libbey inc. investor presentation...be 65+ years of age(2) • baby boomers* have 70 percent of the...
TRANSCRIPT
1.
Libbey Inc.
Investor PresentationCJS “New Ideas” Summer Conference
July 9, 2019
2.
Management
Jim BurmeisterSenior Vice President, Chief Financial Officer
Mike BauerChief Executive Officer
3.
Cautionary StatementMaterial presented in today’s presentation includes forward-looking statements about Libbey Inc. These statements are subject to risks and uncertainties, includingmarket conditions, competitive pressures, the value of the U.S. dollar and potential significant cost increases. Please refer to the Company’s Form 10-K for fiscal year-end December 31, 2018, filed on February 27, 2019, for further information.
This presentation may include financial information of which the Company’s independent auditors have not completed their audit. Although the Company believes that the assumptions upon which the financial information and its forward looking statements are based are reasonable, it can give no assurances that these assumptions will prove to be accurate.
This presentation also contains non-GAAP financial measures. We believe that the Adjusted Earnings Before Interest Taxes Depreciation and Amortization, or Adjusted EBITDA; Adjusted EBITDA margin; Trade Working Capital; Debt, net of cash to Adjusted EBITDA; Adjusted Selling, General and Administrative expense; Return on Invested Capital, or ROIC; and references to financial measures in constant currency are meaningful measures for investors to compare our results from period to period.
Reconciliations of the non-GAAP to GAAP measures may be found in the Appendix of this presentation as well as in the previously filed earnings press releases.
4.
Corporate Overview
5.
Why Libbey? Investment Thesis
Global Tabletop Leader
•Global leader in design, production and sale of tabletop products
•Strong leadership with experience that is aligned to the strategy
•Leading brands and market share
•Licensing agreements and partnerships
•Low cost production with broad distribution
Positioned for Profitable Growth
•Healthy pipeline of new products and entering new business segments
•Growing E-commerce business
•Best in class service to highly diversified customer base
• Global Manufacturing Network that is aligned to the marketplace and strategy to improve ROIC(1)
•ERP will simplify go to market, improve productivity and enable new technology
Improving Balance Sheet
•Positioned to increase Free Cash Flow(1) and continue to deleverage the balance sheet
•Ability to flex spending as needed
•Capital allocation prioritizes strategic investments and debt reduction over returning capital to shareholders
• ABL maturity extended
•Opportunity to improve Trade Working Capital(1)
(1) - see Appendix for definition of non-GAAP measure.
6.
Recent Developments: Moving Libbey Forward
New Leadership Provides Fresh Perspective• Mike Bauer appointed CEO in March 2019
• Extensive leadership experience in consumer product manufacturing, with success driving profitable growth strategies and multi-channel margin expansion initiatives
Footprint Rationalization and Fixed Asset Optimization• Rightsizing asset footprint via announced strategic review of our China business
• Safely extending the life of our fixed assets through advanced monitoring technology
• Implementing ERP system to drive anticipated cost savings and improve production planning
Anticipate E-commerce Becoming Accretive• Investments in e-commerce are enhancing sales mix and margins, while improving how Libbey reaches
consumers and end-users
• Expansion of e-commerce capabilities is helping uplift other sales channels, including brick and mortar retail
SG&A Cost Normalizing• SG&A focused on supporting e-commerce, ERP and new product development has elevated spend in recent
years; expectation to return to historical levels, ~14.5%(1), through disciplined spending and structural optimization, with uplift from ERP
Debt Refinancing Remains a Priority• Evaluating optimal time to execute Term Loan B refinancing, addressing 2021 maturity
(1) – see Appendix for definition of Adjusted SG&A Margin
7.
Libbey OverviewCORPORATE OVERVIEW
Our manufacturing and supply chain platform allows us to reach customers across the globe
CORPORAT E OVERVIEW
8.
9.
