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[May 2008]
Syracuse China Sales Down But Libbey Sets Record Overall
Libbey Inc (Toledo, OH, USA) posted sales increased 4.3% to US$187.3 million in the first quarter of 2008 from US$179.5 million in Q1 2007. Libbey reported a net loss of US$3.5 million for the first quarter ended 31 March 31 2008, compared to a net loss of US$1.8 million in Q1 2007.
North American Glass sales increased 2.2% to $127.5 million. The increase in sales was attributable to continued solid increases of over 18% in shipments to retail glassware customers in the United States and Canada and strong sales performance in Mexico.
These increases were partially offset by lower shipments to US foodservice customers, which were down over 12%. North American Other sales decreased 3.1% as shipments to Syracuse China customers were down approximately 12%, partially offset by an increase of 3% in sales of World Tableware products. International sales increased 22.2% as the result of increased sales to customers of Libbey China, Royal Leerdam and Crisal. A majority of the increased sales is attributable to Libbey China and a favourable currency impact on European sales. International sales increased approximately 8%, excluding the currency impact.
The company reported income from operations of US$9.5 million during the quarter, compared to income from operations of US$10.4 million in Q1 2007. Factors contributing to the decrease in income from operations were an unfavourable mix of sales, as a result of lower foodservice sales, a US$1.4 million increase in natural gas expenses and a US$2.1 million increase in depreciation partially offset by a reduction of US$1.2 million in selling, general and administrative expenses.
Earnings before interest and taxes (EBIT) were US$10.2 million, compared to US$12.2 million in Q1 2007. EBIT was US$7.1 million for North American Glass, compared to US$10.9 million in Q1 2007, as a result of the unfavourable sales mix and higher natural gas expenses. North American Other reported EBIT for the first quarter of 2008 of US$3.8 million, which was flat compared to Q1 2007. The first quarter 2007 results included a US$1.1 million one-time gain on the sale of excess land in Syracuse, NY. Excluding the gain on the sale of land recorded in 2007, the increase in EBIT in 2008 is attributable to higher income from operations at World Tableware, Syracuse China and Traex.
The International segment reported an EBIT loss of US$0.7 million, which was a US$1.8 million improvement in EBIT as compared to Q1 2007. The improvement in EBIT was primarily related to Libbey China being in full operation, higher international sales and improved margins partially offset by higher natural gas costs in Europe.
In his outlook for this year, Chairman and CEO John Meier said: "We are pleased with the strength of our total sales performance. We experienced healthy increases in US and Canadian retail glassware, Crisa and Libbey China shipments during the quarter. We reported solid EBITDA performance in spite of softness in the US foodservice market and higher natural gas costs.
"We expect second quarter sales to be in the range of $215 million to $220 million, and EBITDA to be between $30 million and $32 million in the second quarter of 2008.
"As the result of a solid first quarter, finishing on the high side of our EBITDA guidance, and given the strong retail and International sales performance offsetting the softness in the US foodservice channel of distribution, we are confirming our guidance for 2008 EBITDA to be in an expected range of $113 million to $123 million."
www.libbey.com
ENDS