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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Libbey Inc | AMEX:LBY | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.7957 | 0 | 01:00:00 |
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
34-1559357
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
|
300 Madison Avenue, Toledo, Ohio 43604
|
|
(Address of principal executive offices) (Zip Code)
|
||
|
|
|
|
419-325-2100
|
|
(Registrant’s telephone number, including area code)
|
Large Accelerated Filer
|
o
|
|
|
Accelerated Filer
|
þ
|
|
Non-Accelerated Filer
|
o
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
o
|
|
|
|
|
|
Emerging growth company
|
o
|
|
|
|
Page
|
EX-31.1
|
|
EX-31.2
|
|
EX-32.1
|
|
EX-101 INSTANCE DOCUMENT
|
|
EX-101 SCHEMA DOCUMENT
|
|
EX-101 CALCULATION LINKBASE DOCUMENT
|
|
EX-101 LABELS LINKBASE DOCUMENT
|
|
EX-101 PRESENTATION LINKBASE DOCUMENT
|
|
EX-101 DEFINITION LINKBASE DOCUMENT
|
|
Item 1.
|
Financial Statements
|
|
Three months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Net sales
|
$
|
213,534
|
|
|
$
|
197,514
|
|
Freight billed to customers
|
938
|
|
|
747
|
|
||
Total revenues
|
214,472
|
|
|
198,261
|
|
||
Cost of sales
|
167,979
|
|
|
156,868
|
|
||
Gross profit
|
46,493
|
|
|
41,393
|
|
||
Selling, general and administrative expenses
|
33,537
|
|
|
34,083
|
|
||
Income from operations
|
12,956
|
|
|
7,310
|
|
||
Other income (expense)
|
2,580
|
|
|
(852
|
)
|
||
Earnings before interest and income taxes
|
15,536
|
|
|
6,458
|
|
||
Interest expense
|
5,456
|
|
|
5,138
|
|
||
Income before income taxes
|
10,080
|
|
|
1,320
|
|
||
Provision for income taxes
|
6,092
|
|
|
2,152
|
|
||
Net income (loss)
|
$
|
3,988
|
|
|
$
|
(832
|
)
|
|
|
|
|
||||
Net income (loss) per share:
|
|
|
|
||||
Basic
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
Diluted
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
Dividends declared per share
|
$
|
—
|
|
|
$
|
0.1175
|
|
|
|
|
|
||||
|
Six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Net sales
|
$
|
395,447
|
|
|
$
|
370,508
|
|
Freight billed to customers
|
1,695
|
|
|
1,423
|
|
||
Total revenues
|
397,142
|
|
|
371,931
|
|
||
Cost of sales
|
316,979
|
|
|
299,341
|
|
||
Gross profit
|
80,163
|
|
|
72,590
|
|
||
Selling, general and administrative expenses
|
65,060
|
|
|
67,415
|
|
||
Income from operations
|
15,103
|
|
|
5,175
|
|
||
Other income (expense)
|
473
|
|
|
(3,638
|
)
|
||
Earnings before interest and income taxes
|
15,576
|
|
|
1,537
|
|
||
Interest expense
|
10,540
|
|
|
10,005
|
|
||
Income (loss) before income taxes
|
5,036
|
|
|
(8,468
|
)
|
||
Provision (benefit) for income taxes
|
4,009
|
|
|
(1,066
|
)
|
||
Net income (loss)
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
|
|
|
|
||||
Net income (loss) per share:
|
|
|
|
||||
Basic
|
$
|
0.05
|
|
|
$
|
(0.34
|
)
|
Diluted
|
$
|
0.05
|
|
|
$
|
(0.34
|
)
|
Dividends declared per share
|
$
|
0.1175
|
|
|
$
|
0.2350
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
3,988
|
|
|
$
|
(832
|
)
|
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Pension and other post-retirement benefit adjustments, net of tax
|
|
2,879
|
|
|
2,994
|
|
|
3,634
|
|
|
3,450
|
|
||||
Change in fair value of derivative instruments, net of tax
|
|
472
|
|
|
(563
|
)
|
|
1,942
|
|
|
(398
|
)
|
||||
Foreign currency translation adjustments, net of tax
|
|
(7,392
|
)
|
|
5,589
|
|
|
(3,059
|
)
|
|
6,997
|
|
||||
Other comprehensive income (loss), net of tax
|
|
(4,041
|
)
|
|
8,020
|
|
|
2,517
|
|
|
10,049
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
|
$
|
(53
|
)
|
|
$
|
7,188
|
|
|
$
|
3,544
|
|
|
$
|
2,647
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,818
|
|
|
$
|
24,696
|
|
Accounts receivable — net
|
100,948
|
|
|
89,997
|
|
||
Inventories — net
|
200,818
|
|
|
187,886
|
|
||
Prepaid and other current assets
|
18,406
|
|
|
12,550
|
|
||
Total current assets
|
339,990
|
|
|
315,129
|
|
||
Pension asset
|
3,638
|
|
|
2,939
|
|
||
Purchased intangible assets — net
|
13,967
|
|
|
14,565
|
|
||
Goodwill
|
84,412
|
|
|
84,412
|
|
||
Deferred income taxes
|
24,585
|
|
|
24,892
|
|
||
Other assets
|
10,398
|
|
|
9,627
|
|
||
Property, plant and equipment — net
|
264,206
|
|
|
265,675
|
|
||
Total assets
|
$
|
741,196
|
|
|
$
|
717,239
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Accounts payable
|
$
|
80,686
|
|
|
$
|
