UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

______________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

☐ 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, a 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 check mark 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 September 30, 2021, there were 82,742,307 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	28
Item 3. Quantitative and Qualitative Disclosures about Market Risk	39
Item 4. Controls and Procedures	40
PART II
Item 1. Legal Proceedings	42
Item 1A. Risk Factors	42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3. Defaults Upon Senior Securities	42
Item 4. Mine Safety Disclosures	42
Item 5. Other Information	43
Item 6. Exhibits	43
Signatures
Exhibit Index
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 September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)	2021		2020		2021		2020
Net sales	$	277,228	$	241,877	$	859,917	$	699,004
Cost of sales	193,850		171,711		586,601		484,356
Gross profit	83,378		70,166		273,316		214,648
Selling, general and administrative expenses	54,520		47,820		167,384		154,407
Restructuring and impairment charges	602		2,447		7,756		12,231
Other expense (income):
Interest expense	5,436		4,767		19,879		16,474
Interest earned	(88)		(474)		(737)		(1,035)
Foreign currency losses, net	426		1,450		4,793		1,278
Loss on extinguishment of debt	—		—		1,981		—
Miscellaneous income, net	(2,997)		(438)		(5,350)		(2,604)
Income before income taxes	25,479		14,594		77,610		33,897
Income tax expense	13,800		5,047		29,946		10,364
Income from continuing operations	11,679		9,547		47,664		23,533
Income (loss) from discontinued operations, net of income taxes	(822)		5,367		87,484		2,350
Net income	10,857		14,914		135,148		25,883
Less: Net income attributable to noncontrolling interests	482		440		1,301		826
Net income attributable to Ferro Corporation    common shareholders	$	10,375	$	14,474	$	133,847	$	25,057
Earnings (loss) per share attributable to Ferro Corporation common shareholders:
Basic earnings (loss):
Continuing operations	$	0.14	$	0.11	$	0.56	$	0.28
Discontinued operations	(0.01)		0.07		1.06		0.03
	$	0.13	$	0.18	$	1.62	$	0.31
Diluted earnings (loss):
Continuing operations	$	0.13	$	0.11	$	0.56	$	0.27
Discontinued operations	(0.01)		0.06		1.05		0.03
	$	0.12	$	0.17	$	1.61	$	0.30

See accompanying notes to condensed consolidated financial statements.

3

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Net income	$	10,857	$	14,914	$	135,148	$	25,883
Other comprehensive income (loss), net of income tax:
Foreign currency translation gain (loss)	(3,997)		13,831		(64,411)		(678)
Cash flow hedging instruments, unrealized income (loss)	1,553		269		9,622		(10,331)
Postretirement benefit liabilities income	2		—		131		—
Other comprehensive income (loss), net of income tax	(2,442)		14,100		(54,658)		(11,009)
Total comprehensive income	8,415		29,014		80,490		14,874
Less: Comprehensive income attributable to     noncontrolling interests	935		197		1,141		453
Comprehensive income attributable to Ferro Corporation	$	7,480	$	28,817	$	79,349	$	14,421

See accompanying notes to condensed consolidated financial statements.

4

Ferro Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)	September 30, 2021		December 31, 2020
ASSETS
Current assets
Cash and cash equivalents	$	148,754	$	174,077
Accounts receivable, net	157,610		137,008
Inventories	267,994		260,332
Other receivables	65,654		72,272
Other current assets	20,835		18,261
Current assets held-for-sale	—		307,854
Total current assets	660,847		969,804
Other assets
Property, plant and equipment, net	326,982		330,045
Goodwill	172,968		175,351
Intangible assets, net	110,049		119,500
Deferred income taxes	108,426		115,962
Operating leased assets	13,387		15,446
Other non-current assets	26,604		80,618
Non-current assets held-for-sale	—		154,207
Total assets	$	1,419,263	$	1,960,933
LIABILITIES AND EQUITY
Current liabilities
Loans payable and current portion of long-term debt	$	8,888	$	8,839
Accounts payable	127,526		135,296
Accrued payrolls	38,642		27,166
Accrued expenses and other current liabilities	147,456		124,770
Current liabilities held-for-sale	—		107,545
Total current liabilities	322,512		403,616
Other liabilities
Long-term debt, less current portion	352,695		791,509
Postretirement and pension liabilities	161,548		181,610
Operating leased non-current liabilities	8,624		10,064
Other non-current liabilities	51,882		62,050
Non-current liabilities held-for-sale	—		71,149
Total liabilities	897,261		1,519,998
Equity
Ferro Corporation shareholders’ equity:
Common stock, par value $1.00 per share; 300.0 million shares authorized;   93.4 million shares issued; 82.7 million and 82.4 million shares outstanding at September 30, 2021, and December 31, 2020, respectively	93,436		93,436
Paid-in capital	289,899		293,682
Retained earnings	438,662		304,815
Accumulated other comprehensive loss	(144,208)		(89,710)
Common shares in treasury, at cost	(165,008)		(172,256)
Total Ferro Corporation shareholders’ equity	512,781		429,967
Noncontrolling interests	9,221		10,968
Total equity	522,002		440,935
Total liabilities and equity	$	1,419,263	$	1,960,933

