Recognizing the weak market conditions, Ferro took steps in the second quarter of 2012 to cut the costs of the Performance Coatings business in Europe. Cost savings efforts were subsequently expanded and accelerated in Europe and across all other regional operations. The Company also has taken action to improve the Electronic Materials operating results. The senior management team overseeing the Electronic Materials product lines was removed, and restructuring activities have been completed to significantly reduce operating costs. On February 6, 2013, the Company completed the sale of certain solar pastes assets and exited this product line, eliminating a $16 million negative impact on 2012 earnings. The Electronic Materials management team has been further rationalized and the remaining product lines have been folded into the Color and Glass Segment.
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,” Mr. Lawrence added.
Peter Thomas, Interim President and Chief Executive Officer, commented, “This is a time of significant opportunity at Ferro. Management is driving a comprehensive set of global actions designed to return the business to a significantly higher level of profitability, and we have already begun to see the benefits of these initiatives. Our near-term priorities are to simplify the organization, streamline processes to enhance operational efficiencies, and to substantially reduce infrastructure and support costs. We are determined to transform the business and will continue to provide world-class product and services to our customers. We will be relentless in reducing costs, improving our market positions and driving shareholder value.”