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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO _____________
COMMISSION FILE NUMBER 1-584
FERRO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AN OHIO CORPORATION, IRS NO. 34-0217820
1000 LAKESIDE AVENUE CLEVELAND, OH 44114
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: 216/641-8580
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
At July 31, 2001 there were 34,236,980 shares of Ferro common stock, par
value $1.00, outstanding.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FERRO CORPORATION AND SUBSIDIARIES
Three Months Ended Six Months Ended
June 30 June 30
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
2001 2000 2001 2000
------------ ------------ ------------ ------------
Sales from Ongoing Operations $ 355,189 $ 358,124 $ 725,882 $ 711,093
Sales from Businesses Sold -- 7,702 -- 15,345
------------ ------------ ------------ ------------
Total Net Sales $ 355,189 $ 365,826 $ 725,882 $ 726,438
Cost of Sales 269,914 264,416 543,106 524,959
Selling, Administrative and General Expenses 66,715 64,017 133,168 127,965
Other Charges (Credits):
Interest Expense 7,431 5,709 15,279 11,334
Net Foreign Currency (Gain) Loss (166) (464) (349) (832)
Other Expense - Net 301 (1,006) 1,806 389
------------ ------------ ------------ ------------
Income Before Taxes 10,994 33,154 32,872 62,623
Income Tax Expense 3,981 13,002 11,894 24,071
------------ ------------ ------------ ------------
Net Income 7,013 20,152 20,978 38,552
Dividend on Preferred Stock, Net of Tax 775 875 1,570 1,781
------------ ------------ ------------ ------------
Net Income Available to Common Shareholders $ 6,238 $ 19,277 $ 19,408 $ 36,771
============ ============ ============ ============
Per Common Share Data:
Basic Earnings $ 0.18 $ 0.56 $ 0.57 $ 1.06
Diluted Earnings 0.18 0.53 0.56 1.01
Shares Outstanding:
Average Outstanding 34,221,922 34,634,937 34,200,352 34,774,715
Average Diluted 34,475,450 37,928,410 37,086,023 37,975,491
Actual End of Period 34,225,699 34,632,263 34,225,699 34,632,263
See Accompanying Notes to Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED BALANCE SHEET
FERRO CORPORATION AND SUBSIDIARIES
JUNE 30, 2001 AND DECEMBER 31, 2000
(Dollars in Thousands)
(Unaudited) (Audited)
2001 2000
---------- ----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 13,721 $ 777
Net Receivables 154,960 189,014
Inventories 170,990 189,639
Other Current Assets 64,481 63,798
---------- ----------
Total Current Assets 404,152 443,228
Net Property, Plant & Equipment 418,532 425,728
Unamortized Intangible Assets 194,263 196,279
Other Assets 58,176 61,770
---------- ----------
$1,075,123 $1,127,005
========== ==========
LIABILITIES
Current Liabilities:
Notes and Loans Payable $ 34,149 $ 65,865
Accounts Payable, Trade 135,434 155,244
Other Current Liabilities 141,598 143,986
========== ==========
Total Current Liabilities 311,181 365,095
Long - Term Debt 361,377 350,781
Other Liabilities 99,612 101,971
Shareholders' Equity 302,953 309,158
---------- ----------
$1,075,123 $1,127,005
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FERRO CORPORATION AND SUBSIDIARIES
SIX MONTHS ENDED
JUNE 30
(UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS) 2001 2000
--------- ----------
Net Cash Provided from Operating Activities ................ $ 44,840 $ 47,966
Cash Flow from Investing Activities:
Capital Expenditures for Plant and Equipment ............ (23,906) (23,241)
Other ................................................... (751) 14,370
-------- --------
Net Cash Used for Investing Activities ..................... (24,657) (8,871)
Cash Flow from Financing Activities:
Net Borrowings (Payments) Under Short-Term Lines ........ (31,244) (16,959)
Asset Securitization .................................... 30,274 --
Proceeds from long-term debt ............................ 10,228 19,963
Purchase of Treasury Stock .............................. (5,753) (17,582)
Cash Dividend Paid ...................................... (11,490) (11,878)
Other Financing Activities .............................. 1,455 1,956
-------- --------
Net Cash (Used for) Provided by Financing Activities ....... (6,530) (24,500)
Effect of Exchange Rate Changes on Cash .................... (709) (55)
