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

FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 26, 2021March 27, 2022


OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-35370
Luxfer Holdings PLC
(Exact Name of Registrant as Specified in Its Charter)
England and Wales98-1024030
State or Other Jurisdiction of
 Incorporation or Organization		I.R.S. Employer Identification No.
Lumns Lane, Manchester, M27 8LN8989 North Port Washington Road, Suite 211,
Milwaukee, WI, 53217
(Address of principal executive officesoffices) (Zip code)
Registrant’s telephone number, including area code: +1 414-269-2419
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, nominal value £0.50 eachLXFRNew York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    x No    o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    x No    o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.:
Large accelerated filer 
oAccelerated Filerx
Non-accelerated filer 
o
Smaller reporting company 
☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes    ☐ No    x
The number of shares outstanding of Registrant’s only class of ordinary stock on September 26, 2021,March 27, 2022, was 27,704,918.27,495,439.




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 (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)
7 6
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
22 17
Item 3.Quantitative and Qualitative Disclosures About Market Risk
33 27
Item 4.Controls and Procedures
33 27
PART II OTHER INFORMATION
Item 1.Legal Proceedings
34 28
Item 1A.Risk Factors
34 28
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
34 28
Item 6.Exhibits
34 29
Signatures
35 30



PART I - FINANCIAL INFORMATION

Item 1.        Condensed Financial Statements (unaudited)

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Third QuarterYear-to-date
In millions, except share and per-share data2021202020212020
Net sales$91.2 $77.7 $275.4 $242.7 
Cost of goods sold(70.1)(58.8)(203.2)(181.7)
Gross profit21.1 18.9 72.2 61.0 
Selling, general and administrative expenses(10.6)(8.4)(33.9)(30.3)
Research and development(1.3)(1.0)(2.9)(2.6)
Restructuring charges(0.5)(4.2)(2.1)(7.8)
Acquisition and disposal related costs(0.6)— (1.5)(0.2)
Other charges— — (1.1)— 
Operating income8.1 5.3 30.7 20.1 
Interest expense(0.8)(1.2)(2.4)(3.5)
Defined benefit pension credit0.6 1.1 1.8 3.3 
Income before income taxes and equity in net loss from affiliates7.9 5.2 30.1 19.9 
Provision for income taxes(1.9)(2.8)(3.6)(5.6)
Income before equity in net loss from affiliates6.0 2.4 26.5 14.3 
Equity in net loss from affiliates (net of tax)— — — (0.1)
Net income from continuing operations6.0 2.4 26.5 14.2 
(Loss) / income from discontinued operations, net of tax(0.7)0.2 (2.8)(1.3)
(Loss) / gain on disposition of discontinued operations, net of tax(0.5)— 6.6 — 
Net (loss) / income from discontinued operations$(1.2)$0.2 $3.8 $(1.3)
Net income$4.8 $2.6 $30.3 $12.9 
Earnings / (loss) per share1
Basic from continuing operations$0.22 $0.09 $0.96 $0.52 
Basic from discontinued operations2
$(0.04)$0.01 $0.14 $(0.05)
Basic$0.17 $0.09 $1.09 $0.47 
Diluted from continuing operations$0.21 $0.09 $0.94 $0.51 
Diluted from discontinued operations2$(0.04)$0.01 $0.14 $(0.05)
Diluted$0.17 $0.09 $1.08 $0.46 
Weighted average ordinary shares outstanding
Basic27,722,472 27,619,298 27,718,874 27,532,823 
Diluted28,033,732 28,013,706 28,072,155 27,958,942 
See accompanying notes to condensed consolidated financial statements
         First Quarter
In millions, except share and per-share data20222021
Net sales$97.0 $85.2 
Cost of goods sold(72.8)(60.0)
Gross profit24.2 25.2 
Selling, general and administrative expenses(10.7)(10.6)
Research and development(1.3)(0.8)
Restructuring charges(1.4)(1.4)
Acquisition-related costs(0.2)(0.2)
Other charges— (1.1)
Operating income10.6 11.1 
Interest expense(0.8)(0.8)
Defined benefit pension credit0.4 0.6 
Income before income taxes10.2 10.9 
Provision for income taxes(2.5)(2.3)
Net income from continuing operations7.7 8.6 
Net loss from discontinued operations, net of tax(0.1)(1.6)
Gain on disposition of discontinued operations, net of tax— 7.5 
Net (loss) / income from discontinued operations$(0.1)$5.9 
Net income$7.6 $14.5 
Earnings / (loss) per share (1)
Basic from continuing operations$0.28 $0.31 
Basic from discontinued operations$— $0.21 
Basic$0.28 $0.52 
Diluted from continuing operations$0.28 $0.31 
Diluted from discontinued operations$— $0.21 
Diluted$0.28 $0.52 
Weighted average ordinary shares outstanding
Basic27,490,741 27,658,871 
Diluted27,696,118 28,057,323 
1(1) The calculation of earnings per share is performed separately for continuing and discontinued operations. As a result, the sum of the two in any particular period may not equal the earnings-per-share amount in total.
2The loss per shareIn the first quarter of 2022, basic average shares outstanding and diluted average shares outstanding were the same for discontinued operations inbecause the Third Quartereffect of 2021 and the year-to-datepotential shares of 2020 has not been diluted,common stock was anti-dilutive since the incremental shares included in the weighted-average number of shares outstanding would have been anti-dilutive.Company generated a net loss from discontinued operations.
See accompanying notes to condensed consolidated financial statements
1

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Third QuarterYear-to-date
In millions2021202020212020
Net income$4.8 $2.6 $30.3 $12.9 
Other comprehensive (loss) / income
Change in foreign currency translation adjustment, net of tax(2.1)3.0 (0.1)(3.7)
Pension and post-retirement actuarial gains, net of $0.2, $0.1, $0.5 and $0.3 tax, respectively0.7 0.5 2.1 1.4 
Other comprehensive (loss) / income, net of tax(1.4)3.5 2.0 (2.3)
Total comprehensive income$3.4 $6.1 $32.3 $10.6 
First Quarter
In millions20222021
Net income$7.6 $14.5 
Other comprehensive (loss) / income
Net change in foreign currency translation adjustment(1.8)0.9 
Pension and post-retirement actuarial gains, net of $0.1 and $0.1 tax, respectively0.4 0.6 
Other comprehensive (loss) / income, net of tax(1.4)1.5 
Total comprehensive income$6.2 $16.0 

See accompanying notes to condensed consolidated financial statements

2

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 26,December 31,
In millions, except share and per-share data20212020
Current assets
Cash and cash equivalents$15.1 $1.5 
Restricted cash0.1 — 
Accounts and other receivables, net of allowances of $0.6 and $0.5, respectively59.0 43.1 
Inventories80.6 68.8 
Current assets held-for-sale10.5 36.0 
Other current assets1.3 1.5 
Total current assets$166.6 $150.9 
Non-current assets
Property, plant and equipment, net$88.5 $86.0 
Right-of-use assets from operating leases11.7 9.5 
Goodwill72.9 70.2 
Intangibles, net12.2 12.8 
Deferred tax assets18.0 16.5 
Investments in joint ventures and other affiliates0.4 0.5 
Total assets$370.3 $346.4 
Current liabilities
Accounts payable$30.7 $18.6 
Accrued liabilities30.1 21.5 
Taxes on income3.6 0.4 
Current liabilities held-for-sale1.7 11.4 
Other current liabilities12.9 13.5 
Total current liabilities$79.0 $65.4 
Non-current liabilities
Long-term debt$49.6 $53.4 
Pensions and other retirement benefits42.4 50.8 
Deferred tax liabilities1.3 2.0 
Other non-current liabilities11.3 7.7 
Total liabilities$183.6 $179.3 
Shareholders' equity
Ordinary shares of £0.50 par value; authorized 40,000,000 shares for 2021 and 2020; issued and outstanding 28,944,000 shares for 2021 and 29,000,000 2020.$26.5 $26.6 
Deferred shares of £0.0001 par value; authorized issued and outstanding 761,835,338,444 shares for 2021 and 2020149.9 149.9 
Additional paid-in capital69.5 70.6 
Treasury shares(5.5)(4.0)
Own shares held by ESOP(1.2)(1.4)
Retained earnings111.3 91.2 
Accumulated other comprehensive loss(163.8)(165.8)
Total shareholders' equity$186.7 $167.1 
Total liabilities and shareholders' equity$370.3 $346.4 
March 27,December 31,
In millions, except share and per-share data20222021
Current assets
Cash and cash equivalents$17.2 $6.2 
Restricted cash0.1 0.2 
Accounts and other receivables, net of allowances of $0.8 and $0.8, respectively69.6 57.8 
Inventories105.9 90.5 
Assets held-for-sale12.6 8.5 
Total current assets$205.4 $163.2 
Non-current assets
Property, plant and equipment, net$83.0 $87.5 
Right-of-use assets from operating leases21.5 12.6 
Goodwill68.9 69.7 
Intangibles, net13.4 13.7 
Deferred tax assets7.9 8.0 
Pensions and other retirement benefits14.0 13.7 
Investments and loans to joint ventures and other affiliates0.4 0.4 
Total assets$414.5 $368.8 
Current liabilities
Accounts payable$37.8 $31.7 
Accrued liabilities31.3 28.2 
Taxes on income5.5 3.0 
Liabilities held-for-sale4.5 1.4 
Other current liabilities19.5 19.6 
Total current liabilities$98.6 $83.9 
Non-current liabilities
Long-term debt$85.9 $59.6 
Pensions and other retirement benefits1.9 1.9 
Deferred tax liabilities2.7 2.7 
Other non-current liabilities18.8 11.6 
Total liabilities$207.9 $159.7 
Commitments and contingencies (Note 15)
Shareholders' equity
Ordinary shares of £0.50 par value; authorized 40,000,000 shares for 2022 and 2021; issued and outstanding 28,944,000 shares for 2022 and 2021$26.5 $26.5 
Deferred shares of £0.0001 par value; authorized, issued and outstanding 761,835,318,444 shares for 2022 and 2021149.9 149.9 
Additional paid-in capital70.7 70.9 
Treasury shares(11.1)(9.6)
Own shares held by ESOP(1.1)(1.1)
Retained earnings108.1 107.5 
Accumulated other comprehensive loss(136.4)(135.0)
Total shareholders' equity$206.6 $209.1 
Total liabilities and shareholders' equity$414.5 $368.8 
See accompanying notes to condensed consolidated financial statements
3

