Form 8-K FERRO CORP For: Sep 30

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section�13 or 15(d) of The Securities Exchange Act of 1934

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Ferro Corporation

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(Exact name of registrant as specified in its charter)

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Not Applicable

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Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:�

[��]��Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[��]��Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[��]��Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[��]��Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02 Results of Operations and Financial Condition.

On Monday, �October 27, 2014, Ferro Corporation ("the Company") issued a press release that discussed financial results for the three-month and nine-month periods ended September 30, 2014 and provided the Company’s outlook for the remainder of 2014. The press release also provided information regarding a conference call to be held on Tuesday, �October 28, 2014 in which the Company’s management will discuss the financial results and outlook. Among other things, the press release reports:

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A copy of the press release is attached hereto as Exhibit 99.1.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

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Exhibit 99.1: Press release

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SIGNATURES

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit�Index

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Exhibit No.Description

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99.1Press Release

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�For Immediate Release

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���FERRO REPORTS 33% INCREASE IN THIRD QUARTER ADJUSTED EPS FROM CONTINUING OPERATIONS

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CLEVELAND, Ohio – October 27, 2014 – Ferro Corporation (NYSE: FOE, the “Company”) today reported results for the third quarter ended September 30, 2014.��Third quarter diluted earnings per share attributable to common shareholders was $0.55, compared with $0.15 per share in the third quarter of 2013.��After recognition of substantially all of the Specialty Plastics and Polymer Additives segments as discontinued operations, Ferro reported a loss of $.03 for third quarter 2014 diluted earnings per share from continuing operations, versus earnings of $0.11 per share in the same period last year.

Included in the results from continuing operations are restructuring activities, a loss associated with the refinancing of the Company’s debt, other nonrecurring income and expense items, and gains and losses on certain asset sales.��Adjusting for these items, third quarter 2014 adjusted diluted earnings per share increased by 33% to $0.16 from $0.12 in the third quarter of 2013.��Please refer to the supplemental tables at the end of this news release for additional information concerning adjusted financial results for the Company’s continuing operations.

The Company attributed the increase in profitability primarily to increased sales and gross profit in the Performance Colors and Glass segment coupled with reduced selling, general and administrative (“SG&A”) expenses associated with continued cost reduction activities.��Results in the Performance Colors and Glass segment were particularly strong with net sales and gross profit increasing by 9% and 18%, respectively, for the third quarter of 2014 compared with the same period last year.�

On a consolidated basis, Ferro reported net sales of $276 million in the third quarter of 2014, compared with net sales of $298 million in the third quarter of 2013.��Excluding the impact of exited business lines ($9 million), primarily related to the metal powders business divested in October 2013, and excluding precious metal sales, value-added sales declined by 1% in the third quarter versus the same period last year.�

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Overall volumes for the third quarter of 2014 increased by approximately 3% compared with the same period last year.��Volumes improved in both the Performance Colors and Glass and Performance Coatings segments, while volumes declined in the Pigments, Powders and Oxides segment.��Third quarter consolidated value-added sales lagged volume growth principally due to lower pricing associated with competitive pressures in key product lines in the Performance Coatings segment.��Reduced average selling prices also adversely impacted profitability for the Performance Coatings segment.��Pricing pressure was the most severe for digital inks in the Tile Coatings business, where pricing has declined by approximately 20% over the last 12 months.���

Peter Thomas, Chairman, President and Chief Executive Officer, commented, “Ferro had another solid quarter of earnings growth and we continue to make progress on our Value Creation strategy.��In this quarter, we achieved a major milestone related to our strategy by surpassing an initial ROIC threshold of 10%.��Early on, we set an internal ROIC goal of 10%, as we considered this threshold the point where the Company would begin generating positive value for our shareholders.��In early 2013, we estimated that the then-current set of businesses was generating returns below 5%.��While reaching the 10% threshold is noteworthy, we continue to focus on our longer-term target of delivering consistent and predictable ROIC of 15%.”�

Mr. Thomas added, “To that end, during the quarter, we continued to take actions to enhance growth, improve profitability and focus the business portfolio on our core performance materials and color solutions franchise.��Last month, we announced a definitive agreement to acquire Vetriceramici, a leading global supplier of high-end tile coatings, and we expect to close the €83 million transaction during the quarter.��In addition, we continue to work on other opportunities to accelerate growth in emerging markets and to expand capacity in our core frit-based businesses.��Meanwhile, the process to sell our Polymer Additives business, which will complete the divestiture of the performance chemicals portfolio, remains on track.��While we are seeing a number of positive developments across our businesses, in Tile Coatings, and, to a lesser extent, Porcelain Enamel, we are facing a difficult pricing environment in softening markets.��Despite this pricing pressure, based on the strong third-quarter results, and lower SG&A costs, we expect full-year adjusted EPS will be at the high end of our current earnings guidance of $0.52 to $0.57.”

