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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