See accompanying notes to condensed consolidated financial statements.

5

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Equity

	Ferro Corporation Shareholders											Non- controlling Interests		Total Equity
	Common Shares in Treasury			Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In thousands)	Shares	Amount
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)		—		—		(2,888)		(5,418)
Stock-based compensation transactions	(255)	5,154		—		(2,614)		—		—		—		2,540
Balances at March 31, 2021	10,810	(167,102)		93,436		288,538		412,778		(143,821)		8,443		492,272
Net income (loss)	—	—		—		—		15,509		—		382		15,891
Other comprehensive income (loss)	—	—		—		—		—		2,508		(539)		1,969
Stock-based compensation transactions	(79)	1,413		—		747		—		—		—		2,160
Balances at June 30, 2021	10,731	(165,689)		93,436		289,285		428,287		(141,313)		8,286		512,292
Net income (loss)	—	—		—		—		10,375		—		482		10,857
Other comprehensive income (loss)	—	—		—		—		—		(2,895)		453		(2,442)
Stock-based compensation transactions	(38)	681		—		614		—		—		—		1,295
Balances at September 30, 2021	10,693	$	(165,008)	$	93,436	$	289,899	$	438,662	$	(144,208)	$	9,221	$	522,002

	Ferro Corporation Shareholders											Non- controlling  Interests		Total  Equity
	Common Shares in Treasury			Common Stock		Paid-in  Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In thousands)	Shares	Amount
Balances at December 31, 2019	11,431	$	(180,243)	$	93,436	$	294,543	$	262,016	$	(109,376)	$	9,826	$	370,202
Net income (loss)	—	—		—		—		16,123		—		10		16,133
Other comprehensive income (loss)	—	—		—		—		—		(27,312)		(94)		(27,406)
Stock-based compensation transactions	(238)	5,332		—		(2,723)		—		—		—		2,609
Balances at March 31, 2020	11,193	(174,911)		93,436		291,820		278,139		(136,688)		9,742		361,538
Net income (loss)	—	—		—		—		(5,540)		—		376		(5,164)
Other comprehensive income (loss)	—	—		—		—		—		2,333		(36)		2,297
Stock-based compensation transactions	(8)	159		—		1,825		—		—		—		1,984
Balances at June 30, 2020	11,185	(174,752)		93,436		293,645		272,599		(134,355)		10,082		360,655
Net income (loss)	—	—		—		—		14,474		—		440		14,914
Other comprehensive income (loss)	—	—		—		—		—		14,343		(243)		14,100
Stock-based compensation transactions	(40)	807		—		432		—		—		—		1,239
Balances at September 30, 2020	11,145	$	(173,945)	$	93,436	$	294,077	$	287,073	$	(120,012)	$	10,279	$	390,908

See accompanying notes to condensed consolidated financial statements.

