LUXFER HOLDINGS PLC [LXFR] Filings

10-Q 1 lxfr-20240630.htm 10-Q lxfr-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-35370

Luxfer Holdings PLC

(Exact Name of Registrant as Specified in Its Charter)


England and Wales						98-1024030
State or Other Jurisdiction of Incorporation or Organization						I.R.S. Employer Identification No.

8989 North Port Washington Road, Suite 211,

Milwaukee, WI, 53217

Address of principal executive offices

Registrant’s telephone number, including area code: +1 414-269-2419

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, nominal value £0.50 each	LXFR	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.:


Large accelerated filer	o	Accelerated Filer	x
Non-accelerated filer	o	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

The number of shares outstanding of Registrant’s only class of ordinary stock on June 30, 2024, was 27,386,677.


TABLE OF CONTENTS

Page

PART I FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (unaudited)

Condensed Consolidated Statements of (Loss) / Income (unaudited)

Condensed Consolidated Statements of Comprehensive Income (unaudited)

Condensed Consolidated Balance Sheets (unaudited)

Condensed Consolidated Statements of Cash Flows (unaudited)

Condensed Consolidated Statements of Changes in Equity (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.

Exhibits

Signatures

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) / INCOME (UNAUDITED)


	Second Quarter				Year-to-date
In millions, except share and per-share data	2024		2023		2024		2023
Net sales	$	99.7	$	110.4	$	189.1	$	211.7
Cost of goods sold	(77.7)		(86.2)		(148.7)		(166.4)
Gross profit	22.0		24.2		40.4		45.3
Selling, general and administrative expenses	(11.9)		(12.8)		(23.5)		(25.3)
Research and development	(1.1)		(1.0)		(2.3)		(2.2)
Restructuring charges	(1.1)		(2.5)		(1.8)		(2.8)

Acquisition and disposal related costs	(9.2)		—		(9.4)		—
Other income	5.1		—		5.3		—

Operating income	3.8		7.9		8.7		15.0
Net interest expense	(1.3)		(1.8)		(2.7)		(3.1)

Defined benefit pension credit / (charge)	0.2		0.6		0.5		(8.3)
Income before income taxes	2.7		6.7		6.5		3.6
(Provision) / credit for income taxes	(3.1)		(1.8)		(4.1)		1.8


Net (loss) / income from continuing operations	(0.4)		4.9		2.4		5.4

Loss from discontinued operations, net of tax	(0.1)		(0.2)		(0.2)		(0.2)

Net loss from discontinued operations	(0.1)		(0.2)		(0.2)		(0.2)

Net (loss) / income	$	(0.5)	$	4.7	$	2.2	$	5.2

(Loss) / earnings / per share1
Basic from continuing operations	$	(0.01)	$	0.18	$	0.09	$	0.20
Basic from discontinued operations2	$	(0.01)	$	(0.01)	$	(0.01)	$	(0.01)
Basic	$	(0.02)	$	0.17	$	0.08	$	0.19

Diluted from continuing operations	$	(0.01)	$	0.18	$	0.09	$	0.20
Diluted from discontinued operations2	$	—	$	(0.01)	$	(0.01)	$	(0.01)
Diluted	$	(0.02)	$	0.17	$	0.08	$	0.19

Weighted average ordinary shares outstanding
Basic	26,831,372		26,923,804		26,826,123		26,922,528
Diluted	26,932,291		27,065,338		26,892,230		27,083,986

See accompanying notes to condensed consolidated financial statements

1 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.

2 The loss per share for discontinued operations has not been diluted, since the incremental shares included in the weighted-average number of shares outstanding would have been anti-dilutive.

