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Ferro Reports 2012 Second-Quarter Results

CLEVELAND--(BUSINESS WIRE)--Jul. 25, 2012-- Ferro Corporation (NYSE: FOE, the “Company”) today announced net sales of $482 million for the three-month period ended June 30, 2012, compared with net sales of $594 million in the second quarter of 2011. The Company recorded a net loss attributable to common shareholders of $2.8 million, or $0.03 per diluted share, in the 2012 second quarter, compared with net income attributable to common shareholders of $19.4 million, or $0.22 per diluted share, in the prior-year quarter. The adjusted net income attributable to common shareholders, excluding special charges, was $4.6 million, or $0.05 per diluted share, compared with $23.8 million, or $0.27 per diluted share, in the second quarter of 2011. “Ferro generated adjusted earnings of $0.05 per diluted share and $16 million of cash flow from operations in the 2012 second quarter. The business recorded sequential sales growth in the United States and Asia-Pacific compared with the first quarter of 2012. However, sales and earnings were negatively impacted by the effects of a weakening economic environment in Europe and higher than expected healthcare and pension expenses. The unexpected healthcare and pension expense reduced adjusted earnings by approximately 3 cents per share,” said Chairman, President and Chief Executive Officer James F. Kirsch. “We are taking aggressive steps to lower costs in Europe with the successful roll-out of our new management information systems platform in the region on July 1. We expect this new platform to provide the tools that will allow us to reduce future operating costs and administrative expense. In addition, we expect to move forward on staffing reductions that will lower annual costs by approximately $5 million in our European operations through consolidation of certain manufacturing and administrative resources in our Performance Coatings business.” 2012 Second-Quarter Results Net sales for the three months ended June 30, 2012, were $482 million, a decline of 19 percent from net sales of $594 million in the second quarter of 2011. Reduced sales of Electronic Materials products, including precious metal sales, largely drove the decline in consolidated net sales. In addition, reduced customer demand in Europe due to a weaker economic climate and changes in foreign currency exchange rates contributed to the decline in sales compared with the prior-year quarter. 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 $63 million decline in sales of precious metals due to reduced volume and lower silver prices. Sales declined relative to the prior-year quarter to a lesser extent in the Performance Coatings, Color and Glass Performance Materials, Polymer Additives and Specialty Plastics segments. Sales declines in these businesses were largely a result of changes in foreign currency exchange rates. Gross profit was $88 million, or 18.2% of net sales, during the 2012 second quarter, compared with $114 million or 19.3% of net sales during the prior-year quarter. Excluding special charges, gross profit was 20.7% of sales excluding precious metals during the quarter, compared with 24.3% in the 2011 second quarter. The primary driver of the decline in gross profit dollars was lower sales volume in the Electronic Materials segment. During the 2012 second quarter, gross profit was reduced by charges of $0.7 million, primarily related to residual costs at closed manufacturing sites involved in earlier restructuring initiatives. Gross profit was reduced by charges of $1.3 million during the second quarter of 2011, also due to residual costs at closed manufacturing sites. Selling, general and administrative (“SG&A”) expenses were $75 million during the 2012 second quarter compared with $74 million in the prior-year quarter. Increased pension expenses, healthcare expenses for U.S. employees and expenses related to an initiative to streamline and standardize business processes and improve management information systems contributed approximately $4.2 million to higher SG&A expenses for the quarter. These increases were partially offset by lower depreciation expense and cost