2. 2
Joe Huhn
Vice President, FP&A and Investor Relations
⢠23 years Corporate Finance Experience
⢠4 years at Libbey, 3 years as Group CFO, USC
⢠Finance Director for 8 years at Whirlpool
Jim Burmeister
Senior Vice President, Chief Financial Officer
⢠VP, Finance & Treasurer, The Andersonâs, Inc.
⢠VP, Finance, Owens Corning
⢠GE Corporate Audit Staff
⢠Captain in the Marine Corps
Management
3. 3
Material provided in this presentation includes forward-looking statements about Libbey Inc. These statements
are subject to risks and uncertainties, including market conditions, competitive pressures, the value of the U.S.
dollar and potential significant cost increases. Please refer to the Companyâs Form 10-K for fiscal year-end
December 31, 2017, filed on March 1, 2018 for further information.
This presentation includes financial information of which the Companyâs independent auditors have not
completed their review. Although the Company believes that the assumptions upon which the financial
information and its forward looking statements are based are reasonable, it can give no assurances that these
assumptions will prove to be accurate.
This presentation also contains non-GAAP financial measures. We believe that the Adjusted Earnings Before
Interest Taxes Depreciation and Amortization, or Adjusted EBITDA; Adjusted EBITDA margin; Trade Working
Capital; Debt, net of cash to Adjusted EBITDA; ROIC and references to sales in constant currency are
meaningful measures for investors to compare our results from period to period.
Reconciliations of the non-GAAP to GAAP measures may be found in the Appendix of this presentation as well
as in the previously filed earnings press releases.
Safe Harbor Statement
6. Our manufacturing and supply chain platform
allows us to reach customers across the globe
CORPORATE OVERVIEW
6
7. Latin America
18%
EMEA
16%
Other
4%
U.S. & Canada
62%
2017 Net Sales
by Segment
2017 Net Sales
by Channel
2017 Segment
EBIT
Retail
32%
B2B
26%
Foodservice
42%
Latin America
13%
EMEA
3%
U.S. & Canada
92%
Other
(8%)
Our business model is designed to serve
customers in three distinct channels
CORPORATE OVERVIEW
7
8. Globally, Libbey competes in four categories of
products
~87% OF SALES
Tumblers, stemware, mugs, bowls, floral, salt shakers, shot
glasses, canisters, candleholders
~13% OF SALES
Bakeware, handmade tableware, blender jars, mixing bowls, floral, and
candles
Plates, bowls, platters, cups, saucers, and other tableware
accessories
Knives, forks, spoons, serving utensils, serving
trays, pitchers, other metal tableware accessories
CORPORATE OVERVIEW
8
9. Libbey has a strong portfolio of brands
CORPORATE OVERVIEW
9
10. 10
⢠A network of over 400 of the
worldâs finest distributors who
ultimately sell to hotels,
restaurants, bars, etc.
⢠#1 supplier of glass tableware, #2
supplier of dinnerware/flatware in
the US and Canada(1)
⢠90% of sales are replacements
driving predictable revenue stream
We serve a broad global customer base that spans three
differentiated channels
⢠Primary customers include
leading mass merchants as
well as specialty, grocery,
value-oriented and e-tail stores
⢠The leading supplier of casual
glass beverageware in North
America(1)
⢠Strong brand recognition
⢠Important driver of factory
utilization
⢠Customers include marketers that
decorate Libbey glassware and
resell to breweries, distilleries, soft
drink companies, craft industries
and food packing companies
⢠Products include candle and floral
applications, blender jars, mixing
bowls, and washing machine
windows
⢠Volume supports scale and
typically has higher inventory
turns and lower SG&A
FOODSERVICE
NET SALES $328M
RETAIL
NET SALES $249M
BUSINESS-TO-BUSINESS
NET SALES $204M
CORPORATE OVERVIEW
(1)- Management Estimates
(2)- 2017 Reported Net Sales
(2) (2) (2)
11. ⢠Market leader recognized for
excellence by leading foodservice
distributors
⢠Extensive product line and steady
pace of innovation has enabled U.S.