6

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

	Nine Months Ended September 30,
(Dollars in thousands)	2021		2020
Cash flows from operating activities
Net cash used in operating activities	$	(64,949)	$	(106,481)
Cash flows from investing activities
Capital expenditures for property, plant and equipment and other long-lived assets	(25,684)		(21,681)
Collections of financing receivables	90,662		97,299
Proceeds from sale of businesses, net	415,230		—
Business acquisitions, net of cash acquired	(2,200)		—
Other investing activities	436		803
Net cash provided by investing activities	478,444		76,421
Cash flows from financing activities
Net payments under loans payable	(31)		(683)
Principal payments on term loan facility - Amended Credit Facility	(441,150)		(6,150)
Proceeds from revolving credit facility - Amended Credit Facility	50,000		398,336
Principal payments on revolving credit facility - Amended Credit Facility	(50,000)		(392,596)
Other financing activities	(4,022)		(728)
Net cash used in financing activities	(445,203)		(1,821)
Effect of exchange rate changes on cash and cash equivalents	(1,815)		174
Decrease in cash and cash equivalents	(33,523)		(31,707)
Cash and cash equivalents at beginning of period	182,277		104,402
Cash and cash equivalents at end of period	148,754		72,695
Less: Cash and cash equivalents of discontinued operations at end of period	—		8,200
Cash and cash equivalents of continuing operations at end of period	$	148,754	$	64,495
Cash paid during the period for:
Interest	$	21,943	$	20,176
Income taxes	16,637		13,005

See accompanying notes to condensed consolidated financial statements.

7

Ferro Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements

1.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ferro Corporation (“Ferro,” “we,” “us” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. These statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020.

We produce our products primarily in the Europe, Middle East and Africa (“EMEA”) region, the Americas region and the Asia Pacific region.

Operating results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results expected in the subsequent quarter or for the full year ending December 31, 2021.

During the fourth quarter of 2019, substantially all of the assets and liabilities of our Tile Coatings business were classified as held-for-sale in the accompanying consolidated balance sheets. As further discussed in Note 4, we entered into a definitive agreement to sell our Tile Coatings business, which has historically been included in the Performance Coatings reportable segment. Therefore, the associated operating results, net of income tax, have been classified as discontinued operations in the accompanying consolidated statements of operations for all periods presented. Throughout this Quarterly Report on Form 10-Q, with the exception of the statements of cash flows and unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

On February 25, 2021, we completed the sale of our Tile Coatings business to Pigments Spain, S.L., a company of the Esmalglass-Itaca-Fritta group, which is a portfolio company of certain Lone Star Funds.

Certain reclassifications have been made to the prior year financial statements to conform to current year classifications. The reclassification relates to the balance sheet presentation of assets as held for sale in relation to the Tile Coatings business transaction. Additional reclassification relates to the disclosure of revenue disaggregation by geographic regions. As of January 1, 2021, the United States and Latin America regions were combined into the Americas region.

Pending Merger

On May 11, 2021, Ferro, PMHC II Inc., a Delaware corporation (“Prince”) and PMHC Fortune Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Prince (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Ferro (the “Merger”), with Ferro continuing as the surviving corporation in the Merger and as a direct or indirect wholly owned subsidiary of Prince. The board of directors of Ferro has approved the Merger Agreement.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), and as a result of the Merger, each share of common stock of Ferro (“Ferro Common Stock”) that is issued and outstanding immediately prior to the Effective Time (other than (i) shares of Ferro Common Stock held by Ferro as treasury stock or held directly by Prince or any subsidiary of Prince (including Merger Sub) immediately prior to the Effective Time (which will be canceled without payment of any consideration), (ii) shares of Ferro Common Stock for which dissenters rights have been properly exercised and perfected and not withdrawn and (iii) shares of restricted stock) will be converted into the right to receive $22.00 in cash, without interest (the “Merger Consideration”).

Pursuant to the Merger Agreement, as of the Effective Time, each option to acquire shares of Ferro Common Stock, whether vested or unvested, that is outstanding immediately prior to the Effective Time will be converted into the right to receive an amount in cash (less any applicable withholding taxes) equal to (A) the number of shares of Ferro Common Stock subject to such option, multiplied by (B) the excess, if any, of the Merger Consideration over the applicable per share exercise price of such option.

8

In addition, pursuant to the Merger Agreement, as of the Effective Time, (i) each outstanding share of Ferro restricted stock, each restricted share unit (other than performance share units), deferred share unit, phantom share unit or similar stock right, whether vested or unvested, that is outstanding immediately prior to the Effective Time will be converted into the right to receive an amount in cash (less any applicable withholding taxes) equal to (A) the number of shares of Ferro Common Stock subject to such right, multiplied by (B) the Merger Consideration, and (ii) each Ferro performance-based share unit, whether vested or unvested, that is outstanding immediately prior to the Effective Time will be converted into the right to receive an amount in cash (less any applicable withholding taxes) equal to (A) the number of shares of Ferro Common Stock subject to such performance-based share unit, calculated based on the greater of (x) actual performance achieved in accordance with the terms of such performance-based share unit and the Merger Agreement and (y) target level performance over the entire performance period applicable with respect to such performance-based share unit, multiplied by (B) the Merger Consideration.

