-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uiu90NgPi3mOP0Z4NAVc4+7b84CGly37IyjQDi+wUJg+GhtsiGMVG1MpYdqWWdRp oqTDmQ2FiYs4ANFi3ib8/w== 0000950152-03-009114.txt : 20031028 0000950152-03-009114.hdr.sgml : 20031028 20031028102733 ACCESSION NUMBER: 0000950152-03-009114 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031028 ITEM INFORMATION: FILED AS OF DATE: 20031028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBBEY INC CENTRAL INDEX KEY: 0000902274 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 341559357 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12084 FILM NUMBER: 03959841 BUSINESS ADDRESS: STREET 1: 300 MADISON AVE STREET 2: PO BOX 10060 CITY: TOLEDO STATE: OH ZIP: 43604 BUSINESS PHONE: 4193252100 MAIL ADDRESS: STREET 1: PO BOX 10060 CITY: TOLEDO STATE: OH ZIP: 43699-0060 8-K 1 l03718ae8vk.txt LIBBEY INC. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 28, 2003 LIBBEY INC. (Exact name of registrant as specified in its charter) Delaware 1-12084 34-1559357 (State of incorporation) (Commission File Number) (IRS Employer identification No.) 300 Madison Avenue Toledo, Ohio 43604 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (419) 325-2100 Page 1 of 2 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION - ------------------------------------------------------ The information in this Item is furnished to, but not filed with, the Securities and Exchange Commission solely under Item 12 of Form 8-K, "Results of Operations and Financial Condition." On October 28, 2003, Libbey Inc. issued a press release announcing financial results for the quarter ended September 30, 2003. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned here unto duly authorized. LIBBEY INC. Registrant Date: October 28, 2003 By: /s/ Scott M. Sellick -------------------- ------------------------------------- Scott M. Sellick Vice President, Chief Financial Officer (Principal Accounting Officer) Page 2 of 2 EXHIBIT INDEX Exhibit No. Description Page No. - ----------- ----------- -------- 99.1 Text of press release dated October 28, 2003 E-1 EX-99.1 3 l03718aexv99w1.txt EX-99.1 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 TUESDAY, OCTOBER 28, 2003 LIBBEY INC. ANNOUNCES THIRD QUARTER DILUTED EPS OF 88 CENTS, UP 27.5 PERCENT COMPARES WITH $0.69 IN PRIOR YEAR PERIOD, CITES SALES INCREASE OF 24.6 PERCENT AND BENEFITS OF TAX ADJUSTMENT TOLEDO, OHIO, OCTOBER 28, 2003--Citing higher sales and the impact of a beneficial tax adjustment, LIBBEY INC. (NYSE: LBY) announced that its diluted earnings per share for the third quarter ended September 30, 2003, were 88 cents on sales of $129.1 million. THIRD-QUARTER RESULTS For the quarter ended September 30, 2003, sales increased 24.6 percent to $129.1 million from $103.6 million in the year-ago quarter. The increase in sales was primarily attributable to the sales of Royal Leerdam and Traex, both acquired in December 2002. Excluding these acquisitions, sales increased 4.3 percent, as sales to foodservice, retail and industrial customers were higher than the year-ago period. Glassware sales to foodservice and retail customers were up in the low to mid-single digits on a percentage basis. Sales to industrial customers increased over 20 percent as compared to the year-ago third quarter. The company recorded income from operations of $13.7 million during the quarter. This compares with income from operations of $14.4 million in the year-ago period. Factors contributing to the decline were higher natural gas costs of approximately $1.4 million and additional costs (mostly non-cash) for pension and postretirement medical benefits of almost $1.9 million. Partially offsetting these higher costs were the contributions made -MORE- Libbey, Inc. Add 1 by Traex and Royal Leerdam of $1.7 million to income from operations during the quarter. Earnings before interest and income taxes (EBIT) were $15.0 million compared with $14.1 million in the year-ago quarter, an increase of 6.2 percent. Equity earnings from Vitrocrisa, the company's joint venture in Mexico, were $1.2 million on a pretax basis, as compared with $1.0 million pretax in the third quarter of 2002 as the result of higher sales and a favorable translation gain. In the year-ago-period, the company also recorded other expense of $1.2 million, which was primarily related to a write-down in the value of other receivables. For the quarter, Libbey recorded net income of $12.0 million, or 88 cents per diluted share, compared with net income of $10.8 million, or 69 cents per diluted share, in the year-ago period. Interest expense increased $1.5 million as a result of an increase of debt to $244.9 million from $144.0 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 2,106,200 shares for $55.7 million since the year-ago period. For the third quarter of 2003, the company recorded an income tax benefit of $614,000 as a result of the adjustment of the year-to-date effective tax rate to 15 percent. The adjustment to the effective tax rate is necessary due to a planned tax restructuring whereby the undistributed earnings of the Company's joint venture in Mexico will be permanently reinvested outside of the United States, thus eliminating the need to record deferred U.S. income taxes on those undistributed earnings. During the third quarter of 2002, a reduction of