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2014 Third-Quarter Results

Ferro reported net sales of $276 million in the third quarter of 2014, compared with net sales of $298 million in the third quarter of 2013.��Value-added sales, which exclude precious metal sales, decreased 5% to $265 million from $277 million in the third quarter last year.��Adjusting for the impact of previously divested business lines ($9 million), value-added sales declined by 1%.�

The Performance Colors and Glass segment contributed the highest levels of sales growth with value-added sales increasing by 8%.��Value-added sales for Performance Coatings declined 6%, and sales in the Pigments, Powders and Oxides segment, excluding the impact of exited business lines, declined 5%.�

Gross profit was $73 million for the 2014 third quarter, compared with $72 million for the third quarter of 2013.��Excluding special charges, adjusted gross profit was $73 million (27.5% of value-added sales), compared with $73 million (26.2% of value-added sales) in the prior-year period.�����

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For the third quarter of 2014, SG&A expenses were $52 million, compared with expenses of $53 million in the prior-year quarter.��Excluding special items in both periods, SG&A expenses declined 6% to $47 million from $50 million. ��� �

During the third quarter of both years, the Company incurred charges associated with ongoing efforts to restructure operations and exit underperforming assets.��The charge associated with continuing operations in the third quarter of 2014 was $2 million compared with $4 million in the same period last year.

Income from continuing operations for the quarter ended September 30, 2014, was a loss of $3 million, or $0.03 per diluted share, compared to income of $10 million, or $0.11 per diluted share, in the third quarter of 2013. Adjusted net income from continuing operations attributable to common shareholders was $14 million, or $0.16 per diluted share, compared with $10 million, or $0.12 per diluted share, in the prior-year quarter.�

Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) from continuing operations were $34 million in the third quarter of 2014, compared with $30 million in the same period last year. Adjusted EBITDA margins, as a percentage of value-added sales, were 12.8% in the third quarter of 2014 and 10.7% in the same period last year.

Total debt as of the end of the third quarter was $309 million, a reduction of $3 million from December 31, 2013.��In addition, cash balances increased $67 million during the first nine months of the year to $95 million, resulting in a reduction in net debt (debt less cash) of $70 million during the first nine months of the year.��Receipt of the net cash proceeds from the sale of the Company’s Specialty Plastics business of approximately $88 million is the primary driver for the reduction in net debt.

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Outlook

Based on third-quarter performance, the Company expects adjusted earnings from continuing operations for 2014 to be at the high end of the previously provided earnings guidance of $0.52 to $0.57 per diluted share.�

Value-added sales for the fourth quarter of 2014 are expected to be flat versus 2013 levels, as adjusted for dispositions in the fourth quarter of 2013 that represented value-added sales of approximately $3 million.��The Company is lowering its prior revenue outlook, as overall business conditions in Europe and Asia have weakened.��In addition, the Company expects average selling prices in the Performance Coatings Segment will continue to be under pressure and sales for the Pigments, Powders and Oxides segment, adjusted for exited businesses, will be below last year’s levels.�

The adjusted gross profit margin for the fourth quarter of 2014, expressed as a percent of value-added sales, is expected to be in the range of 26.0% to 26.5%, and SG&A expenses, excluding pension adjustments and other nonrecurring expense items, are expected to be $45 to $50 million.�

For the full year, the Company expects to use approximately $15 million in cash, excluding the impact of acquisitions and divestitures.��Uses of cash include continued funding of restructuring efforts and capital spending of approximately $60 million, including the plant conversion investment in Antwerp, Belgium, to support manufacturing of dibenzoates as a phthalates replacement.

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Conference Call

The Company will host a conference call to discuss its third-quarter financial results and current outlook for 2014 on Tuesday, October 28, 2014, at 10:00 a.m. Eastern Time.��To listen to the call, dial 800-354-6885 if calling from the United States or Canada, or dial 303-223-2685�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 through noon Eastern Time on November 4th.��To access the replay, dial 800-633-8284 if calling from the United States or Canada, or dial 402-977-9140 if calling from outside North America.� Use the program ID #21737482 to access the audio replay.�

The conference call also will be broadcast live over the Internet and will be available for replay through January 31, 2015.��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 site.

About Ferro Corporation

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Ferro Corporation (http://www.ferro.com) is a leading global supplier of technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials. Ferro products are sold into the building and construction, automotive, appliances, electronics, household furnishings, and industrial products markets. Headquartered in Mayfield Heights, Ohio, the Company has approximately 3,975 employees globally.

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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 Ferro'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 Ferro's future financial performance include the following:

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The risks and uncertainties identified above are not the only risks Ferro faces. Additional risks and uncertainties not presently known to Ferro or that it currently believes to be immaterial also may adversely affect Ferro. 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.

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This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Ferro 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 Ferro’s Annual Report on Form 10-K for the year ended December 31, 2013.

