Third Quarter 2022 Highlights (all historical comparisons
year-over-year; results exclude discontinued operations)
- Net sales of $100.2 million increased $9.0 million or 9.9%,
primarily driven by pass-through of inflation
- GAAP diluted EPS from continuing operations of $0.31 increased
$0.10
- Adjusted diluted EPS of $0.35 increased $0.09
- Adjusted EBITDA of $16.1 million increased $2.3 million or
16.7%
- Narrowing 2022 adjusted diluted EPS guidance to a range of
$1.35 to $1.40
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.
LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
Third Quarter
Year-to-date
In millions, except share and
per-share data
2022
2021
2022
2021
Net sales
$
100.2
$
91.2
$
306.7
$
275.4
Cost of goods sold
(77.0
)
(70.1
)
(233.6
)
(203.2
)
Gross profit
23.2
21.1
73.1
72.2
Selling, general and administrative
expenses
(10.3
)
(10.6
)
(32.5
)
(33.9
)
Research and development
(1.0
)
(1.3
)
(3.5
)
(2.9
)
Restructuring charges
(0.3
)
(0.5
)
(2.0
)
(2.1
)
Acquisition and disposal related costs
—
(0.6
)
(0.3
)
(1.5
)
Other charges
—
—
—
(1.1
)
Operating income
11.6
8.1
34.8
30.7
Interest expense
(1.0
)
(0.8
)
(2.7
)
(2.4
)
Defined benefit pension credit
0.2
0.6
0.9
1.8
Income before income taxes
10.8
7.9
33.0
30.1
Provision for income taxes
(2.3
)
(1.9
)
(7.2
)
(3.6
)
Net income from continuing
operations
8.5
6.0
25.8
26.5
Net loss from discontinued operations, net
of tax
(0.5
)
(0.7
)
(0.9
)
(2.8
)
(Loss) / gain on disposition of
discontinued operations, net of tax
—
(0.5
)
—
6.6
Net (loss) / income from discontinued
operations
$
(0.5
)
$
(1.2
)
$
(0.9
)
$
3.8
Net income
$
8.0
$
4.8
$
24.9
$
30.3
Earnings / (loss) per share1
Basic from continuing operations
$
0.31
$
0.22
$
0.94
$
0.96
Basic from discontinued operations2
$
(0.02
)
$
(0.04
)
$
(0.03
)
$
0.14
Basic
$
0.29
$
0.17
$
0.91
$
1.09
Diluted from continuing operations
$
0.31
$
0.21
$
0.93
$
0.94
Diluted from discontinued operations2
$
(0.02
)
$
(0.04
)
$
(0.03
)
$
0.14
Diluted
$
0.29
$
0.17
$
0.90
$
1.08
Weighted average ordinary shares
outstanding
Basic
27,295,862
27,722,472
27,403,844
27,718,874
Diluted
27,525,314
28,033,732
27,652,886
28,072,155
1 The calculation of earnings per share is
performed separately for continuing and discontinued operations. As
a result, the sum of the two in any particular period may not equal
the earnings-per-share amount in total.
2 The loss per share for discontinued
operations in the Third Quarter of 2022 and 2021 and year-to-date
of 2022 has not been diluted, since the incremental shares included
in the weighted-average number of shares outstanding would have
been anti-dilutive.
LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
September 25,
December 31,
In millions, except share and
per-share data
2022
2021
Current assets
Cash and cash equivalents
$
11.2
$
6.2
Restricted cash
0.3
0.2
Accounts and other receivables, net of
allowances of $0.7 and $0.8, respectively
66.1
57.8
Inventories
111.6
90.5
Current assets held-for-sale
9.1
8.5
Total current assets
$
198.3
$
163.2
Non-current assets
Property, plant and equipment, net
$
75.0
$
87.5
Right-of-use assets from operating
leases
22.9
12.6
Goodwill
62.5
69.7
Intangibles, net
12.4
13.7
Deferred tax assets
7.1
8.0
Investments and loans to joint ventures
and other affiliates
0.3
0.4
Pensions and other retirement benefits
13.9
13.7
Total assets
$
392.4
$
368.8
Current liabilities
Short-term debt
$
25.0
$
—
Accounts payable
$
27.9
$
31.7
Accrued liabilities
32.6
28.2
Taxes on income
7.8
3.0
Current liabilities held-for-sale
4.9
1.4
Other current liabilities
12.6
19.6
Total current liabilities
$
110.8
$
83.9
Non-current liabilities
Long-term debt
$
61.8
$
59.6
Pensions and other retirement benefits
2.3
1.9
Deferred tax liabilities
2.7
2.7
Other non-current liabilities
19.5
11.6
Total liabilities
$
197.1
$
159.7
Shareholders' equity
Ordinary shares of £0.50 par value;
authorized 40,000,000 shares for 2022 and 2021; issued and
outstanding 28,944,000 for 2022 and 2021
$
26.5
$
26.5
Deferred shares of £0.0001 par value;
authorized issued and outstanding 761,835,318,444 shares for
2021
—
149.9
Additional paid-in capital
220.6
70.9
Treasury shares
(16.2
)
(9.6
)
Own shares held by ESOP
(0.9
)
(1.1
)
Retained earnings
121.8
107.5
Accumulated other comprehensive loss
(156.5
)
(135.0
)
Total shareholders' equity
$
195.3
$
209.1
Total liabilities and shareholders'
equity
$
392.4
$
368.8
LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
Year-to-date
In millions
2022
2021
Operating activities
Net income
$
24.9
$
30.3
Net loss / (income) from discontinued
operations
0.9
(3.8
)
Net income from continuing operations
$
25.8
$
26.5
Adjustments to reconcile net income to net
cash (used) / provided by operating activities
Depreciation
9.8
10.5
Amortization of purchased intangible
assets
0.6
0.7
Amortization of debt issuance costs
0.4
0.3
Share-based compensation charges
1.8
2.2
Deferred income taxes
0.5
(2.2
)
Gain on disposal of property, plant and
equipment
(0.2
)
—
Defined benefit pension credit
(0.9
)
(1.8
)
Defined benefit pension contributions
—
(4.6
)
Changes in assets and liabilities
Accounts and other receivables
(13.6
)
(10.2
)
Inventories
(29.6
)
(5.4
)
Current assets held-for-sale
(3.8
)
(1.6
)
Other current assets
—
0.4
Accounts payable
3.5
9.6
Accrued liabilities
5.5
8.6
Current liabilities held-for-sale
3.5
(1.0
)
Other current liabilities
(1.9
)
0.7
Other non-current assets and
liabilities
(4.6
)
1.4
Net cash (used) / provided by operating
activities - continuing
(3.2
)
34.1
Net cash provided by operating activities
- discontinued
—
—
Net cash (used) / provided by operating
activities
$
(3.2
)
$
34.1
Investing activities
Capital expenditures
$
(5.2
)
$
(5.6
)
Proceeds from sale of property, plant and
equipment
3.7
—
Proceeds from sale of businesses and
other
—
23.7
Acquisitions, net of cash acquired
—
(19.3
)
Net cash used by investing activities -
continuing
(1.5
)
(1.2
)
Net cash used by investing activities -
discontinued
—
—
Net cash used by investing
activities
$
(1.5
)
$
(1.2
)
Financing activities
Net drawdown / (repayment) of long-term
borrowings
$
31.7
$
(4.4
)
Repurchase of deferred shares
(0.1
)
—
Repurchase of own shares
(6.9
)
(2.8
)
Share-based compensation cash paid
(1.4
)
(1.9
)
Dividends paid
(10.6
)
(10.2
)
Net cash provided / (used) by financing
activities
$
12.7
$
(19.3
)
