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Libbey Inc. Announces Third Quarter Results: Income from Operations (IFO) of $17.8 Million Results in an IFO Margin of 9.6 Percent; the Best Third Quarter IFO Margin Since Q3 2003
TOLEDO, Ohio, Oct. 29 /PRNewswire-FirstCall/ --
- Net Income of $3.5 Million, or $0.23 Per Diluted Share
- Income From Operations of $17.8 Million
- Normalized EBITDA of $31.9 Million: The Best Q3 EBITDA Since Q3 2000
- Net Cash Provided by Operating Activities Sets a Record for Third-Quarter Performance of $26.6 Million
- Free Cash Flow Improves by $23.1 Million Compared to Prior-Year Third Quarter
Libbey Inc. (OTC Bulletin Board: LYBI) today reported net income of $3.5 million, or $0.23 per diluted share, for the quarter-ended September 30, 2009, compared to a net loss of $6.0 million, or $0.40 per diluted share, in the prior-year third quarter. Net sales were $186.9 million in the third quarter of 2009, compared to $211.5 million in the prior-year third quarter.
Working Capital and Liquidity
As of September 30, 2009, working capital, defined as inventories and accounts receivable less accounts payable, decreased by $14.3 million year-to-date in 2009 from $206.9 million at December 31, 2008, to $192.6 million at September 30, 2009. The decline is primarily the result of significantly lower inventories, partially offset by an increase in accounts receivable, reflecting the Company's continued success in its cash management efforts.
Free cash flow, as detailed in the attached Table 3, was $24.1 million, compared to $1.0 million in the third quarter of 2008. The primary contributors to the increase in free cash flow were the significant increase in net income and lower capital expenditures. For the first nine months of 2009, free cash flow as detailed in Table 3, was $53.7 million, compared to a use of $39.6 million during the first nine months of 2008.
Libbey reported that, as of September 30, 2009, it had no outstanding balance under its Asset Based Loan (ABL) credit facility and that Libbey had available capacity of $81.3 million under the ABL credit facility as of September 30, 2009, and cash on-hand of $30.6 million. This compares to availability of $56.6 million and cash on-hand of $24.1 million at June 30, 2009.
John F. Meier, chairman and chief executive officer, commenting on the quarter said, "During the third quarter, we continued our solid success in cash flow generation for the year, resulting in increasingly improved liquidity." Mr. Meier added, "Our U.S. retail shipments again led the way during the third quarter, as sales in this channel increased over nine percent compared to the third quarter of 2008. As a result of overall increases in demand, primarily in North America, we also benefited from increased capacity utilization in all three North American glass factories during the third quarter of 2009. These factors, along with the continued success of our cost reduction program, allowed us to generate $31.9 million in normalized EBITDA during the quarter."
Third Quarter Results
For the quarter-ended September 30, 2009, sales decreased 11.7 percent to $186.9 million from $211.5 million in the year-ago quarter. North American Glass sales declined 10.7 percent to $128.3 million (see Table 4) from $143.6 million in the year-ago quarter. The decrease in sales was attributable to a 13.7 percent decrease in sales to Crisa customers (0.6 percent excluding the currency impact of the Mexican peso) and a 17.5 percent decline in sales to U.S. foodservice customers, partially offset by a 9.4 percent increase in shipments to retail glassware customers. Foodservice sales in the third quarter of 2008 were positively impacted by an increase in shipments to customers in advance of the Company's last price increase in August 2008. North American Other sales decreased 27.8 percent, as shipments of Syracuse China products decreased approximately 46.7 percent, related to the closure of the Syracuse China facility earlier this year and the decision to reduce the Syracuse China product offering. Sales of Traex and World Tableware products decreased approximately 27.7 percent and 14.5 percent, respectively. International sales declined 4.1 percent as lower sales at Royal Leerdam and Crisal of 3.9 percent and 7.7 percent, respectively, more than offset increased sales of 20.0 percent to customers of Libbey China. Excluding the negative currency impact, international sales decreased approximately 0.4 percent.
