Libbey Inc. Announces Third-Quarter Results

11/06/2018
Net sales grew for fourth consecutive quarter, up 1.8 percent or 2.9 percent adjusted for currency; Company expects to achieve the lower end of full-year profitability outlook

TOLEDO, Ohio, Nov. 6, 2018 /PRNewswire/ -- Libbey Inc. (NYSE American: LBY), one of the world's largest glass tableware manufacturers, today reported results for the third quarter ended September 30, 2018.

Third-quarter 2018 Financial & Operating Highlights

  • Net sales were $190.8 million, compared to $187.3 million in the prior-year period, a 1.8 percent increase (or an increase of 2.9 percent, excluding a $2.0 million currency impact).
  • Net loss was $5.0 million, compared to a net loss of $78.8 million in the third quarter of 2017. Included in third-quarter 2017 results was a $79.7 million non-cash goodwill impairment charge associated with the Latin America segment.
  • New products, defined as products introduced within the previous 36 months, contributed $15.9 million in sales, or 8.3 percent of total net sales, during the third quarter.
  • E-commerce sales were approximately 12.0 percent of total U.S. & Canada retail sales, an increase of 46.4 percent compared to the third quarter of 2017.
  • Adjusted EBITDA (see Table 1) was $16.1 million, compared to $20.0 million in the third quarter of 2017.

"We were pleased to see many of the positive trends we observed across our business during the first half of the year continue during the third quarter, and we were able to deliver a fourth consecutive quarter of year-over-year net sales growth," said Chief Executive Officer William Foley. "Our efforts to improve product margins remain on track, driven by our new products and e-commerce initiatives along with favorable price and mix. We also believe price competition across the industry remains in balance, and we're maintaining our track record of outperforming foodservice industry sales growth, which gives us confidence that our market share is increasing."

Foley continued, "Our performance in the back half of this year has been impacted by increased storage costs associated with higher inventory, increased utility costs and production downtime to reduce inventory. We have actions in place to lower costs and our inventory levels while ensuring our best-in-class service for customers. In addition, currency translation, most notably in Latin America, had a significant impact on third-quarter results compared to our prior year. Despite these short-term impacts, we're entering the upcoming holiday selling season with great momentum behind our products in the marketplace, and we expect to enter fiscal year 2019 well positioned to stay on track with our long-term financial goals."

Three months ended September 30,

(dollars in thousands)


Net Sales


Increase/(Decrease)


Currency
Effects


Constant Currency Sales Growth (Decline)



2018


2017


$ Change


% Change



U.S. & Canada


$

115,304



$

112,252



$

3,052



2.7

%


$

(5)



2.7

%

Latin America


35,406



35,339



67



0.2

%


(1,449)



4.3

%

EMEA


33,289



33,743



(454)



(1.3)

%


(397)



(0.2)

%

Other


6,776



6,005



771



12.8

%


(150)



15.3

%

Consolidated


$

190,775



$

187,339



$

3,436



1.8

%


$

(2,001)



2.9

%

 

  • Net sales in the U.S. & Canada segment increased 2.7 percent, driven by favorable price and product mix sold in the foodservice and business-to-business channels, as well as improved channel mix and volume in the segment.
  • In Latin America, net sales increased 0.2 percent (an increase of 4.3 percent excluding currency fluctuation) as a result of higher volume and favorable pricing, offset primarily by unfavorable currency impacts.
  • Net sales in the EMEA segment decreased 1.3 percent driven primarily by lower volume. Partially offsetting the decrease was favorable price and product mix on product sold across all channels, as well as favorable channel mix.
  • Net sales in Other increased 12.8 percent as a result of higher sales volume and favorable price and mix in China.
  • The Company's effective tax rate was (54.9) percent for the third quarter of 2018, compared to (3.6) percent in the prior-year quarter. The change in the effective tax rate was driven by differing levels of pretax income, significantly higher non-deductible expenses in the prior-year quarter including a $79.7 million impairment of goodwill in our Mexico reporting unit, and the timing and mix of pretax income earned in tax jurisdictions with varying tax rates differing from that forecasted for the full year.

