LIBBEY INC, 10-Q filed on 10/30/2019
Quarterly Report
v3.19.3
Document And Entity Information - shares
9 Months Ended
Sep. 30, 2019
Oct. 23, 2019
Document Information [Line Items]    
Entity Registrant Name LIBBEY INC  
Entity Central Index Key 0000902274  
Trading Symbol lby  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Common Stock, Shares Outstanding (in shares)   22,355,997
Entity Shell Company false  
Document Type 10-Q  
Document Period End Date Sep. 30, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Title of 12(b) Security Common Stock, $.01 par value  
v3.19.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Revenues $ 193,222 $ 191,555 $ 575,840 $ 588,697
Cost of sales 158,836 154,315 460,771 471,294
Gross profit 34,386 37,240 115,069 117,403
Selling, general and administrative expenses 30,982 33,336 94,375 98,396
Income from operations 3,404 3,904 (26,187) 19,007
Other income (expense) 346 (1,453) (1,858) (980)
Earnings before interest and income taxes 3,750 2,451 (28,045) 18,027
Interest expense 5,699 5,652 17,210 16,192
Income (loss) before income taxes (1,949) (3,201) (45,255) 1,835
Provision for income taxes 1,508 1,758 6,511 5,767
Net loss $ (3,457) $ (4,959) $ (51,766) $ (3,932)
Basic (in dollars per share) $ (0.15) $ (0.22) $ (2.31) $ (0.18)
Diluted (in dollars per share) (0.15) (0.22) (2.31) (0.18)
Dividends declared per share (in dollars per share) $ 0.1175
Impairment of goodwill and other intangible assets $ 46,881
Product [Member]        
Revenues 192,418 190,775 573,542 586,222
Shipping and Handling [Member]        
Revenues $ 804 $ 780 $ 2,298 $ 2,475
v3.19.3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaduited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Net income (loss) $ (3,457) $ (4,959) $ (51,766) $ (3,932)
Other comprehensive income (loss):        
Pension and other post-retirement benefit adjustments, net of tax 790 874 3,077 4,508
Change in fair value of derivative instruments, net of tax (1,811) (734) (9,695) 1,208
Foreign currency translation adjustments, net of tax (4,343) (2,707) (4,640) (5,766)
Other comprehensive income (loss), net of tax (5,364) (2,567) (11,258) (50)
Comprehensive income (loss) $ (8,821) $ (7,526) $ (63,024) $ (3,982)
v3.19.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
ASSETS    
Cash and cash equivalents $ 27,668 $ 25,066
Accounts receivable — net 90,745 83,977
Inventories — net 195,669 192,103
Prepaid and other current assets 20,709 16,522
Total current assets 334,791 317,668
Purchased intangible assets — net 11,868 13,385
Goodwill 38,431 84,412
Deferred income taxes 29,346 26,090
Other assets 14,670 7,660
Operating lease right-of-use assets 62,052
Property, plant and equipment — net 249,734 264,960
Total assets 740,892 714,175
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)    
Accounts payable 74,963 74,836
Salaries and wages 28,409 27,924
Accrued liabilities 48,433 43,728
Accrued income taxes 4,424 3,639
Pension liability (current portion) 3,479 3,282
Non-pension post-retirement benefits (current portion) 3,956 3,951
Operating lease liabilities (current portion) 12,465
Long-term debt due within one year 4,400 4,400
Total current liabilities 180,529 161,760
Long-term debt 411,906 393,300
Pension liability 42,513 45,206
Non-pension post-retirement benefits 39,719 43,015
Noncurrent operating lease liabilities 50,325
Deferred income taxes 2,429 2,755
Other long-term liabilities 24,019 18,246
Total liabilities 751,440 664,282
Contingencies (Note 15)
Shareholders’ equity (deficit):    
Common stock, par value $.01 per share, 50,000,000 shares authorized, 22,355,997 shares issued in 2019 (22,157,220 shares issued in 2018) 224 222
Capital in excess of par value 338,098 335,517
Retained deficit (223,207) (171,441)
Accumulated other comprehensive loss (125,663) (114,405)
Total shareholders' equity (deficit) (10,548) 49,893
Total liabilities and shareholders' equity (deficit) $ 740,892 $ 714,175
v3.19.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Sep. 30, 2019
Dec. 31, 2018
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 50,000,000 50,000,000
Common stock, shares issued (in shares) 22,355,997 22,157,220
v3.19.3
Condensed Consolidated Statements of Shareholders' Equity (Deficit) (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Beginning balance (in shares) at Dec. 31, 2017 22,018,010        
Beginning balance at Dec. 31, 2017 $ 220 $ 333,011 $ (161,165) $ (105,172) $ 66,894
Net income (loss) (2,961) (2,961)
Other comprehensive income (loss) 6,558 6,558
Stock compensation expense 270 270
Stock withheld for employee taxes (203) (203)
Stock issued (in shares) 63,582        
Stock issued $ 1 91 92
Cumulative-effect adjustment for the adoption of ASU 2017-12 275 (275)
Dividends (2,595) (2,595)
Ending balance (in shares) at Mar. 31, 2018 22,081,592        
Ending balance at Mar. 31, 2018 $ 221 333,169 (166,446) (98,889) 68,055
Beginning balance (in shares) at Dec. 31, 2017 22,018,010        
Beginning balance at Dec. 31, 2017 $ 220 333,011 (161,165) (105,172) 66,894
Net income (loss)         (3,932)
Other comprehensive income (loss)       (50) (50)
Ending balance (in shares) at Sep. 30, 2018 22,145,300        
Ending balance at Sep. 30, 2018 $ 221 334,862 (167,417) (105,497) 62,169
Beginning balance (in shares) at Mar. 31, 2018 22,081,592        
Beginning balance at Mar. 31, 2018 $ 221 333,169 (166,446) (98,889) 68,055
Net income (loss) 3,988 3,988
Other comprehensive income (loss) (4,041) (4,041)
Stock compensation expense 1,131 1,131
Stock withheld for employee taxes (11) (11)
Stock issued (in shares) 50,816        
Stock issued
Ending balance (in shares) at Jun. 30, 2018 22,132,408        
Ending balance at Jun. 30, 2018 $ 221 334,289 (162,458) (102,930) 69,122
Net income (loss) (4,959) (4,959)
Other comprehensive income (loss) (2,567) (2,567)
Stock compensation expense 658 658
Stock withheld for employee taxes (90) (90)
Stock issued (in shares) 12,892        
Stock issued 5 5
Ending balance (in shares) at Sep. 30, 2018 22,145,300        
Ending balance at Sep. 30, 2018 $ 221 334,862 (167,417) (105,497) 62,169
Beginning balance (in shares) at Dec. 31, 2018 22,157,220        
Beginning balance at Dec. 31, 2018 $ 222 335,517 (171,441) (114,405) 49,893
Net income (loss) (4,542) (4,542)
Other comprehensive income (loss) (2,303) (2,303)
Stock compensation expense 937 937
Stock withheld for employee taxes (317) (317)
Stock issued (in shares) 116,348        
Stock issued $ 1   (7)
Stock issued, Adjustments to Additional Paid in Capital   (8)      
Ending balance (in shares) at Mar. 31, 2019 22,273,568        
Ending balance at Mar. 31, 2019 $ 223 336,129 (175,983) (116,708) 43,661
Beginning balance (in shares) at Dec. 31, 2018 22,157,220        
Beginning balance at Dec. 31, 2018 $ 222 335,517 (171,441) (114,405) 49,893
Net income (loss)         (51,766)
Other comprehensive income (loss)       (11,258) (11,258)
Ending balance (in shares) at Sep. 30, 2019 22,355,997        
Ending balance at Sep. 30, 2019 $ 224 338,098 (223,207) (125,663) (10,548)
Beginning balance (in shares) at Mar. 31, 2019 22,273,568        
Beginning balance at Mar. 31, 2019 $ 223 336,129 (175,983) (116,708) 43,661
Net income (loss) (43,767) (43,767)
Other comprehensive income (loss) (3,591) (3,591)
Stock compensation expense 1,117 1,117
Stock withheld for employee taxes (92) (92)
Stock issued (in shares) 73,518        
Stock issued 1 1
Ending balance (in shares) at Jun. 30, 2019 22,347,086        
Ending balance at Jun. 30, 2019 $ 223 337,155 (219,750) (120,299) (2,671)
Net income (loss) (3,457) (3,457)
Other comprehensive income (loss) (5,364) (5,364)
Stock compensation expense 950 950
Stock withheld for employee taxes (7) (7)
Stock issued (in shares) 8,911        
Stock issued $ 1 1
Ending balance (in shares) at Sep. 30, 2019 22,355,997        
Ending balance at Sep. 30, 2019 $ 224 $ 338,098 $ (223,207) $ (125,663) $ (10,548)
v3.19.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Operating activities:    
Net income (loss) $ (51,766) $ (3,932)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 29,465 34,389
Impairment of goodwill and other intangible assets 46,881
Change in accounts receivable (7,575) (1,688)
Change in inventories (5,452) (24,445)
Change in accounts payable 5,987 (5,139)
Accrued interest and amortization of discounts and finance fees 868 801
Pension & non-pension post-retirement benefits, net (1,765) 1,154
Accrued liabilities & prepaid expenses 277 6,938
Income taxes (3,066) (1,662)
Cloud computing costs (3,647)
Share-based compensation expense 2,888 2,127
Other operating activities (429) (957)
Net cash provided by operating activities 12,666 7,586
Investing activities:    
Additions to property, plant and equipment (26,903) (35,123)
Net cash used in investing activities (26,903) (35,123)
Financing activities:    
Borrowings on ABL credit facility 81,971 78,850
Repayments on ABL credit facility (60,305) (46,876)
Other repayments (3,077)
Repayments on Term Loan B (3,300) (3,300)
Stock options exercised 5
Taxes paid on distribution of equity awards (416) (304)
Dividends (2,595)
Net cash provided by financing activities 17,950 22,703
Effect of exchange rate fluctuations on cash (1,111) (774)
Increase (decrease) in cash 2,602 (5,608)
Cash & cash equivalents at beginning of period 25,066 24,696
Cash & cash equivalents at end of period 27,668 19,088
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest 15,853 14,868
Cash paid during the period for income taxes $ 7,139 $ 7,219
v3.19.3
Note 1 - Description of the Business
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
1.
    Description of the Business
 
