8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 2, 2020

Ferro Corporation

__________________________________________

(Exact name of registrant as specified in its charter)

Ohio	1-584	34-0217820
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
6060 Parkland Boulevard Suite 250, Mayfield Heights, Ohio		44124
_______________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 216-875-5600

Not Applicable

______________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

o Emerging growth company

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

Item 2.02 Results of Operations and Financial Condition.

On Monday, March 2, 2020, Ferro Corporation ("the Company") issued a press release that discussed financial results for the three-month and twelve-month periods ended December 31, 2019 and provided the Company’s outlook for 2020. The press release also provided information regarding a conference call to be held on Tuesday, March 3, 2020, in which the Company’s management will discuss the financial results and outlook.

A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Exhibit Description
99.1	Press Release dated March 2, 2020
104	The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline eXtensible Business Reporting Language).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Ferro Corporation
March 2, 2020	By:		/s/ Benjamin J. Schlater
			Name: Benjamin J. Schlater
		Title: Group Vice President and Chief Financial Officer

EX-99

FERRO REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

Tile Coatings Systems moved to Discontinued Operations following agreement to sell

Fourth Quarter Continuing Operations*			Full Year Continuing Operations*
	Net Sales declined 7.7% to $245.9M			Net Sales declined 5.9% to $1,018.4M
	Gross Profit of $75.3M, Gross Profit Margin of 30.6%			Gross Profit of $308.8M, Gross Profit Margin of 30.3%
	Adjusted Gross Profit Margin of 31.0%			Adjusted Gross Profit Margin of 31.0%
	GAAP diluted EPS of $(0.03), Adjusted EPS of $0.17			GAAP diluted EPS of $0.41, Adjusted EPS of $0.83
	Net Loss1 of $2.2M			Net Income1 of $34.3M
	Adjusted EBITDA of $37.4M, Adjusted EBITDA Margin of 15.2%			Adjusted EBITDA of $158.9M, Adjusted EBITDA Margin of 15.6%

*Comparative information is relative to prior-year fourth quarter and full year Continuing Operations.

1 Note: Net Income (Loss) attributable to Ferro Corporation common shareholders.

	Ferro’s growth in 2019 was hampered by challenging macro-economic conditions in certain geographies and end markets and by cyclical customer orders falling outside the year. We managed through these challenges with optimization initiatives that enabled operating margins to recover and, with some tailwinds from lower raw material costs, we completed the year comfortably within our revised Total Ferro Adjusted EPS guidance. We are optimistic that the more positive trends in the fourth quarter will continue into 2020, due to continued optimization, as well as economic strengthening in a number of our high-value end markets. We are making progress toward completion of the sale of our Tile Coatings Systems business, which we announced in December 2019. We are looking forward to completion of the sale, after which Ferro will have a portfolio of businesses more concentrated in specialty materials and more targeted to higher-growth end markets.  Our Company also will have better balance to its geographic footprint and the financial flexibility to make greater investments in growth, both organic and inorganic.   2020 will be a transition year for Ferro as we focus on closing the Tile Coatings Systems sale, advancing optimization initiatives, right-sizing the footprint and cost structure of the business, and removing stranded costs. We expect the enhanced profile of Ferro to be in place in 2021, at which point Ferro will be well-positioned to accelerate growth and innovation and to benefit from our ongoing optimization efforts.  After the transition, we believe Ferro should yield, on average, double-digit year-on-year Adjusted EBITDA growth. Peter Thomas Chairman, President and CEO, Ferro Corporation

Key Results from Continuing Operations*    (amounts in millions, except EPS)
Sales and Gross Profits	Q4 2019		% Change		2019		% Change
Net Sales	$	245.9		-7.7%	$	1,018.4		-5.9%
Net Sales (constant currency)		245.9		-6.8%		1,018.4		-3.3%
Gross Profit (GAAP)		75.3		-6.5%		308.8		-9.1%
Adjusted Gross Profit cc		76.2		-8.7%		316.0		-6.3%
Net Income/(Loss), EBITDA and EPS	Q4 2019		% Change		2019		% Change
Net Income/(Loss) 1	$	(2.2)		NM	$	34.3		-38.8%
Adjusted EBITDA		37.4		-11.9%		158.9		-13.9%
GAAP diluted EPS	$	(0.03)		NM	$	0.41		-37.9%
Adjusted EPS		0.17		-48.5%		0.83		-27.2%
Cash Flow		Q4 2019		%Change		2019		%Change
Net Cash provided by operating activities (GAAP)2	$	85.0		-42.3%	$	17.7		NM
Adjusted Free Cash Flow from Operating Activities (Non-GAAP)3		111.0		-29.6%		130.2		-31.2%

*Comparative information is relative to prior-year fourth quarter and full year Continuing Operations.

1 Note: Net Income (Loss) attributable to Ferro Corporation common shareholders.

2 Note: Table 4 Condensed Consolidated Statements of Cash Flows

3 Note: Table 12 Adjusted Free Cash Flow from Operating Activities (Non-GAAP)

2019 Highlights

In the fourth quarter of 2019, Ferro announced that it had signed a definitive agreement to divest its Tile Coating Systems business. Completion of the transaction is expected to occur in the second half of 2020, subject to the receipt of regulatory approvals and the satisfaction or waiver of other customary conditions to closing.  The transaction is expected to yield at close net proceeds of approximately $430 million to $440 million. Management expects net proceeds from the transaction to be used primarily to pay down debt. In accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Tile Coatings Systems business now is being classified as “held for sale” and reported as Discontinued Operations.

The 2019 full-year GAAP diluted EPS for Continuing Operations was $0.41 and Adjusted EPS was $0.83.  Discontinued Operations GAAP EPS was a loss of $0.34.  Included in Discontinued Operations are $42.5 million in impairment charges, $1.4 million in restructuring costs, and $13.6 million in transaction costs, for a total of $57.5 million net of tax, or $0.69 per share, that historically would have been excluded from Adjusted EPS for the year ended December 31, 2019. Without the effect of those charges, combined Continuing Operations and Discontinued Operations EPS would have been near the midpoint of the Company’s 2019 Full Year Adjusted diluted EPS guidance of $1.15 to $1.20. 

