Libbey (LBY) 8-K LIBBEY INC. ANNOUNCES SECOND QUARTER RESULTS Income From Operations Margin of 9.9 Percent is Highest in 3 Years

Libbey Inc.
300 Madison Ave
P.O. Box 10060
Toledo, OH 43699

N             E             W             S             R             E             L             E             A             S             E

AT THE COMPANY:
Kenneth Boerger
VP/Treasurer
(419) 325-2279

FOR IMMEDIATE RELEASE
TUESDAY, JULY 31, 2007

LIBBEY INC. ANNOUNCES SECOND QUARTER RESULTS
Income From Operations Margin of 9.9 Percent is Highest in 3 Years

• Sales Increase 31.1 Percent

• Pro Forma Sales (Giving Effect to Crisa Acquisition) Increase 8.3 Percent

• Income From Operations Increases to $20.5 million From Loss From Operations of $4.1 Million in Prior- Year Quarter

• Second Quarter Net Income of $4.0 Million

• EBITDA of $31.9 Million for Quarter

• Diluted Earnings Per Share of $0.27

• Guidance for 2007 EBITDA Increased to Range of $103 Million to $109 Million

TOLEDO, OHIO, JULY 31, 2007—Libbey Inc. (NYSE: LBY)announced today that sales increased 31.1 percent to $207.1 million in the second quarter of 2007 from $158.0 million in the prior-year second quarter. Libbey reported net income of $4.0 million, or $0.27 per diluted share, for the second quarter ended June 30, 2007, compared to a net loss of $9.6 million, or $0.68 per diluted share in the prior-year quarter.

Second Quarter Results

For the quarter-ended June 30, 2007, sales increased 31.1 percent to $207.1 million from $158.0 million in the year-ago quarter. North American Glass sales increased 39.9 percent to $147.0 million (see Table 6) from $105.0 million in the year-ago quarter. The increase in sales was attributable to the consolidation of the sales of Crisa, the Company’s former joint venture in Mexico, a 16 percent increase in shipments to export customers outside of North America and a more than 7 percent increase in shipments to foodservice, retail and industrial glassware customers. In addition, North American Other sales increased 6.1 percent, as shipments of Syracuse China products increased 9.6 percent and sales of World Tableware products were up 5 percent. International sales increased 26.0 percent as the result of increased shipments to customers of Royal

-More-

Libbey Inc.
Add 1

Leerdam and Crisal and the first full quarter of shipments from Libbey China. On a pro forma basis, giving effect to the consolidation of Crisa as if it occurred on January 1, 2006, as detailed in the attached Table 3, sales were up 8.3 percent in total.

The Company reported income from operations of $20.5 million during the quarter, compared to a loss from operations of $4.1 million in the year-ago quarter. Income from operations during the second quarter of 2006 excluding special charges (see Table 1) was $11.0 million (see Table 2). Factors contributing to the increase in income from operations and higher operating margins were the consolidation of Crisa, higher sales and higher production activity. Partially offsetting these improvements were higher distribution expenses and expenses related to the start up of Libbey’s new facility in China.

Earnings before interest and taxes (EBIT) increased to $21.2 million from a loss of $4.1 million in the year-ago quarter. EBIT increased by $23.7 million to $16.6 million for North American Glass as a result of the consolidation of solid results from Crisa and significantly higher sales and increased operating activity in the U. S. operations. In addition, non-recurring special charges of $15.1 million affected the results for the second quarter of 2006 (see Table 1). North American Other, benefiting from higher sales of Syracuse China and World Tableware products and significantly higher production activity at Syracuse China during the quarter ended June 30, 2007, reported EBIT for the second quarter of 2007 of $4.3 million compared to $2.7 million in the year-ago quarter. The International segment reported EBIT of $0.3 million compared to income of $0.4 million in the second quarter of 2006, as improved results at Royal Leerdam and Crisal were offset by start-up costs at Libbey China.

Libbey reported that earnings before interest, taxes, depreciation and amortization (EBITDA) (see Table 4) was $31.9 million in the second quarter of 2007, compared to pro forma EBITDA of $27.2 million in the year-ago quarter (see Table 3).

As a result of Libbey’s refinancing consummated on June 16, 2006, which resulted in higher debt and higher average interest rates, interest expense increased $6.2 million compared to the year-ago period.