Libbey is a leading global manufacturer and marketer of glass tableware products. We produce glass tableware in
five
countries and sell to customers in over
100
countries. We design and market, under our Libbey
®
, Libbey Signature
®
, Master's Reserve
®
, Crisa
®
, Royal Leerdam
®
, World
®
Tableware, Syracuse
®
China and Crisal Glass
®
brand names (among others), an extensive line of high-quality glass tableware, ceramic dinnerware, metal flatware, hollowware and serveware items for sale primarily in the foodservice, retail and business-to-business channels of distribution. Our sales force presents our tabletop products to the global marketplace in a coordinated fashion. We own and operate
two
glass tableware manufacturing plants in the United States as well as glass tableware manufacturing plants in Mexico (Libbey Mexico), the Netherlands (Libbey Holland), Portugal (Libbey Portugal) and China (Libbey China). In addition, we import tabletop products from overseas in order to complement our line of manufactured items. The combination of manufacturing and procurement allows us to compete in the global tabletop market by offering an extensive product line at competitive prices.
 
Our website can be found at
www.libbey.com
. We make available, free of charge, at this website all of our reports filed or furnished pursuant to Section
13
(a) or
15
(d) of Securities Exchange Act of
1934,
including our annual report on Form
10
-K, our quarterly reports on Form
10
-Q, our current reports on Form
8
-K, as well as amendments to those reports. These reports are made available on our website as soon as reasonably practicable after their filing with, or furnishing to, the Securities and Exchange Commission and can also be found at
www.sec.gov
.
 