price increases in 43 of last 47 years
⢠Strong foodservice network and in-
house salesforce selling to
established restaurants, hospitality
and tourism along with other
categories
⢠âAnnuity likeâ revenue stream with a
strong âinstalled baseâ of customers
reordering based on table setting
placements
⢠Best in class service
Foodservice channel: 2017 net sales of $328M
CRISTALERIA DEL ANGEL-
Equipment & Supply
CRISTALERIA MONACO-
Equipment & Supply
EDWARD DON &
COMPANY-
Equipment & Supply
JOHN ARTIS-
UK Equipment & Supply
SYSCO-
Broad Line
TRIMARK-
Equipment & Supply
US FOODS-
Broad Line
WASSERSTROM-
Equipment & Supply
WEBSTAURANT-
Web-based distribution
CORPORATE OVERVIEW: FOODSERVICE
WE SELL TO THE LARGEST CUSTOMERS IN THE
FOODSERVICE INDUSTRIES:
11
14. ⢠U.S. casual glass beverageware
leader; market share in brick and
mortar estimated at ~35%âŚmore than
twice the next competitor(1)
⢠Highly recognized brands and
leading private label supplier
⢠New E-commerce capabilities
position the company for continued
leadership; ~400 SKUs online
⢠Extensive branded product lines
including bakeware and serveware
⢠Established retail relationships
provide a platform to launch
innovative products that meet
consumer wants and needs
Retail channel: 2017 net sales of $249M
STRONG RELATIONSHIPS WITH MAJOR RETAILERS:
AMAZON
BED BATH &
BEYOND
CRATE & BARREL
DOLLAR TREE
IKEA
METRO
SORIANA
TARGET
TESCO
WALMART
WAYFAIR
(1) NPD and Management Estimates
CORPORATE OVERVIEW: RETAIL
14
15. Recognized brands in each served market and new
E-commerce capabilities
CORPORATE OVERVIEW: RETAIL
15
16. ⢠The business-to-business channel
offers diverse opportunities for
growth
⢠Established global supplier of
decorated glassware for promotions
⢠OEM supplier to leading appliance
manufacturers
⢠Growing in houseware applications:
decorated beverageware and glass
components for candles and floral
applications
Business-to-business channel: 2017 net sales of $204M
ESTABLISHED GROUP OF B2B CUSTOMERS:
BATH & BODY
WORKS
DIAGEO
HEINEKEN
NEWELL
STAR SOAP &
CANDLE
SUNBEAM
SYNDICATE
SALES INC.
WHIRLPOOL
CORPORATE OVERVIEW: B2B
16
22. In 2016 we implemented efforts to build a new
product pipeline to drive profitable growth
22
U.S. and Canada launched 647
products in 2017
U.S. and Canada region has a
strong pipeline for next 3 years
⢠$175M pipeline through 2020
⢠26 projects underway
⢠456 products launched in
2018
Sales from new products are offsetting losses from
declining markets and providing growth
NEW PRODUCT DEVELOPMENT
Driving Revenue
& Margin Growth
in recent quarters
23. 23
To drive transparency on financial benefits we launched an impact
metric to measure the progress of our new products
Each quarter, we report what percentage of our sales within the period
are driven by products launched in the previous 36 months
⢠It takes between 12 and 18 months to achieve placement and see growth
⢠E-commerce accelerates the curve
⢠Provides an opportunity to improve gross margins
⢠This revenue is not 100% incremental; however, it is necessary to maintain the
health of our revenue stream, enter new markets, and offset traffic declines
⢠Incorporated into executive compensation metrics
A steady pipeline of new products sustains the health of our portfolio
NEW PRODUCT DEVELOPMENT
24. 24
USC is realizing benefits of new product introductions
with expected lift from 2017 and 2018 launches
It takes 12-18 months to see meaningful benefits
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
First Half 2017 Second Half
2017
2018 Est 2019 Est 2020 Est
USC New Product Revenue
⢠First Half â17 â Lack of NPD in 2015 and
2016, declining sales
⢠Second Half â17 â Began to see benefits
of launches including Red Lobster
⢠2018 â Healthy level of NPD is expected
to offset market declines
⢠2019/20 â Full-year benefit from launches
is expected to help drive growth
($ in millions)