Ferro and Prince have agreed to use their respective reasonable best efforts to consummate the Merger, including making filings with and seeking approvals from certain governmental entities necessary in connection with the Merger, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). In furtherance thereof, Prince has agreed to accept certain divestitures or restrictions on the assets of Prince, Ferro and their respective subsidiaries, if and to the extent necessary to obtain such approvals, subject to certain specified limitations set forth in the Merger Agreement.

Consummation of the Merger is subject to certain customary conditions, including (i) the adoption of the Merger Agreement by the holders of two-thirds of the outstanding shares of Ferro Common Stock, (ii) the absence of any law prohibiting or order preventing the consummation of the Merger, (iii) the receipt of certain regulatory approvals, including expiration or termination of any applicable waiting period under the HSR Act, (iv) the absence of a material adverse effect with respect to Ferro, and (v) compliance in all material respects on the part of each of Ferro and Prince with such party’s covenants under the Merger Agreement. The obligation of each party to consummate the Merger is also conditioned upon the other party’s representations and warranties being true and correct, subject to certain materiality exceptions.

2.    Recent Accounting Pronouncements

Recently Adopted Accounting Standards

This section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.

New Accounting Standards Not Yet Adopted

We are currently evaluating the impact on our financial statements of the following ASU:

Standard	Description
ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, issued March, 2020	Provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU are effective for all entities through December 31, 2022.

No other new accounting pronouncements issued had, or are expected to have, a material impact on the Company’s consolidated financial statements.

3.    Revenue

Revenues disaggregated by geography and reportable segment for the three months ended September 30, 2021, follow:

(Dollars in thousands)	EMEA		Americas		Asia Pacific		Total
Functional Coatings	$	81,508	$	66,005	$	32,055	$	179,568
Color Solutions	34,186		52,692		10,782		97,660
Total net sales	$	115,694	$	118,697	$	42,837	$	277,228

9

Revenues disaggregated by geography and reportable segment for the three months ended September 30, 2020, follow:

(Dollars in thousands)	EMEA		Americas		Asia Pacific		Total
Functional Coatings	$	65,081	$	62,358	$	26,779	$	154,218
Color Solutions	30,472		46,421		10,766		87,659
Total net sales	$	95,553	$	108,779	$	37,545	$	241,877

Revenues disaggregated by geography and reportable segment for the nine months ended September 30, 2021, follow:

(Dollars in thousands)	EMEA		Americas		Asia Pacific		Total
Functional Coatings	$	261,449	$	205,969	$	91,881	$	559,299
Color Solutions	111,186		156,560		32,872		300,618
Total net sales	$	372,635	$	362,529	$	124,753	$	859,917

Revenues disaggregated by geography and reportable segment for the nine months ended September 30, 2020, follow:

(Dollars in thousands)	EMEA		Americas		Asia Pacific		Total
Functional Coatings	$	192,009	$	179,048	$	70,268	$	441,325
Color Solutions	96,235		132,272		29,172		257,679
Total net sales	$	288,244	$	311,320	$	99,440	$	699,004

4.    Discontinued Operations

During the fourth quarter of 2019, substantially all of the assets and liabilities of our Tile Coatings business were classified as held-for-sale in the accompanying consolidated balance sheets. We entered into a definitive agreement to sell our Tile Coatings business, which has historically been a part of our Performance Coatings reportable segment. Therefore, the associated operating results, net of income tax, have been classified as discontinued operations in the accompanying consolidated statements of operations for all periods presented.

On February 25, 2021, we completed the sale of our Tile Coatings business to Pigments Spain, S.L., a company of the Esmalglass-Itaca-Fritta group (the “Buyer”), which is a portfolio company of certain Lone Star Funds, for $460.0 million in cash, subject to post-closing adjustments. The transaction resulted in net proceeds of approximately $415.2 million after expenses and a gain of $100.1 million, which is recorded within Income (loss) from discontinued operations, net of income taxes in our consolidated statement of operations for the quarter ended March 31, 2021. We entered into a Transition Services Agreement (“TSA”) with the Buyer, which is designed to facilitate an orderly transfer of business operations. The services provided under the TSA will terminate at various points in times between six to twelve months from the completion of the sale. Except for customary post-closing adjustments and transition services, we have no continuing involvement with the Buyer subsequent to the completion of the sale.

