TOLEDO, Ohio, July 31, 2018 /PRNewswire/ -- Libbey Inc.
(NYSE American: LBY), one of the world's largest glass
tableware manufacturers, today reported results for the second
quarter ended June 30, 2018.
Second Quarter 2018 Financial & Operating
Highlights
- Net sales were $213.5 million,
compared to $197.5 million in the
prior-year period, an 8.1 percent increase (or an increase of 7.0
percent, excluding a $2.3 million
currency impact).
- Net income was $4.0 million,
compared to a net loss of $0.8
million in the second quarter of 2017.
- Adjusted EBITDA (see Table 1) was $26.8
million, compared to $20.2
million in the second quarter of 2017, a 32.7 percent
increase compared to the prior-year period.
- New products, defined as products introduced within the
previous 36 months, contributed $13.3
million in sales, or 6.2 percent of total net sales, during
the second quarter.
- E-commerce platform sales were approximately 12.6 percent of
total U.S. and Canada retail
sales.
"For the second quarter of 2018, we were pleased to deliver
results that exceeded our internal expectations and reflected the
strong momentum we are building this year," said Chief Executive
Officer William Foley. "Net sales
improved in all of our geographic regions with the exception of
Asia Pacific, and we continued to
experience strong contributions from new product introductions as
well as our e-commerce platform. The strength of our competitive
position, our new product offerings and our ability to service
customers are enabling us to continue to improve our performance.
We remain confident that the strategies we are implementing are the
right decisions to drive profitable growth and long-term
improvements in our financial performance."
Three months ended
June 30,
(dollars in
thousands)
|
|
Net
Sales
|
|
Increase/(Decrease)
|
|
Currency
Effects
|
|
Constant Currency
Sales Growth (Decline)
|
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
|
|
U.S. &
Canada
|
|
$
|
128,474
|
|
|
$
|
121,871
|
|
|
$
|
6,603
|
|
|
5.4
|
%
|
|
$
|
28
|
|
|
5.4
|
%
|
Latin
America
|
|
40,290
|
|
|
36,503
|
|
|
3,787
|
|
|
10.4
|
%
|
|
(993)
|
|
|
13.1
|
%
|
EMEA
|
|
38,175
|
|
|
31,054
|
|
|
7,121
|
|
|
22.9
|
%
|
|
2,799
|
|
|
13.9
|
%
|
Other
|
|
6,595
|
|
|
8,086
|
|
|
(1,491)
|
|
|
(18.4)
|
%
|
|
417
|
|
|
(23.6)
|
%
|
Consolidated
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
16,020
|
|
|
8.1
|
%
|
|
$
|
2,251
|
|
|
7.0
|
%
|
- Net sales in the U.S. and Canada segment increased 5.4 percent, driven
by favorable price and product mix sold in all three channels as
well as higher volume. Partially offsetting the increase was
unfavorable channel mix.
- In Latin America, net sales
increased 10.4 percent (an increase of 13.1 percent excluding
currency fluctuation) as a result of higher volume and favorable
pricing, partially offset by unfavorable product mix in the
business-to-business and retail channels and an unfavorable
currency impact.
- Net sales in the EMEA segment increased 22.9 percent and were
favorably impacted by currency, higher volume and favorable price
and product mix on product sold across all 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 60.4 percent for the
second quarter of 2018, compared to 163.0 percent in the prior-year
quarter. The change in the effective tax rate was driven by
differing levels of pretax income and the timing and mix of pretax
income earned in tax jurisdictions with varying tax rates differing
from that forecasted for the full year. The impact of U.S. tax
reform did not materially affect the effective tax rate for 2018
due to the relatively low proportion of U.S. income compared with
global income.