NEW PRODUCT DEVELOPMENT
25. 25
Long-term goal is to have new products represent 8-9%
of annual global net sales
⢠It generally takes 12-18 months to reach
run rateâŚ2017 launches are gaining
momentum
⢠NPD is offsetting market declines and
providing growth in our planning
⢠Global process expansion is underway
7.0%
7.2%
7.4%
7.6%
7.8%
8.0%
8.2%
8.4%
8.6%
2018 Est. 2019 Est. 2020 Est.
Global New Products % Net Sales
New products are essential for sustainable margins and growth
NEW PRODUCT DEVELOPMENT
27. 27
0
100
200
300
400
500
2014 2020 2030 2040 2050 2060
275 278 285 306 310 319
46 56 74
82 88 98
65+
Up to 64
The business of aging is becoming big
business âŚ
⢠10,000 people a day are turning 65(1)
⢠By 2030, over 20% of the population will be
65+ years of age(2)
⢠Baby Boomers* have 70 percent of the
nationâs disposable income and stand to
inherit $15 trillion over the next 20 years(3)
⢠Financially, the goal is for seniors to remain
independent and receive the least amount of
support needed for as long as possible
*born between 1946-1964
Sources:
(1) - U.S. Census Bureau
(2) - Senior Housing News
(3) - MetLife/Boston College Center for Retirement Research
65+ population more than 50% growth
in 16 years to 74 million
2014 2020 2030 2040 2050 2060
14.5% 16.8% 20.6% 21.7% 22.1% 23.6%
% of 65+ is Growing in the U.S.
Population by Age in
the United States
$ in millions
NEW PRODUCT DEVELOPMENT: HEALTHCARE
28. 28
Libbey is well positioned for the rapidly growing
$65M market
⢠Move to hospitality-oriented venues is a shift away
from institutional presentations to Libbeyâs sweet
spotâŚfully integrated tabletop solutions
⢠Thereâs no tabletop brand leader, often multiple
vendors are involved in purchase process â Libbey is
a âone stopâ tabletop provider, already known for
glass tableware leadership
⢠Libbeyâs hospitality expertise and reputation are
welcomed by this customer base
⢠Curated product includes: Constellation⢠dinnerware
with MicrobanÂŽ technology and specialized,
consultative sales approach
Estimated Healthcare Tabletop Industry
Shipments*
+35-50%
Expected growth, the fastest growing non-commercial
foodservice segment
$65
$80
$97
$120
$0
$50
$100
$150
Low End High End
2018 2030*by manufacturerâs cost (in millions)
NEW PRODUCT DEVELOPMENT: HEALTHCARE
Note: MicrobanÂŽ is a registered trademark of MicrobanÂŽ Products Company.
29. 29
Dedicated product offerings are a perfect fit for the
Healthcare market
Comfort Bowl
⢠Easy to grip due to raised rim
⢠Discreet banded edged; helps diner scoop food easily
Donna Senior Cup and Saucer
⢠Wider cup handles for easier grip
⢠Color target saucer assisting people with reduced vision
⢠Low well in saucer helps protect against tipping
Constellation⢠Dinnerware
⢠Exclusive MicrobanŽ Technology1
Ergonomic Flatware
⢠Knob handle for those with arthritis and limited dexterity
⢠Shapes facilitate easier scooping and cutting function
Infinium⢠Beverageware
⢠Non-glass, lightweight with a textured body for added grip
NEW PRODUCT DEVELOPMENT: HEALTHCARE
1 â ConstellationTM is the first-ever porcelain dinnerware with MicrobanÂŽ technology, which helps to minimize bacterial growth that
contributes to the presence of stains and lingering odors; applies only to bacteria that can cause stains, odors, and product degradation
31. 31
Investment is beginning to pay off
ďź Bringing new products to market faster⌠at improved price
pointsâŚenhancing overall product and margin mix
ďź E-commerce sales are increasing as a percentage of total
Example: U.S. retail salesâŚwe expect to go from 9% in 2017 to >20% by 2021
ďź Investments supporting sales in existing brick and mortar
outlets
E-COMMERCE
Omni-Channel approach is beneficial to our customers
32. 32
Building on success and learnings
ďź Expansion of E-commerce into new global regions
⢠EMEA 2018
⢠Latin America, Asia Pacific 2019 - 2020
ďź Broader benefits of digitizing inside the business to streamline
processes and reduce operating costs
ďź Leveraging processes and technology for other sales channels
Expanding Capabilities to Drive Profitable Growth
E-COMMERCE
35. 35
Current State
OPERATIONAL EXCELLENCE
Significant improvements made over the last 12 months to improve our
Global Manufacturing Network driving improved ROIC(1)
⢠We have reduced capacity on processes in the United States where we were undersold
and are using the available glass on processes that are sold out
⢠We have improved utilization in China by serving affiliate needs
⢠We have improved our commercial margin profile in Latin America and are adding
new capabilities to support market needs
⢠We have invested in numerous projects to improve safety, quality, delivery and cost
(1) - see Appendix for definition of non-GAAP measure.
