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 June 30, 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.)
14101 Capital Boulevard Youngsville, North Carolina	27596
(Address of principal executive offices)	(Zip Code)

(919) 526-1400

(Registrant’s telephone number, including area code)

8537 Six Forks Road, Suite 300, Raleigh, NC 27615

(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 July 19, 2013 was 15,375,675.

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	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
Part II. Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 6.	Exhibits	37

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Xerium Technologies, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

	June 30, 2013 (Unaudited)			December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	36,514		$	34,777
Accounts receivable, net	89,196			84,456
Inventories, net	75,536			77,391
Prepaid expenses	8,695			9,386
Other current assets	14,749			14,839
Total current assets	224,690			220,849
Property and equipment, net	289,161			308,806
Goodwill	63,213			61,127
Intangible assets	16,027			18,678
Other assets	7,723			9,383
Total assets	$	600,814		$	618,843
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable	$	7,806		$	7,911
Accounts payable	31,808			36,884
Accrued expenses	59,147			59,757
Current maturities of long-term debt	2,134			2,397
Total current liabilities	100,895			106,949
Long-term debt, net of current maturities	433,410			434,684
Deferred and long-term taxes	15,300			16,582
Pension, other post-retirement and post-employment obligations	80,259			83,949
Other long-term liabilities	6,049			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 June 30, 2013 and December 31, 2012	—			—
Common stock, $0.001 par value, 20,000,000 shares authorized; 15,375,675 and 15,309,717 shares outstanding as of June 30, 2013 and December 31, 2012, respectively	15			15
Stock warrants	13,532			13,532
Paid-in capital	413,603			413,124
Accumulated deficit	(415,232		)	(413,839		)
Accumulated other comprehensive loss	(47,017		)	(41,893		)
Total stockholders’ deficit	(35,099		)	(29,061		)
Total liabilities and stockholders’ deficit	$	600,814		$	618,843

See accompanying notes.

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Xerium Technologies, Inc.

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net Sales	$	138,324		$	136,378		$	278,129		$	270,742
Costs and expenses:
Cost of products sold	85,674			85,396			170,972			173,317
Selling	17,585			19,070			36,107			38,558
General and administrative	15,506			14,034			30,140			31,860
Research and development	2,599			2,869			5,252			5,831
Restructuring	4,165			1,129			5,420			5,103
	125,529			122,498			247,891			254,669
Income from operations	12,795			13,880			30,238			16,073
Interest expense, net	(13,112		)	(9,120		)	(22,318		)	(18,718		)
Loss on extinguishment of debt	(3,123		)	—			(3,123		)	—
Foreign exchange gain (loss)	50			(180		)	(198		)	360
(Loss) income before provision for income taxes	(3,390		)	4,580			4,599			(2,285		)
Provision for income taxes	(3,489		)	(2,354		)	(5,992		)	(3,011		)
Net (loss) income	$	(6,879	)	$	2,226		$	(1,393	)	$	(5,296	)
Comprehensive loss	$	(9,245	)	$	(10,232	)	$	(6,517	)	$	(13,710	)
Net (loss) income per share:
Basic	$	(0.45	)	$	0.15		$	(0.09	)	$	(0.35	)
Diluted	$	(0.45	)	$	0.15		$	(0.09	)	$	(0.35	)
Shares used in computing net (loss) income per share:
Basic	15,370,223			15,226,995			15,340,471			15,194,432
Diluted	15,370,223			15,236,651			15,340,471			15,194,432

See accompanying notes.

4

Xerium Technologies, Inc.

Consolidated Statements of Cash Flows—(Unaudited)

(Dollars in thousands)

	Six Months Ended June 30,
	2013			2012
Operating activities
Net loss	$	(1,393	)	$	(5,296	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	595			754
Depreciation	17,667			19,193
Amortization of intangibles	961			1,153
Deferred financing cost amortization	1,618			1,736
Foreign exchange loss on revaluation of debt	1,324			381
Deferred taxes	748			(360		)
Asset impairment	1,078			—
Gain on disposition of property and equipment	(7		)	(617		)
Loss on extinguishment of debt	3,123			—
Provision for doubtful accounts	122			193
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(7,809		)	3,861
Inventories	(934		)	230
Prepaid expenses	480			(4,076		)
Other current assets	(303		)	603
Accounts payable and accrued expenses	(4,166		)	(3,609		)
Deferred and other long-term liabilities	(829		)	(350		)
Net cash provided by operating activities	12,275			13,796
Investing activities
Capital expenditures, gross	(8,457		)	(7,330		)
Proceeds from disposals of property and equipment	354			981
Net cash used in investing activities	(8,103		)	(6,349		)
Financing activities
Proceeds from borrowings	199,000			—
Principal payments on debt	(198,348		)	(14,875		)
Payment of deferred financing fees	(2,772		)	(1,762		)
Net cash used in financing activities	(2,120		)	(16,637		)
Effect of exchange rate changes on cash flows	(315		)	(780		)
Net increase (decrease) in cash	1,737			(9,970		)
Cash and cash equivalents at beginning of period	34,777			43,566
Cash and cash equivalents at end of period	$	36,514		$	33,596

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 June 30, 2013 and for the three and six months ended June 30, 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:

	June 30, 2013		December 31, 2012
Raw materials	$	17,825	$	16,924
Work in process	24,127		23,681
Finished goods (includes consigned inventory of $7,948 at June 30, 2013 and $8,726 at December 31, 2012.)	33,584		36,786
	$	75,536	$	77,391

In the second quarter of 2013, in connection with the closure of the Spain clothing facility, the Company wrote off $692 of obsolete inventory. This charge is included in cost of products sold expense in the Consolidated Income Statement for the three and six months ended June 30, 2013.

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 six months ended June 30, 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 June 30, 2013.

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Warranties

The Company offers warranties on certain rolls 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 six months ended June 30, 2013:

	Balance at December 31, 2012		Charged to Revenue or Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Balance at June 30, 2013
For the six months ended June 30, 2013	$	1,848	$	794	$	(16	)	$	(786	)	$	1,840

Net (Loss) Income Per Common Share

Net (loss) income 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 June 30, 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 June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
Weighted-average common shares outstanding–basic	15,370,223	15,226,995	15,340,471	15,194,432
Dilutive effect of stock-based compensation awards outstanding	—	9,656	—	—
Weighted-average common shares outstanding–diluted	15,370,223	15,236,651	15,340,471	15,194,432

Dilutive securities aggregating approximately 3.2 million and 1.8 million were outstanding for the six months ended June 30, 2013 and June 30, 2012, but were not included in the computation of diluted earnings per share for the three months and six ended June 30, 2013 and 2012, respectively, 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 either restructuring expense if it was a result of the Company's restructuring activities or general and administrative expense in the consolidated statements of operations. Impairment charges associated with restructuring are discussed in Note 7 "Restructuring Expense".

In 2013, the Company determined there was an impairment of $0.7 million to the carrying value of a vacant facility held for sale and certain other assets at March 31, 2013. This impairment charge is included in general and administrative expense in the Consolidated Statements of Operations for the six months ended June 30, 2013.

2. 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

7

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. During the second quarter of 2013, in connection with the refinancing of its credit facility, the Company paid off its Euro-denominated debt, resulting in the termination of one of the interest rate cap agreements and accelerated amortization of $322 to interest expense. At June 30, 2013, the notional amount of the remaining agreement was $45,400. Under the terms of this interest rate cap agreement, 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 cap is considered a designated hedging instrument and 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 agreement. The following represents the fair value of the interest rate cap and unrecognized losses included in accumulated other comprehensive loss at June 30, 2013 and December 31, 2012:

	June 30, 2013			December 31, 2012
Fair value of interest rate rate cap included in other assets in the Consolidated Balance Sheets	$	8		$	16
Unrecognized losses included in accumulated other comprehensive income (loss)	$	(271	)	$	(644	)

The Company expects to reclassify $83 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 June 30, 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 following represents the fair value of these derivatives at June 30, 2013 and December 31, 2012 and the change in fair value included in foreign exchange gain for the three and six months ended June 30, 2013 and 2012:

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	June 30, 2013		December 31, 2012
Fair value of derivatives	$	1,229	$	357
	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012
Change in fair value included in foreign exchange gain for the three months ended June 30, 2013 and June 30, 2012	$	1,439	$	168
	Six Months Ended June 30, 2013		Six Months Ended June 30, 2012
Change in fair value included in foreign exchange gain for the six months ended June 30, 2013 and June 30, 2012	$	1,542	$	283

The following represents the notional amounts of foreign exchange forward contracts at June 30, 2013:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	22,126	$	(14,942	)

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 June 30, 2013 and December 31, 2012, long-term debt consisted of the following:

9

	June 30, 2013		December 31, 2012
New senior secured term loan facility, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of June 30, 2013, net of $1.0 discount	$	199,000	$	—
Prior first lien debt, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of December 31, 2012	—		104,557
Prior first lien debt, payable quarterly, Euro denominated–EURIBOR (minimum 1.25%) plus 5.00% (6.25%) as of December 31, 2012	—		95,979
	199,000		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
Unsecured, interest rate fixed at 2.00%, Euro denominated	134		135
	435,544		437,081
Less current maturities	2,134		2,397
Total	$	433,410	$	434,684

On May 17, 2013, the Company entered into a Credit and Guaranty Agreement for a $200 million term loan credit facility (the “New Term Credit Facility”), net of a discount of $1.0 million, among the Company, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions. The Company also entered into a Revolving Credit and Guaranty Agreement for a $40 million asset-based revolving credit facility subject to a borrowing base (the “ABL Facility,” and collectively with the New Term Credit Facility, the “New Credit Facility”) among the Company, Xerium Canada Inc., as Canadian borrower, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions.

The New Term Credit Facility provides for:

• a six-year $200 million senior secured term loan facility, provided the facility would mature in March 2018 if any of the Company's senior notes due 2018 ("Senior Notes") remain outstanding at that time; and

• an uncommitted accordion option (the “Incremental Facility”) allowing for increases for borrowings under the New Term Credit Facility with the same terms, and borrowing of new tranches of term loans, up to an aggregate principal amount equal to (i) $75 million plus (ii) an additional amount (the “Facility Increase”) provided, if after giving effect to such Facility Increase (as well as any other additional term loans), on a pro forma basis, the Senior Secured Leverage Ratio (as defined in the New Term Credit Facility) for the most recent four consecutive fiscal quarters does not exceed 2.25:1.

The ABL Facility provides for a $40 million senior secured revolving credit facility with a $20 million sub-limit on letters of credit. Availability under the ABL Facility is subject to a borrowing base that is based on a specified percentage of eligible accounts receivable and inventory. The term of the ABL Facility is five years, provided that if any of the Senior Notes remain outstanding in March 2018, the ABL Facility would mature at that time.

The Company used the borrowings under the New Term Credit Facility to refinance all of its outstanding indebtedness under its previously existing senior secured term loan and revolving credit facility entered into in 2011 (the "2011 Credit Facility"). The Company intends to draw upon the ABL Facility from time-to-time for working capital and general corporate purposes.

The New Term Credit Facility will require the Company to make amortization payments (payable in quarterly installments) equal to 1% of principal per annum with respect to the Term Loans with the remaining amount due at final maturity. Voluntary prepayments will be permitted, in whole or in part, subject to minimum prepayment requirements; provided that prepayments made prior to the date that is six months after the Closing Date of the New Term Credit Facility for the purpose of repricing or effectively repricing the term loan facilities must include a 1.0% prepayment premium; provided, further, that voluntary prepayments of loans bearing interest at the London Interbank Offered Rate (“LIBOR”) on a date other than the last day of the relevant interest period will be subject to the payment of customary breakage costs.

If the total amount of advances outstanding under the ABL Facility exceed either $40 million or the borrowing base, the Company must repay an amount equal to the excess borrowing. If obligations under all outstanding letters of credit exceeds $20 million, the Company must cash collateralize its letters of credit in an amount equal to the excess obligations outstanding.

The interest rates under the New Term Credit Facility will be calculated, at the Company's option, at either the base rate or LIBOR, plus a margin of 4.00% and 5.00%, respectively. Each of the base rate and LIBOR shall be subject to a minimum of 2.25% and 1.25%, respectively. If the Company's Senior Secured Leverage Ratio (as defined in the $200 million New Credit

10

Facility) is less than 2.00:1 at any quarterly determination date, then the margins over the base rate and LIBOR will be 3.50% and 4.50%, respectively.

Depending on whether advances are made in U.S. Dollars or Canadian Dollars, interest rates under the ABL Facility will be calculated, at the Company's option, at either a U.S.-based or Canadian-based base rate ("Base Rate Loans") or LIBOR or the Canadian Dealer Offered Rate ("CDOR") (each, "Fixed Rate Loans"), respectively, plus a margin of 1.25% for Base Rate Loans and a margin of 2.25% for Fixed Rate Loans. If the Company draws advances on the ABL Facility that are greater than 33.3% but less than or equal to 66.7% of the $40 million limit, then the margins on Base Rate Loans and Fixed Rate Loans drop to 1.00% and 2.00%, respectively. The margins drop to 0.75% and 1.75%, respectively, if advances under the ABL Facility are greater than 66.7% of the $40 million limit. In addition to paying interest on outstanding advances under the ABL Facility, the Company will be required to pay a commitment fee to the lenders in respect of the unutilized commitments at a rate equal to 0.50% per annum if advances under the ABL Facility are less than or equal to 50% of the commitments or a rate equal to 0.375% per annum if advances under the ABL are more than 50% of the commitments.

The obligations under the New Credit Facility will be guaranteed by all of the Company's 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, in the case of the ABL Facility, by Xerium Canada Inc. and any future Canadian subsidiaries, provided that non-U.S. guarantors will only be liable for obligations of Xerium Canada Inc. and any other Canadian borrowers. The New Term Credit Facility is secured by a first-priority perfected security interest in substantially all of the assets of the Company, Xerium Canada Inc. and such subsidiary guarantors (collectively, the “Loan Parties”), in each case, now owned or later acquired, except with respect to the Loan Parties' accounts receivables and inventory, which are secured by a second-priority interest. The ABL Facility is secured by a first-priority perfected security interest in the Loan Parties' accounts receivables and inventory, and a second-priority interest in substantially all of the Loan Parties' other assets.

The New Credit Facility contains certain customary covenants that, subject to exceptions, restrict the Company's ability to, among other things:

•declare dividends or redeem or repurchase equity interests;

•prepay, redeem or purchase debt;

•incur liens and engage in sale-leaseback transactions;

•make loans and investments;

•incur additional indebtedness;

•amend or otherwise alter debt and other material agreements;

•make capital expenditures in excess of $42 million per fiscal year, subject to adjustment;

•engage in mergers, acquisitions and asset sales;

•transact with affiliates; and

•engage in businesses that are not related to the Company's existing business.

The New Credit Facility eliminates the interest coverage and leverage coverage ratio maintenance tests that were contained in the Company's 2011 Credit Facility. However, the ABL Facility contains a springing Fixed Charge Coverage Ratio (as defined in the ABL Facility), which must be not less than 1.00:1 during periods in which our Global Excess Availability (as defined in the ABL Facility) falls below certain minimum thresholds.

The New Credit Facility contains certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain indebtedness, certain events of bankruptcy, certain triggering events under U.S. and, in the case of the ABL Facility, Canadian employee benefit plans, material judgments, actual or asserted failures of any guarantee or security document supporting the New Credit Facility to be in full force and effect and a change of control. If an event of default occurs, the lenders under the New Credit Facility would be entitled to take various enforcement actions, including acceleration of amounts due under the New Credit Facility and all actions permitted to be taken by a secured creditor. The material risks associated with the New Credit Facility are substantially similar to the material risks regarding the 2011 Credit Facility identified in the section entitled "Risks Relating to Our Capital Structure" under "Item 1A - Risk Factors" of our Form 10-K for the year-ended December 31, 2012.

The Company has $236.4 million aggregate principal amount of 8.875% senior unsecured notes (the “Notes”). The Notes contain customary covenants that, subject to certain exceptions, restrict its ability to enter into certain transactions and engage in certain activities.

The aggregate scheduled principal payments and estimated interest payments over the term of the New Credit Facility, the Notes and other existing long-term debt are shown below:

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	Total Scheduled Principal Payments including balloon payments (in USD)		Total Estimated Interest Payments Converted into U.S. Dollars at June 30, 2013 Exchange Rates (in USD thousands)
2013	$	1,134	$	16,710
2014	2,000		32,308
2015	2,000		32,194
2016	2,000		32,079
2017	2,000		31,964
2018 and thereafter	427,410		15,983
	$	436,544	$	161,238

As of June 30, 2013, the outstanding balance of the Company's term debt under its New Term Credit Facility and Notes was $435.4 million, which is net of a $1.0 million discount. In addition, as of June 30, 2013, the Company had no outstanding borrowings under its current ABL Facility and had an aggregate of $24.0 million available for additional borrowing. The borrowing availability represents the borrowing base under the ABL Facility less commitments on outstanding letters of credit. Additionally, at June 30, 2013, the Company had $5.0 million available for borrowings from other credit facilities.

As of June 30, 2013 and December 31, 2012, the carrying value of the Company’s long-term debt was $435.5 million and $437.1 million, respectively, and its fair value was approximately $433.3 million and $410.1 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 and six months ended June 30, 2013, the provision for income taxes was $(3,489) and $(5,992) as compared to $(2,354) and $(3,011) for the three and six months ended June 30, 2012. The increase in tax expense was primarily attributable to the geographic mix of earnings in the three and six months ended June 30, 2013 as compared with the three and six months ended June 30, 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 June 30, 2013, the Company had a gross amount of unrecognized tax benefit of $3,420, exclusive of interest and penalties. The unrecognized tax benefit increased by approximately $146 during the six months ended June 30, 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 six months ended June 30, 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.

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In November of 2011, the Federal Revenue Department of the Ministry of Finance of (“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 denied the amortization of that goodwill against net income for the years 2006 through 2010 and sought payment of approximately $40,200 (subject to currency exchange rates) in tax, penalties and interest as of June 30, 2013. 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 original assessment, but reducing the claimed penalties by 50%. This decision reduced the total assessed amount as of June 30, 2013 by approximately $10,758 to $29,411 (subject to currency exchange rates). 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 June 30, 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. 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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Service cost	$	966		$	888		$	1,939		$	1,773
Interest cost	1,548			1,838			3,108			3,668
Expected return on plan assets	(1,401		)	(1,377		)	(2,813		)	(2,750		)
Amortization of prior service cost	—			4			3			7
Amortization of net loss	571			633			1,143			1,266
Net periodic benefit cost	$	1,684		$	1,986		$	3,380		$	3,964

6. Comprehensive Loss and Accumulated Other Comprehensive Loss

Comprehensive loss for the three and six months ended June 30, 2013 and 2012 is as follows:

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	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net (loss) income	$	(6,879	)	$	2,226		$	(1,393	)	$	(5,296	)
Foreign currency translation adjustments	(3,720		)	(13,025		)	(8,112		)	(8,399		)
Pension liability changes under Topic 715	1,013			578			2,615			90
Change in value of derivative instruments	341			(11		)	373			(105		)
Comprehensive loss	$	(9,245	)	$	(10,232	)	$	(6,517	)	$	(13,710	)

The components of accumulated other comprehensive loss for the three months ended June 30, 2013 are as follows (net of taxes):

	Foreign Currency Translation     Adjustment			Pension Liability Changes Under  Topic 715			Change in Value of Derivative Instruments			Accumulated    Other Comprehensive (Loss) Income
Balance at March 31, 2013	$	(1,139	)	$	(42,900	)	$	(612	)	$	(44,651	)
Other comprehensive (loss) income before reclassifications	(3,720		)	560			14			(3,146		)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	—			453			—			453
Amortization of interest expense	—			—			327			327
Net current period other comprehensive (loss) income	(3,720		)	1,013			341			(2,366		)
Balance at June 30, 2013	$	(4,859	)	$	(41,887	)	$	(271	)	$	(47,017	)

The components of accumulated other comprehensive loss for the six months ended June 30, 2013 are as follows (net of taxes):

	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	(8,112		)	1,587			14			(6,511		)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	—			1,028			—			1,028
Amortization of interest expense	—			—			359			359
Net current period other comprehensive (loss) income	(8,112		)	2,615			373			(5,124		)
Balance at June 30, 2013	$	(4,859	)	$	(41,887	)	$	(271	)	$	(47,017	)

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For the three and six months ended June 30, 2013. the amortization of actuarial losses is included in cost of products sold and general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

7. Restructuring and Impairment Expense

During the six months ended June 30, 2013, the Company recorded restructuring and impairment expenses of approximately $5,420. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of two clothing facilities in Spain and Argentina and the closure of a roll cover facility in Charlotte, NC. During the six months ended June 30, 2012, the Company recorded restructuring expenses of approximately $5,103. These charges were primarily related to costs to terminate a sales agency arrangement and other sales-force reductions made in 2012 and the transfer of certain equipment from a downsized location.

The following table sets forth the significant components and activity under restructuring programs for the six months ended June 30, 2013 and 2012:

	Balance at December 31,  2012		Charges (1)		Currency     Effects			Cash Payments			Balance at     June 30, 2013
Severance and other benefits	$	15,577	$	3,339	$	(348	)	$	(8,876	)	$	9,692
Facility costs and other	335		1,669		(8		)	(1,225		)	771
Total	$	15,912	$	5,008	$	(356	)	$	(10,101	)	$	10,463

	Balance at December 31,  2011		Charges		Currency     Effects			Cash Payments			Balance at     June 30, 2012
Severance and other benefits	$	800	$	705	$	4		$	(1,142	)	$	367
Facility costs and other	452		4,398		(124		)	(4,299		)	427
Total	$	1,252	$	5,103	$	(120	)	$	(5,441	)	$	794

(1) Amount excludes $412 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              June 30,					Six Months Ended              June 30,
	2013			2012		2013		2012
Clothing	$	3,578		$	1,007	$	3,986	$	4,766
Roll Covers	705			—		1,434		179
Corporate	(118		)	122		—		158
Total	$	4,165		$	1,129	$	5,420	$	5,103

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

15

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 and six months ended June 30, 2013 and 2012.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended June 30, 2013:
Net Sales	$	89,414	$	48,910	$	—		$	138,324
Segment Earnings (Loss)	$	20,148	$	10,592	$	(3,842	)
Three Months Ended June 30, 2012:
Net Sales	$	88,115	$	48,263	$	—		$	136,378
Segment Earnings (Loss)	$	15,861	$	12,126	$	(2,591	)
Six Months Ended June 30, 2013:
Net Sales	$	179,351	$	98,778	$	—		$	278,129
Segment Earnings (Loss)	$	38,210	$	24,662	$	(6,831	)
Six Months Ended June 30, 2012:
Net Sales	$	176,798	$	93,944	$	—		$	270,742
Segment Earnings (Loss)	$	30,622	$	20,016	$	(6,421	)

Provided below is a reconciliation of Segment earnings income (loss) to (loss) income before provision for income taxes for the three and six months ended June 30, 2013 and 2012, respectively.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Segment Earnings (Loss):
Clothing	$	20,148		$	15,861		$	38,210		$	30,622
Roll Covers	10,592			12,126			24,662			20,016
Corporate	(3,842		)	(2,591		)	(6,831		)	(6,421		)
Stock-based compensation	(300		)	218			(595		)	(754		)
Inventory write-off	(692		)	—			(692		)	—
Impairment expense	191			—			(666		)
Legal fees related to term debt amendment				(85		)				(85		)
Non-recurring expenses related to CEO retirement	—			(695		)	—			(1,496		)
Interest expense, net	(13,112		)	(9,120		)	(22,318		)	(18,718		)
Depreciation and amortization	(9,087		)	(10,005		)	(18,628		)	(20,346		)
Loss on debt extinguishment	(3,123		)	—			(3,123		)	—
Restructuring expense	(4,165		)	(1,129		)	(5,420		)	(5,103		)
(Loss) income before provision for income taxes	$	(3,390	)	$	4,580		$	4,599		$	(2,285	)

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 June 30, 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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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 and six months ended June 30, 2013 and June 30, 2012 as follows:

	Three Months Ended June 30,					Six Months Ended     June 30,
	2013		2012			2013		2012
RSU and DSU Awards (1)	$	300	$	344		$	595	$	754
Management Incentive/Performance Award Programs (2)	—		(562		)	—		—
Total	$	300	$	(218	)	$	595	$	754

(1) Related to RSUs, Options 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, adjusted for payout based on the projected performance targets. In March of 2013, the Compensation Committee approved the 2013 Management Incentive Compensation Award Program. This award, if earned, will be paid 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. 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, and convert 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.