The 2019 full-year GAAP Net Income1 for Continuing Operations was $34.3 million. Adjusted EBITDA from Continuing Operations was $158.9 million.  Discontinued Operations Net Loss1 was $28.3 million and Discontinued Operations EBITDA was $44.4 million.  Included in the Discontinued Operations EBITDA are transaction costs of $17.6 million that historically would have been excluded from adjusted EBITDA for the year ended December 31, 2019. Without the effect of those charges, combined Continued and Discontinued Adjusted EBITDA would have been near the Company’s 2019 Full Year Adjusted EBITDA guidance of $222 million to $227 million. 

1 Note: Net Income (Loss) attributable to Ferro Corporation common shareholders.

Segment Results Continuing Operations *(amounts in millions, except EPS)
	Performance Colors & Glass	Q4 2019		% Change		2019		% Change
	Net Sales	$	160.4		-4.8%	$	648.7		-6.1%
	Net Sales (Constant Currency)		160.4		-3.9%		648.7		-3.4%
	Gross Profit (GAAP)		47.9		-0.2%		193.5		-8.9%
	Adjusted Gross Profit (Constant Currency)		48.2		-1.2%		196.1		-4.8%
	Color Solutions	Q4 2019		% Change		2019		% Change
	Net Sales	$	85.5		-12.7%	$	369.7		-5.5%
	Net Sales (Constant Currency)		85.5		-11.8%		369.7		-3.0%
	Gross Profit (GAAP)		27.7		-10.5%		114.9		-7.9%
	Adjusted Gross Profit (Constant Currency)		27.8		-16.0%		117.0		-7.5%

*Comparative information is relative to prior-year fourth quarter and full year.

Full Year 2020 Continuing Operations Guidance

	Net Sales	Adjusted	Adjusted	Net Debt/ Adj. EBITDA
	(% of PY Sales)	EBITDA	Diluted EPS	Leverage
2019 Results	$1.018.4M	$158.9M	$0.83	3.2x
2020 Guidance	flat to +2.0%	$160M - $170M	$0.82 - $0.92	Approximately 1.5x2
YoY Change		Flat  to +7%	Flat to +11%
YoY Constant Change1	2% to 3%	2% to 9%	1% to 13%

The 2020 guidance assumes no acquisitions, divestitures, restructuring, acquisition-related professional fees, optimization programs spend, or repurchase of common stock.

1Remeasurement of 2019 reported and adjusted results using 2020 guidance exchange rates

2Pro forma year end 2020 Net Debt/Adjusted EBITDA reflects reducing debt with anticipated proceeds from closing the Tile Coating Systems sale, in the second half of 2020 and anticipated cashflows for 2020.

Note: The full-year 2020 guidance uses foreign exchange rates as of February 21, 2020 which includes a USD/EUR exchange rate at 1.085.

Ferro is providing Adjusted Diluted EPS and Adjusted EBITDA guidance on a continuing operations basis. While it is likely that Ferro could incur charges for items excluded from Adjusted Diluted EPS and Adjusted EBITDA such as mark-to-market adjustments of pension and other postretirement benefit obligations, restructuring and impairment charges, and legal and professional expenses related to certain business development activities, it is not possible, without unreasonable effort, to identify the amount or significance of these items or the potential for other transactions that may impact future GAAP net income and cash flow from operating activities. Management does not believe these items to be representative of underlying business performance. Management is unable to reconcile, without unreasonable effort, the Company's forecasted range of these adjusted non-GAAP financial measures to their most directly comparable GAAP financial measures.

Currency Exposure 2019 Weighting		2020 Guidance FX sensitivity
EUR - Euro	35% to 40%	% Change	Operating Profit
CNY -Yuan Renminbi	6% to 8%	+1% all FX change	~$0.6 million to ~$0.8 million
MXN – Mexican Peso	2% to 4%	+1% Euro change	~$0.5 million to ~$0.7 million

Constant Currency

Constant currency results reflect the remeasurement of 2018 reported and adjusted local currency results using 2019 exchange rates, which produces constant currency comparative figures to 2019` reported and adjusted results. These non-GAAP financial measures should not be considered as a substitute for the measures of financial performance prepared in accordance with GAAP.

Conference Call

Ferro will conduct an investor teleconference at 8:00 a.m. EDT Tuesday March 3, 2020. Investors can access this conference via any of the following:

• Webcast can be accessed by clicking on the Investors link at the top of Ferro’s website at ferro.com.

• Live telephone: Call 800-672-1506 within the U.S. or +1 303-223-2698 outside the U.S. Please join the call at least 10 minutes before the start time.

• Webcast replay: Available on Ferro’s Investor website at ferro.com beginning at approximately 4:30 p.m. Eastern Time on March 3, 2020.

• Telephone replay: Call 800-633-8284 within the U.S. or +1 402-977-9140 outside the U.S. (for both U.S. and outside the U.S. access code is 21952346).

• Presentation material and podcast: Earnings presentation material and podcasts can be accessed through the Investors portion of the Company’s website at ferro.com.

About Ferro Corporation

Ferro Corporation (www.ferro.com) is a leading global supplier of technology-based functional coatings and color solutions. Ferro supplies functional coatings for glass, metal, ceramic and other substrates and color solutions in the form of specialty pigments and colorants for a broad range of industries and applications. Ferro products are sold into the building and construction, automotive, electronics, industrial products, household furnishings and appliance markets. The Company’s reportable segments include: Performance Colors and Glass and Color Solutions. Headquartered in Mayfield Heights, Ohio, the Company has approximately 5,900 associates globally and reported 2019 sales of $1.0 billion. Included within our employee count are approximately 2,100 employees in our foreign consolidated subsidiaries associated with the Tile Coatings Systems business.