37. 37
Why Libbey? Investment Thesis
Global Tabletop
Leader
â˘Global leader in design,
production and sale of tabletop
products
â˘Strong leadership with
experience that is aligned to the
strategy
â˘Leading brands and market share
â˘Licensing agreements and
partnerships
â˘Low cost production with broad
distribution
Positioned for
Profitable Growth
â˘Best in class service to highly
diversified customer base
â˘Healthy pipeline of new products
and entering new business
segments
â˘Growing E-commerce business
⢠Global Manufacturing Network
that is aligned to the marketplace
and strategy to improve ROIC(1)
â˘ERP will simplify go to market,
improve productivity and enable
new technology
Improving Balance
Sheet
â˘Positioned to increase Free Cash
Flow(1) and continue to
deleverage the balance sheet
â˘Capital allocation prioritizes
strategic investments and debt
reduction over returning capital
to shareholders
⢠ABL extended
â˘Ability to flex spending as
needed
â˘Opportunity to improve Trade
Working Capital(1)
(1) - see Appendix for definition of non-GAAP measure.
38. 38
Continuous improvement; return to long-term financial
goals by 2021
Goal 2017 Actual 2018 Est.(1) 2021 Est.(1)
Revenue growth 2% to 5% $782
(1.5%)
$790 â $805
1%-3%
$840 - $900
4 â year CAGR ~2-3%
Adjusted EBITDA
margins(2) 14% to 16% 9.0% 10% - 11%
~14% - 15%
$118 - $135
Net debt to
Adjusted EBITDA(2) 2.0x to 3.0x 5.1x 3.5x â 4.0x 2.3x - 2.7x
ROIC(2) Maintain 11%
to 13%
4.0% 6% - 7% 10% - 12%
Capital
Expenditures
$45 - $55 $48 $50-$55 $45 - $55
(1) - These projections are based on the Companyâs organic business targets and do not reflect the potential impacts of any merger, acquisition, divestiture or other corporate restructuring activity
(2) â See Appendix for non-GAAP definitions and reconciliations to nearest U.S. GAAP measure
$ in millions
FINANCIAL OVERVIEW
39. 39
Meaningful liquidity and a history of reducing
debt levels
⢠Reducing Debt on Balance Sheet
⢠Outstanding debt at its lowest levels
since 2006
⢠Repaid over $55 million in debt over
the last 3 years in order to strengthen
balance sheet
⢠Meaningful liquidity
⢠Since 2015, total liquidity(1) has been
maintained over $100 million at the
end of each year
(1) â Cash on hand plus open ABL availability
$466
$413
$445 $437
$412
$388
300
350
400
450
500
2012 2013 2014 2015 2016 2017
Gross Debt by Year
$136
$113
$142 $140 $149
$117
0
50
100
150
200
2012 2013 2014 2015 2016 2017
Total Liquidity by Year
Millions ($)
Millions ($)
FINANCIAL OVERVIEW
40. 40
Interest expense remains stable as debt
reduction and swap provide protection
⢠Term Loan B
⢠LIBOR plus 300 bps (currently
5.1%)
⢠Maturity 2021
⢠No financial covenants
⢠$150MM accordion option
⢠$100MM ABL Credit Facility
⢠LIBOR plus 150-200 bps
⢠Maturity 2022
Capital Structure
⢠Interest Rate Swap
⢠Providing interest protection in a rising
rate environment
⢠$220MM Fixed at 4.8575%
⢠Maturity 2020
$23
$18
$21 $20
0.00
0.50
1.00
1.50
2.00
0
5
10
15
20
25
30
2014 2015 2016 2017
Interest Expense vs. Federal Funds Rate
Millions ($) Fed Funds Rate %
FINANCIAL OVERVIEW
41. 41
Libbeyâs strategy delivers significant cash flow and priorities remain:
make strategic investments and reduce debt over the long term
Column1
Strategic
Investments
Maintain
Financial
Strength
Cash from
Operations(1)
2018 â 2021
$200 - $300 (MM) Investments to profitably
grow the Company
Repayment of debt will
continue to be a focus of the
Company over the long term
FINANCIAL OVERVIEW
(1) - These projections are based on the Companyâs organic business targets and do not reflect the potential impacts
of any merger, acquisition, divestiture or other corporate restructuring activity
43. 43
2018 Second-quarter Highlights
ď§ New products drove approximately $13.3MM of
sales, or 6.2% of net sales
ď§ E-commerce platform sales represented
approximately 12.6% of total U.S. & Canada
retail sales
ď§ U.S. & Canada foodservice continues to
outperform the market in 2018; YTD volume
and sales growth versus declining traffic of
(2.4%)1 in the first half of 2018
ď§ Latin America and EMEA improved profitability
for fourth consecutive quarter
4
(1) - Source: Black Box
(2) - See our second quarter 2018 press release filed on form 8-K on July 31, 2018, for reconciliations of Adjusted EBITDA to the most directly
comparable U.S. GAAP measure.
