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Libbey Inc. Announces Improved Second Quarter Results- Sales Increase 9.3 Percent
TOLEDO, Ohio, July 28 /PRNewswire-FirstCall/ -- Libbey Inc. (NYSE: LBY) reported today improved second quarter financial results on an adjusted basis, excluding special charges related to the Crisa acquisition and refinancing completed on June 16, 2006. Sales increased 9.3 percent to $158.0 million from $144.5 million in the prior year second quarter. Libbey reported a net loss of $9.6 million, or $0.68 per share, for the second quarter ended June 30, 2006, as compared with a net loss of $0.9 million or $0.06 per share in the prior year quarter. The net loss for the quarter included a total of $13.4 million, or $0.95 per share, in special charges related to the consolidation of two of its recently acquired Mexican facilities and the write-off of finance fees (see Tables 1 and 2). The Company posted second quarter adjusted net income, excluding special charges of $3.9 million, or $0.27 per share, as compared with $3.4 million, or $0.25 per share, for the year-ago quarter (see Tables 1 and 2). Second Quarter Results For the quarter-ended June 30, 2006, sales increased 9.3 percent to $158.0 million from $144.5 million in the year-ago quarter. The increase in sales was primarily attributable to the consolidation of sales of Crisa, the Company's former joint venture in Mexico, for the last two weeks of June, a more than 10 percent increase in shipments to retail and export glassware customers and shipments of Traex products, an 8 percent increase in shipments of Royal Leerdam and Crisal products and a 5 percent increase in sales to foodservice glassware customers. Shipments of Syracuse China products were down approximately 8 percent as the result of the work stoppage early in the quarter and shipments of World Tableware products were down slightly. Excluding Crisa's sales, sales were up 4.0 percent in total. The Company reported a loss from operations of $4.1 million during the quarter, as compared to income from operations of $2.5 million in the year-ago quarter. Income from operations, excluding special charges (see Table 1), was $11.0 million during the quarter, as compared to $8.9 million for the year-ago quarter (see Table 2). Factors contributing to the increase in income from operations were higher sales, higher production activity and reduced selling, general and administrative expenses due to the salary workforce reduction implemented at the end of the second quarter of last year. Partially offsetting these improvements were slightly higher manufacturing expenses at the Company's Syracuse China operations related to the work stoppage, a $0.6 million increase in natural gas costs and $1.5 million in increased pension and postretirement welfare expenses. From April 1, 2006 until June 16, 2006, when the Company acquired 100 percent ownership of Crisa, pretax equity earnings from Crisa were $0.9 million as compared to an equity loss of $0.8 million in the second quarter of 2005. The increased earnings were the result of increased and more profitable sales, higher translation gain, and lower natural gas and electricity costs. Libbey reported that adjusted EBITDA as detailed on Table 4 increased to $19.2 million in the second quarter of 2006 as compared to $16.6 million in the year-ago quarter. Interest expense increased $6.7 million compared with the year-ago period as a result of the refinancing consummated on June 16, 2006. Contributing to the increase in interest expense was a write-off of $4.9 million of financing fees associated with debt retired during the quarter, higher debt and higher average interest rates. The effective tax rate remained unchanged at 33 percent for the quarter. Libbey reported a net loss was $9.6 million, or $0.68 per diluted share, compared with a diluted loss per share of $0.06 in the second quarter of 2005. The Company reported that its diluted earnings per share for the second quarter of 2006, as detailed in the attached Table 2, and excluding special charges of $15.1 million pretax relating to the announced consolidation of two of its recently acquired Mexican facilities and the write-off of $4.9 million pretax of finance fees outlined in the attached Table 1, was $0.27 per diluted share. This compares to diluted earnings per share of $0.25 during the second quarter of 2005, excluding the impact of special charges relating to the 2005 salary reduction program and the capacity realignment charges associated with the shutdown of Libbey's City