TOLEDO, Ohio, Aug. 1, 2017 /PRNewswire/ -- Libbey Inc.
(NYSE American: LBY), one of the largest glass tableware
manufacturers in the world, today reported results for the second
quarter ended June 30, 2017.
Business Highlights
- Net sales $197.5 million, down
5.0 percent versus prior year, or down 4.1 percent in constant
currency
- Net loss of $0.8 million, down
$9.5 million versus prior year
- Adjusted EBITDA (Table 1) $20.2
million, compared to $40.6
million in the second quarter of the prior year
"Second quarter sales results were in line with our
expectations, as an intensely competitive pricing environment
continues to linger on a global basis," said Chairman and Chief
Executive Officer William Foley. "We
remain confident that we are taking the appropriate measures to
improve the long-term performance of our business. We're seeing
indications that certain pricing initiatives we implemented last
quarter are taking hold, and that our new product initiatives are
beginning to gain traction in the marketplace. We're also very
pleased that our new e-commerce platform launched on time and on
budget in mid-July."
Foley concluded, "As we look to the second half of the year, we
believe that the strategic initiatives we've been focused on over
the last year will start to contribute and alleviate some of the
short-term competitive pressures in our market. We remain the
strongest, most innovative glass tableware company in the world,
and we look forward to a better second half compared to the
prior-year period, supported by improved profitability in EMEA as a
result of our furnace realignment activities, improved operating
performance and cost reductions, and sales contributions from new
products and e-commerce."
Second Quarter Financial & Operating Highlights
Three months ended
June 30,
(dollars in
thousands)
|
|
Net
Sales
|
|
Increase/(Decrease)
|
|
Currency
Effects
|
|
Constant Currency
Sales Growth (Decline)
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
|
|
U.S. &
Canada
|
|
$
|
121,871
|
|
$
|
125,061
|
|
$
|
(3,190)
|
|
(2.6)%
|
|
$
|
762
|
|
(3.2)%
|
Latin
America
|
|
36,503
|
|
40,619
|
|
(4,116)
|
|
(10.1)%
|
|
(731)
|
|
(8.3)%
|
EMEA
|
|
31,054
|
|
32,709
|
|
|
(1,655)
|
|
(5.1)%
|
|
(1,877)
|
|
0.7%
|
Other
|
|
8,086
|
|
9,513
|
|
(1,427)
|
|
(15.0)%
|
|
|
(36)
|
|
(14.6)%
|
Consolidated
|
|
$
|
197,514
|
|
$
|
207,902
|
|
$
|
(10,388)
|
|
(5.0)%
|
|
$
|
(1,882)
|
|
(4.1)%
|
- Net sales in the U.S. and Canada segment were lower due to softer sales
in the retail and business-to-business channels, which were down
approximately 10 percent and 2 percent, respectively. U.S. and
Canada foodservice net sales were
flat versus prior year, despite volume increases in the
channel.
- In Latin America, net sales
declined as a result of lower net sales across all channels,
primarily due to lower volume in the retail channel. Decreased
volume in the business-to-business channel was offset by favorable
price and mix.
- Net sales in the EMEA segment decreased primarily as a result
of unfavorable currency.
- Net sales in Other were down as a result of softer sales in
China.
- The Company's effective tax rate was 163.0 percent for the
second quarter of 2017, compared to 43.5 percent in the year-ago
period. The change in the effective tax rate was driven by several
items, including lower pretax income, the timing and mix of pretax
income earned in tax jurisdictions with varying tax rates, and the
impact of foreign exchange losses compared to gains in the prior
period.
First Six Months of 2017 Financial & Operating
Highlights
Six months ended
June 30,
|
|
|
|
Increase/(Decrease)
|
|
Currency
Effects
|
|
Constant
Currency Sales
Growth
(Decline)
|
(dollars in
thousands)
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
|
|
U.S. &
Canada
|
|
$
|
231,200
|
|
$
|
237,113
|
|
$
|
(5,913)
|
|
(2.5)%
|
|
$
|
1,302
|
|
(3.0)%
|
Latin
America
|
|
67,225
|
|
74,822
|
|
(7,597)
|
|
(10.2)%
|
|
(3,461)
|
|
(5.5)%
|
EMEA
|
|
56,385
|
|
60,569
|
|
(4,184)
|
|
(6.9)%
|
|
(3,479)
|
|
(1.2)%
|
Other
|
|
15,698
|
|
18,205
|
|
|
(2,507)
|
|
(13.8)%
|
|
|
(259)
|
|
(12.3)%
|
Consolidated
|
|
$
|
370,508
|
|
$
|
390,709
|
|
$
|
(20,201)
|
|
(5.2)%
|
|
$
|
(5,897)
|
|
(3.7)%
|
- Net sales in the U.S. and Canada segment were lower due to softer retail
and foodservice channel sales, which were down approximately 9
percent and 2 percent, respectively. U.S. and Canada business-to-business net sales
increased compared to prior year approximately 4 percent, mainly
related to an increase in volume.
