 |
 |
||||||
[May 2006]
Libbey First Quarter Results
Libbey Inc (Toledo, OH, USA) announced that its diluted earnings per share for the first quarter ended 31 March 2006 were US$0.04 as compared to a diluted loss per share of US$0.12 in the prior year quarter. Sales increased 3.9% to US$134.9 million from US$129.8 million in Q1 2005.
The increase in sales was primarily attributable to a more than 10% increase in shipments to foodservice glassware customers. Shipments of Syracuse China products, Traex products, Crisal products and retail glassware were also higher than the year-ago period. Sales in the industrial channel of distribution decreased over US$2 million compared to Q1 2005, as the result of decreased demand and exiting some low-margin products. In addition, shipments of World Tableware and Royal Leerdam products decreased slightly as compared to the prior-year quarter.
The company recorded income from operations of US$3.1 million during the quarter. This compares with income from operations of US$0.1 million in Q1 2005. Income from operations during Q1 2005 included capacity realignment charges of US$3 million. Factors contributing to the increase in Q1 2006 over Q1 2005, in addition to the effects of recording the prior-year capacity realignment charge, were higher sales, higher production activity and improved operating results at Crisal in Portugal. Partially offsetting these improvements were substantially higher manufacturing expenses at the company's Syracuse China operations, a US$1.1 million increase in natural gas costs and US$0.5 million increased pension and post-retirement welfare expenses.
John Meier, Chairman and CEO, commenting on the quarter, said: "We are pleased with the strength of our core business performance. Sales to foodservice glassware customers were especially robust, and we saw a solid performance from our Mexican joint venture, Vitrocrisa (Crisa)." Meier also
added: "With the expected closing of our acquisition of the remaining 51 percent of Crisa by May 31, 2006, we will wait to provide any additional guidance on 2006 until we are in a position to disclose information on the combined operations."Libbey previously announced that in conjunction with the acquisition of Crisa, it will refinance Crisa's debt of approximately US$65 million as well as Libbey's existing debt. The refinancing plan is expected to include an asset-based revolver and senior unsecured notes. This structure is expected to provide the flexibility needed for Libbey to execute the integration of Crisa, including related capital expenditures and pursue its other strategic initiatives.
Libbey also confirmed that it has incurred a work stoppage at its Syracuse China factory in Syracuse, New York. The strike by approximately 260 employees began with the expiration of their collective bargaining agreement on 1 April 2006. The company continued to ship and produce product in April and the strike was said at the time of the statement to have had a minimal impact on the results of operations. Libbey added that Syracuse China had declining performance and had not performed up to expectations. As previously announced, Libbey incurred a US$16.5 million charge in 2005 for asset impairment and other charges due to Syracuse China's poor financial performance. In addition, the company's Syracuse China operations incurred an operating loss of approximately US$2 million for the first three months of 2006.
www.libbey.com
ENDS