Attached files
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| 8-K - FORM 8-K - LIBBEY INC | form8k.htm |
Exhibit 99.1
 | Libbey Inc. 300 Madison Ave P.O. Box 10060 Toledo, OH 43699 |
NEWS RELEASE
INVESTOR CONTACT: | MEDIA CONTACT: | |
Kenneth Boerger | Lisa Fell | |
Vice President and Treasurer | Director of Corporate Communications | |
(419) 325-2279 | (419) 325-2001 | |
ken.boerger@libbey.com | lfell@libbey.com | |
FOR IMMEDIATE RELEASE
TUESDAY, OCTOBER 29, 2013
LIBBEY INC. ANNOUNCES THIRD QUARTER 2013 FINANCIAL RESULTS
Company announces completion of new three-year collective bargaining agreements with unions at its Toledo, Ohio, manufacturing facility: also announces that, after more than 43 years of service, Richard I. Reynolds has elected to retire as Executive Vice President, Strategy Program Management, by December 31, 2013
TOLEDO, OHIO, OCTOBER 29, 2013--Libbey Inc. (NYSE MKT: LBY) today reported results for the third quarter-ended September 30, 2013.
Third Quarter Financial Highlights
• | Sales for the third quarter were $204.4 million, compared to $209.2 million for the third quarter of 2012, a decrease of 2.3 percent (3.6 percent excluding currency fluctuation). |
• | Net cash provided by operating activities of $34.8 million set an all-time record for any third quarter. |
• | Free cash flow (see Table 4) of $24.5 million also set a record for any third quarter in Company history. |
“Although current demand is soft, we remain on track with our longer-term goals, including increasing profitability and cash generation. In the third quarter, we saw lower sales in the retail channel of distribution in China and the U.S. and Canada and to a more modest degree in the foodservice channel of distribution in these markets. We are encouraged by sales increases in Mexico and Latin America and in EMEA that contributed to our record third quarter cash flow from operations and free cash flow performance. Our restructuring initiatives over the last two years have strengthened our cost position considerably, and we are now focused on productivity improvement initiatives across our global operations. These steps, combined with our strong market positions, the breadth of our product portfolio, our drive for innovation and our superior customer service, position us well to realize value-driving benefits as demand in certain markets strengthens," said Stephanie A. Streeter, chief executive officer of Libbey Inc.
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Streeter continued, "We expect to deliver adjusted EBITDA margins for the full-year 2013 in line with 2012 on slightly lower 2013 sales, again validating our much improved cost platform. We now look forward to a stronger sales environment and the opportunity to better leverage our global capabilities."
Third Quarter Segment Sales and Operational Review
• | Sales in the Americas segment were $141.4 million, compared to $146.2 million in the third quarter of 2012, a decrease of 3.3 percent (3.8 percent excluding currency fluctuation). Sales performance was led by a 4.0 percent increase in sales within our Mexican and Latin American end market (2.7 percent excluding currency impact) and an 11.6 percent increase in our U.S. and Canada business-to-business channel. However, even with the improvement in business-to-business sales, overall sales within our US and Canada end market were lower by 6.5 percent. |
• | Sales in the EMEA segment increased 3.0 percent (a decrease of 2.2 percent excluding currency impact) to $35.5 million, compared to $34.5 million in the third quarter of 2012. |
• | Sales in Other were $27.5 million, compared to $28.5 million in the prior-year quarter. This decrease was largely the result of a 17.4 percent decrease in sales (19.4 percent excluding currency impact) in the Asia Pacific end market. This was mostly offset by a 3.0 percent increase in sales of our Syracuse China and World Tableware products. |
• | Earnings before interest and income taxes (EBIT) decreased to $13.3 million in the third quarter of 2013, compared to $24.1 million for the third quarter of 2012. |
• | Adjusted EBITDA of $28.7 million (see Tables 1 and 3) was $9.3 million less than the $38.0 million reported in the prior-year quarter. The primary factors contributing to the decline in adjusted EBITDA from the prior-year quarter include underabsorption of fixed costs of approximately $5 million from the previously announced realignment of our North American manufacturing and a planned rebuild of a furnace in China and an approximately $4 million negative impact as a result of revenue declines in the U.S. and China related to general softness in the business in these two geographies. |
• | Interest expense decreased by $1.0 million to $7.7 million, compared to $8.7 million in the year-ago period, primarily driven by lower debt. |
• | Our effective tax rate was 15.0 percent for the quarter-ended September 30, 2013, compared to 3.5 percent for the quarter-ended September 30, 2012. The effective tax rate was influenced by foreign jurisdictions with differing statutory rates, foreign withholding tax and other activity in jurisdictions with recorded valuation allowances. |
