UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
FORM 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2019
ORFor the Quarterly Period Ended July 2, 2023


OR
o☐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 Wales98-1024030
State or Other Jurisdiction of

 Incorporation or Organization
I.R.S. Employer Identification No.
Lumns Lane, Manchester, M27 8LN8989 North Port Washington Road, Suite 211,
Milwaukee, WI, 53217
Address of principal executive offices
Registrant’s telephone number, including area code: +44 (0) 161-300-07001 414-269-2419
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, nominal value £0.50 eachLXFRNew 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 filero
o
Accelerated filerFilerx
Non-accelerated filero
o
Smaller reporting companyo
☐
Emerging growth company o
☐
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    o☐ No    x
The number of shares outstanding of Registrant’s only class of ordinary stock on March 31, 2019,July 2, 2023, was 27,196,450.26,922,342.





TABLE OF CONTENTS
Page
Page
PART I FINANCIAL INFORMATION
Item 1.Condensed Consolidated Financial Statements (unaudited)
1

Condensed Consolidated Statements of Income (unaudited)
1

Condensed Consolidated Statements of Comprehensive (Loss) / Income (unaudited)
2

Condensed Consolidated Balance Sheets (unaudited)
3

Condensed Consolidated Statements of Cash Flows (unaudited)
4

Condensed Consolidated Statements of Changes in Equity (unaudited)
5

Notes to Condensed Consolidated Financial Statements (unaudited)6
7

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations21
20

Item 3.Quantitative and Qualitative Disclosures About Market Risk
31

Item 4.Controls and Procedures
31

PART II OTHER INFORMATION
Item 1.Legal Proceedings
32

Item 1A.Risk Factors
32

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
32

Item 6.Exhibits33
32

Signatures34
33





PART I - FINANCIAL INFORMATION


Item 1.        Condensed Consolidated Financial Statements (unaudited)


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Second QuarterYear-to-date
In millions, except share and per-share data2023202220232022
Net sales$110.4 $109.5 $211.7 $206.5 
Cost of goods sold(86.2)(83.8)(166.4)(156.6)
Gross profit24.2 25.7 45.3 49.9 
Selling, general and administrative expenses(12.8)(11.5)(25.3)(22.2)
Research and development(1.0)(1.2)(2.2)(2.5)
Restructuring charges(2.5)(0.3)(2.8)(1.7)
Acquisition and disposal related costs— (0.1)— (0.3)
Operating income7.9 12.6 15.0 23.2 
Net interest expense(1.8)(0.9)(3.1)(1.7)
Defined benefit pension credit / (charge)0.6 0.3 (8.3)0.7 
Income before income taxes6.7 12.0 3.6 22.2 
(Provision) / credit for income taxes(1.8)(2.4)1.8 (4.9)
Net income from continuing operations4.9 9.6 5.4 17.3 
Loss from discontinued operations, net of tax(0.2)(0.3)(0.2)(0.4)
Net loss from discontinued operations(0.2)(0.3)(0.2)(0.4)
Net income$4.7 $9.3 $5.2 $16.9 
Earnings / (loss) per share1
Basic from continuing operations$0.18 $0.35 $0.20 $0.63 
Basic from discontinued operations$(0.01)$(0.01)$(0.01)$(0.01)
Basic$0.17 $0.34 $0.19 $0.62 
Diluted from continuing operations$0.18 $0.35 $0.20 $0.62 
Diluted from discontinued operations2$(0.01)$(0.01)$(0.01)$(0.01)
Diluted$0.17 $0.34 $0.19 $0.61 
Weighted average ordinary shares outstanding
Basic26,923,804 27,428,579 26,922,528 27,458,980 
Diluted27,065,338 27,703,217 27,083,986 27,720,065 
See accompanying notes to condensed consolidated financial statements
1The 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.
   First Quarter 
 In millions, except share and per-share data 2019
 2018
 
 Net sales $120.4
 $119.7
 
 Cost of goods sold (90.3) (89.4) 
 Gross profit 30.1
 30.3
 
 Selling, general and administrative expenses (16.4) (15.2) 
 Research and development (1.4) (1.6) 
 Restructuring charges (9.0) (0.7) 
 Impairment charges 0.2
 —
 
 Acquisition related costs (4.6) —
 
 Operating (loss) / income (1.1) 12.8
 
 Interest expense (1.1) (1.6) 
 Interest income —
 0.1
 
 Defined benefit pension credit 0.6
 1.4
 
 (Loss) / income before income taxes and equity in net income of affiliates (1.6) 12.7
 
 Provision for income taxes (2.1) (3.0) 
 (Loss) / income before equity in net income of affiliates (3.7) 9.7
 
 Equity (loss) / income of affiliates (net of tax) (0.1) 0.2
 
 Net (loss) / income $(3.8) $9.9
 
       
 (Loss) / earnings per share     
 Basic $(0.14) $0.37
 
 
Diluted(1)
 $(0.14) $0.37
 
 Weighted average ordinary shares outstanding     
 Basic 27,032,677
 26,512,765
 
 Diluted 27,032,677
 26,897,883
 

(1)2The loss per share for 2019discontinued operations has not been diluted, since the incremental shares included in the weighted-average number of shares outstanding would have been anti-dilutive.

1
See accompanying notes to consolidated financial statements


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME (UNAUDITED)
   First Quarter 
 In millions 2019
 2018
 
 Net (loss) / income $(3.8) $9.9
 
       
 Other comprehensive income / (loss)     
 Net change in foreign currency translation adjustment 1.4
 3.4
 
 Pension and post-retirement actuarial gains / (losses), net of $0.1 and $0.4 tax, respectively 0.5
 (3.9) 
 Cash flow hedges, net of $0.0 and $0.0 of tax, respectively 0.2
 —
 
 Other comprehensive income / (loss), net of tax 2.1
 (0.5) 
       
 Total comprehensive (loss) / income $(1.7) $9.4
 

Second QuarterYear-to-date
In millions2023202220232022
Net income$4.7 $9.3 $5.2 $16.9 
Other comprehensive income / (loss)
Net change in foreign currency translation adjustment, net of tax3.4 (8.2)6.8 (10.0)
Pension and post-retirement actuarial gains, net of $0.1, $0.1, $5.0 and $0.2 tax, respectively0.2 0.3 7.0 0.7 
Other comprehensive income / (loss), net of tax3.6 (7.9)13.8 (9.3)
Total comprehensive income$8.3 $1.4 $19.0 $7.6 
See accompanying notes to condensed consolidated financial statements

2


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
  March 31,
 December 31,
 
 In millions, except share and per-share data2019
 2018
 
 Current assets    
 Cash and cash equivalents$14.2
 $13.8
 
 Restricted cash0.3
 0.3
 
 Accounts and other receivables, net of allowances of $2.3 and $2.4, respectively73.7
 62.7
 
 Inventories97.9
 93.6
 
 Other current assets10.4
 10.7
 
 Total current assets$196.5
 $181.1
 
 Non-current assets    
 Property, plant and equipment, net$107.8
 $106.9
 
 Right-of-use assets from operating leases17.8
 18.4
 
 Goodwill68.4
 67.6
 
 Intangibles, net14.3
 14.6
 
 Deferred tax assets17.4
 18.6
 
 Investments and loans to joint ventures and other affiliates1.6
 1.6
 
 Total assets$423.8
 $408.8
 
 Current liabilities    
 Current maturities of long-term debt and short-term borrowings$7.6
 $3.5
 
 Accounts payable37.0
 36.9
 
 Accrued liabilities34.0
 33.8
 
 Taxes on income2.9
 1.6
 
 Other current liabilities20.7
 15.4
 
 Total current liabilities$102.2
 $91.2
 
 Non-current liabilities    
 Long-term debt$85.0
 $73.6
 
 Pensions and other retirement benefits37.8
 40.0
 
 Deferred tax liabilities3.2
 3.5
 
 Other non-current liabilities15.8
 16.2
 
 Total liabilities$244.0
 $224.5
 
 Shareholders' equity    
 Ordinary shares of £0.50 par value; authorized 40,000,000 shares for 2019 and 2018; issued and outstanding 29,000,000 shares for 2019 and 27,136,799 shares for 2018$26.6
 $26.6
 
 Deferred shares of £0.0001 par value; authorized 761,845,318,444; issued and outstanding 761,835,338,444 shares for 2019 and authorized 769,423,688,000; issued and outstanding 769,413,708,000 shares for 2018149.9
 149.9
 
 Additional paid-in capital65.9
 65.6
 
 Treasury shares(4.3) (4.3) 
 Own shares held by ESOP(1.9) (2.2) 
 Retained earnings88.1
 95.3
 
 Accumulated other comprehensive loss(144.5) (146.6) 
 Total shareholders' equity$179.8
 $184.3
 
 Total liabilities and shareholders' equity$423.8
 $408.8
 
July 2,December 31,
In millions, except share and per-share data20232022
Current assets
Cash and cash equivalents$7.9 $12.6 
Restricted cash0.3 0.3 
Accounts and other receivables, net of allowances of $0.7 and $0.4, respectively72.0 67.8 
Inventories119.3 111.1 
Current assets held-for-sale7.8 9.3 
Total current assets207.3 201.1 
Non-current assets
Property, plant and equipment, net76.7 77.7 
Right-of-use assets from operating leases18.3 19.8 
Goodwill67.5 65.6 
Intangibles, net12.3 12.5 
Deferred tax assets3.0 3.0 
Investments and loans to joint ventures and other affiliates0.3 0.4 
Pensions and other retirement benefits29.8 27.0 
Total assets$415.2 $407.1 
Current liabilities
Short-term debt$— $25.0 
Accounts payable35.9 37.8 
Accrued liabilities24.4 29.4 
Taxes on income1.1 1.8 
Current liabilities held-for-sale3.5 5.0 
Other current liabilities13.2 11.2 
Total current liabilities78.1 110.2 
Non-current liabilities
Long-term debt92.4 56.2 
Pensions and other retirement benefits— 4.5 
Deferred tax liabilities11.4 9.9 
Other non-current liabilities18.1 19.0 
Total liabilities200.0 199.8 
Commitments and contingencies (Note 14)
Shareholders' equity
Ordinary shares of £0.50 par value; authorized 40,000,000 shares for 2023 and 2022; issued and outstanding 28,944,000 for 2023 and 202226.5 26.5 
Additional paid-in capital222.1 221.4 
Treasury shares(21.8)(20.4)
Company shares held by ESOP(0.9)(1.0)
Retained earnings114.9 120.2 
Accumulated other comprehensive loss(125.6)(139.4)
Total shareholders' equity215.2 207.3 
Total liabilities and shareholders' equity$415.2 $407.1 
See accompanying notes to condensed consolidated financial statements

3

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
   First Quarter 
 In millions 2019
 2018
 
 Operating activities     
 Net (loss) / income $(3.8) $9.9
 
 Adjustments to reconcile net (loss) / income to net cash (used for) / provided by operating activities     
    Equity loss / (income) of unconsolidated affiliates 0.1
 (0.2) 
    Depreciation 3.4
 4.6
 
    Amortization of purchased intangible assets 0.3
 0.3
 
    Amortization of debt issuance costs 0.1
 0.1
 
    Share-based compensation charges 2.6
 0.5
 
    Deferred income taxes 0.8
 0.8
 
    Asset impairment charges (0.2) —
 
    Pension and other post-retirement expense 0.7
 0.3
 
    Pension and other post-retirement contributions (3.2) (3.2) 
 Changes in assets and liabilities, net of effects of business acquisitions     
    Accounts and notes receivable (10.4) (0.1) 
    Inventories (3.6) (11.2) 
    Other current assets —
 1.3
 
    Accounts payable (0.8) 6.7
 
    Accrued liabilities (1.7) (2.8) 
    Other current liabilities 7.2
 2.2
 
    Other non-current assets and liabilities 0.7
 (0.9) 
 Net cash (used for) / provided by operating activities $(7.8) $8.3
 
 Investing activities     
 Capital expenditures $(3.2) $(1.3) 
 Investments in unconsolidated affiliates —
 0.6
 
 Acquisitions, net of cash acquired —
 (0.5) 
 Net cash used for investing activities $(3.2) $(1.2) 
 Financing activities     
 Net drawdown / (repayments) of short-term borrowings $4.2
 $(4.2) 
 Net drawdown / (repayments) of long-term borrowings 11.3
 (4.0) 
 Deferred consideration paid (0.5) —
 
 Proceeds from sale of shares 1.4
 —
 
 Share-based compensation cash paid (1.8) (0.6) 
 Dividends paid (3.4) (3.4) 
 Net cash from / (used) for financing activities $11.2
 $(12.2) 
 Effect of exchange rate changes on cash and cash equivalents 0.2
 (0.1) 
 Net increase / (decrease) $0.4
 $(5.2) 
 Cash, cash equivalents and restricted cash; beginning of year 14.1
 13.3
 