containment in other discretionary SG&A spending. SG&A expenses during the quarter included special charges of $1.0 million, primarily related to expenses at sites that were closed during earlier restructuring actions and severance expenses. During the second quarter of 2011, SG&A expense included $1.4 million in charges, primarily related to sites closed during prior-period restructuring actions. Restructuring and impairment charges were $4.7 million during the 2012 second quarter, compared with $1.5 million in the prior-year quarter. Nearly all of the current-quarter charges are related to restructuring actions that are expected in the Performance Coatings business in Europe over the next three quarters. The restructuring initiative is expected to consolidate certain Performance Coatings manufacturing activities, technical service and general administrative organizations. Annual savings from these actions is expected to be approximately $5 million, beginning in 2013. Interest expense was $6.8 million during the 2012 second quarter, down from $7.4 million in the prior-year quarter. Average borrowings and interest rates were little changed from the second quarter of 2011. The decline interest expense was driven by an increase in the amount of interest expense that was capitalized. The net loss attributable to common shareholders for the 2012 second quarter was $2.8 million, or $0.03 per diluted share, compared with net income attributable to common shareholders of $19.4 million, or $0.22 per diluted share, in the second quarter of 2011. The adjusted net income attributable to common shareholders for the 2012 second quarter was $0.05 per diluted share, excluding special charges, compared with adjusted earnings of $0.27 per diluted share in the second 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. Cash generated by operating activities was $16.2 million during the 2012 second quarter compared with $7.8 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 $342 million at June 30, 2012 from $344 million on March 31, 2012. 2012 Outlook The Company expects 2012 sales, excluding precious metal pass-throughs, to be down 3% to 7% 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 decline. Based on the Company’s current view of worldwide economic conditions, adjusted earnings in 2012 are expected to be in the range of $0.15 to $0.20 per diluted share. The current adjusted earnings estimates are $0.20 to $0.25 per share below the low end of the Company’s previous guidance. The downward revision is due to lower sales expectations for the Company’s products in Europe and reduced growth expectations for Electronic Materials products during the second half of 2012. The Company’s expectations for its sales in Europe during the second half of 2012 have been lowered in response to a decline in customer orders and the expectation of a continued decline in overall economic activity in the region. Sales of Electronic Material products, including solar pastes and metal powders, are expected to be modestly higher in the 2012 second half compared with the first half of the year. Expectations for the rate of sales growth for these products have been reduced compared with the Company’s previous estimates. The Company has limited visibility regarding the strength and timing of a recovery in demand for solar pastes and the pace of customer adoption of the Company’s new paste products. The Company’s sales growth expectations for metal powders have been reduced as a result of lower customer demand forecasts. 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 tax rate that is consistent with the Company’s expected future effective tax rate excluding discrete items, and divided by the average number of common shares outstanding. The Company’s expected future effective tax rate is lower than the U.S. statutory rate because of expected earnings in foreign jurisdictions with lower tax rates. 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 second quarter financial results, its view of general business conditions and its current outlook for 2012 on Thursday, July 26, 2012, at 10:00 a.m. Eastern time. To participate in the call, dial 800-750-5849 if calling from the United States or Canada, or dial 212-231-2932 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 July 26 through noon Eastern time on August 2. 