Cautionary Note on Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of 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. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following:

· Ferro’s ability to successfully complete the sale of its Tile Coatings Systems business, including obtaining the requisite regulatory approvals;

· demand in the industries into which Ferro sells its products may be unpredictable, cyclical, or heavily influenced by consumer spending;

· the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;

· currency conversion rates and economic, social, political, and regulatory conditions in the U.S. and around the world;

· the availability of reliable sources of energy and raw materials at a reasonable cost;

· challenges associated with a multi-national company such as Ferro competing lawfully with local competitors in certain regions of the world;

· Ferro’s ability to successfully implement and/or administer its optimization initiatives, including its investment and restructuring programs, and to produce the desired results;

· Ferro’s ability to successfully introduce new products and services or enter into new growth markets;

· Ferro’s ability to identify suitable acquisition candidates, complete acquisitions, effectively integrate the acquired businesses and achieve the expected synergies, as well as the acquisitions being accretive and Ferro achieving the expected returns on invested capital;

· the impact of damage to, or the interruption, failure or compromise of the Company’s information systems due to events including but not limited to aging information systems infrastructure, computer viruses and cyber security breaches;

· the implementation and operations of business information systems and processes;

· increasingly aggressive domestic and foreign governmental regulation of hazardous and other materials and regulations affecting health, safety and the environment;

· our ability to address safety, human health, social, product liability and environmental risks associated with our current and historical products, product life cycles and production processes;

· competitive factors, including intense price competition;

· increased, and possibly inconsistent, domestic and foreign regulations of privacy and data security;

· changes in U.S. and other governments’ trade policies;

· restrictive covenants in the Company’s credit facilities could affect its strategic initiatives and liquidity;

· Ferro’s ability to access capital markets, borrowings or financial transactions; sale of products and materials into highly regulated industries;

· limited or no redundancy for certain of the Company’s manufacturing facilities and possible interruption of operations at those facilities;

· our ability to attract and retain key personnel;

· exposure to lawsuits, governmental investigations and proceedings relating to current and historical operations and products;

· Ferro’s ability to protect its intellectual property, including trade secrets, or to successfully resolve claims of infringement brought against it;

· Ferro’s multi-jurisdictional tax structure and its ability to reduce its effective tax rate, including the impact of the Company’s performance on its ability to utilize significant deferred tax assets;

· Ferro’s borrowing costs could be affected adversely by interest rate increases;

Cautionary Note on Forward-Looking Statements (continued)

· management of Ferro’s general and administrative expenses;

· the impact of the Tax Cuts and Jobs Act on our business;

· stringent labor and employment laws and relationships with the Company’s employees;

· the impact of requirements to fund employee benefit costs, especially post-retirement costs;

· implementation of business processes and information systems, including the outsourcing of functions to third parties;

· risks associated with the manufacture and sale of material into industries making products for sensitive applications;

· risks and uncertainties associated with intangible assets;

· the effectiveness of strategies to increase Ferro’s return on invested capital, internal rate of return and other return metrics, and the short-term impact that acquisitions may have on such metrics;

· liens on the Company’s assets by its lenders affect its ability to dispose of property and businesses;

· amount and timing of any repurchase of Ferro’s common stock; and

· other factors affecting the Company’s business that are beyond its control, including disasters, pandemics (such as COVID-19), accidents and governmental actions.

The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition and results of operations.

This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

Additional information regarding these risks can be found in our Annual Report on Form 10-K for the year ended December 31, 2019.

Ferro Corporation

Investor & Media Contact:

Kevin Cornelius Grant, 216.875.5451

Director of Investor Relations and Corporate Communications

kevincornelius.grant@ferro.com

Table 1

Ferro Corporation and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)	Three Months Ended				Twelve Months Ended
	December 31, (Unaudited)				December 31,
	2019		2018		2019		2018
Net sales	$	245,857	$	266,492	$	1,018,366	$	1,082,223
Cost of sales		170,581		186,023		709,550		742,488
Gross profit		75,276		80,469		308,816		339,735
Selling, general and administrative expenses		54,668		56,106		212,485		219,947
Restructuring and impairment charges		3,094		2,303		10,955		7,116
Other expense (income):
Interest expense		5,042		5,207		24,302		23,659
Interest earned		(188)		(142)		(3,325)		(3,672)
Foreign currency losses, net		1,504		1,710		9,166		6,335
Loss on extinguishment of debt		-		-		-		3,226
Miscellaneous expense, net		13,825		14,823		11,722		12,074
Income before income taxes		(2,669)		463		43,511		71,050
Income tax (benefit) expense		(858)		(11,231)		8,119		14,130
Income from continuing operations		(1,811)		11,694		35,392		56,920
Income from discontinued operations, net of taxes		(28,971)		(350)		(27,977)		24,026
Net  (loss)  income		(30,782)		11,344		7,415		80,946
Less: Net income attributable to noncontrolling interests		475		368		1,377		853
Net income (loss) attributable to Ferro Corporation common shareholders	$	(31,257)	$	10,976	$	6,038	$	80,093
Amounts attributable to Ferro Corporation:
Net income attributable to Ferro Corporation from continuing operations, net of income tax		(2,237)		11,444		34,305		56,069
Net income (loss) attributable to Ferro Corporation from discontinued operations, net of income tax		(29,020)		(468)		(28,267)		24,024
Earnings (loss) per share attributable to Ferro Corporation common shareholders:
Basic earnings:
Continuing operations	$	(0.03)	$	0.14	$	0.41	$	0.67
Discontinued operations	$	(0.35)	$	(0.00)	$	(0.34)	$	0.28
Diluted earnings:
Continuing operations	$	(0.03)	$	0.14	$	0.41	$	0.66
Discontinued operations	$	(0.35)	$	(0.00)	$	(0.34)	$	0.28
Shares outstanding:
Weighted-average basic shares		81,977		83,298		82,083		83,940
Weighted-average diluted shares		82,471		84,278		82,891		85,085
End-of-period basic shares		82,004		83,002		82,004		83,002

Table 2

Ferro Corporation and Subsidiaries

Segment Net Sales and Gross Profit from Continuing Operations (unaudited)

