Xerium (XRM) 8-K Q1 2010 Earnings Call Transcript

Xerium Technologies Inc.

March 2010

Selected Data –

Earnings Call

May 14, 2010

EXHIBIT 99.2

Forward Looking Statements

•

This presentation contains forward-looking statements involving

risks and uncertainties, both known and unknown, that may cause

the actual results to differ materially from those indicated.

•

Actual results may differ materially due to a number of factors,

including those factors discussed in our earnings press release

dated May 13, 2010, and other factors discussed in our filings with

the SEC, including our report on Form 10-K for the period ending

December 31, 2009 and subsequent filings.  Copies of these filings

are

available

from

the

SEC

and

in

the

investor

relations

section

of

our website at www.xerium.com.

•

These slides and the associated remarks and comments made

during our first quarter 2010 financial results conference call are

integrally related and are intended to be presented and understood

together.

2

3

Total Debt at Constant FX Rates

$ Millions

Note –

Total Debt converted at Q2 2005 FX rates for all periods presented    (Euro = USD $1.20,  Canadian Dollar = USD $0.82)

4

Total Xerium Quarterly Sales as

Reported

75.0

100.0

125.0

150.0

175.0

Qtr Sales $

143.9

153.7

153.6

164.2

158.9

170.4

159.3

149.5

116.5

120.8

130.3

132.4

135.0

Year-over-Year

-26.7%

-29.1%

-18.2%

-11.4%

15.9%

'07 Q1

'07 Q2

'07 Q3

'07 Q4

'08 Q1

'08 Q2

'08 Q3

'08 Q4

'09 Q1

'09 Q2

'09 Q3

'09 Q4

'10 Q1

$ Millions

1.9% improvement from Q4 ’09 to Q1 ‘10 marks the fourth consecutive quarter over quarter

improvement.  It is too early to tell if this is a sustainable recovery or customers replenishing inventories.

5

Trailing Twelve Month (“LTM”) Adjusted EBITDA

10,000

35,000

60,000

85,000

110,000

135,000

160,000

185,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Bank Adj LTM

141,599

139,887

146,108

146,021

148,787

160,733

176,456

164,487

149,046

130,526

101,470

93,007

109,375

Bank Ebitda by Qtr

32,844

38,228

38,429

36,520

35,610

50,174

54,152

24,551

20,169

31,654

25,096

16,088

24,476

Q1-07

Q2

Q3

Q4

Q1-08

Q2

Q3

Q4

Q1-09

Q2

Q3

Q4

Q1

Note:

a

reconciliation

of

Trailing

Twelve

Month

Bank

Adjusted

EBITDA

to

Net

Income

(Loss)

is

available

in

the

investor

relations

section

of

the

Company’s

website

at

www.xerium.com.

Q1

2010

and

the

LTM

for

Q1

2010

have

been

presented

in

accordance

with

the

definition

of

Adjusted

EBITDA

expected

in

the

anticipated

amended

and

restated

credit

facility.

6

Sales Price Change as a Percent of Revenue

%

Note

–

Data

compares

as

a

%

sales

price

achieved

current

year

compared

to

prior

year

Selling disciplines, new products, and market strength are contributing to more stable pricing.

S G & A Percent of Revenue as Reported

15.0

20.0

25.0

30.0

35.0

40.0

SG&A %

26.8

30.0

34.5

35.0

27.9

21.8

28.3

32.2

36.5

W/O FIN REST.

26.6

27.3

29.4

'08 Q1

'08 Q2

'08 Q3

'08 Q4

'09 Q1

'09 Q2

'09 Q3

09 Q4

10 Q1

%

‘09 Q1

Sales = $116.5 M

’08 Q1

Sales = $158.9 M

‘10 Q1

Sales = $135.0 M

Note -

Compares SG&A costs (selling, G&A, R&D, Operational Restructuring) excluding Pension Curtailment gain in Q3 ‘08 and Goodwill impairment

in Q4 ‘09.

Cost controls over SG&A spending have proven effective relative to significant 2009 sales volume

changes. However added costs for Financial Restructuring have made maintaining SG&A %

difficult. SG&A% excluding Financial Restructuring would be 26.6% in Q3 ’09, 27.3% in Q4 ‘09 and

29.4% in Q1 ‘10. 

7

8

New Product Sales as a Percent of  Revenue 

%

Initial signs of progress are emerging in Xerium’s

strategy to increase its technological leadership, by

accelerating the introduction of new products (those developed within the prior five years) that make a

measureable improvement in customer performance while simultaneously reducing our operating costs.

$27.9 M

$10.4 M

9

Total Working Capital as a Percent of Revenue 

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

180.0

Revenue

158.9

170.4

159.3

149.5

116.5

120.8

130.3

132.4

135.0

TWC%

30.7

28.9

26.3

24.3

29.4

29.4

27.8

25.3

25.6

'08 Q1

'08 Q2

'08 Q3

'08 Q4

'09 Q1

'09 Q2

'09 Q3

'09 Q4

'10 Q1

%

2008’s progress in reducing TWC was reset by the precipitous and sudden decline in demand during

2009.

Our

teams

have

made

progress

adjusting

to

this

new

reality.

(Note:  a reconciliation of Total Working Capital to Revenue is available in the investor relations section of the Company’s website at www.xerium.com.

10

Total Xerium Annual Capital Expenditures

$ Millions

Our

controls

over

capital

investment

were

effective

throughout

2009

in

prioritizing

only

investments

that

were

essential

to

supporting

our

customers

and

the

continued

development

of

our

new

products.

2010

investment is planned to reach $32.0 million.

11

30,000

35,000

40,000

45,000

50,000

55,000

13 Months

38,234

36,372

37,026

37,657

35,933

43,088

47,918

45,789

50,133

46,879

48,846

50,516

51,631

6 Months

45,789

50,133

46,879

48,846

50,516

51,631

3 Months

48,846

50,516

51,631

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

Feb 10

Mar 10

Bookings Analysis –

Total Xerium

3, 6 &13 Month Trend Lines

Consolidated new order bookings indicate our served market is recovering but it remains unclear

if this is inventory replenishment or real demand.

12

Bookings Analysis –

Paper Machine Clothing

3, 6 & 13 Month Trend Lines

10,000

15,000

20,000

25,000

30,000

35,000

40,000

13 Months

25,284

23,447

22,955

24,305

21,476

27,176

31,779

29,466

34,825

32,960

33,360

35,580

35,812

6 Months

29,466

34,825

32,960

33,360

35,580

35,812

3 Months

33,360

35,580

35,812

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

Feb 10

Mar 10

Consolidated new order bookings suggest PMC’s served market is recovering.  However,

below normal customer inventories may be a primary demand driver.

13

Bookings Analysis –

Roll Coverings

3, 6 & 13 Month Trend Lines

10,000

12,000

14,000

16,000

18,000

20,000

13 Months

12,950

12,924

14,071

13,352

14,457

15,912

16,137

16,323

15,308

13,919

15,486

14,936

15,819

6 Months

16,323

15,308

13,919

15,486

14,936

15,819

3 Months

15,486

14,936

15,819

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan10

Feb 10

Mar 10

Consolidated new order bookings indicate the served market recovery has plateaued

as

customers continue to stretch the life of their roll coverings.