- In Latin America, net sales
declined as a result of lower net sales across all channels,
specifically due to lower volume in the retail and
business-to-business channels and unfavorable currency.
- Net sales in the EMEA segment decreased primarily as a result
of unfavorable currency across all three channels, as well as lower
volume in the retail channel.
- Net sales in Other were down as a result of softer sales in
China.
- The Company's effective tax rate was 12.6 percent for the first
six months of 2017, compared to 41.0 percent in the year-ago
period. The change in the effective tax rate was driven by several
items, including lower pretax income, the timing and mix of pretax
income earned in tax jurisdictions with varying tax rates, and the
impact of foreign exchange losses compared to gains in the prior
period.
Balance Sheet and Liquidity
- The Company had available capacity of $90.3 million under its ABL credit facility at
June 30, 2017, with no loans
outstanding and cash on hand of $28.2
million.
- At June 30, 2017, Trade Working
Capital (see Table 3), defined as inventories and accounts
receivable less accounts payable, was $202.4
million, a decrease of $17.0
million from $219.4 million at
June 30, 2016. The decrease was a
result of lower accounts receivable and inventories and higher
accounts payable.
Outlook
Today the Company affirmed its previous full-year 2017 outlook,
but indicated that it expects Adjusted EBITDA margin (see Table 6)
to be near the low end of its previously provided 11 percent to 13
percent range. The Company still expects:
- Net sales decline in the low-to-mid single digits, compared to
the full year 2016, on a reported basis, with continued currency
headwinds
- Capital expenditures of approximately $50 million
"Competitive pressures have remained elevated through the first
half of the year, and as a result, we believe Adjusted EBITDA
margins for the full year will be near the low end of our
previously provided outlook range," said Jim Burmeister, vice president, chief financial
officer. "During the second quarter, we repaid another optional
$5.0 million on our Term Loan B, as
we continue to pursue our goal of reaching our target Debt Net of
Cash to Adjusted EBITDA leverage ratio of 2.5x to 3.0x (see Table
5)."
Webcast Information
Libbey will hold a conference call for investors on Tuesday, August 1, 2017, at 11 a.m. Eastern Daylight 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®, 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 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 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 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
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.
Libbey
Inc.
Condensed
Consolidated Statements of Operations
(dollars in
thousands, except per share amounts)
(unaudited)
|
|
|
|
|
Three months ended
June 30,
|
|
2017
|
|
2016
|
|
|
|
|
Net sales
|
$
|
197,514
|
|
|
$
|
207,902
|
|
Freight billed to
customers
|
747
|
|
|
662
|
|
Total
revenues
|
198,261
|
|
|
208,564
|
|
Cost of
sales
|
157,483
|
|
|
158,153
|
|
Gross
profit
|
40,778
|
|
|
50,411
|
|
Selling, general and
administrative expenses
|
33,676
|
|
|
30,673
|
|
Income from
operations
|
7,102
|
|
|
19,738
|
|
Other income
(expense)
|
(644)
|
|
|
802
|
|
Earnings before
interest and income taxes
|
6,458
|
|
|
20,540
|
|
Interest
expense
|
5,138
|
|
|
5,154
|
|
Income before income
taxes
|
1,320
|
|
|
15,386
|
|
Provision for income
taxes
|
2,152
|
|
|
6,691
|
|
Net income
(loss)
|
$
|
(832)
|
|
|
$
|
8,695
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
|
(0.04)
|
|
|
$
|
0.40
|
|
Diluted
|
$
|
(0.04)
|
|
|
$
|
0.40
|
|
Dividends declared
per share
|
$
|
0.1175
|
|
|
$
|
0.1150
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Basic
|
22,030
|
|
|
21,865
|
|
Diluted
|
22,030
|
|
|
22,003
|
|
Libbey
Inc.
