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 September 29, 2019
For the Quarterly Period Ended March 29, 2020


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 Wales 98-1024030
State or Other Jurisdiction of
 Incorporation or Organization
 I.R.S. Employer Identification No.
Lumns Lane, Manchester, M27 8LN
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. Yesx 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). Yesx 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 SeptemberMarch 29, 2019,2020, was 27,411,622.27,500,415.


 




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

 
  Condensed Consolidated Statements of Income (unaudited) 1

 
  Condensed Consolidated Statements of Comprehensive Income(Loss) / (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) 76

 
 Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations 2319

 
 Item 3.Quantitative and Qualitative Disclosures About Market Risk 3430

 
 Item 4.Controls and Procedures 3430

 
 PART II OTHER INFORMATION 
 Item 1.Legal Proceedings 3531

 
 Item 1A.Risk Factors 3531

 
 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 3531

 
 Item 6.Exhibits 3632

 
  Signatures 3733

 





PART I - FINANCIAL INFORMATION


Item 1.        Condensed Financial Statements (unaudited)


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
   Third Quarter Year-to-date 
 In millions, except share and per-share data 2019
 2018
 2019
 2018
 
 Net sales $107.1
 $129.1
 $344.0
 $377.0
 
 Cost of goods sold (81.9) (95.1) (257.7) (279.1) 
 Gross profit 25.2
 34.0
 86.3
 97.9
 
 Selling, general and administrative expenses (11.8) (15.2) (42.6) (47.2) 
 Research and development (1.5) (2.0) (4.5) (5.5) 
 Restructuring charges (2.6) (1.1) (24.3) (2.1) 
 Impairment charges —
 —
 0.2
 —
 
 Acquisition and disposal related costs —
 —
 (1.7) —
 
 Other charges (2.7) —
 (2.7) —
 
 Operating income 6.6
 15.7
 10.7
 43.1
 
 Interest expense (1.3) (1.3) (3.5) (4.0) 
 Interest income —
 0.1
 —
 0.3
 
 Defined benefit pension credit 0.6
 1.3
 1.7
 3.9
 
 Income before income taxes and equity in net income of affiliates 5.9
 15.8
 8.9
 43.3
 
 Provision for income taxes (0.6) (3.5) (4.1) (9.9) 
 Income before equity in net income of affiliates 5.3
 12.3
 4.8
 33.4
 
 Equity income / (loss) of affiliates (net of tax) 0.5
 (0.1) 0.7
 0.1
 
 Net income $5.8
 $12.2
 $5.5
 $33.5
 
           
 Earnings per share         
 Basic $0.21
 $0.46
 $0.20
 $1.26
 
 Diluted $0.21
 $0.44
 $0.20
 $1.22
 
 Weighted average ordinary shares outstanding         
 Basic 27,393,743
 26,773,064
 27,243,638
 26,614,646
 
 Diluted 27,869,416
 27,657,093
 27,843,525
 27,507,527
 
            First Quarter
 In millions, except share and per-share data 2020
 2019
 
 Net sales $103.8
 $120.4
 
 Cost of goods sold (79.3) (90.3) 
 Gross profit 24.5
 30.1
 
 Selling, general and administrative expenses (12.8) (16.4) 
 Research and development (0.7) (1.4) 
 Restructuring charges (2.8) (9.0) 
 Impairment charges —
 0.2
 
 Acquisition related costs (0.2) (4.6) 
 Operating income / (loss) 8.0
 (1.1) 
 Interest expense (1.2) (1.1) 
 Defined benefit pension credit 1.1
 0.6
 
 Income / (loss) before income taxes and equity in net income of affiliates 7.9
 (1.6) 
 Provision for income taxes (1.7) (2.1) 
 Income / (loss) before equity in net income of affiliates 6.2
 (3.7) 
 Equity income / (loss) of affiliates (net of tax) —
 (0.1) 
 Net income / (loss) $6.2
 $(3.8) 
       
 Earnings / (loss) per share     
 Basic $0.23
 $(0.14) 
 Diluted $0.22
 $(0.14) 
 Weighted average ordinary shares outstanding     
 Basic 27,440,423
 27,032,677
 
 Diluted 27,894,058
 27,032,677
 


See accompanying notes to condensed consolidated financial statements


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME (UNAUDITED)
   Third Quarter Year-to-date 
 In millions 2019
 2018
 2019
 2018
 
 Net income $5.8
 $12.2
 $5.5
 $33.5
 
           
 Other comprehensive (loss) / income         
 Net change in foreign currency translation adjustment (2.5) (1.2) (4.7) (4.0) 
 Pension and post-retirement actuarial gains, net of $0.1, $1.5, $0.3 and $3.2 tax, respectively 0.5
 5.5
 1.3
 13.1
 
 Other comprehensive (loss) / income, net of tax (2.0) 4.3
 (3.4) 9.1
 
           
 Total comprehensive income $3.8
 $16.5
 $2.1
 $42.6
 
   First Quarter 
 In millions 2020
 2019
 
 Net income / (loss) $6.2
 $(3.8) 
       
 Other comprehensive (loss) / income     
 Net change in foreign currency translation adjustment (7.6) 1.4
 
 Pension and post-retirement actuarial gains , net of $0.1 and $0.1 tax, respectively 0.3
 0.5
 
 Cash flow hedges, net of $0.0 and $0.0 of tax, respectively —
 0.2
 
 Other comprehensive (loss) / income, net of tax (7.3) 2.1
 
       
 Total comprehensive loss $(1.1) $(1.7) 


See accompanying notes to condensed consolidated financial statements




LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
  September 29,
 December 31,
 
 In millions, except share and per-share data2019
 2018
 
 Current assets    
 Cash and cash equivalents$11.9
 $13.8
 
 Restricted cash0.2
 0.3
 
 Accounts and other receivables, net of allowances of $1.8 and $2.4, respectively73.1
 62.7
 
 Inventories96.2
 93.6
 
 Other current assets5.9
 10.7
 
 Total current assets$187.3
 $181.1
 
 Non-current assets    
 Property, plant and equipment, net$101.5
 $106.9
 
 Right-of-use assets from operating leases15.1
 18.4
 
 Goodwill66.4
 67.6
 
 Intangibles, net13.4
 14.6
 
 Deferred tax assets16.5
 18.6
 
 Investments and loans to joint ventures and other affiliates2.2
 1.6
 
 Total assets$402.4
 $408.8
 
 Current liabilities    
 Current maturities of long-term debt and short-term borrowings$—
 $3.5
 
 Accounts payable35.2
 36.9
 
 Accrued liabilities25.4
 33.8
 
 Taxes on income0.1
 1.6
 
 Other current liabilities11.8
 15.4
 
 Total current liabilities$72.5
 $91.2
 
 Non-current liabilities    
 Long-term debt$105.6
 $73.6
 
 Pensions and other retirement benefits28.6
 40.0
 
 Deferred tax liabilities3.0
 3.5
 
 Other non-current liabilities13.5
 16.2
 
 Total liabilities$223.2
 $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 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 capital67.8
 65.6
 
 Treasury shares(4.0) (4.3) 
 Own shares held by ESOP(1.7) (2.2) 
 Retained earnings90.6
 95.3
 
 Accumulated other comprehensive loss(150.0) (146.6) 
 Total shareholders' equity$179.2
 $184.3
 
 Total liabilities and shareholders' equity$402.4
 $408.8
 
  March 29,
 December 31,
 
 In millions, except share and per-share data2020
 2019
 
 Current assets    
 Cash and cash equivalents$17.3
 $10.2
 
 Restricted cash0.1
 0.1
 
 Accounts and other receivables, net of allowances of $1.9 and $1.3, respectively73.6
 66.3
 
 Inventories93.9
 94.5
 
 Other current assets4.1
 5.0
 
 Total current assets$189.0
 $176.1
 
 Non-current assets    
 Property, plant and equipment, net$94.3
 $98.9
 
 Right-of-use assets from operating leases13.5
 14.8
 
 Goodwill66.2
 68.8
 
 Intangibles, net13.0
 13.6
 
 Deferred tax assets14.4
 15.8
 
 Investments and loans to joint ventures and other affiliates2.1
 2.3
 
 Total assets$392.5
 $390.3
 
 Current liabilities    
 Accounts payable$31.6
 $36.4
 
 Accrued liabilities24.8
 25.2
 
 Taxes on income0.6
 0.1
 
 Other current liabilities12.2
 12.3
 
 Total current liabilities$69.2
 $74.0
 
 Non-current liabilities    
 Long-term debt$108.8
 $91.4
 
 Pensions and other retirement benefits30.4
 35.2
 
 Deferred tax liabilities2.6
 2.5
 
 Other non-current liabilities11.7
 12.8
 
 Total liabilities$222.7
 $215.9
 
 Shareholders' equity    
 Ordinary shares of £0.50 par value; authorized 40,000,000 shares for 2020 and 2019; issued and outstanding 29,000,000 shares for 2020 and 2019$26.6
 $26.6
 
 Deferred shares of £0.0001 par value; authorized issued and outstanding 761,835,338,444 shares for 2020 and 2019149.9
 149.9
 
 Additional paid-in capital68.2
 68.4
 
 Treasury shares(4.0) (4.0) 
 Own shares held by ESOP(1.6) (1.7) 
 Retained earnings87.6
 84.8
 
 Accumulated other comprehensive loss(156.9) (149.6) 
 Total shareholders' equity$169.8
 $174.4
 
 Total liabilities and shareholders' equity$392.5
 $390.3
 
See accompanying notes to condensed consolidated financial statements


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
   First Quarter 
 In millions 2020
 2019
 
 Operating activities     
 Net income / (loss) $6.2
 $(3.8) 
 Adjustments to reconcile net income / (loss) to net cash used for operating activities     
    Equity income / (loss) of affiliates —
 0.1
 
    Depreciation 3.4
 3.4
 
    Amortization of purchased intangible assets 0.2
 0.3
 
    Amortization of debt issuance costs 0.1
 0.1
 
    Share-based compensation charges 0.5
 2.6
 
    Deferred income taxes 0.2
 0.8
 
    Asset impairment charges —
 (0.2) 
    Defined benefit pension credit (1.1) (0.6) 
    Defined benefit pension contributions (1.4) (1.9) 
 Changes in assets and liabilities     
    Accounts and other receivables (5.6) (10.4) 
    Inventories (2.1) (3.6) 
    Other current assets 0.7
 —
 
    Accounts payable (7.3) (0.8) 
    Accrued liabilities 0.8
 (1.7) 
    Other current liabilities 1.1
 7.2
 
    Other non-current assets and liabilities (0.2) 0.7
 
 Net cash used for operating activities $(4.5) $(7.8) 
 Investing activities     
 Capital expenditures $(2.5) $(3.2) 
 Net cash used for investing activities $(2.5) $(3.2) 
 Financing activities     
 Net drawdown of short-term borrowings $—
 $4.2
 
 Net drawdown of long-term borrowings 18.9
 11.3
 
 Deferred consideration paid (0.4) (0.5) 
 Proceeds from sale of shares 0.1
 1.4
 
 Share-based compensation cash paid (0.7) (1.8) 
 Dividends paid (3.4) (3.4) 
 Net cash from financing activities $14.5
 $11.2
 
 Effect of exchange rate changes on cash and cash equivalents (0.4) 0.2
 
 Net increase $7.1
 $0.4
 
 Cash, cash equivalents and restricted cash; beginning of year 10.3
 14.1
 
 Cash, cash equivalents and restricted cash; end of the First Quarter 17.4
 14.5
 
       
 Supplemental cash flow information:     
 Interest payments $1.3
 $1.1
 
 Income tax payments 0.1
 —
 
   Year-to-date 
 In millions 2019
 2018
 
 Operating activities     
 Net income $5.5
 $33.5
 
 Adjustments to reconcile net income to net cash (used for) / provided by operating activities     
    Equity income of unconsolidated affiliates (0.7) (0.1) 
    Depreciation 10.4
 13.6
 
    Amortization of purchased intangible assets 0.9
 0.9
 
    Loss on disposal of property, plant and equipment —
 0.2
 
    Amortization of debt issuance costs 0.3
 0.4
 
    Share-based compensation charges 4.0
 3.1
 
    Deferred income taxes 1.5
 9.9
 
    Gain on disposal of business (2.9) —
 
    Asset impairment charges 4.8
 —
 
    Pension and other post-retirement expense / (credit) 2.2
 0.6
 
    Defined benefit pension contributions (5.7) (6.1) 
    Defined contribution pension and other post-retirement contributions (3.5) (3.9) 
 Changes in assets and liabilities, net of effects of business acquisitions     
    Accounts and notes receivable (7.2) (5.3) 
    Inventories (3.8) (15.6) 
    Other current assets (1.9) 1.2
 
