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Ferro Corporation (FOE, THE "COMPANY") today announced net sales
of $415 million for the three-month period ended September 30, 2012,
compared with net sales of $546 million in the third quarter of 2011.
The Company recorded a net loss attributable to common shareholders of
$316 million, or $3.66 per diluted share, in the 2012 third quarter,
compared with net income attributable to common shareholders of $19.3
million, or $0.22 per diluted share, in the prior-year quarter. The
adjusted net loss attributable to common shareholders, excluding special
charges, was $1.9 million, or $0.02 per diluted share, compared with net
income attributable to common shareholders of $20.9 million, or $0.24
per diluted share, in the third quarter of 2011.
Restructuring and impairment charges of $199 million were recorded
during the third quarter. The charges included a $147 million impairment
of goodwill associated with the Electronic Materials segment and a $41
million impairment of certain property, plant and equipment primarily
related to a reduced outlook in the Company’s solar pastes business in
the Electronic Materials segment. An impairment charge of $11 million
was also recorded to reduce the value of properties and buildings
related to manufacturing sites that were closed as part of restructuring
initiatives executed in prior years. In addition, special charges of
$5.8 million were included in cost of goods sold primarily related to
write-downs of solar pastes inventories and residual costs at closed
manufacturing sites involved in earlier restructuring initiatives.
Special charges of $3.2 million were included in selling, general and
administrative expenses primarily related to an increased reserve for
other tax assets and residual expenses at sites closed as part of
earlier restructuring initiatives. In addition, third-quarter results
were impacted by an increased reserve on deferred tax assets that
increased income tax expense by approximately $112 million. A
reconciliation of reported to adjusted results excluding special charges
is available in the supplementary financial data included in this press
release.
The Company announced on October 9, 2012 that it is exploring strategic
options for its solar pastes business in order to eliminate the ongoing
negative impact from that business on earnings and cash flow. The
decision was in response to a significant contraction in the worldwide
market for solar pastes and insufficient progress in the qualification
of the Company’s products at large solar cell producers.
"We are taking decisive action to improve our future profitability and
build shareholder value. Our management team is focused on determining
the best options for the solar pastes business, and we intend to make
and execute our decisions quickly. In addition, we are taking actions in
our worldwide operations--including business process improvements and
organizational changes--in order to reduce annual operating expenses by
$30 million over the next two years," said Chairman, President and Chief
Executive Officer James F. Kirsch. "We are analyzing further capacity
consolidation, particularly in Europe, due to the weak economic
conditions in the region. As a result of these initiatives, we are
targeting worldwide headcount reductions of approximately 10 percent
over the next two years."
2012 Third-Quarter Results
Net sales for the three months ended September 30, 2012, were $415
million, a decline of 24 percent from net sales of $546 million in the
third quarter of 2011. Sales declined in all segments compared with the
prior-year quarter. Reduced sales of Electronic Materials products,
including precious metal sales, and reduced customer demand in Europe
due to a weaker economic climate were the primary contributors to the
decline in net sales. Reduced demand for conductive pastes used in solar
cell applications, metal powders used in a variety of electronic
products, and ceria-based surface finishing materials resulted in a $90
million decline in sales for the Electronic Materials segment, including
a $59 million decline in sales of precious metals due to reduced volume
and lower silver prices.
Gross profit was $62 million, or 15.0% of net sales, during the 2012
third quarter, compared with $104 million or 19.0% of net sales during
the prior-year quarter. Excluding special charges, gross profit was
18.0% of sales excluding precious metals during the quarter, compared
with 23.4% in the 2011 third quarter. The primary driver of the decline
in gross profit dollars was lower sales volume in the Electronic
Materials segment. During the 2012 third quarter, gross profit was
reduced by charges of $5.8 million, primarily related to inventory
write-downs of solar pastes in the Electronic Materials segment and
residual costs at manufacturing sites closed as part of earlier
restructuring initiatives. Gross profit was reduced by charges of $0.7
million during the third quarter of 2011, due to residual costs at
closed manufacturing sites.
