NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation and Responsibility for Interim Financial Statements
We prepared the accompanying unaudited consolidated condensed financial statements of Luxfer Holdings PLC and all wholly-owned, majority owned or otherwise controlled subsidiaries on the same basis as our annual audited financial statements. We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
Our quarterly financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020. As used in this report, the terms "we," "us," "our," "Luxfer" and "the Company" mean Luxfer Holdings PLC and its subsidiaries, unless the context indicates another meaning.
In the opinion of management, our financial statements reflect all adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP and with the instructions to Form 10-Q in Article 10 of Securities and Exchange Commission (SEC) Regulation S-X.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates, and any such differences may be material to our financial statements.
Our fiscal year ends on December 31. We report our interim quarterly periods on a 13-week quarter basis, ending on a Sunday. The Third Quarter 2021, ended on September 26, 2021, and the Third Quarter 2020, ended on September 27, 2020.
Discontinued operations
Certain amounts in the prior-year financial statements were reclassified to conform to the current-year presentation due to the classification of certain businesses as discontinued operations.
Impact of COVID-19 on the Financial Statements
In March 2020, the World Health Organization characterized the coronavirus ("COVID-19") a pandemic. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. Luxfer’s 2020 results were significantly affected by the global macro environment resulting from the COVID-19 pandemic, including broad-based market weakness, which was especially evident in our general industrial and transportation end-markets, contributing to a full year decline of 18.0% and 14.7% respectively, in each of those markets.
In the first nine months of 2021, with net sales up 13.5%, a return to growth across all end-markets and adjusted EBITDA up 21.7% on the prior year, the Company has delivered three quarters of strong performance amid the global economic recovery from the COVID-19 pandemic. Furthermore, it continues to operate all of its facilities at near normal production levels, following temporary closures of a few locations in the second and third quarters of 2020. Due to weaker demand resulting from uncertain economic conditions, supply constraints, and the impact of COVID-19, Luxfer implemented additional cost saving programs in the second half of 2020, including headcount reductions. Company performance is now much improved and the apparent success of vaccine programs in the U.S. and Europe has given rise to fewer restrictions, increased stability and macroeconomic recovery. That said, the coronavirus is still prevalent in many of our markets, there are pressures on availability and therefore cost of, raw materials, transport, energy and labor, continuing restrictions on international travel resulting in considerable uncertainty as to when normal conditions will prevail. If warranted, it is possible that the Company may again suspend or reduce operations at certain facilities, which could have an adverse effect on our financial position, results of operations and cash flows.
The Company recognized that the COVID-19 pandemic constituted a triggering event in accordance with Accounting Standards Codification, ("ASC"), 350 Intangibles - Goodwill and Other, during the first quarter of 2020 and therefore performed an impairment assessment of its goodwill and other intangible assets. Based on the forecast at that time, we did not identify any impairments, nor marginal outcomes. During 2020 and in the first nine months of 2021, quarterly re-forecasts were performed to assess the impact COVID-19 was having on our results and liquidity, and in the fourth quarter of 2020 we carried out our annual goodwill and other intangibles impairment test using cash flows from the annual and strategic plan budgeting exercise.
1. Basis of Presentation and Responsibility for interim Financial Statements (continued)
There have been no subsequent triggering events that has changed our assessment of fair value, as a result, no impairments nor marginal outcomes have been identified.
Assumptions and judgments are required in calculating the fair value of the reporting units. In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in. These assumptions and judgments may change as we learn more about the impact of the COVID-19 pandemic.
In relation to liquidity, the Company has access to a revolving credit facility (see Note 9) and has performed stress testing on financial covenants using current forecast information and has not identified any liquidity concerns. Furthermore, the Company has reported historically low levels of net debt and continual strong cash flow generation since the onset of the pandemic.
Accounting standards issued but not yet effective
None that will be material to the Company.
2. Earnings per share
Basic earnings per share are computed by dividing net income or loss for the period by the weighted-average number of ordinary shares outstanding, net of treasury shares and shares held in ESOP. Diluted earnings per share are computed by dividing net income for the period by the weighted average number of ordinary shares outstanding and the dilutive ordinary shares equivalents.
Basic and diluted earnings per share were calculated as follows:
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|
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Third Quarter
|
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Year-to-date
|
|
|
In millions except share and per-share data
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Basic earnings:
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|
|
|
|
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|
|
Net income from continuing operations
|
$
|
6.0
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|
|
$
|
2.4
|
|
|
$
|
26.5
|
|
|
$
|
14.2
|
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|
Net (loss) / income from discontinued operations
|
(1.2)
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|
|
0.2
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|
|
3.8
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|
|
(1.3)
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Net income
|
$
|
4.8
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|
|
$
|
2.6
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|
|
$
|
30.3
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|
|
$
|
12.9
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|
|
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|
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Weighted average number of £0.50 ordinary shares:
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|
|
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|
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For basic earnings per share
|
27,722,472
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|
|
27,619,298
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|
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27,718,874
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|
|
27,532,823
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|
|
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Dilutive effect of potential common stock
|
311,260
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|
394,408
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|
|
353,281
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|
|
426,119
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|
|
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For diluted earnings per share
|
28,033,732
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|
|
28,013,706
|
|
|
28,072,155
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|
|
27,958,942
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|
|
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|
|
|
|
|
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Earnings / (loss) per share using weighted average number of ordinary shares outstanding3:
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Basic earnings per ordinary share for continuing operations
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$
|
0.22
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|
|
$
|
0.09
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|
|
$
|
0.96
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|
|
$
|
0.52
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|
|
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Basic (loss) / earnings per ordinary share for discontinued operations
|
(0.04)
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|
|
0.01
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|
|
0.14
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|
|
(0.05)
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|
|
Basic earnings per ordinary share
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$
|
0.17
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|
|
$
|
0.09
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|
|
$
|
1.09
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|
|
$
|
0.47
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|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per ordinary share for continuing operations
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$
|
0.21
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|
|
$
|
0.09
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|
|
$
|
0.94
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|
|
$
|
0.51
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|
|
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Diluted (loss) / earnings per ordinary share for discontinued operations
|
(0.04)
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|
|
0.01
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|
|
0.14
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|
|
(0.05)
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|
|
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Diluted earnings per ordinary share
|
$
|
0.17
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|
|
$
|
0.09
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|
|
$
|
1.08
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|
|
$
|
0.46
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|
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3 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
In the third quarter of 2021 and year-to-date 2020, basic average shares outstanding and diluted average shares outstanding were the same for discontinued operations because the effect of potential shares of common stock was anti-dilutive since the Company generated a net loss from discontinued operations.