First Six Months of 2018 Financial & Operating
Highlights
Six months ended
June 30,
(dollars in
thousands)
|
|
Net
Sales
|
|
Increase/(Decrease)
|
|
Currency
Effects
|
|
Constant Currency
Sales Growth (Decline)
|
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
|
|
U.S. &
Canada
|
|
$
|
236,415
|
|
|
$
|
231,200
|
|
|
$
|
5,215
|
|
|
2.3
|
%
|
|
$
|
71
|
|
|
2.2
|
%
|
Latin
America
|
|
74,623
|
|
|
67,225
|
|
|
7,398
|
|
|
11.0
|
%
|
|
1,114
|
|
|
9.3
|
%
|
EMEA
|
|
70,423
|
|
|
56,385
|
|
|
14,038
|
|
|
24.9
|
%
|
|
6,914
|
|
|
12.6
|
%
|
Other
|
|
13,986
|
|
|
15,698
|
|
|
(1,712)
|
|
|
(10.9)
|
%
|
|
935
|
|
|
(16.9)
|
%
|
Consolidated
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
|
$
|
24,939
|
|
|
6.7
|
%
|
|
$
|
9,034
|
|
|
4.3
|
%
|
- Net sales in the U.S. and Canada segment increased 2.3 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 11.0 percent (an increase of 9.3 percent excluding
currency fluctuation) as a result of higher volume, favorable
pricing and a favorable currency impact, partially offset by
unfavorable product mix in the business-to-business and retail
channels and unfavorable channel mix.
- Net sales in the EMEA segment increased 24.9 percent and were
favorably impacted by currency, higher volume and favorable price
and product mix on product sold across all 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 79.6 percent for the first
six months of 2018, compared to 12.6 percent in the year-ago
period. The change in the effective tax rate was driven by
differing levels of pretax income and the timing and mix of pretax
income earned in tax jurisdictions with varying tax rates differing
from that forecasted for the full year. The impact of U.S. tax
reform did not materially affect the effective tax rate for 2018
due to the relatively low proportion of U.S. income compared with
global income.
Balance Sheet and Liquidity
- The Company had remaining available capacity of $68.0 million under its ABL credit facility at
June 30, 2018, with $22.5 million in loans outstanding and cash on
hand of $19.8 million.
- At June 30, 2018, Trade Working
Capital (see Table 3), defined as inventories and accounts
receivable less accounts payable, was $221.1
million, an increase of $18.7
million from $202.4 million at
June 30, 2017. The increase was
primarily a result of higher inventories and higher accounts
receivable, partially offset by higher accounts payable.
$1.7 million of the increase in Trade
Working Capital was attributable to the effect of currency.
Outlook
Today the Company affirmed its previously provided full-year
2018 sales and Adjusted EBITDA outlook, with expected Adjusted
EBITDA margins (see Table 6) within the 10 percent to 11 percent
range, but has modified selling, general and administrative
guidance. The Company expects:
- Net sales increase in the low-single digits, compared to
full-year 2017, on a reported basis;
- Capital expenditures in the range of $50
million to $55 million;
and
- Selling, general and administrative expense around 16 percent
to 16.5 percent of net sales.
Jim Burmeister, senior vice
president, chief financial officer, commented, "Key performance
indicators across the business are continuing to show
improvement. Anticipating that there may be challenges in
retail channels as well as foreign trade policy uncertainty, we are
tightly managing items within our control. We expect to
deliver full-year SG&A as a percent of net sales in a range of
16 to 16.5 percent compared to our previous guidance of 17
percent. We're maintaining our previously provided outlook
for full-year net sales and Adjusted EBITDA."
