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Libbey Inc. (NYSEMKT:LBY)

Q1 2010 Earnings Call Transcript

April 29, 2010 11:00 am ET

Executives

Ken Boerger – Vice President & Treasurer

John Meir – Chairman & CEO

Greg Geswein – Vice President & CFO

Analysts

Arnie Ursaner – CJS Securities

Reza Vahabzadeh – Barclays Capital

Per Orslan [ph] – Jefferies & Company

Richard Fullerton – RBF Capital

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Libbey's first quarter 2010 conference call. During today's recorded presentation all parties will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. (Operator Instructions) I would now hand the conference over to Mr. Ken Boerger. Please go ahead, sir.

Ken Boerger

Good morning and welcome to Libbey's first quarter 2010 conference call. I'm Ken Boerger, Libbey's Vice President and Treasurer, and with me on today's call are John Meier, Chairman and Chief Executive Officer, Greg Geswein, Vice President and Chief Financial Officer, and Scott Sellick, Vice President and Chief Accounting Officer.

I will start by reading the cautionary statement, and then I will turn the call over to John Meier for his opening comments. Material presented today includes forward-looking statements about Libbey, Inc. These statements only reflect Libbey's best assessment at this time and are subject to risk and uncertainties, including market conditions, competitive pressures, significant cost increases, and currency fluctuation. Investors should not place undue reliance on such statements.

For further information and other important factors potentially affecting performance, please refer to today's press release and the Company's most recent Form 10-K filed on March 15, 2010. With that, I will turn the call over to John Meier.

John Meier

Thanks, Ken. Good morning everyone, and welcome to Libbey's first quarter earnings call. We released our earnings this morning and I'd like to just touch on some key highlights.

Sales were $173.9 million, up 10.2%. Income from operations of $10.8 million was an improvement of $22.9 million over the prior year period. Adjusted EBITDA of $20.8 million was an improvement of $16.9 million, and finally debt reduction from year-end levels of just over $63 million.

As reported we had a very strong sales performance in key regions of the world and we see that continuing. Strong double digit increases were registered in Mexico, Europe, China, and in the USA and Canada in our core retail business. While we do not expect the robust double digit numbers as cited in Q1 for the totality of the year, we do expect meaningful growth.

Our products are performing on the shells of our retailers in the foodservice industry while still fragile is sequentially improving. Noted in the press release was the fact that our foodservice glass business in the USA and Canada lagged the prior year period by 4.5% truly the heavy storms of late January through mid-February clearly impacted key sections of the marketplace.

We are encouraged with how the month of March performed, and are the early part of Q2 is shaping up in Foodservice. Our customer base is showing signs of continued strength in our core businesses. Our retail and b-to-b businesses are expected to continue to build momentum as the year goes forward, and we are expecting a solid performance in those areas in North America.

At the investment community would know our domestic retail business is been on a strong course for four years running, and we are encouraged further by some of the industry signs we see in the USA foodservice business. Hotel occupancy is progressing in some of the more notable high end hotels are forecasting solid business improvement.

Order flow is improving across our distributor base giving us some further cause for positive outlook is the tonality of the business dialog with our future distributors plus some movement in key chain restaurants to reduce the discounting they had been using and also in upsizing some servicing win portions and getting away from the price-driven reduced portion mentality of the debts of the recession.

They are doing this because the market is open and receptive to it. On the hotel front, the most recent statistics from Smith Travel Research for the week ending April 17 continued to indicative pickup. In the top 25 USA markets, occupancy was up 5.5% to 60.4%. Revenue for available room was up 7% to $59.52, and average daily rate was up 1.6% to $98.67.

I do not mean to overstate things. To be clear we will be, we will continue to be a very deliberate and methodical improvement in foodservice, but we are seeing positive directional improvement. Rounding out foodservice even in Mexico, the comparables will improve. While that country is challenged in various ways as we all know, the burdens of last year's H1N1 virus and the collapsed hotel occupancy in Q2 of last year is not expected to be seen.

Accordingly, we are cautiously optimistic. Further to Mexico, our retail business and our OEM business is literally tracking expectations and we are encouraged for the balance of the year. Our broader international markets are also meeting expectations and we expect that to continue.

China and select international markets have started the year very strong for Libbey as noted in the press release. Yes, we are mindful of the issues in Europe involving the Euro Greek sovereign (inaudible) and the challenges now faced in Portugal. We will remain very vigilant on those topics.

