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Luxfer (LXFR)

Participants
Heather Harding Chief Financial Officer
Alok Maskara Chief Executive Officer
Christopher Moore CJS Securities
Craig Irwin ROTH Capital Partners
Sarkis Sherbetchyan B. Riley Securities
Michael Leshock KeyBanc Capital Markets
Call transcript
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Operator

Good morning. My name is Lisa, and I'll be your conference operator today. Welcome to Luxfer's 2021 Second Quarter Earnings Conference Call. All lines have been placed on mute. After the speakers' remarks, there will be a question-and-answer session.

the to turn from will I call Heather over Luxfer. Now, go ahead. please Heather,

Heather Harding

Today's results Thank release presentation quarter today's quarter I'm on outlined Luxfer's We're further to any Chief our a that me you, and Welcome risks Lisa. this second are Maskara, Alok slide second issued for the will Please any Chief details. Officer. company's by have statement a the webcast can be Luxfer's in refer provide are with today Please on begin, Safe is accessed presentation Luxfer's uncertainties. Officer. financial Harbor is made of reminder happy friendly you as XXXX at two reconciled subject the we references luxfer.com. us accompanied XXXX Harding, note, statements today. On to presentation. yesterday. performance Heather Executive Financial appendix today's we press the forward-looking financials future to before With call, to of call. earnings details to that And non-GAAP about in expected

Now, let the me Alok. over to turn call

Alok Maskara

Thanks, I messages and to quarter highlights second from three welcome, results. three turn everyone. our slide Heather, to key page. on or this highlight want Please

growth and our execution of benefit year-over-year our resulted second recovery First, the successful end quarter growth strong in combined acquisition, our XX% in with initiatives revenues. markets, in of SCI the

of XX% our of operational long-term. expanded adjusted and driven the Our remain volume XXX XX.X% $X.XX, improving to margins almost year. We from points by The excellence. and the was increase an EBITDA confident basis diluted prior in resulting margin EPS sustaining leverage

challenges. material talent timely to demand, customer's growing we despite availability the been supply ongoing Second, our have satisfy and able

diligently the disruption. any However, am work results. we shortages who remain secure our talent so can to on and and minimize material customer near-term we talent that continue attract grateful the I to about to team and impact of Luxfer material concerned persistent cautious

further debt to we operational with of strengthened a net in enabling Third, this and projects. excellence us organic and sheet maintain investments ratio quarter, EBITDA times, to accelerate our balance X.X growth

in buybacks. In remain increasing share addition, we approach and shareholder and to while through returns our dividends thoughtful acquisitions, will disciplined

we significant I'm the to in key the highlight initiatives. an update strategic fuel initiatives, During few turn four growth made on operational progress also and to for our going next quarter, pages. alternative Please on and slide them

will line. at We total the is addressable part about XX% product We addressable that expand million growth the We potential opportunity and XXXX. to our industry growth. alternative year, a have $XXX optimistic in this serve market are small to market by that for XX% of growing the total the our fuel to addition market, of offering capturing believe opportunity this per hence

our to to for a trucks. buses large value diameter by this proposition make driven growth had we We use range and our decades that hydrogen of range natural gas and use geographical XX-inch diameter increase expand for diameter We our investments relevant which experience product is from cylinders and reach to growing offer continue for capability. developed to compressed offerings during technology product of typically engineering proprietary sales. XX-inch typically Luxfer's line

beyond end established small, The planning we larger I want offer hydrogen, in positions that is offer XXXX. point solutions and grow fast in to temperature hydrogen diameter we market enables filling CNG a that is are high hydrogen, but For a larger cylinder version and XXXX. introduce hydrogen both. CNG for to to than faster and have both and become currently expected out

long-term commercial for alternative growth believe and hydrogen transportation. will customer's and fuel our We transport storage our that are public buses, of proud gas need We ability trucks, drive CNG solution meet bulk for to Luxfer. for

our is lines. growing fuel innovation While also fastest other and our line, cylinders product to for we growth product alternative drive in continue composite

to to niche Today, five. Luxfer applications is industries, product our including aerospace across in I industrial pursued of multiple highlight innovations the innovative line. of am world's and for magnesium excited share magnesium want recent opportunities I packaging. three range being magnesium alloys Turning by to Luxfer. a slide growth leading producer

