PR Newswire
TOLEDO, Ohio, Feb. 28, 2017
TOLEDO, Ohio, Feb. 28, 2017 /PRNewswire/ -- Libbey Inc. (NYSE MKT: LBY), one of the largest glass tableware manufacturers in the world, today reported results for the fourth quarter ended December 31, 2016.
Full-Year 2016 Highlights
"Fourth quarter results continued to be impacted by the recent trends we've observed in our foodservice and retail channels, consistent with the activity that we saw in the preceding quarter," said William A. Foley, chairman and chief executive officer of Libbey Inc. "Foodservice unit volumes increased slightly, despite the impact of a Toledo work stoppage and an ongoing decline in restaurant traffic trends. By executing against our business strategy, we have continued to outperform our industry, and we are encouraged by indications that Libbey is continuing to win market share amidst a challenging, competitive environment."
Foley added, "2016 was an important year from an operational standpoint, as we began to make proactive changes to ensure the business is adapting to shifts in consumer behaviors and addressing legacy issues of our business. Our new product development capabilities are improving, we've rationalized and streamlined our product portfolio and we're taking new approaches to the ways in which we evaluate our manufacturing footprint to maximize profitability. We are seeing positive impacts from many of these initiatives that we prioritized during the year, and we remain confident that we are taking the appropriate steps to improve the long-term performance of the Company."
Fourth Quarter Financial & Operating Highlights
Full-Year 2016 Financial & Operating Highlights
Balance Sheet and Liquidity
Outlook
The Company expects macroeconomic, industry and competitive trends to remain consistent year-over-year and thus projects the following outlook for full-year 2017:
Foley concluded, "As we look toward 2017, we plan to take the next steps to strengthen the functions we emphasized last year by maintaining an active new product development pipeline and continually evaluating opportunities to optimize the performance of our global manufacturing network. Longer term, we believe significant opportunities exist to grow sales through new product and category introductions, as well as continued market share expansion in underpenetrated categories."
"While we're focused on taking advantage of opportunities we see in our markets to drive the long-term growth of our business, we need also to continue to improve our operational and organizational excellence to support growth. Therefore, we will pursue ecommerce and begin an ERP implementation during 2017. For full-year 2017, we expect to be able to offset much of the cost of these initiatives, and we project our full year Adjusted EBITDA margin to be similar to, or slightly down from, last year. We see these investments as both defensive and offensive. They provide critical platforms for our growth and help position us for enhanced alignment with consumer purchasing preferences and improved operating efficiencies."
"We also will continue to take a balanced approach to our capital allocation policies and remain committed to our dividend policy, which we recently increased by two percent to 11.75 cents per quarter. However, given the continued softness that we're seeing in some of our end markets, we believe it is prudent to continue prioritizing debt reduction with our excess capital over the near term. We believe we are well positioned to return the Company to growth and look forward to driving value for shareholders in the future.
Webcast Information
Libbey will hold a conference call for investors on Tuesday, February 28, 2017, at 11 a.m. Eastern Standard Time. The conference call will be webcast 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 7 days after the conclusion of the call.
About Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the U.S., Mexico, China, Portugal and the Netherlands. In existence since 1818, the Company supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries. Libbey's global brand portfolio, in addition to its namesake brand, includes Crisa®, Royal Leerdam®, Libbey Signature®, Masters Reserve®, World® Tableware, Syracuse® China, and Crisal Glass®. In 2016, Libbey Inc.'s net sales totaled $793.4 million. Additional information is available at www.libbey.com.
Use of Non-GAAP Financial Measures
To supplement the condensed financial statements presented in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP), we use non-GAAP measures of certain components of financial performance. These non-GAAP measures include Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Trade Working Capital and our Debt Net of Cash to Adjusted EBITDA Ratio. Reconciliations to the nearest U.S. GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.
