Libbey Inc. Announces Record Third Quarter Net Sales And Continued Strong Revenue And Profitability Growth

11/04/2014

Third quarter sales increased 5.7 percent, compared to the third quarter of 2013, and were the highest third quarter sales in Company history; Company expects similar top-line growth for the fourth quarter

TOLEDO, Ohio, Nov. 4, 2014 /PRNewswire/ -- Libbey Inc.(NYSE MKT: LBY) today reported results for the third quarter-ended September 30, 2014.

Third Quarter Financial Highlights

  • Sales for the third quarter were $216.0 million, compared to $204.4 million for the third quarter of 2013, an increase of 5.7 percent (5.8 percent excluding currency fluctuation).
  • Net income for the third quarter was $13.8 million, compared to $4.7 million in the prior-year third quarter.  Adjusted net income (see Table 1) for the third quarter of $13.8 million was nearly double the $7.4 million adjusted net income recorded in the third quarter of 2013.
  • Income from operations for the third quarter was $20.7 million, compared to $14.0 million for the third quarter of 2013.  Adjusted income from operations (see Table 1) for the third quarter of $20.7 million was an improvement of 18.0 percent, compared to $17.6 million in the third quarter of 2013.
  • Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (see Table 3) for the quarter was $31.7 million, compared to $28.7 million in the prior-year quarter.
  • Interest expense of $4.8 million was $2.9 million lower, compared to $7.7 million in the prior-year quarter.

"Sales growth was strong throughout the Company, as revenue increased in every segment and every channel of distribution.  Revenues continued to be strong in the Americas where we achieved 5.6 percent revenue growth.  For the second consecutive quarter, we were able to defend and grow our market share in an extremely competitive market.  While our adjusted EBITDA margins were significantly impacted by reduced production activity related to an earlier-than-planned rebuild of a furnace, higher input costs and competitive market actions, we are pleased with our overall Company sales growth of 5.7 percent during the quarter.  We look forward to continuing our strong sales performance in the remainder of the year, as we leverage the investments we have made in new products, sales and marketing capabilities. For the fourth quarter, we expect to deliver sales growth and adjusted EBITDA margins similar to the third quarter of 2014," said Stephanie A. Streeter, chief executive officer of Libbey Inc.

Third Quarter Segment Sales and Operational Review

  • Sales in the Americas segment were $149.4 million, compared to $141.4 million in the third quarter of 2013, an increase of 5.6 percent (5.9 percent excluding currency impact). This was comprised of 7.3 percent higher sales in our foodservice channel, an increase of 4.5 percent in retail and a 5.7 percent increase in the business-to-business channel.
  • Sales in the EMEA segment increased 6.2 percent (6.0 percent excluding currency impact) to $37.7 million, compared to $35.5 million in the third quarter of 2013.
  • Sales in U.S. Sourcing were $20.6 million in the third quarter of 2014, compared to $19.9 million in the prior-year quarter, as sales of World Tableware and Syracuse China flatware and dinnerware increased 3.6 percent.
  • Sales in Other were $8.3 million, compared to $7.6 million in the prior-year quarter, resulting from a 9.1 percent increase in sales (also 9.1 percent excluding currency impact) in the Asia Pacific region.
  • Adjusted EBITDA of $31.7 million (see Table 3) was $3.0 million higher than the $28.7 million reported in the prior-year quarter. The primary factors contributing to the improvement in adjusted EBITDA from the prior-year quarter include higher sales and the realization of savings of approximately $4.6 million from the recently completed North American capacity realignment, partially offset by the nearly $3.0 million impact of lower production activity related to an earlier-than-planned furnace repair, higher input costs for natural gas, packaging and electricity of $1.2 million, nearly $2.0 million in increased freight costs, as well as increased selling and marketing expenses.
  • Interest expense was $4.8 million, a decrease of $2.9 million, compared to $7.7 million in the year-ago period, primarily driven by lower interest rates, as a result of the refinancing completed during the second quarter of 2014.
  • Our effective tax rate was 20.4 percent for the quarter-ended September 30, 2014, compared to 15.0 percent for the quarter-ended September 30, 2013. The effective rate in both years was generally influenced by foreign earnings with differing statutory rates, foreign withholding tax, accruals related to uncertain tax positions, intra-period tax allocation and other activity in jurisdictions with recorded valuation allowances.