Latin America19%
EMEA17%
Other3%
U.S. & Canada 61%
2018 Net Salesby Segment
2018 Net Salesby Channel
2018 Segment EBIT
Retail32%
B2B27%
Foodservice41%
Latin America22%
EMEA12%
U.S. & Canada 63%
Other3%
Our business model is designed to serve customers in three distinct channels
C O R P O R A T E O V E R V I E W
Globally, Libbey competes in four categories of products
~88% OF SALES
Tumblers, stemware, mugs, bowls, floral, salt shakers, shot glasses, canisters, candleholders
~12% OF SALES
Bakeware, handmade tableware, blender jars, mixing bowls, floral, and candles
Plates, bowls, platters, cups, saucers, and other tableware accessories
Knives, forks, spoons, serving utensils, servingtrays, pitchers, other metal tableware accessories
CORPORAT E OVERVIEW
10.
CRISTALERIA DEL ANGEL-Equipment & Supply
CRISTALERIA MONACO-Equipment & Supply
EDWARD DON & COMPANY-Equipment & Supply
JOHN ARTIS-UK Equipment & Supply
SYSCO-Broad Line
TRIMARK-Equipment & Supply
US FOODS-Broad Line
WASSERSTROM-Equipment & Supply
WEBSTAURANT-Web-based distribution
WE SELL TO THE LARGEST CUSTOMERS IN THE FOODSERVICE INDUSTRIES:• Market leader recognized for
excellence by leading foodservice distributors
• Extensive product line and steady pace of innovation has enabled U.S. price increases in 44 of last 48 years
• Strong foodservice network and in-house salesforce selling to established restaurants, hospitality and tourism along with other categories
• ‘Annuity like’ revenue stream with a strong ‘installed base’ of customers reordering based on table setting placements
• Best in class service
Foodservice channel: 2018 net sales of $328MCORPORATE OVERVIEW
11.
STRONG RELATIONSHIPS WITH MAJOR RETAILERS:
AMAZON
BED BATH & BEYOND
CRATE & BARREL
DOLLAR TREE
IKEA
METRO
SORIANA
TARGET
TESCO
WALMART
WAYFAIR
(1) NPD and Management Estimates
• U.S. casual glass beverageware leader; market share in brick and mortar estimated at ~35%…more than twice the next competitor(1)
• Highly recognized brands and leading private label supplier
• New E-commerce capabilities position the company for continued leadership; ~400 SKUs online
• Extensive branded product lines including bakeware and serveware
• Established retail relationships provide a platform to launch innovative products that meet consumer wants and needs
Retail channel: 2018 net sales of $257MCORPORATE OVERVIEW
12.
ESTABLISHED GROUP OF B2B CUSTOMERS:
BATH & BODY WORKS
DIAGEO
HEINEKEN
NEWELL
STAR SOAP & CANDLE
SUNBEAM
SYNDICATE SALES INC.
WHIRLPOOL
• The business-to-business channel offers diverse opportunities for growth
• Established global supplier of decorated glassware for promotions
• OEM supplier to leading appliance manufacturers
• Growing in houseware applications: decorated beverageware and glass components for candles and floral applications
Business-to-business channel: 2018 net sales of $214M
CORPORATE OVERVIEW
13.
14.
Strategy Overview
CREAT ING MOMENT UM ST RAT EGY
(1)
(1)
(1) - see Appendix for definition of non-GAAP measure. 15.
16.
New Product DevelopmentProfitable Growth
17.
To drive transparency on financial benefits we launched an impact metric to measure the progress of our new products
Each quarter, we report what percentage of our sales within the period are driven by products launched in the previous 36 months
• It takes between 12 and 18 months to achieve placement and see growth
• E-commerce accelerates the curve
• Provides an opportunity to improve gross margins
• This revenue is not 100% incremental; however, it is necessary to maintain the health of our revenue stream, enter new markets, and offset traffic declines
• Incorporated into executive compensation metrics
A steady pipeline of new products sustains the health of our portfolio
PROFITABLE GROWTH: NEW PRODUCT DEVELOPMENT
18.
Long Term Target 8-9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
Global New Products % Net Sales
Long-term goal is to have new products represent 8-9% of annual global net sales
• It generally takes 12-18 months to reach run rate…2017 and early 2018 launches are gaining momentum
• NPD is offsetting market declines and providing growth in our planning
• Global process expansion is underway
New products are essential for sustainable margins and growth
PROFITABLE GROWTH: NEW PRODUCT DEVELOPMENT
19.