The Company reported income from operations of $17.8 million during the quarter, compared to income from operations of $14.6 million in the year-ago quarter. Normalized income from operations was $18.6 million during the quarter, as detailed in Table 1. Factors contributing to the increase in normalized income from operations were lower spending on labor and benefits, packaging, repairs, natural gas, electricity and distribution costs partially offset by lower sales.
Earnings before interest and taxes (EBIT) were $20.6 million, compared to $13.6 million in the year-ago quarter. Normalized EBIT during the quarter, as detailed in Tables 1 and 4, was $21.3 million. Normalized EBIT was $17.0 million for North American Glass, compared with $9.7 million in the third quarter of 2008. The increase was a result of reduced spending in all locations partially offset by lower sales. North American Other reported Normalized EBIT of $3.3 million for the third quarter of 2009, compared to $2.1 million in the third quarter of 2008. The primary driver of the improved Normalized EBIT was a more profitable mix of Syracuse China products. The International segment reported Normalized EBIT of $1.0 million, compared to Normalized EBIT of $1.7 million in the year-ago quarter. The decrease in Normalized EBIT in the International segment was primarily related to reduced international sales and lower capacity utilization.
Libbey reported that earnings before interest, taxes, depreciation and amortization (EBITDA) (see Table 2) were $31.2 million in the third quarter of 2009 and Normalized EBITDA was $31.9 million, compared to EBITDA (and Normalized EBITDA) of $24.5 million in the year-ago quarter.
The effective tax rate decreased to negative 13.9 percent for the quarter, compared to negative 50.8 percent in the year-ago quarter. The Company's effective tax rate for the quarter was impacted by valuation allowances, changes in the mix of earnings with differing statutory rates and tax planning structures. Libbey reported net income of $3.5 million, or $0.23 per diluted share, for the third quarter of 2009, compared to a net loss of $6.0 million, or a loss of $0.40 per diluted share, in the third quarter of 2008.
Nine-Month Results
For the nine months ended September 30, 2009, sales decreased 13.3 percent to $540.6 million from $623.6 million in the year-ago period. North American Glass sales decreased 12.0 percent to $374.8 million (see Table 4) from $426.1 million in the year-ago period. The lower sales were attributable to a decline of approximately 23.4 percent in Crisa's sales (10.4 percent excluding the currency impact of the Mexican peso) and a decline of approximately 9.9 percent in sales to foodservice glassware customers in the U.S. and Canada. These decreases were partially offset by an increase in U.S. retail sales. Taking into account the 9.4 percent increase in U.S. retail sales during the third quarter, sales to the U.S. retail channel have grown 3.2 percent year-to-date in 2009, resulting in an all-time record retail sales performance during the first nine months of 2009. North American Other sales decreased 22.2 percent, as sales of Syracuse China, World Tableware and Traex were all lower than the first nine months of 2008. International sales decreased 13.7 percent as a result of lower sales to customers of Royal Leerdam and Crisal and unfavorable currency impact on European sales. Libbey China sales increased 10.5 percent for the first nine months of 2009 compared to the first nine months of 2008. Excluding the currency impact, international sales declined approximately 6.2 percent.
The Company reported income from operations of $17.3 million during the first nine months of 2009, compared to income from operations and normalized income from operations of $42.8 million in the year-ago period. Normalized income from operations was $23.2 million for the first nine months of 2009 as detailed in Table 1. Factors contributing to the decrease in normalized income from operations included a $10.6 million exchange rate impact (primarily in Mexico and Europe) and reduced capacity utilization, which reflected our effort to control inventories and generate cash, and lower sales. These factors were partially offset by lower spending on labor, raw materials, packaging, repairs, natural gas, electricity and distribution costs.