Our shares are traded on the NYSE American exchange under the ticker symbol LBY.
v3.19.3
Note 2 - Significant Accounting Policies
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Significant Accounting Policies [Text Block]
2.
    Significant Accounting Policies
 
Basis of Presentation
 
The accompanying unaudited Condensed Consolidated Financial Statements of Libbey Inc. and its majority-owned subsidiaries (collectively, Libbey or the Company) have been prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) for interim financial information and with the instructions to Form
10
-Q and Item 
10
of Regulation S-
X.
Accordingly, they do
not
include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the
three
month and 
nine
month periods ended
September 30, 2019
, are
not
necessarily indicative of the results that
may
be expected for the year ending
December 
31,
2019.
 
The balance sheet at
December 31, 2018
, has been derived from the audited financial statements at that date but does
not
include all of the information and footnotes required by U.S. GAAP for complete financial statements. The financial information included herein should be read in conjunction with our Consolidated Financial Statements in Item
8
of our Form
10
-K for the year ended
December 31, 2018
.
 
Software
We account for software in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)
350.
Software represents the costs of internally developed and/or purchased software for internal use. Capitalized costs include software packages, installation and internal labor costs of employees devoted to the software development project. Costs incurred to modify existing software, providing significant enhancements and creating additional functionality are also capitalized. Once a project is complete, we estimate the useful life of the internal-use software, generally amortizing these costs over a
3
to
10
year period. Software is classified on the balance sheet in property, plant and equipment, and the related cash flows are shown as cash outflows from investing activities.
 
Cloud Computing Arrangements
We account for implementation costs for software that we gain access to in hosted cloud computing arrangements in accordance with FASB ASC
350.
Capitalized costs of hosted cloud computing arrangements include configuration, installation, other upfront costs and internal labor costs of employees devoted to the cloud computing software implementation project. Once a project is complete, amortization is computed using the straight-line method over the term of the associated hosting arrangement, generally
3
to
10
years. In connection with our adoption of Accounting Standards Update (ASU)
2018
-
15
on
January 1, 2019,
these implementation costs are now classified on the balance sheet in prepaid and other current assets and other assets, and the related cash flows are presented as cash outflows from operations. Prior to
January 1, 2019,
implementation costs were included in property, plant and equipment, and the related cash flows were shown as cash outflows from investing activities. See
New Accounting Standards - Adopted
below. Our cloud computing arrangements primarily relate to our new global enterprise resource planning (ERP) system. At
September 30, 2019
, the net book value of these implementation costs included $
0.3
 million in prepaid and other current assets and $
6.0
 million in other assets on the Condensed Consolidated Balance Sheet. Amortization expense for the
three
and
nine
-month periods were both immaterial.
 
Leases
We determine if an arrangement is a lease at inception. As of
January 1, 2019,
operating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities and noncurrent operating lease liabilities in our balance sheet; related payments are included in operating activities on the statement of cash flows. We currently do
not
have any finance leases; but, if we do in the future, we will include them in property, plant and equipment, long-term debt due within
one
year and long-term debt within our balance sheet.
 
ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.
 
When our leases do
not
provide an implicit rate, we use our incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. We give consideration to our secured borrowing rates as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates.
 
The operating lease ROU asset also includes any lease prepayments made before commencement or in advance of the payment due date. Our lease terms
may
include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with a term of
12
months or less (short-term leases) are
not
recorded on the balance sheet. Our lease agreements do
not
contain any residual value guarantees or material restrictive covenants. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease costs represent the incremental change in lease payments associated with an indexed rate (i.e. Consumers Price Index), and these costs are
not
included in the lease liability on the balance sheet because they are unknown at commencement date.
 
We have lease agreements with lease and non-lease components. Non-lease components for real estate leases relate primarily to common area maintenance, insurance, taxes and utilities associated with the properties. For real estate leases and a limited class of equipment leases, we account for the lease and non-lease components separately. Non-lease components are
not
recorded on the balance sheet as a ROU asset and lease liability and are
not
included in lease costs. For all other equipment leases, we account for the lease and non-lease components as a single lease component.
 
See
New Accounting Standards - Adopted
below for the adoption impact of this lease accounting standard.
 
Stock-Based Compensation Expense
 
Stock-based compensation expense charged to the Condensed Consolidated Statements of Operations is as follows:
 
   
Three months ended September 30,
   
Nine months ended September 30,
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
 
Stock-based compensation expense   $
953
    $
671
    $
2,888
    $
2,127
 
 
New Accounting Standards - Adopted
 
Each change to U.S. GAAP is established by the FASB in the form of an ASU to the FASB’s ASC. We consider the applicability and impact of all ASUs. ASUs
not
listed below were assessed and either were determined to be
not
applicable or are expected to have minimal impact on the Company’s Condensed Consolidated Financial Statements.
 
In
February 2016,
the FASB issued ASU
2016
-
02,
Leases
(Topic
842
), which requires a lessee to recognize on the balance sheet ROU assets and corresponding liabilities for both finance and operating leases with lease terms greater than
12
months. On
January 1, 2019,
we adopted this standard using the optional transition method of applying the modified retrospective approach at our adoption date. Under this method, previously reported comparative periods prior to
2019
have
not
been restated. We have elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward our prior conclusions on existing contracts for lease identification, lease classification and initial direct costs. In addition, for most of our classes of equipment leases, we elected the practical expedient to
not
separate lease and non-lease components. We also made an accounting policy election to keep leases with a term of
12
months or less off of the balance sheet for all classes of underlying assets. At adoption, we had operating leases which resulted in us recognizing operating ROU assets and lease liabilities on the balance sheet of approximately
$69
million. The adoption of this ASU did
not
have a material impact on our condensed consolidated results of operations or cash flows, and there was
no
cumulative effect adjustment to retained earnings. The new standard also required additional disclosures which are included in
note
13
.
 
