Fourth Quarter 2022 Highlights (all historical
comparisons year-over-year; results exclude discontinued
operations)
- Net sales of $116.7 million increased $18.0 million or
18.2%
- GAAP diluted EPS from continuing operations of $0.23 increased
$0.10
- Adjusted diluted EPS of $0.31 increased $0.03
- Adjusted EBITDA of $14.0 million decreased $0.6 million or
4.1%
Full Year 2022 Highlights (all historical comparisons
year-over-year; results exclude discontinued operations)
- Net sales of $423.4 million increased $49.3 million or
13.2%
- GAAP diluted EPS from continuing operations of $1.16 increased
$0.09
- Adjusted diluted EPS of $1.36 increased $0.07
- Adjusted EBITDA of $63.1 million decreased $0.3 million or
0.5%
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 fourth quarter and full year 2022, ended December
31, 2022.
Fourth Quarter 2022 Consolidated Results
Net sales of $116.7 million increased $18.0 million from $98.7
million in the prior year period, including a $13.0 million benefit
from cost pass-through to cover rising material inflation and a
$9.0 million positive contribution from volume and mix, partially
offset by a foreign exchange impact of $4.0 million.
GAAP net income from continuing operations increased to $6.2
million, or $0.23 per diluted share, compared to $3.5 million, or
$0.13 per diluted share, in the prior year period.
Adjusted net income measured $8.5 million, or $0.31 per diluted
share, compared to $7.9 million, or $0.28 per diluted share, in the
prior year period. Adjusted EBITDA of $14.0 million decreased $0.6
million, or 4.1%, from $14.6 million in the prior year period.
Foreign exchange reduced net sales by $4.0 million but contributed
$0.5 million to Adjusted EBITDA. Supply chain constraints continued
to limit volumes in some areas and inflationary pressures impacted
costs.
“Our fourth quarter capped a year of strong execution by our
team, successfully navigating supply chain disruption and passing
through unprecedented levels of cost inflation,” said Andy Butcher,
Chief Executive Officer. “Both Gas Cylinders and Elektron realized
the largest sales volume increases of the year during the fourth
quarter, complemented by an excellent free cash flow result. We are
especially pleased with our revenue performance which increases
visibility on long-term growth, while remaining conscious of
short-term weakness in certain industrial and consumer
markets.”
Full Year 2022 Consolidated Results
Net sales of $423.4 million increased $49.3 million from $371.4
million in the prior year, including a $48.7 million benefit from
cost pass-through to cover rising material inflation, a $7.4
million positive contribution from volume and mix, and a $7.1
million benefit from the SCI acquisition, partially offset by a
foreign exchange impact of $13.9 million.
GAAP net income from continuing operations increased to $32.0
million, or $1.16 per diluted share, compared to $30.0 million, or
$1.07 per diluted share, in the prior year.
Adjusted net income measured $37.4 million, or $1.36 per diluted
share, compared to $36.2 million, or $1.29 per diluted share, in
the prior year. Adjusted EBITDA of $63.1 million decreased $0.3
million, or 0.5%, from $63.4 million in the prior year. Foreign
exchange reduced reported net sales by $13.9 million but
contributed $1.7 million to Adjusted EBITDA.
Fourth Quarter 2022 Segment Results (all historical
comparisons year-over-year; results exclude discontinued
operations)
Elektron Segment
- Net sales of $64.9 million increased $16.2 million, or 33.3%,
from $48.7 million, driven by favorable price impact to address
material inflation as well as volume/mix
- Adjusted EBITDA of $11.0 million increased $2.4 million, or
27.9%, from $8.6 million
Gas Cylinders Segment
- Net sales of $51.8 million increased $1.8 million, or 3.6%,
from $50.0 million, with increased volume/mix and cost pass-through
partially offset by foreign exchange headwinds of $2.8 million
- Adjusted EBITDA of $3.0 million decreased $3.0 million, or
50.0%, from $6.0 million due to material inflation
Capital Resources and Liquidity
Free cash flow measured $15.9 million in the fourth quarter and
$7.5 million for the full year 2022, compared to $16.9 million for
the full year 2021. During the quarter, the Company made $0.3
million in cash restructuring payments. The Company also paid $3.6
million in dividends, or $0.13 per ordinary share, and returned
$4.2 million to shareholders in the form of share repurchases
during the quarter.