Nine-Month Financial Highlights

  • Sales for the first nine months of 2014 were $621.1 million, compared to $597.8 million for the first nine months of 2013, an increase of 3.9 percent (or 3.8 percent excluding currency fluctuation).
  • Income from operations for the first nine months of 2014 was $53.7 million, compared to $53.4 million during the first nine months of 2013.
  • Adjusted EBITDA (see Table 3) was $92.8 million for the first nine months of 2014, compared to $96.8 million for the first nine months of 2013.

Nine-Month Segment Sales and Operational Review

  • Sales in the Americas segment were $425.7 million, compared to $406.7 million in the first nine months of 2013, an increase of 4.7 percent (5.4 percent excluding currency fluctuation) driven by increases in all channels of distribution.
  • Sales in the EMEA segment increased 3.4 percent (0.6 percent excluding currency impact) to $111.4 million, compared to $107.7 million in the first nine months of 2013.
  • Sales in the U.S. Sourcing segment increased 2.0 percent to $59.7 million, compared to $58.5 million in the first nine months of 2013.
  • Sales in Other were $24.2 million, compared to $24.8 million in the prior-year period. This decrease was the result of a 2.2 percent decrease in sales (3.1 percent excluding currency impact) in the Asia Pacific region.
  • Interest expense was $18.0 million, a decrease of $6.3 million, compared to $24.3 million in the year-ago period, primarily driven by lower interest rates.
  • Our effective tax rate was (46.6) percent for the nine months ended September 30, 2014, compared to 25.0 percent for the nine months ended September 30, 2013. The effective tax rate was generally influenced by foreign earnings with differing statutory rates, foreign withholding tax, accruals related to uncertain tax positions, intra-period tax allocation and other activity in jurisdictions with recorded valuation allowances.

Balance Sheet and Liquidity

  • Libbey reported that it had available capacity of $83.1 million under its ABL credit facility as of September 30, 2014, with $8.9 million in loans currently outstanding. The Company also had cash on hand of $24.1 million at September 30, 2014.
  • As of September 30, 2014, working capital, defined as inventories and accounts receivable less accounts payable, was $216.8 million, compared to $204.2 million at September 30, 2013. Working capital increased $12.6 million, compared to the prior year, as the result of higher inventories and increased accounts receivable which were only partially offset by higher accounts payable.

Sherry Buck, chief financial officer, added: "We would expect to generate a significant amount of free cash flow during the fourth quarter as a result of working capital reductions of at least $25 million and receipt of approximately $10 million in insurance proceeds related to a claim for a furnace malfunction in 2013.  Additionally, we will continue to realize lower interest expense during the fourth quarter, similar to the $2.9 million reduction we saw in the third quarter."

Webcast Information

Libbey will hold a conference call for investors on Tuesday, November 4, 2014, at 11 a.m. Eastern Standard Time.  The conference call will be simulcast live on the Internet and is accessible from the Investor Relations' section of www.libbey.com. To listen to the call, please go to the website at least 10 minutes early to register, download and install any necessary software.  A replay will be available for 14 days after the conclusion of the call.

About Libbey Inc.

Based in Toledo, Ohio, since 1888, we believe Libbey Inc. is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world. It supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries, and it is the leading manufacturer of tabletop products for the U.S. foodservice industry.

Libbey operates glass tableware manufacturing plants in the United States in Louisiana and Ohio as well as in Mexico, China, Portugal and the Netherlands.  Its Crisa subsidiary, located in Monterrey, Mexico, is a leading producer of glass tableware in Mexico and Latin America.  Its subsidiary located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients.  Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe.  Its Syracuse China subsidiary designs and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments in the United States.  Its World Tableware subsidiary imports and sells a full line of metal flatware and hollowware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States.  In 2013, Libbey Inc.'s net sales totaled $818.8 million.

