Libbey lowers earnings forecast, to close two operations

12/10/2008

Sales of glass tableware to homes and restaurants cracked at Libbey Inc. last month, forcing the Toledo firm to lower its quarterly profit forecast and close operations in Syracuse, N.Y. and Mira Loma, Calif.

While sales were close to expectations through October they deteriorated quickly in November, John Meier, chief executive, said in a written statement from the firm s headquarters in downtown Toledo.

The firm blamed current economic conditions, including waning consumer confidence.

As a result, Libbey will close a 137-year-old Syracuse China plant it has owned since 1995 by March 27. The move will affect 275 employees there. Ceramic tableware sold under the Syracuse name will then be imported from factories in lower-wage nations.

An additional 30 people will lose their jobs in May when Libbey shutters a distribution center in Mira Loma, Calif.

The closings are expected to boost annual cash flow by $4 million to $5 million.

The moves will leave just three U.S. factories for Libbey: glassware plants in central Toledo and Shreveport, La. and a plastics plant in Dane, Wis. Libbey employees 1,400 people in Toledo among 2,900 nationwide and 7,400 globally.

Ken Boerger, company treasurer, said Wednesday morning that the latest moves do not jeopardize the Toledo factory. We have no plans to shut other facilities at this time, he said.

In the announcement, company officials said they now expect pre-tax profits and sales in the fourth quarter to be significantly lower than forecasts made Oct. 16.

At that time, the firm predicted pre-tax profits, excluding interest, of $20.5 million to $23.5 million and sales of $210 million to $220 million.

Libbey shares fell 45 cents, or 26 percent, to $1.30 in early Wednesday morning trading on the New York Stock Exchange.

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