Wynnefield Upset at Firing of CEO at Xerium

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.

The Wynnefield Reporting Persons will carefully examine and evaluate the behavior and performance of Xerium and its management as it determines a future course of action.

https://www.sec.gov/Archives/edgar/data/1251565/000114420417024162/v465867_sc13d.htm


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