On June 13, 2013, at the 2013 Annual Meeting of Stockholders of Xerium Technologies, Inc., the stockholders of the Company approved an amendment to the Company’s 2010 Equity Incentive Plan, which increased the aggregate number of shares of the Company’s common stock that may be delivered under or in satisfaction of awards under such plan from 913,525 to 1,663,525, increased the number of shares that may be subject to option and stock appreciation right grants and that may be granted as stock awards to any one participant in a calendar year from 150,000 to 500,000. and set a maximum cash award that may be granted to any one participant in a calendar year at $2,000,000. This amendment was approved by the Company’s Board of Directors on March 12, 2013.

On June 13, 2013, after the stockholders had approved the amendment to the Company's 2010 Equity Incentive Plan, the Board approved the granting of awards under the 2013 Executive Long-Term Incentive Plan (the "2013 Executive LTIP") under the 2010 Plan. Awards under the 2013 Executive LTIP are both time-based and performance-based and will be paid in the form

17

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 179,571 time-based RSUs under the Company’s 2010 Plan. These time-based awards will cliff vest on March 11, 2016, and will be converted to common stock, net of applicable tax withholdings. Performance-based awards, which constitute the remaining 50% of the total award, will vest depending on the Company’s stock price performance during the three year participant service period from March 11, 2013 through March 10, 2016. If the awards vest, they will convert into shares of the Company’s common stock and be paid after the close of the three-year performance period.

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

Under the 2011 non-management directors stock plan ("2011 DSU Plan”), each director receives an annual retainer of $112, to be paid on a quarterly basis in arrears. 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 8,250 DSUs under the 2011 DSU Plan for service during the quarter ended June 30, 2013. In addition, in accordance with the 2011 DSU Plan, 5,500 DSUs were settled in Common Stock during the quarter ended June 30, 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.

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Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	7,239		$	(9	)	$	29,284		$	—		$	36,514
Accounts receivable, net	—			23,500			65,696			—			89,196
Intercompany receivables	(103,518		)	110,290			(6,772		)	—			—
Inventories, net	—			15,717			60,669			(850		)	75,536
Prepaid expenses	384			2,330			5,981			—			8,695
Other current assets	15			3,340			11,394			—			14,749
Total current assets	(95,880		)	155,168			166,252			(850		)	224,690
Property and equipment, net	2,798			59,781			226,582			—			289,161
Investments	671,680			241,439			—			(913,119		)	—
Goodwill	—			17,737			45,476			—			63,213
Intangible assets	11,824			3,862			341			—			16,027
Other assets	41			—			7,682			—			7,723
Total assets	$	590,463		$	477,987		$	446,333		$	(913,969	)	$	600,814
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	1,262		$	8,592		$	21,954		$	—		$	31,808
Accrued expenses	6,700			7,622			44,825			—			59,147
Current notes payable	—			—			7,806						7,806
Current maturities of long-term debt	2,000			—			134			—			2,134
Total current liabilities	9,962			16,214			74,719			—			100,895
Long-term debt, net of current maturities	433,410			—			—			—			433,410
Deferred and long-term taxes	—			2,334			12,966			—			15,300
Pension, other post-retirement and post-employment obligations	21,702			1,108			57,449			—			80,259
Other long-term liabilities	69			—			5,980			—			6,049
Intercompany loans	214,537			(332,015		)	117,478			—			—
Total stockholders’ (deficit) equity	(89,217		)	790,346			177,741			(913,969		)	(35,099		)
Total liabilities and stockholders’ equity	$	590,463		$	477,987		$	446,333		$	(913,969	)	$	600,814

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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

20

Xerium Technologies, Inc.

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

For the three months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	47,265		$	103,218		$	(12,159	)	$	138,324
Costs and expenses:
Cost of products sold	(399		)	32,470			65,762			(12,159		)	85,674
Selling	—			4,972			12,613			—			17,585
General and administrative	2,299			1,738			11,469			—			15,506
Research and development	—			2,037			562			—			2,599
Restructuring and impairment	(118		)	556			3,727			—			4,165
	1,782			41,773			94,133			(12,159		)	125,529
(Loss) income from operations	(1,782		)	5,492			9,085			—			12,795
Interest (expense) income, net	(8,113		)	1,405			(6,404		)	—			(13,112		)
Foreign exchange (loss) gain	(87		)	9			128			—			50
Equity in subsidiaries income (deficit)	6,273			(1,768		)	—			(4,505		)	—
Loss on extinguishment of debt	(3,123		)										(3,123		)
Dividend income	—			—			—			—			—
(Loss) income before provision for income taxes	(6,832		)	5,138			2,809			(4,505		)	(3,390		)
Provision for income taxes	(47		)	(38		)	(3,404		)	—			(3,489		)
Net (loss) income	$	(6,879	)	$	5,100		$	(595	)	$	(4,505	)	$	(6,879	)
Comprehensive (loss) income	$	(8,449	)	$	5,279		$	(1,570	)	$	(4,505	)	$	(9,245	)

Xerium Technologies, Inc.

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

For the three months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	45,787		$	102,122		$	(11,531	)	$	136,378
Costs and expenses:
Cost of products sold	(336		)	32,009			65,350			(11,627		)	85,396
Selling	—			5,609			13,461			—			19,070
General and administrative	1,151			2,129			10,754			—			14,034
Research and development	—			2,083			786			—			2,869
Restructuring and impairment	122			23			984			—			1,129
	937			41,853			91,335			(11,627		)	122,498
(Loss) income from operations	(937		)	3,934			10,787			96			13,880
Interest (expense) income, net	(7,092		)	1,766			(3,794		)	—			(9,120		)
Foreign exchange (loss) gain	(154		)	3			(29		)	—			(180		)
Equity in subsidiaries income (deficit)	10,435			3,078			—			(13,513		)	—
Income (loss) before provision for income taxes	2,252			8,781			6,964			(13,417		)	4,580
Provision for income taxes	(26		)	(33		)	(2,295		)	—			(2,354		)
Net income (loss)	$	2,226		$	8,748		$	4,669		$	(13,417	)	$	2,226
Comprehensive income (loss)	$	3,505		$	8,834		$	(9,154	)	$	(13,417	)	$	(10,232	)

21

Xerium Technologies, Inc.

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

For the six months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	93,381		$	208,617		$	(23,869	)	$	278,129
Costs and expenses:
Cost of products sold	(849		)	63,334			132,356			(23,869		)	170,972
Selling	—			10,191			25,916			—			36,107
General and administrative	4,281			2,544			23,315			—			30,140
Research and development	—			4,049			1,203			—			5,252
Restructuring and impairment	1			794			4,625			—			5,420
	3,433			80,912			187,415			(23,869		)	247,891
(Loss) income from operations	(3,433		)	12,469			21,202			—			30,238
Interest (expense) income, net	(14,817		)	2,811			(10,312		)	—			(22,318		)
Foreign exchange (loss) gain	96			(5		)	(289		)	—			(198		)
Equity in subsidiaries income (deficit)	19,977			2,986			—			(22,963		)	—
Loss on extinguishment of debt	(3,123		)	—			—			—			(3,123		)
Dividend income	—			1,555			—			(1,555		)	—
(Loss) income before provision for income taxes	(1,300		)	19,816			10,601			(24,518		)	4,599
Provision for income taxes	(93		)	68			(5,967		)	—			(5,992		)
Net (loss) income	$	(1,393	)	$	19,884		$	4,634		$	(24,518	)	$	(1,393	)
Comprehensive (loss) income	$	(3,196	)	$	19,841		$	1,356		$	(24,518	)	$	(6,517	)

Xerium Technologies, Inc.

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

For the six months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	89,850		$	204,798		$	(23,906	)	$	270,742
Costs and expenses:
Cost of products sold	(808		)	65,424			132,849			(24,148		)	173,317
Selling	—			11,332			27,226			—			38,558
General and administrative	5,264			3,767			22,829			—			31,860
Research and development	—			4,153			1,678			—			5,831
Restructuring and impairment	158			163			4,782			—			5,103
	4,614			84,839			189,364			(24,148		)	254,669
(Loss) income from operations	(4,614		)	5,011			15,434			242			16,073
Interest (expense) income, net	(14,447		)	3,545			(7,816		)	—			(18,718		)
Foreign exchange (loss) gain	(308		)	(3		)	671			—			360
Equity in subsidiaries income (deficit)	14,128			2,388			—			(16,516		)	—
(Loss) income before provision for income taxes	(5,241		)	10,941			8,289			(16,274		)	(2,285		)
Provision for income taxes	(54		)	(73		)	(2,884		)	—			(3,011		)
Net (loss) income	$	(5,295	)	$	10,868		$	5,405		$	(16,274	)	$	(5,296	)
Comprehensive (loss) income	$	(4,663	)	$	11,396		$	(4,169	)	$	(16,274	)	$	(13,710	)

22

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the six months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net (loss) income	$	(1,393	)	$	19,884		$	4,634		$	(24,518	)	$	(1,393	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	595			—			—			—			595
Depreciation	197			3,764			13,706			—			17,667
Amortization of intangibles	—			914			47			—			961
Deferred financing cost amortization	(2,141		)	—			3,759			—			1,618
Foreign exchange loss on revaluation of debt	1,612			—			(288		)	—			1,324
Deferred taxes	—			—			748			—			748
Asset impairment	17			341			720						1,078
Loss (gain) on disposition of property and equipment	1			17			(25		)	—			(7		)
Loss (gain) on extinguishment of debt	3,123												3,123
Provision for doubtful accounts	—			28			94			—			122
Undistributed equity in (earnings) loss of subsidiaries	(19,977		)	(2,986		)	—			22,963			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	—			(2,563		)	(5,246		)	—			(7,809		)
Inventories	—			(45		)	(889		)	—			(934		)
Prepaid expenses	(225		)	(637		)	1,342			—			480
Other current assets	(32		)	120			(391		)	—			(303		)
Accounts payable and accrued expenses	1,338			295			(7,354		)	1,555			(4,166		)
Deferred and other long-term liabilities	82			107			(1,018		)	—			(829		)
Intercompany loans	1,111			(2,344		)	1,233			—			—
Net cash used in operating activities	(15,692		)	16,895			11,072			—			12,275
Investing activities
Capital expenditures, gross	(2,265		)	(1,557		)	(4,635		)	—			(8,457		)
Intercompany property and equipment transfers, net	3			84			(87		)				—
Proceeds from disposals of property and equipment	—			4			350			—			354
Net cash (used in) provided by investing activities	(2,262		)	(1,469		)	(4,372		)	—			(8,103		)
Financing activities
Proceeds from borrowings	199,000												199,000
Principal payments on debt	(104,557		)	—			(93,791		)	—			(198,348		)
Payment of deferred financing fees	(2,772		)										(2,772		)
Intercompany loans	(72,949		)	(15,471		)	88,420			—			—
Net cash provided by (used in) financing activities	18,722			(15,471		)	(5,371		)	—			(2,120		)
Effect of exchange rate changes on cash flows	—			—			(315		)	—			(315		)
Net increase (decrease) in cash	768			(45		)	1,014			—			1,737
Cash and cash equivalents at beginning of period	6,471			36			28,270			—			34,777
Cash and cash equivalents at end of period	$	7,239		$	(9	)	$	29,284		$	—		$	36,514

23

\]Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the six months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
Operating activities
Net (loss) income	$	(5,295	)	$	10,868		$	5,405		$	(16,274	)	$	(5,296	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation	754			—			—			—			754
Depreciation	97			3,943			15,153			—			19,193
Amortization of intangibles	—			1,106			47			—			1,153
Deferred financing cost amortization	1,211			—			525			—			1,736
Foreign exchange loss on revaluation of debt	—			—			381			—			381
Deferred taxes	—			—			(360		)	—			(360		)
Gain on disposition of property and equipment	—			(4		)	(613		)	—			(617		)
Provision for doubtful accounts	—			(66		)	259			—			193
Undistributed equity in (earnings) loss of subsidiaries	(14,128		)	(2,388		)	—			16,516			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	5			1,027			2,829			—			3,861
Inventories	—			2,038			(1,566		)	(242		)	230
Prepaid expenses	1,097			(757		)	(4,416		)	—			(4,076		)
Other current assets	—			1,419			(816		)	—			603
Accounts payable and accrued expenses	(640		)	(1,346		)	(1,623		)	—			(3,609		)
Deferred and other long-term liabilities	195			127			(672		)	—			(350		)
Intercompany loans	796			(484		)	(312		)	—			—
Net cash (used in) provided by operating activities	(15,908		)	15,483			14,221			—			13,796
Investing activities
Capital expenditures, gross	(15		)	(1,293		)	(6,022		)	—			(7,330		)
Intercompany property and equipment transfers, net	343			(337		)	(6		)	—			—
Proceeds from disposals of property and equipment	—			3			978			—			981
Net cash provided by (used in) investing activities	328			(1,627		)	(5,050		)	—			(6,349		)
Financing activities
Principal payments on debt	(6,854		)	—			(8,021		)	—			(14,875		)
Payment of deferred financing fees	(1,027		)	—			(735		)	—			(1,762		)
Intercompany loans	19,017			(14,105		)	(4,912		)	—			—
Net cash provided by (used in) financing activities	11,136			(14,105		)	(13,668		)	—			(16,637		)
Effect of exchange rate changes on cash flows	—			3			(783		)	—			(780		)
Net (decrease) increase in cash	(4,444		)	(246		)	(5,280		)	—			(9,970		)
Cash and cash equivalents at beginning of period	11,548			280			31,738			—			43,566
Cash and cash equivalents at end of period	$	7,104		$	34		$	26,458		$	—		$	33,596

24

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;

• 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, our Quarterly Report for the quarter ended March 31, 2013 on Form 10-Q filed with the SEC on May 7, 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

25

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.

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 six months ended June 30, 2013, our clothing segment represented 65% 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 six months ended June 30, 2013, our roll cover segment represented 35% 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.

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 2013, 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.

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™.

26

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 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

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activities, all research and development is expensed as incurred. Research and development expenses were $2.6 million and $2.9 million for the three months ended June 30, 2013 and 2012, respectively.

Foreign Exchange

We have a geographically diverse customer base. In the six months ended June 30, 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 six months ended June 30, 2013 as compared to the six months ended June 30, 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 $1.5 million, yet income from operations currency effects increased by $1.3 million.

During the six months ended June 30, 2013, we conducted business in nine foreign currencies. The following table provides the average exchange rate for the six months ended June 30, 2013 and the six months ended June 30, 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 six months ended June 30, 2013	Average exchange rate of the U.S. Dollar in the six months ended June 30, 2012
Euro	$1.31 = 1 Euro	$1.30 = 1 Euro
Brazilian Real	$0.49 = 1 Brazilian Real	$0.54 = 1 Brazilian Real
Canadian Dollar	$0.98 = 1 Canadian Dollar	$0.99 = 1 Canadian Dollar
Australian Dollar	$1.01 = 1 Australian Dollar	$1.03 = 1 Australian Dollar

In the six months ended June 30, 2013, we conducted approximately 36% of our operations in Euros, approximately 11% 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 5% 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 and six months ended June 30, 2013 and June 30, 2012 and a discussion of the results of operations during those periods (in thousands):

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	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Domestic income from operations	$	3,710	$	2,997	$	9,036	$	397
Foreign income from operations	9,085		10,883		21,202		15,676
Total income from operations	$	12,795	$	13,880	$	30,238	$	16,073

During the three months and six months ended June 30, 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 six months ended June 30, 2013, we recorded restructuring expenses of approximately $5.4 million. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of two clothing facilities in Spain and Argentina and the closure of a roll cover facility in Charlotte, NC. During the six months ended June 30, 2012, we recorded restructuring expenses of approximately $5.1 million, primarily related to the termination of a sales agency arrangement in Europe and the transfer of equipment from a downsized location.

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Results of Operations

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Net Sales	$	138,324		$	136,378		$	278,129		$	270,742
Costs and expenses:
Cost of products sold	85,674			85,396			170,972			173,317
Selling	17,585			19,070			36,107			38,558
General and administrative	15,506			14,034			30,140			31,860
Research and development	2,599			2,869			5,252			5,831
Restructuring	4,165			1,129			5,420			5,103
	125,529			122,498			247,891			254,669
Income from operations	12,795			13,880			30,238			16,073
Interest expense, net	(13,112		)	(9,120		)	(22,318		)	(18,718		)
Loss on extinguishment of debt	(3,123		)	—			(3,123		)	—
Foreign exchange gain (loss)	50			(180		)	(198		)	360
(Loss) income before provision for income taxes	(3,390		)	4,580			4,599			(2,285		)
Provision for income taxes	(3,489		)	(2,354		)	(5,992		)	(3,011		)
Net (loss) income	$	(6,879	)	$	2,226		$	(1,393	)	$	(5,296	)
Comprehensive loss	$	(9,245	)	$	(10,232	)	$	(6,517	)	$	(13,710	)

Three Months Ended June 30, 2013 Compared to the Three Months Ended June 30, 2012

Net Sales. Net sales for the three months ended June 30, 2013 increased by $1.9 million, or 1.4%, to $138.3 million from $136.4 million for the three months ended June 30, 2012. For the three months ended June 30, 2013, approximately 65% of our net sales were in our clothing segment and approximately 35% were in our roll covers segment.

In our clothing segment, net sales for the three months ended June 30, 2013 increased by $1.3 million, or 1.5%, to $89.4 million from $88.1 million for the three months ended June 30, 2012, primarily due to increased sales volume of $2.0 million in North America and $1.0 million in Asia Pacific and Europe, partially offset by a decrease in sales volume of $1.1 million million in South America and unfavorable currency effects of $0.7 million.

In our roll covers segment, net sales for the three months ended June 30, 2013 increased by $0.6 million or 1.2%, to $48.9 million from $48.3 million for the three months ended June 30, 2012. The increase was primarily due to increased sales volume of $1.1 million in Europe and $0.4 million in South America and favorable currency effects of $0.3 million, partially offset by decreased sales of $1.1 million in Asia Pacific and North America.

Cost of Products Sold. Cost of products sold for the three months ended June 30, 2013 increased by $0.3 million to $85.7 million from $85.4 million for the three months ended June 30, 2012.

In our clothing segment, cost of products sold decreased $0.3 million in the current quarter compared to the second 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 1.2% to 61.3% in the three months ended June 30, 2013 from 62.5% in the three months ended June 30, 2012. This decrease was primarily due to reduced costs as a result of restructuring savings and operational efficiencies, partially offset by an inventory write down that occurred in connection with the closure of the Spain clothing facility.

In our roll covers segment, cost of products sold increased $0.6 million in the current quarter compared to the second quarter of 2012. Cost of products sold, as a percentage of net sales increased by 0.5% to 63.9% for the three months ended June 30, 2013 from 63.4% for the three months ended June 30, 2012. This increase was primarily due to increased labor costs in North America, partially offset by restructuring savings and operational efficiencies.

Selling Expenses. For the three months ended June 30, 2013, selling expenses decreased by $1.5 million, or 7.9% to $17.6 million from $19.1 million for the three months ended June 30, 2012, primarily as a result of restructuring savings.

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General and Administrative Expenses. For the three months ended June 30, 2013, general and administrative expenses increased by $1.5 million, or 10.7% to $15.5 million from $14.0 million for the three months ended June 30, 2012. This increase is primarily a result of an increase of $2.8 million in management incentive expense in 2013 and the reversal of $1.0 million related to a favorable tax contingency settlement in 2012. Partially offsetting these increases was a decrease of $1.1 million as a result of our cost reduction activities, a decrease of $0.9 million due to charges recorded in 2012 related to CEO transition costs and a decrease of $0.3 million in other general and administrative expenses in the three months ended June 30, 2013.

Restructuring Expenses. For the three months ended June 30, 2013, we incurred restructuring expenses of $4.2 million . These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of two clothing facilities in Spain and Argentina and the closure of a roll cover facility in Charlotte, NC. In 2012, we incurred restructuring expenses of $1.1 million, primarily related to costs incurred as a result of the transfer of certain equipment from a downsized location and sales-force reductions made in 2012. 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 June 30, 2013 increased by $4.0 million or 44.0%, to $13.1 million from $9.1 million for the three months ended June 30, 2012. The increase was primarily due to $3.7 million of financing fees paid in connection with our May 2013 debt refinancing that were charged to interest expense.

Loss on Extinguishment of Debt. The loss on extinguishment of debt of $3.1 million in the three months ended June 30, 2013 represents the write-off of deferred financing costs resulting from our previous credit facility. (See Note 3 of the Consolidated Financial Statements and "Liquidity and Capital Resources-Credit Facility and Notes" for further discussion on the refinancing.)

Provision for Income Taxes. For the three months ended June 30, 2013 and June 30, 2012, the provision for income taxes was $3.5 million and $2.4 million. The increase in income tax expense was primarily attributable to increased earnings and the geographic mix of earnings in the second quarter of 2013 as compared to the second 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.

Six Months Ended June 30, 2013 Compared to the Six Months Ended June 30, 2012

Net Sales. Net sales for the six months ended June 30, 2013 increased by $7.4 million, or 2.7%, to $278.1 million from $270.7 million for the six months ended June 30, 2012. For the six months ended June 30, 2013, approximately 65% of our net sales were in our clothing segment and approximately 35% were in our roll covers segment.

In our clothing segment, net sales for the six months ended June 30, 2013 increased by $2.6 million, or 1.5%, to $179.4 million from $176.8 million for the six months ended June 30, 2012, primarily due to increased sales volume of $3.4 million in Asia Pacific, $1.9 million in North America and $1.1 million in Europe, partially offset by unfavorable currency effects of $1.6 million and a decrease in sales volume of $2.2 million in South America.

In our roll covers segment, net sales for the six months ended June 30, 2013 increased by $4.9 million or 5.2%, to $98.8 million from $93.9 million for the six months ended June 30, 2012. The increase was primarily due to increased sales volume of $1.8 million in North America, $1.9 million in Europe and $0.7 million in Asia Pacific and South America.

Cost of Products Sold. Cost of products sold for the six months ended June 30, 2013 decreased by $2.3 million, or 1.3%, to $171.0 million from $173.3 million for the six months ended June 30, 2012.

In our clothing segment, cost of products sold decreased $1.2 million in the six months ended June 30, 2013 compared to the six months ended June 30, 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 1.6% to 61.7% in the six months ended June 30, 2013 from 63.3% in the six months ended June 30, 2012. This decrease was primarily due to reduced costs as a result of restructuring savings and operational efficiencies, partially offset by an inventory write down that occurred in connection with the closure of the Spain clothing facility.

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In our roll covers segment, cost of products sold decreased $1.1 million in the six months ended June 30, 2013 compared to the six months ended June 30, 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 4.4% to 61.9% in the six months ended June 30, 2013 from 66.3% in the six months ended June 30, 2012. This decrease was due to restructuring savings, operational efficiencies and favorable product mix.

Selling Expenses. For the six months ended June 30, 2013, selling expenses decreased by $2.5 million, or 6.5% to $36.1 million from $38.6 million for the six months ended June 30, 2012 primarily as a result of restructuring savings.