0
50
100
150
200
250
300
350
400
450
2014 2020 2030 2040 2050 2060
275 278 285 306 310 319
46 5674
82 88 98
65+
Up to 64
Foodservice entered growing Healthcare market in 2018
2014 2020 2030 2040 2050 2060
14.5% 16.8% 20.6% 21.7% 22.1% 23.6%
% of 65+ is Growing in the U.S.
Population by Age in the United States
in millions
PROFITABLE GROWTH: NEW PRODUCT DEVELOPMENT - HEALTHCARE
65+ population more than 50% growth in 16 years to 74 million
• 10,000 people a day are turning 65(1)
• By 2030, over 20% of the population will be 65+ years of age(2)
• Baby Boomers* have 70 percent of the nation’s disposable `income and stand to inherit $15 trillion over the next 20 years(3)
• Financially, the goal is for seniors to remain independent and receive the least amount of support needed for as long as possible
*born between 1946-1964 Sources:(1) - U.S. Census Bureau(2) - Senior Housing News(3) - MetLife/Boston College Center for Retirement Research
20.
Fully Engage the Healthcare Market
Libbey® Intuitive Diningware™
helps create dining experiences that are more inspiring, accessible and dignified for all.
Our passion, perspectives and full-spectrum tableware selection deliver insights-driven solutions that support your success.
Six aspects are considered in the curation and design of all products in our Intuitive Diningware collection:
Vision, Grip, Coordination, Dietary, Emotion and Safety
Intuitive Diningware™ line is designed to service the specialized needs required by healthcare facilities
PROFITABLE GROWTH: NEW PRODUCT DEVELOPMENT - HEALTHCARE
21.
Dedicated product offerings are a perfect fit for the Healthcare market
1 – ConstellationTM is the first-ever porcelain dinnerware with Microban® technology, which helps to minimize bacterial growth that contributes to the presence of stains and lingering odors; applies only to bacteria that can cause stains, odors, and product degradation
PROFITABLE GROWTH: NEW PRODUCT DEVELOPMENT - HEALTHCARE
Comfort Bowl
• Easy to grip due to raised rim
• Discreet banded edged; helps diner scoop food easily
Donna Senior Cup and Saucer
• Wider cup handles for easier grip
• Color target saucer assisting people with reduced vision
• Low well in saucer helps protect against tipping
Constellation™ Dinnerware
• Exclusive Microban® Technology1
Ergonomic Flatware
• Knob handle for those with arthritis and limited dexterity
• Shapes facilitate easier scooping and cutting function
Infinium™ Beverageware
• Non-glass, lightweight with a textured body for added grip
22.
E-CommerceProfitable Growth
23.
Omni-Channel approach is beneficial to our customers
Investment is beginning to pay off
E-COMMERCE
✓ Bringing new products to market faster… at improved price points…enhancing overall product and margin mix
✓ E-commerce sales are increasing as a percentage of total
• Example: U.S. retail sales…we expect to go from 12% in 2018 to >20% by 2021
✓ Investments supporting sales in existing brick and mortar outlets
24.
Operational Excellence
25.
Current StateOPERAT IONAL EXCELLENCE
Significant improvements made over the last 12 months to improve our Global Manufacturing Network striving to improve ROIC(1)
• We have established ourselves as the leader in servicing the customer; On-Time and In-Full (OTIF) orders over 90%
• We have reduced capacity on processes in the United States where we were undersold and are using the available glass on processes that are sold out
• We have improved our commercial margin profile in all regions and are adding new capabilities to support market needs
• We have invested in numerous projects to improve safety, quality, delivery and cost
(1) - see Appendix for definition of non-GAAP measure.
Deliver Best in Class Service
Optimize Inventory Profile
Optimize Global Manufacturing
Network
26.
Financial Overview
27.