Our non-GAAP measures, as defined below, are used by analysts, investors and other interested parties to compare our performance with the performance of other companies that report similar non-GAAP measures. Libbey believes these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of core business operating results. We believe the non-GAAP measures, when viewed in conjunction with U.S. GAAP results and the accompanying reconciliations, enhance the comparability of results against prior periods and allow for additional transparency of financial results and business outlook. In addition, we use non-GAAP data internally to assess performance, liquidity and facilitate management's internal comparison of our financial performance to that of prior periods, as well as trend analysis for budgeting and planning purposes. The presentation of our non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Furthermore, our non-GAAP measures may not be comparable to similarly titled measures reported by other companies and may have limitations as an analytical tool. We define our non-GAAP measures as follows:
Constant Currency
We translate revenue and expense accounts in our non-U.S. operations at current average exchange rates during the year. References to "constant currency," "excluding currency impact" and "adjusted for currency" are considered non-GAAP measures. Constant currency references regarding net sales reflect a simple mathematical translation of local currency results using the comparable prior period's currency conversion rate. Constant currency references regarding Adjusted EBITDA and Adjusted EBITDA Margin comprise a simple mathematical translation of local currency results using the comparable prior period's currency conversion rate plus the transactional impact of changes in exchange rates from revenues, expenses and assets and liabilities that are denominated in a currency other than the functional currency. We believe this non-GAAP constant currency information provides valuable supplemental information regarding our core operating results, better identifies operating trends that may otherwise by masked or distorted by exchange rate changes and provides a higher degree of transparency of information used by management in its evaluation of our ongoing operations. These non-GAAP measures should be viewed in addition to, and not as an alternative to, the reported results prepared in accordance with U.S. GAAP. Our currency market risks include currency fluctuations relative to the U.S. dollar, Canadian dollar, Mexican peso, Euro and RMB.
Caution on Forward-Looking Statements
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. 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 February 29, 2016. 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, ceramic dinnerware and metalware 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.
Libbey Inc. Condensed Consolidated Statements of Operations (dollars in thousands, except per share amounts) (unaudited) | |||||||
Three months ended December 31, | |||||||
2016 |
2015 | ||||||
Net sales |
$ |
205,838 |
$ |
219,145 |
|||
Freight billed to customers |
807 |
810 |
|||||
Total revenues |
206,645 |
219,955 |
|||||
Cost of sales |
172,618 |
190,703 |
|||||
Gross profit |
34,027 |
29,252 |
|||||
Selling, general and administrative expenses |
27,636 |
33,717 |
|||||
Income (loss) from operations |
6,391 |
(4,465) |
|||||
Other income |
2,327 |
1,603 |
|||||
Earnings (loss) before interest and income taxes |
8,718 |
(2,862) |
|||||
Interest expense |
5,259 |
4,722 |
|||||
Income (loss) before income taxes |
3,459 |
(7,584) |
|||||
Provision (benefit) for income taxes |
5,708 |
(39,692) |
|||||
Net income (loss) |
$ |
(2,249) |
$ |
32,108 |
|||
Net income (loss) per share: |
|||||||
Basic |
$ |
(0.10) |
$ |
1.47 |
|||
Diluted |
$ |
(0.10) |
$ |
1.45 |
|||
Dividends declared per share |
$ |
0.115 |
$ |
0.110 |
|||
Weighted average shares: |
|||||||
Basic |
21,908 |
21,819 |
|||||
Diluted |
21,908 |
22,111 |