for printing. expected graphic a enhance that For as magnesium penetrate more increase production total magnesium are reactions lightweight arts composites, we powders graphic magnesium alloy addressable materials, variety X-D the applications, such versus batteries, of innovation make engineered market launching life a used that increasing copper and alloy it manufacturing magnesium brass. on new plate This application. including the arts competitive of and other To the of application, will lithium-ion to is hydrogen focus greatly photoengraving and in wide are in Grignard for new we processes, are storage, die

customers manufacturing develop enhanced As recently billet process reach new has part innovation of capabilities, the core and that reducing own while to Luxfer carbon applications, slab Manchester location our into new our expanding is and footprint. casting

the In to through other plan our growth addition is focus product highlighted, success in investment lines. enabling of also transformation growth

fueled success, growth slide please of by to transformation example plan an turn For six.

customer transformation been transformation graphic the business plan and three consolidated stronger unit are Our embarking while deploy consolidating leadership, to one leader for started which past the included while and management accountability led us through now through a and years training graphic lead-times Luxfer attract two The the simplification, allowed the and art U.S. Luxfer phase. site the organization reduce improvement the and deploying purposefully on sites manufacturing savings. into continuous program. Luxfer generating growth to values delayering increase larger to business journey is arts The with going has

in cost resulted customer as and such operating on these delivery, changes time In lead-times improvements metrics, have safety, addition significant in quality. to savings, many

of processes, growth the greater As levels of through for a share market and customer the expected service and business result growth to growth customer these of improved and deployment is and talent innovation end excellence. poised global capture

seven. our proactively teams are summarized challenges focus, responding our to on manufacturing growth current maintaining to addition the In slide as

Luxfer in a of demand like facing set challenges the companies, difficult other up is Just ramping to production manufacturing meet recovery. many

force challenges, Our delivery two clock around In our material teams mitigate issues, working lead-times of critical our forcing quarter, U.S. which our material and to additional Attracting hourly is including availability. supply these for and raw address teams challenge, second declared critical serve the talent identify employees to customers. majeure, in are manufacturing breach diligently suppliers the to this suppliers a particularly remains

incentives structure talent. patterns, proactively are and adjusting actions, implementing our retain while shift We larger attract as wage such one-time to and

for progress, While remain impact the of remainder making cautious our we are year. of solid on disruptions about results the the we the

details turn financials. quarter call me let of Heather second the Now, over our for to

Heather Harding

review I'll quarter with the Thanks, summary the on end slide current by eight, our of start performance Alok. markets.

and for the performance an quarter, in products, in second well sales reminder, three sales the first impacted classified combination healthcare; fuel market, As same can our Sales the increase healthcare defense, XX.X% SCBA end quarter transportation sales recent aerospace as increased quarter and in grew sales. versus transportation, our positively automotive acquisition and and into markets, which defense, response of last market. end of end user second general the a this military SCI saw In is XX.X% for We a the increased alternative as first be industrial. response, by key demand year. to

market the industrial the of solid by relative XX.X% recovery. driven year, catalyst grew and the in within wider XXXX. we product filter end to quarter, of exceeded sales in gas, levels Every the our general the by market generated market in addition, end Sales recovery In we category auto quarter from particulate strong products, prior driven this growth increased adoption industrial industry second and

second our Now, summary please P&L turn to slide nine of quarter for a results.

sales general end the quarter little $XX.X increases increased contributor prior of in industrial The prior was products than for sales and favorable million or year. the a million quarter more versus year, markets. EBITDA XX%. quarter $XX SCI adjusted of second Growth transportation first XX.X% the from added X.X%. increased along acquisition defense Second in million both major $X the Consolidated response our XX.X% the and FX with a contribution in with

to leverage profitability price generation. to addition impact Overall, as with of sales offset efforts. operating and productivity cash In performance we ongoing reductions our net strong with strong strong inflation generate material part were we of on cost volumes, and able incremental growth, the achieved

