Libbey Inc. Announces Third Quarter 2015 Financial Results

05 Nov, 2015, 07:45 ET from Libbey Inc.

TOLEDO, Ohio, Nov. 5, 2015 /PRNewswire/ --

  • Outstanding quarterly net sales growth of 8.4 percent (constant currency) in foodservice, despite continued weakness in restaurant traffic
  • Total Company net sales in the quarter decreased 0.7 percent (constant currency) versus prior year, but demonstrated strong Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (Adjusted EBITDA) margins of 15.3 percent
  • Owing to weakness in markets outside the United States, Company now expects full-year revenue growth of approximately one percent on a constant currency basis and Adjusted EBITDA margins of approximately 14 percent

Libbey Inc. (NYSE MKT: LBY), one of the largest glass tableware manufacturers in the world, today reported results for the third quarter-ended September 30, 2015.

Third Quarter Financial Highlights

  • Net sales for the third quarter were $201.8 million, compared to $216.0 million for the third quarter of 2014, a decrease of 6.6 percent (or a decrease of 0.7 percent excluding currency fluctuation).
  • Net income for the third quarter of 2015 was $16.7 million, compared to net income of $13.8 million in the prior-year third quarter. Adjusted net income (see Table 1) for the third quarter of 2015 was $18.0 million, compared to $13.8 million recorded in the third quarter of 2014.
  • Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) (see Table 3) for the third quarter of 2015 were $30.9 million, compared to $31.7 million in the prior-year quarter.

"Our core foodservice channel continues to be very strong around the globe in the face of declining restaurant traffic trends. This is the sixth consecutive quarter of growth in foodservice for the Company. Unfortunately, that was offset in the third quarter by weakness in our retail and business-to-business channels," said Stephanie A. Streeter, chief executive officer of Libbey Inc. "Given the macro environment and the significant impact of currency, we delivered a solid performance and the fundamentals of our business remain strong. Even though our top-line growth was weaker than expected, we achieved 15.3 percent Adjusted EBITDA margins, in-line with our expectations and ahead of prior year, largely driven by favorable price-mix, as we continue to gain share in our most profitable and important foodservice channel. However, the global economic environment continues to be inconsistent, and as a result, we believe it's prudent to adjust our outlook for the remainder of 2015. We are now forecasting sales growth of approximately one percent, on a constant currency basis, and forecast Adjusted EBITDA margins of approximately 14 percent."

Third Quarter Segment Sales and Operational Review

  • Net sales in the Americas segment were $139.5 million, compared to $149.4 million in the third quarter of 2014, a decrease of 6.6 percent (or a decrease of 2.0 percent excluding currency impact). While foodservice sales remained strong, the reduction in net sales in the Americas was primarily the result of softness in the retail channel.
  • Net sales in the EMEA segment decreased 18.9 percent (or a decrease of 4.1 percent excluding currency impact) to $30.6 million, compared to $37.7 million in the third quarter of 2014, due to softness in the retail and business-to-business channels.
  • Net sales in the U.S. Sourcing segment were $23.5 million in the third quarter of 2015, compared to $20.6 million in the prior-year quarter, an increase of 14.2 percent.
  • Net sales in Other were $8.2 million in the third quarter of 2015, compared to $8.3 million in the comparable period last year, reflecting a decrease of 1.1 percent (or an increase of 1.4 percent excluding currency impact) in the Asia Pacific region.
  • The Company's effective tax rate was (15.4) percent for the quarter-ended September 30, 2015, compared to 20.4 percent for the quarter-ended September 30, 2014. The effective rate in both years was generally influenced by foreign earnings with differing statutory rates, foreign withholding tax, accruals related to uncertain tax positions, non-taxable foreign translation gains and other activity in jurisdictions with recorded valuation allowances.

Nine-Month Financial Highlights

  • Net sales for the first nine months of 2015 were $603.2 million, compared to $621.1 million for the first nine months of 2014, a decrease of 2.9 percent (or an increase of 2.7 percent excluding currency fluctuation). During the first nine months, foodservice net sales for the Company were up 6.0 percent versus prior year (or 8.2 percent in constant currency).
  • Net income for the first nine months of 2015 was $34.2 million, compared to a net loss of $14.8 million for the first nine months of 2014. The net loss for the first nine months of 2014 included a $47.2 million charge for the retirement of debt during the period. Adjusted net income (see Table 2) for the first nine months of 2015 was $38.7 million, compared to $38.9 million recorded in the first nine months of 2014.
  • Adjusted EBITDA (see Table 3) was $85.2 million for the first nine months of 2015, compared to $92.7 million for the similar period in 2014.
  • Year to date in 2015, Libbey has repurchased 412,473 shares at an average price of $37.03.