On December 31, 2022, net debt totaled $68.6 million, resulting
in a net debt to EBITDA ratio of 1.1x.
2023 Guidance
Based on the current outlook for our end markets and supply
chain conditions, as well as anticipated increases in legal,
interest, and tax expense, Luxfer currently expects full year 2023
revenue growth of 6% to 10% and adjusted diluted earnings per share
of $1.15 to $1.35.
Pursuing a strategy of profitable growth, as well as margin
improvement, Luxfer’s goal remains to deliver adjusted diluted
earnings per share of $2.00+ in 2025.
Conference Call Information
Luxfer management will host a conference call at 8:30 a.m. U.S.
Eastern Standard Time (EST) on Wednesday, March 1, 2023 to review
the Company’s quarterly results. The conference call can be
accessed by dialing (800) 579-2543 or (203) 518-9708 for
participants outside the U.S., using the conference ID code
LXFRQ422. The live webcast of Luxfer’s earnings conference call can
be accessed at the following link: LXFR 4Q 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 March 15, 2023 at midnight EDT. To
access the recording, please dial (800) 839-9886 or (402) 220-2191
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 the Company 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.
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 such statement, 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
CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
Fourth Quarter
Years ended
In millions, except share and per-share
data
2022
2021
2022
2021
Net sales
$
116.7
$
98.7
$
423.4
$
374.1
Cost of sales
(94.8
)
(74.9
)
(328.4
)
(278.1
)
Gross profit
21.9
23.8
95.0
96.0
Selling, general and administrative
expenses
(10.6
)
(13.4
)
(43.1
)
(47.3
)
Research and development
(1.4
)
(1.0
)
(4.9
)
(3.9
)
Restructuring charges
0.1
(4.1
)
(1.9
)
(6.2
)
Acquisitions and disposals costs
—
—
(0.3
)
(1.5
)
Other income
—
0.2
—
0.2
Other charges
—
—
—
(1.1
)
Operating income
10.0
5.5
44.8
36.2
Interest expense
(1.2
)
(0.7
)
(3.9
)
(3.1
)
Defined benefit pension credit
(0.8
)
0.5
0.1
2.3
Income before income taxes and equity
in net income of affiliates
8.0
5.3
41.0
35.4
Provision for income taxes
(1.8
)
(1.8
)
(9.0
)
(5.4
)
Net income from continuing
operations
6.2
3.5
32.0
30.0
Net gain on disposition of discontinued
operations
—
—
—
6.6
Net loss from discontinued operations
(4.2
)
(3.9
)
(5.1
)
(6.7
)
Net income
$
2.0
$
(0.4
)
$
26.9
$
29.9
Earnings / (loss) per share(1)
Basic from continuing operations
0.23
0.13
1.17
1.08
Basic from discontinued operations
(0.16
)
(0.14
)
(0.19
)
—
Basic
$
0.07
$
(0.01
)
$
0.99
$
1.08
Diluted from continuing operations
0.23
0.13
1.16
1.07
Diluted from discontinued operations
(0.15
)
(0.14
)
(0.19
)
—
Diluted
$
0.07
$
(0.01
)
$
0.98
$
1.07
Weighted average ordinary shares
outstanding
Basic
27,030,516
27,644,105
27,304,847
27,698,691
Diluted
27,482,347
27,929,690
27,541,202
28,032,506
(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.
