FinancialContent is the trusted provider of stock market information to the media industry.
October 20, 2010 at 07:30 AM EDT
Libbey Inc. Announces Increase of 23.1 Percent in Income Before Income Taxes on 7.0 Percent Increase in Sales for the Third Quarter of 2010

TOLEDO, Ohio, Oct. 20 /PRNewswire-FirstCall/ --

  • Third Quarter Net Sales of $200.0 Million, an Increase of 7.0 Percent Compared to $186.9 Million in the Prior-Year Quarter
  • Libbey China Sales Increase 27.3 Percent
  • Libbey Mexico Sales Increase 14.6 Percent
  • Sales to U.S. and Canadian Retail Customers Increase 4.9 Percent
  • International Sales Increase 12.3 Percent (22.2 percent excluding the impact of currency)
  • Income Before Income Taxes Increased 23.1 Percent to $3.8 Million in the Third Quarter of 2010 Compared to Income Before Income Taxes of $3.1 Million in the Prior-Year Quarter
  • Adjusted EBITDA of $28.1 Million in the Third Quarter of 2010 Compared to $31.9 Million in the Third Quarter of 2009
  • Adjusted EBITDA of $86.2 Million in the First Nine Months of 2010 Compared to $61.0 Million in the First Nine Months of 2009

Libbey Inc. (NYSE Amex: LBY) announced today that sales for the third quarter of 2010 were $200.0 million, compared to $186.9 million in the third quarter of 2009, an increase of 7.0 percent.  Libbey reported net income of $2.3 million, or $0.12 per diluted share, for the third quarter ended September 30, 2010, compared to net income of $3.5 million, or $0.23 per diluted share, in the prior-year quarter.  Excluding special items of $2.4 million, Libbey had net income of $4.7 million (see Table 1) and diluted earnings per share of $0.23 for the third quarter of 2010.  The special items in the third quarter of 2010 included a write-down of decorating assets at the Company's Shreveport, Louisiana, facility and fees related to the secondary stock offering completed in August 2010, for which no proceeds were received.

Third Quarter Results

For the quarter-ended September 30, 2010, sales were $200.0 million, compared to $186.9 million in the year-ago quarter.  Sales in the North American Glass segment were $137.1 million, an increase of 6.8 percent, compared to $128.3 million in the third quarter of 2009 (see Table 5).  Primary contributors to the increased sales included a 14.6 percent increase in sales to Crisa customers and a 4.9 percent increase in sales to U.S. and Canadian retail customers, compared to the prior-year quarter.  Sales to U.S. and Canadian foodservice glassware customers increased 1.3 percent, compared to the prior- year quarter.  North American Other sales increased 1.5 percent to $20.8 million, compared to $20.5 million in the prior-year quarter.  Traex sales increased by 7.6 percent versus the prior year quarter, while sales to World Tableware customers increased 3.4 percent during the quarter.  A decrease in Syracuse China sales of 5.6 percent partially offset these increases.  International segment sales increased 12.3 percent (International sales growth, excluding the impact of currency, was 22.2 percent during the third quarter) to $45.2 million, compared to $40.3 million in the year-ago quarter.  The increase in International sales was led by a 27.3 percent increase in sales to Libbey China customers, an increase of 16.3 percent in sales at Crisal and an 11.4 percent sales growth at Royal Leerdam.

The Company reported income from operations of $15.7 million during the quarter, compared to income from operations of $17.8 million in the year-ago quarter.  Income from operations, excluding special items (see Table 1), was $18.0 million in the third quarter of 2010, compared to $18.6 million during the third quarter of 2009.  Factors contributing to the change in income from operations (both including and excluding special items) were higher sales offset by higher labor, increased workers compensation expense (primarily related to a facility in California which was closed in 2005) and increased health care costs.