Webcast Information
Libbey will hold a conference call for investors on Tuesday, July 31, 2018, 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®, 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 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
June 30,
|
|
2018
|
|
2017
(1)
|
|
|
|
|
Net sales
|
$
|
213,534
|
|
|
$
|
197,514
|
|
Freight billed to
customers
|
938
|
|
|
747
|
|
Total
revenues
|
214,472
|
|
|
198,261
|
|
Cost of
sales
|
167,979
|
|
|
156,868
|
|
Gross
profit
|
46,493
|
|
|
41,393
|
|
Selling, general and
administrative expenses
|
33,537
|
|
|
34,083
|
|
Income from
operations
|
12,956
|
|
|
7,310
|
|
Other income
(expense)
|
2,580
|
|
|
(852)
|
|
Earnings before
interest and income taxes
|
15,536
|
|
|
6,458
|
|
Interest
expense
|
5,456
|
|
|
5,138
|
|
Income before income
taxes
|
10,080
|
|
|
1,320
|
|
Provision for income
taxes
|
6,092
|
|
|
2,152
|
|
Net income
(loss)
|
$
|
3,988
|
|
|
$
|
(832)
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
|
0.18
|
|
|
$
|
(0.04)
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
(0.04)
|
|
Dividends declared
per share
|
$
|
—
|
|
|
$
|
0.1175
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Basic
|
22,170
|
|
|
22,030
|
|
Diluted
|
22,356
|
|
|
22,030
|
|
____________________
|
(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)
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
2018
|
|
2017
(1)
|
|
|
|
|
Net sales
|
$
|
395,447
|
|
|
$
|
370,508
|
|
Freight billed to
customers
|
1,695
|
|
|
1,423
|
|
Total
revenues
|
397,142
|
|
|
371,931
|
|
Cost of
sales
|
316,979
|
|
|
299,341
|
|
Gross
profit
|
80,163
|
|
|
72,590
|
|
Selling, general and
administrative expenses
|
65,060
|
|
|
67,415
|
|
Income from
operations
|
15,103
|
|
|
5,175
|
|
Other income
(expense)
|
473
|
|
|
(3,638)
|
|
Earnings before
interest and income taxes
|
15,576
|
|
|
1,537
|
|
Interest
expense
|
10,540
|
|
|
10,005
|
|
Income (loss) before
income taxes
|
5,036
|
|
|
(8,468)
|
|
Provision (benefit)
for income taxes
|
4,009
|
|
|
(1,066)
|
|
Net income
(loss)
|
$
|
1,027
|
|
|
$
|
(7,402)
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
|
0.05
|
|
|
$
|
(0.34)
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
(0.34)
|
|
Dividends declared
per share
|
$
|
0.1175
|
|
|
$
|
0.2350
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Basic
|
22,131
|
|
|
21,984
|
|
Diluted
|
22,167
|
|
|
21,984
|
|
|
|
|
|
______________________
|
(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)
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
(unaudited)
|
|
|
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
19,818
|
|
|
$
|
24,696
|
|
Accounts receivable —
net
|
100,948
|
|
|
89,997
|
|
Inventories —
net
|
200,818
|
|
|
187,886
|
|
Prepaid and other
current assets
|
18,406
|
|
|
12,550
|
|
Total current
assets
|
339,990
|
|
|
315,129
|
|
Pension
asset
|
3,638
|
|
|
2,939
|
|
Purchased intangible
assets — net
|
13,967
|
|
|
14,565
|
|
Goodwill
|
84,412
|
|
|
84,412
|
|
Deferred income
taxes
|
24,585
|
|
|
24,892
