EX-99.1 3 l02240aexv99w1.txt EX-99.1 TEXT OF PRESS RELEASE EXHIBIT 99.1 [LIBBEY LOGO] LIBBEY INC. 300 MADISON AVE P.O. BOX 10060 TOLEDO, OH 43699 ================================================================================ N E W S R E L E A S E AT THE COMPANY: AT FRB | WEBER SHANDWICK: --------------- ------------------------- KENNETH BOERGER SUZY LYNDE VP/TREASURER ANALYST INQUIRIES (419) 325-2279 (312) 640-6772 FOR IMMEDIATE RELEASE WEDNESDAY, JULY 23, 2003 LIBBEY INC. ANNOUNCES SECOND QUARTER DILUTED EPS OF 59 CENTS; COMPARES WITH $0.31 IN PRIOR YEAR PERIOD, CITES HIGHER NATURAL GAS COSTS AND IMPACT OF SLUGGISH ECONOMY ON SALES TOLEDO, OHIO, JULY 23, 2003--Citing higher natural gas costs and the impact of a sluggish economy and the war in Iraq on sales to retail, industrial and foodservice clients, LIBBEY INC. (NYSE: LBY) announced that its diluted earnings per share for the second quarter ended June 30, 2003, were 59 cents on sales of $128.3 million. On May 1, 2003, the company announced its expectation that diluted earnings per share for the quarter would be between 60 and 70 cents. SECOND-QUARTER RESULTS For the quarter ended June 30, 2003, sales increased 12.4 percent to $128.3 million from $114.1 million in the year-ago quarter. The increase in sales was attributable to the sales of Royal Leerdam and Traex, both acquired in December 2002. Excluding these acquisitions, sales declined 4.9 percent, as sales to retail and industrial customers were lower than the year-ago period. Glassware sales to foodservice customers were up in the low single digits on a percentage basis. The company recorded income from operations of $12.8 million during the quarter. This compares with income from operations of $18.4 million in the year-ago period. Factors contributing to the decline, in addition to lower pre-acquisition sales, were higher natural gas costs of approximately $2 million, higher other operating costs in the company's glassware operations totaling approximately $0.8 million and additional costs (mostly - MORE - Libbey, Inc. Add 1 non-cash) for pension and postretirement medical benefits of almost $1 million. Traex and Royal Leerdam contributed modestly to income from operations during the quarter. Earnings before interest and income taxes (EBIT) was $15.0 million compared to $9.3 million in the year-ago quarter. The prior year period included $13.6 million of expenses related to an abandoned acquisition. Equity earnings from Vitrocrisa, the company's joint venture in Mexico, were $2.0 million on a pretax basis, as compared to $4.5 million pretax in the second quarter of 2002 as the result of lower sales and higher natural gas costs. For the quarter, Libbey recorded net income of $7.9 million, or 59 cents per diluted share, compared with net income of $4.9 million, or 31 cents per diluted share, in the year-ago period. Last year's net income included expenses associated with an abandoned acquisition. These expenses totaled $13.6 million, less a tax effect of $4.9 million, or an after tax impact of $8.7 million or $.56 per diluted share. Interest expense increased $1.5 million as a result of an increase of debt to $236.0 million from $136.2 million in the year-ago period. Debt increased after funding $62.0 million for the acquisitions of Traex and Royal Leerdam in late 2002 and the repurchase of 2,435,600 shares for $65.7 million since the year-ago period . The company's effective tax rate declined to 30.7% from 32.6% in the year-ago period as the result of lower state and local taxes and lower taxes on equity earnings. SIX-MONTH RESULTS For the six months ended June 30, 2003, sales increased 12.9 percent to $240.2 million from $212.8 million in the year-ago period. The increase in sales was attributable to the Royal Leerdam and Traex acquisitions. Excluding these acquisitions, sales declined 4.4 percent as sales declined in all channels of distribution. Income from operations was $18.4 million compared with $27.0 million in the year-ago period. In addition to the lower pre-acquisition sales, other factors that contributed to the decline included higher natural gas costs of $4.0 million, higher selling general and administrative costs of $6.7 million, and additional costs (mostly non-cash) for pension and postretirement medical costs of $2.1 million. Earnings before interest and income taxes (EBIT) were $20.5 million, an increase of $3.1 million or 18.1%, compared to $17.4 million in the prior six-month period. The prior period included $13.6 