8-K

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 26, 2005

LIBBEY INC.

(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation) 1-12084
(Commission File Number) 34-1559357
(IRS Employer identification No.)

300 Madison Avenue
Toledo, Ohio
(Address of principal executive offices) 43604
(Zip Code)

Registrant’s telephone number, including area code: (419) 325-2100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instructions A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1 Press Release

Item 2.02 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 2.02 of Form 8-K, “Results of Operations and Financial Condition.”

On October 26, 2005, Libbey Inc. issued a press release announcing financial results for the third quarter and nine-month period ended September 30, 2005. 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.

Item 9.01 Financial Statements and Exhibits

c) Exhibits 99.1 Press release dated October 26, 2005

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 26, 2005	By:	/s/ Scott M. Sellick
	Scott M. Sellick
	Vice President, Chief Financial Officer
	(Principal Accounting Officer)

Exhibit Index

Exhibit No.	Description	Page No.
99.1	Text of press release dated October 26, 2005	E-1

EX-99.1

EXHIBIT 99.1

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD:
Kenneth Boerger	Kathy Waller
VP/Treasurer	Analyst Inquiries
(419) 325-2279	(312) 640-6696

FOR IMMEDIATE RELEASE
WEDNESDAY, OCTOBER 26, 2005

LIBBEY INC. ANNOUNCES THIRD QUARTER RESULTS
SALES UP 2.9 PERCENT

TOLEDO, OHIO, OCTOBER 26, 2005—Libbey Inc. (NYSE: LBY) announced that its diluted earnings per share for the third quarter ended September 30, 2005, were 30 cents on sales of $135.6 million, as compared with a diluted loss per share of 23 cents and sales of $131.8 million in the prior-year third quarter. The Company reported that its diluted earnings per share for the quarter, as detailed in the attached Table 2, and excluding special charges relating to the salary reduction program announced in June and capacity realignment charges associated with the shutdown of its City of Industry, California, facility in February 2005, as detailed in the attached Table 1, were 32 cents as compared with 34 cents in the prior-year quarter.

Third Quarter Results

For the quarter-ended September 30, 2005, sales increased 2.9 percent to $135.6 million from $131.8 million in the year-ago quarter. The increase in sales was attributable to the Crisal acquisition in Portugal and higher sales of foodservice glassware, Syracuse China, and Traex products. Sales to World Tableware customers were down slightly. Sales to retail and industrial glassware customers and Royal Leerdam customers were all down over 8.0 percent, largely attributable to the Company’s earlier decision to discontinue the sale of some low-margin products and softness in the European retail market.

The Company recorded income from operations of $10.0 million during the quarter, as compared with loss from operations of $1.2 million in the year-ago quarter. Factors contributing to the increase, in addition to the higher special charges in the third quarter of 2004, were higher sales to foodservice glassware and dinnerware customers, lower

E-1

Libbey Inc.
Add 1

warehouse and distribution expenses, and lower salaried labor costs. Partially offsetting these gains were higher natural gas costs and higher pension and postretirement medical expenses.

Pretax equity loss from Vitrocrisa, the Company’s joint venture in Mexico, was $1.2 million, as compared with pretax loss of $0.9 million in the third quarter of 2004, primarily as a result of significantly higher natural gas costs.

Net income was $4.2 million, or $0.30 per diluted share, as compared with diluted loss per share of $0.23 in the third quarter of 2004. The Company reported that its diluted earnings per share for the quarter, as detailed in the attached Table 2, and excluding the special charges as detailed in the attached Table 1, were 32 cents as compared with 34 cents in the prior-year quarter.

Nine-Month Results

For the nine months ended September 30, 2005, sales increased 4.9 percent to $409.9 million from $390.7 million in the year-ago period. The increase in sales was attributable to the Crisal acquisition in Portugal and higher sales of World Tableware, Syracuse China and Traex products. Partially offsetting these increases were lower glassware shipments to foodservice, retail and industrial customers.

Income from operations was $12.6 million compared with $19.6 million in the year-ago period. Causes of the reduction were lower glassware sales to foodservice, retail and industrial customers, higher pension and postretirement medical expenses, and higher natural gas costs.

Equity loss from Vitrocrisa was $1.4 million on a pretax basis as compared to pretax loss of $0.8 million in the year-ago period. The Company reported net income of $1.6 million, or $0.12 per diluted share, compared with net income of $6.7 million, or $0.49 per diluted share, in the year-ago period. Libbey reported that its diluted earnings per share for the first nine months of 2005, as detailed in the attached Table 2, and excluding special charges as detailed in the attached Table 1, were $0.60 as compared with $1.06 in the first nine months of the prior-year.

