Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): March 3, 2015




XERIUM TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)



Delaware	001-32498	42-1558674
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)


14101 Capital Boulevard, Youngsville, NC 27596
(Address of Principal Executive Offices)(Zip Code)

Registrant's telephone number, including area code: (919) 526-1400

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02	Results of Operations and Financial Condition

The information contained in this report, together with the exhibits attached hereto, under item 2.02 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

On March 3, 2015, Xerium Technologies, Inc. issued a press release reporting financial results for the quarter and year ended December 31, 2014 and announced that Xerium Technologies, Inc. would conduct a conference call at 10:00 a.m. on March 4, 2015 to discuss its financial results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K. The Company intends to discuss the presentation furnished as Exhibit 99.2 to this Form 8-K on the conference call. Additionally, reconciliations of non-GAAP financial measures that appear in the presentation are furnished as Exhibit 99.3 to this Form 8-K.



Item 9.01	Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished herewith.



Exhibit No.		Description
99.1		Press release dated March 3, 2015 reporting 2014 results
99.2		Earnings call slide presentation
99.3		Non-GAAP reconciliations

SIGNATURE

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 hereunto duly authorized.



		XERIUM TECHNOLOGIES, INC.

Date:	March 3, 2015	By:	/s/ Clifford E. Pietrafitta
		Name:	Clifford E. Pietrafitta
		Title:	Executive Vice President and CFO

INDEX TO EXHIBITS



Exhibit No.		Description
99.1		Press release dated March 3, 2015 reporting 2014 results
99.2		Earnings call slide presentation
99.3		Non-GAAP reconciliations

Xerium Reports 4Q 2014 Adjusted EBITDA of $29.4 Million, +21%

Full Year Results Come in on Track, Improved by 6% over 2013

YOUNGSVILLE, N.C., Mar 3, 2015 (BUSINESSWIRE) -- Xerium Technologies, Inc. (NYSE:XRM), a leading global provider of industrial consumable products and services announced its Q4 2014 and full year 2014 results.

Q4 2014 Adjusted EBITDA increased 21% compared to Q4 2013 on steady sales and continued cost reduction


•	Adjusted EBITDA for Q4 2014 was $29.4 million, or 22.4% of net sales, on a constant currency basis. This was an increase of 21% compared to Q4 2013, primarily due to constant currency sales improvements and continued cost reduction initiatives implemented by the Company. See "Segment Information" and "Non-GAAP Financial Measures" below.


•	Net sales for Q4 2014 were $131.0 million, an increase of $3.1 million, or 2.3% compared to Q4 2013 on a constant currency basis. Rolls sales improved 3.9% primarily due to volume increases in North America and Asia while machine clothing sales increased 1.4% resulting from higher South America, Asia and Europe volumes.


•	Q4 orders were strong for both machine clothing and rolls. On a constant currency basis, total orders are up 1% over Q4 of 2013. On a constant currency basis, sequential orders are up 11% over Q3 2014. These orders provide a strong backlog for the Company heading into 2015.


•	Q4 2014 basic earnings per share was $0.72 per share versus Q4 2013 basic earnings per share of $0.22 per share. The increase of $0.50 per share was primarily driven by higher sales volumes, continued cost reductions, and lower restructuring costs.


•	Excluding non-recurring items such as restructuring costs, deferred tax valuation allowance reversals, basic adjusted earnings per share was $0.43 in Q4 2014, compared to $0.16 in Q4 2013, an increase of 169%. See "Basic Adjusted Earnings Per Share" below.

•

Q4 2014 gross profit was $52.8 million, or 40.3% of net sales, compared to $49.1 million, or 36.7% of net sales in Q4 2013. Machine clothing gross margin improved to 42.3% in Q4 2014 from 38.5% in Q4 2013, and roll covers gross margin improved to 36.8% in Q4 2014, from a gross margin of 33.6% in Q4 2013. These improvements are a direct result of continued cost reductions and operational excellence programs, lower 2014 quality costs and improved product mix.


•	Selling, general and administrative and research and development (SG&A) expenses were $32.8 million, or 25.1% of net sales, in Q4 2014, down from Q4 2013 SG&A expenses of $35.0 million, or 26.2% of net sales.

Full year 2014 Adjusted EBITDA grew 6% compared to full year 2013 Adjusted EBITDA on steady sales and continued cost reduction


•	Adjusted EBITDA for full year 2014 was $116.0 million, or 21.4% of net sales. This was an increase of 6% compared to 2013, on a constant currency basis, primarily due to continued cost reduction initiatives implemented by the Company.


•	Full year 2014 sales were $542.9 million, an increase of $1.7 million, or 0.3%, compared to the full year 2013, on a constant currency basis. Rolls sales improved 1.7% primarily due to mechanical services and roll cover increases in North America, which were partially offset by machine clothing decreases of (0.4%).


•	Full year 2014 basic loss per share was $(0.48) per share versus full year 2013 basic earnings per share of $0.27 per share. The decrease of $(0.75) per share was primarily driven by the Company's Q3 2014 Brazil tax settlement of $(1.49) per share.


•	Excluding non-recurring items such as restructuring costs, deferred tax valuation allowance reversals, the Brazil tax settlement charge and plant start up costs, basic adjusted earnings per share was $1.58 for full year 2014, compared to $1.23 for full year 2013, an increase of 28.5%.

•

Full year 2014 gross profit was $215.8 million, or 39.7% of net sales, compared to $209.6 million, or 38.3% of net sales for the full year of 2013. Machine clothing gross margin improved to 41.6% for the full year of 2014 from 39.2% for the full year of 2013, which was a direct result of continued cost reductions and operational excellence programs. Roll covers gross margin came in at 36.5% for the full year of 2014, down slightly from gross margin of 36.8% for the full year of 2013, due to unfavorable product mix in Europe partially offset by savings related to the Heidenheim, Germany plant closure in 2014.


•	Selling, general and administrative and research and development (SG&A) expenses were $137.4 million, or 25.3% of net sales for full year 2014, down from full year 2013 SG&A expenses of $141.4 million, or 25.9% of net sales.