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
First Quarter
In millions20222021
Operating activities
Net income$7.6 $14.5 
Net loss / (income) from discontinued operations0.1 (5.9)
Net income from continuing operations7.7 8.6 
Adjustments to reconcile net income to net cash (used for) / provided by operating activities
   Depreciation3.5 3.2 
   Amortization of purchased intangible assets0.2 0.2 
   Amortization of debt issuance costs0.2 0.1 
   Share-based compensation charges0.2 0.5 
   Deferred income taxes0.1 0.3 
   Defined benefit pension credit(0.4)(0.6)
   Defined benefit pension contributions— (1.4)
Changes in assets and liabilities
   Accounts and other receivables(12.2)(7.4)
   Inventories(16.2)(0.1)
   Other current assets(3.0)(1.7)
   Accounts payable6.8 6.7 
   Accrued liabilities3.4 2.5 
   Other current liabilities2.0 2.0 
   Other non-current assets and liabilities(1.6)2.3 
Net cash (used for) / provided by operating activities - continuing(9.3)15.2 
Net cash provided by operating activities - discontinued— — 
Net cash (used for) / provided by operating activities$(9.3)$15.2 
Investing activities
Capital expenditures$(1.0)$(1.4)
Proceeds from sale of discontinued operations— 21.0 
Business acquisition— (19.3)
Net cash (used for) / provided by investing activities - continuing$(1.0)$0.3 
Net cash used for investing activities - discontinued$— $— 
Net cash (used for) / provided by investing activities$(1.0)$0.3 
Financing activities
Net drawdown of long-term borrowings26.7 19.5 
Share-based compensation cash paid(0.4)(1.3)
Dividends paid(3.4)(3.4)
Repurchases of ordinary shares(1.5)— 
Net cash from financing activities$21.4 $14.8 
Effect of exchange rate changes on cash and cash equivalents(0.2)— 
Net increase$10.9 $30.3 
Cash, cash equivalents and restricted cash; beginning of year (1)
6.4 1.5 
Cash, cash equivalents and restricted cash; end of the First Quarter (1)
17.3 31.8 
Supplemental cash flow information:
Interest payments$0.8 $0.9 
Income tax receipts, net(0.1)— 
Year-to-date
In millions20212020
Operating activities
Net income$30.3 $12.9 
Net (income) / loss from discontinued operations(3.8)1.3 
Net income from continuing operations$26.5 $14.2 
Adjustments to reconcile net income to net cash provided by operating activities
   Equity in net loss from affiliates— 0.1 
   Depreciation10.5 9.4 
   Amortization of purchased intangible assets0.7 0.6 
   Amortization of debt issuance costs0.3 0.4 
   Share-based compensation charges2.2 2.1 
   Deferred income taxes(2.2)0.4 
   Defined benefit pension credit(1.8)(3.3)
   Defined benefit pension contributions(4.6)(2.7)
Changes in assets and liabilities
   Accounts and other receivables(10.2)4.8 
   Inventories(5.4)3.7 
   Other current assets(1.2)10.7 
   Accounts payable9.6 (9.5)
   Accrued liabilities8.6 2.7 
   Other current liabilities(0.3)2.6 
   Other non-current assets and liabilities1.4 0.3 
Net cash provided by operating activities - continuing34.1 36.5 
Net cash provided by operating activities - discontinued— 0.2 
Net cash provided by operating activities$34.1 $36.7 
Investing activities
Capital expenditures$(5.6)$(5.8)
Proceeds from sale of businesses and other23.7 1.3 
Acquisitions(19.3)— 
Net cash used for investing activities - continuing(1.2)(4.5)
Net cash used for investing activities - discontinued— (0.2)
Net cash used for investing activities$(1.2)$(4.7)
Financing activities
Net repayment of long-term borrowings$(4.4)$(16.5)
Deferred consideration paid— (0.4)
Proceeds from sale of shares— 1.1 
Repurchase of own shares(2.8)— 
Share-based compensation cash paid(1.9)(1.3)
Dividends paid(10.2)(10.2)
Net cash used for financing activities$(19.3)$(27.3)
Effect of exchange rate changes on cash and cash equivalents0.1 (0.1)
Net increase$13.7 $4.6 
Cash, cash equivalents and restricted cash; beginning of year1.5 10.3 
Cash, cash equivalents and restricted cash; end of the Third Quarter15.2 14.9 
Supplemental cash flow information:
Interest payments$2.5 $3.5 
Income tax payments5.2 1.6 
(1) Cash, cash equivalents and restricted cash at March 27, 2022 consists of $17.2 million (December 31, 2021: $6.2 million) cash and cash equivalents and $0.1 million (December 31, 2021: $0.2 million) restricted cash.

See accompanying notes to condensed consolidated financial statements
4

LUXFER HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
In millions,Ordinary
shares		Deferred
shares		Additional paid-in capitalTreasury shares NumberTreasury shares AmountOwn shares held by ESOP NumberOwn shares held by ESOP AmountRetained
earnings		Accumulated other comprehensive lossTotal shareholders'
equity
At January 1, 2021$26.6 $149.9 $70.6 (0.4)$(4.0)(1.0)$(1.4)$91.2 $(165.8)$167.1 
Net income— — — — — — — 14.5 — 14.5 
Other comprehensive income, net of tax— — — — — — — — 1.5 1.5 
Dividends declared— — — — — — — (3.4)— (3.4)
Share-based compensation— — 0.5 — — — — — — 0.5 
Utilization of shares from ESOP to satisfy share based compensation— — (1.4)— — 0.1 0.1 — — (1.3)
At March 28, 2021$26.6 $149.9 $69.7 (0.4)$(4.0)(0.9)$(1.3)$102.3 $(164.3)$178.9 
Net income— — — — — — — 11.0 — 11.0 
Other comprehensive income, net of tax— — — — — — — — 1.9 1.9 
Dividends declared— — — — — — — (3.4)— (3.4)
Share based compensation— — 0.9 — — — — — — 0.9 
Utilization of shares from ESOP to satisfy share based compensation— — (0.3)— — 0.1 0.1 — — (0.2)
Cancellation of ordinary share capital(0.1)— (0.8)— — — — — — (0.9)
At June 27, 2021$26.5 $149.9 $69.5 (0.4)$(4.0)(0.8)$(1.2)$109.9 $(162.4)$188.2 
Net income— — — — — — — 4.8 — 4.8 
Shares sold from ESOP— — (0.1)— — — — — — (0.1)
Other comprehensive loss, net of tax— — — — — — — — (1.4)(1.4)
Dividends declared— — — — — — — (3.4)— (3.4)
Share based compensation— — 0.8 — — — — — — 0.8 
Utilization of shares from ESOP to satisfy share based compensation— — (0.3)— — — — — — (0.3)
Purchase of own shares— — — (0.1)(1.5)— — — — (1.5)
Cancellation of ordinary share capital— — (0.4)— — — — — — (0.4)
At September 26, 2021$26.5 $149.9 $69.5 (0.5)$(5.5)(0.8)$(1.2)$111.3 $(163.8)$186.7 

Ordinary share capital represents 28,944,000 shares in the third quarter, 28,962,000 in the second quarter and 29,000,000 shares in the first quarter of 2021.
Deferred share capital represents 761,835,338,444 shares in the first nine months of 2021.





5

In millions,Ordinary sharesDeferred sharesAdditional paid-in capitalTreasury shares NumberTreasury shares AmountOwn shares held by ESOP NumberOwn shares held by ESOP AmountRetained earningsAccumulated other comprehensive lossTotal shareholders'
equity
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 
Shares sold from ESOP— — — — — — — 
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 treasury shares 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 
Net income— — — — — — — 4.1 — 4.1 
Shares sold from ESOP— — 0.9 — — — — 0.9 
Other comprehensive income, net of tax— — — — — — — — 1.5 1.5 
Dividends declared— — — — — — — (3.4)— (3.4)
Share based compensation— — 0.8 — — — — — — 0.8 
Utilization of shares from ESOP to satisfy share based compensation— — (0.5)— — 0.1 0.1 — — (0.4)
At June 28, 2020$26.6 $149.9 $69.4 (0.4)$(4.0)(1.0)$(1.5)$88.3 $(155.4)$173.3 
Net income— — — — — — — 2.6 — 2.6 
Other comprehensive income, net of tax— — — — — — — — 3.5 3.5 
Dividends declared— — — — — — — (3.4)— (3.4)
Share based compensation— — 0.8 — — — — — — 0.8 
Utilization of treasury shares to satisfy share based compensation— — (0.1)— — — — — — (0.1)
At September 27, 202026.6 149.9 70.1 (0.4)(4.0)(1.0)(1.5)87.5 (151.9)176.7 
Ordinary share capital represents 29,000,000 shares in the first nine months of 2020.
Deferred share capital represents 761,835,338,444 shares in first nine months of 2020.
In millions,Ordinary
share
capital		Deferred
share
capital		Additional paid-in capitalTreasury shares NumberTreasury shares AmountOwn shares held by ESOP NumberOwn shares held by ESOP AmountRetained
earnings		Accumulated other comprehensive lossTotal
equity
At January 1, 2021$26.6 $149.9 $70.6 (0.4)$(4.0)(1.0)$(1.4)$91.2 $(165.8)$167.1 
Net income— — — — — — — 14.5 — 14.5 
Other comprehensive income, net of tax— — — — — — — — 1.5 1.5 
Dividends declared— — — — — — — (3.4)— (3.4)
Share-based compensation— — 0.5 — — — — — — 0.5 
Utilization of treasury shares to satisfy share based compensation— — (1.4)— — — 0.1 — — (1.3)
At March 28, 2021$26.6 $149.9 $69.7 (0.4)$(4.0)(1.0)$(1.3)$102.3 $(164.3)$178.9 
At January 1, 2022$26.5 $149.9 $70.9 (0.6)$(9.6)(0.8)$(1.1)$107.5 $(135.0)$209.1 
Net income— — — — — — — 7.6 — 7.6 
Other comprehensive loss, net of tax— — — — — — — — (1.4)(1.4)
Dividends declared— — — — — — — (7.0)— (7.0)
Share-based compensation— — 0.2 — — — — — — 0.2 
Share buyback— — — (0.1)(1.5)— — — — (1.5)
Utilization of shares from ESOP to satisfy share based compensation— — (0.4)— — — — — — (0.4)
At March 27, 2022$26.5 $149.9 $70.7 (0.7)$(11.1)(0.8)$(1.1)$108.1 $(136.4)$206.6 

See accompanying notes to condensed consolidated financial statements
65

LUXFER HOLDINGS PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1.    Basis of Presentation and Responsibility for Interiminterim Financial Statements
We prepared the accompanying unaudited consolidated condensed financial statements of Luxfer Holdings PLC and all wholly-owned, majority owned or otherwise controlled subsidiaries on the same basis as our annual audited financial statements. We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
Our quarterly financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020.2021. 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, 2022, ended March 27, 2022, and the First Quarter, 2021, ended on September 26, 2021, and the Third Quarter 2020, ended on September 27, 2020.
Discontinued operations
Certain amounts in the prior-year financial statements were reclassified to conform to the current-year presentation due to the classification of certain businesses as discontinued operations.March 28, 2021.
Impact of COVID-19 on the Financial Statements
In March 2020, the World Health Organization characterized the coronavirus ("COVID-19")Demand from most end-markets we serve continues to improve in to 2022, following a pandemic. The rapid spreadperiod of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. Luxfer’s 2020 results were significantly affected by the global macro environment resultingrecovery in 2021 from the adverse impact of COVID-19, pandemic,which began in March 2020. The global political environment has become increasingly uncertain, combined with sharp recovery in demand and supply chain challenges, has resulted in some adverse business impacts, including broad-based market weakness, which was especially evident inincreased material cost inflation on key inputs (including magnesium, aluminum and carbon fiber), labor availability issues and energy and transport cost increases.
Currently, our general industrial and transportation end-markets, contributing to a full year decline of 18.0% and 14.7% respectively, in each of those markets.
In the first nine months of 2021, with net sales up 13.5%, a return to growth across all end-markets and adjusted EBITDA up 21.7% on the prior year, the Company has delivered three quarters of strong performance amid the global economic recovery from the COVID-19 pandemic. Furthermore, it continues to operate all of its facilities at near normal production levels, following temporary closures of a few locations in the second and third quarters of 2020. Due to weaker demand resulting from uncertain economic conditions, supply constraints, andexpectation is that the impact of COVID-19, Luxfer implemented additionalmaterial and energy cost saving programs in the second half of 2020, including headcount reductions. Company performance is now much improved and the apparent success of vaccine programs in the U.S. and Europe has given rise to fewer restrictions, increased stability and macroeconomic recovery. That said, the coronavirus is still prevalent in many of our markets, there are pressures on availability and therefore cost of, raw materials, transport, energyinflation and labor continuing restrictions on international travel resulting in considerable uncertainty as to when normal conditionsand transport constraints will prevail. If warranted,continue at least throughout 2022, but it is possible that the Company may again suspend or reduce operations at certain facilities, which could have an adverse effect on our financial position, results of operations and cash flows.
The Company recognized that the COVID-19 pandemic constituted a triggering event in accordance with Accounting Standards Codification, ("ASC"), 350 Intangibles - Goodwill and Other, during the first quarter of 2020 and therefore performed an impairment assessment of its goodwill and other intangible assets. Based on the forecast at that time, we did not identify any impairments, nor marginal outcomes. During 2020 and in the first nine months of 2021, quarterly re-forecasts were performedintention to assess the impact COVID-19 was having onpass through inflation to our results and liquidity, and in the fourth quarter of 2020 we carried out our annual goodwill and other intangibles impairment test using cash flows from the annual and strategic plan budgeting exercise.