million of expenses related to an abandoned acquisition. Equity earnings from Vitrocrisa were $1.8 million on a pretax basis as compared to $4.2 million pretax in the year-ago period. Interest expense increased $2.2 million primarily as the result of higher debt and the effective tax rate declined to 31.2 percent from 34.1 percent as the result of lower state and local taxes and lower taxes on equity earnings. Net income was $9.9 million, or $0.71 per diluted share, compared with $8.9 million or $0.57 per diluted share in the year-ago period. Last year's net income included expenses associated with an abandoned acquisition. These expenses totaled $13.6 million, less a tax effect of $4.9 million, or an after tax impact of $8.7 million or $.56 per diluted share. - MORE - Libbey, Inc. Add 2 WORKING CAPITAL Trade working capital, defined as inventories and accounts receivable less accounts payable, increased compared to the prior year period and as compared to year-end 2002. Total inventories increased $13.9 million from year-end to $123.5 million, primarily as a result of seasonal demands. OUTLOOK FOR SECOND HALF OF 2003 John F. Meier, chairman and chief executive officer, commenting on the company's outlook for the second half of 2003 said, "We continue to be faced with an economy coming through a challenging period, with a recently concluded war, a tentative consumer, higher energy prices and substantially lower travel. Our indications are that the business environment will be somewhat more accommodating in the balance of 2003. Generally, we expect some growth in the second half of the year as economic conditions are forecasted to improve slightly, new products should drive solid sales performance and with this will come the benefits of higher capacity utilization, driving earnings and cash flow." He added, "We now expect full year sales to total between $515 and $520 million and diluted earnings per share to be in the range of $2.10 to $2.20. This compares to $1.82 in 2002, which included $13.6 million in expenses related to an abandoned acquisition." WEBCAST INFORMATION Libbey will hold a conference call for investors on Wednesday, July 23, 2003, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet on both www.libbey.com and www.firstcallevents.com/service/ajwz385710629gf12.html. To listen to the call, please go to the website at least 10 minutes early to register, download and install any necessary software. A replay will be available for 7 days after the conclusion of the call. The above information includes "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements only reflect 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, that actual results may differ materially from such statements, and that investors should not place undue reliance on such statements. Important factors potentially affecting performance include: increased competition from foreign suppliers endeavoring to sell glass tableware in the United States and Mexico, including the impact of lower duties for imported products; major slowdowns in the retail, travel or entertainment industries in the United States, Canada, Mexico and Western Europe, caused by terrorist attacks or otherwise; significant increases in per- - MORE - Libbey, Inc. Add 3 unit costs for natural gas, electricity, corrugated packaging, and other purchased materials; higher interest rates that increase the company's borrowing costs; protracted work stoppages related to collective bargaining agreements; increases in expenses associated with higher medical costs, reduced pension income associated with lower returns on pension investments and increased pension obligations; devaluations and other major currency fluctuations relative to the U.S. dollar that could reduce the cost-competitiveness of the company's products compared to foreign competition; the effect of high inflation in Mexico and exchange rate changes to the value of the Mexican peso and the earnings and cash flow of the company's joint venture in Mexico, Vitrocrisa, expressed under U.S. GAAP; the inability to achieve savings and profit improvements at targeted levels in the company's operations or within the intended time periods; whether the company completes any significant acquisition, and whether such acquisitions can operate profitably. Libbey Inc.: - is a leading producer of glass tableware in North America; - is a leading producer of tabletop products for the foodservice industry; - exports to more than 75 countries; and, - provides technical assistance to glass tableware manufacturers around the world. Based in Toledo, Ohio, the company operates glass tableware manufacturing plants in the United States in California, Louisiana, and Ohio and in the Netherlands. Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients. In addition, Libbey is a joint venture partner in the largest glass tableware company in Mexico. Its Syracuse China subsidiary designs, manufactures and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments in the United States. Its World Tableware subsidiary imports and sells a full-line of metal flatware and holloware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. Its Traex subsidiary, located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry, including: ware washing racks, trays, dispensers, bar supply, tabletop, food preparation items and brushes. In 2002, Libbey Inc.'s net sales totaled $433.8 million. - MORE - LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per-share amounts)
THREE MONTHS ENDED Percent June 30, 2003 June 30, 2002 Change ------------- ------------- ------ Net sales $128,254 $114,086 12.4% Freight billed to customers 529 434 Royalties and net technical assistance 640 738 -------------------- -------------------- Total revenues 129,423 115,258 12.3% Cost of sales 99,085 83,491 18.7% Selling, general and administrative expenses 17,514 13,363 31.1% -------------------- -------------------- Income from operations 12,824 18,404 -30.3% Equity earnings - pretax 1,997 4,546 Expenses related to abandoned acquisition - (13,626) Other income--net 210 22 -------------------- -------------------- Earnings before interest and income taxes 15,031 9,346 60.8% Interest expense--net (3,611) (2,081) -------------------- -------------------- Income before income taxes 11,420 7,265 57.2% Provision for income taxes 3,510 2,365 -------------------- -------------------- Net income $7,910 $4,900 61.4% ==================== ==================== Net income per share: Basic $0.59 $0.32 ==================== ==================== Diluted $0.59 $0.31 ==================== ==================== Weighted average shares: Outstanding 13,307 15,417 ==================== ==================== Diluted 13,318 15,695 ==================== ====================
SIX MONTHS ENDED Percent June 30, 2003 June 30, 2002 Change ------------- ------------- ------ Net sales $240,157 $212,755 12.9% Freight billed to customers 963 852 Royalties and net technical assistance 1,390 1,537 -------------------- -------------------- Total revenues 242,510 215,144 12.7% Cost of sales 189,864 160,507 18.3% Selling, general and administrative expenses 34,280 27,617 24.1% -------------------- -------------------- Income from operations 18,366 27,020 -32.0% Equity earnings--pretax 1,847 4,170 Expenses related to abandoned acquisition - (13,626) Other income (expense)--net 336 (160) -------------------- -------------------- Earnings before interest and income taxes 20,549 17,404 18.1% Interest expense--net (6,152) (3,964) -------------------- -------------------- Income before income taxes 14,397 13,440 7.1% Provision for income taxes 4,486 4,588 -------------------- -------------------- Net income $9,911 $8,852 12.0% ==================== ==================== Net income per share: Basic $0.71 $0.58 ==================== ==================== Diluted $0.71 $0.57 ==================== ==================== Weighted average shares: Outstanding 13,883 15,381 ==================== ==================== Diluted 13,896 15,647 ==================== ====================
LIBBEY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
June 30, 2003 December 31, 2002 June 30, 2002 ------------- ----------------- ------------- ASSETS Cash $ 5,862 $ 1,683 $ 2,340 Accounts receivable 56,535 49,944 51,954 Inventories 123,520 109,634 92,749 Other current assets 12,993 13,487 11,839 ----------------------- ----------------------- ----------------------- Total current assets 198,910 174,748 158,882 Investments 84,596 87,847 82,377 Other assets 39,754 39,016 51,037 Goodwill 61,228 59,795 43,282 Net property, plant and equipment 163,348 163,121 127,039 ----------------------- ----------------------- ----------------------- Total assets $547,836 $524,527 $462,617 ======================= ======================= ======================= LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable $ 4,808 $ 2,660 $ 1,580 Accounts payable 32,474 31,633 23,848 Accrued liabilities 45,252 39,687 30,859 Other current liabilities 16,952 20,168 11,617 Long-term debt due within one year 115 115 115 ----------------------- ----------------------- ----------------------- Total current liabilities 99,601 94,263 68,019 Long-term debt 231,052 188,403 134,461 Deferred taxes and other liabilities 23,903 25,795 35,540 Pension liability 29,910 28,655 - Nonpension postretirement benefits 47,633 47,193 48,084 Total shareholders' equity 115,737 140,218 176,513 ----------------------- ----------------------- ----------------------- Total liabilities and shareholders' equity $547,836 $524,527 $462,617 ======================= ======================= =======================
LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in thousands)
SIX MONTHS ENDED June 30, 2003 June 30, 2002 ------------- ------------- Operating activities Net income $ 9,911 $ 8,852 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 12,766 8,858 Amortization 966 990 Other non-cash charges (3,122) (619) Net equity earnings (1,479) (2,679) Net change in components of working capital and other assets (12,685) (790) ------------------ ----------------- Net cash provided by operating activities 6,357 14,612 Investing activities Additions to property, plant and equipment (10,716) (8,151) Dividends received from equity investments 4,900 4,659 Other 897 - ------------------ ----------------- Net cash used in investing activities (4,919) (3,492) Financing activities Net bank credit facility activity (61,872) (11,000) Senior notes 100,000 - Other net borrowings 2,088 (876) Payment of finance fees (663) (815) Stock options exercised 4,841 2,358 Treasury shares purchased (38,888) - Dividends (2,788) (2,307) ------------------ ----------------- Net cash provided by (used in) financing activities 2,718 (12,640) Effect of exchange rate fluctuations on cash 23 - ------------------ ----------------- Increase (decrease) in cash 4,179 (1,520) Cash at beginning of year 1,683 3,860 ------------------ ----------------- Cash at end of period $ 5,862 $ 2,340 ================== =================
LIBBEY INC. CONDENSED CONSOLIDATED JOINT VENTURE INFORMATION (Dollars in thousands) Income Statement Information
Three months ended June 30, 2003 2002 ========================================================================================= Net sales $ 47,801 $ 53,132 Other revenue 459 669 -------------------- ---------------------- Total revenue 48,260 53,801 Cost of sales 35,930 39,781 -------------------- ---------------------- Gross profit 12,330 14,020 Operating expenses 5,963 5,682 -------------------- ---------------------- Income from operations 6,367 8,338 Other loss (216) (164) -------------------- ---------------------- Earnings before finance costs and taxes 6,151 8,174 Interest expense 1,349 1,312 Translation (loss) gain (727) 2,271 -------------------- ---------------------- Earnings before income taxes 4,075 9,133 Income taxes 1,075 3,387 -------------------- ---------------------- Net income $ 3,000 $ 5,746 =========================================================================================
Six months ended June 30, 2003 2002 ========================================================================================= Net sales $ 85,703 $ 96,306 Other revenue 844 1,101 -------------------- ---------------------- Total revenue 86,547 97,407 Cost of sales 68,929 76,697 -------------------- ---------------------- Gross profit 17,618 20,710 Operating expenses 10,819 10,930 -------------------- ---------------------- Income from operations 6,799 9,780 Other loss (208) (96) -------------------- ---------------------- Earnings before finance costs and taxes 6,591 9,684 Interest expense 2,743 2,957 Translation (loss) gain (80) 1,783 -------------------- ---------------------- Earnings before income taxes 3,768 8,510 Income taxes 751 3,043 -------------------- ---------------------- Net income $ 3,017 $ 5,467 =========================================================================================
The above are summarized combined financial information for equity investments, which includes the 49% ownership in Vitrocrisa, which manufactures, markets and sells glass tableware (e.g. beverageware, plates, bowls, serveware and accessories) and industrial glassware (e.g. coffee pots, blender jars, meter covers, glass covers for cooking ware and lighting fixtures sold to original equipment manufacturers) and the 49% ownership in Crisa Industrial, L.L.C., which distributes industrial glassware in the U.S. and Canada for Vitrocrisa, for 2003 and 2002.