First Nine Months of 2018 Financial & Operating Highlights

Nine months ended September 30,

(dollars in thousands)


Net Sales


Increase/(Decrease)


Currency
Effects


Constant Currency Sales Growth (Decline)



2018


2017


$ Change


% Change



U.S. & Canada


$

351,719



$

343,452



$

8,267



2.4

%


$

72



2.4

%

Latin America


110,029



102,564



7,465



7.3

%


(338)



7.6

%

EMEA


103,712



90,128



13,584



15.1

%


6,344



8.0

%

Other


20,762



21,703



(941)



(4.3)

%


838



(8.2)

%

Consolidated


$

586,222



$

557,847



$

28,375



5.1

%


$

6,916



3.8

%

 

  • Net sales in the U.S. & Canada segment increased 2.4 percent, driven by favorable price and product mix sold, as well as higher volume, partially offset by unfavorable channel mix.
  • In Latin America, net sales increased 7.3 percent (an increase of 7.6 percent excluding currency fluctuation) as a result of higher volume and favorable pricing. Partially offsetting the increase is unfavorable product mix in the retail channel.
  • Net sales in the EMEA segment increased 15.1 percent and were favorably impacted by $6.3 million of currency. Also leading to the year-over-year improvement is favorable price and product mix on product sold in all three channels as well as higher sales volume in those channels.
  • Net sales in Other were down primarily as a result of lower sales volume in China, partially offset by favorable price and product mix and favorable currency impacts.
  • The Company's effective tax rate was 314.3 percent for the first nine months of 2018, compared to (2.0) percent in the year-ago period. The change in the effective tax rate was driven by differing levels of pretax income, significantly higher non-deductible expenses in the prior year (including a $79.7 million impairment of goodwill in our Mexico reporting unit) and the timing and mix of pretax income earned in tax jurisdictions with varying tax rates differing from that forecasted for the full year. Cash taxes paid for the first nine months of 2018 and 2017 were approximately $7.2 million and $2.6 million, respectively, with the increase principally attributable to higher pretax income in Mexico.

Balance Sheet and Liquidity

  • The Company had remaining available capacity of $59.6 million under its ABL credit facility at September 30, 2018, with $32.0 million in loans outstanding and cash on hand of $19.1 million.
  • At September 30, 2018, Trade Working Capital (see Table 3), defined as inventories and accounts receivable less accounts payable, was $228.7 million, an increase of $13.1 million from $215.6 million at September 30, 2017. The increase was a result of higher inventories, higher accounts receivable and lower accounts payable.

Outlook

Today, the Company affirmed its previously provided full-year 2018 sales outlook and expects to achieve the lower end of its full-year profitability outlook. As of the date of this news release, the Company now expects:

  • Net sales increase in the low-single digits, compared to full-year 2017 sales, on a reported basis;
  • Adjusted EBITDA margins (see Table 6) at the lower end of the previously communicated 10 percent to 11 percent range;
  • Capital expenditures near $50 million, which is at the low end of the previously estimated $50 million to $55 million range; and
  • Adjusted selling, general and administrative expense in the range of 15.5 percent to 16.0 percent of net sales.

Jim Burmeister, senior vice president, chief financial officer, commented, "Cost controls implemented across the business have enabled us to improve our full-year outlook for selling, general, and administrative expenses as a percent of net sales for the second consecutive quarter. These improvements will offset the higher operating costs previously mentioned and improve financial performance in the fourth quarter. We also expect capital spending to come in at the low end of our previously communicated range which will help offset higher inventory. In addition to our focus on improving operating performance, we remain committed to pursuing a capital allocation strategy that assigns greater priority to debt reduction while maintaining appropriate levels of investment in strategic initiatives that are expected to enhance long-term value for shareholders."

Webcast Information

Libbey will hold a conference call for investors on Tuesday, November 6, 2018, at 11 a.m. Eastern Standard Time. The conference call will be webcast 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.

About Libbey Inc.

Based in Toledo, Ohio, Libbey Inc. is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the U.S., Mexico, China, Portugal and the Netherlands. In existence since 1818, the Company supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries. Libbey's global brand portfolio, in addition to its namesake brand, includes Libbey Signature®, Master's Reserve®, Crisa®, Royal Leerdam®, World® Tableware, Syracuse® China, and Crisal Glass®. In 2017, Libbey Inc.'s net sales totaled $781.8 million. Additional information is available at www.libbey.com.

