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Luxfer Reports Third-Quarter 2012 Results

Stocks in this article: LXFR

Our strategy of improving the sales mix in traditional aluminum cylinder markets continued in the third quarter of 2012, and while overall unit volumes of aluminum cylinders were lower by -15% compared to the equivalent period of 2011, the change in sales mix resulted in a revenue increase of 2.5% over the same period. We saw strong demand for aluminum cylinders in U.S. beverage and industrial sectors and increased sales of our higher-pressure L7X ® cylinders into the European medical market.

Globally, sales volumes of composite cylinders increased by 14% in the third quarter of 2012 compared to the same period in 2011, and revenue was up 16% with growth in both the U.S. and Europe. Demand for composite cylinders in the healthcare sector remains particularly strong. Sales of our patented L7X ® composite cylinders in Europe more than doubled compared to the third quarter of 2011 as UK home oxygen providers purchased additional units to support new National Health Service contracts. Sales volumes of large composite cylinders used in alternative fuel vehicle systems were up 8% in the third quarter of 2012 compared to the prior year. This increase excludes any new volumes from Dynetek Industries, which Luxfer acquired towards the end of the quarter.

Component sales at Superform were down in the third quarter of 2012 compared to the third quarter of 2011 due to lower demand from automotive and rail sectors in Europe, but the drop was partially offset by increased demand from U.S. civil and military aerospace sectors.

The Gas Cylinder division’s third quarter trading profit of $4.0 million in 2012 represents a significant increase of $2.4 million, or 150%, over the $1.6 million trading profit in the third quarter of 2011. Increased sales volumes, sales mix improvements and higher selling prices raised trading profit by $2.3 million in the quarter. A $0.3 million increase in retirement benefit charges was allocated to the Gas Cylinders division in the quarter compared to the equivalent period of 2011, but other costs decreased by $0.4 million in the same period.

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