UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark one)
(X)QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-12084
Libbey Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-1559357
- -------- ----------
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
300 Madison Avenue, Toledo, Ohio 43604
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
419-325-2100
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 par value - 13,571,391 shares at July 31, 2003
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements of Libbey
Inc. and all wholly owned subsidiaries (the Company) have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (including normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three-month or six month periods ended June 30, 2003, are not necessarily
indicative of the results that may be expected for the year ended December 31,
2003.
The balance sheet at December 31, 2002, has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2002.
2
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per-share amounts)
(unaudited)
Three months ended June 30,
Revenues: 2003 2002
---- ----
Net sales $128,254 $114,086
Freight billed to customers 529 434
Royalties and net technical assistance income 640 738
---------------------------------------------------------
Total revenues 129,423 115,258
Costs and expenses:
Cost of sales 99,085 83,491
Selling, general and administrative expenses 17,514 13,363
---------------------------------------------------------
116,599 96,854
---------------------------------------------------------
Income from operations 12,824 18,404
Other income (loss):
Pretax equity earnings 1,997 4,546
Expenses related to abandoned acquisition -- (13,626)
Other - net 210 22
---------------------------------------------------------
2,207 (9,058)
---------------------------------------------------------
Earnings before interest and income taxes 15,031 9,346
Interest expense - net 3,611 2,081
---------------------------------------------------------
Income before income taxes 11,420 7,265
Provision for income taxes 3,510 2,365
---------------------------------------------------------
Net income $ 7,910 $ 4,900
=========================================================
Net income per share
Basic $ 0.59 $ 0.32
=========================================================
Diluted $ 0.59 $ 0.31
=========================================================
Dividends per share $ 0.10 $ 0.075
=========================================================
See accompanying notes
3
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per-share amounts)
(unaudited)
Six months ended June 30,
Revenues: 2003 2002
---- ----
Net sales $240,157 $212,755
Freight billed to customers 963 852
Royalties and net technical assistance income 1,390 1,537
----------------------------------------------------
Total revenues 242,510 215,144
Costs and expenses:
Cost of sales 189,864 160,507
Selling, general and administrative expenses 34,280 27,617
----------------------------------------------------
224,144 188,124
----------------------------------------------------
Income from operations 18,366 27,020
Other income (loss):
Pretax equity earnings 1,847 4,170
Expenses related to abandoned acquisition -- (13,626)
Other - net 336 (160)
----------------------------------------------------
2,183 (9,616)
----------------------------------------------------
Earnings before interest and income taxes 20,549 17,404
Interest expense - net 6,152 3,964
----------------------------------------------------
Income before income taxes 14,397 13,440
Provision for income taxes 4,486 4,588
----------------------------------------------------
Net income $ 9,911 $ 8,852
====================================================
Net income per share
Basic $ 0.71 $ 0.58
====================================================
Diluted $ 0.71 $ 0.57
====================================================
Dividends per share $ 0.20 $ 0.15
====================================================
See accompanying notes
4
LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, December 31,
2003 2002
----- ----
unaudited)
ASSETS
Current assets:
Cash $ 5,862 $ 1,683
Accounts receivable:
Trade, less allowances of $5,802 and $6,310 53,000 46,308
Other, less allowances of $1,519 and $1,482 3,535 3,636
----------------------------------------------------
56,535 49,944
Inventories
Finished goods 114,356 100,405
Work in process 4,673 4,512
Raw materials 3,625 3,169
Operating supplies 866 1,548
----------------------------------------------------
123,520 109,634
Prepaid expenses and deferred taxes 12,993 13,487
----------------------------------------------------
Total current assets 198,910 174,748
Other assets:
Repair parts inventories 6,535 5,603
Intangibles, net of accumulated amortization of $3,766 and $3,380 25,989 26,375
Deferred software, net of accumulated amortization of $12,258
and $11,679 2,384 2,585
Other assets 4,846 4,453
Investments 84,596 87,847
Goodwill 61,228 59,795
----------------------------------------------------
185,578 186,658
Property, plant and equipment, at cost 312,895 300,690
Less accumulated depreciation 149,547 137,569
----------------------------------------------------
Net property, plant and equipment 163,348 163,121
----------------------------------------------------
Total assets $547,836 $524,527
====================================================
See accompanying notes
5
LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, December 31,
2003 2002
----- ----
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 4,808 $ 2,660
Accounts payable 32,474 31,633
Salaries and wages 12,972 14,670
Accrued liabilities 45,252 39,687
Income taxes 3,980 5,498
Long-term debt due within one year 115 115
----------------------------------------------------
Total current liabilities 99,601 94,263
Long-term debt 231,052 188,403
Deferred taxes 11,077 11,780
Other long-term liabilities 12,826 14,015
Pension liability 29,910 28,655
Nonpension postretirement benefits 47,633 47,193
----------------------------------------------------
Total long-term liabilities 332,498 290,046
----------------------------------------------------
Total liabilities 432,099 384,309
----------------------------------------------------
Shareholders' equity:
Common stock, par value $.01 per share, 50,000,000 shares authorized,
18,626,955 shares issued (18,256,277 shares
issued in 2002) 186 183
Capital in excess of par value 299,678 293,537
Treasury stock 5,070,564 shares (3,625,000 shares in 2002), at
cost (140,099) (102,206)
Deficit (12,293) (19,413)
Accumulated other comprehensive loss (31,735) (31,883)
----------------------------------------------------
Total shareholders' equity 115,737 140,218
-----------------------------------------------------