-------- --------
Increase in Cash and Cash Equivalents ...................... 12,944 14,539
Cash and Cash Equivalents at Beginning of Period ........... 777 7,114
-------- --------
Cash and Cash Equivalents at End of Period ................. $ 13,721 $ 21,653
======== ========
Cash Paid During the Period for:
Interest, net of amounts capitalized .................... $ 13,819 $ 10,249
Income Taxes ............................................ $ 5,925 $ 10,162
-------- --------
See Accompanying Notes to Condensed Consolidated Financial Statements
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FERRO CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The condensed consolidated interim financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's annual report on Form 10-K for the fiscal year
ended December 31, 2000. The information furnished herein reflects all
adjustments (consisting of normal recurring adjustments) which are, in the
opinion of management, necessary for fair presentation of the results of
operations for the interim periods. The results of the six months ended
June 30, 2001 are not necessarily indicative of the results expected in
subsequent quarters or for the full year.
2. COMPREHENSIVE INCOME
Comprehensive income represents net income adjusted for foreign currency
translation adjustments and pension liability adjustments. Comprehensive
income was $2.5 million and $21.5 million for the three months ended June
30, 2001 and 2000, respectively and $9.1 million and $35.6 million for the
six months ended June 30, 2001 and 2000 respectively. Accumulated other
comprehensive income (loss) at June 30, 2001 and December 31, 2000 was
($97.5) million and ($85.7) million, respectively.
3. EARNINGS PER SHARE COMPUTATION
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Average Basic Shares Outstanding 34,221,922 34,634,937 34,200,352 34,774,715
Adjustments for Assumed Conversion of
Convertible Preferred Stock and Common
Stock Options 253,528 3,293,473 2,885,671 3,200,776
---------- ---------- ---------- ----------
AVERAGE DILUTED SHARES 34,475,450 37,928,410 37,086,023 37,975,491
Basic earnings per share is computed as net income available to common
shareholders divided by average basic shares outstanding.
Diluted earnings per share is computed as net income adjusted for the tax
effect associated with assumed conversion of preferred stock to common
stock divided by average diluted shares outstanding. For the three months
ended June 30, 2001, the assumed conversion of convertible preferred stock
was anti-dilutive, and, accordingly, those shares were excluded from the
diluted earnings per share computation.
4. CONTINGENT LIABILITIES
On May 4, 1999, and December 16, 1999, the United States Environmental
Protection Agency (U.S. EPA) issued Notices of Violation (NOVs) alleging
that the Company violated various requirements of the Clean Air Act and
related state laws in modifying and operating the Pyro-Chek process. The
U.S. EPA has also submitted requests seeking information from the Company
related to the alleged violations. The Company completed the sale of
assets relating to the Pyro-Chek process and ceased production of
Pyro-Chek in June 2000. The Company has been meeting with the U.S. EPA,
the State of Indiana and local authorities and is engaged in negotiations
intended to resolve the issues raised in the NOVs. The Company believes
that it will resolve this matter in a manner that will not have a material
adverse effect on the Company's financial position or results of
operations.
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In 2000, a wrongful death lawsuit was filed against Keil Chemical, a
division of the Company, and is now pending in federal court in Indiana.
Three negligence suits were filed against Keil Chemical, also in federal
court in Indiana. These complaints generally allege that the Company was
negligent and/or reckless in failing to control emissions, misrepresenting
emissions levels to regulatory agencies, failing to warn nearby residents
of the hazards posed by its emissions, and in emitting carcinogenic
chemicals without a permit. The Company believes it has valid defenses to
the allegations made in these suits and is vigorously defending its
position.