Libbey reported earnings before interest and taxes (EBIT) of $15.7 million, compared to EBIT of $20.6 million in the year-ago quarter.  The lower EBIT was primarily a result of the change in income from operations discussed above and $2.9 million of translation gains included in other income during the third quarter of 2009, which did not repeat in 2010.  EBIT, excluding special items (see Table 1, hereafter defined as adjusted EBIT), was $18.0 million in the third quarter of 2010, compared to $21.3 million during the third quarter of 2009.  Adjusted EBIT (see Table 5) was $11.6 million for North American Glass, compared to adjusted EBIT of $17.0 million in the year-ago quarter.  North American Other reported adjusted EBIT for the third quarter of 2010 of $2.8 million, compared to $3.3 million in the year-ago quarter.  The International segment reported adjusted EBIT of $3.7 million primarily as a result of the 12.3 percent increase in sales, compared to adjusted EBIT of $1.0 million in the third quarter of 2009.  

Libbey reported that adjusted EBITDA (see Table 3) was $28.1 million for the third quarter of 2010, compared to $31.9 million in the third quarter of 2009.  

Interest expense decreased by $5.6 million to $11.9 million, compared to $17.5 million in the year-ago period, as a result of lower debt levels and the impact of the debt refinancing completed in February 2010.

The effective tax rate was 38.6 percent for the third quarter of 2010, compared to a negative 13.9 percent in the third quarter of 2009.  The effective tax rate was influenced by valuation allowances, changes in the mix of earnings with differing statutory rates and changes in accruals related to uncertain tax positions.

Libbey reported net income of $2.3 million, or $0.12 per diluted share, for the third quarter ended September 30, 2010, compared to net income of $3.5 million, or $0.23 per diluted share, in the prior year quarter.  Diluted shares outstanding increased to 20.3 million for the quarter ended September 30, 2010, compared to 15.6 million diluted shares in the prior year quarter.  Excluding special items of $2.4 million, Libbey had net income of $4.7 million (see Table 1) and diluted earnings per share of $0.23 for the third quarter of 2010.  This compares to net income excluding special items of $4.3 million and diluted earnings per share of $0.27 during the third quarter of 2009.  The special items in the third quarter of 2010 included a write-down of decorating assets at the Company's Shreveport, Louisiana, facility and fees related to the secondary stock offering completed in August 2010.

Nine-Month Results  

For the nine months ended September 30, 2010, sales increased 6.7 percent to $576.9 million from $540.6 million in the year-ago period.  North American Glass sales increased 7.8 percent to $404.1 million (see Table 5) from $374.8 million in the year-ago period.  The increased sales were attributable to an approximate 24.4 percent increase in Crisa's sales and a solid 10.0 percent increase in sales to U.S. and Canadian retail customers. The Company reported an all-time record U.S. and Canadian retail sales performance during the first nine months of 2010.  Partially offsetting these increases in sales were lower sales to U.S. and Canadian foodservice customers, which decreased by 2.4 percent during the first nine months of the year.  North American Other sales decreased 4.1 percent, as sales of Syracuse China decreased 21.5 percent and Traex sales were 0.5 percent lower than the first nine months of 2009.  Partially offsetting these decreases was an increase in World Tableware sales of 5.5 percent.  International sales increased 14.2 percent, as a result of 29.0 percent higher sales at Libbey China for the first nine months of 2010, compared to the first nine months of 2009.  In addition, sales of Royal Leerdam increased 15.5 percent and Crisal sales increased 11.6 percent.   Excluding the currency impact, International sales increased approximately 18.6 percent.  

The special items in the first nine months of 2010 included a gain of $70.2 million, which represented the difference between the carrying value and the face value of the Payment in Kind (PIK) notes, which were redeemed in February 2010.  This gain was partially offset by the write-off of $13.4 million of unamortized fees and discounts on the refinanced floating rate senior notes and ABL credit facility and call premium payments.

The Company reported income from operations of $49.6 million during the first nine months of 2010, compared to income from operations of $17.3 million in the year-ago period.  Adjusted income from operations was $54.1 million for the first nine months of 2010 (see Table 2) compared to adjusted income from operations of $23.2 million in the first nine months of 2009.  Factors contributing to the increase in adjusted income from operations were higher sales and increased capacity utilization.  Increased selling, general and administrative expenses partially offset these increases.    