Total liabilities and shareholders' equity $547,836 $524,527
=====================================================
See accompanying notes
6
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Six months ended June 30,
2003 2002
----- ----
Operating activities
Net income $9,911 $8,852
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation 12,766 8,858
Amortization 966 990
Other non-cash charges (3,122) (619)
Net equity earnings (1,479) (2,679)
Net change in components of working capital and other assets (12,685) (790)
---------------------------------------------------
Net cash provided by operating activities 6,357 14,612
Investing activities
Additions to property, plant and equipment (10,716) (8,151)
Dividends received from equity investments 4,900 4,659
Other 897 --
---------------------------------------------------
Net cash used in investing activities (4,919) (3,492)
Financing activities
Net bank credit facility activity (61,872) (11,000)
Payment of financing fees (663) (815)
Senior notes 100,000 --
Other net borrowings 2,088 (876)
Stock options exercised 4,841 2,358
Treasury shares purchased (38,888) --
Dividends (2,788) (2,307)
---------------------------------------------------
Net cash provided by (used in) financing activities 2,718 (12,640)
---------------------------------------------------
Effect of exchange rate fluctuations on cash 23 --
---------------------------------------------------
Increase (decrease) in cash 4,179 (1,520)
Cash at beginning of year 1,683 3,860
---------------------------------------------------
Cash at end of period $5,862 $2,340
===================================================
See accompanying notes
7
LIBBEY INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollars in thousands, except share data
and per-share amounts
(unaudited)
1. LONG-TERM DEBT
On February 10, 2003, the Company entered into an unsecured agreement for an
Amended and Restated Revolving Credit Agreement (Revolving Credit Agreement or
Agreement) among Libbey Glass Inc. and Libbey Europe B.V., as borrowers. This
amended the previous Revolving Credit and Swing Line Facility that had named
Libbey Glass Inc. as borrower. The amendment was primarily for the Company to
borrow euros. The Agreement is with a group of banks that provides for a
Revolving Credit and Swing Line Facility (Facility) permitting borrowings up to
an aggregate total of $250 million, maturing April 23, 2005, with an option to
extend for two additional one-year periods. Swing Line borrowings are limited to
$25 million with interest calculated at the prime rate minus the Facility Fee
Percentage (Facility Fee Percentage) as defined in the Agreement. Revolving
Credit Agreement U.S. dollar borrowings bear interest at the Company's option at
either the prime rate minus the Facility Fee Percentage or a Eurodollar rate
plus the Applicable Eurodollar Margin (Applicable Eurodollar Margin) as defined
in the Agreement. The Facility Fee Percentage and Applicable Eurodollar Margin
vary depending on the Company's performance against certain financial ratios.
The Facility Fee Percentage and the Applicable Eurodollar Margin were 0.375% and
1.375%, respectively, at June 30, 2003.
Under the Agreement, the Company may also elect to borrow under a Negotiated
Rate Loan alternative of the Revolving Credit and Swing Line Facility at
floating rates of interest, up to a maximum of $125 million. The Revolving
Credit and Swing Line Facility also provides for the issuance of $30 million of
letters of credit, with such usage applied against the $250 million limit. At
June 30, 2003, the Company had $5.4 million in letters of credit outstanding
under the Facility.
Libbey Europe B.V. may have euro-denominated borrowings under the Revolving
Credit Agreement in an amount not to exceed the Offshore Currency equivalent of
$60 million. Offshore Currency Swing Line borrowings are currently limited to
$10 million of the $25 million total Swing Line borrowing. Interest is
calculated at the Offshore Currency Swing Line rate plus applicable Offshore
Currency Swing Line Margin, as defined in the Agreement. Revolving Offshore
Currency Borrowings bear interest at the Offshore Currency Rate plus applicable
spread, as defined in the Agreement.
The Company pays a Commitment Fee Percentage on the total credit provided under
the Revolving Credit Agreement. No compensating balances are required by the
Agreement. The Agreement requires the maintenance of certain financial ratios,
restricts the incurrence of indebtedness and other contingent financial
obligations, and restricts certain types of business activities and investments.
The Company was in compliance with the covenants at June 30, 2003.
8
Libbey Inc. and the subsidiaries of Libbey Glass Inc. guarantee the debt of
Libbey Glass Inc., and Libbey Glass Inc. guarantees the debt of Libbey Europe
B.V. (all related parties which are included in the Consolidated Financial
Statements).
The Company has entered into interest rate protection agreements (Rate
Agreements) with respect to $100 million of debt under its Revolving Credit
Agreement as a means to manage its exposure to fluctuating interest rates. The
Rate Agreements effectively convert this portion of the Company's Revolving
Credit Agreement borrowings from variable rate debt to a fixed-rate basis, thus
reducing the impact of interest rate changes on future income. The average fixed
rate of interest for the Company's borrowings related to the Rate Agreements at
June 30, 2003 is 5.8% and the total interest rate, including applicable fees, is
7.6%. The average maturity of these Rate Agreements is 1.8 years. The remaining
debt under the Revolving Credit Agreement not covered by the Rate Agreements has
fluctuating interest rates with a weighted average rate of 2.8% at June 30,
2003.
The interest rate differential to be received or paid under the Rate Agreements
is being recognized over the life of the Rate Agreements as an adjustment to
interest expense. If the counterparts to these Rate Agreements fail to perform,
the Company would no longer be protected from interest rate fluctuations by
these Rate Agreements. However, the Company does not anticipate nonperformance
by the counterparts.
On March 31, 2003, the Company completed the issuance of $100 million of
privately placed senior notes. Eighty million dollars of the notes have a fixed
interest rate with $25 million at an interest rate of 3.69% due March 31, 2008
and the other $55 million at an interest rate of 5.08% due March 31, 2013. The
remaining $20 million has a floating interest rate at a margin over the London
Interbank Offer Rate (LIBOR) that is set quarterly. The interest rate at June
30, 2003 on the $20 million debt was 2.15%. The proceeds of the note issuance
were used to retire debt outstanding under the Revolving Credit Agreement.