 Cash, cash equivalents and restricted cash; end of the First Quarter 14.5
 8.1
 
       
 Supplemental cash flow information:     
 Interest payments $1.1
 $1.4
 
 Income tax payments —
 0.1
 
Year-to-date
In millions20232022
Operating activities
Net income$5.2 $16.9 
Net loss from discontinued operations0.2 0.4 
Net income from continuing operations5.4 17.3 
Adjustments to reconcile net income to net cash provided / (used) by operating activities
   Depreciation6.2 6.7 
   Amortization of purchased intangible assets0.4 0.4 
   Amortization of debt issuance costs0.2 0.3 
   Share-based compensation charges1.3 0.9 
   Deferred income taxes1.5 0.3 
   Gain on disposal of property, plant and equipment— (0.2)
   Asset impairment charges2.3 — 
   Defined benefit pension charge / (credit)8.3 (0.7)
   Defined benefit pension contributions(2.1)— 
Changes in assets and liabilities
   Accounts and other receivables3.8 (19.8)
   Inventories(6.4)(18.0)
   Current assets held-for-sale1.2 (3.2)
   Accounts payable(9.1)5.5 
   Accrued liabilities(5.9)1.5 
   Current liabilities held-for-sale(1.5)3.3 
   Other current liabilities(7.4)0.7 
   Other non-current assets and liabilities0.5 (1.8)
Net cash used by operating activities - continuing(1.3)(6.8)
Net cash provided by operating activities - discontinued0.1 — 
Net cash used by operating activities(1.2)(6.8)
Investing activities
Capital expenditures(4.9)(2.9)
Proceeds from sale of property, plant and equipment— 3.7 
Net cash (used) / provided by investing activities - continuing(4.9)0.8 
Net cash used by investing activities - discontinued(0.1)— 
Net cash (used) / provided by investing activities(5.0)0.8 
Financing activities
Net repayment of short-term borrowings(25.0)— 
Net drawdown of long-term borrowings35.1 18.1 
Repurchase of own shares(1.6)(3.7)
Share-based compensation cash paid(0.3)(1.4)
Dividends paid(7.0)(7.0)
Net cash provided by financing activities1.2 6.0 
Effect of exchange rate changes on cash and cash equivalents0.3 (0.9)
Net decrease$(4.7)$(0.9)
Cash, cash equivalents and restricted cash; beginning of year12.9 6.4 
Cash, cash equivalents and restricted cash; end of the Second Quarter8.2 5.5 
Supplemental cash flow information:
Interest payments$2.8 $1.7 
Income tax payments, net2.8 0.3 
See accompanying notes to condensed consolidated financial statements

4

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
In millions,Ordinary
shares		Additional paid-in capitalTreasury shares NumberTreasury shares AmountOwn shares held by ESOP NumberOwn shares held by ESOP AmountRetained
earnings		Accumulated other comprehensive lossTotal
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 income, 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 2, 202326.5 221.7 (1.4)(21.2)(0.7)(1.0)117.2 (129.2)214.0 
Net income— — — — — — 4.7 — 4.7 
Other comprehensive income, 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 
 In millions, 
Ordinary
share
capital
 
Deferred
share
capital
 Additional paid-in capital Treasury shares NumberTreasury shares Amount Own shares held by ESOP NumberOwn shares held by ESOP Amount 
Retained
earnings
 Accumulated other comprehensive loss 
Total
equity
 
 At January 1, 2018 $25.3
 $150.9
 $62.1
 (0.5)$(5.8) (0.1)$(1.0) $83.7
 $(140.7) $174.5
 
 Net income —
 —
 —
 —
—
 —
—
 9.9
 —
 9.9
 
 Other comprehensive loss, net of tax —
 —
 —
 —
—
 —
—
 —
 (0.5) (0.5) 
 Dividends declared —
 —
 —
 —
—
 —
—
 (6.7) —
 (6.7) 
 Share-based compensation —
 —
 (0.1) —
—
 —
—
 —
 —
 (0.1) 
 Purchase of shares from ESOP —
 —
 (0.1) —
—
 —
0.1
 —
 —
 —
 
 At March 31, 2018 $25.3
 $150.9
 $61.9
 (0.5)$(5.8) (0.1)$(0.9) $86.9
 $(141.2) $177.1
 
                     
 At January 1, 2019 $26.6
 $149.9
 $65.6
 (0.4)$(4.3) (1.6)$(2.2) $95.3
 $(146.6) $184.3
 
 Net loss —
 —
 —
 —
—
 —
—
 (3.8) —
 (3.8) 
 Shares sold from ESOP —
 —
 1.3
 —
—
 0.1
0.1
 —
 —
 1.4
 
 Other comprehensive income, net of tax —
 —
 —
 —
—
 —
—
 —
 2.1
 2.1
 
 Dividends declared —
 —
 —
 —
—
 —
—
 (3.4) —
 (3.4) 
 Share-based compensation —
 —
 (0.8) —
—
 —
—
 —
 —
 (0.8) 
 Utilization of shares from ESOP to satisfy share based compensation —
 —
 (0.2) —
—
 0.1
0.2
 —
 —
 —
 
 At March 31, 2019 $26.6
 $149.9
 $65.9
 (0.4)$(4.3) (1.4)$(1.9) $88.1
 $(144.5) $179.8
 

Ordinary share capital includes 29,000,000 shares in 2019, 27,136,799 shares in 2018, respectively.
Deferred share capital includes 761,835,338,444 shares in 2019, and 769,413,708,000 shares in 2018.
See accompanying notes to condensed consolidated financial statements






5

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
In millions,Ordinary sharesDeferred sharesAdditional paid-in capitalTreasury shares NumberTreasury shares AmountOwn shares held by ESOP NumberOwn shares held by ESOP AmountRetained earningsAccumulated other comprehensive lossTotal equity
At January 1, 2022$26.5 $149.9 $70.9 (0.6)$(9.6)(0.8)$(1.1)$107.5 $(135.0)$209.1 
Net income for the year— — — — — — — 7.6 — 7.6 
Other comprehensive loss, net of tax— — — — — — — — (1.4)(1.4)
Dividends declared— — — — — — — (7.0)— (7.0)
Share based compensation— — 0.2 — — — — — — 0.2 
Share buyback— — — (0.1)(1.5)— — — — (1.5)
Utilization of treasury shares to satisfy share based compensation— — (0.4)— — — — — — (0.4)
At March 27, 202226.5 149.9 70.7 (0.7)(11.1)(0.8)(1.1)108.1 (136.4)206.6 
Net income for the year— — — — — — — 9.3 — 9.3 
Other comprehensive income, net of tax— — — — — — — — (7.9)(7.9)
Share based compensation— — 0.7 — — — — — — 0.7 
Share buyback— — — (0.1)(2.2)— — — — (2.2)
Utilization of treasury shares to satisfy share based compensation— — 0.1 — 0.3 — — — — 0.4 
Utilization of shares from ESOP to satisfy share based compensation— — (1.5)— — — 0.1 — — (1.4)
At June 26, 2022$26.5 $149.9 $70.0 (0.8)$(13.0)(0.8)$(1.0)$117.4 $(144.3)$205.5 

See accompanying notes to condensed consolidated financial statements
6

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, except for the adoption for Accounting Standards Codification ("ASC") Topic 842, "Leases".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, 2018.2022. 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 presentationthe 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 FirstSecond Quarter 2019,2023, ended March 31, 2019,on July 2, 2023, and the FirstSecond Quarter 2018,2022, ended April 1, 2018.
Adoption of new accounting standards
On January 1, 2019, we adopted ASC Topic 842, "Leases", and applied the modified retrospective approach to recognizing any right-of-use assets and lease liabilities. Upon adoption, we have recognized all of our leases greater than one-year in duration and greater than $5,000 fair value, on the balance sheet as right-of-use assets and lease liabilities. This has resulted in us restating the prior period comparatives and have recognized a right-of-use asset of $21.2 million at January 1, 2018, with a corresponding lease liability, split $3.1 million, recognized in Other current liabilities, and $18.1 million recognized in Other non-current liabilities. Classification as either operating or finance is based on criteria largely similar to those applied in ASC 840 but without explicit bright lines. We have made certain assumptions in judgments when applying ASC 842, those judgments of most significance are as follows:
We elected the package of practical expedients available for transition which allow us to not reassess:
◦Whether expired or existing contracts contain leases under the new definition of a lease;
◦Lease classification for expired or existing leases; and
◦Whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.
We did not elect to use hindsight for transition when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset.
We did not elect to reassess whether land easements meet the definition of a lease if they were not accounted for as leases under the former rules.
For all asset classes, we elected to not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less.
For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component.

1.    Basis of Presentation and Responsibility for interim Financial Statements (continued)
We determine if an arrangement is a lease at inception. Operating leases are included in our Consolidated Balance Sheet as Right-of-use assets from operating leases, Current operating lease liabilities and Long-term operating lease liabilities. Some of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. We amortize this expense over the term of the lease beginning with the date of initial possession, which is the date we enter the leased space and begin to make improvements in preparation for its intended use.
In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. To estimate our specific incremental borrowing rates over various tenors (ranging from one-year through 30-years), a comparable market yield curve consistent with our credit quality was calibrated to our publicly outstanding debt instruments.
The standard had no impact on our results of operations or cash flows. In addition, new disclosures are provided to enable users to assess the amount, timing and uncertainty of cash flows arising from leases.June 26, 2022.
Accounting standards issued but not yet effective
None that will be material to the Company.


7

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 Treasurytreasury 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 QuarterYear-to-date
In millions except share and per-share data2023202220232022
Basic earnings:
Net income from continuing operations$4.9 $9.6 $5.4 $17.3 
Net loss from discontinued operations(0.2)(0.3)(0.2)(0.4)
Net income$4.7 $9.3 $5.2 $16.9 
Weighted average number of £0.50 ordinary shares:
For basic earnings per share26,923,804 27,428,579 26,922,528 27,458,980 
Dilutive effect of potential common stock141,534 274,638 161,458 261,085 
For diluted earnings per share27,065,338 27,703,217 27,083,986 27,720,065 
Earnings / (loss) per share using weighted average number of ordinary shares outstanding(1):
Basic earnings per ordinary share for continuing operations$0.18 $0.35 $0.20 $0.63 
Basic loss per ordinary share for discontinued operations(0.01)(0.01)(0.01)(0.01)
Basic earnings per ordinary share$0.17 $0.34 $0.19 $0.62 
Diluted earnings per ordinary share for continuing operations$0.18 $0.35 $0.20 $0.62 
Diluted loss per ordinary share for discontinued operations(0.01)(0.01)(0.01)(0.01)
Diluted earnings per ordinary share$0.17 $0.34 $0.19 $0.61 
(1) The calculation of earnings per share is performed separately for continuing and discontinued operations. As a result, the sum of the two in any particular period may not equal the earnings-per-share amount in total
  First Quarter 
 In millions except share and per-share data2019 2018 
 Basic earnings:    
 Net (loss) / income$(3.8) $9.9
 
 Weighted average number of £0.50 ordinary shares:    
 For basic earnings per share27,032,677
 26,512,765
 
 Dilutive effect of potential common stock—
 385,118
 
 For diluted earnings per share27,032,677
 26,897,883
 
 (Loss) / earnings per share using weighted average number of ordinary shares outstanding:    
 Basic (loss) / earnings per ordinary share$(0.14) $0.37
 
 Diluted (loss) / earnings per ordinary share$(0.14) $0.37
 

In the first quarter of 2019, basicBasic 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. As a result, 735,730 combined were not included in the computation of diluted EPS.loss from discontinued operations.


8

3.    RevenueNet Sales
Disaggregated sales disclosures for the quarter and year-to-date ended March 31, 2019,July 2, 2023, and April 1, 2018,June 26, 2022, are included below and in Note 14,13, Segmental Information.
Second Quarter
20232022
In millionsGas CylindersElektronTotalGas CylindersElektronTotal
Defense, First Response & Healthcare$20.9 $26.8 $47.7 $18.7 $15.0 $33.7 
Transportation18.6 12.9 31.5 19.1 16.2 35.3 
General industrial9.0 22.2 31.2 8.3 32.2 40.5 
$48.5 $61.9 $110.4 $46.1 $63.4 $109.5 
  First Quarter 
  2019 2018 
 In millionsGas CylindersElektronTotal Gas CylindersElektronTotal 
 General industrial$13.1
$30.6
$43.7
 $13.0
$28.4
$41.4
 
 Transportation20.9
19.1
40.0
 16.7
17.4
34.1
 
 Defense and emergency18.7
10.5
29.2
 23.2
13.6
36.8
 
 Healthcare5.7
1.8
7.5
 6.4
1.0
7.4
 
  $58.4
$62.0
$120.4
 $59.3
$60.4
$119.7
 
Year-to-date
20232022
In millionsGas CylindersElektronTotalGas CylindersElektronTotal
Defense, First Response & Healthcare$39.0 $50.9 $89.9 $35.8 $29.8 $65.6 
Transportation32.5 25.7 58.2 36.0 29.1 65.1 
General industrial18.5 45.1 63.6 16.7 59.1 75.8 
$90.0 $121.7 $211.7 $88.5 $118.0 $206.5 
The Company’s performance obligations are satisfied over time as work progresses or at a point in time. Design and tooling arrangements areWith the only contracts for which sales are recognizedreclassification of our Superform business as discontinued operations, none of the Company's revenue from continuing operations is satisfied over time. Sales from these sources combined accounted for less than 3% ofAs a result, the Company’s sales for the quarters ended March 31, 2019, and April 1, 2018. All consideration from contracts with customers is included in these amounts.
The following table provides information aboutCompany's contract receivables, contract assets and contract liabilities from contracts with customers:are included within current assets and liabilities held-for-sale.

