at 1.31% to 3.40%, Yen denominated		$ 0

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Comprehensive Income and Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2013

Equity [Abstract]

Components Of Comprehensive Income (Loss)

Comprehensive income (loss) for the three months ended March 31, 2013 and 2012 is as follows:

	Three Months Ended March 31,
	2013			2012
Net income (loss)	$	5,485		$	(7,522	)
Foreign currency translation adjustments	(4,392		)	4,626
Pension liability changes under Topic 715	1,602			(488		)
Change in value of derivative instruments	32			(94		)
Comprehensive loss	$	2,727		$	(3,478	)

Components Of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	Foreign Currency Translation     Adjustment			Pension Liability Changes Under  Topic 715			Change in Value of Derivative Instruments			Accumulated    Other Comprehensive (Loss) Income
Balance at December 31, 2012	$	3,253		$	(44,502	)	$	(644	)	$	(41,893	)
Other comprehensive (loss) income before reclassifications	(4,392		)	1,027			—			(3,365		)
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	—			575			—			575
Amortization of interest expense, net of taxes of $0	—			—			32			32
Net current period other comprehensive (loss) income	(4,392		)	1,602			32			(2,758		)
Balance at March 31, 2013	$	(1,139	)	$	(42,900	)	$	(612	)	$	(44,651	)

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Long-term Debt - Schedule Of Long-Term Debt (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
First Lien Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Twelve
Debt Disclosure [Line Items]
LIBOR rate, minimum	1.25%
Interest rate Percentage above LIBOR rate	5.00%
Debt instrument interest rate	6.25%
First Lien Debt Payable Quarterly Euro Denominated Euribor Six Point Two Five Percentage As Of June Thirty Two Thousand Twelve
Debt Disclosure [Line Items]
LIBOR rate, minimum	1.25%
Interest rate Percentage above LIBOR rate	5.00%
Debt instrument interest rate	6.25%
Senior Notes Unsecured Payable Semi Annually Us Dollar Denominated Interest Rate Fixed At Eight Point Eight Seven Five Percentage Matures June Of Two Thousand Eighteen
Debt Disclosure [Line Items]
Debt instrument fixed interest rate	8.875%	8.875%
Debt instrument maturity	Jun. 01, 2018
Unsecured Interest Rate Fixed At Two Percentage To Two Point Five Percentage Euro Denominated Primarily Short Term
Debt Disclosure [Line Items]
Debt instrument fixed interest rate	2.00%	2.00%
Unsecured Interest Rate Fixed At One Point Three One Percentage To Three Point Four Zero Percentage Yen Denominated Primarily Short Term | Minimum
Debt Disclosure [Line Items]
Debt instrument fixed interest rate	1.31%	1.31%
Unsecured Interest Rate Fixed At One Point Three One Percentage To Three Point Four Zero Percentage Yen Denominated Primarily Short Term | Maximum
Debt Disclosure [Line Items]
Debt instrument fixed interest rate	3.40%	3.40%

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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Summarized Financial Information

Summarized financial information for the Company’s reportable segments is presented in the tables that follow for the three months ended March 31, 2013 and 2012.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended March 31, 2013:
Net Sales	$	89,937	$	49,868	$	—		$	139,805
Segment Earnings (Loss)	18,062		14,070		(2,989		)
Three Months Ended March 31, 2012:
Net Sales	$	88,683	$	45,681	$	—		$	134,364
Segment Earnings (Loss)	14,761		7,890		(3,831		)

Reconciliation of Segment Earnings (Loss) to Income Before Provision for Income Taxes

rovided below is a reconciliation of Segment earnings income (loss) to income (loss) before provision for income taxes for the three months ended March 31, 2013 and 2012, respectively.

	Three Months Ended March 31,
	2013			2012
Segment Earnings (Loss):
Clothing	$	18,062		$	14,761
Roll Covers	14,070			7,890
Corporate	(2,989		)	(3,831		)
Stock-based compensation	(295		)	(972		)
Idle facility asset impairment	(857		)	—
Non-recurring expenses related to CEO retirement	—			(801		)
Interest expense, net	(9,206		)	(9,598		)
Depreciation and amortization	(9,542		)	(10,340		)
Restructuring expense	(1,255		)	(3,974		)
Income (loss) before provision for income taxes	$	7,988		$	(6,865	)

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Derivatives and Hedging

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Derivatives and Hedging

As required by ASC Topic 815, Derivatives and Hedging (“Topic 815”), the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. From time to time, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known cash amounts, the value of which are determined by interest rates or foreign exchange rates.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate caps as part of its interest rate risk management strategy. Interest rate caps designated as cash flow hedges protect the Company from increases in interest rates above the strike rate of the interest rate cap. However, the Company’s financial statements are exposed to the effects of interest rate fluctuations below the strike rate negotiated in the interest rate cap agreements, which could have a material impact on its results of operations.

On August 8, 2011, the Company entered into two interest rate cap agreements with certain financial institutions, in notional amounts totaling $114,400, whereby the Company limits its variable interest rate exposure to the strike rate of the interest rate cap agreements. At March 31, 2013, the notional amount of these agreements was $90,720. Under the terms of the interest rate cap agreements, the Company will receive payments based on the spread in rates if the three-month LIBOR rate

increases above the negotiated cap rates of 3.0%. The interest rate caps are considered designated hedging instruments, classified as Level 2 in the fair value hierarchy. Changes in fair value will be deferred in accumulated other comprehensive loss and the cap purchase price will be reclassified from accumulated comprehensive loss into earnings as interest expense over the life of the agreements. The fair value of the interest rate caps was $10 at March 31, 2013 and $16 at December 31, 2012. These amounts are included in other assets in the Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012. Unrecognized losses of ($612) and ($644) were recorded in accumulated other comprehensive income (loss) at March 31, 2013 and December 31, 2012, respectively. The Company expects to reclassify $146 from other comprehensive income (loss) to interest expense over the next twelve months.

Non-designated Hedges of Foreign Exchange Risk

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to foreign exchange rates, but do not meet the strict hedge accounting requirements of Topic 815. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly to earnings.

The Company, from time to time, may enter into foreign exchange forward contracts to fix currencies at specified rates based on expected future cash flows to protect against the fluctuations in cash flows resulting from sales denominated in foreign currencies. Additionally, to manage its exposure to fluctuations in foreign currency on intercompany balances and certain purchase commitments, the Company from time to time may use foreign exchange forward contracts.

As of March 31, 2013 and December 31, 2012, the Company had outstanding derivatives that were not designated as hedges in qualifying hedging relationships. The value of these contracts is recognized at fair value based on market exchange forward rates and is recorded in other assets or other liabilities on the Consolidated Balance Sheets. The fair value of these derivatives at March 31, 2013 and December 31, 2012 was ($16) and $357, respectively. The change in fair value of these contracts is included in foreign exchange gain and was $103 and $451 for the three months ended March 31, 2013 and 2012, respectively.

The following represents the notional amounts of foreign exchange forward contracts at March 31, 2013:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	24,344	$	(10,191	)

Fair Value of Derivatives Under ASC Topic 820

ASC Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs including fair value of investments that do not have the ability to redeem at net asset value as of the measurement date, or during the first quarter following the measurement date. The derivative assets or liabilities are typically based on an entity’s own assumptions, as there is little, if any, market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and the Company considers factors specific to the asset or liability. The Company determined that its derivative valuations, which are based on market exchange forward rates, fall within Level 2 of the fair value hierarchy.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares outstanding	15,370,146	15,309,717

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Description of Business and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Inventories, net

Inventories, net

Inventories are generally valued at the lower of cost or market using the first-in, first-out (FIFO) method. Raw materials are valued principally on a weighted average cost basis. The Company’s work in process and finished goods are specifically identified and valued based on actual inputs to production. Provisions are recorded as appropriate to write-down obsolete and excess inventory to estimated net realizable value. The process for evaluating obsolete and excess inventory often requires management to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business, while considering the general aging of inventory and factoring in any new business conditions.

Goodwill

Goodwill

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Intangible Assets (“Topic 350”). Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized, but instead, must be tested for impairment at least annually or whenever events or business conditions warrant. During the three months ended March 31, 2013, the Company evaluated events and business conditions to determine if a test for an impairment of goodwill was warranted. No such events or business conditions took place during this period, therefore no test was determined to be warranted at March 31, 2013.