LUXFER HOLDINGS PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31,
In millions, except share and per-share
data
2022
2021
Current assets
Cash and cash equivalents
$
12.6
$
6.2
Restricted cash
0.3
0.2
Accounts and other receivables, net of
allowances of $0.4 and $0.8, respectively
67.8
57.8
Inventories
111.1
90.5
Current assets held-for-sale
9.3
8.5
Total current assets
201.1
163.2
Non-current assets
Property, plant and equipment, net
77.7
87.5
Right-of-use assets from operating
leases
19.8
12.6
Goodwill
65.6
69.7
Intangibles, net
12.5
13.7
Deferred tax assets
3.0
8.0
Pensions and other retirement benefits
27.0
13.7
Investments and loans to joint ventures
and other affiliates
0.4
0.4
Total assets
$
407.1
$
368.8
Current liabilities
Current maturities of long-term debt and
short-term borrowings
$
25.0
$
—
Accounts payable
37.8
31.7
Accrued liabilities
29.4
28.2
Taxes on income
1.8
3.0
Current liabilities held-for-sale
5.0
1.4
Other current liabilities
11.2
19.6
Total current liabilities
110.2
83.9
Non-current liabilities
Long-term debt
56.2
59.6
Pensions and other retirement benefits
4.5
1.9
Deferred tax liabilities
9.9
2.7
Other non-current liabilities
19.0
11.6
Total liabilities
$
199.8
$
159.7
Commitments and contingencies
Shareholders' equity
Ordinary shares of £0.50 par value;
authorized 40,000,000 shares for 2022 and 2021; issued and
outstanding 28,944,000 shares 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
221.4
70.9
Treasury shares
(20.4
)
(9.6
)
Company shares held by ESOP
(1.0
)
(1.1
)
Retained earnings
120.2
107.5
Accumulated other comprehensive loss
(139.4
)
(135.0
)
Total shareholders' equity
$
207.3
$
209.1
Total liabilities and shareholders'
equity
$
407.1
$
368.8
LUXFER HOLDINGS PLC
CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
Years Ended December
31,
In millions
2022
2021
Operating activities
Net income
$
26.9
$
29.9
Net loss from discontinued operations
5.1
0.1
Net income from continuing operations
32.0
30.0
Adjustments to reconcile net income from
continuing operations to net cash provided by operating
activities
Depreciation
12.9
14.7
Amortization of purchased intangible
assets
0.7
0.9
Amortization of debt issuance costs
0.5
0.5
Share-based compensation charge
2.5
2.8
Deferred income taxes
8.7
(1.6
)
Loss on disposal of business
1.0
—
Defined benefit pension expense /
(credit)
0.1
(1.9
)
Defined benefit pension contributions
(0.4
)
(18.2
)
Changes in assets and liabilities, net of
effects of business acquisitions
Accounts and notes receivable
(27.2
)
(9.8
)
Inventories
(25.0
)
(15.3
)
Current assets held-for-sale
(3.3
)
(2.9
)
Other current assets
—
1.3
Accounts payable
21.3
11.4
Accrued liabilities
2.4
7.5
Current liabilities held-for-sale
0.9
(1.8
)
Other current liabilities
(8.8
)
8.4
Other non-current assets and
liabilities
(2.5
)
—
Net cash provided by operating activities
- continuing
15.8
26.0
Net cash provided by operating activities
- discontinued
0.1
0.1
Net cash provided by operating
activities
15.9
26.1
Investing activities
Capital expenditures
(8.3
)
(9.1
)
Proceeds from sale of property, plant and
equipment
3.7
—
Proceeds from sale of businesses
—
23.4
Settlements from sale of businesses
(1.0
)
—
Acquisitions, net of cash acquired
—
(19.3
)
Net cash used for investing activities -
continuing
(5.6
)
(5.0
)
Net cash used for investing activities -
discontinued
(0.1
)
(0.1
)
Net cash used for investing
activities
(5.7
)
(5.1
)
Financing activities
Net drawdowns / (repayments) of long-term
borrowings
24.8
6.4
Debt issuance costs
—
(1.0
)
Dividends paid
(14.2
)
(13.6
)
Share-based compensation cash paid
(1.4
)
(1.5
)
Repurchase of deferred shares
(0.1