Nine-Month Financial Highlights
• | Sales for the first nine months of 2013 were $597.8 million, compared to $606.2 million for the first nine months of 2012, a decrease of 1.4 percent (2.5 percent excluding currency fluctuation). |
• | Net income for the first nine months of 2013 grew to $19.2 million, compared to net income of $5.4 million during the first nine months of 2012. |
• | EBIT increased to $49.8 million in the first nine months of 2013, compared to $36.8 million for the first nine months of 2012. |
• | Adjusted EBITDA was $96.8 million, compared to $102.5 million for the nine months ending September 30, 2012. |
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Nine-Month Segment Sales and Operational Review
• | Sales in the Americas segment were $406.7 million, compared to $424.4 million in the first nine months of 2012, a decrease of 4.2 percent (5.0 percent excluding currency fluctuation). Sales performance was led by a 4.0 percent increase in sales within our Mexican and Latin American end market (1.3 percent excluding currency impact), offset by a 7.6 percent decrease within our U.S. and Canada end market. |
• | Sales in the EMEA segment increased 8.8 percent (6.1 percent excluding currency impact) to $107.7 million, compared to $99.0 million in the first nine months of 2012. |
• | Sales in Other were $83.3 million, compared to $82.8 million in the prior-year period. This increase was largely the result of a 7.4 percent increase in sales of our Syracuse China and World Tableware products, offset by a 12.5 percent decrease in sales (13.8 percent excluding currency impact) in the Asia Pacific end market. |
• | Interest expense decreased by $4.8 million to $24.3 million, compared to $29.1 million in the year-ago period, primarily driven by lower interest rates. |
• | Our effective tax rate was 25.0 percent for the nine months ended September 30, 2013, compared to 30.4 percent for the nine months ended September 30, 2012. The effective tax rate was influenced by foreign jurisdictions with differing statutory rates, accruals related to uncertain tax positions, foreign withholding tax and other activity in jurisdictions with recorded valuation allowances. |
Balance Sheet and Liquidity
• | Libbey continued to strengthen its balance sheet as it realized a net reduction in debt outstanding of $7.6 million during the quarter. |
• | Libbey reported that it had available capacity of $82.9 million under its ABL credit facility as of September 30, 2013, with no loans currently outstanding. The Company also had cash on hand of $29.5 million at September 30, 2013. |
• | As of September 30, 2013, working capital, defined as inventories and accounts receivable less accounts payable, was $204.2 million, compared to $218.1 million at September 30, 2012. This decrease in working capital resulted from lower receivables and higher accounts payable, partially offset by higher inventories. |
Sherry Buck, chief financial officer, added, "We continued to reduce our outstanding debt as we generated record cash flow for any third quarter in Libbey's history. Additionally, we lowered our investment in working capital by more than six percent, or $13.9 million, when compared to the year-ago quarter. In spite of some of the atypical costs we incurred related to capacity utilization during the quarter as we realign our production in the Americas, we believe we are on track to further reduce our long-term debt while investing in the multi-year objectives laid out in our Libbey 2015 plan."
New Collective Bargaining Agreement
Libbey reported that it has successfully concluded negotiations on new collective bargaining agreements with all four local unions in Toledo, Ohio. The new three-year agreements have been ratified by union membership and will be in place through September 30, 2016.
Richard I. Reynolds Elects to Retire
The Company also announced that Richard I. Reynolds, Executive Vice President, Strategy Program Management, has elected to retire after more than 43 years of service. Ms. Streeter commended Reynolds on his exceptional career; "Dick embodies the heart and soul of this company and has made innumerable contributions to Libbey in the last 43 years. He has served in a wide variety of roles, including chief financial officer and chief operating officer. He has been an outstanding leadership role model for generations of Libbey employees. We wish him well as he
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starts this new chapter in his life." Mr. Reynolds will continue to serve as a member of the Board of Directors of the Company until its 2014 annual meeting of shareholders.
Webcast Information
Libbey will hold a conference call for investors on Tuesday, October 29, 2013, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet and is accessible from the Investor Relations' section of www.libbey.com. 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 14 days after the conclusion of the call.