There are also pending against the Company and its consolidated
subsidiaries various other lawsuits and claims. In the opinion of
management, the ultimate liabilities resulting from such other lawsuits
and claims will not materially affect the consolidated financial position
or results of operations or liquidity of the Company.
5. REPORTING FOR SEGMENTS
The Company's reportable segments are Coatings and Performance Chemicals.
Coatings products include ceramics and color, industrial coatings and
electronic materials. Performance Chemicals consists of polymer additives,
performance and fine chemicals, plastic compounds and plastic colorants.
The Company measures segment profit for internal reporting purposes as net
operating profit before interest and tax. Excluded from net operating
profit are certain unallocated corporate expenses. A complete
reconciliation of segment income to consolidated income before tax is
presented below.
Sales to external customers are presented in the following chart.
Inter-segment sales are not material.
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FERRO CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------- -------------------------
(Dollars in Thousands) 2001 2000 2001 2000
--------- --------- --------- ---------
SEGMENT SALES
Coatings $ 205,480 $ 225,902 $ 421,670 $ 445,237
Performance Chemicals 149,709 139,924 304,212 281,201
--------- --------- --------- ---------
Total (1) $ 355,189 $ 365,826 $ 725,882 $ 726,438
========= ========= ========= =========
SEGMENT INCOME
Coatings $ 17,650 $ 25,039 $ 39,575 $ 50,753
Performance Chemicals 9,986 15,370 23,243 30,343
--------- --------- --------- ---------
Total 27,636 40,409 62,818 81,096
Unallocated expenses 9,076 3,016 13,210 7,582
Interest expense 7,431 5,709 15,279 11,334
Foreign currency (gain) loss (166) (464) (349) (832)
Other (income) expense 301 (1,006) 1,806 389
--------- --------- --------- ---------
Income before taxes $ 10,994 $ 33,154 $ 32,872 $ 62,623
========= ========= ========= =========
GEOGRAPHIC SALES
United States $ 202,996 $ 214,175 $ 417,653 $ 423,388
International 152,193 151,651 308,229 303,050
--------- --------- --------- ---------
Total (1) $ 355,189 $ 365,826 $ 725,882 $ 726,438
========= ========= ========= =========
(1) Sales for the three and six months ended June 30, 2000, include sales from
businesses sold of $7,702 and $15,345, respectively.
Unallocated expenses consist primarily of corporate costs and charges
associated with an employment cost reduction program implemented in the
second quarter 2001.
6. ACQUISITIONS AND DIVESTITURES
On April 24th, 2001 the Company signed an agreement to acquire certain
businesses of dmc(2) Degussa Metals Catalysts Cerdec AG of Hanau, Germany
(dmc(2)) from OM Group, Inc. of Cleveland, Ohio.
Under the terms of the agreement, the Company would purchase the
electronic materials, performance pigments, glass systems and Cerdec
ceramics businesses of dmc(2) for 600 million euros (approximately $535
million) in cash. Annual sales for these businesses were approximately
$517 million (unaudited) in 2000. The Company expects to finance the
transaction with a new bank credit facility.
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On July 30, 2001, the 30-day waiting period under the Hart-Scott-Rodino
Antitrust Improvement Act expired, allowing Ferro to proceed with the
acquisition, subject to regulatory approval in a select number of European
countries. The transaction is expected to close in the third quarter.
7. COST REDUCTION PROGRAM
In the second quarter of 2001, the Company implemented an employment cost
reduction program as an element of an overall cost reduction program in
response to a general economic slowdown.
The program included the elimination of approximately 200 manufacturing
and general overhead positions and the closure of two small manufacturing
operations whose production was transferred to more efficient locations.