Effect of exchange rate changes on cash
and cash equivalents
(2.9
)
0.1
Net increase
$
5.1
$
13.7
Cash, cash equivalents and restricted
cash; beginning of year
6.4
1.5
Cash, cash equivalents and restricted
cash; end of the Third Quarter
11.5
15.2
Supplemental cash flow
information:
Interest payments
$
2.8
$
2.5
Income tax payments, net
2.2
5.2
LUXFER HOLDINGS PLC
SUPPLEMENTAL
INFORMATION
SEGMENT INFORMATION
(UNAUDITED)
Net sales
Adjusted EBITDA
Third Quarter
Year-to-date
Third Quarter
Year-to-date
In millions
2022
2021
2022
2021
2022
2021
2022
2021
Gas Cylinders segment
$
43.4
$
45.6
$
131.9
$
128.3
$
3.4
$
5.4
$
9.8
$
16.7
Elektron segment
56.8
45.6
174.8
147.1
12.7
8.4
39.3
32.1
Consolidated
$
100.2
$
91.2
$
306.7
$
275.4
$
16.1
$
13.8
$
49.1
$
48.8
Depreciation and
amortization
Restructuring charges
Third Quarter
Year-to-date
Third Quarter
Year-to-date
In millions
2022
2021
2022
2021
2022
2021
2022
2021
Gas Cylinders segment
$
1.2
$
1.4
$
3.8
$
3.9
$
0.3
$
0.5
$
1.8
$
1.1
Elektron segment
2.1
2.4
6.6
7.3
—
—
0.2
1.0
Consolidated
$
3.3
$
3.8
$
10.4
$
11.2
$
0.3
$
0.5
$
2.0
$
2.1
ADJUSTED NET INCOME AND
ADJUSTED EARNINGS PER SHARE
(UNAUDITED)
Third Quarter
Year-to-date
In millions except per share
data
2022
2021
2022
2021
Net income from continuing operations
$
8.5
$
6.0
$
25.8
$
26.5
Accounting charges relating to
acquisitions and disposals of businesses:
Amortization on acquired intangibles
0.2
0.3
0.6
0.7
Acquisition and disposal related costs
—
0.6
0.3
1.5
Defined benefit pension credit
(0.2
)
(0.6
)
(0.9
)
(1.8
)
Restructuring charges
0.3
0.5
2.0
2.1
Other charges
—
—
—
1.1
Share-based compensation charges
0.9
0.8
1.8
2.2
Other non-recurring tax items1
—
—
—
(2.2
)
Income tax on adjusted items
(0.1
)
(0.4
)
(0.7
)
(1.8
)
Adjusted net income
$
9.6
$
7.2
$
28.9
$
28.3
Adjusted earnings per ordinary
share
Diluted earnings per ordinary share
$
0.31
$
0.21
$
0.93
$
0.94
Impact of adjusted items
0.04
0.05
0.12
0.07
Adjusted diluted earnings per ordinary
share2
$
0.35
$
0.26
$
1.05
$
1.01
1 Other non-recurring tax items represents
the impact of the enacted U.K. tax rate change (from 19% to 25%
with effect from April 2023) on deferred tax assets related to our
U.K. defined benefit pension plan.
2 For the purpose of calculating diluted
earnings per share, the weighted average number of ordinary shares
outstanding during the financial year has been adjusted for the
dilutive effects of all potential ordinary shares and share options
granted to employees, except where there is a loss in the period,
then no adjustment is made.
LUXFER HOLDINGS PLC
ADJUSTED EBITDA
(UNAUDITED)
Third Quarter
Year-to-date
In millions
2022
2021
2022
2021
Adjusted net income
$
9.6
$
7.2
$
28.9
$
28.3
Add back:
Other non-recurring tax items
—
—
—
2.2
Income tax on adjusted items
0.1
0.4
0.7
1.8
Provision for income taxes
2.3
1.9
7.2
3.6
Net finance costs
1.0
0.8
2.7
2.4
Gain on disposal of PPE
—
—
(0.2
)
—
Adjusted EBITA
$
13.0
$
10.3
$
39.3
$
38.3
Depreciation
3.1
3.5
9.8
10.5
Adjusted EBITDA
$
16.1
$
13.8
$
49.1
$
48.8
ADJUSTED EFFECTIVE TAX
RATE
(UNAUDITED)
Third Quarter
Year-to-date
In millions
2022
2021
2022
2021
Adjusted net income
$
9.6
$
7.2
$
28.9
$
28.3
Add back:
Other non-recurring tax items
—
2.2
—
2.2
Income tax on adjusted items
0.1
0.4
0.7
1.8
Provision for income taxes
2.3
1.9
7.2
3.6
Adjusted income before income taxes
$
12.0
$
11.7
$
36.8
$
35.9
Adjusted provision for income taxes
2.4
4.5
7.9
7.6
Adjusted effective tax rate
20.0
%
38.5
%
21.5
%
21.2
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221025006005/en/
Michael Gaiden Vice President of Investor Relations and Business
Development (414) 982-1663 Michael.Gaiden@Luxfer.com
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