Libbey Inc. Condensed Consolidated Statements of Operations (dollars in thousands, except per share amounts) (unaudited) | |||||||
Year ended December 31, | |||||||
2016 |
2015 | ||||||
Net sales |
$ |
793,420 |
$ |
822,345 |
|||
Freight billed to customers |
2,790 |
2,885 |
|||||
Total revenues |
796,210 |
825,230 |
|||||
Cost of sales |
629,916 |
648,902 |
|||||
Gross profit |
166,294 |
176,328 |
|||||
Selling, general and administrative expenses |
120,984 |
132,607 |
|||||
Income from operations |
45,310 |
43,721 |
|||||
Other income |
3,362 |
2,880 |
|||||
Earnings before interest and income taxes |
48,672 |
46,601 |
|||||
Interest expense |
20,888 |
18,484 |
|||||
Income before income taxes |
27,784 |
28,117 |
|||||
Provision (benefit) for income taxes |
17,711 |
(38,216) |
|||||
Net income |
$ |
10,073 |
$ |
66,333 |
|||
Net income per share: |
|||||||
Basic |
$ |
0.46 |
$ |
3.04 |
|||
Diluted |
$ |
0.46 |
$ |
2.99 |
|||
Dividends declared per share |
$ |
0.46 |
$ |
0.44 |
|||
Weighted average shares: |
|||||||
Basic |
21,880 |
21,817 |
|||||
Diluted |
22,049 |
22,159 |
|||||
Libbey Inc. Condensed Consolidated Balance Sheets (dollars in thousands) | |||||||
December 31, 2016 |
December 31, 2015 | ||||||
(unaudited) |
|||||||
ASSETS: |
|||||||
Cash and cash equivalents |
$ |
61,011 |
$ |
49,044 |
|||
Accounts receivable — net |
85,113 |
94,379 |
|||||
Inventories — net |
170,009 |
178,027 |
|||||
Other current assets |
16,777 |
19,326 |
|||||
Total current assets |
332,910 |
340,776 |
|||||
Pension asset |
— |
977 |
|||||
Purchased intangibles — net |
15,225 |
16,364 |
|||||
Goodwill |
164,112 |
164,112 |
|||||
Deferred income taxes |
40,016 |
48,662 |
|||||
Other assets |
9,514 |
9,019 |
|||||
Total other assets |
228,867 |
239,134 |
|||||
Property, plant and equipment — net |
256,392 |
272,534 |
|||||
Total assets |
$ |
818,169 |
$ |
852,444 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY: |
|||||||
Accounts payable |
$ |
71,582 |
$ |
71,560 |
|||
Salaries and wages |
27,018 |
27,266 |
|||||
Accrued liabilities |
41,807 |
45,179 |
|||||
Accrued income taxes |
1,384 |
4,009 |
|||||
Pension liability (current portion) |
2,461 |
2,297 |
|||||
Non-pension postretirement benefits (current portion) |
4,892 |
4,903 |
|||||
Derivative liability |
1,928 |
4,265 |
|||||
Long-term debt due within one year |
5,009 |
4,747 |
|||||
Total current liabilities |
156,081 |
164,226 |
|||||
Long-term debt |
402,831 |
426,272 |
|||||
Pension liability |
43,934 |
44,274 |
|||||
Non-pension postretirement benefits |
55,373 |
55,282 |
|||||
Deferred income taxes |
1,859 |
2,822 |
|||||
Other long-term liabilities |
12,972 |
11,186 |
|||||
Total liabilities |
673,050 |
704,062 |
|||||
Common stock and capital in excess of par value |
329,941 |
330,974 |
|||||
Treasury stock |
— |
(4,448) |
|||||
Retained deficit |
(59,625) |
(57,912) |
|||||
Accumulated other comprehensive loss |
(125,197) |
(120,232) |
|||||
Total shareholders' equity |
145,119 |
148,382 |
|||||
Total liabilities and shareholders' equity |
$ |
818,169 |
$ |
852,444 |
Libbey Inc. Condensed Consolidated Statements of Cash Flows (dollars in thousands) (unaudited) | |||||||
Three months ended December 31, | |||||||
2016 |
2015 | ||||||
Operating activities: |
|||||||
Net income (loss) |
$ |
(2,249) |
$ |
32,108 |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
11,817 |
11,426 |
|||||
Loss on asset sales and disposals |
122 |
177 |
|||||
Change in accounts receivable |
12,374 |
1,390 |
|||||
Change in inventories |
18,928 |
19,898 |
|||||
Change in accounts payable |
6,188 |
5,190 |
|||||
Accrued interest and amortization of discounts and finance fees |
424 |
345 |
|||||
Pension & non-pension postretirement benefits, net |
(860) |
17,412 |
|||||
Accrued liabilities & prepaid expenses |
(11,142) |
(8,660) |
|||||
Income taxes |
3,952 |
(40,078) |
|||||
Share-based compensation expense |
432 |
368 |
|||||
Excess tax benefit from share-based compensation arrangements |
— |
(2,797) |
|||||
Other operating activities |
(936) |