We had a long way to go in 2010, but our businesses are positioned to meet our expectations. On the operations front, as we noted in the February year-end call, our factories are running at higher capacity utilization rates notably in the high 80% low. This is in contrast with the low to mid-70% level we experienced last year at this time as we buckled down in the midst of the deepest period in the recession.

As we see the future, we expect to run at the same high 80% level. The first quarter is one in which we traditionally build some inventory to accommodate the seasonal nature of some of our business. This year was no different. From the general outlook perspective, our refinancing of our debt in February following the debt exchange on our PIK notes last October.

It has been a pivotal accomplishment, and our maturities are extended as lower rates with reference to our senior notes. Having said that, we still have progress to make with reference to our debt, and as we've shared in the past and reaffirm today, our goal is to arrive at a leverage ratio between 2.5 and 3 times. Completing my debt comments, it is nice to see an interest expense number of more manageable proportions mainly $9.6 million for [ph] Q2.

The events of 2008 and early 2009 were punishing for Libbey and companies throughout the world. However, as I wrote my last month in my shareholders letter, this company learned a lot about itself and what we can do. These lessons will stay with us. I assure you, and should conditions in the world demand another radical set off measures, Libbey will do what it has to do once again.

At this point, we look to participate in a continuing and recovering economy, and our leading market shares and strategic customer alignments will service well. I know we are the leading 55 Blue Chip economies recently now project GDP growth for the USA to be 3.1% with their latest April projection, is up considerably from how they viewed 2010 just last October when they cited GDP growth of 2.5% for 2010.

Libbey believes we are on the road to a methodical recovery and we look forward to driving this business for the balance of 2010. And I'll now turn it over to Greg Geswein, our CFO for further cover on the quarter.

Greg Geswein

Thanks John and good morning everyone. I echo John's stock on how fleet we are with the results for the quarter and a significant improvement of the results over the prior year quarter. So despite a continuing challenge in the economy, we performed well exceeding our expectations.

Let me talk to a good start in 2010. Again the second quarter was in a row of double digits sales growth. I'll start with our first quarter 2010 income statement on a normalized or adjusted basis. We showed solid growth across all geographies again in the quarter. Net sales for the first quarter were $173.9 million, compared to the $157.9 million in the year ago quarter, up 10.2%.

Foreign currency translating from reflective weaker dollar contributed 2.5 points to the overall sales increase. Sales in the North American glass segment increased 10.9% to $120.6 million versus the $108.7 million in the first quarter of 2009. The sales increase is driven by 32.2% increase in the sales accretive products with about 7.5 points of that from a favorable currency impact, and a 12.8% increase to U.S. and Canadian retail customers, compared to the prior year period.

Sales in the U.S. and Canadian foodservice customers decreased approximately 4.5% as John mentioned during this severe winter weather in January and February in large part of United States. North American Other sales decreased 8.4% to $19.6 million compared to $21.4 million in the prior year quarter as a result of 33.4% drop of Syracuse China related to the closure of the Syracuse China facility in April 2009 and a decision to reduce the Syracuse China product offering.

As a result of the actions, huge declines from over 5000 to approximately 500 while Syracuse China exceeded their plan for the quarter, the impact in the quarter went to reduce Libbey's overall growth rate by approximately 1.5 point. Sales to World Tableware, Tableware customers increased 8.1% while Traex at a 5.6% reduction.

International segment sales increased 25.7% from $28.9 million to $36.3 million as a result of the 56.2% increase in sales at Libbey China to 23.4% increase at Royal Leerdam, and an increase of 16.2% at Crisal. Favorable currency was approximately six points in Europe. The normalized gross margin increased to 19.5% in the quarter versus 7.9% in the prior year quarter.

This is the higher first quarter gross margins since 2002, and normalized EBITDA was $20.8 million significantly above the prior year quarter at $3.9 million. The higher normalized EBITDA was driven by higher sales and higher capacity utilization as well as the more profitable mix at Syracuse China partially offset by higher selling, general and administrative expenses.

Normalized income from operations was $11.1 million, compared to a normalized loss from operations at $7.3 million in the prior year. We reported normalized earnings before interest and taxes of $10.4 million, compared to a loss of $7.1 million in the year ago quarter. Other expense increased $800,000 primarily as a result of translation losses during the current year.

