EXHIBIT 99
[LIBBEY 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:
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KENNETH WILKES KENNETH BOERGER SUZY LYNDE
VP/CFO VP/TREASURER ANALYST INQUIRIES
(419) 325-2490 (419) 325-2279 (312) 640-6772
FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 6, 2003
LIBBEY INC. ANNOUNCES FOURTH QUARTER DILUTED
EARNINGS PER SHARE OF $0.56; UP 24 PERCENT
REPORTS DOUBLE DIGIT INCREASES IN SALES TO FOODSERVICE AND RETAIL CUSTOMERS
TOLEDO, OHIO, FEBRUARY 6, 2003--Citing strong sales increases to foodservice and
retail customers, LIBBEY INC. (NYSE: LBY) announced that diluted earnings per
share for the fourth quarter ended December 31, 2002, were up 24.4 percent to 56
cents on sales of $117.4 million, an increase of 4.7 percent. For the year, the
company reported that sales were up 3.4 percent to $433.8 million from $419.6 in
the year-ago period. Diluted earnings per share for the year were $1.82 compared
to $2.53 in 2001. Excluding the impact of the expenses related to the abandoned
acquisition of Anchor Hocking, diluted earnings per share for 2002 would have
been $2.37. On January 13, 2003, the company announced its expectation that
diluted earnings per share for the quarter would be between 53 and 55 cents.
DILUTED EARNINGS PER SHARE $0.56 IN FOURTH QUARTER
For the quarter-ended December 31, 2002, sales were $117.4 million up 4.7
percent from $112.1 million in the year-ago quarter. Both foodservice and retail
sales showed solid growth in the fourth quarter, while sales to industrial
customers were lower than last year.
The company recorded income from operations of $12.3 million during the quarter.
This is an increase of 11.6 percent compared with the year-ago period. Increased
production associated with higher sales and efforts to reduce selling, general
and administrative expenses also contributed to the growth in profits and
profitability.
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The company recorded earnings before interest and income taxes (EBIT) of $13.4
million as compared with $11.2 million in the year-ago quarter, an increase of
20 percent. Pretax equity earnings were up $0.9 million to $1.2 million,
compared with $0.3 million in the year-ago quarter and increased primarily as a
result of higher profits at Vitrocrisa, the company's joint venture in Mexico.
Vitrocrisa's results were impacted by cost savings initiatives and lower Mexican
taxes.
For the quarter-ended December 31, 2002, the company recorded net income of $8.4
million, or diluted earnings per share of 56 cents compared with net income of
$7.0 million, or diluted earnings per share of 45 cents, in the year-ago period.
The company recorded a $26.4 million reduction in shareholders equity as part of
the recording of an additional minimum pension liability in the quarter.
SALES INCREASED 3.4 PERCENT IN 2002
For the year-ended December 31, 2002, sales increased 3.4 percent to $433.8
million from $419.6 million in 2001. Income from operations was $53.7 million
compared with $62.4 million last year. The reduced operating income was the
result of an unfavorable sales mix, higher manufacturing expenses and higher
general and administrative expenses due to lower pension income and an increase
in nonpension postretirement expense. EBIT was $44.9 million compared to $68.6
million in 2001. The decrease was partially attributable to a decline in
operating income, however, the primary driver for the reduction was the expense
related to the abandoned acquisition of Anchor Hocking totaling $13.6 million
pretax. Net income was $28.1 million, or $1.82 per share on a diluted basis,
compared with $39.4 million, or $2.53 per share on a diluted basis in the
year-ago-period. Excluding the expenses related to the abandoned acquisition,
net income and diluted earnings per share for 2002 would have been $36.6 million
and $2.37, respectively.
WORKING CAPITAL
Compared to the year-ago-period, inventories increased $12.7 million. The
increase is entirely attributable to the acquisition of Traex and Royal Leerdam
in the fourth quarter. Increases in accounts receivable of $5.9 million compared
to the year-ago-period also are entirely attributable to the acquisitions. This
represents another solid performance in working capital management considering
the sales increase in the quarter.
SHARE REPURCHASE PLAN
The company announced that it had repurchased a total of 935,600 shares during
2002 for $26.8 million. The company confirmed that it has authorization to
repurchase an additional 2,500,000 shares pursuant to a share repurchase plan
previously approved by the Board of Directors.