CEO Comments

"Xerium performed exceptionally well this quarter, with improved sales volume, significant margin expansion and a substantial improvement in Adjusted EBITDA over Q4 2013," said Harold Bevis, President and CEO of Xerium Technologies, Inc. "The global pulp, paper board and tissue market is growing and transforming. Graphical grades and mature markets are declining, while GDP grades and emerging markets are growing. Xerium is pursuing these growth opportunities by re-aligning our global operational footprint and product lineup. We are increasing our industry-leading innovation program, with machine automation solutions and approximately 100 new patents in process. We are underway with the investment program to grow sales in the future, with both the new machine clothing plant in Ba Cheng and the new roll covering and service plant in Corlu, Turkey. The construction of both plants is well underway and we expect to begin production in both plants in Q3 of 2015. In addition, we announced the

expansion of two roll and service plants in Griffin, Georgia and Neenah, Wisconsin to broaden both our mechanical service offerings and product offerings."

Significant investment and repositioning sales growth programs are underway

Xerium is repositioning its sales growth profile. Specific measurable programs are aimed at growth markets, mechanical services and machine automation, and will enable higher growth and profit rates in the future. Some programs require capital investment and some do not.

Cost reduction programs remain on track

Xerium is repositioning its cost profile towards low-cost countries and low-cost operations. We have 16 primary cost programs underway, including plant closures and operational excellence programs directed at waste, quality, productivity, procurement initiatives and a lean SG&A program. As a result of these efforts, total cost savings for Q4 2014 were $7.6 million. Cost savings for the full year of 2014 were approximately $25 million, which represents a total of approximately $48 million in cost reduction savings in 2013 and 2014. In January of 2015, we announced two plant expansion projects in our roll cover and mechanical services business. 2015 cost reduction programs are expected to approximate $20 million.

Market Outlook

Global demand for pulp and paperboard is expected to grow at a rate between 0% and 1% in 2015. There is, however, expected to be a shift in global markets with expected declines in North America and increases in Asia, Europe and South America. Both fiber cement and nonwoven markets are global and growing, with 75%-80% of these markets existing outside of the United States. Xerium is positioning itself in developing markets with the new machine clothing plant in Ba Cheng, China and the new roll and service plant in Corlu, Turkey.

2015 Outlook

Xerium will continue to focus on cost reduction and operational leadership programs, and our longer term plan includes several sales growth initiatives, including adding new capacity at machine clothing and rolls plants, investing in emerging markets and coming to market with a host of new products. This balance between base market maintenance, focused sales growth, and continuous cost reduction is expected to add additional Adjusted EBITDA and free cash flow in the upcoming years which we expect will allow us to pay down over half of our debt by the end of 2020.

2014 was a very successful year for Xerium. Our 6% increase in Adjusted EBITDA was attributable to maintaining our market share and realizing cost savings related to cost-out actions. The Company spent approximately $65 million on capital expenditures and restructuring activities during 2014. We expect to spend $59 million on these activities in 2015. Free Cash Flow is expected to be positive by $5-10 million and net debt will be relatively unchanged due to the addition of capital leases, primarily related to the

China facility. Our Turkey rolls plant is expected to begin production in April, 2015 and we expect to begin production in our new China machine clothing plant in Q3 2015. While we expect to continue to take out costs in 2015 and expect to add approximately 1% of ex-currency top line growth, inflation is expected to limit Adjusted EBITDA growth to $4 million in 2015.

CFO Comments

EVP and Chief Financial Officer, Cliff Pietrafitta said: "Q4 2014 constant currency net sales were 2.3% above Q4 2013. Constant currency rolls net sales increased by 3.9% from Q4 2013, primarily driven by an increase of 6.1% in North America, an increase of 12.2% in Asia and an increase of 23.8% in South America. These increases were partially offset by a decline of (3.6)% in Europe. Constant currency machine clothing sales increased by 1.4% from Q4 2013, primarily driven by an increase of 4.3% in Europe, an increase of 12.8% in South America and an increase of 4.1% in Asia. These increases were partially offset by a decrease of (7.5)% in North America."

Income from operations in Q4 2014 increased by $9.8 million, to $17.5 million from $7.7 million, due to increased gross margins, reductions in SG&A and reduced restructuring expenses. Improved gross margins and reductions in SG&A were driven primarily by our restructuring initiatives and operational excellence programs. Adjusted EBITDA in Q4 2014 was $29.4 million, or 22.4% of net sales.

During the fourth quarter we continued to take costs out of the business with quarterly savings of $7.6 million and full year savings of approximately $25 million. The Company spent approximately $17 million of cash on capital expenditures and restructuring costs in Q4 2014. For the full year, we spent approximately $65 million in both of these areas.

As of December 31, 2014, we had an aggregate of $40.3 million available for additional borrowings under our Credit Facility and smaller lines of credit and our cash balances totaled $9.5 million. YTD 2014 free cash flow (defined as cash-flow from operations less capital expenditures) decreased $(30.3) million to $(38.3) million from $(8.0) million in 2013, primarily as a result of the $25 million Brazilian tax payment made in Q3 of 2014, 2014 restructuring activities, working capital increases and increased capital expenditures.

Net debt (which is defined as total debt less cash) increased to $459.9 million in Q4 2014 from $455.5 million in Q3 2014. However, our net debt leverage ratio was 4.0x in Q4 2014 compared to 4.1x in Q3 2014 as a result of Adjusted EBITDA improvements in 2014.

Trade working capital decreased $9.7 million to $131.6 million at December 31, 2014 from $141.3 million at December 31, 2013. Excluding favorable currency impacts of $16.8 million, trade working capital increased by $7.1 million due largely to inventory builds to support higher sales levels as well as bridge inventory due to a plant closure in South America. See "Trade Working Capital Information" and "Non-GAAP Financial Measures" below.

Our effective income tax rate for Q4 2014 was (43.1%) compared to (375.7%) in Q4 2013. Excluding the effects of restructuring, the Brazil Amnesty program, and the release of the valuation allowance against UK deferred tax assets, our effective tax rate was 40.0%. See "Effective Tax Rate reconciliation" below.

