Second Quarter 2022 Highlights (all historical comparisons year-over-year; results exclude discontinued operations)

Net sales of $109.5 million increased $10.5 million or 10.6%, driven by inflation and volume
GAAP diluted EPS from continuing operations of $0.35 decreased $0.07
Adjusted EPS of $0.36 unchanged with continued pass-through of increasing material costs
Adjusted EBITDA of $16.9 million decreased $0.4 million or 2.3%
Affirming 2022 adjusted diluted EPS guidance range of $1.35 to $1.50

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 second quarter of 2022, ended June 26, 2022.

Second Quarter 2022 Consolidated Results

Net sales of $109.5 million increased $10.5 million from $99.0 million in the prior year period, including a $13.0 million benefit from cost pass-through to cover rising material inflation and a $1.3 million positive contribution from volume, partially offset by a foreign exchange impact of $3.8 million.

GAAP net income from continuing operations decreased to $9.6 million, or $0.35 per diluted share, compared to $11.9 million, or $0.42 per diluted share, in the prior year period.

Adjusted net income measured $10.1 million, or $0.36 per diluted share, compared to $10.2 million, or $0.36 per diluted share, in the prior year period. Adjusted EBITDA of $16.9 million decreased by $0.4 million, or 2.3%, from $17.3 million in the prior year period. Supply chain constraints limited volumes in some areas and inflationary pressures impacted costs.

"We continued to maneuver successfully through uneven supply chain conditions to deliver for our customers in the second quarter, and I appreciate the dedication of our employees in rising to this challenge," said Andy Butcher, Chief Executive Officer. "The Elektron segment again led our financial performance this quarter and, as expected, Gas Cylinders posted sequential increases in both sales and profitability. While monitoring the ongoing evolution of the macroeconomy, we are encouraged by the broad-based demand seen across our portfolio as we prepare to execute on our long-term growth opportunities."

Second Quarter 2022 Segment Results (all historical comparisons year-over-year; results exclude discontinued operations)

Elektron Segment

Net sales of $63.4 million increased $10.9 million, or 20.8%, from $52.5 million, driven by favorable price impact to address material inflation
Adjusted EBITDA of $13.2 million increased $1.2 million, or 10.0%, from $12.0 million

Gas Cylinders Segment

Net sales of $46.1 million decreased $0.4 million, or 0.9%, from $46.5 million, with underlying favorable volume offset by foreign exchange headwinds of $2.0 million
Adjusted EBITDA of $3.7 million decreased $1.6 million, or 30.2%, from $5.3 million

Capital Resources and Liquidity

Free cash flow measured $0.6 million in the second quarter of 2022, compared to $7.0 million in the prior year and a $10.3 million outflow in the first quarter of 2022. During the quarter, the Company received $3.7 million in cash proceeds from the sale of a former manufacturing site in Riverhead, New York and made $0.6 million in cash restructuring payments. The Company also paid $3.6 million in dividends, or $0.13 per ordinary share, and returned $2.2 million to shareholders in the form of share repurchases.

On June 26, 2022, net debt totaled $70.6 million, resulting in a net debt to EBITDA ratio of 1.2x.

2022 Guidance

"Given our on-plan performance year-to-date, we are affirming our 2022 adjusted diluted EPS guidance of $1.35 to $1.50," said Andy Butcher.

Conference Call Information

Luxfer management will host a conference call at 8:30 a.m. U.S. Eastern Daylight Time (EDT) on Wednesday, July 27, 2022 to review the Company's quarterly results. The conference call can be accessed by dialing (888) 632-3384 or (785) 424-1250 for participants outside the U.S. using the conference ID code LXFRQ222. The live webcast of Luxfer's earnings conference call can be accessed at the following link: LXFR Q2 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.

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, 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 are traded under the symbol LXFR.

LUXFER HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

		Second Quarter						Year-to-date
In millions, except share and per-share data		2022			2021			2022			2021
Net sales	$	109.5		$	99.0		$	206.5		$	184.2
Cost of goods sold		(83.8	)		(73.1	)		(156.6	)		(133.1	)
Gross profit		25.7			25.9			49.9			51.1
Selling, general and administrative expenses		(11.5	)		(12.7	)		(22.2	)		(23.3	)
Research and development		(1.2	)		(0.8	)		(2.5	)		(1.6	)
Restructuring charges		(0.3	)		(0.2	)		(1.7	)		(1.6	)
Acquisition and disposal related costs		(0.1	)		(0.7	)		(0.3	)		(0.9	)
Other charges		—			—			—			(1.1	)
Operating income		12.6			11.5			23.2			22.6
Interest expense		(0.9	)		(0.8	)		(1.7	)		(1.6	)
Defined benefit pension credit		0.3			0.6			0.7			1.2
Income before income taxes		12.0			11.3			22.2			22.2
(Provision) / credit for income taxes		(2.4	)		0.6			(4.9	)		(1.7	)
Net income from continuing operations		9.6			11.9			17.3			20.5
Net loss from discontinued operations, net of tax		(0.3	)		(0.5	)		(0.4	)		(2.1	)
(Loss) / gain on disposition of discontinued operations, net of tax		—			(0.4	)		—			7.1
Net (loss) / income from discontinued operations	$	(0.3	)	$	(0.9	)	$	(0.4	)	$	5.0

