Libbey Announces 3rd Qtr Financial Results (posted 11/6/09)
Libbey Inc. recently reported net income of $3.5 million, or $0.23 per diluted share, for the quarter ended September 30, 2009, compared to a net loss of $6.0 million, or $0.40 per diluted share, in the prior year’s third quarter. Net sales were $186.9 million in the third quarter of 2009, compared to $211.5 million in the prior year’s third quarter.
“During the third quarter, we continued our solid success in cash flow generation for the year, resulting in increasingly improved liquidity,” said John F. Meier, chairman and CEO. “Our U.S. retail shipments again led the way during the third quarter, as sales in this channel increased over 9% compared to the third quarter of 2008. As a result of overall increases in demand, primarily in North America, we also benefited from increased capacity utilization in all three North American glass factories during the third quarter of 2009. These factors, along with the continued success of our cost reduction program, allowed us to generate $31.9 million in normalized EBITDA during the quarter.”
For the 2009 third quarter, sales decreased 11.7% to $186.9 million from $211.5 million in the 2008 third quarter. North American Glass sales declined 10.7% to $128.3 million from $143.6 million in the year-ago quarter. The decrease in sales was attributable to a 13.7% decrease in sales to Crisa customers (0.6%, excluding the currency impact of the Mexican peso) and a 17.5% decline in sales to U.S. foodservice customers, partially offset by a 9.4% increase in shipments to retail glassware customers. Foodservice sales in the third quarter of 2008 were positively impacted by an increase in shipments to customers in advance of the company’s last price increase in August 2008.
North American Other sales decreased 27.8%, as shipments of Syracuse China products decreased approximately 46.7%, related to the closure of the Syracuse China facility earlier this year and the decision to reduce the Syracuse China product offering. Sales of Traex and World Tableware products decreased approximately 27.7% and 14.5%, respectively. International sales declined 4.1% as lower sales at Royal Leerdam and Crisal of 3.9% and 7.7%, respectively, more than offset increased sales of 20.0% to customers of Libbey China. Excluding the negative currency impact, international sales decreased approximately 0.4%.
The company reported income from operations of $17.8 million during the quarter, compared to income from operations of $14.6 million in the year-ago quarter. Normalized income from operations was $18.6 million during the quarter. Factors contributing to the increase in normalized income from operations included lower spending on labor and benefits, packaging, repairs, natural gas, electricity, and distribution costs partially offset by lower sales.
For the nine months ended September 30, 2009, sales decreased 13.3% to $540.6 million from $623.6 million in the year-ago period. North American Glass sales decreased 12.0% to $374.8 million from $426.1 million in the year-ago period. The lower sales were attributable to a decline of approximately 23.4% in Crisa's sales (10.4%, excluding the currency impact of the Mexican peso) and a decline of approximately 9.9% in sales to foodservice glassware customers in the U.S. and Canada. These decreases were partially offset by an increase in U.S. retail sales. Taking into account the 9.4% increase in U.S. retail sales during the third quarter, sales to the U.S. retail channel have grown 3.2% year-to-date in 2009, resulting in an all-time record retail sales performance during the first nine months of 2009.
North American Other sales decreased 22.2%, as sales of Syracuse China, World Tableware and Traex were all lower than the first nine months of 2008. International sales decreased 13.7% as a result of lower sales to customers of Royal Leerdam and Crisal and unfavorable currency impact on European sales. Libbey China sales increased 10.5% for the first nine months of 2009 compared to the first nine months of 2008. Excluding the currency impact, international sales declined approximately 6.2%.
The company reported income from operations of $17.3 million during the first nine months of 2009, compared to income from operations and normalized income from operations of $42.8 million in the year-ago period. Normalized income from operations was $23.2 million for the first nine months of 2009. Factors contributing to the decrease in normalized income from operations included a $10.6 million exchange rate impact (primarily in Mexico and Europe); reduced capacity utilization, which reflected Libbey’s effort to control inventories and generate cash; and lower sales. These factors were partially offset by lower spending on labor, raw materials, packaging, repairs, natural gas, electricity and distribution costs.
For additional information, including an archived conference call discussing these results, visit www.libbey.com.