LXFR - Earnings call transcript Q2 2024

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Operator

Good morning. My name is Todd, and I will be your conference operator today. Welcome to Luxfer's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Now I will turn the call over to Kevin Grant, Vice President of Investor Relations and Business Development at Luxfer. Kevin, please go ahead.

Kevin Grant

good and Todd, you, morning, everyone. Thank Luxfer's to Second Quarter Call. Conference Earnings XXXX Welcome be results Luxfer's quarter morning, reviewing This we'll financial XX, ended XXXX. for June second the Executive by I'm Officer. Financial Butcher, joined to Steve today pleased our our be Chief Officer; Chief and Webster, Andy

note, accompanied in Please the the references Today's appendix at webcast can accessed financials a of by is to that non-GAAP presentation be luxfer.com. any reconciled are presentation.

are company's subject reminder that future any statements of expected begin, financial We we the the presentation results statements, whether uncertainties. to a further friendly and of as Before obligation X a or today's for events safe refer update to otherwise. future forward-looking made risks to forward-looking statement no harbor result details. Slide about undertake information, Please new any on

second business. we'll today's that to Graphic Arts call, During review on providing divest exclude be decision XXXX results strategic our based that financial quarter adjusted

introduce CEO, to let Now Please ahead. Andy, please turn X. Slide Luxfer's go me Andy Butcher.

Andrew William Butcher

Thank deliver us. to The you, made you for the continued team and morning, joining good steady progress results quarter. Kevin, Luxfer in second Thank good everyone. and

While we sequential quarters in delivered enhancing in achieved . sequential markets, face performance. certain consecutive half we throughout X solid reflecting in profitability and flow the our success we of cash sales, first improvement XXXX, challenges of our financial

encouraging. we X.X% The as $XX.X SCBA defense XX.X% markets. is from increase in and year-over-year but to demand a still in million, strength for applications the quarter down at in recovery came Sales QX XXXX, see markets sequential is the across continue variable

a and improvement EBITDA making earnings headway. share reached of of from we the overall the $XX.X achieved We are quarter While an remains adjusted $X.XX. per previous soft, adjusted XX% million, market

We balance with historical Solid underlying expectations. leverage by timing a a amount healthy of operating X.Xx. quarter and million complemented the was recovery costs sheet exceeding of the previous $X.X cash business this delivered million maintaining both $X.X with legal the in of performance net

expect us Looking our first our well for in have positions The outlook XXXX. and accelerate to a XXXX the of ahead, momentum guidance. we in the steady to meet half of year full year the remainder trajectory

carefully on will trends ongoing our navigate as are resources they to recovery manage and operational and decisions capitalize both develop. challenges to positioning long-term for We These continue investment growth. Luxfer

following quarter a with are stages, repositioning XXXX Please losses improve on segment final Now with market strategic process now update Actions a favorable the to potential reaching is of detailed a on and buyer. in to experienced Slide in gradually X. sale quick and our the business. Graphic I'd competitive its review like turn give first taken currently working focus the the to we Graphic the this comprehensive Arts to are XXXX. conditions sell The business Arts closely

We third which sale. completion thereafter adjustments as concentrate expected growth the to the will from areas. and are core asset our the valuation net targeting to of enable made reflect further quarter sale We've early operations proceeds fully as to the on us

by the investments. to and gas growth our by continue segments work important driven costs and strategic we and electron Meanwhile, opportunities, enhance innovation profitable reducing cylinders executing

XXXX our time, detail conditions At future assessing the and the value. remain results market Steve in I'll to quarter shareholder greater with guidance. second to discuss update also to over We Steve? on optionality vigilant this call maximize turn in

Stephen M. Webster

excluding Please second the business. everyone. quarter good bridges start XXXX. for Arts by I'd adjusted morning, note results the Andy, non-GAAP Graphic this our Thanks, on and numbers I morning an any to that financial consolidated refer to reviewing are and like basis,