About Libbey Inc.
Based in Toledo, Ohio, since 1888, we believe Libbey Inc. is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world. It supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries, and it is the leading manufacturer of tabletop products for the U.S. foodservice industry.
Libbey operates glass tableware manufacturing plants in the United States in Louisiana and Ohio as well as in Mexico, China, Portugal and the Netherlands. Its Crisa subsidiary, located in Monterrey, Mexico, is a leading producer of glass tableware in Mexico and Latin America. Its 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. Its Syracuse China subsidiary designs 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 hollowware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. In 2012, Libbey Inc.'s net sales totaled $825.3 million.
This press release includes forward-looking statements as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect only 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 and that actual results may differ materially from these statements, and that investors should not place undue reliance on such statements. These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's report on Form 10-K filed with the Commission on March 18, 2013. Important factors potentially affecting performance include but are not limited to risks related to our ability to borrow under our ABL credit agreement; increased competition from foreign suppliers endeavoring to sell glass tableware in the United States and Mexico; the impact of lower duties for imported products; global economic conditions and the related impact on consumer spending levels; major slowdowns in the retail, travel or entertainment industries in the United States, Canada, Mexico, Western Europe and Asia, caused by terrorist attacks or otherwise; significant increases in per-unit costs for natural gas, electricity, freight, corrugated packaging, and other purchased materials; high levels of indebtedness; high interest rates that increase the Company's borrowing costs or volatility in the financial markets that could constrain liquidity and credit availability; 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 Libbey Mexico, 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; and whether the Company completes any significant acquisition and whether such acquisitions can operate profitably. Any forward-looking statements speak only as of the date of this press release, and the Company assumes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release.
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Condensed Consolidated Statements of Operations
(dollars in thousands, except per-share amounts)
(unaudited)
Three months ended September 30, | |||||||
2013 | 2012 | ||||||
Net sales | $ | 204,386 | $ | 209,150 | |||
Freight billed to customers | 924 | 1,015 | |||||
Total revenues | 205,310 | 210,165 | |||||
Cost of sales (1) | 165,405 | 158,956 | |||||
Gross profit | 39,905 | 51,209 | |||||
Selling, general and administrative expenses (1) | 25,519 | 26,887 | |||||
Special charges (1) | 390 | — | |||||
Income from operations | 13,996 | 24,322 | |||||
Other expense | (706 | ) | (195 | ) | |||
Earnings before interest and income taxes | 13,290 | 24,127 | |||||
Interest expense | 7,706 | 8,720 | |||||
Income before income taxes | 5,584 | 15,407 | |||||
Provision for income taxes (1) | 835 | 546 | |||||
Net income | $ | 4,749 | $ | 14,861 | |||
Net income per share: | |||||||
Basic | $ | 0.22 | $ | 0.71 | |||
Diluted | $ | 0.21 | $ | 0.70 | |||
Weighted average shares: | |||||||
Outstanding | 21,493 | 20,896 | |||||
Diluted | 22,223 | 21,360 | |||||
(1) Refer to Table 1 for Special Items detail.
Libbey Inc.
Condensed Consolidated Statements of Operations
(dollars in thousands, except per-share amounts)
(unaudited)
Nine months ended September 30, | |||||||
2013 | 2012 | ||||||
Net sales | $ | 597,766 | $ | 606,226 | |||
Freight billed to customers | 2,447 | 2,482 | |||||
Total revenues | 600,213 | 608,708 | |||||
Cost of sales (1) | 460,614 | 458,096 | |||||
Gross profit | 139,599 | 150,612 | |||||
Selling, general and administrative expenses (1) | 81,551 | 82,391 | |||||
Special charges (1) | 4,619 | — | |||||
Income from operations | 53,429 | 68,221 | |||||
Loss on redemption of debt (1) | (2,518 | ) | (31,075 | ) | |||
Other expense | (1,090 | ) | (359 | ) | |||
Earnings before interest and income taxes | 49,821 | 36,787 | |||||
Interest expense | 24,267 | 29,085 | |||||
Income before income taxes | 25,554 | 7,702 | |||||
Provision for income taxes (1) | 6,380 | 2,343 | |||||
Net income | $ | 19,174 | $ | 5,359 | |||
Net income per share: | |||||||
Basic | $ | 0.90 | $ | 0.26 | |||
Diluted | $ | 0.87 | $ | 0.25 | |||
Weighted average shares: | |||||||
Outstanding | 21,300 | 20,835 | |||||
Diluted | 21,929 | 21,267 | |||||
(1) Refer to Table 2 for Special Items detail.
