"As we completed the third quarter of our fiscal year, the first full quarter in which we were able to focus on operations improvement rather than debt restructuring, our served markets began to feel the current global economic strain," said Stephen Light, President, Chief Executive Officer and Chairman. "We are pleased that our strategy of generating cash to reduce debt, developing new products that help our customers produce high quality paper at lower costs and our reliance on the talent and commitment of our people, have positioned us well for this situation to date.

In the third quarter, we continued to execute according to our plans, made meaningful improvements to our operations, achieved measurable traction in our focus on working capital reduction, and substantially reduced our debt. Our view is that the global economy is likely to continue deteriorating over the coming months before a recovery begins, with the potential to directly impact our customers around the globe. Our ongoing contingency planning is identifying additional actions we can take to maximize our operating efficiencies and further reduce working capital and leverage. Simultaneously, we have increased provisions for bad debts and slow-moving and obsolete inventory in anticipation of the potential increased strain on our customers.

Additionally, and in line with our broad risk reduction initiatives, we reached a settlement with respect to the shareholder litigation suit against the Company that has been ongoing since June 2006, subject to court approval. The Company did not admit to liability of any kind in connection with the settlement, which will be covered by insurance.

Responding to our significantly improved risk profile and much improved balance sheet, we were recently given an increased credit rating from Standard & Poor's, which we believe is a reflection of how far we have come since we were downgraded this spring, and supports the appropriateness of our strategy for these challenging times."

THIRD QUARTER FINANCIAL HIGHLIGHTS

For the third quarter 2008, compared to the third quarter 2007:

• Net sales for the 2008 quarter were $159.3 million, a 3.7% increase from net sales for the 2007 quarter of $153.6 million. Excluding the currency effects shown in the table below, third quarter 2008 net sales increased 0.3% from the third quarter of 2007, with a decline of 2.4% and an increase of 6.0% in the clothing and roll covers segments, respectively.
• Gross margins were $52.8 million or 33.1% of net sales for the 2008 quarter, compared to $63.3 million or 41.2% of net sales for the 2007 quarter. The decline is mostly due to an $8.7 million ($8.1 million and $0.6 million in clothing and roll covers respectively) increase in provisions for slow moving and obsolete inventory, in light of our assessment of the impact of the current global economic slowdown on our customers and our industry. Additionally, the decline was due to approximately a 1.2% market price reduction and approximately a 2% reduction due to currency effect on pricing related to sales prices indexed in U.S. Dollars by certain non-U.S. operations. Excluding the effect of the increased provisions for slow moving and obsolete inventory recorded in the third quarter, the gross margin for the 2008 quarter was 38.2%. (See Non-GAAP Financial Measures "Impact of Significant Third Quarter 2008 Events" below).
• The recorded restructuring and impairment expenses of $3.6 million in the third quarter 2008 was an increase of $2.8 million from the 2007 quarter related to the Company's long-term strategy to streamline our operating structure and to improve long-term competitiveness by closing and/or transferring production from certain of our manufacturing facilities and through headcount reductions.
• Income from operations increased 57.3% to $37.9 million for the 2008 quarter from $24.1 million for the 2007 quarter. The increase primarily stems from the Company's previously announced changes to certain of its U.S. pension plans and postretirement benefit plans, resulting in one-time pre-tax curtailment/settlement gains of $40.0 million, partially offset by the previously mentioned provision for slow moving and obsolete inventory of $8.7 million, provisions for bad debts of $7.9 million and a provision for environmental remediation in Australia of $4.1 million. Excluding the effect of the U.S. pension and post-retirement benefit plan curtailment/settlement gains, the increased provisions for slow moving and obsolete inventory, the increased provisions for bad debts, and the provision for environmental remediation, income from operations for the third quarter 2008 would have been $18.1 million. (See Non-GAAP Financial Measures "Impact of Significant Third Quarter 2008 Events" below).
• Net income increased to $21.5 million or $.46 per diluted share from $7.1 million or $.16 per diluted share. The increase is largely the result of the previously mentioned pre-tax curtailment/settlement gains partially offset by the increased provisions noted in the previous paragraph. Excluding the effect of those items, net income for the third quarter 2008 would have been a loss of $1.4 million. The Company determined that it did not qualify for hedge accounting in the third quarter of 2007 and net income for that period includes a $2.7 million expense related to a mark-to-market decrease in the fair value of the Company's interest rate swaps. (See Non-GAAP Financial Measures "Impact of Significant Third Quarter 2008 Events" below).
• Net cash generated by operating activities was $11.8 million for the 2008 third quarter, compared to $18.4 million for the 2007 third quarter, partially as a result of increased interest expense of $2.2 million in the quarter.
• Adjusted EBITDA (as defined by the Company's amended credit facility) was $54.2 million for the 2008 third quarter, compared to $38.4 million for the 2007 third quarter. See "EBITDA and Adjusted EBITDA Reconciliation" below.
• In order to improve performance, the Company continues to target a reduction in days of receivables and increases in inventory turns and days of payables outstanding. During the 2008 quarter, as compared with the 2007 quarter, the Company reported that accounts receivables, as measured as a ratio of days of receivables, improved from 66 days to 56 days, inventory turns improved to 4.4 versus 3.1, and days of payables were 34 days compared to 36 days. These numbers reflect the $6.0 million of additional provisions for bad debts on trade receivables and $8.0 million additional provisions for slow moving and obsolete inventory that were recorded in the third quarter of 2008.
• Cash on hand at September 30, 2008 was $18.4 million, compared to cash on hand at June 30, 2008 of $25.4 million. Cash on hand at September 30, 2007 was $32.5 million.
• In addition to its scheduled quarterly debt payments of approximately $2.3 million, the Company made a voluntary prepayment in the third quarter of 2008 of approximately $6.1 million. For the first nine months of 2008, the Company has made senior debt repayments of $21.6 million, which compares to debt repayments of $9.5 million for the first nine months of 2007.
• Capital expenditures during the 2008 quarter were $8.3 million, compared to $8.9 million during the 2007 quarter. Capital expenditures for the nine months ended September 30, 2008 were $29.1 million. The Company expects capital expenditures to be in the range of $44 to $47 million for fiscal 2008. The Company also expects that capital expenditures in 2009 will be significantly lower than those for 2008.