)
—
Repurchase of ordinary shares
(11.1
)
(6.4
)
Net cash used for financing
activities
(2.0
)
(16.1
)
Effect of exchange rate changes on cash
and cash equivalents
(1.7
)
—
Net increase / (decrease)
6.5
4.9
Cash, cash equivalents and restricted
cash; beginning of year
6.4
1.5
Cash, cash equivalents and restricted
cash; end of year
$
12.9
$
6.4
Supplemental cash flow
information:
Interest payments
$
4.0
$
3.2
Income tax payments
0.6
5.3
LUXFER HOLDINGS PLC
SUPPLEMENTAL
INFORMATION
SEGMENT INFORMATION
(UNAUDITED)
Net sales
Adjusted EBITDA
Fourth Quarter
Year-to-date
Fourth Quarter
Year-to-date
In millions
2022
2021
2022
2021
2022
2021
2022
2021
Gas Cylinders segment
$
51.8
$
50.0
$
183.7
$
178.3
$
3.0
$
6.0
$
12.8
$
22.7
Elektron segment
64.9
48.7
239.7
195.8
11.0
8.6
50.3
40.7
Consolidated
$
116.7
$
98.7
$
423.4
$
374.1
$
14.0
$
14.6
$
63.1
$
63.4
Depreciation and
amortization
Restructuring charges
Fourth Quarter
Year-to-date
Fourth Quarter
Year-to-date
In millions
2022
2021
2022
2021
2022
2021
2022
2021
Gas Cylinders segment
$
1.0
$
1.9
$
4.8
$
5.8
$
(0.1
)
$
4.2
$
1.7
$
5.3
Elektron segment
2.2
2.5
8.8
9.8
—
(0.1
)
0.2
0.9
Consolidated
$
3.2
$
4.4
$
13.6
$
15.6
$
(0.1
)
$
4.1
$
1.9
$
6.2
ADJUSTED NET INCOME AND
ADJUSTED EARNINGS PER SHARE (UNAUDITED)
Fourth Quarter
Year-to-date
In millions except per share data
2022
2021
2022
2021
Net income from continuing operations
$
6.2
$
3.5
$
32.0
$
30.0
Accounting charges relating to
acquisitions and disposals of businesses:
Amortization on acquired intangibles
0.1
0.2
0.7
0.9
Acquisition and disposal related (gains) /
costs
—
—
0.3
1.5
Defined benefit pension credit
0.8
(0.5
)
(0.1
)
(2.3
)
Restructuring charges
(0.1
)
4.1
1.9
6.2
Other charges
—
—
—
1.1
Share-based compensation charges
0.7
0.6
2.5
2.8
Other non-recurring tax items
—
0.3
—
(1.9
)
Income tax on adjusted items
0.8
(0.3
)
0.1
(2.1
)
Adjusted net income from continuing
operations
$
8.5
$
7.9
$
37.4
$
36.2
Adjusted earnings per ordinary share
from continuing operations(1)
Diluted earnings per ordinary share
$
0.23
$
0.13
$
1.16
$
1.07
Impact of adjusted items
0.08
0.15
0.20
0.22
Adjusted diluted earnings per ordinary
share
$
0.31
$
0.28
$
1.36
$
1.29
(1) 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.
LUXFER HOLDINGS PLC
SUPPLEMENTAL
INFORMATION
ADJUSTED EBITDA
(UNAUDITED)
Fourth Quarter
Year-to-date
In millions
2022
2021
2022
2021
Adjusted net income from continuing
operations
$
8.5
$
7.9
37.4
36.2
Add back:
Other non-recurring tax items
—
(0.3
)
—
1.9
Income tax on adjusted items
(0.8
)
0.3
(0.1
)
2.1
Income tax expense
1.8
1.8
9.0
5.4
Net finance costs
1.2
0.7
3.9
3.1
Adjusted EBITA
$
10.7
$
10.4
$
50.2
$
48.7
Loss on disposal of property, plant and
equipment
0.2
—
—
—
Depreciation
3.1
4.2
12.9
14.7
Adjusted EBITDA
$
14.0
$
14.6
$
63.1
$
63.4
ADJUSTED EFFECTIVE TAX RATE
FROM CONTINUING OPERATIONS (UNAUDITED)
Fourth Quarter
Year-to-date
In millions
2022
2021
2022
2021
Adjusted net income from continuing
operations
$
8.5
$
7.9
37.4
36.2
Add back:
Other non-recurring tax items
—
(0.3
)
—
1.9
Income tax on adjusted items
(0.8
)
0.3
(0.1
)
2.1
Provision for income taxes
1.8
1.8
9.0
5.4
Adjusted income from continuing operations
before income taxes
$
9.5
$
9.7
$
46.3
$
45.6
Loss on disposal of property, plant and
equipment
0.2
—
—
—
Adjusted provision for income taxes
1.0
1.8
8.9
9.4
Adjusted effective tax rate from
continuing operations
10.5
%
18.6
%
19.2
%
20.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230228006297/en/
Michael Gaiden Vice President of Investor Relations and Business
Development (414) 982-1663 Michael.Gaiden@Luxfer.com
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