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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-12084
Libbey Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-1559357
- -------- ----------
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
300 Madison Avenue, Toledo, Ohio 43604
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
419-325-2100
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes (X) No ( )
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).
Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 par value - 13,592,505 shares at October 31, 2003
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements of Libbey
Inc. and all wholly owned subsidiaries (the Company) have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (including normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three-month or nine-month periods ended September 30, 2003, are not necessarily
indicative of the results that may be expected for the year-ended December 31,
2003.
The balance sheet at December 31, 2002, has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year-ended December 31, 2002.
2
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share amounts)
(unaudited)
Three months ended September 30,
2003 2002
---- ----
Revenues:
Net sales $ 129,126 $ 103,607
Freight billed to customers 477 344
Royalties and net technical assistance income 832 567
--------------------------
Total revenues 130,435 104,518
Costs and expenses:
Cost of sales 100,996 74,883
Selling, general and administrative expenses 15,758 15,243
--------------------------
116,754 90,126
--------------------------
Income from operations 13,681 14,392
Other income (loss):
Pretax equity earnings 1,172 982
Expenses related to abandoned acquisition -- (27)
Other - net 161 (1,205)
--------------------------
1,333 (250)
--------------------------
Earnings before interest and income taxes 15,014 14,142
Interest expense - net 3,610 2,113
--------------------------
Income before income taxes 11,404 12,029
Provision for income taxes (614) 1,249
--------------------------
Net income $ 12,018 $ 10,780
==========================
Net income per share:
Basic $ 0.89 $ 0.70
==========================
Diluted $ 0.88 $ 0.69
==========================
Dividends per share $ 0.10 $ 0.075
==========================
Weighted average shares:
Outstanding 13,574 15,393
==========================
Diluted 13,618 15,569
==========================
See accompanying notes
3
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share amounts)
(unaudited)
Nine months ended September 30,
2003 2002
---- ----
Revenues:
Net sales $ 369,283 $ 316,362
Freight billed to customers 1,440 1,196
Royalties and net technical assistance income 2,222 2,104
--------------------------
Total revenues 372,945 319,662
Costs and expenses:
Cost of sales 290,860 235,390
Selling, general and administrative expenses 50,038 42,860
--------------------------
340,898 278,250
--------------------------
Income from operations 32,047 41,412
Other income (loss):
Pretax equity earnings 3,019 5,152
Expenses related to abandoned acquisition -- (13,653)
Other - net 497 (1,365)
--------------------------
3,516 (9,866)
--------------------------
Earnings before interest and income taxes 35,563 31,546
Interest expense - net 9,762 6,077
--------------------------
Income before income taxes 25,801 25,469
Provision for income taxes 3,872 5,837
--------------------------
Net income $ 21,929 $ 19,632
==========================
Net income per share:
Basic $ 1.59 $ 1.28
==========================
Diluted $ 1.59 $ 1.26
==========================
Dividends per share $ 0.30 $ 0.225
==========================
Weighted average shares:
Outstanding 13,779 15,385
==========================
Diluted 13,799 15,604
==========================
See accompanying notes
4
LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2003 2002
----- ----
(unaudited)
ASSETS
Current assets:
Cash $ 3,092 $ 1,683
Accounts receivable:
Trade, less allowances of $5,722 and $6,310 58,891 46,308
Other, less allowances of $1,537 and $1,482 4,239 3,636
-------------------------
63,130 49,944
Inventories:
Finished goods 120,564 100,405
Work in process 4,380 4,512
Raw materials 3,468 3,169
Operating supplies 824 1,548
-------------------------
129,236 109,634
Prepaid expenses and deferred income taxes 14,637 13,487
-------------------------
Total current assets 210,095 174,748
Other assets:
Repair parts inventories 7,524 5,603
Intangibles, net of accumulated amortization of $3,961 and $3,380 25,795 26,375
Deferred software, net of accumulated amortization of $12,486
and $11,679 2,364 2,585
Other assets 4,573 4,453
Investments 85,832 87,847
Goodwill 60,768 59,795
-------------------------
186,856 186,658
Property, plant and equipment, at cost 315,416 300,690
Less accumulated depreciation 153,008 137,569
-------------------------
Net property, plant and equipment 162,408 163,121
-------------------------
Total assets $ 559,359 $ 524,527
=========================
See accompanying notes
5
LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2003 2002
----- ----
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 9,997 $ 2,660
Accounts payable 35,852 31,633
Accrued salaries and wages 14,747 14,670
Accrued liabilities 33,302 39,687
Income taxes payable 2,907 5,498
Long-term debt due within one year 115 115
-------------------------
Total current liabilities 96,920 94,263
Long-term debt 234,830 188,403
Deferred income taxes 11,723 11,780
Other long-term liabilities 12,571 14,015
Pension liability 29,024 28,655
Nonpension postretirement benefits 47,357 47,193
-------------------------