Warranties

Warranties

The Company offers warranties on certain products that it sells. The specific terms and conditions of these warranties vary depending on the product sold, the country in which the product is sold and arrangements with the customer. The Company estimates the costs that may be incurred under its warranties and records a liability for such costs. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction. The Company periodically assesses the adequacy of its recorded warranty claims and adjusts the amounts as necessary.

Net (Loss) Income Per Common Share

Net Income (Loss) Per Common Share

Net income (loss) per common share has been computed and presented pursuant to the provisions of ASC Topic 260, Earnings per Share (“Topic 260”). Net income (loss) per share is based on the weighted-average number of shares outstanding during the period.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 01, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	XRM
Entity Registrant Name	XERIUM TECHNOLOGIES INC
Entity Central Index Key	0001287151
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,370,146

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Description of Business and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of Inventories

The components of inventories, net of allowances are as follows at:

	March 31, 2013		December 31, 2012
Raw materials	$	17,330	$	16,924
Work in process	23,790		23,681
Finished goods (includes consigned inventory of $8,754 in 2013 and $8,726 in 2012)	34,145		36,786
	$	75,265	$	77,391

Changes In Warranty Liability

The table below represents the changes in the Company’s warranty liability for the three months ended March 31, 2013:

	Balance at December 31, 2012		Charged to Revenue or Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Balance at March 31, 2013
For the three months ended March 31, 2013	$	1,848	$	514	$	(35	)	$	(307	)	$	2,020

Computation of Basic and Diluted Weighted-Average Shares

The following table sets forth the computation of basic and diluted weighted-average shares:

	Three Months Ended March 31,
	2013	2012
Weighted-average common shares outstanding–basic	15,312,523	15,162,183
Dilutive effect of stock-based compensation awards outstanding	68,681	—
Weighted-average common shares outstanding–diluted	15,381,204	15,162,183

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Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Statement [Abstract]
Net sales	$ 139,805	$ 134,364
Costs and expenses:
Cost of products sold	85,298	87,921
Selling	18,521	19,488
General and administrative	14,634	17,825
Research and development	2,654	2,962
Restructuring and impairment	1,255	3,974
Operating Costs and Expenses, Total	122,362	132,170
Income from operations	17,443	2,194
Interest expense, net	(9,206)	(9,598)
Foreign exchange (loss) gain	(249)	539
Income (loss) before provision for income taxes	7,988	(6,865)
Provision for income taxes	(2,503)	(657)
Net income (loss)	5,485	(7,522)
Comprehensive income (loss)	$ 2,727	$ (3,478)
Net income (loss) per share:
Basic (in dollars per share)	$ 0.36	$ (0.50)
Diluted (in dollars per share)	$ 0.36	$ (0.50)
Shares used in computing net income (loss) per share:
Basic (in shares)	15,312,523	15,162,183
Diluted (in shares)	15,381,204	15,162,183

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Restructuring Expense

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

Restructuring Expense

Restructuring and Impairment Expense

During the three months ended March 31, 2013, the Company recorded restructuring expenses of approximately $1,255. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of a roll covering facility in France and the closure of clothing facility in Argentina. During the three months ended March 31, 2012, the Company recorded restructuring expenses of approximately $3,974. These charges were primarily related to $3.6 million of costs to terminate a sales agency arrangement in Europe.

The following table sets forth the significant components and activity under restructuring programs for the three months ended March 31, 2013 and 2012:

	Balance at December 31,  2012		Charges (1)		Currency     Effects			Cash Payments			Balance at     March 31, 2013
Severance	$	15,577	$	775	$	(451	)	$	(4,109	)	$	11,792
Facility costs and other	335		410		(10		)	(570		)	165
Total	$	15,912	$	1,185	$	(461	)	$	(4,679	)	$	11,957

	Balance at December 31,  2011		Charges		Currency     Effects			Cash Payments			Balance at     March 31, 2012
Severance	$	800	$	129	$	13		$	(213	)	$	729
Facility costs and other	452		3,845		(73		)	(84		)	4,140
Total	$	1,252	$	3,974	$	(60	)	$	(297	)	$	4,869

(1) Amount excludes $0.1 impairment charges.

Restructuring and impairment expense by segment, which is not included in Segment Earnings (Loss) in Note 8, is as follows:

	Three Months Ended              March 31,
	2013		2012
Clothing	$	409	$	3,759
Roll Covers	727		179
Corporate	119		36
Total	$	1,255	$	3,974

During the three months ended March 31, 2013, we recorded restructuring expenses of approximately $1,255. These included charges relating to the reduction of base costs via headcount reductions, the closure of a roll covering facility in France and the closure of clothing facility in Argentina.

During the three months ended March 31, 2012, we recorded restructuring expenses of approximately $3,974 primarily related to $3.6 million of costs to terminate a sales agency arrangement in Europe.

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Comprehensive Income and Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2013

Equity [Abstract]

Comprehensive (Loss) Income and Accumulated Other Comprehensive Loss

Comprehensive Income (loss) and Accumulated Other Comprehensive Loss

Comprehensive income (loss) for the three months ended March 31, 2013 and 2012 is as follows:

	Three Months Ended March 31,
	2013			2012
Net income (loss)	$	5,485		$	(7,522	)
Foreign currency translation adjustments	(4,392		)	4,626
Pension liability changes under Topic 715	1,602			(488		)
Change in value of derivative instruments	32			(94		)
Comprehensive loss	$	2,727		$	(3,478	)

The components of accumulated other comprehensive loss are as follows:

	Foreign Currency Translation     Adjustment			Pension Liability Changes Under  Topic 715			Change in Value of Derivative Instruments			Accumulated    Other Comprehensive (Loss) Income
Balance at December 31, 2012	$	3,253		$	(44,502	)	$	(644	)	$	(41,893	)
Other comprehensive (loss) income before reclassifications	(4,392		)	1,027			—			(3,365		)
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	—			575			—			575
Amortization of interest expense, net of taxes of $0	—			—			32			32
Net current period other comprehensive (loss) income	(4,392		)	1,602			32			(2,758		)
Balance at March 31, 2013	$	(1,139	)	$	(42,900	)	$	(612	)	$	(44,651	)

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Restructuring Expense (Tables)

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

Restructuring Programs

The following table sets forth the significant components and activity under restructuring programs for the three months ended March 31, 2013 and 2012:

	Balance at December 31,  2012		Charges (1)		Currency     Effects			Cash Payments			Balance at     March 31, 2013
Severance	$	15,577	$	775	$	(451	)	$	(4,109	)	$	11,792
Facility costs and other	335		410		(10		)	(570		)	165
Total	$	15,912	$	1,185	$	(461	)	$	(4,679	)	$	11,957

	Balance at December 31,  2011		Charges		Currency     Effects			Cash Payments			Balance at     March 31, 2012
Severance	$	800	$	129	$	13		$	(213	)	$	729
Facility costs and other	452		3,845		(73		)	(84		)	4,140
Total	$	1,252	$	3,974	$	(60	)	$	(297	)	$	4,869

Restructuring And Impairments Expense By Segment

expense by segment, which is not included in Segment Earnings (Loss) in Note 8, is as follows:

	Three Months Ended              March 31,
	2013		2012
Clothing	$	409	$	3,759
Roll Covers	727		179
Corporate	119		36
Total	$	1,255	$	3,974

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Derivatives and Hedging (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional Amounts Sold and Purchased

The following represents the notional amounts of foreign exchange forward contracts at March 31, 2013:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	24,344	$	(10,191	)

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Stock-Based Compensation and Stockholders' Deficit

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation and Stockholders' Equity

Stock-Based Compensation and Stockholders’ Deficit

The Company records stock-based compensation expense in accordance with ASC Topic 718, Accounting for Stock Compensation and has used the straight-line attribution method to recognize expense for time-based restricted stock units ("RSUs") and deferred stock units ("DSUs"). The Company recorded stock-based compensation expense during the three months ended March 31, 2013 and March 31, 2012 as follows:

	Three Months Ended March 31,
	2013		2012
RSU and DSU Awards (1)	$	295	$	409
Management Incentive/Performance Award Programs (2)	—		563
Total	$	295	$	972

(1) Related to RSUs and DSUs awarded to certain employees and non-employee directors.

