Luxfer reports ‘strong’ Q2 2023 financial results

Andy Butcher, CEO of Luxfer Holdings, says the company’s second quarter (Q2) 2023 results highlight a strong and broad-based uplift from its defence, first response and healthcare offerings, as well an increase in gas cylinder sales.

Net sales of $110.4m increased $0.9m from $109.5m in the prior year. This included a $6.5m benefit from cost pass-through to cover rising material inflation, partially offset by a negative impact from volume/mix of $5.8m.

GAAP net income from continuing operations decreased to $4.9m, or $0.18 per diluted share, compared to $9.6m, or $0.35 per diluted share, in the prior year period.

Q2 GAAP net income includes $2.3m in asset impairment charges tied to rationalisation of Luxfer’s North American Gas Cylinders businesses to reduce the fixed cost base.

Adjusted net income totalled $7.4m, or $0.27 per diluted share, compared to $10.1m, or $0.36 per diluted share, in the prior year period. Adjusted EBITDA of $14.4m decreased $2.5m, or 14.8%, from $16.9min the prior year period.

Butcher commented, “Our team again worked hard to deliver for our customers in the second quarter. We continue to see a strong and broad-based uplift from our defence, first response, and healthcare offerings.”

“We also are pleased by our strong second quarter free cash flow performance as well as increases in gas cylinder sales and EBITDA both year-over-year and quarter-over-quarter. Despite these positives, macro uncertainty as well as impacts from the extended outage of US domestic magnesium supply are weighing on our performance.”

Results by segment

Net sales in the Gas Cylinders Segment of $48.5m increased $2.4m, or 5.2%, with increased cost pass0through offset by volume/mix as well as foreign exchange headwinds of $0.3.

Adjusted EBITDA of $4.9m increased $1.2m, or 32.4%, from $3.7.

Net sales in the Elektron Segment of $61.9m decreased $1.5m, or 2.4%. This figure was driven by volume/mix and partially offset by favourable price impact to address material inflation and foreign exchange.

Adjusted EBITDA of $9.5m decreased $3.7m, or 28.0%, from $13.2m, reflecting accelerated cost recovery in the prior year period and lower sales in certain end markets in the current period.

2023 guidance

Based on first half 2023 performance, as well as the current outlook for its customers and end markets, Luxfer expects full year 2023 adjusted earnings per share of $0.88 to $1.00, compared to $1.15% to $1.35.

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