First Quarter 2023 Highlights (all historical comparisons
year-over-year; results exclude discontinued operations)
- Net sales of $101.3 million increased $4.3 million or 4.4%
- GAAP diluted EPS from continuing operations of $0.02 decreased
$0.26
- Adjusted diluted EPS of $0.20 decreased $0.13
- Adjusted EBITDA of $11.3 million decreased $4.8 million or
29.8%
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 first quarter 2023, ended April 2, 2023.
First Quarter 2023 Consolidated Results
Net sales of $101.3 million increased $4.3 million from $97.0
million in the prior year period, including a $10.0 million benefit
from cost pass-through to cover rising material inflation partially
offset by negative impacts from volume/mix of $3.4 million and
foreign exchange of $2.3 million.
GAAP net income from continuing operations decreased to $0.5
million, or $0.02 per diluted share, compared to $7.7 million, or
$0.28 per diluted share, in the prior year period.
Adjusted net income measured $5.4 million, or $0.20 per diluted
share, compared to $9.2 million, or $0.33 per diluted share, in the
prior year period. Adjusted EBITDA of $11.3 million decreased $4.8
million, or 29.8%, from $16.1 million in the prior year period.
Foreign exchange reduced net sales by $2.3 million but contributed
$0.8 million to Adjusted EBITDA. Lower demand reduced volumes in
some areas and inflationary pressures continued to impact
costs.
“Thanks to our team’s focus on customer first and operational
excellence, we delivered first quarter Adjusted EPS in line with
our expectations,” said Andy Butcher, Chief Executive Officer. “We
were especially pleased with the continuing multi-year recovery
underway in the aerospace sector. While chemical kits, healthcare
and SCBA also realized growth in the quarter, we are seeing
incremental impact of softening in the broader macroeconomic
environment that tempers our overall projected sales outlook. We
nevertheless look forward to an expected acceleration in our
quarterly earnings performance over the balance of the year.”
First Quarter 2023 Segment Results (all historical
comparisons year-over-year; results exclude discontinued
operations)
Elektron Segment
- Net sales of $59.8 million increased $5.2 million, or 9.5%,
from $54.6 million, driven by favorable price impact to address
material inflation partially offset by volume/mix and foreign
exchange
- Adjusted EBITDA of $8.8 million decreased $4.6 million, or
34.3%, from $13.4 million, reflecting accelerated cost recovery in
the prior year period and lower sales in certain higher margin end
markets in the current period
Gas Cylinders Segment
- Net sales of $41.5 million decreased $0.9 million, or 2.1%,
from $42.4 million, with increased cost pass-through offset by
volume/mix as well as foreign exchange headwinds of $1.5
million
- Adjusted EBITDA of $2.5 million decreased $0.2 million, or
7.4%, from $2.7 million
Capital Resources and Liquidity
Free cash flow measured a $16.4 million outflow in the first
quarter of 2023, compared to an outflow of $10.3 million in the
prior year period, in line with the Company’s recent seasonal
patterns. During the quarter, the Company paid $2.3 million to
successfully transfer liability for its U.S. defined benefit
pension obligation to a third party. The Company also paid $3.5
million in dividends, or $0.13 per ordinary share.
On April 2, 2023, net debt totaled $89.6 million, resulting in a
net debt to EBITDA ratio of 1.5x.
2023 Guidance
Based on first quarter 2023 performance as well as the current
outlook for our end markets and supply chain conditions, Luxfer
affirms expectations for full year 2023 adjusted diluted earnings
per share of $1.15 to $1.35.
Conference Call Information
Luxfer management will host a conference call at 8:30 a.m. U.S.
