Libbey Inc.: solid sales growth in first 9 months of 2008

Libbey Inc. saw solid sales growth for the 3Q and first nine months of 2008, fueled by strong gains in international sales, the glass tableware leader announced 30 October 2008.
John F. Meier, chairm…

Libbey Inc. saw solid sales growth for the 3Q and first nine months of 2008, fueled by strong gains in international sales, the glass tableware leader announced 30 October 2008. John F. Meier, chairman and chief executive officer, said, “While we are certainly not satisfied with our performance in the 3Q, we are proud of what we accomplished despite the state of the global economic markets. We remain convinced that these results are a strong indication of the health of our business and the strength of our brands”. For the quarter ended 30 September 2008, sales increased 4.5% to USD 211.5 million from USD 202.4 million in the year-ago quarter. The increase included a 17.4% rise in International sales, as sales to Crisal and Royal Leerdam glassware customers rose 15.5% and 4.1%, respectively. Excluding the currency impact, International sales rose 10.4%. In addition, North American Glass sales were up 1.9%, benefiting from a more than 6.0% increase in shipments to US and Canadian retail glassware customers. Shipments of Crisa glassware were up 2.7%, while sales to foodservice glassware customers were down 1.7%. North American Other sales fell 3.6%, as a 10.9% decrease in shipments of World Tableware products more than offset the single-digit sales growth of Syracuse China and Traex products. Income from operations was USD 14.6 million during the quarter, compared to USD 14.7 million in the 3Q 2007. Higher sales and lower selling, general and administrative costs were offset by higher natural gas and distribution costs. Earnings before interest and taxes (EBIT) were USD 13.6 million, compared to USD 16.2 million in the year-ago quarter. EBIT was USD 9.7 million for North American Glass, compared to USD 11.3 million in the 3Q 2007, as a result of an unfavorable swing in non-cash foreign currency translation losses versus the prior-year quarter of approximately USD 2.7 million, lower output in Mexico due to a scheduled furnace rebuild, lower output in the US, operations to control inventories and higher natural gas costs. North American Other reported EBIT of USD 2.1 million for the 3Q 2008, compared with USD 3.2 million in the 3Q 2007. The decrease was primarily a result of the lower sales of World Tableware products. The International segment reported EBIT of USD 1.7 million, consistent with the year-ago quarter. This can primarily be attributed to higher International sales offset by higher natural gas and other costs in Europe. Libbey reported that EBITDA was USD 24.5 million in the 3Q 2008, compared to USD 28.0 million in the year- ago quarter. For the nine months ended 30 September 2008, sales increased 5.9% to USD 623.6 million from USD 589.0 million in the year-ago period. International sales increased 22.9% as a result of significantly increased shipments to customers of Libbey China and favorable currency impact on European sales. Excluding the currency impact, International sales increased 9.4%. In addition, North American Glass sales rose 3.3%, benefiting from a more than 9.0% rise in shipments to US and Canadian retail glassware customers. Shipments of Crisa glassware were up 8.1% and sales to foodservice glassware customers were down 4.9%. North American Other sales decreased 2.6 %, primarily as the result of lower sales of Syracuse China products. Libbey reported income from operations of USD 42.8 million during the first nine months of 2008, compared to USD 45.6 million during the year-ago period. EBIT was USD 43.1 million, compared to USD 49.6 million in the first nine months of 2007. For North American Glass, EBIT was USD 31.7 million, compared with USD 38.8 million in the first nine months of 2007. North American Other reported EBIT of USD 9.6 million for the first nine months of 2008, compared with USD 11.3 million in the year-ago period. The International segment reported EBIT of USD 1.8 million, compared with an EBIT loss of USD 0.5 million in the first nine months of 2007. For the first nine months of 2008, EBITDA was USD 76.5 million, compared with EBITDA of USD 81.3 million for the first nine months of 2007. “As we announced on 16 October 2008, based on the expected continuing weaknesses in the Mexican peso, consumer confidence and the foodservice channel, we expect 4Q 2008 sales in the range of USD 210.0 million to USD 220.0 million and EBITDA between USD 20.5 million to USD 23.5 million”, John F. Meier said. “Based on this 4Q outlook, we expect full-year 2008 sales in the range of USD 833.0 million to USD 843.0 million and EBITDA in the range of USD 97.0 million to USD 100.0 million”. Mr. Meier continued, “While we are still in the process of completing the 2009 budget, we have identified USD 20 to USD 23 million of cash flow enhancements that we expect to achieve in 2009. These include a number of cost reduction initiatives, led by capital expenditure reductions”.