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

EXHIBIT 99.3

Xerium Technologies, Inc.

Reconciliation of Trailing Twelve Month Bank Adjusted EBITDA (A) 

In Thousands

	Q3 2009			Q4 2009			Q1 2010			Q2 2010			Q3 2010			Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012
Net Income (loss)	$	(7,381	)	$	(96,765	)	$	(30,157	)	$	(40,011	)	$	(3,656	)	$	738		$	647		$	1,622		$	3,488		$	2,433		$	(7,522	)	$	2,226
Goodwill impairment		—			80,600			—			—			—			—			—			—			—			—			—			—
Stock-based compensation		778			481			2,103			1,356			1,756			2,098			1,250			831			172			(814	)		972			(218	)
Depreciation		10,269			10,518			9,871			9,511			9,644			9,937			10,232			10,686			10,655			9,808			9,764			9,429
Amortization of intangibles		582			580			580			579			578			581			576			576			577			576			576			576
Curtailment/settlement gain		—			—			—			—			—			—			—			—			402			—			—			—
Deferred financing cost amortization		1,201			1,522			1,575			3,908			238			232			236			366			1,011			694			1,054			682
Unrealized foreign exchange (gain) loss on revaluation of debt		(1,149	)		93			149			693			(1,567	)		(896	)		(610	)		(804	)		2,484			(931	)		8			373
Deferred taxes		1,396			4,751			558			2,174			1,573			4,309			660			549			1,037			(1,910	)		(182	)		(179	)
(Gain) loss on disposition of property and equipment		(8	)		45			86			23			(171	)		(2,043	)		(538	)		(26	)		(40	)		40			(446	)		(170	)
Asset impairment		1,667			2			—			748			2,123			19			(0	)		—			—			—			—			—
Non-cash interest expense related to interest rate swaps		859			2,165			3,211			2,147			2,160			2,203			0			—			—			—			—			—
Loss on extinguishment of debt		—			—			(0	)		—			—			—			—			2,926			—			—			—			—
Non-cash reorganization expenses		—			—			14,283			14,400			—			—			—			—			—			—			—			—
Reorganization expenses accrued											4,546			(3,231	)		(1,200	)		(115	)		115			—			—			—			—
Net change in operating assets and liabilities		3,093			8,350			2,575			(7,066	)		(3,821	)		1,291			(12,532	)		(9,886	)		4,289			4,476			5,928			(9,075	)
Net cash provided by (used in) operating activities		11,307			12,342			4,834			(6,995	)		5,626			17,269			(194	)		6,955			24,075			14,372			10,152			3,644
Cash interest expense, net		14,365			15,661			10,858			10,810			9,622			9,831			9,618			9,616			8,862			8,746			8,544			8,438
Net change in operating assets and liabilities		(3,093	)		(8,350	)		(2,575	)		7,066			3,821			(1,291	)		12,532			9,886			(4,289	)		(4,476	)		(5,928	)		9,075
Cash income tax expense		2,028			(2,447	)		1,578			2,876			2,745			2,453			2,758			2,481			2,227			2,878			839			2,533
Goodwill impairment		—			(80,600	)		—			—			—			—			—			—			—			—			—			—
Stock-based compensation		(778	)		(481	)		(2,103	)		(1,353	)		(1,756	)		(2,098	)		(1,250	)		(831	)		(172	)		814			(972	)		218
Curtailment/settlement gain		—			—			—			—			—			—			—			—			(402	)		—			—			—
Asset impairment		(1,667	)		(2	)		—			(748	)		(2,123	)		(19	)		0			—			—			—			—			—
Unrealized foreign exchange (gain) loss on revaluation of debt		1,149			(93	)		(149	)		(693	)		1,567			896			610			804			(2,484	)		931			(8	)		(373	)
Gain (loss) on disposition of property and equipment		8			(45	)		(86	)		(23	)		171			2,043			538			26			40			(40	)		446			170
Non-cash reorganization expenses		—			—			(14,283	)		(18,946	)		3,231			1,200			115			(115	)		—			—			—			—
Loss on extinguishment of debt		—			—			0			—			—			—			—			(2,926	)		—			—			—			—
EBITDA		23,319			(64,015	)		(1,927	)		(8,004	)		22,904			30,284			24,727			25,896			27,857			23,225			13,073			23,705
Unrealized foreign exchange (gain) loss on revaluation of debt		—			—			—			—			—			(1	)		—			—			—			—			—			—
Amendment/termination costs														—															—
Change in fair value of interest rate swaps		(859	)		(2,164	)								—															—
Changes in value of other derivatives		—			—									—															—
Operational Restructuring Expense		87			1,184			1,567			1,796			1,199			2,552			168			542			577			302			3,974			1,129
Inventory write-offs under restructuring programs		104			(0	)		—			—			—			—			—			—			—			—			—			—
Growth program costs		—			—									0															—
Non-cash Compensation and related expenses		778			481			2,389			1,041			2,067			1,812			1,250			831			172			(814	)		972			(218	)
Non-cash impairment charges		1,667			80,602			—			748			2,123			19			(0	)		—			—			—			—			—
Non-recurring expenses resulting from cost reduction programs																													—
Change in accounting policies		—			—			(1,400	)		—			—			—			—			—			—			—			—			—
Financial restructuring costs (B)		—			—			9,563			15,251			799			584			—			—			—			—			—			—
Write-off of deferred financing costs as “reorganization items”		—			—			14,283			—			—			—			—			—			—			—			—			—
Expenses Incurred in connection with indebtedness or refinancing transaction		—			—			—			14,400			—			—			—			2,926			—			—			—			85
Non recurring expenses related to the CEO retirement																																801			695
Adjusted EBITDA for the quarter as previously reported	$	25,096		$	16,088		$	24,476		$	25,230		$	29,094		$	35,250		$	26,145		$	30,195		$	28,606		$	22,713		$	18,820		$	25,396
Less: disallowed items under current credit agreement:
Unrealized foreign exchange gain on revaluation of debt		—			—			—			—			—			—			—			—			—						—			—
Amendment/termination costs
Change in fair value of interest rate swaps		859			2,164
Changes in value of other derivatives		—			—
Growth program costs		—			—
Plus: new items under the current credit agreement:
Non-cash change in or adoption of accounting policies
Financial Restructuring Costs		1,961			6,501
Non-cash expense from granting of Common Stock
Non-cash expense relating to pension or benefit arrangements
Proforma Adjusted EBITDA under the current credit agreement	$	27,916		$	24,753		$	24,476		$	25,230		$	29,093		$	35,251		$	26,145		$	30,195		$	28,606		$	22,713		$	18,820		$	25,396
Adjusted EBITDA for the trailing twelve months (“TTM”)										$	102,375		$	103,552		$	114,050		$	115,719		$	120,684		$	120,197		$	107,659		$	100,334		$	95,535