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME (UNAUDITED)


	Second Quarter				Year-to-date
In millions	2024		2023		2024		2023
Net (loss) / income	$	(0.5)	$	4.7	$	2.2	$	5.2

Other comprehensive (loss) / income
Net change in foreign currency translation adjustment, net of tax	(0.2)		3.4		(2.0)		6.8
Pension and post-retirement actuarial gains, net of $0.1, $0.1, $0.2 and $5.0 tax, respectively	0.1		0.2		0.4		7.0
Other comprehensive (loss) / income, net of tax	(0.1)		3.6		(1.6)		13.8

Total comprehensive (loss) / income	$	(0.6)	$	8.3	$	0.6	$	19.0

See accompanying notes to condensed consolidated financial statements

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	June 30,		December 31,
In millions, except share and per-share data	2024		2023
Current assets
Cash and cash equivalents	$	4.3	$	2.3
Restricted cash	0.3		0.3
Accounts and other receivables, net of allowances of $0.6 and $0.7, respectively	60.9		59.9
Inventories	88.2		95.9
Current assets held-for-sale	23.4		8.9
Other current assets	1.5		1.5
Total current assets	$	178.6	$	168.8
Non-current assets
Property, plant and equipment, net	$	63.1	$	63.8
Right-of-use assets from operating leases	14.3		15.4
Goodwill	67.2		67.5
Intangibles, net	11.6		12.0
Deferred tax assets	3.5		3.9
Investments and loans to joint ventures and other affiliates	0.4		0.4
Pensions and other retirement benefits	41.1		40.3
Total assets	$	379.8	$	372.1
Current liabilities
Current maturities of long-term debt and short-term borrowing	$	0.2	$	4.6
Accounts payable	27.5		26.5
Accrued liabilities	23.2		20.9
Taxes on income	5.1		—
Current liabilities held-for-sale	9.4		3.9
Other current liabilities	9.4		8.9
Total current liabilities	$	74.8	$	64.8
Non-current liabilities
Long-term debt	$	74.0	$	67.6
Pensions and other retirement benefits	—		0.1
Deferred tax liabilities	10.2		10.2
Other non-current liabilities	14.5		16.8
Total liabilities	$	173.5	$	159.5
Commitments and contingencies (Note 16)
Shareholders' equity
Ordinary shares of £0.50 par value; authorized 40,000,000 shares for 2024 and 2023; issued and outstanding 28,944,000 for 2024 and 2023	26.5		26.5

Additional paid-in capital	224.2		223.5
Treasury shares	(23.6)		(22.9)
Company shares held by ESOP	(0.8)		(0.9)
Retained earnings	99.5		104.3
Accumulated other comprehensive loss	(119.5)		(117.9)
Total shareholders' equity	206.3		212.6
Total liabilities and shareholders' equity	$	379.8	$	372.1

See accompanying notes to condensed consolidated financial statements

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Year-to-date
In millions	2024		2023
Operating activities
Net income	$	2.2	$	5.2
Net loss from discontinued operations	0.2		0.2
Net income from continuing operations	2.4		5.4
Adjustments to reconcile net income to net cash provided / (used) by operating activities

Depreciation	4.5		6.2
Amortization of purchased intangible assets	0.4		0.4
Amortization of debt issuance costs	0.1		0.2
Share-based compensation charges	1.4		1.3
Deferred income taxes	0.3		1.5
Asset impairment charges	—		2.3
Loss on held for sale asset group	7.5		—
Defined benefit pension (credit) / charge	(0.5)		8.3
Defined benefit pension contributions	—		(2.1)
Changes in assets and liabilities
Accounts and other receivables	(7.9)		3.8
Inventories	(7.5)		(6.4)
Current assets held-for-sale	(2.5)		1.2

Accounts payable	2.4		(9.1)
Accrued liabilities	3.5		(5.9)
Current liabilities held-for-sale	2.0		(1.5)
Other current liabilities	5.8		(7.4)
Other non-current assets and liabilities	0.6		0.5
Net cash provided / (used) by operating activities - continuing	12.5		(1.3)
Net cash provided by operating activities - discontinued	0.1		0.1
Net cash provided / (used) by operating activities	12.6		(1.2)
Investing activities
Capital expenditures	(4.1)		(4.9)




Net cash used by investing activities - continuing	(4.1)		(4.9)
Net cash used by investing activities - discontinued	(0.1)		(0.1)
Net cash used by investing activities	(4.2)		(5.0)
Financing activities
Net repayment of short-term borrowings	(4.4)		(25.0)
Net drawdown of long-term borrowings	6.4		35.1




