Libbey announces first-quarter 2010 results

Libbey Inc. announced on 29 April 2010 first-quarter 2010 sales of USD 173.9 million, compared to USD 157.9 million in the first quarter of 2009, an increase of 10.2%. The US tableware manufacturer re…

Libbey Inc. announced on 29 April 2010 first-quarter 2010 sales of USD 173.9 million, compared to USD 157.9 million in the first quarter of 2009, an increase of 10.2%. The US tableware manufacturer reported net income of USD 55.4 million, or USD 2.76 per diluted share, for the first quarter ended 31 March 2010, compared to a net loss of USD 27.9 million, or USD 1.89 per diluted share, in the same quarter a year ago. Libbey had a net loss of USD 1.0 million, excluding special items of USD 56.4 million, and diluted loss per share of USD 0.05 for the first quarter of 2010, while first-quarter special items included a gain of USD 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 USD 13.4 million of unamortized fees and discounts on refinanced floating rate senior notes and ABL credit facility, and call premium payments. For the quarter-ended 31 March 2010, sales totalled USD 173.9 million, compared to USD 157.9 million for the same quarter of the previous year. North American Glass segment sales were USD 120.6 million, up 10.9%, compared to USD 108.7 million in the first quarter of 2009, which included a 32.2% increase in sales of Crisa products and a 12.8% increase in sales to US and Canadian retail customers, compared to the 2009 quarter. Sales to US and Canadian foodservice glassware customers decreased approximately 4.5%, in part due to the impact of severe winter weather in January and February. North American Other sales were USD 19.6 million, compared to USD 21.4 million in the 2009 quarter, as shipments of Syracuse China products were 33.4%, mainly 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 down 5.6% compared to the prior year, while sales to World Tableware customers increased 8.1%. International segment sales were up 25.7% to USD 36.3 million, compared to USD 28.9 million in the same quarter of 2009, led by a 56.2% increase in sales at Libbey China, a 23.4% increase in sales to Royal Leerdam customers and a 16.1% sales growth at Crisal in Portugal. Income from operations during the quarter was USD 10.8 million, compared to a loss of USD 12.1 million in the year-ago quarter. Income from operations, excluding special items, totalled USD 11.1 million in the first quarter of 2010, compared to a loss from operations of USD 7.3 million during the same quarter in 2009, due to higher sales and higher capacity utilization, partially offset by higher selling, general and administrative expenses. Earnings before interest and taxes (EBIT) were USD 66.9 million, compared to a loss before interest and taxes of USD 12.1 million in the same quarter of 2009, thanks to a result of the gain on the extinguishment of debt and the increase in income from operations discussed previously. EBIT, excluding special items, was USD 10.4 million in the first quarter of 2010, compared to a loss before interest and taxes of USD 7.1 million during the same quarter of 2009. Adjusted EBIT was USD 8.0 million for North American Glass, compared to a loss of USD 6.1 million in the prior-year quarter, while North American Other adjusted EBIT for the first quarter of 2010 was USD 3.5 million, versus USD 1.3 million in the same quarter of 2009. The International segment reported USD 1.1 million of adjusted loss before interest and taxes, compared to USD 2.3 million in the first quarter of 2009. Adjusted EBITDA for the first quarter was USD 20.8 million, compared to USD 3.9 million in the same quarter of 2009. Interest expense dropped USD 7.6 million to USD 9.6 million, compared to USD 17.2 million in the same period of 2009, caused by lower variable interest rates, lower debt levels and the impact of the debt refinancing completed in February 2010. Working capital as of 31 March 2010, defined as inventories and accounts receivable less accounts payable, was USD 187.0 million, compared to USD 167.6 million at December 31, 2009, and USD 193.1 million at 31 March 2009. Working capital as a percentage of net sales was 24.5% at 31 March 2010, compared to 24.7% at 31 March 2009. Adjusted free cash flow in the first quarter of 2010 was a use of USD 20.9 million, after adjusting for the payment of interest on the PIK notes, compared to USD 9.5 million in the first quarter of 2009. This was mainly due to increases in inventories and receivables and decreases in accounts payable and payment of incentive compensation during the first quarter of 2010. Libbey reported USD 51.2 million of available capacity under its Asset Backed Loan (ABL) credit facility as of 31 March 2010, with no loans currently outstanding, as well as cash on hand of USD 18.0 million at 31 March 2010. 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 USD 16.9 million improvement in Adjusted EBITDA, when compared to the prior year first quarter.” Libbey“s investors“ conference call, which was held on 29 April 2010, will be available for 30 days at the Investor Relations section of www.libbey.com.