Condensed
Consolidated Statements of Operations
(dollars in
thousands, except per share amounts)
(unaudited)
|
|
|
|
Six months ended
June 30,
|
|
2017
|
|
2016
|
|
|
|
|
Net sales
|
$
|
370,508
|
|
|
$
|
390,709
|
|
Freight billed to
customers
|
1,423
|
|
|
1,280
|
|
Total
revenues
|
371,931
|
|
|
391,989
|
|
Cost of
sales
|
300,839
|
|
|
301,604
|
|
Gross
profit
|
71,092
|
|
|
90,385
|
|
Selling, general and
administrative expenses
|
66,651
|
|
|
64,808
|
|
Income from
operations
|
4,441
|
|
|
25,577
|
|
Other income
(expense)
|
(2,904)
|
|
|
787
|
|
Earnings before
interest and income taxes
|
1,537
|
|
|
26,364
|
|
Interest
expense
|
10,005
|
|
|
10,398
|
|
Income (loss) before
income taxes
|
(8,468)
|
|
|
15,966
|
|
Provision (benefit)
for income taxes
|
(1,066)
|
|
|
6,553
|
|
Net income
(loss)
|
$
|
(7,402)
|
|
|
$
|
9,413
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
|
(0.34)
|
|
|
$
|
0.43
|
|
Diluted
|
$
|
(0.34)
|
|
|
$
|
0.43
|
|
Dividends declared
per share
|
$
|
0.235
|
|
|
$
|
0.230
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Basic
|
21,984
|
|
|
21,858
|
|
Diluted
|
21,984
|
|
|
22,002
|
|
|
|
|
|
Libbey
Inc.
Condensed
Consolidated Balance Sheets
(dollars in
thousands)
|
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
(unaudited)
|
|
|
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
28,167
|
|
|
$
|
61,011
|
|
Accounts receivable —
net
|
88,969
|
|
|
85,113
|
|
Inventories —
net
|
180,066
|
|
|
170,009
|
|
Prepaid and other
current assets
|
15,350
|
|
|
16,777
|
|
Total current
assets
|
312,552
|
|
|
332,910
|
|
Purchased intangibles
— net
|
14,945
|
|
|
15,225
|
|
Goodwill
|
164,112
|
|
|
164,112
|
|
Deferred income
taxes
|
39,226
|
|
|
40,016
|
|
Other
assets
|
10,611
|
|
|
9,514
|
|
Property, plant and
equipment — net
|
263,575
|
|
|
256,392
|
|
Total
assets
|
$
|
805,021
|
|
|
$
|
818,169
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY:
|
|
|
|
Accounts
payable
|
$
|
66,636
|
|
|
$
|
71,582
|
|
Salaries and
wages
|
24,185
|
|
|
27,018
|
|
Accrued
liabilities
|
50,148
|
|
|
41,807
|
|
Accrued income
taxes
|
1,725
|
|
|
1,384
|
|
Pension liability
(current portion)
|
2,373
|
|
|
2,461
|
|
Non-pension
postretirement benefits (current portion)
|
4,897
|
|
|
4,892
|
|
Derivative
liability
|
1,178
|
|
|
1,928
|
|
Long-term debt due
within one year
|
6,174
|
|
|
5,009
|
|
Total current
liabilities
|
157,316
|
|
|
156,081
|
|
Long-term
debt
|
390,207
|
|
|
402,831
|
|
Pension
liability
|
45,729
|
|
|
43,934
|
|
Non-pension
postretirement benefits
|
50,429
|
|
|
55,373
|
|
Deferred income
taxes
|
2,030
|
|
|
1,859
|
|
Other long-term
liabilities
|
12,508
|
|
|
12,972
|
|
Total
liabilities
|
658,219
|
|
|
673,050
|
|
|
|
|
|
Common stock and
capital in excess of par value
|
331,963
|
|
|
329,941
|
|
Retained
deficit
|
(70,013)
|
|
|
(59,625)
|
|
Accumulated other
comprehensive loss
|
(115,148)
|
|
|
(125,197)
|
|
Total shareholders'
equity
|
146,802
|
|
|
145,119
|
|
Total liabilities and
shareholders' equity
|
$
|
805,021
|
|
|
$
|
818,169
|
|
Libbey
Inc.