General and Administrative Expenses. For the six months ended June 30, 2013, general and administrative expenses decreased by $1.8 million, or 5.6% to $30.1 million from $31.9 million for the six months ended June 30, 2012. This decrease is largely comprised of $4.4 million resulting from our cost reduction activities, a decrease of $1.5 million due to charges recorded in 2012 related to CEO transition costs and a gain of $0.7 million related to insurance recovery from a plant fire. These decreases were partially offset by an increase of $3.1 million in management incentive costs, the reversal of $1.0 million related to a favorable tax contingency settlement in 2012 and an impairment charge of $0.7 million related to an idle facility held for sale at June 30, 2013.

Restructuring Expenses. For the six months ended June 30, 2013, we incurred restructuring expenses of $5.4 million.These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of two clothing facilities in Spain and Argentina and the closure of a roll cover facility in Charlotte, NC. During the six months ended June 30, 2012, we recorded restructuring expenses of approximately $5.1 million, primarily related to the termination of a sales agency arrangement in Europe and the transfer of equipment from a downsized location. See Note 7 to the Consolidated Financial Statements for further discussion on these restructuring activities.

Interest Expense, Net. Net interest expense for the six months ended June 30, 2013 increased by $3.6 million or 19.3%, to $22.3 million from $18.7 million for the six months ended June 30, 2012. The increase was primarily due to the $3.7 million in financing fees paid in connection with our May 2013 debt refinancing that were charged to interest expense.

Loss on Extinguishment of Debt. The loss on extinguishment of debt of $3.1 million in the six months ended June 30, 2013 represents the write-off of deferred financing costs resulting from our previous credit facility. (See Note 3 of the Consolidated Financial Statements and "Liquidity and Capital Resources-Credit Facility and Notes" for further discussion on the refinancing.)

Provision for Income Taxes. For the six months ended June 30, 2013 and June 30, 2012, the provision for income taxes was $6.0 million and $3.0 million respectively. The increase in income tax expense was primarily attributable to increased earnings and the geographic mix of earnings in the second quarter of 2013 as compared to the second 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 $12.3 million for the six months ended June 30, 2013 and $13.8 million for the six months ended June 30, 2012. The $1.5 million decrease was due to an increase in working capital, partially offset increased cash earnings.

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Net cash used in investing activities was $8.1 million for the six months ended June 30, 2013 and $6.3 million for the six months ended June 30, 2012. The increase of $1.8 million was primarily due to the increase in capital expenditures of $1.1 million and an decrease of $0.7 million in proceeds from disposals of property and equipment.

Net cash used in financing activities was $2.1 million and $16.6 million for the six months ended June 30, 2013 and June 30, 2012, respectively. The decrease of $14.5 million was primarily the result of the decrease of $15.5 million in principal payments made on debt in 2013, partially offset by an increase of $1.0 million in financing fees paid in 2013.

As of June 30, 2013, the outstanding balance of our term debt under our New Term Credit Facility and Notes was $435.4 million. In addition, as of June 30, 2013, we had no outstanding borrowings under our current ABL Facility and had an aggregate of $24.0 million available for additional borrowing. The borrowing availability represents the borrowing base under the ABL Facility less commitments on outstanding letters of credit. Additionally, at June 30, 2013, we had $5.0 million available for borrowings from other credit facilities.

We expect to incur expense of approximately $13.7 million related to the continuation of our restructuring initiatives in 2013. We have incurred $5.4 million in the six months ended June 30, 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 six months ended June 30, 2013 and 2012, we had capital expenditures of $8.5 million and $7.3 million. We are targeting capital expenditures of $33.0 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 17, 2013, we entered into a Credit and Guaranty Agreement for a $200 million term loan credit facility (the “New Term Credit Facility”) among us, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions. We also entered into a Revolving Credit and Guaranty Agreement for a $40 million asset-based revolving credit facility subject to a borrowing base (the “ABL Facility,” and collectively with the New Term Credit Facility, the “New Credit Facility”) among us, Xerium Canada Inc., as Canadian borrower, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions.

The New Term Credit Facility provides for:

• a six-year $200 million senior secured term loan facility, provided the facility would mature in March 2018 if any of the Company's senior notes due 2018 ("Senior Notes") remain outstanding at that time; and

• an uncommitted accordion option (the “Incremental Facility”) allowing for increases for borrowings under the New Term Credit Facility with the same terms, and borrowing of new tranches of term loans, up to an aggregate principal amount equal to (i) $75 million plus (ii) an additional amount (the “Facility Increase”) provided, if after giving effect to such Facility Increase (as well as any other additional term loans), on a pro forma basis, the Senior Secured Leverage Ratio (as defined in the New Term Credit Facility) for the most recent four consecutive fiscal quarters does not exceed 2.25:1.

The ABL Facility provides for a $40 million senior secured revolving credit facility with a $20 million sub-limit on letters of credit. Availability under the ABL Facility is subject to a borrowing base that is based on a specified percentage of eligible accounts receivable and inventory. The term of the ABL Facility is five years, provided that if any of the Senior Notes remain outstanding in March 2018, the ABL Facility would mature at that time.

We used the borrowings under the New Term Credit Facility to refinance all of our outstanding indebtedness under our previously existing senior secured term loan and revolving credit facility entered into in 2011 (the "2011 Credit Facility"). We intend to draw upon the ABL Facility from time-to-time for working capital and general corporate purposes.

The New Term Credit Facility will require us to make amortization payments (payable in quarterly installments) equal to 1% of principal per annum with respect to the Term Loans with the remaining amount due at final maturity. Voluntary

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prepayments will be permitted, in whole or in part, subject to minimum prepayment requirements; provided that prepayments made prior to the date that is six months after the Closing Date of the New Term Credit Facility for the purpose of repricing or effectively repricing the term loan facilities must include a 1.0% prepayment premium; provided, further, that voluntary prepayments of loans bearing interest at the London Interbank Offered Rate (“LIBOR”) on a date other than the last day of the relevant interest period will be subject to the payment of customary breakage costs.

The interest rates under the New Term Credit Facility will be calculated, at our option, at either the base rate or LIBOR, plus a margin of 4.00% and 5.00%, respectively. Each of the base rate and LIBOR shall be subject to a minimum of 2.25% and 1.25%, respectively. If our Senior Secured Leverage Ratio (as defined in the $200 Million New Credit Facility) is less than 2.00:1 at any quarterly determination date, then the margins over the base rate and LIBOR will be 3.50% and 4.50%, respectively.

Depending on whether advances are made in U.S. Dollars or Canadian Dollars, interest rates under the ABL Facility will be calculated, at our option, at either a U.S.-based or Canadian-based base rate ("Base Rate Loans") or LIBOR or the Canadian Dealer Offered Rate ("CDOR") (each, "Fixed Rate Loans"), respectively, plus a margin of 1.25% for Base Rate Loans and a margin of 2.25% for Fixed Rate Loans. If we draw advances on the ABL Facility that are greater than 33.3% but less than or equal to 66.7% of the $40 million limit, then the margins on Base Rate Loans and Fixed Rate Loans drop to 1.00% and 2.00%, respectively. The margins drop to 0.75% and 1.75%, respectively, if advances under the ABL Facility are greater than 66.7% of the $40 million limit. In addition to paying interest on outstanding advances under the ABL Facility, we will be required to pay a commitment fee to the lenders in respect of the unutilized commitments at a rate equal to 0.50% per annum if advances under the ABL Facility are less than or equal to 50% of the commitments or a rate equal to 0.375% per annum if advances under the ABL are more than 50% of the commitments.

The obligations under the New Credit Facility will be 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, in the case of the ABL Facility, by Xerium Canada Inc. and any future Canadian subsidiaries, provided that non-U.S. guarantors will only be liable for obligations of Xerium Canada Inc. and any other Canadian borrowers. The New Term Credit Facility is secured by a first-priority perfected security interest in substantially all of the assets of the Company, Xerium Canada Inc. and such subsidiary guarantors (collectively, the “Loan Parties”), in each case, now owned or later acquired, except with respect to the Loan Parties' accounts receivables and inventory, which are secured by a second-priority interest. The ABL Facility is secured by a first-priority perfected security interest in the Loan Parties' accounts receivables and inventory, and a second-priority interest in substantially all of the Loan Parties' other assets. In each case, the security interests are subject to certain exceptions and legal and tax considerations and requirements, including that only 65% of the voting capital stock of the domestic Loan Parties' “first-tier” non-U.S. subsidiaries is required to be pledged in respect of the obligations of the Company and the U.S. guarantors under the New Credit Facility.

The New Credit Facility contains certain customary covenants that, subject to exceptions, restrict our ability to, among other things:

•declare dividends or redeem or repurchase equity interests;

•prepay, redeem or purchase debt;

•incur liens and engage in sale-leaseback transactions;

•make loans and investments;

•incur additional indebtedness;

•amend or otherwise alter debt and other material agreements;

•make capital expenditures in excess of $42 million per fiscal year, subject to adjustment;

•engage in mergers, acquisitions and asset sales;

•transact with affiliates; and

•engage in businesses that are not related to the Company's existing business.

The New Credit Facility eliminates the interest coverage and leverage coverage ratio maintenance tests that were contained in the 2011 Credit Facility. However, the ABL Facility contains a springing Fixed Charge Coverage Ratio (as defined in the ABL Facility), which must be not less than 1.00:1 during periods in which our Global Excess Availability (as defined in the ABL Facility and generally, equal to our borrowing base less outstanding borrowings under the ABL Facility and trade payables at least 60 days past due) falls below certain minimum thresholds.

The New Credit Facility contains certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain indebtedness, certain events of bankruptcy, certain triggering events under U.S. and, in the case of the ABL Facility, Canadian employee benefit plans, material judgments, actual or asserted failures of any guarantee or security document supporting the New Credit Facility to be in full force and effect and a change of control. If an event of default occurs, the lenders under the New Credit Facility would be entitled to take various enforcement actions, including acceleration of amounts due under the New Credit Facility and all actions permitted to be taken by a secured creditor.

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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”).The Notes contain customary covenants that, subject to certain exceptions, restrict our ability to enter into certain transactions and engage in certain activities.

We are in compliance with all covenants under the Notes and New Credit Facility at June 30, 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 (each as defined in the New Term 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. 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” 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 connection with plant closures, (v) consolidated operational restructuring costs, subject to annual limitations provided for in the Credit Facility, (vi) non-cash charges 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 cancellation of indebtedness income.

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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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net (loss) income	$	(6,879	)	$	2,226		$	(1,393	)	$	(5,296	)
Stock-based compensation	300			(218		)	595			754
Depreciation	8,702			9,429			17,667			19,193
Amortization of intangibles	385			576			961			1,153
Deferred financing cost amortization	909			682			1,618			1,736
Foreign exchange loss on revaluation of debt	1,268			373			1,324			381
Deferred taxes	466			(179		)	748			(360		)
Asset impairment	150			—			1,078			—
Gain (loss) on disposition of property and equipment	3			(170		)	(7		)	(617		)
Loss on extinguishment of debt	3,123			—			3,123			—
Net change in operating assets and liabilities	(6,610		)	(9,075		)	(13,439		)	(3,148		)
Net cash provided by operating activities	1,817			3,644			12,275			13,796
Interest expense, excluding amortization	12,203			8,438			20,700			16,981
Net change in operating assets and liabilities	6,610			9,075			13,439			3,148
Current portion of income tax expense	3,023			2,533			5,244			3,371
Stock-based compensation	(300		)	218			(595		)	(754		)
Foreign exchange loss on revaluation of debt	(1,268		)	(373		)	(1,324		)	(381		)
Asset impairment	(150		)	—			(1,078		)	—
Gain (loss) on disposition of property and equipment	(3		)	170			7			617
Loss on extinguishment of debt	(3,123		)	—			(3,123		)	—
EBITDA	18,809			23,705			45,545			36,778
Loss on extinguishment of debt	3,123			—			3,123			—
Stock-based compensation	300			(218		)	595			754
Operational restructuring expenses	4,165			1,129			5,420			5,103
Inventory write off	692			—			692			—
Non-restructuring impairment (income) expense	(191		)	—			666			—
Legal fees related to term debt amendment	—			85			—			85
Non-recurring CEO retirement expenses	—			695			—			1,496
Adjusted EBITDA	$	26,898		$	25,396		$	56,041		$	44,216

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our foreign currency exposure and interest rate risks as of June 30, 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 June 30, 2013, we had outstanding long-term debt with a carrying amount of $435.5 million with an approximate fair value of $433.3 million.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. We have carried out an evaluation, as of June 30, 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

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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 June 30, 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 factors 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 July 29, 2013 when our stock price closed at $12.33, our 30-day average market capitalization was $180.4 million and at June 30, 2013, our stockholders’ deficit was $35.1 million, as reflected on the balance sheet included in this June 30, 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)
August 1, 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(1)	New $200 million credit facility among the Company, certain direct and indirect U.S. subsidiaries of the Company, and certain financial institutions, dated May 17, 2013.
10.2(2)	New $40 million revolving credit facility among the Company, certain direct and indirect U.S. and Canadian subsidiaries of the Company, and certain financial institutions, dated May 17, 2013.
10.3	Amendment No. 2 to the 2010 Equity Incentive Plan.
10.4	2013-2015 Executive Long-Term Incentive Plan and Form of Award Agreement.
10.5	Employment Agreement of Michael Bly.
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	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

(1) Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 23, 2013, and incorporated herein by reference.

(2) Filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K on May 23, 2013, and incorporated herein by reference.

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EX-10.3

Exhibit 10.3

AMENDMENT NO. 2 TO

XERIUM TECHNOLOGIES, INC.

2010 EQUITY INCENTIVE PLAN

This Amendment No. 2 to the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “Amendment”) is made on March 12, 2013, effective as of the time provided below.

WHEREAS, Xerium Technologies, Inc. (the “Company”) has heretofore adopted the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “Plan”); and

WHEREAS, the Board of Directors of the Company has approved the Amendment contingent upon the approval of the Amendment by the stockholders of the Company.

NOW, THEREFORE, BE IT RESOLVED, that, pursuant to Section 10(d) of the Plan, the Plan is hereby amended as follows, effective as of such time as the Amendment is approved by the stockholders of the Company:

1.    Section 5(a) of the Plan is amended by deleting the first sentence thereof and replacing it with the following sentence:

“Subject to adjustment under subsection (b), no more than 1,663,525 shares of Common Stock in the aggregate may be delivered under or in satisfaction of Awards, comprising 463,525 shares of Common Stock originally authorized under the Plan, 450,000 additional shares authorized by Amendment No. 1 to the Plan, and 750,000 additional shares authorized by Amendment No. 2 to the Plan; provided, however, that to the extent that equity incentive awards granted prior to the Effective Date pursuant to the Company's 2005 Equity Incentive Plan, as amended, do not vest on or after the Effective Date in accordance with their terms, the number of shares of Common Stock subject to such unvested awards shall be added to the number of shares that may be delivered hereunder.

2.    Section 5(c) of the Plan is amended in its entirety to read as follows:

“c. Limit on Individual Grants. The maximum number of shares of Common Stock subject to Options and Stock Appreciation Rights that may be granted to any Participant in the aggregate in any calendar year shall not exceed, in each case, 500,000, and the maximum number of shares of Common Stock that may be granted as Stock Awards pursuant to Section 8 to any Participant in the aggregate in any calendar year shall not exceed 500,000, subject in each case to adjustment under subsection (b). The maximum cash award that may be granted to any participant in a calendar year is $2,000,000. In the case of an award with a multi-year performance period, the foregoing 500,000 share and $2,000,000 limits will apply to each calendar year (or pro rata portion thereof) in the performance period. ”

3.    Except as expressly amended hereby, all provisions of the Plan shall remain unamended and shall continue to be, and shall remain, in full force and effect in accordance with their respective terms.

4.    The Amendment shall have no effect until such time as it is approved by the stockholders of the Company.

5.    The provisions of the Amendment shall be governed by and interpreted in accordance with the laws of the State of Delaware.

EX-10.4

Exhibit 10.4

XERIUM TECHNOLOGIES, INC.

2013-2015 LONG TERM INCENTIVE PLAN

This Xerium Technologies, Inc. 2013-2015 Executive Long Term Incentive Plan (the “Executive LTIP”) contains rules supplemental to those set forth in the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “EIP”). The Executive LTIP provides for the grant of 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 Executive LTIP 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 Executive LTIP 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 Program. Eligibility to participate in the Executive LTIP shall be limited to executive officers who are selected by the Committee to participate in the Executive LTIP 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 this Executive LTIP. 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.Determination of Number of Shares. The number of shares of Common Stock covered by an Award (the “LTIP Shares”) shall be as determined by the Committee and set forth in Schedule 1 to the Award Agreement.

3.Determination of Time-Based Versus Performance-Based LTIP Shares. Participants will receive fifty percent (50%) of their LTIP Shares in the form of time-based Restricted Stock Units as described in Section 4 below (“Time-Based RSUs”) and have the remainder of their LTIP Shares (fifty percent (50%)) credited to them as performance-based stock units (“Performance Stock Units”) as described in Section 5 below, to be earned and vested subject to satisfaction of certain performance conditions. The performance period is the three-year period comprising a three year period beginning on the date of each Participant’s grant and ending on the third (3^rd) anniversary of such grant date.

4.General Terms of Time-Based RSUs. Any LTIP Shares that are to be conveyed in the form of Time-Based RSUs will be granted as of the date set forth in Schedule 1 to the Award Agreement. The Award Agreement provides that the RSUs shall vest on the third (3^rd) anniversary of such grant date and settle in shares of Common Stock as soon as administratively possible after the third (3^rd) anniversary of such grant date, but in all events before the 15^th day of the third month following December 31 following the third (3^rd) anniversary of such grant date.

5.General Terms of Performance Stock Units. The determination of the number of shares of Common Stock to be delivered at the end of the three-year performance period with respect to the Performance Stock Units (the “Performance Shares”) shall be made in accordance with the provisions of the Award Agreement. The Award Agreement provides that the Performance Stock Units will vest based on achievement of Common Stock price thresholds. Vested Performance Shares will be delivered in shares of Common Stock as soon as administratively possible after the third (3^rd) anniversary of such grant date, but in all events before the 15^th day of the third month following December 31 following the third (3^rd) anniversary of such grant date.

- 1 -

6.Forfeiture Upon Termination of Employment. Except as provided in the Award Agreement with respect to a Change of Control, death or Disability or a termination of employment by the Company without Cause or by the Participant with Good Reason (as “Disability”, “Cause” and “Good Reason” are defined in the Award Agreement), notwithstanding vesting under Section 4 or Section 5, no Time-Based RSUs or Performance Shares shall be payable to or in respect of a Participant unless the Participant is employed by the Company or a subsidiary on the third (3^rd) anniversary of such grant date.

7.Tax Withholding. The minimum tax withholding amount with respect to any payments being made in Common Stock may be satisfied by means of share withholding at the time the Award is settled as provided in the Award Agreement.

8.Intent to be Exempt from Section 162(m). The portion of the Award paid in Time-Based RSUs is not intended to qualify for the performance-based compensation exception under Section 162(m) of the Code. The portion of the Award paid in Performance Shares is intended to qualify for the performance-based compensation exception under Section 162(m) of the Code.

9.Nature of Awards. Awards hereunder are intended as Stock Unit Awards pursuant to the EIP. The Executive LTIP is unfunded.

10.Availability of Stock. If, when Time-Based RSUs or Performance Shares become payable, the number of shares of Common Stock needed exceeds the number of shares then available under the EIP, or exceeds any limit established by the Board on the number of shares delivered in the same fiscal year, the Company will pay out the value of any share that was not delivered in cash on the date otherwise scheduled for delivery of shares and determine its value by using the per-share closing price of the Common Stock on the date immediately preceding the date the shares would have been delivered had there been a sufficient number available. Any substitution of cash for shares in such event shall be applied pro rata to all Participants entitled to a distribution by reason of the same event.

11.Clawback. If a Participant receives an Award payout under the Executive LTIP based on financial statements that are subsequently required to be restated in a way that would decrease the number of Shares to which the Participant was entitled, the Participant will refund to the Company the difference between what the Participant received and what the Participant 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 Shares delivered 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.

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

13.409A. This Executive LTIP and the Time-Based RSUs and Performance Stock Units 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.

Exhibit A

XERIUM TECHNOLOGIES, INC.

LTIP SHARE AGREEMENT

(2013-2015 Executive LTIP)

Pursuant to the terms of the Xerium Technologies, Inc. Long Term Incentive Plan effective for fiscal years 2013 through 2015 (the “2013-2015 Executive LTIP”) and the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “Plan”), Xerium Technologies, Inc. (the “Company”) hereby grants to (the “Employee”) the LTIP Shares described below.

1.    The LTIP Share Award. The LTIP Share Award is subject to the terms and conditions of this LTIP Share Agreement, the 2013-2015 Executive LTIP and the Plan. The Company hereby grants LTIP Shares to the Employee, the number of LTIP Shares specified on Schedule 1, as of the date specified on Schedule 1, subject to the terms and conditions of this Agreement and the Plan (the “Award”). An Award shall be paid hereunder, only to the extent that the Employee has a nonforfeitable right to such portion of the Award, as provided in this Agreement. The Employee’s rights to the LTIP Shares 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.    Definitions. The following definitions will apply for purposes of this Agreement. Capitalized terms not defined in the Agreement are used as defined in the Plan.

(a)    “Agreement” means this LTIP Share Agreement granted by the Company and agreed to by the Employee.

(b)    “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).

(c)    “Change of Control” shall mean any of the following which takes place after the Grant 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 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).

(d)    “Change of Control Termination” means a termination of the Employee’s employment with the Company or a member of the Company Group that occurs within three (3) months prior to a Change of Control as a result of (x) termination by a member of the Company Group without Cause or (y) a Good Reason Termination.

(e)    “Common Stock” means the common stock of the Company, $0.01 par value.

(f)    “Company Group” means the Company together with its Affiliates.

(g)    “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).

(h)    “Fair Market Value” means, on the applicable date, or if the applicable date is not a date on which the NYSE is open the next preceding date on which the NYSE was open, the last sale price with respect to such Common Stock reported on the NYSE or, if on any such date such Common Stock is not quoted by NYSE, the average of the closing bid and asked prices with respect to such Common Stock, as furnished by a professional market maker making a market in such Common Stock selected by the Committee in good faith; or, if no such market maker is available, the fair market value of such Common Stock as of such day as determined in good faith by the Committee.

(i)    “Good Reason Termination” shall mean a termination of employment by the Employee with “Good Reason,” as such term is defined 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.

(j)    “Grant Date” means the date specified on Schedule 1.

(k)    “NYSE” means the New York Stock Exchange.

(l)    “Person” means any individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, or other entity or group, and “Affiliated Person” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or is under common control with such Person.

(m)    “Pro Rata Portion” shall mean the product of (x) a fraction, the numerator of which is, as of the time of measurement, the number of months (rounded down to the nearest whole number) occurring since January 1, 2013 and the denominator of which is 36 and (y) 100% of the LTIP Shares not previously Vested.

(n)    “Vested” means that portion of the Award to which the Employee has a nonforfeitable right.

3.    Vesting. Subject to Sections 5 and 6 below:

(a)    Time-Based RSUs shall become Vested on the third (3^rd) anniversary of the Grant Date.

(b)    Performance Shares shall become Vested in a percentage amount(s) on the date(s) that the closing trading price of Common Stock on the New York Stock Exchange (or such other exchange on which Common Stock may be traded) equals or exceeds specified threshold amounts for thirty (30) consecutive trading days. The threshold closing trading price amounts and the corresponding percentage amount(s) of Performance Shares that shall become Vested when the closing trading price equals or exceeds such specified threshold amounts shall be specified by the Compensation Committee and delivered to the Employee in a separate writing.

(c)    Notwithstanding subsections (a) and (b), except as provided in Sections 5 and 6, all LTIP Shares shall be forfeited if Employee’s employment terminates for any reason whatsoever before the third (3^rd) anniversary of the Grant Date.