Total long-term liabilities 335,505 290,046
-------------------------
Total liabilities 432,425 384,309
Shareholders' equity:
Common stock, par value $.01 per share, 50,000,000 shares authorized,
18,651,360 shares issued (18,256,277 shares issued in 2002) 187 183
Capital in excess of par value 300,161 293,537
Treasury stock 5,066,610 shares (3,625,000 shares in 2002), at cost (140,016) (102,206)
Deficit (1,631) (19,413)
Accumulated other comprehensive loss (31,767) (31,883)
-------------------------
Total shareholders' equity 126,934 140,218
-------------------------
Total liabilities and shareholders' equity $ 559,359 $ 524,527
=========================
See accompanying notes
6
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
Nine months ended September 30,
2003 2002
----- ----
Operating activities
Net income $ 21,929 $ 19,632
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 18,900 13,023
Amortization 1,388 1,447
Other non-cash charges (2,887) (272)
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)
Payment of financing fees (663) (815)
Senior notes 100,000 --
Other net borrowings 7,247 940
Stock options exercised 5,205 3,269
Treasury shares purchased (38,920) (10,084)
Dividends paid (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
=========================
See accompanying notes
7
LIBBEY INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollars in thousands, except share data and per-share amounts
(unaudited)
1. LONG-TERM DEBT
On February 10, 2003, the Company entered into an unsecured agreement for an
Amended and Restated Revolving Credit Agreement (Revolving Credit Agreement or
Agreement) among Libbey Glass Inc. and Libbey Europe B.V., as borrowers. This
amended the previous Revolving Credit and Swing Line Facility that had named
Libbey Glass Inc. as borrower. The amendment was primarily for the Company to
borrow euros. The Agreement is with a group of banks that provides for a
Revolving Credit and Swing Line Facility (Facility) permitting borrowings up to
an aggregate total of $250 million, maturing April 23, 2005, with an option to
extend for two additional one-year periods. Swing Line borrowings are limited to
$25 million with interest calculated at the prime rate minus the Facility Fee
Percentage (Facility Fee Percentage) as defined in the Agreement. Revolving
Credit Agreement U.S. dollar borrowings bear interest at the Company's option at
either the prime rate minus the Facility Fee Percentage or a Eurodollar rate
plus the Applicable Eurodollar Margin (Applicable Eurodollar Margin) as defined
in the Agreement. The Facility Fee Percentage and Applicable Eurodollar Margin
vary depending on the Company's performance against certain financial ratios.
The Facility Fee Percentage and the Applicable Eurodollar Margin were 0.375% and
1.375%, respectively, at September 30, 2003. At September 30, 2002 the Facility
Fee Percentage and the Applicable Eurodollar Margin were 0.175% and 0.70%,
respectively.
Under the Agreement, the Company may also elect to borrow under a Negotiated
Rate Loan alternative of the Revolving Credit and Swing Line Facility at
floating rates of interest, up to a maximum of $125 million. The Facility also
provides for the issuance of $30 million of letters of credit, with such usage
applied against the $250 million limit. At September 30, 2003, the Company had
$4.6 million in letters of credit outstanding under the Facility.
Libbey Europe B.V. may have euro-denominated borrowings under the Revolving
Credit Agreement in an amount not to exceed the Offshore Currency equivalent of
$60 million. At September 30, 2003, the Company had $49.3 million outstanding of
Offshore Currency equivalent. Offshore Currency Swing Line borrowings are
currently limited to $10 million of the $25 million total Swing Line borrowing.
Interest is calculated at the Offshore Currency Swing Line rate plus applicable
Offshore Currency Swing Line Margin, as defined in the Agreement. Revolving
Offshore Currency Borrowings bear interest at the Offshore Currency Rate plus
applicable spread, as defined in the Agreement.
The Company pays a Commitment Fee Percentage on the total credit provided under
the Revolving Credit Agreement. No compensating balances are required by the
Agreement. The Agreement requires the maintenance of certain financial ratios,
restricts the incurrence of indebtedness and other contingent financial
obligations, and restricts certain types
8
of business activities and investments. The Company was in compliance with the
covenants at September 30, 2003.
Libbey Inc. and the subsidiaries of Libbey Glass Inc. guarantee the debt of
Libbey Glass Inc., and Libbey Glass Inc. guarantees the debt of Libbey Europe
B.V. (all related parties which are included in the Consolidated Financial
Statements).
The Company has entered into interest rate protection agreements (Rate
Agreements) with respect to $100 million of debt under its Revolving Credit
Agreement as a means to manage its exposure to fluctuating interest rates. The
Rate Agreements effectively convert this portion of the Company's Revolving
Credit Agreement borrowings from variable rate debt to a fixed-rate basis, thus
reducing the impact of interest rate changes on future income. The average fixed
rate of interest for the Company's borrowings related to the Rate Agreements at
September 30, 2003, is 5.8% and the total interest rate, including applicable
fees, is 7.6%. The average maturity of these Rate Agreements is 1.6 years. The
remaining debt under the Revolving Credit Agreement not covered by the Rate
Agreements has fluctuating interest rates with a weighted average rate of 2.8%
at September 30, 2003.