On
January 1, 2019,
we early adopted ASU
2018
-
15,
Intangibles-Goodwill and Other-Internal-Use Software
(Subtopic
350
-
40
):
Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
. This standard aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for internal-use software. The new guidance also prescribes the balance sheet, income statement and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. Prior to
January 1, 2019,
implementation costs for cloud computing arrangements were capitalized into property, plant and equipment and amortized on a straight-line basis. Upon adoption of this new standard, we reclassed
$
2.8
million from construction in progress within property, plant, and equipment to other assets. When implementation projects are completed and amortization of capitalized costs begins, a portion is recorded in prepaids and other current assets. Results and disclosures for reporting periods beginning on or after
January 1, 2019,
are presented under the new guidance within ASU
2018
-
15,
while prior period amounts and disclosures are
not
adjusted and continue to be reported in accordance with our previous accounting.
 
New Accounting Standards -
Not
Yet Adopted
 
In
June 2016,
the FASB issued ASU
2016
-
13,
Financial Instruments - Credit Losses
(Topic
326
):
Measurement of Credit Losses on Financial Instruments
. This standard introduces a new approach to estimating credit losses on certain types of financial instruments, including trade receivables, and modifies the impairment model for available-for-sale debt securities. ASU
2016
-
13
is effective for fiscal years beginning after
December 15, 2019,
including interim periods within those fiscal years, with early applica
tion permitted. In
October
of
2019,
the FASB approved a delayed effective date for Smaller Reporting Company filers; thus, our effective date is now for fiscal years beginning after
December 15, 2022,
including interim periods within those fiscal years.
 Although we are still evaluating the impact of this standard, we believe it will
not
have a material impact on our Condensed Consolidated Financial Statements.
v3.19.3
Note 3 - Balance Sheet Details
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Supplemental Balance Sheet Disclosures [Text Block]
3.
    Balance Sheet Details
 
The following table provides detail of selected balance sheet items:
 
(dollars in thousands)
 
September 30, 2019
   
December 31, 2018
 
Accounts receivable:
 
 
 
 
 
 
 
 
Trade receivables   $
89,202
    $
82,521
 
Other receivables    
1,543
     
1,456
 
Total accounts receivable, less allowances of $9,577 and $8,538   $
90,745
    $
83,977
 
                 
Inventories:
 
 
 
 
 
 
 
 
Finished goods   $
177,789
    $
175,074
 
Work in process    
1,433
     
1,363
 
Raw materials    
4,243
     
4,026
 
Repair parts    
10,282
     
10,116
 
Operating supplies    
1,922
     
1,524
 
Total inventories, less loss provisions of $7,342 and $9,453   $
195,669
    $
192,103
 
                 
Accrued liabilities:
 
 
 
 
 
 
 
 
Accrued incentives   $
22,621
    $
19,359
 
Other accrued liabilities    
25,812
     
24,369
 
Total accrued liabilities   $
48,433
    $
43,728
 
v3.19.3
Note 4 - Borrowings
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Debt Disclosure [Text Block]
4.
    Borrowings
 
Borrowings consist of the following:
 
   
 
 
 
 
September 30,
   
December 31,
 
(dollars in thousands)
 
Interest Rate
 
Maturity Date
 
2019
   
2018
 
Borrowings under ABL Facility
 
floating
(2)
 
December 7, 2022
(1)
  $
41,014
    $
19,868
 
Term Loan B
 
floating
(3)
 
April 9, 2021
   
376,900
     
380,200
 
Total borrowings
   
417,914
     
400,068
 
Less — unamortized discount and finance fees
   
1,608
     
2,368
 
Total borrowings — net
   
416,306
     
397,700
 
Less — long term debt due within one year
   
4,400
     
4,400
 
Total long-term portion of borrowings — net
  $
411,906
    $
393,300
 
________________________
(
1
)
 
Maturity date will be
January 9, 2021,
if Term Loan B is
not
refinanced by this date.
(
2
)
 
The interest rate for the ABL Facility is comprised of several different borrowings at various rates. The weighted average rate of all ABL Facility borrowings was
2.91
 percent at
September 30, 2019
.
(
3
)
 
We have entered into interest rate swaps that effectively fix a series of our future interest payments on a portion of the Term Loan B debt. See interest rate swaps in
note
8
for additional details. The Term Loan B floating interest rate was
5.04
 percent at
September 30, 2019
.
    
The ABL Facility also provides for the issuance of up to $
15.0
 million of letters of credit that, when outstanding, are applied against the $
100.0
 million limit. At
September 30, 2019
, $
9.6
 million in letters of credit and other reserves were outstanding. Remaining unused availability under the ABL Facility was $
49.4
 million at
September 30, 2019
, compared to $
71.6
 million at
December 31, 2018
.
 
On
June 17, 2019,
Crisa Libbey Mexico S. de R.L. de C.V. entered into a $
3.0
 million working capital line of credit with Banco Santander Mexico to cover seasonal working capital needs, guaranteed by its parent company, Libbey Mexico, S. de R.L. de C.V. The line of credit matures on
December 14, 2020,
and has a floating interest rate of LIBOR plus
3.20
percent. At
September 30, 2019
, there were
no
borrowings under this line of credit. Interest with respect to borrowings on the line of credit is due monthly.
v3.19.3
Note 5 - Income Taxes
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
5.
    Income Taxes
 
For interim tax reporting, we estimate our annual effective tax rate and apply it to our year-to-date ordinary income. Tax jurisdictions with a projected or year-to-date loss for which a tax benefit cannot be realized are excluded from the annualized effective tax rate. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.
 
Our effective tax rate was (
14.4
) percent for the
nine
months ended
September 30, 2019
, compared to
314.3
percent for the
nine
months ended
September 30, 2018
. Our effective tax rate for the
nine
months ended
September 30, 2019
, was negative because the company recorded positive tax expense despite incurring an overall pretax loss. This occurred because the pretax loss was driven by nondeductible expenses, principally the nondeductible goodwill impairment recorded in the
second
quarter of the year and nondeductible interest.
 