EBIT was $22.7 million in the first nine months of 2009, compared to $43.1 million in the first nine months of 2008. Normalized EBIT for the first nine months of 2009, as detailed in Table 1 and Table 4, was $28.8 million. Normalized EBIT for the North American Glass segment was $22.8 million during the first nine months of 2009, compared to Normalized EBIT of $31.7 million in the first nine months of 2008. The decline is a result of lower sales and reduced operating activity in U.S. and Mexican operations. The North American Other segment reported Normalized EBIT for the first nine months of 2009 of $8.4 million, compared to $9.6 million in the year-ago period, the decrease being primarily as a result of lower sales. The International segment reported Normalized EBIT loss of $2.3 million, compared to Normalized EBIT of $1.8 million in the first nine months of 2008. This reduction in the International segment's Normalized EBIT was primarily related to reduced sales and lower capacity utilization compared to the prior-year period.
Libbey reported that normalized EBITDA, as detailed in Table 2, was $61.0 million in the first nine months of 2009, compared to normalized EBITDA of $76.5 million in the year-ago nine-month period.
As a result of lower interest rates, partially offset by slightly higher debt, interest expense decreased $0.1 million compared to the first nine months of 2008.
The effective tax rate was 26.3 percent for the first nine months of 2009, compared to a negative 25.7 percent in the first nine months of 2008. The Company's effective tax rate for the first nine months benefited by $5.3 million due to required intra-period tax allocations between loss from continuing operations and other comprehensive income in the U.S. and a $1.5 million benefit related to the completion of a U.S. federal income tax examination. The effective tax rate was also influenced by valuation allowances, changes in the mix of earnings with differing statutory rates, and tax planning structures. Libbey reported a net loss of $21.7 million for the first nine months of 2009, or a loss of $1.45 per diluted share, compared to a net loss of $11.6 million, or $0.79 per diluted share, in the first nine months of 2008.
Webcast Information
Libbey will hold a conference call for investors on Thursday, October 29, 2009, 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. In addition accompanying slides related to our debt exchange announced yesterday can be found on our Investor Relations page at http://phx.corporate-ir.net/phoenix.zhtml?c=64169&p=irol-irhome, as well as within the webcast player. These slides will be reviewed during the course of our conference call. 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 the Private Securities Litigation Reform Act of 1995. 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, that actual results may differ materially from such 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 16, 2009. Important factors potentially affecting performance include but are not limited to increased competition from foreign suppliers 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, pandemics 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 2008, Libbey Inc.'s net sales totaled $810.2 million.
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)
Three Months Ended September 30,
-------------------------------
2009 2008
---- ----
Net sales $186,878 $211,536
Freight billed to customers 419 664
--- ---
Total revenues 187,297 212,200
Cost of sales (1) 144,337 174,266
------- -------
Gross profit 42,960 37,934
Selling, general and administrative
expenses (1) 24,811 23,377
Special charges (1) 300 -
--- ---
Income from operations 17,849 14,557
Other income (expense) (1) 2,703 (1,000)
----- ------
Earnings before interest and income taxes 20,552 13,557
Interest expense 17,451 17,509
------ ------
Income (loss) before income taxes 3,101 (3,952)
(Benefit from) provision for income taxes (432) 2,006
---- -----
Net income (loss) $3,533 $(5,958)
====== =======
Net income (loss) per share:
Basic $0.23 $(0.40)
===== ======
Diluted $0.23 $(0.40)
===== ======
Weighted average shares:
Outstanding 15,152 14,730
====== ======
Diluted 15,588 14,730
====== ======
(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,
------------------------------
2009 2008
---- ----
Net sales $540,557 $623,640
Freight billed to customers 1,163 1,947
----- -----
Total revenues 541,720 625,587
Cost of sales (1) 453,761 515,148
------- -------
Gross profit 87,959 110,439
Selling, general and administrative
expenses (1) 69,699 67,687
Special charges (1) 974 -
--- ---
Income from operations 17,286 42,752
Other income (1) 5,424 339
----- ---
Earnings before interest and income taxes 22,710 43,091
Interest expense 52,162 52,280
------ ------
Loss before income taxes (29,452) (9,189)
(Benefit from) provision for income taxes (7,756) 2,365
------ -----
Net loss $(21,696) $(11,554)
======== ========
Net loss per share:
Basic $(1.45) $(0.79)
====== ======
Diluted $(1.45) $(0.79)
====== ======
Weighted average shares:
Outstanding 14,926 14,652
====== ======
Diluted 14,926 14,652
====== ======
(1) Refer to Table 1 for Special Charges detail.
LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, 2009 December 31, 2008
------------------ -----------------
(unaudited)
ASSETS
Cash $30,648 $13,304
Accounts receivable - net 91,119 76,072
Inventories - net 153,523 185,242
Other current assets 14,116 17,167
------ ------
Total current assets 289,406 291,785
Pension asset 10,560 9,351
Goodwill and purchased intangibles
- net 190,316 192,857
Property, plant and equipment - net 296,862 314,847
Other assets 12,033 12,714
------ ------
Total assets $799,177 $821,554
======== ========
LIABILITIES AND SHAREHOLDERS'
DEFICIT
Notes payable $1,517 $3,284
Accounts payable 52,087 54,428
Accrued liabilities 91,736 62,272
Pension liability (current portion) 1,579 1,778
Nonpension postretirement
benefits (current portion) 4,684 4,684
Other current liabilities 13,419 23,463
Long-term debt due within one year 9,152 1,117
----- -----
Total current liabilities 174,174 151,026
Long-term debt 516,030 545,856
Pension liability 99,328 109,505
Nonpension postretirement benefits 59,612 57,197
Other liabilities 12,025 15,859
------ ------
Total liabilities 861,169 879,443
Common stock, treasury stock,
capital in excess of par
value and warrants 215,795 203,051
Retained deficit (177,339) (145,154)
Accumulated other comprehensive
loss (100,448) (115,786)
-------- --------
Total shareholders' deficit (61,992) (57,889)
------- -------
Total liabilities and
shareholders' deficit $799,177 $821,554
======== ========
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(unaudited)
Three Months Ended September 30,
-------------------------------
2009 2008
---- ----
Operating activities:
Net income (loss) $3,533 $(5,958)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 10,629 10,899
Loss on asset sales 77 159
Change in accounts receivable 864 7,109
Change in inventories (6,196) (5,712)
Change in accounts payable (3,191) (9,695)
Restructuring charges (1,086) -
Pension & nonpension postretirement (453) (13,252)
Accrued interest and amortization of
discounts, warrants and finance fees 13,447 14,749
Accrued liabilities
& prepaid expenses 8,344 5,842
Income taxes (862) 2,900
Other operating activities 1,533 6,268
----- -----
Net cash provided by
operating activities 26,639 13,309
Investing activities:
Additions to property, plant and
equipment (2,737) (12,390)
Proceeds from asset sales and other 172 71
--- --
Net cash used in investing
activities (2,565) (12,319)
Financing activities:
Net repayments (17,461) (9,256)
Dividends - (369)
--- ----
Net cash used in financing
activities (17,461) (9,625)
Effect of exchange rate fluctuations
on cash (47) (529)
--- ----
Increase (decrease) in cash 6,566 (9,164)
Cash at beginning of period 24,082 17,883
------ ------
Cash at end of period $30,648 $8,719
======= ======
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(unaudited)
Nine Months Ended September 30,
------------------------------
2009 2008
---- ----
Operating activities:
Net loss $(21,696) $(11,554)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Depreciation and amortization 32,875 33,433
Loss on asset sales 109 35
Change in accounts receivable (14,733) (10,351)
Change in inventories 32,050 (10,756)
Change in accounts payable (3,078) (15,607)
Restructuring charges (1,837) -
Pay-in-kind interest 11,916 10,216
Pension & nonpension postretirement 2,712 (13,982)
Payable to Vitro - (19,575)
Accrued interest and amortization of
discounts, warrants and finance fees 14,998 16,709
Accrued liabilities & prepaid expenses 21,128 3,277
Income taxes (9,499) 3,661
Other operating activities 784 4,744
--- -----
Net cash provided by (used in)
operating activities 65,729 (9,750)
Investing activities:
Additions to property, plant and equipment (12,287) (30,002)
Proceeds from asset sales and other 260 117
--- ---
Net cash used in investing activities (12,027) (29,885)
Financing activities:
Net (repayments) borrowings (36,273) 13,253
Dividends - (1,098)
--- ------
