Libbey Inc. Announces First Quarter 2015 Financial Results

TOLEDO, Ohio, April 30, 2015 /PRNewswire/ -- Libbey Inc. (NYSE MKT: LBY), one of the largest glass tableware manufacturers in the world, today reported results for the first quarter-ended March 31, 2015.

First Quarter Financial Highlights

• Net sales for the first quarter were $187.4 million, compared to $181.6 million for the first quarter of 2014, an increase of 3.2 percent (8.4 percent excluding currency fluctuation).
• Net income for the first quarter was $3.1 million, compared to a net loss of $3.4 million in the prior-year first quarter.  Adjusted net income (see Table 1) for the first quarter was $3.6 million, compared to the $2.5 million adjusted net income recorded in the first quarter of 2014.
• Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (see Table 2) for the quarter were $19.7 million, compared to $20.0 million in the prior-year quarter.
• In the first quarter of 2015, Libbey repurchased 259,405 shares at an average price of $35.25 and paid its first quarterly dividend since 2008. The $0.11 per share dividend represents the largest dividend paid in Company history.
• The Company reiterates expectations to generate sales growth of approximately 5 to 6 percent on a constant currency basis, and Adjusted EBITDA margins of approximately 15 percent in fiscal year 2015, as the Company executes its growth strategy while investing in its commercial brands and capabilities.

"The trends observed in our business during the first quarter were in line with our expectations and give us confidence that we will continue to have success executing against our Own the Moment strategy in fiscal year 2015," said Stephanie A. Streeter, chief executive officer of Libbey Inc. "We believe that the competitive environment is beginning to show signs of stability and are very pleased that the combined strength of Libbey's brands and balance sheet has positioned us to continue to expand market share. While much progress has been made, we remain aggressively focused on our efforts to strengthen the Company by continuing to make smart investments in people, products, and processes for the future."

First Quarter Segment Sales and Operational Review

• Net sales in the Americas segment were $128.4 million, compared to $121.9 million in the first quarter of 2014, an increase of 5.3 percent (8.2 percent excluding currency impact).  Key drivers of the increase in net sales were a 4.4 percent increase in net sales in the foodservice channel, an increase of 4.4 percent in retail and a 7.3 percent increase in the business-to-business channel.
• Net sales in the EMEA segment decreased 17.1 percent (a decrease of 0.3 percent excluding currency impact) to $28.5 million, compared to $34.4 million in the first quarter of 2014.
• Net sales in the U.S. Sourcing segment were $21.4 million in the first quarter of 2015, compared to $17.7 million in the prior-year quarter, an increase of 20.7 percent.
• Net sales in Other were $9.1 million in the first quarter of 2015, compared to $7.5 million in the comparable period last year, reflecting a 20.7 percent increase in sales (22.7 percent excluding currency impact) in the Asia Pacific region.
• Interest expense was $4.5 million, a decrease of $3.2 million, compared to $7.7 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.
• The Company's effective tax rate was 29.3 percent for the quarter-ended March 31, 2015, compared to 25.8 percent for the quarter-ended March 31, 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 and other activity in jurisdictions with recorded valuation allowances.

Balance Sheet and Liquidity

• Libbey reported that it had available capacity of $79.6 million under its ABL credit facility as of March 31, 2015, with $4.1 million of loans currently outstanding.  The Company also had cash on hand of $18.6 million at March 31, 2015.
• As of March 31, 2015, working capital, defined as inventories and accounts receivable less accounts payable, was $198.9 million, compared to $187.1 million at March 31, 2014 (see Table 4).  Working capital increased $11.8 million, compared to March 31, 2014. The increase compared to March 31, 2014 was primarily a result of higher inventories and accounts receivable, partially offset by higher accounts payable.

Sherry Buck, chief financial officer, concluded: "Planned capital expenditures and investments in the business designed to drive growth impacted free cash flow performance during the quarter.  However, we continue to expect strong free cash flow performance for full-year 2015, driven in part by price increases across our foodservice businesses that were implemented in late March and early April.  We also remain committed to having a balanced approach to capital allocation and are proud we paid our first quarterly dividend since 2008.  Lastly, we have repurchased over 294,000 shares of stock at an average purchase price of approximately $34.66 as of March 31, 2015, with 1.2 million shares remaining under our current repurchase authorization. The Company continues to expect that it will repurchase all remaining authorized shares by year-end 2017."

Webcast Information

Libbey will hold a conference call for investors on Thursday, April 30, 2015, 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 14 days after the conclusion of the call.

About Libbey Inc.

Based in Toledo, Ohio, since 1888, we believe Libbey Inc. is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world. It supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries, and it is the leading manufacturer of tabletop products for the U.S. foodservice industry.

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 a leading producer of glass tableware in Mexico and Latin America.  Its 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 hollowware and an assortment of ceramic dinnerware and other tabletop items, principally for foodservice establishments in the United States.  In 2014, Libbey Inc.'s net sales totaled $852.5 million.

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.

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

SOURCE Libbey Inc.

Related Links

http://www.libbey.com