Libbey Inc. and the subsidiaries of Libbey Glass Inc. guarantee the debt of
Libbey Glass Inc. associated with these notes.
2. INVESTMENTS IN UNCONSOLIDATED AFFILIATES
The Company is a 49% equity owner in Vitrocrisa, S. de R.L. de C.V. and related
Mexican companies (Vitrocrisa) which manufacture, market, and sell glass
tableware (beverageware, plates, bowls, serveware, and accessories) and
industrial glassware (coffee pots, blender jars, meter covers, glass covers for
cooking ware, and lighting fixtures sold to original equipment manufacturers)
and a 49% equity owner in Crisa Industrial, L.L.C., a distributor of industrial
glassware for Vitrocrisa in the U.S. and Canada.
Libbey Glass Inc. guarantees the payment by Vitrocrisa of its obligation to
purchase electricity. The guarantee is based on the provisions of a Power
Purchase Agreement to which Vitrocrisa is a party. The guarantee is limited to
49% of any such obligation of Vitrocrisa, limited to an aggregate amount of $5.0
million. The guarantee was entered into in
9
October 2000 and continues for 15 years from the initial date of electricity
generation, which commenced on April 12, 2003.
Summarized combined financial information for the Company's investments for 2003
and 2002, accounted for by the equity method, is as follows:
June 30, December 31,
2003 2002
---- ----
Current assets $75,565 $ 93,311
Non-current assets 111,076 115,054
---------------------------------------------
Total assets 186,641 208,365
Current liabilities 74,440 78,547
Other liabilities and deferred items 89,624 100,063
---------------------------------------------
Total liabilities and deferred items 164,064 178,610
---------------------------------------------
Net assets $22,577 $ 29,755
=============================================
Three months ended
June 30,
-------------------------------------------
2003 2002
---- ----
Total revenues $48,260 $53,801
Cost of sales 35,930 39,781
-------------------------------------------
Gross profit 12,330 14,020
General expenses 5,963 5,682
-------------------------------------------
Income from operations 6,367 8,338
Other (loss) (216) (164)
-------------------------------------------
Earnings before finance costs and income taxes 6,151 8,174
Interest expense 1,349 1,312
Translation (loss) gain (727) 2,271
-------------------------------------------
Income before income taxes 4,075 9,133
Provision for income taxes 1,075 3,387
------------------------------------------
Net income $ 3,000 $ 5,746
===========================================
Six months ended
June 30,
-------------------------------------------
2003 2002
---- ----
Total Revenues $ 86,547 $ 97,407
Cost of sales 68,929 76,697
-------------------------------------------
Gross profit 17,618 20,710
General expenses 10,819 10,930
-------------------------------------------
Income from operations 6,799 9,780
Other (loss) (208) (96)
-------------------------------------------
Earnings before finance costs and income taxes 6,591 9,684
Interest expense 2,743 2,958
Translation (loss) gain (80) 1,784
-------------------------------------------
Income before income taxes 3,768 8,510
Provision for income taxes 751 3,043
-------------------------------------------
Net income $ 3,017 $ 5,467
===========================================
10
3. CASH FLOW INFORMATION
Interest paid in cash aggregated $4,718 and $4,145 for the first six months of
2003 and 2002, respectively. Income taxes paid in cash aggregated $5,288 and
$8,071 for the first six months of 2003 and 2002, respectively.
4. NET INCOME PER SHARE OF COMMON STOCK
Basic net income per share of common stock is computed using the weighted
average number of shares of common stock outstanding. Diluted net income per
share of common stock is computed using the weighted average number of shares of
common stock outstanding and includes common share equivalents.
The following table sets forth the computation of basic and diluted earnings per
share:
Quarter ended June 30, 2003 2002
- -------------------------------------------------------------- ---- ----
Numerator for basic and diluted earnings per share--net
income which is available to common shareholders $ 7,910 $ 4,900
Denominator for basic earnings per share--weighted-average
shares outstanding 13,307,325 15,417,381
Effect of dilutive securities--employee stock options
and Employee Stock Purchase Plan (ESPP) 11,064 276,952
--------------------- ---------------------
Denominator for diluted earnings per share--adjusted
weighted-average shares and assumed conversions 13,318,389 15,694,333
Basic earnings per share $ 0.59 $ 0.32
Diluted earnings per share $ 0.59 $ 0.31
11
Six Months ended June 30, 2003 2002
- -------------------------------------------------------------- ---- ----
Numerator for basic and diluted earnings per share--net
income which is available to common shareholders $ 9,911 $ 8,852
Denominator for basic earnings per share--weighted-average
shares outstanding
13,883,030 15,380,651
Effect of dilutive securities--Employee stock options
and ESPP 16,325 265,781
--------------------- ---------------------
Denominator for diluted earnings per share--adjusted
weighted-average shares and assumed conversions 13,899,355 15,646,432
Basic earnings per share $ 0.71 $ 0.58
Diluted earnings per share $ 0.71 $ 0.57
5. COMPREHENSIVE INCOME
The Company's components of comprehensive income are as follows:
Three months ended
June 30,
---------------------------------------------
2003 2002
---- ----
Net income $ 7,910 $ 4,900
Change in fair value of derivative instruments (253) (1,382)
---------------------------------------------
Comprehensive income $ 7,657 $ 3,518
=============================================
Six months ended
June 30,
---------------------------------------------
2003 2002
---- ----
Net income $ 9,911 $ 8,852
Change in fair value of derivative instruments 145 906
Effect of exchange rate fluctuation 3 --
---------------------------------------------
Comprehensive income $10,059 $ 9,758
=============================================
Accumulated other comprehensive loss primarily includes $5,090 and $5,235 for
effect of derivatives and $26,647 and $26,647 for minimum pension liability as
of June 30, 2003 and December 31, 2002, respectively.
