10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

________________________

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

For the quarterly period ended March 31, 2016

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)

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

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

Act).    Yes  ¨    No  ý

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

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of May 1, 2016 was 15,994,057

TABLE OF CONTENTS

Part I. Financial Information
		Page
Item 1.	Unaudited Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
Part II. Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 5.	Other Information	30
Item 6.	Exhibits	30

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PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

Xerium Technologies, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands and Unaudited)

	March 31, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	15,450		$	9,839
Accounts receivable, net	72,174			68,562
Inventories, net	71,366			71,698
Prepaid expenses	7,390			6,649
Other current assets	15,952			16,869
Total current assets	182,332			173,617
Property and equipment, net	301,682			297,083
Goodwill	59,302			58,599
Intangible assets	1,455			1,547
Non-current deferred tax asset	9,467			9,325
Other assets	10,358			10,203
Total assets	$	564,596		$	550,374
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable	$	6,721		$	6,556
Accounts payable	39,019			40,696
Accrued expenses	64,098			56,076
Current maturities of long-term debt	6,433			5,410
Total current liabilities	116,271			108,738
Long-term debt, net of current maturities	459,436			462,470
Liabilities under capital leases	18,137			8,737
Non-current deferred tax liability	9,255			8,770
Pension, other post-retirement and post-employment obligations	63,722			63,606
Other long-term liabilities	3,898			11,123
Commitments and contingencies
Stockholders’ deficit
Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares outstanding as of March 31, 2016 and December 31, 2015	—			—
Common stock, $0.001 par value, 20,000,000 shares authorized; 15,994,057 and 15,745,914 shares outstanding as of March 31, 2016 and December 31, 2015, respectively	16			16
Paid-in capital	429,628			430,054
Accumulated deficit	(422,893		)	(421,448		)
Accumulated other comprehensive loss	(112,874		)	(121,692		)
Total stockholders’ deficit	(106,123		)	(113,070		)
Total liabilities and stockholders’ deficit	$	564,596		$	550,374

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Xerium Technologies, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except per share data and unaudited)

	Three Months ended March 31,
	2016			2015
Net Sales	$	114,965		$	121,029
Costs and expenses:
Cost of products sold	71,428			72,476
Selling	15,721			16,326
General and administrative	11,507			13,846
Research and development	1,940			1,962
Restructuring	2,832			2,224
	103,428			106,834
Income from operations	11,537			14,195
Interest expense, net	(10,341		)	(9,664		)
Foreign exchange gain	24			977
Income before provision for income taxes	1,220			5,508
Provision for income taxes	(2,665		)	(3,775		)
Net (loss) income	$	(1,445	)	$	1,733
Comprehensive income (loss)	$	7,373		$	(29,398	)
Net (loss) income per share:
Basic	$	(0.09	)	$	0.11
Diluted	$	(0.09	)	$	0.11
Shares used in computing net (loss) income per share:
Basic	15,789,991			15,560,995
Diluted	15,789,991			16,479,368

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Xerium Technologies, Inc.

Consolidated Statements of Cash Flows

(Dollars in thousands and unaudited)

	Three Months ended March 31,
	2016			2015
Operating activities
Net (loss) income	$	(1,445	)	$	1,733
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation	592			822
Depreciation	7,900			7,163
Amortization of intangibles	94			79
Deferred financing cost amortization	756			875
Foreign exchange loss (gain) on revaluation of debt	1,120			(1,973		)
Deferred taxes	155			979
Loss on disposition of property and equipment	17			14
Provision for doubtful accounts	(72		)	472
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(2,130		)	(592		)
Inventories	2,232			1,436
Prepaid expenses	(621		)	25
Other current assets	1,024			(1,679		)
Accounts payable and accrued expenses	3,660			2,218
Deferred and other long-term liabilities	792			(3,571		)
Net cash provided by operating activities	14,074			8,001
Investing activities
Capital expenditures	(3,550		)	(12,155		)
Proceeds from disposals of property and equipment	20			32
Net cash used in investing activities	(3,530		)	(12,123		)
Financing activities
Proceeds from borrowings	13,313			22,568
Principal payments on debt	(16,439		)	(18,331		)
Payment of financing fees	(98		)	(25		)
Payment of obligations under capital leases	(673		)	(265		)
Net cash (used in) provided by financing activities	(3,897		)	3,947
Effect of exchange rate changes on cash flows	(1,036		)	(516		)
Net increase (decrease) in cash	5,611			(691		)
Cash and cash equivalents at beginning of period	9,839			9,517
Cash and cash equivalents at end of period	$	15,450		$	8,826
Non-cash capitalized lease asset and liability	$	1,259		$	—
Accrued construction in process	$	—		$	1,519

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Xerium Technologies, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Dollars in thousands, except per share data)

1. Description of Business and Significant Accounting Policies

Description of Business

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

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements at March 31, 2016 and for the three ended March 31, 2016 and 2015 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 ("SEC"). 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 condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015 as reported on the Company's Annual Report on Form 10-K filed on March 14, 2016.

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 are as follows at:

	March 31, 2016			December 31, 2015
Raw materials	$	12,343		$	12,389
Work in process	26,695			25,203
Finished goods (includes consigned inventory of $6,496 at March 31, 2016 and $6,513 at December 31, 2015)	38,727			40,058
Inventory allowances	(6,399		)	(5,952		)
	$	71,366		$	71,698

Goodwill

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Intangible Assets (“Topic 350”). Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized, but instead, must be tested for impairment at least annually or whenever events or business conditions warrant. During the three months ended March 31, 2016, the Company evaluated events and business conditions to determine if a test for an impairment of goodwill was warranted. No such events or business conditions took place during this period, therefore no test was determined to be warranted at March 31, 2016.

Warranties

The Company offers warranties on certain roll 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

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estimates the costs that may be incurred under its warranties and records a liability in Accrued Expenses on its Consolidated Balance Sheet for such costs. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction. The Company periodically assesses the adequacy of its recorded warranty claims and adjusts the amounts as necessary. The table below represents the changes in the Company’s warranty liability for the three months ended March 31, 2016 and 2015:

	Beginning Balance		Charged to  Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Ending Balance
Three Months Ended March 31, 2016:	$	2,175	$	477	$	34		$	(189	)	$	2,497
Three Months Ended March 31, 2015:	$	2,685	$	336	$	(118	)	$	(578	)	$	2,325

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 (loss) income per share is based on the weighted-average number of shares outstanding during the period. As of March 31, 2016 and 2015, the Company had outstanding restricted stock units (“RSUs”), deferred stock units (“DSUs”) and options.

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

	Three Months ended March 31,
	2016	2015
Weighted-average common shares outstanding–basic	15,789,991	15,560,995
Dilutive effect of stock-based compensation awards outstanding	—	918,373
Weighted-average common shares outstanding–diluted	15,789,991	16,479,368

The following table sets forth the aggregate of the dilutive securities that were outstanding in the three ended March 31, 2016 and 2015, but were not included in the computation of diluted earnings per share because the impact would have been anti-dilutive:

	Three Months ended March 31,
	2016	2015
Anti-dilutive securities	738,294	21,957

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 for all other impairments in the consolidated statements of operations. For the three months ended March 31, 2016 and 2015, the Company had no impairment charges included in restructuring expense.

New Accounting Pronouncements

In March of 2016, the FASB issued Accounting Standards Update No 2016-09 Improvements to Employee Share-Based Payment Accounting ("ASC 2016-09"). ASC 2016-09 will change certain aspects of accounting for share-based payments to employees. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2014-09 is required to be adopted in January of 2017. The Company is in the process of evaluating this accounting standard update.

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In February of 2016, the FASB issued Accounting Standards Update No 2016-02 Leases ("ASC 2016-02"). ASC 2016-02 includes final guidance that requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates today’s real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. They have the option to use certain relief. Full retrospective application is prohibited. ASC 2016 - 02 is effective for public companies with annual periods beginning after 15 December 2018, and interim periods within those years. For all other entities, it is effective for annual periods beginning after 15 December 2019, and interim periods the following year. Early adoption is permitted for all entities. The Company is in the process of evaluating this accounting standard update.

In November of 2015, the FASB issued ASC 2015-17 Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes ("ASC 2015-17"). This guidance requires companies to classify all deferred tax assets and liabilities as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. For public companies, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2016 (i.e., 2017 for a calendar-year company) and interim periods within those annual periods. For all other entities, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2017 (i.e., 2018 for a calendar-year company), and interim periods within annual periods beginning a year later. Early adoption of the guidance is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company is in the process of evaluating this accounting standard update and does not expect that adopting ASC 2015-17 will have a material impact on its consolidated financial statements.

In July of 2015, the FASB issued Accounting Standards Update Inventory ("ASU 2015-11"). ASU 2015-11 applies only to first-in, first-out (FIFO) and average cost inventory costing methods and will reduce costs and increase comparability for these methods. There will be no change for last-in, first-out, (LIFO) or retail inventory methods as the costs of transitioning to a new method would outweigh the benefits due to the complexity of these methods. Under this ASU, inventory should be measured at the lower of cost and net realizable value (selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation). When the net realizable value of inventory is less than its cost, the difference will be recognized as a loss in earnings in the period in which it occurs. This ASU more closely aligns the measurement of inventory under GAAP with International Financial Reporting Standards guidance. The amendments are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and for other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively, and early application is permitted as of the beginning of an interim or annual reporting period.The Company is in the process of evaluating this accounting standard update.

In May of 2014, the FASB issued Accounting Standard Update No. 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when it satisfies the performance obligations. The Company will also be required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is required to be adopted in January of 2018. Retrospective application is required either to all periods presented or with the cumulative effect of initial adoption recognized in the period of adoption. In addition, in March of 2016, the FASB issued Accounting Standard Update No. 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross vs. Net) ("ASU 2016-08"). ASU 2016-08 amends the principal versus agent guidance in ASU 2014-09, and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transfered to the customer. ASU 2014-09 is required to be adopted in January of 2018. The Company is in the process of evaluating this accounting standard update.

2. Derivatives and Hedging

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.

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Cash Flow Hedges of Interest Rate Risk

From time to time, the Company uses interest rate derivatives to add stability to interest expense and to manage its exposure to interest rate movements. However, at March 31, 2016, the Company had no interest rate swaps.

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 ASC Topic 815. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

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

As of March 31, 2016 and December 31, 2015, 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 March 31, 2016 and December 31, 2015 and the change in fair value included in foreign exchange gain (loss) in the three months ended March 31, 2016 and 2015:

	March 31, 2016		December 31, 2015
Fair value of derivative asset (liability)	$	468	$	(1,188	)
	Three Months Ended March 31, 2016:		Three Months Ended March 31, 2015:
Change in fair value of derivative included in foreign exchange loss	$	1,170	$	(2,059	)

The following represents the notional amounts of foreign exchange forward contracts at March 31, 2016:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	3,983	$	(49,902	)

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

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At March 31, 2016 and December 31, 2015, long term debt consisted of the following:

	March 31, 2016			December 31, 2015
Senior secured term loan facility, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.0% (6.25%) net of $0.6 million discount. Matures May of 2019.	$	223,424		$	223,937
Senior Notes (Unsecured), payable semi-annually–U.S. Dollar denominated interest rate fixed at 8.875%. Matures June of 2018.	236,410			236,410
Notes payable, working capital loan, variable interest rate at 2.05%. Matures June 30, 2016, with one-year rollover option.	6,721			6,556
Fixed asset loan contract, variable interest rate of 5.78%. Matures June of 2020.	8,515			8,548
Other debt	4,116			6,278
Total debt	479,186			481,729
Less deferred financing costs	(6,596		)	(7,293		)
Less current maturities of long term debt and notes payable	(13,154		)	(11,966		)
Total long term debt	$	459,436		$	462,470

On May 17, 2013, the Company entered into a Credit and Guaranty Agreement for a $200.0 million term loan credit facility (the “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 originally for a $40.0 million asset-based revolving credit facility subject to a borrowing base among Xerium Technologies, Inc., as a US borrower, Xerium Canada Inc., as Canadian borrower, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions (the "Domestic Revolver"). On March 3, 2014, the Company entered into an amendment to the Revolving Credit and Guaranty Agreement (as amended, the “ABL Facility,” and collectively with the Term Credit Facility, the “Credit Facility”), increasing the aggregate availability under the ABL Facility to $55 million. On November 3, 2015, the Company refinanced its existing ABL Facility and entered into a new Revolving Credit and Guaranty Agreement (as amended, the "New ABL Facility") with one of its existing ABL lenders. The amount of the ABL Facility continues to provide aggregate availability of $55 million and the collateral pledged thereunder will has remained the same. The New ABL Facility matures in November of 2020 and accrues interest at LIBOR plus a margin of 75 basis points, and is 4.50% at March 31, 2016.

On August 18, 2014, the Company entered into the Second Amendment to Credit and Guaranty Agreement (the “Second Amendment”). Under the Second Amendment, the Company borrowed an additional $30.0 million by utilizing the Incremental Facility. The $30.0 million in additional borrowings was used to finance a tax amnesty payment in Brazil. The Second Amendment made no changes to the repayment and other previously disclosed terms of the Credit Facility.

The 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.

On July 17, 2015 (the "Closing Date"), Xerium China, Co., Ltd. ("Xerium China"), a wholly-owned subsidiary of the Company entered into and closed a Fixed Assets Loan Contract (the "Loan Agreement") with the Industrial and Commercial Bank of China Limited, Shanghai-Jingan Branch (the “Bank”) with respect to a RMB 58.5 million loan, which was approximately $9.4 million USD on July 17, 2015. The loan is secured by pledged machinery and equipment of Xerium China and guaranteed by Xerium Asia Pacific (Shanghai) Limited and Stowe Woodward (Changzhou) Roll Technologies Co. Ltd., which are wholly-owned subsidiaries of the Company, pursuant to guarantee agreements (the "Guarantee Agreements"). Interest on the outstanding principal balance of the loan accrues at a benchmark rate plus a margin. The current interest rate at March 31, 2016 is approximately 5.8%. The interest rate will be adjusted every 12 months during the term of the loan, based on

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the benchmark interest rate adjustment. Interest under the loan is payable quarterly in arrears. Principal on the loan is to be repaid in part every six months following the Closing Date, in accordance with a predetermined schedule set forth in the Loan Agreement. Proceeds of the Loan will be used by Xerium China to purchase production equipment. The Loan Agreement contains certain customary representations and warranties and provisions relating to events of default.

As of March 31, 2016, the outstanding balance of the Company's term debt under its Credit Facility and Notes was $459.8 million, which is net of a $0.6 million discount. In addition, as of March 31, 2016, an aggregate of $33.9 million is available for additional borrowings. This availability represents a borrowing base of $36.9 million less $3.0 million of that facility committed for letters of credit or additional borrowings.

As of March 31, 2016, the carrying value of the Company’s long term debt was $466.0 million and its fair value was approximately $419.2 million. The Company determined the fair value of its debt utilizing significant other observable inputs (Level 2 of the fair value hierarchy).

Capitalized Lease Liabilities

As of March 31, 2016, the Company had capitalized lease liabilities totaling $18.1 million. These amounts represent the lease on the corporate headquarters and the Kunshan, China facility, as well as other leases for software, vehicles and machinery and equipment. In addition, in April of 2016, the Company entered into sales - lease back arrangements totaling $6.0 for various machinery and equipment in North America. The proceeds were used to fund the JJ Plank acquisition, which closed in May of 2016.

4. Income Taxes

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

For the three months ended March 31, 2016, the provision for income taxes was $2,665 as compared to $3,775 for the three months ended March 31, 2015. The decrease in tax expense in the three months ended March 31, 2016 was primarily attributable to decreased earnings in 2016, as well as a tax benefit in the current quarter related to additional interest deductions resulting from the 2014 Brazil tax assessments, as compared to tax expense in the prior quarter resulting from an increase in the unrecognized tax benefit due to the effects of income tax audits. Generally, 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 taxrates range from 15.0% to 35.4%; 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 realized, 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 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 the Company continues to reorganize and restructure its operations, it is possible that deferred tax assets, for which no income tax benefit has previously been provided, may more likely than not become realized. The company continues to evaluate future operations and will record an income tax benefit in the period where it believes it is more likely than not that the deferred tax asset will be able to be realized. The most material unrecognized deferred tax asset relates to the U.S. By 2029, future U.S. earnings ranging between $30 million and $120 million, generated by U.S. earnings from continuing operations or qualified tax planning strategies, would be required in order to fully recognize the U.S. deferred tax asset. Historic and future ownership changes could potentially reduce the amount of net operating loss carry-forwards available for use.

As of March 31, 2016, the Company had a gross amount of unrecognized tax benefit of $7,791, exclusive of interest and penalties. The unrecognized tax benefit increased by approximately $264 during the three months ended March 31, 2016, as a result of new positions related to the current year and foreign currency effects.

The Company’s policy is to recognize interest and penalties related to income tax matters as income tax expense, which were $40 related to the unrecognized tax benefits for the three months ended March 31, 2016. The tax years 2002 through 2015

11

remain open to examination in a number of the major tax jurisdictions to which the Company and its subsidiaries are subject. The Company believes that it has made adequate provisions for all income tax uncertainties.

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

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

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

Defined Benefit Plans

	Three Months ended March 31,
	2016			2015
Service cost	$	405		$	842
Interest cost	1,485			1,670
Expected return on plan assets	(1,548		)	(1,815		)
Amortization of net loss	558			755
Net periodic benefit cost	$	900		$	1,452

6. Comprehensive Loss and Accumulated Other Comprehensive Loss

Comprehensive loss for the three months ended March 31, 2016 (net of tax expense of $67) and 2015 (net of tax expense of $851) is as follows:

	Three Months ended March 31,
	2016			2015
Net (loss) income	$	(1,445	)	$	1,733
Foreign currency translation adjustments	8,460			(32,857		)
Pension liability changes under Topic 715	358			1,684
Change in value of derivative instruments	—			42
Comprehensive income (loss)	$	7,373		$	(29,398	)

The components of accumulated other comprehensive loss for the three months ended March 31, 2016 are as follows (net of tax benefits of $6,954):

12

	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, 2015	$	(85,982	)	$	(35,759	)	$	49	$	(121,692	)
Other comprehensive loss before reclassifications	8,460			—			—		8,460
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	—			358			—		358
Net current period other comprehensive loss (income)	8,460			358			—		8,818
Balance at March 31, 2016	$	(77,522	)	$	(35,401	)	$	49	$	(112,874	)

For the three months ended March 31, 2016, the amortization of actuarial losses is included in cost of products sold and general and administrative expenses in the Consolidated Statements of Operations.