78,346
|
|
Salaries and wages
|
23,515
|
|
|
27,409
|
|
||
Accrued liabilities
|
50,465
|
|
|
43,223
|
|
||
Accrued income taxes
|
3,976
|
|
|
1,862
|
|
||
Pension liability (current portion)
|
2,172
|
|
|
2,185
|
|
||
Non-pension post-retirement benefits (current portion)
|
4,178
|
|
|
4,185
|
|
||
Derivative liability
|
—
|
|
|
697
|
|
||
Long-term debt due within one year
|
6,085
|
|
|
7,485
|
|
||
Total current liabilities
|
171,077
|
|
|
165,392
|
|
||
Long-term debt
|
397,626
|
|
|
376,905
|
|
||
Pension liability
|
40,303
|
|
|
43,555
|
|
||
Non-pension post-retirement benefits
|
49,152
|
|
|
49,758
|
|
||
Deferred income taxes
|
1,802
|
|
|
1,850
|
|
||
Other long-term liabilities
|
12,114
|
|
|
12,885
|
|
||
Total liabilities
|
672,074
|
|
|
650,345
|
|
||
Contingencies (Note 14)
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock, par value $.01 per share, 50,000,000 shares authorized, 22,132,408 shares issued in 2018 (22,018,010 shares issued in 2017)
|
221
|
|
|
220
|
|
||
Capital in excess of par value
|
334,289
|
|
|
333,011
|
|
||
Retained deficit
|
(162,458
|
)
|
|
(161,165
|
)
|
||
Accumulated other comprehensive loss
|
(102,930
|
)
|
|
(105,172
|
)
|
||
Total shareholders’ equity
|
69,122
|
|
|
66,894
|
|
||
Total liabilities and shareholders’ equity
|
$
|
741,196
|
|
|
$
|
717,239
|
|
|
|
Common
Stock Shares |
|
Common
Stock Amount |
|
Capital in Excess of Par Value
|
|
Retained
Deficit |
|
Accumulated Other Comprehensive Loss
|
|
Total
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance December 31, 2017
|
|
22,018,010
|
|
|
$
|
220
|
|
|
$
|
333,011
|
|
|
$
|
(161,165
|
)
|
|
$
|
(105,172
|
)
|
|
$
|
66,894
|
|
Cumulative-effect adjustment for the adoption of ASU 2017-12
|
|
|
|
|
|
|
|
275
|
|
|
(275
|
)
|
|
—
|
|
||||||||
Net income
|
|
|
|
|
|
|
|
1,027
|
|
|
|
|
1,027
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
2,517
|
|
|
2,517
|
|
|||||||||
Stock compensation expense
|
|
|
|
|
|
1,401
|
|
|
|
|
|
|
1,401
|
|
|||||||||
Dividends
|
|
|
|
|
|
|
|
(2,595
|
)
|
|
|
|
(2,595
|
)
|
|||||||||
Stock withheld for employee taxes
|
|
|
|
|
|
(214
|
)
|
|
|
|
|
|
(214
|
)
|
|||||||||
Stock issued
|
|
114,398
|
|
|
1
|
|
|
91
|
|
|
|
|
|
|
92
|
|
|||||||
Balance June 30, 2018
|
|
22,132,408
|
|
|
$
|
221
|
|
|
$
|
334,289
|
|
|
$
|
(162,458
|
)
|
|
$
|
(102,930
|
)
|
|
$
|
69,122
|
|
|
Six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|||||
Depreciation and amortization
|
23,119
|
|
|
22,383
|
|
||
Loss on asset sales and disposals
|
232
|
|
|
54
|
|
||
Change in accounts receivable
|
(11,477
|
)
|
|
(2,538
|
)
|
||
Change in inventories
|
(13,956
|
)
|
|
(7,182
|
)
|
||
Change in accounts payable
|
919
|
|
|
(6,344
|
)
|
||
Accrued interest and amortization of discounts and finance fees
|
449
|
|
|
713
|
|
||
Pension & non-pension post-retirement benefits, net
|
176
|
|
|
2,982
|
|
||
Accrued liabilities & prepaid expenses
|
1,215
|
|
|
9,442
|
|
||
Income taxes
|
(1,698
|
)
|
|
(3,619
|
)
|
||
Share-based compensation expense
|
1,456
|
|
|
2,148
|
|
||
Other operating activities
|
(662
|
)
|
|
(728
|
)
|
||
Net cash provided by operating activities
|
800
|
|
|
9,909
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(21,349
|
)
|
|
(27,048
|
)
|
||
Net cash used in investing activities
|
(21,349
|
)
|
|
(27,048
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|
||
Borrowings on ABL credit facility
|
51,131
|
|
|
3,277
|
|
||
Repayments on ABL credit facility
|
(28,631
|
)
|
|
(3,277
|
)
|
||
Other repayments
|
(1,383
|
)
|
|
(169
|
)
|
||
Repayments on Term Loan B
|
(2,200
|
)
|
|
(12,200
|
)
|
||
Stock options exercised
|
—
|
|
|
466
|
|
||
Taxes paid on distribution of equity awards
|
(214
|
)
|
|
(601
|
)
|
||
Dividends
|
(2,595
|
)
|
|
(5,169
|
)
|
||
Other financing activities
|
—
|
|
|
888
|
|
||
Net cash provided by (used in) financing activities
|
16,108
|
|
|
(16,785
|
)
|
||
|
|
|
|
||||
Effect of exchange rate fluctuations on cash
|
(437
|
)
|
|
1,080
|
|
||
Decrease in cash
|
(4,878
|
)
|
|
(32,844
|
)
|
||
|
|
|
|
||||
Cash & cash equivalents at beginning of period
|
24,696
|
|
|
61,011
|
|
||
Cash & cash equivalents at end of period
|
$
|
19,818
|
|
|
$
|
28,167
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
9,766
|
|
|
$
|
9,155
|
|
Cash paid during the period for income taxes
|
$
|
3,584
|
|
|
$
|
2,011
|
|
1.
|
Description of the Business
|
2.