4.    Payment of Award. Subject to Sections 5 and 6 below, as soon as practicable after the third (3^rd) anniversary of the Grant Date, and in all events before the 15^th day of the third month following December 31 following the third (3^rd) anniversary of the Grant Date, the Company shall issue to the Employee that number of shares of Common Stock as equals that number of LTIP Shares which have become Vested.

5.    Change of Control. In the event of a Change of Control, then all Time-Based RSUs and Performance Shares shall become fully and immediately Vested and if Employee incurred a Change of Control Termination all Time-Based RSUs and Performance Shares otherwise forfeited upon such termination shall become fully and immediately Vested, and shall be distributed in shares and to the extent practicable shall be distributed immediately preceding the effective time of the Change of Control transaction with respect to LTIP Shares that become Vested in connection with a Change of Control.

6.    Termination of Employment.

(a)    Resignation or Termination by the Company. If the Employee ceases to be employed by the Company Group as a result of resignation, dismissal or any other reason, then the portion of the Award that has not previously Vested shall be forfeited automatically; provided that in the event of a termination of Employee’s employment by a member of the Company Group without Cause, as a result of death or Disability or a Good Reason Termination, a portion of the LTIP Shares (both Time-Based RSUs and Performance Shares) equal to the Pro Rata Portion of the LTIP Shares as of the time of termination shall Vest immediately prior to such termination and be distributed as soon as practicable thereafter, and in all events before the 15^th day of the third month following the end of the calendar year in which such LTIP Shares became Vested.

(b)    Meaning of termination of employment. If the Company or a member of the Company Group provides Employee a written notice of termination of employment but the termination of employment is not effective for a period of more than thirty (30) days due to applicable law or contractual arrangements between a member of the Company Group and the Employee, for the purposes of this Award, including without limitation Section 6(a) hereof, the Employee’s employment shall be deemed terminated and the Employee shall be deemed ceased to be employed by the Company Group on the date that is thirty (30) days from the date of such notice instead of the actual date of termination.

7.    Dividends. No dividend equivalents shall be paid on LTIP Shares (either Time-Based RSUs or Performance Shares).

8.    Clawback. If a Employee receives an Award payout under the Executive LTIP based on financial statements that are subsequently required to be restated in a way that would decrease the number of Shares 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 Shares delivered 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.

9.    Miscellaneous.

(a)    Adjustments Based on Certain Changes in the Common Stock. In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted.

(b)    No Voting Rights. The Award shall not be interpreted to bestow upon the Employee any equity interest or ownership in the Company or any Affiliate prior to the date that Common Stock is distributed in settlement of an LTIP Award, and then only with respect to the shares of Common Stock issued on such Date.

(c)    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.

(d)    Withholding. The Employee is responsible for payment of any taxes required by law to be withheld by the Company with respect to an Award. To facilitate that payment, the Company will, to the extent permitted by law, retain from the number of shares of Common Stock issued to the Employee in settlement of an LTIP Award that number of shares necessary for payment of the minimum tax withholding amount, valued at their Fair Market Value on the business day most immediately preceding the date of retention. To the extent the Company’s withholding obligation cannot be satisfied by means of share withholding, the Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind due to the Employee.

(e)    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.

(f)    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.

(g)    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.

(h)    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.

(i)    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.

(j)    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.

(k)    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.

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

10.    Grant Conditional. The Award granted hereunder is granted conditional upon the approval of the shareholders of the Company of an amendment to the Plan to provide for a re-load of the amount of shares permitted to be granted under the Plan that would permit the granting of the Award hereunder and all similar awards granted to senior management of the Company contemporaneously with such Award. In the event such amendment does not receive such shareholder approval, the Award granted hereunder shall be void and this Agreement shall immediately and without further action terminate and be of no further force and effect.

IN WITNESS WHEREOF, Xerium Technologies, Inc. has executed this LTIP Share Agreement as of the date first written above.

Xerium Technologies, Inc.

By:    
Name:     Harold Bevis
Title:     President and CEO

Acknowledged and agreed:

Employee

By:    
Name:    

Schedule 1

Grant Date:             March 11, 2013

Number of LTIP Shares:     _____________

Allocation of LTIP Shares Granted:

Number of Time-Based RSUs	Number of Performance Shares
_____________________	______________________

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into in North Carolina by and between Xerium Technologies, Inc. (the “Company”), a Delaware corporation with its principal place of business in Raleigh, North Carolina and Michael Bly (the “Executive”), effective as of the 15th day of March, 2013 (the “Effective Date”).

WHEREAS, subject to the terms and conditions hereinafter set forth, the Company wishes to employ the Executive in the position of Executive Vice President of Global Human Resources and the Executive wishes to accept such employment;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions and conditions set forth in this Agreement, the parties hereby agree:

1.Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts employment.

2.Term. The employment of the Executive by the Company hereunder shall be for the period commencing on the Effective Date and expiring on the date of the termination of such employment in accordance with Section 5 hereof. For all purposes of this Agreement, references to (a) the “Termination Date” shall mean the date the Executive’s employment hereunder shall terminate pursuant to said Section 5, and (b) references to the “term” of the Executive’s employment hereunder shall mean the period commencing on the Effective Date and ending on the Termination Date. Following the Termination Date, unless specifically otherwise agreed between the Executive and any applicable party, the Executive shall cease to hold any position (whether as an officer, director, manager, employee, trustee, fiduciary or otherwise) with the Company or any of its Subsidiaries or Affiliates.

3.Capacity and Performance; Work Location.

(a)During the term of the Executive’s employment hereunder, the Executive shall serve the Company as its Executive Vice President of Global Human Resources. In addition, and without further compensation, the Executive may serve as a director and/or officer of one or more of the Company’s Subsidiaries, if so elected or appointed from time to time.

(b)During the term of the Executive’s employment hereunder, the Executive shall be employed by the Company on a full-time basis and shall perform such duties and responsibilities on behalf of the Company and its Subsidiaries as may be designated from time to time by the Chief Executive Officer or the Board of Directors of the Company (the “Board”).

(c)During the term of the Executive’s employment hereunder, the Executive shall devote his full business time to the advancement of the business and interests of the Company and its Subsidiaries and to the discharge of his duties and responsibilities hereunder. The Executive shall not engage in any other business activity or serve in any industry, trade, professional, governmental or academic position during the term of this Agreement, except as may be expressly approved in advance by the Chief Executive Officer in writing.

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(d)During the term of Executive’s employment hereunder, in the event Executive does not choose to relocate to the Raleigh, North Carolina area, Executive’s primary business location shall be his home office in Virginia, provided, however, travel to the Company’s and its Subsidiaries’ manufacturing plants and office locations shall be required as necessary to fulfill Executive’s employment duties hereunder.

4.Compensation and Benefits. During the term of the Executive’s employment hereunder as compensation for all services performed by the Executive:

(a)Base Salary. The Company shall pay the Executive a base salary at the rate of Two Hundred Fifty Thousand Dollars ($250,000.00) per year, payable in accordance with the payroll practices of the Company for its executives and subject to increase from time to time by the Board, in its sole discretion. Such base salary, as from time to time adjusted, is hereafter referred to as the “Base Salary.”

(b)Annual Bonus Plan. The Executive shall be entitled to participate in any and all annual bonus plans (the “Annual Bonus Plans”) from time to time in effect for senior executives of the Company generally. The terms of each Annual Bonus Plan and Executive’s participation therein, including the form of payment, shall be determined by the compensation committee of the Board (or, if there is no such committee, by the Board); provided, however, that the Executive shall be entitled to participate in such plans at a target opportunity equal to fifty percent (50%) of his Base Salary (pro-rated in 2013 based on employment commencement date) provided that the Executive is employed by the Company on the payment date with any awards thereunder payable only to the extent earned pursuant to the terms of the applicable Annual Bonus Plan and subject to adjustment in accordance with the terms of the applicable Annual Bonus Plan. Notwithstanding the foregoing, no award under the Annual Bonus Plans may be granted if the compensation committee determines that in order for such award to qualify as performance-based for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), the Plan must be submitted to and approved, or resubmitted to and approved, by the stockholders of the Company in accordance with the requirements of Section 162(m) of the Code, unless such grant is made contingent upon such approval. The compensation committee of the Board (or, if there is no such committee, the Board) may alter, modify, add to or delete any Annual Bonus Plan at any time as it, in its sole judgment determines to be appropriate.

(c)Long Term Incentive. The Executive shall be entitled to participate in any awards granted under any Long Term Incentive Program (the “LTIP”) or similar equity participation plans from time to time in effect for senior executives of the Company generally. For 2013, it is anticipated that Executive’s participation in the LTIP shall provide for a grant of Restricted Stock Units with a value on the date of grant not to exceed $125,000, fifty percent (50%) of which shall have time-based vesting with a three year cliff and fifty percent (50%) of which shall have stock price based performance vesting requirements; all of which terms will be determined by the compensation committee of the Board (or, if there is no such committee, by the Board), which may alter, modify, add to or delete any LTIP at any time as it, in its sold judgment, determines to be appropriate. A grant of awards under any LTIP or other equity participation plan will be made to

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the Executive at the same time and on the same terms as awards are made to other participants in such plan and will be subject to all the terms and conditions of such plan.

(d)Other Incentive Plans. The Executive shall be entitled to participate in any and all cash, equity, bonus and other incentive plans not otherwise described herein from time to time in effect for senior executives of the Company generally. The terms of each such plan and the Executive’s participation therein shall be determined by the compensation committee of the Board (or, if there is no such committee, by the Board). The compensation committee of the Board (or, if there is no such committee, the Board) may alter, modify, add to or delete any such plan at any time as it, in its sole judgment, determines to be appropriate.

(e)Vacations. The Executive shall be entitled to an annual vacation of four (4) weeks, with reasonable advance notice and subject to the reasonable business needs of the Company. Vacation shall otherwise be governed by the policies of the Company, as in effect from time to time.

(f)Other Benefits. Subject to any contribution therefor generally required of executives of the Company, the Executive shall be entitled to participate in any and all employee benefit plans from time to time in effect for executives of the Company generally, except to the extent such plans are in a category of benefit specifically otherwise provided to the Executive under this Agreement (e.g., severance pay). Such participation shall be subject to the terms of the applicable plan documents and generally applicable Company policies. The Board may alter, modify, add to or delete employee benefit plans at any time as it, in its sole judgment, determines to be appropriate.

(g)Certain Perquisites. The Company shall provide the Executive while he continues to be employed by the Company with: (i) participation in the Company’s standard executive automobile program pursuant to which he would receive a current amount of six hundred dollars ($600.00) per month as an automobile allowance; and (ii) eligibility for reimbursement of up to five hundred dollars ($500.00) per month in country club monthly dues, to be paid to the Executive monthly through an expense report reimbursement.

(h)Business Expenses. The Company shall pay or reimburse the Executive for all reasonable and necessary business expenses incurred or paid by the Executive in the performance of his duties and responsibilities hereunder (including, without limitation, (1) mileage at the applicable Internal Revenue Service rate for any business-related automobile travel and (2) hotel and other reasonable travel expenses for Executive’s trips to the Company’s Raleigh, North Carolina headquarters), subject to any maximum annual limit or other restrictions on such expenses set by the Board and to such reasonable substantiation and documentation as may be specified by the Company from time to time. In the case of any reimbursement to which the Executive is entitled pursuant to this Section 4(h) that would constitute deferred compensation subject to Section 409A of the Code, the following additional rules shall apply: (i) the reimbursable expense must have been incurred, except as otherwise expressly provided in this Agreement, during the term of this Agreement; (ii) the amount of expenses eligible for reimbursement during any calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement shall be made not later than December 31 of the calendar year following the calendar year in which the expense was incurred; and (iv) the Executive’s entitlement to reimbursement shall not be subject to liquidation or exchange for another benefit.

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(i)Sign-On Award. The Executive shall be entitled to a one-time signing bonus in the amount of fifty thousand dollars ($50,000.00) which shall be paid on the Effective Date.

(j)Relocation Expenses. In the event Executive chooses to relocate to the Raleigh, North Carolina area, the Company shall provide the Executive with the Company’s standard relocation benefits package to relocate to the Raleigh, North Carolina area, a copy of which has been provided to Executive.

(k)Payments/Actions by Company. Wherever it is provided in this Agreement that payment of any form of compensation or any other action shall be made by the Company, such payment or action may be made by any Subsidiary or Affiliate of the Company.

5.Termination of Employment. The Executive’s employment hereunder shall terminate under the following circumstances:

(a)Death. In the event of the Executive’s death during the term of Executive’s employment hereunder, the Executive’s employment shall immediately and automatically terminate.

(b)Disability. The Company may terminate the Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled during his employment hereunder. For this purpose, disability means that the Executive (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 twelve (12) 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 twelve (12) 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. If any question shall arise as to whether during any period the Executive is disabled within the meaning of this Section 5(b), the Executive, at the request of the Company, shall submit to a medical examination by a physician selected by the Company to determine whether the Executive is so disabled and such determination shall for the purposes of this Agreement be conclusive of the issue. If such question shall arise and the Executive shall fail to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive.

(c)By the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause at any time upon notice to the Executive setting forth the nature of such Cause. The following shall constitute Cause for termination: (i) the Executive’s conviction of or plea of nolo contendere to a felony or other crime involving moral turpitude; (ii) the Executive’s fraud, theft or embezzlement committed with respect to the Company or its Subsidiaries; (iii) material breach by the Executive of any of the provisions of Sections 8, 9 or 10 hereof that causes demonstrable harm to the Company or any of its Subsidiaries; or (iv) the Executive’s willful and continued failure to perform his material duties to the Company and its Subsidiaries; provided, however, that the Company may terminate Executive’s employment hereunder for “Cause” within the meaning of this clause (iv) only after the Company has provided written notice to the Executive

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of the failure and the Executive shall not have remedied such failure within ten (10) business days following the effectiveness of such notice.

(d)By the Company Other than for Cause. The Company may terminate the Executive’s employment, hereunder other than for Cause at any time upon notice to the Executive.

(e)By the Executive Other than for Good Reason. The Executive may terminate his employment hereunder other than for Good Reason (as defined in Section 5(f) below) at any time upon the provision of sixty (60) days written notice to the Company. In the event of termination of the Executive pursuant to this Section 5(e), the Board may elect to waive the period of notice or any portion thereof.

(f)By the Executive for Good Reason. The Executive may terminate his employment hereunder for Good Reason upon written notice to the Company setting forth in reasonable detail the nature of such Good Reason; provided, that such written notice must be delivered to the Company within ninety (90) days of the initial existence of the condition or circumstance constituting or giving rise to the purported Good Reason. A termination by the Executive hereunder shall not be treated as a termination for Good Reason if the Company remedies the condition or circumstance constituting or giving rise to the purported Good Reason within thirty (30) days of the receipt of the Executive’s notice, or if actual termination occurs more than two years following the initial existence of such condition or circumstance. The following shall constitute Good Reason for purposes of this subsection (f): a requirement,following the Executive’s relocation of his principal residence to a location within reasonable commuting distance of the Company’s offices in Raleigh, North Carolina,that the Executive relocate more than fifty (50) miles from his then-current principal residence, it being understood that the Executive may be required to travel frequently and that prolonged periods spent away from Executive’s principal residence shall not constitute Good Reason.

6.Compensation upon Termination.

(a)Death. In the event of a termination of the Executive’s employment hereunder by reason of death as contemplated by Section 5(a), the Company shall pay in a lump sum within thirty (30) days of such termination to the Executive’s designated beneficiary or, if no beneficiary has been designated by the Executive, to his estate, the Base Salary earned but not paid through the Termination Date.

(b)Disability. In the event of any termination of the Executive’s employment hereunder by reason of disability as contemplated by Section 5(b), the Company shall pay to the Executive his Base Salary earned but not paid through the date of the notice required by Section 5(b) and, in addition, shall, subject to any employee contribution applicable to the Executive on the Termination Date, continue to contribute to the premium cost of the Executive’s participation in the Company’s group medical and dental plans for eighteen (18) months (or such longer period as may be provided under the employee benefit plans of the Company), but only if the Executive does not have access at reasonable cost to substantially equivalent benefits through another employer, and provided that the Executive is entitled to continue such participation under applicable law and plan terms.

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(c)By the Company for Cause. In the event of any termination of the Executive’s employment hereunder by the Company for Cause as contemplated by Section 5(c), the Company shall have no further obligations to the Executive under this Agreement other than payment of Base Salary through the Termination Date and except as specifically provided in Section 6(g).

(d)By the Company Other than for Cause or by the Executive for Good Reason.

(i)    Not Close in Time to a Change of Control. In the event of any termination of the Executive’s employment hereunder by the Company pursuant to Section 5(d) or by the Executive pursuant to Section 5(f), which occurs after the Executive has completed at least three (3) months of employment with the Company and which termination does not occur within three (3) months prior to or within two (2) years following a Change of Control, the Company (A) shall continue to pay the Executive the Base Salary at the rate in effect on the Termination Date for eighteen (18) months, and (B) subject to any employee contribution applicable to the Executive on the Termination Date, shall continue to contribute to the premium cost of the Executive’s participation in the Company’s group medical and dental plans for eighteen (18) months (or such longer period as may be provided under the employee benefit plans of the Company), but only if the Executive does not have access at reasonable cost to substantially equivalent benefits through another employer, and provided that the Executive is entitled to continue such participation under applicable law and plan terms.

(ii)    Close in Time to a Change of Control. In the event of any termination of the Executive’s employment hereunder by the Company pursuant to Section 5(d) or by the Executive pursuant to Section 5(f), which occurs after the Executive has completed at least three (3) months of employment with the Company and which termination occurs within three (3) months prior to or within two (2) years following a Change of Control, the Company (A) shall continue to pay the Executive the Base Salary at the rate in effect on the Termination Date for two (2) years, and (B) subject to any employee contribution applicable to the Executive on the Termination Date, shall continue to contribute to the premium cost of the Executive’s participation in the Company’s group medical and dental plans for two (2) years (or such longer period as may be provided under the employee benefit plans of the Company), but only if the Executive does not have access at reasonable cost to substantially equivalent benefits through another employer, and provided that the Executive is entitled to continue such participation under applicable law and plan terms.

(iii)    Conditions. Any obligation of the Company to the Executive under Sections 6(b) and 6(d) hereof is conditioned upon (A) the Executive’s signing a release of claims in such form as the Company may require (the “Employee Release”) and (B) the Executive’s continued full performance of his continuing obligations hereunder, including those under Sections 8, 9 and 10. The Employee Release shall be provided to the Executive within seven (7) days following the Termination Date and the Executive must execute it within the time period specified in the Employee Release which shall not be longer than forty-five (45) days. The Employee Release shall not be effective until any applicable revocation period has expired. Base Salary to which the Executive is entitled under Sections 6(b) and 6(d) hereof shall be payable in accordance with the normal payroll practices of the Company in effect on the Termination Date and will begin at the Company’s next regular payroll period which is at least five (5) business days following the effective

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date of the Employee Release, but shall be retroactive to next business day following the Termination Date, provided, however, that in all cases, such payments shall commence within ninety (90) days following the Executive’s separation from service, and further provided that if the ninety (90) day period begins in one taxable year for the Executive and ends in the subsequent taxable year for the Executive, then the payments shall not commence until the subsequent taxable year pursuant to the guidance provided in IRS Notice 2010-80.

(e)By the Executive Other than for Good Reason. If the Executive shall terminate his employment pursuant to Section 5(e), the Company shall continue to pay the Executive his Base Salary through the Termination Date (it being understood that if, in accordance with Section 5(e), the Board elects to waive the period of notice, or any portion thereof, the payment of Base Salary under this Section 6(e) shall continue through the notice period or any portion thereof so waived).

(f)Delay in Payment Commencement on Account of Internal Revenue Code Section 409A. If the Executive is, at the time of separation from service, a “specified employee” (as hereinafter defined), any and all amounts payable in connection with such separation from service that constitute deferred compensation subject to Section 409A of the Code, as determined by the Company in its sole discretion, and that would (but for this sentence) be payable within six (6) months following such separation from service, shall not be paid until the date which is six (6) months and one (1) day after the date of such separation from service or, if earlier, the Executive’s date of death. In this regard, any payments that otherwise would have been made during such six (6) month period shall be paid to the Executive in a lump sum on the first date on which they may be paid, together with interest credited at the short-term applicable federal rate, compounded daily. For purposes of this subsection (f), “specified employee” means an individual determined by the Company to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A of the Code. The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409 A of the Code, any of the special elective rules prescribed in Section 1.409A-l(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of this Agreement.

(g)Post-Termination Obligations Generally. Except for (i) any right expressly set forth in this Section 6, (ii) any vested benefits under any employee benefit plan referred to in Section 4(f) which specifically is designed to provide benefits following termination of employment (such as any such plan providing benefits upon disability or retirement) (but subject to all of the terms, if any, of each such other benefit plan as to how such vested benefits will be treated following termination of employment) and (iii) any rights expressly set forth in any other written agreement to which Executive and any of the Company or any of its Subsidiaries or Affiliates shall become parties from time to time after the date hereof, neither the Company nor any of its Subsidiaries or Affiliates shall have any further obligations to the Executive, in connection with his employment or the termination thereof, following expiration of the term of the Executive’s employment hereunder. Satisfaction by the Company and other applicable Persons of such rights and benefits shall constitute full settlement of any claim that the Executive may have on account of any termination of employment hereunder against the Company, any of its Subsidiaries or Affiliates and all of their respective past and present officers, directors, stockholders, members, managers,

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partners, controlling Persons, employees, agents, representatives, successors and assigns and all other others connected with any of them, both individually and in their official capacities.

7.Limitation.

(a)In the event that it is determined that any payment or benefit provided by the Company or any of its Subsidiaries to or for the benefit of the Executive, either under this Agreement or otherwise, and regardless of under what plan or arrangement it was made, would, absent the application of this Section 7, be subject to excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, or any successor provision (“Section 4999”), the Company will reduce such payments and/or benefits to the extent, but only to the extent, necessary so that no portion of the remaining payments and/or benefits will be subject to the Excise Tax. The Company shall have discretion in determining which, if any, of several payments and/or benefits (if more than one) are to be reduced.

(b)Determinations as to the amount of any cutback required under this Section 7 will be made by the Company’s tax accountant unless the Executive has reasonable objections to the use of that firm, in which case the determinations will be made by a comparable firm chosen jointly by the Company and the Executive (the firm making the determinations to be referred to as the “Firm”). The determinations of the Firm will be binding upon the Company and the Executive except as the determinations are established in resolution (including by settlement) of a controversy with the Internal Revenue Service to have been incorrect. All fees and expenses of the Firm will be paid by the Company.

8.Restricted Activities. The Executive 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:

(a)While the Executive is employed by the Company and for eighteen (18) months after his employment terminates (or two (2) years if the Executive is terminated in accordance with Section 6(d)(ii) above) (the “Non-Competition Period”) the Executive shall not, whether as owner, partner, investor, consultant, agent, employee, co-venturer 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, the Executive agrees that during the Non-Competition Period, he 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 8, the Executive’s undertaking shall encompass all items, products and services that may be used in substitution for Products.

(b)The Executive 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.

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(c)The Executive further agrees that while he is employed by the Company and during the Non-Competition Period, the Executive 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 the Executive’s obligations hereunder during that portion of the Non-Competition Period that follows the Termination Date, 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 Termination Date.

(d)In the event that the eighteen (18) month or two (2) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be twelve (12) months.

9.Confidential Information.

(a)The Executive acknowledges that the Company and its Subsidiaries continually develop Confidential Information, that the Executive may develop Confidential Information for the Company or its Subsidiaries during his employment with the Company, and that the Executive may learn of Confidential Information during the course of such employment. The Executive 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 the Executive incident to his employment or other association with the Company or any of its Subsidiaries. The Executive understands that this restriction shall continue to apply after his employment terminates, regardless of the reason for such termination.