Selling, general and administrative ("SG&A") expenses were $65 million
during the 2012 third quarter compared with $66 million in the
prior-year quarter. SG&A expenses declined primarily due to lower
incentive compensation expense. Higher special charges and increased
reserves for bad debt partially offset the decline in SG&A expenses.
SG&A expenses during the quarter included special charges of $3.2
million, primarily related to an increased reserve for other tax assets
and residual expenses at sites closed as a part of earlier restructuring
initiatives. During the third quarter of 2011, SG&A expense included
$0.8 million in charges, primarily related to sites closed during
prior-period restructuring actions.
During the third quarter of 2012, the Company elected to change its
method of recognizing defined benefit pension and other postretirement
benefit expenses. Under the new method, actuarial gains and losses will
be recognized in operating results in the year in which the gains or
losses occur. Prior-period results shown in this press release have been
adjusted to apply the new method retrospectively.
Interest expense was $7.1 million during the 2012 third quarter, little
changed from the prior-year quarter. Compared with the prior-year
quarter, average interest rates paid on borrowings were slightly higher.
The impact of higher average interest rates was largely offset by lower
average borrowings during the quarter.
Income tax expense was $105 million during the 2012 third quarter.
During the quarter, the Company recorded a reserve on its deferred tax
assets which resulted in a $112 million increase in income tax expense.
The net deferred tax assets, to which the valuation allowance was
applied, are available for use in future periods. The valuation
allowance that was recorded against the net deferred tax assets will be
reversed when the assets are utilized or when the Company determines
that these assets are likely to be realized.
The net loss attributable to common shareholders for the 2012 third
quarter was $316 million, or $3.66 per diluted share, compared with net
income attributable to common shareholders of $19.3 million, or $0.22
per diluted share, in the third quarter of 2011. The adjusted net loss
attributable to common shareholders for the 2012 third quarter was $0.02
per diluted share, excluding special charges, compared with adjusted
earnings of $0.24 per diluted share in the third quarter of 2011. A
reconciliation of reported to adjusted results excluding special charges
is available in the supplementary financial data included in this press
release.
The Company has estimated that the negative impact on adjusted earnings
from its solar pastes business was $0.04 per diluted share during the
2012 third quarter and $0.09 per diluted share during the first nine
months of 2012. During 2011, the solar pastes business contributed
income of approximately $0.04 per diluted share in the third quarter and
$0.22 per diluted share during the first nine months of the year. The
estimated per share loss or income attributed to solar pastes excludes
allocated corporate expenses for all periods.
Cash generated by operating activities was $14 million during the 2012
third quarter compared with $3 million in the prior-year quarter. The
cash generation during the quarter was driven by reduced net working
capital (inventories plus accounts receivable less accounts payable).
Total debt declined to $337 million at September 30, 2012 from $342
million on June 30, 2012.
2012 Outlook
The Company expects 2012 sales, excluding precious metal sales, to be
down 8% to 10% compared with 2011, including the negative impact of
lower forecasted foreign exchange rates. Sales of precious metals are
expected to decline due to lower average prices and lower volume. The
sales outlook assumes modest economic growth in all regions except in
Europe where economic activity is expected to continue to decline
compared with prior-year periods.
Based on the Company’s current view of worldwide economic conditions,
adjusted earnings in 2012 are expected to be in the range of $0.07 to
$0.12 per diluted share. This forecast is unchanged from the forecast
provided by the Company on October 9, 2012. The forecast includes an
expected loss of approximately $0.14 to $0.17 per share related to the
Company’s solar pastes business.
Non-GAAP Measures
Adjusted earnings per share is equal to income (loss) before taxes,
restructuring and impairment charges, and other special charges,
adjusted for a normalized 36 percent tax rate that is consistent with
the U.S. statutory corporate income tax rate, and divided by the average
number of diluted shares outstanding. Ferro believes this data provides
investors with additional useful information on the underlying
operations of the business and enables period-to-period comparability of
financial performance.