7. Restructuring Expense

For the three months ended March 31, 2016, the Company incurred restructuring expenses of $2.8 million. These included $0.7 million of charges related to the closure of the Middletown, Va. facility and $2.1 million of charges relating to headcount reductions and other costs related to previous plant closures. For the three months ended March 31, 2015, the Company incurred restructuring expenses of $2.2 million. These included charges of $1.3 million relating to the closure of the Joao Pessoa, Brazil plant and headcount reductions of $0.9 million.

The following table sets forth the significant components of the restructuring accrual (included in Accrued Expenses on our Consolidated Balance Sheet), including activity under restructuring programs for the three months ended March 31, 2016 and 2015:

	Balance at December 31,  2015		Charges		Currency     Effects		Cash Payments			Balance at March 31, 2016
Severance and other benefits	$	5,308	$	1,390	$	62	$	(1,804	)	$	4,956
Facility costs and other	903		1,442		63		(1,871		)	537
Total	$	6,211	$	2,832	$	125	$	(3,675	)	$	5,493

	Balance at December 31,  2014		Charges		Currency     Effects			Cash Payments			Balance at March 31, 2015
Severance and other benefits	$	4,880	$	881	$	(243	)	$	(1,286	)	$	4,232
Facility costs and other	818		1,343		(365		)	(1,796		)	—
Total	$	5,698	$	2,224	$	(608	)	$	(3,082	)	$	4,232

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

	Three Months Ended March 31,
	2016		2015
Clothing	$	1,452	$	2,092
Roll Covers	891		101
Corporate	489		31
Total	$	2,832	$	2,224

13

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 and the servicing of those rolls. The Company manages each of these operating segments separately.

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

Summarized financial information for the Company’s reportable segments is presented in the tables that follow for the three months ended March 31, 2016 and 2015.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended March 31, 2016:
Net Sales	$	71,337	$	43,628	$	—		$	114,965
Segment Earnings (Loss)	$	18,638	$	9,258	$	(3,937	)	$	23,959
Three Months Ended March 31, 2015:
Net Sales	$	77,284	$	43,745	$	—		$	121,029
Segment Earnings (Loss)	$	21,766	8,091		(3,647		)	$	26,210

Provided below is a reconciliation of Segment Earnings (Loss) to income before provision for income taxes for the three months ended March 31, 2016 and 2015, respectively.

	Three Months ended March 31,
	2016			2015
Segment Earnings:
Clothing	$	18,638		$	21,766
Roll Covers	9,258			8,091
Corporate	(3,937		)	(3,647		)
Stock-based compensation	(592		)	(822		)
Interest expense, net	(10,341		)	(9,664		)
Depreciation and amortization	(7,994		)	(7,242		)
Restructuring expense	(2,832		)	(2,224		)
Other non-recurring expense	(103		)	—
Plant startup costs	(877		)	(750		)
Income before provision for income taxes	$	1,220		$	5,508

9. Commitments and Contingencies

The Company is involved in various legal matters which have arisen in the ordinary course of business as a result of various immaterial labor claims, taxing authority reviews and other routine legal matters. As of March 31, 2016, 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.

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 RSUs, options and DSUs. The

14

Company recorded stock-based compensation expense during the three months ended March 31, 2016 and March 31, 2015 as follows:

	Three Months ended March 31,
	2016		2015
RSU, Options and DSU Awards (1)	$	592	$	822

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

Long-Term Incentive Program—2015 LTIP and 2014 LTIP

At March 31, 2016, based on the current stock price of the Company, management performed a valuation on the market-based stock units, and determined the estimated payout to be at 0% under both the 2015 and 2014 LTIP plans, and reduced stock compensation by $0.2 million in accordance with ASC Topic 718, Compensation—Stock Compensation.

Long-Term Incentive Program—2013 LTIP

Awards under the 2013 LTIP vested on March 15, 2016, and were converted to 207,385 shares of common stock, net of withholdings.

Directors’ Deferred Stock Unit Plan

Under the 2011 non-management directors stock plan ("2011 DSU Plan”), as amended in January of 2015, each director receives an annual retainer of $132, to be paid on a quarterly basis in arrears. Approximately half of the annual retainer is payable in DSUs, with the remaining half payable in cash or a mix of both cash and DSUs at the election of each director. The non-management directors were awarded an aggregate of 21,938 DSUs under the 2011 DSU Plan for service during the quarter ended March 31, 2016. In addition, in accordance with the 2011 DSU Plan, as amended in January of 2015, 18,524 DSUs were settled in common stock during the quarter ended March 31, 2016. In addition, in March of 2016, 22,234 DSU's were settled in common stock in connection with the retirement of a director in September of 2015.

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, as amended, the following condensed consolidating financial statements present the financial position, results of operations and cash flows of Xerium Technologies, Inc. (referred to as “Parent” for the purpose of this note only) on a stand-alone parent-only basis, the Guarantors on a Guarantors-only basis, the combined non-Guarantor subsidiaries and elimination entries necessary to arrive at the information for the Parent, the Guarantors and non-Guarantor subsidiaries on a consolidated basis.

15

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At March 31, 2016

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	2,062		$	(2	)	$	13,390		$	—		$	15,450
Accounts receivable, net	575			17,742			53,857			—			72,174
Intercompany receivables	(112,466		)	118,426			(5,960		)	—			—
Inventories, net	—			13,466			58,921			(1,021		)	71,366
Prepaid expenses	1,383			1,160			4,847			—			7,390
Other current assets	—			2,682			13,270			—			15,952
Total current assets	(108,446		)	153,474			138,325			(1,021		)	182,332
Property and equipment, net	9,082			68,922			223,678			—			301,682
Investments	846,166			226,119			—			(1,072,285		)	—
Goodwill	—			17,737			41,565			—			59,302
Intangible assets	—			1,320			135			—			1,455
Non-current deferred tax asset	—			—			9,467			—			9,467
Other assets	—			—			10,358			—			10,358
Total assets	$	746,802		$	467,572		$	423,528		$	(1,073,306	)	$	564,596
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,486		$	10,523		$	26,010		$	—		$	39,019
Accrued expenses	19,416			9,313			35,369			—			64,098
Notes payable	—			—			6,721			—			6,721
Current maturities of long-term debt	2,591			2,300			1,542			—			6,433
Total current liabilities	24,493			22,136			69,642			—			116,271
Long-term debt, net of current maturities	451,948			—			7,488			—			459,436
Liabilities under capital leases	3,208			5,513			9,416			—			18,137
Non-current deferred tax liability	(1,342		)	1,243			9,354			—			9,255
Pension, other post-retirement and post-employment obligations	19,460			2,998			41,264			—			63,722
Other long-term liabilities	—			—			3,898			—			3,898
Intercompany loans	343,403			(404,580		)	61,177			—			—
Total stockholders’ (deficit) equity	(94,368		)	840,262			221,289			(1,073,306		)	(106,123		)
Total liabilities and stockholders’ equity	$	746,802		$	467,572		$	423,528		$	(1,073,306	)	$	564,596

16

Xerium Technologies, Inc.

Consolidating Balance Sheet

At December 31, 2015

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	3,105		$	(2	)	$	6,736		$	—		$	9,839
Accounts receivable, net	20			18,585			49,957			—			68,562
Intercompany receivables	(110,541		)	113,736			(3,195		)	—			—
Inventories, net	—			14,694			57,929			(925		)	71,698
Prepaid expenses	510			1,330			4,809			—			6,649
Other current assets	—			2,849			14,020			—			16,869
Total current assets	(106,906		)	151,192			130,256			(925		)	173,617
Property and equipment, net	9,518			68,075			219,490			—			297,083
Investments	837,064			207,443			—			(1,044,507		)	—
Goodwill	—			17,737			40,862			—			58,599
Intangible assets	—			1,389			158			—			1,547
Non-current deferred tax asset	—			—			9,325						9,325
Other assets	—			—			10,203			—			10,203
Total assets	$	739,676		$	445,836		$	410,294		$	(1,045,432	)	$	550,374
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,642		$	11,100		$	26,954		$	—		$	40,696
Accrued expenses	12,661			9,668			33,747			—			56,076
Notes payable	—			—			6,556			—			6,556
Current maturities of long-term debt	2,663			1,937			810			—			5,410
Total current liabilities	17,966			22,705			68,067			—			108,738
Long-term debt, net of current maturities	451,923			—			10,547			—			462,470
Liabilities under capital leases	3,276			4,425			1,036			—			8,737
Non-current deferred tax liability	(1,515		)	1,243			9,042			—			8,770
Pension, other post-retirement and post-employment obligations	19,950			2,619			41,037			—			63,606
Other long-term liabilities	—			—			11,123			—			11,123
Intercompany loans	341,412			(403,154		)	61,742			—			—
Total stockholders’ (deficit) equity	(93,336		)	817,998			207,700			(1,045,432		)	(113,070		)
Total liabilities and stockholders’ (deficit) equity	$	739,676		$	445,836		$	410,294		$	(1,045,432	)	$	550,374

17

Xerium Technologies, Inc.

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

For the three months ended March 31, 2016

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	40,588		$	81,600		$	(7,223	)	$	114,965
Costs and expenses:
Cost of products sold	—			28,296			50,259			(7,127		)	71,428
Selling	305			5,011			10,405			—			15,721
General and administrative	2,691			923			7,893			—			11,507
Research and development	380			1,091			469			—			1,940
Restructuring	428			1,028			1,376			—			2,832
	3,804			36,349			70,402			(7,127		)	103,428
(Loss) income from operations	(3,804		)	4,239			11,198			(96		)	11,537
Interest (expense) income, net	(9,714		)	517			(1,144		)	—			(10,341		)
Foreign exchange gain (loss)	17			(54		)	61			—			24
Equity in subsidiaries income	9,102			7,804			—			(16,906		)	—
Dividend income	3,145			—			—			(3,145		)	—
(Loss) income before provision for income taxes	(1,254		)	12,506			10,115			(20,147		)	1,220
Provision for income taxes	(191		)	(2		)	(2,472		)	—			(2,665		)
Net (loss) income	$	(1,445	)	$	12,504		$	7,643		$	(20,147	)	$	(1,445	)
Comprehensive (loss) income	$	(606	)	$	12,494		$	15,632		$	(20,147	)	$	7,373

Xerium Technologies, Inc.

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

For the three months ended March 31, 2015

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	42,850		$	81,688		$	(3,509	)	$	121,029
Costs and expenses:
Cost of products sold	(348		)	29,378			46,860			(3,414		)	72,476
Selling	268			4,801			11,257			—			16,326
General and administrative	2,828			1,411			9,607			—			13,846
Research and development	232			1,196			534			—			1,962
Restructuring	7,952			175			(5,903		)	—			2,224
	10,932			36,961			62,355			(3,414		)	106,834
(Loss) income from operations	(10,932		)	5,889			19,333			(95		)	14,195
Interest (expense) income, net	(9,399		)	1,160			(1,425		)	—			(9,664		)
Foreign exchange gain (loss)	213			(141		)	905			—			977
Dividend income	700			—			—			(700		)	—
Equity in subsidiaries income	21,669			6,623			—			(28,292		)	—
Income before provision for income taxes	2,251			13,531			18,813			(29,087		)	5,508
Provision for income taxes	(518		)	(29		)	(3,228		)	—			(3,775		)
Net income	$	1,733		$	13,502		$	15,585		$	(29,087	)	$	1,733
Comprehensive income (loss)	$	1,631		$	14,143		$	(16,085	)	$	(29,087	)	$	(29,398	)

18

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2016 (Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net (loss) income	$	(1,445	)	$	12,504		$	7,643		$	(20,147	)	$	(1,445	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	603			—			(11		)	—			592
Depreciation	555			2,053			5,292			—			7,900
Amortization of intangibles	—			69			25			—			94
Deferred financing cost amortization	732			—			24			—			756
Foreign exchange gain on revaluation of debt	1,120			—			—			—			1,120
Deferred taxes	173			—			(18		)	—			155
Loss on disposition of property and equipment	—			—			17			—			17
Provision for doubtful accounts	—			—			(72		)	—			(72		)
Undistributed equity in earnings of subsidiaries	(9,102		)	(7,804		)	—			16,906			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(555		)	842			(2,417		)	—			(2,130		)
Inventories	—			1,229			907			96			2,232
Prepaid expenses	(872		)	170			81			—			(621		)
Other current assets	—			167			857			—			1,024
Accounts payable and accrued expenses	5,430			(932		)	(838		)	—			3,660
Deferred and other long-term liabilities	3			379			410			—			792
Intercompany loans	1,925			(4,721		)	2,796			—			—
Net cash (used in) provided by operating activities	(1,433		)	3,956			14,696			(3,145		)	14,074
Investing activities
Capital expenditures	(117		)	(938		)	(2,495		)	—			(3,550		)
Intercompany property and equipment transfers, net	(2		)	2			—			—			—
Proceeds from disposals of property and equipment	—			5			15			—			20
Net cash used in investing activities	(119		)	(931		)	(2,480		)	—			(3,530		)
Financing activities													—
Proceeds from borrowings	10,992			—			2,321			—			13,313
Principal payments on debt	(11,547		)	—			(4,892		)	—			(16,439		)
Dividends paid	—			(3,145		)	—			3,145			—
Payment of obligations under capital leases	(67		)	(517		)	(89		)	—			(673		)
Payment of financing fees	(116		)	—			18			—			(98		)
Intercompany loans	1,247			637			(1,884		)	—			—
Net cash provided by (used in) financing activities	509			(3,025		)	(4,526		)	3,145			(3,897		)
Effect of exchange rate changes on cash flows	—			—			(1,036		)	—			(1,036		)
Net (decrease) increase in cash	(1,043		)	—			6,654			—			5,611
Cash and cash equivalents at beginning of period	3,105			(2		)	6,736			—			9,839
Cash and cash equivalents at end of period	$	2,062		$	(2	)	$	13,390		$	—		$	15,450

19

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows (Unaudited)

For the three months ended March 31, 2015

(Dollars in Thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net income (loss)	$	1,733		$	13,502		$	15,585		$	(29,087	)	$	1,733
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	752			—			70			—			822
Depreciation	361			1,719			5,083			—			7,163
Amortization of intangibles	—			69			10			—			79
Deferred financing cost amortization	852			—			23			—			875
Foreign exchange gain on revaluation of debt	(1,973		)	—			—			—			(1,973		)
Deferred taxes	511			—			468			—			979
Loss (gain) on disposition of property and equipment	—			25			(11		)	—			14
Provision for doubtful accounts	—			49			423			—			472
Undistributed equity in earnings of subsidiaries	(21,669		)	(6,623		)	—			28,292			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(47		)	231			(776		)	—			(592		)
Inventories	—			1,047			294			95			1,436
Prepaid expenses	(1,328		)	543			810			—			25
Other current assets	—			326			(2,005		)	—			(1,679		)
Accounts payable and accrued expenses	5,618			(947		)	(2,453		)	—			2,218
Deferred and other long-term liabilities	(42		)	347			(3,876		)	—			(3,571		)
Intercompany loans	(4,290		)	(3,343		)	7,633			—			—
Net cash (used in) provided by operating activities	(19,522		)	6,945			21,278			(700		)	8,001
Investing activities
Capital expenditures	(4,697		)	(1,103		)	(6,355		)	—			(12,155		)
Intercompany property and equipment transfers, net	—			191			(191		)	—			—
Proceeds from disposals of property and equipment	—			26			6			—			32
Net cash (used in) provided by investing activities	(4,697		)	(886		)	(6,540		)	—			(12,123		)
Financing activities													—
Net increase in notes payable	—			—			3,526						3,526
Proceeds from borrowings	13,516			—			5,526			—			19,042
Principal payments on debt	(14,059		)	—			(4,272		)	—			(18,331		)
Dividends paid	—			(700		)				700			—
Payments of obligations under capitalized leases	(161		)	(101		)	(3		)	—			(265		)
Payment of deferred financing fees	(34		)	—			9			—			(25		)
Intercompany loans	19,587			(5,258		)	(14,329		)	—			—
Other financing activities	5,500			—			(5,500		)				—
Net cash provided by (used in) financing activities	24,349			(6,059		)	(15,043		)	700			3,947
Effect of exchange rate changes on cash flows	—			—			(516		)	—			(516		)
Net (decrease) increase in cash	130			—			(821		)	—			(691		)
Cash and cash equivalents at beginning of period	605			(14		)	8,926			—			9,517
Cash and cash equivalents at end of period	$	735		$	(14	)	$	8,105		$	—		$	8,826

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12. Subsequent Events

On May 3, 2016, the Company signed an agreement to acquire J.J. Plank Corporation ("JJ Plank") for approximately $18 million ($16.0 million payable at closing, with the remainder due upon certain post-closing milestones). JJ Plank is a specialty rolls & services company primarily serving targeted markets of the Company’s commercial repositioning program, and has products and services that the Company does not provide today.

