Luxfer Holdings PLC LXFR reported better-than-expected results for second-quarter 2015. The company’s adjusted earnings came in at 28 cents per American Depositary Shares (“ADS”), surpassing the Zacks Consensus Estimate of 27 cents.
Also, the bottom line exceeded the year-ago tally of 27 cents per ADS.
Revenues
Luxfer generated net revenue of $122.8 million in the quarter, up 0.7% from $121.9 million earned in the year-ago quarter. Also, the top line surpassed the Zacks Consensus Estimate of $120 million.
The top line suffered a $7.4-million reduction due to adverse foreign currency movements.
Segmental performance is briefly discussed below:
Revenues from the Gas Cylinders division were roughly $62.7 million, down 4.9% year over year and representing 51.5% of total revenue. The Elektron division generated revenues of $60.1 million, up 7.3% and accounting for 48.5% of total revenue.
Costs/Margins
In the quarter, Luxfer’s cost of sales decreased 1% year over year, representing 76.3% of total revenue versus 77.6% a year ago. Distribution and administrative costs, as percentages of total revenue, came in at 1.8% and 12.1%, respectively.
Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) were $16.7 million, slightly above $16.2 million in the year-ago quarter; while margin increased 30 basis points to 13.6%.
Balance Sheet/ Cash Flow
Exiting second-quarter 2015, Luxfer had cash and short-term deposits of $58.3 million, up from $15.7 million in the preceding quarter. Bank and other loans totaled $156.7 million, up 29% from $121.5 million at the end of first-quarter 2015.
During the quarter, Luxfer generated net cash of $16.4 million from its operating activities, up from $4.7 million used in the year-ago quarter. Capital expenditure fell 45.8% year over year to $2.6 million. Dividend distributed amounted to $2.7 million.
During the quarter, the company initiated a share buyback program worth $10 million, having repurchased approximately 0.14 million for $1.9 million till date.
Outlook
For 2015, Luxfer expects to improve profitability aided by its cost-saving actions, especially the restructuring of AF manufacturing business. Also, the company aims to record trading profits in the year.
With a market capitalization of $322 million, Luxfer Holdings currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the machinery industry include Middleby Corp. MIDD, Nordson Corporation NDSN and Graco Inc. GGG. All these stocks carry a Zacks Rank #2 (Buy).
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