Nine-Month Segment Sales and Operational Review

  • Net sales in the Americas segment for the first nine months of 2015 were $417.3 million, compared to $425.7 in the first nine months in 2014, a decrease of 2.0 percent (or an increase of 1.7 percent excluding currency fluctuation). Sales performance was led by a 4.5 percent increase in sales within our foodservice channel (or 5.8 percent increase excluding currency impact). Partially offsetting this increase is a decrease in our retail channel of 6.5 percent (or 1.9 percent decrease excluding currency impact).
  • Net sales in the EMEA segment for the first nine months of 2015 decreased 18.1 percent (or down 1.4 percent excluding currency impact) to $91.2 million, compared to $111.4 million in the first nine months of 2014.
  • Net sales in the U.S. Sourcing segment for the first nine months of 2015 increased 13.0 percent to $67.5 million, compared to $59.7 million in the first nine months of 2014.
  • Sales in Other were $27.2 million in the first nine months of 2015, compared to $24.2 million in the prior-year period. This increase was the result of a 12.3 percent increase in sales (13.9 percent excluding currency impact) in the Asia Pacific region.
  • Interest expense in the first nine months of 2015 was $13.8 million, a decrease of $4.2 million compared to $18.0 million in the year-ago period, primarily driven by lower interest rates as a result of the refinancing completed during the second quarter of 2014.
  • Our effective tax rate was 4.1 percent for the nine months ended September 30, 2015, compared to (46.6) percent for the nine months ended September 30, 2014. The effective tax rate was generally influenced by foreign earnings with differing statutory rates, foreign withholding tax, accruals related to uncertain tax positions, non-taxable foreign translation gains and other activity in jurisdictions with recorded valuation allowances.

Balance Sheet and Liquidity

  • Libbey reported that it had available capacity of $83.7 million under its ABL credit facility as of September 30, 2015, with $7.0 million of loans currently outstanding. The Company also had cash on hand of $30.1 million as of September 30, 2015.
  • As of September 30, 2015, working capital, defined as inventories and accounts receivable less accounts payable, was $231.9 million, an increase of $15.1 million compared to $216.8 million at September 30, 2014 (see Table 5). The increase was primarily a result of higher inventories and lower accounts payable, partially offset by lower accounts receivable.

Sherry Buck, chief financial officer, concluded: "Despite the somewhat tepid economic environment that we saw developing throughout the quarter, we continued to generate strong free cash flow in the quarter of $9.3 million. We are on track to return more than 50 percent of our free cash flow to shareholders through dividends and share repurchases, and we have strong liquidity with $30 million in cash on hand and approximately $84 million available on our ABL. We remain committed to our balanced capital allocation program that we announced earlier this year."

Webcast Information

Libbey will hold a conference call for investors on Thursday, November 5, 2015, at 11 a.m. Eastern Standard Time. The conference call will be webcast 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 7 days after the conclusion of the call.

About Libbey Inc.

Based in Toledo, Ohio, Libbey Inc. is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the U.S., Mexico, China, Portugal and the Netherlands. In existence since 1818, the Company supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries. Libbey's global brand portfolio, in addition to its namesake brand, includes Crisa®, Royal Leerdam®, World® Tableware, Syracuse® China, and Crisal Glass®. In 2014, Libbey Inc.'s net sales totaled $852.5 million. Additional information is available at www.libbey.com.

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 reflect only 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, and that investors should not place undue reliance on such 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 13, 2015.  Important factors potentially affecting performance include but are not limited to risks related to our ability to borrow under our ABL credit agreement; increased competition from foreign suppliers endeavoring to sell glass tableware, ceramic dinnerware and metalware 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, freight, corrugated packaging, and other purchased materials; high levels of indebtedness; high 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 Libbey Mexico, 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.
Condensed Consolidated Statements of Operations
(dollars in thousands, except per-share amounts)
(unaudited)



Three months ended September 30,


2015


2014





Net sales

$

201,784



$

215,957


Freight billed to customers

734



931


Total revenues

202,518



216,888


Cost of sales (1)