Pursuant to the program, the Company incurred a non-recurring pre-tax
charge of $6.9 million, which included $6.2 million for severance, $0.4
million for asset impairment and $0.3 million of other costs. Severance
costs were included in both cost of sales and selling, administrative and
general expenses for $2.0 million and $4.2 million, respectively.
Through June 30, 2001, the amount of severance costs actually paid was
$2.0 million and 100 people had actually been terminated.
8. ACCOUNTING PRONOUNCEMENTS
Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities," (FAS 133) and as amended by Statements 137 and 138.
The standards require that derivatives be measured at fair value and be
recorded as assets or liabilities on the balance sheet. Gains or losses
resulting from changes in fair values are accounted for dependent upon the
use of the derivative and whether it qualifies for hedge accounting. The
adoption of FAS 133 did not have a material effect on the Company's
financial position or results of operations.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Comparison of the Three Months Ended June 30, 2001 and 2000.
Second quarter 2001 total net sales of $355.2 million were 2.9% lower than
the $365.8 million of sales for the comparable 2000 period. Sales declined
9.0% in the Coatings segment and increased 7.0% in the Performance
Chemicals segment. Sales from ongoing operations for the quarter declined
0.8% compared with sales for the second quarter of 2000, excluding sales
from businesses sold in 2000.
Overall volume increased approximately 4.4% in the quarter, including the
contribution of acquisitions. Core volumes were down in most US markets
due to broad economic weakness, particularly in durable goods markets such
as plastics, PVC, appliance and automotive. Weaker foreign currencies
together with divestitures negatively impacted sales by approximately
$17.2 million.
Gross margins were 24.0% of sales compared to 27.7% for the comparable
2000 period. The lower margins were driven by a decline in core volumes,
which led to lower capacity utilization. In addition, the company reduced
inventories by approximately 10% during the quarter -- also contributing
to the lower capacity utilization. A charge for a payroll cost reduction
program also reduced gross margins by 0.6 %.
Selling, administrative and general expenses were $66.7 million in the
second quarter 2001, compared to $64.0 million in the second quarter 2000.
Charges for the aforementioned payroll cost reduction program added $4.2
million to SG&A for the quarter. Excluding this charge, SG&A was reduced
by $1.5 million compared to the prior year.
Earnings per share were $0.31, before charges of $6.9 million or $0.13 per
share after-tax for a previously mentioned employment cost reduction
program, compared with $0.53 in the prior year period. Diluted earnings
per share, including the charges related to the cost reduction program,
were $0.18 in the current quarter.
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QUARTERLY SEGMENT RESULTS
Sales in the Coatings segment were $205.5 million compared with $225.9
million in the second quarter of 2000. Negative foreign currency
translation and lower volume in the United States led to the decline in
sales. Markets such as appliance and automotive were weak during the
quarter, particularly in the United States. Additionally, key markets for
electronic materials trended lower throughout the quarter. Segment income
was $17.7 million compared with $25.0 million in the second quarter of
2000. Coatings profitability declined due to negative foreign currency
translation, lower sales volume and higher costs for energy and
dollar-based raw materials in Europe. The previously mentioned inventory
reduction programs lowered capacity utilization also contributing to the
lower profitability in the segment.
Performance Chemicals sales increased 7.0 % to $149.7 million compared to
$139.9 million in the second quarter of 2000. Sales increased primarily
due to two key acquisitions made within the past year. This was partially
offset by lower volume in polymer additives and plastics. Performance
Chemicals segment income for the quarter was $10.0 million compared to
$15.4 million in the second quarter of 2000. Margins declined primarily as
a result of lower volume, which led to lower capacity utilization, as
markets such as plastics, PVC, appliance and automotive reflected the
general slowdown in the U.S. economy.