Libbey Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
September 30, 2013 | December 31, 2012 | ||||||
(unaudited) | |||||||
ASSETS: | |||||||
Cash and cash equivalents | $ | 29,466 | $ | 67,208 | |||
Accounts receivable — net | 91,611 | 80,850 | |||||
Inventories — net | 173,394 | 157,549 | |||||
Other current assets | 23,145 | 12,997 | |||||
Total current assets | 317,616 | 318,604 | |||||
Pension asset | 11,129 | 10,196 | |||||
Goodwill and purchased intangibles — net | 186,679 | 186,794 | |||||
Property, plant and equipment — net | 254,498 | 258,154 | |||||
Other assets | 24,738 | 28,428 | |||||
Total assets | $ | 794,660 | $ | 802,176 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY: | |||||||
Accounts payable | $ | 60,767 | $ | 65,712 | |||
Accrued liabilities | 85,648 | 84,268 | |||||
Pension liability (current portion) | 596 | 613 | |||||
Non-pension postretirement benefits (current portion) | 4,739 | 4,739 | |||||
Other current liabilities | 3,412 | 5,915 | |||||
Long-term debt due within one year | 15,146 | 4,583 | |||||
Total current liabilities | 170,308 | 165,830 | |||||
Long-term debt | 406,998 | 461,884 | |||||
Pension liability | 61,297 | 60,909 | |||||
Non-pension postretirement benefits | 67,304 | 71,468 | |||||
Other liabilities | 19,996 | 17,609 | |||||
Total liabilities | 725,903 | 777,700 | |||||
Common stock and capital in excess of par value | 321,586 | 313,586 | |||||
Retained deficit | (128,896 | ) | (148,070 | ) | |||
Accumulated other comprehensive loss | (123,933 | ) | (141,040 | ) | |||
Total shareholders’ equity | 68,757 | 24,476 | |||||
Total liabilities and shareholders’ equity | $ | 794,660 | $ | 802,176 | |||
Libbey Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
Three months ended September 30, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 4,749 | $ | 14,861 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,773 | 10,073 | |||||
Loss on asset sales and disposals | 481 | 127 | |||||
Change in accounts receivable | 732 | (6,023 | ) | ||||
Change in inventories | 3,722 | (3,006 | ) | ||||
Change in accounts payable | 318 | (7,499 | ) | ||||
Accrued interest and amortization of finance fees | 7,266 | 8,186 | |||||
Pension & non-pension postretirement benefits | 3,118 | 1,241 | |||||
Restructuring | (797 | ) | — | ||||
Accrued liabilities & prepaid expenses | 3,533 | 9,770 | |||||
Income taxes | (2,106 | ) | (921 | ) | |||
Share-based compensation expense | 990 | 601 | |||||
Other operating activities | 988 | 479 | |||||
Net cash provided by operating activities | 34,767 | 27,889 | |||||
Investing activities: | |||||||
Additions to property, plant and equipment | (10,381 | ) | (5,412 | ) | |||
Proceeds from asset sales and other | 73 | 131 | |||||
Net cash used in investing activities | (10,308 | ) | (5,281 | ) | |||
Financing activities: | |||||||
Borrowings on ABL credit facility | 12,400 | — | |||||
Repayments on ABL credit facility | (22,200 | ) | — | ||||
Other repayments | (4,397 | ) | (9,551 | ) | |||
Other borrowings | 6,094 | 1,234 | |||||
Stock options exercised | 2,059 | 253 | |||||
Debt issuance costs and other | — | (880 | ) | ||||
Net cash used in financing activities | (6,044 | ) | (8,944 | ) | |||
Effect of exchange rate fluctuations on cash | 507 | 106 | |||||
Increase in cash | 18,922 | 13,770 | |||||
Cash at beginning of period | 10,544 | 19,577 | |||||