 In millionsMarch 31, 2019 December 31, 2018 
 Contract receivables$1.9
 $1.5
 
 Contract assets2.0
 2.1
 
 Contract liabilities(0.8) (1.1) 
Contract assets consist of $2.0 million accrued unbilled amounts relating to tooling revenue and are recognized in prepayments and accrued income in the consolidated balance sheets. Of the $2.1 million contract assets recognized as of December 31, 2018, $1.1 million was billed to customers and transferred to receivables as of March 31, 2019.
Contract liabilities of $0.8 million consist of advance payments and billing above costs incurred and are recognized as other current liabilities. Significant changes in contract liabilities balances during the period are as follows:
 In millions2019 
 As at January 1,$(1.1) 
 Payments received / amounts billed(0.1) 
 Costs incurred / revenue recognized0.4
 
 As at March 31,$(0.8) 


4.    Restructuring
DuringThe $2.5 million and $2.8 million restructuring charge in the First Quartersecond quarter and first half, respectively, of 2019 and the year ended December 31, 2018, we initiated and continued execution2023 relates predominantly to asset impairments in relation to rationalization of certain business restructuring initiatives aimed at reducingour North American Gas Cylinders businesses to reduce our fixed cost structurebase. This amounted to $2.3 million in both the second quarter and realigning our business. Initiatives duringfirst half of the First Quarteryear respectively. There was an additional $0.1 million and $0.4 million of 2019 were predominantlyother expenses in the second quarter and first half respectively, in relation to the continued consultationaforementioned rationalization.
The $0.3 million and $1.7 million restructuring charge in the second quarter and first half, respectively, of 2022 includes $0.2 million in the second quarter relating to closeone-time employee termination benefits in the Elektron Division in relation to the consolidation of production facilities in the Magnesium Powders operations. The remaining $0.1 million and $1.4 million for the second quarter and first half, respectively, relates to costs associated with the closure of Luxfer Gas Cylinders segment's French site. There is an expectation that further costs will be incurred duringFrance, which ceased operations in 2019.
Restructuring-related costs included within Restructuring charges in the Condensed Consolidated Financial Statements by reportable segment were as follows:
Second QuarterYear-to-date
In millions2023202220232022
Severance and other costs
Gas Cylinders$0.2 $0.1 $0.5 $1.5 
Elektron— 0.2 — 0.2 
$0.2 $0.3 0.51.7
Asset impairments
Gas Cylinders$2.3 $— $2.3 $— 
Total restructuring charges$2.5 $0.3 $2.8 $1.7 
9

   First Quarter 
 In millions 2019 2018 
 Severance and related costs     
 Gas Cylinders segment $8.9
 $0.2
 
 Elektron segment 0.1
 0.5
 
 Total restructuring charges $9.0
 $0.7
 
4.    Restructuring (continued)

Activity related to restructuring, recorded in Other current liabilities in the consolidated balance sheets is summarized as follows:
In millions2023
Balance at January 1,$3.7
Costs incurred0.5
Cash payments and other(0.9)
Balance at July 2,$3.3
 In millions2019 
 Balance at January 1,$5.2
 
 Costs incurred9.0
 
 Cash payments and other(2.3) 
 Balance at March 31,$11.9
 

5.    Acquisition and disposal related costs
Acquisition-related costs of $4.6$0.3 million in the First Quarter, 2019, (2018: nil) relate to a $3.5 million termination payment and ourfirst half of 2022 represent professional and legal fees incurred in connection withrelation to the aborted acquisition of Neo Performance Materials.SCI acquisition.



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6.    Supplementary balance sheet information
July 2,December 31,
In millions20232022
Accounts and other receivables
Trade receivables$62.6 $56.4 
Related parties0.1 0.1
Prepayments and accrued income4.46.6
Derivative financial instruments0.30.7
Other receivables4.64.0
Total accounts and other receivables$72.0 $67.8 
Inventories
Raw materials and supplies$44.6 $42.7 
Work-in-process43.9 44.0 
Finished goods30.8 24.4 
Total inventories$119.3 $111.1 
Property, plant and equipment, net
Land, buildings and leasehold improvements$61.8 $58.9 
Machinery and equipment263.6 254.9 
Construction in progress11.4 9.8 
Total property, plant and equipment336.8 323.6 
Accumulated depreciation and impairment(260.1)(245.9)
Total property, plant and equipment, net$76.7 $77.7 
Other current liabilities
Restructuring provision$3.3 $3.7 
Short term provision— 0.1 
Derivative financial instruments0.1 0.4 
Operating lease liability5.0 4.7 
Dividend payable3.5 — 
Advance payments1.3 2.3 
Total other current liabilities$13.2 $11.2 
Other non-current liabilities
Contingent liabilities$1.5 $0.7 
Operating lease liability16.5 18.2 
Other non-current liabilities0.1 0.1 
Total other non-current liabilities$18.1 $19.0 

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   March 31, December 31, 
 In millions 2019 2018 
 Accounts and other receivables     
 Trade receivables $60.2
 $49.8
 
 Related parties 1.4
 0.9
 
 Prepayments and accrued income 7.9
 7.7
 
 Derivative financial instruments 0.3
 0.1
 
 Other receivables 3.9
 4.2
 
 Total accounts and other receivables $73.7
 $62.7
 
 Inventories     
 Raw materials and supplies $30.0
 $30.5
 
 Work-in-process 38.9
 33.1
 
 Finished goods 29.0
 30.0
 
 Total inventories $97.9
 $93.6
 
 Other current assets     
 Held-for-sale assets $10.4
 $10.7
 
 Total other current assets $10.4
 $10.7
 
 Property, plant and equipment, net     
 Land, buildings and leasehold improvements $73.2
 $73.3
 
 Machinery and equipment 287.8
 286.0
 
 Construction in progress 12.7
 10.1
 
 Total property plant and equipment 373.7
 369.4
 
 Accumulated depreciation and impairment (265.9) (262.5) 
 Total property, plant and equipment, net $107.8
 $106.9
 
 Current maturities of long-term debt and short-term borrowings     
 Overdrafts 7.6
 3.5
 
 Total current maturities of long-term debt and short-term borrowings $7.6
 $3.5
 
 Other current liabilities     
 Contingent liabilities $12.3
 $5.3
 
 Held-for-sale liabilities 2.1
 2.5
 
 Derivative financial instruments 0.2
 —
 
 Operating lease liability 3.5
 3.5
 
 Other current liabilities 2.6
 4.1
 
 Total other current liabilities $20.7
 $15.4
 
 Other non-current liabilities     
 Contingent liabilities $1.0
 $0.8
 
 Operating lease liability 14.2
 14.9
 
 Other non-current liabilities 0.6
 0.5
 
 Total other non-current liabilities $15.8
 $16.2
 




6.    Supplementary balance sheet information (continued)
Held-for-sale assets and liabilities

 Held-for-sale assetsMarch 31, December 31, 
 In millions2019 2018 
 Property, plant and equipment$5.7
 $5.5
 
 Inventory2.3
 2.9
 
 Accounts and other receivables2.4
 2.3
 
 Held-for-sale assets$10.4
 $10.7
 
      
 Held-for-sale liabilities    
 Accounts payable$2.1
 $2.5
 
 Held-for-sale liabilities$2.1
 $2.5
 
All held-for-sale assets relate to our Elektron Segment in 2019, and 2018, respectively.

7.     Goodwill and other identifiable intangible assets
Changes in goodwill during the First Quarter,first half ended March 31, 2019,July 2, 2023, were as follows:
In millionsGas CylindersElektronTotal
At January 1, 2023$25.0 $40.6 $65.6 
Exchange difference1.2 0.7 1.9 
Net balance at July 2, 2023$26.2 $41.3 $67.5 
 In millionsGas Cylinders Elektron Total 
 At January 1, 2019$26.3
 $41.3
 $67.6
 
 Exchange difference0.5
 0.3
 0.8
 
 Balance at March 31, 2019$26.8
 $41.6
 $68.4
 
Accumulated goodwill impairment losses in relation to continuing activities were $8.0 million as of July 2, 2023 and December 31, 2022.


Identifiable intangible assets consisted of the following:

  March 31, 2019 December 31, 2018 
 In millionsGross Accumulated amortization Net Gross Accumulated amortization Net 
 Customer relationships$13.4
 $(4.1) $9.3
 $13.4
 $(3.8) $9.6
 
 Technology and trading related7.9
 (2.9) 5.0
 7.9
 (2.9) 5.0
 
  $21.3
 $(7.0) $14.3
 $21.3
 $(6.7) $14.6
 
In millionsCustomer relationshipsTechnology and trading relatedTotal
Cost:   
At January 1, 2023$15.2 $7.4 $22.6 
Exchange movements— 0.4 0.4 
At July 2, 2023$15.2 $7.8 $23.0 
Accumulated amortization:  
At January 1, 2023$6.1 $4.0 $10.1 
Charge0.2 0.2 0.4 
Exchange movements— 0.2 0.2 
At July 2, 2023$6.3 $4.4 $10.7 
Net book values:  
At January 1, 2023$9.1 $3.4 $12.5 
At July 2, 2023$8.9 $3.4 $12.3 


Identifiable intangible asset amortization expense was $0.3$0.4 million and $0.4 million for the First Quarterfirst half of 20192023 and 20182022 respectively.
Intangible asset amortization expense duringin 2023 and each of the remainder of 2019 and over the next fivefollowing four years is expected to be approximately $0.9$0.8 million in 2019, $1.1 million in 2020, $1.1 million in 2021, $1.1 million in 2022, $1.1 million in 2023 and $1.1 million in 2024.per year.




8.    Debt


Debt outstanding was as follows:
July 2,December 31,
In millions20232022
4.88% Loan Notes due 2023$— $25.0 
4.94% Loan Notes due 202625.0 25.0 
Revolving credit facility68.1 31.9 
Unamortized debt issuance costs(0.7)(0.7)
Total debt92.4 81.2 
Less current portion— (25.0)
Non-current debt$92.4 $56.2 
 In millionsMarch 31, 2019 December 31, 2018 
 3.67% Loan Notes due 2021$25.0
 $25.0
 
 4.88% Loan Notes due 202325.0
 25.0
 
 4.94% Loan Notes due 202625.0
 25.0
 
 Revolving credit facility11.3
 —
 
 Other - Bank overdraft7.6
 3.5
 
 Unamortized debt issuance costs(1.3) (1.4) 
 Total debt$92.6
 $77.1
 
 Less current portion$(7.6) $(3.5) 
 Non-current debt$85.0
 $73.6
 
The revolving credit facility is due to mature in 2026.
The weighted-average interest rate on the revolving credit facility was 2.45%6.80% for the FirstSecond Quarter of 20192023 and 3.58%3.80% for the full-year 2018.2022.
The maturity profile of the Company's debt, excluding unamortized issuance costs and discounts, is as follows:

12

 In millions2019 2020 2021 2022 2023 2024 Thereafter Total 
 Loan Notes due 2021$—
 $—
 $25.0
 $—
 $—
 $—
 $—
 $25.0
 
 Loan Notes due 2023—
 —
 —
 —
 25.0
 —
 —
 25.0
 
 Loan Notes due 2026—
 —
 —
 —
 —
 —
 25.0
 25.0
 
 Revolving credit facility—
 —
 —
 11.3
 —
 —
 —
 11.3
 
 Other7.6
 —
 —
 —
 —
 —
 —
 7.6
 
 Total debt$7.6
 $—
 $25.0
 $11.3
 $25.0
 $—
 $25.0
 $93.9
 
8.    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 March 31, 2019.July 2, 2023.
The Loan Notes due 2021, 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. The Loan Notes due 2023 were settled in the Second Quarter of 2023.
Senior Facilities Agreement
During the First Quarterfirst half of 2019,2023, we drew down $11.3net $35.1 million on the Revolving Credit Facility and the balance outstanding at March 31, 2019,July 2, 2023, was $11.3$68.1 million, and at December 31, 2018,2022, was nil.$31.9 million, with $56.9 million undrawn at July 2, 2023.
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 March 31, 2019.July 2, 2023.