    Accounts payable (4.8) 7.7
 
    Accrued liabilities (8.2) 7.6
 
    Other current liabilities (2.2) (2.7) 
    Other non-current assets and liabilities (2.3) (5.1) 
 Net cash (used for) / provided by operating activities $(13.6) $39.9
 
 Investing activities     
 Capital expenditures $(10.3) $(8.2) 
 Proceeds from sale of property, plant and equipment 1.2
 —
 
 Proceeds from sale of businesses 4.6
 —
 
 Investments in unconsolidated affiliates —
 0.8
 
 Acquisitions, net of cash acquired —
 (0.5) 
 Net cash used for investing activities $(4.5) $(7.9) 
 Financing activities     
 Net repayments of short-term borrowings $(3.5) $(19.2) 
 Net drawdown / (repayment) of long-term borrowings 31.7
 (6.1) 
 Deferred consideration paid (0.5) —
 
 Proceeds from sale of shares 3.3
 6.3
 
 Share-based compensation cash paid (4.3) (7.0) 
 Dividends paid (10.2) (10.0) 
 Net cash from / (used for) financing activities $16.5
 $(36.0) 
 Effect of exchange rate changes on cash and cash equivalents (0.4) (0.4) 
 Net decrease $(2.0) $(4.4) 
 Cash, cash equivalents and restricted cash; beginning of year 14.1
 13.3
 
 Cash, cash equivalents and restricted cash; end of the Third Quarter 12.1
 8.9
 
       
 Supplemental cash flow information:     
 Interest payments $3.5
 $3.8
 
 Income tax payments 6.6
 2.8
 
See accompanying notes to condensed consolidated financial statements


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
 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, 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 treasury shares to satisfy share based compensation —
 —
 (0.2) —
—
 0.1
0.2
 —
 —
 —
 
 At March 31, 2019 $26.6
 $149.9
 $65.9
 (0.5)$(4.3) (1.4)$(1.9) $88.1
 $(144.5) $179.8
 
                     
 At January 1, 2020 $26.6
 $149.9
 $68.4
 (0.4)$(4.0) (1.2)$(1.7) $84.8
 $(149.6) $174.4
 
 Net income —
 —
 —
 —
—
 —
—
 6.2
 —
 6.2
 
 Other comprehensive loss, net of tax —
 —
 —
 —
—
 —
—
 —
 (7.3) (7.3) 
 Dividends declared —
 —
 —
 —
—
 —
—
 (3.4) —
 (3.4) 
 Share-based compensation —
 —
 0.5
 —
—
 —
—
 —
 —
 0.5
 
 Utilization of shares from ESOP to satisfy share based compensation —
 —
 (0.7) —
—
 0.1
0.1
 —
 —
 (0.6) 
 At March 29, 2020 $26.6
 $149.9
 $68.2
 (0.4)$(4.0) (1.1)$(1.6) $87.6
 $(156.9) $169.8
 
 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, 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 charges —
 —
 2.3
 —
—
 —
—
 —
 —
 2.3
 
 Utilization of shares from ESOP to satisfy share based compensation —
 —
 (3.3) —
—
 0.1
0.2
 —
 —
 (3.1) 
 At March 31, 2019 $26.6
 $149.9
 $65.9
 (0.4)$(4.3) (1.4)$(1.9) $88.1
 $(144.5) $179.8
 
 Net income —
 —
 —
 —
—
 —
—
 3.5
 —
 3.5
 
 Shares sold from ESOP —
 —
 1.8
 —
—
 0.1
0.1
 —
 —
 1.9
 
 Other comprehensive loss, net of tax —
 —
 —
 —
—
 —
—
 —
 (3.5) (3.5) 
 Dividends declared —
 —
 —
 —
—
 —
—
 (3.4) —
 (3.4) 
 Share based compensation charges —
 —
 0.8
 —
—
 —
—
 —
 —
 0.8
 
 Utilization of shares from ESOP to satisfy share based compensation —
 —
 (1.2) —
—
 0.1
0.1
 —
 —
 (1.1) 
 At June 30, 2019 $26.6
 $149.9
 $67.3
 (0.4)$(4.3) (1.2)$(1.7) $88.2
 $(148.0) $178.0
 
 Net income —
 —
 —
 —
—
 —
—
 5.8
 —
 5.8
 
 Other comprehensive loss, net of tax —
 —
 —
 —
—
 —
—
 —
 (2.0) (2.0) 
 Dividends declared —
 —
 —
 —
—
 —
—
 (3.4) —
 (3.4) 
 Share based compensation charges —
 —
 0.6
 —
—
 —
—
 —
 —
 0.6
 
 Utilization of treasury shares to satisfy share based compensation —
 —
 (0.1) —
0.3
 —
—
 —
 —
 0.2
 
 At September 29, 2019 $26.6
 $149.9
 $67.8
 (0.4)$(4.0) (1.2)$(1.7) $90.6
 $(150.0) $179.2
 


Ordinary share capital includes 29,000,000 shares in the three quarters of 2019.2020, 29,000,000 shares in 2019, respectively.
Deferred share capital includes 761,835,338,444 shares in the three quarters of 2019.


LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
 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 for the year —
 —
 —
 —
—
 —
—
 9.9
 —
 9.9
 
 Other comprehensive loss, net of tax —
 —
 —
 —
—
 —
—
 —
 (0.5) (0.5) 
 Dividends declared —
 —
 —
 —
—
 —
—
 (6.7) —
 (6.7) 
 Share based compensation charges —
 —
 (0.1) —
—
 —
—
 —
 —
 (0.1) 
 Purchase of shares from ESOP —
 —
 (0.1) —
—
 —
0.1
 —
 —
 —
 
 At April 1, 2018 $25.3
 $150.9
 $61.9
 (0.5)$(5.8) (0.1)$(0.9) $86.9
 $(141.2) $177.1
 
 Net income for the year —
 —
 —
 —
—
 —
—
 11.4
 —
 11.4
 
 Other comprehensive income, net of tax —
 —
 —
 —
—
 —
—
 —
 5.3
 5.3
 
 Share based compensation charges —
 —
 (2.7) —
—
 —
—
 —
 —
 (2.7) 
 Purchase of shares from ESOP —
 —
 (0.8) —
—
 0.1
0.8
 —
 —
 —
 
 Transfer of shares between treasury and ESOP —
 —
 —
 —
0.2
 —
(0.2) —
 —
 —
 
 At July 1, 2018 $25.3
 $150.9
 $58.4
 (0.5)$(5.6) —
$(0.3) $98.3
 $(135.9) $191.1
 
 Net income —
 —
 —
 —
—
 —
—
 12.2
 —
 12.2
 
 Issue of new shares 1.3
 —
 —
 —
—
 (1.9)(1.3) —
 —
 —
 
 Shares sold from ESOP —
 —
 5.9
 —
—
 0.3
0.4
 —
 —
 6.3
 
 Other comprehensive income, net of tax —
 —
 —
 —
—
 —
—
 —
 4.3
 4.3
 
 Dividends declared —
 —
 —
 —
—
 —
—
 (3.3) —
 (3.3) 
 Share based compensation charges —
 —
 (1.0) —
—
 —
—
 —
 —
 (1.0) 
 
Purchase of shares from ESOP

 —
 —
 (0.3) —
0.1
 —
0.2
 —
 —
 —
 
 
Transfer of shares between treasury and ESOP

 —
 —
 —
 0.1
1.2
 (0.1)(1.2) —
 —
 —
 
 At September 30, 2018 $26.6
 $150.9
 $63.0
 (0.4)$(4.3) (1.7)$(2.2) $107.2
 $(131.6) $209.6
 

Ordinary share capital includes 29,000,0002020, and 761,835,338,444 shares in the first three quarters of 2018.
Deferred share capital includes 769,413,708,000 shares in the first three quarters of 2018.

2019.
See accompanying notes to condensed consolidated financial statements


LUXFER HOLDINGS PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1.    Basis of presentationPresentation and responsibilityResponsibility for interim financial statementsFinancial Statements
We prepared the accompanying unaudited consolidated 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 CodificationUpdate ("ASC"ASU") Topic 842, "Leases"2016-13, "current expected credit loss model". 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, 2018.2019. 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 of a normal recurring nature, necessary for presentation 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 ThirdFirst Quarter, 2020, ended March 29, 2020, and the First Quarter, 2019, ended September 29, 2019,March 31, 2019.
Impact of COVID-19 on the Financial Statements
In March 2020, the World Health Organization characterized the coronavirus ("COVID-19") a pandemic, and the Third Quarter, 2018, ended September 30, 2018.President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. In view of the rapidly changing business environment, unprecedented market volatility and heightened degree of uncertainty resulting from COVID-19, we are currently unable to fully determine its future impact on our business. However, we are monitoring the progression of the pandemic and its potential effect on our financial position, results of operations and cash flows.
The Company recognizes that the COVID-19 pandemic constitutes a triggering event in accordance with ASC 350 Intangibles - Goodwill and Other, and has therefore performed an impairment assessment of its goodwill and other intangible assets. Based on current forecast information we did not identify any impairments, nor marginal outcomes. Assumptions and judgments are required in calculating the fair value of the reporting units. In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in. These assumptions and judgments may change as we learn more about the impact of the COVID-19 pandemic
In relation to liquidity, the Company has access to a large revolving credit facility and has performed stress testing on financial covenants using current forecast information and has not identified any liquidity concerns.
Adoption of new accounting standards
Current expected credit loss ("CECL") model
On January 1, 2019, we2020, the Company adopted ASC Topic 842, "Leases"ASU 2016-13, financial instruments - Credit Losses (Topic 326): Measurement of credit losses on Financial Instruments prospectively. The ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables.
Under the CECL model, the Company is required to consider whether expected credit losses should be recognized for trade receivables that are considered “current” (i.e., not past due).

When using historical loss rates in a provision matrix, the Company is required to consider whether and, appliedif so, how the modified retrospective approach to recognizing any right-of-use assetshistorical loss rates differ from what is currently expected over the life of the trade receivables (on the basis of current conditions and lease liabilities. reasonable and supportable forecasts about the future).
Upon adoption, we have recognized all of our leases greater than one-year in duration and greater than $5,000 fair value, on the condensed consolidated balance sheetsthere was no adjustment made to opening retained earnings 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, with2020.
As a corresponding lease liability, split $3.1result of implementing ASU 2016-13, the Company did not recognize any material additional allowance within Accounts and Other Receivables as at January 1, 2020. Accounts and Other Receivables are shown net of a $1.9 million recognized in Otherallowance at March 29, 2020.
The Company is exposed to credit losses primarily through sales of products. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current liabilities, and $18.1 million recognized in Other non-current liabilities. Classification as either operating or financefuture economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of accounts receivable amounts that may not be collected is based on criteria largely similaraging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to those applied in ASC 840 but without explicit bright lines. Werecord the appropriate provision for customers that have made certain assumptions in judgments when applying ASC 842, those judgmentsa higher probability of most significance are as follows:
We electeddefault. The Company considered 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;current and expected future economic and market conditions surrounding the COVID-19 pandemic 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 Condensed 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 wethe estimate of credit losses was not significantly impacted.
Estimates are reasonably certain of renewingused to determine 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 basisallowance. It is based on the fixed componentsassessment of anticipated receipts and all other historical, current and future information that is reasonably available.
The following table provides a lease arrangement. We amortize this expense over the termroll-forward of the lease beginning withallowance for credit losses that is deducted from the dateamortized cost basis of initial possession, which isaccounts receivable to present the date we enter the leased space and beginnet amount expected to make improvements in preparation for its intended use.be collected.
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.
 In millions2020 
 Balance at January 1,$1.3
 
 Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings—
 
 Provisions for expected credit losses0.7
 
 Other, including foreign currency translation(0.1) 
 Balance at March 29,$1.9
 

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.
Accounting standards issued but not yet effective
None that will be material to the Company.