(2) In 2012, the amount represents the value of stock awards granted under the 2012 Management Incentive Compensation Program. Subsequent to March 31, 2012, management determined that the minimum Adjusted EBITDA target level was not met, and reversed the compensation expense recorded for the three months ended March 31, 2012. In March of 2013, the Compensation Committee approved the 2013 Management Incentive Compensation Award Program. This award will be paying out entirely in cash, and therefore, the expense is no longer considered stock compensation.

Summary of Activity under the Long-Term Incentive Plans

On September 22, 2010, the Board approved the Company’s 2010 Long-Term Incentive Plan (the “2010 LTIP”) under the 2010 Equity Incentive Plan (the “2010 Plan”). Awards under the 2010 LTIP are both time-based and performance-based. Awards will be paid in the form of RSUs or shares of common stock of the Company. Time-based awards under the 2010 LTIP were approved in the form of 131,010 time-based RSUs granted on October 29, 2010 under the Company’s 2010 Plan. As of March 31, 2013, all of the time-based RSUs had vested in accordance with the 2010 LTIP and were converted to common stock. These were converted into shares of common stock when they vested. Performance-based awards under the 2010 LTIP in the amount of 20,709 vested on December 31, 2012, upon meeting various criteria, as included in the Company’s 2012 Annual Report on Form 10-K, and were converted into common stock, net of applicable tax withholdings.

On May 8, 2012, the Board approved the 2012 Executive Long-Term Incentive Plan (the “2012 Executive LTIP”) under the 2010 Plan. Awards under the 2012 Executive LTIP are both time-based and performance-based. A specific target share award is set for each participant in the 2012 Executive LTIP. Awards will be paid in the form of RSUs or shares of common stock of the Company. Time-based awards, or 50% of the total target award, were granted in the form of 54,750 time-based RSUs under the Company’s 2010 Plan. As of March 31, 2013, 16,582 time-based RSUs vested in accordance with the 2012 Executive LTIP and were converted to common stock, net of applicable tax withholdings. The remaining time-based RSUs will vest in equal installments on March 31, 2014, and March 31, 2015. These will be converted into shares of common stock as they vest. Performance-based awards, which constitute 50% of the total award, will be determined based on the Company’s performance against a three-year cumulative Adjusted EBITDA metric, adjusted for currency fluctuations during the term of the 2012 – 2014 Executive LTIP. The performance-based awards will convert into shares of the Company’s common stock and be paid after the close of the three-year performance period. The amount of the payment will be based on a sliding scale ranging from 50% if the metric is achieved at 85% of the target up to 200% if the metric is achieved at or above 115% of the target.

Other Stock Compensation Plans

On August 15, 2012, in connection with the previously announced anticipated retirement of Stephen R. Light, the Board of Directors of the Company appointed Harold C. Bevis to the position of President and Chief Executive Officer, effective immediately, and Mr. Light notified the Company of his resignation, effective as of that date, as the Company's Chairman, President and Chief Executive Officer. The Company granted Mr. Bevis a sign-on award of 204,208 restricted stock units and options to acquire 781,701 shares of the Company's Common Stock, par value $0.001 per share. Both the restricted stock units and the options will vest over a three year period, beginning on the second anniversary of the August 15, 2012 grant date. The options will have a 10-year term and an exercise price of $4.00 per share, the August 15, 2012 closing price of the Company's common stock on the New York Stock Exchange. In addition, on August 15, 2012, the Company accelerated the vesting of Mr. Light's remaining 50,000 restricted stock units, issuing 27,900 shares of common stock, upon vesting, net of certain tax withholdings.

Directors’ Deferred Stock Unit Plan

On March 15, 2011, the Board approved a new compensation plan for non-management directors (the “2011 DSU Plan”). Under this plan, each director is to receive an annual retainer of $112, to be paid on a quarterly basis in arrears beginning with the quarter ended June 30, 2011. Half of the annual retainer is payable in deferred stock units (“DSUs”), with the remaining half payable in cash. The non-management directors were awarded an aggregate of 15,444 DSUs under the 2011 DSU Plan for service during the quarter ended March 31, 2013. In addition, in accordance with the 2011 DSU Plan, 10,296 DSUs were settled in Common Stock during the quarter ended March 31, 2013.

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Business Segment Information

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company is a global manufacturer and supplier of consumable products used primarily in the production of paper and is organized into two reportable segments: Clothing and Roll Covers. The Clothing segment represents the manufacture and sale of synthetic textile belts used to transport paper along the length of papermaking machines. The Roll Covers segment primarily represents the manufacture and refurbishment of covers used on the steel rolls of papermaking machines. The Company manages each of these operating segments separately.

Management evaluates segment performance based on earnings before interest, taxes, depreciation and amortization and before allocation of corporate charges. Such measure is then adjusted to exclude items that are of an unusual nature and are not used in measuring segment performance or are not segment specific (“Segment Earnings (Loss)”). The accounting policies of these segments are the same as those for the Company as a whole. Inter-segment net sales and inter-segment eliminations are not material for any of the periods presented.

Summarized financial information for the Company’s reportable segments is presented in the tables that follow for the three months ended March 31, 2013 and 2012.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended March 31, 2013:
Net Sales	$	89,937	$	49,868	$	—		$	139,805
Segment Earnings (Loss)	18,062		14,070		(2,989		)
Three Months Ended March 31, 2012:
Net Sales	$	88,683	$	45,681	$	—		$	134,364
Segment Earnings (Loss)	14,761		7,890		(3,831		)

Provided below is a reconciliation of Segment earnings income (loss) to income (loss) before provision for income taxes for the three months ended March 31, 2013 and 2012, respectively.

	Three Months Ended March 31,
	2013			2012
Segment Earnings (Loss):
Clothing	$	18,062		$	14,761
Roll Covers	14,070			7,890
Corporate	(2,989		)	(3,831		)
Stock-based compensation	(295		)	(972		)
Idle facility asset impairment	(857		)	—
Non-recurring expenses related to CEO retirement	—			(801		)
Interest expense, net	(9,206		)	(9,598		)
Depreciation and amortization	(9,542		)	(10,340		)
Restructuring expense	(1,255		)	(3,974		)
Income (loss) before provision for income taxes	$	7,988		$	(6,865	)

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is involved in various legal matters which have arisen in the ordinary course of business as a result of various immaterial labor claims, taxing authority reviews and other routine legal matters. As of March 31, 2013, the Company accrued an immaterial amount in its financial statements for these matters for which the Company believed the possibility of loss was probable and was able to estimate the damages. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flow. The Company believes that any additional liability in excess of amounts provided which may result from the resolution of legal matters will not have a material adverse effect on the financial condition, liquidity or cash flow of the Company.

See Note 4 for a discussion of Xerium Brazil’s proceeding with the FRD.

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Supplemental Guarantor Financial Information

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Guarantor Financial Information

1. Supplemental Guarantor Financial Information

On May 26, 2011, the Company closed on the sale of its Notes. The Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed on a senior unsecured basis by all of the domestic wholly owned subsidiaries of the Company (the “Guarantors”). In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act of 1933, the following condensed consolidating financial statements present the financial position, results of operations and cash flows of Xerium Technologies, Inc. (referred to as “Parent” for the purpose of this note only) on a stand-alone parent-only basis, the Guarantors on a Guarantors-only basis, the combined non-Guarantor subsidiaries and elimination entries necessary to arrive at the information for the Parent, the Guarantors and non-Guarantor subsidiaries on a consolidated basis.