Cash at end of period | $ | 29,466 | $ | 33,347 | |||
Libbey Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
Nine months ended September 30, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 19,174 | $ | 5,359 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 34,170 | 30,897 | |||||
Loss on asset sales and disposals | 514 | 294 | |||||
Change in accounts receivable | (10,147 | ) | (6,497 | ) | |||
Change in inventories | (14,770 | ) | (25,097 | ) | |||
Change in accounts payable | (5,999 | ) | (12,087 | ) | |||
Accrued interest and amortization of discounts and finance fees | 7,876 | 532 | |||||
Call premium on senior notes | 1,350 | 23,602 | |||||
Write-off of finance fee & discounts on senior notes and ABL | 1,168 | 10,975 | |||||
Pension & non-pension postretirement benefits | 8,322 | (81,338 | ) | ||||
Restructuring | 2,858 | — | |||||
Accrued liabilities & prepaid expenses | (13,052 | ) | 7,742 | ||||
Income taxes | (6,285 | ) | (1,041 | ) | |||
Share-based compensation expense | 3,299 | 2,466 | |||||
Other operating activities | 2,994 | 563 | |||||
Net cash provided by (used in) operating activities | 31,472 | (43,630 | ) | ||||
Investing activities: | |||||||
Additions to property, plant and equipment | (30,152 | ) | (17,244 | ) | |||
Proceeds from asset sales and other | 81 | 550 | |||||
Net cash used in investing activities | (30,071 | ) | (16,694 | ) | |||
Financing activities: | |||||||
Borrowings on ABL credit facility | 42,800 | — | |||||
Repayments on ABL credit facility | (42,800 | ) | — | ||||
Other repayments | (4,511 | ) | (19,513 | ) | |||
Other borrowings | 6,094 | 1,234 | |||||
(Payments on) proceeds from 6.875% senior notes | (45,000 | ) | 450,000 | ||||
Payments on 10% senior notes | — | (360,000 | ) | ||||
Call premium on senior notes | (1,350 | ) | (23,602 | ) | |||
Stock options exercised | 5,107 | 293 | |||||
Debt issuance costs and other | — | (13,034 | ) | ||||
Net cash (used in) provided by financing activities | (39,660 | ) | 35,378 | ||||
Effect of exchange rate fluctuations on cash | 517 | 2 | |||||
Decrease in cash | (37,742 | ) | (24,944 | ) | |||
Cash at beginning of period | 67,208 | 58,291 | |||||
Cash at end of period | $ | 29,466 | $ | 33,347 | |||
In accordance with the SEC’s Regulation G, tables 1, 2, 3, 4 and 5 provide non-GAAP measures used in this earnings release and a reconciliation to the most closely related Generally Accepted Accounting Principle (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 assesses performance. 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.
Table 1 | ||||||||||||||||||||||||
Reconciliation of "As Reported" Results to "As Adjusted" Results - Quarter | ||||||||||||||||||||||||
(dollars in thousands, except per-share amounts) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Three months ended September 30, | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
As Reported | Special Items | As Adjusted | As Reported | Special Items | As Adjusted | |||||||||||||||||||
Net sales | $ | 204,386 | $ | — | $ | 204,386 | $ | 209,150 | $ | — | $ | 209,150 | ||||||||||||
Freight billed to customers | 924 | — | 924 | 1,015 | — | 1,015 | ||||||||||||||||||
Total revenues | 205,310 | — | 205,310 | 210,165 | — | 210,165 | ||||||||||||||||||
Cost of sales | 165,405 | 2,749 | 162,656 | 158,956 | 2,342 | 156,614 | ||||||||||||||||||