|
Significant Accounting Policies
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Stock-based compensation expense
|
|
$
|
1,166
|
|
|
$
|
1,316
|
|
|
$
|
1,456
|
|
|
$
|
2,148
|
|
|
|
Three months ended June 30, 2017
|
|
Six months ended June 30, 2017
|
||||||||||||||||||||
(dollars in thousands)
|
|
Previously Reported
|
|
Reclassification
|
|
As Revised
|
|
Previously Reported
|
|
Reclassification
|
|
As Revised
|
||||||||||||
Cost of sales
|
|
$
|
157,483
|
|
|
$
|
(615
|
)
|
|
$
|
156,868
|
|
|
$
|
300,839
|
|
|
$
|
(1,498
|
)
|
|
$
|
299,341
|
|
Selling, general and administrative expenses
|
|
33,676
|
|
|
407
|
|
|
34,083
|
|
|
66,651
|
|
|
764
|
|
|
67,415
|
|
||||||
Other income (expense)
|
|
(644
|
)
|
|
(208
|
)
|
|
(852
|
)
|
|
(2,904
|
)
|
|
(734
|
)
|
|
(3,638
|
)
|
3.
|
Balance Sheet Details
|
(dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Accounts receivable:
|
|
|
|
|
||||
Trade receivables
|
|
$
|
99,080
|
|
|
$
|
88,786
|
|
Other receivables
|
|
1,868
|
|
|
1,211
|
|
||
Total accounts receivable, less allowances of $6,987 and $9,051
|
|
$
|
100,948
|
|
|
$
|
89,997
|
|
|
|
|
|
|
||||
Inventories:
|
|
|
|
|
||||
Finished goods
|
|
$
|
183,560
|
|
|
$
|
170,774
|
|
Work in process
|
|
1,441
|
|
|
1,485
|
|
||
Raw materials
|
|
3,994
|
|
|
3,906
|
|
||
Repair parts
|
|
10,404
|
|
|
10,240
|
|
||
Operating supplies
|
|
1,419
|
|
|
1,481
|
|
||
Total inventories, less loss provisions of $10,120 and $10,308
|
|
$
|
200,818
|
|
|
$
|
187,886
|
|
|
|
|
|
|
||||
Accrued liabilities:
|
|
|
|
|
||||
Accrued incentives
|
|
$
|
25,075
|
|
|
$
|
19,728
|
|
Other accrued liabilities
|
|
25,390
|
|
|
23,495
|
|
||
Total accrued liabilities
|
|
$
|
50,465
|
|
|
$
|
43,223
|
|
4.
|
Borrowings
|
(dollars in thousands)
|
|
Interest Rate
|
|
Maturity Date
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Borrowings under ABL Facility
|
|
floating
|
(2)
|
December 7, 2022
(1)
|
|
$
|
22,500
|
|
|
$
|
—
|
|
Term Loan B
|
|
floating
|
(3)
|
April 9, 2021
|
|
382,400
|
|
|
384,600
|
|
||
AICEP Loan
|
|
0.00%
|
|
July 30, 2018
|
|
1,685
|
|
|
3,085
|
|
||
Total borrowings
|
|
|
|
|
|
406,585
|
|
|
387,685
|
|
||
Less — unamortized discount and finance fees
|
|
|
2,874
|
|
|
3,295
|
|
|||||
Total borrowings — net
|
|
|
|
|
|
403,711
|
|
|
384,390
|
|
||
Less — long term debt due within one year
|
|
|
|
6,085
|
|
|
7,485
|
|
||||
Total long-term portion of borrowings — net
|
|
|
$
|
397,626
|
|
|
$
|
376,905
|
|
(1)
|
Maturity date will be January 9, 2021, if Term Loan B is not refinanced by this date.
|
(2)
|
The interest rate for the ABL Facility is comprised of several different borrowings at various rates. The weighted average rate of all ABL Facility borrowings was
3.65 percent
at June 30, 2018.
|
(3)
|
We have entered into an interest rate swap that effectively fixes a series of our future interest payments on a portion of the Term Loan B debt. See interest rate swap in
note 8
for additional details. The Term Loan B floating interest rate was
5.05 percent
at June 30, 2018.
|
5.
|
Income Taxes
|
6.
|
Pension and Non-pension Post-retirement Benefits
|
Three months ended June 30,
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
1,025
|
|
|
$
|
883
|
|
|
$
|
284
|
|
|
$
|
277
|
|
|
$
|
1,309
|
|
|
$
|
1,160
|
|
Interest cost
|
|
3,142
|
|
|
3,442
|
|
|
741
|
|
|
701
|
|
|
3,883
|
|
|
4,143
|
|
||||||
Expected return on plan assets
|
|
(5,669
|
)
|
|
(5,623
|
)
|
|
—
|
|
|
—
|
|
|
(5,669
|
)
|
|
(5,623
|
)
|
||||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost (credit)
|
|
1
|
|
|
59
|
|
|
(50
|
)
|
|
(52
|
)
|
|
(49
|
)
|
|
7
|
|
||||||
Actuarial loss
|
|
1,599
|
|
|
1,265
|
|
|
154
|
|
|
152
|
|
|
1,753
|
|
|
1,417
|
|
||||||
Pension expense
|
|
$
|
98
|
|
|
$
|
26
|
|
|
$
|
1,129
|
|
|
$
|
1,078
|
|
|
$
|
1,227
|
|
|
$
|
1,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six months ended June 30,
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
2,004
|
|
|
$
|
1,958
|
|
|
$
|
576
|
|
|
$
|
528
|
|
|
$
|
2,580
|
|
|
$
|
2,486
|
|
Interest cost
|
|
6,307
|
|
|
6,892
|
|
|
1,504
|
|
|
1,338
|
|
|
7,811
|
|
|
8,230
|
|
||||||
Expected return on plan assets
|
|
(11,329
|
)
|
|
(11,240
|
)
|
|
—
|
|
|
—
|
|
|
(11,329
|
)
|
|
(11,240
|
)
|
||||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost (credit)
|
|
1
|
|
|
118
|
|
|
(101
|
)
|
|
(99
|
)
|
|
(100
|
)
|
|
19
|
|
||||||
Actuarial loss
|
|
3,236
|
|
|
2,617
|
|
|
313
|
|
|
290
|
|
|
3,549
|
|
|
2,907
|
|
||||||
Pension expense
|
|
$
|
219
|
|
|
$
|
345
|
|
|
$
|
2,292
|
|
|
$
|
2,057
|
|
|
$
|
2,511
|
|
|
$
|
2,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
151
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
151
|
|
|
$
|
96
|
|
Interest cost
|
|
455
|
|
|
471
|
|
|
10
|
|
|
11
|
|
|
465
|
|
|
482
|
|
||||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost (credit)
|
|
(70
|
)
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(51
|
)
|
||||||
Actuarial loss / (gain)
|
|
(53
|
)
|
|
(154
|
)
|
|
(17
|
)
|
|
(13
|
)
|
|
(70
|
)
|
|
(167
|
)
|
||||||
Non-pension post-retirement benefit expense
|
|
$
|
483
|
|
|
$
|
362
|
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
476
|
|
|
$
|
360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six months ended June 30,
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
302
|
|
|
$
|
316
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
$
|
316
|
|
Interest cost
|
|
911
|
|
|
1,052
|
|
|
20
|
|
|
22
|
|
|
931
|
|
|
1,074
|
|
||||||
Amortization of unrecognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost (credit)
|
|
(141
|
)
|
|
(101
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
(101
|
)
|
||||||
Actuarial loss / (gain)
|
|
(105
|
)
|
|
(129
|
)
|
|
(33
|
)
|
|
(26
|
)
|
|
(138
|
)
|
|
(155
|
)
|
||||||
Non-pension post-retirement benefit expense
|
|
$
|
967
|
|
|
$
|
1,138
|
|
|
$
|
(13
|
)
|
|
$
|
(4
|
)
|
|
$
|
954
|
|
|
$
|
1,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.