.
3. Net Sales
Disaggregated sales disclosures for the quarter and first nine months ended September 26, 2021, and September 27, 2020, are included below and in Note 14, Segmental Information.
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Third Quarter
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2021
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2020
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In millions
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Gas Cylinders
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Elektron
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Total
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Gas Cylinders
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Elektron
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Total
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General industrial
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$
|
7.6
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$
|
21.6
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$
|
29.2
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|
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$
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6.8
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$
|
20.0
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$
|
26.8
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Transportation
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19.7
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|
11.4
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|
31.1
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|
|
11.9
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9.9
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21.8
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Defense, First Response & Healthcare
|
18.3
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|
12.6
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30.9
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|
|
13.6
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|
15.5
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|
29.1
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Net sales
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$
|
45.6
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|
$
|
45.6
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$
|
91.2
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|
|
$
|
32.3
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$
|
45.4
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|
$
|
77.7
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|
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|
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Year-to-date
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2021
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2020
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|
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In millions
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Gas Cylinders
|
Elektron
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Total
|
|
Gas Cylinders
|
Elektron
|
Total
|
|
|
General industrial
|
$
|
23.3
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|
$
|
69.0
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|
$
|
92.3
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|
|
$
|
19.6
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|
$
|
65.6
|
|
$
|
85.2
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|
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Transportation
|
50.7
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|
35.1
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|
85.8
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|
|
37.3
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|
29.7
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|
67.0
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|
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Defense, First Response & Healthcare
|
54.3
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|
43.0
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|
97.3
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|
|
50.1
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|
40.4
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|
90.5
|
|
|
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Net sales
|
$
|
128.3
|
|
$
|
147.1
|
|
$
|
275.4
|
|
|
$
|
107.0
|
|
$
|
135.7
|
|
$
|
242.7
|
|
|
The Company’s performance obligations are satisfied at a point in time. With the reclassification of our Superform business as discontinued operations, none of the Company's revenue from continuing operations is satisfied over time. As a result, the Company's contract receivables, contract assets and contract liabilities are included within current assets and liabilities held-for-sale.
4. Restructuring
The $0.5 million and $2.1 million restructuring charge in the third quarter and first nine months of 2021, respectively, included $0.3 million and $1.0 million, respectively, of further costs associated with the announced closure of Luxfer Gas Cylinders France, and was largely legal and professional fees. The nine months of 2021 also includes $0.9 million of one-time employee termination costs in the Elektron division, largely in relation to the divestiture of our small Luxfer Magtech production facility in Ontario, Canada in the second quarter of 2021.
The $4.2 million and $7.8 million restructuring charge in the third quarter and first nine months of 2020, respectively, was predominantly ($3.3 million and $6.5 million, respectively) the result of further costs associated with the announced closure of Luxfer Gas Cylinders France, including one-time employee costs and associated legal and professional fees. In addition we incurred one-time employee costs in relation to COVID-led cost saving programs largely affecting our Elektron Division, of $0.9 million and $1.3 million in the third quarter and first nine months of 2020, respectively.
Restructuring-related costs included within Restructuring charges in the Condensed Consolidated Financial Statements by reportable segment were as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Year-to-date
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|
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In millions
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|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Severance and related costs
|
|
|
|
|
|
|
|
|
|
|
Gas Cylinders
|
|
$
|
0.5
|
|
|
$
|
3.3
|
|
|
$
|
1.1
|
|
|
$
|
6.7
|
|
|
|
Elektron
|
|
—
|
|
|
0.9
|
|
|
1.0
|
|
|
1.0
|
|
|
|
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
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|
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|
|
|
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|
|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Total restructuring charges
|
|
$
|
0.5
|
|
|
$
|
4.2
|
|
|
$
|
2.1
|
|
|
$
|
7.8
|
|
|
4. Restructuring
Activity related to restructuring, recorded in Other current liabilities in the consolidated balance sheets is summarized as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
2021
|
|
|
|
|
Balance at January 1,
|
$
|
9.0
|
|
|
|
|
|
Costs incurred
|
2.1
|
|
|
|
|
|
Cash payments and other
|
(2.5)
|
|
|
|
|
|
Balance at September 26,
|
$
|
8.6
|
|
|
|
|
5. Acquisition and disposal related costs
On March 15, 2021 the Company completed the acquisition of the Structural Composites Industries LLC (SCI) business of Worthington Industries, Inc., based in Pomona, California, for $19.3 million cash consideration. The acquisition of SCI strengthens Luxfer’s composite cylinder offerings and aligns with recent investment to enhance our alternative fuel capabilities to capitalize on the growing compressed natural gas (CNG) and hydrogen opportunities.