our our quarter. general in over product grew of results Gas year. sales $XX.X to and Cylinder segment increased slide including with EBITDA coupled the sales $XX prior auto productivity on $X most XXX% Elektron products, from of was at sales leverage XX.X% XX. growth sales look million, in with impact pronounced segment the $XX.X catalysts. increase industrial million in SCI. let's The in million improvements from million, positive to XX% sales Now, increased additional falls [ph] the military with

productivity growth core posted was saw in to $X.X SCBA a benefits by flat demand strong year. losses addition, prior volumes. SCI specialty we industrial were products. lower for and and cylinders This offset EBITDA million our In

and our review ended slide key flow XX. We sheet. on let's the quarter balance a with Now stronger second sheet balance metrics cash

debt X.X Our of times. EBITDA improved leading to net debt to to ratio $XX.X a net position million,

impact of operating the level of capital $XX.X which SCI. quarter working XX% million Second significant unfavorable prior over the is improvement with finished at even sales, XX.X% or a the year's

delivered to $XX.X million. million On to first free strong plan is flow our trailing trailing free success XX% to focus. second earnings. maintain sales. total Generating a illustrates quarter, $XX transformation working Also flow on the quarter, of XX-month continued our total bringing we forward, cash basis, had a the start we we the million, a our in operating flow on a Going cash more achieved. really which XX% year-to-date adjusted in range targeted basis, of $X After cash than cash capital XX-month ROIC XX.X%. cash has

sheet cash generate consistent We are flow. have to strong a balance free well-positioned and

priorities allocation review Let's capital XX. our slide on

priorities Our capital allocation remain unchanged.

maintained for dividend to $X.X share expect for to organic second the repurchase $XXX,XXX spending cash also and initiated quarterly plan our internal while open million acquisitions share strategic remaining We growth. buybacks. quarter, our supplement our execution, we in value create In to of

Now, I'd like to XXXX updated review on guidance XX. slide our

our range performance, to full to we year compared of to previously $X.XX to guidance $X.XX Given narrowed our range the communicated $X.XX $X.XX. QX have

we well-positioned book order the and initiatives, supply through the world. We cash our remain this cautious the capture experienced restructuring. year our and cash healthy, execution confident excluding on disruptions management ability year material throughout targeting free given be shortages conversion flow XXX% for our full to We'll navigate recovery remains remain a challenges, to growth. freight labor ongoing While successfully continue the in

Report. wrap activities ISS. to categories. three the on has all been our acknowledged slide Luxfer brief ESG a Now, that our update year, efforts we by provide up, ESG like against pleased ESG the commitments improvements external in progress XX. that We're made XXXX meaningful before far made on wanted Throughout in to I rating continued we November, so firms have made environmental

equipment new facility in a that allowing our cost ground commissioned our us successfully During savings. generate them magnesium, the as reuse as materials well we second recycle at oil St. manufacturing from quarter, to processes, separates both waste Louis and

the addition, equitable address we XXXX our workplace key achieve of the will chain, supply are carbon carbon-intensive products, on committed environmental in In we for process us lifecycle goals. help of currently social to conducting the parts enabling of our most team us building remain In a identify and and our which our members. all category, analysis to diverse

the maintain part commitment, increased attract focus on during practices, and increased to workforce. awareness of we recruitment recruiting expect stronger and As targeted our process. that Through we've a diversity

IT heightened maintain a IT we risks, strong process. around awareness the and infrastructure cybersecurity and governance Given

website and cybersecurity take earlier attacks. actions networks IT published statement our systems policy As our IT this and month infrastructure, safeguard our the we that cyber on against such, to describes we

and serves So, niche Luxfer points. four to technology. slide like with wrap highlight I'd products up attractive proprietary market XX, to key on

by has structure the next years reducing and our results of transformation the focus accelerating plan will towards place The delivering and expansion. take cost higher our phase margin simplifying reshaping business, growth transformation and Our growth. deliberate on our final plan over portfolio few by

deploying and to have growth. toolkit improvement value additional Luxfer accelerate We drive the of plenty runway business shareholder to additional create our standard by excellence

always during facilities and for to thank all I pandemic, world Alok while our employees again, the customers first. putting safely once operating So, our the our want around

listening will I questions. and you Alok and take for thank So, now

Operator

[Operator Instructions] of line first Your with comes CJS Chris Moore Securities. question the from

Christopher Moore

Thanks for taking … a Maybe few just questions.