|
Net Income (Loss) per Share of Common Stock
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands, except earnings per share)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator for earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) that is available to common shareholders
|
|
$
|
3,988
|
|
|
$
|
(832
|
)
|
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
22,170,338
|
|
|
22,029,519
|
|
|
22,130,503
|
|
|
21,984,365
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Denominator for diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Effect of stock options and restricted stock units
|
|
185,550
|
|
|
—
|
|
|
36,584
|
|
|
—
|
|
||||
Adjusted weighted average shares and assumed conversions
|
|
22,355,888
|
|
|
22,029,519
|
|
|
22,167,087
|
|
|
21,984,365
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.34
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share
|
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.34
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Shares excluded from diluted earnings (loss) per share due to:
|
|
|
|
|
|
|
|
|||||||||
Net loss position (excluded from denominator)
|
|
—
|
|
|
60,141
|
|
|
—
|
|
|
111,791
|
|
||||
Inclusion would have been anti-dilutive (excluded from calculation)
|
|
752,375
|
|
|
924,652
|
|
|
982,386
|
|
|
744,317
|
|
8.
|
Derivatives
|
(dollars in thousands)
|
|
|
|
Fair Value of Derivative Assets
|
||||||
|
Balance Sheet Location
|
|
June 30, 2018
|
|
December 31, 2017
|
|||||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
Prepaid and other current assets
|
|
$
|
1,098
|
|
|
$
|
—
|
|
Interest rate swap
|
|
Other assets
|
|
1,171
|
|
|
646
|
|
||
Natural gas contracts
|
|
Prepaid and other current assets
|
|
90
|
|
|
—
|
|
||
Total designated
|
|
2,359
|
|
|
646
|
|
||||
Total derivative assets
|
|
$
|
2,359
|
|
|
$
|
646
|
|
||
|
|
|
|
|
|
|
||||
|
|
|
|
Fair Value of Derivative Liabilities
|
||||||
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
Derivative liability
|
|
$
|
—
|
|
|
$
|
213
|
|
Natural gas contracts
|
|
Derivative liability
|
|
—
|
|
|
220
|
|
||
Natural gas contracts
|
|
Other long-term liabilities
|
|
25
|
|
|
7
|
|
||
Total designated
|
|
25
|
|
|
440
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Natural gas contracts
|
|
Derivative liability
|
|
—
|
|
|
264
|
|
||
Natural gas contracts
|
|
Other long-term liabilities
|
|
—
|
|
|
12
|
|
||
Total undesignated
|
|
|
|
—
|
|
|
276
|
|
||
Total derivative liabilities
|
|
$
|
25
|
|
|
$
|
716
|
|
|
|
|
|
Notional Amounts
|
||||||
Derivative Types
|
|
Unit of Measure
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Natural gas contracts
|
|
Millions of British Thermal Units (MMBTUs)
|
|
2,740,000
|
|
|
2,480,000
|
|
||
Interest rate swap
|
|
Thousands of U.S. dollars
|
|
$
|
220,000
|
|
|
$
|
220,000
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Natural gas contracts
|
|
$
|
(36
|
)
|
|
$
|
182
|
|
|
$
|
(234
|
)
|
|
$
|
298
|
|
Interest rate swap
|
|
(3
|
)
|
|
(510
|
)
|
|
(181
|
)
|
|
(1,110
|
)
|
||||
Total
|
|
$
|
(39
|
)
|
|
$
|
(328
|
)
|
|
$
|
(415
|
)
|
|
$
|
(812
|
)
|
9.
