UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021

or

o	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)

OH (State or other jurisdiction of incorporation or organization)	34-0217820 (I.R.S. Employer Identification No.)
6060 Parkland Boulevard Suite 250 Mayfield Heights, OH (Address of principal executive offices)	44124 (Zip Code)
216-875-5600 (Registrant’s telephone number, including area code)

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 o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated Filer	o
Non-accelerated Filer	o	Smaller Reporting Company	o
		Emerging Growth Company	o

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO x

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00	FOE	NYSE

At June 30, 2021, there were 82,704,290 shares of Ferro Common Stock, par value $1.00, outstanding.

TABLE OF CONTENTS

		Page
PART I
Item 1. Financial Statements (Unaudited)	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	36
Item 4. Controls and Procedures	37
PART II
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	39
Item 6. Exhibits	39
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I — FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands, except per share amounts)	2021		2020		2021		2020
Net sales	$	294,331	$	204,801	$	582,689	$	457,127
Cost of sales		199,496		141,057		392,751		312,645
Gross profit		94,835		63,744		189,938		144,482
Selling, general and administrative expenses		59,026		50,541		112,864		106,587
Restructuring and impairment charges		1,970		8,619		7,154		9,784
Other expense (income):
Interest expense		5,006		6,177		14,443		11,707
Interest earned		(52)		(307)		(649)		(561)
Foreign currency losses (gains), net		3,209		1,143		4,367		(172)
Loss on extinguishment of debt		—		—		1,981		—
Miscellaneous income, net		(253)		(703)		(2,353)		(2,166)
Income (loss) before income taxes		25,929		(1,726)		52,131		19,303
Income tax expense		8,502		200		16,146		5,317
Income (loss) from continuing operations		17,427		(1,926)		35,985		13,986
Income (loss) from discontinued operations, net of income taxes		(1,536)		(3,238)		88,306		(3,017)
Net income (loss)		15,891		(5,164)		124,291		10,969
Less: Net income attributable to noncontrolling interests		382		376		819		386
Net income (loss) attributable to Ferro Corporation common shareholders	$	15,509	$	(5,540)	$	123,472	$	10,583
Earnings (loss) per share attributable to Ferro Corporation common shareholders:
Basic earnings:
Continuing operations	$	0.21	$	(0.03)	$	0.43	$	0.17
Discontinued operations		(0.02)		(0.04)		1.07		(0.04)
	$	0.19	$	(0.07)	$	1.50	$	0.13
Diluted earnings:
Continuing operations	$	0.20	$	(0.03)	$	0.42	$	0.16
Discontinued operations		(0.02)		(0.04)		1.06		(0.04)
	$	0.18	$	(0.07)	$	1.48	$	0.12

See accompanying notes to condensed consolidated financial statements.

3

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Net income (loss)	$	15,891	$	(5,164)	$	124,291	$	10,969
Other comprehensive income (loss), net of income tax:
Foreign currency translation gain (loss)		687		3,857		(60,414)		(14,509)
Cash flow hedging instruments, unrealized income (loss)		1,283		(1,560)		8,069		(10,600)
Postretirement benefit liabilities income		(1)		—		129		—
Other comprehensive income (loss), net of income tax		1,969		2,297		(52,216)		(25,109)
Total comprehensive income (loss)		17,860		(2,867)		72,075		(14,140)
Less: Comprehensive income (loss) attributable to noncontrolling interests		(157)		340		206		256
Comprehensive income (loss) attributable to Ferro Corporation	$	18,017	$	(3,207)	$	71,869	$	(14,396)

See accompanying notes to condensed consolidated financial statements.

4

Ferro Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30,		December 31,
(Dollars in thousands)	2021		2020
ASSETS
Current assets
Cash and cash equivalents	$	143,717	$	174,077
Accounts receivable, net		162,375		137,008
Inventories		260,237		260,332
Other receivables		64,240		72,272
Other current assets		20,988		18,261
Current assets held-for-sale		—		307,854
Total current assets		651,557		969,804
Other assets
Property, plant and equipment, net		332,197		330,045
Goodwill		174,005		175,351
Intangible assets, net		112,545		119,500
Deferred income taxes		110,735		115,962
Operating leased assets		13,817		15,446
Other non-current assets		25,825		80,618
Non-current assets held-for-sale		—		154,207
Total assets	$	1,420,681	$	1,960,933
LIABILITIES AND EQUITY
Current liabilities
Loans payable and current portion of long-term debt	$	8,871	$	8,839
Accounts payable		136,303		135,296
Accrued payrolls		28,366		27,166
Accrued expenses and other current liabilities		150,463		124,770
Current liabilities held-for-sale		—		107,545
Total current liabilities		324,003		403,616
Other liabilities
Long-term debt, less current portion		354,729		791,509
Postretirement and pension liabilities		165,951		181,610
Operating leased non-current liabilities		8,588		10,064
Other non-current liabilities		55,118		62,050
Non-current liabilities held-for-sale		—		71,149
Total liabilities		908,389		1,519,998
Equity
Ferro Corporation shareholders’ equity:
Common stock, par value $1 per share; 300.0 million shares authorized; 93.4 million shares issued; 82.7 million and 82.4 million shares outstanding at June 30, 2021, and December 31, 2020, respectively		93,436		93,436
Paid-in capital		289,285		293,682
Retained earnings		428,287		304,815
Accumulated other comprehensive loss		(141,313)		(89,710)
Common shares in treasury, at cost		(165,689)		(172,256)
Total Ferro Corporation shareholders’ equity		504,006		429,967
Noncontrolling interests		8,286		10,968
Total equity		512,292		440,935
Total liabilities and equity	$	1,420,681	$	1,960,933

See accompanying notes to condensed consolidated financial statements.

5

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Equity

	Ferro Corporation Shareholders
	Common Shares									Accumulated
	in Treasury									Other			Non-
				Common		Paid-in		Retained		Comprehensive			controlling		Total
(In thousands)	Shares	Amount		Stock		Capital		Earnings		Loss			Interests		Equity
Balances at December 31, 2020	11,065	$	(172,256)	$	93,436	$	293,682	$	304,815	$	(89,710)		$	10,968	$	440,935
Net income (loss)	—		—		—		—		107,963		—			437		108,400
Other comprehensive income (loss)	—		—		—		—		—		(54,111)			(74)		(54,185)
Change in ownership interest	—		—		—		(2,530)		—		—	<