SEGMENT INFORMATION

The following table presents net sales for Q4 2014 and Q4 2013 by segment and the effect of currency on Q4 2014 net sales (dollars in thousands):




	Net Sales For The Quarter Ended
	12/31/2014		12/31/2013		$ Change			Currency Effect of $ Change			% Change	% Change Excluding Currency
Machine Clothing	$	82,442	$	85,005	$	(2,563	)	$	(3,719	)	(3.0)%	1.4%
Roll Covers	$	48,525	$	48,716	$	(191	)	$	(2,085	)	(0.4)%	3.9%
Total	$	130,967	$	133,721	$	(2,754	)	$	(5,804	)	(2.1)%	2.3%

The following table presents net sales for the year ended December 31, 2014 and 2013 by segment and the effect of currency on the year ended December 31, 2014 net sales (dollars in thousands):




	Net Sales For The Year Ended
	12/31/2014		12/31/2013		$ Change			Currency Effect of $ Change			% Change	% Change Excluding Currency
Machine Clothing	$	347,003	$	352,336	$	(5,333	)	$	(3,860	)	(1.5)%	(0.4)%
Roll Covers	$	195,929	$	194,556	$	1,373		$	(1,839	)	0.7%	1.7%
Total	$	542,932	$	546,892	$	(3,960	)	$	(5,699	)	(0.7)%	0.3%

TRADE WORKING CAPITAL

The following table presents trade working capital as of December 31, 2014 and December 31, 2014 (in thousands):




	12/31/2014			12/31/2013			Fav/(Unfav) Change
Trade receivables, net (1)	$	81,998		$	86,584		$	4,586
Inventories, net	83,550			83,930			380
Trade accounts payable (2)	(33,962		)	(29,254		)	4,708
Total	$	131,586		$	141,260		$	9,674

(1) Trade Receivables, Net equals Accounts Receivable less Other Receivables of $1.0 million and $1.4 million at December 31, 2014 and December 31, 2013, respectively.

(2) Trade Accounts Payables equals Accounts Payable less Deposits Received and Other Payables of $7.7 million and $13.0 at December 31, 2014 and December 31, 2013, respectively.

EFFECTIVE TAX RATE

The following table presents a reconciliation of effective tax rate excluding restructuring expenses to our effective tax rate for the three months ended December 31, 2014 (in thousands):




	For the three months ended December 31, 2014
	Pre-tax Amounts		Tax Amounts		After-tax Amounts	Effective Tax Rate
Income (loss) before provision for income taxes	7,801		3,360		11,161	(43.1	)%
Restructuring, Brazil Amnesty program and the release of valuation allowance against UK deferred tax assets	(2,430	)	7,457		5,027	306.8	%
Income (loss) before provision for income taxes excluding restructuring and Brazil tax settlement	10,231		(4,097	)	6,134	40.0	%

BASIC ADJUSTED EARNINGS PER SHARE (net of taxes)




	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2014			2013			2014			2013
Net income (loss) per share	$	0.72		$	0.22		$	(0.48	)	$	0.27
Adjustments:
Restructuring	0.10			0.34			0.87			0.88
Loss on debt extinguishment	—			—			—			0.44
Inventory write-off related to a closed plant	—			0.02			—			0.06
Brazil Tax Charge	—			—			1.49			—
Goodwill Amortization	—			(0.03		)	—			(0.13		)
Deferred Tax Valuation Allowance Reversal	(0.43		)	(0.40		)	(0.43		)	(0.40		)
Plant start-up costs	0.04			0.01			0.10			0.03
Non-restructuring Impairment	—			—			—			0.04
FX (gain) loss	—			—			0.03			0.04
Basic adjusted earnings per share	$	0.43		$	0.16		$	1.58		$	1.23

(1) In 2014, the valuation allowance reversal has been included above as an add-back, given the unusual and infrequent nature of this item. In addition, the comparable amount for 2013 has also been included in the reconciliation above as an add-back.

CONFERENCE CALL

The Company plans to hold a conference call on the following morning:

Date: March 4, 2015

Start Time: 10:00 a.m. Eastern Time

Domestic Dial-In: +1-877-415-3179

International Dial-In: +1-857-244-7322

Passcode: 28273424

Webcast: www.xerium.com/investorrelations

To participate on the call, please dial in at least 10 minutes prior to the scheduled start. A live audio webcast and replay of the call may be found in the investor relations section of the Company's website at www.xerium.com. To follow along with the presentation that will accompany the Company's conference call, please join the webcast by going to www.xerium.com/investorrelations. Click on the webcast link appearing above our conference call details, then click on the link appearing below "Webcast Presentation" on the following page. You may also click here and you will be taken directly to the webcast registration page.

NON-GAAP FINANCIAL MEASURES

This press release includes measures of performance that differ from the Company's financial results as reported under generally accepted accounting principles ("GAAP"). The Company uses supplementary non-GAAP measures, including EBITDA, Adjusted EBITDA, currency effects on Net Sales, Effective Tax Rate excluding the Brazilian tax payment and the effects of Restructuring and Trade Working Capital to assist in evaluating its liquidity and financial performance. EBITDA and Adjusted EBITDA are specifically used in evaluating the ability to service indebtedness and to fund ongoing capital expenditures. Neither Adjusted EBITDA nor EBITDA should be considered in isolation or as a substitute for income (loss) or cash flows from operations (as determined in accordance with GAAP).

For additional information regarding non-GAAP financial measures and a reconciliation of such measures to the most comparable financial measures under GAAP, please see "Segment Information," "Trade Working Capital" and "Effective Tax Rate" above and our Selected Financial Data below. In addition, the information in this press release should be read in conjunction with the corresponding exhibits, financial statements and footnotes contained in our Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 3, 2015 and our presentation that will accompany our conference call tomorrow.

About Xerium Technologies

Xerium Technologies, Inc. (NYSE:XRM) is a leading global provider of industrial consumable products and services. Xerium, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 26 manufacturing facilities in 12 countries around the world, Xerium has approximately 3,100 employees.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. The words "believe," "estimate," "expect," "intend," "anticipate," "goals," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding our full year Adjusted EBITDA performance, anticipated sales performance, capital expenditures, cost savings measures, future efforts to improve overall performance and free cash flow. Forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by us, as well as from risks and uncertainties beyond our control.These risks and uncertainties include the following items: (1) we may not realize the Adjusted EBITDA performance we are projecting (2) our expected sales performance and our backlog of sales may not be fully realized; (3) our cost reduction efforts, including our restructuring activities, may not have the positive impacts we anticipate; (4) we are subject to execution risk related to the startup of our proposed new facilities in China and Turkey; (5) our plans to develop and market new products, enhance operational efficiencies and reduce costs may not be successful; (6) market improvement in our industry may occur more slowly than we anticipate, may stall or may not occur at all; (7) variations in demand for our products, including our new products, could negatively affect our revenues and profitability; (8) our manufacturing facilities may be required to quickly increase or decrease production, which could negatively affect our production facilities, customer order lead time, product quality, labor relations or gross margin; and (9) the other risks and uncertainties discussed elsewhere in this press release, our Form 10-K for the year ended December 31, 2013 filed on March 4, 2014, our Form 10-K for the year ended December 31, 2014 filed on March 3, 2015 and our other SEC filings. 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 projected. Any forward-looking statement in this press release reflects our current views with respect to future events. Except as required by law, 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. As discussed above, we are subject to substantial risks and uncertainties related to current economic conditions, and we encourage investors to refer to our SEC filings for additional information. Copies of these filings are available from the SEC and in the investor relations section of our website at www.xerium.com.