RESULTS AND OUTLOOK
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Discussing the company's current results and outlook, John F. Meier, chairman
and chief executive officer, said, "The fourth quarter had many positive
developments for Libbey. We are encouraged by the continued growth in sales to
our core foodservice and retail customers. Our bottom line also finished the
year with a sizeable increase, up 24 percent. We consummated two strategic
acquisitions; Traex on December 2, 2002, a key supplier of plastic products to
the U. S. foodservice industry and Royal Leerdam on December 31, 2002, among the
world leaders in manufacturing and selling fine glass stemware." These
acquisitions did not have a material impact on the company's earnings in the
quarter.
He continued, "Our expectation for 2003 is that diluted earnings per share will
increase to $2.55 to $2.60, or an 8 to10 percent increase over the 2002 result
(excluding the 2002 acquisition expense write-off) as:
- - sales growth will continue in our key areas of retail and foodservice;
- - cost reduction efforts implemented during 2002 and new initiatives underway
will provide savings that will help offset an increase of an estimated $7
million (or $0.30 per diluted share) in non-cash pension expense and higher
retiree medical expenses;
- - the Traex and Royal Leerdam acquisitions will contribute to earnings growth;
- - the company's cash flow performance will be strong, with cash flow from
operations of approximately $60 million expected, or a 10% increase."
Concerning the first quarter, the company announced expectations of earnings per
diluted share of $0.22 to $0.27, which compares to $0.25 in the year ago period.
WEBCAST INFORMATION
Libbey will hold a conference call for investors on Thursday, February 6, 2003
at 11 a.m. Eastern Standard Time. The conference call will be simulcast live on
the Internet, accessible on both www.libbey.com and
http://www.firstcallevents.com/service/ajwz373620695gf12.html. To listen to the
call, please go to the website at least 15 minutes early to register, download
and install any necessary software. A replay will also be available for 7 days
after the conclusion of the call.
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
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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.:
- - is a leading producer of glass tableware in North America;
- - is a leading producer of tabletop products for the foodservice industry;
- - exports to more than 75 countries; and,
- - provides technical assistance to glass tableware manufacturers around the
world.
Based in Toledo, Ohio, the company operates glass tableware manufacturing plants
in the United States in California, Louisiana, and Ohio and in The Netherlands.
Its Royal Leerdam subsidiary, located in Leerdam, The Netherlands, is among the
world leaders in producing and selling glass stemware to retail, foodservice and
industrial clients. 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 2002, Libbey Inc.'s net sales totaled $433.8 million.
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share amounts)
THREE MONTHS ENDED
Percent
December 31, 2002 December 31, 2001 Change
----------------- ----------------- ------
Net sales $117,399 $112,083 4.7%
Freight billed to customers 536 604
Royalties and net technical assistance 300 972
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Total revenues 118,235 113,659 4.0%
Cost of sales 92,175 87,010 5.9%
Selling, general and administrative expenses 13,773 15,637 -11.9%
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Income from operations 12,287 11,012 11.6%
Equity earnings - pretax 1,227 306
Expenses related to abandoned acquisition 19 -
Other expense--net (145) (164)
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Earnings before interest and income taxes 13,388 11,154 20.0%
Interest expense--net (2,186) (2,044)
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Income before income taxes 11,202 9,110 23.0%
Provision for income taxes 2,781 2,125
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Net income $8,421 $6,985 20.6%
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Net income per share:
Basic $0.57 $0.46
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Diluted $0.56 $0.45
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Weighted average shares:
Outstanding 14,812 15,325
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Diluted 14,943 15,576
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TWELVE MONTHS ENDED
Percent
December 31, 2002 December 31, 2001 Change
----------------- ----------------- ------
Net sales $433,761 $419,594 3.4%
Freight billed to customers 1,732 2,085
Royalties and net technical assistance 2,404 3,741
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Total revenues 437,897 425,420 2.9%
Cost of sales 327,565 307,255 6.6%
Selling, general and administrative expenses 56,631 55,716 1.6%
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Income from operations 53,701 62,449 -14.0%
Equity earnings--pretax 6,379 6,384
Expenses related to abandoned acquisition (13,634) -
Other expense--net (1,510) (241)
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Earnings before interest and income taxes 44,936 68,592 -34.5%
Interest expense--net (8,263) (9,360)
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Income before income taxes 36,673 59,232 -38.1%
