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[August 2009]
Ferro Reports 2009 Second-Quarter Results
Ferro Corporation (Cleveland, OH, USA) reported that net sales for the three months ended 30 June 2009 were US$399 million, a decline of 37% from the second quarter of 2008. Net sales increased 12%, sequentially, from the first quarter of 2009.The company recorded a loss from continuing operations for the second quarter of US$11.1 million, compared with income of US$8.2 million in the second quarter of 2008. The loss from continuing operations declined from US$19.7 million in the first quarter of 2009. The operating loss for the 2009 second quarter included net pre-tax charges of US$6.4 million. These charges were primarily related to manufacturing rationalisation and other cost reduction activities. Second quarter 2008 operating income was reduced by pre-tax charges of US$13.8 million primarily related to restructuring charges, asset write-offs and corporate development activities.
“The actions we are taking to reduce cost and expense have lowered our breakeven sales level, and as a result, we recorded positive operating income, higher gross margins, and reduced selling, general and administrative (SG&A) expense compared with the first quarter of 2009,” said James Kirsch, Chairman, President and CEO. “Despite continued reduced customer demand, we made excellent progress during the 2009 second quarter, as we generated significantly improved operating leverage from a modest increase in sales compared with the first quarter. We believe our progressively improving cost structure will continue to benefit our operating performance when the worldwide economy recovers and customer demand strengthens.”
With regard to the outlook, the company remarked that end-market demand is expected to remain flat from the second quarter to the third quarter of 2009, reflecting reduced global economic activity and continued effects from tight credit markets. In addition, the company’s third-quarter results generally reflect seasonally reduced demand from European markets. Customer inventory destocking is expected to continue to decline during the next several months, which could result in some benefit to sales levels. However, the timing and magnitude of this benefit is difficult to forecast. The company plans to continue cost and expense reduction efforts and liquidity improvement initiatives to mitigate the effects of reduced customer demand.
ENDS