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	8,900		$	(11	)	$	31,874		$	—		$	40,763
Accounts receivable, net	—			24,612			67,748			—			92,360
Intercompany receivables	(103,260		)	109,444			(6,184		)	—			—
Inventories, net	—			15,144			60,971			(850		)	75,265
Prepaid expenses	156			2,332			6,372			—			8,860
Other current assets	1,975			3,004			10,577			—			15,556
Total current assets	(92,229		)	154,525			171,358			(850		)	232,804
Property and equipment, net	2,166			61,592			236,095			—			299,853
Investments	610,592			142,819			—			(753,411		)	—
Goodwill	—			17,737			41,084			—			58,821
Intangible assets	9,518			4,223			3,566			—			17,307
Other assets	41			—			8,054			—			8,095
Total assets	$	530,088		$	380,896		$	460,157		$	(754,261	)	$	616,880
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	712		$	8,845		$	25,864		$	—		$	35,421
Accrued expenses	10,952			6,840			45,995			—			63,787
Current notes payable	—			—			7,705						7,705
Current maturities of long-term debt	1,250			—			1,250			—			2,500
Total current liabilities	12,914			15,685			80,814			—			109,413
Long-term debt, net of current maturities	339,404			—			92,085			—			431,489
Deferred and long-term taxes	—			2,335			13,316			—			15,651
Pension, other post-retirement and post-employment obligations	21,116			1,068			58,919			—			81,103
Other long-term liabilities	51			—			5,211			—			5,262
Intercompany loans	237,552			(361,232		)	123,680			—			—
Total stockholders’ (deficit) equity	(80,949		)	723,040			86,132			(754,261		)	(26,038		)
Total liabilities and stockholders’ equity	$	530,088		$	380,896		$	460,157		$	(754,261	)	$	616,880

Xerium Technologies, Inc.

Consolidating Balance Sheet

At December 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	6,471		$	36		$	28,270		$	—		$	34,777
Accounts receivable, net	—			20,964			63,492			—			84,456
Intercompany receivables	(102,407		)	107,944			(5,537		)	—			—
Inventories, net	—			15,672			62,569			(850		)	77,391
Prepaid expenses	159			1,693			7,534			—			9,386
Other current assets	—			2,970			11,869			—			14,839
Total current assets	(95,777		)	149,279			168,197			(850		)	220,849
Property and equipment, net	734			62,157			245,915			—			308,806
Investments	596,891			149,134			—			(746,025		)	—
Goodwill	—			17,737			43,390			—			61,127
Intangible assets	10,034			4,776			3,868			—			18,678
Other assets	44			—			9,339			—			9,383
Total assets	$	511,926		$	383,083		$	470,709		$	(746,875	)	$	618,843
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	502		$	8,629		$	27,753		$	—		$	36,884
Accrued expenses	6,005			6,579			47,173			—			59,757
Current notes payable	—			—			7,911			—			7,911
Current maturities of long-term debt	1,250			—			1,147			—			2,397
Total current liabilities	7,757			15,208			83,984			—			106,949
Long-term debt, net of current maturities	339,717			—			94,967			—			434,684
Deferred and long-term taxes	—			2,335			14,247			—			16,582
Pension, other post-retirement and post-employment obligations	21,677			1,000			61,272			—			83,949
Other long-term liabilities	31			—			5,709			—			5,740
Intercompany loans	229,239			(358,187		)	128,948			—			—
Total stockholders’ (deficit) equity	(86,495		)	722,727			81,582			(746,875		)	(29,061		)
Total liabilities and stockholders’ equity	$	511,926		$	383,083		$	470,709		$	(746,875	)	$	618,843

Xerium Technologies, Inc.

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)-(Unaudited)

For the three months ended March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	46,115		$	105,399		$	(11,709	)	$	139,805
Costs and expenses:
Cost of products sold	(450		)	30,863			66,594			(11,709		)	85,298
Selling	—			5,218			13,303			—			18,521
General and administrative	1,982			807			11,845			—			14,634
Research and development	—			2,012			642			—			2,654
Restructuring and impairment	119			238			898			—			1,255
	1,651			39,138			93,282			(11,709		)	122,362
(Loss) income from operations	(1,651		)	6,977			12,117			—			17,443
Interest (expense) income, net	(6,704		)	1,406			(3,908		)	—			(9,206		)
Foreign exchange gain (loss)	183			(13		)	(419		)	—			(249		)
Equity in subsidiaries income	13,704			4,754			—			(18,458		)	—
Dividend income	—			1,555			—			(1,555		)	—
Income (loss) before provision for income taxes	5,532			14,679			7,790			(20,013		)	7,988
Provision for income taxes	(47		)	106			(2,562		)	—			(2,503		)
Net income (loss)	$	5,485		$	14,785		$	5,228		$	(20,013	)	$	5,485
Comprehensive income (loss)	$	5,254		$	14,562		$	2,924		$	(20,013	)	$	2,727

Xerium Technologies, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income-(Unaudited)

For the three months ended March 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	44,063		$	102,676		$	(12,375	)	$	134,364
Costs and expenses:
Cost of products sold	(472		)	33,415			67,499			(12,521		)	87,921
Selling	—			5,723			13,765			—			19,488
General and administrative	4,113			1,638			12,074			—			17,825
Research and development	—			2,070			892			—			2,962
Restructuring and impairment	36			140			3,798			—			3,974
	3,677			42,986			98,028			(12,521		)	132,170
(Loss) income from operations	(3,677		)	1,077			4,648			146			2,194
Interest (expense) income, net	(7,355		)	1,779			(4,022		)	—			(9,598		)
Foreign exchange (loss) gain	(154		)	(6		)	699			—			539
Equity in subsidiaries income	3,693			(690		)	—			(3,003		)	—
(Loss) income before provision for income taxes	(7,493		)	2,160			1,325			(2,857		)	(6,865		)
Provision for income taxes	(29		)	(40		)	(588		)	—			(657		)
Net (loss) income	$	(7,522	)	$	2,120		$	737		$	(2,857	)	$	(7,522	)
Comprehensive (loss) income	$	(8,168	)	$	2,563		$	4,984		$	(2,857	)	$	(3,478	)

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net income (loss)	$	5,485		$	14,785		$	5,228		$	(20,013	)	$	5,485
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	295			—			—			—			295
Depreciation	33			1,903			7,030			—			8,966
Amortization of intangibles	—			553			23			—			576
Deferred financing cost amortization	516			—			193			—			709
Foreign exchange gain on revaluation of debt	—			—			(118		)	—			(118		)
Deferred taxes	—			—			282			—			282
Asset impairment	208			—			720						928
Loss (gain) on disposition of property and equipment	1			3			(14		)	—			(10		)
Provision for doubtful accounts	—			(53		)	88			—			35
Undistributed equity in (earnings) loss of subsidiaries	(13,704		)	(4,754		)	—			18,458			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	—			(3,595		)	(5,632		)	—			(9,227		)
Inventories	—			529			399			—			928
Prepaid expenses	3			(639		)	1,088			—			452
Other current assets	(2,182		)	(35		)	254			—			(1,963		)
Accounts payable and accrued expenses	5,158			(234		)	(3,533		)	1,555			2,946
Deferred and other long-term liabilities	42			68			(111		)	—			(1		)
Intercompany loans	854			(1,496		)	642			—			—
Net cash (used in) provided by operating activities	(3,291		)	7,035			6,539			—			10,283
Investing activities
Capital expenditures, gross	(1,466		)	(632		)	(1,615		)	—			(3,713		)
Proceeds from disposals of property and equipment	—			—			317			—			317
Net cash (used in) provided by investing activities	(1,466		)	(632		)	(1,298		)	—			(3,396		)
Financing activities
Principal payments on debt	(313		)	—			(290		)	—			(603		)
Intercompany loans	7,499			(6,449		)	(1,050		)	—			—
Net cash provided by (used in) financing activities	7,186			(6,449		)	(1,340		)	—			(603		)
Effect of exchange rate changes on cash flows	—			(1		)	(297		)	—			(298		)
Net increase (decrease) in cash	2,429			(47		)	3,604			—			5,986
Cash and cash equivalents at beginning of period	6,471			36			28,270			—			34,777
Cash and cash equivalents at end of period	$	8,900		$	(11	)	$	31,874		$	—		$	40,763

