Condensed Consolidated Guarantor Financial Statements

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Guarantor Financial Statements

Condensed Consolidated Guarantor Financial Statements

Libbey Glass is a direct, 100 percent owned subsidiary of Libbey Inc. and is the issuer of the Senior Secured Notes. The obligations of Libbey Glass under the Senior Secured Notes are fully and unconditionally and jointly and severally guaranteed by Libbey Inc. and by certain indirect, 100 percent owned domestic subsidiaries of Libbey Inc., as described below. All are related parties that are included in the Condensed Consolidated Financial Statements for the three months and six months ended June 30, 2013 and June 30, 2012.

At June 30, 2013, December 31, 2012 and June 30, 2012, Libbey Inc.’s indirect, 100 percent owned domestic subsidiaries were Syracuse China Company, World Tableware Inc., LGA4 Corp., LGA3 Corp., The Drummond Glass Company, LGC Corp., Libbey.com LLC, LGFS Inc., and LGAC LLC (collectively, Subsidiary Guarantors). The following tables contain Condensed Consolidating Financial Statements of (a) the parent, Libbey Inc., (b) the issuer, Libbey Glass, (c) the Subsidiary Guarantors, (d) the indirect subsidiaries of Libbey Inc. that are not Subsidiary Guarantors (collectively, Non-Guarantor Subsidiaries), (e) the consolidating elimination entries, and (f) the consolidated totals.

Libbey Inc.

Condensed Consolidating Statements of Comprehensive Income (Loss)

(unaudited)

	Three months ended June 30, 2013
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	101,406		$	22,056		$	99,492	$	(13,050	)	$	209,904
Freight billed to customers	—		132			194			445		—			771
Total revenues	—		101,538			22,250			99,937		(13,050		)	210,675
Cost of sales	—		66,605			16,140			83,518		(13,050		)	153,213
Gross profit	—		34,933			6,110			16,419		—			57,462
Selling, general and administrative expenses	—		18,188			2,484			8,963		—			29,635
Special charges	—		(85		)	—			—		—			(85		)
Income (loss) from operations	—		16,830			3,626			7,456		—			27,912
Other income (expense)	—		(2,506		)	(3		)	42		—			(2,467		)
Earnings (loss) before interest and income taxes	—		14,324			3,623			7,498		—			25,445
Interest expense	—		5,996			—			2,130		—			8,126
Income (loss) before income taxes	—		8,328			3,623			5,368		—			17,319
Provision (benefit) for income taxes	—		1,519			147			3,217		—			4,883
Net income (loss)	—		6,809			3,476			2,151		—			12,436
Equity in net income (loss) of subsidiaries	12,436		5,627			—			—		(18,063		)	—
Net income (loss)	$	12,436	$	12,436		$	3,476		$	2,151	$	(18,063	)	$	12,436
Comprehensive income (loss)	$	20,674	$	20,674		$	3,303		$	4,352	$	(28,329	)	$	20,674

	Three months ended June 30, 2012
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	109,697		$	19,765		$	96,850	$	(17,065	)	$	209,247
Freight billed to customers	—			130			191			438		—			759
Total revenues	—			109,827			19,956			97,288		(17,065		)	210,006
Cost of sales	—			75,608			14,342			80,774		(17,065		)	153,659
Gross profit	—			34,219			5,614			16,514		—			56,347
Selling, general and administrative expenses	—			17,482			1,886			8,010		—			27,378
Special charges	—			—			—			—		—			—
Income (loss) from operations	—			16,737			3,728			8,504		—			28,969
Other income (expense)	—			(31,259		)	(19		)	630		—			(30,648		)
Earnings (loss) before interest and income taxes	—			(14,522		)	3,709			9,134		—			(1,679		)
Interest expense	—			7,681			—			2,276		—			9,957
Income (loss) before income taxes	—			(22,203		)	3,709			6,858		—			(11,636		)
Provision (benefit) for income taxes	—			(2,661		)	131			1,037		—			(1,493		)
Net income (loss)	—			(19,542		)	3,578			5,821		—			(10,143		)
Equity in net income (loss) of subsidiaries	(10,143		)	9,399			—			—		744			—
Net income (loss)	$	(10,143	)	$	(10,143	)	$	3,578		$	5,821	$	744		$	(10,143	)
Comprehensive income (loss)	$	(9,620	)	$	(9,620	)	$	3,818		$	832	$	4,970		$	(9,620	)

Libbey Inc.