Net income	$	9.3		$	11.0		$	16.9		$	25.5

Earnings / (loss) per share¹
Basic from continuing operations	$	0.35		$	0.43		$	0.63		$	0.74
Basic from discontinued operations²	$	(0.01	)	$	(0.03	)	$	(0.01	)	$	0.18
Basic	$	0.34		$	0.40		$	0.62		$	0.92

Diluted from continuing operations	$	0.35		$	0.42		$	0.62		$	0.73
Diluted from discontinued operations²	$	(0.01	)	$	(0.03	)	$	(0.01	)	$	0.18
Diluted	$	0.34		$	0.39		$	0.61		$	0.91

Weighted average ordinary shares outstanding
Basic		27,428,579			27,771,983			27,458,980			27,717,025
Diluted		27,703,217			28,131,785			27,720,065			28,095,788

(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 Second 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)

	June 26,			December 31,
In millions, except share and per-share data		2022			2021
Current assets
Cash and cash equivalents	$	5.3		$	6.2
Restricted cash		0.2			0.2
Accounts and other receivables, net of allowances of $0.7 and $0.8, respectively		75.2			57.8
Inventories		104.7			90.5
Current assets held-for-sale		9.0			8.5
Total current assets	$	194.4		$	163.2
Non-current assets
Property, plant and equipment, net	$	79.3		$	87.5
Right-of-use assets from operating leases		20.6			12.6
Goodwill		66.3			69.7
Intangibles, net		13.0			13.7
Deferred tax assets		7.5			8.0
Investments and loans to joint ventures and other affiliates		0.4			0.4
Pensions and other retirement benefits		14.7			13.7
Total assets	$	396.2		$	368.8
Current liabilities
Accounts payable	$	34.0		$	31.7
Accrued liabilities		29.2			28.2
Taxes on income		7.5			3.0
Current liabilities held-for-sale		4.7			1.4
Other current liabilities		17.9			19.6
Total current liabilities	$	93.3		$	83.9
Non-current liabilities
Long-term debt	$	75.9		$	59.6
Pensions and other retirement benefits		2.2			1.9
Deferred tax liabilities		2.7			2.7
Other non-current liabilities		16.6			11.6
Total liabilities	$	190.7		$	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 2022 and 2021		149.9			149.9
Additional paid-in capital		70.0			70.9
Treasury shares		(13.0	)		(9.6	)
Own shares held by ESOP		(1.0	)		(1.1	)
Retained earnings		117.4			107.5
Accumulated other comprehensive loss		(144.3	)		(135.0	)
Total shareholders' equity	$	205.5		$	209.1
Total liabilities and shareholders' equity	$	396.2		$	368.8

LUXFER HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Year-to-date
In millions		2022			2021
Operating activities
Net income	$	16.9		$	25.5
Net loss / (income) from discontinued operations		0.4			(5.0	)
Net income from continuing operations	$	17.3		$	20.5
Adjustments to reconcile net income to net cash (used) / provided by operating activities
Depreciation		6.7			7.0
Amortization of purchased intangible assets		0.4			0.4
Amortization of debt issuance costs		0.3			0.3
Share-based compensation charges		0.9			1.4
Deferred income taxes		0.3			(1.9	)
Gain on disposal of property, plant and equipment		(0.2	)		—
Defined benefit pension credit		(0.7	)		(1.2	)
Defined benefit pension contributions		—			(2.9	)
Changes in assets and liabilities
Accounts and other receivables		(19.8	)		(8.4	)
Inventories		(18.0	)		(1.4	)
Other current assets		—			(2.8	)
Accounts payable		5.5			7.5
Accrued liabilities		1.5			4.5
Other current liabilities		0.8			0.5
Other non-current assets and liabilities		(1.8	)		0.9
Net cash (used) / provided by operating activities - continuing		(6.8	)		24.4
Net cash provided by operating activities - discontinued		—			—
Net cash (used) / provided by operating activities	$	(6.8	)	$	24.4
Investing activities
Capital expenditures	$	(2.9	)	$	(3.6	)
Proceeds from sale of property, plant and equipment		3.7			—
Proceeds from sale of businesses and other		—			20.6
Acquisitions, net of cash acquired		—			(19.3	)
Net cash provided / (used) by investing activities - continuing		0.8			(2.3	)
Net cash used for investing activities - discontinued		—			—
Net cash provided / (used) by investing activities	$	0.8		$	(2.3	)
Financing activities
Net drawdown / (repayment) of long-term borrowings	$	18.1		$	(4.4	)
Repurchase of own shares		(3.7	)		(0.9	)
Share-based compensation cash paid		(1.4	)		(1.5	)
Dividends paid		(7.0	)		(6.8	)
Net cash provided / (used) by financing activities	$	6.0		$	(13.6	)
Effect of exchange rate changes on cash and cash equivalents		(0.9	)		0.3
Net (decrease) / increase	$	(0.9	)	$	8.8
Cash, cash equivalents and restricted cash; beginning of year		6.4			1.5
Cash, cash equivalents and restricted cash; end of the Second Quarter		5.5			10.3