(b)All documents, records, 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 the Executive, shall be the sole and exclusive property of the Company and its Subsidiaries. The Executive 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 Executive’s possession or control.

10.Assignment of Rights to Intellectual Property. The Executive shall promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the Executive’s full right, title and interest in and to all Intellectual Property. The Executive 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

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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. The Executive will not charge the Company for time spent in complying with these obligations. All copyrightable works that the Executive creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company.

11.Notification Requirement. Until the conclusion of the Non-Competition Period, the Executive shall give notice to the Company of each new business activity that he plans to undertake at least thirty (30) days prior to beginning any such activity. Such notice shall state the name and address of the Person for whom such activity is undertaken and the nature of the Executive’s business relationship(s) and position(s) with such Person. The Executive shall provide the Company with such other pertinent information concerning such business activity as the Company may reasonably request in order to determine the Executive’s continued compliance with his obligations under Sections 8, 9 and 10 hereof.

12.Enforcement of Covenants. The Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 8, 9 and 10 hereof. The Executive agrees that said restraints are necessary for the reasonable and proper protection of the Company and its Subsidiaries and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further acknowledges that, were he to breach any of the covenants contained in Sections 8, 9 and 10 hereof, the damage to the Company would be irreparable. The Executive therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Executive of any of said covenants, without having to post bond. The parties further agree that, in the event that any provision of Sections 8, 9 and 10 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision may be “blue penciled” or written by the court to the extent necessary to render it enforceable to the maximum extent permitted by law.

13.Conflicting Agreements. The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not now subject to any covenants against competition or similar covenants or any court order or other legal obligation that would affect the performance of his obligations hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary information of a third party without such party’s consent.

14.Definitions. Words or phrases which are initially capitalized or are within quotation marks shall have the meanings provided in this Section 14 and as provided elsewhere herein. For purposes of this Agreement, the following definitions apply:

(a)“Affiliate” means, with respect to the Company or any other specified Person, any other Person directly or indirectly controlling, controlled by or under common control with the

10

Company or such other specified Person, where control may be by management authority, equity interest or other means.

(b)“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.

(c)“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 Products, (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.

(d)“Continuing Director” means, with respect to any event referred to in the definition of “Change of Control,” each individual who was a director of the Company immediately prior to the event in question and each individual whose election as a director by the Board or whose nomination for election by the stockholders of the Company was approved by a vote of two-thirds of the directors then still in office who were directors immediately prior to such event or whose election or nomination was previously so approved.

11

(e)“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 the Executive (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 the Executive’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.

(f)“Person” means an individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust and any other entity or organization.

(g)“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 the Executive’s employment with the Company or any of its Subsidiaries (including prior to the Effective Date if applicable).

(h)“Subsidiary” shall mean any Person of which the Company (or other specified Person) shall, directly or indirectly, own beneficially or control the voting of at least a majority of the outstanding capital stock (or other shares of beneficial interest) entitled to vote generally or at least a majority of the partnership, membership, joint venture or similar interests, or in which the Company (or other specified Person) or a Subsidiary thereof shall be a general partner or joint venturer without limited liability.

(i)All references in this Agreement to termination of employment, separation from service, retirement and similar or correlative terms, when used in a context that bears upon the vesting, payment or timing of payment of any amounts or benefits that constitute or could constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, shall be construed to require a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-l(h)(3) of the Treasury Regulations. Each installment payment required under this Agreement shall be considered a separate payment for purposes of Section 409A. The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A of the Code, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of this Agreement.

15.Survival. The provisions of this Agreement shall survive following the Termination Date if so provided herein or desirable to accomplish the purposes of other surviving provisions, including without limitation the provisions of Sections 6, 7, 8, 9, 10, 11 and 14 through 26.

16.Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

12

17.Assignment. The Executive may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the Company. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns.

18.Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

19.Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

20.Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person, when delivered by courier at the Executive’s last known address on the books of the Company, or five (5) business days following deposit in the United States mail, postage prepaid, registered or certified, and addressed to the Executive at his last known address on the books of the Company or, in the case of the Company, at its principal place of business, attention of the Chairman of the Board or to such other address as either party may specify by notice to the other actually received.

21.Entire Agreement. This Agreement and the other plans and documents specifically referred to herein constitute the entire agreement between the parties regarding the subject matter of this Agreement and such other plans and documents and supersede all prior communications, agreements and understandings, written or oral, with respect to such subject matter.

22.Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by an expressly authorized representative of the Company.

23.Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.

24.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

25.Governing Law. This is a North Carolina contract and shall be construed and enforced under and be governed in all respects by the laws of the State of North Carolina, without regard to the conflict of laws principles thereof.

26.Consideration. The parties expressly waive any defense either may now or hereafter have as to the lack of inadequacy of consideration for this Agreement.

13

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

14

IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Executive, and by the Company, through its duly authorized representative, as the date first above written.

THE EXECUTIVE:    XERIUM TECHNOLOGIES, INC.

/s/ Michael Bly_______________    By: /s/ Harold C. Bevis            

Michael Bly        Harold C. Bevis

President and Chief Executive Officer

15

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: August 1, 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: August 1, 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 June 30, 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 June 30, 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)

August 1, 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 June 30, 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 June 30, 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)

August 1, 2013

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Description of Business and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 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 six months ended June 30, 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 June 30, 2013.

Warranties

Warranties

The Company offers warranties on certain rolls 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 (Loss) Income Per Common Share

Net (loss) income 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.

XML

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net sales	$ 138,324	$ 136,378	$ 278,129	$ 270,742
Costs and expenses:
Cost of products sold	85,674	85,396	170,972	173,317
Selling	17,585	19,070	36,107	38,558
General and administrative	15,506	14,034	30,140	31,860
Research and development	2,599	2,869	5,252	5,831
Restructuring and impairment	4,165	1,129	5,420	5,103
Operating Costs and Expenses, Total	125,529	122,498	247,891	254,669
Income from operations	12,795	13,880	30,238	16,073
Interest expense, net	(13,112)	(9,120)	(22,318)	(18,718)
Loss on extinguishment of debt	(3,123)	0	(3,123)	0
Foreign exchange (loss) gain	50	(180)	(198)	360
(Loss) income before provision for income taxes	(3,390)	4,580	4,599	(2,285)
Provision for income taxes	(3,489)	(2,354)	(5,992)	(3,011)
Net income (loss)	(6,879)	2,226	(1,393)	(5,296)
Comprehensive loss	$ (9,245)	$ (10,232)	$ (6,517)	$ (13,710)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.45)	$ 0.15	$ (0.09)	$ (0.35)
Diluted (in dollars per share)	$ (0.45)	$ 0.15	$ (0.09)	$ (0.35)
Shares used in computing net income (loss) per share:
Basic (in shares)	15,370,223	15,226,995	15,340,471	15,194,432
Diluted (in shares)	15,370,223	15,236,651	15,340,471	15,194,432

XML

Pensions, Other Post-retirement and Post-employment Benefits

6 Months Ended

Jun. 30, 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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Service cost	$	966		$	888		$	1,939		$	1,773
Interest cost	1,548			1,838			3,108			3,668
Expected return on plan assets	(1,401		)	(1,377		)	(2,813		)	(2,750		)
Amortization of prior service cost	—			4			3			7
Amortization of net loss	571			633			1,143			1,266
Net periodic benefit cost	$	1,684		$	1,986		$	3,380		$	3,964

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2013 and 2012.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended June 30, 2013:
Net Sales	$	89,414	$	48,910	$	—		$	138,324
Segment Earnings (Loss)	$	20,148	$	10,592	$	(3,842	)
Three Months Ended June 30, 2012:
Net Sales	$	88,115	$	48,263	$	—		$	136,378
Segment Earnings (Loss)	$	15,861	$	12,126	$	(2,591	)
Six Months Ended June 30, 2013:
Net Sales	$	179,351	$	98,778	$	—		$	278,129
Segment Earnings (Loss)	$	38,210	$	24,662	$	(6,831	)
Six Months Ended June 30, 2012:
Net Sales	$	176,798	$	93,944	$	—		$	270,742
Segment Earnings (Loss)	$	30,622	$	20,016	$	(6,421	)

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

rovided below is a reconciliation of Segment earnings income (loss) to (loss) income before provision for income taxes for the three and six months ended June 30, 2013 and 2012, respectively.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Segment Earnings (Loss):
Clothing	$	20,148		$	15,861		$	38,210		$	30,622
Roll Covers	10,592			12,126			24,662			20,016
Corporate	(3,842		)	(2,591		)	(6,831		)	(6,421		)
Stock-based compensation	(300		)	218			(595		)	(754		)
Inventory write-off	(692		)	—			(692		)	—
Impairment expense	191			—			(666		)
Legal fees related to term debt amendment				(85		)				(85		)
Non-recurring expenses related to CEO retirement	—			(695		)	—			(1,496		)
Interest expense, net	(13,112		)	(9,120		)	(22,318		)	(18,718		)
Depreciation and amortization	(9,087		)	(10,005		)	(18,628		)	(20,346		)
Loss on debt extinguishment	(3,123		)	—			(3,123		)	—
Restructuring expense	(4,165		)	(1,129		)	(5,420		)	(5,103		)
(Loss) income before provision for income taxes	$	(3,390	)	$	4,580		$	4,599		$	(2,285	)

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Description of Business and Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of Inventories

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

	June 30, 2013		December 31, 2012
Raw materials	$	17,825	$	16,924
Work in process	24,127		23,681
Finished goods (includes consigned inventory of $7,948 at June 30, 2013 and $8,726 at December 31, 2012.)	33,584		36,786
	$	75,536	$	77,391

Changes In Warranty Liability

The table below represents the changes in the Company’s warranty liability for the six months ended June 30, 2013:

	Balance at December 31, 2012		Charged to Revenue or Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Balance at June 30, 2013
For the six months ended June 30, 2013	$	1,848	$	794	$	(16	)	$	(786	)	$	1,840

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 June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
Weighted-average common shares outstanding–basic	15,370,223	15,226,995	15,340,471	15,194,432
Dilutive effect of stock-based compensation awards outstanding	—	9,656	—	—
Weighted-average common shares outstanding–diluted	15,370,223	15,236,651	15,340,471	15,194,432

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Stock-Based Compensation and Stockholders' Deficit - Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 300		$ (218)		$ 595		$ 754
RSU And DSU Awards
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	300	[1]	344	[1]	595	[1]	754	[1]
Management Incentive/Performance Award Programs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 0	[2]	$ (562)	[2]	$ 0	[2]	$ 0	[2]

[1] Related to RSUs, Options 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, adjusted for payout based on the projected performance targets. In March of 2013, the Compensation Committee approved the 2013 Management Incentive Compensation Award Program. This award, if earned, will be paid out entirely in cash, and therefore, the expense is no longer considered stock compensation.

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Long-term Debt - Maturities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Total Scheduled Principal Payments including balloon payments
2013	$ 1,134
2014	2,000
2015	2,000
2016	2,000
2017	2,000
2018 and thereafter	427,410
Carrying value of long-term debt	436,544
Total Estimated Interest Payments
2013	16,710
2014	32,308
2015	32,194
2016	32,079
2017	31,964
2018 and thereafter	15,983
Total	$ 161,238

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Description of Business and Significant Accounting Policies - Components of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventories, Net [Abstract]
Raw materials	$ 17,825	$ 16,924
Work in process	24,127	23,681
Finished goods (includes consigned inventory of $7,948 at June 30, 2013 and $8,726 at December 31, 2012.)	33,584	36,786
Inventories, net	$ 75,536	$ 77,391

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Supplemental Guarantor Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Balance Sheet

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	7,239		$	(9	)	$	29,284		$	—		$	36,514
Accounts receivable, net	—			23,500			65,696			—			89,196
Intercompany receivables	(103,518		)	110,290			(6,772		)	—			—
Inventories, net	—			15,717			60,669			(850		)	75,536
Prepaid expenses	384			2,330			5,981			—			8,695
Other current assets	15			3,340			11,394			—			14,749
Total current assets	(95,880		)	155,168			166,252			(850		)	224,690
Property and equipment, net	2,798			59,781			226,582			—			289,161
Investments	671,680			241,439			—			(913,119		)	—
Goodwill	—			17,737			45,476			—			63,213
Intangible assets	11,824			3,862			341			—			16,027
Other assets	41			—			7,682			—			7,723
Total assets	$	590,463		$	477,987		$	446,333		$	(913,969	)	$	600,814
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	1,262		$	8,592		$	21,954		$	—		$	31,808
Accrued expenses	6,700			7,622			44,825			—			59,147
Current notes payable	—			—			7,806						7,806
Current maturities of long-term debt	2,000			—			134			—			2,134
Total current liabilities	9,962			16,214			74,719			—			100,895
Long-term debt, net of current maturities	433,410			—			—			—			433,410
Deferred and long-term taxes	—			2,334			12,966			—			15,300
Pension, other post-retirement and post-employment obligations	21,702			1,108			57,449			—			80,259
Other long-term liabilities	69			—			5,980			—			6,049
Intercompany loans	214,537			(332,015		)	117,478			—			—
Total stockholders’ (deficit) equity	(89,217		)	790,346			177,741			(913,969		)	(35,099		)
Total liabilities and stockholders’ equity	$	590,463		$	477,987		$	446,333		$	(913,969	)	$	600,814

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.

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

For the three months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	47,265		$	103,218		$	(12,159	)	$	138,324
Costs and expenses:
Cost of products sold	(399		)	32,470			65,762			(12,159		)	85,674
Selling	—			4,972			12,613			—			17,585
General and administrative	2,299			1,738			11,469			—			15,506
Research and development	—			2,037			562			—			2,599
Restructuring and impairment	(118		)	556			3,727			—			4,165
	1,782			41,773			94,133			(12,159		)	125,529
(Loss) income from operations	(1,782		)	5,492			9,085			—			12,795
Interest (expense) income, net	(8,113		)	1,405			(6,404		)	—			(13,112		)
Foreign exchange (loss) gain	(87		)	9			128			—			50
Equity in subsidiaries income (deficit)	6,273			(1,768		)	—			(4,505		)	—
Loss on extinguishment of debt	(3,123		)										(3,123		)
Dividend income	—			—			—			—			—
(Loss) income before provision for income taxes	(6,832		)	5,138			2,809			(4,505		)	(3,390		)
Provision for income taxes	(47		)	(38		)	(3,404		)	—			(3,489		)
Net (loss) income	$	(6,879	)	$	5,100		$	(595	)	$	(4,505	)	$	(6,879	)
Comprehensive (loss) income	$	(8,449	)	$	5,279		$	(1,570	)	$	(4,505	)	$	(9,245	)

Xerium Technologies, Inc.

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

For the three months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	45,787		$	102,122		$	(11,531	)	$	136,378
Costs and expenses:
Cost of products sold	(336		)	32,009			65,350			(11,627		)	85,396
Selling	—			5,609			13,461			—			19,070
General and administrative	1,151			2,129			10,754			—			14,034
Research and development	—			2,083			786			—			2,869
Restructuring and impairment	122			23			984			—			1,129
	937			41,853			91,335			(11,627		)	122,498
(Loss) income from operations	(937		)	3,934			10,787			96			13,880
Interest (expense) income, net	(7,092		)	1,766			(3,794		)	—			(9,120		)
Foreign exchange (loss) gain	(154		)	3			(29		)	—			(180		)
Equity in subsidiaries income (deficit)	10,435			3,078			—			(13,513		)	—
Income (loss) before provision for income taxes	2,252			8,781			6,964			(13,417		)	4,580
Provision for income taxes	(26		)	(33		)	(2,295		)	—			(2,354		)
Net income (loss)	$	2,226		$	8,748		$	4,669		$	(13,417	)	$	2,226
Comprehensive income (loss)	$	3,505		$	8,834		$	(9,154	)	$	(13,417	)	$	(10,232	)

Consolidating Statement of Cash Flows

erium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the six months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net (loss) income	$	(1,393	)	$	19,884		$	4,634		$	(24,518	)	$	(1,393	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	595			—			—			—			595
Depreciation	197			3,764			13,706			—			17,667
Amortization of intangibles	—			914			47			—			961
Deferred financing cost amortization	(2,141		)	—			3,759			—			1,618
Foreign exchange loss on revaluation of debt	1,612			—			(288		)	—			1,324
Deferred taxes	—			—			748			—			748
Asset impairment	17			341			720						1,078
Loss (gain) on disposition of property and equipment	1			17			(25		)	—			(7		)
Loss (gain) on extinguishment of debt	3,123												3,123
Provision for doubtful accounts	—			28			94			—			122
Undistributed equity in (earnings) loss of subsidiaries	(19,977		)	(2,986		)	—			22,963			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	—			(2,563		)	(5,246		)	—			(7,809		)
Inventories	—			(45		)	(889		)	—			(934		)
Prepaid expenses	(225		)	(637		)	1,342			—			480
Other current assets	(32		)	120			(391		)	—			(303		)
Accounts payable and accrued expenses	1,338			295			(7,354		)	1,555			(4,166		)
Deferred and other long-term liabilities	82			107			(1,018		)	—			(829		)
Intercompany loans	1,111			(2,344		)	1,233			—			—
Net cash used in operating activities	(15,692		)	16,895			11,072			—			12,275
Investing activities
Capital expenditures, gross	(2,265		)	(1,557		)	(4,635		)	—			(8,457		)
Intercompany property and equipment transfers, net	3			84			(87		)				—
Proceeds from disposals of property and equipment	—			4			350			—			354
Net cash (used in) provided by investing activities	(2,262		)	(1,469		)	(4,372		)	—			(8,103		)
Financing activities
Proceeds from borrowings	199,000												199,000
Principal payments on debt	(104,557		)	—			(93,791		)	—			(198,348		)
Payment of deferred financing fees	(2,772		)										(2,772		)
Intercompany loans	(72,949		)	(15,471		)	88,420			—			—
Net cash provided by (used in) financing activities	18,722			(15,471		)	(5,371		)	—			(2,120		)
Effect of exchange rate changes on cash flows	—			—			(315		)	—			(315		)
Net increase (decrease) in cash	768			(45		)	1,014			—			1,737
Cash and cash equivalents at beginning of period	6,471			36			28,270			—			34,777
Cash and cash equivalents at end of period	$	7,239		$	(9	)	$	29,284		$	—		$	36,514

\]Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the six months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
Operating activities
Net (loss) income	$	(5,295	)	$	10,868		$	5,405		$	(16,274	)	$	(5,296	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation	754			—			—			—			754
Depreciation	97			3,943			15,153			—			19,193
Amortization of intangibles	—			1,106			47			—			1,153
Deferred financing cost amortization	1,211			—			525			—			1,736
Foreign exchange loss on revaluation of debt	—			—			381			—			381
Deferred taxes	—			—			(360		)	—			(360		)
Gain on disposition of property and equipment	—			(4		)	(613		)	—			(617		)
Provision for doubtful accounts	—			(66		)	259			—			193
Undistributed equity in (earnings) loss of subsidiaries	(14,128		)	(2,388		)	—			16,516			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	5			1,027			2,829			—			3,861
Inventories	—			2,038			(1,566		)	(242		)	230
Prepaid expenses	1,097			(757		)	(4,416		)	—			(4,076		)
Other current assets	—			1,419			(816		)	—			603
Accounts payable and accrued expenses	(640		)	(1,346		)	(1,623		)	—			(3,609		)
Deferred and other long-term liabilities	195			127			(672		)	—			(350		)
Intercompany loans	796			(484		)	(312		)	—			—
Net cash (used in) provided by operating activities	(15,908		)	15,483			14,221			—			13,796
Investing activities
Capital expenditures, gross	(15		)	(1,293		)	(6,022		)	—			(7,330		)
Intercompany property and equipment transfers, net	343			(337		)	(6		)	—			—
Proceeds from disposals of property and equipment	—			3			978			—			981
Net cash provided by (used in) investing activities	328			(1,627		)	(5,050		)	—			(6,349		)
Financing activities
Principal payments on debt	(6,854		)	—			(8,021		)	—			(14,875		)
Payment of deferred financing fees	(1,027		)	—			(735		)	—			(1,762		)
Intercompany loans	19,017			(14,105		)	(4,912		)	—			—
Net cash provided by (used in) financing activities	11,136			(14,105		)	(13,668		)	—			(16,637		)
Effect of exchange rate changes on cash flows	—			3			(783		)	—			(780		)
Net (decrease) increase in cash	(4,444		)	(246		)	(5,280		)	—			(9,970		)
Cash and cash equivalents at beginning of period	11,548			280			31,738			—			43,566
Cash and cash equivalents at end of period	$	7,104		$	34		$	26,458		$	—		$	33,596

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Summarized Financial Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Net sales	$ 138,324	$ 136,378	$ 278,129	$ 270,742
Segment Earnings (Loss)	12,795	13,880	30,238	16,073
Clothing
Segment Reporting Information [Line Items]
Net sales	89,414	88,115	179,351	176,798
Segment Earnings (Loss)	20,148	15,861	38,210	30,622
Roll Covers
Segment Reporting Information [Line Items]
Net sales	48,910	48,263	98,778	93,944
Segment Earnings (Loss)	10,592	12,126	24,662	20,016
Corporate
Segment Reporting Information [Line Items]
Segment Earnings (Loss)	$ (3,842)	$ (2,591)	$ (6,831)	$ (6,421)

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Derivatives and Hedging - Notional Amounts of Outstanding Foreign Exchange Forward Contracts (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Derivatives Sold
Derivative [Line Items]
Non-designated hedges of foreign exchange risk	$ 22,126
Derivatives Purchased
Derivative [Line Items]
Non-designated hedges of foreign exchange risk	$ 14,942

XML

Components Of Net Periodic Benefit Cost (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Pensions, Other Post-Retirement And Post-Employment Benefits [Abstract]
Service cost	$ 966	$ 888	$ 1,939	$ 1,773
Interest cost	1,548	1,838	3,108	3,668
Expected return on plan assets	(1,401)	(1,377)	(2,813)	(2,750)
Amortization of prior service cost	0	4	3	7
Amortization of net loss	571	633	1,143	1,266
Net periodic benefit cost	$ 1,684	$ 1,986	$ 3,380	$ 3,964

XML

Stock-Based Compensation and Stockholders' Deficit - Additional Information (Detail) (USD $)			12 Months Ended	6 Months Ended									3 Months Ended			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Dec. 31, 2010 2010-2012 Long-Term Incentive Plan Time Based Restricted Stock Units (RSU)	Jun. 30, 2013 2012-2014 Executive Long-Term Incentive Plan	Jun. 30, 2013 2012-2014 Executive Long-Term Incentive Plan Time Based Restricted Stock Units (RSU)	Jun. 30, 2013 2012-2014 Executive Long-Term Incentive Plan Time Based Awards	Jun. 30, 2013 2012-2014 Executive Long-Term Incentive Plan Performance Based Awards	Jun. 30, 2013 2012-2014 Executive Long-Term Incentive Plan Performance Based Awards Minimum	Jun. 30, 2013 2012-2014 Executive Long-Term Incentive Plan Performance Based Awards Maximum	Jun. 13, 2013 2010 Equity Incentive Plan [Member]	Jun. 12, 2013 2010 Equity Incentive Plan [Member]	Mar. 12, 2013 2010 Equity Incentive Plan [Member]	Jun. 30, 2013 Chief Executive Officer Chief Executive Officer Stock Plan	Jun. 30, 2013 Retiring Chief Executive Officer Chief Executive Officer Stock Plan	Jun. 30, 2013 Non-Management Directors Plan Deferred Stock Unit (DSUs)	Jun. 30, 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, Number of Shares Authorized										1,663,525	913,525
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized Per Individual										500,000	150,000
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Cash Award Per Participant Per Year												$ 2,000,000
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																$ 112,000
Deferred Compensation Arrangement with Individual, Shares Awarded															8,250
Deferred Compensation Arrangement with Individual, Shares Issued															5,500

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Description of Business and Significant Accounting Policies - Anti-dilutive Shares (Detail) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Dilutive securities outstanding, not included in the computation	1.7	3.2	1.8

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Restructuring and Impairment Expense - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Restructuring and Related Activities [Abstract]
Restructuring expense	$ 4,165	$ 1,129	$ 5,420	$ 5,103

XML

Stock-Based Compensation and Stockholders' Deficit (Tables)

6 Months Ended

Jun. 30, 2013

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

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense during the three and six months ended June 30, 2013 and June 30, 2012 as follows:

	Three Months Ended June 30,					Six Months Ended     June 30,
	2013		2012			2013		2012
RSU and DSU Awards (1)	$	300	$	344		$	595	$	754
Management Incentive/Performance Award Programs (2)	—		(562		)	—		—
Total	$	300	$	(218	)	$	595	$	754

(1) Related to RSUs, Options 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

Description of Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 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 June 30, 2013 and for the three and six months ended June 30, 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:

	June 30, 2013		December 31, 2012
Raw materials	$	17,825	$	16,924
Work in process	24,127		23,681
Finished goods (includes consigned inventory of $7,948 at June 30, 2013 and $8,726 at December 31, 2012.)	33,584		36,786
	$	75,536	$	77,391

In the second quarter of 2013, in connection with the closure of the Spain clothing facility, the Company wrote off $692 of obsolete inventory. This charge is included in cost of products sold expense in the Consolidated Income Statement for the three and six months ended June 30, 2013.

