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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 20, 1997
LIBBEY INC.
(Exact name of registrant as specified in its charter)
Delaware 1-12084 34-1559357
(State of incorporation) (Commission File Number) (IRS Employer identification
No.)
300 Madison Avenue
Toledo, Ohio 43604
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 325-2100
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ITEM 5. OTHER INFORMATION
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On October 20, 1997 Libbey Inc. (the "Company") through a press
release announced third quarter financial results and announced plans
to issue additional common stock
(c) EXHIBITS
Exhibit
No. Description
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99 Text of Press Release dated October 20, 1997.
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.
Registrant
Date: October 21, 1997 By: /s/ Kenneth G. Wilkes
--------------------------- ---------------------------
Kenneth G. Wilkes
Vice President, Chief Financial Officer
and Treasurer
(Principal Accounting Officer)
2
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EXHIBIT 99
NEWS RE: LIBBEY INC.
BULLENTIN 300 MADISON AVE.
P.0. BOX 10060
FROM: TOLEDO, OH 43699
FRB
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THE FINANCIAL RELATIONS BOARD INC.
FOR FURTHER INFORMATION:
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
KENNETH WILKES JENIFER ESTABROOK SUZY LYNDE
VP/CFO & TREASURER GENERAL INQUIRIES ANALYST INQUIRIES
(419)325-2490 (312)640-6787 (312)640-6772
FOR IMMEDIATE RELEASE
MONDAY, OCTOBER 20, 1997
LIBBEY INC. ANNOUNCES THIRD-QUARTER EARNINGS OF 74(CENT) PER SHARE,
CITES HIGHER SALES, IMPROVED PROFITABILITY;
PLANS TO ISSUE ADDITIONAL COMMON STOCK
TOLEDO, OHIO, OCTOBER 20, 1997 -- LIBBEY INC. (NYSE: LBY) today announced that
sales, earnings before interest and income taxes (EBIT) and net income increased
in the third quarter ended September 30, 1997, compared with the year-ago
period.
Sales in the third quarter increased 10.5 percent to $104.8 million from $94.9
million a year earlier. EBIT totaled $22.8 million, up 14.9 percent from $19.9
million in the year-ago quarter.
Net income increased 15.8 percent to $11.6 million, or 74 cents per share, from
$10.0 million, or 65 cents per share, including common stock equivalents, in the
year-ago quarter.
IMPROVED SALES PERFORMANCE
John F. Meier, chairman and chief executive officer, commented, "Our sales
trends improved in the quarter, compared with a slow start earlier this year. We
experienced solid growth in glassware sales led by increases in retail, premium
and export sales. Our foodservice sales continued to improve with modest growth
compared with the year-ago period."
The improvement also reflected the effects of the August 29, 1997, acquisition
of World Tableware and the distribution agreement with Vitrocrisa S.A. de C.V.,
the largest manufacturer of glass tableware in Mexico, whereby Libbey is the
exclusive distributor of Vitrocrisa's glass tableware products in the United
States and Canada.
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LIBBEY INC.
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GROWTH IN PROFIT MARGINS
Earnings before interest and income taxes (EBIT) grew to $22.8 million, or 14.9
percent, and as a percentage of sales increased to 21.8 percent as compared with
20.9 percent in the year-ago period. Growth in income from operations
contributed to the increase, as the benefits of greater sales of higher-margin
products were only partially diminished by higher distribution costs and
increases in selling expenses.
Meier commented, "The improved sales mix is reflective of our continuing effort
to sell higher-value products. Higher expenses from realigning certain
warehousing and distribution facilities and increased sales support resources
are consistent with our goal of improved customer service. Efficiencies in these
areas are being pursued."
The increase in EBIT also resulted from equity earnings associated with the
company's 49 percent joint venture investment in Mexico. The investment occurred
on August 29, 1997.
Net income as a percentage of sales increased to 11.0 percent from 10.5 percent
in the year-ago period. A higher EBIT margin more than offset an increase in the
company's effective tax rate to 39.2 percent from 39.0 percent in the year-ago
period.
Meier added, "We are pleased that the Vitro transactions, consummated in late
August, are already having a positive, albeit modest, effect on our earnings."