The interest rate differential to be received or paid under the Rate Agreements
is being recognized over the life of the Rate Agreements as an adjustment to
interest expense. If the counterparts to these Rate Agreements fail to perform,
the Company would no longer be protected from interest rate fluctuations by
these Rate Agreements. However, the Company does not anticipate nonperformance
by the counterparts.
On March 31, 2003, the Company completed the issuance of $100 million of
privately placed senior notes. Eighty million dollars of the notes have a fixed
interest rate with $25 million at an interest rate of 3.69% due March 31, 2008,
and the other $55 million at an interest rate of 5.08% due March 31, 2013. The
remaining $20 million has a floating interest rate at a margin over the London
Interbank Offer Rate (LIBOR) that is set quarterly. The interest rate at
September 30, 2003, on the $20 million debt was 2.19%. The proceeds of the note
issuance were used to retire debt outstanding under the Revolving Credit
Agreement. Libbey Inc. and the subsidiaries of Libbey Glass Inc. guarantee the
debt of Libbey Glass Inc. associated with these notes.
2. INVESTMENTS IN UNCONSOLIDATED AFFILIATES
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 distributor of industrial
glassware for Vitrocrisa in the U.S. and Canada.
Libbey Glass Inc. guarantees the payment by Vitrocrisa of its obligation to
purchase electricity. The guarantee is based on the provisions of a Power
Purchase Agreement to which Vitrocrisa is a party. The guarantee
9
is limited to 49% of any such obligation of Vitrocrisa and limited to an
aggregate amount of $5.0 million. The guarantee was entered into in October 2000
and continues for 15 years from the initial date of electricity generation,
which commenced on April 12, 2003.
Summarized combined financial information for the Company's investments for 2003
and 2002, accounted for by the equity method, is as follows:
September 30, December 31,
2003 2002
---- ----
Current assets $ 72,503 $ 93,311
Non-current assets 106,518 115,054
-------------------------
Total assets 179,021 208,365
Current liabilities 100,269 78,547
Other liabilities and deferred items 54,419 100,063
-------------------------
Total liabilities and deferred items 154,688 178,610
-------------------------
Net assets $ 24,333 $ 29,755
=========================
Three months ended
September 30,
-------------------------
2003 2002
---- ----
Total revenues $ 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 income taxes 1,604 2,698
Interest expense 1,302 1,516
Translation gain 2,090 822
-------------------------
Income before income taxes 2,392 2,004
Provision for income taxes 592 (7,762)
-------------------------
Net income $ 1,800 $ 9,766
=========================
10
Nine months ended
September 30,
--------------------
2003 2002
-------- --------
Total revenues $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 income taxes 8,195 12,382
Interest expense 4,045 4,474
Translation gain 2,010 2,606
-------- --------
Income before income taxes 6,160 10,514
Provision for income taxes 1,343 (4,719)
-------- --------
Net income $ 4,817 $ 15,233
======== ========
3. CASH FLOW INFORMATION
Interest paid in cash aggregated $7,270 and $6,020 for the first nine months of
2003 and 2002, respectively. Income taxes paid in cash aggregated $5,145 and
$6,778 for the first nine months of 2003 and 2002, respectively.
11
4. NET INCOME PER SHARE OF COMMON STOCK
Basic net income per share of common stock is computed using the weighted
average number of shares of common stock outstanding. Diluted net income per
share of common stock is computed using the weighted average number of shares of
common stock outstanding and includes common share equivalents.
The following table sets forth the computation of basic and diluted earnings per
share:
Quarter ended September 30, 2003 2002
- --------------------------- ----------- -----------
Numerator for basic and diluted
earnings per share--net income
which is available to common
shareholders (in thousands) $ 12,018 $ 10,780
Denominator for basic earnings per
share--weighted-average shares
outstanding 13,573,645 15,392,645
Effect of dilutive securities--
employee stock options and
Employee Stock Purchase Plan
(ESPP) 44,846 176,621
----------- -----------
Denominator for diluted earnings
per share--adjusted weighted-
average shares and assumed
conversions 13,618,491 15,569,266
Basic earnings per share $ 0.89 $ 0.70
Diluted earnings per share $ 0.88 $ 0.69
Nine months ended September 30, 2003 2002
- ------------------------------- ----------- -----------
Numerator for basic and diluted
earnings per share--net income
which is available to common
shareholders (in thousands) $ 21,929 $ 19,632
Denominator for basic earnings per
share--weighted-average shares
outstanding 13,778,769 15,384,693
Effect of dilutive securities--
employee stock options and ESPP 20,333 219,530
----------- -----------
Denominator for diluted earnings
per share--adjusted weighted-
average shares and assumed
conversions 13,799,102 15,604,223
Basic earnings per share $ 1.59 $ 1.28
Diluted earnings per share $ 1.59 $ 1.26
12
5. COMPREHENSIVE INCOME
The Company's components of comprehensive income are as follows:
Three months ended
September 30,
---------------------------
2003 2002
----------- -----------
Net income $ 12,018 $ 10,780
Change in fair value of derivative instruments (63) (1,484)
Effect of exchange rate fluctuation 30 --
----------- -----------
Comprehensive income $ 11,985 $ 9,296
=========== ===========
Nine months ended
September 30,
---------------------------
2003 2002
----------- -----------
Net income $ 21,929 $ 19,632
Change in fair value of derivative instruments 82 (578)
Effect of exchange rate fluctuation 33 --
----------- -----------
Comprehensive income $ 22,044 $ 19,054
=========== ===========
Accumulated other comprehensive loss primarily includes $5,153 and $5,235 for
effect of derivatives and $26,647 and $26,647 for minimum pension liability as
of September 30, 2003, and December 31, 2002, respectively. Amounts included for
currency translation are not significant.
