Jun 23 2008
Ferro Corporation announced today that it is taking additional actions to rationalize manufacturing and reduce expenses worldwide.
Brazil Manufacturing Restructuring
The Company announced it will discontinue manufacturing tile frits and tile color products at its facilities in Americana, Brazil by the end of June 2008. Color products required by Brazilian customers after this time will be provided by Ferro facilities in Mexico and Spain.
"We believe these changes will allow us to reduce our operating costs and compete more effectively in the important north Brazil market," said John Kelly, Latin American Business Manager, Inorganic Specialties Group. "We will continue to provide the high-quality color products and technical service that tile manufacturers need to be successful and will work closely with our customers to ensure a smooth transition through these changes."
Ferro will continue to produce porcelain enamel frit and glass color and glaze products at the Americana site.
The Company said that discontinuing tile color materials production will reduce employment at the Brazilian location by approximately 73 positions, and annual savings are expected to be approximately $2.0 million to $2.5 million.
The Company expects to record a pre-tax charge related to the actions in Brazil during the second quarter, ended June 30, 2008, of approximately $1.4 million, including approximately $0.9 million in severance costs and $0.5 in asset impairment charges. The charges are expected to reduce diluted earnings per share for the second quarter by approximately 2 cents.
Additional Worldwide Expense Reduction Initiatives
The Company also announced that it would take additional actions in its Inorganic Specialties business as a part of its continuing initiatives to reduce expenses. As a result of these actions, the Company expects to reduce employment by approximately 13 positions, primarily in Europe and Asia, and to record a pre-tax charge of approximately $2.2 million related to severance costs in the quarter ended June 30, 2008. This charge is expected to reduce diluted earnings per share in the quarter ending June 30, 2008, by approximately 3 cents. Annual savings resulting from the additional worldwide expense reduction initiatives is expected to be approximately $1.4 million.