Luxfer Holdings PLC Announces First Quarter 2021 Financial Results

Luxfer Holdings PLC (NYSE: LXFR), (“Luxfer” or the “Company”), a global manufacturer of highly-engineered industrial materials, today announced financial results for the first quarter, ending March 28, 2021.

Consolidated net sales decreased 3.6% to $85.2 million from $88.4 million, including a favorable foreign currency benefit of $3.0 million, or 3.4%. The sales decrease was due to the negative impact of COVID-19 on industrial end markets, partially offset by growth in alternative fuel including CNG and Hydrogen, as well as sales of military products.

GAAP net income increased to $8.6 million, or $0.31 per diluted share, compared to $7.2 million, or $0.26 per diluted share one year ago. Results include $2.7 million in restructuring and other charges, compared to restructuring and other charges of $3.0 million in the prior year period.

Adjusted net income increased 16.0% to $10.9 million from $9.4 million. Adjusted diluted earnings per share increased 14.7% to $0.39 from $0.34. Adjusted EBITDA increased 12.0% to $17.7 million. Adjusted EBITDA margin of 20.8% expanded 290 basis points.

“We are pleased to have started the year with strong first quarter results driven by solid execution and an improving global economy,” said Alok Maskara, Luxfer’s Chief Executive Officer. “During the quarter, we achieved our Transformation Plan cost reduction goal, which has yielded $26 million in annualized savings ahead of our original targeted completion of year end. In addition, we completed several strategic initiatives that positioned our product portfolio for accelerated growth. We also continued our lean working capital initiatives which delivered free cash flow of $13.8 million. Given the strength of our free cash flow and low debt levels, we have the financial flexibility to strategically invest in future growth opportunities while returning cash to shareholders in the form of dividends and share repurchases.”

Segment Results (all comparisons year-over-year unless otherwise noted; results exclude aluminum products discontinued operations)

Elektron Segment

• Net sales of $49.0 million decreased 4.3% including a $1.4 million, or 2.7%, foreign currency exchange benefit.
• Adjusted EBITDA of $11.7 million increased 0.9% and margin expanded 120 basis points to 23.9% from 22.7%.

Gas Cylinders Segment

• Net sales of $36.2 million decreased 2.7%; foreign currency exchange benefited sales by $1.6 million, or 4.3%.
• Adjusted EBITDA of $6.0 million increased 43% as cost savings more than offset the impact of volume declines, resulting in 530 basis points of margin expansion to 16.6% from 11.3%.

Capital Resources and Liquidity

Free cash flow of $13.8 million for the quarter, compared to an outflow of $7.0 million in the prior year. During the quarter, the Company paid $3.4 million in ordinary dividends, or $0.125 per share. Given strong cash flow, the Company restored normal levels of funding for growth and productivity initiatives.

At quarter end, the Company had $31.8 million in cash and approximately $126 million in an undrawn revolving credit facility. Net debt totaled $41.2 million, resulting in a net debt to EBITDA ratio of 0.7x.

2021 Guidance

“While market uncertainty remains, we have gained more visibility into customer demand patterns and are providing updated financial guidance for 2021. We now expect Adjusted EPS to be in the range of $1.10 to $1.30, an increase from our prior range of $1.05 to $1.25, despite the $0.15 dilutive impact of the SCI acquisition. We retain a strong balance sheet and undrawn credit facility, which provides us the financial flexibility to continue investing in growth and exploring acquisition opportunities to build an even stronger Company,” added Maskara.

Conference Call Information

Luxfer has scheduled a conference call at 8:30 a.m. U.S. Eastern Daylig