Libbey Inc. reported results for the full year and fourth quarter-ended December 31, 2013.
Libbey financial results for Q4 and the full year include an additional reporting segment, the U.S. Sourcing segment, which includes U.S. sales of sourced ceramic dinnerware, metal tableware, hollowware and serveware. Libbey’s financial reporting now includes the Americas; Europe, the Middle East and Africa; U.S. Sourcing; and other. The addition of U.S. Sourcing reflects the increasing importance of this segment where sales grew 11.5% during the fourth quarter of 2013 and 8.4% for the full year.
Overall, Libbey sales for the fourth quarter were $221 million, compared to $219.1 million for the fourth quarter of 2012, an increase of 0.9% (0.1% excluding currency fluctuation). Gross profit for the fourth quarter was $47.7 million, compared to $44.6 million for the fourth quarter of 2012, an increase of 7.1%.
Adjusted gross profit for the quarter was $53.8 million, compared to $45.5 million in the prior-year quarter. A 24.3% adjusted gross profit margin was achieved during the fourth quarter of 2013, compared to 20.8% in the fourth quarter of 2012 and was the highest fourth quarter adjusted gross profit margin percentage since 2000.
The adjusted EBITDA margin was 17% compared to 13.6% in the prior-year fourth quarter.
“Fourth quarter revenues were in line with our expectations and, along with the benefits of our much improved cost platform, allowed us to achieve a 25.9% increase in adjusted EBITDA, compared to the fourth quarter of 2012. We remain on track with our longer-term goals, including increasing profitability, increasing cash generation and reducing leverage,” said Libbey CEO Stephanie Streeter.
“Our restructuring initiatives over the last two years have strengthened our cost position considerably, and we are now focused on maintaining the hard won margin increase and profitably growing our business. We look forward to a stronger sales environment in 2014 and the opportunity to better leverage our global capabilities,” she continued.
Sales in the Americas segment were $154.1 million, compared to $156.3 million in the fourth quarter of 2012, a decrease of 1.4%. This was comprised of a 1.9% increase in sales in Libbey’s foodservice channel, a decrease of 10% in retail and a 9.9% increase in the business-to-business channel.
Sales in the EMEA segment increased 8.2% (3.4% excluding currency impact) to $38.7 million, compared to $35.8 million in the fourth quarter of 2012.
Sales in U.S. Sourcing were $19.8 million in the fourth quarter of 2013, compared to $17.7 million in the prior-year quarter, as sales of World Tableware and Syracuse China flatware and dinnerware increased 11.5%.
Sales in the Other category were $8.5 million, compared to $9.2 million in the prior-year quarter. This decrease was the result of an 8.4% decrease in sales (10.7% excluding currency impact) in the Asia Pacific region.
Earnings before interest and income taxes increased to $23.9 million in the fourth quarter of 2013, compared to $13.6 million for the fourth quarter of 2012.
Adjusted EBITDA of $37.6 million was $7.7 million more than the $29.9 million reported in the prior-year quarter, an increase of 25.9%. The primary factors contributing to the improvement in adjusted EBITDA from the prior-year quarter include higher capacity utilization, adjusted for the furnace malfunction in Toledo, and lower labor and benefit costs partially offset by increased energy costs and higher direct material costs.
Interest expense decreased by $0.9 million to $7.7 million, compared to $8.6 million in the year-ago period, primarily driven by lower debt.
Libbey reported that its sales for the full year 2013 were $818.8 million, compared to $825.3 million for 2012, a decrease of 0.8% (1.8% excluding currency fluctuation).
Net income for 2013 grew to $28.5 million, compared to net income of $7 million during the full year 2012. EBIT increased to $73.7 million during 2013, compared to $50.4 million for 2012.Adjusted EBITDA was an all-time record $134.4 million, compared to $132.4 million for the year ending December 31, 2012.
The adjusted EBITDA margin for the full year 2013 grew to 16.4%, which was the highest percentage in a full year since 2002, from 16% in 2012, according to the company.