NINE-MONTH RESULTS
For the nine months ended September 30, sales rose 1.6 percent to $287.3 million
from $282.7 million in the year-ago period. Earnings before interest and income
taxes (EBIT) increased 10.5 percent, to $53.8 million from $48.7 million in the
nine-month period of 1996. Net income grew by 16.4 percent to $26.3 million from
$22.6 million a year ago.
Sales in the first nine months were affected by the company's decision to exit
certain pieces of low- margin sales in late 1996, principally in the industrial
area. Improved sales mix was a result of the loss of low-margin business, and
these benefits were only partially offset by higher operating expenses. Higher
operating profits and the inclusion of equity earnings from the company's new
joint venture investment contributed to growth in EBIT of 10.5 percent to $53.8
million.
PROFIT MARGINS
For the nine months ended September 30, earnings before interest and income
taxes (EBIT) as a percentage of sales increased to 18.7 percent from 17.2
percent in the year-ago period. Improved sales mix of higher-margin products and
lower manufacturing costs offset higher distribution and sales support costs.
Net income as a percentage of sales increased to 9.2 percent compared with 8.0
percent in the year-ago period. Reasons for the improvement include higher EBIT
margins,
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LIBBEY INC.
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lower interest expense due to reduced debt and lower borrowing costs on average,
and a reduction in the company's effective tax rate to 39.1 percent from 39.3
percent in the year-ago period.
FINANCIAL POSITION
At September 30, the company's total debt was $320.0 million, an increase of
$77.5 million from the year-ago amount of $242.5 million. The increase is
attributable to the acquisition and joint venture investment consummated by the
company on August 29, which included a cash purchase price of approximately $100
million and refinancing of $5 million of related debt, both of which were
financed under the company's bank facility.
The company's operating cash flow, or earnings before interest, income taxes,
depreciation and amortization (EBITDA), increased to $69.7 million for the
nine-month period ending September 30, up 7.1 percent from the year-ago period.
The company's EBITDA to interest ratio increased for the nine-month period
ending September 30 to 6.6x, compared with 5.7x in the year-ago period.
Meier, commenting on the company's financial position, said, "Our cash flows are
growing, and adjusting for the acquisition debt, we expect another year of debt
reduction. Interest coverage remains strong, and our recently refinanced bank
facility, with an extended maturity and greater financing flexibility, is
consistent with our current requirements. However, as always, we consider
refinancing opportunities on a regular basis."
PLANS TO ISSUE COMMON STOCK
The company also announced its plans to issue under its effective shelf
registration statement up to two million shares of common stock in the near
future, the proceeds of which would be used to pay down bank debt.
OUTLOOK FOR THE FOURTH QUARTER
Meier concluded, "The recent acquisitions and improvement in our core sales
trends are reason for optimism. However, we are influenced by how changes in
economic conditions will affect the foodservice and consumer housewares
industries in the United States. Currently, we expect modest growth in these key
markets in the months ahead. In addition, continued attention to cost control
will be required as we enhance our manufacturing, distribution and customer
support functions. On balance, we have a positive outlook, and our target is to
continue double-digit growth in earnings."
The company indicated that all of the statements relating to future performance
in this release is "forward-looking" information, as defined in the Securities
Litigation Reform Act of 1995. This Safe Harbor Statement is being made pursuant
to the Act and with the intention of obtaining the benefits of the so-called
Safe Harbor provisions of the Act. The company's operations are subject to a
number of risks as more fully set forth in the company's 8K dated August 8,
1996. Actual performance may differ materially from that projected in any such
statements.
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LIBBEY INC.
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Libbey Inc.:
- is the largest producer of glass tableware in North America;
- is a leading producer of tabletop products for the foodservice industry;
- is a joint venture partner in the largest glass tableware company in
Mexico, Vitrocrisa;
- exports to more than 100 countries; and,
- provides technical assistance to glass tableware manufacturers around the
world.
Based in Toledo, Ohio, the company operates glass tableware manufacturing plants
in California, Louisiana, Ohio and Ontario, Canada. Through its Syracuse China
subsidiary, the company designs, manufactures and distributes an extensive line
of high-quality ceramic dinnerware, principally for the foodservice industry in
the United States. And through its World Tableware subsidiary, the company
imports and sells a full-line of metal flatware and hollowware and an assortment
of ceramic dinnerware and other tabletop items, principally for the foodservice
industry in the United States. In 1996, its net sales totaled $398 million.