Net cash (used in) provided by
financing activities (36,273) 12,155
Effect of exchange rate
fluctuations on cash (85) (340)
--- ----
Increase (decrease) in cash 17,344 (27,820)
Cash at beginning of period 13,304 36,539
------ ------
Cash at end of period $30,648 $8,719
======= ======
In accordance with the SEC's Regulation G, tables 1, 2, 3 and 4 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 "Normalized" results
(Dollars in thousands, except per-share amounts)
(unaudited)
Three Months Ended September 30,
--------------------------------
2009 2008
---- ----
As Reported &
As Reported Special Charges Normalized Normalized
----------- --------------- ---------- -----------
Net sales $186,878 $- $186,878 $211,536
Freight billed
to customers 419 - 419 664
--- --- --- ---
Total revenues 187,297 - 187,297 212,200
Cost of sales 144,337 162 144,175 174,266
------- --- ------- -------
Gross profit 42,960 (162) 43,122 37,934
Selling, general
and administrative
expenses 24,811 255 24,556 23,377
Special charges 300 300 - -
--- --- --- ---
Income from
operations 17,849 (717) 18,566 14,557
Other income
(expense) 2,703 (27) 2,730 (1,000)
----- --- ----- ------
Earnings before
interest and
income taxes 20,552 (744) 21,296 13,557
Interest expense 17,451 - 17,451 17,509
------ --- ------ ------
Income (loss)
before income
taxes 3,101 (744) 3,845 (3,952)
(Benefit from)
provision for
income taxes (432) - (432) 2,006
---- --- ---- -----
Net income (loss) $3,533 $(744) $4,277 $(5,958)
====== ===== ====== =======
Net income (loss)
per share:
Basic $0.23 $(0.05) $0.28 $(0.40)
===== ====== ===== ======
Diluted $0.23 $(0.05) $0.27 $(0.40)
===== ====== ===== ======
Weighted average
shares:
Outstanding 15,152 14,730
====== ======
Diluted 15,588 14,730
====== ======
Nine Months Ended September 30,
-------------------------------
2009 2008
---- ----
As Reported &
As Reported Special Charges Normalized Normalized
----------- --------------- ---------- -----------
Net sales $540,557 $- $540,557 $623,640
Freight billed
to customers 1,163 - 1,163 1,947
----- --- ----- -----
Total revenues 541,720 - 541,720 625,587
Cost of sales 453,761 1,983 451,778 515,148
------- ----- ------- -------
Gross profit 87,959 (1,983) 89,942 110,439
Selling, general
and administrative
expenses 69,699 2,955 66,744 67,687
Special charges 974 974 - -
--- --- --- ---
Income from
operations 17,286 (5,912) 23,198 42,752
Other income
(expense) 5,424 (213) 5,637 339
----- ---- ----- ---
Earnings before
interest and
income taxes 22,710 (6,125) 28,835 43,091
Interest expense 52,162 - 52,162 52,280
------ --- ------ ------
Income (loss)
before income
taxes (29,452) (6,125) (23,327) (9,189)
(Benefit from)
provision for
income taxes (7,756) - (7,756) 2,365
------ --- ------ -----
Net income (loss) $(21,696) $(6,125) $(15,571) $(11,554)
======== ======= ======== ========
Net income (loss)
per share:
Basic $(1.45) $(0.41) $(1.04) $(0.79)
====== ====== ====== ======
Diluted $(1.45) $(0.41) $(1.04) $(0.79)
====== ====== ====== ======
Weighted average
shares:
Outstanding 14,926 14,652
====== ======
Diluted 14,926 14,652
====== ======
Three Months Ended September 30, 2009
Pension Total
Settlement Restructuring Special
Special Charges Detail: Charge Charges Charges
----------------------- ------ ------- -------
Cost of sales $- $162 $162
SG&A 255 - 255
Special charges - 300 300
Other expense - 27 27
---- ---- ----
Total $255 $489 $744
==== ==== ====
Nine Months Ended September 30, 2009
Pension Total
Settlement Restructuring Special
Special Charges Detail: Charge Charges Charges
----------------------- ------ ------- -------
Cost of sales $- $1,983 $1,983
SG&A 2,955 - 2,955
Special charges - 974 974
Other expense - 213 213
------ ------ ------
Total $2,955 $3,170 $6,125
====== ====== ======
Restructuring charges are related to the closure of our Syracuse, New
York, manufacturing facility and our Mira Loma, California, distribution
center.