12
6. DERIVATIVES
The change in other comprehensive income (loss) for the Company is as follows:
Three months ended
June 30,
---------------------------------------------
2003 2002
---- ----
Change in fair value of derivative instruments $(405) $(2,215)
Less:
Income tax benefit 152 833
---------------------------------------------
Other comprehensive loss related to derivatives $(253) $(1,382)
=============================================
---------------------------------------------
Six months ended
June 30,
---------------------------------------------
2003 2002
---- ----
Change in fair value of derivative instruments $233 $1,452
Less:
Income tax expense (88) (546)
---------------------------------------------
Other comprehensive income related to derivatives $145 $ 906
=============================================
As of June 30, 2003, the Company has Interest Rate Protection Agreements for
$100.0 million of its variable rate debt and commodity contracts for 2.0 million
British Thermal Units (BTUs) of natural gas accounted for under hedge
accounting. The fair value of these derivatives are included in accrued
liabilities and other assets on the balance sheet for the Rate Agreements and
commodity contracts, respectively. At June 30, 2002, the Company had Rate
Agreements for $100.0 million of its variable rate debt and commodity contracts
for 1.9 million BTUs of natural gas.
The Company does not believe it is exposed to more than a nominal amount of
credit risk in its interest rate and natural gas hedges as the counterparts are
established financial institutions.
All of the Company's derivatives qualify and are designated as cash flow hedges
at June 30, 2003. Hedge accounting is only applied when the derivative is deemed
to be highly effective at offsetting changes in fair values or anticipated cash
flows of the hedged item or transaction. The ineffective portion of the change
in the fair value of a derivative designated as a cash flow hedge is recognized
in current earnings. Ineffectiveness recognized in earnings during the second
quarter of 2003 and 2002 was not material.
7. NEW ACCOUNTING STANDARDS
In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, "Consolidation of Variable Interest Entities." The
Interpretation addresses the requirements for business enterprises
13
to consolidate related entities in which they are determined to be the primary
beneficiary as a result of their variable economic interests. The Interpretation
is intended to provide guidance in judging multiple economic interests in an
entity and in determining the primary beneficiary. The Interpretation outlines
disclosure requirements for variable interest entities in existence prior to
January 31, 2003 and requires consolidation of variable interest entities
created after January 31, 2003. In addition, the Interpretation requires
consolidation of variable interest entities created prior to January 31, 2003
for fiscal periods beginning after June 15, 2003. This standard has no impact on
the Company's financial statements for the second quarter of 2003.
In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities" (SFAS No. 149). This statement amends and clarifies
financial accounting and reporting for derivative instruments. The statement is
effective for all contracts entered into or modified after June 30, 2003. This
standard has no impact on the Company's financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This standard
requires that certain financial instruments embodying obligations to transfer
assets or issue equity securities be classified as liabilities. It is effective
for financial instruments entered into or modified after May 31, 2003, and is
otherwise effective July 1, 2003. This standard has no impact on the Company's
financial statements.
14
8. STOCK OPTIONS
The Company has two stock-based employee compensation plans. The Company
accounts for the plans under the recognition and measurement principles of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25), and related Interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under those
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant. The following disclosures are in accordance with
SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123) as
amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition
and Disclosure" (SFAS No. 148).
- --------------------------------------------------------------------------------------------------------
Three months ended June 30, 2003 2002
- --------------------------------------------------------------------------------------------------------
Net Income:
Reported net income $7,910 $4,900
Stock-based employee compensation expense determined under
fair value based method for all awards, net of
related tax effects 419 433
- --------------------------------------------------------------------------------------------------------
Pro forma net income $7,491 $4,467
- --------------------------------------------------------------------------------------------------------
Basic earnings per share:
Reported net income $0.59 $0.32
Stock-based employee compensation expense determined
under fair value based method for all awards,
net of related tax effects 0.03 0.03
- --------------------------------------------------------------------------------------------------------
Pro forma basic earnings per share $0.56 $0.29
- --------------------------------------------------------------------------------------------------------
Diluted earnings per share:
Reported net income $0.59 $0.31
Stock-based employee compensation expense determined
under fair value based method for all awards,
net of related tax effects 0.03 0.03
- --------------------------------------------------------------------------------------------------------
Pro forma diluted earnings per share $0.56 $0.28
- --------------------------------------------------------------------------------------------------------
15
- --------------------------------------------------------------------------------------------------------
Six months ended June 30, 2003 2002
- --------------------------------------------------------------------------------------------------------
Net Income:
Reported net income $9,911 $8,852
Stock-based employee compensation expense determined under
fair value based method for all awards, net of
related tax effects 822 843
- --------------------------------------------------------------------------------------------------------
Pro forma net income $9,089 $8,009
- --------------------------------------------------------------------------------------------------------
Basic earnings per share:
Reported net income $0.71 $0.58
Stock-based employee compensation expense determined under
fair value based method for all awards, net of
related tax effects 0.06 0.06
- --------------------------------------------------------------------------------------------------------
Pro forma basic earnings per share $0.65 $0.52
- --------------------------------------------------------------------------------------------------------
Diluted earnings per share:
Reported net income $0.71 $0.57
Stock-based employee compensation expense determined
under fair value based method for all awards,
net of related tax effects 0.06 0.06
- --------------------------------------------------------------------------------------------------------
Pro forma diluted earnings per share $0.65 $0.51
- --------------------------------------------------------------------------------------------------------
9. ACQUISITIONS
Traex Acquisition
On December 2, 2002, the Company acquired substantially all the assets of the
Traex business (Traex) from Menasha Corporation for $16.8 million in cash. Traex
manufactures and markets a wide-range of plastic products, including glassware
washing and storage racks, trays, dispensers and organizers for the foodservice
industry. Traex is located in Dane, Wisconsin. The operating results of Traex
have been included since the date of acquisition.