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
Operating activities
Net (loss) income	$	(7,522	)	$	2,120		$	737		$	(2,857	)	$	(7,522	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation	972			—			—			—			972
Depreciation	55			1,968			7,741			—			9,764
Amortization of intangibles	—			553			23			—			576
Deferred financing cost amortization	696			—			358			—			1,054
Foreign exchange loss on revaluation of debt	—			—			8			—			8
Deferred taxes	—			—			(182		)	—			(182		)
Gain on disposition of property and equipment	—			(4		)	(442		)	—			(446		)
Provision for doubtful accounts	—			(76		)	217			—			141
Undistributed equity in (earnings) loss of subsidiaries	(3,693		)	690			—			3,003			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(1		)	428			2,620			—			3,047
Inventories	—			368			(2,586		)	(146		)	(2,364		)
Prepaid expenses	58			(283		)	234			—			9
Other current assets	—			1,079			(250		)	—			829
Accounts payable and accrued expenses	5,476			(1,305		)	270			—			4,441
Deferred and other long-term liabilities	73			100			(348		)	—			(175		)
Intercompany loans	(969		)	593			376			—			—
Net cash (used in) provided by operating activities	(4,855		)	6,231			8,776			—			10,152
Investing activities
Capital expenditures, gross	—			(563		)	(2,688		)	—			(3,251		)
Intercompany property and equipment transfers, net	343			(339		)	(4		)	—			—
Proceeds from disposals of property and equipment	—			4			699			—			703
Net cash provided by (used in) investing activities	343			(898		)	(1,993		)	—			(2,548		)
Financing activities
Principal payments on debt	(6,541		)	—			(6,638		)	—			(13,179		)
Payment of deferred financing fees	(61		)	—			—			—			(61		)
Intercompany loans	7,376			(5,578		)	(1,798		)	—			—
Net cash provided by (used in) financing activities	774			(5,578		)	(8,436		)	—			(13,240		)
Effect of exchange rate changes on cash flows	—			5			375			—			380
Net (decrease) increase in cash	(3,738		)	(240		)	(1,278		)	—			(5,256		)
Cash and cash equivalents at beginning of period	11,548			280			31,738			—			43,566
Cash and cash equivalents at end of period	$	7,810		$	40		$	30,460		$	—		$	38,310

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Derivatives and Hedging - Notional Amounts of Outstanding Foreign Exchange Forward Contracts (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Derivatives Sold
Derivative [Line Items]
Non-designated hedges of foreign exchange risk	$ 24,344
Derivatives Purchased
Derivative [Line Items]
Non-designated hedges of foreign exchange risk	$ 10,191

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Supplemental Guarantor Financial Information - Consolidating Statement Of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating activities
Net (loss) income	$ 5,485	$ (7,522)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	295	972
Depreciation	8,966	9,764
Amortization of intangibles	576	576
Deferred financing cost amortization	709	1,054
Unrealized foreign exchange loss on revaluation of debt	(118)	8
Deferred taxes	282	(182)
Asset impairment	928	0
Gain on disposition of property and equipment	(10)	(446)
Provision for doubtful accounts	35	141
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(9,227)	3,047
Inventories	928	(2,364)
Prepaid expenses	452	9
Other current assets	(1,963)	829
Accounts payable and accrued expenses	2,946	4,441
Deferred and other long-term liabilities	(1)	(175)
Net cash provided by operating activities	10,283	10,152
Investing activities
Capital expenditures, gross	(3,713)	(3,251)
Proceeds from disposals of property and equipment	317	703
Net cash used in investing activities	(3,396)	(2,548)
Financing activities
Principal payments on debt	(603)	(13,179)
Payment of deferred financing fees	0	(61)
Net cash used in financing activities	(603)	(13,240)
Effect of exchange rate changes on cash flows	(298)	380
Net increase (decrease) in cash	5,986	(5,256)
Cash and cash equivalents at beginning of period	34,777	43,566
Cash and cash equivalents at end of period	40,763	38,310
Parent
Operating activities
Net (loss) income	5,485	(7,522)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	295	972
Depreciation	33	55
Amortization of intangibles	0	0
Deferred financing cost amortization	516	696
Unrealized foreign exchange loss on revaluation of debt	0	0
Deferred taxes	0	0
Asset impairment	208
Gain on disposition of property and equipment	1	0
Provision for doubtful accounts	0	0
Undistributed equity in (earnings) loss of subsidiaries	(13,704)	(3,693)
Change in assets and liabilities which provided (used) cash:
Accounts receivable	0	(1)
Inventories	0	0
Prepaid expenses	3	58
Other current assets	(2,182)	0
Accounts payable and accrued expenses	5,158	5,476
Deferred and other long-term liabilities	42	73
Intercompany loans	854	(969)
Net cash provided by operating activities	(3,291)	(4,855)
Investing activities
Capital expenditures, gross	(1,466)	0
Intercompany property and equipment transfers, net		343
Proceeds from disposals of property and equipment	0	0
Net cash used in investing activities	(1,466)	343
Financing activities
Principal payments on debt	(313)	(6,541)
Payment of deferred financing fees		(61)
Intercompany loans	7,499	7,376
Net cash used in financing activities	7,186	774
Effect of exchange rate changes on cash flows	0	0
Net increase (decrease) in cash	2,429	(3,738)
Cash and cash equivalents at beginning of period	6,471	11,548
Cash and cash equivalents at end of period	8,900	7,810
Total Guarantors
Operating activities
Net (loss) income	14,785	2,120
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	0	0
Depreciation	1,903	1,968
Amortization of intangibles	553	553
Deferred financing cost amortization	0	0
Unrealized foreign exchange loss on revaluation of debt	0	0
Deferred taxes	0	0
Asset impairment	0
Gain on disposition of property and equipment	3	(4)
Provision for doubtful accounts	(53)	(76)
Undistributed equity in (earnings) loss of subsidiaries	(4,754)	690
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(3,595)	428
Inventories	529	368
Prepaid expenses	(639)	(283)
Other current assets	(35)	1,079
Accounts payable and accrued expenses	(234)	(1,305)
Deferred and other long-term liabilities	68	100
Intercompany loans	(1,496)	593
Net cash provided by operating activities	7,035	6,231
Investing activities
Capital expenditures, gross	(632)	(563)
Intercompany property and equipment transfers, net		(339)
Proceeds from disposals of property and equipment	0	4
Net cash used in investing activities	(632)	(898)
Financing activities
Principal payments on debt	0	0
Payment of deferred financing fees		0
Intercompany loans	(6,449)	(5,578)
Net cash used in financing activities	(6,449)	(5,578)
Effect of exchange rate changes on cash flows	(1)	5
Net increase (decrease) in cash	(47)	(240)
Cash and cash equivalents at beginning of period	36	280
Cash and cash equivalents at end of period	(11)	40
Total Non-Guarantors
Operating activities
Net (loss) income	5,228	737
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	0	0
Depreciation	7,030	7,741
Amortization of intangibles	23	23
Deferred financing cost amortization	193	358
Unrealized foreign exchange loss on revaluation of debt	(118)	8
Deferred taxes	282	(182)
Asset impairment	720
Gain on disposition of property and equipment	(14)	(442)
Provision for doubtful accounts	88	217
Undistributed equity in (earnings) loss of subsidiaries	0	0
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(5,632)	2,620
Inventories	399	(2,586)
Prepaid expenses	1,088	234
Other current assets	254	(250)
Accounts payable and accrued expenses	(3,533)	270
Deferred and other long-term liabilities	(111)	(348)
Intercompany loans	642	376
Net cash provided by operating activities	6,539	8,776
Investing activities
Capital expenditures, gross	(1,615)	(2,688)
Intercompany property and equipment transfers, net		(4)
Proceeds from disposals of property and equipment	317	699
Net cash used in investing activities	(1,298)	(1,993)
Financing activities
Principal payments on debt	(290)	(6,638)
Payment of deferred financing fees		0
Intercompany loans	(1,050)	(1,798)
Net cash used in financing activities	(1,340)	(8,436)
Effect of exchange rate changes on cash flows	(297)	375
Net increase (decrease) in cash	3,604	(1,278)
Cash and cash equivalents at beginning of period	28,270	31,738
Cash and cash equivalents at end of period	31,874	30,460
Other Eliminations
Operating activities
Net (loss) income	(20,013)	(2,857)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	0	0
Depreciation	0	0
Amortization of intangibles	0	0
Deferred financing cost amortization	0	0
Unrealized foreign exchange loss on revaluation of debt	0	0
Deferred taxes	0	0
Gain on disposition of property and equipment	0	0
Provision for doubtful accounts	0	0
Undistributed equity in (earnings) loss of subsidiaries	18,458	3,003
Change in assets and liabilities which provided (used) cash:
Accounts receivable	0	0
Inventories	0	(146)
Prepaid expenses	0	0
Other current assets	0	0
Accounts payable and accrued expenses	1,555	0
Deferred and other long-term liabilities	0	0
Intercompany loans	0	0
Net cash provided by operating activities	0	0
Investing activities
Capital expenditures, gross	0	0
Intercompany property and equipment transfers, net		0
Proceeds from disposals of property and equipment	0	0
Net cash used in investing activities	0	0
Financing activities
Principal payments on debt	0	0
Payment of deferred financing fees		0
Intercompany loans	0	0
Net cash used in financing activities	0	0
Effect of exchange rate changes on cash flows	0	0
Net increase (decrease) in cash	0	0
Cash and cash equivalents at beginning of period	0	0
Cash and cash equivalents at end of period	0	0
The Company
Operating activities
Net (loss) income	5,485	(7,522)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	295	972
Depreciation	8,966	9,764
Amortization of intangibles	576	576
Deferred financing cost amortization	709	1,054
Unrealized foreign exchange loss on revaluation of debt	(118)	8
Deferred taxes	282	(182)
Asset impairment	928
Gain on disposition of property and equipment	(10)	(446)
Provision for doubtful accounts	35	141
Undistributed equity in (earnings) loss of subsidiaries	0	0
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(9,227)	3,047
Inventories	928	(2,364)
Prepaid expenses	452	9
Other current assets	(1,963)	829
Accounts payable and accrued expenses	2,946	4,441
Deferred and other long-term liabilities	(1)	(175)
Intercompany loans	0	0
Net cash provided by operating activities	10,283	10,152
Investing activities
Capital expenditures, gross	(3,713)	(3,251)
Intercompany property and equipment transfers, net		0
Proceeds from disposals of property and equipment	317	703
Net cash used in investing activities	(3,396)	(2,548)
Financing activities
Principal payments on debt	(603)	(13,179)
Payment of deferred financing fees		(61)
Intercompany loans	0	0
Net cash used in financing activities	(603)	(13,240)
Effect of exchange rate changes on cash flows	(298)	380
Net increase (decrease) in cash	5,986	(5,256)
Cash and cash equivalents at beginning of period	34,777	43,566
Cash and cash equivalents at end of period	$ 40,763	$ 38,310