154,827



166,573


Gross profit

47,691



50,315


Selling, general and administrative expenses (1)

28,101



29,573


Income from operations

19,590



20,742


Other income (expense) (1)

(396)



1,340


Earnings before interest and income taxes

19,194



22,082


Interest expense

4,701



4,797


Income before income taxes

14,493



17,285


Provision (benefit) for income taxes (1)

(2,226)



3,527


Net income

$

16,719



$

13,758






Net income per share:




Basic

$

0.77



$

0.63


Diluted

$

0.75



$

0.62


Dividends declared per share

$

0.11



$






Weighted average shares:




Outstanding

21,796



21,800


Diluted

22,199



22,240



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

 

 


Libbey Inc.
Condensed Consolidated Statements of Operations
(dollars in thousands, except per-share amounts)
(unaudited)







Nine months ended September 30,


2015


2014





Net sales

$

603,200



$

621,074


Freight billed to customers

2,075



2,638


Total revenues

605,275



623,712


Cost of sales (1)

458,199



480,791


Gross profit

147,076



142,921


Selling, general and administrative expenses (1)

98,890



89,177


Income from operations

48,186



53,744


Loss on redemption of debt (1)



(47,191)


Other income (1)

1,277



1,340


Earnings before interest and income taxes

49,463



7,893


Interest expense

13,762



17,984


Income (loss) before income taxes

35,701



(10,091)


Provision for income taxes (1)

1,476



4,703


Net income (loss)

$

34,225



$

(14,794)






Net income (loss) per share:




Basic

$

1.57



$

(0.68)


Diluted

$

1.54



$

(0.68)


Dividends declared per share

$

0.33



$






Weighted average shares:




Outstanding

21,816



21,667


Diluted

22,268



21,667



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

 

 


Libbey Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)



September 30, 2015


December 31, 2014


(unaudited)



ASSETS:




Cash and cash equivalents

$

30,101



$

60,044


Accounts receivable — net

96,738



91,106


Inventories — net

199,115



169,828


Other current assets

29,277



27,701


Total current assets

355,231



348,679






Pension asset

848



848


Purchased intangibles — net

16,720



17,771


Goodwill

164,112



164,112


Deferred income taxes

5,463



5,566


Other assets

13,572



13,976


Total other assets

200,715



202,273


Property, plant and equipment — net

276,351



277,978


Total assets

$

832,297



$

828,930






LIABILITIES AND SHAREHOLDERS' EQUITY:




Accounts payable

$

63,921



82,485


Salaries and wages

29,518



29,035


Accrued liabilities

54,847



42,638


Accrued income taxes



2,010


Pension liability (current portion)

1,356



1,488


Non-pension postretirement benefits (current portion)

4,800



4,800


Derivative liability

3,817



2,653


Deferred income taxes

3,633



3,633


Long-term debt due within one year

4,758



7,658


Total current liabilities

166,650



176,400






Long-term debt

439,439



436,264


Pension liability

46,322



56,462


Non-pension postretirement benefits

60,456



63,301


Deferred income taxes

4,774



5,893


Other long-term liabilities

15,579



13,156


Total liabilities

733,220



751,476






Common stock and capital in excess of par value

327,034



331,609


Treasury stock

(4,594)



(1,060)


Retained deficit

(87,620)



(114,648)


Accumulated other comprehensive loss

(135,743)



(138,447)


Total shareholders' equity

99,077



77,454


Total liabilities and shareholders' equity

$

832,297



$

828,930


 

 

Libbey Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)



Three months ended September 30,


2015


2014

Operating activities:




Net income

$

16,719



$

13,758


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

10,633



9,569


Loss on asset sales and disposals

87



234


Change in accounts receivable

(253)



(1,926)


Change in inventories

(5,485)



(9,460)


Change in accounts payable

(1,315)



767


Accrued interest and amortization of discounts and finance fees

344



384


Pension & non-pension postretirement benefits

(445)



(349)


Accrued liabilities & prepaid expenses

698



4,105


Income taxes

(3,987)



1,498


Share-based compensation expense

905



1,109


Other operating activities

(359)



(616)


Net cash provided by operating activities

17,542



19,073






Investing activities:




Additions to property, plant and equipment

(8,244)



(16,693)


Proceeds from asset sales and other



3


Net cash used in investing activities

(8,244)



(16,690)






Financing activities:




Borrowings on ABL credit facility



33,400


Repayments on ABL credit facility

(7,000)



(31,500)


Other repayments



(5,201)


Other borrowings



3,250


Repayments on Term Loan B

(1,100)



(1,100)


Stock options exercised

345



759


Debt issuance costs and other



(91)


Dividends

(2,397)




Net cash used in financing activities

(10,152)



(483)






Effect of exchange rate fluctuations on cash

(397)



(1,020)


Increase (decrease) in cash

(1,251)



880






Cash & cash equivalents at beginning of period

31,352



23,209


Cash & cash equivalents at end of period

$

30,101



$

24,089


 

 


Libbey Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)



Nine months ended
September 30,


2015


2014

Operating activities:




Net income (loss)

$

34,225



$

(14,794)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Depreciation and amortization

31,286



30,837


Loss on asset sales and disposals

390



247


Change in accounts receivable

(7,702)



(16,329)


Change in inventories

(31,904)



(28,823)


Change in accounts payable

(8,656)



2,119


Accrued interest and amortization of discounts and finance fees

946



1,729


Call premium on senior notes



37,348


Write-off of finance fees on senior notes



9,086


Pension & non-pension postretirement benefits

1,453



2,420


Restructuring



(289)


Accrued liabilities & prepaid expenses

12,800



(3,617)


Income taxes

(4,925)



(2,425)


Share-based compensation expense

5,549



3,746


Other operating activities

(1,414)



(2,202)


Net cash provided by operating activities

32,048



19,053






Investing activities:




Additions to property, plant and equipment

(41,480)



(38,528)


Proceeds from furnace malfunction insurance recovery



2,350


Proceeds from asset sales and other

2



7


Net cash used in investing activities

(41,478)



(36,171)






Financing activities:




Borrowings on ABL credit facility

44,500



54,700


Repayments on ABL credit facility

(37,500)



(45,800)


Other repayments

(3,267)



(5,316)


Other borrowings



5,214


Payments on 6.875% senior notes



(405,000)


Proceeds from Term Loan B



438,900


Repayments on Term Loan B

(3,300)



(1,100)


Call premium on senior notes



(37,348)


Stock options exercised

3,334



2,881


Debt issuance costs and other



(6,959)


Dividends

(7,197)




Treasury shares purchased

(15,275)




Net cash provided by (used in) financing activities

(18,705)



172






Effect of exchange rate fluctuations on cash

(1,808)



(1,173)


Decrease in cash

(29,943)



(18,119)






Cash & cash equivalents at beginning of period

60,044



42,208


Cash & cash equivalents at end of period

$

30,101



$

24,089


 

In accordance with the SEC's Regulation G, tables 1 through 6 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,



2015


2014



As Reported


Special
Items


As Adjusted


As Reported


Special
Items


As Adjusted

Net sales


$

201,784



$



$

201,784



$

215,957



$



$

215,957


Freight billed to customers


734





734



931





931


Total revenues


202,518





202,518



216,888





216,888


Cost of sales


154,827



(100)



154,927



166,573





166,573


Gross profit


47,691



100



47,591



50,315





50,315


    Gross profit margin


23.6%






23.6%



23.3%





23.3%


Selling, general and administrative expenses


28,101



1,176



26,925



29,573





29,573


Income from operations


19,590



(1,076)



20,666



20,742





20,742


Other income (expense)


(396)



(42)



(354)



1,340





1,340


Earnings before interest and income taxes


19,194



(1,118)



20,312



22,082





22,082


Interest expense


4,701





4,701



4,797





4,797


Income before income taxes


14,493



(1,118)



15,611



17,285





17,285


Provision (benefit) for income taxes


(2,226)



119



(2,345)



3,527





3,527


Net income


$

16,719



$

(1,237)



$

17,956



$

13,758



$



$

13,758















Net income per share:













Basic


$

0.77



$

(0.06)



$

0.82



$

0.63



$



$

0.63


Diluted


$

0.75



$

(0.06)



$

0.81



$

0.62



$



$

0.62















Weighted average shares:













Outstanding


21,796







21,800






Diluted


22,199







22,240






 

 



Three months ended September 30, 2015

Special Items Detail  - (Income) Expense:


Reorganization (1)


Derivatives (2)


Environmental
Obligation (3)


Total

Special

Items

Cost of sales


$



$



$

(100)



$

(100)


SG&A


1,176







1,176


Other (income) expense




42





42


Income taxes


131



(12)





119


Total Special Items


$

1,307



$

30



$

(100)



$

1,237



(1)  Management reorganization to support our growth strategy.