Royal Leerdam Acquisition
On December 31, 2002, the Company acquired the stock of Royal Leerdam (B.V.
Koninklijke Nederlandsche Glasfabriek Leerdam) for $44.1 million in cash from
BSN Glasspack N.V. Royal Leerdam manufactures and markets high-quality glass
stemware. Royal Leerdam is located in Leerdam,
16
Netherlands. The operating results of Royal Leerdam have been included since the
date of acquisition.
As part of the stock acquisition of Royal Leerdam (B. V. Koninklijke
Nederlandsche Glasfabriek Leerdam), the Company obtained an option, for a price
of one euro, to put the stock of B.V. Leerdam Crystal (a wholly owned subsidiary
of Royal Leerdam) back to BSN Glasspack N.V. Leerdam Crystal manufactures and
markets various hand-made crystal items. A letter to exercise the option was
sent to BSN Glasspack N.V. during the second quarter of 2003.
There have been no changes in the purchase price allocations since the date of
the acquisitions. However, the Company expects reasonable changes as additional
information becomes available.
The following unaudited pro forma results of operations assume the acquisitions
occurred as of January 1, 2002 (in thousands except per-share amounts):
Three Months ended June 30, 2002
----
- --------------------------------------------------------------------------------
Total revenues $131,089
Net income $5,766
- --------------------------------------------------------------------------------
Net income per share:
Basic $0.37
Diluted $0.37
Six Months ended June 30, 2002
----
- --------------------------------------------------------------------------------
Total revenues $244,004
Net income $9,985
- --------------------------------------------------------------------------------
Net income per share:
Basic $0.65
Diluted $0.64
The unaudited pro forma information is not necessarily indicative either of the
results of operations that would have occurred had the acquisitions been
consummated as of January 1, 2002.
17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - SECOND QUARTER 2003 COMPARED WITH SECOND QUARTER 2002
Three months ended
June 30,
---------------------------------------
(dollars in thousands)
----------------------
2003 2002
---- ----
Net Sales $128,254 $ 114,086
Gross profit 29,698 31,029
As a percent of sales 23.2% 27.2%
Income from operations $ 12,824 $ 18,404
As a percent of sales 10.0% 16.1%
Earnings before interest and income taxes $ 15,031 $ 9,346
As a percent of sales 11.7% 8.2%
Net income $ 7,910 $ 4,900
As a percent of sales 6.2% 4.3%
Management is not aware of any events or uncertainties that are likely to have a
material impact on the company's prospective results of operations or financial
condition; however, major slowdowns in the retail, travel, or entertainment
industries could result from the impact of armed hostilities or any other
international or national calamity, including any act of terrorism. Additional
risk factors are discussed in Other Information in the section "Qualitative and
Quantitative Disclosures About Market Risk."
For the quarter ended June 30, 2003, sales increased 12.4% to $128.3 million
from $114.1 million in the year-ago quarter. The increase in sales was
attributable to the sales of Royal Leerdam and Traex, both acquired in December
2002. Excluding these acquisitions, sales declined 4.9%, as sales to retail and
industrial customers were lower than the year-ago period. Glassware sales to
foodservice customers were up in the low single digits on a percentage basis.
Sales to customers located outside of the United States, increased to $27.8
million from $11.6 million in the year-ago period. This is primarily due to the
acquisitions. Excluding Royal Leerdam and Traex sales, sales to customers
outside of the United States increased 3.3% over the year-ago period.
Gross profit (defined as net sales plus freight billed to customers less cost of
sales) was $29.7 million and as a percent of sales was 23.2% in the second
quarter of 2003 compared to $31.0 million and 27.2% in the second quarter of
2002. Factors contributing to the decline, in addition to lower sales excluding
acquisitions, were higher natural gas
18
costs of approximately $2 million, higher other factory operating costs in the
company's glassware operations totaling approximately $0.8 million and
additional costs (mostly non-cash) for pension and postretirement medical
benefits of almost $1 million.
Income from operations was $12.8 million compared to $18.4 million in the second
quarter last year and as a percent of sales was 10.0% in the second quarter of
2003 compared to 16.1% in the year-ago quarter. Contributing to this decrease in
income from operations was an increase in selling, general and administrative
expenses mainly attributable to the acquisitions of Royal Leerdam and Traex.
Earnings before interest and income taxes (EBIT) were $15.0 million compared to
$9.3 million in the year-ago quarter. The prior year period included $13.6
million of expenses related to an abandoned acquisition. Equity earnings from
Vitrocrisa (the company's 49% equity ownership in Crisa Industrial, L.L.C.,
Vitrocrisa Holding, S. de R.L. de C.V. and related Mexican companies) were $2.0
million on a pretax basis, compared to $4.5 million in the second quarter of
2002. The decline in equity earnings is primarily the result of the impact of a
weaker peso exchange rate on sales, lower sales activity and higher natural gas
costs than the prior year period. In the year ago period, equity earnings
benefited from a 10% decline in the Mexican peso creating a translation gain, as
compared to the second quarter of 2003, when the peso appreciated, resulting in
a translation loss.
Net income was $7.9 million, or 59 cents per diluted share, compared with net
income of $4.9 million, or 31 cents per diluted share, in the year-ago period.