Selected Financial Data Follows




Xerium Technologies, Inc.
Consolidated Statements of Operations and Comprehensive (Loss) Income
(Dollars in thousands, except per share data)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2014			2013			2014			2013
Net Sales	$	130,967		$	133,721		$	542,932		$	546,892
Costs and expenses:
Cost of products sold	78,207			84,629			327,161			337,256
Selling	17,641			18,252			73,002			73,348
General and administrative	13,202			14,796			56,539			60,214
Research and development	2,004			1,970			7,903			7,858
Restructuring	2,430			6,390			18,142			14,844
	113,484			126,037			482,747			493,520
Income from operations	17,483			7,684			60,185			53,372
Interest expense, net	(9,782		)	(8,983		)	(36,768		)	(40,681		)
Loss on extinguishment of debt	—			—			—			(3,123		)
Foreign exchange gain (loss)	98			50			(719		)	(1,052		)
Income (loss) before provision for income taxes	7,799			(1,249		)	22,698			8,516
Provision for income taxes	3,360			4,692			(30,080		)	(4,363		)
Net income (loss)	11,159			3,443			(7,382		)	4,153
Comprehensive (loss) income	$	(23,785	)	$	13,330		$	(62,891	)	$	15,994
Net income (loss) per share:
Basic	$	0.72		$	0.22		$	(0.48	)	$	0.27
Diluted	$	0.68		$	0.21		$	(0.48	)	$	0.26
Shares used in computing net income (loss) per share:
Basic	15,555,801			15,380,543			15,458,810			15,359,445
Diluted	16,458,944			16,248,609			15,458,810			15,882,376




Consolidated Selected Financial Data

Cash Flow Data: (in thousands)	Year Ended
	December 31, 2014			December 31, 2013
Net cash provided by operating activities	$	6,892		$	36,114
Net cash used in investing activities	$	(41,788	)	$	(41,869	)
Net cash provided by (used) in financing activities	$	20,693		$	(3,274	)

Other Financial Data: (in thousands)

Depreciation and amortization	$	34,292		$	36,403
Capital expenditures, gross	$	(45,218	)	$	(44,145	)

Balance Sheet Data: (in thousands)	December 31, 2014			December 31, 2013

Cash and cash equivalents	$	9,517		$	25,716
Total assets	$	594,044		$	624,064
Total debt	$	469,435		$	443,139
Total stockholders' deficit	$	(74,110	)	$	(11,449	)

EBITDA and Adjusted EBITDA Non-GAAP Measures

Non-GAAP Financial Measures

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

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

"Adjusted EBITDA" means, with respect to any period, the total of (A) the consolidated net income for such period, plus (B) without duplication, to the extent that any of the following were deducted in computing such consolidated net income for such period: (i) provision for taxes based on income or profits, including, without limitation, federal, state, provincial, franchise and similar taxes, including any penalties and interest relating to any tax examinations, (ii) consolidated interest expense, (iii) consolidated depreciation and amortization expense, (iv) reserves for inventory in connection with plant closures, (v) consolidated operational restructuring costs, (vi) noncash charges resulting from the application of purchase accounting, including push-down accounting, (vii) non-cash expenses resulting from the granting of common stock, stock options, restricted stock or restricted stock unit awards under equity compensation programs solely with respect to common stock, and cash expenses for compensation mandatorily applied to purchase common stock, (viii) non-cash items relating to a change in or adoption

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

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

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						Year Ended
	December 31,						December 31,
	2014			2013			2014			2013
Net income (loss)	$	11,159		$	3,442		$	(7,382	)	$	4,153
Stock-based compensation	690			595			2,548			1,736
Depreciation	7,802			8,580			32,752			34,631
Amortization of intangibles	310			404			1,540			1,772
Deferred financing cost amortization	895			670			3,303			2,963
Foreign exchange loss (gain) on revaluation of debt	82			80			(259		)	1,706
Deferred tax expense	(6,367		)	(7,025		)	(4,857		)	(5,686		)
(Gain) loss on disposition of property and equipment	(1,031		)	48			(1,036		)	202
Asset impairment	(141		)	276			136			1,354
Loss on extinguishment of debt	—			—			—			3,123
Net change in operating assets and liabilities	(7,824		)	(1,387		)	(19,853		)	(9,840		)
Net cash provided by operating activities	5,575			5,683			6,892			36,114
Interest expense, excluding amortization	8,887			8,314			33,465			37,718
Net change in operating assets and liabilities	7,824			1,387			19,853			9,840
Current portion of income tax expense	3,008			2,333			34,937			10,049
Stock-based compensation	(690		)	(595		)	(2,548		)	(1,736		)
Asset impairment	141			(276		)	(136		)	(1,354		)
Foreign exchange (loss) gain on revaluation of debt	(82		)	(80		)	259			(1,706		)
Gain (loss) on disposition of property and equipment	1,031			(48		)	1,036			(202		)
Loss on extinguishment of debt	—			—			—			(3,123		)
EBITDA	25,694			16,718			93,758			85,600
Operational restructuring expenses	2,430			6,390			18,142			14,844
Loss on extinguishment of debt	—			—			—			3,123
Stock-based compensation	690			595			2,548			1,736
Non-restructuring impairment expense	—			—			—			667
Plant startup costs	567			105			1,521			401
Inventory write off due to plant closures	—			262			—			954
Adjusted EBITDA	$	29,381		$	24,070		$	115,969		$	107,325

Business Update March 4, 2015

2 Forward Looking Statements and Non-GAAP Reconciliations Various statements herein and remarks that we may make today about Xerium's future expectations, plans and prospects are forward-looking statements which reflect our current views with respect to future events and financial performance. Statements which include the words “expect,” “intend,” “plan,” “believe,” “project,” anticipate”, and similar statements of a future or forward-looking nature identify forward-looking statements for the purposes of the federal securities laws or otherwise. Our actual results may differ materially from these forward-looking statements and estimates as a result of various important factors, including those discussed in our earnings press release dated March 3, 2015, which is posted in the Investor Relations section of our website at www.xerium.com, and other factors discussed in our filings with the SEC, including our Form 10-K for the year ended December 31, 2014, all of which are on file with the SEC and are also available in the investor relations section of our website at www.xerium.com under the heading "SEC Filings." In addition, market data about the production volumes of our end-users is no guarantee of future production levels. Last, any forward-looking statements which we make in this presentation or in remarks today, represent our views only as of today. We disclaim any duty to update any such forward looking statements. We also plan to discuss supplementary non-GAAP financial measures, such as Adjusted EBITDA, that we use internally to assess financial performance, and therefore, believe will assist you in better understanding our company. Reconciliations of these measures to the comparable GAAP numbers are available in our most recent earnings press release, in this presentation and in an additional reconciliation schedule, all of which are posted in the Investor Relations section of our website at www.xerium.com.

