Ferro Corporation Amends Bank Agreement

Ferro Corporation announced that it has amended its five-year bank credit agreement, which will provide increased latitude for certain financial covenants.

The five- year revolving credit facility, dated August 31, 2001, has a current capacity of $300 million. As of September 30, 2003, the Company had approximately $110 million outstanding on the credit facility.

"The amended credit agreement provides additional strategic and financial flexibility going forward," commented Hector R. Ortino, chairman and chief executive officer. "This opportunity reflects our improved balance sheet as we have successfully reduced debt during an extended period of sluggish economic and market conditions. I am pleased with the discipline and focus our employees have shown during this challenging period, particularly our ability to lower working capital levels. In the third quarter 2003, we further decreased total debt by approximately $17 million."

Third Quarter 2003 Estimate

Ferro Corporation also announced that it expects to report a loss in the third quarter 2003 of ($0.02) to ($0.04) per share. The loss includes an after-tax restructuring charge of approximately $7.4 million, or $0.18 per share, for integration and consolidation efforts. The restructuring charge is in line with previous announcements and largely represents the final phase of the integration of the dmc2 acquisition, including the closing of a tile facility in Italy. In addition to the integration process, the current quarter charge includes further action the Company has taken to consolidate and reduce overhead costs. In total, the cost reduction efforts will create an annualized pre-tax savings of approximately $15 million.

The third quarter 2003 earnings estimate, excluding the restructuring charge, is near the lower end of the analysts´ estimated range. The Company reported fully diluted earnings per share of $0.23 from continuing operations in the third quarter 2002, which included an after tax charge of $3.6 million, or $0.08 per share, related to the dmc2 integration efforts. Ferro also expects to report sales of approximately $297 million, or about a 2 percent increase compared with the third quarter 2002.

"The global economic environment continued to be very challenging in the quarter," Ortino commented. "Overall, conditions are gradually improving but will likely remain tough at least through the rest of 2003. The business being impacted the most by sluggish economic conditions is Polymer Additives as market demand for PVC remains soft, pricing remains competitive and raw material costs have increased. We have seen some encouraging signs, particularly within our electronic materials business, where we are experiencing increased volumes and stronger orders compared with the year ago period. Going forward, we will continue to evaluate options to reduce costs, including the potential for further facility rationalization. We will also continue our emphasis on strengthening the balance sheet and further positioning the Company for long-term growth."

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