The change in other comprehensive income (loss) for the Company is as follows:
Three months ended
September 30,
------------------------
2003 2002
-------- -----------
Change in fair value of derivative instruments $ (101) $ (2,378)
Less:
Income tax benefit 38 894
-------- -----------
Other comprehensive loss related to derivatives $ (63) $ (1,484)
======== ===========
Nine months ended
September 30,
----------------------
2003 2002
-------- ---------
Change in fair value of derivative instruments $ 131 $ (926)
Less:
Income tax (expense) benefit (49) 348
-------- ---------
Other comprehensive income related to derivatives $ 82 $ (578)
======== =========
13
6. DERIVATIVES
As of September 30, 2003, the Company has Interest Rate Protection Agreements
for $100.0 million of its variable rate debt and commodity contracts for 2.6
million British Thermal Units (BTUs) of natural gas accounted as cash flow
hedges. The fair value of these derivatives are included in accrued liabilities
and other assets on the balance sheet for the Rate Agreements and commodity
contracts, respectively. At September 30, 2002, the Company had Rate Agreements
for $100.0 million of its variable rate debt and commodity contracts for 1.4
million BTUs of natural gas.
The Company does not believe it is exposed to more than a nominal amount of
credit risk in its interest rate and natural gas hedges as the counterparts are
established financial institutions.
All of the Company's derivatives qualify and are designated as cash flow hedges
at September 30, 2003. Hedge accounting is only applied when the derivative is
deemed to be highly effective at offsetting changes in fair values or
anticipated cash flows of the hedged item or transaction. The ineffective
portion of the change in the fair value of a derivative designated as a cash
flow hedge is recognized in current earnings. Ineffectiveness recognized in
earnings during the third quarter of 2003 and 2002 was not material.
7. NEW ACCOUNTING STANDARDS
In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, "Consolidation of Variable Interest Entities." The
Interpretation addresses the requirements for business enterprises to
consolidate related entities in which they are determined to be the primary
beneficiary as a result of their variable economic interests. The Interpretation
is intended to provide guidance in judging multiple economic interests in an
entity and in determining the primary beneficiary. The Interpretation outlines
disclosure requirements for variable interest entities in existence prior to
January 31, 2003, and requires consolidation of variable interest entities
created after January 31, 2003. In addition, the Interpretation requires
consolidation of variable interest entities created prior to January 31, 2003,
for fiscal periods beginning after December 15, 2003. This standard had no
impact on the Company's financial statements for the third quarter of 2003.
In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities" (SFAS No. 149). This standard amends and clarifies financial
accounting and reporting for derivative instruments. The standard is effective
for all contracts entered into or modified after June 30, 2003. This standard
had no impact on the Company's financial statements for the third quarter of
2003.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This standard
requires that certain financial instruments embodying obligations to transfer
assets or issue equity securities be classified as liabilities. It is effective
for financial instruments
14
entered into or modified after May 31, 2003, and is otherwise effective July 1,
2003. This standard had no impact on the Company's financial statements for the
third quarter of 2003.
8. STOCK OPTIONS
The Company has two stock-based employee compensation plans. The Company
accounts for the plans under the recognition and measurement principles of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25), and related Interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under those
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant. The following disclosures are in accordance with
SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123) as
amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition
and Disclosure" (SFAS No. 148). Since December 31, 2002, there has been no
change in assumptions for the pro forma stock option disclosure.