Working Capital

Working capital, defined as inventories and accounts receivable less accounts payable, was $169.4 million at September 30, 2005, as compared to $168.6 million at September 30, 2004. However, excluding the $11.3 million of working capital associated with the Crisal business acquired in January of 2005, working capital was $10.5 million lower than it was a year ago. Excluding Crisal, inventories at September 30, 2005, were $4.0 million lower than at September 30, 2004, as the result of successful inventory control programs. Accounts receivable increased $0.2 million and accounts payables were $6.7 million higher.

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Outlook for 2005

John F. Meier, chairman and chief executive officer, commenting on the quarter and the Company’s outlook for the remainder of 2005 said, “Third quarter earnings per share were in line with our expectations announced on October 17, 2005. While shipments to retail, industrial and some international customers were below expectations, we saw the positive results of our capacity realignment and salary reduction programs in our income from operations. The environment for the fourth quarter continues to be challenging, as the damage caused by Hurricanes Katrina and Rita have disrupted natural gas supplies, resulting in a significant unanticipated increase in natural gas costs by approximately $2.6 million during the quarter for Libbey. Our joint venture, Vitrocrisa, will incur over $3 million in higher costs for natural gas and electricity during the fourth quarter as compared to the prior year quarter. We also anticipate that pension and postretirement medical expenses will be $1.6 million higher than the prior year quarter, with lower machine activity and manufacturing expenses at both Syracuse China and Royal Leerdam negatively impacting income from operations by $1.5 million. In addition, the Company will aggressively align finished goods inventories in its domestic glass business. The expected negative impact of this planned inventory alignment on income from operations is in excess of $3 million during the fourth quarter. Our expectations for sales growth total approximately 6 percent in the fourth quarter. Margin compression is also expected to occur due to increased supply chain operating costs in Shreveport in the aftermath of the recent hurricanes. All of these other factors are expected to result in a diluted loss per share, excluding special charges, of $0.03 to $0.08 for the fourth quarter.” He added, “We broke ground in China on our new production facility during the third quarter. We are very excited about this new production facility, which is expected to be operational by early 2007.” The Company also updated its expectations for capital expenditures for the Chinese facility to be approximately $46 million, including $10 million to be spent in the fourth quarter of 2005 and approximately $30 million in 2006.

Webcast Information

Libbey will hold a conference call for investors on Wednesday, October 26, 2005, 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?p=irol-eventDetails&c=64169&eventID=1148596. 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.

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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 acquisitions, and whether such acquisitions can operate profitably.

Libbey Inc.:

• is a leading producer of glass tableware in North America;

• is expanding its international presence with facilities in the Netherlands and Portugal and a facility in China planned to begin production in 2007;

• is a leading producer of tabletop products for the foodservice industry;

• exports to more than 90 countries.

Based in Toledo, Ohio, the Company operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, in Portugal 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. Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe. 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. In 2004, Libbey Inc.’s net sales totaled $544.8 million.

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Table 1
Summary of Special Charges
(Dollars in thousands)

In August 2004, Libbey announced that it was realigning its production capacity in order to improve its cost structure. Pursuant to the plan, Libbey closed its manufacturing facility in City of Industry, California, in February 2005 and realigned production among its other glass manufacturing facilities. Libbey has recorded a pretax charge of $487 in the third quarter 2005 and $4,331 year-to-date 2005, as detailed below. In addition, in June 2005, Libbey reduced its North American salaried workforce by seven percent in order to reduce Libbey’s overall cost profile. The pretax charge for the salary reduction was $5,564 in the second quarter of 2005.

	Three Months		Nine Months
	ended		ended
	September 30, 2005		September 30, 2005
Capacity realignment:
Fixed asset related	$	130	$	650
Severance & benefits		—		2,019
Miscellaneous		357		1,662
Included in Special charges (1)	$	487	$	4,331
Salary reduction program:
Pension & retiree welfare	$	—	$	867
Included in Cost of sales		—		867
Pension & retiree welfare		—		1,347
Included in Selling, general and administrative expenses		—		1,347
Employee termination costs		—		3,350
Included in Special charges		—		3,350
Pretax salary reduction program (2)	$	—	$	5,564
Total Special charges (3)	$	487	$	9,895

(1)	Cash charges for the capacity realignment project for the quarter ended and year-to-date September 30, 2005, were $1,929 and $7,825, respectively.
(2)	Cash charges for the salary reduction program for the quarter ended and year-to-date September 30, 2005, were $914.
(3)	Summary classifications:

Cost of sales	$	—	$	867
Selling, general and administrative expenses		—		1,347
Special charges		487		7,681
Total special charges	$	487	$	9,895

Table 2
Reconciliation of Non-GAAP Financial Measures for Special Charges
(Dollars in thousands, except per-share amounts)

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. Libbey believes that providing supplemental non-GAAP financial information is useful to investors in understanding- Libbey’s core business and trends. In addition, it is the basis on which Libbey’s management internally assesses- performance and such non-GAAP measures are relevant to Libbey’s determination of compliance with financial — covenants included in its debt agreements. 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 GAAP.

