Glassmaker at work to clear plate of debt

JUST NINE months ago, Toledo-based glassmaker Libbey Inc. was crowing about its increased market share, its impressive global footprint, and a 32-month run of favorable financial results.

Libbey’s glass was more than half-full — it was positively brimming.

But last fall’s worldwide economic meltdown shattered the company’s plans like an operatic high “C” through a lead crystal wine glass.

And now Toledo’s oldest manufacturer finds itself with a mountain of debt, hoarding cash like crazy, and working to return its hammered stock to the perch it occupied just a year ago.

Autumn of 2008, according to Libbey Chairman and Chief Executive John Meier, “was, during my 39 years with the company, the most challenging four-month period I have ever been a part of.”

In just the last nine months:

• The firm’s all-important food service business — supplying glasses, plates, and silverware to restaurants and hotels around the world and making up the largest share of the company’s annual income — dropped 25 percent. It has since recovered to early 2008 levels.

• Facing a cash crunch and the unexpected collapse of its restaurant business, the company chose in December to shutter its 137-year-old Syracuse China plant in upstate New York, cutting 275 jobs there, and a distribution center in California, eliminating 300 more jobs. It also cut an additional 500 jobs overseas.

• Its stock went from trading at $10.09 a share on Sept. 3 to just 50 cents a share on April 17, its last day of trading on the New York Stock Exchange before being delisted. The stock now trades over the counter under the symbol LYBI.OB, and closed Friday at $2.06.

• Libbey suspended its 10 cents-a-share quarterly dividend in February for the first time since it was spun off from Owens-Illinois Inc. and offered stock to the public in 1993. It also cut the pay of hundreds of nonunionized salaried employees by 5 percent and of its top executives by 7.5 percent.

These aggressive management actions were taken primarily to conserve cash during unsteady, if not unnerving, times, Mr. Meier said. But management also is ever mindful of the mountain of debt — some $545 million — that hangs over the company.