Third-quarter net revenue, which excludes rare earth chemical surcharges of $5.3 million, was $109.2 million, down $4.0 million from net revenue of $113.2 million for the same period in 2011. Lower European automotive demand impacted our Elektron division’s revenue with underlying revenue, excluding translation and the impact of rare earth surcharges, down 8.2%. However, the impact was partly offset by growing sales for high-performance magnesium alloys and new zirconium industrial chemical catalysis products (“Chemcat”), both of key strategic importance to Luxfer Group going forward. Chemcat revenue grew 66% with sales of $1.5 million for the quarter, representing, we believe, on-going commercial applications rather than just prototype material.
The Gas Cylinders division’s revenue grew in the quarter by 4.5%, driven by rising composite cylinder sales and higher demand and revenues in medical oxygen and compressed natural gas (“CNG”) alternative fuel markets. This progress was in keeping with profit improvement plans for the division.
2011 profitability was significantly skewed to the third quarter of that year because of some exceptional gains in that quarter, but profits in 2012 have been much more consistent. Overall adjusted EBITDA at $20.0 million for the quarter was as expected, and the trading profit of $16.4 million represented a trading margin of 14.3%. The adjusted EBITDA margin was 17.5%. Adjusted net income was $10.2 million, which represents a margin on sales revenue of 8.9%, above the average for the year of 8.5%.
CEO COMMENTARYBrian Purves, Chief Executive, Luxfer Holdings PLC, commented: “Our Q3 of 2012 results are in line with our expectations and consistent with trading profit margins in the first half of this year, with comparisons to prior year distorted by the exceptional gains made in Q3 of 2011. Strategically we made significant progress in this third quarter of 2012, with good progress in sales of industrial catalyst products, and the acquisition of Dynetek Industries, which strengthens our global position in the growing market for alternative fuel gas containment. At a time when many industrial markets and economies remain in or close to recession, we are sowing seeds for future growth and profitability. We expect the recent successful Initial Public Offering on the New York Stock Exchange provides Luxfer with the financial firepower to commercialize the wide range of new products and technologies that we hope to bring to the market in the next few years.” FORWARD LOOKING STATEMENTS This report contains forward-looking statements.