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 #21599830 to access the audio replay. The conference call also will be broadcast live over the Internet and will be available for replay through December 31, 2012. 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; 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; 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; 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’s ability to successfully implement and/or administer its restructuring programs and produce the desired results; 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 June 30, Six months ended June 30, (Dollars in thousands, except share and per share amounts) 2012   2011 2012   2011   Net sales $ 481,505 $ 593,974 $ 947,895 $ 1,166,983 Cost of sales   393,660     479,627     771,727     932,310   Gross profit 87,845 114,347 176,168 234,673   Selling, general and administrative expenses 74,645 73,548 152,330 150,366 Restructuring and impairment charges 4,728 1,545 5,039 3,175 Other expense (income): Interest expense 6,848 7,352 13,588 14,178 Interest earned (51 ) (69 ) (135 ) (143 ) Foreign currency (gains) losses, net (221 ) 1,013 (77 ) 2,323 Miscellaneous expense (income), net   1,841     (124 )   2,235     394   Income before income taxes 55 31,082 3,188 64,380 Income tax expense   2,573     11,461     4,292     21,568   Net (loss) income (2,518 ) 19,621 (1,104 ) 42,812 Less: Net income attributable to noncontrolling interests   330     232     454     533   Net (loss) income attributable to Ferro Corporation (2,848 ) 19,389 (1,558 ) 42,279 Dividends on preferred stock   0     0     0     (165 ) Net (loss) income attributable to Ferro Corporation common shareholders $ (2,848 ) $ 19,389   $ (1,558 ) $ 42,114     (Loss) earnings per share attributable to Ferro Corporation common shareholders: Basic (loss) earnings per share $ (0.03 ) $ 0.23 $ (0.02 ) $ 0.49 Diluted (loss) earnings per share (0.03 ) 0.22 (0.02 ) 0.48   Shares outstanding: Weighted-average basic shares 86,293,650 86,159,100 86,263,367 86,066,886 Weighted-average diluted shares 86,293,650 86,868,138 86,263,367 87,057,768 End-of-period basic shares 86,295,512 86,165,887 86,295,512 86,165,887     Ferro Corporation and Subsidiaries Segment Net Sales and Segment Income (Loss) (Unaudited)     (Dollars in thousands) Three months ended June 30, Six months ended June 30, 2012   2011 2012   2011 Segment Net Sales Electronic Materials $ 90,741 $ 180,362 $ 162,437 $ 382,709 Performance Coatings 157,315 163,481 309,829 300,181 Color and Glass Perf. Materials 99,889 106,476 201,324 206,281 Polymer Additives 83,450 91,271 171,174 177,133 Specialty Plastics 44,151 46,510 91,207 89,139 Pharmaceuticals   5,959   5,874   11,924     11,540 Total Segment Net Sales $ 481,505 $ 593,974 $ 947,895   $ 1,166,983   Segment Income (Loss) Electronic Materials $ 33 $ 22,406 $ (4,657 ) $ 53,154 Performance Coatings 9,699 10,497 17,758 16,844 Color and Glass Perf. Materials 10,009 10,670 18,466 19,768 Polymer Additives 1,878 4,515 8,505 11,095 Specialty Plastics 3,806 2,827 8,454 4,699 Pharmaceuticals   620   945   1,807     2,271 Total Segment Income 26,045 51,860 50,333 107,831   Unallocated corporate expenses 12,845 11,061 26,495 23,524 Restructuring and impairment charges 4,728 1,545 5,039 3,175 Interest expense 6,848 7,352 13,588 14,178 Other expense, net   1,569   820   2,023     2,574 Income before income taxes $ 55 $ 31,082 $ 3,188   $ 64,380       Ferro Corporation and Subsidiaries Consolidated Balance Sheets   (Dollars in thousands) June 30, 2012 December 31, 2011 Assets (Unaudited) (Audited) Current assets: Cash and cash equivalents $ 25,367 $ 22,991 Accounts receivable, net 353,076 306,775 Inventories 217,300 228,813 Deferred income taxes 17,277 17,395 Other receivables 32,437 37,839 Other current assets   13,715   17,086 Total current assets 659,172 630,899   Property, plant and equipment, net 367,184 379,336 Goodwill 215,693 215,601 Amortizable intangible assets, net 13,651 11,056 Deferred income taxes 114,789 117,658 Other non-current assets   87,128   86,101 Total assets $ 1,457,617 $ 