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:

• rate and magnitude of decline in graphical grade paper production;

• fluctuations in interest rates and currency exchange rates;

• over-capacity of certain grades of paper, leading to distressed profit situations;            

• execution risk related to the startup of our proposed new facilities in China and Turkey and our expansion projects;

• local economic conditions in the areas around the world where we conduct business;

• quality issues with new products that could lead to higher warranty and quality costs;

• structural shifts in the demand for paper;

• the effectiveness of our strategies and plans;

• sudden increase or decrease in production capacity;

• trend toward extended life in forming fabrics, leading to reduced market size;

• our development and marketing of new technologies and our ability to compete against new technologies developed by competitors;

• variations in demand for our products, including our new products;

• fluctuations in the price of our component supply costs and energy costs;

• our ability to generate substantial operating cash flow to fund growth and unexpected cash needs;

• occurrences of terrorist attacks or an 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;

•  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 in our charter documents.

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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, 2015, filed with the SEC on March 14, 2016. 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

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

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

We operate in two principal business segments: clothing and roll covers. In our clothing segment, we manufacture and sell highly engineered synthetic textile belts that transport paper as it is processed in a paper-making machine. Clothing plays a significant role in the forming, pressing and drying stages of paper production. Because paper-making processes and machine specifications vary widely, the clothing size, form, material and function is custom engineered to fit each individual paper-making machine and process. For the three months ended March 31, 2016, our clothing segment represented 62% 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 each paper producer. We tailor our roll covers to individual paper-making machines and processes, using different materials, treatments and finishings. In addition to manufacturing and selling new roll covers, we also provide refurbishment services for previously installed roll covers and we manufacture new and rebuilt spreader rolls. We also provide various related products and services to our customers, both directly and through third party providers, as a growing part of our overall product offering through our roll covers sales channels. For the three months ended March 31, 2016, our roll cover segment represented 38% of our net sales.

Industry Trends and Outlook

The Company's global markets are slightly favorable, overall in the first quarter of 2016, but with a lot of grade and geographical differences. However, the global tissue and containerboard markets still remain very viable and are growing. In response to these trends, we are repositioning our assets, sales teams and value additive technologies to the tissue, packaging, services and non-paper segments around the world, entering new or under-served markets that present long term revenue growth opportunities.

Net Sales and Expenses

The following factors primarily drive net sales in both our clothing and roll covers segments:

•the volume (tonnage) of worldwide paper production;

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

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

•growth in developing markets, particularly in Asia;

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•the mix of paper grades being produced;

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

•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, we conduct a small portion of our business 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 we ship the product 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, we recognize revenue on the earlier of the actual product installation date or the “sunset” date.

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

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

The level of research and development spending is driven by market demand for technology enhancements, including both specific customer needs and general market requirements, as well as by our own analysis of applied technology opportunities. With the exception of purchases of equipment and similar capital items used in our research and development activities, all research and development is expensed as incurred. Research and development expenses were $1.9 million and $2.0 million for the three months ended March 31, 2016 and 2015, respectively.

Foreign Exchange

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.

During the three months ended March 31, 2016, we conducted business in nine foreign currencies. The following table provides the average exchange rate for the three months ended March 31, 2016 and 2015 of the U.S. Dollar against each of the four foreign currencies in which we conduct the largest portion of our operations.

Currency	Three months ended March 31, 2016	Three months ended March 31, 2015
Euro	$1.10 = 1 Euro	$1.13 = 1 Euro
Brazilian Real	$0.26 = 1 Brazilian Real	$0.35 = 1 Brazilian Real
Canadian Dollar	$0.73 = 1 Canadian Dollar	$0.80 = 1 Canadian Dollar
Australian Dollar	$0.72 = 1 Australian Dollar	$0.79 = 1 Australian Dollar

In the three months ended March 31, 2016, we conducted approximately 33% of our operations in Euros, approximately 7% in the Australian Dollar, approximately 8% in the Brazilian Real (although a significant portion of Brazil net sales are in U.S. Dollars) and approximately 5% in the Canadian Dollar.

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

Domestic and Foreign Operating Results:

The following is an analysis of our domestic and foreign operations during the three months ended March 31, 2016 and March 31, 2015 and a discussion of the results of operations during those periods (in thousands):

	Three Months Ended March 31,
	2016		2015
Domestic income (loss) from operations	$	435	$	(5,043	)
Foreign income from operations	11,102		19,238
Total income from operations	$	11,537	$	14,195

During the three months ended March 31, 2016, domestic income from operations was lower than foreign income from operations primarily due to product mix, market differences and various unallocated corporate expenses. All earnings generated by foreign subsidiaries after 2012 will be remitted to the parent company at some point in the future. U.S. income taxes and foreign withholding taxes have been provided related to those foreign earnings. All other foreign un-remitted earnings generated in years prior to 2013 will remain indefinitely reinvested, except for a portion of the earnings generated prior to 2013 related to our Brazil 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.

For the three months ended March 31, 2016, the Company incurred restructuring expenses of $2.8 million. These included $0.7 million of charges related to the closure of the Middletown, Va. facility and $2.1 million of charges relating to headcount reductions and other costs related to previous plant closures. For the three months ended March 31, 2015, the Company incurred restructuring expenses of $2.2 million. These included charges of $1.3 million relating to the closure of the Joao Pessoa, Brazil plant and headcount reductions of $0.9 million.

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Results of Operations

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

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Net sales	$	114,965		$	121,029
Costs and expenses:
Cost of products sold	71,428			72,476
Selling	15,721			16,326
General and administrative	11,507			13,846
Research and development	1,940			1,962
Restructuring	2,832			2,224
	103,428			106,834
Income from operations	11,537			14,195
Interest expense, net	(10,341		)	(9,664		)
Foreign exchange gain	24			977
Income before provision for income taxes	1,220			5,508
Provision for income taxes	(2,665		)	(3,775		)
Net (loss) income	$	(1,445	)	$	1,733
Comprehensive income (loss)	$	7,373		$	(29,398	)

Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

Net Sales. Net sales for the three months ended March 31, 2016 decreased by $(6.0) million, or (5.0)%, to $115.0 million from $121.0 million for the three months ended March 31, 2015. Excluding currency effects, sales were down $3.4 million, or 2.8%. For the three months ended March 31, 2016, approximately 62% of our net sales were in our clothing segment and approximately 38% were in our roll covers segment.

In our clothing segment, net sales for the three months ended March 31, 2016 decreased $(6.0) million to $71.3 million from $77.3 million for the three months ended March 31, 2015. Excluding unfavorable currency effects of $(1.1) million, the sales decline of $4.9 million, or 6.3% was primarily due to price reductions in Asia due to softening of China and Indonesia markets, volume declines in South America due to a weakening Brazil economy and timing of North America shipments.

In our rolls segment, net sales for the three months ended March 31, 2016 remained essentially flat at $43.6 million compared to $43.7 million for the three months ended March 31, 2015. Excluding unfavorable currency effects, sales were up by $1.5 million or 3.5%, driven by the Company's new growth initiatives.

Cost of Products Sold. Cost of products sold for the three months ended March 31, 2016 decreased to $71.4 million from $72.5 million for the three months ended March 31, 2015.

In our clothing segment, cost of products sold decreased $(1.2) million in the current quarter compared to the first quarter of 2015, primarily driven by decreased sales volume, discrete production inefficiencies, and unfavorable fixed cost absorption and mix, partially offset by favorable currency and cost reductions, net of inflation. Cost of products sold as a percentage of net sales increased by (3.0)% to 59.9% in the three months ended March 31, 2016 from 56.9% in the three months ended March 31, 2015. This increase was primarily due to discrete production inefficiencies, unfavorable fixed cost absorption and the effect of the ongoing shift in pricing and mix, partially offset by cost reduction initiatives, net of inflation and favorable currency effects.

In our rolls segment, cost of products sold increased $0.4 million in the current quarter compared to the first quarter of 2015, primarily as a result of increased sales volume, partially offset by cost reduction initiatives, net of inflation and favorable currency effects. Cost of products sold as a percentage of net sales increased by 1.0% to 65.8% for the three months ended March 31, 2016 from 64.8% for the three months ended March 31, 2015, primarily as a result of unfavorable currency effects.

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Selling Expenses. For the three months ended March 31, 2016, selling expenses decreased by $(0.6) million, or (3.7)%, to $15.7 million from $16.3 million for the three months ended March 31, 2015. This decrease was primarily driven by favorable currency effects.

General and Administrative Expenses. For the three months ended March 31, 2016, general and administrative expenses decreased by $(2.3) million, or (16.7)%, to $11.5 million from $13.8 million for the three months ended March 31, 2015, primarily as a result of cost reduction programs, offset by inflation, decreased bad debt reserves, decreased management incentive expense and favorable currency effects.

Restructuring Expenses. For the three months ended March 31, 2016, we incurred restructuring expenses of $2.8 million.These included $0.7 million of charges related to the closure of the Middletown, Va. facility and $2.1 million of charges relating to headcount reductions and other costs related to previous plant closures.

Interest Expense, Net. Net interest expense for the three months ended March 31, 2016 was $10.3 million, up $0.6 million from $9.7 million for the three months ended March 31, 2015. The increase was primarily due to increased average debt balances and increased average interest rates in the first quarter of 2016 versus the first quarter of 2015.

Provision for Income Taxes. For the three months ended March 31, 2016 and 2015, the provision for income taxes was $2.7 million and $3.8 million, respectively. The decrease in tax expense in the three months ended March 31, 2016, was primarily attributable to decreased earnings in 2016, as well as a one time tax benefit in the current quarter related to a Brazilian tax issue, as compared to tax expense in quarter ended March 31, 2015 resulting from an increase in the unrecognized tax benefit due to the effects of income tax audits. Generally, our provision for income taxes is primarily impacted by the income we earn in tax paying jurisdictions relative to the 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 15% to 35.36%. 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 realize 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 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, restructuring payments, working capital and capital expenditures. We plan to use cash on hand, cash generated by operations and 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, an economic recession or unavailability of credit may affect our customers’ ability to pay their debts.

Net cash provided by operating activities was $14.1 million for the three months ended March 31, 2016 and $8.0 million for the three months ended March 31, 2015. The $6.1 million increase was primarily due to the reduction in working capital in the first quarter of 2016.

Net cash used in investing activities was $(3.5) million for the three months ended March 31, 2016 and $(12.1) million for the three months ended March 31, 2015. The decrease in cash used in investing activities of $(8.6) million was primarily due to the decrease in capital expenditures.

Net cash used by financing activities was $(3.9) million for the three months ended March 31, 2016 and net cash provided by financing activities was $3.9 million for the three months ended March 31, 2015, respectively. The decrease of $(7.8) million was due to a decrease of $(9.3) million in proceeds from borrowings, partially offset by a decrease of $(1.5) million principal payments on debt and payments under capital leases.

As of March 31, 2016, the outstanding balance of the Company's term debt under its Credit Facility and Notes was $459.8 million, which is net of a $0.6 million discount. In addition, as of March 31, 2016, an aggregate of $33.9 million is available for additional borrowings. This availability represents a borrowing base of $36.9 million less $3.0 million of that facility committed for letters of credit or additional borrowings.

26

We expect to spend cash of approximately $11.0 million related to our restructuring initiatives in 2016. We have spent $3.7 million in the three months ended March 31, 2016. Actual restructuring costs for 2016 may substantially differ from estimates at this time, depending on the timing of the restructuring activities and the required actions to complete them.

Capital Expenditures

For the three months ended March 31, 2016, we had capital expenditures of $3.6 million. We are currently targeting capital expenditures for 2016 to be approximately $20.0 million. 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. We intend to use existing cash and cash from operations to fund our capital expenditures.

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

Credit Facility and Notes

On November 3, 2015, the we refinanced our existing ABL Facility and entered into a new Revolving Credit and Guaranty Agreement (as amended, the "New ABL Facility") with one of our existing ABL lenders, JPMorgan Chase Bank, N.A.   Under the New ABL Facility, JPMorgan will become the lead domestic agent and will continue as the European agent.  The amount of the ABL Facility will continue to provide aggregate availability of $55 million and the collateral pledged thereunder will also remain the same, however the New ABL Facility (1) provides increased flexibility for operations; (2) an extended maturity date of November, 2020; and (3) lower interest rates.

On July 17, 2015, Xerium China, Co., Ltd. ("Xerium China"), a wholly-owned subsidiary of the Company closed a Fixed Assets Loan Contract (the "Loan Agreement") with the Industrial and Commercial Bank of China Limited, Shanghai-Jingan Branch with respect to a RMB 58.5 million loan, which was approximately $9.4 million USD on July 17, 2015, based on an exchange rate of 6.21 RMB per 1.00 USD. The loan is secured by pledged machinery and equipment of Xerium China and guaranteed by Xerium Asia Pacific (Shanghai) Limited and Stowe Woodward (Changzhou) Roll Technologies Co. Ltd., which are wholly-owned subsidiaries of the Company, pursuant to guarantee agreements (the "Guarantee Agreements"). Interest on the outstanding principal balance of the loan accrues at a benchmark rate plus a margin. The current interest rate is approximately 5.8%. The interest rate will be adjusted every 12 months during the term of the loan, based on the benchmark interest rate adjustment. Interest under the loan is payable quarterly in arrears. Principal on the loan is to be repaid in part every six months following the Closing Date, in accordance with a predetermined schedule set forth in the Loan Agreement. Proceeds of the Loan will be used by Xerium China to purchase production equipment. The Loan Agreement contains certain customary representations and warranties and provisions relating to events of default.

On May 17, 2013, the Company entered into a Credit and Guaranty Agreement for a $200.0 million term loan credit facility (the “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 originally for a $40.0 million asset-based revolving credit facility subject to a borrowing base among Xerium Technologies, Inc., as a US borrower, Xerium Canada Inc., as Canadian borrower, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions (the "Domestic Revolver"). On March 3, 2014, the Company entered into an amendment to the Revolving Credit and Guaranty Agreement (as amended, the “ABL Facility,” and collectively with the Term Credit Facility, the “Credit Facility”), increasing the aggregate availability under the ABL Facility to $55 million. On November 3, 2015, the Company refinanced its existing ABL Facility and entered into a new Revolving Credit and Guaranty Agreement (as amended, the "New ABL Facility") with one of its existing ABL lenders. The amount of the ABL Facility continues to provide aggregate availability of $55 million and the collateral pledged thereunder will has remained the same. The New ABL Facility matures in November of 2020 and accrues interest at LIBOR plus a margin of 75 basis points, and is 4.50% at March 31, 2016.

On August 18, 2014, the Company entered into the Second Amendment to Credit and Guaranty Agreement (the “Second Amendment”). Under the Second Amendment, the Company borrowed an additional $30.0 million by utilizing the Incremental Facility. The $30 million in additional borrowings was used to finance a tax amnesty payment in Brazil. The Second Amendment made no changes to the repayment and other previously disclosed terms of the Credit Facility.

The 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;

27

•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.

We are in compliance with all covenants under the Notes and Credit Facility at March 31, 2016.

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 consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015. 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, 2015.

Non-GAAP Financial Measures

We use EBITDA and Adjusted EBITDA (each as defined in the Credit Facility) as supplementary non-GAAP liquidity measures to assist us in evaluating our liquidity and financial performance, specifically our ability to service indebtedness and to fund ongoing capital expenditures. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as a substitute for income from operations or cash flows (as determined in accordance with GAAP).

EBITDA is defined as net income before interest expense, income tax provision 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, (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 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.

28

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

	Three Months Ended March 31,
	2016			2015
Net (loss) income	$	(1,445	)	$	1,733
Stock-based compensation	592			822
Depreciation	7,900			7,163
Amortization of intangibles	94			79
Deferred financing cost amortization	756			875
Foreign exchange loss (gain) on revaluation of debt	1,120			(1,973		)
Deferred tax expense	155			979
Loss on disposition of property and equipment	17			14
Net change in operating assets and liabilities	4,885			(1,691		)
Net cash provided by operating activities	14,074			8,001
Interest expense, excluding amortization	9,585			8,789
Net change in operating assets and liabilities	(4,885		)	1,691
Current portion of income tax expense	2,510			2,796
Stock-based compensation	(592		)	(822		)
Foreign exchange gain (loss) on revaluation of debt	(1,120		)	1,973
Loss on disposition of property and equipment	(17		)	(14		)
EBITDA	19,555			22,414
Stock-based compensation	592			822
Operational restructuring expenses	2,832			2,224
Other non-recurring expenses	103			—
Plant startup costs	877			750
Adjusted EBITDA	$	23,959		$	26,210

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our interest rate risks as of March 31, 2016 have not materially changed from December 31, 2015 (see Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2015). As of March 31, 2016, we had outstanding long term debt with a carrying amount of $466.0 million with an approximate fair value of $419.2 million.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. We have carried out an evaluation, as of March 31, 2016 under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) under the Securities Exchange Act of 1934, as amended (the “Act”). Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms; and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures. No evaluation of disclosure controls and procedures can provide absolute assurance that these controls and procedures will operate effectively under all circumstances. However, our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective at the reasonable assurance level as set forth above.

(b) Changes in Internal Control over Financial Reporting. No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Act) occurred during the quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

29

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, 2015. See Note 9 to our Unaudited Condensed Consolidated Financial Statements for 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, 2015 have not materially changed.