The Company and its subsidiaries are subject to examination by various countries' tax authorities. These examinations
may
lead to proposed or assessed adjustments to our taxes. In
August 2016,
the Mexican tax authority (SAT) assessed
one
of our Mexican subsidiaries related to the audit of its
2010
tax year. The amount assessed was approximately
3
billion Mexican pesos, which was equivalent to approximately
$157
million U.S. dollars as of the date of the assessment. The Company has filed an administrative appeal with SAT requesting that the assessment be fully nullified. We are awaiting the outcome of the appeal. Management, in consultation with external legal counsel, believes that if contested in the Mexican court system, it is more likely than
not
that the Company would prevail on all significant components of the assessment. Management intends to continue to vigorously contest in the Mexican courts all significant components of the assessment that are
not
nullified at the administrative appeal level. We believe that our tax reserves related to uncertain tax positions are adequate at this time.
v3.19.3
Note 6 - Pension and Non-pension Post-retirement Benefits
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Pension and Other Postretirement Benefits Disclosure [Text Block]
6.
    Pension and Non-pension Post-retirement Benefits
 
The components of our net pension expense, including the SERP (supplemental employee retirement plan), are as follows:
 
Three months ended September 30,
 
U.S. Plans
   
Non-U.S. Plans
   
Total
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
   
2019
   
2018
 
Service cost
  $
783
    $
1,003
    $
256
    $
289
    $
1,039
    $
1,292
 
Interest cost
   
3,382
     
3,154
     
761
     
755
     
4,143
     
3,909
 
Expected return on plan assets
   
(5,194
)    
(5,665
)    
     
     
(5,194
)    
(5,665
)
Amortization of unrecognized:
                                               
Prior service cost (credit)
   
     
     
(49
)    
(51
)    
(49
)    
(51
)
Actuarial loss
   
1,087
     
1,618
     
102
     
158
     
1,189
     
1,776
 
Pension expense
  $
58
    $
110
    $
1,070
    $
1,151
    $
1,128
    $
1,261
 
 
Nine months ended September 30,
 
U.S. Plans
   
Non-U.S. Plans
   
Total
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
   
2019
   
2018
 
Service cost
  $
2,349
    $
3,007
    $
775
    $
865
    $
3,124
    $
3,872
 
Interest cost
   
10,146
     
9,461
     
2,302
     
2,259
     
12,448
     
11,720
 
Expected return on plan assets
   
(15,580
)    
(16,994
)    
     
     
(15,580
)    
(16,994
)
Amortization of unrecognized:
                                               
Prior service cost (credit)
   
     
1
     
(150
)    
(152
)    
(150
)    
(151
)
Actuarial loss
   
3,262
     
4,854
     
310
     
471
     
3,572
     
5,325
 
Pension expense
  $
177
    $
329
    $
3,237
    $
3,443
    $
3,414
    $
3,772
 
 
We have contributed $
0.8
 million and $
2.5
 million of cash to our pension plans for the
three
months and
nine
months ended
September 30, 2019
, respectively. Pension contributions for the remainder of
2019
are estimated to be $
0.9
 million.
 
The provision for our non-pension, post-retirement, benefit expense consists of the following:
 
Three months ended September 30,
 
U.S. Plans
   
Non-U.S. Plans
   
Total
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
   
2019
   
2018
 
Service cost
  $
110
    $
151
    $
1
    $
1
    $
111
    $
152
 
Interest cost
   
459
     
456
     
6
     
9
     
465
     
465
 
Amortization of unrecognized:
                                               
Prior service (credit)
   
(71
)    
(71
)    
     
     
(71
)    
(71
)
Actuarial (gain)
   
(94
)    
(52
)    
(14
)    
(16
)    
(108
)    
(68
)
Non-pension post-retirement benefit expense
  $
404
    $
484
    $
(7
)   $
(6
)   $
397
    $
478
 
 
Nine months ended September 30,
 
U.S. Plans
   
Non-U.S. Plans
   
Total
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
   
2019
   
2018
 
Service cost
  $
332
    $
453
    $
1
    $
1
    $
333
    $
454
 
Interest cost
   
1,377
     
1,367
     
24
     
29
     
1,401
     
1,396
 
Amortization of unrecognized:
                                               
Prior service (credit)
   
(212
)    
(212
)    
     
     
(212
)    
(212
)
Actuarial (gain)
   
(282
)    
(157
)    
(51
)    
(49
)    
(333
)    
(206
)
Non-pension post-retirement benefit expense
  $
1,215
    $
1,451
    $
(26
)   $
(19
)   $
1,189
    $
1,432
 
 
Our
2019
estimate of non-pension cash payments is $
5.2
 million, of which we have paid $
0.8
 million and $
4.3
 million for the
three
months and
nine
months ended
September 30, 2019
, respectively.
v3.19.3
Note 7 - Net Loss Per Share of Common Stock
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Earnings Per Share [Text Block]
7.
    Net Loss per Share of Common Stock
 
The following table sets forth the computation of basic and diluted loss per share:
 
   
Three months ended September 30,
   
Nine months ended September 30,
 
(dollars in thousands, except earnings per share)
 
2019
   
2018
   
2019
   
2018
 
Numerator for earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss that is available to common shareholders   $
(3,457
)   $
(4,959
)   $
(51,766
)   $
(3,932
)
                                 
Denominator for basic earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
   
22,484,158
     
22,222,827
     
22,403,253
     
22,162,237
 
                                 
Denominator for diluted earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of stock options and restricted stock units
   
     
     
     
 
Adjusted weighted average shares and assumed conversions
   
22,484,158
     
22,222,827
     
22,403,253
     
22,162,237
 
                                 
Basic loss per share   $
(0.15
)   $
(0.22
)   $
(2.31
)   $
(0.18
)
                                 
Diluted loss per share   $
(0.15
)   $
(0.22
)   $
(2.31
)   $
(0.18
)
                                 
Anti-dilutive shares excluded from computation of diluted loss per share
   
1,925,173
     
1,270,680
     
1,776,055
     
1,230,244
 
 
When applicable, diluted shares outstanding is calculated using the weighted-average number of common shares outstanding plus the dilutive effects of equity-based compensation outstanding during the period using the treasury stock method.
v3.19.3
Note 8 - Derivatives
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
8.
    Derivatives
 
We utilize derivative financial instruments to hedge certain interest rate risks associated with our long-term debt and commodity price risks associated with forecasted future natural gas requirements. These derivatives qualify for hedge accounting since the hedges are highly effective, and we have designated and documented contemporaneously the hedging relationships involving these derivative instruments. While we intend to continue to meet the conditions for hedge accounting, if hedges do
not
qualify as highly effective or if we do
not
believe that forecasted transactions would occur, the changes in the fair value of the derivatives used as hedges would be reflected in our earnings. Our contracts with counterparties generally contain right of offset provisions. These provisions effectively reduce our exposure to credit risk in situations where the Company has gain and loss positions outstanding with a single counterparty. It is our policy to offset on the Condensed Consolidated Balance Sheets the amounts recognized for derivative instruments executed with the same counterparty under a master netting agreement.
 