GEOGRAPHIC SALES
Sales in the United States were $203.0 million for the three months ended
June 30, 2001 compared to $214.2 million for the three months ended June
30, 2000. Sales declined in the region as a result of weakness in the U.S.
durable goods markets. International sales were $152.2 million for the
three months ended June 30, 2001, compared to $151.7 million in the three
months ended June 30, 2000. Foreign currency translation had a significant
negative impact on sales reported for international operations.
Comparison of the Six Months Ended June 30, 2001 and 2000
Net sales for the six months ended June 30, 2001 of $725.9 million were
essentially the same as sales of $726.4 million for the comparable 2000
period. Weak U.S. durable goods markets and a lower euro combined to
reduce sales in the 2001 period.
Gross margin as a percent of sales was 25.2% compared to 27.7% for the
comparable 2000 period. Lower gross margins were a result of sales
declines in the United States, inventory reductions that reduced capacity
utilization, higher energy costs and severance charges related to a
payroll cost reduction program.
Selling, administrative and general expenses were $133.2 million compared
to $128.0 million for the first half of 2000. SG&A costs associated with
acquisitions made during the past year and $4.2 million for severance
charges related to a payroll cost reduction program resulted in higher
costs during the 2001 period.
Diluted earnings per share were $0.56 after the $0.13 after tax charge
taken during the second quarter, down from $1.01 for the 2000 first half.
SIX-MONTH SEGMENT RESULTS
For the first six months of 2000, sales in the Coatings segment decreased
5.3% to $421.7 million, compared to sales of $445.2 million in the 2000
period. Sales decreased as a result of lower volumes in the United States
and continuing weakness of the euro. Foreign currency translation reduced
segment sales by $15.0 million in the 2001 period. Segment income was
$39.6 million compared with $50.8 million recorded in the first six months
of 2000. Lower segment earnings were a result of lower volumes in the
United States, weakening of the euro and reduced capacity utilization in
connection with the Company's inventory reduction programs.
Performance Chemicals' sales were $304.2 million, up 8.2% from sales of
$281.2 million for the first six months of 2000. Acquisitions completed in
2000 were the primary driver of the higher sales in the 2001 period.
Segment income was $23.2 million compared to $30.3 million in the first
half of 2000. Continuing weakness in the U.S. plastics and PVC markets
resulted in lower earnings in the 2001 period.
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GEOGRAPHIC SALES
Sales in the United States were $417.7 million for the six months ended
June 30, 2001 compared to $423.4 million for the six months ended June 30,
2000. Sales in the region were driven lower by a slowing in the U.S.
economy. International sales edged slightly higher to $308.2 million for
the six months ended June 30, 2001, compared to $303.1 million in the six
months ended June 30, 2000. Although sales growth was better than in the
2000 period, negative foreign currency translation had an $18.2 million
negative impact on sales.
OUTLOOK
Given current market trends, the Company does not anticipate that the
economic picture will improve in the near future but remains cautiously
optimistic that it will see some improvement late in the second half of
the year. The Company has implemented cost control measures and a program
to reduce working capital to mitigate, in part, the impact of economic
conditions on results.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements include capital investments, working
capital requirements, interest service and acquisitions. The Company
expects to be able to meet its working capital, interest service and
capital investment needs from cash and cash equivalents, cash flow from
operations and, if necessary, use of its revolving credit facility or
long-term borrowings. The Company has available a $300.0 million five-year
revolving credit facility with seven domestic banks. The Company had
borrowed $206.0 million under this facility as of June 30, 2001. The
Company is actively pursuing its acquisition strategy, and may from time
to time use its revolving credit facility or alternate financing
arrangements, including divestitures, to fund acquisitions. The Company
also has $245.0 million available under a universal shelf registration
pursuant to which various types of public securities may be issued.