($ in millions)
Second
Quarter 2018
Net Sales
Y-O-Y Change
Y-O-Y Constant Currency
$213.5
8.1 %
7.0%
Adjusted EBITDA2
Y-O-Y Change
$26.8
32.7 %
44. 44
Foodservice Introduced 250+ Products
at NRA in Q2 2018
ď§ Introductions included
dinnerware collections, premium
flatware, elegant and versatile
serveware and a new take on
classic glassware
ď§ Featured insights-driven
solutions that add a dramatically
different look to the tabletop
Second Quarter 2018 Results
45. 45
Glassware to Support Premium Beverage
Trend
ď§ Masterâs ReserveÂŽ line
extensions focus on
presentation of premium
cocktails and craft beer to
grow foodservice end-user
profitability
ď§ Libbey, Spiegelau &
Nachtmann expand core
product offerings with new
vintage designs for
premium cocktails
Libbeyâs Masterâs ReserveÂŽ Contempo
Collection Recognized by FSR Magazine
Second Quarter 2018 Results
46. 46
Libbey Introduced its Finest Flatware Yet
ď§ The Master's Gauge⢠18/10 collection sets a new standard of style and
substance.
ď§ The collection combines modern beauty and durability with an impressive
selection of finishes, textures and unique profiles.
Second Quarter 2018 Results
47. 47
Libbey Showcased its Worry-free
Serveware
ď§ Introduced melamine,
premium plastic and
aluminum tableware
additions
ď§ Products that provide
an elevated dining
experience to patios,
rooftops and any other
settings
Second Quarter 2018 Results
48. 48
Second-quarter Progress in E-commerce
ď§ 60 products launched online in
Q2; another 68 expected in 2018
ď§ 12.6% of U.S. & Canada retail
sales
ď§ Opened our 3rd Prime Certified
3PL in Millington, Tennessee
ď§ Accelerating new products to
market and driving additional
brick-and-mortar placements
Second Quarter 2018 Results
49. 49
Key Financial Data
Second-quarter â18 & â17
(1) See the Appendix for reconciliations and definitions of non-GAAP measures.