the company's effective tax rate to 10.4 percent was primarily attributable to lower Mexican tax, the elimination of non-deductible goodwill amortization, and an adjustment to estimated U.S. income tax accruals. As detailed on the attached Table 1, net income per diluted share excluding tax adjustments was $0.58 for the third quarter of 2003, as compared with $0.51 for the third quarter of 2002. NINE-MONTH RESULTS For the nine months ended September 30, 2003, sales increased 16.7 percent to $369.3 million from $316.4 million in the year-ago period. The increase in sales was attributable to the Royal Leerdam and Traex acquisitions and strong third quarter sales to glassware customers. Excluding these acquisitions, sales declined 1.5 percent. Income from operations was $32.0 million compared with $41.4 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 over $5 million and additional costs (mostly non-cash) for pension and postretirement medical costs of $4.1 million. Earnings before interest and income taxes (EBIT) were $35.6 million, an increase of $4.0 million or 12.7 percent, compared with $31.6 million in the prior nine-month period. The prior period included $13.6 million of expenses related to an abandoned acquisition. Equity earnings from Vitrocrisa were $3.0 million on a pretax basis as compared with $5.2 million pretax in the year-ago period as the result of higher natural gas costs and lower activity levels this period. Interest expense increased $3.7 million primarily as the result of higher debt, and the effective tax rate declined to 15.0 percent from 22.9 percent as the -MORE- Libbey, Inc. Add 2 result of the tax restructuring discussed above. Net income was $21.9 million, or $1.59 per diluted share, compared with $19.6 million, or $1.26 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. WORKING CAPITAL Trade working capital, defined as inventories and accounts receivable less accounts payable, increased compared with the prior year period and as compared with year-end 2002. Total inventories increased $19.6 million from year end to $129.2 million, primarily as a result of seasonal demands. Inventories are expected to decrease by more than $10 million before the end of the year. OUTLOOK FOR FOURTH QUARTER OF 2003 John F. Meier, chairman and chief executive officer, commenting on the company's outlook for the remainder of 2003 said, "We are pleased with the strong finish we saw in the third quarter. Generally, we expect sales growth to continue in the fourth quarter of the year as economic conditions improve slightly. New products should drive this 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 $510 and $515 million and with the continuing impact of higher natural gas costs we now see diluted earnings per share to be in the range of $0.51 to $0.56 for the fourth quarter and $2.10 to $2.15 for the year ending December 31, 2003. This compares to $1.82 in 2002, which included the previously mentioned tax restructuring and $13.6 million in expenses related to an abandoned acquisition." WEBCAST INFORMATION Libbey will hold a conference call for investors on Tuesday, October 28, 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/ajwz390360102gf12.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. -MORE- Libbey, Inc. Add 3 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-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- In accordance with the SEC's Regulation G, the following table provides non-GAAP measures used in the earnings release and the reconciliation to the most closely related Generally Accepted Accounting Principles (GAAP) measure. Management believes this provides investors with a more complete understanding of underlying results in the company's core business. TABLE 1 RECONCILIATION OF NON-GAAP MEASURES FOR INCOME TAXES (Dollars in thousands, except per-share amounts)
Three months ended September 30, 2003 2002 ---------- ---------- Reported net income $ 12,018 $ 10,780 Tax adjustment 4,127 2,822 - ------------------------------------------------------------------------------------------------------ Net income excluding tax adjustment $ 7,891 $ 7,958 ====================================================================================================== Basic earnings per share: Reported net income $ 0.89 $ 0.70 Tax adjustment 0.30 0.18 - ------------------------------------------------------------------------------------------------------ Net income per share excluding tax adjustment $ 0.59 $ 0.52 ====================================================================================================== Diluted earnings per share: Reported net income $ 0.88 $ 0.69 Tax adjustment 0.30 0.18 - ------------------------------------------------------------------------------------------------------ Net income per diluted share excluding tax adjustment $ 0.58 $ 0.51 ====================================================================================================== Nine months ended September 30, 2003 2002 ---------- ---------- Reported net income $ 21,929 $ 19,632 Tax adjustment 4,127 2,822 - ------------------------------------------------------------------------------------------------------- Net income excluding tax adjustment $ 17,802 $ 16,810 ======================================================================================================= Basic earnings per share: Reported net income $ 1.59 $ 1.28 Tax adjustment 0.30 0.18 - ------------------------------------------------------------------------------------------------------- Net income per share excluding tax adjustment $ 1.29 $ 1.10 ======================================================================================================= Diluted earnings per share: Reported net income $ 1.59 $ 1.26 Tax adjustment 0.30 0.18 - ------------------------------------------------------------------------------------------------------- Net income per diluted share excluding tax adjustment $ 1.29 $ 1.08 =======================================================================================================