Use of Non-GAAP Financial Measures

To supplement the condensed financial statements presented in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP), we use non-GAAP measures of certain components of financial performance. These non-GAAP measures include Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Trade Working Capital, Adjusted Selling, General & Administrative Expense (Adjusted SG&A), Adjusted SG&A Margin and our Debt Net of Cash to Adjusted EBITDA Ratio. Reconciliations to the nearest U.S. GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.

Our non-GAAP measures, as defined below, are used by analysts, investors and other interested parties to compare our performance with the performance of other companies that report similar non-GAAP measures. Libbey believes these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of core business operating results. We believe the non-GAAP measures, when viewed in conjunction with U.S. GAAP results and the accompanying reconciliations, enhance the comparability of results against prior periods and allow for additional transparency of financial results and business outlook. In addition, we use non-GAAP data internally to assess performance and facilitate management's internal comparison of our financial performance to that of prior periods, as well as trend analysis for budgeting and planning purposes. The presentation of our non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Furthermore, our non-GAAP measures may not be comparable to similarly titled measures reported by other companies and may have limitations as an analytical tool. We define our non-GAAP measures as follows:

  • We define Adjusted EBITDA and Adjusted EBITDA Margin as U.S. GAAP net income (loss) plus interest expense, provision for income taxes, depreciation and amortization, and special items, when applicable, that Libbey believes are not reflective of our core operating performance.
  • We define Trade Working Capital as net accounts receivable plus net inventories less accounts payable.
  • We define Adjusted SG&A and Adjusted SG&A Margin as U.S. GAAP selling, general and administrative expenses less special items that Libbey believes are not reflective of our core operating performance.
  • We define our Debt Net of Cash to Adjusted EBITDA Ratio as gross debt before unamortized discount and finance fees, less cash and cash equivalents, divided by last twelve months Adjusted EBITDA (defined above).

Constant Currency

We translate revenue and expense accounts in our non-U.S. operations at current average exchange rates during the year. References to "constant currency," "excluding currency impact" and "adjusted for currency" are considered non-GAAP measures. Constant currency references regarding net sales reflect a simple mathematical translation of local currency results using the comparable prior period's currency conversion rate. Constant currency references regarding Adjusted EBITDA and Adjusted EBITDA Margin comprise a simple mathematical translation of local currency results using the comparable prior period's currency conversion rate plus the transactional impact of changes in exchange rates from revenues, expenses and assets and liabilities that are denominated in a currency other than the functional currency. We believe this non-GAAP constant currency information provides valuable supplemental information regarding our core operating results, better identifies operating trends that may otherwise be masked or distorted by exchange rate changes and provides a higher degree of transparency of information used by management in its evaluation of our ongoing operations. These non-GAAP measures should be viewed in addition to, and not as an alternative to, the reported results prepared in accordance with U.S. GAAP. Our currency market risks include currency fluctuations relative to the U.S. dollar, Canadian dollar, Mexican peso, euro and RMB.

Caution on Forward-Looking Statements

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. 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 1, 2018. Important factors potentially affecting performance include but are not limited to risks related to increased competition from foreign suppliers endeavoring to sell glass tableware, ceramic dinnerware and metalware in our core markets; global economic conditions and the related impact on consumer spending levels; major slowdowns or changes in trends in the retail, travel, restaurant and bar or entertainment industries that impact demand for our products; inability to meet the demand for new products; material restructuring charges related to involuntary employee terminations, facility abandonments, or other various restructuring activities; significant increases in per-unit costs for natural gas, electricity, freight, corrugated packaging, and other purchased materials; our ability to borrow under our ABL credit agreement; 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 exchange rate changes to the value of the euro, the Mexican peso, the RMB and the Canadian dollar and the earnings and cash flows of our international operations, expressed under U.S. GAAP; the effect of high levels of inflation in countries in which we operate or sell our products; the inability to achieve savings and profit improvements at targeted levels in the Company's operations or within the intended time periods; the failure of our investments in e-commerce, new technology and other capital expenditures to yield expected returns; failure to prevent unauthorized access, security breaches and cyber attacks to our information technology systems; compliance with, or the failure to comply with, legal requirements relating to health, safety and environmental protection; our failure to protect our intellectual property; and the inability to effectively integrate future business we acquire or joint ventures into which we enter. 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,


2018


2017 (1)





Net sales

$

190,775



$

187,339


Freight billed to customers

780



1,058


Total revenues

191,555



188,397


Cost of sales

154,315



150,396


Gross profit

37,240



38,001


Selling, general and administrative expenses

33,336



29,460


Goodwill impairment



79,700


Income (loss) from operations

3,904



(71,159)


