Ferro Corporation announced 20 June 2008 that it is taking additional actions to rationalize manufacturing and reduce expenses worldwide. The company has said it will discontinue manufacturing tile fr…
Ferro Corporation announced 20 June 2008 that it is taking additional actions to rationalize manufacturing and reduce expenses worldwide. The company has said it will discontinue manufacturing tile frits and tile color products at its facilities in Americana, Brazil by the end of June 2008. Color products required by Brazilian customers after this time will be provided by Ferro facilities in Mexico and Spain. “We believe these changes will allow us to reduce our operating costs and compete more effectively in the important north Brazil market”, said John Kelly, Latin American business manager, Inorganic Specialties Group. “We will continue to provide the high-quality color products and technical service that tile manufacturers need to be successful and will work closely with our customers to ensure a smooth transition through these changes”. Ferro will continue to make porcelain enamel frit and glass color and glaze products at the Americana site. The company said that discontinuing tile color materials production will reduce employment at the Brazilian location by approximately 73 positions, and annual savings are expected to be approximately USD 2.0 million to USD 2.5 million. The company expects to record a pre-tax charge related to the actions in Brazil during the 2Q, ended 30 June 2008, of approximately USD 1.4 million, including approximately USD 0.9 million in severance costs and USD 0.5 in asset impairment charges. The charges are expected to reduce diluted earnings per share for the 2Q by approximately USD 0.02. The company also announced that it would take additional actions in its Inorganic Specialties business as a part of its continuing initiatives to reduce expenses. As a result of these actions, Ferro expects to reduce employment by approximately 13 positions, primarily in Europe and Asia, and to record a pre-tax charge of approximately USD 2.2 million related to severance costs in the quarter ended 30 June 2008. This charge is expected to reduce diluted earnings per share in the quarter ending 30 June 2008, by approximately USD 0.03. Annual savings resulting from the additional worldwide expense reduction initiatives is expected to be approximately USD 1.4 million.