EBIT was $107.3 million in the first nine months of 2010, compared to $22.7 million in the first nine months of 2009.  Adjusted EBIT for the first nine months of 2010, as detailed in Table 2, was $55.2 million compared to adjusted EBIT of $28.8 million in the first nine months of 2009.  Adjusted EBIT for North American Glass was $43.1 million during the first nine months of 2010, compared to adjusted EBIT of $22.8 million in the first nine months of 2009.  The increase is the result of increased sales and increased operating activity in U.S. and Mexican operations.  North American Other reported adjusted EBIT for the first nine months of 2010 of $11.1 million, compared to $8.4 million in the year-ago period, the increase being primarily a result of ongoing cost reductions.  The International segment reported an adjusted EBIT of $1.0 million, compared to an adjusted EBIT loss of $2.3 million in the first nine months of 2009.  This improvement was primarily related to the increased sales.

Libbey reported that adjusted EBITDA, as detailed in Table 3, was $86.2 million in the first nine months of 2010, compared to adjusted EBITDA of $61.0 million in the year-ago nine-month period.  

As a result of lower debt levels and the impact of the debt refinancing completed in February 2010, interest expense decreased $18.9 million, compared to the first nine months of 2009.

The effective tax rate was 9.1 percent for the first nine months of 2010, compared to 26.3 percent in the first nine months of 2009.  The effective tax rate was influenced by valuation allowances, changes in the mix of earnings with differing statutory rates and changes in accruals related to uncertain tax positions.

Libbey reported net income of $67.3 million for the first nine months of 2010, or earnings of $3.26 per diluted share, compared to a net loss of $21.7 million, or $1.45 per diluted share, in the first nine months of 2009.  Diluted shares outstanding for the first nine months of 2010 were 20.7 million shares, compared to 14.9 million diluted shares outstanding for the first nine months of 2009.   Excluding special items of $52.2 million, Libbey had net income of $15.2 million (see Table 2) and diluted earnings per share of $0.73 for the first nine months of 2010, compared to a net loss of $15.6 million, or diluted loss per share of $1.04 in the first nine months of 2009.  The special items in the first nine months of 2010 included a gain of $70.2 million, which represented the difference between the carrying value and the face value of the Payment in Kind (PIK) notes which were redeemed in February 2010.  This gain was partially offset by the write-off of $13.4 million of unamortized fees and discounts on the refinanced floating rate senior notes and ABL credit facility and call premium payments.  Also included was a write-down of certain after-processing equipment within the Company's International segment and write down of decorating equipment at the Company's Shreveport, Louisiana, facility as well as fees related to the secondary stock offering completed in August 2010.

Working Capital and Liquidity

As of September 30, 2010, working capital, defined as inventories and accounts receivable less accounts payable, was $211.0 million, compared to $192.6 million at September 30, 2009.  Working capital as a percentage of the last twelve months net sales was 26.9 percent at September 30, 2010, compared to 26.5 percent at September 30, 2009.

Libbey reported that it had available capacity of $69.6 million under its Asset Backed Loan (ABL) credit facility as of September 30, 2010, with no loans currently outstanding.  The Company also had cash on hand of $35.6 million at September 30, 2010.

Sales Improvement in All Segments During the Third Quarter

John F. Meier, chairman and chief executive officer said, "We were pleased with the solid sales improvements we saw in both the North American Glass and International segments in the third quarter as well as quarterly year-over-year improvement in sales in North American Other for the first time in 2010.  The higher sales, increased capacity utilization and the ongoing benefits of the cost reductions we have put in place have resulted in adjusted EBITDA of $86.2 million for the first nine months of 2010, which was a $25.2 million improvement in adjusted EBITDA, when compared to the first nine months of the prior year."

Meier added, "A substantial order for the B to B channel of distribution in the U.S., which was planned to be produced in the third quarter, will now be completed and shipped during the fourth quarter of 2010.  We expect that this activity will contribute to a solid finish to 2010."

Webcast Information

Libbey will hold a conference call for investors on Wednesday, October 20, 2010, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet and is accessible from the Investor Relations section of www.libbey.com or at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=64169&eventID=3405986. To listen to the call, please go to the website at least 10 minutes early to register, download and install any necessary software.  A replay will be available for 30 days after the conclusion of the call.