10

The table below summarizes results for the Tile Coatings business for the three and nine months ended September 30, 2021 and 2020, which are reflected in our consolidated statements of operations as Income (loss) from discontinued operations, net of income taxes. Interest expense has been allocated to the discontinued operations based on the ratio of net assets of the Tile Coatings business to consolidated net assets excluding debt.

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Net sales	$	—	$	120,163	$	83,579	$	310,167
Cost of sales	—		89,120		60,634		235,095
Gross profit	—		31,043		22,945		75,072
Selling, general and administrative expenses	—		18,549		20,327		52,899
Restructuring and impairment charges	—		269		303		2,306
Interest expense	—		2,950		1,682		7,698
Interest earned	—		(21)		(189)		(174)
Foreign currency losses, net	—		113		363		5,074
Gain on sale of business, net	—		—		(100,057)		—
Miscellaneous expense, net	—		173		251		1,420
Income from discontinued operations before income taxes	—		9,010		100,265		5,849
Income tax expense	822		3,643		12,781		3,499
Income (loss) from discontinued operations, net of    income taxes	(822)		5,367		87,484		2,350
Less: Net (loss) income attributable to    noncontrolling interests	—		(11)		64		33
Net income attributable to Tile Coatings business	$	(822)	$	5,378	$	87,420	$	2,317

11

The following table summarizes the assets and liabilities which are classified as held-for-sale at December 31, 2020:

(Dollars in thousands)	December 31, 2020
Cash and cash equivalents	$	8,200
Accounts receivable, net	211,548
Inventories	84,239
Other receivables	1,630
Other current assets	2,237
Current assets held-for-sale	307,854
Property, plant and equipment, net	93,430
Intangible assets, net	42,126
Deferred income taxes	12,267
Other non-current assets	6,384
Non-current assets held-for-sale	154,207
Total assets held-for-sale	$	462,061
Loans payable and current portion of long-term debt	$	3,927
Accounts payable	85,308
Accrued payrolls	5,946
Accrued expenses and other current liabilities	12,364
Current liabilities held-for-sale	107,545
Long-term debt, less current portion	56,359
Postretirement and pension liabilities	8,119
Other non-current liabilities	6,671
Non-current liabilities held-for-sale	71,149
Total liabilities held-for-sale	$	178,694

The following table summarizes cash flow data relating to discontinued operations for the nine months ended September 30, 2021 and 2020:

	Nine Months Ended September 30,
(Dollars in thousands)	2021		2020
Capital expenditures	$	(1,074)	$	(3,048)
Gain on sale of discontinued operations	(100,057)		—
Non-cash operating activities - restructuring and impairment charges	—		1,091
Non-cash investing activities - capital expenditures, consisting of unpaid capital expenditure liabilities at period end	—		683

5.    Inventories

(Dollars in thousands)	September 30, 2021		December 31, 2020
Raw materials	$	80,430	$	81,344
Work in process	47,064		48,770
Finished goods	140,500		130,218
Total inventories	$	267,994	$	260,332

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In the production of some of our products, we use precious metals, which we obtain from financial institutions under consignment agreements with terms of one year or less. The financial institutions retain ownership of the precious metals and charge us fees based on the amounts we consign. These fees were $0.7 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively, and $2.1 million and $2.3 million for the nine months ended September 30, 2021 and 2020, respectively. We had on-hand precious metals owned by participants in our precious metals consignment program of $80.7 million at September 30, 2021, and $87.2 million at December 31, 2020, measured at fair value based on market prices for identical assets.

6.    Property, Plant and Equipment

Property, plant and equipment is reported net of accumulated depreciation of $453.1 million at September 30, 2021 and $456.3 million at December 31, 2020. As discussed in Note 4, the assets of our Tile Coatings business were classified as held-for-sale under ASC Topic 360; Property, Plant, and Equipment. As such, additional accumulated depreciation of $135.3 million at December 31, 2020 was classified as Non-current assets held for sale.

Unpaid capital expenditure liabilities, which are non-cash investing activities, were $2.5 million at September 30, 2021 and $2.9 million at September 30, 2020.