3 4th Quarter 2014 Results Were in Line with Expectations, And Better Than Prior Year Sales $131 million  2% increase compared to Q4 2013 (constant currency) Adjusted EBITDA $29.4 million  21% increase compared to Q4 2013 (constant currency) and 22% of sales Net Debt Leverage 4.0x compared to 4.1x in Q3 2014 Currency Impact Programs 12 new programs initiated, comprised of 5 new sales growth programs and 7 new cost out programs. Orders $135 million  1% increase compared to Q4 2013 (constant currency) $5.8 million decline in sales compared to Q4 2013 Adjusted EPS $0.43/share versus $0.16/share – 169% increase Finished the year stronger fundamentally; Well Positioned to Build Momentum in 2015

4 Year-Over-Year Quarterly Results Continue to Improve and Strengthen • A solid quarter for Xerium -- sales, gross margins, and adjusted EBITDA all improved at constant currency  Sales, margins, adjusted EBITDA grew in machine clothing  Sales, margins, adjusted EBITDA grew in rolls & mechanical service • Orders remained steady and strong in Q4 2014. Entered 2015 with a solid backlog  New product and new market programs are having a positive impact  More new products will be fielded in 2015  More capacity is being de-bottlenecked in 2015  Still just getting started with business diversification activities • Began 12 new sales growth and cost out programs in Q4 2014. Have 48 total programs - 32 sales growth programs, 16 cost out programs The 2nd Year of a Multi-Year Turnaround was on the mark, But the transformation of Xerium into a More Powerful Company is Just Beginning

5 2014 Full Year Results Were in Line with Expectations, And Better Than Prior Year Sales $543 million  0.3% increase compared to 2013 (constant currency) Adjusted EBITDA $116 million 6% increase compared to 2013 (constant currency) Net Debt Leverage 4.0x compared to 3.9x in 2013 due to $25 million Brazil tax settlement  would have decreased to 3.7x Currency Programs 48 total programs -- 32 sales growth, 16 cost out Orders $555 million  1% increase compared to 2013 (constant currency) $5.7 million decline in sales compared to 2013, primarily all in Q4 Adjusted EPS $1.58/share versus $1.23/share – 29% increase Finished the year stronger fundamentally; Well Positioned to Build Momentum in 2015

6 Year-Over-Year Full Year Results Continue to Improve and Strengthen • A solid year for Xerium as sales, gross margins, new products, and Adjusted EBITDA all improved at constant currency, but just getting started with a multi-year improvement program  Highest Adjusted EBITDA in 6 years • Sales growth programs just getting started  New product invention rates are running at all time highs  Many new product & sales growth programs just launching • Cost reduction & efficiency programs are well underway  $23 million out in 2013, $25 million out in 2014, similar program in 2015 • Initiatives are being implemented via 48 explicit programs  48 sales growth and cost out programs drove improvements in full year sales, gross margins, innovation, SG&A and Adjusted EBITDA  Two new big powerful plants come on line in 2015 and will deliver $10+ million of incremental EBITDA at full run-rate 2nd Year of a Multi-Year Turnaround Was on the Mark But the Transformation of Xerium into a more Powerful Company is Just Beginning

7 Business Progressively Moving to Higher Level of Performance 34.6% 37.4% 36.6% 35.1% 39.0% 38.1% 39.5% 36.7% 39.1% 39.6% 40.0% 40.3% 30.0% 32.0% 34.0% 36.0% 38.0% 40.0% 42.0% 44.0% % o f Sal es Operational Excellence Programs Working Gross Margin Improving 7.9% CAGR 40.3 36.0 36.9 38.3 35.8 35.7 34.9 35.0 34.9 35.4 34.2 32.8 32.0 34.0 36.0 38.0 40.0 42.0 MIllio n $ Lean SG&A Program Working SG&A Decreasing at 4.7% CAGR $18.8 $25.4 $24.4 $20.6 $29.1 $26.9 $27.2 $24.1 $25.7 $29.4 $31.5 $29.4 $14.0 $18.0 $22.0 $26.0 $30.0 $34.0 Mill io n $ EBITDA Benefiting from Higher Sales & Lower Costs Increasing at 14.2% CAGR 1 2 3 4 1 2 3 4 1 2 3 4 2012 2013 2014 1 2 3 4 1 2 3 4 1 2 3 4 2012 2013 2014 1 2 3 4 1 2 3 4 1 2 3 4 2012 2013 2014 1 2 3 4 1 2 3 4 1 2 3 4 2012 2013 2014 $126 $131 $130 $126 $134 $134 $130 $128 $128 $134 $135 $131 $120 $122 $124 $126 $128 $130 $132 $134 $136 $138 $140 Mill io n $ Sales Growth Programs Working Constant Currency Growth of 1.4% CAGR

8 Sales Grew in Both Segments in Q4 2014 Rolls & Services Outperformed Machine Clothing Net Sales For The Quarter Ended 12/31/2014 12/31/2013 $ Change Currency Effect of $ Change % Change % Change Excluding Currency Machine Clothing $ 82,442 $ 85,005 $ (2,563 ) $ (3,719 ) (3.0)% 1.4% Roll Covers $ 48,525 $ 48,716 $ (191 ) $ (2,085 ) (0.4)% 3.9% Total $ 130,967 $ 133,721 $ (2,754 ) $ (5,804 ) (2.1)% 2.3% Net Sales For The Year Ended 12/31/2014 12/31/2013 $ Change Currency Effect of $ Change % Change % Change Excluding Currency Machine Clothing $ 347,003 $ 352,336 $ (5,333 ) $ (3,860 ) (1.5)% (0.4)% Roll Covers $ 195,929 $ 194,556 $ 1,373 $ (1,839 ) 0.7% 1.7% Total $ 542,932 $ 546,892 $ (3,960 ) $ (5,699 ) (0.7)% 0.3%