7

1.    Basis of Presentation and Responsibility for interim Financial Statements (continued)
There have been no subsequent triggering events that has changed our assessment of fair value, as a result, no impairments nor marginal outcomes have been identified.
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 revolving credit facility (see Note 9) and has performed stress testing on financial covenants using current forecast information and has not identified any liquidity concerns. Furthermore, the Company has reported historically low levels of net debt and continual strong cash flow generation since the onset of the pandemic.customers where possible.
Accounting standards issued but not yet effective
None that willexpected to be material to the Company.


6

2.    Earnings per share

Basic earnings per share are computed by dividing net income or loss for the period by the weighted-average number of ordinary shares outstanding, net of treasuryTreasury shares and shares held in ESOP. Diluted earnings per share are computed by dividing net income for the period by the weighted average number of ordinary shares outstanding and the dilutive ordinary shares equivalents.
Basic and diluted earnings per share were calculated as follows:
Third QuarterYear-to-date
In millions except share and per-share data2021202020212020
Basic earnings:
Net income from continuing operations$6.0 $2.4 $26.5 $14.2 
Net (loss) / income from discontinued operations(1.2)0.2 3.8 (1.3)
Net income$4.8 $2.6 $30.3 $12.9 
Weighted average number of £0.50 ordinary shares:
For basic earnings per share27,722,472 27,619,298 27,718,874 27,532,823 
Dilutive effect of potential common stock311,260 394,408 353,281 426,119 
For diluted earnings per share28,033,732 28,013,706 28,072,155 27,958,942 
Earnings / (loss) per share using weighted average number of ordinary shares outstanding3:
Basic earnings per ordinary share for continuing operations$0.22 $0.09 $0.96 $0.52 
Basic (loss) / earnings per ordinary share for discontinued operations(0.04)0.01 0.14 (0.05)
Basic earnings per ordinary share$0.17 $0.09 $1.09 $0.47 
Diluted earnings per ordinary share for continuing operations$0.21 $0.09 $0.94 $0.51 
Diluted (loss) / earnings per ordinary share for discontinued operations(0.04)0.01 0.14 (0.05)
Diluted earnings per ordinary share$0.17 $0.09 $1.08 $0.46 
First Quarter
In millions except share and per-share data20222021
Basic earnings:
Net income from continuing operations$7.7 $8.6 
Net (loss) / income from discontinued operations(0.1)5.9 
Net income$7.6 $14.5 
Weighted average number of £0.50 ordinary shares:
For basic earnings per share27,490,741 27,658,871 
Dilutive effect of potential common stock205,377 398,452 
For diluted earnings per share27,696,118 28,057,323 
Earnings / (loss) per share using weighted average number of ordinary shares outstanding:(1)
Basic earnings per ordinary share for continuing operations$0.28 $0.31 
Basic (loss) / earnings per ordinary share for discontinued operations$— $0.21 
Basic earnings per ordinary share$0.28 $0.52 
Diluted earnings per ordinary share for continuing activities$0.28 $0.31 
Diluted (loss) / earnings per ordinary share for discontinued operations$— $0.21 
Diluted earnings per ordinary share$0.28 $0.52 
3
(1) The calculation of earnings per share is performed separately for continuing and discontinued operations. As a result, the sum of the two in any particular period may not equal the earnings-per-share amount in totaltotal.
In the thirdfirst quarter of 2021 and year-to-date 2020,2022, basic average shares outstanding and diluted average shares outstanding were the same for discontinued operations because the effect of potential shares of common stock was anti-dilutive since the Company generated a net loss from discontinued operations. As a result, 205,377 shares combined were not included in the computation of diluted EPS for discontinued operations for the first quarter of 2022.
.
8

3.    Net Salessales
Disaggregated sales disclosures for the quarterquarters ended March 27, 2022, and first nine months ended September 26,March 28, 2021, and September 27, 2020, are included below and in Note 14, SegmentalSegment Information.
Third Quarter
20212020
In millionsGas CylindersElektronTotalGas CylindersElektronTotal
General industrial$7.6 $21.6 $29.2 $6.8 $20.0 $26.8 
Transportation19.7 11.4 31.1 11.9 9.9 21.8 
Defense, First Response & Healthcare18.3 12.6 30.9 13.6 15.5 29.1 
Net sales$45.6 $45.6 $91.2 $32.3 $45.4 $77.7 
Year-to-date
20212020
In millionsGas CylindersElektronTotalGas CylindersElektronTotal
General industrial$23.3 $69.0 $92.3 $19.6 $65.6 $85.2 
Transportation50.7 35.1 85.8 37.3 29.7 67.0 
Defense, First Response & Healthcare54.3 43.0 97.3 50.1 40.4 90.5 
Net sales$128.3 $147.1 $275.4 $107.0 $135.7 $242.7 
First Quarter
20222021
In millionsGas CylindersElektronTotalGas CylindersElektronTotal
General industrial$8.4 $26.9 $35.3 $5.8 $21.7 $27.5 
Transportation16.9 12.9 29.8 14.9 11.8 26.7 
Defense, First Response & Healthcare17.1 14.8 31.9 15.5 15.5 31.0 
$42.4 $54.6 $97.0 $36.2 $49.0 $85.2 
The Company’s performance obligations are satisfied at a point in time. With the reclassificationclassification of our Superform business as discontinued operations, none of the Company's revenue from continuing operations is satisfied over time. As a result, the Company's contract receivables, contract assets and contract liabilities are included within current assets and liabilities held-for-sale.
7

4.    Restructuring charges
The $0.5 million and $2.1$1.4 million restructuring charge in the third quarter and first nine months of 2021, respectively, included $0.3 million and $1.0 million, respectively, of further2022 relates solely to costs associated with the announcedclosure of Luxfer Gas Cylinders France, which ceased operations in 2019.
The $1.4 million restructuring charge in 2021 included $0.5 million of costs associated with the closure of Luxfer Gas Cylinders France and was largely legal and professional fees. The nine months of 2021 also includes $0.9 million of one-time employee termination costsin relation to rationalization activity in the Elektron division,segment, which included $0.1 million of asset and inventory impairments, largely in relation to the planned divestiture of our small Luxfer Magtech production facility in Ontario, Canada in the second quarter of 2021.
The $4.2 million and $7.8 million restructuring charge in the third quarter and first nine months of 2020, respectively, was predominantly ($3.3 million and $6.5 million, respectively) the result of further costs associated with the announced closure of Luxfer Gas Cylinders France, including one-time employee costs and associated legal and professional fees. In addition we incurred one-time employee costs in relation to COVID-led cost saving programs largely affecting our Elektron Division, of $0.9 million and $1.3 million in the third quarter and first nine months of 2020, respectively.Canada.
Restructuring-related costs included within Restructuring charges in the Condensed Consolidated Financial Statements by reportable segment were as follows:
Third QuarterYear-to-date
In millions2021202020212020
Severance and related costs
Gas Cylinders$0.5 $3.3 $1.1 $6.7 
Elektron— 0.9 1.0 1.0 
Other— — — 0.1 
Total restructuring charges$0.5 $4.2 $2.1 $7.8 
First Quarter
In millions20222021
Severance and related costs
Gas Cylinders segment$1.4 $0.5 
Elektron segment— 0.9 
Total restructuring charges$1.4 $1.4 



9

4.    Restructuring
Activity related to restructuring, recorded in Other current liabilities in the consolidated balance sheets is summarized as follows:
In millions20212022
Balance at January 1, 2022$9.011.7 
Costs incurred2.11.4 
Cash payments and other(2.5)(6.6)
Balance at September 26,March 27, 2022$8.66.5 

5.    AcquisitionAcquisitions and disposal relatedacquisition-related costs
Acquisition-related costs of $0.2 million in the First Quarters of 2022 and 2021 represent professional fees incurred in relation to the SCI acquisition.
On March 15, 2021, the Company completed the acquisition of the Structural Composites Industries LLC (SCI)("SCI") business of Worthington Industries, Inc., based in Pomona, California, for $19.3 million cash consideration. The acquisition of SCI strengthens Luxfer’s composite cylinder offerings and aligns with recent investment to enhance our alternative fuel capabilities to capitalize on the growing compressed natural gas (CNG) and hydrogen opportunities.
At the Third QuarterThe fair value of 2021 the purchase price allocation was ongoingassets and therefore a provisional allocation was presented. During the ongoing review of the purchase price allocation in the Third Quarter there has been a reallocation of $0.2 million from inventories to goodwill. No other changes in the purchase price allocation presented at the Second Quarter of 2021 have been identified, although the review remains ongoing.liabilities acquired are as follows:
Acquisition-related costs of $0.6 million and $1.5 million incurred in the third quarter and first nine months of 2021 respectively, primarily represent transitional costs and professional fees incurred in relation to the SCI acquisition.
In millions
Accounts and other receivables$4.7
Inventories6.7
Property, plant and equipment7.8
Customer relationships1.8
Less:
Accounts payable(1.7)
Net assets acquired19.3
Purchase consideration$19.3
Acquisition-related costs of $0.2 million in the first nine months of 2020 related to M&A exploration activities net of a $0.1 million release of deferred contingent consideration.

In the Third Quarter of 2020 we sold our 51% investment in Luxfer Uttam India Private Limited to our joint venture partner resulting in a gain on sale of less than $0.1 million.

6.    Other charges
There were no other charges in the first quarter of 2022. Other charges of $1.1 million in the first nine monthsFirst Quarter of 2021 relatesrelated to the settlement of a class action lawsuit in the Gas Cylinders segment in relation to an alleged historic violation of the Californian Labor Code, concerning a Human Resources administration matter. The Company expects the cash related to the settlement to be paid during the year, with no additional charge to the income statement.
108

7.    Supplementary balance sheet information
September 26,December 31,
In millions20212020
Accounts and other receivables
Trade receivables$50.0 $33.6 
Related parties0.2 0.2
Prepayments and accrued income6.5 5.5
Derivative financial instruments0.1 0.2
Deferred consideration0.9 0.2
Other receivables1.3 3.4
Total accounts and other receivables$59.0 $43.1 
Inventories
Raw materials and supplies$36.2 $26.2 
Work-in-process23.7 19.7 
Finished goods20.7 22.9 
Total inventories$80.6 $68.8 
Other current assets
Income tax receivable1.3 1.5 
Total other current assets$1.3 $1.5 
Property, plant and equipment, net
Land, buildings and leasehold improvements$67.0 $65.2 
Machinery and equipment265.6 255.3 
Construction in progress6.5 7.8 
Total property, plant and equipment339.1 328.3 
Accumulated depreciation and impairment(250.6)(242.3)
Total property, plant and equipment, net$88.5 $86.0 
Other current liabilities
Restructuring related liabilities$8.6 $9.0 
Contingent liabilities1.5 1.1 
Derivative financial instruments0.1 0.4 
Operating lease liability1.1 2.9 
Other current liabilities1.6 0.1 
Total other current liabilities$12.9 $13.5 
Other non-current liabilities
Contingent liabilities$0.6 $1.0 
Operating lease liability10.7 6.7 
Total other non-current liabilities$11.3 $7.7 
March 27,December 31,
In millions20222021
Accounts and other receivables
Trade receivables$59.7 $45.8 
Related parties0.1 0.1
Prepayments and accrued income5.18.5
Derivative financial instruments0.30.1
Deferred consideration1.01.0
Other receivables3.42.3
Total accounts and other receivables$69.6 $57.8 
Inventories
Raw materials and supplies$49.1 $39.3 
Work-in-process31.0 26.7 
Finished goods25.8 24.5 
Total inventories$105.9 $90.5 
Property, plant and equipment, net
Land, buildings and leasehold improvements$60.2 $64.6 
Machinery and equipment263.1 266.3 
Construction in progress8.7 8.4 
Total property, plant and equipment332.0 339.3 
Accumulated depreciation and impairment(249.0)(251.8)
Total property, plant and equipment, net$83.0 $87.5 
Other current liabilities
Short term provision$0.2 $0.2 
Restructuring provision6.5 11.7 
Derivative financial instruments0.1 0.1 
Operating lease liability4.5 3.0 
Dividend payable3.6 — 
Advance payments4.6 4.6 
Total other current liabilities$19.5 $19.6 
Other non-current liabilities
Contingent liabilities$1.4 $1.8 
Operating lease liability17.2 9.8 
Other non-current liabilities0.2 — 
Total other non-current liabilities$18.8 $11.6 