of Industry, California, facility in February 2005, as detailed in the attached Table 1. Six-Month Results For the six months ended June 30, 2006, sales increased 6.8 percent to $292.9 million from $274.3 million in the year-ago period. Excluding Crisa's sales during the last two weeks of June 2006, sales increased 4.0 percent compared with the first six months of 2005. This increase in sales was attributable to increases of at least 8 percent in shipments to foodservice glassware customers, retail customers, export customers, Traex customers and Crisal customers. Sales of Royal Leerdam products increased almost 2 percent as compared to the first six months of 2005. Shipments to industrial customers were down over 10 percent during the first half of 2006, while shipments of Syracuse China and World Tableware products were down slightly. Libbey reported a loss from operations of $1.1 million during the first six months of 2006 as compared to income from operations of $2.6 million during the year-ago period. Adjusted income from operations, excluding special charges (see Table 2), was $14.1 million for the first six months of 2006, as compared to $12.0 million for the year-ago period. Contributing to the increase in adjusted income from operations were higher sales, higher production activity and improved operating results at Crisal in Portugal. Equity earnings from Crisa were $2.0 million on a pretax basis, as compared to a pretax loss of $0.2 million in the year-ago period. The increased equity earnings were the result of increased and more profitable sales, higher translation gain, and lower natural gas and electricity costs. For the first six months of 2006, adjusted EBITDA, as detailed on Table 4, was $32.0 million, a 10.6 percent increase over adjusted EBITDA of $29.0 million during the first half of 2005. Interest expense increased $7.0 million compared with the year-ago period as a result of the refinancing completed on June 16, 2006. Contributing to the increase in interest expense were a write-off of $4.9 million of financing fees associated with debt retired during the quarter, higher debt and higher average interest rates. The Company recorded a net loss of $9.1 million, or $0.64 per diluted share, compared with a net loss of $2.5 million, or $0.18 per diluted share, in the year-ago period. The Company reported that its diluted earnings per share for the first six months of 2006, as detailed in the attached Table 2, and excluding special charges of $15.1 million pretax relating to the announced consolidation of two of its recently acquired Mexican facilities and the write-off of $4.9 million pretax of finance fees outlined in the attached Table 1, were $0.31 per diluted share. This compares to diluted earnings per share of $0.27 during the first six months of 2005, excluding the impact of special charges relating to the 2005 salary reduction program and the capacity realignment charges associated with the shutdown of Libbey's City of Industry, California, facility in February 2005, as detailed in the attached Table 1. Cash Flow Year-to-date cash flow from operations increased $8.9 million, or 77.3 percent to $20.4 million as compared to the year-ago period. Contributing to the increase in operating cash flow were higher earnings and a reduction in working capital. Working capital, defined as inventories and accounts receivable less accounts payable, increased by $44.3 million from $170.3 million to $214.6 million compared to June 30, 2005 due to the acquisition of Crisa. Excluding working capital of $54.5 million at Crisa at June 30, 2006, the Company's working capital was $10.2 million lower than the year-ago period, reflecting the Company's continued efforts to reduce its investment in working capital. Pro Forma Results Libbey reported that pro forma adjusted EBITDA as detailed on Table 3 increased to $27.2 million in the second quarter of 2006 as compared to $24.1 million in the year-ago quarter. For the first six months of 2006, pro forma adjusted EBITDA, as detailed on Table 3, was $49.5 million, a 10.3 percent increase over pro forma adjusted EBITDA of $44.9 million during the first half of 2005. Outlook for 2006 John F. Meier, chairman and chief executive officer, commenting on the quarter, said, "We are pleased with the addition of Crisa to the Libbey family and with the strength of our core business performance. Sales to foodservice glassware customers were strong and shipments to retail customers were especially robust. We saw a solid performance from Crisa, our recently acquired Mexican