This press release includes forward-looking statements as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements only reflect the Company's best assessment at this time and are indicated by words or phrases such as "goal," "expects," " believes," "will," "estimates," "anticipates," or similar phrases.  Investors are cautioned that forward-looking statements involve risks and uncertainty and that actual results may differ materially from these statements. These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's report on Form 10-K filed with the Commission on March 15, 2010.  Important factors potentially affecting performance include but are not limited to increased competition from foreign suppliers from such statements, and that investors should not place undue reliance on such endeavoring to sell glass tableware in the United States and Mexico; the impact of lower duties for imported products; global economic conditions and the related impact on consumer spending levels; major slowdowns in the retail, travel or entertainment industries in the United States, Canada, Mexico, Western Europe and Asia, caused by terrorist attacks or otherwise; significant increases in per-unit costs for natural gas, electricity, corrugated packaging, and other purchased materials; higher indebtedness related to the Crisa acquisition; higher interest rates that increase the Company's borrowing costs or volatility in the financial markets that could constrain liquidity and credit availability; protracted work stoppages related to collective bargaining agreements; increases in expense associated with higher medical costs, increased pension expense associated with lower returns on pension investments and increased pension obligations; devaluations and other major currency fluctuations relative to the U.S. dollar and the Euro that could reduce the cost competitiveness of the Company's products compared to foreign competition; the effect of high inflation in Mexico and exchange rate changes to the value of the Mexican peso and the earnings and cash flow of Crisa, expressed under U.S. GAAP; the inability to achieve savings and profit improvements at targeted levels in the Company's operations or within the intended time periods; and whether the Company completes any significant acquisition and whether such acquisitions can operate profitably.  Any forward-looking statements speak only as of the date of this press release, and the Company assumes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release.

Libbey Inc.:

  • is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world;
  • is expanding its international presence with facilities in China, Mexico, the Netherlands and Portugal;
  • is the leading manufacturer of tabletop products for the U.S. foodservice industry; and
  • supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries.

Based in Toledo, Ohio, since 1888, Libbey operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, China, Portugal and the Netherlands.  Its Crisa subsidiary, located in Monterrey, Mexico, is the leading producer of glass tableware in Mexico and Latin America.  Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients.  Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe.  Its Syracuse China subsidiary designs and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments in the United States.  Its World Tableware subsidiary imports and sells a full-line of metal flatware and holloware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States.  Its Traex subsidiary, located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry.  In 2009, Libbey Inc.'s net sales totaled $748.6 million.

LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per-share amounts)

(unaudited)










Three Months Ended September 30,




2010


2009

Net sales


$               200,007


$               186,878

Freight billed to customers


457


419

Total revenues


200,464


187,297







Cost of sales (1)


158,779


144,337

Gross profit


41,685


42,960







Selling, general and administrative expenses (1)


25,335


24,811

Special charges (1)


700


300

Income from operations


15,650


17,849

Other income (1)


23


2,703







Earnings before interest and income taxes


15,673


20,552







Interest expense


11,855


17,451

Income before income taxes


3,818


3,101







Provision for (benefit from) income taxes


1,472


(432)







Net income


$                   2,346


$                   3,533













Net income per share:





Basic


$                     0.13


$                     0.23

Diluted


$                     0.12


$                     0.23







Weighted average shares:





Outstanding


18,148


15,152

Diluted


20,287


15,588













(1) Refer to Table 1 for Special Charges detail.



LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per-share amounts)

(unaudited)










Nine Months Ended September 30,




2010


2009

Net sales


$ 576,947


$ 540,557

Freight billed to customers


1,311


1,163

Total revenues


578,258


541,720







Cost of sales (1)


454,665


453,761

Gross profit


123,593


87,959







Selling, general and administrative expenses (1)


72,878


69,699

Special charges (1)


1,088


974

Income from operations


49,627


17,286

Gain on redemption of debt (1)


56,792


-

Other income (1)


916


5,424







Earnings before interest and income taxes


107,335


22,710







Interest expense


33,243


52,162

Income (loss) before income taxes


74,092


(29,452)







Provision for (benefit from) income taxes


6,769


(7,756)

Net income (loss)


$   67,323


$ (21,696)













Net income (loss) per share:





Basic


$       3.98


$      (1.45)

Diluted


$       3.26


$      (1.45)







Weighted average shares:





Outstanding


16,928


14,926

Diluted


20,658


14,926













(1) Refer to Table 2 for Special Items detail.