119

7.    Supplementary balance sheet information (continued)
In 2020, the Company classified its Superform aluminum superplastic forming business operating from sites in the U.S. and the U.K, and our U.S. aluminum gas cylinder business, as assets and liabilities held-for-sale in accordance with ASC 205-20 Discontinued Operations. See Note 10 for a breakdown of this disposal group.
Our U.S. aluminum gas cylinder business was sold during the First Quarter of 2021 and our U.K. Superform business was sold during the Third Quarter of 2021.
The respective assets and liabilities of the above disposal group have been reclassified as held-for-sale also included within assets held-for-sale, but not disclosed as discontinued operations, in 2021 and 2020 is 1 building valued at $3.7 million, within our Elektron Segment.
Both of these respective items have been included in the table below.
Held-for-sale assetsSeptember 26,December 31,
In millions20212020
Property, plant and equipment$4.8 $11.6 
Right-of-use-assets from operating leases0.4 3.1 
Inventory2.7 12.6 
Accounts and other receivables2.6 8.7 
Held-for-sale assets$10.5 $36.0 
Held-for-sale liabilities
Accounts payable0.6 4.3 
Accrued liabilities0.1 1.5 
Other current liabilities1.0 5.6 
Held-for-sale liabilities$1.7 $11.4 
There has been no reclassification of items from other comprehensive income to the income statement as a result of items reclassified to held-for-sale.

8.     Goodwill and other identifiable intangible assets
Changes in goodwill during the first nine monthsFirst Quarter, ended September 26, 2021,March 27, 2022, were as follows:
In millionsGas CylindersElektronTotal
At January 1, 2021$27.9 $42.3 $70.2 
Additions2.6 — 2.6 
Exchange difference0.1 — 0.1 
Net balance at September 26, 2021$30.6 $42.3 $72.9 
In millionsGas CylindersElektronTotal
At January 1, 2022$27.6 $42.1 $69.7 
Exchange difference(0.6)(0.2)(0.8)
Balance at March 27, 2022$27.0 $41.9 $68.9 

Identifiable intangible assets consisted of the following:
September 26, 2021December 31, 2020
In millionsGrossAccumulated amortizationNetGrossAccumulated amortizationNet
Customer relationships$13.4 $(5.5)$7.9 $13.4 $(5.2)$8.2 
Technology and trading related8.3 (4.0)4.3 8.3 (3.7)4.6 
$21.7 $(9.5)$12.2 $21.7 $(8.9)$12.8 

 Customer relationshipsTechnology and trading relatedTotal
$M$M$M
Cost:   
At January 1, 202215.2 8.2 23.4 
Exchange movements— (0.1)(0.1)
At March 27, 202215.2 8.1 23.3 
Accumulated amortization:  
At January 1, 20225.7 4.0 9.7 
Provided during the year0.1 0.1 0.2 
At March 27, 20225.8 4.1 9.9 
Net book values:  
At January 1, 20229.5 4.2 13.7 
At March 27, 20229.4 4.0 13.4 

Identifiable intangible asset amortization expense was $0.7$0.2 million and $0.6$0.2 million for the first nine monthsFirst Quarters of 2022 and 2021 and 2020, respectively.

Intangible asset amortization expense during the remainder of 20212022 and over the next five years is expected to be approximately $0.2 million in 2021, $0.9$0.8 million in 2022 $0.9and $1.0 million in 2023, $0.9 million in 2024, $0.9 million in 2025 and $0.9 million in 2026.

per year respectively.
1210

9.    Debt

Debt outstanding was as follows:
In millionsSeptember 26, 2021December 31, 2020
4.88% Loan Notes due 2023$25.0 $25.0 
4.94% Loan Notes due 202625.0 25.0 
Revolving credit facility— 4.1 
Unamortized debt issuance costs(0.4)(0.7)
Total debt$49.6 $53.4 
Less current portion$— $— 
Non-current debt$49.6 $53.4 
In millionsMarch 27, 2022December 31, 2021
4.88% Loan Notes due 2023$25.0 $25.0 
4.94% Loan Notes due 202625.0 25.0 
Revolving credit facility36.9 10.8 
Unamortized debt issuance costs(1.0)(1.2)
Total debt$85.9 $59.6 
Less current portion$— $— 
Non-current debt$85.9 $59.6 
The weighted-average interest rate on the revolving credit facility was 1.63%2.13% for the first nine monthsFirst Quarter of 20212022 and 2.19% for the full-year 2020.2021.
The maturity profile of the Company's debt, excluding unamortized issuance costs and discounts, is as follows:
In millions20212022202320242025ThereafterTotal
Loan Notes due 2023$— $— $25.0 $— $— $— $25.0 
Loan Notes due 2026— — — — — 25.0 25.0 
Total debt$— $— $25.0 $— $— $25.0 $50.0 
In millions20222023202420252026ThereafterTotal
Loan Notes due 2023— 25.0 — — — — 25.0 
Loan Notes due 2026— — — — 25.0 — 25.0 
Revolving credit facility— — — — 36.9 — 36.9 
Total debt$— $25.0 $— $— $61.9 $— $86.9 
Loan notes due and shelfrevolving credit 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 September 26, 2021.March 27, 2022.
The Loan Notes due 2023 and 2026, the ShelfRevolving Credit Facility and the Note Purchase and Private Shelf Agreement are governed by the lawlaws of the State of New York.
Senior Facilities Agreement
TheDuring the First Quarter of 2022, we drew down net $26.7 million on the Revolving Credit Facility, and the balance outstanding on the revolving credit facility at September 26, 2021,March 27, 2022, was nil,$36.9 million, and at December 31, 2020,2021, was $4.1$10.8 million, with $100.0$63.1 million undrawn at September 26, 2021March 27, 2022, and $145.9$89.2 million undrawn at December 31, 2020. During the second quarter of 2021 we reduced our Revolving credit facility to $100.0 million, from $150.0 million.
The current banking facilities are due to expire July 31, 2022, however, a new facility is expected to be signed on October 26, 2021. See Note 16 for additional information.
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 September 26, 2021.March 27, 2022.
In October 2021, the Company completed a refinancing of its existing Revolving Credit Facility, extending its tenure to 2026.


11

10.    Discontinued Operations
Our Superform aluminum superplastic forming business which operated from sitesoperating in the U.S. and the U.K, and our U.S. aluminum gas cylinder business werewas historically included in the Gas Cylinders segment. As a result of our decision to exit non-strategic aluminum product lines, we have reflected the results of operations of these businessesthis business as discontinued operations in the Condensed Consolidated Statements of Income for all periods presented.
Our U.S. aluminum gas cylinder business was sold in March 2021 for $21.0 million. Subsequent to We expect the First Quarter, $0.8 millionsale of working capital adjustments were made, resulting in final proceeds of $20.2 million.
In September 2021, our Superform U.K. business was sold for $4.1 million, made up of $3.5 million cash received and $0.6 million of non-contingent, deferred consideration,receivable by September 30, 2022.
We expect our Superform U.S business to be sold within the next twelve months.
13

10.    Discontinued Operations (continued)occur in 2022.
The assets and liabilities of the Superform U.S. business hashave been presented within Current assets held-for-sale and Current liabilities held-for-sale in the consolidated balance sheets for 2022 and 2021.
In 2021, and 2020. Ourour Superform U.K. business was also disclosed within assets and U.S. aluminum gas cylindersliabilities held-for-sale. The business along with our Superform U.S business has been presented within Current assets held-for-sale and Current liabilities held-for-salewas sold in 2020. The Company has determined that the carrying value of the held-for-sale assets is recoverable and as a result no loss allowances have been recognized.September 2021.
Results of discontinued operations were as follows:
Third QuarterYear-to-date
In millions2021202020212020
Net sales$4.9 $12.7 $19.5 $41.0 
Cost of goods sold(4.7)(13.3)(20.4)(40.4)
Gross profit / (loss)$0.2 $(0.6)$(0.9)$0.6 
Selling, general and administrative expenses(1.4)(1.4)(3.1)(4.1)
Restructuring charges— (0.1)— (0.1)
Other income— 2.3 — 2.3 
Operating (loss) / profit$(1.2)$0.2 $(4.0)$(1.3)
Tax credit0.5 — 1.2 — 
Net (loss) / income$(0.7)$0.2 $(2.8)$(1.3)

The earnings per share for discontinued operations for the first nine months of 2021 and 2020 was $0.14 and a loss of $0.05, respectively. The positive result in 2021 was the result of the $6.6 million gain on disposition of discontinued operations, partially offset by the $2.8 million loss from operations.
First Quarter
In millions20222021
Net sales$1.7 $9.7 
Cost of goods sold(1.6)(10.1)
Gross profit / (loss)$0.1 $(0.4)
Selling, general and administrative expenses(0.2)(1.4)
Operating loss$(0.1)$(1.8)
Tax credit— 0.2 
Net loss$(0.1)$(1.6)

In the First Quarter of 2021, the Company sold its U.S. aluminum gas cylinders business for $20.2$21.0 million, after working capital adjustments, which resulted in a gain on sale of $6.7$7.5 million, net of a $2.0 million tax charge, which was recognized in the First Quarter of 2021.

In the ThirdSecond Quarter of 2021, the Company recordedthere was a $0.1 million loss on the sale of the Superform U.K business, see below table. There was an additional $0.4 million true up to working capital in relationadjustment, reducing the purchase price to $20.6 million and the Grahamgain on disposal resulting in a total $0.5 million loss on disposition in the quarter.
Third Quarter
In millions2021
Cash consideration received$3.5
Deferred consideration payable0.6
Less
Net assets sold(4.2)
Gross loss on disposition(0.1)
Provision for income taxes—
Net loss on disposition$(0.1)


14

10.    Discontinued Operations (continued)to $7.1 million.
The assets and liabilities classified as held-for-sale related to discontinued operations were as follows:
Held-for-sale assetsSeptember 26,December 31,
In millions20212020
Property, plant and equipment$1.1 $7.9 
Right-of-use-assets from operating leases0.4 3.1 
Inventory2.7 12.6 
Accounts and other receivables2.6 8.7 
Held-for-sale assets$6.8 $32.3 
Held-for-sale liabilities
Accounts payable0.6 4.3 
Accrued liabilities0.1 1.5 
Other current liabilities1.0 5.6 
Held-for-sale liabilities$1.7 $11.4 

Held-for-sale assetsMarch 27,December 31,
In millions20222021
Right-of-use-assets from operating leases3.2 — 
Inventory2.7 2.7 
Accounts and other receivables1.8 2.1 
Held-for-sale assets$7.7 $4.8 
Held-for-sale liabilities
Accounts payable0.5 0.5 
Accrued liabilities0.1 0.1 
Other liabilities0.6 — 
Lease liabilities3.3 0.8 
Held-for-sale liabilities$4.5 $1.4 
Also included within assets held-for-sale but not disclosed as discontinued operations, in 2022 and 2021 are land and 2020 is 1 buildingbuildings valued at $4.9 million and $3.7 million, respectively, within our Elektron Segment.
The depreciation and amortization, capital expenditures and significant non-cash items were as follows:
Third QuarterYear-to-date
In millions2021202020212020
Cash flows from discontinued operations:
Depreciation$0.1 $0.2 $0.4 $0.8 
First Quarter
In millions20222021
Cash flows from discontinued operating activities:
Depreciation$— $0.2 
Cash balances are swept into the treasury entities at the end of each day, and these sweeps are recorded within operating cash flows in the statements of cash flows.
12

11.    Income Taxes
We manage our affairs so that we are centrally managed and controlled in the United Kingdom (“U.K.”) and therefore have our tax residency in the U.K. The provision for income taxes consists of provisions for the U.K. and international income taxes. We operate in an international environment with operations in various locations outside the U.K. Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates.
The effective income tax rate on continuing operations for the first none-monthsQuarter ended September 26, 2021,March 27, 2022, was 12.0%24.5%, compared to 28.1%21.1% for the first ine-monthsQuarter ended September 27, 2020. The 2021 rate has been impacted by a $2.8 million deferred tax credit as a result of the enacted increase in the U.K. tax rate from 19% to 25% from April 2023.March 28, 2021.

