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EXHIBIT 99
LIBBEY INC.
300 MADISON AVE.
P.O. BOX 10060
TOLEDO, OH 43699
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
KENNETH WILKES KENNETH BOERGER MARILYN WINDSOR SUZY LYNDE
VP/CFO VP/TREASURER GENERAL INQUIRIES ANALYST INQUIRIES
(419) 325-2490 (419) 325-2279 (312) 640-6692 (312) 640-6772
FOR IMMEDIATE RELEASE
WEDNESDAY, FEBRUARY 2, 2000
LIBBEY INC. ANNOUNCES RECORD SALES AND NET INCOME IN 1999;
CITES BENEFITS OF CAPACITY REALIGNMENT AND SALES GAINS;
ANNOUNCES NEW SHARE REPURCHASE PLAN
FOURTH-QUARTER DILUTED EPS INCREASES TO $0.74 FROM $0.49 LOSS;
BOARD OF DIRECTORS APPROVES PURCHASE OF ADDITIONAL 1,000,000 SHARES.
TOLEDO, OHIO, FEBRUARY 2, 2000--Citing a 14 percent sales increase, the
continued benefits of its capacity realignment efforts, and improved sales mix,
LIBBEY INC. (NYSE: LBY) announced that diluted earnings per share for the fourth
quarter ended December 31, 1999, were 74 cents compared with a diluted loss of
49 cents per share in the year-ago quarter. For the year, the company reported
record sales of $460.6 million and diluted earnings per share of $2.64 compared
with sales of $436.5 million and diluted earnings per share of $1.42 for 1998.
The company recorded a capacity realignment charge of $20.0 million in the
fourth quarter of 1998, or 68 cents per share after tax, for expenses associated
with realigning its glass tableware production.
SALES UP 14 PERCENT, OPERATING INCOME UP 96 PERCENT IN FOURTH QUARTER
For the quarter ended December 31, 1999, sales increased 14.0 percent to $140.4
million from $123.2 million in the year-ago quarter. Double-digit sales
increases were recorded in all of the company's operations. In glass tableware,
sales benefited from a record performance in foodservice glassware. Both
glassware and dinnerware sales were positively impacted by sales of products
associated with the millennium.
The company recorded income from operations of $20.8 million during the quarter.
This compares with a loss from operations of $10.1 million in the year-ago
period, as the result of a capacity realignment charge of $20.0 million. The
capacity realignment charge in 1998 primarily related to costs associated with
the closure of the company's Wallaceburg, Ontario, glassware plant, including
employee severance payments and the disposition of assets.
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LIBBEY INC.
Excluding the effect of a $1.2 million credit to the capacity realignment
reserve, income from operations was $19.6 million during the quarter, compared
with $10.0 million in the prior year, representing an increase of 96.2 percent.
The company recorded earnings before interest and income taxes (EBIT) of $21.8
million compared with a loss before interest and income taxes of $11.5 million
in the year-ago quarter. The improved earnings primarily resulted from increased
sales of more profitable products, greater utilization of the company's
glassware plants, and an increase in equity earnings. Equity earnings increased
to $1.1 million, compared with a loss of $1.9 million in the year-ago quarter,
and increased primarily as a result of higher profits at Vitrocrisa, the
company's joint venture in Mexico. In the fourth quarter of 1998, Vitrocrisa
recorded higher interest costs, influenced by the strengthening of the Mexican
peso during the fourth quarter of 1998, negatively impacting equity earnings.
For the quarter ended December 31, 1999, the company recorded net income of
$11.9 million, or 74 cents diluted earnings per share compared with a net loss
of $8.7 million, or 49 cents diluted loss per share, in the year-ago period.
Excluding the effect of the capacity realignment charge, diluted earnings per
share would have totaled 19 cents in 1998.