Second Quarter 2018 Results
Unaudited
$ in millions, except per share data '18 '17 VPY '18 '17 VPY
Net sales 213.5$ 197.5$ 16.0$ 395.4$ 370.5$ 24.9$
Gross profit 46.5$ 41.4$ 5.1$ 80.2$ 72.6$ 7.6$
Gross profit margin 21.8% 21.0% 0.8% 20.3% 19.6% 0.7%
Selling, general & administrative expenses 33.5$ 34.1$ (0.6)$ 65.1$ 67.4$ (2.3)$
Net income (loss) 4.0$ (0.8)$ 4.8$ 1.0$ (7.4)$ 8.4$
Net income (loss) margin 1.9% (0.4%) 2.3% 0.3% (2.0%) 2.3%
Diluted EPS 0.18$ (0.04)$ 0.22$ 0.05$ (0.34)$ 0.39$
Adjusted EBITDA (1)
(non-GAAP) 26.8$ 20.2$ 6.6$ 38.7$ 26.4$ 12.3$
Adjusted EBITDA margin
(1)
(non-GAAP) 12.5% 10.2% 2.3% 9.8% 7.1% 2.7%
Unaudited
$ in millions, except ratio
June 30,
2018
December
31, 2017
June 30,
2017
Trade Working Capital
(1)
(non-GAAP) 221.1$ 199.5$ 202.4$
Debt, net of cash to Adjusted EBITDA ratio (1)
(non-GAAP) 4.7 x 5.1 x 5.0 x
Second Quarter Year-to-Date
50. Q2 2018 Net Sales of $213.5 vs. $197.5 in Q2 2017
$ in millions
OtherEMEA
Latin America
$8.1
$6.6
($1.5)
$0
$10
$20
$30
Q2 '17 Net Sales Sales Decline Q2 '18 Net Sales
$31.1
$38.2
$2.9
$1.5
$2.7
$20
$25
$30
$35
$40
$45
Q2 '17 Net
Sales
Retail Foodservice B2B Q2 '18 Net
Sales
$36.5
$40.3
$0.6 ($0.0)
$3.2
$30
$35
$40
$45
Q2 '17 Net
Sales
Retail Foodservice B2B Q2 '18 Net
Sales
$121.9
$128.5
$2.0
$0.9
$3.7
$115
$120
$125
$130
Q2 '17 Net
Sales
Retail Foodservice B2B Q2 '18 Net
Sales
U.S. & Canada
50
Second Quarter 2018 Results
51. YTD 2018 Net Sales of $395.4 vs. $370.5 in YTD 2017
$ in millions
U.S. & Canada
OtherEMEA
Latin America
$15.7 $14.0($1.7)
$10
$15
$20
$25
$30
Q2 '17 YTD Net Sales Sales Decline Q2 '18 YTD Net Sales
$56.4
$70.4
$5.4
$3.2
$5.4
$50
$55
$60
$65
$70
$75
Q2 '17 YTD
Net Sales
Retail Foodservice B2B Q2 '18 YTD
Net Sales
$67.2
$74.6
$2.9 $0.6
$3.9
$60
$65
$70
$75
$80
Q2 '17 YTD
Net Sales
Retail Foodservice B2B Q2 '18 YTD
Net Sales
$231.2
$236.4
$0.6
$1.5
$3.1
$225
$230
$235
$240
Q2 '17 YTD
Net Sales
Retail Foodservice B2B Q2 '18 YTD
Net Sales
51
Second Quarter 2018 Results
52. Adjusted EBITDA(1) Walk
$ in millions
(1) - See the Appendix for a reconciliation of Adjusted EBITDA to net income (loss).
$20.2
$26.8
$11.6
$2.9
($0.4)
($6.3)
($1.2)
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Prior Year Impact of Sales/ FCM Currency Manufacturing Activity Benefits Other Adjusted EBITDA
Q2'18 QTD Adjusted EBITDA vs. Prior Year $MM
$26.4
$38.7$10.6
$5.3 ($5.9)
($0.9) $3.2
$22.0
$27.0
$32.0
$37.0
$42.0
Prior Year Impact of Sales/ FCM Currency Manufacturing Activity Benefits Other Adjusted EBITDA
Q2 '18 YTD Adjusted EBITDA vs. Prior Year $MM
Downtime:
($2.5)MM
Downtime: ($4.6)MM
Reduced E-commerce
Spend $2.8MM
52
Second Quarter 2018 Results
54. Definition and reconciliation of non-GAAP measures
54
Q2 2018 Q2 2017 FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011 FY 2010
Net income (loss) (U.S. GAAP) 4.0$ (0.8)$ (93.4)$ 10.1$ 66.3$ 5.0$ 28.5$ 7.0$ 23.6$ 70.1$
Add:
Interest expense 5.5$ 5.1$ 20.4$ 20.9$ 18.5$ 22.9$ 32.0$ 37.7$ 43.4$ 45.2$
Provision (benefit) for income taxes 6.1 2.2 15.8 17.7 (38.2) 8.5 13.2 5.7 1.7 11.6
Depreciation and amortization 11.2 11.2 45.5 48.5 42.7 40.4 44.0 41.5 42.2 41.1
Add: Special items before interest and taxes:
Restructuring and facility closure charges - - - - - 1.0 6.5 - (0.1) 2.5
Severance - - - - - - - 5.1 1.1 -
Pension curtailment and settlement charges - - - 0.2 21.7 0.8 2.3 4.3 - -