9.    Derivatives and Financial InstrumentsDiscontinued Operations
The Company's financial instruments comprise bank and other loans, senior loan notes, derivatives, trade payables deferred and deferred contingent consideration. Other than derivatives, the main purpose of these financial instruments is to raise finance for the Company's operations. The Company also has various financial assets such as trade receivables and cash and cash equivalents, which arise directly from its operations.
Derivative financial instruments                                        We are exposed to market risk during the normal course ofOur Superform aluminum superplastic forming business from changes in currency exchange rates, interest rates and commodity prices such as aluminum prices. We manage exposures through a combination of normal operating and financing activities and through the use of derivative financial instruments such as foreign currency forward purchase contracts and aluminum forward purchase contracts. We do not use market risk-sensitive instruments for trading or speculative purposes. The Company had $0.3 million and $0.1 million derivative financial instruments disclosed within Accounts and other receivables as of March 31, 2019 and December 31, 2018, respectively. There were also $0.2 million and nil derivative financial instruments recorded in Other current liabilities at March 31, 2019, and December 31, 2018, respectively.
The fair value of forward foreign currency exchange contracts deferred in equity was a loss of $0.6 million and a loss of $0.4 million at March 31, 2019, and December 31, 2018, respectively. During the First Quarter of 2019, $0.2 million was transferred to the Income Statement.
Forward foreign currency exchange contracts                                    The Company incurs currency transaction risk whenever one of the Company's operating subsidiaries enters into either a purchase or sales transaction in a currency other than its functional currency. Currency transaction risk is reduced by matching sales and expenses in the same currency. The Company's 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 have little currency exposure,of this business as most purchases, costs and sales are conducteddiscontinued operations in U.S. dollars. The Company's U.K. operations are exposed to exchange transaction risks, mainly because these operations sell goods priced in euros and U.S. dollars, and purchase raw materials priced in U.S. dollars and its functional currency is GBP sterling. The Company also incurs currency transaction risk if it lends currency other than its functional currency to onethe Condensed Consolidated Statements of its joint venture partners.
At March 31, 2019, and December 31, 2018, the Company held various forward foreign currency exchange contracts designated as hedges in respect of forward salesIncome for U.S. dollars, euros and Australian dollars for the receipt of GBP sterling or euros. The Company also held forward foreign currency exchange contracts designated as hedges in respect of forward purchases for U.S. dollars byall periods presented. We expect the sale of GBP sterling. our Superform business to occur within the next 12 months.
The contract totals in GBP sterlingassets and euros, range of maturity dates and range of exchange rates are disclosed below, with the value denominated in GBP sterling given that is the currency the majorityliabilities of the contracts are held in.

 March 31, 2019
 Sales hedgesU.S. dollars Euros
 Contract totals/£m7.2
 13.9
 Maturity dates04/19 to 07/19
 04/19 to 07/19
 Exchange rates$1.3034 to $1.3419
 €1.0949 to €1.1734
 Purchase hedgesU.S. dollars Euros Canadian dollars
 Contract totals/£m6.4
 1.4
 2.8
 Maturity dates04/19 to 07/19
 04/19 to 07/19
 04/19 to 05/19
 Exchange rates$1.3022 to $1.3380
 €1.1074 to €1.1706
 $1.7201 to $1.7691
  December 31, 2018
 Sales hedgesU.S. dollars Euros
 Contract totals/£m4.8
 7.2
 Maturity dates01/19 to 07/19
 01/19 to 07/19
 Exchange rates$1.2519 to $1.3419
 €1.0949 to €1.1702
 Purchase hedgesU.S. dollars Euros Canadian dollars Czech koruna
 Contract totals/£m7.5
 1.7
 2.9
 0.1
 Maturity dates01/19 to 07/19
 01/19 to 06/19
 01/19 to 03/19
 01/19
 Exchange rates$1.2609 to $1.3380
 €1.1074 to €1.1221
 $1.7039 to $1.7416
 CZK 28.4490

The above contracts are held in GBP sterling, therefore the analysisSuperform business have been presented within assets held-for-sale and liabilities held-for-sale in the table has been given in GBP sterling to avoid any movements as a resultconsolidated balance sheets for 2023 and 2022.
Results of translation.

9.    Derivatives and Financial Instruments (continued)
Fair value of financial instruments                                        
The following methods were used to estimate the fair values of each class of financial instrument:
Cash at bank and in hand / overdrafts                                        The carrying value approximates to the fair value as a result of the short-term maturity of the instruments. Cash at bank and in hand are subject to a right to offsetdiscontinued operations in the U.S.
Bank loans                                                    Bankfirst half of 2023 and other loans, excluding overdrafts, of $86.3 million2022 were outstanding at March 31, 2019, and $75.0 million were outstanding at December 31, 2018. Bank and other loans are shown net of issue costs of $1.3 million and $1.4 million at March 31, 2019, and December 31, 2018, respectively, and are to be amortized to the expected maturity of the facilities. Of the bank and other loans outstanding, $11.3 million and none is variable interest rate debt and subject to floating interest rate risk, with the remainder being fixed rate debt, at March 31, 2019, and December 31, 2018, respectively.
Forward foreign currency exchange rate contracts                                The fair value of these contracts was calculated by determining what the Company would be expected to receive or pay on termination of each individual contract by comparison to present market prices.
LME derivative contracts                                            The fair value of these contracts has been calculated by valuing the contracts against the equivalent forward rates quoted on the LME.
Deferred contingent consideration
The deferred contingent consideration is in relation to the acquisition of Truetech and Innotech (Luxfer Magtech) in 2014 and is linked to the future profitability of the entity.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
The fair values of the financial instruments of the Company at March 31, 2019, were analyzed using the hierarchy as follows:
Second QuarterYear-to-date
In millions2023202220232022
Net sales$1.9 $2.0 $4.2 $3.7 
Cost of goods sold(1.7)(1.6)(3.6)(3.2)
Gross profit0.2 0.4 0.6 0.5 
Selling, general and administrative expenses(0.4)(0.2)(0.7)(0.4)
Restructuring charges(0.1)(0.3)(0.2)(0.3)
Acquisition and disposal related costs— (0.2)— (0.2)
Operating loss(0.3)(0.3)(0.3)(0.4)
Tax credit0.1 — 0.1 — 
Net loss$(0.2)$(0.3)$(0.2)$(0.4)


13
 In millionsTotal Level 1 Level 2 Level 3 
 Derivative financial assets:        
 Foreign currency contract assets$0.3
 $—
 $0.3
 $—
 
 Derivative financial liabilities:        
 Foreign currency contract liabilities(0.2) —
 (0.2) —
 
 Interest bearing loans and borrowings:        
 Loan Notes due 2021(25.0) —
 (25.0) —
 
 Loan Notes due 2023(25.9) —
 (25.9) —
 
 Loan Notes due 2026(26.5) —
 (26.5) —
 
 Revolving Credit Facility(11.3) —
 (11.3) —
 
 Other financial liabilities:        
 Deferred contingent consideration(0.4) —
 —
 (0.4) 


9.    Derivatives and Financial InstrumentsDiscontinued Operations (continued)
The following table presentsassets and liabilities classified as held-for-sale related to discontinued operations were as follows:
Held-for-sale assetsJuly 2,December 31,
In millions20232022
Inventory$2.6 $2.7 
Accounts and other receivables1.5 2.7 
Current assets4.1 5.4 
Right-of-use-assets2.5 2.7 
Held-for-sale assets$6.6 $8.1 
Held-for-sale liabilities
Accounts payable$0.5 $0.8 
Accrued liabilities0.3 0.2 
Other liabilities— 1.0 
Operating lease liability2.7 3.0 
Held-for-sale liabilities$3.5 $5.0 
Also included within assets held-for-sale in 2023 and 2022 are land and buildings valued at $1.2 million, within our Elektron Segment.
There was no depreciation and amortization, capital expenditures and significant non-cash items.
Cash balances are swept into the changestreasury entities at the end of each day, these sweeps are recorded within operating cash flows in Level 3 instruments for the First Quarter ended March 31, 2019.statements of cash flows.
 In millions2019 
 Balance at January 1,$0.9
 
 Payments made during year(0.5) 
 Balance at March 31,$0.4
 
 Total losses for the period included in profit and loss for assets held at the end at March 31—
 
 Change in unrealized (gains) or losses for the period included in profit and loss for assets held at the end at March 31,$—
 

10.    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 Quarterfirst half ended March 31, 2019,July 2, 2023, was negative 131%a 50.0%, tax credit compared to 23.6%a 22.1% charge for the First Quarterfirst half ended April 1, 2018.June 26, 2022. The 2019 rate was adversely affectedimpacted by the impact of non-deductible expenses, related to the aborted acquisition of Neo Performance Materialsasset impairment charges and restructuring activities. We continue to actively pursue initiatives to reduce our effectivea deferred tax rate. The tax ratecredit, primarily in any quarter can be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changesrelation to the U.S. Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. For 2018, the Company considered in its estimated annual effective tax rate additional provisions of the Act including changes to the deduction for executive compensation and interest expense, a tax on global intangible low-taxed income provisions (“GILTI”), the base erosion anti-abuse tax, and a deduction for foreign-derived intangible income. The Company has elected to treat tax on GILTI income as a period cost and has therefore included it in its annual estimated effective tax rate.pension buyout.


14

11.     Pension Plans
The principal defined benefit pension plan in the U.K. is the Luxfer Group Pension Plan. The Company’s other arrangements are less significant than the Luxfer Group Pension Plan, the largest being the BA Holdings, Inc. Pension Plan in the U.S.
Components of net periodic benefit cost for our pension plans for the First Quarter ended March 31, 2019, and 2018 were as follows:
  First Quarter 
 In millions2019 2018 
 Net periodic benefit credit    
 Interest cost$2.7
 $2.7
 
 Expected return on plan assets(3.8) (4.4) 
 Amortization of:    
      Net actuarial loss0.7
 0.6
 
      Prior service credit(0.1) (0.1) 
 Net periodic benefit credit$(0.5) $(1.2) 
 In respect of defined contribution plans    
 Total charge for defined contribution plans1.2
 1.5
 
 Total charge for pension plans$0.7
 $0.3
 

11.     Pension Plans (continued)
In accordance with ASC 715, defined benefit credit is split in the income statement, with $0.1 million (2018: $0.2 million) of expenses recognized within Selling, general and administrative expenses and a credit of $0.6 million (2018: $1.4 million) recognized below Operating (loss) / income in the income statement.

12.    Share Plans


Total share-based compensation expense for the quarters ended March 31, 2019,July 2, 2023, and April 1, 2018,June 26 2022, was as follows:
  First Quarter 
 In millions2019 2018  
 Total share-based compensation charges$2.6
 $0.5
  
Second QuarterYear-to-date
In millions2023202220232022
Total share-based compensation charges$0.7 $0.7 $1.3 $0.9 
In March 2019,2023, we issued our annual share-based compensation grants under the Luxfer Holdings PLC Long-TermLongTerm Umbrella Incentive Plan. The total number of awards issued was approximately 200,000126,600 and the weighted average fair value of options granted in 2023 was estimated to be $17.94 per share.
Also in March 2023, approximately 10,000 awards were granted based on the achievement of total shareholder return targets from the period January 1, 2020 to December 31, 2022. 50% of these awards vested immediately upon grant, with the remaining 50% vesting in March 2024.
In June 2023, 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 31,028 and the weighted-average fair value of options granted in 2019 was estimated to be $17.70$14.71 per share.

The following table illustrates the assumptions used in deriving the fair value of share options granted during the First Quarter of 20192023 and the year-ended December 31, 2018,:
  2019 2018 
 Dividend yield (%)4.00 4.00 
 Expected volatility range (%) 22.65 - 35.77 22.65 - 35.77 
 Risk-free interest rate (%)0.12 - 2.57 0.12 - 2.57 
 Expected life of share options range (years)1.00 - 4.00 0.50 - 6.00 
 Weighted average exercise price ($)$0.89 $0.65 
 Model usedBlack-Scholes & Monte-Carlo Black-Scholes & Monte-Carlo 
2022:
20232022
Dividend yield (%)2.75 - 3.412.75 - 3.41
Expected volatility range (%)36.11 - 49.4336.11 - 49.43
Risk-free interest rate (%)1.28 - 2.991.28 - 2.99
Expected life of share options range (years)0.50 - 4.000.50 - 4.00
Forfeiture rate (%)5.00 5.00 
Weighted average exercise price ($)$1.00$1.00
Model usedBlack-Scholes & Monte-CarloBlack-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.


15
13.