Conference Call
The Company will host a conference call to discuss its third-quarter
financial results, its view of general business conditions and its
current outlook for 2012 on Tuesday, October 30, 2012, at 10:00 a.m.
Eastern time. To participate in the call, dial 800-926-9795 if calling
from the United States or Canada, or dial 212-231-2910 if calling from
outside North America. Please call approximately 10 minutes before the
conference call is scheduled to begin.
An audio replay of the call will be available from noon Eastern time on
October 30 through noon Eastern time on November 6. To access the
replay, dial 800-633-8284 (toll-free) if calling from the United States
or Canada, or dial 402-977-9140 if calling from outside North America.
Use the program ID #21608706 to access the audio replay.
The conference call also will be broadcast live over the Internet and
will be available for replay through March 31, 2013. The live broadcast
and replay can be accessed through the Investor Information portion of
the Company’s Web site at www.ferro.com.
A podcast of the conference call will also be available on the Company’s
Web site.
About Ferro Corporation
Ferro Corporation (http://www.ferro.com)
is a leading global supplier of technology-based performance materials
for manufacturers. Ferro materials enhance the performance of products
in a variety of end markets, including electronics, solar energy,
telecommunications, pharmaceuticals, building and renovation,
appliances, automotive, household furnishings, and industrial products.
Headquartered in Mayfield Heights, Ohio, the Company has approximately
5,100 employees globally and reported 2011 sales of $2.2 billion.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking
statements" within the meaning of Federal securities laws. These
statements are subject to a variety of uncertainties, unknown risks and
other factors concerning the Company’s operations and business
environment. Important factors that could cause actual results to differ
materially from those suggested by these forward-looking statements and
that could adversely affect the Company’s future financial performance
include the following:
--
demand in the industries into which Ferro sells its products may be
unpredictable, cyclical or heavily influenced by consumer spending;
--
uncertainty in the development of the solar energy market, and Ferro’s
ability to successfully implement strategic options for its solar
pastes business;
--
restrictive covenants in the Company’s credit facilities could affect
its strategic initiatives and liquidity;
--
Ferro’s ability to access capital markets, borrowings, or financial
transactions;
--
the effectiveness of the Company’s efforts to improve operating
margins through sales growth, price increases, productivity gains, and
improved purchasing techniques;
--
Ferro’s ability to successfully implement and/or administer its
restructuring and cost reduction programs and produce the desired
results;
--
implementation of new business processes and information systems;
--
the availability of reliable sources of energy and raw materials at a
reasonable cost;
--
currency conversion rates and economic, social, regulatory, and
political conditions around the world;
--
Ferro’s presence in the Asia-Pacific region where it can be difficult
to compete lawfully;
--
increasingly aggressive domestic and foreign governmental regulations
on hazardous materials and regulations affecting health, safety and
the environment;
--
Ferro’s ability to successfully introduce new products;
--
sale of products into highly regulated industries;
--
limited or no redundancy for certain of the Company’s manufacturing
facilities and possible interruption of operations at those facilities;
--
Ferro’s ability to complete future acquisitions or successfully
integrate future acquisitions;
--
the impact of the Company’s performance on its ability to utilize
significant deferred tax assets;
--
competitive factors, including intense price competition;
--
Ferro’s ability to protect its intellectual property or to
successfully resolve claims of infringement brought against the
Company;
--
the impact of operating hazards and investments made in order to meet
stringent environmental, health and safety regulations;
--
stringent labor and employment laws and relationships with the
Company’s employees;
--
the impact of requirements to fund employee benefit costs, especially
post-retirement costs;
--
the impact of interruption, damage to, failure, or compromise of the
Company’s information systems;
--
manufacture and sale of products into the pharmaceutical industry;
--
exposure to lawsuits in the normal course of business;
--
risks and uncertainties associated with intangible assets, including
the amount of related impairment and other charges;
--
Ferro’s borrowing costs could be affected adversely by interest rate
increases;
--
liens on the Company’s assets by its lenders affect its ability to
dispose of property and businesses;
--
Ferro may not pay dividends on its common stock in the foreseeable
future; and
--
other factors affecting the Company’s business that are beyond its
control, including disasters, accidents, and governmental actions.