OTHER HIGHLIGHTS

• The Company remained in compliance with all financial covenants, including covenants requiring compliance with minimum interest coverage, fixed charge coverage ratios and maximum leverage ratios.
• On September 29, 2008, Standard & Poor's raised its ratings on the Company, including raising the long-term corporate credit rating, from 'CCC+' to 'B-'.
• The Company released an additional $29.6 million in "trapped cash" during the third quarter, having freed $1.9 million in trapped cash in the second quarter of 2008. The Company defines "trapped cash" as the amount of working capital on its balance sheet that is in excess of 50 days of outstanding accounts receivable, 6 inventory turns and 48 days of accounts payable outstanding. Included in the calculation of "trapped cash" released during the third quarter of 2008 were $6.0 million of additional provisions for bad debts on trade receivables and $8.0 million additional provisions against inventories for slow moving and obsolete stock. These increased provisions reflect our assessment of the global economic slowdown on our customers and our industry and the lack of credit availability which may affect our customers' demand for products and their ability to pay their debts.
• In connection with the Company's amended credit facility, as of September 30, 2008 the weighted average interest rate on its effectively fixed portion of the term loan facility was 9.74%; and the weighted average interest rate on the portion of its term loan facility that is not effectively fixed by interest rate swap contracts, based on the 90-day LIBOR, was 9.64%.
• As previously noted, the Company has prepared a reconciliation of Non-GAAP Financial Measures "Impact of Significant Third Quarter 2008 Events" below to illustrate how management views the underlying operating results for the period. In summary, what is described in this reconciliation is the financial performance net of the effect of the substantial gains due to changes to certain of its U.S. pension plans and postretirement benefit plans and the impact of certain provisions for environmental matters and increased provisions for bad debts and slow-moving and obsolete inventory. The latter two items reflect the risk associated with our assessment of the global credit crisis and the potential impact on our customers.