	Three months ended September 30,					Nine months ended September 30,
	2005		2004			2005		2004
Reported net (loss) income	$	4,167	$	(3,204	)	$	1,648	$	6,726
Special charges — net of tax		326		7,862			6,630		7,862
Net income excluding special charges	$	4,493	$	4,658		$	8,278	$	14,588
Diluted (loss) earnings per share:
Reported net (loss) income	$	0.30	$	(0.23	)	$	0.12	$	0.49
Special charges — net of tax		0.02		0.57			0.48		0.57
Net income per diluted share excluding special charges	$	0.32	$	0.34		$	0.60	$	1.06

LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)

	THREE MONTHS ENDED						Percent
	September 30, 2005			September 30, 2004			Change
Net sales	$	135,573		$	131,790			2.9	%
Freight billed to customers		444			476
Total revenues (2)		136,017			132,266
Cost of sales (1)		108,750			105,933
Gross profit		27,267			26,333			3.5	%
Selling, general and administrative expenses (1)		16,788			15,771
Special charges (1)		487			11,734
Income (loss) from operations		9,992			(1,172	)		952.6	%
Equity loss — pretax		(1,183	)		(914	)
Other income		923			478
Earnings (loss) before interest, income taxes and minority interest		9,732			(1,608	)		705.2	%
Interest expense		3,398			3,175
Income (loss) before income taxes and minority interest		6,334			(4,783	)		232.4	%
Provision for income taxes		2,090			(1,579	)
Income (loss) before minority interest		4,244			(3,204	)		232.5	%
Minority interest		(77	)		—
Net (loss) income	$	4,167		$	(3,204	)		230.1	%
Net (loss) income per share:
Basic	$	0.30		$	(0.23	)
Diluted	$	0.30		$	(0.23	)		230.4	%
Weighted average shares:
Outstanding		13,951			13,752
Diluted		13,951			13,752

⁽¹⁾ Refer to Table 1 for Special charges detail

⁽²⁾ Royalties and net technical assistance income are now reported below income from operations

LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)

	NINE MONTHS ENDED						Percent
	September 30, 2005			September 30, 2004			Change
Net sales	$	409,895		$	390,665			4.9	%
Freight billed to customers		1,422			1,531
Total revenues (2)		411,317			392,196
Cost of sales (1)		335,955			310,625
Gross profit		75,362			81,571			(7.6	%)
Selling, general and administrative expenses (1)		55,109			50,250
Special charges (1)		7,681			11,734
Income from operations		12,572			19,587			(35.8	%)
Equity loss — pretax		(1,381	)		(847	)
Other income		1,655			1,565
Earnings before interest, income taxes and minority interest		12,846			20,305			(36.7	%)
Interest expense		10,240			10,267
Income before income taxes and minority interest		2,606			10,038			(74.0	%)
Provision for income taxes		860			3,312
Income before minority interest		1,746			6,726			(74.0	%)
Minority interest		(98	)		—
Net income	$	1,648		$	6,726			(75.5	%)
Net income per share:
Basic	$	0.12		$	0.49
Diluted	$	0.12		$	0.49			(75.5	%)
Weighted average shares:
Outstanding		13,879			13,687
Diluted		13,880			13,698

⁽¹⁾ Refer to Table 1 for Special charges detail

⁽²⁾ Royalties and net technical assistance income are now reported below income from operations

LIBBEY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	September 30, 2005		December 31, 2004		September 30, 2004
	(unaudited)				(unaudited)
ASSETS
Cash	$	1,242	$	6,244	$	1,488
Accounts receivable — net		75,122		67,522		66,863
Inventories — net		147,848		126,625		141,366
Deferred taxes		8,847		7,462		7,402
Other current assets		17,310		3,308		6,476
Total current assets		250,369		211,161		223,595
Other assets		40,015		36,537		28,572
Investments		81,271		82,125		87,123
Goodwill and purchased intangibles — net		70,857		66,003		65,218
Property, plant and equipment — net		204,608		182,378		174,578
Total assets	$	647,120	$	578,204	$	579,086
LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable	$	15,748	$	9,415	$	19,308
Accounts payable		53,551		43,140		39,594
Accrued liabilities		40,413		38,996		36,386
Deposit liability		16,623		16,623		—
Special charges reserve		1,679		3,025		2,982
Other current liabilities		7,650		5,839		4,147
Long-term debt due within one year		243,857		115		115
Total current liabilities		379,521		117,153		102,532
Long-term debt		5,829		215,842		231,947
Deferred taxes		13,252		12,486		15,528
Pension liability		43,741		36,466		26,513
Nonpension postretirement benefits		45,882		45,716		46,805
Other liabilities		6,628		6,978		6,300
Total liabilities		494,853		434,641		429,625
Minority interest		98		—		—
Total liabilities and minority interest		494,951		434,641		429,625
Total shareholders’ equity		152,169		143,563		149,461
Total liabilities and shareholders’ equity	$	647,120	$	578,204	$	579,086

LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(unaudited)

	THREE MONTHS ENDED
	September 30, 2005			September 30, 2004
Operating activities
Net (loss) income	$	4,167		$	(3,204	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		9,160			7,027
Equity earnings — net of tax		828			570
Minority interest		77			—
Change in accounts receivable		(2,685	)		(3,373	)
Change in inventories		(11,773	)		(6,769	)
Change in accounts payable		11,516			4,520
Gain on sale of assets		(538	)		—
Special charges		487			11,733
Special charges cash payments		(2,843	)		(17	)
Other operating activities		(7,141	)		(11,848	)
Net cash provided by (used in) operating activities		1,255			(1,361	)
Investing activities
Additions to property, plant and equipment		(7,389	)		(11,598	)
Dividends received from equity investments		—			980
Proceeds from sale of assets		223			—
Net cash used in investing activities		(7,166	)		(10,618	)
Financing activities
Net bank credit facility activity		3,030			7,380
Other net borrowings		3,514			4,971
Stock options exercised		—			163
Dividends		(1,394	)		(1,375	)
Other		(537	)		(27	)
Net cash provided by financing activities		4,613			11,112
Decrease in cash		(1,298	)		(867	)
Cash at beginning of period		2,540			2,355
Cash at end of period	$	1,242		$	1,488

LIBBEY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(unaudited)

	NINE MONTHS ENDED
	September 30, 2005			September 30, 2004
Operating activities
Net income	$	1,648		$	6,726
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		25,611			22,470
Equity earnings — net of tax		967			444
Minority interest		98			—
Change in accounts receivable		(4,382	)		(10,431	)
Change in inventories		(16,284	)		(15,836	)
Change in accounts payable		3,630			2,341
Gain on sale of assets		(517	)		—
Special charges		9,895			11,733
Special charges cash payments		(8,739	)		(17	)
Other operating activities		819			(7,659	)
Net cash provided by operating activities		12,746			9,771
Investing activities
Additions to property, plant and equipment		(26,503	)		(28,624	)
Dividends received from equity investments		—			980
Proceeds from sale of assets		223			—
Crisal acquisition and related costs		(28,990	)		—
Net cash used in investing activities		(55,270	)		(27,644	)
Financing activities
Net bank credit facility activity		35,910			2,380
Other net borrowings		6,227			18,709
Stock options exercised		99			491
Dividends		(4,162	)		(4,103	)
Other		(552	)		(865	)
Net cash provided by financing activities		37,522			16,612
Effect of exchange rate fluctuations on cash		—			(1	)
Decrease in cash		(5,002	)		(1,262	)
Cash at beginning of period		6,244			2,750
Cash at end of period	$	1,242		$	1,488

LIBBEY INC.

CONDENSED CONSOLIDATED JOINT VENTURE STATEMENTS OF OPERATIONS
(Dollars in thousands)
(unaudited)

	THREE MONTHS ENDED
	September 30, 2005			September 30, 2004
Total revenues	$	46,937		$	49,521
Cost of sales		41,469			42,795
Gross profit		5,468			6,726
Selling, general and administrative expenses		5,689			5,723
Income (loss) from operations		(221	)		1,003
Remeasurement loss		(69	)		(387	)
Other expense		(109	)		(247	)
Earnings (loss) before interest and taxes		(399	)		369
Interest expense		2,016			2,235
Loss before income taxes		(2,415	)		(1,866	)
Income taxes		(725	)		(702	)
Net loss	$	(1,690	)	$	(1,164	)

	NINE MONTHS ENDED
	September 30, 2005			September 30, 2004
Total revenues	$	141,468		$	140,490
Cost of sales		118,786			120,384
Gross profit		22,682			20,106
Selling, general and administrative expenses		17,017			16,739
Income from operations		5,665			3,367
Remeasurement loss		(876	)		(60	)
Other expense		(1,385	)		(370	)
Earnings before interest and taxes		3,404			2,937
Interest expense		6,222			4,665
Loss before income taxes		(2,818	)		(1,728	)
Income taxes		(845	)		(822	)
Net loss	$	(1,973	)	$	(906	)

Libbey 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 Libbey’s investments, accounted for by the equity method under U.S. GAAP, is shown above.