2.    Earnings per share


Basic earnings per share are computed by dividing net income for the period by the weighted-average number of ordinary shares outstanding, net of Treasury shares and shares held in ESOP. Diluted earnings per share are computed by dividing net income for the period by the weighted average number of ordinary shares outstanding and the dilutive ordinary shares equivalents.
Basic and diluted earnings per share were calculated as follows:
  First Quarter 
 In millions except share and per-share data2020 2019 
 Basic earnings:    
 Net income / (loss)$6.2
 $(3.8) 
 Weighted average number of £0.50 ordinary shares:    
 For basic earnings per share27,440,423
 27,032,677
 
 Dilutive effect of potential common stock453,635
 —
 
 For diluted earnings per share27,894,058
 27,032,677
 
 Earnings / (loss) per share using weighted average number of ordinary shares outstanding:    
 Basic earnings / (loss) per ordinary share$0.23
 $(0.14) 
 Diluted earnings / (loss) per ordinary share$0.22
 $(0.14) 

  Third QuarterYear-to-date 
 In millions except share and per-share data2019 2018 2019 2018 
 Basic earnings:        
 Net income$5.8
 $12.2
 $5.5
 $33.5
 
 Weighted average number of £0.50 ordinary shares:        
 For basic earnings per share27,393,743
 26,773,064
 27,243,638
 26,614,646
 
 Dilutive effect of potential common stock475,673
 884,029
 599,887
 892,881
 
 For diluted earnings per share27,869,416
 27,657,093
 27,843,525
 27,507,527
 
 Earnings per share using weighted average number of ordinary shares outstanding:        
 Basic earnings per ordinary share$0.21
 $0.46
 $0.20
 $1.26
 
 Diluted earnings per ordinary share$0.21
 $0.44
 $0.20
 $1.22
 


In the first quarter of 2019, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since the Company generated a



net loss. As a result, 735,730 shares combined were not included in the computation of diluted EPS for the first quarter of 2019.


3.    Revenue
Disaggregated sales disclosures for the quarter ended March 29, 2020, and year-to-date ended September 29,March 31, 2019, and September 30, 2018, are included below and in Note 15,14, Segmental Information.
  First Quarter 
  2020 2019 
 In millionsGas CylindersElektronTotal Gas CylindersElektronTotal 
 General industrial$11.9
$27.7
$39.6
 $13.1
$30.6
$43.7
 
 Transportation18.9
11.2
30.1
 20.9
19.1
40.0
 
 Defense and emergency18.1
11.4
29.5
 18.7
10.5
29.2
 
 Healthcare3.7
0.9
4.6
 5.7
1.8
7.5
 
  $52.6
$51.2
$103.8
 $58.4
$62.0
$120.4
 
  Third Quarter 
  2019 2018 
 In millionsGas CylindersElektronTotal Gas CylindersElektronTotal 
 General industrial$10.1
$29.0
$39.1
 $13.4
$38.3
$51.7
 
 Transportation20.8
11.9
32.7
 21.0
18.1
39.1
 
 Defense and emergency17.8
11.5
29.3
 20.4
10.3
30.7
 
 Healthcare5.5
0.5
6.0
 7.4
0.2
7.6
 
  $54.2
$52.9
$107.1
 $62.2
$66.9
$129.1
 
  Year-to-date 
  2019 2018 
 In millionsGas CylindersElektronTotal Gas CylindersElektronTotal 
 General industrial$34.2
$88.1
$122.3
 $40.2
$99.3
$139.5
 
 Transportation65.8
48.2
114.0
 57.3
55.2
112.5
 
 Defense and emergency55.2
34.2
89.4
 62.3
38.4
100.7
 
 Healthcare15.5
2.8
18.3
 22.1
2.2
24.3
 
  $170.7
$173.3
$344.0
 $181.9
$195.1
$377.0
 

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. Design and tooling arrangements are the only contracts for which sales are recognized over time. Sales from these sources combined accounted for less than 1% of the Company’s sales for the quarters ended March 29, 2020, and year-to-date ended September 29, 2019, and September 30, 2018.March 31, 2019. All consideration from contracts with customers is included in these amounts.
The following table provides information about contract receivables, contract assets and contract liabilities from contracts with customers:
 In millionsMarch 29, 2020 December 31, 2019 
 Contract receivables$1.5
 $1.7
 
 Contract assets0.5
 1.3
 
 Contract liabilities(0.4) (0.5) 

 In millionsSeptember 29, 2019 December 31, 2018 
 Contract receivables$1.6
 $1.5
 
 Contract assets1.6
 2.1
 
 Contract liabilities$(0.4) $(1.1) 
Contract assets consist of $1.6$0.5 million accrued unbilled amounts relating to tooling revenue and are recognized in prepayments and accrued income in the condensed consolidated balance sheets. Of the $2.1$1.3 million contract assets recognized as of December 31, 2018, $1.62019, $0.4 million was billed to customers and transferred to receivables as of SeptemberMarch 29, 2019.2020.
Contract liabilities of $0.4 million consist of advance payments and billing above costs incurred and are recognized as other current liabilitiesin the condensed consolidated balance sheets.. Significant changes in contract liabilities balances during the period are as follows:
 In millions2020 
 As at January 1,$(0.5) 
 Net (payments received) / amounts billed(0.1) 
 Net (costs incurred) / revenue recognized0.2
 
 As at March 29,$(0.4) 

 In millions2019 
 As at January 1,$(1.1) 
 Payments received / amounts billed(0.6) 
 Costs incurred / revenue recognized1.3
 
 As at September 29,$(0.4) 



4.    Restructuring
During the ThirdFirst Quarter of 2019 and the year ended December 31, 2018,2020 we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. Initiatives duringbusiness.The $2.8 million restructuring charge in 2020 was predominantly ($2.6 million) the Third Quarterresult of 2019 were predominantly in relation tofurther costs associated with the announced closure of theLuxfer Gas Cylinders segment's French site. There is an expectation that further costs will be incurred during 2019.France, including one-time employee benefits, and associated legal and professional fees.
Restructuring-related costs included within Restructuring charges in the Condensed Consolidated Financial Statements by reportable segment were as follows:
   First Quarter 
 In millions 2020 2019 
 Severance and related costs     
 Gas Cylinders segment $2.6
 $8.9
 
 Elektron segment —
 0.1
 
 Other 0.2
 —
 
 Total restructuring charges $2.8
 $9.0
 

   Third Quarter Year-to-date 
 In millions 2019 2018 2019 2018 
 Severance and related costs         
 Gas Cylinders $2.3
 $—
 $18.9
 $0.1
 
 Elektron 0.3
 0.4
 0.4
 2.0
 
   2.6
 0.4
 19.3
 2.1
 
 Asset impairments         
 Gas Cylinders —
 —
 0.6
 —
 
 Elektron —
 0.7
 4.4
 —
 
   —
 0.7
 5.0
 —
 
 Total restructuring charges 2.6
 1.1
 24.3
 2.1
 


Activity related to restructuring, recorded in Other current liabilities in the condensed consolidated balance sheets is summarized as follows:
 In millions2020 
 Balance at January 1,$6.5
 
 Costs incurred2.8
 
 Cash payments and other(2.4) 
 Balance at March 29,$6.9
 

 In millions2019 
 Balance at January 1,$5.2
 
 Costs incurred18.9
 
 Cash payments(21.3) 
 Balance at September 29,$2.8
 


5.    Acquisition and disposal related costs
Acquisition and disposal relatedAcquisition-related costs of $1.7$0.2 million have beenin 2020 represents amounts incurred in the first nine-monthsrelation to M&A exploration activities net of 2019 (2018: nil). This relates to a $0.1 million release of deferred contingent consideration.

Acquisition-related costs of $4.6 million charge in the First Quarter, of 2019 in relationrelated to a reimbursement of costs following the terminated Neo acquisition, partially offset by a $2.9$3.5 million gain from the sale of Magnesium Elektron CZ s.r.o. in the Second Quarter of 2019.

 In millions2019 
 Cash proceeds$5.9
 
 Less:  
      Cash held in business(1.3) 
      Purchase price adjustment(0.2) 
 Net proceeds$4.4
 
 Net assets less cash(3.6) 
 Profit on disposal$0.8
 
 Disposal costs(0.4) 
 Realized translation gain on disposal2.5
 
 Net profit on disposal$2.9
 



6.    Other charges
Other charges of $2.7 milliontermination payment and our professional and legal fees incurred in connection with the Third Quarteraborted acquisition of 2019 is the result of the Company's decision to commence a project to remove low-level naturally occurring radioactive material (NORM) from a redundant building at its Manchester, UK site. The work represents remediation of a legacy environmental issue and is expected to complete in the second quarter of 2020 but with no significant further costs envisaged.
The charge is being disclosed separately on the face of the condensed consolidated income statement as the NORM was created during the Company's historic production process and the remediation is not indicative of the current trading performance of the Company.

Neo Performance Materials.
7.
6.    Supplementary balance sheet information
   March 29, December 31, 
 In millions 2020 2019 
 Accounts and other receivables     
 Trade receivables $62.2
 $52.4
 
 Related parties 2.6
 2.7
 
 Prepayments and accrued income 4.9
 6.7
 
 Derivative financial instruments 0.4
 0.3
 
 Other receivables 3.5
 4.2
 
 Total accounts and other receivables $73.6
 $66.3
 
 Inventories     
 Raw materials and supplies $34.0
 $33.4
 
 Work-in-process 33.7
 32.2
 
 Finished goods 26.2
 28.9
 
 Total inventories $93.9
 $94.5
 
 Other current assets     
 Held-for-sale assets $3.8
 $3.9
 
 Income tax receivable 0.3
 1.1
 
 Total other current assets $4.1
 $5.0
 
 Property, plant and equipment, net     
 Land, buildings and leasehold improvements $68.4
 $68.1
 
 Machinery and equipment 278.2
 287.7
 
 Construction in progress 7.0
 8.9
 
 Total property, plant and equipment 353.6
 364.7
 
 Accumulated depreciation and impairment (259.3) (265.8) 
 Total property, plant and equipment, net $94.3
 $98.9
 
 Other current liabilities     
 Contingent liabilities $7.0
 $6.6
 
 Derivative financial instruments 0.6
 —
 
 Operating lease liability 3.1
 3.3
 
 Other current liabilities 1.5
 2.4
 
 Total other current liabilities $12.2
 $12.3
 
 Other non-current liabilities     
 Contingent liabilities $0.9
 $0.9
 
 Operating lease liability 10.6
 11.7
 
 Other non-current liabilities 0.2
 0.2
 
 Total other non-current liabilities $11.7
 $12.8
 

   September 29, December 31, 
 In millions 2019 2018 
 Accounts and other receivables     
 Trade receivables $56.0
 $49.8
 
 Related parties 3.3
 0.9
 
 Prepayments and accrued income 9.1
 7.7
 
 Derivative financial instruments —
 0.1
 
 Other receivables 4.7
 4.2
 
 Total accounts and other receivables $73.1
 $62.7
 
 Inventories     
 Raw materials and supplies $31.8
 $30.5
 
 Work-in-process 32.9
 33.1
 
 Finished goods 31.5
 30.0
 
 Total inventories $96.2
 $93.6
 
 Other current assets     
 Held-for-sale assets $3.9
 $10.7
 
 Other current assets 2.0
 —
 
 Total other current assets $5.9
 $10.7
 
 Property, plant and equipment, net     
 Land, buildings and leasehold improvements $67.6
 $73.3
 
 Machinery and equipment 272.8
 286.0
 
 Construction in progress 13.9
 10.1
 
 Total property plant and equipment 354.3
 369.4
 
 Accumulated depreciation and impairment (252.8) (262.5) 
 Total property, plant and equipment, net $101.5
 $106.9
 
 Current maturities of long-term debt and short-term borrowings     
 Overdrafts —
 3.5
 
 Total current maturities of long-term debt and short-term borrowings $—
 $3.5
 
 Other current liabilities     
 Contingent liabilities $6.8
 $5.3
 
 Held-for-sale liabilities —
 2.5
 
 Operating lease liability 3.2
 3.5
 
 Other current liabilities 1.8
 4.1
 
 Total other current liabilities $11.8
 $15.4
 
 Other non-current liabilities     
 Contingent liabilities $1.2
 $0.8
 
 Operating lease liability 12.0
 14.9
 
 Other non-current liabilities 0.3
 0.5
 
 Total other non-current liabilities $13.5
 $16.2
 





7.
6.    Supplementary balance sheet information (continued)
Held-for-sale assets and liabilities
 Held-for-sale assetsMarch 29, December 31, 
 In millions2020 2019 
 Property, plant and equipment$3.7
 $3.7
 
