Despite soft market conditions and a recent restructuring initiative, Libbey reported that sales edged up while its net loss decreased in the third quarter.
Net sales in the third quarter ended September 30, 2019, were $192.4 million, an increase of 0.9%, or an increase of 2.0% in constant currency versus the prior-year period.
Net sales in the U.S. & Canada segment increased 3.5%, primarily driven by price realization and product mix, partially offset by lower volume and unfavorable channel mix. In Latin America, net sales decreased 0.3% while net sales in the EMEA segment decreased 4.7%.
Net loss improved to $3.5 million, compared to net loss of $5 million in the third quarter of 2018.
“I am pleased to report that Libbey delivered year-over-year, top-line growth during the third quarter, including a 3.5% increase to net sales in our core U.S. and Canada segment,” said Mike Bauer, CEO of Libbey. “Our operating teams performed well across the network, and we executed on our stated strategy to reduce inventory. While reducing inventory creates a near-term, temporary headwind to gross profit margins and Adjusted EBITDA, more importantly, it also enabled $10.3 million of incremental free cash flow.”
Bauer continued, “Our teams continue to make great progress leveraging Libbey’s market-leading position and competitive advantages to drive positive results in the face of continued headwinds resulting from soft market conditions in several of our key regions and channels. We remain committed to disciplined investment and spending while continuing to fund our strategic priorities. During the third quarter we demonstrated this by reducing SG&A expense by $2.4 million versus the prior year. Also, the organizational realignment announced at the end of August remains on track, and we expect to deliver approximately $9 to $11 million annual, pre-tax run-rate costs beginning in 2020.”