On April 24th, 2001, the Company signed an agreement to acquire certain
businesses of Degussa Metals Catalysts Cerdec AG of Hanau, Germany (dmc2)
from OM Group, Inc. of Cleveland, Ohio. Under the terms of the agreement,
the Company would purchase the electronic materials, performance pigments,
glass systems and Cerdec ceramics businesses of dmc2 for 600 million euros
(approximately $535 million) in cash. Annual sales for these businesses
were approximately $517 million (unaudited) in 2000. The Company expects
to finance the transaction with a new bank credit facility and issuance of
debt securities in the long-term capital markets.
Net cash provided by operating activities for the six months ended June
30, 2001 was $44.8 million, compared to the $48.0 million recorded in the
first six months of 2000. Cash used for investing activities was $24.7
million in 2001 and $8.9 million in 2000. The 2000 period reflects
proceeds from the sale of a business in the second quarter of 2000. Net
cash used for financing activities was $6.5 million in the 2001 period
compared to $24.5 million in 2000 due to higher volume of share repurchase
in the 2000 period.
ENVIRONMENTAL
Refer to Note 4, the Condensed Consolidated Financial Statements included
herein for a description of the status of environmental matters.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In July 2001, the Financial Accounting Standards Board issued Statement
No. 141, "Business Combinations," and Statement No. 142, "Goodwill and
Other Intangible Assets." Statement 141 requires that the purchase method
of accounting be used for all business combinations initiated after June
30, 2001, as well as all purchase method business combinations completed
after June 30, 2001. Statement 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized but,
instead, tested for impairment at least annually in accordance with the
provisions of Statement 142. The Company is required to adopt the
provisions of Statement 141 immediately, and Statement 142 effective
January 1, 2002.
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As of the date of adoption, the Company expects to have unamortized
goodwill in the amount of approximately $189 million, which will be
subject to the transition provisions of Statement 141 and 142.
Amortization expense related to goodwill was approximately $5.6 million
and $3.9 million for the year ended December 31, 2000, and the six months
ended June 30, 2001, respectively. The Company is currently studying the
effects of adopting the new rules, including whether any transitional
impairment losses will be required.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Management's Discussion and Analysis
and elsewhere in this quarterly report on Form 10-Q reflect the Company's
current expectations with respect to the future performance of the Company
and may constitute "forward-looking statements" within the meaning of the
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, and actual events or results may
differ materially from the events or results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to: the successful closing and
integration of the transaction to acquire certain dmc(2) businesses from
OM Group, Inc.; the success of the Company's acquisition program; market
acceptance of new product introductions; changes in customer requirements,
markets or industries served; changing economic conditions; changes in
foreign exchange rates; changes in the prices of major raw materials;
significant technological or competitive developments; and the impact of
environmental proceedings.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK FACTORS.
There have been no material changes in market risk exposures during the
first three months of 2001 that affect the disclosures presented on pages
21-22 of the company's annual report to shareholders for the year ended
December 31, 2000, which disclosure is incorporated here by reference.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS.
Legal proceedings were reported in the Company's Form 10-Q for the quarter
ended March 31, 2000.
ITEM 2 - CHANGE IN SECURITIES.
No change.
ITEM 3 - DEFAULT UPON SENIOR SECURITIES.
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5 - OTHER INFORMATION.
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(a) The exhibits listed in the attached Exhibit Index are filed pursuant
to Item 6(a) of the Form 10-Q.
(b) The Company has not filed any reports on Form 8-K for the quarter
ended June 30, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FERRO CORPORATION
(Registrant)
Date: August 14, 2001
/s/ HECTOR R. ORTINO
-------------------------------------------
Hector R. Ortino
Chairman and Chief Executive Officer
Date: August 14, 2001
/s/ BRET W. WISE
-------------------------------------------
Bret W. Wise
Senior Vice President and Chief Financial Officer
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EXHIBIT INDEX
The following exhibits are filed with this report or are incorporated here by
reference to a prior filing in accordance with Rule 12b-32 under the Securities
and Exchange Act of 1934. (Asterisk denotes exhibits filed with this report).