Loss (gain) on redemption of debt - - - - - 47.2 2.5 31.1 2.8 (58.3)
Abandoned property - - - - - - 1.8 - 2.7 -
Gain on sale of assets - - - - - - - - (6.8) -
Goodwill and intangible impairment charges - - 79.7 - - - - - - -
Product portfolio optimization - - - 5.7 - - - - - -
Other (1)
- 2.5 2.5 8.5 5.3 (3.5) 5.1 - 2.5 2.8
Less: Accelerated depreciation expense included in special items
and also in depreciation and amortization above - - - - - - (1.5) - - -
Adjusted EBITDA (non-GAAP) 26.8$ 20.2$ 70.6$ 111.6$ 116.3$ 122.1$ 134.4$ 132.4$ 113.1$ 115.0$
119.2$
Net sales 213.5$ 197.5$ 781.8$ 793.4$ 822.3$ 852.5$ 818.8$ 825.3$ 817.1$ 799.8$
Net income (loss) margin (U.S. GAAP) 1.9% -0.4% (11.9%) 1.3% 8.1% 0.6% 3.5% 0.8% 2.9% 8.8%
Adjusted EBITDA Margin (non-GAAP) 12.6% 10.2% 9.0% 14.1% 14.1% 14.3% 16.4% 16.0% 13.8% 14.4%
Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) and Adjusted EBITDA Margin
(Dollars in millions)
(1) Q2 2017 includes $2.5 million for reorganization charges. 2017 includes $2.5 million for reorganization charges. 2016 includes $4.1 million for work stoppage and $4.4 million for executive terminations.
2015 includes $4.2 million for reorganization charges, $0.9 million for executive termination, and $0.2 million for an environmental obligation. 2014 includes $(4.7) million for furnace malfunction net proceeds,
$0.9 million for executive retirement charges, and $0.3 million for an environmental obligation. 2013 includes $4.4 million of furnace malfunction charges and $0.7 million for executive retirement charges. 2011
includes $2.7 million for CEO transition expenses, $(1.0) million for an equipment credit and an $0.8 million write-down of unutilized fixed assets. 2010 includes $2.7 million of fixed asset write-down charges,
$1.0 million in expenses related to a secondary stock offering and a $(0.9) million insurance claim recovery. 2008 includes a $4.5 million fixed asset write-down charge.
Adjusted EBITDA excludes special items that Libbey believes are not reflective of our core operating performance.
55. Definition and reconciliation of non-GAAP measures
55
LTM Q2
2018
LTM Q2
2017 FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011 FY 2010
Adjusted EBITDA
(1)
(non-GAAP) 82.8$ 74.6$ 70.6$ 111.6$ 116.3$ 122.1$ 134.4$ 132.4$ 113.1$ 115.0$
Debt reported on balance sheet(2)
(U.S. GAAP) 403.7$ 396.4$ 384.4$ 407.8$ 431.0$ 437.9$ 402.4$ 454.2$ 390.1$ 436.6$
Plus: Unamortized discount, finance fees and warrants (2)
2.9 3.8 3.3 4.5 5.8 7.0 9.5 12.3 11.6 16.9
Less: Carrying value in excess of principal on PIK notes - - - - - - - - - -
Less: Carrying value adjustment on debt related to the Interest
Rate Agreement - - - - - - (1.3) 0.4 4.1 3.3
Gross Debt 406.6 400.2 387.7 412.3 436.9 444.9 413.2 466.1 397.6 450.2
Less: Cash and cash equivalents 19.8 28.2 24.7 61.0 49.0 60.0 42.2 67.2 58.3 76.3
Debt net of cash 386.8$ 372.1$ 363.0$ 351.3$ 387.9$ 384.9$ 371.0$ 398.9$ 339.3$ 373.9$
Debt net of cash to Adjusted EBITDA Ratio (non-GAAP) 4.7 5.0 5.1 3.1 3.3 3.2 2.8 3.0 3.0 3.3
Computation of Adjusted EBITDA to Debt net of cash to Adjusted EBITDA Ratio and Adjusted EBITDA
(Dollars in millions)
(1) - See prior page for calculation and reconciliation to net income.
(2) - All years reflect retrospective adoption of ASU 2015-03 and 2015-15, which presents debt issuance costs of senior debt as a reduction to the liability.