This press release includes forward-looking statements as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements reflect only the Company's best assessment at this time and are indicated by words or phrases such as "goal," "expects," " believes," "will," "estimates," "anticipates," or similar phrases.  Investors are cautioned that forward-looking statements involve risks and uncertainty and that actual results may differ materially from these statements, and that investors should not place undue reliance on such statements.  These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's report on Form 10-K filed with the Commission on March 12, 2014.  Important factors potentially affecting performance include but are not limited to risks related to our ability to borrow under our ABL credit agreement; increased competition from foreign suppliers endeavoring to sell glass tableware in the United States and Mexico; the impact of lower duties for imported products; global economic conditions and the related impact on consumer spending levels; major slowdowns in the retail, travel or entertainment industries in the United States, Canada, Mexico, Western Europe and Asia, caused by terrorist attacks or otherwise; significant increases in per-unit costs for natural gas, electricity, freight, corrugated packaging, and other purchased materials; high levels of indebtedness; high interest rates that increase the Company's borrowing costs or volatility in the financial markets that could constrain liquidity and credit availability; protracted work stoppages related to collective bargaining agreements; increases in expense associated with higher medical costs, increased pension expense associated with lower returns on pension investments and increased pension obligations; devaluations and other major currency fluctuations relative to the U.S. dollar and the Euro that could reduce the cost competitiveness of the Company's products compared to foreign competition; the effect of high inflation in Mexico and exchange rate changes to the value of the Mexican peso and the earnings and cash flow of Libbey Mexico, expressed under U.S. GAAP; the inability to achieve savings and profit improvements at targeted levels in the Company's operations or within the intended time periods; and whether the Company completes any significant acquisition and whether such acquisitions can operate profitably.  Any forward-looking statements speak only as of the date of this press release, and the Company assumes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release.

Libbey Inc.

Condensed Consolidated Statements of Operations

(dollars in thousands, except per-share amounts)

(unaudited)




Three months ended September 30,


2014



2013








Net sales

$

215,957



$

204,386


Freight billed to customers

931



924


Total revenues

216,888



205,310


Cost of sales (1)

166,573



165,405


Gross profit

50,315



39,905


Selling, general and administrative expenses (1)

29,573



25,519


Special charges (1)



390


Income from operations

20,742



13,996


Other income (expense)

1,340



(706)


Earnings before interest and income taxes

22,082



13,290


Interest expense

4,797



7,706


Income before income taxes

17,285



5,584


Provision for income taxes (1)

3,527



835


Net income

$

13,758



$

4,749








Net income per share:






Basic

$

0.63



$

0.22


Diluted

$

0.62



$

0.21








Weighted average shares:






Outstanding

21,800



21,493


Diluted

22,240



22,223


(1) Refer to Table 1 for Special Items detail.

 

Libbey Inc.

Condensed Consolidated Statements of Operations

(dollars in thousands, except per-share amounts)

(unaudited)




Nine months ended September 30,


2014



2013








Net sales

$

621,074



$

597,766


Freight billed to customers

2,638



2,447


Total revenues

623,712



600,213


Cost of sales (1)

480,791



460,614


Gross profit

142,921



139,599


Selling, general and administrative expenses (1)

89,177



81,551


Special charges (1)



4,619


Income from operations

53,744



53,429


Loss on redemption of debt (1)

(47,191)



(2,518)


Other income (expense)

1,340



(1,090)


Earnings before interest and income taxes

7,893



49,821


Interest expense

17,984



24,267


(Loss) income before income taxes

(10,091)



25,554


Provision for income taxes (1)

4,703



6,380


Net (loss) income

$

(14,794)



$

19,174








Net (loss) income per share:






Basic

$

(0.68)



$

0.90


Diluted

$

(0.68)



$

0.87








Weighted average shares:






Outstanding

21,667



21,300


Diluted

21,667



21,929


(1) Refer to Table 2 for Special Items detail.