15

12.    Share Plans

Total share-based compensation expense for the quarters ended September 26,March 27, 2022, and March 28, 2021, and September 27, 2020, was as follows:
Third QuarterYear-to-date
In millions2021202020212020
Total share-based compensation charges$0.8 $0.8 $2.2 $2.1 
First Quarter
In millions20222021
Total share-based compensation charges$0.2 $0.5 
In March 2021,2022, 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 110,000167,400, and the weighted average fair value of options granted in 20212022 was estimated to be $21.14$17.82 per share.
Also in March 2021,2022, approximately 45,00017,000 awards were granted based on the achievement of total shareholder return targets from the period January 1, 20182019, to December 31, 2020. The2021. 50% of these awards vested immediately upon grant.
In June 2021, we issued our annual share-based compensation grants undergrant, with the Luxfer Holdings PLC Non-Executive Directors' Equity Incentive Plan. The total number of awards issued was 19,184 and the weighted-average fair value of options granted was estimated to be $21.69 per share.remaining 50% vesting in March 2023.
The following table illustrates the assumptions used in deriving the fair value of share options granted during 2021the First Quarter of 2022 and the year-ended December 31, 2020:2021:
20212020
Dividend yield (%)3.39 - 4.093.39 - 4.09
Expected volatility range (%)36.48 - 56.2836.48 - 56.28
Risk-free interest rate (%)0.18 - 0.490.18 - 0.49
Expected life of share options range (years)0.50 - 4.000.50 - 4.00
Forfeiture rate5.00 5.00 
Weighted average exercise price ($)$1.00$1.00
Model usedBlack-Scholes & Monte-CarloBlack-Scholes & Monte-Carlo
First QuarterYear ended December 31,
20222021
Dividend yield (%)2.27 02.27 0
Expected volatility range (%)42.80 - 59.0342.80 - 59.03
Risk-free interest rate (%)0.04 - 0.240.04 - 0.24
Expected life of share options range (years)0.50 - 4.000.50 - 4.00
Forfeiture rate (%)5.005.00
Weighted average exercise price ($)$1.00$1.00
Models usedBlack-Scholes & Monte-CarloBlack-Scholes & Monte-Carlo
The expected life of the share options is based on historical data and current expectations, and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

1613

13.    Shareholders' Equity
(a) Dividends paid and proposed
Third QuarterYear-to-date
In millions2021202020212020
Dividends declared and paid during the year:
Interim dividend paid February 5, 2020 ($0.125 per ordinary share)$— $— $— $3.4 
Interim dividend paid May 6, 2020 ($0.125 per ordinary share)— — — 3.4 
Interim dividend paid August 5, 2020 ($0.125 per ordinary share)— 3.4 — 3.4 
Interim dividend paid February 4, 2021 ($0.125 per ordinary share)— — 3.4 — 
Interim dividend paid May 5, 2021 ($0.125 per ordinary share)— — 3.4 — 
Interim dividend paid August 4, 2021 ($0.125 per ordinary share)3.4 — 3.4 — 
$3.4 $3.4 $10.2 $10.2 
In millions20222021
Dividends declared and paid during the year:
Interim dividend paid February 4, 2021 ($0.125 per ordinary share)$— $3.4 
Interim dividend paid February 2, 2022 ($0.125 per ordinary share)3.4 — 
Interim dividend declared March 10, 2022, and to be paid May 4, 2022 : ($0.130 per ordinary share)3.6 $— 
7.0 3.4 

In millions20212020
Dividends declared and paid after the quarter end (not recognized as a liability at the quarter end):
Interim dividend declared October 5, and to be paid November 4, 2020 ($0.125 per ordinary share)$— $3.4 
Interim dividend declared October 5, and to be paid November 3, 2021 ($0.125 per ordinary share)3.4 — 
$3.4 $3.4 
In millions20222021
Dividends declared and paid after the quarter end (not recognized as a liability at the quarter end):
Interim dividend declared April 5 2021, and paid May 5, 2021: ($0.125 per ordinary share)$— $3.4 
$— $3.4 

Based on a share buyback program approved by shareholders at the 2021 Annual General Meeting, in the Third Quarter the company purchased 88,734 total shares for $1.9 million; year to date purchases were 126,734 total shares for $2.8 million. Of the 126,734 repurchased in the year, 56,000 have been canceled with the remaining 70,374 retained within Treasury shares.
17

14.    SegmentalSegment Information
We classify our operations into 2 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 4 identified business units, which aggregate into the 2 reportable segments. Luxfer Gas Cylinders forms the Gas Cylinders segment, and Luxfer MEL Technologies, Luxfer Magtech and Luxfer Graphic Arts aggregate into the Elektron segment. The Superform business unit used to aggregate into the Gas Cylinders segment but is now recognized as discontinued operations. A summary of the operations of the segments is provided below:
Gas Cylinders segment
Our Gas Cylinders segment manufactures and markets specialized products using composites and aluminum, including pressurized cylinders for use in various applications including self-contained breathing apparatus (SCBA) for firefighters, containment of oxygen and other medical gases for healthcare, alternative fuel vehicles, and general industrial.
Elektron segment
Our Elektron segment focuses on specialty materials based primarily on magnesium and zirconium, with key product lines including advanced lightweight magnesium alloys with a variety of uses across a variety of industries; magnesium powders for use in countermeasure flares, as well as heater meals; photoengraving plates for graphic arts; and high-performance zirconium-based materials and oxides used as catalysts and in the manufacture of advanced ceramics, fiber-optic fuel cells, and many other performance products.
Other
Other primarily represents unallocated corporate expense and includes non-service related defined benefit pension cost / credit.
Management monitors the operating results of its reportable segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated by the chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments as the CEO, using adjusted EBITA(1) and adjusted EBITDA, which we defined as segment income and are based on operating income adjusted for share based compensation charges; loss on disposal of property, plant and equipment; restructuring charges; impairment charges; acquisition and disposal related gains and costs; other charges; depreciation and amortization; and unwind of the discount on deferred consideration.
1 Adjusted EBITA is adjusted EBITDA less depreciationdefined benefit pension credit.
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.
(1) Adjusted EBITA is adjusted EBITDA less depreciation.

14

14.    Segment Information (continued)
Financial information by reportable segment for the Third QuarterQuarters ended March 27, 2022, and year-to-date ended September 26,March 28, 2021, and September 27, 2020, is included in the following summary:
Net salesAdjusted EBITDA
Third QuarterYear-to-dateThird QuarterYear-to-date
In millions20212020202120202021202020212020
Gas Cylinders segment$45.6 $32.3 $128.3 $107.0 $5.4 $7.1 $16.7 $16.6 
Elektron segment45.6 45.4 147.1 135.7 8.4 6.6 32.1 23.5 
Consolidated$91.2 $77.7 $275.4 $242.7 $13.8 $13.7 $48.8 $40.1 
Net salesAdjusted EBITDA
First QuarterFirst Quarter
In millions2022202120222021
Gas Cylinders segment$42.4 $36.2 $2.7 $6.0 
Elektron segment54.6 49.0 13.4 11.7 
Consolidated$97.0 $85.2 $16.1 $17.7 
Depreciation and amortizationRestructuring charges
First QuarterFirst Quarter
In millions2022202120222021
Gas Cylinders segment$1.4 $0.9 $1.4 $0.5 
Elektron segment2.3 2.5 — 0.9 
Consolidated$3.7 $3.4 $1.4 $1.4 
Depreciation and amortization(1)
Restructuring charges
Third QuarterYear-to-dateThird QuarterYear-to-date
In millions20212020202120202021202020212020
Gas Cylinders segment$1.4 $1.0 $3.9 $2.8 $0.5 $3.3 $1.1 $6.7 
Elektron segment2.4 2.4 7.3 7.2 — 0.9 1.0 1.0 
Other— — — — — — — 0.1 
Consolidated$3.8 $3.4 $11.2 $10.0 $0.5 $4.2 $2.1 $7.8 
Total assetsCapital expenditures
First QuarterDecember 31,First Quarter
In millions2022202120222021
Gas Cylinders segment$140.0 $122.7 $0.2 $0.3 
Elektron segment222.5 206.5 0.8 1.2 
Other44.3 34.8 — — 
Discontinued operations7.7 4.8 — — 
Consolidated$414.5 $368.8 $1.0 $1.5 

(1) Depreciation and amortization includes the expense recognized in relation to assets, and excludes amortization of debt issue costs.
18

14.    Segmental Information (continued)
Total assetsCapital expenditures
September 26,December 31,Third QuarterYear-to-date
In millions202120202021202020212020
Gas Cylinders segment$128.3 $99.7 $0.2 $0.7 $0.7 $1.7 
Elektron segment194.8 189.7 1.8 0.9 4.9 3.4 
Other40.3 24.7 — — — — 
Discontinued operations6.9 32.3 — — — — 
Consolidated$370.3 $346.4 $2.0 $1.6 $5.6 $5.1 

Property, plant and equipment, net
September 26,December 31,
In millions20212020
U.S.$47.4 $44.3 
United Kingdom36.3 36.6 
Canada3.4 3.7 
Rest of Europe1.1 1.1 
Asia Pacific0.3 0.3
$88.5 $86.0 

Property, plant and equipment, net
First QuarterDecember 31,
In millions20222021
United States$44.0 $46.9 
United Kingdom34.6 36.0 
Canada3.2 3.3 
Rest of Europe1.0 1.0 
Asia Pacific0.2 0.3 
$83.0 $87.5 
The following table presents a reconciliation of Adjusted EBITDA to net income from continuing operations:
Third QuarterYear-to-date
In millions2021202020212020
Adjusted EBITDA$13.8 $13.7 $48.8 $40.1 
Other share-based compensation charges(0.8)(0.8)(2.2)(2.1)
Depreciation and amortization(3.8)(3.4)(11.2)(10.0)
Restructuring charges(0.5)(4.2)(2.1)(7.8)
Acquisition and disposal related costs(0.6)— (1.5)(0.2)
Other charges— — (1.1)— 
Defined benefits pension credit0.6 1.1 1.8 3.3 
Interest expense, net(0.8)(1.2)(2.4)(3.5)
Provision for income taxes(1.9)(2.8)(3.6)(5.6)
Net income from continuing operations$6.0 $2.4 $26.5 $14.2 

First Quarter
In millions20222021
Adjusted EBITDA$16.1 $17.7 
Other share-based compensation charges(0.2)(0.5)
Depreciation and amortization(3.7)(3.4)
Restructuring charges(1.4)(1.4)
Acquisition costs(0.2)(0.2)
Other charges— (1.1)
Defined benefits pension credit0.4 0.6 
Interest expense, net(0.8)(0.8)
Provision for income taxes(2.5)(2.3)
Net income from continuing operations$7.7 $8.6 

1915

14.    Segmental Information (continued)
The following tables present certain geographic information by geographic region for the ThirdFirst Quarter ended March 27, 2022, and year-to-date ended September 26, 2021, and September 27, 2020:March 28, 2021:
Net Sales(1)
Third QuarterYear-to-date
2021202020212020
$MPercent$MPercent$MPercent$MPercent
United States$49.4 54.2 %$41.1 52.9 %$151.8 55.1 %$132.8 54.8 %
U.K.6.5 7.1 %4.1 5.3 %17.5 6.4 %13.8 5.7 %
Germany5.1 5.6 %3.1 4.0 %13.2 4.8 %11.0 4.5 %
France2.6 2.9 %4.9 6.3 %9.3 3.4 %14.0 5.8 %
Italy3.5 3.8 %1.9 2.4 %9.5 3.4 %8.1 3.3 %
Top five countries$67.1 73.6 %$55.1 70.9 %$201.3 73.1 %$179.7 74.1 %
Rest of Europe4.9 5.4 %5.8 7.5 %19.0 6.9 %18.1 7.5 %
Asia Pacific13.7 15.0 %12.1 15.6 %38.1 13.8 %32.9 13.5 %
Other (2)
5.5 6.0 %4.7 6.0 %17.0 6.2 %12.0 4.9 %
$91.2 $77.7 $275.4 $242.7 
Net Sales(1)
20222021
$MPercent$MPercent
United States$55.3 57.0 %$46.7 54.9 %
U.K.5.4 5.6 %5.3 6.2 %
Germany4.5 4.6 %3.7 4.3 %
Italy3.5 3.6 %3.6 4.2 %
France2.3 2.4 %3.3 3.9 %
Top five countries$71.0 73.2 %$62.6 73.5 %
Rest of Europe6.0 6.2 %7.1 8.3 %
Asia Pacific14.6 15.0 %11.0 12.9 %
Other (2)
5.4 5.6 %4.5 5.3 %
$97.0 $85.2 

(1) Net sales are based on the geographic destination of sale.
(2) Other includes Canada, South America, CentralLatin America and Africa.