Alok Maskara

Chris. morning, Good

Christopher Moore

with start on kind alt fuel landscape. just of Maybe morning. Good the --

does that? hydrogen capabilities to a the unique with from know, just you Hexagon partnership the any I'm bit So, Hydrogen, kind for of little that that little bigger I a couple days expect on about the Luxfer? owns Luxfer talked trying and about just understand what partnership better create ago Octopus and a talk IP Maybe you bit tanks. of

Alok Maskara

Sure.

area fuel is Chris, One growth gas the the bulk of transportation. areas, key alternate

-- As working that's to Octopus production make one [ph] there we is bean point options from the lot process think about hydrogen, transport partnership demand get for the the step hydrogen of hydrogen there's would trailer. the increasing modules, the these it what that sure With to more carried and do. to be called green process of in haulers what's a And amount a than critical with hydrogen which able to current a them, much trucks would be usage. with your transportation it go the efficient on to create can together would by -- and

that forward pipelines While I because hydrogen. hydrogen, no huge IP into or are critical deliver or is infrastructure excited very about know-how, details in a used will be ones do proprietary builds use and wouldn't as we out step going we are get haulers you the creating Hydrogen be a I this point want partnerships the of of to else the to with that right believe for sort the announced know, Octopus. there are carry very like anything could that so that, in

Christopher Moore

maybe of QX. in leverage Is it. talk Gross XX% fiscal Got it beyond. XXXX helpful. a And margins someday? you Appreciate XX.X% Very get just the possible were little about a to could margin in gross bit to drivers and that.

Alok Maskara

our commit long-term if don't margin is some because it's get others, impact don't -- impact XX% in back a volume about times. gross terms. margin comes a which a to I pre-COVID that you typically was the I as our places and matter in in want SCI, quite we And which the still so Yeah. margins about a And than of lines existing like have products. Chris, I volume talked QX, to we our mean, fact a target product number, of XX% to products there's the back, of the which margin. new positive, on also few all aerospace of on already because remains seasonality, but there's detrimental but are higher significant our we to have mean, think there,

So, that's us. good putting think target it all I really a for together,

Christopher Moore

in revenue, How you growth see on kind relationship? how side? of it. at the mean, about OpEx OpEx the do in look of the that the I when kind you versus Got growth

Alok Maskara

we've as been OpEx to relatively can reduce see, has continued control Our past to years, flat you down facilities, the over G&A. as few

growing than the revenue. we that more of half mean, the will I forward, Going rate look at OpEx no

growing model Now, half a but there's going the obviously we quarter-over-quarter be growth. work variations and than here that the to there, Chris, that's more than kind OpEx that rate of on no revenue internal

Christopher Moore

That's from me. it. Last helpful. one Got

in at you of -- of declared your materials about had kind that two raw or majeure, your in talked critical point force status kind -- inventory Just specifics terms this suppliers any time of front. on the

Alok Maskara

Sure.

in our have They the own that's going majeure supplier Bay mine Richards declared that I be This news. suspended think Tinto the is -- us. have zircon And sand to public force supplier is to main very one and about operation. who we Rio concerned are supplies Africa.

secondary we catalyst, for they there primary suppliers, or supplier, industrial have medical we a is applications. concern a been While use catalyst, that auto have

can of one have that's We pull any out that's us always but in a customers we few to that had stage So we outlook. concerns bids half most. the serve second weeks at existing sure keep And our this to first. of make causing the conservatism inventory, new our

that's So right Chris. more that's concerning us one the now, to

can a in feel I can The suppliers think product get and think ramp they action our also like up where quickly. it's back concerning, and smaller other one, a supplier we it's I it's secondary

Christopher Moore

it leave guys. I'll right. I appreciate it All there.

Alok Maskara

Chris. Thanks,

Operator

comes Capital question with from ROTH Craig Partners. next line the of Irwin Your

Craig Irwin

thanks Hi. questions. Good morning my and taking for

Alok Maskara

Good morning, Craig.