At the Third Quarter of 2021 the purchase price allocation was ongoing and therefore a provisional allocation was presented. During the ongoing review of the purchase price allocation in the Third Quarter there has been a reallocation of $0.2 million from inventories to goodwill. No other changes in the purchase price allocation presented at the Second Quarter of 2021 have been identified, although the review remains ongoing.
Acquisition-related costs of $0.6 million and $1.5 million incurred in the third quarter and first nine months of 2021 respectively, primarily represent transitional costs and professional fees incurred in relation to the SCI acquisition.
Acquisition-related costs of $0.2 million in the first nine months of 2020 related to M&A exploration activities net of a $0.1 million release of deferred contingent consideration.
In the Third Quarter of 2020 we sold our 51% investment in Luxfer Uttam India Private Limited to our joint venture partner resulting in a gain on sale of less than $0.1 million.
6. Other charges
Other charges of $1.1 million in the first nine months of 2021 relates to the settlement of a class action lawsuit in the Gas Cylinders segment in relation to an alleged historic violation of the Californian Labor Code, concerning a Human Resources administration matter. The Company expects the cash related to the settlement to be paid during the year, with no additional charge to the income statement.
7. Supplementary balance sheet information
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 26,
|
|
December 31,
|
|
|
In millions
|
|
2021
|
|
2020
|
|
|
Accounts and other receivables
|
|
|
|
|
|
|
Trade receivables
|
|
$
|
50.0
|
|
|
$
|
33.6
|
|
|
|
Related parties
|
|
0.2
|
|
|
0.2
|
|
|
Prepayments and accrued income
|
|
6.5
|
|
|
5.5
|
|
|
Derivative financial instruments
|
|
0.1
|
|
|
0.2
|
|
|
Deferred consideration
|
|
0.9
|
|
|
0.2
|
|
|
Other receivables
|
|
1.3
|
|
|
3.4
|
|
|
Total accounts and other receivables
|
|
$
|
59.0
|
|
|
$
|
43.1
|
|
|
|
Inventories
|
|
|
|
|
|
|
Raw materials and supplies
|
|
$
|
36.2
|
|
|
$
|
26.2
|
|
|
|
Work-in-process
|
|
23.7
|
|
|
19.7
|
|
|
|
Finished goods
|
|
20.7
|
|
|
22.9
|
|
|
|
Total inventories
|
|
$
|
80.6
|
|
|
$
|
68.8
|
|
|
|
Other current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax receivable
|
|
1.3
|
|
|
1.5
|
|
|
|
Total other current assets
|
|
$
|
1.3
|
|
|
$
|
1.5
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
|
|
Land, buildings and leasehold improvements
|
|
$
|
67.0
|
|
|
$
|
65.2
|
|
|
|
Machinery and equipment
|
|
265.6
|
|
|
255.3
|
|
|
|
Construction in progress
|
|
6.5
|
|
|
7.8
|
|
|
|
Total property, plant and equipment
|
|
339.1
|
|
|
328.3
|
|
|
|
Accumulated depreciation and impairment
|
|
(250.6)
|
|
|
(242.3)
|
|
|
|
Total property, plant and equipment, net
|
|
$
|
88.5
|
|
|
$
|
86.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current liabilities
|
|
|
|
|
|
|
Restructuring related liabilities
|
|
$
|
8.6
|
|
|
$
|
9.0
|
|
|
|
Contingent liabilities
|
|
1.5
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
0.1
|
|
|
0.4
|
|
|
|
Operating lease liability
|
|
1.1
|
|
|
2.9
|
|
|
|
Other current liabilities
|
|
1.6
|
|
|
0.1
|
|
|
|
Total other current liabilities
|
|
$
|
12.9
|
|
|
$
|
13.5
|
|
|
|
Other non-current liabilities
|
|
|
|
|
|
|
Contingent liabilities
|
|
$
|
0.6
|
|
|
$
|
1.0
|
|
|
|
|
|
|
|
|
|
|
Operating lease liability
|
|
10.7
|
|
|
6.7
|
|
|
|
|
|
|
|
|
|
|
Total other non-current liabilities
|
|
$
|
11.3
|
|
|
$
|
7.7
|
|
|
7. Supplementary balance sheet information (continued)
In 2020, the Company classified its Superform aluminum superplastic forming business operating from sites in the U.S. and the U.K, and our U.S. aluminum gas cylinder business, as assets and liabilities held-for-sale in accordance with ASC 205-20 Discontinued Operations. See Note 10 for a breakdown of this disposal group.
Our U.S. aluminum gas cylinder business was sold during the First Quarter of 2021 and our U.K. Superform business was sold during the Third Quarter of 2021.
The respective assets and liabilities of the above disposal group have been reclassified as held-for-sale also included within assets held-for-sale, but not disclosed as discontinued operations, in 2021 and 2020 is one building valued at $3.7 million, within our Elektron Segment.