SEGMENT INFORMATION

The following table presents net sales for the third quarter of 2008 and 2007 by segment and the effect of currency on pricing and translation on third quarter 2008 net sales:

(in millions):

		Net Sales Three Months Ended Sep. 30,				Increase in net sales from Q3 2007 to Q3 2008		Increase in Q3 2008 net sales due to currency translation (a)		Percent increase (decrease) in net sales from Q3 2007 to Q3 2008
		2008		2007						Total		Excluding currency translation effect		(b) Change in Q3 2008 net sales due to currency effects on pricing		Percent increase (decrease) in net sales from Q3 2007 to Q3 2008 excluding effect of currency on pricing and translation
Clothing		$ 104.4		$ 104.0		$ 0.4		$ 6.0		0.4%		(5.4)%		$ (3.1)		(2.4)%
Roll Covers		54.9		49.6		5.3		2.3		10.7%		6.0%		-		6.0%
Total		$ 159.3		$ 153.6		$ 5.7		$ 8.3		3.7%		(1.7)%		$ (3.1)		0.3%
(a) Increase in third quarter 2008 net sales due to currency translation is calculated by subtracting (i) an amount equal to net sales for the third quarter of 2007 from (ii) net sales for the third quarter of 2007 at the applicable average foreign currency exchange rate for the third quarter of 2008.
(b) Change in the third quarter 2008 net sales due to currency effect on pricing relates to sales prices indexed in U.S. Dollars by certain non-U.S. operations and is calculated based on the difference in the exchange rate from the time of pricing commitment to the customer and the point at which the sale transaction is recorded.

CLOTHING SEGMENT HIGHLIGHTS

• Clothing segment sales increased $0.4 million or 0.4% to $104.4 million from $104.0 million in the year-ago quarter. The current quarter benefited from favorable currency effects of $6.0 million as well as from increased sales in Asia-Pacific. The increase was partially offset by an unfavorable currency impact on pricing, and decreased sales in North America and Europe. Excluding the effects of currency, net sales decreased approximately 2.4%.
• Overall pricing levels in the clothing segment decreased approximately 1.5% during the quarter, compared to the prior-year period.
• Clothing segment earnings for the quarter increased 42% to $39.5 million for the 2008 quarter, compared to the prior-year quarter driven heavily by the positive effect of the pension and retiree medical program changes we implemented.

ROLL COVERS SEGMENT HIGHLIGHTS

• Roll covers segment sales increased 10.7% to $54.9 million from $49.6 million in the 2007 quarter. The increase is partially the result of $2.3 million in favorable currency effects from non-U.S. Dollar sales, and sales from our Chinese facilities acquired in the 2007 fourth quarter, and increased roll cover sales in North America.
• Overall pricing levels in the roll covers segment decreased by less than 1% in the third quarter, compared to the prior year period.
• Roll covers segment earnings for the quarter increased 26.0% to $16.5 million for the 2008 quarter, compared to the prior-year quarter benefiting from the pension and retiree medical program changes we implemented.

CONFERENCE CALL

The Company plans to hold a conference call to discuss these results tomorrow morning:

Date:		Tuesday, November 11, 2008
Start Time:		8:00 a.m. Eastern Time
Domestic Dial-In:		+1-800-240-8621
International Dial-In:		+1-303-262-2141

To participate on the call, please dial in at least 10 minutes prior to the scheduled start.

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 and Adjusted EBITDA, to assist in evaluating liquidity and financial performance, specifically in evaluating the Company's ability to service indebtedness and to fund ongoing capital expenditures. The Company's credit facility includes covenants based upon Adjusted EBITDA. If Adjusted EBITDA declines below certain levels, the Company could go into default under the credit facility or be required to prepay the credit facility. Neither Adjusted EBITDA nor EBITDA should be considered in isolation or as a substitute for net cash provided by operating activities (as determined in accordance with GAAP) or income 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 below. The information in this press release should be read in conjunction with the financial statements and footnotes contained in our documents to be filed with the Securities and Exchange Commission.