Repurchase of own shares	(1.0)		(1.6)
Share-based compensation cash paid	(0.3)		(0.3)
Dividends paid	(7.0)		(7.0)
Net cash (used) / provided by financing activities	(6.3)		1.2
Effect of exchange rate changes on cash and cash equivalents	(0.1)		0.3
Net increase / (decrease)	$	2.0	$	(4.7)
Cash, cash equivalents and restricted cash; beginning of year	2.6		12.9
Cash, cash equivalents and restricted cash; end of the second quarter	4.6		8.2

Supplemental cash flow information:
Interest payments	$	2.8	$	2.8
Income tax payments, net	0.3		2.8

See accompanying notes to condensed consolidated financial statements

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)


In millions,	Ordinary shares		Additional paid-in capital		Treasury shares Number	Treasury shares Amount		Own shares held by ESOP Number	Own shares held by ESOP Amount		Retained earnings		Accumulated other comprehensive loss		Total equity
At January 1, 2024	$	26.5	$	223.5	(1.5)	$	(22.9)	(0.6)	$	(0.9)	$	104.3	$	(117.9)	$	212.6
Net income	—		—		—	—		—	—		2.7		—		2.7



Other comprehensive loss, net of tax	—		—		—	—		—	—		—		(1.5)		(1.5)
Dividends declared	—		—		—	—		—	—		(3.5)		—		(3.5)
Share-based compensation	—		0.6		—	—		—	—		—		—		0.6
Share buyback	—		—		—	(0.4)		—	—		—		—		(0.4)

Utilization of shares from ESOP to satisfy share based compensation	—		(0.2)		—	—		—	—		—		—		(0.2)
At March 31, 2024	26.5		223.9		(1.5)	(23.3)		(0.6)	(0.9)		103.5		(119.4)		210.3
Net loss	—		—		—	—		—	—		(0.5)		—		(0.5)

Other comprehensive loss, net of tax	—		—		—	—		—	—		—		(0.1)		(0.1)
Dividends declared	—		—		—	—		—	—		(3.5)		—		(3.5)
Share based compensation	—		0.8		—	—		—	—		—		—		0.8
Share buyback	—		—		(0.1)	(0.6)		—	—		—		—		(0.6)
Utilization of treasury shares to satisfy share based compensation	—		(0.3)		—	0.3		—	—		—		—		—
Utilization of shares from ESOP to satisfy share based compensation	—		(0.2)		—	—		—	0.1		—		—		(0.1)

At June 30, 2024	26.5		224.2		(1.6)	(23.6)		(0.6)	(0.8)		99.5		(119.5)		206.3

See accompanying notes to condensed consolidated financial statements

LUXFER HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)


In millions,	Ordinary shares		Additional paid-in capital		Treasury shares Number	Treasury shares Amount		Own shares held by ESOP Number	Own shares held by ESOP Amount		Retained earnings		Accumulated other comprehensive loss		Total equity
At January 1, 2023	$	26.5	$	221.4	(1.3)	$	(20.4)	(0.7)	$	(1.0)	$	120.2	$	(139.4)	$	207.3
Net income	—		—		—	—		—	—		0.5		—		0.5

Other comprehensive loss, net of tax	—		—		—	—		—	—		—		10.2		10.2
Dividends declared	—		—		—	—		—	—		(3.5)		—		(3.5)
Share based compensation	—		0.6		—	—		—	—		—		—		0.6
Share buyback	—		—		(0.1)	(0.8)		—	—		—		—		(0.8)


Utilization of shares from ESOP to satisfy share based compensation	—		(0.3)		—	—		—	—		—		—		(0.3)
At April, 2023	$	26.5	$	221.7	(1.4)	$	(21.2)	(0.7)	$	(1.0)	$	117.2	$	(129.2)	$	214.0
Net income	—		—		—	—		—	—		4.7		—		4.7

Other comprehensive loss, net of tax	—		—		—	—		—	—		—		3.6		3.6
Dividends declared	—		—		—	—		—	—		(7.0)		—		(7.0)
Share based compensation	—		0.7		—	—		—	—		—		—		0.7
Share buyback	—		—		—	(0.8)		—	—		—		—		(0.8)