LIBBEY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)






September 30, 2010


December 31, 2009



(unaudited)



ASSETS









Cash & cash equivalents

$   35,568


$   55,089

Accounts receivable - net

110,574


82,424

Inventories - net

159,374


144,015

Other current assets

12,374


11,783

Total current assets

317,890


293,311






Pension asset

10,700


9,454






Goodwill and purchased intangibles - net

191,914


193,181






Property, plant and equipment - net

272,723


290,013






Other assets

21,556


8,854






Total assets

$ 814,783


$ 794,813











LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)














Notes payable

$           -


$        672

Accounts payable

58,937


58,838

Accrued liabilities

77,860


69,763

Pension liability (current portion)

2,031


1,984

Nonpension postretirement benefits (current portion)

4,363


4,363

Other current liabilities

10,162


7,921

Long-term debt due within one year

9,878


9,843

Total current liabilities

163,231


153,384






Long-term debt

446,224


504,724

Pension liability

113,314


119,727

Nonpension postretirement benefits

65,447


64,780

Other liabilities

18,214


19,105

Total liabilities

806,430


861,720






Common stock, treasury stock, capital in excess of par value and warrants

299,916


254,161

Accumulated deficit

(181,439)


(205,344)

Accumulated other comprehensive loss

(110,124)


(115,724)

Total shareholders' equity (deficit)

8,353


(66,907)






Total liabilities and shareholders' equity (deficit)

$ 814,783


$ 794,813



LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Dollars in thousands)

(unaudited)



Three Months Ended September 30,



2010


2009






Operating activities:




Net income

$   2,346


$   3,533






Adjustments to reconcile net income to net




cash (used in) provided by operating activities:









Depreciation and amortization

10,040


10,629

Loss on asset disposals

78


77

Change in accounts receivable

(15,355)


864

Change in inventories

(2,418)


(6,196)

Change in accounts payable

77


(3,191)

Accrued interest and amortization of discounts, warrants and finance fees

(8,996)


13,447

Pension & nonpension postretirement benefits

917


(453)

Restructuring charges

627


(1,086)

Accrued liabilities & prepaid expenses

7,007


8,344

Accrued income taxes

1,129


(862)

Other operating activities

1,768


1,533

Net cash (used in) provided by operating activities

(2,780)


26,639






Investing activities:




Additions to property, plant and equipment

(7,743)


(2,737)

Proceeds from asset sales and other

-


172

Net cash used in investing activities

(7,743)


(2,565)






Financing activities:




Net repayments on ABL credit facility

-


(16,799)

Other repayments

(878)


(662)

Net cash used in financing activities

(878)


(17,461)






Effect of exchange rate fluctuations on cash

796


(47)






(Decrease) increase in cash

(10,605)


6,566






Cash at beginning of period

46,173


24,082






Cash at end of period

$ 35,568


$ 30,648



LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Dollars in thousands)

(unaudited)




Nine Months Ended September 30,










2010


2009







Operating activities:





Net income (loss)


$  67,323


$ (21,696)







Adjustments to reconcile net income (loss) to net





cash (used in) provided by operating activities:











Depreciation and amortization


30,994


32,875

Loss on asset disposals


343


109

Change in accounts receivable


(28,967)


(14,733)

Change in inventories


(17,218)


32,050

Change in accounts payable


914


(3,078)

Accrued interest and amortization of discounts, warrants and finance fees


6,795


14,998

Accrual of interest on PIK notes


-


11,916

Gain on redemption of PIK Notes


(70,193)


-

Payment of interest on PIK Notes


(29,400)


