LUXFER HOLDINGS PLC Q3 FY2024 earnings call

• The Luxfer team achieved steady revenue improvements and enhanced profitability in Q3. Sales were $91.4 million, a 1.2% year-over-year increase. • Sold the Lakehurst, New Jersey property for $7.3 million. • Adjusted EBITDA was $13.5 million, a 22.7% improvement year-over-year, with a margin of 14.8%. • Operating cash flow was $12.8 million, and net debt was reduced to $66 million, strengthening the balance sheet. • Sale of the Graphic Arts business is expected to close in the first half of 2025. • Innovations include RotaMag with 30% annual sales growth, L7X medical cylinders with doubled sales from 2022 to 2024, and the revamped HeaterMeals portfolio used in hurricane disaster relief.

In the third quarter, Elektron had sales of $48.8 million, representing a 7% year-over-year increase and 16.2% sequentially. Its adjusted EBITDA was $8.9 million with a margin of 18.2%. Gas Cylinders had sales of $42.6 million, a 4.7% year-over-year decrease. Its adjusted EBITDA was $4.6 million with a margin of 10.8%. Elektron contributed approximately 53.4% of the total revenue ($48.8M / $91.4M), while Gas Cylinders contributed approximately 46.6% ($42.6M / $91.4M).

• Excluding legal cost recoveries, adjusted EBITDA for 2024 is expected to be between $45 million and $47 million, and adjusted diluted EPS is between $0.88 and $0.94. • Including legal cost recoveries, adjusted EBITDA is between $52 million and $54 million, and adjusted diluted EPS is between $1.09 and $1.14. • Free cash flow is expected to be between $35 million and $37 million. • Net debt-to-EBITDA ratio is anticipated to decrease to approximately 1.1 times.

• Uncertainties in market conditions, such as potential impacts from hurricanes, port strikes, and market competition. • Potential delays or issues in the sale of the Graphic Arts business, as the originally identified buyer did not meet valuation expectations and the process has been reopened with multiple interested parties.

Q: About the impressive margins in Elektron and the pull forward, A: Talked about margin improvement, pull forward impact (around $2 million plus revenue with fixed cost deleveraging up to $1 million), and future margin aspirations (aspire to ~20% margin but not yet there).

Q: About European sales growth, A: Discussed Industrial Cylinder sales and stronger performance in traditional lines in Europe.

Q: About UK facility and CNG engines, A: Nottingham bulk gas facility first module in final assembly, CNG engine manufacturing ramping up with initial fleet customer orders at prototype trial level.

Q: About Graphic Arts sale, A: Sale expected in first half of 2025, previously aimed for end of 2024 but exclusive buyer didn't meet valuation, now engaging with multiple interested parties including some previously engaged.