 Inventory0.1
 0.2
 
 Held-for-sale assets$3.8
 $3.9
 

 Held-for-sale assetsSeptember 29, December 31, 
 In millions2019 2018 
 Property, plant and equipment$3.7
 $5.5
 
 Inventory0.2
 2.9
 
 Accounts and other receivables—
 2.3
 
 Held-for-sale assets$3.9
 $10.7
 
      
 Held-for-sale liabilities    
 Accounts payable$—
 $2.5
 
 Held-for-sale liabilities$—
 $2.5
 

$3.7 million, (2018, $10.7 million) of theDuring 2018, a building within our Elektron Segment was classified as held-for-sale assets, relatepresented within other current assets. The building was part of a site closure announced in 2017 and were readily available for sale at December 31, 2018. The site at Riverhead, NY is now expected to our Elektron segment, with the remaining $0.2 million (2018, nil) relating to our Gas Cylinders segment. The be sold during 2020 and is included within held-for-sale liabilities in 2018 relate to our Elektron segment.

assets as at March 29, 2020 and December 31, 2019.
8.7.     Goodwill and other identifiable intangible assets
Changes in goodwill during 2019,the First Quarter, ended March 29, 2020, were as follows:
 In millionsGas Cylinders Elektron Total 
 At January 1, 2020$27.0
 $41.8
 $68.8
 
 Exchange difference(1.6) (1.0) (2.6) 
 Balance at March 29, 2020$25.4
 $40.8
 $66.2
 

 In millionsGas Cylinders Elektron Total 
 At January 1, 2019$26.3
 $41.3
 $67.6
 
 Exchange difference(0.8) (0.4) (1.2) 
 Balance at September 29, 2019$25.5
 $40.9
 $66.4
 


Identifiable intangible assets consisted of the following:
  March 29, 2020 December 31, 2019 
 In millionsGross Accumulated amortization Net Gross Accumulated amortization Net 
 Customer relationships$13.4
 $(4.8) $8.6
 $13.4
 $(4.6) $8.8
 
 Technology and trading related7.6
 (3.2) 4.4
 8.1
 (3.3) 4.8
 
  $21.0
 $(8.0) $13.0
 $21.5
 $(7.9) $13.6
 

  September 29, 2019 December 31, 2018 
 In millionsGross Accumulated amortization Net Gross Accumulated amortization Net 
 Customer relationships$13.4
 $(4.5) $8.9
 $13.4
 $(3.8) $9.6
 
 Technology and trading related7.6
 (3.1) 4.5
 7.9
 (2.9) 5.0
 
  $21.0
 $(7.6) $13.4
 $21.3
 $(6.7) $14.6
 


Identifiable intangible asset amortization expense was $0.9$0.2 million and $0.3 million for the first three-quartersFirst Quarter of 20192020 and 2018,2019 respectively.
Intangible asset amortization expense forduring the remainder of 20192020 and over the next five years is expected to be approximately $0.3 million in 2019, $1.1$0.5 million in 2020, $1.1$0.7 million in 2021, $1.1$0.7 million in 2022, $1.1$0.7 million in 2023, and $1.1$0.7 million in 2024.2024 and $0.7 million in 2025.



9.
8.    Debt


Debt outstanding was as follows:
 In millionsMarch 29, 2020 December 31, 2019 
 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 facility34.7
 17.5
 
 Unamortized debt issuance costs(0.9) (1.1) 
 Total debt$108.8
 $91.4
 
 Less current portion$—
 $—
 
 Non-current debt$108.8
 $91.4
 
 In millionsSeptember 29, 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 facility31.7
 —
 
 Other - Bank overdraft—
 3.5
 
 Unamortized debt issuance costs(1.1) (1.4) 
 Total debt$105.6
 $77.1
 
 Less current portion$—
 $(3.5) 
 Non-current debt$105.6
 $73.6
 

The weighted-average interest rate on the revolving credit facility was 2.39%2.32% for the first three-quartersFirst Quarter of 20192020 and 3.58%2.47% for the full-year 2018.2019.
The maturity profile of the Company's debt, excluding unamortized issuance costs and discounts, is as follows:
 In millions2020 2021 2022 2023 2024 2025 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—
 —
 34.7
 —
 —
 —
 —
 34.7
 
 Total debt$—
 $25.0
 $34.7
 $25.0
 $—
 $—
 $25.0
 $109.7
 
 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—
 —
 —
 31.7
 —
 —
 —
 31.7
 
 Total debt$—
 $—
 $25.0
 $31.7
 $25.0
 $—
 $25.0
 $106.7
 

Loan notes due and shelf facility
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 SeptemberMarch 29, 2019.2020.
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.
Senior Facilities Agreement
During the ThirdFirst Quarter of 2019,2020, we drew down $3.5$17.2 million on the Revolving Credit Facility and the balance outstanding at SeptemberMarch 29, 2019,2020, was $31.7$34.7 million, and at December 31, 2018,2019, was nil. We also repaid our bank overdraft of $7.2$17.5 million, resulting in a net repayment of $3.8with $115.3 million on the facility.undrawn at March 29, 2020, $132.5 million at December 31, 2019.
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 SeptemberMarch 29, 2019.2020.



10.
9.    Derivatives and financial instrumentsFinancial Instruments
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 of 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 less than $0.1$0.4 million and $0.1$0.3 million derivative financial instruments disclosed within Accounts and other receivables as of SeptemberMarch 29, 20192020 and December 31, 2018,2019, respectively. There were also $0.2 million and less than $0.1 million and nil derivative financial instruments recorded in Other current liabilities at SeptemberMarch 29, 2019,2020, and December 31, 2018,2019, respectively.
The fair value of forward foreign currency exchange contracts deferred in equity was a loss of $0.8 million and a loss of $0.8 millionNaN at SeptemberMarch 29, 2019,2020, and December 31, 2018,2019, respectively. During the ThirdFirst Quarter of 2019, $0.1 million2020, 0thing was transferred to the Condensed Consolidated 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. operations have little currency exposure, as most purchases, costs and sales are conducted 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 one of its joint venture partners.
At SeptemberMarch 29, 2019,2020, and December 31, 2018,2019, the Company held various forward foreign currency exchange contracts designated as hedges in respect of forward sales for U.S. dollars, euros and Japanese Yen 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, euros U.S. and Canadian dollars by the sale of GBP sterling. The contract totals in GBP sterling, 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 majority of the contracts are held in.

September 29, 2019
Sales hedgesEuros
Contract totals/£m3.6
Maturity dates11/19 to 12/19
Exchange rates€1.1221 to €1.1234

 March 29, 2020
 Sales hedgesU.S. dollars Euros
 Contract totals/£m6.8
 9.9
 Maturity dates04/20
 04/20 to 06/20
 Exchange rates$1.1617 to $1.2281
  €1.1151 to €1.1914
 Purchase hedgesU.S. dollars Euros Canadian dollars 
 Contract totals/£m5.9
 0.8
 5.9
 
 Maturity dates09/19 to 12/19
 12/19
 09/19 to 10/19
 
 Exchange rates$1.2287 to $1.2424
 $1.1205
 $1.6213 to 1.6476
 
 Purchase hedgesU.S. dollars Euros Canadian dollars
 Contract totals/£m1.4
 0.8
 6.8
 Maturity dates04/20 to 06/20
 03/20
 03/20 to 04/20
 Exchange rates$1.2303 to $1.3132
  €1.1663
 $1.7018 to $1.7240
  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
 
  December 31, 2019
 Sales hedgesU.S. dollars Euros Japanese Yen
 Contract totals/£m0.1
 7.6
 0.1
 Maturity dates01/20
 01/20 to 03/20
 01/20
 Exchange rates$1.2914
 €1.1551 to €1.1750
 JPY 142.86
 Purchase hedgesU.S. dollars Euros Canadian dollars
 Contract totals/£m1.3
 0.8
 7.0
 Maturity dates03/20
 03/20
 01/20
 Exchange rates$1.3228
 €1.1663
 $1.7137 to $1.7664
 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 analysis in the table has been given in GBP sterling to avoid any movements as a result of translation.


10.9.    Derivatives and financial instrumentsFinancial 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 offset in the U.S.

Bank loans
Bank and other loans, excluding overdrafts, of $106.7$109.7 million were outstanding at SeptemberMarch 29, 2019,2020, and $75.0$92.5 million were outstanding at December 31, 2018.2019. Bank and other loans are shown net of issue costs of $0.9 million and $1.1 million and $1.4 million at SeptemberMarch 29, 2019,2020, and December 31, 2018,2019, respectively, and are to be amortized to the expected maturity of the facilities. Of the bank and other loans outstanding, $31.7$34.7 million and none$17.5 million is variable interest rate debt and subject to floating interest rate risk, with the remainder being fixed rate debt, at SeptemberMarch 29, 2019,2020, and December 31, 2018,2019, 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
During 2018 theThe fair value of these contracts has been calculated by valuing the contracts against the equivalent forward rates quoted on the LME. There were no LME derivative contracts in 2019.

Deferred contingent consideration
The deferred contingent consideration iswas in relation to the acquisition of Truetech and Innotech (Luxfer Magtech) in 2014 and iswas linked to the future profitability of the entity. All consideration in relation to this acquisition has now been paid as at March 29, 2020.
Fair value hierarchy
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 SeptemberMarch 29, 2019,2020, were analyzed using the hierarchy as follows:
 In millionsTotal Level 1 Level 2 Level 3 
 Derivative financial assets:        
 Foreign currency contract assets$0.4
 $—
 $0.4
 $—
 
 Derivative financial liabilities:        
 Foreign currency contract liabilities0.6
 —
 0.6
 —
 
 Interest bearing loans and borrowings:        
 Loan Notes due 202125.0
 —
 25.0
 —
 
 Loan Notes due 202325.4
 —
 25.4
 —
 
 Loan Notes due 202626.1
 —
 26.1
 —
 
 Revolving Credit Facility34.7
 —
 34.7
 —
 

 In millionsTotal Level 1 Level 2 Level 3 
 Interest bearing loans and borrowings:        
 Loan Notes due 2021(25.0) —
 (25.0) —
 
 Loan Notes due 2023(25.5) —
 (25.5) —
 
 Loan Notes due 2026(26.2) —
 (26.2) —
 
 Revolving Credit Facility(31.7) —
 (31.7) —
 
 Other financial liabilities:        
 Lease liabilities(15.2) —
 (15.2) —
 
 Deferred contingent consideration(0.6) —
 —
 (0.6) 


10.9.    Derivatives and financial instrumentsFinancial Instruments (continued)
The following table presents the changes in Level 3 instruments for the ThirdFirst Quarter ended SeptemberMarch 29, 2019.2020.
 In millions2020 
 Balance at January 1,$0.5
 
 Payments made during year(0.4) 
 Release of deferred consideration (recognized in acquisition-related costs)(0.1) 
 Balance at March 29,$—
 
 Total credit for the period included in profit and loss for assets held at the end at March 29(0.1) 
 Change in unrealized (gains) or losses for the period included in profit and loss for assets held at the end at March 29,$(0.1) 

 In millions2019 
 Balance at January 1,$0.9
 
 Payments made during year(0.5) 
 Unwind of discount on deferred consideration0.2
 
 Balance at September 29,$0.6
 
 Total losses for the period included in profit and loss for assets held at the end at September 29,0.2
 
 Change in unrealized (gains) or losses for the period included in profit and loss for assets held at the end at September 29,$0.2
 


11.10.    Income taxesTaxes
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 for the 39-week periodFirst Quarter ended SeptemberMarch 29, 2019,2020, was 42.7%21.5%, compared to 22.8%negative 131.3% for the 39-week periodFirst Quarter ended September 30, 2018.March 31, 2019. The 2019 rate was adversely affected by the impact of non-deductible expenses related to the aborted acquisition of Neo Performance Materials and restructuring activities, partially offset by the non-taxable income in relation to the sale of our Czech business. We continue to actively pursue initiatives to reduce our effective tax rate.activities. The tax rate 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 changes 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.