(2,728) |
|||||
Net cash provided by operating activities |
39,050 |
34,051 |
|||||
Investing activities: |
|||||||
Additions to property, plant and equipment |
(11,081) |
(6,656) |
|||||
Proceeds from asset sales and other |
— |
5 |
|||||
Net cash used in investing activities |
(11,081) |
(6,651) |
|||||
Financing activities: |
|||||||
Borrowings on ABL credit facility |
— |
18,400 |
|||||
Repayments on ABL credit facility |
— |
(25,400) |
|||||
Repayments on Term Loan B |
(6,100) |
(1,100) |
|||||
Stock options exercised |
247 |
4 |
|||||
Excess tax benefit from share-based compensation arrangements |
— |
2,797 |
|||||
Dividends |
(2,519) |
(2,400) |
|||||
Net cash used in financing activities |
(8,372) |
(7,699) |
|||||
Effect of exchange rate fluctuations on cash |
(1,256) |
(758) |
|||||
Increase in cash |
18,341 |
18,943 |
|||||
Cash & cash equivalents at beginning of period |
42,670 |
30,101 |
|||||
Cash & cash equivalents at end of period |
$ |
61,011 |
$ |
49,044 |
Libbey Inc. Condensed Consolidated Statements of Cash Flows (dollars in thousands) (unaudited) | |||||||
Year ended December 31, | |||||||
2016 |
2015 | ||||||
Operating activities: |
|||||||
Net income |
$ |
10,073 |
$ |
66,333 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
48,486 |
42,712 |
|||||
Loss on asset sales and disposals |
287 |
567 |
|||||
Change in accounts receivable |
8,660 |
(6,312) |
|||||
Change in inventories |
5,979 |
(12,006) |
|||||
Change in accounts payable |
(481) |
(3,466) |
|||||
Accrued interest and amortization of discounts and finance fees |
(1,086) |
1,291 |
|||||
Pension & non-pension postretirement benefits, net |
(2,513) |
18,865 |
|||||
Accrued liabilities & prepaid expenses |
4,032 |
4,140 |
|||||
Income taxes |
6,296 |
(45,003) |
|||||
Share-based compensation expense |
4,766 |
5,917 |
|||||
Excess tax benefit from share-based compensation arrangements |
(366) |
(2,797) |
|||||
Other operating activities |
(1,490) |
(4,142) |
|||||
Net cash provided by operating activities |
82,643 |
66,099 |
|||||
Investing activities: |
|||||||
Additions to property, plant and equipment |
(34,604) |
(48,136) |
|||||
Proceeds from asset sales and other |
— |
7 |
|||||
Net cash used in investing activities |
(34,604) |
(48,129) |
|||||
Financing activities: |
|||||||
Borrowings on ABL credit facility |
6,000 |
62,900 |
|||||
Repayments on ABL credit facility |
(6,000) |
(62,900) |
|||||
Other repayments |
(350) |
(3,267) |
|||||
Other borrowings |
339 |
— |
|||||
Repayments on Term Loan B |
(24,400) |
(4,400) |
|||||
Stock options exercised |
1,400 |
3,338 |
|||||
Excess tax benefit from share-based compensation arrangements |
366 |
2,797 |
|||||
Dividends |
(10,070) |
(9,597) |
|||||
Treasury shares purchased |
(2,000) |
(15,275) |
|||||
Net cash used in financing activities |
(34,715) |
(26,404) |
|||||
Effect of exchange rate fluctuations on cash |
(1,357) |
(2,566) |
|||||
Increase (decrease) in cash |
11,967 |
(11,000) |
|||||
Cash & cash equivalents at beginning of year |
49,044 |
60,044 |
|||||
Cash & cash equivalents at end of year |
$ |
61,011 |
$ |
49,044 |
In accordance with the SEC's Regulation G, the following tables provide non-GAAP measures used in this earnings release and a reconciliation to the most closely related U.S. Generally Accepted Accounting Principle (U.S. GAAP) measure. See the above text for additional information on our non-GAAP measures. 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 Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) | ||||||||||||||||
(dollars in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three months ended |
Year ended December 31, | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
Reported net income (loss) (U.S. GAAP) |
$ |
(2,249) |
$ |
32,108 |
$ |
10,073 |
$ |
66,333 |
||||||||
Add: |
||||||||||||||||
Interest expense |
5,259 |
4,722 |
20,888 |
18,484 |
||||||||||||
Provision (benefit) for income taxes |
5,708 |
(39,692) |
17,711 |
(38,216) |
||||||||||||
Depreciation and amortization |