Condensed
Consolidated Statements of Cash Flows
(dollars in
thousands)
(unaudited)
|
|
|
|
Six months ended
June 30,
|
|
2017
|
|
2016
|
Operating
activities:
|
|
|
|
Net income
(loss)
|
$
|
(7,402)
|
|
|
$
|
9,413
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
22,383
|
|
|
25,435
|
|
Loss on asset sales
and disposals
|
54
|
|
|
119
|
|
Change in accounts
receivable
|
(2,538)
|
|
|
1,389
|
|
Change in
inventories
|
(7,182)
|
|
|
(11,303)
|
|
Change in accounts
payable
|
(6,344)
|
|
|
(6,688)
|
|
Accrued interest and
amortization of discounts and finance fees
|
713
|
|
|
(1,890)
|
|
Pension &
non-pension postretirement benefits, net
|
2,982
|
|
|
(1,766)
|
|
Accrued liabilities
& prepaid expenses
|
9,442
|
|
|
14,687
|
|
Income
taxes
|
(3,619)
|
|
|
1,415
|
|
Share-based
compensation expense
|
2,148
|
|
|
3,323
|
|
Other operating
activities
|
(728)
|
|
|
(1,779)
|
|
Net cash provided by
operating activities
|
9,909
|
|
|
32,355
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Additions to
property, plant and equipment
|
(27,048)
|
|
|
(15,511)
|
|
Net cash used in
investing activities
|
(27,048)
|
|
|
(15,511)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Borrowings on
ABL credit facility
|
3,277
|
|
|
6,000
|
|
Repayments on ABL
credit facility
|
(3,277)
|
|
|
(6,000)
|
|
Other
repayments
|
(169)
|
|
|
(350)
|
|
Repayments on Term
Loan B
|
(12,200)
|
|
|
(12,200)
|
|
Stock options
exercised
|
466
|
|
|
1,050
|
|
Taxes paid on
distribution of equity awards
|
(601)
|
|
|
(764)
|
|
Dividends
|
(5,169)
|
|
|
(5,032)
|
|
Treasury shares
purchased
|
—
|
|
|
(2,000)
|
|
Other financing
activities
|
888
|
|
|
—
|
|
Net cash used in
financing activities
|
(16,785)
|
|
|
(19,296)
|
|
|
|
|
|
Effect of exchange
rate fluctuations on cash
|
1,080
|
|
|
(146)
|
|
Decrease in
cash
|
(32,844)
|
|
|
(2,598)
|
|
|
|
|
|
Cash & cash
equivalents at beginning of period
|
61,011
|
|
|
49,044
|
|
Cash & cash
equivalents at end of period
|
$
|
28,167
|
|
|
$
|
46,446
|
|
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. Generally Accepted
Accounting Principle (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 GAAP.
Table
1
|
|
|
|
|
|
|
|
|
Reconciliation
of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (Adjusted EBITDA)
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Reported net income
(loss) (U.S. GAAP)
|
|
$
|
(832)
|
|
|
$
|
8,695
|
|
|
$
|
(7,402)
|
|
|
$
|
9,413
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
5,138
|
|
|
5,154
|
|
|
10,005
|
|
|
10,398
|
|
Provision (benefit) for income taxes
|
|
2,152
|
|
|
6,691
|
|
|
(1,066)
|
|
|
6,553
|
|
Depreciation and amortization
|
|
11,228
|
|
|
13,354
|
|
|
22,383
|
|
|
25,435
|
|
Add special items
before interest and taxes:
|
|
|
|
|
|
|
|
|
Product
portfolio optimization (1)
|
|
—
|
|
|
6,784
|
|
|
—
|
|
|
6,784
|
|
Reorganization charges (2)
|
|
2,488
|
|
|
—
|
|
|
2,488
|
|
|
—
|
|
Executive terminations
|
|
—
|
|
|
(328)
|
|
|
—
|
|
|
4,619
|
|
Pension
settlement
|
|
—
|
|
|
212
|
|
|
—
|
|
|
212
|
|
Adjusted EBITDA
(non-GAAP)
|
|
$
|
20,174
|
|
|
$
|
40,562
|
|
|
$
|
26,408
|
|
|
$
|
63,414
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
197,514
|
|
|
$
|
207,902
|
|
|
$
|
370,508
|
|
|
$
|
390,709
|
|
Net income (loss)
margin (U.S. GAAP)
|
|
(0.4)%
|
|
|
4.2
|
%
|
|
(2.0)%
|
|
|
2.4
|
%
|
Adjusted EBITDA
margin (non-GAAP)
|
|
10.2
|
%
|
|
19.5
|
%
|
|
7.1
|
%
|
|
16.2
|
%
|
___________
|
(1)
|
Product portfolio
optimization relates to inventory reductions to simplify and
improve our operations.