XML

Pensions, Other Post-retirement and Post-employment Benefits (Tables)

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Components Of Net Periodic Benefit Cost

As required by Topic 715, the following tables summarize the components of net periodic benefit cost:

Defined Benefit Plans

	Three Months Ended March 31,
	2013			2012
Service cost	$	973		$	885
Interest cost	1,560			1,830
Expected return on plan assets	(1,412		)	(1,373		)
Amortization of prior service cost	3			3
Amortization of net loss	572			633
Net periodic benefit cost	$	1,696		$	1,978

XML

Supplemental Guarantor Financial Information (Tables)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Balance Sheet

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	8,900		$	(11	)	$	31,874		$	—		$	40,763
Accounts receivable, net	—			24,612			67,748			—			92,360
Intercompany receivables	(103,260		)	109,444			(6,184		)	—			—
Inventories, net	—			15,144			60,971			(850		)	75,265
Prepaid expenses	156			2,332			6,372			—			8,860
Other current assets	1,975			3,004			10,577			—			15,556
Total current assets	(92,229		)	154,525			171,358			(850		)	232,804
Property and equipment, net	2,166			61,592			236,095			—			299,853
Investments	610,592			142,819			—			(753,411		)	—
Goodwill	—			17,737			41,084			—			58,821
Intangible assets	9,518			4,223			3,566			—			17,307
Other assets	41			—			8,054			—			8,095
Total assets	$	530,088		$	380,896		$	460,157		$	(754,261	)	$	616,880
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	712		$	8,845		$	25,864		$	—		$	35,421
Accrued expenses	10,952			6,840			45,995			—			63,787
Current notes payable	—			—			7,705						7,705
Current maturities of long-term debt	1,250			—			1,250			—			2,500
Total current liabilities	12,914			15,685			80,814			—			109,413
Long-term debt, net of current maturities	339,404			—			92,085			—			431,489
Deferred and long-term taxes	—			2,335			13,316			—			15,651
Pension, other post-retirement and post-employment obligations	21,116			1,068			58,919			—			81,103
Other long-term liabilities	51			—			5,211			—			5,262
Intercompany loans	237,552			(361,232		)	123,680			—			—
Total stockholders’ (deficit) equity	(80,949		)	723,040			86,132			(754,261		)	(26,038		)
Total liabilities and stockholders’ equity	$	530,088		$	380,896		$	460,157		$	(754,261	)	$	616,880

Xerium Technologies, Inc.

Consolidating Balance Sheet

At December 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	6,471		$	36		$	28,270		$	—		$	34,777
Accounts receivable, net	—			20,964			63,492			—			84,456
Intercompany receivables	(102,407		)	107,944			(5,537		)	—			—
Inventories, net	—			15,672			62,569			(850		)	77,391
Prepaid expenses	159			1,693			7,534			—			9,386
Other current assets	—			2,970			11,869			—			14,839
Total current assets	(95,777		)	149,279			168,197			(850		)	220,849
Property and equipment, net	734			62,157			245,915			—			308,806
Investments	596,891			149,134			—			(746,025		)	—
Goodwill	—			17,737			43,390			—			61,127
Intangible assets	10,034			4,776			3,868			—			18,678
Other assets	44			—			9,339			—			9,383
Total assets	$	511,926		$	383,083		$	470,709		$	(746,875	)	$	618,843
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	502		$	8,629		$	27,753		$	—		$	36,884
Accrued expenses	6,005			6,579			47,173			—			59,757
Current notes payable	—			—			7,911			—			7,911
Current maturities of long-term debt	1,250			—			1,147			—			2,397
Total current liabilities	7,757			15,208			83,984			—			106,949
Long-term debt, net of current maturities	339,717			—			94,967			—			434,684
Deferred and long-term taxes	—			2,335			14,247			—			16,582
Pension, other post-retirement and post-employment obligations	21,677			1,000			61,272			—			83,949
Other long-term liabilities	31			—			5,709			—			5,740
Intercompany loans	229,239			(358,187		)	128,948			—			—
Total stockholders’ (deficit) equity	(86,495		)	722,727			81,582			(746,875		)	(29,061		)
Total liabilities and stockholders’ equity	$	511,926		$	383,083		$	470,709		$	(746,875	)	$	618,843

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Xerium Technologies, Inc.

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)-(Unaudited)

For the three months ended March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	46,115		$	105,399		$	(11,709	)	$	139,805
Costs and expenses:
Cost of products sold	(450		)	30,863			66,594			(11,709		)	85,298
Selling	—			5,218			13,303			—			18,521
General and administrative	1,982			807			11,845			—			14,634
Research and development	—			2,012			642			—			2,654
Restructuring and impairment	119			238			898			—			1,255
	1,651			39,138			93,282			(11,709		)	122,362
(Loss) income from operations	(1,651		)	6,977			12,117			—			17,443
Interest (expense) income, net	(6,704		)	1,406			(3,908		)	—			(9,206		)
Foreign exchange gain (loss)	183			(13		)	(419		)	—			(249		)
Equity in subsidiaries income	13,704			4,754			—			(18,458		)	—
Dividend income	—			1,555			—			(1,555		)	—
Income (loss) before provision for income taxes	5,532			14,679			7,790			(20,013		)	7,988
Provision for income taxes	(47		)	106			(2,562		)	—			(2,503		)
Net income (loss)	$	5,485		$	14,785		$	5,228		$	(20,013	)	$	5,485
Comprehensive income (loss)	$	5,254		$	14,562		$	2,924		$	(20,013	)	$	2,727

Xerium Technologies, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income-(Unaudited)