The effective tax rate decreased to 16.4 percent for the quarter, compared to 33.0 percent in the year-ago quarter. This decrease was driven by various tax incentives provided to Libbey in 2007. Libbey reported its net income was $4.0 million, or $0.27 per diluted share, compared to a diluted loss per share of $0.68 in the second quarter of 2006.

Six-Month Results

For the six months ended June 30, 2007, sales increased 32.0 percent to $386.6 million from $292.9 million in the year-ago period. North American Glass sales increased 43.2 percent to $271.7 million (see Table 6) from $189.7 million in the year-ago quarter. The increase in sales was attributable to the consolidation of Crisa’s sales, a 23 percent increase in shipments to export customers outside of North America, a more than 13 percent increase in shipments to retail glassware customers and single-digit sales increases to foodservice and industrial glassware customers. In addition, North American

-More-

Libbey Inc.
Add 1

Other sales increased 4.3 percent, primarily as the result of higher shipments of World Tableware products. International sales increased 26.1 percent as the result of significantly increased shipments to customers of Royal Leerdam and Crisal and the inclusion of shipments from Libbey China in 2007. On a pro forma basis giving effect to the consolidation of Crisa as if it occurred on January 1, 2006, as detailed in the attached Table 3, consolidated net sales increased 5.4 percent in total.

The Company reported income from operations of $30.9 million during the first six months of 2007, compared to a loss from operations of $1.1 million in the year-ago period. Income from operations excluding special charges (see Table 1) during the first six months of 2006 was $14.1 million (see Table 2). Factors contributing to the increase in income from operations and higher operating margins were the consolidation of Crisa, higher sales and higher production activity. Partially offsetting these improvements were higher distribution expenses and expenses related to the start up of Libbey’s new facility in China.

EBIT increased to $33.4 million from $0.4 million in the first six months of 2006. EBIT increased by $34.0 million to $27.5 million in the first six months of 2006 for North American Glass as a result of the consolidation of the results from Crisa, significantly higher sales and increased operating activity in the U. S. operations. North American Other, benefiting from higher sales of World Tableware products and significantly higher production activity at Syracuse China during the first six months of 2007, reported EBIT for the first half of 2007 of $8.1 million compared to $3.1 million in the year-ago quarter. As the result of start-up costs at Libbey China, lower production activity in Portugal and higher natural gas costs in Europe, the International segment reported an EBIT loss of $2.1 million, compared to income of $3.8 million in the first six months of 2006.

Libbey reported that EBITDA, as detailed in Table 4, was $53.3 million in the first six months of 2007 compared to pro forma EBITDA of $49.5 million in the year-ago six-month period, as detailed in Table 3.

As a result of Libbey’s refinancing consummated on June 16, 2006, which resulted in higher debt and higher average interest rates, interest expense increased $18.2 million compared to the first half of 2006.

The effective tax rate decreased to a negative 58 percent for the first six months of 2007, compared to 33.0 percent in the first half of 2006. This decrease was driven by various tax incentives provided to Libbey in 2007. Libbey reported net income of $2.2 million for the first six months of 2007, or $0.15 per diluted share, compared to a diluted loss per share of $0.64 in the first half of 2006.

Working Capital and Liquidity

As of June 30, 2007, working capital, defined as inventories and accounts receivable less accounts payable, increased by $14.5 million from $205.1 million to $219.6 million during the second quarter of 2007, as a result of seasonal working capital needs and working capital requirements of the new Libbey China operations.

-More-

Libbey Inc.
Add 3

Free cash flow for the first half of 2007, as detailed in the attached Table 5, was a use of $25.1 million as compared to a use of $91.5 million in the first half of 2006. The primary contributors to the lower use of cash compared to the prior year were a $11.6 million reduction in capital expenditures and the absence of any acquisition and related costs in 2007, partially offset by increased working capital.

Libbey reported that it had available capacity of $84.0 million under its Asset Based Loan (ABL) credit facility as of June 30, 2007, compared to availability of $71.7 million at March 31, 2007.