(Dollars in thousands)	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2019		2018		2019		2018
Segment Net Sales
Performance Colors and Glass		160,400		168,554		648,692		691,196
Color Solutions		85,457		97,938		369,674		391,027
Total segment net sales	$	245,857	$	266,492	$	1,018,366	$	1,082,223
Segment Gross Profit
Performance Colors and Glass		47,946		48,060		193,508		212,364
Color Solutions		27,719		30,988		114,939		124,852
Other costs of sales		(389)		1,421		369		2,519
Total gross profit	$	75,276	$	80,469	$	308,816	$	339,735
Selling, general and administrative expenses
Strategic services		23,439		27,164		103,603		110,491
Functional services		28,870		22,479		99,017		93,624
Incentive compensation		898		3,239		2,459		7,391
Stock-based compensation		1,461		3,224		7,406		8,441
Total selling, general and administrative expenses	$	54,668	$	56,106	$	212,485	$	219,947

Table 3

Ferro Corporation and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands)	December 31,		December 31,
	2019		2018
ASSETS
Current assets
Cash and cash equivalents	$	96,202	$	96,101
Accounts receivable, net		135,804		154,907
Inventories		264,622		245,771
Other receivables		69,365		71,653
Other current assets		22,373		21,146
Current assets held-for-sale		294,803		298,205
Total current assets		883,169		887,783
Other assets
Property, plant and equipment, net		300,005		275,539
Goodwill		172,209		172,953
Intangible assets, net		127,820		141,963
Deferred income taxes		98,714		88,526
Operating leased assets		21,684		-
Other non-current assets		72,021		89,741
Non-current assets held-for-sale		158,999		209,571
Total assets	$	1,834,621	$	1,866,076
LIABILITIES AND EQUITY
Current liabilities
Loans payable and current portion of long-term debt	$	8,703	$	8,921
Accounts payable		138,830		132,753
Accrued payrolls		27,447		36,593
Accrued expenses and other current liabilities		73,759		52,867
Current liabilities held-for-sale		133,006		158,182
Total current liabilities		381,745		389,316
Other liabilities
Long-term debt, less current portion		798,862		806,081
Postretirement and pension liabilities		174,021		166,681
Operating leased non-current liabilities		15,326		-
Other non-current liabilities		56,976		53,666
Non-current liabilities held-for-sale		37,489		64,483
Total liabilities		1,464,419		1,480,227
Equity
Total Ferro Corporation shareholders’ equity		360,376		376,631
Noncontrolling interests		9,826		9,218
Total liabilities and equity	$	1,834,621	$	1,866,076

Table 4

Ferro Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)	Three Months Ended				Twelve Months Ended
	December 31, (Unaudited)				December 31,
	2019		2018		2019		2018
Cash flows from operating activities
Net (loss) income	$	(30,782)	$	11,344	$	7,415	$	80,946
Loss (gain) on sale of assets and businesses		31		(321)		(916)		164
Depreciation and amortization		10,738		13,736		55,879		53,974
Interest amortization		975		893		3,755		3,577
Restructuring and impairment charges		34,865		(193)		44,702		4,084
Loss on extinguishment of debt		—		—		—		3,226
Accounts receivable		3,638		56,324		(74,444)		19,885
Inventories		(1,396)		24,911		(10,578)		(33,922)
Accounts payable		53,377		24,784		(10,075)		35,887
Other current assets and liabilities, net		5,485		16,051		9,220		(1,280)
Other adjustments, net		8,019		(422)		(7,248)		16,252
Net cash provided by operating activities		84,950		147,107		17,710		182,793
Cash flows from investing activities
Capital expenditures for property, plant and equipment and other long-lived assets		(24,150)		(16,465)		(64,970)		(80,619)
Collections of financing receivables		23,663		7,020		84,567		7,020
Business acquisitions, net of cash acquired		—		(27,152)		(251)		(74,954)
Other investing activities		27		—		1,957		37
Net cash (used in) provided by investing activities		(460)		(36,597)		21,303		(148,516)
Cash flows from financing activities
Net (repayments) borrowings under loan payable		(8,175)		(1,895)		45		(19,077)
Principal payments on term loan facility - Credit Facility		—		—		—		(304,060)
Principal payments on term loan facility - Amended Credit Facility		(2,050)		(2,050)		(8,200)		(6,150)
Proceeds from term loan facility - Amended Credit Facility		—		—		—		466,075
Proceeds from revolving credit facility - Credit Facility		—		—		—		134,950
Principal payments on revolving credit facility - Credit Facility		—		—		—		(212,950)
Proceeds from revolving credit facility - Amended Credit Facility		11,035		72,012		227,101		240,035
Principal payments on revolving credit facility - Amended Credit Facility		(33,506)		(183,945)		(227,101)		(240,035)
Payment of debt issuance costs		—		—		—		(3,466)
Acquisition related contingent consideration payment		—		—		(5,200)		(9,464)
Proceeds from exercise of stock options		1,052		764		1,052		764
Purchase of treasury stock		—		(11,808)		(25,000)		(28,807)
Other financing activities		(1,135)		(4,932)		(1,892)		(8,448)
Net cash (used in) provided by financing activities		(32,779)		(131,854)		(39,195)		9,367
Effect of exchange rate changes on cash and cash equivalents		950		(633)		283		(2,894)
(Decrease) increase in cash and cash equivalents		52,661		(21,977)		101		40,750
Cash and cash equivalents at beginning of period		51,741		126,278		104,301		63,551
Cash and cash equivalents at end of period		104,402		104,301		104,402		104,301
Less: Cash and cash equivalents of discontinued operations at end of period		8,200		8,200		8,200		8,200
Cash and cash equivalents of continuing operations at end of period	$	96,202	$	96,101	$	96,202	$	96,101
Cash paid during the period for:
Interest	$	7,954	$	9,053	$	33,429	$	33,910
Income taxes	$	8,837	$	19,212	$	21,682	$	36,789

Table 5

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Reported Income from Continuing Operations to Adjusted Income

From Continuing Operations for the Three Months Ended December 31 (unaudited)