12.    Shareholders' Equity
(a) Dividends paid and proposed
Second QuarterYear-to-date
In millions2023202220232022
Dividends declared and paid / accrued during the year:
Interim dividend declared January 4 2022, and paid February 2, 2022 ($0.125 per ordinary share)$— $— $— $— $3.4 
Interim dividend declared March 10 2022, and paid May 4, 2022 ($0.130) per ordinary share)— — — 3.6 
Interim dividend declared January 3 2023, and paid February 1, 2023 ($0.130 per ordinary share)— — 3.5 — — 
Interim dividend declared April 3 2023, and paid May 3, 2023 ($0.130) per ordinary share)3.5 — 3.5 — 
Interim dividend declared June 29 2023, and to be paid August 2, 2023 ($0.130) per ordinary share)3.5 — 3.5 — 
$7.0 $— $10.5 $7.0 

In millions20232022
Dividends declared and paid after the quarter end (not recognized as a liability at the quarter end):
Interim dividend declared July 5 2022, and paid August 3, 2022 ($0.130) per ordinary share)$— $3.6 
$— $3.6 
In July 2022 the Company made a payment of $0.1 million to cancel the entirety of deferred shares held, $149.8 million was reallocated to additional paid-in capital to reflect the capital reduction in deferred shares.
16
 In millions2019 2018 
 Dividends declared and paid during the year:    
 Interim dividend paid February 7, 2018 ($0.125 per ordinary share)$—
 $3.4
 
 Interim dividend paid February 6, 2019 ($0.125 per ordinary share)3.4
 —
 
  $3.4
 $3.4
 


 In millions2019 2018 
 Dividends declared before and paid after April 1, (recognized as a liability at April 1):    
 Interim dividend declared March 27, and paid May 2, 2018: ($0.125 per ordinary share)$—
 $3.3
 
  $—
 $3.3
 
 Dividends declared and paid after March 31 (not recognized as a liability at March 31):    
 Interim dividend declared April 1, and paid May 1, 2019: ($0.125 per ordinary share)$3.4
 $—
 
  $3.4
 $—
 


14.13.    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 sixfour identified business units, which aggregate into the two reportable segments. Luxfer Gas Cylinders and Luxfer Superform aggregate intoforms the Gas Cylinders segment, and Luxfer MEL Technologies, Luxfer Magtech and Luxfer Graphic Arts and Luxfer Czech Republic 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 aluminum, titaniumcomposites and carbon composites,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. The segment also forms lightweight aluminum and titanium panels into highly complex shapes that are used mainly in the transportation industry.
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, fiber-optic fuel cells, 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-basedshare based compensation expense; qualifying restructuring charges; impairment charges; legal expenses incurred from patent litigation with a competitor; profit on sale of redundant site; acquisition-related charges / credits; loss on disposal of property, plant and equipment; restructuring charges; impairment charges; acquisition and disposal related gains and costs; depreciation and amortization; and unwind of discount on deferred consideration.amortization.
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 FirstSecond Quarter and first half ended March 31, 2019,July 2, 2023, and April 1, 2018,June 26, 2022, is included in the following summary:
  Net sales  Adjusted EBITDA 
 In millions2019 2018  2019 2018 
 Gas Cylinders segment$58.4
 $59.3
  $4.5
 $6.0
 
 Elektron segment62.0
 60.4
  14.0
 13.2
 
 Consolidated$120.4
 $119.7
  $18.5
 $19.2
 
Net salesAdjusted EBITDA
Second QuarterYear-to-dateSecond QuarterYear-to-date
In millions20232022202320222023202220232022
Gas Cylinders segment$48.5 $46.1 $90.0 $88.5 $4.9 $3.7 $7.4 $6.4 
Elektron segment61.9 63.4 121.7 118.0 9.5 13.2 18.3 26.6 
Consolidated$110.4 $109.5 $211.7 $206.5 $14.4 $16.9 $25.7 $33.0 
  Depreciation and amortization  Restructuring charges 
 In millions2019 2018  2019 2018 
 Gas Cylinders segment$1.4
 $1.9
  $8.9
 $0.2
 
 Elektron segment2.3
 3.0
  0.1
 0.5
 
 Consolidated$3.7
 $4.9
  $9.0
 $0.7
 
Depreciation and amortizationRestructuring charges
Second QuarterYear-to-dateSecond QuarterYear-to-date
In millions20232022202320222023202220232022
Gas Cylinders segment$1.0 $1.2 $2.1 $2.6 $2.5 $0.1 $2.8 $1.5 
Elektron segment2.3 2.2 4.5 4.5 — 0.2 — 0.2 
Consolidated$3.3 $3.4 $6.6 $7.1 $2.5 $0.3 $2.8 $1.7 

17

(1) Adjusted EBITA is adjusted EBITDA less depreciation and loss on disposal of property, plant and equipment.

14.13.    Segmental Information (continued)
Total assetsCapital expenditures
July 2,December 31,Second QuarterYear-to-date
In millions202320222023202220232022
Gas Cylinders segment$139.6 $133.1 $0.3 $0.2 $0.6 $0.4 
Elektron segment223.9 216.4 2.7 1.8 4.4 2.6 
Other45.1 49.5 — — — — 
Discontinued operations6.6 8.1 0.2 — 0.1 — 
Consolidated$415.2 $407.1 $3.2 $2.0 $5.1 $3.0 
  Total assets  Capital expenditures 
 In millions2019 2018  2019 2018 
 Gas Cylinders segment$162.3
 $156.3
  $1.1
 $0.4
 
 Elektron segment227.1
 218.2
  2.6
 1.0
 
 Other34.4
 34.3
  —
 —
 
  $423.8
 $408.8
  $3.7
 $1.4
 
   Property, plant and equipment, net 
 In millions 2019 2018 
 United States $65.1
 $66.1
 
 United Kingdom 37.8
 36.0
 
 Rest of Europe 1.0
 1.1
 
 Asia Pacific 0.3
 0.3
 
 
Other (2)
 3.6
 3.4
 
   $107.8
 $106.9
 
Property, plant and equipment, net
July 2,December 31,
In millions20232022
U.S.$39.3 $41.6 
United Kingdom34.0 32.0 
Canada2.0 2.8 
Rest of Europe1.0 1.0 
Asia Pacific0.4 0.3 
$76.7 $77.7 
The following table presents a reconciliation of Adjusted EBITDA to net income:income from continuing operations:
 In millions2019 2018 
 Adjusted EBITDA$18.5
 $19.2
 
 Other share-based compensation charges(2.6) (0.5) 
 Loss on disposal of property, plant and equipment—
 —
 
 Depreciation and amortization(3.7) (4.9) 
 Unwind discount on deferred consideration—
 (0.1) 
 Restructuring charges(9.0) (0.7) 
 Fair value adjustment to held-for-sale assets0.2
 —
 
 Acquisition costs(4.6) —
 
 Defined benefits pension mark-to-market gain0.6
 1.4
 
 Interest expense, net(1.1) (1.5) 
 Provision for income taxes(2.1) (3.0) 
 Net income$(3.8) $9.9
 


14.    Segmental Information (continued)
Second QuarterYear-to-date
In millions2023202220232022
Adjusted EBITDA$14.4 $16.9 $25.7 $33.0 
Other share-based compensation charges(0.7)(0.7)(1.3)(0.9)
Depreciation and amortization(3.3)(3.4)(6.6)(7.1)
Gain on disposal of property, plant and equipment— 0.2 — 0.2 
Restructuring charges(2.5)(0.3)(2.8)(1.7)
Acquisition and disposal related costs— (0.1)— (0.3)
Defined benefits pension credit / (charge)0.6 0.3 (8.3)0.7 
Interest expense, net(1.8)(0.9)(3.1)(1.7)
Net income before income taxes from continuing operations$6.7 $12.0 $3.6 $22.2 
The following tables present certain geographic information by geographic region for the Second Quarter and First QuarterHalf of the year ended March 31,:July 2, 2023, and June 26, 2022:
  
Net Sales(1)
 
  2019 2018 
  $MPercent $MPercent 
 United States$61.4
51.0% $62.3
52.0% 
 U.K.11.5
9.6% 11.6
9.7% 
 Germany8.2
6.8% 11.4
9.5% 
 Italy6.5
5.4% 5.3
4.4% 
 France5.2
4.3% 4.9
4.1% 
 Top five countries$92.8
77.1% $95.5
79.8% 
 Rest of Europe11.8
9.8% 7.6
6.3% 
 Asia Pacific11.6
9.6% 10.6
8.9% 
 
Other (2)
4.2
3.5% 6.0
5.0% 
  $120.4
  $119.7
  

Net Sales(1)
Second QuarterYear-to-date
2023202220232022
$MPercent$MPercent$MPercent$MPercent
United States$67.8 61.5 %$61.7 56.3 %$125.5 59.3 %$117.0 56.7 %
U.K.5.2 4.7 %6.0 5.5 %10.8 5.1 %11.4 5.5 %
Japan6.3 5.7 %4.1 3.7 %10.8 5.1 %7.5 3.6 %
Germany3.8 3.4 %6.4 5.8 %10.1 4.8 %10.9 5.3 %
Italy2.1 1.9 %2.4 2.2 %5.4 2.6 %5.9 2.9 %
Top five countries85.2 77.2 %80.6 73.6 %162.6 76.9 %152.7 74.0 %
Rest of Europe9.6 8.7 %8.8 8.0 %19.3 9.0 %17.8 8.6 %
Asia Pacific8.3 7.5 %12.2 11.1 %17.3 8.2 %21.1 10.2 %
Other (2)
7.3 6.6 %7.9 7.2 %12.5 5.9 %14.9 7.2 %
$110.4 $109.5 $211.7 $206.5 
(1) Net sales are based on the geographic destination of sale.
(2) Other includes Canada, South America, Latin America and Africa.

15.     Leases
We have operating leases for buildings, vehicles and certain equipment. The majority of our leases have remaining lease terms of one to nine years, with one building having 54 years remaining.
The components of lease expense were as follows:
18
  First Quarter 
 In millions2019 2018 
 Operating lease cost$1.1
 $0.9
 
None of our leases were classified as finance leases in 2019 or 2018.
Supplemental cash flow information related to leases was as follows:

  First Quarter 
 In millions2019 2018 
 Operating cash flows from operating leases$1.1
 $0.9
 
Supplemental balance sheet information related to leases was as follows:
  March 31, December 31, 
 In millions2019 2018 
 Operating leases    
 Operating lease right-of-use asset$17.8
 $18.4
 
      
 Other current liabilities3.5
 3.5
 
 Other non-current liabilities14.2
 14.9
 
  $17.7
 $18.4
 
      
 Weighted Average Remaining Lease Term (Years)3.7
 3.7
 
 Weighted Average Discount Rate4.46% 4.46% 

15.     Leases (continued)
Maturities of lease liabilities were as follows:
 In millions  2019 
 2019 (excluding the first quarter of 2019)  $3.2
 
 2020  4
 
 2021  3.2
 
 2022  2.1
 
 2023  1.5
 
 2024  1.2
 
 Thereafter  10.0
 
 Total lease payments  $25.2
 
 Less imputed interest  (7.5) 
 Total  $17.7
 

16.14.     Commitments and Contingencies
Committed and uncommitted banking facilities
At March 31, 2019, and December 31, 2018, theThe Company had committed banking facilities of $150.0 million. The facilities were for providing loans$125.0 million at July 2, 2023 and overdrafts, with a separate facility for letters of credit which$100.0 million at March 31, 2019, was £7.0 million ($9.1 million) and December 31, 2018, was £7.0 million ($8.9 million).2022. Of thethese committed facilities, $7.6$68.1 million was drawn for overdrafts, no loans were drawnat July 2, 2023 and no letters of credit were utilized at March 31, 2019, $3.5$31.9 million nil and nil at December 31, 2018.2022. The Company also has a separate bonding facility for bank guarantees denominated in GBP sterlinghad an additional $25.0 million of £3.0uncommitted facilities through an accordion provision at July 2, 2023 and $50.0 million (2019: $3.9 million, 2018: $3.8 million), of which $1.0 million ($1.4 million) was utilized at March 31, 2019, and December 31, 2018, respectively.2022.
Uncommitted Facilities
July 2, 2023December 31, 2022
FacilityDrawnFacilityDrawn
Bond and Guarantees$0.6 $0.2 $0.6 $0.2 
Letters of Credit3.0 1.6 2.0 1.5 
Overdraft3.7 — 4.0 — 
$7.3 $1.8 $6.6 $1.7 
Contingencies
During February 2014,In November 2018, an explosion occurred at a cylinder was sold tothird-party waste disposal and treatment site in Grand View, Idaho, reportedly causing property damage, personal injury, and one fatality. We contracted with a long-term customerservice company for removal and ruptureddisposal of certain waste resulting from the magnesium powder manufacturing operations at one of their gas facilities. As a result ofthe Reade facility in Manchester, New Jersey. We believe this rupture, three people were noted to have minor injuries such as loss of hearing. There was no major damage to assetsservice company, in turn, contracted with the third-party disposal company, at whose facility the explosion occurred, for treatment and disposal of the customer. A claim was launchedwaste. In November 2020, we were named as a defendant in three lawsuits in relation to the incident – one by the three people who were injured in the incident and a prosecutor has been appointed. We had reviewed our quality control checks from around the time which the cylinder was produced and no instances of failures were noted. It has also been notedthird-party disposal company, one by the investigator thatestate of the customer has poor qualitydecedent, and safety checks. As a result, we do notone by an injured employee of the third-party disposal company. We believe that we are not liable for the incident, have asserted such, and therefore,continue to fully defend the Company against these lawsuits. Therefore, we do not currently expect this casethe eventual outcome in these matters to have a material impact on the Company's financial position or results of operations.