Outlook for 2007

John F. Meier, chairman and chief executive officer, commenting on the quarter said, “We are pleased with the strength of our North American Glass business performance. We experienced healthy increases in foodservice, retail and industrial glassware shipments during the quarter. Sales to European glassware customers were also very strong. Crisa, our Mexican glass tableware operation, continued to contribute as planned during the completion of the consolidation of the facilities in Mexico. We are also pleased with the performance of our International operations. For our total business, we achieved during the quarter the highest income from operations margins and EBITDA margins that we have achieved since the second quarter of 2004.” He added, “In the face of some weakness in select U.S.A. market niches, we expect third quarter sales to continue to be solid and to be in the range of $200 million to $205 million and EBITDA to be between $23 million and $25 million in the third quarter of 2007.”

Mr. Meier added, “As the result of a very strong second quarter, finishing above our EBITDA guidance, and given the strong sales performance, improving margins and our continued expectation for savings from our Crisa operations later in 2007, we are increasing our guidance for 2007 EBITDA to a range of $103 million to $109 million on expected sales of slightly over $800 million.”

Webcast Information

Libbey will hold a conference call for investors on Tuesday, July 31, 2007, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet on both www.libbey.com and http://phx.corporateir.net/phoenix.zhtml?p=irol-eventDetails&c=64169&eventID=1609631. 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 30 days after the conclusion of the call.

This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements only reflect the Company’s best assessment at

-More-

Libbey Inc.
Add 4

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, that actual results may differ materially from such 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 onForm 10-K filed with the Commission on March 16, 2007. Important factors potentially affecting performance include but are not limited to increased competition from foreign suppliers endeavoring to sell glass tableware in the United States and Mexico; the impact of lower duties for imported products; 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, corrugated packaging, and other purchased materials; higher indebtedness related to the Crisa acquisition; higher interest rates that increase the Company’s borrowing costs; 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 Crisa, 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. With respect to its expectations regarding the Crisa acquisition, these factors also include the ability to successfully integrate the operations of Crisa and recognize the expected synergies, the ability of Vitro to supply necessary services to Crisa, and our ability to capitalize on the expanded platform that the acquisition of Crisa provides.

Libbey Inc.:

• is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world;

• is expanding its international presence with facilities in Mexico, the Netherlands, Portugal, and a facility in China that started production in 2007;

• is the leading manufacturer of tabletop products for the U.S. foodservice industry; and

• supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries.

Based in Toledo, Ohio, the Company 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 the leading producer of glass tableware in Mexico and Latin America. Its Royal Leerdam 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, manufactures and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments

-More-

Libbey Inc.
Add 5

in the United States. Its World Tableware subsidiary imports and sells a full-line of metal flatware and holloware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. Its Traex subsidiary, located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry. In 2006, Libbey Inc.’s net sales totaled $689.5 million.

-More-

LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)

	THREE MONTHS ENDED
	June 30, 2007		June 30, 2006(2)
Net sales	$	207,123	$	157,998
Freight billed to customers		549		926
Total revenues		207,672		158,924
Cost of sales (1)		163,483		130,752
Gross profit		44,189		28,172
Selling, general and administrative expenses		23,667		19,696
Special charges(1)		—		12,587
Income (loss) from operations		20,522		(4,111	)
Equity earnings — pretax		—		921
Other income (expense)		639		(907	)
Earnings (loss) before interest, income taxes and minority interest		21,161		(4,097	)
Interest expense(1)		16,429		10,200
Income (loss) before income taxes and minority interest		4,732		(14,297	)
Provision (credit) for income taxes		776		(4,720	)
Income (loss) before minority interest		3,956		(9,577	)
Minority interest		—		8
Net income (loss)	$	3,956	$	(9,569	)
Net income (loss) per share:
Basic	$	0.27	$	(0.68	)
Diluted	$	0.27	$	(0.68	)
Weighted average shares:
Outstanding		14,436		14,124
Diluted		14,672		14,124

(1)	Refer to Table 1 for special charges detail.
(2)	Crisa results for April 1, 2006 through June 15, 2006 are reflected in equity earnings. Crisa results for June 16, 2006 through June 30, 2006 are included in the consolidated statement of operations above.

LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)

	SIX MONTHS ENDED
	June 30, 2007			June 30, 2006(2)
Net sales	$	386,619		$	292,864
Freight billed to customers		1,024			1,383
Total revenues		387,643			294,247
Cost of sales (1)		311,039			243,929
Gross profit		76,604			50,318
Selling, general and administrative expenses		45,701			38,782
Special charges(1)		—			12,587
Income (loss) from operations		30,903			(1,051	)
Equity earnings — pretax		—			1,986
Other income (expense)		2,484			(511	)
Earnings before interest, income taxes and minority interest		33,387			424
Interest expense(1)		31,993			13,809
Income (loss) before income taxes and minority interest		1,394			(13,385	)
Credit for income taxes		(808	)		(4,419	)
Income (loss) before minority interest		2,202			(8,966	)
Minority interest		—			(88	)
Net income (loss)	$	2,202		$	(9,054	)
Net income (loss) per share:
Basic	$	0.15		$	(0.64	)
Diluted	$	0.15		$	(0.64	)
Weighted average shares:
Outstanding		14,399			14,081
Diluted		14,617			14,081

(1)	Refer to Table 1 for special charges detail.
(2)	Crisa results for April 1, 2006 through June 15, 2006 are reflected in equity earnings. Crisa results for June 16, 2006 through June 30, 2006 are included in the consolidated statement of operations above.

LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	June 30, 2007			December 31, 2006			June 30, 2006
	(unaudited)						(unaudited)
ASSETS
Cash	$	15,576		$	41,766		$	26,661
Accounts receivable — net		109,822			100,230			112,195
Inventories — net		175,169			159,123			161,827
Deferred taxes		4,120			4,120			4,239
Other current assets		6,730			15,605			4,807
Total current assets		311,417			320,844			309,729
Other assets		45,434			38,674			50,759
Goodwill and purchased intangibles — net		206,624			206,372			200,624
Property, plant and equipment — net		317,979			312,241			295,153
Total assets	$	881,454		$	878,131		$	856,265
LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable	$	1,381		$	226		$	1,546
Accounts payable		65,359			67,493			59,447
Accrued liabilities		75,758			78,946			67,628
Pension liability (current portion)		1,389			1,389			—
Nonpension postretirement benefits (current portion)		3,252			3,252			—
Payable to Vitro		19,704			—			7,184
Other current liabilities		706			1,487			3,508
Long-term debt due within one year		794			794			825
Total current liabilities		168,343			153,587			140,138
Long-term debt		491,142			490,212			462,774
Pension liability		80,105			77,174			73,994
Nonpension postretirement benefits		37,839			38,495			44,533
Payable to Vitro		—			19,673			19,900
Other liabilities		8,952			11,140			6,452
Total liabilities		786,381			790,281			747,791
Minority interest		—			—			129
Total liabilities and minority interest		786,381			790,281			747,920
Common stock, treasury stock, capital in excess of par value and warrants		177,259			174,141			172,016
Retained deficit		(38,799	)		(40,282	)		(27,723	)
Accumulated other comprehensive loss		(43,387	)		(46,009	)		(35,948	)
Total shareholders’ equity		95,073			87,850			108,345
Total liabilities and shareholders’ equity	$	881,454		$	878,131		$	856,265

LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(unaudited)

	THREE MONTHS ENDED
	June 30, 2007			June 30, 2006
Operating activities
Net income (loss)	$	3,956		$	(9,569	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		10,710			8,206
Equity earnings — net of tax		—			(546	)
Change in accounts receivable		(10,064	)		(2,722	)
Change in inventories		(7,475	)		1,134
Change in accounts payable		1,514			(7,977	)
Special charges		18			19,788
Pension & nonpension postretirement		(350	)		4,564
Other operating activities		(2,705	)		2,699
Net cash (used in) provided by operating activities		(4,396	)		15,577
Investing activities
Additions to property, plant and equipment		(12,833	)		(12,817	)
Business acquisition and related costs — net of cash acquired		—			(77,571	)
Proceeds from asset sales and other		(116	)		—
Net cash used in investing activities		(12,949	)		(90,388	)
Financing activities
Net borrowings		4,775			109,378
Debt financing fees		—			(14,356	)
Dividends		(360	)		(352	)
Other		—			195
Net cash provided by financing activities		4,415			94,865
Effect of exchange rate fluctuations on cash		109			105
(Decrease) increase in cash		(12,821	)		20,159
Cash at beginning of period		28,397			6,502
Cash at end of period	$	15,576		$	26,661

LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(unaudited)