glass tableware operation." Meier also added, "With the closing of our acquisition of the remaining 51 percent of Crisa on June 16, 2006, we will now be including their results of operations for the balance of 2006. We are well into our consolidation of the facilities in Mexico, and we look forward to harvesting those future savings." He added, "We expect third and fourth quarter sales to increase by 4 to 5 percent as compared with the pro forma third and fourth quarter sales in 2005. Earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be between $18.5 million and $19.5 million in each of the third and fourth quarters of 2006." Libbey also confirmed that it is on schedule to begin production in early 2007 at its new glass tableware production facility in China. Webcast Information Libbey will hold a conference call for investors on Friday, July 28, 2006, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet on both http://www.libbey.com/ and http://phx.corporate-/ ir.net/phoenix.zhtml?p=irol-eventDetails&c=64169&eventID=1356560 To listen to the call, please go to the website at least 10 minutes early to register, download and install any necessary software. A replay will be available for 30 days after the conclusion of the call. This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements only reflect the Company's best assessment at this time and are indicated by words or phrases such as "goal," "expects," "believes," "will," "estimates," "anticipates," or similar phrases. Investors are cautioned that forward- looking statements involve risks and uncertainty, that actual results may differ materially from such statements, and that investors should not place undue reliance on such statements. These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's report on Form 10-K filed with the Commission on March 16, 2006, and current report on Form 8-K filed with the Commission on May 15, 2006. Important factors potentially affecting performance include but are not limited to increased competition from foreign suppliers endeavoring to sell glass tableware in the United States and Mexico, including the impact of lower duties for imported products; major slowdowns in the retail, travel or entertainment industries in the United States, Canada, Mexico and Western Europe, caused by terrorist attacks or otherwise; significant increases in per unit costs for natural gas, electricity, corrugated packaging, and other purchased materials; higher interest rates that increase the Company's borrowing costs; protracted work stoppages related to collective bargaining agreements; increases in expense associated with higher medical costs, increased pension expense associated with lower returns on pension investments and increased pension obligations; devaluations and other major currency fluctuations relative to the U.S. dollar and the Euro that could reduce the cost competitiveness of the Company's products compared to foreign competition; the effect of high inflation in Mexico and exchange rate changes to the value of the Mexican peso and the earnings and cash flow of Crisa, expressed under U.S. GAAP; the inability to achieve savings and profit improvements at targeted levels in the Company's operations or within the intended time periods; whether the Company completes any significant acquisition, and whether such acquisitions can operate profitably. With respect to its expectations regarding the recent Crisa acquisition, these factors also include, the ability to successfully integrate the operations of Crisa and recognize the expected synergies and the ability of Vitro to supply necessary services to Crisa, and our ability to capitalize on the expanded platform that the acquisition of Crisa will provide. Libbey Inc.:
-- is the largest manufacturer of glass tableware in the western
hemisphere and one of the largest glass tableware manufacturers in the
world;
-- is expanding its international presence with facilities in Mexico, the
Netherlands, Portugal, and a facility in China that is expected to
begin production in 2007;
-- is the leading manufacturer of tabletop products for the U.S.
foodservice industry; and
-- supplies products to foodservice, retail, industrial and
business-to-business customers in over 90 countries.