Other income (expense)

(1,453)



193


Earnings (loss) before interest and income taxes

2,451



(70,966)


Interest expense

5,652



5,118


Loss before income taxes

(3,201)



(76,084)


Provision for income taxes

1,758



2,731


Net loss

$

(4,959)



$

(78,815)






Net loss per share:




    Basic

$

(0.22)



$

(3.57)


    Diluted

$

(0.22)



$

(3.57)


Dividends declared per share

$



$

0.1175






Weighted average shares:




    Basic

22,223



22,075


    Diluted

22,223



22,075



 

___________________

(1)

In connection with our January 1, 2018 adoption of ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost, we reclassed the 2017 non-service cost components of pension and post-retirement benefit costs previously reported within income from operations to other income (expense).

 

Libbey Inc.

Condensed Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(unaudited)



Nine months ended September 30,


2018


2017 (1)





Net sales

$

586,222



$

557,847


Freight billed to customers

2,475



2,481


Total revenues

588,697



560,328


Cost of sales

471,294



449,737


Gross profit

117,403



110,591


Selling, general and administrative expenses

98,396



96,875


Goodwill impairment



79,700


Income (loss) from operations

19,007



(65,984)


Other income (expense)

(980)



(3,445)


Earnings (loss) before interest and income taxes

18,027



(69,429)


Interest expense

16,192



15,123


Income (loss) before income taxes

1,835



(84,552)


Provision for income taxes

5,767



1,665


Net loss

$

(3,932)



$

(86,217)






Net loss per share:




    Basic

$

(0.18)



$

(3.92)


    Diluted

$

(0.18)



$

(3.92)


Dividends declared per share

$

0.1175



$

0.3525






Weighted average shares:




    Basic

22,162



22,015


    Diluted

22,162



22,015



___________________________

(1)

In connection with our January 1, 2018 adoption of ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost, we reclassed the 2017 non-service cost components of pension and post-retirement benefit costs previously reported within income from operations to other income (expense).

 

Libbey Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)



September 30, 2018


December 31, 2017


(unaudited)



ASSETS:




Cash and cash equivalents

$

19,088



$

24,696


Accounts receivable — net

91,082



89,997


Inventories — net

210,591



187,886


Prepaid and other current assets

18,051



12,550


Total current assets

338,812



315,129


Pension asset

4,249



2,939


Purchased intangible assets — net

13,685



14,565


Goodwill

84,412



84,412


Deferred income taxes

25,482



24,892


Other assets

9,429



9,627


Property, plant and equipment — net

264,057



265,675


Total assets

$

740,126



$

717,239






LIABILITIES AND SHAREHOLDERS' EQUITY:




Accounts payable

$

72,927



$

78,346


Salaries and wages

27,171



27,409


Accrued liabilities

51,568



43,223


Accrued income taxes

4,798



1,862


Pension liability (current portion)

2,286



2,185


Non-pension post-retirement benefits (current portion)

4,181



4,185


Derivative liability



697


Long-term debt due within one year

4,400



7,485


Total current liabilities

167,331



165,392


Long-term debt

406,252



376,905


Pension liability

41,295



43,555


Non-pension post-retirement benefits

48,599



49,758


Deferred income taxes

1,864



1,850


Other long-term liabilities

12,616



12,885


Total liabilities

677,957



650,345






Common stock and capital in excess of par value

335,083



333,231


Retained deficit

(167,417)



(161,165)


Accumulated other comprehensive loss

(105,497)



(105,172)


Total shareholders' equity

62,169



66,894


Total liabilities and shareholders' equity

$

740,126



$

717,239



 

Libbey Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)



Nine months ended September 30,


2018


2017

Operating activities:




Net loss

$

(3,932)



$

(86,217)


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




Depreciation and amortization

34,389



33,616


Goodwill impairment



79,700


Loss on asset sales and disposals

256



224


Change in accounts receivable

(1,688)



(2,000)


Change in inventories

(24,445)



(25,944)


Change in accounts payable

(5,139)



3,283


Accrued interest and amortization of discounts and finance fees

801



929


Pension & non-pension post-retirement benefits, net

1,154



3,007


Accrued liabilities & prepaid expenses

6,938



8,716


Income taxes

(1,662)