ITEM 6.    EXHIBITS

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

30

SIGNATURES

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

	XERIUM TECHNOLOGIES, INC.
	(Registrant)
May 4, 2016	By:	/s/Clifford E. Pietrafitta
		Clifford E. Pietrafitta
		Executive Vice President and CFO
		(Principal Financial Officer)

31

EXHIBIT INDEX

Exhibit   Number	Description of Exhibits
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

32

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Harold C. Bevis, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 4, 2016

/s/ Harold C. Bevis

Harold C. Bevis

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Clifford E. Pietrafitta, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 4, 2016

/s/ Clifford E. Pietrafitta

Clifford E. Pietrafitta

Executive Vice President and CFO

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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

1) the Company’s Form 10-Q for the period ended March 31, 2016, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Company’s Form 10-Q for the period ended March 31, 2016, fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Harold C. Bevis

Harold C. Bevis

President and Chief Executive Officer

(Principal Executive Officer)

May 4, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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

1) the Company’s Form 10-Q for the period ended March 31, 2016, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Company’s Form 10-Q for the period ended March 31, 2016, fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Clifford E. Pietrafitta

Clifford E. Pietrafitta

Executive Vice President and CFO

(Principal Financial Officer)

May 4, 2016

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 01, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	XRM
Entity Registrant Name	XERIUM TECHNOLOGIES INC
Entity Central Index Key	0001287151
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		15,994,057

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 15,450	$ 9,839
Accounts receivable, net	72,174	68,562
Inventories, net	71,366	71,698
Prepaid expenses	7,390	6,649
Other current assets	15,952	16,869
Total current assets	182,332	173,617
Property and equipment, net	301,682	297,083
Goodwill	59,302	58,599
Intangible assets	1,455	1,547
Non-current deferred tax asset	9,467	9,325
Other assets	10,358	10,203
Total assets	564,596	550,374
Current liabilities:
Notes payable	6,721	6,556
Accounts payable	39,019	40,696
Accrued expenses	64,098	56,076
Current maturities of long-term debt	6,433	5,410
Total current liabilities	116,271	108,738
Long-term debt, net of current maturities	459,436	462,470
Liabilities under capital leases	18,137	8,737
Non-current deferred tax liability	9,255	8,770
Pension, other post-retirement and post-employment obligations	63,722	63,606
Other long-term liabilities	$ 3,898	$ 11,123
Commitments and contingencies
Stockholders’ deficit
Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares outstanding as of March 31, 2016 and December 31, 2015	$ 0	$ 0
Common stock, $0.001 par value, 20,000,000 shares authorized; 15,994,057 and 15,745,914 shares outstanding as of March 31, 2016 and December 31, 2015, respectively	16	16
Paid-in capital	429,628	430,054
Accumulated deficit	(422,893)	(421,448)
Accumulated other comprehensive loss	(112,874)	(121,692)
Total stockholders’ deficit	(106,123)	(113,070)
Total liabilities and stockholders’ deficit	$ 564,596	$ 550,374

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares outstanding (in shares)	15,994,057	15,745,914

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Net Sales	$ 114,965	$ 121,029
Costs and expenses:
Cost of products sold	71,428	72,476
Selling	15,721	16,326
General and administrative	11,507	13,846
Research and development	1,940	1,962
Restructuring	2,832	2,224
Costs and expenses	103,428	106,834
Income from operations	11,537	14,195
Interest expense, net	(10,341)	(9,664)
Foreign exchange gain	24	977
Income before provision for income taxes	1,220	5,508
Provision for income taxes	(2,665)	(3,775)
Net (loss) income	(1,445)	1,733
Comprehensive income (loss)	$ 7,373	$ (29,398)
Net (loss) income per share:
Basic (in dollars per share)	$ (0.09)	$ 0.11
Diluted (in dollars per share)	$ (0.09)	$ 0.11
Shares used in computing net (loss) income per share:
Basic (in shares)	15,789,991	15,560,995
Diluted (in shares)	15,789,991	16,479,368

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net (loss) income	$ (1,445)	$ 1,733
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation	592	822
Depreciation	7,900	7,163
Amortization of intangibles	94	79
Deferred financing cost amortization	756	875
Foreign exchange loss (gain) on revaluation of debt	1,120	(1,973)
Deferred taxes	155	979
Loss on disposition of property and equipment	17	14
Provision for doubtful accounts	(72)	472
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(2,130)	(592)
Inventories	2,232	1,436
Prepaid expenses	(621)	25
Other current assets	1,024	(1,679)
Accounts payable and accrued expenses	3,660	2,218
Deferred and other long-term liabilities	792	(3,571)
Net cash provided by operating activities	14,074	8,001
Investing activities
Capital expenditures	(3,550)	(12,155)
Proceeds from disposals of property and equipment	20	32
Net cash used in investing activities	(3,530)	(12,123)
Financing activities
Proceeds from borrowings	13,313	22,568
Principal payments on debt	(16,439)	(18,331)
Payment of financing fees	(98)	(25)
Payment of obligations under capital leases	(673)	(265)
Net cash (used in) provided by financing activities	(3,897)	3,947
Effect of exchange rate changes on cash flows	(1,036)	(516)
Net increase (decrease) in cash	5,611	(691)
Cash and cash equivalents at beginning of period	9,839	9,517
Cash and cash equivalents at end of period	15,450	8,826
Non-cash capitalized lease asset and liability	1,259	0
Accrued construction in process	$ 0	$ 1,519

XML

Description of Business and Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Significant Accounting Policies

Description of Business and Significant Accounting Policies

Description of Business

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

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements at March 31, 2016 and for the three ended March 31, 2016 and 2015 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 ("SEC"). 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 condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015 as reported on the Company's Annual Report on Form 10-K filed on March 14, 2016.

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 are as follows at:

	March 31, 2016			December 31, 2015
Raw materials	$	12,343		$	12,389
Work in process	26,695			25,203
Finished goods (includes consigned inventory of $6,496 at March 31, 2016 and $6,513 at December 31, 2015)	38,727			40,058
Inventory allowances	(6,399		)	(5,952		)
	$	71,366		$	71,698

Goodwill

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Intangible Assets (“Topic 350”). Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized, but instead, must be tested for impairment at least annually or whenever events or business conditions warrant. During the three months ended March 31, 2016, the Company evaluated events and business conditions to determine if a test for an impairment of goodwill was warranted. No such events or business conditions took place during this period, therefore no test was determined to be warranted at March 31, 2016.

Warranties

The Company offers warranties on certain roll 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 in Accrued Expenses on its Consolidated Balance Sheet for such costs. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction. The Company periodically assesses the adequacy of its recorded warranty claims and adjusts the amounts as necessary. The table below represents the changes in the Company’s warranty liability for the three months ended March 31, 2016 and 2015:

	Beginning Balance		Charged to  Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Ending Balance
Three Months Ended March 31, 2016:	$	2,175	$	477	$	34		$	(189	)	$	2,497
Three Months Ended March 31, 2015:	$	2,685	$	336	$	(118	)	$	(578	)	$	2,325

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 (loss) income per share is based on the weighted-average number of shares outstanding during the period. As of March 31, 2016 and 2015, the Company had outstanding restricted stock units (“RSUs”), deferred stock units (“DSUs”) and options.

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

	Three Months ended March 31,
	2016	2015
Weighted-average common shares outstanding–basic	15,789,991	15,560,995
Dilutive effect of stock-based compensation awards outstanding	—	918,373
Weighted-average common shares outstanding–diluted	15,789,991	16,479,368

The following table sets forth the aggregate of the dilutive securities that were outstanding in the three ended March 31, 2016 and 2015, but were not included in the computation of diluted earnings per share because the impact would have been anti-dilutive:

	Three Months ended March 31,
	2016	2015
Anti-dilutive securities	738,294	21,957

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 for all other impairments in the consolidated statements of operations. For the three months ended March 31, 2016 and 2015, the Company had no impairment charges included in restructuring expense.

New Accounting Pronouncements

In March of 2016, the FASB issued Accounting Standards Update No 2016-09 Improvements to Employee Share-Based Payment Accounting ("ASC 2016-09"). ASC 2016-09 will change certain aspects of accounting for share-based payments to employees. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2014-09 is required to be adopted in January of 2017. The Company is in the process of evaluating this accounting standard update.

In February of 2016, the FASB issued Accounting Standards Update No 2016-02 Leases ("ASC 2016-02"). ASC 2016-02 includes final guidance that requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates today’s real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. They have the option to use certain relief. Full retrospective application is prohibited. ASC 2016 - 02 is effective for public companies with annual periods beginning after 15 December 2018, and interim periods within those years. For all other entities, it is effective for annual periods beginning after 15 December 2019, and interim periods the following year. Early adoption is permitted for all entities. The Company is in the process of evaluating this accounting standard update.

In November of 2015, the FASB issued ASC 2015-17 Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes ("ASC 2015-17"). This guidance requires companies to classify all deferred tax assets and liabilities as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. For public companies, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2016 (i.e., 2017 for a calendar-year company) and interim periods within those annual periods. For all other entities, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2017 (i.e., 2018 for a calendar-year company), and interim periods within annual periods beginning a year later. Early adoption of the guidance is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company is in the process of evaluating this accounting standard update and does not expect that adopting ASC 2015-17 will have a material impact on its consolidated financial statements.

In July of 2015, the FASB issued Accounting Standards Update Inventory ("ASU 2015-11"). ASU 2015-11 applies only to first-in, first-out (FIFO) and average cost inventory costing methods and will reduce costs and increase comparability for these methods. There will be no change for last-in, first-out, (LIFO) or retail inventory methods as the costs of transitioning to a new method would outweigh the benefits due to the complexity of these methods. Under this ASU, inventory should be measured at the lower of cost and net realizable value (selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation). When the net realizable value of inventory is less than its cost, the difference will be recognized as a loss in earnings in the period in which it occurs. This ASU more closely aligns the measurement of inventory under GAAP with International Financial Reporting Standards guidance. The amendments are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and for other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively, and early application is permitted as of the beginning of an interim or annual reporting period.The Company is in the process of evaluating this accounting standard update.

In May of 2014, the FASB issued Accounting Standard Update No. 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when it satisfies the performance obligations. The Company will also be required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is required to be adopted in January of 2018. Retrospective application is required either to all periods presented or with the cumulative effect of initial adoption recognized in the period of adoption. In addition, in March of 2016, the FASB issued Accounting Standard Update No. 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross vs. Net) ("ASU 2016-08"). ASU 2016-08 amends the principal versus agent guidance in ASU 2014-09, and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transfered to the customer. ASU 2014-09 is required to be adopted in January of 2018. The Company is in the process of evaluating this accounting standard update.

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Derivatives and Hedging

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Derivatives and Hedging

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

From time to time, the Company uses interest rate derivatives to add stability to interest expense and to manage its exposure to interest rate movements. However, at March 31, 2016, the Company had no interest rate swaps.

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 ASC Topic 815. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

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

As of March 31, 2016 and December 31, 2015, 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 March 31, 2016 and December 31, 2015 and the change in fair value included in foreign exchange gain (loss) in the three months ended March 31, 2016 and 2015:

	March 31, 2016		December 31, 2015
Fair value of derivative asset (liability)	$	468	$	(1,188	)
	Three Months Ended March 31, 2016:		Three Months Ended March 31, 2015:
Change in fair value of derivative included in foreign exchange loss	$	1,170	$	(2,059	)

The following represents the notional amounts of foreign exchange forward contracts at March 31, 2016:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	3,983	$	(49,902	)

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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Long term Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Long term Debt

Long term Debt

At March 31, 2016 and December 31, 2015, long term debt consisted of the following:

	March 31, 2016			December 31, 2015
Senior secured term loan facility, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.0% (6.25%) net of $0.6 million discount. Matures May of 2019.	$	223,424		$	223,937
Senior Notes (Unsecured), payable semi-annually–U.S. Dollar denominated interest rate fixed at 8.875%. Matures June of 2018.	236,410			236,410
Notes payable, working capital loan, variable interest rate at 2.05%. Matures June 30, 2016, with one-year rollover option.	6,721			6,556
Fixed asset loan contract, variable interest rate of 5.78%. Matures June of 2020.	8,515			8,548
Other debt	4,116			6,278
Total debt	479,186			481,729
Less deferred financing costs	(6,596		)	(7,293		)
Less current maturities of long term debt and notes payable	(13,154		)	(11,966		)
Total long term debt	$	459,436		$	462,470

On May 17, 2013, the Company entered into a Credit and Guaranty Agreement for a $200.0 million term loan credit facility (the “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 originally for a $40.0 million asset-based revolving credit facility subject to a borrowing base among Xerium Technologies, Inc., as a US borrower, Xerium Canada Inc., as Canadian borrower, certain direct and indirect U.S. subsidiaries of the Company as guarantors and certain financial institutions (the "Domestic Revolver"). On March 3, 2014, the Company entered into an amendment to the Revolving Credit and Guaranty Agreement (as amended, the “ABL Facility,” and collectively with the Term Credit Facility, the “Credit Facility”), increasing the aggregate availability under the ABL Facility to $55 million. On November 3, 2015, the Company refinanced its existing ABL Facility and entered into a new Revolving Credit and Guaranty Agreement (as amended, the "New ABL Facility") with one of its existing ABL lenders. The amount of the ABL Facility continues to provide aggregate availability of $55 million and the collateral pledged thereunder will has remained the same. The New ABL Facility matures in November of 2020 and accrues interest at LIBOR plus a margin of 75 basis points, and is 4.50% at March 31, 2016.

On August 18, 2014, the Company entered into the Second Amendment to Credit and Guaranty Agreement (the “Second Amendment”). Under the Second Amendment, the Company borrowed an additional $30.0 million by utilizing the Incremental Facility. The $30.0 million in additional borrowings was used to finance a tax amnesty payment in Brazil. The Second Amendment made no changes to the repayment and other previously disclosed terms of the Credit Facility.

The 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.

On July 17, 2015 (the "Closing Date"), Xerium China, Co., Ltd. ("Xerium China"), a wholly-owned subsidiary of the Company entered into and closed a Fixed Assets Loan Contract (the "Loan Agreement") with the Industrial and Commercial Bank of China Limited, Shanghai-Jingan Branch (the “Bank”) with respect to a RMB 58.5 million loan, which was approximately $9.4 million USD on July 17, 2015. The loan is secured by pledged machinery and equipment of Xerium China and guaranteed by Xerium Asia Pacific (Shanghai) Limited and Stowe Woodward (Changzhou) Roll Technologies Co. Ltd., which are wholly-owned subsidiaries of the Company, pursuant to guarantee agreements (the "Guarantee Agreements"). Interest on the outstanding principal balance of the loan accrues at a benchmark rate plus a margin. The current interest rate at March 31, 2016 is approximately 5.8%. The interest rate will be adjusted every 12 months during the term of the loan, based on the benchmark interest rate adjustment. Interest under the loan is payable quarterly in arrears. Principal on the loan is to be repaid in part every six months following the Closing Date, in accordance with a predetermined schedule set forth in the Loan Agreement. Proceeds of the Loan will be used by Xerium China to purchase production equipment. The Loan Agreement contains certain customary representations and warranties and provisions relating to events of default.

As of March 31, 2016, the outstanding balance of the Company's term debt under its Credit Facility and Notes was $459.8 million, which is net of a $0.6 million discount. In addition, as of March 31, 2016, an aggregate of $33.9 million is available for additional borrowings. This availability represents a borrowing base of $36.9 million less $3.0 million of that facility committed for letters of credit or additional borrowings.

As of March 31, 2016, the carrying value of the Company’s long term debt was $466.0 million and its fair value was approximately $419.2 million. The Company determined the fair value of its debt utilizing significant other observable inputs (Level 2 of the fair value hierarchy).

Capitalized Lease Liabilities

As of March 31, 2016, the Company had capitalized lease liabilities totaling $18.1 million. These amounts represent the lease on the corporate headquarters and the Kunshan, China facility, as well as other leases for software, vehicles and machinery and equipment. In addition, in April of 2016, the Company entered into sales - lease back arrangements totaling $6.0 for various machinery and equipment in North America. The proceeds were used to fund the JJ Plank acquisition, which closed in May of 2016.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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

For the three months ended March 31, 2016, the provision for income taxes was $2,665 as compared to $3,775 for the three months ended March 31, 2015. The decrease in tax expense in the three months ended March 31, 2016 was primarily attributable to decreased earnings in 2016, as well as a tax benefit in the current quarter related to additional interest deductions resulting from the 2014 Brazil tax assessments, as compared to tax expense in the prior quarter resulting from an increase in the unrecognized tax benefit due to the effects of income tax audits. Generally, 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 taxrates range from 15.0% to 35.4%; 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 realized, 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 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 the Company continues to reorganize and restructure its operations, it is possible that deferred tax assets, for which no income tax benefit has previously been provided, may more likely than not become realized. The company continues to evaluate future operations and will record an income tax benefit in the period where it believes it is more likely than not that the deferred tax asset will be able to be realized. The most material unrecognized deferred tax asset relates to the U.S. By 2029, future U.S. earnings ranging between $30 million and $120 million, generated by U.S. earnings from continuing operations or qualified tax planning strategies, would be required in order to fully recognize the U.S. deferred tax asset. Historic and future ownership changes could potentially reduce the amount of net operating loss carry-forwards available for use.

As of March 31, 2016, the Company had a gross amount of unrecognized tax benefit of $7,791, exclusive of interest and penalties. The unrecognized tax benefit increased by approximately $264 during the three months ended March 31, 2016, as a result of new positions related to the current year and foreign currency effects.

The Company’s policy is to recognize interest and penalties related to income tax matters as income tax expense, which were $40 related to the unrecognized tax benefits for the three months ended March 31, 2016. The tax years 2002 through 2015 remain open to examination in a number of the major tax 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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Pensions, Other Post-retirement and Post-employment Benefits

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Pensions, Other Post-retirement and Post-employment Benefits

Pensions, Other Post-retirement and Post-employment Benefits

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

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

Defined Benefit Plans

	Three Months ended March 31,
	2016			2015
Service cost	$	405		$	842
Interest cost	1,485			1,670
Expected return on plan assets	(1,548		)	(1,815		)
Amortization of net loss	558			755
Net periodic benefit cost	$	900		$	1,452

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Comprehensive Loss and Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Comprehensive Loss and Accumulated Other Comprehensive Loss

Comprehensive Loss and Accumulated Other Comprehensive Loss

Comprehensive loss for the three months ended March 31, 2016 (net of tax expense of $67) and 2015 (net of tax expense of $851) is as follows:

	Three Months ended March 31,
	2016			2015
Net (loss) income	$	(1,445	)	$	1,733
Foreign currency translation adjustments	8,460			(32,857		)
Pension liability changes under Topic 715	358			1,684
Change in value of derivative instruments	—			42
Comprehensive income (loss)	$	7,373		$	(29,398	)

The components of accumulated other comprehensive loss for the three months ended March 31, 2016 are as follows (net of tax benefits of $6,954):

	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, 2015	$	(85,982	)	$	(35,759	)	$	49	$	(121,692	)
Other comprehensive loss before reclassifications	8,460			—			—		8,460
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	—			358			—		358
Net current period other comprehensive loss (income)	8,460			358			—		8,818
Balance at March 31, 2016	$	(77,522	)	$	(35,401	)	$	49	$	(112,874	)

For the three months ended March 31, 2016, the amortization of actuarial losses is included in cost of products sold and general and administrative expenses in the Consolidated Statements of Operations.