2018 Actual 2019 Est.(1)
Revenue growth $7982.1%
$806 – $8221%-3%
Adjusted EBITDA margins(2) 8.9% 8.5% - 10%
Net debt to Adjusted EBITDA(2) 5.3x 4.0x – 5.0x
ROIC(2) 4.1% 4% - 6%
Capital Expenditures $45 $35-$40
2019 focuses on driving cash earnings through a disciplined approach
F INANCIAL OVERVIEW
(1) - These projections are based on the Company’s organic business targets and do not reflect the potential impacts of any merger, acquisition, divestiture or other corporate restructuring activity(2) – See Appendix for non-GAAP definitions and reconciliations to nearest U.S. GAAP measure
$ in millions
28.
$11.9
$9.7
$1.0 $0.1
($0.7)
$0.7
($0.7)
($1.6)
($1.0)
5.0
7.0
9.0
11.0
13.0
15.0
Prior Year Impact ofSales
Currency ManufacturingActivity
Shipping &StorageActivity
Utilities Benefits Other AdjustedEBITDA
Q1 Adjusted EBITDA(1) Walk vs. Prior Year
$ in millions
(1) See our first-quarter 2019 press release filed on form 8-K on April 30, 2019, for a reconciliation of Adjusted EBITDA to net income (loss)
Healthcare ($0.8)
F INANCIAL OVERVIEW
29.
Key Financial DataFirst Quarter ‘19 & ’18
(1) See the Appendix for definitions of non-GAAP measures.(2) See our first-quarter 2019 press release filed on form 8-K on April 30, 2019, for reconciliations of Adjusted EBITDA, Adjusted EBITDA Margin, Trade
Working Capital and Debt, net of cash to Adjusted EBITDA ratio to the most directly comparable U.S. GAAP measure.
Unaudited
$ in millions, except per share data '19 '18 VPY
Net sales 175.0$ 181.9$ (6.9)$
Gross profit 34.0$ 33.7$ 0.3$
Gross profit margin 19.4% 18.5% 90 bps
Selling, general & administrative expenses 32.6$ 31.5$ (1.1)$
Net income (loss) (4.5)$ (3.0)$ (1.5)$
Net income (loss) margin (2.6%) (1.6%) (100) bps
Diluted EPS (0.20)$ (0.13)$ (0.07)$
Adjusted EBITDA (1)(2)
(non-GAAP) 9.7$ 11.9$ (2.2)$
Adjusted EBITDA margin(1)(2)
(non-GAAP) 5.6% 6.6% (100) bps
Unaudited
$ in millions, except ratio
March 31,
2019
March 31,
2018
December
31, 2018
Trade Working Capital (1)(2)
(non-GAAP) 216.4$ 215.9$ 201.2$
Debt, net of cash to Adjusted EBITDA ratio (1)(2)
(non-GAAP) 6.0 x 5.1 x 5.3 x
First Quarter
F INANCIAL OVERVIEW
30.
Capital Allocation
31.
Libbey’s priorities remain: reduce debt and make strategic investments to improve the business
FINANCIAL OVERVIEW
Strategic
Investments
Debt Reduction
& Capital
DisciplineCash from
Operations
Investments to profitably grow the Company
Repayment of debt will continue to be a short and long-term focus of the Company
32.
Libbey has a history of reducing debt and strengthening the balance sheet
Reducing Debt on Balance Sheet
• Outstanding debt near its lowest levels since 2006 (acquisition of Mexico business); peaked at $555MM in 2008
• Repaid $45 million in debt since 2014 in order to strengthen balance sheet
• Debt temporarily higher in 2018 driven by increased inventory levels as well as investments in ERP and e-commerce initiatives
$466
$413
$445$437
$412
$388$400
300
350
400
450
500
2012 2013 2014 2015 2016 2017 2018
Gross Debt by YearMillions ($)
F INANCIAL OVERVIEW
33.
Interest expense has remained stable as debt reduction and swap provide protection
F I N A N C IAL O V E R V I E W
• Term Loan B• LIBOR plus 300 bps (currently 5.4%)• Maturity 2021• No financial covenants• $150MM accordion option
• Interest Rate Swaps• Providing interest protection in a rising
rate environment• $220MM fixed at 4.8575%(1) through early
2020• $200MM fixed at 6.19%(1) 2020 through
2025
Capital Structure
• $100MM ABL Credit Facility• LIBOR plus 150-200 bps• Maturity 2022
$23
$18$21 $20
$22
0.00
0.50
1.00
1.50
2.00
2.50
3.00
0
5
10
15
20
25
30
2014 2015 2016 2017 2018
Interest Expense vs. Federal Funds Rate
Millions ($)Fed Funds Rate %
(1) – The swap interest rates are calculated using the current credit spread of 300bps on the Term Loan B. This credit spread is subject to change when the current debt is refinanced.