Condensed Consolidating Statements of Comprehensive Income (Loss)

(unaudited)

	Six months ended June 30, 2013
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—	$	188,336		$	40,416		$	188,871		$	(24,243	)	$	393,380
Freight billed to customers	—		231			428			864			—			1,523
Total revenues	—		188,567			40,844			189,735			(24,243		)	394,903
Cost of sales	—		129,205			30,500			159,747			(24,243		)	295,209
Gross profit	—		59,362			10,344			29,988			—			99,694
Selling, general and administrative expenses	—		33,245			5,153			17,634			—			56,032
Special charges	—		4,229			—			—			—			4,229
Income (loss) from operations	—		21,888			5,191			12,354			—			39,433
Other income (expense)	—		(2,507		)	(12		)	(383		)	—			(2,902		)
Earnings (loss) before interest and income taxes	—		19,381			5,179			11,971			—			36,531
Interest expense	—		12,416			—			4,145			—			16,561
Income (loss) before income taxes	—		6,965			5,179			7,826			—			19,970
Provision (benefit) for income taxes	—		700			149			4,696			—			5,545
Net income (loss)	—		6,265			5,030			3,130			—			14,425
Equity in net income (loss) of subsidiaries	14,425		8,160			—			—			(22,585		)	—
Net income (loss)	$	14,425	$	14,425		$	5,030		$	3,130		$	(22,585	)	$	14,425
Comprehensive income (loss)	$	23,454	$	23,454		$	4,999		$	2,800		$	(31,253	)	$	23,454

	Six months ended June 30, 2012
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	203,177		$	37,210		$	190,009		$	(33,320	)	$	397,076
Freight billed to customers	—			296			374			797			—			1,467
Total revenues	—			203,473			37,584			190,806			(33,320		)	398,543
Cost of sales	—			149,919			27,355			155,186			(33,320		)	299,140
Gross profit	—			53,554			10,229			35,620			—			99,403
Selling, general and administrative expenses	—			35,424			3,402			16,678			—			55,504
Special charges	—			—			—			—			—			—
Income (loss) from operations	—			18,130			6,827			18,942			—			43,899
Other income (expense)	—			(30,962		)	(7		)	(270		)	—			(31,239		)
Earnings (loss) before interest and income taxes	—			(12,832		)	6,820			18,672			—			12,660
Interest expense	—			15,874			—			4,491			—			20,365
Income (loss) before income taxes	—			(28,706		)	6,820			14,181			—			(7,705		)
Provision (benefit) for income taxes	—			(2,436		)	131			4,102			—			1,797
Net income (loss)	—			(26,270		)	6,689			10,079			—			(9,502		)
Equity in net income (loss) of subsidiaries	(9,502		)	16,768			—			—			(7,266		)	—
Net income (loss)	$	(9,502	)	$	(9,502	)	$	6,689		$	10,079		$	(7,266	)	$	(9,502	)
Comprehensive income (loss)	$	(3,867	)	$	(3,867	)	$	7,053		$	7,876		$	(11,062	)	$	(3,867	)

Libbey Inc.