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Restructuring and Impairment Expense

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Impairment Expense

Restructuring Expense

For the three months ended March 31, 2016, the Company incurred restructuring expenses of $2.8 million. These included $0.7 million of charges related to the closure of the Middletown, Va. facility and $2.1 million of charges relating to headcount reductions and other costs related to previous plant closures. For the three months ended March 31, 2015, the Company incurred restructuring expenses of $2.2 million. These included charges of $1.3 million relating to the closure of the Joao Pessoa, Brazil plant and headcount reductions of $0.9 million.

The following table sets forth the significant components of the restructuring accrual (included in Accrued Expenses on our Consolidated Balance Sheet), including activity under restructuring programs for the three months ended March 31, 2016 and 2015:

	Balance at December 31,  2015		Charges		Currency     Effects		Cash Payments			Balance at March 31, 2016
Severance and other benefits	$	5,308	$	1,390	$	62	$	(1,804	)	$	4,956
Facility costs and other	903		1,442		63		(1,871		)	537
Total	$	6,211	$	2,832	$	125	$	(3,675	)	$	5,493

	Balance at December 31,  2014		Charges		Currency     Effects			Cash Payments			Balance at March 31, 2015
Severance and other benefits	$	4,880	$	881	$	(243	)	$	(1,286	)	$	4,232
Facility costs and other	818		1,343		(365		)	(1,796		)	—
Total	$	5,698	$	2,224	$	(608	)	$	(3,082	)	$	4,232

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

	Three Months Ended March 31,
	2016		2015
Clothing	$	1,452	$	2,092
Roll Covers	891		101
Corporate	489		31
Total	$	2,832	$	2,224

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Business Segment Information

3 Months Ended

Mar. 31, 2016

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 and the servicing of those rolls. The Company manages each of these operating segments separately.

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

Summarized financial information for the Company’s reportable segments is presented in the tables that follow for the three months ended March 31, 2016 and 2015.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended March 31, 2016:
Net Sales	$	71,337	$	43,628	$	—		$	114,965
Segment Earnings (Loss)	$	18,638	$	9,258	$	(3,937	)	$	23,959
Three Months Ended March 31, 2015:
Net Sales	$	77,284	$	43,745	$	—		$	121,029
Segment Earnings (Loss)	$	21,766	8,091		(3,647		)	$	26,210

Provided below is a reconciliation of Segment Earnings (Loss) to income before provision for income taxes for the three months ended March 31, 2016 and 2015, respectively.

	Three Months ended March 31,
	2016			2015
Segment Earnings:
Clothing	$	18,638		$	21,766
Roll Covers	9,258			8,091
Corporate	(3,937		)	(3,647		)
Stock-based compensation	(592		)	(822		)
Interest expense, net	(10,341		)	(9,664		)
Depreciation and amortization	(7,994		)	(7,242		)
Restructuring expense	(2,832		)	(2,224		)
Other non-recurring expense	(103		)	—
Plant startup costs	(877		)	(750		)
Income before provision for income taxes	$	1,220		$	5,508

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is involved in various legal matters which have arisen in the ordinary course of business as a result of various immaterial labor claims, taxing authority reviews and other routine legal matters. As of March 31, 2016, 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.

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Stock-Based Compensation and Stockholders' Deficit

3 Months Ended

Mar. 31, 2016

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

Stock-Based Compensation and Stockholders' Deficit

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 RSUs, options and DSUs. The Company recorded stock-based compensation expense during the three months ended March 31, 2016 and March 31, 2015 as follows:

	Three Months ended March 31,
	2016		2015
RSU, Options and DSU Awards (1)	$	592	$	822

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

Long-Term Incentive Program—2015 LTIP and 2014 LTIP

At March 31, 2016, based on the current stock price of the Company, management performed a valuation on the market-based stock units, and determined the estimated payout to be at 0% under both the 2015 and 2014 LTIP plans, and reduced stock compensation by $0.2 million in accordance with ASC Topic 718, Compensation—Stock Compensation.

Long-Term Incentive Program—2013 LTIP

Awards under the 2013 LTIP vested on March 15, 2016, and were converted to 207,385 shares of common stock, net of withholdings.

Directors’ Deferred Stock Unit Plan

Under the 2011 non-management directors stock plan ("2011 DSU Plan”), as amended in January of 2015, each director receives an annual retainer of $132, to be paid on a quarterly basis in arrears. Approximately half of the annual retainer is payable in DSUs, with the remaining half payable in cash or a mix of both cash and DSUs at the election of each director. The non-management directors were awarded an aggregate of 21,938 DSUs under the 2011 DSU Plan for service during the quarter ended March 31, 2016. In addition, in accordance with the 2011 DSU Plan, as amended in January of 2015, 18,524 DSUs were settled in common stock during the quarter ended March 31, 2016. In addition, in March of 2016, 22,234 DSU's were settled in common stock in connection with the retirement of a director in September of 2015.

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Supplemental Guarantor Financial Information

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Guarantor Financial Information

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, as amended, the following condensed consolidating financial statements present the financial position, results of operations and cash flows of Xerium Technologies, Inc. (referred to as “Parent” for the purpose of this note only) on a stand-alone parent-only basis, the Guarantors on a Guarantors-only basis, the combined non-Guarantor subsidiaries and elimination entries necessary to arrive at the information for the Parent, the Guarantors and non-Guarantor subsidiaries on a consolidated basis.

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At March 31, 2016

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	2,062		$	(2	)	$	13,390		$	—		$	15,450
Accounts receivable, net	575			17,742			53,857			—			72,174
Intercompany receivables	(112,466		)	118,426			(5,960		)	—			—
Inventories, net	—			13,466			58,921			(1,021		)	71,366
Prepaid expenses	1,383			1,160			4,847			—			7,390
Other current assets	—			2,682			13,270			—			15,952
Total current assets	(108,446		)	153,474			138,325			(1,021		)	182,332
Property and equipment, net	9,082			68,922			223,678			—			301,682
Investments	846,166			226,119			—			(1,072,285		)	—
Goodwill	—			17,737			41,565			—			59,302
Intangible assets	—			1,320			135			—			1,455
Non-current deferred tax asset	—			—			9,467			—			9,467
Other assets	—			—			10,358			—			10,358
Total assets	$	746,802		$	467,572		$	423,528		$	(1,073,306	)	$	564,596
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,486		$	10,523		$	26,010		$	—		$	39,019
Accrued expenses	19,416			9,313			35,369			—			64,098
Notes payable	—			—			6,721			—			6,721
Current maturities of long-term debt	2,591			2,300			1,542			—			6,433
Total current liabilities	24,493			22,136			69,642			—			116,271
Long-term debt, net of current maturities	451,948			—			7,488			—			459,436
Liabilities under capital leases	3,208			5,513			9,416			—			18,137
Non-current deferred tax liability	(1,342		)	1,243			9,354			—			9,255
Pension, other post-retirement and post-employment obligations	19,460			2,998			41,264			—			63,722
Other long-term liabilities	—			—			3,898			—			3,898
Intercompany loans	343,403			(404,580		)	61,177			—			—
Total stockholders’ (deficit) equity	(94,368		)	840,262			221,289			(1,073,306		)	(106,123		)
Total liabilities and stockholders’ equity	$	746,802		$	467,572		$	423,528		$	(1,073,306	)	$	564,596

Xerium Technologies, Inc.

Consolidating Balance Sheet

At December 31, 2015

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	3,105		$	(2	)	$	6,736		$	—		$	9,839
Accounts receivable, net	20			18,585			49,957			—			68,562
Intercompany receivables	(110,541		)	113,736			(3,195		)	—			—
Inventories, net	—			14,694			57,929			(925		)	71,698
Prepaid expenses	510			1,330			4,809			—			6,649
Other current assets	—			2,849			14,020			—			16,869
Total current assets	(106,906		)	151,192			130,256			(925		)	173,617
Property and equipment, net	9,518			68,075			219,490			—			297,083
Investments	837,064			207,443			—			(1,044,507		)	—
Goodwill	—			17,737			40,862			—			58,599
Intangible assets	—			1,389			158			—			1,547
Non-current deferred tax asset	—			—			9,325						9,325
Other assets	—			—			10,203			—			10,203
Total assets	$	739,676		$	445,836		$	410,294		$	(1,045,432	)	$	550,374
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,642		$	11,100		$	26,954		$	—		$	40,696
Accrued expenses	12,661			9,668			33,747			—			56,076
Notes payable	—			—			6,556			—			6,556
Current maturities of long-term debt	2,663			1,937			810			—			5,410
Total current liabilities	17,966			22,705			68,067			—			108,738
Long-term debt, net of current maturities	451,923			—			10,547			—			462,470
Liabilities under capital leases	3,276			4,425			1,036			—			8,737
Non-current deferred tax liability	(1,515		)	1,243			9,042			—			8,770
Pension, other post-retirement and post-employment obligations	19,950			2,619			41,037			—			63,606
Other long-term liabilities	—			—			11,123			—			11,123
Intercompany loans	341,412			(403,154		)	61,742			—			—
Total stockholders’ (deficit) equity	(93,336		)	817,998			207,700			(1,045,432		)	(113,070		)
Total liabilities and stockholders’ (deficit) equity	$	739,676		$	445,836		$	410,294		$	(1,045,432	)	$	550,374

Xerium Technologies, Inc.

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

For the three months ended March 31, 2016

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	40,588		$	81,600		$	(7,223	)	$	114,965
Costs and expenses:
Cost of products sold	—			28,296			50,259			(7,127		)	71,428
Selling	305			5,011			10,405			—			15,721
General and administrative	2,691			923			7,893			—			11,507
Research and development	380			1,091			469			—			1,940
Restructuring	428			1,028			1,376			—			2,832
	3,804			36,349			70,402			(7,127		)	103,428
(Loss) income from operations	(3,804		)	4,239			11,198			(96		)	11,537
Interest (expense) income, net	(9,714		)	517			(1,144		)	—			(10,341		)
Foreign exchange gain (loss)	17			(54		)	61			—			24
Equity in subsidiaries income	9,102			7,804			—			(16,906		)	—
Dividend income	3,145			—			—			(3,145		)	—
(Loss) income before provision for income taxes	(1,254		)	12,506			10,115			(20,147		)	1,220
Provision for income taxes	(191		)	(2		)	(2,472		)	—			(2,665		)
Net (loss) income	$	(1,445	)	$	12,504		$	7,643		$	(20,147	)	$	(1,445	)
Comprehensive (loss) income	$	(606	)	$	12,494		$	15,632		$	(20,147	)	$	7,373

Xerium Technologies, Inc.

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

For the three months ended March 31, 2015

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	42,850		$	81,688		$	(3,509	)	$	121,029
Costs and expenses:
Cost of products sold	(348		)	29,378			46,860			(3,414		)	72,476
Selling	268			4,801			11,257			—			16,326
General and administrative	2,828			1,411			9,607			—			13,846
Research and development	232			1,196			534			—			1,962
Restructuring	7,952			175			(5,903		)	—			2,224
	10,932			36,961			62,355			(3,414		)	106,834
(Loss) income from operations	(10,932		)	5,889			19,333			(95		)	14,195
Interest (expense) income, net	(9,399		)	1,160			(1,425		)	—			(9,664		)
Foreign exchange gain (loss)	213			(141		)	905			—			977
Dividend income	700			—			—			(700		)	—
Equity in subsidiaries income	21,669			6,623			—			(28,292		)	—
Income before provision for income taxes	2,251			13,531			18,813			(29,087		)	5,508
Provision for income taxes	(518		)	(29		)	(3,228		)	—			(3,775		)
Net income	$	1,733		$	13,502		$	15,585		$	(29,087	)	$	1,733
Comprehensive income (loss)	$	1,631		$	14,143		$	(16,085	)	$	(29,087	)	$	(29,398	)

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2016 (Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net (loss) income	$	(1,445	)	$	12,504		$	7,643		$	(20,147	)	$	(1,445	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	603			—			(11		)	—			592
Depreciation	555			2,053			5,292			—			7,900
Amortization of intangibles	—			69			25			—			94
Deferred financing cost amortization	732			—			24			—			756
Foreign exchange gain on revaluation of debt	1,120			—			—			—			1,120
Deferred taxes	173			—			(18		)	—			155
Loss on disposition of property and equipment	—			—			17			—			17
Provision for doubtful accounts	—			—			(72		)	—			(72		)
Undistributed equity in earnings of subsidiaries	(9,102		)	(7,804		)	—			16,906			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(555		)	842			(2,417		)	—			(2,130		)
Inventories	—			1,229			907			96			2,232
Prepaid expenses	(872		)	170			81			—			(621		)
Other current assets	—			167			857			—			1,024
Accounts payable and accrued expenses	5,430			(932		)	(838		)	—			3,660
Deferred and other long-term liabilities	3			379			410			—			792
Intercompany loans	1,925			(4,721		)	2,796			—			—
Net cash (used in) provided by operating activities	(1,433		)	3,956			14,696			(3,145		)	14,074
Investing activities
Capital expenditures	(117		)	(938		)	(2,495		)	—			(3,550		)
Intercompany property and equipment transfers, net	(2		)	2			—			—			—
Proceeds from disposals of property and equipment	—			5			15			—			20
Net cash used in investing activities	(119		)	(931		)	(2,480		)	—			(3,530		)
Financing activities													—
Proceeds from borrowings	10,992			—			2,321			—			13,313
Principal payments on debt	(11,547		)	—			(4,892		)	—			(16,439		)
Dividends paid	—			(3,145		)	—			3,145			—
Payment of obligations under capital leases	(67		)	(517		)	(89		)	—			(673		)
Payment of financing fees	(116		)	—			18			—			(98		)
Intercompany loans	1,247			637			(1,884		)	—			—
Net cash provided by (used in) financing activities	509			(3,025		)	(4,526		)	3,145			(3,897		)
Effect of exchange rate changes on cash flows	—			—			(1,036		)	—			(1,036		)
Net (decrease) increase in cash	(1,043		)	—			6,654			—			5,611
Cash and cash equivalents at beginning of period	3,105			(2		)	6,736			—			9,839
Cash and cash equivalents at end of period	$	2,062		$	(2	)	$	13,390		$	—		$	15,450

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows (Unaudited)

For the three months ended March 31, 2015

(Dollars in Thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net income (loss)	$	1,733		$	13,502		$	15,585		$	(29,087	)	$	1,733
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	752			—			70			—			822
Depreciation	361			1,719			5,083			—			7,163
Amortization of intangibles	—			69			10			—			79
Deferred financing cost amortization	852			—			23			—			875
Foreign exchange gain on revaluation of debt	(1,973		)	—			—			—			(1,973		)
Deferred taxes	511			—			468			—			979
Loss (gain) on disposition of property and equipment	—			25			(11		)	—			14
Provision for doubtful accounts	—			49			423			—			472
Undistributed equity in earnings of subsidiaries	(21,669		)	(6,623		)	—			28,292			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(47		)	231			(776		)	—			(592		)
Inventories	—			1,047			294			95			1,436
Prepaid expenses	(1,328		)	543			810			—			25
Other current assets	—			326			(2,005		)	—			(1,679		)
Accounts payable and accrued expenses	5,618			(947		)	(2,453		)	—			2,218
Deferred and other long-term liabilities	(42		)	347			(3,876		)	—			(3,571		)
Intercompany loans	(4,290		)	(3,343		)	7,633			—			—
Net cash (used in) provided by operating activities	(19,522		)	6,945			21,278			(700		)	8,001
Investing activities
Capital expenditures	(4,697		)	(1,103		)	(6,355		)	—			(12,155		)
Intercompany property and equipment transfers, net	—			191			(191		)	—			—
Proceeds from disposals of property and equipment	—			26			6			—			32
Net cash (used in) provided by investing activities	(4,697		)	(886		)	(6,540		)	—			(12,123		)
Financing activities													—
Net increase in notes payable	—			—			3,526						3,526
Proceeds from borrowings	13,516			—			5,526			—			19,042
Principal payments on debt	(14,059		)	—			(4,272		)	—			(18,331		)
Dividends paid	—			(700		)				700			—
Payments of obligations under capitalized leases	(161		)	(101		)	(3		)	—			(265		)
Payment of deferred financing fees	(34		)	—			9			—			(25		)
Intercompany loans	19,587			(5,258		)	(14,329		)	—			—
Other financing activities	5,500			—			(5,500		)				—
Net cash provided by (used in) financing activities	24,349			(6,059		)	(15,043		)	700			3,947
Effect of exchange rate changes on cash flows	—			—			(516		)	—			(516		)
Net (decrease) increase in cash	130			—			(821		)	—			(691		)
Cash and cash equivalents at beginning of period	605			(14		)	8,926			—			9,517
Cash and cash equivalents at end of period	$	735		$	(14	)	$	8,105		$	—		$	8,826

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Subsequent Events

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On May 3, 2016, the Company signed an agreement to acquire J.J. Plank Corporation ("JJ Plank") for approximately $18 million ($16.0 million payable at closing, with the remainder due upon certain post-closing milestones). JJ Plank is a specialty rolls & services company primarily serving targeted markets of the Company’s commercial repositioning program, and has products and services that the Company does not provide today.