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Contacts:

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Investor Contact:

John Bingle, 216-875-5411

Treasurer and Director of Investor Relations

[email protected]�

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Media Contact:

Mary Abood, 216-875-5401

Director, Corporate Communications

[email protected]�

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Table 1

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Operations (unaudited)

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Table 2

Ferro Corporation and Subsidiaries

Segment Net Sales and Gross Profit (unaudited)

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Table 3

Ferro Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

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Table 4

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

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Table 5

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Reported Income to Adjusted Income

For the Three Months Ended September 30 (unaudited)

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���1���������Includes certain severance costs, ongoing costs at facilities that have been idled, gain/loss on divestitures, proxy contest related costs and certain business development activities, and certain costs related to divested assets and product lines.

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����2����������Adjustment of reported income and of special items to a normalized 36% rate for 2014 and 2013.

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It should be noted that adjusted income and earnings per share are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).� The adjusted income and earnings per share presented here exclude certain special items including restructuring charges, certain severance costs, ongoing costs at facilities that have been idled, gain/loss on divestitures, proxy contest related costs and certain business development activities, certain costs related to divested assets and product lines, income taxes and discontinued operations.��We believe this data provides investors with additional 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.

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Table 6

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Reported Income to Adjusted Income

For the Nine Months Ended September 30 (unaudited)

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���1���������Includes certain severance costs, ongoing costs at facilities that have been idled, gain/loss on divestitures, proxy contest related costs and certain business development activities, and certain costs related to divested businesses, assets and product lines and the overall financial impact of currency related items in South America.

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����2����������Adjustment of reported income and of special items to a normalized 36% rate for 2014 and��2013.

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It should be noted that adjusted income and earnings per share are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).� The adjusted income and earnings per share presented here exclude certain special items including, restructuring �charges, severance costs, costs at facilities that have been idled, gain/loss on divestitures, proxy contest related costs, the overall financial impact of currency related items in South America, certain business development costs, taxes and discontinued operations. We believe this data provides investors with additional 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.

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Table 7

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Segment Net Sales Excluding Precious Metals to Net Sales

and Schedule of Adjusted Gross Profit (unaudited)

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��1Adjusted cost of sales reflects pro forma adjustments of $0 and $0.6 million for the three months ended September 30, 2014 and 2013, respectively, and $0.3 million and $3.5 million for the nine months ended September 30, 2014 and 2013, respectively.

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It should be noted that segment net sales excluding precious metals, adjusted cost of sales and adjusted gross profit are financial measures 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. Adjusted gross profit and adjusted cost of sales excludes special items, primarily comprised of costs at facilities that have been idled and certain costs related to divested businesses and product lines. We believe this data provides investors with additional useful information on the underlying operations of the business and enables period-to-period comparability of financial performance.

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Table 8

Ferro Corporation and Subsidiaries

Supplemental Information

Segment Detail (unaudited)

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It should be noted that operating group sales, gross profit, selling, general and administrative charges, and operating profit are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). The respective information has been aggregated in a manner consistent with the operating groups of the Company. We believe this data provides investors with additional information on the underlying operations of the business and enables period-to-period comparability of financial performance.

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Table 9

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Operating Group Non-GAAP Measures to

Consolidated GAAP Balances (unaudited)

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It should be noted that operating group sales, gross profit, selling, general and administrative charges, and operating profit are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). The respective information has been aggregated in a manner consistent with the operating groups of the Company. We believe this data provides investors with additional information on the underlying operations of the business and enables period-to-period comparability of financial performance.

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Table 10

Ferro Corporation and Subsidiaries

Reconciliation of Net Income to Adjusted EBITDA (unaudited)

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It should be noted that adjusted EBITDA is a financial measure not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).��Adjusted EBITDA is net income before the effects of discontinued operations, interest, income taxes, depreciation and amortization, non-recurring adjustments to cost of sales, non-recurring adjustments to SG&A, restructuring and impairment charges, non-recurring adjustments to miscellaneous income and expense, and the gain and impact of solar operations in the first quarter of 2013. We believe this data provides investors with additional 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.

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Table 11

Ferro Corporation and Subsidiaries

Supplemental Information

Return on Invested Capital

For the Twelve Months Ended (unaudited)

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1 �Includes ongoing costs at facilities that have been idled, proxy contest related costs, certain environmental related costs, certain business development activities, costs related to certain corporate projects, costs related to consignment costs of precious metal leases, certain costs related to divested businesses, assets and product lines and the overall financial impact of currency related items in South America.��All noted items are not expected to recur, and we believe this data provides investors with additional useful information on the underlying operations of the business and enables period-to-period comparability of financial performance.

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It should be noted that adjusted operating profit and return on invested capital are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).��Adjusted operating profit is operating profit before the effects of discontinued operations, non-recurring adjustments to cost of sales, non-recurring adjustments to SG&A, and operations of our exited businesses. We believe this data provides investors with additional 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.

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