7.    Goodwill and Other Intangible Assets

Details and activity in the Company’s goodwill by segment follow:

(Dollars in thousands)	Functional Coatings		Color Solutions		Total
Goodwill, net at December 31, 2020	$	123,570	$	51,781	$	175,351
Foreign currency adjustments	(1,816)		(567)		(2,383)
Goodwill, net at September 30, 2021	$	121,754	$	51,214	$	172,968

(Dollars in thousands)	September 30, 2021		December 31, 2020
Goodwill, gross	$	231,435	$	233,818
Accumulated impairment	(58,467)		(58,467)
Goodwill, net	$	172,968	$	175,351

Goodwill is tested for impairment at the reporting unit level on an annual basis in the fourth quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value. As of September 30, 2021, the Company is not aware of any events or circumstances that occurred which would require a goodwill impairment test.

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Amortizable intangible assets consisted of the following:

(Dollars in thousands)	September 30, 2021		December 31, 2020
Gross amortizable intangible assets:
Patents	$	5,494	$	5,589
Land rights	3,215		3,173
Technology/know-how and other	116,121		116,015
Customer relationships	66,276		68,142
Total gross amortizable intangible assets	191,106		192,919
Accumulated amortization:
Patents	(5,472)		(5,566)
Land rights	(1,718)		(1,630)
Technology/know-how and other	(67,541)		(61,104)
Customer relationships	(19,197)		(18,317)
Total accumulated amortization	(93,928)		(86,617)
Amortizable intangible assets, net	$	97,178	$	106,302

Indefinite-lived intangible assets consisted of the following:

(Dollars in thousands)	September 30, 2021		December 31, 2020
Indefinite-lived intangibles assets:
Trade names and trademarks	$	12,871	$	13,198

8.    Debt

Loans payable and current portion of long-term debt consisted of the following:

(Dollars in thousands)	September 30, 2021		December 31, 2020
Current portion of long-term debt	$	8,888	$	8,839
Loans payable and current portion of long-term debt	$	8,888	$	8,839

Long-term debt consisted of the following:

(Dollars in thousands)	September 30, 2021		December 31, 2020
Term loan facility, net of unamortized issuance costs, maturing 2024(1)	$	355,058	$	793,731
Finance lease obligations	2,663		2,911
Other notes	3,862		3,706
Total long-term debt	361,583		800,348
Current portion of long-term debt	(8,888)		(8,839)
Long-term debt, less current portion	$	352,695	$	791,509

(1)The carrying value of the term loan facility, maturing 2024, is net of unamortized debt issuance costs of $1.2 million at September 30, 2021 and $3.7 million at December 31, 2020.

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Amended Credit Facility

On April 25, 2018, the Company entered into an amendment (the “Amended Credit Facility”) to its existing credit facility (the “Credit Facility”), which Amended Credit Facility (a) provided a new revolving facility (the “2018 Revolving Facility”), which replaced the Company’s existing revolving facility, (b) repriced the (“Tranche B-1 Loans”), and (c) provided new tranches of term loans (“Tranche B-2 Loans” and “Tranche B-3 Loans”) denominated in U.S. dollars. On May 4, 2020, the Company entered into an amendment (Third Amendment to Credit Agreement) to the Amended Credit Facility, which added an approval to Section 7.2.8 Permitted Dispositions for the Tile Coatings Business Disposition. The Amended Credit Facility will be used for ongoing working capital requirements and general corporate purposes. The Tranche B-2 Loans are borrowed by the Company and the Tranche B-3 Loans are borrowed on a joint and several basis by Ferro GmbH and Ferro Europe Holdings LLC.

The Amended Credit Facility consists of a $500 million secured revolving line of credit with a maturity of February 14, 2023, a $355 million secured term loan facility with a maturity of February 14, 2024, a $235 million secured term loan facility with a maturity of February 14, 2024 and a $230 million secured term loan facility with a maturity of February 14, 2024. The term loans are payable in equal quarterly installments in an amount equal to 0.25% of the original principal amount of the term loans, with the remaining balance due on the maturity date thereof. In addition, the Company is required, on an annual basis, to make a prepayment in an amount equal to a portion of the Company’s excess cash flow, as calculated pursuant to the Amended Credit Facility, which prepayment will be applied first to the term loans until they are paid in full, and then to the revolving loans.

Subject to the satisfaction of certain conditions, the Company can request additional commitments under the revolving line of credit or term loans in the aggregate principal amount of up to $250 million to the extent that existing or new lenders agree to provide such additional commitments and/or term loans. The Company can also raise certain additional debt or credit facilities subject to satisfaction of certain covenant levels.