Craig Irwin

you you execution us benefits, stronger always seems It this to of particularly end contribute other intangible SCI like quantify through Can in to quarter, the maybe an that's you towards thought? kind us. seeing at million of to integration that is of other assets? difficult might synergies Hi. execution off the that ahead million the to an out start, million contribution than of high your originally play talk Are $XX of strong range business things gave acquisition? $X $XX these Are sales you points or seeing

Alok Maskara

are million off That's SCI start. you The question. $XX then a talk to strong a $XX We'd is And was $X good and right. million quarter. great about QX to originally million within a

in than supply a So, from perspective, this year little we from million our $XX did the That's sort ongoing million material about of and better to overall expected a position challenges. given $XX range. talk

reception are well, Like being make work we've acquisition stability is focus getting we this our good to from lot and through customers is can and serve to delivery who from a current more better, able the to relationship. Our on-time got sure customer to customers getting benefiting our SCI.

So, days. stage, early still at this it's

You know pleased into the with what first quarter. it, I months mean? We three we are

such some same to we footprint. we currently reduce We as were and are space, buildings they buildings that have two the the taken occupying and existing have of one within immediate going consolidate announced steps

We business. the are putting capital into more

a a are going customers is the make sure better. work this situation our customers, expected, that things and slightly win-win So, for to And focus serve with as everybody. in our becomes short-term our

Craig Irwin

the is sustained particularly something this Excellent. see do likely be this at benefit, there? outperforming the help current EBITDA products that about which us are next margins over second understand, you in you Excellent. And Can that's are couple Elektron. My mixed improvement Which the environment? question in lifting to mix, quarters? products

Alok Maskara

want that? you do take Heather, to

Heather Harding

predict Morning, difficult to always It's Craig. Good morning. mix.

increase in length wouldn't about those one about in contributors talked the the think difficult of I you when our And products those And major can contributors I to industrial some a performed have mix. increased tend what onion, with range current would QX. I mix products we we military be is Elektron but happen segment, will great say also forward. going back those as want well. some because peel that's to the good in in are talked It's certainly to and mix product, what predict the very main benefit and quarter, the of tricky, well. However, of at that the

Craig Irwin

another us the And on your remind had there you like Okay. Excellent. what of few moving sort direction over the have you and return are are towards do in goals? key we a see rebound is You thing what invested the to progress Can quarters? monitor those think capital. things of what right next that very sort achieve But you'd that's the off trough. goals nice should to

Alok Maskara

the Craig, think about a business. capital-intensive Sure. done good with also returns. We has And very ensuring cleanup a I great not XX%. few over And I if to be any past the we executed, moved capital over new the in job, years, it, has right like that's the we that direction. deployed mean, are team portfolio that

this as the pre-COVID were I think we days. the in seen, past, you've there is and

Our And we that a two that's acquisitions level. be of get be key mean, come is metric that goal back the any use three. kind or I going year ROIC to to that in to in at would year of what's looking

we good have So progress.

are to to that, We with but get done. pleased are XX%. We want not we up

Craig Irwin

know the flow potentially quarter an may. potentially items I cash couple week, the can if free on free be tracking cash quarters? EBITDA you question, we over flow, can look cash Anything impact with Last timing. Were flow? on that there the this should And next out? were of at any based call of that how last Great. sort specific Free volatiles I

Heather Harding

take one. I'll Craig, that Yeah.

thoughtful could benefit nothing We capital, So, about to plan focus week. working transformation you to a some and the operating last quarter, I cash. have the since the in when tend second And to disciplined with see approach there's that I think our I pretty think on there. point of

wasn't quarter. So, say the anything pretty I the There the it end at would was disciplined of quarter. throughout unusual

is in restructuring. conversion free deliver cash excluding presentation, outlined and to our goal As I a flow, said the that we as XXX%

look to that be would back the continue we that So, of half our the expectation. at and over year

for can the it full certainly quarter-to-quarter, year. little a that's mentioned, be volatile, but you our As expectation

Craig Irwin

Great. continued result this Well, solid quarter. on really to congratulations look a forward success. We

Alok Maskara

Craig. Thanks,

Heather Harding

you. Thank

Operator

Sarkis Your question comes from Sherbetchyan the of line B. with Riley Securities.

Sarkis Sherbetchyan

morning, good Heather. Alok and Hey,

Alok Maskara

Sarkis. morning, Good

Heather Harding

Good morning.