For the three months ended March 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	44,063		$	102,676		$	(12,375	)	$	134,364
Costs and expenses:
Cost of products sold	(472		)	33,415			67,499			(12,521		)	87,921
Selling	—			5,723			13,765			—			19,488
General and administrative	4,113			1,638			12,074			—			17,825
Research and development	—			2,070			892			—			2,962
Restructuring and impairment	36			140			3,798			—			3,974
	3,677			42,986			98,028			(12,521		)	132,170
(Loss) income from operations	(3,677		)	1,077			4,648			146			2,194
Interest (expense) income, net	(7,355		)	1,779			(4,022		)	—			(9,598		)
Foreign exchange (loss) gain	(154		)	(6		)	699			—			539
Equity in subsidiaries income	3,693			(690		)	—			(3,003		)	—
(Loss) income before provision for income taxes	(7,493		)	2,160			1,325			(2,857		)	(6,865		)
Provision for income taxes	(29		)	(40		)	(588		)	—			(657		)
Net (loss) income	$	(7,522	)	$	2,120		$	737		$	(2,857	)	$	(7,522	)
Comprehensive (loss) income	$	(8,168	)	$	2,563		$	4,984		$	(2,857	)	$	(3,478	)

Consolidating Statement of Cash Flows

erium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net income (loss)	$	5,485		$	14,785		$	5,228		$	(20,013	)	$	5,485
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	295			—			—			—			295
Depreciation	33			1,903			7,030			—			8,966
Amortization of intangibles	—			553			23			—			576
Deferred financing cost amortization	516			—			193			—			709
Foreign exchange gain on revaluation of debt	—			—			(118		)	—			(118		)
Deferred taxes	—			—			282			—			282
Asset impairment	208			—			720						928
Loss (gain) on disposition of property and equipment	1			3			(14		)	—			(10		)
Provision for doubtful accounts	—			(53		)	88			—			35
Undistributed equity in (earnings) loss of subsidiaries	(13,704		)	(4,754		)	—			18,458			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	—			(3,595		)	(5,632		)	—			(9,227		)
Inventories	—			529			399			—			928
Prepaid expenses	3			(639		)	1,088			—			452
Other current assets	(2,182		)	(35		)	254			—			(1,963		)
Accounts payable and accrued expenses	5,158			(234		)	(3,533		)	1,555			2,946
Deferred and other long-term liabilities	42			68			(111		)	—			(1		)
Intercompany loans	854			(1,496		)	642			—			—
Net cash (used in) provided by operating activities	(3,291		)	7,035			6,539			—			10,283
Investing activities
Capital expenditures, gross	(1,466		)	(632		)	(1,615		)	—			(3,713		)
Proceeds from disposals of property and equipment	—			—			317			—			317
Net cash (used in) provided by investing activities	(1,466		)	(632		)	(1,298		)	—			(3,396		)
Financing activities
Principal payments on debt	(313		)	—			(290		)	—			(603		)
Intercompany loans	7,499			(6,449		)	(1,050		)	—			—
Net cash provided by (used in) financing activities	7,186			(6,449		)	(1,340		)	—			(603		)
Effect of exchange rate changes on cash flows	—			(1		)	(297		)	—			(298		)
Net increase (decrease) in cash	2,429			(47		)	3,604			—			5,986
Cash and cash equivalents at beginning of period	6,471			36			28,270			—			34,777
Cash and cash equivalents at end of period	$	8,900		$	(11	)	$	31,874		$	—		$	40,763

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
Operating activities
Net (loss) income	$	(7,522	)	$	2,120		$	737		$	(2,857	)	$	(7,522	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation	972			—			—			—			972
Depreciation	55			1,968			7,741			—			9,764
Amortization of intangibles	—			553			23			—			576
Deferred financing cost amortization	696			—			358			—			1,054
Foreign exchange loss on revaluation of debt	—			—			8			—			8
Deferred taxes	—			—			(182		)	—			(182		)
Gain on disposition of property and equipment	—			(4		)	(442		)	—			(446		)
Provision for doubtful accounts	—			(76		)	217			—			141
Undistributed equity in (earnings) loss of subsidiaries	(3,693		)	690			—			3,003			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(1		)	428			2,620			—			3,047
Inventories	—			368			(2,586		)	(146		)	(2,364		)
Prepaid expenses	58			(283		)	234			—			9
Other current assets	—			1,079			(250		)	—			829
Accounts payable and accrued expenses	5,476			(1,305		)	270			—			4,441
Deferred and other long-term liabilities	73			100			(348		)	—			(175		)
Intercompany loans	(969		)	593			376			—			—
Net cash (used in) provided by operating activities	(4,855		)	6,231			8,776			—			10,152
Investing activities
Capital expenditures, gross	—			(563		)	(2,688		)	—			(3,251		)
Intercompany property and equipment transfers, net	343			(339		)	(4		)	—			—
Proceeds from disposals of property and equipment	—			4			699			—			703
Net cash provided by (used in) investing activities	343			(898		)	(1,993		)	—			(2,548		)
Financing activities
Principal payments on debt	(6,541		)	—			(6,638		)	—			(13,179		)
Payment of deferred financing fees	(61		)	—			—			—			(61		)
Intercompany loans	7,376			(5,578		)	(1,798		)	—			—
Net cash provided by (used in) financing activities	774			(5,578		)	(8,436		)	—			(13,240		)
Effect of exchange rate changes on cash flows	—			5			375			—			380
Net (decrease) increase in cash	(3,738		)	(240		)	(1,278		)	—			(5,256		)
Cash and cash equivalents at beginning of period	11,548			280			31,738			—			43,566
Cash and cash equivalents at end of period	$	7,810		$	40		$	30,460		$	—		$	38,310

XML

Supplemental Guarantor Financial Information - Condensed Consolidated Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 40,763	$ 34,777	$ 38,310	$ 43,566
Accounts receivable, net	92,360	84,456
Inventories, net	75,265	77,391
Prepaid expenses	8,860	9,386
Other current assets	15,556	14,839
Total current assets	232,804	220,849
Property and equipment, net	299,853	308,806
Goodwill	58,821	61,127
Intangible assets	17,307	18,678
Other assets	8,095	9,383
Total assets	616,880	618,843
Current liabilities:
Accounts payable	35,421	36,884
Accrued expenses	63,787	59,757
Notes payable	7,705	7,911
Current maturities of long-term debt	2,500	2,397
Total current liabilities	109,413	106,949
Long-term debt, net of current maturities	431,489	434,684
Deferred and long-term taxes	15,651	16,582
Pension, other post-retirement and post-employment obligations	81,103	83,949
Other long-term liabilities	5,262	5,740
Total stockholders' (deficit) equity	(26,038)	(29,061)
Total liabilities and stockholders' deficit	616,880	618,843
Parent
Current assets:
Cash and cash equivalents	8,900	6,471	7,810	11,548
Intercompany receivable	(103,260)	(102,407)
Prepaid expenses	156	159
Other current assets	1,975
Total current assets	(92,229)	(95,777)
Property and equipment, net	2,166	734
Investments	610,592	596,891
Intangible assets	9,518	10,034
Other assets	41	44
Total assets	530,088	511,926
Current liabilities:
Accounts payable	712	502
Accrued expenses	10,952	6,005
Notes payable		0
Current maturities of long-term debt	1,250	1,250
Total current liabilities	12,914	7,757
Long-term debt, net of current maturities	339,404	339,717
Pension, other post-retirement and post-employment obligations	21,116	21,677
Other long-term liabilities	51	31
Intercompany loans	237,552	229,239
Total stockholders' (deficit) equity	(80,949)	(86,495)
Total liabilities and stockholders' deficit	530,088	511,926
Total Guarantors
Current assets:
Cash and cash equivalents	(11)	36	40	280
Accounts receivable, net	24,612	20,964
Intercompany receivable	109,444	107,944
Inventories, net	15,144	15,672
Prepaid expenses	2,332	1,693
Other current assets	3,004	2,970
Total current assets	154,525	149,279
Property and equipment, net	61,592	62,157
Investments	142,819	149,134
Goodwill	17,737	17,737
Intangible assets	4,223	4,776
Total assets	380,896	383,083
Current liabilities:
Accounts payable	8,845	8,629
Accrued expenses	6,840	6,579
Notes payable		0
Total current liabilities	15,685	15,208
Deferred and long-term taxes	2,335	2,335
Pension, other post-retirement and post-employment obligations	1,068	1,000
Intercompany loans	(361,232)	(358,187)
Total stockholders' (deficit) equity	723,040	722,727
Total liabilities and stockholders' deficit	380,896	383,083
Total Non-Guarantors
Current assets:
Cash and cash equivalents	31,874	28,270	30,460	31,738
Accounts receivable, net	67,748	63,492
Intercompany receivable	(6,184)	(5,537)
Inventories, net	60,971	62,569
Prepaid expenses	6,372	7,534
Other current assets	10,577	11,869
Total current assets	171,358	168,197
Property and equipment, net	236,095	245,915
Goodwill	41,084	43,390
Intangible assets	3,566	3,868
Other assets	8,054	9,339
Total assets	460,157	470,709
Current liabilities:
Accounts payable	25,864	27,753
Accrued expenses	45,995	47,173
Notes payable	7,705	7,911
Current maturities of long-term debt	1,250	1,147
Total current liabilities	80,814	83,984
Long-term debt, net of current maturities	92,085	94,967
Deferred and long-term taxes	13,316	14,247
Pension, other post-retirement and post-employment obligations	58,919	61,272
Other long-term liabilities	5,211	5,709
Intercompany loans	123,680	128,948
Total stockholders' (deficit) equity	86,132	81,582
Total liabilities and stockholders' deficit	460,157	470,709
Other Eliminations
Current assets:
Cash and cash equivalents	0	0	0	0
Inventories, net	(850)	(850)
Total current assets	(850)	(850)
Investments	(753,411)	(746,025)
Total assets	(754,261)	(746,875)
Current liabilities:
Accrued expenses	0	0
Notes payable		0
Total current liabilities	0
Total stockholders' (deficit) equity	(754,261)	(746,875)
Total liabilities and stockholders' deficit	(754,261)	(746,875)
The Company
Current assets:
Cash and cash equivalents	40,763	34,777	38,310	43,566
Accounts receivable, net	92,360	84,456
Inventories, net	75,265	77,391
Prepaid expenses	8,860	9,386
Other current assets	15,556	14,839
Total current assets	232,804	220,849
Property and equipment, net	299,853	308,806
Goodwill	58,821	61,127
Intangible assets	17,307	18,678
Other assets	8,095	9,383
Total assets	616,880	618,843
Current liabilities:
Accounts payable	35,421	36,884
Accrued expenses	63,787	59,757
Notes payable	7,705	7,911
Current maturities of long-term debt	2,500	2,397
Total current liabilities	109,413	106,949
Long-term debt, net of current maturities	431,489	434,684
Deferred and long-term taxes	15,651	16,582
Pension, other post-retirement and post-employment obligations	81,103	83,949
Other long-term liabilities	5,262	5,740
Total stockholders' (deficit) equity	(26,038)	(29,061)
Total liabilities and stockholders' deficit	$ 616,880	$ 618,843

