EX-99.1 2 l08653aexv99w1.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 FINANCIAL RELATIONS BOARD: --------------- ----------------------------- KENNETH BOERGER SUZY LYNDE VP/TREASURER ANALYST INQUIRIES (419) 325-2279 (312) 640-6772 FOR IMMEDIATE RELEASE THURSDAY, JULY 22, 2004 LIBBEY INC. ANNOUNCES SECOND QUARTER DILUTED EPS OF 68 CENTS VERSUS 59 CENTS IN PRIOR-YEAR PERIOD SALES UP 5.8 PERCENT, INCOME FROM OPERATIONS UP 25.9 PERCENT TOLEDO, OHIO, JULY 22, 2004--LIBBEY INC. (NYSE: LBY) announced that its diluted earnings per share for the second quarter ended June 30, 2004, were 68 cents on sales of $135.8 million. The Company reported increased sales, higher income from operations, and an increase of 18.4 percent in net income as compared to the prior-year period. SECOND-QUARTER RESULTS For the quarter-ended June 30, 2004, sales increased 5.8 percent to $135.8 million from $128.3 million in the year-ago quarter. The increase in sales was attributable to growth in sales to customers in the foodservice, retail and export channels of distribution. Shipments to foodservice customers of Libbey glassware, Syracuse China dinnerware, World Tableware products, and Traex products were all higher than the year-ago period. Sales to retail customers increased over 8 percent, as compared to the year-ago quarter. The Company recorded income from operations of $16.1 million during the quarter. This compares with income from operations of $12.8 million in the year-ago quarter. Factors contributing to the 25.9 percent increase were higher sales to customers, improved capacity utilization and efficiencies in the manufacturing operations. E-1 Libbey Inc. Add 2 Pretax equity earnings from Vitrocrisa, the Company's joint venture in Mexico, were $1.5 million as compared with pretax earnings of $2.0 million in the second quarter of 2003, as the result of flat sales and higher natural gas costs. Interest expense decreased $0.1 million compared with the year-ago period. The effective tax rate increased to 32.9 percent for the quarter from 30.7 percent in the year-ago period as the result of lower federal and state income tax credits. Net income was $9.4 million, or $0.68 per diluted share. This was a 15.3 percent increase compared with diluted earnings per share of $0.59 in the second quarter of 2003. SIX-MONTH RESULTS For the six months ended June 30, 2004, sales increased 7.8 percent to $258.9 million from $240.2 million in the year-ago period. The increase in sales was attributable to increased sales to foodservice, retail, industrial and export customers. Sales to foodservice customers of Libbey glass products, Syracuse China dinnerware products, Traex plastic products and World Tableware products were all higher by at least 8 percent when compared with the first six months of 2003. Income from operations was up 20.7 percent to $22.2 million compared with $18.4 million in the year-ago period. In addition to the higher sales, other factors that contributed to the higher income from operations included increased capacity utilization and improved manufacturing efficiencies. Equity earnings from Vitrocrisa were $0.1 million on a pretax basis as compared to $1.8 million pretax in the year-ago period, as the result of higher natural gas costs and increased repair expenses. Interest expense increased $0.9 million as the result of higher average debt during the first half of 2004. The effective tax rate increased to 33.0 percent during the first six months of 2004 from 31.2 percent in 2003 as the result of lower federal and state income tax credits. Net income was $9.9 million, or $0.73 per diluted share, compared with $9.9 million, or $0.71 per diluted share, in the year-ago period. OUTLOOK FOR 2004 John F. Meier, chairman and chief executive officer, commenting on the quarter and the Company's outlook for 2004 said, "We are pleased that we were able to deliver solid increases in sales and earnings during the second quarter. The continued increase in sales to our customers is encouraging." He added, "We are reviewing our expectations for the balance of 2004 and will provide guidance around the middle of August for the third and fourth quarters." WEBCAST INFORMATION Libbey will hold a conference call for investors on Thursday, July 22, 2004, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet on both www.libbey.com and http://phx.corporate-ir.net/phoenix.zhtml?c=64169&p=irol-eventDetails. To listen to the call, please go to the website at least 10 minutes early to E-2 Libbey Inc. Add 3 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 but are not limited to: 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 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 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, E-3 Libbey Inc. Add 4 located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry. In 2003, Libbey Inc.'s net sales totaled $513.6 million. E-4 LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per-share amounts) (unaudited)