34.
Appendix
35.
First Quarter 2019 Results
36.
($ in millions)
Net Sales Y-O-Y Change Y-O-Y Constant Currency (1)
$175.0 (3.8 %)(2.1 %)
Gross ProfitY-O-Y ChangeY-O-Y Constant Currency (1)
Y-O-Y Margin Change
$34.0 +0.9 %+2.8 %+90 bps
Adjusted EBITDA(2)
Y-O-Y ChangeY-O-Y Constant Currency (1)
Y-O-Y Margin Change
$9.7 (18.4 %)(18.8 %)(100 bps)
First Quarter2019
2019 First-quarter Highlights
▪ Gross profit improvement, a result of improved pricing, lower depreciation and solid operational execution
▪ Continued execution of Creating Momentum Strategy through continued challenged economic conditions
▪ E-commerce sales represented approximately 13% of total U.S. & Canada retail sales; an increase of 39% versus prior year
▪ New products drove approximately $12.5MM of sales, or 7.1% of net sales
▪ On-time and in-full (OTIF) remained strong; well over 90%
(1) See the Appendix for definitions of non-GAAP constant currency measures.(2) See our first-quarter 2019 press release filed on form 8-K on April 30, 2019, for reconciliations of Adjusted EBITDA to the most directly comparable U.S. GAAP
measure.
37.
International Housewares Show▪ Introduction of over 135 new products, including 60 into the
beverageware category
▪ New innovative lids for our Bakeware and Storageware products based on consumer insights from focus group research
▪ Trendy textured and patterned products in our floral and candle categories
38.
First-quarter Progress in E-commerce
▪ Sales represented approximately 13 percent of US and Canada retail sales
▪ Experiencing nearly 100 percent on-time shipping for our orders being fulfilled through our 3PLs
▪ Launch of Intuitive Dininghealthcare line on the digital platform, 27 SKUs available today
39.
Q1 2019 Net Sales of $175.0 vs. $181.9 in Q1 2018$ in millions
U.S. & Canada
OtherEMEA
Latin America
$107.9 $109.9
$85
$95
$105
$115
Q1 '18Net Sales
Retail Foodservice B2B Q1 '19Net Sales
$1.8 $3.0 ($2.8)
$34.3
$30.4
$25
$30
$35
$40
$45
$50
Q1 '18Net Sales
Retail Foodservice B2B Q1 '19Net Sales
($1.1)
($2.1)($0.7)
$32.2
$28.0($2.1)
$25
$30
$35
$40
$45
$50
Q1 '18Net Sales
Retail Foodservice B2B Q1 '19Net Sales
($1.2) ($0.8) $7.4 $6.6
$0
$10
$20
$30
$40
Q1 '18Net Sales
Retail Foodservice B2B Q1 '19Net Sales
$0.0 $0.1 ($0.9)
40.
2019 Outlook from Q1 2019 Earnings Call
▪ Net Sales increase in the low-single digits, compared to 2018
▪ Adjusted EBITDA margin(1) between 8.5%-10%
▪ Capital Expenditures and ERP capital(2) in the range of $35 - $40 million
▪ SG&A ~16% of net sales
(1) See our first-quarter 2019 press release filed on form 8-K on April 30, 2019, for a reconciliation of Net Income Margin to Adjusted EBITDA Margin.(2) See New Accounting Standards Adopted in the Quarterly Report filed May 1, 2019 on Form 10-Q for the quarter-ended March 31, 2019.
41.
GAAP & Non-GAAP Reconciliations
42.