Sarkis Sherbetchyan

And that Look, environment there quick few more. way stock of you few get Yeah. your on anticipating critical have had Hey, just given then that and potential shifts to forward? sense a here. to ones thoughts supply kind safety kind a any Any Are wanted your maybe I for going the maybe stock. I thinking? just adjustments if a of increasing of

Alok Maskara

Sure.

anything think working situation our but beyond chain further very zircon going XX% working to you see stage, most range else. capital. the are we our that the about it's of don't go about I for supply a Unfortunately, talk local I things of any XX% in we same fiber do XX%, capital stock Yes, talked is and given whether chain. our to supply At if carbon or we I increasing ourselves constraints the to clearly think or this supply back guidance, and us, in region. safety suppliers with

overseas, We year. but few time have stock increase don't but from but for it guidance full coming we the XX% we in effort flow have the making reaching conscious the past, to or for see for the XX%, cash constraint impact our a only by, that increase a mentioned I material we range should have have huge any ourselves ones, safety not

Sarkis Sherbetchyan

was helpful. are on? fiber, for That's alternative And the product that suppliers you looking other carbon

Alok Maskara

Yeah. Carbon supply fiber and kind entire of the and chain. associated resin, hardeners

through was are the of buy yes, carbon every force fiber, components with fiber the and manufacturing carbon the fiber, the multiple sources one of go So, we material, tanks. But into carbon situation concerned. including that we majeure

Sarkis Sherbetchyan

And be would Gotcha. resin? that the

Alok Maskara

Resin right. hardener. That's and

Sarkis Sherbetchyan

maybe of from slide think the to regards getting then, calling hearing look kind And your that stuff. in labor, Yeah. same resin, others of the Okay. out automation. know. Cool. some the I in so, on could I've good that's on No, you're been to accelerated some with investments

automate any homework you a do place of manufacturing an And potential on of kind mix opportunity at your obviously, look forward. of avoid of here, you think your really these at kind maybe versus further? some you going which to can better hiccups your look this worker processes you to is automation, human get playbook if As areas do in

want get your to Just sense there.

Alok Maskara

And that but shortages, are not the believe think, might actually hourly more little I ease are especially to these changes going I Absolutely. mean, away, in any federal on go and incentives, Yes. labor one, I bit. permanent it a

yes, looking much So labor. machines. moving of were automating more production at the still equipment, are newer at work are qualified or frankly lines, most doing of manufacturing that be need very towards using workers those. pushing our machine automating But the and we temporary would good people aggressively operators ways continue actually automating the we looking using the very workers and that We -- we program those will programming and towards who

So, workforce, the but operations. operation, are operation including Cincinnati going the lower automate, have like choice, and of includes end to Riverside no we to we our our in aggressively, move

in moving direction. continue We will that

of U.S., change a for do not So, based just manufacturing in think step sort but I it's European needed, us, all companies.

Sarkis Sherbetchyan

just thought with deploying of are or you this over term a robotics this to the And difficult process planning time? it the and and automation, feel is get investments kind point, longer right, you more of on of finding comfortable kind

Alok Maskara

applying we comfortable feel the time. investments are We over

and a COVID vendors our in few and have a have little two Now are years in we may put bit moving quite that. specked decline our started are this In pause journey out forward. cases, we machines of ago. on we

not are types about times workers. are but I'm we'd than of lead no, concerned supplies, like, but different longer our So, those

been low for many shortage of some company with of largest automation that And of the scope, workers Our scale. wage in same competing for others. where have the warehouse mind, land up I our suppliers, and keep is that the and higher years our pay in end. you end And the majority operators on workers have with true hourly, think

Sarkis Sherbetchyan

That’s at I to kind in got want good. gas, the Elektron, think back come a out. shout of to the magnesium the alloy XX-Q, and product I oil mix

back seeing get have of Are oil regards of say margin in say, the reset changing where that, higher -- there some given anything there? expectations or those kind I you prices let's are come customers Just demand sense maybe So, kind should products for to in and we to anything's changed of COVID or for those of that at want baseline still kind kind and feeling levels? bit a to better? that of should little if expect a trough