15.     Commitments and Contingencies
Committed and uncommitted banking facilities
The Company had committed banking facilities of $100.0 million at September 26, 2021March 27, 2022, and $150.0December 31, 2021. Of these committed facilities, $36.9 million was drawn at March 27, 2022, and $10.8 million at December 31, 2020. Of these committed facilities, nil was drawn at September 26, 2021 and $4.1 million was drawn at December 31, 2020. The current banking facilities are due to expire July 31, 2022, however, a new facility is expected to be signed on October 26, 2021. See Note 16 for additional information.
The Company also had a separate (uncommitted) facility for lettersan additional $50.0 million of credit which at September 26, 2021 was £1.0 million ($1.4 million) and December 31, 2020 was £1.0 million ($1.3 million). None of these were utilized at September 26, 2021 and December 31, 2020, respectively.uncommitted facilities through an accordian provision.
The Company also has 2 separate (uncommitted) bondinguncommitted bank guarantee facilities, for bank guarantees, 1 denominated in GBP sterling of £4.5£0.5 million (2021: $6.2(2022: $0.7 million, 2020: $6.12021: $0.9 million), and 1 denominated in USD of $1.5$0.9 million (2020:(2021: $1.5 million). Of that dominated in GBP, £0.6£0.1 million ($0.80.2 million) and £1.0£0.1 million ($1.40.2 million) was utilized at September 26, 2021,March 27, 2022, and December 31, 2020,2021, respectively. Of that denominated in USD, $0.9 million was utilized at September 26, 2021March 27, 2022, and $0.8 million was utilized at December 31, 2020.2021, respectively.
The Company also has a $4.0 million separate overdraft facility of which none was drawn at September 26, 2021March 27, 2022, and at December 31, 2020. The Company has various uncommitted transitional banking and foreign exchange lines available for day-to-day operational purposes.

20

15.     Commitments and Contingencies (continued)2021.
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, 3 people were noted to have injuries such as loss of hearing. There was no major damage to assets of the customer. A claim has been launched by the 3 people who were injured in the incident. We have reviewed our quality control checks from around the time which the cylinder was produced and no instances of failures have been noted. 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, an alleged explosion occurred at a third-party waste disposal and treatment site in Boise,
Idaho, allegedlyreportedly causing property damage, personal injury, and one fatality. We had contracted with a service
company for removal and disposal of certain waste resulting from the magnesium powder manufacturing
operations at the Reade facility in Manchester,Lakehurst, New Jersey. We believe this service company, in turn, apparently
contracted with the third-party disposal company, at whose facility the explosion occurred, for treatment and
disposal of the waste. In November 2020, we were named as a defendant in 3 lawsuits in relation to the
incident – one1 by the third-party disposal company, one1 by the estate of the decedent, and one1 by an injured
employee of the third-party disposal company. At present, we have received insufficient information on the cause
of the explosion. We do not believe that we are liable for the incident, have asserted such, and, therefore, do not
currently expect this matter to have a material impact on the Company’s financial position or results of operations.
operations.

16. Subsequent Events
In October 2021, Luxfer has agreed a new five year, $100.0 million revolving credit facility, ("RCF") which is expected to become effective on October 26, 2021, with noNo material changes to the financial covenants but with improvements to other restrictive terms. The revised terms include an uncommitted, $50.0 million accordion facility.
The existing $50.0 million US private placement notes will also be amended in line with the new RCF terms. Additionally, the amendment includes a $50.0 million, uncommitted shelf facility available to issue long-term notes for up to three years from the effective date.events.
2116

Item 2.        Management's Discussion and Analysis of Financial Condition and Results of Operations
Information regarding forward-looking statements
This Interim Report on Form 10-Q contains certain statements, statistics and projections that are, or may be, forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Interim Report, as well as:
•general economic conditions, or conditions affecting demand for the services offered by us in the markets in which we operate, both domestically and internationally, being less favorable than expected;
•worldwide economic and business conditions and conditions in the industries in which we operate;
•ongoingpost-pandemic impact of COVID-19 and future pandemics;
•fluctuations in the cost and / or availability of of raw materials, labor and utilities;
•availability of essential inputs, including but not limitedutilities, as well as our ability to raw materials, transport, energy and labor;pass on cost increases to customers;
•currency fluctuations and other financial risks;
•our ability to protect our intellectual property;
•the significant amount of indebtedness we have incurred and may incur, and the obligations to service such indebtedness and to comply with the covenants contained therein;
•relationships with our customers and suppliers;
•increased competition from other companies in the industries in which we operate;
•changing technology;
•our ability to execute and integrate new acquisitions;
•claims for personal injury, death or property damage arising from the use of products produced by us;
•the occurrence of accidents or other interruptions to our production processes;
•changes in our business strategy or development plans, and our expected level of capital expenditure;
•our ability to attract and retain qualified personnel;
•restrictions on the ability of Luxfer Holdings PLC to receive dividends or loans from certain of its subsidiaries;
•regulatory, environmental, legislative and judicial developments; and
•our intention to pay dividends.
Please read the sections "Business" and"Business," "Risk factors"factors," included within the 20202021 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.
2217

About Luxfer
Luxfer Holdings PLC ("Luxfer," "the Company," "we," "our") is a global manufacturer of highly-engineered industrial company innovating niche applications in materials whichengineering. Luxfer focuses on value creation by using its broad array of technical know-how and proprietary technologies. Luxfer's high-performance productsmaterials, components and high-pressure gas containment devices are used in defense, first response and emergency response, healthcare, transportation and general industrial settings. For more information, visit www.luxfer.com.applications.
Key trends and uncertainties regarding our existing business
ImpactUpdate on ongoing challenging global macro environment and related impact on supply chain disruption
Demand from most end-markets we serve has continued to improve following the adverse impact of COVID-19 on operations

The global COVID-19 outbreak characterized by increased business uncertainty and broad based market weakness, had an adverse impact on our financial results during 2020 impacting demand across most of our end markets. We took a variety of actions during 2020 to help mitigate the financial impact, including executing additional cost savings measures, reducing our capital spending, initiating restructuring actions and proactively managing our working capital. Activityvolumes, notably in most of the end markets we serve has improved throughout 2021 year-to-date, although like-for-like sales are still tracking at around 10% below the pre-pandemic 2019 level. The2020. This sharp recovery in demand across the global macro environment has had business impacts, including increasedresulted in supply chain challenges characterized by significant increases in material cost inflation on key inputs (including magnesium, aluminum and carbon fiber), labor availability issues and energy and transport cost increases. Additionally, in the prior year we were faced with two critical suppliers of magnesium and zirconium respectively declaring force majeure, of which the former remains in place. The developing conflict in Ukraine which has resulted in punitive sanctions against the Russian Federation has further exacerbated the availability and price of certain raw materials and energy supplies. In response to the supply chain disruption, we have been successful in securing alternative sources of supply for key material inputs affected by force majeure. Furthermore, in the majority of cases, we are able to pass through inflation to our customers. Currently, our expectation is that the impact of material availability / inflation and energy cost inflation and labor and transport constraints will continue into at least into the fourth quartersecond half of 2021, with continuing uncertainty around2022; that we will be able to source sufficient material to meet demand and that in the majority of cases we expect to be able to pass on cost increases. However the outlook for 2022.remains highly uncertain with both the size and timing of future cost increases difficult to predict.

Luxfer’s top priority during this global pandemicImpact of conflict in Ukraine

The Russian invasion of Ukraine and ongoing military conflict which commenced on February 24, 2022, has resulted in massive displacement of the Ukrainian population and huge disruption to its economy. Wide-ranging sanctions have been imposed on the healthRussian Federation by the international community, targeting individuals, banks, businesses, funds transfers and well-beingimports and exports and are expected to have a significant adverse impact on Russia's economy as well as on international businesses active in the region. The impact on Luxfer is not expected to be significant as we have no direct operations in the region, and our sales to Russia and Ukraine combined typically represent less than one percent of total revenue by destination. Furthermore, neither country is a critical supplier of our employees, customers, shareholders,raw material needs, and while Russia is a major global exporter of magnesium, we are able to source the metal from various alternative locations, including China, Israel, Turkey and the communities in which we operate. The Company continues to monitor the COVID-19 situation closely, including subsequent constraints on supply, 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 manage supply constraints in order to satisfy demand from the most impactful parts of our business; (iii) expanding flexible work arrangements and policies, where practical, to maximize employee safety; and (iv) providing regular updates to our shareholders, employees, customers, and suppliers in a transparent and timely manner.

United States.

Operating objectives and trends
In 2021,2022, we expect the following operating objectives and trends to impact our business:
•Continuing proactive responseOrganic growth initiatives with particular focus on revenue from new products;
•Actions to the COVID-19 pandemic, including the health and well-being actions highlighted above, in addition to initiatives to stimulate demand for products, ensure continuity of supply of critical materials and focus on cost saving programs;services while safeguarding margins;
•DivestitureProactive response on health and well-being of non-strategic aluminum businesses (identified as discontinued operations) in the Gas Cylinders segment;employees post pandemic, including continuous improvement on safety;
•Refocus on productivity acceleration and growth recovery post COVID-19 as we capitalize on lean manufacturing initiatives and pursue faster product innovation;Targeted improvements in ESG standing through investment in new projects;
•Continued focus on recruiting and developing global talent and implementingdriving a high-performance culture; and
•Continued focus on improved operating cash generation with lowerleveraging our recent years' of restructuring activity and maintainingtargeting strong working capital performance.