Three months ended September 30, 2003 2002
---------- ----------
Net Income:
Reported net income $ 12,018 $ 10,780
Stock-based employee compensation
expense determined under fair
value based method for all
awards, net of related tax
effects 360 369
---------- ----------
Pro forma net income $ 11,658 $ 10,411
========== ==========
Basic earnings per share:
Reported net income $ 0.89 $ 0.70
Stock-based employee compensation
expense determined under fair
value based method for all
awards, net of related tax
effects 0.03 0.02
---------- ----------
Pro forma basic earnings per share $ 0.86 $ 0.68
========== ==========
Diluted earnings per share:
Reported net income $ 0.88 $ 0.69
Stock-based employee compensation
expense determined under fair
value based method for all
awards, net of related tax
effects 0.03 0.02
---------- ----------
Pro forma diluted earnings per share $ 0.85 $ 0.67
========== ==========
15
Nine months ended September 30, 2003 2002
---------- ----------
Net Income:
Reported net income $ 21,929 $ 19,632
Stock-based employee compensation
expense determined under fair
value based method for all
awards, net of related tax
effects 1,105 1,166
---------- ----------
Pro forma net income $ 20,824 $ 18,466
========== ==========
Basic earnings per share:
Reported net income $ 1.59 $ 1.28
Stock-based employee compensation
expense determined under fair
value based method for all
awards, net of related tax
effects 0.08 0.08
---------- ----------
Pro forma basic earnings per share $ 1.51 $ 1.20
========== ==========
Diluted earnings per share:
Reported net income $ 1.59 $ 1.26
Stock-based employee compensation
expense determined under fair
value based method for all
awards, net of related tax
effects 0.08 0.08
---------- ----------
Proforma diluted earnings per share $ 1.51 $ 1.18
========== ==========
9. ACQUISITIONS
Traex Acquisition
On December 2, 2002, the Company acquired substantially all the assets of the
Traex business (Traex) from Menasha Corporation for $16.8 million in cash. Traex
manufactures and markets a wide-range of plastic products, including glassware
washing and storage racks, trays, dispensers and organizers for the foodservice
industry. Traex is located in Dane, Wisconsin. The operating results of Traex
have been included since the date of acquisition.
Royal Leerdam Acquisition
On December 31, 2002, the Company acquired the stock of Royal Leerdam (B.V.
Koninklijke Nederlandsche Glasfabriek Leerdam) for $44.1 million in cash from
BSN Glasspack N.V. Royal Leerdam manufactures and markets high-quality glass
stemware. Royal Leerdam is located in Leerdam,
16
Netherlands. The operating results of Royal Leerdam have been included since the
date of acquisition.
As part of the stock acquisition of Royal Leerdam (B. V. Koninklijke
Nederlandsche Glasfabriek Leerdam), the Company obtained an option, for a price
of one euro, to put the stock of B.V. Leerdam Crystal (a wholly owned subsidiary
of Royal Leerdam that manufactures and markets various hand-made crystal items)
back to BSN Glasspack N.V. This option was exercised during the second quarter
of 2003. The Company and BSN Glasspack N.V. are currently in discussions as to
the return of B.V. Leerdam Crystal to BSN Glasspack N.V.
There have been no changes in the purchase price allocations since the date of
the acquisitions. However, the Company expects some changes as it finalizes its
purchase accounting for both of these acquisitions in the fourth quarter of
2003.
The following unaudited pro forma results of operations assume the acquisitions
occurred as of January 1, 2002 (in thousands except per-share amounts):
Three Months ended September 30, 2002
- -------------------------------- -----------
Total revenues $ 122,701
Net income $ 11,081
-----------
Net income per share:
Basic $ 0.72
Diluted $ 0.71
Nine months ended September 30, 2002
- ------------------------------- -----------
Total revenues $ 366,705
Net income $ 21,066
-----------
Net income per share:
Basic $ 1.37
Diluted $ 1.35
The unaudited pro forma information is not necessarily indicative of the results
of operations that would have occurred had the acquisitions been consummated as
of January 1, 2002.
17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management is not aware of any events or uncertainties that are likely to have a
material impact on the company's prospective results of operations or financial
condition; however, major slowdowns in the retail, travel, or entertainment
industries could result from the impact of armed hostilities or any other
international or national calamity, including any act of terrorism. Additional
risk factors are discussed in Other Information in the section "Qualitative and
Quantitative Disclosures About Market Risk."
RESULTS OF OPERATIONS - THIRD QUARTER 2003 COMPARED WITH THIRD QUARTER 2002
Three months ended
September 30,
-----------------------
(Dollars in thousands)
-----------------------
2003 2002
-------- --------
Net Sales $129,126 $103,607
Gross profit 28,607 29,068
As a percent of sales 22.2% 28.1%
Income from operations $ 13,681 $ 14,392
As a percent of sales 10.6% 13.9%
Earnings before interest and income taxes $ 15,014 $ 14,142
As a percent of sales 11.6% 13.6%
Net income $ 12,018 $ 10,780
As a percent of sales 9.3% 10.4%
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.
Sales to customers located outside of the United States increased to $29.3
million from $10.5 million in the year-ago period. This is primarily due to the
acquisitions mentioned above. Excluding Royal Leerdam and Traex sales, sales to
customers outside of the United States increased 26 percent over the year-ago
period.