Both of these respective items have been included in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-for-sale assets
|
September 26,
|
|
December 31,
|
|
|
In millions
|
2021
|
|
2020
|
|
|
Property, plant and equipment
|
$
|
4.8
|
|
|
$
|
11.6
|
|
|
|
Right-of-use-assets from operating leases
|
0.4
|
|
|
3.1
|
|
|
|
Inventory
|
2.7
|
|
|
12.6
|
|
|
|
Accounts and other receivables
|
2.6
|
|
|
8.7
|
|
|
|
Held-for-sale assets
|
$
|
10.5
|
|
|
$
|
36.0
|
|
|
|
|
|
|
|
|
|
Held-for-sale liabilities
|
|
|
|
|
|
Accounts payable
|
0.6
|
|
|
4.3
|
|
|
|
Accrued liabilities
|
0.1
|
|
|
1.5
|
|
|
|
Other current liabilities
|
1.0
|
|
|
5.6
|
|
|
|
Held-for-sale liabilities
|
$
|
1.7
|
|
|
$
|
11.4
|
|
|
There has been no reclassification of items from other comprehensive income to the income statement as a result of items reclassified to held-for-sale.
8. Goodwill and other identifiable intangible assets
Changes in goodwill during the first nine months ended September 26, 2021, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
Gas Cylinders
|
|
Elektron
|
|
Total
|
|
|
At January 1, 2021
|
$
|
27.9
|
|
|
$
|
42.3
|
|
|
$
|
70.2
|
|
|
|
Additions
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
|
Exchange difference
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
|
Net balance at September 26, 2021
|
$
|
30.6
|
|
|
$
|
42.3
|
|
|
$
|
72.9
|
|
|
Identifiable intangible assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 26, 2021
|
|
December 31, 2020
|
|
|
In millions
|
Gross
|
|
Accumulated amortization
|
|
Net
|
|
Gross
|
|
Accumulated amortization
|
|
Net
|
|
|
Customer relationships
|
$
|
13.4
|
|
|
$
|
(5.5)
|
|
|
$
|
7.9
|
|
|
$
|
13.4
|
|
|
$
|
(5.2)
|
|
|
$
|
8.2
|
|
|
|
Technology and trading related
|
8.3
|
|
|
(4.0)
|
|
|
4.3
|
|
|
8.3
|
|
|
(3.7)
|
|
|
4.6
|
|
|
|
|
$
|
21.7
|
|
|
$
|
(9.5)
|
|
|
$
|
12.2
|
|
|
$
|
21.7
|
|
|
$
|
(8.9)
|
|
|
$
|
12.8
|
|
|
Identifiable intangible asset amortization expense was $0.7 million and $0.6 million for the first nine months of 2021 and 2020, respectively.
Intangible asset amortization expense during the remainder of 2021 and over the next five years is expected to be approximately $0.2 million in 2021, $0.9 million in 2022, $0.9 million in 2023, $0.9 million in 2024, $0.9 million in 2025 and $0.9 million in 2026.
9. Debt
Debt outstanding was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
September 26, 2021
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
4.88% Loan Notes due 2023
|
$
|
25.0
|
|
|
$
|
25.0
|
|
|
|
4.94% Loan Notes due 2026
|
25.0
|
|
|
25.0
|
|
|
|
Revolving credit facility
|
—
|
|
|
4.1
|
|
|
|
|
|
|
|
|
|
Unamortized debt issuance costs
|
(0.4)
|
|
|
(0.7)
|
|
|
|
Total debt
|
$
|
49.6
|
|
|
$
|
53.4
|
|
|
|
Less current portion
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Non-current debt
|
$
|
49.6
|
|
|
$
|
53.4
|
|
|
The weighted-average interest rate on the revolving credit facility was 1.63% for the first nine months of 2021 and 2.19% for the full-year 2020.
The maturity profile of the Company's debt, excluding unamortized issuance costs and discounts, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
|
Thereafter
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Notes due 2023
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.0
|
|
|
|
Loan Notes due 2026
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
|
25.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.0
|
|
|
$
|
50.0
|
|
|
Loan notes due and shelf facility
We have been in compliance with the covenants under the Note Purchase and Private Shelf Agreement throughout all of the quarterly measurement dates from and including September 30, 2014, to September 26, 2021.
The Loan Notes due 2023 and 2026, the Shelf Facility and the Note Purchase and Private Shelf Agreement are governed by the law of the State of New York.
Senior Facilities Agreement
The balance outstanding on the revolving credit facility at September 26, 2021, was nil, and at December 31, 2020, was $4.1 million, with $100.0 million undrawn at September 26, 2021 and $145.9 million undrawn at December 31, 2020. During the second quarter of 2021 we reduced our Revolving credit facility to $100.0 million, from $150.0 million.
The current banking facilities are due to expire July 31, 2022, however, a new facility is expected to be signed on October 26, 2021. See Note 16 for additional information.
We have been in compliance with the covenants under the Senior Facilities Agreement throughout all of the quarterly measurement dates from and including September 30, 2011, to September 26, 2021.
10. Discontinued Operations
Our Superform aluminum superplastic forming business which operated from sites in the U.S. and the U.K, and our U.S. aluminum gas cylinder business were historically included in the Gas Cylinders segment. As a result of our decision to exit non-strategic aluminum product lines, we have reflected the results of operations of these businesses as discontinued operations in the Condensed Consolidated Statements of Income for all periods presented.
Our U.S. aluminum gas cylinder business was sold in March 2021 for $21.0 million. Subsequent to the First Quarter, $0.8 million of working capital adjustments were made, resulting in final proceeds of $20.2 million.
In September 2021, our Superform U.K. business was sold for $4.1 million, made up of $3.5 million cash received and $0.6 million of non-contingent, deferred consideration,receivable by September 30, 2022.