Provision for income taxes 8,618 19,840
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Net income $28,055 $39,392 -28.8%
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Net income per share:
Basic $1.84 $2.58
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Diluted $1.82 $2.53
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Weighted average shares:
Outstanding 15,240 15,296
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Diluted 15,431 15,544
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LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, 2002 December 31, 2001
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ASSETS
Cash $ 1,683 $ 3,860
Accounts receivable 49,944 44,066
Inventories 109,634 96,936
Other current assets 13,487 9,068
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Total current assets 174,748 153,930
Investments 87,847 84,357
Other assets 39,016 58,715
Goodwill 59,795 43,282
Net property, plant and equipment 163,121 127,798
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Total assets $524,527 $468,082
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LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 2,660 $ 2,400
Accounts payable 31,633 33,125
Accrued liabilities 39,687 23,809
Other current liabilities 20,168 13,575
Long-term debt due within one year 115 143,115
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Total current liabilities 94,263 216,024
Long-term debt 188,403 2,517
Deferred taxes and other liabilities 54,450 36,045
Nonpension retirement benefits 47,193 48,131
Total shareholders' equity 140,218 165,365
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Total liabilities and shareholders' equity $524,527 $468,082
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
TWELVE MONTHS ENDED
December 31, 2002 December 31, 2001
----------------- -----------------
Operating activities
Net income $28,055 $39,392
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 17,262 15,157
Amortization 1,881 3,686
Gain on sale of land (381) -
Other non-cash charges 3,456 5,464
Net equity earnings (9,774) (2,665)
Net change in components of working
capital and other assets 13,706 (9,726)
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Net cash provided by operating activities 54,205 51,308
Investing activities
Additions to property, plant and equipment (16,739) (35,241)
Dividends received from equity investments 4,659 4,918
Acquisitions (62,072) -
Other 3,549 (1,563)
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Net cash used in investing activities (70,603) (31,886)
Financing activities
Net bank credit facility activity 43,001 (8,404)
Payment of financing fees (815) -
Other net borrowings 145 (4,968)
Stock options exercised 3,301 2,345
Treasury shares purchased (26,837) (1,229)
Dividends (4,574) (4,588)
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Net cash provided by (used in) financing activities 14,221 (16,844)
Effect of exchange rate fluctuations on cash - -
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Increase (decrease) in cash (2,177) 2,578
Cash at beginning of year 3,860 1,282
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Cash at end of period $1,683 $3,860
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LIBBEY INC.
CONDENSED CONSOLIDATED JOINT VENTURE INFORMATION
Income Statement Information
Three months ended December 31, 2002 2001
- --------------------------------------------------------------------------------------
Net sales $ 50,166 $ 52,966
Cost of sales 42,745 44,857
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Gross profit 7,421 8,109
Operating expenses 4,876 5,295
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Income from operations 2,545 2,814
Other income 1,188 1,054
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Earnings before finance costs and taxes 3,733 3,868
Interest expense 1,654 1,375
Translation gain (loss) 425 (1,003)
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Earnings before income taxes 2,504 1,490
Income taxes (2,209) 3,279
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Net income (loss) $ 4,713 $ (1,789)
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Twelve months ended December 31, 2002 2001
- --------------------------------------------------------------------------------------
Net sales $ 193,152 $ 199,373
Cost of sales 158,801 157,011
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Gross profit 34,351 42,362
Operating expenses 21,108 21,250
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Income from operations 13,243 21,112
Other income 2,872 5,014
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Earnings before finance costs and taxes 16,115 26,126
Interest expense 6,127 7,855
Translation gain (loss) 3,030 (1,780)
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Earnings before income taxes 13,018 16,491
Income taxes (6,928) 7,588
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Net income $ 19,946 $ 8,903
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The above are summarized combined financial information for equity investments,
which includes the 49% ownership in Vitrocrisa, S. de R.L. de C.V. and related
Mexican companies, 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 2002 and 2001.
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