(2) Derivatives relate to hedge ineffectiveness on our natural gas contracts and interest rate swap as well as mark-to-market adjustments on our natural gas contracts that have been de-designated and those for which we did not elect hedge accounting.

(3) Environmental obligation relates to our assessment of Syracuse China Company as a potentially responsible party with respect to the Lower Ley Creek sub-site of the Onondaga Lake Superfund site.

 

 















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,



2015


2014



As
Reported


Special
Items


As
Adjusted


As
Reported


Special
Items


As
Adjusted

Net sales


$

603,200



$



$

603,200



$

621,074



$



$

621,074


Freight billed to customers


2,075





2,075



2,638





2,638


Total revenues


605,275





605,275



623,712





623,712


Cost of sales


458,199



123



458,076



480,791



6,867



473,924


Gross profit


147,076



(123)



147,199



142,921



(6,867)



149,788


    Gross profit margin


24.4%




24.4%


23.0%




24.1%

Selling, general and administrative expenses


98,890



4,426



94,464



89,177





89,177


Income from operations


48,186



(4,549)



52,735



53,744



(6,867)



60,611


Loss on redemption of debt








(47,191)



(47,191)




Other income


1,277



125



1,152



1,340



70



1,270


Earnings before interest and income taxes


49,463



(4,424)



53,887



7,893



(53,988)



61,881


Interest expense


13,762





13,762



17,984





17,984


Income (loss) before income taxes


35,701



(4,424)



40,125



(10,091)



(53,988)



43,897


Provision for income taxes


1,476



29



1,447



4,703



(341)



5,044


Net income (loss)


$

34,225



$

(4,453)



$

38,678



$

(14,794)



$

(53,647)



$

38,853















Net income (loss) per share:













Basic


$

1.57



$

(0.20)



$

1.77



$

(0.68)



$

(2.48)



$

1.79


Diluted


$

1.54



$

(0.20)



$

1.74



$

(0.68)



$

(2.48)



$

1.76















Weighted average shares:













Outstanding


21,816







21,667





21,667


Diluted


22,268







21,667





22,126


 

 
























Nine months ended September 30, 2015


Nine months ended September 30, 2014

Special Items Detail  - (Income) Expense:


Reorganization(1)


Executive
Retirement


Derivatives(2)


Environmental
Obligation(3)


Total
Special
Items


Restructuring
Charge(4)


Furnace

Malfunction(5)


Derivatives(2)


Debt
Costs(6)


Total
Special
Items

Cost of sales


$



$



$



$

123



$

123



$

985



$

5,882



$



$



$

6,867


SG&A


4,191



235







4,426












Loss on redemption of debt


















47,191



47,191


Other (income) expense






(125)





(125)







(70)





(70)


Income taxes


(9)





38





29



(296)



(45)







(341)


Total Special Items


$

4,182



$

235



$

(87)



$

123



$

4,453



$

689



$

5,837



$

(70)



$

47,191



$

53,647



(1) Management reorganization to support our growth strategy.

(2) Derivatives relate to hedge ineffectiveness on our natural gas contracts and interest rate swap as well as mark-to-market adjustments on our natural gas contracts that have been de-designated and those for which we did not elect hedge accounting.

(3) Environmental obligation relates to our assessment of Syracuse China Company as a potentially responsible party with respect to the Lower Ley Creek sub-site of the Onondaga Lake Superfund site.

(4) Restructuring charges relate to discontinuing production of certain glassware in North America and reducing manufacturing capacity at our Shreveport, Louisiana, manufacturing facility.

(5)  Furnace malfunction relates to loss of production at our Toledo, Ohio, manufacturing facility.

(6) Debt costs include the write-off of unamortized finance fees and call premium payments on the $405.0 million senior notes redeemed in April and May 2014 and the write-off of the debt carrying value adjustment related to the termination of the $45.0 million interest rate swap.

