TOLEDO, Ohio, April 19, 2017 /PRNewswire/ -- Libbey Inc.
(NYSE MKT: LBY), one of the largest glass tableware
manufacturers in the world, today announced preliminary financial
results for its first quarter ended March
31, 2017. For the first quarter of 2017, Libbey expects:
- Net sales of approximately $173
million, compared to $183
million in the prior year first quarter
- Net loss in the range of $6 million to
$8 million, compared to net income of $0.7 million in the prior year first quarter
- Adjusted EBITDA in the range of $5
million to $7 million, compared to $22.9 million the prior year first quarter (See
Table 1)
"While first quarter net sales were in line with our
expectations, profitability was impacted by stronger competitive
pressures that reflect a continuation of end-market trends we
observed during the second half of last year," said William A. Foley, chairman and chief executive
officer. "As we discussed on our fourth-quarter earnings call, we
anticipated that profitability in the first half of 2017 would be
negatively impacted by furnace rebuilds, the initiation of some
technology investments needed to maintain our leadership position
and foreign currency. However, in addition to these expected items,
other factors contributed to a larger than anticipated
profitability decline during the first quarter. Unfavorable price
and product mix negatively impacted performance, as we protected
market share and met competitive pricing in an environment of
intense global price competition. Also, the mark-to-market impact
of certain of our natural gas hedges was greater than expected
during the period. We estimate that furnace rebuilds, technology
investments and foreign currency negatively impacted our first
quarter year-over-year Adjusted EBITDA comparisons by approximately
$11 million; with approximate
contributions of $6 million from
furnace rebuilds, $3 million from
technology investments and $2 million
from foreign currency. The remainder of the impact was
primarily attributable to unfavorable price and product mix and
mark-to-market accounting of some of our natural gas hedges."
"We believe we are focused on the right areas to ensure that we
emerge from this difficult environment as an even stronger leader
in the industry," Foley continued. "Also, in response to softer
first quarter results and market conditions, we are taking
additional proactive measures to protect our business. We've
identified and already begun to implement expense reductions that
we expect will reduce costs by approximately $5 million, and we've updated our capital
spending plan to reduce 2017 capital expenditures to the low end of
our previously guided range. We are also taking pricing actions in
both the U.S. and Mexico to
improve margins, new product launches are enriching our product
mix, and the accelerated development of our e-commerce platform
will help improve our long-term business performance. As we
continue operating through this challenging environment, we'll
remain committed to returning value to our shareholders through our
dividend and, in the near term, we'll continue prioritizing debt
reduction to maintain the strength of our balance sheet."
The preliminary, unaudited information contained in this
announcement remains subject to change based on the Company's
quarter-end closing procedures, including its execution of its
internal controls over financial reporting and the subsequent
occurrence or identification of events prior to the formal issuance
of the quarterly financial statements.
First Quarter Conference Call Information
The Company is scheduled to announce 2017 first quarter
financial results on Tuesday, May 2,
2017, and will host an earnings conference call at
11 a.m. EDT on the same day.
Interested parties may listen to the conference call on Libbey's
website at https://investor.libbey.com by clicking on the "2017
First Quarter Results" link. Replays of the conference call
will be available on the Company's website through May 9, 2017.
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®, Masters Reserve®,
Crisa®, Royal
Leerdam®, World® Tableware,
Syracuse® China, and Crisal Glass®. In 2016,
Libbey Inc.'s net sales totaled $793.4
million. Additional information is available at
www.libbey.com.
Use of Non-GAAP Financial Measures
To supplement the financial data presented in accordance with
U.S. Generally Accepted Accounting Principles (U.S. GAAP), we use
non-GAAP measures of certain components of financial performance,
including Adjusted EBITDA. A reconciliation to the nearest
U.S. GAAP measure can be found in the table below.
Our non-GAAP measure, defined below, is 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 the non-GAAP measure provides
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 measure, when viewed in conjunction with U.S. GAAP results
and the accompanying reconciliations, enhances the comparability of
results against prior periods and allows for additional
transparency of financial results and business outlook. In
addition, we use non-GAAP data internally to assess performance,
liquidity 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 measure 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 measure 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 measure as follows:
- We define Adjusted EBITDA as U.S. GAAP net income plus interest
expense, provision for income taxes, depreciation and amortization,
and special items that Libbey believes are not reflective of our
core operating performance.
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
3, 2017. 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; changes in trends in the restaurant and bar
industry and the retail channel of distribution that impact demand
for our products; 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; 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; and the inability to achieve savings and profit
improvements at targeted levels in the Company's operations or
within the intended time periods. 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.
In accordance with the SEC's Regulation G, the following table
provides a non-GAAP measure used in this press release and
reconciliation to the most closely related U.S. Generally Accepted
Accounting Principle (U.S. GAAP) measure. See the above text
for additional information on our non-GAAP measure. Although Libbey
believes that the non-GAAP financial measure presented enhances
investors' understanding of Libbey's business and performance, this
non-GAAP measure should not be considered an alternative to
GAAP.
Table
1
|
|
|
|
|
|
|
Reconciliation
of Net (Loss) Income to Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (Adjusted EBITDA)
|
(dollars in
millions)
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2017
|
|
Three months
ended
March 31, 2016
|
|
|
Low
|
|
High
|
|
Reported net (loss)
income (U.S. GAAP)
|
|
$
|
(8.0)
|
|
|
$
|
(6.0)
|
|
|
$
|
0.7
|
|
Add:
|
|
|
|
|
|
|
Interest
expense
|
|
5.0
|
|
|
5.0
|
|
|
5.2
|
|
Benefit
for income taxes
|
|
(3.0)
|
|
|
(3.0)
|
|
|
(0.1)
|
|
Depreciation and amortization
|
|
11.0
|
|
|
11.0
|
|
|
12.1
|
|
Add special items
before interest and taxes
|
|
|
|
|
|
|
Executive terminations
|
|
—
|
|
|
—
|
|
|
5.0
|
|
Adjusted EBITDA
(non-GAAP)
|
|
$
|
5.0
|
|
|
$
|
7.0
|
|
|
$
|
22.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/libbey-inc-provides-first-quarter-business-update-300441729.html
SOURCE Libbey Inc.