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Description of Business and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements at March 31, 2016 and for the three ended March 31, 2016 and 2015 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 ("SEC"). 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 condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015 as reported on the Company's Annual Report on Form 10-K filed on March 14, 2016.

Inventories, net

Inventories, net

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

Goodwill

Goodwill

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Intangible Assets (“Topic 350”). Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized, but instead, must be tested for impairment at least annually or whenever events or business conditions warrant. During the three months ended March 31, 2016, the Company evaluated events and business conditions to determine if a test for an impairment of goodwill was warranted. No such events or business conditions took place during this period, therefore no test was determined to be warranted at March 31, 2016.

Warranties

Warranties

The Company offers warranties on certain roll 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 in Accrued Expenses on its Consolidated Balance Sheet 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 (loss) income per share is based on the weighted-average number of shares outstanding during the period.

Impairment

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 for all other impairments in the consolidated statements of operations.

New Accounting Pronouncements

New Accounting Pronouncements

In March of 2016, the FASB issued Accounting Standards Update No 2016-09 Improvements to Employee Share-Based Payment Accounting ("ASC 2016-09"). ASC 2016-09 will change certain aspects of accounting for share-based payments to employees. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2014-09 is required to be adopted in January of 2017. The Company is in the process of evaluating this accounting standard update.

In February of 2016, the FASB issued Accounting Standards Update No 2016-02 Leases ("ASC 2016-02"). ASC 2016-02 includes final guidance that requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates today’s real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. They have the option to use certain relief. Full retrospective application is prohibited. ASC 2016 - 02 is effective for public companies with annual periods beginning after 15 December 2018, and interim periods within those years. For all other entities, it is effective for annual periods beginning after 15 December 2019, and interim periods the following year. Early adoption is permitted for all entities. The Company is in the process of evaluating this accounting standard update.

In November of 2015, the FASB issued ASC 2015-17 Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes ("ASC 2015-17"). This guidance requires companies to classify all deferred tax assets and liabilities as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. For public companies, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2016 (i.e., 2017 for a calendar-year company) and interim periods within those annual periods. For all other entities, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2017 (i.e., 2018 for a calendar-year company), and interim periods within annual periods beginning a year later. Early adoption of the guidance is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company is in the process of evaluating this accounting standard update and does not expect that adopting ASC 2015-17 will have a material impact on its consolidated financial statements.

In July of 2015, the FASB issued Accounting Standards Update Inventory ("ASU 2015-11"). ASU 2015-11 applies only to first-in, first-out (FIFO) and average cost inventory costing methods and will reduce costs and increase comparability for these methods. There will be no change for last-in, first-out, (LIFO) or retail inventory methods as the costs of transitioning to a new method would outweigh the benefits due to the complexity of these methods. Under this ASU, inventory should be measured at the lower of cost and net realizable value (selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation). When the net realizable value of inventory is less than its cost, the difference will be recognized as a loss in earnings in the period in which it occurs. This ASU more closely aligns the measurement of inventory under GAAP with International Financial Reporting Standards guidance. The amendments are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and for other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively, and early application is permitted as of the beginning of an interim or annual reporting period.The Company is in the process of evaluating this accounting standard update.

In May of 2014, the FASB issued Accounting Standard Update No. 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when it satisfies the performance obligations. The Company will also be required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is required to be adopted in January of 2018. Retrospective application is required either to all periods presented or with the cumulative effect of initial adoption recognized in the period of adoption. In addition, in March of 2016, the FASB issued Accounting Standard Update No. 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross vs. Net) ("ASU 2016-08"). ASU 2016-08 amends the principal versus agent guidance in ASU 2014-09, and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transfered to the customer. ASU 2014-09 is required to be adopted in January of 2018. The Company is in the process of evaluating this accounting standard update.

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Description of Business and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of Inventories

The components of inventories are as follows at:

	March 31, 2016			December 31, 2015
Raw materials	$	12,343		$	12,389
Work in process	26,695			25,203
Finished goods (includes consigned inventory of $6,496 at March 31, 2016 and $6,513 at December 31, 2015)	38,727			40,058
Inventory allowances	(6,399		)	(5,952		)
	$	71,366		$	71,698

Changes in Warranty Liability

The table below represents the changes in the Company’s warranty liability for the three months ended March 31, 2016 and 2015:

	Beginning Balance		Charged to  Cost of Sales		Effect of Foreign Currency Translation			Deduction from Reserves			Ending Balance
Three Months Ended March 31, 2016:	$	2,175	$	477	$	34		$	(189	)	$	2,497
Three Months Ended March 31, 2015:	$	2,685	$	336	$	(118	)	$	(578	)	$	2,325

Computation of Basic and Diluted Weighted-Average Shares

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

	Three Months ended March 31,
	2016	2015
Weighted-average common shares outstanding–basic	15,789,991	15,560,995
Dilutive effect of stock-based compensation awards outstanding	—	918,373
Weighted-average common shares outstanding–diluted	15,789,991	16,479,368

Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share

The following table sets forth the aggregate of the dilutive securities that were outstanding in the three ended March 31, 2016 and 2015, but were not included in the computation of diluted earnings per share because the impact would have been anti-dilutive:

	Three Months ended March 31,
	2016	2015
Anti-dilutive securities	738,294	21,957

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Derivatives and Hedging (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following represents the fair value of these derivatives at March 31, 2016 and December 31, 2015 and the change in fair value included in foreign exchange gain (loss) in the three months ended March 31, 2016 and 2015:

	March 31, 2016		December 31, 2015
Fair value of derivative asset (liability)	$	468	$	(1,188	)
	Three Months Ended March 31, 2016:		Three Months Ended March 31, 2015:
Change in fair value of derivative included in foreign exchange loss	$	1,170	$	(2,059	)

Notional Amounts of Foreign Exchange Forward Contracts

The following represents the notional amounts of foreign exchange forward contracts at March 31, 2016:

	Notional Sold		Notional Purchased
Non-designated hedges of foreign exchange risk	$	3,983	$	(49,902	)

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Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of Long Term Debt

At March 31, 2016 and December 31, 2015, long term debt consisted of the following:

	March 31, 2016			December 31, 2015
Senior secured term loan facility, payable quarterly, U.S. Dollar denominated–LIBOR (minimum 1.25%) plus 5.0% (6.25%) net of $0.6 million discount. Matures May of 2019.	$	223,424		$	223,937
Senior Notes (Unsecured), payable semi-annually–U.S. Dollar denominated interest rate fixed at 8.875%. Matures June of 2018.	236,410			236,410
Notes payable, working capital loan, variable interest rate at 2.05%. Matures June 30, 2016, with one-year rollover option.	6,721			6,556
Fixed asset loan contract, variable interest rate of 5.78%. Matures June of 2020.	8,515			8,548
Other debt	4,116			6,278
Total debt	479,186			481,729
Less deferred financing costs	(6,596		)	(7,293		)
Less current maturities of long term debt and notes payable	(13,154		)	(11,966		)
Total long term debt	$	459,436		$	462,470

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

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

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

Defined Benefit Plans

	Three Months ended March 31,
	2016			2015
Service cost	$	405		$	842
Interest cost	1,485			1,670
Expected return on plan assets	(1,548		)	(1,815		)
Amortization of net loss	558			755
Net periodic benefit cost	$	900		$	1,452

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Comprehensive Loss and Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Components of Comprehensive Loss, Net of Tax

Comprehensive loss for the three months ended March 31, 2016 (net of tax expense of $67) and 2015 (net of tax expense of $851) is as follows:

	Three Months ended March 31,
	2016			2015
Net (loss) income	$	(1,445	)	$	1,733
Foreign currency translation adjustments	8,460			(32,857		)
Pension liability changes under Topic 715	358			1,684
Change in value of derivative instruments	—			42
Comprehensive income (loss)	$	7,373		$	(29,398	)

Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss for the three months ended March 31, 2016 are as follows (net of tax benefits of $6,954):

	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, 2015	$	(85,982	)	$	(35,759	)	$	49	$	(121,692	)
Other comprehensive loss before reclassifications	8,460			—			—		8,460
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	—			358			—		358
Net current period other comprehensive loss (income)	8,460			358			—		8,818
Balance at March 31, 2016	$	(77,522	)	$	(35,401	)	$	49	$	(112,874	)

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Restructuring and Impairment Expense (Tables)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring Programs

The following table sets forth the significant components of the restructuring accrual (included in Accrued Expenses on our Consolidated Balance Sheet), including activity under restructuring programs for the three months ended March 31, 2016 and 2015:

	Balance at December 31,  2015		Charges		Currency     Effects		Cash Payments			Balance at March 31, 2016
Severance and other benefits	$	5,308	$	1,390	$	62	$	(1,804	)	$	4,956
Facility costs and other	903		1,442		63		(1,871		)	537
Total	$	6,211	$	2,832	$	125	$	(3,675	)	$	5,493

	Balance at December 31,  2014		Charges		Currency     Effects			Cash Payments			Balance at March 31, 2015
Severance and other benefits	$	4,880	$	881	$	(243	)	$	(1,286	)	$	4,232
Facility costs and other	818		1,343		(365		)	(1,796		)	—
Total	$	5,698	$	2,224	$	(608	)	$	(3,082	)	$	4,232

Restructuring and Impairment Expense by Segment

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

	Three Months Ended March 31,
	2016		2015
Clothing	$	1,452	$	2,092
Roll Covers	891		101
Corporate	489		31
Total	$	2,832	$	2,224

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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Summarized Financial Information and Segment Earnings (Loss)

Summarized financial information for the Company’s reportable segments is presented in the tables that follow for the three months ended March 31, 2016 and 2015.

	Clothing		Roll Covers		Corporate			Total
Three Months Ended March 31, 2016:
Net Sales	$	71,337	$	43,628	$	—		$	114,965
Segment Earnings (Loss)	$	18,638	$	9,258	$	(3,937	)	$	23,959
Three Months Ended March 31, 2015:
Net Sales	$	77,284	$	43,745	$	—		$	121,029
Segment Earnings (Loss)	$	21,766	8,091		(3,647		)	$	26,210

Provided below is a reconciliation of Segment Earnings (Loss) to income before provision for income taxes for the three months ended March 31, 2016 and 2015, respectively.

	Three Months ended March 31,
	2016			2015
Segment Earnings:
Clothing	$	18,638		$	21,766
Roll Covers	9,258			8,091
Corporate	(3,937		)	(3,647		)
Stock-based compensation	(592		)	(822		)
Interest expense, net	(10,341		)	(9,664		)
Depreciation and amortization	(7,994		)	(7,242		)
Restructuring expense	(2,832		)	(2,224		)
Other non-recurring expense	(103		)	—
Plant startup costs	(877		)	(750		)
Income before provision for income taxes	$	1,220		$	5,508

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Stock-Based Compensation and Stockholders' Deficit (Tables)

3 Months Ended

Mar. 31, 2016

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

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense during the three months ended March 31, 2016 and March 31, 2015 as follows:

	Three Months ended March 31,
	2016		2015
RSU, Options and DSU Awards (1)	$	592	$	822

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

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Supplemental Guarantor Financial Information (Tables)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Balance Sheet (Unaudited)

Xerium Technologies, Inc.

Consolidating Balance Sheet—(Unaudited)

At March 31, 2016

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	2,062		$	(2	)	$	13,390		$	—		$	15,450
Accounts receivable, net	575			17,742			53,857			—			72,174
Intercompany receivables	(112,466		)	118,426			(5,960		)	—			—
Inventories, net	—			13,466			58,921			(1,021		)	71,366
Prepaid expenses	1,383			1,160			4,847			—			7,390
Other current assets	—			2,682			13,270			—			15,952
Total current assets	(108,446		)	153,474			138,325			(1,021		)	182,332
Property and equipment, net	9,082			68,922			223,678			—			301,682
Investments	846,166			226,119			—			(1,072,285		)	—
Goodwill	—			17,737			41,565			—			59,302
Intangible assets	—			1,320			135			—			1,455
Non-current deferred tax asset	—			—			9,467			—			9,467
Other assets	—			—			10,358			—			10,358
Total assets	$	746,802		$	467,572		$	423,528		$	(1,073,306	)	$	564,596
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,486		$	10,523		$	26,010		$	—		$	39,019
Accrued expenses	19,416			9,313			35,369			—			64,098
Notes payable	—			—			6,721			—			6,721
Current maturities of long-term debt	2,591			2,300			1,542			—			6,433
Total current liabilities	24,493			22,136			69,642			—			116,271
Long-term debt, net of current maturities	451,948			—			7,488			—			459,436
Liabilities under capital leases	3,208			5,513			9,416			—			18,137
Non-current deferred tax liability	(1,342		)	1,243			9,354			—			9,255
Pension, other post-retirement and post-employment obligations	19,460			2,998			41,264			—			63,722
Other long-term liabilities	—			—			3,898			—			3,898
Intercompany loans	343,403			(404,580		)	61,177			—			—
Total stockholders’ (deficit) equity	(94,368		)	840,262			221,289			(1,073,306		)	(106,123		)
Total liabilities and stockholders’ equity	$	746,802		$	467,572		$	423,528		$	(1,073,306	)	$	564,596

Xerium Technologies, Inc.

Consolidating Balance Sheet

At December 31, 2015

(Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The Company
ASSETS
Current assets:
Cash and cash equivalents	$	3,105		$	(2	)	$	6,736		$	—		$	9,839
Accounts receivable, net	20			18,585			49,957			—			68,562
Intercompany receivables	(110,541		)	113,736			(3,195		)	—			—
Inventories, net	—			14,694			57,929			(925		)	71,698
Prepaid expenses	510			1,330			4,809			—			6,649
Other current assets	—			2,849			14,020			—			16,869
Total current assets	(106,906		)	151,192			130,256			(925		)	173,617
Property and equipment, net	9,518			68,075			219,490			—			297,083
Investments	837,064			207,443			—			(1,044,507		)	—
Goodwill	—			17,737			40,862			—			58,599
Intangible assets	—			1,389			158			—			1,547
Non-current deferred tax asset	—			—			9,325						9,325
Other assets	—			—			10,203			—			10,203
Total assets	$	739,676		$	445,836		$	410,294		$	(1,045,432	)	$	550,374
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	2,642		$	11,100		$	26,954		$	—		$	40,696
Accrued expenses	12,661			9,668			33,747			—			56,076
Notes payable	—			—			6,556			—			6,556
Current maturities of long-term debt	2,663			1,937			810			—			5,410
Total current liabilities	17,966			22,705			68,067			—			108,738
Long-term debt, net of current maturities	451,923			—			10,547			—			462,470
Liabilities under capital leases	3,276			4,425			1,036			—			8,737
Non-current deferred tax liability	(1,515		)	1,243			9,042			—			8,770
Pension, other post-retirement and post-employment obligations	19,950			2,619			41,037			—			63,606
Other long-term liabilities	—			—			11,123			—			11,123
Intercompany loans	341,412			(403,154		)	61,742			—			—
Total stockholders’ (deficit) equity	(93,336		)	817,998			207,700			(1,045,432		)	(113,070		)
Total liabilities and stockholders’ (deficit) equity	$	739,676		$	445,836		$	410,294		$	(1,045,432	)	$	550,374

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

Xerium Technologies, Inc.

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

For the three months ended March 31, 2016

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	40,588		$	81,600		$	(7,223	)	$	114,965
Costs and expenses:
Cost of products sold	—			28,296			50,259			(7,127		)	71,428
Selling	305			5,011			10,405			—			15,721
General and administrative	2,691			923			7,893			—			11,507
Research and development	380			1,091			469			—			1,940
Restructuring	428			1,028			1,376			—			2,832
	3,804			36,349			70,402			(7,127		)	103,428
(Loss) income from operations	(3,804		)	4,239			11,198			(96		)	11,537
Interest (expense) income, net	(9,714		)	517			(1,144		)	—			(10,341		)
Foreign exchange gain (loss)	17			(54		)	61			—			24
Equity in subsidiaries income	9,102			7,804			—			(16,906		)	—
Dividend income	3,145			—			—			(3,145		)	—
(Loss) income before provision for income taxes	(1,254		)	12,506			10,115			(20,147		)	1,220
Provision for income taxes	(191		)	(2		)	(2,472		)	—			(2,665		)
Net (loss) income	$	(1,445	)	$	12,504		$	7,643		$	(20,147	)	$	(1,445	)
Comprehensive (loss) income	$	(606	)	$	12,494		$	15,632		$	(20,147	)	$	7,373

Xerium Technologies, Inc.