17.
15. Pension Settlement
In the first quarter of 2023, there was a $9.2 million charge in relation to the sale of the U.S. pension plan liability to an insurer, which included $2.3 million cash and $6.9 million in relation to the derecognition of the U.S. pension liability and reallocation of accumulated actuarial losses from other comprehensive income. In the second quarter of 2023, we received a $0.2 million contribution refund, resulting in a net cash outflow of $2.1 million and a half year charge of $9.0 million.
There was also a $0.4 million and $0.7 million defined benefit credit on the U.K pension plan for the second quarter and first half of 2023 respectively, consistent with the $0.3 million and $0.7 million for the second quarter and first half of 2022.

16. Subsequent Events
None.Post quarter end, the Board approved $12 million of funding for the potential discretionary repurchase of the Company's stock. The Company has not yet implemented this buyback program and as such no shares have been purchased since the quarter end reporting date.

19


Item 2.        Management's Discussion and Analysis of Financial Condition and Results of Operations
Information regarding forward-looking statements
This Interim Report on Form 10-Q contains certain statements, statistics and projections that are, or may be, forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Interim Report, as well as:
•general economic conditions, or conditions affecting demand for the services offered by us in the markets in which we operate, both domestically and internationally, being less favorable than expected;
•worldwide economic and business conditions and conditions in the industries in which we operate;
•post-pandemic impact of COVID-19 and future pandemics;
•fluctuations in the cost and / or availability of raw materials, labor and utilities;energy, as well as our ability to pass on cost increases to customers;
•currency fluctuations and other financial risks;
•our ability to protect our intellectual property;
•the significant amount of indebtedness we have incurred and may incur, and the obligations to service such indebtedness and to comply with the covenants contained therein;
•relationships with our customers and suppliers;
•increased competition from other companies in the industries in which we operate;
•changing technology;
•our ability to execute and integrate new acquisitions;
•claims for personal injury, death or property damage arising from the use of products produced by us;
•the occurrence of accidents or other interruptions to our production processes;
•changes in our business strategy or development plans, and our expected level of capital expenditure;
•our ability to attract and retain qualified personnel;
•restrictions on the ability of Luxfer Holdings PLC to receive dividends or loans from certain of its subsidiaries;
•climate change regulations and the potential impact on energy costs;
•regulatory, environmental, legislative and judicial developments; and
•our intention to pay dividends.
Please read the sections "Business,""Business" and "Risk factors,"factors" included within the 20182022 Annual Report on Form 10-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk factors" of this Interim Report on Form 10-Q for a more complete discussion of the factors that could affect our performance and the industries in which we operate, as well as those discussed in other documents we file or furnish with the SEC.

20

About Luxfer
Luxfer is a global manufacturer of highly-engineered industrial company innovating niche applications in materials whichengineering. Luxfer focuses on value creation by using its broad array of technical knowhowknow-how and proprietary technologies.technologies to help create a safe, clean and energy-efficient world. Luxfer's high-performance productsmaterials, components and high-pressure gas containment devices are used in defense, first response and emergency response, healthcare, transportation and general industrial settings. For more information, visit www.luxfer.com.applications.
Key trends and uncertainties regarding our existing business
The following trends and uncertainties affected our financial performance in the First Quarter, 2019, and will likely impact our results in the future:
We continued along our transformation journey and initiated certain business restructuring initiatives aimed at reducing our fixed cost structure. We expect that these actions will contribute to further margin growth in 2019.
We saw growth and profit margin expansion in both the Elektron and Gas Cylinders Segments.Margin pressure resulting from supply chain challenges
We have, experiencedand continue to experience supply chain challenges, largely now limited to the higher cost of certain raw materials. Additionally, force majeure still remains in place for our key supplier of U.S. sourced magnesium, with supply not expected to recommence until at least Quarter Four of 2023, although more likely 2024. However, we have been successful in securing alternative sources of supply outside of the U.S., albeit at a higher cost.

In the majority of cases we are able to pass through inflationary costs to our customers, although we are still constrained by contracts, particularly in the Gas Cylinders segment, the longest running of which is not subject to renewal until mid-2024. Currently, our expectation is that the impact of material availability / inflation, energy cost inflation and otherlabor and transport constraints will continue throughout 2023; but that we will be able to source sufficient material to meet demand and that in the majority of cases we expect to be able to pass on cost inflation. We strive forincreases. However the outlook remains highly uncertain with both the size and timing of future cost increases difficult to predict.

Operating objectives and trends
In 2023, we expect the following operating objectives and trends to impact our business:
•Addressing general macro uncertainty as well as impacts from the extended outage of U.S. domestic magnesium supply;
•Continuing high activity on revenue growth initiatives with particular focus on increasing volumes;
•Actions to ensure continuity of supply of critical materials and services while safeguarding margins;
•Execution of productivity improvements, and we implement increasesincluding completion of rationalization projects;
•Increases in selling prices to mitigate this inflation.and pass through current cost pressure;
In 2019,•Further improvements in ESG standing through investment in new projects;
•Focus on recruiting, developing and maintaining talent, through our operating objectives and trends we expect to impact our business include the following:
We have converted from foreign private issuer status to domestic issuer status, which requires us to comply with the U.S. SEC domestic reporting regime from January 1, 2019.
Improvement of the Gas Cylinder Segment with a project to consolidate the French operation into the U.K. and U.S to reduce fixed costs and safeguard competitiveness.
Focusing on developing global talent and implementingnew leadership development programs, while driving a high-performance culture.culture; and
Productivity acceleration•Continued emphasis on operating cash generation and growth recovery as we move towards a lean manufacturing process and focused and faster product innovation.maintaining strong working capital performance.


21

CONSOLIDATED RESULTS OF OPERATIONS
The consolidated results of operations for the FirstSecond Quarter of 20192023 and 20182022 of Luxfer were as follows:
Second Quarter% / point change
In millions202320222023 v 2022
Net sales$110.4 $109.5 0.8 %
Cost of goods sold(86.2)(83.8)2.9 %
Gross profit$24.2 $25.7 (5.8)%
     % of net sales21.9 %23.5 %(1.6)
Selling, general and administrative expenses(12.8)(11.5)11.3 %
     % of net sales11.6 %10.5 %1.1 
Research and development(1.0)(1.2)(16.7)%
     % of net sales0.9 %1.1 %(0.2)
Restructuring charges(2.5)(0.3)733.3 %
     % of net sales2.3 %0.3 %2.0 
Acquisition and disposal related costs— (0.1)(100.0)%
     % of net sales— %(0.1)%0.1 
Operating income$7.9 $12.6 (37.3)%
     % of net sales7.2 %11.5 %(4.3)
Net interest expense(1.8)(0.9)100.0 %
     % of net sales1.6 %0.8 %0.8 
Defined benefit pension credit0.6 0.3 100.0 %
     % of net sales0.5 %0.3 %0.2 
Income before income taxes$6.7 $12.0 (44.2)%
     % of net sales6.1 %11.0 %(4.9)
Provision for income taxes(1.8)(2.4)(25.0)%
     Effective tax rate26.9 %20.0 %6.9 
Net income from continuing activities$4.9 $9.6 (49.0)%
     % of net sales4.4 %8.8 %(4.4)













22

   First Quarter % / point change 
 In millions 2019 2018 2019 v 2018 
 Net sales $120.4
 $119.7
 0.6 % 
 Cost of goods sold (90.3) (89.4) 1.0 % 
 Gross profit 30.1
 30.3
 (0.7)% 
      % of net sales 25.0 % 25.3% (0.3) 
 Selling, general and administrative expenses (16.4) (15.2) 7.9 % 
      % of net sales 13.6 % 12.7% 0.9
 
 Research and development (1.4) (1.6) (12.5)% 
      % of net sales 1.2 % 1.3% (0.1) 
 Restructuring charges (9.0) (0.7) 1,185.7 % 
      % of net sales 7.5 % 0.6% 6.9
 
 Impairment charges 0.2
 —
 n/a
 
      % of net sales (0.2)% —% (0.2) 
 Acquisition related (costs) / credits (4.6) —
 n/a
 
      % of net sales 3.8 % —% 3.8
 
 Operating (loss) / income (1.1) 12.8
 n/a
 
      % of net sales (0.9)% 10.7% (11.6) 
 Net interest expense (1.1) (1.5) (26.7)% 
      % of net sales 0.9 % 1.3% (0.4) 
 Defined benefit pension credit 0.6
 1.4
 (57.1)% 
      % of net sales 0.5 % 1.2% (0.7) 
 (Loss) / income before income taxes and equity in net income of affiliates (1.6) 12.7
 n/a
 
      % of net sales (1.3)% 10.6% (11.9) 
 Provision for income taxes (2.1) (3.0) (30.0)% 
      Effective tax rate (131.3)% 23.6% (154.9) 
 (Loss) / income before equity in net income of affiliates (3.7) 9.7
 n/a
 
      % of net sales (3.1)% 8.1% (11.2) 
 Equity in (loss) / income of unconsolidated affiliates (net of tax) (0.1) 0.2
 n/a
 
      % of net sales (0.1)% 0.2% (0.3) 
 Net (loss) / income $(3.8) $9.9
 n/a
 
      % of net sales (3.2)% 8.3% (11.5) 
The consolidated results of operations for the six months of 2023 and 2022 of Luxfer were as follows:

Year-to-date% / point change
In millions202320222023 v 2022
Net sales$211.7 $206.5 2.5 %
Cost of goods sold(166.4)(156.6)6.3 %
Gross profit45.3 49.9 (9.2)%
% of net sales21.4 %24.2 %(2.8)
Selling, general and administrative expenses(25.3)(22.2)14.0 %
% of net sales12.0 %10.8 %1.2 
Research and development(2.2)(2.5)(12.0)%
% of net sales1.0 %1.2 %(0.2)
Restructuring charges(2.8)(1.7)64.7 %
% of net sales1.3 %0.8 %0.5 
Acquisition and disposal related costs— (0.3)(100.0)%
% of net sales— %0.1 %(0.1)
Operating income$15.0 $23.2 (35.3)%
% of net sales7.1 %11.2 %(4.1)
Net interest expense(3.1)(1.7)82.4 %
% of net sales1.5 %0.8 %0.7 
Defined benefit pension (charge) / credit(8.3)0.7 n/a
% of net sales(3.9)%0.3 %(4.2)
Income from continuing operations$3.6 $22.2 (83.8)%
% of net sales1.7 %10.8 %(9.1)
Credit / (provision) for income taxes1.8 (4.9)(136.7)%
Effective tax rate(50.0)%22.1 %(72.1)
Net income from continuing operations$5.4 $17.3 (68.8)%
% of net sales2.6 %8.4 %(5.8)

23




Net sales
Adjusting for foreign exchange tailwind of $0.2 million and a headwind of $2.1 million in the second quarter and first half of 2023 respectively, net sales have increased by 0.6% and 3.5%. The 0.6%passing through of material cost inflation, accounted for approximately $6.5 million and $16.5 million increase in consolidated net sales in 2019the second quarter and first half, respectively, of 2023 from 20182022. Furthermore, there was primarilya benefit in the result of:quarter from:
Increased sales of zirconium-based industrial•Growth in our Defense, First Response and automotive catalysis materials;Healthcare end market, including chemical kits, medical cylinders and flameless ration heaters (FRH), especially our new unitized group ration product (UGR-E);
Continued recovery in•Increased sales of alternative fuel (AF) cylinders; and
•Continued increase in demand for zirconium products, particularly those used in pharmaceutical applications.
These increases were partially offset by:
$4.4 million negative impact from FX;•Decreased demand for photo-engraving plates outside of the North American market;
Lower sales following significant hurricane-related disaster relief sales in the prior year;
•Lower sales of SCBA cylinders;SoluMag® due to destocking by customers in the Oil and Gas industry; and
Lower•Reduction in sales of graphic arts products duemagnesium powders for commercial use.
Further to productivity challenges following plant consolidation.the above, the first half of the year were also affected by:

•Higher demand for SCBA cylinders, offset by lower sales of large industrial cylinders;
•Increased sales of magnesium alloys, especially those used in aerospace and automotive applications;
•Partially offset by unfavorable foreign exchange variances as highlighted above;

Gross profit
The 0.31.6 and 2.8 percentage point decrease in gross profit as a percentage of sales in 2019the second quarter and first half, respectively of 2023 from 20182022 was primarily the result of:
Adverseof adverse sales mix impact of lower Luxfer Magtech disaster relief product salesand higher materials costs relative to price increases, particularly in the current quarter;Elektron Division. However, cost recovery and
Productivity challenges at Luxfer margin is improving in the Gas Cylinders France, following the announcement in Q4 2018 that we were in consultation to close the facility.Division as fixed-priced contracts are being renegotiated.
These adverse factors were partially offset by improvements due to:
Favorable mix impact of higher sales of zirconium catalysis materials; and
Continued production-based cost savings.


Selling, general and administrative expenses ("SG&A")
The 0.9 percentage point increase in SG&A costs as a percentage of sales in 20192023 from 2018 was primarily2022 has increased by 1.1 percentage points and 1.2 percentage points in the resultquarter and first half respectively, largely due to the $1.2 and $2.3 million of higher share-based compensation chargeslegal costs expensed in the Elektron Division. These predominantly relate to the case described in Note 14 - Commitments and higher integration costs associated with the Graphic Arts plant consolidation exercise, following the closure of the Findlay, OH site in Q4 2018.Contingencies.