 

 

Table 3









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

(dollars in thousands)









(unaudited)











Three months ended

September 30,


Nine months ended

September 30,



2015


2014


2015


2014

Reported net income (loss)


$

16,719



$

13,758



$

34,225



$

(14,794)


Add:









Interest expense


4,701



4,797



13,762



17,984


Provision (benefit) for income taxes


(2,226)



3,527



1,476



4,703


Depreciation and amortization


10,633



9,569



31,286



30,837


EBITDA


29,827



31,651



80,749



38,730


Add: Special items before interest and taxes


1,118





4,424



53,988


Adjusted EBITDA


$

30,945



$

31,651



$

85,173



$

92,718


 

 

Table 4









Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

(dollars in thousands)









(unaudited)











Three months ended

September 30,


Nine months ended

September 30,



2015


2014


2015


2014

Net cash provided by operating activities


$

17,542



$

19,073



$

32,048



$

19,053


Capital expenditures


(8,244)



(16,693)



(41,480)



(38,528)


Proceeds from furnace malfunction insurance recovery








2,350


Proceeds from asset sales and other




3



2



7


Free Cash Flow


$

9,298



$

2,383



$

(9,430)



$

(17,118)


 

 

Table 5







Reconciliation to Working Capital







(dollars in thousands)







(unaudited)









September 30, 2015


September 30, 2014


December 31, 2014

Add:







Accounts receivable


$

96,738



$

106,459



$

91,106


Inventories


199,115



189,221



169,828


Less: Accounts payable


63,921



78,895



82,485


Working Capital


$

231,932



$

216,785



$

178,449


 

 


Table 6









Summary Business Segment Information









(dollars in thousands)

(unaudited)


Three months ended

September 30,


Nine months ended

September 30,

Net Sales:


2015


2014


2015


2014









Americas (1)


$

139,477



$

149,366



$

417,340



$

425,741


EMEA (2)


30,572



37,684



91,207



111,413


U.S. Sourcing (3)


23,495



20,574



67,452



59,704


Other (4)


8,240



8,333



27,201



24,216


Consolidated


$

201,784



$

215,957



$

603,200



$

621,074











Segment Earnings Before Interest & Taxes (Segment EBIT) (5) :







Americas (1)


$

23,908



$

25,489



$

68,788



$

73,464


EMEA (2)


254



909



1,274



3,072


U.S. Sourcing (3)


3,214



2,206



6,600



5,375


Other (4)


905



721



3,851



2,035


Segment EBIT


$

28,281



$

29,325



$

80,513



$

83,946











Reconciliation of Segment EBIT to Net Income (Loss):









Segment EBIT


$

28,281



$

29,325



$

80,513



$

83,946


Retained corporate costs (6)


(7,969)



(7,243)



(26,626)



(22,065)


Consolidated Adjusted EBIT


20,312



22,082



53,887



61,881


Loss on redemption of debt








(47,191)


Furnace malfunction








(5,882)


Environmental obligation


100





(123)




Reorganization charges


(1,176)





(4,191)




Restructuring charges








(985)


Derivatives


(42)





125



70


Executive retirement






(235)




Special items before interest and taxes


(1,118)





(4,424)



(53,988)


Interest expense


(4,701)



(4,797)



(13,762)



(17,984)


Income taxes


2,226



(3,527)



(1,476)



(4,703)


Net income (loss)


$

16,719



$

13,758



$

34,225



$

(14,794)











Depreciation & Amortization:









Americas (1)


$

6,666



$

5,153



$

19,148



$

16,963


EMEA (2)


2,131



2,624



6,445



7,988


U.S. Sourcing (3)


6



6



18



20


Other (4)


1,462



1,444



4,434



4,716


Corporate


368



342



1,241



1,150


Consolidated


$

10,633



$

9,569



$

31,286



$

30,837



(1) Americas—includes primarily worldwide sales of manufactured and sourced glass tableware having an end market destination in North and South America.

(2) EMEA—includes primarily worldwide sales of manufactured and sourced glass tableware having an end market destination in Europe, the Middle East and Africa.

(3) U.S. Sourcing—includes primarily U.S. sales of sourced ceramic dinnerware, metal tableware, hollowware, and serveware.

(4) Other—includes worldwide sales of manufactured and sourced glass tableware having an end market destination in Asia Pacific.

(5) Segment EBIT represents earnings before interest and taxes and excludes amounts related to certain items we consider not representative of ongoing operations as well as certain retained corporate costs and other allocations that are not considered by management when evaluating performance.

(6) Retained corporate costs includes certain headquarter, administrative and facility costs, and other costs that are not allocable to the reporting segments.

 

SOURCE Libbey Inc.



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