Based in Toledo, Ohio, the Company operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, Portugal and the Netherlands. Its Crisa subsidiary, located in Monterrey, Mexico, is the leading producer of glass tableware in Mexico and Latin America. Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients. Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe. Its Syracuse China subsidiary designs, manufactures and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments in the United States. Its World Tableware subsidiary imports and sells a full-line of metal flatware and holloware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. Its Traex subsidiary, located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry. In 2005, Libbey Inc.'s net sales totaled $568.1 million. Table 1
Summary of Special Charges
(Dollars in thousands)
Three Months Six Months ended
ended June 30, June 30,
2006 2005 2006 2005
Capacity realignment:
Fixed asset related $- $372 $- $520
Severance & benefits - - - 2,019
Miscellaneous - 475 - 1,305
Included in Special charges $- $847 $- $3,844
In August 2004, Libbey announced that it was realigning its production capacity in order to improve its cost structure. Pursuant to the plan, Libbey closed its manufacturing facility in City of Industry, California, in February 2005 and realigned production among its other glass manufacturing facilities. Libbey has recorded a pretax charge of $847 in the second quarter 2005 and $3,844 year-to-date 2005, as detailed above. Salary reduction program:
Pension & retiree welfare $- $867 $- $867
Included in Cost of sales - 867 - 867
Pension & retiree welfare - 1,347 - 1,347
Included in Selling, general and
administrative expenses - 1,347 - 1,347
Employee termination costs - 3,350 - 3,350
Included in Special charges - 3,350 - 3,350
Pretax salary reduction program $- $5,564 $- $5,564
In June 2005, Libbey reduced its North American salaried workforce by ten percent in order to reduce Libbey's overall cost profile. The pretax charge for the salary reduction was $5,564 in the second quarter of 2005 as detailed above. Crisa Restructuring:
Inventory write-down $2,543 $- $2,543 $-
Included in Cost of sales 2,543 - 2,543 -
Fixed asset related $12,587 $- $12,587 $-
Included in Special charges 12,587 - 12,587 -
Crisa Restructuring $15,130 $- $15,130 $-
In June 2006, Libbey announced plans to consolidate Crisa's two principal manufacturing facilities. Libbey has recorded a pretax charge of $15,130 in the second quarter of 2006 as detailed above. Write-off of finance fees:
Write-off of finance fees 4,906 4,906
Included in Interest expense $4,906 $- $4,906 $-
In June 2006, Libbey wrote off unamortized finance fees related to debt refinancing at Libbey and Crisa. Total Special charges $20,036 $6,411 $20,036 $9,408 Special charges classifications as shown in the Condensed Consolidated Statement of Operations: Cost of sales $2,543 $867 $867
Selling, general and administrative
expenses 1,347 1,347
Special charges 12,587 4,197 15,130 7,194
Interest expense 4,906 4,906
Total special charges $20,036 $6,411 $20,036 $9,408
In accordance with the SEC's Regulation G, the following tables 2, 3 and 4 provide non-GAAP measures used in the earnings release and the reconciliation to the most closely related Generally Accepted Accounting Principles (GAAP) measure. Libbey believes that providing supplemental non-GAAP financial information is useful to investors in understanding Libbey's core business and trends. In addition, it is the basis on which Libbey's management internally assesses performance and such non-GAAP measures are relevant to Libbey's determination of compliance with financial covenants included in its debt agreements. Although Libbey believes that the non-GAAP financial measures presented enhance investors' understanding of Libbey's business and performance, these non-GAAP measures should not be considered an alternative to GAAP. Table 2
Reconciliation of Non-GAAP Financial Measures for Special Charges
(Dollars in thousands, except per-share amounts)
Three months Six months ended
ended June 30, June 30,
2006 2005 2006 2005
(Loss) income from operations $(4,111) $2,492 $(1,051) $2,580
Special charges (excluding write-off of
finance fees) - pre-tax 15,130 6,411 15,130 9,408
Adjusted income from operations $11,019 $8,903 $14,079 $11,988
Reported net loss $(9,569) $(870) $(9,054) $(2,519)
Special charges - net of tax 13,424 4,295 13,424 6,303
Adjusted net income $3,855 $3,425 $4,370 $3,784
Diluted loss earnings per share:
Reported net loss $(0.68) $(0.06) $(0.64) $(0.18)
Special charges - net of tax 0.95 0.31 0.95 0.45
Adjusted net income per diluted share $0.27 $0.25 $0.31 $0.27
Table 3
Summary Consolidated Pro-forma Results
(Dollars in thousands)
The following reflects summary consolidated pro-forma results as if the
Crisa transaction closed on January 1, 2006.