In accordance with the SEC's Regulation G, the following table provides non-GAAP measures used in the earnings release and the reconciliation to the most closely related Generally Accepted Accounting Principles (GAAP) measure. Management believes this provides investors with a more complete understanding of underlying results in the company's core business. TABLE 2 RECONCILIATION OF NON-GAAP MEASURES FOR ABANDONED ACQUISITION (Dollars in thousands, except per-share amounts)
Nine months ended September 30, 2003 2002 ---------- ---------- Reported net income $ 21,929 $ 19,632 Expenses associated with abandoned acquisition - 13,653 Less tax effect - 4,915 - ---------------------------------------------------------------------------------------------------------------------------------- Net income excluding expenses associated with abandoned acquisition $ 21,929 $ 28,370 ================================================================================================================================== Basic earnings per share: Reported net income $ 1.59 $ 1.28 Expenses associated with abandoned acquisition, net of related tax effects - 0.56 - ---------------------------------------------------------------------------------------------------------------------------------- Net income per share excluding expenses associated with abandoned acquisition $ 1.59 $ 1.84 ================================================================================================================================== Diluted earnings per share: Reported net income $ 1.59 $ 1.26 Expenses associated with abandoned acquisition, net of related tax effects - 0.56 - ---------------------------------------------------------------------------------------------------------------------------------- Net income per diluted share excluding expenses associated with abandoned acquisition $ 1.59 $ 1.82 ==================================================================================================================================
LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per-share amounts)
THREE MONTHS ENDED Percent September 30, 2003 September 30, 2002 Change ------------------ ------------------ ------ Net sales $129,126 $103,607 24.6% Freight billed to customers 477 344 Royalties and net technical assistance 832 567 -------------------- -------------------- Total revenues 130,435 104,518 24.8% Cost of sales 100,996 74,883 34.9% Selling, general and administrative expenses 15,758 15,243 3.4% -------------------- -------------------- Income from operations 13,681 14,392 -4.9% Equity earnings - pretax 1,172 982 Expenses related to abandoned acquisition - (27) Other income (expense)--net 161 (1,205) -------------------- -------------------- Earnings before interest and income taxes 15,014 14,142 6.2% Interest expense--net 3,610 2,113 -------------------- -------------------- Income before income taxes 11,404 12,029 -5.2% Provision for income taxes (614) 1,249 -------------------- -------------------- Net income $ 12,018 $ 10,780 11.5% ==================== ==================== Net income per share: Basic $0.89 $0.70 ==================== ==================== Diluted $0.88 $0.69 ==================== ==================== Weighted average shares: Outstanding 13,574 15,393 ==================== ==================== Diluted 13,618 15,569 ==================== ====================
NINE MONTHS ENDED Percent September 30, 2003 September 30, 2002 Change ------------------ ------------------ ------ Net sales $369,283 $316,362 16.7% Freight billed to customers 1,440 1,196 Royalties and net technical assistance 2,222 2,104 -------------------- -------------------- Total revenues 372,945 319,662 16.7% Cost of sales 290,860 235,390 23.6% Selling, general and administrative expenses 50,038 42,860 16.7% -------------------- -------------------- Income from operations 32,047 41,412 -22.6% Equity earnings--pretax 3,019 5,152 Expenses related to abandoned acquisition - (13,653) Other income (expense)--net 497 (1,365) -------------------- -------------------- Earnings before interest and income taxes 35,563 31,546 12.7% Interest expense--net 9,762 6,077 -------------------- -------------------- Income before income taxes 25,801 25,469 1.3% Provision for income taxes 3,872 5,837 -------------------- -------------------- Net income $ 21,929 $ 19,632 11.7% ==================== ==================== Net income per share: Basic $1.59 $1.28 ==================== ==================== Diluted $1.59 $1.26 ==================== ==================== Weighted average shares: Outstanding 13,779 15,385 ==================== ==================== Diluted 13,799 15,604 ==================== ====================