 

 

Libbey Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)




September 30, 2014


December 31, 2013


(unaudited)




ASSETS:






Cash and cash equivalents

$

24,089



$

42,208


Accounts receivable — net

106,459



94,549


Inventories — net

189,221



163,121


Other current assets

33,168



24,838


Total current assets

352,937



324,716








Pension asset

34,364



33,615


Goodwill and purchased intangibles — net

185,573



186,704


Property, plant and equipment — net

268,830



265,662


Other assets

16,234



19,293


Total assets

$

857,938



$

829,990








LIABILITIES AND SHAREHOLDERS' EQUITY:






Accounts payable

$

78,895



$

79,620


Accrued liabilities

79,719



73,821


Pension liability (current portion)

3,100



3,161


Non-pension postretirement benefits (current portion)

4,758



4,758


Other current liabilities



1,374


Long-term debt due within one year

7,896



5,391


Total current liabilities

174,368



168,125








Long-term debt

446,653



406,512


Pension liability

37,861



40,033


Non-pension postretirement benefits

58,137



59,065


Other liabilities

23,526



25,446


Total liabilities

740,545



699,181








Common stock and capital in excess of par value

329,418



323,580


Retained deficit

(134,405)



(119,611)


Accumulated other comprehensive loss

(77,620)



(73,160)


Total shareholders' equity

117,393



130,809


Total liabilities and shareholders' equity

$

857,938



$

829,990


 

Libbey Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)




Three months ended September 30,


2014



2013








Operating activities:






Net income

$

13,758



$

4,749


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation and amortization

9,569



11,773


Loss on asset sales and disposals

234



481


Change in accounts receivable

(1,926)



732


Change in inventories

(9,460)



3,722


Change in accounts payable

767



318


Accrued interest and amortization of discounts and finance fees

384



7,266


Pension & non-pension postretirement benefits

(349)



3,118


Restructuring



(797)


Accrued liabilities & prepaid expenses

4,105



3,533


Income taxes

1,498



(2,106)


Share-based compensation expense

1,109



990


Other operating activities

(616)



988


Net cash provided by operating activities

19,073



34,767








Investing activities:






Additions to property, plant and equipment

(16,693)



(10,381)


Proceeds from asset sales and other

3



73


Net cash used in investing activities

(16,690)



(10,308)








Financing activities:






Borrowings on ABL credit facility

33,400



12,400


Repayments on ABL credit facility

(31,500)



(22,200)


Other repayments

(5,201)



(4,397)


Other borrowings

3,250



6,094


Repayments on Term Loan B

(1,100)




Stock options exercised

759



2,059


Debt issuance costs and other

(91)




Net cash used in financing activities

(483)



(6,044)








Effect of exchange rate fluctuations on cash

(1,020)



507


Increase in cash

880



18,922








Cash & cash equivalents at beginning of period

23,209



10,544


Cash & cash equivalents at end of period

$

24,089



$

29,466


 

 

Libbey Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)




Nine months ended September 30,


2014



2013








Operating activities:






Net (loss) income

$

(14,794)



$

19,174


Adjustments to reconcile net (loss) income to net cash provided by operating activities:






Depreciation and amortization

30,837



34,170


Loss on asset sales and disposals

247



514


Change in accounts receivable

(18,325)



(10,147)


Change in inventories

(28,823)



(14,770)


Change in accounts payable

2,119



(5,999)


Accrued interest and amortization of discounts and finance fees

1,729



7,876


Call premium on senior notes

37,348



1,350


Write-off of finance fees on senior notes

9,086



1,168


Pension & non-pension postretirement benefits

2,420



8,322


Restructuring

(289)



2,858


Accrued liabilities & prepaid expenses

(3,617)



(13,052)


Income taxes

(2,425)



(6,285)


Share-based compensation expense

3,746



3,299


Other operating activities

(2,202)



2,994


Net cash provided by operating activities

17,057



31,472








Investing activities:






Additions to property, plant and equipment

(38,528)



(30,152)


Proceeds from furnace malfunction insurance recovery

4,346




Proceeds from asset sales and other

7



81


Net cash used in investing activities

(34,175)



(30,071)








Financing activities:






Borrowings on ABL credit facility

54,700



42,800


Repayments on ABL credit facility

(45,800)



(42,800)


Other repayments

(5,316)



(4,511)


Other borrowings

5,214



6,094


Payments on 6.875% senior notes

(405,000)



(45,000)


Proceeds from Term Loan B

438,900




Repayments on Term Loan B

(1,100)




Call premium on senior notes

(37,348)



(1,350)


Stock options exercised

2,881



5,107


Debt issuance costs and other

(6,959)




Net cash provided by (used in) financing activities

172



(39,660)








Effect of exchange rate fluctuations on cash

(1,173)



517


Decrease in cash

(18,119)



(37,742)








Cash & cash equivalents at beginning of period

42,208



67,208


Cash & cash equivalents at end of period

$

24,089



$

29,466


 

In accordance with the SEC's Regulation G, tables 1, 2, 3, 4, 5 and 6 provide non-GAAP measures used in this earnings release and a reconciliation to the most closely related Generally Accepted Accounting Principle (GAAP) measure.  Libbey believes that providing supplemental non-GAAP financial information is useful to investors in understanding Libbey's core business and trends.  In addition, it is the basis on which Libbey's management assesses performance.  Although Libbey believes that the non-GAAP financial measures presented enhance investors' understanding of Libbey's business and performance, these non-GAAP measures should not be considered an alternative to GAAP.

Table 1



















Reconciliation of "As Reported" Results to "As Adjusted" Results - Quarter




(dollars in thousands, except per-share amounts)










(unaudited)





















Three months ended September 30,



2014


2013



As Reported


Special Items


As Adjusted


As Reported


Special Items


As Adjusted

Net sales


$

215,957



$



$

215,957



$

204,386



$



$

204,386


Freight billed to customers


931





931



924





924


Total revenues


216,888





216,888



205,310





205,310


Cost of sales


166,573





166,573



165,405



2,749



162,656


Gross profit


50,315





50,315



39,905



(2,749)



42,654


Selling, general and administrative expenses


29,573





29,573



25,519



448



25,071


Special charges








390



390




Income from operations


20,742





20,742



13,996



(3,587)



17,583


Other income (expense)


1,340





1,340



(706)





(706)


Earnings before interest and income taxes


22,082





22,082



13,290



(3,587)



16,877


Interest expense


4,797





4,797



7,706





7,706


Income before income taxes


17,285





17,285



5,584



(3,587)



9,171


Provision for income taxes


3,527





3,527



835



(976)



1,811


Net income


$

13,758



$



$

13,758



$

4,749



$

(2,611)



$

7,360





















Net income per share:



















Basic


$

0.63



$



$

0.63



$

0.22



$

(0.12)



$

0.34


Diluted


$

0.62



$



$

0.62



$

0.21



$

(0.12)



$

0.33





















Weighted average shares:



















Outstanding


21,800









21,493








Diluted


22,240









22,223








 



Three months ended September 30, 2013

Special Items Detail  - (Income) Expense:


Restructuring Charges (1)


Furnace Malfunction (2)


Pension Settlement


Other


Total Special Items

Cost of sales


$



$

2,437



$

312



$



$

2,749


SG&A






448





448


Special charges


390









390


Income taxes


(292)



(300)



(208)



(176)



(976)


Total Special Items


$

98



$

2,137



$

552



$

(176)



$

2,611


(1) Restructuring charges relate to discontinuing production of certain glassware in North America and reducing manufacturing capacity at our Shreveport, Louisiana, manufacturing facility.
(2) Furnace malfunction relates to loss of production and disposal of fixed assets at our Toledo, Ohio, manufacturing facility.

