Luxfer Holdings plc (LXFR) Misses Q3 EPS by 10c, Revenues Beat; Offers 4Q Revenue Outlook

Luxfer Holdings plc (NYSE: LXFR) reported Q3 EPS of $0.09, $0.10 worse than the analyst estimate of $0.19. Revenue for the quarter came in at $90.4 million versus the consensus estimate of $89.77 million.

Third Quarter 2020 Summary
(based on year-over-year comparisons unless otherwise noted)

• Net sales of $90.4 million decreased 15.6%, including a 1.4% benefit from currency
• GAAP net income of $2.6 million, which includes $4.3 million in restructuring expenses, decreased from a net income of $5.8 million; adjusted net income of $6.9 million decreased 31%
• GAAP EPS of $0.09 decreased from $0.21; adjusted EPS of $0.25 decreased 30.6%
• Adjusted EBITDA of $14.2 million decreased 15.0%; adjusted EBITDA margin of 15.7% increased 10 basis points
• Free cash flow of $25.6 million increased from an outflow of $1.2 million in the prior year
• Net debt to EBITDA ratio of 1.1x and $150 million in an undrawn revolving credit facility
• Achieved $2.8 million in incremental net cost savings and remain on track to reach total transformation plan savings of $24 million by year-end 2021

“Despite the softer demand due to the disruption of COVID-19, we are pleased with Luxfer’s third quarter results, as they demonstrate the benefit of decisive management action and successful cost savings initiatives. I am proud of our employees who worked around the clock to deliver strong cash and margin performance, while continuing to prioritize the health and safety of our team members and business partners,” stated Luxfer’s Chief Executive Officer, Alok Maskara. “While the environment remains challenging, we made significant progress on our transformation plan and executed additional actions to mitigate the volume declines. In addition to reducing costs, our working capital initiatives resulted in exceptionally strong free cash flow of over $25 million in the quarter. With the strength of our free cash flow and low debt levels, our balance sheet is strong, and we continue to strategically invest in opportunities to capture growth as our markets continue to recover.”

GUIDANCE:

Luxfer Holdings plc sees Q4 2020 revenue of $90.4-106.9 million, versus the consensus of $90.87 million.

Third Quarter 2020 Segment Results
(based on year-over-year comparisons unless otherwise noted)

Elektron Segment

• Net sales of $45.4 million decreased 14.2% from $52.9 million primarily due to decline in Industrial and Transportation end-markets. Foreign currency exchange favorably impacted sales by $0.6 million, or 1.1%.
• Adjusted EBITDA decreased 36.5% to $6.6 million (14.5% of sales) from $10.4 million (19.7% of sales) as cost actions partially offset the impact of volume decline.

Gas Cylinders Segment

• Net sales of $45.0 million decreased 17.0% from $54.2 million with decline in Transportation and First Response end-markets. Foreign currency exchange favorably impacted sales by $0.9 million, or 1.7%.
• Adjusted EBITDA increased 20.6% to $7.6 million (16.9% of sales) from $6.3 million (11.6% of sales) as cost actions and volume related contractual customer payments more than offset the impact of volume decline.

For earnings history and earnings-related data on Luxfer Holdings plc (LXFR) click here.

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