|
|
Other
assets
|
10,398
|
|
|
9,627
|
|
Property, plant and
equipment — net
|
264,206
|
|
|
265,675
|
|
Total
assets
|
$
|
741,196
|
|
|
$
|
717,239
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY:
|
|
|
|
Accounts
payable
|
$
|
80,686
|
|
|
$
|
78,346
|
|
Salaries and
wages
|
23,515
|
|
|
27,409
|
|
Accrued
liabilities
|
50,465
|
|
|
43,223
|
|
Accrued income
taxes
|
3,976
|
|
|
1,862
|
|
Pension liability
(current portion)
|
2,172
|
|
|
2,185
|
|
Non-pension
post-retirement benefits (current portion)
|
4,178
|
|
|
4,185
|
|
Derivative
liability
|
—
|
|
|
697
|
|
Long-term debt due
within one year
|
6,085
|
|
|
7,485
|
|
Total current
liabilities
|
171,077
|
|
|
165,392
|
|
Long-term
debt
|
397,626
|
|
|
376,905
|
|
Pension
liability
|
40,303
|
|
|
43,555
|
|
Non-pension
post-retirement benefits
|
49,152
|
|
|
49,758
|
|
Deferred income
taxes
|
1,802
|
|
|
1,850
|
|
Other long-term
liabilities
|
12,114
|
|
|
12,885
|
|
Total
liabilities
|
672,074
|
|
|
650,345
|
|
|
|
|
|
Common stock and
capital in excess of par value
|
334,510
|
|
|
333,231
|
|
Retained
deficit
|
(162,458)
|
|
|
(161,165)
|
|
Accumulated other
comprehensive loss
|
(102,930)
|
|
|
(105,172)
|
|
Total shareholders'
equity
|
69,122
|
|
|
66,894
|
|
Total liabilities and
shareholders' equity
|
$
|
741,196
|
|
|
$
|
717,239
|
|
Libbey Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands) (unaudited)
|
|
|
Six months ended
June 30,
|
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
Net income
(loss)
|
$
|
1,027
|
|
|
$
|
(7,402)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
23,119
|
|
|
22,383
|
|
Loss on asset sales
and disposals
|
232
|
|
|
54
|
|
Change in accounts
receivable
|
(11,477)
|
|
|
(2,538)
|
|
Change in
inventories
|
(13,956)
|
|
|
(7,182)
|
|
Change in accounts
payable
|
919
|
|
|
(6,344)
|
|
Accrued interest and
amortization of discounts and finance fees
|
449
|
|
|
713
|
|
Pension &
non-pension post-retirement benefits, net
|
176
|
|
|
2,982
|
|
Accrued liabilities
& prepaid expenses
|
1,215
|
|
|
9,442
|
|
Income
taxes
|
(1,698)
|
|
|
(3,619)
|
|
Share-based
compensation expense
|
1,456
|
|
|
2,148
|
|
Other operating
activities
|
(662)
|
|
|
(728)
|
|
Net cash provided by
operating activities
|
800
|
|
|
9,909
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Additions to
property, plant and equipment
|
(21,349)
|
|
|
(27,048)
|
|
Net cash used in
investing activities
|
(21,349)
|
|
|
(27,048)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Borrowings on
ABL credit facility
|
51,131
|
|
|
3,277
|
|
Repayments on ABL
credit facility
|
(28,631)
|
|
|
(3,277)
|
|
Other
repayments
|
(1,383)
|
|
|
(169)
|
|
Repayments on Term
Loan B
|
(2,200)
|
|
|
(12,200)
|
|
Stock options
exercised
|
—
|
|
|
466
|
|
Taxes paid on
distribution of equity awards
|
(214)
|
|
|
(601)
|
|
Dividends
|
(2,595)
|
|
|
(5,169)
|
|
Other financing
activities
|
—
|
|
|
888
|
|
Net cash provided by
(used in) financing activities
|
16,108
|
|
|
(16,785)
|
|
|
|
|
|
Effect of exchange
rate fluctuations on cash