12.11.     Pension plansPlans
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 ThirdFirst Quarter ended SeptemberMarch 29, 2019,2020, and September 30, 2018March 31, 2019 were as follows:
  First Quarter 
 In millions2020 2019 
 Net periodic benefit credit    
 Interest cost$2.3
 $2.7
 
 Expected return on plan assets(3.6) (3.8) 
 Amortization of:    
      Net actuarial loss0.5
 0.7
 
      Prior service credit(0.1) (0.1) 
 Net periodic benefit credit$(0.9) $(0.5) 
 In respect of defined contribution plans    
 Total charge for defined contribution plans1.1
 1.2
 
 Total charge for pension plans$0.2
 $0.7
 

  Third Quarter Year-to-date 
 In millions2019 2018 20192018 
 Net periodic benefit credit       
 Interest cost$2.6
 $2.6
 $8.0
$7.9
 
 Expected return on plan assets(3.6) (4.2) (11.1)(12.8) 
 Amortization of:       
      Net actuarial loss0.7
 0.7
 2.1
2.0
 
      Prior service credit(0.1) (0.2) (0.3)(0.4) 
 Net periodic benefit credit$(0.4) $(1.1) $(1.3)$(3.3) 
 In respect of defined contribution plans       
 Total charge for defined contribution plans1.1
 1.3
 3.5
3.9
 
 Total charge for pension plans$0.7
 $0.2
 $2.2
$0.6
 

In accordance with ASC 715, defined benefit credit is split in the condensed consolidated income statement, with $0.2 million (2018: $0.2(2019: $0.1 million) of expenses recognized within Selling, general and administrative expenses during the Third Quarter and a credit of 2019 and $0.4$1.1 million (2018:(2019: $0.6 million) year-to-date. A credit of $0.6 million (2018: $1.3 million) has also been recognized below Operating income / (loss) in the condensed consolidated income statement during the Third Quarter of 2019, $1.7 million (2018: $3.9 million) year-to-date.statement.

13.
12.    Share plansPlans


Total share-based compensation expense for the Third Quarterquarters ended March 29, 2020, and three-quarters ended September 29,March 31, 2019, and September 30, 2018, was as follows:
  First Quarter 
 In millions2020 2019  
 Total share-based compensation charges$0.5
 $2.6
  
  Third Quarter Year-to-date 
 In millions2019 2018 20192018 
 Total share-based compensation charges$0.6
 $1.2
 $4.0
$3.1
 

In March 2019,2020, we issued our annual share-based compensation grants under the Luxfer Holdings PLC Long-Term Umbrella Incentive Plan. The total number of awards issued was approximately 200,000130,000 and the weighted-averageweighted average fair value of options granted in 20192020 was estimated to be $17.70 per share.
In May 2019, 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 approximately 4,000 and the weighted-average fair value of options granted was estimated to be $15.00$11.30 per share.
The following table illustrates the assumptions used in deriving the fair value of share options granted during 2019the First Quarter of 2020 and the year-ended December 31, 2018,:2019:
  2020 2019 
 Dividend yield (%)2.10 2.10 
 Expected volatility range (%)39.00 35.06 - 44.20 
 Risk-free interest rate (%)1.60 0.74 - 2.52 
 Expected life of share options range (years)4.00 0.50 - 4.00 
 Weighted average exercise price ($)$1.00 $1.00 
 Model usedBlack-Scholes Black-Scholes & Monte-Carlo 
  2019 2018 
 Dividend yield (%)4.00 4.00 
 Expected volatility range (%)22.65 22.65 - 35.77 
 Risk-free interest rate (%)0.12 0.12 - 2.57 
 Expected life of share options range (years)1.00 - 4.00 0.50 - 6.00 
 Weighted average exercise price ($)$0.89 $0.65 
 Model usedBlack-Scholes & Monte-Carlo Black-Scholes & Monte-Carlo 

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.


14.13.    Shareholders' equityEquity
(a) Dividends paid and proposed
  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018 
 Dividends declared and paid during the year:        
 Interim dividend paid February 7, 2018 ($0.125 per ordinary share)$—
 $—
 $—
 $3.4
 
 Interim dividend paid May 2, 2018 ($0.125 per ordinary share)—
 —
 —
 3.3
 
 Interim dividend paid August 1, 2018 ($0.125 per ordinary share)—
 3.3
 —
 3.3
 
 Interim dividend paid February 6, 2019 ($0.125 per ordinary share)—
 —
 3.4
 —
 
 Interim dividend paid May 1, 2019 ($0.125 per ordinary share)—
 —
 3.4
 —
 
 Interim dividend paid August 7, 2019 ($0.125 per ordinary share)3.4
 —
 3.4
   
  $3.4
 $3.3
 $10.2
 $10.0
 
 In millions2020 2019 
 Dividends declared and paid during the year:    
 Interim dividend paid February 6, 2019 ($0.125 per ordinary share)$—
 $3.4
 
 Interim dividend paid February 5, 2020 ($0.125 per ordinary share)3.4
 —
 
  $3.4
 $3.4
 


 In millions2020 2019 
 Dividends declared and paid after the quarter end (not recognized as a liability at the quarter end):    
 Interim dividend declared April 1, and paid May 1, 2019: ($0.125 per ordinary share)$—
 $3.4
 
 Interim dividend declared April 6, and to be paid May 6, 2020: ($0.125 per ordinary share)3.4
 —
 
  $3.4
 $3.4
 

 In millions2019 2018 
 Dividends declared after the period, (not recognized as a liability as at the period end):    
 Interim dividend declared October 8, and paid November 7, 2018: ($0.125 per ordinary share)$—
 $3.3
 
 Interim dividend declared October 3, and to be paid November 6, 2019: ($0.125 per ordinary share)3.4
 —
 
  $3.4
 $3.3
 

15.
14.    Segmental informationInformation
We classify our operations into two2 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 six5 identified business units, which aggregate into the two2 reportable segments. Luxfer Gas Cylinders and Luxfer Superform aggregate into the Gas Cylinders segment, and Luxfer MEL Technologies, Luxfer Magtech and Luxfer Graphic Arts and Luxfer Czech Republic(1) aggregate into the Elektron segment. In the first two quarters of 2019, prior to its divestiture, Luxfer Czech Republic also aggregated into the Elektron Segment. 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, titanium and carbon composites, 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(2)(1) and adjusted EBITDA, which we defined as segment income and isare based on operating income adjusted for share-basedshare based compensation expense; qualifyingcharges; loss on disposal of property, plant and equipment, restructuring charges; impairment charges; acquisition and disposal related gains and costs; other charges; loss on disposal of property, plant and equipment; depreciation and amortization; and unwind of discount on deferred consideration.

15.    Segmental information (continued)
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 ThirdFirst Quarter ended March 29, 2020, and year-to-date ended September 29,March 31, 2019, and September 30, 2018, is included in the following summary:
  Net sales  Adjusted EBITDA 
  Third Quarter Year-to-date  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018  2019 2018 2019 2018 
 Gas Cylinders segment$54.2
 $62.2
 $170.7
 $181.9
  $6.3
 $6.3
 $17.9
 $17.3
 
 Elektron segment52.9
 66.9
 173.3
 195.1
  10.4
 16.7
 37.5
 46.3
 
 Consolidated$107.1
 $129.1
 $344.0
 $377.0
  $16.7
 $23.0
 $55.4
 $63.6
 
  Net sales  Adjusted EBITDA 
 In millions2020 2019  2020 2019 
 Gas Cylinders segment$52.6
 $58.4
  $3.5
 $4.5
 
 Elektron segment51.2
 62.0
  11.6
 14.0
 
 Consolidated$103.8
 $120.4
  $15.1
 $18.5
 
  Depreciation and amortization  Restructuring charges 
  Third Quarter Year-to-date  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018  2019 2018 2019 2018 
 Gas Cylinders segment$1.3
 $1.9
 $4.1
 $5.8
  $2.3
 $—
 $19.5
 $0.1
 
 Elektron segment2.3
 2.8
 7.2
 8.7
  0.3
 1.1
 4.8
 2.0
 
 Consolidated$3.6
 $4.7
 $11.3
 $14.5
  $2.6
 $1.1
 $24.3
 $2.1
 
  Total assets  Capital expenditures 
  September 29, December 31,  Third Quarter Year-to-date 
 In millions2019 2018  2019 2018 2019 2018 
 Gas Cylinders segment$161.4
 $156.3
  $0.5
 $0.8
 $2.9
 $1.5
 
 Elektron segment203.2
 218.2
  0.3
 3.3
 8.2
 6.4
 
 Other37.8
 34.3
  —
 0.1
 —
 0.1
 
  $402.4
 $408.8
  $0.8
 $4.2
 $11.1
 $8.0
 
   Property, plant and equipment, net 
   September 29, December 31, 
 In millions 2019 2018 
 United States $58.2
 $66.1
 
 United Kingdom 38.3
 36.0
 
 Rest of Europe 1.0
 1.1
 
 Asia Pacific 0.3
 0.3
 
 
Other (3)
 3.7
 3.4
 
   $101.5
 $106.9
 
  Depreciation and amortization  Restructuring charges 
 In millions2020 2019  2020 2019 
 Gas Cylinders segment$1.2
 $1.4
  $2.6
 $8.9
 
 Elektron segment2.4
 2.3
  —
 0.1
 
 Other—
 —
  0.2
 —
 
 Consolidated$3.6
 $3.7
  $2.8
 $9.0
 

(1) The Luxfer Czech Republic business unit was sold at the end of the Second Quarter of 2019. Its results of operations are included within the 2018 figures and 2019 year-to-date figures.
(2) Adjusted EBITA is adjusted EBITDA less depreciation and loss on disposal of property, plant and equipment.depreciation.
(3) Other includes Canada, South America, Latin America and Africa.

14.    Segmental Information (continued)


  Total assets  Capital expenditures 
 In millions2020 2019  2020 2019 
 Gas Cylinders segment$156.6
 $156.0
  $0.5
 $1.1
 
 Elektron segment201.7
 200.8
  1.1
 2.6
 
 Other34.2
 33.5
  —
 —
 
  $392.5
 $390.3
  $1.6
 $3.7
 
15.    Segmental information (continued)
   Property, plant and equipment, net 
 In millions 2020 2019 
 United States $56.0
 $57.3
 
 United Kingdom 33.7
 36.7
 
 Rest of Europe 1.0
 1.0
 
 Asia Pacific 0.3
 0.3
 
 
Other (2)
 3.3
 3.6
 
   $94.3
 $98.9
 

The following table presents a reconciliation of Adjusted EBITDA to net income:
  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018 
 Adjusted EBITDA$16.7
 $23.0
 $55.4
 $63.6
 
 Other share-based compensation charges(0.6) (1.2) (4.0) (3.1) 
 Loss on disposal of property, plant and equipment—
 (0.2) —
 (0.2) 
 Depreciation and amortization(3.6) (4.7) (11.3) (14.5) 
 Unwind discount on deferred consideration(0.1) (0.2) (0.2) (0.5) 
 Restructuring charges(2.6) (1.1) (24.3) (2.1) 
 Fair value adjustment to held-for-sale assets—
 —
 0.2
 —
 
 Acquisition and disposal related gains / (costs)—
 —
 (1.7) —
 
 
Other charges (4)
(2.7) —
 (2.7) —
 
 Defined benefits pension mark-to-market gain0.6
 1.3
 1.7
 3.9
 
 Interest expense, net(1.3) (1.2) (3.5) (3.7) 
 Provision for income taxes(0.6) (3.5) (4.1) (9.9) 
 Net income$5.8
 $12.2
 $5.5
 $33.5
 
 In millions2020 2019  
 Adjusted EBITDA$15.1
 $18.5
  
 Other share-based compensation charges(0.5) (2.6)  
 Depreciation and amortization(3.6) (3.7)  
 Restructuring charges(2.8) (9.0)  
 Impairment charges—
 0.2
  
 Acquisition costs(0.2) (4.6)  
 Defined benefits pension pension credit1.1
 0.6
  
 Interest expense, net(1.2) (1.1)  
 Provision for income taxes(1.7) (2.1)  
 Net income$6.2
 $(3.8)  


14.    Segmental Information (continued)
The following tables present certain geographic information by geographic region for the ThirdFirst Quarter ended March 29, 2020, and Year-to-date, ended June 30, 2019 and July 1, 2018, respectively:March 31, 2019:
  
Net Sales(5)
 
  Third Quarter Year-to-date 
  20192018 20192018 
  $MPercent$MPercent $MPercent$MPercent 
 United States$58.0
54.1%$67.2
52.1% $182.4
52.9%$195.4
51.8% 
 U.K.7.9
7.4%13.1
10.1% 28.5
8.3%36.5
9.7% 
 Germany4.2
3.9%10.6
8.2% 18.2
5.3%31.6
8.4% 
 Italy5.1
4.8%6.9
5.3% 16.8
4.9%17.0
4.5% 
 France3.5
3.3%3.9
3.0% 12.9
3.8%12.9
3.4% 
 Top five countries$78.7
73.6%$101.7
78.8% $258.8
75.2%$293.4
77.8% 
 Rest of Europe8.6
8.0%7.7
6.0% 30.5
8.9%25.1
6.7% 
 Asia Pacific13.0
12.1%14.3
11.1% 37.3
10.8%40.7
10.8% 
 
Other (6)
6.8
6.3%5.4
4.2% 17.4
5.1%17.8
4.7% 
  $107.1

$129.1

 $344.0

$377.0

 
  
Net Sales(1)
 
  2020 2019 
  $MPercent $MPercent 
 United States$59.7
57.5% $61.4
51.0% 
 U.K.7.4
7.1% 11.5
9.6% 
 Germany3.6
3.5% 8.2
6.8% 
 Italy4.4
4.2% 6.5
5.4% 
 France4.6
4.4% 5.2
4.3% 
 Top five countries$79.7
76.8% $92.8
77.1% 
 Rest of Europe7.1
6.8% 11.8
9.8% 
 Asia Pacific11.5
11.1% 11.6
9.6% 
 
Other (2)
5.5
5.3% 4.2
3.5% 
  $103.8
  $120.4
  


(4) Other charges relates to an expense incurred in relation to the Company's decision to commence a project to remove low-level naturally occurring radioactive material.
(5)(1) Net sales are based on the geographic destination of sale.
(6)(2) Other includes Canada, South America, Latin America and Africa.