Last year's net income included expenses associated with an abandoned
acquisition. These expenses total $13.6 million, less tax effect of $4.9
million, or an after tax impact of $8.7 million or 56 per diluted share, as
detailed in the following table, "Reconciliation of Non-GAAP Measures." Interest
expense increased $1.5 million as a result of an increase of debt to $236.0
million from $136.2 million in the year-ago period. Debt increased after funding
$62.0 million for the acquisitions of Traex and Royal Leerdam in late 2002 and
the repurchase of 2,435,600 shares for $65.7 million since the year-ago period.
The company's effective tax rate declined to 30.7% from 32.6% in the year-ago
period as the result of lower state and local taxes and lower taxes on equity
earnings.
19
RECONCILIATION OF NON-GAAP MEASURES
(dollars in thousands, except per-share amounts)
Three months ended June 30,
2003 2002
---- ----
Reported net income $ 7,910 $ 4,900
Expenses associated with abandoned acquisition -- 13,626
Less tax effect -- 4,905
- -------------------------------------------------------------------------------------------------------------
Net income excluding expenses associated with abandoned $ 7,910 $13,621
acquisition
=============================================================================================================
Basic earnings per share:
Reported net income $0.59 $0.32
Expenses associated with abandoned acquisition, net of
related tax effects -- 0.56
- -------------------------------------------------------------------------------------------------------------
Net income per share excluding expenses associated with $0.59 $0.88
abandoned acquisition
=============================================================================================================
Diluted earnings per share:
Reported net income $0.59 $0.31
Expenses associated with abandoned acquisition, net of
related tax effects -- 0.56
- -------------------------------------------------------------------------------------------------------------
Net income per diluted share excluding expenses associated $0.59 $0.87
with abandoned acquisition
=============================================================================================================
20
RESULTS OF OPERATIONS - SIX MONTHS 2003 COMPARED WITH SIX MONTHS 2002
Six months ended
June 30,
-----------------------------------------
(dollars in thousands)
----------------------
2003 2002
---- ----
Net Sales $240,157 $ 212,755
Gross profit 51,256 53,100
As a percent of sales 21.3% 25.0%
Income from operations $ 18,366 $ 27,020
As a percent of sales 7.6% 12.7%
Earnings before interest and income taxes $ 20,549 $ 17,404
As a percent of sales 8.6% 8.2%
Net income $ 9,911 $ 8,852
As a percent of sales 4.1% 4.2%
For the six months ended June 30, 2003, sales increased 12.9% to $240.2 million
from $212.8 million in the year-ago quarter. The increase in sales was
attributable to the sales of Royal Leerdam and Traex acquisitions. Excluding
these acquisitions, sales declined 4.4%, as sales declined in all channels of
distribution. Sales to customers located outside of the United States, increased
to $51.4 million from $22.2 million in the year-ago period. This is primarily
due to the acquisitions. Excluding Royal Leerdam and Traex sales, sales to
customers outside of the United States remained flat compared to the year-ago
period.
Gross profit (defined as net sales plus freight billed to customers less cost of
sales) was $51.3 million and as a percent of sales was 21.3% for the first six
months of 2003 compared to $53.1 million and as a percent of sales was 25.0%
compared to the first six months of 2002. Factors contributing to the decline,
in addition to lower sales excluding acquisitions, were higher natural gas costs
of $4.0 million (almost entirely the result of higher price) and additional
costs (mostly non-cash) for pension and postretirement medical benefits of
almost $2.1 million.
Income from operations was $18.4 million compared to $27.0 million in the first
six months of 2002 and as a percent of sales was 7.6% in the first six months of
2003 compared to 12.7% in the prior year period. Contributing to this decrease
in income from operations was an increase in selling, general and administrative
expenses of $6.7 million mainly attributable to the acquisitions of Royal
Leerdam and Traex.
Earnings before interest and income taxes (EBIT) were $20.5 million compared to
$17.4 million in the year-ago period. The prior period included $13.6 million of
expenses related to an abandoned acquisition.
21
Equity earnings from Vitrocrisa (the company's 49% equity ownership in Crisa
Industrial, L.L.C., Vitrocrisa Holding, S. de R.L. de C.V. and related Mexican
companies), were $1.8 million on a pretax basis, compared to $4.2 million in the
first six months of 2002. The decline in equity earnings is primarily the result
of the impact of a weaker peso exchange rate on sales, lower sales activity and
higher natural gas costs than the prior year period. In the year ago period,
equity earnings benefited from a decline in the Mexican peso creating a
translation gain, as compared to the first six months of 2003, when the peso
appreciated, resulting in a translation loss.
Net income was $9.9 million, or 71 cents per diluted share, compared with net
income of $8.9 million, or 57 cents per diluted share, in the year-ago period.
Last year's net income included expenses associated with an abandoned
acquisition. These expenses totaled $13.6 million, less a tax effect of $4.9
million, or an after tax impact of $8.7 million or 56 cents per diluted share,
as detailed in the following table, "Reconciliation of Non-GAAP Measures."
Interest expense was $2.2 million higher than the year-ago period primarily as a
result of increased debt after funding $62.0 million for the acquisitions of
Traex and Royal Leerdam in late 2002 and the repurchase of 2,435,600 shares for
$65.7 million since the year-ago period. The company's effective tax rate
declined to 31.2% in the first six months of 2003 compared to 34.1% in the
year-ago period as a result of lower state and local taxes and lower taxes on
equity earnings.