|
(437)
|
|
|
1,080
|
|
Decrease in
cash
|
(4,878)
|
|
|
(32,844)
|
|
|
|
|
|
Cash & cash
equivalents at beginning of period
|
24,696
|
|
|
61,011
|
|
Cash & cash
equivalents at end of period
|
$
|
19,818
|
|
|
$
|
28,167
|
|
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 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Reported net income
(loss) (U.S. GAAP)
|
|
$
|
3,988
|
|
|
$
|
(832)
|
|
|
$
|
1,027
|
|
|
$
|
(7,402)
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
5,456
|
|
|
5,138
|
|
|
10,540
|
|
|
10,005
|
|
Provision (benefit) for income taxes
|
|
6,092
|
|
|
2,152
|
|
|
4,009
|
|
|
(1,066)
|
|
Depreciation and amortization
|
|
11,240
|
|
|
11,228
|
|
|
23,119
|
|
|
22,383
|
|
Add special items
before interest and taxes:
|
|
|
|
|
|
|
|
|
Reorganization charges (1)
|
|
—
|
|
|
2,488
|
|
|
—
|
|
|
2,488
|
|
Adjusted EBITDA
(non-GAAP)
|
|
$
|
26,776
|
|
|
$
|
20,174
|
|
|
$
|
38,695
|
|
|
$
|
26,408
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
Net income (loss)
margin (U.S. GAAP)
|
|
1.9
|
%
|
|
(0.4)
|
%
|
|
0.3
|
%
|
|
(2.0)
|
%
|
Adjusted EBITDA
margin (non-GAAP)
|
|
12.5
|
%
|
|
10.2
|
%
|
|
9.8
|
%
|
|
7.1
|
%
|
___________
|
|
(1) 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,
|
|
|
2018
|
|
2017
|
Net cash provided by
operating activities (U.S. GAAP)
|
|
$
|
800
|
|
|
$
|
9,909
|
|
Net cash used in
investing activities (U.S. GAAP)
|
|
(21,349)
|
|
|
(27,048)
|
|
Free Cash Flow
(non-GAAP)
|
|
$
|
(20,549)
|
|
|
$
|
(17,139)
|
|
|
|
|
|
|
Table
3
|
|
|
|
|
|
|
Reconciliation
to Trade Working Capital
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
Accounts receivable —
net
|
|
$
|
100,948
|
|
|
$
|
89,997
|
|
|
$
|
88,969
|
|
Inventories —
net
|
|
200,818
|
|
|
187,886
|
|
|
180,066
|
|
Less: Accounts
payable
|
|
80,686
|
|
|
78,346
|
|
|
66,636
|
|
Trade Working Capital
(non-GAAP)
|
|
$
|
221,080
|
|
|
$
|
199,537
|
|
|
$
|
202,399
|
|
Table
4
|
|
|
|
|
|
|
|
|
Summary
Business Segment Information
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
(unaudited)
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
Net
Sales:
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
U.S. & Canada
(1)
|
|
$
|
128,474
|
|
|
$
|
121,871
|
|
|
$
|
236,415
|
|
|
$
|
231,200
|
|
Latin America
(2)
|
|
40,290
|
|
|
36,503
|
|
|
74,623
|
|
|
67,225
|
|
EMEA
(3)
|
|
38,175
|
|
|
31,054
|
|
|
70,423
|
|
|
56,385
|
|
Other
(4)
|
|
6,595
|
|
|
8,086
|
|
|
13,986
|
|
|
15,698
|
|
Consolidated
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
|
|
|
|
|
|
|
|
|
Segment Earnings
Before Interest & Taxes (Segment EBIT) (5)
:
|
|
|
|
|
|
|
|
|
U.S. & Canada
(1)
|
|
$
|
13,358
|
|
|
$
|
15,045
|
|
|
$
|
18,082
|
|
|
$
|
22,546
|
|
Latin America
(2)
|
|
7,433
|
|
|
1,907
|
|
|
9,583
|
|
|
(1,172)
|
|
EMEA
(3)
|
|
2,621
|
|
|
(2,057)
|
|
|
3,626
|
|
|
(2,894)
|
|
Other
(4)
|
|
660
|
|
|
(854)
|
|
|
(469)
|
|
|
(2,069)
|
|
Segment
EBIT
|
|
$
|
24,072
|
|
|
$
|
14,041
|
|
|
$
|
30,822
|
|
|
$
|
16,411
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment EBIT to Net Income (Loss):