1,440,651   Liabilities and Equity Current liabilities: Loans payable and current portion of long-term debt $ 45,868 $ 11,241 Accounts payable 214,195 214,460 Accrued payrolls 34,659 31,055 Accrued expenses and other current liabilities   68,246   67,878 Total current liabilities 362,968 324,634   Long-term debt, less current portion 295,844 298,082 Postretirement and pension liabilities 195,366 215,732 Other non-current liabilities   19,493   19,709 Total liabilities 873,671 858,157   Shareholders' equity 573,691 572,262 Noncontrolling interests   10,255   10,232 Total liabilities and equity $ 1,457,617 $ 1,440,651       Ferro Corporation and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)   (Dollars in thousands) Three months ended June 30, Six months ended June 30, 2012   2011 2012   2011 Cash flows from operating activities Net (loss) income $ (2,518 ) $ 19,621 $ (1,104 ) $ 42,812 Depreciation and amortization 14,128 16,620 28,007 32,849 Precious metals deposits 0 0 0 28,086 Accounts receivable (16,890 ) (18,470 ) (50,623 ) (68,540 ) Inventories 20,506 (1,203 ) 8,577 (43,094 ) Accounts payable 3,697 (6,412 ) 15,251 27,356 Other changes in current assets and liabilities, net (6,273 ) (37 ) 8,131 (14,121 ) Other adjustments, net   3,503     (2,297 )   (3,061 )   (26,106 ) Net cash provided by (used for) operating activities 16,153 7,822 5,178 (20,758 )   Cash flows from investing activities Capital expenditures for property, plant and equipment (12,929 ) (15,780 ) (35,508 ) (31,817 ) Proceeds from sale of assets 824 1,242 1,192 2,374 Other investing activities   436     193     436     193   Net cash used for investing activities (11,669 ) (14,345 ) (33,880 ) (29,250 )   Cash flow from financing activities Net borrowings under loans payable 3,222 4,626 34,906 57,570 Proceeds from long-term debt 115,078 172,542 212,996 382,219 Principal payments on long-term debt (119,501 ) (172,094 ) (215,174 ) (381,771 ) Redemption of convertible preferred stock 0 0 0 (9,427 ) Cash dividends paid 0 0 0 (165 ) Other financing activities   (620 )   (1,187 )   (1,060 )   (856 ) Net cash (used for) provided by financing activities (1,821 ) 3,887 31,668 47,570 Effect of exchange rate changes on cash and cash equivalents   (567 )   411     (590 )   771   Increase (decrease) in cash and cash equivalents 2,096 (2,225 ) 2,376 (1,667 ) Cash and cash equivalents at beginning of period   23,271     29,593     22,991     29,035   Cash and cash equivalents at end of period $ 25,367   $ 27,368   $ 25,367   $ 27,368     Cash paid during the period for: Interest $ 1,137 $ 1,035 $ 13,196 $ 12,575 Income taxes 869 7,785 2,098 14,715       Ferro Corporation and Subsidiaries Supplemental Information Reconciliation of Adjusted Earnings to Reported Earnings for the Three Months Ended June 30 (Unaudited)   Three months ended June 30, 2012 Three months ended June 30, 2011 (Dollars in thousands, except per share amounts) As Reported   Adjustments   Non- GAAP As Reported   Adjustments   Non- GAAP   Net sales $ 481,505 $ 481,505 $ 593,974 $ 593,974 Cost of sales   393,660   $ (685 )   392,975   479,627 $ (1,345 )   478,282 Gross profit 87,845 88,530 114,347 115,692   Selling, general and administrative expenses 74,645 (967 ) 73,678 73,548 (1,382 ) 72,166 Restructuring and impairment charges 4,728 (4,728 ) 0 1,545 (1,545 ) 0 Other expense, net   1,569   (808 )   761   820   820 Earnings before interest, taxes and noncontrolling interest 6,903 14,091 38,434 42,706   Interest expense   6,848       6,848   7,352     7,352 Total adjustments (7,188 ) (4,272 )   Income before taxes 55 7,243 31,082 35,354 Income tax expense 2,573 11,461 Income tax expense1     2,318     11,313 Net (loss) income (2,518 ) 4,925 19,621 24,041 Less: Net income attributable to noncontrolling interest   330     330   232   232 Net (loss) income attributable to Ferro (2,848 ) 4,595 19,389 23,809 Dividends on preferred stock   0     0   0   0 Net (loss) income attributable to Ferro common shareholders $ (2,848 ) $ 4,595 $ 19,389 $ 23,809   Diluted (loss) earnings per share $ (0.03 ) $ 0.05 $ 0.22 $ 0.27   1 2012 tax rate of 32%, consistent with the Company’s expectation for future effective tax rates, excluding discrete items. The Company’s expected future effective tax rate is lower than the U.S. statutory rate because of expected earnings in foreign jurisdictions with lower tax rates. 