Condensed Consolidating Balance Sheet

	June 30, 2013 (unaudited)
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	(3,568	)	$	55	$	14,057		$	—		$	10,544
Accounts receivable — net	—		38,630			5,607		47,245			—			91,482
Inventories — net	—		65,687			21,299		88,925			—			175,911
Other current assets	—		19,420			1,212		16,732			(17,364		)	20,000
Total current assets	—		120,169			28,173		166,959			(17,364		)	297,937
Other non-current assets	—		18,203			—		20,645			(4,190		)	34,658
Investments in and advances to subsidiaries	52,882		394,048			195,294		(44,054		)	(598,170		)	—
Goodwill and purchased intangible assets — net	—		27,423			12,347		147,015			—			186,785
Total other assets	52,882		439,674			207,641		123,606			(602,360		)	221,443
Property, plant and equipment — net	—		65,801			296		187,703			—			253,800
Total assets	$	52,882	$	625,644		$	236,110	$	478,268		$	(619,724	)	$	773,180
Accounts payable	$	—	$	11,939		$	2,798	$	44,572		$	—		$	59,309
Accrued and other current liabilities	—		50,911			21,482		27,653			(16,915		)	83,131
Notes payable and long-term debt due within one year	—		228			—		14,014			—			14,242
Total current liabilities	—		63,078			24,280		86,239			(16,915		)	156,682
Long-term debt	—		414,264			—		1,242			—			415,506
Other long-term liabilities	—		92,289			9,638		50,373			(4,190		)	148,110
Total liabilities	—		569,631			33,918		137,854			(21,105		)	720,298
Total shareholders’ equity (deficit)	52,882		56,013			202,192		340,414			(598,619		)	52,882
Total liabilities and shareholders’ equity (deficit)	$	52,882	$	625,644		$	236,110	$	478,268		$	(619,724	)	$	773,180

Libbey Inc.

Condensed Consolidating Balance Sheet

	December 31, 2012
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	43,558	$	70	$	23,580		$	—		$	67,208
Accounts receivable — net	—		33,987		3,560		43,303			—			80,850
Inventories — net	—		52,627		18,477		86,445			—			157,549
Other current assets	—		17,931		810		10,446			(16,190		)	12,997
Total current assets	—		148,103		22,917		163,774			(16,190		)	318,604
Other non-current assets	—		22,373		54		20,387			(4,190		)	38,624
Investments in and advances to subsidiaries	24,476		384,414		194,316		(35,962		)	(567,244		)	—
Goodwill and purchased intangible assets — net	—		26,833		12,347		147,614			—			186,794
Total other assets	24,476		433,620		206,717		132,039			(571,434		)	225,418
Property, plant and equipment — net	—		72,780		298		185,076			—			258,154
Total assets	$	24,476	$	654,503	$	229,932	$	480,889		$	(587,624	)	$	802,176
Accounts payable	$	—	$	15,339	$	2,854	$	47,519		$	—		$	65,712
Accrued and other current liabilities	—		63,674		20,194		27,857			(16,190		)	95,535
Notes payable and long-term debt due within one year	—		221		—		4,362			—			4,583
Total current liabilities	—		79,234		23,048		79,738			(16,190		)	165,830
Long-term debt	—		451,090		—		10,794			—			461,884
Other long-term liabilities	—		94,434		9,691		50,051			(4,190		)	149,986
Total liabilities	—		624,758		32,739		140,583			(20,380		)	777,700
Total shareholders’ equity (deficit)	24,476		29,745		197,193		340,306			(567,244		)	24,476
Total liabilities and shareholders’ equity (deficit)	$	24,476	$	654,503	$	229,932	$	480,889		$	(587,624	)	$	802,176

Libbey Inc.

Condensed Consolidating Statements of Cash Flows

(unaudited)

	Three months ended June 30, 2013
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	12,436		$	12,436		$	3,476		$	2,151		$	(18,063	)	$	12,436
Depreciation and amortization	—			4,611			16			6,996			—			11,623
Other operating activities	(12,436		)	(13,590		)	(3,499		)	(3,212		)	18,063			(14,674		)
Net cash provided by (used in) operating activities	—			3,457			(7		)	5,935			—			9,385
Additions to property, plant & equipment	—			(2,065		)	(31		)	(8,793		)	—			(10,889		)
Other investing activities	—			—			—			4			—			4
Net cash (used in) investing activities	—			(2,065		)	(31		)	(8,789		)	—			(10,885		)
Net borrowings (repayments)	—			(35,255		)	—			—			—			(35,255		)
Other financing activities	—			1,161			—			—			—			1,161
Net cash provided by (used in) financing activities	—			(34,094		)	—			—			—			(34,094		)
Exchange effect on cash	—			—			—			189			—			189
Increase (decrease) in cash	—			(32,702		)	(38		)	(2,665		)	—			(35,405		)
Cash at beginning of period	—			29,134			93			16,722			—			45,949
Cash at end of period	$	—		$	(3,568	)	$	55		$	14,057		$	—		$	10,544