The risks and uncertainties identified above are not the only risks the
Company faces. Additional risks and uncertainties not presently known to
the Company or that it currently believes to be immaterial also may
adversely affect the Company. Should any known or unknown risks and
uncertainties develop into actual events, these developments could have
material adverse effects on Ferro’s business, financial condition and
results of operations.
This release contains time-sensitive information that reflects
management’s best analysis only as of the date of this release. The
Company does not undertake any obligation to publicly update or revise
any forward-looking statements to reflect future events, information or
circumstances that arise after the date of this release. Additional
information regarding these risks can be found in the Ferro Corporation
Annual Report on Form 10-K for the period ended December 31, 2011.
Ferro Corporation and Subsidiaries
Consolidated
Statements of Net Income (Unaudited)
Three months ended Nine months ended
September 30, September 30,
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(Dollars in thousands, except share and per share amounts) 2012 As 2012 As
adjusted adjusted
2011 2011
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Net sales $414,840 $546,114 $1,362,735 $1,713,097
Cost of sales 352,501 442,304 1,124,228 1,374,614
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Gross profit 62,339 103,810 238,507 338,483
Selling, general and administrative expenses 65,109 65,766 206,306 210,153
Restructuring and impairment charges 198,790 869 203,829 4,044
Other expense (income):
Interest expense 7,101 7,030 20,689 21,208
Interest earned (57) (50) (192) (193)
Foreign currency losses, net 869 1,726 792 4,049
Miscellaneous expense, net 792 64 3,027 458
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(Loss) income before income taxes (210,265) 28,405 (195,944) 98,764
Income tax expense 105,473 9,057 113,618 32,825
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Net (loss) income (315,738) 19,348 (309,562) 65,939
Less: Net income attributable to noncontrolling interests 376 40 830 573
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Net (loss) income attributable to Ferro Corporation (316,114) 19,308 (310,392) 65,366
Dividends on preferred stock 0 0 0 (165)
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Net (loss) income attributable to Ferro Corporation common $(316,114) $19,308 $(310,392) $65,201
shareholders
========== ========== ========== ==========
(Loss) earnings per share attributable to Ferro Corporation common
shareholders:
Basic (loss) earnings per share $(3.66) $0.22 $(3.60) $0.76
Diluted (loss) earnings per share (3.66) 0.22 (3.60) 0.75
Shares outstanding:
Weighted-average basic shares 86,295,512 86,169,195 86,274,082 86,100,989
Weighted-average diluted shares 86,295,512 86,796,334 86,274,082 86,967,743
End-of-period basic shares 86,538,312 86,570,567 86,538,312 86,570,567
Ferro Corporation and Subsidiaries
Segment Net
Sales and Segment Income (Loss) (Unaudited)
(Dollars in thousands) Three months ended Nine months ended
September 30, September 30,
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2012 As 2012 As
adjusted adjusted
2011 2011
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Segment Net Sales
Electronic Materials $66,188 $156,081 $228,625 $538,790
Performance Coatings 137,229 153,365 447,058 453,546
Color and Glass Perf. Materials 84,262 100,525 285,586 306,806
Polymer Additives 79,881 85,634 251,055 262,767
Specialty Plastics 41,305 43,606 132,512 132,745
Pharmaceuticals 5,975 6,903 17,899 18,443
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Total Segment Net Sales $414,840 $546,114 $1,362,735 $1,713,097
========== ======== ========== ==========
Segment Income (Loss)