 

Table 2



















Reconciliation of "As Reported" Results to "As Adjusted" Results - Nine Months




(dollars in thousands, except per-share amounts)










(unaudited)





Nine months ended September 30,



2014


2013



As Reported


Special Items


As Adjusted


As Reported


Special Items


As Adjusted

Net sales


$

621,074



$



$

621,074



$

597,766



$



$

597,766


Freight billed to customers


2,638





2,638



2,447





2,447


Total revenues


623,712





623,712



600,213





600,213


Cost of sales


480,791



6,867



473,924



460,614



4,448



456,166


Gross profit


142,921



(6,867)



149,788



139,599



(4,448)



144,047


Selling, general and administrative expenses


89,177





89,177



81,551



2,944



78,607


Special charges








4,619



4,619




Income from operations


53,744



(6,867)



60,611



53,429



(12,011)



65,440


Loss on redemption of debt


(47,191)



(47,191)





(2,518)



(2,518)




Other income (expense)


1,340





1,340



(1,090)





(1,090)


Earnings before interest and income taxes


7,893



(54,058)



61,951



49,821



(14,529)



64,350


Interest expense


17,984





17,984



24,267





24,267


(Loss) income before income taxes


(10,091)



(54,058)



43,967



25,554



(14,529)



40,083


Provision for income taxes


4,703



(341)



5,044



6,380



(1,871)



8,251


Net (loss) income


$

(14,794)



$

(53,717)



$

38,923



$

19,174



$

(12,658)



$

31,832





















Net (loss) income per share:



















Basic


$

(0.68)



$

(2.48)



$

1.80



$

0.90



$

(0.59)



$

1.49


Diluted


$

(0.68)



$

(2.48)



$

1.76



$

0.87



$

(0.58)



$

1.45





















Weighted average shares:



















Outstanding


21,667






21,667



21,300








Diluted


21,667






22,126



21,929









































 



Nine months ended September 30, 2014


Nine months ended September 30, 2013

Special Items Detail  - (Income) Expense:


Restructuring

Charges(1)


Debt Cost(2)


Furnace

Malfunction(3)


Total Special Items


Restructuring
Charge(1)


Furnace

Malfunction(3)


Abandoned Property


Pension Settlement


Debt Costs(2)


Total Special Items

Cost of sales


$

985



$



$

5,882



$

6,867



$

1,699



$

2,437



$



$

312



$



$

4,448


SG&A















1,781



1,163





2,944


Special charges










4,619











4,619


Loss on redemption of debt




47,191





47,191











2,518



2,518


Income taxes


(296)





(45)



(341)



(777)



(300)



(219)



(266)



(309)



(1,871)


Total Special Items


$

689



$

47,191



$

5,837



$

53,717



$

5,541



$

2,137



$

1,562



$

1,209



$

2,209



$

12,658


(1) Restructuring charges relate to discontinuing production of certain glassware in North America and reducing manufacturing capacity at our Shreveport, Louisiana, facility.
(2) Debt costs for the nine months ended September 2014 include the write-off of unamortized finance fees and call premium payments on the $405.0 million senior notes redeemed in April and May 2014, and the write-off of the debt carrying value adjustment related to the termination of the $45.0 million interest rate swap. Debt costs for the nine months ended September 2013 include the write-off of unamortized finance fees and call premium payments on the $45.0 million senior notes redeemed in May 2013.
(3) Furnace malfunction relates to loss of production and disposal of fixed assets at our Toledo, Ohio, manufacturing facility.

 

Table 3













Reconciliation of Net Income (Loss) to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

(dollars in thousands)













(unaudited)















Three months ended

September 30,


Nine months ended

September 30,



2014



2013



2014



2013


Reported net income (loss)


$

13,758



$

4,749



$

(14,794)



$

19,174


Add:













Interest expense


4,797



7,706



17,984



24,267


Provision for income taxes


3,527



835



4,703



6,380


Depreciation and amortization


9,569



11,773



30,837



34,170


EBITDA


31,651



25,063



38,730



83,991


Add: Special items before interest and taxes




3,587



54,058



14,529


Less: Depreciation expense included in special items and

     also in depreciation and amortization above








(1,699)


Adjusted EBITDA


$

31,651



$

28,650



$

92,788



$

96,821


 

Table 4













Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

(dollars in thousands)













(unaudited)















Three months ended

September 30,


Nine months ended

September 30,



2014



2013



2014



2013


Net cash provided by operating activities


$

19,073



$

34,767



$

17,057



$

31,472


Capital expenditures


(16,693)