We expect our Superform U.S business to be sold within the next twelve months.
10. Discontinued Operations (continued)
The assets and liabilities of the Superform U.S. business has been presented within Current assets held-for-sale and Current liabilities held-for-sale in the consolidated balance sheets for 2021 and 2020. Our Superform U.K. and U.S. aluminum gas cylinders business, along with our Superform U.S business has been presented within Current assets held-for-sale and Current liabilities held-for-sale in 2020. The Company has determined that the carrying value of the held-for-sale assets is recoverable and as a result no loss allowances have been recognized.
Results of discontinued operations were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Net sales
|
$
|
4.9
|
|
|
$
|
12.7
|
|
|
|
$
|
19.5
|
|
|
$
|
41.0
|
|
|
|
Cost of goods sold
|
(4.7)
|
|
|
(13.3)
|
|
|
|
(20.4)
|
|
|
(40.4)
|
|
|
|
Gross profit / (loss)
|
$
|
0.2
|
|
|
$
|
(0.6)
|
|
|
|
$
|
(0.9)
|
|
|
$
|
0.6
|
|
|
|
Selling, general and administrative expenses
|
(1.4)
|
|
|
(1.4)
|
|
|
|
(3.1)
|
|
|
(4.1)
|
|
|
|
Restructuring charges
|
—
|
|
|
(0.1)
|
|
|
|
—
|
|
|
(0.1)
|
|
|
|
Other income
|
—
|
|
|
2.3
|
|
|
|
—
|
|
|
2.3
|
|
|
|
Operating (loss) / profit
|
$
|
(1.2)
|
|
|
$
|
0.2
|
|
|
|
$
|
(4.0)
|
|
|
$
|
(1.3)
|
|
|
|
Tax credit
|
0.5
|
|
|
—
|
|
|
|
1.2
|
|
|
—
|
|
|
|
Net (loss) / income
|
$
|
(0.7)
|
|
|
$
|
0.2
|
|
|
|
$
|
(2.8)
|
|
|
$
|
(1.3)
|
|
|
The earnings per share for discontinued operations for the first nine months of 2021 and 2020 was $0.14 and a loss of $0.05, respectively. The positive result in 2021 was the result of the $6.6 million gain on disposition of discontinued operations, partially offset by the $2.8 million loss from operations.
In the First Quarter of 2021, the Company sold its U.S. aluminum gas cylinders business for $20.2 million, after working capital adjustments, which resulted in a gain on sale of $6.7 million, net of a $2.0 million tax charge which was recognized in the First Quarter of 2021.
In the Third Quarter of 2021, the Company recorded a $0.1 million loss on the sale of the Superform U.K business, see below table. There was an additional $0.4 million true up to working capital in relation to the Graham disposal, resulting in a total $0.5 million loss on disposition in the quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
|
In millions
|
2021
|
|
|
Cash consideration received
|
$
|
3.5
|
|
|
|
Deferred consideration payable
|
0.6
|
|
|
|
Less
|
|
|
|
Net assets sold
|
(4.2)
|
|
|
|
Gross loss on disposition
|
(0.1)
|
|
|
|
Provision for income taxes
|
—
|
|
|
|
Net loss on disposition
|
$
|
(0.1)
|
|
|
10. Discontinued Operations (continued)
The assets and liabilities classified as held-for-sale related to discontinued operations were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-for-sale assets
|
September 26,
|
|
December 31,
|
|
|
In millions
|
2021
|
|
2020
|
|
|
Property, plant and equipment
|
$
|
1.1
|
|
|
$
|
7.9
|
|
|
|
Right-of-use-assets from operating leases
|
0.4
|
|
|
3.1
|
|
|
|
Inventory
|
2.7
|
|
|
12.6
|
|
|
|
Accounts and other receivables
|
2.6
|
|
|
8.7
|
|
|
|
Held-for-sale assets
|
$
|
6.8
|
|
|
$
|
32.3
|
|
|
|
|
|
|
|
|
|
Held-for-sale liabilities
|
|
|
|
|
|
Accounts payable
|
0.6
|
|
|
4.3
|
|
|
|
Accrued liabilities
|
0.1
|
|
|
1.5
|
|
|
|
Other current liabilities
|
1.0
|
|
|
5.6
|
|
|
|
Held-for-sale liabilities
|
$
|
1.7
|
|
|
$
|
11.4
|
|
|
Also included within assets held-for-sale, but not disclosed as discontinued operations, in 2021 and 2020 is one building valued at $3.7 million, within our Elektron Segment.
The depreciation and amortization, capital expenditures and significant non-cash items were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Cash flows from discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
|
$
|
0.4
|
|
|
$
|
0.8
|
|
|
Cash balances are swept into the treasury entities at the end of each day, these sweeps are recorded within operating cash flows in the statements of cash flows.
11. Income Taxes
We manage our affairs so that we are centrally managed and controlled in the United Kingdom (“U.K.”) and therefore have our tax residency in the U.K. The provision for income taxes consists of provisions for the U.K. and international income taxes. We operate in an international environment with operations in various locations outside the U.K. Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates.
The effective income tax rate on continuing operations for the first none-months ended September 26, 2021, was 12.0%, compared to 28.1% for the first ine-months ended September 27, 2020. The 2021 rate has been impacted by a $2.8 million deferred tax credit as a result of the enacted increase in the U.K. tax rate from 19% to 25% from April 2023.