Heather Harding

said, or about flat year I'll around guided of certainly, single million oil million was something stronger $X and $X we're dollars. And in low QX gas Yeah. to that. take and slightly QX, for was to million talking that this Sarkis, terms we we sales than And last year. but

kind continue and see that. did sales we SoluMag, to So, of we of maintain

we the historical in nothing We expect prior the a a it in in periods. our goes to huge but oil, we what aren't built huge and oil slightly be rebound, we're flat watching for haven't to year, saw gas on like but with we planning maybe of some up Certainly, from increase. actively regards to price of

it range. was in it in but QX, single stronger million low dollar was So, the

Sarkis Sherbetchyan

product in think back and some general, No. the that I to think it were fantastic were things and No, mean, older I was it's I the feedback understood. And displace about product step of if could a guess, that that I used.

year saw but maybe not million product, also So, maybe was in it's -- or it's $X not what XXXX. per XXXX I it we think

next you basis? an to level is in get or the that year product appropriate two So, would an on what maybe aspirational think annual

Alok Maskara

Sure.

that Sarkis. I one, think, me let take

normal. then, levels peaks that which XXXX the lows, stocking than forward, saw being So, some I was going right? clearly has And caused So, saw mean, well. of I not higher we And think some in was COVID as then, we destocking with hit we good that impact. the an

very remain forward, optimistic going think we the I about product.

terms new in key the initiatives continues strategic which added products in substitution. getting our reviews to very We of get there. positive new -- And of have the formulations is customers, especially one

And product expect in the to So, the I we back let's then, We to annual double-digit on forward, oil sticking we more needs million. when QX in share millions continue to the into run growing, -- around as think, with QX, have single going rate, more talk go improve. we can especially it do digit numbers there. say -- prices would

Sarkis Sherbetchyan

That's all No. you. Fantastic. for me. Thank

Alok Maskara

Sarkis. Thanks,

Operator

comes next Your of the Markets. Michael KeyBanc line Capital question Leshock from with

Michael Leshock

and Alok Heather, morning. good Hey,

Alok Maskara

morning. Good Hi.

Heather Harding

Good morning, Michael.

Michael Leshock

So, otherwise? Do year-to-date given wanted to back those supply just challenges, you firstly, chain and I ask impact how cost going the progress there some forward? inflationary on or pressures recent any see of give your will reduction market

Alok Maskara

up Michael, may let others. perspective, that's any a got I faced cost quarter QX saw, and have and net cost net from our mean, as me take a of from great that because inflation strong you we that. reductions impact was additional

for things expect matching we have and continue doing with Now, general like and well pricing. done always inflation, that well to

So, it be the or a turns not big long-term winner loser, in continues. out that to

we job, while had and those reductions, have will since cases, continue I to think so managing freighting we to impact is things those become do to did beginning increases cost given and the year, air of So, like other back. material two three the of price negatively the some disruptions plan in make freight And Net-net it, many really to already and this rapid looked no expenses going pricing. a do impact we us impact from that less, that that beyond better we sure the have quarter. air material -- which we freight cost and offsetting major hope to like guidance don't at,

Michael Leshock

for in the it. then, Got you cash restructuring how much year? have do costs And remaining

Heather Harding

prior it's at quarter from year-to-date, Michael, talked $XX single low out million we've million. guidance, And it's that millions to we been $XX the what far. so paid unchanged our In I think, Yeah. about,

Michael Leshock

see driving other of we should about your versus do what challenges seeing how me, third the and you're line market for and you lastly, in think the quarter given that second view And there? primarily quarter, some top Okay. macro

Alok Maskara

So, now, actually not our I'm quantitative material strong very Michael, which so labor availability around to concern, backlog and disruptions all you your why answer a is a spot to perspective, Michael, from right supply going is give raw and available. question,

those. backlog, concerned very of issues have we overall we are on the the ability given supply some fulfill material So, strong but to

we time lots in we So, better But numbers work hope uncertainty. is report to and some uncertainty through QX. the of to there need

Michael Leshock

you. Thank

Operator

next ends The for company further no regularly financial will discusses scheduled its call. you when call Luxfer At joining This questions. quarter today. October this Thank XXXX conference be time, there in third results. the the us XXXX of are

disconnect. now may You