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 six months ended June 30, 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 June 30, 2013.

Warranties

The Company offers warranties on certain rolls 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 six months ended June 30, 2013:

	Balance at December 31, 2012		Charged to Revenue or Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Balance at June 30, 2013
For the six months ended June 30, 2013	$	1,848	$	794	$	(16	)	$	(786	)	$	1,840

Net (Loss) Income Per Common Share

Net (loss) income 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 June 30, 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 June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
Weighted-average common shares outstanding–basic	15,370,223	15,226,995	15,340,471	15,194,432
Dilutive effect of stock-based compensation awards outstanding	—	9,656	—	—
Weighted-average common shares outstanding–diluted	15,370,223	15,236,651	15,340,471	15,194,432

Dilutive securities aggregating approximately 3.2 million and 1.8 million were outstanding for the six months ended June 30, 2013 and June 30, 2012, but were not included in the computation of diluted earnings per share for the three months and six ended June 30, 2013 and 2012, respectively, 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 either restructuring expense if it was a result of the Company's restructuring activities or general and administrative expense in the consolidated statements of operations. Impairment charges associated with restructuring are discussed in Note 7 "Restructuring Expense".

In 2013, the Company determined there was an impairment of $0.7 million to the carrying value of a vacant facility held for sale and certain other assets at March 31, 2013. This impairment charge is included in general and administrative expense in the Consolidated Statements of Operations for the six months ended June 30, 2013.

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Long-term Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

At June 30, 2013 and December 31, 2012, long-term debt consisted of the following:

	June 30, 2013		December 31, 2012
New senior secured term loan facility, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of June 30, 2013, net of $1.0 discount	$	199,000	$	—
Prior first lien debt, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of December 31, 2012	—		104,557
Prior first lien debt, payable quarterly, Euro denominated–EURIBOR (minimum 1.25%) plus 5.00% (6.25%) as of December 31, 2012	—		95,979
	199,000		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
Unsecured, interest rate fixed at 2.00%, Euro denominated	134		135
	435,544		437,081
Less current maturities	2,134		2,397
Total	$	433,410	$	434,684

On May 17, 2013, the Company entered into a Credit and Guaranty Agreement for a $200 million term loan credit facility (the “New Term Credit Facility”), net of a discount of $1.0 million, among the Company, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions. The Company also entered into a Revolving Credit and Guaranty Agreement for a $40 million asset-based revolving credit facility subject to a borrowing base (the “ABL Facility,” and collectively with the New Term Credit Facility, the “New Credit Facility”) among the Company, Xerium Canada Inc., as Canadian borrower, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions.

The New Term Credit Facility provides for:

• a six-year $200 million senior secured term loan facility, provided the facility would mature in March 2018 if any of the Company's senior notes due 2018 ("Senior Notes") remain outstanding at that time; and

• an uncommitted accordion option (the “Incremental Facility”) allowing for increases for borrowings under the New Term Credit Facility with the same terms, and borrowing of new tranches of term loans, up to an aggregate principal amount equal to (i) $75 million plus (ii) an additional amount (the “Facility Increase”) provided, if after giving effect to such Facility Increase (as well as any other additional term loans), on a pro forma basis, the Senior Secured Leverage Ratio (as defined in the New Term Credit Facility) for the most recent four consecutive fiscal quarters does not exceed 2.25:1.

The ABL Facility provides for a $40 million senior secured revolving credit facility with a $20 million sub-limit on letters of credit. Availability under the ABL Facility is subject to a borrowing base that is based on a specified percentage of eligible accounts receivable and inventory. The term of the ABL Facility is five years, provided that if any of the Senior Notes remain outstanding in March 2018, the ABL Facility would mature at that time.

The Company used the borrowings under the New Term Credit Facility to refinance all of its outstanding indebtedness under its previously existing senior secured term loan and revolving credit facility entered into in 2011 (the "2011 Credit Facility"). The Company intends to draw upon the ABL Facility from time-to-time for working capital and general corporate purposes.

The New Term Credit Facility will require the Company to make amortization payments (payable in quarterly installments) equal to 1% of principal per annum with respect to the Term Loans with the remaining amount due at final maturity. Voluntary prepayments will be permitted, in whole or in part, subject to minimum prepayment requirements; provided that prepayments made prior to the date that is six months after the Closing Date of the New Term Credit Facility for the purpose of repricing or effectively repricing the term loan facilities must include a 1.0% prepayment premium; provided, further, that voluntary prepayments of loans bearing interest at the London Interbank Offered Rate (“LIBOR”) on a date other than the last day of the relevant interest period will be subject to the payment of customary breakage costs.

If the total amount of advances outstanding under the ABL Facility exceed either $40 million or the borrowing base, the Company must repay an amount equal to the excess borrowing. If obligations under all outstanding letters of credit exceeds $20 million, the Company must cash collateralize its letters of credit in an amount equal to the excess obligations outstanding.

The interest rates under the New Term Credit Facility will be calculated, at the Company's option, at either the base rate or LIBOR, plus a margin of 4.00% and 5.00%, respectively. Each of the base rate and LIBOR shall be subject to a minimum of 2.25% and 1.25%, respectively. If the Company's Senior Secured Leverage Ratio (as defined in the $200 million New Credit Facility) is less than 2.00:1 at any quarterly determination date, then the margins over the base rate and LIBOR will be 3.50% and 4.50%, respectively.

Depending on whether advances are made in U.S. Dollars or Canadian Dollars, interest rates under the ABL Facility will be calculated, at the Company's option, at either a U.S.-based or Canadian-based base rate ("Base Rate Loans") or LIBOR or the Canadian Dealer Offered Rate ("CDOR") (each, "Fixed Rate Loans"), respectively, plus a margin of 1.25% for Base Rate Loans and a margin of 2.25% for Fixed Rate Loans. If the Company draws advances on the ABL Facility that are greater than 33.3% but less than or equal to 66.7% of the $40 million limit, then the margins on Base Rate Loans and Fixed Rate Loans drop to 1.00% and 2.00%, respectively. The margins drop to 0.75% and 1.75%, respectively, if advances under the ABL Facility are greater than 66.7% of the $40 million limit. In addition to paying interest on outstanding advances under the ABL Facility, the Company will be required to pay a commitment fee to the lenders in respect of the unutilized commitments at a rate equal to 0.50% per annum if advances under the ABL Facility are less than or equal to 50% of the commitments or a rate equal to 0.375% per annum if advances under the ABL are more than 50% of the commitments.

The obligations under the New Credit Facility will be guaranteed by all of the Company's 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, in the case of the ABL Facility, by Xerium Canada Inc. and any future Canadian subsidiaries, provided that non-U.S. guarantors will only be liable for obligations of Xerium Canada Inc. and any other Canadian borrowers. The New Term Credit Facility is secured by a first-priority perfected security interest in substantially all of the assets of the Company, Xerium Canada Inc. and such subsidiary guarantors (collectively, the “Loan Parties”), in each case, now owned or later acquired, except with respect to the Loan Parties' accounts receivables and inventory, which are secured by a second-priority interest. The ABL Facility is secured by a first-priority perfected security interest in the Loan Parties' accounts receivables and inventory, and a second-priority interest in substantially all of the Loan Parties' other assets.

The New Credit Facility contains certain customary covenants that, subject to exceptions, restrict the Company's ability to, among other things:

•declare dividends or redeem or repurchase equity interests;

•prepay, redeem or purchase debt;

•incur liens and engage in sale-leaseback transactions;

•make loans and investments;

•incur additional indebtedness;

•amend or otherwise alter debt and other material agreements;

•make capital expenditures in excess of $42 million per fiscal year, subject to adjustment;

•engage in mergers, acquisitions and asset sales;

•transact with affiliates; and

•engage in businesses that are not related to the Company's existing business.

The New Credit Facility eliminates the interest coverage and leverage coverage ratio maintenance tests that were contained in the Company's 2011 Credit Facility. However, the ABL Facility contains a springing Fixed Charge Coverage Ratio (as defined in the ABL Facility), which must be not less than 1.00:1 during periods in which our Global Excess Availability (as defined in the ABL Facility) falls below certain minimum thresholds.

The New Credit Facility contains certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain indebtedness, certain events of bankruptcy, certain triggering events under U.S. and, in the case of the ABL Facility, Canadian employee benefit plans, material judgments, actual or asserted failures of any guarantee or security document supporting the New Credit Facility to be in full force and effect and a change of control. If an event of default occurs, the lenders under the New Credit Facility would be entitled to take various enforcement actions, including acceleration of amounts due under the New Credit Facility and all actions permitted to be taken by a secured creditor. The material risks associated with the New Credit Facility are substantially similar to the material risks regarding the 2011 Credit Facility identified in the section entitled "Risks Relating to Our Capital Structure" under "Item 1A - Risk Factors" of our Form 10-K for the year-ended December 31, 2012.

The Company has $236.4 million aggregate principal amount of 8.875% senior unsecured notes (the “Notes”). The Notes contain customary covenants that, subject to certain exceptions, restrict its ability to enter into certain transactions and engage in certain activities.

The aggregate scheduled principal payments and estimated interest payments over the term of the New Credit Facility, the Notes and other existing long-term debt are shown below:

	Total Scheduled Principal Payments including balloon payments (in USD)		Total Estimated Interest Payments Converted into U.S. Dollars at June 30, 2013 Exchange Rates (in USD thousands)
2013	$	1,134	$	16,710
2014	2,000		32,308
2015	2,000		32,194
2016	2,000		32,079
2017	2,000		31,964
2018 and thereafter	427,410		15,983
	$	436,544	$	161,238

As of June 30, 2013, the outstanding balance of the Company's term debt under its New Term Credit Facility and Notes was $435.4 million, which is net of a $1.0 million discount. In addition, as of June 30, 2013, the Company had no outstanding borrowings under its current ABL Facility and had an aggregate of $24.0 million available for additional borrowing. The borrowing availability represents the borrowing base under the ABL Facility less commitments on outstanding letters of credit. Additionally, at June 30, 2013, the Company had $5.0 million available for borrowings from other credit facilities.

As of June 30, 2013 and December 31, 2012, the carrying value of the Company’s long-term debt was $435.5 million and $437.1 million, respectively, and its fair value was approximately $433.3 million and $410.1 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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Comprehensive Income and Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Comprehensive (Loss) Income and Accumulated Other Comprehensive Loss

Comprehensive Loss and Accumulated Other Comprehensive Loss

Comprehensive loss for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net (loss) income	$	(6,879	)	$	2,226		$	(1,393	)	$	(5,296	)
Foreign currency translation adjustments	(3,720		)	(13,025		)	(8,112		)	(8,399		)
Pension liability changes under Topic 715	1,013			578			2,615			90
Change in value of derivative instruments	341			(11		)	373			(105		)
Comprehensive loss	$	(9,245	)	$	(10,232	)	$	(6,517	)	$	(13,710	)

The components of accumulated other comprehensive loss for the three months ended June 30, 2013 are as follows (net of taxes):

	Foreign Currency Translation     Adjustment			Pension Liability Changes Under  Topic 715			Change in Value of Derivative Instruments			Accumulated    Other Comprehensive (Loss) Income
Balance at March 31, 2013	$	(1,139	)	$	(42,900	)	$	(612	)	$	(44,651	)
Other comprehensive (loss) income before reclassifications	(3,720		)	560			14			(3,146		)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	—			453			—			453
Amortization of interest expense	—			—			327			327
Net current period other comprehensive (loss) income	(3,720		)	1,013			341			(2,366		)
Balance at June 30, 2013	$	(4,859	)	$	(41,887	)	$	(271	)	$	(47,017	)

The components of accumulated other comprehensive loss for the six months ended June 30, 2013 are as follows (net of taxes):

	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	(8,112		)	1,587			14			(6,511		)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	—			1,028			—			1,028
Amortization of interest expense	—			—			359			359
Net current period other comprehensive (loss) income	(8,112		)	2,615			373			(5,124		)
Balance at June 30, 2013	$	(4,859	)	$	(41,887	)	$	(271	)	$	(47,017	)

For the three and six months ended June 30, 2013. the amortization of actuarial losses is included in cost of products sold and general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

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Income Taxes

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2013, the provision for income taxes was $(3,489) and $(5,992) as compared to $(2,354) and $(3,011) for the three and six months ended June 30, 2012. The increase in tax expense was primarily attributable to the geographic mix of earnings in the three and six months ended June 30, 2013 as compared with the three and six months ended June 30, 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 June 30, 2013, the Company had a gross amount of unrecognized tax benefit of $3,420, exclusive of interest and penalties. The unrecognized tax benefit increased by approximately $146 during the six months ended June 30, 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 six months ended June 30, 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 (“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 denied the amortization of that goodwill against net income for the years 2006 through 2010 and sought payment of approximately $40,200 (subject to currency exchange rates) in tax, penalties and interest as of June 30, 2013. 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 original assessment, but reducing the claimed penalties by 50%. This decision reduced the total assessed amount as of June 30, 2013 by approximately $10,758 to $29,411 (subject to currency exchange rates). 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 June 30, 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. 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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Comprehensive Income and Accumulated Other Comprehensive Loss - Components Of Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Comprehensive Income (Loss) And Accumulated Other Comprehensive Income (Loss) [Abstract]
Net (loss) income	$ (6,879)	$ 2,226	$ (1,393)	$ (5,296)
Foreign currency translation adjustments	(3,720)	(13,025)	(8,112)	(8,399)
Pension liability changes under Topic 715	1,013	578	2,615	90
Change in value of derivative instruments	341	(11)	373	(105)
Comprehensive loss	$ (9,245)	$ (10,232)	$ (6,517)	$ (13,710)

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Description of Business and Significant Accounting Policies - Components of Inventories (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consigned inventory	$ 8,754	$ 8,726

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Description of Business and Significant Accounting Policies - Impairment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Jun. 30, 2012	Jun. 30, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Asset impairment	$ (191)	$ 700	$ 0	$ 666

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Long-term Debt - Additional Information (Detail) (USD $)	6 Months Ended		6 Months Ended							6 Months Ended				6 Months Ended			6 Months Ended					6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Revolving Credit Facility [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] Less than 33.3 percent Base Rate [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] Less than 33.3 percent London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] Between 33.3 percent and 66.7 percent Base Rate [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] Between 33.3 percent and 66.7 percent London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] More than 66.7 percent Base Rate [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] More than 66.7 percent London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 Revolving Credit Facility [Member] Less than 50 percent	Jun. 30, 2013 Revolving Credit Facility [Member] More than 50 percent	Jun. 30, 2013 Revolving Credit Facility [Member] Minimum Between 33.3 percent and 66.7 percent	Jun. 30, 2013 Revolving Credit Facility [Member] Minimum More than 66.7 percent	Jun. 30, 2013 Revolving Credit Facility [Member] Minimum More than 50 percent	Jun. 30, 2013 Revolving Credit Facility [Member] Maximum Less than 33.3 percent	Jun. 30, 2013 Revolving Credit Facility [Member] Maximum Between 33.3 percent and 66.7 percent	Jun. 30, 2013 Revolving Credit Facility [Member] Maximum Less than 50 percent	Jun. 30, 2013 Letter of Credit [Member]	Jun. 30, 2013 Other Credit Facilities [Member]	Mar. 31, 2013 Eight Point Eight Seven Five Percentage Of Senior Unsecured Notes Due On Two Thousand Eighteen	Jun. 30, 2013 New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member]	Jun. 30, 2013 New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member] Term Loan [Member]	Jun. 30, 2013 New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member] Term Loan [Member] Base Rate [Member]	Jun. 30, 2013 New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member] Term Loan [Member] London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member] Term Loan [Member] Below Threshold [Member] Base Rate [Member]	Jun. 30, 2013 New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member] Term Loan [Member] Below Threshold [Member] London Interbank Offered Rate (LIBOR) [Member]	Jun. 30, 2013 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	Dec. 31, 2012 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	Jun. 30, 2013 New Term Credity Facility and Notes [Member]
Debt Disclosure [Line Items]
Debt Instrument, Face Amount																						$ 200,000,000
Debt discount																					1,000,000	1,000,000
Line of Credit Facility, Current Borrowing Capacity			40,000,000															20,000,000
Debt Instrument, Accordion Option, Tranch Amount																						75,000,000
Debt Instrument, Accordion Option, Senior Secured Leverage Ratio Threshold	2.25
Debt Instrument, Collateral, Outstanding Letters of Credit Threshold			20,000,000
Debt Instrument, Basis Spread on Variable Rate				1.25%	2.25%	1.00%	2.00%	0.75%	1.75%														4.00%	5.00%	3.50%	4.50%
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum																							2.25%	1.25%
Debt Instrument, Basis Spread on Variable Rate, Senior Secured Leverage Ratio Threshold																						2.00
Debt Instrument, Basis Spread on Variable Rate, Asset-Based Lending Percentage Threshold												33.30%	66.70%		33.30%	66.70%
Line of Credit Facility, Remaining Borrowing Capacity			24,000,000																5,000,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage										0.50%	0.375%
Debt Instrument, Unused Capacity, Commitment Fee Percentage, Asset-Based Lending Percentage Threshold														50.00%			50.00%
Debt Instrument, Covenant Compliance, Maximum Annual Capital Expenditures			42,000,000
Debt Instrument, Covenant Compliance, Minimum Fixed Charge Coverage Ratio			1.00
Refinancing transaction, outstanding indebtedness																											236,410,000	236,410,000
Debt instrument percentage																				8.875%	6.25%
Long-term debt, net of current maturities	433,410,000	434,684,000
Carrying value of long-term debt	435,544,000	437,081,000																											435,410,000
Fair value of long-term debt	$ 433,300,000	$ 410,000,000

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Supplemental Guarantor Financial Information - Condensed Consolidated Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 36,514	$ 34,777	$ 33,596	$ 43,566
Accounts receivable, net	89,196	84,456
Inventories, net	75,536	77,391
Prepaid expenses	8,695	9,386
Other current assets	14,749	14,839
Total current assets	224,690	220,849
Property and equipment, net	289,161	308,806
Goodwill	63,213	61,127
Intangible assets	16,027	18,678
Other assets	7,723	9,383
Total assets	600,814	618,843
Current liabilities:
Accounts payable	31,808	36,884
Accrued expenses	59,147	59,757
Notes payable	7,806	7,911
Current maturities of long-term debt	2,134	2,397
Total current liabilities	100,895	106,949
Long-term debt, net of current maturities	433,410	434,684
Deferred and long-term taxes	15,300	16,582
Pension, other post-retirement and post-employment obligations	80,259	83,949
Other long-term liabilities	6,049	5,740
Total stockholders' (deficit) equity	(35,099)	(29,061)
Total liabilities and stockholders' deficit	600,814	618,843
Parent
Current assets:
Cash and cash equivalents	7,239	6,471	7,104	11,548
Intercompany receivable	(103,518)	(102,407)
Prepaid expenses	384	159
Other current assets	15
Total current assets	(95,880)	(95,777)
Property and equipment, net	2,798	734
Investments	671,680	596,891
Intangible assets	11,824	10,034
Other assets	41	44
Total assets	590,463	511,926
Current liabilities:
Accounts payable	1,262	502
Accrued expenses	6,700	6,005
Notes payable		0
Current maturities of long-term debt	2,000	1,250
Total current liabilities	9,962	7,757
Long-term debt, net of current maturities	433,410	339,717
Pension, other post-retirement and post-employment obligations	21,702	21,677
Other long-term liabilities	69	31
Intercompany loans	214,537	229,239
Total stockholders' (deficit) equity	(89,217)	(86,495)
Total liabilities and stockholders' deficit	590,463	511,926
Total Guarantors
Current assets:
Cash and cash equivalents	(9)	36	34	280
Accounts receivable, net	23,500	20,964
Intercompany receivable	110,290	107,944
Inventories, net	15,717	15,672
Prepaid expenses	2,330	1,693
Other current assets	3,340	2,970
Total current assets	155,168	149,279
Property and equipment, net	59,781	62,157
Investments	241,439	149,134
Goodwill	17,737	17,737
Intangible assets	3,862	4,776
Total assets	477,987	383,083
Current liabilities:
Accounts payable	8,592	8,629
Accrued expenses	7,622	6,579
Notes payable		0
Total current liabilities	16,214	15,208
Deferred and long-term taxes	2,334	2,335
Pension, other post-retirement and post-employment obligations	1,108	1,000
Intercompany loans	(332,015)	(358,187)
Total stockholders' (deficit) equity	790,346	722,727
Total liabilities and stockholders' deficit	477,987	383,083
Total Non-Guarantors
Current assets:
Cash and cash equivalents	29,284	28,270	26,458	31,738
Accounts receivable, net	65,696	63,492
Intercompany receivable	(6,772)	(5,537)
Inventories, net	60,669	62,569
Prepaid expenses	5,981	7,534
Other current assets	11,394	11,869
Total current assets	166,252	168,197
Property and equipment, net	226,582	245,915
Goodwill	45,476	43,390
Intangible assets	341	3,868
Other assets	7,682	9,339
Total assets	446,333	470,709
Current liabilities:
Accounts payable	21,954	27,753
Accrued expenses	44,825	47,173
Notes payable	7,806	7,911
Current maturities of long-term debt	134	1,147
Total current liabilities	74,719	83,984
Long-term debt, net of current maturities	0	94,967
Deferred and long-term taxes	12,966	14,247
Pension, other post-retirement and post-employment obligations	57,449	61,272
Other long-term liabilities	5,980	5,709
Intercompany loans	117,478	128,948
Total stockholders' (deficit) equity	177,741	81,582
Total liabilities and stockholders' deficit	446,333	470,709
Other Eliminations
Current assets:
Cash and cash equivalents	0	0	0	0
Inventories, net	(850)	(850)
Total current assets	(850)	(850)
Investments	(913,119)	(746,025)
Total assets	(913,969)	(746,875)
Current liabilities:
Accrued expenses	0	0
Notes payable		0
Total current liabilities	0
Total stockholders' (deficit) equity	(913,969)	(746,875)
Total liabilities and stockholders' deficit	(913,969)	(746,875)
The Company
Current assets:
Cash and cash equivalents	36,514	34,777	33,596	43,566
Accounts receivable, net	89,196	84,456
Inventories, net	75,536	77,391
Prepaid expenses	8,695	9,386
Other current assets	14,749	14,839
Total current assets	224,690	220,849
Property and equipment, net	289,161	308,806
Goodwill	63,213	61,127
Intangible assets	16,027	18,678
Other assets	7,723	9,383
Total assets	600,814	618,843
Current liabilities:
Accounts payable	31,808	36,884
Accrued expenses	59,147	59,757
Notes payable	7,806	7,911
Current maturities of long-term debt	2,134	2,397
Total current liabilities	100,895	106,949
Long-term debt, net of current maturities	433,410	434,684
Deferred and long-term taxes	15,300	16,582
Pension, other post-retirement and post-employment obligations	80,259	83,949
Other long-term liabilities	6,049	5,740
Total stockholders' (deficit) equity	(35,099)	(29,061)
Total liabilities and stockholders' deficit	$ 600,814	$ 618,843