Utilization of treasury shares to satisfy share based compensation	—		(0.3)		—	0.2		—	—		—		—		(0.1)
Utilization of shares from ESOP to satisfy share based compensation	—		—		—	—		0.1	0.1		—		—		0.1
At July 2, 2023	$	26.5	$	222.1	(1.4)	$	(21.8)	(0.6)	$	(0.9)	$	114.9	$	(125.6)	$	215.2

See accompanying notes to condensed consolidated financial statements

LUXFER HOLDINGS PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation and Responsibility for interim Financial Statements

We prepared the accompanying unaudited condensed consolidated 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, 2023. 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 only of a normal recurring nature, necessary for the fair statement 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 assets and 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 Second Quarter 2024, ended on June 30, 2024, and the Second Quarter 2023, ended on July 2, 2023.

Accounting standards issued but not yet effective

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements. The new guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included in the reported measure of segment profit or loss. It does not change the definition of a segment or the guidance for determining reportable segments. The new guidance is effective for the Company in the annual period beginning January 1, 2024 and in 2025 for interim periods. Adoption of this ASU will result in additional disclosure, but it will not impact the Company’s consolidated financial position, results of operations or cash flows.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures in ASC 740, Income Taxes, primarily related to rate reconciliation and income taxes paid information. The ASU is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. The Company is currently assessing the impact on its Consolidated Condensed Financial Statements and related disclosures.

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:


	Second Quarter				Year-to-date
In millions except share and per-share data	2024		2023		2024		2023
Basic (loss) / earnings:
Net (loss) / income from continuing operations	$	(0.4)	$	4.9	$	2.4	$	5.4
Net loss from discontinued operations	(0.1)		(0.2)		(0.2)		(0.2)
Net (loss) / income	$	(0.5)	$	4.7	$	2.2	$	5.2

Weighted average number of £0.50 ordinary shares:
For basic earnings per share	26,831,372		26,923,804		26,826,123		26,922,528
Dilutive effect of potential common stock	100,919		141,534		66,107		161,458
For diluted earnings per share	26,932,291		27,065,338		26,892,230		27,083,986

(Loss) / earnings per share using weighted average number of ordinary shares outstanding(1):
Basic (loss) / earnings per ordinary share for continuing operations	$	(0.01)	$	0.18	$	0.09	$	0.20
Basic loss per ordinary share for discontinued operations	(0.01)		(0.01)		(0.01)		(0.01)
Basic (loss) / earnings per ordinary share	$	(0.02)	$	0.17	$	0.08	$	0.19

Diluted (loss) / earnings per ordinary share for continuing operations	$	(0.01)	$	0.18	$	0.09	$	0.20
Diluted loss per ordinary share for discontinued operations	—		(0.01)		(0.01)		(0.01)
Diluted (loss) / earnings per ordinary share	$	(0.02)	$	0.17	$	0.08	$	0.19

(1) 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

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 second quarter and year-to-date ended June 30, 2024, and July 2, 2023, are included below and in Note 15, Segmental Information.


	Second Quarter
	2024								2023
In millions	Gas Cylinders		Elektron		Graphic Arts		Total		Gas Cylinders		Elektron		Graphic Arts		Total
Defense, First Response & Healthcare	$	24.6	$	17.9	$	—	$	42.5	$	20.9	$	26.8	$	—	$	47.7
Transportation	17.2		11.1		—		28.3		18.6		12.9		—		31.5
General industrial	8.0		13.0		7.9		28.9		9.0		13.3		8.9		31.2
	$	49.8	$	42.0	$	7.9	$	99.7	$	48.5	$	53.0	$	8.9	$	110.4


	Year-to-date
	2024								2023
In millions	Gas Cylinders		Elektron		Graphic Arts		Total		Gas Cylinders		Elektron		Graphic Arts		Total
Defense, First Response & Healthcare	$	45.2	$	31.8	$	—	$	77.0	$	39.0	$	50.9	$	—	$	89.9
Transportation	36.3		20.9		—		57.2		32.5		25.7		$	—	58.2
General industrial	13.7		27.0		14.2		54.9		18.5		28.8		$	16.3	63.6
	$	95.2	$	79.7	$	14.2	$	189.1	$	90.0	$	105.4	$	16.3	$	211.7

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 $1.1 million and $1.8 million restructuring charge in the second quarter and first six months, respectively, of 2024 predominantly relates to continued costs aimed at reducing our fixed cost structure and realigning our business.

