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Published: Thursday, 4/25/2013 - Updated: 1 year ago

Libbey, now leaner, triples profits in 1st Q

Sales down in U.S., Canada; up in Mexico, Latin America

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Cobalt Blue stemware made by Libbey Glass.
Cobalt Blue stemware made by Libbey Glass.
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Libbey Inc. didn’t sell quite as much of its glassware in the year’s first three months as it did over the same period last year. Even so, the company made three times as much money.

That’s proof, the company’s chief executive officer said Thursday, that her plan to make Libbey leaner and more profitable is working.

“I think what you’ll see by the results is that Libbey 2015 is delivering what we said it would,” Stephanie Streeter said on a conference call with investors and media.

The Toledo-based company earned $2 million in the year’s first quarter on sales of $183 million. In 2012, Libbey said it earned $641,000 during the first quarter on sales of $188 million. On a per-share basis, Libbey earned 9 cents in the quarter, versus 3 cents per share last year.

Libbey Inc. CEO Stephanie Streeter says the difficult reorganiza-tion decisions made under her 2012 strategic plan are paying off. Libbey Inc. CEO Stephanie Streeter says the difficult reorganiza-tion decisions made under her 2012 strategic plan are paying off.
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The results were just short of analysts’ expectations of 10 cents per share. Still, investors cheered the results by pushing shares of the company’s stock up more than 7.5 percent in midday trading. Shares closed up 2.5 percent at $18.79.

Ms. Streeter said she was pleased with Libbey’s overall first-quarter performance, and said the real story of the year’s first quarter was the company’s success in cost reduction.

Under Ms. Streeter’s strategic plan unveiled last July, Libbey reorganized leadership into three regions and cut about 9 percent of Libbey’s worldwide management and administrative work force.

“We are very pleased with our overall results for the quarter,” she said. “We executed well, and the difficult decisions we made in 2012 to take out costs are clearly paying off. We’re building a track record of success improving our cost structure, focusing on productivity improvements, leveraging our advantaged businesses, and strengthening our balance sheet. We believe that this solid start to the year should enable continued financial and operational performance for the remainder of 2013 and will position us for growth in the future.”

Still, there were some struggles for the 125-year-old company in the first quarter. Sales in the United States and Canada decreased 8.6 percent from last year on weakness in both the food service and retail segments. Libbey said there were various reasons for the decrease.

“Weather was part of it, the higher tax rate and late tax refund, higher gas prices,” Ms. Streeter said. “We think all of those have impacted our sales in the U.S. and Canada.”

She said Libbey expects a pickup in food service business as the weather improves.

The company’s sales increased 4.5 percent in Mexico and Latin America, helping offset some of the losses in Canada and the United States. Overall, its business in the Americas fell 4.7 percent to $124 million.

Elsewhere, Libbey saw surprising sales strength in Europe, though profit margins there have shrunk.

Ms. Streeter said the company expects to spend $8 million to $10 million on reducing production at its Shreveport, La., factory, but it expects annual savings of $7 million to $9 million.

The first benefit should show up late in the fourth quarter, she said.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.



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