	SIX MONTHS ENDED
	June 30, 2007			June 30, 2006
Operating activities
Net income (loss)	$	2,202		$	(9,054	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		19,926			16,541
Equity earnings — net of tax		—			(1,378	)
Gain on asset sales		(1,575	)		—
Change in accounts receivable		(7,660	)		4,516
Change in inventories		(15,378	)		2,922
Change in accounts payable		(2,755	)		(15,312	)
Special charges		(781	)		18,924
Pension & nonpension postretirement		2,237			6,203
Other operating activities		(649	)		(2,987	)
Net cash (used in) provided by operating activities		(4,433	)		20,375
Investing activities
Additions to property, plant and equipment		(22,626	)		(34,256	)
Business acquisition and related costs — net of cash acquired		—			(77,571	)
Proceeds from asset sales and other		1,953			—
Net cash used in investing activities		(20,673	)		(111,827	)
Financing activities
Net borrowings		(540	)		129,630
Debt financing fees		—			(14,356	)
Dividends		(719	)		(703	)
Other		—			195
Net cash (used in) provided by financing activities		(1,259	)		114,766
Effect of exchange rate fluctuations on cash		175			105
(Decrease) increase in cash		(26,190	)		23,419
Cash at beginning of period		41,766			3,242
Cash at end of period	$	15,576		$	26,661

Table 1
Summary of Non - Recurring Special Charges
(Dollars in thousands)

	Three Months ended June 30,				Six Months ended June 30,
	2007		2006		2007		2006
Crisa Restructuring:
Inventory write-down	$	—	$	2,543	$	—	$	2,543
Included in Cost of sales		—		2,543		—		2,543
Fixed asset related	$	—	$	12,587	$	—	$	12,587
Included in Special charges		—		12,587		—		12,587
Crisa Restructuring	$	—	$	15,130	$	—	$	15,130

In June 2006, Libbey announced plans to consolidate Crisa’s two principal manufacturing facilities. Libbey recorded a pretax charge of $15,130 in the second quarter of 2006 as detailed above. No further charges related to the Crisa restructuring have been taken.

Write-off of finance fees:
Write-off of finance fees		—		4,906		—		4,906
Included in Interest expense	$	—	$	4,906	$	—	$	4,906

In June 2006, Libbey wrote off unamortized finance fees related to debt refinancing at Libbey and Crisa.

Total Special charges $ — $ 20,036 $ — $ 20,036

Special charges classifications as shown in the Condensed Consolidated Statement of Operations :

Cost of sales	$	—	$	2,543	$	—	$	2,543
Special charges		—		12,587		—		12,587
Interest expense		—		4,906		—		4,906
Total special charges	$	—	$	20,036	$	—	$	20,036

In accordance with the SEC’s Regulation G, the following tables 2, 3, 4 and 5 provide non-GAAP measures used in the earnings release and the reconciliation to the most closely related Generally Accepted Accounting Principles (GAAP) measure. Libbey believes that providing supplemental non-GAAP financial information is useful to investors in understanding Libbey’s core business and trends. Specifically, adding back the non-recurring charges related to the second quarter of 2006 provides a better comparison of core business performance when comparing to the second quarter of 2007. In addition, it is the basis on which Libbey’s management internally 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 2
Reconciliation of Non-GAAP Financial Measures for Special Charges
(Dollars in thousands, except per-share amounts)

	Three months ended June 30,					Six months ended June 30,
	2007		2006			2007		2006
Income (loss) from operations	$	20,522	$	(4,111	)	$	30,903	$	(1,051	)
Special charges (excluding write-off of finance fees) — pre-tax		—		15,130			—		15,130
Adjusted income from operations	$	20,522	$	11,019		$	30,903	$	14,079

Table 3
Summary Consolidated Pro-forma Results
(Dollars in thousands)

The following table presents the impact of the Crisa acquistion (closed on June 16, 2006) as if it occurred on January 1, 2006.