The $2.5 million and $2.8 million restructuring charge in the second quarter and first half, respectively, of 2023 relates predominantly to asset impairments in relation to rationalization of our North American Gas Cylinders businesses to reduce our fixed cost base. This amounted to $2.3 million in both the second quarter and first half of the year respectively. There was an additional $0.1 million and $0.4 million of other expenses in the second quarter and first half respectively, in relation to the aforementioned rationalization.

Restructuring-related costs by reportable segment were as follows:


	Second Quarter				Year-to-date
In millions	2024		2023		2024		2023
Severance and other costs
Gas Cylinders	$	1.1	$	0.2	$	1.6	$	0.5
Elektron	—		—		0.2		—

	$	1.1	$	0.2	$	1.8	$	0.5
Asset impairments
Gas Cylinders	$	—	$	2.3	$	—	$	2.3




Total restructuring charges	$	1.1	$	2.5	$	1.8	$	2.8

Activity related to restructuring, recorded in Other current liabilities in the consolidated balance sheets is summarized as follows:


In millions	2024
Balance at January 1,	$	3.3
Costs incurred	1.8
Cash payments and other	(1.9)
Balance at June 30,	$	3.2

5. Other income

In December 2023, it was established that any potential liability arising from the lawsuits and reasonable defense costs related to the previously disclosed US Ecology case are covered by insurance. The Company recognized $5.1 million and $5.3 million in the second quarter and first half, respectively, of 2024, in relation to these costs previously incurred by the Company. The Company received $4.5 million in the first half of 2024 with a further $0.8 million confirmed in June 2024 and received in July 2024.

The Company is still in negotiations with the insurance company with regard to final payment of previously-paid litigation costs. We are unable to reliably estimate the recoverable amount, and given the uncertainty, we have not recognized anything additional to amounts received.

6. 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 half ended June 30, 2024, was a 63.1%, tax charge compared to a 50.0% credit for the first half ended July 2, 2023. The rate was impacted by non-deductible expenses and the loss on held-for-sale asset group. 2023 was also impacted by a deferred tax credit primarily in relation to the U.S. pension buyout..

7. Acquisition and disposal related costs


	Second Quarter				Year-to-date
In millions	2024		2023		2024		2023
Loss on held-for-sale asset group	$	7.5	$	—	$	7.5	$	—
Disposal related costs	1.7		—		1.9		—
	$	9.2	$	—	$	9.4	$	—

The $7.5 million loss on held-for-sale asset group relates to the Graphic Arts' assets which have been revalued to the expected consideration the Company will receive.

Disposal-related costs of $1.7 million and $1.9 million in the second quarter and first half of 2024, respectively, represent professional fees incurred and accrued in relation to the planned divestiture of the Graphic Arts segment.

8. Supplementary balance sheet information


	June 30,		December 31,
In millions	2024		2023
Accounts and other receivables
Trade receivables	$	53.7	$	52.3
Related parties	0.1		0.1
Prepayments and accrued income	4.1		5.7
Derivative financial instruments	—		0.4

Other receivables	3.0		1.4
Total accounts and other receivables	$	60.9	$	59.9

Inventories
Raw materials and supplies	$	32.4	$	34.7
Work-in-process	27.8		34.8
Finished goods	28.0		26.4
Total inventories	$	88.2	$	95.9

Other current assets
Income tax receivable	1.5		1.5
Total other current assets	$	1.5	$	1.5

Property, plant and equipment, net
Land, buildings and leasehold improvements	$	51.9	$	51.0
Machinery and equipment	238.4		234.9
Construction in progress	11.6		13.6
Total property, plant and equipment	301.9		299.5
Accumulated depreciation and impairment	(238.8)		(235.7)
Total property, plant and equipment, net	$	63.1	$	63.8




Current maturities of long-term debt and short-term borrowings

Overdrafts	0.2		4.6
Total current maturities of long-term debt and short-term borrowings	$	0.2	$	4.6

