Libbey Inc. of the United States reported increased sales, operating income and net income for the second quarter ended 30 June 1997, compared with the same period last year. Sales increased 0.1% to U…
Libbey Inc. of the United States reported increased sales, operating income and net income for the second quarter ended 30 June 1997, compared with the same period last year. Sales increased 0.1% to US$ 104 million from US$ 103.8 million a year earlier. Income from operations grew to US$ 20 million, up 10.4% from US$ 18.2 million in last year“s corresponding quarter. Net income increased 16.4% to US$ 10.1 million, or US$ 0.65 per share, from US$ 8.7 million, or US$ 0.56 per share, in the year-ago quarter. The increase in earnings per share was slightly above analysts“ mean estimate of US$ 0.64 per share. Operating profit as a percentage of sales for the quarter was 19.3% as compared with the year-ago quarter“s margin of 17.5%. Improved sales mix and manufacturing efficiencies in the company“s glass tableware business were major contributors to the increase. Net income as a percentage of sales increased to 9.7% from 8.4%, principally due to higher operating profit margins and lower interest expense as a percentage of sales. For the six months ended 30 June, sales declined 2.9% to US$ 182.4 million from US$ 187.8 million in the same period last year. Income from operations increased 10.2%, to US$ 30.9 million from US$ 28.1 million in the first six months of 1996. Net income grew by 16.9% to US$ 14.8 million from US$ 12.6 million a year ago. What affected the drop in sales in the first six months was a more selective selling effort aimed at reducing low or negative profit margin orders, mainly in the retail and industrial areas. In addition, certain export premium business from 1996 did not repeat. Operating profit as a percentage of sales for the six months ended 30 June was 17% as compared with 14.9% in the corresponding period last year. Net income as a percentage of sales was 8.1% as compared with 6.7% last year. This was due to a higher profit margin from operations and a reduction in interest as a percent of sales. John F. Meier, the Libbey Chairman and CEO, said that the company“s financial position has improved. He commented: “We continue to benefit from a shift in sales to higher-margin product and improved operating efficiencies. Our manufacturing facilities are achieving improved yields, an indicator of the benefits of our recent re-engineering initiative.” He continued, “While our sales were essentially flat with the prior year period, last year benefited from unusual core demand and select one-time orders. Meeting last year“s sales in the face of a more selective selling effort this year, is a solid result. Our important core food service distributor area showed improving trends as we progressed through the quarter and sales of Syracuse China products continued to grow. We are targeting improving year-to-year trends in sales as we continue in 1997.” On 18 August , Libbey announced that it signed definitive agreements with Mexico“s Vitro S.A., to become a joint venture partner in Vitro“s glass tableware business and acquire the Mexican company“s WorldCrisa subsidiary. Libbey should thus become a 49% equity holder in Vitrocrisa. Reciprocal distribution agreements will be established, whereby Libbey becomes the distributor of Vitrocrisa glass tableware products in the United States and Canada, and Vitrocrisa becomes the distributor of Libbey products in Mexico, Central and South America. WorldCrisa will be renamed World Tableware. The cash purchase price for these transactions, which are expected to close in the near future, is approximately US$ 100 million.