We do
not
believe we are exposed to more than a nominal amount of credit risk in our natural gas hedges and interest rate swaps as the counterparties are established financial institutions. The counterparties for the derivative agreements are rated BBB+ or better as of
September 30, 2019
, by Standard and Poor’s.
 
Fair Values
 
The following table provides the fair values of our derivative financial instruments for the periods presented, all of which are cash flow hedges:
 
   
 
 
Fair Value of Derivative Assets
 
(dollars in thousands)
 
Balance Sheet Location
 
September 30, 2019
   
December 31, 2018
 
Interest rate swaps  
Prepaid and other current assets
  $
    $
1,425
 
Natural gas contracts  
Prepaid and other current assets
   
     
226
 
Natural gas contracts  
Other assets
   
     
39
 
Total derivative assets
 
 
  $
    $
1,690
 
 
   
 
 
Fair Value of Derivative Liabilities
 
Interest rate swaps
 
Accrued liabilities
  $
2,139
    $
 
Interest rate swaps
 
Other long-term liabilities
   
13,757
     
5,713
 
Natural gas contracts
 
Accrued liabilities
   
727
     
 
Natural gas contracts
 
Other long-term liabilities
   
106
     
 
Total derivative liabilities
 
 
  $
16,729
    $
5,713
 
 
The following table presents cash settlements (paid) received related to the below derivatives:
 
   
Three months ended September 30,
   
Nine months ended September 30,
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
 
Natural gas contracts
  $
(437
)   $
48
    $
(374
)   $
(186
)
Interest rate swaps
   
264
     
123
     
955
     
(58
)
Total
  $
(173
)   $
171
    $
581
    $
(244
)
 
The following table provides a summary of the impacts of derivative gain (loss) of our cash flow hedges on the Condensed Consolidated Statements of Operations and other comprehensive income (OCI):
 
   
 
 
Three months ended September 30,
   
Nine months ended September 30,
 
(dollars in thousands)
 
Location
 
2019
   
2018
   
2019
   
2018
 
Derivative gain (loss) recognized into OCI:
                                   
Natural gas contracts
 
OCI
  $
(330
)   $
179
    $
(1,473
)   $
513
 
Interest rate swaps
 
OCI
   
(2,234
)    
(998
)    
(10,699
)    
735
 
Total
 
 
  $
(2,564
)   $
(819
)   $
(12,172
)   $
1,248
 
                                     
Derivative gain (loss) reclassified from accumulated OCI to current earnings:
                                   
Natural gas contracts
 
Cost of Sales
  $
(438
)   $
48
    $
(375
)   $
(186
)
Interest rate swaps
 
Interest expense
   
219
     
135
     
909
     
32
 
Total
 
 
  $
(219
)   $
183
    $
534
    $
(154
)
 
Natural Gas Contracts
 
We use natural gas swap contracts related to forecasted future North American natural gas requirements. The objective of these commodity contracts is to limit the fluctuations in prices paid due to price movements in the underlying commodity. We consider our forecasted natural gas requirements in determining the quantity of natural gas to hedge. We combine the forecasts with historical observations to establish the percentage of forecast eligible to be hedged, typically ranging from
40
percent to
70
percent of our anticipated requirements,
18
months in the future, or more, depending on market conditions. The fair values of these instruments are determined from market quotes.
 
The following table presents the notional amount of our natural gas derivatives on the Condensed Consolidated Balance Sheets:
 
   
 
 
Notional Amounts
 
Derivative Types
 
Unit of Measure
 
September 30, 2019
   
December 31, 2018
 
Natural gas contracts
 
Millions of British Thermal Units (MMBTUs)
   
2,890,000
     
3,150,000
 
 
Hedge accounting is applied only when the derivative is deemed to be highly effective at offsetting changes in fair values or anticipated cash flows of the hedged item or transaction. For hedged forecasted transactions, hedge accounting is discontinued if the forecasted transaction is
no
longer probable to occur, and any previously deferred gains or losses would be recorded to earnings immediately. Changes in the fair value of these hedges are recorded in other comprehensive income (loss). As the natural gas contracts mature, the accumulated gains (losses) for the respective contracts are reclassified from accumulated other comprehensive loss to current expense in cost of sales in our Condensed Consolidated Statement of Operations.
 
Based on our current valuation, we estimate that accumulated losses for natural gas contracts currently carried in accumulated other comprehensive loss that will be reclassified into earnings over the next
twelve
months will result in a loss of $
0.7
 million in our Condensed Consolidated Statements of Operations.
 
Interest Rate Swaps
 
The table below lists the interest rate swaps we executed as part of our risk management strategy to mitigate the risks associated with the fluctuating interest rates under our Term Loan B. The interest rate swaps effectively convert a portion of our Term Loan B debt from a variable interest rate to a fixed interest rate, thus reducing the impact of interest rate changes on future income.
 
Swap execution date
 
Effective date
 
Expiration date
 
Notional amount
 
Fixed swap rate
April 1, 2015
 
January 11, 2016
 
January 9, 2020
 
$220.0 million
   
4.85
%
September 24, 2018
 
January 9, 2020
 
January 9, 2025
 
$200.0 million
   
6.19
%
(1)
________________________
(
1
)
 
Upon refinancing our Term Loan B, the fixed interest rate will be
3.19
percent plus the new refinanced credit spread.
 
