Xerium (XRM) 8-K Xerium Technologies Reports Fourth Quarter Results

Xerium Technologies, Inc.

Fourth Quarter 2011

Selected Data –

Earnings Call

March 13, 2012

EXHIBIT 99.2

1

Forward Looking Statements

•

This presentation and the remarks 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. Any forward-

looking statements which we make in this presentation or in our remarks today,

represent our views only as of today. We disclaim any duty to update any of these

forward-looking statements.

•

Forward-looking statements involve risks and uncertainties, both known and

unknown.  Our actual results may differ materially from these forward-looking

statements due to a number of factors, including those factors discussed in our

earnings press release dated March 13, 2012, and other factors discussed in our

filings with the SEC, including our Form 10-K for the year ended December 31, 2011.

Copies of these filings are available from the SEC and in the investor relations

section of our website at www.xerium.com. 

•

These slides, the associated remarks and comments made during our fourth quarter

2011 financial results conference call, our earnings release dated March 13, 2012

and the reconciliation of certain non-GAAP financial information posted in the investor

relations section of our website are integrally related and are intended to be

presented and understood together.

2

Bookings Analysis –

Total Xerium

Order bookings for Q4 2011 were $127.1M compared to Q4 2010 of $142.8M. Q4 2011

worldwide bookings reflect the impact of reduced paper production primarily in Europe. 

Additional impacts include reduced orders in North America and unfavorable currency

movements in Europe and South America.

3

Bookings Analysis –

Paper Machine Clothing

PMC Q4 2011 order bookings of $80.2M are lower than Q4 2010 and Q3 2011 levels of

$89.9M and $84.5M, respectively. Q4 2011 bookings reflect the impact of reduced paper

production in Europe, lower orders in North America and Asia Pacific, and unfavorable

impacts from currency movements in Europe and South America.

4

Bookings Analysis –

Roll Coverings

Rolls

Q4

2011

worldwide

order

bookings

of

$46.9M

were

lower

than

Q4

2010

bookings

of

$52.9M.

Q4

2011

worldwide

bookings

reflect

the

impact

of

reduced

paper

production

in

Europe.

Order

volume

was

lower

in

North

America

but

increased

in

the

Asia

Pacific

Region.

In

addition,

currency

movements

in

Europe

and

South

America

were

unfavorable

vs.

Q4

2010.   

5

Percent of Revenue from Asia-Pacific Markets

Generally,

over

time,

we

expect

growth

in

paper

production

to

be

greater

in

Asia-

Pacific

than

in the

more

mature

North

American

and

Western

European

regions.

6

New Product Sales as a Percent of Revenue 

Meaningful progress continues on Xerium’s goal to increase its technological leadership.  Our

goal is to derive 60% of XRM’s sales revenue from products developed within the prior five

years that make a measurable improvement in customer performance, are defendable long

term and simultaneously reduce our operating costs.

7

Xerium’s New Product Categorization

New products are categorized by their level of innovation and strategic purpose

8

Innovation

Performance

Rationalization

Non Paper

•

Gain

market

share

through

application

of

unique

performance

features;

capture

premium

pricing

•

Break

through

or

new

technology,

defendable

intellectual

property

that

competitors

can’t

replicate

•

SmartRoll

™,

EDC,

Impact,

EnerSTAR

™

•

Gain

/

Defend

market

share;

recover

lost

pricing

potential

of

mature

products

•

Product

introductions

that

significantly

enhance

contemporary

product

performance

•

New

tissue

products,

new

generation

spreader

rolls

•

Defend

market

share

and

price,

drive

internal

savings

•

Product

launches

that

while

upgrading

product

performance,

are

primarily

intended

to

reduce

manufacturing,

service

and

warranty

costs

•

ProSeam,

Avantexx

•

Provide profitable growth in non-paper markets

•

This

includes

new

products

developed

for

the

nonwoven

textiles

industry,

fiber

cement,

oil

field

development,

and

other

markets

Total Xerium Quarterly Sales and Gross Margin

000’s

Q4

2011

net

sales

increased

0.4%

from

Q4

2010.

Gross

margins

declined

to

34.6%

for

Q4

2011

as

compared

to

40.3%

for

Q4

2010.

This

decrease

was

primarily

the

result

of

(1)

unfavorable

production

cost

absorption

due

to

concerted

efforts

to

decrease

production

and

reduce

inventories,

(2)

a

favorable

recovery

of

inventory

reserves

in

2010,

(3)

inability

to

offset

increased

raw

material

costs

and

(4)

strong

sales

growth

in

regions

and

products

with

lower

margins.

9

S G & A and R&D as a Percent of Revenue

In

Q4

2011,

SG&A

and

R&D

as

a

percent

of

sales

is

25.6%

as

compared

to

Q4

2010

of

25.1%.

Favorable

impacts

include

a

decrease

in

management

incentive

compensation

and

stock

compensation.

Partially

offsetting

these

items

were

bank

and

legal

fees,

bad

debt

reserves,

a

2010

gain

on

the

sale

of

land

in

Brazil

and

higher

selling

expense

due

to

inflation

and

higher

headcount.

10

Trailing Twelve Month (“TTM”) Adjusted EBITDA

Note:  Adjusted EBITDA at each quarter was the amount as calculated per the definition in the current credit facility with the exception that we have added back to net

income (loss) per the terms of our prior credit facility financial restructuring costs of $9.6M, $15.3M, $0.8M and $0.6M incurred as part of the reorganization in Q1

2010, Q2 2010, Q3 2010 and Q4 2010, respectively.   A reconciliation of Trailing Twelve Month Adjusted EBITDA to Net Income (Loss) and operating cash flows is

available in the investor relations section of the Company’s website at www.xerium.com.

11

Trade Working Capital (“TWC”) as a Percent of

Revenue 

Trade

working

capital

%

improved

170

basis

points

versus

Q3

2011

due

primarily

to

reduced

levels

of

inventories

and

increased

trade

payables.

Note:

a

reconciliation

of

Trade

Working

Capital

to

Revenue

is

available

in

the

investor

relations

section

of

the

Company’s

website

at

www.xerium.com.

12

Total Xerium Annual Capital Expenditures

2011 investments focused on PMC capacity, new products and maintenance of existing

equipment capacity.

13