11,817 |
11,426 |
48,486 |
42,712 |
||||||||||||
Add special items before interest and taxes: |
||||||||||||||||
Pension settlement (1) |
(44) |
21,693 |
168 |
21,693 |
||||||||||||
Product portfolio optimization (2) |
(1,091) |
— |
5,693 |
— |
||||||||||||
Work Stoppage (3) |
4,162 |
— |
4,162 |
— |
||||||||||||
Reorganization charges (4) |
— |
125 |
— |
4,316 |
||||||||||||
Executive terminations |
(61) |
635 |
4,460 |
870 |
||||||||||||
Derivatives (5) |
(710) |
(93) |
(1,860) |
(218) |
||||||||||||
Environmental obligation (6) |
— |
34 |
— |
157 |
||||||||||||
Adjusted EBITDA (non-GAAP) |
$ |
22,791 |
$ |
30,958 |
$ |
109,781 |
$ |
116,131 |
||||||||
Net sales |
$ |
205,838 |
$ |
219,145 |
$ |
793,420 |
$ |
822,345 |
||||||||
Net income (loss) margin (U.S. GAAP) |
(1.1) |
% |
14.7 |
% |
1.3 |
% |
8.1 |
% | ||||||||
Adjusted EBITDA margin (non-GAAP) |
11.1 |
% |
14.1 |
% |
13.8 |
% |
14.1 |
% |
(1) |
The 2015 pension settlement charge relates to EMEA unwinding direct ownership of its Dutch defined benefit pension plan. |
(2) |
Product portfolio optimization relates to inventory reductions to simplify and improve our operations. |
(3) |
Work stoppage relates to the lower production volume impact, shipping costs and other direct expenses associated with the two-week Toledo, Ohio work stoppage in the fourth quarter of 2016. |
(4) |
Management reorganization to support our growth strategy. |
(5) |
Derivatives relate to hedge ineffectiveness on our natural gas contracts as well as mark-to-market adjustments on our natural gas contracts that have been de-designated and those for which we did not elect hedge accounting. |
(6) |
Environmental obligation relates to our assessment of Syracuse China Company as a potentially responsible party with respect to the Lower Ley Creek sub-site of the Onondaga Lake Superfund site. |
Table 2 | ||||||||||||||||
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow | ||||||||||||||||
(dollars in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three months ended December 31, |
Year ended December 31, | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
Net cash provided by operating activities (U.S. GAAP) |
$ |
39,050 |
$ |
34,051 |
$ |
82,643 |
$ |
66,099 |
||||||||
Capital expenditures |
(11,081) |
(6,656) |
(34,604) |
(48,136) |
||||||||||||
Proceeds from asset sales and other |
— |
5 |
— |
7 |
||||||||||||
Free Cash Flow (non-GAAP) |
$ |
27,969 |
$ |
27,400 |
$ |
48,039 |
$ |
17,970 |
Table 3 | ||||||||||||
Reconciliation to Trade Working Capital |
||||||||||||
(dollars in thousands) |
||||||||||||
(unaudited) |
||||||||||||
December 31, 2016 |
September 30, 2016 |
December 31, 2015 | ||||||||||
Add: |
||||||||||||
Accounts receivable — net |
$ |
85,113 |
98,547 |
$ |
94,379 |
|||||||
Inventories — net |
170,009 |
191,479 |
178,027 |
|||||||||
Less: Accounts payable |
71,582 |
63,191 |
71,560 |
|||||||||
Trade Working Capital (non-GAAP) |
$ |
183,540 |
$ |
226,835 |
$ |
200,846 |
Table 4 | ||||||||||||||||
Summary Business Segment Information |
||||||||||||||||
(dollars in thousands) |
Three months ended |
Year ended December 31, | ||||||||||||||
Net Sales: |
2016 |
2015 |
2016 |
2015 | ||||||||||||
U.S. & Canada (1) |
$ |
129,549 |
$ |
139,774 |
$ |
488,162 |
$ |
497,728 |
||||||||
Latin America (2) |
36,418 |
40,231 |
151,406 |
167,069 |
||||||||||||
EMEA (3) |
31,707 |
31,457 |
119,750 |
122,664 |
||||||||||||
Other (4) |
8,164 |
7,683 |
34,102 |
34,884 |
||||||||||||
Consolidated |
$ |
205,838 |
$ |
219,145 |
$ |
793,420 |
$ |
822,345 |
||||||||
Segment Earnings Before Interest & Taxes (Segment EBIT) (5) : |
||||||||||||||||
U.S. & Canada (1) |
$ |
20,176 |
$ |
23,389 |
$ |
77,916 |
$ |
80,406 |
||||||||
Latin America (2) |
(3,353) |
3,646 |
10,731 |
22,017 |
||||||||||||
EMEA (3) |
700 |
(23) |
(1,002) |
1,251 |
||||||||||||
Other (4) |
17 |
539 |
915 |
4,390 |
||||||||||||
Segment EBIT |
$ |
17,540 |
$ |
27,551 |
$ |
88,560 |
$ |
108,064 |
||||||||
Reconciliation of Segment EBIT to Net Income (Loss): |
||||||||||||||||
