Libbey announces new ‘Own the Moment’ strategy and select, preliminary 4Q and FY 2014 results

Libbey’s new capital allocation plan includes a USD 0.11 per share quarterly dividend and a 50% increase to the company’s share repurchase authorization.

Libbey Inc., one of the largest glass tableware manufacturers in the world, unveiled its new ‘Own the Moment’ corporate strategy during its 2015 Investor Day in New York City.
Key Strategic Highlights & Goals:
Grow the business 4-6% annually to achieve a year-end 2018 revenue target in excess of USD 1 billion
Leverage volumes, create further supply chain efficiencies, and continue to improve productivity to achieve a 17-18% Adjusted EBITDA margin by the end of 2018
Initiation of a quarterly dividend of USD 0.11 per share
A 0.5 million share increase in the company’s stock repurchase plan, resulting in a total authorization of 1.5 million shares
Fourth quarter fiscal 2014 results are estimated to include nearly USD 232 million in sales, an approximate 4.9% year-over-year increase; Adjusted EBITDA is expected to range between USD 29 and USD 31 million
Full-year 2014 sales are estimated to be approximately USD 853.0 million, an increase of over 4% compared to sales of USD 818.8 million in 2013; Adjusted EBITDA is expected to be between USD 121.8 and USD 123.8 million
Stephanie Streeter, chief executive officer, commented, “Our competitive and financial position has never been stronger. Now is the time to be bold, and our Own the Moment strategy will allow us to navigate a fairly dynamic global marketplace and pivot to growth through 2018. Our leadership position in the Americas, anchored by our robust foodservice business and our low-cost capacity and leadership in Mexico, provides the cornerstone for our strategy. We will focus on leveraging our strengths to drive above market growth and to expand our margins. We will also make strategic and opportunistic investments to bolster and expand our leadership positions around the globe. Lastly, our Own the Moment strategy has been founded with a clear sense of purpose regarding future capital allocation. Our new dividend policy and increased authorization under our share repurchase program underline our commitment to returning value to shareholders and reflect our continued confidence in the long-term strength of our business.”
Libbey’s Board of Directors announced that it has approved a quarterly dividend of USD 0.11 per share. The dividend will be paid on 3 March 2015, to shareholders of record as of 3 February 2015. As of 20 January 2015, Libbey had 21,765,048 shares outstanding.
In addition, the company’s Board also increased the number of shares of common stock that the company can repurchase by half a million shares, which may be purchased in open market or through private transactions at the company’s discretion. This announcement supplements the company’s prior one million share authorization that was reaffirmed in mid-December 2014, and thus expands that authorization from 1.0 million to 1.5 million shares. There is no expiration date on these authorizations.
In addition to announcing its new corporate strategy and capital allocation plans, the company also announced preliminary results for its fourth quarter and full year ended 31 December 2014. Sales are expected to be nearly USD 232 million, which will result in an approximate 4.9% year-over-year increase on the top-line. This will be the company’s third quarter in a row with mid-single digit or higher year-over-year top-line growth. For the full year 2014, sales are estimated to be approximately USD 853 million, which would represent an increase of over 4.0% compared to 2013.
Adjusted EBITDA for the fourth quarter of 2014 is expected to range between USD 29 and USD 31 million, which compares to a record high USD 37.6 million in the prior-year fourth quarter. While the company continued to see positive impacts from its North American capacity realignment and from productivity gains, Adjusted EBITDA results were negatively impacted by the previously announced costs associated with an earlier than planned furnace repair, strategic growth initiatives, negative sales mix, higher than expected currency impact from a weaker peso and a weaker euro, and unplanned non-income tax assessments. For the full year 2014, adjusted EBITDA is now expected to be in the range of USD 121.8 million to USD 123.8 million.
Libbey expects to report that it had available capacity of approximately USD 82 million under its ABL credit facility as of 31 December 2014, with no loans outstanding. The company also had cash on hand of approximately USD 60 million at 31 December 2014, including in excess of USD 26 million in the US. It is expected that working capital as a per cent of sales will be approximately 20.9% at 31 December 2104.
Based in Toledo, Ohio, Libbey Inc. is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the US, Mexico, China, Portugal and the Netherlands. In existence since 1888, the company supplies tabletop products to retail, foodservice and B2B customers in over 100 countries.