EXHIBIT 99.1
(LIBBEY(R) LOGO) LIBBEY INC.
300 MADISON AVE
P.O. BOX 10060
TOLEDO, OH 43699
NEWS RELEASE
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
KENNETH BOERGER LISA FORTUNA
VP/TREASURER ANALYST INQUIRIES
(419) 325-2279 (312) 640-6779
FOR IMMEDIATE RELEASE
MONDAY, APRIL 3, 2006
LIBBEY INC. ANNOUNCES SIGNING OF DEFINITIVE
AGREEMENT TO ACQUIRE EQUITY INTEREST OF VITRO, S.A.
DE C.V. IN VITROCRISA JOINT VENTURE
Acquiring remaining 51 percent of largest glass tableware company in
Mexico, takes ownership to 100 percent. Positions Libbey as the
world's second largest glass tableware producer; enables integration
and synergies.
TOLEDO, OHIO, APRIL 3, 2006--LIBBEY INC. (NYSE: LBY) announced today it has
entered into a definitive agreement to acquire from Vitro, S.A. de C.V. (Vitro)
its 51 percent of Vitrocrisa Holdings, S de R.L. de C.V. and related companies
(Crisa), bringing Libbey's ownership of Crisa to 100 percent. The purchase price
for Vitro's equity is $80 million in cash. Crisa's 2005 sales were approximately
$192 million. Bear, Stearns & Co. Inc. has served as Libbey's exclusive
financial advisor on this transaction.
Crisa, the largest glass tableware manufacturer in Mexico and Latin America,
manufactures and markets a wide variety of glass tableware. In addition, Crisa
is a leading supplier of glass coffee pots and blender jars. The acquisition is
consistent with Libbey's growth strategy to be a supplier of high-quality,
machine-made glass tableware products to key markets worldwide while continuing
to optimize its cost structure. It will further allow Libbey to use its
proprietary technology and processes to enhance Crisa's capabilities enabling
the closer integration of the two companies.
In conjunction with the acquisition of Crisa, Libbey will refinance Crisa's debt
of approximately $65 million as well as its own existing debt. The refinancing
plan is expected to include an asset-based revolver and senior unsecured notes.
This structure is
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expected to provide the flexibility needed for Libbey to execute the integration
of Crisa, including related capital expenditures, and pursue its other strategic
initiatives.
Commenting on the acquisition, John Meier, chairman and chief executive officer,
said, "We believe that moving beyond the existing joint venture structure will
facilitate progress on many fronts. Opportunities for an improved cost
structure, expanded product offering and faster sales growth by leveraging the
capabilities of both companies are available. We very much look forward to
working more closely with Crisa and its associates in improving our
profitability and growth opportunities."
Libbey also announced that it expects to benefit from a number of synergies and
cost savings associated with owning 100 percent of Crisa. These savings are
estimated to result in substantial increases in Libbey's earnings before
interest and taxes (EBIT) on an annual basis and include, but are not limited
to:
- The elimination of profit sharing payments under an existing
distribution agreement with Vitro that historically ranged from $4 to
$5 million annually.
- The reduction of pension expense and cash payments related to the
elimination of the retiree portion of the existing Crisa pension
obligation, which will be transferred to Vitro.
- Reduction of ongoing lease costs related to assets previously leased
by Crisa and owned by Vitro, which will be transferred to Crisa as
part of the transaction.
- Reduced costs for administrative services previously provided by
Vitro.
- Rationalization of Crisa manufacturing processes. In connection with
its rationalization plan, Libbey will incur certain one-time charges,
which will be predominately non-cash.
The resulting projections for the Libbey and Crisa combined businesses in 2007
include sales in excess of $800 million and EBIT of $55 to $65 million.
Depreciation and amortization are expected to be approximately $40 million,
resulting in estimated earnings before interest, taxes, depreciation and
amortization (EBITDA) of $95 to $105 million in 2007.
The closing of the acquisition is subject to customary conditions, including
successful completion of the financing, receipt by Vitro of the approval of its
stockholders and regulatory approval by the Mexican Competition and Foreign
Investment commissions. Closing is expected to occur in the second quarter of
2006.
WEBCAST INFORMATION
Libbey will hold a conference call for investors on Monday, April 3, 2006, at 5
p.m. Eastern Daylight Time. The conference call will be simulcast live on the
Internet on www.libbey.com. To listen to the call, please go to the website at
least 10 minutes early to register, download and install any necessary software.
A replay will be available for 7 days after the conclusion of the call.
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This press release includes forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995, including statements regarding (i) the
sales and EBITDA projections for the Company and Crisa combined businesses in
2007; (ii) the anticipated successful consummation of the Crisa acquisition and
refinancing plan as described herein; (iii) the Company's expectations regarding
transition, integration and severance costs, as well as the amount and timing of
anticipated synergies; and (iv) the Company's expectations that it will
refinance its existing debt using a new asset based revolver and issuance of
senior unsecured notes. 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. These
forward-looking statements may be affected by the risks and uncertainties in the
Company's business. This information is qualified in its entirety by cautionary
statements and risk factor disclosures contained in the Company's Securities and
Exchange Commission filings, including the Company's report on Form 10-K filed
with the Commission on March 16, 2006. Important factors potentially affecting
performance include but are not limited to: increased competition from foreign
suppliers endeavoring to sell glass tableware in the United States and Mexico,
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 expense associated with higher medical costs, increased
pension expense associated with lower returns on pension investments and
increased pension obligations; devaluations and other major currency
fluctuations relative to the U.S. dollar and the Euro that could reduce the cost
competitiveness of the Company's products compared to foreign competition; the
effect of high inflation in Mexico and exchange rate changes to the value of the
Mexican peso and the earnings and cash flow of 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. With respect to its expectations regarding the Crisa
acquisition, these factors also include the ability and willingness of each
party to fulfill their respective closing conditions, the ability to
successfully integrate the operations of Crisa and recognize the expected
synergies and the ability of Vitro to supply necessary services to Crisa, and
our ability to capitalize on the expanded platform that the acquisition of Crisa
will provide. With respect to the Company's intent to refinance its existing
debt with an asset based revolver and the issuance of senior unsecured notes,
these factors will include the ability and timing of the Company to complete all
of the steps necessary to enter into the asset based revolver and issue the
senior unsecured notes and the ability of the Company to obtain commercially
reasonable financing terms in the senior debt market.
Libbey Inc.:
- - is a leading producer of glass tableware in North America;
- - is expanding its international presence with facilities in the Netherlands
and Portugal and a facility in China that is expected to begin production
in 2007;
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- - is a leading producer of tabletop products for the foodservice industry;
- - exports to more than 90 countries.
Based in Toledo, Ohio, the Company operates glass tableware manufacturing plants
in the United States in Louisiana, and Ohio, in Portugal and in the Netherlands.
Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the
world leaders in producing and selling glass stemware to retail, foodservice and
industrial clients. Its Crisal subsidiary, located in Portugal, provides an
expanded presence in Europe. 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. In 2005, Libbey
Inc.'s net sales totaled $568.1 million.
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