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%
|
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content:http://www.prnewswire.com/news-releases/libbey-inc-announces-third-quarter-results-300744678.html
SOURCE Libbey Inc.