Our interest rate swaps are valued using the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves.
 
Our interest rate swaps qualify and are designated as cash flow hedges at
September 30, 2019
, and are accounted for under FASB ASC
815,
"Derivatives and Hedging." Hedge accounting is applied only when the derivative is deemed to be highly effective at offsetting changes in fair values or anticipated cash flows of the hedged item or transaction. For hedged forecasted transactions, hedge accounting is discontinued if the forecasted transaction is
no
longer probable to occur, and any previously deferred gains or losses are recorded to earnings immediately. Changes in the fair value of these hedges are recorded in other comprehensive income (loss). Based on our current valuation, we estimate that accumulated losses currently carried in accumulated other comprehensive loss that will be reclassified into earnings over the next
twelve
months will result in an increase to interest expense of $
2.1
 million in our Condensed Consolidated Statements of Operations.
v3.19.3
Note 9 - Accumulated Other Comprehensive Income (Loss)
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Comprehensive Income (Loss) Note [Text Block]
9.
    Accumulated Other Comprehensive Income (Loss)
 
Accumulated other comprehensive income (loss) (AOCI), net of tax, is as follows:
 
Three months ended September 30, 2019 (dollars in thousands)
 
Foreign Currency Translation
     
Derivative Instruments
 
 
 
Pension and Other
Post-retirement Benefits
 
 
 
Accumulated Other
Comprehensive Loss
 
Balance on June 30, 2019   $
(23,537
)     $
(10,750
)
 
  $
(86,012
)
 
  $
(120,299
)
                                       
Amounts recognized into AOCI    
(4,543
)      
(2,564
)
 
   
 
 
   
(7,107
)
Currency impact
   
       
 
 
   
49
 
 
   
49
 
Amounts reclassified from AOCI
   
       
219
 
(1)
   
961
 
(2)
   
1,180
 
Tax effect    
200
       
534
 
 
   
(220
)
 
   
514
 
Other comprehensive income (loss), net of tax    
(4,343
)      
(1,811
)
 
   
790
 
 
   
(5,364
)
Balance on September 30, 2019   $
(27,880
)     $
(12,561
)
 
  $
(85,222
)
 
  $
(125,663
)
 
Nine months ended September 30, 2019 (dollars in thousands)
 
Foreign Currency Translation
     
Derivative Instruments
 
 
 
Pension and Other
Post-retirement Benefits
 
 
 
Accumulated Other
Comprehensive Loss
 
Balance on December 31, 2018   $
(23,240
)     $
(2,866
)
 
  $
(88,299
)
 
  $
(114,405
)
                                       
Amounts recognized into AOCI    
(4,832
)      
(12,172
)
 
   
1,148
 
 
   
(15,856
)
Currency impact
   
       
 
 
   
(1
)
 
   
(1
)
Amounts reclassified from AOCI
   
       
(534
)
(1)
   
2,877
 
(2)
   
2,343
 
Tax effect    
192
       
3,011
 
 
   
(947
)
 
   
2,256
 
Other comprehensive income (loss), net of tax    
(4,640
)      
(9,695
)
 
   
3,077
 
 
   
(11,258
)
Balance on September 30, 2019   $
(27,880
)     $
(12,561
)
 
  $
(85,222
)
 
  $
(125,663
)
 
Three months ended September 30, 2018 (dollars in thousands)
 
Foreign Currency Translation
     
Derivative Instruments
 
 
 
Pension and Other
Post-retirement Benefits
 
 
 
Accumulated Other
Comprehensive Loss
 
Balance on June 30, 2018
  $
(19,242
)     $
2,018
 
 
  $
(85,706
)
 
  $
(102,930
)
                                       
Amounts recognized into AOCI
   
(2,707
)      
(819
)
 
   
 
 
   
(3,526
)
Currency impact
   
       
 
 
   
(356
)
 
   
(356
)
Amounts reclassified from AOCI
   
       
(183
)
(1)
   
1,586
 
(2)
   
1,403
 
Tax effect
   
       
268
 
 
   
(356
)
 
   
(88
)
Other comprehensive income (loss), net of tax
   
(2,707
)      
(734
)
 
   
874
 
 
   
(2,567
)
Balance on September 30, 2018
  $
(21,949
)     $
1,284
 
 
  $
(84,832
)
 
  $
(105,497
)
 
Nine months ended September 30, 2018 (dollars in thousands)
 
Foreign Currency Translation
     
Derivative Instruments
 
 
 
Pension and Other
Post-retirement Benefits
 
 
 
Accumulated Other
Comprehensive Loss
 
Balance on December 31, 2017
  $
(16,183
)     $
351
 
 
  $
(89,340
)
 
  $
(105,172
)
                                       
Cumulative-effect adjustment for the adoption of ASU 2017-12
   
       
(275
)
 
   
 
 
   
(275
)
                                       
Amounts recognized into AOCI
   
(5,766
)      
1,248
 
 
   
1,527
 
 
   
(2,991
)
Currency impact
   
       
 
 
   
(316
)
 
   
(316
)
Amounts reclassified from AOCI
   
       
154
 
(1)
   
4,756
 
(2)
   
4,910
 
Tax effect
   
       
(194
)
 
   
(1,459
)
 
   
(1,653
)
Other comprehensive income (loss), net of tax
   
(5,766
)      
1,208
 
 
   
4,508
 
 
   
(50
)
Balance on September 30, 2018
  $
(21,949
)     $
1,284
 
 
  $
(84,832
)
 
  $
(105,497
)
_________________________
(
1
)
 
We reclassified natural gas contracts through cost of sales and the interest rate swaps through interest expense on the Condensed Consolidated Statements of Operations. See
note
8
for additional information.
(
2
)
 
We reclassified the net pension and non-pension post-retirement benefits amortization and settlement charges through other income (expense) on the Condensed Consolidated Statements of Operations. See
note
6
for additional information.
v3.19.3
Note 10 - Segments
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
10.
    Segments
 
Our reporting segments align with our regionally focused organizational structure, which we believe enables us to better serve customers across the globe. Under this structure, we report financial results for U.S. and Canada; Latin America; Europe, the Middle East and Africa (EMEA); and Other. Segment results are based primarily on the geographical destination of the sale. Our
three
reportable segments are defined below. Our operating segment that does
not
meet the criteria to be a reportable segment is disclosed as Other.
 