|
|
|
|
|
|
|
|
|
Segment
EBIT
|
|
$
|
24,072
|
|
|
$
|
14,041
|
|
|
$
|
30,822
|
|
|
$
|
16,411
|
|
Retained corporate
costs (6)
|
|
(8,536)
|
|
|
(5,095)
|
|
|
(15,246)
|
|
|
(12,386)
|
|
Reorganization
charges
|
|
—
|
|
|
(2,488)
|
|
|
—
|
|
|
(2,488)
|
|
Interest
expense
|
|
(5,456)
|
|
|
(5,138)
|
|
|
(10,540)
|
|
|
(10,005)
|
|
(Provision) benefit
for income taxes
|
|
(6,092)
|
|
|
(2,152)
|
|
|
(4,009)
|
|
|
1,066
|
|
Net income
(loss)
|
|
$
|
3,988
|
|
|
$
|
(832)
|
|
|
$
|
1,027
|
|
|
$
|
(7,402)
|
|
|
|
|
|
|
|
|
|
|
Depreciation &
Amortization:
|
|
|
|
|
|
|
|
|
U.S. & Canada
(1)
|
|
$
|
3,052
|
|
|
$
|
3,084
|
|
|
$
|
6,439
|
|
|
$
|
6,166
|
|
Latin America
(2)
|
|
4,494
|
|
|
4,510
|
|
|
9,204
|
|
|
8,907
|
|
EMEA
(3)
|
|
1,940
|
|
|
1,848
|
|
|
3,949
|
|
|
3,692
|
|
Other
(4)
|
|
1,309
|
|
|
1,329
|
|
|
2,623
|
|
|
2,683
|
|
Corporate
|
|
445
|
|
|
457
|
|
|
904
|
|
|
935
|
|
Consolidated
|
|
$
|
11,240
|
|
|
$
|
11,228
|
|
|
$
|
23,119
|
|
|
$
|
22,383
|
|
(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 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, 2018
|
|
Year ended
December 31, 2017
|
|
Last twelve months
ended
June 30, 2017
|
|
|
|
Reported net income
(loss) (U.S. GAAP)
|
$
|
(84,939)
|
|
|
$
|
(93,368)
|
|
|
$
|
(6,742)
|
|
Add:
|
|
|
|
|
|
Interest
expense
|
20,935
|
|
|
20,400
|
|
|
20,495
|
|
Provision (benefit) for income taxes
|
20,873
|
|
|
15,798
|
|
|
10,092
|
|
Depreciation and amortization
|
46,280
|
|
|
45,544
|
|
|
45,434
|
|
Special
items before interest and taxes
|
79,700
|
|
|
82,188
|
|
|
5,356
|
|
Adjusted EBITDA
(non-GAAP)
|
$
|
82,849
|
|
|
$
|
70,562
|
|
|
$
|
74,635
|
|
|
|
|
|
|
|
Reported debt on
balance sheet (U.S. GAAP)
|
$
|
403,711
|
|
|
$
|
384,390
|
|
|
$
|
396,381
|
|
Plus:
Unamortized discount and finance fees
|
2,874
|
|
|
3,295
|
|
|
3,840
|
|
Gross debt
|
406,585
|
|
|
387,685
|
|
|
400,221
|
|
Less:
Cash and cash equivalents
|
19,818
|
|
|
24,696
|
|
|
28,167
|
|
Debt net of
cash
|
$
|
386,767
|
|
|
$
|
362,989
|
|
|
$
|
372,054
|
|
|
|
|
|
|
|
Debt Net of Cash to
Adjusted EBITDA Ratio (non-GAAP)
|
4.7x
|
|
|
5.1 x
|
|
|
5.0 x
|
|
Table
6
|
|
|
|
2018
Outlook
|
|
|
|
Reconciliation
of Net Income (Loss) margin to Adjusted EBITDA
Margin
|
|
|
(percent of
estimated 2018 net sales)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
Outlook for the
year ended
December 31,
2018
|
Net income (loss)
margin (U.S. GAAP)
|
|
|
0.7% -
1.2%
|
Add:
|
|
|
|
Interest
expense
|
|
|
2.7%
|
Provision for income taxes
|
|
|
0.9% -
1.4%
|
Depreciation and amortization
|
|
|
5.7%
|
Special
items before interest and taxes
|
|
|
—%
|
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)
|
|
16 .0% -
16.5%
|
|
16.0 %
|
Deduct special items
in SG&A expenses:
|
|
|
|
|
Reorganization charges
|
|
—%
|
|
(0.3)%
|
Adjusted SG&A
Margin (non-GAAP)
|
|
16.0% -
16.5%
|
|
15.7%
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/libbey-inc-announces-second-quarter-results-300689171.html
SOURCE Libbey Inc.