Libbey announces record second quarter 2013 financial results

Ongoing progress on Libbey 2015 strategic plan results in best second quarter gross profit margin since 2001; results also include record adjusted income from operations and adjusted EBITDA.

Libbey Inc. has reported results for the second quarter-ended 30 June 2013 as follows.
Sales for the second quarter were USD 209.9 million, compared to USD 209.2 million for the second quarter of 2012, an increase of 0.3% (a decrease of 1.1% excluding currency fluctuation).
Net income grew to USD 12.4 million from a loss of USD 10.1 million in the second quarter of 2012.
Adjusted income from operations grew 8.6%, to USD 31.5 million from USD 29.0 million in the year-ago quarter, increasing to an all-time record for any quarter in company history.
Adjusted EBITDA increased 5.8% to an all-time record for the company of USD 42.0 million, compared to USD 39.7 million for the second quarter of 2012.
“While lower sales in the high volume retail and business-to-business channels of distribution in the US and Canada contributed to overall flat sales for the quarter, we are very encouraged by sales increases in our other end markets, including EMEA, Asia Pacific and Mexico and Latin America. The key component of our story, however, is our continued success in cost reductions, which resulted in record adjusted income from operations and adjusted EBITDA. This performance is even more notable, given that we had a significant amount of underutilized capacity throughout the Americas during the quarter related to the planned realignment of our production,” said Stephanie A. Streeter, chief executive officer of Libbey.
“With six consecutive quarters of year-over-year improvement, we have demonstrated success in improving our cost structure, making productivity improvements, leveraging our advantaged businesses and strengthening our balance sheet. While capacity utilization will have an even greater impact during the third quarter as we continue to make progress in realigning our production in the Americas, we expect to see continued improvement in adjusted EBITDA and margins for the full-year 2013 as capacity utilization improves in the fourth quarter.”
“Sales in the Americas segment were USD 141.8 million, compared to USD 148.6 million in the second quarter of 2012, a decrease of 4.6% (6.1% excluding currency fluctuation). Sales performance was led by a 3.5% increase in sales within our Mexican and Latin American end market (a decrease of 1.7% excluding currency impact) and a 1.8% increase in our US and Canada foodservice glassware channel. However, even with the improvement in foodservice sales, overall sales within our US and Canada end market were lower by 7.8%.”
“Sales in the EMEA segment increased 12.6% (10.9% excluding currency impact) to USD 38.0 million, compared to USD 33.7 million in the second quarter of 2012.
Sales in Other were USD 30.1 million, compared to USD 26.9 million in the prior-year quarter. This increase was largely the result of a 13.4% increase in sales to Syracuse China and World Tableware customers, as well as an 8.1% increase in sales (6.3% excluding currency impact) in the Asia Pacific end market.
Interest expense decreased by USD 1.8 million to USD 8.1 million, compared to USD 9.9 million in the year-ago period, primarily driven by lower interest rates.
Our effective tax rate was an expense of 28.2% for the quarter-ended 30 June 2013, compared to a benefit of 12.8% for the quarter-ended 30 June 2012. The effective tax rate was influenced by jurisdictions with recorded valuation allowances and changes in the mix of earnings with differing statutory rates.”
“Sales for the first six months of 2013 were USD 393.4 million, compared to USD 397.1 million for the first half of 2012, a decrease of 0.9% (or 1.9% excluding currency fluctuation).
Net income for the first six months of 2013 grew to USD 14.4 million, compared to a net loss of USD 9.5 million during the first half of 2012.
Adjusted EBITDA increased 5.6% to USD 68.2 million, compared to USD 64.6 million for the first half of 2012. ”
“Sales in the Americas segment were USD 265.4 million, compared to USD 278.3 million in the first six months of 2012, a decrease of 4.6% (5.7% excluding currency fluctuation). Sales performance was led by a 4.0% increase in sales within our Mexican and Latin American end market (0.5% excluding currency impact), offset by an 8.1% decrease within our US and Canada end market.
Sales in the EMEA segment increased 11.9% (10.7% excluding currency impact) to USD 72.2 million, compared to USD 64.5 million in the first half of 2012.
Sales in Other were USD 55.8 million, compared to USD 54.3 million in the prior-year period. This increase was largely the result of a 9.8% increase in sales to Syracuse China and World Tableware customers, offset by a 10.2% decrease in sales (11.1% excluding currency impact) in the Asia Pacific end market.
Interest expense decreased by USD 3.8 million to USD 16.6 million, compared to USD 20.4 million in the year-ago period, primarily driven by lower interest rates.
Our effective tax rate was 27.8% for the six months ended 30 June 2013, compared to 23.3% for the six months ended 30 June 2012. The effective tax rate was influenced by jurisdictions with recorded valuation allowances and changes in the mix of earnings with differing statutory rates. ”
Libbey repaid USD 45.0 million of its senior notes in May 2013 and realized a net reduction in debt outstanding of over USD 35.0 million during the quarter.
Libbey reported that it had available capacity of USD 68.8 million under its ABL credit facility as of 30 June 2013, with USD 9.8 million in loans currently outstanding. The Company also had cash on hand of USD 10.5 million at 30 June 2013.
As of 30 June 2013, working capital, defined as inventories and accounts receivable less accounts payable, was USD 208.1 million, compared to USD 200.6 million at 30 June 2012. This increase in working capital resulted from higher inventories and receivables, partially offset by higher accounts payable.
Sherry Buck, chief financial officer, added, “This quarter, the sixth consecutive quarter of margin and adjusted EBITDA improvement, represents continued progress on the journey to execute our Libbey 2015 strategy. The first six-month results, including our May 2013 repayment of USD 45 million of our senior notes, keep us solidly on track to further reduce costs, strengthen our balance sheet, meet the objectives laid out in our plan and position Libbey’s global business for long-term success.”