22
RECONCILIATION OF NON-GAAP MEASURES
(dollars in thousands, except per-share amounts)
Six months ended June 30,
2003 2002
---- ----
Reported net income $ 9,911 $ 8,852
Expenses associated with abandoned acquisition -- 13,626
Less tax effect -- 4,905
Net income excluding expenses associated with abandoned
acquisition $ 9,911 $17,573
==============================================================================================================
Basic earnings per share:
Reported net income $0.71 $0.58
Expenses associated with abandoned acquisition, net of
related tax effects -- 0.56
- --------------------------------------------------------------------------------------------------------------
Net income per share excluding expenses associated with $0.71 $1.14
abandoned acquisition
==============================================================================================================
Diluted earnings per share:
Reported net income $0.71 $0.57
Expenses associated with abandoned acquisition, net of
related tax effects -- 0.56
- -------------------------------------------------------------------------------------------------------------
Net income per diluted share excluding expenses associated $0.71 $1.13
with abandoned acquisition
=============================================================================================================
CAPITAL RESOURCES AND LIQUIDITY
The company had total debt of $236.0 million at June 30, 2003, compared to
$191.2 million at December 31, 2002. This increase in debt is attributable to
the repurchase of 1,500,000 shares for $38.9 million pursuant to the company's
modified Dutch Auction tender offer and seasonal increased working capital
requirements during the first six months of 2003. Since mid-1998, the company
has repurchased 5,125,000 shares for $140.7 million. Board authorization remains
at June 30, 2003 for the purchase of an additional 1,000,000 shares.
During the first six months of 2003, the company had capital expenditures of
$10.7 million compared to $8.2 million in the year-ago period. These
expenditures primarily relate to furnace and machine rebuild activity and
investments in higher productivity machinery and equipment. The company expects
to spend $25 to $30 million for capital expenditures for the year 2003.
The company had additional debt capacity at June 30, 2003, under the Revolving
Credit Agreement (Agreement) of $115.9 million. Of Libbey's total outstanding
indebtedness, $53.5 million was subject to fluctuating interest rates at June
30, 2003. A change of one percent in such rates
23
would have resulted in a change in interest expense of approximately $0.5
million on an annual basis as of June 30, 2003. The Agreement is for a term of
three years maturing April 23, 2005, with an option to extend for two additional
one-year periods. The company is not aware of any trends, demands, commitments,
or uncertainties that will result or that are reasonably likely to result in a
material change in Libbey's liquidity.
On March 31, 2003, the company completed the issuance of $100 million of
privately placed senior notes. Eighty million dollars of the notes have an
average interest rate of 4.65% with an initial average maturity of 8.4 years and
a remaining average maturity of 8.2 years. The additional $20 million has a
floating interest rate at a margin over the London Interbank Offer Rate (LIBOR).
The proceeds of the note issuance were used to retire debt outstanding under the
Revolving Credit Agreement. The company believes that its cash from operations
and available borrowings under the Revolving Credit Agreement, private placement
senior notes and other short-term lines of credit will be sufficient to fund its
operating requirements, capital expenditures, and all other obligations
(including debt service and dividends) throughout the remaining term of the
Revolving Credit Agreement.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The company is exposed to market risks due to changes in currency values,
although the majority of the company's revenues and expenses are denominated in
the U.S. dollar. The currency market risks include devaluations and other major
currency fluctuations relative to the U.S. dollar, euro or Mexican peso that
could reduce the cost competitiveness of the company's products or that of
Vitrocrisa's compared to foreign competition; the effect of high inflation in
Mexico and exchange rate changes to the value of the Mexican peso and impact of
those changes on the earnings and cash flow of Vitrocrisa, expressed under
accounting principles generally accepted in the United States.
The company is exposed to market risk associated with changes in interest rates
in the U.S. and has entered into Interest Rate Protection Agreements (Rate
Agreements) with respect to $100.0 million of debt as a means to manage its
exposure to fluctuating interest rates. The Rate Agreements effectively convert
this portion of the company's borrowings from variable rate debt to a fixed-rate
basis, thus reducing the impact of interest rate changes on future income. The
average fixed rate of interest for the company's borrowings related to the Rate
Agreements at June 30, 2003 is 5.8% and the total interest rate, including
applicable fees, is 7.6%. The average maturity of these Rate Agreements is 1.8
years at June 30, 2003. Total remaining debt not covered by the Rate Agreements
has fluctuating interest rates with a weighted average rate of 2.4% at June 30,
2003. The company had $53.5 million of total debt subject to fluctuating
interest rates at June 30, 2003. A change of one percent in such rates would
result in a change in interest expense of approximately $0.5 million on an
annual basis.
24
The interest rate differential to be received or paid under the Rate Agreements
is being recognized over the life of the Rate Agreements as an adjustment to
interest expense. If the counterparts to these Rate Agreements fail to perform,
the company would no longer be protected from interest rate fluctuations by
these Rate Agreements. However, the company does not anticipate nonperformance
by the counterparts.
The fair value of the company's Rate Agreements is determined using the market
standard methodology of netting the discounted expected future variable cash
receipts and the discounted future fixed cash payments. The variable cash
receipts are based on an expectation of future interest rates derived from
observed market interest rate forward curves. The company does not expect to
cancel these agreements and expects them to expire as originally contracted.
In addition to the Rate Agreements, the company has also entered into commodity
contracts to hedge the price of anticipated required purchases of natural gas.
The company has designated these derivative instruments as cash flow hedges. As
such, the changes in fair value of these derivative instruments are recorded in
accumulated other comprehensive income (loss) and reclassified into earnings as
the underlying hedged transaction or items affects earnings. At June 30, 2003,
approximately $5.1 million of unrealized net losses were recorded in accumulated
other comprehensive loss.