Certain of the Company’s U.S. subsidiaries have guaranteed the Company’s obligations under the Amended Credit Facility and such obligations are secured by (a) substantially all of the personal property of the Company and the U.S. subsidiary guarantors and (b) a pledge of 100% of the stock of certain of the Company’s U.S. subsidiaries and 65% of the stock of certain of the Company’s direct foreign subsidiaries. The Tranche B-3 Loans are guaranteed by the Company, the U.S. subsidiary guarantors and a cross-guaranty by the borrowers of the Tranche B-3 Loans and are secured by the collateral securing the revolving loans and the other term loans, in addition to a pledge of the equity interests of Ferro GmbH.

Interest Rate – Term Loans: The interest rates applicable to the term loans will be, at the Company’s option, equal to either a base rate or a LIBOR rate plus, in both cases, an applicable margin.

•The base rate for term loans will be the highest of (i) the federal funds rate plus 0.50% (ii) the syndication agent’s prime rate, (iii) the daily LIBOR rate plus 1.00% or (iv) 0.00%. The applicable margin for base rate loans is 1.25%.

•The LIBOR rate for term loans shall not be less than 0.0% and the applicable margin for LIBOR rate term loans is 2.25%.

•For LIBOR rate term loans, the Company may choose to set the duration on individual borrowings for periods of one, two, three or six months, with the interest rate based on the applicable LIBOR rate for the corresponding duration.

At September 30, 2021, the Company had borrowed $154.3 million under the Tranche B-1 Loans at an interest rate of 2.38%, $102.1 million under the Tranche B-2 Loans at an interest rate of 2.38% and $99.9 million under the Tranche B-3 Loans at an interest rate of 2.38%. At September 30, 2021, there were no additional borrowings available under the Tranche B-1 Loans, Tranche B-2 Loans, or Tranche B-3 Loans. In connection with these borrowings, we entered into swap agreements in the second quarter of 2018. At September 30, 2021, the effective interest rate for all tranches of the term loan facility, inclusive of hedging activities, was 4.84%.

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Interest Rate – Revolving Credit Line: The interest rates applicable to loans under the 2018 Revolving Credit Facility will be, at the Company’s option, equal to either a base rate or a LIBOR rate plus, in both cases, an applicable variable margin. The variable margin will be based on the ratio of (a) the Company’s total consolidated net debt outstanding (as defined in the Amended Credit Agreement) at such time to (b) the Company’s consolidated EBITDA (as defined in the Amended Credit Agreement) computed for the period of four consecutive fiscal quarters most recently ended.

•The base rate for revolving loans will be the highest of (i) the federal funds rate plus 0.50%, (ii) the syndication agent’s prime rate, (iii) the daily LIBOR rate plus 1.00% or (iv) 0.00%. The applicable margin for base rate loans will vary between 0.50% to 1.50%.

•The LIBOR rate for revolving loans shall not be less than 0% and the applicable margin for LIBOR rate revolving loans will vary between 1.50% and 2.50%.

•For LIBOR rate revolving loans, the Company may choose to set the duration on individual borrowings for periods of one, two, three or six months, with the interest rate based on the applicable LIBOR rate for the corresponding duration.

At September 30, 2021, there were no borrowings under the 2018 Revolving Credit Facility. After reductions for outstanding letters of credit secured by these facilities, we had $496.1 million of additional borrowings available under the revolving credit facilities at September 30, 2021.

The Amended Credit Facility contains customary restrictive covenants including, but not limited to, limitations on use of loan proceeds, limitations on the Company’s ability to pay dividends and repurchase stock, limitations on acquisitions and dispositions, and limitations on certain types of investments. The Amended Credit Facility also contains standard provisions relating to conditions of borrowing and customary events of default, including the non-payment of obligations by the Company and the bankruptcy of the Company.

Specific to the 2018 Revolving Credit Facility, the Company is subject to a financial covenant regarding the Company’s maximum leverage ratio. If an event of default occurs, all amounts outstanding under the Amended Credit Facility agreement may be accelerated and become immediately due and payable. At September 30, 2021, we were in compliance with the covenants of the Amended Credit Facility.

As noted in Note 4, on February 25, 2021, we completed the sale of our Tile Coatings business. Proceeds from the close of the transaction, in addition to current cash balances, were used to pay down our term loan facility in the amount of $