Other current liabilities
Restructuring provision	$	3.2	$	3.3
Short term provision	0.1		0.1

Derivative financial instruments	0.2		—
Operating lease liability	4.0		4.7

Advance payments	1.9		0.8
Total other current liabilities	$	9.4	$	8.9

Other non-current liabilities
Contingent liabilities	$	1.8	$	1.6
Operating lease liability	12.7		15.0
Other non-current liabilities	—		0.2
Total other non-current liabilities	$	14.5	$	16.8

9. Goodwill and other identifiable intangible assets

Changes in goodwill during the first half ended June 30, 2024, were as follows:


In millions	Gas Cylinders		Elektron		Total
At January 1, 2024	$	26.2	$	41.3	$	67.5

Exchange difference	(0.2)		(0.1)		(0.3)
Net balance at June 30, 2024	$	26.0	$	41.2	$	67.2

Accumulated goodwill impairment losses in relation to continuing activities were $8.0 million as of June 30, 2024 and December 31, 2023.

Identifiable intangible assets consisted of the following:


In millions	Customer relationships		Technology and trading related		Total
Cost:


At January 1 and June 30, 2024	$	15.2	$	7.8	$	23.0

Accumulated amortization:
At January 1, 2024	$	6.6	$	4.4	$	11.0
Charge	0.2		0.2		0.4

At June 30, 2024	$	6.8	$	4.6	$	11.4

Net book values:
At January 1, 2024	$	8.6	$	3.4	$	12.0
At June 30, 2024	$	8.4	$	3.2	$	11.6

Identifiable intangible asset amortization expense was $0.4 million and $0.4 million for the first half of 2024 and 2023 respectively.

Intangible asset amortization expense during each of the following five years is expected to be approximately $0.8 million per year.

10. Debt

Debt outstanding was as follows:


	June 30,		December 31,
In millions	2024		2023


4.94% Loan Notes due 2026	$	25.0	$	25.0
Revolving credit facility	49.3		43.1
Bank overdraft	0.2		4.6
Unamortized debt issuance costs	(0.3)		(0.5)
Total debt	74.2		72.2
Less current portion	(0.2)		(4.6)
Non-current debt	$	74.0	$	67.6

The weighted-average interest rate on the revolving credit facility was 7.80% for the first half of the year and 7.70% for the full-year 2023.

10. Debt (continued)

Loan notes due and shelf facility

The Note Purchase Agreement and Private Shelf Agreement requires us to maintain compliance with a minimum interest coverage ratio and a leverage ratio. 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 June 30, 2024.

The Loan Notes due 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

During the first half of 2024, we drew down net $6.4 million on the Revolving Credit Facility and the balance outstanding at June 30, 2024, was $49.3 million, and at December 31, 2023, was $43.1 million, with $75.7 million undrawn at June 30, 2024.

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 June 30, 2024.

Bank Overdraft

The bank overdraft is an uncommitted facility with no expiration date, this is reviewed annually and can be cancelled by either the bank or the Company on demand.

11. Discontinued Operations

Our Superform aluminum superplastic forming business operating in the U.S. was 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 this business as discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. We expect the sale of our Superform business to occur in 2024.

The assets and liabilities of the Superform business have been presented within assets held-for-sale and liabilities held-for-sale in the consolidated balance sheets for 2024 and 2023.

Results of discontinued operations in the first six months of 2024 and 2023 were as follows:


	Second Quarter				Year-to-date
In millions	2024		2023			2024		2023
Net sales	$	1.6	$	1.9		$	3.1	$	4.2
Cost of goods sold	(1.4)		(1.7)			(2.5)		(3.6)
Gross profit	0.2		0.2			0.6		0.6
Selling, general and administrative expenses	(0.4)		(0.4)			(0.8)		(0.7)
Restructuring charge	—		(0.1)			(0.1)		(0.2)

Operating loss	(0.2)		(0.3)			(0.3)		(0.3)
Tax credit	0.1		0.1			0.1		0.1
Net loss	$	(0.1)	$	(0.2)		$	(0.2)	$	(0.2)