|
(2)
|
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)
|
|
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
|
|
2017
|
|
2016
|
Net cash provided by
operating activities (U.S. GAAP)
|
|
|
$
|
9,909
|
|
|
$
|
32,355
|
|
Net cash used in
investing activities (U.S. GAAP)
|
|
|
(27,048)
|
|
|
(15,511)
|
|
Free Cash Flow
(non-GAAP)
|
|
|
$
|
(17,139)
|
|
|
$
|
16,844
|
|
|
|
|
|
|
|
Table
3
|
|
|
|
|
|
|
Reconciliation
to Trade Working Capital
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
June 30,
2016
|
|
|
|
|
|
|
|
Accounts receivable —
net
|
|
$
|
88,969
|
|
|
85,113
|
|
|
$
|
93,287
|
|
Inventories —
net
|
|
180,066
|
|
|
170,009
|
|
|
189,567
|
|
Less: Accounts
payable
|
|
66,636
|
|
|
71,582
|
|
|
63,459
|
|
Trade Working Capital
(non-GAAP)
|
|
$
|
202,399
|
|
|
$
|
183,540
|
|
|
$
|
219,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
4
|
|
|
|
|
|
|
|
|
Summary
Business Segment Information
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
(unaudited)
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
Net
Sales:
|
|
2017
|
|
2016
(7)
|
|
2017
|
|
2016
(7)
|
|
|
|
|
|
|
|
|
U.S. & Canada
(1)
|
|
$
|
121,871
|
|
|
$
|
125,061
|
|
|
$
|
231,200
|
|
|
$
|
237,113
|
|
Latin America
(2)
|
|
36,503
|
|
|
40,619
|
|
|
67,225
|
|
|
74,822
|
|
EMEA
(3)
|
|
31,054
|
|
|
32,709
|
|
|
56,385
|
|
|
60,569
|
|
Other
(4)
|
|
8,086
|
|
|
9,513
|
|
|
15,698
|
|
|
18,205
|
|
Consolidated
|
|
$
|
197,514
|
|
|
$
|
207,902
|
|
|
$
|
370,508
|
|
|
$
|
390,709
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings
Before Interest & Taxes (Segment EBIT) (5)
:
|
|
|
|
|
|
|
|
|
U.S. & Canada
(1)
|
|
$
|
15,045
|
|
|
$
|
24,457
|
|
|
$
|
22,546
|
|
|
$
|
37,297
|
|
Latin America
(2)
|
|
1,907
|
|
|
8,570
|
|
|
(1,172)
|
|
|
13,272
|
|
EMEA
(3)
|
|
(2,057)
|
|
|
355
|
|
|
(2,894)
|
|
|
(142)
|
|
Other
(4)
|
|
(854)
|
|
|
876
|
|
|
(2,069)
|
|
|
1,326
|
|
Segment
EBIT
|
|
$
|
14,041
|
|
|
$
|
34,258
|
|
|
$
|
16,411
|
|
|
$
|
51,753
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment EBIT to Net Income (Loss):
|
|
|
|
|
|
|
|
|
Segment
EBIT
|
|
$
|
14,041
|
|
|
$
|
34,258
|
|
|
$
|
16,411
|
|
|
$
|
51,753
|
|
Retained corporate
costs (6)
|
|
(5,095)
|
|
|
(7,050)
|
|
|
(12,386)
|
|
|
(13,774)
|
|
Pension
settlement
|
|
—
|
|
|
(212)
|
|
|
—
|
|
|
(212)
|
|
Reorganization
charges
|
|
(2,488)
|
|
|
—
|
|
|
(2,488)
|
|
|
—
|
|
Product portfolio
optimization
|
|
—
|
|
|
(6,784)
|
|
|
—
|
|
|
(6,784)
|
|
Executive
terminations
|
|
—
|
|
|
328
|
|
|
—
|
|
|
(4,619)
|
|
Interest
expense
|
|
(5,138)
|
|
|
(5,154)
|
|
|
(10,005)
|
|
|
(10,398)
|
|
(Provision) benefit
for income taxes
|
|
(2,152)
|
|
|
(6,691)
|
|
|
1,066
|
|
|
(6,553)
|
|
Net income
(loss)
|
|
$
|
(832)
|
|
|
$
|
8,695
|
|
|
$
|
(7,402)
|
|
|
$
|
9,413
|
|
|
|
|
|
|
|
|
|
|
Depreciation &
Amortization:
|
|
|
|
|
|
|
|
|
U.S. & Canada
(1)
|
|
$
|
3,084
|
|
|
$
|
3,379
|
|
|
$
|
6,166
|
|
|
$
|
6,835
|
|
Latin America
(2)
|
|
4,510
|
|
|
4,516
|
|
|
8,907
|
|
|
9,058
|
|
EMEA
(3)
|
|
1,848
|
|
|
3,617
|
|
|
3,692
|
|
|
5,775
|
|
Other
(4)
|
|
1,329
|
|
|
1,409
|
|
|
2,683
|
|
|
2,837
|
|
Corporate
|
|
457
|
|
|
433
|
|
|
935
|
|
|
930
|
|
Consolidated
|
|
$
|
11,228
|
|
|
$
|
13,354
|
|
|
$
|
22,383
|
|
|
$
|
25,435
|
|
(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
including glass products for OEMs that have an end market
destination outside of Latin America.