|
Accumulated Other Comprehensive Income (Loss)
|
Three months ended June 30, 2018
(dollars in thousands) |
|
Foreign Currency Translation
|
|
Derivative Instruments
|
|
Pension and Other Post-retirement Benefits
|
|
Accumulated Other
Comprehensive Loss |
||||||||
Balance on March 31, 2018
|
|
$
|
(11,850
|
)
|
|
$
|
1,546
|
|
|
$
|
(88,585
|
)
|
|
$
|
(98,889
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized into AOCI
|
|
(7,392
|
)
|
|
603
|
|
|
1,527
|
|
|
(5,262
|
)
|
||||
Currency impact
|
|
—
|
|
|
—
|
|
|
524
|
|
|
524
|
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
(4
|
)
|
(1)
|
1,564
|
|
(2)
|
1,560
|
|
||||
Tax effect
|
|
—
|
|
|
(127
|
)
|
|
(736
|
)
|
|
(863
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
(7,392
|
)
|
|
472
|
|
|
2,879
|
|
|
(4,041
|
)
|
||||
Balance on June 30, 2018
|
|
$
|
(19,242
|
)
|
|
$
|
2,018
|
|
|
$
|
(85,706
|
)
|
|
$
|
(102,930
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2018
(dollars in thousands) |
|
Foreign Currency Translation
|
|
Derivative Instruments
|
|
Pension and Other Post-retirement Benefits
|
|
Accumulated Other
Comprehensive Loss |
||||||||
Balance on December 31, 2017
|
|
$
|
(16,183
|
)
|
|
$
|
351
|
|
|
$
|
(89,340
|
)
|
|
$
|
(105,172
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Cumulative-effect adjustment for the adoption of ASU 2017-12
|
|
—
|
|
|
(275
|
)
|
|
—
|
|
|
(275
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized into AOCI
|
|
(3,059
|
)
|
|
2,067
|
|
|
1,527
|
|
|
535
|
|
||||
Currency impact
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
337
|
|
(1)
|
3,170
|
|
(2)
|
3,507
|
|
||||
Tax effect
|
|
—
|
|
|
(462
|
)
|
|
(1,103
|
)
|
|
(1,565
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
(3,059
|
)
|
|
1,942
|
|
|
3,634
|
|
|
2,517
|
|
||||
Balance on June 30, 2018
|
|
$
|
(19,242
|
)
|
|
$
|
2,018
|
|
|
$
|
(85,706
|
)
|
|
$
|
(102,930
|
)
|
Three months ended June 30, 2017
(dollars in thousands) |
|
Foreign Currency Translation
|
|
Derivative Instruments
|
|
Pension and Other Post-retirement Benefits
|
|
Accumulated Other
Comprehensive Loss |
||||||||
Balance on March 31, 2017
|
|
$
|
(26,420
|
)
|
|
$
|
(350
|
)
|
|
$
|
(96,398
|
)
|
|
$
|
(123,168
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized into AOCI
|
|
5,589
|
|
|
(858
|
)
|
|
4,801
|
|
|
9,532
|
|
||||
Currency impact
|
|
—
|
|
|
—
|
|
|
(258
|
)
|
|
(258
|
)
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
382
|
|
(1)
|
1,206
|
|
(2)
|
1,588
|
|
||||
Tax effect
|
|
—
|
|
|
(87
|
)
|
|
(2,755
|
)
|
|
(2,842
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
5,589
|
|
|
(563
|
)
|
|
2,994
|
|
|
8,020
|
|
||||
Balance on June 30, 2017
|
|
$
|
(20,831
|
)
|
|
$
|
(913
|
)
|
|
$
|
(93,404
|
)
|
|
$
|
(115,148
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30, 2017
(dollars in thousands) |
|
Foreign Currency Translation
|
|
Derivative Instruments
|
|
Pension and Other Post-retirement Benefits
|
|
Accumulated Other
Comprehensive Loss |
||||||||
Balance on December 31, 2016
|
|
$
|
(27,828
|
)
|
|
$
|
(515
|
)
|
|
$
|
(96,854
|
)
|
|
$
|
(125,197
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized into AOCI
|
|
6,997
|
|
|
(1,124
|
)
|
|
4,801
|
|
|
10,674
|
|
||||
Currency impact
|
|
—
|
|
|
—
|
|
|
(738
|
)
|
|
(738
|
)
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
900
|
|
(1)
|
2,670
|
|
(2)
|
3,570
|
|
||||
Tax effect
|
|
—
|
|
|
(174
|
)
|
|
(3,283
|
)
|
|
(3,457
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
6,997
|
|
|
(398
|
)
|
|
3,450
|
|
|
10,049
|
|
||||
Balance on June 30, 2017
|
|
$
|
(20,831
|
)
|
|
$
|
(913
|
)
|
|
$
|
(93,404
|
)
|
|
$
|
(115,148
|
)
|
(1)
|
We reclassified natural gas contracts through cost of sales and the interest rate swap through interest expense on the Condensed Consolidated Statements of Operations. See
note 8
for additional information.
|
(2)
|
We reclassified the net pension and non-pension post-retirement benefits amortization and settlement charges through other income (expense) on the Condensed Consolidated Statements of Operations. See
note 6
for additional information.
|
10.