	Three months ended			Six months ended
	June 30, 2006			June 30, 2006
Libbey
Net sales	$	149,418		$	284,284
Earnings before interest and tax (EBIT)		10,125			14,646
Less: minority interest(5% for Crisal)		(46	)		(142	)
EBIT		10,079			14,504
Pro forma adjustments:
Equity earnings		(921	)		(1,986	)
Libbey pro forma EBIT		9,158			12,518
Depreciation & amortization (adjusted for minority interest)		7,653			15,988
Libbey pro forma earnings before interest tax depreciation and amortization (EBITDA)	$	16,811		$	28,506
Crisa
Net sales	$	48,660		$	96,226
Earnings (loss) before interest and tax (EBIT)		(10,854	)		(6,311	)
Add: special charges		15,130			15,130
Adjusted EBIT		4,276			8,819
Pro forma adjustments:
Pension expense		1,319			2,638
Profit sharing expense		780			1,560
Vitro corporate tax		643			1,286
Rent expense		235			470
Other		(18	)		(36	)
Total Crisa pro forma adjustments		2,959			5,918
Crisa adjusted pro forma EBIT		7,235			14,737
Depreciation & amortization		3,196			6,250
Crisa adjusted pro forma earnings before interest tax depreciation and amortization (EBITDA)	$	10,431		$	20,987
Net sales adjustments and eliminations		(6,787	)		(13,574	)
Libbey consolidated
Pro forma net sales	$	191,291		$	366,936
Pro forma adjusted EBIT	$	16,393		$	27,255
Pro forma adjusted EBITDA	$	27,242		$	49,493

Table 4

Reconciliation of Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization(EBITDA) and Adjusted
EBITDA
(Dollars in thousands)

	Three months ended June 30,					Six months ended June 30,
	2007		2006			2007			2006
Reported net income (loss)	$	3,956	$	(9,569	)	$	2,202		$	(9,054	)
Add:
Interest expense		16,429		10,200			31,993			13,809
Provision (credit) for income taxes		776		(4,720	)		(808	)		(4,419	)
Depreciation and amortization ( 2006 adjusted for minority interest)		10,710		8,158			19,926			16,440
EBITDA	$	31,871	$	4,069		$	53,313		$	16,776
Add:
Special charges		—		15,130			—			15,130
Adjusted EBITDA	$	31,871	$	19,199		$	53,313		$	31,906

Table 5

Reconciliation of Net Cash Provided by Operating Activities to
Free Cash Flow
(Dollars in thousands)

Net cash (used in) provided by operating activities	$	(4,396	)	$	15,577		$	(4,433	)	$	20,375
Less:
Capital expenditures		12,833			12,817			22,626			34,256
Acquisitions and related costs		—			77,571			—			77,571
Plus:
Proceeds from asset sales and other		(116	)		—			1,953			—
Free cash flow	$	(17,345	)	$	(74,811	)	$	(25,106	)	$	(91,452	)

Table 6
Summary Business Segment information
(Dollars in thousands)

	Three months ended June 30,						Six months ended June 30,
	2007			2006			2007			2006
Net Sales:
North American Glass	$	146,963		$	105,029		$	271,689		$	189,664
North American Other		30,490			28,736			57,925			55,560
International		32,236			25,585			62,018			49,181
Eliminations		(2,566	)		(1,352	)		(5,013	)		(1,541	)
Consolidated Net Sales	$	207,123		$	157,998		$	386,619		$	292,864
Earnings (Loss) Before Interest & Taxes (EBIT):
North American Glass	$	16,549		$	(7,128	)	$	27,484		$	(6,494	)
North American Other		4,281			2,679			8,050			3,141
International		331			352			(2,147	)		3,777
Consolidated EBIT	$	21,161		$	(4,097	)	$	33,387		$	424
Depreciation & Amortization:
North American Glass	$	6,441		$	4,997		$	12,203		$	9,786
North American Other		880			855			1,761			1,729
International		3,389			2,354			5,962			5,026
Consolidated Depreciation & Amortization	$	10,710		$	8,206		$	19,926		$	16,541
Reconciliation of EBIT to Net Income (Loss):
Segment EBIT	$	21,161		$	(4,097	)	$	33,387		$	424
Interest Expense		16,429			10,200			31,993			13,809
Income Taxes		776			(4,720	)		(808	)		(4,419	)
Minority Interest		—			8			—			(88	)
Net Income (Loss)	$	3,956		$	(9,569	)	$	2,202		$	(9,054	)

Note:

North American Glass—includes sales of glass tableware from subsidiaries throughout the United States, Canada and Mexico.

North American Other—includes sales of ceramic dinnerware, metal tableware, holloware and serveware and plastic items.

International—includes worldwide sales of glass tableware from subsidiaries outside the United States, Canada and Mexico.