OTHER INFORMATION
This document and supporting schedules contains statements that are not
historical facts and constitute projections, forecasts or forward-looking
statements. Such statements only reflect the company's best assessment at this
time, and may be identified by the use of forward-looking words or phrases such
as "anticipate," "believe," "expect," "intend," "may," "planned," "potential,"
"should," "will," "would" or similar phrases. Such forward-looking statements
involve risks and uncertainty and actual results may differ materially from such
statements and undue reliance should not be placed on such statements. Important
factors potentially affecting the company's performance include, but are not
limited to:
- major slowdowns in the retail, travel, restaurant and bar or
entertainment industries, including the impact of armed hostilities or
any other international or national calamity, including any act of
terrorism, on the retail, travel, restaurant and bar or entertainment
industries;
- significant increases in interest rates that increase the company's
borrowing costs;
- significant increases in per-unit costs for natural gas, electricity,
corrugated packaging and other purchased materials;
- 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, euro or Mexican peso that could reduce the cost
25
competitiveness of the company's or Vitrocrisa'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 expressed under
accounting principles generally accepted in the United States and cash
flow of Vitrocrisa;
- the inability to achieve savings and profit improvements at targeted
levels at the company and Vitrocrisa from capacity realignment,
re-engineering and operational restructuring programs or within the
intended time periods;
- protracted work stoppages related to collective bargaining agreements;
- 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; - whether the company completes
any significant acquisitions and whether such acquisitions can operate
profitably.
ITEM 4. CONTROLS AND PROCEDURES
The company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the company's Securities
Exchange Act of 1934 (the "Exchange Act") reports is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that such information is accumulated
and communicated to the company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow for timely
decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. Also, we have investments in certain
unconsolidated entities. As we do not control or manage these entities, our
disclosure controls and procedures with respect to such entities are necessarily
substantially more limited than those we maintain with respect to our
consolidated subsidiaries.
As required by SEC Rule 13a-15(b), the company carried out an evaluation, under
the supervision and with the participation of the company's management,
including the company's Chief Executive Officer and the company's Chief
Financial Officer, of the effectiveness of the design and operation of the
company's disclosure controls and procedures as of the end of the quarter
covered by this report. Based on the foregoing, the company's Chief Executive
Officer and Chief Financial Officer concluded that the company's disclosure
controls and procedures were effective at the reasonable assurance level.
There has been no change in the company's internal controls over financial
reporting during the company's most recent fiscal quarter that has materially
affected, or is reasonable likely to materially affect, the company's internal
controls over financial reporting.
26
PART II - OTHER INFORMATION
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 1, 2003, at the annual meeting of stockholders, John F. Meier, Carol B.
Moerdyk and Gary L. Moreau were elected as members of Class I of the board of
directors for three-year terms expiring on the date of the 2006 annual meeting.
The results of the voting were:
Name For Withheld
---- --- --------
John F. Meier 10,484,615 210,747
Carol B. Moerdyk 10,299,177 396,185
Gary L. Moreau 10,296,671 398,691
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The exhibits listed in the accompanying "Exhibit Index" are
filed as part of this report.
(b) Reports on Form 8-K:
A report under Item 5 was filed dated April 14, 2003, with respect the
announcement of updated earnings expectations for the first quarter of
2003 and issuance of privately placed senior notes.
A report under Item 5 was filed dated April 22, 2003, with respect to
the announcement that members of the Company's executive management
team hold stock options in Libbey Inc. that will be expiring within
the next few months and, as a result, these executives will be
entering into plans to exercise these stock options and sell a portion
of their shares in Libbey Inc.
A report under Item 9 was filed dated April 24, 2003, announcing
financials results for the quarter ended March 31, 2003.
A report under Item 9 was filed dated May 1, 2003, announcing the
Company's outlook for 2003.
27
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
3.1 Restated Certificate of Incorporation of Libbey Inc. (filed as
Exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993 and incorporated herein by
reference).
3.2 Amended and Restated By-Laws of Libbey Inc. (filed as Exhibit
3.2 to Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993 and incorporated herein by
reference).
4.1 Restated Certificate of Incorporation of Libbey Inc.
(incorporated by reference herein as Exhibit 3.1).
4.2 Amended and Restated By-Laws of Libbey Inc. (incorporated by
reference herein as Exhibit 3.2).
4.3 Rights Agreement, dated January 5, 1995, between Libbey Inc. and
The Bank of New York, which includes the form of Certificate of
Designations of the Series A Junior Participating Preferred
Stock of Libbey Inc. as Exhibit A, the form of Right Certificate
as Exhibit B and the Summary of Rights to Purchase Preferred
Shares as Exhibit C, (filed as Exhibit 1 to Registrant's
Registration Statement on Form 8-A dated January 20, 1995 and
incorporated herein by reference).
4.4 First Amendment to Rights Agreement, dated February 3, 1999,
between Libbey Inc. and The Bank of New York (filed as Exhibit
4.4 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1998 and incorporated herein by reference).
10.65 Employment Agreement dated as of May 1, 2003 between Libbey Inc.
and Scott M. Sellick (filed herein).
10.66 Change in Control Agreement dated as of May 1, 2003 between
Libbey Inc. and Scott M. Sellick (filed herein).
31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) or Rule 15d-14(a) (filed herein).
28
31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a) or Rule 15d-14(a) (filed herein).
32.1 Chief Executive Officer Certification Pursuant To 18 U.S.C.
Section 1350, As Adopted Pursuant To Section 906 Of The
Sarbanes-Oxley Act of 2002 (filed herein).
32.2 Chief Financial Officer Certification Pursuant To 18 U.S.C.
Section 1350, As Adopted Pursuant To Section 906 Of The
Sarbanes-Oxley Act of 2002 (filed herein).
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LIBBEY INC.
Date August 12, 2003 By /s/ Scott M. Sellick
----------------------- -------------------------------------
Scott M. Sellick,
Vice President, Chief Financial Officer
(Principal Accounting Officer)
30