Segment EBIT |
$ |
17,540 |
$ |
27,551 |
$ |
88,560 |
$ |
108,064 |
||||||||
Retained corporate costs (6) |
(6,566) |
(8,019) |
(27,265) |
(34,645) |
||||||||||||
Pension settlement |
44 |
(21,693) |
(168) |
(21,693) |
||||||||||||
Environmental obligation |
— |
(34) |
— |
(157) |
||||||||||||
Reorganization charges |
— |
(125) |
— |
(4,316) |
||||||||||||
Derivatives |
710 |
93 |
1,860 |
218 |
||||||||||||
Executive terminations |
61 |
(635) |
(4,460) |
(870) |
||||||||||||
Product portfolio optimization |
1,091 |
— |
(5,693) |
— |
||||||||||||
Work stoppage |
(4,162) |
— |
(4,162) |
— |
||||||||||||
Interest expense |
(5,259) |
(4,722) |
(20,888) |
(18,484) |
||||||||||||
Income tax benefit (expense) |
(5,708) |
39,692 |
(17,711) |
38,216 |
||||||||||||
Net income (loss) |
$ |
(2,249) |
$ |
32,108 |
$ |
10,073 |
$ |
66,333 |
||||||||
Depreciation & Amortization: |
||||||||||||||||
U.S. & Canada (1) |
$ |
3,030 |
$ |
3,425 |
$ |
12,748 |
$ |
12,214 |
||||||||
Latin America (2) |
5,343 |
4,361 |
19,068 |
14,738 |
||||||||||||
EMEA (3) |
1,717 |
2,065 |
9,377 |
8,510 |
||||||||||||
Other (4) |
1,426 |
1,421 |
5,588 |
5,855 |
||||||||||||
Corporate |
301 |
154 |
1,705 |
1,395 |
||||||||||||
Consolidated |
$ |
11,817 |
$ |
11,426 |
$ |
48,486 |
$ |
42,712 |
(1) |
U.S. & Canada—includes sales of manufactured and sourced tableware having an end market destination in the U.S and Canada excluding glass products for Original Equipment Manufacturers (OEM), which remain in the Latin America segment. |
(2) |
Latin America—includes primarily sales of manufactured and sourced glass tableware having an end market destination in Latin America including glass products for OEMs that have an end market destination outside of Latin America. |
(3) |
EMEA—includes primarily sales of manufactured and sourced glass tableware having an end market destination in Europe, the Middle East and Africa. |
(4) |
Other—includes primarily sales of manufactured and sourced glass tableware having an end market destination in Asia Pacific. |
(5) |
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 and other allocations that are not considered by management when evaluating performance. |
(6) |
Retained corporate costs include certain headquarter, administrative and facility costs, and other costs that are not allocable to the reporting segments. |
Table 5 | |||||||
Reconciliation of Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) | |||||||
(dollars in thousands) |
|||||||
(unaudited) |
|||||||
Year Ended |
Year Ended | ||||||
Reported net income (U.S. GAAP) |
$ |
10,073 |
$ |
66,333 |
|||
Add: |
|||||||
Interest expense |
20,888 |
18,484 |
|||||
Provision (benefit) for income taxes |
17,711 |
(38,216) |
|||||
Depreciation and amortization |
48,486 |
42,712 |
|||||
Special items before interest and taxes |
12,623 |
26,818 |
|||||
Adjusted EBITDA (non-GAAP) |
$ |
109,781 |
$ |
116,131 |
|||
Reported debt on balance sheet (U.S. GAAP) |
$ |
407,840 |
$ |
431,019 |
|||
Plus: Unamortized discount and finance fees |
4,480 |
5,832 |
|||||
Gross debt |
412,320 |
436,851 |
|||||
Less: Cash and cash equivalents |
61,011 |
49,044 |
|||||
Debt net of cash |
$ |
351,309 |
$ |
387,807 |
|||
Debt Net of Cash to Adjusted EBITDA Ratio (non-GAAP) |
3.2 x |
3.3 x |
Table 6 |
|||
Full year Outlook |
|||
Reconciliation of Net Income margin to Adjusted EBITDA Margin |
|||
(percent of estimated 2017 net sales) |
|||
(unaudited) |
|||
Outlook for the December 31, 2017 | |||
Net income margin (U.S. GAAP) |
2.5% - 3.5% | ||
Add: |
|||
Interest expense |
2.5% | ||
Provision for income taxes |
2.0% | ||
Depreciation and amortization |
6.0% | ||
Special items before interest and taxes (1) |
—% | ||
Adjusted EBITDA Margin (non-GAAP) |
13.0% - 14.0% |
(1) We have not estimated any impact for special items in 2017. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/libbey-inc-announces-fourth-quarter-and-full-year-2016-financial-results-300414812.html
SOURCE Libbey Inc.
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