Libbey Inc. Announces First Quarter 2010 Results
On Thursday April 29, 2010, 7:45 am
TOLEDO, Ohio, April 29 /PRNewswire-FirstCall/ --
* First Quarter Net Sales of $173.9 Million, an Increase of 10.2 Percent Compared to $157.9 Million in the Prior-Year Quarter.
* Libbey Mexico Sales Increase 32.2 Percent.
* International Sales Increase 25.7 Percent.
* Sales to U.S. and Canadian Retail Customers Increase 12.8 Percent.
* Total Debt Decreases $63.2 Million From Year-End 2009.
* Income From Operations $10.8 Million in the First Quarter of 2010 Compared to Loss from Operations of $12.1 Million in the Prior-Year Quarter.
* Adjusted EBITDA $20.8 Million in the First Quarter of 2010 Compared to $3.9 Million in the First Quarter of 2009.
Libbey Inc. (NYSE Amex: LBY) announced today that sales for the first quarter of 2010 were $173.9 million, compared to $157.9 million in the first quarter of 2009, an improvement of 10.2 percent. Libbey reported net income of $55.4 million, or $2.76 per diluted share, for the first quarter ended March 31, 2010, compared to a net loss of $27.9 million, or $1.89 per diluted share, in the prior-year quarter. Excluding special items of $56.4 million, Libbey had a net loss of $1.0 million (see Table 1) and diluted loss per share of $0.05 for the first quarter of 2010. The special items in the first quarter 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.
First Quarter Results
For the quarter-ended March 31, 2010, sales were $173.9 million, compared to $157.9 million in the year-ago quarter. Sales in the North American Glass segment were $120.6 million, an increase of 10.9 percent, compared to $108.7 million in the first quarter of 2009 (see Table 4). Primary contributors to the increased sales included a 32.2 percent increase in sales of Crisa products and a 12.8 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 decreased approximately 4.5 percent, partially attributable to the impact of severe winter weather in January and February. North American Other sales were $19.6 million, compared to $21.4 million in the prior-year quarter, as shipments of Syracuse China products were off 33.4 percent, primarily due to the closure of the Syracuse China facility in April 2009 and the decision to reduce the Syracuse China product offering. Sales of Traex products were lower by 5.6 percent versus the prior year. Sales to World Tableware customers increased 8.1 percent during the quarter. International segment sales increased 25.7 percent to $36.3 million, compared to $28.9 million in the year-ago quarter. The increase in International sales was led by a 56.2 percent increase in sales at Libbey China, a 23.4 percent increase in sales to Royal Leerdam customers and a 16.1 percent sales growth at Crisal in Portugal.
The Company reported income from operations of $10.8 million during the quarter, compared to a loss from operations of $12.1 million in the year-ago quarter. Income from operations, excluding special items (see Table 1), was $11.1 million in the first quarter of 2010, compared to a loss from operations of $7.3 million during the first quarter of 2009. Factors contributing to the income from operations improvement (both including and excluding special items) were higher sales and higher capacity utilization, partially offset by higher selling, general and administrative expenses.
Libbey reported earnings before interest and taxes (EBIT) of $66.9 million, compared to a loss before interest and taxes of $12.1 million in the year-ago quarter. The improved EBIT was a result of the gain on the extinguishment of debt and the increase in income from operations discussed above. EBIT, excluding special items (see Table 1), was $10.4 million in the first quarter of 2010, compared to a loss before interest and taxes of $7.1 million during the first quarter 2009. Adjusted EBIT (see Table 4) was $8.0 million for North American Glass, compared to a loss of $6.1 million in the year-ago quarter. North American Other reported adjusted EBIT for the first quarter of 2010 was $3.5 million, compared to $1.3 million in the year-ago quarter. The International segment reported an adjusted loss before interest and taxes of $1.1 million, compared to an adjusted loss before interest and taxes of $2.3 million in the first quarter of 2009.
Libbey reported that Adjusted EBITDA (see Table 2) was $20.8 million for the first quarter, compared to $3.9 million in the first quarter of 2009.
Interest expense decreased by $7.6 million to $9.6 million, compared to $17.2 million in the year-ago period, as a result of lower variable interest rates, lower debt levels and the impact of the debt refinancing completed in February 2010.
Libbey reported net income of $55.4 million, or $2.76 per diluted share, for the first quarter ended March 31, 2010, compared to a net loss of $27.9 million, or $1.89 per diluted share, in the prior year quarter. Excluding special items of $56.4 million, Libbey had a net loss of $1.0 million (see Table 1) and diluted loss per share of $0.05 for the first quarter of 2010. The special items in the first quarter of 2010 included a gain of $70.2 million, representing 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 floating rate senior notes and the ABL credit facility and call premium payments.
Working Capital and Liquidity
As of March 31, 2010, working capital, defined as inventories and accounts receivable less accounts payable, was $187.0 million, compared to $167.6 million at December 31, 2009, and $193.1 million at March 31, 2009. Working capital as a percentage of net sales was 24.5 percent at March 31, 2010, compared to 24.7 percent at March 31, 2009.
Adjusted free cash flow, as detailed in the attached Table 3, was a use of $20.9 million in the first quarter of 2010, after adjusting for the payment of interest on the PIK notes, compared to a source of $9.5 million in the first quarter of 2009. The primary contributors were increases in inventories and receivables and decreases in accounts payable and payment of incentive compensation during the first quarter of 2010.
Libbey reported that it had available capacity of $51.2 million under its Asset Backed Loan (ABL) credit facility as of March 31, 2010, with no loans currently outstanding. The Company also had cash on hand of $18.0 million at March 31, 2010.
Solid Improvement in North American Glass and International Segments
John F. Meier, chairman and chief executive officer said, "We were pleased with the double-digit sales improvements we saw in both the North American Glass and International segments in the first quarter. We were also pleased that the higher sales and capacity utilization resulted in a $16.9 million improvement in Adjusted EBITDA, when compared to the prior year first quarter."
Webcast Information
Libbey will hold a conference call for investors on Thursday, April 29, 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. 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.
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