-

Call premium on floating rate notes


8,415


-

Write-off of bank fees & discounts on old ABL and floating rate notes


4,986


-

Pension & nonpension postretirement benefits


3,788


2,712

Restructuring charges


3,023


(1,837)

Accrued liabilities & prepaid expenses


4,494


21,128

Accrued income taxes


890


(9,499)

Other operating activities


2,980


784

Net cash (used in) provided by operating activities


(10,833)


65,729







Investing activities:





Additions to property, plant and equipment


(19,122)


(12,287)

Call premium on floating rate notes


(8,415)


-

Proceeds from asset sales and other


-


260

Net cash used in investing activities


(27,537)


(12,027)







Financing activities:





Net repayments on ABL credit facility


-


(33,488)

Other repayments


(969)


(2,785)

Other borrowings


215


-

Floating rate note payments


(306,000)


-

PIK Note payment


(51,031)


-

Proceeds from senior secured notes


392,328


-

Debt issuance costs and other


(15,488)


-

Net cash provided by (used in) financing activities


19,055


(36,273)







Effect of exchange rate fluctuations on cash


(206)


(85)







(Decrease) increase in cash


(19,521)


17,344







Cash at beginning of period


55,089


13,304







Cash at end of period


$  35,568


$  30,648



In accordance with the SEC’s Regulation G, tables 1, 2, 3, 4 and 5 provide non-GAAP measures used in this earnings release and a reconciliation to the most closely related Generally Accepted Accounting Principle (GAAP) measure.  Libbey believes that providing supplemental non-GAAP financial information is useful to investors in understanding Libbey's core business and trends.  In addition, it is the basis on which Libbey's management assesses performance.  Although Libbey believes that the non-GAAP financial measures presented enhance investors' understanding of Libbey's business and performance, these non-GAAP measures should not be considered an alternative to GAAP.














Table 1













Reconciliation of "As Reported" results to "As Adjusted" results - Quarter







(Dollars in thousands, except per-share amounts)











(unaudited)




























Three Months Ended September 30,



2010


2009



As Reported


Special Items


As Adjusted


As Reported


Special Items


As Adjusted

Net sales


$       200,007


$        -


$ 200,007


$  186,878


$                 -


$ 186,878

Freight billed to customers


457


-


457


419


-


419

Total revenues


200,464


-


200,464


187,297


-


187,297

Cost of sales


158,779


578


158,201


144,337


162


144,175

Gross profit


41,685


(578)


42,263


42,960


(162)


43,122














Selling, general and administrative expenses


25,335


1,096


24,239


24,811


255


24,556

Special charges


700


700


-


300


300


             -  

Income from operations


15,650


(2,374)


18,024


17,849


(717)


18,566














Other income


23


-


23


2,703


(27)


2,730














Earnings before interest and income taxes


15,673


(2,374)


18,047


20,552


(744)


21,296

Interest expense


11,855


-


11,855


17,451


-


17,451

Income before income taxes


3,818


(2,374)


6,192


3,101


(744)


3,845














Provision for (benefit from) income taxes


1,472


-


1,472


(432)


-


(432)

Net income


$           2,346


$ (2,374)


$     4,720


$      3,533


$            (744)


$     4,277



























Net income per share:













Basic


$             0.13


$   (0.13)


$       0.26


$        0.23


$           (0.05)


$       0.28

Diluted


$             0.12


$   (0.12)


$       0.23


$        0.23


$           (0.05)


$       0.27



























Weighted average shares:













Outstanding


18,148






15,152





Diluted


20,287






15,588














































Three Months Ended September 30, 2010


Three Months Ended September 30, 2009





Equity


Total


Pension




Total



Restructuring


Offering


Special


Settlement


Restructuring


Special

Special Items Detail-(income) expense:


Charges (1)


Fees (2)


Items


Charge (3)


Charges (1)


Items














Cost of sales


$              578


$        -


$        578


$            -


$              162


$        162














SG&A


-


1,096


1,096


255


-


          255














Special charges


700


-


700


-


300


          300








































Other expense


-


-


-


-


27


            27














Total Special Items


$           1,278


$  1,096


$     2,374


$         255


$              489


$        744














(1) Restructuring charges are related to the closure of our Syracuse, New York, manufacturing facility, our Mira Loma, California, distribution center and the decorating operations at our Shreveport manufacturing facility.