12. Share Plans
Total share-based compensation expense for the quarters ended September 26, 2021, and September 27, 2020, was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation charges
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
2.2
|
|
|
$
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
In March 2021, we issued our annual share-based compensation grants under the Luxfer Holdings PLC Long-Term Umbrella Incentive Plan. The total number of awards issued was approximately 110,000 and the weighted average fair value of options granted in 2021 was estimated to be $21.14 per share.
Also in March 2021, approximately 45,000 awards were granted based on the achievement of total shareholder return targets from the period January 1, 2018 to December 31, 2020. The awards vested immediately upon grant.
In June 2021, we issued our annual share-based compensation grants under the Luxfer Holdings PLC Non-Executive Directors' Equity Incentive Plan. The total number of awards issued was 19,184 and the weighted-average fair value of options granted was estimated to be $21.69 per share.
The following table illustrates the assumptions used in deriving the fair value of share options granted during 2021 and the year-ended December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
Dividend yield (%)
|
3.39 - 4.09
|
|
3.39 - 4.09
|
|
|
Expected volatility range (%)
|
36.48 - 56.28
|
|
36.48 - 56.28
|
|
|
Risk-free interest rate (%)
|
0.18 - 0.49
|
|
0.18 - 0.49
|
|
|
Expected life of share options range (years)
|
0.50 - 4.00
|
|
0.50 - 4.00
|
|
|
Forfeiture rate
|
5.00
|
|
|
5.00
|
|
|
|
Weighted average exercise price ($)
|
$1.00
|
|
$1.00
|
|
|
Model used
|
Black-Scholes & Monte-Carlo
|
|
Black-Scholes & Monte-Carlo
|
|
The expected life of the share options is based on historical data and current expectations, and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.
13. Shareholders' Equity
Dividends paid and proposed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Dividends declared and paid during the year:
|
|
|
|
|
|
|
|
|
|
Interim dividend paid February 5, 2020 ($0.125 per ordinary share)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
|
Interim dividend paid May 6, 2020 ($0.125 per ordinary share)
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
|
Interim dividend paid August 5, 2020 ($0.125 per ordinary share)
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
|
Interim dividend paid February 4, 2021 ($0.125 per ordinary share)
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
|
Interim dividend paid May 5, 2021 ($0.125 per ordinary share)
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
|
Interim dividend paid August 4, 2021 ($0.125 per ordinary share)
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
|
|
$
|
3.4
|
|
|
$
|
3.4
|
|
|
$
|
10.2
|
|
|
$
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
2021
|
|
2020
|
|
|
|
|
Dividends declared and paid after the quarter end (not recognized as a liability at the quarter end):
|
|
|
|
|
|
|
|
Interim dividend declared October 5, and to be paid November 4, 2020 ($0.125 per ordinary share)
|
$
|
—
|
|
|
$
|
3.4
|
|
|
|
|
|
Interim dividend declared October 5, and to be paid November 3, 2021 ($0.125 per ordinary share)
|
3.4
|
|
|
—
|
|
|
|
|
|
|
$
|
3.4
|
|
|
$
|
3.4
|
|
|
|
|
Based on a share buyback program approved by shareholders at the 2021 Annual General Meeting, in the Third Quarter the company purchased 88,734 total shares for $1.9 million; year to date purchases were 126,734 total shares for $2.8 million. Of the 126,734 repurchased in the year, 56,000 have been canceled with the remaining 70,374 retained within Treasury shares.
14. Segmental Information
We classify our operations into two core business segments, Gas Cylinders and Elektron, based primarily on shared economic characteristics for the nature of the products and services; the nature of the production processes; the type or class of customer for their products and services; the methods used to distribute their products or provide their services; and the nature of the regulatory environment. The Company has four identified business units, which aggregate into the two reportable segments. Luxfer Gas Cylinders forms the Gas Cylinders segment, and Luxfer MEL Technologies, Luxfer Magtech and Luxfer Graphic Arts aggregate into the Elektron segment. The Superform business unit used to aggregate into the Gas Cylinders segment, but is now recognized as discontinued operations. A summary of the operations of the segments is provided below:
Gas Cylinders segment
Our Gas Cylinders segment manufactures and markets specialized products using composites and aluminum, including pressurized cylinders for use in various applications including self-contained breathing apparatus (SCBA) for firefighters, containment of oxygen and other medical gases for healthcare, alternative fuel vehicles, and general industrial.
Elektron segment Our Elektron segment focuses on specialty materials based primarily on magnesium and zirconium, with key product lines including advanced lightweight magnesium alloys with a variety of uses across a variety of industries; magnesium powders for use in countermeasure flares, as well as heater meals; photoengraving plates for graphic arts; and high-performance zirconium-based materials and oxides used as catalysts and in the manufacture of advanced ceramics, and many other performance products.
Other
Other primarily represents unallocated corporate expense and includes non-service related defined benefit pension cost / credit.
Management monitors the operating results of its reportable segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated by the chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments as the CEO, using adjusted EBITA(1) and adjusted EBITDA, which we defined as segment income and are based on operating income adjusted for share based compensation charges; loss on disposal of property, plant and equipment; restructuring charges; impairment charges; acquisition and disposal related gains and costs; other charges; depreciation and amortization; and unwind of the discount on deferred consideration.
1 Adjusted EBITA is adjusted EBITDA less depreciation
Unallocated assets and liabilities include those which are held on behalf of the Company and cannot be allocated to a segment, such as taxation, investments, cash, retirement benefits obligations, bank and other loans and holding company assets and liabilities.