Note (A) – Adjusted EBITDA for all periods above have been presented in accordance with the definition of Adjusted EBITDA in the current credit facility except as noted below.

Note (B) – Financial restructuring costs under the definition of Adjusted EBITDA in the current credit facility are not adjustments added back to net income (loss) to arrive at Adjusted EBITDA for periods

beginning after the quarter ended June 30, 2011. For all quarters in 2010, such items were added back to net income (loss) to arrive at Adjusted EBITDA based on the terms of the prior credit facility.

Had these adjustments not been in place in 2010, Adjusted EBITDA would have decreased by $9.6 million, $15.3 million, $0.8 million and $0.6 million, respectively.

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Xerium Technologies, Inc.

Reconciliation of Total Working Capital as a Percentage of Revenue

	Q1 2010			Q2 2010			Q3 2010			Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012
Net Sales	$	135,015		$	132,827		$	135,899		$	144,593		$	143,166		$	150,378		$	148,227		$	145,189		$	134,364		$	136,378
“Trade AR” (per calculation below)	$	88,475		$	83,268		$	91,503		$	93,332		$	99,359		$	98,068		$	92,714		$	90,938		$	88,498		$	85,115
Inventory		75,583			72,802			78,863			81,927			90,177			98,833			91,364			83,317			86,735			81,296
Less: “Trade AP” (per calculation below)		26,057			27,029			26,517			32,779			30,834			29,162			25,955			29,077			30,265			29,617
Trade Working Capital	$	138,001		$	129,041		$	143,849		$	142,480		$	158,702		$	167,739		$	158,123		$	145,178		$	144,968		$	136,795
% of Net Sales		25.6	%		24.3	%		26.5	%		24.6	%		27.7	%		27.9	%		26.7	%		25.0	%		27.0	%		25.1	%
Calculation of Trade AR (C)
Accounts Receivable	$	88,475		$	83,268		$	91,503		$	93,332		$	99,359		$	99,116		$	93,432		$	91,784		$	89,399		$	86,085
Less: Other Receivables																	(1,048	)		(718	)		(846	)		(901	)		(969	)
Trade Accounts Receivable	$	88,475		$	83,268		$	91,503		$	93,332		$	99,359		$	98,068		$	92,714		$	90,938		$	88,498		$	85,116
Calculation of Trade AP
Accounts Payable	$	30,488		$	30,923		$	31,991		$	41,686		$	37,992		$	36,270		$	33,474		$	39,743		$	36,736		$	34,269
Less: Deposits Received		(2,899	)		(2,394	)		(3,493	)		(3,415	)		(4,913	)		(5,486	)		(5,881	)		(5,813	)		(4,690	)		(3,192	)
Less: Other Payables		(1,532	)		(1,500	)		(1,981	)		(5,492	)		(2,245	)		(1,622	)		(1,638	)		(4,852	)		(1,781	)		(1,461	)
Trade AP	$	26,057		$	27,029		$	26,517		$	32,779		$	30,834		$	29,162		$	25,955		$	29,077		$	30,265		$	29,617

Note (C) - Trade AR excludes Other Receivables for the purposes of trade working capital measurement beginning Q2 2011.