23
18

CONSOLIDATED RESULTS OFFROM CONTINUING OPERATIONS
The consolidated results offrom continuing operations for the Third QuarterFirst Quarters of 20212022 and 20202021 of Luxfer were as follows:
Third Quarter% / point change
In millions202120202021 v 2020
Net sales$91.2 $77.7 17.4 %
Cost of goods sold(70.1)(58.8)19.2 %
Gross profit21.1 18.9 11.6 %
     % of net sales23.1 %24.3 %(1.2)
Selling, general and administrative expenses(10.6)(8.4)26.2 %
     % of net sales11.6 %10.8 %0.8 
Research and development(1.3)(1.0)30.0 %
     % of net sales1.4 %1.3 %0.1 
Restructuring charges(0.5)(4.2)(88.1)%
     % of net sales0.5 %5.4 %(4.9)
Acquisition and disposal related costs(0.6)— n/a
     % of net sales0.7 %— %0.7 
Operating income$8.1 $5.3 52.8 %
     % of net sales8.9 %6.8 %2.1 
Net interest expense(0.8)(1.2)(33.3)%
     % of net sales0.9 %1.5 %(0.6)
Defined benefit pension credit0.6 1.1 (45.5)%
     % of net sales0.7 %1.4 %(0.7)
Income before income taxes$7.9 $5.2 51.9 %
     % of net sales8.7 %6.7 %2.0 
Provision for income taxes(1.9)(2.8)(32.1)%
     Effective tax rate24.1 %53.8 %(29.7)
Net income$6.0 $2.4 150.0 %
     % of net sales6.6 %3.1 %3.5 









First Quarter% / point change
In millions202220212022 v 2021
Net sales$97.0 $85.2 13.8 %
Cost of goods sold(72.8)(60.0)21.3 %
Gross profit24.2 25.2 (4.0)%
     % of net sales24.9 %29.6 %(4.7)
Selling, general and administrative expenses(10.7)(10.6)0.9 %
     % of net sales11.0 %12.4 %(1.4)
Research and development(1.3)(0.8)62.5 %
     % of net sales1.3 %0.9 %0.4 
Restructuring charges(1.4)(1.4)— %
     % of net sales1.4 %1.6 %(0.2)
Acquisition-related costs(0.2)(0.2)— %
     % of net sales0.2 %0.2 %— 
Other charges— (1.1)n/a
     % of net sales— %1.3 %(1.3)
Operating income10.6 11.1 (4.5)%
     % of net sales10.9 %13.0 %(2.1)
Net interest expense(0.8)(0.8)— %
     % of net sales0.8 %0.9 %(0.1)
Defined benefit pension credit0.4 0.6 (33.3)%
     % of net sales0.4 %0.7 %(0.3)
Income before income taxes10.2 10.9 (6.4)%
     % of net sales10.5 %12.8 %(2.3)
Provision for income taxes(2.5)(2.3)8.7 %
     Effective tax rate24.5 %21.1 %3.4 
Net income / (loss)$7.7 $8.6 (10.5)%
     % of net sales7.9 %10.1 %(2.2)




24

The consolidated results of operations for the first nine months ended September 26, 2021 and September 27 2020 of Luxfer were as follows:
Year-to-date% / point change
In millions202120202021 v 2020
Net sales$275.4 242.7 13.5 %
Cost of goods sold(203.2)(181.7)11.8 %
Gross profit72.2 61.0 18.4 %
% of net sales26.2 %25.1 %1.1 
Selling, general and administrative expenses(33.9)(30.3)11.9 %
% of net sales12.3 %12.5 %(0.2)
Research and development(2.9)(2.6)11.5 %
% of net sales1.1 %1.1 %0.0 
Restructuring charges(2.1)(7.8)(73.1)%
% of net sales0.8 %3.2 %(2.4)
Acquisition and disposal related costs(1.5)(0.2)650.0 %
% of net sales0.5 %(0.1)%0.6 
Other charges(1.1)— n/a
% of net sales0.4 %— %0.4 
Operating income$30.7 $20.1 52.7 %
% of net sales11.1 %8.3 %2.8 
Net interest expense(2.4)(3.5)(31.4)%
% of net sales0.9 %1.4 %(0.5)
Defined benefit pension credit1.8 3.3 (45.5)%
% of net sales0.7 %1.4 %(0.7)
Income before income taxes and equity in net loss from affiliates$30.1 $19.9 51.3 %
% of net sales10.9 %8.2 %2.7 
Provision for income taxes(3.6)(5.6)(35.7)%
Effective tax rate12.0 %28.1 %(16.1)
Income before equity in net loss from affiliates$26.5 $14.3 85.3 %
% of net sales9.6 %5.9 %3.7 
Equity in loss of unconsolidated affiliates (net of tax)— (0.1)n/a
% of net sales— %— %n/a
Net income / (loss)$26.5 $14.2 86.6 %
% of net sales9.6 %5.9 %3.7 
2519

Net sales
The 17.4% and 13.5%passing through of material cost inflation, where not constrained by contract, accounted for approximately 11% of the 13.8% increase in consolidated net sales in the third quarter and first nine months, respectively, of 20212022 from 20202021. Furthermore, there was primarily the result of the continuing recovery in volumes adversely impacted by COVID-19 in the prior year, with the most significant factors being:benefit from:
•IncreasedAdditional contribution to net sales in Luxfer Gas Cylinders of $7.9$7.1 million and $17.1 million in the third quarter and first nine months respectively, due to the acquisition of Structural Composite IndustriesSCI at the end of the first quarter, 2021, which primarily impacted sales of cylinders used in aerospace and alternative fuels applications;
•IncreasedGrowth in sales of SCBA cylindersmagnesium powders used by first responders;in both military and commercial flares;
•Increased sales in Luxfer MEL Technologies ofour zirconium catalysis automotive products; and
•Increased demand for industrial aluminum cylinders, used in gas calibration.
These increases were partially offset by:
•Unfavorable foreign exchange variances of $1.2 million;
•Decreased sales of flameless ration heaters and chemical detection kits in Luxfer Magtech of magnesium powders for military applications;Magtech; and
•Favorable foreign exchange variancesLower sales in alternative fuel (AF) cylinders, excluding SCI, due to timing of $2.1 million in the quarter and $9.6 million in the year to date.orders.

Gross profit
The 1.1 percentage point increase in gross profit as a percentage of sales in the first nine months of 2021 from 2020 was primarily the result of the impact of our ongoing cost reduction program. This has been partially offset in the third quarter, which saw a 1.24.7 percentage point decrease in gross profit as a percentage of sales largely duein 2022 from 2021 was primarily the result of increased material and labor costs and other supply chain investments to the impact of inflationary cost pressuresovercome disruption, not fully offsetcovered by cost reduction program initiatives.price increases, as well as lower margins in SCI.

Selling, general and administrative expenses ("SG&A")
SG&A costs as a percentage of sales in the third quarter and first nine months of2022 from 2021 from 2020 increasedhas decreased by 0.8 and reduced by 0.21.4 percentage points respectively.largely due to the impact of price increases on revenue, as well as cost reduction programs effected in the prior year.

Research and development costs
Research and development cost as a percentage of sales increased by 0.10.4 percentage points in the third quarter of 20212022 relative to 2020, and was flat, again2021, or $0.5 million, as a percentage of sales, inactivity levels picked up as we recovered from the first nine months.COVID-19 economic downturn.

Restructuring charges
The $0.5 million and $2.1$1.4 million restructuring charge in 2022 relates solely to costs associated with the third quarter and first nine monthsclosure of Luxfer Gas Cylinders France, which ceased operations in 2019.
The $1.4 million restructuring charge in 2021 included $0.3$0.5 million and $1.1 million respectivelyas a result of further costs associated with the previously announced closure of Luxfer Gas Cylinders France, and waswhich were largely legal and professional fees. The nine months of 2021 also includes $0.9 millionfees; and $0.9M of one-time employee termination costsbenefits in the Elektron division, largely in relation to the planned divestiture of our small Luxfer Magtech production facility in Ontario, Canada.
The $4.2 million and $7.8 million restructuring charge in the third quarter and first nine months of 2020 was predominantly ($3.3 million and $6.5 million respectively) the result of further costs associated with the announced closure of Luxfer Gas Cylinders France, including one-time employee costs and associated legal and professional fees. In addition we incurred one-time employee costs in relation to COVID-led cost saving programs largely affecting our Elektron Division, of $0.9 million and $1.3 million in the third quarter and first nine months of 2020 respectively.

Acquisition and disposal relatedAcquisition-related costs
Net costs of $0.6 million and $1.5 million incurred in the third quarter and first nine months of 2021 respectively primarily relate to the acquisition of Structural Composites Industries.
Acquisition related costs of $0.2 million in 20202022 and 2021 represents amounts incurred in relation to merger andthe acquisition ("M&A"), exploration activities net of a $0.1 million release of deferred contingent consideration.SCI.


26

Other charges
Other charges in the first nine monthsFirst Quarter of 2021 relates to the settlement of a class action lawsuit in the Gas Cylinders segment in relation to an alleged historic violation of the Californian Labor Code, concerning a Human Resources administration matter.



20

Net interest expense
Net interest expense of $0.8 million in the third quarter ofwas flat compared to 2021 reduced from $1.2 million in the third quarter 2020, largely due to the $25 million early repayment in December 2020 of the Loan Notes 2021. This also resulted in lower net interest expense of $2.4 million in the first nine months of 2021 relative to $3.5 million in the first nine months of 2020.as average debt levels were consistent year-over-year.

Defined benefit pension credit
The $0.5 million and $1.5$0.2 million decrease in defined benefit pension credit to $0.4 million in 2022 from $0.6 million and $1.8 million in the third quarter and first nine months of 2021 from $1.1 million and $3.3 million in 2020 is primarily due to the combined effect on the U.K. plan of lower projected asset returns and a higher post-2030 inflation projection in the U.K., partially offset by a fall in the discount rate.projection.

Provision for income taxes
The movement in the statutory effective tax rate from 28.1% in 2020, to 12.0%21.1% in 2021, to 24.5% in 2022 was impacted primarily due toby the impact of the enacted tax rate change in the U.K., which is due to rise from 19% to 25% in April 2023. The subsequent increase in the value of deferred tax assets related to our defined benefit pension plan resulted in a credit of $2.2 million recorded in our tax charge in the second quarter.geographic profit mix. When stripping out the impacteffect of this, as well as other less significant adjusting items, the non-deductible restructuring expenses, our adjusted effective tax rate has decreasedincreased to 21.2%22.0% in 20212022 from 22.1%20.4% in 2020, largely as a result of tax rate changes in the prior year affecting the valuation of net operating loss deferred tax assets, partially offset by changes in the profit mix by tax jurisdiction.
2021.


2721

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES FROM CONTINUING OPERATIONS
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 QuarterYear-to-date
In millions except per share data2021202020212020
Net income from continuing operations$6.0 $2.4 $26.5 $14.2 
Accounting charges relating to acquisitions and disposals of businesses:
     Amortization on acquired intangibles0.3 0.2 0.7 0.6 
     Acquisition and disposal related costs0.6 — 1.5 0.2 
Defined benefit pension credit(0.6)(1.1)(1.8)(3.3)
Restructuring charges0.5 4.2 2.1 7.8 
Other charges— — 1.1 — 
Share-based compensation charges0.8 0.8 2.2 2.1 
Other non-recurring tax items(1)
— — (2.2)— 
Income tax on adjusted items(0.4)0.1 (1.8)(0.4)
Adjusted net income$7.2 $6.6 $28.3 $21.2 
Adjusted earnings per ordinary share
Diluted earnings per ordinary share$0.21 $0.09 $0.94 $0.51 
Impact of adjusted items0.04 0.15 0.06 0.25 
Adjusted diluted earnings per ordinary share(2)
$0.26 $0.24 $1.01 $0.76 
First Quarter
In millions except per share data20222021
Net income$7.7 $8.6 
Accounting charges relating to acquisitions and disposals of businesses:
     Amortization on acquired intangibles0.2 0.2 
     Acquisition costs0.2 0.2 
Defined benefit pension credit(0.4)(0.6)
Restructuring charges1.4 1.4 
Other charges— 1.1 
Share-based compensation charges0.2 0.5 
Income tax on adjusted items(0.1)(0.5)
Adjusted net income$9.2 $10.9 
Adjusted earnings per ordinary share
Diluted earnings per ordinary share$0.28 $0.31 
Impact of adjusted items0.05 0.08 
Adjusted diluted earnings per ordinary share(1)
$0.33 $0.39 
(1)Other non-recurring tax items represents the impact of the recently enacted U.K. tax rate change (from 19% to 25% with effect from April 2023) on deferred tax assets related to our U.K. defined benefit pension plan.
(2) 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 QuarterYear-to-date
In millions2021202020212020
Adjusted net income$7.2 $6.6 $28.3 $21.2 
Add back:
     Other non-recurring tax items— — 2.2 — 
     Income tax on adjusted items0.4 (0.1)1.8 0.4 
     Provision for income taxes1.9 2.8 3.6 5.6 
     Net finance costs0.8 1.2 2.4 3.5 
Adjusted EBITA$10.3 $10.5 $38.3 $30.7 
     Depreciation3.5 3.2 10.5 9.4 
Adjusted EBITDA$13.8 $13.7 $48.8 $40.1 
First Quarter
In millions20222021
Adjusted net income$9.2 $10.9 
Add back:
     Income tax on adjusted items0.1 0.5 
     Provision for income taxes2.5 2.3 
     Net finance costs0.8 0.8 
Adjusted EBITA$12.6 $14.5 
     Depreciation3.5 3.2 
Adjusted EBITDA$16.1 $17.7 

2822

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 QuarterYear-to-date
In millions2021202020212020
Adjusted net income$7.2 $6.6 $28.3 $21.2 
Add back:
     Other non-recurring tax items— — 2.2 — 
     Income tax on adjusted items0.4 (0.1)1.8 0.4 
     Provision for income taxes1.9 2.8 3.6 5.6 
Adjusted income before income taxes$9.5 $9.3 $35.9 $27.2 
Adjusted provision for income taxes2.3 2.7 7.6 6.0 
Adjusted effective tax rate24.2 %29.0 %21.2 %22.1 %
First Quarter
In millions20222021
Adjusted net income$9.2 $10.9 
Add back:
     Income tax on adjusted items0.1 0.5 
     Provision for income taxes2.5 2.3 
Adjusted income before income taxes$11.8 $13.7 
Adjusted provision for income taxes2.6 2.8 
Adjusted effective tax rate22.0 %20.4 %

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 share based compensation charges; loss on disposal of property, plant and equipment, restructuring charges; impairment charges; acquisition and disposal related gains and costs; other charges; and depreciation and amortization.amortization; and unwind of discount on deferred consideration. A reconciliation to net income and taxes can be found in Note 14 to the condensed consolidated financial statements.