56. FY 2017
Reported income from operations (53.7)$
Add: Adjustments
Goodwill Impairment 79.7$
Reorganization/ Restructuring Charges 2.5
Adjusted income from operations 28.5
Factor to apply taxes 65%
After tax adjusted income from operations 18.5$
Reported property, plant and equipment, net 265.7$
Accounts receivable 90.0
Inventories 187.9
Less: Accounts payable 78.3
Reported Trade Working Capital 199.5$
Total Invested Capital 465.2$
ROIC 4.0%
Calculation of Return on Invested Capital (ROIC)
(dollars in millions)
Definition and reconciliation of non-GAAP measures
Definitions â Other Non-GAAP Measures
Trade Working Capital is defined as net accounts receivable plus net inventory less
accounts payable.
Return On Invested Capital (ROIC) is defined as after tax income from operations
(using a 35% tax rate), adjusted for special items, over ending Trade Working
Capital plus net book value of property, plant and equipment
Constant currency references regarding net sales reflect a simple mathematical
translation of local currency results using the comparable prior periodâs currency
conversion rate. Constant currency references regarding Segment EBIT, Adjusted
EBITDA and Adjusted EBITDA Margin comprise a simple mathematical translation
of local currency results using the comparable prior periodâs currency conversion
rate plus the transactional impact of changes in exchange rates from revenues,
expenses and assets and liabilities that are denominated in a currency other than
the functional currency. Our currency market risks include currency fluctuations
relative to the U.S. dollar, Canadian dollar, Mexican peso, euro and RMB.
Free Cash Flow is defined as net cash provided by operating activities plus net
cash provided by (used in) investing activities.
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58. This presentation is being shared by Libbey Inc. (the âCompanyâ) for informational purposes only and is not, and may not be relied on in any manner as, legal, tax, investment,
accounting or other advice. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation (Reform Act of 1995, that involve a number of risks and uncertainties. These statements relate to future events, the Companyâs
future financial performance with respect to the Companyâs financial condition, results of operations, business plans and strategies, operating efficiencies or synergies, competitive
positions, growth opportunities for existing products, plans and objectives of the Companyâs management, capital expenditures and other matters. These statements involve known
and unknown risks, significant uncertainties and other factors (many of which are beyond the control of the Company) that may cause the Company or the Companyâs industryâs
actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as âmayâ, âwill,â âcould,â âwould,â âshould,â âexpect,â âplan,â âanticipate,â âintend,â âbelieve,â âestimate,â âpredict,â
âpotential,â âpro forma,â âseekâ or âcontinueâ or the negative of those terms or other comparable terminology. These statements are only predictions and actual results may differ
from predictions and such differences may be material. Any forward-looking statements that we make in this presentation speak only as of the date this presentation is given, and
we undertake no obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of
future performance, unless expressed as such, and should only be viewed as historical data.
Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not
guarantees of future performance and that our actual results of operations, financial condition, liquidity, prospects, growth, strategies, position in the market and the development
of the industry in which we operate may differ materially from those described in or suggested by the forward-looking statements contained in this presentation. In addition, even if
our results of operations, financial condition, liquidity, prospects, growth, strategies, position in the market and the development of the industry in which we operate are consistent
with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods. Given
these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements.
The Company advises you that in the normal course of its business it evaluates potential strategic opportunities that may be available from time to time, including acquisitions,
dispositions, mergers, private equity financings and other corporate transactions. The Companyâs evaluation of such opportunities may involve discussions and negotiations with
interested parties concerning the proposed terms and conditions of a potential transaction. As a matter of policy, the Company does not comment on such matters unless
negotiations with interested parties have advanced to the point where they would be material to a reasonable investor and the Company is legally obligated to disclose such
negotiations.
This presentation and todayâs prepared remarks contain non-GAAP financial measures. We believe that the Adjusted Earnings Before Interest Taxes Depreciation and Amortization,
or Adjusted EBITDA; Adjusted EBITDA margin; Trade Working Capital; Debt, net of cash to Adjusted EBITDA; and references to sales in constant currency are meaningful measures for
investors to compare our results from period to period. Reconciliations of the non-GAAP to GAAP measures may be found in the Appendix of this presentation as well as in the
earnings press release and the supplemental financials.
This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other industry data.
These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the
statistical and other industry data generated by independent parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. In
addition, projections, assumptions and estimates of its future performance and the future performance of the industries in which it operates are necessarily subject to a high degree
of uncertainty and risk due to a variety of factors.
58