(Dollars in thousands, except per share amounts)		Cost of sales		Selling general and administrative expenses		Restructuring and impairment charges		Other expense, net		Income tax expense4		Net income (loss) attributable to common shareholders		Diluted earnings (loss) per share
	2019
As reported from Continuing Operations	$	170,581	$	54,668	$	3,094	$	20,183	$	(858)	$	(2,237)	$	(0.03)
Adjustments:
Restructuring		—		—		(3,094)		—		—		3,094		0.04
Pension1		—		—		—		(13,192)		—		13,192		0.16
Acquisition related costs2		(15)		(518)		—		—		—		533		0.01
Costs related to optimization projects		(924)		(3,542)		—		—		—		4,466		0.05
Costs related to divested businesses and assets		—		(1,239)				(54)		—		1,293		0.02
Tax on adjustments		—		—		—		—		6,290		(6,290)		(0.08)
Total adjustments6		(939)		(5,299)		(3,094)		(13,246)		6,290		16,288		0.20
As adjusted from Continuing Operations	$	169,642	$	49,369	$	—	$	6,937	$	5,432	$	14,051	$	0.17
As reported from Discontinued Operations7	$	—	$	—	$	—	$	—	$	—	$	(29,020)	$	(0.35)
	2018
As reported from Continuing Operations	$	186,023	$	56,106	$	2,303	$	21,598	$	(11,231)	$	11,444	$	0.14
Adjustments:
Restructuring		—		—		(2,303)		—		—		2,303		0.03
Pension1		—		—		—		(18,300)		—		18,300		0.22
Acquisition related costs3		(1,794)		(1,120)		—		—		—		2,914		0.03
Costs related to optimization projects		(1,863)		(2,617)		—		—		—		4,480		0.05
Costs related to divested businesses and assets		—		(286)		—		—		—		286		-
Other5		—		—		—		689		—		(689)		(0.01)
Tax on adjustments		—		—		—		—		11,489		(11,489)		(0.14)
Total adjustments6		(3,657)		(4,023)		(2,303)		(17,611)		11,489		16,105		0.18
As adjusted from Continuing Operations	$	182,366	$	52,083	$	—	$	3,987	$	258	$	27,548	$	0.33
As reported from Discontinued Operations7	$	—	$	—	$	—	$	—	$	—	$	(468)	$	(0.01)

(1) The adjustments relate to pension and other postretirement benefit mark-to-market adjustments and settlements.

(2) The adjustments to “Cost of Sales” primarily include environmental costs related to our recent acquisitions. The adjustments to “Selling general and administrative expenses” primarily include legal, professional and other expenses related to acquisition costs.

(3) The adjustments to “Cost of Sales” primarily include the amortization of purchase accounting adjustments related to our recent acquisitions. The adjustments to “Selling, general and administrative expenses” primarily include legal, professional and other expenses related to acquisition costs.

(4) Income tax expense reflects the reported expense, adjusted for adjustments being tax effected at the respective statutory rate where the item originated, as well asthe impacts associated with the Tax Cuts and Jobs Act that were recorded in 2019 and 2018.

(5) The adjustments to “Other expense, net” primarily relate to a earn out adjustments for acquisitions.

(6) Due to rounding, total earnings per share related to adjustments does not always add to the total adjusted earnings per share.

(7) Included in Discontinued Operations are $33.4 million in impairment charges, $0.1 million in restructuring charges, and $3.3 million in acquisition costs totaling $36.8 million net of tax, or $0.45 per share,that would have historically been excluded from Adjusted Earnings Per Share for the three months ended December 31, 2019 and $0.4 millionin restructuring charges and

$0.5 million in acquisition costs totaling $0.9 million net of tax, or $0.01 per share,that would have historically been excluded from Adjusted Earnings Per Share for the three months ended December 31, 2018.

It should be noted that adjusted net income, earnings per share and other adjusted items referred to above are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).  These Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP, and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures is presented.  We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance. 

Table 6

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Reported Income from Continuing Operations to Adjusted Income

From Continuing Operations for the Twelve Months Ended December 31 (unaudited)

(Dollars in thousands, except per share amounts)		Cost of sales		Selling general and administrative expenses		Restructuring and impairment charges		Other expense, net		Income tax expense6		Net income attributable to common shareholders		Diluted earnings per share
	2019
As reported from Continuing Operations	$	709,550	$	212,485	$	10,955	$	41,865	$	8,119	$	34,305	$	0.41
Adjustments:
Restructuring		—		—		(10,955)		—		—		10,955		0.13
Pension1		—		—		—		(13,192)		—		13,192		0.16
Acquisition related costs2		(890)		(3,486)		—		(768)		—		5,144		0.06
Costs related to optimization projects		(6,307)		(7,230)		—		(50)		—		13,587		0.16
Costs related to divested businesses and assets		—		(2,971)		—		(255)		—		3,226		0.04
Other4		—		—		—		(86)		—		86		-
Tax on adjustments		—		—		—		—		11,539		(11,539)		(0.14)
Total adjustments7		(7,197)		(13,687)		(10,955)		(14,351)		11,539		34,651		0.42
As adjusted from Continuing Operations	$	702,353	$	198,798	$	—	$	27,514	$	19,658	$	68,956	$	0.83
As reported from Discontinued Operations8	$	—	$	—	$	—	$	—	$	—	$	(28,267)	$	(0.34)
	2018
As reported from Continuing Operations	$	742,488	$	219,947	$	7,116	$	41,622	$	14,130	$	56,069	$	0.66
Adjustments:
Restructuring		—		—		(7,116)		—		—		7,116		0.08
Pension1		—		—		—		(18,300)		—		18,300		0.22
Acquisition related costs3		(3,535)		(10,283)		—		1,289		—		12,529		0.15
Costs related to optimization projects		(2,812)		(7,491)		—		—		—		10,303		0.12
Costs related to divested businesses and assets		—		(670)		—		(2,234)		—		2,904		0.03
Other5		—		—		—		(2,056)		—		2,056		0.02
Tax on adjustments		—		—		—		—		12,367		(12,367)		(0.15)
Total adjustments7		(6,347)		(18,444)		(7,116)		(21,301)		12,367		40,841		0.48
As adjusted from Continuing Operations	$	736,141	$	201,503	$	—	$	20,321	$	26,497	$	96,910	$	1.14
As reported from Discontinued Operations8	$	—	$	—	$	—	$	—	$	—	$	24,024	$	0.28

(1) The adjustments relate to pension and other postretirement benefit mark-to-market adjustments and settlements.