Normalized EBIT was $8 million for North American glass, compared to our normalized EBIT loss of $6.1 million in the year ago quarter. North American Other reported normalized EBIT for the first quarter of 2010 at $3.5 million, compared to $1.3 million in the year ago quarter.

International segment reported a normalized EBIT loss of $1.1 million, compared to a normalized EBIT loss of $2.3 million in the first quarter of 2009, as a result of higher sales and higher capacity utilization.

John mentioned that interest expense decreased $7.6 million to $9.6 million, compared to $17.2 million in the year ago period as a result of the impacted debts exchange related to PIK note at the end of October and lower variable interest rates. In terms of natural gas and in Q1 we spent approximately $1.8 million than we did in the first quarter of 2009.

The cost per MMBtu it was lower than last year, but usually it was higher. We also have approximately 57% of total 2010 requirement hedge at this point. Normalized SG&A cost were $22.8 million for the quarter versus $19.9 million at the prior year due to higher payroll rise in menu of incentive plan and higher healthcare cost.

Pension and post retirement welfare expense excludes special charges of $5.5 million this quarter while equity compensation expense was approximately $0.5 million. The effective tax rate was 3.2% for the quarter, compared to 4.7% in the year ago quarter. Our effective tax rate continues to fluctuate as taxable events occur and exposures were revaluated. Effective tax rate was impacted by taxes paid in Mexico, valuation allowances, changes in mix of earnings with differing statutory rates, changes in tax fall and various tax plan structures.

Cash taxes in the quarter were $4.9 million. Libbey reported normalized net loss of $1 million or $0.05 per diluted share for the first quarter ended March 31 2010, compared with net loss of $22.9 million or $1.56 per diluted share in the prior year quarter. The reported first quarter 2010 net income was $55.4 million or $2.76 per diluted share.

This never included the $70.2 million gain, which represented a difference between the carrying value and the face value of PIK notes, which were redeemed in February this year as far as the overall refinancing. This gain is partially offset by the write-off of $13.4 million of amortized fees and discounts on the refinanced floating rates senior notes and the ABL credit facility plus the call premiums.

Looking at working capital liquidity, adjusted free cash flow in for the use of $20.9 million in the first quarter of 2010 as compared to source of $9.5 million in the first quarter of 2009. The primary contributor was higher working capital given the requirements to given the requirements of the business for the remainder of the year as a result of increased demand.

A more back-ended loading of free cash flow will follow the typical seasonality of the business. As in March 31, 2009 working capital defined as inventory in accounts receivable less accounts payable was $187 million, compared to $167.6 million at December 31 2009; working capital as a percentage of net sales of 24.5% in the first quarter of 2010 which compares to working capital of the percentage of net sales of 24.5% at March 31 2009.

This first quarter 2010 ratio is the best first quarter in the history of the company. We reported that we had available capacity at $51.2 million under the asset-backed loan credit facility as of March 31, 2009 and cash on hand of $18 million in addition to our no outstanding loan under the ABL facility.

CapEx was $4.1 million in the first quarter of 2010, compared with $4.9 million in the year ago period. Depreciation and amortization was $10.4 million in the first quarter of 2010 versus $11 million in the prior year. Some of that was $452 million at March 31 2010, compared to $515 million at December 31 2009. as John mentioned as we announced early in the quarter, we have completed the refinancing of the capital structure with the new $400 million, 10% of senior secured notes to 2015.

In current with the closing of the note, we entered into a new $110 million ABL facility to replace the existing facility which was scheduled to mature in December of this year Subsequent to the financing we entered into a swap for $100 million for the senior notes effectively converting the interest rates from fixed to floating.

The initial rate is at 7.55% and our overall effective interest rate is now below 9%. These transactions are on top of the debt exchange for the fixed notes that we concluded in October 2009. We believe that these transactions enhance our capital structure on and liquidity position by reducing leverage lowering the weighted average cost of capital and expanding maturities. Through this series of transactions and improved operating performance net leverage declined to approximately 8.4 times as of June of 30th to approximately 4.3 times as of March 31, 2010.

And our maturities were extended to 2014 on the notes in 2014 on ABL. As we have discussed a number of times our goal is to continue to de-leverage balance sheet. As been our practice for sometime we don't take guidance for Q2 and full year. However, we expect Q2 would be significantly improved over the future of last year.