(2) Equity offering fees under selling, general and administrative expense are related to the secondary stock offering completed in August, 2010, for which the company received no proceeds.














(3) The pension settlement charges were triggered by excess lump sum distributions taken by employees, which required us to record unrecognized gains and losses in our pension plan accounts.



Table 2













Reconciliation of "As Reported" results to "As Adjusted" results - Nine Months







(Dollars in thousands, except per-share amounts)







(unaudited)




























Nine Months Ended September 30,



2010


2009



As Reported


Special Items


As Adjusted


As Reported


Special Items


As Adjusted

Net sales


$ 576,947


$                 -


$         576,947


$ 540,557


$        -


$  540,557

Freight billed to customers


1,311


-


1,311


1,163


-


1,163

Total revenues


578,258


-


578,258


541,720


-


541,720

Cost of sales


454,665


2,320


452,345


453,761


1,983


451,778

Gross profit


123,593


(2,320)


125,913


87,959


(1,983)


89,942














Selling, general and administrative expenses


72,878


1,096


71,782


69,699


2,955


66,744

Special charges


1,088


1,088


-


974


974


              -  

Income from operations


49,627


(4,504)


54,131


17,286


(5,912)


23,198

Gain on redemption of debt


56,792


56,792


-


-


-


              -  

Other income


916


(130)


1,046


5,424


(213)


5,637














Earnings before interest and income taxes


107,335


52,158


55,177


22,710


(6,125)


28,835

Interest expense


33,243


-


33,243


52,162


-


52,162

Income (loss) before income taxes


74,092


52,158


21,934


(29,452)


(6,125)


(23,327)














Provision for (benefit from) income taxes


6,769


-


6,769


(7,756)


-


(7,756)

Net income (loss)


$   67,323


$         52,158


$           15,165


$ (21,696)


$ (6,125)


$  (15,571)



























Net income (loss) per share:













Basic


$       3.98


$             3.08


$               0.90


$     (1.45)


$   (0.41)


$      (1.04)

Diluted


$       3.26


$             2.52


$               0.73


$     (1.45)


$   (0.41)


$      (1.04)



























Weighted average shares:













Outstanding


16,928






14,926





Diluted


20,658






14,926




















































Nine Months Ended September 30, 2010


Nine Months Ended September 30, 2009



Gain on




Equity Offering




Total


Pension




Total



PIK


Restructuring


and Finance




Special


Settlement


Restructuring


Special

Special Items Detail-(income) expense:


Notes (1)


Charges (2)


Fees (3)


Other (4)


Items


Charge (5)


Charges (2)


Items


















Cost of sales


$           -


$              578


$                   -


$     1,742


$  2,320


$            -


$           1,983


$ 1,983


















SG&A


-


-


1,096


-


1,096


2,955


-


2,955


















Special charges


-


1,088


-


-


1,088


-


974


974


















Gain on redemption of debt


(70,193)


-


13,401


-


(56,792)


-


-


-


















Other expense


-


130


-


-


130


-


213


213


















Total Special Items


$ (70,193)


$           1,796


$           14,497


$     1,742


$ (52,158)


$      2,955


$           3,170


$ 6,125


















(1) Gain on PIK Notes is the difference between the carrying value and the face value of the PIK Notes when we redeemed them in February 2010.




















(2) Restructuring charges are related to the closure of our Syracuse, New York, manufacturing facility, our Mira Loma, California, distribution center and the decorating operations at our Shreveport manufacturing facility.


















(3) Equity offering and finance fees include the write-off of unamortized finance fees and discounts on the floating rate senior notes, unamortized finance fees on the refinanced credit facility, call premium payments and fees related to the secondary stock offering completed in August 2010 for which the company received no proceeds.


















(4) Other cost of sales includes a write down of certain after-processing equipment within our International segment and other items.




















(5) The pension settlement charges were triggered by excess lump sum distributions taken by employees, which required us to record unrecognized gains and losses in our pension plan accounts.