STRONG CASH FLOW PERFORMANCE, SHARES REPURCHASED
In the quarter, the company generated significant cash flow from operations and
reductions in working capital. Inventories fell $15.4 million to $89.9 million
and accounts receivable fell $1.2 million to $62.3 million. Cash flow was
primarily used in the quarter to repurchase 900,200 shares of the company's
common stock. Even with the use of $23.7 million in cash to fund the stock
repurchase in the quarter, the company recorded a reduction in total debt of
$20.0 million to $178.7 million. For the year, before the use of the $42.8
million in cash to repurchase shares, the company generated $55.9 million of
free cash flow, the strongest operating cash flow performance in the company's
history.
RECORD SALES AND NET INCOME IN 1999, EARNINGS PER SHARE UP 24 PERCENT
For the year ended December 31, 1999, sales increased 5.5 percent to $460.6
million from $436.5 million in 1998. Sales increases were recorded in all of the
company's operations, with Syracuse China experiencing double-digit growth.
Income from operations increased to $78.2 million from $43.4 million last year.
Excluding the effect of the capacity realignment charge in the fourth quarter of
1998, income from operations would have totaled $63.4 million in the year-ago
period, or an improvement of 23.4 percent in 1999. The higher operating income
was the result of improved utilization of the company's glassware plants and
record sales. EBIT increased to $81.2 million from $53.7 million in 1998.
Excluding the capacity realignment charge, EBIT would have been $73.8 million in
1998. The increase was attributable to higher operating income, which more than
offset lower equity earnings at the company's joint venture in Mexico.
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LIBBEY, INC.
Net income was $43.4 million, or $2.64 per share on a diluted basis, compared
with $25.4 million, or $1.42 per share on a diluted basis in the year-ago
period. Excluding the impact of the capacity realignment charge in the fourth
quarter of 1998, net income would have been $37.9 million, or $2.12 diluted
earnings per share in 1998. The $2.64 per diluted share in 1999 represents an
increase of 24.5 percent over the adjusted diluted earnings per share of $2.12
in 1998.
Income from operations as a percent of sales was 17.0 percent compared with 9.9
percent in 1998. Excluding the capacity realignment charge, the margin was 14.5
percent. EBIT as a percent of sales was 17.6 percent in 1999, compared with 12.3
percent in the year-ago period. Excluding the capacity realignment charge, the
EBIT margin in 1998 was 16.9 percent. Net income as a percent of sales was 9.4
percent, compared with 5.8 percent in the year-ago period.
RESULTS AND OUTLOOK
Discussing the company's current results and outlook, John F. Meier, chairman
and chief executive officer, said, "We are most pleased with our 1999 results.
The success of our capacity realignment program, the positive impact of our
expanded sales coverage, and the strength of our millennium-driven sales all
contributed. Our goal is to deliver $48 million in net income in 2000, which
would represent continued strong growth and another record performance. While we
will be challenged to grow off of our strong sales performance in 1999, with
continued focus, exciting new products and with the commitment of our 3500
Libbey associates, I am confident we will reach our objective."
NEW SHARE REPURCHASE PLAN
The company also announced that its Board of Directors authorized the company to
buy back as many as an additional 1,000,000 shares of the company's common stock
in open market and negotiated purchases. This new authorization is in addition
to an authorized repurchase of 875,000 shares announced on October 25, 1999,
pursuant to which 748,000 shares have been repurchased. The average price of the
748,000 shares repurchased was $26.48. In total, the company now has
authorization to repurchase up to an additional 1,127,000 shares.
As of January 31, 2000, Libbey had 15,249,753 shares outstanding. Libbey said
the timing of any share repurchases will depend on market conditions and
repurchases will be in amounts as deemed advisable.
John F. Meier, chairmen and chief executive officer, commenting on the
repurchase plan, said, "We have been opportunistic in buying back our common
stock. This new share repurchase program is another aspect of our continuing
efforts to maximize shareholder value and represents our view as to the
long-term value of an investment in Libbey. Efforts to enhance sales mix,
improve capacity utilization, and increase our financial returns are working.
Our strong cash flow and financial condition allow us to expand our share
repurchase program without limiting our financial flexibility to pursue
acquisitions, which we are doing. We will use the program over time to
repurchase shares to increase shareholder value."
The above information 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 this time,
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LIBBEY, INC.
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.