Research and development costs
Research and development costcosts as a percentage of sales was relatively flatdecreased by 0.2 percentage points in the second quarter and first half of 2023 relative to 2022 respectively. The slight reduction is a result of the the inflationary impact on sales, coupled with a 0.1 percentage point decrease$0.1 million and $0.2 million impact due to foreign exchange in 2019 relative to 2018.the quarter and first half respectively.


Restructuring charges
The $9.0$2.5 million and $2.8 million restructuring charge in 2019the 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 predominantly, ($8.9 million),an additional $0.1 million and $0.4 million of other expenses in the resultsecond quarter and first half respectively, in relation to the aforementioned rationalization.
The $0.3 million and $1.7 million restructuring charge in the second quarter and first six months of further2022 includes $0.2 million in the second quarter relating to one-time employee termination benefits in the Elektron Division in relation to the consolidation of production facilities in the Magnesium Powders operations. The remaining $0.1 million and $1.4 million for the second quarter and first half respectively, relates to costs associated with the announced closure of Luxfer Gas Cylinders France, including one-time employee benefits, asset write-downswhich ceased operations in 2019.
24

Acquisition and associated legaldisposal related costs
No acquisition and professional fees.disposal related costs have been incurred during 2023.
The $0.7$0.1 million restructuring chargeand $0.3 million in 2018 was the result of:
$0.2 millionsecond quarter and first half of 2022 respectively, represents amounts incurred in relation to termination costs within the Gas Cylinders segment;
$0.4 million of termination costs and a property impairment charge related to the rationalization of Elektron's Graphic Arts operations; and
$0.1 million related to a previously announced plant closure affecting Elektron's Magtech business unit.

Impairment charges
The impairment credit of $0.2 million in 2019 reflects a fair value adjustment to the held-for-sale assets in the Elektron segment.




Acquisition-related costs
Acquisition-related costs of $4.6 million in 2019 relate to a $3.5 million termination payment and our professional and legal fees incurred in connection with the aborted acquisition of Neo Performance Materials.Structural Composites Industries.


Net interest expense
The 26.7% reduction in netNet interest expense of $1.8 million in 2019the second quarter of 2023 doubled from 2018 was$0.9 million in the second quarter of 2022, due to the reductiona combination of increased interest rates and higher drawings. Interest expense of $3.1 million in the average debt balancefirst half of 2023 was also significantly higher than the $1.7 million in 2019 resulting in lower interest costs, following the repaymentfirst half of $15.0 million private placement debt when due, in June 2018.2022.


Defined benefit pension credit
The $0.8In the first quarter of 2023, there was a $9.2 million decreasecharge in relation to the sale of the U.S. pension plan liability to an insurer, which included $2.3 million cash and $6.9 million in relation to the derecognition of the U.S. pension liability and reallocation of accumulated actuarial losses from other comprehensive income. In the second quarter of 2023, we received a $0.2 million contribution refund, resulting in a net cash outflow of $2.1 million and a half year charge of $9.0 million.
There was also a $0.4 million and $0.7 million defined benefit credit on the U.K pension credit to $0.6plan for the second quarter and first half of 2023 respectively, consistent with the $0.3 million in 2019 from $1.4and $0.7 million in 2018 is primarily due to lower projected asset returns in 2019.for the second quarter and first half of 2022.


Provision for income taxes
The movement in the statutory effective tax rate from 23.6%22.1% in 2018,2022, to negative 131.3%50.0% in 2019,2023, was primarily due to non-deductible expenses relatedand deferred tax credit, predominantly in relation to the aborted acquisitionpreviously mentioned pension buy-out and restructuring activities.impairment charges. When stripping out the affectimpact of these expenses, ourthis, as well as other less significant adjusting items, the adjusted effective tax rate has fallenreduced slightly to 22.0% in 2023 from 23.7%22.2% in 2018, to 20.0% in 2019.2022, largely as a result of jurisdictional profit mix.





25


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
The following table of non-GAAP summary financial data presents a reconciliation of net income to adjusted net income for the periods presented, being the most comparable GAAP measure. Management believes that adjusted net income, adjusted earnings per share, adjusted EBITA and adjusted EBITDA are key performance indicators (KPIs) used by the investment community and that such presentation will enhance an investor’s understanding of the Company's operational results. In addition, Luxfer's CEO and other senior management use these KPIs, among others, to evaluate business performance. However, investors should not consider adjusted net income and adjusted earnings per share in isolation as an alternative to net income and earnings per share when evaluating Luxfer's operating performance or measuring Luxfer's profitability.
Second QuarterYear-to-date
In millions except per share data2023202220232022
Net income from continuing operations$4.9 $9.6 $5.4 $17.3 
Accounting charges relating to acquisitions and disposals of businesses:
     Amortization on acquired intangibles0.2 0.2 0.4 0.4 
     Acquisition and disposal related costs— 0.1 — 0.3 
Defined benefit pension (credit) / charge(0.6)(0.3)8.3 (0.7)
Restructuring charges2.5 0.3 2.8 1.7 
Share-based compensation charges0.7 0.7 1.3 0.9 
Tax impact of defined benefit pension settlement— — (4.9)— 
Income tax on adjusted items(0.3)(0.5)(0.5)(0.6)
Adjusted net income$7.4 $10.1 $12.8 $19.3 
Adjusted earnings per ordinary share
Diluted earnings per ordinary share$0.18 $0.35 $0.20 $0.62 
Impact of adjusted items0.09 0.01 0.27 0.08 
Adjusted diluted earnings per ordinary share(1)
$0.27 $0.36 $0.47 $0.70 
  First Quarter 
 In millions except per share data2019 2018 
 Net (loss) / income$(3.8) $9.9
 
 Accounting charges relating to acquisitions and disposals of businesses:    
      Unwind of discount on deferred consideration—
 0.1
 
      Amortization on acquired intangibles0.3
 0.3
 
      Acquisitions and disposals4.6
 —
 
 Defined benefit pension credit(0.6) (1.4) 
 Restructuring charges9.0
 0.7
 
 Impairment charges(0.2) —
 
 Share-based compensation charges2.6
 0.5
 
 Income tax on adjusted items(0.7) (0.1) 
 Adjusted net income$11.2
 $10.0
 
      
 Adjusted earnings per ordinary share    
 Diluted (loss) / earnings per ordinary share$(0.14) $0.37
 
 Impact of adjusted items0.54
 —
 
 
Adjusted diluted earnings per ordinary share(1)
$0.40
 $0.37
 
(1) For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares outstanding during the financial year has been adjusted for the dilutive effects of all potential ordinary shares and share options granted to employees, except where there is a loss in the period, then no adjustment is made.
Second QuarterYear-to-date
In millions2023202220232022
Adjusted net income$7.4 $10.1 $12.8 $19.3 
Add back:
     Tax impact of defined benefit pension settlement— — 4.9 — 
     Income tax on adjusted items0.3 0.5 0.5 0.6 
     Provision for income taxes1.8 2.4 (1.8)4.9 
Interest expense1.8 0.9 3.1 1.7 
Adjusted EBITA$11.3 $13.9 $19.5 $26.5 
Gain on disposal of PPE— (0.2)— (0.2)
     Depreciation3.1 3.2 6.2 6.7 
Adjusted EBITDA$14.4 $16.9 $25.7 $33.0 

26
  First Quarter 
 In millions2019 2018 
 Adjusted net income$11.2
 $10.0
 
 Add back:    
      Income tax on adjusted items0.7
 0.1
 
      Provision for income taxes2.1
 3.0
 
      Net finance costs1.1
 1.5
 
 Adjusted EBITA$15.1
 $14.6
 
      Depreciation3.4
 4.6
 
 Adjusted EBITDA$18.5
 $19.2
 



The following table presents a reconciliation for the adjusted effective tax rate, which management believes is a KPI used by the investment community and that such presentation will enhance an investor’s understanding of the Company's operational results.
Second QuarterYear-to-date
In millions2023202220232022
Adjusted net income$7.4 $10.1 $12.8 $19.3 
Add back:
     Tax impact of defined benefit pension settlement— — 4.9 — 
     Income tax on adjusted items0.3 0.5 0.5 0.6 
     Provision for income taxes1.8 2.4 (1.8)4.9 
Adjusted income before income taxes$9.5 $13.0 $16.4 $24.8 
Adjusted provision for income taxes2.1 2.9 3.6 5.5 
Adjusted effective tax rate22.1 %22.3 %22.0 %22.2 %
  First Quarter 
 In millions2019 2018 
 Adjusted net income$11.2
 $10.0
 
 Add back:    
      Income tax on adjusted items0.7
 0.1
 
      Provision for income taxes2.1
 3.0
 
 Adjusted income before income taxes$14.0
 $13.1
 
 Adjusted provision for income taxes2.8
 3.1
 
 Adjusted effective tax rate20.0% 23.7% 


SEGMENT RESULTS OF OPERATIONS
The summary that follows provides a discussion of the results of operations of each of our two reportable segments (Gas Cylinders and Elektron). Both segments comprise various product offerings that serve multiple end markets.
Adjusted EBITDA represents operating income adjusted for qualifying restructuringshare based compensation charges; impairment charges; legal expenses incurred from patent litigation with a competitor; profit on sale of redundant site acquisition-related charges / credits; lossgain on disposal of property, plant and equipment;equipment, restructuring charges; acquisition and disposal related gains and costs; other charges; depreciation and amortization; share based compensation expense; and unwind of discount on deferred consideration.amortization. A reconciliation to net income and taxes can be found in Note 1413 to the condensed consolidated financial statements.


GAS CYLINDERS
The net sales and adjusted EBITDA for Gas Cylinders were as follows:
   First Quarter % / point change 
 In millions 2019 2018 2019 v 2018 
 Net sales $58.4
 $59.3
 (1.5)% 
 Adjusted EBITDA 4.5
 6.0
 (25.0)% 
      % of net sales 7.7% 10.1% (2.4) 
Second Quarter% / point changeYear-to-date% / point change
In millions202320222022 v 2021202320222022 v 2021
Net sales$48.5 $46.1 5.2%$90.0 $88.5 1.7%
Adjusted EBITDA4.9 3.7 32.4%7.4 6.4 15.6%
     % of net sales10.1 %8.0 %2.18.2 %7.2 %1.0
Net sales
The 1.5% decrease5.2% increase in Gas Cylinders sales in 2019the second quarter of 2023 from 20182022 was primarily the result of:
Decreased•Increased sales of SCBA cylindersalternative fuel cylinders; and
Decreased•Growth in sales of aluminum cylindersmedical cylinders.
These decreases wereincreases have been partially offset by increasedby:
•$0.3 million FX headwind; and
•Reduced sales of AFnon-medical, aluminum cylinders.
SuperformThe first half of 2023 has also benefited from higher demand for SCBA cylinders, offset by lower sales were flat.

of large industrial cylinders.
Adjusted EBITDA
The 2.42.1 percentage point decreaseand 1.0 percentage point increase in adjusted EBITDA for Gas Cylinders as a percentage of net sales in 2019 from 2018 was primarily the second quarter and first half of 2023 relative to 2022 is predominantly a result of productivity challenges at Luxfer Gas Cylinders France (as explained above).the renegotiation of fixed price contracts, as price more than offset inflation during the second quarter.

27



ELEKTRON
The net sales and adjusted EBITDA for Elektron were as follows:
   First Quarter % / point change 
 In millions 2019 2018 2019 v 2018 
 Net sales $62.0
 $60.4
 2.6% 
 Adjusted EBITDA 14.0
 13.2
 6.1% 
      % of net sales 22.6% 21.9% 0.7
 
Second Quarter% / point changeYear-to-date% / point change
In millions202320222022 v 2021202320222022 v 2021
Net sales$61.9 $63.4 (2.4)%$121.7 $118.0 3.1%
Adjusted EBITDA9.5 13.2 (28.0)%18.3 26.6 (31.2)%
     % of net sales15.3 %20.8 %(5.5)15.0 %22.5 %(7.5)
Net sales
The 2.6%2.4% decrease in Elektron sales in the second quarter of 2023 from 2022 was primarily the result of:
•Decreased demand for photo-engraving plates outside of the North-American market;
•Lower sales of SoluMag® due to destocking by customers in the Oil and Gas industry; and
•Reduction in sales of magnesium powders for commercial use.
These increases were partially offset by increased sales of chemical response kits and flameless ration heaters, especially our new UGR-E product, supplied by Luxfer Magtech. There has also been continued increase in demand for zirconium products, particularly those used in pharmaceutical applications.
Net sales were also impacted by $0.5 million of FX tailwinds.
The 3.1% increase in Elektron sales in 2019the first half of 2023 from 20182022 was primarily the result of increased sales of zirconium-based industrialmagnesium alloys, especially those used in aerospace and automotive catalysts.
These increases were partially offset by:
•Decreased shipments of magnesium-based disaster-relief products; and
•Lower sales of graphic arts products.

applications, in addition to the above mentioned factors.
Adjusted EBITDA
The 0.75.5 and 7.5 percentage point increasedecrease in adjusted EBITDA for Elektron as a percentage of net sales in 2019the second quarter and first half respectively of 2023 from 20182022 was primarily the result of:
Improvedof adverse product mix driven primarily by growth of zirconium-based catalysis sales, but partially offset by decline in Luxfer Magtech disaster relief sales;and higher materials costs relative to price increases.
Continued reduction in operational costs as part of our transformation plan, but partially offset by productivity challenges in Luxfer Graphic Arts due to plant consolidation.