X. Slide Let's turn to

slide. the at of Looking top the

reached quarter. Adjusted $XX.X sales year, million saw from the second quarter we of prior a from year represents uptick at the for million XX.X% last both and from improvement the margin decline a previous our quarter. $XX.X with XX.X%. prior This While the a significant reflect EBITDA

rose our first share improved earnings Additionally, highlighting adjusted prior profitability. year from $X.XX quarter, and to per our $X.XX $X.XX the in the in

was quarter, share. around contributing strong ending $X.X this flow improved free by solid, net We Stronger from $XX.X with performance $X.XX quarter historic delivered and our million, of X.Xx. legal Cash underlying to liquidity, sheet cost boosted debt million Shifting operations cash. and $X.X leverage the business generating recovery per cash and million. was balance approximately maintained our

the year. our million revenue to last bridge, of $XXX.X sales $XX.X million at Looking compared

million were Here, we of $X.X applications, experienced from encouraged along million. We foreign $X.X $X.X the a million with headwind. defense growth by volume nonetheless general a and exchange industrial decrease sequential

to turning the profit Now bridge.

the Our million, $X.X from previous $XX.X a net other year. from items legal a up benefit and second $X.X million was quarter This from million deflation. includes adjusted benefit and million price $X.X and EBITDA

to from improved quarter's margin EBITDA the last year's XX.X%. XX.X% adjusted Our XX.X% and prior

around of managing margin XXXX in XX.X%, for points Elektron's second but of up over financial end Elektron's sequentially, would quarter margin Please and results. XX% The basis a improved a demonstrating headwinds. effectiveness despite in up for EBITDA sales X,XXX margin reached has costs. X review detailed this, team's consecutive business manufacturing quarters due have been and XX.X%, basis strong efficiencies Without with approximately recovery. its down XX year shows enhancing turn quarter Adjusted to maintaining second year-over-year to market profile. Slide X legal our turnaround profitability from a efficiencies, ago,

lower applications sales, year-over-year and Defense transportation general Despite quarter-over-quarter markets, in within in Healthcare Defense, saw improvement, the industrial. offset improved demand Response First especially we lower was by

the fourth has we the challenging, remains remain in about demand improved long-term from market overall positive and outlook. quarter, its low business the While

year. QX quarter growth with for detailed from by This up Cylinders' The results. the signed and growth a last stabilizing driven self-contained review of Gas in turn Slide contracts was financial please Cylinders apparatus the of market. X.X% Now continued is year-over-year margin X.X% long-term primarily breathing second sales Gas quarter million X. profile with demonstrated in $XX.X to X of QX

sequential Healthcare basis EBITDA and by and to XX while XX.X%, Enhancements adjusted basis increased and up XX.X% improved points. with hold lightweight are hydrogen and the adjusted SCBA structures EBITDA demand driven sales Response particularly margin challenging, slightly demand positive although industrial to points up First Transportation year-over-year, and to margin taking decreased cylinders. for a X.X%. Defense, Gross moderate general XX improvement efficiencies were quarter. margin cost remains market this alternative signs medical slowed, fuels, with for by there some sequential

the Cylinders We the by in revenue profitability profitable for and long-term are and encouraged prospects growth. increased Gas

for full our an Now on please XXXX financial X to year guidance. update turn Slide

Arts include a As business. guidance reminder, not our Graphic XXXX does the

regarding but historical have recent we financial legal our outlook, guidance short-term to to reflect are the amounting raised revenue million. the costs cautious $X.X We recovery of

projected higher to flow be adjusted anticipated million, be now shows between free $X million with and adjusted now EPS diluted to $XX update in million to an between $XX cash million. Our $X.XX our and ranging stronger $XX and EBITDA increase $XX from

continue flow, to investment to growth our down for free also in opportunities balance shareholders. continued enhancing cash cash paying We emphasize maintaining sheet a debt while allowing robust capital -- returning and and