Important factors potentially affecting performance include devaluations and
other major currency fluctuations relative to the U.S. dollar 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 the company's
joint venture in Mexico, Vitrocrisa, expressed under U.S. GAAP; the inability to
achieve savings and profit improvements at targeted levels in the company's
glassware sales from its production realignment efforts and re-engineering
programs, or within the intended time periods; inability to achieve targeted
manufacturing efficiencies at Syracuse China and cost synergies between World
Tableware and the company's other operations; significant increases in interest
rates that increase the company's borrowing costs and per unit increases in the
costs for natural gas, corrugated packaging, and other purchased materials;
protracted work stoppages related to collective bargaining agreements; increased
competition from foreign suppliers endeavoring to sell glass tableware in the
United States: major slowdowns in the retail, travel or entertainment industries
in the United States or Canada; whether the company completes any significant
acquisition, and whether such acquisitions can operate profitably.
Libbey Inc.:
o is the largest producer of glass tableware in North America;
o is a leading producer of tabletop products for the foodservice industry;
o exports to more than 100 countries; and,
o provides technical assistance to glass tableware manufacturers around the
world.
Based in Toledo, Ohio, the company operates glass tableware manufacturing plants
in California, Louisiana, and Ohio. In addition, Libbey is a joint venture
partner in the largest glass tableware company in Mexico. Through its Syracuse
China subsidiary, the company designs, manufactures and distributes an extensive
line of high-quality ceramic dinnerware, principally for foodservice
establishments in the United States. Through its World Tableware subsidiary, the
company 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. In 1999, its net sales totaled
$460.6 million.
FOR FURTHER INFORMATION REGARDING LIBBEY INC., FREE OF CHARGE VIA FAX,
DIAL 1-800-PRO-INFO AND USE TICKER SYMBOLS "LBY."
OR, VISIT LIBBEY INC.'S WEBSITE AT WWW.LIBBEY.COM
Tables to follow ...
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per-share data)
THREE MONTHS ENDED
Percent
December 31, 1999 December 31, 1998 Change
----------------- ----------------- -------
Net sales $140,372 $123,157 14.0%
Royalties and net technical assistance 353 755
-------- --------
Total revenues 140,725 123,912 13.6%
Cost of sales 102,787 98,219 4.7%
Selling, general and administrative expenses 18,338 15,701
Capacity realignment charge (credit) (1,236) 20,046
-------- --------
Income (loss) from operations 20,836 (10,054)
Equity earnings (loss) 1,107 (1,888)
Other income (expense)--net (185) 467
-------- --------
Earnings (loss) before interest and income taxes 21,758 (11,475)
Interest expense--net (3,114) (2,921)
-------- --------
Income (loss) before income taxes 18,644 (14,396)
Provision for income taxes 6,726 (5,733)
-------- --------
Net income (loss) $ 11,918 $ (8,663)
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Net income (loss) per share:
Basic $0.76 $ (0.50)
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Diluted $0.74 $ (0.49)
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Weighted average shares:
Outstanding 15,700 17,253
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Diluted 15,998 17,623
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TWELVE MONTHS ENDED
Percent
December 31, 1999 December 31, 1998 Change
----------------- ----------------- -------
Net sales $460,592 $436,522 5.5%
Royalties and net technical assistance 4,397 3,026
-------- --------
Total revenues 464,989 439,548 5.8%
Cost of sales 321,633 321,949 -0.1%
Selling, general and administrative expenses 64,131 54,191 18.3%
Capacity realignment charge 991 20,046
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Income from operations 78,234 43,362 80.4%
Equity earnings 2,915 8,880 -67.2%
Other income--net 13 1,493
-------- --------
Earnings before interest and income taxes 81,162 53,735 51.0%
Interest expense--net (12,501) (12,674)
-------- --------
Income before income taxes 68,661 41,061 67.2%
Provision for income taxes 25,233 15,618
-------- --------
Net income $ 43,428 $ 25,443 70.7%
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Net income per share:
Basic $2.69 $1.45