About Xerium Technologies

Xerium Technologies, Inc. (NYSE: XRM) is a leading global manufacturer and supplier of two types of consumable 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, 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 35 manufacturing facilities in 15 countries around the world, Xerium has approximately 3,700 employees.

FORWARD-LOOKING STATEMENTS

This press contains forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," or "continue" or the negative of these terms or other comparable terminology. Undue reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements. Factors that could materially affect our actual results, levels of activity, performance or achievements include the following items: (i) our revenues and profitability could be adversely affected by fluctuations in currency exchange rates; (ii) our profitability would be reduced by a decline in the prices of our products; (iii) our profitability could be adversely affected by fluctuations in interest rates; (iv) we may not be able to develop and market new products successfully or we may not be successful in competing against new technologies developed by competitors; (v) our credit facility contains restrictive covenants, including covenants requiring compliance with minimum interest coverage and fixed charge coverage ratios and maximum leverage ratios, that will require us to improve our performance over time in order to comply therewith; (vi) we may have insufficient cash to fund growth and unexpected cash needs after satisfying our debt service obligations due to our high degree of leverage and significant debt service obligations; (vii) we are subject to the risk of weaker economic conditions in the locations around the world where we conduct business, including without limitation the current turmoil in the credit markets and the impact of the current global economic crisis on the paper industry; (viii) we may be required to incur significant costs to reorganize our operations in response to market changes in the paper industry; (ix) we are subject to the risk of terrorist attacks or an outbreak or escalation of any insurrection or armed conflict involving the United States or any other country in which we conduct business, or any other national or international calamity; (x) we are subject to any future changes in government regulation; (xi) we are subject to any changes in U.S. or foreign government policies, laws and practices regarding the repatriation of funds or taxes and (xii) those other risks described under the heading "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2008 filed with the Securities and Exchange Commission and subsequent 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. 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.

Xerium Technologies, Inc.
Condensed Consolidated Balance Sheets--(Unaudited)
(dollars in thousands, except per share data)
		September 30, 2008				December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents		$	18,449			$	24,218
Accounts receivable (net of allowance for doubtful accounts of $10,392 at September 30, 2008 and $5,367 at December 31, 2007)			97,732				113,256
Inventories			96,245				113,136
Prepaid expenses			6,712				6,287
Other current assets			16,428				29,441
Total current assets			235,566				286,338
Property and equipment, net			400,316				421,470
Goodwill			156,027				159,892
Intangible assets			34,168				17,381
Other assets			6,111				6,360
Total assets		$	832,188			$	891,441
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable		$	8			$	1,676
Accounts payable			39,968				44,842
Accrued expenses			78,961				61,070
Current maturities of long-term debt			20,388				19,253
Long-term debt classified as current			-				641,179
Total current liabilities			139,325				768,020
Long-term debt, net of current maturities and long-term debt classified as current			609,241				4,693
Deferred and long-term taxes			13,202				23,114
Pension, other postretirement and postemployment obligations			54,189				90,749
Other long-term liabilities			5,532				5,917
Commitments and contingencies
Stockholders' equity (deficit)
Preferred stock, $0.01 par value, 1,000,000 shares authorized; no shares outstanding as of September 30, 2008 and December 31, 2007			-				-
Common stock, $0.01 par value, 150,000,000 shares authorized; 46,173,921 and 46,028,003 shares outstanding as of September 30, 2008 and December 31, 2007, respectively			462				460
Paid-in capital			216,860				216,360
Accumulated deficit			(214,566	)			(245,511	)
Accumulated other comprehensive income			7,943				27,639
Total stockholders' equity (deficit)			10,699				(1,052	)
Total liabilities and stockholders' equity (deficit)		$	832,188			$	891,441

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Xerium Technologies, Inc.
Condensed Consolidated Income Statements - (Unaudited)
(dollars in thousands, except per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
			2008				2007

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