(2) The adjustments to “Cost of Sales” primarily include the amortization of purchase accounting adjustments related to our recent acquisitions and environmental costs related to our recent acquisitions. The adjustments to “Selling general and administrative expenses” primarily include legal, professional and other expenses related to acquisition costs. The adjustments to “Other expense, net” relate to purchase price adjustments related to an acquisition that is beyond the measurement period.

(3) The adjustments to “Cost of Sales” primarily include the amortization of purchase accounting adjustments related to our recent acquisitions and environmental costs related to our recent acquisitions. The adjustments to “Selling general and administrative expenses” primarily include legal, professional and other expenses related to acquisition costs. The adjustments to “Other expense, net” primarily relate to earn out adjustments related to an acquisition that are beyond the measurement period.

(4) The adjustments to “Other expense, net” relate to gains and losses on asset sales and impacts of currency related items in Argentina.

(5) The adjustments to “Other expense, net” primarily relate to impacts of currency related items in Argentina, debt extinguishment charges, fees expensed associated with the Amended Credit Facility, a gain recognized on increasing our ownership interest in FMU, earn out adjustments for acquisitions and other acquisition related costs.

(6) Income tax expense reflects the reported expense, adjusted for adjustments being tax effected at the respective statutory rate where the item originated, as well asthe impacts associated with the Tax Cuts and Jobs Act that were recorded in 2019 and 2018.

(7) Due to rounding, total earnings per share related to adjustments does not always add to the total adjusted earnings per share.

(8) Included in Discontinued Operations are $42.5 million in impairment charges, $1.4 million restructuring charges, and $13.6 millionin acquisition coststotaling $57.5 million net of tax, or $0.69 per share, that would have historically been excluded from Adjusted Earnings Per Share for the twelve months ended December 31, 2019 and $4.7 million restructuring chargesand $2.2 millionin acquisition coststotaling $6.8 million net of tax, or $0.08 per share, that would have historically been excluded from Adjusted Earnings Per Share for the twelve months ended December 31, 2018.

It should be noted that adjusted net income, earnings per share and other adjusted items referred to above are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).  These Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP, and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures is presented.  We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

Table 7

Ferro Corporation and Subsidiaries

Supplemental Information

Constant Currency Schedule of Adjusted Operating Profit from Continuing Operations (unaudited)

	Three Months Ended
(Dollars in thousands)	December 31,
	2018		Adjusted 20181		2019		2019 vs  Adjusted 2018
Segment net sales
Performance Colors and Glass		168,554		166,891		160,400		(6,491)
Color Solutions		97,938		96,864		85,457		(11,407)
Total segment net sales	$	266,492	$	263,755	$	245,857	$	(17,898)
Segment adjusted gross profit
Performance Colors and Glass		49,511		48,811		48,226		(585)
Color Solutions		33,352		33,111		27,823		(5,288)
Other costs of sales		1,263		1,530		166		(1,364)
Total adjusted gross profit2	$	84,126	$	83,452	$	76,215	$	(7,237)
Adjusted gross profit percentage		31.6%		31.6%		31.0%
Adjusted selling, general and administrative expenses
Strategic services		26,564		26,714		26,182		(532)
Functional services		19,710		19,026		19,168		142
Incentive compensation		3,210		3,209		1,720		(1,489)
Stock-based compensation		2,599		2,599		2,299		(300)
Total adjusted selling, general and administrative expenses3	$	52,083	$	51,548	$	49,369	$	(2,179)
Adjusted operating profit	$	32,043	$	31,904	$	26,846	$	(5,058)
Adjusted operating profit as a % of net sales		12.0%		12.1%		10.9%

(1) Reflects the remeasurement of 2018 reported and adjusted local currency results using 2019 exchange rates, resulting in constant currency comparative figures to 2019 reported and adjusted results.  See Table 5 for Non-GAAP adjustments applicable to the three month period.

(2) Refer to Table 5 for the reconciliation of adjusted gross profit for the three months ended December 31, 2019 and 2018, respectively.

(3) Refer to Table 5 for the reconciliation of adjusted SG&A expenses for the three months ended December 31, 2019 and 2018, respectively.

It should be noted that adjusted net sales, gross profit, SG&A expenses, and operating profit are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).  These Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures are presented within this table, as well as Table 5.  We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

Table 8

Ferro Corporation and Subsidiaries

Supplemental Information

Constant Currency Schedule of Adjusted Operating Profit from Continuing Operations (unaudited)

	Twelve Months Ended
(Dollars in thousands)	December 31,
	2018		Adjusted 20181		2019		2019 vs  Adjusted 2018
Segment net sales
Performance Colors and Glass		691,196		671,858		648,692		(23,166)
Color Solutions		391,027		381,183		369,674		(11,509)
Total segment net sales	$	1,082,223	$	1,053,041	$	1,018,366	$	(34,675)
Segment adjusted gross profit
Performance Colors and Glass		213,424		206,084		196,097		(9,987)
Color Solutions		129,011		126,375		116,951		(9,424)
Other costs of sales		3,647		4,757		2,965		(1,792)
Total adjusted gross profit2	$	346,082	$	337,216	$	316,013	$	(21,203)
		32.0%		32.0%		31.0%
Adjusted selling, general and administrative expenses
Strategic services		104,561		106,398		106,268		(130)
Functional services		82,071		75,563		81,531		5,968
Incentive compensation		7,056		7,089		3,281		(3,808)
Stock-based compensation		7,815		7,815		7,718		(97)
Total adjusted selling, general and administrative expenses3	$	201,503	$	196,865	$	198,798	$	1,933
Adjusted operating profit	$	144,579	$	140,351	$	117,215	$	(23,136)
Adjusted operating profit as a % of net sales		13.4%		13.3%		11.5%

(1) Reflects the remeasurement of 2018 reported and adjusted local currency results using 2019 exchange rates, resulting in constant currency comparative figures to 2018 reported and adjusted results.  See Table 6 for Non-GAAP adjustments applicable to the twelve month period.