9 Adjusted EBITDA Reconciliation Machine Clothing Rolls Corporate Total Net Income $ 13,996 $ 19,992 $ (41,351) $ (7,363) Interest Expense, net 449 112 36,206 36,768 Income tax 26,849 2,350 863 30,062 Depreciation 22,797 8,787 1,168 32,752 Amortization of Intangibles 661 880 0 1,540 EBITDA 64,752 32,121 (3,114) 93,759 Inter-company charges 12,509 2,111 (14,620) 0 Restructuring expenses 10,730 6,836 580 18,146 Stock based compensation 242 12 2,294 2,548 Plant startup costs 1,072 92 352 1,516 Adjusted EBITDA $ 89,305 $ 41,176 $ (14,508) $ 115,969 Adjusted EBITDA as a % of Sales Continues to Increase – now at 21% Up from 17% Just 2 Years Ago and Planned to Continue Improving

10 Q4 Adjusted Earnings per Share were $0.43 – up 169% Full Year 2014 Adjusted Earnings per Share were $1.58 – up 29% (1) In 2014, the valuation allowance reversal has been included above as an add-back, given the unusual and infrequent nature of this item. In addition, the comparable amount for 2013 has also been included above as an add- back. Q4 TTM Per Share Amounts (basic and net of taxes) 2014 2013 Q4 2014 Q4 2013 Net Income $ 0.72 $ 0.22 $ (0.48) $ 0.27 Adjustments: Restructuring Expenses 0.10 0.35 0.87 0.88 Plant Start-up Costs 0.04 0.01 0.10 0.03 Brazil Tax Charge - - 1.49 - Valuation Allowance Reversal (0.43) (0.40) (0.43) (0.40) Goodwill Amortization - (0.03) - (0.13) Debt Extinguishment - - - 0.44 Inventory Write-off of Closed Facilities - 0.02 - 0.06 Non-restructuring Impairment - - - 0.04 FX (gain) loss - - 0.03 0.05 Basic Adjusted Earnings Per Share $ 0.43 $ 0.16 $ 1.58 $ 1.23

11 $93m $114m $108m $89m $107m $116m 2009 2010 2011 2012 2013 2014 2014 Adjusted EBITDA was $116 million or 21% of Sales Have Corrected the Downturn Which Began in 2010 19% 21% 18% 17% 20% 21% 23% Highest in 6 Years Highest in 6 Years Note: Figures stated as reported externally. 2014 was a good year, But 2015 is planned to be better than 2014, and 2016 is planned to be better than 2015 -- Many multi-year initiatives are beginning to kick-in to help sales and profits --

12 2015 Business Plan Highlights Sales and Adjusted EBITDA Planned to Increase Again  Sales volumes expected to grow modestly at 0 to 1%  Sales growth rates will continue to be minor as graphical grades of paper decline in North America and Europe while the rest of the world continues to grow  However, Xerium’s chances of higher sales growth will continue to increase in 2015 as capacity will be debottlenecked in several places, new products come on line  EBITDA is expected to grow to $120 million (constant currency at current rates)  Net leverage is expected to decrease in 2015 as a result of both increased Adjusted EBITDA and debt pay downs.  Plant network to go through a step-change transformation in 2015 involving 10 plants in 8 countries  Two low-cost plants to start-up (BaCheng, Corlu)  Continued asset rationalization expected in 2015  Two Mechanical Service plant expansions to come on line (Neenah, Griffin)  Four machine clothing plant expansions to be completed (Asahi, Kentville, Piracicaba, Reutlingen)  Spending will begin to decrease, free cash flow will begin to increase  $5-10 million in 2015  Less capex & restructuring spending, higher EBITDA, no Brazil settlement recurrence, less working capital .

13 2015 Sales Growth Efforts Will Benefit from Projects Coming On-Line Will Support Growth in Paper, Board, Fiber Cement, Nonwoven, Services Q4 2014 Gloggnitz Expansion Start-up Ruston Expansion Start-up Changzhou Expansion Start-up Q4 2015 Neenah Expansion Start-up Griffin Expansion Start-up Asahi Expansion Start-up Q3 2015 BaCheng Start-up Corlu Start-up Kentville Expansion Start-up Q1 2015 Q2 2015 Many multi-year initiatives will begin in 2015, And tee up an even stronger 2016

14 U.S. Dollar Estimated at 11-Year High in 2015 Will Impact Xerium P&L, Balance Sheet & Global Market Dynamics  Sales are expected to improve 1% on a constant currency basis  EBITDA is expected to be $4 million higher at current rates  At today’s FX rates, sales will be negatively impacted by $37 million and Adjusted EBITDA will be benefited by $1 million  Current forecasts for full year 2015 rates indicates additional exposure to sales and Adjusted EBITDA of $2 million and $1 million, respectively Key Points for 2015 2014 FX Rate Ave. 2015 Current FX Rates as of 2/19/2015 % Change 2015 FX Rate Outlook % Change EUR to US$ 1.330 1.138 -14.4% 1.130 -15.0% CAD to US$ 0.906 0.801 -11.6% 0.777 -14.2% AUD to US$ 0.903 0.781 -13.5% 0.803 -11.1% BRL to US$ 0.426 0.350 -17.9% 0.367 -13.9% RMB to US$ 0.162 0.160 -1.5% 0.161 -0.8% JPY to US$ 0.009 0.008 -11.4% 0.008 -12.5% EUR to JPY 140.253 135.342 -3.5% 120.000 -14.4% EUR to BRL 3.119 3.253 4.3% 3.078 -1.3% AUD to NOK 5.665 5.916 4.4% 6.480 14.4% AUD to SEK 6.170 6.560 6.3% 6.620 7.3% EUR to RMB 8.192 7.119 -13.1% 7.000 -14.5%

15 2015 Market Environment Expected to Be Like 2014 Stress in NA & EU Graphical Paper Markets, Growth in Asia/SPS  Global production to grow 8.2% Highlights of 2015 Market Source: Numera Analytics,  Global paper & board production to grow by 1.4%  Graphical grades (globally)  Newsprint to decline 3.9%  P&W to decline 0.7%  Tissue  Global growth of 3.8%  Containerboard  Global growth of 1.8 – 2.8%  Market Pulp  Global growth of 2.3%  Asia  Total production to grow 2.8%  Tissue to grow 5.8%  Containerboard grades to grow 3 – 3.5%  South America  Total production to grow 2.6%  Tissue to grow 4.3%  Packaging grades to grow 2.5 - 3% Paper, Tissue, Containerboard, Pulp Nonwoven Fabrics  Global GDP 4%  NA economy to grow ~3%.  China economy to grow ~6%  Count on temporary November & December Xerium customer product delivery hold-backs  Europe negatives outweigh positives. Euro expected to continue depreciating  Oil prices low and beneficial to customers and their economic health Fiber Cement  U.S production to grow 2.4% Source: Fredonia Group Source: Fredonia Group