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

For the three months ended March 31, 2015

(Dollars in thousands)

	Parent			Total Guarantors			Total  Non Guarantors			Other Eliminations			The Company
Net sales	$	—		$	42,850		$	81,688		$	(3,509	)	$	121,029
Costs and expenses:
Cost of products sold	(348		)	29,378			46,860			(3,414		)	72,476
Selling	268			4,801			11,257			—			16,326
General and administrative	2,828			1,411			9,607			—			13,846
Research and development	232			1,196			534			—			1,962
Restructuring	7,952			175			(5,903		)	—			2,224
	10,932			36,961			62,355			(3,414		)	106,834
(Loss) income from operations	(10,932		)	5,889			19,333			(95		)	14,195
Interest (expense) income, net	(9,399		)	1,160			(1,425		)	—			(9,664		)
Foreign exchange gain (loss)	213			(141		)	905			—			977
Dividend income	700			—			—			(700		)	—
Equity in subsidiaries income	21,669			6,623			—			(28,292		)	—
Income before provision for income taxes	2,251			13,531			18,813			(29,087		)	5,508
Provision for income taxes	(518		)	(29		)	(3,228		)	—			(3,775		)
Net income	$	1,733		$	13,502		$	15,585		$	(29,087	)	$	1,733
Comprehensive income (loss)	$	1,631		$	14,143		$	(16,085	)	$	(29,087	)	$	(29,398	)

Consolidating Statement of Cash Flows (Unaudited)

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows-(Unaudited)

For the three months ended March 31, 2016 (Dollars in thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net (loss) income	$	(1,445	)	$	12,504		$	7,643		$	(20,147	)	$	(1,445	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	603			—			(11		)	—			592
Depreciation	555			2,053			5,292			—			7,900
Amortization of intangibles	—			69			25			—			94
Deferred financing cost amortization	732			—			24			—			756
Foreign exchange gain on revaluation of debt	1,120			—			—			—			1,120
Deferred taxes	173			—			(18		)	—			155
Loss on disposition of property and equipment	—			—			17			—			17
Provision for doubtful accounts	—			—			(72		)	—			(72		)
Undistributed equity in earnings of subsidiaries	(9,102		)	(7,804		)	—			16,906			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(555		)	842			(2,417		)	—			(2,130		)
Inventories	—			1,229			907			96			2,232
Prepaid expenses	(872		)	170			81			—			(621		)
Other current assets	—			167			857			—			1,024
Accounts payable and accrued expenses	5,430			(932		)	(838		)	—			3,660
Deferred and other long-term liabilities	3			379			410			—			792
Intercompany loans	1,925			(4,721		)	2,796			—			—
Net cash (used in) provided by operating activities	(1,433		)	3,956			14,696			(3,145		)	14,074
Investing activities
Capital expenditures	(117		)	(938		)	(2,495		)	—			(3,550		)
Intercompany property and equipment transfers, net	(2		)	2			—			—			—
Proceeds from disposals of property and equipment	—			5			15			—			20
Net cash used in investing activities	(119		)	(931		)	(2,480		)	—			(3,530		)
Financing activities													—
Proceeds from borrowings	10,992			—			2,321			—			13,313
Principal payments on debt	(11,547		)	—			(4,892		)	—			(16,439		)
Dividends paid	—			(3,145		)	—			3,145			—
Payment of obligations under capital leases	(67		)	(517		)	(89		)	—			(673		)
Payment of financing fees	(116		)	—			18			—			(98		)
Intercompany loans	1,247			637			(1,884		)	—			—
Net cash provided by (used in) financing activities	509			(3,025		)	(4,526		)	3,145			(3,897		)
Effect of exchange rate changes on cash flows	—			—			(1,036		)	—			(1,036		)
Net (decrease) increase in cash	(1,043		)	—			6,654			—			5,611
Cash and cash equivalents at beginning of period	3,105			(2		)	6,736			—			9,839
Cash and cash equivalents at end of period	$	2,062		$	(2	)	$	13,390		$	—		$	15,450

Xerium Technologies, Inc.

Consolidating Statement of Cash Flows (Unaudited)

For the three months ended March 31, 2015

(Dollars in Thousands)

	Parent			Total Guarantors			Total Non Guarantors			Other Eliminations			The  Company
Operating activities
Net income (loss)	$	1,733		$	13,502		$	15,585		$	(29,087	)	$	1,733
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock-based compensation	752			—			70			—			822
Depreciation	361			1,719			5,083			—			7,163
Amortization of intangibles	—			69			10			—			79
Deferred financing cost amortization	852			—			23			—			875
Foreign exchange gain on revaluation of debt	(1,973		)	—			—			—			(1,973		)
Deferred taxes	511			—			468			—			979
Loss (gain) on disposition of property and equipment	—			25			(11		)	—			14
Provision for doubtful accounts	—			49			423			—			472
Undistributed equity in earnings of subsidiaries	(21,669		)	(6,623		)	—			28,292			—
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(47		)	231			(776		)	—			(592		)
Inventories	—			1,047			294			95			1,436
Prepaid expenses	(1,328		)	543			810			—			25
Other current assets	—			326			(2,005		)	—			(1,679		)
Accounts payable and accrued expenses	5,618			(947		)	(2,453		)	—			2,218
Deferred and other long-term liabilities	(42		)	347			(3,876		)	—			(3,571		)
Intercompany loans	(4,290		)	(3,343		)	7,633			—			—
Net cash (used in) provided by operating activities	(19,522		)	6,945			21,278			(700		)	8,001
Investing activities
Capital expenditures	(4,697		)	(1,103		)	(6,355		)	—			(12,155		)
Intercompany property and equipment transfers, net	—			191			(191		)	—			—
Proceeds from disposals of property and equipment	—			26			6			—			32
Net cash (used in) provided by investing activities	(4,697		)	(886		)	(6,540		)	—			(12,123		)
Financing activities													—
Net increase in notes payable	—			—			3,526						3,526
Proceeds from borrowings	13,516			—			5,526			—			19,042
Principal payments on debt	(14,059		)	—			(4,272		)	—			(18,331		)
Dividends paid	—			(700		)				700			—
Payments of obligations under capitalized leases	(161		)	(101		)	(3		)	—			(265		)
Payment of deferred financing fees	(34		)	—			9			—			(25		)
Intercompany loans	19,587			(5,258		)	(14,329		)	—			—
Other financing activities	5,500			—			(5,500		)				—
Net cash provided by (used in) financing activities	24,349			(6,059		)	(15,043		)	700			3,947
Effect of exchange rate changes on cash flows	—			—			(516		)	—			(516		)
Net (decrease) increase in cash	130			—			(821		)	—			(691		)
Cash and cash equivalents at beginning of period	605			(14		)	8,926			—			9,517
Cash and cash equivalents at end of period	$	735		$	(14	)	$	8,105		$	—		$	8,826

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Description of Business and Significant Accounting Policies - Components of Inventories (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 12,343	$ 12,389
Work in process	26,695	25,203
Finished goods (includes consigned inventory of $6,496 at March 31, 2016 and $6,513 at December 31, 2015)	38,727	40,058
Inventory allowances	(6,399)	(5,952)
Inventories, net	71,366	71,698
Consigned inventory	$ 6,496	$ 6,513

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Description of Business and Significant Accounting Policies - Changes In Warranty Liability (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Warranties, Increase (Decrease)
Beginning Balance	$ 2,175	$ 2,685
Charged to Cost of Sales	477	336
Effect of Foreign Currency Translation	34	(118)
Deduction from Reserves	(189)	(578)
Ending Balance	$ 2,497	$ 2,325

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Description of Business and Significant Accounting Policies - Net (Loss) Income (Loss) Per Common Share (Detail) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Weighted-average common shares outstanding–basic (in shares)	15,789,991	15,560,995
Dilutive effect of stock-based compensation awards outstanding (in shares)	0	918,373
Weighted-average common shares outstanding–diluted (in shares)	15,789,991	16,479,368
Anti-dilutive securities (in shares)	738,294	21,957

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Description of Business and Significant Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring Expense
Restructuring Cost and Reserve [Line Items]
Asset impairment	$ 0	$ 0

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Derivatives and Hedging - Narrative (Details)	Mar. 31, 2016 derivative_instrument
Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Number of derivative instruments	0

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Derivatives and Hedging - Schedule of Derivative Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Derivative [Line Items]
Change in fair value of derivative included in foreign exchange loss	$ 1,170	$ (2,059)
Not Designated as Hedging Instrument | Foreign Exchange Forward Contracts
Derivative [Line Items]
Fair value of derivative asset (liability)	$ 468		$ (1,188)

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Derivatives and Hedging - Notional Amounts of Foreign Exchange Forward Contracts (Detail) - Not Designated as Hedging Instrument - Foreign Exchange Forward Contracts $ in Thousands	Mar. 31, 2016 USD ($)
Notional Sold
Derivative [Line Items]
Non-designated hedges of foreign exchange risk	$ (3,983)
Notional Purchased
Derivative [Line Items]
Non-designated hedges of foreign exchange risk	$ (49,902)

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Long term Debt - Schedule of Long Term Debt (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	May. 17, 2013
Debt Instrument [Line Items]
Long-term debt	$ 466,000
Notes payable	6,721	$ 6,556
Total debt	479,186	481,729
Less deferred financing costs	(6,596)	(7,293)
Less current maturities of long term debt and notes payable	(13,154)	(11,966)
Total long term debt	459,436	462,470
Other Debt
Debt Instrument [Line Items]
Long-term debt	$ 4,116	$ 6,278
Notes Payable
Debt Instrument [Line Items]
Debt instrument variable interest rate (percent)	2.05%	2.05%
Rollover option period (years)	1 year	1 year
Notes Payable | Working Capital Loan
Debt Instrument [Line Items]
Notes payable	$ 6,721	$ 6,556
Senior Secured Term Loan Facility | Senior Secured Term Loan Facility, Payable Quarterly, US Dollar Denominated, Matures May 2019
Debt Instrument [Line Items]
Long-term debt	$ 223,424	$ 223,937
Debt instrument interest rate (percent)	6.25%	6.25%
Debt discount	$ 600	$ 600	$ 1,000
Senior Secured Term Loan Facility | Senior Secured Term Loan Facility, Payable Quarterly, US Dollar Denominated, Matures May 2019 | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt Instrument, minimum variable rate basis (percent)	1.25%	1.25%
Debt instrument, basis spread on variable rate (percent)	5.00%	5.00%
Senior Notes (Unsecured) | Senior Notes Unsecured, Payable Semi Annually, US Dollar Denominated Interest Rate Fixed at 8.875%, Matures June 2018
Debt Instrument [Line Items]
Long-term debt	$ 236,410	$ 236,410
Debt instrument fixed interest rate (percent)	8.875%	8.875%
Capital Lease Obligations | Fixed Asset Loan Contract
Debt Instrument [Line Items]
Fixed asset loan	$ 8,515	$ 8,548
Debt instrument interest rate (percent)	5.78%	5.78%

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Long term Debt - Additional Information (Detail)				1 Months Ended	3 Months Ended
	Mar. 31, 2016 USD ($)	Jul. 17, 2015 USD ($)	Aug. 18, 2014 USD ($)	Apr. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Nov. 03, 2015 USD ($)	Jul. 17, 2015 CNY (¥)	Mar. 03, 2014 USD ($)	May. 17, 2013 USD ($)
Debt Instrument [Line Items]
Proceeds from borrowings					$ 13,313,000	$ 19,042,000
Carrying value of long-term debt	$ 466,000,000				466,000,000
Fair value of long-term debt	419,200,000				419,200,000
Liabilities under capital leases	18,137,000				18,137,000		$ 8,737,000
Credit Facility and Notes
Debt Instrument [Line Items]
Debt discount	600,000				600,000
Carrying value of long-term debt	459,800,000				459,800,000
Senior Secured Term Loan Facility, Payable Quarterly, US Dollar Denominated, Matures May 2019 | Secured Debt
Debt Instrument [Line Items]
Debt instrument, face amount											$ 200,000,000
Debt discount	$ 600,000				$ 600,000		$ 600,000				1,000,000
Debt instrument interest rate (percent)	6.25%				6.25%		6.25%
Proceeds from borrowings			$ 30,000,000
Carrying value of long-term debt	$ 223,424,000				$ 223,424,000		$ 223,937,000
ABL Secured Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Current borrowing capacity								$ 55,000,000		$ 55,000,000	$ 40,000,000
Debt instrument interest rate (percent)	4.50%				4.50%
Debt instrument, basis spread on variable rate (percent)					0.75%
Debt instrument, covenant compliance, maximum annual capital expenditures (in excess of)					$ 42,000,000
Remaining borrowing capacity	$ 33,900,000				33,900,000
Amount outstanding	36,900,000				36,900,000
ABL Secured Facility | Letter of Credit
Debt Instrument [Line Items]
Amount outstanding	$ 3,000,000				$ 3,000,000
Xerium China Loan Agreement | Secured Debt
Debt Instrument [Line Items]
Debt instrument, face amount		$ 9,400,000							¥ 58,500,000.0
Interest rate adjustment period (months)		12 months
Frequency of principal payment (months)		6 months
Brazil | Foreign Tax Authority | Senior Secured Term Loan Facility, Payable Quarterly, US Dollar Denominated, Matures May 2019 | Secured Debt
Debt Instrument [Line Items]
Proceeds from borrowings			$ 30,000,000
Benchmark Rate | Xerium China Loan Agreement | Secured Debt
Debt Instrument [Line Items]
Interest rate during period (percent)	5.80%
Subsequent Event
Debt Instrument [Line Items]
Proceeds from sale leaseback transactions				$ 6.0

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes [Line Items]
Provision for income taxes	$ 2,665	$ 3,775
Net earnings required to recognize deferred tax asset, minimum	30,000
Net earnings required to recognize deferred tax asset, maximum	120,000
Gross unrecognized tax benefit	7,791
Increase in unrecognized tax benefits	264
Unrecognized tax benefits related to income tax matters and income tax expense	$ 40
Minimum
Income Taxes [Line Items]
Statutory income tax rate in foreign countries (percent)	15.00%
Maximum
Income Taxes [Line Items]
Statutory income tax rate in foreign countries (percent)	35.36%

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Pensions, Other Post-retirement and Post-employment Benefits - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pensions, Other Post-Retirement And Post-Employment Benefits [Abstract]
Service cost	$ 405	$ 842
Interest cost	1,485	1,670
Expected return on plan assets	(1,548)	(1,815)
Amortization of net loss	558	755
Net periodic benefit cost	$ 900	$ 1,452

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Comprehensive Loss and Accumulated Other Comprehensive Loss - Components of Comprehensive Loss, Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Comprehensive Income Loss and Accumulated Other Comprehensive Income (Loss) [Abstract]
Other comprehensive loss, tax (benefit) expense	$ 67	$ 851
Net (loss) income	(1,445)	1,733
Foreign currency translation adjustments	8,460	(32,857)
Pension liability changes under Topic 715	358	1,684
Change in value of derivative instruments	0	42
Comprehensive income (loss)	$ 7,373	$ (29,398)

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Comprehensive Loss and Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss, tax benefit	$ 6,954
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning	(113,070)
Amounts reclassified from other comprehensive loss
Balance at end	(106,123)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning	(85,982)
Other comprehensive loss before reclassifications	8,460
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	0
Net current period other comprehensive (loss) income	8,460
Balance at end	(77,522)
Pension Liability Changes Under Topic 715
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning	(35,759)
Other comprehensive loss before reclassifications	0
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	358
Net current period other comprehensive (loss) income	358
Balance at end	(35,401)
Change in Value of Derivative Instruments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning	49
Other comprehensive loss before reclassifications	0
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	0
Net current period other comprehensive (loss) income	0
Balance at end	49
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning	(121,692)
Other comprehensive loss before reclassifications	8,460
Amounts reclassified from other comprehensive loss
Amortization of actuarial losses	358
Net current period other comprehensive (loss) income	8,818
Balance at end	$ (112,874)

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Restructuring and Impairment Expense - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 2,832	$ 2,224
Headcount Reductions
Restructuring Cost and Reserve [Line Items]
Restructuring	2,100	900
Clothing Facility | Middletown VA Facility | Facility Closing
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 700
Clothing Facility | Brazil Facility | Facility Closing
Restructuring Cost and Reserve [Line Items]
Restructuring		$ 1,300

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Restructuring and Impairment Expense - Restructuring Programs (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring Reserve
Beginning Balance	$ 6,211	$ 5,698
Charges	2,832	2,224
Currency Effects	125	(608)
Cash Payments	(3,675)	(3,082)
Ending Balance	5,493	4,232
Severance and other benefits
Restructuring Reserve
Beginning Balance	5,308	4,880
Charges	1,390	881
Currency Effects	62	(243)
Cash Payments	(1,804)	(1,286)
Ending Balance	4,956	4,232
Facility costs and other
Restructuring Reserve
Beginning Balance	903	818
Charges	1,442	1,343
Currency Effects	63	(365)
Cash Payments	(1,871)	(1,796)
Ending Balance	$ 537	$ 0

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Restructuring and Impairment Expense - Restructuring and Impairment Expense by Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 2,832	$ 2,224
Operating Segments | Clothing
Restructuring Cost and Reserve [Line Items]
Restructuring	1,452	2,092
Operating Segments | Roll Covers
Restructuring Cost and Reserve [Line Items]
Restructuring	891	101
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 489	$ 31

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Business Segment Information - Additional Information (Details)	3 Months Ended
	Mar. 31, 2016 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Business Segment Information - Summarized Financial Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Net Sales	$ 114,965	$ 121,029
Segment Earnings (Loss)	23,959	26,210
Operating Segments | Clothing
Segment Reporting Information [Line Items]
Net Sales	71,337	77,284
Segment Earnings (Loss)	18,638	21,766
Operating Segments | Roll Covers
Segment Reporting Information [Line Items]
Net Sales	43,628	43,745
Segment Earnings (Loss)	9,258	8,091
Corporate
Segment Reporting Information [Line Items]
Net Sales	0	0
Segment Earnings (Loss)	$ (3,937)	$ (3,647)

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Business Segment Information - Reconciliation of Segment Earnings (Loss) To Income Before Provision For Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Earnings (Loss):
Segment Earnings (Loss)	$ 23,959	$ 26,210
Stock-based compensation	(592)	(822)
Interest expense, net	(10,341)	(9,664)
Depreciation and amortization	(7,994)	(7,242)
Restructuring expense	(2,832)	(2,224)
Other non-recurring expense	(103)	0
Plant startup costs	(877)	(750)
Income before provision for income taxes	1,220	5,508
Operating Segments | Clothing
Segment Earnings (Loss):
Segment Earnings (Loss)	18,638	21,766
Restructuring expense	(1,452)	(2,092)
Operating Segments | Roll Covers
Segment Earnings (Loss):
Segment Earnings (Loss)	9,258	8,091
Restructuring expense	(891)	(101)
Corporate
Segment Earnings (Loss):
Segment Earnings (Loss)	(3,937)	(3,647)
Restructuring expense	$ (489)	$ (31)

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Stock-Based Compensation and Stockholders' Deficit - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock compensation expense		$ 592	$ 822
RSU, Options and DSU Awards
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock compensation expense	[1]	$ 592	$ 822