Three months ended Six months ended
June 30, June 30,
2006 2005 2006 2005
Libbey
Net sales $149,418 $144,538 $284,284 $274,322
Earnings / (loss) before interest
and tax (EBIT) 10,125 2,171 14,646 3,114
Add: special charges - 6,411 - 9,408
Less: minority interest (5% for
Crisal) (46) (4) (142) (19)
Adjusted EBIT 10,079 8,578 14,504 12,503
Pro forma adjustments:
Equity (earnings) / loss (921) 752 (1,986) 198
Libbey adjusted pro forma EBIT 9,158 9,330 12,518 12,701
Depreciation & amortization
(adjusted for minority interest) 7,653 8,066 15,988 16,451
Libbey adjusted pro forma earnings
before interest tax depreciation
and amortization (EBITDA) $16,811 $17,396 $28,506 $29,152
Crisa
Net sales $48,660 $48,580 $96,226 $93,736
Earnings / (loss) before interest
and tax (EBIT) (10,854) 448 (6,311) 3,111
Add: special charges 15,130 - 15,130 -
Adjusted EBIT 4,276 448 8,819 3,111
Pro forma adjustments:
Pension expense 1,319 945 2,638 1,890
Profit sharing expense 780 934 1,560 1,868
Vitro corporate tax 643 615 1,286 1,230
Rent expense 235 235 470 470
Other (18) (52) (36) (104)
Total Crisa pro forma adjustments 2,959 2,677 5,918 5,354
Crisa adjusted pro forma EBIT 7,235 3,125 14,737 8,465
Depreciation & amortization 3,196 3,623 6,250 7,236
Crisa adjusted pro forma earnings
before interest tax depreciation
and amortization (EBITDA) $10,431 $6,748 $20,987 $15,701
Net sales adjustments and
eliminations (6,787) (7,886) (13,574) (15,610)
Libbey consolidated
Pro forma net sales $191,291 $185,232 $366,936 $352,448
Pro forma adjusted EBIT $16,393 $12,455 $27,255 $21,166
Pro forma adjusted EBITDA $27,242 $24,144 $49,493 $44,853
Table 4
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(Dollars in thousands)
Three months ended June 30,
2006 2005
Net loss $(9,569) $(870)
Add:
Interest expense, net 10,200 3,464
Provision for income taxes (4,720) (427)
Depreciation and amortization 8,206 8,066
EBITDA $4,117 $10,233
Add:
Special charges 15,130 6,411
Adjusted EBITDA $19,247 $16,644
Six months ended June 30,
2006 2005
Net loss $(9,054) $(2,519)
Add:
Interest expense, net 13,809 6,842
Provision for income taxes (4,419) (1,230)
Depreciation and amortization 16,541 16,451
EBITDA $16,877 $19,544
Add:
Special charges 15,130 9,408
Adjusted EBITDA $32,007 $28,952
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)
THREE MONTHS ENDED
June 30, June 30,
2006 (2) 2005
Net sales $157,998 $144,538
Freight billed to customers 926 481
Total revenues 158,924 145,019
Cost of sales (1) 130,752 117,963
Gross profit 28,172 27,056
Selling, general and administrative expenses(1) 19,696 20,367
Special charges (1) 12,587 4,197
(Loss) income from operations (4,111) 2,492
Equity earnings (loss) -- pretax 921 (752)
Other (loss) income (907) 431
(Loss) earnings before interest,
income taxes and minority
interest (4,097) 2,171
Interest expense (1) 10,200 3,464
Loss before income taxes and
minority interest (14,297) (1,293)
Provision for income taxes (4,720) (427)
Loss before minority interest (9,577) (866)
Minority interest 8 (4)
Net loss $(9,569) $(870)
Net loss per share:
Basic $(0.68) $(0.06)
Diluted $(0.68) $(0.06)
Weighted average shares:
Outstanding 14,124 13,869
Diluted 14,124 13,869
(1) Refer to Table 1 for special charges detail
(2) Crisa results for April 1, 2006 through June 15, 2006 are reflected
in equity earnings. Crisa results for June 16, 2006 through June 30,
2006 are included in the consolidated statement of operations above.
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(unaudited)
SIX MONTHS ENDED
June 30, June 30,
2006 (2) 2005
Net sales $292,864 $274,322
Freight billed to customers 1,383 978
Total revenues 294,247 275,300
Cost of sales (1) 243,929 227,205
Gross profit 50,318 48,095
Selling, general and administrative
expenses (1) 38,782 38,321
Special charges (1) 12,587 7,194
(Loss) income from operations (1,051) 2,580
Equity earnings (loss) -- pretax 1,986 (198)
Other (loss) income (511) 732
Earnings before interest, income
taxes and minority interest 424 3,114
Interest expense (1) 13,809 6,842
Loss before income taxes and
minority interest (13,385) (3,728)
Provision for income taxes (4,419) (1,230)
Loss before minority interest (8,966) (2,498)
Minority interest (88) (21)
Net loss $(9,054) $(2,519)
Net loss per share:
Basic $(0.64) $(0.18)
Diluted $(0.64) $(0.18)
Weighted average shares:
Outstanding 14,081 13,844
Diluted 14,081 13,844
(1) Refer to Table 1 for special charges detail
(2) Crisa results for April 1, 2006 through June 15, 2006 are reflected in
equity earnings. Crisa results for June 16, 2006 through June 30, 2006
are included in the consolidated statement of operations above.
LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31, June 30,
2006 (2) 2005 2005
(unaudited)(1) (unaudited)
ASSETS
Cash $26,661 $3,242 $2,540
Accounts receivable - net 112,195 79,042 72,637
Inventories - net 161,827 122,572 139,860
Deferred taxes 3,153 8,270 8,747
Other current assets 4,807 10,787 5,884
Total current assets 308,643 223,913 229,668
Other assets 51,785 33,483 37,912
Investments - 76,657 82,122
Goodwill and purchased intangibles -
net 200,624 61,603 66,671
Property, plant and equipment - net 295,153 200,128 209,477
Total assets $856,205 $595,784 $625,850
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $1,546 $11,475 $12,200
Accounts payable 59,447 47,020 42,219
Accrued liabilities 67,629 53,011 49,788
Deposit liability - - 16,623
Special charges reserve 3,507 2,002 4,491
Other current liabilities 7,184 7,131 2,475
Long-term debt due within one year 825 825 825
Total current liabilities 140,138 121,464 128,621
Long-term debt 463,800 249,379 246,653
Deferred taxes 431 - 12,147
Pension liability 73,994 54,760 42,068
Nonpension postretirement benefits 44,533 45,081 46,052
Other liabilities 24,835 5,461 7,263
Total liabilities 747,731 476,145 482,804
Minority interest 129 34 21
Total liabilities and minority
interest 747,860 476,179 482,825
Total shareholders' equity 108,345 119,605 143,025
Total liabilities and shareholders'
equity $856,205 $595,784 $625,850
(1) Crisa balances are consolidated in June 30, 2006 balances.
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
THREE MONTHS ENDED
June 30, 2006 June 30, 2005
Operating activities
Net loss $(9,569) $(870)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 8,206 8,066
Equity (earnings) loss - net of tax (546) 444
Minority interest (8) 4
Change in accounts receivable (2,722) 197
Change in inventories 1,134 (791)
Change in accounts payable (7,977) 3,748
Special charges 19,788 2,256
Pension & nonpension postretirement 4,564 1,972
Income taxes 2,802 (1,772)
Other operating activities (95) 9,388
Net cash provided by
operating activities 15,577 22,642
Investing activities
Additions to property, plant and
equipment (12,817) (8,709)
Business acquisition and related
costs - net of cash acquired (77,571) (42)
Net cash used in investing activities (90,388) (8,751)
Financing activities
Net borrowings 109,378 (12,185)
Debt financing fees (14,356) -
Dividends (352) (1,386)
Other 195 25
Net cash provided by (used in)
financing activities 94,865 (13,546)
Effect of exchange rate fluctuations
on cash 105 -
Increase in cash 20,159 345
Cash at beginning of period 6,502 2,195
Cash at end of period $26,661 $2,540
LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
SIX MONTHS ENDED
June 30, 2006 June 30, 2005
Operating activities
Net loss $(9,054) $(2,519)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 16,541 16,451
Equity (earnings) loss - net of tax (1,378) 29
Minority interest 88 21
Change in accounts receivable 4,516 (1,697)
Change in inventories 2,922 (4,511)
Change in accounts payable (15,312) (7,886)
Special charges 18,924 3,512
Pension & nonpension postretirement 6,203 3,559
Income taxes (5,244) (6,878)
Other operating activities 2,169 11,410
Net cash provided by operating activities 20,375 11,491
Investing activities
Additions to property, plant and equipment (34,256) (19,114)
Business acquisition and related
costs - net of cash acquired (77,571) (28,990)
Net cash used in investing activities (111,827) (48,104)
Financing activities
Net borrowings 129,630 35,593
Debt financing fees (14,356) -
Stock options exercised - 99
Dividends (703) (2,768)
Other 195 (15)
Net cash provided by financing activities 114,766 32,909
Effect of exchange rate fluctuations on cash 105 -
Increase (decrease) in cash 23,419 (3,704)
Cash at beginning of period 3,242 6,244
Cash at end of period $26,661 $2,540
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