Gross profit | 39,905 | (2,749 | ) | 42,654 | 51,209 | (2,342 | ) | 53,551 | ||||||||||||||||
Selling, general and administrative expenses | 25,519 | 448 | 25,071 | 26,887 | 1,444 | 25,443 | ||||||||||||||||||
Special charges | 390 | 390 | — | — | — | — | ||||||||||||||||||
Income from operations | 13,996 | (3,587 | ) | 17,583 | 24,322 | (3,786 | ) | 28,108 | ||||||||||||||||
Other expense | (706 | ) | — | (706 | ) | (195 | ) | — | (195 | ) | ||||||||||||||
Earnings before interest and income taxes | 13,290 | (3,587 | ) | 16,877 | 24,127 | (3,786 | ) | 27,913 | ||||||||||||||||
Interest expense | 7,706 | — | 7,706 | 8,720 | — | 8,720 | ||||||||||||||||||
Income before income taxes | 5,584 | (3,587 | ) | 9,171 | 15,407 | (3,786 | ) | 19,193 | ||||||||||||||||
Provision for income taxes | 835 | (976 | ) | 1,811 | 546 | (26 | ) | 572 | ||||||||||||||||
Net income | $ | 4,749 | $ | (2,611 | ) | $ | 7,360 | $ | 14,861 | $ | (3,760 | ) | $ | 18,621 | ||||||||||
Net income per share: | ||||||||||||||||||||||||
Basic | $ | 0.22 | $ | (0.12 | ) | $ | 0.34 | $ | 0.71 | $ | (0.18 | ) | $ | 0.89 | ||||||||||
Diluted | $ | 0.21 | $ | (0.12 | ) | $ | 0.33 | $ | 0.70 | $ | (0.18 | ) | $ | 0.87 | ||||||||||
Weighted average shares: | ||||||||||||||||||||||||
Outstanding | 21,493 | 20,896 | ||||||||||||||||||||||
Diluted | 22,223 | 21,360 | ||||||||||||||||||||||
Three months ended September 30, 2013 | Three months ended September 30, 2012 | |||||||||||||||||||||||||||
Special Items Detail - (Income) Expense: | Restructuring Charges(1) | Furnace Malfunction(2) | Pension Settlement | Other | Total Special Items | Severance and Other (3) | Total Special Items | |||||||||||||||||||||
Cost of sales | $ | — | $ | 2,437 | $ | 312 | $ | — | $ | 2,749 | $ | 2,342 | $ | 2,342 | ||||||||||||||
SG&A | — | — | 448 | — | 448 | 1,444 | 1,444 | |||||||||||||||||||||
Special charges | 390 | — | — | — | 390 | — | — | |||||||||||||||||||||
Income taxes | (292 | ) | (300 | ) | (208 | ) | (176 | ) | (976 | ) | (26 | ) | (26 | ) | ||||||||||||||
Total Special Items | $ | 98 | $ | 2,137 | $ | 552 | $ | (176 | ) | $ | 2,611 | $ | 3,760 | $ | 3,760 | |||||||||||||
(1) Restructuring charges relate to discontinuing production of certain glassware in North America and reducing manufacturing capacity at our Shreveport, Louisiana, facility.
(2) Furnace malfunction relates to loss of production and disposal of fixed assets at our Toledo, Ohio, manufacturing facility.
(3) Severance and other relates to implementation of our new strategic plan.
Table 2 | ||||||||||||||||||||||||
Reconciliation of "As Reported" Results to "As Adjusted" Results - Nine Months | ||||||||||||||||||||||||
(dollars in thousands, except per-share amounts) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Nine months ended September 30, | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
As Reported | Special Items | As Adjusted | As Reported | Special Items | As Adjusted | |||||||||||||||||||
Net sales | $ | 597,766 | $ | — | $ | 597,766 | $ | 606,226 | $ | — | $ | 606,226 | ||||||||||||
Freight billed to customers | 2,447 | — | 2,447 | 2,482 | — | 2,482 | ||||||||||||||||||
Total revenues | 600,213 | — | 600,213 | 608,708 | — | 608,708 | ||||||||||||||||||
Cost of sales | 460,614 | 4,448 | 456,166 | 458,096 | 2,342 | 455,754 | ||||||||||||||||||
Gross profit | 139,599 | (4,448 | ) | 144,047 | 150,612 | (2,342 | ) | 152,954 | ||||||||||||||||