16.     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:
  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018 
 Operating lease cost$1.0
 $1.0
 $3.2
 $2.9
 
None of our leases were classified as finance leases in 2019 or 2018.

16.     Leases (continued)
Supplemental cash flow information related to leases was as follows:
  Third Quarter Year-to-date 
 In millions2019 2018 20192018 
 Operating cash flows from operating leases$1.0
 $1.0
 $3.2
$2.9
 
Supplemental balance sheet information related to leases was as follows:
  September 29, December 31, 
 In millions2019 2018 
 Operating leases    
 Operating lease right-of-use asset$15.1
 $18.4
 
      
 Other current liabilities3.2
 3.5
 
 Other non-current liabilities12.0
 14.9
 
  $15.2
 $18.4
 
      
 Weighted Average Remaining Lease Term (Years)3.6
 3.7
 
 Weighted Average Discount Rate4.46% 4.46% 
Future maturities of lease liabilities as of September 29, 2019 were as follows:
 In millions  2019 
 Remainder of 2019  $0.9
 
 2020  4.1
 
 2021  3.3
 
 2022  2.1
 
 2023  1.4
 
 2024  1.1
 
 Thereafter  9.2
 
 Total lease payments  $22.1
 
 Less amount of lease payments representing interest  (6.9) 
 Total  $15.2
 


17.15.     Commitments and contingenciesContingencies
Committed and uncommited banking facilities
At SeptemberMarch 29, 2019,2020, and December 31, 2018,2019, the Company had committed banking facilities of $150.0 million. The facilities were for providing loans, and overdrafts,with a with a separate facility for letters of credit which at SeptemberMarch 29, 20192020, was £1.0 million ($1.2 million) and December 31,2018,31, 2019, was £7.0£1.0 million ($8.91.3 million). Of the committed facilities, no$34.7 million was drawn for loans were drawn and no0 letters of credit were utilized at SeptemberMarch 29, 2019, ($3.52020, $17.5 million, and nilNaN at December 31, 2018).2019. The Company also has 2 separate bonding facilities for bank guarantees, 1 denominated in GBP sterling of £4.5 million (2020: $5.5 million, 2019: $5.9 million), of which £1.6 million (2020: $1.9 million, 2019: $2.3 million) was utilized at March 29, 2020, and December 31, 2019, respectively and 1 denominated in USD of $0.4 million which was fully utilized at March 29, 2020 and December 31, 2019 respectively. The Company also has a $4.0 million separate bondingoverdraft facility for bank guarantees denominated in GBP sterling of £3.0 million ($3.8 million), of which GBP sterling of £1.0 million ($1.4 million)0ne was utilizeddrawn at SeptemberMarch 29, 2019,2020, NaN and NaN at December 31, 2018, respectively.2019.
Contingencies
During February 2014, a cylinder was sold to a long-term customer and ruptured at one of their gas facilities. As a result of this rupture, three3 people were noted to have minor injuries such as loss of hearing. There was no major damage to assets of the customer. A claim was launched by the three people who were injured in the incident and a prosecutor has been appointed.incident. We hadhave reviewed our quality control checks from around the time which the cylinder was produced and no instances of failures werehave been noted. It has also been noted by the investigator that the customer has poor quality and safety checks. As a result, we do not believe that we are liable for the incident, and therefore, do not currently expect this case to have a material impact on the Company's financial position or results of operations.
In November 2018, a garbage truck, outfitted with a Compressed Natural Gas (“CNG”) fuel system containing
16. Subsequent Events
See Impact of COVID-19 on the Company’s cylinders and valves, was involved in a fire and explosion at a maintenance garage. As a result of this fire and explosion, an employee of the garage suffered personal injury. Additionally, the force of the explosion caused property damage to the garage and garbage truck. As at September 29, 2019 it is too early to determine the exact cause of the fire and explosion and how liability would be apportioned if a lawsuit was initiated. The Company is insured for claims made for injury or damage caused by products sold with a $1.0 million deductible. The maximum potential exposure and impact to our results of operations is $1.0 million.Financial Statements included within Note 1.

18.     Subsequent events
None.

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;
risks related to the impact of the global COVID-19 pandemic, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, supply chain disruptions and other impacts to the business, and the Company’s ability to execute business continuity plans, as a result of the COVID-19 pandemic;
worldwide economic and business conditions and conditions in the industries in which we operate;
fluctuations in the cost of raw materials and utilities;
currency fluctuations and other financial risks;
our ability to remediate the material weakness in our internal controls over financial reporting;
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;
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;
regulatory, environmental, legislative and judicial developments; and
our intention to pay dividends.
Please read the sections "Business," "Risk factors," included within the 20182019 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.


About Luxfer
Luxfer is a global manufacturer of highly-engineered industrial materials, which focuses on value creation by using its broad array of technical knowhow and proprietary technologies. Luxfer's high-performance products are used in defense and emergency response, healthcare, transportation, and general industrial settings. For more information, visit www.luxfer.com.
Key trends and uncertainties regarding our existing business
Impact of COVID-19 on operations
Luxfer’s top priority during this global pandemic is the health and well-being of our employees, customers, shareholders, and the communities in which we operate. The followingCompany continues to monitor the COVID-19 situation closely, while simultaneously executing business continuity plans. These business continuity plans include, but are not limited to, (i) retooling operations to maintain social distance and maximize employee safety; (ii) increasing resources and efforts to satisfy demand from the most impactful parts of our business; (iii) expanding flexible work arrangements and policies, where practical, to maximize employee safety; (iv) increased monitoring of short-term cash flow, including measures to reduce costs and generate cash; and (v) providing regular updates to our shareholders, employees, customers, and suppliers in a transparent and timely manner.

At this time, Luxfer is continuing to operate at the majority of its facilities, as permitted by local authorities. However, due to weaker demand resulting from uncertain economic conditions, potential supply constraints, and the continued spread of COVID-19, Luxfer has temporarily suspended operations at certain facilities and reduced capacity at others. As the situation evolves and if warranted, the Company may suspend or reduce operations at additional facilities.

While the impact of COVID-19 on our first quarter results was relatively limited, we do expect a significant near-term adverse impact on our business. However, the Company has a strong balance sheet, a large existing credit facility and has identified no issues in relation to its financial covenants nor availability of funding for its operations. We continue to lean more about the impact of the COVID-19 pandemic and these assumptions and judgments may change over time

Operating objectives and trends and uncertainties affected our financial performance in the first nine-months of 2019, and will likely impact our results in the future:
•
Third-Quarter results were behind expectations as sales fell 17%, led by an 84% decline in sales of our Solumag® product line used in fracking operations and a general slowdown observed in our industrial end-market. Temporary inefficiencies in our Madison, Illinois Graphic Arts plant, due to disruption following storm-related flooding also negatively impacted sales.
Given the industrial sales softness, we are accelerating our cost savings initiatives and increasing our growth focus on markets such as Defense.
We also continued along our transformation journey making solid progress with business restructuring initiatives aimed at further reducing our fixed cost structure while seeding revenue growth.

In 2019,2020, our operating objectives and trends we expect to impact our business include the following:
We have converted from foreign private issuer statusProductivity acceleration and growth recovery as we progress towards a lean manufacturing process and more focused and faster innovation.
Leveraging delivered plant consolidation projects in our Gas Cylinders and Graphic Arts businesses 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 tofurther reduce fixed costs.costs and safeguard competitiveness.
FocusingContinued focus on developing global talent and implementing a high-performance culture.
Productivity accelerationImproved operating cash generation with lower restructuring activity and growth recovery as we implement a lean manufacturing processstronger working capital performance.
However, any future developments are going to be impacted by the extent that the COVID-19 virus affects our business, including our supply of raw materials and faster product innovation.demand for our products.



CONSOLIDATED RESULTS OF OPERATIONS
The consolidated results of operations for the ThirdFirst Quarter of 20192020 and 20182019 of Luxfer were as follows:
   Third Quarter   
 In millions 2019 2018 2019 v 2018 
 Net sales $107.1
 $129.1
 (17.0)% 
 Cost of goods sold (81.9) (95.1) (13.9)% 
 Gross profit 25.2
 34.0
 (25.9)% 
      % of net sales 23.5% 26.3 % (2.8) 
 Selling, general and administrative expenses (11.8) (15.2) (22.4)% 
      % of net sales 11.0% 11.8 % (0.8) 
 Research and development (1.5) (2.0) (25.0)% 
      % of net sales 1.4% 1.5 % (0.1) 
 Restructuring charges (2.6) (1.1) 136.4 % 
      % of net sales 2.4% 0.9 % 1.5
 
 Other expenses (2.7) —
 n/a
 
      % of net sales 2.5% — % 2.5
 
 Operating income 6.6
 15.7
 (58.0)% 
      % of net sales 6.2% 12.2 % (6) 
 Net interest expense (1.3) (1.2) 8.3 % 
      % of net sales 1.2% 0.9 % 0.3
 
 Defined benefit pension credit 0.6
 1.3
 (53.8)% 
      % of net sales 0.6% 1.0 % (0.4) 
 Income before income taxes and equity in net income of affiliates 5.9
 15.8
 (62.7)% 
      % of net sales 5.5% 12.2 % (6.7) 
 Provision for income taxes (0.6) (3.5) (82.9)% 
      Effective tax rate 9.4% 22.3 % (12.9) 
 Income before equity in net income of affiliates 5.3
 12.3
 (56.9)% 
      % of net sales 4.9% 9.5 % (4.6) 
 Equity in income / (loss) of unconsolidated affiliates (net of tax) 0.5
 (0.1) n/a
 
      % of net sales 0.5% (0.1)% 0.6
 
 Net income $5.8
 $12.2
 (52.5)% 
      % of net sales 5.4% 9.5 % (4.1) 
   First Quarter % / point change 
 In millions 2020 2019 2020 v 2019 
 Net sales $103.8
 $120.4
 (13.8)% 
 Cost of goods sold (79.3) (90.3) (12.2)% 
 Gross profit 24.5
 30.1
 (18.6)% 
      % of net sales 23.6% 25.0 % (1.4) 
 Selling, general and administrative expenses (12.8) (16.4) (22.0)% 
      % of net sales 12.3% 13.6 % (1.3) 
 Research and development (0.7) (1.4) (50.0)% 
      % of net sales 0.7% 1.2 % (0.5) 
 Restructuring charges (2.8) (9.0) (68.9)% 
      % of net sales 2.7% 7.5 % (4.8) 
 Impairment charges —
 0.2
 n/a
 
      % of net sales —% (0.2)% 0.2
 
 Acquisition related costs (0.2) (4.6) (95.7)% 
      % of net sales 0.2% (3.8)% 4.0
 