For the full year, we expect CapEx to be in the low in the $30 million range for 2010. Pension and post-retirement welfare expense expected to be approximately $21 million or the in 2009 compared to the $16 million in 2008, which excludes the impact of the Syracuse closing, which was approximately $3 million. The pension funding levels will actually decrease from $30 million in 2008 to approximately $21 million in 2009, while the cash pension postretirement welfare contributions will be approximately $4 million less than expense.

And natural gas will be slightly less than the $53 million in 2009. To summarize we are extremely pleased with our improved results versus the prior year quarter and we have talked to a number of times in these conference calls about coming out of this downturn and substantially better position than when we entered into it, and I believe with the actions we've taken last year we have certainly accomplished that goal. Before taking your questions I would simply say that at Libbey we are ready for the economy discovery. We are confidence that a number of things to position ourselves or continued to set in the future.

And with that we will be happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions). The first question comes from Arnie Ursaner from CJS Securities. Please go ahead.

Arnie Ursaner – CJS Securities

Hi, good morning. Just wanted to ask you a little bit about your jumping inventories in Q1. You're operating at very high rates, which sometimes in Q1 you take some scheduled maintenance. So, could you kind of freshen up the operating rates in Q1, how we should think about that in Q2 and whether you believe your inventories are higher than levels you'd like them to be at this point?

Greg Geswein

Arnie we are operating, as we were in the fourth quarter we operating in the high 80% range. We expect that to continue for the rest of the years. So, as you mentioned we are operating at high levels and inventory is up in the first quarter but as you mentioned it's really the seasonality of the business, if you look in past history we typically build inventory in the first quarter because of the orders and so forth in the latter half of the year. We don't have enough capacity to fill those orders.

Arnie Ursaner – CJS Securities

Okay and your gross margin in Q1, you did mention, Greg, was the best it's been in years. I know you don't give formal guidance, but if you continue to operate in the high 80s operating rates, how should we think about your gross margin performance going forward?

Greg Geswein

Well again I think the first quarter is typically the weakest quarter and so therefore I think you should expect that yields to that gross margin continue to improve throughout the year.

Arnie Ursaner – CJS Securities

Okay. You also mentioned that Q1 seasonally is always you're least important quarter. You did almost $21 million of EBITDA in Q1; you mentioned Q2 should be substantially better year over year. If we think about your business occurring in the more normal seasonal pattern, how should we think about Q1 relative to the next several quarters? Simply put, it seems like we should be able to do a lot more than just multiply your Q1 trends by four to think about where your EBITDA ought to settle out for the year.

Greg Geswein

Yes. Well that's right Arnie; again Q1 back to history has always been significantly the last than the rest of the year. So, second quarter and now especially with Crisa it is pretty good quarter-to-quarter has always been good and fourth quarter is always fairly reasonable quarter as well. So, yeah I wouldn't take the first quarter most probably by four for this year.

John Meier

The other thing Arnie is that, this is John Meier, that I would say that it is my recollection and I don't have your number at the top of my head but I know there is some analyst reports out there that full year have us as of six weeks ago between a $100 million and $105 million.

So, to your point we obviously would not suggest multiplying $21 million by four to be indicative of the future at least those analysts and I am sure your model is along those lines too.

Arnie Ursaner – CJS Securities

John, the double-digit growth in foodservice is quite a bit better than you've had for quite a while. Other than the easy comparison, which was also negatively impacted by weather, as you think about the balance of the year, is mid-single digit, high-single digit growth in foodservice a reasonable expectation in your view given the positive trends?

John Meier

No small correction there Arnie, we did – the press release noted and my comments did we are actually off 4.5% in foodservice, the double-digit growth was in the retail in the USA.

Arnie Ursaner – CJS Securities

Right, I'm sorry, correct. And what is your view for the full year though for foodservice?

John Meier

What I said I cited some industry trends, I sited that they were higher hotel occupancy; I cited some improvements in the way the major change we are looking and how they are going to market to the customer. The bottom-line we believe we have a 58% market share and it will serve us well and that's as much as we will say about it.

Arnie Ursaner – CJS Securities

I'll jump back in queue. Thank you.

Operator

Thank you. The next question comes from Reza Vahabzadeh from Barclays Capital. Please go ahead.