Selling, general and administrative expenses | 81,551 | 2,944 | 78,607 | 82,391 | 1,444 | 80,947 | ||||||||||||||||||
Special charges | 4,619 | 4,619 | — | — | — | — | ||||||||||||||||||
Income from operations | 53,429 | (12,011 | ) | 65,440 | 68,221 | (3,786 | ) | 72,007 | ||||||||||||||||
Loss on redemption of debt | (2,518 | ) | (2,518 | ) | — | (31,075 | ) | (31,075 | ) | — | ||||||||||||||
Other expense | (1,090 | ) | — | (1,090 | ) | (359 | ) | — | (359 | ) | ||||||||||||||
Earnings before interest and income taxes | 49,821 | (14,529 | ) | 64,350 | 36,787 | (34,861 | ) | 71,648 | ||||||||||||||||
Interest expense | 24,267 | — | 24,267 | 29,085 | — | 29,085 | ||||||||||||||||||
Income before income taxes | 25,554 | (14,529 | ) | 40,083 | 7,702 | (34,861 | ) | 42,563 | ||||||||||||||||
Provision for income taxes | 6,380 | (1,871 | ) | 8,251 | 2,343 | (26 | ) | 2,369 | ||||||||||||||||
Net income | $ | 19,174 | $ | (12,658 | ) | $ | 31,832 | $ | 5,359 | $ | (34,835 | ) | $ | 40,194 | ||||||||||
Net income per share: | ||||||||||||||||||||||||
Basic | $ | 0.90 | $ | (0.59 | ) | $ | 1.49 | $ | 0.26 | $ | (1.67 | ) | $ | 1.93 | ||||||||||
Diluted | $ | 0.87 | $ | (0.58 | ) | $ | 1.45 | $ | 0.25 | $ | (1.64 | ) | $ | 1.89 | ||||||||||
Weighted average shares: | ||||||||||||||||||||||||
Outstanding | 21,300 | 20,835 | ||||||||||||||||||||||
Diluted | 21,929 | 21,267 | ||||||||||||||||||||||
Nine months ended September 30, 2013 | Nine months ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
Special Items Detail - (Income) Expense: | Restructuring Charges(1) | Abandoned Property | Pension Settlement | Finance Fees (2) | Furnace Malfunction(3) | Total Special Items | Finance Fees (2) | Severance and Other(4) | Total Special Items | |||||||||||||||||||||||||||
Cost of sales | $ | 1,699 | $ | — | $ | 312 | $ | — | $ | 2,437 | $ | 4,448 | $ | — | $ | 2,342 | $ | 2,342 | ||||||||||||||||||
SG&A | — | 1,781 | 1,163 | — | — | 2,944 | — | 1,444 | 1,444 | |||||||||||||||||||||||||||
Special charges | 4,619 | — | — | — | — | 4,619 | — | — | ||||||||||||||||||||||||||||
Loss on redemption of debt | — | — | — | 2,518 | — | 2,518 | 31,075 | 31,075 | ||||||||||||||||||||||||||||
Income taxes | (777 | ) | (219 | ) | (266 | ) | (309 | ) | (300 | ) | (1,871 | ) | — | (26 | ) | (26 | ) | |||||||||||||||||||
Total Special Items | $ | 5,541 | $ | 1,562 | $ | 1,209 | $ | 2,209 | $ | 2,137 | $ | 12,658 | $ | 31,075 | $ | 3,760 | $ | 34,835 | ||||||||||||||||||
(1) Restructuring charges relate to discontinuing production of certain glassware in North America and reducing manufacturing capacity at our Shreveport, Louisiana, facility.
(2) Finance fees for the nine months ended September 2013 include the write-off of unamortized finance fees and call premium payments on the $45.0 million senior notes redeemed in May 2013. Finance fees for the nine months ended September 2012 include the write-off of unamortized finance fees and discounts and call premium payments on the ABL Facility and $360.0 million senior notes redeemed in May and June 2012, partially offset by the write-off of the debt carrying value adjustment related to the termination of the $80.0 million interest rate swap.
(3) Furnace malfunction relates to loss of production and disposal of fixed assets at our Toledo, Ohio, manufacturing facility.
(4) Severance and other relates to implementation of our new strategic plan.