Supplemental cash flow information:
Interest payments	$	1.7		$	1.7
Income tax payments, net		0.3			3.7

LUXFER HOLDINGS PLC SUPPLEMENTAL INFORMATION SEGMENT INFORMATION (UNAUDITED)

	Net sales								Adjusted EBITDA
	Second Quarter				Year-to-date				Second Quarter				Year-to-date
In millions		2022		2021		2022		2021		2022		2021		2022		2021
Gas Cylinders segment	$	46.1	$	46.5	$	88.5	$	82.7	$	3.7	$	5.3	$	6.4	$	11.3
Elektron segment		63.4		52.5		118.0		101.5		13.2		12.0		26.6		23.7
Consolidated	$	109.5	$	99.0	$	206.5	$	184.2	$	16.9	$	17.3	$	33.0	$	35.0

	Depreciation and amortization								Restructuring charges
	Second Quarter				Year-to-date				Second Quarter				Year-to-date
In millions		2022		2021		2022		2021		2022		2021		2022		2021
Gas Cylinders segment	$	1.2	$	1.6	$	2.6	$	2.5	$	0.1	$	0.2	$	1.5	$	0.7
Elektron segment		2.2		2.4		4.5		4.9		0.2		—		0.2		0.9
Consolidated	$	3.4	$	4.0	$	7.1	$	7.4	$	0.3	$	0.2	$	1.7	$	1.6

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (UNAUDITED)

	Second Quarter						Year-to-date
In millions except per share data		2022			2021			2022			2021
Net income from continuing operations	$	9.6		$	11.9		$	17.3		$	20.5
Accounting charges relating to acquisitions and disposals of businesses:
Amortization on acquired intangibles		0.2			0.2			0.4			0.4
Acquisition and disposal related costs		0.1			0.7			0.3			0.9
Defined benefit pension credit		(0.3	)		(0.6	)		(0.7	)		(1.2	)
Restructuring charges		0.3			0.2			1.7			1.6
Other charges		—			—			—			1.1
Share-based compensation charges		0.7			0.9			0.9			1.4
Other non-recurring tax items¹		—			(2.2	)		—			(2.2	)
Income tax on adjusted items		(0.5	)		(0.9	)		(0.6	)		(1.4	)
Adjusted net income	$	10.1		$	10.2		$	19.3		$	21.1

Adjusted earnings per ordinary share
Diluted earnings per ordinary share	$	0.35		$	0.42		$	0.62		$	0.73
Impact of adjusted items		0.01			(0.06	)		0.08			0.02
Adjusted diluted earnings per ordinary share²	$	0.36		$	0.36		$	0.70		$	0.75

(1)		Other non-recurring tax items represents the impact of the recently 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)

	Second Quarter						Year-to-date
In millions		2022			2021			2022			2021
Adjusted net income	$	10.1		$	10.2		$	19.3		$	21.1
Add back:
Other non-recurring tax items		—			2.2			—			2.2
Income tax on adjusted items		0.5			0.9			0.6			1.4
Provision for income taxes		2.4			(0.6	)		4.9			1.7
Net finance costs		0.9			0.8			1.7			1.6
Gain on disposal of PPE		(0.2	)		—			(0.2	)		—
Adjusted EBITA	$	13.7		$	13.5		$	26.3		$	28.0
Depreciation		3.2			3.8			6.7			7.0
Adjusted EBITDA	$	16.9		$	17.3		$	33.0		$	35.0

ADJUSTED EFFECTIVE TAX RATE (UNAUDITED)

	Second Quarter						Year-to-date
In millions		2022			2021			2022			2021
Adjusted net income	$	10.1		$	10.2		$	19.3		$	21.1
Add back:
Other non-recurring tax items		—			2.2			—			2.2
Income tax on adjusted items		0.5			0.9			0.6			1.4
Provision / (credit) for income taxes		2.4			(0.6	)		4.9			1.7
Adjusted income before income taxes	$	13.0		$	12.7		$	24.8		$	26.4
Adjusted provision for income taxes		2.9			2.5			5.5			5.3
Adjusted effective tax rate		22.3	%		19.7	%		22.2	%		20.1	%

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Luxfer Announces Second Quarter 2022 Financial Results