Ferro Corp. went to the wire in reporting its restated 2003 and 2004 10-K audited annual financial reports to the Securities & Exchange Commission. SEC had given the Cleveland-based company until March 31 to file the documents, which were delayed while Ferro investigated accounting irregularities. Ferro has yet to file its 10-K for 2005 but says that will be done by the third quarter of this year.
Besides making the SEC deadline, the filing was also important because the New York Stock Exchange had threatened to delist Ferro's stock if the coatings and performance chemicals company didn't file by the end of March. Now, Ferro's stock will continue to be traded on the NYSE.
On the plus side, Ferro has received a 90-day waiver from lenders that will allow it to sell debt to raise cash. In addition, the company got a commitment for a new $700 million credit line from National City Bank and Credit Suisse.
After announcing the credit arrangements, however, Ferro received a notice that it was in default from an unnamed holder of $15 million in debt that cited Ferro's failure to file timely financial statements as the reason. Ferro has 90 days to remedy the cause of the default.
The default triggered a warning from KPMG, Ferro's independent accounting firm, which said, "The company faces certain liquidity uncertainties that raise substantial doubts about [Ferro's] ability to continue as a going concern."
Ferro also announced the adjustments for the accounting problems in its polymer additives business that initially triggered its current state. They lowered earnings by $10.1 million.