Andy? Now call to Andy. back I'd to the like turn

Andrew William Butcher

you take Thanks, help Steve. want Luxfer drive sustainable to that innovation growth. will I some future highlighting time with the to now

X. Slide to turn Please

Looking future ahead, and preparing focus opportunities. driving long-term for our profitable is growth on

serve The our deliver and executing business guide internal many principles us embedded practices growth to customers tools know, value sustainable that our the important you of and are for this As and system. creation. in Luxfer

our highlighting and the Flameless I'm and systems key Ration our UGR-E the transportation X CNG, new this, of Today, initiatives growth and to launch of uptake use cylinders modules our within support of gas Heater. upcoming bulk

in manufacturer. First, necessary demand we systems positioning meet tank This are All results continuing engine to technology future now stock XXXX. high-pressure global beginning significant CNG and is inventory are increases. expected in initiative for deploy new place product a launch, partner our to drive contribute to growth market-leading positively their and and our to our us with early

modules, Second, the the the next-generation transportation notable growth trailers XXXX. of and development are also hydrosphere drivers packs for multicylinder our

our Clean initiatives our the production have of operations constructing refining in American and Our the cylinder module U.K. transportation Energy facility North in footprint included

the last this new of month, to I And witnessed complete We modules operations. the expect our first indeed, commencement year. manufacturing

launched for to of we've to recent uptake strong efficiency. a effective innovative significantly substantial operational kitchens enhancing an Ration Solutions allows for Third, demonstrated, year. has been simultaneous boost seen meal team our as field Heater last Flameless alternative portfolio. interim whole UGR-E product utility heating a providing a Its market Magtech our This well

critical reinforces element business product aimed X of commitment of our that a XXXX. Luxfer for our just by a exemplified in milestones revenue line This to plan support Innovation, the self-help is the achieving is cohesive mentioned, at significant initiatives part and system I actions the future.

capitalizing the ahead of We and opportunities them. are about on committed excited to us

XX. Slide Now please to turn

we've are of amid progress significant We market made challenging proud a landscape. the

in in strategic and improvements and resilience execution long-term our sequential success. both my reinforcing achieved We have our demonstrating confidence profitability, and sales

supporting to and continue balance flow, emphasize strong We shareholders. to our cash a group and free investments returning sheet capital generating

We've seen focus optimizing from and our consistent operations. processes improvements on margin streamlining our

productivity We will control effectively. costs enhance to continue and

our are Arts Our track The clean us sale for notable beyond. smoothly allowing gas focus the core including transportation in XXXX to to positioning and CNG Graphic in bulk on strategies, and expectations, areas. the business energy progressing growth and advancements business growth on of is

guidance. path commitment for full on our driving to of XXXX enhancing the underscore results value We performance. accomplishments remainder these our to clear delivering a focused year remain All and with achieving

innovation on and Our sustainable focus leveraging strategic materials delivering long-term fostering growth. engineering expertise, remains our

With the back session. call ahead. that, please I'd to Q&A Todd, go to the the for like turn operator

Operator

Instructions] with from come first question will [Operator Sidoti. Our Ferazani Steve

Steve Ferazani

guidance what's obviously, It of last a looks legal came And on negative in the did changed outlook? that your terms the Can going to slightly back about more I down growth But bit. sense of bit. EPS recovery. ask million down you we're give high $X your because we like little a if us on in months out, in is your X want sales guidance the congratulations a expense end

Andrew William Butcher

Andy. Thanks, Steve. This is

made first underscore by I'm we've me that very of encouraged progress over all, the last the X months. Let

seen -- have Elektron have certain demand been Gas initial in made in across and robust the optimizations operational The our Cylinders expected performance the We we've a the of successful. applications recovery segment.

motivated Our engaged. teams are and

especially as of the midpoint, legal in solid half up from guidance. cost execution in recovery. million Steve, the And business our $X.X We're yes, half we're coming $X.XXX At the latter first those from shape, a on initial enter we year. the good of year. That's the