Gross profit (defined as net sales plus freight billed to customers less cost of
sales) was $28.6 million and, as a percent of sales, was 22.2 percent in the
third quarter of 2003 compared with $29.1 million and 28.1 percent in the third
quarter of 2002. Factors contributing to the
18
decline were an unfavorable sales mix, higher natural gas costs of approximately
$1.4 million and additional costs (mostly non-cash) for pension and
postretirement medical benefits of $1.7 million. These factors more than offset
the gross profit contribution from Royal Leerdam and Traex.
Income from operations was $13.7 million compared with $14.4 million in the
third quarter last year and, as a percent of sales, was 10.6 percent in the
third quarter of 2003 compared with 13.9 percent in the year-ago quarter.
Contributing to this decrease in income from operations was an increase in
selling, general and administrative expenses, entirely attributable to the
acquisitions of Royal Leerdam and Traex. Partially offsetting these higher
expenses were the contributions made by Traex and Royal Leerdam of $1.7 million
to income from operations during the third quarter of 2003.
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 49% equity ownership in Crisa
Industrial, L.L.C., Vitrocrisa Holding, S. de R.L. de C.V. and related Mexican
companies) were $1.2 million on a pretax basis, compared with $1.0 million in
the third quarter of 2002. The increase in equity earnings is primarily 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 miscellaneous non-trade receivables.
Net income was $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 $0.6 million 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 below in Table 1, net income per diluted share excluding tax
adjustments was 58 cents for the third quarter of 2003 as compared with 51 cents
for the third quarter of 2002.
19
RESULTS OF OPERATIONS - NINE MONTHS 2003 COMPARED WITH NINE MONTHS 2002
Nine months ended
September 30,
-----------------------
(Dollars in thousands)
-----------------------
2003 2002
-------- --------
Net Sales $369,283 $316,362
Gross profit 79,863 82,168
As a percent of sales 21.6% 26.0%
Income from operations $ 32,047 $ 41,412
As a percent of sales 8.7% 13.1%
Earnings before interest and income taxes $ 35,563 $ 31,546
As a percent of sales 9.6% 10.0%
Net income $ 21,929 $ 19,632
As a percent of sales 5.9% 6.2%
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. Sales to customers located outside of the United States
increased to $80.6 million from $32.7 million in the year-ago period. This is
primarily due to the acquisitions mentioned above. Excluding Royal Leerdam and
Traex sales, sales to customers outside of the United States increased by 8.6
percent compared with the year-ago period.
Gross profit (defined as net sales plus freight billed to customers less cost of
sales) was $79.9 million and as a percent of sales was 21.6 percent for the
first nine months of 2003 compared with $82.2 million and as a percent of sales
was 26.0 percent compared with the first nine months of 2002. In addition to the
lower pre-acquisition sales and reduced manufacturing activity, 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 $3.9 million. These factors more than offset the gross profit
contribution from Royal Leerdam and Traex.
Income from operations was $32.0 million compared with $41.4 million in the
year-ago period and as a percent of sales was 8.7 percent in the first nine
months of 2003 compared with 13.1 percent in the prior year period. Contributing
to this decrease in income from operations was an increase in selling, general
and administrative expenses of $7.2 million mainly attributable to the
acquisitions of Royal Leerdam and Traex.
20
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 nine-month
period. The prior period included $13.6 million of expenses related to an
abandoned acquisition. Equity earnings from Vitrocrisa (the company's 49% equity
ownership in Crisa Industrial, L.L.C., Vitrocrisa Holding, S. de R.L. de C.V.
and related Mexican companies), were $3.0 million on a pretax basis as compared
with $5.2 million pretax in the year-ago period as a result of higher natural
gas costs and lower activity levels.
Net income was $21.9 million, or $1.59 per diluted share, compared with net
income of $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 cents per diluted share, as detailed in
Table 3. Interest expense increased $3.7 million compared with the year-ago
period, primarily as a result of higher debt and the effective tax rate declined
to 15.0 percent from 22.9 percent as the result of a planned tax restructuring.
This 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. As detailed below in Table 2, net income per diluted share excluding
tax adjustments was $1.29 for the nine-month period in 2003 as compared with
$1.08 for the nine-month period of 2002.