Electronic Materials $(6,311) $16,463 $(10,968) $69,617
Performance Coatings 3,210 11,069 20,968 27,913
Color and Glass Perf. Materials 5,636 8,365 24,102 28,133
Polymer Additives 5,398 4,252 13,903 15,347
Specialty Plastics 3,728 2,717 12,182 7,416
Pharmaceuticals 85 1,254 1,892 3,525
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Total Segment Income 11,746 44,120 62,079 151,951
Unallocated corporate expenses 14,516 6,076 29,878 23,621
Restructuring and impairment charges 198,790 869 203,829 4,044
Interest expense 7,101 7,030 20,689 21,208
Other expense, net 1,604 1,740 3,627 4,314
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(Loss) income before income taxes $(210,265) $28,405 $(195,944) $98,764
========== ======== ========== ==========
Ferro Corporation and Subsidiaries
Consolidated
Balance Sheets (Unaudited)
As adjusted
(Dollars in thousands) September 30, December 31,
2012 2011
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Assets
Current assets:
Cash and cash equivalents $24,817 $22,991
Accounts receivable, net 322,620 306,775
Inventories 212,014 228,813
Deferred income taxes 6,419 17,395
Other receivables 37,338 37,839
Other current assets 12,746 17,086
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Total current assets 615,954 630,899
Property, plant and equipment, net 331,894 379,336
Goodwill 68,952 215,601
Amortizable intangible assets, net 14,086 11,056
Deferred income taxes 16,835 117,658
Other non-current assets 71,913 86,101
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Total assets $1,119,634 $1,440,651
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Liabilities and Equity
Current liabilities:
Loans payable and current portion of long-term debt $67,180 $11,241
Accounts payable 196,977 214,460
Accrued payrolls 31,564 31,055
Accrued expenses and other current liabilities 69,508 67,878
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Total current liabilities 365,229 324,634
Long-term debt, less current portion 270,132 298,082
Postretirement and pension liabilities 190,283 215,732
Other non-current liabilities 19,846 19,709
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Total liabilities 845,490 858,157
Shareholders’ equity 263,447 572,262
Noncontrolling interests 10,697 10,232
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Total liabilities and equity $1,119,634 $1,440,651
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Ferro Corporation and Subsidiaries
Consolidated
Statements of Cash Flows (Unaudited)
(Dollars in thousands) Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2012 As 2012 As
adjusted adjusted
2011 2011
---------- --------- ---------- ---------
Cash flows from operating activities
Net (loss) income $(315,738) $19,348 $(309,562) $65,939
Impairment and reserve charges 311,084 0 311,084 0
Depreciation and amortization 13,727 15,674 41,734 48,523
Precious metals deposits 0 0 0 28,086
Accounts receivable 27,617 4,807 (23,006) (63,733)
Inventories 7,060 1,544 15,637 (41,550)
Accounts payable (19,505) (23,367) (4,254) 3,989
(317) (22,244) 7,814 (36,365)
Other changes in current assets and liabilities, net
Other adjustments, net (9,570) 7,626 (19,911) (22,259)
---------- --------- ---------- ---------
14,358 3,388 19,536 (17,370)
Net cash provided by (used for) operating activities
Cash flows from investing activities
(10,737) (20,106) (46,245) (51,923)
Capital expenditures for property, plant and equipment
Proceeds from sale of assets 1,194 0 2,386 2,374
Other investing activities (340) 0 96 193
---------- --------- ---------- ---------
(9,883) (20,106) (43,763) (49,356)
Net cash used for investing activities
Cash flow from financing activities
Net borrowings under loans payable (12,819) (2,074) 22,087 55,496
Proceeds from long-term debt 110,155 147,955 323,151 530,174