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Comprehensive Income and Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	$ (41,893)
Other comprehensive (loss) income before reclassifications	(3,365)
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	575
Amortization of interest expense, net of taxes of $0	32
Net current period other comprehensive (loss) income	(2,758)
Balance at March 31, 2013	(44,651)
Amortization of actuarial losses, tax	0
Amortization of interest expense, tax	0
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	3,253
Other comprehensive (loss) income before reclassifications	(4,392)
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	0
Amortization of interest expense, net of taxes of $0	0
Net current period other comprehensive (loss) income	(4,392)
Balance at March 31, 2013	(1,139)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	(44,502)
Other comprehensive (loss) income before reclassifications	1,027
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	575
Amortization of interest expense, net of taxes of $0	0
Net current period other comprehensive (loss) income	1,602
Balance at March 31, 2013	(42,900)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	(644)
Other comprehensive (loss) income before reclassifications	0
Amounts reclassified from other comprehensive (loss) income :
Amortization of actuarial losses, net of taxes of $0	0
Amortization of interest expense, net of taxes of $0	32
Net current period other comprehensive (loss) income	32
Balance at March 31, 2013	$ (612)

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Condensed Consolidated Statements of Cash Flows-(Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating activities
Net income (loss)	$ 5,485	$ (7,522)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Stock-based compensation	295	972
Depreciation	8,966	9,764
Amortization of intangibles	576	576
Deferred financing cost amortization	709	1,054
Foreign exchange (gain) loss on revaluation of debt	(118)	8
Deferred taxes	282	(182)
Asset impairment	928	0
Gain on disposition of property and equipment	(10)	(446)
Provision for doubtful accounts	35	141
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(9,227)	3,047
Inventories	928	(2,364)
Prepaid expenses	452	9
Other current assets	(1,963)	829
Accounts payable and accrued expenses	2,946	4,441
Deferred and other long-term liabilities	(1)	(175)
Net cash provided by operating activities	10,283	10,152
Investing activities
Capital expenditures, gross	(3,713)	(3,251)
Proceeds from disposals of property and equipment	317	703
Net cash used in investing activities	(3,396)	(2,548)
Financing activities
Principal payments on debt	(603)	(13,179)
Payment of deferred financing fees	0	(61)
Net cash used in financing activities	(603)	(13,240)
Effect of exchange rate changes on cash flows	(298)	380
Net increase (decrease) in cash	5,986	(5,256)
Cash and cash equivalents at beginning of period	34,777	43,566
Cash and cash equivalents at end of period	$ 40,763	$ 38,310

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Pensions, Other Post-retirement and Post-employment Benefits

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Pensions, Other Post-retirement and Post-employment Benefits

Pensions, Other Post-retirement and Post-employment Benefits

The Company accounts for its pensions, other post-retirement and post-employment benefit plans in accordance with ASC Topic 715, Compensation—Retirement Benefits (“Topic 715”). The Company has defined benefit pension plans covering substantially all of its U.S. and Canadian employees and employees of certain subsidiaries in other countries. Benefits are generally based on the employee’s years of service and compensation. These plans are funded in conformity with the funding requirements of applicable government regulations. The Company does not fund certain plans, as funding is not required. The Company plans to continue to fund its U.S. defined benefit plans to comply with the Pension Protection Act of 2006. In addition, the Company also intends to fund its U.K. and Canadian defined benefit plans in accordance with local regulations.

As required by Topic 715, the following tables summarize the components of net periodic benefit cost:

Defined Benefit Plans

	Three Months Ended March 31,
	2013			2012
Service cost	$	973		$	885
Interest cost	1,560			1,830
Expected return on plan assets	(1,412		)	(1,373		)
Amortization of prior service cost	3			3
Amortization of net loss	572			633
Net periodic benefit cost	$	1,696		$	1,978

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Description of Business and Significant Accounting Policies - Components of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Inventories, Net [Abstract]
Raw materials	$ 17,330	$ 16,924
Work in process	23,790	23,681
Finished goods (includes consigned inventory of $8,754 in 2013 and $8,726 in 2012)	34,145	36,786
Inventories, net	$ 75,265	$ 77,391

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Minimum	Mar. 31, 2013 Maximum	Dec. 31, 2012 BRAZIL Foreign Tax Authority [Member]
Income Taxes [Line Items]
Provision for income taxes	$ 2,503,000	$ 657,000
Statutory income tax rate in foreign countries			25.00%	39.00%
Gross unrecognized tax benefit	2,865,000
Unrecognized tax benefit decreased	409,000
Tax years open to examination			2000	2012
Tax, penalties and interest	43,400,000
Income Tax Examination, Percentage Increase (Decrease) in Liability from Prior Year					(50.00%)
Income Tax Examination, Increase (Decrease) in Liability from Prior Year					(11,590,000)
Income Tax Examination, Liability Recorded					$ 31,762,000

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Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Schedule Of Long-Term Debt

At March 31, 2013 and December 31, 2012, long-term debt consisted of the following:

	March 31, 2013		December 31, 2012
Senior Bank Debt (Secured):
First lien debt, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of March 31, 2013	$	104,244	$	104,557
First lien debt, payable quarterly, Euro denominated–EURIBOR (minimum 1.25%) plus 5.00% (6.25%) as of March 31, 2013	93,202		95,979
	197,446		200,536
Senior Notes (Unsecured), payable semi-annually–U.S. Dollar denominated interest rate fixed at 8.875%, matures June of 2018	236,410		236,410
Other Long-Term Debt:
Unsecured, interest rate fixed at 2.00%, Euro denominated	133		135
Unsecured, interest rate fixed at 1.31% to 3.40%, Yen denominated	—		—
	433,989		437,081
Less current maturities	2,500		2,397
Total	$	431,489	$	434,684