21
In accordance with U.S. Securities and Exchange Commission (SEC) Regulation G,
the following tables provide non-GAAP measures used in the Management's
Discussion and Analysis of Financial Condition and Results of Operations 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
- -------------------------------------------------------------------------------
Table 2
RECONCILIATION OF NON-GAAP MEASURES FOR INCOME TAXES
(Dollars in thousands, except per-share amounts)
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
- -------------------------------------------------------------------------------
22
Table 3
RECONCILIATION OF NON-GAAP MEASURES FOR ABANDONED ACQUISITION EXPENSES
(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
- ------------------------------------------------------------------------------------
23
CAPITAL RESOURCES AND LIQUIDITY
The company had total debt of $244.9 million at September 30, 2003, compared
with $191.2 million at December 31, 2002. This increase in debt is attributable
to the repurchase of 1,500,000 shares for $38.9 million pursuant to the
company's modified Dutch Auction tender offer and seasonal increased working
capital requirements during the first nine months of 2003. Since mid-1998, the
company has repurchased 5,125,000 shares for $140.7 million. Board authorization
remains at September 30, 2003 for the purchase of an additional 1,000,000
shares. The repurchased common stock is used by the company to fund the Employee
Stock Purchase Plan (ESPP) and the company match contributions for its employee
401(k) plans.
During the first nine months of 2003, the company had capital expenditures of
$15.7 million compared with $10.7 million in the year-ago period. These
expenditures primarily relate to furnace and machine rebuild activity and
investments in higher productivity machinery and equipment. The company expects
to spend $21 to $23 million for capital expenditures for the year 2003.
On February 10, 2003, the company entered into an unsecured agreement for an
Amended and Restated Revolving Credit Agreement (Revolving Credit Agreement or
Agreement) as detailed in Footnote 1, "Long-Term Debt." The company had
additional debt capacity at September 30, 2003, under the Agreement of $112.8
million, including letters of credit of $4.6 million. Of Libbey's total
outstanding indebtedness, $62.5 million was subject to fluctuating interest
rates at September 30, 2003. A change of one percent in such rates would have
resulted in a change in interest expense of approximately $0.6 million on an
annual basis as of September 30, 2003. The Agreement is for a term of three
years maturing April 23, 2005, with an option to extend for two additional
one-year periods. The company is not aware of any trends, demands, commitments,
or uncertainties that will result or that are reasonably likely to result in a
material change in Libbey's liquidity.
On March 31, 2003, the company completed the issuance of $100 million of
privately placed senior notes. Eighty million dollars of the notes have an
average interest rate of 4.65% with an initial average maturity of 8.4 years and
a remaining average maturity of 7.9 years. The additional $20 million has a
floating interest rate at a margin over the London Interbank Offer Rate (LIBOR).
The proceeds of the note issuance were used to retire debt outstanding under the
Revolving Credit Agreement. The company believes that its cash from operations
and available borrowings under the Revolving Credit Agreement, private placement
senior notes and other short-term lines of credit will be sufficient to fund its
operating requirements, capital expenditures, and all other obligations
(including debt service and dividends) throughout the remaining term of the
Revolving Credit Agreement.
24
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The company is exposed to market risks due to changes in currency values,
although the majority of the company's revenues and expenses are denominated in
the U.S. dollar. The currency market risks include devaluations and other major
currency fluctuations relative to the U.S. dollar, euro or Mexican peso that
could reduce the cost competitiveness of the company's products or those of
Vitrocrisa's compared with foreign competition; the effect of high inflation in
Mexico and exchange rate changes to the value of the Mexican peso and impact of
those changes on the earnings and cash flow of Vitrocrisa, expressed under
accounting principles generally accepted in the United States.
The company is exposed to market risk associated with changes in interest rates
in the U.S. and has entered into Interest Rate Protection Agreements (Rate
Agreements) with respect to $100.0 million of debt as a means to manage its
exposure to fluctuating interest rates. The Rate Agreements effectively convert
this portion of the company's borrowings from variable rate debt to a fixed-rate
basis, thus reducing the impact of interest rate changes on future income. The
average fixed rate of interest for the company's borrowings related to the Rate
Agreements at September 30, 2003, is 5.8% and the total interest rate, including
applicable fees, is 7.6%. The average maturity of these Rate Agreements is 1.6
years at September 30, 2003. Total remaining debt not covered by the Rate
Agreements has fluctuating interest rates with a weighted average rate of 3.7%
at September 30, 2003. The company had $62.5 million of total debt subject to
fluctuating interest rates at September 30, 2003. A change of one percent in
such rates would result in a change in interest expense of approximately $0.6
million on an annual basis.
The interest rate differential to be received or paid under the Rate Agreements
is being recognized over the life of the Rate Agreements as an adjustment to
interest expense. If the counterparts to these Rate Agreements fail to perform,
the company would no longer be protected from interest rate fluctuations by
these Rate Agreements. However, the company does not anticipate nonperformance
by the counterparts.
The fair value of the company's Rate Agreements is determined using the market
standard methodology of netting the discounted expected future variable cash
receipts and the discounted future fixed cash payments. The variable cash
receipts are based on an expectation of future interest rates derived from
observed market interest rate forward curves. The company does not expect to
cancel these agreements and expects them to expire as originally contracted.
In addition to the Rate Agreements, the company has also entered into commodity
contracts to hedge the price of anticipated required purchases of natural gas.