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 Net Income (Loss) to Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA)
(Dollars in thousands)
Three Months Nine Months Ended
Ended September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Reported net income (loss) $3,533 $(5,958) $(21,696) $(11,554)
Add:
Interest expense 17,451 17,509 52,162 52,280
(Benefit from) provision
for income taxes (432) 2,006 (7,756) 2,365
Depreciation and amortization 10,629 10,899 32,875 33,433
------ ------ ------ ------
EBITDA 31,181 24,456 55,585 76,524
Add:
Special Charges 744 - 6,125 -
Less: Depreciation expense
included in Special Charges
and also in Depreciation
and Amortization above - - (705) -
------- ------- ------- -------
Normalized EBITDA $31,925 $24,456 $61,005 $76,524
======= ======= ======= =======
Table 3
Reconciliation of Net Cash provided by (used in)
Operating Activities to Free Cash Flow
(Dollars in thousands)
Three Months Nine Months
Ended September 30, ended September 30,
2009 2008 2009 2008
---- ---- ---- ----
Net cash provided by (used
in) operating activities $26,639 $13,309 $65,729 $(9,750)
Capital expenditures (2,737) (12,390) (12,287) (30,002)
Proceeds from asset
sales and other 172 71 260 117
--- -- --- ---
Free Cash Flow $24,074 $990 $53,702 $(39,635)
======= ==== ======= ========
Table 4
Summary Business Segment information
(Dollars in thousands)
Three months ended Nine months ended
September 30, September 30,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Net Sales:
North American Glass $128,316 $143,630 $374,803 $426,120
North American Other 20,462 28,339 66,180 85,042
International 40,279 42,014 103,663 120,166
Eliminations (2,179) (2,447) (4,089) (7,688)
------ ------ ------ ------
Consolidated Net Sales $186,878 $211,536 $540,557 $623,640
======== ======== ======== ========
Normalized Earnings before
Interest & Taxes (EBIT):
North American Glass $16,956 $9,695 $22,763 $31,704
North American Other 3,335 2,130 8,352 9,590
International 1,005 1,732 (2,280) 1,797
----- ----- ------ -----
Consolidated Normalized EBIT $21,296 $13,557 $28,835 $43,091
======= ======= ======= =======
Normalized Depreciation &
Amortization: (1)
North American Glass $6,074 $6,627 $18,857 $19,605
North American Other 244 700 1,125 2,211
International 4,311 3,572 12,188 11,617
----- ----- ------ ------
Consolidated Normalized
Depreciation & Amortization $10,629 $10,899 $32,170 $33,433
======= ======= ======= =======
(1) Normalized Depreciation &
Amortization for YTD 2009
excludes $705 of depreciation
expense that is included in
Special Charges below.
Special Charges:
North American Glass $362 $- $3,036 $-
North American Other 382 - 3,089 -
International - - - -
--- --- --- ---
Consolidated Special Charges $744 $- $6,125 $-
==== == ====== ==
Reconciliation of Normalized
EBIT to Net Income (Loss):
Segment Normalized EBIT $21,296 $13,557 $28,835 $43,091
Special charges (744) - (6,125) -
Interest Expense (17,451) (17,509) (52,162) (52,280)
Income Taxes 432 (2,006) 7,756 (2,365)
--- ------ ----- ------
Net Income (Loss) $3,533 $(5,958) $(21,696) $(11,554)
====== ======= ======== ========
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.
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