(1,942)


Share-based compensation expense

2,127



2,930


Other operating activities

(1,213)



(94)


Net cash provided by operating activities

7,586



16,208






Investing activities:




Additions to property, plant and equipment

(35,123)



(39,140)


Net cash used in investing activities

(35,123)



(39,140)






Financing activities:




Borrowings on ABL credit facility

78,850



21,004


Repayments on ABL credit facility

(46,876)



(12,277)


Other repayments

(3,077)



(632)


Repayments on Term Loan B

(3,300)



(18,300)


Stock options exercised

5



466


Taxes paid on distribution of equity awards

(304)



(623)


Dividends

(2,595)



(7,762)


Other financing activities



888


Net cash provided by (used in) financing activities

22,703



(17,236)






Effect of exchange rate fluctuations on cash

(774)



731


Decrease in cash

(5,608)



(39,437)






Cash & cash equivalents at beginning of period

24,696



61,011


Cash & cash equivalents at end of period

$

19,088



$

21,574



In accordance with the SEC's Regulation G, the following tables provide non-GAAP measures used in this earnings release and a reconciliation to the most closely related U.S. GAAP measure. See the above text for additional information on our non-GAAP measures. 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 U.S. GAAP.

Table 1









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

(dollars in thousands)









(unaudited)











Three months ended September 30,


Nine months ended September 30,



2018


2017


2018


2017

Reported net loss (U.S. GAAP)


$

(4,959)



$

(78,815)



$

(3,932)



$

(86,217)


Add:









   Interest expense


5,652



5,118



16,192



15,123


   Provision for income taxes


1,758



2,731



5,767



1,665


   Depreciation and amortization


11,270



11,233



34,389



33,616


Add special items before interest and taxes:









   Fees associated with strategic initiative (1)


2,341





2,341




   Goodwill impairment (2)




79,700





79,700


   Reorganization charges (3)








2,488


Adjusted EBITDA (non-GAAP)


$

16,062



$

19,967



$

54,757



$

46,375











Net sales


$

190,775



$

187,339



$

586,222



$

557,847


Net loss margin (U.S. GAAP)


(2.6)

%


(42.1)

%


(0.7)

%


(15.5)

%

Adjusted EBITDA margin (non-GAAP)


8.4

%


10.7

%


9.3

%


8.3

%



(1) Legal and professional fees associated with a strategic initiative that we terminated during the third quarter.

(2) Non-cash goodwill impairment charge recorded in our Latin America segment.

(3) Workforce reorganization as a part of our cost savings initiatives.

 

Table 2





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

(dollars in thousands)





(unaudited)







Nine months ended September 30,



2018


2017

Net cash provided by operating activities (U.S. GAAP)


$

7,586



$

16,208


Net cash used in investing activities (U.S. GAAP)


(35,123)



(39,140)


Free Cash Flow (non-GAAP)


$

(27,537)



$

(22,932)


 

Table 3







Reconciliation to Trade Working Capital



(dollars in thousands)







(unaudited)









September 30, 2018


December 31, 2017


September 30, 2017








Accounts receivable — net


$

91,082



$

89,997



$

89,084


Inventories — net


210,591



187,886



200,181


Less: Accounts payable


72,927



78,346



73,645


Trade Working Capital (non-GAAP)


$

228,746



$

199,537



$

215,620


 


Table 4









Summary Business Segment Information









(dollars in thousands)
(unaudited)


Three months ended
September 30,


Nine months ended
September 30,

Net Sales:


2018


2017


2018


2017









U.S. & Canada (1)


$

115,304



$

112,252



$

351,719



$

343,452


Latin America (2)


35,406



35,339



110,029



102,564


EMEA (3)


33,289



33,743



103,712



90,128


Other (4)


6,776



6,005



20,762



21,703


Consolidated


$

190,775



$

187,339



$

586,222



$

557,847











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

















U.S. & Canada (1)


$

7,538



$

10,761



$

25,620



$

33,307


Latin America (2)


1,727



3,721



11,310



2,549


EMEA (3)


1,358



1,482



4,984



(1,412)


Other (4)


852



(1,529)



383



(3,598)


Segment EBIT


$

11,475



$

14,435



$

42,297



$

30,846











Reconciliation of Segment EBIT to Net Loss:









Segment EBIT


$

11,475



$

14,435



$

42,297



$

30,846


Retained corporate costs (6)


(6,683)



(5,701)



(21,929)



(18,087)


Goodwill impairment




(79,700)





(79,700)


Fees associated with strategic initiative


(2,341)





(2,341)




Reorganization charges








(2,488)


Interest expense


(5,652)



(5,118)



(16,192)



(15,123)


Provision for income taxes


(1,758)



(2,731)



(5,767)



(1,665)


Net loss


$

(4,959)



$

(78,815)



$

(3,932)



$

(86,217)











Depreciation & Amortization:









U.S. & Canada (1)


$

3,850



$

2,850



$

10,289



$

9,016


Latin America (2)


4,208



4,850



13,412



13,757


EMEA (3)


1,835



1,816



5,784



5,508


Other (4)


992



1,138



3,615



3,821


Corporate


385



579



1,289



1,514


Consolidated


$

11,270



$

11,233



$

34,389



$

33,616



(1) U.S. & Canada—includes sales of manufactured and sourced tableware having an end-market destination in the U.S and 
    Canada, excluding glass products for Original Equipment Manufacturers (OEM), which remain in the Latin America 
    segment.

(2) Latin America—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in 
    Latin America, as well as glass products for OEMs regardless of end-market destination.

(3)  EMEA—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Europe, 
    the Middle East and Africa.

(4) Other—includes primarily 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. Segment EBIT also includes an allocation of manufacturing costs for 
     inventory produced at a Libbey facility that is located in a region other than the end market in which the inventory is sold. 
     This allocation can fluctuate from year to year based on the relative demands for products produced in regions other than the 
     end markets in which they are sold.

(6) Retained corporate costs include certain headquarter, administrative and facility costs, and other costs that are not allocable 
     to the reporting segments.

 


Table 5






Reconciliation of Net Loss to Adjusted EBITDA and Debt Net of Cash to Adjusted EBITDA Ratio

(dollars in thousands)






(unaudited)







Last twelve months
ended
September 30, 2018


Year ended
December 31, 2017


Last twelve months
ended
September 30, 2017




Reported net loss  (U.S. GAAP)

$

(11,083)



$

(93,368)



$

(88,466)


Add:






   Interest expense

21,469



20,400



20,382


   Provision for income taxes

19,900



15,798



7,373


   Depreciation and amortization

46,317



45,544



45,433


   Special items before interest and taxes

2,341



82,188



85,154


Adjusted EBITDA  (non-GAAP)

$

78,944



$

70,562



$

69,876








Reported debt on balance sheet  (U.S. GAAP)

$

410,652



$

384,390



$

398,882


   Plus: Unamortized discount and finance fees

2,622



3,295



3,588


Gross debt

413,274



387,685



402,470


   Less: Cash and cash equivalents

19,088



24,696



21,574


Debt net of cash

$

394,186



$

362,989



$

380,896








Debt Net of Cash to Adjusted EBITDA Ratio (non-GAAP)

5.0x



5.1 x



5.5 x


 

Table 6




2018 Outlook




Reconciliation of Net Loss margin to Adjusted EBITDA Margin



(percent of estimated 2018 net sales)




(unaudited)







Outlook for the year ended
December 31, 2018

Net loss margin  (U.S. GAAP)



(1.0%) - (0.7%)

Add:




   Interest expense



2.7%

   Provision for income taxes



2.4% - 3.1%

   Depreciation and amortization



5.6%

   Special items before interest and taxes



0.3%

Adjusted EBITDA Margin  (non-GAAP)



10.0% - 11.0%

 

Table 7





Adjusted SG&A Margin

(percent of net sales)





(unaudited)







Outlook for the
year ended 
December 31, 2018


Year ended
December 31, 2017

SG&A margin (U.S. GAAP)


15.8% - 16.3%


16.0%

Deduct special items in SG&A expenses:





   Fees associated with strategic initiative


(0.3)%


—%

   Reorganization charges


—%


(0.3)%

Adjusted SG&A Margin (non-GAAP)


15.5% - 16.0%


15.7%

 

Cision View original content:http://www.prnewswire.com/news-releases/libbey-inc-announces-third-quarter-results-300744678.html

SOURCE Libbey Inc.

EMAIL ALERTS

Email Address *
Mailing Lists *





 
Enter the code shown above.

Commercial News

Upcoming Events