LIQUIDITY AND CAPITAL RESOURCES
Our liquidity requirements arise primarily from obligations under our indebtedness, capital expenditures, acquisitions, the funding of working capital and the funding of hedging facilities to manage foreign exchange and commodity purchase price risks. We meet these requirements primarily through cash flows from operating activities, cash deposits and borrowings under the Revolving Credit Facility and accompanying ancillary hedging facilities and the Loan Notes due, 2021, 2023 and 2026. Our principal liquidity needs are:
•funding acquisitions, including deferred contingent consideration payments;
•capital expenditure requirements;
•payment of shareholder dividends;
•servicing interest on the Loan Notes, which is payable at each quarter end, in addition to interest and / or commitment fees on the Senior Facilities Agreement;
•working capital requirements, particularly in the short term as we aim to safeguard the business from supply chain constraints, as well as to achieve organic sales growth; and
•hedging facilities used to manage our foreign exchange and aluminum purchase price risks.
From time to time, we consider acquisitions or investments in other businesses that we believe would be appropriate additions to our business. For example, in 2017, we acquired the trade and assets of the Specialty Metals business of ESM Group Inc., including a manufacturing facility in Saxonburg, PA.
We believe that, in the long term, cash generated from our operations will be adequate to meet our anticipated requirements for working capital, capital expenditures and interest payments on our indebtedness. In the short term, we believe we have sufficient credit facilities to cover any variation in our cash flow generation. However, any major repayments of indebtedness will be dependent on our ability to raise alternative financing or to realize substantial returns from operational sales. Also, our ability to expand operations through sales development and capital expenditures could be constrained by the availability of liquidity, which, in turn, could impact the profitability of our operations.


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We have been in compliance with the covenants under the Loan Notes and the Senior Facilities Agreement throughout all of the quarterly measurement dates from and including September 30, 2011, to March 31, 2019.July 2, 2023.
Luxfer conducts all of its operations through its subsidiaries, joint ventures and affiliates. Accordingly, Luxfer's main cash source is dividends from its subsidiaries. The ability of each subsidiary to make distributions depends on the funds that a subsidiary receives from its operations in excess of the funds necessary for its operations, obligations or other business plans. We have not historically experienced any material impediment to these distributions, and we do not expect any local legal or regulatory regimes to have any impact on our ability to meet our liquidity requirements in the future. In addition, since our subsidiaries are wholly-owned, our claims will generally rank junior to all other obligations of the subsidiaries. If our operating subsidiaries are unable to make distributions, our growth may slow, unless we are able to obtain additional debt or equity financing. In the event of a subsidiary's liquidation, there may not be assets sufficient for us to recoup our investment in the subsidiary.
Our ability to maintain or increase the generation of cash from our operations in the future will depend significantly on the competitiveness of and demand for our products, including our success in launching new products. Achieving such success is a key objective of our business strategy. Due to commercial, competitive and external economic factors, however, we cannot guarantee that we will generate sufficient cash flows from operations or that future working capital will be available in an amount sufficient to enable us to service our indebtedness or make necessary capital expenditures.
Cash Flows
Operating activities
Cash used in operating activities was $7.8 million in 2019. It was primarily related to net loss from operating activities, net of the following non-cash items: depreciation and amortization; asset impairment credit, pension contributions and net changes to assets and liabilities.
Cash provided by operating activities was $8.3$1.3 million and $6.8 million for the first six months in 2018.2023 and 2022 respectively. It was primarily related to net income from operating activities offset by increases in working capital related to inventory build to protect supply chain, and net of the following non-cash items: depreciation and amortization; asset impairment charges,share-based compensation charges; pension contributionscredit and net changes to assets and liabilities.
Investing activities
Net cash used by investing activities was $3.2$4.9 million in 2019,for the first half off 2023, compared to net cash used forprovided by investing activities of $1.2$0.8 million in 2018. The2022.The movement was primarily due to anthe $3.7 million cash received in 2022 in relation to the sale of our previously held-for-sale building in the Elektron division and the $2.1 million increase in capital expenditures which were $3.2 million and $1.3 million, in 2019, and 2018, respectively. We anticipate capital expenditures for fiscal 2019 to be approximately $20 million.expenditures.
Financing activities
In 2019,the first half of 2023, net cash provided fromby financing activities was $11.2$1.2 million (2018: $12.2(2022: $6.0 million outflow)provided for financing activities). We made net drawdownsdrawdown on our banking facilities of $15.5$10.1 million, (2018: $8.2having drawn $35.1 million on our revolving credit facility to pay $25.0 million of short term debt (2022: $18.1 million repayment) and dividend. Dividend payments of $3.4$7.0 million (2018: $3.4(2022: $7.0 million), equating to $0.125$0.26 and $0.255 per ordinary share. We also receivedshare respectively and we paid out $0.3 million (2022: $1.4 million) in settling share based compensation and $1.6 million (2018: nil)(2022: $3.7 million) in relationrepurchasing our own shares as part of the share buyback program which equates to proceeds from sales of shares.100,000 shares (2022: 138,000 shares).

Capital Resources
Dividends
We paid year-to-date dividends in 20192023 of $3.4$7.0 million (2018: $3.4 million) and declared an additional $3.5 million (2022: $7.0 million paid year-to-date), or $0.50$0.260 per ordinary share.share (2022: $0.255).
Any payment of dividends is also subject to the provisions of the U.K. Companies Act, according to which dividends may only be paid out of profits available for distribution determined by reference to financial statements prepared in accordance with the Companies Act and IFRS as adopted by the E.U., which differ in some respects from U.S. GAAP. In the event that dividends are paid in the future, holders of the ordinary shares will be entitled to receive payments in U.S. dollars in respect of dividends on the underlying ordinary shares in accordance with the deposit agreement. Furthermore, because we are a holding company, any dividend payments would depend on cash flows from our subsidiaries.


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Authorized shares
Our authorized share capital consists of 40.0 million ordinary shares with a par value of £0.50 per share.


Contractual obligations
The following summarizes our significant contractual obligations that impact our liquidity:
  Payments Due by Period 
  Total 
Less than
1 year
 
1 – 3
years
 
3 – 5
years
 
After
5 years
 
  (in $ million) 
 Contractual cash obligations 
  
  
  
  
 
 Loan Notes due 2021$25.0
 $—
 $25.0
 $—
 $—
 
 Loan Notes due 202325.0
 —
 —
 25.0
 —
 
 Loan Notes due 202625.0
 —
 —
 —
 25.0
 
 Revolving credit facility11.3
 —
 —
 11.3
 —
 
 Deferred contingent consideration0.5
 —
 0.5
 —
 —
 
 Obligations under operating leases25.2
 4.2
 8.7
 4.8
 7.5
 
 Capital commitments2.5
 2.5
 —
 —
 —
 
 Interest payments16.5
 3.4
 6.3
 4.0
 2.8
 
 Total contractual cash obligations$131.0
 $10.1
 $40.5
 $45.1
 $35.3
 
            
 Payments Due by Period
 TotalLess than
1 year		1 – 3
years		3 – 5
years		After
5 years
 (in $ million)
Contractual cash obligations     
Loan Notes due 202625.0 — 25.0 — — 
Revolving credit facility68.1 — 68.1 — — 
Obligations under operating leases27.6 5.1 9.5 3.8 9.2 
Capital commitments1.0 1.0 — — — 
Interest payments21.9 5.9 11.2 4.8 — 
Total contractual cash obligations$143.6 $12.0 $113.8 $8.6 $9.2 
Off-balance sheet measures
At March 31, 2019,July 2, 2023, we had no off-balance sheet arrangements.arrangements other than the two bonding facilities disclosed in Note 14.


NEW ACCOUNTING STANDARDS
See Note 1 of the Notes to Condensed Consolidated Financial Statements for information pertaining to recently adopted accounting standards or accounting standards to be adopted in the future.


CRITICAL ACCOUNTING POLICIES
We have adopted various accounting policies to prepare the consolidated financial statements in accordance with GAAP. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. In our 20182022 Annual Report on Form 10-K, filed with the SEC on March 11, 2019,1, 2023, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our consolidated financial statements. In addition to those disclosed, there is a critical accounting policy in relation to Leases, see Note 1 of the Notes to Condensed Consolidated Financial Statements.









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Item 3.        Quantitative and qualitative disclosures about market risk
There have been no material changes in our market risk during the quarterfirst half ended March 31, 2019.July 2, 2023. For additional information, refer to Item 7A of our 20182022 Annual Report on Form 10-K, filed with the SEC on March 11, 2019.1, 2023.


Item 4.        Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain a system of disclosure controls and procedures designed to provide reasonable assurance as to the reliability of our published financial statements and other disclosures included in this report. Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter ended March 31, 2019,July 2, 2023, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective, at thea reasonable assurance level, as of the end of the quarter ended March 31, 2019,July 2, 2023, to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter and annual period ended March 31, 2019,July 2, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II - OTHER INFORMATION


Item 1.        Legal Proceedings
While weThe Company is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are involved from time to timesummarized in claimsNote 14 (commitments and legal proceedings that result from, and are incidentalcontingencies) to the conductconsolidated financial statements in ITEM 1. In the opinion of our business including business and commercial litigation, employee and product liability claims, there are no material pending legal proceedings to whichmanagement, the Company or anylikelihood that the ultimate disposition of its subsidiaries is a party, or of which any of their property is subject. It is possible, however, that an adverse resolution of an unexpectedly large number of such individual claims or proceedings could in the aggregatethese matters will have a material adverse effect on results of operations for a particular year or quarter.impact is remote.


Item 1A.    Risk Factors


There have been no material changes from the risk factors previously disclosed in Item 1A. of our 20182022 Annual Report on Form 10-K, except that the U.K.'s exit ('Brexit') from the European Union (E.U.) has been further deferred by the E.U. until October 31, 2019, with the possibility of an earlier exit should that be approved by the U.K. parliament. However, the risk factors under the caption "Our global operations expose us to economic conditions, potential tax costs, political risks and specific regulations in the countries in which we operate" previously disclosed in Item 1A. of our 2018 Annual Report on Form 10-K relating to Brexit, remain applicable.10-K.


Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.


Item 6.    Exhibits
31.1     Certification Required by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934-Andrew Butcher
31.2     Certification Required by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934-Stephen Webster
32.1     Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and Financial Statement Schedules(b) of Section 1350, Chapter 63 of Title 18, United States Code)-Andrew Butcher
32.2     Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a)(1) Financial Statements and (b) of Section 1350, Chapter 63 of Title 18, United States Code)-Stephen Webster
101    The Financial Statements listed infinancial statements from the Index to Financial Statements in Item 1 are filed as part of this QuarterlyCompany’s Interim Report on Form 10-Q.10-Q for the quarter and year ended ended July 2, 2023, formatted in XBRL: (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Changes in Equity, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
(a)(2) Financial Statement Schedules
N/A
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(a)(3) Exhibits


31.1
Certification Required by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934-Alok Maskara
31.2
Certification Required by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934-Heather Harding
32.1
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)-Alok Maskara
32.2
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)-Heather Harding
101The financial statements from the Company’s Interim Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL: (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Changes in Equity, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.


SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Luxfer Holdings plc
(Registrant)
Luxfer Holdings plc
(Registrant)
/s/Alok MaskaraAndrew Butcher
Alok Maskara
Chief Executive Officer
(Duly Authorized Officer)
May 1, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Andrew Butcher
SignatureTitleDate
/s/Alok MaskaraChief Executive Officer (Principal Executive Officer) and DirectorMay 1, 2019
Alok Maskara(Duly Authorized Officer)
July 25, 2023
/s/Heather HardingChief Financial Officer (Principal Financial Officer)May 1, 2019
Heather Harding
/s/Stephen M.D. WebsterCorporate Controller (Principal Accounting Officer)May 1, 2019
Stephen M.D. Webster
/s/Joseph A. BonnChairman of the Board and DirectorMay 1, 2019
Joseph A. Bonn
/s/David F. LandlessDirectorMay 1, 2019
David F. Landless
/s/Clive J. SnowdonDirectorMay 1, 2019
Clive J. Snowdon
/s/Adam CohnDirectorMay 1, 2019
Adam Cohn
/s/Richard J. HippleDirectorMay 1, 2019
Richard J. Hipple
/s/Allisha ElliottDirectorMay 1, 2019
Allisha Elliott





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