Definition and reconciliation of non-GAAP measures
Q1 2019 Q1 2018 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014
Net income (loss) (U.S. GAAP) (4.5)$ (3.0)$ (8.0)$ (93.4)$ 10.1$ 66.3$ 5.0$
Add:
Interest expense 5.6$ 5.1$ 22.0$ 20.4$ 20.9$ 18.5$ 22.9$
Provision (benefit) for income taxes (1.3) (2.1) 10.3 15.8 17.7 (38.2) 8.5
Depreciation and amortization 9.9 11.9 44.3 45.5 48.5 42.7 40.4
Add: Special items before interest and taxes:
Restructuring and facility closure charges - - - - - - 1.0
Pension curtailment and settlement charges - - - - 0.2 21.7 0.8
Loss on redemption of debt - - - - - - 47.2
Abandoned property - - - - - - -
Goodwill impairment charges - - - 79.7 - - -
Product portfolio optimization - - - - 5.7 - -
Other (1)
- - 2.3 2.5 8.5 5.3 (3.5)
Adjusted EBITDA (non-GAAP) 9.7$ 11.9$ 71.0$ 70.6$ 111.6$ 116.3$ 122.1$ 119.2$
Net sales 175.0$ 181.9$ 797.9$ 781.8$ 793.4$ 822.3$ 852.5$
Net income (loss) margin (U.S. GAAP) (2.6%) (1.6%) (1.0%) (11.9%) 1.3% 8.1% 0.6%
Adjusted EBITDA Margin (non-GAAP) 5.6% 6.6% 8.9% 9.0% 14.1% 14.1% 14.3%
Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) and Adjusted
EBITDA Margin
(Dollars in millions)
(1) 2018 includes $2.3 million for legal and professional fees associated with a strategic initiative. 2017 includes $2.5 million for reorganization charges. 2016 includes $4.1
million for work stoppage and $4.4 million for executive terminations. 2015 includes $4.2 million for reorganization charges, $0.9 million for executive termination, and $0.2
million for an environmental obligation. 2014 includes $(4.7) million for furnace malfunction net proceeds, $0.9 million for executive retirement charges, and $0.3 million for an
environmental obligation.
Adjusted EBITDA excludes special items that Libbey believes are not reflective of our core operating performance.
43.
Definition and reconciliation of non-GAAP measures
LTM Q1
2019
LTM Q1
2018 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014
Adjusted EBITDA (1)
(non-GAAP) 68.8$ 76.2$ 71.0$ 70.6$ 111.6$ 116.3$ 122.1$
Debt reported on balance sheet(2)
(U.S. GAAP) 422.0$ 412.4$ 397.7$ 384.4$ 407.8$ 431.0$ 437.9$
Plus: Unamortized discount and finance fees (2)
2.1 3.1 2.4 3.3 4.5 5.8 7.0
Less: Carrying value adjustment on debt related to the Interest
Rate Agreement - - - - - - -
Gross Debt 424.1 415.5 400.1 387.7 412.3 436.9 444.9
Less: Cash and cash equivalents 15.0 25.7 25.1 24.7 61.0 49.0 60.0
Debt net of cash 409.2$ 389.7$ 375.0$ 363.0$ 351.3$ 387.9$ 384.9$
Debt net of cash to Adjusted EBITDA Ratio (non-GAAP) 6.0 5.1 5.3 5.1 3.1 3.3 3.2
Computation of Adjusted EBITDA to Debt net of cash to Adjusted EBITDA Ratio
(Dollars in millions)
(1) - See prior page for calculation and reconciliation to net income.
(2) - All years reflect retrospective adoption of ASU 2015-03 and 2015-15, which presents debt issuance costs of senior debt as a reduction to the liability.
44.