16 99.0 99.5 100.0 100.5 101.0 101.5 102.0 102.5 103.0 103.5 104.0 Q1 Q2 Q3 Q4 Pulp, Paper, Board and Tissue Market is Slowing Growing and Transforming Graphical Grades & Mature Markets Declining, GDP Grades & Emerging Markets Increasing Source: Numera Analytics World Demand by Quarter 2014 2012 2013 World Demand by Region YTD Sep ‘13 vs YTD Sep ‘14 4% 3% 2% 1% 0% -1% “GDP” grades digital substitution emerging wealth grades bar width equates to grade mix tonnes World Demand by Grade YTD Sep ‘13 vs YTD Sep ‘14 1.9% 0.0% 2.1% -1% -7.1% 2014 – tracking flat vs 2013 2013 – 1% higher than 2012 3.0% 2.5% 2.0% 1.5% 0% -1.5% bar width equates to regional market size -1.4% 0.7% 0.3% 0.6% 1% 2012 2013 2014 World Production by Month M ill io n T o n n e s M ill io n T o n n e s

17 Spending Peaked in 2014 and Will Come Down in 2015 Capacity is Being Put in Place to Support Multiple Years of Growth 2013 2014 $59 m $65 m 2015 $59 m Maintenance of Business $15 m repairs, safety, quality, IT, R&D Cost Productivity Projects $7 m ~370 projects in the 27 plants Rolls & Service Expansion $10 m Turkey, Neenah, Griffin BaCheng PF Expansion $10 m Equipment payments, start-up Restructuring Projects $17 m Several big projects planned Highlights of 2015 Plan Spending includes cash payments made in connection with restructuring activities and capital expenditures.

18 Unlike Single-Product Suppliers, Xerium Has a Uniquely Integrated Portfolio of Products and Services to Optimize Machine Performance ✔ Now for Suction Roll & Tissue Machines, unprecedented information and benefits for customers Rolls Machine Clothing Mechanical Services ✔ ✔ Analytics & Automation Industry’s most innovative & advanced rolls portfolio offering more products than all the competition combined. Forming Fabrics Press Felts Dryer Fabrics Engineered Fabrics Fabrics for Nonwovens Fiber Cement Felt Specialty Fabrics Roll Rebuilds Suction Box Rebuilds Vibration Analysis Balancing, Fabrication Bearing, Journal Repair

19  Xerium is guiding to increased sales and increased Adjusted EBITDA in 2015  Sales growth will be moderate due to market transformations underway  But Xerium’s chances of upside performance in sales will continue to improve  Xerium will continue to use this pause in the global market to restructure its global footprint  Spending will begin to come down in 2015 but will stay at historically elevated levels until this process is completed  Xerium inventions and patents are at very high levels  Have several new products and services that are off to fast starts  ~60% of Xerium’s sales are from new products launched in the last 5 years  Several important cost reductions programs, capacity expansions, and new products will come on line in late 2015, which will set up another strengthening year in 2016 2015 Will be Another Increasing and Improving Year for Xerium Finished the year stronger fundamentally; Well Positioned to Build Momentum in 2015

Thank You! March 4, 2015

Xerium Technologies, Inc.

Non-GAAP Reconciliations

The following table provides a reconciliation from GAAP net sales, as reported, to constant currency net sales for Q1 2012 through Q4 2014 (dollars in thousands):



	Net Sales For The Quarter Ended
	3/31/12			6/30/12			9/30/12			12/31/12			3/31/13			6/30/13			9/30/13			12/31/13			3/31/14			6/30/14			9/30/14			12/31/14
Net Sales	$	134,364		$	136,378		$	134,231		$	133,767		$	139,805		$	138,324		$	135,042		$	133,721		$	133,384		$	139,723		$	138,858		$	130,967
Currency Impact	(8,772		)	(5,733		)	(4,657		)	(7,820		)	(5,465		)	(4,492		)	(4,565		)	(5,759		)	(5,254		)	(5,650		)	(3,981		)	—
Constant Currency Net Sales	$	125,592		$	130,645		$	129,574		$	125,947		$	134,340		$	133,832		$	130,477		$	127,962		$	128,130		$	134,073		$	134,877		$	130,967

The following table provides a reconciliation from GAAP orders, as reported, to constant currency orders for Q1 2012 through Q4 2014 (dollars in thousands):



	Orders For The Quarter Ended
	3/31/12			6/30/12			9/30/12			12/31/12			3/31/13			6/30/13			9/30/13			12/31/13			3/31/14			6/30/14			9/30/14			12/31/14
Orders	$	134,385		$	127,750		$	120,674		$	137,558		$	138,327		$	140,168		$	130,324		$	141,219		$	147,600		$	135,366		$	127,907		$	135,306
Currency Impact	(10,863		)	(8,707		)	(7,698		)	(9,586		)	(9,934		)	(8,491		)	(6,673		)	(8,190		)	(6,490		)	(5,909		)	(4,370		)	—
Constant Currency Orders	$	123,522		$	119,043		$	112,976		$	127,972		$	128,393		$	131,677		$	123,651		$	133,029		$	141,110		$	129,457		$	123,537		$	135,306

The following table provides a reconciliation from quarterly net (loss) income and operating cash flows, which are the most directly comparable GAAP financial measures to EBITDA and Adjusted EBITDA for Q1 2012 through Q4 2014 (dollars in thousands):



