Ceramic Industry

Libbey Reports Net Sales Increase for 4th Qtr

February 12, 2010

Libbey Inc. recently announced that sales for the fourth quarter of 2009 were $208.1 million, compared to $186.6 million in the fourth quarter of 2008. Libbey reported a net loss of $7.1 million, or $0.45 per diluted share, for the fourth quarter ended December 31, 2009, compared to a net loss of $68.9 million, or $4.68 per diluted share, in the prior-year quarter.

For the 2009 fourth quarter, sales were $208.1 million, compared to $186.6 million in the year-ago quarter. Sales of the North American Glass segment were $147.8 million, an increase of 15.4%, compared to $128.0 million in the fourth quarter of 2008. Primary contributors to the increased sales included a 17.8% increase in sales to U.S. and Canadian retail customers over the prior-year quarter, which represents an all-time record for sales to these customers in any quarter in the company’s history.

Sales to U.S. and Canadian foodservice customers increased approximately 6.0%, sales to Crisa customers increased 15.2% and International sales increased 24.0%. North American Other sales were $20.9 million, compared to $26.0 million in the prior-year quarter, as shipments of Syracuse China products were off 48.5%, primarily due to the closure of the Syracuse China facility in April 2009 and the decision to reduce the Syracuse China product offering.

Sales of Traex products were off 20.1% vs. the prior year, while sales to World Tableware customers increased 0.5% during the quarter. International segment sales were $41.4 million, compared to $33.4 million in the year-ago quarter, as a result of 41.5% sales growth at Crisal in Portugal, a 30.7% increase in sales at Libbey China and an 18.6% increase in sales to Royal Leerdam customers.

The company reported income from operations of $19.3 million during the quarter, compared to a loss from operations of $48.3 million in the year-ago quarter. Income from operations, excluding special charges, was $20.2 million in the fourth quarter of 2009, compared to a loss from operations of $3.2 million during the fourth quarter of 2008. Factors contributing to the income from operations improvement were higher sales and higher capacity utilization partially, offset by higher selling, general and administrative expenses.

For the 12 months ended December 31, 2009, sales decreased 7.6% to $748.6 million from $810.2 million in 2008. “Our U.S. and Canadian retail shipments again led the way in 2009, as sales in this channel increased over 7% compared to 2008,” said John F. Meier, chairman and CEO. “As a result of overall increases in demand in the second half of the year, primarily in North America, we also benefited from increased capacity utilization in all three North American glass factories during the second half of 2009. These factors, along with the continued success of our cost reduction program, allowed us to generate $90.1 million in normalized EBITDA for the full year.”

North American Glass sales decreased 5.7% to $522.6 million in 2009 from $554.1 million in 2008. The decrease in sales was primarily attributable to a decline in sales to foodservice customers and to Crisa customers. Partially offsetting the decrease in sales was an increase of more than 7.0% in shipments to U.S. and Canadian retail glassware customers. North American Other sales decreased 21.6% to $87.0 million from $111.0 million in 2008, as shipments of Syracuse China products declined 37.2%, shipments of World Tableware products were off 11.3% and Traex sales were 24.2% lower than the prior year. International sales decreased 5.5% to $145.0 million as the result of increased sales at Libbey China of 15.6%, which was more than offset by approximately 6.0% lower sales at both Crisal and Royal Leerdam.

Libbey reported income from operations of $36.6 million during 2009, compared to a loss from operations of $5.5 million for 2008. Normalized income from operations, excluding special charges, was $43.4 million for the full year 2009, compared to $39.6 million in 2008. Primary contributors to the improvement in normalized income from operations were lower labor costs, lower natural gas and electricity costs, and lower distribution expenses partially offset by lower sales.

The company recorded a net loss of $28.8 million, or $1.90 per diluted share for 2009, compared to a net loss of $80.5 million, or $5.48 per diluted share, in the year-ago period. The company reported that its normalized net loss per diluted share for the full year 2009 was $1.26 per diluted share. This compares to the normalized diluted loss per share of $2.40 in 2008.

“We were encouraged by the improvements we saw in the foodservice channel and by the record-setting sales in the retail channel in the fourth quarter,” said Meier. “We were also pleased that our retail sales in the U.S. and Canada increased over 7.0% for the full year 2009, as we increased our market share in the U.S. from 40.6% in 2008 to 42.1% in 2009.”

Additional details are available at www.libbey.com.

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