Reza Vahabzadeh – Barclays Capital

Good morning and congrats.

Greg Geswein

Good morning Reza.

Reza Vahabzadeh – Barclays Capital

Greg, you were going through the FX contribution to sales growth a little bit too fast for me. I thought you said 6% contribution to the international sales?

Greg Geswein

Yeah that was Europe Reza, it was about 2.5 points overall and currently was, and then in terms of Syracuse, because we still had it operating in the first quarter of last year that was about 1.5 point drag on growth. So, we got about 2.5 points from currency and 1.5 in degradation from Syracuse.

Reza Vahabzadeh – Barclays Capital

Right. And then what was the contribution in the U.S. – in North America?

Greg Geswein

When you say contribution?

Reza Vahabzadeh – Barclays Capital

The contribution to sales growth, how much of it was currency as in the Canadian currency?

Greg Geswein

Not anything meaningful Reza.

Reza Vahabzadeh – Barclays Capital

Not meaningful, okay. And in terms of your share trends, I know the data is hard to get a hold of. But do you feel like your share trends were at least stable in the U.S. foodservice and retail channels?

John Meier

Absolutely.

Reza Vahabzadeh – Barclays Capital

Got it. And then as far as the international business, especially the European business, sales growth there seemed to be well ahead of what the economy there would otherwise indicate excluding the currency. What is going on that is allowing you to deliver higher sales in the European business?

John Meier

I think one of the things that we are enjoying Reza is our customer base in Europe has become increasingly acclimated with our broader full world wide product assortment. We're providing product into Europe not only from our factories in Europe but also from our factory in China, also from our factories in Mexico and the USA number one. Number two, I personally believe our service levels are better than some of our competitors and our good European customers are increasingly attuned to that kind of reliability and flexibility also.

Number three about two years ago we installed a full service distribution capability out of our distribution center in Gorinchem for products from principally the USA and some Chinese product. So, setting all the way its right there in the Netherlands waiting to be picked up as opposed to waiting for a 14 point container to ship from overseas.

So, I think those kinds of combinations have served us well and finally there is still some unrest with some of the competitors over there that have had some issues in terms of employment levels and some of the competitors and losing some people and some of the competitors in Eastern Europe as we commented previously are still going through some organization realignment coming out of Chapter 11 trying to and all those things I think play to our favor.

Reza Vahabzadeh – Barclays Capital

Got it. And then as it relates to the Mexican business, obviously solid growth there even including currency. Is that likely to actually accelerate as the economy over there eventually recovers?

John Meier

Again as I acknowledged in my comments the comparables in Mexico for Q2 are rather weak because of all the devastation that economy had last year with the H1N1 virus and the consequent lethargic hotel occupancy through the summer tourist season. So, I think A, our business is in solid position with our customer base and B, I think we are pleased with how we see our future opportunities for 2010 in Mexico.

Reza Vahabzadeh – Barclays Capital

Great. Thank you.

Operator

Thank you. The next question comes from Per Orslan [ph] from Jefferies and Company. Please go ahead.

Per Orslan – Jefferies & Company

Thanks. Good morning, everybody.

Greg Geswein

Good morning.

Per Orslan – Jefferies & Company

Following up I guess on really both Reza and Arnie's question, talking quickly about gross margin. Did foreign currency have any hand in the start expansion there or was this really all improved capacity utilization?

Greg Geswein

The improved capacity utilization was clearer a driver and some of the cost actions that we have been working on over the last year unchanged, so currency has rather small impact.

Per Orslan – Jefferies & Company

Okay. On the interest expense line looking forward, and realizing that maybe you don't guide to this specifically, but given the early in the year timing of the restructuring and your commentary around your all-in rate, is the 9.6% interest expense in the first quarter fairly reflective of a run rate we should assume looking ahead?

Ken Boerger

Per, I think one thing you need to look at is the in the first month of the year before the refinancing we were enjoying the benefit of 0% interest rate on some portion of our debt. So, it will be slightly higher than that, if you look at our total debt there is $400 million out there at 10%, a $100 million of which we swapped to a rate of about 7.5% at this time and then the balance of the debt is at an average interest in the 6% range. So, that will give you a number slightly north of $10 million when you do those calculations.

Greg Geswein

Yeah expect for the year you got to think about something in the kind of the low to mid-$40 million for interest expense.