Table 3 | ||||||||||||||||
Reconciliation of Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Reported net income | $ | 4,749 | $ | 14,861 | $ | 19,174 | $ | 5,359 | ||||||||
Add: | ||||||||||||||||
Interest expense | 7,706 | 8,720 | 24,267 | 29,085 | ||||||||||||
Provision for income taxes | 835 | 546 | 6,380 | 2,343 | ||||||||||||
Depreciation and amortization | 11,773 | 10,073 | 34,170 | 30,897 | ||||||||||||
EBITDA | 25,063 | 34,200 | 83,991 | 67,684 | ||||||||||||
Add: Special items before interest and taxes | 3,587 | 3,786 | 14,529 | 34,861 | ||||||||||||
Less: Depreciation expense included in special items and also in depreciation and amortization above | — | — | (1,699 | ) | — | |||||||||||
Adjusted EBITDA | $ | 28,650 | $ | 37,986 | $ | 96,821 | $ | 102,545 | ||||||||
Table 4 | ||||||||||||||||
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net cash provided by (used in) operating activities | $ | 34,767 | $ | 27,889 | $ | 31,472 | $ | (43,630 | ) | |||||||
Capital expenditures | (10,381 | ) | (5,412 | ) | (30,152 | ) | (17,244 | ) | ||||||||
Proceeds from asset sales and other | 73 | 131 | 81 | 550 | ||||||||||||
Free Cash Flow | $ | 24,459 | $ | 22,608 | $ | 1,401 | $ | (60,324 | ) | |||||||
Table 5 | ||||||||||||||||
Summary Business Segment Information | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net Sales: | ||||||||||||||||
Americas (1) | $ | 141,390 | $ | 146,169 | $ | 406,740 | $ | 424,428 | ||||||||
EMEA (2) | 35,491 | 34,454 | 107,714 | 98,969 | ||||||||||||
Other (3) | 27,505 | 28,527 | 83,312 | 82,829 | ||||||||||||
Consolidated | $ | 204,386 | $ | 209,150 | $ | 597,766 | $ | 606,226 | ||||||||
Segment Earnings Before Interest & Taxes (Segment EBIT) (4) : | ||||||||||||||||
Americas (1) | $ | 20,580 | $ | 27,020 | $ | 71,230 | $ | 73,708 | ||||||||
EMEA (2) | (258 | ) | 1,804 | (1,172 | ) | 1,526 | ||||||||||
Other (3) | 202 | 5,378 | 8,366 | 16,011 | ||||||||||||
Segment EBIT | $ | 20,524 | $ | 34,202 | $ | 78,424 | $ | 91,245 | ||||||||
Reconciliation of Segment EBIT to Net Income: | ||||||||||||||||
Segment EBIT | $ | 20,524 | $ | 34,202 | $ | 78,424 | $ | 91,245 | ||||||||
Retained corporate costs (5) | (3,647 | ) | (6,289 | ) | (14,074 | ) | (19,597 | ) | ||||||||
Consolidated Adjusted EBIT | 16,877 | 27,913 | 64,350 | 71,648 | ||||||||||||
Loss on redemption of debt | — | — | (2,518 | ) | (31,075 | ) | ||||||||||
Severance | — | (3,911 | ) | — | (3,911 | ) | ||||||||||
Pension settlement and curtailment | (760 | ) | 125 | (1,475 | ) | 125 | ||||||||||
Furnace malfunction | (2,437 | ) | — | (2,437 | ) | — | ||||||||||
Restructuring charges | (390 | ) | — | (6,318 | ) | — | ||||||||||
Abandoned property | — | — | (1,781 | ) | — | |||||||||||
Special Items before interest and taxes | (3,587 | ) | (3,786 | ) | (14,529 | ) | (34,861 | ) | ||||||||
Interest expense | (7,706 | ) | (8,720 | ) | (24,267 | ) | (29,085 | ) | ||||||||
Income taxes | (835 | ) | (546 | ) | (6,380 | ) | (2,343 | ) | ||||||||
Net income | $ | 4,749 | $ | 14,861 | $ | 19,174 | $ | 5,359 | ||||||||
Depreciation & Amortization: | ||||||||||||||||
Americas (1) | $ | 5,975 | $ | 6,045 | $ | 19,824 | $ | 18,248 | ||||||||
EMEA (2) | 2,930 | 2,375 | 7,923 | 7,389 | ||||||||||||
Other (3) | 2,587 | 1,325 | 5,377 | 4,156 | ||||||||||||
Corporate | 281 | 328 | 1,046 | 1,104 | ||||||||||||
Consolidated | $ | 11,773 | $ | 10,073 | $ | 34,170 | $ | 30,897 | ||||||||
(1) Americas—includes worldwide sales of manufactured and sourced glass tableware having an end market destination in North and South America.
(2) EMEA—includes worldwide sales of manufactured and sourced glass tableware having and end market destination in Europe, the Middle East and Africa.
(3) Other—includes worldwide sales of manufactured and sourced glass tableware having an end market destination in Asia Pacific and worldwide sales of sourced ceramic dinnerware, metal tableware, hollowware, and serveware.
(4) Segment EBIT represents earnings before interest and taxes and excludes amounts related to certain items we consider not representative of ongoing operations as well as certain retained corporate costs.
(5) Retained corporate costs includes certain headquarter, administrative and facility costs, and other costs that are not allocable to the reporting segments.