Page 10 of 15 – SEC Filing
| CUSIP No. 98416J118 | 13D | Page 10 of 15 |
Item 1. Security and Issuer.
This Statement of Beneficial
Ownership on Schedule 13D (the “Schedule 13D”) relates to the shares of common stock, $0.001 par value per share (the
“Common Stock”) of Xerium Technologies, Inc., a Delaware corporation (the “Issuer”). The Issuer maintains
its principal executive office at 14101 Capital Boulevard, Youngsville, North Carolina 27596.
Item 2. Identity and Background.
This Schedule 13D is filed by the Wynnefield
Reporting Persons.
(a), (b), (c) and
(f). The “Wynnefield Reporting Persons” are Wynnefield Partners Small Cap Value, L.P. (“Wynnefield Partners”),
Wynnefield Partners Small Cap Value, L.P. I (“Wynnefield Partners I”), Wynnefield Small Cap Value Offshore Fund, Ltd.
(“Wynnefield Offshore”), Wynnefield Capital, Inc. Profit Sharing & Money Purchase Plan (“Plan”), Wynnefield
Capital Management, LLC (“WCM”), Wynnefield Capital, Inc. (“WCI”), Nelson Obus and Joshua H. Landes. The
Wynnefield Reporting Persons that are entities, are each separate and distinct entities with different beneficial owners (whether
designated as limited partners or stockholders).
WCM, a New York limited
liability company, is the general partner of Wynnefield Partners I and Wynnefield Partners, each a private investment company organized
as limited partnerships under the laws of the State of Delaware. Nelson Obus and Joshua H. Landes are the managing members of WCM
and the principal executive officers of WCI, the investment manager of Wynnefield Offshore, a private investment company organized
under the laws of the Cayman Islands. The Plan is an employee profit sharing plan organized under the laws of the State of Delaware.
Messrs. Obus and Landes are the co-trustees of the Plan. Messrs. Obus and Landes are citizens of the United States of America.
The business address
of the Wynnefield Reporting Persons is 450 Seventh Avenue, Suite 509, New York, New York 10123.
(d) and (e). During
the last five years, none of the Wynnefield Reporting Persons had been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or
Other Consideration.
The securities reported
in this Schedule 13D as directly beneficially owned by the Wynnefield Reporting Persons were acquired with funds of approximately
$7,009,740.00 (including brokerage commissions). All such funds were provided from the working capital or personal funds of the
Wynnefield Reporting Persons who directly beneficially own such securities.
Item 4. Purpose of the Transaction
The Wynnefield Reporting
Persons are compelled to file a 13D following an astounding chain of events that included
the release of first quarter 2017 earnings which evidenced clear signs that the challenging turnaround of the Issuer’s
operations had begun to take hold. This upbeat news was accompanied by the firing WITHOUT CAUSE of the architect of the turnaround
effort, Harold Bevis, and the installation of his replacement, Mark Staton, an individual with no apparent experience managing
a highly leveraged small capitalization industrial company. The Wynnefield Reporting Persons strongly feel that the Issuer’s
shareholders are entitled to a much more substantive explanation of this unexpected and, in the Wynnefield Reporting Persons’
view, extremely untimely action. Channeling Bert Lance, Jimmy Carter’s head of the OMB,“[I]f it ain’t broke,
don’t fix it.”
This abrupt action
was compounded by the Issuer’s Board of Director’s unethical decision to prohibit shareholders from participating in
the Q&A session on the first quarter conference call held the afternoon of May 1st. During the Q&A session following
the conference call, only sell-side analysts, interested mostly in details relating to their own earnings models, were permitted
to participate. The shareholders, the Issuer’s true owners, who have their own questions, including what was the cost to
the Issuer of the WITHOUT CAUSE termination of Mr. Bevis, were left on hold. The Wynnefield Reporting Persons regard such a policy
to be an egregious violation of shareholder rights. Such restrictions deprive Xerium’s shareholders/owners from the collective
probing of the actions of the Issuer’s management, whom are employed by these shareholders. While providing exclusive access
to sell-side analysts to ask questions during the public conference calls, Xerium then allows selective post-call access to large
shareholders through “one-on-one” conversations. The dubious approach Xerium has chosen regarding its conference call
and selective shareholder communications policy is one, in our opinion, that deserves SEC scrutiny.