(10,381)



(38,528)



(30,152)


Proceeds from furnace malfunction insurance recovery






4,346




Proceeds from asset sales and other


3



73



7



81


Free Cash Flow


$

2,383



$

24,459



$

(17,118)



$

1,401


 

Table 5










Reconciliation to Working Capital

(dollars in thousands)










(unaudited)












September 30, 2014


September 30, 2013


December 31, 2013

Add:










Accounts receivable


$

106,459



$

91,611



$

94,549


Inventories


189,221



173,394



163,121


Less: Accounts payable


78,895



60,767



79,620


Less: Receivable on furnace malfunction insurance claim






5,000


Working Capital


$

216,785



$

204,238



$

173,050


 

 

Table 6













Summary Business Segment Information













(dollars in thousands)

(unaudited)


Three months ended

September 30,


Nine months ended

September 30,

Net Sales:


2014



2013



2014



2013














Americas (1)


$

149,366



$

141,390



$

425,741



$

406,740


EMEA (2)


37,684



35,491



111,413



107,714


U.S. Sourcing (3)


20,574



19,868



59,704



58,548


Other (4)


8,333



7,637



24,216



24,764


Consolidated


$

215,957



$

204,386



$

621,074



$

597,766















Segment Earnings Before Interest & Taxes (Segment EBIT) (5) :










Americas (1)


$

25,489



$

21,224



$

73,464



$

73,149


EMEA (2)


909



(135)



3,072



(806)


U.S. Sourcing (3)


2,206



2,067



5,375



7,186


Other (4)


721



(1,831)



2,035



1,283


Segment EBIT


$

29,325



$

21,325



$

83,946



$

80,812















Reconciliation of Segment EBIT to Net Income (Loss):













Segment EBIT


$

29,325



$

21,325



$

83,946



$

80,812


Retained corporate costs (6)


(7,243)



(4,448)



(21,995)



(16,462)


Consolidated Adjusted EBIT


22,082



16,877



61,951



64,350


Loss on redemption of debt






(47,191)



(2,518)


Pension settlement




(760)





(1,475)


Furnace malfunction




(2,437)



(5,882)



(2,437)


Restructuring charges




(390)



(985)



(6,318)


Abandoned property








(1,781)


Special items before interest and taxes




(3,587)



(54,058)



(14,529)


Interest expense


(4,797)



(7,706)



(17,984)



(24,267)


Income taxes


(3,527)



(835)



(4,703)



(6,380)


Net income (loss)


$

13,758



$

4,749



$

(14,794)



$

19,174















Depreciation & Amortization:













Americas (1)


$

5,153



$

5,975



$

16,963



$

19,824


EMEA (2)


2,624



2,930



7,988



7,923


U.S. Sourcing (3)


6



9



20



27


Other (4)


1,444



2,578



4,716



5,350


Corporate


342



281



1,150



1,046


Consolidated


$

9,569



$

11,773



$

30,837



$

34,170


(1) Americas—includes worldwide sales of manufactured and sourced glass tableware having an end market destination in North and South America.
(2) EMEA—includes worldwide sales of manufactured and sourced glass tableware having an end market destination in Europe, the Middle East and Africa.
(3) U.S. Sourcing—includes U.S. sales of sourced ceramic dinnerware, metal tableware, hollowware, and serveware.
(4) Other—includes worldwide sales of manufactured and sourced glass tableware having an end market destination in Asia Pacific.
(5) Segment EBIT represents earnings before interest and taxes and excludes amounts related to certain items we consider not representative of ongoing operations as well as certain retained corporate costs and other allocations that are not considered by management when evaluating performance.
(6) Retained corporate costs includes certain headquarter, administrative and facility costs, and other costs that are not allocable to the reporting segments.

SOURCE Libbey Inc.

INVESTOR CONTACT: Kenneth Boerger, Vice President and Treasurer, (419) 325-2279, ken.boerger@libbey.com; MEDIA CONTACT: Lisa Fell, Director of Corporate Communications, (419) 325-2001, lfell@libbey.com

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