Definitions – Other Non-GAAP Measures
▪ Adjusted EBITDA and Adjusted EBITDA Margin ‒ U.S. GAAP net income (loss) plus interest expense, provision for income
taxes, depreciation and amortization, and special items, when applicable, that Libbey believes are not reflective of our core operating performance
▪ Adjusted SG&A and Adjusted SG&A Margin‒ U.S. GAAP selling, general and administrative expenses less special
items that Libbey believes are not reflective of our core operating performance
▪ Trade Working Capital‒ Net accounts receivable plus net inventories less accounts payable
▪ Debt, Net of Cash to Adjusted EBITDA Ratio‒ Gross debt before unamortized discount and finance fees, less cash and
cash equivalents, divided by last twelve months Adjusted EBITDA (defined above)
▪ Constant Currency‒ Constant currency references regarding net sales reflect a simple
mathematical translation of local currency results using the comparable prior period’s currency conversion rate
‒ Constant currency references regarding Adjusted EBITDA and Adjusted EBITDA Margin comprise a simple mathematical translation of local currency results using the comparable prior period’s currency conversion rate plus the transactional impact of changes in exchange rates from revenues, expenses and assets and liabilities that are denominated in a currency other than the functional currency
Definition and reconciliation of non-GAAP measures
FY 2018
Reported income from operations 27.0$
Add: Adjustments
Legal and professional fees associated with a strategic initiative 2.3
Adjusted income from operations 29.4
Factor to apply taxes 65%
After tax adjusted income from operations 19.1$
Reported property, plant and equipment, net 265.0$
Accounts receivable 84.0
Inventories 192.1
Less: Accounts payable 74.8
Reported Trade Working Capital 201.2$
Total Invested Capital 466.2$
ROIC 4.1%
Calculation of Return on Invested Capital (ROIC)
(dollars in millions)
45.
Disclaimer
46.
This presentation is being shared by Libbey Inc. (the “Company”) for informational purposes only and is not, and may not be relied on in any manner as, legal, tax, investment,accounting or other advice. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities ExchangeAct of 1934 and the Private Securities Litigation (Reform Act of 1995, that involve a number of risks and uncertainties. These statements relate to future events, the Company’sfuture financial performance with respect to the Company’s financial condition, results of operations, business plans and strategies, operating efficiencies or synergies, competitivepositions, growth opportunities for existing products, plans and objectives of the Company’s management, capital expenditures and other matters. These statements involve knownand unknown risks, significant uncertainties and other factors (many of which are beyond the control of the Company) that may cause the Company or the Company’s industry’sactual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, you canidentify forward-looking statements by terminology such as “may”, “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,”“potential,” “pro forma,” “seek” or “continue” or the negative of those terms or other comparable terminology. These statements are only predictions and actual results may differfrom predictions and such differences may be material. Any forward-looking statements that we make in this presentation speak only as of the date this presentation is given, andwe undertake no obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications offuture performance, unless expressed as such, and should only be viewed as historical data.
Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guaranteesof future performance and that our actual results of operations, financial condition, liquidity, prospects, growth, strategies, position in the market and the development of theindustry in which we operate may differ materially from those described in or suggested by the forward-looking statements contained in this presentation. In addition, even if ourresults of operations, financial condition, liquidity, prospects, growth, strategies, position in the market and the development of the industry in which we operate are consistent withthe forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods. Given theserisks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements.
The Company advises you that in the normal course of its business it evaluates potential strategic opportunities that may be available from time to time, including acquisitions,dispositions, mergers, private equity financings and other corporate transactions. The Company’s evaluation of such opportunities may involve discussions and negotiations withinterested parties concerning the proposed terms and conditions of a potential transaction. As a matter of policy, the Company does not comment on such matters unlessnegotiations with interested parties have advanced to the point where they would be material to a reasonable investor and the Company is legally obligated to disclose suchnegotiations.
This presentation and today’s prepared remarks contain non-GAAP financial measures. We believe that the Adjusted Earnings Before Interest Taxes Depreciation and Amortization,or Adjusted EBITDA; Adjusted EBITDA margin; Adjusted Selling, General & Administrative Expense (Adjusted SG&A); Trade Working Capital; Debt, net of cash to Adjusted EBITDA;Return on Invested Capital, or ROIC; and references to sales in constant currency are meaningful measures for investors to compare our results from period to period. Reconciliationsof the non-GAAP to GAAP measures may be found in the Appendix of this presentation as well as in the earnings press release and the supplemental financials.
This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other industry data.These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified thestatistical and other industry data generated by independent parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. Inaddition, projections, assumptions and estimates of its future performance and the future performance of the industries in which it operates are necessarily subject to a high degreeof uncertainty and risk due to a variety of factors.