U.S. & Canada—includes sales of manufactured and sourced tableware having an end-market destination in the U.S and Canada, excluding glass products for Original Equipment Manufacturers (OEM), which remain in the Latin America segment.
 
Latin America—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Latin America, as well as glass products for OEMs regardless of end–market destination.
 
EMEA—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Europe, the Middle East and Africa.
 
Other—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Asia Pacific.
 
Our measure of profit for our reportable segments is Segment Earnings before Interest and Taxes (Segment EBIT) and excludes amounts related to certain items we consider
not
representative of ongoing operations as well as certain retained corporate costs and other allocations that are
not
considered by management when evaluating performance. Segment EBIT also includes an allocation of manufacturing costs for inventory produced at a Libbey facility that is located in a region other than the end market in which the inventory is sold. This allocation can fluctuate from year to year based on the relative demands for products produced in regions other than the end markets in which they are sold. We use Segment EBIT, along with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment EBIT for reportable segments includes an allocation of some corporate expenses based on the costs of services performed.
 
Certain activities
not
related to any particular reportable segment are reported within retained corporate costs. These costs include certain headquarter, administrative and facility costs, and other costs that are global in nature and are
not
allocable to the reporting segments.
 
The accounting policies of the reportable segments are the same as those described in
note
2
. We do
not
have any customers who represent
10
 percent or more of total sales. Inter-segment sales are consummated at arm’s length and are reflected at end-market reporting below.
 
   
Three months ended September 30,
   
Nine months ended September 30,
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
 
Net Sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. & Canada   $
119,351
    $
115,304
    $
358,154
    $
351,719
 
Latin America    
35,308
     
35,406
     
103,917
     
110,029
 
EMEA    
31,736
     
33,289
     
92,456
     
103,712
 
Other    
6,023
     
6,776
     
19,015
     
20,762
 
Consolidated   $
192,418
    $
190,775
    $
573,542
    $
586,222
 
                                 
Segment EBIT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. & Canada   $
9,038
    $
7,538
    $
36,102
    $
25,620
 
Latin America    
4,363
     
1,727
     
8,199
     
11,310
 
EMEA    
931
     
1,358
     
3,644
     
4,984
 
Other    
(174
)    
852
     
(2,495
)    
383
 
Total Segment EBIT   $
14,158
    $
11,475
    $
45,450
    $
42,297
 
                                 
Reconciliation of Segment EBIT to Net Loss:
     
 
     
 
     
 
     
 
Segment EBIT   $
14,158
    $
11,475
    $
45,450
    $
42,297
 
Retained corporate costs    
(7,391
)    
(6,683
)    
(23,597
)    
(21,929
)
Impairment of goodwill and other intangible assets (
note 16
)
   
     
     
(46,881
)    
 
Fees associated with strategic initiative    
     
(2,341
)    
     
(2,341
)
Organizational realignment    
(3,017
)    
     
(3,017
)    
 
Interest expense    
(5,699
)    
(5,652
)    
(17,210
)    
(16,192
)
Provision for income taxes    
(1,508
)    
(1,758
)    
(6,511
)    
(5,767
)
Net loss   $
(3,457
)   $
(4,959
)   $
(51,766
)   $
(3,932
)
                                 
Depreciation & Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. & Canada   $
2,928
    $
3,850
    $
9,275
    $
10,289
 
Latin America    
3,719
     
4,208
     
11,336
     
13,412
 
EMEA    
1,781
     
1,835
     
5,186
     
5,784
 
Other    
747
     
992
     
2,522
     
3,615
 
Corporate    
368
     
385
     
1,146
     
1,289
 
Consolidated   $
9,543
    $
11,270
    $
29,465
    $
34,389
 
                                 
Capital Expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. & Canada   $
1,380
    $
6,101
    $
7,304
    $
18,830
 
Latin America    
6,130
     
3,718
     
13,852
     
8,885
 
EMEA    
511
     
1,619
     
4,249
     
4,362
 
Other    
67
     
129
     
367
     
391
 
Corporate    
515
     
2,207
     
1,131
     
2,655
 
Consolidated   $
8,603
    $
13,774
    $
26,903
    $
35,123
 
 
v3.19.3
Note 11 - Revenue
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]
11.
    Revenue
 
Our primary source of revenue is the sale of glass tableware products manufactured within a Libbey facility as well as globally sourced tabletop products, including glassware, ceramicware, metalware and others. Adjustments related to revenue recognized in prior periods was
not
material for the
three
months and
nine
months ended
September 30, 2019
and
2018
. There were
no
material contract assets, contract liabilities or deferred contract costs recorded on the Condensed Consolidated Balance Sheets as of
September 30, 2019
and
December 31, 2018
.
 
Disaggregation of Revenue:
 
The following table presents our net sales disaggregated by business channel:
   
Three months ended September 30,
   
Nine months ended September 30,
 
(dollars in thousands)
 
2019
   
2018
   
2019
   
2018
 
Foodservice   $
73,217
    $
73,625
    $
231,033
    $
242,992
 
Retail    
64,713
     
63,325
     
180,508
     
180,756
 
Business-to-business    
54,488
     
53,825
     
162,001
     
162,474
 
Consolidated   $
192,418
    $
190,775
    $
573,542
    $
586,222
 
 
Each operating segment has revenues across all our business channels. Each channel has a different marketing strategy, customer base and product composition. For all periods presented, over
75
percent of each segment's revenue is derived from the following business channels: U.S. and Canada from foodservice and retail; Latin America from retail and business-to-business; and EMEA from business-to-business and retail.
v3.19.3
Note 12 - Fair Value
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
12.
    Fair Value
 
Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs used in measuring fair value into
three
broad levels as follows:
 
 
Level
1
— Quoted prices in active markets for identical assets or liabilities;
 
Level
2
— Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
 
Level
3