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

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Stock-Based Compensation and Stockholders' Deficit - Additional Information (Detail) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended
	Mar. 31, 2016	Mar. 15, 2016	Mar. 31, 2016	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense				$ 592	$ 822
2015 - 2014 LTIP | Market-Based Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award payout	0.00%
Stock compensation expense	$ (200)
2011 DSU Plan | Deferred Stock Unit (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual retainer per director				$ 132
Shares issued				21,938,000
Common Stock | 2013 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion of stock, shares converted		207,385
Common Stock | 2011 DSU Plan | Deferred Stock Unit (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued				18,524,000
Director [Member] | Common Stock | Deferred Stock Unit (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued			22,234

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Supplemental Guarantor Financial Information - Consolidating Balance Sheet (Unaudited) (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 15,450	$ 9,839	$ 8,826	$ 9,517
Accounts receivable, net	72,174	68,562
Intercompany receivables	0	0
Inventories, net	71,366	71,698
Prepaid expenses	7,390	6,649
Other current assets	15,952	16,869
Total current assets	182,332	173,617
Property and equipment, net	301,682	297,083
Investments	0	0
Goodwill	59,302	58,599
Intangible assets	1,455	1,547
Non-current deferred tax asset	9,467	9,325
Other assets	10,358	10,203
Total assets	564,596	550,374
Current liabilities:
Accounts payable	39,019	40,696
Accrued expenses	64,098	56,076
Notes payable	6,721	6,556
Current maturities of long-term debt	6,433	5,410
Total current liabilities	116,271	108,738
Long-term debt, net of current maturities	459,436	462,470
Liabilities under capital leases	18,137	8,737
Non-current deferred tax liability	9,255	8,770
Pension, other post-retirement and post-employment obligations	63,722	63,606
Other long-term liabilities	3,898	11,123
Intercompany loans	0	0
Total stockholders’ (deficit) equity	(106,123)	(113,070)
Total liabilities and stockholders’ deficit	564,596	550,374
Parent
Current assets:
Cash and cash equivalents	2,062	3,105	735	605
Accounts receivable, net	575	20
Intercompany receivables	(112,466)	(110,541)
Inventories, net	0	0
Prepaid expenses	1,383	510
Other current assets	0	0
Total current assets	(108,446)	(106,906)
Property and equipment, net	9,082	9,518
Investments	846,166	837,064
Goodwill	0	0
Intangible assets	0	0
Non-current deferred tax asset	0	0
Other assets	0	0
Total assets	746,802	739,676
Current liabilities:
Accounts payable	2,486	2,642
Accrued expenses	19,416	12,661
Notes payable	0	0
Current maturities of long-term debt	2,591	2,663
Total current liabilities	24,493	17,966
Long-term debt, net of current maturities	451,948	451,923
Liabilities under capital leases	3,208	3,276
Non-current deferred tax liability	(1,342)	(1,515)
Pension, other post-retirement and post-employment obligations	19,460	19,950
Other long-term liabilities	0	0
Intercompany loans	343,403	341,412
Total stockholders’ (deficit) equity	(94,368)	(93,336)
Total liabilities and stockholders’ deficit	746,802	739,676
Total Guarantors
Current assets:
Cash and cash equivalents	(2)	(2)	(14)	(14)
Accounts receivable, net	17,742	18,585
Intercompany receivables	118,426	113,736
Inventories, net	13,466	14,694
Prepaid expenses	1,160	1,330
Other current assets	2,682	2,849
Total current assets	153,474	151,192
Property and equipment, net	68,922	68,075
Investments	226,119	207,443
Goodwill	17,737	17,737
Intangible assets	1,320	1,389
Non-current deferred tax asset	0	0
Other assets	0	0
Total assets	467,572	445,836
Current liabilities:
Accounts payable	10,523	11,100
Accrued expenses	9,313	9,668
Notes payable	0	0
Current maturities of long-term debt	2,300	1,937
Total current liabilities	22,136	22,705
Long-term debt, net of current maturities	0	0
Liabilities under capital leases	5,513	4,425
Non-current deferred tax liability	1,243	1,243
Pension, other post-retirement and post-employment obligations	2,998	2,619
Other long-term liabilities	0	0
Intercompany loans	(404,580)	(403,154)
Total stockholders’ (deficit) equity	840,262	817,998
Total liabilities and stockholders’ deficit	467,572	445,836
Total Non Guarantors
Current assets:
Cash and cash equivalents	13,390	6,736	8,105	8,926
Accounts receivable, net	53,857	49,957
Intercompany receivables	(5,960)	(3,195)
Inventories, net	58,921	57,929
Prepaid expenses	4,847	4,809
Other current assets	13,270	14,020
Total current assets	138,325	130,256
Property and equipment, net	223,678	219,490
Investments	0	0
Goodwill	41,565	40,862
Intangible assets	135	158
Non-current deferred tax asset	9,467	9,325
Other assets	10,358	10,203
Total assets	423,528	410,294
Current liabilities:
Accounts payable	26,010	26,954
Accrued expenses	35,369	33,747
Notes payable	6,721	6,556
Current maturities of long-term debt	1,542	810
Total current liabilities	69,642	68,067
Long-term debt, net of current maturities	7,488	10,547
Liabilities under capital leases	9,416	1,036
Non-current deferred tax liability	9,354	9,042
Pension, other post-retirement and post-employment obligations	41,264	41,037
Other long-term liabilities	3,898	11,123
Intercompany loans	61,177	61,742
Total stockholders’ (deficit) equity	221,289	207,700
Total liabilities and stockholders’ deficit	423,528	410,294
Other Eliminations
Current assets:
Cash and cash equivalents	0	0	$ 0	$ 0
Accounts receivable, net	0	0
Intercompany receivables	0	0
Inventories, net	(1,021)	(925)
Prepaid expenses	0	0
Other current assets	0	0
Total current assets	(1,021)	(925)
Property and equipment, net	0	0
Investments	(1,072,285)	(1,044,507)
Goodwill	0	0
Intangible assets	0	0
Non-current deferred tax asset	0
Other assets	0	0
Total assets	(1,073,306)	(1,045,432)
Current liabilities:
Accounts payable	0	0
Accrued expenses	0	0
Notes payable	0	0
Current maturities of long-term debt	0	0
Total current liabilities	0	0
Long-term debt, net of current maturities	0	0
Liabilities under capital leases	0	0
Non-current deferred tax liability	0	0
Pension, other post-retirement and post-employment obligations	0	0
Other long-term liabilities	0	0
Intercompany loans	0	0
Total stockholders’ (deficit) equity	(1,073,306)	(1,045,432)
Total liabilities and stockholders’ deficit	$ (1,073,306)	$ (1,045,432)

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Supplemental Guarantor Financial Information - Consolidating Statement of Operations and Comprehensive (Loss) Income (Unaudited) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Condensed Income Statements, Captions [Line Items]
Net Sales	$ 114,965	$ 121,029
Costs and expenses:
Cost of products sold	71,428	72,476
Selling	15,721	16,326
General and administrative	11,507	13,846
Research and development	1,940	1,962
Restructuring	2,832	2,224
Costs and expenses	103,428	106,834
Income from operations	11,537	14,195
Interest (expense) income, net	(10,341)	(9,664)
Foreign exchange gain	24	977
Equity in subsidiaries income	0	0
Dividend income	0	0
Income before provision for income taxes	1,220	5,508
Provision for income taxes	(2,665)	(3,775)
Net (loss) income	(1,445)	1,733
Comprehensive income (loss)	7,373	(29,398)
Parent
Condensed Income Statements, Captions [Line Items]
Net Sales	0	0
Costs and expenses:
Cost of products sold	0	(348)
Selling	305	268
General and administrative	2,691	2,828
Research and development	380	232
Restructuring	428	7,952
Costs and expenses	3,804	10,932
Income from operations	(3,804)	(10,932)
Interest (expense) income, net	(9,714)	(9,399)
Foreign exchange gain	17	213
Equity in subsidiaries income	9,102	21,669
Dividend income	3,145	700
Income before provision for income taxes	(1,254)	2,251
Provision for income taxes	(191)	(518)
Net (loss) income	(1,445)	1,733
Comprehensive income (loss)	(606)	1,631
Total Guarantors
Condensed Income Statements, Captions [Line Items]
Net Sales	40,588	42,850
Costs and expenses:
Cost of products sold	28,296	29,378
Selling	5,011	4,801
General and administrative	923	1,411
Research and development	1,091	1,196
Restructuring	1,028	175
Costs and expenses	36,349	36,961
Income from operations	4,239	5,889
Interest (expense) income, net	517	1,160
Foreign exchange gain	(54)	(141)
Equity in subsidiaries income	7,804	6,623
Dividend income	0	0
Income before provision for income taxes	12,506	13,531
Provision for income taxes	(2)	(29)
Net (loss) income	12,504	13,502
Comprehensive income (loss)	12,494	14,143
Total Non Guarantors
Condensed Income Statements, Captions [Line Items]
Net Sales	81,600	81,688
Costs and expenses:
Cost of products sold	50,259	46,860
Selling	10,405	11,257
General and administrative	7,893	9,607
Research and development	469	534
Restructuring	1,376	(5,903)
Costs and expenses	70,402	62,355
Income from operations	11,198	19,333
Interest (expense) income, net	(1,144)	(1,425)
Foreign exchange gain	61	905
Equity in subsidiaries income	0	0
Dividend income	0	0
Income before provision for income taxes	10,115	18,813
Provision for income taxes	(2,472)	(3,228)
Net (loss) income	7,643	15,585
Comprehensive income (loss)	15,632	(16,085)
Other Eliminations
Condensed Income Statements, Captions [Line Items]
Net Sales	(7,223)	(3,509)
Costs and expenses:
Cost of products sold	(7,127)	(3,414)
Selling	0	0
General and administrative	0	0
Research and development	0	0
Restructuring	0	0
Costs and expenses	(7,127)	(3,414)
Income from operations	(96)	(95)
Interest (expense) income, net	0	0
Foreign exchange gain	0	0
Equity in subsidiaries income	(16,906)	(28,292)
Dividend income	(3,145)	(700)
Income before provision for income taxes	(20,147)	(29,087)
Provision for income taxes	0	0
Net (loss) income	(20,147)	(29,087)
Comprehensive income (loss)	$ (20,147)	$ (29,087)

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Supplemental Guarantor Financial Information - Consolidating Statement of Cash Flows (Unaudited) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net (loss) income	$ (1,445)	$ 1,733
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	592	822
Depreciation	7,900	7,163
Amortization of intangibles	94	79
Deferred financing cost amortization	756	875
Foreign exchange gain on revaluation of debt	1,120	(1,973)
Deferred taxes	155	979
Loss on disposition of property and equipment	17	14
Provision for doubtful accounts	(72)	472
Undistributed equity in earnings of subsidiaries	0	0
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(2,130)	(592)
Inventories	2,232	1,436
Prepaid expenses	(621)	25
Other current assets	1,024	(1,679)
Accounts payable and accrued expenses	3,660	2,218
Deferred and other long-term liabilities	792	(3,571)
Intercompany loans	0	0
Net cash provided by operating activities	14,074	8,001
Investing activities
Capital expenditures	(3,550)	(12,155)
Intercompany property and equipment transfers, net	0	0
Proceeds from disposals of property and equipment	20	32
Net cash used in investing activities	(3,530)	(12,123)
Financing activities
Net increase in notes payable		3,526
Proceeds from borrowings	13,313	19,042
Principal payments on debt	(16,439)	(18,331)
Dividends paid	0	0
Payment of obligations under capital leases	(673)	(265)
Payment of financing fees	(98)	(25)
Intercompany loans	0	0
Other financing activities		0
Net cash (used in) provided by financing activities	(3,897)	3,947
Effect of exchange rate changes on cash flows	(1,036)	(516)
Net increase (decrease) in cash	5,611	(691)
Cash and cash equivalents at beginning of period	9,839	9,517
Cash and cash equivalents at end of period	15,450	8,826
Parent
Operating activities
Net (loss) income	(1,445)	1,733
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	603	752
Depreciation	555	361
Amortization of intangibles	0	0
Deferred financing cost amortization	732	852
Foreign exchange gain on revaluation of debt	1,120	(1,973)
Deferred taxes	173	511
Loss on disposition of property and equipment	0	0
Provision for doubtful accounts	0	0
Undistributed equity in earnings of subsidiaries	(9,102)	(21,669)
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(555)	(47)
Inventories	0	0
Prepaid expenses	(872)	(1,328)
Other current assets	0	0
Accounts payable and accrued expenses	5,430	5,618
Deferred and other long-term liabilities	3	(42)
Intercompany loans	1,925	(4,290)
Net cash provided by operating activities	(1,433)	(19,522)
Investing activities
Capital expenditures	(117)	(4,697)
Intercompany property and equipment transfers, net	(2)	0
Proceeds from disposals of property and equipment	0	0
Net cash used in investing activities	(119)	(4,697)
Financing activities
Net increase in notes payable		0
Proceeds from borrowings	10,992	13,516
Principal payments on debt	(11,547)	(14,059)
Dividends paid	0	0
Payment of obligations under capital leases	(67)	(161)
Payment of financing fees	(116)	(34)
Intercompany loans	1,247	19,587
Other financing activities		5,500
Net cash (used in) provided by financing activities	509	24,349
Effect of exchange rate changes on cash flows	0	0
Net increase (decrease) in cash	(1,043)	130
Cash and cash equivalents at beginning of period	3,105	605
Cash and cash equivalents at end of period	2,062	735
Total Guarantors
Operating activities
Net (loss) income	12,504	13,502
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	0	0
Depreciation	2,053	1,719
Amortization of intangibles	69	69
Deferred financing cost amortization	0	0
Foreign exchange gain on revaluation of debt	0	0
Deferred taxes	0	0
Loss on disposition of property and equipment	0	25
Provision for doubtful accounts	0	49
Undistributed equity in earnings of subsidiaries	(7,804)	(6,623)
Change in assets and liabilities which provided (used) cash:
Accounts receivable	842	231
Inventories	1,229	1,047
Prepaid expenses	170	543
Other current assets	167	326
Accounts payable and accrued expenses	(932)	(947)
Deferred and other long-term liabilities	379	347
Intercompany loans	(4,721)	(3,343)
Net cash provided by operating activities	3,956	6,945
Investing activities
Capital expenditures	(938)	(1,103)
Intercompany property and equipment transfers, net	2	191
Proceeds from disposals of property and equipment	5	26
Net cash used in investing activities	(931)	(886)
Financing activities
Net increase in notes payable		0
Proceeds from borrowings	0	0
Principal payments on debt	0	0
Dividends paid	(3,145)	(700)
Payment of obligations under capital leases	(517)	(101)
Payment of financing fees	0	0
Intercompany loans	637	(5,258)
Other financing activities		0
Net cash (used in) provided by financing activities	(3,025)	(6,059)
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	(2)	(14)
Cash and cash equivalents at end of period	(2)	(14)
Total Non Guarantors
Operating activities
Net (loss) income	7,643	15,585
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	(11)	70
Depreciation	5,292	5,083
Amortization of intangibles	25	10
Deferred financing cost amortization	24	23
Foreign exchange gain on revaluation of debt	0	0
Deferred taxes	(18)	468
Loss on disposition of property and equipment	17	(11)
Provision for doubtful accounts	(72)	423
Undistributed equity in earnings of subsidiaries	0	0
Change in assets and liabilities which provided (used) cash:
Accounts receivable	(2,417)	(776)
Inventories	907	294
Prepaid expenses	81	810
Other current assets	857	(2,005)
Accounts payable and accrued expenses	(838)	(2,453)
Deferred and other long-term liabilities	410	(3,876)
Intercompany loans	2,796	7,633
Net cash provided by operating activities	14,696	21,278
Investing activities
Capital expenditures	(2,495)	(6,355)
Intercompany property and equipment transfers, net	0	(191)
Proceeds from disposals of property and equipment	15	6
Net cash used in investing activities	(2,480)	(6,540)
Financing activities
Net increase in notes payable		3,526
Proceeds from borrowings	2,321	5,526
Principal payments on debt	(4,892)	(4,272)
Dividends paid	0
Payment of obligations under capital leases	(89)	(3)
Payment of financing fees	18	9
Intercompany loans	(1,884)	(14,329)
Other financing activities		(5,500)
Net cash (used in) provided by financing activities	(4,526)	(15,043)
Effect of exchange rate changes on cash flows	(1,036)	(516)
Net increase (decrease) in cash	6,654	(821)
Cash and cash equivalents at beginning of period	6,736	8,926
Cash and cash equivalents at end of period	13,390	8,105
Other Eliminations
Operating activities
Net (loss) income	(20,147)	(29,087)
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock-based compensation	0	0
Depreciation	0	0
Amortization of intangibles	0	0
Deferred financing cost amortization	0	0
Foreign exchange gain on revaluation of debt	0	0
Deferred taxes	0	0
Loss on disposition of property and equipment	0	0
Provision for doubtful accounts	0	0
Undistributed equity in earnings of subsidiaries	16,906	28,292
Change in assets and liabilities which provided (used) cash:
Accounts receivable	0	0
Inventories	96	95
Prepaid expenses	0	0
Other current assets	0	0
Accounts payable and accrued expenses	0	0
Deferred and other long-term liabilities	0	0
Intercompany loans	0	0
Net cash provided by operating activities	(3,145)	(700)
Investing activities
Capital expenditures	0	0
Intercompany property and equipment transfers, net	0	0
Proceeds from disposals of property and equipment	0	0
Net cash used in investing activities	0	0
Financing activities
Proceeds from borrowings	0	0
Principal payments on debt	0	0
Dividends paid	3,145	700
Payment of obligations under capital leases	0	0
Payment of financing fees	0	0
Intercompany loans	0	0
Net cash (used in) provided by financing activities	3,145	700
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

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Subsequent Events (Details) - J.J. Plank Corporation - Subsequent Event $ in Millions	May. 03, 2016 USD ($)
Subsequent Event [Line Items]
Purchase price	$ 18.0
Amount payable at closing	$ 16.0