Table 3










Reconciliation of Net Income (Loss) to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA








(Dollars in thousands)































Three Months Ended September 30,



Nine Months ended September 30,



2010


2009



2010


2009











Reported net income (loss)


$                      2,346


$                      3,533



$                        67,323


$                      (21,696)











Add:










Interest expense


11,855


17,451



33,243


52,162

Provision for (benefit from) income taxes


1,472


(432)



6,769


(7,756)

Depreciation and amortization


10,040


10,629



30,994


32,875

EBITDA


25,713


31,181



138,329


55,585











Add:










Special Items before interest and taxes


2,374


744



(52,158)


6,125

Less: Depreciation expense included in Special Items and also in Depreciation and Amortization above


-


-



-


(705)











Adjusted EBITDA


$                    28,087


$                    31,925



$                        86,171


$                        61,005























Table 4




















Reconciliation of Net Cash (used in) provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow








(Dollars in thousands)






















Three Months Ended September 30,



Nine Months ended September 30,



2010


2009



2010


2009











Net cash (used in) provided by operating activities


$                     (2,780)


$                    26,639



$                      (10,833)


$                        65,729

Capital expenditures


(7,743)


(2,737)



(19,122)


(12,287)

Proceeds from asset sales and other


-


172



-


260

Free Cash Flow


(10,523)


24,074



(29,955)


53,702











Payment of cash interest on PIK Notes


-


-



29,400


-

Adjusted Free Cash Flow


$                   (10,523)


$                    24,074



$                           (555)


$                        53,702



Table 5








Summary Business Segment information








(Dollars in thousands)

























Three months ended September 30,


Nine months ended September 30,


2010


2009


2010


2009

Net Sales:








North American Glass

$ 137,101


$ 128,316


$ 404,083


$ 374,803

North American Other

20,768


20,462


63,488


66,180

International

45,245


40,279


118,381


103,663

Eliminations

(3,107)


(2,179)


(9,005)


(4,089)

Consolidated Net Sales

$ 200,007


$ 186,878


$ 576,947


$ 540,557

















Adjusted Earnings before Interest & Taxes (EBIT):








North American Glass

$   11,556


$   16,956


$   43,089


$   22,763

North American Other

2,831


3,335


11,087


8,352

International

3,660


1,005


1,001


(2,280)

Consolidated Adjusted EBIT

$   18,047


$   21,296


$   55,177


$   28,835









Adjusted Depreciation & Amortization: (1)








North American Glass

$     5,968


$     6,074


$   18,250


$   18,857

North American Other

184


244


570


1,125

International

3,888


4,311


12,174


12,188

Consolidated Adjusted Depreciation & Amortization

$   10,040


$   10,629


$   30,994


$   32,170









(1) Adjusted Depreciation & Amortization for YTD 2009 excludes $705 of depreciation expense that is included in Special Items below.
















Special Items:








North American Glass

$     2,374


$        362


$ (55,334)


$     3,036

North American Other

-


382


489


3,089

International

-


-


2,687


-

Consolidated Special Items

$     2,374


$        744


$ (52,158)


$     6,125









Reconciliation of Adjusted EBIT to Net Income (Loss):








Segment Adjusted EBIT

$   18,047


$   21,296


$   55,177


$   28,835

Special Items before interest and taxes

(2,374)


(744)


52,158


(6,125)

Interest Expense

(11,855)


(17,451)


(33,243)


(52,162)

Income Taxes

(1,472)


432


(6,769)


7,756

Net Income (Loss)

$     2,346


$     3,533


$   67,323


$ (21,696)

















Note:

North American Glass—includes sales of glass tableware from subsidiaries throughout the United States, Canada and Mexico.


North American Other—includes sales of ceramic dinnerware, metal tableware, holloware and serveware and plastic items.


International—includes worldwide sales of glass tableware from subsidiaries outside the United States, Canada and Mexico.



SOURCE Libbey Inc.

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here
   
Financial Widgets

Display market data, financial news or stock quotes - Learn More

Advertising Network

Advertise on FinancialContent's huge network - Learn More

Web Services

Power your internet and wireless applications - Learn More