Investor group plans to nominate three directors to Ferro's board

By Scott Suttell
CRAIN'S CLEVELAND BUSINESS

Published: January 25, 2013 1:17 pm ET
Updated: January 25, 2013 1:22 pm ET

Related to this story

Topics Materials, Materials Suppliers, Polypropylene
Companies & Associations Ferro Corp.

MAYFIELD HEIGHTS, OHIO -- A group of investors in specialty chemicals maker Ferro Corp. says it plans to nominate three directors for election to the company's board.

The group calls itself the Shareholder Committee for the Future of Ferro and is led by FrontFour Capital Group LLC of Stamford, Conn., and Quinpario Partners LLC of New York. It said it is nominating the three director candidates — David A. Lorber, Jeffry N. Quinn and Nadim Z. Qureshi — because it is concerned about Mayfield Heights-based Ferro's "historic and current under-performance."

In November, James Kirsch, chairman, president and CEO of Ferro, resigned from those posts, less than three weeks after the company on Oct. 30 posted a third-quarter loss of $316 million as it absorbed significant charges related in part to its beleaguered solar pastes business.

Peter Thomas, Ferro's operating vice president of polymer and ceramic engineered materials, is serving as interim president and CEO.

The investor group also issued an open letter to Ferro shareholders. Among the letter's highlights:

• "The operating performance of the company continues to deteriorate and the share price as of Dec. 31, 2012, has declined by 15 percent, 49 percent, and 79 percent over the past one, three, and five calendar years, respectively. The ultimate scorecard of any board of directors and its management team is the creation of shareholder value. In the case of Ferro, the results speak for themselves, and not in a positive way. Left to its own devices, and allowed to maintain the status quo, we are concerned that the unsatisfactory past performance of the current Board and its management team is a precursor of further disappointing performance to come. Ferro has reached a critical juncture and further shareholder value must not be destroyed."

• The director nominees "are leading executives who have track records of creating shareholder value and will offer new perspective and insights to enhance sustainable long-term value and optimize the business for the benefit of all shareholders."

• 2013 is "a pivotal year" for Ferro. "With a Chief Executive Officer search underway and strategic alternatives being considered for the solar-paste business, many important decisions need to be made. We are concerned that given their poor past performance, the company's leadership is ill equipped to make the appropriate decisions to restore shareholder value."

• "Management's articulated strategy and its lackluster execution on that strategy have consistently failed to deliver results. Ferro's portfolio of assets is haphazard and illogically structured, the company's operating margins trail its specialty chemical peers, investments in underperforming businesses have continued to be authorized by the board, and the Board has continuously approved budgets with excessive SG&A levels."

• "With focus, Ferro can improve and grow its product offering, gain market share, and deliver to its shareholders improved profit margins and cash flow. The opportunity to transform and create value is now."

Ferro spokeswoman Mary Abood said company officials "have received and are reviewing the communication" from the group but would not comment immediately.


Comments

Investor group plans to nominate three directors to Ferro's board

By Scott Suttell
CRAIN'S CLEVELAND BUSINESS

Published: January 25, 2013 1:17 pm ET
Updated: January 25, 2013 1:22 pm ET

Post Your Comments


Back to story


More stories

Image

Residents ask court to close pipe maker

November 21, 2014 3:22 pm ET

Residents living by National Pipe & Plastics Inc.'s new factory in an industrial zone of Endicott, N.Y., say the facility has “devastated the...    More

Image

Plastics News by the year: 1989

November 21, 2014 6:00 am ET

As Plastics News marks its 25th year of publication, we take a year-by-year look back at some of the events, people and curious coincidences that...    More

Image

Small is beautiful in Nissei's newest press

November 21, 2014 2:14 pm ET

Responding to customer demand for flexibility, Japanese plastics-equipment manufacturer Nissei Plastic Industrial Co. Ltd. is demoing a caster-...    More

Image

Cartoonist Rich Williams: If I could make HDPE funny, my powers would be limitless

November 21, 2014 1:41 pm ET

For the past 25 years, Rich Williams has been a fixture in the Plastics News staff box, and on our editorial page. Rich “speaks” to our...    More

Image

Three advancements have driven injection molding technology

November 21, 2014 6:00 am ET

Injection molding technology has made major advances in the last 25 years, from largely a world of shoot-and-ship to doing as much as possible at the ...    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events