|
Segments
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canada
|
|
$
|
128,474
|
|
|
$
|
121,871
|
|
|
$
|
236,415
|
|
|
$
|
231,200
|
|
Latin America
|
|
40,290
|
|
|
36,503
|
|
|
74,623
|
|
|
67,225
|
|
||||
EMEA
|
|
38,175
|
|
|
31,054
|
|
|
70,423
|
|
|
56,385
|
|
||||
Other
|
|
6,595
|
|
|
8,086
|
|
|
13,986
|
|
|
15,698
|
|
||||
Consolidated
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment EBIT:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canada
|
|
$
|
13,358
|
|
|
$
|
15,045
|
|
|
$
|
18,082
|
|
|
$
|
22,546
|
|
Latin America
|
|
7,433
|
|
|
1,907
|
|
|
9,583
|
|
|
(1,172
|
)
|
||||
EMEA
|
|
2,621
|
|
|
(2,057
|
)
|
|
3,626
|
|
|
(2,894
|
)
|
||||
Other
|
|
660
|
|
|
(854
|
)
|
|
(469
|
)
|
|
(2,069
|
)
|
||||
Total Segment EBIT
|
|
$
|
24,072
|
|
|
$
|
14,041
|
|
|
$
|
30,822
|
|
|
$
|
16,411
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Segment EBIT to Net Income (Loss):
|
|
|
|
|
|
|
|
|
||||||||
Segment EBIT
|
|
$
|
24,072
|
|
|
$
|
14,041
|
|
|
$
|
30,822
|
|
|
$
|
16,411
|
|
Retained corporate costs
|
|
(8,536
|
)
|
|
(5,095
|
)
|
|
(15,246
|
)
|
|
(12,386
|
)
|
||||
Reorganization charges
|
|
—
|
|
|
(2,488
|
)
|
|
—
|
|
|
(2,488
|
)
|
||||
Interest expense
|
|
(5,456
|
)
|
|
(5,138
|
)
|
|
(10,540
|
)
|
|
(10,005
|
)
|
||||
(Provision) benefit for income taxes
|
|
(6,092
|
)
|
|
(2,152
|
)
|
|
(4,009
|
)
|
|
1,066
|
|
||||
Net income (loss)
|
|
$
|
3,988
|
|
|
$
|
(832
|
)
|
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation & Amortization:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canada
|
|
$
|
3,052
|
|
|
$
|
3,084
|
|
|
$
|
6,439
|
|
|
$
|
6,166
|
|
Latin America
|
|
4,494
|
|
|
4,510
|
|
|
9,204
|
|
|
8,907
|
|
||||
EMEA
|
|
1,940
|
|
|
1,848
|
|
|
3,949
|
|
|
3,692
|
|
||||
Other
|
|
1,309
|
|
|
1,329
|
|
|
2,623
|
|
|
2,683
|
|
||||
Corporate
|
|
445
|
|
|
457
|
|
|
904
|
|
|
935
|
|
||||
Consolidated
|
|
$
|
11,240
|
|
|
$
|
11,228
|
|
|
$
|
23,119
|
|
|
$
|
22,383
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital Expenditures:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canada
|
|
$
|
5,592
|
|
|
$
|
2,457
|
|
|
$
|
12,729
|
|
|
$
|
4,394
|
|
Latin America
|
|
2,778
|
|
|
4,482
|
|
|
5,167
|
|
|
11,464
|
|
||||
EMEA
|
|
1,449
|
|
|
7,633
|
|
|
2,743
|
|
|
10,396
|
|
||||
Other
|
|
142
|
|
|
255
|
|
|
262
|
|
|
468
|
|
||||
Corporate
|
|
117
|
|
|
269
|
|
|
448
|
|
|
326
|
|
||||
Consolidated
|
|
$
|
10,078
|
|
|
$
|
15,096
|
|
|
$
|
21,349
|
|
|
$
|
27,048
|
|
|
|
|
|
11.
|
Revenue
|
(dollars in thousands)
|
|
Three months ended June 30, 2018
|
|
Six months ended June 30, 2018
|
||||
Foodservice
|
|
$
|
93,194
|
|
|
$
|
169,367
|
|
Retail
|
|
61,670
|
|
|
117,431
|
|
||
Business-to-business
|
|
58,670
|
|
|
108,649
|
|
||
Consolidated
|
|
$
|
213,534
|
|
|
$
|
395,447
|
|
12.
|
Fair Value
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3 — Unobservable inputs based on our own assumptions.
|
|
|
Fair Value at
|
|
Fair Value at
|
||||||||||||||||||||||||||||
Asset / (Liability)
(dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||||||||
Commodity futures natural gas contracts
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
(503
|
)
|
|
$
|
—
|
|
|
$
|
(503
|
)
|
Interest rate swap
|
|
—
|
|
|
2,269
|
|
|
—
|
|
|
2,269
|
|
|
—
|
|
|
433
|
|
|
—
|
|
|
433
|
|
||||||||
Net derivative asset (liability)
|
|
$
|
—
|
|
|
$
|
2,334
|
|
|
$
|
—
|
|
|
$
|
2,334
|
|
|
$
|
—
|
|
|
$
|
(70
|
)
|
|
$
|
—
|
|
|
$
|
(70
|
)
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(dollars in thousands)
|
|
Fair Value
Hierarchy Level
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Term Loan B
|
|
Level 2
|
|
$
|
382,400
|
|
|
$
|
375,708
|
|
|
$
|
384,600
|
|
|
$
|
370,178
|
|
13.
|
Other Income (Expense)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gain (loss) on currency transactions
|
|
$
|
2,662
|
|
|
$
|
(691
|
)
|
|
$
|
1,012
|
|
|
$
|
(2,235
|
)
|
Gain (loss) on mark-to-market natural gas contracts
|
|
—
|
|
|
(236
|
)
|
|
—
|
|
|
(819
|
)
|
||||
Pension and non-pension benefits, excluding service cost
|
|
(243
|
)
|
|
(208
|
)
|
|
(583
|
)
|
|
(734
|
)
|
||||
Other non-operating income (expense)
|
|
161
|
|
|
283
|
|
|
44
|
|
|
150
|
|
||||
Other income (expense)
|
|
$
|
2,580
|
|
|
$
|
(852
|
)
|
|
$
|
473
|
|
|
$
|
(3,638
|
)
|
14.
|
Contingencies
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands, except percentages and per-share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
Gross profit
|
|
$
|
46,493
|
|
|
$
|
41,393
|
|
|
$
|
80,163
|
|
|
$
|
72,590
|
|
Gross profit margin
|
|
21.8
|
%
|
|
21.0
|
%
|
|
20.3
|
%
|
|
19.6
|
%
|
||||
Income from operations (IFO)
|
|
$
|
12,956
|
|
|
$
|
7,310
|
|
|
$
|
15,103
|
|
|
$
|
5,175
|
|
IFO margin
|
|
6.1
|
%
|
|
3.7
|
%
|
|
3.8
|
%
|
|
1.4
|
%
|
||||
Net income (loss)
|
|
$
|
3,988
|
|
|
$
|
(832
|
)
|
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
Net income (loss) margin
|
|
1.9
|
%
|
|
(0.4
|
)%
|
|
0.3
|
%
|
|
(2.0
|
)%
|
||||
Diluted net income (loss) per share
|
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.34
|
)
|
Adjusted earnings before interest, taxes, depreciation and amortization
(Adjusted EBITDA)
(1)
(non-GAAP)
|
|
$
|
26,776
|
|
|
$
|
20,174
|
|
|
$
|
38,695
|
|
|
$
|
26,408
|
|
Adjusted EBITDA margin
(1)
(non-GAAP)
|
|
12.5
|
%
|
|
10.2
|
%
|
|
9.8
|
%
|
|
7.1
|
%
|
(1)
|
We believe that Adjusted EBITDA and the associated margin, non-GAAP financial measures, are useful metrics for evaluating our financial performance, as they are measures that we use internally to assess our performance. For a reconciliation from net income (loss) to Adjusted EBITDA, certain limitations and reasons we believe these non-GAAP measures are useful, see the "Reconciliation of Net Income (Loss) to Adjusted EBITDA" and "Non-GAAP Measures" sections below in the Discussion of
Second
Quarter
2018
Compared to
Second
Quarter
2017
.