|
|
|
(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.
|
|
|
(6)
|
Retained corporate
costs include certain headquarter, administrative and facility
costs, and other costs that are not allocable to the
reporting segments.
|
|
|
(7)
|
In the first
quarter of 2017, net sales and related costs for certain countries
were reclassified between segments to align with changes in
business unit responsibilities. Accordingly, 2016 segment results
have been reclassified to conform to the current year structure.
The revised 2016 segment results do not affect any previously
reported consolidated financial results.
|
Table
5
|
|
|
|
Reconciliation
of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (Adjusted EBITDA) and Debt Net of
Cash to Adjusted EBITDA Ratio
|
(dollars in
thousands)
|
|
|
|
(unaudited)
|
|
|
|
|
Last
twelve
months
ended
June 30,
2017
|
|
Last twelve
months ended
June 30, 2016
|
|
|
Reported net income
(loss) (U.S. GAAP)
|
$
|
(6,742)
|
|
|
$
|
58,240
|
|
Add:
|
|
|
|
Interest
expense
|
20,495
|
|
|
19,821
|
|
Provision (benefit) for income taxes
|
10,092
|
|
|
(35,365)
|
|
Depreciation and amortization
|
45,434
|
|
|
47,494
|
|
Special
items before interest and taxes
|
5,356
|
|
|
35,178
|
|
Adjusted EBITDA
(non-GAAP)
|
$
|
74,635
|
|
|
$
|
125,368
|
|
|
|
|
|
Reported debt on
balance sheet (U.S. GAAP)
|
$
|
396,381
|
|
|
$
|
419,220
|
|
Plus:
Unamortized discount and finance fees
|
3,840
|
|
|
5,141
|
|
Gross debt
|
400,221
|
|
|
424,361
|
|
Less:
Cash and cash equivalents
|
28,167
|
|
|
46,446
|
|
Debt net of
cash
|
$
|
372,054
|
|
|
$
|
377,915
|
|
|
|
|
|
Debt Net of Cash to
Adjusted EBITDA Ratio (non-GAAP)
|
5.0 x
|
|
|
3.0 x
|
|
Table
6
|
|
|
Full year
Outlook
|
|
|
Reconciliation
of Net Income margin to Adjusted EBITDA Margin
|
|
(percent of
estimated 2017 net sales)
|
|
|
(unaudited)
|
|
|
|
|
Outlook for the
year ended
December 31,
2017
|
|
|
|
Net income
margin (U.S. GAAP)
|
|
0.1%
|
Add:
|
|
|
Interest
expense
|
|
2.6%
|
Provision for income taxes
|
|
2.0%
|
Depreciation and amortization
|
|
6.0%
|
Special
items before interest and taxes
|
|
0.3%
|
Adjusted EBITDA
Margin (non-GAAP)
|
|
~
11.0%
|
|
|
|
Table
7
|
|
|
Full year
Outlook on Adjusted SG&A Margin
|
(percent of net
sales)
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Outlook for
the
year ended
December 31, 2017
|
|
Year ended
December 31, 2016
|
SG&A margin (U.S.
GAAP)
|
|
17.3
|
%
|
|
15.2
|
%
|
Deduct special items
in SG&A expenses:
|
|
|
|
|
Executive terminations
|
|
—
|
%
|
|
(0.5)%
|
|
Reorganization charges
|
|
(0.3)%
|
|
|
—
|
%
|
Adjusted SG&A
Margin (non-GAAP)
|
|
17.0
|
%
|
|
14.7
|
%
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/libbey-inc-announces-second-quarter-results-300497335.html
SOURCE Libbey Inc.