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Restructuring and Impairment Expense - By Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	$ 4,165	$ 1,129	$ 5,420	$ 5,103
Clothing
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	3,578	1,007	3,986	4,766
Roll Covers
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	705	0	1,434	179
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring and impairments expense	$ (118)	$ 122	$ 0	$ 158

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 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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Commitments and Contingencies

6 Months Ended

Jun. 30, 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 June 30, 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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Condensed Consolidated Statements of Cash Flows-(Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities
Net loss	$ (1,393)	$ (5,296)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Stock-based compensation	595	754
Depreciation	17,667	19,193
Amortization of intangibles	961	1,153
Deferred financing cost amortization	1,618	1,736
Foreign exchange loss on revaluation of debt	1,324	381
Deferred taxes	748	(360)
Asset impairment	1,078	0
Gain on disposition of property and equipment	(7)	(617)
Loss on extinguishment of debt	3,123	0
Provision for doubtful accounts	122	193
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(7,809)	3,861
Inventories	(934)	230
Prepaid expenses	480	(4,076)
Other current assets	(303)	603
Accounts payable and accrued expenses	(4,166)	(3,609)
Deferred and other long-term liabilities	(829)	(350)
Net cash provided by operating activities	12,275	13,796
Investing activities
Capital expenditures, gross	(8,457)	(7,330)
Proceeds from disposals of property and equipment	354	981
Net cash used in investing activities	(8,103)	(6,349)
Financing activities
Proceeds from borrowings	199,000	0
Principal payments on debt	(198,348)	(14,875)
Payment of deferred financing fees	(2,772)	(1,762)
Net cash used in financing activities	(2,120)	(16,637)
Effect of exchange rate changes on cash flows	(315)	(780)
Net increase (decrease) in cash	1,737	(9,970)
Cash and cash equivalents at beginning of period	34,777	43,566
Cash and cash equivalents at end of period	$ 36,514	$ 33,596

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 36,514	$ 34,777
Accounts receivable, net	89,196	84,456
Inventories, net	75,536	77,391
Prepaid expenses	8,695	9,386
Other current assets	14,749	14,839
Total current assets	224,690	220,849
Property and equipment, net	289,161	308,806
Goodwill	63,213	61,127
Intangible assets	16,027	18,678
Other assets	7,723	9,383
Total assets	600,814	618,843
Current liabilities:
Notes payable	7,806	7,911
Accounts payable	31,808	36,884
Accrued expenses	59,147	59,757
Current maturities of long-term debt	2,134	2,397
Total current liabilities	100,895	106,949
Long-term debt, net of current maturities	433,410	434,684
Deferred and long-term taxes	15,300	16,582
Pension, other post-retirement and post-employment obligations	80,259	83,949
Other long-term liabilities	6,049	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 June 30, 2013 and December 31, 2012	0	0
Common stock, $0.001 par value, 20,000,000 shares authorized; 15,375,675 and 15,309,717 shares outstanding as of June 30, 2013 and December 31, 2012, respectively	15	15
Stock warrants	13,532	13,532
Paid-in capital	413,603	413,124
Accumulated deficit	(415,232)	(413,839)
Accumulated other comprehensive loss	(47,017)	(41,893)
Total stockholders' deficit	(35,099)	(29,061)
Total liabilities and stockholders' deficit	$ 600,814	$ 618,843

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Supplemental Guarantor Financial Information - Consolidating Statement Of Operation and Comprehensive (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	$ 138,324	$ 136,378	$ 278,129	$ 270,742
Costs and expenses:
Cost of products sold	85,674	85,396	170,972	173,317
Selling	17,585	19,070	36,107	38,558
General and administrative	15,506	14,034	30,140	31,860
Research and development	2,599	2,869	5,252	5,831
Restructuring and impairment	4,165	1,129	5,420	5,103
Operating Costs and Expenses, Total	125,529	122,498	247,891	254,669
Income from operations	12,795	13,880	30,238	16,073
Interest (expense) income, net	(13,112)	(9,120)	(22,318)	(18,718)
Foreign exchange (loss) gain	50	(180)	(198)	360
Loss on extinguishment of debt	(3,123)	0	(3,123)	0
(Loss) income before provision for income taxes	(3,390)	4,580	4,599	(2,285)
Provision for income taxes	(3,489)	(2,354)	(5,992)	(3,011)
Net income (loss)	(6,879)	2,226	(1,393)	(5,296)
Comprehensive loss	(9,245)	(10,232)	(6,517)	(13,710)
Parent
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales			0	0
Costs and expenses:
Cost of products sold	(399)	(336)	(849)	(808)
Selling			0	0
General and administrative	2,299	1,151	4,281	5,264
Research and development	0	0	0	0
Restructuring and impairment	(118)	122	1	158
Operating Costs and Expenses, Total	1,782	937	3,433	4,614
Income from operations	(1,782)	(937)	(3,433)	(4,614)
Interest (expense) income, net	(8,113)	(7,092)	(14,817)	(14,447)
Foreign exchange (loss) gain	(87)	(154)	96	(308)
Equity in subsidiaries income	6,273	10,435	19,977	14,128
Loss on extinguishment of debt			(3,123)
Dividend income	0		0
(Loss) income before provision for income taxes	(6,832)	2,252	(1,300)	(5,241)
Provision for income taxes	(47)	(26)	(93)	(54)
Net income (loss)	(6,879)	2,226	(1,393)	(5,295)
Comprehensive loss	(8,449)	3,505	(3,196)	(4,663)
Total Guarantors
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	47,265	45,787	93,381	89,850
Costs and expenses:
Cost of products sold	32,470	32,009	63,334	65,424
Selling	4,972	5,609	10,191	11,332
General and administrative	1,738	2,129	2,544	3,767
Research and development	2,037	2,083	4,049	4,153
Restructuring and impairment	556	23	794	163
Operating Costs and Expenses, Total	41,773	41,853	80,912	84,839
Income from operations	5,492	3,934	12,469	5,011
Interest (expense) income, net	1,405	1,766	2,811	3,545
Foreign exchange (loss) gain	9	3	(5)	(3)
Equity in subsidiaries income	(1,768)	3,078	2,986	2,388
Loss on extinguishment of debt			0
Dividend income	0		1,555
(Loss) income before provision for income taxes	5,138	8,781	19,816	10,941
Provision for income taxes	(38)	(33)	68	(73)
Net income (loss)	5,100	8,748	19,884	10,868
Comprehensive loss	5,279	8,834	19,841	11,396
Total Non-Guarantors
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	103,218	102,122	208,617	204,798
Costs and expenses:
Cost of products sold	65,762	65,350	132,356	132,849
Selling	12,613	13,461	25,916	27,226
General and administrative	11,469	10,754	23,315	22,829
Research and development	562	786	1,203	1,678
Restructuring and impairment	3,727	984	4,625	4,782
Operating Costs and Expenses, Total	94,133	91,335	187,415	189,364
Income from operations	9,085	10,787	21,202	15,434
Interest (expense) income, net	(6,404)	(3,794)	(10,312)	(7,816)
Foreign exchange (loss) gain	128	(29)	(289)	671
Equity in subsidiaries income			0	0
Loss on extinguishment of debt			0
Dividend income	0		0
(Loss) income before provision for income taxes	2,809	6,964	10,601	8,289
Provision for income taxes	(3,404)	(2,295)	(5,967)	(2,884)
Net income (loss)	(595)	4,669	4,634	5,405
Comprehensive loss	(1,570)	(9,154)	1,356	(4,169)
Other Eliminations
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	(12,159)	(11,531)	(23,869)	(23,906)
Costs and expenses:
Cost of products sold	(12,159)	(11,627)	(23,869)	(24,148)
Selling			0	0
General and administrative			0	0
Research and development			0	0
Restructuring and impairment			0	0
Operating Costs and Expenses, Total	(12,159)	(11,627)	(23,869)	(24,148)
Income from operations	0	96	0	242
Interest (expense) income, net			0	0
Foreign exchange (loss) gain			0	0
Equity in subsidiaries income	(4,505)	(13,513)	(22,963)	(16,516)
Loss on extinguishment of debt			0
Dividend income	0		(1,555)
(Loss) income before provision for income taxes	(4,505)	(13,417)	(24,518)	(16,274)
Provision for income taxes	0		0	0
Net income (loss)	(4,505)	(13,417)	(24,518)	(16,274)
Comprehensive loss	(4,505)	(13,417)	(24,518)	(16,274)
The Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Net sales	138,324	136,378	278,129	270,742
Costs and expenses:
Cost of products sold	85,674	85,396	170,972	173,317
Selling	17,585	19,070	36,107	38,558
General and administrative	15,506	14,034	30,140	31,860
Research and development	2,599	2,869	5,252	5,831
Restructuring and impairment	4,165	1,129	5,420	5,103
Operating Costs and Expenses, Total	125,529	122,498	247,891	254,669
Income from operations	12,795	13,880	30,238	16,073
Interest (expense) income, net	(13,112)	(9,120)	(22,318)	(18,718)
Foreign exchange (loss) gain	50	(180)	(198)	360
Equity in subsidiaries income			0	0
Loss on extinguishment of debt	(3,123)		(3,123)
Dividend income	0		0
(Loss) income before provision for income taxes	(3,390)	4,580	4,599	(2,285)
Provision for income taxes	(3,489)	(2,354)	(5,992)	(3,011)
Net income (loss)	(6,879)	2,226	(1,393)	(5,296)
Comprehensive loss	$ (9,245)	$ (10,232)	$ (6,517)	$ (13,710)

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Description of Business and Significant Accounting Policies - Changes In Warranty Liability (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Warranties, Increase (Decrease)
Beginning balance	$ 1,848
Charged to Cost of Sales	794
Effect of Foreign Currency Translation	(16)
Settlements	(786)
Ending balance	$ 1,840

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Restructuring Expense (Tables)

6 Months Ended

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring Programs

The following table sets forth the significant components and activity under restructuring programs for the six months ended June 30, 2013 and 2012:

	Balance at December 31,  2012		Charges (1)		Currency     Effects			Cash Payments			Balance at     June 30, 2013
Severance and other benefits	$	15,577	$	3,339	$	(348	)	$	(8,876	)	$	9,692
Facility costs and other	335		1,669		(8		)	(1,225		)	771
Total	$	15,912	$	5,008	$	(356	)	$	(10,101	)	$	10,463

	Balance at December 31,  2011		Charges		Currency     Effects			Cash Payments			Balance at     June 30, 2012
Severance and other benefits	$	800	$	705	$	4		$	(1,142	)	$	367
Facility costs and other	452		4,398		(124		)	(4,299		)	427
Total	$	1,252	$	5,103	$	(120	)	$	(5,441	)	$	794

(1) Amount excludes $412 impairment charges.

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              June 30,					Six Months Ended              June 30,
	2013			2012		2013		2012
Clothing	$	3,578		$	1,007	$	3,986	$	4,766
Roll Covers	705			—		1,434		179
Corporate	(118		)	122		—		158
Total	$	4,165		$	1,129	$	5,420	$	5,103

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Restructuring and Impairment Expense - Restructuring Programs (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Restructuring Reserve
Beginning Balance	$ 15,912	$ 1,252
Charges	5,008	5,103
Currency Effects	(356)	(120)
Cash Payments	(10,101)	(5,441)
Ending Balance	10,463	794
Impairment charges		412
Severance [Member]
Restructuring Reserve
Beginning Balance	15,577	800
Charges	3,339	705
Currency Effects	(348)	4
Cash Payments	(8,876)	(1,142)
Ending Balance	9,692	367
Facility Costs And Other [Member]
Restructuring Reserve
Beginning Balance	335	452
Charges	1,669	4,398
Currency Effects	(8)	(124)
Cash Payments	(1,225)	(4,299)
Ending Balance	$ 771	$ 427

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Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Minimum	Jun. 30, 2013 Maximum	Dec. 31, 2012 BRAZIL Foreign Tax Authority [Member]
Income Taxes [Line Items]
Provision for income taxes	$ 3,489	$ 2,354	$ 5,992	$ 3,011
Statutory income tax rate in foreign countries					25.00%	39.00%
Gross unrecognized tax benefit	3,420		3,420
Unrecognized tax benefit increase			146
Tax years open to examination					2000	2012
Tax, penalties and interest			40,200
Income Tax Examination, Percentage Increase (Decrease) in Liability from Prior Year							(50.00%)
Income Tax Examination, Increase (Decrease) in Liability from Prior Year	10,758		10,758
Income Tax Examination, Liability Recorded	$ 29,411		$ 29,411

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Long-term Debt - Schedule Of Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Senior Bank Debt (Secured):
Senior Bank Debt (Secured)	$ 199,000	$ 200,536
Other Long-Term Debt:
Carrying value of long-term debt	435,544	437,081
Less current maturities	2,134	2,397
Total	433,410	434,684
New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member]
Senior Bank Debt (Secured):
Senior Bank Debt (Secured)	199,000	0
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)	0	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)	0	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	$ 134	$ 135

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Long-term Debt - Schedule Of Long-Term Debt (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
New Term Loan Debt Payable Quarterly Us Dollar Denominated London Interbank Offer Rate Six Point Two Five Percentage As Of June Thirty Two Thousand Thirteen [Member]
Debt Disclosure [Line Items]
LIBOR rate, minimum	1.25%
Interest rate Percentage above LIBOR rate	5.00%
Debt instrument interest rate	6.25%
Debt discount	$ 1.0
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%

XML

Business Segment Information

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2013 and 2012.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended June 30, 2013:
Net Sales	$	89,414	$	48,910	$	—		$	138,324
Segment Earnings (Loss)	$	20,148	$	10,592	$	(3,842	)
Three Months Ended June 30, 2012:
Net Sales	$	88,115	$	48,263	$	—		$	136,378
Segment Earnings (Loss)	$	15,861	$	12,126	$	(2,591	)
Six Months Ended June 30, 2013:
Net Sales	$	179,351	$	98,778	$	—		$	278,129
Segment Earnings (Loss)	$	38,210	$	24,662	$	(6,831	)
Six Months Ended June 30, 2012:
Net Sales	$	176,798	$	93,944	$	—		$	270,742
Segment Earnings (Loss)	$	30,622	$	20,016	$	(6,421	)

Provided below is a reconciliation of Segment earnings income (loss) to (loss) income before provision for income taxes for the three and six months ended June 30, 2013 and 2012, respectively.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Segment Earnings (Loss):
Clothing	$	20,148		$	15,861		$	38,210		$	30,622
Roll Covers	10,592			12,126			24,662			20,016
Corporate	(3,842		)	(2,591		)	(6,831		)	(6,421		)
Stock-based compensation	(300		)	218			(595		)	(754		)
Inventory write-off	(692		)	—			(692		)	—
Impairment expense	191			—			(666		)
Legal fees related to term debt amendment				(85		)				(85		)
Non-recurring expenses related to CEO retirement	—			(695		)	—			(1,496		)
Interest expense, net	(13,112		)	(9,120		)	(22,318		)	(18,718		)
Depreciation and amortization	(9,087		)	(10,005		)	(18,628		)	(20,346		)
Loss on debt extinguishment	(3,123		)	—			(3,123		)	—
Restructuring expense	(4,165		)	(1,129		)	(5,420		)	(5,103		)
(Loss) income before provision for income taxes	$	(3,390	)	$	4,580		$	4,599		$	(2,285	)

XML

Description of Business and Significant Accounting Policies - Net Income (Loss) Per Common Share (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Weighted-average common shares outstanding-basic	15,370,223	15,226,995	15,340,471	15,194,432
Dilutive effect of stock-based compensation awards outstanding	0	9,656	0	0
Weighted-average common shares outstanding-diluted	15,370,223	15,236,651	15,340,471	15,194,432

XML

Comprehensive Income and Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	$ (44,651)	$ (41,893)
Other comprehensive (loss) income before reclassifications	(3,146)	(6,511)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	453	1,028
Amortization of interest expense	327	359
Net current period other comprehensive (loss) income	(2,366)	(5,124)
Balance at June 30, 2013	(47,017)	(47,017)
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	(1,139)	3,253
Other comprehensive (loss) income before reclassifications	(3,720)	(8,112)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	0	0
Amortization of interest expense	0	0
Net current period other comprehensive (loss) income	(3,720)	(8,112)
Balance at June 30, 2013	(4,859)	(4,859)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	(42,900)	(44,502)
Other comprehensive (loss) income before reclassifications	560	1,587
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	453	1,028
Amortization of interest expense	0	0
Net current period other comprehensive (loss) income	1,013	2,615
Balance at June 30, 2013	(41,887)	(41,887)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012	(612)	(644)
Other comprehensive (loss) income before reclassifications	14	14
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	0	0
Amortization of interest expense	327	359
Net current period other comprehensive (loss) income	341	373
Balance at June 30, 2013	$ (271)	$ (271)

XML

Supplemental Guarantor Financial Information

6 Months Ended

Jun. 30, 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 June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	7,239		$	(9	)	$	29,284		$	—		$	36,514
Accounts receivable, net	—			23,500			65,696			—			89,196
Intercompany receivables	(103,518		)	110,290			(6,772		)	—			—
Inventories, net	—			15,717			60,669			(850		)	75,536
Prepaid expenses	384			2,330			5,981			—			8,695
Other current assets	15			3,340			11,394			—			14,749
Total current assets	(95,880		)	155,168			166,252			(850		)	224,690
Property and equipment, net	2,798			59,781			226,582			—			289,161
Investments	671,680			241,439			—			(913,119		)	—
Goodwill	—			17,737			45,476			—			63,213
Intangible assets	11,824			3,862			341			—			16,027
Other assets	41			—			7,682			—			7,723
Total assets	$	590,463		$	477,987		$	446,333		$	(913,969	)	$	600,814
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	1,262		$	8,592		$	21,954		$	—		$	31,808
Accrued expenses	6,700			7,622			44,825			—			59,147
Current notes payable	—			—			7,806						7,806
Current maturities of long-term debt	2,000			—			134			—			2,134
Total current liabilities	9,962			16,214			74,719			—			100,895
Long-term debt, net of current maturities	433,410			—			—			—			433,410
Deferred and long-term taxes	—			2,334			12,966			—			15,300
Pension, other post-retirement and post-employment obligations	21,702			1,108			57,449			—			80,259
Other long-term liabilities	69			—			5,980			—			6,049
Intercompany loans	214,537			(332,015		)	117,478			—			—
Total stockholders’ (deficit) equity	(89,217		)	790,346			177,741			(913,969		)	(35,099		)
Total liabilities and stockholders’ equity	$	590,463		$	477,987		$	446,333		$	(913,969	)	$	600,814

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.

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

For the three months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	47,265		$	103,218		$	(12,159	)	$	138,324
Costs and expenses:
Cost of products sold	(399		)	32,470			65,762			(12,159		)	85,674
Selling	—			4,972			12,613			—			17,585
General and administrative	2,299			1,738			11,469			—			15,506
Research and development	—			2,037			562			—			2,599
Restructuring and impairment	(118		)	556			3,727			—			4,165
	1,782			41,773			94,133			(12,159		)	125,529
(Loss) income from operations	(1,782		)	5,492			9,085			—			12,795
Interest (expense) income, net	(8,113		)	1,405			(6,404		)	—			(13,112		)
Foreign exchange (loss) gain	(87		)	9			128			—			50
Equity in subsidiaries income (deficit)	6,273			(1,768		)	—			(4,505		)	—
Loss on extinguishment of debt	(3,123		)										(3,123		)
Dividend income	—			—			—			—			—
(Loss) income before provision for income taxes	(6,832		)	5,138			2,809			(4,505		)	(3,390		)
Provision for income taxes	(47		)	(38		)	(3,404		)	—			(3,489		)
Net (loss) income	$	(6,879	)	$	5,100		$	(595	)	$	(4,505	)	$	(6,879	)
Comprehensive (loss) income	$	(8,449	)	$	5,279		$	(1,570	)	$	(4,505	)	$	(9,245	)

Xerium Technologies, Inc.

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

For the three months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	45,787		$	102,122		$	(11,531	)	$	136,378
Costs and expenses:
Cost of products sold	(336		)	32,009			65,350			(11,627		)	85,396
Selling	—			5,609			13,461			—			19,070
General and administrative	1,151			2,129			10,754			—			14,034
Research and development	—			2,083			786			—			2,869
Restructuring and impairment	122			23			984			—			1,129
	937			41,853			91,335			(11,627		)	122,498
(Loss) income from operations	(937		)	3,934			10,787			96			13,880
Interest (expense) income, net	(7,092		)	1,766			(3,794		)	—			(9,120		)
Foreign exchange (loss) gain	(154		)	3			(29		)	—			(180		)
Equity in subsidiaries income (deficit)	10,435			3,078			—			(13,513		)	—
Income (loss) before provision for income taxes	2,252			8,781			6,964			(13,417		)	4,580
Provision for income taxes	(26		)	(33		)	(2,295		)	—			(2,354		)
Net income (loss)	$	2,226		$	8,748		$	4,669		$	(13,417	)	$	2,226
Comprehensive income (loss)	$	3,505		$	8,834		$	(9,154	)	$	(13,417	)	$	(10,232	)

Xerium Technologies, Inc.

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

For the six months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	93,381		$	208,617		$	(23,869	)	$	278,129
Costs and expenses:
Cost of products sold	(849		)	63,334			132,356			(23,869		)	170,972
Selling	—			10,191			25,916			—			36,107
General and administrative	4,281			2,544			23,315			—			30,140
Research and development	—			4,049			1,203			—			5,252
Restructuring and impairment	1			794			4,625			—			5,420
	3,433			80,912			187,415			(23,869		)	247,891
(Loss) income from operations	(3,433		)	12,469			21,202			—			30,238
Interest (expense) income, net	(14,817		)	2,811			(10,312		)	—			(22,318		)
Foreign exchange (loss) gain	96			(5		)	(289		)	—			(198		)
Equity in subsidiaries income (deficit)	19,977			2,986			—			(22,963		)	—
Loss on extinguishment of debt	(3,123		)	—			—			—			(3,123		)
Dividend income	—			1,555			—			(1,555		)	—
(Loss) income before provision for income taxes	(1,300		)	19,816			10,601			(24,518		)	4,599
Provision for income taxes	(93		)	68			(5,967		)	—			(5,992		)
Net (loss) income	$	(1,393	)	$	19,884		$	4,634		$	(24,518	)	$	(1,393	)
Comprehensive (loss) income	$	(3,196	)	$	19,841		$	1,356		$	(24,518	)	$	(6,517	)

Xerium Technologies, Inc.

