Libbey Inc. reported preliminary financial results for its first quarter ended March 31, 2017, pointing to market pressures and investments impacting a decline in sales and a net loss.
For the first quarter of 2017, Libbey expects net sales of approximately $173 million, compared to $183 million in the prior year first quarter; a net loss in the range of $6 to $8 million, compared to net income of $0.7 million in the prior year first quarter; and adjusted EBITDA in the range of $5 to $7 million, compared to $22.9 million in the prior year first quarter.
“While first quarter net sales were in line with our expectations, profitability was impacted by stronger competitive pressures that reflect a continuation of end-market trends we observed during the second half of last year,” said William Foley, chairman and CEO, Libbey. “As we discussed on our fourth-quarter earnings call, we anticipated that profitability in the first half of 2017 would be negatively impacted by furnace rebuilds, the initiation of some technology investments needed to maintain our leadership position and foreign currency. However, in addition to these expected items, other factors contributed to a larger than anticipated profitability decline during the first quarter. Unfavorable price and product mix negatively impacted performance, as we protected market share and met competitive pricing in an environment of intense global price competition. Also, the mark-to-market impact of certain of our natural gas hedges was greater than expected during the period.”
“We believe we are focused on the right areas to ensure that we emerge from this difficult environment as an even stronger leader in the industry,” Foley continued. “Also, in response to softer first quarter results and market conditions, we are taking additional proactive measures to protect our business. We’ve identified and already begun to implement expense reductions that we expect will reduce costs by approximately $5 million, and we’ve updated our capital spending plan to reduce 2017 capital expenditures to the low end of our previously guided range. We are also taking pricing actions in both the U.S. and Mexico to improve margins, new product launches are enriching our product mix, and the accelerated development of our e-commerce platform will help improve our long-term business performance.”