11. Discontinued Operations (continued)

The assets and liabilities classified as held-for-sale related to discontinued operations were as follows:


Held-for-sale assets	June 30,		December 31,
In millions	2024		2023
Inventory	$	3.7	$	3.3
Accounts and other receivables	2.1		2.3
Current assets	5.8		5.6

Right-of-use-assets	1.7		2.1
Held-for-sale assets	$	7.5	$	7.7

Held-for-sale liabilities
Accounts payable	$	0.7	$	0.9
Accrued liabilities	0.3		0.4
Other liabilities	2.4		2.6

Held-for-sale liabilities	$	3.4	$	3.9

There was $0.1m of capital expenditure in the second half of 2024 (2023: none), there was no depreciation and amortization or any other significant non-cash items.

12. Held-for-sale assets and liabilities

The total assets and liabilities classified as held-for-sale, including those that qualify as discontinued operations are as follows:


Held-for-sale assets	June 30,		December 31,
In millions	2024		2023
Inventory	$	12.3	$	3.3
Accounts and other receivables	8.2		2.3
Current assets	20.5		5.6

Property, plant and equipment	1.2		1.2
Right-of-use-assets	1.7		2.1
Non-current assets	2.9		3.3

Total held-for-sale assets	$	23.4	$	8.9

Held-for-sale liabilities
Accounts payable	2.9		0.9
Accrued liabilities	2.9		0.4
Other liabilities	3.6		2.6
Held-for-sale liabilities	$	9.4	$	3.9

As a result of the Company’s strategic review process announced in October 2023, the Company concluded that its Graphic Arts business no longer aligns with the Company’s overall business and value proposition. In 2024, the Company initiated a sale process for its Graphic Arts business with the intention of divesting this business in 2024.

In the second quarter of 2024, the company recognized a $7.5 million loss on held-for-sale asset group recognized in continuing operations, relating to our Graphic Arts segment to reflect the the fair value of Graphic Arts. A $1.4 million accrual, also recognized within acquisition and disposal related costs in the Income Statement, has been recognized for expected costs in relation to professional fees in relation to the planned divestiture of the Graphic Arts segment.

In accordance with ASC 205-20 and ASC 360-10, our Graphic Arts business is classified as held-for-sale at June 30, 2024, however the business does not meet the criteria to be classified as a discontinued operation.

13. Share Plans

Total share-based compensation expense for the quarters ended June 30, 2024, and July 2, 2023, was as follows:


	Second Quarter				Year-to-date
In millions	2024		2023		2024		2023



Total share-based compensation charges	$	0.8	$	0.7	$	1.4	$	1.3

In March 2024, 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 155,000 and the weighted average fair value of options granted in 2024 was estimated to be $10.44 per share.

In June 2024, 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 47,012 and the weighted-average fair value of options granted was estimated to be $10.53 per share.

The following table illustrates the assumptions used in deriving the fair value of share options granted during 2024 and the year-ended December 31, 2023:


	2024	2023
Dividend yield (%)	3.15 - 3.32	3.15 - 3.32
Expected volatility range (%)	31.54 - 43.49	31.54 - 43.49
Risk-free interest rate (%)	3.67 - 5.16	3.67 - 5.16
Expected life of share options range (years)

LUXFER HOLDINGS PLC [LXFR] Filings
10-Q	[2024-07-30]
10-Q	[2024-04-30]
10-K	[2024-02-27]
10-Q	[2023-10-25]
10-Q	[2023-07-25]
10-Q	[2023-04-26]
10-K	[2023-03-01]
10-Q	[2022-10-25]
10-Q	[2022-07-27]
10-Q	[2022-04-25]
10-K	[2022-02-24]
10-Q	[2021-10-25]
10-Q	[2021-07-26]
10-Q	[2021-04-26]
10-K	[2021-03-02]
10-Q	[2020-10-26]
10-Q	[2020-07-27]
10-Q	[2020-04-27]
10-K	[2020-03-10]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-03-12]
20-F	[2018-03-19]
20-F	[2017-03-14]
20-F	[2016-03-15]
20-F	[2015-03-19]
20-F	[2014-03-31]
20-F	[2013-03-29]