The company has designated these derivative instruments as cash flow hedges. As
such, the changes in fair value of these derivative instruments are recorded in
accumulated other comprehensive income (loss) and reclassified into earnings as
the underlying hedged transaction or item affects earnings. At September 30,
2003, approximately $5.2 million of unrealized net losses were recorded in
accumulated other comprehensive loss.
25
OTHER INFORMATION
This document and supporting schedules contain statements that are not
historical facts and constitute projections, forecasts or forward-looking
statements. Such statements only reflect the company's best assessment at this
time, and may be identified by the use of forward-looking words or phrases such
as "anticipate," "believe," "expect," "intend," "may," "planned," "potential,"
"should," "will," "would" or similar phrases. Such forward-looking statements
involve risks and uncertainty and actual results may differ materially from such
statements and undue reliance should not be placed on such statements. Important
factors potentially affecting the company's performance include, but are not
limited to:
- major slowdowns in the retail, travel, restaurant and bar or
entertainment industries, including the impact of armed hostilities or
any other international or national calamity, including any act of
terrorism;
- significant increases in interest rates that increase the company's
borrowing costs;
- significant increases in per-unit costs for natural gas, electricity,
corrugated packaging and other purchased materials;
- increases in expenses associated with higher medical costs, 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, euro or Mexican peso that could reduce the cost
competitiveness of the company's or Vitrocrisa'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 expressed under
accounting principles generally accepted in the United States and cash
flow of Vitrocrisa;
- the inability to achieve savings and profit improvements at targeted
levels at the company and Vitrocrisa from capacity realignment,
re-engineering and operational restructuring programs or within the
intended time periods;
- protracted work stoppages related to collective bargaining agreements;
- 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;
- whether the company completes any significant acquisitions and whether
such acquisitions can operate profitably.
ITEM 4. CONTROLS AND PROCEDURES
The company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the company's Securities
Exchange Act of 1934 (the "Exchange Act") reports are recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that such information is accumulated
and communicated to the company's management, including its Chief Executive
Officer and Chief
26
Financial Officer, as appropriate, to allow for timely decisions regarding
required disclosure. In designing and evaluating the disclosure controls and
procedures, management recognizes that any controls and procedures, no matter
how well-designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management is required to apply
its judgment in evaluating the cost-benefit relationship of possible controls
and procedures. Also, we have investments in certain unconsolidated entities. As
we do not control or manage these entities, our disclosure controls and
procedures with respect to such entities are necessarily substantially more
limited than those we maintain with respect to our consolidated subsidiaries.
As required by SEC Rule 13a-15(b), the company carried out an evaluation, under
the supervision and with the participation of the company's management,
including the company's Chief Executive Officer and the company's Chief
Financial Officer, of the effectiveness of the design and operation of the
company's disclosure controls and procedures as of the end of the quarter
covered by this report. Based on the foregoing, the company's Chief Executive
Officer and Chief Financial Officer concluded that the company's disclosure
controls and procedures were effective at the reasonable assurance level.
There has been no change in the company's internal controls over financial
reporting during the company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the company's internal
controls over financial reporting.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The exhibits listed in the accompanying "Exhibit
Index" are filed as part of this report.
(b) Reports on Form 8-K:
A report under Item 9 was furnished dated July 23, 2003,
announcing financials results for the quarter-ended June 30,
2003.
27
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
3.1 Restated Certificate of Incorporation of Libbey Inc. (filed as Exhibit 3.1 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 and incorporated herein by
reference).
3.2 Amended and Restated By-Laws of Libbey Inc. (filed as Exhibit 3.2 to Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1993 and incorporated herein by reference).
4.1 Restated Certificate of Incorporation of Libbey Inc. (incorporated by reference herein as Exhibit 3.1).
4.2 Amended and Restated By-Laws of Libbey Inc. (incorporated by reference herein as Exhibit 3.2).
4.3 Rights Agreement, dated January 5, 1995, between Libbey Inc. and The Bank of New York, which includes the
form of Certificate of Designations of the Series A Junior Participating Preferred Stock of Libbey Inc.
as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred
Shares as Exhibit C, (filed as Exhibit 1 to Registrant's Registration Statement on Form 8-A dated
January 20, 1995 and incorporated herein by reference).
4.4 First Amendment to Rights Agreement, dated February 3, 1999, between Libbey Inc. and The Bank of
New York (filed as Exhibit 4.4 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 and incorporated herein by reference).
31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) (filed
herein).
31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) (filed
herein).
32.1 Chief Executive Officer Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To
Section 906 Of The Sarbanes-Oxley Act of 2002 (filed herein).
28
32.2 Chief Financial Officer Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To
Section 906 Of The Sarbanes-Oxley Act of 2002 (filed herein).
29
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 thereunto duly authorized.
LIBBEY INC.
Date November 12, 2003 By /s/ Scott M. Sellick
---------------------------------
Scott M. Sellick,
Vice President, Chief Financial Officer
(Principal Accounting Officer)
30