GAS CYLINDERS
The net sales and adjusted EBITDA for Gas Cylinders were as follows:
Third Quarter% / point changeYear-to-date% / point change
In millions202120202021 v 2020202120202021 v 2020
Net sales$45.6 $32.3 41.2 %$128.3 $107.0 19.9 %
Adjusted EBITDA5.4 7.1 (23.9)%16.7 16.6 0.6 %
     % of net sales11.8 %22.0 %(10.2)13.0 %15.5 %(2.5)
First Quarter% / point change
In millions202220212022 v 2021
Net sales$42.4 $36.2 17.1 %
Adjusted EBITDA2.7 6.0 (55.0)%
     % of net sales6.4 %16.6 %(10.2)
Net sales
The 41.2% and 19.9%17.1% increase in Gas Cylinders sales in the third quarter and first nine months, respectively, of2022 from 2021 from 2020 was primarily the result of:
•Increased sales of $7.9$7.1 million and $17.1 million in the third quarter and first nine months respectively, due to the acquisition of Structural Composite IndustriesSCI at the end of the first quarter of 2021, which has positively impacted sales of cylinders used in aerospace and alternative fuels ("AF") applications;
•Increased sales of SCBA cylinders used by first responders; and
•Increased sales of cylinders for gas calibration and other industrial applications.applications;
These decreases were partially offset by lower AF sales, excluding SCI, due to timing of orders and unfavorable foreign exchange of $0.4 million.

Adjusted EBITDA
The 10.2 percentage point decrease in adjusted EBITDA for Gas Cylinders as a percentage of net sales in 2022 from 2021 was primarily the third quarterresult of 2021 relative to 2020 is primarily due tothe losses incurred by the recently acquired SCI business. There was a 2.5 percentage point decrease in profitability in the first nine months of 2021 from 2020.


business and supply chain inflation not fully covered by price rises.


2923

ELEKTRON
The net sales and adjusted EBITDA for Elektron were as follows:
Third Quarter% / point changeYear-to-date% / point change
In millions202120202021 v 2020202120202021 v 2020
Net sales$45.6 $45.4 0.4 %$147.1 $135.7 8.4 %
Adjusted EBITDA8.4 6.6 27.3 %32.1 23.5 36.6 %
     % of net sales18.4 %14.5 %3.9 21.8 %17.3 %4.5 
First Quarter% / point change
In millions202220212022 v 2021
Net sales$54.6 $49.0 11.4 %
Adjusted EBITDA13.4 11.7 14.5 %
     % of net sales24.5 %23.9 %0.6 
Net sales
The 0.4% and 8.4%11.4% increase in Elektron sales in the third quarter and first nine months, respectively, of2022 from 2021 from 2020 was primarily the result of a partial recovery from the COVID-19 related disruption in the prior year, including:of:
•Increased sales of zirconium-based automotive catalysts;
•Increased sales of Luxfer Magtech magnesium powders supplied for military applications;and commercial flares; and
•IncreasedGrowth in sales of zirconium products including auto-catalysis.
These increases were partially offset by:
•Decrease in sales of flameless ration heaters and chemical detection kits in Luxfer Graphic Arts photo-engraving plates.Magtech; and
•Unfavorable foreign exchange movements of $0.8 million

Adjusted EBITDA
The 3.9 and 4.50.6 percentage point increase in adjusted EBITDA for Elektron as a percentage of net sales in the third quarter and first nine months respectively of2022 from 2021 from 2020 was primarily the result of the partial recovery in volumes impactedprice increases partially offset by the pandemic in the prior year, characterized by improved product sales mix and continuing benefit from cost saving measures.supply chain inflation.

LIQUIDITY AND CAPITAL RESOURCES
Our liquidity requirements arise primarily from obligations under our indebtedness, capital expenditures, acquisitions, the funding of working capital and the funding of hedging facilities to manage foreign exchange and commodity purchase price risks. We meet these requirements primarily through cash flows from operating activities, cash deposits and borrowings under the Revolving Credit Facility and accompanying ancillary hedging facilities and the Loan Notes due, 2023 and 2026. Our principal liquidity needs are:
•funding acquisitions, including deferred contingent consideration payments;
•capital expenditure requirements;
•payment of shareholder dividends;
•servicing interest on the Loan Notes, which is payable at each quarter end, in addition to interest and / or commitment fees on the Senior Facilities Agreement;
•working capital requirements, particularly in the short term as we aim to safeguard the business from supply chain constraints, as well as to achieve organic sales growth; and
•hedging facilities used to manage our foreign exchange and aluminum purchase price risks.
From time to time, we consider acquisitions or investments in other businesses that we believe would be appropriate additions to our business.
The current banking facilities are due to expire July 31, 2022, however, a new facility is expected to be signed on October 26, 2021. See Note 16 of Item 1. Financial Statements and Supplementary Data for additional information.
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.
3024

We have been in compliance with the covenants under the Note Purchase and Private Shelf AgreementLoan Notes and the Senior Facilities Agreement throughout all of the quarterly measurement dates from inceptionand including September 30, 2011, to September 26, 2021.March 27, 2022.
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 provided byused in operating activities was $34.1$9.3 million forin the first nine months in 2021.quarter of 2022. It was primarily related to net income from operating activities, offset by a significant increase in working capital related to inventory build to protect supply chain, and net of the following non-cash items: depreciation and amortization, pension contributions and net changes to assets and liabilities.
Cash provided bygenerated from operating activities was $36.7$15.2 million in the first nine monthsquarter of 2020.2021. It was primarily related to net income 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 $1.2$1.0 million forin the first nine monthsquarter of 2021,2022, compared to net cash used forprovided by investing activities of $4.5 million in 2020.The movement was primarily due to acquisition and disposal activity. There was $20.2 million and $3.5 million of proceeds received from the divestiture of our U.S. aluminum gas cylinder facility and our Superform UK business respectively, partially offset by the $19.3 million acquisition of Structural Composite Industries. In addition, capital expenditures decreased from $5.8$0.3 million in the first nine monthsquarter of 2020,2021. The movement was due to $5.6acquisitions and disposals which occurred in 2021, there were no such events in the first quarter of 2022. In addition, capital expenditure decreased from $1.4 million in 2021.the first quarter of 2021, to $1.0 million in the first quarter of 2022. We anticipate capital expenditures for fiscal 2022 to be approximately $10 million to $12 million.
Financing activities
In the first nine months of 2021,2022, net cash used forprovided from financing activities was $19.3$21.4 million (2020: $27.3 million)(2021: $14.8 million inflow). We made net repaymentsdrawdowns on our banking facilities of $nil (2020: $16.5$26.7 million repayment)(2021: $19.5 million drawdown) and dividend payments of $10.2$3.4 million (2020: $10.2(2021: $3.4 million), equating to $0.375$0.125 per ordinary share. In 2020 we received $1.1 million in relation to proceeds from sales of shares, no shares have been sold in 2021. In addition, we paid out $1.9 million (2020: $1.3 million) in settling share based compensation.
Based on aextended our share buyback program approved by shareholders at the 2020 Annual General Meeting,announced in 2021, purchasing 60,100 ordinary shares totaling $1.5 million in the Third Quarter the company purchased 88,734 total shares for $1.9 million; year to date purchases were 126,734 total shares for $2.8 million. Of the 126,734 repurchased in the year, 56,000 have been canceled with the remaining 70,734 retained within Treasury shares.


31

Capital Resources
Dividends
We paid year-to-date dividends in 2021first quarter of $10.22021. On March 10, 2022 we declared a $3.6 million (2020: $10.2 million year-to-date),dividend, or $0.375$0.13 per ordinary share.share, to be paid May 4, 2022.
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 international accounting standards in conformity with the requirements of the Companies Act 2006,and UK-adopted International Accounting Standards, which differ in some respects from 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.
25

Contractual obligations
The following summarizes our significant contractual obligations that impact our liquidity:
 Payments Due by Period
In millionsTotalLess than
1 year		1 – 3
years		3 – 5
years		After
5 years
Contractual cash obligations     
Loan Notes due 2023$25.0 $— $25.0 $— $— 
Loan Notes due 202625.0 — — 25.0 — 
Obligations under operating leases21.3 1.3 6.0 4.1 9.9 
Capital commitments0.7 0.7 — — — 
Interest payments8.0 2.5 3.4 2.1 — 
Total contractual cash obligations$80.0 $4.5 $34.4 $31.2 $9.9 
The were no drawings at September 26, 2021 on the Revolving Credit Facility.
 Payments Due by Period
 TotalLess than
1 year		1 – 3
years		3 – 5
years		After
5 years
 (in $ million)
Contractual cash obligations     
Loan Notes due 2023$25.0 $— $25.0 $— $— 
Loan Notes due 202625.0 — — 25.0 — 
Revolving credit facility36.9 — — 36.9 — 
Obligations under operating leases28.7 4.8 8.8 6.5 8.6 
Capital commitments1.0 1.0 — — — 
Interest payments21.9 4.1 10.1 2.3 5.4 
Total contractual cash obligations$138.5 $9.9 $43.9 $70.7 $14.0 
Off-balance sheet measures
At September 26, 2021,March 27, 2022, we had no off-balance sheet arrangements other than the two bonding facilitiesthose disclosed in Note 15.15 to the consolidated financial statements.

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 20202021 Annual Report on Form 10-K, filed with the SEC on March 2, 2021,February 24, 2022, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our consolidated financial statements.






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Item 3.        Quantitative and qualitative disclosures about market risk
There have been no material changes in our market risk during the first nine monthsquarter ended September 26, 2021.March 27, 2022. For additional information, refer to Item 7A of our 20202021 Annual Report on Form 10-K, filed with the SEC on March 2, 2021.February 24, 2022.

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 September 26, 2021,March 27, 2022, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective, at a reasonable assurance level, as of the quarter ended September 26, 2021,March 27, 2022, to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter and year-to-date period ended September 26, 2021,March 27, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.        Legal Proceedings
The Company is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized in Note 15 (commitments and contingencies) to the consolidated financial statements in ITEM 1. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse impact is remote.

Item 1A.    Risk Factors

There have been no material changes from the risk factors previously disclosed in Item 1A. of our 20202021 Annual Report on Form 10-K.


Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
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Item 6.    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 Harding1934-Steve Webster
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-Steve Webster
101    The financial statements from the Company’s Interim Report on Form 10-Q for the quarter and year ended ended September 26, 2021,March 27, 2022, 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.

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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)
OctoberApril 25, 20212022



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