	Adjusted EBITDA for the Quarter Ended
	3/31/12			6/30/12			9/30/12			12/31/12			3/31/13			6/30/13			9/30/13			12/31/13			3/31/14			6/30/14			9/30/14			12/31/14
Net (loss) income	$	(7,522	)	$	2,226		$	(3,657	)	$	(9,082	)	$	5,485		$	(6,879	)	$	2,104		$	3,443		$	1,167		$	764		$	(20,472	)	$	11,160
Stock-based compensation	972			(218		)	820			375			295			300			547			594			509			640			709			690
Depreciation	9,764			9,429			9,321			10,019			8,966			8,702			8,384			8,579			8,233			8,534			8,183			7,802
Amortization of intangibles	576			576			576			577			576			385			407			404			416			403			231			310
Deferred financing cost amortization	1,054			682			971			717			709			909			675			670			716			751			942			895
Foreign exchange loss (gain) on reval of debt	8			373			(214		)	415			(118		)	3,039			(1,296		)	81			(1,103		)	366			396			82
Deferred tax expense	(182		)	(179		)	(22		)	(7,866		)	282			466			591			(7,025		)	(808		)	(143		)	2,460			(6,367		)
Asset impairment	—			—			1,600			2,074			928			150			—			276			—			—			277			(141		)
Loss (gain) on disp of property and equipment	(446		)	(170		)	(40		)	80			(10		)	3			161			48			27			1			(33		)	(1,031		)
Loss on extinguishment of debt	—			—			—			(243		)	—			3,123			—			—			—			—			—			—
Net change in operating assets and liabilities	5,928			(9,075		)	7,053			12,052			(6,830		)	(6,610		)	4,986			(1,386		)	(6,394		)	(5,163		)	(292		)	(7,824		)
Net cash provided by operating activities	10,152			3,644			16,408			9,118			10,283			3,588			16,559			5,684			2,763			6,153			(7,599		)	5,576
Interest expense, excluding amortization	8,544			8,438			8,806			8,667			8,497			12,203			8,703			8,315			7,941			8,165			8,650			8,887
Net change in operating assets and liabilities	(5,928		)	9,075			(7,053		)	(12,052		)	6,830			6,610			(4,986		)	1,386			6,394			5,163			292			7,824
Current portion of income tax expense	839			2,533			116			1,199			2,221			3,023			2,472			2,333			2,700			2,472			26,758			3,008
Stock-based compensation	(972		)	218			(820		)	(375		)	(295		)	(300		)	(547		)	(594		)	(509		)	(640		)	(709		)	(690		)
Foreign exchange (loss) gain on reval of debt	(8		)	(373		)	214			(415		)	118			(3,039		)	1,296			(81		)	1,103			(366		)	(396		)	(82		)
Asset impairment	—			—			(1,600		)	(2,074		)	(928		)	(150		)	—			(276		)	—			—			(277		)	141
(Loss) gain on disp of property and equipment	446			170			40			(80		)	10			(3		)	(161		)	(48		)	(27		)	(1		)	33			1,031
Loss on extinguishment of debt	—			—			—			243			—			(3,123		)	—			—			—			—			—			—
EBITDA	13,073			23,705			16,111			4,231			26,736			18,809			23,336			16,719			20,365			20,946			26,752			25,695
Loss on extinguishment of debt	—			—			—			(243		)	—			3,123			—			—			—			—			—
Stock-based compensation	972			(218		)	820			375			295			300			547			594			509			640			709			690
Operational restructuring expenses	3,974			1,129			5,840			14,765			1,255			4,165			3,034			6,390			4,651			7,595			3,466			2,430
Non-restructuring impairment expense	—			—			—			1,195			857			(191		)	1			—			—			—			—
Inventory write-off related to a closed plant	—			—			—			—			—			692			—			262			—			—			—
Legal fees related to term debt amendment	—			85			30			—			—			—			—			—			—			—			—
Non-recurring CEO retirement expenses	801			695			1,600			289			—			—			—			—			—			—			—
Plant startup costs	—			—			—			—			—			—			296			105			176			240			537			568
Adjusted EBITDA	$	18,820		$	25,396		$	24,401		$	20,612		$	29,143		$	26,898		$	27,214		$	24,070		$	25,701		$	29,421		$	31,464		$	29,383

The following tables provide a reconciliation from quarterly net (loss) income per share to quarterly adjusted net income per share at December 31, 2014 and December 31, 2013 (in thousands, except per share data):



	Earnings per Share (net of taxes) Q4 2014
	As Reported			Tax effects			Adjusted			Shares	Per Share
Net Income	$	11,161					$	11,161		15,459	$	0.72

Adjustments:
Restructuring expenses	2,430			(832		)	1,598			15,459	0.10
Plant start-up costs	568						568			15,459	0.04
Valuation allowance reversal				(6,625		)	(6,625		)	15,459	(0.43		)
Currency losses	(99		)	30			(69		)	15,459	—
Net Income, adjusted	$	14,060		$	(7,427	)	$	6,633		15,459	$	0.43



	Earnings per Share (net of taxes) Q4 2013
	As Reported		Tax Effects			Adjusted			Shares	Per Share
Net Income	$	3,443				$	3,443		15,359	$	0.22

Adjustments:
Restructuring expenses	6,390		$	(1,051	)	5,339			15,359	0.34
Plant start-up costs	105					105			15,359	0.01
Valuation allowance reversal			(6,200		)	(6,200		)	15,359	(0.40		)
Goodwill amortization			(513		)	(513		)	15,359	(0.03		)
Inventory write-off	262		—			262			15,359	0.02
Net income, adjusted	$	10,200	$	(7,764	)	$	2,436		15,359	$	0.16

The following tables provide a reconciliation from trailing twelve month net (loss) income per share to adjusted net income per share at December 31, 2014 and December 31, 2013 (in thousands, except per share data):



	Earnings per Share (net of taxes) TTM Q4 2014
	As Reported			Tax effects			Adjusted			Shares	Per Share
Net loss	$	(7,382	)				$	(7,382	)	15,459	$	(0.48	)

Adjustments:
Restructuring expenses	18,142			$	(4,611	)	13,531			15,459	0.87
Plant start-up costs	1,521						1,521			15,459	0.10
Brazil tax amnesty				$	23,078		23,078			15,459	1.49
Valuation allowance reversal				$	(6,625	)	(6,625		)	15,459	(0.43		)
Currency losses	719			(216		)	503			15,459	0.03
Net Income, adjusted	$	13,000		$	11,626		$	24,626		15,459	$	1.58



	Earnings per Share (net of taxes) TTM Q4 2013
	As Reported		Tax effects			Adjusted			Shares	Per Share
Net income	$	4,153				$	4,153		15,359	$	0.27

Adjustments:
Restructuring expenses	14,844		$	(1,374	)	13,470			15,359	0.88
Plant start-up costs	401					401			15,359	0.03
Valuation allowance reversal			$	(6,200	)	(6,200		)	15,359	(0.40		)
Goodwill amortization			(2,050		)	(2,050		)	15,359	(0.13		)
Debt extinguishment	6,823					6,823			15,359	0.44
Inventory write-off	954					954			15,359	0.06
Non-restructuring impairment	667					667			15,359	0.04
Currency losses	1,052		(316		)	736			15,359	0.04
Net Income, adjusted	$	28,894	$	(9,940	)	$	18,954		15,359	$	1.23