 Operating income / (loss) 8.0
 (1.1) n/a
 
      % of net sales 7.7% (0.9)% 8.6
 
 Net interest expense (1.2) (1.1) 9.1 % 
      % of net sales 1.2% 0.9 % 0.3
 
 Defined benefit pension credit 1.1
 0.6
 83.3 % 
      % of net sales 1.1% 0.5 % 0.6
 
 Income / (loss) before income taxes and equity in net income of affiliates 7.9
 (1.6) n/a
 
      % of net sales 7.6% (1.3)% 8.9
 
 Provision for income taxes (1.7) (2.1) (19.0)% 
      Effective tax rate 21.5% (131.3)% 152.8
 
 Income / (loss) before equity in net income of affiliates 6.2
 (3.7) n/a
 
      % of net sales 6.0% (3.1)% 9.1
 
 Equity in income / (loss) of unconsolidated affiliates (net of tax) —
 (0.1) n/a
 
      % of net sales —% (0.1)% 0.1
 
 Net income / (loss) $6.2
 $(3.8) n/a
 
      % of net sales 6.0% (3.2)% 9.2
 




The consolidated results of operations for the three-quarters ended September 29, 2019 and September 30, 2018 of Luxfer were as follows:

   Year-to-date % / point change 
 In millions 2019 2018 2019 v 2018 
 Net sales $344.0

$377.0
 (8.8)% 
 Cost of goods sold (257.7)
(279.1) (7.7)% 
 Gross profit 86.3
 97.9
 (11.8)% 
      % of net sales 25.1 % 26.0% (0.9) 
 Selling, general and administrative expenses (42.6)
(47.2) (9.7)% 
      % of net sales 12.4 % 12.5% (0.1) 
 Research and development (4.5)
(5.5) (18.2)% 
      % of net sales 1.3 % 1.5% (0.2) 
 Restructuring charges (24.3)
(2.1) n/a
 
      % of net sales 7.1 % 0.6% 6.5
 
 Impairment credit 0.2

—
 n/a
 
      % of net sales (0.1)% —% (0.1) 
 Acquisition and disposal related costs (1.7)
—
 n/a
 
      % of net sales 0.5 % —% 0.5
 
 Other expense (2.7) —
 n/a
 
      % of net sales 0.8 % —% 0.8
 
 Operating income 10.7
 43.1
 (75.2)% 
      % of net sales 3.1 % 11.4% (8.3) 
 Net interest expense (3.5)
(3.7) (5.4)% 
      % of net sales 1.0 % 1.0% —
 
 Defined benefit pension credit 1.7

3.9
 (56.4)% 
      % of net sales 0.5 % 1.0% (0.5) 
 Income before income taxes and equity in net income of affiliates 8.9
 43.3
 (79.4)% 
      % of net sales 2.6 % 11.5% (8.9) 
 Provision for income taxes (4.1)
(9.9) (58.6)% 
      Effective tax rate 42.7 % 22.8% 19.9
 
 Income before equity in net income of affiliates 4.8
 33.4
 (85.6)% 
      % of net sales 1.4 % 8.9% (7.5) 
 Equity in income of unconsolidated affiliates (net of tax) 0.7

0.1
 600.0 % 
      % of net sales 0.2 % —% 0.2
 
 Net income $5.5
 $33.5
 (83.6)% 
      % of net sales 1.6 % 8.9% (7.3) 




Net sales
The 17.0% and 8.8%13.8% decrease in consolidated net sales in the third quarter and first nine-months, respectively, of2020 from 2019 from 2018 werewas primarily the result of:
•
Lower sales of our proprietary SoluMag® alloy as a result of continuing destocking amid budgetary pressures affecting North American shale producers;
LowerDecreased sales in Luxfer Graphic Arts as our North American facility continues its recovery following plant consolidation challengesof zirconium-based industrial and disruption as a result of storm-related flooding;automotive catalysis materials;
$4.4 million revenue decline as a result ofadverse impact following the divestiture of Elektron's magnesiumour Czech recycling business at the end of Q2;in Q2, 2019;
Reduction inLower Superform tooling and formed part sales, in the Gas Cylinders segment affecting Superform forpredominantly to European luxury automobilesautomotive customers; and
Decreased sales of lower margin aluminum gas cylinders;cylinders.
Adverse foreign currency effectsThese decreases were partially offset by continued growth in sales of $2.8 million in the quarter and $9.9 million for the first nine months.alternative fuel (AF) cylinders.


Gross profit
The 2.8 and 0.91.4 percentage point decrease in gross profit as a percentage of sales in the third quarter and first nine-months of2020 from 2019 from 2018 was primarily the result of adverse product sales mix, and unfavorable foreign exchange movements. especially the impact of lower sales of zirconium catalysis products in the current quarter.
These adverse factors were partially offset by our continued effortthe impact of productivity improvements in Luxfer Gas Cylinders Europe, following closure of the French operation in 2019 and transfer of production to reduce production-based costs.the U.K.


Selling, general and administrative expenses ("SG&A")
The 0.81.3 percentage point decrease in SG&A costs as a percentage of sales in the third quarter of2020 from 2019 from 2018 was primarily the result of lower share-based compensation charges as well as the impact of further cost saving activities.savings linked to our cost reduction program.
SG&A
Research and development costs
Research and development cost as a percentage of sales was relatively unchangedreduced by 0.5 percentage points in the first nine-months of 2019 from 2018.2020 relative to 2019.


Restructuring charges
The $2.6$2.8 million restructuring charge in 2020 was predominantly ($2.6 million) the third quarter of 2019 was driven by $2.1 millionresult of further costs associated with the announced closure of Luxfer Gas Cylinders France, including one-time employee benefits, ongoing site costs and associated legal and professional fees. In addition, restructuring charges include $0.5
The $9.0 million related to one-time employee benefits across sites in North America and the U.K in the Elektron and Gas Cylinders segment.
The$24.3 million restructuring charge in 2019 was mainly ($8.9 million) the first nine-monthsresult of 2019 includes $18.7 million in relation tocosts associated with the announced closure of Luxfer Gas Cylinders France; $4.6 million related to asset write-downs andFrance, including one-time employee benefits, following the decision to scale down production at one of our Luxfer Magtech sites;asset write-offs, and $1.0 million of other simplification costs.associated legal and professional fees.
The $1.1 million and $2.1 million restructuring charge in the third quarter and first nine-months of 2018, respectively, was predominantly the result of of termination costs and a property impairment charge related to the rationalization of Elektron's Graphic Arts operations and severance costs in the Gas Cylinders segment.


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


Acquisition and disposal related gains / (costs)Acquisition-related costs
Acquisition and disposal relatedAcquisition-related costs of $0.2 million in 2020 represents amounts incurred in relation to M&A exploration activities net of a $0.1 million release of deferred contingent consideration.

Acquisition-related costs of $4.6 million in 2019 of $1.7 million relate to a $3.5 million reimbursementtermination payment and $1.1 million ofour professional and legal fees incurred in connection with the terminatedaborted acquisition of Neo Performance Materials, occurring in the first quarter; offset in the second quarter by a $2.9 million gain on disposal of Elektron's magnesium recycling business in the Czech Republic.Materials.


Other charges
The $2.7 million other charges incurred in the third quarter of 2019, is the result of the Company's decision to commence a project to remove low-level naturally occurring radioactive material (NORM) from a redundant building at its Manchester, UK site. The work represents remediation of a legacy environmental issue and is expected to complete in the second quarter of 2020 but with no significant further costs envisaged.


Net interest expense
The 5.4% reduction9.1% increase in net interest expense in the first nine-months of2020 from 2019 from 2018 was due to the reductionincrease in the average debt balance in 2019 resulting in lower interest costs, followingas a result of increased draw down on the repayment of $15.0 million private placement debt at maturity, in June 2018. Net interest expense in the third quarter of 2019 over 2018 remained flat at $1.3 million.revolving credit facility.



Defined benefit pension credit
The $0.7$0.5 million and $2.2 million decreaseincrease in defined benefit pension credit to $1.1 million in the third quarter and first nine-months respectively2020 from $0.6 million in 2019 is primarily due to the combined effect on the U.K. plan of a fall in the discount rate and lower inflation, partially offset by lower projected asset returns in 2019.returns.


Provision for income taxes
The movement in the statutory effective tax rate from 22.8%negative 131.3% in 20182019, to 42.7%21.5% in 20192020, was primarily due to non-deductible expenses related to the aborted acquisition and restructuring activities.activities in the prior year. When stripping out the effect of these expenses, our adjusted effective tax rate has fallen from 22.8%remained flat at 20.0% in 2018 to 19.0%2020 (20.0% in 2019.2019).





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.
  Third Quarter
Year-to-date 
 In millions except per share data2019
2018
2019
2018 
 Net income / (loss)$5.8
 $12.2
 $5.5
 $33.5
 
 Accounting charges relating to acquisitions and disposals of businesses:
 
 
 
 
      Unwind of discount on deferred consideration0.1
 0.2
 0.2
 0.5
 
      Amortization on acquired intangibles0.3
 0.3
 0.9
 0.9
 
      Acquisitions and disposals—
 —
 1.7
 —
 
 Defined benefit pension credit(0.6) (1.3) (1.7) (3.9) 
 Restructuring charges2.6
 1.1
 24.3
 2.1
 
 Impairment charges—
 —
 (0.2) —
 
 Other charges2.7
 —
 2.7
 —
 
 Share-based compensation charges0.6
 1.2
 4.0
 3.1
 
 Income tax on adjusted items(1.5) (0.3) (3.8) (0.6) 
 Adjusted net income$10.0
 $13.4
 $33.6
 $35.6
 
          
 Adjusted earnings per ordinary share        
 Diluted earnings per ordinary share$0.21
 $0.44
 $0.20
 $1.22
 
 Impact of adjusted items0.15
 0.04
 1.01
 0.08
 
 Adjusted diluted earnings per ordinary share$0.36
 $0.48
 $1.21
 $1.29
 
  First Quarter 
 In millions except per share data2020 2019 
 Net income / (loss)$6.2
 $(3.8) 
 Accounting charges relating to acquisitions and disposals of businesses:    
      Amortization on acquired intangibles0.2
 0.3
 
      Acquisition costs0.2
 4.6
 
 Defined benefit pension credit(1.1) (0.6) 
 Restructuring charges2.8
 9.0
 
 Impairment charges—
 (0.2) 
 Share-based compensation charges0.5
 2.6
 
 Income tax on adjusted items(0.4) (0.7) 
 Adjusted net income$8.4
 $11.2
 
      
 Adjusted earnings per ordinary share    
 Diluted earnings / (loss) per ordinary share$0.22
 $(0.14) 
 Impact of adjusted items0.08
 0.54
 
 
Adjusted diluted earnings per ordinary share(1)
$0.30
 $0.40
 
(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.
  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018 
 Adjusted net income$10.0
 $13.4
 $33.6
 $35.6
 
 Add back:
 
 
 
 
      Income tax on adjusted items1.5
 0.3
 3.8
 0.6
 
      Provision for income taxes0.6
 3.5
 4.1
 9.9
 
      Net finance costs1.3
 1.2
 3.5
 3.7
 
 Adjusted EBITA$13.4
 $18.4
 $45.0
 $49.8
 
      Loss on disposal of PPE—
 0.2
 —
 0.2
 
      Depreciation3.3
 4.4
 10.4
 13.6
 
 Adjusted EBITDA$16.7
 $23.0
 $55.4
 $63.6
 
  First Quarter 
 In millions2020 2019 
 Adjusted net income$8.4
 $11.2
 
 Add back:    
      Income tax on adjusted items0.4
 0.7
 
      Provision for income taxes1.7
 2.1
 
      Net finance costs1.2
 1.1
 
 Adjusted EBITA$11.7
 $15.1
 
      Depreciation3.4
 3.4
 
 Adjusted EBITDA$15.1
 $18.5
 



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.
  Third Quarter Year-to-date 
 In millions2019 2018 2019 2018 
 Adjusted net income$10.0
 $13.4
 $33.6

$35.6
 
 Add back:  
     
      Income tax on adjusted items1.5
 0.3
 3.8
 0.6
 
      Provision for income taxes0.6
 3.5
 4.1
 9.9
 
 Adjusted income before income taxes$12.1
 $17.2
 $41.5
 $46.1
 
 Adjusted provision for income taxes2.1
 3.8
 7.9
 10.5
 
 Adjusted effective tax rate17.4% 22.1% 19.0% 22.8% 
  First Quarter 
 In millions2020 2019 
 Adjusted net income$8.4
 $11.2
 
 Add back:    
      Income tax on adjusted items0.4
 0.7
 
      Provision for income taxes1.7
 2.1
 
 Adjusted income before income taxes$10.5
 $14.0
 
 Adjusted provision for income taxes2.1
 2.8
 
 Adjusted effective tax rate20.0% 20.0% 
The following table presents a reconciliation of net debt which management believes is a liquidity measure used by the investment community and that such presentation will enhance an investor's understanding of the Company's financial position.
   September 29,
 December 31,
 
 In millions 2019
 2018
 
 Current maturities of long-term debt and short-term borrowings $—
 $3.5
 
 Long-term debt 105.6
 73.6
 
 Total debt 105.6
 77.1
 
 Add back:     
 Cash and cash equivalents (11.9) (13.8) 
 Net debt $93.7
 $63.3
 

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 qualifyingshare based compensation charges; loss on disposal of property, plant and equipment, restructuring charges; impairment charges; acquisition and disposal related gains /and costs; other charges; loss on disposal of property, plant and equipment; depreciation and amortization; share based compensation expense; and unwind of discount on deferred consideration. A reconciliation to net income and taxes can be found in Note 1514 to the condensed consolidated financial statements.