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Diluted $2.64 $1.42
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Weighted average shares:
Outstanding 16,151 17,524
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Diluted 16,477 17,916
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LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, 1999 December 31, 1998
----------------- -----------------
ASSETS
Cash $ 3,918 $ 3,312
Accounts receivable 62,329 49,797
Inventories 89,889 91,362
Other current assets 8,028 11,108
-------- --------
Total current assets 164,164 155,579
Investments 82,835 80,437
Other assets 35,974 36,249
Goodwill 46,328 47,935
Net property, plant and equipment 105,094 119,471
-------- --------
Total assets $434,395 $439,671
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LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 8,655 $ 14,932
Accounts payable 29,126 22,605
Accrued liabilities 24,777 22,702
Capacity realignment reserve 3,692 19,929
Other current liabilities 28,775 14,413
-------- --------
Total current liabilities 95,025 94,581
Long-term debt 170,000 176,300
Deferred taxes and other liabilities 24,986 22,873
Nonpension retirement benefits 52,541 51,057
Total shareholders' equity 91,843 94,860
-------- --------
Total liabilities and shareholders' equity $434,395 $439,671
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
TWELVE MONTHS ENDED
December 31, 1999 December 31, 1998
----------------- -----------------
Operating activities
Net income $ 43,428 $ 25,443
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 14,717 15,852
Amortization 4,036 3,654
Capacity realignment charge 991 20,046
Other non-cash charges 7,272 (447)
Equity earnings (2,915) (8,880)
Net change in components of working
capital and other assets 1,182 (4,391)
-------- --------
Net cash provided by operating activities 68,711 51,277
Investing activities
Additions to property, plant and equipment (9,428) (17,486)
Dividends received from equity investments 517 14,232
Other 94 1,639
-------- --------
Net cash used in investing activities (8,817) (1,615)
Financing activities
Net bank credit facility activity (6,300) (23,751)
Other net borrowings (6,217) 4,547
Stock options exercised 779 2,749
Treasury shares purchased (42,828) (27,258)
Dividends (4,821) (5,253)
-------- --------
Net cash used in financing activities (59,387) (48,966)
Effect of exchange rate fluctuations on cash 99 (18)
-------- --------
Increase in cash 606 678
Cash at beginning of year 3,312 2,634
-------- --------
Cash at end of period $ 3,918 $ 3,312
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LIBBEY INC.
CONDENSED CONSOLIDATED JOINT VENTURE INFORMATION
Income Statement Information
Year ended December 31, 1999 1998
==============================================================================================
Net sales $189,699 $172,562
Cost of sales 129,667 114,250
-------- --------
Gross profit 60,032 58,312
General expenses 21,260 19,765
-------- --------
Income from operations 38,772 38,547
Other income (loss) (1,058) 1,003
-------- --------
Earnings before finance costs 37,714 39,550
Interest expense 10,871 14,061
Translation gain (loss) (1,392) 4,433
-------- --------
Earnings before income taxes and profit sharing 25,451 29,922
Income taxes and profit sharing 16,040 8,336
-------- --------
Net income $ 9,411 $ 21,586
==============================================================================================
The above is summarized combined financial information for equity investments,
which includes the 49% ownership in Vitrocrisa, which manufactures, markets and
sells glass tableware (e.g. beverageware, plates, bowls, serveware and
accessories) and industrial glassware (e.g. coffee pots, blender jars, meter
covers, glass covers for cooking ware and lighting fixtures sold to original
equipment manufacturers) and the 49% ownership in Crisa Industrial, L.L.C.,
which distributes industrial glassware in the U.S. and Canada for Vitrocrisa,
for 1999 and 1998. The remaining ownership interest in Vitrocrisa and Crisa
Industrial L.L.C. is held, directly or indirectly, by Vitro, S.A. The results
reported by Vitro, S.A. for its Glassware business may differ from the Joint
Venture because (a) business activities and operations other than those of the
Joint Venture are considered in the Vitro, S.A. Glassware business, and (b) the
Vitro, S.A. Glassware business results are reported in accordance with
accounting principles generally accepted in Mexico ("Mexican GAAP").