Eastern Daylight Time (EDT) on Thursday, April 27, 2023 to review
the Company’s quarterly results. The conference call can be
accessed by dialing (800) 225-9448 or (203) 518-9708 for
participants outside the U.S., using the conference ID code
LXFRQ123. Please dial in at least 15 minutes prior to the start of
the call to register. Please use the following link to access the
webcast of the conference call: LXFR 1Q 2023 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 May 11, 2023 at midnight EDT. To
access the recording, please dial (800) 839-3447 or (402) 220-7237
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, 2022, which was filed with the U.S. Securities and
Exchange Commission on March 1, 2023. 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
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
First Quarter
In millions, except share and per share
data
2023
2022
Net sales
$
101.3
$
97.0
Cost of goods sold
(80.2
)
(72.8
)
Gross profit
21.1
24.2
Selling, general and administrative
expenses
(12.5
)
(10.7
)
Research and development
(1.2
)
(1.3
)
Restructuring charges
(0.3
)
(1.4
)
Acquisition and disposal related costs
—
(0.2
)
Operating income
7.1
10.6
Interest expense
(1.3
)
(0.8
)
Defined benefit pension (charge) /
credit
(8.9
)
0.4
(Loss) / income before income
taxes
(3.1
)
10.2
Credit / (provision) for income taxes
3.6
(2.5
)
Net income from continuing
operations
0.5
7.7
Net income / (loss) from discontinued
operations
$
—
$
(0.1
)
Net income
$
0.5
$
7.6
Earnings / (loss) per share1
Basic from continuing operations
$
0.02
$
0.28
Basic from discontinued operations2
$
—
$
—
Basic
$
0.02
$
0.28
Diluted from continuing operations
$
0.02
$
0.28
Diluted from discontinued operations2
$
—
$
—
Diluted
$
0.02
$
0.28
Weighted average ordinary shares
outstanding
Basic
26,921,010
27,490,741
Diluted
27,071,494
27,696,118
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 First
Quarter 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)
April 02,
December 31,
In millions, except share and per share
data
2023
2022
Current assets
Cash and cash equivalents
$
1.8
$
12.6
Restricted cash
0.3
0.3
Accounts and other receivables, net of
allowances of $0.5 and $0.4, respectively
74.2
67.8
Inventories
129.4
111.1
Current assets held-for-sale
7.8
9.3
Total current assets
$
213.5
$
201.1
Non-current assets
Property, plant and equipment, net
$
77.6
$
77.7
Right-of-use assets from operating
leases
19.2
19.8
Goodwill
66.5
65.6
Intangibles, net
12.4
12.5
Deferred tax assets
3.2
3.0
Investments and loans to joint ventures
and other affiliates
0.3
0.4
Pensions and other retirement benefits
28.4
27.0
Total assets
$
421.1
$
407.1
Current liabilities
Short-term debt
$
25.0
$
25.0
Accounts payable
39.3
37.8
Accrued liabilities
28.9
29.4
Taxes on income
2.7
1.8
Current liabilities held-for-sale
4.1
5.0
Other current liabilities
11.8
11.2
Total current liabilities
$
111.8
$
110.2
Non-current liabilities
Long-term debt
$
66.4
$
56.2
Pensions and other retirement benefits
—
4.5
Deferred tax liabilities
11.4
9.9
Other non-current liabilities
17.5
19.0
Total liabilities
$
207.1
$
199.8
Shareholders' equity
Ordinary shares of £0.50 par value;
authorized 40,000,000 shares for 2023 and 2022; issued and
outstanding 28,944,000 for 2023 and 2022
$
26.5
$
26.5
Additional paid-in capital
221.7
221.4
Treasury shares
(21.2
)
(20.4
)
Own shares held by ESOP
(1.0
)
(1.0
)
Retained earnings
117.2
120.2
Accumulated other comprehensive loss
(129.2
)
(139.4
)
Total shareholders' equity
$
214.0
$
207.3
Total liabilities and shareholders'
equity
$
421.1
$
407.1
LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
First Quarter
In millions
2023
2022
Operating activities
Net income
$
0.5
$
7.6
Net (income) / loss from discontinued
operations
—
0.1
Net income from continuing operations
$
0.5
$
7.7
Adjustments to reconcile net income to net
cash used by operating activities
Depreciation