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

For the six months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	89,850		$	204,798		$	(23,906	)	$	270,742
Costs and expenses:
Cost of products sold	(808		)	65,424			132,849			(24,148		)	173,317
Selling	—			11,332			27,226			—			38,558
General and administrative	5,264			3,767			22,829			—			31,860
Research and development	—			4,153			1,678			—			5,831
Restructuring and impairment	158			163			4,782			—			5,103
	4,614			84,839			189,364			(24,148		)	254,669
(Loss) income from operations	(4,614		)	5,011			15,434			242			16,073
Interest (expense) income, net	(14,447		)	3,545			(7,816		)	—			(18,718		)
Foreign exchange (loss) gain	(308		)	(3		)	671			—			360
Equity in subsidiaries income (deficit)	14,128			2,388			—			(16,516		)	—
(Loss) income before provision for income taxes	(5,241		)	10,941			8,289			(16,274		)	(2,285		)
Provision for income taxes	(54		)	(73		)	(2,884		)	—			(3,011		)
Net (loss) income	$	(5,295	)	$	10,868		$	5,405		$	(16,274	)	$	(5,296	)
Comprehensive (loss) income	$	(4,663	)	$	11,396		$	(4,169	)	$	(16,274	)	$	(13,710	)

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the six months ended June 30, 2013

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net (loss) income	$	(1,393	)	$	19,884		$	4,634		$	(24,518	)	$	(1,393	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	595			—			—			—			595
Depreciation	197			3,764			13,706			—			17,667
Amortization of intangibles	—			914			47			—			961
Deferred financing cost amortization	(2,141		)	—			3,759			—			1,618
Foreign exchange loss on revaluation of debt	1,612			—			(288		)	—			1,324
Deferred taxes	—			—			748			—			748
Asset impairment	17			341			720						1,078
Loss (gain) on disposition of property and equipment	1			17			(25		)	—			(7		)
Loss (gain) on extinguishment of debt	3,123												3,123
Provision for doubtful accounts	—			28			94			—			122
Undistributed equity in (earnings) loss of subsidiaries	(19,977		)	(2,986		)	—			22,963			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	—			(2,563		)	(5,246		)	—			(7,809		)
Inventories	—			(45		)	(889		)	—			(934		)
Prepaid expenses	(225		)	(637		)	1,342			—			480
Other current assets	(32		)	120			(391		)	—			(303		)
Accounts payable and accrued expenses	1,338			295			(7,354		)	1,555			(4,166		)
Deferred and other long-term liabilities	82			107			(1,018		)	—			(829		)
Intercompany loans	1,111			(2,344		)	1,233			—			—
Net cash used in operating activities	(15,692		)	16,895			11,072			—			12,275
Investing activities
Capital expenditures, gross	(2,265		)	(1,557		)	(4,635		)	—			(8,457		)
Intercompany property and equipment transfers, net	3			84			(87		)				—
Proceeds from disposals of property and equipment	—			4			350			—			354
Net cash (used in) provided by investing activities	(2,262		)	(1,469		)	(4,372		)	—			(8,103		)
Financing activities
Proceeds from borrowings	199,000												199,000
Principal payments on debt	(104,557		)	—			(93,791		)	—			(198,348		)
Payment of deferred financing fees	(2,772		)										(2,772		)
Intercompany loans	(72,949		)	(15,471		)	88,420			—			—
Net cash provided by (used in) financing activities	18,722			(15,471		)	(5,371		)	—			(2,120		)
Effect of exchange rate changes on cash flows	—			—			(315		)	—			(315		)
Net increase (decrease) in cash	768			(45		)	1,014			—			1,737
Cash and cash equivalents at beginning of period	6,471			36			28,270			—			34,777
Cash and cash equivalents at end of period	$	7,239		$	(9	)	$	29,284		$	—		$	36,514

\]Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the six months ended June 30, 2012

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
Operating activities
Net (loss) income	$	(5,295	)	$	10,868		$	5,405		$	(16,274	)	$	(5,296	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation	754			—			—			—			754
Depreciation	97			3,943			15,153			—			19,193
Amortization of intangibles	—			1,106			47			—			1,153
Deferred financing cost amortization	1,211			—			525			—			1,736
Foreign exchange loss on revaluation of debt	—			—			381			—			381
Deferred taxes	—			—			(360		)	—			(360		)
Gain on disposition of property and equipment	—			(4		)	(613		)	—			(617		)
Provision for doubtful accounts	—			(66		)	259			—			193
Undistributed equity in (earnings) loss of subsidiaries	(14,128		)	(2,388		)	—			16,516			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	5			1,027			2,829			—			3,861
Inventories	—			2,038			(1,566		)	(242		)	230
Prepaid expenses	1,097			(757		)	(4,416		)	—			(4,076		)
Other current assets	—			1,419			(816		)	—			603
Accounts payable and accrued expenses	(640		)	(1,346		)	(1,623		)	—			(3,609		)
Deferred and other long-term liabilities	195			127			(672		)	—			(350		)
Intercompany loans	796			(484		)	(312		)	—			—
Net cash (used in) provided by operating activities	(15,908		)	15,483			14,221			—			13,796
Investing activities
Capital expenditures, gross	(15		)	(1,293		)	(6,022		)	—			(7,330		)
Intercompany property and equipment transfers, net	343			(337		)	(6		)	—			—
Proceeds from disposals of property and equipment	—			3			978			—			981
Net cash provided by (used in) investing activities	328			(1,627		)	(5,050		)	—			(6,349		)
Financing activities
Principal payments on debt	(6,854		)	—			(8,021		)	—			(14,875		)
Payment of deferred financing fees	(1,027		)	—			(735		)	—			(1,762		)
Intercompany loans	19,017			(14,105		)	(4,912		)	—			—
Net cash provided by (used in) financing activities	11,136			(14,105		)	(13,668		)	—			(16,637		)
Effect of exchange rate changes on cash flows	—			3			(783		)	—			(780		)
Net (decrease) increase in cash	(4,444		)	(246		)	(5,280		)	—			(9,970		)
Cash and cash equivalents at beginning of period	11,548			280			31,738			—			43,566
Cash and cash equivalents at end of period	$	7,104		$	34		$	26,458		$	—		$	33,596

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Restructuring Expense

6 Months Ended

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring Expense

Restructuring and Impairment Expense

During the six months ended June 30, 2013, the Company recorded restructuring and impairment expenses of approximately $5,420. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of two clothing facilities in Spain and Argentina and the closure of a roll cover facility in Charlotte, NC. During the six months ended June 30, 2012, the Company recorded restructuring expenses of approximately $5,103. These charges were primarily related to costs to terminate a sales agency arrangement and other sales-force reductions made in 2012 and the transfer of certain equipment from a downsized location.

The following table sets forth the significant components and activity under restructuring programs for the six months ended June 30, 2013 and 2012:

	Balance at December 31,  2012		Charges (1)		Currency     Effects			Cash Payments			Balance at     June 30, 2013
Severance and other benefits	$	15,577	$	3,339	$	(348	)	$	(8,876	)	$	9,692
Facility costs and other	335		1,669		(8		)	(1,225		)	771
Total	$	15,912	$	5,008	$	(356	)	$	(10,101	)	$	10,463

	Balance at December 31,  2011		Charges		Currency     Effects			Cash Payments			Balance at     June 30, 2012
Severance and other benefits	$	800	$	705	$	4		$	(1,142	)	$	367
Facility costs and other	452		4,398		(124		)	(4,299		)	427
Total	$	1,252	$	5,103	$	(120	)	$	(5,441	)	$	794

(1) Amount excludes $412 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              June 30,					Six Months Ended              June 30,
	2013			2012		2013		2012
Clothing	$	3,578		$	1,007	$	3,986	$	4,766
Roll Covers	705			—		1,434		179
Corporate	(118		)	122		—		158
Total	$	4,165		$	1,129	$	5,420	$	5,103

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Derivatives and Hedging

6 Months Ended

Jun. 30, 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. During the second quarter of 2013, in connection with the refinancing of its credit facility, the Company paid off its Euro-denominated debt, resulting in the termination of one of the interest rate cap agreements and accelerated amortization of $322 to interest expense. At June 30, 2013, the notional amount of the remaining agreement was $45,400. Under the terms of this interest rate cap agreement, 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 cap is considered a designated hedging instrument and 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 agreement. The following represents the fair value of the interest rate cap and unrecognized losses included in accumulated other comprehensive loss at June 30, 2013 and December 31, 2012:

	June 30, 2013			December 31, 2012
Fair value of interest rate rate cap included in other assets in the Consolidated Balance Sheets	$	8		$	16
Unrecognized losses included in accumulated other comprehensive income (loss)	$	(271	)	$	(644	)

The Company expects to reclassify $83 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 June 30, 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 following represents the fair value of these derivatives at June 30, 2013 and December 31, 2012 and the change in fair value included in foreign exchange gain for the three and six months ended June 30, 2013 and 2012:

	June 30, 2013		December 31, 2012
Fair value of derivatives	$	1,229	$	357
	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012
Change in fair value included in foreign exchange gain for the three months ended June 30, 2013 and June 30, 2012	$	1,439	$	168
	Six Months Ended June 30, 2013		Six Months Ended June 30, 2012
Change in fair value included in foreign exchange gain for the six months ended June 30, 2013 and June 30, 2012	$	1,542	$	283

The following represents the notional amounts of foreign exchange forward contracts at June 30, 2013:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	22,126	$	(14,942	)

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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Supplemental Guarantor Financial Information - Consolidating Statement Of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities
Net (loss) income	$ (1,393)	$ (5,296)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	595	754
Depreciation	17,667	19,193
Amortization of intangibles	961	1,153
Deferred financing cost amortization	1,618	1,736
Unrealized foreign exchange loss on revaluation of debt	1,324	381
Deferred taxes	748	(360)
Asset impairment	666
Gain on disposition of property and equipment	(7)	(617)
Loss (gain) on extinguishment of debt	3,123	0
Provision for doubtful accounts	122	193
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(7,809)	3,861
Inventories	(934)	230
Prepaid expenses	480	(4,076)
Other current assets	(303)	603
Accounts payable and accrued expenses	(4,166)	(3,609)
Deferred and other long-term liabilities	(829)	(350)
Net cash provided by operating activities	12,275	13,796
Investing activities
Capital expenditures, gross	(8,457)	(7,330)
Proceeds from disposals of property and equipment	354	981
Net cash used in investing activities	(8,103)	(6,349)
Financing activities
Proceeds from borrowings	199,000	0
Principal payments on debt	(198,348)	(14,875)
Payment of deferred financing fees	(2,772)	(1,762)
Net cash used in financing activities	(2,120)	(16,637)
Effect of exchange rate changes on cash flows	(315)	(780)
Net increase (decrease) in cash	1,737	(9,970)
Cash and cash equivalents at beginning of period	34,777	43,566
Cash and cash equivalents at end of period	36,514	33,596
Parent
Operating activities
Net (loss) income	(1,393)	(5,295)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	595	754
Depreciation	197	97
Amortization of intangibles	0	0
Deferred financing cost amortization	(2,141)	1,211
Unrealized foreign exchange loss on revaluation of debt	1,612	0
Deferred taxes	0	0
Asset impairment	17
Gain on disposition of property and equipment	1	0
Loss (gain) on extinguishment of debt	3,123
Provision for doubtful accounts	0	0
Undistributed equity in (earnings) loss of subsidiaries	(19,977)	(14,128)
Change in assets and liabilities which provided (used) cash:
Accounts receivable	0	5
Inventories	0	0
Prepaid expenses	(225)	1,097
Other current assets	(32)	0
Accounts payable and accrued expenses	1,338	(640)
Deferred and other long-term liabilities	82	195
Intercompany loans	1,111	796
Net cash provided by operating activities	(15,692)	(15,908)
Investing activities
Capital expenditures, gross	(2,265)	(15)
Intercompany property and equipment transfers, net	3	343
Proceeds from disposals of property and equipment	0	0
Net cash used in investing activities	(2,262)	328
Financing activities
Proceeds from borrowings	199,000
Principal payments on debt	(104,557)	(6,854)
Payment of deferred financing fees	(2,772)	(1,027)
Intercompany loans	(72,949)	19,017
Net cash used in financing activities	18,722	11,136
Effect of exchange rate changes on cash flows	0	0
Net increase (decrease) in cash	768	(4,444)
Cash and cash equivalents at beginning of period	6,471	11,548
Cash and cash equivalents at end of period	7,239	7,104
Total Guarantors
Operating activities
Net (loss) income	19,884	10,868
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	0	0
Depreciation	3,764	3,943
Amortization of intangibles	914	1,106
Deferred financing cost amortization	0	0
Unrealized foreign exchange loss on revaluation of debt	0	0
Deferred taxes	0	0
Asset impairment	341
Gain on disposition of property and equipment	17	(4)
Loss (gain) on extinguishment of debt	0
Provision for doubtful accounts	28	(66)
Undistributed equity in (earnings) loss of subsidiaries	(2,986)	(2,388)
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(2,563)	1,027
Inventories	(45)	2,038
Prepaid expenses	(637)	(757)
Other current assets	120	1,419
Accounts payable and accrued expenses	295	(1,346)
Deferred and other long-term liabilities	107	127
Intercompany loans	(2,344)	(484)
Net cash provided by operating activities	16,895	15,483
Investing activities
Capital expenditures, gross	(1,557)	(1,293)
Intercompany property and equipment transfers, net	84	(337)
Proceeds from disposals of property and equipment	4	3
Net cash used in investing activities	(1,469)	(1,627)
Financing activities
Principal payments on debt	0	0
Payment of deferred financing fees		0
Intercompany loans	(15,471)	(14,105)
Net cash used in financing activities	(15,471)	(14,105)
Effect of exchange rate changes on cash flows	0	3
Net increase (decrease) in cash	(45)	(246)
Cash and cash equivalents at beginning of period	36	280
Cash and cash equivalents at end of period	(9)	34
Total Non-Guarantors
Operating activities
Net (loss) income	4,634	5,405
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	0	0
Depreciation	13,706	15,153
Amortization of intangibles	47	47
Deferred financing cost amortization	3,759	525
Unrealized foreign exchange loss on revaluation of debt	(288)	381
Deferred taxes	748	(360)
Asset impairment	720
Gain on disposition of property and equipment	(25)	(613)
Loss (gain) on extinguishment of debt	0
Provision for doubtful accounts	94	259
Undistributed equity in (earnings) loss of subsidiaries	0	0
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(5,246)	2,829
Inventories	(889)	(1,566)
Prepaid expenses	1,342	(4,416)
Other current assets	(391)	(816)
Accounts payable and accrued expenses	(7,354)	(1,623)
Deferred and other long-term liabilities	(1,018)	(672)
Intercompany loans	1,233	(312)
Net cash provided by operating activities	11,072	14,221
Investing activities
Capital expenditures, gross	(4,635)	(6,022)
Intercompany property and equipment transfers, net	(87)	(6)
Proceeds from disposals of property and equipment	350	978
Net cash used in investing activities	(4,372)	(5,050)
Financing activities
Principal payments on debt	(93,791)	(8,021)
Payment of deferred financing fees		(735)
Intercompany loans	88,420	(4,912)
Net cash used in financing activities	(5,371)	(13,668)
Effect of exchange rate changes on cash flows	(315)	(783)
Net increase (decrease) in cash	1,014	(5,280)
Cash and cash equivalents at beginning of period	28,270	31,738
Cash and cash equivalents at end of period	29,284	26,458
Other Eliminations
Operating activities
Net (loss) income	(24,518)	(16,274)
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
Loss (gain) on extinguishment of debt	0
Provision for doubtful accounts	0	0
Undistributed equity in (earnings) loss of subsidiaries	22,963	16,516
Change in assets and liabilities which provided (used) cash:
Accounts receivable	0	0
Inventories	0	(242)
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	(1,393)	(5,296)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock-based compensation	595	754
Depreciation	17,667	19,193
Amortization of intangibles	961	1,153
Deferred financing cost amortization	1,618	1,736
Unrealized foreign exchange loss on revaluation of debt	1,324	381
Deferred taxes	748	(360)
Asset impairment	1,078
Gain on disposition of property and equipment	(7)	(617)
Loss (gain) on extinguishment of debt	3,123
Provision for doubtful accounts	122	193
Undistributed equity in (earnings) loss of subsidiaries	0	0
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(7,809)	3,861
Inventories	(934)	230
Prepaid expenses	480	(4,076)
Other current assets	(303)	603
Accounts payable and accrued expenses	(4,166)	(3,609)
Deferred and other long-term liabilities	(829)	(350)
Intercompany loans	0	0
Net cash provided by operating activities	12,275	13,796
Investing activities
Capital expenditures, gross	(8,457)	(7,330)
Intercompany property and equipment transfers, net	0	0
Proceeds from disposals of property and equipment	354	981
Net cash used in investing activities	(8,103)	(6,349)
Financing activities
Proceeds from borrowings	199,000
Principal payments on debt	(198,348)	(14,875)
Payment of deferred financing fees	(2,772)	(1,762)
Intercompany loans	0	0
Net cash used in financing activities	(2,120)	(16,637)
Effect of exchange rate changes on cash flows	(315)	(780)
Net increase (decrease) in cash	1,737	(9,970)
Cash and cash equivalents at beginning of period	34,777	43,566
Cash and cash equivalents at end of period	$ 36,514	$ 33,596

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Reconciliation Of Segment Earnings (Loss) To Income Before Provision For Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Earnings (Loss):
Segment Earnings (Loss)	$ 12,795		$ 13,880	$ 30,238	$ 16,073
Stock-based compensation	(300)		218	(595)	(754)
Inventory write-off	692		0	692	0
Impairment expense	191	(700)	0	(666)
Legal fees related to term debt amendment			(85)		(85)
Interest expense, net	(13,112)		(9,120)	(22,318)	(18,718)
Depreciation and amortization	(9,087)		(10,005)	(18,628)	(20,346)
Loss on extinguishment of debt	(3,123)		0	(3,123)	0
Restructuring expense	(4,165)		(1,129)	(5,420)	(5,103)
Income (loss) before provision for income taxes	(3,390)		4,580	4,599	(2,285)
Chief Executive Officer
Segment Earnings (Loss):
Non-recurring expenses related to CEO retirement	0		(695)	0	(1,496)
Clothing
Segment Earnings (Loss):
Segment Earnings (Loss)	20,148		15,861	38,210	30,622
Roll Covers
Segment Earnings (Loss):
Segment Earnings (Loss)	10,592		12,126	24,662	20,016
Corporate
Segment Earnings (Loss):
Segment Earnings (Loss)	$ (3,842)		$ (2,591)	$ (6,831)	$ (6,421)

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Derivatives and Hedging (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 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	$ 45,400,000		$ 45,400,000			$ 114,400,000
Derivatives interest cap rate	3.00%		3.00%
Fair value of interest rate rate cap included in other assets in the Consolidated Balance Sheets	8,000		8,000		16,000
Unrecognized losses included in accumulated other comprehensive income (loss)			(271,000)		(644,000)
Expecetd reclassification from accumulated other comprehensive income (loss) to interest expense			0
Fair value contracts included in foreign exchange gain (loss)	1,439,000	168,000	1,542,000	283,000
Not Designated as Hedging Instrument | Foreign Exchange Contract
Derivative [Line Items]
Derivatives fair value of other assets (liabilities)	$ 1,229,000		$ 1,229,000		$ 357,000

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Derivatives and Hedging (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional Amounts Sold and Purchased

he following represents the notional amounts of foreign exchange forward contracts at June 30, 2013:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	22,126	$	(14,942	)

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Stock-Based Compensation and Stockholders' Deficit

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2013 and June 30, 2012 as follows:

	Three Months Ended June 30,					Six Months Ended     June 30,
	2013		2012			2013		2012
RSU and DSU Awards (1)	$	300	$	344		$	595	$	754
Management Incentive/Performance Award Programs (2)	—		(562		)	—		—
Total	$	300	$	(218	)	$	595	$	754

(1) Related to RSUs, Options 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, adjusted for payout based on the projected performance targets. In March of 2013, the Compensation Committee approved the 2013 Management Incentive Compensation Award Program. This award, if earned, will be paid 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. 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, and convert 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.

On June 13, 2013, at the 2013 Annual Meeting of Stockholders of Xerium Technologies, Inc., the stockholders of the Company approved an amendment to the Company’s 2010 Equity Incentive Plan, which increased the aggregate number of shares of the Company’s common stock that may be delivered under or in satisfaction of awards under such plan from 913,525 to 1,663,525, increased the number of shares that may be subject to option and stock appreciation right grants and that may be granted as stock awards to any one participant in a calendar year from 150,000 to 500,000. and set a maximum cash award that may be granted to any one participant in a calendar year at $2,000,000. This amendment was approved by the Company’s Board of Directors on March 12, 2013.

On June 13, 2013, after the stockholders had approved the amendment to the Company's 2010 Equity Incentive Plan, the Board approved the granting of awards under the 2013 Executive Long-Term Incentive Plan (the "2013 Executive LTIP") under the 2010 Plan. Awards under the 2013 Executive LTIP are both time-based and performance-based and 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 179,571 time-based RSUs under the Company’s 2010 Plan. These time-based awards will cliff vest on March 11, 2016, and will be converted to common stock, net of applicable tax withholdings. Performance-based awards, which constitute the remaining 50% of the total award, will vest depending on the Company’s stock price performance during the three year participant service period from March 11, 2013 through March 10, 2016. If the awards vest, they will convert into shares of the Company’s common stock and be paid after the close of the three-year performance period.

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

Under the 2011 non-management directors stock plan ("2011 DSU Plan”), each director receives an annual retainer of $112, to be paid on a quarterly basis in arrears. 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 8,250 DSUs under the 2011 DSU Plan for service during the quarter ended June 30, 2013. In addition, in accordance with the 2011 DSU Plan, 5,500 DSUs were settled in Common Stock during the quarter ended June 30, 2013.

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Comprehensive Income and Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Components Of Comprehensive Income (Loss)

Comprehensive loss for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net (loss) income	$	(6,879	)	$	2,226		$	(1,393	)	$	(5,296	)
Foreign currency translation adjustments	(3,720		)	(13,025		)	(8,112		)	(8,399		)
Pension liability changes under Topic 715	1,013			578			2,615			90
Change in value of derivative instruments	341			(11		)	373			(105		)
Comprehensive loss	$	(9,245	)	$	(10,232	)	$	(6,517	)	$	(13,710	)

Components Of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss for the three months ended June 30, 2013 are as follows (net of taxes):

	Foreign Currency Translation     Adjustment			Pension Liability Changes Under  Topic 715			Change in Value of Derivative Instruments			Accumulated    Other Comprehensive (Loss) Income
Balance at March 31, 2013	$	(1,139	)	$	(42,900	)	$	(612	)	$	(44,651	)
Other comprehensive (loss) income before reclassifications	(3,720		)	560			14			(3,146		)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	—			453			—			453
Amortization of interest expense	—			—			327			327
Net current period other comprehensive (loss) income	(3,720		)	1,013			341			(2,366		)
Balance at June 30, 2013	$	(4,859	)	$	(41,887	)	$	(271	)	$	(47,017	)

The components of accumulated other comprehensive loss for the six months ended June 30, 2013 are as follows (net of taxes):

	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	(8,112		)	1,587			14			(6,511		)
Amounts reclassified from other comprehensive (loss) income
Amortization of actuarial losses	—			1,028			—			1,028
Amortization of interest expense	—			—			359			359
Net current period other comprehensive (loss) income	(8,112		)	2,615			373			(5,124		)
Balance at June 30, 2013	$	(4,859	)	$	(41,887	)	$	(271	)	$	(47,017	)

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Long-term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule Of Long-Term Debt

At June 30, 2013 and December 31, 2012, long-term debt consisted of the following:

	June 30, 2013		December 31, 2012
New senior secured term loan facility, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of June 30, 2013, net of $1.0 discount	$	199,000	$	—
Prior first lien debt, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.00% (6.25%) as of December 31, 2012	—		104,557
Prior first lien debt, payable quarterly, Euro denominated–EURIBOR (minimum 1.25%) plus 5.00% (6.25%) as of December 31, 2012	—		95,979
	199,000		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
Unsecured, interest rate fixed at 2.00%, Euro denominated	134		135
	435,544		437,081
Less current maturities	2,134		2,397
Total	$	433,410	$	434,684

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 19, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
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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Pensions, Other Post-retirement and Post-employment Benefits (Tables)

6 Months Ended

Jun. 30, 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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Service cost	$	966		$	888		$	1,939		$	1,773
Interest cost	1,548			1,838			3,108			3,668
Expected return on plan assets	(1,401		)	(1,377		)	(2,813		)	(2,750		)
Amortization of prior service cost	—			4			3			7
Amortization of net loss	571			633			1,143			1,266
Net periodic benefit cost	$	1,684		$	1,986		$	3,380		$	3,964