|
Three months ended June 30,
(dollars in thousands)
|
|
|
|
Increase/(Decrease)
|
|
Currency Effects
|
|
Constant Currency Sales Growth (Decline)
(1)
|
||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
|
|||||||||||||
U.S. & Canada
|
|
$
|
128,474
|
|
|
$
|
121,871
|
|
|
$
|
6,603
|
|
|
5.4
|
%
|
|
$
|
28
|
|
|
5.4
|
%
|
Latin America
|
|
40,290
|
|
|
36,503
|
|
|
3,787
|
|
|
10.4
|
%
|
|
(993
|
)
|
|
13.1
|
%
|
||||
EMEA
|
|
38,175
|
|
|
31,054
|
|
|
7,121
|
|
|
22.9
|
%
|
|
2,799
|
|
|
13.9
|
%
|
||||
Other
|
|
6,595
|
|
|
8,086
|
|
|
(1,491
|
)
|
|
(18.4
|
)%
|
|
417
|
|
|
(23.6
|
)%
|
||||
Consolidated
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
16,020
|
|
|
8.1
|
%
|
|
$
|
2,251
|
|
|
7.0
|
%
|
(1)
|
We believe constant currency sales growth (decline), a non-GAAP measure, is a useful metric for evaluating our financial performance. See the "Non-GAAP Measures" section below for the reasons we believe this non-GAAP metric is useful and how it is derived.
|
Three months ended June 30,
(dollars in thousands)
|
|
|
|
|
|
Segment EBIT Margin
|
||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
2018
|
|
2017
|
|||||||||
U.S. & Canada
|
|
$
|
13,358
|
|
|
$
|
15,045
|
|
|
$
|
(1,687
|
)
|
|
10.4
|
%
|
|
12.3
|
%
|
Latin America
|
|
$
|
7,433
|
|
|
$
|
1,907
|
|
|
$
|
5,526
|
|
|
18.4
|
%
|
|
5.2
|
%
|
EMEA
|
|
$
|
2,621
|
|
|
$
|
(2,057
|
)
|
|
$
|
4,678
|
|
|
6.9
|
%
|
|
(6.6
|
)%
|
(1)
|
Segment EBIT represents earnings before interest and taxes and excludes amounts related to certain items we consider not representative of ongoing operations as well as certain retained corporate costs and other allocations that are not considered by management when evaluating performance. Segment EBIT also includes an allocation of manufacturing costs for inventory produced at a Libbey facility that is located in a region other than the end market in which the inventory is sold. This allocation can fluctuate from year to year based on the relative demands for products produced in regions other than the end markets in which they are sold. See note 10 to the Condensed Consolidated Financial Statements for a reconciliation of Segment EBIT to net income (loss).
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss) (U.S. GAAP)
|
|
$
|
3,988
|
|
|
$
|
(832
|
)
|
|
$
|
1,027
|
|
|
$
|
(7,402
|
)
|
Add:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
5,456
|
|
|
5,138
|
|
|
10,540
|
|
|
10,005
|
|
||||
Provision (benefit) for income taxes
|
|
6,092
|
|
|
2,152
|
|
|
4,009
|
|
|
(1,066
|
)
|
||||
Depreciation and amortization
|
|
11,240
|
|
|
11,228
|
|
|
23,119
|
|
|
22,383
|
|
||||
Add: Special items before interest and taxes:
|
|
|
|
|
|
|
|
|
||||||||
Reorganization charges
|
|
—
|
|
|
2,488
|
|
|
—
|
|
|
2,488
|
|
||||
Adjusted EBITDA (non-GAAP)
|
|
$
|
26,776
|
|
|
$
|
20,174
|
|
|
$
|
38,695
|
|
|
$
|
26,408
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
213,534
|
|
|
$
|
197,514
|
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
Net income (loss) margin (U.S. GAAP)
|
|
1.9
|
%
|
|
(0.4
|
)%
|
|
0.3
|
%
|
|
(2.0
|
)%
|
||||
Adjusted EBITDA margin (non-GAAP)
|
|
12.5
|
%
|
|
10.2
|
%
|
|
9.8
|
%
|
|
7.1
|
%
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
|
•
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements of capital expenditures or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
|
•
|
Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
|
Six months ended June 30,
|
|
|
|
Increase/(Decrease)
|
|
Currency Effects
|
|
Constant Currency Sales Growth (Decline)
(1)
|
||||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
|
||||||||||||
U.S. & Canada
|
|
$
|
236,415
|
|
|
$
|
231,200
|
|
|
$
|
5,215
|
|
|
2.3
|
%
|
|
$
|
71
|
|
|
2.2
|
%
|
Latin America
|
|
74,623
|
|
|
67,225
|
|
|
7,398
|
|
|
11.0
|
%
|
|
1,114
|
|
|
9.3
|
%
|
||||
EMEA
|
|
70,423
|
|
|
56,385
|
|
|
14,038
|
|
|
24.9
|
%
|
|
6,914
|
|
|
12.6
|
%
|
||||
Other
|
|
13,986
|
|
|
15,698
|
|
|
(1,712
|
)
|
|
(10.9
|
)%
|
|
935
|
|
|
(16.9
|
)%
|
||||
Consolidated
|
|
$
|
395,447
|
|
|
$
|
370,508
|
|
|
$
|
24,939
|
|
|
6.7
|
%
|
|
$
|
9,034
|
|
|
4.3
|
%
|
(1)
|
We believe constant currency sales growth (decline), a non-GAAP measure, is a useful metric for evaluating our financial performance. See the "Non-GAAP Measures" section above for the reasons we believe this non-GAAP metric is useful and how it is derived.
