Luxfer Announces Q3 2022 Financial Results

26 October 2022

Luxfer Announces Third Quarter 2022 Financial Results

MILWAUKEE, WI, October 25, 2022 -- Business Wire -- Luxfer Holdings PLC (NYSE: LXFR) (“Luxfer” or the “Company”), a global industrial company innovating niche applications in materials engineering, today announced financial results for the third quarter of 2022, ended September 25, 2022.

Third Quarter 2022 Consolidated Results

Net sales of $100.2 million increased $9.0 million from $91.2 million in the prior year period, including a $13.3 million benefit from cost pass-through to cover rising material inflation and a $0.6 million positive contribution from volume, partially offset by a foreign exchange impact of $4.9 million.

GAAP net income from continuing operations increased to $8.5 million, or $0.31 per diluted share, compared to $6.0 million, or $0.21 per diluted share, in the prior year period.

Adjusted net income measured $9.6 million, or $0.35 per diluted share, compared to $7.2 million, or $0.26 per diluted share, in the prior year period. Adjusted EBITDA of $16.1 million increased $2.3 million, or 16.7%, from $13.8 million in the prior year period. Foreign exchange reduced reported sales revenue by $4.9 million but contributed $0.8 million to Adjusted EBITDA. Supply chain constraints continued to limit volumes in some areas and inflationary pressures impacted costs.

“Our team again successfully navigated areas of strain in the supply chain to deliver solid third quarter results, and I thank our employees for their commitment to our customers,” said Andy Butcher, Chief Executive Officer. “Elektron drove our encouraging year-over-year expansion in net income and adjusted EBITDA, while both Gas Cylinders and Elektron worked to pass through rising costs. The business climate continues to evolve, and despite some signs of slowing in European end markets, our order books remain strong. With our flexible global footprint, we are confident in our ability to react to potential adverse macroeconomic developments brought on by tightening financial conditions while advancing our long-term growth objectives.”

Third Quarter 2022 Segment Results (all historical comparisons year-over-year; results exclude discontinued operations)

Elektron Segment

• Net sales of $56.8 million increased $11.2 million, or 24.6%, from $45.6 million, driven by favorable price impact to address material inflation as well as volume
• Adjusted EBITDA of $12.7 million increased $4.3 million, or 51.2%, from $8.4 million

Gas Cylinders Segment

• Net sales of $43.4 million decreased $2.2 million, or 4.8%, from $45.6 million, with cost pass through offset by foreign exchange headwinds of $2.6 million
• Adjusted EBITDA of $3.4 million decreased $2.0 million, or 37.0%, from $5.4 million

Capital Resources and Liquidity

Free cash flow measured $1.3 million in the third quarter of 2022, compared to $7.7 million in the prior year and $0.6 million the second quarter of 2022. During the quarter, the Company made $2.8 million in cash restructuring payments. The Company also paid $3.6 million in dividends, or $0.13 per ordinary share, and returned $3.2 million to shareholders in the form of share repurchases.

On September 25, 2022, net debt totaled $75.6 million, resulting in a net debt to EBITDA ratio of 1.2x.

2022 Guidance

Based on the macroeconomic outlook, supply chain conditions, and other factors, Luxfer currently expects full-year 2022 adjusted diluted earnings per share of $1.35 to $1.40, compared to prior guidance of $1.35 to $1.50.

Conference Call Information

Luxfer management will host a conference call at 8:30 a.m. U.S. Eastern Daylight Time (EDT) on Wednesday, October 26, 2022 to review the Company’s quarterly results. The conference call can be accessed by dialing (800) 245-3047 or (203) 518-9814 for participants outside the U.S., using the conference ID code LXFRQ322. The live webcast of Luxfer’s earnings conference call can be accessed at the following link: LXFR Q3 2022 Live Webcast.

A replay of the webcast and slides used in the presentation will be available in the Investor Relations section of the Luxfer website under Quarterly Reports and Presentations within two hours of call completion. A recording of the conference call will be available for replay two hours after the completion of the call and will remain accessible through November 9, 2022 at midnight EST. To access the recording, please dial (800) 934-4577 or (402) 220-1177 for participants outside the U.S.

Non-GAAP Financial Measures

Luxfer Holdings PLC prepares its financial statements using U.S. Generally Accepted Accounting Principles (GAAP). When a company discloses material information containing non-GAAP financial measures, SEC regulations require that the disclosure include a presentation of the most directly comparable GAAP measure and a reconciliation of the GAAP and non-GAAP financial measures. Management’s inclusion of non-GAAP financial measures in this release is intended to supplement, not replace, the presentation of the financial results in accordance with GAAP. Luxfer management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any period. Management also believes that these non-GAAP financial measures enhance the ability of investors to analyze the Company’s business trends and understand the Company’s performance. In addition, management may utilize non-GAAP financial measures as a guide in the Company’s forecasting, budgeting, and long-term planning process. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

Forward-Looking Statements

This release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Examples of such forward-looking statements include but are not limited to: (i) statements regarding the Company’s results of operations and financial condition; (ii) statements of plans, objectives or goals of the Company or its management, including those related to financing, products, or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “forecasts,” and “plans,” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. The Company cautions that several important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates, and intentions expressed in such forward-looking statements. These factors include, but are not limited to: (i) lower than expected future sales; (ii) increasing competitive industry pressures; (iii) general economic conditions or conditions affecting demand for the products and services it offers, both domestically and internationally, including as a result of post-Brexit regulation, being less favorable than expected; (iv) worldwide economic and business conditions and conditions in the industries in which the Company operates; (v) fluctuations in the cost of raw materials, utilities, and other inputs; (vi) currency fluctuations and hedging risks; (vii) the Company’s ability to protect its intellectual property; (viii) the significant amount of indebtedness it has incurred and may incur and the obligations to service such indebtedness and to comply with the covenants contained therein; and (ix) risks related to the impact of the global COVID-19 pandemic, such as the scope and duration of the outbreak, government actions, and restrictive measures implemented in response thereto, supply chain disruptions and other impacts to the business, and the Company’s ability to execute business continuity plans, as a result of the COVID-19 pandemic. The Company cautions that the foregoing list of important factors is not exhaustive. These factors are more fully discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the U.S. Securities and Exchange Commission on February 24, 2022. When relying on forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and events. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update or revise any of them, whether because of new information, future events, or otherwise.

About Luxfer Holdings PLC

Luxfer is a global industrial company innovating niche applications in materials engineering. Using its broad array of proprietary technologies, Luxfer focuses on value creation, customer satisfaction, and demanding applications where technical know-how and manufacturing expertise combine to deliver a superior product. Luxfer’s high-performance materials, components, and high-pressure gas containment devices are used in defense and emergency response, clean energy, healthcare, transportation, and general industrial applications. For more information, please visit www.luxfer.com.

Luxfer is listed on the New York Stock Exchange and its ordinary shares trade under the symbol LXFR.

Contact Information

Michael Gaiden

Vice President of Investor Relations and Business Development

(414) 982-1663

Michael.Gaiden@Luxfer.com

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)