Principal payments on long-term debt (104,752) (135,294) (319,926) (517,065)
0 0 0 (9,427)
Redemption of convertible preferred stock
Cash dividends paid 0 0 0 (165)
Other financing activities 1,820 676 760 (180)
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(5,596) 11,263 26,072 58,833
Net cash (used for) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents 571 (13) (19) 758
---------- --------- ---------- ---------
(Decrease) increase in cash and cash equivalents (550) (5,468) 1,826 (7,135)
Cash and cash equivalents at beginning of period 25,367 27,368 22,991 29,035
---------- --------- ---------- ---------
Cash and cash equivalents at end of period $24,817 $21,900 $24,817 $21,900
========== ========= ========== =========
Cash paid during the period for:
Interest $12,147 $12,045 $25,343 $24,620
Income taxes 1,032 5,931 3,130 20,646
Ferro Corporation and Subsidiaries
Supplemental
Information
Reconciliation of Adjusted Earnings to Reported Earnings
for
the Three Months Ended September 30 (Unaudited)
Three months ended September 30, Three months ended September 30,
2012 2011
--------------------------- ----------------------------
(Dollars in thousands, except per share amounts) As Adjust- Non- As Adjust- Non-
reported ments GAAP adjusted ments GAAP
---------- --------- -------- -------- ------- -------------
Net sales $414,840 $414,840 $546,114 $546,114
Cost of sales 352,501 $(5,813) 346,688 442,304 $(712) 441,592
---------- -------- -------- -------------
Gross profit 62,339 68,152 103,810 104,522
Selling, general and administrative expenses 65,109 (3,245) 61,864 65,766 (835) 64,931
Restructuring and impairment charges 198,790 (198,790) 0 869 (869) 0
Other expense, net 1,604 1,604 1,740 1,740
---------- -------- -------- -------------
(Loss) earnings before interest, taxes and noncontrolling interest (203,164) 4,684 35,435 37,851
Interest expense 7,101 7,101 7,030 7,030
---------- -------- -------- -------------
Total adjustments (207,848) (2,416)
(Loss) income before taxes (210,265) (2,417) 28,405 30,821
105,473 9,057
Income tax expense
(870) 9,863
Income tax (benefit) expense(1)
-------- -------------
Net (loss) income (315,738) (1,547) 19,348 20,958
Less: Net income attributable to noncontrolling interest 376 376 40 40
---------- -------- -------- -------------
Net (loss) income attributable to Ferro (316,114) (1,923) 19,308 20,918
Dividends on preferred stock 0 0 0 0
---------- -------- -------- -------------
Net (loss) income attributable to Ferro common shareholders $(316,114) $(1,923) $19,308 $20,918
========== ======== ======== =============
Diluted (loss) earnings per share $(3.66) $(0.02) $0.22 $0.24
(1) 2011 tax rate for the calculation of non-GAAP earnings was
32%, consistent with the Company’s 2011 expectations for future
effective tax rates, excluding discrete items. The Company has adjusted
the effective tax rate used in 2012 to 36% to reflect an updated
analysis of future effective tax rates, excluding discrete items. The
effective rate that is applied to 2012 adjusted earnings is consistent
with the U.S. statutory income tax rate.
It should be noted that adjusted earnings is a financial measure not
required by, or presented in accordance with, accounting principles
generally accepted in the United States (U.S. GAAP). The adjusted
earnings presented here exclude certain special charges, including
restructuring and impairment charges, charges related to debt
refinancing, and other charges that are not related to production of
products for sale. Ferro believes this data provides investors with
additional useful information on the underlying operations of the
business and enables period-to-period comparability of financial
performance. In addition, these measures are used in the calculation of
certain incentive compensation programs for selected employees.