|
Six months ended June 30, 2018
|
|
|
|
|
|
Segment EBIT Margin
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
$ Change
|
|
2018
|
|
2017
|
||||||||
U.S. & Canada
|
|
$
|
18,082
|
|
|
$
|
22,546
|
|
|
$
|
(4,464
|
)
|
|
7.6
|
%
|
|
9.8
|
%
|
Latin America
|
|
$
|
9,583
|
|
|
$
|
(1,172
|
)
|
|
$
|
10,755
|
|
|
12.8
|
%
|
|
(1.7
|
)%
|
EMEA
|
|
$
|
3,626
|
|
|
$
|
(2,894
|
)
|
|
$
|
6,520
|
|
|
5.1
|
%
|
|
(5.1
|
)%
|
(1)
|
Segment EBIT represents earnings before interest and taxes and excludes amounts related to certain items we consider not representative of ongoing operations as well as certain retained corporate costs and other allocations that are not considered by management when evaluating performance. Segment EBIT also includes an allocation of manufacturing costs for inventory produced at a Libbey facility that is located in a region other than the end market in which the inventory is sold. This allocation can fluctuate from year to year based on the relative demands for products produced in regions other than the end markets in which they are sold. See note 10 to the Condensed Consolidated Financial Statements for a reconciliation of Segment EBIT to net income (loss).
|
|
|
|
|
|
(dollars in thousands, except percentages and DSO, DIO, DPO and DWC)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Accounts receivable — net
|
|
$
|
100,948
|
|
|
$
|
89,997
|
|
DSO
(1)
|
|
45.7
|
|
|
42.0
|
|
||
Inventories — net
|
|
$
|
200,818
|
|
|
$
|
187,886
|
|
DIO
(2)
|
|
90.9
|
|
|
87.7
|
|
||
Accounts payable
|
|
$
|
80,686
|
|
|
$
|
78,346
|
|
DPO
(3)
|
|
36.5
|
|
|
36.6
|
|
||
Trade Working Capital
(4)
(non-GAAP)
|
|
$
|
221,080
|
|
|
$
|
199,537
|
|
DWC
(5)
|
|
100.0
|
|
|
93.2
|
|
||
Percentage of net sales
|
|
27.4
|
%
|
|
25.5
|
%
|
(1)
|
Days sales outstanding (DSO) measures the number of days it takes to turn receivables into cash.
|
(2)
|
Days inventory outstanding (DIO) measures the number of days it takes to turn inventory into net sales.
|
(3)
|
Days payable outstanding (DPO) measures the number of days it takes to pay the balances of our accounts payable.
|
(4)
|
Trade Working Capital is defined as net accounts receivable plus net inventories less accounts payable. See below for further discussion as to the reasons we believe this non-GAAP financial measure is useful.
|
(5)
|
Days working capital (DWC) measures the number of days it takes to turn our Trade Working Capital into cash.
|
(dollars in thousands)
|
|
Interest Rate
|
|
Maturity Date
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Borrowings under ABL Facility
|
|
floating
|
(2)
|
December 7, 2022
(1)
|
|
$
|
22,500
|
|
|
$
|
—
|
|
Term Loan B
|
|
floating
|
(3)
|
April 9, 2021
|
|
382,400
|
|
|
384,600
|
|
||
AICEP Loan
|
|
0.00%
|
|
July 30, 2018
|
|
1,685
|
|
|
3,085
|
|
||
Total borrowings
|
|
|
|
|
|
406,585
|
|
|
387,685
|
|
||
Less — unamortized discount and finance fees
|
|
|
2,874
|
|
|
3,295
|
|
|||||
Total borrowings — net
(4)
|
|
|
|
|
|
$
|
403,711
|
|
|
$
|
384,390
|
|
(1)
|
Maturity date will be January 9, 2021, if Term Loan B is not refinanced by this date.
|
(2)
|
The interest rate for the ABL Facility is comprised of several different borrowings at various rates. The weighted average rate of all ABL Facility borrowings was
3.65 percent
at June 30, 2018.
|
(3)
|
See “Derivatives” below and
note 8
to the Condensed Consolidated Financial Statements.
|
(4)
|
Total borrowings
—
net includes long-term debt due within one year and long-term debt as stated in our Condensed Consolidated Balance Sheets.
|
|
|
Six months ended June 30,
|
||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
|
$
|
800
|
|
|
$
|
9,909
|
|
Net cash used in investing activities
|
|
$
|
(21,349
|
)
|
|
$
|
(27,048
|
)
|
Net cash provided by (used in) financing activities
|
|
$
|
16,108
|
|
|
$
|
(16,785
|
)
|
|
|
Six months ended June 30,
|
||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
|
$
|
800
|
|
|
$
|
9,909
|
|
Net cash used in investing activities
|
|
(21,349
|
)
|
|
(27,048
|
)
|
||
Free Cash Flow
(1)
(non-GAAP)
|
|
$
|
(20,549
|
)
|
|
$
|
(17,139
|
)
|
(1)
|
We define Free Cash Flow as the sum of net cash provided by (used in) operating activities and net cash used in investing activities. The most directly comparable U.S. GAAP financial measure is net cash provided by (used in) operating activities.
|
Item 3.
|
Qualitative and Quantitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
April 1 to April 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
941,250
|
|
May 1 to May 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
941,250
|
|
June 1 to June 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
941,250
|
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
941,250
|
|
Item 6.
|
Exhibits
|
EXHIBIT INDEX
|
||
S-K Item
601 No.
|
|
Document
|
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
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
Libbey Inc.
|
|
|
|
|
|
|
|
Date:
|
August 1, 2018
|
by:
|
/s/ James C. Burmeister
|
|
|
|
|
James C. Burmeister
|
|
|
|
|
Senior Vice President, Chief Financial Officer
|
|
1 Year Libbey Chart |
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