Debt Redemption Pushes Libbey to Net Loss in Second Quarter
TOLEDO, Ohio-A loss of $31.1 million on the redemption of debt, in conjunction with a senior note offering, put Libbey's bottom line in the red in its fiscal second quarter, to the tune of $10.1 million. Without that item, Libbey's second-quarter net would have gained 36 percent in the quarter, which ended on June 30.
Net sales slipped 2.2 percent to $209.2 million, including a 2 percent drop in sales from the glass operations segment. Regionally, Libbey enjoyed a 24.2 percent gain in sales within its China region and a 5.9 percent pickup in sales in the United States and Canada. These performances were offset by a fall of 12.9 percent in sales in the Mexico region and a decline of 16 percent in sales in Europe.
Libbey's quarterly performance got a boost from a 364 basis-point jump in gross margin, which finished the quarter at 26.8 percent. Selling, general and administrative expenses rose 8.5 percent in dollars and 130 basis points as a percentage of sales, to 13 percent.
Stephanie Streeter, Libbey's CEO, said the company has "a lot of work to do to sustain performance and secure our future. The strategic plan we announced earlier this month will strengthen and build upon the efforts to improve our cost structure, leverage our advantaged businesses and strengthen our balance sheet."
Streeter was referring to the new corporate structure Libbey announced last week, which aligned the organization into three regions--the Americas; Europe, Middle East and Africa; and Asia Pacific. The company said at the time that the new structure was intended to reduce costs in North America, maximize its food-service leadership in the United States and Mexico along with its Mexican retail business, bolster its profitability in Europe and speed up its growth in China.