EXHIBIT:
(3) Articles of Incorporation and by-laws
(a) Eleventh Amended Articles of Incorporation. (Reference is made to
Exhibit (3)(a) to Ferro Corporation's Quarterly Report on Form 10-Q for
the three months ended June 30, 1998, which Exhibit is incorporated here
by reference.)
(b) Certificate of Amendment to the Eleventh Amended Articles of
Incorporation of Ferro Corporation filed December 28, 1994. (Reference is
made to Exhibit (3)(b) to Ferro Corporation's Quarterly Report on Form
10-Q for the three months ended June 30, 1998, which Exhibit is
incorporated here by reference.)
(c) Certificate of Amendment to the Eleventh Amended Articles of
Incorporation of Ferro Corporation filed January 19, 1998. (Reference is
made to Exhibit (3)(c) to Ferro Corporation's Quarterly Report on Form
10-Q for the three months ended June 30, 1998, which Exhibit is
incorporated here by reference.)
(d) Amended Code of Regulations. (Reference is made to Exhibit (3)(d) to
Ferro Corporation's Quarterly Report on Form 10-Q for the three months
ended June 30, 1998, which Exhibit is incorporated here by reference.)
(4) Instruments defining rights of security holders, including indentures
(a) Revolving Credit Agreement by and between Ferro Corporation and seven
commercial banks dated May 9, 2000. (Reference is made to Exhibit 4(a) to
Ferro Corporation's quarterly report on Form 10-Q for the three months
ended March 31, 2000, which Exhibit is incorporated here by reference.)
(b) Amended and Restated Shareholder Rights Agreement between Ferro
Corporation and National City Bank, Cleveland, Ohio, as Rights Agent,
dated as of December 10, 1999. (Reference is made to Exhibit 4(k) to Ferro
Corporation's Form 10-K for the year ended December 31, 1999, which
Exhibit is incorporated here by reference.)
(c) The rights of the holders of Ferro's Debt Securities issued and to be
issued pursuant to an Indenture between Ferro Corporation and Society
National Bank, as Trustee, are described in the form of Indenture dated
May 1, 1993. (Reference is made to Exhibit 4(j) to Ferro Corporation's
Form 10-Q for the three months ended June 30, 1993, which Exhibit is
incorporated here by reference.)
(d) The rights of the holders of Ferro's Debt Securities issued and to be
issued pursuant to a Senior Indenture between Ferro Corporation and Chase
Manhattan Trust Company, National Association, as Trustee, are described
in the Senior Indenture, dated March 25, 1998. (Reference is made to
Exhibit 4 (c) to Ferro Corporation's Quarterly Report on Form 10-Q for the
three months ended March 31, 1998, which Exhibit is incorporated here by
reference.)
(e) Form of Security (7 1/8% Debentures due 2028). (Reference is made to
Exhibit 4(a-1) to Ferro Corporation's Form 8-K filed March 31, 1998, which
Exhibit is incorporated here by reference.)
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(10) Material Agreements
(a) Change of Control Agreements
The Company has entered into change in control agreements with the
following officers of the Company, which are substantially identical in
all material respects to the form of change in control agreement filed as
Exhibit 10(j) to the Company's Form 10-K for the year ended December 31,
1999.
James C. Bays
David G. Campopiano
*(b) Heads of Agreement
Ferro Corporation and OM Group Inc. entered into a Heads of Agreement
dated as of April 23, 2001, pursuant to which Ferro Corporation has agreed
to purchase and OM Group Inc. has agreed to sell certain businesses and
operations which OM Group Inc. acquired from dmc(2) Degussa Metals
Catalysts Cerdec AG pursuant to an agreement among OM Group Inc. and
dmc(2) Degussa Metals Catalysts Cerdec AG and its parent company,
Degussa AG.
*(11) Computation of Earnings Per Share
*(12) Ratio of Earnings to Fixed Charges
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