Ceramic Industry News / Glass

Ferro Initiates Restructuring Following Challenging 2012

Ferro Corp. recently reported financial results for the fourth quarter and full year ended December 31, 2012. Net sales for the fourth quarter of 2012 were $406 million, compared with $443 million in the fourth quarter of 2011.

The company’s six segments reported lower sales in the quarter compared to the prior year. Precious metal sales accounted for 29% of the sales decline, or $11 million. The largest sales decline, on a value-added basis (excluding the impact of precious metal sales), was in the Electronic Materials segment, where net sales declined 22% primarily due to reductions in demand for solar paste products and precious metal powders and flakes for other electronics applications. Weakness in Europe, particularly in southern Europe, reportedly contributed to lower sales, principally in the Performance Coatings and Color and Glass Performance Materials segments.

For the full year of 2012, the company reported a net loss attributable to common shareholders of $374 million. In comparison, for the full year of 2011, net income attributable to common shareholders was $4 million.

Adjusted for charges, income before income taxes was $14 million for 2012, compared with $103 million for 2011. The decrease was primarily attributable to the significant decline in the company’s Electronic Materials segment, which reported a loss of $16 million in 2012 vs. income of $68 million in 2011, as well as continued weakness in the Eurozone.

William B. Lawrence, acting chairman of the Ferro Board of Directors, said, “Prior to 2012, Ferro was pursuing a growth strategy, with the expectations that the Electronic Materials business, led by the solar pastes product line, and portions of the Color and Glass business, together would deliver organic revenue growth significantly greater than GDP. In 2012, it became apparent that the strategy needed to be changed. Accordingly, the Board of Directors implemented several management changes and refocused the strategic vision more strongly on value creation.

“We are restructuring certain existing infrastructure alignments and refocusing management’s efforts to improve profitability, maximize cash flow and enhance return on investment. The board and management team are focused on implementing this plan, with actions targeted at reducing costs by more than $50 million over the next two years.”

For additional information, visit www.ferro.com.

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