Per Orslan – Jefferies & Company

Okay, that sounds right. Thank you very much and congratulations on the improved operations.

Greg Geswein

Thanks.

Operator

Thank you. Ladies and gentlemen. (Operator Instructions). The next question comes from Richard Fullerton from RBF Capital. Please go ahead.

Richard Fullerton – RBF Capital

Yes, hi, guys. I just wanted to clarify. Did you mention a CapEx number in the low 30s for this year?

Greg Geswein

Yes we did. Low to mid-30 for 2010.

Richard Fullerton – RBF Capital

Okay. And could you give us a break out maybe between regional CapEx, China, Mexico, U.S. and maybe a maintenance CapEx number?

Greg Geswein

Well, we don't break them out by geography but as we talked about before certainly 2009 was in the case of kind of what maintenance capital was $17 million. So, you got to think soften in kind of the $20 million and our range is kind of maintenance capital. I mean we can tell you out of number of years when furnace and machines need to be rebuild and that's kind of the maintenance capital that we kind of spent in 2009 and we don't know what is ahead in 2010.

Richard Fullerton – RBF Capital

Okay. Are there any major projects or upgrades coming this year or as you even look into 2011? Would 2011 maybe be a larger year relative to the past couple?

Greg Geswein

Yes. I would say well again we have again rebuilt every single year.

Richard Fullerton – RBF Capital

Right.

Greg Geswein

So, 2011 will probably be slightly higher than 2010.

Richard Fullerton – RBF Capital

Okay. And did you mention that natural gas was a favorable 1.8 like quarter to like quarter versus your?

Greg Geswein

Yeah we surely did.

Richard Fullerton – RBF Capital

Okay. And you're 50 some odd percent hedged for 2010, did I hear that?

Greg Geswein

57%.

Richard Fullerton – RBF Capital

Okay. Mid to high 80s factory utilization through this year, so no major planned outages or anything or retrofits or anything to happen in any given quarter this year?

Greg Geswein

What we said was, running in the high 80s first of all and secondly we always take some down time around the holidays for the end of the year. So and again that would be our expectations. But again those are in the numbers.

Richard Fullerton – RBF Capital

Okay. congratulations. Thank you.

Greg Geswein

Thank you.

Operator

Thank you. We have a follow-up question from Arnie Ursaner. Please go ahead.

Arnie Ursaner – CJS Securities

Hi, I don't expect you to answer this, but I've got to try. Your large shareholder, his shares have been registered; your ownership of shares is not core to his investment portfolio or profile. Just remind us what can occur under their holdings, when can they sell, what pieces of the – how do the warrants convert? Just update us, if you would, on what we should expect from this overhang?

Greg Geswein

Again it's up to the large holders to do with what they want but thoroughly they are in a position now that they can start selling their position and currently what they in terms of common stock is let's call it 1 million shares. Then they have as you mentioned the warrants and I don't think they will convert those warrants so they start selling down their position, 1 million shares and I could save the low 10% and so they are not going to do anything with the warrants until they sell their current position. But, you know, they could start selling at anytime. So, as you said they registered it and so forth and that really is up to them when they want to do that.

Arnie Ursaner – CJS Securities

But to clarify, they cannot exercise their warrants until they have sold a certain number of shares. Can they do it simultaneously? Meaning do a public offering, do their shares plus register the warrants at the same time and do a full 4 million or so, 5 million share blocks?

Greg Geswein

Yeah I think they could probably do their secondary offering, sure. They could do a public offering so they could go out.

Arnie Ursaner – CJS Securities

They could do that and simultaneously at some point in the future if they chose to?

Greg Geswein

Yes.

Arnie Ursaner – CJS Securities

Okay. Thank you.

Operator

Thank you. There appears to be no further question, sir. Please continue with any other points you wish to raise.

John Meier

Yeah on behalf of the company I would like to thank everyone. I would say we look to the second quarter as I touched on, we are pleased with the how things are positioning particularly what we see in our foodservice as March unfolded and as the better weather in April arrived. And we look forward to being opportunistic and all of our businesses but that's there is light at the end of the tunnel we believe. So, thanks for your time today and we will look forward to reporting on the second quarter in late July. Thank you very much.

Operator

Ladies and gentlemen and this conclude today's Libbey first quarter 2010 conference call. Thank you for participating. You may now disconnect.

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