FOR FURTHER INFORMATION REGARDING LIBBEY INC., FREE OF CHARGE VIA FAX,
DIAL 1-800-PRO-INFO AND US TICKER SYMBOL "LBY."
TABLES TO FOLLOW...
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LIBBEY INC.
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
September 30, September 30, Percent
1997 1996 Change
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<S> <C> <C> <C>
Net sales $104,824 $94,888 10.5%
Royalties and net technical assistance 551 695
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Total revenues 105,375 95,583 10.2%
Cost of sales 71,959 66,376 8.4%
Selling, general and administrative
expenses 11,659 9,817 18.8%
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Income from operations 21,757 19,390 12.2%
Equity earnings 830
Other income (expense) 258 489
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Earnings before interest and
income taxes 22,845 19,879 14.9%
Interest expense -- net (3,854) (3,513)
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Income before income taxes 18,991 16,366 16.0%
Provision for income taxes 7,436 6,391
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Net income $11,555 $9,975 15.8%
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Net income per share $0.74 $0.65
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Weighted average shares outstanding
including common share equivalents 15,666 15,440
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</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30, September 30, Percent
1997 1996 Change
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<S> <C> <C> <C>
Net sales $287,257 $282,693 1.6%
Royalties and net technical assistance 2,171 1,927
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Total revenues 289,428 284,620 1.7%
Cost of sales 200,628 204,240 -1.8%
Selling, general and
administrative expenses 36,116 32,919 9.7%
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Income from operations 52,684 47,461 11.0%
Equity earnings 830
Other income (expense) 302 1,248
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Earnings before interest and
income taxes 53,816 48,709 10.5%
Interest expense--net (10,598) (11,445)
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Income before income taxes 43,218 37,264 16.0%
Provision for income taxes 16,885 14,646
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Net income $26,333 $22,618 16.4%
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Net income per share $1.69 $1.47
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Weighted average shares outstanding
including common share equivalents 15,569 15,381
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</TABLE>
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LIBBEY INC.
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LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 30, September 30,
1997 1996 1996
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<S> <C> <C> <C>
ASSETS
Cash $ 2,205 $ 1,990 $ 4,617
Accounts receivable 61,049 42,054 42,440
Inventories 118,806 76,381 87,944
Other current assets 6,895 6,719 7,304
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Total current assets 188,955 127,144 142,305
Investments 81,305
Other assets 34,235 31,488 30,641
Goodwill 45,455 37,731 38,576
Net property, plant and equipment 116,826 119,370 120,232
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Total assets $466,776 $315,733 $331,754
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LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 10,000 $ 4,525 $ 9,187
Accounts payable 27,036 22,506 15,331
Accrued liabilities 27,860 23,102 19,908
Other current liabilities 18,535 15,713 16,534
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Total current liabilities 83,431 65,846 60,960
Long-term debt 310,034 202,851 233,342
Deferred taxes and other liabilities 12,942 14,318 13,032
Nonpension retirement benefits 52,301 51,165 51,915
Total shareholders' equity (deficit) 8,068 (18,447) (27,495)
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Total liabilities and
shareholders' equity $466,776 $315,733 $331,754
======== ======== ========
</TABLE>
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LIBBEY INC.
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30, September 30,
1997 1996
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<S> <C> <C>
Operating activities
Net income $26,333 $22,618
Depreciation and amortization 15,863 16,334
Equity earnings (830)
Other non-cash charges (36) 940
Net change in components of working
capital and other assets (38,645) (17,037)
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Net cash provided by operating
activities 2,685 22,855
Investing activities
Additions to property plant and equipment (10,975) (11,121)
Vitro investments (104,487)
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Net cash used in investing activities (115,462) (11,121)
Financing activities
Net borrowings (repayment) under
Bank Credit Agreement 107,283 (15,394)
Other net borrowings 5,475 9,187
Stock options exercised 3,642 376
Dividends (3,405) (3,382)
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Net cash provided by (used in)
financing activities 112,995 (9,213)
Effect of exchange rate fluctuations on cash (3) 1
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Increase in cash 215 2,522
Cash at beginning of year 1,990 2,095
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Cash at end of period $ 2,205 $ 4,617
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</TABLE>