Financial information by reportable segment for the Third Quarter and year-to-date ended September 26, 2021, and September 27, 2020, is included in the following summary:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
Adjusted EBITDA
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Gas Cylinders segment
|
$
|
45.6
|
|
|
$
|
32.3
|
|
|
$
|
128.3
|
|
|
$
|
107.0
|
|
|
$
|
5.4
|
|
|
$
|
7.1
|
|
|
$
|
16.7
|
|
|
$
|
16.6
|
|
|
|
Elektron segment
|
45.6
|
|
|
45.4
|
|
|
147.1
|
|
|
135.7
|
|
|
8.4
|
|
|
6.6
|
|
|
32.1
|
|
|
23.5
|
|
|
|
Consolidated
|
$
|
91.2
|
|
|
$
|
77.7
|
|
|
$
|
275.4
|
|
|
$
|
242.7
|
|
|
$
|
13.8
|
|
|
$
|
13.7
|
|
|
$
|
48.8
|
|
|
$
|
40.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization(1)
|
|
Restructuring charges
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Gas Cylinders segment
|
$
|
1.4
|
|
|
$
|
1.0
|
|
|
$
|
3.9
|
|
|
$
|
2.8
|
|
|
$
|
0.5
|
|
|
$
|
3.3
|
|
|
$
|
1.1
|
|
|
$
|
6.7
|
|
|
|
Elektron segment
|
2.4
|
|
|
2.4
|
|
|
7.3
|
|
|
7.2
|
|
|
—
|
|
|
0.9
|
|
|
1.0
|
|
|
1.0
|
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
|
Consolidated
|
$
|
3.8
|
|
|
$
|
3.4
|
|
|
$
|
11.2
|
|
|
$
|
10.0
|
|
|
$
|
0.5
|
|
|
$
|
4.2
|
|
|
$
|
2.1
|
|
|
$
|
7.8
|
|
|
(1) Depreciation and amortization includes the expense recognized in relation to assets, and excludes amortization of debt issue costs.
14. Segmental Information (continued)
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
Capital expenditures
|
|
|
|
September 26,
|
|
December 31,
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Gas Cylinders segment
|
$
|
128.3
|
|
|
$
|
99.7
|
|
|
|
|
$
|
0.2
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
1.7
|
|
|
|
Elektron segment
|
194.8
|
|
|
189.7
|
|
|
|
|
1.8
|
|
|
0.9
|
|
|
4.9
|
|
|
3.4
|
|
|
|
Other
|
40.3
|
|
|
24.7
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Discontinued operations
|
6.9
|
|
|
32.3
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Consolidated
|
$
|
370.3
|
|
|
$
|
346.4
|
|
|
|
|
$
|
2.0
|
|
|
$
|
1.6
|
|
|
$
|
5.6
|
|
|
$
|
5.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
September 26,
|
|
December 31,
|
|
|
|
|
In millions
|
|
2021
|
|
2020
|
|
|
|
|
U.S.
|
|
$
|
47.4
|
|
|
$
|
44.3
|
|
|
|
|
|
United Kingdom
|
|
36.3
|
|
|
36.6
|
|
|
|
|
|
Canada
|
|
3.4
|
|
|
3.7
|
|
|
|
|
|
Rest of Europe
|
|
1.1
|
|
|
1.1
|
|
|
|
|
|
Asia Pacific
|
|
0.3
|
|
|
0.3
|
|
|
|
|
|
|
$
|
88.5
|
|
|
$
|
86.0
|
|
|
|
|
The following table presents a reconciliation of Adjusted EBITDA to net income from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
In millions
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Adjusted EBITDA
|
$
|
13.8
|
|
|
$
|
13.7
|
|
|
$
|
48.8
|
|
|
$
|
40.1
|
|
|
|
Other share-based compensation charges
|
(0.8)
|
|
|
(0.8)
|
|
|
(2.2)
|
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
(3.8)
|
|
|
(3.4)
|
|
|
(11.2)
|
|
|
(10.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
(0.5)
|
|
|
(4.2)
|
|
|
(2.1)
|
|
|
(7.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and disposal related costs
|
(0.6)
|
|
|
—
|
|
|
(1.5)
|
|
|
(0.2)
|
|
|
|
Other charges
|
—
|
|
|
—
|
|
|
(1.1)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefits pension credit
|
0.6
|
|
|
1.1
|
|
|
1.8
|
|
|
3.3
|
|
|
|
Interest expense, net
|
(0.8)
|
|
|
(1.2)
|
|
|
(2.4)
|
|
|
(3.5)
|
|
|
|
Provision for income taxes
|
(1.9)
|
|
|
(2.8)
|
|
|
(3.6)
|
|
|
(5.6)
|
|
|
|
Net income from continuing operations
|
$
|
6.0
|
|
|
$
|
2.4
|
|
|
$
|
26.5
|
|
|
$
|
14.2
|
|
|
14. Segmental Information (continued)
The following tables present certain geographic information by geographic region for the Third Quarter and year-to-date ended September 26, 2021, and September 27, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales(1)
|
|
|
|
Third Quarter
|
|
Year-to-date
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
$M
|
Percent
|
|
$M
|
Percent
|
|
$M
|
Percent
|
|
$M
|
Percent
|
|
|
United States
|
$
|
49.4
|
|
54.2
|
%
|
|
$
|
41.1
|
|
52.9
|
%
|
|
$
|
151.8
|
|
55.1
|
%
|
|
$
|
132.8
|
|
54.8
|
%
|
|
|
U.K.