Steve Ferazani

bit about it. Okay. that? to exposure earlier talk in know a in come to -- could that which people sounded And XXXX. starting lot It than think mentioned are very like I said it a are CNG the you think of you it. benefit little reason you it's a Any engine, Can involved have excited you

Andrew William Butcher

I'm excited bit And We're talk in we coming had a Yes. prepared that out. glad opportunity little engine really that's to remarks. about the this new about

of launching the and XXXN. in new the process part the As extended -- trucks. heavy-duty you in this CNG adoption know, to create in emissions. Cummins of are the It's It's range expected engine, fuels clean reduced offering

of seen high-performance versus almost increased from we've our $X cylinders demand for XXXX. by So already already that. increased some that Sales year-to-date, XXXX have million lightweight

it's a see yes, in towards but of of guidance notable follow-on modeling that But prebuilt. as we We're our drive some opportunity the that some It's product if the us is once the could gets in things pump upside for XXXX. the priming the the that for product in Now, marketplace. of see demand should some strong us launch, demand traction QX. one we

Steve Ferazani

running also the I modules impact? that now? and as And thinking gas the well, that just if a could ask up is And U.K. more about of XXXX you're plant. Is Great.

Andrew William Butcher

in We'll from XXXX. that later see some benefit

manufacturing couple the a just constructed first saw and that of weeks go start I facility just module facility, all ago. So through the a is to

means have at first right transporting lightweight for mean this year might in modules the this of intention So excited very the indeed, future. first or what of to modules the the market end year. and to a module gas our the introducing built . It's sale

gives for about slight yes, uptick it a excited So XXXX. us XXXX very And then and that in beyond.

and our million for see will You'll higher meaningful that all modules. contributor notable We XXXX. be recall in in has facility perhaps XXXX, won't of the it to a $XX of total but capacity that sales a

Steve Ferazani

and getting I get that the on If up in, more Graphic of running. just Fantastic. one Arts update the Congratulations timing on could sale.

said comment not Can that that? a you Sounded better. bit in really pricing? that commentary, the have any on getting little Does was on you impact business like

Andrew William Butcher

how Steve I'll is that. him with let comment Very that's pleased that us. going, running for on and process

Stephen M. Webster

Steve, by remarks, terms as Yes. schedule ahead good the we we slightly of I mean, said progress. of what prepared the in said the We of year. previously. it's had probably end making It's in said

we exclusive believe the buyer. closing getting an working project. that with stages of And are towards we So we're

think. So X but most things I we're these quarter certainly targeting X. But is quarter likely, it slip, obviously, for certainly can

terms have we the adjustments have price, asset noted In some I mean, made you may to of value.

expectations. business be we just part in expecting the important $X lower year has to It's So, $X.X did recognize it It are previous best $X lose million million to quarter to our slightly and breakeven. than of approached last that this million X.

some there it's So is turning that sign around.

was little But bit. -- has nonetheless, struggled it a it

expected bit have we So there. the a to little fall price

a very prospective suitors. run process of comprehensive have though over XXX We

So we the the circumstances. get can that we believe we for price in will best business

Operator

this Thank questions closing call I'll more back Andy turn remarks. you. to the There the CEO, no Butcher, time. were queue at in for

Andrew William Butcher

a like market to Todd. landscape. closing, In challenging the Thank I'd made you, we've reiterate amid progress significant

and strategic We have in both improvements and sales resilience achieved our execution. underscoring sequential profitability,

in position for on sheet, balance initiatives XXXX clean growth strong Our sustainable energy and in strategic beyond. efficiencies well and us operational focus

and shareholders. in to Thank to for continued our next confidence committed Luxfer. remain forward progress for your We our performance on delivering and quarter. We updating look you enhancing you support value

Operator

This available A concludes a XXXX this Call. be Luxfer website Luxfer's at recording will the about recording on link will of be in available www.luxfer.com. conference of call X QX to A hours. this webcast Earnings

Luxfer (LXFR) 31 Jul 242024 Q2 Earnings call transcript