THREE MONTHS ENDED Percent June 30, 2004 June 30, 2003 Change ------------- ------------- ------ Net sales $ 135,752 $ 128,254 5.8% Freight billed to customers 564 529 Royalties and net technical assistance 712 640 --------- --------- Total revenues 137,028 129,423 5.9% Cost of sales 103,394 99,085 --------- --------- Gross profit(1) 32,922 29,698 10.9% Selling, general and administrative expenses 17,486 17,514 --------- --------- Income from operations(2) 16,148 12,824 25.9% Equity earnings -- pretax 1,456 1,997 Other (expense) income (124) 210 --------- --------- Earnings before interest and income taxes 17,480 15,031 16.3% Interest expense -- net 3,516 3,611 --------- --------- Income before income taxes 13,964 11,420 22.3% Provision for income taxes 4,599 3,510 --------- --------- Net income $ 9,365 $ 7,910 18.4% ========= ========= Net income per share: Basic $ 0.68 $ 0.59 ========= ========= Diluted $ 0.68 $ 0.59 15.3% ========= ========= Weighted average shares: Outstanding 13,678 13,307 ========= ========= Diluted 13,699 13,318 ========= =========
SIX MONTHS ENDED Percent June 30, 2004 June 30, 2003 Change ------------- ------------- ------ Net sales $ 258,875 $ 240,157 7.8% Freight billed to customers 1,055 963 Royalties and net technical assistance 1,404 1,390 --------- --------- Total revenues 261,334 242,510 7.8% Cost of sales 204,692 189,864 --------- --------- Gross profit(1) 55,238 51,256 7.8% Selling, general and administrative expenses 34,479 34,280 --------- --------- Income from operations(2) 22,163 18,366 20.7% Equity earnings -- pretax 67 1,847 Other (expense) income (317) 336 --------- --------- Earnings before interest and income taxes 21,913 20,549 6.6% Interest expense -- net 7,092 6,152 --------- --------- Income before income taxes 14,821 14,397 2.9% Provision for income taxes 4,891 4,486 --------- --------- Net income $ 9,930 $ 9,911 0.2% ========= ========= Net income per share: Basic $ 0.73 $ 0.71 ========= ========= Diluted $ 0.73 $ 0.71 2.8% ========= ========= Weighted average shares: Outstanding 13,653 13,883 ========= ========= Diluted 13,682 13,899 ========= =========
(1) Gross profit is net sales plus freight billed to customers less cost of sales. (2) Gross profit plus Royalties and net technical assistance income less Selling, general and administrative expenses E-5 LIBBEY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
June 30, 2004 December 31, 2003 June 30, 2003 ------------- ----------------- ------------- (unaudited) (unaudited) ASSETS Cash $ 2,355 $ 2,750 $ 5,862 Accounts receivable 63,380 57,122 56,535 Inventories 134,297 125,696 123,520 Other current assets 10,947 10,610 12,993 -------- -------- -------- Total current assets 210,979 196,178 198,910 Investments 87,754 87,574 84,596 Other assets 40,682 40,745 39,754 Goodwill 52,917 53,133 61,228 Net property, plant and equipment 174,183 173,486 163,348 -------- -------- -------- Total assets $566,515 $551,116 $547,836 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable $ 14,142 $ 611 $ 4,808 Accounts payable 35,625 40,280 32,474 Accrued liabilities 32,488 33,555 45,252 Other current liabilities 17,125 14,281 16,952 Long-term debt due within one year 115 115 115 -------- -------- -------- Total current liabilities 99,495 88,842 99,601 Long-term debt 223,685 230,207 231,052 Deferred taxes and other liabilities 27,678 27,873 23,903 Pension liability 17,501 17,092 29,910 Nonpension postretirement benefits 46,986 47,245 47,633 -------- -------- -------- Total liabilities 415,345 411,259 432,099 Total shareholders' equity 151,170 139,857 115,737 -------- -------- -------- Total liabilities and shareholders' equity $566,515 $551,116 $547,836 ======== ======== ========
E-6 LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in thousands) (unaudited)