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 Six Months Ended June 30 (Unaudited)   Six months ended June 30, 2012 Six months ended June 30, 2011 (Dollars in thousands, except per share amounts) As Reported   Adjustments   Non- GAAP As Reported   Adjustments   Non- GAAP   Net sales $947,895 $947,895 $1,166,983 $1,166,983 Cost of sales 771,727 $(1,391) 770,336 932,310 $(2,912) 929,398 Gross profit 176,168 177,559 234,673 237,585   Selling, general and administrative expenses 152,330 (2,724) 149,606 150,366 (2,505) 147,861 Restructuring and impairment charges 5,039 (5,039) 0 3,175 (3,175) 0 Other expense, net 2,023 (808) 1,215 2,574 2,574 Earnings before interest, taxes and noncontrolling interest 16,776 26,738 78,558 87,150   Interest expense 13,588   13,588 6,826   6,826 Total adjustments (9,962) (8,592)   Income before taxes 3,188 13,150 64,380 72,972 Income tax expense 4,292 21,568 Income tax expense1   4,208   23,351 Net (loss) income (1,104) 8,942 42,812 49,621 Less: Net income attributable to noncontrolling interest 454 454 533 533 Net (loss) income attributable to Ferro (1,558) 8,488 42,279 49,088 Dividends on preferred stock 0 0 (165) (165) Net (loss) income attributable to Ferro common shareholders $(1,558) $8,488 $42,114 $48,923   Diluted (loss) earnings per share $(0.02) $0.10 $0.48 $0.57   1 2012 tax rate of 32%, consistent with the Company’s expectation for future effective tax rates, excluding discrete items. The Company’s expected future effective tax rate is lower than the U.S. statutory rate because of expected earnings in foreign jurisdictions with lower tax rates. 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 June 30, Six months ended June 30, 2012   2011 2012   2011   Electronic Materials $ 43,656 $ 70,629 $ 81,680 $ 150,812 Performance Coatings 157,315 163,481 309,829 300,181 Color and Glass Perf. Materials 92,614 97,430 185,199 189,341 Polymer Additives 83,450 91,271 171,174 177,133 Specialty Plastics 44,151 46,510 91,207 89,139 Pharmaceuticals   5,959   5,874   11,924   11,540 Total segment sales excluding precious metals 427,145 475,195 851,013 918,146 Sales of precious metals   54,360   118,779   96,882   248,837 Total net sales $ 481,505 $ 593,974 $ 947,895 $ 1,166,983   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.   Ferro Corporation and Subsidiaries Supplemental Information Prior-Period Segment Income (Loss), As Adjusted for a Change in Methodology Related to the Allocation of Corporate Expenses (Unaudited)   Three months ended (Dollars in thousands) December 31, 2011   September 30, 2011   June 30, 2011   March 31, 2011 Segment Income (Loss) Electronic Materials $ (1,594 ) $ 16,463 $ 22,406 $ 30,748 Performance Coatings 6,120 11,069 10,497 6,347 Color and Glass Perf. Materials 1,539 8,365 10,670 9,098 Polymer Additives 437 4,252 4,515 6,580 Specialty Plastics 2,012 2,717 2,827 1,872 Pharmaceuticals   219     1,254     945     1,326 Total Segment Income 8,733 44,120 51,860 55,971   Unallocated corporate expenses 10,939 7,837 11,061 12,463 Restructuring and impairment charges 12,986 869 1,545 1,630 Interest expense 7,201 7,030 7,352 6,826 Other expense, net   2,696     1,740     820     1,754 Income (loss) before income taxes $ (25,085 ) $ 26,641   $ 31,082   $ 33,298     Three months ended (Dollars in thousands) December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010 Segment Income Electronic Materials $ 34,849 $ 31,052 $ 37,535 $ 28,573 Performance Coatings 1,837 9,100 12,729 7,737 Color and Glass Perf. Materials 3,387 7,635 8,876 6,134 Polymer Additives 3,911 6,325 2,324 3,467 Specialty Plastics 2,199 4,712 4,100 2,402 Pharmaceuticals   1,372     1,490     723     1,115 Total Segment Income 47,555 60,314 66,287 49,428   Unallocated corporate expenses 16,550 14,853 13,809 13,442 Restructuring and impairment charges   19,625 9,570 21,205 13,332 Interest expense 7,372 10,519 13,766 12,911 Other expense, net   7,932     26,996     (4,006 )   1,966 Income (loss) before income taxes $ (3,925 ) $ (1,624 ) $ 21,513   $ 7,777   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