GAS CYLINDERS
The net sales and adjusted EBITDA for Gas Cylinders were as follows:
   Third Quarter% / point change Year-to-date % / point change 
 In millions 2019 2018 2019 v 2018 2019 2018 2019 v 2018 
 Net sales $54.2
 $62.2
 (12.9)% $170.7
 $181.9
 (6.2)% 
 Adjusted EBITDA 6.3
 6.3
 — % 17.9
 17.3
 3.5 % 
      % of net sales 11.6% 10.1% 1.5
 10.5% 9.5% 1.0
 
   First Quarter % / point change 
 In millions 2020 2019 2020 v 2019 
 Net sales $52.6
 $58.4
 (9.9)% 
 Adjusted EBITDA 3.5
 4.5
 (22.2)% 
      % of net sales 6.7% 7.7% (1.0) 
Net sales
The 12.9% and 6.2%9.9% decrease in Gas Cylinders sales in the third quarter and first nine-months, respectively, of2020 from 2019 from 2018 was primarily the result of:
LowerDecreased sales of Superform tooling and formed parts;
Decreased sales of aluminum cylinders used in industrial applications;
Decreased sales in Superform for European luxury automobiles; and
Adverse foreign currency effects of $1.6 million in the quarter and $5.2 million for the first nine months.cylinders.
These aredecreases were partially offset by continued strengthgrowth in alternative fuel cylinder sales.sales of AF cylinders.


Adjusted EBITDA
The 1.51.0 percentage point increasedecrease in adjusted EBITDA for Gas Cylinders as a percentage of net sales in the third quarter of2020 from 2019 from 2018 was primarily the result of successful cost saving initiatives.adverse product mix partially offset by productivity improvements at Luxfer Gas Cylinders Europe (as explained above).




ELEKTRON
The net sales and adjusted EBITDA for Elektron were as follows:
   Third Quarter % / point change Year-to-date % / point change 
 In millions 2019 2018 2019 v 2018 2019 2018 2019 v 2018 
 Net sales $52.9
 $66.9
 (20.9)% $173.3
 $195.1
 (11.2)% 
 Adjusted EBITDA 10.4
 16.7
 (37.7)% 37.5
 46.3
 (19.0)% 
      % of net sales 19.7% 25.0% (5.3) 21.6% 23.7% (2.1) 
   First Quarter % / point change 
 In millions 2020 2019 2019 v 2018 
 Net sales $51.2
 $62.0
 (17.4)% 
 Adjusted EBITDA 11.6
 14.0
 (17.1)% 
      % of net sales 22.7% 22.6% 0.1
 
Net sales
The 20.9% and 11.2% decrease17.4% increase in Elektron sales in the third quarter and first nine-months, respectively, of2020 from 2019 from 2018 was primarily the result of:
•
Lower sales of our proprietary SoluMag® alloy ;
LowerDecreased sales of otherzirconium-based industrial products;and automotive catalysts; and
$4.4 million revenue decline as a result ofadverse impact following the divestiture of Elektron's magnesiumour Czech recycling business at the end of Q2; andin Q2, 2019.
Adverse foreign currency effects of $1.2 million in the quarter and $4.7 million for the first nine months.


Adjusted EBITDA
The 5.30.1 percentage point decreaseincrease in adjusted EBITDA for Elektron as a percentage of net sales in the third quarter of2020 from 2019 from 2018 was primarily the result of adversea slight improvement in product sales mix impacted by lower SoluMag sales and temporary inefficiencies in our Madison, IL plant due to disruptions following unprecedented storm related flooding, partially offset by execution of cost-saving initiatives.
The first nine-months 2.1 percentage point decrease over 2018 incorporates the third quarter factors above partially offset by the improved sales mixdivestiture of the first quarter of 2019, which was driven by higher zirconium-based catalysis sales.lower margin Czech recycling business in Q2, 2019.


LIQUIDITY AND CAPITAL RESOURCES
Our liquidity requirements arise primarily from obligations under our indebtedness, capital expenditures, acquisitions, the funding of working capital restructuring 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;
funding restructuring programs;
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 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.
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.

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 SeptemberMarch 29, 2019.2020.
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 $13.6$4.5 million forin the first nine-months in 2019.quarter of 2020. It was primarily related to net income from operating activities, for the period, net of the following non-cash items: depreciation and amortization; asset impairment credit; other charges,amortization, pension contributions and net changes to assets and liabilities.
Cash provided byused in operating activities was $39.9$7.8 million in the first nine-monthsquarter of 2018.2019. It was primarily related to net incomeloss from operating activities, net of the following non-cash items: depreciation and amortization; asset impairment charges, pension contributions and net changes to assets and liabilities.
Investing activities
Net cash used for investing activities was $4.5$2.5 million forin the first nine-months in 2019,quarter of 2020, compared to net cash used for investing activities of $7.9$3.2 million in 2018.the first quarter of 2019. The movement was primarily due to $4.6 million of proceeds received on the sale of our Czech business and $1.2 million proceeds from the sale of property, plant and equipment, offset by an increasea decrease in capital expenditures which were $10.3$2.5 million and $8.2$3.2 million, in 2019the first quarter of 2020, and 2018,2019, respectively. We anticipate capital expenditures for fiscal 20192020 to be around $15approximately $10 million to $12 million.
Financing activities
In the first nine-months of 2019,2020, net cash provided from financing activities was $16.5$14.5 million (2018: $36.0(2019: $11.2 million outflow)inflow). We made net drawdowns on our banking facilities of $28.2$18.9 million (2018: $25.3(2019: $15.5 million repayment)drawdown) and dividend payments of $10.2$3.4 million (2018: $10.0(2019: $3.4 million)., equating to $0.125 per ordinary share. We also received $3.3$0.1 million (2018: $6.3(2019: $1.4 million) in relation to proceeds from sales of shares and paid out $4.3 million (2018: $7.0 million) in share-based compensation.shares.
Capital Resources
Dividends
We paid dividends in 2019the first quarter of 2020 of $10.23.4 million (2018: $10.0 (2019: $3.4 million), or $0.375$0.50 per ordinary share.
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.


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 facility31.7
 —
 —
 31.7
 —
 
 Deferred contingent consideration0.6
 —
 0.6
 —
 —
 
 Obligations under operating leases22.1
 4.0
 5.9
 2.7
 9.5
 
 Capital commitments1.8
 1.8
 —
 —
 —
 
 Obligations for environmental remediation2.1
 2.1
 —
 —
 —
 
 Interest payments14.8
 3.4
 5.8
 3.4
 2.2
 
 Total contractual cash obligations$148.1
 $11.3
 $37.3
 $62.8
 $36.7
 
            
  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 facility34.7
 —
 34.7
 —
 —
 
 Obligations under operating leases20.6
 3.7
 4.9
 2.9
 9.1
 
 Capital commitments0.8
 0.8
 —
 —
 —
 
 Interest payments13.1
 3.4
 5.4
 2.8
 1.5
 
 Total contractual cash obligations$144.2
 $7.9
 $70.0
 $30.7
 $35.6
 
            
Off-balance sheet measures
At SeptemberMarch 29, 2019,2020, we had no off-balance sheet arrangements.


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 20182019 Annual Report on Form 10-K, filed with the SEC on March 11, 2019,9, 2020, 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.







Item 3.        Quantitative and qualitative disclosures about market risk
There have been no material changes in our market risk during the quarter ended SeptemberMarch 29, 2019.2020 except for the impact of COVID-19, which is addressed as a specific risk factor in ITEM-1A in Part II of this filing. For additional information, refer to Item 7A of our 20182019 Annual Report on Form 10-K, filed with the SEC on March 11, 2019.9, 2020.

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 SeptemberMarch 29, 2019,2020, 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 not effective at the reasonable assurance level, as of the endMarch 29, 2020, as a result of the material weakness described in Item 9A of the Form 10-K filed with the SEC on March 9, 2020 not having been fully remediated by the first quarter ended September 29, 2019,of 2020.
In light of the material weakness, the Company performed additional analysis and other post-closing procedures to ensure that information required to be disclosed by usour consolidated financial statements are prepared 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 ouraccordance with generally accepted accounting principles. Our management, including our principal executiveChief Executive Officer and principalour Chief Financial Officer, has concluded that our consolidated financial officers, as appropriate to allow timely decisions regarding required disclosures.statements for the periods covered by and included in this Quarterly Report on Form 10-Q are fairly presented in all material respects in accordance with accounting principles generally accepted in the United States of America (GAAP) for the periods presented herein.
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 SeptemberMarch 29, 2019,2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




PART II - OTHER INFORMATION


Item 1.        Legal Proceedings
While we are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, employee and product liability claims, there are no material pending legal proceedings to which the Company or any 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 aggregate have a material adverse effect on results of operations for a particular year or quarter.


Item 1A.    Risk Factors


There have been no material changes from the risk factors previously disclosed in Item 1A. of our 20182019 Annual Report on Form 10-K, except that the U.K.'s exit ('Brexit') fromadverse impact of the European Union (E.U.)COVID-19 coronavirus outbreak has been further deferred by the E.U. until January 31, 2020, with the possibility of an earlier exit should that be approved by the U.K. parliament. However, thebecome more significant and widespread. The related risk factors under the caption "Our global operations expose us to economic conditions, potential tax costs, political risks"We depend upon our larger suppliers for a significant portion of our raw materials, and specific regulations in the countries in which we operate"a loss of one of these suppliers, or a significant supply interruption could negatively impact our financial performance" as previously disclosed in Item 1A. of our 20182019 Annual Report on Form 10-K relating to Brexit,COVID-19, remain applicable. In addition to the supply-side risks there are additional risks related to a fall in customer demand. We therefore highlight the following additional risk.


Our results of operations may be negatively impacted by the coronavirus disease pandemic
In December 2019, the 2019 novel coronavirus disease (COVID-19) surfaced in Wuhan, China. In March 2020, the World Health Organization characterized the coronavirus ("COVID-19") a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy, resulting in an economic downturn that could impact demand for our products. With many countries in 'lockdown', non-essential manufacturers and suppliers have been forced to shut down operations. This has caused disruptions from the temporary closure of third-party supplier and manufacturer facilities and interruptions in product supply. Disruption to our suppliers and falling demand from our customers will likely impact our sales and operating results. To date the outbreak has not had a material adverse impact on our operations, however the future impact is highly uncertain and cannot be predicted and there is no assurance that the outbreak will not have a material adverse impact on the future results of the Company. The extent of the impact will depend on future developments, including global and country-specific actions taken to contain the spread of the coronavirus.




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


Item 6.    Exhibits and Financial Statement Schedules
(a)(1) Financial Statements
The Financial Statements listed in the Index to Financial Statements in Item 1 are filed as part of this Quarterly Report on Form 10-Q.
(a)(2) Financial Statement Schedules
N/A
(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 SeptemberMarch 29, 2019,2020, 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) 
     
   /s/Alok Maskara 
   Alok Maskara 
   Chief Executive Officer 
   (Duly Authorized Officer) 
   October 30, 2019April 27, 2020 






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