	Three months ended June 30, 2012
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(10,143	)	$	(10,143	)	$	3,578		$	5,821		$	744		$	(10,143	)
Depreciation and amortization	—			3,469			18			6,801			—			10,288
Other operating activities	10,143			(56,501		)	(3,687		)	(1,777		)	(744		)	(52,566		)
Net cash provided by (used in) operating activities	—			(63,175		)	(91		)	10,845			—			(52,421		)
Additions to property, plant & equipment	—			(1,133		)	—			(4,253		)	—			(5,386		)
Other investing activities	—			—			—			239			—			239
Net cash (used in) investing activities	—			(1,133		)	—			(4,014		)	—			(5,147		)
Net borrowings (repayments)	—			89,949			—			(9,517		)	—			80,432
Other financing activities	—			(35,744		)	—			—			—			(35,744		)
Net cash provided by (used in) financing activities	—			54,205			—			(9,517		)	—			44,688
Exchange effect on cash	—			—			—			(361		)	—			(361		)
Increase (decrease) in cash	—			(10,103		)	(91		)	(3,047		)	—			(13,241		)
Cash at beginning of period	—			9,892			157			22,769			—			32,818
Cash at end of period	$	—		$	(211	)	$	66		$	19,722		$	—		$	19,577

Libbey Inc.

Condensed Consolidating Statements of Cash Flows

(unaudited)

	Six months ended June 30, 2013
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	14,425		$	14,425		$	5,030		$	3,130		$	(22,585	)	$	14,425
Depreciation and amortization	—			8,725			33			13,639			—			22,397
Other operating activities	(14,425		)	(32,597		)	(5,047		)	(10,633		)	22,585			(40,117		)
Net cash provided by (used in) operating activities	—			(9,447		)	16			6,136			—			(3,295		)
Additions to property, plant & equipment	—			(4,069		)	(31		)	(15,671		)	—			(19,771		)
Other investing activities	—			1			—			7			—			8
Net cash (used in) investing activities	—			(4,068		)	(31		)	(15,664		)	—			(19,763		)
Net borrowings (repayments)	—			(35,309		)	—			(5		)	—			(35,314		)
Other financing activities				1,698			—			—			—			1,698
Net cash provided by (used in) financing activities	—			(33,611		)	—			(5		)	—			(33,616		)
Exchange effect on cash	—			—			—			10			—			10
Increase (decrease) in cash	—			(47,126		)	(15		)	(9,523		)	—			(56,664		)
Cash at beginning of period	—			43,558			70			23,580			—			67,208
Cash at end of period	$	—		$	(3,568	)	$	55		$	14,057		$	—		$	10,544

	Six months ended June 30, 2012
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(9,502	)	$	(9,502	)	$	6,689		$	10,079		$	(7,266	)	$	(9,502	)
Depreciation and amortization	—			7,007			37			13,780			—			20,824
Other operating activities	9,502			(86,833		)	(6,815		)	(5,961		)	7,266			(82,841		)
Net cash provided by (used in) operating activities	—			(89,328		)	(89		)	17,898			—			(71,519		)
Additions to property, plant & equipment	—			(4,314		)	—			(7,518		)	—			(11,832		)
Other investing activities	—			—			—			419			—			419
Net cash (used in) investing activities	—			(4,314		)	—			(7,099		)	—			(11,413		)
Net borrowings (repayments)	—			89,898			—			(9,860		)	—			80,038
Other financing activities	—			(35,716		)	—			—			—			(35,716		)
Net cash provided by (used in) financing activities	—			54,182			—			(9,860		)	—			44,322
Exchange effect on cash	—			—			—			(104		)	—			(104		)
Increase (decrease) in cash	—			(39,460		)	(89		)	835			—			(38,714		)
Cash at beginning of period	—			39,249			155			18,887			—			58,291
Cash at end of period	$	—		$	(211	)	$	66		$	19,722		$	—		$	19,577