THREE MONTHS ENDED June 30, 2004 June 30, 2003 ------------- ------------- OPERATING ACTIVITIES Net income $ 9,365 $ 7,910 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 7,631 6,825 Net equity earnings (1,058) (1,471) Change in accounts receivable (7,105) (3,122) Change in inventories (5,432) (7,019) Change in accounts payable 783 3,146 Other operating activities 6,294 9,487 -------- -------- Net cash provided by operating activities 10,478 15,756 INVESTING ACTIVITIES Additions to property, plant and equipment (8,859) (6,379) Dividends received from equity investments - 4,900 Other - 897 -------- -------- Net cash used in investing activities (8,859) (582) FINANCING ACTIVITIES Net bank credit facility activity (5,000) (20,000) Payment of financing fees (838) - Other net borrowings 6,602 2,453 Stock options exercised 88 4,765 Treasury shares purchased - (640) Dividends (1,366) (1,325) -------- -------- Net cash provided by financing activities (514) (14,747) Effect of exchange rate fluctuations on cash - (24) -------- -------- (Decrease) increase in cash 1,105 403 Cash at beginning of period 1,250 5,459 -------- -------- Cash at end of period $ 2,355 $ 5,862 ======== ========
E-7 LIBBEY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in thousands) (unaudited)
SIX MONTHS ENDED June 30, 2004 June 30, 2003 ------------- ------------- OPERATING ACTIVITIES Net income $ 9,930 $ 9,911 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 15,443 13,732 Net equity earnings (127) (1,479) Change in accounts receivable (6,258) (6,591) Change in inventories (8,601) (13,886) Change in accounts payable (4,655) 841 Other operating activities 5,400 4,206 --------- --------- Net cash provided by operating activities 11,132 6,734 INVESTING ACTIVITIES Additions to property, plant and equipment (17,026) (11,093) Dividends received from equity investments - 4,900 Other - 897 --------- --------- Net cash used in investing activities (17,026) (5,296) FINANCING ACTIVITIES Net bank credit facility activity (5,000) (61,872) Senior notes - 100,000 Payment of financing fees (838) (663) Other net borrowings 13,738 2,088 Stock options exercised 328 4,841 Treasury shares purchased - (38,888) Dividends (2,728) (2,788) --------- --------- Net cash provided by financing activities 5,500 2,718 Effect of exchange rate fluctuations on cash (1) 23 --------- --------- (Decrease) increase in cash (395) 4,179 Cash at beginning of year 2,750 1,683 --------- --------- Cash at end of period $ 2,355 $ 5,862 ========= =========
E-8 LIBBEY INC. CONDENSED CONSOLIDATED JOINT VENTURE STATEMENTS OF INCOME (Dollars in thousands) (unaudited)
THREE MONTHS ENDED June 30, 2004 June 30, 2003 ------------- ------------- Net sales $ 48,490 $ 48,260 Cost of sales 39,270 35,930 -------- -------- Gross profit 9,220 12,330 Selling, general and administrative expenses 5,650 5,963 -------- -------- Income from operations 3,570 6,367 Translation gain (loss) 507 (727) Other income (expense) (22) (216) -------- -------- Earnings before interest and taxes 4,055 5,424 Interest expense 1,083 1,349 -------- -------- Income before income taxes 2,972 4,075 Income taxes 813 1,075 -------- -------- Net income $ 2,159 $ 3,000 ======== ========
SIX MONTHS ENDED June 30, 2004 June 30, 2003 ------------- ------------- Net sales $ 90,968 $ 86,547 Cost of sales 77,588 68,929 -------- -------- Gross profit 13,380 17,618 Selling, general and administrative expenses 11,016 10,819 -------- -------- Income from operations 2,364 6,799 Translation gain (loss) 327 (80) Other income (expense) (123) (208) -------- -------- Earnings before interest and taxes 2,568 6,511 Interest expense 2,430 2,743 -------- -------- Income before income taxes 138 3,768 Income taxes (120) 751 -------- -------- Net income $ 258 $ 3,017 ======== ========
The Company is a 49% equity owner in Vitrocrisa Holding, S. de R.L. de C.V. and related Mexican companies (Vitrocrisa), which manufacture, market and sell glass tableware (beverageware, plates, bowls, serveware and accessories) and industrial glassware (coffee pots, blender jars, meter covers, glass covers for cooking ware and lighting fixtures sold to original equipment manufacturers) and a 49% equity owner in Crisa Industrial, L.L.C., a domestic distributor of industrial glassware for Vitrocrisa in the U.S. and Canada. Summarized combined statements of income for the Company's investments, accounted for by the equity method under U.S. GAAP, is shown above. E-9