Luxfer Holdings PLC LXFR reported better-than-expected results for fourth-quarter 2014. Adjusted earnings came in at 32 cents per American Depositary Shares (“ADS”), above the Zacks Consensus Estimate of 29 cents. However, the bottom line came below the year-ago tally of 40 cents.
For 2014, adjusted earnings were $1.11 per ADS, surpassing the Zacks Consensus Estimate of $1.08 but lower than $1.42 recorded in 2013.
Revenues
Luxfer generated revenues of $123.4 million in the quarter, increasing 6.4% year over year. However, the top line lagged the Zacks Consensus Estimate of $130 million.
Details of the segmental performance are provided below:
Revenues from the Gas Cylinders division were roughly $65 million, up 1.4% year over year and representing 52.7% of total revenue. The Elektron division generated revenues of $58.4 million, up 12.5% and accounting for 47.3% of total revenue.
For 2014, the company’s revenues totaled $489.5 million, up 1.7% year over year.
Costs/Margins
Cost of sales rose 10.8% year over year, representing 77.2% of total revenue versus 74.1% in the year-ago quarter. Distribution and administrative costs, as percentages of total revenue, came in at 1.5% and 12.6%, respectively.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $15.8 million versus $19.8 million recorded in the year-ago quarter, while margin declined 430 basis points to 12.8%.
Balance Sheet/ Cash Flow
Exiting fourth-quarter 2014, Luxfer had cash and short-term deposits of $14.6 million versus $15.4 million in the preceding quarter. Bank and other loans stood at $121.4 million, down 3.8% sequentially.
In 2014, Luxfer generated net cash of $23 million from its operating activities, as against $37.1 million generated in 2013. Capital expenditure fell 15.7% year over year to $20.4 million. Dividend distributed amounted to $10.8 million.
Also, during the year, the company successfully completed the acquisition of two U.S.-based private companies, Truetech Inc. and Innotech Products Ltd, for approximately $64 million. These acquired businesses have been integrated with Luxfer’s wholly owned subsidiary, Luxfer Magtech Inc.
Outlook: For 2015, Luxfer expects improved results from its Elektron division, on the back of full-year contribution from Luxfer Magtech and increased demand for military powders.
Capital spending is projected within $21−$24 million, while the tax rate is predicted to be roughly 27%.
With a market capitalization of $366 million, Luxfer Holdings currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include II-VI Incorporated IIVI, ESCO Technologies Inc. ESE and AO Smith Corp. AOS. All these stocks hold a Zacks Rank #2 (Buy).
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