Exhibit 99.2
[Libbey, Inc. logo] LIBBEY INC.
300 MADISON AVE
P.O. BOX 10060
TOLEDO, OH 43699
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N E W S R E L E A S E
AT THE COMPANY: AT FRB | WEBER SHANDWICK:
KENNETH WILKES KENNETH BOERGER SUZY LYNDE
VP/CFO VP/TREASURER ANALYST INQUIRIES
(419) 325-2490 (419) 325-2279 (312) 640-6772
FOR IMMEDIATE RELEASE
MONDAY, JANUARY 13, 2003
LIBBEY INC. ANNOUNCES EXPECTATION FOR SOLID EARNINGS
GROWTH IN 2003
Benefits of acquisitions, cost reduction efforts offset
decline in pension income
TOLEDO, OHIO, JANUARY 13, 2003--At a meeting with security analysts and
investors in Chicago, IL, management of LIBBEY INC. (NYSE: LBY), including John
F. Meier, chairman and chief executive officer, reviewed recent acquisitions and
operational strategies and plans to achieve sales, net income and cash flow
growth in 2003.
TRAEX AND ROYAL LEERDAM ACQUISITIONS EXPECTED TO ADD $0.15 TO $0.20 PER SHARE IN
2003
The company confirmed that the recent acquisitions of Traex and Royal Leerdam
are expected to add $69 to $73 million to revenues in 2003. Expectations are for
the acquisitions to be accretive in 2003 by $0.15 to $0.20 per diluted share.
COST REDUCTIONS ARE FOCUS OF INCREASED CAPITAL EXPENDITURE PROGRAM
Capital expenditure programs targeted to reduce costs in Libbey's domestic
facilities were also reviewed. Libbey plans to make investments of $30 to $35
million over the next three years in new equipment devoted to automating
processes and improving efficiencies. Combined with regular maintenance and
repair capital expenditures and other investments, total capital expenditures
are expected to average $30 million in each of the next three years. Investments
in automating inspection processes, ware handling and packaging of Libbey's
glassware and other efficiency improving investments are
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expected to generate $2 million in savings in 2003, growing to $4 to $5 million
of annual savings by 2005.
FOURTH QUARTER EXPECTED TO SHOW SIZABLE PROFIT GAIN
Results for the fourth quarter and full year 2002 are expected to be announced
on or about February 6, 2003. Management commented that the fourth quarter
should result in a sizable increase in profits and was characterized by:
[ ] a solid sales performance in both the foodservice and retail channels of
distribution, while sales to industrial customers remained soft.
[ ] higher maintenance and employee benefit costs negatively impacted gross
profit margin, partially offset by lower selling, general and administrative
expenses.
These factors should result in diluted earnings per share in the fourth quarter
in the range of $0.53 to $0.55, or an approximate 20 percent increase over the
fourth quarter of 2001.
SOLID GROWTH EXPECTED FOR 2003
While discussing expectations for 2003, Kenneth G. Wilkes, chief financial
officer and head-international operations, said, "We expect a solid 2003, with a
recovering economy and the continued success of new products contributing to 4
to 6 percent revenue growth from existing businesses, and total revenue growth
of over 20 percent when considering recent acquisitions." He added, "Like many
companies, we are facing a reversal from recording non-cash pension income in
2002 to incurring pension expense in 2003 associated with lower pension fund
investment returns and lower discount rates." The change, and higher retiree
medical expenses, will have a negative non-cash earnings impact of approximately
$0.30 in 2003. This additional accounting cost is expected to be more than
offset by the benefits of :
[ ] solid sales growth from existing businesses,
[ ] a more profitable sales mix
[ ] cost reduction efforts increasing profits in excess of $0.30 per diluted
share, and
[ ] added profits from the Traex and Royal Leerdam acquisitions
Wilkes commented that, "We are particularly encouraged by our expected strong
cash flow performance, with the significant increase in expected `cash'
earnings, more than offsetting the earnings reduction due to changes in retiree
medical and non-cash pension costs. In addition, we expect cash flow from
operations to total $55 to $60 million in 2003."
Total diluted earnings per share including Traex and Royal Leerdam for 2003 are
expected to be in the range of $2.55 to $2.60, as compared to $1.79 to $1.81 in
2002. Excluding the expenses associated with abandoned acquisitions in 2002,
full year diluted earnings per share in 2002 are expected to be in the range of
$2.34 to $2.36.
SHARE REPURCHASE AND DIVIDEND INCREASE
The company also reviewed its recent announcements on an authorization to
repurchase up to 2.5 million shares and the 33% increase in dividend rate to
$0.10 per quarter. While the decision to increase the dividend was independent
of recently announced proposals to
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eliminate taxation on dividend income, such an elimination would be one of the
factors the company would consider in the size and timing of future increases in
dividend rates.
LONG-TERM GOALS
John Meier concluded the meeting by reviewing the company's long-term goals,
which include:
[ ] expanding its business by product lines in foodservice supply and greater
international presence in glassware
[ ] increasing earnings by 10 percent annually
[ ] continuing to achieve a double-digit return on invested capital
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, 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: increased
competition from foreign suppliers endeavoring to sell glass tableware in the
United States and Mexico, including the impact of lower duties for imported
products; major slowdowns in the retail, travel or entertainment industries in
the United States, Canada, Mexico and Western Europe, caused by terrorist
attacks or otherwise; significant increases in per-unit costs for natural gas,
electricity, corrugated packaging, and other purchased materials; higher
interest rates that increase the company's borrowing costs; protracted work
stoppages related to collective bargaining agreements; increases in expenses
associated with higher medical costs, reduced pension income associated with
lower returns on pension investments and increased pension obligations;
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 operations or within the intended time periods; whether the company
completes any significant acquisition, and whether such acquisitions can operate
profitably.
Libbey Inc.:
o is a leading producer of glass tableware in North America;
o is a leading producer of tabletop products for the foodservice industry;
o exports to more than 75 countries; and,
o provides technical assistance to glass tableware manufacturers around
the world.
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Based in Toledo, Ohio, the company operates glass tableware manufacturing plants
in the United States in California, Louisiana, and Ohio and in The Netherlands.
In addition, Libbey is a joint venture partner in the largest glass tableware
company in Mexico. Its Syracuse China subsidiary designs, manufactures and
distributes an extensive line of high-quality ceramic dinnerware, principally
for foodservice establishments 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, including: ware washing racks, trays,
dispensers, bar supply, tabletop, food preparation items and brushes. In 2001,
Libbey Inc.'s net sales totaled $419.6 million.
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