Ferro Corporation and Subsidiaries
Supplemental
Information
Reconciliation of Adjusted Earnings to Reported Earnings
for
the Nine Months Ended September 30 (Unaudited)
Nine months ended September 30, 2012 Nine months ended September 30, 2011
-------------------------------- --------------------------------
(Dollars in thousands, except per share amounts) As Adjust- Non- As Adjust- Non-
reported ments GAAP adjusted ments GAAP
---------- --------- ------------- ---------- -------- --------------
Net sales $1,362,735 $1,362,735 $1,713,097 $1,713,097
Cost of sales 1,124,228 $(7,204) 1,117,024 1,374,614 $(3,624) 1,370,990
---------- ------------- ---------- --------------
Gross profit 238,507 245,711 338,483 342,107
Selling, general and administrative expenses 206,306 (5,969) 200,337 210,153 (3,340) 206,813
Restructuring and impairment charges 203,829 (203,829) 0 4,044 (4,044) 0
Other expense, net 3,627 (808) 2,819 4,314 4,314
---------- ------------- ---------- --------------
(Loss) earnings before interest, taxes and noncontrolling interest (175,255) 42,555 119,972 130,980
Interest expense 20,689 20,689 21,208 21,208
---------- ------------- ---------- --------------
Total adjustments (217,810) (11,008)
Income before taxes (195,944) 21,866 98,764 109,772
113,618 32,825
Income tax expense
7,872 35,127
Income tax expense(1)
------------- --------------
Net (loss) income (309,562) 13,994 65,939 74,645
Less: Net income attributable to noncontrolling interest 830 830 573 573
---------- ------------- ---------- --------------
Net (loss) income attributable to Ferro (310,392) 13,164 65,366 74,072
Dividends on preferred stock 0 0 (165) (165)
---------- ------------- ---------- --------------
Net (loss) income attributable to Ferro common shareholders $(310,392) $13,164 $65,201 $73,907
========== ============= ========== ==============
Diluted (loss) earnings per share $(3.60) $0.15 $0.75 $0.85
(1) 2011 tax rate for the calculation of non-GAAP earnings was
32%, consistent with the Company’s 2011 expectations for future
effective tax rates, excluding discrete items. The Company has adjusted
the effective tax rate used in 2012 to 36% to reflect an updated
analysis of future effective tax rates, excluding discrete items. The
effective rate that is applied to 2012 adjusted earnings is consistent
with the U.S. statutory income tax rate.
It should be noted that adjusted earnings is a financial measure not
required by, or presented in accordance with, accounting principles
generally accepted in the United States (U.S. GAAP). The adjusted
earnings presented here exclude certain special charges, including
restructuring and impairment charges, charges related to debt
refinancing, and other charges that are not related to production of
products for sale. Ferro believes this data provides investors with
additional useful information on the underlying operations of the
business and enables period-to-period comparability of financial
performance. In addition, these measures are used in the calculation of
certain incentive compensation programs for selected employees.
Ferro Corporation and Subsidiaries
Supplemental
Information
Segment Net Sales Excluding Precious Metals and
Reconciliation
of Sales Excluding Precious Metals to Net Sales (Unaudited)
(Dollars in thousands) Three months ended Nine months ended
September 30, September 30,
---------------- --------------------
2012 2011 2012 2011
-------- -------- ---------- ----------
Electronic Materials $35,264 $65,736 $116,944 $216,548
Performance Coatings 137,229 153,365 447,058 453,546
Color and Glass Perf. Materials 79,224 91,173 264,423 280,514
Polymer Additives 79,881 85,634 251,055 262,767
Specialty Plastics 41,305 43,606 132,512 132,745
Pharmaceuticals 5,975 6,903 17,899 18,443
-------- -------- ---------- ----------
Total segment sales excluding precious metals 378,878 446,417 1,229,891 1,364,563
Sales of precious metals 35,962 99,697 132,844 348,534
-------- -------- ---------- ----------
Total net sales $414,840 $546,114 $1,362,735 $1,713,097
======== ======== ========== ==========
It should be noted that segment net sales excluding precious metals is a
financial measure not required by, or presented in accordance with,
accounting principles generally accepted in the United States (U.S.
GAAP). The sales are presented here to exclude the impact of volatile
precious metal raw material costs. The precious metal raw material costs
are generally passed through directly to customers with minimal margin.
Ferro believes this data provides investors with additional useful
information on the underlying operations of the business and enables
period-to-period comparability of financial performance.
SOURCE: Ferro Corporation
Ferro Corporation
Investor Contact:
David Longfellow, Director, Investor Relations, 216-875-5488
E-mail: david.longfellow@ferro.com
OR
Media Contact:
Mary Abood, Director, Corporate Communications, 216-875-5401
E-mail: mary.abood@ferro.com
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