3.1
3.5
Amortization of purchased intangible
assets
0.2
0.2
Amortization of debt issuance costs
0.1
0.2
Share-based compensation charges
0.6
0.2
Deferred income taxes
1.2
0.1
Defined benefit pension charge /
(credit)
8.9
(0.4
)
Defined benefit pension contributions
(2.3
)
—
Changes in assets and liabilities
Accounts and other receivables
(2.3
)
(12.2
)
Inventories
(17.1
)
(16.2
)
Other current assets
1.5
(3.0
)
Accounts payable
(2.4
)
6.8
Accrued liabilities
(1.0
)
3.4
Other current liabilities
(4.4
)
2.0
Other non-current assets and
liabilities
(1.0
)
(1.6
)
Net cash used by operating activities -
continuing
(14.4
)
(9.3
)
Net cash provided by operating activities
- discontinued
—
—
Net cash used by operating
activities
$
(14.4
)
$
(9.3
)
Investing activities
Capital expenditures
$
(2.0
)
$
(1.0
)
Net cash used by investing activities -
continuing
(2.0
)
(1.0
)
Net cash used by investing activities -
discontinued
—
—
Net cash used by investing
activities
$
(2.0
)
$
(1.0
)
Financing activities
Net drawdown of long-term borrowings
$
9.9
$
26.7
Repurchase of own shares
(0.8
)
(1.5
)
Share-based compensation cash paid
(0.3
)
(0.4
)
Dividends paid
(3.5
)
(3.4
)
Net cash provided by financing
activities
$
5.3
$
21.4
Effect of exchange rate changes on cash
and cash equivalents
0.3
(0.2
)
Net increase
$
(10.8
)
$
10.9
Cash, cash equivalents and restricted
cash; beginning of year
12.9
6.4
Cash, cash equivalents and restricted
cash; end of the First Quarter
2.1
17.3
Supplemental cash flow
information:
Interest payments
$
1.4
$
0.8
Income tax receipts, net
(0.5
)
(0.1
)
LUXFER HOLDINGS PLC
SUPPLEMENTAL
INFORMATION
SEGMENT INFORMATION
(UNAUDITED)
Net sales
Adjusted EBITDA
First Quarter
First Quarter
In millions
2023
2022
2023
2022
Gas Cylinders segment
$
41.5
$
42.4
$
2.5
$
2.7
Elektron segment
59.8
54.6
8.8
13.4
Consolidated
$
101.3
$
97.0
$
11.3
$
16.1
Depreciation and
amortization
Restructuring charges
First Quarter
First Quarter
In millions
2023
2022
2023
2022
Gas Cylinders segment
$
1.1
$
1.4
$
0.3
$
1.4
Elektron segment
2.2
2.3
—
—
Consolidated
$
3.3
$
3.7
$
0.3
$
1.4
ADJUSTED NET INCOME AND
ADJUSTED EARNINGS PER SHARE (UNAUDITED)
First Quarter
In millions except per share data
2023
2022
Net income from continuing operations
$
0.5
$
7.7
Accounting charges relating to
acquisitions and disposals of businesses:
Amortization on acquired intangibles
0.2
0.2
Acquisition and disposal related costs
—
0.2
Defined benefit pension charge /
(credit)
8.9
(0.4
)
Restructuring charges
0.3
1.4
Share-based compensation charges
0.6
0.2
Tax impact of defined benefit pension
settlement
(4.9
)
—
Income tax on adjusted items
(0.2
)
(0.1
)
Adjusted net income
$
5.4
$
9.2
Adjusted earnings per ordinary
share
Diluted earnings per ordinary share
$
0.02
$
0.28
Impact of adjusted items
0.18
0.05
Adjusted diluted earnings per ordinary
share1
$
0.20
$
0.33
1For 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
SUPPLEMENTAL
INFORMATION
ADJUSTED EBITDA
(UNAUDITED)
First Quarter
In millions
2023
2022
Adjusted net income
$
5.4
$
9.2
Add back:
Tax impact of defined benefit pension
settlement
4.9
—
Income tax on adjusted items
0.2
0.1
Provision for income taxes
(3.6
)
2.5
Net finance costs
1.3
0.8
Adjusted EBITA
$
8.2
$
12.6
Depreciation
3.1
3.5
Adjusted EBITDA
$
11.3
$
16.1
ADJUSTED EFFECTIVE TAX RATE
(UNAUDITED)
First Quarter
In millions
2023
2022
Adjusted net income
$
5.4
$
9.2
Add back:
Tax impact of defined benefit pension
settlement
4.9
—
Income tax on adjusted items
0.2
0.1
Provision for income taxes
(3.6
)
2.5
Adjusted income before income taxes
$
6.9
$
11.8
Adjusted provision for income taxes
1.5
2.6
Adjusted effective tax rate
21.7
%
22.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426005774/en/
Michael Gaiden Vice President of Investor Relations and Business
Development (414) 982-1663 Michael.Gaiden@Luxfer.com
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