(2) Refer to Table 6 for the reconciliation of adjusted gross profit for the twelve months ended December 31, 2019 and 2018, respectively.

(3) Refer to Table 6 for the reconciliation of adjusted SG&A expenses for the twelve months ended December 31, 2019 and 2018, respectively.

It should be noted that adjusted net sales, gross profit, SG&A expenses, and operating profit are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).  These Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures are presented within this table, as well as Table 6.  We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

Table 9

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Net income (loss) from Continuing Operations

to Adjusted EBITDA from Continuing Operations (unaudited)

(Dollars in thousands)	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2019			2018			2019			2018
Net income attributable to Ferro Corporation from continuing operations, net of income tax	$	(2,237)		$	11,444		$	34,305		$	56,069
Less: Net income attributable to noncontrolling interests		475			368			1,377			853
Restructuring and impairment charges		3,094			2,303			10,955			7,116
Other expense (income), net		15,141			16,392			17,563			17,963
Interest expense		5,042			5,207			24,302			23,659
Income tax (benefit) expense		(858)			(11,231)			8,119			14,130
Depreciation and amortization		11,449			11,149			45,178			43,554
Less: interest amortization expense and other		(975)			(893)			(3,755)			(3,577)
Cost of sales adjustments1		939			3,657			7,197			6,347
SG&A adjustments1		5,299			4,023			13,687			18,444
Adjusted EBITDA from Continuing Operations	$	37,369		$	42,417		$	158,928		$	184,558
Net sales	$	245,857		$	266,492		$	1,018,366		$	1,082,223
Adjusted EBITDA from Continuing Operations as a % of net sales		15.2	%		15.9	%		15.6	%		17.1	%

(1) For details of Non-GAAP adjustments, refer to Table 5 and Table 6 for the reconciliation of adjusted cost of sales and adjusted SG&A for the three and twelve months ended December 31, 2019 and 2018, respectively.

It should be noted that adjusted EBITDA is a financial measure not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). This Non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of this financial measure to the most comparable U.S. GAAP financial measure is presented. We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

Table 10

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Net income (loss) attributable to Ferro Corporation

common shareholders to EBITDA for Discontinued Operations (unaudited)

(Dollars in thousands)	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2019			2018			2019			2018
Net income (loss) attributable to Ferro Corporation from discontinued operations, net of income tax	$	(28,971)		$	(350)		$	(27,977)		$	24,026
Less: Net income attributable to noncontrolling interests		(49)			(118)			(290)			(2)
Restructuring and impairment charges		33,626			557			44,378			6,179
Other expense (income), net		1,149			1,058			(392)			5,623
Interest expense		2,718			3,449			11,556			12,835
Income tax (benefit) expense		(1,533)			5,031			2,658			8,916
Depreciation and amortization, net		3,364			3,480			14,454			13,997
EBITDA from Discontinued Operations1	$	10,304		$	13,109		$	44,387		$	71,574
Net sales from Discontinued Operations	$	112,915		$	128,982		$	487,584		$	530,185
EBITDA as a % of net sales from Discontinued Operations		9.1	%		10.2	%		9.1	%		13.5	%

(1) EBITDA from Discontinued Operations includes transaction costs of $4.5 million and $17.6 million that would have historically been excluded from adjusted EBITDA for the three and twelve months ended December 31, 2019, respectively. EBITDA from Discontinued Operations includes transaction costs of $0.5 million and $2.2 million that would have historically been excluded from adjusted EBITDA for the three and twelve months ended December 31, 2018, respectively.

It should be noted that EBITDA is a financial measure not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). This Non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of this financial measure to the most comparable U.S. GAAP financial measure is presented. We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

Table 11

Ferro Corporation and Subsidiaries

Supplemental Information

Change in Net Debt (unaudited)

(Dollars in thousands)	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2019		2018		2019		2018
Beginning of period
Gross debt	$	850,048	$	938,340	$	826,224	$	759,078
Cash		51,741		126,278		104,301		63,551
Debt, net of cash		798,307		812,062		721,923		695,527
Unamortized debt issuance costs		4,121		5,063		4,827		7,451
Debt, net of cash and unamortized debt issuance costs		794,186		806,999		717,096		688,076
End of period
Gross debt		811,450		826,224		811,450		826,224
Cash		96,202		104,301		96,202		104,301
Debt, net of cash		715,248		721,923		715,248		721,923
Unamortized debt issuance costs		3,885		4,827		3,885		4,827
Debt, net of cash and unamortized debt issuance costs		711,363		717,096		711,363		717,096
Change from FX on Euro term loan		-		-		-		(5,657)
Unamortized debt issuance costs		(236)		(236)		(942)		(2,624)
FX on cash		950		(633)		283		(2,894)
Assumption of debt from acquisitions		-		(6,014)		-		(6,014)
Period decrease (increase) in debt, net of cash, unamortized debt issuance costs, FX, and assumption of debt from acquisitions	$	82,109	$	96,786	$	6,392	$	(11,831)
Period decrease (increase) in debt, net of cash and unamortized debt issuance costs	$	82,823	$	89,903	$	5,733	$	(29,020)

It should be noted that the change in net debt is a financial measure not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). This Non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of this financial measure to the most comparable U.S. GAAP financial measure is presented. We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

Table 12

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Net Cash Provided by Operating Activities (GAAP) to

Adjusted Free Cash Flow from Operating Activities (Non-GAAP) (unaudited)

