Wed. Nov 13th, 2019

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Swift change: Luxfer Holdings PLC (NYSE: LXFR)

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Luxfer Holdings PLC (NYSE: LXFR), a worldwide manufacturer of highly-engineered industrial materials, recently stated fiscal results for the 3rd-quarter of 2k19, which finished September 29, 2k19. Financial results for all durations are presented in U.S. GAAP, as the Company became an SEC domestic issuer as of January 1, 2k19.

3rd-Quarter 2k19 Summary

(based on year-over-year comparisons unless otherwise noted)

  • Net sales of $107.10M reduced 17.00 percent, counting a 2.30 percent unfavorable impact from currency rates and a 3.40 percent decline because of the divestiture of the Czech recycling operations
  • GAAP EPS of $0.210, counting $5.30M in restructuring and exceptional costs, reduced 52.00 percent; adjusted EPS of $0.360 reduced 25.00 percent
  • GAAP net income of $5.80M reduced 52.50 percent; adjusted net income of $10.00M reduced 25.40 percent
  • Adjusted EBITDA of $16.70M reduced 27.40 percent; adjusted EBITDA margin of 15.60 percent reduced 220.0 basis points
  • 2k19 FY EPS guidance lowered to $1.410 -$1.470, contrast to previous guidance of $1.660 – $1.720

3rd-Quarter 2k19 Results

Merged net sales reduced 17.00 percent to $107.10M from $129.10M year-over-year. Apart From the $4.40M divestiture of the Czech recycling operation, core sales reduced 14.10 percent, counting the unfavorable foreign currency exchange impact of $2.80M, or 2.30 percent.

GAAP net income was $5.80M, or $0.210 for each diluted share, contrast with net income of $12.20M, or $0.440 for each diluted share, for the prior year. Results include $2.60M in restructuring costs related to the Company’s transformation plan and a $2.70M charge regarding the final remediation of a legacy environmental issue at Luxfer’s Manchester, UK site, in contrast to restructuring costs of $1.10M in 3rd-quarter 2k18.

Adjusted net income reduced to $10.00M from $13.40M for the similar duration a year ago. Adjusted diluted earnings for each share reduced 25.00 percent to $0.360 from $0.480 a year ago. Adjusted EBITDA was $16.70M, a contrast to $23.0M in 3rd-quarter 2k18. The adjusted EBITDA margin of 15.60 percent reduced 220.0 basis points from 17.80 percent in the 3rd-quarter of 2k18.

3rd-Quarter 2k19 Segment Results
(based on year-over-year comparisons unless otherwise noted)

Elektron Segment

  • Net sales of $52.90M reduced 20.90 percent from $66.90M. Foreign currency reduced sales by $1.20M, or 1.80 percent, while the divestment of the Czech recycling operations negatively influenced sales by $4.40M, or 6.60 percent. The sales decline was driven by lower shipments of SoluMag®alloy, in addition to general industrial softness.
  • Adjusted EBITDA reduced 37.70 percent to $10.40M (19.70 percent of sales) from $16.70M (25.00 percent of sales).

Gas Cylinders Segment

  • Net sales of $54.20M reduced 12.90 percent from $62.20M. Continued growth in alternative fuel cylinder products offset lower sales of industrial aluminum cylinders and Superform products for European luxury automobiles. Foreign currency reduced sales by $1.60M, or 2.60 percent.
  • Adjusted EBITDA remained unchanged at $6.30M and margin increased by 150.0 basis points to 11.60 percent as cost savings offset the impact of lower sales.

Capital Resources and Liquidity

Net cash flow before financing was an outflow of $1.20M, in contrast to an inflow of $14.20M year-over-year. As expected, notable cash outflows resulted from the closure of the French cylinder manufacturing facility as part of the Company’s transformation plan. As of September 29, 2k19, the Company had a net debt of $93.70M, with a net debt to EBITDA ratio of 1.30x.

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