LIBBEY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
September 30, 2003 December 31, 2002 September 30, 2002 ------------------ ----------------- ------------------ ASSETS Cash $ 3,092 $ 1,683 $ 5,311 Accounts receivable 63,130 49,944 48,523 Inventories 129,236 109,634 103,894 Other current assets 14,637 13,487 11,540 ----------------------- ----------------------- ----------------------- Total current assets 210,095 174,748 169,268 Investments 85,832 87,847 85,538 Other assets 40,256 39,016 52,817 Goodwill 60,768 59,795 43,282 Net property, plant and equipment 162,408 163,121 122,634 ----------------------- ----------------------- ----------------------- Total assets $559,359 $524,527 $473,539 ======================= ======================= ======================= LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable $ 9,997 $ 2,660 $ 3,425 Accounts payable 35,852 31,633 26,686 Accrued liabilities 33,302 39,687 26,120 Other current liabilities 17,654 20,168 16,404 Long-term debt due within one year 115 115 115 ----------------------- ----------------------- ----------------------- Total current liabilities 96,920 94,263 72,750 Long-term debt 234,830 188,403 140,432 Deferred taxes and other liabilities 24,294 25,795 36,608 Pension liability 29,024 28,655 - Nonpension retirement benefits 47,357 47,193 47,795 Total shareholders' equity 126,934 140,218 175,954 ----------------------- ----------------------- ----------------------- Total liabilities and shareholders' equity $559,359 $524,527 $473,539 ======================= ======================= =======================
LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in thousands)
NINE MONTHS ENDED September 30, 2003 September 30, 2002 ------------------ ------------------ Operating activities Net income $ 21,929 $ 19,632 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 18,900 13,023 Amortization 1,388 1,447 Loss (gain) on sale of land 148 (376) Other non-cash charges (3,035) 104 Net equity earnings (2,360) (7,465) Net change in components of working capital and other assets (35,516) (7,257) -------------------- -------------------- Net cash provided by operating activities 1,454 19,108 Investing activities Additions to property, plant and equipment (15,721) (10,712) Dividends received from equity investments 4,900 4,659 Other 743 3,549 -------------------- -------------------- Net cash used in investing activities (10,078) (2,504) Financing activities Net bank credit facility activity (58,699) (5,000) Senior notes 100,000 - Payment of financing fees (663) (815) Other net borrowings 7,247 940 Stock options exercised 5,205 3,269 Treasury shares purchased (38,920) (10,084) Dividends (4,146) (3,463) -------------------- -------------------- Net cash provided by (used in) financing activities 10,024 (15,153) Effect of exchange rate fluctuations on cash 9 - -------------------- -------------------- Increase in cash 1,409 1,451 Cash at beginning of year 1,683 3,860 -------------------- -------------------- Cash at end of period $ 3,092 $ 5,311 ==================== ====================
LIBBEY INC. CONDENSED CONSOLIDATED JOINT VENTURE INFORMATION (Dollars in thousands) Income Statement Information
Three months ended September 30, 2003 2002 - --------------------------------------------------------------------------------------------------------- Net sales $ 48,884 $ 46,680 Other revenue 481 561 --------------------- ---------------------- Total revenue 49,365 47,241 Cost of sales 42,188 39,358 --------------------- ---------------------- Gross profit 7,177 7,883 Operating expenses 5,371 5,303 --------------------- ---------------------- Income from operations 1,806 2,580 Other (loss) income (202) 118 --------------------- ---------------------- Earnings before finance costs and taxes 1,604 2,698 Interest expense 1,302 1,516 Translation gain 2,090 822 --------------------- ---------------------- Earnings before income taxes 2,392 2,004 Income taxes 592 (7,762) --------------------- ---------------------- Net income $ 1,800 $ 9,766 ========================================================================================================= Nine months ended September 30, 2003 2002 - --------------------------------------------------------------------------------------------------------- Net sales $134,586 $142,986 Other revenue 1,326 1,662 --------------------- ---------------------- Total revenue 135,912 144,648 Cost of sales 111,117 116,055 --------------------- ---------------------- Gross profit 24,795 28,593 Operating expenses 16,190 16,233 --------------------- ---------------------- Income from operations 8,605 12,360 Other (loss) income (410) 22 --------------------- ---------------------- Earnings before finance costs and taxes 8,195 12,382 Interest expense 4,045 4,474 Translation gain 2,010 2,606 --------------------- ---------------------- Earnings before income taxes 6,160 10,514 Income taxes 1,343 (4,719) --------------------- ---------------------- Net income $ 4,817 $ 15,233 =========================================================================================================
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. -----END PRIVACY-ENHANCED MESSAGE-----