|
6.5
|
|
7.1
|
%
|
|
4.1
|
|
5.3
|
%
|
|
17.5
|
|
6.4
|
%
|
|
13.8
|
|
5.7
|
%
|
|
|
Germany
|
5.1
|
|
5.6
|
%
|
|
3.1
|
|
4.0
|
%
|
|
13.2
|
|
4.8
|
%
|
|
11.0
|
|
4.5
|
%
|
|
|
France
|
2.6
|
|
2.9
|
%
|
|
4.9
|
|
6.3
|
%
|
|
9.3
|
|
3.4
|
%
|
|
14.0
|
|
5.8
|
%
|
|
|
Italy
|
3.5
|
|
3.8
|
%
|
|
1.9
|
|
2.4
|
%
|
|
9.5
|
|
3.4
|
%
|
|
8.1
|
|
3.3
|
%
|
|
|
Top five countries
|
$
|
67.1
|
|
73.6
|
%
|
|
$
|
55.1
|
|
70.9
|
%
|
|
$
|
201.3
|
|
73.1
|
%
|
|
$
|
179.7
|
|
74.1
|
%
|
|
|
Rest of Europe
|
4.9
|
|
5.4
|
%
|
|
5.8
|
|
7.5
|
%
|
|
19.0
|
|
6.9
|
%
|
|
18.1
|
|
7.5
|
%
|
|
|
Asia Pacific
|
13.7
|
|
15.0
|
%
|
|
12.1
|
|
15.6
|
%
|
|
38.1
|
|
13.8
|
%
|
|
32.9
|
|
13.5
|
%
|
|
|
Other (2)
|
5.5
|
|
6.0
|
%
|
|
4.7
|
|
6.0
|
%
|
|
17.0
|
|
6.2
|
%
|
|
12.0
|
|
4.9
|
%
|
|
|
|
$
|
91.2
|
|
|
|
$
|
77.7
|
|
|
|
$
|
275.4
|
|
|
|
$
|
242.7
|
|
|
|
(1) Net sales are based on the geographic destination of sale.
(2) Other includes Canada, South America, Central America and Africa.
15. Commitments and Contingencies
Committed and uncommitted banking facilities
The Company had committed banking facilities of $100.0 million at September 26, 2021 and $150.0 million at December 31, 2020. Of these committed facilities, nil was drawn at September 26, 2021 and $4.1 million was drawn at December 31, 2020. The current banking facilities are due to expire July 31, 2022, however, a new facility is expected to be signed on October 26, 2021. See Note 16 for additional information.
The Company had a separate (uncommitted) facility for letters of credit which at September 26, 2021 was £1.0 million ($1.4 million) and December 31, 2020 was £1.0 million ($1.3 million). None of these were utilized at September 26, 2021 and December 31, 2020, respectively.
The Company also has two separate (uncommitted) bonding facilities for bank guarantees, one denominated in GBP sterling of £4.5 million (2021: $6.2 million, 2020: $6.1 million), and one denominated in USD of $1.5 million (2020: $1.5 million). Of that dominated in GBP, £0.6 million ($0.8 million) and £1.0 million ($1.4 million) was utilized at September 26, 2021, and December 31, 2020, respectively. Of that denominated in USD, $0.9 million was utilized at September 26, 2021 and $0.8 million was utilized at December 31, 2020.
The Company also has a $4.0 million separate overdraft facility of which none was drawn at September 26, 2021 and at December 31, 2020. The Company has various uncommitted transitional banking and foreign exchange lines available for day-to-day operational purposes.
15. Commitments and Contingencies (continued)
Contingencies
During February 2014, a cylinder was sold to a long-term customer and ruptured at one of their gas facilities. As a result of this rupture, three people were noted to have injuries such as loss of hearing. There was no major damage to assets of the customer. A claim has been launched by the three people who were injured in the incident. We have reviewed our quality control checks from around the time which the cylinder was produced and no instances of failures have been noted. As a result we do not believe that we are liable for the incident, and therefore, do not currently expect this case to have a material impact on the Company's financial position or results of operations.
In November 2018, an explosion occurred at a third-party waste disposal and treatment site in Boise,
Idaho, allegedly causing property damage, personal injury, and one fatality. We had contracted with a service
company for removal and disposal of certain waste resulting from the magnesium powder manufacturing
operations at the Reade facility in Manchester, New Jersey. We believe this service company, in turn, apparently
contracted with the third-party disposal company, at whose facility the explosion occurred, for treatment and
disposal of the waste. In November 2020, we were named as a defendant in three lawsuits in relation to the
incident – one by the third-party disposal company, one by the estate of the decedent, and one by an injured
employee of the third-party disposal company. At present, we have received insufficient information on the cause
of the explosion. We do not believe that we are liable for the incident, have asserted such, and, therefore, do not
currently expect this matter to have a material impact on the Company’s financial position or results of
operations.
16. Subsequent Events
In October 2021, Luxfer has agreed a new five year, $100.0 million revolving credit facility, ("RCF") which is expected to become effective on October 26, 2021, with no material changes to the financial covenants but with improvements to other restrictive terms. The revised terms include an uncommitted, $50.0 million accordion facility.
The existing $50.0 million US private placement notes will also be amended in line with the new RCF terms. Additionally, the amendment includes a $50.0 million, uncommitted shelf facility available to issue long-term notes for up to three years from the effective date.