(Dollars in thousands)	Three Months Ended December 31				Twelve Months Ended December 31
	2019		2018		2019		2018
Cash flows from operating activities
Net (loss) income	$	(30,782)	$	11,344	$	7,415	$	80,946
Loss (gain) on sale of assets and businesses		31		(321)		(916)		164
Depreciation and amortization		10,738		13,736		55,879		53,974
Interest amortization		975		893		3,755		3,577
Restructuring and impairment charges		34,865		(193)		44,702		4,084
Loss on extinguishment of debt		-		-		-		3,226
Accounts receivable		3,638		56,324		(74,444)		19,885
Inventories		(1,396)		24,911		(10,578)		(33,922)
Accounts payable		53,377		24,784		(10,075)		35,887
Other current assets and liabilities, net		5,485		16,051		9,220		(1,280)
Other adjustments, net		8,019		(422)		(7,248)		16,252
Net cash provided by operating activities (GAAP)	$	84,950	$	147,107	$	17,710	$	182,793
Less: Capital Expenditures		(24,150)		(16,465)		(64,970)		(80,619)
Plus: Cash (remitted) collected for AR securitization		23,663		7,020		84,567		7,020
Free Cash Flow provided by operating activities (Non-GAAP)		84,463		137,662		37,307		109,194
Plus: cash used for restructuring		1,889		3,053		10,659		9,211
Plus: cash used for capital expenditures related to optimization projects(1)		4,623		9,227		23,649		41,014
Plus: Cash used for net working capital investment related to optimization projects(2)		9,258		3,001		21,945		8,424
Plus: Cash used for acquisition related professional fees(3)		5,033		1,330		21,145		11,627
Plus: Cash used for optimization projects(3)		4,466		3,172		14,027		8,995
Plus: Cash used for divested businesses and assets(3)		1,293		286		3,159		670
Plus: Other		-		-		(1,725)		-
Adjusted Free Cash Flow from operating activities (Non-GAAP)		111,025		157,731		130,166		189,135
Net Income (Loss) Attributable to Ferro Corporation Common Shareholders		(31,257)		10,976		6,038		80,093
Net Cash Provided by Operating Activities Conversion of Net Income (Loss) Attributable to Ferro Corporation Common Shareholders		-271.8%		1340.3%		293.3%		228.2%

(1) The adjustment to capital expenditures represents capital spend for certain optimization projects that are not expected to recur in the long-term at the current rate. See Table 10 for the reconciliation of period change in debt, net of cash, unamortized debt issuance costs, FX, and assumption of debt from acquisitions.

(2) The adjustment to net working capital represents spend for the build in inventory related to the optimization project noted in (1) above. This build in inventory is considered to be outside of the normal operations of the underlying business, and expected to be temporary in nature.

(3) The adjustment represents those cash outlays for (a) acquisition related professional fees, (b) costs related to certain optimization projects, and (c) costs related to divested businesses and assets, as detailed in the description of Non-GAAP adjustments in Table 5 and Table 6 for the three and twelve months ended December 31, 2019 and 2018, respectively.

It should be noted that adjusted free cash flow from continuing operations is a financial measure not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). The Non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures is presented.  We believe this data provides investors with additional useful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance. Additionally, certain elements of these measures are used in the calculation of certain incentive compensation programs for management.

Table 13

Ferro Corporation and Subsidiaries

Supplemental Information

Reconciliation of Net Sales and Gross Profit (GAAP) to

Adjusted Net Sales and Gross Profit (Non-GAAP) (unaudited)

(Dollars in thousands)		Net Sales		Gross Profit
	2019
As Reported (GAAP)	$	1,018,366	$	308,816
Non-GAAP Adjustments1		-		7,197
Constant Currency FX Impact2		-		-
As Adjusted from Continuing Operations (Non-GAAP measure)	$	1,018,366	$	316,013
	2018
As Reported (GAAP)	$	1,082,223	$	339,735
Non-GAAP Adjustments1		-		6,347
Constant Currency FX Impact2		(29,200)		(8,900)
As Adjusted from Continuing Operations (Non-GAAP measure)	$	1,053,023	$	337,182
	2017
As Reported (GAAP)	$	996,382	$	326,719
Non-GAAP Adjustments1		-		8,774
Constant Currency FX Impact2		(17,700)		(4,900)
As Adjusted from Continuing Operations (Non-GAAP measure)	$	978,682	$	330,593
	2016
As Reported (GAAP)	$	794,465	$	270,226
Non-GAAP Adjustments1		-		3,792
Constant Currency FX Impact2		(9,900)		(2,800)
As Adjusted from Continuing Operations (Non-GAAP measure)	$	784,565	$	271,218
	2015
As Reported (GAAP)	$	728,579	$	223,432
Non-GAAP Adjustments1		-		8,270
Constant Currency FX Impact2		(17,700)		(5,300)
As Adjusted from Continuing Operations (Non-GAAP measure)	$	710,879	$	226,402

1. For 2019 and 2018, refer to Table 6 for a description of the  Non-GAAP adjustments that were recorded in "Cost of Sales”. For 2017, 2016, 2015 and 2014, the Non-GAAP adjustments relate to acquisitions related costs, costs related to certain optimization projects, and costs related to divested businesses and assets.

2. Reflects the remeasurement of 2018, 2017, 2016, 2015 and 2014 reported and adjusted results using 2019 average exchange rates, resulting in a constant currency comparative figures to 2019 reported and adjusted results.

It should be noted that adjusted net sales and adjusted gross profit referred to above are financial measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP).  These Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S. GAAP and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures is presented.   We believe this data provides investors with additionaluseful information on the underlying operations and trends of the business and enables period-to-period comparability of financial performance.

XML

Document And Entity Information	Mar. 02, 2020
Document And Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Mar. 02, 2020
Entity Registrant Name	Ferro Corporation
Entity Central Index Key	0000035214
Amendment Flag	false
Entity Incorporation, State or Country Code	OH
Entity File Number	1-584
Entity Tax Identification Number	34-0217820
Entity Address, Address Line One	6060 Parkland Boulevard
Entity Address Address Line Two	Suite 250
Entity Address, City or Town	Mayfield Heights
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44124
City Area Code	216
Local Phone Number	875-5600
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $1.00
Trading Symbol	FOE
Security Exchange Name	NYSE
Entity Emerging Growth Company	false