Ferro Announces Sale of Solar Pastes Assets to Heraeus, Projects Additional Cost Savings, Confirms 2012 Guidance, and Provides Initial Guidance for 2013

Wed Feb 6, 2013 8:30am EST

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* Sale transaction concludes Ferro`s pursuit of strategic alternatives for its
solar pastes business 
* Management team advancing on its value creation strategy, including ongoing
cost savings initiatives 
* Cost savings initiatives now estimated to generate $25 million to $30 million
in savings for 2013 and in excess of $50 million in savings for 2014 
* Full-year 2012 adjusted earnings per diluted share confirmed to be $0.07 to
$0.12 
* Adjusted earnings per diluted share for 2013 expected to be in the range of
$0.25 to $0.30

CLEVELAND--(Business Wire)--
Ferro Corporation ("The Company," NYSE: FOE) announced today that it has sold
assets related to its solar pastes business to Heraeus, a privately owned global
precious metals and technology company based in Hanau, Germany. As announced on
October 9, 2012, the Company had decided to explore strategic options for the
solar pastes business in an effort to eliminate the negative impact from the
business on earnings and cash flow. The market for conductive pastes used in the
manufacture of solar cells has declined substantially since 2011 as the solar
power panel industry has struggled with overcapacity and falling prices. As a
result of the transaction, the Company will eliminate operating losses
associated with the solar business. Terms of the transaction were not disclosed.


"The solar pastes transaction will advance our efforts to drive shareholder
value," said Peter T. Thomas, Interim President and Chief Executive Officer. "It
will eliminate approximately $17 million of negative drag on operating earnings
from the solar pastes business, allowing higher returns on invested capital and
freeing up capital for investment in our core businesses. It also will eliminate
a source of volatility in our business, allowing management to drive more
consistent and predictable earnings. In addition, this transaction enables the
Company to reduce debt by approximately $11 million and precious metal
consignment arrangements by approximately $12 million." 

Since assuming his current position with the Company on November 12, 2012, Mr.
Thomas has accelerated and expanded initiatives to drive efficiencies across the
global enterprise. He commented, "We have substantial restructuring experience,
including in Europe, and we are using that experience to create value for our
shareholders. In addition to the savings from the solar pastes divestiture, we
expect our cost savings initiatives to generate annual savings of $25 million to
$30 million in 2013 and more than $50 million in 2014. Our focus on operating
efficiency will be relentless and we are planning even greater cost savings in
2015." Total costs over the 2013-2014 period associated with these initiatives
are expected to be in excess of $50 million. Restructuring actions at certain
sites are subject to required consultations with employee representatives and
other local legal requirements. 

For the full year 2012, the Company confirms that it expects adjusted earnings
per diluted share of $0.07 to $0.12. 

Ferro also announced today that adjusted earnings for 2013 are expected to be in
the range of $0.25 to $0.30 per diluted share. The earnings improvement in 2013
is expected to be driven by a number of factors, including cost savings from
restructuring activities, growth in key product lines, and savings associated
with the Company`s exit from the solar pastes business. 

William B. Lawrence, Acting Chairman of the Board, said, "In connection with the
leadership transition last November, the Board of Directors charged management
with moving aggressively to improve profitability and enhance shareholder value.
We noted then Peter Thomas`s track record of enhancing value through cost
reductions and improved leverage on existing assets. Today`s announcement
reflects both the commitment and the ability of the current management team to
take action and generate value for our shareholders. The Board and management
team will remain acutely focused on driving additional efficiencies in the
business and on rationalizing any underperforming assets." 

J.P. Morgan acted as financial advisor to Ferro on the solar pastes transaction.


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, and divided by the average number of diluted
shares outstanding. The adjusted earnings estimate for 2012 is inclusive of the
operating results from the solar pastes business, while the adjusted earnings
estimate for 2013 excludes results of the solar pastes business and the impact
of the sale transaction. 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. 

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
building and construction, automotive, appliances, electronics, household
furnishings, pharmaceuticals, and industrial products. 

Headquartered in Mayfield Heights, Ohio, the Company has approximately 4,950
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; 
* 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
programs and produce the desired results, including projected savings; 
* 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 certain geographic regions, including Latin America and
Asia-Pacific, 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 final
amount of impairment and other charges described in this press release; 
* 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
Investor Contact:
John Bingle, 216-875-5411
Treasurer
john.bingle@ferro.com
or
Media Contact:
Mary Abood, 216-875-5401
Director, Corporate Communications
mary.abood@ferro.com

Copyright Business Wire 2013

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