Sales by tableware leader Libbey Inc. increased 33.1% to USD 179.5 million in the 1Q 2007 from USD 134.9 million in the prior year 1Q, the company said 24 April 2007. Libbey reported a net loss of USD…
Sales by tableware leader Libbey Inc. increased 33.1% to USD 179.5 million in the 1Q 2007 from USD 134.9 million in the prior year 1Q, the company said 24 April 2007. Libbey reported a net loss of USD 1.8 million, or USD 0.12 per share, for the 1Q ended 31 March 2007, compared to net income of USD 0.5 million, or USD 0.04 per share in the prior year quarter. For the quarter-ended 31 March 2007, sales rose 33.1% to USD 179.5 million from USD 134.9 million in the 1Q 2006. North American glass sales were up 47.4% to USD 124.7 million. The increase was attributable to the consolidation of the sales of Crisa, the company“s former joint venture in Mexico, a 30% rise in shipments to export customers outside of North America and an increase of more than 18% in shipments to retail glassware customers. In addition, North American Other sales were more than 2.3% higher, as shipments of World Tableware products were up over 14%. Shipments to Syracuse China customers were down around 7%. International sales rose 26.2% as the result of higher shipments to customers of Royal Leerdam and Crisal. On a pro-forma basis giving effect to the consolidation of Crisa as of 1 January 2006, sales were up 2.2% in total. The company reported income from operations of USD 10.4 million during the quarter, compared to USD 3.1 million for the 1Q 2006. Behind the rise and the higher operating margins were the consolidation of Crisa, higher sales and significantly higher production activity. Partially offsetting these improvements were higher natural gas costs and expenses related to the start up of Libbey“s new facility in China. Earnings before interest and tax (EBIT) increased to USD 12.2 million from USD 4.5 million in the 1Q 2006. EBIT increased by USD 10.3 million to USD 10.9 million for North American Glass as a result of the consolidation of the solid results from Crisa and significantly higher US operating activity. North American Other reported EBIT for the 1Q of 2007 of USD 3.8 million compared to a USD 0.5 million in the 1Q 2006 benefiting from higher sales of World Tableware products, a USD 1.1 million gain on the sale of excess land at Syracuse, New York and significantly higher production activity at Syracuse China. The International segment reported an EBIT loss of USD 2.5 million mainly related to expenses at Libbey China, lower production activity in Portugal and higher natural gas costs in Europe, compared to income of USD 3.4 million in the 1Q 2006. Libbey reported that earnings before interest, taxes, depreciation and amortization (EBITDA), were USD 21.4 million in the 1Q of 2007 compared to pro forma EBITDA of USD 22.2 million in the year-ago quarter. As a result of Libbey“s refinancing on 16 June 2006, which resulted in higher debt and higher average interest rates, interest expenses rose USD 12.0 million on the 1Q 2006. The effective tax rate increased to 47.5% for the quarter, from 33% in the year-ago quarter. The increase was driven by a USD 1.6 million credit awarded to Crisa in the 1Q 2007 related to new furnace technology. Libbey reported its net loss was USD 1.8 million, or USD 0.12 per diluted share, compared to diluted earnings per share of USD 0.04 in the 1Q 2006. As of 31 March 2007, working capital was USD 200.2 million, up USD 9.4 million from USD 190.8 million at 31 December 2006, due to seasonal working capital needs. Free cash flow was a use of USD 7.8 million compared to USD 16.6 million in the 1Q 2006. The main contributors were USD 11.6 million lower capital expenditures and proceeds from asset sales and other items of USD 2.1 million offset by higher working capital. Libbey had available capacity of USD 71.7 million under its Asset Based Loan (ABL) credit facility as of 31 March 2007 compared to USD 44.7 million at 31 December 2006. Commenting on the quarter, John F. Meier, chairman and chief executive officer, said “We are pleased with the strength of our North American Glass business performance. We experienced healthy increases in retail glassware, export and World Tableware shipments during the quarter. Sales to European glassware customers were also very strong. Crisa, our Mexican glass tableware operation, continued to contribute as planned during the consolidation of the facilities in Mexico, and we look forward to fully harvesting those savings later in 2007”. He added, “We expect 2Q sales to be in the range of USD 200 million to USD 205 million and EBITDA to be between USD 30 million and USD 31 million in the 2Q of 2007. This is expected to result in earnings per diluted share of between USD 0.11 and USD 0.16, using a tax rate of 30%”. Mr. Meier added, “As the result of a good 1Q, finishing on the high side of our EBITDA guidance, and given the strong sales performance, improving margins and our continued expectation for savings from our Crisa operations later in 2007, we are increasing our guidance for 2007 EBITDA to a range of USD 100 million to USD 108 million”. Libbey also confirmed that shipments from its new glass tableware facility in China started as scheduled in March 2007.