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Xerium Technologies, Inc. (NYSE: XRM), a leading global manufacturer of clothing and roll covers used primarily in the paper production process, today announced that it had completed the previously-announced restatement of certain of its previously-issued financial statements, following a review of the accounting treatment of interest rate swaps that it entered into in June 2005. Thomas Gutierrez, President and Chief Executive Officer of Xerium Technologies, commented, “We addressed the need to review our financial statements in light of evolving, complex interest rate swap accounting, and are pleased that we were quickly able to resolve all issues completely and accurately. As we noted previously, these hedging activities have been successful in fulfilling their goal of providing stability to the Company’s interest rate structure. It should also be noted that this technical accounting issue affected only interest expense, related income taxes and net income (loss). There was no impact on operating cash flow, sales, operating income or Adjusted EBITDA, nor does it affect the Company’s debt covenants. As can be seen in the amended financial statements, the aggregate effect of the restatement was to boost the Company’s net income over the restated period. For the period of the third quarter 2007 through the second quarter 2008, at which time the current interest rate swaps are set to expire, we expect to record in the aggregate approximately $8 million of additional interest expense to our Income Statement in connection with marking to market through earnings the 2005 interest rate swaps. This additional interest expense over that period is excluded for the purposes of our bank covenant calculations and therefore has no effect on those calculations.” The consolidated financial statements restated are the consolidated balance sheets as of December 31, 2006 and 2005 and the consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years 2006 and 2005 and the Company's unaudited quarterly financial statements during these years, commencing with the quarter ended June 30, 2005, and for the quarter ended March 31, 2007. Accordingly, the Company today filed an amended Annual Report on Form 10-K/A for the year ended December 31, 2006, and an amended Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2007, along with its Quarterly Report on Form 10-Q for the quarter ended June 30, 2007. ABOUT XERIUM TECHNOLOGIES Xerium Technologies, Inc. (NYSE: XRM) is a leading global manufacturer and supplier of two types of products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, owns 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 33 manufacturing facilities in 14 countries around the world, Xerium Technologies has approximately 3,800 employees. FORWARD-LOOKING STATEMENTS This press release may contain forward-looking statements that are not based on historical fact, including without limitation, statements containing the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "indicates," "suggests" and similar expressions. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include, but are not limited to: (i) adverse changes in general economic or market conditions, including without limitation those affecting the paper industry; (ii) labor unrest; (iii) currency fluctuations; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) the relative and varying rates of product price and component cost changes and the volume and mixture of product and service revenues; (vi) transitions to new products, the uncertainty of customer acceptance of new product offerings and technological and market change; (vii) the lack of any requirement to make dividend payments on our common stock at any particular level or at all; (viii) limitations imposed by our credit facility on the amount of dividends we are permitted to pay; (ix) our high degree of leverage and significant debt service obligations, together with our dividend policy, may cause us to have insufficient cash to fund growth and unexpected cash needs; (x) war or acts of terrorism in any country in which we conduct business; (xi) changes in U.S. or foreign government policies, laws, regulations and practices, including without limitation those regarding the repatriation of funds and taxes; and (xii) those other risks described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K/A for period ended December 31, 2006 filed with the Securities and Exchange Commission and subsequent SEC filings. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such forward-looking statements after the date of this release.
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